NI Act, 1881: Defaulter’s Obligation to Prove that Dishonoured Cheque was for Purpose other than Debt/ Liability
M/S SHREE DANESHWARI TRADERS Vs. SANJAY JAIN AND ANOTHER [21/08/2019]—
The brief fact of the case is that the appellant-complainant had been supplying the commodities and rice bags to the respondent-accused on his request. In this regard, the respondent-accused issued various cheques which when presented for collection were dishonoured. The appellant had filed complaints under Section 138 of the Negotiable Instruments Act against the respondent-accused alleging that the cheques issued by the respondent-accused in lieu of payment owed to the appellant were dishonoured on presentation due to insufficient fund. It was further averred that despite issuance of legal notice, the respondent did not make payments. The trial court acquitted the respondent accused on the ground that it was incumbent upon the complainant to have explained in the complaint that the cash payments made by the respondent for payment of debt/ liability for the commodity purchased. In appeal, the High Court affirmed the acquittal of the respondent-accused.
In the referred case the Division Bench of the Hon’ble Supreme Court vide order dated 12/07/2019 held that mere inability to prove that the dishonoured cheque was given by the accused to the complainant to discharge the legal debt/liability does not dilute the liability of the accused under Section 138 of the NI Act. The Court further held that in terms of Section 139 of the NI Act there is a presumption in Complainant’s favour that the dishonoured cheque was for the discharge, in whole or in part, of any debt or other liability and it is the onus upon the accused to proof that the dishonoured cheque was not for the purpose of the debt/liability.
Details of the case may be visited at: https://sci.gov.in/supremecourt/2008/28430/28430_2008_7_1502_16116_Judgement_21-Aug-2019.pdf
Also see Pavan Diliprao Dike vs. Vishal Narendrabhai Parmar [12/07/2019] and Kumar Exports v. Sharma Carpets (2009) 2 SCC 513
