UTTAM RAM versus DEVINDER SINGH HUDAN & ANR.

Citation: [2019] 13 S.C.R. 425 · Decided: 17-10-2019 · Supreme Court of India · Bench: L. NAGESWARA RAO · Disposal: Appeal(s) allowed

Cited by 2 judgment(s) · cites 8 · see the full citation network in Lexace

Judgment (excerpt)

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UTTAM RAM
v.
DEVINDER SINGH HUDAN & ANR.
(Criminal Appeal No. 1545 of 2019)
OCTOBER 17, 2019
[L. NAGESWARA RAO AND HEMANT GUPTA, JJ.]
Negotiable Instruments Act, 1881 – s.138 & ss.118, 139 –
Respondent purchased apple crops of various growers which was
carried out through ropeway to the roadhead for further
transportation – Packing material was procured by the respondent
through his authorised agent on credit basis from the appellant –
Accounts finally settled between the appellant and the respondent’s
authorised agent and Rs.5,38,856/- was found recoverable – Cheque
issued – Dishonoured– Complaint filed by the appellant – Dismissed
– Upheld by the High Court – On appeal, held: Dishonour of cheque
carries a statutory presumption of consideration – Holder of cheque
in due course is required to prove that the cheque was issued by the
accused and that when the same presented, it was not honoured –
Since there is statutory presumption of consideration, the burden is
on the accused to rebut the presumption that the cheque was issued
not for any debt or other liability – In the present case, once the
agent of the respondent admitted the settlement of due amount, in
absence of any other evidence the Trial Court or the High Court
could not dismiss the complaint only on account of discrepancies in
the cartons, packing material or the rate to determine the total
liability, as if the appellant was proving his debt before the Civil
Court, when the written document crystalized the amount due –
Respondent failed to lead any evidence to rebut the statutory
presumption, a finding returned by both the Trial Court and the
High Court –Therefore, it is presumed that the cheques in question
were drawn for consideration and the appellant received the same
in discharge of an existing debt – Respondent guilty of dishonour
of cheque for an offence u/s.138 – Order passed by the High Court,
set aside – Respondent to pay Rs.10,77,712/- as fine i.e. twice of
the amount of cheque of Rs.5,38,856/- and litigation cost of
   [2019] 13 S.C.R. 425
425
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SUPREME COURT REPORTS
[2019] 13 S.C.R.
Rs.1,00,000/- within three months – In case of failure to pay the
same, the respondent to undergo imprisonment for six months – Code
of Criminal Procedure, 1973 – s.313.
Allowing the appeal, the Court
HELD: 1.1 The approach of the Trial Court and that of the
High Court is perverse; irrational as well as suffers from material
illegality and irregularity, which cannot be sustained in complaint
filed under Section 138 Negotiable Instruments Act, 1881. A
negotiable instrument including a cheque carries presumption of
consideration in terms of Section 118(a) and under Section 139
of the Act. The Trial Court and the High Court proceeded as if,
the appellant is to prove a debt before civil court wherein, the
plaintiff is required to prove his claim on the basis of evidence to
be laid in support of his claim for the recovery of the amount due.
A dishonour of cheque carries a statutory presumption of
consideration. The holder of cheque in due course is required to
prove that the cheque was issued by the accused and that when
the same presented, it was not honoured. Since there is a statutory
presumption of consideration, the burden is on the accused to
rebut the presumption that the cheque was issued not for any
debt or other liability. [Paras 18-20] [432-D, E-H; 433-A-B]
1.2 There is the mandate of presumption of consideration
in terms of the provisions of the Act. The onus shifts to the
accused on proof of issuance of cheque to rebut the presumption
that the cheque was issued not for discharge of any debt or liability
in terms of Section 138 of the Act. Once the agent of the
respondent has admitted the settlement of due amount and in
absence of any other evidence the Trial Court or the High Court
could not dismiss the complaint only on account of discrepancies
in the determination of the amount due or oral evidence in the
amount due when the written document crystalizes the amount
due for which the cheque was issued. [Paras 21, 27] [433-C;
439-B-C]
1.3 The accused has failed to lead any evidence to rebut
the statutory presumption, a finding returned by both the Trial
Court and the High Court. Both Courts not only erred in law but
also committed perversity when the due amount is said to be
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disputed only on account of discrepancy in the cartons, packing
material or the rate to determine the total liability as if the

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