UTTAM RAM versus DEVINDER SINGH HUDAN & ANR.
[2019] 13 S.C.R. 425, Supreme Court of India, 2019
Outcome: Appeal(s) allowed (Granted)
Segment: Ratio
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UTTAM RAM
v.
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 was
carried out through ropeway to the roadhead for further
transportation – Packing material was procured by the respondent
through his authorised agent on credit basis from the appellant –
Accounts finally settled between the appellant and the respondent’s
authorised agent and Rs.5,38,856/- was found recoverable – Cheque
issued – Dishonoured– Complaint filed by the appellant – Dismissed
– Upheld by the High Court – On appeal, held: Dishonour of cheque
carries a statutory presumption of consideration – Holder of cheque
in due course is required to prove that the cheque was issued by the
accused and that when the same presented, it was not honoured –
Since there is statutory presumption of consideration, the burden is
on the accused to rebut the presumption that the cheque was issued
not for any debt or other liability – In the present case, once the
agent of the respondent admitted the settlement of due amount, in
absence of any other evidence the Trial Court or the High Court
could not dismiss the complaint only on account of discrepancies in
the cartons, packing material or the rate to determine the total
liability, as if the appellant was proving his debt before the Civil
Court, when the written document
crystalized the amount due –
Respondent failed to lead any evidence to rebut the statutory
presumption, a finding returned by both the Trial Court and the
High Court –Therefore, it is presumed that the cheques in question
were drawn for consideration and the appellant received the same
in discharge of an existing debt – Respondent guilty of dishonour
of 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 of
the amount of cheque of Rs.5,38,856/- and litigation cost of
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Rs.1,00,000/- within three months – In case of failure to pay the
same, the respondent to undergo imprisonment for six months – Code
of Criminal Procedure, 1973 – s.313.
Allowing the appeal, the Court
HELD: 1.1 The approach of the Trial Court and that of the
High Court is perverse; irrational as well as suffers from material
illegality and irregularity, which cannot be sustained in complaint
filed under Section 138 Negotiable Instruments Act, 1881. A
negotiable instrument including a cheque carries presumption of
consideration in terms of Section 118(a) and under Section 139
of the Act. The Trial Court and the High Court proceeded as if,
the appellant is to prove a debt before civil court wherein, the
plaintiff is required to prove his claim on the basis of evidence to
be laid in support of his claim for the recovery of the amount due.
A dishonour of cheque carries a statutory presumption of
consideration. The holder of cheque in due course is required to
prove that the cheque was issued by the accused and that when
the same presented, it was not honoured. Since there is a statutory
presumption of consideration, the burden is on the accused to
rebut the presumption that the cheque was issued not for any
debt or other liability. [Paras 18-20] [432-D, E-H; 433-A-B]
1.2 There is the mandate of presumption of consideration
in terms of the provisions of the Act. The onus shifts to the
accused on proof of issuance of
cheque to rebut the presumption
that the cheque was issued not for discharge of any debt or liability
in terms of Section 138 of the Act. Once the agent of the
respondent has admitted the settlement of due amount and in
absence of any other evidence the Trial Court or the High Court
could not dismiss the complaint only on account of discrepancies
in the determination of the amount due or oral evidence in the
amount due when the written document crystalizes the amount
due for which the cheque was issued. [Paras 21, 27] [433-C;
439-B-C]
1.3 The accused has failed to lead any evidence to rebut
the statutory presumption, a finding returned by both the Trial
Court and the High Court. Both Courts not only erred in law but
also committed perversity when the due amount is said to be
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disputed only on account of discrepancy in the cartons, packing
material or the rate to determine the total liability as if the appellant
was proving his debt before the Civil Court. Therefore, it is
presumed that the cheques in question were drawn for
consideration and the holder of the cheques i.e., the appellant
received the same in discharge of an existing debt. Cross-
examination on the prosecution witness is not sufficient to rebut
the presumption of consideration. Mere discrepancies in the
statement in respect of the cartons, trays or the packing material
or the rate charged will not rebut the statutory presumption which
is proved by CW3. The conclusion drawn by the Trial Court and
the High Court to acquit the respondent is not only illegal but
being perverse is totally unsustainable in law. Order passed by
the High Court is set aside. The respondent is held guilty of
dishonour 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 of
cheque of Rs.5,38,856/- and a 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, the respondent shall undergo
imprisonment for a 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 SCC
39 : [2006] 3 Suppl. SCR 124 – held inapplicable.
