BIR SINGH versus MUKESH KUMAR

[2019] 2 S.C.R. 24

BIR SINGH

MUKESH KUMAR

(Criminal Appeal Nos. 230-231 of 2019)

BFEBRUARY 06, 2019

[R. BANUMATHI AND INDIRA BANERJEE, JJ.]

Negotiable Instruments Act, 1881:

s.138 and 139 – Dishonour of cheque for insufficient funds– Conviction by trial Court as well as appellate court – In Revision,CHigh Court reversing the concurrent factual finding of courts belowand acquitting the accused holding that heavy burden was on thecomplainant to prove that blank cheque was given to him towardsrepayment of the loan which he had advanced to the accused – Onappeal, Supreme Court held: Section 139 introduces an exceptionDto the general rule as to the burden of proof and shifts the onus onthe accused i.e drawer of cheque – Section 139 is presumption oflaw as distinguished from presumption of facts – Presumptioncontemplated u/s. 139 is rebuttable presumption – reading of ss.20, 87 and 139 makes it amply clear that person who signs thecheque and makes it over to the payee remains liable unless heEadduces evidence to rebut the presumption – It was not the case ofthe accused that the cheque was signed under threat or coercion orthat the cheque was stolen – Existence of fiduciary relationshipbetween the payee of the cheque and its drawer, would not disentitlethe payee to the benefit of presumption u/s. 139 in the absence ofFevidence of exercise of undue influence or coercion – High Courtought not have acquitted the accused – Conviction affirmed –Evidence – Presumption.

s.138 – Object of – Held: Object of s.138 is to infusecredibility to negotiable instruments and to encourage and promotetheir use.G

Chapter XVII – Object of – Held: The object of Chapter XVIIis both punitive as also compensatory and restitutive – It provides asingle forum and single proceeding for enforcement of criminalliability and for enforcement of civil liability.

Evidence:

Presumption – Presumption of innocence is human right –However, the guilt may be established by recourse to presumptionsin law and presumptions in facts unless the accused adducesevidence showing the reasonable possibility of non-existence ofpresumed facts.

Code of Criminal Procedure, 1973:

Revisional jurisdiction – Scope of – Held: In exercise ofRevisional jurisdiction, High Court cannot upset concurrent factualfindings, in absence of perversity – It is not for the Revisional Courtto re-analyse and re-interpret the evidence on record.

Constitution of India:

Art. 136 – Jurisdiction under – Exercise of – In appeal againstacquittal – Held: If two views are possible, the Court in exercise ofjurisdiction u/Art.136 would ordinarily not interfere with judgmentof acquittal.

Precedent:

judgment is precedent for the issue which is raised anddecided – What is binding on all courts is what Supreme Court saysu/Art. 141 of the Constitution and not what it does u/Art. 142 –Constitution of India – Arts. 141 and 142.

Allowing the appeals, the Court

HELD: 1.1 The Trial Court and the Appellate Court arrivedat the specific concurrent factual finding that the cheque hadadmittedly been signed by the respondent-accused. The TrialCourt and the Appellate Court rejected the plea of the respondent-accused that the appellant-complainant had misused blanksigned cheque made over by the respondent-accused to theappellant-complainant for deposit of Income Tax, in view of theadmission of the respondent-accused that taxes were paid in cashfor which the appellant-complainant used to take payment fromthe respondent in cash. [Para 18][34-G-H, 35-A]

A1.2 In exercise of revisional jurisdiction under Section 482of the Criminal Procedure Code, the High Court does not, in theabsence of perversity, upset concurrent factual findings. It is notfor the Revisional Court to re-analyse and re-interpret theevidence on record. It is well established principle of law thatthe Revisional Court will not interfere even if wrong order isBpassed by court having jurisdiction, in the absence of ajurisdictional error. [Paras 19 and 20][35-B-C]

Southern Sales and Services and Others v. SauermilchDesign and Handels GMBH (2008) 14 SCC 457 :[2008] 14 SCR 130 – relied on.C

