Onus of Proof U/S 138 N.I. Act: Prima Facie Case Must Prevail: Delhi High Court
In a significant ruling on October 17, 2023, the Delhi High Court emphasized the importance of establishing a prima facie case in cheque bounce cases. The Bench, led by HON’BLE MS. JUSTICE SWARANA KANTA SHARMA, reaffirmed that in such cases, the burden of proof lies with the accused to demonstrate the absence of a legally enforceable debt U/S 138 N.I. Act.
The judgment, which delved into the intricacies of Section 138 of the Negotiable Instruments Act, 1881, and other relevant provisions, addressed a dispute over the issuance of cheques. The petitioners had sought the quashing of Complaint Cases filed against them under Section 138 of the NI Act, contending that the allegations regarding the issuance of cheques were disputed.
However, the Bench held that the issue of whether the cheques were issued toward the discharge of a legally enforceable debt should be determined during the trial. The judgment reiterated well-established principles in cheque bounce cases, highlighting that a prima facie case against the accused must prevail at the pre-trial stage.
“Principles regarding cheque bounce cases reiterated by Hon’ble Apex Court – Onus of proving no existing debt or liability on accused – Factual issues and probable defense to be decided during trial – Complaints maintainable – Petitions dismissed,” the judgment stated [Para 1-17].
The ruling underscores the significance of adhering to the established legal framework governing cheque bounce cases and ensuring that a prima facie case is made out before considering quashing proceedings.
This judgment provides clarity on the burden of proof in cheque bounce cases and reinforces the importance of conducting a thorough trial to determine the veracity of the allegations. It is expected to have a significant impact on future cases involving disputes over dishonored cheques.
In the referenced cases, the Bench considered various legal precedents, including Dashrathbhai Trikambhai Patel v. Hitesh Mahendrabhai Patel (2023) 1 SCC 578, Rathish Babu Unnikrishnan v. State (NCT of Delhi) 2022 SCC OnLine SC 513, M.M.T.C. Ltd. v. Medchl Chemicals and Pharma (P) Ltd.3, Basalingappa v. Mudibasappa (2019) 5 SCC 418, and Rajeshbhai Muljibhai Patel v. State of Gujarat.
This ruling serves as a reminder to all stakeholders involved in cheque bounce cases to carefully consider the burden of proof and the need for a prima facie case when seeking remedies before the court.
Date of Decision: October 17, 2023
RAJENDRA PRASAD MITTAL AND ANR. vs MANISH GARG AND ANR.
