Holding

A presumption under Sections 118 and 139 that the cheques were drawn for consideration stands unless the accused can prove a probable defence on a pre‑ponderance of probabilities, and mere denial or creation of doubt is insufficient; thus the conviction under Section 138 is upheld.

Summary

The appellant, Rohitbhai Jivanlal Patel, issued seven post‑dated cheques of Rs.3 lakh each to the complainant, which were later dishonoured for insufficient funds or a closed account. The trial court acquitted him, holding that the complainant had not proved the existence of a legally enforceable debt, but the High Court reversed the acquittal, drawing a presumption under Sections 118 and 139 of the Negotiable Instruments Act that the cheques were drawn for consideration and shifting the burden to the accused to rebut it. On appeal, the Supreme Court held that the trial court erred by allowing the complainant’s evidential gaps to defeat the statutory presumption and that mere denial or creation of doubt does not satisfy the burden of proof under Section 139. The Court confirmed the conviction under Section 138, but modified the sentence, ordering a fine of double the cheque amount with a default imprisonment provision. The appeal was therefore partly allowed, upholding conviction while adjusting the punishment.

Issues considered

The applicability and effect of the presumptions under Sections 118 and 139 of the Negotiable Instruments Act in cheque‑bounce cases.
Whether the accused discharged the evidential burden to rebut the presumption of a legally enforceable debt.
Whether the trial court erred in acquitting the appellant on the basis of alleged doubts about the complainant's evidence.
The appropriate quantum of punishment for the offence under Section 138 in the circumstances of multiple cheques.

Legislation cited

Negotiable Instruments Act, 1881s. 118, s. 138, s. 139

Subjects

Negotiable Instruments ActSection 138Cheque bouncePresumption of considerationBurden of proofProbable defenceAcquittal reversalCriminal sentencing

Judgment

[2019] 5 S.C.R. 417 417

ROHITBHAI JIVANLAL PATEL A
v.
STATE OF GUJARAT & ANR.
(Criminal Appeal No.508 of 2019)
MARCH 15, 2019 B
[ABHAY MANOHAR SAPRE AND
DINESH MAHESHWARI, JJ.]
Negotiable Instruments Act, 1881 – ss. 118, 138 and 139 –
Presumption u/ss. 118 and 139 – 7 cheques of Rs. 3 Lakhs each, C
drawn by the accused-appellant in favour of the complainant-
respondent no.2 – Dishonoured – Trial Court dismissed the 7
complaints cases filed by respondent no. 2 – High Court set aside
the said orders and convicted the appellant for the offence u/s.138
– On appeal, held: Appellant could not deny his signature on the
D
cheques in question – Said cheques were presented to the Bank
concerned within the period of their validity and were returned
unpaid for insufficient funds or for account being closed – All the
basic ingredients of s.138 as also of ss.118 and 139 were apparent
on the face of the record – Trial Court took note of these facts and
had drawn the requisite presumption – Therefore, it was required to E
be presumed that the cheques in question were drawn for
consideration and the holder of the cheques i.e., the respondent
no.2 received the same in discharge of an existing debt – Onus,
therefore, shifted on the appellant to rebut such presumption –
However, even after purportedly drawing the presumption u/s.139,
F
the Trial Court proceeded to question the want of evidence on the
part of the respondent no.2 as regards the source of funds for
advancing loan to the appellant and want of examination of relevant
witnesses who allegedly extended him money for advancing it to
the appellant – This approach of the Trial Court was at variance
with the principles of presumption in law – Appellant not able to G
discharge his burden of bringing on record such material which
could tilt the preponderance of probabilities in his favour – Decision
of the Trial Court suffered from perversity and fundamental error
of approach – High Court justified in reversing the judgment of the
Trial Court – Punishment as regards monetary terms not interfered
H
417
418 SUPREME COURT REPORTS [2019] 5 S.C.R.

A but, sentence of imprisonment modified – In each of the 7 cases, the
appellant to pay fine, double the amount of each cheque (i.e. Rs. 6
lakhs) – In case of default in payment of fine, the appellant to
undergo simple imprisonment for one year – On recovery of the
amount of fine, the respondent no. 2 be compensated to the tune of
Rs. 5.5 lakhs in each case – In the event of imprisonment for default
B
in payment of fine, the sentences in all the 7 cases to run concurrently.
Partly allowing the appeal, the Court
HELD: 1.1 Ordinarily, the Appellate Court will not be
upsetting the judgment of acquittal, if the view taken by Trial
C Court is one of the possible views of matter and unless the
Appellate Court arrives at a clear finding that the judgment of
the Trial Court is perverse, i.e., not supported by evidence on
record or contrary to what is regarded as normal or reasonable;
or is wholly unsustainable in law. Such general restrictions are
essentially to remind the Appellate Court that an accused is
D presumed to be innocent unless proved guilty beyond reasonable
doubt and a judgment of acquittal further strengthens such
presumption in favour of the accused. However, such restrictions
need to be visualised in the context of the particular matter before
the Appellate Court and the nature of inquiry therein. The same
E rule with same rigour cannot be applied in a matter relating to
the offence under Section 138 of the Negotiable Instruments Act,
1881, particularly where a presumption is drawn that the holder
has received the cheque for the discharge, wholly or in part, of
any debt or liability. Of course, the accused is entitled to bring on
record the relevant material to rebut such presumption and to
F show that preponderance of probabilities are in favour of his
defence but while examining if the accused has brought about a
probable defence so as to rebut the presumption, the Appellate
Court is certainly entitled to examine the evidence on record in
order to find if preponderance indeed leans in favour of the
G accused. [Para 11.1] [432-B-F]
1.2 The appellant could not deny his signature on the
cheques in question that had been drawn in favour of the
complainant on a bank account maintained by the accused for a
sum of Rs. 3 lakhs each. The said cheques were presented to the
H
ROHITBHAI JIVANLAL PATEL v. STATE OF GUJARAT 419