2.1 The object of Chapter XVII of the NegotiableInstruments Act is both punitive as also compensatory andrestitutive. It provides single forum and single proceeding forenforcement of criminal liability by reason of dishonour of chequeand for enforcement of the civil liability for realization of theDcheque amount, thereby obviating the need for the creditor tomove two different fora for relief. [Para 28][37-C]

2.2 Section 139 of Negotiable Instruments Act, mandatesthat unless the contrary is proved,it is to be presumed that theholder of cheque received the cheque of the nature referred toin Section 138, for the discharge, in whole or in part, of any debtEor other liability. The presumption contemplated under Section139 of the Negotiable Instruments Act, is rebuttablepresumption. However, the onus of proving that the cheque wasnot in discharge of any debt or other liability is on the accuseddrawer of the cheque. Section 139 introduces an exception toFthe general rule as to the burden of proof and shifts the onus onthe accused. The presumption under Section 139 of theNegotiable Instruments Act is presumption of law, asdistinguished from presumption of facts. Presumptions are rulesof evidence and do not conflict with the presumption of innocence,which requires the prosecution to prove the case against theGaccused beyond reasonable doubt. The obligation on theprosecution may be discharged with the help of presumptions oflaw and presumptions of fact unless the accused adducesevidence showing the reasonable possibility of the non-existenceof the presumed fact. Presumption of innocence is undoubtedly ahuman right. However the guilt may be established byHrecourse to presumptions in law and presumptions in facts.[Paras 21, 23 and 24][35-D-E, G, 36-A-C]

2.3 The onus to rebut the presumption under Section 139that the cheque has been issued in discharge of debt or liabilityis on the accused and the fact that the cheque might be postdated does not absolve the drawer of cheque of the penalconsequences of Section 138 of the Negotiable Instruments Act.A 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 evidenceto rebut the presumption that the cheque had been issued forpayment of debt or in discharge of liability. It is immaterialthat the cheque may have been filled in by any person other thanthe drawer, if the cheque is duly signed by the drawer. If thecheque is otherwise valid, the penal provisions of Section 138would be attracted. [Paras 36 and 37][38-G-H, 39-A-C]

2.4 If signed blank cheque is voluntarily presented to apayee, towards some payment, the payee may fill up the amountand other particulars. This in itself would not invalidate the chequeand would attract presumption under Section 139 of theNegotiable Instruments Act. The onus would still be on theaccused to prove that the cheque was not in discharge of debtor liability by adducing evidence. [Paras 38 and 40][39-C-D, E]

2.5 It is not the case of the respondent-accused that heeither signed the cheque or parted with it under any threat orcoercion. Nor is it the case of the respondent-accused that theunfilled signed cheque had been stolen. The existence of afiduciary relationship between the payee of cheque and itsdrawer, would not disentitle the payee to the benefit of thepresumption under Section 139 of the Negotiable InstrumentsAct, in the absence of evidence of exercise of undue influence orcoercion. [Para 39][39-D-E]

2.6 The High Court ought not to have acquitted therespondent-accused of the charge under Section 138 of theNegotiable Instruments Act. The conviction of the respondentunder Section 138 of the Negotiable Instruments Act is confirmed.However, the respondent-accused is sentenced only to fine, whichis enhanced to Rs.16 lakhs and shall be paid as compensation tothe appellant-complainant. [Paras 42 and 44][40-C, E]

AHiten P. Dalal v. Bratindranath Banerjee (2001) 6 SCC16 : [2001] 3 SCR 900; State of Madras v. VaidyanathaIyer AIR 1958 SC 61 : 1958 SCR 580; RanjitsingBrahmajeetsing Sharma v. State of Maharashtra andAnr (2005) 5 SCC 294 : [ 2005] 3 SCR 345; RajeshRanjan Yadav @ Pappu Yadav v. CBI through itsBDirector (2007) 1 SCC 70 : [2006] 9 Suppl. SCR 40;Laxmi Dyechem v. State of Gujarat & Ors. (2012) 13SCC 375 : [2012] 11 SCR 466; Kumar Exports v.Sharma Carpets (2009) 2 SCC 513 : [2008] 17SCR 572; K.N. Beena v. Muniyappan and AnotherC(2001) 8 SCC 458 : [2001] 4 Suppl. SCR 374 ;R.Vijayan v. Baby and Another (2012) 1 SCC 260 :[2012] 14 SCR 712 – relied on.

