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TMI Blog2006 (7) TMI 576X X X X Extracts X X X X X X X X Extracts X X X X ..... the cheque in question being dated 31.7.1992 (Ex. P-1) drawn on Ernakulam Banerji Road branch of the Syndicate Bank, was presented for encashment by the complainant through his bankers, namely, the Cochin Stock Exchange Extension Counter of the Syndicate Bank, it was returned on 4.8.1982 with the remarks "account closed". Allegedly, a sum of Rs. 3,00,033/- was, thus, owing and due to him from the Appellant in relation to the said transactions. The Appellant is said to have paid a sum of Rs. 5000/- in cash and issued another cheque being dated 17.8.1992 drawn on Ernakulam Broadway Branch of the Vijaya Bank for a sum of Rs. 2,95,033/-. The said cheque being Exhibit P-3 was presented for encashment on 18.8.1992 through the same bankers, but it was dishonoured on 19.8.1992 as the funds in the account of the Appellant were found to be insufficient. A notice was issued by the complainant on 27.8.1992 informing the Appellant about the dishonour of the said cheque. He sent a reply to the said notice. The defence of the Appellant had been that the first cheque was a blank cheque given by him to Respondent No. 2 by way of security. The second cheque was issued in February, 1992 and the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... construed and misinterpreted Section 139 of the Act and furthermore failed to take into consideration the principle of law that once the accused discharges the initial burden placed on him, the burden of proof would revert back to the prosecution. The High Court, according to the learned counsel, acted illegally and without jurisdiction in arriving at the finding that it was for the accused to prove his innocence by adducing positive evidence for rebutting the statutory presumption that he had not received the cheque of the nature referred to under Section 138 of the Act for the discharge, in whole or in part, of any debt or other liability. Mr. E.M.S. Anam, learned counsel appearing on behalf of the Respondent, on the other hand, argued that statutory presumption raised to the effect that an accused in terms of Section 139 of the Act although is a rebuttable one, the question will have to be determined upon taking into consideration another presumption drawn in terms of Section 118(a) thereof. According to the learned counsel, the Appellant did not dispute the statement of accounts in relation to certain transactions. He had also acknowledged his liability in relation to some o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered by settlement Nos. 15 to 22 during the years 1991-92. The Second Respondent in his evidence admitted that Exhibits D-2 to D-9 corresponded to P-10 series which pertained to settlement Nos. 15/91 to 22/92 showing transactions entered into by and between him and the Appellant for a sum of Rs. 3,00,033/-. According to the Appellant, Exhibits D-2 to D-9 did not reflect the correct accounts of the transactions and the entries made therein are false. His further plea was that the date of the cheque (being Exhibit P-3) was not in his own handwriting which had been issued to the complainant so as to enable him to facilitate the complainant to discount the same and overcome his economic exigencies. The learned appellate court noticed that it had been accepted that if Exhibits D-2 to D-9 accounts corresponding to Exhibit P-10 series cannot be relied on as true and correct accounts incorporating the particulars of various transactions, the complainant's case will fall to the ground as the story of issuance of the cheque by the Appellant could not have been founded thereupon. As regards the contention of the Second Respondent that the Appellant was estopped and precluded from disputing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce them before court. Without comparing the statement of accounts with the relevant contract note it is impossible for the accused or any speculator for that matter, to either confirm or deny the entries in the statement of accounts" Admission or acknowledgement of three out of eight statements of accounts by the Appellant, the learned appellate court opined, by itself would not be sufficient to invoke the principle of estoppel. The appellate court noticed that the parties came to know each other personally at the Cochin Stock Exchange and till the fifteen settlements they did not meet. It was further found that before such acquaintance ripened into thick business relations some security from the Appellant was sought for by the Second Respondent by way of abundant caution wherefor only according to the Appellant a blank cheque was given. The court having regard to the facts and circumstances of this case, came to the conclusion that the said version of the Appellant is quite credible and probable. In doing so, the business practice that some security is always asked for in similar transaction was noticed. The appellate court further held that the stand of the Appellant was corrob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s could have been offered by the defence. The trial Magistrate could explain away the above discrepancy by observing that there are certain variations. In the first place it was not open to the defence to put forward such an explanation which the complainant himself does not have either in his written complaint or in his testimony. Secondly, the discrepancy in figures runs into more than 14 lakhs of rupees. DW4, the Executive Director of Cochin Stock Exchange has credibly deposed before Court that a member of one exchange cannot transact outside the floor of the exchange and if one enters into any such transaction which is called "kerb transaction", he has to report the same to the exchange of which he is a member. PW1 has no case that he has reported any of the kerb transactions entered into by him to the Cochin Stock Exchange. Ext. D11 series of statement of accounts maintained by the Cochin Stock Exchange does not contain any of those kerb transactions. When PW1 was admittedly engaged by the accused for purchasing and selling shares from the Cochin Stock Exchange only, Ext. P10 series of accounts which include kerb transactions entered into by PW1 outside the floor of the Cochin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.1992, 24.1.1992, 7.2.1992 and 21.2.1992. Admittedly there had been no acknowledgement in respect of five statements of accounts being Exhibits D-2 to D-6. In view of the said error of record, the findings of the High Court to the effect that the Appellant had not been able to substantiate his contention as regard the correctness of the accounts of Exhibit P-10 series must be rejected. In view the aforementioned backdrop of events, the questions of law which had been raised before us will have to be considered. Before, we advert to the said questions, we may notice