Negotiable Instruments Act, 1881 – ss.138, 139 – Once the basic ingredients of s.138 are satisfied, the complaint cannot be dismissed at the pre-trial stage on the ground that the cheque issued was not towards a legally enforceable debt – Appellant’s case that in terms of the settlement agreement between her and her husband, her husband had to inter alia pay ₹50 crores to her – Second respondent acted as a guarantor and issued the cheque in question drawn in favour of the appellant – On being presented, the cheque got dishonoured with the remark ‘payment stopped by drawer’ – Eventually, complaint filed by the appellant u/s.138 against the second respondent – Process issued by Metropolitan Magistrate – Order set aside by Sessions Court holding that on the date of issuance of the cheque in question, there was no legally enforceable debt to be satisfied by the drawer – Challenged by the appellant, writ petition dismissed by High Court – Interference with:
Held: Once the basic ingredients of s.138 are duly satisfied by the complainant, the rebuttal of statutory presumption by the drawer can only be made during the course of trial – The basic ingredients for attracting the provisions of s.138 had been duly satisfied by the appellant, at least for issuance of process – When the basic ingredients of s.138 stand duly satisfied and the statutory presumption u/s.139 gets triggered, coming to a conclusion that the cheque was not issued for a legally enforceable debt at the pre-trial stage itself without granting an opportunity to the complainant to substantiate her case by leading evidence would amount to ignoring the statutory presumption that the cheque had been issued for a legally enforceable debt or liability – As a consequence, the presumption u/s.139 gets washed away even prior to commencement of the trial – On facts, the dismissal of the complaint as a consequence of setting aside the order issuing process is totally unjustified in the absence of any material being brought on record by the second respondent to rebut the statutory presumption and prove his contention that the cheque was issued not towards any enforceable debt or liability – Sessions Court committed an error in setting aside the order passed by the Metropolitan Magistrate issuing process u/s.138 – High Court also fell into error in upholding the order passed by the Sessions Judge – Both the orders set aside – Complaint filed by the appellant restored for adjudication on merits. [Paras 10, 11] Negotiable Instruments Act, 1881 – ss.138, 139 – At the stage of issuance of process, the statutory presumption u/s.139 cannot be dislodged in a summary manner merely by contending that the cheque issued was not for any legally enforceable debt or liability:
Held: At the stage of issuance of process by the Metropolitan Magistrate, what is prima facie required to be seen is the issuance of cheque by the drawer in favour of the complainant, its dishonour on presentation by the payee, issuance of statutory notice u/s.138 and filing of the complaint within the prescribed statutory period – If the drawer does not dispute issuance of such a cheque nor does he deny his signature on the dishonoured cheque, the statutory presumption as contemplated u/s.139 comes into play – As a result, the burden would shift on the drawer of the cheque to prove that the cheque was not issued for any legally enforceable debt or liability – This exercise has to be undertaken during the trial either by relying upon the material brought on record by the complainant or by the drawer leading evidence in rebuttal. [Para 8]
As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Divya Pandey. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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