TMI Blog2008 (1) TMI 827X X X X Extracts X X X X X X X X Extracts X X X X ..... ises at Hubli together. Appellant executed a Power of Attorney in his favour. 2. Allegedly, he had handed over four blank cheques to the said constituted attorney for meeting the expenses of the business. The counter foil of the cheque books was also allegedly filled in by Shri R.G. Bhat. The cheque bearing No. 044483 was shown to have been a self drawn one for a sum of Rs. 1500/-. 3. Disputes and differences having arisen between the appellant and the said R.G. Bhat in connection with running of the said business, the power of attorney granted in his favour was cancelled by the appellant. Disputes and differences between the parties were referred to the Panchayat. In the meeting of the Panchayat held on 02.10.1996, complainant/respondent who is the brother-in-law of the said R.G. Bhat was admittedly present. He participated therein. The result of the said meeting of the Panchayat is not known but it is not in dispute that the appellant herein issued a public notice through his advocate in a local newspaper on 3.10.1996 to the following effect: My client Sh. Krishna Janardhana Bhat, Proprietor of Vinaya Enterprises, Tarihal Hubli has given authority to give notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s requested to assist the Court. 10. Mr. Balakrishnan urged that the learned Trial Judge, the Sessions Court as also the High Court committed a serious illegality insofar as it misread and misapplied the provisions of Section 139 of the Negotiable Instruments Act (for short the Act). It was contended that the procedural requirements of Section 138 are: (i) There is a legally enforceable debt. (ii) The drawer of the cheque issued the cheque to satisfy part or whole of the debt. (iii) The cheque so issued has been returned due to insufficiency of funds. It was urged that only ingredient No. 2 is a subject matter of presumption under Section 139 of the Act and not the first one. It was argued that except the word of mouth of the complainant nothing has been brought on record to prove the offence as against the appellant. 11. Mr. S.N. Bhat, learned counsel appearing on behalf of the respondent, on the other hand, submitted that the appellant has rightly been found guilty of commission of an offence under Section 138 of the Act as bouncing of the cheque issued by him carries a mandatory presumption in terms of Section 139 read with Section 118 (a) of the Act. It was urged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the defence taken by the accused herein without stepping into the witness-box, is not acceptable one and there is no cogent evidence produced by the accused to prove his special reasons for issuance of the cheque in question. 13. It again referred to a decision of this Court in K. Bhaskaran v. Sankaran Vaidhyan Balan and Others [AIR 1999 SC 3762] and made almost a similar observation holding that as the complainant has discharged his initial burden, the onus shifted on the accused to produce rebuttal evidence against the presumption laid down in favour of the complainant stating: Here, the accused has not produced any evidence to discard the testimony of PW-1. Therefore, the presumption is to be drawn in favour of the holder of the cheque, who has received it for discharge of liability in view of the decision of the Hon ble Supreme Court. 14. Yet again, it relied upon a decision of the Karnataka High Court in M/s. Devi Tyres v. Nawab Jan [AIR 2001 Karnataka H.C.R. 2154], wherein it was opined: There is issued (sic) that the amount is payable and no criminal court is required to embark upon any enquiry that goes behind the Act of issuance of the cheque. If ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the cheque had been misused is on the accused-petitioner, and there being a concurrent finding of the Trial Court and the Appellant Court with regard to that holding that the petitioner had failed to discharge that burden, I do not find any ground to interfere in the order of the Trial Court and that the Appellate Court, so far as they hold the petitioner guilty of an offence punishable under Section 138 of the Negotiable Instruments Act. 18. Before embarking upon the legal issues, we may analyse the deposition of PW-1 Complainant. He was a resident of village Goddalmane. Appellant is a resident of village Kekkar. As he was running an industry at Hubli, he sometimes resided in Hubli also. They were said to be friends. He asked him to give a loan of Rs. 1.5 lakhs in the first week of June, 1998 and the amount was handed over to him on 14th June, 1998. It was allegedly agreed that on the appellant s failure to repay the said loan within one month, 15% interest would be charged. No document was executed; no pronote was executed; no receipt was obtained. Appellant is said to have come to his house suo moto on 20.07.1998 and handed over the cheque which was sent to Varada Gramee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come Tax Act reads as under: 271D. Penalty for failure to comply with the provisions of section 269SS. (1) If a person takes or accepts any loan or deposit in contravention of the provisions of section 269SS, he shall be liable to pay, by way of penalty, a sum equal to the amount of the loan or deposit so taken or accepted. (2) Any penalty imposable under sub-section (1) shall be imposed by the Joint Commissioner. 