June 13, 2018

Important Case Laws on Dishonour of Cheque under Section 138 of Negotiable Instruments Act, 1881

1. Rangappa v. Mohan, AIR 2010 SC 1898 

Negotiable Instruments Act, 1881 - Section 138 - Existence of legally recoverable debt or liability - Is matter of presumption u/s 139. 

2. Narinder Kumar v. Harnam Singh, 2000 Cri.L.J. 257

When no subsisting debt or other liability is found to have been established which the accused was legally bound discharge or was legally enforceable debt or other liability not it is proved that the cheque was issued with a view to such debt/liability. The accused thus, is entitled for acquittal solely on this ground. 

3. John K. Abraham v. Simon C. Abraham, Laws (SC) 2013 - 12 - 4 

The complainant not sure as to who wrote cheque nor aware as to when and where existing transaction took place for which cheque was issued by the accused - Conviction of accused is not proper. 

4. Binod Kumar Lal v. State of Jharkhand, reported in Laws (JHAR) 2008 - 3 - 5 

The Hon'ble Court had upheld the view taken by the learned lower Appellate Court. 

5. Shiva Murthy v. Amruthraj, reported in ILR 2008 KAR 4629 

It is only after satisfying that the complainant has proved existence of legally enforceable debt or liability, the Courts could have proceeded to draw presumption under Section 139 of the N. I. Act and thereafter find out as to whether or not the accused has rebutted the said presumption. 

6. T. Vasanthakumar v. Vijayakumari, 2015 Cri.L.J. 2853 

Negotiable Instruments Act, 1881 - Sections 138 and 139 - Dishonour of Cheque - Appeal against acquittal - Cheque as well as signature on it not disputed by accused - Presumption under S.139 would be attracted - Story brought by accused that cheque was given to complainant long back in 1999 as a security to a loan; the loan was repaid but complainant did not return security cheque - Is unworthy of credit, apart from being unsupported by any evidence - Mere printed date on cheque by itself cannot be conclusive of fact that cheque was issued in 1999.

7. M/s. Amolak Textiles, Bengalore v. M/s. Uphar Fashions, 2009 (1) KCCR 249 

Negotiable Instruments Act, 1881 - Section 138 - Accused not leading any evidence to substantiate the plea that the cheques duly signed and given to his son were lost - The statutory presumption works in favour of the complainant.

8. N. Mangegowda v. N. V. Prakash, 2017 (4) KCCR 2933 

Negotiable Instruments Act, 1881 - Section 135 - Dishonour of cheque - Plea as to loss of signed cheque in Bus - No complaint lodged with Police - Accused failed to produce acceptable rebuttal evidence as to how the complainant came in possession of cheques - Conviction and sentence held proper.

9. Shakuntala Devappa v. B. R. Ravishankar, 2014 (5) KCCR 721 

Negotiable Instruments Act, 1881 - Sections 138 and 118 - Dishonour of cheque - Revision against conviction - Accused pleading that, cheques in question were stolen - That there was no necessity for him to borrow money from complainant - But under law there is a presumption in favour of holder of cheque that he holds it for consideration - Accused failing to rebut such presumption - Conviction upheld. However, amount of fine reduced. 

10. M. B. Rajasekhar v. Savithramma, Laws (KAR) 2011 - 9 - 5 

Negotiable Instruments Act, 1881 - Sections 138 and 139 - Criminal Procedure Code, 1973 - Section 378 - Dishonour of cheque - Acquittal - Cheque issued towards repayment of hand loan returned unpaid - Change of date of cheque amounts to material alteration and it cannot be said that it is formal - When alteration could be seen from naked eyes there is no necessity of any expert opinion - When allegation itself is that cheque was given as security then it is to be held that cheque was not towards repayment of debt or liability - Defense put forth by accused is probable and it is substantiated on the basis of material on record - No grounds to warrant interference in order of acquittal - Appeal dismissed.

11. Vinita S. Rao v. Essen Corporate Services Private Limited, (2015) 1 SCC 527 

The cheques in question were issued as a security and not for the purpose of repayment of legally recoverable debt, and therefore, the present complaint is not maintainable.

12. H. Manjunath v. A.M. Basavaraju, ILR 2014 Kar. 6572 

Negotiable Instruments Act, 1881 - 138 - Offence under - Judgment of acquittal - Appealed against - Absence of statement in the complaint as to when the amount was actually given to the accused - Absence of material particulars of the transaction in the complaint - Except signature all other entries are in different handwriting, different ink and undoubtedly made at different time - Mentioning of merely the date of issue of cheque without any material particulars - Held, Judgment of acquittal is justified.

13. Goa Plast Pvt. Ltd. v. Shri Chico Ursula D' Souza, 1996 Cri. L.J. 2344 

Mere presentation of cheque would not amount to acceptance of debt or liability on part of accused.

14. K. Subramani v. K. Damodara Naidu, (2015) 1 SCC 99

If the complainant fails to prove the legally recoverable debt payable by the accused, then the acquittal of the accused is proper.

15. Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513 

The accused in a trial under Section 138 of the Act has to two options. He can either to show that the consideration and debt did not exist or that under the particular circumstances of the case the non - existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumptions an accused is not expected to prove his defense beyond reasonable doubt as is expected of the complainant in a criminal trial. That, the accused has also an option to prove the non - existence of consideration and debt or liability either by letting in evidence or in some clear and exceptional cases, from the case set out by the complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial. Once such rebuttal evidence is adduced and accepted by the court, having regard to all the circumstances of the case and the preponderance of probabilities, the evidential burden shifts back to the complainant and thereafter, the presumptions under Sections 118 and 139 of the Act will not again come to the complainant's rescue.

16. John K. John v. Tom Varghese, 2007 AIR SCW 6736 

Court can take notice of conduct of parties.

17. Shriram Transport Finance Co. Ltd. v. Mahadevaiah, Laws (KAR) 2015 - 7 - 279

Presumption contained in Section 139 of N. I., Act is rebuttable one. It can be rebutted either by direct evidence or by the attendant circumstances. The complainant has to prove that the cheque which bounced was issued for discharging debt or legal liability in whole or in part.

18. B. Girish v. S. Ramaiah, Laws (KAR) 2010 - 2010 - 1 - 152 

Question as to whether the presumptions under Sections 118 and 139 of the Negotiable Instruments Act, have been rebutted or not have to be considered by looking into the entire material on record and it is not necessary for the accused to prove his defence beyond reasonable doubt nor he is required to step into the witness - box to prove his defence.
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