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Reportable

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO.    261          2013

(Arising out of SLP (Crl.) 6761/2010)

VIJAY          ..Appellant

Versus

LAXMAN & ANR.       ..Respondents

J U D G M E N T

GYAN SUDHA MISRA, J.

Leave granted.

2. This appeal by special  leave which was heard at  

length at the admission stage itself is directed against the  

judgment  and order   dated 29.1.2010 passed by a learned  

single Judge of the High Court of Madhya Pradesh  Bench at  

Indore,  in  Criminal  Revision No. 926/2009, whereby the  

conviction  and  sentence  of  one  year  alongwith  a  fine  of  

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Rupees  One  Lakh  and Twenty Thousand imposed on the  

appellant  for commission of an offence under Section 138  

of The Banking Public Financial Institutions and Negotiable  

Instruments (Amendment) Act, 1988 ( For short the ‘N.I. Act’  

) has been set aside and the criminal revision was allowed.  

The  complainant-appellant,  therefore,   has  assailed  the  

judgment  and order of the High Court  which reversed the  

concurrent findings of fact recorded by  the trial court and  

set  aside   the  order  of  conviction  and  sentence  of  the  

respondent.

3. In order to appreciate the merit of this appeal, the  

essential  factual  details  as  per  the  version  of  the  

complainant-appellant  is  that  the  respondent-accused  

(since acquitted) had borrowed a sum of Rs.1,15,000/- from  

the  complainant-appellant  for  his  personal  requirement  

which was given to him as the relationship between the two  

was cordial.  By way of repayment, the respondent  issued a  

cheque dated 14.08.2007 bearing No.119682 amounting to  

Rs.1,15,000/- drawn on  Vikramaditya Nagrik Sahkari Bank  

Ltd.  Fazalapura,  Ujjain  in  favour  of  the  appellant.   The  

complainant-appellant alleged that on 14.8.2007 when the  

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cheque  was  presented  to  the  bank  for  encashment  the  

same  was  dishonoured  by  the  bank  on  account  of  

‘insufficient  funds’.   The complainant-appellant,  therefore,  

issued a legal notice after a few days on 17.8.2007 to the  

accused-respondent  which  was  not  responded  as  the  

respondent neither  replied to the notice nor paid the  said  

amount.   

4. It is an admitted fact that the respondent-accused  

is  a  villager  who  supplied  milk  at  the  dairy  of  the  

complainant’s father in the morning  and evening  and his  

father  made  payment   for  the  supply  in  the  evening.  

Beyond this part, the case of the respondent-accused is that  

the complainant took  security  cheques from all the  milk  

suppliers  and used to pay the   amount   for  one year  in  

advance for which the milk had to be supplied.  It  is on this  

count that the respondent  had issued the cheque in favour  

of the complainant which was merely by way of  amount  

towards security which was meant to be encashed only if  

milk was not supplied.  Explaining this part of the defence  

story, one of the witnesses for the defence  Jeevan Guru  

deposed  that  when  any  person  entered  into  contract  to  

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purchase  milk  from  any  person  in  the  village,  the  dairy  

owner i.e.  the complainant’s side  made payment of one  

year in advance and in return  the milk supplier  like the  

respondent issued cheques of the said amount by way of  

security.  In view of this  arrangement, the accused Laxman  

started  supplying   milk  to  the  complainant’s  father.   In  

course  of settlement of accounts, when accused Laxman  

asked for return of his security cheque, since he had already  

supplied milk for that amount to the complainant’s father  

Shyam Sunder, he was directed to take back the cheque  

later  on.   The accused insisted for  return of the security  

cheque  since the account had been settled but the cheque  

was not given back to the respondent as a result of which  

an altercation took place  between  the respondent/accused  

and the milk supplier  due to which the accused lodged a  

report  at  the  police  station  on   13.8.2007,   since  the  

complainant’s  father   Shyam  Sunder  also  assaulted  the  

respondent-accused  and abused  him who had  refused  to  

return  the  cheque  to  the  respondent-accused  which  had  

been issued by him only by way of  security.  As a counter  

blast,  the  complainant  presented  the  cheque  for  

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encashment  merely  to  settle  scores  with  the  

Respondent/milk supplier.   

