Cheque Dishonour Cases - What Should Courts Ask Accused Once Presumption Under S.139 NI Act Is Applicable? Supreme Court Explains
1 year, 2 months ago

Cheque Dishonour Cases - What Should Courts Ask Accused Once Presumption Under S.139 NI Act Is Applicable? Supreme Court Explains

Live Law  

Reiterating the principles relating to the presumption under Section 139 of the Negotiable Instruments Act 1881, the Supreme Court reversed the acquittal of an accused in a case for cheque dishonour.A bench comprising Justices Aravind Kumar and SVN Bhatti observed that there was a "fundamental flaw" in the approach taken by both the Trial Court and the High Court.Summarising the law relating. Reiterating the principles relating to the presumption under Section 139 of the Negotiable Instruments Act 1881, the Supreme Court reversed the acquittal of an accused in a case for cheque dishonour. Once both parties have adduced evidence, Section 139 presumption does not come to the rescue of the complainant Further, the Court explained : "Therefore, in fine, it can be said that once the accused adduces evidence to the satisfaction of the Court that on a preponderance of probabilities there exists no debt/liability in the manner pleaded in the complaint or the demand notice or the affidavit-evidence, the burden shifts to the complainant and the presumption 'disappears' and does not haunt the accused any longer. "The fundamental error in the approach lies in the fact that the High Court has questioned the want of evidence on part of the complainant in order to support his allegation of having extended loan to the accused, when it ought to have instead concerned itself with the case set up by the accused and whether he had discharged his evidential burden by proving that there existed no debt/liability at the time of issuance of cheque."

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History of this topic

Complainant's Burden Shifting Under Section 139 of the Negotiable Instruments Act: High Court Observation
1 month, 3 weeks ago

Complainant's Burden Shifting Under Section 139 of the Negotiable Instruments Act: High Court Observation

Live Law  

The Jammu and Kashmir and Ladakh High Court has observed that once the complainant proves that a cheque was issued by the accused to discharge a debt, Section 139 mandates that the burden of proof shifts to the accused. The court dismissed an appeal filed by one Choudhary Piara Singh against an acquittal order issued by the Trial Court in …

[Cheque Dishonour] Accused Often Get Away Due To Lack Of Evidence, Courts Must Acknowledge Friendly Cash Loans Between Parties: Delhi HC
4 months ago

[Cheque Dishonour] Accused Often Get Away Due To Lack Of Evidence, Courts Must Acknowledge Friendly Cash Loans Between Parties: Delhi HC

Live Law  

While hearing a matter on cheque bounce under the Negotiable Instruments Act, the Delhi High Court recently said that it would be prudent for courts to acknowledge that friendly cash loans are provided between parties without an existing document trail, with accused often getting acquitted because the complainant is unable to prove the existence of a debt. A single judge …

Discharge Of Debt By Drawer To Be Determined At Trial, Can't Be Ground For Quashing Cheque Bounce Case U/S 138 NI Act: Jharkhand HC
5 months, 1 week ago

Discharge Of Debt By Drawer To Be Determined At Trial, Can't Be Ground For Quashing Cheque Bounce Case U/S 138 NI Act: Jharkhand HC

Live Law  

The Jharkhand High Court has dismissed a petition to quash a cheque bounce case, emphasizing that determining whether the petitioner had settled the debt for which the cheques were issued is a factual matter requiring a full trial. Justice Anil Kumar Choudhary, presiding over the case, observed, “Now whether or not the petitioner has discharged the debt for which the …

S.138 NI Act | Courts Can't Compel Complainant To Give Consent For Compounding, Mere Repayment Won't Absolve Accused : Supreme Court
7 months, 3 weeks ago

S.138 NI Act | Courts Can't Compel Complainant To Give Consent For Compounding, Mere Repayment Won't Absolve Accused : Supreme Court

Live Law  

Recently, the Supreme Court observed that the Courts cannot compel the complainant in a cheque dishonour case to give consent for the compounding of the complaint merely because the accused has compensated the complainant.The Court also observed that mere repayment of the amount cannot mean that the appellant is absolved from the criminal liabilities under Section 138 of the. Recently, …

