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TMI Blog2024 (9) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... held that a cheque issued as security is not a waste paper and complaint under Section 138 of the N.I. Act can be filed on its dishonour. The accused admitted that she had received a notice and claimed that she came to know about the dishonour after the receipt of the notice. Therefore, the receipt of the notice is not disputed - it was duly proved on record that the accused had issued a cheque in discharge of her legal liability and the cheque was dishonoured due to insufficient funds and the accused failed to repay the amount despite the receipt of valid notice of demand. Therefore, all the ingredients of Section 138 of the NI Act were duly satisfied. The amount of compensation of ₹2,40,000/- is not excessive and no interference is required with the same. The present revision fails and the same is dismissed. - Hon ble Mr Justice Rakesh Kainthla, Judge For the Petitioner : Mr. Mukesh Sharma, Advocate For the Respondent : Mr. Dalip K. Sharma, Advocate ORDER Rakesh Kainthla, Judge The present revision is directed against the judgment dated 2.5.2022, passed by learned Additional Sessions Judge, Kinnaur at Rampur Bushahr (learned First Appellate Court), vide which the appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not dispute the issuance of the cheque. She also admitted the fact that she had borrowed the money. Her defence that she had paid the money to the complainant was not established. The statements of defence witnesses were not reliable and the accused had failed to rebut the presumption contained in Section 139 of the NI Act. The cheque was presented before the bank and was dishonoured due to insufficient funds. Therefore, the accused was convicted for the commission of an offence punishable under Section 138 of the NI Act and she was sentenced to undergo simple imprisonment for one year and to pay an amount of ₹2,40,000/- as compensation. 6. Being aggrieved from the judgment and order passed by the learned Trial Court, the accused preferred an appeal, which was decided by the learned Additional Sessions Judge. Learned Appellate Court held that taking of the loan was not disputed. The signature on the cheque was also undisputed. The claim of the accused that she had paid the amount to the complainant was not proved. The cheque was dishonoured due to insufficient funds. The accused had failed to make the payment despite the receipt of a valid notice of demand; hence, the appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e commission of an offence punishable under Section 138 of the NI Act; hence, he prayed that the present revision be dismissed. 11. I have given considerable thought to the submissions at the bar and have gone through the records carefully. 12. It was laid down by the Hon ble Supreme Court in Malkeet Singh Gill v. State of Chhattisgarh, (2022) 8 SCC 204: (2022) 3 SCC (Cri) 348: 2022 SCC OnLine SC 786 that the revisional court is not an appellate jurisdiction and it can only rectify the patent defect, errors of jurisdiction or the law. It was observed on page 207: 10. Before adverting to the merits of the contentions, at the outset, it is apt to mention that there are concurrent findings of conviction arrived at by two courts after a detailed appreciation of the material and evidence brought on record. The High Court in criminal revision against conviction is not supposed to exercise the jurisdiction like to the appellate court and the scope of interference in revision is extremely narrow. Section 397 of the Criminal Procedure Code (in short CrPC ) vests jurisdiction for the purpose of satisfying itself or himself as to the correctness, legality or propriety of any finding, sentence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manner. One of the inbuilt restrictions is that it should not be against an interim or interlocutory order. The Court has to keep in mind that the exercise of revisional jurisdiction itself should not lead to injustice ex-facie. Where the Court is dealing with the question as to whether the charge has been framed properly and in accordance with law in a given case, it may be reluctant to interfere in the exercise of its revisional jurisdiction unless the case substantially falls within the categories aforestated. Even framing of charge is a muchadvanced stage in the proceedings under the CrPC. 14. The present revision has to be decided as per the parameters laid down by the Hon ble Supreme Court. 15. The accused admitted in her statement recorded under Section 313 of Cr.P.C. that she had borrowed ₹3.00 lacs. She admitted that she had handed over the cheque. She stated that she had paid the amount to the complainant. She appeared as DW1 and stated that she had borrowed ₹3.00 lacs from the complainant by means of a cheque for ₹3,05,000/-. She had returned ₹5,000/- on the date of handing over of the cheque. She handed over three cheques to the complainant as s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to D3) were issued. He admitted that the accused had deposited ₹12,000/- in the account. It was not suggested to the complainant that accused had returned ₹65,000/- in cash in addition to the money deposited by her. Therefore, the learned Trial Court had rightly held that the amount of ₹53,131/- is to be included with the amount of ₹65,000/- stated to be paid by the accused to the complainant. 