The presumption of a legally enforceable debt under Section 139 of the Negotiable Instruments Act is in favor of the holder of the cheque and can only be rebutted by sufficient evidence.

JUDGMENT :

Mr. Deepak Gupta, J.

Defendants are in this Regular Second Appeal against the concurrent findings of the Courts below.

2.1. As per plaintiff (respondent herein), Jagdish Singh (since deceased- the predecessor-in-interest of the defendants - appellants herein) had borrowed an amount of Rs. 5,25,000/- from him on 24.04.2015 and issued a cheque No.33000963 dated 24.05.2015 for an amount of Rs. 5,25,000/- drawn on Union Bank of India, Branch Jind from his account. On presentation, the cheque was dishonored for insufficient funds. After making statutory compliances, plaintiff filed complaint under Section 138 of the Negotiable Instruments Act, 1881 [for short ‘the NI Act’] but on account of death of drawer of the cheque namely Jagdish Singh, the proceedings stood dropped. Thereafter, plaintiff approached the defendants, who are the legal heirs of Jagdish Singh for making the payment, but they refused to do so. With these submissions plaintiff prayed for a decree of recovery of Rs. 6,35,250/- including the interest.

2.2. Defendants-appellants denied the claim. They not only denied borrowing of an amount by their predecessor-Jagdish Singh but further denied that said Jagdish Singh had issued any cheque.

2.3. Necessary issues were framed. Evidence produced by the parties was taken on record. Trial Court decreed the suit on 20.08.2019 and the appeal filed by the defendants was dismissed by the First Appellate Court on 03.07.2024.

3. Assailing the aforesaid findings, it is contended by learned counsel that the Courts below have proceeded to decree the suit based upon presumption under Section 139 of the NI Act. It is contended by learned counsel that there may be presumption regarding the cheque having been issued in discharge of any debt or liability, but there is no presumption regarding existence of legally recoverable debt. It is further contended that there was no documentary proof regarding lending the amount by the plaintiff to Jagdish Singh. Besides, an amount of more than Rs. 20,000/- cannot be given in cash and so, there is violation of Section 269 SS of the Income Tax Act and for all these reasons, the suit was liable to the dismissed.

4. After considering submissions made by learned counsel for the appellants, this Court does not find any merit in the appeal.

5. As observed by the Courts below that it is not in dispute that defendants-appellants inherited the estate of deceased Jagdish Singh. Defendants did not dispute that cheque (Ex-P1) pertains to the account of deceased-Jagdish Singh. Testimony of PW-1, an official of the Bank, proves that cheque was dishonored due to ‘insufficient funds’ and not for the reason of ‘difference in signature’. Meaning thereby, signature on the cheque EX-P1 to be that of Jagdish Singh, are well proved on record. There is no plea by defendants that cheque was either lost or stolen. In the circumstances, the defence pleaded by the defendants to the effect that cheque might have been procured by the plaintiff is just based upon assumption.

6. Once it is proved that cheque (Ex-P1) bearing the signature of Jagdish Singh was issued from his account, the presumption under Section 118 (a) & (b) and 139 of the NI Act is available in favour of the plaintiff, which reads as under:-

“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.”

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, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration;

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