G H M/S. SHREE DANESHWARI TRADERS versus SANJAY JAIN AND ANOTHER on 21 August 2019

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M/S. SHREE DANESHWARI TRADERS

v.

SANJAY JAIN AND ANOTHER

(Criminal Appeal Nos. 61-62 of 2011)

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AUGUST 21, 2019

[R. BANUMATHI AND A. S. BOPANNA, JJ.]

Negotiable Instruments Act, 1881: ss.138, 139 – Dishonourof cheque – Insufficiency of funds – Complaint under s.138 – Caseof complainant-appellant was that the respondent-accused used toCpurchase rice bags from the appellant sometimes on credit andsometimes on cash and that the cheques issued by the respondentwere subject matter of the complaints and pertained to the creditpurchases made by the respondent for which no payment was made– On the other hand, case of the respondent was that he alwaysDused to make credit purchase and leave blank cheques with theappellant and thereafter, he used to make payment for which theappellant used to issue receipts to the respondent; however, theappellant did not return the blank cheques left by the respondentwith the appellant though the respondent made the payments andthose cheques were misused by the appellant-complainant – AcquittalEby trial court and High Court on the ground that appellant failed toprove that respondent owed him debt and the cheques were issuedfor the discharge of the said debt – Held: It is quite unbelievablethat in a business/mercantile transaction, the respondent even aftermaking payment towards the purchase of rice bags, did not insistFfor return of the cheques and did not take any steps to get themback and continued with the business transaction even though theappellant did not return the cheques after payment of the money –Courts below referred to the three cheques and observed that thedate of issuance of the three cheques suggested that the chequeswere already with appellant and they were utilised by appellantGthereafter and, therefore, in view of inconsistency, the presumptionavailable under s.139 was not available to the appellant – The courtsbelow did not keep in view that the appellant had no control overthe manner of issuance of cheques by the respondent and how itwas issued – Merely because, later cheque was said to have been H

issued by the respondent at an earlier date, it cannot be held thatthe appellant had used the blank cheques issued by the respondent– The courts below disbelieved the evidence of appellant on theground that there were no averments in the complaint that thecommodities were sold for cash and that the rice bags were sold oncredit and the cheques were issued for the goods sold on credit – Itwas for the respondent to adduce evidence to prove that the chequeswere not supported by consideration and that there was no debt orliability to be discharged by him – The receipts relied upon by therespondent did not create doubt about the purchases made on creditand the existence of a legally enforceable debt for which thecheques were issued – The courts below erred in saying that by thereceipts, the respondent has rebutted the statutory presumption raisedunder s.139 – The oral and the documentary evidence adduced bythe appellant were sufficient to prove that it was a legally enforceabledebt and that the cheques were issued to discharge the legallyenforceable debt – The impugned judgment of the High Court isnot sustainable and is set aside – Respondent is convicted unders.138 in both the complaints.

Negotiable Instruments Act, 1881: ss.138, 139 – Presumptionin favour of holder – Held: Under s.138, once the cheque is issuedby the drawer, a presumption under s.139 in favour of the holderwould be attracted – s.139 creates a statutory presumption that acheque received in the nature referred to under s.138 is for thedischarge in whole or in part of any debt or other liability – Theinitial burden lies upon the complainant to prove the circumstancesunder which the cheque was issued in his favour and that the samewas issued in discharge of a legally enforceable debt – It is for theaccused to adduce evidence of such facts and circumstances torebut the presumption that such debt does not exist or that thecheques are not supported by consideration – In the instant case,by examining himself as PW-1, the complainant has discharged theinitial burden cast upon him that the cheques were issued for therice bags purchased on credit – With the examination of PW-1, thestatutory presumption under s.139 of the Act arises that the chequeswere issued by the respondent-accused for the discharge of anydebt or other liability in whole or in part.

