TMI Blog2019 (7) TMI 1821X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, Act, in order to attract section 138 of the debt has to be a legally enforceable debt as said is clear from the explanation to section 138 which provides that for the purposes of the said section the debt or other liability means a legally enforceable debt or other liability. Though it is observed in para 15 that the same rule with the same rigor cannot be applied in a matter relating to the offences under Sec. 138 of the Negotiable Instruments Act, particularly where a presumption is drawn that the holder has received a cheque for the discharge, wholly or in part, of any debt or liability. However, it is further observed that the accused is entitled to bring on record the relevant material to rebut the presumption and to show that preponderance of probabilities are in favour of his defence then the Appellate Court is certainly entitled to examine the evidence in order to find out if preponderance indeed leans in favour of the accused - In the case at hand, the respondent/accused has succeeded in bringing on record probable defences and has rebutted the presumption; the complainant has not further discharged his burden to indicate that the transaction in question was a leg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce. 4 . A Legal Notice through Registered Post with acknowledgment due came to be issued to the respondent/accused on 18.1.2012 calling upon him to pay the amount of ' 4,00,000/- within fifteen days from the date of receipt of the Notice. 5 . Despite due service of the Notice upon the accused on 19.1.2012, the respondent/accused neither paid the amount nor replied the said Notice. The complainant, therefore, filed a complaint under Sec. 138 of the Negotiable Instruments Act. 6 . The complainant filed an Affidavit in lieu of his evidence before the Judicial Magistrate First Class and has also examined Dinesh Komarpant in support of his case. 7. The respondent/accused did not step into the witness box, however he examined one Ajit Pawaskar, who works as an Under Secretary (GAD-II) in the Secretariate, Porvorim, in order to prove that the respondent was in the Office on 12.11.2010 on the basis of a biometric device which recognizes thumb impression of the employees. 8. The defence of the respondent/accused in his statement under Sec. 313 of Cr.P.C. is that the complainant had never advanced loan of ' 4,00,000/- and he had never visited Canacona Goa on 12.11.2010 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nant/appellant, has failed to discharge the burden of proof that it was a legally enforceable debt or liability. 2 The cash of ' 4,00,000/- was unaccounted, in the sense, no Income Tax Returns have been tendered by the complainant/appellant. 3 The execution of Exhibit 19 which is purported to be a receipt of the acknowledgement of money by the respondent/accused has not been established. 4 The Magistrate disbelieved that on 12.11.2010 between 3.30 p.m. to 4.30 p.m. the complainant/appellant had advanced the amount to the accused at Palolem Guest House, Canacona, as it was shown that the respondent/accused was in his Office at the Secretariate, Porvorim, on the basis of bio-metric device. 13 . Shri. Bhobe, the Learned Counsel appearing for the appellant/complainant reiterated the facts by contending that there is no dispute as regards advancement of loan of ' 4,00,000/- to the respondent/accused on 12.11.2010 in the presence of Pw2 Dinesh. It is also not disputed that the respondent/accused had issued a cheque dated 7.1.2012 from his account with the Banker and his signature over it. It is contended by Mr. Bhobe that the complainant has duly proved the acknowledg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... set down few facts which are no more in dispute: a. The Cheque (Exh. 16) dated 7.1.2012 was issued from the account of the respondent/accused with his Banker. b. The Cheque (Exh. 16) bears the signature of the respondent. c. The Cheque (Exh. 16) was returned unpaid for the reason Not Arranged For , vide Bank Memo (Exh. 17). d. Due service of statutory Notice dated 18.1.2012 upon the respondent on 19.1.2012 (Exh. 18). 18. In his Affidavit in lieu of examination-in-chief the appellant/complainant deposed that the respondent/accused was introduced to him by Pw2 Dinesh somewhere in the month of August, 2010. Since the respondent was in financial need to carry out repairs of his house, he approached the appellant/complainant somewhere in the first week of November, 2010, and requested him to lend an amount of ' 4,00,000/-. The respondent/accused assured the complainant/appellant that he will repay the amount within one year. The complainant/appellant, therefore, keeping trust on the accused and the assurance given by him lent ' 4,00,000/- on 12.11.2010 in the presence of Pw2 Dinesh. 19. Since the respondent/accused did not repay the amount despite demand, a Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. The cross-examination further reveals that an amount of ' 4,00,000/- was paid by the complainant/appellant to the accused/respondent in the month of November, 2010, at Palolem Guest House. It further reveals that at the request of the complainant, Pw2 Dinesh bought a stamp paper and obtained a receipt from the respondent/accused. 