Once Execution of Cheque is Admitted it gives Rise to Presumption u/Section 139 of Negotiable Instrument Act

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January 24, 2019

Case name: A.K.Mohammed Farook vs M.Syed Jaheer Hussain 

The present appeal before the High Court of Madras challenges Lower Court’s order, whereby the Court acquitted the respondent/accused under Section 138 of Negotiable Instrument Act, 1881.

The complainant’s case is that the respondent had issued a cheque in favour of the appellant and the said cheque was returned due to insufficient fund. Therefore, the appellant issued a statutory notice and the said notice was received by the respondent, however the respondent did not repay the money mentioned in the statutory notice.

On the other hand, the respondent in the case contended that the impugned cheque was not issued for a legally enforceable debt but only for the purpose of security in the course of his partnership firm with the complainant.

The High Court of Madras in view of the facts and circumstances of the case found the respondent guilty for dishonor of cheque and made the following observations in the case:

That once execution of cheque is admitted, it is a legal presumption under Section 139 of Negotiable Instrument Act. It was also opined by the Court in the case that once issuance of cheque is being admitted and even for security purpose, the presumption under Sections 118 and 139 of Negotiable Instrument Act, it is for the accused to rebut the presumption that there is no legally enforceable debt and cheque has not been issued for legally enforceable debt.

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