Supreme Court: Appellate court should impose reasonable conditions while suspending sentence of convict

 It is also of some significance to note that whereas under Section 357(1) of the Code of Criminal Procedure a fine of Rs. 5000/- can be imposed; fine in terms of Section 357(2) thereof can be twice the amount of cheque whereas there is no upper limit for award of a compensation. But the same would be subject to other provisions of the Code of Criminal Procedure which mandates that the amount of fine imposed on an accused cannot be more than Rs. 5000/-. The very fact that the Parliament did not think it fit to put a ceiling limit in regard to the amount of compensation leviable upon an accused, the discretionary jurisdiction thereto must be exercised judiciously. Ordinarily, an accused shall not be taken in custody during trial. Thus, while exercising the appellate power, ordinarily, a person should not suffer imprisonment only because the conditions imposed for suspending the sentence are harsh.{Para 68}

69. We are of the opinion that having regard to the aforementioned factors the amount of compensation not only must be reasonable one, the conditions for suspending the sentence should also be reasonable. It is only with that intent in view, the doctrine of purposive construction should be applied.

70. We would, however, like to put a note of caution that the right of an accused unnecessarily need not be enlarged but it is the court's duty to duly protect his right.

72. We, therefore, are of the opinion:

i) In a case of this nature, Sub-section (2) of Section 357 of the Code of Criminal Procedure would be attracted even when Appellant was directed to pay compensation;

ii) The Appellate Court, however, while suspending the sentence, was entitled to put the appellant on terms. However, no such term could be put as a condition precedent for entertaining the appeal which is a constitutional and statutory right;

iii) The amount of compensation must be a reasonable sum;

iv) The Court, while fixing such amount, must have regard to all relevant factors including the one referred to in Sub-section (5) of 357 of the Code of Criminal Procedure;

v) No unreasonable amount of compensation can be directed to be paid.

 IN THE SUPREME COURT OF INDIA

Criminal Appeal No. 521 of 2007 

Decided On: 10.04.2007

Dilip S. Dahanukar Vs. Kotak Mahindra Co. Ltd. and Ors.

Hon'ble Judges/Coram:

S.B. Sinha and Dalveer Bhandari, JJ.

Author: S.B. Sinha, J.

Citation: [2007 (6) SCC 528],MANU/SC/1803/2007.

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Whether court can draw presumption that cheque was issued legally enforceable debt or liability if accused admits his signature on cheque?

Coming back to the facts in the present case and considering the fact that the Accused has admitted the issuance of the cheques and his signature on the cheque and that the cheque in question was issued for the second time, after the earlier cheques were dishonoured and that even according to the Accused some amount was due and payable, there is a presumption Under Section 139 of the N.I. Act that there exists a legally enforceable debt or liability. of course such presumption is rebuttable in nature. However, to rebut the presumption the Accused was required to lead the evidence that full amount due and payable to the complainant has been paid. In the present case, no such evidence has been led by the Accused. The story put forward by the Accused that the cheques were given by way of security is not believable in absence of further evidence to rebut the presumption and more particularly the cheque in question was issued for the second time, after the earlier cheques were dishonoured. Therefore, both the courts below have materially erred in not properly appreciating and considering the presumption in favour of the complainant that there exists legally enforceable debt or liability as per Section 139 of the N.I. Act. It appears that both, the Learned Trial Court as well as the High Court, have committed error in shifting the burden upon the complainant to prove the debt or liability, without appreciating the presumption Under Section 139 of N.I. Act. As observed above, Section 139 of the Act is an example of reverse onus Clause and therefore once the issuance of the cheque has been admitted and even the signature on the cheque has been admitted, there is always a presumption in favour of the complainant that there exists legally enforceable debt or liability and thereafter it is for the Accused to rebut such presumption by leading evidence.

IN THE SUPREME COURT OF INDIA

Criminal Appeal Nos. 271 and 272 of 2020

Decided On: 14.02.2020

APS Forex Services Pvt. Ltd. Vs.  Shakti International Fashion Linkers and Ors.

Hon'ble Judges/Coram:

Ashok Bhushan and M.R. Shah, JJ.

Citation: MANU/SC/0179/2020

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Whether court can raise presumption U/S 139 of NI Act even if there is no pleading in complaint?

