UTTAM RAM versus DEVINDER SINGH HUDAN & ANR.

[2019] 13 S.C.R. 425

UTTAM RAM

DEVINDER SINGH HUDAN & ANR.

(Criminal Appeal No. 1545 of 2019)

OCTOBER 17, 2019

[L. NAGESWARA RAO AND HEMANT GUPTA, JJ.]

Negotiable Instruments Act, 1881 – s.138 & ss.118, 139 –Respondent purchased apple crops of various growers which wascarried out through ropeway to the roadhead for furthertransportation – Packing material was procured by the respondentthrough his authorised agent on credit basis from the appellant –Accounts finally settled between the appellant and the respondent’sauthorised agent and Rs.5,38,856/- was found recoverable – Chequeissued – Dishonoured– Complaint filed by the appellant – Dismissed– Upheld by the High Court – On appeal, held: Dishonour of chequecarries statutory presumption of consideration – Holder of chequein due course is required to prove that the cheque was issued by theaccused and that when the same presented, it was not honoured –Since there is statutory presumption of consideration, the burden ison the accused to rebut the presumption that the cheque was issuednot for any debt or other liability – In the present case, once theagent of the respondent admitted the settlement of due amount, inabsence of any other evidence the Trial Court or the High Courtcould not dismiss the complaint only on account of discrepancies inthe cartons, packing material or the rate to determine the totalliability, as if the appellant was proving his debt before the CivilCourt, when the written document crystalized the amount due –Respondent failed to lead any evidence to rebut the statutorypresumption, finding returned by both the Trial Court and theHigh Court –Therefore, it is presumed that the cheques in questionwere drawn for consideration and the appellant received the samein discharge of an existing debt – Respondent guilty of dishonourof cheque for an offence u/s.138 – Order passed by the High Court,set aside – Respondent to pay Rs.10,77,712/- as fine i.e. twice ofthe amount of cheque of Rs.5,38,856/- and litigation cost of

ARs.1,00,000/- within three months – In case of failure to pay thesame, the respondent to undergo imprisonment for six months – Codeof Criminal Procedure, 1973 – s.313.

Allowing the appeal, the Court

HELD: 1.1 The approach of the Trial Court and that of theBHigh Court is perverse; irrational as well as suffers from materialillegality and irregularity, which cannot be sustained in complaintfiled under Section 138 Negotiable Instruments Act, 1881. Anegotiable instrument including cheque carries presumption ofconsideration in terms of Section 118(a) and under Section 139Cof the Act. The Trial Court and the High Court proceeded as if,the appellant is to prove debt before civil court wherein, theplaintiff is required to prove his claim on the basis of evidence tobe laid in support of his claim for the recovery of the amount due.A dishonour of cheque carries statutory presumption ofconsideration. The holder of cheque in due course is required toDprove that the cheque was issued by the accused and that whenthe same presented, it was not honoured. Since there is statutorypresumption of consideration, the burden is on the accused torebut the presumption that the cheque was issued not for anydebt or other liability. [Paras 18-20] [432-D, E-H; 433-A-B]

1.2 There is the mandate of presumption of considerationin terms of the provisions of the Act. The onus shifts to theaccused on proof of issuance of cheque to rebut the presumptionthat the cheque was issued not for discharge of any debt or liabilityin terms of Section 138 of the Act. Once the agent of theFrespondent has admitted the settlement of due amount and inabsence of any other evidence the Trial Court or the High Courtcould not dismiss the complaint only on account of discrepanciesin the determination of the amount due or oral evidence in theamount due when the written document crystalizes the amountdue for which the cheque was issued. [Paras 21, 27] [433-C;G439-B-C]1.3 The accused has failed to lead any evidence to rebutthe statutory presumption, finding returned by both the TrialCourt and the High Court. Both Courts not only erred in law butalso committed perversity when the due amount is said to be

