JUDGMENT : Rakesh Kainthla, J. The present appeal is directed against the judgment dated 03.03.2008 passed by learned Sessions Judge, Shimla, District Shimla, H.P. (learned Appellate Court), vide which the appeal filed by the respondents No. 2 and 3 (accused before learned Trial Court) was allowed and the judgment of conviction dated 19.11.2007 and order of sentence dated 21.11.2007 passed by learned Judicial Magistrate First Class, Court No.2 (learned Trial Court) were set aside. (Parties shall hereinafter be referred to in the same manner as they were arrayed before the learned Trial Court for convenience.) 2. Briefly stated, the facts giving rise to the present appeal are that the complainant filed a complaint before the learned Trial Court for the commission of an offence punishable under Section 138 of the Negotiable Instruments Act (hereinafter referred to as ‘NI’ Act). It was asserted that the accused No. 1 issued a cheque bearing No.725301 dated 30.11.1999 in favour of the complainant for consideration received from him on his behalf and on behalf of accused No.2 for a sum of Rs.50,000/- drawn on Indian Overseas Bank, Shimla. The complainant presented the cheque to his bank, but it was returned with an endorsement ‘insufficient funds’. The complainant served a legal notice upon the accused demanding the payment of money within 15 days of the receipt of the notice. The notice was served upon the accused on 07.03.2000. However, he failed to repay the amount. Hence, a complaint was filed before the learned Trial Court for taking action against the accused as per the law. 3. Learned Trial Court found sufficient reasons to summon the accused. When the accused appeared, a notice of accusation was put to him for the commission of an offence punishable under Section 138 of the NI Act, to which he pleaded not guilty and claimed to be tried. 4. The complainant examined himself (CW1), Ominder Mahajan (CW2) and Daya Nand (CW3) to prove his complaint. 5. The accused, in his statement recorded under Section 313 of the Cr.PC denied the complainant’s case in its entirety. He stated that the cheque was handed over to the complainant as security. He and the complainant had a joint business in finance. The accused examined himself (DW1), Shiv Kumar (DW2), Nanak Ram Jandan (DW3), Mast Ram (DW4), and Sachidanand (DW5) to prove his innocence. 6. He stated that the cheque was handed over to the complainant as security. He and the complainant had a joint business in finance. The accused examined himself (DW1), Shiv Kumar (DW2), Nanak Ram Jandan (DW3), Mast Ram (DW4), and Sachidanand (DW5) to prove his innocence. 6. Learned Trial Court held that the accused admitted the issuance of the cheque. He stated that he was running a chit fund scheme with the complainant and had issued the cheques as security. He also examined the witnesses to prove this fact. However, he had sent a notice (Ext.A-1) through his counsel admitting the receipt of various amounts. He asserted that he had repaid the money to the complainant. However, there was no proof of this fact. The evidence of the accused was not sufficient to rebut the presumption contained in the Negotiable Instruments Act; therefore, the accused was convicted of the commission of an offence punishable under Section 138 of the NI Act and was sentenced to undergo rigorous imprisonment for three months and pay compensation of Rs. 70,000/- to the complainant. 7. Being aggrieved by the judgment and order passed by the learned Trial Court, the accused filed an appeal, which was decided by the learned Sessions Judge, Shimla (learned Appellate Court). Learned Appellate Court held that the cheque was issued in the name of M/s Aakash Boot House. There was no averment in the complaint that the accused No.1 was in charge and responsible for M/s Aakash Boot House for its business. Therefore, the requirement laid down under Section 141 of the NI Act was not proved. Further, there was insufficient evidence on record to show that accused No.2 was a partner of the firm. He could not have been liable because he had signed the cheque. The complainant did not prove the Sales Tax return or Income Tax return of M/s Boot House to show the relationship between Aakash Sood and Aakash Boot House. It was suggested to the accused in his cross-examination that the cheque was issued as security, which suggestion was admitted. This suggestion supported the defence taken by the accused that the cheque was issued as security and not towards the discharge of the legal liability. The cheque was issued by Aakash Sood on behalf of his father and not in his individual capacity. The learned Trial Court erred in convicting and sentencing the accused. This suggestion supported the defence taken by the accused that the cheque was issued as security and not towards the discharge of the legal liability. The cheque was issued by Aakash Sood on behalf of his father and not in his individual capacity. The learned Trial Court erred in convicting and sentencing the accused. Therefore, the appeal filed by the accused was allowed, and he was acquitted of the commission of an offence punishable under Section 138 of the NI Act. 8. Being aggrieved by the judgment passed by the learned Appellate Court, the complainant has filed the present appeal, asserting that the learned Appellate Court erred in acquitting the accused. It was not disputed that the cheque was signed by Aakash Sood in the capacity of a partner of the firm. It was not for the complainant to prove that the accused, Aakash Sood, was a partner of the firm, but for the accused to disprove the fact. The defence taken by the accused that he had a business transaction with the complainant and that he had returned the amount was not proved. Aakash Sood was made a party in his individual capacity, and he could not have been acquitted because the cheque was issued on behalf of Aakash Boot House. Reliance was placed upon the suggestion made to the accused, but a suggestion made to the accused is no evidence, and the learned Appellate Court erred in relying upon the suggestion. Therefore, it was prayed that the present appeal be allowed and the judgment passed by the learned Appellate Court be set aside. 9. I have heard Mr N.S. Chandel, learned Senior Counsel assisted by Ms Shwetima Dogra, learned counsel for the appellant/complainant, Mr Ajit Sharma, learned Deputy Advocate General, for the respondent No.1/State and Mr Deepak Gupta, learned Counsel for respondent No.2 and 3/accused. 