Bank concerned within the period of their validity and were A
returned unpaid for the reason of either the balance being
insufficient or the account being closed. All the basic ingredients
of Section 138 as also of Sections 118 and 139 NI Act are apparent
on the face of the record. The Trial Court had also consciously
taken note of these facts and had drawn the requisite presumption.
B
Therefore, it is required to be presumed that the cheques in
question were drawn for consideration and the holder of the
cheques i.e., the complainant received the same in discharge of
an existing debt. The onus, therefore, shifts on the appellant to
establish a probable defence so as to rebut such a presumption.
On the aspects relating to preponderance of probabilities, the C
accused has to bring on record such facts and such circumstances
which may lead the Court to conclude either that the consideration
did not exist or that its non-existence was so probable that a
prudent man would, under the circumstances of the case, act upon
the plea that the consideration did not exist. Though there may
D
not be sufficient negative evidence which could be brought on
record by the accused to discharge his burden, yet mere denial
would not fulfil the requirements of rebuttal as envisaged under
Section 118 and 139 of the NI Act. [Paras 14, 16] [434-D-F;
435-H; 436-A-B]
1.3 In the case at hand, even after purportedly drawing the E
presumption under Section 139 of the NI Act, the Trial Court
proceeded to question the want of evidence on the part of the
complainant as regards the source of funds for advancing loan to
the accused and want of examination of relevant witnesses who
allegedly extended him money for advancing it to the accused. F
This approach of the Trial Court had been at variance with the
principles of presumption in law. After such presumption, the onus
shifted to the accused and unless the accused had discharged
the onus by bringing on record such facts and circumstances as
to show the preponderance of probabilities tilting in his favour,
any doubt on the complainant’s case could not have been raised G
for want of evidence regarding the source of funds for advancing
loan to the appellant. The aspect relevant for consideration had
been as to whether the appellant has brought on record such
facts/material/circumstances which could be of a reasonably
probable defence. In order to discharge his burden, the accused H
420 SUPREME COURT REPORTS [2019] 5 S.C.R.

A put forward the defence that in fact, he had had the monetary
transaction with the said Shri ‘J’ and not with the complainant.
Apart from making certain suggestions in the cross-examination,
the appellant has not adduced any documentary evidence to satisfy
even primarily that there had been some monetary transaction of
himself with Shri ‘J’. Shri ‘J’ was cross-examined on various
B
aspects as regards the particulars in the writing on the stamp
paper and the date and time of the transactions. The statement
of ‘J’ does not make out any case in favour of the appellant. [Paras
17, 18, 18.3 & 18.4] [437-D-H; 438-G; 439-G-H]
1.4 The appellant could not deny his signatures on the said
C writing but attempted to suggest that his signatures were
available on the blank stamp paper with Shri ‘J’. This suggestion
is too remote and too uncertain to be accepted. No cogent reason
is available for the appellant signing a blank stamp paper. It is
also indisputable that the cheques as mentioned therein with all
D the relevant particulars like cheque numbers, name of Bank and
account number are of the same cheques which form the subject
matter of these complaint cases. The said document bears the
date 21.03.2007 and the cheques were post-dated, starting from
01.04.2008 and ending at 01.12.2008. No reason to discard this
writing from consideration. [Para 18.6] [440-E-F]
E
1.5 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
F 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
G 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. The result of such

H
ROHITBHAI JIVANLAL PATEL v. STATE OF GUJARAT 421

presumption is that existence of a legally enforceable debt is to A
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
B
rebut the presumption or not. The other observations as regards
any variance in the statement of complainant and witness; or want
of knowledge about dates and other particulars of the cheques;
or washing away of the earlier cheques in the rains though the
office of the complainant being on the 8th floor had also been of
irrelevant factors for consideration of a probable defence of the C
appellant. Similarly, the factor that the complainant alleged the
loan amount to be Rs. 22,50,000/- and seven cheques being of
Rs. 3,00,000/- each leading to a deficit of Rs. 1,50,000/-, is not
even worth consideration for the purpose of the determination of
real questions involved in the matter. Significantly, the specific
D
amount of loan (to the tune of Rs. 22,50,000/-) was distinctly stated
by the appellant in the aforesaid acknowledgment dated
21.03.2017. The Trial Court appears to have proceeded on a
misplaced assumption that by mere denial or mere creation of
doubt, the appellant had successfully rebutted the presumption
as envisaged by Section 139 of the NI Act. In the scheme of the E
NI Act, mere creation of doubt is not sufficient. The High Court
has conscientiously and carefully taken into consideration the
views of the Trial Court and after examining the evidence on
record as a whole, found that the findings of the Trial Court are
vitiated by perversity. Hence, interference by the High Court
F
was inevitable; rather had to be made for just and proper decision
of the matter. [Paras 19-21] [441-D-H; 442-A-D, F]
1.6 The findings of the High Court convicting the appellant
for offence under Section 138 of the NI Act are confirmed. In the
totality of the circumstances of this case and the nature of offence
which is regulatory in nature, the punishment as regards monetary G
terms calls for no interference but then, the sentence of
imprisonment deserve to be modified. The common judgment
and order dated 08.01.2018 in R/Criminal Appeal No. 1187/2017

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422 SUPREME COURT REPORTS [2019] 5 S.C.R.

A connected with R/Criminal Appeal Nos. 1191/2017 to 1196/2017
by the High Court of Gujarat at Ahmedabad is maintained as
regards conviction of the appellant for the offence under Section
138 of the NI Act, 1881 for dishonour of 7 cheques in the sum of
Rs. 3 lakhs each, as drawn by him in favour of the complainant-
respondent No. 2; however, the sentence is modified in the
B
manner that in each of these 7 cases, the appellant shall pay fine
to the extent of double the amount of each cheque (i.e., a sum of
Rs. 6 lakhs in each case) within 2 months from today with the
stipulation that in case of default in payment of fine, the appellant
shall undergo simple imprisonment for a period of one year. On
C recovery of the amount of fine, the complainant-respondent No.
2 shall be compensated to the tune of Rs. 5.5 lakhs in each case.
In the event of imprisonment for default in payment of fine, the
sentences in all the 7 cases shall run concurrently. [Paras 22,
23.1 and 24] [442-G; 443-A-B, D-G]
D Rangappa v. Sri Mohan (2010) 11 SCC 441 : [2010] 6
SCR 507 – relied on.
Arulvelu and Anr. v. State represented by Public
Prosecutor & Anr. (2009) 10 SCC 206 : [2009] 14 SCR
1081; M.S. Narayana Menon alias Mani v. State of
E Kerala and Anr. (2006) 6 SCC 39 : [2006] 3 Suppl.
SCR 124 ; Kumar Exports v. Sharma Carpets (2009) 2
SCC 519 : [2008] 17 SCR 572 – referred to.
Case Law Reference
[2009] 14 SCR 1081 referred to Para 8
F
[2006] 3 Suppl. SCR 124 referred to Para 8
[2008] 17 SCR 572 referred to Para 8
[2010] 6 SCR 507 relied on Para 15
CRIMINAL APPELLATE JURISDICTION: Criminal Appeal
G No.508 of 2019.
From the Judgment and Order dated 08.01.2018 of the High Court
of Gujarat in Criminal Appeal (Against Acquittal) No. 1187 of 2017 with
Criminal Appeal No. 1191 of 2017 to 1196 of 2017

