2025 INSC 537 Crl.Appeal No.5305/2024 Page 1 of 21

NON-REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 5305 OF 2024

N. VIJAY KUMAR … APPELLANT

Versus

VISHWANATH RAO N. … RESPONDENT

J U D G M E N T

SANJAY KAROL J.

1. The present appeal is filed assailing the judgment dated

21

st

December 2020 passed by the High Court of Karnataka at

Bengaluru in Criminal Appeal No.94 of 2011, whereby the High

Court reversed the order of acquittal passed by the Court of XV

Additional Chief Metropolitan Magistrate, Bangalore City

1

and

1

Hereinafter referred to as ‘Trial Court’

Crl.Appeal No.5305/2024 Page 2 of 21

convicted the appellant-accused under Section 138 of the

Negotiable Instruments Act, 1881

2

.

2. The factual matrix giving rise to the present appeal is as

follows :

2.1. The appellant

3

and the respondent

4

had known each

other for over a decade and shared a friendly relationship.

The case of the complainant is that he extended a hand loan

of Rs.20,00,000/- (twenty lakh rupees) to the accused, to

help him produce a Kannada feature film titled ‘Indian

Police History’. In discharge of this alleged loan, the

accused issued a cheque bearing No.015138, dated 14

th

October 2008, in favour of the complainant. However, upon

presentation for encashment, the cheque was dishonoured

on 20

th

October 2008 with an endorsement ‘Refer to

Drawer’, indicating insufficient funds in the accused’s

account.

2.2. Consequently, the complainant issued a statutory

legal notice dated 25

th

October 2008, demanding repayment

of the amount. The accused, through his reply dated 7

th

November 2008, denied any liability and raised the

following contentions:

2

Hereinafter the ‘N.I. Act’

3

Hereinafter referred to as the ‘Accused’

4

Hereinafter referred to as the ‘Complainant'

Crl.Appeal No.5305/2024 Page 3 of 21

(i) The cheque in question was issued merely as

a security instrument for a smaller loan of

Rs.3,50,000/- (three lakh fifty thousand rupees),

availed by the appellant-accused for production of

Indian Police History, which was completed in 2003.

This loan had already been settled in terms of a

Memorandum of Understanding (MoU) dated 29

th

March 2008, which recorded a full and final settlement

of Rs.5,50,000/- (five lakh fifty thousand rupees),

inclusive of interest.

(ii) At the time of availing the said loan of

Rs.3,50,000/-, the accused had handed over two blank

signed cheques to the complainant as security.

However, when the accused sought their return upon

signing the MoU, the complainant informed him that

the cheques had been misplaced but assured that they

would not be misused. The same was also recorded in

the MoU. It was only upon receiving the legal notice,

that the accused became aware that the complainant

had allegedly misused one of these cheques.

(iii) The accused had lodged a police complaint,

being NCR No.256/2008 dated 24

th

July 2008,

reporting the loss of the two cheques at the instance of

Crl.Appeal No.5305/2024 Page 4 of 21

the complainant and alleging that the complainant had

failed to return them despite repeated requests.

2.3. Since the alleged amount remained unpaid, the

complainant preferred a complaint against the accused

under Section 200 of the Code of Criminal Procedure 1973

5

,

being CC No.1191 of 2009, before the Trial Court, in

relation to an offence punishable under Section 138 of the

N.I. Act.

2.4. After considering the oral and documentary

evidence, the Trial Court vide judgment dated 20

th

November 2010, acquitted the accused, holding that the

accused had successfully rebutted the presumption under

Section 139 of the N.I. Act. To hold the same, reliance was

placed on Rangappa v. Sri Mohan

6

. The relevant extract of

the Trial Court judgment in the instant case is as follows :

“I have gone through the said decision very carefully

with due respect to their lordships. The ratio laid down

in the aforesaid decision is applicable and supports the

defence taken by the accused. Thus over all materials

available on record and under the facts and

circumstances of the case, the arguments advanced by

the learned Counsel for the complainant does not holds

water except Ex. D.2. Wherein the arguments advanced

by the learned counsel for the accused holds water.

Hence a doubt has arised in the mind of the court about

the alleged loan amount of Rs. 20 lakhs to the accused.

