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TMI Blog2022 (9) TMI 424X X X X Extracts X X X X X X X X Extracts X X X X ..... cused herein was known to him for the past four (04) years and due to friendship developed between them, the accused requested the complainant to arrange for a hand loan of Rs.50,000/-, Rs.60,000 and Rs.90,000/- in different spells. The complainant accordingly provided the said amounts as hand loan to the accused. Again, the accused approached him on 03.12.2013 and requested the complainant for a hand loan of Rs.3,00,000/- for his business urgently. The complainant informed the accused that he was not having the said amount of Rs.3 lakhs, but was having only an amount of Rs.2,43,000/- for which the accused accepted to receive the same and also promised to repay the same within one or two months with interest @ 2% per month. But, the accused did not repay the said amount within the agreed time; but, however, he paid interest thereon for a period of three (03) months and failed to pay any amounts thereafter. 3.1 On persistent demands made by the complainant, the accused issued a cheque bearing No.013812, dated 14.08.2014, drawn on ICICI Bank, M.G. Road, Hyderabad Branch for an amount of Rs.2,43,000/- towards discharge of legally enforceable debt. 3.2 The complainant presented the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complainant but did not advert to the plea of presumption as mandated under Section 139 of N.I. Act; the Trial Court went on to say that no single scrap of paper was produced by the plaintiff to show that he gave money to the accused; the accused asserted that he repaid the amount; it was the specific case of the complainant that on earlier occasion the accused had requested him for a hand loan of Rs.50,000/-, Rs.60,000/- and Rs.90,000/- at different spells and, in fact, the accused had repaid the said amount to the complainant during the last two years; the assertion of the accused was that he repaid the amount and the complainant misused the cheque issued at that time; if it was the case of accused, he ought to have issued a reply notice to the statutory legal notice issued by the complainant, and in the absence of the same, it could not be said that the accused had discharged his burden; it was the duty of the accused to adduce evidence to show that he repaid the amount related to the present transaction; therefore, the Courts below have not considered the decision of Hon'ble Apex Court in Rangappa vs. Mohan AIR 2010 SC 1898 properly; in view of presumption under Section 139 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e result, accused is found not guilty of the offence under Section 138 of N.I. Act and he is acquitted for the said offence under Section 255(1) of Cr.P.C. Bail bonds of accused shall stand cancelled." From the above, it can be seen that no reasoning was given by the Trial Court in coming to the said conclusion. 15. The Appellate Court observed that prima facie burden was on the shoulders of complainant to prove that the accused borrowed money of Rs.2,43,000/-, and towards discharge of the same, the accused had issued Cheque (Ex.P.1), and subsequently the same was dishonoured with an endorsement "insufficient funds"; and noted that no single scrap of paper was produced by the complainant to show that he gave money to accused. Except the said cheque in question, there was no other document available on record to show that he gave money to the accused, and the accused gave cheque subsequently. In the cross-examination, PW.1 categorically admitted that apart from the cheque he has no document in support of the said cheque for the claim that he made as legally enforceable debt or liability. PW.1 further admitted in his cross-examination that he was an Advocate by profession and got l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contrary view would render S. 138 a dead letter and will provide a handle to persons trying to avoid payment under legal obligations undertaken by them through their own acts which in other words can be said to be taking advantage of one's own wrong. ..." 17. Section 118 of the N.I. Act provides presumption as to the negotiable instruments as under : "118. Presumptions as to negotiable instruments :- Until the contrary is proved, the following presumptions shall be made : (a) of consideration : that every negotiable instrument was made or drawn for consideration, and that every such instrument when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration; ... ..." 18. Sections 139 of N.I. Act provides presumption in favour of holder of a negotiable instrument as under : "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." 19. In Rangappa v. Mohan case (1 supra), the Hon'ble Apex Court held th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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." 21. Learned counsel for the complainant also relied upon the latest judgment of the Hon'ble Apex Court in Oriental Bank of Commerce v. Prabodh Kumar Tewari Crl.A. No.1260 of 2022 dated 16.08.2022, wherein it was held that: "15. A drawer who signs a cheque and hands it over to the payee, is presumed to be liable unless the drawer adduces evidene to rebut the presumption that the cheque has been issued towards payment of a debt or in discharge of a liability. The presumption arises under Section 139" 22. Coming to the facts in the present Revision, the accused herein also failed to give reply to the statutory notice given by the complainant under Section 138 of N.I. Act which would lead to an inference that there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accused has come up with a story that the cheque was given to the complainant long back in 1999 as a security to a loan; the loan was repaid but the complainant did not return the security cheque. According to the accused, it was that very cheque used by the complainant to implicate the accused. ... ... ... 11. In light of the above reasoning, we find that the learned High Court was misplaced in putting the burden of proof on the complainant. As per Section 139, the burden of proof had shifted on the accused which the accused failed to discharge. Thus, we find merit in this appeal." 24. In the present case also, both the Courts below had placed the burden of proof on the complainant to show that it was the complainant who had to establish that there was a legally enforceable debt, even though the accused had not disputed the issuance of cheque to the complainant. As it is not the correct interpretation of law (as stated by the Hon'ble Apex Court in the above cited cases), and though the above decisions are cited before the Courts below, they failed to correctly interpret the provisions of law and failed to appreciable the judgments of the Hon'ble Apex Court in correct perspectiv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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