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372SUPREME COURT REPORTS

AAllowing the appeals, the Court

HELD : 1. As seen from the receipts-Ex 16/C and Ex.-22/C, though the amount said to have been credited to the accountof the respondent, the receipt contain the expression “chequesare subject to realisation”. DW-2, father of respondent-accused,Bin his evidence, stated that the respondent used to leave blankcheques with him in order to carry out the business transaction.DW-2 stated that they used to purchase rice bags from thecomplainant and leave the cheques with the complainant.Admittedly, the cheques were in the handwriting of DW-2. In hisevidence, DW-2 stated that though the amount pertaining to theCpurchase of rice was already paid, the complainant did not returnthe cheques in spite of having received the amount pertaining tothe purchase of rice. It is quite unbelievable that in a business/mercantile transaction, the accused even after making paymenttowards the purchase of rice bags, did not insist for the return ofDthe cheques. [Paras 13, 14] [379-C; 380-A-C]

2.1 The trial court in its judgment referred to the threecheques and observed that the three cheques bearing Nos.2463,dated 18.08.2003; 2480 dated 25.08.2003 and 2497 dated08.08.2003 go to suggest that the later cheque bearing No.2497Ewas given much more earlier to 18.08.2003 or 25.08.2003 whichseemed inconsistent and it would not have been in the normalcourse of business. The trial court held that the date of issuanceof the three cheques suggested that the cheques were alreadywith the complainant and they were utilised by the complainantthereafter. On this aspect, PW-1 was cross-examined as to whyFcheque bearing No.2497 was issued on 08.08.2003 while it oughtto have been issued after 25.08.2003 to which PW-1 stated thathe did not know about the same. After referring to the abovethree cheques, the trial court held that in view of inconsistency,the presumption available under Section 139 of the NegotiableGInstruments Act was not available to the complainant which wasaffirmed by the High Court. The courts below did not keep inview that the appellant has no control over the manner of issuanceof cheques by the respondent and how it was issued. Merelybecause, later cheque No.2497 was said to have been issued by H

the respondent at an earlier date i.e. 08.08.2003, it cannot beheld that the complainant had used the blank cheques issued bythe respondent. [Para 15] [380-D-G]

2.2 Section 139 creates a statutory presumption that acheque received in the nature referred to under Section 138 ofthe Negotiable Instruments Act is for the discharge in whole orin part of any debt or other liability. The initial burden lies uponthe complainant to prove the circumstances under which thecheque was issued in his favour and that the same was issued indischarge of a legally enforceable debt. It is for the accused toadduce evidence of such facts and circumstances to rebut thepresumption that such debt does not exist or that the chequesare not supported by consideration. In the instant case, byexamining himself as PW-1, the complainant has discharged theinitial burden cast upon him that the cheques were issued for therice bags purchased on credit. With the examination of PW-1,the statutory presumption under Section 139 of the Act arisesthat the cheques were issued by the respondent-accused for thedischarge of any debt or other liability in whole or in part. Thoughthe complaint contains no specific averments that the chequeswere issued for the purchase made on credit, in his evidence,PW-1 clearly stated that the cheques were issued for thecommodities purchased on credit. The courts below erred inbrushing aside the evidence of PW-1 on the ground that therewere no averments in the complaint as to the purchases made bycash and purchase. [Paras 16-18] [381-A-C; 383-D-G]

3. It was for the respondent-accused to adduce evidenceto prove that the cheques were not supported by considerationand that there was no debt or liability to be discharged by him.The receipts-Ex.-22/C (colly) relied upon by the respondent-accused did not create doubt about the purchases made on creditand the existence of a legally enforceable debt for which thecheques were issued. The courts below erred in saying that bythe receipts-Ex.22/C (colly), the respondent-accused rebuttedthe statutory presumption raised under Section 139 of theNegotiable Instruments Act. The oral and the documentaryevidence adduced by the complainant were sufficient to prove AB

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Athat it was a legally enforceable debt and that the cheques wereissued to discharge the legally enforceable debt. The impugnedjudgment of the High Court cannot be sustained and is liable tobe set aside. The respondent-accused is convicted under Section138 of the Negotiable Instruments Act in both the complaints;however, considering that the cheque transaction was of theByear 2003, at this distant point of time, it is not found appropriateto impose any sentence of imprisonment on the accused.[Paras 19-20] [383-H; 384-A-D]

Kumar Exports v. Sharma Carpets (2009) 2 SCC 513 :[2008] 17 SCR 572 – relied on.C

Case Law Reference

[2008] 17 SCR 572relied onPara 17

CRIMINAL APPELLATE JURISDICTION : Criminal AppealNos. 61-62 of 2011.D

From the Judgment and Order dated 28.07.2008 of the High Courtof Bombay at Goa in Criminal Appeal Nos. 53 and 54 of 2006.

