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SUPREME COURT OF INDIA
ARAVIND KUMAR, S.V.N. BHATTI, JJ.
Rajesh Jain - Appellant
Versus
Ajay Singh - Respondent
Criminal Appeal No. 3126 of 2023 (@ Special Leave Petition (Crl.) No.12802 of 2022)
Decided on : 09-10-2023
(A) Constitution of India – Article 136 – Appeal by Special Leave – Scope and ambit – Court would not enter into credibility of evidence with a view to substitute its own opinion for that of High Court – Court would interfere where High Court has arrived at a finding of fact in disregard of a judicial process, principles of natural justice or a fair hearing or has acted in violation of a mandatory provision of law or procedure resulting in serious prejudice or injustice to accused. (Para 24)
(B) Indian Evidence Act, 1872 – Sections 102 and 114 – Burden of proof and presumptions – Legal burden is burden of proof which remains constant throughout a trial – It is burden of establishing facts and contentions which will support a party's case – If, at conclusion of trial a party has failed to establish these to appropriate standards, he would lose to stand – It is incumbent on plaintiff or complainant to prove what he pleaded or contends – On other hand, evidential burden may shift from one party to another as trial progresses according to balance of evidence given at any particular stage – Presumptions are of two kinds, presumptions of fact and of law – If in a case the Court has an option to raise presumption and raises presumption, distinction between two categories of presumptions ceases and fact is presumed, unless and until it is disproved. (Paras 30, 32 and 33)
(C) Negotiable Instruments Act, 1881 – Sections 138 and 139 – Dishonour of cheque – Appeal against acquittal – Execution of cheque is admitted – As soon as complainant discharges burden to prove that instrument was issued by accused for discharge of debt, presumptive device under Section 139 of Act helps shifting burden on accused – Until this evidential burden is discharged by accused, presumed fact will have to be taken to be true, without expecting complainant to do anything further – Accused is not expected to prove non-existence of presumed fact beyond reasonable doubt – Accused must meet standard of ‘preponderance of probabilities’, similar to a defendant in a civil proceeding – Accused has neither replied to demand notice nor has led any rebuttal evidence in support of his case – There is a fundamental flaw in the way both Courts below have proceeded to appreciate evidence on record – Once presumption under Section 139 was given effect to, Courts ought to have proceeded on the premise that cheque was issued in discharge of debt/liability – Impugned judgment of High Court set aside and complaint filed under Section 138 of Negotiable Instruments Act, 1881 allowed. (Paras 23, 38, 40, 47, 55 and 64)
Facts of the case:
Respondent-accused was tried for offence under Section 138 of Negotiable Instruments Act, 1881. Trial Court acquitted him. High Court dismissed appellant’s complainant's appeal and upheld order of acquittal. Challenging concurrent findings passed by Courts below, complainant has preferred this appeal.
Findings of Court:
Fundamental error in approach lies in fact that High Court has questioned want of evidence on part of complainant in order to support his allegation of having extended loan to accused, when it ought to have instead concerned itself with case set up by accused and whether he had discharged his evidential burden by proving that there existed no debt/liability at time of issuance of cheque.
Result : Appeal allowed.
Key Points: - The presumption under Section 139 NI Act is triggered once the complainant proves the instrument was issued for discharge of debt; the burden shifts to the accused to rebut (Sections 139, 118, Gimpex, Basalingappa) (!) (!) (!) (!) - The accused need not prove debt beyond reasonable doubt; the standard to rebut is preponderance of probabilities or provide a probable defense showing no debt/liability (Rangappa; Basalingappa; Kumar Exports) (!) (!) (!) - If the accused fails to rebut or provides no defense, the presumption can lead to conviction; if rebutted, the complainant must independently prove existence of debt/liability (!) - Courts must carefully frame the question of whether a legally valid and enforceable debt existed and whether the cheque was issued in discharge of that debt; misframing leads to erroneous outcomes (this case criticizes trial/high courts for incorrect framing) (!) (!) (!) - High Court and Trial Court findings can be interfered with under Article 136 only if there is error of law, violation of natural justice, or perverse conclusions; concurrent findings are usually not disturbed unless the legal framework was violated (!) (!) (!)
JUDGMENT :
1. Leave Granted.
2. The respondent-accused was tried for the offence under Section 138 of the Negotiable Instruments Act, 1881 (for short ‘NI Act’). The Trial Court acquitted1[Judgment and Order dated 17.12.2019 in Crl. Complaint No. 221 of 2017] him. The High Court dismissed the appellant’s complainant's appeal and upheld the order of acquittal2[Criminal Appeal No.148 of 2020 was dismissed by Hon’ble High Court of Gujarat by Judgment and Order dated 01.02.2021.]. Challenging the concurrent findings passed by the Courts below, the complainant has preferred this appeal.
