TMI Blog2017 (9) TMI 287X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant to show that there had been dealing between the appellant and respondent no.3 upto December, 2010 and by dismissing the complaint on this score, the Trial Court has erred in putting the initial burden on the complainant/appellant without realising that initial burden was on the accused/respondents no.2 and 3. It was for the respondent no.3 to adduce cogent evidence and certainly not bare statement that there were no business dealings with the appellant after 2009 or that the goods in question were not purchased by her from the appellant. This is particularly so when respondent no. 3 admitted in her deposition that there was running account with the complainant and in the month of October/November, 2010, there was an outstanding balance of ₹ 9,200/-. The complainant while appearing as CW-1 in his examination in chief testified that he got issued one legal notice dated 31.12.2010 to the accused by registered AD & UPC dated 4.1.2011 which was duly served and despite service of notice the accused did not discharge the liability nor took any steps for repayment of the amount. The copy of the legal notice was exhibited as Ex.CW-1/C and postal receipts as Ex.CW-1/D (Colly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21.12.2010. The appellant got issued a legal notice dated 31.12.2010 by Regd. AD UPC dated 04.01.2011 to the respondent no.2 through its proprietor respondent no.3 calling upon them to make the payment within 15 days of the receipt of the notice. Notice was duly served upon respondent no.2 3. Despite the service of notice, the respondents no.2 3 failed to make the payment within the stipulated period of 15 days and hence the complaint. 3. The Trial Court acquitted respondents 2 3 on two grounds (i) the bill/invoice no. 254 dated 18.12.2010 had cutting/ interpolation on the date mentioned on it and (ii) no other invoice was placed on record to show that the appellant and respondents no.2 3 had dealings up to December 2010. 4. The learned counsel for the appellant contended that the Trial Court erred in acquitting the respondent no.2 3. He submitted that the impugned judgment was not based on the settled principles of law and the Trial Court did not correctly appreciate the facts and evidence on record. 5. He argued that under sections 118 and 139 of the NI Act, there is a presumption against the accused in a case under section 138 of the NI Act and the responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent no.3 used to keep blank signed cheques with dates mentioned thereon at her residential office in order to make payment to various contractors and suppliers and cheque no.222181 was also kept at her office-cumresidence. He submitted that the respondent used to go out in the field due to business related work and cheques used to be delivered by her family members to contractors and suppliers in her absence. He argued that there was no business dealing by the respondent No.3 with the appellant after 2009 whereas the bill is dated 18.12.2010. He submitted that the proprietor of the appellant company i.e. Pawan Bansal used to visit frequently at the residential office because of good business relations between respondent no.3 and Pawan Bansal. Learned counsel contended that the said cheque was stolen by Pawan Bansal, on one of such visits in December, 2010 to the house cum office of respondent no.3. He urged that Pawan Bansal forged the bill/invoice dated 18.12.2010 which is clear from the interpolation on the same in order to defraud respondents no. 2 3. 15. I have heard the learned counsel for the parties. 16. Before proceeding further I deem it appropriate to ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansferred, was accepted, indorsed, negotiated or transferred for consideration. ..... 17. While explaining the scope of Section 139 of the NI Act, the Hon ble Supreme Court in Laxmi Dyechem v. State of Gujarat, (2012) 13 SCC 375 held as under: 25. Therefore, if the accused is able to establish a probable defence which creates doubt about the existence of a legally enforceable debt or liability, the prosecution can fail. The accused can rely on the materials submitted by the complainant in order to raise such a defence and it is inconceivable that in some cases the accused may not need to adduce the evidence of his/her own. If however, the accused/drawer of a cheque in question neither raises a probable defence nor is able to contest existence of a legally enforceable debt or liability, obviously statutory presumption under Section 139 of the NI Act regarding commission of the offence comes into play if the same is not rebutted with regard to the materials submitted by the complainant. (Emphasis supplied) 18. While explaining the nature of presumption given under section 118(a) of the NI Act, the Hon ble Supreme Court in Bharat Barrel Drum Mfg. Co. v. Amin Cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his signatures on the cheque, presumption that the cheque pertains to a legally enforceable debt or liability arises under Section 139 of the NI Act. Such presumption is rebuttable in nature and the onus is on the accused to raise a probable defence. 20. Even if Stop Payment instructions are given to the banker, the drawer/accused cannot avoid his liability and the burden to prove that there was no legally existing debt or liability on the accused. This position was reiterated by the Hon ble Supreme Court in M.M.T.C. Ltd. v. Medchl Chemicals and Pharma (P) Ltd., (2002) 1 SCC 234. Para 19 details the mode of rebuttal of presumption under Section 139 of the NI Act as under: - 19. Just such a contention has been negatived by this Court in the case of Modi Cements Ltd. v. Kuchil Kumar Nandi [(1998) 3 SCC 249] . It has been held that even though the cheque is dishonoured by reason of stop-payment instruction an offence under Section 138 could still be made out. It is held that the presumption under Section 139 is attracted in such a case also. The authority shows that even when the cheque is dishonoured by reason of stop-payment instructions by virtue of Section 139 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n-existence of consideration is on the accused. The Hon ble Supreme Court held as under: 17. Under Section 118(a) of the Negotiable Instruments Act, the court is obliged to presume, until the contrary is proved, that the promissory note was made for consideration. It is also a settled position that the initial burden in this regard lies on the defendant to prove the non-existence of consideration by bringing on record such facts and circumstances which would lead the court to believe the non-existence of the consideration either by direct evidence or by preponderance of probabilities showing that the existence of consideration was improbable, doubtful or illegal. In this connection, reference may be made to a decision of this Court in Bharat Barrel Drum Mfg. Co. v. Amin Chand Payrelal [(1999) 3 SCC 35] . In para 12 of the said decision, this Court observed as under: (SCC pp. 50-51) 12. 