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TMI Blog2022 (1) TMI 1285X X X X Extracts X X X X X X X X Extracts X X X X ..... tion under the law and concept of reverse burden. In case of MS NARAYANA MENON @ MANI VERSUS STATE OF KERALA ANR. [ 2006 (7) TMI 576 - SUPREME COURT] , the Court considering the issue of presumption under the NI Act held that the Court needs to presume the negotiable instrument for consideration unless existence of consideration is disproved. It has further held that unless, on consideration of matter before it, the Court either believes that the consideration does not exist or considers the non-existence of the consideration so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that the consideration does not exist. The Court held that the initial burden of proof is on the accused to rebut the said prosecutions by raising a probable defence. The burden of proof on the accused is not heavy. It need not disprove the prosecution s case in its entirety beyond reasonable doubt. As the essential ingredient of Section 138 are of the drawing of the cheque by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o arrange for cash of Rs. 20 lakhs and as the complainant had cordial terms, the said amount was lent. The respondent promised the same to be repaid in six months period. When demanded back, cheque of Rs. 20 lakhs was drawn from the State Bank of India having its branch at Prahaladnagar, Ahmedabad. This when deposited, was dishonoured and was returned to the appellant with an endorsement fund insufficient on 02.04.2014. 3.2. A legal notice was issued on 11.04.2014 which was within the prescribed period of limitation. Upon the service of notice, a reply through the advocate has been given by the respondent. He agreed of having accepted this amount. However, the same has not been paid. Therefore, the complaint came to be filed under Section 138 of the N.I.Act, and the same was registered as Criminal Case No.4023 of 2014. 3.3. The complainant and witnesses were examined and various documents had been exhibited. Eventually, the trial Court acquitted the respondent on the ground that the cheque was not given for a legally enforceable debt. Not only the complainant had made a transaction through the bank, he had also shown this amount in the Income Tax return and yet, the Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 391 cannot be exercised to fill up the lacuna. According to complainant, the procedure stipulated under Section 138 of the N.I. Act is mandatory. After confessing the legal debt and liability to the tune of Rs. 40 lakhs, it is not open to the respondent to cover up anything. 4.3. The Criminal Case No. 4023 of 2014 for a limited purpose was remanded back to the Trial Court concerned to complete the process within a period of eight (8) weeks from the date of receipt of copy of the order. It was directed to send back the entire record to this Court to proceed with the main appeal. 5. The background of this matter, as mentioned, is that the appellant preferred a complaint being Criminal Case No. 4023 of 2014 before the Additional Chief Judicial Magistrate and CBI Court No. 2, Ahmedabad (Rural) on the ground of dishonour of a cheque bearing no. 877828 for an amount of Rs.20 lakh, drawn on State Bank of India on 17.03.2014 from the Account No. 63023186218 and the same when was presented for payment on 02.04.2014, it returned with an endorsement insufficient funds . The demand notice was issued by the appellant and a reply was received from respondent on 25.04.2014. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the said sum of Rs.4.09/- lakh (rounded off) with contemporaneous documents has been held by the trial Court to have been proved. It is to be noted that the applicantaccused, though, specifically produced vide Exhibits-41 and 42, the application of tendering the second reply to the demand notice dated 19.05.2014 and the R.P.A.D. slip, the trial Court had chosen to merely record this application and has not given any exhibit number to the same. Surprisingly, it has mentioned in the Rojnama of the said documents having been accepted, however, no documents have been exhibited. The original record is also examined and this Court does not find any reference of having exhibited those documents produced vide application Exhibit-42. The trial Court simply record the said application and vide Exhibit- 43, the closure pursis of the applicant-accused is accepted, stating that he did not want to adduce any further evidence either in writing or orally. 6.2 As per the Rojnama dated 18.06.2014, the application, which has been tendered for producing the additional evidence being the documents, Mark 41/1 and Mark 41/2, has been allowed and respectively the second reply dated 19.05.2014 to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce when reversible by reason of error, omission irregularity. (1) Subject to the provisions herein before contained, no finding, sentence or order passed by a Court of competent jurisdiction shall be reversed or altered by a Court of appeal, confirmation or revision on account of any error, omission or irregularity in the complaint, summons, warrant, proclamation, order, judgment or other proceedings before or during trial or in any inquiry or other proceedings under this Code, or any error, or irregularity in any sanction for the prosecution, unless in the opinion of that Court, a failure of justice has in fact been occasioned thereby. (2) In determining whether any error, omission or irregularity in any proceeding under this Code, or any error, or irregularity in any sanction for the prosecution has occasioned a failure of justice, the Court shall have regard to the fact whether the objection could and should have been raised at an earlier stage in the proceedings. 