Cheque bounce - once the settlement of account is proved - mere discripancy in items of settlement did not discharge the burden on the accused to rebut the presumption and non examination of the accused is fatal to his defence - trial court dismissed the case as if the cheque amount is more than to debt - High court confirmed the same - misreading of legal positions and misapplication of facts are liable to be set aside .
Trial couert findings
The learned Trial Court returned a finding that mere production of entry Exh. DW1/A is not sufficient to prove that he has not issued the said cheque as such report could have been made with
intention to create false evidence of the loss of cheque book. The court found that in fact if the cheque has been lost, the accused had several opportunities to lodge FIR qua the misuse of said
cheque as he has signed acknowledgement of notice Exh.CW1/G.
The learned Trial Court recorded the following findings:
“….Thus, it stands proved beyond reasonable doubt that the
cheque Ext. CW1/B was issued by the accused in favour of
the complainant. Further, the dishonor of the cheque has
also been proved through return memo Ext. CW1/C. Further
the legal demand notice was also issued within a period of
30 days from the date of dishnour. Thereafter, the present
complaint has been filled within the period of limitation.”
Still further, the learned Trial Court held the presumption that the amount of cheque is legally enforceable debt, has not been rebutted when the following finding was returned:“….Neither any meaningful cross-examination of the complainant has been done on this point of his financial
capacity. Accordingly, the aforesaid presumption has not been rebutted by the accused by proving that the complainant did not have the requisite financial capacity. Accordingly, the said defence is rejected.”
However, the learned Trial Court found contradiction in the number of cartons in the complaint as well as in the statement of the appellant. It was found that the cheque amount is more than the amount allegedly due on the date when cheque was presented, therefore, the complaint was dismissed.
Once the agent of the respondent has admitted the settlement of due amount and in absence of any other evidence the Trial Court or the High Court could not dismiss the complaint only on account
of discrepancies in the determination of the amount due or oral evidence in the amount due when the written document crystalizes the amount due for which the cheque was issued.
Both Courts not only erred in law but also committed perversity when the due amount is said to be disputed only on account of discrepancy in the cartons, packing material or the rate
to determine the total liability as if the appellant was proving his debt before the Civil Court.
Therefore, it is presumed that the cheques in question were drawn for consideration and the holder
of the cheques i.e., the appellant received the same in discharge of an existing debt.
The onus, thereafter, shifts on the accusedappellant to establish a probable defence so as to rebut such a presumption, which onus has not been discharged by the respondent.
In fact, the findings recorded by the courts below are total misreading of the statutory provisions more so when the respondent has not led any evidence to rebut the presumption of consideration. Crossexamination on the prosecution witness is not sufficient to rebut the presumption of consideration.
Mere discrepancies in the statement in respect of the cartons, trays or the packing material or the rate charged will not rebut the statutory presumption which is proved by CW3 Prem Chand.
The conclusion drawn by the Trial Court and the High Court to acquit the respondent is not only illegal but being perverse is totally unsustainable in law.
1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 1545 OF 2019
(ARISING OUT OF SLP (CRL) NO. 3452 OF 2019)
UTTAM RAM .....APPELLANT(S)
VERSUS
DEVINDER SINGH HUDAN & ANR .....RESPONDENT(S)
J U D G M E N T
HEMANT GUPTA, J.
1. The appellant is aggrieved against an order passed by the High
Court of Himachal Pradesh, Shimla on 17.12.2018, whereby, the
order of dismissal of complaint under Section 138 of the
Negotiable Instruments Act, 18811
by the learned Trial Court was
not interfered with.
2. None has put appearance on behalf of respondent No. 1, despite
service. Therefore, on 16.09.2019, this Court requested Ms. Liz
Mathew, Advocate to assist the Court on behalf of respondent
No.1.
1 for short the “Act”
2
3. The appellant owns apple orchard in District Kullu, Himachal
Pradesh. The appellant also used to supply apple cartons, trays
and other packing materials to other apple growers on cash and
credit basis. He also owns commercial ropeway which connects
various other apple orchards with the roadhead as a facility to the
growers to carry their produce from the orchards to the market.
4. In the year 2011, respondent No. 1 purchased apple crops of
various growers which was carried out through ropeway to the
roadhead for further transportation. The packing material was
procured by the respondent on credit basis from the appellant
through his authorised agent Prem Chand son of Kumat Ram. In
the month of September 2011, the accounts were finally settled
between the appellant and the authorised agent of respondent No.
1 and a sum of Rs.5,38,856/- was found recoverable. A cheque No.
942816 dated 2.10.2011 was issued for the said amount, but the
said cheque was returned by the bank on 11.10.2011 on
presentation with the endorsement “insufficient funds”.
5. The appellant thereafter served a legal notice on 27.10.2011
under registered cover sent to the official and home addresses of
respondent No. 1. But, in spite of receipt of the notice of
27.10.2011, no payment was made which led to filing of a
complaint by the appellant.
6. The appellant in his complaint stated that total amount of
3
Rs.7,86,300/- was found payable on account of bags, gunny bags
and packing materials and after adjusting the payment of Rs.
2,47,444/-, an amount of Rs. 5,38,856/- was found to be payable
to the appellant. The appellant has asserted that the said cheque
No. 942816 dated 2.10.2011 was issued by the respondent.
7. In support of the complaint, apart from producing CW1 Dhiraj
Kumar who produced the bank record of dishonour of cheque, the
appellant examined himself as CW2 and also produced Prem
Chand son of Kumat Ram, the agent of respondent as CW3. The
respondent did not appear in witness box but examined Head
Constable Ranjit Singh DW1.
8. Learned Trial Court dismissed the complaint for the reason that
cheque amount was more than the amount alleged on the due
date when cheque was presented. Therefore, the cheque cannot
be said to be drawn towards discharge of whole or in part of any
debt.
9. The appellant in his affidavit reiterated his assertions as were
given in the complaint. In the cross-examination conducted by the
respondent, the appellant stated that cheque in Exh.CW1/B was
filled up by the respondent in October 2011 and that cheque was
given by the respondent himself to him. Three persons, he
himself, accused and the agent of the respondent sat together.
He deposed that he was given up a filled-up cheque. He denied
4
the suggestion that the accused did not issue the cheque
Exh.CW1/B. He also denied the suggestion that Prem Chand
misused the cheque of the accused because he has stolen the
signed cheque book of the accused and that he has filled up a
blank cheque.
