KISHAN RAOversusSHANKARGOUDA

                          [2018] 5 S.C.R. 69                               69


                           KISHAN RAO                                      A
                                   v.
                        SHANKARGOUDA
                  (Criminal Appeal No. 803 of 2018)
                            JULY 02, 2018.                                 B
          [A. K. SIKRI AND ASHOK BHUSHAN, JJ.]
       Negotiable Instruments Act, 1881 – s. 139 – Presumption in
favour of holder – Rebuttal of – Dishonour of cheque due to
insufficiency of funds – Conviction by the trial court – High Court
                                                                           C
set aside the conviction holding that the accused was able to raise
a doubt regarding existence of debt or liability of the accused – On
appeal, held: High Court erred in setting aside the order of
conviction in exercise of revisional jurisdiction – No sufficient
ground was mentioned – There was no valid basis for the High
Court to hold that the accused has been successful in creating doubt       D
in the mind of the Court with regard to the existence of the debt or
liability – Trial court as well as the appellate court found that cheque
contained the signatures of the accused and it was given to the
appellant to present in the Bank – Presumption u/s. 139 was rightly
raised which was not rebutted by the accused – No evidence was
                                                                           E
led by the accused – Accused even did not come in the witness box
to support his case – Further, the defence taken in the reply to the
notice that cheque was stolen was rejected by the courts below –
Thus, the judgment of the High Court set aside and that of trial
court as affirmed by appellate court restored.
                                                                           F
      Allowing the appeal, the Court
      HELD: 1.1 The High Court gave its reasons for setting
aside the order of conviction, it observed that though perception
of a person differs from one another with regard to the acceptance
of evidence on record but in its perception and consideration,
the accused has been successful in creating doubt in the mind of           G
the Court with regard to the existence of the debt or liability.
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
                                                                           H
                                  69
70            SUPREME COURT REPORTS                      [2018] 5 S.C.R.


A    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
     and on presentation of the cheque, the cheque was returned with
B
     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. The judgment of
     High Court is liable to be set aside on this ground alone. [Paras
C    14, 15][75-D-E; 76-D-F]
           1.2 Section 139 of the Negotiable Instruments Act, 1881
     provides for drawing the presumption in favour of holder. In the
     instant case, the trial court as well as the appellate court having
     found that cheque contained the signatures of the accused and it
D    was given to the appellant to present in the Bank. The
     presumption under Section 139 was rightly raised which was not
     rebutted by the accused. The accused had not led any evidence
     to rebut the said presumption. The accused even did not come in
     the witness box to support his case. In the reply to the notice
     which was given by the appellant the accused took the defence
E    that the cheque was stolen by the appellant. The said defence
     was rejected by the trial court after considering the evidence on
     record with regard to which no contrary view has also been
     expressed by the High Court. [Paras 17, 20][76-G; 79-A-C]
           1.3 No evidence was led by the accused. The defence taken
F    in the reply to the notice that cheque was stolen having been
     rejected by the two courts below, there is no 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
G    under Section 139 can be rebutted on the evidence of PW.1,
     himself has not been explained by the High court. [Para 22][80-
     C-D]
            1.4 The High Court committed error in setting aside the
     order of conviction in exercise of revisional jurisdiction. No
H    sufficient ground was mentioned by the High Court in its judgment
                KISHAN RAO v. SHANKARGOUDA                                   71


to enable it to exercise its revisional jurisdiction for setting aside       A
the conviction. The judgment of the High Court is set aside and
the judgment of trial court as affirmed by the appellate court is
restored. [Paras 23, 24][80-E-F]
      State of Kerala v. Puttumana Illath Jathavedan
      Namboodiri [1999] 1 SCR 575 : (1999) 2 SCC 452;                        B
      Sanjaysin Ramrao Chavan v. Dattatray Gulabrao
      Phalke and others [2015] 1 SCR 130 : (2015) 3 SCC
      123; Kumar Exports v. Sharma Carpets [2008]
      17 SCR 572 : (2009) 2 SCC 513; Rangappa v. Sri
      Mohan [2010] 6 SCR 507 : 2010 (11) SCC 441 –
      referred to.                                                           C

                         Case Law Reference
      [1999] 1 SCR 575              referred to            Para 11
      [2015] 1 SCR 130              referred to            Para 12
                                                                             D
      [2008] 17 SCR 572             referred to            Para 18
      [2010] 6 SCR 507              referred to            Para 21
      CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No.
803 of 2018.
      From the Judgment and Order dated 18.03.2016 of the High Court         E
of Karnataka Kalaburagi Bench in CRP No. 2605 of 2010.
      Preetam Shah, Ms. Rosy Sharma and M. A. Krishna Moorthy,
Advs. for the Appellant.
      The Judgment of the Court was delivered by                             F
       ASHOK BHUSHAN, J. 1. This appeal has been filed against
the judgment and order of the High Court dated 18.03.2016 by which
judgment, Criminal Revision Petition filed by the respondent-accused
was allowed by setting aside the order of conviction and sentence
recorded against the accused under Section 138 of the Negotiable             G
Instruments Act, 1881 (hereinafter referred to as “Act 1881”). The parties
shall be hereinafter referred to as described in the Magistrate’s Court.
      2. Brief facts of case are:
       The appellant(complainant) and the respondent (accused) were
known to each other and had good relations. Accused approached the           H
72             SUPREME COURT REPORTS                           [2018] 5 S.C.R.