Arun R.Pedneker, Hitesh Kumar Sharma, V.N. Raghupathy,Advs. for the Appellant.

EDevadatt Kamat, Sr. Adv., Rajesh Inamdar, Javedur Rahman,Aditya Bhat, Ashwin G. Raj, Rauf Rahim, Advs. for the Respondents.

The Judgment of the Court was delivered by

R. BANUMATHI, J.

F1. These appeals arise out of the judgment dated 28.07.2008 inCriminal Appeal Nos.53 and 54 of 2006 passed by the High Court ofBombay in and by which the High Court dismissed the appeals filed bythe appellant-complainant thereby upholding the acquittal of therespondent-accused Sanjay Jain under Section 138 of the NegotiableInstruments Act.G

2. Brief facts which led to filing of these appeals are as under:-

The appellant-complainant had been supplying the commoditiesand rice bags to the respondent-accused on his request. In this regard,the respondent-accused issued various cheques which when presentedfor collection were dishonoured. The appellant had filed two complaintsH

M/S. SHREE DANESHWARI TRADERS v. SANJAY JAIN[R. BANUMATHI, J.]

under Section 138 of the Negotiable Instruments Act - complaint No.339/OA/NI/2004/A and complaint No.499/OA/NI/2004/A against therespondent-accused alleging that the cheques issued by the respondent-accused in lieu of payment owed to the appellant were dishonoured onpresentation. It was averred that despite issuance of legal notice, therespondent did not make payments.

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3. In case No.339/OA/NI/2004/A, the respondent-accused issuedthree cheques drawn on UTI Bank details of which are as under:- —————————————————————————DateNumberAmount—————————————————————————1. 08.08.2003002497Rs.17,540.002. 18.08.2003002463Rs.17,871.003. 25.08.2003002480Rs.17,760.00————————

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Total = Rs.53,171.00

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4. In case No.499/OA/NI/2004/A, the respondent-accused issuednine cheques, details of which are as under:- DateNumberAmount—————————————————————————1. 01.09.2003002481Rs.18,000.002. 15.09.2003633427Rs.20,000.00E3. 22.09.2003633428Rs.20,000.004. 29.09.2003633429Rs.20,000.005. 03.10.2003531977Rs.25,000.006. 06.10.2003633430Rs.20,979.007. 13.10.2003531975Rs.20,000.00F8. 27.10.2003531976Rs.25,000.009. 10.11.2003531978Rs.25,000.00————————

Total = Rs.1,93,979.00

5. When the above said cheques were presented to UnitedWestern Bank, Margao Branch for encashment, cheques were returnedby the bank unpaid on 04.02.2004 and 20.02.2004 with the endorsement“not arranged for/funds insufficient” and “funds insufficient”. Theappellant thereafter issued legal notices to the respondent-accused dated05.02.2004 and 23.02.2004 respectively making a demand for the paymentof the cheque amount. The said notices were received by the respondent- G

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Aaccused; though respondent acknowledged the receipt of the notices, hedid not make the payment nor arranged that amount in satisfaction ofthe cheques issued by him. Hence, the complainant filed two complaintsunder Section 138 of the Negotiable Instruments Act as noted above.

