TMI Blog2022 (3) TMI 683X X X X Extracts X X X X X X X X Extracts X X X X ..... t the same does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary. The rebuttal does not have to be conclusively established, but such evidence must be adduced 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'. The law is thus well settled that in order to rebut the statutory presumption, an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. The Court need not insist in every case that the accused should disprove the non-existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated - To disprove the presumption, an accused should bring on record such facts and circumstances, upon consideration of which, the Court may either believe that the considerat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agistrate 1st Class, Panipat. 3. By virtue of the impugned judgment, the petitioner had been convicted for offences under Section 138 of the Negotiable Instruments Act, 1881 and had been sentenced to undergo imprisonment for a period of six months. Besides, the convict/petitioner had also been ordered to pay an amount of ₹ 2,02,500/- as compensation to the complainant under Section 357(3) CrPC, for his suffering due to dis-honour of the cheque for an amount of ₹ 1,35,000/- as well as towards loss of interest on the amount and expenses incurred in pursuing the proceedings. 4. Brief conspectus of facts culled out from the judgment of conviction passed by the Judicial Magistrate 1st Class, Panipat, shows that the petitioner (accused) is alleged to have issued a cheque bearing No. 584258 dated 25.03.2018 for a sum of ₹ 1,35,000/- drawn on Canara Bank, Branch Office Assandh Road, Panipat towards discharge of his liabilities. The aforesaid cheque (Ex. C-1) was presented by the complainant through his banker, however, the same was dishonoured by the banker of the accused upon its presentation with remarks 'funds insufficient' vide return memos dated 29.03.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rated in the affidavit tendered by the complainant before the Court. Reference was also made to the excerpts of the cross-examination of the complainant, which is as under:- 'I am seventh class passed. I work in factory. There is a factory named Shivangi in Rajasthan. My income is ₹ 15,000/- per month. I do not have any proof of income. Get cash. I have an account with Union Bank of India, in which I deposit money. I have not brought my account details today. Xxxxxxxxxxxxxxxxxxx. I have never done business with Prem Kumar. I do not know what work Prem Kumar does. How much is that Prem Kumar income. I do not know how educated Prem Kumar. Xxxxxxxxxxxxxxxxxxxxxxxxxx. I do not have any proof regarding money transaction. In which there is no receipt or other written proof. Said himself there was a transaction with him before. I have not given any record on file regarding money. In which RTGS, D.D., bank cheque, account statement. So that it can be proved that I had given money to Prem Kumar. I have given any affidavit in this case or not. I do not care the lawyer would know I have not put any proof of my income on file. I have a witness to the money transaction, but till d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rial Court has passed its order in a mechanical manner without noticing the evidence led by the petitioner. It is observed by the JMIC, Panipat, in Para 8 of its judgment that the accused led no evidence in defence, whereas, the petitioner had actually stepped as a witness and his affidavit in this regard is exhibit DW1/A. In the said affidavit, it was specifically sworn by the petitioner that his signed cheque had been lost from the shop and the same has been stolen by the complainant. It was presented as a misuse of the instrument by the complainant. Learned counsel submitted that even though the petitioner was also subjected to cross-examination by the complainant, however, no suggestion was given about the date and time when the amount was advanced to the petitioner or the date, time or place when the cheque in lieu of allegedly borrowed amount was issued by the petitioner. It is, thus, submitted that the complainant has failed to establish by any primary evidence about having advanced the amount and has also failed to give details as to when the cheque in question was issued in favour of the complainant, in discharge of the liability, if any. It is further argued that by faili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the argument raised by the petitioner is an afterthought as the amount had been advanced in good faith considering that the father of the complainant and the petitioner used to carry on their business adjacent to each other. The petitioner is stated to have a shop dealing in cement/building material and the father of the complainant used to have a rehri as a vegetable vendor. It is further argued by learned counsel for the complainant that the petitioner has not been able to offer any explanation as to why he left a signed blank cheque in his shop and that he having not denied his signatures on the instrument, there is a presumption that the issuance of cheque was valid and the complainant is holder of cheque in due course. It is further contended that even though the complainant was working in a factory in Rajasthan, however, he is a permanent resident of Panipat and the cheque in question has not been dis-honoured on account of a mismatch of signatures, but the same is on account of 'funds insufficient'. There is no allegation of forgery of signatures. 10. I have heard the rivals submissions advanced by the parties and have gone through the record with their assistance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r other liability.]' 