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TMI Blog2024 (8) TMI 704X X X X Extracts X X X X X X X X Extracts X X X X ..... Khadar, New Delhi, for Rs.25 lacs and demanded a sum of Rs.25 lacs as loan in addition. On 27.11.2009, Respondent sold his property for a consideration of Rs.25 lacs and executed documents in favour of the Petitioner and also handed over physical possession of the property. 3. Respondent obtained a loan of Rs.25 lacs on the same day and executed a promissory note and agreement in favour of the Petitioner and in discharge of the legal debt/liability also issued 7 post-dated cheques, with an assurance that the amount shall be repaid after 6 months and in case it was not paid, Petitioner shall be at liberty to deposit the cheques in his account. Details of the cheques are as follows:- "(i) 005126 dated 30.6.2010 for Rs. 4,00,000/- (ii) 005127 dated 04.7.2010 for Rs. 4,00,000/- (iii) 005128 dated 10.07.2010 for Rs. 4,00,000/- (iv) 005129 dated 14.07.2010 for Rs. 4,00,000/- (v) 005130 dated 20.07.2010 for Rs. 4,00,000/- (vi) 005131 dated 23.07.2010 for Rs. 4,00,000/- (vii) 005132 dated 26.07.2010 for Rs. 1,00,000/- all drawn on Axis Bank Ltd., Greater Noida, UP" 4. The cheques were, however, returned unpaid upon presentation vide the return memos dated 12.07.2010 and 06 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, learned MM heard arguments on 02.05.2016 and vide the impugned judgment dated 23.08.2016, acquitted the Respondent of offence punishable under Section 138 of NI Act. 9. Learned counsel for the Petitioner argues that the impugned judgment is manifestly erroneous and contrary to the law on the subject. Learned Trial Court failed to appreciate that Petitioner through several documents such as his complaint, dishonoured cheques, return memos and legal demand notice raised and established the dual presumptions under Section 139 of the NI Act which provides that 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 of the NI Act for the discharge, in whole or in part, of any debt or other liability. Trial Court overlooked that Respondent admitted in his statement under Section 313 Cr.P.C. that he had signed the promissory note and the agreement as also that he had issued the cheques in question. Receipt of legal notice dated 09.08.2010 was also admitted by the Respondent at the time of framing of notice under Section 251 Cr.P.C. on 30.03.2011. 10. Learned Trial Court did not appreciate that the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... na, 2010 SCC OnLine Del 3294. For the proposition that admission of signature on the cheque is sufficient to prove that the cheque in question was in discharge of legal liability, learned counsel relied on another judgment of this Court in Jaipal Singh Rana v. Swaraj Pal Singh & Anr., 2008 SCC OnLine Del 253. 13. Learned counsel for the Respondent urges that the Trial Court has rightly acquitted the Respondent. It is submitted that Respondent had taken a loan of Rs.25 lacs from the Petitioner for 6 months and executed a promissory note and an agreement as well as issued 7 signed blank cheques and documents pertaining to transfer of the property bearing No. A-240, Madanpur Khadar, New Delhi as security in respect of the loan. It was agreed that on repayment of loan in cash, Petitioner would return the cheques and property documents. However, even before the expiry of 6 months, Respondent returned the entire amount to the Petitioner in February, 2010, through his mother. At the time of return of money, Petitioner returned the cheques purportedly, originals. However, later in the evening, when Respondent's brother checked the documents, it was found that they were coloured photocopie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellate court may review the evidence in appeals against acquittal under Sections 378 and 386 of the Criminal Procedure Code, 1973. Its power of reviewing evidence is wide and the appellate court can re appreciate the entire evidence on record. It can review the Trial Court's conclusion with respect to both facts and law. 2. The accused is presumed innocent until proven guilty. The accused possessed this presumption when he was before the trial Court. The trial Court's acquittal bolsters the presumption that he is innocent. 3. Due or proper weight and consideration must be given to the Trial Court's decision. This is especially true when a witness' credibility is at issue. It is not enough for the High Court to take a different view of the evidence. There must also be substantial and compelling reasons for holding that the trial court was wrong. 70. In light of the above, the High Court and other appellate courts should follow the well-settled principles crystallised by number of judgments if it is going to overrule or otherwise disturb the Trial Court's acquittal: 1. The appellate court may only overrule or otherwise disturb the Trial Court's acquitta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will interfere in appeals against acquittals, only where the Trial Court makes wrong assumptions of material facts or fails to appreciate the evidence properly. If two views are reasonably possible from the evidence on record, one favouring the accused and one against the accused, the High Court is not expected to reverse the acquittal merely because it would have taken the view against the accused had it tried the case. The very fact that two views are possible makes it clear that the prosecution has not proved the guilt of the accused beyond reasonable doubt and consequently the accused is entitled to benefit of doubt...." 