Hiten P. Dalal v. Bratindranath Banerjee (2001) 6 SCC
16 : [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 Gujarat
and Another AIR  2019  SC 1876; Vijay v. Laxman and
another (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.
UTTAM RAM v. DEVINDER SINGH HUDAN & ANR.
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Case Law Reference
[2001] 3 SCR  900
referred to
Para 16
[2008] 17 SCR 572
distinguished
Para 16
[2010] 6 SCR 507
referred to
Para 16
[2018] 5 SCR 69
referred to
Para 23
[2019] 2 SCR 24
referred to
Para 24
AIR 2019 SC 1876
referred to
Para 25
[2006] 3 Suppl. SCR 124
held inapplicable
Para 29
[2013] 4 SCR 80
referred to
Para 31
[2007] 10 SCR 1010
referred to
Para 32
[2013] 12 SCR 753
referred to
Para 32
CRIMINAL APPELLATE JURISDICTION : Criminal Appeal
No. 1545 of 2019.
From the Judgment and Order dated 17.12.2018 of the High Court
of Himachal Pradesh, Shimla in Crl. Appeal No. 431 of 2018.
B. S. Banthia, Sachin Daga, Rajesh Kandari, Advs. for the
Appellant.
Abhimanyu Jhamba, Hemlata Ranga, Ms. R.A. Thonanad
Thangal, Hatneimawi, Ashish Jhamb, Samir Ali Khan, Ms. Ashleen Kaur,
Saloj Smaji,  Advs. for the Respondent.
Ms. Liz Mathew, Adv.(AC).
The Judgment of the Court was delivered by
HEMANT GUPTA, J.
1. The appellant is aggrieved against an order passed by the High
Court of Himachal Pradesh, Shimla on 17.12.2018, whereby, the order
of dismissal of complaint under Section 138 of the Negotiable Instruments
Act, 18811 by the learned Trial Court was not interfered with.
2. None has put appearance on behalf of respondent No. 1, despite
service. Therefore, on 16.09.2019, this Court requested Ms. Liz Mathew,
Advocate to assist the Court on behalf of respondent No.1.
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3. The appellant owns apple orchard in District Kullu, Himachal
Pradesh.  The appellant also used to supply apple cartons, trays and
other packing materials to other apple growers on cash and credit basis.
He also owns commercial ropeway which connects various other apple
orchards with the roadhead as a facility to the growers to carry their
produce from the orchards to the market.
4. In the year 2011, respondent No. 1 purchased apple crops of
various growers which was carried out through ropeway to the roadhead
for further transportation.  The packing material was procured by the
respondent on credit basis from the appellant through his authorised agent
Prem Chand son of Kumat Ram. In the month of September 2011, the
accounts were finally settled between the appellant and the authorised
agent of respondent No. 1 and a sum of Rs.5,38,856/- was found
recoverable. A cheque No. 942816 dated 2.10.2011 was issued for the
said amount, but the said cheque was returned by the bank on 11.10.2011
on presentation with the endorsement “insufficient funds”.
5. The appellant thereafter served a legal notice on 27.10.2011
under registered cover sent to the official and home addresses of
respondent No. 1. But, in spite of receipt of the notice of 27.10.2011, no
payment was made which led to filing of a complaint by the appellant.
