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TMI Blog2023 (1) TMI 503X X X X Extracts X X X X X X X X Extracts X X X X ..... categorically state that in his reply to the demand notice he stated that he repaid the entire amount along with interest by making payment on monthly basis. Thus, it is clear from the record of the trial Court as well as arguments advanced before the First Appellate Court that the accused never disputed about issuing signed cheques in favour of the complainant. Though it was his defence that he handed over such blank signed cheque as a security. It is now well settled that even a cheque duly signed by the accused for the purpose of security of any loan, attracts the provisions of Section 138 of the N.I. Act. It is also well settled that blank signed cheque issued by the accused is presumed to have been handed over to the complainant with a understanding or the condition that blank portions on the cheque would be filled up before presenting it. Hence, now in the present matter there is absolutely no dispute about the issuance of cheque by the accused in favour of the complainant. In the present matter,, there is absolutely no material to show that the activity of giving loan by the complainant to the accused is by way of charging any interest and that too when both parties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was granted. Accordingly, the appeal was registered. 3. Heard learned Counsel Shri V.A. Lawande along with Shri Parimal Redkar, for the appellant and learned Counsel Shri John A. Lobo for the respondent. 4. The parties are hereinafter called as complainant and accused as they were arrayed before the trial Court for the sake of convenience. 5. In nutshell, the complaint was filed before the learned Magistrate at Canacona against the accused which was registered as Criminal Case No.29/NI/2014. It was the complaint under Section 138 of the N.I. Act. In short, it is the case of the complainant that he knows the accused and both of them are distant relatives. The accused borrowed a sum of ₹2,00,000/- from the complainant for his personal needs. Towards repayment of such borrowed amount, the accused issued two cheques in favour of the complainant dated 04/06/2014 amounting to ₹1,00,000/- each, drawn on Corporation Bank, Loliem branch Canacona. The complainant presented both cheques for encashment on 15/07/2014. However, the cheques were returned with the endorsement Account closed . This memorandum was received by the complainant on 15/07/2014. A legal notice dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cally on the ground that the accused on a preponderance of probabilities established that the complainant was indulging with money lending activities without any licence and therefore, the amount mentioned in the cheque is not legally recoverable debt. 11. The learned Counsel Shri Lawande submits that once the accused admitted receipt of loan of ₹2,00,000/- which was without charging any interest and that too parties are related to each other, the question of invoking the provision of The Money Lenders Act is clearly misplaced. The provisions of The Goa Money-Lenders Act, 2001 are not at all attracted in the present case and the complainant has been unnecessarily and without any evidence been branded as a money lender though he tried to help the accused being a relative. He would submit that findings of the learned trial Court have been disturbed by the First Appellate Court on totally different grounds and without any such material on record. He would submit that before the Appellate Court, a totally new defence was raised and accepted without material on record to that effect. According to him, such findings of the First Appellate Court are not only perverse but incorrec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that for the first time complainant disclosed during cross-examination that he paid an amount of ₹2,00,000/- as loan to the accused in the month of March, 2014, on the condition that he would return/repay within one month. This also, according to Mr. Lobo, needs to be taken into account for the purpose of considering the conduct of the complainant. 16. Shri Lobo then would submit that reply from the complainant to the letter dated 09/07/2014 is dated 16/07/2014 and before that date, both the cheques were returned unpaid. However, this fact has not been disclosed in the said reply dated 16/07/2014. Similarly, the legal notice issued by the Advocate for the complainant is also dated 16/07/2014, however, there is no reference in the reply filed by the complainant dated 16/07/2014 about issuance of such legal notice through his Advocate. Thus, the complainant suppressed many facts and circumstances and, therefore, his conduct assumed importance in deciding the matter. 17. Mr. Lobo then submitted that the cross-examination of the complainant clearly goes to show that he is in the habit of lending money to various persons and, therefore, an inference could be drawn that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sumption, the standard of proof for doing so is that of preponderance or probabilities which has been examined by a three Judge Bench of this Court in Rangappa vs. Sri Mohan [(2010) 11 SCC 441], which reads as under:- 26. In light of these extracts, we are in agreement with the respondent claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat [(2008) 4 SCC 54 : (2008) 2 SCC (Cri) 166] may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at 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. . 