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TMI Blog2021 (2) TMI 962X X X X Extracts X X X X X X X X Extracts X X X X ..... relationship or friendship between them. Complainant-PW.1 also admits about giving of ₹ 5.00 lakh loan to one Sagir Ahmed, who is son of sister of accused, and it is Sagir Ahamed was looks after business of the accused. Complainant-PW.1 also admits that accused has paid a sum of ₹ 1,20,000/- through cheque and against he paid a sum of ₹ 1,92,000/- in March 2008 and April 2008 to his wife. If at all the accused had barrowed the amount in August 2009, then what was the necessity for the accused to give the cheques in the name of wife of the complainant? for what purpose he has given the said cheques?. The initial burden is on the complainant to prove that there is existence of legally recoverable debt or other liability for which said Ex.P1-cheuqe was issued. Simply because a cheque is issued, the accused cannot be automatically held guilt of offence under Section 138 of the N.I.Act. The presumption arises under Section 139 of the Act regarding issue of cheque, is only in respect of holder of cheque that same has been issued for recovery of debt or other liability. There is no dispute about it. But initial burden is on the complainant to prove it. Accused can reb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss box and giving his own defence evidence so as to rebut the presumption ofcourse by preponderance of probabilities. The proof by accused is not beyond reasonable doubt - to rebut the evidence of complainant the accused entered the witness box and has given his own evidence as DW.1. The accused in his evidence states that he is not acquainted with the complainant nor he has given any cheque to complainant. But when his nephew Sagir Ahmed was looking after his transport business, at that time, he had made certain transactions and whenever he came to Gulbarga, the complainant used to visit Sagir Ahmed house. The said cheque was given to Sagir Ahmed by accused as security for the loan borrowed from the complainant. The said amount of ₹ 4.00 lakh was returned, but inspite of that the complainant did not return the cheque. The preponderance of probabilities is tilting in favour of the accused. The accused has also brought on record such facts, material and circumstances in the cross-examination of PW.1 which could be reasonably said as accused proved a probable defence. Therefore, the burden to rebut the evidence of complainant and presumption in favour of complainant had bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;s banker, but it was dishonoured and returned with an endorsement that 'payment stopped by the drawer'. Then legal notice was issued by the complainant demanding payment of cheque amount. The accused neither replied to notice nor repaid the amount. Hence, complaint came to be filed for the offence punishable under Section 138 of the N.I.Act. b) The accused appeared. After recording of the plea of the accused, the complainant got examined himself as PW.1 and got marked five documents as Ex.P1 to Ex.P5. Thereafter, the statement of the accused as required under Section 313 of Cr.P.C. was recorded. Accused denied the incriminating circumstance appearing against him in the evidence of prosecution witness. Then accused himself got examined as DW.1 in support of his defence. After hearing the arguments, the trial Court acquitted accused. 4. Aggrieved by the same, this appeal is preferred by the appellant-complainant on the following grounds: a) that the trial Court has committed an error in observing that complainant has failed to prove his capacity and factum of payment of ₹ 21.00 lakh; b) that the accused has admitted cheque and also signature on it, but t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 139 of the N.I.Act is not rebutted by such defence evidence. The purpose of enacting the said N.I.Act is to be looked into to appreciate the evidence. 10. In support of his arguments, the learned counsel relied on the decision of Hon'ble Supreme Court in case of ICDS LTD vs. Beena Shabeer and Another reported in (2002) 6 SCC 426, wherein at para 10 to 13 it is held as under: 10. The language, however, has been rather specific as regards the intent of the legislature. The commencement of the Section stands with the words Where any cheque . The above noted three words are of extreme significance, in particular, by reason of the user of the word any the first three words suggest that in fact for whatever reason if a cheque is drawn on an account maintained by him with a banker in favour of another person for the discharge of any debt or other liability, the highlighted words if read with the first three words at the commencement of Section 138, leave no manner of doubt that for whatever reason it may be, the liability under this provision cannot be avoided in the event the same stands returned by the banker unpaid. The legislature has been careful enough to reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;ble Supreme Court in case of Bir Singh vs. Mukesh Kumar reported in AIR 2019 SC 2446 wherein at para 16, 36, 37 and 38 it is held as under: 16. The short question before us is whether the High Court was right in reversing the concurrent factual findings of the Trial Court and of the Appellate court in exercise of its revisional jurisdiction. The questions of law which rise in this appeal are, (i) whether a revisional Court can, in exercise of its discretionary jurisdiction, interfere with an order of conviction in the absence of any jurisdictional error or error of law and (ii) whether the payee of a cheque is disentitled to the benefit of the presumption under Section 139 of the Negotiable Instruments Act, of a cheque duly drawn, having been issued in discharge of a debt or other liability, only because he is in a fiduciary relationship with the person who has drawn the cheque. 