6. The appellant in his complaint stated that total amount of
Rs.7,86,300/- was found payable on account of bags, gunny bags and
packing
materials and after adjusting the payment of Rs. 2,47,444/-, an
amount of Rs. 5,38,856/- was found to be payable to the appellant. The
appellant has asserted that the said cheque No. 942816 dated 2.10.2011
was issued by the respondent.
7. In support of the complaint, apart from producing CW1 Dhiraj
Kumar who produced the bank record of dishonour of cheque, the
appellant examined himself as CW2 and also produced Prem Chand son
of Kumat Ram, the agent of respondent as CW3. The respondent did
not appear in witness box but examined Head Constable Ranjit Singh
DW1.
8. Learned Trial Court dismissed the complaint for the reason
that cheque amount was more than the amount alleged on the due date
when cheque was presented.  Therefore, the cheque cannot be said to
be drawn towards discharge of whole or in part of any debt.
UTTAM RAM v. DEVINDER SINGH HUDAN & ANR.
[HEMANT GUPTA, J.]
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9. The appellant in his affidavit reiterated his assertions as were
given in the complaint. In the cross-examination conducted by the
respondent, the appellant stated that cheque in Exh.CW1/B was filled
up by the respondent in October 2011 and that cheque was given by the
respondent himself to him. Three persons, he himself, accused and the
agent of the respondent sat together.  He deposed that he was given up
a filled-up cheque. He denied the suggestion that the accused did not
issue the cheque Exh.CW1/B. He also denied the suggestion that Prem
Chand misused the cheque of the accused because he has stolen the
signed cheque book of the accused and that he has filled up a blank
cheque.
10. CW3 Prem Chand deposed that the respondent purchased,
on contract, apple in their area from apple growers including from the
appellant for further sending them to Shimla, Chandigarh and Delhi. He
deposed that appellant had to recover an amount of Rs.7,86,300/- and
after adjustment of Rs.2,47,444/- the balance amount was payable by
the respondent for which the settlement was arrived at in his presence
when cheque No. 942816 was issued for a sum of Rs.5,38,856/- dated
2.10.2011.
11. In the cross-examination, he deposed that he used to keep an
account of all the packing materials. He was suggested that the accused
has kept cheque with him and he used to give to the growers. However,
he categorically deposed that cheque Exh.CW1/B was
given in his
presence by the accused in Kuthwa. The account was settled prior to
giving of cheque. He denied the suggestion that he lodged a report in
police about missing cheque book in the year 2011.    He   deposed that
the respondent has given cheque book by signing them.  He denied the
suggestion that the cheque in question was filled up as he colluded with
the appellant. The respondent in his statement under Section 313 of the
Code of Criminal Procedure2 denied the prosecution case. The relevant
question No. 9 and the answer given by the respondent are as under:
“Q.9 Why the present case has been made out against you
accused?
Ans. This is a false case. My cheque has been misused.”
12. DW1-Ranjit, Head Constable examined by the accused, has
produced an entry dated 09.09.2011 regarding loss of his cheque book
containing cheque Nos. 942801-942820.
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13. The learned Trial Court returned a finding that mere production
of entry Exh. DW1/A is not sufficient to prove that he has not issued the
said cheque as such report could have been made with intention to create
false evidence of the loss of cheque book.  The court found that in fact
if the cheque has been lost, the accused had several opportunities to
lodge FIR qua the misuse of said cheque as he has signed
acknowledgement of notice Exh.CW1/G. The learned Trial Court recorded
the following findings:
“….Thus, it stands proved beyond reasonable doubt that the cheque
Ext. CW1/B was issued by the accused in favour of the
complainant. Further, the dishonor of the cheque has also been
proved through return memo Ext. CW1/C.  Further the legal
demand notice was also issued within a period of 30 days from
the date of dishnour.  Thereafter, the present complaint has been
filled within the period of limitation.”
