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Supreme Court of India
N. Vijay Kumar vs Vishwanath Rao N on 22 April, 2025
Author: Sanjay Karol
Bench: Sanjay Karol, Pankaj Mithal
2025 INSC 537
NON-REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 5305 OF 2024
N. VIJAY KUMAR … APPELLANT
Versus
VISHWANATH RAO N. … RESPONDENT
JUDGMENT
SANJAY KAROL J.
1. The present appeal is filed assailing the judgment dated
21st December 2020 passed by the High Court of Karnataka at
Bengaluru in Criminal Appeal No.94 of 2011, whereby the High
Court reversed the order of acquittal passed by the Court of XV
Signature Not Verified Additional Chief Metropolitan Magistrate, Bangalore City1 and
Digitally signed by
RAJNI MUKHI
Date: 2025.04.22
17:13:35 IST
Reason: 1
Hereinafter referred to as ‘Trial Court’
Crl.Appeal No.5305/2024 Page 1 of 21
convicted the appellant-accused under Section 138 of the
Negotiable Instruments Act, 18812.
2. The factual matrix giving rise to the present appeal is as
follows :
2.1. The appellant3 and the respondent4 had known each
other for over a decade and shared a friendly relationship.
The case of the complainant is that he extended a hand loan
of Rs.20,00,000/- (twenty lakh rupees) to the accused, to
help him produce a Kannada feature film titled ‘Indian
Police History’. In discharge of this alleged loan, the
accused issued a cheque bearing No.015138, dated 14th
October 2008, in favour of the complainant. However, upon
presentation for encashment, the cheque was dishonoured
on 20th October 2008 with an endorsement ‘Refer to
Drawer’, indicating insufficient funds in the accused’s
account.
2.2. Consequently, the complainant issued a statutory
legal notice dated 25th October 2008, demanding repayment
of the amount. The accused, through his reply dated 7th
November 2008, denied any liability and raised the
following contentions:
2
Hereinafter the ‘N.I. Act’
3
Hereinafter referred to as the ‘Accused’
4
Hereinafter referred to as the ‘Complainant’Crl.Appeal No.5305/2024 Page 2 of 21
(i) The cheque in question was issued merely as
a security instrument for a smaller loan of
Rs.3,50,000/- (three lakh fifty thousand rupees),
availed by the appellant-accused for production of
Indian Police History, which was completed in 2003.
This loan had already been settled in terms of a
Memorandum of Understanding (MoU) dated 29th
March 2008, which recorded a full and final settlement
of Rs.5,50,000/- (five lakh fifty thousand rupees),
inclusive of interest.
(ii) At the time of availing the said loan of
Rs.3,50,000/-, the accused had handed over two blank
signed cheques to the complainant as security.
However, when the accused sought their return upon
signing the MoU, the complainant informed him that
the cheques had been misplaced but assured that they
would not be misused. The same was also recorded in
the MoU. It was only upon receiving the legal notice,
that the accused became aware that the complainant
had allegedly misused one of these cheques.
(iii) The accused had lodged a police complaint,
being NCR No.256/2008 dated 24th July 2008,
reporting the loss of the two cheques at the instance of
Crl.Appeal No.5305/2024 Page 3 of 21
the complainant and alleging that the complainant had
failed to return them despite repeated requests.
2.3. Since the alleged amount remained unpaid, the
complainant preferred a complaint against the accused
under Section 200 of the Code of Criminal Procedure 19735,
being CC No.1191 of 2009, before the Trial Court, in
relation to an offence punishable under Section 138 of the
N.I. Act.
2.4. After considering the oral and documentary
evidence, the Trial Court vide judgment dated 20th
November 2010, acquitted the accused, holding that the
accused had successfully rebutted the presumption under
Section 139 of the N.I. Act. To hold the same, reliance was
placed on Rangappa v. Sri Mohan6. The relevant extract of
the Trial Court judgment in the instant case is as follows :
“I have gone through the said decision very carefully
with due respect to their lordships. The ratio laid down
in the aforesaid decision is applicable and supports the
defence taken by the accused. Thus over all materials
available on record and under the facts and
circumstances of the case, the arguments advanced by
the learned Counsel for the complainant does not holds
water except Ex. D.2. Wherein the arguments advanced
by the learned counsel for the accused holds water.
Hence a doubt has arised in the mind of the court about
the alleged loan amount of Rs. 20 lakhs to the accused.