Raj Kumar Khurana v. State of (NCT of Delhi) & Anr.(2009) 6 SCC 72 : [2009] 7 SCR 434 – distinguished.DKrishna Janardhan Bhat v. Dattatraya G. Hegde (2008)4 SCC 54 : [2008] 1 SCR 605 – referred to.

3. The object of Section 138 of the Negotiable InstrumentsAct is to infuse credibility to negotiable instruments includingcheques and to encourage and promote the use of negotiableEinstruments including cheques in financial transactions. Thepenal provision of Section 138 of the Negotiable Instruments Actis intended to be deterrent to callous issuance of negotiableinstruments such as cheques without serious intention to honourthe promise implicit in the issuance of the same. Having regardto the object of Section 138 of the Negotiable Instruments Act, aFprosecution based on second or successive default in paymentof the cheque amount is not impermissible simply because nostatutory notice had been issued after the first default and noproceeding for prosecution had been initiated. [Paras 9 and 10]

MSR Leathers v. S. Palaniappan & Anr (2013) 1 SCCG177 : [2012] 9 SCR 165 – relied on.

4. If two views are possible, this Court, in exercise of itsjurisdiction under Article 136 of the Constitution would ordinarilynot interfere with judgment of acquittal, is well settled.[Para 31]

BIR SINGH v. MUKESH KUMAR

John K John v. Tom Varghese & Anr. (2007) 12 SCC

714 : [2007] 11 SCR 287 – relied on.

5. judgment is precedent for the issue of law which israised and decided. It is the ratio decidendi of the case whichoperates as binding precedent. What is binding on all courts iswhat the Supreme Court says under Article 141 of theConstitution, which is declaration of the law and not what it doesunder Article 142 to do complete justice. [Para 34]

State of Punjab & Ors. v. Surinder Kumar & Ors. (1992)1 SCC 489 : [1991] 3 Suppl. SCR 553 – relied on.“Constitutional Supremacy - Revisit” by V. Sudhish Pai– referred to.

Case Law Reference

CRIMINAL APPELLATE JURISDICTION : Criminal AppealNos. 230-231 of 2019.

From the Judgment and Order dated 21.11.2017 of the High Courtof Punjab & Haryana at Chandigarh in Criminal Revision Petition (CRP)No. 849 of 2016 (O&M) and CRR No. 2017 of 2016 (O&M)

Pradeep K. Kaushik, Rajiv Mangla, Advs. for the Appellant.

Saju Jakob, C.M. Jaya Kumar, Abhishek Jaiswal, JessyKurian, Ms. Lily Isabel Thomas, Advs. for the Respondent.

AThe Judgment of the Court was delivered by

INDIRA BANERJEE, J. 1. Leave granted.

2. These appeals are against Judgment and order dated 21-11-2017 passed by the High Court of Punjab and Haryana at Chandigarhallowing the Criminal Revisional Application being Criminal RevisionBPetition No.849 of 2016 filed by the respondent-accused, challenging ajudgment and order dated 20-2-2016 passed by the Additional SessionsJudge, Palwal in Criminal Appeal No.13/2015 filed by the respondent-accused, inter alia, affirming judgment and order of conviction of therespondent-accused, passed by the Judicial Magistrate, 1[st] Class, Palwalunder Section 138 of the Negotiable Instruments Act, 1881.C

3. It is the case of the appellant-complainant, that the respondent-accused issued cheque being Cheque No.034212 dated 4-3-2012 drawnon Axis Bank, Branch, Palwal in the name of the appellant towardsrepayment of “friendly loan” of Rs.15 lakhs advanced by the appellant-complainant to the respondent-accused.D4. On 11-4-2012, the appellant-complainant deposited the saidcheque in his bank, but the cheque was returned unpaid with theendorsement “Insufficient Fund”.

