APS FOREX SERVICES PVT. LTD. versus SHAKTI INTERNATIONAL FASHION LINKERS & ORS.

APS FOREX SERVICES PVT. LTD. versus SHAKTI INTERNATIONAL FASHION LINKERS & ORS.

Because the accused admitted issuance and signature of the cheque and the cheque in question was issued again after earlier cheques were dishonoured, the rebuttable presumption under Section 139 of the N.I. Act that a legally enforceable debt or liability existed arose; the accused failed to lead evidence to rebut that presumption (for example, proof of full payment or credible evidence that the cheque was only security), therefore the trial court and High Court erred in acquitting and the accused are to be convicted under Section 138.

Parties
Appellant/complainant: APS Forex Services Pvt. Ltd.; Respondents/original Accused: Shakti International Fashion Linkers & Ors.
Jurisdiction
India
Judgment Date
14 February 2020
Procedural Posture
Criminal Appeal / Appeal to Supreme Court (final Judgment)
Outcome
Appeals allowed; judgments and orders of acquittal by the trial court and High Court quashed and set aside; original accused held guilty under Section 138 of the N.I. Act
Legal Topics
Section 138 N.i. Act, Section 139 N.i. Act, Presumption of Debt, Reverse Onus, Dishonour of Cheque, Stop Payment, Financial Capacity
Negotiable Instruments Act, 1881 Criminal Law Evidence Section 138 N.i. Act Section 139 N.i. Act Presumption of Debt Reverse Onus Dishonour of Cheque +2 more

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Parties

APS Forex Services Pvt. Ltd.

Appellant/complainant

Shakti International Fashion Linkers & Ors.

Respondents/original Accused

Procedural Posture

Criminal Appeal / Appeal to Supreme Court (final Judgment)

Legal Issues

  1. 1 Whether presumption under Section 139 of the Negotiable Instruments Act applies upon admission of issuance and signature of cheque
  2. 2 Whether the accused rebutted the presumption by adducing evidence that the debt was paid or that the cheque was given only as security
  3. 3 Whether the trial court and High Court erred in shifting burden to the complainant to prove the debt or liability

Ratio Decidendi

Because the accused admitted issuance and signature of the cheque and the cheque in question was issued again after earlier cheques were dishonoured, the rebuttable presumption under Section 139 of the N.I. Act that a legally enforceable debt or liability existed arose; the accused failed to lead evidence to rebut that presumption (for example, proof of full payment or credible evidence that the cheque was only security), therefore the trial court and High Court erred in acquitting and the accused are to be convicted under Section 138.

Court Disposition

Appeals allowed; judgments and orders of acquittal by the trial court and High Court quashed and set aside; original accused held guilty under Section 138 of the N.I. Act

Orders

  • All original accused convicted under Section 138 of the Negotiable Instruments Act, 1881
  • Original Accused Nos.2 to 4 sentenced to undergo three months simple imprisonment each with a fine of Rs.10,000 each and in default to undergo further one month simple imprisonment