disputed only on account of discrepancy in the cartons, packingmaterial or the rate to determine the total liability as if the appellantwas proving his debt before the Civil Court. Therefore, it ispresumed that the cheques in question were drawn forconsideration and the holder of the cheques i.e., the appellantreceived the same in discharge of an existing debt. Cross-examination on the prosecution witness is not sufficient to rebutthe presumption of consideration. Mere discrepancies in thestatement in respect of the cartons, trays or the packing materialor the rate charged will not rebut the statutory presumption whichis proved by CW3. The conclusion drawn by the Trial Court andthe High Court to acquit the respondent is not only illegal butbeing perverse is totally unsustainable in law. Order passed bythe High Court is set aside. The respondent is held guilty ofdishonour of cheque for an offence under Section 138 of the Act.and shall pay Rs.10,77,712/- as fine i.e. twice of the amount ofcheque of Rs.5,38,856/- and cost of litigation of Rs.1,00,000/-within three months. If the amount of fine and the costs are notpaid within three months, the respondent shall undergoimprisonment for period of six months. [Paras 28, 32-34]

[439-C-E; 440-E-G; 441-A-B]

Kumar Exports v. Sharma Carpets (2009) 2 SCC 513 :[2008] 17 SCR 572 – distinguished.

M. S. Narayana Menon v. State of Kerala(2006) 6 SCC39 : [2006] 3 Suppl. SCR 124 – held inapplicable.

Hiten P. Dalal v. Bratindranath Banerjee(2001) 6 SCC16 : [2001] 3 SCR 900 ;Rangappa v. Sri Mohan (2010)11 441 : [2010] 6 SCR 507 ; Kishan Rao v.Shankargouda(2018) 8 SCC 165 : [2018] 5 SCR 69 ;Bir Singh v. Mukesh Kumar (2019) 4 SCC 197 : [2019]2 SCR 24 ;Rohitbhai Jivanlal Patel v. State of Gujaratand Another AIR 2019 SC 1876;Vijay v. Laxman andanother (2013) 3 SCC 86 : [2013] 4 SCR 80 ;M. S.Narayana Menon and K. Prakashan v. P. K. Surenderan(2008) 1 SCC 258 : [2007] 10 SCR 1010 ;John K.Abraham v. Simon C. Abraham (2014) 2 SCC 236 :

[2013] 12 SCR 753 – referred to.

ACase Law Reference

CRIMINAL APPELLATE JURISDICTION : Criminal AppealDNo. 1545 of 2019.

From the Judgment and Order dated 17.12.2018 of the High Courtof Himachal Pradesh, Shimla in Crl. Appeal No. 431 of 2018.

B. S. Banthia, Sachin Daga, Rajesh Kandari, Advs. for theAppellant.E

Abhimanyu Jhamba, Hemlata Ranga, Ms. R.A. ThonanadThangal, Hatneimawi, Ashish Jhamb, Samir Ali Khan, Ms. Ashleen Kaur,Saloj Smaji, Advs. for the Respondent.

Ms. Liz Mathew, Adv.(AC).FThe Judgment of the Court was delivered by

HEMANT GUPTA, J.

1. The appellant is aggrieved against an order passed by the HighCourt of Himachal Pradesh, Shimla on 17.12.2018, whereby, the orderGof dismissal of complaint under Section 138 of the Negotiable InstrumentsAct, 1881[1] by the learned Trial Court was not interfered with.

2. None has put appearance on behalf of respondent No. 1, despiteservice. Therefore, on 16.09.2019, this Court requested Ms. Liz Mathew,Advocate to assist the Court on behalf of respondent No.1.

H1 for short the “Act”

3. The appellant owns apple orchard in District Kullu, HimachalPradesh. The appellant also used to supply apple cartons, trays andother packing materials to other apple growers on cash and credit basis.He also owns commercial ropeway which connects various other appleorchards with the roadhead as facility to the growers to carry theirproduce from the orchards to the market.

4. In the year 2011, respondent No. 1 purchased apple crops ofvarious growers which was carried out through ropeway to the roadheadfor further transportation. The packing material was procured by therespondent on credit basis from the appellant through his authorised agentPrem Chand son of Kumat Ram. In the month of September 2011, theaccounts were finally settled between the appellant and the authorisedagent of respondent No. 1 and sum of Rs.5,38,856/- was foundrecoverable. cheque No. 942816 dated 2.10.2011 was issued for thesaid amount, but the said cheque was returned by the bank on 11.10.2011on presentation with the endorsement “insufficient funds”.