H
ROHITBHAI JIVANLAL PATEL v. STATE OF GUJARAT 423

Huzefa Ahmadi, Sr. Adv., Pradhuman Gohil, Mrs. Taruna Singh A
Gohil, Himanshu Chaubey, Ms. Tanvi Bhatnagar, Advs. for the Appellant.
Abhiraj R. Trivedi, Shashank Bajpai, Ms. Shakur Sudha Shukla,
Ms. Richa Pandey, Amit Dubey, Prakash Kumar Singh, Ms. Hemantika
Wahi, Ms. Jesal Wahi, Ms. Puja Singh, Ms. Parul Luthra, Advs. for the
Respondents. B
The Judgment of the Court was delivered by
DINESH MAHESHWARI, J. 1. Leave granted.
2. This appeal is directed against the common judgment and order
dated 08.01.2018 in R/Criminal Appeal No. 1187/2017 connected with C
R/Criminal Appeal Nos. 1191/2017 to 1196/2017 whereby, the High Court
of Gujarat at Ahmedabad has reversed the respective judgment and
orders dated 09.06.2017 as passed by the 8th Additional Senior Civil
Judge and Additional Chief Judicial Magistrate, Vadodara in 7 criminal
cases1 pertaining to the offence under Section 138 of the Negotiable
Instruments Act, 1881 (‘the NI Act’) for dishonour of 7 cheques in the D
sum of Rs. 3 lakhs each, as said to have been drawn by the accused-
appellant in favour of the complainant-respondent No. 2. In the impugned
judgment and order dated 08.01.2018, the High Court has disapproved
the acquittal of the accused-appellant and, while holding him guilty of
the offence under Section 138 of the NI Act, has awarded him the E
punishment of simple imprisonment for a period of 1 year with fine to
the extent of double the amount of cheque (i.e., a sum of Rs. 6 lakhs)
with default stipulation of further imprisonment for a period of 1 year in
each case; and, out of the amount payable as fine, the complainant-
respondent No. 2 is ordered to be compensated to the tune of Rs. 5.5.
lakhs in each case. F
3. Briefly put, the substance of allegations and assertions of the
complainant-respondent No. 2 in each of the 7 cases aforesaid had been
as follows: He was having his office in Windor Plaza at Alkapuri,
Vadodara and had been visiting the shop of his friend Shri Jagdishbhai in
National Plaza in the same locality; the accused-appellant, a trader of G
edible spices, had his shop near the shop of Shri Jagdishbhai and in due
course of time, the accused, the complainant and the said Shri Jagdishbhai

1
Nos. 44345/2009, 46499/2008, 46254/2008, 48420/2008, 40321/2008, 48631/2008
and 46503/2008 respectively.
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424 SUPREME COURT REPORTS [2019] 5 S.C.R.

A became good friends. The complainant alleged that after developing such
friendship, the accused demanded from him a sum of Rs. 22,50,000/- as
loan for his immediate requirement; and he (the complainant) extended
such loan to the accused for a short term by collecting money in piecemeal
from his business group. According to the complainant, upon regular
demand for re-payment, the accused gave him cheques of different dates
B
drawn on Corporation Bank, Alkapuri Branch, Vadodara and also gave
the acceptance for re-payment on a stamp paper. The complainant alleged
that the cheques so issued by the accused, on being presented to the
Bank for collection, were returned unpaid either for the reason that the
“opening balance was insufficient”or for the reason that the “account
C was closed”. While alleging that the intention of the accused had been
of breach of trust and cheating, the complainant pointed out that he got
served the notices on the accused after dishonour of the cheques but did
not receive the requisite payment. It is noticed that in some of the cases,
the accused-appellant did send his reply, denying the transaction as alleged.
D 4. With the allegations and assertions aforesaid, the complainant-
respondent No. 2 filed the above-mentioned 7 complaint cases against
the accused-appellant in the months of June to November, 2008. In trial,
the complainant examined himself as PW-1 and the said Shri Jagdishbhai
as PW-2. The complainant also produced the relevant documentary
evidence including the cheques in question; the Bank returning memos
E and intimation letters; the demand notices; the replies wherever sent by
the appellant; and the written acknowledgement on a stamp paper by
the accused. The accused was examined under Section 313 of the Code
of Criminal Procedure, 1973 where he asserted that he had no money
transaction with the complainant; and had neither issued any cheque nor
F written any note for any legal debt in favour of the complainant. The
accused-appellant, however, asserted that several years in the past, he
had some transaction with the said Shri Jagdishbhai and the cheques
and blank stamp paper lying with Shri Jagdishbhai have been fraudulently
misused to unlawfully recover the money from him. The accused-
appellant, however, did not lead any evidence.
G
5. After having heard the parties, the Trial Court formulated similar
points for determination in each of these 7 cases which could be noticed
as under2:

2
The extraction is from the judgment of the Trial Court in Criminal Case No. 46499 of
H 2008.
ROHITBHAI JIVANLAL PATEL v. STATE OF GUJARAT 425
[DINESH MAHESHWARI, J.]

“1. Whether the complainant proves that the accused has A
issued and handed over the Cheque bearing No. 763346 of
Rs. 3, 00,000/- towards legal due amount from the account
maintained by him, and upon presenting the said cheque in
bank of the complainant for encashment, the same was
returned back unpaid with endorsement of the bank “Today’s
B
opening balance is insufficient” and thereafter the
complainant has served demand notice to the accused and
the said notice has been served to the accused even though,
the accused has not paid the cheque amount within the
stipulated Notice period and thereby the accused has
committed offence punishable under section 138 of the C
Negotiable Instrument Act?
2. What order?”
6. After examining the record, the Trial Court found that the
accused had admitted his signature on the cheques and, with reference
to the decision of this Court in the case of Rangappa v. Sri Mohan : D
(2010) 11 SCC 441, drew the presumption envisaged by Section 139
of NI Act.
6.1. However, after having drawn the presumption, the Trial Court
found several factors in favour of the accused and observed, inter alia,
that: (a) there was no documentary evidence to show the source of E
income for advancing the loan to the accused; (b) the complainant failed
to record the transaction in the form of receipts, promissory notes or
even kaccha notes; (c) vague and uncertain statement was made by the
complainant as compared to the statement of his witness-Shri Jagdishbhai;
(d)the complainant had no knowledge about the dates and other particulars F
of such cheques; (e) the witness of complainant was in know of the
facts more than the complainant; (f) the complaint allegedly extended
the loan to the tune of Rs. 22,50,000/- but the 7 cheques in these cases
were of Rs. 3,00,000/- each and there was no explanation from the
complainant as regards the remaining Rs. 1,50,000/-; and (g) the
suggestion about washing away of the earlier cheques in rains was also G
doubtful when the complainant’s office was on the 8th floor of Windor
Plaza.

