Section 137 – Negotiable Instruments Act, 1881 (26 of 1881) , Section 138 -- Cheque bounce case -- Closing of cross-examination -- Trial Court closed the cross examination of CW-1 without taking note of the absence of the lawyer for the petitioners – Stated that non-appearance was due to demise of father of petitioners' counsel and this fact was also brought to the notice of the concerned Court -- Order set aside and parties permitted to appear before the trial Court subject to the condition that the petitioners shall not seek any further adjournment.

(P&H HC) Decided on: 10.11.2022

Section 45 -- Negotiable Instruments Act, 1881 (26 of 1881), Section 38, 139 -- Cheque signed by drawer – Presumption u/s 139 of N.I.Act/ Cheque towards payment of a debt or in discharge of a liability – Rebuttal of -- Handwriting expert to examine writing on cheque – Permissibility of – High Court permitted to engage a hand-writing expert to seek an opinion on whether “the authorship on the questioned writings” (the disputed cheque) can be attributed to the respondents -- Evidence of a hand-writing expert on whether the respondent had filled in the details in the cheque would be immaterial to determining the purpose for which the cheque was handed over -- Presumption which arises on the signing of the cheque cannot be rebutted merely by the report of a hand-writing expert -- No purpose served by allowing the application for adducing the evidence of the hand-writing expert – Order of High Court set aside, appeal allowed.

(SC) Decided on: 16.08.2022

Section 118(a) -- Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 313 -- Cheque bounce case – Acquittal by trial court – Conviction by High Court -- Appellant has only recorded her statement u/s 313 of the Code, and has not adduced any evidence to rebut the presumption that the cheques were issued for consideration -- Once the facts came on record remained unrebutted and supported with the evidence on record with no substantive evidence of defence of the appellant to explain the incriminating circumstances appearing in the complaint against her – Appellant has been rightly convicted.

(SC) Decided on: 09.03.2021

Section 118(a) -- Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 -- Cheque bounce case – Presumption of consideration – Onus to rebut – Scope of evidence -- There is a mandate of presumption of consideration in terms of the provisions of the Act and the onus shifts to the accused on proof of issuance of cheque to rebut the presumption that the cheque was issued not for discharge of any debt or liability in terms of Section 138 of the Act -- To rebut this presumption, facts must be adduced by the accused which on a preponderance of probability (not beyond reasonable doubt as in the case of criminal offences), must then be proved.

(SC) Decided on: 09.03.2021

Section 118(a) -- Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 313 -- Cheque bounce case – After cheques being bounced, two separate legal notices were served, even after receiving the said notices, the appellant neither responded to the notices nor made any payment within the statutory period of fifteen days – When the complainant exhibited all documents in support of his complaints and recorded the statement of three witnesses in support thereof, the appellant has recorded her statement u/s 313 of the Code, but failed to record evidence to disprove or rebut the presumption in support of her defence -- Statement of the accused recorded u/s 313 of the Code is not a substantive evidence of defence, but only an opportunity to the accused to explain the incriminating circumstances appearing in the prosecution case of the accused -- No evidence to rebut the presumption -- Held, High Court, has not committed any error in recording the finding of guilt of the appellant and convicting her for an offence being committed u/s 138 of the Act, which needs no further interference -- Appeals being without any substance, dismissed.

(SC) Decided on: 09.03.2021

Section 118 – Negotiable Instruments Act, 1881 (26 of 1881), Sections 138, 139 – Admission of signatures on cheque -- Legal enforceable liability – Presumption of -- Statute mandates that once the signature(s) of an accused on the cheque/negotiable instrument are established, then these ‘reverse onus’ clauses become operative -- Obligation shifts upon the accused to discharge the presumption imposed upon him – Held, once the 2nd Appellant had admitted his signatures on the cheque and the Deed of undertaking, the trial Court ought to have presumed that the cheque was issued as consideration for a legally enforceable debt -- Trial Court fell in error when it called upon the Complainant-Respondent to explain the circumstances under which the appellants were liable to pay -- Such approach of the trial Court was directly in the teeth of the established legal position and amounts to a patent error of law.

(SC) Decided on: 10.02.2021

Section 118 – Negotiable Instruments Act, 1881 (26 of 1881), Sections 138, 139 – Legal enforceable liability – Presumption of – Rebuttal of -- Presumptions raised u/s 118 and Section 139 are rebuttable in nature – A probable defence needs to be raised, which must meet the standard of “preponderance of probability”, and not mere possibility -- Bare denial of passing of consideration would not aid the case of accused.

