Search Results Page
Search Results
1 - 10 of 11 (0.74 seconds)Section 139 in The Negotiable Instruments Act, 1881 [Entire Act]
Section 482 in The Code of Criminal Procedure, 1973 [Entire Act]
Rangappa vs Sri Mohan on 7 May, 2010
15 In 'RANGAPPA VS. SRI MOHAN', (2010) 11 SCC 441,
Page 22 of 31
R/CR.MA/30982/2017 ORDER
the Apex Court after discussing various
decisions on the subject held that the
presumption mandated by Section 139 of the Act
does indeed include the existence of legally
enforceable debt or liability. This is of course
in the nature of a rebuttable presumption and it
is open to the accused to raise a defence
wherein the existence of a legally enforceable
debt or liability can be contested. However,
there can be no doubt that there is an initial
presumption which favours the complainant.
Section 139 of the Act is an example of a
reverse onus clause that has been included in
furtherance of the legislative objective of
improving the credibility of negotiable
instruments. While Section 138 of the Act
specifies a strong criminal remedy in relation
to the dishonour of cheques, the rebuttable
presumption under Section 139 is a device to
prevent undue delay in the course of litigation.
However, it must be remembered that the offence
made punishable by Section 138 can be better
described as a regulatory offence since the
Page 23 of 31
R/CR.MA/30982/2017 ORDER
bouncing of a cheque is largely in nature of a
civil wrong whose impact is usually confined to
the private parties involved in commercial
transactions. In such a scenario, the test of
proportionality should guide the construction
and interpretation of reverse onus clauses and
the accused/defendant cannot be expected to
discharge an unduly high standard of proof. In
the absence of compelling justifications,
reverse onus clauses usually impose an
evidentiary burden and not a persuasive burden.
Keeping this in view, it is a settled position
that when an accused has to rebut the
presumption under Section 139, the standard of
proof for doing so is that of 'preponderance of
probabilities'. Therefore, if the accused is
able to raise a probable defence which creates
doubts about the existence of a legally
enforceable debt or liability, the prosecution
can fail. The accused can rely on the materials
submitted by the complainant in order to raise
such a defence and it is conceivable that in
some cases the accused may not need to adduce
Page 24 of 31
R/CR.MA/30982/2017 ORDER
evidence of his/her own.
Rallis India Ltd vs Poduru Vidya Bhusan & Ors on 13 April, 2011
In Rallis India Ltd. v. Poduru Vidya
Bhushan, this Court expressed its views on
this point as under: (SCC p. 93, para 12)
"12. At the threshold, the High Court should
not have interfered with the cognizance of
the complaints having been taken by the trial
court. The High Court could not have
discharged the respondents of the said
liability at the threshold. Unless the
parties are given opportunity to lead
evidence, it is not possible to come to a
definite conclusion as to what was the date
when the earlier partnership was dissolved
and since what date the respondents ceased to
be the partners of the firm."
M/S Indus Airways Pvt. Ltd And Ors vs M/S Magnum Aviation Pvt Ltd And Anr on 7 April, 2014
13 If, one looks at the law on the subject, as
rendered in the case of Indus Airways Private
Limited vs. Magnum Aviation Private Limited,
Page 9 of 31
R/CR.MA/30982/2017 ORDER
(2014) 12 SCC 539 it was a case of dishonour of
cheque issued towards advance payment. The
appellant purchaser placed two purchase orders
with the respondent supplier by issuing two
separate cheques towards advance payment. After
some time, deal between parties got cancelled as
goods were not supplied. The respondent supplier
tried to supply goods, but it was refused by the
appellant purchaser. Therefore, a complaint
under Section 138 of the NI Act was made by the
respondent supplier. The trial Court issued
summons and it was challenged by the appellant
purchaser before the Sessions Court. Issuance of
process was quashed by the Sessions Court.
However, when the challenge was taken to the
High Court, it set aside the order passed by the
Sessions Court and thereby, the matter wentup
for consideration before the Apex Court. The
Apex Court observed and held that the
explanation appended to Section 138 of the NI
Act explains the meaning of the expression 'debt
or other liability' for the purpose of Section
138 of the NI Act. This expression means a
Page 10 of 31
R/CR.MA/30982/2017 ORDER
legally enforceable debt or other liability.
Section 138 of the NI Act treats dishonoured
cheque as an offence, if the cheque has been
issued in discharge of any debt or other
liability subsisting on the date of drawing of
the cheque. The relevant observations read thus:
Suryalakshmi Cotton Mills Ltd vs Rajvir Industries Ltd. & Ors on 9 January, 2008
In Suryalakshmi Cotton Mills Ltd. v.
Rajvir Industries Ltd. [(2008) 13 SCC 678],
this Court has made the following
observations explaining the parameters of
jurisdiction of the High Court in exercising
its jurisdiction under Section 482 of the
Code of Criminal Procedure: (SCC pp. 68587,
paras 17 & 22)
"17. The parameters of jurisdiction of the
High Court in exercising its jurisdiction
under Section 482 of the Code of Criminal
Procedure is now well settled. Although it is
of wide amplitude, a great deal of caution is
also required in its exercise. What is
required is application of the well known
legal principles involved in the matter.
Hmt Watches Ltd vs M.A. Abida & Anr on 19 March, 2015
In HMT Watches Ltd. versus M.A.
Abida, relied upon on behalf of the
respondent, this Court dealt with the
contention that the proceedings under Section
138 were liable to be quashed as the cheques
were given as "security" as per defence of
the accused. Negativing the contention, this
Court held :
"10. Having heard the learned counsel for the
parties, we are of the view that the accused
(Respondent 1) challenged the proceedings of
criminal complaint cases before the High
Court, taking factual defences. Whether the
cheques were given as security or not, or
whether there was outstanding liability or
not is a question of fact which could have
been determined only by the trial court after
recording evidence of the parties. In our
opinion, the High Court should not have
Page 19 of 31
R/CR.MA/30982/2017 ORDER
expressed its view on the disputed questions
of fact in a petition under Section 482 of
the Code of Criminal Procedure, to come to a
conclusion that the offence is not made out.
The High Court has erred in law in going into
the factual aspects of the matter which were
not admitted between the parties. The High
Court further erred in observing that Section
138(b) of the NI Act stood uncomplied with,
even though Respondent 1 (accused) had
admitted that he replied to the notice issued
by the complainant.