10. CW3 Prem Chand deposed that the respondent purchased, on
contract, apple in their area from apple growers including from the
appellant for further sending them to Shimla, Chandigarh and
Delhi. He deposed that appellant had to recover an amount of
Rs.7,86,300/- and after adjustment of Rs.2,47,444/- the balance
amount was payable by the respondent for which the settlement
was arrived at in his presence when cheque No. 942816 was
issued for a sum of Rs.5,38,856/- dated 2.10.2011.
11. In the cross-examination, he deposed that he used to keep an
account of all the packing materials. He was suggested that the
accused has kept cheque with him and he used to give to the
growers. However, he categorically deposed that cheque
Exh.CW1/B was given in his presence by the accused in Kuthwa.
The account was settled prior to giving of cheque. He denied the
suggestion that he lodged a report in police about missing cheque
book in the year 2011. He deposed that the respondent has
given cheque book by signing them. He denied the suggestion
that the cheque in question was filled up as he colluded with the
appellant. The respondent in his statement under Section 313 of
5
the Code of Criminal Procedure2
denied the prosecution case. The
relevant question No. 9 and the answer given by the respondent
are as under:
“Q.9 Why the present case has been made out against you
accused?
Ans. This is a false case. My cheque has been misused.”
12. DW1-Ranjit, Head Constable examined by the accused, has
produced an entry dated 09.09.2011 regarding loss of his cheque
book containing cheque Nos. 942801-942820.
13. The learned Trial Court returned a finding that mere production of
entry Exh. DW1/A is not sufficient to prove that he has not issued
the said cheque as such report could have been made with
intention to create false evidence of the loss of cheque book. The
court found that in fact if the cheque has been lost, the accused
had several opportunities to lodge FIR qua the misuse of said
cheque as he has signed acknowledgement of notice Exh.CW1/G.
The learned Trial Court recorded the following findings:
“….Thus, it stands proved beyond reasonable doubt that the
cheque Ext. CW1/B was issued by the accused in favour of
the complainant. Further, the dishonor of the cheque has
also been proved through return memo Ext. CW1/C. Further
the legal demand notice was also issued within a period of
30 days from the date of dishnour. Thereafter, the present
complaint has been filled within the period of limitation.”
14. Still further, the learned Trial Court held the presumption that the
2 for short the “Code”
6
amount of cheque is legally enforceable debt, has not been
rebutted when the following finding was returned:
“….Neither any meaningful cross-examination of the
complainant has been done on this point of his financial
capacity. Accordingly, the aforesaid presumption has not
been rebutted by the accused by proving that the
complainant did not have the requisite financial capacity.
Accordingly, the said defence is rejected.”
15. However, the learned Trial Court found contradiction in the
number of cartons in the complaint as well as in the statement of
the appellant. It was found that the cheque amount is more than
the amount allegedly due on the date when cheque was
presented, therefore, the complaint was dismissed. It held that
there are three different versions as to the number of apple
cartons, therefore, the alleged amount would have been less than
the amount claimed by the complainant.
16. In an appeal, the High Court relied upon judgments reported as
Hiten P. Dalal v. Bratindranath Banerjee
3
, Kumar Exports v.
Sharma Carpets
4
and Rangappa v. Sri Mohan
5
to hold that
the cheque shall be presumed to be for consideration unless and
until, the Court forms a belief that the consideration does not exist
or considers the non-existence of consideration was so probable
that a prudent man would under no circumstances of the case, act
upon the plea that the consideration does not exist. The High
3 (2001) 6 SCC 16
4 (2009) 2 SCC 513
5 (2010) 11 441
7
Court held as under:
“21. Now, adverting to the facts of the case, it would be
noticed that respondent No. had raised various defences,
but, the same were turned down by the learned Magistrate.
However, it was only on the basis of the contradictions that
too in the evidence led by the appellant himself that
respondent No. 1 was ordered to be acquitted.”
17. The High Court again referred to the contradictions regarding
empty apple cartons and the rate per carton, to hold that the
appellant has failed to prove guilt of the respondent beyond
reasonable doubt.
18. We find that the approach of the learned Trial Court and that of the
High Court is perverse; irrational as well as suffers from material
illegality and irregularity, which cannot be sustained in complaint
filed under Section 138 of the Act.
19. A negotiable instrument including a cheque carries presumption of
consideration in terms of Section 118(a) and under Section 139 of
the Act. Sections 118(a) and 139 read as under:
“118. Presumptions as to negotiable instruments.- Until
the contrary is proved, the following presumptions shall be
made:--
(a) of consideration —that every negotiable
instrument was made or drawn for consideration,
and that every such instrument, when it has been
accepted, indorsed, negotiated or transferred,
was accepted, indorsed, negotiated or transferred
for consideration;….
xxx xxx xxx
139. Presumption in favour of holder.—It shall be
presumed, unless the contrary is proved, that the holder of
a cheque received the cheque of the nature referred to in
8
section 138 for the discharge, in whole or in part, of any
debt or other liability.”
20. The Trial Court and the High Court proceeded as if, the appellant is
to prove a debt before civil court wherein, the plaintiff is required
to prove his claim on the basis of evidence to be laid in support of
his claim for the recovery of the amount due. A dishonour of
cheque carries a statutory presumption of consideration. The
holder of cheque in due course is required to prove that the
cheque was issued by the accused and that when the same
presented, it was not honoured. Since there is a statutory
presumption of consideration, the burden is on the accused to
rebut the presumption that the cheque was issued not for any
debt or other liability.
21. There is the mandate of presumption of consideration in terms of
the provisions of the Act. The onus shifts to the accused on proof
of issuance of cheque to rebut the presumption that the cheque
was issued not for discharge of any debt or liability in terms of
Section 138 of the Act which reads as under:
“138. Dishonour of cheque for insufficiency, etc., of
funds in the account. — Where any cheque drawn by a
person on an account maintained by him with a banker for
payment of any amount of money to another person from
out of that account for the discharge, in whole or in part, of
any debt or other liability, is returned by the bank unpaid,
either because of the amount of money standing to the
credit of that account is insufficient to honour the cheque or
that it exceeds the amount arranged to be paid from that
account by an agreement made with that bank, such
person shall be deemed to have committed an offence and
shall….”
