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TMI Blog2001 (7) TMI 1172X X X X Extracts X X X X X X X X Extracts X X X X ..... eliminary issue based on the language of sub-section (2) of section 3 of the Act. It was contended that the jurisdiction of the Special Court was limited to offences committed between 1-4-1991 and on or before 6-6-1992 and the offence alleged having taken place after 6-6-1992, the Special Court had no jurisdiction to try it. The Bench then hearing the appeal, recorded in its order dated 7-9-1999 : "...Prima Facie we are not in agreement with the contention raised by the learned counsel for the appellant on first principles but the learned counsel for the appellant has brought to our notice a judgment of this Court in the case of Minoo Mehta v. Sharak D. Mehta [1998] 2 SCC 418. In the aforesaid judgment on facts of that case this question possibly did not arise for consideration but even otherwise Their Lordships in paragraph 12 have come to the conclusion : 'Therefore, every offence pertaining to any transaction in securities which is covered by the sweep of the Act, that is if such transaction has taken place between 1-4-1991 and on or before 6-6-1992 would be subjected to the provisions of the Act regarding trial of such an offence.' Having held so in the later part of the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in transactions in both the Government and other securities, indulged in by some brokers in collusion with the employees of various banks and financial institutions." [Emphasis supplied] 7. The preamble to the Act also makes it clear that the purpose of the enactment was to deal with those particular transactions in securities. In sub-section (2) of section 3 the statutory period occurs after the word transaction. If the period were to qualify the word 'offence' the section would have read "any offence after the 1st day of April and on or before 6th June, 1992" From the language used it is apparent that the period relates to the transaction in securities and that the date of the offence is immaterial. Other sections of the Act also show that the object of the Act is those particular transactions which were carried out during a particular period of time. Thus section 4 of the Act allows the Custodian, under certain circumstances to cancel "any contract or agreement entered into at any time after the first day of April, 1991 and on or before the 6th June of 1992". The position has been further clarified by section 9A(1)(b) (introduced by way of amendment in 1994) which confers on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to prosecutions in connection with an accused involved in transactions in securities during the relevant period will lie before the Special Court and not before ordinary courts as the section starts with a non obstante clause stating that notwithstanding anything contained in any other law, only Special Courts will have exclusive jurisdiction to try such offenses...." [Emphasis supplied] (p. 199) Because the offence and the transactions overlapped, the learned Judges did not make a distinction between the transaction and the offence when they summed up their conclusions by saying : "The offence referred to in, sub-section (2) of section 3, which is within the sweep of section 7 of the Act must be an offence committed by any person and must have the following two characteristics : 1.Such offence must relate to transactions in securities; and 2.Such offence should be alleged to have been committed between 1-4-1991 and on or before 6-6-1992." 9. The use of the word 'offence' in item 2 was an obvious error because what was meant has been made clear by the Court which reads : "17. Before parting with this case we may state that the learned senior counsel for the appellant also sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case also, we do not find any reason to interfere with the decision of the Special Court. In the complaint filed on behalf of the Bank by one Bratindranath Banerjee ('the respondent'), on 14-7-1992, it was alleged that the appellant was acting as a broker in respect of security transactions between the Bank and other banks and financial institutions. According to the complaint the appellant had issued the four cheques in discharge of his liabilities to the Bank. The four cheques were presented to Andhra Bank but were dishonoured. A First Information Report was lodged against the appellant and others. In the written statement filed by the appellant under section 247 of the Code of Criminal Procedure, 1898, it was said that pursuant to an oral information from the Bank's officer that the Bank was working on some new scheme and methods of augmenting its income and request for assistance for the same, the appellant agreed to "certain formalities and adjustments as and when required". Pursuant to this arrangement, the appellant had executed and sent several cheques to the bank including the four cheques (Ext. B, C, D & F) which related to certain intended transactions of purchase of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The appellant's submission that the cheques were not drawn for the 'discharge in whole or in part of any debt or other liability' is answered by the third presumption available to the Bank under section 139. The section provides that "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". The effect of these presumptions is to place the evidential burden on the appellant of proving that the cheque was not received by the Bank towards the discharge of any liability. Because both