2022 (1) TMI 1005 - HC - Indian Laws

Dishonor of Cheque - acquittal of the accused - presumption both under sections 118 and 139 of the Negotiable Instruments Act - rebuttal of presumption - burden upon the appellant to establish the offence without taking into consideration of the impact of presumption or not - HELD THAT - It is true that in the decision the Hon ble Supreme Court in RANGAPPA VERSUS SRI MOHAN 2010 (5) TMI 391 - SUPREME COURT observed about the existence of a reverse onus under Section 139 of the Act once execution of the cheque is proved. However the said presumption comes into play only when the execution of the cheque is proved. In this case the execution of cheque is specifically denied by the 1st respondent. He has a case that the cheque was lost by him in the year 2007 while he was working at FCI Kozhikode. It is an admitted fact that at the relevant time the appellant was also working there. The evidence of DW1 coupled with Ext. C2 document would reveal that as early as on 24.5.2010 the 1st respondent had issued a stop memo in respect of a cheque in question. The issuance of cheque even according to the appellant is almost a year after the said date. When all these aspects are taken into consideration the execution of the cheque itself is in doubt. Even if it is assumed for argument for the sake that the aforesaid cheque was indeed issued by the 1st respondent even then the evidence adduced by the appellant would indicate a probable case which will have the impact of rebutting the presumption available under Section 139 of the Negotiable Instruments Act - 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. In this case the factual situation pointed out by the appellant contains several discrepancies mentioned above which is sufficient to raise a probable defence so as to create doubts as to the existence of legally enforceable debt or liability. The discrepancies mentioned cannot be treated as immaterial or insignificant. Even if the evidence as a whole is taken into consideration it contains several loop-holes or lacuna in the case advanced by the appellant - It is evident from the deposition of PW1 that the cheque was issued by the 1st respondent when the 1st respondent came to the office of FCI West Hill all of a sudden. It is also stated by the appellant that when the 1st respondent came to the office he was sitting in the security room of the office and the 1st respondent handed over a cheque for 3 lakhs. The said cheque is claimed to have been issued by the 1st respondent all of a sudden when the 1st respondent voluntarily came to the FCI West Hill office and handed over the same to the appellant. None of the persons who were claimed to have interfered for persuading the 1st respondent to arrive at a settlement are not seen examined. When all these aspects are taken into consideration the case of the appellant is highly improbable and hence the interference in the findings of the learned Magistrate is unwarranted. No circumstances are in existence for interfering in the impugned judgment passed by the trial court - Appeal dismissed.

Issues Involved:
1. Challenge to the finding of acquittal by the trial court.
2. Allegations under Section 138 of the Negotiable Instruments Act.
3. Presumption under Sections 118 and 139 of the Negotiable Instruments Act.
4. Rebuttal of presumption by the accused.
5. Examination of discrepancies and inconsistencies in the appellant’s case.
6. Evaluation of evidence and the burden of proof.

Issue-wise Detailed Analysis:

1. Challenge to the finding of acquittal by the trial court:
The appellant, who was the complainant in C.C. No. 820 of 2011, challenged the trial court's acquittal of the 1st respondent. The trial court had acquitted the 1st respondent under Section 255(1) of the Cr.P.C. after finding him not guilty of the offence under Section 138 of the Negotiable Instruments Act.

2. Allegations under Section 138 of the Negotiable Instruments Act:
The appellant alleged that the 1st respondent had issued a cheque for ?3 lakhs, which was dishonored due to "payment stopped by the drawer." The appellant claimed that this cheque was issued as part of a repayment agreement after the 1st respondent failed to secure a job for the appellant's son, for which the appellant had paid ?3.5 lakhs.

3. Presumption under Sections 118 and 139 of the Negotiable Instruments Act:
The appellant’s counsel argued that the cheque carried a presumption under Sections 118 and 139 of the Negotiable Instruments Act, which presumes the existence of a legally enforceable debt or liability unless rebutted by the accused. The appellant relied on several judgments to support this contention, including Uttam Ram v. Devinder Singh Hudan and Rangappa v. Sri. Mohan.

4. Rebuttal of presumption by the accused:
The 1st respondent contended that the presumption under Sections 118 and 139 is rebuttable and claimed that he had not issued any cheque to the appellant. He argued that he had lost certain cheques in 2007 and had issued a stop memo in 2010, which was evidenced by Ext. C2. The 1st respondent's defense was supported by the testimony of DW1, the bank manager, who confirmed the stop memo due to lost cheques.

5. Examination of discrepancies and inconsistencies in the appellant’s case:
The court noted several discrepancies in the appellant’s case:
- The date or year of the initial payment of ?3.5 lakhs was not mentioned in the complaint.
- Details of the bank or the nature of the employment promised were omitted.
- The appellant's claim of additional expenses incurred due to borrowing funds was unsupported by evidence.
- Contradictions in the appellant's statements regarding the total amount agreed upon for repayment and the actual amount of the cheque issued.

6. Evaluation of evidence and the burden of proof:
The court emphasized that once the presumption under Sections 118 and 139 is rebutted by the accused, the burden shifts back to the complainant to prove the offence. The court found that the 1st respondent had successfully raised a probable defense, creating doubts about the existence of a legally enforceable debt or liability. The court also highlighted the importance of the double presumption of innocence in cases of acquittal, as noted in Chandrappa and Others v. State of Karnataka.

Conclusion:
The court concluded that the discrepancies and improbabilities in the appellant’s case, along with the defense raised by the 1st respondent, were sufficient to rebut the presumption under Sections 118 and 139. Consequently, the court found no merit in the appellant’s contentions and upheld the trial court’s judgment of acquittal. The appeal was dismissed, and the judgment dated 23.07.2013 in C.C. No. 820/2011 was confirmed.

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