2023 (11) TMI 1118 - HC - Indian Laws

Dishonour of Cheque - presumption with regard to existence of consideration amount - onus to rebut the presumption - shifting the burden upon the original accused to prove his case beyond reasonable doubt - HELD THAT - While responding to such defence, the complainant has fairly accepted the fact about the actual outstanding amount dues from the complainant to be Rs.8,99,000/-, whereas the cheque in dispute appears to be figures of Rs.9,99,000/-. In the opinion of this Court, the aforesaid contradiction goes to the root of the matter. It straightway hit the presumption drawn in favour of the complainant under Section 118(a) of the Negotiable Instruments Act, which permits the Court to raise presumption with regard to existence of consideration amount. Section 139 of the Negotiable Instruments Act further permits the Court to raise presumption with regard to the cheque being issued towards discharge of legally recoverable debt as on the date of the presentation of the cheque. It is a settled legal position that in absence of any challenge to the signature on the disputed cheque, the statutory presumption available under Section 118 and Section 139 of the Act comes into play. The aforesaid statutory provision permits the Court to raise presumption against the respondent accused. The onus is upon the accused on the issuance of cheque to rebut the presumption that the cheque was not issued for discharge of any debt or liability under Section 138 of the Act. However, such presumption is subject to probable defence to be raised by the accused to create doubt with regard to existence of any debt or liability. In case of Rangappa Vs. Sri Mohan 2010 (5) TMI 391 - SUPREME COURT , the Hon ble Supreme Court held that the standard of proof to discharge of such presumption can be in the form of probable defence which is weighed on the scale of preponderance of probabilities - As noticed hereinabove, in the present matter, the learned Court below has consciously and carefully taken into consideration this aspect, which has emerged on record to arrive at finding with regard to the discrepancy in the amount dues to be realized from the respondent accused, coupled with the fact that the original complainant has failed to offer any explanation with regard to the additional amount of Rs.1 Lakh - no fault can be found in the approach of the learned Magistrate in shifting the burden upon the original accused to prove his case beyond reasonable doubt. The discrepancy noted in the amount due against the respondent accused against which the cheque is alleged to have been issued goes to the root of the matter, which can be treated as material contradiction. In the opinion of this Court, no arguable case is made out to entertain a present application seeking leave to appeal. Hence, present application is hereby rejected - In view of dismissal of the application seeking leave to appeal, Criminal Appeal No.34 of 2023 stands disposed of.

Summary

Issues Involved:
1. Legality of the dismissal of the complaint by the Special Judge.
2. Evaluation of the evidence and statutory presumptions under the Negotiable Instruments Act.
3. Discrepancies in the outstanding amount and its impact on the case.
4. Compliance with the requirements of Section 138 of the Negotiable Instruments Act.
5. Rebuttal of presumption by the accused and burden of proof.

Summary:

1. Legality of the Dismissal of the Complaint:
The application for special leave to appeal was filed under Section 378(4) of the Code of Criminal Procedure by the original complainant, challenging the judgment dated 25.11.2022 by the Special Judge, N.I. Court, Vadodara, which dismissed the complaint on the grounds that the complainant failed to prove his case.

2. Evaluation of the Evidence and Statutory Presumptions:
The original complainant alleged that the respondent-accused borrowed Rs.4,50,000 on 10.06.2014, with various subsequent transactions leading to an outstanding amount of Rs.9,99,000. The accused issued a cheque dated 05.11.2016, which was dishonored due to "insufficient funds." The complainant initiated proceedings under Section 138 of the Negotiable Instruments Act. The Magistrate noted that the mandatory provisions of Section 138(a), 138(b), 138(c), and 140(b) were satisfied, and the complaint was filed within the prescribed period.

3. Discrepancies in the Outstanding Amount:
During the trial, discrepancies in the outstanding amount were noted. The complainant claimed Rs.9,99,000, but evidence suggested the amount was Rs.8,99,000. The complainant admitted this discrepancy during cross-examination and failed to explain the additional Rs.1 Lakh. This discrepancy dislodged the presumption in favor of the complainant under Sections 138 and 139 of the Negotiable Instruments Act, shifting the burden of proof to the complainant.

4. Compliance with Section 138 Requirements:
The complainant argued that the accused admitted to signing and issuing the cheque, which should maintain the presumption of debt under Sections 118 and 139 of the Act. However, the accused claimed the cheque was a blank security cheque misused by the complainant. The Special Judge found that the complainant failed to prove the debt beyond reasonable doubt due to the unexplained additional amount.

5. Rebuttal of Presumption and Burden of Proof:
The accused successfully rebutted the presumption by highlighting the discrepancy in the amount. The Court held that the complainant's failure to explain the additional Rs.1 Lakh undermined the case. The judgment referenced the Supreme Court case of Uttam Ram Vs. Devinder Singh Hudan, emphasizing that the complainant must prove the debt despite statutory presumptions.

Conclusion:
The High Court found no fault in the Special Judge's approach, noting that the discrepancy in the amount was a material contradiction affecting the presumption of debt. The application for special leave to appeal was rejected, and the Criminal Appeal No.34 of 2023 was disposed of.