Priya Gour
Published on: 1st September, 2022 at 19:22 IST
While hearing a cheque bounce case, the Supreme Court has said that under Section 138 of the Negotiable Instruments Act (NI Act), the complainant has no obligation to disclose the nature of the transaction or source of fund.
The bench of Justices MR Shah and BV Nagarathna ruled that the accused must prove that the cheque was not issued to pay a debt or liability.
The top court was hearing an appeal against a 2017 Kerala High Court judgement. The respondent-accused was acquitted by the court of the offence under Section 138 of the NI Act after reversing the findings of the lower court. The trial court and sessions court had convicted and ordered the respondent to pay Rs. 5,00,000 to the complainant along with a 3-month sentence.
The apex court permitted the appeal against the high court’s order by noting that the high court had granted acquittal only because the complainant had failed to specify the nature of the transactions and the source of funds in the complaint. The statutory presumption in Section 139 of the NI Act was excluded by the court while revising the lower court’s order.
Section 139 of the NI Act is a statutory presumption. If the signature and the cheque are not in dispute, it is assumed that the cheque was issued for liability discharge to the complainant. The accused is then responsible for proving the burden.
“..Therefore, once the initial burden is discharged by the complainant that the cheque was issued by the accused and the signature and the issuance of the cheque is not disputed by the accused, in that case, the onus will shift upon the accused to prove the contrary that the cheque was not for any debt or other liability,” the Court said.
Hence, the above burden of proof lies with the accused.
Thus, the apex court allotted a two-month time period to the accused to pay the necessary amount.