the provisions of Sections 118(a) and 139 of the Act which read as under: "118. Presumptions as to negotiable instruments - Until the contrary is proved, the following presumptions shall be made: (a) of consideration - that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration." "139. Presumption in favour of holder It shall be presumed, unless the cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disproved' to 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 consideration does not exist or considers the non-existence of the consideration so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that the consideration does not exist. For rebutting such presumption, what is needed is to raise a probable defence. Even for the said purpose, the evidence adduced on behalf of the complainant could be relied upon. A Division Bench of this Court in Bharat Barrel & Drum Manufacturing Company v. Amin Chand Payrelal [(1999) 3 SCC 35] albeit in a civil case laid down the law in the following terms: "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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tter of confidence. Both parties would have to rely upon one another. For the said purpose, the courts of law may also take judicial notice of the practice prevailing in such business. The learned Appellate Judge rightly did so. The definite case of the second Respondent was that the cheque dated 17.8.1992 was issued by the Appellant in discharge of his debt. The said liability by way of debt arose in terms of the transactions. For proving the said transactions, the Second Respondent filed books of accounts. The books of accounts maintained by the Second Respondent were found to be not reflecting the correct state of affairs. A discrepancy of more than Rs. 14,00,000/- was found. It was for the Appellant only to discharge initial onus of proof. He was not necessarily required to disprove the prosecution case. Whether in the given facts and circumstances of a case, the initial burden has been discharged by an accused would be a question of fact. It was matter relating to appreciation of evidence. The High Court in its impugned judgment did not point out any error on the part of the appellate court in that behalf. What would be the effect of a presumption and the nature thereof fel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mptions of law or fact. Once such convincing rebuttal evidence is adduced and accepted by the Court, having regard to all the circumstances of the case and the preponderance of probabilities, the evidential burden shifts back to the plaintiff who has also the legal burden. Thereafter, the presumption under S. 118 does not again come to the plaintiff's rescue. Once both parties have adduced evidence, the Court has to consider the same and the burden of proof loses all its importance." If for the purpose of a civil litigation, the defendant may not adduce any evidence to discharge the initial burden placed on him, a 'fortiori' even an accused need not enter into the witness box and examine other witnesses in support of his defence. He, it will bear repetition to state, need not disprove the prosecution case in its entirety as has been held by the High Court. A presumption is a legal or factual assumption drawn from the existence of certain facts. In P. Ramanatha Aiyar's Advanced Law Lexicon, 3rd edition, at page 3697, the term 'presumption' has been defined as under: "A presumption is an inference as to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... presumed fact. In other words, provided the facts required to form the basis of a presumption of law exist, no discretion is left with the court but to draw the statutory conclusion, but this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary. A fact is said to be proved when, "after considering the matters before it, the court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists". Therefore, the rebuttal does not have to be conclusively established but such evidence must be adduced before the court in support of the defence that the court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of reasonability being that of the "prudent man". The court, however, in the fact situation obtaining therein, was not required to go into the question as to whether an accused can discharge the onus placed on him even from the materials brought on records by the complainant himself. Evidently in law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accused person may well be compared to the onus on a party in civil proceedings, and just as in civil proceedings the court trying an issue makes its decision by adopting the test of probabilities, so must a Criminal Court hold that the plea made by the accused is proved if a preponderance of probability is established by the evidence led by him..." In V.D. Jhingan v. State of Uttar Pradesh, [AIR 1966 SC 1762], it was stated: "It is well-established that where the burden of an issue lies upon the accused, he is not required to discharge that burden by leading evidence to prove his case beyond a reasonable doubt" [See also State of Maharashtra v. Wasudeo Ramchandra Kaidalwar, AIR 1981 SC 1186] In Kali Ram v. State of Himachal Pradesh [(1973) 2 SCC 808], Khanna, J., speaking for the 3-Judge Bench, held: " One of the cardinal principles which has always to be kept in view in our system of administration of justice for criminal cases is that a person arraigned as an accused is presumed to be innocent unless that presumption is rebutted by the prosecution by production of evidence as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed and only because he has issued a cheque for a higher amount, he would be convicted if it is held that existence of debt in respect of large part of the said amount has not been proved. The Appellant clearly said that nothing is due and the cheque was issued by way of security. The said defence has been accepted as probable. If the defence is acceptable as probable the cheque therefor cannot be held to have been issued in discharge of the debt as, for example, if a cheque is issued for security or for any other purpose the same would not come within the purview of Section 138 of the Act. We have gone through the oral evidences. The Second Respondent has even failed to prove that the Appellant had paid to him a sum of Rs. 5000/- by cash. In any event the High Court entertained an appeal treating to be an appeal against acquittal, it was in fact exercising the revisional jurisdiction. Even while exercising an appellate power against a judgment of acquittal, the High Court should have borne in mind the well-settled principles of law that where two views are possible, the appellate court should not interfere with the finding of acquittal recorded by the court below. We, therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X
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