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Thursday, April 30, 2015

Section 138 & 139 of the Negotiable Instruments Act - the cheque was actually from the cheque book that was issued prior to 2000 as the cheque leaf itself mentioned the date in printed ink as “__/__/199__” - in absence of any other evidence, it cannot be conclusive of the fact that the cheque was issued in 1999. The date of the cheque was as such 20/05/2006 but not decade earlier -as the cheque was dishonoured because the payment was stopped and not for any other reason -This implies that the accused had knowledge of the cheque being presented to the bank, or else how would the accused have instructed her banker to stop the payment. -2015 S.C. msklawreports Section 138 of the Negotiable Instruments Act - the cheque was actually from the cheque book that was issued prior to 2000 as the cheque leaf itself mentioned the date in printed ink as “__/__/199__”. - business transaction in 2007 to release the film “Pokari” in his theatre - High court dismissed the complaint - Apex court held that since the cheque as well as the signature has been accepted by the accused respondent, the presumption under Section 139 would operate. Thus, the burden was on the accused to disprove the cheque or the existence of any legally recoverable debt or liability. To this effect, the accused has come up with a story that the cheque was given to the complainant long back in 1999 as a security to a loan; the loan was repaid but the complainant did not return the security cheque - However, it may be noted that the cheque was dishonoured because the payment was stopped and not for any other reason. This implies that the accused had knowledge of the cheque being presented to the bank, or else how would the accused have instructed her banker to stop the payment. Thus, the story brought out by the accused is unworthy of credit, apart from being unsupported by any evidence.- we are of the view that by itself, in absence of any other evidence, cannot be conclusive of the fact that the cheque was issued in 1999. The date of the cheque was as such 20/05/2006.-2015 S.C. msklawreports



The  two  parties  had  a  business  relationship  whereunder  the
defendant provided movies to the complainant for screening at  his  Theatre.

In May 2006, the defendant sought a loan  of  Rupees  Five  Lakhs  from  the
complainant for supporting the making of a Tamil movie  “Pokari”.
The  said
loan was advanced by  the  complainant  on  20-05-2006.

The  defendant  had
promised to repay the loan on  release  of  the  said  movie.

On repeated requests  made  by  the
complainant, the defendant on 16-01-2007, gave  a  cheque  for  Rs.5  lakhs,
bearing No.822408,  drawn  on  State  Bank  of  Mysore,  Vyalikaval  Branch,
Bangalore.
This cheque was presented by the  complainant  on  the  same  day
through his banker Vijaya  Bank,  Yeshwantpur  Branch,  Bangalore.
But  the
cheque was returned on 18-01-2007  by  the  Bank  with  the  remarks:  “Stop
Payment”.
Thereafter,  the  complainant  issued  a  legal  notice  to   the
defendant on 27-01-2007, at  the  office  address  as  well  as  residential
address of the  defendant.
The  notice  sent  at  the  residential  address
through RPAD was duly received, while the one sent at the office address  of
the  defendant  was  returned  with  the  report:  “Absent   -   Information
delivered”.
 Even after the notice was served,  the  defendant  neither  made
the payment nor responded to the same.

The defendant's case is that the alleged cheque was  given
to the complainant in the year 1999 as security against loan of  Rs.5  lakhs
taken then.
After the defendant paid  the  loan,  the  complainant  did  not
return the said cheque saying  that  he  had  misplaced  it.
 The  defendant
alleges that the complainant, due to  ill  will  in  release  of  the  movie
“Pokari”, used this old cheque to take revenge against the defendant firm.

The High Court found that the  cheque
was actually from the cheque book that was  issued  prior  to  2000  as  the
cheque leaf itself mentioned the date in printed ink as  “__/__/199__”.
The
High Court observed that it is hard to believe that a  business  transacting
party would give a cheque which is of the decade 1990  in  relation  to  the
transaction in 2007.
The High Court accepted the argument of  the  defendant
that the Complainant used the old cheque due to ill will because  of  denial
of the defendant firm to release the film “Pokari” in his theatre.

Apex curt held that 

Therefore, in the present case since the cheque as  well  as  the  signature
has been accepted by the accused respondent, the presumption  under  Section
139 would operate. Thus, the burden was  on  the  accused  to  disprove  the
cheque or the existence of any legally recoverable  debt  or  liability.  To
this effect, the accused has come up with a story that the cheque was  given
to the complainant long back in 1999 as a security to a loan; the  loan  was
repaid but the complainant did not return the security cheque. According  to
the accused, it was that very cheque used by the  complainant  to  implicate
the accused. However, it may  be  noted  that  the  cheque  was  dishonoured
because the payment was stopped and not for any other reason.  This  implies
that the accused had knowledge of the cheque being presented  to  the  bank,
or else how would the  accused  have  instructed  her  banker  to  stop  the
payment. Thus, the story brought out by the accused is unworthy  of  credit,
apart from being unsupported by any evidence.

Further, the High Court relied heavily on the printed date  on  the  cheque.
However, we are of the  view  that  by  itself,  in  absence  of  any  other
evidence, cannot be conclusive of the fact that the  cheque  was  issued  in
1999. The date of the cheque was as such  20/05/2006.  The  accused  in  her
evidence brought out nothing to prove the debt  of  1999  nor  disprove  the
loan taken in 2006.

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