Presumption under Section 139 of NI Act - Legally enforceable debt.

2010(2) MADRAS WEEKLY NOTES (Crl) Dishonour of Cheque Cases – Supreme Court – Page 5

Section 139 – Presumption under – If extends to existence of a legally enforceable debt or liability – Whether existence of legally enforceable debts is not a matter of presumption under Section 139? – Whether view taken by Krishna Janardhan Bhatt in conflict with statutory provisions as also established line of precedents? – Held, presumption mandated by Section 139 includes existence of a legally enforceable debt or liability – To that extent observation in  Krishna Janardhan Bhatt not correct – Presumption being in nature of rebuttable presumption it is open to Accused to raise defence wherein existence of legally enforceable debt or liability can be contested – When accused has to rebut presumption under Section 139, standard proof for doing so is that of “preponderance of Probabilities” – If Accused is able to raise a probable defence which creates doubt about existence of a legally enforceable debt or liability, prosecution can fail.

Stop Payment instruction – Effect of – Cheque dishonoured on account of “Stop Payment” instructions sent by Accused to his Bank – Section 138 held, attracted irrespective of insufficiency of funds in accounts – Decision in Goa Plast quoted.