36. The proposition of law which emerges from the judgments referred to above is that the onus to rebut the presumption under Section 139 that the cheque has been issued in discharge of a debt or liability is on the accused and the fact that the cheque might be post dated does not absolve the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions in Krishna Janardhan Bhat may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it is based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttal presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant. 27. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... saction with Shri Jagdishbhai? In this regard, significant it is to notice that apart from making certain suggestions in the cross-examination, the accused- appellant has not adduced any documentary evidence to satisfy even primarily that there had been some monetary transaction of himself with Shri Jagdishbhai. Of course, one of the allegations of the appellant is that the said stamp paper was given to Shri Jagdishbhai and another factor relied upon is that Shri Jagdishbhai had signed on the stamp paper in question and not the complainant. 19. Hereinabove, we have examined in detail the findings of the Trial Court and those of the High Court and have no hesitation in concluding that the present one was clearly a case where the decision of the Trial Court suffered from perversity and fundamental error of approach; and the High Court was justified in reversing the judgment of the Trial Court. The observations of the Trial Court that there was no documentary evidence to show the source of funds with the respondent to advance the loan, or that the respondent did not record the transaction in the form of receipt of even kachcha notes, or that there were inconsistencies in the stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the NI Act is concerned, apparent it is that the appellant-accused 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 Sections 118 and 139 are apparent on the face of the record. The Trial Court had also consciously taken note of these facts and had drawn the requisite presumption. Therefore, it is required to be presumed that the cheques in question were drawn for consideration and the holder of the cheques i.e., the complainant received the same in discharge of an existing debt. The onus, therefore, shifts on the appellant- accused to establish a probable defence so as to rebut such a presumption. xxx xxx 17. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther argued that the complainant has stated that, in the presence of two persons he had handed over the cheque money to accused. But those two persons before whom the accused is stated to have received the loan amount were not examined. In the cross- examination, the complainant-PW1 clearly admitted that he has got six blank cheques belonging to accused with him. In fact cheque in question was issued along with other cheques as a security for the loan barrowed by the relative of the accused which is admitted by the complainant. The loan amount of his relative was only ₹ 4.00 lakh. But why eight blank cheques were taken as stated by complainant is not forthcoming. The complainant has not produced any Bank account to show that he was having any amount in his account at any time; Issuance of such huge amount/cheque is in violation of Section 269 of Income Tax Act. 13. The learned counsel further argued that Ex.P1-cheque is issued as Proprietor for ADAL Audio Visual, but the said firm is not made as a party. So without making firm as a party, the complaint is not tenable. The learned counsel submitted that the accused has rebutted the presumption by leading his defence evi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erroneously come to a different conclusion on the basis of the documents produced. It is the contention that the said documents have been concocted and created. Admittedly as per the case of complainant itself the cheque has been issued in the year 2008 and it contains the name of the firm then under such circumstances, it cannot be held that the accused has concocted the said documents to over come the liability. 39. In that light as mandated under Section 141 of the NI Act, without making the firm as a party to the proceedings the vicarious liability cannot be fixed on the petitioners- accused. This aspect has not been properly considered by the Court below and have been swayed away by the contention of the complainant. Keeping in view the anatomy of the above said provision of law and analyzing the Section 141 of the NI Act and in view of the larger bench decision of the Hon'ble Apex Court in the case of Aneeta Hada (quoted supra) it is aptly applicable to the present facts of the case. In that light without making the Company a party, the complaint is not maintainable. No doubt the other contentions which have been taken up by the accused has not rebutted the presumpt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under:- 13. It again referred to a decision of this Court in K. Bhaskaran v. Sankaran Vaidhyan Balan and Others [AIR 1999 SC 3762] and made almost a similar observation holding that as the complainant has discharged his initial burden, the onus shifted on the accused to produce rebuttal evidence against the presumption laid down in favour of the complainant stating: Here, the accused has not produced any evidence to discard the testimony of PW-1. Therefore, the presumption is to be drawn in favour of the holder of the cheque, who has received it for discharge of liability in view of the decision of the Hon'ble Supreme Court. 