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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 ..... esumption under Section 139 of NI Act. Coming to the present case, the undisputed position that obtains is that Respondent admitted execution of promissory note Ex. CW1/B and agreement Ex. CW1/C as well as his signatures on 7 cheques in question Ex. CW1/E and Ex. CW1/H-1 to Ex. CW1/H-6. It is also established through cheque return memos dated 12.07.2010 and 06.08.2010, Ex. CW1/F and by Ex. CW1/I-1 to Ex. CW1/I-6, that on presentation with the bank, all 7 cheques were returned unpaid with remarks Funds Insufficient . Whether Respondent had any legally enforceable debt or liability to pay the allegedly due amount under the cheques in question to the Petitioner? - HELD THAT:- Reading Section 139 and applying the same, there is little doubt that since Petitioner was the holder of the cheques in question and the signatures on the cheques were not denied by the Respondent, presumption shall be drawn that the cheques were issued for discharge of a debt or other liability. The presumption under Section 139 of NI Act is, however, a rebuttable presumption. At this stage, I may allude to observations of the Supreme Court in BASALINGAPPA VERSUS MUDIBASAPPA [ 2019 (4) TMI 660 - SUPREME COURT ], ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Kumar Saini, Advocate. JUDGEMENT JYOTI SINGH, J. 1. By this petition, Petitioner seeks leave to appeal against the impugned judgment dated 23.08.2016 passed by learned Metropolitan Magistrate-03 (NI-Act), South East, Saket, New Delhi, in complaint case being CC No. 871/2015 titled Krishan Bidhuri v. Kalyan Singh under Section 138 of Negotiable Instruments Act, 1881 (hereinafter referred to as NI Act ), whereby Respondent was acquitted. Petitioner herein was the complainant before the Trial Court and Respondent was the accused and parties are hereinafter referred to by their litigating status before this Court. 2. Factual matrix as per the Petitioner is that, in November, 2009, Respondent required a loan of Rs. 50 lacs from the Petitioner, but Petitioner refused to oblige. Later Respondent offered to sell his property bearing No. A-240, Madanpur 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 e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... took a defence that Rs.25 lacs had already been repaid to the Petitioner and Petitioner had returned him photocopies of the cheques along with photocopy of the agreement, upon payment and Petitioner thereafter misused the cheques and filed the complaint. 7. Respondent being the accused led defence evidence and examined Sh. Rishabh Dhawan, Assistant Manager of Axis Bank, Greater Noida, Uttar Pradesh as DW-1 and stepped into the witness box himself as DW-2. Respondent produced the following documents: i. Certified Copy of plaint in suit no: 383/2010 titled as 'Kalyan Singh Vs Suman Ors Ex.DW2/1 ii. Certified copies of written statement filed by complainant herein along with wife and children of accused in CS NO: 383/2010. Ex.DW2/2 8. After the evidence was concluded, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned Trial Court failed to appreciate that Respondent only made a bald statement that cheques were issued as security and/or the loan amount was repaid but led no evidence to corroborate the same, while on the other hand, Petitioner has a statutory presumption in his favour under Section 139 of NI Act in view of the admission of the Respondent that he had issued the cheques bearing his signatures, which were dishonoured. Petitioner proved receipt of legal notice by the Respondent and non-payment of the cheques amount within 15 days. Petitioner led evidence to show that the cheques were issued in discharge of an enforceable debt/liability and hence, there was no reason to acquit the Respondent. Reliance was placed on the judgment of this Court in V.S. Yadav v. Reena, 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 submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellate Court has, no doubt, wide powers to re-appreciate the evidence in an appeal against acquittal and come to a different conclusion, on facts and law, but there is no gainsaying that this power must be exercised with due care and caution since the presumption of innocence at the start of the trial is strengthened by acquittal of the accused by a judicial order. The Supreme Court in Ghurey Lal v. State of Uttar Pradesh, (2008) 10 SCC 450 , elucidated and crystallized the principles that the Courts are required keep in mind as guiding light, when deciding an appeal against a judgment of the Trial Court acquitting the accused and relevant passages from the said judgment are as under:- 69. The following principles emerge from the cases above: 1. The 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 wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... power and jurisdiction of the High Court while interfering in an appeal against acquittal. It is well settled principle of law that the High Court should not interfere in the well-reasoned order of the Trial Court which has been arrived at after proper appreciation of the evidence. The High Court should give due regard to the findings and the conclusions reached by the trial court unless strong and compelling reasons exist in the evidence itself which can dislodge the findings itself. This principle has further been elucidated in Sambhaji Hindurao Deshmukh v. State of Maharashtra, (2008) 11 SCC 186 : (2009) 2 SCC (Cri) 464, SCC para 13, wherein this Court observed that : (SCC pp. 190-91) 13. The High Court 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Criminal Procedure Code, 1973 puts no limitation, restriction or condition on exercise of such power and an appellate Court on the evidence before it may reach its own conclusion, both on questions of fact and of 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 emphasize 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 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, re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice; in writing, to the drawer of the cheque, 3[within thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and (c) the drawer of such cheque fails to make the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any debt or liability . It will be seen that the presumed fact directly relates to one of the crucial ingredients necessary to sustain a conviction under Section 138. 34. Section 139 of the NI Act, which takes the form of a shall presume clause is illustrative of a presumption of law. Because Section 139 requires that the Court shall presume the fact stated therein, it is obligatory on the Court to raise this presumption in every case where the factual basis for the raising of the presumption had been established. But this does not preclude the person against whom the presumption is drawn from rebutting 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. Am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consider the non-existence of debt/liability so probable that a prudent man ought, under the circumstances of the case, to act upon the supposition that debt/liability did not exist. [ Basalingappa v. Mudibasappa; see also Kumar Exports v. Sharma Carpets ]. 41. In other words, the accused is left with two options. The first option of proving that the debt/liability does not exist is to lead defence evidence and conclusively establish with certainty that the cheque was not issued in discharge of a 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 preponderanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d execution of promissory note Ex. CW1/B and agreement Ex. CW1/C as well as his signatures on 7 cheques in question Ex. CW1/E and Ex. CW1/H-1 to Ex. CW1/H-6. It is also established through cheque return memos dated 12.07.2010 and 06.08.2010, Ex. CW1/F and by Ex. CW1/I-1 to Ex. CW1/I-6, that on presentation with the bank, all 7 cheques were returned unpaid with remarks Funds Insufficient . The legal notice demanding the allegedly unpaid amount was dispatched to the accused within statutory period of 30 days is also established by the copy of the legal notice dated 09.08.2010, 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 ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... presumption is rebutted by the prosecution by production of evidence as may show him to be guilty of the offence with which he is charged. The burden of proving the guilt of the accused is upon the prosecution and unless it relieves itself of that burden, the courts cannot record a finding of the guilt of the accused. There are certain cases in which statutory presumptions arise regarding the guilt of the accused, but the burden even in those cases is upon the prosecution to prove the existence of facts which have to be present before the presumption 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 Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of preponderance of probabilities . Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts executed between the parties and attested by notary public on 27.11.2009 remained with him and the transfer documents of the property were handed over to his subsequent purchaser. A specific suggestion was put to the Petitioner that he had fraudulently handed over coloured photocopies to Respondent s mother but no explanation was offered by the Petitioner as to how coloured photocopies reached the Respondent. Silence of the Petitioner on this aspect supports the defence of the Respondent that these were handed over by the Petitioner 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 alleg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed huge sum of Rs. 50 lacs and failed to reflect it in his Income Tax Return which raised doubt on the version of the complainant regarding seperate sale and loan transactions. 24. In the background of the circumstances discussed herein above more specifically, the execution of agreements Ex. CW1/D-8 reflecting the execution of documents regarding transfer/sale of said property as security for loan of Rs.25 lacs, availability of color photocopy of documents executed on 27.11.2009 in the possession of the accused, without 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 sa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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