TMI Blog2020 (6) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... the statutory presumption under Section 118 and 139 of the Negotiable Instruments Act, 1881 by the accused is that the burden to prove the accusations shifts back upon the complainant after the accused reasonably discharge the initial statutory onus of proof by establishing the facts contrary to the complaint s evidence, or by showing that the existence of consideration was improbable, or doubtful, or the same was illegal. After this, the burden shifts back to the complainant who will be obliged to prove her case just like any other criminal trial, where the initial burden is always on the accuser, and it never shifts - Failure to establish the accusations beyond a reasonable doubt would disentitle her for granting relief based on the bouncing of the negotiable instrument. The judgments of conviction are neither based on correct appreciation of evidence nor the proper application of law. The accused has successfully created a reasonable introspection in the mind of the Court by raising a probable defence that creates a serious doubt about the existence of a legally enforceable debt or existing liability - this Court is allowing the present petition, setting aside the judgments o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his bank i.e. Allahabad Bank Solan Branch, for encashment, the same cheque was dishonoured by the drawee bank vide its cheque returning memo dated 14.09.2010, with the remarks Insufficient Funds in the account of accused. Thus the cheque was dishonoured on account of insufficiency of funds in the account of accused. Intimation of the same dishonourment was issued to the complainant on 14.09.2010 by his banker along with cheque returning memo dated 14.09.2010 of the banker of the accused. The copy of cheque returning memos is enclosed herewith as Annexure C-2 and C-3. 8. Based on the complaint and the statement of the complainant by way of preliminary evidence recorded under Section 200 CrPC, the Chief Judicial Magistrate, Solan, took cognizance of the offence and under Section 204 CrPC proceeded against the accused. 9. Vide order dated 17.5.2013, the Special Judicial Magistrate, Solan put notice of accusation to the accused Naveen Shandil, under Section 138 NIA. The accused did not admit his guilt and claimed trial. 10. The complainant gave his evidence by way of the affidavit dated 9.3.2015, in which he took the stand similar to what was taken in the compla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for six months for the commission of the offence punishable under Section 138 of the NI Act. 14. The convict challenged the said judgment by filing an appeal before Sessions Court, Solan, HP. Vide judgment dated 11.4.2018, learned Additional Sessions Judge-II, Solan dismissed the Criminal Appeal No.50ASJ-II/10 of 2017 (Regd. No.109/2017). 15. Challenging the judgment of conviction and dismissal of his appeal, the petitioner filed the present Criminal Revision Petition in this Court on 30.5.2018. 16. In support of the present Criminal Revision Petition, the convictpetitioner did not annex his affidavit, but one of the counsels filed his affidavit. The record further reveals that the power of attorney attached to the revision petition was attested by Superintendent Jail, Model Central Jail, Kanda, and in his presence the petitioner had put his signatures. 17. The criminal revision was posted for the first time on 30.6.2018, on which date the Court only issued the notices and dismissed the application for suspension of the sentence having been withdrawn. Even on the first date of the matter, the original counsel did not put in an appearance, and another counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmar and Ms. Manika Mittal, Advocates (as legal aid counsel) for the petitioner, Mr. Vivek Chauhan, Advocate for the respondent-complainant and Mr. Raman Sethi, Advocate as Amicus Curiae and also waded through the entire record. SUBMISSIONS: 21. Mr. Rajesh Kumar Parmar and Ms. Manika Mittal, learned legal aid counsel for the convict/petitioner, submitted that the accused had successfully rebutted the presumption under Section 139 of NIA. The complainant failed to prove that he did hold the cheque for some legal consideration and the justice demanded that the complainant had examined Shri Roshan Lal, which he failed to do. Therefore, both Courts below wrongly accepted the plea of the complainant by granting him the benefit of Section 139 of the NIA. 22. Mr. Vivek Chauhan, Advocate for the respondent-complainant, submitted that complainant had led the convincing evidence to prove that the accused issued a cheque in question in the discharge of his liability against a legally enforceable debt. 23. Mr. Raman Sethi, Advocate, learned Amicus Curiae contended that an essential ingredient of Section 138 of the Negotiable Instruments Act is missing in the complaint. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the cheque has been issued, the acquittal has been upheld by the Hon ble Supreme Court; Ramdas versus Krishnanand; (2014) 12 SCC 625 . The bald statement of the complainant that he has given cash to the petitioner from his shop is highly improbable and cannot be accepted at all. It is the well-settled position of law in Mallavarapu Kesivisweswara Rao versus ThadikondaRamulu Firm; (2008) 7 SCC 655, that initial burden to show the existence of consideration is improbable, doubtful and illegal is on the accused but once the said burden is discharged by the accused either by direct evidence or even by a preponderance of probabilities the onus shifts on the complainant. In M.S. Narayana Menon Alias Mani versus State of Kerala and Another (2006) 6 SCC 39 , it was held that once the accused has been found to have discharged his initial burden, it shifts to the complainant. The learned Courts below have failed to notice that ordinarily in terms of Section 269 SS of the Income Tax Act, any advance is taken by way of any loan of more than ₹ 20,000/- was to be made by means of an account payee cheque only. The judgment of the Hon ble Supreme Court applicable to the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Section 139 of the Negotiable Instruments Act. This 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. [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, as noted in State of Madras v. A. VaidyanathaIyer, 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 introduced 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, as distinguished from a presumption of fact which describes provisions by which the Court may presume a certain state of affairs. Presumptions are ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. c) In Kumar Exports v. Sharma Carpets, 2009 (2) SCC 513, Supreme Court holds, 15. Presumptions are devices by use of which the courts are enabled and entitled to pronounce on an issue notwithstanding that there is no evidence or insufficient evidence. Under the Evidence Act all presumptions must come under one or the other class of the three classes mentioned in the Act, namely, (1) may presume (rebuttable), (2) shall presume (rebuttable), and (3) conclusive presumptions (irrebuttable). Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... niyappan and Another[(2001) 8 SCC 458; para 6] and Rangappa v. Shrimohan [(2010) 11 SCC 441; para 26]. This presumption is a rebuttable one, if the issuer of the cheque is able to discharge the burden that it was issued for some other purpose like security for a loan. e) In Uttam Ram v. Devinder Singh Hudan, (2019) 10 SCC 287, Supreme Court holds, 20. The Trial Court and the High Court proceeded as if, the appellant is to prove a debt before civil court wherein, the plaintiff is required to prove his claim on the basis of evidence to be laid in support of his claim for the recovery of the amount due. A dishonour of cheque carries a statutory presumption of consideration. The holder of cheque in due course is required to prove that the cheque was issued by the accused and that when the same presented, it was not honoured. Since there is a statutory presumption of consideration, the burden is on the accused to rebut the presumption that the cheque was issued not for any debt or other liability. f) In Basalingappa v. Mudibasappa, (2019) 5 SCC 418, Supreme Court observed, 26. Applying the preposition of law as noted above, in facts of the present case, it is clear th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and proving the contrary. (Hiten P. Dalal v. Bratindranath Banerjee, (2001) 6 SCC 16, three-Judges Bench, Para 23). 6) 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.'- (Hiten P. Dalal v. Bratindranath Banerjee, (2001) 6 SCC 16, A three Judges Bench, Para 23). 7) 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. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the defendant-accused cannot be expected to discharge an unduly high standard of proof. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taking or accepting certain loans, deposits and specified sum.- No person shall take or accept from any other person (herein referred to as the depositor), any loan or deposit or any specified sum, otherwise than by an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account, if,- (a) the amount of such loan or deposit or specified sum or the aggregate amount of such loan, deposit and specified sum; or (b) on the date of taking or accepting such loan or deposit or specified sum, any loan or deposit or specified sum taken or accepted earlier by such person from the depositor is remaining unpaid (whether repayment has fallen due or not), the amount or the aggregate amount remaining unpaid; or (c) the amount or the aggregate amount referred to in clause (a) together with the amount or the aggregate amount referred to in clause (b), is twenty thousand rupees or more: Provided that the provisions of this section shall not apply to any loan or deposit or specified sum taken or accepted from, or any loan or deposit or specified sum taken or accepted by,- (a) the Government; (b) any banking company, post office savings ban ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the course of discharging the statutory presumptions of Ss. 118 and 139 of the Negotiable Instruments Act, 1881. 39. Another factor that creates a serious doubt in the credibility of the holder of the cheque is that in cross-examination, the complainant admitted that although he was an Income Tax Payee, he had not mentioned the loan of ₹ 4,00,000/- in his books of accounts. 40. One more factor that weakens the complaint is that in crossexamination, the complainant admitted that he had not withdrawn the money handed over to the accused from his bank account. Now, he did not establish his financial capacity to keep an amount of ₹ 4 Lacs with him, which even today is a substantial amount, and had considerable value in the year 2010. Under Section 114(g) of the Indian Evidence Act, 1872, the fact of financial capacity was only within the knowledge of the complainant, the holder of the cheque, and not with the accused/ the drawer of the cheque. In the present case, the complainant is silent, and the silence weakens his creditability. 39. In his defense, the accused confronted the complainant in his cross-examination by stating that the cheque leaflets of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 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 S. 