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IN THE COURT OF I-ADDL. JUDICIAL MAGISTRATE OF FIRST CLASS,
NIZAMABAD
PRESENT:- Smt. G.KALARCHANA,
I-Addl. Judl. Magistrate of F.C.,
Nizamabad.
Monday, this the 6th day of January, 2020
C.C. No.695 of 2017
Between:
K. Erranna S/o Laxman, Age: 58 years, Occ: Pensioner, R/o H.No.10-3-364/1, New Manik Bhavan, Shivajinagar, Nizamabad. …Complainant // AND //
Challa Narender S/o Satyanarayana, Age: Major, Occ: Business, R/o Municipal house No.10-3-255, Shivajinagar, Nizamabad. …Accused
This case is coming before me for final hearing on 28.12.2019 in the presence of Sri C. Hari Prasad, Advocate for complainant and Sri B. Krishnanand, Advocate for accused, upon perusal of record and upon hearing both the counsels and having stood over the matter to this day for consideration, this Court delivered the following:
:: J U D G M E N T ::
1.The complainant filed this complaint U/sec.190 and 200 of Cr.P.C. for the offence punishable under section 138 r/w 142 of Negotiable Instruments Act.
(hereinafter referred as “N.I. Act”).
2. The brief averments in the complaint in nutshell are as under:
The complainant submits that accused and himself were well acquainted with each other since past 10 years. Accused was running business of groceries (Kirana) opposite to the complainant’s house and complainant was working in the Lands and survey department Nizamabad between the years 2009 to 2016, out of acquaintance accused and his wife approached the complainant and requested for a hand loan of Rs.2,00,000/- (Rupees Two lakhs only) from him for his business necessities. Complainant agreed for the same and lent an amount of Rs.2,00,000/- to accused on 04.11.2015 and on the same day accused executed a promissory note along with receipt in favour of complainant and 2
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promised to repay the said amount within one year. Later on several demands, accused issued a cheque bearing No.110329 dated 3.03.2017 drawn on State
Bank of India, Shivajinagar Branch, Nizamabad and requested to present the same in the first week of March, 2017. Accordingly complainant presented the same for encashment through his bank i.e., State Bank of India, Shivajinagar,
Branch, Nizamabad on 2.03.2017 but the said cheque was dishonoured on the ground of “Insufficient Funds” in the account of the accused. At last the complainant issued statutory legal notice dt 11.03.2017 through courier service on 16.03.2017 to known address, informing that cheque was dishonoured with endorsement “Insufficient Funds” demanding him to pay above cheque amount within (15) days from the date of receipt of notice, the accused received the notice on 17.03.2017 but neither give reply nor paid the said cheque amount.
3.The complainant further submits that accused issued said cheque to discharge legally enforceable debt having knowledge about the funds, in spite of his own assurance, intimation of presentation with an intention to dupe and deprive the complainant, accused failed to arrange funds in his account to
honour the cheque, as accused intentionally issued cheque, without arranging
sufficient funds to defraud the complainant. Thus the accused has committed an offence under section 138 and 142 of N.I. Act, for which he was liable to be prosecuted under section 138 r/w 142 of N.I. Act. Hence, the complaint.
4.The case is taken on file against accused for the offence U/sec.138 of N.I
Act on his sworn statement. On receipt of summons, accused appeared before the Court. Copies of documents were furnished to the accused.
5.Accused was examined U/sec.251 Cr.P.C; accusation leveled against him in the complaint was read over and explained to him in Telugu, for which he denied the accusation and pleaded not guilty, claimed to be tried.
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6.To prove his case, the complainant examined himself as PW.1, through him Ex.P1 to Ex.P8 marked.
7.After closure of evidence on behalf of the complainant, the accused was examined under Section 313 Cr.P.C, incriminating material found against him in the evidence of PW1, was read over and explained to him in Telugu, for which he denied and reported for defence evidence but fails to adduce the defence evidence even after ample opportunities.
8.Heard both learned counsels, perused material on record.
9.Now the point for determination is:
“Whether the complainant has established the guilt of the accused
for the offence U/Sec.138 N.I Act beyond all reasonable doubt ?”
POINT:
10.To hold the accused liable for the punishment under Section 138 of N.I.
Act, the complainant has to prove that there was legally enforceable debt between complainant and accused and accused issued a cheque for discharge of whole or part of legally enforceable debt with a promise that he will provide sufficient funds to honour the cheque maintained by his account and the cheque was returned for any reasons for which offence under section 138 of N.I
Act attracts. Complainant has to prove that he presented the cheque within a period of six months or its validity and if the cheque is returned not honoured, complainant has issued notice demanding payment of the said amount in writing to the drawer of cheque within 30 days of the receipt of information by him, from the bank regarding the return of cheque. On receipt of notice, the drawer of said cheque failed to pay the said amount within 15 days from the date of its receipt and complainant filed the complaint within limitation i.e within 30 days from the lapse of 15 days of demand. If all the ingredients are proved by the complainant or on the other hand if all the point are answered 4
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positively in favour of the complainant the presumption Under Section 139 of
Negotiable Instruments Act 1881 comes into play and the burden shifts on the accused to rebut the said presumption by preponderance of probabilities. It has to be verify whether the complainant is able to establish the case against the accused beyond all reasonable doubts.
