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TMI Blog2019 (3) TMI 769X X X X Extracts X X X X X X X X Extracts X X X X ..... denied. The High Court also observed that the issue regarding washing away of the cheques in rain water was of no significance when the accused had accepted his liability in clear terms. The High Court found that the defence plea of the accused that the money was given as hand loan by his friend Shri Jagdishbhai got falsified by the version of the said Shri Jagdishbhai, who was examined as a witness on behalf of the complainant. The High Court, therefore, set aside the impugned orders and, while convicting the accused-appellant for the offence under Section 138 of the NI Act, sentenced him in the manner noticed hereinbefore. Preponderance of probabilities - Held that:- The accused has to bring on record such facts and such circumstances which may lead the Court to conclude either that the consideration did not exist or that its nonexistence was so probable that a prudent man would, under the circumstances of the case, act upon the plea that the consideration did not exist. This Court has, time and again, emphasized that though there may not be sufficient negative evidence which could be brought on record by the accused to discharge his burden, yet mere denial would not fulfil th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Abhay Manohar Sapre And Dinesh Maheshwari, JJ. JUDGMENT Dinesh Maheshwari, J. Leave granted. 2. This appeal is directed against the common judgment and order dated 08.01.2018 in R/Criminal Appeal No. 1187/2017 connected with R/Criminal Appeal Nos. 1191/2017 to 1196/2017 whereby, the High Court of Gujarat at Ahmedabad has reversed the respective judgment and orders dated 09.06.2017 as passed by the 8th Additional Senior Civil Judge and Additional Chief Judicial Magistrate, Vadodara in 7 criminal cases Nos. 44345/2009, 46499/2008, 46254/2008, 48420/2008, 40321/2008, 48631/2008 and 46503/2008 respectively. pertaining to the offence under Section 138 of the Negotiable Instruments Act, 1881 ('the NI Act') for dishonour of 7 cheques in the sum of ₹ 3 lakhs each, as said to have been drawn by the accused-appellant in favour of the complainantrespondent No. 2. In the impugned judgment and order dated 08.01.2018, the High Court has disapproved the acquittal of the accused-appellant and, while holding him guilty of the offence under Section 138 of the NI Act, has awarded him the punishment of simple imprisonment for a period of 1 year with fine to the exten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emand notices; the replies wherever sent by the appellant; and the written acknowledgement on a stamp paper by the accused. The accused was examined under Section 313 of the Code of Criminal Procedure, 1973 where he asserted that he had no money transaction with the complainant; and had neither issued any cheque nor written any note for any legal debt in favour of the complainant. The accused-appellant, however, asserted that several years in the past, he had some transaction with the said Shri Jagdishbhai and the cheques and blank stamp paper lying with Shri Jagdishbhai have been fraudulently misused to unlawfully recover the money from him. The accused-appellant, however, did not lead any evidence. 5. After having heard the parties, the Trial Court formulated similar points for determination in each of these 7 cases which could be noticed as under The extraction is from the judgment of the Trial Court in Criminal Case No. 46499 of 2008. : 1. Whether the complainant proves that the accused has issued and handed over the Cheque bearing No. 763346 of ₹ 3, 00,000/- towards legal due amount from the account maintained by him, and upon presenting the said cheque in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the judgment of the Trial Court in Criminal Case No. 46499 of 2008 19 All these circumstances creates doubt of the complainant (sic) as alleged and accused has brought on record rebuttable evidence upto to requisite level ie. Preponderance of probabilities and as such considering section 5,6,32 and 118 and 139 of N.I. Act complainant failed to prove complaint beyond reasonable doubt that the cheque has been issued for the recoverable debt/liability. *** *** *** *** 22. Therefore as discussion made herein above the complainant failed to prove that the disputed cheque has been issued by the accused for the part payment of transaction of ₹ 22,50,000/- therefore accused is entitled to get acquittal who has brought on record the circumstances which rebut the presumption under section 118,119, of N.I. Act (sic) 7. Against the aforementioned judgment and orders of acquittal, the complainant preferred appeals before the High Court of Gujarat, which have been considered and decided together by the impugned common judgment and order dated 08.01.2018. The High Court observed that the presumption under Sections 118 and 139 of the NI Act was required to be drawn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount, that at the best would hold the assessee or lender liable for action under the Income-tax laws. However, otherwise, if he succeeds in showing lending of such amount, both by oral evidence of himself and his friend, on whom even respondent No.2 relies upon and from the writing of the respondent No.2 given separately along with seven cheques signed by him, what possible reasons could weigh with the Court to deny the existence of legally enforceable debt in such glaring circumstances. 