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426 SUPREME COURT REPORTS [2019] 5 S.C.R.

A 6.2 With reference to the aforesaid factors and circumstances,
the Trial Court concluded that the accused was successful in bringing
rebuttal evidence to the requisite level of preponderance of probabilities;
and observed that the complainant had failed to prove, beyond all
reasonable doubt, that the cheques were issued in part payment of the
loan amount of Rs. 22,50,000/-. Hence, all the 7 complaint cases were
B
dismissed by similar but separate judgment and orders dated 09.06.2017
while observing as under3:-
“19……All these circumstances creates doubt of the
complainant (sic) as alleged and accused has brought on
record rebuttable evidence upto to requisite level ie.
C Preponderance of probabilities and as such considering
section 5,6,32 and 118 and 139 of N.I. Act complainant failed
to prove complaint beyond reasonable doubt that the cheque
has been issued for the recoverable debt/liability.
*** *** *** ***
D
22. Therefore as discussion made herein above the
complainant failed to prove that the disputed cheque has been
issued by the accused for the part payment of transaction of
Rs. 22,50,000/- therefore accused is entitled to get acquittal
who has brought on record the circumstances which rebut the
E presumption under section 118,119, of N.I. Act… (sic)”
7. Against the aforementioned judgment and orders of acquittal,
the complainant preferred appeals before the High Court of Gujarat,
which have been considered and decided together by the impugned
common judgment and order dated 08.01.2018. The High Court observed
F that the presumption under Sections 118 and 139 of the NI Act was
required to be drawn that the cheques were issued for consideration and
until contrary was proved, such presumption would hold good; that the
complainant had proved legally enforceable debt in the oral as also
documentary evidence, including the written acknowledgment by the
G accused on stamp paper; and that except bare denial, nothing was brought
on record by the accused to dislodge the proof adduced by the
complainant.

3
Again, the extraction is from the judgment of the Trial Court in Criminal Case No.
46499 of 2008.
H
ROHITBHAI JIVANLAL PATEL v. STATE OF GUJARAT 427
[DINESH MAHESHWARI, J.]

7.1 The High Court observed that if the transaction in question A
was not reflected in the accounts and income-tax returns, that would at
best hold the assesse or lender liable for action under the income-tax
laws but, if the complainant succeeds in showing the lending of amount,
the existence of legally enforceable debt cannot be denied. The High
Court also observed that the issue regarding washing away of the cheques
B
in rain water was of no significance when the accused had accepted his
liability in clear terms. The High Court found that the defence plea of
the accused that the money was given as hand loan by his friend Shri
Jagdishbhai got falsified by the version of the said Shri Jagdishbhai, who
was examined as a witness on behalf of the complainant. The High
Court, therefore, set aside the impugned orders and, while convicting C
the accused-appellant for the offence under Section 138 of the NI Act,
sentenced him in the manner noticed hereinbefore. The High Court,
inter alia, observed and held as under:
“24. It is necessary at this stage also to refer to the emphasis
laid by the learned counsel appearing for the respondent No.2 D
on the source of the fund which has been lent by the appellant.
It has emerged from the detailed examination of the record,
as also detailed examination-in-chief as well as cross-
examination, that the complainant runs the business. He also
maintains the books of account and he has his own factory
in the name and style of ‘Ashirwad Enterprise’ and E
manufactures plastic. The said factory is situated at Jambusar.
Ordinarily, any prudent business person would prefer to
transact by cheque while lending money, but it is quite often
noticed that the cash transactions in the business would allow
huge sum of money as cash, which sometimes are shown in F
the books of account as cash on hands or otherwise as amount
available on books. Assuming that cheque transaction of
lending of amount is absent and income-tax returns also do
not reflect such amount, that at the best would hold the
assessee or lender liable for action under the Income-tax laws.
However, otherwise, if he succeeds in showing lending of such G
amount, both by oral evidence of himself and his friend, on
whom even respondent No.2 relies upon and from the writing
of the respondent No.2 given separately along with seven

H
428 SUPREME COURT REPORTS [2019] 5 S.C.R.

A cheques signed by him, what possible reasons could weigh
with the Court to deny the existence of legally enforceable
debt in such glaring circumstances.
25. Considering the fact that the complainant maintains his
books of account, coupled with the fact that the respondent
B No.2 had merely refuted on flimsy ground of his having
transacted with witness Jagdishbhai and not with the
complainant, has failed to discharge the burden which had
shifted upon him. It is to be noted that the respondent No.2
has admitted his signature on the impugned cheque. At no
point of time, the cheque has been disputed……Once this fact
C is acknowledged that the signature on the cheque is that of
the respondent No. 2-accused, section 139 of the Negotiable
Instruments Act would mandate the presumption that the
cheque concerns a legally enforceable debt or liability. Of
course, this presumption is in the nature of rebuttal and onus
D is on the accused thereafter to raise a probable defence.
25.1 As can be noted from the chronology of events and the
material that has been placed before this Court that the
defence raised by the accused is not at all probable. The
respondent No.2-accused states that the money was given as
E a hand loan by his friend Jagdishbhai and not the appellant,
also gets falsified completely by the version of Jagdishbhai.
It appears that in case of all the seven cheques when notices
were given prior to the filing of the complaint, he has chosen
not to reply to four of the notices. Either on account of
insufficiency of the funds or because he has closed account
F that the cheques could not be realized. All these circumstances
cumulatively lead this Court to conclude that the appellant
succeeded in proving the legally enforceable debt and no
probable defence for rebutting the statutory presumption is
raised by the respondent No.2.
G 25.2 Initial presumption as contemplated under section 139
of the Negotiable Instruments Act, when the proof of lending
of the money and acceptance of the signatures on the cheques,
shall need to be raised by the Court in favour of the appellant.
*** *** ***
H
ROHITBHAI JIVANLAL PATEL v. STATE OF GUJARAT 429
[DINESH MAHESHWARI, J.]