The use of the phrase “until the contrary is proved” in Section
118 of the Act and use of the words “unless the contrary is
proved” in Section 139 of the Act read with definitions of “may
presume” and “shall presume” as given in Section 4 of the
Evidence Act, makes it at once clear that presumptions to be
raised under both the provisions are rebuttable. When a
presumption is rebuttable, it only points out that the party on
whom lies the duty of going forward with evidence, on the fact
presumed and when that party has produced evidence fairly and
reasonably tending to show that the real fact is not as presumed,
the purpose of the presumption is over.
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 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 nonexistence
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.” [underlining
added].
18. In the present case, by examining himself as PW-1, the
complainant has discharged the initial burden cast upon him
that the cheques were issued for the rice bags purchased on
credit. With the examination of PW-1, the statutory
presumption under Section 139 of the Act arises that the
cheques were issued by the respondent-accused for the
discharge of any debt or other liability in whole or in part. The
courts below disbelieved the evidence of the complainant on
the ground that there are no averments in the complaint that
the commodities were sold for cash and that the rice bags were
sold on credit and the cheques were issued for the goods sold
on credit. Though the complaint contains no specific
averments that the cheques were issued for the purchase
made on credit, in his evidence, PW-1 clearly stated that the
cheques were issued for the commodities purchased on credit.

The courts below erred in brushing aside the evidence of PW-1
on the ground that there were no averments in the complaint as
to the purchases made by cash and purchase. The courts
below also erred in not raising the statutory presumption under
Section 139 of the Act that the complainant received the
cheques to discharge the debt or other liability in whole or in
part.
19. It is for the respondent-accused to adduce evidence to
prove that the cheques were not supported by consideration
and that there was no debt or liability to be discharged by him.
The receipts-Ex.-22/C (colly) relied upon by the respondentaccused
do not create doubt about the purchases made on
credit and the existence of a legally enforceable debt for which
the cheques were issued. The courts below erred in saying
that by the receipts-Ex.22/C (colly), the respondent-accused
has rebutted the statutory presumption raised under Section
139 of the Negotiable Instruments Act. The oral and the
documentary evidence adduced by the complainant are
sufficient to prove that it was a legally enforceable debt and that
the cheques were issued to discharge the legally enforceable

debt. With the evidence adduced by the complainant, the
courts below ought to have raised the presumption under
Section 139 of the Act. The evidence adduced by the
respondent-accused is not sufficient to rebut the presumption
raised under Section 139 of the Act. The defence of the
respondent that though he made payment for the
commodities/rice bags, the blank cheques were not returned by
the appellant-complainant is quite unbelievable and
unacceptable. The impugned judgment of the High Court
cannot be sustained and is liable to be set aside. 
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NOS.61-62 OF 2011

M/S SHREE DANESHWARI TRADERS  Vs  SANJAY JAIN AND ANOTHER 

R . BANUMATHI, J.
Dated:August 21, 2019.

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Whether complainant should prove source of fund in cheque dishonour case if accused has not discharged presumption U/S 139 of NI Act?

 Hereinabove, we have examined in detail the findings of the Trial Court
and those of the High Court and have no hesitation in concluding that the
present one was clearly a case where the decision of the Trial Court suffered
from perversity and fundamental error of approach; and the High Court was
justified in reversing the judgment of the Trial Court. The observations of the
Trial Court that there was no documentary evidence to show the source of
funds with the respondent to advance the loan, or that the respondent did not
record the transaction in the form of receipt of even kachcha notes, or that
there were inconsistencies in the statement of the complainant and his
witness, or that the witness of the complaint was more in know of facts etc.
would have been relevant if the matter was to be examined with reference to
the onus on the complaint to prove his case beyond reasonable doubt. These
considerations and observations do not stand in conformity with the
presumption existing in favour of the complainant by virtue of Sections 118
and 139 of the NI Act. Needless to reiterate that the result of such
presumption is that existence of a legally enforceable debt is to be presumed
in favour of the complainant. When such a presumption is drawn, the factors
relating to the want of documentary evidence in the form of receipts or
accounts or want of evidence as regards source of funds were not of relevant
consideration while examining if the accused has been able to rebut the
presumption or not. 

REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 508 OF 2019


ROHITBHAI JIVANLAL PATEL VS. STATE OF GUJARAT 

Dinesh Maheshwari, J.
Dated: 15th March, 2019.

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Whether it is permissible for complainant to fill up details of cheque beyond knowledge of accused?

In other words it would be certainly unlawful if a complainant is allowed to fill up details of cheque beyond the knowledge of the accused such that filling up date and the amount in a blank cheque.

19. In this regard it would be useful to look into the decision of this Court reported in 2011 ACD 1326 (MADRAS) P. Krishnasamy v. Deltaknit Wearable's, wherein it was held that to presume under section 139 of the N.I Act due execution of Negotiable Instrument is to be proved. Due execution means not signing a cheque but mean to give a cheque in complete form towards a legally enforceable liability.

20. It would also be useful to look into a decision of Kerala High Court 2011 ACD 1136 relying upon the decision of the Hon'ble Apex Court reported in (2003) 8 SCC 745 : AIR 2004 SC 175 and (1996) 4 SCC 596 : AIR 1996 SC 2184 holding that the procedural approach as though mere production of cheque proves all the relevant facts which prosecution must establish in a prosecution is an incorrect approach.

21. Thus firstly the complainant must allege and prove the due execution of the cheque by accused and the allegations must be established by way of evidence. In the case on hand as stated above, the complainant had utterly failed to satisfy the Court that there was due execution of cheque. The figure denoting amount found to be written in different inks and the handwriting in as much as the digits and words also differs. The different ink, pen and manipulation of the amount would show that the complainant had failed to demonstrate due execution of the cheque. Therefore, I do not find any error or illegality over the impugned order of acquittal made by the lower appellate Court.

In the High Court of Madras

(Before M.V Muralidaran, J.)

E. Dhanuskodi  v.  D. Sreedhar 

Criminal Appeal No. 814 of 2011

Decided on November 8, 2018,

Citation: 2018 SCC OnLine Mad 5124

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Whether court should draw presumption U/S 139 of NI Act if execution of cheque is proved?

The learned counsel for the respondent admitted that execution of the 

cheque and also the signature found in the cheque.  Therefore, once execution 

of cheque is admitted, it is a legal presumption under Section 139 of 

Negotiable Instrument Act.  The cheque was issued for discharging legally 

enforceable debt.  No doubt the presumption is rebuttable. Though, admitted 

that the said cheque was issued for only security purpose and the respondent 

was only a working partner and he has not invested or contributed any money 

to the partnership firm.  Therefore, at the time of admitting him in the 

firm, the respondent had executed the cheque for the security purpose. 

7.Once issuance of  cheque is being admitted and even for security 

purpose, the presumption under Sections 118 and 139 of Negotiable Instrument 

Act and it is for the accused has to rebut the presumption there is no 

legally enforceable debt and cheque has not been issued for legally 

enforceable debt.  Therefore, the contention raised by the learned counsel 

for the respondent is not acceptable and the authorities submitted by the 

respondent is not applicable for present case in the hand.

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

DATED: 19.01.2019

CORAM

 MR. JUSTICE P.VELMURUGAN

Crl.A.(MD).No.179 of 2008

A.K.Mohammed Farook    Vs. M.Syed Jaheer Hussain  

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Whether Presumption u/s 139 of Negotiable Instruments Act can be rebutted by mere denial?

This Court held that the Accused may adduce evidence to rebut the presumption, but mere denial regarding existence of debt shall not serve any purpose. Following was held in paragraph 20:

20....The Accused may adduce direct evidence to prove that the note in question was not 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...

IN THE SUPREME COURT OF INDIA

Criminal Appeal No. 803 of 2018 (Arising out of SLP (Crl.) No. 10030 of 2016)

Decided On: 02.07.2018

Kishan Rao Vs. Shankargouda

Hon'ble Judges/Coram:

A.K. Sikri and Ashok Bhushan, JJ.

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What is importance of S 139 of NI Act in appreciation of evidence in cheque dishonour case?