13. It is a settled proposition of law that presumption under Section 139 of the Negotiable Instruments Act is a presumption of law, as distinguished from a presumption of fact, such a presumption is a rebuttable presumption and the drawer of the cheque may dispel the same. The aforesaid position in law stands settled in the judgment of the Hon'ble Supreme Court in the matter of Hiten P. Dalal Vs. Bratindranath Banerjee (2001) 6 SCC 16. While dealing with the aspect of presumption in terms of Section 139 of the Negotiable Instruments Act, the Hon'ble Supreme Court observed as under:- '21. The appellant's submission that the cheques were not drawn for the 'discharge in whole or in part of any debt or other liability' is answered by the third presumption available to the Bank under 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 bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gotiable Instruments Act could be rebutted, in certain circumstances, by a presumption of fact raised under Section 114 of the Evidence Act. The decision must be limited to the facts of that case. The more authoritative view has been laid down in the subsequent decision of the Constitution Bench in Dhanvantrai Balwantrai Desai vs. State of Maharashtra AIR 1964 SC 575, where this Court reiterated the principle enunciated in State of Madras vs. Vaidyanath Iyer (Supra) and clarified that the distinction between the two kinds of presumption lay not only in the mandate to the Court, but also in the nature of evidence required to rebut the two. In the case of a discretionary presumption the presumption if drawn may be rebutted by an explanation which might reasonably be true and which is consistent with the innocence of the accused. On the other hand in the case of a mandatory 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ple to facilitate negotiability as well as trade. Section 118 of the Act provides presumptions to be raised until the contrary is proved (i) as to consideration, (ii) as to date of instrument, (iii) as to time of acceptance,(iv) as to time of transfer, (v) as to order of indorsements,(vi) as to appropriate stamp and (vii) as to holder being a holder in due course. 14. Section 139 of the Act 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. 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 Indian 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). The term 'presumption' is used to designate an inference, affirmative or disaffirmative of the existence a fact, conveniently called t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and in discharge of any debt or liability. A presumption is not in itself evidence, but only makes a prima facie case for a party for whose benefit it exists. 19. The use of the phrase until the contrary is proved in Section 118 of the Act and use of the words unless the contrary is proved in Section 139 of the Act read with definitions of may presume and shall presume as given in Section 4 of the Evidence Act, makes it at once clear that presumptions to be raised under both the provisions are rebuttable. When a presumption is rebuttable, it only points out that the party on whom lies the duty of going forward with evidence, on the fact presumed and when that party has produced evidence fairly and reasonably tending to show that the real fact is not as presumed, the purpose of the presumption is over. 20. The accused in a trial under Section 138 of the Act has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case the non-existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumptions an accus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law is thus well settled that in order to rebut the statutory presumption, an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. The Court need not insist in every case that the accused should disprove the non-existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, bare denial of the passing of the consideration and existence of debt would not serve the purpose of the accused. To disprove the presumption, an 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 that 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. 17. In the matter of Rangappa Vs. Sri Mohan (2010) 11 SCC 441, the Hon'ble Supreme Court observed on the matter o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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.' 18. In the matter of John K. Abraham Vs. Simon C. Abraham And Another (2014) 2 SCC 236, the Hon'ble Supreme Court observed that in order to draw presumption under Section 118 read with Section 139 of the Negotiable Instruments Act, burden lies on the complainant to show (i) that he had the requisite funds for advancing the sum of money/loan in question to the accused (ii) that the issuance of cheque by accused in support of repayment of money advanced was true and (iii) that the accused was bound to make payment as had been agreed while issuing cheque in favour of the complainant. Taking note of the fact that the complainant was not aware of the date when the substantial amount was advanced by him to the accused and his failure to produce relevant documents in support of the alleged source for advancing money to an accused, the judgment convicting the accused was set aside by holding the same to be perverse. The relevant facts noticed from the aforesaid judgment are extracted as under:- '6. When we examine the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent-complainant, as rightly concluded by the learned trial Judge, the respondent was not even aware of the date when substantial amount of ₹ 1,50,000/- was advanced by him to the appellant, that he