Negotiable Instruments Act, 1881 — Sections 118(a), 138 & 139 –

May 1st, 2013

Negotiable Instruments Act, 1881 — Sections 118(a), 138 & 139 — Dishonour of cheque — Admission regarding signature of accused on cheque — Same would not permit the accused to deny the fact that he had not issued the cheque — Said cheque returned on account of insufficient funds — Held, the burden of proving the consideration for dishonour of the cheque is not on the complainant, but the burden of proving that the cheque had not been issued for discharge of a lawful debt or a liability is on the accused and if he fails to discharge such burden, he is liable to be convicted.

K.N. Beena vs. Muniyappan And Anr., 2001 (7) SCALE 331 and P. Venugopal vs. Madan P. Sarathi, (2009)1 SCC 492, Relied on.

(Paras 9 and 10)

HELD: It is undoubtedly true that when a cheque is issued by a person who has signed on the cheque and the complainant reasonably discharges the burden that the cheque had been issued towards a lawful payment, it is for the accused to discharge the burden under Section 118 and 139 of the N.I. Act that the cheque had not been issued towards discharge of a legal debt but was issued by way of security or any other reason on account of some business transaction or was obtained unlawfully. The purpose of the N.I. Act is clearly to provide a speedy remedy to curb and to keep check on the economic offence of duping or cheating a person to whom a cheque is issued towards discharge of a debt and if the complainant reasonably discharges the burden that the payment was towards a lawful debt, it is not open for the accused/signatory of the cheque to set up a defence that although the cheque had been signed by him, which had bounced, the same would not constitute an offence.

(Para 10)

Vijay v. Laxman[Bench Strength 2], Criminal Appeal No. 261/2013 (Arising out of SLP (Crl.) 6761/2010)(07/02/2013), 2013(2) SCALE 368: 2013(2) JT 562: 2013(2) SLT 140: 2013(3) SCC 86 [T.S. Thakur, J.: Gyan Sudha Misra, J.]

Entry Filed under: Judgements,Labour Laws

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