G H M/S. SHREE DANESHWARI TRADERS versus SANJAY JAIN AND ANOTHER

Citation: [2019] 11 S.C.R. 370 · Decided: 21-08-2019 · Supreme Court of India · Bench: R. BANUMATHI · Disposal: Appeal(s) allowed

Cited by 1 judgment(s) · cites 2 · see the full citation network in Lexace

Judgment (excerpt)

A
B
C
D
E
F
G
H
370
SUPREME COURT REPORTS
[2019] 11 S.C.R.
M/S. SHREE DANESHWARI TRADERS
v.
SANJAY JAIN AND ANOTHER
(Criminal Appeal Nos. 61-62 of 2011)
AUGUST 21, 2019
[R. BANUMATHI AND A. S. BOPANNA, JJ.]
Negotiable Instruments Act, 1881: ss.138, 139 – Dishonour
of cheque – Insufficiency of funds – Complaint under s.138 – Case
of complainant-appellant was that the respondent-accused used to
purchase rice bags from the appellant sometimes on credit and
sometimes on cash and that the cheques issued by the respondent
were subject matter of the complaints and pertained to the credit
purchases made by the respondent for which no payment was made
– On the other hand, case of the respondent was that he always
used to make credit purchase and leave blank cheques with the
appellant and thereafter, he used to make payment for which the
appellant used to issue receipts to the respondent; however, the
appellant did not return the blank cheques left by the respondent
with the appellant though the respondent made the payments and
those cheques were misused by the appellant-complainant – Acquittal
by trial court and High Court on the ground that appellant failed to
prove that respondent owed him debt and the cheques were issued
for the discharge of the said debt – Held: It is quite unbelievable
that in a business/mercantile transaction, the respondent even after
making payment towards the purchase of rice bags, did not insist
for return of the cheques and did not take any steps to get them
back and continued with the business transaction even though the
appellant did not return the cheques after payment of the money –
Courts below referred to the three cheques and observed that the
date of issuance of the three cheques suggested that the cheques
were already with appellant and they were utilised by appellant
thereafter and, therefore, in view of inconsistency, the presumption
available under s.139 was not available to the appellant – The courts
below did not keep in view that the appellant had no control over
the manner of issuance of cheques by the respondent and how it
was issued – Merely because, later cheque was said to have been
   [2019] 11 S.C.R. 370
370
A
B
C
D
E
F
G
H
371
issued by the respondent at an earlier date, it cannot be held that
the appellant had used the blank cheques issued by the respondent
– The courts below disbelieved the evidence of appellant on the
ground that there were no averments in the complaint that the
commodities were sold for cash and that the rice bags were sold on
credit and the cheques were issued for the goods sold on credit – It
was for the respondent to adduce evidence to prove that the cheques
were not supported by consideration and that there was no debt or
liability to be discharged by him – The receipts  relied upon by the
respondent did not create doubt about the purchases made on credit
and the existence of a legally enforceable debt for which the
cheques were issued – The courts below erred in saying that by the
receipts, the respondent has rebutted the statutory presumption raised
under s.139 – The oral and the documentary evidence adduced by
the appellant were sufficient to prove that it was a legally enforceable
debt and that the cheques were issued to discharge the legally
enforceable debt – The impugned judgment of the High Court is
not sustainable and is  set aside – Respondent is convicted under
s.138 in both the complaints.
Negotiable Instruments Act, 1881: ss.138, 139 – Presumption
in favour of holder – Held: Under s.138, once the cheque is issued
by the drawer, a presumption under s.139  in favour of the holder
would be attracted – s.139 creates a statutory presumption that a
cheque received in the nature referred to under s.138  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 circumstances
under which the cheque was issued in his favour and that the same
was issued in discharge of a legally enforceable debt – It is for the
accused to adduce evidence of such facts and circumstances to
rebut the presumption that such debt does not exist or that the
cheques are not supported by consideration – In the instant case,
by examining himself as PW-1, the complainant has discharged the
initial burden cast upon him that the cheques were issued for the
rice bags purchased on credit –  With the examination of PW-1, the
statutory presumption under s.139 of the Act arises that the cheques
were issued by 

Excerpt shown. Read the full judgment & AI analysis in Lexace.