TMI Blog2022 (4) TMI 1349X X X X Extracts X X X X X X X X Extracts X X X X ..... cheque. 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 VERSUS BRATINDRANATH BANERJEE [ 2001 (7) TMI 1172 - SUPREME COURT] . 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 nonexistence 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00/- as earnest money and agreed to receive the balance sale consideration of ₹ 2,00,000/- at the time of execution and registration of sale deed, which was fixed for 31.12.2011. 2.3 Though the respondent-accused could not get the sale deed executed and registered in favour of the appellant-complainant on the due date and demanded an amount of ₹ 10,00,000/- as a friendly loan from the appellant-complainant. Owing to the good relations, the appellant-complainant further advanced a sum of ₹ 10,00,000/- as loan to the respondent-accused in the first week of May, 2011, on the assurance by the respondent-accused that the said amount shall be returned shortly. 2.4 That in discharge of the said liability towards the loan amount of ₹ 10,00,000/-, the respondent-accused issued a cheque bearing No.294522 dated 09.02.2012 for a sum of ₹ 10,00,000/- drawn on Oriental Bank of Commerce, Arya Chowk, Ambala City in favour of the appellant-complainant with an assurance that the said cheque shall be honoured upon its presentation. 2.5 That, however, on presentation of the said cheque in the account by the appellant-complainant, the same was dishonoured by the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty in question, the security cheque has been misused. No amount of ₹ 10,00,000/- was received as friendly loan, and even the legal notice was never received by him. However, no evidence in defence was led by the respondent-accused. 2.9. Upon considering the rival submissions of the respective parties, the Trial Court came to the conclusion that the appellant-complainant could not establish the existence of a legally enforceable debt and that the cheque in question was issued in discharge thereof, and that the allegation as regards the friendly loan, transaction was not established. Hence, the respondent-accused was acquitted of the allegations levelled against him. 3. Aggrieved thereof, the instant appeal had been preferred. 4. A perusal of the judgment of the Judicial Magistrate First Class, Ambala, shows that following discrepancies were noticed by the Trial Court. (i) It was noticed by the Trial Court that the alleged friendly loan advanced to the respondent accused in the month of May 2011 is not substantiated or supported by any documentary evidence, except for self-serving oral testimony of the appellantcomplainant. (ii) That the appellant-complainant ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lity and perversity. The respondent-accused did not dispute his signatures on the cheque in question. In view of the presumption contemplated under Section 118 read with Section 139 of the Negotiable Instruments Act, 1881, the onus to prove his innocence was to be discharged by the respondent-accused. He submits that the Trial Court committed an error in ignoring the presumption in law and casting a negative burden on the petitioner, contrary to the statutory mandate. 7. I have heard the learned counsel for the appellant and have gone though the evidence adduced before the Court below. ANALYSIS 8. As the argument of the appellant is that there was a presumption of liability against the respondent-accused, it is necessary to examine and refer to the position in law as regards presumption under Section 118/139 of the Negotiable Instruments Act, 1881. Legal Position Regarding Presumption under Negotiable Instruments Act: 9. The presumption enshrined under Section 139 of the Negotiable Instruments Act is not absolute and is rather a rebuttable presumption. The accused would be discharged of the presumption, the moment an accused raises reasonable suspicion with respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 prosecution may be discharged with the help of presumptions of law or fact unless the accused adduces evidence showing the reasonable possibility of the nonexistence of the presumed fact. 23. In other words, provided the facts required to form the basis of a presumption of law exists, no discretion is left with the Court but to draw the statutory conclusion, but this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary. A fact is said to be proved when, after considering the matters before it, the Court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e rebutted...... (Emphasis supplied) It was, thus, held that the obligation on the prosecution may be discharged with the help of presumption of law or fact, unless, the accused adduces evidence showing reasonable possibility of the non-existence of the presumed fact. Thus, if the facts required to form the basis of a presumption of law exist, there is no discretion left with the Court but to draw the statutory conclusion; but 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 a 'prudent man'. 11. Reference is also necessary to be made to the judgment of the Hon'ble Supreme Court in the matter of Kumar Exports Vs. Sharma Carpets (2009) 2 SCC 513 . The relevant extract of the same is as under:- '13. In a significant departure from the general rule applicable to contracts, Section 118 of the Act provides certain pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... former case the Court has an option to raise the presumption or not, but in the latter case, the Court must necessarily raise the presumption. If in a case the Court has an option to raise the presumption and raises the presumption, the distinction between the two categories of presumptions ceases and the fact is presumed, unless and until it is disproved. 17. Section 118 of the Act inter alia directs that it shall be presumed, until the contrary is proved, that every negotiable instrument was made or drawn for consideration. Section 139 of the Act stipulates that unless the contrary is proved, it shall be presumed, that the holder of the cheque received the cheque, for the discharge of, whole or part of any debt or liability. 