K.N.BEENA versus MUNIYAPPAN AND ANR.

Citation: [2001] SUPP. 4 S.C.R. 374 · Decided: 18-10-2001 · Supreme Court of India · Bench: K.T. THOMAS · Disposal: Leave Granted & Disposed off
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Judgment (excerpt)

A 
B 
c 
K.N.BEENA 
v. 
MUNIY APPAN AND ANR. 
OCTOBER 18, 2001 
[K.T. THOMAS AND S.N. VARIAVA, JJ.] 
Negotiable Instruments Act,.1881 : 
· Section 118-Negotiable Instrument-Presumption as to-Of considera-
tion-Held: Unless the contrary is proved it has to be presumed that the 
Negotiable Instrument (including a cheque) is made or drawn for a considera-
tion. 
Section 139-Holder-Presumption in favour of-Held: Unless the con-
trary is proved, Court has to presume that the holder of the cheque received the 
D 
cheque for discharge, in whole or in part, of a debt or liability. 
Section 138-Dishonour of cheque-For insufficiency of funds-Cheque 
issued by accused dishonoured-Trial court convicted the accused-But High 
Court, in revision, acquitted the accused on the ground that the payee had not 
proved that the cheque was Issued for any debt or liability-Correctness of-
E 
Held: In complaints under S.138 Court has to presume that the cheque has been 
issued for a debt or liability~ This presumption is, however, rebutable-But the 
burden of proving that a cheque had not been issued for a debt or liability is 
on the accused. 
F 
G 
The appellant filed a complaint under Section 138 of the Negotiable 
Instruments Act, 1881 as the cheque issued by the 1st respondent in favour 
of the appellant was dishonoured. The trial court convicted the 1st. re-
spondent. The first appellate court affirmed the conviction. However, the 
High Court, iii· revision, set aside the conviction on the ground that the . 
appellant had noi proved that the cheqtie had been issued for any debt or 
liability. Hence this. appeal. 
Disposing of the appeal, the Court 
. 
. 
. 
. 
.HELD : l.1. Under Section US of the.Negotiable lnst~.:Oents Act,· 
1881, unless the contrary was proved, it is to be presumed that the Negoti- · 
H 
able Instrument (including a cheque) had been made or drawn for consid-
374 
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·~ 
K.N. BEENAv. MUNIYAPPAN [VARIAVA,J.] 
375 
eration. Under Section 139 the Court has to presume, unless the contrary 
was proved, that the holder of the cheque received the cheque for dis· 
charge, In whole or i!l part, of a debt or liability. Thus in complaints under 
Section'l38, Court has to presume that the ci.eque had been issued for a 
debt or liability. This presumption is rebutable. However, the burden of 
proving that a cheque had not been ismled for a debt or liability is on the 
accused. (376-F] 
· 
Hiten P. Dalal v. Bratindranath Banerjee,(2001] 6 SCC 16, relied on. 
1.~ The 1st respondent had to prove in the trial, by leading cogent 
evidence, that there was no debt or liability. The 1st respondent not having 
led any evidence could not be said to have discharged the burden cast on 
him. The 1st respondent not having discharged the burden of proving that 
the cheque was not issued for a debt or liability, the conviction as awarded 
by the Magistrate was correct. The High Court erroneously set aside that 
conviction. (377-A-B] 
CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. 1066 
of 2001. 
From the Judgment and Order dated 20.7 .2000 of the Madras High Court 
in Crl. R. No. 883 of 1995. 
. V. Prabhakar and M.K.D. Namboodiri for the Appellant. 
V.J. Francis, P.I. Jose, A. Radhakrishnan and Jenis Francis, for the Re-
SPondent No. 1. 
Ms. Shweta Garg and Revathy Raghavan for the Respondent No. 2. 
The Judgment of the Court was delivered by 
S. N. VARIAVA, J. Leave granted. 
Heard parties. 
Briefly stated the facts are as follows: 
A 
B 
c 
D 
E 
F 
G 
The Appellant filed a complaint under Section 138 of the Negotiable 
Instruments Act as the cheque dated 6th April, 1993 in a sum of Rs.63720, 
H 
376 
SUPREME COURT REPORTS 
[2001] SUPP. 4 S.C.R. 
A 
issued by the 1st Respondent in favour of the Appellant on Central Bank, had 
been dishonoured with the remarks "Insufficient Funds".· The Appellant had 
issued a legal notice dated 28th April, 1993. Receipt of the said notice is 
admitted. A reply dated 21st May, 1993 was.sent by the 1st Respondent. 
However no payment was made. 
B 
After trial the Judicial Magistrate-II, Kumbakonam, convicted the 1st 
Respondent under Section 138 and directed payment of a fine of Rs.65000. In 
default the 1st Respondent was to suffer simple imprisonment for one year. 
The 1st Respondent challenged the conviction and sentence by filing Criminal 
Appeal No. 32 of 1995. The same came to be dismissed by the Sessions Judge 
C 
on 28th August, 1995. 
The 1st Respondent then preferred Criminal Revision No. 883
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