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APS Forex Services Pvt. Ltd. v. Shakti International Fashion Linkers & Ors.

Criminal Appeal · 2020 INSC 195Decided 14 Feb 2020
Criminal Appeal No. 271 of 2020
Justice Ashok Bhushan · Justice M.R. Shah

Background

APS Forex had issued foreign exchange travel cards to the respondents, who paid part of the dues but left a balance. The respondents issued a cheque for the outstanding amount, which was dishonoured on "STOP PAYMENT" instructions. The complainant's cheque-bounce case under Section 138 of the Negotiable Instruments Act was dismissed by the Trial Court, and that acquittal was upheld by the Sessions Court and the Delhi High Court, prompting the complainant's appeal to the Supreme Court (two connected appeals, differing only in the cheque amounts involved).

Decision Breakdown

The Supreme Court held that both the Trial Court and the High Court had wrongly ignored the statutory presumption under Section 139 of the Act, once an accused admits signing a cheque, the law presumes it was issued for a legally enforceable debt, and the burden shifts to the accused to rebut this by leading evidence. Here, the accused had admitted the signature and that some amount remained due, but led no evidence to prove the debt was paid; their bare claim that the cheque was given "by way of security" was not supported by proof. The Court therefore set aside the acquittals, convicted the accused under Section 138, and sentenced them to three months' simple imprisonment along with compensation to the complainant.

Lesson Learnt

In cheque-bounce cases, simply admitting you signed the cheque is enough to trigger a legal presumption of debt against you: a vague defence (like calling it a "security cheque") without actual evidence of repayment will not be enough to escape conviction.

Official source (sci.gov.in)View Judgment (PDF)

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