A    complainant for a loan of Rs.2,00,000/- for the purpose of his business
     expenses and promised to repay the same within one month. On
     25.12.2005, complainant had paid sum of Rs.2,00,000/- as a loan. For
     repayment of the loan accused issued post dated cheque dated 25.01.2006
     in the name of complainant for the amount of Rs.2,00,000/-. The cheque
     was presented for collection at Bank of Maharashtra Branch at Gulbarga
B
     which could not be encashed due to insufficient funds. At the request of
     the accused the cheque was again represented on 01.03.2006 for
     collection which was returned on 02.03.2006 by the Bank with the
     endorsement “insufficient funds”.
            3. A notice was issued by the complainant demanding payment of
C    Rs.2,00,000/- which was received by the accused on 14.03.2006 to which
     reply was sent on 31.03.2006. A complaint was filed by the appellant
     alleging the offence under Section 138 of the Act, 1881. Cognizance
     was taken by the Magistrate. Accused stated not guilty of the offence,
     hence, trial proceeded. In order to prove the guilt, the complainant himself
D    examined as PW.1 and examined two other witnesses PW.2 and Pw.3.
     He filed documentary evidence Exhs.P1 and P6, statement of the accused
     was recorded under Section 313 Cr.P.C. Thereafter, the case proceeded
     for defence evidence. Accused neither examined himself nor produced
     any evidence either oral or documentary. In the reply to the notice which
     was sent by the complainant, it was alleged that the said cheque was
E    stolen by the complainant. The complainant was cross-examined by the
     defence. In the cross-examination defence denied accused’s signatures
     on the cheque. The trial court rejected the defence of the accused that
     cheque was stolen by the complainant. The trial court drew presumption
     under Section 139 of the Act, 1881 against the accused. Accused failed
F    to rebut the presumption by leading any evidence on his behalf. The
     offence having been found proved, the trial court convicted the accused
     under Section 138 of the Act, 1881 and sentenced him to pay a fine of
     Rs.2,50,000/- and simple imprisonment for six months.
           4. The appeal was filed by the accused against the said judgment.
G    The Appellate Court considered the submissions of the parties and
     dismissed the appeal by affirming the order of conviction.
            5. Criminal Revision was filed by the accused in the High Court.
     The High Court by the impugned judgment has allowed the revision by
     setting aside the conviction order. The High Court held that the accused
H    has been successful in creating doubt in the mind of the Court with
                KISHAN RAO v. SHANKARGOUDA                                     73
                     [ASHOK BHUSHAN, J.]

regard to the existence of the debt or liability. Complainant aggrieved by     A
the judgment of the High Court has come in this appeal.
       6. Learned counsel for the appellant submits that the offence having
been proved before the trial court by leading evidence, the conviction
was recorded by the trial court after appreciating both oral and
documentary evidence led by the appellant which order was also affirmed        B
by the Appellate Court. There was no jurisdiction in the High court to re-
appreciate the evidence on record and come to the conclusion that
accused has been able to raise a doubt regarding existence of the debt
or liability of the accused. He submits that the High court in exercise of
jurisdiction under Section 379/401 Cr.P.C. can interfere with the order
of the conviction only when the findings recorded by the courts below          C
are perverse and there was no evidence to prove the offence against
the accused. It is submitted that in exercise of the revisional jurisdiction
the High Court cannot substitute its own opinion after re-appreciation of
evidence.
       7. It is submitted that the presumption under Section 139 was           D
rightly drawn against the accused and accused failed to rebut the said
presumption by leading evidence. There was no ground for setting aside
the conviction order.
       8. Although, the respondent was served but no one appeared at
the time of hearing.                                                           E

      9. We have considered the submissions of the appellant and
perused the records.
      10. The trial court after considering the evidence on record has
returned the finding that the cheque was issued by the accused which           F
contained his signatures. Although, the complainant led oral as well as
documentary evidence to prove his case, no evidence was led by the
accused to rebut the presumption regarding existence of debt or liability
of the accused.
       11. This Court has time and again examined the scope of Section
                                                                               G
397/401 Cr.P.C. and the ground for exercising the revisional jurisdiction
by the High Court. In State of Kerala vs. Puttumana Illath Jathavedan
Namboodiri, 1999 (2) SCC 452, while considering the scope of the
revisional jurisdiction of the High Court this Court has laid down the
following:
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74             SUPREME COURT REPORTS                            [2018] 5 S.C.R.