10. Mr N.S. Chandel, learned Senior Counsel for the appellant/complainant, submitted that the accused admitted his signature on the cheque; therefore, a presumption would arise that the cheque was issued for consideration to discharge the debt/liability. The burden would shift upon the accused to rebut this presumption. The plea taken by him that he had some transaction with the complainant and he had issued the cheque as security was contrary to the notice sent by him to the complainant through his advocate, in which he had acknowledged the liability towards the complainant. The burden would shift upon the accused to rebut this presumption. The plea taken by him that he had some transaction with the complainant and he had issued the cheque as security was contrary to the notice sent by him to the complainant through his advocate, in which he had acknowledged the liability towards the complainant. Learned Appellate Court misinterpreted the contents of the notice. The firm was impleaded as a party. The accused Akash Sood was also impleaded in his individual capacity. He had signed the cheque, and he was liable being a signatory to the cheque. Learned Appellate Court did not appreciate these aspects. Hence, he prayed that the present appeal be allowed and the judgment passed by the learned Appellate Court be set aside, while the judgment of the learned Trial Court be restored. He relied upon the judgment of the Hon’ble Supreme Court in Tedhi Singh vs. Narayan Dass Mahant (2022) 6 SCC in support of his submission. 11. Mr Ajit Sharma, learned Deputy Advocate General for respondent No.1/State, submitted that the State has no submission to make in the present case since the dispute is between the accused and the complainant, which does not concern the State. 12. Mr Deepak Gupta, learned counsel for respondents No.2 and 3/accused, submitted that the learned Appellate Court had taken a reasonable view while acquitting the accused, and this Court should not interfere with the reasonable view of the learned Appellate Court. The learned Appellate Court had rightly held that the accused Akash Sood could not be held liable merely by virtue of his signature put on the cheque, and the existence of legally enforceable debts/liability was required to be proved by the complainant. The plea taken by the accused that he was running a Chit fund scheme with the complainant was highly probable. Therefore, he prayed that the present appeal be dismissed. He relied upon the judgments titled Ramrajsingh Vs. State of M.P. and another 2009(3) ICC , M/s Kamal General Store Vs. Kishori Lal Vij , Latest HLJ 2008 HP 1474, N.K. Wahi Vs. Shekhar Singh and others , AIR 2007 SC 1454 , Kuldeep Thakur Vs. M/s Mohar Mahesh Construction Pvt. Ltd. , Latest HLJ 2012 HP 423, S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla , (2005) 8 SCC 89 , Paresh P. Rajda Vs. Kishori Lal Vij , Latest HLJ 2008 HP 1474, N.K. Wahi Vs. Shekhar Singh and others , AIR 2007 SC 1454 , Kuldeep Thakur Vs. M/s Mohar Mahesh Construction Pvt. Ltd. , Latest HLJ 2012 HP 423, S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla , (2005) 8 SCC 89 , Paresh P. Rajda Vs. State of Maharashtra and another , (2008) 7 SCC 442 , DCM Financial Services Ltd. Vs. J.N. Sareen and another (2008) 8 SCC 1 , Krishna Janardhan Vs. Dattatraya G. Hegde (2008) 4 SCC 54 , K. Prakashan Vs. P.K. Surenderan (2008) 1 SCC 258 , Alakapuri Cooperating Housing Society Ltd. Vs. Jayantibhai Naginbhai (2009) 3 SCC 467 and M/s Kumar Exports Vs. M/s Sharma Carpets AIR 2009 SC 1518 in support of his submission. 13. I have given considerable thought to the submissions made at the bar and have gone through the records carefully. 14. The present appeal has been filed against a judgment of acquittal. It was laid down by the Hon’ble Supreme Court in Surendra Singh v. State of Uttarakhand , 2025 SCC OnLine SC 176: (2025) 5 SCC 433 that the Court can interfere with a judgment of acquittal if it is patently perverse, is based on misreading/omission to consider the material evidence and reached a conclusion which no reasonable person could have reached. It was observed at page 440: “23. Recently, in the case of Babu Sahebagouda Rudragoudar v. State of Karnataka 2024 SCC OnLine SC 4035, a Bench of this Court to which one of us was a Member (B.R. Gavai, J.) had an occasion to consider the legal position with regard to the scope of interference in an appeal against acquittal. It was observed thus: “38. First of all, we would like to reiterate the principles laid down by this Court governing the scope of interference by the High Court in an appeal filed by the State for challenging the acquittal of the accused recorded by the trial court. 39. This Court in Rajesh Prasad v. State of Bihar [Rajesh Prasad v. State of Bihar, (2022) 3 SCC 471 : (2022) 2 SCC (Cri) 31] encapsulated the legal position covering the field after considering various earlier judgments and held as below: (SCC pp. 482-83, para 29) “29. 39. This Court in Rajesh Prasad v. State of Bihar [Rajesh Prasad v. State of Bihar, (2022) 3 SCC 471 : (2022) 2 SCC (Cri) 31] encapsulated the legal position covering the field after considering various earlier judgments and held as below: (SCC pp. 482-83, para 29) “29. After referring to a catena of judgments, this Court culled out the following general principles regarding the powers of the appellate court while dealing with an appeal against an order of acquittal in the following words: (Chandrappa case [Chandrappa v. State of Karnataka, (2007) 4 SCC 415 : (2007) 2 SCC (Cri) 325], SCC p. 432, para 42) ‘42. From the above decisions, in our considered view, the following general principles regarding the powers of the appellate court while dealing with an appeal against an order of acquittal emerge: (1) An appellate court has full power to review, reappreciate and reconsider the evidence upon which the order of acquittal is founded. (2) The Criminal Procedure Code, 1973, puts no limitation, restriction or condition on the exercise of such power and an appellate court, on the evidence before it, may reach its own conclusion, both on questions of fact and law. (3) Various expressions, such as “substantial and compelling reasons”, “good and sufficient grounds”, “very strong circumstances”, “distorted conclusions”, “glaring mistakes”, etc., are not intended to curtail the extensive powers of an appellate court in an appeal against acquittal. Such phraseologies are more in the nature of “flourishes of language” to emphasise the reluctance of an appellate court to interfere with an acquittal than to curtail the power of the court to review the evidence and to come to its own conclusion. (4) An appellate court, however, must bear in mind that in the case of acquittal, there is a double presumption in favour of the accused. Firstly, the presumption of innocence is available to him under the fundamental principle of criminal jurisprudence that every person shall be presumed to be innocent unless he is proved guilty by a competent court of law. Secondly, the accused, having secured his acquittal, the presumption of his innocence is further reinforced, reaffirmed and strengthened by the trial court. (5) If two reasonable conclusions are possible on the basis of the evidence on record, the appellate court should not disturb the finding of acquittal recorded by the trial court.” 40. Secondly, the accused, having secured his acquittal, the presumption of his innocence is further reinforced, reaffirmed and strengthened by the trial court. (5) If two reasonable conclusions are possible on the basis of the evidence on record, the appellate court should not disturb the finding of acquittal recorded by the trial court.” 