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TMI Blog2023 (9) TMI 443X X X X Extracts X X X X X X X X Extracts X X X X ..... been withdrawn by the respondent No.1 and accordingly, respondent No.1 had received the same from the original complainant. That said amount had been returned back and for that sum of Rs.60,000/- had been paid in cash and for the remaining amount of Rs.1,40,000/-, cheque dated 31.12.2004 had been given by the respondent No.1. The said cheque had been deposited in the bank account, but the said cheque had been returned with banker's endorsement "account is closed". Thereafter, the original complainant had issued the requisite notice under Section 138 of the N.I. Act on 14.02.2005 and the said notice had been duly received by the respondent No.1 on 18.02.2005, to which, no reply had been given by the respondent No.1. Thereafter, original complainant had filed the above mentioned criminal case before the learned Magistrate and evidence had been recorded and thereafter, the learned Magistrate by order dated 31.07.2007, had acquitted the respondent No.1. Therefore, being aggrieved with the said judgment, this appeal is preferred at the instance of the appellant- original complainant. C. ARGUMENTS OF LEARNED ADVOCATES FOR THE PARTIES: (i) Advocate for the Appellants: 3. Mr. J. R. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rawing inference about the year printed on the disputed cheque, was itself not sufficient for the learned Magistrate to accept that the accused has discharged his initial burden. Mr. Shah, therefore, submitted till the accused discharged his initial burden of proving the case by producing the evidence on materials, onus will not be shifted upon the complainant, and therefore, the presumption of Sections 138 and 139 of the Act, shall continue to apply in the facts of the present case. 3.2 Mr. J. R. Shah, learned advocate on record for the appellants, has further submitted that the issuance of cheque by the accused and the signature on the disputed cheque is not challenged by the accused and unless the contrary is proved by the accused, the statutory presumption under Section 118(a) of the Act is required to be drawn in favour of the complainant that the instrument was drawn in favour of the holder for consideration. He has further referred to and relied upon Section 139 of the N.I. Act, and has submitted that presumption with regard to the complainant being holder of the cheque against the payment of whole or in part of legal debt or liability arises in favour of the complainant. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... advocate Mr. Shah has submitted that the burden was on accused to prove that the cheque has not been issued for a debt or liability. By relying upon the aforesaid principle, he has submitted that the accused not having entered in the witness box nor any evidence being led, the accused had failed to rebut the presumption with regard to the existence of debt/liability against the accused. By making the aforesaid submissions, he therefore, urged this Court to quash and set aside the impugned judgment and order passed by the learned Magistrate and to allow this appeal. (ii) Advocate for the Respondent- Original Accused: 4. On the other hand, Mr. Ashish M. Dagli, learned advocate on record for the respondent No.1-original accused, has strongly objected to the aforesaid submissions of learned advocate on record for the complainant. At the outset, he has invited attention of this Court to the case of the complainant. He has further invited attention of this Court to the findings and reasons recorded by the trial court while recording the order of acquittal. He has submitted that cogent reasons have been assigned by the learned Magistrate while passing the impugned order. such recordin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid cheque in the year-2004. It is in background of such circumstances, the court below has observed that complaint is frivolous and by clever drafting, has tried to present case of existence of legal debt. 4.4 On the contention raised by the learned advocate, of accused having not entered in the witness box, it is submitted by Mr. Dagli that there cannot be any straight jacket formula that since the accused has not entered in the witness box, it is to be presumed that say of complainant is undisputed. As held in various decisions by this Court and so also by the Hon'ble Apex Court that once documents on record and evidence adduced by the complainant, if the accused is successful in raising preponderance of probabilities about non-existence of any legal liability, it is not imperative for the accused to enter in the witness box. The accused has to show the probable defence, which can also be established based on the material brought on record. In the present case, including the fact about repayment of amount already made in the year-1998 and thereafter, cheque in question being used in the year-2004, the preponderance of such probability about very factum of existence of legal deb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uired on the part of the accused is in nature of "preponderance of probabilities". The 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, the accused relied. (v) In the case of Mallavarapu Kasivisweswara Rao vs. Thadikonda Ramulu Firm and Others reported in (2008) 7 SCC 655, wherein the Hon'ble Supreme Court has held that the initial burden is on the defendant to show the existence of consideration as highly improbable or doubtful or illegal, if this burden is discharged the onus shifts on the complainant. 