Hence the accused has rebutted the presumption U / s.
5
For short ‘CrPC’
6
(2010) 11 SCC 441Crl.Appeal No.5305/2024 Page 4 of 21
118 and 139 of NI Act and proves that there is no
existence of legally recoverable debt by the accused to
the complainant by relying upon the oral evidence of pw.
1, DWs. 1 to 3 and documents available on record.”
2.5. Aggrieved by the said order of acquittal, the
complainant preferred an appeal before the High Court
bearing Criminal Appeal No.94/2011. Vide the impugned
judgment dated 21st December 2020, the High Court
reversed the finding of acquittal returned by the Trial Court
and convicted the accused for an offence punishable under
Section 138 of the N.I. Act and directed him to pay
Rs.22,00,000/- (twenty two lakh rupees) within eight weeks,
in default whereof he was to undergo simple imprisonment
for one year. The reasoning for such a conclusion, as can
be understood from the perusal of the judgment, is that :
“30. Having taken note of the evidence of DW.2,
it is clear that the amounts are not given to the
complainant. DW.3 though in his evidence, he says that
the amount was paid in his presence and the complainant
has affixed the signature on Ex.D2. It is elicited in the
cross-examination that he does not know anything about
the payment of money by the complainant to the accused
and also how much amount was paid to him, but he
claims that the complainant told him that the accused has
availed an amount of Rs.3,50,000/- and insisted him to
get the money from the accused. He also claims that in
the Hotel, it was decided to return the amount of
Rs.5,50,000/-. All of them have signed the documents in
the Kanishka Hotel, DW.2 was also present and he
claims that an amount of Rs.2 lakhs was paid, but he
came to know that already an amount of Rs.3,50,000/-
was paid prior to that. DW.2 says that in his presence theCrl.Appeal No.5305/2024 Page 5 of 21
amount was not paid and he subsequently signed the
documents-Exs.D2. But DW.3 claims that in his
presence only after receiving the amount of Rs.2 Lakhs,
the complainant has signed the documents. It is
suggested that while signing the document – Ex.D2, the
complainant was not present and the same was denied.
DW.1 himself says that he obtained the signature of
DWs.2 and 3 after the complainant left the place by
receiving the money. There are material contradictions
in the evidence of DWs.1 to 3 for having repaid the
amount of Rs.5,50,000/-. Though, the accused relies
upon the document-Ex.D2, it is proved that the said
document is forged and the evidence of the handwriting
expert is unchallenged and also the accused did not
examine the handwriting expert and did not dispute the
opinion of the handwriting expert. When such being the
case, the evidence of the accused cannot be relied upon
and the Court cannot give any credence to the evidence
of DW.1. For having repaid the amount, the evidence of
DWs. 1 to 3 are contradictory to each other and even the
document-Ex.D2 came into existence is also under the
suspicious circumstances. The trial Judge has failed to
appreciate these materials before the Court.
31. The Trial Judge though considered the
Judgment in Rangappa‘s case (supra), an observation
has been made that the ratio laid down in the aforesaid
decision is applicable and supports the defense taken by
the accused. The very observation is erroneous. How it
supports the case of the defense has not been stated in
the judgment. Instead of that the same judgment is
helpful to the complainant since the complainant has
caused the legal notice in terms of Ex.P4 and also
produced Ex.PS-Postal receipt, Ex.P6-UCP receipts,
Ex.P7- notice and Ex.P7(a)-envelope.
32. The Judgment of this Court in Sri Yogesh
Poojary’s case (supra), is aptly applicable to the case on
hand with regard to the service of notice is concerned
and so also the Apex Court in the Judgment of
Rangappa‘s case (supra), categorically held that when
the notice is issued and the accused did not dispute theCrl.Appeal No.5305/2024 Page 6 of 21
issuance of cheque and signature, the presumption
available in favour of the complainant unless the
evidence of the complainant is rebutted. In the case on
hand, though the accused made all efforts to rebut the
case of complainant nothing is elicited in the cross-
examination of PW.1 and instead of the evidence, which
he has adduced as DW.1 and also DWs.2 and 3 and the
same falsifies the case of the accused. The very defense
of the accused is that in one breath he borrowed an
amount of Rs.3 Lakhs and in another breath an amount
of Rs.3,50,000/-, totally, repaid the amount of
Rs.5,50,000/-, In view of the admission, it is narrow
down the case of the complainant since the accused
admitted the transaction but only the defense is that he
repaid the amount of Rs.5,50,000/-.”