18. Applying the definition of the word `proved' in Section 3 of the Evidence Act to the provisions of Sections 118 and 139 of the Act, it becomes evident that in a trial under Section 138 of the Act a presumption will have to be made that every negotiable instrument was made or drawn for consideration and that it was executed for discharge of debt or liability once the execution of negotiable instrument is either proved or admitted. As soon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resumptions, 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 of the Act. 21. The accused has also an option to prove the non-existence of consideration and debt or liability either by letting in evidence or in some clear and exceptional cases, from the case set out by the complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the tria ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oubt 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 138can 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 accused/defendant cannot be expected to discharge an unduly high standard or proof. 28. In the absence of compelling justifications, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciety of the college where he was employed. Though the respondent stated before the Court below that he would be in a position to produce the documents in support of the said stand, it was noted that no documents were placed before the Court below. c) In the course of cross-examination, the respondent stated that the cheque was signed on the date when the payment was made, nevertheless he stated that he was not aware of the date when he paid the sum of ₹ 1,50,000/-. d) According to the respondent, the cheque was in the handwriting of the accused himself and the very next moment he made a contradictory statement that the cheque was not in the handwriting of the appellant and that he (complainant) wrote the same. e) The respondent also stated that the amount in words was written by him. f) The trial Court has also noted that it was not the case of the respondent that the writing in the cheque and filling up of the figures were with the consent of the accused appellant. .. 9. It has to be stated that in order to draw the presumption under Section 118 read along with 139 of the Negotiable Instruments Act, the burden was heavily upon the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 118(a), 138 and 139 of the Act, 1881. It was held that presumptions both under Sections 118(a) and 139 are rebuttable in nature. Explaining the expressions may presume and shall presume referring to an earlier judgment, following was held in paragraph No.28:- 28. What would be the effect of the expressions may presume , shall presume and conclusive proof has been considered by this Court in Union of India v. Pramod Gupta, (2005) 12 SCC 1, in the following terms: (SCC pp. 30-31, para 52) It is true that the legislature used two different phraseologies shall be presumed and may be presumed in Section 42 of the Punjab Land Revenue Act and furthermore although provided for the mode and manner of rebuttal of such presumption as regards the right to mines and minerals said to be vested in the Government vis- -vis the absence thereof in relation to the lands presumed to be retained by the landowners but the same would not mean that the words shall presume would be conclusive. The meaning of the expressions may presume and shall presume have been explained in Section 4of the Evidence Act, 1872, from a perusal whereof it would be evident that whenever it is d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the prosecution in a criminal case is different. 18. This Court again reiterated that 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 . In paragraph No.34, following was laid down:- 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. 25. 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 rai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the complainant to display his financial capacity to advance the amount alleged to have been lent would shift the burden on the complainant to prove his financial capacity to lend the money as well as the other circumstances to establish existence of consideration for issuance of cheque. After noticing that there was no evidence led before the Court to indicate the financial capacity of the complainant to lend the money in question, the Hon'ble Supreme Court held that the judgment of conviction suffered perversity and was thus, liable to be set aside. It was observed that the accused had raised a probable defence and that the complainant failed to prove his financial capacity on the basis of evidence led by him and thus, ordered acquittal of the accused. LEGAL POSITION IN APPEAL AGAINST ACQUITTAL 16. The same now leads to the scope of interference by the Court while hearing appeal against acquittal. The Hon'ble Supreme Court has held in the matter of M. G. Aggarwal versus State of Maharashtra, AIR 1963 SC 200, the relevant part is extracted as under: (16) Section 423(1) prescribes the powers of the appellate Court in disposing of appeals preferred before i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p v. The King Emperor and Nur Mohammad v. Emperor AIR 1945 PC 151. (17) Some of the earlier decisions of this Court, however, in emphasizing the importance of adopting a cautious approach in dealing with appeals against acquittals, it was observed that the presumption of innocence is reinforced by the order of acquittal and so, the findings of the trial Court which had the advantage of seeing the witnesses and hearing their evidence can be reversed only for very substantial and compelling reasons : vide Surajpal Singh V. The State Similarly in Ajmer Singh V. State of Punjab, it was observed that the interference of the High Court in an appeal against the order of acquittal would be justified only if there are very substantial and compelling reasons to do so.') In some other decisions, it has been stated that an order of acquittal can be reversed only for good and sufficiently cogent reasons or for strong reasons . In appreciating the effect of these observations, it must be remembered that these observations were not intended to lay down a rigid or inflexible rule which should govern the decision of the High Court in appeals against acquittals. They were not intended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ines for the High Court to interfere with the judgment and order of acquittal passed by the trial court. The appellate court should not ordinarily set aside a judgment of acquittal in a case where two views are possible, though the view of the appellate court may be the more probable one. While dealing with a judgment of acquittal, the appellate court has to consider the entire evidence on record, so as to arrive at a finding as to whether the views of the trial court were perverse or otherwise unsustainable. The appellate court is entitled to consider whether in arriving at a finding of fact, the trial court had failed to take into consideration admissible evidence and/or had taken into consideration the evidence brought on record contrary to law. Similarly, wrong placing of burden of proof may also be a subject-matter of scrutiny by the appellate court. (Vide Balak Ram v. State of U.P (1975) 3 SCC 219, Shambhoo Missir v. State of Bihar (1990) 4 SCC 17, Shailendra Pratap v. State of U.P (2003) 1 SCC 761, Narendra Singh v. State of M.