5. The appellant thereafter served legal notice on 27.10.2011under registered cover sent to the official and home addresses ofrespondent No. 1. But, in spite of receipt of the notice of 27.10.2011, nopayment was made which led to filing of complaint by the appellant.

6. The appellant in his complaint stated that total amount ofRs.7,86,300/- was found payable on account of bags, gunny bags andpacking materials and after adjusting the payment of Rs. 2,47,444/-, anamount of Rs. 5,38,856/- was found to be payable to the appellant. Theappellant has asserted that the said cheque No. 942816 dated 2.10.2011was issued by the respondent.

7. In support of the complaint, apart from producing CW1 DhirajKumar who produced the bank record of dishonour of cheque, theappellant examined himself as CW2 and also produced Prem Chand sonof Kumat Ram, the agent of respondent as CW3. The respondent didnot appear in witness box but examined Head Constable Ranjit SinghDW1.

8. Learned Trial Court dismissed the complaint for the reasonthat cheque amount was more than the amount alleged on the due datewhen cheque was presented. Therefore, the cheque cannot be said tobe drawn towards discharge of whole or in part of any debt.

A9. The appellant in his affidavit reiterated his assertions as weregiven in the complaint. In the cross-examination conducted by therespondent, the appellant stated that cheque in Exh.CW1/B was filledup by the respondent in October 2011 and that cheque was given by therespondent himself to him. Three persons, he himself, accused and theagent of the respondent sat together. He deposed that he was given upBa filled-up cheque. He denied the suggestion that the accused did notissue the cheque Exh.CW1/B. He also denied the suggestion that PremChand misused the cheque of the accused because he has stolen thesigned cheque book of the accused and that he has filled up blankcheque.

10. CW3 Prem Chand deposed that the respondent purchased,on contract, apple in their area from apple growers including from theappellant for further sending them to Shimla, Chandigarh and Delhi. Hedeposed that appellant had to recover an amount of Rs.7,86,300/- andafter adjustment of Rs.2,47,444/- the balance amount was payable by

Dthe respondent for which the settlement was arrived at in his presencewhen cheque No. 942816 was issued for sum of Rs.5,38,856/- dated2.10.2011.

11. In the cross-examination, he deposed that he used to keep anaccount of all the packing materials. He was suggested that the accusedhas kept cheque with him and he used to give to the growers. However,Ehe categorically deposed that cheque Exh.CW1/B was given in hispresence by the accused in Kuthwa. The account was settled prior togiving of cheque. He denied the suggestion that he lodged report inpolice about missing cheque book in the year 2011. He deposed thatthe respondent has given cheque book by signing them. He denied theFsuggestion that the cheque in question was filled up as he colluded withthe appellant. The respondent in his statement under Section 313 of theCode of Criminal Procedure[2] denied the prosecution case. The relevantquestion No. 9 and the answer given by the respondent are as under:

“Q.9 Why the present case has been made out against youaccused?G

Ans. This is false case. My cheque has been misused.”

12. DW1-Ranjit, Head Constable examined by the accused, hasproduced an entry dated 09.09.2011 regarding loss of his cheque bookcontaining cheque Nos. 942801-942820.

H2 for short the “Code”

13. The learned Trial Court returned finding that mere productionof entry Exh. DW1/A is not sufficient to prove that he has not issued thesaid cheque as such report could have been made with intention to createfalse evidence of the loss of cheque book. The court found that in factif the cheque has been lost, the accused had several opportunities tolodge FIR qua the misuse of said cheque as he has signedacknowledgement of notice Exh.CW1/G. The learned Trial Court recordedthe following findings:

“….Thus, it stands proved beyond reasonable doubt that the chequeExt. CW1/B was issued by the accused in favour of thecomplainant. Further, the dishonor of the cheque has also beenproved through return memo Ext. CW1/C. Further the legaldemand notice was also issued within period of 30 days fromthe date of dishnour. Thereafter, the present complaint has beenfilled within the period of limitation.”

14. Still further, the learned Trial Court held the presumption thatthe amount of cheque is legally enforceable debt, has not been rebuttedwhen the following finding was returned:

“….Neither any meaningful cross-examination of the complainanthas been done on this point of his financial capacity. Accordingly,the aforesaid presumption has not been rebutted by the accusedby proving that the complainant did not have the requisite financialcapacity. Accordingly, the said defence is rejected.”

