Saturday, October 9, 2021

Liability under Section 138 of the Negotiable Instruments Act (NI Act), which fastens criminal liability in cheque bounce cases -Supreme Court

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Section 139 of the NI Act raises a presumption, unless the contrary is proved, that the holder of a cheque receives the cheque of the nature referred to in Section 138 for the discharge of any debt or other liability, the Court held.

The question as to whether the liability exists or not is a matter of trial, a Bench of Justices DY Chandrachud, Vikram Nath and BV Nagarathna added.

Section 139 raises the presumption ‘unless the contrary is proved’. Once the complainant discharges the burden of proving that the instrument was executed by the accused; the presumption under Section 139 shifts the burden on the accused. The expression “unless the contrary is proved” would demonstrate that it is only for the accused at the trial to adduce evidence of such facts or circumstances on the basis of which the burden would stand discharged,” the judgment said.

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