Team  SoOLEGAL

WHILE DETERMINING WHETHER PRESUMPTION UNDER SECTION 139 WAS REBUTTED OR NOT, TEST OF PROPORTIONALITY MUST BE APPLIED: Supreme Court

Team SoOLEGAL 19 Mar 2019 12:22pm

WHILE DETERMINING WHETHER PRESUMPTION UNDER SECTION 139 WAS REBUTTED OR NOT, TEST OF PROPORTIONALITY MUST BE APPLIED: Supreme Court

The present case pertains to dishonour of  cheque for Rs.15 lakhs. It was allegedly issued by the accused for discharging a loan taken from the complainant. A notice was served by the complainant demanding the repayment of loan amount. But the accused had denied the transaction while replying to the notice. He stated that the blank cheques which were issued for an earlier sale transaction, were misused by the complainant.

The accused was earlier acquitted by the Trial Court. But the Appellate Court held the accused as a convict, thereby reversing the order of Trial Court. The High Court referred the matter to a fresh trial.

But the Supreme Court found that presumption under Section 139 of the Negotiable Instruments Act relating to existence of legally enforceable debt was rebutted. The Apex Court acquitted the accused under Section 138 NI Act and observed:

"On a totality of the facts and circumstances and based on the evidence on the record, the first appellate court held that the presumption under Section 139 of the Act stood rebutted and that the defence stood probabalised. From the judgment of the High Court, the significant aspect of the case which stands out is that there has been no appreciation of the evidence or even a reference to the reasons furnished by the first appellate court."

High Court's judgment was termed as unsatisfactory as no reference was made to evidence on record.

"There was absolutely no valid basis to displace the findings of fact which were arrived at by the first appellate court,while acquitting the accused."

Tagged: SupremeCourt   Section139   NegotiableInstrumentsAct  
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