TMI Blog2020 (11) TMI 892X X X X Extracts X X X X X X X X Extracts X X X X ..... r. Honest drawers' interest who issue cheques is safeguarded in the Act itself. The appellant would also be interested in getting her amount back. Therefore, payment of compensation under Section 357 of the Code of Criminal Procedure to the complainant would be in the interest of justice. The punishment that can be awarded for an offence under Section 138 of N.I. Act is imprisonment for a term which may extend to two years, or with fine which may extend to twice the amount of the cheque, or both . The next step would be what could be the amount of fine. Here the cheque Exhibit-37 was drawn for ₹ 80,000/-. The complaint was filed in the year 2013 after the statutory notice. The amount became due to complainant from the date of notice. Accused has utilized the said amount till today. Therefore, some amount needs to be given to her above the cheque amount towards interest. Respondent/accused Aarti Uttam Chavan is hereby convicted for the offence punishable under Section 138 of Negotiable Instruments Act - Respondent/accused is hereby sentenced to pay fine of ₹ 1,10,000/- only. The said amount be deposited by respondent before learned Trial Court on or before 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Magistrate has not appreciated the evidence properly, so also has not considered the legal aspects involved in proper perspective. When the cheque was admittedly given by the accused, there was a presumption under Section 139 of the N.I. Act. The learned Magistrate, thereafter, ought not to have gone into the aspect regarding the source of income while lending the amount. Further, when the cheque was admittedly issued by the accused, then learned Magistrate ought not to have invoked his powers under Section 73 of the Indian Evidence Act and take it upon himself to have comparison with the alleged admitted signature. Further error has been committed that the said amount has not been shown in the income tax returns and, therefore, it has been taken as unaccounted cash. He failed to consider the legal position in Bipin Mathurdas Thakkar Vs. Samir alias Sameer Dessai and another (2015 (1) BOM. C.R. (Cri) 601), wherein the ratio in Sanjay Mishra Vs. Kanishka Kapoor, (2009 (3) Bom.C.R. (Cri) 157) was distinguished and held that it is not based on sound law. In Bipin Thakkar's case (Supra), it has been held that every amount which is not shown in the income tax returns or the cash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tself is false. Though it has come on record that the complainant is running a business in sarees, yet, she could not have given so much of cash in contravention of Section 269SS of the Income Tax Act. He submitted that the learned trial Judge has rightly relied on the decision of this Court in Sanjay Mishra Vs. Kanishka Kapoor @ Nikki and another (2009 (4) Mh.L.J. 155), wherein it has been held that, when the applicant had not disclosed that he has advanced amount to the respondent to the Income Tax Department, then that amount would be an unaccounted amount and, therefore, it cannot be stated that there is a liability to pay such amount. The liability to pay unaccounted cash amount cannot be a legally enforceable debt within the meaning of explanation to Section 138 of the N.I. Act. It has been further submitted that the complainant should show or in other words should discharge the initial burden to prove that the disputed cheque has been issued towards legally enforceable debt or liability. Reliance has been placed on the decision in K Subramani Vs. K. Damodara Naidu, [(2015) 1 SCC 99), wherein it has been held that when legally enforceable debt is not proved by the complain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has source of income and she was in a position to extend hand loan. Another important point is that accused is not disputing issuance of cheque Exhibit-37. If we peruse the evidence in rebuttal, adduced by accused, then it can be seen that she has put forward two fold defence. One is that the said cheque was given by her as security for chit fund transaction. She says that it was blank cheque. This defence would infer that she is admitting her signature on the cheque Exhibit-37. As regards the rest of the contents on cheque Exhibit-37 is concerned, she does not say in specific words that those contents are not in her handwriting. When she has specifically admitted her signature on the cheque Exhibit-37, then learned Magistrate went wrong in unnecessarily exercising his powers under Section 73 of Indian Evidence Act to compare the signature of the accused on Exhibit-37 with her admitted signature. No steps were taken by accused to send the disputed cheque for the opinion of handwriting expert. Learned Magistrate ought not to have shown such anxiety. Unnecessary or hyper activism on the part of learned Magistrate was uncalled for. When accused admits his/her signature on the dispute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity to the complainant to complete the cheque and present it for encashment. The second defence appears to be halfhearted. Accused says that she was the member of chit fund run by complainant and she had not given her contribution in chit fund/ bhishi