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REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO.803 OF 2018
(ARISING OUT OF SLP(CRL.)NO.10030 OF 2016)
KISHAN RAO ... APPELLANT
VERSUS
SHANKARGOUDA ... RESPONDENT
J U D G M E N T
This appeal has been filed against the judgment
and order of the High Court dated 18.03.2016 by which
judgment, Criminal Revision Petition filed by the
respondent-accused was allowed by setting aside the
order of conviction and sentence recorded against the
accused under Section 138 of the Negotiable
Instruments Act, 1881 (hereinafter referred to as
“Act 1881”). The parties shall be hereinafter
referred to as described in the Magistrate’s Court.
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2. Brief facts of case are:
The appellant(complainant) and the respondent
(accused) were known to each other and had good
relations. Accused approached the complainant for a
loan of Rs.2,00,000/- for the purpose of his business
expenses and promised to repay the same within one
month. On 25.12.2005, complainant had paid sum of
Rs.2,00,000/- as a loan. For repayment of the loan
accused issued post dated cheque dated 25.01.2006 in
the name of complainant for the amount of
Rs.2,00,000/-. The cheque was presented for
collection at Bank of Maharashtra Branch at Gulbarga
which could not be encashed due to insufficient
funds. At the request of the accused the cheque was
again represented on 01.03.2006 for collection which
was returned on 02.03.2006 by the Bank with the
endorsement “insufficient funds”.
3. A notice was issued by the complainant demanding
payment of Rs.2,00,000/- which was received by the
accused on 14.03.2006 to which reply was sent on
31.03.2006. A complaint was filed by the appellant
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alleging the offence under Section 138 of the Act,
1881. Cognizance was taken by the Magistrate. Accused
stated not guilty of the offence, hence, trial
proceeded. In order to prove the guilt, the
complainant himself examined as PW.1 and examined two
other witnesses PW.2 and Pw.3. He filed documentary
evidence Exhs.P1 and P6, statement of the accused was
recorded under Section 313 Cr.P.C. Thereafter, the
case proceeded for defence evidence. Accused neither
examined himself nor produced any evidence either
oral or documentary. In the reply to the notice which
was sent by the complainant, it was alleged that the
said cheque was stolen by the complainant. The
complainant was cross-examined by the defence. In the
cross-examination defence denied accused’s signatures
on the cheque. The trial court rejected the defence
of the accused that cheque was stolen by the
complainant. The trial court drew presumption under
Section 139 of the Act, 1881 against the accused.
Accused failed to rebut the presumption by leading
any evidence on his behalf. The offence having been
found proved, the trial court convicted the accused
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under Section 138 of the Act, 1881 and sentenced him
to pay a fine of Rs.2,50,000/- and simple
imprisonment for six months.
4. The appeal was filed by the accused against the
said judgment. The Appellate Court considered the
submissions of the parties and dismissed the appeal
by affirming the order of conviction.
5. Criminal Revision was filed by the accused in the
High Court. The High Court by the impugned judgment
has allowed the revision by setting aside the
conviction order. The High Court held that the
accused has been successful in creating doubt in the
mind of the Court with regard to the existence of the
debt or liability. Complainant aggrieved by the
judgment of the High Court has come in this appeal.
6. Learned counsel for the appellant submits that
the offence having been proved before the trial court
by leading evidence, the conviction was recorded by
the trial court after appreciating both oral and
documentary evidence led by the appellant which order
was also affirmed by the Appellate Court. There was
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no jurisdiction in the High court to re-appreciate
the evidence on record and come to the conclusion
that accused has been able to raise a doubt regarding
existence of the debt or liability of the accused.
He submits that the High court in exercise of
jurisdiction under Section 379/401 Cr.P.C. can
interfere with the order of the conviction only when
the findings recorded by the courts below are
perverse and there was no evidence to prove the
offence against the accused. It is submitted that in
exercise of the revisional jurisdiction the High
Court cannot substitute its own opinion after
re-appreciation of evidence.
7. It is submitted that the presumption under
Section 139 was rightly drawn against the accused and
accused failed to rebut the said presumption by
leading evidence. There was no ground for setting
aside the conviction order.
8. Although, the respondent was served but no one
appeared at the time of hearing.
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9. We have considered the submissions of the
appellant and perused the records.
10. The trial court after considering the evidence
on record has returned the finding that the cheque
was issued by the accused which contained his
signatures. Although, the complainant led oral as
well as documentary evidence to prove his case, no
evidence was led by the accused to rebut the
presumption regarding existence of debt or liability
of the accused.