Hence the accused has rebutted the presumption U / s.

5

For short ‘CrPC’

6

(2010) 11 SCC 441

Crl.Appeal No.5305/2024 Page 5 of 21

118 and 139 of NI Act and proves that there is no

existence of legally recoverable debt by the accused to

the complainant by relying upon the oral evidence of pw.

1, DWs. 1 to 3 and documents available on record.”

2.5. Aggrieved by the said order of acquittal, the

complainant preferred an appeal before the High Court

bearing Criminal Appeal No.94/2011. Vide the impugned

judgment dated 21

st

December 2020, the High Court

reversed the finding of acquittal returned by the Trial Court

and convicted the accused for an offence punishable under

Section 138 of the N.I. Act and directed him to pay

Rs.22,00,000/- (twenty two lakh rupees) within eight weeks,

in default whereof he was to undergo simple imprisonment

for one year. The reasoning for such a conclusion, as can

be understood from the perusal of the judgment, is that :

“30. Having taken note of the evidence of DW.2,

it is clear that the amounts are not given to the

complainant. DW.3 though in his evidence, he says that

the amount was paid in his presence and the complainant

has affixed the signature on Ex.D2. It is elicited in the

cross-examination that he does not know anything about

the payment of money by the complainant to the accused

and also how much amount was paid to him, but he

claims that the complainant told him that the accused has

availed an amount of Rs.3,50,000/- and insisted him to

get the money from the accused. He also claims that in

the Hotel, it was decided to return the amount of

Rs.5,50,000/-. All of them have signed the documents in

the Kanishka Hotel, DW.2 was also present and he

claims that an amount of Rs.2 lakhs was paid, but he

came to know that already an amount of Rs.3,50,000/-

was paid prior to that. DW.2 says that in his presence the

Crl.Appeal No.5305/2024 Page 6 of 21

amount was not paid and he subsequently signed the

documents-Exs.D2. But DW.3 claims that in his

presence only after receiving the amount of Rs.2 Lakhs,

the complainant has signed the documents. It is

suggested that while signing the document - Ex.D2, the

complainant was not present and the same was denied.

DW.1 himself says that he obtained the signature of

DWs.2 and 3 after the complainant left the place by

receiving the money. There are material contradictions

in the evidence of DWs.1 to 3 for having repaid the

amount of Rs.5,50,000/-. Though, the accused relies

upon the document-Ex.D2, it is proved that the said

document is forged and the evidence of the handwriting

expert is unchallenged and also the accused did not

examine the handwriting expert and did not dispute the

opinion of the handwriting expert. When such being the

case, the evidence of the accused cannot be relied upon

and the Court cannot give any credence to the evidence

of DW.1. For having repaid the amount, the evidence of

DWs. 1 to 3 are contradictory to each other and even the

document-Ex.D2 came into existence is also under the

suspicious circumstances. The trial Judge has failed to

appreciate these materials before the Court.

31. The Trial Judge though considered the

Judgment in Rangappa's case (supra), an observation

has been made that the ratio laid down in the aforesaid

decision is applicable and supports the defense taken by

the accused. The very observation is erroneous. How it

supports the case of the defense has not been stated in

the judgment. Instead of that the same judgment is

helpful to the complainant since the complainant has

caused the legal notice in terms of Ex.P4 and also

produced Ex.PS-Postal receipt, Ex.P6-UCP receipts,

Ex.P7- notice and Ex.P7(a)-envelope.

32. The Judgment of this Court in Sri Yogesh

Poojary's case (supra), is aptly applicable to the case on

hand with regard to the service of notice is concerned

and so also the Apex Court in the Judgment of

Rangappa's case (supra), categorically held that when

the notice is issued and the accused did not dispute the

Crl.Appeal No.5305/2024 Page 7 of 21

issuance of cheque and signature, the presumption

available in favour of the complainant unless the

evidence of the complainant is rebutted. In the case on

hand, though the accused made all efforts to rebut the

case of complainant nothing is elicited in the cross-

examination of PW.1 and instead of the evidence, which

he has adduced as DW.1 and also DWs.2 and 3 and the

same falsifies the case of the accused. The very defense

of the accused is that in one breath he borrowed an

amount of Rs.3 Lakhs and in another breath an amount

of Rs.3,50,000/-, totally, repaid the amount of

Rs.5,50,000/-, In view of the admission, it is narrow

down the case of the complainant since the accused

admitted the transaction but only the defense is that he

repaid the amount of Rs.5,50,000/-.”

