M/S. KALAMANI TEX & ANR versus P. BALASUBRAMANIAN

Citation: [2021] 1 S.C.R. 668 · Decided: 10-02-2021 · Supreme Court of India · Bench: N.V. RAMANA · Disposal: Dismissed

Cited by 2 judgment(s) · cites 10 · see the full citation network in Lexace

Judgment (excerpt)

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SUPREME COURT REPORTS
[2021] 1 S.C.R.
   [2021] 1 S.C.R. 668
668
M/S. KALAMANI TEX & ANR
v.
P. BALASUBRAMANIAN
(Criminal Appeal No. 123 of 2021)
FEBRUARY 10, 2021
[N.V. RAMANA, SURYA KANT AND
ANIRUDDHA BOSE, JJ.]
Negotiable Instruments Act, 1881: ss. 118 and 139 –
Presumption as to negotiable instruments – Presumption in favour
of holder – Held: Once the signature of an accused on the cheque/
negotiable instrument are established, then the ‘reverse onus’ clauses
become operative – In such a situation, the obligation shifts upon
the accused to discharge the presumption imposed upon him –
Presumptions raised u/ss. 118, 139 are rebuttable in nature – A
probable defence needs to be raised, which must meet the standard
of “preponderance of probability”, and not mere possibility – On
facts, trial court overlooked the provisions and failed to appreciate
the statutory presumption drawn u/ss. 118 and 139, and dismissed
the complaint u/s. 138 of the NI Act – Once the appellant-accused
admitted his signatures on the cheque and the Deed, the trial court
ought to have presumed that the cheque was issued as consideration
for a legally enforceable debt – Trial court erred in calling upon
the complainant to explain the circumstances under which the
appellants were liable to pay – Since it is admitted that there has
been business relationship between the parties, the defence raised
by the appellants does not meet the standard of ‘preponderance of
probability’ – Thus, the High Court right in discarding the appellants’
defence and upholding the onus imposed upon them in terms of ss.
118 and 139 – High Court justified in setting aside the findings of
the trial court in exercise of its power u/s. 378 CrPC.
Compensation: Claim of, in cases pertaining to dishonor of
cheque – On facts, the respondent neither sought for compensation
before the High Court nor did he challenged the High Court’s
judgment – Held: Since the respondent has accepted the High
Court’s verdict, his claim for compensation stands impliedly
overturned.
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Sentence/sentencing: Reduction/modification of sentence –
Commission of offence u/s. 138 of the NI Act – In appeal before the
Supreme Court, appellants-accused deposited the cheque amount
with the Registry of this Court – In view of dismissal of appeal,
appellant No.2 liable to undergo the sentence of simple imprisonment
as awarded by the High Court – However, since the appellant no 2
volunteered and thereafter deposited the cheque amount with the
Registry of this Court, a lenient view is taken – Appellant No.2 not
required to undergo the awarded sentence – Negotiable Instruments
Act, 1881.
Dismissing the appeal, the Court
HELD: 1.1 The trial court completely overlooked the
provisions and failed to appreciate the statutory presumption
drawn under Section 118 and Section 139 of Negotiable
Instruments Act, 1881. The Statute mandates that once the
signature(s) of an accused on the cheque/negotiable instrument
are established, then these ‘reverse onus’ clauses become
operative. In such a situation, the obligation shifts upon the
accused to discharge the presumption imposed upon him.
[Para 14][676-B-D]
Rohitbhai Jivanlal Patel v. State of Gujarat (2019) 18
SCC 106– Referred to
1.2 Once the 2nd Appellant had admitted his signatures on
the cheque and the Deed, the trial court ought to have presumed
that the cheque was issued as consideration for a legally
enforceable debt. The trial court fell in error when it called upon
the complainant-respondent to explain the circumstances under
which the appellants were liable to pay. Such approach of the trial
court was directly in the teeth of the established legal position
and amounts to a patent error of law. [Para 15][676-F-H]
1.3 The presumptions raised under Section 118 and Section
139 are rebuttable in nature. A probable defence needs to
be raised, which must meet the standard of “preponderance
of probability”, and not mere possibility. A bare denial of
passing of consideration would not aid the case of the accused.
[Para 16][677-A-B]
M/S. KALAMANI TEX & ANR v. P. BALASUBRAMANIAN
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SUPREME COURT REPORTS
[2021] 1 S.C.R.
1.4 The appellants have banked upon the evidence of DW-
1 to dispute the existence of any recoverable debt. However, his
deposition merely highlights that the respondent had an over
extended credit facility with the bank and his failure to update
his account led to debt recovery proceedings. Such evidence does
n

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