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TMI Blog2024 (9) TMI 453X X X X Extracts X X X X X X X X Extracts X X X X ..... resumption that he is innocent.' 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 whether the accused is able to rebut the statutory presumption under Section 139 of NI Act. In light of the evidence on record, Appellate Court concluded that the defence of the Respondent was a plausible one that he had given the cheque of Rs. 8 lacs for investment and he was able to successfully rebut the presumption under Sections 118 and 139 of NI Act and that no evidence came on record to substantiate that Petitioner had advanced a loan of Rs. 14 lacs to the Respondent. This Court finds no infirmity in this conclusion and in this context, the judgment of the Supreme Court in Kundan Lal Rallaram v. The Custodian, Evacuee Property Bombay, [ 1961 (3) TMI 100 - SUPREME COURT] perused, where the Supreme Court observed that when the creditor failed to produce his account books, the Court can raise a presumption of the fact under Section 114 of the Indian Evidence Act that the evidence if produced would have shown the non-existence of the consideration. Thus, no interference is warranted in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Negotiable Instruments Act, 1881 (hereinafter referred to as NI Act ). 4. Pre-summoning evidence was led by the Petitioner by examining himself as CW-1 and tendering his affidavit Ex.C1, in which he reiterated the allegations made in the complaint. Following documents were exhibited by the Petitioner:- (i) Return Memo dated 19.03.2012 as Ex.CW1/1; (ii) Cheque bearing No. 550403 as Ex.CW1/2; (iii) Return Memo dated 10.04.2012 as Ex.CW1/3; (iv) Copy of legal notice as Ex.CW1/4; (v) Copies of Postal receipts as Ex.CW1/5 and CW1/6; and (vi) Computer generated tracking report as Ex.CW1/7. 5. Summons were issued to the Respondent. Notice was framed by the learned MM on 14.09.2012 under Section 251 Cr.P.C. Respondent pleaded not guilty and claimed trial. Petitioner led evidence and examined two witnesses. Petitioner examined himself as CW-1 and adopted the contents of his affidavit Ex.C1 already tendered at the stage of pre-summoning evidence. He relied on the aforementioned documents and additionally on the following documents: (i) ITR Acknowledgement as Ex.CW1/8 (colly); and (ii) Copy of certificate issued by RMP Global Events as Ex.CW1/9 (OSR). 6. Petitioner examined Sh. Ashok Sehrawa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gned on the same, a presumption would arise in favour of the Petitioner as a holder of the cheque under Sections 118 and 139 of NI Act and Respondent had failed to rebut the presumption. As per the Trial Court, ingredients of Section 138 NI Act were satisfied and Respondent was guilty of the offence charged. Respondent was admitted to bail on furnishing a personal bond in the sum of Rs. 30,000/- with one surety of the like amount, which was furnished on the same date and accepted till 07.11.2015. 9. The judgment of the Trial Court was assailed by the Respondent before the learned Additional Sessions Judge in criminal appeal being CA No. 43/2015 and vide judgment dated 09.06.2016, the Appellate Court allowed the appeal and set aside the judgment of the Trial Court as well as the order on sentence and acquitted the Respondent. In the opinion of the Appellate Court, Respondent was able to rebut the presumption arising in favour of the Petitioner under Sections 118 and 139 NI Act and his defence was probable. Cheque in question was given for the purpose of investment only and not towards discharge of liability of Rs. 14 lacs loan allegedly taken from the Petitioner and that there was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in good faith, the cheque of Rs. 8 lacs was issued by the Respondent for investment in flats in Lok Nayak Puram. As per the allegation levelled by the Respondent, Petitioner had deliberately stopped payment of the said cheque of Rs. 18 lacs, which was returned by the Bank vide return memo dated 29.03.2012. Petitioner urged that this entire story was fabricated by the Respondent and stand of the Petitioner was vindicated when he was acquitted in the criminal case originating out of a complaint filed by the Respondent under Section 138/142 NI Act and it was held by the Court that the signatures appearing on the cheque of Rs. 18 lacs were forged. This shows that the Respondent is habitual of making false statements and claims. 12. It was argued that Petitioner proved before the Trial Court that the cheque Ex.CW1/2 was issued by the Respondent in discharge of liability towards the loan taken from the Petitioner, through documentary and oral evidence and his deposition as CW-1 was duly corroborated by CW-2 Ashok Sehrawat, the then Branch Manager of the concerned Bank, in whose presence the cheque was given. Appellate Court failed to appreciate that the Respondent did not lead defence e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Respondent as there is no such admission on record. Reliance was placed by learned counsel on the judgment of the Supreme Court in P. Rasiya v. Abdul Nazer and Another, 2022 SCC OnLine SC 1131 , wherein it was held that presumption under Section 139 NI Act favours the holder of a cheque whereby it is presumed that the cheque was received for discharge of any debt or liability and onus is upon the accused to prove that the cheque was not for the discharge of any such debt or liability. 