28. ………. Reasonably, when the appellant had proved the A
legally enforceable debt, not only through his own evidence,
but also through the evidence of his friend Jagdishbhai and
also other contemporaneous record, more particularly, the
document at Exhibit 24, which is a writing by which the
respondent No.2 clearly indicates and accepts his liability to
B
the tune of Rs. 22.50 lakh. Thus, the burden had shifted upon
the respondent No. 2. The presumption which was needed to
be drawn by the Court under section 118 of the Negotiable
Instruments Act would oblige the Court to presume that the
cheque had been issued for consideration and until contrary
is proved, such presumption would hold the ground. Except C
the bare denial, nothing has been found to come on record to
dislodge the positive proof that has been adduced by the
appellant.
29. In the opinion of this Court, the entire argument that the
rainy water could not have washed away the cheques, pales D
into insignificance and is not argument worth consideration,
more particularly, when the respondent-accused in no unclear
terms had accepted his liability of his having accepted the
amount of Rs. 22.50 lakh from the complainant and it also
declared the issuance of seven cheques of particular dates
towards such legally enforceable debt. If it was an E
understanding between the parties qua issuance of fresh
cheques, with an ostensible reason of old cheques having
washed away, those are the non-issues. This Court cannot be
oblivious of the fact that section 138 of the Negotiable
Instruments Act has been made a penal provision not only for F
the cheques to give acceptability in the transaction, but it is
the economic blood-line of the country and, therefore, the
law makers have made the special rules of evidence by
introducing sections 118 and 139 of the Negotiable
Instruments Act.
G
30. The trial Court has committed a serious error by not
discharging its obligation of recognizing the evidentiary value
and not appreciating the positive evidence which led to the

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430 SUPREME COURT REPORTS [2019] 5 S.C.R.

A reasonable proof of legally enforceable debt existing on the
side of the original complainant.”
8. Assailing the judgment and order so passed by the High Court,
learned counsel for the accused-appellant has contended that the
impugned judgment is contrary to the principles laid down in the case of
B Arulvelu and Anr. v. State represented by Public Prosecutor & Anr.:
(2009) 10 SCC 206, particularly when the High Court has set aside
the considered judgment and orders of the Trial Court without pointing
out any perversity therein. The learned counsel has argued, with reference
to the decisions in M.S. Narayana Menon alias Mani v. State of Kerala
and Anr: (2006) 6 SCC 39 and Kumar Exports v. Sharma Carpets:
C (2009) 2 SCC 519, that the High Court has failed to appreciate the
settled principle of law that the accused is only required to show a probable
defence to be acquitted of the charges under Section 138 of the NI Act.
The learned counsel has referred to the reasons assigned by the Trial
Court to acquit the accused-appellant and has submitted that contradictory
D statements have been made by the complainant and the witness; that no
clear and cogent evidence has been brought on record to prove the
source of funds for advancing any loan by the complainant; that admittedly,
the complainant did not have the amount of Rs. 22,50,000/- and the
same was arranged through his friends and relatives but he made
vacillating statement in that regard and none of such relatives or friends
E was examined as witness; that the witness for the complainant had more
knowledge about the transaction than the complainant; that the
complainant appeared to have rather no knowledge regarding the
payments, funds and the period of transaction; and that there was no
explanation as to how the complainant was claiming Rs. 22,50,000/- as
F the debt, when the sum total of the instalments (cheques) comes to
Rs. 21,00,000/- only. The learned counsel would also argue that
complainant has heavily relied on the stamp paper dated 21.03.2007 but
then, admittedly, the complainant had not signed on the said stamp paper;
and this document, neither notarised nor registered anywhere and only
bearing the signatures of the appellant and of the said Shri Jagdishbhai,
G is not of any evidentiary value for the case of the complainant. According
to the learned counsel, the accused-appellant has established his bonafide
defence that he had a financial transaction with Shri Jagdishbhai in the
past; that he gave 7 blank cheques to Shri Jagdishbhai and signed on a
stamp paper as security against such transaction; and that such cheques
H
ROHITBHAI JIVANLAL PATEL v. STATE OF GUJARAT 431
[DINESH MAHESHWARI, J.]

and stamp paper were sought to be misused by the complainant. The A
learned counsel has contended that in the given circumstances, the
judgment and orders of the Trial Court acquitting the accused-appellant
of the offence under Section 138 of the NI Act deserve to be restored
and the impugned judgment and order dated 08.01.2018 deserves to be
set aside. The learned counsel would also submit in the alternative that
B
in any case, the punishment as awarded in this case is much on the
higher side and deserves to be reduced.
9. Per contra, the learned counsel for the complainant-respondent
No. 2 has duly supported the impugned judgment and has submitted that
the accused-appellant has only put forward a vague and unsure defence
that has no basis or support and stands falsified from the material on C
record. The learned counsel has submitted that not only the presumption
under Section 139 NI Act has not been dislodged, in fact, the case of the
complainant is fortified in view of the unequivocal acknowledgement
and undertaking stated by the accused-appellant on the stamp paper;
and in the given circumstances, the High Court has rightly convicted him D
for the offence under Section 138 of the NI Act.
10. Having given anxious consideration to the rival submissions
and having examined the record, we are clearly of the view that as
regards conviction of the accused-appellant for the offence under Section
138 NI Act, the impugned judgment and order dated 08.01.2018 does E
not call for any interference but, on the facts and in the circumstances
of this case, the punishment as awarded by the High Court deserves to
be modified.
11. According to the learned counsel for the accused-appellant,
the impugned judgment is contrary to the principles laid down by this F
Court in the case of Arulvelu (supra) because the High Court has set
aside the judgment of the Trial Court without pointing out any perversity
therein. The said case of Arulvelu (supra) related to offences under
Sections 304-B and 498-A IPC. Therein, on the scope of the powers of
Appellate Court in an appeal against acquittal, this Court observed as
follows: G
“36. Carefully scrutiny of all these judgments lead to the
definite conclusion that the appellate court should be very
slow in setting aside a judgment of acquittal particularly in a

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432 SUPREME COURT REPORTS [2019] 5 S.C.R.

