Cheque bounce case - onus of proving a loan


If the person giving a friendly loan never gets any documentation in writing from the borrower, also does not present any documentation/proof when the 138 case is filed, further if the borrower does not admit the loan as ever having been given - it is complainant's word aginst the borrower's word - how will the court proceed to come to a conclusion? If I come across a blank signed cheque tomorrow, by deceit, I can claim any amount of loan being given by me to the signer of the cheque - it could be in crores - but will the court believe me or give any credence to my submission if I have no proof.

 
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Practicing Advocate/Legal Consultant/Legal Process Outsourcing 08427414792

A prosecution under S. 138 NI Act proceeds on a presumption that the bounced cheque was issued by the accused for discharging a legal liability. This presumption is not irrebuttable in nature, and can be rebutted by the accused. The initial burden to rebut the presumption is on the shoulders of the accused. Once this burden is discharged, the onus to prove that the cheque in question was issued for discharging a certain legal debt would shift on to the shoulders of the complainant. That the complainant has not adduced any documentary evidence in support of his case to prove that the cheque issued was preceded by a legal liability, would be sufficient for the accused to dislodge the presumption. The court cannot and would not consider the submission of the complainant as a gospel and convict the accused.

 

Regards,

Ashish Davessar

Advocate

Delhi, Chandigarh

 
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proprietor

proof is must. mere presentation of a cheque is not sufficient to lodge a s/138 complaint. it has to be proved that liability to pay is there, 

 
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Law is blind,& saw only evidence.verbal accuse is not enought ,witness is necessary.

 
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advocate.dma@gmail.com

It is very rightly put. That if by chance some dishonest man gets hold of some signed cheque, the drawer is doomed for years to defend himself. 

 

The law is not like this, the intention of legislature was not this, but the judiciary has messed up this S.138 of NI Act. It is silly that such cases of friendly loan, blank cheque dishonor cases by Banks, signature mismatch, accounts closed 10 years back, all these go on for years.

 

One of my friend a retired senior judicial officer, became an honorary director of a public limited company, this company got involved into cheque bounce case, and a legal notice was served to this ex judge. He reailsed the implication and adhoc manner in which things are happening under this act. 

 
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proprietor

i  agree with this statement of all these go on for years. This is practise and we all are aware. No regrets.

being an ex-judge will give no advantage. 

 
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POWER OF DEFENSE IS IMMENSE

This is a technical law so you have multiple technical defenses also.

 

SC has held in many cases that the provisions of NI act are legal fiction and hence all of them have to be strictly followed .lapses on the part of complainant are fatal.

Most of the complainants fail to follow many imp requirements and that is why it is always easy for any accused of cheque case to win.

 
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proprietor

my experience is that the parties settle the matter in general, to avoid technical hardships, but accused to win for technical lapses, is not mostly observed by me.

 
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Advocate

The person who wish the court to believe in the existence of certain things must prove it with evidence. The onus is on him to convince the court that it exist.

 
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dear member

but there is clear presumption not only under sec 139 but also sec 118 of NI act. it cannot be bye passed by courts.

SC full bench has categorically held that once the signature on cheque is admitted by the drawyer, then the consequences will follow.

of course, if the accused has evidence to rebut the presumptions, he can succeed. he has to show that it is probable that there was no liability.

thanks

yours

v.lakshminarayanan

palani 

 
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