15. Learned counsel for the Respondent submitted that there are no grounds for leave to appeal against the impugned judgment as the judgment of the Appellate Court is a well-reasoned judgment, based on material before the Court and the evidence led by the Petitioner. No doubt that Respondent admitted issuing the cheque in question as well as the signatures on it and this gave rise to a presumption in law in favour of the Petitioner under Section 139 NI Act, however, the presumption is a rebuttable one. It is open to the accused to rebut the presumption and in doing so, he is only required to set up a probable defence. In the present case, Respondent was able to establish that he had issued the che ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de 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 to keep in mind as guiding light, when deciding an appeal against a judgment 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 was before the trial Court. The trial Court's acq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erfering 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 that the prosecution has not proved the guilt of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... striction 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, reaffirmed and strengthened by the trial Court. (5) If ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce 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, 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. 25. 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 whether the accused is able to rebut the statutory presumption under Section 139 of NI Act. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... occasion to consider Section 118 (a) of the Act. This Court held that once execution of the promissory note is admitted, the presumption under Section 118 (a) would arise that it is supported by a consideration. Such a presumption is rebuttable and defendant can prove the non-existence of a consideration by raising a probable defence. In para 12, the following has been laid down: (SCC pp. 50-51) 12. Upon consideration of various judgments as noted hereinabove, the position of law which emerges is that once execution of the promissory note is admitted, the presumption under Section 118 (a) would arise that it is supported by a consideration. Such a presumption is rebuttable. The defendant can prove the non-existence of a consideration by raising a probable defence. If the defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the plaintiff who will be obliged to prove it as a matter of fact and upon his failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument. The burden upon the defendant of proving the non- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereof in relation to the lands presumed to be retained by the landowners but the same would not mean that the words shall presume would be conclusive. The meaning of the expressions may presume and shall presume have been explained in Section 4 of the Evidence Act, 1872, from a perusal whereof it would be evident that whenever it is directed that the court shall presume a fact it shall regard such fact as proved unless disproved. In terms of the said provision, thus, the expression shall presume cannot be held to be synonymous with conclusive proof . 15. It was noted in M.S. Narayana Menon case [M.S. Narayana Menon v. State of Kerala, (2006) 6 SCC 39 : (2006) 3 SCC (Cri) 30], that the expression shall presume cannot be held to be synonymous with conclusive proof. Referring to definition of words proved and disproved under Section 3 of the Evidence Act, 1872 the following was laid down in para 30: (SCC p. 50) 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 considering the matter before it, it either believes that the considerati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a defence on the part of an accused is preponderance of probabilities . Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which he relies. 19. In Kumar Exports v. Sharma Carpets [Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513 : (2009) 1 SCC (Civ) 629 : (2009) 1 SCC (Cri) 823], this Court again examined as to when the complainant discharges the burden to prove that the instrument was executed and when the burden shall be shifted. In paras 18 to 20, the following has been laid down: (SCC p. 520) 18. Applying the definition of the word proved in Section 3 of the Evidence Act to the provisions of Sections 118 and 139 of the Act, it becomes evident that in a trial under Section 138 of the Act a presumption will have to be made that every negotiable instrument was made or drawn for consideration and that it was executed for discharge of debt or liability once the execution of negotiable instrument is either proved or admitted. As soon as the complainant discharges the burden to prove that the instrument, say a note, was executed by the accused, the rules of presumptions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to dishonour of cheque under Section 138. The High Court had reversed [ Mohan v. Rangappa, 2005 SCC OnLine Kar 783] the judgment of the trial court convicting the accused. In the above case, the accused had admitted signatures on the cheque. This Court held that where the fact of signature on the cheque is acknowledged, a presumption has to be raised that the cheque pertained to a legally enforceable debt or liability, however, this presumption is of a rebuttal nature and the onus is then on the accused to raise a probable defence. In para 13, the following has been laid down: (SCC p. 446) 13. The High Court in its order [ Mohan v. Rangappa, 2005 SCC OnLine Kar 783 ] noted that in the course of the trial proceedings, the accused had admitted that the signature on the impugned cheque (No. 0886322 dated 8-2-2001) was indeed his own. Once this fact has been acknowledged, Section 139 of the Act mandates a presumption that the cheque pertained to a legally enforceable debt or liability. This presumption is of a rebuttal nature and the onus is then on the accused to raise a probable defence. With regard to the present facts, the High Court found that the defence raised by the accused was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the defendant-accused cannot be expected to discharge an unduly high standard of proof. 28. In the 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aising 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. 