was not sure as to who wrote the cheque, that he was not even aware when exactly and where exactly the transaction took place for which the cheque came to be issued by the appellant. Apart from the said serious lacuna in the evidence of the complainant, he further admitted as PW.1 by stating once in the course of the cross- examination that the cheque was in the handwriting of the accused and the very next moment taking a diametrically opposite stand that it is not in the handwriting of the accused and that it was written by the complainant himself, by further reiterating that the amount in words was written by him. 11. We find that the various defects in the evidence of respondent, as noted by the trial Court, which we have set out in paragraph 7 of the judgment, were simply brushed aside by the High Court without assigning any valid reason. Such a serious lacuna in the evidence of the complainant, which strikes at the root of a complaint under Section 138, having bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o definition of words proved and disproved under Section 3 of the Evidence Act, following was laid down in paragraph No. 30: 30. Applying the said definitions of proved or disproved to the principle behind Section 118(a) of the Act, the court shall presume a negotiable instrument to be for consideration unless and until after considering the matter before it, it either believes that the consideration does not exist or considers the non-existence of the consideration so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that the consideration does not exist. For rebutting such presumption, what is needed is to raise a probable defence. Even for the said purpose, the evidence adduced on behalf of the complainant could be relied upon. 16. This Court held that what is needed is to raise a probable defence, for which it is not necessary for the accused to disprove the existence of consideration by way of direct evidence and even the evidence adduced on behalf of the complainant can be relied upon. Dealing with standard of proof, following was observed in paragraph No. 32:- 32. The standard of proof evi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obabilities 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 evidentiary burden and not a persuasive burden. 26. Applying the preposition of law as noted above, in facts of the present case, it is clear that signature on cheque having been admitted, a presumption shall be raised under Section 139 that cheque was issued in discharge of debt or liability. The question to be looked into is as to whether any probable defence was raised by the accused. In cross-examination of the PW1, when the specific question was put that cheque was issued in relation to loan of ₹ 25,000/- taken by the accused, the PW1 said that he does not remember. PW1 in his evidence admitted that he retired in 1997 on which date he received monetary benefit of ₹ 8 lakhs, which was encashed by the complainant. It was also brought in the evidence that in the year 2010, the complainant entered into a sale agreement for which he paid an amount of ₹ 4,50,000/- to Balana Gouda toward ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uce any proof of income. The complainant did not even bring-forth his account statements or the banking details. (iii) The complainant has failed to establish availability of such a huge amount considering that the complainant used to earn a meagre salary of ₹ 15,000/- per month while working as a labourer in a factory and was staying in a rented accommodation in Rajasthan. (iv) The complainant acknowledges in the cross-examination that he did not have any proof regarding money transaction or any written receipt/acknowledgment. (v) The complainant has stated in the cross-examination that he had a witness to the money transaction, however, neither the said aspect has been mentioned in the complaint nor any such witness has been adduced by the complainant in evidence. Hence, the best evidence has been withheld. (vi) The complainant has although stated in his evidence that he had transacted with the accused on earlier occasions as well, however, no evidence in this regard has been adduced. The said statement is also contradictory since complainant himself stated that he had no transactions or business with petitioner. (vii) There is no plausible reason w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in his ITR by the complainant but it has come in evidence that the complainant is working in a factory in Rajasthan and is earning handsomely. The complainant had also stated that he used to reside on rent in the locality where the accused was residing and he had friendly relations with the accused. This fact was nowhere denied by the accused in cross-examination of the complainant.' 23. The finding recorded by the trial Court is also extracted as under:- 23. In statement under section 313 Cr.P.C. of accused Prem Singh Rohilla, accused has taken defence that he has no dealings with complainant Guddu Kumar and cheque was stolen by some person which was later on misused by complainant. The entire record shows that accused has failed to prove that cheque was firstly stolen by complainant and then later on was misused by him. He has failed to explain that why he did not file any reply to the legal notice despite service of the same. Accused has also failed to explain that why he did not file any application before suitable authorities when cheque was stolen in order to safeguard his Interest. He has also not produced any expert in order to show that cheque has not been ..... X X X X Extracts X X X X X X X X Extracts X X X X
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