15. However, the learned Trial Court found contradiction in thenumber of cartons in the complaint as well as in the statement of theappellant. It was found that the cheque amount is more than the amountallegedly due on the date when cheque was presented, therefore, thecomplaint was dismissed. It held that there are three different versionsas to the number of apple cartons, therefore, the alleged amount wouldhave been less than the amount claimed by the complainant.

16. In an appeal, the High Court relied upon judgments reportedas Hiten P. Dalal v. Bratindranath Banerjee[3],Kumar Exports v.Sharma Carpets[4] and Rangappa v. Sri Mohan[5]to hold that thecheque shall be presumed to be for consideration unless and until, the

3 (2001) 6 SCC 16

4 (2009) 2 SCC 513

5 (2010) 11 441

ACourt forms belief that the consideration does not exist or considersthe non-existence of consideration was so probable that prudent manwould under no circumstances of the case, act upon the plea that theconsideration does not exist. The High Court held as under:

“21. Now, adverting to the facts of the case, it would be noticedBthat respondent No. had raised various defences, but, the samewere turned down by the learned Magistrate. However, it wasonly on the basis of the contradictions that too in the evidence ledby the appellant himself that respondent No. 1 was ordered to beacquitted.”

C17. The High Court again referred to the contradictions regardingempty apple cartons and the rate per carton, to hold that the appellanthas failed to prove guilt of the respondent beyond reasonable doubt.

18. We find that the approach of the learned Trial Court and thatof the High Court is perverse; irrational as well as suffers from materialDillegality and irregularity, which cannot be sustained in complaint filedunder Section 138 of the Act.

19. negotiable instrument including cheque carries presumptionof consideration in terms of Section 118(a) and under Section 139 of theAct. Sections 118(a) and 139 read as under:

E“118. Presumptions as to negotiable instruments.- Untilthe contrary is proved, the following presumptions shall be made:—

(a) of consideration —that every negotiable instrument wasmade or drawn for consideration, and that every suchinstrument, when it has been accepted, indorsed, negotiated orFtransferred, was accepted, indorsed, negotiated or transferredfor consideration;….

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139. Presumption in favour of holder.—It shall be presumed,unless the contrary is proved, that the holder of cheque receivedGthe cheque of the nature referred to in section 138 for the discharge,in whole or in part, of any debt or other liability.”

20. The Trial Court and the High Court proceeded as if, theappellant is to prove debt before civil court wherein, the plaintiff is

required to prove his claim on the basis of evidence to be laid in supportof his claim for the recovery of the amount due. dishonour of chequecarries statutory presumption of consideration. The holder of chequein due course is required to prove that the cheque was issued by theaccused and that when the same presented, it was not honoured. Sincethere is statutory presumption of consideration, the burden is on theaccused to rebut the presumption that the cheque was issued not for anydebt or other liability.

21. There is the mandate of presumption of consideration in termsof the provisions of the Act. The onus shifts to the accused on proof ofissuance of cheque to rebut the presumption that the cheque was issuednot for discharge of any debt or liability in terms of Section 138 of theAct which reads as under:

“138. Dishonour of cheque for insufficiency, etc., of fundsin the account. — Where any cheque drawn by person on anaccount maintained by him with banker for payment of anyamount of money to another person from out of that account forthe discharge, in whole or in part, of any debt or other liability, isreturned by the bank unpaid, either because of the amount ofmoney standing to the credit of that account is insufficient to honourthe cheque or that it exceeds the amount arranged to be paidfrom that account by an agreement made with that bank, suchperson shall be deemed to have committed an offence andshall….”