OUR VIEW

3. In the present special leave petition, while passing order

on the application seeking exemption from surrendering, learned

Judge in Chambers vide order dated 15

th

March 2021 directed

Rs.11,00,000/- (eleven lakh rupees) to be deposited with the

Registry without prejudice to the rights and contentions. Notice

was issued on 12

th

April 2021, and the remaining amount of

Rs.9,00,000/- (the total disputed amount being, allegedly, twenty

lakh) was directed to be deposited within eight weeks. The

operation of the impugned judgment was stayed. The amount

stood deposited in the Registry of this Court.

4. We have heard learned counsel for the parties and perused

the written submissions and material on record. The primary

question to be considered is as to whether, in the instant facts, the

Crl.Appeal No.5305/2024 Page 8 of 21

accused has been able to discharge the burden under Sections 118

(a) and 139 of the N.I. Act and whether the High Court was

justified in overturning the order of acquittal passed by the Trial

Court.

5. The N.I. Act raises two presumptions, one under Section

118; and the other in Section 139 thereof. The Sections read as

under :

“118. Presumptions as to negotiable instruments.—

Until the contrary is proved, the following presumptions

shall be made:—

(a) 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;

x x x

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.”

6. Section 118 (a) assumes that every negotiable instrument

is made or drawn for consideration, while Section 139 creates a

presumption that the holder of a cheque has received the cheque

in discharge of a debt or liability. Presumptions under both are

rebuttable, meaning they can be rebutted by the accused by

raising a probable defence. This Court through various

Crl.Appeal No.5305/2024 Page 9 of 21

pronouncements, has consistently clarified the nature and extent

of these presumptions and the standard of proof required by the

accused to rebut them. We may consider a few such

pronouncements.

6.1. In Mallavarapu Kasivisweswara Rao v.

Thadikonda Ramulu Firm

7

, this Court observed as under :

“17. Under Section 118(a) of the Negotiable Instruments

Act, the court is obliged to presume, until the contrary is

proved, that the promissory note was made for

consideration. It is also a settled position that the initial

burden in this regard lies on the defendant to prove the

non-existence of consideration by bringing on record

such facts and circumstances which would lead the court

to believe the non-existence of the consideration either

by direct evidence or by preponderance of probabilities

showing that the existence of consideration was

improbable, doubtful or illegal. In this connection,

reference may be made to a decision of this Court

in Bharat Barrel & Drum Mfg. Co. v. Amin Chand

Payrelal [(1999) 3 SCC 35] . In para 12 of the said

decision, this Court observed as under : (SCC pp. 50-51)

“12. Upon consideration of various

judgments as noted hereinabove, the

position of law which emerges is that once

execution of the promissory note is admitted,

the presumption under Section 118(a) would

arise that it is supported by a consideration.

Such a presumption is rebuttable. The

defendant can prove the non-existence of a

consideration by raising a probable defence.