A case where two views are possible. The trial court judgment
cannot be set aside because the appellate court’s view is more
probable. The appellate court would not be justified in setting
aside the trial court judgment unless it arrives at a clear
finding on marshalling the entire evidence on record that the
judgment of the trial court is either perverse or wholly
B
unsustainable in law.”
11.1 The principles aforesaid are not of much debate. In other
words, ordinarily, the Appellate Court will not be upsetting the judgment
of acquittal, if the view taken by Trial Court is one of the possible views
of matter and unless the Appellate Court arrives at a clear finding that
C the judgment of the Trial Court is perverse, i.e., not supported by evidence
on record or contrary to what is regarded as normal or reasonable; or is
wholly unsustainable in law. Such general restrictions are essentially to
remind the Appellate Court that an accused is presumed to be innocent
unless proved guilty beyond reasonable doubt and a judgment of acquittal
D further strengthens such presumption in favour of the accused. However,
such restrictions need to be visualised in the context of the particular
matter before the Appellate Court and the nature of inquiry therein. The
same rule with same rigour cannot be applied in a matter relating to the
offence under Section 138 of the NI Act, particularly where a presumption
is drawn that the holder has received the cheque for the discharge, wholly
E or in part, of any debt or liability. Of course, the accused is entitled to
bring on record the relevant material to rebut such presumption and to
show that preponderance of probabilities are in favour of his defence
but while examining if the accused has brought about a probable defence
so as to rebut the presumption, the Appellate Court is certainly entitled
F to examine the evidence on record in order to find if preponderance
indeed leans in favour of the accused.
12. For determination of the point as to whether the High Court
was justified in reversing the judgment and orders of the Trial Court and
convicting the appellant for the offence under Section 138 of the NI Act,
G the basic questionsto be addressed to are two-fold:as to whether the
complainant-respondent No. 2 had established the ingredients of Sections
118 and 139 of the NI Act, so as to justify drawing of the presumption
envisaged therein; and if so, as to whether the accused-appellant had
been able to displace such presumption and to establish a probable
defence whereby, the onus would again shift to the complainant?
H
ROHITBHAI JIVANLAL PATEL v. STATE OF GUJARAT 433
[DINESH MAHESHWARI, J.]

13. We may usefully take note of the provisions contained in A
Sections 118 and 139, being the special rules of evidence applicable to
the case as follows4:
“118. Presumption as to negotiable instruments.—— Until the
contrary is proved, the following presumptions shall be
made:— B
(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 trans-
ferred, was accepted, indorsed, negotiated or transferred for
consideration; C
(b) as to date—that every negotiable instrument bearing a date
was made or drawn on such date;
(c) as to time of acceptance——that every accepted bill of ex-
change was accepted within a reasonable time after its date
and before its maturity; D
(d) as to time of transfer——that every transfer of a negotiable
instrument was made before its maturity;
(e) as to order of indorsements——that the indorsements appear-
ing upon a negotiable instrument were made in the order in
E
which they appear thereon;
(f) as to stamps— that a lost promissory note, bill of exchange or
cheque was duly stamped;
(g) that holder is a holder in due course——that the holder of a
negotiable instrument is a holder in due course; F
4
The principal and charging part of Section 138 NI Act may also be extracted for ready
reference as follows:
“138 Dishonour of cheque for insufficiency, etc., of funds in the account. ——
Where any cheque drawn by a person on an account maintained by him with a banker
for payment of any amount of money to another person from out of that account for
the discharge, in whole or in part, of any debt or other liability, is returned by the bank G
unpaid, either because of the amount of money standing to the credit of that account is
insufficient to honour the cheque or that it exceeds the amount arranged to be paid from
that account by an agreement made with that bank, such person shall be deemed to have
committed an offence and shall, without prejudice to any other provisions of this Act
,be punished with imprisonment for [a term which may be extended to two years], or
with fine which may extend to twice the amount of the cheque, or with both:
*** *** ***” H
434 SUPREME COURT REPORTS [2019] 5 S.C.R.

A Provided that, where the instrument has been obtained from
its lawful owner, or from any person in lawful custody thereof,
by means of an offence or fraud, or has been obtained from
the maker or acceptor thereof by means of an offence of
fraud, or for unlawful consideration, the burden of proving
that the holder is a holder in due course lies upon him.”
B
“139. Presumption in favour of holder —— It shall be
presumed, unless the contrary is proved, that the holder is a
cheque received the cheque of the nature referred to in section
138 for the discharge, in whole or in part, if any debt or
other liability.”
C
14. So far the question of existence of basic ingredients for drawing
of presumption under Sections 118 and 139 the NI Act is concerned,
apparent it is that the accused-appellant could not deny his signature on
the cheques in question that had been drawn in favour of the complainant
on a bank account maintained by the accused for a sum of Rs. 3 lakhs
D each. The said cheques were presented to the Bank concerned within
the period of their validity and were returned unpaid for the reason of
either the balance being insufficient or the account being closed. All the
basic ingredients of Section 138 as also of Sections 118 and 139 are
apparent on the face of the record. The Trial Court had also consciously
E taken note of these facts and had drawn the requisite presumption.
Therefore, it is required to be presumed that the cheques in question
were drawn for consideration and the holder of the cheques i.e., the
complainant received the same in discharge of an existing debt. The
onus, therefore, shifts on the accused-appellant to establish a probable
defence so as to rebut such a presumption.
F
15. In Rangappa v. Sri Mohan : (2010) 11 SCC 441, this Court
has reiterated and summarised the principles relating to presumptions
under Sections 118 and 139 of the NI Act and rebuttal thereof in the
following:-

G “26. In the 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 enforceable debt or liability. To that extent, the
impugned observations in Krishna Janardhan Bhat may not be
correct. However, this does not in any way cast doubt on the
H
ROHITBHAI JIVANLAL PATEL v. STATE OF GUJARAT 435
[DINESH MAHESHWARI, J.]

correctness of the decision in that case since it is based on A
the specific facts and circumstances therein. As noted in the
citations, this is of course in the nature of a rebuttal
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
B
is an initial presumption which favours the complainant.
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 the dishonour of cheques, the C
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 D
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 of proof. E

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 F
“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 G
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.”
16. On the aspects relating to preponderance of probabilities, the
accused has to bring on record such facts and such circumstances which H
436 SUPREME COURT REPORTS [2019] 5 S.C.R.