40. Further, in H.D. Sundara v. State of Karnataka [H.D. Sundara v. State of Karnataka, (2023) 9 SCC 581 : (2023) 3 SCC (Cri) 748], this Court summarised the principles governing the exercise of appellate jurisdiction while dealing with an appeal against acquittal under Section 378CrPC as follows: (SCC p. 584, para 8) 8. … 8.1. The acquittal of the accused further strengthens the presumption of innocence. 8.2. The appellate court, while hearing an appeal against acquittal, is entitled to reappreciate the oral and documentary evidence. 8.3. The appellate court, while deciding an appeal against acquittal, after reappreciating the evidence, is required to consider whether the view taken by the trial court is a possible view which could have been taken on the basis of the evidence on record. 8.4. If the view taken is a possible view, the appellate court cannot overturn the order of acquittal on the ground that another view was also possible; and 8.5. The appellate court can interfere with the order of acquittal only if it comes to a finding that the only conclusion which can be recorded on the basis of the evidence on record was that the guilt of the accused was proved beyond a reasonable doubt and no other conclusion was possible.” 41. Thus, it is beyond the pale of doubt that the scope of interference by an appellate court for reversing the judgment of acquittal recorded by the trial court in favour of the accused has to be exercised within the four corners of the following principles: 41.1. That the judgment of acquittal suffers from patent perversity. 41.2. That the same is based on a misreading/omission to consider material evidence on record; and 41.3. That no two reasonable views are possible and only the view consistent with the guilt of the accused is possible from the evidence available on record.” 24. That the judgment of acquittal suffers from patent perversity. 41.2. That the same is based on a misreading/omission to consider material evidence on record; and 41.3. That no two reasonable views are possible and only the view consistent with the guilt of the accused is possible from the evidence available on record.” 24. It could thus be seen that it is a settled legal position that the interference with the finding of acquittal recorded by the learned trial judge would be warranted by the High Court only if the judgment of acquittal suffers from patent perversity; that the same is based on a misreading/omission to consider material evidence on record; and that no two reasonable views are possible and only the view consistent with the guilt of the accused is possible from the evidence available on record.” 15. The present appeal has to be decided as per the parameters laid down by the Hon’ble Supreme Court. 16. Accused Aakash Sood (DW-1) admitted in his cross- examination that the cheque (Ext.CW1/A) was signed by him as a partner, and he had put the seal himself. Learned Trial Court had rightly held that the admission of the signatures and issuance of the cheque would trigger a presumption under Section 118 (a) and Section 139 of the NI Act that the cheque was issued for consideration to discharge the debt/liability. It was laid down by the Hon'ble Supreme Court in APS Forex Services (P) Ltd. v. Shakti International Fashion Linkers (2020) 12 SCC 724 , that when the issuance of a cheque and signature on the cheque are not disputed, a presumption would arise that the cheque was issued in discharge of the legal liability. It was observed: - “7.2. What is emerging from the material on record is that the issuance of a cheque by the accused and the signature of the accused on the said cheque are not disputed by the accused. The accused has also not disputed that there were transactions between the parties. Even as per the statement of the accused, which was recorded at the time of the framing of the charge, he has admitted that some amount was due and payable. However, it was the case on behalf of the accused that the cheque was given by way of security, and the same has been misused by the complainant. Even as per the statement of the accused, which was recorded at the time of the framing of the charge, he has admitted that some amount was due and payable. However, it was the case on behalf of the accused that the cheque was given by way of security, and the same has been misused by the complainant. However, nothing is on record that in the reply to the statutory notice, it was the case on behalf of the accused that the cheque was given by way of security. Be that as it may, however, it is required to be noted that earlier the accused issued cheques which came to be dishonoured on the ground of “insufficient funds” and thereafter a fresh consolidated cheque of Rs.9,55,574 was given which has been returned unpaid on the ground of “STOP PAYMENT”. Therefore, the cheque in question was issued for the second time. Therefore, once the accused has admitted the issuance of a cheque which bears his signature, there is a presumption that there exists a legally enforceable debt or liability under Section 139 of the NI Act. However, such a presumption is rebuttable in nature, and the accused is required to lead evidence to rebut such a presumption. The accused was required to lead evidence that the entire amount due and payable to the complainant was paid. 9. Coming back to the facts in the present case and considering the fact that the accused has admitted the issuance of the cheques and his signature on the cheque and that the cheque in question was issued for the second time after the earlier cheques were dishonoured and that even according to the accused some amount was due and payable, there is a presumption under Section 139 of the NI Act that there exists a legally enforceable debt or liability. Of course, such a presumption is rebuttable. However, to rebut the presumption, the accused was required to lead evidence that the full amount due and payable to the complainant had been paid. In the present case, no such evidence has been led by the accused. The story put forward by the accused that the cheques were given by way of security is not believable in the absence of further evidence to rebut the presumption, and more particularly, the cheque in question was issued for the second time after the earlier cheques were dishonoured. The story put forward by the accused that the cheques were given by way of security is not believable in the absence of further evidence to rebut the presumption, and more particularly, the cheque in question was issued for the second time after the earlier cheques were dishonoured. Therefore, both the courts below have materially erred in not properly appreciating and considering the presumption in favour of the complainant that there exists a legally enforceable debt or liability as per of the NI Act. It appears that both the learned trial court as well as the High Court have committed an error in shifting the burden upon the complainant to prove the debt or liability, without appreciating the presumption under of the NI Act. As observed above, of the Act is an example of reverse onus clause and therefore, once the issuance of the cheque has been admitted and even the signature on the cheque has been admitted, there is always a presumption in favour of the complainant that there exists legally enforceable debt or liability and thereafter, it is for the accused to rebut such presumption by leading evidence.” 