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TMI Blog2018 (1) TMI 1714X X X X Extracts X X X X X X X X Extracts X X X X ..... doubtful, it is axiomatic that the onus would shift to the complainant to prove the existence of legally enforceable debt or liability, as a matter of fact. In such a scenario, the accused would have rebutted the statutory presumption under section 118(a) and 139 of the Act and the burden of proving the existence of legally enforceable debt or liability would shift on the complainant. It is the case of the complainant that the loan was extended for a short duration of a month. The admission that the complainant did not maintain accounts of the transaction and the inference drawn by the learned Magistrate that the transaction was not reflected in the income tax returns, in the factual matrix, is not sufficient to render the existence of legally enforceable debt or liability doubtful - since the statutory rebuttal which concededly is activated, is not rebutted by the accused by evidence showing that the existence of defence is probable, the evidence must be appreciated on the anvil of the statutory presumption in favour of the complainant that the cheque was issued towards discharge of an existing debt or liability which is legally enforceable. The judgment and order impugned s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the blank cheque despite the frustration of the oral agreement to sell the plot to the accused. 4. The gist of the complaint (Exh. 1) is that in view of cordial relationship, the complainant extended a hand loan of Rs. 2 lacs to the accused on 16.2.2004. Towards refund of the hand loan, the accused issued cheque 0942443 dated 12.3.2004 drawn on the Akola Janta Commercial Cooperative Bank Limited for Rs. 2 lacs. The cheque was presented for encashment on 12.3.2004 and was dishonoured due to insufficient funds in the account of the accused. The statutory notice was issued, the notice was duly received by the accused who chose not to reply thereto. 5. CW 1 is the complainant Dr. Kailash Charkha. The examination in chief is consistent with the averments in the complaint. In the cross-examination, it is extracted that the complainant is a medical practitioner and income tax payee. The complainant states in the cross-examination that he withdrew the amount from the account of his father in law, which account he was authorized to operate and handed over the same to the accused in the presence of the father of the accused. It is brought on record that the complainant owns plots a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the accused and the witness was later on informed of the transaction by his son - accused. DW 1 admits that when the cheque was issued amount of Rs. 2 lac was not available in the bank account of the accused. The accused and the DW 1 reside separately, is the admission. DW 1 states that 2 or 3 days after the cheque was given, he and the accused came to know that the plot was encumbered as a security for bank loan. It is elicited from the witness that although he became aware of the dishonour of cheque 5 or 6 months prior to the recording of the evidence, he did not make any inquiry from the complainant. The witness is not aware whether the accused met the complainant in connection with the dishonour of cheque. 8. The learned counsel for the complainant relies on a judgment of a learned Single Judge of this Court in Gaurav Omprakash Jaju vs. Shri Shakti Fabrics, 2010 (6) Mh.L.J. 59 and in particular on paragraphs 6 to 9 of the said judgment, which read thus: 6. A trickster - drawer who may have no intention to pay the amount, may find out ways and means to deliberately avoid payment. However, truth has a tendency to surface. It did appear to have surfaced in the course of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bhash and the accused have very close friendly and business relations. Subhash had assured that the accused who needed cash, would repay the money within a month hence ready cash was given interest free on 5.12.2006, in lieu of which, cheque in question came to be issued for Rs. 70,000/-. Since the accused had expressed his inability to pay the cheque amount on due date and requested the complainant through his brother to wait for presentment of cheque, the cheque was presented for encashment in May 2007 (but within validity period of six months). The fact that it returned dishonoured for non-payment with remarks insufficient fund is not disputed. Regarding the second contention that the complainant had no acquaintance with the accused and he would not lend Rs. 70,000/- to unknown person is also negatived by the evidence on record. PW-3 Subhash Jaju was examined, whose evidence indicate about neighbourly business relations of six years with the accused and the fact that the complainant Gaurav had visited Erode in order to collect commission. At that time, the accused was in need of money and demanded hand-loan from Gaurav who had advanced it to the accused. The suggestions in def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent case for to dislodge statutory presumption that the cheque in question was issued for discharge of debt or liability. It was for the accused to prove to the contrary that there was no any legally recoverable debt or liability once the accused had drawn a cheque for certain sum of money payable to the holder of holder in due course of the negotiable instrument, he cannot be allowed to resort to sharp practices for dishonest evasion of payment in a trading area. The legislative intention to introduce penal liability under section 138 of the N.I. Act is to enable a victim of an illegal acts-payee or holder in due course to recover amount due upon the dishonoured and deliberately unpaid cheque. Unscrupulous elements interested only to avoid payment by playing foul tricks with reference to negotiable instrument issued by them for consideration cannot be encouraged, as they are required to be punished according to law. Learned trial Magistrate had ignored all these aspects which resulted in miscarriage of justice. The trial Court ought not to have adopted interpretation in the present case on the ground of suspicion, surmises or conjectures. The trial Court trying a criminal case u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, if any. The accused may not enter in the witness box if he can dislodge the statutory presumptions otherwise . 