22. In Kumar Exports, it was held that mere denial of existenceof debt will not serve any purpose but accused may adduce evidence torebut the presumption. This Court held as under:

“20. The accused in trial under Section 138 of the Act has twooptions. He can either show that consideration and debt did notexist or that under the particular circumstances of the case thenon-existence of consideration and debt is so probable that aprudent man ought to suppose that no consideration and debtexisted. To rebut the statutory presumptions an accused is notexpected to prove his defence beyond reasonable doubt as isexpected of the complainant in criminal trial. The accused mayadduce direct evidence to prove that the note in question was not

Asupported by consideration and that there was no debt or liabilityto be discharged by him. However, the court need not insist inevery case that the accused should disprove the non-existence ofconsideration and debt by leading direct evidence because theexistence of negative evidence is neither possible nor contemplated.At the same time, it is clear that bare denial of the passing ofBthe consideration and existence of debt, apparently wouldnot serve the purpose of the accused. Something which isprobable has to be brought on record for getting the burdenof proof shifted to the complainant. To disprove thepresumptions, the accused should bring on record such factsCand circumstances, upon consideration of which, the courtmay either believe that the consideration and debt did notexist or their non-existence was so probable that prudentman would under the circumstances of the case, act upon theplea that they did not exist. Apart from adducing direct evidenceto prove that the note in question was not supported byDconsideration or that he had not incurred any debt or liability, theaccused may also rely upon circumstantial evidence and if thecircumstances so relied upon are compelling, the burden maylikewise shift again on to the complainant. The accused may alsorely upon presumptions of fact, for instance, those mentioned inESection 114 of the Evidence Act to rebut the presumptions arisingunder Sections 118 and 139 of the Act.”

(emphasis supplied)

23. In judgment reported as Kishan Rao v. Shankargouda[6],this Court referring to Kumar Exports and Rangappa returned theFfollowing findings:

“22. Another judgment which needs to be looked intois Rangappa v. Sri Mohan [Rangappa v. Sri Mohan, (2010) 11SCC 441 : (2010) 4 SCC (Civ) 477 : (2011) 1 SCC (Cri) 184] . Athree-Judge Bench of this Court had occasion to examine theGpresumption under Section 139 of the 1881 Act. This Court in theaforesaid case has held that in the event the accused is able toraise probable defence which creates doubt with regard to theexistence of debt or liability, the presumption may fail. Followingwas laid down in paras 26 and 27: (SCC pp. 453-54)

H6 (2018) 8 SCC 165

“26. In light of these extracts, we are in agreement with therespondent claimant that the presumption mandated by Section139 of the Act does indeed include the existence of legallyenforceable debt or liability. To that extent, the impugnedobservations in Krishna Janardhan Bhat [KrishnaJanardhan Bhat v. Dattatraya G. Hegde, (2008) 4 SCC 54 :(2008) 2 SCC (Cri) 166] , may not be correct. However, thisdoes not in any way cast doubt on the correctness of thedecision in that case since it was based on the specific factsand circumstances therein. As noted in the citations, this is ofcourse in the nature of rebuttable presumption and it is opento the accused to raise defence wherein the existence of alegally enforceable debt or liability can be contested. However,there can be no doubt that there is an initial presumption whichfavours the complainant.27. Section 139 of the Act is an example of reverse onusclause that has been included in furtherance of the legislativeobjective of improving the credibility of negotiable instruments.While Section 138 of the Act specifies strong criminal remedyin relation to the dishonour of cheques, the rebuttablepresumption under Section 139 is device to prevent unduedelay in the course of litigation. However, it must beremembered that the offence made punishable by Section 138can be better described as regulatory offence since thebouncing of cheque is largely in the nature of civil wrongwhose impact is usually confined to the private parties involvedin commercial transactions. In such scenario, the test ofproportionality should guide the construction and interpretationof reverse onus clauses and the defendant-accused cannot beexpected to discharge an unduly high standard of proof.”

24. In judgment reported as Bir Singh v. Mukesh Kumar[7], thisCourt held that presumption under Section 139 of the Act is presumptionof law. The Court held as under:

“20. Section 139 introduces an exception to the general rule as tothe burden of proof and shifts the onus on the accused. Thepresumption under Section 139 of the Negotiable Instruments Actis presumption of law, as distinguished from presumption of facts.

7 (2019) 4 SCC 197

APresumptions are rules of evidence and do not conflict with thepresumption of innocence, which requires the prosecution to provethe case against the accused beyond reasonable doubt. Theobligation on the prosecution may be discharged with the help ofpresumptions of law and presumptions of fact unless the accusedadduces evidence showing the reasonable possibility of the non-Bexistence of the presumed fact as held in Hiten P. Dalal [HitenP. Dalal v. Bratindranath Banerjee, (2001) 6 SCC 16 : 2001SCC (Cri) 960] .