33. But, we may at the same time notice the development of law in this area in some jurisdictions. The presumption of innocence is a human right. [See Narender Singh Anr. v. State of M.P. (2004) 10 SCC 699, Ranjitsing Brahmajeetsing Sharma v. State of Maharashtra and Anr. (2005) 5 SCC 294 and Rajesh Ranjan Yadav @ Pappu Yadav v. CBI through its Director (2007) 1 SCC 70] Article 6(2) of he European Convention on Human Rights provides : Everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 35. Keeping in view the peculiar facts and circumstances of this case, we are of the opinion that the courts below approached the case from a wholly wrong angle, viz., wrong application of the legal principles in the fact situation of the case. In view of the legal position as has been enunciated by this Court in M.S. Narayana Menon (supra) and later cases, we are of the opinion that the High Court should have entertained the revision application. The learned counsel also relied on another decision of this High Court in the case of Veerayya vs. G.K.Madivalar reported in 2012 (3) KCCR 2057 wherein at para 15 and 16 it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contentions taken by both the sides and perused the evidence. 17. The undisputed contention are that a) Ex.P1-cheque is signed by the accused; b) the said cheque was returned with an endorsement stating that the payment stopped by the drawer; c) PW.1- Md.Imtiyaz Ahmed Khan, complainant stated that he has got other six cheques belonging to accused with him which according to him given to him while loan was given to accused; d) Suit filed by the complainant for recovery of loan based on Ex.P1 - cheque in O.S.No.1/2012 came to be dismissed. Against that the complainant has filed RFA No.6066/2013, which is pending before the High Court. e) It is also evident that either in the complaint or in his evidence the complainant has not stated that the date when he has advanced the said hand loan. Simply it is stated that in the month of August 2009 the said loan amount was given. f) The complainant in his written complaint filed before the Court not mentioned whether he has enquired the accused as to why he has issued stop payment instruction to Bank, nor it is stated in the Statutory demand notice that this is the said cheque, which was returned with endorsement stating that the paym ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed his ignorance about the said Sagir Ahmed looking after the business of accused at Gulbarga. Complainant has admitted that accused was running business as Zaag transport. PW.1 has also admitted that in the year 2007 the said Sagir Ahmed had taken ₹ 5.00 lakh loan from him. But he has denied a suggestion that the said Sagir Ahmed has given a blank cheque signed by the accused as a security for the said loan amount. PW.1 has also admitted that the said Sagir Ahmed has repaid the said loan amount. PW.1 has admitted that his wife's name is Haseena Begum and as per his instructions the accused has paid amount of ₹ 1,20,000/- through cheque drawn in the name of his wife on 09.03.2008. Again on 09.04.2008 accused has paid ₹ 1,92,000/- through cheque bearing No.650645 in favour of his wife. But he has denied suggestions. On 09.11.2009 he has received ₹ 75,000/-, on 15.11.2009 he has received ₹ 50,000/-, on 02.12.2009 he has received ₹ 1,50,000/- and on 21.12.2009 he has received ₹ 50,000/- from accused. PW.1 has denied a suggestion that inspite of the loan amount was repaid he has misused the blank cheque which was given as a security for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iven loan amount. Only for the first time in the cross-examination he states on 18.08.2009 he has given loan amount in cash and he himself went to the house of the accused and paid that amount which is not a natural course of conduct of a person in such situation. The two witnesses Mohd.Mukthar and Mohd.Rafi who were stated to be present at the time of giving loan amount, were not examined. Admittedly, the said amount was not withdrawn from any Bank or from his account. PW.1 states that the amount was received by him in respect of the plot sold by him at Solapur. But no records were produced in this regard. Complainant- PW.1 simply states that as himself and accused were doing business, he know accused. There is no separate close relationship or friendship between them. Complainant-PW.1 also admits about giving of ₹ 5.00 lakh loan to one Sagir Ahmed, who is son of sister of accused, and it is Sagir Ahamed was looks after business of the accused. Complainant-PW.1 also admits that accused has paid a sum of ₹ 1,20,000/- through cheque and against he paid a sum of ₹ 1,92,000/- in March 2008 and April 2008 to his wife. If at all the accused had barrowed the amount in A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heques belonging to accused. Why the accused gave money through cheque on different dates to the wife of the complainant. All these circumstances, which are not explained creates doubt about genuiness of the contents of the complaint. PW.1 also admits that sister's son of accused was barrowing of loan amount and he has repaid the said amount. But PW.1 denies that he has misused the cheque given as security for the said loan, though the loan amount was already repaid. It is not that both the appellant and accused were very close friends or relatives or very much acquainted each other. Both are business men. Then how complainant could have advanced such huge amount without any interest to the person who is not acquainted with him is also one of the circumstance goes against the complainant's case. 26. The Hon'ble Supreme Court in the case of K.Subramani vs. K.Damodara Naidu reported in 2014(4) KCCR 3661 has held that complainant has to show to the Court that he had capacity to lend huge amount to the accused. 