17. A similar view was taken in Sanjay Sanjabij Tari v. Kishore S. Borcar , 2025 SCC OnLine SC 2069, wherein it was observed: “ONCE EXECUTION OF A CHEQUE IS ADMITTED, PRESUMPTIONS UNDER SECTIONS 118 AND 139 OF THE NI ACT ARISE 15. In the present case, the cheque in question has admittedly been signed by the Respondent No. 1- Accused. This Court is of the view that once the execution of the cheque is admitted, the presumption under Section 118 of the NI Act that the cheque in question was drawn for consideration and the presumption under Section 139 of the NI Act that the holder of the cheque received the said cheque in discharge of a legally enforceable debt or liability arises against the accused. It is pertinent to mention that observations to the contrary by a two-Judge Bench in Krishna Janardhan Bhat v. Dattatraya G. Hegde, (2008) 4 SCC 54 , have been set aside by a three-Judge Bench in Rangappa (supra). 16. This Court is further of the view that by creating this presumption, the law reinforces the reliability of cheques as a mode of payment in commercial transactions. 17. 16. This Court is further of the view that by creating this presumption, the law reinforces the reliability of cheques as a mode of payment in commercial transactions. 17. Needless to mention that the presumption contemplated under Section 139 of the NI Act is a rebuttable presumption. However, the initial onus of proving that the cheque is not in discharge of any debt or other liability is on the accused/drawer of the cheque [See: Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197 ]. 18. The presumption under Section 139 of the NI Act was explained by the Hon’ble Supreme Court in N. Vijay Kumar v. Vishwanath Rao N. , 2025 SCC OnLine SC 873 as under: “5. The NI Act raises two presumptions, one under Section 118 and the other in Section 139 thereof. The Sections read as under: “118. Presumptions as to negotiable instruments. — Until the contrary is proved, the following presumptions shall be made: — (a) of consideration: —that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration; x xx 139. Presumption in favour of the holder. — It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.” 6. Section 118 (a) assumes that every negotiable instrument is made or drawn for consideration, while Section 139 creates a presumption that the holder of a cheque has received the cheque in discharge of a debt or liability. Presumptions under both are rebuttable, meaning they can be rebutted by the accused by raising a probable defence. This Court, through various pronouncements, has consistently clarified the nature and extent of these presumptions and the standard of proof required by the accused to rebut them. We may consider a few such pronouncements. 6.1. In Mallavarapu Kasivisweswara Rao v. Thadikonda Ramulu Firm (2008) 7 SCC 655 , this Court observed as under: “17. Under Section 118 (a) of the Negotiable Instruments Act, the court is obliged to presume, until the contrary is proved, that the promissory note was made for consideration. We may consider a few such pronouncements. 6.1. In Mallavarapu Kasivisweswara Rao v. Thadikonda Ramulu Firm (2008) 7 SCC 655 , this Court observed as under: “17. Under Section 118 (a) of the Negotiable Instruments Act, the court is obliged to presume, until the contrary is proved, that the promissory note was made for consideration. It is also a settled position that the initial burden in this regard lies on the defendant to prove the non- existence of consideration by bringing on record such facts and circumstances which would lead the court to believe the non-existence of the consideration either by direct evidence or by preponderance of probabilities showing that the existence of consideration was improbable, doubtful or illegal. In this connection, reference may be made to a decision of this Court in Bharat Barrel & Drum Mfg. Co. v. Amin Chand Payrelal [ (1999) 3 SCC 35 ]. In para 12 of the said decision, this Court observed as under: (SCC pp. 50-51) “12. Upon consideration of various judgments as noted hereinabove, the position of law which emerges is that once execution of the promissory note is admitted, the presumption under Section 118 (a) would arise that it is supported by a consideration. Such a presumption is rebuttable. The defendant can prove the non-existence of a consideration by raising a probable defence. If the defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the plaintiff who will be obliged to prove it as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument. The burden upon the defendant of proving the non-existence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies. In such an event, the plaintiff is entitled under the law to rely upon all the evidence led in the case, including that of the plaintiff as well. In cases where the defendant fails to discharge the initial onus of proof by showing the nonexistence of the consideration, the plaintiff would invariably be held entitled to the benefit of the presumption arising under (a) in his favour. In cases where the defendant fails to discharge the initial onus of proof by showing the nonexistence of the consideration, the plaintiff would invariably be held entitled to the benefit of the presumption arising under (a) in his favour. The court may not insist upon the defendant to disprove the existence of consideration by leading direct evidence, as the existence of negative evidence is neither possible nor contemplated and even if led, is to be seen with a doubt. The bare denial of the passing of the consideration apparently does not appear to be any defence. Something which is probable has to be brought on record to get the benefit of shifting the onus of proving to the plaintiff. To disprove the presumption, the defendant has to bring on record such facts and circumstances upon consideration of which the court may either believe that the consideration did not exist or its nonexistence was so probable that a prudent man would, under the circumstances of the case, shall act upon the plea that it did not exist.” From the above decision of this Court, it is pellucid that if the defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the plaintiff who would be obliged to prove it as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument. It is also discernible from the above decision that if the defendant fails to discharge the initial onus of proof by showing the non-existence of the consideration, the plaintiff would invariably be held entitled to the benefit of the presumption arising under Section 118 (a) in his favour.” (Emphasis Supplied) 6.2. In Kumar Exports v. Sharma Carpets (2009) 2 SCC 513 , this