If the defendant is proved to have discharged

the initial onus of proof showing that the

existence of consideration was improbable

or doubtful or the same was illegal, the onus

7

(2008) 7 SCC 655

Crl.Appeal No.5305/2024 Page 10 of 21

would shift to the plaintiff who will be

obliged to prove it as a matter of fact and

upon its failure to prove would disentitle him

to the grant of relief on the basis of the

negotiable instrument. The burden upon the

defendant of proving the non-existence of

the consideration can be either direct or by

bringing on record the preponderance of

probabilities by reference to the

circumstances upon which he relies. In such

an event, the plaintiff is entitled under law to

rely upon all the evidence led in the case

including that of the plaintiff as well. In case,

where the defendant fails to discharge the

initial onus of proof by showing the non-

existence of the consideration, the plaintiff

would invariably be held entitled to the

benefit of presumption arising under Section

118(a) in his favour. The court may not insist

upon the defendant to disprove the existence

of consideration by leading direct evidence

as the existence of negative evidence is

neither possible nor contemplated and even

if led, is to be seen with a doubt. The bare

denial of the passing of the consideration

apparently does not appear to be any

defence. Something which is probable has to

be brought on record for getting the benefit

of shifting the onus of proving to the

plaintiff. To disprove the presumption, the

defendant has to bring on record such facts

and circumstances upon consideration of

which the court may either believe that the

consideration did not exist or its non-

existence was so probable that a prudent man

would, under the circumstances of the case,

shall act upon the plea that it did not exist.”

From the above decision of this Court, it is pellucid that

if the defendant is proved to have discharged the initial

onus of proof showing that the existence of consideration

was improbable or doubtful or the same was illegal, the

Crl.Appeal No.5305/2024 Page 11 of 21

onus would shift to the plaintiff who would be obliged

to prove it as a matter of fact and upon its failure to prove

would disentitle him to the grant of relief on the basis of

the negotiable instrument. It is also discernible from the

above decision that if the defendant fails to discharge the

initial onus of proof by showing the non-existence of the

consideration, the plaintiff would invariably be held

entitled to the benefit of presumption arising under

Section 118(a) in his favour.”

(Emphasis Supplied)

6.2. In Kumar Exports v. Sharma Carpets

8

, this Court

examined the presumptions raised by the N.I. Act, and held

as follows :

“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”

8

(2009) 2 SCC 513

Crl.Appeal No.5305/2024 Page 12 of 21

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 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.

20. The accused in a trial under Section 138 of the Act

has two options. He can either show that consideration

and debt did not exist or that under the particular

circumstances of the case the non-existence of

consideration and debt is so probable that a prudent man

ought to suppose that no consideration and debt existed.

To rebut the statutory presumptions an accused is not

expected to prove his defence beyond reasonable doubt

as is expected of the complainant in a criminal trial. 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. Apart from

adducing direct evidence to prove that the note in

question was not supported by consideration or that he

had not incurred any debt or liability, the accused may

also rely upon circumstantial evidence and if the

circumstances so relied upon are compelling, the burden

Crl.Appeal No.5305/2024 Page 13 of 21

may likewise shift again on to the complainant. The

accused may also rely upon presumptions of fact, for

instance, those mentioned in Section 114 of the Evidence

Act to rebut the presumptions arising under Sections 118

and 139 of the Act.

21. The accused has also an option to prove the non-

existence of consideration and debt or liability either by

letting in evidence or in some clear and exceptional

cases, from the case set out by the complainant, that is,

the averments in the complaint, the case set out in the

statutory notice and evidence adduced by the

complainant during the trial. Once such 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 complainant and, thereafter, the

presumptions under Sections 118 and 139 of the Act will

not again come to the complainant's rescue.”

(Emphasis Supplied)

6.3. A three-Judge Bench of this Court in Rangappa

(supra) had the occasion to consider Section 139

elaborately. The Court reiterated that where the signature

on the cheque is acknowledged, a presumption has to be

raised that the cheque pertained to a legally enforceable debt

or liability, however, this presumption is of a rebuttal nature

and the onus is then on the accused to raise a probable

defence. It was further stated that :

“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

Crl.Appeal No.5305/2024 Page 14 of 21

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 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.

28. In the absence of compelling justifications, reverse

onus clauses usually impose an evidentiary burden and

not a persuasive burden. Keeping this in view, it is a

settled position that when an accused has to rebut the

presumption under Section 139, the standard of proof for

doing so is that of “preponderance of probabilities”.

Therefore, if the accused is able to raise a probable

defence which creates doubts about the existence of a

legally enforceable debt or liability, the prosecution can

fail. As clarified in the citations, the accused can rely on

the materials submitted by the complainant in order to

raise such a defence and it is conceivable that in some

cases the accused may not need to adduce evidence of

his/her own.”

6.4. T.S. Thakur J., (as his lordship then was) in his

supplementing opinion in Vijay v. Laxman

9

, observed as

under:

“20. The High Court has rightly accepted the version

given by the respondent-accused 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

9

(2013) 3 SCC 86

Crl.Appeal No.5305/2024 Page 15 of 21

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 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.”

