SC on NI Act: Unless cogent Evidence is led, presumption u/s 139 NI Act can't be rebutted. [Read the Order]

25 Feb 2020

Categories: Latest News Case Analysis

In one judgement, delivered last week, the Supreme Court has observed that the rebuttal of presumption available under Section 139 of Negotiable Instruments Act can only be done after adducing evidence.

The judgement came out in one case titled as SHIV KUMAR ALIAS JAWAHAR SARAF v/s RAMAVTAR AGARWAL.

After hearing from Learned Counsel of both the sides, the Court agreed with the High Court view in the judgement given that rebuttal of presumption cannot be looked into at the stage of the Court taking cognizance of the offence.

During the hearing, the Learned Counsel of the accused, contended that the Magistrate could have examined the materials filed along with the complaint and from the materials which were brought on the record it was clear that there was no legally enforceable debt hence there was no case for taking cognizance of the offence and registering the criminal complaint.

The High Court, in its judgement, refused to quash the complaint and observed that while registering the case all that Court would have to see is whether there is a prima facie case made out meeting the conditions precedent as envisaged under Section 138 of NI Act.

It remarked:

"The presumption available under Section 139 of NI Act has to be rebutted and that rebuttal can only be done after adducing evidence. This, by itself clearly reflects that the rebuttal presumption cannot be looked into at the stage of the Court taking cognizance of the offence and registering the case all that Court would have to see is whether there is a prima facie case made out meeting the conditions precedent as envisaged under Section 138 of NI Act, which in the instant case, in the opinion of this Court, the Respondent has in fact been able to establish and fulfill all such ingredients."

"As has been stated in the preceding paragraphs since there is a presumption to be drawn of there being debt or liability in part or in the whole of the drawer to the holder of the instrument, the Court below cannot be said to have faulted upon in taking cognizance and in registering the offence. Since it is a rebuttal presumption and all the contentions and averments made by the counsel for the Petitioner being his defence, it would be open for him to raise all these grounds at the stage of leading evidence including the defence of the existence of the legally enforceable debt or liability. However, there can be no doubt that at the time of filing of complaint there was always initial presumption which would be in favour of the complainant."

The Top Court agreed with the viewpoint adopted by the High Court and while upholding the same added that the rebuttal can be made with reference to the evidence of the prosecution as well as of defence.

On the basis of the above observation, the Court dismissed the appeal and stated:

"We are in full agreement with the opinion of the High Court expressed in the above-noted paragraphs which has been referred by learned counsel for the appellant. It is well settled that the rebuttal can be made with reference to the evidence of the prosecution as well as of defence."

The order has been delivered by a bench comprising of Justice ASHOK BHUSHAN and Justice K.M. JOSEPH on 19-02-2020.

Read Order Here:

Tags : Supreme Court Evidence Negotiable Instruments Act

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