6.7 In RAJESWAR PRASAD MISRA (Supra), the Apex Court has held that the additional evidence may be necessary for a variety of reasons, but, the Courts should not permit what the Legislature has refrained from d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court rejected the prayer on the ground that it did not consider it expedient in the interests of justice to open a new vista of evidence in view of the fact that the offence had taken place six years back. The mere fact that six years had elapsed, for which time-lag the prosecution was in no way responsible, was no good ground for refusing to act in order to promote the interests of justice in an age when delays in the Court have become a part of life and the order of the day. Apart from the fact that the alleged lacuna was a technical lacuna in the sense that while the opinion of the Mint Master had admittedly been placed on record it had not been formally proved the report completely supported the case of the prosecution that the gold was of the specified purity. To deny the opportunity to remove the formal defect was to abort a case against an alleged economic offender. Ends of justice are not satisfied only when the accused in a criminal case is acquitted. The Community acting through the State and the Public Prosecutor is also entitled to justice. The cause of the Community deserves equal treatment at the hands of the Court in the discharge of its judicial functions. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;fair trial' is crucifixion of human rights. It is ingrained in the concept of due process of law. While emphasizing the principle of 'fair trial' and the practice of the same in the course of trial, it is obligatory on the part of the Courts to see whether in an individual case or category of cases, because of non-compliance of a certain provision, reversion of judgment of conviction is inevitable or it is dependent on arriving at an indubitable conclusion that substantial injustice has in fact occurred. The Apex Court, further, held and observed as under: 39. The question posed by us fundamentally relates to the noncompliance of such interdict. The crux of the matter is whether it is such a substantial interdict which impinges upon the fate of the trial beyond any redemption or, for that matter it is such an omission or it is such an act that defeats the basic conception of fair trial. Fundamentally, a fair and impartial trial has a sacrosanct purpose. It has a demonstrable object that the accused should not be prejudiced. A fair trial is required to be conducted in such a manner which would totally ostracise injustice, prejudice, dishonesty and favouritism. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... At this stage, when the request is being made for allowing to prove the second notice dated 19.05.2014, which also confirms the figure of the prosecution of having lent the amount of Rs.20/- lakh, not accepting the same on the ground that the same is an attempt to fill-up the lacunae would be an error on the part of the Court, for the reason that an attempt had already been made on the part of the applicant-accused before the trial Court to get the same produced. It is different that at that stage, the learned Advocate, who appeared before the trial Court, could have been more vigilant, careful and ought to have ensured that the documents are duly exhibited. However, for the error of the lawyer, the party cannot suffer, which is a trite law. And therefore, this Court is of the opinion that the requirement of justice would demand, that an opportunity be availed to the applicant-accused that documents are proved in accordance with law and be accorded as additional evidence and as due opportunity also shall have to be given to the other side to cross-examine the person, who proves those documents and if necessary, to adduce further evidence in light of this evidence. Therefore, the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to the conclusion other than what has been arrived at. 6.2. As far as the first point of validity of the notice is concerned, according to the respondent, it is animus notice under the provisions of the Negotiable Instruments Act, once it has proved that some amount of money had been paid and yet, the notice issued is for a different amount than what is due, payment sought since is in excess of the amount due, burden of accused is discharged. It is further emphasized that part payment has already been made by way of deposit of the cheque and, therefore, it is a reverse burden, according to the appellant which the respondent needs to discharge. 7. It appears that both the documents have been exhibited, however, the prosecution has chosen not to adduce any further evidence. 8. The two vital questions which arose in this matter are firstly needed to be addressed. 8.1. The first question is as to whether this is a case where the Appellate Court is required to exercise the discretion because of miscarriage of justice in case of acquittal, whether it enjoys full power of review evidence? And secondly, whether the notice issued is invalid in wake of the part payment made by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e trial Judge as to the credibility of the witnesses; (2) the presumption of innocence in favour of the accused, a presumption certainly not weakened by the fact that he has been acquitted at his trial; (3) the right of the accused to the benefit of any doubt, and (4) the slowness of an appellate Court in disturbing a finding of fact arrived at by a Judge who had the advantage of seeing the witnesses. 