5. The appellant-complainant has alleged that, on the assuranceof the respondent-accused, that there would be sufficient funds in hisEbank account to cover the amount of the cheque, the appellant-complainant again presented the cheque to his bank on 23-5-2012, but itwas again returned unpaid with the remark “Insufficient Fund”.

6. On 15-6-2012, the appellant-complainant issued legal noticeto the respondent-accused through his lawyer, calling upon the respondent-Faccused to pay the cheque amount. The said notice, sent by registeredpost, was according to the appellant-complainant, duly served on therespondent-accused. The respondent-accused, however, did not replyto the notice. Nor did he pay the cheque amount to the appellant-complainant.

7. The appellant-complainant filed Criminal Complaint againstGthe respondent-accused, being Case No.106 of 2012 before the JudicialMagistrate 1[st] Class, Palwal, under Section 138 of the NegotiableInstruments Act.

8. Sections 138 and 139 of the Negotiable Instruments Act areset out herein below for convenience:-H

“138 Dishonour of cheque for insufficiency, etc., of fundsin the account. —Where any cheque drawn by person onan account maintained by him with banker for paymentof any amount of money to another person from out of thataccount for the discharge, in whole or in part, of any debtor other liability, is returned by the bank unpaid, eitherbecause of the amount of money standing to the credit ofthat account is insufficient to honour the cheque or that itexceeds the amount arranged to be paid from that accountby an agreement made with that bank, such person shall bedeemed to have committed an offence and shall, withoutprejudice to any other provisions of this Act, be punishedwith imprisonment for term which may be extended to twoyears, or with fine which may extend to twice the amount ofthe cheque, or with both:

Provided that nothing contained in this section shall applyunless—

(a) the cheque has been presented to the bank within periodof six months from the date on which it is drawn or withinthe period of its validity, whichever is earlier;

(b) the payee or the holder in due course of the cheque, asthe case may be, makes demand for the payment of thesaid amount of money by giving notice in writing, to thedrawer of the cheque,within thirty days of the receipt ofinformation by him from the bank regarding the return ofthe cheque as unpaid; and

(c) the drawer of such cheque fails to make the payment ofthe said amount of money to the payee or, as the case maybe, to the holder in due course of the cheque, within fifteendays of the receipt of the said notice.

Explanation.— For the purposes of this section, “debt orother liability” means legally enforceable debt or otherliability.]

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

A9. The object of Section 138 of the Negotiable Instruments Act isto infuse credibility to negotiable instruments including cheques and toencourage and promote the use of negotiable instruments includingcheques in financial transactions. The penal provision of Section 138 ofthe Negotiable Instruments Act is intended to be deterrent to callousissuance of negotiable instruments such as cheques without seriousBintention to honour the promise implicit in the issuance of the same.

10. Having regard to the object of Section 138 of the NegotiableInstruments Act, prosecution based on second or successive defaultin payment of the cheque amount is not impermissible simply becauseno statutory notice had been issued after the first default and noCproceeding for prosecution had been initiated. As held by this Court inMSR Leathers vs. S. Palaniappan & Anr[1], there is no real or qualitativedifference between case where default is committed and prosecutionimmediately launched and another where the prosecution is deferred tillthe cheque presented again gets dishonoured for the second time orsuccessive times.D

11. By judgment and order dated 9-2-2015, the Judicial MagistrateI Class, Palwal convicted the respondent-accused under Section 138 ofthe Negotiable Instruments Act and sentenced him to undergo simpleimprisonment for period of one year and further directed him to paycompensation of Rs.15 lakhs to the appellant-complainant within oneEmonth from the date of the said Judgment and order. Being aggrieved,the respondent-accused filed criminal appeal No.13/2015 dated 9-3-2015 in the court of Additional Sessions Judge, Palwal.