8 Under Section 139 of the N I Act, burden lies upon the drawer of the cheque to rule out the existence of the debtor-creditor relationship. The use of the phrase until the contrary is proved in Section 118 of the N I Act and further use of the words unless the contrary is proved in Section 139 of the Act read with definition of may presume and shall presume as given in Section 4 of the Evidence Act, make it clear that presumption to be raised under both the provisions are rebuttable. When a presumption is rebuttable, it only points out that the party on whom lies the duty of going forward with evidence, on the fact presumed and when that party has produced evidence fairly and reasonably tending to show that the real fact is not as presumed, the purpose of the rebutting presumption is served. But, it is settled law that 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 to prove offence. The accused may adduce evidence to prove that there was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to pay. This Court must on guard to prevent miscarriage of justice. The learned trial Magistrate ought to have noticed that the obligation on the part of the complainant stood discharged with the help of statutory presumptions of law unless the accused adduced evidence to establish the reasonable possibility of the non-existence of the presumed fact . Reliance is also placed on another judgment rendered by the learned Single Judge of this Court in Lalji s/o. Bansanarayan Choubey Vs. Jiyalal Chavan and another, 2009 (2) Mh.L.J. 565 and in particular on paragraphs 10 and 11 of the said judgment, which read thus: 10. Clinching question in this case is whether the presumption under section 139 of the Negotiable Instruments Act is rebutted by the respondent No. 1. The learned Judicial Magistrate did not consider the effect of legal presumption available under section 139 of the Negotiable Instruments Act in its proper perspective. The Apex Court in Hiten P. Dalal vs. Bratindranath Banerjee : 2001 SCC (Cri) 960, has held that mere plausible explanation given by the accused is not enough. The accused has to necessarily prove in the trial, by leading cogent evidence, that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nde relies on the judgment of a learned Single Judge of this Court in Rosa Maria Fernandes vs. Nauso N. Kepkar, 2010 (4) Mh.L.J. 611 and another judgment of a learned Single Judge in Sanjay Mishra vs. Kanishka Kapoor @ Nikki and another, 2009 (4) Mh.L.J. 155. 9. In Rangappa vs. Sri Mohan reported in (2010) 11 SCC 441, the Hon'ble Apex Court, while holding that since the signature on the cheque is not disputed, the statutory presumption under Section 139 of the Act is activated, which the accused could not rebut since the defence of lost cheque was not probable, observed thus: 27. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable 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 wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 23. In other words, provided the facts required to form the basis of a presumption of law exists, no discretion is left with the court but to draw the statutory conclusion, but this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary. A fact is said to be proved when, after considering the matters before it, the court either believes it to exist, or considers its existence 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'. 24. Judicial statements have differed as to the quantum of rebutting evidence required. In Kundan Lal Rallaram v. Custodian, Evacuee Property, this Court held that the presumption of law under Section 118 of Negotiable Instruments Act could be rebutted, in certain circumstances, by a pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been defined in Section 3 of the Evidence Act (the interpretation clause) to mean: 'Proved' - A fact is said to be proved when, after considering the matters before it, the court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists. 'Disproved' - A fact is said to be disproved when, after considering the matters before it the Court either believes that it does not exist, or considers its non-existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it does not exist. 30. Applying the said definitions of 'proved' or 'disproved' to principle behind Section 118(a) of the Act, the Court shall presume a negotiable instrument to be for consideration unless and until after considering the matter before it, it 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a civil litigation, the defendant may not adduce any evidence to discharge the initial burden placed on him, a 'fortiori' even an accused need not enter into the witness box and examine other witnesses in support of his defence. He, it will bear repetition to state, need not disprove the prosecution case in its entirety as has been held by the High Court. 45. Two adverse inferences in the instant case are liable to be drawn against the Second Respondent: (i) He deliberately has not produced his books of accounts. (ii) He had not been maintaining the statutory books of accounts and other registers in terms of the bye-laws of Cochin Stock Exchange. Moreover, the onus on an accused is not as heavy as that of the prosecution. It may be compared with a defendant in a civil proceeding. 12. The pivotal issue is whether the accused has brought on record material which would persuade this Court to believe the defence to exist or consider its existence to be reasonably probable, the standard of reasonability being that of the prudent man. If the conscious of this Court is satisfied that the accused has discharged the initial onus of proof by demonstrating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Washim. No suggestion is given to the complainant that the accused and the complainant entered into an oral agreement to purchase a particular plot. The area of the plot and the consideration of Rs. 2,50,000/- is not put to the complainant and is testified to only in the evidence of DW 1. 14. It is the case of the complainant that the loan was extended for a short duration of a month. The admission that the complainant did not maintain accounts of the transaction and the inference drawn by the learned Magistrate that the transaction was not reflected in the income tax returns, in the factual matrix, is not sufficient to render the existence of legally enforceable debt or liability doubtful. I have already observed, that since the statutory rebuttal which concededly is activated, is not rebutted by the accused by evidence showing that the existence of defence is probable, the evidence must be appreciated on the anvil of the statutory presumption in favour of the complainant that the cheque was issued towards discharge of an existing debt or liability which is legally enforceable. Having done so, I am not persuaded to agree with the reasoning of the learned Magistrate. In my vie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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