In the case of Ulla v. State, the principle under Section 19 of the Indian Penal Code (IPC) and the provisions of Section 403 of the Code were discussed. Section 118 of the Negotiable Instruments Act provides, inter alia, that until the contrary is proved, it shall be presumed that every negotiable instrument was made or drawn for consideration. Furthermore, every such instrument, when it has been accepted, endorsed, negotiated, or transferred, is presumed to be for consideration.

The presumption under Section 138 of the Negotiable Instruments Act is more specific. It states that where a cheque drawn by a person on an account maintained by them for payment of any amount of money towards the discharge, in whole or in part, of any debt or other liability is returned unpaid by the drawee bank, either because the account has insufficient funds to honor the cheque or for any other reason, such a person shall be deemed to have committed an offence. The offender may be punished with imprisonment for a term that may extend to twice the amount of the cheque or with a fine that may extend to twice the amount of the cheque, or with both.

The presumption under Section 138 is subject to three conditions:

1. Presentation of the cheque within the period of validity.
2. Issuance of a notice to the drawer demanding payment after the cheque is returned unpaid.
3. Non-payment by the drawer within the stipulated time after receipt of the notice.

The existence of legally recoverable debt or liability is a matter of presumption under section 139 of the Act.

Standard of Proof for Rebuttal of Presumption - Standard of proof for rebuttal of presumption is not same as in for proof of criminal charge.
For rebuttal of presumption principle of preponderance of probability applies while for proving criminal charge principle of strict proof is available.

Sections 135 and 138 "Mandate" Means in the Commercial Circle as per the Law Lexicon "A mandate is a contract by which a lawful business is committed to the management of another, and by him undertaken to be performed without reward."

It is also further seen from the said definition, a mandate is an act by which one person gives power to another to transact for him and in his name, one or several affairs. From the above definition, it is crystal clear that the role of the mandate holder is limited. In the sense, obeying the mandate or any of the member and in this way alone, the accused in this case had signed in the cheque as mandate holder and therefore, as such, he cannot be held responsible for the non-payment or the amount.

In view of the specific provisions available under section 135 of the Act, the mandate holder is not the drawer in the real sense, as it should be understood for the purpose of section 138 of the Act and it is also an admitted position, that the mandate holder is not the account holder, though he is the authorized signatory on behalf of the account holder.

In G. Rukkumani v. K. Rajendran, it was held that the mandate giver cannot be let off on the ground that he had not signed in the cheque concluding there was no liability under the Negotiable Instruments Act, when it is shown the cheque was issued to discharge the liability. In the case involved in the above decision, the mandate holder as well as the account holder were shown as accused in an offence coming under section 138 of the Negotiable Instruments Act.

In that case, the person, who had given the mandate to the person, who had signed in the cheque,

End Notes:

• Hiten P. Dalal v. Bratindranath Banerjee, AIR 2001 SC 3897: II (2001) BC 773: (2001) 6 SCC 16: (2001) 106 Comp Cas 574: 2001 Cr LJ 4647 (SC).
• Rangappa v. Mohan, 2011 ACD 7 (SC) (15): (2010) 3 MLJ (Cri) (SC): (2010) 11 SCC 441.
• Kamal General Store v. Kishori Lal Vij, III (2009) BC 633.
• Ravi Chandran v. Subramanian, (2006) 1 KLT 611: IV (2006) BC 54 (Mad).
• 2001 Cr LJ 3120 (Mad): 2002 (2) Bank CLR 116: 2001 (4) Civ LJ 534.