5. The  complaint-appellant,  however,  filed  a  

complaint  under  Section  138  of  the  N.I.  Act  before  the  

Judicial Magistrate 1st Class, Ujjain, who while conducting the  

summary  trial  prescribed  under  the  Act  considered  the  

material evidence on record and held the Respondent guilty  

of  offence  under  Section  138  of  the  N.I.  Act  and  hence  

recorded  an order of conviction  of the respondent-accused  

due  to  which  he  was  sentenced  to  undergo  rigorous  

imprisonment for one year and a fine of Rs.1,20,000/- was  

also imposed.  The respondent-accused feeling  aggrieved  

of the order preferred an appeal before the IXth Additional  

Sessions Judge, Ujjain, M.P. who also was pleased to uphold  

the order of conviction and hence dismissed the appeal.   

6. The  respondent-accused,  thereafter,  filed  a  

criminal revision in the High Court against the concurrent  

judgment and orders of the courts below but the High Court  

was pleased to set aside the judgment and orders of the  

courts  below as  it  was  held  that  the  impugned  order  of  

conviction and sentence suffered from grave miscarriage of  

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justice due to non- consideration of the defence evidence of  

rebuttal which demolished the complainant’s case.  

7. Assailing   the  judgment  and  order  of  reversal  

passed by the  High Court  in   favour  of the   respondent-

accused acquitting  him of the offence under Section 138 of  

the  Act,  learned  counsel  appearing  for  the  complainant-

appellant  submitted  that  the  learned  single  Judge  of  the  

High Court ought not to have interfered with the concurrent  

findings  of  fact  recorded  by  the  courts  below by  setting  

aside the judgment and order recording conviction of the  

respondent  and  sentencing  him   as  already  indicated  

hereinbefore.  The High Court had wrongly appreciated the  

material evidence on record and held that the respondent-

accused appeared to be an illiterate  person who can hardly  

sign  and  took  notice  of  some  dispute  affecting  the  

complainant’s case since an incident had taken  place on  

13.8.2007,  while  the  alleged  cheque  was  presented  on  

14.8.2007 for encashment towards discharge of the loan of  

Rs.1,15,000/-.  Learned counsel also assailed the finding of  

the High Court  which recorded that the cheque was issued  

by way of  security of some transaction  of milk which took  

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place between the  respondent-accused and father  of  the  

complainant-appellant and thus dispelled the complainant-

appellant’s case.

8. Learned  counsel  representing  the  respondent-

accused  however  refuted  the  complainant’s  version  and  

submitted  that   the  case  lodged  by  the  complainant-

appellant  against   the  respondent  was clearly with an  

ulterior motive to harass the respondent keeping in view the  

grudge  in  mind  by  lodging  a  false  case  alleging  that  

personal  loan  of  Rs.1,15,000/-  was  granted  to  the  

respondent  and   the  answering  respondent  had  issued  

cheque towards the repayment of said loan which could not  

stand the test of scrutiny of the High Court as it noticed the  

weakness in the evidence led by the complainant.  