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C33. meaningful reading of the provisions of the NegotiableInstruments Act including, in particular, Sections 20, 87 and 139,makes it amply clear that person who signs cheque and makesit over to the payee remains liable unless he adduces evidence torebut the presumption that the cheque had been issued for paymentof debt or in discharge of liability. It is immaterial that theDcheque may have been filled in by any person other than thedrawer, if the cheque is duly signed by the drawer. If the chequeis otherwise valid, the penal provisions of Section 138 would beattracted.

36. Even blank cheque leaf, voluntarily signed and handed overby the accused, which is towards some payment, would attractpresumption under Section 139 of the Negotiable Instruments Act,in the absence of any cogent evidence to show that the chequewas not issued in discharge of debt.”

25. In other judgment reported as Rohitbhai Jivanlal Patel v.State of Gujarat and Another[8] this Court held as under:

“18. So far the question of existence of basic ingredients fordrawing of presumption under Sections 118 and 139 the NI Act isconcerned, apparent it is that the accused-appellant could not denyGhis signature on the cheques in question that had been drawn infavour of the complainant on bank account maintained by theaccused for sum of Rs. 3 lakhs each. The said cheques were

presented to the Bank concerned within the period of their validityand were returned unpaid for the reason of either the balancebeing insufficient or the account being closed. All the basicingredients of Section 138 as also of Sections 118 and 139 areapparent on the face of the record. The Trial Court had alsoconsciously taken note of these facts and had drawn the requisitepresumption. Therefore, it is required to be presumed that thecheques in question were drawn for consideration and the holderof the cheques i.e., the complainant received the same in dischargeof an existing debt. The onus, therefore, shifts on the accused-appellant to establish probable defence so as to rebut such apresumption.”

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20. On the aspects relating to preponderance of probabilities, theaccused has to bring on record such facts and such circumstanceswhich may lead the Court to conclude either that the considerationdid not exist or that its nonexistence was so probable that prudentman would, under the circumstances of the case, act upon theplea that the consideration did not exist. This Court has, time andagain, emphasized that though there may not be sufficient negativeevidence which could be brought on record by the accused todischarge his burden, yet mere denial would not fulfil therequirements of rebuttal as envisaged under Section 118 and 139of the NI Act…..

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32. The result of discussion in the foregoing paragraphs is thatthe major considerations on which the Trial Court chose to proceedclearly show its fundamental error of approach where, even afterdrawing the presumption, it had proceeded as if the complainantwas to prove his case beyond reasonable doubt. Such being thefundamental flaw on the part of the Trial Court, the High Courtcannot be said to have acted illegally or having exceeded itsjurisdiction in reversing the judgment of acquittal. As noticedhereinabove, in the present matter, the High Court hasconscientiously and carefully taken into consideration the viewsof the Trial Court and after examining the evidence on record as

Aa whole, found that the findings of the Trial Court are vitiated byperversity. Hence, interference by the High Court was inevitable;rather had to be made for just and proper decision of the matter.”

26. In view of the judgments reported to above, we find that therespondent has not rebutted the presumption of consideration in issuingBthe cheque on 2.10.2011 inter alia for the following reasons:

1.Statement of the CW3, that he was not an agent of therespondent, has not been challenged by the respondentin the cross examination.

2.The statement of the appellant as CW2 that the chequewas handed over by the respondent personally remainsunchallenged.

3.The respondent has not denied even in his statementthat the cheque was not issued by him. The crossexamination of the witnesses produced by the appellantalso does not show that the signatures on the cheque byhim have not been disputed.

4.The respondent relies upon entry recorded with thepolice on 09.09.2011 that the cheque book was lost.However, the respondent has not lodged any FIR inrespect of loss of cheque, even after the notice ofdishonour of cheque was received by him on 27.10.2011.The mere entry is not proof of loss of cheque as is foundby the learned Trial Court itself as it is self-serving reportto create evidence to avoid payment of cheque amount.

F5.The respondent has not appeared as witness to provethe fact that the cheque book was lost or that chequewas not issued in discharge of any debt or liability.

6.The statement of accused under Section 313 of the Codeis only to the effect that the cheque has been misused.There is no stand in the statement that the cheque bookwas stolen.

