Case details: Ashok Singh Vs Ravindra Parat Singh & Anr (Criminal Appeal No. 4171 Of 2024)
Critical Point of Judgement: “The burden of proof lies on the accused and he has to raise a probable defence. In the absence of any evidence, a mere oral statement that there did not exist any debt would not be sufficient to rebut the presumption, especially when the signature on the cheque has been admitted by the accused in his evidence”.
Significant Findings in the Judgment: Loss of cheque was reported to Police after cheque bounce case is initiated and no FIR was registered, hence such defence does not carry any evidentiary value.
Important lessons from the Judgment:
- Reference was made for the case of Aparna A Shah v. Sheth Developers Private Limited, (2013) 8 SCC 71, in which it was held that ‘…under Section 138 of the Act, it is only the drawer of the cheque who can be prosecuted.’ Hence, defenses taken about impleading the name of partnership firm, company etc. are less convincing in cheque bounce cases.
- Liability is based on the role played by the Partner, Director, etc. in the firm / company which is important factor in deciding the continuation or squashing of cheque bounce case against such Partner / Director.
- It is essentially need to be confirmed whether the signatory of the cheque is arrayed as accused and he/she is also the person in charge, then only complaint would be maintainable against such person.
Essential Conclusions:
- The details of taking out money from bank and actual handover of money as ‘loan’ to the Accused are immaterial. The ‘Onus’ (means duty or responsibility) is not on the Complainant to prove his / her financial capacity to give any amount as ‘loan’.
- It is recommended to have well drafted and duly executed ‘Loan Agreement’ between the parties to safeguard their rights in any legal battles.
Judgement Analyzed By,
Shailendra M Deshpande
Advocate & Trademark Attorney
+91 98900 32603