Court examined the presumptions raised by the N.I. Act, and held as follows: “18. In Kumar Exports v. Sharma Carpets (2009) 2 SCC 513 , this Court examined the presumptions raised by the N.I. Act, and held as follows: “18. Applying the definition of the word “proved” in Section 3 of the Evidence Act to the provisions of Sections 118 and 139 of the Act, it becomes evident that in a trial under Section 138 of the Act a presumption will have to be made that every negotiable instrument was made or drawn for consideration and that it was executed for discharge of debt or liability once the execution of negotiable instrument is either proved or admitted. As soon as the complainant discharges the burden to prove that the instrument, say a note, was executed by the accused, the rules of presumptions under and 139 of the Act help him shift the burden on the accused. The presumptions will live, exist and survive and shall end only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability. A presumption is not in itself evidence, but only makes a prima facie case for a party for whose benefit it exists. 19. The use of the phrase “until the contrary is proved” in Section 118 of the Act and use of the words “unless the contrary is proved” in Section 139 of the Act read with definitions of “may presume” and “shall presume” as given in Section 4 of the Evidence Act, makes it at once clear that presumptions to be raised under both the provisions are rebuttable. When a presumption is rebuttable, it only points out that the party on whom lies the duty of going forward with evidence, on the fact presumed and when that party has produced evidence fairly and reasonably tending to show that the real fact is not as presumed, the purpose of the presumption is over. 20. The accused in a trial under Section 138 of the Act has two options. He can either show that consideration and debt did not exist or that, under the particular circumstances of the case, the non- existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. 20. The accused in a trial under Section 138 of the Act has two options. He can either show that consideration and debt did not exist or that, under the particular circumstances of the case, the non- existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumptions, an accused is not expected to prove his defence beyond a reasonable doubt, as is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not insist in every case that the accused should disprove the non-existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently, would not serve the purpose of the accused. Something which is probable has to be brought on record to shift the burden of proof to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non-existence was so probable that a prudent man would, under the circumstances of the case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence, and if the circumstances so relied upon are compelling, the burden may likewise shift again onto the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act, to rebut the presumptions arising under Sections 118 and 139 of the Act. 21. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act, to rebut the presumptions arising under Sections 118 and 139 of the Act. 21. The accused also has an option to prove the nonexistence of consideration and debt or liability either by letting in evidence or, in some clear and exceptional cases, from the case set out by the complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial. Once such rebuttal evidence is adduced and accepted by the court, having regard to all the circumstances of the case and the preponderance of probabilities, the evidential burden shifts back to the complainant and, thereafter, the presumptions under Sections 118 and 139 of the Act will not again come to the complainant's rescue.” (Emphasis Supplied) 6.3. A three-Judge Bench of this Court in Rangappa (supra) had the occasion to consider Section 139 elaborately. The Court reiterated that where the signature on the cheque is acknowledged, a presumption has to be raised that the cheque pertained to a legally enforceable debt or liability; however, this presumption is of a rebuttable nature and the onus is then on the accused to raise a probable defence. It was further stated that: “27. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses, and the defendant-accused cannot be expected to discharge an unduly high standard of proof. 28. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses, and the defendant-accused cannot be expected to discharge an unduly high standard of proof. 28. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139 , the standard of proof for doing so is that of “preponderance of probabilities”. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence, and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own.” 6.4. T.S. Thakur J., (as his lordship then was) in his supplementing opinion in Vijay v. Laxman (2013) 3 SCC 86 , observed as under: “20. The High Court has rightly accepted the version given by the respondent-accused herein. We say so for more than one reason. In the first place, the story of the complainant that he advanced a loan to the respondent-accused is unsupported by any material, let alone any documentary evidence that any such loan transaction had ever taken place. So much so, the complaint does not even indicate the date on which the loan was demanded and advanced. It is blissfully silent about these aspects, thereby making the entire story suspect. We are not unmindful of the fact that there is a presumption that the issue of a cheque is for consideration. Sections 118 and 139 of the Negotiable Instruments Act make that abundantly clear. That presumption is, however, rebuttable in nature. What is most important is that the standard of proof required for rebutting any such presumption is not as high as that required of the prosecution. So long as the accused can make his version reasonably probable, the burden of rebutting the presumption would stand discharged. Whether or not it is so in a given case depends upon the facts and circumstances of that case. So long as the accused can make his version reasonably probable, the burden of rebutting the presumption would stand discharged. Whether or not it is so in a given case depends upon the facts and circumstances of that case. It is trite that the courts can take into consideration the circumstances appearing in the evidence to determine whether the presumption should be held to be sufficiently rebutted. The legal position regarding the standard of proof required for rebutting a presumption is fairly well settled by a long line of decisions of this Court.” 6.5. This Court, in the case of Baslingappa v. Mudibasappa (2019) 5 SCC 418 , summarised the principles on Sections 118 (a) and 139 of the N.I. Act. The same is reproduced with profit as under: “25. We having noticed the ratio laid down by this Court in the above cases on Sections 118 (a) and 139, we now summarise the principles enumerated by this Court in the following manner: 25.1. Once the execution of a cheque is admitted, Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability. 