11. It is not in dispute that the presumption of innocence is further reinforced, reaffirmed and strengthened against the acquitted accused by the judgment in his favour. (Vide Dara Singh v. Union of India, (2011) 2 SCC 490: (2011) 1 SCC (Cri) 706 (SCC in para 94.)" 18. The Supreme Court in Mohd. Akhtar alias Kari and Others v. State of Bihar and Another, (2019) 2 SCC 513, observed:- "19. .....Interference with an order of acquittal is not permissible on the ground that a different view is possible. If the acquittal is justified on a probable view taken by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 double presumption in favour of the accused. Firstly, the presumption of innocence available to him under the fundamental principle of criminal jurisprudence that every person shall be presumed to be innocent unless he is proved guilty by a competent court of law. Secondly, the accused having secured his acquittal, the presumption of his innocence is further reinforced, reaffirmed and strengthened by the trial Court. (5) If two reasonable conclusions are possible on the basis of the evidence on record, the appellate court should not disturb the finding of acquittal recorded by the trial Court." 7. The Supreme Court in a subsequent judgment in Arulvelu v. State Represented by the Public Prosecutor, (2009) 10 SCC 206 has held as under:- "40. Unquestionably, the Appellate Court has power to review and re-appreciate the entire evidence on record. The appellate court would be justified in reversing the judgment of acquittal only if there are substantial and compelling reasons and when the judgment of the trial Court is found to be per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he payment of the said amount of money to the 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 of other liability means a legally enforceable debt or other liability." 23. It is a settled law that in matters relating to dishonour of cheques, Courts have to consider whether the ingredients of Section 138 of NI Act are made out and if so, whether the accused is able to rebut the statutory presumption under Section 139 of NI Act. In Gimpex Private Limited v. Manoj Goel, (2022) 11 SCC 705, the Supreme Court has delineated the ingredients which form the basis of an offence under Section 138 of NI Act as follows: "(i) The drawing of a cheque by person on an account maintained by him with the banker for the payment of any amount of money to another from that account; (ii) The cheque being drawn for the discharge in whole or in part of any debt or other liability; (iii) Presentation of the cheque to the bank arranged to be paid from that account; (iv) The return of the cheque by the drawee bank as unpaid either because the amount of money standing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ebutting it and proving the contrary as is clear from the use of the phrase "unless the contrary is proved". 35. The Court will necessarily presume that the cheque had been issued towards discharge of a legally enforceable debt/liability in two circumstances. Firstly, when the drawer of the cheque admits issuance/execution of the cheque and secondly, in the event where the complainant proves that cheque was issued/executed in his favour by the drawer. The circumstances set out above form the fact(s) which bring about the activation of the presumptive clause. [Bharat Barrel & Drum Mfg. Co. v. Amin Chand Payrelal. 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]. Therefore, 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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]. 42. The nature of evidence required to shift the evidential burden need not necessarily be direct evidence i.e. oral or documentary evidence or admissions made by the opposite party; it may comprise circumstantial evidence or presumption of law or fact. 43. The accused may adduce direct evidence to prove that the instrument was not issued in discharge of a debt/liability and, if he adduces acceptable evidence, the burden again shifts to the complainant. At the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 08.2010, Ex. CW1/J and original postal receipts, AD Card and UPC, Ex. CW1/K, Ex. CW1/L and Ex. CW1/M. Albeit Respondent had disputed the receipt of the legal notice but the Trial Court has rendered a finding that the same was received by the Respondent and nothing has been shown to this Court to controvert this finding. In light of these admissions, the only question that the Trial Court posed to itself for examination was whether Respondent had any legally enforceable debt or liability to pay the allegedly due amount under the cheques in question to the Petitioner. 27. Having posed this question, learned Trial Court examined the effect of statutory presumption under Section 139 of NI Act and proceeding on the basis of evidence on record and in light of the judicial precedents, returned a finding that Petitioner failed to discharge the burden that had shifted on him in the given facts. 