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TMI Blog2021 (3) TMI 1461X X X X Extracts X X X X X X X X Extracts X X X X ..... one. In Rangappa vs. Sri Mohan [ 2010 (5) TMI 391 - SUPREME COURT] the Hon ble Supreme Court has held that in view of Section 139, it has to be presumed that a cheque is issued in discharge of any debt or other liability. It is for the accused to rebut the said presumption, though accused need not adduce his own evidence and can rely upon the material submitted by the complainant. There was no case in the reply of the accused that the complainant had taken seven cheques from the shop of his brother and the cheque-in- question was amongst the seven cheques, which was misused by the complainant. The statement of the accused under Section 313 of the Code of Criminal Procedure is not a substantive evidence of defence of the accused but only an opportunity to the accused to explain the incriminating circumstances appearing in the prosecution case. Mere statement of the accused may not be sufficient to rebut the presumption. Therefore, this Court does not see any basis in the contention of the learned counsel for the respondent that the respondent-accused has been successful in creating doubt in the mind of the Court with regard to the existence of the legally enforceable debt or liabil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs. 20,00,000.00/- in regard to the credit amount given to the accused. The said cheque was deposited by the complainant in his account. The said cheque was dishonoured by the bank of the accused with note of "exceed agreement". The complainant acknowledged the dishonoured cheque on 02.11.2017 and a legal notice was sent to the accused on 09.11.2017, which was served upon the accused on 17.11.2017. A reply was given by the accused on false and misconceived facts. Since no payment was forthcoming pursuant to the said demand notice, a complaint case was filed by the complainant against the accused under Section 138 of the Act, 1881. 3. The learned trial court took cognizable on the complaint. The process under Section 204 of the Code of Criminal Procedure, 1973 (hereinafter referred to as "the Code") was issued. The respondent-accused appeared before the learned trial court. Substance of accusation was recorded by the learned trial court, wherein the respondent- accused pleaded not guilty and claimed to be tried. 4. The complainant in order to prove his case got himself examined as PW1 and examined Gopal Singh (PW2). 5. The complainant filed Cheque-in-question No.797972 dated 16 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed cheque on 02.11.2017, a demand notice was sent to the respondent on 09.11.2017, which was served upon the respondent on 17.11.2017; the reply was given by the respondent on false and misconceived facts; the amount of the cheque was not paid; the learned trial court committed wrong in holding that there was no legal debt or liability; the settled proposition of law is that no one should be left remediless; the learned trial court acquitted the respondent on the technical ground that without the firm being arraigned as an accused, the accused would not be liable for prosecution under Section 138 of the Act, 1881; the appellant-complainant should have been directed to amend his complaint; therefore, the learned trial court has miserably failed to appreciate the oral and documentary evidence on record in a proper and perspective manner. After completion the arguments, the learned counsel for the appellant furnished a decision rendered by the Hon'ble Supreme Court in Rangappa vs. Sri Mohan, (2010) 11 SCC 441. 15. On the other hand, Mr. Yogesh Kumar Pacholia, learned counsel for the respondent, argued in support of the impugned judgment and submitted that the appellant- complainant c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice. Explanation.-- For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability." 17. Section 138 of the Act, 1881 defines the ingredients of the offence. The following ingredients are required to be satisfied for making out a case under Section 138 of the Act, 1881: (i) that a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account for the discharge of any legally enforceable debt or other liability; (ii) that 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; (iii) that cheque is returned by the bank unpaid, either because the amount of money standing to the credit of the 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 the bank; (iv) the payee or the holder in due course of the cheque 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 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing effect; "139. Presumption in favour of holder- 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 the discharge, in whole or in part, of any debt or other liability." 21. In Kumar Exports vs. Sharma Carpets, (2009) 2 SCC 513, the Hon'ble Supreme Court considered the provisions of the Act, 1881. Referring to Sections 118, 138 and Section 139 of the Act, 1881, the Hon'ble Supreme Court laid down following in paragraph Nos. 12, 13, 14, 15, 16, 17, 18, 19, 20 and 21: "12. In order to determine the question whether offence punishable under Section 138 of the Act is made out against the appellant, it will be necessary to examine the scope and ambit of presumptions to be raised as envisaged by the provisions of Sections 118 and 139 of the Act. In a suit to enforce a simple contract, the plaintiff has to aver in his pleading that it was made for good consideration and must substantiate it by evidence. But to this rule, the negotiable instruments are an exception. 