IMPORTANT POINT
The presumption under Section 139 of the Negotiable Instruments Act is rebuttable, placing the burden on the accused to prove otherwise, particularly regarding the service of demand notice.

JUDGMENT :

(P.G. Ajithkumar, J.)

This is an appeal filed under Section 374(2) of the Code of Criminal Procedure, 1973. The appellant is the complainant in C.C.No.106 of 2004 on the files of the Judicial Magistrate of the First Class-II, Thamarassery. As per the judgment dated 31.10.2005, the 1st respondent-accused was acquitted. The said judgment of acquittal is under challenge in this appeal.

2. The appellant filed the complaint with the following allegations:

In November 2003, the 1st respondent availed a loan of Rs.70,000/- from the appellant. The amount of debt was agreed to be repaid on 20.12.2003. At the time of borrowing, the 1st respondent issued Ext.P1 cheque which was dated 20.12.2003. When the cheque was presented for encasement, it was returned unpaid for the reason ‘funds insufficient’. A demand notice was issued. The 1st respondent evaded the notice. The amount due under the cheque remained unpaid.

3. The 1st respondent appeared before the learned Magistrate and denied the accusation. The appellant examined himself as PW1 and proved Exts. P1 to P6. After closing the prosecution evidence, the 1st accused was questioned under Section 313(1)(b) of the Code. He denied the incriminating circumstances appeared in evidence. He filed a written statement setting forth the contentions that the cheque was obtained under threat and it was in relation to his son's marital dispute. His son's father in law obtained four blank cheques and misusing one among such cheques this case was filed through his relative. It was also stated that he did not receive any demand notice. On his side DWs 1 to 4 were examined and Exts.D1 to D7 were marked. The court below after considering the evidence on record found the 1st respondent not guilty and acquitted him.

4. In the appeal preferred after obtaining leave, notice was duly served on the 1st respondent. He did not chose to appear before the court.

5. Heard the learned counsel for the appellant and the learned Public Prosecutor.

6. The trial court after considering the evidence on record found that execution of Ext.P1 cheque was admitted by the 1st respondent and therefore a presumption under Section 139 of the NI act was available. The further finding is that the 1st respondent failed to rebut the said presumption. It was however found that the appellant failed to give a notice demanding the amount of cheque to the 1st respondent as contemplated in the proviso (b) to Section 138 of the NI Act and therefore the prosecution could only fail.

7. Dw4 is the 1st respondent-accused. He deposed before the court admitting his signature in Ext.P1. He asserted in the box that he wrote his name and signature alone in Ext.P1. Other entries in it were stated to be entered subsequently by the appellant. The court below acting upon that evidence drew a presumption under Section 139 of the N.I.Act.

8. In Bir Singh v. Mukesh Kumar [(2019) 4 SCC 197] the Apex Court held that a meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. It was further held that even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt.

9. The Apex Court in Basalingappa v. Mudibasappa [(2019) 5 SCC 418] explained the law relating to presumption under Sections 118(a) and 139 of the N.I.Act and the rebuttal. It was –

“23. We having noticed the ratio laid down by this Court in above cas