25.2. The presumption under Section 139 is a rebuttable presumption, and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities. 25.3. To rebut the presumption, it is open for the accused to rely on evidence led by him, or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely. 25.4. That it is not necessary for the accused to come into the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden. 25.5. It is not necessary for the accused to come into the witness box to support his defence.” 6.6. Recently, a coordinate Bench of this Court in Rajaram v. Maruthachalam (2023) 16 SCC 125 , through Gavai J., observed as under: “27. 25.5. It is not necessary for the accused to come into the witness box to support his defence.” 6.6. Recently, a coordinate Bench of this Court in Rajaram v. Maruthachalam (2023) 16 SCC 125 , through Gavai J., observed as under: “27. It can thus be seen that this Court has held that once the execution of a cheque is admitted, Section 139 of the N.I. Act mandates a presumption that the cheque was for the discharge of any debt or other liability. It has, however, been held that the presumption under is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities. It has further been held that to rebut the presumption, it is open for the accused to rely on evidence led by him, or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence. It has been held that inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.” 7. The position of law, as is evident from the above, is clear.” 19. The accused admitted in his cross-examination that he had sent a notice (Ext.A-1) through his advocate, and the contents of the notice were correct. The notice mentions that the complainant Ramesh Chand had obtained three cheques bearing Sl. No. 725301, 725302 and 725303 drawn on Indian Overseas Bank, The Mall, Shimla, in the sum of Rs.50,000/- each. These cheques were issued in the name of M/s Mam Raj Ramesh Chand. These cheques were issued by Aakash Sood of M/s Aakash Boot House in consideration of the amount mentioned therein and which had been taken by him from time to time. It was agreed that the cheques would be returned on the repayment of the amount. Akash Sood repaid the entire amount in different instalments after September 1999, and the entire amount was paid by the end of February 2000. Therefore, Ramesh Chand was requested to return the cheques so obtained by him from Aakash Sood. 20. This notice admits that the cheque in the present case (Ext.CW1/A) bearing Sl.No. 725301 was issued by the accused in favour of Ramesh Chand C/o Mamraj Ramesh Chand. Therefore, Ramesh Chand was requested to return the cheques so obtained by him from Aakash Sood. 20. This notice admits that the cheque in the present case (Ext.CW1/A) bearing Sl.No. 725301 was issued by the accused in favour of Ramesh Chand C/o Mamraj Ramesh Chand. Secondly, it admits that the cheque was issued in the sum of Rs.50,000/- for a consideration of the amount mentioned in the cheque. Thirdly, it admits that the amount mentioned in the cheque was taken by the accused from the complainant from time to time. It claimed that the amount mentioned in the cheque was returned by the accused to the complainant. Thus, the issuance of the cheque and receipt of the consideration of Rs.50,000/- were not in dispute. Therefore, the burden was upon the accused to establish that he had returned the amount of Rs.50,000/- mentioned in the cheque. 21. Accused Aakash Sood (DW1) stated that he and the complainant were running a Chit Fund Scheme. Both of them were equal partners. They were looking after the management together. The money would be collected daily, and a draw would be taken out after 10 days. The money would be handed over to a person requiring it. Collection charges were deducted. The complainant is running a business in the name of M/s Mam Raj Ramesh Chand Aggarwal. He never took any money from the complainant and had handed over the cheque of Rs.50,000/- as security. He had not taken any money regarding these cheques. The matter was settled between him and the complainant, but the cheque was not returned to him. Around 100 people were members of the Chit Fund Scheme. He had also served a notice upon the complainant through his counsel for the return of the cheque, but the cheques were not returned. He had never taken any money from the complainant. The payment above Rs.50,000/- can only be made through a cheque. He is a manager of Aakash Boot House, and he has the authority to issue the cheque on behalf of Aakash Boot House. He corrected to say that he had the authority to issue the cheque in the absence of his father. 22. The payment above Rs.50,000/- can only be made through a cheque. He is a manager of Aakash Boot House, and he has the authority to issue the cheque on behalf of Aakash Boot House. He corrected to say that he had the authority to issue the cheque in the absence of his father. 22. Thus, the accused denied in his statement that he had received the money mentioned in the cheque, which is contrary to the earliest version projected in the notice (Ext.A1), wherein it was specifically acknowledged that the amount mentioned in the cheque was taken by the accused from the complainant. The accused projected a different version in the Court regarding the running of the Chit Fund business and the cheque pertaining to that business. This version was never propounded initially. He specifically stated on oath that he had not received any money from the complainant and had not returned any money to him. Therefore, the accused had not proved that the money mentioned in the cheque (Ext.CW1/A) was returned by him to the complainant as claimed in the notice (Ext. A-1). 23. Learned Appellate Court held that the cheque was issued on behalf of M/s Aakash Boot House. Reliance was placed upon the letter (Ext.CW4/A) written by Roshan Lal Sood, partner, Aakash Boot House, authorising Aakash Sood to sign the cheque on his behalf in his absence. He had also attested the signatures of Akash Sood. This letter will not help the accused. The accused admitted in his cross-examination that he had signed the cheque (Ext.CW1/A) as a partner. It was laid down by the Hon’ble Supreme Court in Dhanasingh Prabhu v. Chandrasekar , (2025) 258 Comp Cas 404: 2025 SCC OnLine SC 1419 that a partner is an agent of the firm and is entitled to act on behalf of the firm in the absence of any restrictions. It was observed: 7.19 The liability of partners for the debts of the business is unlimited, and they are jointly and severally liable for all business obligations of the partnership firm. Sections 25 and 26 of the Indian Partnership Act are relevant in this regard, which are reproduced as under: “25. Liability of a partner for acts of the firm. —Every partner is liable, jointly with all the other partners and also severally, for all acts of the firm done while he is a partner. 