14. Still further, the learned Trial Court held the presumption that
the amount of cheque is legally enforceable debt, has not been rebutted
when the following finding was returned:
“….Neither any meaningful cross-examination of the complainant
has been done on this point of his financial capacity. Accordingly,
the aforesaid presumption has not been rebutted by the accused
by proving that the complainant did not have the requisite financial
capacity. Accordingly, the said defence is rejected.”
15. However, the learned Trial Court found contradiction in
the
number of cartons in the complaint as well as in the statement of the
appellant. It was found that the cheque amount is more than the amount
allegedly due on the date when cheque was presented, therefore, the
complaint was dismissed. It held that there are three different versions
as to the number of apple cartons, therefore, the alleged amount would
have been less than the amount claimed by the complainant.
16. In an appeal, the High Court relied upon judgments reported
as Hiten P. Dalal v. Bratindranath Banerjee3, Kumar Exports v.
Sharma Carpets4  and  Rangappa v. Sri Mohan5 to hold that the
cheque 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
UTTAM RAM v. DEVINDER SINGH HUDAN & ANR.
[HEMANT GUPTA, J.]
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Court forms a belief that the consideration does not exist or considers
the non-existence of consideration was so probable that a prudent man
would under no circumstances of the case, act upon the plea that the
consideration does not exist. The High Court held as under:
“21. Now, adverting to the facts of the case, it would be noticed
that respondent No. had raised various defences, but, the same
were turned down by the learned Magistrate.  However, it was
only on the basis of the contradictions that too in the evidence led
by the appellant himself that respondent No. 1 was ordered to be
acquitted.”
17. The High Court again referred to the contradictions regarding
empty apple cartons and the rate per carton, to hold that the appellant
has failed to prove guilt of the respondent beyond reasonable doubt.
18. We find that the approach of the learned Trial Court and that
of the High Court is perverse; irrational as well as suffers from material
illegality and irregularity, which cannot be sustained in complaint filed
under Section 138 of the Act.
19. A negotiable instrument including a cheque carries presumption
of consideration in terms of Section 118(a) and under Section 139 of the
Act. Sections 118(a) and 139 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;….
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139. Presumption in favour of holder.—It shall be presumed,
unless the contrary is proved, that the holder of a cheque received
the cheque of the nature referred to in section 138 for the discharge,
in whole or in part, of any debt or other liability.”
20. The Trial Court and the High Court proceeded as if, the
appellant is to prove a debt before civil court wherein, the plaintiff is
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required to prove his claim on the basis of evidence to be laid in support
of his claim for the recovery of the amount due.  A dishonour of cheque
carries a statutory presumption of consideration. The holder of cheque
in due course is required to prove that the cheque was issued by the
accused and that when the same presented, it was not honoured.  Since
there is a statutory presumption of consideration, the burden is on the
accused to rebut the presumption that the cheque was issued not for any
debt or other liability.
21. There is the mandate of presumption of consideration in terms
of the provisions of the Act. The onus shifts to the accused on proof of
issuance of cheque to rebut the presumption that the cheque was issued
not for discharge of any debt or liability in terms of Section 138 of the
Act which reads as under:
“138. Dishonour of cheque for insufficiency, etc., of funds
in the account. — Where any cheque drawn by a person on an
account maintained by him with a banker for payment of any
amount of money to another person from out of that account for
the discharge, in whole or in part, of any debt or other liability, is
returned by the bank unpaid, either because of the amount of
money standing to the credit of that account is insufficient to honour
the cheque or that it exceeds the amount arranged to be paid
from that account by an agreement made with that bank, such
person shall be deemed to have committed an offence and
shall….”
22. In Kumar
Exports, it was held that mere denial of existence
of debt will not serve any purpose but accused may adduce evidence to
rebut the presumption. This Court held as under:
“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
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[HEMANT GUPTA, J.]
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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 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.”