12. By judgment and order dated 20-2-2016, the Appellate Courtupheld the conviction of the respondent-accused under Section 138 ofFthe Negotiable Instruments Act and confirmed the compensation of Rs.15lakhs directed to be paid to the appellant-complainant. The sentence ofimprisonment was however reduced to six months from one year.

13. The respondent-accused filed Criminal Revision Petitionbeing CRR No.849 of 2016 in the High Court challenging the JudgmentGand order of the Appellate Court. The appellant- complainant also fileda Criminal Revision Petition being CRR No.2017 of 2016 challengingthe reduction of the sentence from one year to six months.

14. By common final Judgment and order dated 21-11-2017which is impugned before us, the High Court has reversed the concurrentfactual findings of the Trial Court and the Appellate Court and acquittedthe respondent of the charge under Section 138 of the NegotiableInstruments Act, observing, inter alia, that there was fiduciaryrelationship between the appellant-complainant, an Income Taxpractitioner, and the respondent-accused who was his client.

15. The High Court observed and held:-

“The complainant had fiduciary relationship with theaccused-petitioner. Therefore, heavy burden was on thecomplainant to prove that he had advanced the loan andthat blank cheque for the same was given to him. Thecomplainant is an income tax practitioner and he knowsthat whenever loan is advanced to anybody, receipt has tobe obtained and that such heavy amount is to be advancedonly through cheque or demand draft or RTGS. Theaccused-petitioner was the client of the complainant andthey were having professional relationship. The accusedpetitioner was no so thick and thin with the complainant.There is no reason why the complainant, who is an incometax practitioner, will advance such heavy loan to his clientwithout any close relationship and without obtaining anywriting to this effect. There was heavy burden on thecomplainant. In such circumstances, the accused-petitioneris successful in raising reasonable doubts that thecomplainant might have misused one of the blank chequesgiven to him for payment of income tax for depositing thesame in the Treasury.

In order to support his case, the accused-petitioner tooka risk by stepping himself into the witness box and offeredhimself for cross-examination. He asserted in his crossexamination that the tax return was deposited in cash andthe complainant used to take cash from him. His versionwas also supported by one Praveen Kumar, DW2.

From the abovenoted discussions, it is clear that theparties were in fiduciary relationship and heavy burden wason the complainant to prove that he had advanced loanof Rs.15,00,000/- to his client without obtaining any writingand that he has not misused any blank cheque of his client.

Such loan was not shown in the income tax return of thecomplainant.

For the reasons mentioned above, the case of thecomplainant becomes highly doubtful and is not beyond allreasonable doubts. Therefore, no presumption under Section138 of the Negotiable Instruments Act, 1881 can be raised.BBoth the courts below erred in holding the accused-petitioner guilty for the commission of offence punishableunder Section 138 of the Negotiable Instruments Act, 1881.

In view of the foregoing discussions, CRR No. 849 of2016 is allowed and CRR No.2017 of 2016 is dismissed.The accused- petitioner stands acquitted of the notice ofaccusation served upon him.”

16. The short question before us is whether the High Court wasright in reversing the concurrent factual findings of the Trial Court andof the Appellate court in exercise of its revisional jurisdiction. TheDquestions of law which rise in this appeal are, (i) whether revisionalCourt can, in exercise of its discretionary jurisdiction, interfere with anorder of conviction in the absence of any jurisdictional error or error oflaw and (ii) whether the payee of cheque is disentitled to the benefitof the presumption under Section 139 of the Negotiable InstrumentsAct, of cheque duly drawn, having been issued in discharge of debtEor other liability, only because he is in fiduciary relationship with theperson who has drawn the cheque.17. The Trial Court, on analysis of the evidence adduced by therespective parties arrived at the factual finding that the respondent-accused had duly issued the cheque in question for Rs.15 lakhs in favourFof the appellant-complainant, in discharge of debt or liability, the chequewas presented to the bank for payment within the period of its validity,but the cheque had been returned unpaid for want of sufficient funds inthe account of the respondent-accused in the bank on which the chequewas drawn. Statutory Notice of dishonour was duly issued to whichthere was no response from the respondent-accused.G

18. The Appellate Court affirmed the aforesaid factual findings.The Trial Court and the Appellate Court arrived at the specific concurrentfactual finding that the cheque had admittedly been signed by therespondent-accused. The Trial Court and the Appellate Court rejectedthe plea of the respondent-accused that the appellant-complainant hadHmisused blank signed cheque made over by the respondent-accused to

the appellant-complainant for deposit of Income Tax, in view of theadmission of the respondent-accused that taxes were paid in cash forwhich the appellant-complainant used to take payment from therespondent in cash.