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 v. S. Rami Reddy (2008) 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he presumption of innocence is available to him under the fundamental principle of criminal jurisprudence that every person shall be presumed to be innocent unless he is proved guilty by a competent court of law. Secondly, the accused having secured his acquittal, the presumption of his innocence is further reinforced, reaffirmed and strengthened by the trial court. (5) If two reasonable conclusions are possible on the basis of the evidence on record, the appellate court should not disturb the finding of acquittal recorded by the trial court. 16. In Ghurey Lal v. State of U.P (2008) 10 SCC 450, this Court reiterated the said view, observing that the appellate court in dealing with the cases in which the trial courts have acquitted the accused, should bear in mind that the trial court s acquittal bolsters the presumption that he is innocent. The appellate court must give due weight and consideration to the decision of the trial court as the trial court had the distinct advantage of watching the demeanour of the witnesses, and was in a better position to evaluate the credibility of the witnesses. 17. In State of Rajasthan v. Naresh (2009) 9 SCC 368, the Court again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inst the weight of evidence , or if the finding so outrageously defies logic as to suffer from the vice of irrationality. (Vide Rajinder Kumar Kindra v. Delhi Admn (1984) 4 SCC 635, Excise and Taxation Officercum- Assessing Authority v. Gopi Nath Sons 1992 Supp (2) SCC 312, Triveni Rubber Plastics v. CCE 1994 Supp. (3) SCC 665, Gaya Din v. Hanuman Prasad (2001) 1 SCC 501, Aruvelu v.State (2009) 10 SCC 206 and Gamini Bala Koteswara Rao v. State of A.P.(2009) 10 SCC 636). (emphasis supplied) 7.2.3 It is further observed, after following the decision of this Court in the case of Kuldeep Singh v. Commissioner of Police (1999) 2 SCC 10, that if a decision is arrived at on the basis of no evidence or thoroughly unreliable evidence and no reasonable person would act upon it, the order would be perverse. But if there is some evidence on record which is acceptable and which could be relied upon, the conclusions would not be treated as perverse and the findings would not be interfered with. 7.3 In the case of Vijay Mohan Singh v. State of Karnataka, (2019) 5 SCC 436, this Court again had an occasion to consider the scope o Section 378 Cr.P.C. and the interference by the High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is Court in Ramesh Babula Doshi v. State of Gujarat (1996) 9 SCC 225 viz. first recording its conclusion on the question whether the approach of the trial court in dealing with the evidence was patently illegal or the conclusions arrived at by it were wholly untenable, which alone will justify interference in an order of acquittal though the High Court has rendered a wellconsidered judgment duly meeting all the contentions raised before it. But then will this non-compliance per se justify setting aside the judgment under appeal? We think, not. In our view, in such a case, the approach of the court which is considering the validity of the judgment of an appellate court which has reversed the order of acquittal passed by the trial court, should be to satisfy itself if the approach of the trial court in dealing with the evidence was patently illegal or conclusions arrived at by it are demonstrably unsustainable and whether the judgment of the appellate court is free from those infirmities; if so to hold that the trial court judgment warranted interference. In such a case, there is obviously no reason why the appellate court s judgment should be disturbed. But if on the other hand the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal was perverse it could not set aside that order. It has been laid down by this Court that it is open to the High Court on an appeal against an order of acquittal to review the entire evidence and to come to its own conclusion, of course, keeping in view the well- established rule that the presumption of innocence of the accused is not weakened but strengthened by the judgment of acquittal passed by the trial court which had the advantage of observing the demeanour of witnesses whose evidence have been recorded in its presence. It is also well settled that the court of appeal has as wide powers of appreciation of evidence in an appeal against an order of acquittal as in the case of an appeal against an order of conviction, subject to the riders that the presumption of innocence with which the accused person starts in the trial court continues even up to the appellate stage and that the appellate court should attach due weight to the opinion of the trial court which recorded the order of acquittal. If the appellate court reviews the evidence, keeping those principles in mind, and comes to a contrary conclusion, the judgment cannot be said to have been vitiated. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere with acquittal, than to curtail the power of the court to review the evidence and to come to its own conclusion. g) The findings of fact recorded by a court can be held to be perverse if the findings have been arrived at by ignoring or excluding relevant material or by taking into consideration irrelevant/inadmissible material. The finding may also be said to be perverse if it is against the weight of evidence , or if the finding so outrageously defies logic as to suffer from the vice of irrationality. Conclusion 19. It is evident from a reading of the discrepancies noticed by the Trial Court and the deficiencies culled out in the preceding Para No.4, as well as the law settled by the Hon ble Supreme Court in relation to the guidelines while examining an appeal against an order of acquittal that the presumption under Section 139 of the Negotiable Instruments Act is a rebuttable presumption, I find that there is no illegality, infirmity, perversity or miscarriage of justice in the judgment dated 28.11.2014 passed by the Trial Court. It cannot be held that the opinion formed by the Trial Court was incomprehensible or was unsustainable upon the reading and inte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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