9
22. In Kumar Exports, it was held that mere denial of existence of
debt will not serve any purpose but accused may adduce evidence
to rebut the presumption. This Court held as under:
“20. The accused in a trial under Section 138 of the Act has
two options. He can either show that consideration and
debt did not exist or that under the particular
circumstances of the case the non-existence of
consideration and debt is so probable that a prudent man
ought to suppose that no consideration and debt existed. To
rebut the statutory presumptions an accused is not
expected to prove his defence beyond reasonable doubt as
is expected of the complainant in a criminal trial. The
accused may adduce direct evidence to prove that the note
in question was not supported by consideration and that
there was no debt or liability to be discharged by him.
However, the court need not insist in every case that the
accused should disprove the non-existence of consideration
and debt by leading direct evidence because the existence
of negative evidence is neither possible nor contemplated.
At the same time, it is clear that bare denial of the passing
of the consideration and existence of debt, apparently
would not serve the purpose of the accused. Something
which is probable has to be brought on record for getting
the burden of proof shifted to the complainant. To disprove
the presumptions, the accused should bring on record such
facts and circumstances, upon consideration of which, the
court may either believe that the consideration and debt
did not exist or their non-existence was so probable that a
prudent man would under the circumstances of the case,
act upon the plea that they did not exist. Apart from
adducing direct evidence to prove that the note in question
was not supported by consideration or that he had not
incurred any debt or liability, the accused may also rely
upon circumstantial evidence and if the circumstances so
relied upon are compelling, the burden may likewise shift
again on to the complainant. The accused may also rely
upon presumptions of fact, for instance, those mentioned in
Section 114 of the Evidence Act to rebut the presumptions
arising under Sections 118 and 139 of the Act.”
(emphasis supplied)
10
23. In a judgment reported as Kishan Rao v. Shankargouda
6
, this
Court referring to Kumar Exports and Rangappa returned the
following findings:
“22. Another judgment which needs to be looked into
is Rangappa v. Sri Mohan [Rangappa v. Sri Mohan, (2010)
11 SCC 441 : (2010) 4 SCC (Civ) 477 : (2011) 1 SCC (Cri)
184] . A three-Judge Bench of this Court had occasion to
examine the presumption under Section 139 of the 1881
Act. This Court in the aforesaid case has held that in the
event the accused is able to raise a probable defence which
creates doubt with regard to the existence of a debt or
liability, the presumption may fail. Following was laid down
in paras 26 and 27: (SCC pp. 453-54)
“26. In light of these extracts, we are in agreement with
the respondent claimant that the presumption
mandated by Section 139 of the Act does indeed
include the existence of a legally enforceable debt or
liability. To that extent, the impugned observations
in Krishna Janardhan Bhat [Krishna Janardhan
Bhat v. Dattatraya G. Hegde, (2008) 4 SCC 54 : (2008) 2
SCC (Cri) 166] , may not be correct. However, this does
not in any way cast doubt on the correctness of the
decision in that case since it was based on the specific
facts and circumstances therein. As noted in the
citations, this is of course in the nature of a rebuttable
presumption and it is open to the accused to raise a
defence wherein the existence of a legally enforceable
debt or liability can be contested. However, there can
be no doubt that there is an initial presumption which
favours the complainant.
27. Section 139 of the Act is an example of a reverse
onus clause that has been included in furtherance of
the legislative objective of improving the credibility of
negotiable instruments. While Section 138 of the Act
specifies a strong criminal remedy in relation to the
dishonour of cheques, the rebuttable presumption
under Section 139 is a device to prevent undue delay in
the course of litigation. However, it must be
remembered that the offence made punishable by
Section 138 can be better described as a regulatory
offence since the bouncing of a cheque is largely in the
6 (2018) 8 SCC 165
11
nature of a civil wrong whose impact is usually confined
to the private parties involved in commercial
transactions. In such a scenario, the test of
proportionality should guide the construction and
interpretation of reverse onus clauses and the
defendant-accused cannot be expected to discharge an
unduly high standard of proof.”
24. In a judgment reported as Bir Singh v. Mukesh Kumar
7
, this
Court held that presumption under Section 139 of the Act is a
presumption of law. The Court held as under:
“20. 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 as held in Hiten P. Dalal [Hiten P. Dalal v. Bratindranath
Banerjee, (2001) 6 SCC 16 : 2001 SCC (Cri) 960] .
xxx xxx xxx
33. 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.
xxx xxx xxx
7 (2019) 4 SCC 197
12
36. Even a blank cheque leaf, voluntarily signed and
handed over by the accused, which is towards some
payment, would attract presumption under Section 139 of
the Negotiable Instruments Act, in the absence of any
cogent evidence to show that the cheque was not issued in
discharge of a debt.”
25. In other judgment reported as Rohitbhai Jivanlal Patel v. State
of Gujarat and Another
8
this Court held as under:
“18. So far the question of existence of basic ingredients
for drawing of presumption under Sections 118 and 139 the
NI Act is concerned, apparent it is that the accusedappellant could not deny his signature on the cheques in
question that had been drawn in favour of the complainant
on a bank account maintained by the accused for a sum of
Rs. 3 lakhs each. The said cheques were presented to the
Bank concerned within the period of their validity and were
returned unpaid for the reason of either the balance being
insufficient or the account being closed. All the basic
ingredients of Section 138 as also of Sections 118 and 139
are apparent on the face of the record. The Trial Court had
also consciously taken note of these facts and had drawn
the requisite presumption. Therefore, it is required to be
presumed that the cheques in question were drawn for
consideration and the holder of the cheques i.e., the
complainant received the same in discharge of an existing
debt. The onus, therefore, shifts on the accused-appellant
to establish a probable defence so as to rebut such a
presumption.”
xxx xxx xxx
20. On the aspects relating to preponderance of
probabilities, the accused has to bring on record such facts
and such circumstances which may lead the Court to
conclude either that the consideration did not exist or that
its nonexistence was so probable that a prudent man
would, under the circumstances of the case, act upon the
plea that the consideration did not exist. This Court has,
time and again, emphasized that though there may not be
sufficient negative evidence which could be brought on
record by the accused to discharge his burden, yet mere
denial would not fulfil the requirements of rebuttal as
8 AIR 2019 SC 1876
13
envisaged under Section 118 and 139 of the NI Act…..
xxx xxx xxx
32. The result of discussion in the foregoing paragraphs is
that the major considerations on which the Trial Court chose
to proceed clearly show its fundamental error of approach
where, even after drawing the presumption, it had
proceeded as if the complainant was to prove his case
beyond reasonable doubt. Such being the fundamental flaw
on the part of the Trial Court, the High Court cannot be said
to have acted illegally or having exceeded its jurisdiction in
reversing the judgment of acquittal. As noticed
hereinabove, in the present matter, the High Court has
conscientiously and carefully taken into consideration the
views of the Trial Court and after examining the evidence
on record as a whole, found that the findings of the Trial
Court are vitiated by perversity. Hence, interference by the
High Court was inevitable; rather had to be made for just
and proper decision of the matter.”
