Shampa Dutt (Paul), J.
1. The petitioner/complainant has filed revision praying for setting aside of the judgment dated 07/08/2019 passed by the Additional District & session Judge 1st Fast Track Court, Calcutta in Criminal Revision no. 61/2018 thereby setting aside the judgment and order passed by the Ld. Metropolitan Magistrate 3rd Court, at Calcutta dated 31.07.2017 in complaint case no. C-39853/2009 u/s 138 of The Negotiable Instruments Act, 1881, convicting the opposite party No.1/ accused to suffer Imprisonment till the rising of the count and to pay compensation of Rs 5,20,000 to the complainant within 3 months id to suffer simple Imprisonment for 6 months.
2. The petitioner/complainants case is that the Opposite party no.1 in discharge of this legal liabilities towards the petitioner issued one account payee cheque being cheque no. 366919 dated 14.12.2008 drawn on Allahabad Bank, Sodepur branch, District North 24 Parganas for a sum of Rs.2,60,000/- (Two Lakhs Sixty Thousand Only) on promise that the same would be honoured on its presentation for payment.
3. The petitioner presented the aforesaid cheque for payment with his banker Indusind Bank Ltd., 3A, Upper Wood Street, Kolkata-700017 on 08.06.2009 i.e. within the validity period of its presentation.
4. The aforesaid cheque was dishonoured with the remarks “Insufficient Fund” and as such the said cheque was returned to your petitioner with Banker’s Return Memo dated 09.06.2009 which was received by the petitioner on 09.06.2009.
5. The petitioner through his advocate Mr. Jamini Ranjan Ghosh sent a notice of demand dated 12.06.2009 u/s 138(b) of the negotiable Instruments Act, 1881thereby demanding payment of cheque amount within 15 days from the date of receipt of notice. The aforesaid demand notice was sent through Registered Post with A/D on 12.06.2009. The A/D card has been proved and marked exhibit 5 by the learned Magistrate. On completion of trial, the learned Magistrate convicted the accused/opposite party no.1 as above. On appeal by the convict/accused/opposite party No.1, the Sessions judge set aside the order of conviction and acquitted the accused.
6. Hence the revision praying for setting aside of the order of acquitted.
7. Mr P. Roy learned counsel for the petitioner has submitted that the Ld. Addl. District & Session Judge, 1st Fast Track Court, Calcutta has grossly erred in setting aside the judgement of the 3rd Metropolitan Magistrate, Calcutta.
8. That the Judgement dated 07/08/2019 passed by the Ld. Addl. District & Session Judge, 1st Fast Track Court, Calcutta has been passed without applying his judicial mind which is bad in law.
9. The Session Judge, has failed to appreciate the evidence on record which clearly proves that the accused being opposite party no. 1 herein had issued the cheque voluntarily and without any pressure, coercion or undue influence.
10. The Ld. Addl. District & Session Judge, 1st Fast Track Court, Calcutta failed to consider the settled principle of law that the complainant in a cheque bounce case need not prove the “amount due” as if he has to prove a debit in civil court.
12. The Ld. Judge also failed to consider the legally settled principal that once the cheque is signed and issued by the drawer, the same has to be presumed to have been issued in discharge of legally enforceable liability.
13. The Ld. Judge also failed to notice the fact that the accused at no point of time issued any letter or communication to the complainant demanding return of the cheque or to supply the goods (which he now claims to not have received) which clearly shows that the accused had received the goods to the best of his satisfaction.
14. The Ld. Court failed to consider Exhibit-1 against which the goods were supplied to the accused.
15. The Ld. Court also failed to consider the fact that the defence lawyer put a suggestion before the complainant in his cross examination dated 31.08.2015 saying that the complainant forcibly got exhibit-1 (Promissory note) executed by the accused. If this is the plea of the defence then the accused must have reported such forceful execution of promissory note to the nearest Police Station but the accused has failed to show any complaint submitted to police which clearly proves that the accused voluntarily signed the same.
16. For that the Ld. Judge ought to have considered that the accused didn’t write any letter or communication to complainant even after the dishonour of cheque stating that the said cheque was presented without any liability on his part.
17. The Ld. Judge failed to consider the statement of the accused in his cross examination dated 29/11/2016 which read as “In spite of receiving the notice I have not written any reply letter to the complainant regarding non-supply or the issuance of security cheque towards the complainant”.
18. That the promissory note was executed on 11.11.2008 but the cheque was issued on 14.12.2008 and as such in no way it can be said that the said cheque was issued as security on the basis of promissory note.
19. That the impugned order/Judgement passed by the Ld. Sessions Court is otherwise bad both in facts and law and is liable to be set aside.
