ANSS RAJASHEKAR versus AUGUSTUS JEBA ANANTH

Citation: [2019] 1 S.C.R. 731 · Decided: 18-01-2019 · Supreme Court of India · Bench: D.Y. CHANDRACHUD · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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731
ANSS RAJASHEKAR
v.
AUGUSTUS JEBA ANANTH
(Criminal Appeal Nos. 95-96 of 2019)
JANUARY 18, 2019
[DR. DHANANJAYA Y CHANDRACHUD
AND M.R. SHAH, JJ.]
Negotiable Instruments Act, 1881 – ss.138 and 139 –
Dishonour of cheque – Appeal against conviction – Appellant’s
plea was that there was an absence of legally enforceable debt and
the burden which was cast by the provisions of s.139 was discharged
by him – Complainant’s case was that the appellant had taken a
loan of Rs.15 lakhs from him and the cheques were issued by
appellant in discharge of the same – The defence of the appellant
was that he did not borrow the said amount as alleged nor did he
issue the cheque in discharge of any legally enforceable debt and
that four blank cheques were issued by him to the complainant on
his assurance of a loan from a financial institution – Held:
Presumption under s.139 of the Act is rebuttable and the standard
of proof for rebuttal of the presumption under s.139 of the Act is
guided by a preponderance of probabilities – Complainant failed
to establish the source of funds which he allegedly utilized for giving
loan of Rs. 15 lakhs to the appellant – There was no receipt or
document evidencing the payment of the amount – During the course
of his cross-examination, the complainant had deposed that earlier,
the appellant had furnished two cheques for Rs. 5 lakhs and Rs. 10
lakhs which he had presented – Complainant did not mention
anything about these two cheques in his complaint – Nothing was
stated by the complainant in regard to the fate of the earlier two
cheques – Non-disclosure of the facts pertaining to the earlier two
cheques, and the steps, if any, taken for recovery was a material
consideration which indicated that there was a doubt in regard to
the transaction – Appellant duly rebutted the presumption under
s.139 of the Act and, therefore, is held entitled to acquittal.
Allowing the appeals, the Court
HELD: 1.1 Section 139 of the Act mandates that it shall be
presumed, unless the contrary is proved, that the holder of a
[2019] 1 S.C.R. 731
731
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SUPREME COURT REPORTS
[2019] 1 S.C.R.
cheque received it, in discharge, in whole or in part, of a debt, or
liability. The expression “unless the contrary is proved” indicates
that the presumption under Section 139 of the Act is rebuttable.
Terming this as an example of a “reverse onus clause” the three
Judge Bench of this Court in Rangappa held that in determining
whether the presumption has been rebutted, the test of
proportionality must guide the determination. The standard of
proof for rebuttal of the presumption under Section 139 of the
Act is guided by a preponderance of probabilities. In the instant
case, the defence of the appellant was that the cheque was issued
to the complainant on an assurance of a loan which would be
obtained from a financial institution.  [Paras 10, 11][737-E-F; 738-
C-D]
1.2  During the course of his cross-examination, PW-1
admitted that a General Power of Attorney was executed by the
appellant in his favour.  Admittedly, the appellant and the
respondent are related and there was some civil litigation
between the father of the complainant and the appellant. The
complainant admitted that, as a matter of fact, he himself received
an amount of Rs. 10 lakhs from the appellant under a loan
transaction but stated that he had repaid that amount to the
appellant. PW-1 stated that the appellant had requested him for a
loan of Rs. 15 lakhs in February 2004. The defence of the appellant
being that no amount was actually paid by the complainant to him,
the evidence of PW-1 in regard to the payment of the loan assumes
significance. According to PW-1, the loan of Rs. 15 lakhs was
paid into the hands of a representative of the appellant at his
request. The appellant failed to indicate even the name of the
representative to whom the alleged amount of Rs. 15 lakhs is
stated to have been paid over in cash. The entire amount,
significantly, is alleged to have been paid over without obtaining
a receipt or document evidencing the payment of the amount. In
the notice of demand that was issued by the complainant to the
appellant after the cheque had been returned for want of funds,
the complainant stated that the appellant had sought a ‘financial
accommodation’ of Rs. 15 Lakhs. The first appellate court noted
that while conducting the cross-examination of the accused, the
complainant had stated that the accused had demanded a loan of
Rs. 15 l

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