Case of the Complainant
3. Mr. Ajay Singh (respondent-accused), along with his wife, is said to have approached the appellant-complainant (Mr. Rajesh Jain) on 01.03.2014 with a request for lending him money. The meeting is said to have been facilitated by Ms. Gita Sunar the sister-in-law of Mr. Singh who had been working as an employee under Mr. Rajesh Jain for nearly 15 years then. Mr. Rajesh Jain, appellant appearing in-person contended that he had lent a sum of Rs. 6 lacs on that day and has lent further sums thereafter, in the genuine belief that Mr. Ajay Singh would honour his promise of timely repayment and return the sum borrowed with interest, as agreed.
4. The respondent-accused failed to repay as per the timeline agreed. The complainant's efforts to recover his money were met with avoidance tactics. The accused is said to have changed his cellular telephone number without notice to the complainant, with the intent of evading his payment obligations. It is only in the year 2017, that the complainant managed to trace the accused-at which point, the accused sought for forgiveness and promised to repay the amounts borrowed along with interest, within three months. The accused had informed the complainant that he would source the funds to clear his outstanding dues by selling two plots of land he owns in Nepal, by taking a personal loan and from the 7th Pay Commission arrears that he was to receive.
5. Yet again, the accused defaulted on his promise. He was not to be found in his residential address. Having successfully concealed himself for about 7 months, the complainant appears to have located him at a new residential address. On direct confrontation, the accused is said to have issued a post-dated cheque No.163044 (dated 19.10.2017) for a sum of Rs.6,95,204/- towards part repayment of outstanding dues. The accused assured the complainant that the balance dues would be repaid by issuing a second cheque in the month of December 2017.
6. On its presentation, the cheque was returned with the endorsement 'Funds Insufficient. The complainant issued a demand notice through his counsel on 26.10.2017 and called upon the accused to make repayment of the cheque amount (Rs. 6,95,204) and other expenses incurred within 15 days. Since the demand was not complied with, a complaint under Section 138 NI Act was instituted on 29.11.2017, before the Court of Judicial Magistrate First Class (JMFC), Jind.
Proceedings before the Trial Court
7. The Trial Court took cognizance of the offence, summoned the accused and issued notice of accusation. The accused pleaded not guilty and claimed to be tried.
8. In support of his case, the complainant had examined himself as CW-1. Mr. Gulab Singh, a bank official at SBI, Jind branch office was examined as CW-2 and Ms. Gita Sunar as CW3. The complainant had also produced the relevant documentary evidence3 Ex.CW1/A-Cheque No.163044 dt.19.10.2017
Ex.CW1/B-Cheque return Memo dt. 01.11.2017
Ex.CWA/C- Copy of Bank passbook of complainant
Ex.CW1/D-Legal Notice dt. 26.10.2017
Ex.CW1/E-Postal Receipt dt. 28.10.2017
Ex.CW2/1-Statement of account of complainant Dr. Rajesh Jain w.e.f 01.10.2017 to 31.12.2017
Ex. CW2/2-Copy of Cheque Bonus Register] including the cheque in question, cheque return memo, copy of the bank passbook, demand notice, postal register, statement of accounts of the complainant and cheque returned register.
9. In his statement und
Dishonour of cheque – As soon as complainant discharges burden to prove that instrument was issued by accused for discharge of debt, presumptive device under Section 139 of Act helps shifting burden ....
The presumption of liability under the NI Act is rebuttable, and the burden of proof lies on the complainant to establish the existence of a legally enforceable debt.
The main legal point established in the judgment is that the presumption under Section 139 of the Negotiable Instruments Act is rebuttable, and the burden lies on the accused to raise a probable defe....
Admission of cheque execution triggers Sections 118/139 NI Act presumptions of debt; burden on accused to rebut by evidence; trial acquittal ignoring presumption and shifting onus to complainant is p....
The presumption under Section 139 of the NI Act that a cheque is issued for discharge of a debt or liability unless proven otherwise, and the accused's burden to raise a probable defense to rebut the....
Presumption under Section 139 of the Negotiable Instruments Act requires the accused to present credible evidence to rebut the holder's claim of legal liability regarding the cheque issued.
The presumption under Section 139 of the Negotiable Instruments Act is rebuttable and the accused can discharge the burden of proof by raising a probable defense.
The presumption under Section 139 of the NI Act mandates that a cheque is presumed to be issued for discharge of a debt unless the accused proves otherwise.
Dishonour of cheque – Whereas prosecution must prove guilt of an accused beyond all reasonable doubt, standard of proof so as to prove a defence on part of accused is preponderance of probabilities.
Presumption under Section 139 NI Act that cheque is for debt discharge holds unless rebutted by preponderance of probabilities; trial acquittal reversed for perversely ignoring defence witness confir....
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