Ashok Singh v. State of Uttar Pradesh & Anr. Hon'ble Supreme Court of India emphasizes the statutory presumption in favor of the complainant under Sections 118 and 139 burden of proving a valid defence lies on the accused, particularly in cheque dishonor cases

The case "Ashok Singh v. State of Uttar Pradesh & Anr." is a criminal appeal before the Supreme Court of India concerning an alleged dishonored cheque under Section 138 of the Negotiable Instruments Act, 1881 in which Hon'ble Supreme Court of India  emphasizes the statutory presumption in favor of the complainant under Sections 118 and 139,  burden of proving a valid defence lies on the accused, particularly in cheque dishonor cases.

Key Details:

Facts of the case: Ashok Singh (appellant) lent Rs. 22,00,000 to Ravindra Pratap Singh (respondent), who issued a cheque for the same amount, which was dishonored with the endorsement "payment stopped by drawer." Despite a legal notice, the respondent did not return the money.

Lower Court Proceedings: The Trial Court found the respondent guilty under Section 138 of the Negotiable Instruments Act and sentenced him to one-year imprisonment, along with a fine of Rs. 35,00,000, and compensation of Rs. 30,00,000 to the appellant. This was upheld by the Appellate Court.

High Court's Judgment: The High Court acquitted the respondent, stating the complainant had failed to prove that the cheque was issued towards a lawful debt and noted inconsistencies in the complainant's version.

Court's Analysis & Conclusion:

Appeal by Ashok Singh: The appellant challenged the High Court’s decision, arguing that the concurrent findings of the lower courts were correct. The appellant’s claim was that the cheque was issued for a legally enforceable debt, and the burden of proof rested on the respondent.

Defence by Respondent: The respondent argued that there was no loan, and the cheque was lost. He also claimed that he informed the police about the lost cheque in 2011, which contradicted the timeline.

Supreme Court’s Ruling: The Court found the High Court's reasoning flawed, especially in its presumption that the complainant needed to prove his financial capacity at the outset. The Court concluded that the appellant had established his case and the acquittal by the High Court was incorrect. The conviction and sentence were reinstated, though the fine amount was reduced to Rs. 32,00,000, payable within four months. Failure to pay would result in the original sentence being reinstated.

 Cases Referred:

1. **Bir Singh v. Mukesh Kumar (2019) 4 SCC 197**  

   This case reiterated that the burden of proof in cases under Section 138 of the Negotiable Instruments Act lies on the accused once the complainant establishes a prima facie case. The accused must raise a plausible defence supported by evidence to rebut the presumption of the cheque being issued for a legally enforceable debt.

2. **Rajesh Jain v. Ajay Singh (2023) 10 SCC 148**  

   In this case, the Court highlighted the importance of establishing the legally enforceable debt in cheque dishonor cases. It reaffirmed that once the complainant proves that the cheque was issued for the discharge of a debt, the onus shifts to the accused to provide credible evidence to challenge the presumption under Sections 118 and 139.

3. **Kishan Rao v. Shankargouda (2018) 8 SCC 165**  

   This decision further reinforced the presumption in favor of the complainant in dishonor cases under Section 138. It emphasized that once the complainant establishes a prima facie case, the accused must provide evidence to raise a reasonable doubt regarding the debt.

4. **Uttam Ram v. Devinder Singh Hudan (2019) 10 SCC 287**  

   This case clarified that the accused must not only deny the debt but must also show the existence of a probable defence with appropriate evidence. The Court held that merely claiming the absence of debt without evidence is not sufficient to rebut the presumption.

5. **Aneeta Hada v. Godfather Travels and Tours Private Limited (2012) 5 SCC 661**  

   This case discussed the liability of a director of a company in cheque dishonor cases under Section 141 of the Negotiable Instruments Act. It held that if a company is involved, its director can only be held liable if he is in charge of the company's affairs and is responsible for the business transactions.

6. **John K John v. Tom Varghese (2007) 12 SCC 714**  

   This case clarified that in cheque dishonor cases, the signatory of the cheque can be held liable under Section 138, and if the cheque was issued on behalf of a company, the company should also be made a party to the proceedings.

7. **Krishna Janardhan Bhat v. Dattatraya G Hegde (2008) 4 SCC 54**  

   This case highlighted that the complainant does not have to establish the source of funds initially unless the accused raises the issue. If the accused challenges the complainant's capacity to pay, only then the complainant needs to provide evidence.

8. **G Pankajakshi Amma v. Mathai Mathew (Dead) through LRs. (2004) 12 SCC 83**  

   The decision underscored the importance of proving the capacity to pay in cheque dishonor cases. It was held that the presumption of a legally enforceable debt under Section 139 of the Negotiable Instruments Act applies unless the accused proves otherwise.

9. **Rohitbhai Jivanlal Patel v. State of Gujarat (2019) 18 SCC 106**  

   This case reiterated the importance of not summarily rejecting the complainant’s evidence, especially when the presumption of debt under Section 139 exists. The accused must show evidence to rebut this presumption effectively.

10. **S. S. Production v. Tr. Pavithran Prasanth (2024 INSC 1059)**  

    This case elaborated on the burden of proof in cheque dishonor cases. It emphasized that merely raising a probable defence is not sufficient unless it is backed by evidence. The Court ruled that doubts in the complainant's case should not be raised without a solid defence from the accused.

11. **Tedhi Singh v. Narayan Dass Mahant (2022) 6 SCC 735**  

    This decision reinforced that in cases under Section 138 of the Negotiable Instruments Act, the complainant does not have to establish his financial capacity unless the accused raises the issue. The Court confirmed that the complainant need only establish the cheque’s authenticity, and the accused must prove a valid defence.

These cases collectively reaffirm the importance of the statutory presumption in favour of the complainant in cheque dishonor cases and highlight the responsibility of the accused to provide substantial evidence to challenge the claim.

Ratio:

The case emphasizes the statutory presumption in favor of the complainant under Sections 118 and 139 of the Negotiable Instruments Act.

The burden of proving a valid defence lies on the accused, particularly in cheque dishonor cases.

The ruling clarified that the complainant is not initially required to prove the source of funds for the loan unless the accused provides sufficient evidence to counter the claim.