4.8 By making the aforesaid submissions, he urged this Court to dismiss the present appeal. 5. In the rejoinder, learned advocate Mr. J.R. Shah appearing for the appellants has tried to distinguish the aforesaid authorities relied upon by learned advocate on record for the respondent-accused. 5.1. In the case of Krishna Janardhan Bhat (supra), learned advocate Mr. J.R. Shah submitted that the defence was raised in the reply given to the notice. Thus, in the aforesaid case, the complainant was aware about the defence put forward by the accused. He has furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e complainant be treated as "holder of cheque" on the date of presentation viz. 31.12.2004, to attract the offence under Section 138 of the N.I. Act ? 7. Before proceeding with the merits of the case, the findings and the reasons recorded by the learned Magistrate while recording acquittal is required to be looked into. 7.1 The learned Magistrate, upon appreciation of the material, which has come on record has recorded specific findings that the date "31.12.2004" is inscribed in handwriting subsequently, on the disputed cheque, which already bears printed year preceding with figure "19". Therefore, the inference can be drawn about blank cheque being in custody of complainant in the year-1998, which has been misused by inscribing date of issuance as "31.12.2004." 7.2 Secondly, the Court has noticed that part payment of Rs.60,000/- was received by the complainant, however, in crossexamination, the complainant has failed to disclose the date on which, such repayment or rather part payment was received. 7.3 The learned Magistrate has further recorded that the complainant in his cross-examination has admitted that amount and date in the disputed cheque were entered by the accused. O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted that such amount was received by him in cash. He has also further admitted in his cross-examination that having received such part payment, no voucher or any receipt was issued by the complainant to the accused. Surprisingly, in cross-examination, though a very specific suggestion was given by the defence counsel to the complainant about date of cheque, the complainant has admitted that "it is true that amount, date and name in the cheque was entered by the accused in his presence". 8.4 In my opinion, this goes to suggest that the cheque was drawn on 31.12.2004, it is the date inscribed on the cheque. The learned Magistrate failed in trap by observing as to what prevented the complainant to offer such fact right from the inception while giving legal notice as well as in his complaint. In fact, if one looks at the content of the complaint, it is specifially pleaded/alleged that "recovery being made by the complainant, the accused had made repayment of Rs.60,000/- in cash and remaining amount of Rs.1,40,000/- was offered by handing over cheque bearing No.70781 dated 31.12.2004" 8.5 On further examination of the legal notice, this Court finds that the complainant has remained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r his submission, once the cheque was drawn there was acknowledgment of the debt and unless contrary is proved by the accused, the presumption arose with regard to the fact that the cheque has been given or drawn for consideration as provided under Section 118(a) and the complainant is "holder" of such cheque for discharge of debt or liability. 9.2 On the other hand, learned advocate Mr. Dagli appearing for the respondent-accused, by referring to the authorities mentioned earlier as the cheque being handed over as security cheque way back in the year-1998, which being misused by the complainant though the amount outstanding being realized, and its presentation in the bank in the year-2004, makes such transaction invalid in the eye of law as the cheque ceased to be a negotiable "instrument" in view of Section138 of the N.I. Act. 9.3 Indisputably, the hand loan of an amount of Rs.2 Lakhs as emerged on record relates to the date of transaction as 15.12.1998. The date inscribed on the disputed cheque goes to indicate that the cheque was drawn on 31.12.2004. If one accepts the case of the complainant that by the issuance of cheque on 31.12.2004, there was acknowledgment of the debt by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cheque was issued in February, 1991. Thus, by the time the cheque was issued, the debt was barred by limitation since there was no valid acknowledgement of the liability within the period of limitation. According to the learned counsel for the appellant, the promise made by the accused to repay the time barred debt would come within the purview of Section 25(3) of the Indian Contract Act. No doubt, the promise to pay a time barred cheque (debt) is valid and enforceable, if it is made in writing and signed by the person to be charged therewith. But, it is clear from Section 138 of the Negotiable Instruments Act that in order to attract the penal provisions in the bouncing of a cheque in Chapter XVII, it is essential that the dishonoured cheque should have been issued in discharge, wholly or in part, or any debt or other liability of the drawer to the payee. The explanation to Section 138 defines the expression debt or other liability as a legally enforceable debt or other liability. The explanation to Section 138 reads as under :- Explanation :- For the purpose of this section, "debt or other liability" means a legally enforceable debt or other liability. 7. Thus, Section 138 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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