7.The statement of accused under Section 313 is not asubstantive evidence of defence of the accused but only

an opportunity to the accused to explain the incriminatingcircumstances appearing in the prosecution case ofaccused. Therefore, there is no evidence to rebut thepresumption that the cheque was issued forconsideration.

27. Once the agent of the respondent has admitted the settlementof due amount and in absence of any other evidence the Trial Court orthe High Court could not dismiss the complaint only on account ofdiscrepancies in the determination of the amount due or oral evidence inthe amount due when the written document crystalizes the amount duefor which the cheque was issued.

28. The accused has failed to lead any evidence to rebut thestatutory presumption, finding returned by both the Trial Court and theHigh Court. Both Courts not only erred in law but also committedperversity when the due amount is said to be disputed only on account ofdiscrepancy in the cartons, packing material or the rate to determine thetotal liability as if the appellant was proving his debt before the CivilCourt. Therefore, it is presumed that the cheques in question were drawnfor consideration and the holder of the cheques i.e., the appellant receivedthe same in discharge of an existing debt. The onus, thereafter, shifts onthe accused-appellant to establish probable defence so as to rebutsuch presumption, which onus has not been discharged by therespondent.

29. Learned counsel for the respondent has referred to thejudgment reported in M. S. Narayana Menon v. State of Kerala[9]thatevidence adduced by the complainant can be relied upon to rebut thepresumption of consideration. However, said judgment has no applicabilityto the facts of the present case as the Trial Court has found that thepresumption is not rebutted but still the Trial Court dismissed the complaintfor the reason that the appellant has failed to prove the amount mentionedin the cheque as due amount. Once the cheque is proved to be issued itcarries statutory presumption of consideration. Then the onus is on therespondent to disprove the presumption at which the respondent hasmiserably failed.

30. In Kumar Exports evidence to rebut the presumption wasled and accepted by the Court. In these circumstances, it was held that

Athe burden shifts back to the complainant and the presumption under theAct will not again come to his rescue. However, in the present case, thepresumption of consideration has not been rebutted by the respondenteven on the basis of the evidence laid by the appellant. The difference inthe number of cartons supplied or the rate charged is not relevant when

the accounts were settled in writing to rebut the presumption ofBconsideration of issuance of cheque.

31. In Vijay v. Laxman and another[10] this Court found gravediscrepancies in the case of the complainant and that no case is madeout for when the High Court had set aside the conviction on the basis ofclearevidence giving rise to the perverse findings.C

32. Learned counsel appearing for the respondent also referredto M. S. Narayana Menon and K. Prakashan v. P. K. Surenderan[11]that if two views are possible, the appellate court shall not reverse ajudgment of acquittal only because another view is possible to be taken.Learned counsel also relies upon judgment reported as John K.DAbraham v. Simon C. Abraham[12] that mere fact that the statutorynotice was not replied cannot prejudice to the case of the respondent.We do not find any merit in the arguments raised by the learned counselfor the respondent. In fact, the findings recorded by the courts beloware total misreading of the statutory provisions more so when theErespondent has not led any evidence to rebut the presumption ofconsideration. Cross-examination on the prosecution witness is notsufficient to rebut the presumption of consideration. Mere discrepanciesin the statement in respect of the cartons, trays or the packing materialor the rate charged will not rebut the statutory presumption which isproved by CW3 Prem Chand.F33. The conclusion drawn by the Trial Court and the High Courtto acquit the respondent is not only illegal but being perverse is totallyunsustainable in law. Before concluding, we would like to put on recordthat Ms. Mathew has ably assisted this Court in canvassing that theorder passed by the High Court does not warrant any interference in theGpresent appeal against acquittal.

10 (2013) 3 SCC 86

11 (2008) 1 SCC 258

H12 (2014) 2 SCC 236

34. Consequently, the present appeal is allowed, order passed bythe High Court is set aside. The respondent is held guilty of dishonour ofcheque for an offence under Section 138 of the Act. The respondentshall pay Rs.10,77,712/- as fine i.e. twice of the amount of cheque ofRs.5,38,856/- and cost of litigation of Rs.1,00,000/- within three months.If the amount of fine and the costs are not paid within three months, therespondent shall undergo imprisonment for period of six months.

Divya Pandey

Appeal allowed.