Saturday, 26 January 2019

Whether court should draw presumption U/S 139 of NI Act if execution of cheque is proved?

The learned counsel for the respondent admitted that execution of the 
cheque and also the signature found in the cheque.  Therefore, once execution 
of cheque is admitted, it is a legal presumption under Section 139 of 
Negotiable Instrument Act.  The cheque was issued for discharging legally 
enforceable debt.  No doubt the presumption is rebuttable. Though, admitted 
that the said cheque was issued for only security purpose and the respondent 
was only a working partner and he has not invested or contributed any money 
to the partnership firm.  Therefore, at the time of admitting him in the 
firm, the respondent had executed the cheque for the security purpose. 

7.Once issuance of  cheque is being admitted and even for security 
purpose, the presumption under Sections 118 and 139 of Negotiable Instrument 
Act and it is for the accused has to rebut the presumption there is no 
legally enforceable debt and cheque has not been issued for legally 
enforceable debt.  Therefore, the contention raised by the learned counsel 
for the respondent is not acceptable and the authorities submitted by the 
respondent is not applicable for present case in the hand.

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED: 19.01.2019
CORAM
 MR. JUSTICE P.VELMURUGAN
Crl.A.(MD).No.179 of 2008


A.K.Mohammed Farook    Vs. M.Syed Jaheer Hussain  



 
This Criminal Appeal has been filed against the Judgment dated 
21.02.2008, made in C.C.No.451 of 2006, on the file of the learned Judicial 
MagistrateII, Trichy, wherein the learned Magistrate acquitted the 
respondent/accused. 
2. The case of the complainant is that the appellant/Complainant had 
filed a complaint against the respondent/accused, under Section 138 of the 
Negotiable Instrument Act, before the learned Judicial Magistrate;II, 
Tiruchirappalli. It is stated that both the appellant and respondent are 
running a partnership firm and subsequently, the  partnership firm was 
dissolved on 22.03.2006.  At the time of settling the accounts, in order to 
give a sum of Rs.1,50,000;(Rupees One Lakh Fifty Thousand Only) by the 
respondent, he  had issued a cheque in favour of the appellant. The above 
said cheque was presented before the ICICI Bank, Trichy Condonment Branch on 
21.06.2006 and the said cheque was returned due to insufficient fund.  
Therefore,  the appellant issued a statutory notice Ex.A.3 and the said 
notice was received by the respondent. Even after receipt of the notice, he 
did not repay the money mentioned in the statutory notice Ex.A.3 and 
therefore, the appellant had filed a complaint before the learned Magistrate, 
under Section 138 of the Negotiable Instrument Act.  

3. The learned Magistrate after taking the complaint on file and 
enquiry found that the respondent has not committed any offence under Section 
138 of NI Act. Against which the complainant has filed the present appeal.
4.No representation on the side of the appellant. Though the appeal is 
pending for more than 10 years, the appellant has not shown any interest to 
proceed the appeal. However, heard the learned Counsel for the respondent. He 
would submit that at the time of admitting the respondent into the firm for 
security purpose, the cheque was issued, but the same was not issued for 
legally enforceable debt. Onus of the accused in criminal case is not as 
heavy as that of prosecution and he may be compared with defendant in civil 
case. He has placed reliance in the judgment in MS.Narayanan Menon @ Mani Vs. 
State of Kerala and another, reported in 2006(3) CTC 730.

5. Perused the records.

6.The learned counsel for the respondent admitted that execution of the 
cheque and also the signature found in the cheque.  Therefore, once execution 
of cheque is admitted, it is a legal presumption under Section 139 of 
Negotiable Instrument Act.  The cheque was issued for discharging legally 
enforceable debt.  No doubt the presumption is rebuttable. Though, admitted 
that the said cheque was issued for only security purpose and the respondent 
was only a working partner and he has not invested or contributed any money 
to the partnership firm.  Therefore, at the time of admitting him in the 
firm, the respondent had executed the cheque for the security purpose. 

7.Once issuance of  cheque is being admitted and even for security 
purpose, the presumption under Sections 118 and 139 of Negotiable Instrument 
Act and it is for the accused has to rebut the presumption there is no 
legally enforceable debt and cheque has not been issued for legally 
enforceable debt.  Therefore, the contention raised by the learned counsel 
for the respondent is not acceptable and the authorities submitted by the 
respondent is not applicable for present case in the hand.  On reading of the 
entire materials this Court finds that the appellant proved his case beyond 
reasonable doubt. The respondent also admitted the execution of the cheque. 
Therefore, it is for the respondent to rebut the presumption in the manner 
known to law. In this case, admittedly the respondent has not rebutted the 
legal presumption in the manner known to law. Therefore, this Court finds the 
respondent guilty under Section 138 of NI Act. The judgment of the Magistrate 
is set aside and the appeal is allowed.


8. Therefore, under these circumstances, this Court finds that the 
learned Magistrate failed to appreciate the evidence and also draw the legal 
presumption and also the respondent failed to rebut the statutory 
presumptions. Hence, the respondent/accused is directed to appear before this 
Court, on the next Special Sitting for question of sentence. 

15.12.2018

sji/ksa


As directed by this Court on 15.12.2018,                                         
the respondent / accused is present before this Court and question of 
sentence was asked,  for which he has stated that he has not given the cheque 
for legally enforceable debt, but has given only for security.  

2.Considered his submissions. 

3.As this Court has already found the respondent guilty under Section 
138 of NI Act, convicts the accused under section 138 of the Negotiable 
Instrument Act and sentences him to undergo six months Simple Imprisonment 
and to pay a fine of Rs.1,50,000/~ within two months from today and the same 
shall be paid to the complainant  by way of  compensation, in default to 
undergo two months Simple Imprisonment.

4.The trial Court is directed to secure the accused and commit him to 
prison.

19.01.2019
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