9. Having  heard  the  learned  counsels  for  the  

contesting parties in the light of the evidence led by them,  

we  find  substance  in  the  plea  urged  on  behalf   of  the  

complainant-appellant  to the extent  that in spite of the  

admitted  signature  of  the  respondent-accused  on  the  

cheque, it was not available to the  respondent-accused to  

deny the fact that he had not issued  the cheque  in favour  

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of the  complainant for once  the signature on the cheque is  

admitted and the same had been returned on account of  

insufficient funds, the offence under Section 138 of the  Act  

will clearly be held to have been made out and it was not  

open for the respondent-accused to urge that although the  

cheque had been dishonoured, no offence under the Act is  

made  out.   Reliance  placed  by  learned  counsel  for  the  

complainant-appellant  on the authority of this Court  in the  

matter of  K.N. Beena vs.  Muniyappan And Anr.1  adds  

sufficient  weight to the plea of the complainant-appellant  

that the burden of proving the consideration for  dishonour  

of the cheque  is not on the complainant-appellant,  but the  

burden of proving  that a cheque had not been issued for  

discharge of a lawful debt or a liability  is on the  accused  

and if he fails  to discharge  such  burden, he is liable to be  

convicted  for  the  offence  under  the  Act.   Thus,  the  

contention of  the  counsel  for  the  appellant  that  it  is  the  

respondent-accused  (since  acquitted)  who  should  have  

discharged the burden that the cheque was given merely by  

way  of  security,  lay  upon  the  Respondent/  accused  to  

establish that the cheque was not meant to be encashed by  1 2001 (7) Scale  331

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the complainant  since  respondent had already supplied  

the milk towards the amount. But then the question remains  

whether the High Court was justified in holding that   the  

respondent   had  succeeded  in  proving  his  case  that  the  

cheque   was  merely  by  way  of  security   deposit  which  

should  not  have  been  encashed   in  the  facts  and  

circumstances of the case since inaction to do so was bound  

to  result   into  conviction  and  sentence  of  the  

Respondent/Accused.  

10. It  is  undoubtedly  true   that  when  a  cheque  is  

issued by a person who has signed  on the cheque and the  

complainant  reasonably  discharges  the  burden  that  the  

cheque had been issued towards a lawful payment, it is for  

the accused  to discharge the burden under Section 118 and  

139 of the N.I.  Act  that  the cheque had not been issued  

towards discharge of a legal debt but was issued by way of  

security or any other reason on account of some business  

transaction or was obtained unlawfully.  The purpose of  the  

N.I. Act is clearly to provide a speedy remedy  to curb and to  

keep check on the economic offence of duping or cheating  

a person to whom a cheque is issued  towards discharge of  

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a debt and if the complainant  reasonably  discharges the  

burden that the payment  was towards a lawful debt, it is  

not open for the accused/signatory  of the cheque to set up  

a defence that although  the cheque had been signed by  

him, which had bounced, the same would not constitute an  

offence.   

11. However,  the  Negotiable  Instruments  Act  

incorporates  two  presumptions  in  this  regard:  one  

containing in Section 118 of the Act and other in Section  

139 thereof.  Section 118 (a) reads as under:-

“118. Presumption as to negotiable instruments.—Until the  contrary  is  proved,  the  following   presumptions  shall  be  made—

1. 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;”

Section 139 of the  Act reads as under:-

“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  

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Section 138 for the discharge, in whole or in part, of any  debt  or other liability.”

12. While  dealing  with  the  aforesaid   two  

presumptions, learned Judges of this Court in the matter of  

P. Venugopal vs.  Madan P. Sarathi2 had been pleased to  

hold that under Sections 139, 118 (a) and 138 of the N.I. Act  

existence of  debt or other  liabilities  has to be proved in  

the  first  instance  by the complainant  but  thereafter  the  

burden of proving to the contrary  shifts to the accused.  

Thus,  the  plea  that  the  instrument/cheque  had  been  

obtained from its lawful owner  or from any person  in lawful  

custody thereof  by means  of an offence  or fraud  or had  

been  obtained  from  the  maker  or   acceptor  thereof  by  

means of an offence or fraud  or for unlawful consideration,  

the burden of disproving  that the holder is a holder in due  

course  lies upon him.   Hence, this Court observed therein,  

that   indisputably,  the   initial  burden  was   on  the  

complainant  but the presumption raised in favour of the  

holder of the cheque  must be kept confined  to the matters  

2 (2009) 1 SCC 492

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covered thereby.   Thereafter, the presumption  raised does  

not extend to the extent  that the cheque was not issued for  

the discharge of any debt or liability which is not required to  

be  proved  by  the  complainant  as  this  is  essentially  a  

question of fact and it  is the defence which has to prove  

that  the  cheque  was  not  issued  towards  discharge  of  a  

lawful debt.   