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 co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proof for doing so is that of preponderance of probabilities and if the accused is able to raise a probable defence which creates a doubt on the existence of a legally enforceable debt or liability, prosecution can fail and in doing so, accused can rely on material 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. Relevant passages are as follows:- 23. The respondent claimant has also referred to the decision reported as Mallavarapu Kasivisweswara Rao v. Thadikonda Ramulu Firm [(2008) 7 SCC 655] , wherein it was observed: (SCC p. 660, para 17) 17. Under Section 118 (a) of the Negotiable Instruments Act, the court is obliged to presume, until the contrary is proved, that the promissory note was made for consideration. It is also a settled position that the initial burden in this regard lies on the defendant to prove the non-existence of consideration by bringing on record such facts and circumstances which would lead the court to believe the non-existence of the consideration either by direct evidence or by preponderance of probabilities showing that the existence of co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct upon the plea that it did not exist. (emphasis supplied) Interestingly, the very same extract has also been approvingly cited in Krishna Janardhan Bhat [(2008) 4 SCC 54 : (2008) 2 SCC (Cri) 166]. 25. With regard to the facts in the present case, we can also refer to the following observations in M.M.T.C. Ltd. v. Medchl Chemicals Pharma (P) Ltd. [(2002) 1 SCC 234 : 2002 SCC (Cri) 121] : (SCC p. 240, para 19) 19. The authority shows that even when the cheque is dishonoured by reason of stop-payment instructions by virtue of Section 139 the court has to presume that the cheque was received by the holder for the discharge, in whole or in part, of any debt or liability. Of course this is a rebuttable presumption. The accused can thus show that the stop-payment instructions were not issued because of insufficiency or paucity of funds. If the accused shows that in his account there were sufficient funds to clear the amount of the cheque at the time of presentation of the cheque for encashment at the drawer bank and that the stop-payment notice had been issued because of other valid causes including that there was no existing debt or liability at the time of presentation of cheque for e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 30. In Rajesh Jain (supra), the Supreme Court reiterated that there are two senses in which the phrase burden of proof is used in the Indian Evidence Act, 1872, i.e. burden of proof arising as a matter of pleading and the other is the one which deals with the question as to who has first to prove a particular fact. The former is called legal burden and it never shifts and latter is called evidential burden , which shifts from one side to the other. So noting, the Supreme Court held that the accused has two options. The first option is to prove that the debt/liability does not exist and this can be done by leading defence evidence and establishing conclusively and 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 on a principle of preponderance of probabilities by referring to particular circumstances of the case which includes: complainant s version in the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Amin Chand Payrelal, (1999) 3 SCC 35] .] xxx xxx xxx 31. Broadly speaking, presumptions are of two kinds, presumptions of fact and of law. Presumptions of fact are inferences logically drawn from one fact as to the existence of other facts. Presumptions of fact are rebuttable by evidence to the contrary. Presumptions of law may be either irrebuttable (conclusive presumptions), so that no evidence to the contrary may be given or rebuttable. A rebuttable presumption of law is a legal rule to be applied by the Court in the absence of conflicting evidence (Halsbury, 4th Edn., paras 111, 112]. Among the class of rebuttable presumptions, a further distinction can be made between discretionary presumptions ( may presume ) and compulsive or compulsory presumptions ( shall presume ). [ G. Vasu v. Syed Yaseen Sifuddin Quadri [G. Vasu v. Syed Yaseen Sifuddin Quadri, 1986 SCC OnLine AP 147 : AIR 1987 AP 139]] 32. The Evidence Act provides for presumptions, which fit within one of three forms: may presume (rebuttable presumptions of fact), shall presume (rebuttable presumption of law) and conclusive presumptions (irrebuttable presumption of law). The distinction between may presume and shall p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the drawer to make payment within 15 days of receipt of the notice. Once the execution of the cheque is admitted, Section 139 NI Act mandates a presumption that cheque was issued in discharge of a debt/liability. The presumption is a rebuttable presumption and the onus is on the accused to raise a probable defence, the standard of proof for which is preponderance of probabilities. To rebut the presumption, it is open to the accused to rely on evidence led by him or on material submitted by the complainant. It is not necessary for the accused to come in the witness box in support of his defence as Section 139 imposes an evidentiary burden and not persuasive burden . As held in Rajesh Jain (supra), accused can rely on his Statement under Section 313 Cr.P.C. also to rebut the presumption justifying a finding that there is no debt/liability. [ Ref.: Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513]. This position of law has been reiterated by the Supreme Court in a recent judgment in Dattatraya v. Sharanappa, 2024 SCC OnLine SC 1899 and relevant passages are as follows:- 21. In light of the aforesaid discussion, and as underscored by this Court recently in the decision of Rajesh Jain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, on the aspect of adducing evidence for rebuttal of the aforesaid statutory presumption, it is pertinent to cumulatively read the decisions of this Court in Rangappa (supra) and Rajesh Jain (supra) which would go on to clarify that accused can undoubtedly place reliance on the materials adduced by the complainant, which would include not only the complainant's version in the original complaint, but also the case in the legal or demand notice, complainant's case at the trial, as also the plea of the accused in the reply notice, his Section 313 CrPC 1973 statement or at the trial as to the circumstances under which the promissory note or cheque was executed. The accused ought not to adduce any further or new evidence from his end in said circumstances to rebut the concerned statutory presumption. 