Supreme Court: Presumption Under Section 139 NI Act Includes A Presumption That There Exists A Legally Enforceable Debt Or Liability

The Supreme Court in the case Jain P. Jose vs Santhosh observed and has reiterated that the presumption under Section 139 of Negotiable Instruments Act, 1881 includes a presumption that there exists a legally enforceable liability or debt.
In the present case, a cheque bounce complaint has been dismissed by the High Court on the ground that the complaint was not able to adduce sufficient evidence that he was in a position for advancing a loan of Rs. 9 lakhs to the accused. Therefore, the High Court of Kerela upheld the Trial Court order and has relied on a decision in the case John K. Abraham v. Simon C. Abraham.
In appeal, it has been noted by the Apex Court bench comprising of Justice Sanjiv Khanna and Justice J K Maheshwari observed and has stated that the accused had accepted his signature on the subject cheque. Further, it was stated that this court does not think that the High Court was right in holding that the onus was not on the side of the accused to show that the debt was neither due and was nor payable.
The bench while relying upon the decision in the case T. Vasanthakumar Vs. Vijaykumari observed that this decision, refers to an earlier judgment of this Court in the case Rangappa vs. Sri Mohan, wherein the court made it clear on the presumption as stated under Section 139 of the NI Act, the bench observed that this includes a presumption that there exists a legally enforceable debt or liability. However, the presumption stated under Section 139 of the N.I. Act is rebuttable and the same is open to the accused for raising a defence wherein the existence of a legally enforceable debt or liability can be contested.
Further, the court observed and has held that that the complainant was entitled to the benefit of presumption given under Section 139 of the N.I. Act, 1881. The bench while allowing the appeal directed the High Court for considering the evidence and the material on record to decide whether the offence under Section 138 of the N.I. Act is established and made out.
However, the court noted that the Supreme Court in the case Krishna Janardhan Bhat v. Dattatraya G. Hegde, wherein the court observed and has held that matter of presumption under Section 139 of the Act is not the existence of legally recoverable debt. The three judges bench in Rangappa vs Sri Mohan, later overruled this view.