OUR VIEW
3. In the present special leave petition, while passing order
on the application seeking exemption from surrendering, learned
Judge in Chambers vide order dated 15th March 2021 directed
Rs.11,00,000/- (eleven lakh rupees) to be deposited with the
Registry without prejudice to the rights and contentions. Notice
was issued on 12th April 2021, and the remaining amount of
Rs.9,00,000/- (the total disputed amount being, allegedly, twenty
lakh) was directed to be deposited within eight weeks. The
operation of the impugned judgment was stayed. The amount
stood deposited in the Registry of this Court.
4. We have heard learned counsel for the parties and perused
the written submissions and material on record. The primary
question to be considered is as to whether, in the instant facts, the
Crl.Appeal No.5305/2024 Page 7 of 21
accused has been able to discharge the burden under Sections 118
(a) and 139 of the N.I. Act and whether the High Court was
justified in overturning the order of acquittal passed by the Trial
Court.
5. The N.I. Act raises two presumptions, one under Section
118; and the other in Section 139 thereof. The Sections 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;
x x x
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.”
6. Section 118 (a) assumes that every negotiable instrument
is made or drawn for consideration, while Section 139 creates a
presumption that the holder of a cheque has received the cheque
in discharge of a debt or liability. Presumptions under both are
rebuttable, meaning they can be rebutted by the accused by
raising a probable defence. This Court through various
Crl.Appeal No.5305/2024 Page 8 of 21
pronouncements, has consistently clarified the nature and extent
of these presumptions and the standard of proof required by the
accused to rebut them. We may consider a few such
pronouncements.
6.1. In Mallavarapu Kasivisweswara Rao v.
Thadikonda Ramulu Firm7, this Court observed as under :
“17. Under Section 118(a) of the Negotiable Instruments
Act, the court is obliged to presume, until the contrary is
proved, that the promissory note was made for
consideration. It is also a settled position that the initial
burden in this regard lies on the defendant to prove the
non-existence of consideration by bringing on record
such facts and circumstances which would lead the court
to believe the non-existence of the consideration either
by direct evidence or by preponderance of probabilities
showing that the existence of consideration was
improbable, doubtful or illegal. In this connection,
reference may be made to a decision of this Court
in Bharat Barrel & Drum Mfg. Co. v. Amin Chand
Payrelal [(1999) 3 SCC 35] . In para 12 of the said
decision, this Court observed as under : (SCC pp. 50-51)“12. Upon consideration of various
judgments as noted hereinabove, the
position of law which emerges is that once
execution of the promissory note is admitted,
the presumption under Section 118(a) would
arise that it is supported by a consideration.
Such a presumption is rebuttable. The
defendant can prove the non-existence of a
consideration by raising a probable defence.
If the defendant is proved to have discharged
the initial onus of proof showing that the
existence of consideration was improbable
or doubtful or the same was illegal, the onus7
(2008) 7 SCC 655Crl.Appeal No.5305/2024 Page 9 of 21
would shift to the plaintiff who will be
obliged to prove it as a matter of fact and
upon its failure to prove would disentitle him
to the grant of relief on the basis of the
negotiable instrument. The burden upon the
defendant of proving the non-existence of
the consideration can be either direct or by
bringing on record the preponderance of
probabilities by reference to the
circumstances upon which he relies. In such
an event, the plaintiff is entitled under law to
rely upon all the evidence led in the case
including that of the plaintiff as well. In case,
where the defendant fails to discharge the
initial onus of proof by showing the non-
existence of the consideration, the plaintiff
would invariably be held entitled to the
benefit of presumption arising under Section
118(a) in his favour. The court may not insist
upon the defendant to disprove the existence
of consideration by leading direct evidence
as the existence of negative evidence is
neither possible nor contemplated and even
if led, is to be seen with a doubt. The bare
denial of the passing of the consideration
apparently does not appear to be any
defence. Something which is probable has to
be brought on record for getting the benefit
of shifting the onus of proving to the
plaintiff. To disprove the presumption, the
defendant has to bring on record such facts
and circumstances upon consideration of
which the court may either believe that the
consideration did not exist or its non-
existence was so probable that a prudent man
would, under the circumstances of the case,
shall act upon the plea that it did not exist.”