26. In view of the judgments reported to above, we find that the
respondent has not rebutted the presumption of consideration in
issuing the cheque on 2.10.2011 inter alia for the following
reasons:
1. Statement of the CW3, that he was not an agent of the
respondent, has not been challenged by the respondent in
the cross examination.
2. The statement of the appellant as CW2 that the cheque was
handed over by the respondent personally remains
unchallenged.
3. The respondent has not denied even in his statement that
the cheque was not issued by him. The cross examination of
the witnesses produced by the appellant also does not show
that the signatures on the cheque by him have not been
14
disputed.
4. The respondent relies upon entry recorded with the police on
09.09.2011 that the cheque book was lost. However, the
respondent has not lodged any FIR in respect of loss of
cheque, even after the notice of dishonour of cheque was
received by him on 27.10.2011. The mere entry is not proof
of loss of cheque as is found by the learned Trial Court itself
as it is self-serving report to create evidence to avoid
payment of cheque amount.
5. The respondent has not appeared as witness to prove the
fact that the cheque book was lost or that cheque was not
issued in discharge of any debt or liability.
6. The statement of accused under Section 313 of the Code is
only to the effect that the cheque has been misused. There
is no stand in the statement that the cheque book was
stolen.
7. The statement of accused under Section 313 is not a
substantive evidence of defence of the accused but only an
opportunity to the accused to explain the incriminating
circumstances appearing in the prosecution case of accused.
Therefore, there is no evidence to rebut the presumption
that the cheque was issued for consideration.
27. Once the agent of the respondent has admitted the settlement of
due amount and in absence of any other evidence the Trial Court
15
or the High Court could not dismiss the complaint only on account
of discrepancies in the determination of the amount due or oral
evidence in the amount due when the written document
crystalizes the amount due for which the cheque was issued.
28. The accused has failed to lead any evidence to rebut the statutory
presumption, a finding returned by both the Trial Court and the
High Court. Both Courts not only erred in law but also committed
perversity when the due amount is said to be disputed only on
account of discrepancy in the cartons, packing material or the rate
to determine the total liability as if the appellant was proving his
debt before the Civil Court. Therefore, it is presumed that the
cheques in question were drawn for consideration and the holder
of the cheques i.e., the appellant received the same in discharge
of an existing debt. The onus, thereafter, shifts on the accusedappellant to establish a probable defence so as to rebut such a
presumption, which onus has not been discharged by the
respondent.
29. Learned counsel for the respondent has referred to the judgment
reported in M. S. Narayana Menon v. State of Kerala
9
that
evidence adduced by the complainant can be relied upon to rebut
the presumption of consideration. However, said judgment has no
applicability to the facts of the present case as the Trial Court has
found that the presumption is not rebutted but still the Trial Court
9 (2006) 6 SCC 39
16
dismissed the complaint for the reason that the appellant has
failed to prove the amount mentioned in the cheque as due
amount. Once the cheque is proved to be issued it carries
statutory presumption of consideration. Then the onus is on the
respondent to disprove the presumption at which the respondent
has miserably failed.
30. In Kumar Exports evidence to rebut the presumption was led and
accepted by the Court. In these circumstances, it was held that
the burden shifts back to the complainant and the presumption
under the Act will not again come to his rescue. However, in the
present case, the presumption of consideration has not been
rebutted by the respondent even on the basis of the evidence laid
by the appellant. The difference in the number of cartons supplied
or the rate charged is not relevant when the accounts were settled
in writing to rebut the presumption of consideration of issuance of
a cheque.
31. In Vijay v. Laxman and another
10
this Court found grave
discrepancies in the case of the complainant and that no case is
made out for when the High Court had set aside the conviction on
the basis of clear evidence giving rise to the perverse findings.
32. Learned counsel appearing for the respondent also referred to M.
S. Narayana Menon and K. Prakashan v. P. K. Surenderan
11
that if two views are possible, the appellate court shall not reverse
10 (2013) 3 SCC 86
11 (2008) 1 SCC 258
17
a judgment of acquittal only because another view is possible to
be taken. Learned counsel also relies upon a judgment reported as
John K. Abraham v. Simon C. Abraham12
that mere fact that
the statutory notice was not replied cannot prejudice to the case
of the respondent. We do not find any merit in the arguments
raised by the learned counsel for the respondent. In fact, the
findings recorded by the courts below are total misreading of the
statutory provisions more so when the respondent has not led any
evidence to rebut the presumption of consideration. Crossexamination on the prosecution witness is not sufficient to rebut
the presumption of consideration. Mere discrepancies in the
statement in respect of the cartons, trays or the packing material
or the rate charged will not rebut the statutory presumption which
is proved by CW3 Prem Chand.
33. The conclusion drawn by the Trial Court and the High Court to
acquit the respondent is not only illegal but being perverse is
totally unsustainable in law. Before concluding, we would like to
put on record that Ms. Mathew has ably assisted this Court in
canvassing that the order passed by the High Court does not
warrant any interference in the present appeal against acquittal.
34. Consequently, the present appeal is allowed, order passed by the
High Court is set aside. The respondent is held guilty of dishonour
12 (2014) 2 SCC 236
18
of cheque for an offence under Section 138 of the Act. The
respondent shall pay Rs.10,77,712/- as fine i.e. twice of the
amount of cheque of Rs.5,38,856/- and a cost of litigation of
Rs.1,00,000/- within three months. If the amount of fine and the
costs are not paid within three months, the respondent shall
undergo imprisonment for a period of six months.