20. The accused has not disputed the receipt of the cheque and loan of ₹3,05,000/-. She admitted this fact in her statement on oath. She claimed that the complainant had taken ₹5,000/- on that day but there is no proof of this fact. She has not disputed that the cheque bears her signature. She had taken a loan of ₹3,05,000/- out of which only ₹53,131/- was shown to have been paid. The complainant stated that the accused had paid ₹ 65,000/- to him; therefore, she had a liability of ₹2,40,000/- for which the cheque was issued and the judgment of the Hon ble Supreme Court in Dashrathbhai Trikambhai Patel will not apply to the present case. 21. The accused admitted her signatures on the cheque. It was laid down by this Court in Naresh Ve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his 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 advancing loan to the accused and want of examination of relevant witnesses who allegedly extended him money for advancing it to the accused. This approach of the trial court had been at variance with the principles of presumption in law. After such presumption, the onus shifted to the accused and unless the accused had discharged the onus by bringing on record such facts and circumstances as to show the preponderance of probabilities tilting in his favour, any doubt on the complainant's case could not have been raised for want of evidence regarding the source of funds for advancing loan to the appellant-accused .. 15. Once the 2nd Appellant had admitted his signatures on the cheque and the Deed, the trial Court ought to have presumed that the cheque was issued as consideration for a legally enforceable debt. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed is required to lead the evidence to rebut such presumption. The accused was required to lead evidence that the entire amount due and payable to the complainant was paid. 9. Coming back to the facts in the present case and considering the fact that the accused has admitted the issuance of the cheques and his signature on the cheque and that the cheque in question was issued for the second time after the earlier cheques were dishonoured and that even according to the accused some amount was due and payable, there is a presumption under Section 139 of the NI Act that there exists a legally enforceable debt or liability. Of course, such presumption is rebuttable in nature. However, to rebut the presumption, the accused was required to lead the evidence that the full amount due and payable to the complainant had been paid. In the present case, no such evidence has been led by the accused. The story put forward by the accused that the cheques were given by way of security is not believable in the absence of further evidence to rebut the presumption and more particularly the cheque in question was issued for the second time after the earlier cheques were dishonoured. Therefore, both t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns 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 Court in K. Bhaskaran vs. Sankaran Vaidhyan Balan Anr., 1999 (7) SCC 510 wherein it is held as hereunder: 9. As the signature in the cheque is admitted to be that of the accused, the presumption envisaged in Section 118 of the Act can legally be inferred that the cheque was made or drawn for consideration on the date on which the cheque bears. Section 139 of the Act enjoins the Court to presume that the holder of the cheque received it for the discharge of any debt or liability. The burden was on the accused to rebut the aforesaid presumption. The Trial Court was not persuaded to rely on the interested testimony of DW-1 to rebut the presumption. The said finding was upheld by the High Court. It is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 crossexamination, when the financial capacity to pay ₹ 6 lakhs to the accused was questioned, there was no satisfactory reply given by the complainant. The evidence on record, thus, is a probable defence on behalf of the accused, which shifted the burden on the complainant to prove his financial capacity and other facts. 15. In that light, it is contended that the very materials produced by the appellant and the answers relating to lack of knowledge of property details by PW-1 in his cross-examination would indicate that the transaction is doubtful and no evidence is tendered to indicate that the amount was paid. In such an event, it was not necessary for the respondent to tender rebuttal evidence but the case put forth would be sufficient to indicate that the respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 issuance of the cheque is not disputed by the accused, in that case, the onus will shift upon the accused to prove the contrary that the cheque was not for any debt or other liability. The presumption under Section 139 of the N.I. Act is a statutory presumption and thereafter, once it is presumed that the cheque is issued in whole or in part of any debt or other liability which is in favour of the Complainant/holder of the cheque, in that case, it is for the accused to prove the contrary. 