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TMI Blog2020 (11) TMI 1121X X X X Extracts X X X X X X X X Extracts X X X X ..... proved by respondent, it is presumed that holder of cheque has received it in discharge of whole or part of any debt or other liability. Therefore the presumption accorded by the statute under section 139 of the Act is in favour of appellant which will have to be rebutted by respondent with cogent and satisfactory evidence either by documentary or oral evidence to shift the burden of proof on the appellant. On careful understanding of provisions of section 118 of the Act, it is clear that when any negotiable instrument is made, every such instrument is endorsed, negotiated or transferred for consideration. Therefore it is clear that any cheque has been drawn in favour of a holder, there is a presumption in law that such cheque has been made or indorsed for a consideration and that the said consideration is towards discharge in whole or in part of any debt or other liability. When this being the presumption enshrined in the Act, it is no doubt a rebuttable presumption, but such rebuttal of the presumption has to be made by respondent through cogent and believable evidence either oral or documentary to the satisfaction of the Court thereby disproving the theory and case put forward ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. 3. On presentation of the said cheque to his banker i.e Syndicate Bank, Bhatkal, complainant was surprised to receive an endorsement from the Bank stating insufficient funds and same was endorsed by the bank as not arranged for . 4. In view of dishonour of the cheque, appellant got issued a legal notice to respondent on 09.07.2007. On receipt of the said legal notice, respondent got issued reply denying the contents of the legal notice and accordingly sought for return of the said cheque along with one more cheque from the appellant, which was retained by him. 5. As the cheque amount sought for in the legal notice was not paid, appellant herein preferred a complaint under Section 200 of Code of Criminal Procedure for the offence punishable under Section 138 of Negotiable Instruments Act (for short NI Act ). On registration of the complaint, cognizance was taken by the trial Court. Respondent pleaded not guilty and claimed to be tried. 6. In order to prove the case, appellant got examined himself as PW.1 and examined two Bank Managers as PW.2 and PW.3 from Syndicate Bank and Urban Co-operative Bank respectively. Appellant also got marked Ex.P.1 to P.7 and closed his side of evide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he main defence taken by the respondent to rebut the presumption is by way of production of Ex.D.4, which is alleged payment receipt book. The trial Court has misdirected itself in appreciating Ex.D.4 which does not deserve the worth of paper claimed by respondent. Learned counsel contends that on bare examination of Ex.D.4, it does not show as to whom the said booklet belongs. It also does not show from whom and to whom the amount is taken and received. 12. Learned counsel further contends believing and appreciating the Ex.D.4 is a gross miscarriage of justice by trial Court, as the appellant has not admitted the said Ex.D.4 and neither has appellant admitted signature in Ex.D.4. Therefore, when existence of Ex.D.4 is questioned and not admitted by appellant, appreciation of the same by trial Court and believing said document and coming to a conclusion that respondent has rebutted the presumption as contrary to provisions enshrined in the Negotiable Instruments Act and the precedents laid down by the Hon ble Apex Court is erroneous. He further contends that the trial Court has ignored the aspect of respondent admitting the issuance of cheque and solely on the basis of such admissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not proved beyond doubt the existence of legally recoverable debt, his financial capacity and source of income for having given alleged loan amount of Rs. 2,50,000/- as claimed by appellant. 15. He further contends that the trial Court has considered all these aspects and has rightly come to a conclusion that appellant has failed to prove a legally recoverable debt and the trial Court has rightly come to a conclusion that the respondent has duly rebutted the presumption by creating a reasonable doubt in the mind of Court as to the genuineness of case made out by appellant. In view of these submissions, learned counsel for respondent seeks to dismiss the criminal appeal and affirm the judgment of acquittal passed by trial Court. 