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M/S S.S. Production & Anr. vs Tr. Pavithran Prasanth

Not available · 2024 INSC 1059Decided 1 Oct 2024
Not available
Justice Sudhanshu Dhulia · Justice Ahsanuddin Amanullah

Background

A film production company and its proprietor had borrowed roughly Rs. 41.28 lakh from the complainant in 2015 and issued five post-dated cheques (totalling about Rs. 42 lakh with interest) to repay it, all of which bounced due to insufficient funds. The trial court convicted the accused under Section 138 of the Negotiable Instruments Act, and this was upheld by the first appellate court and then the Madras High Court. The accused appealed, arguing the money was actually a joint film-production investment rather than a loan, and that the complainant hadn't proved he had the financial capacity to lend that sum.

Decision Breakdown

The Supreme Court held that once the cheques and the underlying debt were not denied by the accused, the statutory presumption under Section 139 of the Act (that a cheque is issued for a legally enforceable debt) applies, and the burden shifts to the accused to prove otherwise on a preponderance of probabilities: merely raising an alternative story about "joint film investment" without any supporting evidence does not meet that burden. The Court found the accused's defence was flatly contradicted by the complainant's witness and was never substantiated with any documents. It dismissed the appeals and upheld the conviction and sentence but, exercising judicial discretion, directed that the five separate sentences (for the five cheques from the same underlying transaction) run concurrently rather than one after another.

Lesson Learnt

In cheque-bounce cases, simply denying that money received was a "loan" and offering an alternative unsupported story is not enough to escape liability. Once the cheque and signature are admitted, the accused must actively prove, with real evidence, that no legally enforceable debt existed.

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

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