6. The appellant relies upon certain observations of this Court in the case of Abinash Chandra Bose (2). The accused in that case was prosecuted under s. 409, Indian Penal Code for Misappropriating an amount belonging to his client who was the complainant. Prosecution was based upon a letter said to be written by him which he stated was a forgery. No expert was examined by the complainant and the accused was acquitted. The High Court set aside the acquittal and ordered a retrial. It was held by this Court that this was against all wellestablished rules of criminal jurisprudence that an accused person should not be placed on trial for the same offence more than once, except in very exceptional circumstances . Holding that if the High Court did not think that the appreciation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ans every one of the appeals (no matter which) men- tioned in the thirtyfirst Chapter of the Code. Section 417(3) is in that Chapter and S. 428 clearly applied to the appeal which was in the High Court. It only remains to determine the limits (if any) of the jurisdiction and power of the appellate Court (here the High Court) in ordering additional evidence and whether the limits so determined were exceeded by the High Court in the present case. 8. Mr. Chakravarti contends that the discretion under s. 428 is subject to the same conditions as those in s. 423 and which were laid down in Abinash Chandra Bose's case(1). He lays special emphasis on the condition that the prosecution should not be given a second chance to fill up the gaps in its case. He submits that this has been done here. Mr. Sarjoo Prasad on the other hand explains the Abinash Chandra Bose's case with the aid of Ukha Kolhe's case(1) and submits that in the latter, this Court gave an exhaustive list of circumstances in which an order for retrial can be made and indicated that in cases falling outside those circumstances, the appellate Court has a discretion to order additional evidence, if considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de discretion is conferred on appellate Courts, the limits of that Court's jurisdiction must+ obviously be dictated by the exigency of the situation and fair play and good sense appear to be the only safe guides. There is, no doubt some analogy between the power to order a retrial ind the power to take additional evidence. The former is an extreme step approximately taken if additional evidence will not suffice. Both actions subsume failure of justice as a condition precedent. There the resemblance ends and it is hardly proper to construe one section with the aid of observations made by this Court in the interpretation of the other section. 10. Additional evidence may be necessary for a variety of reasons which it is hardly necessary (even if it was possible) to list here. We do not propose to do what the Legislature has refrained from doing, namely, to control discretion of the appellate Court to certain stated circumstances. It may, however, be 'said that additional evidence must be necessary not because it would be im- possible to pronounce judgment but because there would be failure of justice without it. The power must be exercised sparingly Sup./165--13 and only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Court held that the initial burden of proof is on the accused to rebut the said prosecutions by raising a probable defence. If he discharges the said burden, the onus thereafter shifts on the complainant to prove the same and whether the initial burden has been discharged by the accused is a question of fact. The burden of proof on the accused is not heavy. It need not disprove the prosecution s case in its entirety beyond reasonable doubt. 39. A presumption is a legal or factual assumption drawn from the existence of certain facts. 40. In P. Ramanatha Aiyar's Advanced Law Lexicon, 3rd edition, at page 3697, the term 'presumption' has been defined as under: A presumption is an inference as to the existence of a fact not actually known arising from its connection with another which is known. A presumption is a conclusion drawn from the proof of facts or circumstances and stands as establishing facts until overcome by contrary proof. A presumption is a probable consequence drawn from facts (either certain, or proved by direct testimony) as to the truth of a fact alleged but of which there is no direct proof. It follows, therefore that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists . Therefore, the rebuttal does not have to be conclusively established but such evidence must be adduced before the court in support of the defence that the court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of reasonability being that of the prudent man . 