13. Applying the ratio of the aforesaid case as also  

the  case   of   K.N.  Beena vs.  Muniyappan  And  Anr.  

(supra), when we examine the facts of this case, we have  

noticed that although  the respondent  might have failed to  

discharge  the  burden    that  the  cheque   which  the  

respondent  had issued was not  signed by him,  yet  there  

appears  to  be  a  glaring   loophole  in  the  case  of  the  

complainant who failed to establish that the cheque  in fact  

had been issued by the respondent towards repayment of  

personal  loan  since  the  complaint  was  lodged  by  the  

complainant without even specifying the date on which the  

loan was advanced nor the complaint indicates  the date of  

its lodgement  as the date  column  indicates ‘nil’ although  

as per the complainant’s own story, the respondent  had  

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assured  the  complainant  that  he  will  return  the  money  

within  two months  for  which he  had issued a  post-dated  

cheque  No.119582  dated  14.8.2007  amounting  to  

Rs.1,15,000/- drawn on  Vikramaditya  Nagrik Sahkari Bank  

Ltd., Ujjain.  Further case of the complainant  is that when  

the cheque  was presented in the bank on 14.8.2007   for  

getting  it  deposited  in  his  savings  account  No.1368  in  

Vikarmaditya Nagrik Sahkari Bank Ltd. Fazalpura, Ujjain, the  

said cheque was returned being  dishonoured by the bank  

with a note  ‘insufficient  amount’ on 14.8.2007.   In the first  

place, the respondent-accused  is alleged to have issued a  

post-dated  cheque   dated  14.8.2007  but  the  

complainant/appellant  has conveniently omitted to mention  

the date on which  the loan was advanced   which is fatal to  

the complainant’s case as  from this vital omission   it can  

reasonably  be  inferred  that  the  cheque   was  issued  on  

14.8.2007  and was meant to be encashed  at a  later date  

within  two months  from the  date  of  issuance  which  was  

14.8.2007.  But it is evident that the cheque  was presented  

before the bank  on the date of issuance itself  which was  

14.8.2007 and on the same date i.e. 14.8.2007, a written  

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memo  was  received  by  the  complainant  indicating  

insufficient   fund.   In  the  first  place  if  the  cheque  was  

towards  repayment  of  the  loan  amount,  the  same  was  

clearly  meant  to  be  encashed at  a  later  date  within  two  

months or at least a little later than the date on which the  

cheque  was  issued:  If  the  cheque  was  issued  towards  

repayment of loan it is beyond comprehension as to why the  

cheque was presented by the  complainant  on the same  

date  when  it  was  issued  and  the  complainant  was  also  

lodged without specifying  on which date the amount of loan  

was advanced  as also the date  on which compliant  was  

lodged  as  the  date  is  conveniently  missing.   Under  the  

background   that   just  one  day  prior  to  14.8.2007  i.e.  

13.8.2007  an  altercation  had  taken  place   between  the  

respondent-accused and the  complainant-dairy owner for  

which  a  case  also  had  been  lodged  by  the  respondent-

accused  against  the  complainant’s  father/dairy  owner,  

missing of the date on which  loan was advanced and the  

date on which  complaint was lodged, casts a serious doubt  

on  the  complainant’s  plea.   It  is,  therefore,  difficult  to  

appreciate as to why the cheque which even as per the case  

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of the complainant was towards repayment of loan which  

was  meant  to  be  encashed  within  two  months,  was  

deposited on the date of issuance itself.  The complainant  

thus has miserably failed to prove his case that the cheque  

was issued towards discharge of a lawful debt and it was  

meant to be encashed on the same date when it was issued  

specially when the complainant has failed to disclose the  

date  on which  the  alleged  amount  was  advanced  to  the  

Respondent/Accused. There are thus glaring inconsistencies  

indicating gaping hole in the complainant’s version that the  

cheque although had been issued, the same was also meant  

to be encashed  instantly  on the same date when it was  

issued.

