TMI Blog2022 (10) TMI 260X X X X Extracts X X X X X X X X Extracts X X X X ..... ich are reflected in the Agreement. The accused admitted a receipt of such an amount. The complainant stated that she received the said amount as a gift from her husband. Therefore, when the bank transaction clearly shows that the complainant was having an amount of ₹10,00,000/- which she paid to the accused by way of three cheques and the accused admitted of the receipt of such amount in an Agreement, the said accused cannot be allowed to question the capacity of the complainant to pay such amount. The evidence to that effect is more convincing on the basis of the Agreement and the cheques by which the amount was paid to the accused a friendly loan. It is clear that the accused need not enter the witness box to rebut the presumption. However, such presumption of law cannot be considered as rebutted only by giving denials and suggestions. There has to be some cogent material brought on record during the evidence of the complainant and his witnesses, on the preponderance of probabilities so as to rebut such presumption - In the present matter and from the cross-examination of the complainant, it is clear that the accused failed to rebut the presumption under Section 139 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ernment Advocate for respondent No.2. 4. With the assistance of the learned Counsel appearing for the parties, I have perused records and proceedings as well as the paper book. 5. Learned Counsel Shri Ryan Menezes appearing for the appellant strongly contended that the learned Magistrate failed to consider presumption under Section 139 of N.I. Act and wrongly put a burden on the complainant to prove otherwise. He invited attention to the document executed between the parties and claimed that an amount of 10,00,000/- was advanced and it was agreed ₹ by the respondent that he shall pay an amount of ₹12,50,000/- which includes a share in the profit of the respondent arising from the property transaction to be given to the appellant. He, therefore, submitted that a cheque towards legally enforceable debt or liability was issued in favour of the appellant. On presentation, it was dishonoured. A legal notice was sent to respondent No.1 demanding the amount mentioned in the cheque with the stipulated period. No reply was sent from respondent No.1 to such legal notice. Therefore, the complaint was lodged under Section 138 of the N.I. Act. 6. The learned Counsel Shri Ry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he complainant was supposed to prove whether respondent No.1 gained any profit out of any land transaction. He then submitted that cross-examination of the complainant showed that no question of paying the said amount of ₹2,50,000/- or above ₹10,00,000/-. 8. The learned Counsel Suraj Naik then submitted that the appellant filed a Civil Suit for recovery of the said amount in Belgaum and the said Civil Suit has been decreed thereby respondent No.1 has been directed to pay only an amount of ₹10,00,000/- with interest and not the additional amount of ₹2,50,000/-. Thus, it is clear that the said additional amount of ₹2,50,000/- was only depending on the contingency of earning profit by respondent No.1 in a land transaction. But such contingency did not happen, the question of paying such profit or sharing such profit does not arise. Therefore, the demand of ₹12,50,000/- by the complainant was not at all towards legally enforceable debt. 9. Learned Counsel Shri Suraj Naik then submitted that the complainant failed to prove the source of her income so as to advance a huge amount of ₹10,00,000/-. Her explanation in the cross-examination that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to ₹12,50,000/- in favour of the complainant towards the repayment of the said amount. On presentation of the said cheque, it was dishonoured due to funds insufficient . The complainant informed the accused about it and then the accused requested her to represent the cheque again after 20/12/2011. 14. The complainant then presented the cheque for realisation with her bank at Panaji on 21/12/2011, however, it was again dishonoured due to insufficient funds. The bank vide its memorandum dated 22/12/2011 informed the complainant. A legal notice dated 26/12/2011 was issued to the accused by a registered post calling upon him to make the payment of the said cheque within a period of 15 days from the date of the receipt of the said notice. 15. The Accused received such notice on 08/01/2012, however, he neither replied nor complied with the said notice. Thus, the complaint was lodged before the learned Magistrate who on verification of the complaint issued a process against the accused. 16. The substance of the accusation was explained to the accused on 15/02/2013 upon which he pleaded not guilty and claimed to be tried. The complainant filed an affidavit-in-evidence and p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as above. 22. Thus, the Court shall presume the liability of the drawer of the cheques for the amounts for which the cheques are drawn. No doubt such presumption is a rebuttable presumption. However, with the aid of Section 138 of the N.I. Act which is an exception to general Rules, the burden/onus shifts on the accused to rebut it. 23. In the case of Bir Singh(supra), the Hon ble Apex Court while discussing the case of Hiten P. Dalal (supra) and other earlier decisions observed that Section 139 of N.I.Act mandates that unless the contrary is proved, it is to be presumed 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. However, such presumption is a rebuttable presumption by proving to the contrary. It is further observed that in order to rebut a presumption of law it is not sufficient for the accused to do it by mere denial or suggestions. Something cogent and convincing is required to be brought on record either through cross-examination of the complainant and his witnesses or through leading evidence by the accused, showing a reasonable possibility of the non-e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own. 25. In the case of Krishan P. Morajkar(supra), this Court while dealing with the provisions of Section 138 of N.I. Act specifically observed that when a person signs a cheque and delivers it, even if it is a blank cheque or a post-dated cheque, presumptions under Section 118(b) and 139 of the Negotiable Instruments Act would have to be raised and would have to be rebutted by the accused, albeit by raising a probability. Unless the Courts start discouraging flimsy defences, the acceptability of cheques would not increase. 