.............................................J.
(L. NAGESWARA RAO)
.............................................J.
(HEMANT GUPTA)
NEW DELHI;
OCTOBER 17, 2019.
Trial couert findings
The learned Trial Court returned a finding that mere production of entry Exh. DW1/A is not sufficient to prove that he has not issued the said cheque as such report could have been made with
intention to create false evidence of the loss of cheque book. The court found that in fact if the cheque has been lost, the accused had several opportunities to lodge FIR qua the misuse of said
cheque as he has signed acknowledgement of notice Exh.CW1/G.
The learned Trial Court recorded the following findings:
“….Thus, it stands proved beyond reasonable doubt that the
cheque Ext. CW1/B was issued by the accused in favour of
the complainant. Further, the dishonor of the cheque has
also been proved through return memo Ext. CW1/C. Further
the legal demand notice was also issued within a period of
30 days from the date of dishnour. Thereafter, the present
complaint has been filled within the period of limitation.”
Still further, the learned Trial Court held the presumption that the amount of cheque is legally enforceable debt, has not been rebutted when the following finding was returned:“….Neither any meaningful cross-examination of the complainant has been done on this point of his financial
capacity. Accordingly, the aforesaid presumption has not been rebutted by the accused by proving that the complainant did not have the requisite financial capacity. Accordingly, the said defence is rejected.”
However, the learned Trial Court found contradiction in the number of cartons in the complaint as well as in the statement of the appellant. It was found that the cheque amount is more than the amount allegedly due on the date when cheque was presented, therefore, the complaint was dismissed.
Once the agent of the respondent has admitted the settlement of due amount and in absence of any other evidence the Trial Court or the High Court could not dismiss the complaint only on account
of discrepancies in the determination of the amount due or oral evidence in the amount due when the written document crystalizes the amount due for which the cheque was issued.
Both Courts not only erred in law but also committed perversity when the due amount is said to be disputed only on account of discrepancy in the cartons, packing material or the rate
to determine the total liability as if the appellant was proving his debt before the Civil Court.
Therefore, it is presumed that the cheques in question were drawn for consideration and the holder
of the cheques i.e., the appellant received the same in discharge of an existing debt.
The onus, thereafter, shifts on the accusedappellant to establish a probable defence so as to rebut such a presumption, which onus has not been discharged by the respondent.
In fact, the findings recorded by the courts below are total misreading of the statutory provisions more so when the respondent has not led any evidence to rebut the presumption of consideration. Crossexamination on the prosecution witness is not sufficient to rebut the presumption of consideration.
Mere discrepancies in the statement in respect of the cartons, trays or the packing material or the rate charged will not rebut the statutory presumption which is proved by CW3 Prem Chand.
The conclusion drawn by the Trial Court and the High Court to acquit the respondent is not only illegal but being perverse is totally unsustainable in law.
1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 1545 OF 2019
(ARISING OUT OF SLP (CRL) NO. 3452 OF 2019)
UTTAM RAM .....APPELLANT(S)
VERSUS
DEVINDER SINGH HUDAN & ANR .....RESPONDENT(S)
J U D G M E N T
HEMANT GUPTA, J.
1. The appellant is aggrieved against an order passed by the High
Court of Himachal Pradesh, Shimla on 17.12.2018, whereby, the
order of dismissal of complaint under Section 138 of the
Negotiable Instruments Act, 18811
by the learned Trial Court was
not interfered with.
2. None has put appearance on behalf of respondent No. 1, despite
service. Therefore, on 16.09.2019, this Court requested Ms. Liz
Mathew, Advocate to assist the Court on behalf of respondent
No.1.
1 for short the “Act”
2
3. The appellant owns apple orchard in District Kullu, Himachal
Pradesh. The appellant also used to supply apple cartons, trays
and other packing materials to other apple growers on cash and
credit basis. He also owns commercial ropeway which connects
various other apple orchards with the roadhead as a facility to the
growers to carry their produce from the orchards to the market.
4. In the year 2011, respondent No. 1 purchased apple crops of
various growers which was carried out through ropeway to the
roadhead for further transportation. The packing material was
procured by the respondent on credit basis from the appellant
through his authorised agent Prem Chand son of Kumat Ram. In
the month of September 2011, the accounts were finally settled
between the appellant and the authorised agent of respondent No.
1 and a sum of Rs.5,38,856/- was found recoverable. A cheque No.
942816 dated 2.10.2011 was issued for the said amount, but the
said cheque was returned by the bank on 11.10.2011 on
presentation with the endorsement “insufficient funds”.
5. The appellant thereafter served a legal notice on 27.10.2011
under registered cover sent to the official and home addresses of
respondent No. 1. But, in spite of receipt of the notice of
27.10.2011, no payment was made which led to filing of a
complaint by the appellant.
6. The appellant in his complaint stated that total amount of
3
Rs.7,86,300/- was found payable on account of bags, gunny bags
and packing materials and after adjusting the payment of Rs.
2,47,444/-, an amount of Rs. 5,38,856/- was found to be payable
to the appellant. The appellant has asserted that the said cheque
No. 942816 dated 2.10.2011 was issued by the respondent.
7. In support of the complaint, apart from producing CW1 Dhiraj
Kumar who produced the bank record of dishonour of cheque, the
appellant examined himself as CW2 and also produced Prem
Chand son of Kumat Ram, the agent of respondent as CW3. The
respondent did not appear in witness box but examined Head
Constable Ranjit Singh DW1.
8. Learned Trial Court dismissed the complaint for the reason that
cheque amount was more than the amount alleged on the due
date when cheque was presented. Therefore, the cheque cannot
be said to be drawn towards discharge of whole or in part of any
debt.
9. The appellant in his affidavit reiterated his assertions as were
given in the complaint. In the cross-examination conducted by the
respondent, the appellant stated that cheque in Exh.CW1/B was
filled up by the respondent in October 2011 and that cheque was
given by the respondent himself to him. Three persons, he
himself, accused and the agent of the respondent sat together.
He deposed that he was given up a filled-up cheque. He denied
4
the suggestion that the accused did not issue the cheque
Exh.CW1/B. He also denied the suggestion that Prem Chand
misused the cheque of the accused because he has stolen the
signed cheque book of the accused and that he has filled up a
blank cheque.