14. Thus, we are of the view that although the cheque  

might have been duly obtained from its lawful owner i.e. the  

respondent-accused, it  was used for unlawful reason as it  

appears to have been submitted for encashment on a date  

when it was not meant to be presented  as in that event the  

respondent would have had no reason to ask for a loan from  

the complainant if he had the capacity to discharge the loan  

amount on the date when the cheque had been issued.  In  

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any event, it leaves the complainant’s case in the realm of  

grave doubt on which the case of conviction and sentence  

cannot be sustained.  

15. Thus,  in  the  light  of  the  evidence  on  record  

indicating grave weaknesses in the complainant’s case, we  

are of the view that the  High Court has  rightly set aside the  

findings recorded by the Courts below and consequently set  

aside the conviction and sentence since there were glaring  

inconsistencies  in  the  complainant’s  case  giving  rise  to  

perverse findings resulting into unwarranted conviction and  

sentence of the respondent.   In fact, the trial court as also  

the first appellate court of facts seems to have missed the  

important  ingredients of Sections 118 (a) and 139 of the  

N.I.  Act which made it  incumbent  on the courts below to  

examine the defence evidence of  rebuttal  as to whether  

the respondent/accused discharged his burden to disprove  

the complainant’s case  and recorded the finding only on  

the basis of the complainant’s version.  On scrutiny of the  

evidence which we did  to avoid  unwarranted  conviction  

and  miscarriage  of  justice,  we have  found that  the  High  

Court has rightly overruled the decision  of the courts below  

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which were under  challenge as the trial court  as also the  

1st  Appellate  Court   misdirected  itself   by  ignoring  the  

defence   version  which  succeeded   in  dislodging   the  

complainant’s  case on the  strength  of convincing evidence  

and thus discharged the burden envisaged under Sections  

118 (a) and 139 of  the N.I. Act which although speaks of  

presumption in favour of  the holder of the cheque, it has  

included   the  provisos   by  incorporating  the  expressions  

“until the contrary is proved” and “unless the contrary  is  

proved” which  are  the  riders  imposed by the  Legislature  

under the aforesaid  provisions of Sections 118 and 139 of  

the N.I. Act as the Legislature  chooses to provide adequate  

safeguards  in  the  Act  to   protect  honest  drawers  from  

unnecessary  harassment  but  this  does  not  preclude  the  

person against whom  presumption is drawn from  rebutting  

it and proving  to the contrary.

16. Consequently, we uphold the judgment and order  

of acquittal   of the respondent passed by the High Court  

and hence dismissed this appeal.  

        ………………………………….J.

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(T.S. Thakur)

………………………………….J.

(Gyan Sudha Misra)

New Delhi;

February 07, 2013     

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IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO.  261            OF 2013 (Arising out of S.L.P. (Crl.) No.6761 of 2010)

Vijay …Appellant

Versus

Laxman and Anr. …Respondents

J U D G M E N T

T.S. Thakur, J.

1. I  have  had  the  advantage  of  going  through  the  

judgment  and  order  proposed  by  my esteemed  colleague  

Gyan Sudha Misra,  J.  I  entirely agree with the conclusion  

drawn by Her Ladyship that the respondent has been rightly  

acquitted of the charge framed against him under Section  

138 of the Negotiable Instruments Act, 1881 and that the  

present appeal ought to be dismissed. I, however, would like  

to add a few words of my own in support of that conclusion.

