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TMI Blog2019 (4) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... ary, 2004. According to the complainant, the amount was repayable within six months. When the complainant presented the cheque on 23 March 2005, it was returned by the bank for insufficiency of funds. The complainant presented the cheque again for realisation on 14 July, 2005 but it was returned with the same result. A notice of demand was issued by the complainant on 10 August, 2005. In response, the appellant-accused denied that there was a legally enforceable debt. In his reply, the appellant stated thus: "4. My client and his wife and your client and his wife had purchased separate house sites in Survey No. 96/3 at Hoaramvuagrahara Village, Krishnarajapuram Hobli, Bangalore on 31.01.2001. All these sites situate adjacent to each other. Your client enticed my client and my client's wife to give power in his favour so that he could pursue the matter of getting housing loan from financial institutions at Bangalore. However your client prepared the power deed incorporating the clauses for sale also. When my client questioned about the inclusion of clauses for sale, your client had stated that it had inadvertently typed and the purpose of power deed is only for obtaining loan and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... October 2010 the High Court allowed the appeal and remitted the matter to the Trial court, having regard to the judgment of this Court in "Rangappa Versus Sri Mohan" (2010) 11 SCC 441. On remand, the Trial court by a judgment dated 5 March 2011 convicted the appellant and sentenced him to undergo imprisonment of one year and to pay a fine of Rs. 7 lakhs out of which an amount of Rs. 6.75 lakhs was directed to be paid to the respondent by way of compensation. The appellant instituted Criminal Appeal No. 245 of 2011 before the Additional Sessions Jude, Bangalore. By a judgment dated 05 March, 2012, the First Appellate Court reversed the conviction and sentence recorded by the Trial court. The respondent thereupon filed a Criminal Appeal before the High Court, being Criminal Appeal No. 861 of 2012. The High Court reversed the judgment of acquittal, recording that while the notice of the appeal was served upon the appellant, he had remained absent. While recording the conviction under Section 138 of the Act, the High Court modified the sentence to the effect that the appellant shall pay a fine of Rs. 5 lakhs which would be paid as compensation to the respondent and, in default, he sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... restoring that conviction has not fallen into error. Section 139 of the Act mandates that it shall be presumed, unless the contrary is proved, that the holder of a cheque received it, in discharge, in whole or in part, of a debt, or liability. The expression "unless the contrary is proved" indicates that the presumption under Section 139 of the Act is rebuttable. Terming this as an example of a "reverse onus clause" the three Judge Bench of this Court in Rangappa (supra) held that in determining whether the presumption has been rebutted, the test of proportionality must guide the determination. The standard of proof for rebuttal of the presumption under Section 139 of the Act is guided by a preponderance of probabilities. This Court held thus: "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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice of demand that was issued by the complainant to the appellant after the cheque had been returned for want of funds, the complainant stated that the appellant had sought a 'financial accommodation' of Rs. 15 Lakhs and paid a sum of Rs. 20,000 (corrected thereafter in a corrigendum). The first appellate court noted in the course of its judgment that while conducting the cross-examination of the accused, the complainant had stated that the accused had demanded a loan of Rs. 15 lakhs, but at that time the complainant had only paid an amount of Rs. 5 Lakhs as a loan for which the accused issued Exhibit P1. This suggestion was specifically denied by the accused. In this context, the first appellate court observed that whether the complainant had furnished a hand loan of Rs. 15 lakhs to the accused as stated in the complaint or whether the complainant had paid Rs. 20 lakhs as mentioned in the legal notice dated 10 August 2004 or whether he had paid an amount of Rs. 5 lakhs as suggested during the course of cross-examination was a matter of serious doubt. If the complainant had paid Rs. 15 lakhs to the accused, the suggestion during the course of cross-examination of having ..... X X X X Extracts X X X X X X X X Extracts X X X X
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