once and that amount was due. So also amount of ₹ 40,000/- was due from her to the complainant towards purchase of sarees. She has not given specification of the same. When she had purchased those sarees and since when the said amount on both count was due from her, accused says that the cheque has then been misused, which was given for security. Accused has examined AW 1 Pratibha, who claims that she is also member of the said chit fund and one blank cheque was given to complainant by accused on her behalf. She deposes that it was the practice of complainant to take blank cheques as security. However, if we see her cross-examination, then it is clear that she had no documentary evidence to support her statements in examination-in-chief. Accused also states that she had given two cheques to complainant. One was in respect of her contribution and another was for AW1 Pratibha. They both have not what was the duration of that fund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at a cheque received in the nature referred to under Section 138 of the Negotiable Instruments Act is for the discharge in whole or in part of any debt or other liability. The initial burden lies upon the complainant to prove the circumstances under which the cheque was issued in his favour and that the same was issued in discharge of a legally enforceable debt . 11. Learned Advocate for the respondent has relied on the decision in Krishna Bhat (supra). However, we should take into consideration the legal position laid down in Rangappa vs. Sri Mohan, [2010 (4) Bom. C. R. 652 (SC): (2010) 11 SCC 441], which is three Judge Bench decision as well as M/S. Shree Daneshwari Traders (supra). Even otherwise also complainant has discharged the initial burden in this case by showing that she had the source of income. It is not the case of accused that complainant had no capacity to extend hand loan. 12. Now it has been harped upon by the accused that the said transaction has not been accounted for. In other words, complainant has not shown the said transaction in her Income-Tax returns. Learned Advocate for the respondent as well as learned Trial Court have heavily relied on the decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counteract evasion of tax. Section 269-SS does not declare all transactions of loan, by cash in excess of ₹ 20,000/- as invalid, illegal or null and void, while as observed by the Apex Court, the main object of introducing the provision was to curb and unearth black money. To construe Section 269-SS of the Income Tax Act as a competent enactment declaring as illegal and unenforceable all transactions of loan, by cash, beyond ₹ 20,000/-, in my opinion, cannot be countenanced. 15. Yet, another reason for this opinion is Section 271-D of the Income Tax Act, which reads thus :- 271-D. Penalty for failure to comply with the provisions of Section 269-SS. (1) If a person takes or accepts any loan or deposit in contravention of the provisions of Section 269-SS, 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. 16. In that if a person takes or accepts any loan or deposit in contravention of Section 269-SS is liable to pay, by way of penalty, a sum equal to the amount of the loan or deposit so taken or ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reme Court in Govindaraju alias Govinda vs. State by Sriramapuram P. S. Anr. [(2012) 4 SCC 722] as follows :- A person is presumed to be innocent till proven guilty and once held to be not guilty of a criminal charge, he enjoys the benefits of such presumption which could be interfered with by the courts only for compelling reasons and not merely because another view was possible on appreciation of evidence. The element of perversity should be traceable in the findings recorded by the Court, either of law or of appreciation of evidence. The Legislature in its wisdom, unlike an appeal by an accused in the case of conviction, introduced the concept of leave to appeal in terms of Section 378 Cr.P.C. This is an indication that appeal from acquittal is placed at a somewhat different footing than a normal appeal. But once leave is granted, then there is hardly any difference between a normal appeal and an appeal against acquittal. The concept of leave to appeal under Section 378 Cr.P.C. has been introduced as an additional stage between the order of acquittal and consideration of the judgment by the appellate Court on merits as in the case of a regular appeal. Sub-section (3) of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itizen and this Court is very cautious in taking away that right. The presumption of innocence of the accused is further strengthened by the fact of acquittal of the accused under our criminal jurisprudence. The courts have held that if two views are possible on the evidence adduced in the case, then the one favourable to the accused, may be adopted by the court. However, this principle must be applied keeping in view the facts and circumstances of a case and the thumb rule is that whether the prosecution has proved its case beyond reasonable doubt. If the prosecution has succeeded in discharging its onus, and the error in appreciation of evidence is apparent on the face of the record then the court can interfere in the judgment of acquittal to ensure that the ends of justice are met. This is the linchpin around which the administration of criminal justice revolves . 