6. Taking into account the receipts produced by the respondent-Baccused, the trial court acquitted the respondent-accused in both thecases. The trial court rejected the case of the appellant that therespondent sometimes used to purchase rice bags on credit andsometimes used to purchase rice bags on payment of cash and the samebeing inconsistent with the documents produced by the appellant. Thetrial court held that in the written complaint, the appellant-complainantChas not alleged anywhere that the respondent used to make credit aswell as cash purchases. The trial court held that the respondent leftblank cheques with the appellant as security whenever he used to makecredit purchases and therefore, the presumption under Section 139 ofthe Act is not available to the appellant.D

7. In appeal, the High Court affirmed the acquittal of therespondent-accused and held that the respondent had taken the defencethat the subject cheques were issued as security towards the goodssupplied for which payment was subsequently made by cash. The HighCourt held that by producing the relevant receipts, the respondent hasErebutted the presumption and that the respondent was able to prove thatthe cheques were issued by way of security towards the goods suppliedto him for which he made the payment by cash. The High Court furtherheld that it was incumbent upon the complainant to have explained in thecomplaint that the cash payments made by the respondent were relatedto other commodities and the cheques were made for payment of riceFbags. Holding that the case of the appellant was not consistent, the HighCourt affirmed the order of acquittal and dismissed the appeals filed by the complainant-appellant.

8. The learned counsel for the appellant submitted that thetransaction between the parties was a mercantile transaction and duringGthe course of the business, running accounts were maintained whenpurchases were made at different times and payments were made byboth modes i.e. cash and cheques. It was submitted that both the courtsbelow overlooked the fact that the transactions were mercantiletransactions mixed up with cash payments and also payments made byHcheques. It was submitted that the courts below erred in not keeping in view the statutory presumption available under Section 139 of theNegotiable Instruments Act to the appellant and that the respondent-accused failed to rebut the presumption by leading cogent and consistentevidence. The learned counsel urged that the impugned judgment iscontrary to the object of Section 138 and Section 139 of the NegotiableInstruments Act and is liable to be set aside.

9. The learned counsel appearing for the respondent submittedthat the respondent used to leave the cheques with the complainant whenhe purchased the commodities – rice bags and used to make cashpayment towards those commodities for which complainant issuedreceipts. It was submitted that even though the complainant receivedthe money for the rice bags, he failed to return the cheques and hadmisused those cheques and filed false complaints against the respondent.It was submitted that the respondent has rebutted the statutorypresumption by producing twenty receipts-Ex.-22/C (colly) ranging from02.09.2003 to 17.11.2003 as also receipts-Ex.16/C (colly). The totalamount of the receipts issued by the complainant is Rs.1,94,000/- andtaking into consideration that the amount has been paid, the courts belowrightly held that the presumption under Section 139 of the NegotiableInstruments Act was rebutted by the respondent-accused.

10. We have carefully considered the submissions and perusedthe impugned judgment and other materials on record. The point fallingfor consideration is whether the courts below were right in acquittingthe respondent-accused by holding that the appellant-complainant hasfailed to prove that the respondent owed him debt and that the chequeswere issued for the discharge of the said debt.

11. The appellant is a commission agent/merchant conducting hisbusiness and he used to supply rice bags to the respondent-accused onhis request. Admittedly, the transaction between the appellant-complainantand the respondent-accused was a mercantile transaction. During thecourse of business, running accounts were maintained by the parties.Case of the appellant is that the respondent used to purchase rice bagssometimes on credit and sometimes on cash. In his evidence, PW-1-complainant stated that the cheques were issued for the credit transactionpayable to the appellant by the respondent. Per contra, case of therespondent is that Ex.-16/C (colly) and Ex.-22/C (colly) were issuedagainst the cash payment made by the respondent-accused and thoughthe payments were made, the cheques issued by the respondent-accused A

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Awere not returned to him. The respondent-accused relies upon the variousreceipts-Ex.-22/C (colly) which are as under:- Sr.No.Receipt No.DateAmount1.127602.09.2003Rs.16,000/-B2.129104.09.2003Rs.2,000/-3.134008.09.2003Rs.16,000/-4.148927.09.2003Rs.20,000/-5.155603.10.2003Rs.20,000/-C6.161506.10.2003Rs.14,500/-7.162108.10.2003Rs.5,000/-8.168213.10.2003Rs.15,500/-9.168913.10.2003Rs.3,300/-D10.174620.10.2003Rs.17,000/-11.176323.10.2003Rs.1,500/-12.176023.10.2003Rs.2,300/-13.180827.10.2003Rs.16,000/-E14.182801.11.2003Rs.3,000/-15.188205.11.2003Rs.20,000/-16.194211.11.2003Rs.15,000/-17.194111.11.2003Rs.3,000/-F18.195315.11.2003Rs.3,000/-19.195817.11.2003Rs.12,000/-20.200117.11.2003Rs.3,000/-