26. The above observations are now settled by the proposition of law as discussed in the catena of decisions. Therefore, the submissions of the learned Counsel for the accused that he handed over a blank cheque to the husband of the complainant, cannot be acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y a note, was executed by the accused, the rules of presumptions under Sections 118 and 139 of the Act help him shift the burden on the accused. The presumptions will live, exist and survive and shall end only when the contrary is proved by the accused, that is, the cheque was not issued for consideration 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. 28. Thus, it is quite evident that the presumption cannot be r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ords, it is open to the accused to establish that there is no consideration received. It is in the context of this provision that the theory of probable defence has grown. In an earlier judgment, in fact, which has also been adverted to in Basalingappa (supra), this Court notes that Section 139 of the N.I. Act is an example of reverse onus [ see Rangappa v/ Sri Mohan (2010) 11 SCC 441). It is also true that this Court has found that the accused is not expected to discharge an unduly high standard of proof. It is accordingly that the principle has developed that all which the accused needs to establish is a probable defence. As to whether a probable defence has been established is a matter to be decided on the facts of each case on the conspectus of evidence and circumstances that exist. 10. The Trial Court and the First Appellate Court have noted that in the case under Section 138 of the N.I. Act the complainant need not show in the first instance that he had the capacity. The proceedings under Section 138 of the N.I. Act is not a civil suit. At the time, when the complainant gives his evidence, unless a case is set up in the reply notice to the statutory notice sent, that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 33. During the cross-examination, certain questions were asked with regard to the alleged money laundering business which the complainant has categorically denied. Similarly, a suggestion was put to her that the accused did not sign the cheque and that she carried out material alteration on the cheque. Another suggestion given that the accused did not receive a legal notice. All these suggestions have been firmly denied. 34. Much energy was consumed while cross-examining the complainant on the so called date mentioned on the cheque. The accused tried to project that the cheque was dated 23/04/2011 and not 23/11/2011. The complainant firmly denied all these suggestions. A bare perusal of the cheque shows that it is dated 23/11/2011 and cannot be by any stretch of imagination as 23/04/2011. Secondly, the Agreement produced at Exh.47 executed between the complainant and the accused shows in paragraph No.3 the details of the cheque including the Serial Number, date, amount which reads thus: (1) Cheque no. 744710 - dated 23/11/2011 drawn on 2 Karnataka Bank Ltd. for Rs 12,50,000/(Rupees Twelve Lakhs Fifty Thousand only) 35. Thus, this aspect has been rightly considered b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... analaxmi Bank for Rs 4,00,000/(Rupees Four Lakhs only) (3) Cheque no. 000223 dated 23/09/2011 drawn on Dhanalaxmi Bank for Rs 2,00,000/(Rupees Two Lakhs only). 2. The Party Of the First Part hereby undertakes and bind himself to return the amount of Rs 10,00,000/- (Rupees Ten Lakhs only), borrowed from Party Of the Second Part by Party Of the First Part, to the Party Of the Second Part at the end of 2 (two) months of the date of execution of the present agreement, without any further interest accrued on the Principal amount. 3. The Party Of the First Part gives the Party Of the Second Part the following cheque of Rs. 12,50,000/- Rupees Twelve lakhs Fifty Thousand only) towards repayment of debt of Rs 10,00,000/-(Rupees Ten Lakhs only) as well as Rs.2,50,000/- (Rupees Two Lakhs Fifty Thousand only) towards a share in profit of Party of the First arising from property transaction which the Party Of the First Part has shown willingness to give to the Party Of the Second Part. (1) Cheque no. 744710 dated 23/11/2011 drawn on Karnataka Bank Ltd. for Rs 12,50,000/- (Rupees Twelve Lakhs Fifty Thousand only) 5. The Party of the Second Part can deposit the cheque giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... towards repayment of the debt of ₹10,00,000/- as well as an amount of ₹2,50,000/- towards a share in profit of the accused arising from the property transaction for which accused has shown willingness to give to the complainant. 40. In paragraph No.6, the accused clearly admits and acknowledges a debt of ₹12,50,000/- and further declared to honour the said cheque. Thus, when it is clearly agreed between the parties in writing and duly executed before the notary public thereby acknowledging a debt of ₹12,50,000/-, it does not lie in the mouth of the accused thereafter to claim that the amount of ₹2,50,000/- was only on some contingency which would happen subsequent to the Agreement as there is nothing mentioned in the Agreement itself. The accused clearly admitted that he is liable to pay ₹12,50,000/- as debt and acknowledges it and further issued a cheque for the said amount in favour of the complainant which further fortifies that such cheque together with the amount mentioned therein was towards the debt. 41. In the case of Sampelly Satyanarayana Rao v/s. Indian Renewable Energy Development Agency Limited (2016) 10 SCC 458, wherein th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loan installment which had fallen due though such deposit of cheques towards repayment of installments was also described as security in the loan agreement. In applying the judgment in Indus Airways (supra), one cannot lose sight of the difference between a transaction of purchase order which is cancelled and that of a loan transaction where loan has actually been advanced and its repayment is due on the date of the cheque. 