SC: mere denial of debt not sufficient to acquit accused in cheque bouncing case


The Supreme Court of India comprising a bench of Justice A.K Sikri and Justice Ashok Bhushan in the case of Kishan Rao v. Shankargouda (Criminal Appeal No. 802 of 2018) has held that a mere denial of the existence of debt by the accused is not sufficient to acquit the accused and that under Section 139 of the Negotiable Instruments Act, there is a presumption that the accused had issued the cheque for the discharge of some debt or liability and if the accused leads on evidence for his defense rebutting this presumption, then he can be convicted.

In the instant case, the accused had issued a cheque of Rs. 2,00,000/- to the complainant which when the latter presented to the bank was returned dishonored as “insufficient funds”. The complainant gave a notice to the accused u/s 138 of the Negotiable Instruments Act to which the accused replied that the cheque in possession of the complainant was stolen by him. The complainant accordingly filed the case and led oral as well as documentary evidence but the accused did not lead any evidence and the Trial Court convicted the accused on the basis of the presumption u/s 139 of the N.I. Act.

The accused went in appeal where the appellate court upheld the judgment of the Magistrate and thereafter when in revision to the High Court. The High Court reversed the conviction of the accused in the revision and acquitted the accused on the ground that the “accused has been successful in creating doubt in the mind of the court with regard to the existence of debt or liability”.

The complainant preferred a Special Leave Petition in the Supreme Court challenging the order of the High Court.

The Supreme Court held that

“12. …The High Court in exercise of its revisional jurisdiction shall not interfere with the order of the Magistrate unless it is perverse or wholly unreasonable or there is non-consideration of any relevant material, the order cannot be set aside.”

“15. The High Court has not returned any finding that order of conviction based on evidence on record suffers from any perversity or based on no material or there is other valid ground for exercise of revisional jurisdiction. There is no valid basis for the High Court to hold that the accused has been successful in creating doubt in the mind of the Court with regard to the existence of the debt or liability. The appellant has proved the issuance of cheque which contained signatures of the accused on the presentation of the cheque, the cheque was returned with endorsement “insufficient funds”. Bank Official was produced as one of the witnesses who proved that the cheque was not returned on the ground that it did not contain signatures of the accused rather it was returned due to insufficient funds. We are of the view that the judgment of the High Court is liable to be set aside on this ground alone.

Further the Supreme Court observed that,

“22. No evidence was led by the accused. The defence taken in the reply to the notice that cheque was stolen having been rejected by the two courts below, we do not see any basis for the High court coming to the conclusion that the accused has been successful in creating doubt in the mind of the Court with regard to the existence of the debt or liability. How the presumption under Section 139 can be rebutted on the evidence of PW.1, himself has not been explained by the High court.

23. In view of the aforesaid discussion, we are of the view that the High Court committed error in setting aside the order of conviction in exercise of revisional jurisdiction. No sufficient ground has been mentioned by the High Court in its judgment to enable it to exercise its revisional jurisdiction for setting aside the conviction.”

Click here to read the judgment.

About Alabhya Dhamija

AvatarAlabhya is an Advocate practicing at Delhi High Court and other courts in Delhi. Contact:

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