23. From the evidence of these two witnesses, it is quite clear and has been proved that an amount of ' 4,00,000/- was lent/paid by the complainant/appellant to the accused/respondent in the presence of Pw2 Dinesh on 12.11.2010. 24. The Account Payee Cheque Exhibit 16 dated 7.1.2012 indicates the signature of the respondent which he admits. Exhibit 19 is also a document on record which is on a stamp paper of ' 100/- indicating that an amount of ' 4,00,000/- was received by the accused from the complainant for his house repairs. 25. From the oral evidence of the complainant and the documents on record it transpires that an amount of ' 4,00,000/- was paid by the complainant to the accused and it was duly acknowledged by the accused by executing Exhibit 19. From the evidence of the appellant/complainant and of Pw2 Dinesh it has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a complaint under Section 138 of the Act. The submission before the Apex Court was that the essential requirement of Section 138 was that there has to be a legally enforceable debt. The Apex Court referred to the provisions of Section 271-D of the Income Tax Act, 1961 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. In paragraph 29 of the decision, the Apex Court referred to the ingredients of the offence under section 138. Paragraph 29 reads thus: 29. 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. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used beyond reasonable doubt, but the standard of proof so as to prove a defence is preponderance of probability . Inference of preponderance of probabilities can be drawn even by reference to circumstances. In paragraph 44 the Apex Court observed thus: The presumption of innocence is a human right (See Narendra Singh v. State of M.P., Ranjitsing Brahmajeetsing Sharma v. State of Maharashtra and Rajesh Ranjan Yadav v. CBI.) Rights Article 6(2) of the European Convention on Human 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's 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent transaction. He even was unable to tell the exact amount of turnover for the year 2010. According to him, he will have to consult his Chartered Accountant namely Mr. Kamat. He states that since cash was lying in his hands, there was no need to withdraw any amount from the Bank. He admits that he had not shown the present transaction in his Income Tax Returns for the year 2010-2012. 28. As observed by this Court in case of Sanjay Mishra (supra) that merely because amount advanced is not shown in the Income Tax Returns, in every case, one cannot jump to the conclusion that the presumption under Sec. 139 of the said Act, stands rebutted. Looking to the business of shack of the complainant it could not have been difficult for him to advance a cash of ' 4,00,000/-. 29. It is held by the Hon'ble Supreme Court in case of Krishna Janardhan Bhat Vs. Dattatraya G. Hegde, that as per Section 271-D of the Income Tax Act, if a person takes or accepts any loan or deposit in contravention of provisions of Section 269- SS, he shall be liable to pay, by way of penalty, a sum equal to an amount of loan or deposit so taken or accepted. Thus, only on that basis it cannot be said that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... does not appear to be a genuine and authentic document indicating a legally enforceable debt. The document is also silent as to where it was written. 35. Sec. 139 merely raises a presumption in favour of the holder of the cheque that the same has been issued for discharge of any debt or other liability. Thus, even if the presumption is not rebutted, in order to attract Sec. 138 of the said Act, the debt has to be a legally enforceable debt as is clear from the explanation to Sec. 138, which provides that for the purposes of the said Section the debt or other liability means a legally enforceable debt or other liability. 36. In the cross-examination, it has been brought on record that the respondent was introduced with the complainant in the month of August 2010, and within a span of three months the complainant lent ' 4,00,000/- to the accused which is something quite strange and unbelievable that a person without having much acquaintance would lent such a huge sum to a person about whom he does not have any information except his acquaintance with Pw2 Dinesh Komarpant. From the cross-examination of the complainant it further reveals that he did not inquire about the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. The complainant had approached the said MLA with a request to put some pressure on the accused for returning the said amount. It reveals from the cross-examination that the said Minister/MLA called the accused in the Secretariate at Porvorim and requested him to return the amount. The accused was asked to give an undertaking in writing which is at Exhibit 23. The recitals of this document are self explanatory: From: Shivdas V. Pednekar, Amuli Wada, Khorlim, Mapusa, Bardez - Goa. Date: 26/03/2012 To, The Ramesh Tawadkar, MLA, Canacona - Goa. That I undersigned Mr. Shivdas Vithu Pednekar, r/o. Amuli Wada, Mapusa - Goa, that I received 4 lakhs (Four Lakhs) 4,00,000 from Vikas Bhagat on 16/11/2010, now that same amount I will pay on 25/04/2012 in front of Canacona MLA. If I will fail to pay same amount on that particular date you are free to take any action on me. Thanking you, Sd/- Yours faithfully, Sd/- (Umesh Abbegiri) (Shivdas V. Pednekar) 41. A bare look at the recitals would indicate that the accused was pressur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... summarized the principles as regards Sec. 118 (a) and 139 of the Negotiable Instruments Act. Para 23 reads thus: 23. We having noticed the ratio laid down by this Court in above cases on Sections 118(a) and 139, we now summarize the principles enumerated by this Court in following manner: (i) Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability. (ii) The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities. iii) To rebut the presumption, it is open for the accused to rely on evidence led by him or accused can also rely on the materials submitted by the complainant in order to raise a probable defence. 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 they rely. (iv) That it is not necessary for the accused to come in the witness box in support of his defence, Section 139 imposed an evide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the Movement Register in order to show that on 12.11.2010 the respondent had left the Office and visited Palolem Guest House where he had accepted cash of ' 4,00,000/- from the complainant and executed Exhibit 19 between 3.30 to 4.00 p.m. 55. Annexure I to the Exhibit 32 obtained under Right to Information Act, indicates that the respondent was present in the Office from 9.26 hours to 18.08 hours. There is no rebuttal evidence tendered by the complainant. 56. Though, it is contended by the Learned Counsel for the complainant that it was quite possible to travel a distance of around 60 kms. from Porvorim to Canacona, the Learned Counsel for the respondent, on the other hand contends that the distance is about 69 kms. which requires at least two hours driving and therefore it was improbable for the respondent to travel the said distance. As stated above, the public document tendered by Dw1 proves that the respondent was in the Office from 9.26 to 18.08 on 12.11.2010. 57. The Learned Counsel for the complainant, Mr. Bhobe drew my attention to paras 10, 15 and 18 of a Judgment of the Supreme Court in case of Rohitbhai Jivanlal Patel Vs. State of Gujarat and another, MAN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble reasons could weigh with the Court to deny the existence of legally enforceable debt in such glaring circumstances. 25. Considering the fact that the complainant maintains his books of account, coupled with the fact that the respondent No. 2 had merely refuted on flimsy ground of his having transacted with witness Jagdishbhai and not with the complainant, has failed to discharge the burden which had shifted upon him. It is to be noted that the respondent No. 2 has admitted his signature on the impugned cheque. At no point of time, the cheque has been disputed...... Once this fact is acknowledged that the signature on the cheque is that of the respondent No. 2-accused, section 139 of the Negotiable Instruments Act would mandate the presumption that the cheque concerns a legally enforceable debt or liability. Of course, this presumption is in the nature of rebuttal and onus is on the accused thereafter to raise a probable defence. 2 5 . 1 As can be noted from the chronology of events and the material that has been placed before this Court that the defence raised by the accused is not at all probable. The respondent No. 2- accused states that the money was given as a hand lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to what is regarded as normal or reasonable; or is wholly unsustainable in law. Such general restrictions are essentially to remind the Appellate Court that an accused is presumed to be innocent unless proved guilty beyond reasonable doubt and a judgment of acquittal further strengthens such presumption in favour of the accused. However, such restrictions need to be visualised in the context of the particular matter before the Appellate Court and the nature of inquiry therein. The same rule with same rigour cannot be applied in a matter relating to the offence under Section 138 of the NI Act, particularly where a presumption is drawn that the holder has received the cheque for the discharge, wholly or in part, of any debt or liability. Of course, the accused is entitled to bring on record the relevant material to rebut such presumption and to show that preponderance of probabilities are in favour of his defence but while examining if the accused has brought about a probable defence so as to rebut the presumption, the Appellate Court is certainly entitled to examine the evidence on record in order to find if preponderance indeed leans in favour of the accused. 1 8 . So far the qu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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