TMI Blog2018 (9) TMI 1076X X X X Extracts X X X X X X X X Extracts X X X X ..... stated, the appellant's case is that in August, 2007 the appellant and respondent had filled up tender in Uttrakhand Roadways, Dehradun in five numbers of ₹10,000/- each. The appellant had paid the cost of five tenders which the respondent had filled up that is ₹50,000/- on behalf of the respondent. Appellant also paid ₹6,15,000/- to body makers on behalf of the respondent for preparing body of his five buses. Respondent financer bank paid ₹2,50,000/- and a cheque of ₹25,000/- was paid by Oberoi motors. Out of ₹6,65,000/-, the appellant received ₹2,75,000/-, thus the respondent was liable to pay ₹3,90,000/- to the appellant. Further, the respondent had also purchased goods for ₹5,400/- by using his credit card. In July, 2008, when the respondent was in Haridwar, the appellant through one Sunil paid ₹2,000/- to the wife of the respondent as per his telephonic request. The appellant also paid an interest amount of ₹5,000/- to Pappu on behalf of the respondent in July, 2008 and ₹3,750/- for repair of tyres of his vehicle at Dehradun on behalf of the respondent. 3. In August, 2008 the account was settled bet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he respondent by the finance company that is Induslnd Bank through a cheque drawn in the name of his brother Ashraf. 7. Asif deposed that in 2007 he received an order for making body of three buses of the appellant and three buses of the respondent. He stated that all the payments were made jointly by the appellant and respondent and ₹54,000/- was still outstanding from them. He stated that he had received a cheque of ₹2,00,000/- from the finance company of the respondent. He identified his signatures on the receipt dated 31st October, 2007 (Ex. DW3/A). During cross-examination, he stated that the first payment of ₹75,000/- for making of body was made by the appellant on 31st October, 2007. Respondent who was examined as DW-4 stated that he used to keep some of his blank cheques at his house and Rakesh, employee of appellant, used to collect the cheques from his house at the instance of the appellant. The said cheques were only signed by him and rest of the contents used to be filled by the appellant. He used to remain at Dehradun to look after the operation of buses and the appellant used to handle his financial transactions. 8. Learned Counsel for the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, he admitted having received ₹2,75,000/- leaving a balance of ₹3,90,000/-. According to the appellant ₹5,400/- were paid to the respondent through his credit card thus making it a total of ₹3,95,400/-. ₹2,000/- he paid at the house of the respondent and also paid an interest amount of ₹5,000/- besides ₹3,750/- for the repair of the tyres at Dehradun. 11. Supreme Court in the decision reported as (2010) 11 SC 441 Rangappa v. Sri Mohan has at length discussed the scope and legislative intent of the Sections 118, 138 139 of the NI Act as follows: 17. In the course of the proceedings before this Court, the contentions related to the proper interpretation of Sections 118(a), 138 and 139 of the Act. Before addressing them, it would be useful to quote the language of the relevant provisions: 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, endorsed, negotiated or transferred, was accepted, endorsed, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he present case, it must be clarified that contrary to the trial court's finding, Section 138 of the Act can indeed be attracted when a cheque is dishonoured on account of stop payment instructions sent by the accused to his bank in respect of a post-dated cheque, irrespective of insufficiency of funds in the account. This position was clarified by this Court in Goaplast (P) Ltd. v. Chico Ursula D'Souza [(2003) 3 SCC 232 : 2003 SCC (Cri) 603], wherein it was held: (SCC pp. 232g-233c) Chapter XVII containing Sections 138 to 142 was introduced in the Act by Act 66 of 1988 with the object of inculcating faith in the efficacy of banking operations and giving credibility to negotiable instruments in business transactions. The said provisions were intended to discourage people from not honouring their commitments by way of payment through cheques. The court should lean in favour of an interpretation which serves the object of the statute. A post-dated cheque will lose its credibility and acceptability if its payment can be stopped routinely. The purpose of a post-dated cheque is to provide some accommodation to the drawer of the cheque. Therefore, it is all the more nec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quired to step into the witness box and unless he does so he would not be discharging his burden. Such an approach on the part of the courts, we feel, is not correct. 32. An accused for discharging the burden of proof placed upon him under a statute need not examine himself. He may discharge his burden on the basis of the materials already brought on record. An accused has a constitutional right to maintain silence. Standard of proof on the part of an accused and that of the prosecution in a criminal case is different. *** 34. 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 record by the parties but also by reference to the circumstances upon which he relies. (emphasis supplied) 19. It has been contended on behalf of the appellant-accused that the presumption mandated by Section 139 of the Act does not extend to the existence of a legally enforceable debt or liability and that the same stood rebutted in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s well as an established line of precedents of this Court. It will thus be necessary to examine some of the extracts cited by the respondent claimant. For instance, in Hiten P. Dalal v. Bratindranath Banerjee [(2001) 6 SCC 16 : 2001 SCC (Cri) 960] , it was held: (Ruma Pal, J. at SCC pp. 24-25, paras 22-23) 22. 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, 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. Such a presumption is a presumption of law, as distinguished from a presumption of fact which describes provisions by which the court may presume a certain state of affairs. Presumptions are rules of evidence and do not conflict with the presumption of innocence, because by the latter, all that is meant is that the prosecution is obliged to prove the case against the accused beyond reasonable doubt. The obligation on the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. Such a presumption is rebuttable. The defendant can prove the non-existence of a consideration by raising a probable defence. If the defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the plaintiff who will be obliged to prove it as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument. The burden upon the defendant of proving the nonexistence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies. In such an event, the plaintiff is entitled under law to rely upon all the evidence led in the case 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant. 27. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccused which would have been necessitated only when the complainant and the accused made separate payments for their respective buses. 11. Complainant stated in his testimony that he made payment for all the buses (to both the body makers) and whenever accused made cash payment to the body makers, the same was made only on his behalf. The above statement, however, does not find any corroboration from the testimony of DW2 and DW3 as noted above. No counter suggestion on the same lines was also put to any of the above DWs. More particularly, testimony of both the above DWs regarding dues still outstanding from both the complainant and the accused has virtually gone unchallenged as no counter suggestion whatsoever was put to any of the above two witnesses during their cross examination. 12. As per the complainant, he made entire payment of ₹6,15,000/- for body making of 5 buses of the accused @ ₹1,23,000/- per bus. However, it emerges clearly from the above testimonies that the body making charges were in fact ₹1,22,000/- per bus and secondly that complete payment in respect of all the buses was yet to be made to both the body makers. Complainant himself st ..... X X X X Extracts X X X X X X X X Extracts X X X X
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