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TMI Blog2015 (10) TMI 2835X X X X Extracts X X X X X X X X Extracts X X X X ..... of the NI Act, inter-alia, provides that unless the contrary is proved, the drawn up negotiable instrument, if accepted, has to be presumed to be for consideration. In GOAPLAST (P.) LTD. VERSUS CHICO URSULA D SOUZA [ 2003 (3) TMI 533 - SUPREME COURT] , the Supreme Court has held that that the provisions of section 138 to 142 of the NI Act, is for the purpose of giving credibility to negotiable instruments in business transactions. In view of section 139 of the NI Act, it had to be presumed that a cheque is always issued in discharge of any debt or other liability. The presumption could be rebutted by adducing evidence and the burden of proof is on the person who wants to rebut the presumption. In RANGAPPA VERSUS SRI MOHAN [ 2010 (5) TMI 391 - SUPREME COURT] , section 139 of the NI Act is stated to be an example of a reverse onus clause which is in tune with the legislative intent of improving the credibility of negotiable instruments. Section 138 of the NI Act provides for speedy remedy in a criminal forum, in relation to dishonour of cheques. Nonetheless, the Supreme Court cautions that the offence under Section 138 of the NI Act is at best a regulatory offence and largely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iminal Appeal No. 60/2012 dated 12.09.2012 whereby the judgment and order of conviction dated 18.05.2012 and 23.05.2012 respectively passed by the Trial Court, convicting the respondent under Section 138 of the Negotiable Instruments Act (for short 'NI Act') and sentencing him to undergo Simple Imprisonment for five months and a fine of Rs. 3 lacs, in default of payment of which one month SI, has been set aside and the respondent has been acquitted. 2. The petitioner, being friendly to the respondent, gave a loan of Rs. 1.40 lacs to him vide an agreement executed on 16.09.2008 (Ex.CW1/A). The aforesaid agreement indicated that the petitioner would pay Rs. 1.40 lacs on the next date i.e. a day after the agreement was executed and the respondent would return the amount of Rs. 1.50 lacs on 23.04.2009. The agreement further indicated that the respondent had issued a promissory note admitting his liability and obligation to pay the aforesaid amount (Rs. 1.50 lacs) to the petitioner on 23.04.2009. An affidavit was also sworn by the respondent which indicated that the respondent has given a cheque of Rs. 1.50 lacs bearing cheque no.489019 payable on 23.04.2009. The cheque was o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the respondent brought a stamp paper and a promissory note and requested for a friendly loan of Rs. 1.50 lacs. However, the petitioner gave him only Rs. 1.20 lacs. Thereafter, on persuasion of the respondent, Rs. 1,000/- more was given in cash. This also did not satisfy the respondent and a cheque of Rs. 2,000/- was issued in favour of the respondent. A special request was made by the respondent to give him Rs. 1.40 lacs and he promised to give Rs. 1.50 lacs by post-dated cheques to the petitioner. On such repeated request, another cheque of Rs. 17,000/- was signed in favour of the respondents on 16.09.2008. A promissory note was also executed by the respondent. In the month of April 2009, the petitioner reminded the respondent of his obligation to pay back the loan but the respondent took some time from him and requested for not presenting the post dated cheques given by him in the bank. The payment of money was delayed on different pretexts. Finally in the month of May 2009, the post-dated cheques given by the respondent was presented by the petitioner before Punjab National Bank, Dev Nagar, New Delhi, and the same was dishonoured for insufficiency of funds. The cheque has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... executed. It was also marked by the Appellate Court that the agreement was not signed by any witness though a space had been earmarked for the signatures of the witnesses. The aforesaid agreement was on a plain paper instead of stamp paper of Rs. 50/- which is the requirement of Article 5 (c), Schedule 1A of the Indian Stamp Act, 1899. The aforesaid document therefore, was not found to be believable or enforceable legally. 11. Once the payment was not found to have been made on execution of agreement, the execution of promissory note on the same day i.e. 16.09.2008 (Ex. CW1/B) also became operative only on the contingency of the loan having being advanced. The Appellate Court, therefore, was of the view that the agreement was executed without any actual transfer of money. The printed proforma which contained the signature and the thumb print of the respondent were filled up with two different inks. 12. The affidavit, Ex.CW1/C, has also been executed on 16.09.2008. Thus, in the absence of any proof of the amount of loan to have been paid, the promissory note and the agreement referred above lost all its efficacy and force. A promise for no consideration is a void agreement. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (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. Section 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. 