K.S. Ranganatha v. Vittal Setty
Background
The respondent had lent the appellant a sum of money, for which the appellant issued a post-dated cheque that later bounced for insufficient funds. The appellant's defence was that the cheque and some blank signed papers had been forcibly taken from him by the respondent during a violent confrontation, and that he had separately filed a criminal complaint against the respondent over that incident. The trial court accepted this defence and acquitted the appellant, but the Karnataka High Court reversed the acquittal and convicted him, ordering him to pay compensation.
Decision Breakdown
The Supreme Court held that once the appellant admitted his signature on the cheque, a statutory presumption arose that it was issued for a legally recoverable debt, and the burden shifted to him to rebut this presumption on a preponderance of probabilities. Crucially, the appellant's own separate criminal complaint alleging that the respondent had used force to obtain the cheque had already been tried and had ended in the respondent's acquittal, meaning that specific allegation had already failed on its own facts. The Court held this undermined the appellant's defence in the cheque case too, and upheld the High Court's conviction, dismissing the appeal.
Lesson Learnt
Once a person admits signing a cheque, the law presumes it was given to repay a genuine debt, and only strong, credible evidence, not an unproven allegation of coercion that has already failed in a separate case, can overturn that presumption.