6.5. This Court in the case of Baslingappa v.

Mudibasappa

10

, summarized the principles on

Sections 118(a) and 139 of the N.I. Act. The same is

reproduced with profit as under :

“25. We having noticed the ratio laid down by this Court

in the above cases on Sections 118(a) and 139, we now

summarise the principles enumerated by this Court in

following manner:

25.1. Once the execution of cheque is admitted Section

139 of the Act mandates a presumption that the cheque

was for the discharge of any debt or other liability.

10

(2019) 5 SCC 418

Crl.Appeal No.5305/2024 Page 16 of 21

25.2. The presumption under Section 139 is a rebuttable

presumption and the onus is on the accused to raise the

probable defence. The standard of proof for rebutting the

presumption is that of preponderance of probabilities.

25.3. To rebut the presumption, it is open for the accused

to rely on evidence led by him or the accused can also

rely on the materials submitted by the complainant in

order to raise a probable defence. Inference of

preponderance of probabilities can be drawn not only

from the materials brought on record by the parties but

also by reference to the circumstances upon which they

rely.

25.4. That it is not necessary for the accused to come in

the witness box in support of his defence, Section 139

imposed an evidentiary burden and not a persuasive

burden.

25.5. It is not necessary for the accused to come in the

witness box to support his defence.”

6.6. Recently, a coordinate Bench of this Court in

Rajaram v. Maruthachalam

11

, through Gavai J., observed

as under :

“27. It can thus be seen that this Court has held that once

the execution of cheque is admitted, Section 139 of

the N.I. Act mandates a presumption that the cheque was

for the discharge of any debt or other liability. It has

however been held that the presumption under Section

139 is a rebuttable presumption and the onus is on the

accused to raise the probable defence. The standard of

proof for rebutting the presumption is that of

preponderance of probabilities. It has further been held

that to rebut the presumption, it is open for the accused

to rely on evidence led by him or the accused can also

rely on the materials submitted by the complainant in

order to raise a probable defence. It has been held that

11

(2023) 16 SCC 125

Crl.Appeal No.5305/2024 Page 17 of 21

inference of preponderance of probabilities can be drawn

not only from the materials brought on record by the

parties but also by reference to the circumstances upon

which they rely.”

7. The position of law, as is evident from the above, is clear.

8. Now, in the instant facts, let us consider whether the

presumption stands sufficiently rebutted or not. In the cross-

examination of DW-1 (appellant) it has been stated that he had

issued two blank signed cheques for availing the hand loan of

Rs.3,50,000/- (three lakh fifty thousand rupees) from the

complainant. Further, the accused in the affidavit, submitted in

the Trial Court, stated as under:

“At that time I have approached the complainant for

hand loan of Rs. 3,50,000/- (Rupees Three Lakhs Fifty

Thousand only). At the time of giving the above said

amount the complainant was took two blank cheques

signed by me for security purpose and both the cheques

were drawn on Canara Bank, Sampangi Ramanagara,

Bangalore- 560 027.”

9. Very clearly, therefore, it can be seen that the cheques

issued were against an enforceable debt and held by the

complainant as such, even though there was no paperwork to that

effect. The onus, as such, was shifted upon the other party, i.e.,

the accused, to raise a probable defence against such

presumption.

10. A perusal of the record reveals the following aspects which

constitute the accused’s ‘probable defence’ :

Crl.Appeal No.5305/2024 Page 18 of 21

(a) Both parties were friends and the money exchanged

hands only as a hand loan;

(b) The movie, because of which the loan was allegedly

taken, was produced, completed and exhibited many

years prior to the cheque being presented for

realisation, i.e., 2003 and 2008, respectively;

(c) The parties to the dispute entered into a Memorandum

of Understanding dated 29

th

March 2008 which

recorded that the accused took Rs.3,50,000/- and in

payment thereof, the former gave, inclusive of interest,

Rs.5,50,000/-;

(d) The accused had lodged a complaint with the police on

24

th

July 2008 asking the authorities to take steps to

have the complainant return the said two cheques to

him, since the loan taken by the accused was returned

with interest, totalling to Rs.5,50,000/- (five lakh fifty

thousand rupees);

(e) The cheque, a copy of which is appended as Annexure-

P3, was dated 14

th

October 2008. The date of dishonour

was 20

th

October 2008, as is clear from Annexure-P7,

i.e., the complaint under Section 200 CrPC. Evidently,

the presentation and subsequent dishonour were both

after the lodging of the police complaint by the

accused.

