HITEN P. DALAL versus BRATINDRANATH BANERJEE

Citation: [2001] 3 S.C.R. 900 · Decided: 11-07-2001 · Supreme Court of India · Bench: B.N. KIRPAL · Disposal: Dismissed

Cited by 4 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
HITEN P. DALAL 
v. 
BRA TINDRANA TH BANERJEE 
JULY 1i,2001 
[B.N. KIRPAL, RUMA PAL AND BRIJESH KUMAR, JJ.] 
Special Court (Trial of Offences relating to Transactions in Securities) 
Act, 1992-Section 3(2)-Special Court set up for trial of offences committed 
C between 1.4.1991 and 6.6.1992-Cheques issued between December 1991 
and March 1992-Dishonour of the cheques for insuffi~iency of funds-
Jurisdiction of Special Court for offences committed after the statutory 
period-Held, the stat11t01y period relates to transaction in securities and 
not to offences-Hence, Special Court has jurisdiction since the issuance of 
cheques is within the statuto1y period. 
D 
Negotiable Instruments Act, 1881-Sections 118, 138 and 139-
Presumption of liability-Dishonour of cheques issued by appellant-Denial 
of liability for payment by appellant-Held, burden of proof is on the accused 
to disapprove the presumption-Conviction upheld since the appellant failed 
E to discharge the burden-Evidence Act, 1872-Sections 3 and 114. 
Appellant issued four cheques in favour of a Bank relating to 
transactions in securities during the period between December 1991 to March 
1992 for a total amount of about Rs. 78.46 crores. The cheques were returned 
dishonoured for insufficiency of funds. The Bank served notices on the 
p appellant under Section 138 of the Negotiable Instruments Act, 1881. On 
failure to make the payment, the appellant was convicted under the Act by 
Special Court, which was set up under the Special Court (Trial of Offences 
relating to Transactions in Securities) Act, 1992 and sentenced to 
imprisonment for one year and a fine of Rs. 1 lakh. 
G 
In appeal to this Court, the appellant contended that the jurisdiction of 
the Special Court under Section 3(2) of the Special Court Act was limited to 
the offences committed between 1.4.1991 and 6.6.1992; that the Special Court 
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had no jurisdiction as the offence took place after 6.6.1992; and that the 
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cheques, which were issued to the Bank for certain intended security 
H transactions, never materialised and therefore the Bank should have returned • 
900 
. 
HITEN P. DALAL v. BRA TINDRANATH BANERJEE 
901 
the cheques to the appellant instead of encashing them as there was no liability A 
to be discharged by the appellant. 
+ 
The respondent, who filed a complaint on behalf of the Bank, contended 
that the statutory period stipulated under Section 3(2) of the Special Court 
Act relates to ·transactions in securities and not to offences, and that the 
cheques were issued by the appellant to discharge his liabilities to the Bank. B 
I 
Dismissing the appeal, the Court 
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HELD: 1. The Statement of Objects and Reasons of the Special Court 
(Trial of Offences relating to Transactions in Securities) Act, 1992 and the 
Preamble to the Act makes it clear that the purpose of the enactment was to c 
deal with those particular transactions relating to the period specified un~er 
SectiQn 3(2) of the Act. Under this Section, the statutory period occurs after 
the word transaction. From the language used under various sections of the 
Act, it is apparent that the period relates to the transaction in securities and 
the date of the offence is immaterial. In these circumstances, the ambit of the 
Special Courts jurisdiction, whether in criminal proceedings or in civil D 
disputes, is in respect of the transactions in securities entered into after 
1.4.1991 and on or before 6.6.1992. The transactions, i.e. the issuance of four 
~ 
cheques, is within the statutory period and therefore the Special Court had 
the Jurisdiction to entertain the complaint. [904-D-F; 905-B; 907-D) 
Harshad Shanti/al Mehta v. Custodian & Ors., [1998) 5 SCC 1, relied, E 
on. 
Minoo Mehta v. Sharak D. Mehta, [1998) 2 SCC 418, distinguished. 
2. Presumptions are rules of evidence and do not conflict with the 
).. 
presumption of innocence, because by the latter all that is meant is that the 
prosecution is obliged to prove the case against the accused beyond reasonable 
F 
doubt. The obligation on the prosecution may be discharged with the help of 
presumptions of law or fact unless the accused adduces evidence showing the 
reasonable possibility of the non-existence of the presumed fact. In other 
words, provided the facts required to form the basis of a presumption of law G 
exists, no discretion is left with the Court but to draw the statutory conclusion. 
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However, this does not preclude the person ag

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