The Supreme Court recently held that in cases concerning dishonour of cheques under the Negotiable Instruments Act (NI Act), the burden cannot be placed on the complainant to prove the existence of a debt..The Bench of Justices L Nageswara Rao and Hemant Gupta upheld a judgment of the Bombay High Court which had reversed the acquittal of the accused on the ground that the Magistrate, while dismissing the complaint, had not taken into consideration the presumption provided for under the NI Act..“We are of the opinion that the High Court has rightly reversed the order of acquittal passed by the trial court wherein the presumption under Section 138 has not been taken into account. The trial court committed an error in placing heavy burden on the complainant to prove the debt. “.Section 139 of the NI Act provides for a presumption in favour of the holder of the cheque that the cheque was received for discharge of a debt or a liability. The Section reads thus:.Section 139. Presumption in favour of holder.—It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability..The accused had approached the Supreme Court against the decision of the High Court, which had directed him to deposit an amount of Rs. 1,20,000 within two months, failing which he would have to undergo imprisonment for a period of one year..It was argued by the appellant before the Supreme Court that the decision of the Magistrate to acquit him was supported by reason, and that the High Court ought not to have reversed this ruling..However, the Supreme Court did not agree with the submissions. It stated that the trial court’s ruling was erroneous, as heavy burden was placed on the complainant to prove the debt and thus, the High Court was correct in reversing the same..The Court thus disposed of the appeal in this case while affirming the decision of the Bombay High Court..Read the Order:
The Supreme Court recently held that in cases concerning dishonour of cheques under the Negotiable Instruments Act (NI Act), the burden cannot be placed on the complainant to prove the existence of a debt..The Bench of Justices L Nageswara Rao and Hemant Gupta upheld a judgment of the Bombay High Court which had reversed the acquittal of the accused on the ground that the Magistrate, while dismissing the complaint, had not taken into consideration the presumption provided for under the NI Act..“We are of the opinion that the High Court has rightly reversed the order of acquittal passed by the trial court wherein the presumption under Section 138 has not been taken into account. The trial court committed an error in placing heavy burden on the complainant to prove the debt. “.Section 139 of the NI Act provides for a presumption in favour of the holder of the cheque that the cheque was received for discharge of a debt or a liability. The Section reads thus:.Section 139. Presumption in favour of holder.—It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability..The accused had approached the Supreme Court against the decision of the High Court, which had directed him to deposit an amount of Rs. 1,20,000 within two months, failing which he would have to undergo imprisonment for a period of one year..It was argued by the appellant before the Supreme Court that the decision of the Magistrate to acquit him was supported by reason, and that the High Court ought not to have reversed this ruling..However, the Supreme Court did not agree with the submissions. It stated that the trial court’s ruling was erroneous, as heavy burden was placed on the complainant to prove the debt and thus, the High Court was correct in reversing the same..The Court thus disposed of the appeal in this case while affirming the decision of the Bombay High Court..Read the Order: