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TMI Blog2023 (12) TMI 947X X X X Extracts X X X X X X X X Extracts X X X X ..... to be accepted as correct. Testimony of this witness will not make the case of the complainant suspect because the cheque was drawn on Oriental Bank of Commerce and the official of the said bank specifically stated that the cheque was dishonoured due to insufficient funds. Therefore, the next requirement that a cheque was dishonoured due to insufficient funds has been duly established - The complainant stated that he issued the legal notice (Ext. C-3) asking the accused to make the payment within 15 days. Postal receipts (C-4 and C-5) and acknowledgement (C-6) corroborates his testimony. The acknowledgement shows that the registered cover was returned after delivery; therefore, it is duly proved that legal notice was duly served. It was duly proved that the cheque was issued in discharge of the legal liability, which was dishonoured due to insufficient funds and the accused had not made the payment despite receipt of a valid notice of demand - the complainant has proved all the ingredients for the commission of an offence punishable under Section 138 of the Negotiable Instruments Act. The learned Trial Court did not consider the presumption attached to the cheque and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent within 15 days from the date of its receipt. However, the accused failed to pay the amount. Hence, the complaint was filed to take action against the accused. 3. The learned Trial Court recorded the preliminary evidence and found sufficient reasons to summon the accused. When the accused appeared before the learned Trial Court, a notice of accusation was put to him for the commission of an offence punishable under Section 138 of the Negotiable Instruments Act. The accused pleaded not guilty and claimed to be tried. 4. The complainant examined Hem Chand (CW-1), Sohan Singh (CW-2), himself (CW-3), Des Raj (CW-4), and Surinder (CW-5) and closed the evidence. 5. The accused in his statement recorded under Section 313 of Cr.P.C. denied the case of the complainant except that he had issued a cheque. He stated that he was not the Proprietor of Chadha Associates and that he was falsely implicated. He stated that he wanted to lead defence evidence. However, he did not provide any evidence and closed the evidence on 04.01.2011. 6. The learned Trial Court held that no agreement was proved to establish that the accused was to pay some amount to the complainant s father. The com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Trial Court be set aside. 10. Mr T.S.Chauhan, learned Counsel for the respondent/accused supported the judgment passed by the learned Trial Court. He submitted that the burden lies upon the complainant to establish the existence of legally enforceable debt or other liability. The father of the complainant admitted that the accused had no liability towards him orthe complainant. The vehicle was sold to Surinder Singh. The learned Trial Court had rightly held that only Surinder Singh is liable to pay the amount to the complainant or his father. The view taken by the learned Trial Court was a reasonable one, which cannot be interfered with in an appeal against acquittal. Hence, he prayed that the appeal be dismissed. 11 I have given considerable thought to the rival submissions at the bar and have gone through the records carefully. 12. The present appeal has been filed against a judgment of acquittal. The Hon ble Supreme Court laid down the parameters of deciding an appeal against acquittal in Jafarudheen v. State of Kerala, (2022) 8 SCC 440, as under:- Scope of Appeal filed against the Acquittal: 25. While dealing with an appeal against acquittal by invoking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the other hand, denotes a conclusion, which can reasonably be arrived at regardless of the fact where it is agreed upon or not by the higher court. The fundamental distinction between the two situations has to be kept in mind. So long as the view taken by the trial court can be reasonably formed, regardless of whether the High Court agrees with the same or not, the view taken by the trial court cannot be interdicted and that of the High Court supplanted over and above the view of the trial court. 16. It need not be restated that it would be open for the High Court to re-apprise the evidence and conclusions drawn by the Trial Court and in the case of the judgment of the trial court being perverse that is contrary to the evidence on record, then in such circumstances the High Court would be justified in interfering with the findings of the Trial Court and/or reversing the finding of the Trial Court. In GaminiBalaKoteswara Rao v. State of Andhra Pradesh (2009) 10 SCC 636: AIR 2010 SC 589 it has been held by this Court as under: 14. We have considered the arguments advanced and heard the matter at great length. It is true, as contended by Mr Rao, that interference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emerge: (1) An Appellate court has full power to review, reappreciate and reconsider the evidence upon which the order of acquittal is founded. (2) The Criminal Procedure Code, 1973 puts no limitation, restriction or condition on the exercise of such power and an Appellate court on the evidence before it may reach its own conclusion, both on questions of fact and law. (3) Various expressions, such as, substantial and compelling reasons , good and sufficient grounds , very strong circumstances , distorted conclusions , glaring mistakes , etc. are not intended to curtail extensive powers of an Appellate court in an appeal against acquittal. Such phraseologies are more in the nature of flourishes of language to emphasise the reluctance of an Appellate court to interfere with acquittal than to curtail the power of the court to review the evidence and to come to its own conclusion. (4) An Appellate court, however, must bear in mind that in case of acquittal, there is a double presumption in favour of the accused. Firstly, the presumption of innocence is available to him under the fundamental principle of criminal jurisprudence that every person shall be p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the signature on the cheque having been admitted, a presumption shall be raised under Section 139 that the cheque was issued in discharge of debt or liability. 17. This position was reiterated in M/S Kalamani Tex and another Versus P. Balasubramanian 2021 (5) SCC 283, wherein it was held: 14. Adverting to the case in hand, we find on a plain reading of its judgment that the trial Court completely overlooked the provisions and failed to appreciate the statutory presumption drawn under Section 118 and Section 139 of NIA. The Statute mandates that once the signature(s) of an accused on the cheque/negotiable instrument are established, then these reverse onus clauses become operative. In such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him. This point of law has been crystallized by this Court in Rohitbhai Jivanlal Patel v. State of Gujarat (2019) 18 SCC 106, 18 in the following words: In the case at hand, even after purportedly drawing the presumption under Section 139 of the NI Act, the trial court proceeded to question the want of evidence on the part of the complainant as regards the source of funds for advan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the cheque. Section 139 of the N.I. Act reads as hereunder:- 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. 12 Insofar as the payment of the amount by the appellant in the context of the cheque having been signed by the respondent, the presumption for the passing of the consideration would arise as provided under Section 118(a) of N.I. Act which reads as hereunder: - 118. Presumptions as to negotiable instruments - Until the contrary is proved, the following presumptions shall be made: - (a) of consideration - that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration. 13. The above-noted provisions are explicit to the effect that such presumption would remain until the contrary is proved. The learned counsel for the appellant in that regard has relied on the decision of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted, a presumption shall be raised under Section 139 that the cheque was issued in discharge of debt or liability. The question to be looked into is as to whether any probable defence was raised by the accused. In cross-examination of PW1, when the specific question was put that the cheque was issued in relation to a loan of ₹25,000 taken by the accused, PW1 said that he does not remember. PW1 in his evidence admitted that he retired in 1997 on which date he received a monetary benefit of ₹8 lakhs, which was encashed by the complainant. It was also brought in the evidence in the evidence that in the year 2010, the complainant entered into a sale agreement for which he paid an amount of ₹4,50,000 to Balana Gouda towards sale consideration. Payment of ₹4,50,000 being admitted in the year 2010 and a further payment of a loan of ₹ 50,000 with regard to which Complaint No.119 of 2012 was filed by the complainant, copy of which complaint was also filed as Ext. D-2, there was a burden on the complainant to prove his financial capacity. In the years 2010-2011, as per the own case of the complainant, he made a payment of ₹18 lakhs. During his cross-examin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived. It is in the context of this provision that the theory of 'probable defence' has grown. In an earlier judgment, in fact, which has also been adverted to in Basalingappa (supra), this Court notes that Section 139 of the N.I. Act is an example of reverse onus [see (2010) 11 SCC 441). It is also true that this Court has found that the accused is not expected to discharge an unduly high standard of proof. It is accordingly that the principle has developed that all which the accused needs to establish is a probable defence. As to whether a probable defence has been established is a matter to be decided on the facts of each case on the conspectus of evidence and circumstances that exist. 20. Similar is the judgment in P Rasiya vs. Abdul Nazeer 2022 (3) Crimes 343, wherein it was observed : As per Section 139 of the N.I. Act, 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 discharge, in whole or in part, of any debt or other liability. Therefore, once the initial burden is discharged by the Complainant that the cheque was issued by the accused and the signature and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bring about the activation of the presumptive clause. [Bharat Barrel Drum Mfg. Co. v. Amin Chand Payrelal [Bharat Barrel Drum Mfg. Co. v. Amin Chand Payrelal, (1999) 3 SCC 35] ] 36. Recently, this Court has gone to the extent of holding that presumption takes effect even in a situation where the accused contends that a blank cheque leaf was voluntarily signed and handed over by him to the complainant. [Bir Singh v. Mukesh Kumar [Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197 : (2019) 2 SCC (Civ) 309 : (2019) 2 SCC (Cri) 40] ]. Therefore, the mere admission of the drawer's signature, without admitting the execution of the entire contents in the cheque, is now sufficient to trigger the presumption. 37. As soon as the complainant discharges the burden to prove that the instrument, say a cheque, was issued by the accused for discharge of debt, the presumptive device under Section 139 of the Act helps shifting the burden on the accused. The effect of the presumption, in that sense, is to transfer the evidential burden on the accused of proving that the cheque was not received by the Bank towards the discharge of any liability. Until this evidential burden is discharged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... debt/liability. The second option is to prove the non-existence of debt/liability by a preponderance of probabilities by referring to the particular circumstances of the case. The preponderance of probability in favour of the accused's case may be even fifty-one to forty-nine and arising out of the entire circumstances of the case, which includes: the complainant's version in the original complaint, the case in the legal/demand notice, complainant's case at the trial, as also the plea of the accused in the reply notice, his Section 313CrPC statement or at the trial as to the circumstances under which the promissory note/cheque was executed. All of them can raise a preponderance of probabilities justifying a finding that there was no debt/liability . [Kumar Exports v. Sharma Carpets [Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513 : (2009) 1 SCC (Civ) 629 : (2009) 1 SCC (Cri) 823] ] 22. The accused did not lead any evidence to rebut the presumption and has relied upon the statement made by him under Section 313 Cr.P.C. It was held in Sumeti Vij vs. Paramount Tech Fab Industries AIR 2021 SC 1281 that the accused has to lead defence evidence to rebut the presumpti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cheque was issued in his name but he stated that he is a patient of paralysis and the cheque should be issued in the name of his son. The cheque was dishonoured. He stated in his crossexamination that he came to the Court himself. He denied that he had encashed the cheque issued in his name by the accused. He denied that he got a cheque issued in the name of his son by practising fraud. He admitted that Surinder Singh had financed the vehicle sold to him. He did not know that the Finance Company had not approved the transaction. He denied that he and Surinder falsely implicated the accused. He denied that the transaction was complete with Surinder Singh. He admitted that payment was to be made by Surinder Singh after getting the vehicle financed. He denied that the whole of the amount was received and when the accused demanded the cheque, the complainant said that the cheque was misplaced. He denied that a false case was made against the accused. 26. It is apparent from the cross-examination of the witness that the accused did not dispute his liability because it was suggested to him that a cheque was issued in his name and he had got the same encashed. Thus, the liability of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d did not participate in blind-folding the eyes of the witness nor assaulted him. 37. In Rakesh Kumar alias Babli v. State of Haryana reported in (1987) 2 SCC 34, this Court was dealing with an appeal against the judgment of the High Court affirming the order of the Sessions Judge whereby the appellant and three other persons were convicted under Section 302 read with Section 34 of the IPC. While re-appreciating the evidence on record, this Court noticed that in the cross-examination of PW 4, Sube Singh, a suggestion was made with regard to the colour of the shirt worn by one of the accused persons at the time of the incident. This Court taking into consideration the nature of the suggestion put by the defence and the reply arrived at the conclusion that the presence of the accused namely Dharam Vir was established on the spot at the time of occurrence. We quote the following observations made by this Court in paragraphs 8 and 9 as under: 8. PW 3, Bhagat Singh, stated in his examination-inchief that he had identified the accused at the time of occurrence. But curiously enough, he was not crossexamined as to how and in what manner he could identify the accused, as poin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the vehicle for ₹2,10,000/-. He had paid₹50,000/- and got the vehicle financed for ₹1,20,000/-. No agreement was executed between the parties. He did not have any receipt regarding the payment to the Finance Company. He denied that he had not paid the money to the Finance Company; therefore, the remaining payment was stopped. He admitted that he was liable to pay the remaining amount. He had paid the remaining amount to the accused after one week. He admitted that the complainant was his relative. He denied that the account was settled with the complainant and that the accused was falsely implicated. 31. It was suggested to this witness in the crossexamination that he had not paid the money, therefore, the accused had stopped the payment of the balance of the amount. It clearly shows the admission on the part of the accused that he was liable to pay the money to the complainant. The accused nowhere stated that he had stopped the payment of the cheque because the balance amount was not paid by Surinder Singh. Further, the cheque was not dishonoured due to stop payment but due to insufficient funds. This falsifies the suggestion that the accused had stopped th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ors. MANU/KE/5580/2019, that Section 138 of Negotiable Instruments Acts, 1881,nowhere provides that the cheque drawn should be in discharge of drawer's liability alone. It could be in discharge of any debt or other liability . It was observed : - 12. A cheque issued by a guarantor is also a cheque regarded by Section 138 of the N.I. Act as one being issued in discharge of legally enforceable debt. Section 138 of the N.I. Act nowhere provides that the cheque drawn should be in discharge of drawer's liability alone. It could be in discharge of any debt or other liability . In other words, the presumption of consideration under Section 139 of the N.I. Act accrues to guarantor cheques also. 13. A holder of a cheque is entitled to the benefit of legal presumption under Section 118(g) of the N.I. Act that he came into possession of the instrument in due course unless it is shown to have come to the custody of the possessor by means of an offence, fraud or other unlawful means. In this case, the accused had not even put a suggestion to P.W. 1 that the cheque came to his possession otherwise than by lawful means. When the holder becomes a payee, he could successfully p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cheque carries a statutory presumption of consideration. The holder of the cheque in due course is required to prove that the cheque was issued by the accused and that when the same was presented, it was not honoured. Since there is a statutory presumption of consideration, the burden is on the accused to rebut the presumption that the cheque was issued not for any debt or other liability. 