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TMI Blog2023 (7) TMI 1232X X X X Extracts X X X X X X X X Extracts X X X X ..... issuance of the cheque by the accused firm by a partner. No evidence otherwise has been adduced. The dishonour of the cheque and the due service of notice has also been duly proved. Thus, the findings of the trial court being not in accordance with the evidence on record and with law is liable to be set aside. The cheque is of the year 2002. More than 20 years have passed. The complainant has proved his case against the accuseds/respondents by way of oral evidence and documents. The accuseds/respondents no. 1 to 3 are found guilty and convicted of offence punishable under Section 138 of the N.I. Act and sentenced to pay compensation of Rs.50 lakhs within one month from the date of this order, in default to suffer simple imprisonment for a period of one year in respect of respondents/accuseds no.2 and 3 and attachment in respect of the respondent/accused no.1 firm. Appeal disposed off. - CRA 593 of 2016 - - - Dated:- 25-7-2023 - The Hon ble Justice Shampa Dutt ( Paul ) For the Appellant : Mr. Milon Mukherjee , Mr. Rahul Ganguly , Mr. Dattatreya Dutta For the State : Mr. Narayan Prasad Agarwala , Mr. Pratick Bose For the Respondents : Md. Shahjahan Hossain , ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 138 of the Negotiable Instruments Act against the accuseds/opposite parties. The accuseds/respondents were examined under Section 251 of the Code of Criminal Procedure, 1973. The substance of the accusation was read over to the accuseds/respondents to which they pleaded not guilty and claimed to be tried. The appellant, in order to prove his case examined three witnesses. The defence did not adduce any witness in their favour. The case of the defence was one of denial and false implication. Considering the evidence on record and after hearing all the parties, the learned Magistrate was pleased by his judgment and order dated 03.02.2016 to find the accuseds/respondents not guilty of the offence punishable under Section 138 of the Negotiable Instruments Act and as such acquitted them from the said charge. Being aggrieved by and dissatisfied with the impugned judgment and order dated 03.02.2016 passed by the learned Judicial Magistrate, 1st Class, 4th Court, Asansol in connection with C. Case No.357 of 2002 (T.R No.86 of 2006), the appellant preferred an application for Special Leave to Appeal before this Hon'ble Court therein praying for leave to file an appeal again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s admitted by the accused, the learned court has erroneously come to the conclusion that as the partnership deed was not placed on evidence by either of the parties, it cannot be concluded that the accuseds/respondents are partners of the firm. The learned court in such circumstances, by acquitting the accuseds/respondents, has caused grave error in law, thereby rendering the impugned order bad in law and thus liable to be set aside. That the impugned order of acquittal is otherwise bad in law and hence the same is liable to be set aside. 3. In their written notes of argument, the appellant has stated that the trial court has wrongly inferred that the appellant herein failed to give individual notices to the partners of the firm and also failed to show existence of legal business with the accused firm and hence could not justify the ingredient that the cheque was issued in lieu of legally enforceable debt or liability. In this regard the Hon ble Apex Court in Krishna Textport Capital Markets Ltd. vs I.L.A.A. Agarwal Ors., reported in (2015) 8 SCC 28 has categorically held that there is no necessity or scope for issuing individual notices to Directors of the company and al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad ever issued the cheque and thereby the learned trial court rightly acquitted the opposite parties from the instant case. The following judgments have been relied upon:- (1) M.S. Narayan Menon vs The State of Kerala (2007) 1 C CR L R (SC) 364. (2) Green Earth Asphalt and Power Private Limited vs The State of Maharashtra Through PSO Ors. (2008) S C CR L R (SC) 469. (3) S.M.S. Pharmaceuticals Ltd. vs Neeta Bhalla (2005) 2 C CR L R (SC) 457. 5. Mr. N. P. Agarwala, learned counsel has appeared for the State. 6. Evidence P.W. 1, is the complainant/appellant. He on oath has proved the following:- a) Cheque(exhibit 1) in this case for Rs.35 lakhs. b) Cheque return memo (2) Exhibit 2 and 3. c) Copy of Demand Notice etc. (Exhibit 4 series). The statement of P.W 1 on being cross examined, that he could not recollect all the averment in the complaint is for deposing after five years. P.W 2 and 3 are Bank officials who have proved that the cheque in this case, issued in the petitioner's name was in/part of the cheque book issued in the name of the accuseds and was deposited by the petitioner and was also dishonored for insuffic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the liabilities set out in S.48. The whole concept of partnership is to embark upon a joint venture and for that purpose to bring in as capital money or even property including immovable property The person who brought it in would, therefore, not be able to claim any exclusive right over any property which he has brought in, much less over any other partnership property. 39. This principle was reiterated in the case of Malabar Fisheries Co. Calicut v. CIT, [(1979) 4 SCC 766]. 40. In the case of S.V. Chandra Pandian v. S.V. Sivalinga Nadar [(1993) 1 SCC 589], this Court held that: In the entire asset of the firm all the partners have an interest albeit in proportion to their share and the residue, if any, after the settlement of accounts on dissolution would have to be divided among the partners in the same proportion in which they were entitled to a share in the profit The mode of settlement of accounts set out in Section 48 clearly indicates that the partnership asset in its entirety must be converted into money from the pool disbursement has to be made It is well settled that a sleeping partner s liability is unlimited and he is also liable for the losses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act to rebut the presumptions arising under Section 118 and 139 of the NI Act, Uttam Ram v. Devinder Singh Hudan,(2019) 10 SSC 287. The Supreme Court in Criminal Appeal No (s) 292 of 2021, SUMETI VIJ Vs M/S PARAMOUNT TECH FAB INDUSTRIES, on 09th March 2021 relied on several precedents and observed :- 13.The object of introducing Section 138 and other provisions of Chapter XVII in the Act appears to be to enhance the acceptability of cheques in the settlement of liabilities. The drawer of the cheque be held liable to prosecution on dishonour of cheque with safeguards provided to prevent harassment of honest drawers. Section 138 primarily relates to a civil wrong and the amendment made in the year 2000 specifically made it compoundable. The burden of proof was on the accused in view of presumption under Section 139 of the Act and the standard of proof was of preponderance of probabilities . The N.I. Act including a cheque carrying a presumption of consideration in terms of Sections 118(a) and 139 of the Act which is related to the purpose referred to and reads as under: 118 Presumptions as to negotiable instruments. Until the contrary is proved, the following pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 15. The scope of Section 139 of the Act is that when an accused has to rebut the presumption, 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 3 (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the balance being insufficient or the account being closed. All the basic ingredients of Section 138 as also of Sections 118 and 139 are apparent on the face of the record. The trial court had also consciously taken note of these facts and had drawn the requisite presumption. Therefore, it is required to be presumed that 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 fulfill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 8. Conclusion In the present case, the accused persons could not/did not discharge their liability under Section 139 of the N.I Act. The complainant has proved the issuance of the cheque by the accused firm by a partner. No evidence otherwise has been adduced. The dishonour of the cheque and the due service of notice has also been duly proved. Thus, the findings of the trial court being not in accordance with the evidence on record and with law is liable to be set aside. The cheque is of the year 2002. More than 20 years have passed. The complainant has proved his case against the accuseds/respondents by way of oral evidence and documents. CRA 593 of 2016 ..... 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