Presumption under Section 118 of NI Act may legally be inferred where signature on cheque admitted by accused

Bombay High Court: A Single Judge bench comprising of M.G. Giratkar, J. dismissed a revision petition filed against the judgment of Judicial Magistrate and confirmed by Additional Sessions Judge, Nagpur whereby the petitioner was convicted for offence punishable under Section 138 of Negotiable Instruments Act, 1881.

The petitioner and the complainant were businessmen. They entered into a transaction whereby the complainant provided a hand loan of Rs 50,000 to the petitioner. The petitioner issued a cheque which was presented to the bank by the complainant on default of repayment of the amount. It was returned by the bank with remark “insufficient fund”. The complainant initiated legal proceedings which culminated in petitioner’s conviction as mentioned above.

Notably, the complainant did not adduce any evidence to show that the advanced Rs 50,000 to the petitioner. However, he held a cheque and an acknowledgment slip. The petitioner did not dispute his signatures on the documents.

The High Court relied on K. Bhaskaran v. Sankaran Vaidhyan Balan, (1999) 7 SCC 510 for the proposition that where signature on the cheque is admitted to be that of accused, the presumption envisaged in Section 118 of the Negotiable Instruments Act can legally be inferred that cheque was drawn for consideration on the date which it bears. Furthermore, Section 139 enjoins on the Court to presume that holder of the cheque received it for discharge of debt or liability and burden is on the accused to rebut this presumption. In the present case, nothing was brought on record to show that the accused did not receive Rs 50,000. Also, he did not deny his signatures on the cheque and acknowledgment. As such, the Court held that there was no illegality in the impugned judgment. Th revision petition was dismissed. [Amol v. State of Maharashtra, 2018 SCC OnLine Bom 6682, dated 22-12-2018]

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