The presumption in favor of the holder of a dishonored cheque under Sec.139 is a key legal principle in cases under Sec.138 of the Negotiable Instruments Act, 1881.

V. M. Jain, J.

1. This order shall dispose of the above mentioned five criminal Misc. petitions, having common question of law and facts.

2. For the purpose of convenience, the facts of Crl. Misc. No.1154-M of 1993 may be noticed. Shyam Rattan complainant filed a criminal complaint under Sec.138 of the Negotiable Instruments Act, 1881 (herein referred to as Act)against accused Chand Rattan Newar. In the said complaint, it was alleged that the accused is the real brother of the complainant and that a joint sitting of the complainant and the accused besides Suresh Rattan and one Prithvi chand and taken place at Sirsa in the first week of June, 1991, for resolving a dispute regarding the settlement of payment of outstanding amount by the accused to the complainant and then with the persuasion of the efforts of suresh Rattan, real brother of the complainant and the accused and also of prithvi Chand, who is a common friend and well wisher of the family, a settlement was arrived at between the complainant and the accused and in pursuance thereof the accused agreed to make the payment of the Outstanding amount of Rs.1,38,700/- within a period of three weeks. Thereupon the accused handed over a cheque dated 25.6.1991 of the value of Rs.1,38,700/-to the complainant. It was alleged that when the complainant deposited the said cheque with his Banker for payment, the same was returned back unpaid with the objection "referred to Drawer". Various other allegations were made regarding the service of notice, etc. and the non-payment of the amount by the accused to the complainant within stipulated period in spite of notice. It was accordingly prayed that the accused be summoned to face trial, etc. After the filing of the criminal complaint, the complainant produced preliminary evidence by himself appearing in the witness box as PW-1 and examining pw-2 Rattan Singh to prove the dishonour of the cheque in question. After hearing the Counsel for the complainant, the learned magistrate vide order dated 27.1.1992 ordered the summoning of the accused for the offence under section 138 of the Act.

3. The learned Counsel appearing for the accused-petitioner submitted before me that there was no debt or liability which was to be discharged and that being so no case under Sec.138 of the Act was made out. It was submitted that there was nothing on record to show that there was any legally enforceable debt or other liability, for which the cheque in question was issued.

4. However, I find no merit in this contention of the learned Counsel for the petitioner. In I (1998) BC 421 (SC)=iii (1998) SLT 226-I (1999)CCR 44 (SC)=air 1998 SC 1057, M/s. Modi Cement Ltd. V/s. Kucha Kumar nandi, it was held by Their Lordships of Supreme Court that once a cheque is issued by the drawer presumption under Sec.139 in favour of holder must follow. It was further held in the said authority that merely because the drawer issues a notice to the drawee or to the Bank for stoppage of the payment, it will not preclude an action under Sec.138 by the drawee or the holder of a cheque in due course. It was further held in the said authority that the accused of course would get an opportunity under Sec.139 of the Act to rebut the presumption at the trial.

5. In II (1991) BC 398 = 1991 Company Cases 273 (Calcutta), Voltas limited and Ors. V/s. Hiralal Agarwalla and Ors. , it was held by Calcutta high Court that the remarks "refer to Drawer" necessarily means as per Banking custom that the cheque has been returned for want of funds in the account of the drawer of the cheque. This finding was given by the Calcutta High Court after the complainant had placed on record copies of letters from three top bank officials, from Allahabad Bank, Bharat Chamber of Commerce and state Bank of Bikaner and Jaipur.

6. In II (1999) BC 525-III (1999) CCR 531 = 1999 (2) Civil Court Cases 299, Devendra Kumar Rai V/s. Ram Gopal Rai, it was held by Allahabad High court that the question that the peti