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 consideration did not exist or that its non-existence was so probable that a prudent man would, under the circumstances of the case, act upon the plea that the consideration did not exist. This Court has, time and again, emphasised that though there may not be sufficient negative evidence which could be brought on record by the accused to discharge his burden, yet mere denial would not fulfil the requirements of rebuttal as envisaged under Sections 118 and 139 of the NI Act. This Court stated the principles in Kumar Exports [Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513] 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 exis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 22. That apart, when the complainant exhibited all these documents in support of his complaints and recorded the statement of three witnesses in support thereof, the appellant has recorded her statement under 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. 23. In the case of Basalingappa(supra) the Apex Court discussed in detail drawing of presumption under Sections 118, 138 and 139 of the N.I. Act and how such presumption could be rebutted, what could be the standard of proof? It was held that while the prosecution must establish its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P.C. Therefore, mentioning about the dates in the complaint, notice or in the evidence cannot be considered as any irregularity on the part of the complainant. The accused came with a specific case that he repaid the entire loan however admittedly there is no such material brought on record except giving few suggestions to the complainant during cross-examination which he specifically denied. It is admitted that only by giving suggestions, presumption under Section 139 of the N.I. Act cannot be claimed to have been rebutted. The probability must be shown to convince the Court. Suggestions are only considered to be an attempt while cross-examining the witness to elicit facts. However, once a suggestion put to the witness is denied the onus remains as it is on such a party to prove it otherwise. In other case, if a suggestion is admitted by the witness, there is no need for producing further proof. Thus, it could be said that giving suggestions is only by way of an attempt to try and get admission from the witness and nothing more. 28. The learned Counsel Shri Lobo though vehemently tried to claim that the conduct of the complainant needs to be looked into but failed to satisfy th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f money or in kind, but does not include- (i) a deposit of money or other property in a Government post office bank or in any other bank or in a company or with a Cooperative Society; (ii) a loan to, or by, or a deposit with any society or association registered under the Societies Registration Act, 1860 (Central Act 21 of 1860), or any other enactment relating to a public, religious or charitable object; (iii) a loan advanced by the Government or by any local authority authorised by the Government; (iv) a loan advanced to a Government servant from a fund, established for the welfare or assistance of Government servants, and which is sanctioned by the Government; (v) a loan advanced by a Co-operative Society; (vi) an advance made to a subscriber to, or a depositor, in a provident fund, from the amount standing to his credit in the fund in accordance with the rules of the fund; (vii) a loan to or by an insurance company as defined in the Insurance Act, 1938 (Central Act 4 of 1938); (viii) a loan advanced to, or by a bank; (ix) a loan to, or by, or deposit with, anybody (being a body not falling under any of the other provisions of this cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gular course of his business. 36. Thus, only because complainant advances money to few persons without charging any interest and on humanitarian ground or for helping such persons, cannot be branded as a money-lender. 37. The word loan as defined in Section 2(k) of the above Act must be strictly construed as a loan/ advance at interest. A very purpose of moneylender as defined in Section 2(l) is to an invidual or friend and to carry out such business of lending of money on the basis of licence. When an advance is made without charging any interest, it clearly shows that the said person is not having any intention to carry out money lending business. First of all the purpose of the Act of 2001 is for the regulation and control of transaction of money lending in the State of Goa. 38. If it is considered that the complainant advanced loan without charging any interest from the borrower, such transaction cannot be brought within the definition of loan as found in Section 2(k) of the Money-Lenders Act. Similarly, in the present matter the accused issued cheque towards repayment of the said advance i.e. only principal amount and, therefore, provisions of Section 2 (k)(x) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and to allegedly pay the dues of the accused to others. It is no doubt true that cross-examination of the complainant further shows that he advanced money to 4-5 persons but categorically denied that such advance was in connection with any business activity and that any interest on such advance was charged. 43. It can thus be construed from the tenor of the cross-examination of the complainant that advance of money given by him to different persons was not a part of his business activity or any activity of lending of any finance towards the business of the accused person or others. He did not charge a single pie towards interest in refund of such advances. 