Learned counsel also placed reliance on the case of Swastik Coasters P. Ltd. v.

Deepak Brothers [1997] 89 Comp Cas 564 ; DCR 259, the Andhra Pradesh High Court has held that "on date of issuing of cheque, material was not supplied by the complainant and cheque was issued post-dated--Material supplied was found not of agreed quality--Cheque was presented third time after accused intimated about rejection of material--No infirmity in reasoning of trial court that on date of cheque there was no existing debt or liability--No offence was constituted under Section 138 of the Act".

Dishonour of cheque - Complaint - Quashing of - Non supply of goods for which cheque was issued - Not a ground to quash complaint - It is a matter of fact which has to be proved before a Court of law. (M/s.Shirdi Overseas Imports & Exports & Anr. Vs M/s.Serve Overseas & Anr.) 2007(2) Civil Court Cases 638 (P&H) : 2007(2) Criminal Court Cases 1057 (P&H)

The other case relied upon is Supply House, Represented by Managing Partner vs. Ullas; 2006 CLJ 4330 (Kerala) wherein cheques were issued by the accused at the time of placing order for 28 number of mixies. The order was placed on 9th February, 1998 and cheque was of 24th March, 1998. The cheque was got stop payment and the accused informed the complainant not to present the cheques to the bank as the complainant had failed to supply the items in time. The Kerala High Court observed that the accused had not incurred liability for the amount covered by the post-dated cheque and unless the complainant proves that the liability to be settled was to the tune of the amount of the cheque, he could not have made use of the cheque. The court further observed that cheque cannot be stated to have been issued in discharge of the liability.

In the decision reported in Krishna Janardhan Bhat v. Dattatraya Hegde (2008 (1) KLT 425 (SC), the Apex court has held that existence of legally recoverable debt is not a matter of presumption under section 139 and it does not raise a presumption in regard to existence of a debt also. In the present case, even the pleadings in the complaint is not sufficient to show that there was an existing debt or liability. In the same decision, the Apex Court has held that "whereas prosecution must prove the guilt of an accused beyond all reasonable doubt, the standard of proof so as to prove a defence on the part of an accused is 'preponderance of probabilities'. Inference of preponderance of probabilities can be drawn not only from the materials brought on records by the parties but also by

CRL.A. 1585/03 reference to the circumstances upon which he relies".

M/S Kumar Exports vs M/S Sharma Carpets on 16 December, 2008 - Under the circumstances the defence of the appellant that blank cheques were obtained by the respondent as advance payment also becomes probable and the onus of burden would shift on the complainant. The complainant did not produce any books of account or stock register maintained by him in the course of his regular business or any acknowledgement for delivery of goods, to establish that as a matter of fact woolen carpets were sold by him to the appellant on August 6, 1994 for a sum of Rs.1,90,348.39. Having regard to the materials on record, this Court is of the opinion that the respondent failed to establish his case under Section 138 of the Act as required by law and, therefore, the impugned judgment of the High Court is liable to be set aside.