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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.