10. CW3 Prem Chand deposed that the respondent purchased, on
contract, apple in their area from apple growers including from the
appellant for further sending them to Shimla, Chandigarh and
Delhi. He deposed that appellant had to recover an amount of
Rs.7,86,300/- and after adjustment of Rs.2,47,444/- the balance
amount was payable by the respondent for which the settlement
was arrived at in his presence when cheque No. 942816 was
issued for a sum of Rs.5,38,856/- dated 2.10.2011.
11. In the cross-examination, he deposed that he used to keep an
account of all the packing materials. He was suggested that the
accused has kept cheque with him and he used to give to the
growers. However, he categorically deposed that cheque
Exh.CW1/B was given in his presence by the accused in Kuthwa.
The account was settled prior to giving of cheque. He denied the
suggestion that he lodged a report in police about missing cheque
book in the year 2011. He deposed that the respondent has
given cheque book by signing them. He denied the suggestion
that the cheque in question was filled up as he colluded with the
appellant. The respondent in his statement under Section 313 of
5
the Code of Criminal Procedure2
denied the prosecution case. The
relevant question No. 9 and the answer given by the respondent
are as under:
“Q.9 Why the present case has been made out against you
accused?
Ans. This is a false case. My cheque has been misused.”
12. DW1-Ranjit, Head Constable examined by the accused, has
produced an entry dated 09.09.2011 regarding loss of his cheque
book containing cheque Nos. 942801-942820.
13. The learned Trial Court returned a finding that mere production of
entry Exh. DW1/A is not sufficient to prove that he has not issued
the said cheque as such report could have been made with
intention to create false evidence of the loss of cheque book. The
court found that in fact if the cheque has been lost, the accused
had several opportunities to lodge FIR qua the misuse of said
cheque as he has signed acknowledgement of notice Exh.CW1/G.
The learned Trial Court recorded the following findings:
“….Thus, it stands proved beyond reasonable doubt that the
cheque Ext. CW1/B was issued by the accused in favour of
the complainant. Further, the dishonor of the cheque has
also been proved through return memo Ext. CW1/C. Further
the legal demand notice was also issued within a period of
30 days from the date of dishnour. Thereafter, the present
complaint has been filled within the period of limitation.”
14. Still further, the learned Trial Court held the presumption that the
2 for short the “Code”
6
amount of cheque is legally enforceable debt, has not been
rebutted when the following finding was returned:
“….Neither any meaningful cross-examination of the
complainant has been done on this point of his financial
capacity. Accordingly, the aforesaid presumption has not
been rebutted by the accused by proving that the
complainant did not have the requisite financial capacity.
Accordingly, the said defence is rejected.”
15. However, the learned Trial Court found contradiction in the
number of cartons in the complaint as well as in the statement of
the appellant. It was found that the cheque amount is more than
the amount allegedly due on the date when cheque was
presented, therefore, the complaint was dismissed. It held that
there are three different versions as to the number of apple
cartons, therefore, the alleged amount would have been less than
the amount claimed by the complainant.
16. In an appeal, the High Court relied upon judgments reported as
Hiten P. Dalal v. Bratindranath Banerjee
3
, Kumar Exports v.
Sharma Carpets
4
and Rangappa v. Sri Mohan
5
to hold that
the cheque shall be presumed to be for consideration unless and
until, the Court forms a belief that the consideration does not exist
or considers the non-existence of consideration was so probable
that a prudent man would under no circumstances of the case, act
upon the plea that the consideration does not exist. The High
3 (2001) 6 SCC 16
4 (2009) 2 SCC 513
5 (2010) 11 441
7
Court held as under:
“21. Now, adverting to the facts of the case, it would be
noticed that respondent No. had raised various defences,
but, the same were turned down by the learned Magistrate.
However, it was only on the basis of the contradictions that
too in the evidence led by the appellant himself that
respondent No. 1 was ordered to be acquitted.”
17. The High Court again referred to the contradictions regarding
empty apple cartons and the rate per carton, to hold that the
appellant has failed to prove guilt of the respondent beyond
reasonable doubt.
18. We find that the approach of the learned Trial Court and that of the
High Court is perverse; irrational as well as suffers from material
illegality and irregularity, which cannot be sustained in complaint
filed under Section 138 of the Act.
19. A negotiable instrument including a cheque carries presumption of
consideration in terms of Section 118(a) and under Section 139 of
the Act. Sections 118(a) and 139 read as under:
“118. Presumptions as to negotiable instruments.- Until
the contrary is proved, the following presumptions shall be
made:--
(a) of consideration —that every negotiable
instrument was made or drawn for consideration,
and that every such instrument, when it has been
accepted, indorsed, negotiated or transferred,
was accepted, indorsed, negotiated or transferred
for consideration;….
xxx xxx xxx
139. Presumption in favour of holder.—It shall be
presumed, unless the contrary is proved, that the holder of
a cheque received the cheque of the nature referred to in
8
section 138 for the discharge, in whole or in part, of any
debt or other liability.”
20. The Trial Court and the High Court proceeded as if, the appellant is
to prove a debt before civil court wherein, the plaintiff is required
to prove his claim on the basis of evidence to be laid in support of
his claim for the recovery of the amount due. A dishonour of
cheque carries a statutory presumption of consideration. The
holder of cheque in due course is required to prove that the
cheque was issued by the accused and that when the same
presented, it was not honoured. Since there is a statutory
presumption of consideration, the burden is on the accused to
rebut the presumption that the cheque was issued not for any
debt or other liability.
21. There is the mandate of presumption of consideration in terms of
the provisions of the Act. The onus shifts to the accused on proof
of issuance of cheque to rebut the presumption that the cheque
was issued not for discharge of any debt or liability in terms of
Section 138 of the Act which reads as under:
“138. Dishonour of cheque for insufficiency, etc., of
funds in the account. — Where any cheque drawn by a
person on an account maintained by him with a banker for
payment of any amount of money to another person from
out of that account for the discharge, in whole or in part, of
any debt or other liability, is returned by the bank unpaid,
either because of the amount of money standing to the
credit of that account is insufficient to honour the cheque or
that it exceeds the amount arranged to be paid from that
account by an agreement made with that bank, such
person shall be deemed to have committed an offence and
shall….”