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2. The factual matrix in which the complaint under Section  

138 of the Negotiable Instruments Act was filed against the  

respondent has been set out in the order proposed by my  

esteemed sister Misra J. It is, therefore, unnecessary for me  

to state the facts over again.  All that need be mentioned is  

that according to the complainant the accused had borrowed  

a  sum  of  Rs.1,15,000/-  from  the  former  for  repayment  

whereof the latter  is said to have issued a cheque for an  

equal amount payable on the Vikramaditya Nagrik Sahkari  

Bank Ltd. Fazalapura, Ujjain. The cheque when presented to  

the  bank  was  dishonoured  for  ‘insufficient  funds’.   The  

accused having failed to make any payment despite statutory  

notice  being  served  upon  him  was  tried  for  the  offence  

punishable under the provision mentioned above.  Both the  

courts below found the accused guilty and sentenced him to  

undergo  imprisonment  for  a  period  of  one  year  besides  

payment of Rs.1,20,000/- towards fine.   

3. The case set up by the accused in defence is that he is  

a  Milk  Vendor  who  supplied  milk  to  the  father  of  the  

complainant who runs a dairy farm.  The accused claimed  

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that  according  to  the  prevailing  practice  he  received  an  

advance towards the supply of milk for a period of one year  

and furnished security  by  way of  a  cheque  for  a  sum of  

Rs.1,15,000/-.  When  the  annual  accounts  between  the  

accused-respondent  and  the  dairy  owner-father  of  the  

complainant was settled, the accused demanded the return  

of the cheque to him. The dairy owner,  however, avoided  

return of cheque promising to do so some other day. Since  

the cheque was not returned to the accused despite demand  

even  on a  subsequent  occasion,  an  altercation  took place  

between  the  two  leading  to  the  registration  of  a  first  

information report against the father of the complainant with  

the jurisdictional police. On the very following day after the  

said  altercation,  the  cheque  which  the  respondent  was  

demanding  back  from the  father  of  the  complainant  was  

presented for encashment to the bank by the complainant  

followed by a notice demanding payment of the amount and  

eventually  a  complaint  under  Section  138  against  the  

accused.  The case of the accused, thus, admitted the issue  

and handing over of the cheque in favour of the complainant  

but  denied that  the same was towards repayment of  any  

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loan.  The High Court has rightly accepted the version given  

by the accused-respondent herein.  We say so for  reasons  

more  than  one.   In  the  first  place  the  story  of  the  

complainant  that  he  advanced  a  loan  to  the  respondent-

accused  is  unsupported  by  any  material  leave  alone  any  

documentary evidence that  any such loan transaction had  

ever taken place. So much so, the complaint does not even  

indicate  the  date  on  which  the  loan  was  demanded  and  

advanced.  It is blissfully silent about these aspects thereby  

making the entire story suspect.  We are not unmindful of  

the  fact  that  there  is  a  presumption  that  the  issue  of  a  

cheque  is  for  consideration.  Sections  118 and 139 of  the  

Negotiable Instruments Act make that abundantly clear. That  

presumption is, however, rebuttable in nature.  What is most  

important is that the standard of proof required for rebutting  

any such presumption is not as high as that required of the  

prosecution. So long as the accused can make his version  

reasonably  probable,  the  burden  of  rebutting  the  

presumption would stand discharged.  Whether or not it is so  

in a given case depends upon the facts and circumstances of  

that  case.   It  is  trite  that  the  courts  can  take  into  

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consideration the circumstances appearing in the evidence to  

determine  whether  the  presumption should be  held  to  be  

sufficiently  rebutted.  The  legal  position  regarding  the  

standard  of  proof  required  for  rebutting  a  presumption  is  

fairly well settled by a long line of decisions of this Court.