sections 138 and 139 require that the Court 'shall presume' the liability of the drawer of the cheques for the amounts for which the cheques are drawn, as noted in State of Madras v. A. Vaidyanatha Iyer AIR 1958 SC 61, it is obligatory on the Court to raise this presumption in every case where the factual basis for the raising of the presumption had been established. "It introduces an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the accused" (ibid). Such a presumption is a presumption of law, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if drawn may be rebutted by an explanation which "might reasonably be true and which is consistent with the innocence" of the accused. On the other hand in the case of a mandatory presumption "the burden resting on the accused person in such a case would not be as light as it is where a presumption is raised under section 114 of the Evidence Act and cannot be held to be discharged merely by reason of the fact that the explanation offered by the accused is reasonable and probable. It must further be shown that the explanation is a true one. The words 'unless the contrary is proved' which occur in this provision make it clear that the presumption has to be rebutted by 'proof' and not by a bare explanation which is merely plausible. A fact is said to be proved when its existence is directly established or when upon the material before it the Court finds its existence to be so probable that a reasonable man would act on the supposition that it exists. Unless, therefore, the explanation is supported by proof, the presumption created by the provision cannot be said to be rebutted..." [See also V.D. Jhingan v. State of Uttar Pradesh AIR 1966 SC 1762; Sailendranath Bose v. State of Bihar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the deal slips, cost memos, instruction issued by the Reserve Bank of India and entry in a clearing sheet in respect of four deal slips were marked as Ext. 'O'. Out of Ext. 'O', difference of rates covered by four deal slips had been settled by the appellant by giving a cheque for Rs. 15 crores. The balance amount on this account was Rs. 45,77,40,250. 18. The second statement prepared and vouched for by Mr. Banerjee was Ext. 'P' prepared in connection with transactions between 28-12-1991 and 17-2-1992. The statement was supported by 18 deal slips. The lability of the appellant on this account was claimed to be Rs. 56,50,50,000. Ext. 'P' was subsequently corrected by Ext. 'T' which gave the figure of appellant's liability for the period covered by Ext. 'P' as Rs. 39,50,50,000. 19. The third statement was marked as Ext. 'Q'. This gave particulars of the claim for the period 21-2-1992 to 27-3-1992. The appellants liability for this period was claimed to be Rs. 30,97,34,135. Ext. 'Q' was supported by five deal slips. 20. All the deal slips which were printed forms and serially numbered showed the contract rate and the delivery race. They were prepared by dealers of the Bank. Mr. Ban ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that one transaction in Ex. O was non-existent or a dummy transaction. The third defence witness, Mr. G.D. Bhalla, Branch Manager of Andhra Bank, proved that the appellant had made payments of several crores to the Bank. 25. The fourth witness, G.K. Talukdar, a staff officer of the Reserve Bank of India produced a list stipulating contract rates of several securities, in an attempt to show that the contract rates claimed by the Bank were not correct. It was not stated that the list applied to the Bank or that other rates could not be contracted for. 26. The brunt of the evidence given by the appellant's witnesses was as to the nature of the transactions between the appellant and the Bank. However, not one of the defence witnesses gave any evidence in support of the only defence of the appellant, namely, that the four cheques in question had been given towards intended transactions which did not take place. No one said why the appellant had executed and delivered the particular cheques to the Bank or that the appellant had not given the four cheques to discharge his debts to the Bank. Nor did any defence witness claim that the cheques were given an account of any ready forward tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Court that no offence under section 138 had in fact been committed because he could not have paid within the period of 15 days after receipt of the notice even if he wanted to, was rightly rejected. The appellant's submission was based on the fact that he had been notified by the Custodian under section 3 and all his properties had, consequently, stood attached. But, as observed by the Learned Special Court, the Special Court had before it a number of applications by a number of parties asking for permission to fulfil their obligations under contracts. In some cases the Court had granted them. There was nothing which prevented the appellant from applying to the Special Court for permission to fulfil his obligations or to pay off his debts under the cheques Exs. B, C, D & E. No attempt had been make by the appellant to make any payment towards the dishonoured cheques. The appellant would not have paid even if he could have. This is clear not only from the correspondence, and the appellant's conduct but also from his defence of total denial of liability. The argument was, therefore, wholly academic. 29. The Special Court found the appellant's defence improbable and the evidence a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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