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TMI Blog2017 (9) TMI 2014X X X X Extracts X X X X X X X X Extracts X X X X ..... substantiate his contention that he had, in fact, delivered scrap worth Rs. 10 lakhs to the accused. In the case at hand the accused has rightly rebutted the presumptions on the basis of complaint, reply to the notice as well as from the cross-examination of the complainant. After having rebutted the presumption, which is acceptable in all the circumstances of the case and on preponderance of probabilities, the burden shifted back to the complainant, which he failed to discharge and there is no question of presumption again under Sections 118 and 139 of N.I. Act, coming to the rescue of the complainant. In the case of RANGAPPA VERSUS SRI MOHAN [ 2010 (5) TMI 391 - SUPREME COURT] , the Hon'ble Supreme Court held that the presumption under Section 139 includes the presumption that there exists legally enforceable debt or liability. Nevertheless, such presumption is rebuttable in nature and it depends on the facts and circumstances of each case. As such, there is no doubt that there is an initial presumption which always favours the complainant. The learned trial Court has thus, considered all the aspects of the case and rightly reached a conclusion that the complainant h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complaint and arrived at an erroneous finding to the effect that the complainant had failed to show that business transaction was completed in respect of which the disputed cheques were issued. He submits that the learned Judge failed to appreciate that once the accused admits the issuance of cheques, burden to prove the defence taken in reply to the statutory notice was upon the accused, who had failed to substantiate the same. The learned counsel took me through the evidence of the witnesses. 5. On the other hand, Shri Singbal, learned counsel appearing for the accused, vehemently argued that if two views are possible and there are no grounds for interference in the judgment of acquittal, the Court should not lightly interfere with the judgment of acquittal. According to the learned counsel, there is no existence of contract to purchase the goods. As per Sale of Goods Act, there cannot be any legal liability. He further submits that there is no evidence on record in order to substantiate the fact that 62 tonnes 500 kgs of scraps were loaded in how many trucks and what was the load of each truck transporting the scrap material. He too took me through the evidence of the witnes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was no legally enforceable debt or liability existed and, therefore, there can be no question of committing any offence punishable under Section 138 of the NIA. 7. It would be interesting to go through the evidence on record, more particularly, cross examination of the complainant - Sheikh Dalal. As already stated herein above, the complaint itself is a de hors of material particulars required for initiating a complaint against the accused, in the sense that, despite having indulged into sale and purchase of scrap material worth Rs. 10 lakhs, there is not a single document placed on record by the complainant nor had he spelt out the date and the manner in which the alleged scrap material was delivered to the accused. 8. In his cross examination, the complainant admits that he does not know the nature of the business of the accused and that the accused had been to his scrap-yard just two days prior to supply of material. It appears that merely because a cheque was taken in advance, the complainant did not insist for any written order from the accused. However, he had unequivocally admitted that the cheque was taken in advance which necessarily means that there was no existenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business. It is apparent that there was no legally enforceable liability or debt against the accused in the absence of any trustworthy evidence of delivery of scrap materiel to the accused and other things as stated herein above. This is significant in the light of the fact that the complainant did admit in his cross-examination that he is an Income Tax payee and had paid Income Tax prior to 2003 but, conveniently says that after 2003 he had not paid the Income Tax. When his attention was drawn to another Criminal Case No. 303/2004/D, wherein he stated that he had produced Income Tax and Sales Tax returns in respect of his business before the Court and he states that he cannot say, as to for which year that refers to. He further unequivocally admits that he does not possess any document or record to show that he had supplied any scrap material to the accused in the year 2004. What else is required to be shown to indicate the falsity of the complainant's case. 9. As already stated herein above, the defence of the accused from his notice reply dated 14.1.2015 vis-a-vis evidence of the accused is that in the month of May 2004 i.e. six months prior to issuance of the cheques, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or other liability. It clearly means that in order to attract an offence under Section 138 of the Act, there should be legally enforceable debt or other liability subsisting on the date of drawal of the cheque. The drawal of the cheque in discharge of existing or past adjudicated liability is sine qua non for bringing an offence under Section 138 of the Act. Here is the case, where the cheque was issued as an advance for shifting and cutting the machinery which could not be accomplished by the complainant and, therefore, it cannot be held that there was an existing debt or liability. The learned counsel appearing for the accused has, therefore, rightly placed a useful reliance on a judgment of the Hon'ble Supreme Court reported in 2014 (2) DCR 417 (M/s Indus Airways Pvt. Ltd. Ors. Vs. M/s. Magnum Aviation Pvt. Ltd. And Anr.). 