From the above decision of this Court, it is pellucid that
if the defendant is proved to have discharged the initial
onus of proof showing that the existence of consideration
was improbable or doubtful or the same was illegal, the
Crl.Appeal No.5305/2024 Page 10 of 21
onus would shift to the plaintiff who would be obliged
to prove it as a matter of fact and upon its failure to prove
would disentitle him to the grant of relief on the basis of
the negotiable instrument. It is also discernible from the
above decision that if the defendant fails to discharge the
initial onus of proof by showing the non-existence of the
consideration, the plaintiff would invariably be held
entitled to the benefit of presumption arising under
Section 118(a) in his favour.”
(Emphasis Supplied)
6.2. In Kumar Exports v. Sharma Carpets8, this Court
examined the presumptions raised by the N.I. Act, and held
as follows :
“18. Applying the definition of the word “proved”
in Section 3 of the Evidence Act to the provisions of
Sections 118 and 139 of the Act, it becomes evident that
in a trial under Section 138 of the Act a presumption will
have to be made that every negotiable instrument was
made or drawn for consideration and that it was executed
for discharge of debt or liability once the execution of
negotiable instrument is either proved or admitted. As
soon as the complainant discharges the burden to prove
that the instrument, say a note, was executed by the
accused, the rules of presumptions under Sections 118
and 139 of the Act help him shift the burden on the
accused. The presumptions will live, exist and survive
and shall end only when the contrary is proved by the
accused, that is, the cheque was not issued for
consideration and in discharge of any debt or liability. A
presumption is not in itself evidence, but only makes a
prima facie case for a party for whose benefit it exists.
19. 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”8
(2009) 2 SCC 513Crl.Appeal No.5305/2024 Page 11 of 21
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 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
Crl.Appeal No.5305/2024 Page 12 of 21
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.
21. The accused has also an option to prove the non-
existence of consideration and debt or liability either by
letting in evidence or in some clear and exceptional
cases, from the case set out by the complainant, that is,
the averments in the complaint, the case set out in the
statutory notice and evidence adduced by the
complainant during the trial. Once such rebuttal
evidence is adduced and accepted by the court, having
regard to all the circumstances of the case and the
preponderance of probabilities, the evidential burden
shifts back to the complainant and, thereafter, the
presumptions under Sections 118 and 139 of the Act will
not again come to the complainant’s rescue.”
(Emphasis Supplied)
6.3. A three-Judge Bench of this Court in Rangappa
(supra) had the occasion to consider Section 139
elaborately. The Court reiterated that where the signature
on the cheque is acknowledged, a presumption has to be
raised that the cheque pertained to a legally enforceable debt
or liability, however, this presumption is of a rebuttal nature
and the onus is then on the accused to raise a probable
defence. It was further stated that :
“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 theCrl.Appeal No.5305/2024 Page 13 of 21
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 or proof.
28. In the absence of compelling justifications, reverse
onus clauses usually impose an evidentiary burden and
not a persuasive burden. Keeping this in view, it is a
settled position that when an accused has to rebut the
presumption under Section 139, the standard of proof for
doing so is that of “preponderance of probabilities”.
Therefore, if the accused is able to raise a probable
defence which creates doubts about the existence of a
legally enforceable debt or liability, the prosecution can
fail. As clarified in the citations, the accused can rely on
the materials submitted by the complainant in order to
raise such a defence and it is conceivable that in some
cases the accused may not need to adduce evidence of
his/her own.”
6.4. T.S. Thakur J., (as his lordship then was) in his
supplementing opinion in Vijay v. Laxman9, observed as
under:
“20. The High Court has rightly accepted the version
given by the respondent-accused herein. We say so for
reasons more than one. In the first place the story of the
complainant that he advanced a loan to the respondent-
accused is unsupported by any material leave alone any
documentary evidence that any such loan transaction had9
(2013) 3 SCC 86Crl.Appeal No.5305/2024 Page 14 of 21
ever taken place. So much so, the complaint does not
even indicate the date on which the loan was demanded
and advanced. It is blissfully silent about these aspects
thereby making the entire story suspect. We are not
unmindful of the fact that there is a presumption that the
issue of a cheque is for consideration. Sections 118 and
139 of the Negotiable Instruments Act make that
abundantly clear. That presumption is, however,
rebuttable in nature. What is most important is that the
standard of proof required for rebutting any such
presumption is not as high as that required of the
prosecution. So long as the accused can make his version
reasonably probable, the burden of rebutting the
presumption would stand discharged. Whether or not it
is so in a given case depends upon the facts and
circumstances of that case. It is trite that the courts can
take into consideration the circumstances appearing in
the evidence to determine whether the presumption
should be held to be sufficiently rebutted. The legal
position regarding the standard of proof required for
rebutting a presumption is fairly well settled by a long
line of decisions of this Court.”6.5. This Court in the case of Baslingappa v.
