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TMI Blog2018 (9) TMI 842X X X X Extracts X X X X X X X X Extracts X X X X ..... loan to the accused. He admitted that there was no loan agreement between himself and Mr. Sushil Kumar - Complainant tendered his evidence by way of affidavit and the text message was marked as Mark-‘A’ on 17th September, 2014. As per the original record though initially mark Ex.CW-1/7 was put on it however, later as noted in the evidence of the complainant on 17th September, 2014 it was only a marked document. Though the SMS was marked as mark ‘A’ however, in his deposition as DW-1 Santosh Kumar Singh admitted that the SMS mentioned in para-8 of Ex.CW-1/7 to the complainant was sent by him. In case the blank signed cheques were given as security there was no question of the liability to pay as admitted in the SMS as also in the deposition - the fact that the cheque was signed by him even though he gave a blank signed cheque, the learned Trial Court committed an error in not considering this admission of the respondent on oath. Respondent is therefore, convicted for the offence punishable under Section 138 NI Act. - CRL.A. 405/2017 - - - Dated:- 12-9-2018 - MS. MUKTA GUPTA J. Appellant Represented by: Mr. Sanjay Bhardwaj, Adv. Respondent Represented by: Mr. Raj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said property was sold for a sum of ₹22 lakhs. Out of total sale proceeds, ₹8 lakhs was received vide cheque No.162130 dated 11th April, 2011 drawn on State Bank of India, ₹5 lakhs was received vide cheque No. 432498 dated 11th April, 2011 drawn on Punjab National bank and balance of ₹9 lakhs was given in cash. Aforesaid cheques were proved vide Ex.CW-2/B. 7. Raj Kumar in his evidence by way of affidavit (Ex.CW-3/1), stated that he was one of the attesting witnesses of all the documents executed between Devender Singh and Smt. Krishna Devi. He corroborated the version of Devender Singh. 8. Respondent, in his statement under Section 313 Cr.P.C. denied taking any loan of ₹14,40,000/- from the appellant. He also stated that the cheque in question was issued to the appellant as security for two committees which were being run by the appellant for a sum of ₹6,00,000/- each about 3 years ago approximately and he had given the cheque in blank signed condition. 9. Respondent examined himself as DW-1 wherein he reiterated the defence taken by him in his statement recorded under Section 313 Cr.P.C. 10. Learned counsel for the appellant submits t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded that nothing contained in this section shall apply unless- (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque within fifteen days of the receipt of the said notice. Explanation .-For the purposes of this section, debt or other liability means a legally enforceable debt or other liability. 139. Presumption in favour of 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. 18. Ordinarily ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wrong. 19. It has been contended on behalf of the appellant-accused that the presumption mandated by Section 139 of the Act does not extend to the existence of a legally enforceable debt or liability and that the same stood rebutted in this case, keeping in mind the discrepancies in the complainant's version. It was reasoned that it is open to the accused to rely on the materials produced by the complainant for disproving the existence of a legally enforceable debt or liability. It has been contended that since the complainant did not conclusively show whether a debt was owed to him in respect of a hand loan or in relation to expenditure incurred during the construction of the accused's house, the existence of a legally enforceable debt or liability had not been shown, thereby creating a probable defence for the accused. 20. The counsel appearing for the appellant-accused has relied on a decision given by a Division Bench of this Court in Krishna Janardhan Bhat v. Dattatraya G. Hegde [(2008) 4 SCC 54 : (2008) 2 SCC (Cri) 166] , the operative observations from which are reproduced below: (S.B. Sinha, J. at SCC pp. 61-63, paras 29-32 34) 29. Section 138 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o regulate the growing business, trade, commerce and industrial activities of the country and the strict liability to promote greater vigilance in financial matters and to safeguard the faith of the creditor in the drawer of the cheque which is essential to the economic life of a developing country like India. This, however, shall not mean that the courts shall put a blind eye to the ground realities. Statute mandates raising of presumption but it stops at that. It does not say how presumption drawn should be held to have rebutted. Other important principles of legal jurisprudence, namely, presumption of innocence as human rights and the doctrine of reverse burden introduced by Section 139 should be delicately balanced. Such balancing acts, indisputably would largely depend upon the factual matrix of each case, the materials brought on record and having regard to legal principles governing the same. (emphasis supplied) 22. With respect to the decision cited above, the counsel appearing for the respondent claimant has submitted that the observations to the effect that the existence of legally recoverable debt is not a matter of presumption under Section 139 of the Act a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fence that the court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of reasonability being that of the prudent man . (emphasis supplied) 23. The respondent claimant has also referred to the decision reported as Mallavarapu Kasivisweswara Rao v. Thadikonda Ramulu Firm [(2008) 7 SCC 655] , wherein it was observed: (SCC p. 660, para 17) 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. 24. This decision in Mallavarapu Kasivisweswara Rao case [(2008) 7 SCC 655], then proceeded to cite an extract from the earlier decision in Bharat Barrel Drum Mfg. Co. v. Amin Chand Payr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd to the facts in the present case, we can also refer to the following observations in M.M.T.C. Ltd. v. Medchl Chemicals Pharma (P) Ltd.[(2002) 1 SCC 234 : 2002 SCC (Cri) 121] : (SCC p. 240, para 19) 19. The authority shows that even when the cheque is dishonoured by reason of stop-payment instructions by virtue of Section 139 the court has to presume that the cheque was received by the holder for the discharge, in whole or in part, of any debt or liability. Of course this is a rebuttable presumption. The accused can thus show that the stop-payment instructions were not issued because of insufficiency or paucity of funds. If the accused shows that in his account there were sufficient funds to clear the amount of the cheque at the time of presentation of the cheque for encashment at the drawer bank and that the stop-payment notice had been issued because of other valid causes including that there was no existing debt or liability at the time of presentation of cheque for encashment, then offence under Section 138 would not be made out. The important thing is that the burden of so proving would be on the accused. (emphasis supplied) 26. In light of these ext ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e accused may not need to adduce evidence of his/her own. 13. Thus once the complainant establishes the factual basis of existence of a legally recoverable debt it is obligatory on the Court to raise the presumption under Section 118 NI Act whereafter the onus shifts to the accused to rebut the same by preponderance of probability whether by leading defence evidence or on the evidence led by the complainant itself. 14. By examining Devender Singh the complainant has proved the source of money available to him and merely because the sale deed was not exhibited by Devender Singh is no ground to come to the conclusion that factual basis for establishing the legal liability has not been discharged. In his cross-examination complainant admitted that he was a stock broker and presently unemployed. The loan of ₹14,40,000/- was given in cash and he had not shown the same in the Income Tax Return. The same was not withdrawn from any account. He volunteered that he sold a property which was given as a gift to him by his uncle and from the said money he gave the loan to the accused. He admitted that there was no loan agreement between himself and Mr. Sushil Kumar. 15. Learned ..... X X X X Extracts X X X X X X X X Extracts X X X X
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