26. Sections 25 and 26 of the Indian Partnership Act are relevant in this regard, which are reproduced as under: “25. Liability of a partner for acts of the firm. —Every partner is liable, jointly with all the other partners and also severally, for all acts of the firm done while he is a partner. 26. Liability of the firm for wrongful acts of a partner. —Where, by the wrongful act or omission of a partner acting in the ordinary course of the business of a firm, or with the authority of his partners, loss or injury is caused to any third party, or any penalty is incurred, the firm is liable therefor to the same extent as the partner.” Section 25 provides that every partner is liable jointly with all the other partners and also severally for all acts of the firm done by the partner. Since a firm is not a legal entity but only a collective name for all the partners, it does not have any legal existence apart from its partners. Therefore, any liability of a firm has the same effect as a liability against the partners. This is because, the partners remain liable jointly and severally for all acts of the firm, vide Dena Bank v. Bhikhabhai Prabhudas Parekh and Co. [(2001) 107 Comp Cas 157 (SC); (2001) 247 ITR 165 (SC); (2000) 120 STC 610 (SC); (2000) 5 SCC 694 ; 2000 SCC OnLine SC 796.] 7.20 Moreover, the partners of a firm have unlimited liability to the creditors of the firm. This is as opposed to a limited company or a limited liability partnership, wherein the liability of the directors or the shareholders is to the extent of their share in the limited company or limited liability partnership and limited to the nominal value of the shares held by them or the amount guaranteed by the shareholder when it comes to a company. Thus, the debt of the firm is the personal debt of a partner, and the debt of the firm has to be incurred by each partner as a personal financial liability.” 24. Therefore, the letter written by one of the partners that the other partner was authorised to sign on behalf of the partner in his absence will not help the accused. 25. Therefore, the letter written by one of the partners that the other partner was authorised to sign on behalf of the partner in his absence will not help the accused. 25. It was stated that the complainant had not mentioned in the complaint that accused Aakash Sood was in charge and responsible for the business of a firm, and the requirement of Section 141 of the NI Act was not satisfied. This finding will also not help the accused. It is undisputed that the accused had signed the cheque; therefore, he was a signatory and would be liable by virtue of his position as a signatory. The liability of the signatory was decided by the Hon’ble Supreme Court in S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla , (2005) 8 SCC 89 . The following question inter alia was referred for consideration by the larger bench: - “(c) Even if it is held that specific averments are necessary, whether, in the absence of such averments, the signatory of the cheque and or the managing directors or joint managing director who admittedly would be in charge of the company and responsible to the company for the conduct of its business could be proceeded against.” 26. The Hon’ble Supreme Court, after discussing the entire case law on the subject, answered the reference as under: (c) The answer to Question (c) has to be in the affirmative. The question notes that the managing director or joint managing director would be admittedly in charge of the company and responsible to the company for the conduct of its business. When that is so, holders of such positions in a company become liable under Section 141 of the Act. By virtue of the office they hold as managing director or joint managing director, these persons are in charge of and responsible for the conduct of the business of the company. Therefore, they get covered under . So far as the signatory of a cheque which is dishonoured is concerned, he is clearly responsible for the incriminating act and will be covered under sub- section (2) of . 27. Thus, a signatory is liable by virtue of the fact that he had signed the cheque under Section 141 (2) of the Act, and nothing more is required to be established in his case. 27. Thus, a signatory is liable by virtue of the fact that he had signed the cheque under Section 141 (2) of the Act, and nothing more is required to be established in his case. Therefore, the learned Appellate Court erred in relying upon the provision of of the NI Act to hold that the accused was not liable in the absence of an averment that he was in charge and responsible to the firm. 28. The accused examined Shiv Kumar (DW2), Nanak Ram (DW3) and Mast Ram (DW4), who deposed about the complainant and accused running a Chit Fund business. He also examined Sachida Nand (DW5), who deposed about the settlement between the accused and the complainant. The statement of Sachida Nand (DW5) shows that the complainant was not present at the time of settlement, and thus, not much advantage can be derived from the statement of this witness. The plea regarding the Chit Fund Scheme is not relevant because the dispute is regarding the payment of Rs.50,000/- made by the complainant to the accused, which he had acknowledged in the notice sent by him to the complainant. 29. The learned Appellate Court also held that the complainant had failed to prove the income tax return or the sales tax return of the accused to show that he was a partner in M/s Aakash Boot House. This was not required because the accused had admitted that he had signed as a partner on the cheque; hence, no evidence was required to be led to establish this fact. 29. The accused stated that the payment of Rs.20,000/- or more can be made by means of a cheque. This statement will not help the accused. It was laid down by this Court in Surinder Singh vs. State of H.P. 2018(1) D.C.R. 45 that contravention of Section 269 SS of the Income Tax Act will give rise to a penalty, but will not invalidate the transaction. It was observed: - 5. This statement will not help the accused. It was laid down by this Court in Surinder Singh vs. State of H.P. 2018(1) D.C.R. 45 that contravention of Section 269 SS of the Income Tax Act will give rise to a penalty, but will not invalidate the transaction. It was observed: - 5. The relevant portion of Section 269 SS of the IT Act reads thus: - "(a) the amount of such loan or deposit or the aggregate amount of such loan and deposit' or (b) on the date of taking or accepting such loan or deposit, any loan or deposit taken or accepted earlier by such person from the depositor is remaining unpaid (whether repayment has fallen due or not), the amount or the aggregate amount remaining unpaid; or (c) The amount or the aggregate amount referred to in clause (a) together with the amount or the aggregate amount referred to in clause (b), is (twenty) thousand rupees or more. Provided " 6. Section 271D provides for a penalty for failure to comply with the aforesaid provisions, which reads thus: "271D. Penalty for failure to comply with the provisions of Section 269-SS - (1) If a person takes or accepts any loan or deposit in contravention of the provisions of Section 269-SS, he shall be liable to pay, by way of penalty, a sum equal to the amount of the loan or deposit so taken or accepted. (2) Any penalty impossible under sub-section (1) shall be imposed by the Joint Commissioner." 