42 The court, however, in the fact situation obtaining therein, was not required to go into the question as to whether an accused can discharge the onus placed on him even from the materials brought on records by the complainant himself. Evidently in law he is entitled to do so. 43. In Goaplast (P) Ltd. v. Chico Ursula D'Souza and Another [(2003) 3 SCC 232], upon which reliance was placed by the learned counsel, this Court held that the presumption arising under Section 139 of the Act can be rebutted by adducing evidence and the burden of proof is on the person who want to rebut the presumption. The question which arose for consideration therein was as to whether closure of accounts or stoppage of payment is sufficient ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accused, he is not required to discharge that burden by leading evidence to prove his case beyond a reasonable doubt 48. In Kali Ram v. State of Himachal Pradesh [(1973) 2 SCC 808], Khanna, J., speaking for the 3- Judge Bench, held: One of the cardinal principles which has always to be kept in view in our system of administration of justice for criminal cases is that a person arraigned as an accused is presumed to be innocent unless that presumption is rebutted by the prosecution by production of evidence as may show him to be guilty of the offence with which he is charged. The burden of proving the guilt of the accused is upon the prosecution and unless it relieves itself of that burden, the courts cannot record a finding of the guilt of the accused. There are certain cases in which statutory presumptions arise regarding the guilt of the accused, but the burden even in those cases is upon the prosecution to prove the existence of facts which have to be present before the presumption can be drawn. Once those facts are shown by the prosecution to exist, the Court can raise the statutory presumption and it would, in such an event, be for the accused to rebut the presumption. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not inspire confidence or meet standard of preponderance of probability. In absence of any other relevant material, the High Court did not err in discarding appellants defence and upholding onus imposed upon them in terms of Section 118 and Section 139 of the NIA. It held that the provisions of NIA envision a single window for criminal liability for dishonour of cheque as well as civil liability for realization of cheque amount. There needs to be a consistent approach towards awarding of compensation and unless there exist special circumstances, Courts should uniformly levy fine up to twice cheque amount along with simple interest at the rate of 9% per annum. The respondent was held to be entitled to receive cheque amount of Rs. 11.20 lakhs which appellant has already deposited with the Registry. 12. Having given our thoughtful consideration to the rival submissions, we do not find any valid ground to interfere with the impugned judgment. It is true that the High Court would not reverse an order of acquittal merely on formation of an opinion different than that of the trial Court. It is also trite in law that the High Court ought to have compelling reasons to tinker with an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discharged the onus by bringing on record such facts and circumstances as to show the preponderance of probabilities tilting in his favour, any doubt on the complainant's case could not have been raised for want of evidence regarding the source of funds for advancing loan to the appellantaccused .. 15. Once the 2nd Appellant had admitted his signatures on the cheque and the Deed, the trial Court ought to have presumed that the cheque was issued as consideration for a legally enforceable debt. The trial Court fell in error when it called upon the Complainant Respondent to explain the circumstances under which the appellants were liable to pay. Such approach of the trial Court was directly in the teeth of the established legal position as discussed above, and amounts to a patent error of law. 19. Considering the fact that there has been an admitted business relationship between the parties, we are of the opinion that the defence raised by the appellants does not inspire confidence or meet the standard of preponderance of probability . In the absence of any other relevant material, it appears to us that the High Court did not err in discarding the appellants defence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Additional Senior Civil Judge and Additional Chief Judicial Magistrate in seven criminal cases wherein one pertained to the offence under Section 138 of the Negotiable Instruments Act, 1881 for dishonour of 7 cheques in the sum of Rs. 3 lakhs each. The High Court had disproved the acquittal of the appellant while holding him guilty of offence under Section 138 of the NIA and awarded the punishment of simple imprisonment for a period of 1 year with fine to the extent of double the amount of cheque (i.e. a sum of Rs. 6 lakhs) with default stipulation of further imprisonment for a period of 1 year in each case and, out of the amount payable as fine, the complainant was ordered to be compensated to the tune of Rs. 5.5. lakhs in each case. The Apex Court found the defence raised by the accused not probable. The accused had states that the money was given as a hand loan by his friend. The notices were given prior to the filing of the complaint in relation to all the seven cheques, four of which had not been replied to. Either on account of insufficiency of the funds or because he has closed account that the cheques could not be realized. This cumulatively led the Court to conclud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of the complainant. According to the learned counsel, the accused-appellant has established his bonafide defence that he had a financial transaction with Shri Jagdishbhai in the past; that he gave 7 blank cheques to Shri Jagdishbhai and signed on a stamp paper as security against such transaction; and that such cheques and stamp paper were sought to be misused by the 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 pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to remind the Appellate Court that an accused is presumed to be innocent unless proved