27. It is to be remembered that the burden to prove the consideration for the cheque lies on the accused. If not rebutted, the presumption is that the cheque w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has contended that it is due to oversight. Therefore, he has sought permission of court to lead evidence to that effect and prayed that he be permitted to rectify that mistake. But the said application came to be rejected by trial Court by order dated 08.11.2012 stating that the complainant cannot be allowed to take 'U' turn to contend that the cheque in question drawn by the accused for and on behalf of ADAL Audio Visual and he cannot now change his contention nor it is his case all along. The trial Court held that at this belated stage, just fill up the lacuna such contention or rectification of such mistake cannot be permitted, when the arguments are already advanced by the complainant. Neither in his complaint nor in his statutory demand notice the complainant has stated anything about the cheuqe being issued by accused on behalf of said proprietorship of the ADAL Audio Visual. This is also one more circumstances creates doubt about complainant's case. 31. Ex.P2 is memorandum issued by the Bank stating that the said cheque was returned as payment stopped by the drawer. Though the complainant has shown in his complaint, list of witnesses to be examined on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cheque was returned dishonoured, whether he enquired the accused in this regard and demanded accused to return the amount nor he has mentioned the reason for dishonour of the cheque. Complainant has stated that accused has committed offence under the N.I.Act, which appears to have been inserted and written subsequently after the legal notice is typed, then by handwriting in ink same is inserted without there being any signature or initial of any person for adding such sentences in ink at para-3 of Ex.P.3-Notice. When the other entire matter was typed, why and when that sentence was added in ink is not forthcoming. It is stated that the amount was not paid with interest @ 12%. So it appears Ex.P3 demand notice is not in accordance with the mandatory requirement of the notice under Section 138 of the N.I.Act, This is also is one of the factor in favour of the accused and against the complainant. 33. Admittedly, the complainant has filed a Civil suit in O.S.No.1/2012. As submitted by the counsel for the accused, the said suit came to be dismissed. This is not disputed by complainant's side. This High Court in decision reported in 2012 (3) KCCR 2057 in the case of Veerayya vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be stopped . Accused has further deposed that the complaint allegations are all false. He is not at all liable to pay amount. 36. The cross examination of accused by complainant side indicates that most of the cross- examination evidence is regarding denial of case of complainant. The case of defence is not denied by complainant in cross examination. Therefore, it amounts admission on the part of complainant. In the cross-examination accused has stated that he do not know complainant, and he is not having acquaintance with complainant. His evidence that Sagir Ahmed has made transaction with complainant is also not denied by complainant side. Accused evidence that he had given said cheque to Sagir Ahmed is not denied. Accused evidence that as complainant did not return the cheque to Sagir Ahmed which was given as security, so gave intimation to the Bank to stop payment , as he is not liable to pay any amount, the said evidence that he is not liable is also not denied in the cross- examination. Simply it is suggested that whether any complaint was given by accused or any notice was issued to complainant, to that the accused has stated that he has not given any complaint. Accu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;s side. The complainant himself admits in his cross examination that Ex.P1 - Cheque was received by him only as a security for the loan barrowed. Therefore, presumption that the cheque was issued for legally recoverable debt or liability or there is any existence of legally recoverable debt or liability stood rebutted by bringing on record, evidence in this regard by cross examination of complainant and also by defence evidence of accused. 39. Therefore, in view of above said discussion and peculiar facts and circumstances of the case, which clearly indicates that the preponderance of probabilities is tilting in favour of the accused. The accused has also brought on record such facts, material and circumstances in the cross-examination of PW.1 which could be reasonably said as accused proved a probable defence. Therefore, the burden to rebut the evidence of complainant and presumption in favour of complainant had been discharged by the accused to prove that the cheque was not issued in discharge of any legally recoverable debt or other liability or there exist any debt or liability by the accused to pay the said amount mentioned in the cheque to the complainant. 40. The d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earlier decision in Kumar's case (supra). In those cases the accused has not lead any evidence to rebut the presumption and cross-examination prosecution is not sufficient to rebut the presumption. But here the evidence, both in examination-in-chief and cross examination of complainant coupled with rebuttal evidence adduced by the accused clearly indicates that the presumption of consideration has been rebutted by the respondent- accused even on the basis of the evidence laid by the complainant alone. Apart from it the complainant has not denied defence evidence which is probable defence of accused. The accused has lead legally admissible defence evidence to rebut presumption if any in favour of complainant. 42. In view of the principles stated in the above referred decisions if the facts and evidence in this case are considered, in my considered view the trial Court is justified in acquitting the accused. The trial Court has raised proper points for consideration by considering the relevant provisions under the N.I.Act and also decisions stated thereon and also discussed oral and documentary evidence in detail and came to conclusion that the accused has rebutted presumption ..... X X X X Extracts X X X X X X X X Extracts X X X X
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