TEDHI SINGH versus NARAYAN DASS MAHANT

Citation: [2022] 4 S.C.R. 442 · Decided: 07-03-2022 · Supreme Court of India · Bench: K.M. JOSEPH · Disposal: Case Partly allowed

Cited by 2 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

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SUPREME COURT REPORTS
[2022] 4 S.C.R.
[2022] 4 S.C.R. 442
442
TEDHI SINGH
v.
NARAYAN DASS MAHANT
(Criminal Appeal No. 362 of 2022)
MARCH 07, 2022
[K. M. JOSEPH AND HRISHIKESH ROY, JJ.]
Negotiable Instrument Act, 1881: s.139 – Presumption in
favour of holder – Respondent filed complaint stating that appellant
was his friend and as he was in urgent need of money, he gave a
sum of Rs.7 lakhs – However, cheque given by the appellant was
dishonored – Conviction of appellant u/s.138 – Held: s.139 of the
N.I. Act provides that Court shall presume that the holder of a cheque
received the cheque of the nature referred to in s.138 for the
discharge, in whole or in part, of any debt or other liability –
However, it is open to the accused to establish that there is no
consideration received – It is in the context of this provision that
the theory of ‘probable defence’ has grown – The accused is not
expected to discharge an unduly high standard of proof – All that
the accused needs to establish is a probable defence which is a
matter to be decided on the facts of each case – U/s.138, the
complainant need not show in the first instance that he had the
financial capacity – At the time, when the complainant gives his
evidence, unless a case is set up in the reply notice to the statutory
notice sent that the complainant did not have the wherewithal, it
cannot be expected of the complainant to initially lead evidence to
show that he had the financial capacity – However, the accused
has a right to demonstrate that the complainant in a particular case
did not have the capacity which can be done by producing
independent materials, namely, by examining his witnesses and
producing documents – It can also be established by pointing to the
materials produced by the complainant himself and cross
examination of the witnesses of the complainant – In this case, in
reply notice appellant did not set up that the complainant did not
have the financial capacity to advance the loan – Moreover, no
reference was made by the appellant of the complaint of lost cheque
book or signed cheque leaf – No evidence was led to establish that
the appellant had informed the Bank about the loss of cheque book
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containing blank cheque – In totality of facts, appellant has not
been able to establish a case of interference with the finding of
courts below that the offence under s.138 was committed by the
appellant – Thus, conviction u/s.138 N.I Act upheld – However,
sentence of one year imprisonment substituted with fine.
Constitution of India: Art.136 – Power of Supreme Court to
interfere – Art.136 of the Constitution only confers a right to obtain
special leave in rare and extraordinary cases – While exercising
power under Art.136, the Court may not refuse to interfere in a
case where three Courts have gone completely wrong – It is not to
be understood as meaning that it is a clear case of even three Courts
in unison falling into palpable error and thereby causing
miscarriage of justice and yet this Court would not interfere.
Partly allowing the appeal, the Court
HELD: 1. It is true that this is a case under Section 138 of
the Negotiable Instruments Act. Section 139 of the N.I. Act
provides that Court shall presume that the holder of a cheque
received the cheque of the nature referred to in Section 138 for
the discharge, in whole or in part, of any debt or other liability.
This presumption, however, is expressly made subject to the
position being proved to the contrary. In other words, it is open
to the accused to establish that there is no consideration received.
It is in the context of this provision that the theory of ‘probable
defence’ has grown. In an earlier judgment, in fact, which has
also been adverted to in Basalingappa, this Court notes that
Section 139 of the N.I. Act is an example of reverse onus. It is
also true that this Court has found that the accused is not expected
to discharge an unduly high standard of proof. It is accordingly
that the principle has developed that all which the accused needs
to establish is a probable defence. As to whether a probable
defence has been established is a matter to be decided on the
facts of each case on the conspectus of evidence and circumstances
that exist. [Para 7][449-D-G]
2. The Trial Court and the First Appellate Court have noted
that in the case under Section 138 of the N. I. Act, the complainant
need not show in the first instance that he had the capacity. The
proceedin

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