20. Mr. M. Nandi, learned counsel for the opposite party No.1, submits that the learned session Judge rightly set aside the judgement of the learned Magistrate which was not in accordance with law. The findings of the learned session Judge is in accordance with law and on proper appreciation of evidence and as such the Revision is liable to be dismissed.
21. Heard the counsels at length. Perused the materials as record including the judgement under revision. Considered.
22. Section 138 of Negotiable instruments Act lays down:-
“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 provision of this Act, be punished with imprisonment for a term which may extend 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.”
23. On going through the judgements of the learned Magistrate and the learned Session Judge, it is before this court that there is sufficient evidence to show that the cheque was duly issued and after completion of all formalities the proceedings under section 138 NI act was initiated.
24. The learned Magistrate on considering the evidence before the court and materials on record, convicted the accused/opposite party no. 1.
25. The session Judge after considering the materials on record, while setting aside the Judgement of conviction and acquitting the accuseds held:-
“If the complainant succeeds to discharge his initial burden of proof then it shifts upon the shoulder of the accused. In the present case in hand, this court finds that the respondent No. 1 completely failed to discharge his initial burden of proof by producing minimum documents to rope in the revisionist for liability. The so called promissory note (exhibit-1) can not be relied upon as the witness of such execution is the wife of respondent No. 1 and has been examined to prove it nor there is the writer who wrote it has been examined, so exhibit-1 can not be relied upon as it has not been admitted into evidence in accordance with the requirement of proving a document under the law of evidence Act.”
26. The said findings of the learned session Judge is clearly bad in law. The Session Judge has totally misinterpreted the provision under Section 139 N.I Act which goes like this:-
Section 139 of Negotiable instruments Act lays down:-
“139. Presumption in favour of holder.— It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.
Nature and Scope.— This Section raises presumption of law that cheque duly drawn was in discharge of debt or liability. However, presumption is rebuttable and onus lies on drawer to rebut it by adducing cogent evidence to the contrary. This presumption is not in conflict with human right of presumption of innocence of accused which prosecution is required to dislodge by proving its case against accused beyond reasonable doubt, Bir Singh vs. Mukesh Kumar, (2019) 18 SCC 106 [LQ/SC/2019/517 ;] .
Burden of rebuttal of presumption.— The presumption mandated by Section 139 does indeed include the existence of a legally enforceable debt or liability. Bare denial of the passing of the consideration and existence of debt, is not enough to rebut the presumption. To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. Rather, something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non-existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the consideration did not exist, or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on to the complainant. 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 Section 118 and 139 of the NI Act, Uttam Ram v. Devinder Singh Hudan, (2019) 10 SCC 287 [LQ/SC/2019/1587] .”
27. In Bir Singh vs. Mukesh Kumar (Criminal Appeals Nos. 230- 231 of 2019 the Supreme Court on 06.02.2019, held:-
“21. In passing the impugned judgment and order dated 21-11- 2017, the High Court misconstrued 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 Banerjee3, 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 Iyer4, this Court held 2 (2008) 14 SCC 457 3 (2001) 6 SCC 16 4 AIR 1958 SC 61 [LQ/SC/1957/98] 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 non- existence 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 Anr5 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 [LQ/SC/2012/1051] 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 Carpets8, 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 [LQ/SC/2001/2418] 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 [LQ/SC/2011/1346]
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 [LQ/SC/2007/1279] 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 respondentaccused, 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 [LQ/SC/1991/719] 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. 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.”
28. The supreme court in Criminal Appeal No. of 2022 @ SLP (Crl.) No(S) 5241 of 2016, Jain P. Jose versus Santosh & Anr., on 10th November, 2022 while considering the presumptions under section 118 N.I Act and 139 N.I Act, held:-
“In the aforesaid factual background, we do not think that the High Court was right in holding that the onus was not on the respondent to show that the debt was neither due nor payable. Sections 118 and 139 of the N.I. Act, read:
118. Presumptions as to negotiable instruments. — Until the contrary is proved, the following presumptions shall be made:-
(a) of consideration — that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;
(b) as to date —that every negotiableinstrument bearing a date was made or drawn on such date;
(c) as to time of acceptance —that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity;
(d) as to time of transfer —that every transferof a negotiable instrument was made before its maturity;
(e) as to order of indorsements —that theindorsements appearing upon a negotiable instrument were made in the order in 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:
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 or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him. xx xx xx