[Cheque Dishonour] Complainant Failed To Prove Cheque Was Issued Against Legally Enforceable Debt: Kerala High Court Acquits Accused
9 months, 1 week ago

[Cheque Dishonour] Complainant Failed To Prove Cheque Was Issued Against Legally Enforceable Debt: Kerala High Court Acquits Accused

Live Law  

The Kerala High Court has held that a complainant under the Negotiable Instruments Act cannot rely on the presumption that the holder of a negotiable instrument has paid consideration for it when his claim is inconsistent.It upheld the acquittal of the accused upon noting that the complainant in the present case had failed to prove that the cheque had been …

[S.138 NI Act] Must Examine Those With Direct Knowledge Of Transaction To Prove Allegations Of Cheque Dishonour: Kerala High Court Sets Aside Conviction
10 months, 1 week ago

[S.138 NI Act] Must Examine Those With Direct Knowledge Of Transaction To Prove Allegations Of Cheque Dishonour: Kerala High Court Sets Aside Conviction

Live Law  

The Kerala High Court has stated that the prosecution has to examine a witness who had direct knowledge regarding the transaction, issuance and execution of the cheque to prove dishonour of the cheque. Justice A. Badharudeen observed that the examination of a witness who had no direct knowledge regarding the transaction or issuance of the cheque would be insufficient to …

Cheque Dishonour | Onus On Accused To Prove Cheque Issued Towards Repayment Of Loan Was Misused By Complainant: Karnataka High Court
1 year ago

Cheque Dishonour | Onus On Accused To Prove Cheque Issued Towards Repayment Of Loan Was Misused By Complainant: Karnataka High Court

Live Law  

The Karnataka High Court has held that in a cheque bounce case, the onus is on the accused to prove that the cheque was misused after it was issued to another person in lieu of a loan borrowed from them and thus did not amount to a legally enforceable debt. The primary contention of the accused was that the complainant …

S.138 NI Act | Availability Of Funds In Other Bank Accounts Not A Defence; Cheque Dishonour Relates To Specific Account: Supreme Court
1 year ago

S.138 NI Act | Availability Of Funds In Other Bank Accounts Not A Defence; Cheque Dishonour Relates To Specific Account: Supreme Court

Live Law  

Recently, the Supreme Court categorically held that in proceedings initiated for bounced cheques, the defence that there are sufficient funds in the other bank accounts cannot be appreciated.“In a proceeding under Section 138 of the Negotiable Instruments Act, the accused cannot rely upon other bank accounts for. Recently, the Supreme Court categorically held that in proceedings initiated for bounced cheques, …

[Cheque Dishonour] Accused Must Take 'Probable Defence' To Rebut Adverse Presumption U/S 139 NI Act: Karnataka High Court Reiterates
1 year ago

[Cheque Dishonour] Accused Must Take 'Probable Defence' To Rebut Adverse Presumption U/S 139 NI Act: Karnataka High Court Reiterates

Live Law  

The Karnataka High Court has reiterated that to rebut the presumption under Section 139 Negotiable Instruments Act that cheque has been issued in discharge of a debt or liability, the accused must raise 'probable defence'. Faced with accused's mere denial regarding the existence of debt, Justice S Rachaiah remarked, “If the defence taken by the accused is not acceptable obviously …

S.138 NI Act | Director Cannot Be Prosecuted For Cheque Dishonour Without Arraying Company As Accused: Kerala High Court Reiterates
2 years, 1 month ago

S.138 NI Act | Director Cannot Be Prosecuted For Cheque Dishonour Without Arraying Company As Accused: Kerala High Court Reiterates

Live Law  

The Kerala High Court has reiterated that when a cheque issued by a company is dishonored, prosecution under Section 138 of the Negotiable Instruments Act against its Director shall not sustain if the company is not arrayed as an accused. Justice A. Badharudeen relying on the law laid down by the Apex Court, observed that prosecution against the director of …

No Offence Under Section 138 NI Act If Cheque Is Presented For Full Amount Without Endorsing Part Payment Made By Borrower : Supreme Court
2 years, 2 months ago

No Offence Under Section 138 NI Act If Cheque Is Presented For Full Amount Without Endorsing Part Payment Made By Borrower : Supreme Court

