Negotiable Instrument Act mandates that once the signature(s) of an accused on the cheque/negotiable instrument are established, then the ‘reverse onus’ clauses become operative: SC

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CRIMINAL APPEAL NO. 123 of 2021 [Arising out of Special Leave Petition (Crl.) No. 1876 of 2018], Decided On February 10, 2021



The appellants had to pay the respondent a certain sum and to that end, Appellant No.2 issued a cheque on behalf of Appellant No. 1 in favour of the respondent and also executed a Deed of Undertaking on the same day wherein Appellant No.2 personally undertook to pay the respondent. Thereafter, the said cheque was presented to the bank for collection but it was returned with an endorsement that there were insufficient funds in the account of appellants. In wake of the cheque being dishonoured, a notice was issued to the appellants to pay the amount within 15 days. The appellants in their reply denied their liability.

The respondent then lodged a private complaint under section 138 and 142 of the NIA read with Section 200 of the Code of Criminal Procedure, 1973 (in short ‘CrPC’) before the Judicial Magistrate, Tiruppur. The trial Court disbelieved the respondent’s claim and held that since the basic ingredients of an offence under Section 138 of the NIA were not satisfied, the complaint was liable to be dismissed.

Being, discontented with the order of the trial Court, the respondent preferred a criminal appeal before the High Court, wherein, the Court vide impugned judgment allowed the criminal appeal and convicted both the appellants under Section 138 of NIA.

The aggrieved appellants came before the Supreme Court by means of the present appeal which was dismissed by the impugned judgment of the Court.


Whether the High Court erred in reversing the findings of the trial Court in exercise of its powers under Section 378 of CrPC?


The Supreme Court with regard to the issue at hand observed that it was true that the High Court would ordinarily, not reverse an order of acquittal merely on formation of an opinion different than that of the trial Court. Further, the Court also observed that it is also trite in law that the High Court ought to have compelling reasons to interfere with an order of acquittal and no such interference would be warranted when there were to be two possible conclusions. However, the Court noted that, there were also numerous decisions of the Court, justifying the invocation of powers by the High Court under Section 378 CrPC, if the trial Court had, inter alia, committed a patent error of law or grave miscarriage of justice or it arrived at a perverse finding of fact.

Thereafter, the Court delved upon its powers under Article 136 of the Constitution and observed that the said power also does not encompass the re-appreciation of entirety of record merely on the premise that the High Court has convicted the appellants for the first time in exercise of its appellate jurisdiction.

At the end having considered the facts of the case at hand the Supreme Court held that it found on a plain reading of the judgment of the Trial Court that, the trial Court had completely overlooked the relevant provisions and failed to appreciate the statutory presumption drawn under Section 118 and Section 139 of NIA. The Statute mandates that once the signature(s) of an accused on the cheque/negotiable instrument are established, then the ‘reverse onus’ clauses become operative. In such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him, therefore, since the accused-appellant failed to discharge his obligation hence, Court held that it does not find any valid ground to interfere with the impugned judgment and consequently, the appeal was dismissed.


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