139. Presumption in favour of holder.—It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.
Referring the Sections of the N.I. Act, a three Judges Bench of this Court in “T. Vasanthakumar Vs. Vijaykumari" (2015) 8 SCC 378, [LQ/SC/2015/653] has held:
“9. Therefore, in the present case since the cheque as well as the signature has been accepted by the accused-respondent, the presumption under Section 139 would operate. Thus the burden was on the accused to disprove the cheque or the existence of any legally recoverable debt or liability. To this effect, the accused has come up with a story that the cheque was given to the complainant long back in 1999 as a security to a loan; the loan was repaid but the complainant did not, return the security cheque. According to the accused, it was that very cheque used by the complainant to implicate the accused. However, it may be noted that the cheque was dishonoured because the payment was stopped and not for any other reason. This implies that the accused had knowledge of the cheque being presented to the bank, or else how would the accused have instructed her banker to stop the payment. Thus, the story brought out by the accused is unworthy of credit, apart from being unsupported by any evidence.
This decision, refers to an earlier judgment of this Court in “Rangappa vs. Sri Mohan” (2010) 11 SCC 441, [LQ/SC/2010/528] which elucidating on the presumption under Section 139 of the N.I. Act, observes that this includes a presumption that there exists a legally enforceable debt or liability.
However, the presumption under Section 139 of the N.I. Act is rebuttable and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested.
A recent decision of a three Judges Bench of this Court in “Kalamani Tex and Another vs. P. Balasubramanian” (2021) 5 SCC 283, [LQ/SC/2021/87 ;] examines the scope and ambit of the presumption under Sections 118 and 139 of the N.I. Act, to hold:
“14. Once the 2nd appellant had admitted his signatures on the cheque and the deed, the trial Court ought to have presumed that the cheque was issued as consideration for a legally enforceable debt. The trial Court fell in error when it called upon the respondent complainant to explain the circumstances under which the appellants were liable to pay. Such approach of the trial Court was directly in the teeth of the established legal position as discussed above, and amounts to a patent error of law.
xx xx xx
17. Even if we take the arguments raised by theappellants at face value that only a blank cheque and signed blank stamp papers were given to the respondent, yet the statutory presumption cannot be obliterated. It is useful to cite "Bir Singh v. Mukesh Kumar”, where this court held that:
“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.”
18. Considering the fact that there has been anadmitted business relationship between the parties, we are of the opinion that the defence raised by the appellants does not inspire confidence or meet the standard of ‘preponderance of probability’. In the absence of any other relevant material, it appears to us that the High Court did not err in discarding the appellants’ defence and upholding the onus imposed upon them in terms of Section 118 and Section 139 of the Negotiable Instruments Act.”
29. As such the findings of the session judge “that respondent No.1/complainant completely failed to discharge his initial burden of proof is totally erroneous and bad in law. The Session Judge totally overlooked the fact that Sec 139 N.I Act clearly includes a presumption that there exists a legally enforceable debt or liability. However the presumption is rebuttable by the accused. There is no such requirement of the complainant to discharge his initial burden of proof as held by the Session Judge.
30. The question of “failing to discharge his initial burden of proof” by the complainant as held by the session is erroneous and bad in law and the judgement under revision is thus liable to be set aside.
31. Sec 138 N.I Act provides for punishment of imprisonment for a term which may be extended to two years or with fine which may extend to twice the amounts of the cheque or with both.
32. The Learned Magistrate while convicting the opposite party no. 1/accused has imposed the maximum fine amount permissible in this case, which in the interest of justice requires modification.
33. The cheque amount was for an amount Rupees 2,60,000/- and the fine imposed is RS 5,20,000/- (exactly twice the amount)
34. The case is of the year 2017. Five years have passed.
35. Accordingly the amount of fine is modified to Rupees 4,00,000/- instead of Rs 5,20,000/- to be paid within two months from the date of this judgement, in default the accused shall serve out his sentence of imprisonment in default of fine.
36. The Judgement dated 07.08.2019 passed by the Additional District & Session Judge, 1st Fast Track Court, Calcutta in Criminal Revision no. 61/2018 is hereby set aside and judgment dated 31.07.2017 passed by the Ld. Metropolitan Magistrate, 3rd Court, Calcutta in Complaint case no. C-39853/2009, u/s 138 of the Negotiable Instruments Act, 1881, is hereby affirmed and modified to the above extent.
37. Accordingly, the criminal revisional application being CRR 150 of 2020 is disposed.
38. No order as to costs.
39. Case diary be returned all connected applications stands disposed of interim order if any stand vacated.
40. Let a copy of this judgment sent to the Trial Court for compliance.
41. Urgent Photostat Certified copy of this Judgment, if applied for, be supplied expeditiously after complying with all necessary legal formalities.