15. For the application of provision of Section 138 of the NI Act, 3 ingredients are required to be satisfied, i.e., I. That there should be a legally enforceable debt; II. That the cheque should have been drawn from the account of the bank for discharge in whole or in part of any debt or other liability which pre-supposes a legally enforceable debt; and III. That the cheques so issued is dishonoured for insufficiency of funds. 16. Under Section 139 of NI Act, unless the contrary is proved, the holder of the cheque shall be presumed to have received the cheque in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore the test of proportionality ought to guide the interpretation of the reverse onus clause. An accused may not be expected to discharge an unduly high standard of proof. A reverse onus clause requires the accused to raise a probable defence for creating doubt about the existence of a legally enforceable debt or liability for thwarting the prosecution. The standard of proof for doing so would necessarily be on the basis of preponderance of probabilities and not beyond shadow of any doubt . 22. Keeping the above proposition of law in mind, on an analysis of fact, the scale of balance tills in favour of the respondent. The respondent appears to have rebutted the presumption under Section 139 of the NI Act, namely, the existence of a legally enforceable debt by establishing that no loan was advanced to him even though there was an agreement and a corresponding promissory note and an affidavit. The aforesaid loan was not shown in the ITR return of the petitioner. An adverse inference could be drawn against the petitioner on that account. The loan amount also appears to be doubtful. 23. The petitioner could not, on the other hand, satisfy the requirement of law in discha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the commencement of, or in the course of a summary trial under the NI Act, it would appear to the Magistrate that the nature of the case is such that a sentence of imprisonment for a term exceeding one year may have to be passed or that it is for any reason, undesirable to try the case summarily, the Magistrate would, after hearing the parties, record an order to the effect and thereafter recall any witness who may be examined and proceeded to here or re-hear the case in the manner provided by the Cr.P.C. Thus, the Appellate Courts interpretation was not correct as Section 143 permits sentencing of an accused, even though tried in a summary manner, for an imprisonment for a term not exceeding one year. 29. After having said so, what has put this Court in dilemma is whether to entertain the aforesaid revision petition against the judgment and order of acquittal of the respondent. The present Criminal Revision, though has come to be entertained by this Court since 2012 but there is a lurking doubt about the maintainability of the present revision petition in view of the provisions of Sections 378(4) and 401(4) of the Cr.P.C. 30. Section 378 of the Cr.P.C. provides for appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e instituted on complaint. In cases where such complaints end in acquittal before the Trial Court, only appeal is permissible under sub-section (4) of Section 378 of the Cr.P.C., after the grant of leave to file such appeal by the High Court. There is some dispute about a situation when the Trial Court convicts an accused of a complaint case and on appeal by the accused before the Sessions Court, he is acquitted. In that event, whether a revision would lie against such order of acquittal or since it is an acquittal, though by the Appellate Court, the provision of Sec 378 sub-section (4) would apply. There is no direct indication in sub-section (4) of Sec 378 of Cr. P.C. that an appeal by the complainant could be made against an order of acquittal passed by the Trial Court only and not against an order of acquittal passed by the Appellate Court. In sub-section (1) and (2) of Section 378 of the Cr. PC, the State Government and the Central Government, as the case may be, have been given the discretion to direct the public prosecutor concerned to prefer an appeal as against an original or appellate order of acquittal passed by any Court other than the High Court. Thus, the aforesaid su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ief that no appeal lies thereto and that it is necessary in the interests of justice so to do, the High Court may treat the application for revision as a petition of appeal and deal with the same accordingly. 36. Sub-Clause (4) of Section 401 of Cr.P.C. provides that when an appeal is provided for and no such appeal is filed, no proceeding by way of revision shall be entertained at the instance of the party, who could have appealed. Sub-clause 5, however, permits the High Court on its satisfaction about the interest of justice to treat the application of revision as petition of appeal and deal with the same accordingly. 37. There is, yet, another grey area. The question which disturbs this Court is whether to give benefit of sub-section (5) of Section 401 of the Cr.P.C. in the absence of any such leave to appeal having been granted. Any appeal against an order of acquittal is permissible only after the leave to appeal is accorded and not otherwise. Leaving this issue open, I am inclined to entertain the aforesaid revision as if it were an appeal after the grant of leave as mandated under Section 378(4) of the Cr.P.C. 38. This is for the twin reasons that the present revis ..... 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