12. Case of the complainant is that whenever the respondent usedGto make cash purchases, cash memos/receipts were issued to therespondent and the above twenty receipts Ex.-22/C (colly) pertain tocash sale. Complainant-PW-1 further stated that the cheques issued bythe respondent-accused are subject matter of the complaints and pertainto the credit purchases made by the respondent-accused and the H

M/S. SHREE DANESHWARI TRADERS v. SANJAY JAIN[R. BANUMATHI, J.]

respondent has not made the payment or cleared the dues of the purchasesmade by him on credit. On the other hand, case of the respondent is thathe always used to make credit purchase and used to leave blank chequeswith the complainant-appellant and thereafter, he used to make paymentfor which the complainant used to issue receipts to the respondent;however, the appellant did not return the blank cheques left by therespondent with the appellant though the respondent made the paymentsand those cheques were misused by the appellant-complainant.

13. As seen from the receipts-Ex.-16/C (colly) and Ex.-22/C (colly),though the amount said to have been credited to the account of therespondent, the receipts contain the expression “cheques are subject torealisation”. The format of the receipt-Ex.-16 (colly) is as under:- M (CST) 4265 dt. 4.9.91Tel: ..............M (ST) 6104 dt. 4.9.91Res: ..............

M/s SHREE DANESHWARI TRADERS

General Merchant & Commission Agent

Shop No.8, Masjid BuildingMalbhar, MARGAO-GOA

No.1145

Date: 18.8.03

RECEIPT

Credited to the account of M/s Shantadurga Stores, Margao, the amountof Rs. Fifteen Thousand only, by Cash/Cheque/Draft Rs.15,000/-.

For M/s. Shree Daneshwari Traders

L/F ______________________

Cheques are subject to realisation.

Case of the appellant is that the receipts-Ex.-22/C (colly) wereissued by the appellant to the respondent towards cash payment madeby the respondent during the course of business. The courts belowfailed to consider that Ex.-22/C (colly) were issued by the appellant tothe respondent as against the cash payment made by respondent.Whereas the cheques were issued towards the credit purchases ofcommodities from the complainant which is a legally enforceable debt.

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A14. DW-2 is the father of respondent-accused. In his evidence,DW-2 stated that the respondent used to leave blank cheques with himin order to carry out the business transaction. DW-2 has stated thatthey used to purchase rice bags from the complainant and had left thecheques with the complainant. Admittedly, the cheques are in thehandwriting of DW-2. In his evidence, DW-2 stated that though theBamount pertaining to the purchase of rice has already paid, the complainantdid not return the cheques in spite of having received the amount pertainingto the purchase of rice. It is quite unbelievable that in a business/mercantile transaction, the accused even after making payment towardsthe purchase of rice bags, did not insist for the return of the cheques. ItCis quite improbable that the respondent-accused did not take any stepsto get back the cheques and continued with the business transactioneven though the complainant has not returned the cheques after paymentof the money.

15. The trial court in its judgment referred to the three chequesDand observed that the three cheques bearing Nos.2463, dated 18.08.2003;2480 dated 25.08.2003 and 2497 dated 08.08.2003 go to suggest that thelater cheque bearing No.2497 was given much more earlier to 18.08.2003or 25.08.2003 which seems inconsistent and it would not have been inthe normal course of business. The trial court held that the date ofissuance of the three cheques suggests that the cheques were alreadyEwith the complainant and they were utilised by the complainant thereafter.On this aspect, PW-1 was cross-examined as to why cheque bearingNo.2497 was issued on 08.08.2003 while it ought to have been issuedafter 25.08.2003 to which PW-1 stated that he does not know about thesame. After referring to the above three cheques, the trial court heldFthat in view of inconsistency, the presumption available under Section139 of the Negotiable Instruments Act is not available to the complainantwhich was affirmed by the High Court. It was further held that theblank cheques left by the accused were with the complainant and theyhave been used to file the complaint. The courts below did not keep in view that the appellant has no control over the manner of issuance ofGcheques by the respondent and how it was issued. Merely because,later cheque No.2497 was said to have been issued by the respondent atan earlier date i.e. 08.08.2003, it cannot be held that the complainant hadused the blank cheques issued by the respondent.