4. In M.S. Narayana Menon v. State of Kerala (2006)  

6 SCC 39, while dealing with that aspect in a case under  

Section 138 of the Negotiable Instruments Act,  1881, this  

Court held that the presumptions under Sections 118(a) and  

139  of  the  Act  are  rebuttable  and  the  standard  of  proof  

required for such rebuttal is preponderance of probabilities  

and not proof beyond reasonable doubt. The Court observed:

“29.  In  terms  of  Section  4  of  the  Evidence  Act   whenever  it  is  provided by the Act that  the court   shall  presume a fact,  it  shall  regard such  fact  as   proved unless and until  it  is disproved. The words   “proved”  and  “disproved”  have  been  defined  in   Section  3  of  the  Evidence  Act  (the  interpretation   clause)...

30.  Applying  the  said  definitions  of  “proved”  or   “disproved” to the principle behind Section 118(a) of   the  Act,  the  court  shall  presume  a  negotiable   instrument to be for consideration unless and until   after  considering  the  matter  before  it,  it  either   believes  that  the  consideration  does  not  exist  or   considers the non-existence of the consideration so   probable  that  a  prudent  man  ought,  under  the   circumstances of the particular case, to act upon the   supposition  that  the  consideration  does  not  exist.   For rebutting such presumption, what is needed is to   

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raise a probable defence. Even for the said purpose,  the evidence adduced on behalf of the complainant   could be relied upon.  

xx xx xx xx

32.  The  standard  of  proof  evidently  is   preponderance  of  probabilities. Inference  of  preponderance  of  probabilities  can  be  drawn  not   only  from  the  materials  on  record  but  also  by   reference to the circumstances upon which he relies.

xx xx xx xx

41...Therefore,  the  rebuttal  does  not  have  to  be  conculsively established but such evidence must be   adduced before the court in support of the defence   that  the  court  must  either  believe  the  defence  to   exist  or  consider  its  existence  to  be  reasonably   probable, the standard of reasonability being that of   the 'prudent man'.”

5 The  decision  in  M.S.  Narayana  Menon  (supra)  was  

relied upon in K. Prakashan v. P.K. Surenderan (2008) 1  

SCC 258  where this Court reiterated the legal position as  

under:

“13.  The  Act  raises  two  presumptions;  firstly,  in   regard to the passing of consideration as contained   in  Section  118  (a)  therein  and,  secondly,  a   presumption that the holder of cheque receiving the   same  of  the  nature  referred  to  in  Section  139   discharged  in  whole  or  in  part  any  debt  or  other   liability. Presumptions both under Sections 118 (a)   and 139 are rebuttable in nature.

14. It is  furthermore not in  doubt or dispute that   whereas  the  standard  of  proof  so  far  as  the   prosecution is concerned is proof of guilt beyond all   reasonable doubt;  the one on the accused is  only   mere preponderance of probability.”

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6. To  the  same  effect  is  the  decision  of  this  Court  in  

Krishna Janardhan Bhat v. Dattatraya G. Hegde (2008)  

4 SCC 54 where this Court observed:

“32… Standard of proof on the part of an accused   and  that  of  the  prosecution  a  criminal  case  is   different.

xx xx xx xx

34.  Furthermore,  whereas  prosecution  must  prove  the guilt of an accused beyond all reasonable doubt,   the standard of proof so as to prove a defence on   the  part  of  an  accused  is  preponderance  of   probabilities.

xx xx xx xx

45… Statute mandates raising of presumption but it   stops  at  that.  It  does  not  say  how  presumption   drawn  should  be  held  to  have  rebutted.  Other   important  principles of legal  jurisprudence, namely   presumption of innocence as human rights and the   doctrine of reverse burden introduced by Section139   should be delicately balanced.”

