The recent judgment of Jagbir Singh vs. Amrendra Jha (2022) has brought to light the essential ingredients of Section 138 of the Negotiable Instruments Act (NI Act), 1881. The judgment, pronounced on January 14, 2022, by the Metropolitan Magistrate, Saket Courts, New Delhi, has acquitted the accused, Amrendra Jha, of the charges under Section 138 NI Act.
The Case: A Brief Overview
The complaint was filed by Jagbir Singh, alleging that Amrendra Jha had issued two cheques, bearing numbers 149851 and 149860, dated January 28, 2018, and January 15, 2018, respectively, for Rs. 1,00,000 and Rs. 2,00,000. The cheques were returned unpaid by the bank, with the remarks “account closed.” The complainant claimed that the accused had taken a friendly loan of Rs. 3,00,000 in 2016 and had executed a promissory note.
The Accused’s Defense
The accused, Amrendra Jha, pleaded not guilty and claimed trial. In his statement of defense, he stated that the cheques in question were given as security cheques at the time of taking the loan in August 2016. He further stated that he had closed his account in 2017, and the complainant had knowledge of the same.
The Judgment
The court, after considering the evidence and arguments, held that the accused had raised a probable defense and had rebutted the presumption under Section 139 NI Act. The court observed that the cheques in question were security cheques and not given for the discharge of any debt or liability.
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Implications of the Judgment
This judgment has significant implications for cases under Section 138 NI Act. It highlights the importance of the accused raising a probable defense and rebutting the presumption under Section 139 NI Act. The judgment also emphasizes the need for the complainant to prove that the cheque was received in discharge of a legal debt or liability.
Understanding Section 138 NI Act
Section 138 NI Act deals with the dishonour of cheques and the penalties associated with it. To understand the latest judgment, it is crucial to know the key ingredients of Section 138.
Ingredients of Section 138
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The accused must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person.
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The cheque has been presented to the bank within a period of six months (reduced to three months vide RBI circular dated 4.11.2011) from the date on which it is drawn or within the period of its validity, whichever is earlier.
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The cheque is returned by the bank unpaid, and the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing to the drawer of the cheque.
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The drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice.
Presumption under Section 139 NI Act
It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque for the discharge, in whole or in part, of any debt or other liability. Section 139 NI Act is a type of reverse onus clause, which stipulates a presumption in favor of the complainant as to the fact of a cheque being received in discharge of a legal debt or liability.
Burden of Proof
The burden of proof is on the accused to raise a probable defense and rebut the presumption under Section 139 NI Act. The standard of proof for rebutting the presumption is that of preponderance of probabilities. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him.
Conclusion
In conclusion, the latest judgment of Jagbir Singh vs. Amrendra Jha (2022) provides valuable insights into the ingredients of Section 138 NI Act and the burden of proof on the accused. The judgment highlights the importance of the accused raising a probable defense and rebutting the presumption under Section 139 NI Act. This judgment is a significant development in the law relating to dishonour of cheques and will have far-reaching implications for future cases.