guilty beyond reasonable doubt and a judgment of acquittal further strengthens such presumption in favour of the accused. However, such restrictions need to be visualised in the context of the particular matter before the Appellate Court and the nature of inquiry therein. The same rule with same rigour cannot be applied in a matter 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t promissory note, bill of exchange or cheque was duly stamped; (g) that holder is a holder in due course----that the holder of a negotiable instrument is a holder in due course; Provided that, where the instrument has 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 provisions of this Act ,be punished with imprisonment for [a term which may be extended to two years], or with fine which may extend to twice the amount of the cheque, or with both: *** *** *** is that the accused-appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble 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 in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the defendant-accused cannot be expected to discharge an unduly high standard of proof. 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on to the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arising under Sections 118 and 139. 21. The accused has also an option to prove the nonexistence of consideration 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were made acquaintance with each other. The accused had necessity of money in his business, in my presence, had demanded Rs.22,50,000/- (Rupees twenty two lacs fifty thousandly) on temporary basis. And thereafter, the complainant from his family members by taking in piecemeal had given to the accused in my presence. Thereafter, on demanding the money by the complainant, the accused had given seven (7) cheques to the complainant in our presence but such 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 Rs. 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 ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under : Today the executor I Rohit Patel Ranchhodray Masala is a partner. Due to the financial difficulties having been arised, I have taken Rs.22,500,000/- (Rupees twenty two thousand fifty thousand only- sic) from my group which are to be paid to Shashimohan Goyanka. With reference to that today I have given seven (7) cheques of Corporation Bank, Alkapuri Branch bearing No. 763346 to 762252 amounting to Rs. 22,50,000/- (Rupees twenty two 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd his witness, or that the witness of the complaint was more in know of facts etc. would have been relevant if the matter was to be examined with reference to the onus on the complaint to prove his case beyond reasonable doubt. These considerations and observations do not stand in conformity with the presumption existing in favour of the complainant by virtue of Sections 118 and 139 of the NI Act. Needless to reiterate that the result of such presumption is that existence 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 8 th floor had also been of irrelevant factors for consideration of a probable defence of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsideration. The Apex Court held that once the facts came on record remained unrebutted and supported with the evidence on record with no substantive evidence of defence of the appellant to explain the incriminating circumstances appearing in the complaint against her, no error has been committed by the High Court in the impugned judgment, and the appellant has been rightly convicted for the offence punishable under Section 138 of the Act and needs no interference of this Court. The Court held that there is a mandate of presumption of consideration in terms of the provisions of the Act and the onus shifts to the accused on proof of issuance of cheque to rebut the presumption that the cheque was issued not for discharge of any debt or liability in terms of Section 138 of the NIA. It also held that proceedings under Section 138 are quasi-criminal in nature and the principles which apply to acquittal in other criminal cases are not applicable in the cases instituted under the Act. Likewise, under Section 139 of the Act, a presumption is raised that the holder of a cheque received the cheque for the discharge, in whole or in part, of any debt or other liability and to rebut such presu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nment for 8 [a term which may be extended to two years ], or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless - (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice; in writing, to the drawer of the cheque, [within thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. Explanation.-For the purposes of this section, debt or other liability means a legally enforceable debt or other liability. 16. It is well settled that the proceedings under Section 138 of the Act are quasicriminal in nature, and the principles w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 118 and 139 of the NI Act. This Court stated the principles in Kumar Exports [Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513] 4 (2019) 18 SCC 106 20. The accused in a trial under Section 138 of the Act has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case the nonexistence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not insist in every case that the accused should disprove the non existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Section 313 of the Code, but failed to record evidence to disprove or rebut the presumption in support of her defence available under Section 139 of the Act.The statement of the accused recorded under Section 313 of the Code is not a substantive evidence of defence, but only an opportunity to the accused to explain the incriminating circumstances appearing in the prosecution case of the accused. Therefore, there is no evidence to rebut the presumption that the cheques were issued for consideration. 