16. Point that arises for consideration before this Court is i) Whether the appellant/ complainant has fulfilled the ingredients for attracting the provisions of Section 138 of NI Act? ii) Whether respondent has rebutted the presumption cast on him under Section 139 of NI Act? iii) Whether the order of acquittal passed by the trial Court is justified considering the facts and circumstances of the case? 17. It is noticed from the records that it is a case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ggested in the cross-examination by respondent that for having taken loan amount of Rs. 35,000/- from appellant, respondent had given the present cheque only by affixing his signature and contents of Ex.P.1 has been filled in by appellant which has been denied by appellant. In fact, respondent has confronted Ex.D.4 a note book containing entries alleged to be the entry made by appellant for having received daily payments towards repayment of loan availed by respondent. This question also has been denied by appellant and he has not even admitted the signature on Ex.D.4, so also the contents of Ex.D.4. 22. PWs.2 and 3 have been examined by appellant as formal witnesses from Syndicate Bank and Urban Co-Operative Bank, who have deposed before the Court stating that the cheque has been dishonoured due to insufficient funds. It is now necessary to see what is the oral evidence adduced by respondent/accused. On a careful perusal of evidence of respondent, it is seen, respondent has stated that himself and appellant are very good friends, known to each other and he has got marked Exs.D.1 to D.4. According to respondent, he has obtained loan of only Rs. 35,000/- from appellant and for repay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to 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, 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 che ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... very transfer of a negotiable instrument was made before its maturity; (e) as to order of endorsements that the endorsements appearing upon a negotiable instrument were made in the order in which they appear then on; (f) as to stamp that a lost promissory note, bill of exchange or cheque was duly stamped; (g) that holder is a holder in due course that the holder of a negotiable instrument is a holder in due course: PROVIDED that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him. 29. On careful understanding of provisions of section 118 of the Act, it is clear that when any negotiable instrument is made, every such instrument is endorsed, negotiated or transferred for consideration. Therefore it is clear that any cheque has been drawn in favour of a holder, there is a presumption in law that such cheque has been made or indorsed for a consideration and that the said consideration is towards dischar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ption in favour of appellant, respondent will have to plead sufficient, satisfactory and cogent evidence either oral or documentary. To such an extent it would create a doubt in the mind of Court which should be a probable defence and not merely suggestions and questions which are not admitted and denied by PW.1 appellant. On a careful examination of Ex.D.4, it also does not reveal whether these alleged so called daily payments have been received by appellant, towards repayment of loan of either Rs. 35,000/- or Rs. 2,50,000/-. Hence in the facts and circumstances of the present case and material evidence of both parties, respondent has not adduced any evidence to raise a probable defence. Therefore the burden has not shifted on appellant to answer such rebuttal of respondent. 35. The trial Court has misdirected itself in coming to a conclusion that appellant has paid Rs. 2,50,000/- without charging any interest and without obtaining any document. It is to be seen that right from issuance of legal notice, filing of complaint, recording of sworn statement, adducing evidence on behalf of complainant PW.1, it has been the stand of appellant that he has paid Rs. 50,000/- and borrowed Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailed to prove the legally recoverable debt which is erroneous in law as merely by putting suggestions, without there being any affirmative admission by the appellant, same cannot be presumed as admission with regard to Ex.D.4. Merely because the said document is marked as an exhibit, it does not prove that respondent has repaid cheque amount and rebutted the presumption cast on him. 38. For the reasons stated above, the appellant has clearly made out the necessary ingredients to attract provisions of Section 138 of the Act and has proved the guilt of accused to be punished for the offence under Section 138 of the Act. As such, the impugned order of acquittal passed by the trial Court deserves to be set aside and respondent/accused is liable to be convicted for the offence punishable under Section 138 of the Act. Accordingly, I pass the following order : ORDER Appeal is allowed. The Judgment of acquittal passed by the Principal Civil Judge (Jr.Dn) and J.M.F.C., Bhatkal in C.C.No.2039/2007 dated 27.11.2010 is set aside. Respondent/accused is convicted for the offence punishable under Section 138 of the Act. Heard the learned counsel for respondent on award of sentence. Learned couns ..... X X X X Extracts X X X X X X X X Extracts X X X X
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