32. In the backdrop of these principles, I may now come to the facts of the present case. As noted above, Trial Court convicted the Respondent for the offence under Section 138 NI Act but the Appellate Court has set aside the judgment of the Trial Court and acquitted the Respondent. Applying the principles elucidated by the Supreme Court, since the Respondent admitted the issuanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had handed over to his Chartered Accountant. He produced copy of the balance sheet and profit and loss account on 31.03.2012, which was marked as Mark A (colly) in the absence of the originals. Petitioner deposed that it was correct that under the head sundry debtors , name of the Respondent was not mentioned. He volunteered that name of an individual is never mentioned in the balance sheet as a practice albeit he admitted that the said document did not bear the stamp or name of the CA also. 36. In view of this deposition of the Petitioner in cross-examination, Appellate Court observed that since the loan was stated to be advanced through DD/cheque of Rs. 10,12,000/-, the best evidence to prove was the bank account statement, which was never produced during evidence before the Trial Court and withholding of the best evidence leads to an adverse inference that in case the statement was produced, the same may not have corroborated the stand of the Petitioner of having advanced the loan. It is pertinent to mention that during pendency of the appeal, certified copy of the bank account statement was produced by the Petitioner, but it is noted by the Appellate Court that there was not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not the same by which it was deposited. Evidence of CW-2 also demolished the case of the Petitioner that he was the one who had filled the details on the second cheque. 38. In light of the evidence on record, Appellate Court concluded that the defence of the Respondent was a plausible one that he had given the cheque of Rs. 8 lacs for investment and he was able to successfully rebut the presumption under Sections 118 and 139 of NI Act and that no evidence came on record to substantiate that Petitioner had advanced a loan of Rs. 14 lacs to the Respondent. This Court finds no infirmity in this conclusion and in this context, I may allude to the judgment of the Supreme Court in Kundan Lal Rallaram v. The Custodian, Evacuee Property Bombay, 1961 SCC OnLine SC 10, where the Supreme Court observed that when the creditor failed to produce his account books, the Court can raise a presumption of the fact under Section 114 of the Indian Evidence Act that the evidence if produced would have shown the non-existence of the consideration. Following these observations, in Rajesh Jain (supra), the Supreme Court held as follows in paragraphs 42 and 43, which at the cost of repetition are extract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... end in said circumstances to rebut the concerned statutory presumption. 27. Applying the aforementioned legal position to the present factual matrix, it is apparent that there existed a contradiction in the complaint moved by the Appellant as against his cross-examination relatable to the time of presentation of the cheque by the Respondent as per the statements of the Appellant. This is to the effect that while the Appellant claimed the cheque to have been issued at the time of advancing of the loan as a security, however, as per his statement during the cross-examination it was revealed that the same was presented when an alleged demand for repayment of alleged loan amount was raised before the Respondent, after a period of six months of advancement. Furthermore, there was no financial capacity or acknowledgement in his Income Tax Returns by the Appellant to the effect of having advanced a loan to the Respondent. Even further the Appellant has not been able to showcase as to when the said loan was advanced in favour of the Respondent nor has he been able to explain as to how a cheque issued by the Respondent allegedly in favour of Mr. Mallikarjun landed in the hands of the insta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... debt. In the facts and circumstances of this case, there is every reason to doubt the version given by the appellant that the cheque was issued in the discharge of a liability or a legally recoverable debt. The reasons for this are a number of factors which have been enumerated by the learned ACMM also. Some of them are that non-mentioning by the appellant in his Income Tax Return or the Books of Accounts, the factum of the loan having been given by him because by no measure, an amount of Rs. 9,00,000/- can be said to be a small amount which a person would not reflect in his Books of Accounts or the Income Tax Return, in case the same has been lent to a person. The appellant, neither in the complaint nor in his evidence, has mentioned the date, time or the year when the loan was sought or given. The appellant has presented a cheque, which obviously is written with two different inks, as the signature is appearing in one ink, while as the remaining portion, which has been filled-up in the cheque, is in a different ink. All these factors prove the defence of the respondent to be plausible to the effect that he had issued these cheques by way of security to the appellant for getting ..... X X X X Extracts X X X X X X X X Extracts X X X X
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