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TMI Blog2021 (1) TMI 1214X X X X Extracts X X X X X X X X Extracts X X X X ..... legally enforceable debt or liability, unless the contrary is proved. The petitioner did not prove the contrary fact against the fact of issuance of cheque for discharging the debt and return of the cheque for the reason that there was no funds in the account of the petitioner. With regard to burden of proof, it is said that whereas the prosecution must prove the guilt of an accused beyond all reasonable doubt, the standard of proof to prove a defence on the part of an accused is preponderance of probability. Inference of preponderance of probability can be drawn not only from the materials brought on record by the parties but also by reference to circumstances upon which he relies. When there is no material to show that the respondent is a regular income tax assessee and he has been regularly filing income tax returns, this Court is of the considered view that on the basis of Ex.P.7 one cannot come to the conclusion that the respondent has sufficient means to lend a sum of 5,00,000/- to the petitioner, especially when the petitioner said that he had no prior acquaintance with the respondent - It is seen from the evidence of PW-1 that he did not know the petitioner prior to lendin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Negotiable Instruments Act, 1881 alleging that on 28.09.2014, the petitioner borrowed a sum of ₹ 5 lakhs from him and promised to repay the amount on 29.10.2014. The petitioner issued a cheque for ₹ 5 lakhs drawn on Karnataka Branch, Gandhiji Road, Erode for discharging his liability. The respondent presented the cheque for collection on 06.11.2014 through State Bank of India, Erode Branch. The cheque was returned as "Funds insufficient" on 11.11.2014. The petitioner issued a cheque without sufficient amount in his account. Therefore, the respondent issued a legal notice on 17.11.2014 calling upon the payment of ₹ 5 lakhs within 15 days from the date of receipt of the notice. The petitioner received the notice on 18.11.2014 and gave a reply dated 18.11.2014 with false allegations. Since, he failed to pay the cheque amount within 15 days, the complaint was filed. 3. After the petitioner entered appearance, he was questioned with regard to the offence alleged against him. He denied the offence and the trial was commenced. During the trial, the respondent was examined as PW.1 and Exs.P.1 to P.7 had been marked. On the side of the petitioner DW-1 to DW-4 were exam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner relied on the judgment reported in (2009) 14 SCC 398 [M.D.Thomas Vs. P.S.Jaleel and Another] for the preposition that service of statutory notice on the wife of the petitioner is not a prompt service. He relied on the ruling reported in (2015) 1 SCC 99 [K.Subramani Vs. K.Damodara Naidu] for the preposition that unless the source of income is proved, lending of loan cannot be presumed. He also relied on the judgments reported in (2008) 4 SCC 54 [Krishna Janardhan Bhat] and 2019 (6) Scale 137 [Basalingappa Vs. Mudibasappa] for the preposition that the accused is not required to prove his case beyond reasonable doubt but it is enough if he proves his case by preponderance of probability. 6.On the other hand, the learned counsel for the respondent submitted that the Income Tax returns shows that the respondent has capital account worth ₹ 20 lakhs and above. The case of the petitioner with regard to the chit transaction is false and not proved by any acceptable evidence. In fact there is no whisper about the chit transaction in the reply notice. When the petitioner said that he did not know the respondent, how did he know the son of the respondent and examined him as a witn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,000/-. The cheque in question along with other cheque were given as security to Satyan. The petitioner also stated in his evidence about subscribing the chit run by Sathyan and giving a cheque in question as security for the chit transaction. He also admitted his signature in the cheque. DW-2, the son of respondent, was examined to show that the cheque was issued with regard to the chit transaction and also to show that the respondent was not doing any other business except the textile business. Certain receipts were shown to him to show that those receipts were given in the chit transaction. But, he denied those receipts and said that he did not write those receipts. The account statement and cheque issue register with regard to the cheque in person were marked as Exs.D.1 and D.2 through D.W.1 - Manager of the Karnataka Bank, Ex.D.3 is produced to show the deposit of amounts in the account of Sathyan by the petitioner towards chit transaction. 10.On the side of the respondent he was examined as PW.1. The returned cheque was marked as Ex.P.1.Return memo, advocate notice, postal receipt, acknowledgement card, reply notice and income tax statement of the respondent are marked as Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said provision has been inserted to 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. The learned counsel for the petitioner relied on the rulings reported in (2010) 11 SCC 441 [Rangappa Vs. Sri Mohan] and the judgment of the Supreme Court of India in Crl.A.No.636 of 2019 dated 09.04.2019 in Basalingappa Vs. Mudibasappa case for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent was asked as to how did he know the petitioner, he replied that he knew the petitioner through one Rajendran. The said Rajendran is not his relative and he did not know the address of Rajendran. He would further state that the petitioner asked ₹ 5,00,000/- 15 days prior to 28.09.2014. He had ₹ 5,00,000/- in the form of savings and he gave ₹ 5,00,000/- to the petitioner on 28.09.2014 at 4.00 p.m. After receiving the money, the petitioner gave him the cheque. Curiously, he stated that he did not know the reason for borrowal of this amount by the petitioner. He stated that he had mentioned in the notice and in the complaint about the reason for borrowing. However nothing is said about the reason for the borrowing, except saying that the petitioner borrowed a sum of ₹ 5,00,000/-. Though he denied the suggestion that he had no means to pay ₹ 5,00,000/- to the petitioner, he did not produce any other acceptable evidence apart from his oral evidence, to show that he had means to lend sum of ₹ 5,00,000/- to the petitioner. He stated that he lent a sum of ₹ 5,00,000/- to the petitioner only on the basis of the cheque and he did not receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n hand, the notice was not served on the petitioner but served on his wife. The ratio of this judgment squarely applies to the facts and circumstances of the case. The Learned Counsel for the respondent has not produced any authority which has taken contrary decision on this point. Therefore it has to be necessarily held that notice was not served properly on the petitioner in terms of Clause (b) of proviso to Section 138 of Negotiable Instruments Act and the conviction of the petitioner cannot be sustained. 18.Both the Trial court and the Appellate court have not considered these vital aspects while proceeding to dispose the case and heavily placed reliance on the presumption under section 139 of the Negotiable Instruments Act, without minding that this provision merely raises a presumption in favour of a holder of the cheque that the same has been issued for discharge of any debt or other liability. However, this presumption does not extend to the existence of a debt also. Existence of a legally enforceable debt is not a matter of presumption under section 139 of Negotiable Instruments Act. In view of the reasons stated above, it could be gathered that the respondent has miserab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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