44. In the case of Romaldina Barreto E Carneeiro (supra), it has been brought on record that a promissory note was executed by her in favour of the complainant, which brings such a case under exception of the definition of loan in Section 2(k) as quoted earlier. 45. In the case of Sulekhabai (supra), after considering the definition in the Money Lenders Act, 2001, observed that the expression activity as held that a solitary instance of giving a loan does not make a person Money Lender . Taking clue from the said obs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case in the present matter. 48. The learned Counsel Shri Lobo then placed reliance in the case of Goa Plast Pvt. Ltd. (supra), however, the said judgment of this Court was overruled by Supreme Court in Goa Plast Pvt.Ltd. V/s. Shri Chico Ursula D'Souza [2004 2 SCC 235]. 49. In the case of Harendra Ramchandra Pathak (supra), this Court While considering the provisions of Section 378 of Cr.P.C. observed in paragraph 12 that though the High Court can re-appreciate the evidence and conclusions drawn by the trial Court and an order of acquittal can be interfered with only when the judgment is perverse. The provisions in terms as understood in law is considered in Gamini Bala Koteswara Rao and others v/s. State of Andhra Pradesh through Secretary (2009) 10 SCC 636 and the same has also been relied upon in Basalingappa (supra). There is no much dispute about the settled proposition of law in dealing with an appeal challenging acquittal. However, when the order of the trial Court or the First Appellate Court as the case may be is found to be perverse and without considering the provisions of the Money Lenders Act in proper manner and thereby branding any one as money-lende ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n by the First Appellate Court at the time of passing of the judgment or at the most at the time of hearing parties, assumes significance as in case the points for determination are framed in wrong manner, the reasoning is also going to affect. 54. In the present matter, the learned First Appellate Court after hearing of the arguments and after perusing the entire records of the trial Court, framed the points for determination in paragraph 26 of the impugned judgment. Thus, it presumed that the learned First Appellate Court was entirely aware of the facts as well as defence raised by the accused before the learned Magistrate and even before the First Appellate Court. Paragraph 10 of the impugned judgment shows the arguments advanced on behalf of the accused thereby categorically state that in his reply to the demand notice he stated that he repaid the entire amount along with interest by making payment on monthly basis. Thus, it is clear from the record of the trial Court as well as arguments advanced before the First Appellate Court that the accused never disputed about issuing signed cheques in favour of the complainant. Though it was his defence that he handed over such blank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o reconsider the matter in view of the observations. 56. In the present matter,, there is absolutely no material to show that the activity of giving loan by the complainant to the accused is by way of charging any interest and that too when both parties are related to each other. Each transaction has to be considered in the light of definition of loan as defined in Section 2(k) of Goa Money Lenders Act, 2001. Thus, the observations in paragraphs 36 to 40 of the impugned judgment are erroneous and without considering the definition of loan as defined in Section 2(k) of the Act of 2001. Simply because the complainant advanced loan to 4 to 5 persons and that too without charging any interest, it cannot be presumed that such activity is covered under the Money Lenders Act and, therefore, recovery of it is barred. While deciding point No.2 of the impugned judgment, the learned First Appellate Court has given undue importance to certain aspects which are not found recorded in the complaint, legal notice and the affidavit of the complainant. Similarly, much importance is given to the letter addressed by the accused dated 09/07/2014 thereby demanding both the cheques. It needs to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been accepted by putting undue burden on the complainant himself by the First Appellate Court and more so on the basis of so called letter written by the accused. 60. Having said so, the observations of the first Appellate Court in reversing the judgment of the learned Magistrate are required to be considered as perverse. Putting unnecessary burden on the complainant and not raising presumption under Section 139 of the N.I. Act needs to be considered as error in the eyes of law. Thus, such findings required interference as it cannot be construed that the view taken by the learned First Appellate Court is a plausible view in the facts and circumstances of the case in hand. At the most such view could be considered as in the nature of impossible view and thus this Court would not only be justified but duty bound to step in. 61. Having regards to the circumstances discussed above, the only option available is to quash and set aside the impugned judgment passed by the Fist Appellate Curt and to restore the judgment and conviction awarded by the learned Magistrate. O R D E R 1. The appeal is therefore allowed. The impugned judgment dated 09/02/2017 in Criminal Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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