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 def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. (emphasis supplied) 23. The Hon ble Supreme Court in Rangappa s case (supra) reiterated the view taken in Mallavarapu s case (supra) and held as under: In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of preponderance of probabilities . Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own. 24. Record reveal that on 01.12.2010, the respondent no.3 submitted a letter Ex.DW-3/1 to the Br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... structions and complaint dated 23.12.2010 given to Chowki Incharge PS Govind Puri. However, on 7.7.2014, the respondent no.3 again changed her stand and suggested in the further cross-examination of the appellant that the cheque in question was stolen by him from her residence-cum-office during his visit there. In her explanation under section 313 read with section 281 of the Code recorded on 4.2.2015 the respondent no.3 explained that the cheque was never issued in favour of the complainant (appellant) and was stolen from her office-cum-residence as the complainant had been visiting her office as they had good business terms. 29. The defence taken by the respondent no.3 at the time of framing of the notice under section 251 of the Code or the stand taken by her in her application under section 145(2) of NI Act or her explanation under section 313 read with section 281 of the Code recorded on 4.02.2015 is not evidence within the meaning of section 3 of the Indian Evidence Act, 1872 which reads as under: 3. Interpretation clause. - In this Act the following words and expressions are used in the following senses, unless a contrary intention appears from the context:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not dare to testify that the cheque was stolen by the appellant. Therefore the respondent has miserably failed to prove her defence that the cheque in question was stolen by the complainant in December 2010 from her residential office. Further the respondent no. 3 had not proved her alleged visit to market by producing any Bill/invoice for purchase of material which she claimed to have purchased from Kotla Market on 01.12.2010 when she found cheque was missing from her purse. She had not explained as to why she kept that single cheque in question in her purse and why she had put a date as 18.12.2010 and signed it when it was blank. 33. Respondent no.3 in her testimony as DW-3 admitted that there was a running account with the complainant company and as on October/November, 2010, a payment of ₹ 9,200/- was due to the complainant company. She testified that she did not make payment of due amount of ₹ 9,200/- to the complainant. She stated that she closed her business with the complainant after end of year 2009 and did not purchase any material after 2009. She admitted that the cheque in question was already signed by her. She also admitted that she had put the date on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al in December, 2010 for business purposes. This makes her defence completely false. If her deposition/evidence as DW-3 is ignored, and instead her defence that cheque was stolen by appellant, is considered, it certainly gives rise to an opinion as to why she did not examine any of his family members to prove the visit of complainant in December 2010 for business purpose. She claimed in her application under Section 145(2) of the NI Act that appellant visited her office in December 2010 and had stolen the cheque. She did not specify the alleged date of visit to her residential office by the complainant. She gave stop payment instructions to her banker on 01.12.2010. On one hand she took the stand that the cheque was misplaced in market on 01.12.2010 and on the other hand she took the defence that it was stolen by respondent in December, 2010. Therefore respondent No.3 has no leg to stand either way. The bare statement of the respondent is not at all sufficient to rebut the presumption under Section 139 and 118 of NI Act as held by Hon ble Supreme Court in Bharat Barrel s case (supra) and Mallavarapu Kasivisweswara Rao (supra). She neither produced books of accounts and financial st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bare statement that there were no business dealings with the appellant after 2009 or that the goods in question were not purchased by her from the appellant. This is particularly so when respondent no. 3 admitted in her deposition that there was running account with the complainant and in the month of October/November, 2010, there was an outstanding balance of ₹ 9,200/-. 41. The complainant while appearing as CW-1 in his examination in chief testified that he got issued one legal notice dated 31.12.2010 to the accused by registered AD UPC dated 4.1.2011 which was duly served and despite service of notice the accused did not discharge the liability nor took any steps for repayment of the amount. The copy of the legal notice was exhibited as Ex.CW-1/C and postal receipts as Ex.CW-1/D (Colly.). In his cross-examination, the respondent/ accused had not disputed receipt of notice. She has failed to reply said notice which attracts the applicability of principles of Non-Traverse. It has been held by the Supreme Court in Rangappa s case (supra) that the very fact that the accused had failed to reply to the statutory notice under Section 138 of the Act leads to an inference that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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