(SC) Decided on: 10.02.2021

Section 118 – Negotiable Instruments Act, 1881 (26 of 1881), Sections 138, 139 – Blank signed cheque and stamp papers – Legal enforceable liability -- Presumption of – Rebuttal of -- Even if the arguments raised by the appellants at face value that only a blank cheque and signed blank stamp papers were given to the respondent, yet the statutory presumption cannot be obliterated.

(SC) Decided on: 10.02.2021

Sections 45, 72, 118(a) -- Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 – Code of Criminal Procedure, 1973 (2 of 1974), Section 482 -- Cheque bounce case – Quashing of complaint -- Presumption of legal enforceability debt – Rebuttal of -- ‘Y’ admitted the issuance of cheques -- Once the issuance of cheque is admitted/established, the presumption would arise u/s 139 of the N.I. Act in favour of the holder of cheque that is the complainant-appellant No.3 -- Burden lies upon the accused to rebut the presumption by adducing evidence -- High Court did not keep in view that until the accused discharges his burden, the presumption u/s 139 of N.I. Act will continue to remain -- When disputed questions of facts are involved which need to be adjudicated after the parties adduce evidence, the complaint u/s 138 of the N.I. Act ought not to have been quashed by the High Court by taking recourse to Section 482 Cr.P.C.

(SC) Decided on: 10.02.2020

Sections 45, 72, 118(a) -- Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 – Code of Criminal Procedure, 1973 (2 of 1974), Section 482 -- Cheque bounce case – Quashing of complaint -- Presumption of legal enforceability debt – Rebuttal of -- ‘Y’ admitted the issuance of cheques -- Once the issuance of cheque is admitted/established, the presumption would arise u/s 139 of the N.I. Act in favour of the holder of cheque that is the complainant-appellant No.3 -- Burden lies upon the accused to rebut the presumption by adducing evidence -- High Court did not keep in view that until the accused discharges his burden, the presumption u/s 139 of N.I. Act will continue to remain -- When disputed questions of facts are involved which need to be adjudicated after the parties adduce evidence, the complaint u/s 138 of the N.I. Act ought not to have been quashed by the High Court by taking recourse to Section 482 Cr.P.C

(SC) Decided on: 10.02.2020

Section 3 -- Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 145 -- Complaint in cheque bounce case – Evidence of accused by way of affidavit – Permissibility of -- Accused, who is facing trial in complaint under the provisions of Negotiable Instruments Act, is not competent to tender his evidence through affidavit.

(P&H HC) Decided on: 05.11.2019

Section 114 – Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- General Clauses Act, 1897 (10 of 1897), Section 27 -- Cheque bounce case – Notice by registered post – Presumption of -- Once notice is sent by registered post by correctly addressing to the drawer of the cheque, the service of notice is deemed to have been effected -- Then requirements under proviso (b) of Section 138 stands complied, if notice is sent in the prescribed manner -- However, the drawer is at liberty to rebut this presumption -- Notice sent by registered post and is returned with postal endorsement “refused” or “not available in the house” or “house locked” or “shop closed” or “addressee not in station”, due service has to be presumed.

(SC) Decided on: 01.03.2017

Section 45 -- Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Complaint u/s 138 of NI Act – Denial of signature – Expert evidence -- Acquittal of accused -- Once the accused did not accept his signatures on the cheque, complainant did not make any effort to get the signature of the accused proved by examining any handwriting and fingerprint expert, it can be safely concluded that the learned trial court committed no error of law, while passing the acquittal order.

(P&H HC) Decided on: 28.04.2015

Section 34 -- Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Bahi entries – Evidential value -- Maintainability of complaint u/s 138 of NI Act -- Bahi entries are not negotiable instruments of advancement of loan, such as, pronote, bonds and Bill of exchange etc., which can legally be enforceable, as contemplated by the NI Act -- Entry in the Bahi Khata merely is an admission by its maker in his own favour and it is only admissible in evidence if it is accepted by the opposite side (loanee) and not otherwise -- Such entries shall alone be not sufficient to charge any person with liability -- Commission agents used to obtain such blank/undated cheques from the Farmers as a security in good faith, not in lieu of any legal liability, to which, the court can take judicial notice of it -- Complainant cannot adhere to initiate the criminal prosecution against the respondent u/s 138 of the NI Act.

(P&H HC) Decided on: 13.11.2014