20. Indisputably, a mandatory presumption is required to be raised in terms of Section 118(b) and Section 139 of the Act. Section 13(1) of the Act defines negotiable instrument to mean a promissory note, bill of exchange or cheque payable either to order or to bearer . Section 138 of the Act has three ingredients, viz.: (i) that there is a legally enforceable debt; (ii) that the cheque was drawn from the account of bank for discharge in whole or in part of any debt or other liability which presupposes a legally enforceable debt; and (iii) that the cheque so issued had been returned due to insufficiency of funds. 21. The proviso appended to the said section provides for compliance of legal requirements before a complaint petition can be acted up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e including that of the plaintiff as well. In case, where the defendant fails to discharge the initial onus of proof by showing the non-existence of the consideration, the plaintiff would invariably be held entitled to the benefit of presumption arising under Section 118(a) in his favour. The court may not insist upon the defendant to disprove the existence of consideration by leading direct evidence as the existence of negative evidence is neither possible nor contemplated and even if led, is to be seen with a doubt [Emphasis supplied] 25. Furthermore, whereas prosecution must prove the guilt of an accused beyond all reasonable doubt, the standard of proof so as to prove a defence on the part of an accused is preponderance of probabilities . Inference of preponderance of probabilities can be drawn not only from the materials brought on records by the parties but also by reference to the circumstances upon which he relies. 26. A statutory presumption has an evidentiary value. The question as to whether the presumption whether stood rebutted or not, must, therefore, be determined keeping in view the other evidences on record. For the said purpose, stepping into the witness box b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rebuttable in nature. Having regard to the definition of terms proved and disproved as contained in Section 3 of the Evidence Act as also the nature of the said burden upon the prosecution vis- -vis an accused it is not necessary that the accused must step into the witness box to discharge the burden of proof in terms of the aforementioned provision. 13. It is furthermore not in doubt or dispute that whereas the standard of proof so far as the prosecution is concerned is proof of guilt beyond all reasonable doubt; the one on the accused is only mere preponderance of probability. In John K. John v. Tom Varghese Anr. [JT 2007 (13) SC 222], this Court held: The High Court was entitled to take notice of the conduct of the parties. It has been found by the High Court as of fact that the complainant did not approach the court with clean hands. His conduct was not that of a prudent man. Why no instrument was executed although a huge sum of money was allegedly paid to the respondent was a relevant question which could be posed in the matter. It was open to the High Court to draw its own conclusion therein. Not only no document had been executed, even no interest had been charged. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 99, Ranjitsing Brahmajeetsing Sharma v. State of Maharashtra and Anr. (2005) 5 SCC 294 and Rajesh Ranjan Yadav @ Pappu Yadav v. CBI through its Director (2007) 1 SCC 70] Article 6(2) of the European Convention on Human Rights provides : Everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law . Although India is not bound by the aforementioned Convention and as such it may not be necessary like the countries forming European countries to bring common law into land with the Convention, a balancing of the accused rights and the interest of the society is required to be taken into consideration. In India, however, subject to the statutory interdicts, the said principle forms the basis of criminal jurisprudence. For the aforementioned purpose the nature of the offence, seriousness as also gravity thereof may be taken into consideration. The courts must be on guard to see that merely on the application of presumption as contemplated under Section 139 of the Negotiable Instruments Act, the same may not lead to injustice or mistaken conviction. It is for the aforementioned reasons that we have taken into consideration the decisions operati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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