Summary
The Supreme Court reversed acquittals in two cheque dishonour prosecutions. Admission of issuance and signature attracted the statutory presumption of a legally enforceable debt. The accused did not rebut it: the security-cheque explanation was inconsistent with replacement cheques issued after earlier dishonours, and payment of the outstanding liability was not proved. The Court distinguished cases in which a probable defence specifically puts the complainant’s financial capacity in issue.
Issues
- Whether admitted execution of the cheques attracted the presumption of enforceable liability and whether the accused rebutted it.
- Whether the complainant had to establish financial capacity without a probable defence questioning it.
Held
- Once issuance and signature are admitted, Section 139 raises a rebuttable presumption that the cheque discharges a legally enforceable debt or liability. The accused may rebut it through a probable defence; the lower courts erred in placing the initial burden on the complainant without applying the presumption. (¶¶ 5.2, 6.1, 6.2, 6.3, 7)
- The admitted transactions, replacement cheques following earlier dishonours, and absence of evidence of full payment defeated the bare security-cheque defence on these facts. (¶¶ 5.1, 5.2, 7)
- Where a probable defence challenges financial capacity to advance a cash loan, the complainant may have to establish that capacity. That principle did not assist these accused, who had not questioned capacity in the present transactions. (¶ 6.4)
Result
Both appeals allowed and all accused convicted under Section 138. In each appeal, accused 2–4 sentenced to three months’ simple imprisonment and a fine of Rs 10,000 each, with one month’s simple imprisonment in default. All respondents directed to pay compensation within eight weeks: Rs 19,11,148 in Criminal Appeal 271 of 2020 and Rs 8,00,000 in Criminal Appeal 272 of 2020.