25. Considering the fact that the complainant maintains his books of account, coupled with the fact that the respondent No.2 had merely refuted on flimsy ground of his having transacted with witness Jagdishbhai and not with the complainant, has failed to discharge the burden which had shifted upon him. It is to be noted that the respondent No.2 has admitted his signature on the impugned cheque. At no point of time, the cheque has been disputed Once this fact is acknowledged that the signature on the cheque is that of the respondent No. 2-accused, section 139 of the Negotiable Instruments Act would mandate the presumption that the cheque concerns a legally enforceable debt or liability. Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f his having accepted the amount of ₹ 22.50 lakh from the complainant and it also declared the issuance of seven cheques of particular dates towards such legally enforceable debt. If it was an understanding between the parties qua issuance of fresh cheques, with an ostensible reason of old cheques having washed away, those are the non-issues. This Court cannot be oblivious of the fact that section 138 of the Negotiable Instruments Act has been made a penal provision not only for the cheques to give acceptability in the transaction, but it is the economic blood-line of the country and, therefore, the law makers have made the special rules of evidence by introducing sections 118 and 139 of the Negotiable Instruments Act. 30. The trial Court has committed a serious error by not discharging its obligation of recognizing the evidentiary value and not appreciating the positive evidence which led to the reasonable proof of legally enforceable debt existing on the side of the original complainant. 8. Assailing the judgment and order so passed by the High Court, learned counsel for the accused-appellant has contended that the impugned judgment is contrary to the principles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complainant. The learned counsel has contended that in the given circumstances, the judgment and orders of the Trial Court acquitting the accused-appellant of the offence under Section 138 of the NI Act deserve to be restored and the impugned judgment and order dated 08.01.2018 deserves to be set aside. The learned counsel would also submit in the alternative that in any case, the punishment as awarded in this case is much on the higher side and deserves to be reduced. 9. Per contra, the learned counsel for the complainant-respondent No. 2 has duly supported the impugned judgment and has submitted that the accused-appellant has only put forward a vague and unsure defence that has no basis or support and stands falsified from the material on record. The learned counsel has submitted that not only the presumption under Section 139 NI Act has not been dislodged, in fact, the case of the complainant is fortified in view of the unequivocal acknowledgement and undertaking stated by the accused-appellant on the stamp paper; and in the given circumstances, the High Court has rightly convicted him for the offence under Section 138 of the NI Act. 10. Having given anxious consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relating to the offence under Section 138 of the NI Act, particularly where a presumption is drawn that the holder has received the cheque for the discharge, wholly or in part, of any debt or liability. Of course, the accused is entitled to bring on record the relevant material to rebut such presumption and to show that preponderance of probabilities are in favour of his defence but while examining if the accused has brought about a probable defence so as to rebut the presumption, the Appellate Court is certainly entitled to examine the evidence on record in order to find if preponderance indeed leans in favour of the accused. 12. For determination of the point as to whether the High Court was justified in reversing the judgment and orders of the Trial Court and convicting the appellant for the offence under Section 138 of the NI Act, the basic questions to be addressed to are two-fold: as to whether the complainant-respondent No. 2 had established the ingredients of Sections 118 and 139 of the NI Act, so as to justify drawing of the presumption envisaged therein; and if so, as to whether the accused-appellant had been able to displace such presumption and to establish a probabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence of fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him. 139. Presumption in favour of holder ---- It shall be presumed, unless the contrary is proved, that the holder is a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, if any debt or other liability. 14. So far the question of existence of basic ingredients for drawing of presumption under Sections 118 and 139 the NI Act is concerned, apparent it is that the accused-appellant could not deny his signature on the cheques in question that had been drawn in favour of the complainant on a bank account maintained by the accused for a sum of ₹ 3 lakhs each. The said cheques were presented to the Bank concerned within the period of their validity and were returned unpaid for the reason of either the balance being insufficient or the account being closed. All the basic ingredients of Section 138 as also of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roof. 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. 16. On the aspects relating to preponderance of probabilities, the accused has to bring on record such facts and such circumstances which may lead the Court to conclude either that the consideration did not exist or that its nonexistence was so probable that a prudent man would, under the circumstances of the case, act upon the plea that the consideration did not exist. This Court has, time and again, emphasized that though there may not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sideration 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, therefore, the presumptions under Sections 118 and 139 of the Act will not again come to the complainant's rescue. 