12. The crucial question to determine applicability of Section 138 of the Act is whether the cheque represents discharge ofexisting enforceable debt or liability or whether it represents advance payment without there being subsisting debt or liability. While approving the views of different High Courts noted earlier, this is the underlying principle as can be discerned from discussion of the said cases in the judgment of this Court. 42. In Rangappa(supra), this Court held that once issuance of a cheque and signature thereon are admitted, a presumption of a legally enforceable debt in favour of the holder of the cheque arises. It is for the accused to rebut the said presumption, though the accused need not adduce his own evidence and can rely upon th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the steps, if any, taken for recovery was again a material consideration which indicated that there was a doubt in regard to the transaction. 46. Thus, it is clear from the facts as well as the observations as quoted above, the said decision is distinguishable from the matter in hand. There was in fact more than sufficient material brought on record to dispel the presumption and also to disbelieve the case of the complainant. Thus, the said decision is not helpful to the accused on any count. 47. In the present case, the complainant paid the amount of ₹ 10,00,000/- to the accused by cheques which are reflected in the Agreement. The accused admitted a receipt of such an amount. The complainant stated that she received the said amount as a gift from her husband. Therefore, when the bank transaction clearly shows that the complainant was having an amount of ₹10,00,000/- which she paid to the accused by way of three cheques and the accused admitted of the receipt of such amount in an Agreement, the said accused cannot be allowed to question the capacity of the complainant to pay such amount. The evidence to that effect is more convincing on the basis of the Agreeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contended on behalf of the respondent No.1-accused, relying on the judgments of this Court in Ranjitsing Brahmajeetsing Sharma vs. State of Maharashtra and Anr and Rajesh Ranjan Yada @ Pappu Yadav vs. CBI through its Director . However, the guilt may be established by recourse to presumptions in law and presumptions in facts, as observed above. 51. Thus, it is clear that the accused need not enter the witness box to rebut the presumption. However, such presumption of law cannot be considered as rebutted only by giving denials and suggestions. There has to be some cogent material brought on record during the evidence of the complainant and his witnesses, on the preponderance of probabilities so as to rebut such presumption. 52. In the present matter and from the cross-examination of the complainant, it is clear that the accused failed to rebut the presumption under Section 139 of N.I. Act. 53. In the case of Subhash Chander Sharma(supra), it was admitted by the complainant himself that the cheque in question was given to him by the accused for the sake of safe dealing and not towards any Agreement or transaction. Therefore, it was observed that the accused succeeded in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... presumption. Similarly, the accused failed to discharge a burden. Hence, such a decision is of no help. 60. Finally, learned Counsel Shri Suraj Naik placed reliance in the case of Chandrapabha Vasant Mhaske(supra), to claim that in an appeal if two plausible views are possible of evidence, the view favouring the accused adopted by the Trial court should not be interfered with by the Appellate Court. There is no dispute about such a proposition. However, first of all, it is required to consider whether the view taken by the learned Trial Court is a plausible view. 61. To my mind reasons disclosed in the impugned order clearly goes to show that the learned Magistrate first of all committed error in framing question No.'b' thereby putting a burden on the complainant to prove that the cheque was issued towards discharge of legally enforceable liability. Admittedly, the complainant by producing the cheque, Bank memos, the legal notice and more specifically the Agreement at Exh.47, established that she is entitled to draw a presumption under Section 138 of N.I. Act. The Agreement at Exh.47 as quoted earlier clinchingly shows that the accused accepted and acknowledged th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... affirmative and point no 2 is in negative. 64. Having said so, the appeal must succeed and hence I pass the following : O R D E R (i) The appeal stands allowed. (ii) The impugned judgment dated 10/09/2014 in Criminal Case No.OA/75/2012 is hereby quashed and set aside. The accused/respondent No.1 herein is found guilty of the offence punishable under Section 138 of the N.I. Act. (iii) Accused/respondent No.1 to be heard on point of sentence. BHARAT P. DESHPANDE, J Judgment continued at 2.30pm Heard learned Counsel Mr. Suraj Naik for the respondent No.1/accused on the point of sentence. Considering this matter is of 2012 and the amount involved, the following sentence is hereby awarded: (iv) The accused is therefore sentenced to suffer Simple Imprisonment for a period of 6 months and to pay compensation of double the amount of cheque to the complainant i.e. ₹ 25,00,000/- (Rupees Twenty Five Lakhs only), within a period of one month, failing which he shall suffer simple imprisonment for a period of three months. (v) The accused is directed to surrender before the learned Magistrate within a period of 15 days from today. (vi) Records ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
