TMI Blog2019 (2) TMI 547X X X X Extracts X X X X X X X X Extracts X X X X ..... ether the payee of a cheque is disentitled to the benefit of the presumption under Section 139 of the Negotiable Instruments Act, of a cheque duly drawn, having been issued in discharge of a debt or other liability, only because he is in a fiduciary relationship with the person who has drawn the cheque? - Held that:- 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 - It is not the case of the respondent-accused that he either signed the cheque or parted with it under any threat or coercion. Nor is it the case of the respondent-accused that the unfilled signed cheque had been stolen. The existence of a fiduciary relationship between the payee of a chequ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent-accused to pay the cheque amount. The said notice, sent by registered post, was according to the appellantcomplainant, duly served on the respondent-accused. The respondent-accused, however, did not reply to the notice. Nor did he pay the cheque amount to the appellant-complainant. 7. The appellant-complainant filed a Criminal Complaint against the respondent-accused, being Case No.106 of 2012 before the Judicial Magistrate 1st Class, Palwal, under Section 138 of the Negotiable Instruments Act. 8. Sections 138 and 139 of the Negotiable Instruments Act are set out herein below for convenience:- 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 deeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e default is committed and prosecution immediately launched and another where the prosecution is deferred till the cheque presented again gets dishonoured for the second time or successive times. 11. By a judgment and order dated 9-2-2015, the Judicial Magistrate I Class, Palwal convicted the respondent-accused under Section 138 of the Negotiable Instruments Act and sentenced him to undergo simple imprisonment for a period of one year and further directed him to pay compensation of ₹ 15 lakhs to the appellant-complainant within one month from the date of the said Judgment and order. Being aggrieved, the respondent-accused filed a criminal appeal No.13/2015 dated 9-3-2015 in the court of Additional Sessions Judge, Palwal. 12. By a judgment and order dated 20-2-2016, the Appellate Court upheld the conviction of the respondent-accused under Section 138 of the Negotiable Instruments Act and confirmed the compensation of ₹ 15 lakhs directed to be paid to the appellantcomplainant. The sentence of imprisonment was however reduced to six months from one year. 13. The respondent-accused filed a Criminal Revision Petition being CRR No.849 of 2016 in the High Court challe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any blank cheque of his client. Such loan was not shown in the income tax return of the complainant. For the reasons mentioned above, the case of the complainant becomes highly doubtful and is not beyond all reasonable doubts. Therefore, no presumption under Section 138 of the Negotiable Instruments Act, 1881 can be raised. Both the courts below erred in holding the accused-petitioner guilty for the commission of offence punishable under Section 138 of the Negotiable Instruments Act, 1881. In view of the foregoing discussions, CRR No. 849 of 2016 is allowed and CRR No.2017 of 2016 is dismissed. The accused- petitioner stands acquitted of the notice of accusation served upon him. 16. The short question before us is whether the High Court was right in reversing the concurrent factual findings of the Trial Court and of the Appellate court in exercise of its revisional jurisdiction. The questions of law which rise in this appeal are, (i) whether a revisional Court can, in exercise of its discretionary jurisdiction, interfere with an order of conviction in the absence of any jurisdictional error or error of law and (ii) whether the payee of a cheque is disentitled to the be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be presumed 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. Needless to mention that the presumption contemplated under Section 139 of the Negotiable Instruments Act, is a rebuttable presumption. However, the onus of proving that the cheque was not in discharge of any debt or other liability is on the accused drawer of the cheque. 22. In Hiten P. Dalal vs. Bratindranath Banerjee (2001) 6 SCC 16, this Court held that both Section 138 and 139 require that the Court shall presume the liability of the drawer of the cheques for the amounts for which the cheques are drawn. Following the judgment of this Court in State of Madras vs. Vaidyanatha Iyer AIR 1958 SC 61, this Court held that it was obligatory on the Court to raise this presumption. 23. 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. Presumptions are rules of evidence and do not conflict with the presumption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ving the contrary. But mere denial or rebuttal by the accused was not enough. The accused had to prove by cogent evidence that there was no debt or liability. This Court clearly held that the High Court had erroneously set aside the conviction, by proceeding on the basis that denials/averments in the reply of the accused were sufficient to shift the burden of proof on the complainant to prove that the cheque had been issued for discharge of a debt or a liability. This was an entirely erroneous approach. The accused had to prove in the trial by leading cogent evidence that there was no debt or liability. 28. In R. Vijayan vs. Baby and Another (2012) 1 SCC 260 this Court observed that the object of Chapter XVII of the Negotiable Instruments Act is both punitive as also compensatory and restitutive. It provides a single forum and single proceeding for enforcement of criminal liability by reason of dishonour of cheque and for enforcement of the civil liability for realization of the cheque amount, thereby obviating the need for the creditor to move two different fora for relief. This Court expressed its anguish that some Magistrates went by the traditional view, that the criminal pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rved by this Court in State of Punjab Ors. vs. Surinder Kumar Ors. (1992) 1 SCC 489, what is binding on all courts is what the Supreme Court says under Article 141 of the Constitution, which is declaration of the law and not what it does under Article 142 to do complete justice. 35. Furthermore, to quote V. Sudhish Pai from his book Constitutional Supremacy - A Revisit :- Judgments and observations in judgments are not to be read as Euclid s theorems or as provisions of statute. Judicial utterances/pronouncements are in the setting of the facts of a particular case. To interpret words and provisions of a statute it may become necessary for judges to embark upon lengthy discussions, but such discussion is meant to explain not define, Judges interpret statutes, their words are not to be interpreted as statutes. Thus, precedents are not to be read as statutes. 36. The proposition of law which emerges from the judgments referred to above is that the onus to rebut the presumption under Section 139 that the cheque has been issued in discharge of a debt or liability is on the accused and the fact that the cheque might be post dated does not absolve the drawer of a cheque of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t-accused, shows that initially there was mutual trust and faith between them. 42. In the absence of any finding that the cheque in question was not signed by the respondent-accused or not voluntarily made over to the payee and in the absence of any evidence with regard to the circumstances in which a blank signed cheque had been given to the appellant-complainant, it may reasonably be presumed that the cheque was filled in by the appellant-complainant being the payee in the presence of the respondent-accused being the drawer, at his request and/or with his acquiescence. The subsequent filling in of an unfilled signed cheque is not an alteration. There was no change in the amount of the cheque, its date or the name of the payee. The High Court ought not to have acquitted the respondent-accused of the charge under Section 138 of the Negotiable Instruments Act. 43. In our considered opinion, the High Court patently erred in holding that the burden was on the appellant-complainant to prove that he had advanced the loan and the blank signed cheque was given to him in repayment of the same. The finding of the High Court that the case of the appellant-complainant became highly doub ..... X X X X Extracts X X X X X X X X Extracts X X X X
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