19. It is well settled that in exercise of revisional jurisdictionunder Section 482 of the Criminal Procedure Code, the High Court doesnot, in the absence of perversity, upset concurrent factual findings. It isnot for the Revisional Court to re-analyse and re-interpret the evidenceon record.

20. As held by this Court in Southern Sales and Services andOthers vs. Sauermilch Design and Handels GMBH[2],it is wellestablished principle of law that the Revisional Court will not interfereeven if wrong order is passed by court having jurisdiction, in theabsence of jurisdictional error. The answer to the first question istherefore, in the negative.

21. In passing the impugned judgment and order dated 21-11-2017, the High Court mis-construed Section 139 of NegotiableInstruments Act, which mandates that unless the contrary is proved,itis to be presumed that the holder of cheque received the cheque of thenature referred to in Section 138, for the discharge, in whole or in part,of any debt or other liability. Needless to mention that the presumptioncontemplated under Section 139 of the Negotiable Instruments Act, is arebuttable presumption. However, the onus of proving that the chequewas not in discharge of any debt or other liability is on the accuseddrawer of the cheque.

22. In Hiten P. Dalal vs. Bratindranath Banerjee[3],this Courtheld that both Section 138 and 139 require that the Court shall presumethe liability of the drawer of the cheques for the amounts for which thecheques are drawn. Following the judgment of this Court in State ofMadras vs.Vaidyanatha Iyer[4],this Court held that it was obligatory onthe Court to raise this presumption.

23. Section 139 introduces an exception to the general rule asto the burden of proofand shifts the onus on the accused. Thepresumption under Section 139 of the Negotiable Instruments Act is apresumption of law, as distinguished from presumption of facts.Presumptions are rules of evidence and do not conflict with the

2(2008) 14 SCC 457

3(2001) 6 SCC 16

4AIR 1958 SC 61

Apresumption of innocence, which requires the prosecution to prove thecase against the accused beyond reasonable doubt. The obligation onthe prosecution may be discharged with the help of presumptions of lawand presumptions of fact unless the accused adduces evidence showingthe reasonable possibility of the non-existence of the presumed fact asheld in Hiten P. Dalal (supra).B

24. Presumption of innocence is undoubtedly human right ascontended on behalf of the respondent-accused, relying on the judgmentsof this Court in Ranjitsing Brahmajeetsing Sharma vs. State ofMaharashtra and Anr[5]and Rajesh Ranjan Yada @ Pappu Yadavvs. CBI through its Director[6]. However the guilt may be establishedCby recourse to presumptions in law and presumptions in facts, as observedabove.

25. In Laxmi Dyechem vs. State of Gujarat & Ors.[7],this Courtreiterated that in view of Section 139, it has to be presumed that chequewas issued in discharge of debt or other liability but the presumptionDcould be rebutted by adducing evidence. The burden of proof was however

on the person who wanted to rebut the presumption. This Court held“however, this presumption coupled with the object of Chapter XVII ofthe Act leads to the conclusion that by countermanding payment of apost dated cheque, party should not be allowed to get away from thepenal provision of Section 138 of the Act”.E

26. In Kumar Exports vs.Sharma Carpets[8], this Court reiteratedthat there is presumption that every negotiable instrument duly executed,is for discharge of debt or liability, but the presumption is rebuttable byproving the contrary. In the facts and circumstances of the case it wasfound that the cheque in question was towards advance for purchase ofFcarpets, which were in fact not sold by the payee of the cheque to thedrawer, as proved from the deposition of an official of the Sales TaxDepartment, who stated that the payee had admitted that he had not soldthe carpets.