11. This Court has time and again examined the scope
of Section 397/401 Cr.P.C. and the ground for
exercising the revisional jurisdiction by the High
Court. In State of Kerala vs. Puttumana Illath
Jathavedan Namboodiri, 1999 (2) SCC 452, while
considering the scope of the revisional jurisdiction
of the High Court this Court has laid down the
following:
“5......In its revisional jurisdiction,
the High Court can call for and examine the
record of any proceedings for the purpose
of satisfying itself as to the correctness,
legality or propriety of any finding,
sentence or order. In other words, the
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jurisdiction is one of supervisory
jurisdiction exercised by the High Court
for correcting miscarriage of justice. But
the said revisional power cannot be equated
with the power of an appellate court nor
can it be treated even as a second
appellate jurisdiction. Ordinarily,
therefore, it would not be appropriate for
the High Court to reappreciate the evidence
and come to its own conclusion on the same
when the evidence has already been
appreciated by the Magistrate as well as
the Sessions Judge in appeal, unless any
glaring feature is brought to the notice of
the High Court which would otherwise
tantamount to gross miscarriage of justice.
On scrutinizing the impugned judgment of
the High Court from the aforesaid
standpoint, we have no hesitation to come
to the conclusion that the High Court
exceeded its jurisdiction in interfering
with the conviction of the respondent by
reappreciating the oral evidence.....”
12. Another judgment which has also been referred to
and relied by the High Court is the judgment of this
Court in Sanjaysinh Ramrao Chavan vs. Dattatray
Gulabrao Phalke and others, 2015 (3) SCC 123. This
Court held that the High Court in exercise of
revisional jurisdiction shall not interfere with the
order of the Magistrate unless it is perverse or
wholly unreasonable or there is non-consideration of
any relevant material, the order cannot be set aside
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merely on the ground that another view is possible.
Following has been laid down in paragraph 14:
”14.....Unless the order passed by the
Magistrate is perverse or the view taken by
the court is wholly unreasonable or there
is non-consideration of any relevant
material or there is palpable misreading of
records, the Revisional Court is not
justified in setting aside the order,
merely because another view is possible.
The Revisional Court is not meant to act as
an appellate court. The whole purpose of
the revisional jurisdiction is to preserve
the power in the court to do justice in
accordance with the principles of criminal
jurisprudence. The revisional power of the
court under Sections 397 to 401 CrPC is not
to be equated with that of an appeal.
Unless the finding of the court, whose
decision is sought to be revised, is shown
to be perverse or untenable in law or is
grossly erroneous or glaringly unreasonable
or where the decision is based on no
material or where the material facts are
wholly ignored or where the judicial
discretion is exercised arbitrarily or
capriciously, the courts may not interfere
with decision in exercise of their
revisional jurisdiction.”
13. In the above case also conviction of the accused
was recorded, the High Court set aside the order of
conviction by substituting its own view. This Court
set aside the High Court’s order holding that the High
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Court exceeded its jurisdiction in substituting its
views and that too without any legal basis.
14. Now, we proceed to examine order of the High
Court in the light of the law as laid down in the
above mentioned cases. The High Court itself in
paragraph 40 has given its reasons for setting aside
the order of conviction, it has observed that though
perception of a person differs from one another with
regard to the acceptance of evidence on record but in
its perception and consideration, the accused has been
successful in creating doubt in the mind of the Court
with regard to the existence of the debt or liability.
It is relevant to notice what has been said in
paragraph 40 of the judgment which is to the following
effect:
”40. In view of the above said “facts and
circumstances, though perception of a
person differs from one another with regard
to the acceptance of evidence on record but
in my perception and consideration, the
accused has been successful in creating
doubt in the mind of the Court with regard
to the existence of the debt or liability
particularly with reference to the alleged
transaction dated 25.12.2005 as alleged by
the complainant. Hence, in my opinion the
High Court has full power to interfere with
such judgment of the Trial Court as subject
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matter exactly falls within the parameters
of Section 397 of the Code and also
guidelines of the Apex Court as noted in
the above said decisions. Therefore, I am
of the considered opinion the Trial Court
and the First Appellate Court have
committed serious error in merely
proceeding on the basis of the presumption
under Section 139 of the Act and also on
the basis that, the accused has not proved
his defence with reference to the loss of
cheque etc. Hence, I answered the point in
the affirmative and proceeded to pass the
following:
ORDER
The revision petition is hereby allowed.
Consequently, the judgment and sentence
passed by the III-Addl. Civil Judge
(Jr.Dn.) & JMFC, Kalaburagi in
C.C.No.1362/2006 which is affirmed by Fast
Track Court – 1 at Kalaburagi in
Cr.A.No.46/2009 are hereby set aside.
Consequently, the accused is acquitted of
the charges levelled against him under
Section 138 of N.I.Act. If any fine amount
is deposited by the accused/petitioner, the
same is ordered to be refunded to him....”
15. The High Court has not returned any finding that
order of conviction based on evidence on record
suffers from any perversity or based on no material or
there is other valid ground for exercise of revisional
jurisdiction. There is no valid basis for the High
Court to hold that the accused has been successful in
creating doubt in the mind of the Court with regard to
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the existence of the debt or liability. The appellant
has proved the issuance of cheque which contained
signatures of the accused and on presentation of the
cheque, the cheque was returned with endorsement
“insufficient funds”. Bank official was produced as
one of the witnesses who proved that the cheque was
not returned on the ground that it did not contain
signatures of the accused rather it was returned due
to insufficient funds. We are of the view that the
judgment of High Court is liable to be set aside on
this ground alone.