24. In the given circumstances, the High Court, in our view, has not committed any error in recording the finding of guilt of the appellant and convicting her for an offence being committed under Section 138 of the Act under its impugned judgment, which in our considered view, needs no further interference. Consequently, the appeals are without any substance, and are accordingly dismissed. 9.6. This Court in case of Shree Corporation vs. Anilbhai Puranbhai Bansal [2018(2)GLH 105], considered the question that arose as to what the expression amount of money means in a case where the admitted liability of the drawer of the cheque gets reduced, on account of the part pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Instruments Act. Obviously this could not have been the intention of the legislature to make a person liable to punishment even if he has made arrangements necessary for payment of the amount which is actually payable by him. If the drawer of the cheque is made to pay more than the amount actually payable by him, the inevitable result would be that he will have to chase the payee of the cheque to recover the excess amount paid by him. Therefore, I find it difficult to take the view that even if the admitted liability of the drawer of the cheque has got reduced, on account of certain payments made after issue of the cheque, the payee would nevertheless be entitled to present the cheque for the whole of the amount, to the banker of the drawer, for encashment and in case such a cheque is dishonoured for want of funds, he will be guilty of offence punishable under Section 138 of Negotiable Instrument Act. 24. In taking the aforesaid view, I am conscious of the implications. The drawer of a cheque may make payment of a part of the amount of the cheque only with a view to circumvent and get out of his liability under Section 138 of Negotiable Instrument Act. But, this can easily b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payee of the cheque. Of course, if the payee of the cheque makes some demands on account of interest, compensation, incidental expenses etc, that would not invalidate the notice so long as the principal amount demanded by the payee of the cheque is correct and is clearly identified in the notice. When the principal amount claimed in the notice of demand is more than the principal amount actually payable to the payee of the cheque and the notice also does not indicate the basis for demanding the excess amount, such a notice cannot be said to be a legal and valid notice envisaged in Section 138(b) of Negotiable Instrument Act. In such a case, it is not open to the complainant to take the plea that the drawer of the cheque could have escaped the liability by paying the actual amount due from him to the payee of the cheque. In order to make the notice legal and valid, it must necessarily specify the principal amount payable to the payee of the cheque and the principal amount demanded from the drawer of the cheque should not be more than the actual amount payable by him though addition of some other demands in the notice by itself would not render such a notice illegal or invalid. (see ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he demand in the notice to be absolutely ominous, then the order of process should not be issued. If the legal notice as envisaged under the provisions of the NI Act is found to be not in accordance with law, then the complaint should fail. The service of a valid legal notice in a case under section 138 of the N.I. Act, is mandatory. Service of a valid notice is trite and imperative in character for maintaining a complaint. 9.7. This Court in case of Arvind Maneklal Tailor vs. State of Gujarat and Another [2000 (3) G.L.H. 442], was considering the case of the dishonour of cheque after issuance of cheque but before the due date, there was a change in the obligations between the parties whereby extent and quantum of debt was subsequently altered. On due date the debt was of a lesser amount than the amount of cheque which was dishonoured. The Court held that the said cheque did not represent either the entire debt or the part of the debt on due date. 2. The principles laid down by the Supreme Court as regards the proper approach and perspective in relation to appeals against acquittals are by now well settled and do not require a detailed discussion. Suffice it to say that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o far as the appreciation of evidence is concerned, I see no reason to take another view of the matter, so far as the findings of fact are concerned. Suffice it to say that the finding of fact based on the evidence on record is to the effect that when the cheque was issued, the same represented an amount due and payable to the drawee in respect of the outstanding consideration in respect of the shops sold by the drawee to the drawer. However, subsequently, after the issuance of the cheque, but before the due date, the parties readjusted their mutual obligations as evidenced by Exh.24, etc., and the drawer of the cheque made payments in respect of the then outstanding amount in respect of the shops purchased by him by instalments as also interest, which payment has been accepted by the drawee. The evidence on record discloses that the cheque was originally issued on the understanding that the drawer as a purchaser of the shops would be able to obtain bank loans, on the basis of supporting documents to be provided by the complainant; however, since the complainant did not or could not provide the necessary documents, the bank loan although sanctioned, was not disbursed, and therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... / s Godavari Fertilizers Chemicals Ltd., reported in 1999 Criminal Law Journal, page 1184, wherein the facts of the case are almost identical. 