22. Further while taking note of powers of the appellate Court are concerned, it has been observed that :- The law is well-settled that an appeal against an order of acquittal is also an appeal under the Code of Criminal Procedure, 1973 and an appellate Court has every power to re-appreciate, review and recon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P. (2004) 10 SCC 699, Budh Singh v. State of U. P. (2006) 9 SCC 731, State of U.P. v. Ram Veer Singh (2007) 13 SCC 102, S. Rama Krishna v. S. Rami Reddy (2008) 5 SCC 535, Arulvelu v. State (2009) 10 SCC 206, Perla Somasekhara Reddy v. State of A.P. (2009) 16 SCC 98 and Ram Singh v. State of H.P. (2010) 2 SCC 445) 13. ..... 14. ..... 15. In Chandrappa v. State of Karnataka (2007) 4 SCC 415, this Court reiterated the legal position as under: (SCC p. 432, para 42) (1) An appellate court has full power to review, re- appreciate and reconsider the evidence upon which the order of acquittal is founded. (2) The Code of Criminal Procedure, 1973 puts no limitation, restriction or condition on exercise of such power and an appellate court on the evidence before it may reach its own conclusion, both on questions of fact and of law. (3) Various expressions, such as, 'substantial and compelling reasons', 'good and sufficient grounds', 'very strong circumstances','distorted conclusions', 'glaring mistakes', etc. are not intended to curtail extensive powers of an appellate court in an appeal against acquittal. Such phra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rave miscarriage of justice; (iv) The High Court's judgment is manifestly unjust and unreasonable based on erroneous law and facts on the record of the case; (v) This Court must always give proper weight and consideration to the findings of the High Court; (vi) This Court would be extremely reluctant in interfering with a case when both the Sessions Court and the High Court have recorded an order of acquittal. A similar view has been reiterated by this Court in Dhanapal v. State (2009) 10 SCC 401. 19. Thus, the law on the issue can be summarised to the effect that in exceptional cases where there are compelling circumstances, and the judgment under appeal is found to be perverse, the appellate court can interfere with the order of acquittal. The appellate court should bear in mind the presumption of innocence of the accused and further that the trial court's acquittal bolsters the presumption of his innocence. Interference in a routine manner where the other view is possible should be avoided, unless there are good reasons for interference. (emphasis supplied) 24. Therefore, after taking note of the said ratio laid down in those catena of judgmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required to be interpreted in the light of the objects intended to be achieved by it despite there being deviations from the general law and the procedure provided for the redressal of the grievances to the litigants. Efforts to defeat the objectives of law by resorting to innovative measures and methods are to be discouraged, lest it may affect the commercial and mercantile activities in a smooth and healthy manner, ultimately affecting the economy of the country. 4. Section 138 of the Act makes a civil transaction to be an offence by fiction of law. Whereby any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person is returned by the bank unpaid either because of the amount or money standing to the credit of that person being insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account, such person, subject to the other conditions, shall be deemed to have committed an offence under the Section and be punished for a term which may extend to one year or with fine which may extend to twice the amount of cheque or with both. To make the dishonor of the cheque as an offe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder of the learned Magistrate, as confirmed by the High Court, with an increased fine. 27. In R Vijayan vs. Baby and another, [(2012) 1 SCC 260] Hon'ble Supreme Court held that while awarding compensation in matters under Section 138 of the N.I. Act, interest can be awarded @ 9% per annum. 28. Taking into consideration the above legal position, awarding jail sentence to the respondent/accused may not be in the interest of justice. Here, the appellant would also be interested in getting her amount back. Therefore, payment of compensation under Section 357 of the Code of Criminal Procedure to the complainant would be in the interest of justice. The punishment that can be awarded for an offence under Section 138 of N.I. Act is imprisonment for a term which may extend to two years, or with fine which may extend to twice the amount of the cheque, or both (stress supplied by me). The next step would be what could be the amount of fine. Here the cheque Exhibit-37 was drawn for ₹ 80,000/-. The complaint was filed in the year 2013 after the statutory notice. The amount became due to complainant from the date of notice. Accused has utilized the said amount till today. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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