16. Under Section 138 of the Negotiable Instruments Act, onceHthe cheque is issued by the drawer, a presumption under Section 139 of the Negotiable Instruments Act in favour of the holder would be attracted.Section 139 creates a statutory presumption that a cheque received inthe nature referred to under Section 138 of the Negotiable InstrumentsAct is for the discharge in whole or in part of any debt or other liability.The initial burden lies upon the complainant to prove the circumstancesunder which the cheque was issued in his favour and that the same wasissued in discharge of a legally enforceable debt.

17. It is for the accused to adduce evidence of such facts andcircumstances to rebut the presumption that such debt does not exist orthat the cheques are not supported by consideration. Considering thescope of the presumption to be raised under Section 139 of the Act andthe nature of evidence to be adduced by the accused to rebut thepresumption, in Kumar Exports v. Sharma Carpets (2009) 2 SCC513, the Supreme Court in paras (14-15) and paras (18-20) held asunder:- “14.Section 139 of the Act provides that it shall be presumed,unless the contrary is proved, that the holder of a cheque receivedthe cheque of the nature referred to in Section 138 for thedischarge, in whole or in part, of any debt or other liability.

15. Presumptions are devices by use of which the courts areenabled and entitled to pronounce on an issue notwithstandingthat there is no evidence or insufficient evidence. Under theEvidence Act all presumptions must come under one or the otherclass of the three classes mentioned in the Act, namely, (1) “maypresume” (rebuttable), (2) “shall presume” (rebuttable), and (3)“conclusive presumptions” (irrebuttable). The term “presumption”is used to designate an inference, affirmative or disaffirmative ofthe existence of a fact, conveniently called the “presumed fact”drawn by a judicial tribunal, by a process of probable reasoningfrom some matter of fact, either judicially noticed or admitted orestablished by legal evidence to the satisfaction of the tribunal.Presumption literally means “taking as true without examinationor proof”.

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18. Applying the definition of the word “proved” in Section 3 ofthe Evidence Act to the provisions of Sections 118 and 139 of theAct, it becomes evident that in a trial under Section 138 of the Act A

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a presumption will have to be made that every negotiable instrumentwas made or drawn for consideration and that it was executedfor discharge of debt or liability once the execution of negotiableinstrument is either proved or admitted. As soon as the complainantdischarges the burden to prove that the instrument, say a note,was executed by the accused, the rules of presumptions underSections 118 and 139 of the Act help him shift the burden on theaccused. The presumptions will live, exist and survive and shallend only when the contrary is proved by the accused, that is, thecheque was not issued for consideration and in discharge of anydebt or liability. A presumption is not in itself evidence, but onlymakes a prima facie case for a party for whose benefit it exists.

19. The use of the phrase “until the contrary is proved” in Section118 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 presumptions to be raised under boththe provisions are rebuttable. When a presumption is rebuttable, itonly points out that the party on whom lies the duty of going forwardwith evidence, on the fact presumed and when that party hasproduced evidence fairly and reasonably tending to show that thereal fact is not as presumed, the purpose of the presumption isover.

20. The accused in a trial under Section 138 of the Act has twooptions. He can either show that consideration and debt did notexist or that under the particular circumstances of the case thenon-existence of consideration and debt is so probable that aprudent man ought to suppose that no consideration and debtexisted. To rebut the statutory presumptions an accused is notexpected to prove his defence beyond reasonable doubt as isexpected of the complainant in a criminal trial.The accused mayadduce direct evidence to prove that the note in question was notsupported by consideration and that there was no debt or liabilityto be discharged by him. However, the court need not insist inevery case that the accused should disprove the non-existence ofconsideration and debt by leading direct evidence because theexistence 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 servethe purpose of the accused. Something which is probable has tobe brought on record for getting the burden of proof shifted to thecomplainant. To disprove the presumptions, the accused shouldbring on record such facts and circumstances, upon considerationof which, the court may either believe that the consideration anddebt did not exist or their non-existence was so probable that aprudent man would under the circumstances of the case, act uponthe plea that they did not exist. Apart from adducing direct evidenceto prove that the note in question was not supported byconsideration or that he had not incurred any debt or liability, theaccused may also rely upon circumstantial evidence and if thecircumstances so relied upon are compelling, the burden maylikewise shift again on to the complainant.The accused may alsorely upon presumptions of fact, for instance, those mentioned inSection 114 of the Evidence Act to rebut the presumptions arisingunder Sections 118 and 139 of the Act.” [underlining added].

18. In the present case, by examining himself as PW-1, thecomplainant has discharged the initial burden cast upon him that thecheques were issued for the rice bags purchased on credit. With theexamination of PW-1, the statutory presumption under Section 139 ofthe Act arises that the cheques were issued by the respondent-accusedfor the discharge of any debt or other liability in whole or in part. Thecourts below disbelieved the evidence of the complainant on the groundthat there are no averments in the complaint that the commodities weresold for cash and that the rice bags were sold on credit and the chequeswere issued for the goods sold on credit. Though the complaint containsno specific averments that the cheques were issued for the purchasemade on credit, in his evidence, PW-1 clearly stated that the chequeswere issued for the commodities purchased on credit. The courts belowerred in brushing aside the evidence of PW-1 on the ground that therewere no averments in the complaint as to the purchases made by cashand purchase. The courts below also erred in not raising the statutorypresumption under Section 139 of the Act that the complainant receivedthe cheques to discharge the debt or other liability in whole or in part.

19. It is for the respondent-accused to adduce evidence to provethat the cheques were not supported by consideration and that therewas no debt or liability to be discharged by him. The receipts-Ex.-22/C

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A(colly) relied upon by the respondent-accused do not create doubt aboutthe purchases made on credit and the existence of a legally enforceabledebt for which the cheques were issued. The courts below erred insaying that by the receipts-Ex.22/C (colly), the respondent-accused hasrebutted the statutory presumption raised under Section 139 of theNegotiable Instruments Act. The oral and the documentary evidenceBadduced by the complainant are sufficient to prove that it was a legallyenforceable debt and that the cheques were issued to discharge thelegally enforceable debt. With the evidence adduced by the complainant,the courts below ought to have raised the presumption under Section139 of the Act. The evidence adduced by the respondent-accused is notCsufficient to rebut the presumption raised under Section 139 of the Act.The defence of the respondent that though he made payment for thecommodities/rice bags, the blank cheques were not returned by theappellant-complainant is quite unbelievable and unacceptable. Theimpugned judgment of the High Court cannot be sustained and is liableto be set aside. The respondent-accused is convicted under Section 138Dof the Negotiable Instruments Act in both the complaints; however,considering that the cheque transaction was of the year 2003, at thisdistant point of time, we do not deem it appropriate to impose anysentence of imprisonment on the accused.

20. In the result, the impugned judgment of the High Court inECriminal Appeal Nos.53 and 54 of 2006 is set aside and these appealsare allowed. The respondent-accused is convicted under Section 138 ofNegotiable Instruments Act and a fine of Rs.2,97,150/- (Rs.53,171/- +Rs.1,93,979/- + compensation of Rs.50,000/-) is imposed on therespondent in default of which, the respondent shall undergo imprisonmentFfor six months. The fine amount of Rs.2,97,150/- is to be deposited beforethe trial court within twelve weeks from today, failing which therespondent shall be taken into custody to serve the default sentence.On deposit of fine amount, the amount of Rs.2,97,150/- shall be paid tothe appellant-complainant.

GDevika Gujral

Appeals allowed.

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