KAMALA S. versus VIDYADHARAN M.J. AND ANR.

Citation: [2007] 2 S.C.R. 852 · Decided: 20-02-2007 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Appeal(s) allowed

Judgment (excerpt)

:A 
' ' 
KAMALA S. 
+ 
, __ 
v. 
VIDY ADHARAN M.J. AND ANR. 
FEBRUARY 20, 2007 
B 
(S.B. SINHA AND MARKANDEY KATJU, JJ.] 
' Negotiable Instruments Act, 1881-Sections 138, 139 and 142-
} 
Dishonour of cheque-Presumption in favour of holder of Negotiable 
c 
Instruments - Criminal complaint by holder of cheque that the drawer borrowed 
money and the cheque issued dishonoured-Drawer's case that cheque drawn 
not in discharge of any debt or liability-Trial court holding that the drawer's 
defence was probable and presumption raised stood discharged-Acquittal 
.~ 
of drawer-Set aside by High Court holding that the drawer failed to discharge 
the purden of proof-Correctness of-Held: Drawer's case not wholi'y an 
D improbable one-If it was probable, the findings of trial court could not be 
rejected without meeting the reasoning therefor-Interference by High Court 
-1 
not correct that too when two views were possible. 
' 
According to the appellant, S-wife of respondent, owned a property and 
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executed sale deeds in favour of Rand T as a security in lieu of some amount 
paid in favour of.S. When R and T demanded money back from S, she 
approached the appellant for purchase of the property for consideration of 
Rs.5 lakhs. T executed a sale deed in favour of appellant and appellant withdrew 
Rs.4 lakhs and paid to S which in turn was paid to T & R. Appellant further 
issued a cheque in favour of respondent and gave it to S as the property was 
short by few cents. Cheque was dishonoured for insufficient funds upon 
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presentation. Respondent issued a notice but the amount was not repaid. 
Respondent then filed complaint petition under section 138 of the Negotiable 
Instruments Act, 1881 alleging that the appellant had borrowed a sum of Rs. 
1 lakh from the respondent for purchasing a house. Appellant contended that 
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the cheque was drawn for payment of balance consideration for sale of a 
property in her favour by wife of respondent and not for discharge of any debt 
or security. Trial Court held that the defence of the appellant was a probable 
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one and the presumption raised under section 142 of the Act stood discharged 
whereas the complainant failed to discharge the onus and acquitted the 
appellant. Respondent filed appeal. High Court set aside the order holding 
H 
852 
/ 
KAMALA S. v. VIDY AD HARAN M.J. 
853 
that the appellant had not been able to discharge the burden of prooflaid down A 
under sections 138 and 139 of the Act and convicted the appellant. Hence the 
present appeal. 
Appellant-complainant contended that the trial court keeping in view 
the entire materials on records had arrived at an opinion that the burden had 
fully been discharged by the appellant and, thus, could not have set aside the B 
said finding as the said defence was a probable one. 
Respondent contended that in view of the agreement between the parties, 
a cheque was drawn by the appellant within a period of 5 months from the 
date of agreement, a presumption in terms of section 139 was correctly rai~ed C 
by the High Court; and that even if the defence raised by the appellant was 
true, she has failed to offer any explanation as to why the cheque had to be 
issued. 
Allowing the appeal, the Court 
HELD: 1.1. The Negotiable Instruments Act, 1881 contains provisions 
raising presumption as regards the negotiable instruments under Section 
l 18(a) of the Act as also under Section 139 thereof. The said presumptions 
are rebuttable ones. Whether presumption stood rebutted or not would depend 
upon the facts and circumstances of each case. [Para 15) (585-G-H) 
MS. Narayana Menon Alias Mani v. State of Kera/a and Anr., (2006) 6 
sec 39, relied on. 
1.2. The standard of proof in discharge of the burden in terms of Section 
D 
E 
139 of the Act being of preponderance of a probability, the inference therefor F 
can be drawn not only from the materials brought on record but also from the 
reference to the circumstances upon which the accused relies upon. 
(Para 17) [859-C-D) 
2.1. According to the appellant, two Sale Deeds were executed showing 
considerations therefor as Rs. 80,000/- and Rs. 20,000/- only at the instance G 
of the appellant although the agreed consideration therefor was Rs. 5 lakhs. 
A finding of fact was arrived at that the cheque was not signed 5 months after 
the execution of the agreement as contained in the exhibit but on the same 
day. This finding was arrived at on comparison of the colour of the ink and 
'lette

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