28. Before proceeding to test the impugned judgement, it would be useful to refer to Section 139 of NI Act which provides a presumption in favour of the holder of a cheque/negotiable instrument and is extracted hereunder:- "139. Presumption in favour of holder.-It shall be presumed, unless the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can be drawn. Once those facts are shown by the prosecution to exist, the court can raise the statutory presumption and it would, in such an event, be for the accused to rebut the presumption. The onus even in such cases upon the accused is not as heavy as is normally upon the prosecution to prove the guilt of the accused. If some material is brought on the record consistent with the innocence of the accused which may reasonably be true, even though it is not positively proved to be true, the accused would be entitled to acquittal." 30. In Rangappa v. Sri Mohan, (2010) 11 SCC 441, the Supreme Court observed that presumption under Section 139 of NI Act is rebuttable and it is open to the accused to raise a defence and contest that the cheque was not issued in furtherance of an enforceable debt or liability. It was also held that in the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden and therefore when an accused has to rebut the presumption under Section 139 of NI Act, the standard of proof for doing so is "preponderance of probabilities". This implies that if the accused is able to raise a probable defence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own." 31. In light of these principles, it needs to be examined whether Respondent has succeeded in rebutting the presumption under Section 139 of NI Act. Respondent set up a defence that he had taken a loan of Rs.25 lacs from the Petitioner for 6 months and executed promissory note and agreement as also issued 7 signed blank cheques and documents pertaining to transfer of property but as security for the loan. It was agreed between the parties that repayment of loan would be in cash whereafter Petitioner would return the original cheques and property documents. Respondent's case was that he repaid Rs.25 lacs in cash to the Petitioner through his mother in February, 2010, but Petitioner instead of returning the original documents, deliberately and fraudulently handed over only coloured photocopies thereof to his mother, who was unable to discern the difference. Despite receiving the money, Petitioner misused the security cheques and filed the present complaint. 32. Respondent testified in his evidence that he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Respondent's mother in the garb of returning the original documents. 34. Significantly, Trial Court notices that allegedly both payment for purchase of property as well as advancement of loan were done in cash on 27.11.2009, meaning thereby Petitioner had advanced Rs. 50 lacs in cash to the Respondent on the same date. In his cross-examination, when questioned about his financial capacity, Petitioner claimed that he had an annual income of approximately Rs.23.10 to Rs.25.10 lacs, in addition to funds after selling one of his properties albeit no evidence was produced to substantiate the stand. When questioned on the ownership of the property allegedly sold to collect funds, Petitioner admitted that the old haveli was of his father and the sale consideration was a contribution by his father, however, father was never examined to prove this stand and therefore rightly, Trial Court concluded that there were doubts on availability of Rs.50 lacs with the Petitioner on the relevant day. Trial Court also notes that Petitioner never produced his income tax return and/or failed to show the loan transaction in his ITR and relied on the judgment of this Court in Kulvinder Singh v. Kafeel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complainant having any explanation regarding the manner and occasion of accused availing the same, doubts over availability of funds to the extent of Rs.50 lacs with the complainant, failure of complainant to show the alleged two separate transaction of purchase of property and loan, raise doubts over the complainant version and defence of the accused appears to be probable. Consequently, presumption u/s 139 of the act stands rebutted. 25. Once presumption u/s 139 N.I. Act is rebutted, burden of proof shifts upon the complainant to prove his case as a matter of fact. As discussed above, the complainant has failed to prove existence of two seperate transaction of sale/transfer of property and loan for Rs.25 lacs each and non-payment by the accused towards the loan in question. Accused Kalyan Singh is accordingly acquitted of offence punishable u/s 138 of the Act." 37. Having carefully gone through the evidence as noted above, this Court is unable to find any infirmity in the finding of the Trial Court that Respondent was able to set up a plausible defence, which on the principle of preponderance of probability, rebutted the presumption in favour of the Petitioner under Section 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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