Following are the important cheque bounce case laws decided by the trial and appellate courts.
Cheque Issued as a Security to a Loan
Shriram Transport Finance Co. Ltd. V. Mahadevaiah, Laws (KAR) 2015 – 7 – 279. The Complainant Has To Prove That The Cheque Which Bounced Was Issued For Discharging The Debtor Legal Liability In Whole Or In Part. Negotiable Instruments Act, 1881– Ss. 138 & 139 – Dishonour Of Cheque – Appeal Against Acquittal – Cheque, As Well As Signature On It Not Disputed By Accused Respondent – Presumption Under S.139, Would Be Attracted – Story Brought By Accused That Cheque Was Given To Complainant Long Back In 1999 As A Security To A Loan;
The loan was Repaid but the Cheque was not Returned
Vasanthakumar V. Vijayakumari, Laws (SC) 2015-4-79. The Loan Was Repaid But Complainant Did Not Return Security Cheque – Is Unworthy Of Credit, Apart From Being Unsupported By Any Evidence – Merely Printed Date On Cheque By Itself Cannot Be Conclusive Of Fact That Cheque Was Issued In 1999. T. Negotiable Instruments Act, 1881 - If The Complainant Fails To Prove The Legally Recoverable Debt Payable By The Accused, Then The Acquittal Of The Accused Is Proper. K. Subramani V. K. Damodara Naidu, (2015) 1 SCC 99
Unsure about the cheque issued by the Accused
John K. Abraham V. Simon C. Abraham, (2014) 2 SCC 236. Complainant Not Sure As To Who Wrote Cheque Nor Aware As To When And Where The Existing Transaction Took Place For Which Cheque Was Issued By The Accused – Conviction Of Accused Is Not Proper.
Failure to submit material facts during the trial
H. Manjunath V. A.M. Basavaraju, ILR 2014 Kar. 6572 – Offence Under – Judgment Of Acquittal – Appealed Against – Absence Of Statement In The Complaint As To When The Amount Was Actually Given To The Accused – Absence Of Material Particulars Of The Transaction In The Complaint – Except Signature All Other Entries Are In Different Handwriting, Different Ink And Undoubtedly Made At Different Time – Mentioning Of Merely The Date Of Issue Of Cheque Without Any Material Particulars – Held, Judgment Of Acquittal Is Justified. Negotiable Instruments Act, 1881 - Section 141 Uses The Term ‘Person’ And Refers It To A Company. There Is No Trace Of Doubt That The Company Is A Juristic Person. The Concept Of Corporate Criminal Liability Is Attracted To A Corporation And Company And It Is So Luminescent From The Language Employed Under Section 141 Of The Act.
The cheque issued for the recovery of the loan is admissible
Late Patel V. Sharanbasappa, Laws (KAR) 2012-7-473 Negotiable Instruments Act, 1881. In Whole Or In Part, Of Any Debt Or Liability And The Said Provision Relating To The Presumption Would Categorically Suggest That The Cheque So Issued Would Constitute A Primary Loan Document To Evidence The Loan Along With Pro-Note Or A Bond If Any Executed In That Behalf. Existence Of Legally Recoverable Debt Or Liability – Is Matter Of Presumption U/S 139. Rangappa V. Mohan, AIR 2010 SC 1898
In Cheque Bounce Cases Accused has only two defense
Kumar Exports V. Sharma Carpets, (2009) 2 SCC 513 - The Accused In A Trial Under Section 138 Of The Act Has To Two Options. He Can Either Show That The Consideration And Debt Did Not Exist Or That Under The Particular Circumstances Of The Case The Non – Existence Of Consideration And Debt Is So Probable That A Prudent Man Ought To Suppose That No Consideration And Debt Existed. To Rebut The Statutory Presumptions An Accused Is Not Expected To Prove His Defence Beyond A Reasonable Doubt As-Is Expected Of The Complainant In A Criminal Trial.
That, The Accused Has Also An Option To Prove The Non – Existence Of Consideration And Debt Or Liability Either By Letting In Evidence Or In Some Clear And Exceptional Cases, From The Case, Set Out By The Complainant, That Is, The Averments In The Complaint, The Case Set Out In The Statutory Notice And Evidence Adduced By The Complainant During The Trial. Once Such Rebuttal Evidence Is Adduced And Accepted By The Court, Having Regard To All The Circumstances Of The Case And The Preponderance Of Probabilities, The Evidential Burden Shifts Back To The Complainant And Thereafter, The Presumptions Under Sections 118 And 139 Of The Act Will Not Again Come To The Complainant’s Rescue.
No Proof was offered to Prove that the Cheque was Lost
Bangalore V. M/S. Uphar Fashions, Laws (KAR) 2008-9-6 – Accused Not Leading Any Evidence To Substantiate The Plea That The Cheques Duly Signed And Given To His Son Were Lost – The Statutory Presumption Works In Favour Of The Complainant. M/S. Amolak Textiles,
The burden of proof is on the Complainant but not on the Accused
John K. John V. Tom Varghese, 2007 AIR SCW 6736 – Question As To Whether The Presumptions Under Sections 118 And 139 Of The Negotiable Instruments Act, Have Been Rebutted Or Not Have To Be Considered By Looking Into The Entire Material On Record And It Is Not Necessary For The Accused To Prove His Defence Beyond Reasonable Doubt Nor He Is Required To Step Into The Witness – Box To Prove His Defence. Krishna Janardhan Bhat V. Dattatreya G. Hegde, AIR 2008 SC 1325 A Court Can Take Notice Of Conduct Of Parties.
Presumption under Negotiable Instruments Act, 1881
Hiten P. Dalal V. Bratindranath Banerjee; AIR 2001 SC 3897 S. 139 – Presumption In Favour Of Holder – For The Offence Under Section 138 Of The Act, The Presumptions Under Sections 118(A) And 139 Have To Be Compulsorily Raised As Soon As The Execution Of Cheque By Accused Is Admitted Or Proved By The Complainant And Thereafter Burden Is Shifted To Accused To Prove Otherwise. These Presumptions Shall Be Rebutted Only When The Contrary Is Proved By The Accused, That Is, The Cheque Was Not Issued For Consideration And In Discharge Of Any Debt Or Liability Etc. A Presumption Is Not In Itself Evidence But Only Makes A Prima Facie Case For A Party For Whose Benefit It Exists. Presumptions Both Under Sections 118 And 139 Are Rebuttable In Nature.
The cheque bounce lawyers have years of experience in handling such cases and will be able to give you the best legal opinion. They will also be able to help you with the necessary paperwork and documentation.
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