[NI Act section 138] Section 139 presumption exempts complainant from proving transaction or source of funds.

07 May 2024 8:19 AM

By: Admin

According to a recent decision by the Supreme Court, in a case involving a dishonoured check under Section 138 of the Negotiable Instruments Act, the complainant is not required to describe the transactions or the source of funds in the complaint because it is up to the accused to show that the cheque in question was not written to pay a debt or liability.

The presumption u.s. 139 of the NI Act is a statutory provision, according to the bench of Justices MR Shah and BV Nagarathna, and after the check and signature are accepted, it is assumed that the check was issued to discharge any debt or obligation in favour of the complaint or the check's holder. The accused would have the burden of proving otherwise, the court made clear.

These observations were issued by the Supreme Court in relation to a 2017 Kerala High Court decision that reversed the findings of the lower court and exonerated the accused of a violation of Section 138.

The offender was found guilty by the Sessions and trial court, which also ordered that he reimburse the complainant Rs 5,00,000 and gave him a three-month prison term.

When the case made it to the Supreme Court, it was observed that the High Court had exonerated the accused since the complainant had not specified the source of cash or the specifics of the transactions.

The Top Court claimed that when exercising its revisional authority, the High Court had not addressed the statutory presumption mentioned in Section 139 of the NI Act.

The first accused was given two months to pay the money after the court granted the instant appeal.

P Rasiya

Abdul Nazer & Anr