10. Para 13 of the said judgment, which can be reproduced for advantage, which reads thus:- 13. The explanation appended to Section 138 explains the meaning of the expression 'debt or other liability' for the purpose of Section 138. This expression means a legally enforceable debt or other liability. Section 138 treats dishonoured cheque a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g name of weighing bridge without producing any document to that effect. It is difficult to believe that no receipts were issued after the truck loads are weighed at the weighing machine. 12. In the case of M/s. Kumar Exports Vs. M/s. Sharma Carpets in Criminal Appeal No. 2045 of 2008 (arising out of Special Leave Petition (Criminal) No. 955 of 2007), the Hon'ble Supreme Court has discussed the scope of Sections 139 and 118 of the N.I. Act in paragraphs 11 and 12, which can be reproduced as follows:- 11. The use of the phrase until the contrary is proved in Section 118 of the Act and use of the words unless the contrary is proved in Section 139 of the Act read with definitions of may presume and shall presume as given in Section 4 of the Evidence Act, makes it at once clear that presumptions 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 presumption is over. The accused in a tria ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, thereafter, the presumptions under Sections 118 and 139 of the Act will not again come to the complainant's rescue. 12. The defence of the appellant was that he had agreed to purchase woolen carpets from the respondent and had issued the cheques by way of advance and that the respondent did not supply the carpets. It is the specific case of the respondent that he had sold woolen carpets to the appellant on 6.8.1994 and in discharge of the said liability the appellant had issued two cheques, which were ultimately dishonoured. In support of his case the respondent produced the carbon copy of the bill. A perusal of the bill makes it evident that there is no endorsement made by the respondent accepting the correctness of the contents of the bill. The bill is neither signed by the appellant. On the contrary, the appellant examined one official from the Sales Tax Department, who positively asserted before the Court that the respondent had filed sales tax return for the Assessment Year 1994-95 indicating that no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... coming to the rescue of the complainant. 14. The Hon'ble Supreme Court in Rangappa Vs. Sri Mohan [(2010) 11 SCC 441] in paragraph 26 overruled the ratio of the Hon'ble Supreme Court in the case of Krishna Janardhan Bhat Vs. Dattatraya G. Hegde [(2008) 4 SCC 54] to a very limited extent. Paragraph 26 in Rangappa's case (supra) observed thus:- 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 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 . 15. In Rangappa's case (supra), the Hon'bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ajeetsing Sharma v. State of Maharashtra and Anr. (2005) 5 SCC 294 and Rajesh Ranjan Yadav @ Pappu Yadav v. CBI through its Director (2007) 1 SCC 70] Article 6(2) of he European Convention on Human Rights provides : Everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law. Although India is not bound by the aforementioned Convention and as such it may not be necessary like the countries forming European countries to bring common law into land with the Convention, a balancing of the accused rights and the interest of the society is required to be taken into consideration. In India, however, subject to the statutory interdicts, the said principle forms the basis of criminal jurisprudence. For the aforementioned purpose the nature of the offence, seriousness as also gravity thereof may be taken into consideration. The courts must be on guard to see that merely on the application of presumption as contemplated under Section 139 of the Negotiable Instruments Act, the same may not lead to injustice or mistaken conviction. It is for the aforementioned reasons that we have taken into consideration the decisions operating in the field where th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion under Section 139 of the N.I. Act about which the observations made by the Hon'ble Supreme Court in M/s. Kumar Exports cited supra is a good law. 23. The learned trial Court has thus, considered all the aspects of the case and rightly reached a conclusion that the complainant has failed to prove the case under Section 138 of the N.I. Act and thereby rightly acquitted the accused. The acquittal passed by the trial Court, therefore, cannot be set aside without any sound and sufficient ground. It is a settled law that if two views are possible, then a view which supports acquittal of the accused should not be interfered with lightly. The learned counsel for the accused has, therefore, placed a reliance in the case of John K. Abraham Vs. Simon C. Abrahim another [2014 (1) DCR 9]. Paragraph 10 of the said judgment, reads thus:- 10. Keeping the said statutory requirements in mind, when we examine the facts as admitted by the respondent-complainant, as rightly concluded by the learned trial Judge, the respondent was not even aware of the date when substantial amount of Rs. 1,50,000/- was advanced by him to the appellant, that he was not sure as to who wrote the cheque, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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