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TMI Blog2018 (8) TMI 2153X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the Appellant to disprove the Appellant s case, no contrary evidence whatsoever emerged to that effect nor did he testify despite opportunity afforded to him. Section 139 of the NI Act provides that unless the contrary is proved, the Court shall presume that the holder of a cheque received the cheque of the nature referred to in Section 139 for the discharge, in whole or in part of any debt or other liability. It would appear that the presumption under Section 139 of the NI Act is an extension of the presumption under Section 118(a) of the NI Act which provides that the Court shall presume a negotiable instrument to be one for consideration. If the negotiable instrument happens to be a cheque, Section 139 raises a further presumption that the holder of the cheque received the cheque in discharge in whole or in part of any debt or other liability. Having perused the observations of the learned Trial Court, it may be reasoned that obviously there would be no evidence of an oral agreement by simple virtue of the fact that it was an oral agreement. Despite opportunity afforded to the Respondent, the fact of such oral agreement between the parties was not decimated during cross e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he consent of the Respondent deposited the cheque for realisation at the State Bank of India, Gangtok Main Branch, which however was dishonoured by the Banker of the Respondent/Accused and returned to the Appellant s Banker with the remark - insufficient funds , by their Memo dated 10.09.2014. The Appellant was informed of the said circumstance. On 01.10.2014, the Appellant issued a legal Notice to the Respondent through his Advocate requiring him to pay the amount of the dishonoured cheque within the statutory period of 15 (fifteen) days from the date of service of Notice. The Notice was sent to the place of business of the Respondent but was returned with the remark - addressee out of station . Thereafter, on the Respondent having failed to take steps within the statutory period, the Appellant filed a Complaint before the Court of the learned Chief Judicial Magistrate, East Sikkim at Gangtok, who on examining the Complainant found prima facie materials against the Respondent under Section 138 of the NI Act. On completion of trial, the impugned Judgment of acquittal was pronounced. 4. Advancing his arguments for the Appellant, Learned Counsel would canvass that the learned Trial C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adings and cross-examination of the Appellant would clearly reveal that he had voluntarily invested his money in the share market and not with the Respondent. That, Section 138 of the NI Act makes it clear that the dishonoured cheque by itself does not give rise to a cause of action as the payment can be made on receipt of the legal notice as contemplated in Section 138(b) of the NI Act. Cause of action emanates on failure thereof to make payment within 15(fifteen) days. Further, the legislative mandate is that the Respondent ought to be given an opportunity to rectify or remedy his mistake. It was argued that based on the evidence adduced by the Appellant, it can safely be assumed that he has failed to establish his case and hence the reliefs prayed for may not be granted in favour of the Appellant. To substantiate his submissions, reliance was placed on M.D. Thomas vs. P.S. Jaleel and Another (2009) 14 SCC 398, D. Vinod Shivappa vs. Nanda Belliappa (2006) 6 SCC 456, Bharat Barrel and Drum Manufacturing Company vs. Amin Chand Payrelal AIR 1999 SC 1008, M.S. Narayana Menon alias Mani vs. State of Kerala Anr. AIR 2006 SC 3366, Tribhuwan Prasad Singh vs. State of Jharkhand, through C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ishonoured cheque the drawer shall be liable for conviction if the demand is not met within 15(fifteen) days of the receipt of notice. If the cheque amount is paid within the above period or before the complaint is filed, the legal liability under Section 138 of the NI Act, ceases. It was argued by the Respondent that the dishonoured cheque by itself does not give rise to cause of action and the Respondent ought to be afforded an opportunity to remedy his error. Perusal of the records nowhere indicates any such effort on the part of the Respondent to have acted in compliance of this provision to prevent prosecution. Despite opportunity afforded to the Respondent during the cross-examination of the Appellant to disprove the Appellant s case, no contrary evidence whatsoever emerged to that effect nor did he testify despite opportunity afforded to him. It is not denied that the Respondent issued the cheque, Exhibit-1, in the name of the Appellant on an account maintained by the Respondent, for a sum of Rs.3,00,000/- (Rupees three lakhs) only. The signatures appearing on Exhibit-1, being Exhibit-1(a) and Exhibit-1(b), and identified by the Appellant as the signatures of the Respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roved . Section 4 of the Indian Evidence Act, 1872 which defines may presume and shall presume makes it clear that presumptions to be raised under both the aforesaid provisions are rebuttable. 12. While discussing what a rebuttable presumption is, in Kumar Exports vs Sharma Carpets (2009) 2 SCC 513, the Hon ble Supreme Court would hold that; 19. When a presumption is rebuttable, it only points 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. 13. In Hiten P. Dalal (supra) relied on by the Appellant, the Hon ble Supreme Court would hold as follows; 20. That the four cheques were executed by the appellant in favour of Standard Chartered Bank (hereinafter referred to as the Bank ) has not been denied nor was it in dispute that the cheques were dishonoured because of insufficient funds in the appellant's account with the drawee viz. Andhra Bank. Because of the admitted execution of the four cheques by the appellant, the Bank was entitled to and did in fact rely upon three presumptions in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e as to the burden of proof in criminal cases and shifts the onus on to the accused. (Ibid. at p. 65, para 14) Such a presumption is a presumption of law, as distinguished from a presumption of fact which describes provisions by which the court may presume a certain state of affairs. Presumptions are rules of evidence and do not conflict with the presumption of innocence, because by the latter, all that is meant is that the prosecution is obliged to prove the case against the accused beyond reasonable doubt. The obligation on the prosecution may be discharged with the help of presumptions of law or fact unless the accused adduces evidence showing the reasonable possibility of the non- existence of 14. In Kamala S. vs. Vidhyadharan M.J. and Another (2007) 5 SCC 264 , it was held as follows; 16. The nature and extent of such presumption came up for consideration before this Court in M.S. Narayana Menon Alias Mani v. State of Kerala and Anr. [(2006) 6 SCC 39] wherein it was held: 30. Applying the said definitions of proved or disproved to the principle behind Section 118(a) of the Act, the court shall presume a negotiable instrument to be for consideration unless and until after consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ination under Section 313 of the Cr.P.C. was that the cheque was issued by way of security only and not for encashment. On this aspect, we may look into the meaning of security . As per the Oxford Dictionary security inter alia, means a thing deposited or hypothecated as pledge for fulfilment of undertaking or payment of loan to be forfeited in case of failure . The circumstances of the matter at hand in no way fulfil the ingredients of security as defined supra neither was an attempt made to furnish evidence on this aspect by the Respondent. I hasten to add that this Court is aware that the proof so demanded in offences under Section 138 of the NI Act is not to be beyond a reasonable doubt but only extending to a preponderance of probability. This too, was not established by the Respondent. 17. The learned Trial Court in the impugned Judgment opined that the Complainant himself wilfully invested a sum of Rs.3,00,000/- (Rupees three lakhs) only, in stocks and shares through the Accused and no fraud was pleaded to have been played by the Accused in the transaction. The evidence of the Appellant would indicate that it was on the asking of the Respondent that the investment was made. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such oral agreement between the parties was not decimated during cross examination. The reasoning that the agreement is void for allegedly being devoid of consideration from the Complainant but was merely a unilateral payment from the Accused is also unclear. Although, the learned Trial Court was of the opinion that there is an existence of presumption under Section 118(a) of the NI Act which can be rebutted, he has failed to indicate how the Respondent has rebutted the presumption. The argument of the learned Trial Court that the facts pleaded by the Complainant and his evidence has no foundational facts upon which the presumptions under Section 139 and Section 118(a) of the NI Act, in my considered opinion is erroneous inasmuch as the Appellant has relied on Exhibit-1, the cheque, and the signatures of the Respondent therein, which were not denied by the Respondent and Exhibit-6, his Evidence on Affidavit, in which the facts have been put forth before the learned Trial Court and remained unstained during cross-examination. The issuance of Exhibit-1 as already explained leads to the irrevocable conclusion of acceptance of liability. The reasoning of the learned Trial Court that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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