A           “5......In its revisional jurisdiction, the High Court can call
            for and examine the record of any proceedings for the purpose
            of satisfying itself as to the correctness, legality or propriety
            of any finding, sentence or order. In other words, the
            jurisdiction is one of supervisory jurisdiction exercised by
            the High Court for correcting miscarriage of justice. But the
B
            said revisional power cannot be equated with the power of
            an appellate court nor can it be treated even as a second
            appellate jurisdiction. Ordinarily, therefore, it would not be
            appropriate for the High Court to reappreciate the evidence
            and come to its own conclusion on the same when the evidence
C           has already been appreciated by the Magistrate as well as
            the Sessions Judge in appeal, unless any glaring feature is
            brought to the notice of the High Court which would otherwise
            tantamount to gross miscarriage of justice. On scrutinizing
            the impugned judgment of the High Court from the aforesaid
            standpoint, we have no hesitation to come to the conclusion
D
            that the High Court exceeded its jurisdiction in interfering
            with the conviction of the respondent by reappreciating the
            oral evidence.....”
            12. Another judgment which has also been referred to and relied
     by the High Court is the judgment of this Court in Sanjaysinh Ramrao
E    Chavan vs. Dattatray Gulabrao Phalke and others, 2015 (3) SCC
     123. This Court held that the High Court in exercise of 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 merely on the ground
F    that another view is possible. Following has been laid down in
     paragraph 14:
            “14.....Unless the order passed by the Magistrate is perverse
            or the view taken by the court is wholly unreasonable or there
            is non-consideration of any relevant material or there is
G           palpable misreading of records, the Revisional Court is not
            justified in setting aside the order, merely because another
            view is possible. The Revisional Court is not meant to act as
            an appellate court. The whole purpose of the revisional
            jurisdiction is to preserve the power in the court to do justice
            in accordance with the principles of criminal jurisprudence.
H
                KISHAN RAO v. SHANKARGOUDA                                       75
                     [ASHOK BHUSHAN, J.]

       The revisional power of the court under Sections 397 to 401               A
       CrPC is not to be equated with that of an appeal. Unless the
       finding of the court, whose decision is sought to be revised,
       is shown to be perverse or untenable in law or is grossly
       erroneous or glaringly unreasonable or where the decision
       is based on no material or where the material facts are wholly
                                                                                 B
       ignored or where the judicial discretion is exercised arbitrarily
       or capriciously, the courts may not interfere with decision in
       exercise of their revisional jurisdiction.”
      13. In the above case also conviction of the accused was recorded,
the High Court set aside the order of conviction by substituting its own
view. This Court set aside the High Court’s order holding that the High          C
Court exceeded its jurisdiction in substituting its views and that too without
any legal basis.
       14. Now, we proceed to examine order of the High Court in the
light of the law as laid down in the above mentioned cases. The High
Court itself in paragraph 40 has given its reasons for setting aside the         D
order of conviction, it has observed that though perception of a person
differs from one another with regard to the acceptance of evidence on
record but in its perception and consideration, the accused has been
successful in creating doubt in the mind of the Court with regard to the
existence of the debt or liability. It is relevant to notice what has been       E
said in paragraph 40 of the judgment which is to the following effect:
       “40. In view of the above said “facts and circumstances,
       though perception of a person differs from one another with
       regard to the acceptance of evidence on record but in my
       perception and consideration, the accused has been successful             F
       in creating doubt in the mind of the Court with regard to the
       existence of the debt or liability particularly with reference to
       the alleged transaction dated 25.12.2005 as alleged by the
       complainant. Hence, in my opinion the High Court has full
       power to interfere with such judgment of the Trial Court as
       subject matter exactly falls within the parameters of Section             G
       397 of the Code and also guidelines of the Apex Court as
       noted in the above said decisions. Therefore, I am of the
       considered opinion the Trial Court and the First Appellate
       Court have committed serious error in merely proceeding on
       the basis of the presumption under Section 139 of the Act                 H
76             SUPREME COURT REPORTS                            [2018] 5 S.C.R.


