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CHEQUE BOUNS CASE

The Banking Public Financial Institutions and Negotiable Instruments (Amendment) Act, 1988 – 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 = 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 27Page 28 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.

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Mahakaleshwar Jyotirlinga is a famous Hindu te...

Mahakaleshwar Jyotirlinga is a famous Hindu temple dedicated to Lord Shiva and is one of the twelve Jyotirlingams, the sacred abodes of Shiva. It is located in the city of Ujjain, Madhya Pradesh state, India. This image of linga is in Mahakaleshwar Jyotirlinga Temple (Photo credit: Wikipedia)

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
1Page 2
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
2Page 3
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 1
st
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 respondentaccused acquitting him of the offence under Section 138 of
the Act, learned counsel appearing for the complainantappellant 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 respondentaccused 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 complainantappellant’s case.
8. Learned counsel representing the respondentaccused however refuted the complainant’s version and
submitted that the case lodged by the complainantappellant 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
10Page 11
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. Sarathi
2
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
11Page 12
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
12Page 13
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 respondentaccused 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
1
st
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.
17Page 18
(T.S. Thakur)
………………………………….J.
(Gyan Sudha Misra)
New Delhi;
February 07, 2013
18Page 19
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.
19Page 20
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
20Page 21
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
21Page 22
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 respondentaccused 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
22Page 23
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
23Page 24
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.”
24Page 25
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
25Page 26
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. …”
26Page 27
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
27Page 28
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
28Page 29
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
29

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