Read Order: M/s American Agri Science and Another v. M/s Aashirvad Fertilizers and Pesticides and Another

Monika Rahar

Chandigarh, May 10, 2022: The Bench of Justice Avneesh Jhingan of the Punjab and Haryana High Court has held that there is no quarrel on the proposition that presumptions in favour of the cheque holder under Sections 118 and 139 of the Negotiable Instruments Act, 1881 are rebuttable. 

The Court was dealing with an application under Section 378(4) Cr.P.C. for grant of leave to appeal against acquittal of the second respondent in a Complaint case. The application is accompanied by an application for condoning the delay of 49 days.

The brief facts are that the complainant-Sanjay was running a sole proprietorship concern in the name and style of M/s American Agri. Science and was engaged in the sale and purchase of pesticides. A cheque, issued by the respondents was presented to the bank and it was returned with the comments “payment stopped by drawer”. After issuing notice, the complaint under Section 138 of the NI Act was filed.

The case set up by the complainant was that the respondents purchased pesticides and were to pay Rs.4,03,102/-, excluding the interest accruing @ 1.5% per annum w.e.f. April 01, 2016. The case of the respondent was that it had business with the complainant and was purchasing pesticides on credit basis. He agreed to repay the amount along with interest @ 1.5% per annum. 

Two security cheques were issued but the accounts were settled on payment of Rs.3,95,000/-. In support of his case, the respondent examined a witness who deposed that the money was paid in his presence. The receipt mentioned that the amount was received as full and final payment. 

The trial court acquitted the respondent considering that presumption against the complainant was rebutted and the petitioner failed to discharge the onus that the cheque presented was issued in discharge of debt or other liability. 

The counsel for the petitioners submitted that there was variation between the statement made under Section 313 Cr.P.C. and the cheque number mentioned on the receipt. The amount for which the cheque was issued was different from the amount which was paid for settlement of the account. 

The Court opined at the outset that there was no quarrel on the proposition that presumptions in favour of the cheque holder under Sections 118 and 139 of the Act were rebuttable. The Court further noted that the Second Respondent in the present case successfully rebutted the presumptions by the deposition of the witnesses mentioned above. 

Justice Jhingan added that it was undisputed that the receipt issued by Area Manager of the first petitioner contained two facts, the first of which was that the payment was received as full and final settlement of the account and secondly that the complainant was in possession of two security cheques. 

Further the Court made reference to the Supreme Court in Vijay v. Laxman and another, wherein it was held that the courts can take into consideration the circumstances appearing in the evidence to determine whether the presumption should be held to be sufficiently rebutted. Also, it was held that the legal position regarding the standard of proof required for rebutting a presumption is fairly well settled by a long line of decisions of this Court.

Coming to the present case, the Court added that after successful rebuttal of the presumptions by respondent, the complainant failed to discharge the onus cast upon him that the cheque was issued for discharge of debt or other liability. 

Accordingly, the Court concluded that no case was made out for grant of leave to appeal as no legal or factual error, much less perversity, was pointed out in the impugned order. Thus, the application was dismissed.

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