13. In a significant departure from the general rule applicable to contracts, Section 118 of the Act provides certain presu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ption or not, but in the latter case, the court must necessarily raise the presumption. If in a case the court has an option to raise the presumption and raises the presumption, the distinction between the two categories of presumptions ceases and the fact is presumed, unless and until it is disproved. 17. Section 118 of the Act, inter alia, directs that it shall be presumed, until the contrary is proved, that every negotiable instrument was made or drawn for consideration. Section 139 of the Act stipulates that unless the contrary is proved, it shall be presumed, that the holder of the cheque received the cheque, for the discharge of whole or part of any debt or liability. 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 instrume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nces, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non-existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on to the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arising under Sections 118 and 139 of the Act. 21. The accused has also an option to prove the non-existence of consideration and debt or liability either by letting in evidence or in some clear and exceptional cases, from the case set out by the complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial. Once such rebuttal evidence is adduced and accepted by the court, having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and the accused and all the transactions of the complainant were with his brother Mohan Prasad Purohit. There was no case in the reply of the accused that the complainant had taken seven cheques from the shop of his brother and the cheque-in- question was amongst the seven cheques, which was misused by the complainant. The statement of the accused under Section 313 of the Code of Criminal Procedure is not a substantive evidence of defence of the accused but only an opportunity to the accused to explain the incriminating circumstances appearing in the prosecution case. Mere statement of the accused may not be sufficient to rebut the presumption. Therefore, this Court does not see any basis in the contention of the learned counsel for the respondent that the respondent-accused has been successful in creating doubt in the mind of the Court with regard to the existence of the legally enforceable debt or liability. 26. Before the learned trial court, the case of the respondent-accused was that under Section 141 of the Act, 1881, unless and until the firm is arrayed as an accused, no vicarious liability can be fastened on its partner. 27. The learned counsel for the appellant contend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accused, the accused would not be liable, is not sustainable in the eyes of law because the complainant has been left remediless. The learned counsel for the appellant further submitted that the complainant should have been directed to amend his complaint but the learned trial court arbitrarily acquitted the accused. The learned counsel for the appellant submitted that this plea has also been taken specifically on the ground of appeal. In light of these arguments, however, the learned counsel for the appellant admitted the fact that the "Purohit Agency" was a partnership firm even though his submission is that the complaint cannot be dismissed on this technical ground. 30. Section 141 of the Act, 1881 stipulates the liability for the offence punishable under Section 138 of the Act, 1881 when the person committing such an offence happens to be a company i.e. when the drawer of the cheque happens to be a company. For the purpose of Section 141 of the Act, 1881, a firm comes within the ambit of a company. 31. Before the Hon'ble Supreme Court in the case of Aneeta Hada vs. Godfather Travels and Tours Pvt. Ltd. (Supra), the question for the consideration was, "whether an authorised s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the concepts of connivance, negligence and consent that engulfs many categories of officers. It is worth noting that in both the provisions, there is a "deemed" concept of criminal liability. 23. Section 139 of the Act creates a presumption in favour of the holder. The said provision has to be read in conjunction with Section 118(a) which occurs in Chapter XIII of the Act that deals with special rules of evidence. Section 140 stipulates the defence which may not be allowed in a prosecution under Section 138 of the Act. Thus, there is a deemed fiction in relation to criminal liability, presumption in favour of the holder, and denial of a defence in respect of certain aspects. 24. Section 141 uses the term "person" and refers it to a company. There is no trace of doubt that the company is a juristic person. The concept of corporate criminal liability is attracted to a corporation and company and it is so luminescent from the language employed under Section 141 of the Act. It is apposite to note that the present enactment is one where the company itself and certain categories of officers in certain circumstances are deemed to be guilty of the offence. 53. It is to be borne in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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