Crl.Appeal No.5305/2024 Page 19 of 21

11. Considering the sum total of the above, we find that the

probable defence on the part of the accused has been established.

Once such a defence is established, the burden again shifts upon

the complainant to now establish his case beyond a reasonable

doubt, for after all, the effect of Section 138 of the N.I. Act is a

criminal conviction. Reference may be made to Rajesh Jain v.

Ajay Singh

12

and, more particularly Para 44 thereof, which reads

as under :

“44. Therefore, in fine, it can be said that once the

accused adduces evidence to the satisfaction of the Court

that on a preponderance of probabilities there exists no

debt/liability in the manner pleaded in the complaint or

the demand notice or the affidavit-evidence, the burden

shifts to the complainant and the presumption

“disappears” and does not haunt the accused any longer.

The onus having now shifted to the complainant, he will

be obliged to prove the existence of a debt/liability as a

matter of fact and his failure to prove would result in

dismissal of his complaint case. Thereafter, the

presumption under Section 139 does not again come to

the complainant's rescue. Once both parties have

adduced evidence, the Court has to consider the same

and the burden of proof loses all its importance.

[Basalingappa v. Mudibasappa {Basalingappa v. Mudi

basappa, (2019) 5 SCC 418 : (2019) 2 SCC (Cri) 571 :

AIR 2019 SC 1983] ; see also, Rangappa v. Sri

Mohan [Rangappa v. Sri Mohan, (2010) 11 SCC 441 :

(2010) 4 SCC (Civ) 477 : (2011) 1 SCC (Cri) 184 : AIR

2010 SC 1898}]”

12

(2023) 10 SCC 148

Crl.Appeal No.5305/2024 Page 20 of 21

12. In our considered view, the complainant has failed to

discharge this burden. In his cross-examination, the complainant

has stated as follows :

“During the year 2002, I have paid loan to the accused

on 7-8 times. I have maintained the account on which

dates I have paid the loan to the accused. In that regard,

I have subscribed my signatures in the book which was

with the accused. Accused issued cheques for having

obtained 7-8 times loan from me. I have paid the amount

to the accused two times in my house and 5-6 times in

my lodge. I have not obtained the receipt for having

received the loan amount by the accused.”

It has also come on record that the cheque, subject matter of

controversy, was given to the complainant in the presence of

common well-wishers. However, none of the above statements

stands scrutiny. The alleged well-wishers who could have

proved the discussion and context in which the cheque was given,

remained unexamined. As stated by the complainant himself,

there is no official record, such as income tax documents which

would show that such an amount was extended by way of a loan

to the accused, neither have the books of account, which the

complainant allegedly maintained, being produced to evidence

the seven or eight transactions inter se the parties totalling the

claimed amount.

13. Keeping in view the above factors, it cannot be said that

the complainant was able to discharge the burden once it had

Crl.Appeal No.5305/2024 Page 21 of 21

shifted back upon him, with the accused having discharged the

burden of Sections 118 and 139 of the N.I. Act.

14. Consequent to the above discussion, we are of the view

that the Trial Court was correct in recording a finding of acquittal

in favour of the accused and reversal thereof by the High Court

in terms of the impugned judgment, with particulars as in Para 1,

was unjustified. As a result, the appeal is allowed.

15. The judgment of the High Court is set aside, and that of

the Trial Court is hereby restored.

16. The amount deposited in the Registry of this Court in

compliance with the orders dated 15

th

March 2021 and 12

th

April

2021, be released to the appellant along with the interest accrued

thereon.

Pending application(s), if any, shall stand disposed of.

...................................J.

(PANKAJ MITHAL)

...................................J.

(SANJAY KAROL)

New Delhi;

22

nd

April, 2025.