Live Law  

In a significant judgment, the Supreme Court on Tuesday held that no offence for dishonour of cheque under Section 138 of the Negotiable Instruments Act is made out if the cheque is presented for the full amount without endorsing the part-payment made by the borrower after the issuance of the cheque.The Court held that the sum reflected on the cheque …

Failure To Raise 'Probable Defence' Or Deny Issuance Of Cheque & Signature Thereupon Strengthens Presumption U/S 139 NI Act: Himachal Pradesh HC
2 years, 4 months ago

Failure To Raise 'Probable Defence' Or Deny Issuance Of Cheque & Signature Thereupon Strengthens Presumption U/S 139 NI Act: Himachal Pradesh HC

Live Law  

The Himachal Pradesh High Court has observed that if the drawer of a cheque fails to raise a "probable defence" or to contest the existence of a legally enforceable debt or to deny the issuance of the cheque and signatures thereupon, the statutory presumption in favour of cheque holder under Section 139 of Negotiable Instruments Act comes into play. "Interestingly, …

High Courts Should Be Slow To Grant Relief Of Quashing Complaint U/Sec 138 NI Act At A Pre Trial Stage: Supreme Court
2 years, 7 months ago

High Courts Should Be Slow To Grant Relief Of Quashing Complaint U/Sec 138 NI Act At A Pre Trial Stage: Supreme Court

Live Law  

The Supreme Court observed that a High Courts should be slow to grant the relief of quashing a complaint under Section 138 of Negotiable Instruments Act at a pre-trial stage.In a situation where the accused moves Court for quashing even before trial has commenced, the Court's approach should be careful enough to not to prematurely extinguish the case by disregarding …

Section 138 NI Act Attracted Even In Cases Where Debt Is Incurred After Cheque Is Drawn But Before Presentation: Supreme Court
3 years ago

Section 138 NI Act Attracted Even In Cases Where Debt Is Incurred After Cheque Is Drawn But Before Presentation: Supreme Court

Live Law  

The Supreme Court observed that Section 138 of Negotiable Instruments Act is attracted in cases where debt is incurred after the drawing of the cheque but before its encashment.The true purpose of Section 138 would not be fulfilled, if 'debt or other liability' is interpreted to include only a debt that exists as on the date of drawing of the …

Section 313 CrPC Statement By Accused Is Not A Substantive Evidence To Rebut Presumption Under Section 139 NI Act: Supreme Court
3 years, 9 months ago

Section 313 CrPC Statement By Accused Is Not A Substantive Evidence To Rebut Presumption Under Section 139 NI Act: Supreme Court

Live Law  

The statement of the accused recorded under Section 313 of the Code of Criminal Procedure is not a substantive evidence of defence to rebut the presumption under Section 139 of the Negotiable Instruments Act that the cheques were issued for consideration.In this case, the bench comprising Justices Indu Malhotra and Ajay Rastogi was considering an appeal against the judgment of. …

Section 138 NI Act : Supreme Court Seeks Centre's Views On Creation Of Additional Courts For Cheque Dishonour Case
3 years, 9 months ago

Section 138 NI Act : Supreme Court Seeks Centre's Views On Creation Of Additional Courts For Cheque Dishonour Case

Live Law  

The Supreme Court on Thursday sought the views of the Central Government on the creation of additional courts for the trial of cheque dishonour cases under Section 138 of the Negotiable Instruments Act, 1881.A bench comprising Chief Justice of India S A Bobde, Justices L Nageswara Rao and S Ravindra Bhat asked the Additional Solicitor General Vikramjit Banerjee if the …

Dishonour Of Cheques- Blank Cheque Would Attract Presumption U/s 139 NI Act If Signatures Are Admitted: Supreme Court
3 years, 10 months ago

Dishonour Of Cheques- Blank Cheque Would Attract Presumption U/s 139 NI Act If Signatures Are Admitted: Supreme Court

Live Law  

The Supreme Court observed that even a blank cheque leaf would attract presumption under Section 139 of the Negotiable Instruments Act when signatures are admitted by the accused.The bench comprising Justices NV Ramana, Surya Kant and Aniruddha Bose observed that 'reverse onus' clauses under Section 118 and Section 139 of the Negotiable Instruments Act become operative once the signature. The …

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