A may lead the Court to conclude either that the consideration did not exist
or that its non-existence was so probable that a prudent man would,
under the circumstances of the case, act upon the plea that the
consideration did not exist. This Court has, time and again, emphasized
that though there may not be sufficient negative evidence which could
be brought on record by the accused to discharge his burden, yet mere
B
denial would not fulfil the requirements of rebuttal as envisaged under
Section 118 and 139 of the NI Act. This court stated the principles in the
case of Kumar Exports (supra) as follows:
“20. The accused in a trial under Section 138 of the Act has
two options. He can either show that consideration and debt
C 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
D 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
E 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.
F 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
G 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
H
ROHITBHAI JIVANLAL PATEL v. STATE OF GUJARAT 437
[DINESH MAHESHWARI, J.]

evidence and if the circumstances so relied upon are A
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.
B
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 C
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, therefore, the presumptions
under Sections 118 and 139 of the Act will not again come to D
the complainant’s rescue.”
17. In the case at hand, even after purportedly drawing the
presumption under Section 139 of the NI Act, the Trial Court proceeded
to question the want of evidence on the part of the complainant as regards
the source of funds for advancing loan to the accused and want of E
examination of relevant witnesses who allegedly extended him money
for advancing it to the accused. This approach of the Trial Court had
been at variance with the principles of presumption in law. After such
presumption, the onus shifted to the accused and unless the accused had
discharged the onus by bringing on record such facts and circumstances
as to show the preponderance of probabilities tilting in his favour, any F
doubt on the complainant’s case could not have been raised for want of
evidence regarding the source of funds for advancing loan to the accused-
appellant. The aspect relevant for consideration had been as to whether
the accused-appellant has brought on record such facts/material/
circumstances which could be of a reasonably probable defence. G
18. In order to discharge his burden, the accused put forward the
defence that in fact, he had had the monetary transaction with the said
Shri Jagdishbhai and not with the complainant. In view of such a plea of
the accused-appellant, the question for consideration is as to whether
H
438 SUPREME COURT REPORTS [2019] 5 S.C.R.

A the accused-appellant has shown a reasonable probability of existence
of any transaction with Shri Jagdishbhai? In this regard, significant it is
to notice that apart from making certain suggestions in the cross-
examination, the accused- appellant has not adduced any documentary
evidence to satisfy even primarily that there had been some monetary
transaction of himself with Shri Jagdishbhai. Of course, one of the
B
allegations of the appellant is that the said stamp paper was given to Shri
Jagdishbhai and another factor relied upon is that Shri Jagdishbhai had
signed on the stamp paper in question and not the complainant.
18.1 We have examined the statement of Shri Jagdishbhai as also
the said writing on stamp papers and are unable to find any substance in
C the suggestions made on behalf of the accused-appellant.
18.2 The said witness Shri Jagdishbhai, while pointing out his
acquaintance and friendship with the appellant as also with the
respondent, asserted in his examination-in-chief, inter alia, as under:
D “Accused when he comes to our shop where the complainant
in the matter Shashimohan also be present that in both the
complainant and accused being our friends, were made
acquaintance with each other. The accused had necessity of
money in his business, in my presence, had demanded
Rs.22,50,000/- (Rupees twenty two lacs fifty thousandly) on
E temporary basis. And thereafter, the complainant from his
family members by taking in piecemeal had given to the
accused in my presence. Thereafter, on demanding the money
by the complainant, the accused had given seven (7) cheques
to the complainant in our presence but such cheques being
F washed out in rainy water and on informing me by the
complainant I had informed to the accused. Thereafter,
Rohitbhai had given other seven (7) cheques to the
complainant in my presence and the deed was executed on
Rs. 100/- stamp paper in there is my signature.”

G 18.3 This witness was cross-examined on various aspects
as regards the particulars in the writing on the stamp paper and the date
and time of the transactions. In regard to the defence as put in the
cross-examination, the witness stated as under:
“I have got shop in National Plaza but in rain no water logging
has taken place. It is not true that there had been no financial
H
ROHITBHAI JIVANLAL PATEL v. STATE OF GUJARAT 439
[DINESH MAHESHWARI, J.]

dealings between me and the accused today. It is not true that A
I had given rupees ten lacs to the accused Rohitbhai on
temporary basis. It is not true that for the amount given to the
accused, I had taken seven blank duly cheques also blank
stamp paper without signature. It is not true that there was
quarrel between me and the accused in the matter of payment
B
of interest. It is not true that even after the payment of Rs. ten
lacs and the huge amount of the interest in the matter of
interest quarrel was made. It is not true that due to the reason
of quarrel with the accused, in the cheques of the accused
lying with me by making obstinate writing has filed the false
complaint through Shashimohan Goyanka. It is not true that C
no financial dealings have taken place between the
complainant and the accused. therefore I also the complainant
both at the time of evidence the accused at what place, on
what date at what time, the amount taken has not been able
to make clearly. (sic) It is not true that the blank stamp paper
D
duly signed were lying in which obstinate writing has been
made therefore the same has not been registered through sub
registrar. It is not true that the dealings have been made
between me and accused therefore there is my signature and
the signature of the accused and the complainant has not
signed. It is not true that any types of dealings between the E
accused and the complainant having not been done in my
presence therefore in my statement no clarification has been
given. It is not true that the accused in my presence as
mentioned in the complaint any cheque has not been given. It
is not true that I in collusion with the complainant to usurp
F
the false amount the false complaint has been filed through
Shashimohan Goyanka. It is not true that in support of the
complaint of Shashimohan Goyanka is giving false
statement.”
18.4 The statement of Shri Jagdishbhai does not make out any
case in favour of the accused-appellant. It is difficult to say that by G
merely putting the suggestion about the alleged dealing to Shri Jagdishbhai,
the accused-appellant has been able to discharge his burden of bringing
on record such material which could tilt the preponderance of probabilities
in his favour.
H
440 SUPREME COURT REPORTS [2019] 5 S.C.R.

A 18.5 The acknowledgement on the stamp paper as executed by
the appellant on 21.03.2007 had been marked with different exhibit
numbers in these 7 cases. In Complaint Case No. 46499 of 2008, the
same is marked as Ex. 54 and reads as under :
“Today the executor I Rohit Patel Ranchhodray Masala is a
B partner. Due to the financial difficulties having been arised,
I have taken Rs.22,500,000/- (Rupees twenty two thousand
fifty thousand only- sic) from my group which are to be paid
to Shashimohan Goyanka.
With reference to that today I have given seven (7) cheques
C of Corporation Bank, Alkapuri Branch bearing No. 763346
to 762252 amounting to Rs. 22,50,000/- (Rupees twenty two
lacs fifty thousand only) Dates : (1) 01/4/08, (2) 01/05/08 (3)
01/07/08, (4) 01/08/08 (5) 01/10/08 (6) 01/11/08 (7) 01/12/
08 the account of which is 40007.
D Earliest these cheques were given but due to rainy water
logging the said cheques having been washed out (7) cheques
have again been given which is acceptable to me.”
18.6 The fact of the matter remains that the appellant could not
deny his signatures on the said writing but attempted to suggest that his
E signatures were available on the blank stamp paper with Shri Jagdishbhai.
This suggestion is too remote and too uncertain to be accepted. No
cogent reason is available for the appellant signing a blank stamp paper.
It is also indisputable that the cheques as mentioned therein with all the
relevant particulars like cheque numbers, name of Bank and account
number are of the same cheques which form the subject matter of these
F complaint cases. The said document bears the date 21.03.2007 and the
cheques were post-dated, starting from 01.04.2008 and ending at
01.12.2008. There appears absolutely no reason to discard this writing
from consideration.
18.7 One of the factors highlighted on behalf of the appellant is
G that the said writing does not bear the signature of the complainant but
and instead, it bears the signatures of said Shri Jagdishbhai. We find
nothing unusual or objectionable if the said writing does not bear the
signatures of the complainant. The said writing is not in the nature of
any bi partite agreement to be signed by the parties thereto. It had been
H
ROHITBHAI JIVANLAL PATEL v. STATE OF GUJARAT 441
[DINESH MAHESHWARI, J.]