16. Even though judgment of the High Court is liable
to be set aside on the ground that High Court exceeded
its revisional jurisdiction, to satisfy ourselves with
the merits of the case, we proceeded to examine as to
whether there was any doubt with regard to the
existence of the debt or liability of the accused.
17. Section 139 of the Act, 1881 provides for drawing
the presumption in favour of holder. Section 139 is to
the following effect:
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“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 section 138 for the discharge, in
whole or in part, of any debt or other
liability.”
18. This Court in Kumar Exports vs. Sharma Carpets,
2009 (2) SCC 513, had considered the provisions of
Negotiable Instruments Act as well Evidence Act.
Referring to Section 139, this Court laid down
following in paragraphs 14, 15, 18 and 19:
“14. Section 139 of the Act provides that
it shall be presumed, unless the contrary
is proved, 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.
15. Presumptions are devices by use of
which the courts are enabled and entitled
to pronounce on an issue notwithstanding
that there is no evidence or insufficient
evidence. Under the Evidence Act all
presumptions must come under one or the
other class of the three classes mentioned
in the Act, namely, (1) “may presume”
(rebuttable), (2) “shall presume”
(rebuttable), and (3) “conclusive
presumptions” (irrebuttable). The term
“presumption” is used to designate an
inference, affirmative or disaffirmative of
the existence of a fact, conveniently
called the “presumed fact” drawn by a
judicial tribunal, by a process of probable
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reasoning from some matter of fact, either
judicially noticed or admitted or
established by legal evidence to the
satisfaction of the tribunal. Presumption
literally means “taking as true without
examination or proof”.
18. Applying the definition of the word
“proved” in Section 3 of the Evidence Act
to the provisions of Sections 118 and 139
of the Act, it becomes evident that in a
trial under Section 138 of the Act a
presumption will have to be made that every
negotiable instrument was made or drawn for
consideration and that it was executed for
discharge of debt or liability once the
execution of negotiable instrument is
either proved or admitted. As soon as the
complainant discharges the burden to prove
that the instrument, say a note, was
executed by the accused, the rules of
presumptions under Sections 118 and 139 of
the Act help him shift the burden on the
accused. The presumptions will live, exist
and survive and shall end only when the
contrary is proved by the accused, that is,
the cheque was not issued for consideration
and in discharge of any debt or liability.
A presumption is not in itself evidence,
but only makes a prima facie case for a
party for whose benefit it exists.
19. The use of the phrase “until the
contrary is proved” in Section 118 of the
Act and use of the words “unless the
contrary is proved” in Section 139 of the
Act read with definitions of “may presume”
and “shall presume” as given in Section 4
of the Evidence Act, makes it at once clear
that presumptions to be raised under both
the provisions are rebuttable. When a
presumption is rebuttable, it only points
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out that the party on whom lies the duty of
going forward with evidence, on the fact
presumed and when that party has produced
evidence fairly and reasonably tending to
show that the real fact is not as presumed,
the purpose of the presumption is over.”
19. This Court held that the accused may adduce
evidence to rebut the presumption, but mere denial
regarding existence of debt shall not serve any
purpose. Following was held in paragraph 20:
“20....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...”
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20. In the present case, the trial court as well as
the Appellate Court having found that cheque contained
the signatures of the accused and it was given to the
appellant to present in the Bank of the presumption
under Section 139 was rightly raised which was not
rebutted by the accused. The accused had not led any
evidence to rebut the aforesaid presumption. The
accused even did not come in the witness box to
support his case. In the reply to the notice which was
given by the appellant the accused took the defence
that the cheque was stolen by the appellant. The said
defence was rejected by the trial court after
considering the evidence on record with regard to
which no contrary view has also been expressed by the
High Court.
21. Another judgment which needs to be looked into is
Rangappa vs. Sri Mohan, 2010 (11) SCC 441. A three
Judge Bench of this Court had occasion to examine the
presumption under Section 139 of the Act, 1881. This
Court in the aforesaid case has held that in the event
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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 paragraphs 26 and 27:
“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,
(2008) 4 SCC 54, 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
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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 or proof.”
22. No evidence was led by the accused. The defence
taken in the reply to the notice that cheque was
stolen having been rejected by the two courts below,
we do not see any basis for the High court coming to
the conclusion that the accused has been successful in
creating doubt in the mind of the Court with regard to
the existence of the debt or liability. How the
presumption under Section 139 can be rebutted on the
evidence of PW.1, himself has not been explained by
the High court.
23. In view of the aforesaid discussion, we are of
the view that the High Court committed error in
setting aside the order of conviction in exercise of
revisional jurisdiction. No sufficient ground has been
mentioned by the High Court in its judgment to enable
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it to exercise its revisional jurisdiction for setting
aside the conviction.
24. In the result, the appeal is allowed, judgment of
the High Court is set aside and judgment of trial
court as affirmed by the Appellate Court is restored.
..........................J.
( A.K. SIKRI )
..........................J.
( ASHOK BHUSHAN )
NEW DELHI,
JULY 02, 2018.
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