38. Therefore, the absence of any agreement will not make the case of the complainant doubtful. 39. Thus, the cross-examination of the complainant or his witness was insufficient to rebut the presumption and it was duly proved on record that the accused had issued a cheque in discharge of his liability. Learned Trial Court erred in holding otherwise. 40. Hem Chand (CW-1) stated that the cheque(Exhibit C-1) was deposited with the bank. The cheque was dishonoured due to insufficient funds. He admitted in his cross-examination that the account of the accused was closed. It is apparent from the statement of this witness that the cheque was dishonoured due to insufficient funds, was not challenged in the cross-examination and has to be accepted as correct. It was laid down by the Hon ble S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lord Halsbury, in a separate but concurring opinion, held as under: My Lords, with regard to the manner in which the evidence was given in this case, I cannot too heartily express my concurrence with the Lord Chancellor as to the mode in which a trial should be conducted. To my mind, nothing would be more absolutely unjust than not to cross-examine witnesses upon evidence which they have given, so as to give them notice, and to give them an opportunity of explanation, and an opportunity very often to defend their own character, and, not having given them such an opportunity, to ask the jury afterwards to disbelieve what they have said, although not one question has been directed either to their credit or to the accuracy of the facts they have deposed to. [59] This Court in a judgment reported as State of U.P. v. Nahar Singh, 1998 3 SCC 561, quoted from Browne to hold that in the absence of cross-examination on the explanation of the delay, the evidence of PW-1 remained unchallenged and ought to have been believed by the High Court. Section 146 of the Evidence Act confers a valuable right of cross-examining the witness tendered in evidence by the opposite party. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d down that the matters sworn to by one party in the pleadings not challenged either in pleadings or cross-examination by other party must be accepted as fully established. The High Court of Calcutta in A.E.G. Carapiet v. A.Y. Derderian 1961 AIR(Cal) 359 has laid down that the party is obliged to put his case in cross-examination of witnesses of the opposite party. The rule of putting one's version in cross-examination is one of essential justice and not merely a technical one. A Division Bench of the Nagpur High Court in Kuwarlal Amritlal v. Rekhlal Koduram 1950 AIR(Nag) 83 has laid down that when attestation is not specifically challenged and the witness is not crossexamined regarding details of attestation, it is sufficient for him to say that the document was attested. If the other side wants to challenge that statement, it is their duty, quite apart from raising it in the pleadings, to cross-examine the witness along those lines. A Division Bench of the Patna High Court in Karnidan Sarda v. Sailaja Kanta Mitra 1940 AIR(Pat) 683 has laid down that it cannot be too strongly emphasised that the system of administration of justice allows of cross-examination of opposite party& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the Court along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the G.C. Act and Section 114 of the Evidence Act. In our view, any other interpretation of the proviso would defeat the very object of the legislation. As observed in Bhaskaran s case (supra), if the giving of notice in the context of Clause (b) of the proviso was the same as the receipt of notice a trickster cheque drawer would get the premium to avoid receiving the notice by adopting different strategies and escape from legal consequences of Section 138 of the Act. (Emphasis supplied) 45. Thus, it was duly proved that the cheque was issued in discharge of the legal liability, which was dishonoured due to insufficient funds and the accused had not made the payment despite receipt of a valid notice of demand. 46. Hence, the complainant has proved all the ingredients for the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ircumstances of the case ? 56. The perversity in the approach of the trial court is noticeable from the way it proceeded to frame a question at trial. According to the trial court, the question to be decided was whether a legally valid and enforceable debt existed qua the complainant and the cheque in question (Ext. CW I/A) was issued in discharge of said liability/debt . When the initial framing of the question itself being erroneous, one cannot expect the outcome to be right. The onus instead of being fixed on the accused has been fixed on the complainant. A lack of proper understanding of the nature of the presumption in Section 139 and its effect has resulted in an erroneous order being passed. 57. Einstein had famously said : If I had an hour to solve a problem, I'd spend 55 minutes thinking about the problem and 5 minutes thinking about solutions. Exaggerated as it may sound, he is believed to have suggested that the quality of the solution one generates is directly proportionate to one's ability to identify the problem. A well-defined problem often contains its own solution within it. 58. Drawing from Einstein's quote, if the issu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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