The presumption of a legally enforceable debt under Section 139 of the Negotiable Instruments Act is rebuttable and must be established during trial; the High Court cannot quash proceedings based on disputed facts.

JUDGMENT

Pankaj Jain, J. (Oral)

Present petition has been filed under Section 482 Cr.P.C. impugning summoning order dated 21.10.2021 and setting aside order dated 31.01.2024 passed by JMFC, Gurugram in complaint case No.15226 of 2020 dated 09.07.2020 under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as 'the 1881 Act').

2. The respondent filed complaint under Section 138 of the 1881 Act in which the petitioner has been summoned to face summary trial vide order dated 21.10.2021. Further in compliance of Section 143-A interim compensation has been awarded against the petitioner and he has been ordered to deposit 20% of the cheque amount.

3. Counsel appearing for the petitioner while assailing the summoning order as well as complaint submits that so far as statutory presumption as provided under Sections 118 and 139 of the 1881 Act is concerned, that is not attached to legally enforceable debt. He submits that the complainant has merely relied upon ledger account to impress upon the Trial Court that there is a legally enforceable debt recoverable from the petitioner. The same is not sufficient. It has been contended that in the absence of there being invoices and delivery of the material, the presumption cannot be raised to proceed against the petitioner. He thus submits that it is a case wherein this Court should exercise jurisdiction under Section 482 of the Code to quash the complaint as well as subsequent proceedings.

4. I have heard counsel for the petitioner and have carefully gone through records of the case.

5. In the considered opinion of this Court the plea raised by counsel for the petitioner is misconceived. In order to appreciate the plea, it will be apt to peruse the bare provisions as contained under Sections 118 and 139 of the 1881 Act. The same read as under:

"118. Presumptions as to negotiable instruments. - Until the contrary is proved, the following presumptions shall be made:-

(a) of consideration:-that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;

(b) as to date:-that every negotiable instrument bearing a date was made or drawn on such date;

(c) as to time of acceptance:-that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity;

(d) as to time of transfer:-that every transfer of a negotiable instrument was made before its naturity;

(e) as to order of indorsements:-that the indorsements appearing upon a negotiable instrument were made in the order in which they appear then on;

(f) as to stamp:- that a lost promissory note, bill of exchange or cheque was duly stamped;

(g) that holder is a holder in due course:-that the holder of a negotiable instrument is a holder in due course: provided that, where the instrutment has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him."

139. Presumption in favour of holder. - It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.

6. Section 118 is part of Chapter XIII which deals with Special Rules of Evidence and the same is subject to proof. Meaning thereby that such presumption needs to be rebutted during the course of evidence and as per the dictum of Section 118 the presumption is w.r.t. consideration, date, time of acceptance, time of transfer, order of endorsement, stamp and that the holder of the negotiable instruments is holder in due course. Section 139 is part of Chapter XVII that deals with pen