Mudibasappa10, summarized the principles on
Sections 118(a) and 139 of the N.I. Act. The same is
reproduced with profit as under :
“25. We having noticed the ratio laid down by this Court
in the above cases on Sections 118(a) and 139, we now
summarise the principles enumerated by this Court in
following manner:
25.1. Once the execution of cheque is admitted Section
139 of the Act mandates a presumption that the cheque
was for the discharge of any debt or other liability.
10
(2019) 5 SCC 418
Crl.Appeal No.5305/2024 Page 15 of 21
25.2. The presumption under Section 139 is a rebuttable
presumption and the onus is on the accused to raise the
probable defence. The standard of proof for rebutting the
presumption is that of preponderance of probabilities.
25.3. To rebut the presumption, it is open for the accused
to rely on evidence led by him or the accused can also
rely on the materials submitted by the complainant in
order to raise a probable defence. Inference of
preponderance of probabilities can be drawn not only
from the materials brought on record by the parties but
also by reference to the circumstances upon which they
rely.
25.4. That it is not necessary for the accused to come in
the witness box in support of his defence, Section 139
imposed an evidentiary burden and not a persuasive
burden.
25.5. It is not necessary for the accused to come in the
witness box to support his defence.”
6.6. Recently, a coordinate Bench of this Court in
Rajaram v. Maruthachalam11, through Gavai J., observed
as under :
“27. It can thus be seen that this Court has held that once
the execution of cheque is admitted, Section 139 of
the N.I. Act mandates a presumption that the cheque was
for the discharge of any debt or other liability. It has
however been held that the presumption under Section
139 is a rebuttable presumption and the onus is on the
accused to raise the probable defence. The standard of
proof for rebutting the presumption is that of
preponderance of probabilities. It has further been held
that to rebut the presumption, it is open for the accused
to rely on evidence led by him or the accused can also
rely on the materials submitted by the complainant in
order to raise a probable defence. It has been held that11
(2023) 16 SCC 125Crl.Appeal No.5305/2024 Page 16 of 21
inference of preponderance of probabilities can be drawn
not only from the materials brought on record by the
parties but also by reference to the circumstances upon
which they rely.”
7. The position of law, as is evident from the above, is clear.
8. Now, in the instant facts, let us consider whether the
presumption stands sufficiently rebutted or not. In the cross-
examination of DW-1 (appellant) it has been stated that he had
issued two blank signed cheques for availing the hand loan of
Rs.3,50,000/- (three lakh fifty thousand rupees) from the
complainant. Further, the accused in the affidavit, submitted in
the Trial Court, stated as under:
“At that time I have approached the complainant for
hand loan of Rs. 3,50,000/- (Rupees Three Lakhs Fifty
Thousand only). At the time of giving the above said
amount the complainant was took two blank cheques
signed by me for security purpose and both the cheques
were drawn on Canara Bank, Sampangi Ramanagara,
Bangalore- 560 027.”
9. Very clearly, therefore, it can be seen that the cheques
issued were against an enforceable debt and held by the
complainant as such, even though there was no paperwork to that
effect. The onus, as such, was shifted upon the other party, i.e.,
the accused, to raise a probable defence against such
presumption.
10. A perusal of the record reveals the following aspects which
constitute the accused’s ‘probable defence’ :
Crl.Appeal No.5305/2024 Page 17 of 21
(a) Both parties were friends and the money exchanged
hands only as a hand loan;
(b) The movie, because of which the loan was allegedly
taken, was produced, completed and exhibited many
years prior to the cheque being presented for
realisation, i.e., 2003 and 2008, respectively;
(c) The parties to the dispute entered into a Memorandum
of Understanding dated 29th March 2008 which
recorded that the accused took Rs.3,50,000/- and in
payment thereof, the former gave, inclusive of interest,
Rs.5,50,000/-;
(d) The accused had lodged a complaint with the police on
24th July 2008 asking the authorities to take steps to
have the complainant return the said two cheques to
him, since the loan taken by the accused was returned
with interest, totalling to Rs.5,50,000/- (five lakh fifty
thousand rupees);
(e) The cheque, a copy of which is appended as Annexure-
P3, was dated 14th October 2008. The date of dishonour
was 20th October 2008, as is clear from Annexure-P7,
i.e., the complaint under Section 200 CrPC. Evidently,
the presentation and subsequent dishonour were both
after the lodging of the police complaint by the
accused.