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 ............. b) In Bharat Barrel and Drum Manufacturing Company v. Aminchand Pyarelal, (1999) 3 SCC 35, Supreme Court holds, [12] .... The burden upon the defendant of proving the nonexistence of the consideration can be either direct or by bringing on record the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non-existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on to the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arising under Sections 118 and 139 . 21. The accused has also an option to prove the nonexistence of consideration and debt or liability ei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , or by showing that the existence of consideration was improbable, or doubtful, or the same was illegal. After this, the burden shifts back to the complainant who will be obliged to prove her case just like any other criminal trial, where the initial burden is always on the accuser, and it never shifts. Failure to establish the accusations beyond a reasonable doubt would disentitle her for granting relief based on the bouncing of the negotiable instrument. 42. Again, coming to the evidence led in the instant matter, in the cross-examination, the complainant revealed that he had handed over the amount by cash in the presence of Roshan Lal Verma. However, in the complaint, the complainant did not mention this fact and accordingly had no occasion to mention the name of Roshan Lal Verma in the list of witnesses. However, the complainant could have examined Roshan Lal Verma subsequently. Section 311 of the Code of Criminal Procedure, 1973, codifies that any Court at any stage of inquiry, trial, or other proceedings under CrPC, summon any person as a witness. Thus, once the Counsel for the complainant noticed that the accused was almost successful in discharging the initial stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exercised judiciously and not arbitrarily. The power of the court in this context is very wide, and in exercise of the same, it may summon any person as a witness at any stage of the trial, or other proceedings. The court is competent to exercise such power even suo motu if no such application has been filed by either of the parties. However, the court must satisfy itself, that it was in fact essential to examine such a witness, or to recall him for further examination in order to arrive at a just decision of the case. * * * * * * * * 15. The scope and object of the provision is to enable the court to determine the truth and to render a just decision after discovering all relevant facts and obtaining proper proof of such facts, to arrive at a just decision of the case. Power must be exercised judiciously and not capriciously or arbitrarily, as any improper or capricious exercise of such power may lead to undesirable results. An application under section 311 CrPC, 1973 must not be allowed only to fill up a lacuna in the case of the prosecution, or of the defence, or to the disadvantage of the accused, or to cause serious prejudice to the defence of the accused, or to give an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o without interest, and in the absence of any proven relationship, it is highly suspicious that the complainant had handed over the alleged amount of ₹ 4,00,000/- to the accused. The stand taken by the accused appears to be probable, and he has successfully rebutted the statutory presumptions. 46. In Basalingappa v. Mudibasappa, (2019) 5 SCC 418, Supreme Court observed, 29. Thus, there is a contradiction in what was initially stated by the complainant in the complaint and in his examination-in-chief regarding date on which loan was given on one side and what was said in crossexamination in other side, which has not been satisfactorily explained. The High Court was unduly influenced by the fact that the accused did not reply the notice denying the execution of cheque or legal liability. Even before the trial court, appellant-accused has not denied his signature on the cheque. 47. In John K. Abraham v. Simon C. Abraham, (2014) 2 SCC 236, Supreme Court holds, 10. Keeping the said statutory requirements in mind, when we examine the facts as admitted by the respondent-complainant, as rightly concluded by the learned trial Judge, the respondent was not even aware ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt when it was based on consideration of the evidence, which was led on behalf of the defence. This Court had occasion to consider the expression perverse in GaminiBalaKoteswara Rao and others v. State of Andhra Pradesh through Secretary, 2009(4) R.C.R.(Criminal) 475 : (2009) 10 SCC 636 , this Court held that although High Court can reappraise the evidence and conclusions drawn by the trial court but judgment of acquittal can be interfered with only judgment is against the weight of evidence. In Paragraph No.14 following has been held:- 14. We have considered the arguments advanced and heard the matter at great length. It is true, as contended by Mr Rao, that interference in an appeal against an acquittal recorded by the trial court should be rare and in exceptional circumstances. It is, however, well settled by now that it is open to the High Court to reappraise the evidence and conclusions drawn by the trial court but only in a case when the judgment of the trial court is stated to be perverse. The word perverse in terms as understood in law has been defined to mean against the weight of evidence . We have to see accordingly as to whether the judgment of the trial ..... X X X X Extracts X X X X X X X X Extracts X X X X
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