Section
138 of the Negotiable Instruments Act, 1881 (‘Act’) stipulates that when a
‘person’ draws a ‘cheque’ on an account maintained by him with a bank pursuant
to a legally recoverable debt towards another person, and if such ‘Cheque’ is
returned by the bank unpaid for reasons stated in the Act, such ‘person’ is
deemed to have committed an offence punishable with imprisonment or with
fine.
Section
139 of the Act creates a presumption in favour of the holder of the cheque
i.e., cheque is received for discharge of a debt, in whole or in part, unless
contrary is proved. But, it is the complainant, who has to prima faice prove the existence of a legally recoverable debt. Reference, can be made to the recent decision of the Hon'ble Orissa High Court in I.B. Enterprises Vs Konark Supply Agency. In this case, the Complainant alleged that he made some supplies to the Accused, and in return, Accused handed over him the cheque. The Hon'ble rejected the case of the accused since he did not produce any bills or books of accounts. The relevant portion is extracted herein under;
"In the case at hand, from the evidence of the complainant, it appears that in order to establish the offence under Section 138 of the N.I. Act against the accused-petitioner, while it is claimed that the material was duly supplied to the accused by issuing bills in favour of the accused (all those bills were given to his conducting advocate to be filed in the court of law, if required). The aforesaid fact by itself would indicate that neither the bills nor books of accounts were ever produced before the trial court and the court proceeded on a presumption under Section 118 of the Act which was not capable of replacing evidence since the petitioner (accused) had discharged his initial onus by raising his defence of advance payment and non-supply and thereby discharging the initial onus of proof regarding the existence of consideration being improbable or doubtful and consequently the onus stood shifted to the plaintiff to prove it as a matter of fact. In the case at hand, neither the books of accounts nor the bills were ever produced in course of the trial and both the trial court as well as appellate court proceeded merely on the basis of a presumption, which in the fact situation of the present case was not available to be relied upon."
Also, the Complainant should prove his financial capacity to extend the hand loan. Recently, in a case titled as RAMDAS Vs KRISHNANAND, wherein, the Complainant alleged that the accused took hand loan from the Complainant, and in discharge of the hand loan, the accused issued a cheque to the tune of Rs. 5 lakhs to the complainant and subsequently, the cheque dishonored. The Hon’ble Supreme Court of India, rejecting the allegations of the Complainant held ‘The complainant himself stated in the cross-examination that after the Cheque was returned without payment, he has not made any enquiry with the Bank as to whether sufficient funds were available or not in the account of the accused. In the absence of any authenticated and supporting evidence, we cannot believe that the complainant-respondent who is employed under the appellant-accused, has raised an amount of Rs.1,75,000/- that too by obtaining loan of Rs.1,50,000/- from a Bank, only to give hand loan to his employer. As the complainant himself admitted that his net savings in a year comes to about Rs. 10,000/-, it is not trustworthy that he was in a position to extend hand loan of such big amount to the appellant.”
"In the case at hand, from the evidence of the complainant, it appears that in order to establish the offence under Section 138 of the N.I. Act against the accused-petitioner, while it is claimed that the material was duly supplied to the accused by issuing bills in favour of the accused (all those bills were given to his conducting advocate to be filed in the court of law, if required). The aforesaid fact by itself would indicate that neither the bills nor books of accounts were ever produced before the trial court and the court proceeded on a presumption under Section 118 of the Act which was not capable of replacing evidence since the petitioner (accused) had discharged his initial onus by raising his defence of advance payment and non-supply and thereby discharging the initial onus of proof regarding the existence of consideration being improbable or doubtful and consequently the onus stood shifted to the plaintiff to prove it as a matter of fact. In the case at hand, neither the books of accounts nor the bills were ever produced in course of the trial and both the trial court as well as appellate court proceeded merely on the basis of a presumption, which in the fact situation of the present case was not available to be relied upon."
Also, the Complainant should prove his financial capacity to extend the hand loan. Recently, in a case titled as RAMDAS Vs KRISHNANAND, wherein, the Complainant alleged that the accused took hand loan from the Complainant, and in discharge of the hand loan, the accused issued a cheque to the tune of Rs. 5 lakhs to the complainant and subsequently, the cheque dishonored. The Hon’ble Supreme Court of India, rejecting the allegations of the Complainant held ‘The complainant himself stated in the cross-examination that after the Cheque was returned without payment, he has not made any enquiry with the Bank as to whether sufficient funds were available or not in the account of the accused. In the absence of any authenticated and supporting evidence, we cannot believe that the complainant-respondent who is employed under the appellant-accused, has raised an amount of Rs.1,75,000/- that too by obtaining loan of Rs.1,50,000/- from a Bank, only to give hand loan to his employer. As the complainant himself admitted that his net savings in a year comes to about Rs. 10,000/-, it is not trustworthy that he was in a position to extend hand loan of such big amount to the appellant.”
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