27. In K.N. Beena vs. Muniyappan and Another[9], this CourtGheld that in view of the provisions of Section 139 of the NegotiableInstruments Act read with Section 118 thereof, the Court had to presume

5(2005) 5 SCC 2946(2007) 1 SCC 707(2012) 13 SCC 3758(2009) 2 SCC 513H9(2001) 8 SCC 458

that the cheque had been issued for discharging debt or liability. Thesaid presumption was rebuttable and could be rebutted by the accusedby proving the contrary. But mere denial or rebuttal by the accused wasnot enough. The accused had to prove by cogent evidence that therewas no debt or liability. This Court clearly held that the High Court haderroneously set aside the conviction, by proceeding on the basis thatdenials/averments in the reply of the accused were sufficient to shift theburden of proof on the complainant to prove that the cheque had beenissued for discharge of debt or liability. This was an entirely erroneousapproach. The accused had to prove in the trial by leading cogentevidence that there was no debt or liability.

28. In R. Vijayan vs. Baby and Another[10]this Court observedthat the object of Chapter XVII of the Negotiable Instruments Act isboth punitive as also compensatory and restitutive. It provides singleforum and single proceeding for enforcement of criminal liability by reasonof dishonour of cheque and for enforcement of the civil liability forrealization of the cheque amount, thereby obviating the need for thecreditor to move two different fora for relief. This Court expressed itsanguish that some Magistrates went by the traditional view, that thecriminal proceedings were for imposing punishment and did not exercisediscretion to direct payment of compensation, causing considerabledifficulty to the complainant, as invariably the limitation for filing civilcases would expire by the time the criminal case was decided.29. In R. Vijayan vs. Baby and another (supra) this Courtobserved that unless there were special circumstances, in all cases ofconviction, the Court should uniformly exercise the power to levy fineup to twice the cheque amount and keeping in view the cheque amountand the simple interest thereon at 9% per annum as the reasonablequantum of loss, direct payment of such amount as compensation. ThisCourt rightly observed that uniformity and consistency in deciding similarcases by different courts not only increases the credibility of the chequeas Negotiable Instrument but also the credibility of the Courts of Justice.

30. The judgment of this Court in Raj Kumar Khurana vs.State of (NCT of Delhi) & Anr.[11]was rendered in the particular facts ofthe case where the drawer of the cheque had reported to the police andthe bank that two unfilled cheques signed by him had been stolen.

10(2012) 1 SCC 260

11(2009) 6 SCC 72

A31. The proposition as re-enunciated in John K John vs. TomVarghese & Anr.[12]cited on behalf of the respondent-accused that if twoviews are possible, this Court, in exercise of its jurisdiction under Article136 of the Constitution would ordinarily not interfere with judgment ofacquittal, is well settled.B32. In the aforesaid case this Court affirmed an acquittal underSection 138 of the Negotiable Instrument Act, in the peculiar factsand circumstances of the case where several civil suits between theparties were pending.

33. In Krishna Janardhan Bhat vs. Dattatraya G. Hegde[13],cited on behalf of the respondent-accused, this Court reaffirmed thatCSection 139 of the Act raises presumption that cheque duly drawnwas towards debt or liability. However, keeping in view the peculiarfacts and circumstances of the case, this Court was of the opinion thatthe courts below had approached the case from wholly different angleby wrong application of legal principles.D34. It is well settled that judgment is precedent for the issue

34. It is well settled that judgment is precedent for the issueof law which is raised and decided. It is the ratio decidendi of thecase which operates as binding precedent. As observed by this Courtin State of Punjab & Ors. vs. Surinder Kumar & Ors.[14], what isbinding on all courts is what the Supreme Court says under Article 141of the Constitution, which is declaration of the law and not what it doesEunder Article 142 to do complete justice.

