Negotiable Instruments Act, 1881:
s.138 and 139 – Dishonour of cheque for insufficient funds – Conviction by trial Court as well as appellate court – In Revision, High Court reversing the concurrent factual finding of courts below and acquitting the accused holding that heavy burden was on the complainant to prove that blank cheque was given to him towards repayment of the loan which he had advanced to the accused – On appeal, Supreme Court held: Section 139 introduces an exception to the general rule as to the burden of proof and shifts the onus on the accused i.e drawer of cheque – Section 139 is a presumption of law as distinguished from presumption of facts – Presumption contemplated u/s. 139 is rebuttable presumption – A reading of ss. 20, 87 and 139 makes it amply clear that a person who signs the cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption – It was not the case of the accused that the cheque was signed under threat or coercion or that the cheque was stolen – Existence of fiduciary relationship between the payee of the cheque and its drawer, would not disentitle the payee to the benefit of presumption u/s. 139 in the absence of evidence of exercise of undue influence or coercion – High Court ought not have acquitted the accused – Conviction affirmed – Evidence – Presumption.
s.138 – Object of – Held: Object of s.138 is to infuse credibility to negotiable instruments and to encourage and promote their use.
Chapter XVII – Object of – Held: The object of Chapter XVII is both punitive as also compensatory and restitutive – It provides a single forum and single proceeding for enforcement of criminal liability and for enforcement of civil liability. Evidence:
Presumption – Presumption of innocence is a human right – However, the guilt may be established by recourse to presumptions in law and presumptions in facts unless the accused adduces evidence showing the reasonable possibility of non-existence of presumed facts.
Code of Criminal Procedure, 1973:
Revisional jurisdiction – Scope of – Held: In exercise of Revisional jurisdiction, High Court cannot upset concurrent factual findings, in absence of perversity – It is not for the Revisional Court to re-analyse and re-interpret the evidence on record.
Constitution of India:
Art. 136 – Jurisdiction under – Exercise of – In appeal against acquittal – Held: If two views are possible, the Court in exercise of jurisdiction u/Art.136 would ordinarily not interfere with judgment of acquittal.
Precedent:
A judgment is a precedent for the issue which is raised and decided – What is binding on all courts is what Supreme Court says u/Art. 141 of the Constitution and not what it does u/Art. 142 – Constitution of India – Arts. 141 and 142.
Allowing the appeals, the Court
HELD: 1.1 The Trial Court and the Appellate Court arrived at the specific concurrent factual finding that the cheque had admittedly been signed by the respondent-accused. The Trial Court and the Appellate Court rejected the plea of the respondentaccused that the appellant-complainant had misused a blank signed cheque made over by the respondent-accused to the appellant-complainant for deposit of Income Tax, in view of the admission of the respondent-accused that taxes were paid in cash for which the appellant-complainant used to take payment from the respondent in cash. [Para 18][34-G-H, 35-A]
1.2 In exercise of revisional jurisdiction under Section 482 of the Criminal Procedure Code, the High Court does not, in the absence of perversity, upset concurrent factual findings. It is not for the Revisional Court to re-analyse and re-interpret the evidence on record. It is a well established principle of law that the Revisional Court will not interfere even if a wrong order is passed by a court having jurisdiction, in the absence of a jurisdictional error. [Paras 19 and 20][35-B-C] Southern Sales and Services and Others v. Sauermilch Design and Handels GMBH (2008) 14 SCC 457 :
[2008] 14 SCR 130 – relied on.