17. In the case at hand, even after purportedly drawing the presumption under Section 139 of the NI Act, the Trial Court proceeded to question the want of evidence on the part of the complainant as regards the source of funds for advancing loan to the accused and want of examination of relevant witnesses who allegedly extended him money for advancing it to the accused. This approach of the Trial Court had been at variance with the principles of presumption in law. After such presumption, the onus shifted to the accused and unless the accused had discharged the onus by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch cheques being washed out in rainy water and on informing me by the complainant I had informed to the accused. Thereafter, Rohitbhai had given other seven (7) cheques to the complainant in my presence and the deed was executed on ₹ 100/- stamp paper in there is my signature. 18.3 This witness was cross-examined on various aspects as regards the particulars in the writing on the stamp paper and the date and time of the transactions. In regard to the defence as put in the cross-examination, the witness stated as under: I have got shop in National Plaza but in rain no water logging has taken place. It is not true that there had been no financial dealings between me and the accused today. It is not true that I had given rupees ten lacs to the accused Rohitbhai on temporary basis. It is not true that for the amount given to the accused, I had taken seven blank duly cheques also blank stamp paper without signature. It is not true that there was quarrel between me and the accused in the matter of payment of interest. It is not true that even after the payment of Rs. ten lacs and the huge amount of the interest in the matter of interest quarrel was made. It is not true t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lacs fifty thousand only) Dates : (1) 01/4/08, (2) 01/05/08 (3) 01/07/08, (4) 01/08/08 (5) 01/10/08 (6) 01/11/08 (7) 01/12/08 the account of which is 40007. Earliest these cheques were given but due to rainy water logging the said cheques having been washed out (7) cheques have again been given which is acceptable to me. 18.6 The fact of the matter remains that the appellant could not deny his signatures on the said writing but attempted to suggest that his signatures were available on the blank stamp paper with Shri Jagdishbhai. This suggestion is too remote and too uncertain to be accepted. No cogent reason is available for the appellant signing a blank stamp paper. It is also indisputable that the cheques as mentioned therein with all the relevant particulars like cheque numbers, name of Bank and account number are of the same cheques which form the subject matter of these complaint cases. The said document bears the date 21.03.2007 and the cheques were postdated, starting from 01.04.2008 and ending at 01.12.2008. There appears absolutely no reason to discard this writing from consideration. 18.7 One of the factors highlighted on behalf of the appellant is that the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istence of a legally enforceable debt is to be presumed in favour of the complainant. When such a presumption is drawn, the factors relating to the want of documentary evidence in the form of receipts or accounts or want of evidence as regards source of funds were not of relevant consideration while examining if the accused has been able to rebut the presumption or not. The other observations as regards any variance in the statement of complainant and witness; or want of knowledge about dates and other particulars of the cheques; or washing away of the earlier cheques in the rains though the office of the complainant being on the 8th floor had also been of irrelevant factors for consideration of a probable defence of the appellant. Similarly, the factor that the complainant alleged the loan amount to be ₹ 22,50,000/- and seven cheques being of ₹ 3,00,000/- each leading to a deficit of ₹ 1,50,000/-, is not even worth consideration for the purpose of the determination of real questions involved in the matter. May be, if the total amount of cheques exceeded the alleged amount of loan, a slender doubt might have arisen, but, in the present matter, the total amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence which is regulatory in nature, while we find that the punishment as regards monetary terms calls for no interference but then, the sentence of imprisonment deserve to be modified. 23.1 In the singular and peculiar circumstances of this case, where the matters relating to 7 cheques issued by the appellant in favour of respondent No. 2 for a sum of ₹ 3 lakhs each are being considered together; and the appellant is being penalised with double the amount of cheques in each case i.e., in all a sum of ₹ 42,00,000/-, in our view, the appellant deserves to be extended another chance to mend himself by making payment of fine, of course, with the stipulation that in case of default in payment of the amount of fine, he would undergo simple imprisonment for a period of one year. 24. Therefore, this appeal is partly allowed in the following terms: The common judgment and order dated 08.01.2018 in R/Criminal Appeal No. 1187/2017 connected with R/Criminal Appeal Nos. 1191/2017 to 1196/2017 by the High Court of Gujarat at Ahmedabad is maintained as regards conviction of the accused-appellant for the offence under Section 138 of the Negotiable Instruments Act, 1881 for dishon ..... X X X X Extracts X X X X X X X X Extracts X X X X
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