(emphasis supplied)
23. In a judgment reported as Kishan Rao v. Shankargouda6,
this Court referring to Kumar Exports and Rangappa returned the
following findings:
“22. Another judgment which needs to be looked into
is Rangappa v. Sri Mohan [Rangappa v. Sri Mohan, (2010) 11
SCC 441 : (2010) 4 SCC (Civ) 477 : (2011) 1 SCC (Cri) 184] . A
three-Judge Bench of this Court had occasion to examine the
presumption under Section 139 of the 1881 Act. This Court in the
aforesaid case has held that in the event the accused is able to
raise a probable defence which creates doubt with regard to the
existence of a debt or liability, the presumption may fail. Following
was laid down in paras 26 and 27: (SCC pp. 453-54)
6 (2018) 8 SCC 165
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“26. In light of these extracts, we are in agreement with the
respondent claimant that the presumption mandated by Section
139 of the Act does indeed include the existence of a legally
enforceable debt or liability. To that extent, the impugned
observations in Krishna Janardhan Bhat [Krishna
Janardhan Bhat v. Dattatraya G. Hegde, (2008) 4 SCC 54 :
(2008) 2 SCC (Cri) 166] , may not be correct. However, this
does not in any way cast doubt on the correctness of the
decision in that case since it was based on the specific facts
and circumstances therein. As noted in the citations, this is of
course in the nature of a rebuttable presumption and it is open
to the accused to raise a defence wherein the existence of a
legally enforceable debt or liability can be contested. However,
there can be no doubt that there is an initial presumption which
favours the complainant.
27. Section 139 of the Act is an example of a reverse onus
clause that has been included in furtherance of the legislative
objective of improving the credibility of negotiable instruments.
While Section 138 of the Act specifies a strong criminal remedy
in relation to the dishonour of cheques, the rebuttable
presumption under Section 139 is a device to prevent undue
delay in the course of litigation. However, it must be
remembered that the offence made punishable by Section 138
can be better described as a regulatory offence since the
bouncing of a cheque is largely in the 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 of proof.”
24. In a judgment reported as Bir Singh v. Mukesh Kumar7, this
Court held that presumption under Section 139 of the Act is a presumption
of law.  The Court held as under:
“20. Section 139 introduces an exception to the general rule as to
the burden of proof and shifts the onus on the accused. The
presumption under Section 139 of the Negotiable Instruments Act
is a presumption of law, as distinguished from presumption of facts.
7 (2019) 4 SCC 197
UTTAM RAM v. DEVINDER SINGH HUDAN & ANR.
[HEMANT GUPTA, J.]
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Presumptions are rules of evidence and do not conflict with the
presumption of innocence, which requires the prosecution to prove
the case against the accused beyond reasonable doubt. The
obligation on the prosecution may be discharged with the help of
presumptions of law and presumptions of fact unless the accused
adduces evidence showing the reasonable possibility of the non-
existence of the presumed fact as held in Hiten P. Dalal [Hiten
P. Dalal v. Bratindranath Banerjee, (2001) 6 SCC 16 : 2001
SCC (Cri) 960] .
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33. A meaningful reading of the provisions of the Negotiable
Instruments Act including, in particular, Sections 20, 87 and 139,
makes it amply clear that a person who signs a cheque and makes
it over to the payee remains liable unless he adduces evidence to
rebut the presumption that the cheque had been issued for payment
of a debt or in discharge of a liability. It is immaterial that the
cheque may have been filled in by any person other than the
drawer, if the cheque is duly signed by the drawer. If the cheque
is otherwise valid, the penal provisions of Section 138 would be
attracted.
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36. Even a blank cheque leaf, voluntarily signed and handed over
by the accused, which is towards some payment, would attract
presumption under Section 139 of the Negotiable Instruments Act,
in the absence of any cogent evidence to show that the cheque
was not issued in discharge of a debt.”
25. In
other judgment reported as Rohitbhai Jivanlal Patel v.