Crl.Appeal No.5305/2024 Page 18 of 21
11. Considering the sum total of the above, we find that the
probable defence on the part of the accused has been established.
Once such a defence is established, the burden again shifts upon
the complainant to now establish his case beyond a reasonable
doubt, for after all, the effect of Section 138 of the N.I. Act is a
criminal conviction. Reference may be made to Rajesh Jain v.
Ajay Singh12 and, more particularly Para 44 thereof, which reads
as under :
“44. Therefore, in fine, it can be said that once the
accused adduces evidence to the satisfaction of the Court
that on a preponderance of probabilities there exists no
debt/liability in the manner pleaded in the complaint or
the demand notice or the affidavit-evidence, the burden
shifts to the complainant and the presumption
“disappears” and does not haunt the accused any longer.
The onus having now shifted to the complainant, he will
be obliged to prove the existence of a debt/liability as a
matter of fact and his failure to prove would result in
dismissal of his complaint case. Thereafter, the
presumption under Section 139 does not again come to
the complainant’s rescue. Once both parties have
adduced evidence, the Court has to consider the same
and the burden of proof loses all its importance.
[Basalingappa v. Mudibasappa {Basalingappa v. Mudi
basappa, (2019) 5 SCC 418 : (2019) 2 SCC (Cri) 571 :
AIR 2019 SC 1983] ; see also, Rangappa v. Sri
Mohan [Rangappa v. Sri Mohan, (2010) 11 SCC 441 :
(2010) 4 SCC (Civ) 477 : (2011) 1 SCC (Cri) 184 : AIR
2010 SC 1898}]”12
(2023) 10 SCC 148Crl.Appeal No.5305/2024 Page 19 of 21
12. In our considered view, the complainant has failed to
discharge this burden. In his cross-examination, the complainant
has stated as follows :
“During the year 2002, I have paid loan to the accused
on 7-8 times. I have maintained the account on which
dates I have paid the loan to the accused. In that regard,
I have subscribed my signatures in the book which was
with the accused. Accused issued cheques for having
obtained 7-8 times loan from me. I have paid the amount
to the accused two times in my house and 5-6 times in
my lodge. I have not obtained the receipt for having
received the loan amount by the accused.”It has also come on record that the cheque, subject matter of
controversy, was given to the complainant in the presence of
common well-wishers. However, none of the above statements
stands scrutiny. The alleged well-wishers who could have
proved the discussion and context in which the cheque was given,
remained unexamined. As stated by the complainant himself,
there is no official record, such as income tax documents which
would show that such an amount was extended by way of a loan
to the accused, neither have the books of account, which the
complainant allegedly maintained, being produced to evidence
the seven or eight transactions inter se the parties totalling the
claimed amount.
13. Keeping in view the above factors, it cannot be said that
the complainant was able to discharge the burden once it had
Crl.Appeal No.5305/2024 Page 20 of 21
shifted back upon him, with the accused having discharged the
burden of Sections 118 and 139 of the N.I. Act.
14. Consequent to the above discussion, we are of the view
that the Trial Court was correct in recording a finding of acquittal
in favour of the accused and reversal thereof by the High Court
in terms of the impugned judgment, with particulars as in Para 1,
was unjustified. As a result, the appeal is allowed.
15. The judgment of the High Court is set aside, and that of
the Trial Court is hereby restored.
16. The amount deposited in the Registry of this Court in
compliance with the orders dated 15th March 2021 and 12th April
2021, be released to the appellant along with the interest accrued
thereon.
Pending application(s), if any, shall stand disposed of.
……………………………..J.
(PANKAJ MITHAL)
……………………………..J.
(SANJAY KAROL)
New Delhi;
22nd April, 2025.
Crl.Appeal No.5305/2024 Page 21 of 21
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