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IN THE HIGH COURT AT CALCUTTA
TIRTHANKAR GHOSH, J.
Sri Kashinath Shaw – Appellant
Versus
Sri Rupesh Gupta & Anr. – Respondents
CRA 53 of 2021
Decided on : 24-07-2023
NEGOTIABLE INSTRUMENT ACT, 1881 - SECTION 138 - DISHONOURED CHEQUE - REBUTTAL OF PRESUMPTION - REVERSE ONUS PROVISIONS - INTERPRETATION AND APPLICATION.
Fact of the Case:
The complainant, a businessman, sold a piece of land measuring 90.75 decimals to the accused for a total consideration of Rs. 45,00,000/-. The accused made partial payment by cash and issued a cheque for Rs. 10,00,000/- which was dishonoured twice with the remark "exceeds arrangement." The complainant issued a demand notice, but the accused failed to make payment. The complainant filed a complaint under Section 138 of the Negotiable Instrument Act.
Finding of the Court:
The trial court acquitted the accused, holding that the complainant failed to dislodge the prosecution case with his own document, Ext. A series (Sale Deed), and that the accused was entitled to be acquitted. The appellate court set aside the trial court's order, holding that the oral and documentary evidence adduced by the accused failed to overcome the evidentiary threshold for rebutting the provisions of Section 139 of the Negotiable Instrument Act.
Issues: 1. Whether the accused successfully rebutted the presumption under Section 139 of the Negotiable Instrument Act? 2. Whether the trial court erred in acquitting the accused without appreciating the basics of Section 139 of the N.I. Act?
Ratio Decidendi: 1. The presumption under Section 139 of the Negotiable Instrument Act can be rebutted by adducing evidence which is to be appreciated on the foundation of the principles of preponderance of probability. 2. The accused failed to substantiate his defence that the cheque was issued as security for the purchase of 3 cottah 7 chittaks of land and that the sale did not materialise. 3. The absence of a cash receipt in respect of the land relating to 90.75 decimals tilted the case in favour of the prosecution.
Final Decision: The appellate court set aside the trial court's order of acquittal and directed the accused to appear before the jurisdictional court for sentencing under Section 138 of the Negotiable Instrument Act.
JUDGMENT :
Tirthankar Ghosh, J.
1. The present appeal has been preferred against the judgment and order dated 16.10.2020 passed by the learned Judicial Magistrate, 7th Court, Alipore, South 24 Parganas in Case No.C/5192 of 2010 under Section 138 of the Negotiable Instrument Act, wherein the learned trial Court was pleased to acquit the accused from the charges.
2. The genesis of the case was a complaint initiated by one Kashinath Shaw (hereinafter referred to as ‘the complainant’) against Rupesh Gupta (hereinafter referred to as ‘the accused/respondent’). It was alleged that the complainant is a businessman and absolute owner of a piece and parcel of land measuring 90.75 decimals which was conveyed to the opposite party and one of his relation for a total consideration of Rs.45,00,000/-. Against the total consideration the accused respondent made payment by cash and a cheque being cheque no.036692 of Rs.10,00,000/-dated 10.04.2010 in favour of the complainant. The said cheque was drawn on Central Bank of India, Ultadanga Branch which was signed by the accused no.1 as the proprietor of Om Kutir Udyog. The said cheque was deposited by the complainant with his banker State Bank of India, Garia Branch on 19.04.2010. However, the same was dishonoured with the remarks “Exceeds arrangement”. The accused thereafter requested the complainant to wait for some time and thereafter deposit the cheque. The said cheque was again presented on 08.06.2010 with the complainant’s banker but the same was again dishonoured with the endorsement “Exceeds arrangement”, the intimation of such dishonour was received by the complainant on or about 17.06.2010. The complainant issued demand notice dated 21.06.2010 which was despatched on the same date, wherein the amount covered by the dishonoured cheque was demanded to be paid within 15 days from the date of receipt of such notice. It has been alleged that in spite of receiving the notice the accused persons failed and neglected to make any payment. The postal endorsement reflected the remarks “left” and the acknowledgement card was received by the complainant on or about 21.07.2010. The complainant thereafter filed the complaint.
3. On receipt of the complaint the learned Magistrate was pleased to take cognizance of the offence and transfer the case to the Learned Judicial Magistrate, 7th Court, Alipore. Pursuant to issuance of process the accused/ respondent appeared before the learned trial Court and was released on bail. The substance of the accusation was read over and explained to the accused under Section 251 Cr.P.C. to which he pleaded not guilty and claimed to be tried.
4. In order to prove its case the complainant examined himself as prosecution witness and also relied upon 7 documents which included the cheque, marked as Ext.1; two bank return memo, marked as Ext.2 series; demand notice marked as Ext.3; postal receipt marked as Ext.4; A/D Card marked as Ext.5; undelivered envelope containing demand notice marked as Ext.6 series; the certified copy of the written statement filed by the accused in Title Suit No. 70/2011 before the learned Civil Judge, Junior Division, Barrackpore marked as Ext.7. The accused did not adduce any oral evidence but in course of cross-examination of the prosecution witness relied upon 9 (nine) certified copy of Sale Deed which were marked as Ext.A series (Ext. A – Ext. A/8). The learned trial Court on appreciation of the materials placed by the prosecution and the defence was pleased to observe that the main contention of the complainant relate to nine deeds executed in favour of the accused for which a sum of Rs.35,00,000/-was received by the complainant and a sum of Rs.10,00,000/-was received by cheque. According to the learned Magistrate Ext.A series reflects that a sum of Rs.45,00,000/-was received and the said Ext.A did not reflect that any consideration money was to be received through cheque (Ext.1). Learned Magistrate also observed that complainant during cross-exa
The presumption under Section 139 of the Negotiable Instrument Act can be rebutted by adducing evidence which is to be appreciated on the foundation of the principles of preponderance of probability.
Dishonour of cheque – It cannot be a probable defence that complainant has no capacity to pay money until and unless initial defence is set up by a reply notice or accused examines his witnesses and ....
The main legal point established in this judgment is that under Section 139 of the Negotiable Instruments Act, there is a presumption that a cheque is issued for the discharge of a debt or liability.....
The presumption of liability under Sections 138 and 139 of the N.I. Act is rebuttable, but the burden lies on the accused to provide evidence to disprove the existence of a legally enforceable debt o....
The court held that failure to prove a legally enforceable debt invalidates a cheque under Section 138 of the Negotiable Instruments Act.
The presumption under Section 139 of N.I. Act is a presumption of law, as distinguished from the presumption of facts. Presumptions are rules of evidence and do not conflict with the presumption of i....
Cheques issued in discharge of a lawful liability create a presumption of guilt under Section 138, which the accused must rebut to avoid conviction.
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