9.8. In case of Rahul Builders vs. Arihant Fertilizers and Chemicals [(2008) 2 SCC 321], according to the respondent, a penal provision should be construed strictly, the condition precedent wherefor is service of notice. It is one thing to say that the demand may not only represent the unpaid amount under cheque but also other incidental expenses like costs and interests, but the same would not mean that the notice would be vague and capable of two interpretations. An omnibus notice without specifying as to what was the amount due under the dishonoured cheque would not subserve the requirement of law. 10. Service of a notice, it is trite, is imperative in character for maintaining a complaint. It creates a legal fiction. Operation of Section 138 of the Act is limited by the proviso. When the proviso applies, the main Section would not. Unless a notice is served in conformity with Proviso (b) appended to Section 138 of the Act, the complaint petition would not be maintainable. The Parliament while enacting the said provision co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d cheque, the notice might well fail to meet the legal requirement and may be regarded as bad. 9. This Court had occasion to deal with Section 138 of the Act in Central Bank of India v. Saxons Farms 3 and held that the object of the notice is to give a chance to the drawer of the cheque to rectify his omission. Though in the notice demand for compensation, interest, cost etc. is also made the drawer will be absolved from his liability under Section 138 if he makes the payment of the amount covered by the cheque of which he was aware within 15 days from the date of receipt of the notice or before the complaint is filed. [Underlining is ours for emphasis] As therein, some other sums were indicated in addition to the amount of cheque, it was, therefore, not held to be a case where the dispute might be existing in respect of the entire outstanding amount. 12. On this aspect of the matter, we may consider K.R. Indira v. Dr. G. Adinarayana [(2003) 8 SCC 300] wherein this Court upon noticing Suman Sethi (supra) stated the law, thus: ...However, according to the respondent, the notice in question is not separable in that way and that there was no specific demand m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S on 7.10.2008. Thus, the respondent called upon the petitioner to pay much more than the amount actually due and payable by it. In order to comply with the demand made in the notice, the petitioner would have been required to pay the whole of the amount of Rs.49,47,600/- to the complainant/respondent. A perusal of the notice would show that the complainant did not at all refer to the payment of Rs.16,50,000/- received through RTGS, while issuing the notice of demand dated 19.12.2008. This is not as if the complainant/respondent acknowledged the payment of Rs.16,50,000/- and despite that asked the petitioner to make payment of the whole of the amount of the cheque. The complainant/respondent did not even refer to the substantial payment which he had received by way of RTGS. To ask the drawer of the cheque to make payment of Rs.49,47,600/- despite having earlier received a sum of Rs.16,50,000/- against that very cheque is nothing but a dishonest conduct. Had the petitioner complied with the demands made in this notice, it would have been compelled to later on chase the complainant for recovery of the excess amount paid by it and had the complainant not paid the excess amount receive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... K. Churiwala, 2000 (2) SCC 380, the Hon‟ble Supreme Court held that where the notice also contains a claim by way of cost, interest etc. and gives breakup of the claim of the cheque amount, interest, damages etc., which are separately specified, the claim for interest, cost etc. would be superfluous and these additional claims being severable would not invalidate the notice. It was further held that if an ominous demand is made in a notice as to what was due against a dishonoured cheque, the notice might fail to meet the legal requirement and may be regarded as bad. The same consequence, in my view, would follow where the principal sum demanded in the notice is more than the actual amount payable to the payee of the cheque as principal sum. In the present case, while demanding Rs.49,47,600/- vide notice dated 19.12.2008, the complainant did not even indicate that the actual amount due to him was only Rs.32,97,600/- and he called upon the complainant to pay the whole of the amount of the cheque without even trying to justify the demand made by him. 15. In K.R.Indira vs. Dr.G.Adinarayana, 2003 (3) JCC(NI) 273, a consolidated notice was sent in respect of four cheques. Tw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the cheque was Rs.32,97,600/- and without even referring to the part- payment of Rs.16,50,000/- which he had received by RTGS on 7.10.2008. The criminal complaint, subject matter of Crl.M.C.2224/2009 is liable to be quashed as the complainant presented the cheque for encashment of whole of its amount of Rs.31,91,650/- though he had already received a sum of Rs.10,50,000/- before presentation of the cheque and the principal amount due to him on the date of presentation of the cheque was only Rs.21,41,650/-. 