28. This position was reiterated in Rajesh Jain v. Ajay Singh, (2023) 10 SCC 148: 2023 SCC OnLine SC 1275 wherein it was observed at page 161: 33. The NI Act provides for two presumptions: Section 118 and Section 139. Section 118 of the Act inter alia directs that it shall be presumed until the contrary is prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rge 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 by the accused, the presumed fact will have to be taken to be true, without expecting the complainant to do anything further. 38. John Henry Wigmore [John Henry Wigmore and the Rules of Evidence: The Hidden Origins of Modern Law] on Evidence states as follows: The peculiar effect of the presumption of law is merely to invoke a rule of law compelling the Jury to reach the conclusion in the absence of evidence to the contrary from the opponent but if the opponent does offer evidence to the contrary (sufficient to satisfy the Judge's requirement of some evidence), the presumption disappears as a rule of law and the case is in the Jury's hands free from any rule . 39. The standard of proof to discharge this evidential burden is not as heavy as that usually seen in situations where the prosecution is required to prove the guilt of an accused ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SCC 539: (2014) 5 SCC (Civ) 138: (2014) 6 SCC (Cri) 845] with reference to the explanation to Section 138 of the Act and the expression for discharge of any debt or other liability occurring in Section 138 of the Act. We are of the view that the question whether a post-dated cheque is for discharge of debt or liability depends on the nature of the transaction. If on the date of the cheque, liability or debt exists or the amount has become legally recoverable, the section is attracted and not otherwise. 10. Reference to the facts of the present case clearly shows that though the word security is used in Clause 3.1(iii) of the agreement, the said expression refers to the cheques being towards repayment of instalments. The repayment becomes due under the agreement, the moment the loan is advanced and the instalment falls due. It is undisputed that the loan was duly disbursed on 28-2- 2002 which was prior to the date of the cheques. Once the loan was disbursed and instalments have fallen due on the date of the cheque as per the agreement, dishonour of such cheques would fall under Section 138 of the Act. The cheques undoubtedly represent the outstanding liability. 11. The judgment in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as security is not a waste paper and complaint under Section 138 of the N.I. Act can be filed on its dishonour. It was observed: 17. A cheque issued as security pursuant to a financial transaction cannot be considered as a worthless piece of paper under every circumstance. 'Security' in its true sense is the state of being safe and the security given for a loan is something given as a pledge of payment. It is given, deposited or pledged to make certain the fulfilment of an obligation to which the parties to the transaction are bound. If in a transaction, a loan is advanced and the borrower agrees to repay the amount in a specified timeframe and issues a cheque as security to secure such repayment; if the loan amount is not repaid in any other form before the due date or if there is no other understanding or agreement between the parties to defer the payment of the amount, the cheque which is issued as security would mature for presentation and the drawee of the cheque would be entitled to present the same. On such presentation, if the same is dishonoured, the consequences contemplated under Section 138 and the other provisions of N.I. Act would flow. 18. When a cheque is is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otiable Instruments Act even if the cheque is filled by some other person. It was observed: 33. A meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted. 34. If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence. 35. It is not the case of the respondent accused that he either signed the cheque or parted with it under any threat or coercion. Nor is it the case of the respondent accused that the unfilled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nfidence in the public about the transaction carried with the cheque. It was laid down by the Hon ble Supreme Court in Bir Singh vs. Mukesh Kumar 2019 (4) SCC 197 that the penal provision of Section 138 is a deterrent in nature. It was observed : 9. The object of Section 138 of the Negotiable Instruments Act is to infuse credibility into negotiable instruments including cheques and to encourage and promote the use of negotiable instruments including cheques in financial transactions. The penal provision of Section 138 of the Negotiable Instruments Act is intended to be a deterrent to the callous issuance of negotiable instruments such as cheques without serious intention to honour the promise implicit in the issuance of the same. 41. In view of this consideration, the sentence of one year is not excessive. 42. Learned Trial Court had awarded the compensation of ₹2,40,000/-. The cheque was issued for ₹ 2,40,000/-. It was laid down by the Hon ble Supreme Court in M/S Kalamani Tex and another Versus P. Balasubramanian JT 2021(2) SC 519 that the Courts should uniformly levy a fine up to twice the cheque amount along with simple interest at the rate of 9% per annum. It was o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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