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TMI Blog2025 (4) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... Court, Room No.5, Lucknow (hereinafter referred to as the 'Trial Court') as later upheld by the Additional Sessions Judge, Court No.1, Lucknow (hereinafter referred to as the 'Appellate Court') vide Order dated 23.10.2020 in Criminal Appeal No.148/2019. FACTS: 2. The appellant is the complainant in Complaint Case No.6650/2012. He alleged that he had advanced a loan of Rs.22,00,000/- (Twenty-Two lakhs) to the respondent no.2 on the assurance that the entire amount will be returned. When the appellant demanded return of the money, the accused issued Cheque No.726716 dated 17.03.2010 for an amount of Rs.22,00,000/- (Twenty-Two lakhs) drawn on the Bank of Baroda. The appellant presented the said cheque for encashment at IDBI Bank, Main Branch, Lucknow. On 07.05.2010, the cheque was dishonoured with the endorsement 'payment stopped by drawer' and the cheque along with receipt was returned. Subsequently, the appellant attempted to contact the accused seeking return of the money but the accused neither met him nor returned the money. The appellant sent a Legal Notice dated 18.05.2010 through Registered Post. However, the accused did not reply to the Notice. Hence, a complaint case was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal preferred by the accused was dismissed by the Appellate Court vide Order dated 23.10.2020 and the Order of the Trial Court was confirmed. 4. The accused filed a criminal revision petition before the High Court which came to be allowed vide the Impugned Order and the conviction and sentence imposed on the accused/respondent no.2 was set aside. While doing so, the High Court noted as under, inter alia: 'The complainant has failed to prove his case that the cheque was issued towards discharge of a lawful debt specially when the complainant has failed to disclose details of his Bank Account and date when he withdrew the amount in question and paid to the revisionist as well as the date when he obtained the cheque. Therefore, there are glaring inconsistencies indicating doubt in the complainant's version, hence, the conviction and sentence cannot be sustained.' APPELLANT'S SUBMISSIONS: 5. Mr. Pinaki Addy, learned counsel for the appellant, submitted that the High Court fell in error in upsetting the concurrent findings of facts recorded by the Courts below by re-appreciating and re-analyzing the evidence. It was argued that during the cross-examination of the accused, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enforceable debt and such debt existed on the date of presentation of the cheque. 10. It was his contention that the Trial Court as well as the Appellate Court were misled by the appellant about the existence of two complaints by the respondent no.2 and findings of both the Courts on this issue are erroneous. Further, it was argued that the accused never handed over the signed cheque to the appellant and the same was lost while he was travelling from Sultanpur to Raebareli at Atheha Market and Missing Report, in this connection, was also filed on 12.03.2010 at Police Station Udaipur, District Pratapgarh, Uttar Pradesh. 11. Reliance was placed on the decisions in Bir Singh (supra), Rajesh Jain (supra) and Dattatraya v. Sharanappa, 2024 SCC OnLine SC 1899, to highlight that the appellant did not discharge his burden of establishing the factual basis to activate the presumptive clause. It was further submitted, that in any case, the complaint is not maintainable since the drawer of the cheque i.e., the Partnership Firm viz. M/s Sun Enterprises, has not been arrayed as a party. Additionally, learned senior counsel also placed reliance on the decisions in John K John v. Tom Varghese, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt tale. The cheque in question dated 17.03.2010 was presented within time but returned un-encashed on 07.05.2010 with the endorsement 'payment stopped by drawer'. A Legal Notice was also sent by the appellant on 18.05.2010 through Registered Post, i.e., within the stipulated thirty days period, intimating about the dishonour of the cheque. As no reply was proffered by respondent no.2, thus, an inference, albeit rebuttable, could arise that he had no sustainable/valid defence to justify why the cheque in question was dishonoured. Be that as it may, the respondent no.2 avers that no reply was sent as he had not received any Legal Notice. 18. Further, a defence raised by the respondent no.2 was that he had intimated the police of the factum of the cheque being lost. However, upon verification of the said claim, it emerges that such intimation/information reached the police only in the year 2011, though the intimation itself was dated 12.03.2010. Notably, the cheque was presented on 17.03.2010. This sequence strengthens the statutory presumption in favour of the appellant, as it cannot be believed that a cheque having been lost on/about 12.03.2010, the respondent no.2 would intimate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of Sections 138/141 of the NI Act create a statutory presumption of dishonesty on the part of the signatory of the cheque, and when the cheque is issued on behalf of a company, also those persons in charge of or responsible for the company or the business of the company. Every person connected with the company does not fall within the ambit of Section 141 of the NI Act. xxx 42. Liability depends on the role one plays in the affairs of a company and not on designation or status alone as held by this Court in S.M.S. Pharmaceuticals [S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla, (2005) 8 SCC 89: 2005 SCC (Cri) 1975]. The materials on record clearly show that these appellants were independent, nonexecutive Directors of the company. As held by this Court in Pooja Ravinder Devidasani v. State of Maharashtra [Pooja Ravinder Devidasani v. State of Maharashtra, (2014) 16 SCC 1: (2015) 3 SCC (Civ) 384: (2015) 3 SCC (Cri) 378] a non-executive Director is not involved in the day-to-day affairs of the company or in the running of its business. Such Director is in no way responsible for the day-to-day running of the accused Company. Moreover, when a complaint is filed against a Directo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce 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 appellantaccused. The aspect relevant for consideration had been as to whether the appellant-accused has brought on record such facts/material/circumstances which could be of a reasonably probable defence. 19. In order to discharge his burden, the accused put forward the defence that in fact, he had had the monetary transaction with the said Shri Jagdishbhai and not with the complainant. In view of such a plea of the appellantaccused, the question for consideration is as to whether the appellant-accused has shown a r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad also been irrelevant factors for consideration of a probable defence of the appellant. Similarly, the factor that the complainant alleged the loan amount to be Rs 22,50,000 and seven cheques being of Rs 3,00,000 each leading to a deficit of Rs 1,50,000, is not even worth consideration for the purpose of the determination of real questions involved in the matter. May be, if the total amount of cheques exceeded the alleged amount of loan, a slender doubt might have arisen, but, in the present matter, the total amount of 7 cheques is lesser than the amount of loan. Significantly, the specific amount of loan (to the tune of Rs 22,50,000) was distinctly stated by the appellantaccused in the aforesaid acknowledgment dated 21-3- 2017.' ( emphasis supplied ) 22. The High Court while allowing the criminal revision has primarily proceeded on the presumption that it was obligatory on the part of the complainant to establish his case on the basis of evidence by giving the details of the bank account as well as the date and time of the withdrawal of the said amount which was given to the accused and also the date and time of the payment made to the accused, including the date and time o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not been done. Moreover, even if it is presumed that the complainant had not proved the source of the money given to the petitioners by way of loan by producing statement of accounts and/or Income Tax Returns, the same ipso facto, would not negate such claim for the reason that the cheques having being issued and signed by the petitioners has not been denied, and no evidence has been led to show that the respondent lacked capacity to provide the amount(s) in question. In this regard, we may make profitable reference to the decision in Tedhi Singh v Narayan Dass Mahant, (2022) 6 SCC 735: '10. The trial court and the first appellate court have noted that in the case under Section 138 of the NI Act the complainant need not show in the first instance that he had the capacity. The proceedings under Section 138 of the NI Act is not a civil suit. At the time, when the complainant gives his evidence, unless a case is set up in the reply notice to the statutory notice sent, that the complainant did not have the wherewithal, it cannot be expected of the complainant to initially lead evidence to show that he had the financial capacity . To that extent, the courts in our view were right in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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