9.10. On the aspect of proof of debt, the decision in case of Kumar Exports vs. Sharma Carpets [(2009) 2 SCC 513] is heavily relied upon to urge that the accused in a trial under Section 138 has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case, non-existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration debt existed and secondly the accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. 17. Even otherwise, a bare per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accused towards the complainant to the extent of the cheque amount in terms of Section 118 and 139 of NI Act. No doubt the aforesaid presumptions are rebuttable in nature and the same could have been rebutted by the accused not only by way of cross examination of CW- 1 while relying upon the material brought on record by the complainant but also by raising presumptions of fact and law on the basis of facts admitted/proved on record. Whether or not the accused have been able to rebut the aforesaid presumption is a question of fact which shall be decided on the basis of material available on record. 19. The basic defence of the accused is that there was no liability of the accused towards the complainant much less any legally enforceable liability in view of the fact that no work under the MOU Ex.CW-1/1A and agreement Ex.CW-1/1 had ever been done by the complainant. According to him, the cheque in question was given by him to the complainant as security and the same has been misused by the complainant without doing any work. In order to probablize the aforesaid defence counsel for accused has relied upon clause 3 of the MOU which records that the payment was to be made after m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MOU nor the agreement contemplates placing of any work order by the accused and raising of any invoice by the accused. The agreement does not even contemplate reporting of work performed by the complainant in writing nor does it contemplate feedback by the accused in writing. In my considered opinion, whether or not any work had been performed by the complainant for the accused in terms of the agreement can be ascertained only from the wholesome and meaningful reading of two documents Ex. CW-1/1 and Ex. CW- 1/1A in the light of conduct of the parties. It is to be noted that this decision has already been referred to in case of Rohitbhai Jivanlal Patel (supra) by the Apex Court. 10. Reverting to the facts of the instant case, it is the case of the complainant that the accused is the in-laws of his elder son who shared the good relations with the family. He was having business as a contractor and was in need of money. The appellant original complainant arranged for the cash of Rs.20 lakhs which he promised to return in six months period and when he did not return the same, the demand was made. He gave a cheque of Rs.20 lakhs drawn on the State Bank of India having the br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant failed to establish the amount of money which was due from all the cheques and the drawer failed to make the payment of the said amount of money to the payee or the holder in due course of the cheque. 10.3. As the essential ingredient of Section 138 are of the drawing of the cheque by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, on presentation of the cheque by the payee or the holder in due course, the return of the cheque unpaid by the drawee of the bank for want of insufficient fund obligates issuance of a written notice to the drawer of the cheque within 15 days. Failure of the drawer to make the payment to the payee would amount to his not having fulfilled the liability of the drawer of the cheque as to the amount of the money and as in the matter on hand, the part payment had already been made, the Trial Court rightly held that the part payment made by the respondent ought to have been reflected in the notice issued by the appellant. After the issuance of cheque in favour of the drawee or the payee, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f time from 2012 to 2013, prior to the issuance of the cheque in question. It is only at the time of cross-examination that the appellant has agreed to have received the said amount. Before that, at no point of time, this has been either mentioned or accepted. The demand continued for the amount of Rs. 20 lakhs. As has been held in case of Rahul Builders (supra), the importance of notice cannot be undermined. This non-revelation on the part of the appellant shall need to be viewed strictly. An attempt is made to distinguish the facts of this case from those in Rahul Builders (supra) by urging that the amount of Rs. 4 lakhs (rounded off) was paid prior to the issuance of cheque unlike in the matter before the Apex Court. That, in the opinion of this Court, is hardly the distinguishing fact to nullify the need of specific reference of the amount received. At the time of issuance of cheque, the amount received in the year 2012 and 2013 were in knowledge of the drawer, the fact remains that the cheque was meant to be the security for the entire amount and when the family dispute arose, the undated cheque was presented to the bank without the recognition of the amount of Rs. 4 lakhs (ro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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