A           and also on the basis that, the accused has not proved his
            defence with reference to the loss of cheque etc. Hence, I
            answered the point in the affirmative and proceeded to pass
            the following:
                                         ORDER
B           The revision petition is hereby allowed. Consequently, the
            judgment and sentence passed by the III-Addl. Civil Judge
            (Jr.Dn.) & JMFC, Kalaburagi in C.C.No.1362/2006 which is
            affirmed by Fast Track Court – 1 at Kalaburagi in Cr.A.No.46/
            2009 are hereby set aside. Consequently, the accused is
C           acquitted of the charges levelled against him under Section
            138 of N.I.Act. If any fine amount is deposited by the accused/
            petitioner, the same is ordered to be refunded to him....”
             15. The High Court has not returned any finding that order of
     conviction based on evidence on record suffers from any perversity or
D    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
     and on presentation of the cheque, the cheque was returned with
E    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 High
     Court is liable to be set aside on this ground alone.
F            16. Even though judgment of the High Court is liable to be set
     aside on the ground that High Court exceeded its revisional jurisdiction,
     to satisfy ourselves with the merits of the case, we proceeded to examine
     as to whether there was any doubt with regard to the existence of the
     debt or liability of the accused.
G         17. Section 139 of the Act, 1881 provides for drawing the
     presumption in favour of holder. Section 139 is to the following effect:
            “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
H
               KISHAN RAO v. SHANKARGOUDA                                  77
                    [ASHOK BHUSHAN, J.]

      for the discharge, in whole or in part, of any debt or other         A
      liability.”
       18. This Court in Kumar Exports vs. Sharma Carpets, 2009
(2) SCC 513, had considered the provisions of Negotiable Instruments
Act as well Evidence Act. Referring to Section 139, this Court laid down
following in paragraphs 14, 15, 18 and 19:                                 B
      “14. Section 139 of the Act provides that 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.                                                           C
      15. Presumptions are devices by use of which the courts are
      enabled and entitled to pronounce on an issue notwithstanding
      that there is no evidence or insufficient evidence. Under the
      Evidence Act all presumptions must come under one or the
      other class of the three classes mentioned in the Act, namely,       D
      (1) “may presume” (rebuttable), (2) “shall presume”
      (rebuttable), and (3) “conclusive presumptions” (irrebuttable).
      The term “presumption” is used to designate an inference,
      affirmative or disaffirmative of the existence of a fact,
      conveniently called the “presumed fact” drawn by a judicial
      tribunal, by a process of probable reasoning from some matter        E
      of fact, either judicially noticed or admitted or established
      by legal evidence to the satisfaction of the tribunal.
      Presumption literally means “taking as true without
      examination or proof”.
      18. Applying the definition of the word “proved” in Section 3        F
      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          G
      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
                                                                           H
78            SUPREME COURT REPORTS                         [2018] 5 S.C.R.


A          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.
B
           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” as given
           in Section 4 of the Evidence Act, makes it at once clear that
C          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
D          the real fact is not as presumed, the purpose of the presumption
           is over.”
            19. 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:
E          “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
F          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
G          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
H          the circumstances of the case, act upon the plea that they did
                KISHAN RAO v. SHANKARGOUDA                                    79
                     [ASHOK BHUSHAN, J.]

      not exist...”                                                           A
       20. In the present case, the trial court as well as the Appellate
Court having found that cheque contained the signatures of the accused
and it was given to the appellant to present in the Bank of the presumption
under Section 139 was rightly raised which was not rebutted by the
accused. The accused had not led any evidence to rebut the aforesaid          B
presumption. The accused even did not come in the witness box to
support his case. In the reply to the notice which was given by the
appellant the accused took the defence that the cheque was stolen by
the appellant. The said defence was rejected by the trial court after
considering the evidence on record with regard to which no contrary
view has also been expressed by the High Court.                               C

       21. Another judgment which needs to be looked into is Rangappa
vs. Sri Mohan, 2010 (11) SCC 441. A three Judge Bench of this Court
had occasion to examine the presumption under Section 139 of the Act,
1881. This Court in the aforesaid case has held that in the event the
accused is able to raise a probable defence which creates doubt with          D
regard to the existence of a debt or liability, the presumption may fail.
Following was laid down in paragraphs 26 and 27:
      “26. In light of these extracts, we are in agreement with the
      respondent claimant that the presumption mandated by Section
      139 of the Act does indeed include the existence of a legally           E
      enforceable debt or liability. To that extent, the impugned
      observations in Krishna Janardhan Bhat, (2008) 4 SCC 54,
      may not be correct. However, this does not in any way cast
      doubt on the correctness of the decision in that case since it
      was based on the specific facts and circumstances therein. As           F
      noted in the citations, this is of course in the nature of a
      rebuttable presumption and it is open to the accused to raise
      a defence wherein the existence of a legally enforceable debt
      or liability can be contested. However, there can be no doubt
      that there is an initial presumption which favours the
      complainant.                                                            G
      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
                                                                              H
80                SUPREME COURT REPORTS                       [2018] 5 S.C.R.


A            criminal remedy in relation to the 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
B
             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
C            unduly high standard or proof.”
             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
D    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
E    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.
            24. In the result, the appeal is allowed, judgment of the High Court
     is set aside and judgment of trial court as affirmed by the Appellate
F    Court is restored.


     Nidhi Jain                                                   Appeal allowed.



G




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