35. Furthermore, to quote V. Sudhish Pai from his book“Constitutional Supremacy - Revisit”:-

“Judgments and observations in judgments are not to be readas Euclid’s theorems or as provisions of statute. JudicialFutterances/pronouncements are in the setting of the facts of aparticular case. To interpret words and provisions of statute itmay become necessary for judges to embark upon lengthydiscussions, but such discussion is meant to explain not define,Judges interpret statutes, their words are not to be interpretedGas statutes. Thus, precedents are not to be read as statutes.”

36. The proposition of law which emerges from the judgmentsreferred to above is that the onus to rebut the presumption under Section139 that the cheque has been issued in discharge of debt or liability is

12(2007) 12 SCC 71413 (2008) 4 SCC 54H14 (1992) 1 SCC 489

on the accused and the fact that the cheque might be post dated doesnot absolve the drawer of cheque of the penal consequences of Section138 of the Negotiable Instruments Act.

37. meaningful reading of the provisions of the NegotiableInstruments Act including, in particular, Sections 20, 87 and 139, makesit amply clear that person who signs cheque and makes it over to thepayee remains liable unless he adduces evidence to rebut the presumptionthat the cheque had been issued for payment of debt or in discharge ofa liability. It is immaterial that the cheque may have been filled in by anyperson other than the drawer, if the cheque is duly signed by the drawer.If the cheque is otherwise valid, the penal provisions of Section 138would be attracted.

38. If signed blank cheque is voluntarily presented to payee,towards some payment, the payee may fill up the amount and otherparticulars. This in itself would not invalidate the cheque. The onuswould still be on the accused to prove that the cheque was not in dischargeof debt or liability by adducing evidence.

39. It is not the case of the respondent-accused that he eithersigned the cheque or parted with it under any threat or coercion. Nor isit the case of the respondent-accused that the unfilled signed chequehad been stolen. The existence of fiduciary relationship between thepayee of cheque and its drawer, would not disentitle the payee to thebenefit of the presumption under Section 139 of the NegotiableInstruments Act, in the absence of evidence of exercise of undue influenceor coercion. The second question is also answered in the negative.

40. 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 theabsence of any cogent evidence to show that the cheque was not issuedin discharge of debt.

41. The fact that the appellant-complainant might have been anIncome Tax practitioner conversant with knowledge of law does notmake any difference to the law relating to the dishonour of cheque.The fact that the loan may not have been advanced by cheque ordemand draft or receipt might not have been obtained would make nodifference. In this context, it would, perhaps, not be out of context tonote that the fact that the respondent-accused should have given orsigned blank cheque to the appellant-complainant, as claimed by the

Arespondent-accused, shows that initially there was mutual trust and faithbetween them.

42. In the absence of any finding that the cheque in question wasnot signed by the respondent-accused or not voluntarily made over tothe payee and in the absence of any evidence with regard to theBcircumstances in which blank signed cheque had been given to theappellant-complainant, it may reasonably be presumed that the chequewas filled in by the appellant-complainant being the payee in the presenceof the respondent-accused being the drawer, at his request and/or withhis acquiescence. The subsequent filling in of an unfilled signed chequeis not an alteration. There was no change in the amount of the cheque,Cits date or the name of the payee. The High Court ought not to haveacquitted the respondent-accused of the charge under Section 138 ofthe Negotiable Instruments Act.43. In our considered opinion, the High Court patently erred inholding that the burden was on the appellant-complainant to prove thatDhe had advanced the loan and the blank signed cheque was given to himin repayment of the same. The finding of the High Court that the caseof the appellant-complainant became highly doubtful or not beyondreasonable doubt is patently erroneous for the reasons discussed above.

44. The appeals are allowed. The judgment and order of theEHigh Court is set aside. The conviction of the respondent under Section138 of the Negotiable Instruments Act is confirmed. However, therespondent-accused is sentenced only to fine, which is enhanced to Rs.16lakhs and shall be paid as compensation to the appellant-complainant.The fine shall be deposited in the Trial Court within eight weeks fromthe date, failing which the sentence of imprisonment of one year asFimposed by the Trial Court shall revive. There shall be no order as tocosts.

Kalpana K. Tripathy

Appeals allowed.