LexM/S. KUMAR EXPORTS versus M/S. SHARMA CARPETS
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[2008] 17 S.C.R. 572 A MIS. KUMAR EXPORTS v. r "' M/S. SHARMA CARPETS (Criminal Appeal No. 2045 of 2008) B DECEMBER 16, 2008 [R.V. RAVEENDRAN AND J.M. PANCHAL, JJ.] Negotiable Instruments Act, 1881: ,..t. ss. 118 and 139 - Special rules of evidence relating to c presumptions, when negotiable instrument is the subject matter - Presumptions under ss. 118 and 139 - Scope and ambit of - Explained and elucidated - Evidence Act, 1872 - ss.3,4 and 114. , s. 138 - Dishonour of cheque - Case of respondent D (complainant) that it sold carpets to appellant and in discharge of said liability, appellant issued cheques, which were dishonoured - Defence of appellant that it agreed to purchase + carpets from respondent and issued cheques by way of advance but respondent did not supply the carpets - Held: .E Bill produced by respondent did not bear signatures on behalf of appellant - On the contrary, from testimony of a sales ta)f official, it was evident that no transaction of sale of carpets took place between respondent and appellant- Consequently, there was no existing debt in discharge of which, appellant was F expected to issue cheques to respondent - Under the circumstances, defence of appellant that blank cheques were + obtained by respondent as advance payment also became probable and onus of burden shifted on respondent - Respondent did not produce any account books etc. to establish that carpets were sold by it to appellant - G Consequently, appellant entitled to acquittal as it discharged the onus of proving that the cheques were not received by the holder for discharge of a debt\ or liability. +- Code of Criminal Procedure, 1973 - s.386 - Trial ul s. 138 of NI Act - Acquittal of accused - Appeal - High Court. H 572 MIS. KUMAR EXPORTS v. MIS. SHARMA CARPETS 573 reversing the acquittal - Remitting the matter to trial court for A ,. ~ passing appropriate order of sentence - Propriety of - Held: Not proper - Judicial function of imposing appropriate sentence can be performed only by Appellate Court when it reverses the order of acquittal and not by any other court - It was the bounden duty of High Court to impose appropriate B sentence commensurate with the facts of the case - Negotiable Instruments Act, 1881 - s. 138. lo.. Appellant faced trial under s.138 of the Negotiable Instruments Act, 1881. It was the case of the respondent (complainant) that it had sold woollen carpets to the c accused-appellant and in discharge of the said liability, the appellant had issued two cheques, which were ultimately dishonoured. The defence of the appellant was that it had agreed to purchase woolen carpets from the respondent and had D issued the cheques by way of advance but the respondent did not supply the carpets. The trial court acquitted appellant holding that it was not proved by respondent that cheques were issued by appellant for discharge of a debt or liability. On appeal, E High Court held that if the defence put forth by appellant was true, it would have issued instructions to 'stop . payment of cheques' instead of allowing them to be presented and dishonoured and accordingly reversed the acquittal of appellant and thereafter remitted the matter F back to the trial court tp pass an appropriate order of ~ sentence. Hence the present appeal. Allowing the appeal, the Court HELD:1.1. In a suit to enforce a simple contract, the plaintiff has to aver in his pleading that it was made for G good consideration and must substantiate it by evidence. But to this rule, the negotiable instruments are an ·- r exception. In a significant departure from the general rule applicable to contracts, s.118 of the Negotiable Instruments Act, 1881 lays down some special rules of H 574 SUPREME COURT REPORTS e [2008] 17 S.C.R.- A evidence relating to presumptions. The reason for these presumptions is that, negotiable instrument passes from and to hand on endorsement and it would make trading very difficult and negotiability of the instrument impossible, unless certain presumptions are made. The B presumption, therefore, is a matter of principle to facilitate negotiability as well as trade. [Para 9] [581-G-H; 582-A-C] 1.2. S.118 of the Act inter alia directs-that it shall be presumed, until the contrary is proved, that every negotiable instrument was made or drawn for c consideration. S.139 of the Act stipulates that unless the contrary is proved, it shal
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