This approach of the Magistrate does not seem to be
proper or in accordance with law.  It was not necessary to go into
the nature of the transaction or understanding between Balvinder

Singh   and   the   complainant,   inasmuch   as   the   accused   had
admittedly issued a cheque in favour of the complainant and not
in   favour   of   Balvinder   Singh.     The   concept   of   any   privity   of
contract, as introduced by the Magistrate was not called for, as the
question was whether the cheque in question was issued by the
accused in discharge of a legally enforceable debt or other liability.
In ascertaining this, the presumption contained in section 139 of
the Negotiable Instruments Act was required to be kept in mind,
but a perusal of the impugned judgment shows that the same was
not kept in mind or, at any rate, not given due weight by the
learned Magistrate in appreciating the evidence.
15 It is not that the Magistrate came to the conclusion
that there was no transaction at all between the parties; but he
came to the conclusion that the transaction was 'between Balvinder
Singh and the accused'.  Even if that would be so, since the accused
was not required to pay the amount to Balvinder Singh, but to the
complainant, the consideration that the transaction was between
Balvinder  Singh and the  accused was not relevant in  deciding
whether   the   cheque   had   been   issued   in   discharge   of   legally
enforceable debt or other liability.   It was not the case that in
respect   of   the   alleged   transaction   between   him   and   the   said
Balvinder Singh, the accused had paid, or was required to pay
anything to the said Balvinder Singh.
16 The learned counsel for the appellant also pointed out
that the observation made by the Magistrate in paragraph no.9 of
the impugned judgment which reads as “promissory note on the
record   is   also   issued   in   the   name   of   Balvinder   Singh”,   is   not

correct.  It is pointed out that the promissory note has been issued
jointly in the name of the complainant and the said Balvinder
Singh.     On examining the promissory note, copy of which is at
Exhibit­A, I find that this claim made by the learned counsel for
the complainant is correct.  
17 I   find   that   the   accused   has   been   evasive   in   his
evidence.     Though   he   spoke   about   the   cheques   having   been
'misplaced' and claimed that he had not issued any cheque or
promissory note in favour of the complainant, he avoided to say
whether the signature on the cheque and/or on the promissory
note was his or not.  He also avoided to say whether, according to
him, when the cheques were misplaced, they were already signed
by him.  In the cross­examination of the complainant also,  he did
not put forth a case that the signature on the promissory note and
more particularly  on the cheque, was not his.  In fact, he admitted
of having entered into a transaction, but claimed that it was with
Balvinder Singh.   A suggestion was given by the accused in the
cross­examination to the effect that 'it was Balvinder Singh who
was required to file a complaint in respect of the dishonor of the
cheque'.  This indicates and amounts to an admission on the part of
the accused of having entered into some money transaction. 
18 In my opinion, the Magistrate has not given due and
proper weight to the presumption contained in section 139 of the
Negotiable Instruments Act while appreciating the evidence.   The
said presumption is statutory and when there was no denial of the
accused having signed the cheque, to render it probable that the
cheque   might   have   been   signed   by   the   accused   without   any

amount   being   due   and   payable   by   him   to   the   complainant,
sounder grounds were necessary.  The Magistrate simply took into
consideration the assertions of the accused to the effect that the
complainant had misused the cheque, without there being any
basis for accepting such assertions.   Even if the accused is not
required   to   prove   his   assertions,   he   is   required   to   create   a
reasonable doubt about the truth of the complainant's case, which
is possible only if the assertions are considered as 'plausible'.  The
accused did not dispute his signature on the cheque, and took
various   inconsistent   defences   one   of   which   was   that   'the
transaction was not with the complainant but was with Balvinder
Singh'   and   that   therefore,   'examining   Balvinder   Singh   was
necessary'.  
19 Upon   re­appreciation   of   the   evidence   that   was
adduced   during   the   trial,   I   find   that   the   complainant   had
succeeded in proving the case against the accused.  The accused
had not been able to create a reasonable doubt to the effect that
the cheque might not have been issued in discharge of a legally
enforceable debt or other liability.  This was a case where keeping
in   mind  the   presumption   under   section  139  of  the   Negotiable
Instruments Act, the accused ought to have been convicted.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO.477 of 2011
Bharati Walia 
V
Krishan Mamlal Kapoor and anr
­­­
   CORAM :  ABHAY M. THIPSAY, J.
DATED  :  2nd FEBRUARY, 2016
­­­
Citation:2016 ALLMR(CRI)4750

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