Docid # IndiaLawLib/295072

(2001) 43 ACrC 1125 : (2001) 8 AD(SC) 566 : (2001) 4 AICLR 701 : (2001) AIR(SCW) 4344 : (2001) AIR(SC) 2895
: (2002) 1 AllCJ 635 : (2002) 1 AllCrlRulings 247 : (2002) 1 ALLMR 277 : (2002) 1 AllWC 110 : (2001) 2 ALT(Crl)
382 : (2001) 2 AndhLD(Criminal) 824 : (2001) 2 ApexCourtJournal 635 : (2002) 1 BankJ 13 : (2006) 4 BC 287 :
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3 CivCC 621 : (2002) 1 CivilLJ 1 : (2001) 2 CLJ(Criminal) 307 : (2002) 2 CLJ(Criminal) 28 : (2001) 107 CompCas
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(2001) 4 RCR(Criminal) 545 : (2002) 1 RLW 173 : (2001) 7 SCALE 331 : (2001) 8 SCC 458 : (2002) SCC(Cri) 14 :
(2002) 37 SCL 583 : (2001) SCR 374 : (2001) 7 Supreme 810 : (2002) 1 UC 351 : (2002) WLC 105
SUPREME COURT OF INDIA
DIVISION BENCH
( Before : S. N. Variava, J; K. T. Thomas, J )

K.N. BEENA — Appellant

Vs.

MUNIYAPPAN AND ANOTHER — Respondent

Negotiable Instruments Act, 1881 (NI) - Section 118, Section 138, Section 139

Negotiable Instruments Act, 1881 - Sections 138, 139, 118 - Dishonour of cheque -
Consideration for cheque - Burden to prove - Is on accused and not on complainant -
Denials/averments in reply by accused are not sufficient to shift burden of proof - Accused
has to lead cogent evidence - Conviction cannot be set aside on basis of some formal evidence
led by accused. Under Section 118 of NI Act, unless the contrary was proved, it is to be
presumed that the Negotiable Instruments (including a cheque) had been made or drawn for
consideration. Under Section 139 the Court has to presume, unless the contrary was proved,
that the holder of the cheque received the cheque for discharge, in whole or in part of a debt
or liability. Thus in complaint under Section 138, the Court has to presume that the cheque
has been issued for a debt or liability. This presumption is rebuttable. However, the burden
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of proving that a cheque has not been issued for a debt or liability is on the accused.
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In this case admittedly the Ist respondent has led no evidence except some formal evidence.

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The High Court appears to have proceeded on the basis that the denials/averments in his
reply were sufficient to shift the burden of proof onto the Appellant/Complainant to prove
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that the cheque was issued for a debt or liability. This is an entirely erroneous approach. The

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Ist respondent had to prove in the trial, by leading cogent evidence, that there was no debt or
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liability. The Ist respondent not having led any evidence could not be said to have discharged
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the burden cast on him. The Ist respondent not having discharged the burden of proving that
the cheque was not issued for a debt or liability, the conviction as awarded by the Magistrate
was correct. the High Court erroneously set aside that conviction.
Cases Referred

Hiten P. Dalal Vs. Bratindranath Banerjee, AIR 2001 SC 3897 : (2001) 2 BC 773 : (2001) 106 CompCas 574 : (2001) 3
CompLJ 313 : (2001) CriLJ 4647 : (2001) 3 Crimes 220 : (2001) 5 JT 386 : (2001) 4 SCALE 275 : (2001) 6 SCC 16 :
(2001) 3 SCR 900 : (2001) 2 UJ 1384 : (2001) AIRSCW 3861 : (2001) 5 Supreme 49

Counsel for Appearing Parties

S.N. Variava, J.—Leave granted

4. The Appellant filed a complaint u/s 138 of the Negotiable Instruments Act as the Cheque dated 6th April, 1993 in a
sum of Rs.63720/-, issued by the 1 st First Respondent in favour of the Appellant on Central Bank, had been dishonored
with the remarks "Insufficient Funds". The Appellant had issued a legal notice dated 28th April, 1993. Receipt of the said
notice is admitted. A reply dated 21 st May, 1993 was sent by the 1st Respondent. However no payment was made.

5. After trial the Judicial Magistrate-II, Kumbakonam, convicted the 1 st First Respondent u/s 138 and directed
payment of a fine of Rs.65000/-. In default the 1 st Respondent was to suffer simple imprisonment for one year. The 1 st
Respondent challenged the conviction and sentence by filing Criminal Appeal No. 32 of 1995. The same came to be
dismissed by the Sessions Judge on 28th August, 1995.

6. The 1 st Respondent then preferred Criminal Revision No. 883 of 1995 before the High Court of Madras. A learned
Single Judge by the impugned Order dated 20th July, 2000, set aside the conviction and acquitted the 1 st Respondent.
The learned Judge acquitted the 1 st Respondent on the ground that the Appellant had not proved that the cheque dated
6th April, 1993 had been issued for any debt or liability.
 7. In our view the impugned Judgment cannot be sustained at all. The Judgment erroneously proceeds on the basis
that the burden of proving consideration for a dishonored cheque is on the complainant. It appear that the learned Judge
had lost sight of Sections 118 and 139 of the Negotiable Instruments Act. u/s 118, unless the contrary was proved, it is to
be presumed that the Negotiable Instrument (including a cheque) had been made or drawn for consideration. u/s 139
the Court has to presume, unless the contrary was proved, that the holder of the cheque received the cheque for
discharge, in whole or in part, of a debt or liability. Thus in complainants u/s 138, the Court has to presume that the
cheque had bee issued for a debt or liability. This presumption is rebutable. However the burden of proving that a
cheque had not been issued for a debt or liability is on the accused. This Court in the case of Hiten P. Dalal Vs.
Bratindranath Banerjee, has also taken an identical view.

8. In this case admittedly the 1 st Respondent has led no evidence except some formal evidence. The High Court
appears to have proceeded on the basis that the denials/averments in his reply dated 21 st May, 1993 were sufficient to
shift the burden of proof onto the Appellant complainant to prove that the cheque was issued for a debt or liability. This
is an entirely erroneous approach. The 1st Respondent had to prove in the trial, by leading cogent evidence, that there
was no debt or liability. The 1st Respondent not having led any evidence could not be said to have discharged the burden
cast on him. The 1 st Respondent not having discharged the burden of proving that the cheque was not issued for a debt
or liability, the conviction as awarded by the Magistrate was correct. The High Court erroneously set aside that
conviction.
9. In this view of the matter the impugned Judgment is set aside. The conviction and sentence as awarded by the
Magistrate by his order dated 21 st March, 1994, stand. The 1 st Respondent is granted one months' time to pay the fine.
In default thereof he shall suffer simple imprisonment for three months. The fine if realized. Rs.60,000/- therefrom
shall be paid to the complainant as compensation.
10. The Appeals stands disposed of accordingly. There will be no Order as to costs.

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