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1 - 10 of 19 (0.25 seconds)Section 138 in The Negotiable Instruments Act, 1881 [Entire Act]
Section 139 in The Negotiable Instruments Act, 1881 [Entire Act]
Section 20 in The Negotiable Instruments Act, 1881 [Entire Act]
The Code of Criminal Procedure, 1973
The Companies Act, 1956
Rangappa vs Sri Mohan on 7 May, 2010
"14. In light of these extracts, we are in agreement with the
respondentÂclaimant that the presumption mandated by
Section 139 of the Act does indeed include the existence of
a legally enforceable debt or liability. To that extent, the
1In Rangappa v. Sri Mohan (2010) 11 SCC 441 the Supreme Court observed that "since the accused did admit that the
signature on the cheque was his, the statutory presumption comes into play.."(SCC @p. 454)
CC No. 902/11
PEC Ltd. v. Shree Sainath Wires Pvt. Ltd. & Ors. Page 7 of 16
impugned observations in Krishna Janardhan Bhat (supra)
may not be correct. However, this does not in any way cast
doubt on the correctness of the decision in that case since it
was based on the specific facts and circumstances therein.
As noted in the citations, 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 bouncing of a
cheque is largely in the 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 or 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. As clarified in the citations, the accused can rely on the
materials submitted by the complainant and it is
conceivable that in some cases the accused may not need to
adduce evidence of his/her own. " (emphasis added)
Section 141 in The Negotiable Instruments Act, 1881 [Entire Act]
M/S. Mojj Engineering Systems Ltd. & ... vs M/S A.B. Sugars Ltd. on 29 September, 2008
20.It has further been contended on behalf of accused persons that the cheque in
question was handed over in the year 2008 and therefore, it was drawn in the
year 2008 and not in the year 2010. The said contention of the accused persons
is not acceptable in view of Section 118 (b) of the NI Act which provides for
the presumption that every negotiable instrument bearing a date was made or
drawn on such date. Therefore, it has to be presumed that the cheque in
question was drawn on 31.03.2010. Section 20 of the NI Act provides for
implied authority given to the holder to fill the contents of the cheque. It
clearly states that the person signing the inchoate negotiable instrument shall
be liable upon such instrument, in the capacity in which he signed the same, to
CC No. 902/11
PEC Ltd. v. Shree Sainath Wires Pvt. Ltd. & Ors. Page 9 of 16
any holder in due course. (See also MOJJ Engineering System Ltd. v. A.B.
Sugars Ltd. 154 (2008) DLT 579). Section 20 of NI Act recognises the right of
a payee to put date on the cheque if the drawer hands over incomplete
negotiable instrument to him. Reading Section 20 of the NI Act read with
Section 118(b) of the NI Act, the accused company had given authority to the
complainant to fill up the date and the cheque in question was drawn on the
date of the cheque i.e. 31.03.2010.
National Small Industries Corp.Ltd vs Harmeet Singh Paintal & Anr on 15 February, 2010
In National Small Industries Corpn. Ltd. v. Harmeet Singh Paintal, (2010) 3
SCC 330 at page 345, it was observed as under: