Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt. = the respondent-accused should have given or signed blank cheque to the appellantcomplainant, as claimed by the respondent-accused, shows that initially there was mutual trust and faith between them.- In the absence of any finding that the cheque in question was not signed by the respondent-accused or not voluntarily made over to the payee and in the absence of any evidence with regard to the circumstances in which a blank signed cheque had been given to the appellant-complainant, it may reasonably be presumed that the cheque was filled in by the appellant-complainant being the payee in the presence of the respondent-accused being the drawer, at his request and/or with his acquiescence.The subsequent filling in of an unfilled signed cheque is not an alteration. There was no change in the amount of the cheque, its date or the name of the payee. The High Court ought not to have acquitted the respondent-accused of the charge under Section 138 of the Negotiable Instruments Act. In our considered opinion, the High Court patently erred in holding that the burden was on the appellant-complainant to prove that he had advanced the loan and the blank signed cheque was given to him in repayment of the same. The finding of the High Court that the case of the appellant-complainant became highly doubtful or not beyond reasonable doubt is patently erroneous for the reasons discussed above.

Hon’ble Ms. Justice Indira Banerjee

1
REPORTABLE
THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NOS.230-231 OF 2019
(@ SLP(CRL ) NOS. 9334-35 OF 2018)
Bir Singh … Appellant
VERSUS
Mukesh Kumar …Respondent
J U D G M E N T
Indira Banerjee, J.
Leave granted.

  1. These appeals are against a Judgment and order dated 21-11-
    2017 passed by the High Court of Punjab and Haryana at
    Chandigarh allowing the Criminal Revisional Application being
    Criminal Revision Petition No.849 of 2016 filed by the respondentaccused, challenging a judgment and order dated 20-2-2016
    passed by the Additional Sessions Judge, Palwal in Criminal Appeal
    No.13/2015 filed by the respondent-accused, inter alia, affirming a
    judgment and order of conviction of the respondent-accused,
    2
    passed by the Judicial Magistrate, 1st Class, Palwal under Section
    138 of the Negotiable Instruments Act, 1881.
  2. It is the case of the appellant-complainant, that the
    respondent-accused issued a cheque being Cheque No.034212
    dated 4-3-2012 drawn on Axis Bank, Branch, Palwal in the name of
    the appellant towards repayment of a “friendly loan” of Rs.15
    lakhs advanced by the appellant-complainant to the respondentaccused.
  3. On 11-4-2012, the appellant-complainant deposited the said
    cheque in his bank, but the cheque was returned unpaid with the
    endorsement “Insufficient Fund”.
  4. The appellant-complainant has alleged that, on the assurance
    of the respondent-accused, that there would be sufficient funds in
    his bank account to cover the amount of the cheque, the
    appellant-complainant again presented the cheque to his bank on
    23-5-2012, but it was again returned unpaid with the remark
    “Insufficient Fund”.
  5. On 15-6-2012, the appellant-complainant issued a legal notice
    to the respondent-accused through his lawyer, calling upon the
    respondent-accused to pay the cheque amount. The said notice,
    sent by registered post, was according to the appellantcomplainant, duly served on the respondent-accused. The
    respondent-accused, however, did not reply to the notice. Nor did
    he pay the cheque amount to the appellant-complainant.
    3
  6. The appellant-complainant filed a Criminal Complaint against
    the respondent-accused, being Case No.106 of 2012 before the
    Judicial Magistrate 1st Class, Palwal, under Section 138 of the
    Negotiable Instruments Act.
  7. Sections 138 and 139 of the Negotiable Instruments Act are
    set out herein below for convenience:-
    “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 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:
    Provided that nothing contained in this section shall
    apply unless—
    (a) the cheque has been presented to the bank within a
    period of six months from the date on which it is drawn
    or within the period of its validity, whichever is earlier;
    (b) the payee or the holder in due course of the cheque,
    as the case may be, makes a demand for the payment
    of the said amount of money by giving a notice in
    writing, to the drawer of the cheque,within thirty days of
    the receipt of information by him from the bank
    regarding the return of the cheque as unpaid; and
    (c) the drawer of such cheque fails to make the payment
    of the said amount of money to the payee or, as the
    case may be, to the holder in due course of the cheque,
    within fifteen days of the receipt of the said notice.
    4
    Explanation.— For the purposes of this section, “debt or
    other liability” means a legally enforceable debt or
    other liability.]
  8. Presumption in favour of holder.—It shall be
    presumed, unless the contrary is proved, that the
    holder of a cheque received the cheque of the nature
    referred to in section 138 for the discharge, in whole or
    in part, of any debt or other liability.”
  9. The object of Section 138 of the Negotiable Instruments Act is
    to infuse credibility to negotiable instruments including cheques
    and to encourage and promote the use of negotiable instruments
    including cheques in financial transactions. The penal provision of
    Section 138 of the Negotiable Instruments Act is intended to be a
    deterrent to callous issuance of negotiable instruments such as
    cheques without serious intention to honour the promise implicit in
    the issuance of the same.
  10. Having regard to the object of Section 138 of the Negotiable
    Instruments Act, a prosecution based on a second or successive
    default in payment of the cheque amount is not impermissible
    simply because no statutory notice had been issued after the first
    default and no proceeding for prosecution had been initiated. As
    held by this Court in MSR Leathers vs. S. Palaniappan & Anr
    1
    ,
    there is no real or qualitative difference between a case where
    default is committed and prosecution immediately launched and
    another where the prosecution is deferred till the cheque presented
    again gets dishonoured for the second time or successive times.
    1 (2013) 1 SCC 177
    5
  11. By a judgment and order dated 9-2-2015, the Judicial
    Magistrate I Class, Palwal convicted the respondent-accused under
    Section 138 of the Negotiable Instruments Act and sentenced him
    to undergo simple imprisonment for a period of one year and
    further directed him to pay compensation of Rs.15 lakhs to the
    appellant-complainant within one month from the date of the said
    Judgment and order. Being aggrieved, the respondent-accused filed
    a criminal appeal No.13/2015 dated 9-3-2015 in the court of
    Additional Sessions Judge, Palwal.
  12. By a judgment and order dated 20-2-2016, the Appellate
    Court upheld the conviction of the respondent-accused under
    Section 138 of the Negotiable Instruments Act and confirmed the
    compensation of Rs.15 lakhs directed to be paid to the appellantcomplainant. The sentence of imprisonment was however reduced
    to six months from one year.
  13. The respondent-accused filed a Criminal Revision Petition
    being CRR No.849 of 2016 in the High Court challenging the
    Judgment and order of the Appellate Court. The appellantcomplainant also filed a Criminal Revision Petition being CRR
    No.2017 of 2016 challenging the reduction of the sentence from
    one year to six months.
  14. By a common final Judgment and order dated 21-11-2017
    which is impugned before us, the High Court has reversed the
    concurrent factual findings of the Trial Court and the Appellate
    Court and acquitted the respondent of the charge under Section
    6
    138 of the Negotiable Instruments Act, observing, inter alia, that
    there was fiduciary relationship between the appellantcomplainant, an Income Tax practitioner, and the respondentaccused who was his client.
  15. The High Court observed and held:-
    “The complainant had fiduciary relationship with
    the accused-petitioner. Therefore, heavy burden was
    on the complainant to prove that he had advanced
    the loan and that blank cheque for the same was
    given to him. The complainant is an income tax
    practitioner and he knows that whenever loan is
    advanced to anybody, receipt has to be obtained and
    that such heavy amount is to be advanced only
    through a cheque or demand draft or RTGS. The
    accused-petitioner was the client of the complainant
    and they were having professional relationship. The
    accused-petitioner was no so thick and thin with the
    complainant. There is no reason why the
    complainant, who is an income tax practitioner, will
    advance such a heavy loan to his client without any
    close relationship and without obtaining any writing
    to this effect. There was heavy burden on the
    complainant. In such circumstances, the accusedpetitioner is successful in raising reasonable doubts
    that the complainant might have misused one of the
    blank cheques given to him for payment of income
    tax for depositing the same in the Treasury.
    In order to support his case, the accusedpetitioner took a risk by stepping himself into the
    witness box and offered himself for crossexamination. He asserted in his cross-examination
    that the tax return was deposited in cash and the
    complainant used to take cash from him. His version
    was also supported by one Praveen Kumar, DW2.
    From the abovenoted discussions, it is clear that
    the parties were in fiduciary relationship and heavy
    burden was on the complainant to prove that he had
    advanced a loan of Rs.15,00,000/- to his client
    7
    without obtaining any writing and that he has not
    misused any blank cheque of his client. Such loan
    was not shown in the income tax return of the
    complainant.
    For the reasons mentioned above, the case of the
    complainant becomes highly doubtful and is not
    beyond all reasonable doubts. Therefore, no
    presumption under Section 138 of the Negotiable
    Instruments Act, 1881 can be raised. Both the courts
    below erred in holding the accused-petitioner guilty
    for the commission of offence punishable under
    Section 138 of the Negotiable Instruments Act, 1881.
    In view of the foregoing discussions, CRR No. 849
    of 2016 is allowed and CRR No.2017 of 2016 is
    dismissed. The accused- petitioner stands acquitted of
    the notice of accusation served upon him.”
  16. The short question before us is whether the High Court was
    right in reversing the concurrent factual findings of the Trial Court
    and of the Appellate court in exercise of its revisional jurisdiction.
    The questions of law which rise in this appeal are, (i) whether a
    revisional Court can, in exercise of its discretionary jurisdiction,
    interfere with an order of conviction in the absence of any
    jurisdictional error or error of law and (ii) whether the payee of a
    cheque is disentitled to the benefit of the presumption under
    Section 139 of the Negotiable Instruments Act, of a cheque duly
    drawn, having been issued in discharge of a debt or other liability,
    only because he is in a fiduciary relationship with the person who
    has drawn the cheque.
    8
  17. The Trial Court, on analysis of the evidence adduced by the
    respective parties arrived at the factual finding that the
    respondent-accused had duly issued the cheque in question for
    Rs.15 lakhs in favour of the appellant-complainant, in discharge of
    a debt or liability, the cheque was presented to the bank for
    payment within the period of its validity, but the cheque had been
    returned unpaid for want of sufficient funds in the account of the
    respondent-accused in the bank on which the cheque was drawn.
    Statutory Notice of dishonour was duly issued to which there was
    no response from the respondent-accused.
  18. The Appellate Court affirmed the aforesaid factual findings.
    The Trial Court and the Appellate Court arrived at the specific
    concurrent factual finding that the cheque had admittedly been
    signed by the respondent-accused. The Trial Court and the
    Appellate Court rejected the plea of the respondent-accused that
    the appellant-complainant had misused a blank signed cheque
    made over by the respondent-accused to the appellantcomplainant for deposit of Income Tax, in view of the admission of
    the respondent-accused that taxes were paid in cash for which the
    appellant-complainant used to take payment from the respondent
    in cash.
  19. It is well settled that in exercise of revisional jurisdiction under
    Section 482 of the Criminal Procedure Code, the High Court does
    not, in the absence of perversity, upset concurrent factual findings.
    It is not for the Revisional Court to re-analyse and re-interpret the
    9
    evidence on record.
  20. As held by this Court in Southern Sales and Services and
    Others vs. Sauermilch Design and Handels GMBH2
    , it is a well
    established principle of law that the Revisional Court will not
    interfere even if a wrong order is passed by a court having
    jurisdiction, in the absence of a jurisdictional error. The answer to
    the first question is therefore, in the negative.
  21. In passing the impugned judgment and order dated 21-11-
    2017, the High Court mis-construed Section 139 of Negotiable
    Instruments Act, which mandates that unless the contrary is
    proved, it is to be presumed that the holder of a cheque received
    the cheque of the nature referred to in Section 138, for the
    discharge, in whole or in part, of any debt or other liability.
    Needless to mention that the presumption contemplated under
    Section 139 of the Negotiable Instruments Act, is a rebuttable
    presumption. However, the onus of proving that the cheque was
    not in discharge of any debt or other liability is on the accused
    drawer of the cheque.
  22. In Hiten P. Dalal vs. Bratindranath Banerjee
    3
    , this Court
    held that both Section 138 and 139 require that the Court shall
    presume the liability of the drawer of the cheques for the amounts
    for which the cheques are drawn. Following the judgment of this
    Court in State of Madras vs. Vaidyanatha Iyer
    4
    , this Court held
    2 (2008) 14 SCC 457
    3 (2001) 6 SCC 16
    4 AIR 1958 SC 61
    10
    that it was obligatory on the Court to raise this presumption.
  23. Section 139 introduces an exception to the general rule as to
    the burden of proof and shifts the onus on the accused. The
    presumption under Section 139 of the Negotiable Instruments Act
    is a presumption of law, as distinguished from presumption of
    facts. Presumptions are rules of evidence and do not conflict with
    the presumption of innocence, which requires the prosecution to
    prove the case against the accused beyond reasonable doubt. The
    obligation on the prosecution may be discharged with the help of
    presumptions of law and presumptions of fact unless the accused
    adduces evidence showing the reasonable possibility of the nonexistence of the presumed fact as held in Hiten P. Dalal (supra).
  24. Presumption of innocence is undoubtedly a human right as
    contended on behalf of the respondent-accused, relying on the
    judgments of this Court in Ranjitsing Brahmajeetsing Sharma
    vs. State of Maharashtra and Anr
    5
    and Rajesh Ranjan Yada
    @ Pappu Yadav vs. CBI through its Director
    6
    . However the
    guilt may be established by recourse to presumptions in law and
    presumptions in facts, as observed above.
  25. In Laxmi Dyechem vs. State of Gujarat & Ors.
    7
    , this Court
    reiterated that in view of Section 139, it has to be presumed that a
    cheque was issued in discharge of a debt or other liability but the
    5 (2005) 5 SCC 294
    6 (2007) 1 SCC 70
    7 (2012) 13 SCC 375
    11
    presumption could be rebutted by adducing evidence. The burden
    of proof was however on the person who wanted to rebut the
    presumption. This Court held “however, this presumption coupled
    with the object of Chapter XVII of the Act leads to the conclusion
    that by countermanding payment of a post dated cheque, a party
    should not be allowed to get away from the penal provision of
    Section 138 of the Act”.
  26. In Kumar Exports vs. Sharma Carpets
    8
    , this Court
    reiterated that there is a presumption that every negotiable
    instrument duly executed, is for discharge of a debt or liability, but
    the presumption is rebuttable by proving the contrary. In the facts
    and circumstances of the case it was found that the cheque in
    question was towards advance for purchase of carpets, which were
    in fact not sold by the payee of the cheque to the drawer, as
    proved from the deposition of an official of the Sales Tax
    Department, who stated that the payee had admitted that he had
    not sold the carpets.
  27. In K.N. Beena vs. Muniyappan and Another
    9
    , this Court
    held that in view of the provisions of Section 139 of the
    Negotiable Instruments Act read with Section 118 thereof, the
    Court had to presume that the cheque had been issued for
    discharging a debt or liability. The said presumption was
    rebuttable and could be rebutted by the accused by proving the
    8 (2009) 2 SCC 513
    9(2001) 8 SCC 458
    12
    contrary. But mere denial or rebuttal by the accused was not
    enough. The accused had to prove by cogent evidence that there
    was no debt or liability. This Court clearly held that the High
    Court had erroneously set aside the conviction, by proceeding on
    the basis that denials/averments in the reply of the accused were
    sufficient to shift the burden of proof on the complainant to prove
    that the cheque had been issued for discharge of a debt or a
    liability. This was an entirely erroneous approach. The accused
    had to prove in the trial by leading cogent evidence that there
    was no debt or liability.
  28. In R. Vijayan vs. Baby and Another
    10
    this Court observed
    that the object of Chapter XVII of the Negotiable Instruments Act
    is both punitive as also compensatory and restitutive. It provides
    a single forum and single proceeding for enforcement of criminal
    liability by reason of dishonour of cheque and for enforcement of
    the civil liability for realization of the cheque amount, thereby
    obviating the need for the creditor to move two different fora for
    relief. This Court expressed its anguish that some Magistrates
    went by the traditional view, that the criminal proceedings were
    for imposing punishment and did not exercise discretion to direct
    payment of compensation, causing considerable difficulty to the
    complainant, as invariably the limitation for filing civil cases
    would expire by the time the criminal case was decided.
    10 (2012) 1 SCC 260
    13
  29. In R. Vijayan vs. Baby and another (supra) this Court
    observed that unless there were special circumstances, in all
    cases of conviction, the Court should uniformly exercise the power
    to levy fine up to twice the cheque amount and keeping in view
    the cheque amount and the simple interest thereon at 9% per
    annum as the reasonable quantum of loss, direct payment of such
    amount as compensation. This Court rightly observed that
    uniformity and consistency in deciding similar cases by different
    courts not only increases the credibility of the cheque as a
    Negotiable Instrument but also the credibility of the Courts of
    Justice.
  30. The judgment of this Court in Raj Kumar Khurana vs. State
    of (NCT of Delhi) & Anr.
    11 was rendered in the particular facts of
    the case where the drawer of the cheque had reported to the police
    and the bank that two unfilled cheques signed by him had been
    stolen.
  31. The proposition as re-enunciated in John K John vs. Tom
    Varghese & Anr.
    12 cited on behalf of the respondent-accused that
    if two views are possible, this Court, in exercise of its jurisdiction
    under Article 136 of the Constitution would ordinarily not interfere
    with a judgment of acquittal, is well settled.
  32. In the aforesaid case this Court affirmed an acquittal under
    Section 138 of the Negotiable Instrument Act, in the
    11 (2009) 6 SCC 72
    12 (2007) 12 SCC 714
    14
    peculiar facts and circumstances of the case where several civil
    suits between the parties were pending.
  33. In Krishna Janardhan Bhat vs. Dattatraya G. Hegde
    13
    ,
    cited on behalf of the respondent-accused, this Court reaffirmed
    that Section 139 of the Act raises a presumption that a cheque duly
    drawn was towards a debt or liability. However, keeping in view
    the peculiar facts and circumstances of the case, this Court was of
    the opinion that the courts below had approached the case from a
    wholly different angle by wrong application of legal principles.
  34. It is well settled that a judgment is a precedent for the issue
    of law which is raised and decided. It is the ratio decidendi of the
    case which operates as a binding precedent. As observed by this
    Court in State of Punjab & Ors. vs. Surinder Kumar & Ors.
    14
    ,
    what is binding on all courts is what the Supreme Court says under
    Article 141 of the Constitution, which is declaration of the law and
    not what it does under Article 142 to do complete justice.
  35. Furthermore, to quote V. Sudhish Pai from his book
    “Constitutional Supremacy – A Revisit”:-
    “Judgments and observations in judgments are not
    to be read as Euclid’s theorems or as provisions of
    statute. Judicial utterances/pronouncements are in
    the setting of the facts of a particular case. To
    interpret words and provisions of a statute it may
    become necessary for judges to embark upon lengthy
    discussions, but such discussion is meant to explain
    not define, Judges interpret statutes, their words are
    13 (2008) 4 SCC 54
    14 (1992) 1 SCC 489
    15
    not to be interpreted as statutes. Thus, precedents
    are not to be read as statutes.”
  36. The proposition of law which emerges from the judgments
    referred to above is that the onus to rebut the presumption under
    Section 139 that the cheque has been issued in discharge of a debt
    or liability is on the accused and the fact that the cheque might be
    post dated does not absolve the drawer of a cheque of the penal
    consequences of Section 138 of the Negotiable Instruments Act.
  37. A meaningful reading of the provisions of the Negotiable
    Instruments Act including, in particular, Sections 20, 87 and 139,
    makes it amply clear that a person who signs a cheque and makes
    it over to the payee remains liable unless he adduces evidence to
    rebut the presumption that the cheque had been issued for
    payment of a debt or in discharge of a liability. It is immaterial that
    the cheque may have been filled in by any person other than the
    drawer, if the cheque is duly signed by the drawer. If the cheque
    is otherwise valid, the penal provisions of Section 138 would be
    attracted.
  38. If a signed blank cheque is voluntarily presented to a payee,
    towards some payment, the payee may fill up the amount and
    other particulars. This in itself would not invalidate the cheque.
    The onus would still be on the accused to prove that the cheque
    was not in discharge of a debt or liability by adducing evidence.
  39. It is not the case of the respondent-accused that he either
    signed the cheque or parted with it under any threat or coercion.
    16
    Nor is it the case of the respondent-accused that the unfilled
    signed cheque had been stolen. The existence of a fiduciary
    relationship between the payee of a cheque and its drawer, would
    not disentitle the payee to the benefit of the presumption under
    Section 139 of the Negotiable Instruments Act, in the absence of
    evidence of exercise of undue influence or coercion. The second
    question is also answered in the negative.
  40. Even a blank cheque leaf, voluntarily signed and handed over
    by the accused, which is towards some payment, would attract
    presumption under Section 139 of the Negotiable Instruments Act,
    in the absence of any cogent evidence to show that the cheque
    was not issued in discharge of a debt.
  41. The fact that the appellant-complainant might have been an
    Income Tax practitioner conversant with knowledge of law does not
    make any difference to the law relating to the dishonour of a
    cheque. The fact that the loan may not have been advanced by a
    cheque or demand draft or a receipt might not have been obtained
    would make no difference. In this context, it would, perhaps, not
    be out of context to note that the fact that the respondent-accused
    should have given or signed blank cheque to the appellantcomplainant, as claimed by the respondent-accused, shows that
    initially there was mutual trust and faith between them.
  42. In the absence of any finding that the cheque in question was
    not signed by the respondent-accused or not voluntarily made over
    17
    to the payee and in the absence of any evidence with regard to the
    circumstances in which a blank signed cheque had been given to
    the appellant-complainant, it may reasonably be presumed that
    the cheque was filled in by the appellant-complainant being the
    payee in the presence of the respondent-accused being the
    drawer, at his request and/or with his acquiescence. The
    subsequent filling in of an unfilled signed cheque is not an
    alteration. There was no change in the amount of the cheque, its
    date or the name of the payee. The High Court ought not to have
    acquitted the respondent-accused of the charge under Section 138
    of the Negotiable Instruments Act.
  43. In our considered opinion, the High Court patently erred in
    holding that the burden was on the appellant-complainant to prove
    that he had advanced the loan and the blank signed cheque was
    given to him in repayment of the same. The finding of the High
    Court that the case of the appellant-complainant became highly
    doubtful or not beyond reasonable doubt is patently erroneous for
    the reasons discussed above.
  44. The appeals are allowed. The judgment and order of the High
    Court is set aside. The conviction of the respondent under Section
    138 of the Negotiable Instruments Act is confirmed. However, the
    respondent-accused is sentenced only to fine, which is enhanced to
    Rs.16 lakhs and shall be paid as compensation to the appellantcomplainant. The fine shall be deposited in the Trial Court within
    eight weeks from the date, failing which the sentence of
    18
    imprisonment of one year as imposed by the Trial Court shall
    revive. There shall be no order as to costs.
    ……………………………J.
    (R. BANUMATHI)
    ……………………………J.
    (INDIRA BANERJEE)
    FEBRUARY 06, 2019
    NEW DELHI