Cheque Bounce: Accused Need Not Enter Witness Box to Rebut Section 139 Presumption: Supreme Court

The appellant's business was run by his attorney, to whom he had allegedly given four blank cheques. After disputes, he cancelled the power of attorney and published a notice in October 1996; the complainant, the attorney's brother-in-law, attended the panchayat meeting on the dispute (paras 1-3). The complainant alleged a cash loan of Rs. 1.5 lakh in June 1998 repaid by a cheque that bounced; the appellant replied that the complainant was colluding with the attorney (paras 5-6). The trial court convicted him, the Sessions Court dismissed his appeal, and the High Court reduced the sentence to one week (paras 7-8). The courts accepted the complaint mainly because he did not step into the witness box (para 15).

Section 138 needs a legally enforceable debt, a cheque drawn to discharge it, and dishonour (para 20). Section 139 raises a presumption only that the cheque was issued for discharge of a debt or liability; "Existence of legally recoverable debt is not a matter of presumption under Section 139 of the Act" (para 21). The courts below erred in holding that the accused had to step into the witness box to discharge his burden; he may rely on the materials already on record, and "An accused has a constitutional right to maintain silence" (paras 22-23). The defence need only be proved on a preponderance of probabilities, which may be inferred from the circumstances (para 25). The complainant could not show the source of the money and produced no document or witness; loans over Rs. 20,000 had to be taken by account payee cheque under Section 269SS of the Income Tax Act (paras 18-19, 29). The story that the appellant volunteered a cheque he could not honour was difficult to believe (para 29). Courts must balance the presumption of innocence, a human right, against the reverse burden, so that the presumption does not lead to mistaken conviction (paras 33-34).