Whether it is mandatory to examine the banker for the purpose of proving the dishonour of the cheque? What are other modes available to prove the basic facts of Dishonour ?

Whether it is mandatory to examine the banker for the purpose of proving the dishonour of the cheque? What are other modes available to prove the basic facts of Dishonour ?

Bank’s slip prima facie evidence of certain facts.—The Court shall, in respect of every proceeding under this Chapter, on production of bank’s slip or memo having thereon the official mark denoting that the cheque has been dishonoured, presume the fact of dishonour of such cheque, unless and until such fact is disproved

once such a memo or slip issued by the bank bearing its official mark concerning dishonour of cheque is placed on record by the complainant, the burden is clearly on the accused to disprove the fact of dishonour of cheque.

However, If the banker’s return memo does not bear official

mark of the bank the mode specified in Section 146 of the said Act is not satisfied and consequently no presumption arose about dishonour of cheque in question. Only in such a situation, the complainant is expected summon the bankers for the purpose of proving the Dishonour.

RBI/2011-12/121DPSS.CO.CHD.No.120/03.06.01/2011-12 July 25, 2011

The Chairman and Managing Director / Chief Executive Officer

All Scheduled Commercial Banks including RRBs /

Urban Co-operative Banks / State Co-operative Banks /

District Central Co-operative Banks

Madam / Dear Sir,

Dishonour / Return of Cheques - Need to Sign / Initial the Cheque

Return Memo

Please refer to our circular DPSS. CO. CHD. No. 485 / 03.06.01 /

2010-11 dated September 1, 2010 on Dishonour / Return of Cheques - Need to Mention the 'Date of Return' in the Cheque Return Memo, wherein citing the criticality of the document in case of recourse to legal action, it has been indicated that instruments returned unpaid should have a signed / initialed objection slip on which a definite and valid reason for refusing payment must be stated, as

prescribed in Rule 6 of the Uniform Regulations and Rules for Bankers’ Clearing Houses (URRBCH).

Certain instances of banks not signing the Cheque Return Memos

stating that the Memos are computer generated and therefore no

signature is necessary, have been brought to our notice. Such practices are violation of instructions contained in Uniform Regulations and Rules for Bankers’ Clearing Houses (URRBCH) which is issued under Payment and Settlement Systems Act 2007 read with Payment and Settlement Systems Regulations 2008.

Banks are, therefore, advised to strictly adhere to the instructions and sign/initial the Cheque Return Memos as laid down in Rule 6 of URRBCH.

Yours faithfully,

(Pankaj Ekka)

Deputy General Manager

Whether the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability?

Yes. Reference. [Rangappa Vs. Sri Mohan AIR 2010 SC

1898,] Presumption mandated by section 139 of Negotiable

Instruments Act, 1881 does include existence of a legally

enforceable debt or liability When an accused has to rebut

the presumption under section 139, the standard of proof for

doing so is that of `preponderance of probabilities’;

therefore, if the accused is able to raise a probable defense

which creates doubts about the existence of a legally

enforceable debt or liability ; then the accused is enttittled

for acquital

 

 Whether Inquiry Under Section 202, CrPC is Mandatory if the Accused Resides Beyond the Jurisdiction of the Court?

The Constitution bench judgement of the Apex court in the

case of ‘In Re: Expeditious Trial Of Cases Under

Section138 Of N.I. Act 1881’ 2021 SCC OnLine SC 325,

decided on 16.04.2021 it has been held that

“For the conduct of inquiry under Section 202 of the Code,

evidence of witnesses on behalf of the complainant shall be

permitted to be taken on affidavit. In suitable cases, the

Magistrate can restrict the inquiry to examination of

documents without insisting for examination of witnesses.”