State of Gujarat and Another8  this Court held as under:
“18. So far the question of existence of basic ingredients for
drawing of presumption under Sections 118 and 139 the NI Act is
concerned, apparent it is that the accused-appellant could not deny
his signature on the cheques in question that had been drawn in
favour of the complainant on a bank account maintained by the
accused for a sum of Rs. 3 lakhs each. The said cheques were
8 AIR 2019 SC 1876
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presented to the Bank concerned within the period of their validity
and were returned unpaid for the reason of either the balance
being insufficient or the account being closed. All the basic
ingredients of Section 138 as also of Sections 118 and 139 are
apparent on the face of the record. The Trial Court had also
consciously taken note of these facts and had drawn the requisite
presumption. Therefore, it is required to be presumed that the
cheques in question were drawn for consideration and the holder
of the cheques i.e., the complainant received the same in discharge
of an existing debt. The onus, therefore, shifts on the accused-
appellant to establish a probable defence so as to rebut such a
presumption.”
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20. On the aspects relating to preponderance of probabilities, the
accused has to bring on record such facts and such circumstances
which may lead the Court to conclude either that the consideration
did not exist or that its nonexistence was so probable that a prudent
man would, under the circumstances of the case, act upon the
plea that the consideration did not exist. This Court has, time and
again, emphasized that though there may not be sufficient negative
evidence which could be brought on record by the accused to
discharge his burden, yet mere denial would not fulfil the
requirements of rebuttal as envisaged under Section 118 and 139
of the NI Act…..
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32. The result of discussion in the foregoing paragraphs is that
the
major considerations on which the Trial Court chose to proceed
clearly show its fundamental error of approach where, even after
drawing the presumption, it had proceeded as if the complainant
was to prove his case beyond reasonable doubt. Such being the
fundamental flaw on the part of the Trial Court, the High Court
cannot be said to have acted illegally or having exceeded its
jurisdiction in reversing the judgment of acquittal. As noticed
hereinabove, in the present matter, the High Court has
conscientiously and carefully taken into consideration the views
of the Trial Court and after examining the evidence on record as
UTTAM RAM v. DEVINDER SINGH HUDAN & ANR.
[HEMANT GUPTA, J.]
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a whole, found that the findings of the Trial Court are vitiated by
perversity. 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 the
respondent has not rebutted the presumption of consideration in issuing
the cheque on 2.10.2011 inter alia for the following reasons:
1.
Statement of the CW3, that he was not an agent of the
respondent, has not been challenged by the respondent
in the cross examination.
2.
The statement of the appellant as CW2 that the cheque
was handed over by the respondent personally remains
unchallenged.
3.
The respondent has not denied even in his statement
that the cheque was not issued by him. The cross
examination of the witnesses produced by the appellant
also does not show that the signatures on the cheque by
him have not been disputed.
4.
The respondent relies upon entry recorded with the
police on 09.09.2011 that the cheque book was lost.
However, the respondent has not lodged any FIR in
respect of loss of cheque, even after the notice of
dishonour of cheque was received by him on 27.10.2011.
The mere entry is not proof of loss of cheque as is found
by the learned Trial Court itself as it is self-serving report
to create evidence to avoid payment of cheque amount.
5.
The respondent has not appeared as witness to prove
the fact that the cheque book was lost or
that cheque
was not issued in discharge of any debt or liability.
6.
The statement of accused under Section 313 of the Code
is only to the effect that the cheque has been misused.
There is no stand in the statement that the cheque book
was stolen.
7.
The statement of accused under Section 313 is not a
substantive evidence of defence of the accused but only
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an opportunity to the accused to explain the incriminating
circumstances appearing in the prosecution case of
accused. Therefore, there is no evidence to rebut the
presumption that the cheque was issued for
consideration.
27. Once the agent of the respondent has admitted the settlement
of due amount and in absence of any other evidence the Trial Court or
the High Court could not dismiss the complaint only on account of
discrepancies in the determination of the amount due or oral evidence in
the amount due when the written document crystalizes the amount due
for which the cheque was issued.