9
22. In Kumar Exports, it was held that mere denial of existence of
debt will not serve any purpose but accused may adduce evidence
to rebut the presumption. This Court held as under:
“20. The accused in a trial under Section 138 of the Act has
two options. He can either show that consideration and
debt did not exist or that under the particular
circumstances of the case the non-existence of
consideration and debt is so probable that a prudent man
ought to suppose that no consideration and debt existed. To
rebut the statutory presumptions an accused is not
expected to prove his defence beyond reasonable doubt as
is expected of the complainant in a criminal trial. The
accused may adduce direct evidence to prove that the note
in question was not supported by consideration and that
there was no debt or liability to be discharged by him.
However, the court need not insist in every case that the
accused should disprove the non-existence of consideration
and debt by leading direct evidence because the existence
of negative evidence is neither possible nor contemplated.
At the same time, it is clear that bare denial of the passing
of the consideration and existence of debt, apparently
would not serve the purpose of the accused. Something
which is probable has to be brought on record for getting
the burden of proof shifted to the complainant. To disprove
the presumptions, the accused should bring on record such
facts and circumstances, upon consideration of which, the
court may either believe that the consideration and debt
did not exist or their non-existence was so probable that a
prudent man would under the circumstances of the case,
act upon the plea that they did not exist. Apart from
adducing direct evidence to prove that the note in question
was not supported by consideration or that he had not
incurred any debt or liability, the accused may also rely
upon circumstantial evidence and if the circumstances so
relied upon are compelling, the burden may likewise shift
again on to the complainant. The accused may also rely
upon presumptions of fact, for instance, those mentioned in
Section 114 of the Evidence Act to rebut the presumptions
arising under Sections 118 and 139 of the Act.”
(emphasis supplied)
10
23. In a judgment reported as Kishan Rao v. Shankargouda
6
, this
Court referring to Kumar Exports and Rangappa returned the
following findings:
“22. Another judgment which needs to be looked into
is Rangappa v. Sri Mohan [Rangappa v. Sri Mohan, (2010)
11 SCC 441 : (2010) 4 SCC (Civ) 477 : (2011) 1 SCC (Cri)
184] . A three-Judge Bench of this Court had occasion to
examine the presumption under Section 139 of the 1881
Act. This Court in the aforesaid case has held that in the
event the accused is able to raise a probable defence which
creates doubt with regard to the existence of a debt or
liability, the presumption may fail. Following was laid down
in paras 26 and 27: (SCC pp. 453-54)
“26. In light of these extracts, we are in agreement with
the respondent claimant that the presumption
mandated by Section 139 of the Act does indeed
include the existence of a legally enforceable debt or
liability. To that extent, the impugned observations
in Krishna Janardhan Bhat [Krishna Janardhan
Bhat v. Dattatraya G. Hegde, (2008) 4 SCC 54 : (2008) 2
SCC (Cri) 166] , may not be correct. However, this does
not in any way cast doubt on the correctness of the
decision in that case since it was based on the specific
facts and circumstances therein. As noted in the
citations, this is of course in the nature of a rebuttable
presumption and it is open to the accused to raise a
defence wherein the existence of a legally enforceable
debt or liability can be contested. However, there can
be no doubt that there is an initial presumption which
favours the complainant.
27. Section 139 of the Act is an example of a reverse
onus clause that has been included in furtherance of
the legislative objective of improving the credibility of
negotiable instruments. While Section 138 of the Act
specifies a strong criminal remedy in relation to the
dishonour of cheques, the rebuttable presumption
under Section 139 is a device to prevent undue delay in
the course of litigation. However, it must be
remembered that the offence made punishable by
Section 138 can be better described as a regulatory
offence since the bouncing of a cheque is largely in the
6 (2018) 8 SCC 165
11
nature of a civil wrong whose impact is usually confined
to the private parties involved in commercial
transactions. In such a scenario, the test of
proportionality should guide the construction and
interpretation of reverse onus clauses and the
defendant-accused cannot be expected to discharge an
unduly high standard of proof.”
24. In a judgment reported as Bir Singh v. Mukesh Kumar
7
, this
Court held that presumption under Section 139 of the Act is a
presumption of law. The Court held as under:
“20. 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 as held in Hiten P. Dalal [Hiten P. Dalal v. Bratindranath
Banerjee, (2001) 6 SCC 16 : 2001 SCC (Cri) 960] .
xxx xxx xxx
33. 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.
xxx xxx xxx
7 (2019) 4 SCC 197
12
36. Even a blank cheque leaf, voluntarily signed and
handed over by the accused, which is towards some
payment, would attract presumption under Section 139 of
the Negotiable Instruments Act, in the absence of any
cogent evidence to show that the cheque was not issued in
discharge of a debt.”
25. In other judgment reported as Rohitbhai Jivanlal Patel v. State
of Gujarat and Another
8
this Court held as under:
“18. So far the question of existence of basic ingredients
for drawing of presumption under Sections 118 and 139 the
NI Act is concerned, apparent it is that the accusedappellant could not deny his signature on the cheques in
question that had been drawn in favour of the complainant
on a bank account maintained by the accused for a sum of
Rs. 3 lakhs each. The said cheques were presented to the
Bank concerned within the period of their validity and were
returned unpaid for the reason of either the balance being
insufficient or the account being closed. All the basic
ingredients of Section 138 as also of Sections 118 and 139
are apparent on the face of the record. The Trial Court had
also consciously taken note of these facts and had drawn
the requisite presumption. Therefore, it is required to be
presumed that the cheques in question were drawn for
consideration and the holder of the cheques i.e., the
complainant received the same in discharge of an existing
debt. The onus, therefore, shifts on the accused-appellant
to establish a probable defence so as to rebut such a
presumption.”
xxx xxx xxx
20. On the aspects relating to preponderance of
probabilities, the accused has to bring on record such facts
and such circumstances which may lead the Court to
conclude either that the consideration did not exist or that
its nonexistence was so probable that a prudent man
would, under the circumstances of the case, act upon the
plea that the consideration did not exist. This Court has,
time and again, emphasized that though there may not be
sufficient negative evidence which could be brought on
record by the accused to discharge his burden, yet mere
denial would not fulfil the requirements of rebuttal as
8 AIR 2019 SC 1876
13
envisaged under Section 118 and 139 of the NI Act…..
xxx xxx xxx
32. The result of discussion in the foregoing paragraphs is
that the major considerations on which the Trial Court chose
to proceed clearly show its fundamental error of approach
where, even after drawing the presumption, it had
proceeded as if the complainant was to prove his case
beyond reasonable doubt. Such being the fundamental flaw
on the part of the Trial Court, the High Court cannot be said
to have acted illegally or having exceeded its jurisdiction in
reversing the judgment of acquittal. As noticed
hereinabove, in the present matter, the High Court has
conscientiously and carefully taken into consideration the
views of the Trial Court and after examining the evidence
on record as a whole, found that the findings of the Trial
Court are vitiated by perversity. Hence, interference by the
High Court was inevitable; rather had to be made for just
and proper decision of the matter.”