a writing in the nature of acknowledgement by the accused-appellant A
about existence of a debt; about his liability to repay the same to the
complainant; about his having issued seven post-dated cheques; about
the particulars of such cheques; and about the fact that the cheques
given earlier had washed away in the rain water logging. Obviously, this
writing, to be worth its evidentially value, had to bear the signatures of
B
the accused, which it does. It is not unusual to have a witness to such a
document so as to add to its authenticity; and, in the given status and
relationship of the parties, Shri Jagdishbhai would have been the best
witness for the purpose. His signatures on this document, therefore,
occur as being the witness thereto. This document cannot be ruled out
of consideration and existing this writing, the preponderance of C
probabilities lean heavily against the accused-appellant.
19. 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 D
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 E
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 F
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 sourceof
funds were not of relevant consideration while examining if the accused G
has been able to rebut the presumption or not. The other observations as
regards any variance in the statement of complainant and witness; or
want of knowledge about dates and other particulars of the cheques; or
washing away of the earlier cheques in the rains though the office of the
H
442 SUPREME COURT REPORTS [2019] 5 S.C.R.

A complainant being on the 8th floor had also been of irrelevant factors for
consideration of a probable defence of the appellant. Similarly, the factor
that the complainant alleged the loan amount to be Rs. 22,50,000/- and
seven cheques being of Rs. 3,00,000/- each leading to a deficit of Rs.
1,50,000/-, is not even worth consideration for the purpose of the
determination of real questions involved in the matter. May be, if the
B
total amount of cheques exceeded the alleged amount of loan, a slender
doubt might have arisen, but, in the present matter, the total amount of 7
cheques is lesser than the amount of loan. Significantly, the specific
amount of loan (to the tune of Rs. 22,50,000/-) was distinctly stated by
the accused-appellant in the aforesaid acknowledgment dated 21.03.2017.
C 20. On perusing the order of the Trial Court, it is noticed that the
Trial Court proceeded to pass the order of acquittal on the mere ground
of ‘creation of doubt’. We are of the considered view that the Trial
Court appears to have proceeded on a misplaced assumption that by
mere denial or mere creation of doubt, the appellant had successfully
D rebutted the presumption as envisaged by Section 139 of the NI Act. In
the scheme of the NI Act, mere creation of doubt is not sufficient.
21. The result of discussion in the foregoing paragraphs is that the
major considerations on which the Trial Court chose to proceed clearly
show its fundamental error of approach where, even after drawing the
E presumption, it had proceeded as if the complainant was to prove his
case beyond reasonable doubt. Such being the fundamental flaw on the
part of the Trial Court, the High Court cannot be said to have acted
illegally or having exceeded its jurisdiction in reversing the judgment of
acquittal. As noticed hereinabove, in the present matter, the High Court
has conscientiously and carefully taken into consideration the views of
F the Trial Court and after examining the evidence on record as a whole,
found that the findings of the Trial Court are vitiated by perversity. Hence,
interference by the High Court was inevitable; rather had to be made
for just and proper decision of the matter.
22. For what has been discussed hereinabove, the findings of the
G High Court convicting the accused-appellant for offence under Section
138 of the NI Act deserves to be, and are, confirmed.
23. Coming to the question of punishment for the offence aforesaid,
as noticed, the High Court has awarded the punishment of simple
imprisonment for a period of one year together with fine to the extent of
H double the amount of cheque (i.e., a sum of Rs. 6 lakhs) with default
ROHITBHAI JIVANLAL PATEL v. STATE OF GUJARAT 443
[DINESH MAHESHWARI, J.]

stipulation of further imprisonment for a period of one year in each case; A
and, out of the amount payable as fine, the complainant-respondent No.
2 is ordered to be compensated to the tune of Rs. 5.5 lakhs in each case.
In the totality of the circumstances of this case and looking to the nature
of offence which is regulatory in nature, while we find that the punishment
as regards monetary terms calls for no interference but then, the sentence
B
of imprisonment deserve to be modified.
23.1 In the singular and peculiar circumstances of this case, where
the matters relating to 7 cheques issued by the appellant in favour of
respondent No. 2 for a sum of Rs. 3 lakhs each are being considered
together; and the appellant is being penalised with double the amount of
cheques in each case i.e., in all a sum of Rs. 42,00,000/-, in our view, the C
appellant deserves to be extended another chance to mend himself by
making payment of fine, of course, with the stipulation that in case of
default in payment of the amount of fine, he would undergo simple
imprisonment for a period of one year.
24. Therefore, this appeal is partly allowed in the following terms: D
The common judgment and order dated 08.01.2018 in R/Criminal Appeal
No. 1187/2017 connected with R/Criminal Appeal Nos. 1191/2017 to
1196/2017 by the High Court of Gujarat at Ahmedabad is maintained as
regards conviction of the accused-appellant for the offence under Section
138 of the Negotiable Instruments Act, 1881 for dishonour of 7 cheques E
in the sum of Rs. 3 lakhs each, as drawn by him in favour of the
complainant-respondent No. 2; however, the sentence is modified in the
manner that in each of these 7 cases, the accused-appellant shall pay
fine to the extent of double the amount of each cheque (i.e., a sum of
Rs. 6 lakhs in each case) within 2 months from today with the stipulation
that in case of default in payment of fine, the accused-appellant shall F
undergo simple imprisonment for a period of one year. On recovery of
the amount of fine, the complainant-respondent No. 2 shall be
compensated to the tune of Rs. 5.5 lakhs in each case. In the event of
imprisonment for default in payment of fine, the sentences in all the 7
cases shall run concurrently. G
25. The Trial Court shall take steps for enforcement of this
judgment forthwith.

Divya Pandey Appeal partly allowed.
H