7. A collective reading of both the aforesaid Sections would go to show that even though contravention of Section 269-SS of the IT Act would be visited with a strict penalty on the person taking the loan or deposit. However, Section 271D does not in any manner suggest or even provide that such a transaction would be null and void. The payer of money in cash, in violation of Section 269 SS of the IT Act, can always have the money recovered. 8. The object of introducing Section 269 of the IT Act has been succinctly set out by the Hon'ble Supreme Court in Asstt. Director of Inspection Investigation vs. A.B. Shanthi (2002) 6 SCC 259 , wherein it was observed as under: - "8. 8. The object of introducing Section 269 of the IT Act has been succinctly set out by the Hon'ble Supreme Court in Asstt. Director of Inspection Investigation vs. A.B. Shanthi (2002) 6 SCC 259 , wherein it was observed as under: - "8. The object of introducing Section 269-SS is to ensure that a taxpayer is not allowed to give a false explanation for his unaccounted money, or if he has given some false entries in his accounts, he shall not escape by giving false entries in his accounts, he shall not escape by giving a false explanation for the same. During search and seizures, unaccounted money is unearthed, and the taxpayer would usually give the explanation that he had borrowed or received deposits from his relatives or friends, and it is easy for the so-called lender also to manipulate his records later to suit the plea of the taxpayer. The main objection of Section 269-SS was to curb this menace." 9. In light of the aforesaid observations, it cannot but be said that Section 269-SS only provides for the mode of accepting payment or repayment in certain cases so as to counteract evasion of tax. However, Section 269-SS does not declare all transactions of loans by cash in excess of Rs.20,000/- as invalid, illegal or null and void, as the main object of introducing the provision was to curb and unearth black money. 30. A similar view was taken by the Hon’ble Supreme Court in Sanjabij Tari v. Kishore S. Borcar, 2025 SCC OnLine SC 2069, wherein it was observed: “19. Recently, the Kerala High Court in P.C. Hari v. Shine Varghese, 2025 SCC OnLine Ker 5535 has taken the view that a debt created by a cash transaction above Rs.20,000/- (Rupees Twenty Thousand) in violation of the provisions of Section 269SS of the Income Tax Act, 1961 (for short ‘IT Act, 1961’) is not a ‘legally enforce- able debt’ unless there is a valid explanation for the same, meaning thereby that the presumption under Section 139 of the Act will not be attracted in cash transactions above Rs. 20,000/- (Rupees Twenty Thousand). 20. However, this Court is of the view that any breach of Section 269SS of the IT Act, 1961, is subject to a penalty only under Section 271D of the IT Act, 1961. 20,000/- (Rupees Twenty Thousand). 20. However, this Court is of the view that any breach of Section 269SS of the IT Act, 1961, is subject to a penalty only under Section 271D of the IT Act, 1961. Further, neither Section 269SS nor 271D of the IT Act, 1961 states that any transaction in breach thereof will be illegal, invalid or statutorily void. Therefore, any violation of Section 269SS would not render the transaction unenforceable under Section 138 of the NI Act or rebut the presumptions under Sections 118 and 139 of the NI Act because such a person, assuming him/her to be the payee/holder in due course, is liable to be visited by a penalty only as prescribed. Consequently, the view that any transaction above Rs. 20,000/- (Rupees Twenty Thousand) is illegal and void and therefore does not fall within the definition of ‘legally enforceable debt’ cannot be countenanced. Accordingly, the conclusion of law in P.C. Hari (supra) is set aside.” 31. Therefore, the learned Trial Court had rightly held that the accused had failed to rebut the presumption contained in the NI Act, whereas the learned Appellate Court erred in holding that the accused was not liable. 32. It was held in M/s Kumar Export (supra) and M/s Kamal General Store (supra) that the defence of the accused is not to be proved beyond a reasonable doubt. There is no dispute with this proposition of law because the accused can always create a dent in the case of the complainant by bringing the material on record, which would show that the case of the prosecution/complainant is not proved beyond a reasonable doubt. However, in the present case, the accused did not lead any evidence regarding the payment of the money, and this judgment will not help the accused. 33. It was held in Kuldeep Thakur (supra), N.K. Wahi (supra), and Paresh P. Rajda (supra) that when the company is an offender, it is specifically required to be averred that a person is in charge and responsible for the business of the company. In the present case, the accused is an authorised signatory, and the absence of this averment will not make the complainant’s case suspect. 34. In DCM Financial Services Ltd. (supra), the liability of the directors was noticed, and it was found that the role of the signatory on a post-dated dishonoured cheque was not specifically averred. In the present case, the accused is an authorised signatory, and the absence of this averment will not make the complainant’s case suspect. 34. In DCM Financial Services Ltd. (supra), the liability of the directors was noticed, and it was found that the role of the signatory on a post-dated dishonoured cheque was not specifically averred. In the present case, it has been admitted that the accused is a partner and he is the authorised signatory; therefore, this judgment will not help the accused. 35. In Krishna Janardhan Bhat (supra) and K. Prakashan (supra), the Hon’ble Supreme Court held that the burden to rebut the presumption can be discharged by the material on record, and it is not necessary for the accused to examine himself. In the present case, the accused has examined himself but has not rebutted the burden by proving the plea taken by him. 36. Therefore, it is apparent that none of the cited judgments applies to the present case, and the accused cannot take any advantage from the cited judgments. 37. No other point was urged. 38. Therefore, the learned Appellate Court had taken a view which could not have been taken by any reasonable person and reversed the well-reasoned judgment passed by the learned Trial Court. Therefore, the judgment passed by the learned Appellate Court is not sustainable. 39. Consequently, the present appeal is allowed, and the judgment passed by the learned Appellate Court is ordered to be set aside, while the judgment passed by the learned Trial Court is ordered to be restored. 40. A copy of the judgment and the records of the learned Courts below be sent back forthwith.