26. In view of the judgments reported to above, we find that the
respondent has not rebutted the presumption of consideration in
issuing the cheque on 2.10.2011 inter alia for the following
reasons:
1. Statement of the CW3, that he was not an agent of the
respondent, has not been challenged by the respondent in
the cross examination.
2. The statement of the appellant as CW2 that the cheque was
handed over by the respondent personally remains
unchallenged.
3. The respondent has not denied even in his statement that
the cheque was not issued by him. The cross examination of
the witnesses produced by the appellant also does not show
that the signatures on the cheque by him have not been
14
disputed.
4. The respondent relies upon entry recorded with the police on
09.09.2011 that the cheque book was lost. However, the
respondent has not lodged any FIR in respect of loss of
cheque, even after the notice of dishonour of cheque was
received by him on 27.10.2011. The mere entry is not proof
of loss of cheque as is found by the learned Trial Court itself
as it is self-serving report to create evidence to avoid
payment of cheque amount.
5. The respondent has not appeared as witness to prove the
fact that the cheque book was lost or that cheque was not
issued in discharge of any debt or liability.
6. The statement of accused under Section 313 of the Code is
only to the effect that the cheque has been misused. There
is no stand in the statement that the cheque book was
stolen.
7. The statement of accused under Section 313 is not a
substantive evidence of defence of the accused but only an
opportunity to the accused to explain the incriminating
circumstances appearing in the prosecution case of accused.
Therefore, there is no evidence to rebut the presumption
that the cheque was issued for consideration.
27. Once the agent of the respondent has admitted the settlement of
due amount and in absence of any other evidence the Trial Court
15
or the High Court could not dismiss the complaint only on account
of discrepancies in the determination of the amount due or oral
evidence in the amount due when the written document
crystalizes the amount due for which the cheque was issued.
28. The accused has failed to lead any evidence to rebut the statutory
presumption, a finding returned by both the Trial Court and the
High Court. Both Courts not only erred in law but also committed
perversity when the due amount is said to be disputed only on
account of discrepancy in the cartons, packing material or the rate
to determine the total liability as if the appellant was proving his
debt before the Civil Court. Therefore, it is presumed that the
cheques in question were drawn for consideration and the holder
of the cheques i.e., the appellant received the same in discharge
of an existing debt. The onus, thereafter, shifts on the accusedappellant to establish a probable defence so as to rebut such a
presumption, which onus has not been discharged by the
respondent.
29. Learned counsel for the respondent has referred to the judgment
reported in M. S. Narayana Menon v. State of Kerala
9
that
evidence adduced by the complainant can be relied upon to rebut
the presumption of consideration. However, said judgment has no
applicability to the facts of the present case as the Trial Court has
found that the presumption is not rebutted but still the Trial Court
9 (2006) 6 SCC 39
16
dismissed the complaint for the reason that the appellant has
failed to prove the amount mentioned in the cheque as due
amount. Once the cheque is proved to be issued it carries
statutory presumption of consideration. Then the onus is on the
respondent to disprove the presumption at which the respondent
has miserably failed.
30. In Kumar Exports evidence to rebut the presumption was led and
accepted by the Court. In these circumstances, it was held that
the burden shifts back to the complainant and the presumption
under the Act will not again come to his rescue. However, in the
present case, the presumption of consideration has not been
rebutted by the respondent even on the basis of the evidence laid
by the appellant. The difference in the number of cartons supplied
or the rate charged is not relevant when the accounts were settled
in writing to rebut the presumption of consideration of issuance of
a cheque.
31. In Vijay v. Laxman and another
10
this Court found grave
discrepancies in the case of the complainant and that no case is
made out for when the High Court had set aside the conviction on
the basis of clear evidence giving rise to the perverse findings.
32. Learned counsel appearing for the respondent also referred to M.
S. Narayana Menon and K. Prakashan v. P. K. Surenderan
11
that if two views are possible, the appellate court shall not reverse
10 (2013) 3 SCC 86
11 (2008) 1 SCC 258
17
a judgment of acquittal only because another view is possible to
be taken. Learned counsel also relies upon a judgment reported as
John K. Abraham v. Simon C. Abraham12
that mere fact that
the statutory notice was not replied cannot prejudice to the case
of the respondent. We do not find any merit in the arguments
raised by the learned counsel for the respondent. In fact, the
findings recorded by the courts below are total misreading of the
statutory provisions more so when the respondent has not led any
evidence to rebut the presumption of consideration. Crossexamination on the prosecution witness is not sufficient to rebut
the presumption of consideration. Mere discrepancies in the
statement in respect of the cartons, trays or the packing material
or the rate charged will not rebut the statutory presumption which
is proved by CW3 Prem Chand.
33. The conclusion drawn by the Trial Court and the High Court to
acquit the respondent is not only illegal but being perverse is
totally unsustainable in law. Before concluding, we would like to
put on record that Ms. Mathew has ably assisted this Court in
canvassing that the order passed by the High Court does not
warrant any interference in the present appeal against acquittal.
34. Consequently, the present appeal is allowed, order passed by the
High Court is set aside. The respondent is held guilty of dishonour
12 (2014) 2 SCC 236
18
of cheque for an offence under Section 138 of the Act. The
respondent shall pay Rs.10,77,712/- as fine i.e. twice of the
amount of cheque of Rs.5,38,856/- and a cost of litigation of
Rs.1,00,000/- within three months. If the amount of fine and the
costs are not paid within three months, the respondent shall
undergo imprisonment for a period of six months.
.............................................J.
(L. NAGESWARA RAO)
.............................................J.
(HEMANT GUPTA)
NEW DELHI;
OCTOBER 17, 2019.
