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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

ASHOK BHUSHAN, J.

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.