Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | 139 Dishonour of cheque Insufficiency of funds 1881 ss.138 Negotiable Instruments Act |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Allowed |
Headnote | Negotiable Instruments Act, 1881: ss.138, 139 – Dishonour of cheque – Insufficiency of funds – Complaint under s.138 – Case of complainant-appellant was that the respondent-accused used to purchase rice bags from the appellant sometimes on credit and sometimes on cash and that the cheques issued by the respondent were subject matter of the complaints and pertained to the credit purchases made by the respondent for which no payment was made – On the other hand, case of the respondent was that he always used to make credit purchase and leave blank cheques with the appellant and thereafter, he used to make payment for which the appellant used to issue receipts to the respondent; however, the appellant did not return the blank cheques left by the respondent with the appellant though the respondent made the payments and those cheques were misused by the appellant-complainant – Acquittal by trial court and High Court on the ground that appellant failed to prove that respondent owed him debt and the cheques were issued for the discharge of the said debt – Held: It is quite unbelievable that in a business/mercantile transaction, the respondent even after making payment towards the purchase of rice bags, did not insist for return of the cheques and did not take any steps to get them back and continued with the business transaction even though the appellant did not return the cheques after payment of the money – Courts below referred to the three cheques and observed that the date of issuance of the three cheques suggested that the cheques were already with appellant and they were utilised by appellant thereafter and, therefore, in view of inconsistency, the presumption available under s.139 was not available to the appellant – The courts below did not keep in view that the appellant had no control over the manner of issuance of cheques by the respondent and how it was issued – Merely because, later cheque was said to have been issued by the respondent at an earlier date, it cannot be held that the appellant had used the blank cheques issued by the respondent – The courts below disbelieved the evidence of appellant on the ground that there were no averments in the complaint that the commodities were sold for cash and that the rice bags were sold on credit and the cheques were issued for the goods sold on credit – It was for the respondent to adduce evidence to prove that the cheques were not supported by consideration and that there was no debt or liability to be discharged by him – The receipts relied upon by the respondent did not create doubt about the purchases made on credit and the existence of a legally enforceable debt for which the cheques were issued – The courts below erred in saying that by the receipts, the respondent has rebutted the statutory presumption raised under s.139 – The oral and the documentary evidence adduced by the appellant were sufficient to prove that it was a legally enforceable debt and that the cheques were issued to discharge the legally enforceable debt – The impugned judgment of the High Court is not sustainable and is set aside – Respondent is convicted under s.138 in both the complaints. Negotiable Instruments Act, 1881: ss.138, 139 – Presumption in favour of holder – Held: Under s.138, once the cheque is issued by the drawer, a presumption under s.139 in favour of the holder would be attracted – s.139 creates a statutory presumption that a cheque received in the nature referred to under s.138 is for the discharge in whole or in part of any debt or other liability – The initial burden lies upon the complainant to prove the circumstances under which the cheque was issued in his favour and that the same was issued in discharge of a legally enforceable debt – It is for the accused to adduce evidence of such facts and circumstances to rebut the presumption that such debt does not exist or that the cheques are not supported by consideration – In the instant case, by examining himself as PW-1, the complainant has discharged the initial burden cast upon him that the cheques were issued for the rice bags purchased on credit – With the examination of PW-1, the statutory presumption under s.139 of the Act arises that the cheques were issued by the respondent-accused for the discharge of any debt or other liability in whole or in part. |
Judge | Hon'ble Ms. Justice R. Banumathi |
Neutral Citation | 2019 INSC 932 |
Petitioner | M/s. Shree Daneshwari Traders |
Respondent | Sanjay Jain And Another |
SCR | [2019] 11 S.C.R. 370 |
Judgement Date | 2019-08-21 |
Case Number | 61 |
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