2.1 The object of Chapter XVII of the Negotiable Instruments Act is both punitive as also compensatory and restitutive. It provides a single forum and single proceeding for enforcement of criminal liability by reason of dishonour of cheque and for enforcement of the civil liability for realization of the cheque amount, thereby obviating the need for the creditor to move two different fora for relief. [Para 28][37-C]
2.2 Section 139 of Negotiable Instruments Act, mandates that unless the contrary is proved, it is to be presumed that the holder of a cheque received the cheque of the nature referred to in Section 138, for the discharge, in whole or in part, of any debt or other liability. The presumption contemplated under Section
139 of the Negotiable Instruments Act, is a rebuttable presumption. However, the onus of proving that the cheque was not in discharge of any debt or other liability is on the accused drawer of the cheque. Section 139 introduces an exception to the general rule as to the burden of proof and shifts the onus on the accused. The presumption under Section 139 of the Negotiable Instruments Act is a presumption of law, as distinguished from presumption of facts. Presumptions are rules of evidence and do not conflict with the presumption of innocence, which requires the prosecution to prove the case against the accused beyond reasonable doubt. The obligation on the prosecution may be discharged with the help of presumptions of law and presumptions of fact unless the accused adduces evidence showing the reasonable possibility of the non-existence of the presumed fact. Presumption of innocence is undoubtedly a human right. However the guilt may be established by recourse to presumptions in law and presumptions in facts. [Paras 21, 23 and 24][35-D-E, G, 36-A-C]
2.3 The onus to rebut the presumption under Section 139 that the cheque has been issued in discharge of a debt or liability is on the accused and the fact that the cheque might be post dated does not absolve the drawer of a cheque of the penal consequences of Section 138 of the Negotiable Instruments Act. A meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted. [Paras 36 and 37][38-G-H, 39-A-C]
2.4 If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque and would attract presumption under Section 139 of the Negotiable Instruments Act. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence. [Paras 38 and 40][39-C-D, E]
2.5 It is not the case of the respondent-accused that he either signed the cheque or parted with it under any threat or coercion. Nor is it the case of the respondent-accused that the unfilled signed cheque had been stolen. The existence of a fiduciary relationship between the payee of a cheque and its drawer, would not disentitle the payee to the benefit of the presumption under Section 139 of the Negotiable Instruments Act, in the absence of evidence of exercise of undue influence or coercion. [Para 39][39-D-E]
2.6 The High Court ought not to have acquitted the respondent-accused of the charge under Section 138 of the Negotiable Instruments Act. The conviction of the respondent under Section 138 of the Negotiable Instruments Act is confirmed. However, the respondent-accused is sentenced only to fine, which is enhanced to Rs.16 lakhs and shall be paid as compensation to the appellant-complainant. [Paras 42 and 44][40-C, E] Hiten P. Dalal v. Bratindranath Banerjee (2001) 6 SCC
16 : [2001] 3 SCR 900; State of Madras v. Vaidyanatha Iyer AIR 1958 SC 61 : 1958 SCR 580; Ranjitsing Brahmajeetsing Sharma v. State of Maharashtra and Anr (2005) 5 SCC 294 : [ 2005] 3 SCR 345; Rajesh Ranjan Yadav @ Pappu Yadav v. CBI through its Director (2007) 1 SCC 70 : [2006] 9 Suppl. SCR 40; Laxmi Dyechem v. State of Gujarat & Ors. (2012) 13 SCC 375 : [2012] 11 SCR 466; Kumar Exports v. Sharma Carpets (2009) 2 SCC 513 : [2008] 17
SCR 572; K.N. Beena v. Muniyappan and Another (2001) 8 SCC 458 : [2001] 4 Suppl. SCR 374 ; R.Vijayan v. Baby and Another (2012) 1 SCC 260 : [2012] 14 SCR 712 – relied on.
Raj Kumar Khurana v. State of (NCT of Delhi) & Anr. (2009) 6 SCC 72 : [2009] 7 SCR 434 – distinguished. Krishna Janardhan Bhat v. Dattatraya G. Hegde (2008)
4 SCC 54 : [2008] 1 SCR 605 – referred to.
3. The object of Section 138 of the Negotiable Instruments Act is to infuse credibility to negotiable instruments including cheques and to encourage and promote the use of negotiable instruments including cheques in financial transactions. The penal provision of Section 138 of the Negotiable Instruments Act is intended to be a deterrent to callous issuance of negotiable instruments such as cheques without serious intention to honour the promise implicit in the issuance of the same. Having regard to the object of Section 138 of the Negotiable Instruments Act, a prosecution based on a second or successive default in payment of the cheque amount is not impermissible simply because no statutory notice had been issued after the first default and no proceeding for prosecution had been initiated. [Paras 9 and 10] MSR Leathers v. S. Palaniappan & Anr (2013) 1 SCC
177 : [2012] 9 SCR 165 – relied on.
4. If two views are possible, this Court, in exercise of its jurisdiction under Article 136 of the Constitution would ordinarily not interfere with a judgment of acquittal, is well settled. [Para 31]
John K John v. Tom Varghese & Anr. (2007) 12 SCC
714 : [2007] 11 SCR 287 – relied on.
5. A judgment is a precedent for the issue of law which is raised and decided. It is the ratio decidendi of the case which operates as a binding precedent. What is binding on all courts is what the Supreme Court says under Article 141 of the Constitution, which is declaration of the law and not what it does under Article 142 to do complete justice. [Para 34] State of Punjab & Ors. v. Surinder Kumar & Ors. (1992)
1 SCC 489 : [1991] 3 Suppl. SCR 553 – relied on. “Constitutional Supremacy - A Revisit” by V. Sudhish Pai – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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