28. The accused has failed to lead any evidence to rebut the
statutory presumption, a finding returned by both the Trial Court and the
High Court. Both Courts not only erred in law but also committed
perversity when the due amount is said to be disputed only on account of
discrepancy in the cartons, packing material or the rate to determine the
total liability as if the appellant was proving his debt before the Civil
Court. Therefore, it is presumed that the cheques in question were drawn
for consideration and the holder of the cheques i.e., the appellant received
the same in discharge of an existing debt. The onus, thereafter, shifts on
the accused-appellant to establish a probable defence so as to rebut
such a presumption, which onus has not been discharged by the
respondent.
29. Learned counsel for the respondent has referred to the
judgment reported in M. S.
Narayana Menon v. State of Kerala9 that
evidence adduced by the complainant can be relied upon to rebut the
presumption of consideration. However, said judgment has no applicability
to the facts of the present case as the Trial Court has found that the
presumption is not rebutted but still the Trial Court dismissed the complaint
for the reason that the appellant has failed to prove the amount mentioned
in the cheque as due amount.  Once the cheque is proved to be issued it
carries statutory presumption of consideration. Then the onus is on the
respondent to disprove the presumption at which the respondent has
miserably failed.
30. In Kumar Exports evidence to rebut the presumption was
led and accepted by the Court.  In these circumstances, it was held that
9 (2006) 6 SCC 39
UTTAM RAM v. DEVINDER SINGH HUDAN & ANR.
[HEMANT GUPTA, J.]
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SUPREME COURT REPORTS
[2019] 13 S.C.R.
the burden shifts back to the complainant and the presumption under the
Act will not again come to his rescue. However, in the present case, the
presumption of consideration has not been rebutted by the respondent
even on the basis of the evidence laid by the appellant. The difference in
the number of cartons supplied or the rate charged is not relevant when
the accounts were settled in writing to rebut the presumption of
consideration of issuance of a cheque.
31. In Vijay v. Laxman and another10 this Court found grave
discrepancies in the case of the complainant and that no case is made
out for when the High Court had set aside the conviction on the basis of
clear evidence giving rise to the perverse findings.
32. Learned counsel appearing for the respondent also referred
to M. S. Narayana Menon and K. Prakashan v. P. K. Surenderan11
that if two views are possible, the appellate court shall not reverse a
judgment of acquittal only because another view is possible to be taken.
Learned counsel also relies upon a judgment reported as John K.
Abraham v. Simon C. Abraham12 that mere fact that the statutory
notice was not replied cannot prejudice to the case of the respondent.
We do not find any merit in the arguments raised by the learned counsel
for the respondent. In fact, the findings recorded by the courts below
are total misreading of the statutory provisions more so when the
respondent has not led any evidence to
rebut the presumption of
consideration. Cross-examination on the prosecution witness is not
sufficient to rebut the presumption of consideration.  Mere discrepancies
in the statement in respect of the cartons, trays or the packing material
or the rate charged will not rebut the statutory presumption which is
proved by CW3 Prem Chand.
33. The conclusion drawn by the Trial Court and the High Court
to acquit the respondent is not only illegal but being perverse is totally
unsustainable in law.  Before concluding, we would like to put on record
that Ms. Mathew has ably assisted this Court in canvassing that the
order passed by the High Court does not warrant any interference in the
present appeal against acquittal.
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11 (2008) 1 SCC 258
12 (2014) 2 SCC 236

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34. Consequently, the present appeal is allowed, order passed by
the High Court is set aside. The respondent is held guilty of dishonour of
cheque for an offence under Section 138 of the Act. The respondent
shall pay Rs.10,77,712/- as fine i.e. twice of the amount of cheque of
Rs.5,38,856/- and a 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, the
respondent shall undergo imprisonment for a period of six months.
Divya Pandey
Appeal allowed.
UTTAM RAM v. DEVINDER SINGH HUDAN & ANR.
[HEMANT GUPTA, J.]