7. Presumptions under  Sections 118(a) and Section 139  

were  held  to  be  rebuttable  on  a  preponderance  of  

probabilities  in  Bharat  Barrel  &  Drum  Manufacturing  

Company v. Amin Chand Pyarelal (1999) 3 SCC 35 also  

where the Court observed:

“11… Though the evidential burden is initially placed   on  the  defendant  by  virtue  of  S.118  it  can  be   rebutted  by  the  defendant  by  showing  a   

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preponderance  of  probabilities  that  such   consideration as stated in the pronote, or in the suit   notice or in the plaint does not exist and once the   presumption  is  so  rebutted,  the  said  presumption   'disappears'. For the purpose of rebutting the initial   evidential burden, the defendant can rely on direct   evidence  or  circumstantial  evidence  or  on   presumptions of law or fact. Once such convincing   rebuttal  evidence is  adduced and accepted by the   Court, having regard to all the circumstances of the   case  and  the  preponderance  of  probabilities,  the   evidential burden shifts back to the plaintiff who has   also the legal burden.”

8. In Hiten P. Dalal v. Bratindranath Banerjee (2001)  

6 SCC 16 this Court compared evidentiary presumptions in  

favour of the prosecution with the presumption of innocence  

in the following terms:

“22… Presumptions are rules of evidence and do not   conflict with the presumption of innocence, because   by the latter all that is meant is that the prosecution   is  obliged  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  or  fact  unless  the  accused   adduces evidence showing the reasonable possibility   of the non-existence of the presumed fact.

23. In other words, provided the facts required to   form the basis of a presumption of law exists,  no   discretion  is  left  with  the  Court  but  to  draw  the   statutory conclusion, but this does not preclude the   person against whom the presumption is drawn from  rebutting it and proving the contrary. …”

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9. Decisions in Mahtab Singh & Anr. v. State of Uttar  

Pradesh (2009) 13 SCC 670, Subramaniam v. State of   

Tamil  Nadu  (2009)  14  SCC  415  and Vishnu  Dutt  

Sharma v.  Daya  Sapra  (2009) 13 SCC 729,  take  the  

same line of reasoning.  

10. Coming then to the present case, the absence of any  

details of the date on which the loan was advanced as also  

the absence of any documentary or other evidence to show  

that  any  such  loan  transaction  had  indeed  taken  place  

between the parties is a significant circumstance.  So also  

the fact that the cheque was presented on the day following  

the altercation between the parties is a circumstance that  

cannot be brushed away. The version of the respondent that  

the cheque was not  returned to him and the complainant  

presented the same to wreak vengeance against him is a  

circumstance that cannot be easily rejected.  Super added to  

all this is the testimony of DW1, Jeevan Guru according to  

whom the accounts were settled between the father of the  

complainant  and  the  accused  in  his  presence  and  upon  

settlement the accused had demanded return of this cheque  

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given in lieu of the advance.  It was further stated by the  

witness that the complainant’s father had avoided to return  

the cheque and promised to do so on some other day.  There  

is no reason much less a cogent one suggested to us for  

rejecting the deposition of this witness who has testified that  

after the incident of altercation between the two parties the  

accused has been supplying milk to the witness as he is also  

in the same business.  Non-examination of the father of the  

complainant who was said to be present outside the Court  

hall on the date the complainant’s statement was recorded  

also assumes importance. It gives rise to an inference that  

the  non-examination  was  a  deliberate  attempt  of  the  

prosecution to keep him away from the court for otherwise  

he  would  have  to  accept  that  the  accused  was  actually  

supplying milk to him and that the accused was given the  

price  of  the  milk in  advance  as  per  the  trade  practice  in  

acknowledgement and by way of security for which amount  

the accused had issued a cheque in question.    

11. In  the  totality  of  the  above  circumstances,  the  High  

Court  was  perfectly  justified  in  its  conclusion  that  the  

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prosecution  had  failed  to  make  out  a  case  against  the  

accused and in acquitting him of the  charges.  With these  

observations in elucidation of the conclusion drawn by my  

worthy  colleague,  I  agree  that  the  appeal  fails  and  be  

dismissed.

………………….……….…..…J.       (T.S. Thakur)

New Delhi February 7, 2013              

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