11.To prove the offence U/sec.138 of N.I. Act requirements of Section 138 are:
(i) There is a legally enforceable debt.
(ii) The drawer of the cheque issued the cheque to satisfy part or whole of the legally enforceable debt.
(iii) The cheque so issued has been returned due to insufficiency of funds
(iv) The drawer of the cheque failed to repay the cheque amount with in statutory period even after receipt of statutory notice issued to him with in stipulated period.
12.Learned counsel for the complainant by filing written arguments submitted that complainant and accused person known to each other accused is neighbour running Kirana shop opposite to his house well acquainted for past 10 years, accused and his wife approached to the complainant on 04.11.2015 and requested to lend Rs.2,00,000/- (Rupees Two Lakhs) for accused business purpose, accused promised to repay said amount within one year orally and on the same day accused executed a promissory note/Ex.P3 and acknowledgment/ receipt Ex.P4 in favaour of PW1. Accused failed to repay borrowed amount after one year later on several demands finally accused issued a post dated cheque/
Ex.P1 bearing No.11039, dated 03.03.2017 in the Month of February 2017 and asked to present the cheque/Ex.P1 dated 03.03.2017 to discharge the legally enforceable debt received by him and it was presented within its validity of six months from its issuing in the month of February 2017 but the cheque was returned with endorsement ”Funds Insufficient”on 03.03.2017 under 5
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Ex.P2/cheque return memo, then he issued legal notice/Ex.P5 dated 11.03.2017 within one month of its return i.e on 03.03.2017 through professional courier on 16.03.2017 vide Ex.P6/booking receipt, notice to known address of accused and Ex.P7 is acknowledge of receipt of notice on 17.03.2017. Accused received notice but he neither issued reply notice nor paid amount hence presented the complaint on 18.04.2017 within one month from cause of action aroused after lapse of 15 days of receipt of notice. Hence complainant complied all the provisions of N.I Act even after knowledge accused not paid the cheque amount nor gave any reply so deemed that accused admitted transaction and issuing of cheque for discharge of said amount. Hence, a presumption can be drawn against the accused U/sec.118(a) and 139 of N.I Act that the cheque is drawn for consideration and issued to discharge the legally enforceable debt.
13.Learned counsel for complainant further submitted that the accused intentionally fails to arrange Ex.P1 amount in his account with an intention to defraud complainant even after receipt of notice fails to made payment within stipulated time of 15 days from receipt of notice so accused liable to prosecute under section 138 of N.I Act. He further submitted that the complainant complied all the statutory provisions of N.I Act so proved the guilt of the accused beyond reasonable doubt. Therefore prays to convict the accused.
14.On the other hand learned defence counsel vehemently contended that the accused is innocent and complainant/PW.1 filed a false case against the accused. Accused never borrowed alleged cheque amount from complainant there is no legally enforceable debt. No documentary proof filed to show that amount withdrawn from bank on the alleged day of transaction and complainant have no capacity to lend such amount. Further contended that the signatures on Ex.P3/Promissory note and P4/receipt not belongs to accused.
Further complainant have no capacity to lend amount. There is no single witness for transaction. It is the allegation of accused that he being neighbour 6
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Complainant stolen the cheque from his shop and filed false case for wrongful gain. Accused denied the receipt of statutory notice. Accused contends that complainant failed to prove that there is legally enforceable debt and failed to discharge burden of proof beyond reasonable doubt. There is no transaction between them and not issued alleged cheque in favour of complainant for discharge of any debt. So the onus of proof shifts to complainant but he failed to discharge the same and fails to prove the guilt of the accused beyond reasonable doubt. Therefore prays to acquit the accused.
15.In so far as the issuance of statutory demand notice to accused is concerned, the evidence of PW.1, coupled with Ex.P5 to Ex.P7 goes to show that the complainant got issued Ex.P5/Legal notice dated 11.03.2017 to the accused to known address demanding to repay the cheque amount through courier service Ex.P6 is original booking receipt dated 16.03.2017 and Ex.P7 is acknowledgment dated 17.03.2017. During cross examination suggested that no notice issued to accused but not denied the Ex.P5 to Ex.P7, so deemed that legal notice was received by accused to the address mentioned on postal cover which is sent by courier service through Ex.P6/booking receipt. proves notice served to accused to his address. It is not the case of the accused that he is not residing in the address mentioned in the postal cover. During cross examination though suggested that accused not received any notice but not disputed that the address mentioned on post which was served to him by courier vide Ex.P7/delivery sheet, which was showing signature, said signature was not denied by accused and not suggested to PW1 during cross examination that the signature on it not belongs him or his family members. Accused not proved specifically that he was not served with statuary notice contemplated under section 138(b) of N.I Act.
16.It is held in Central Bank of India Vs. Saxons Farms (1999) 8 SCC 221 that “actually the object of notice under clause (B) of 138 of NI Act is to 7
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give a chance to the drawer of cheque to rectify his omission and also to protect honest drawer” .
17.As can be seen from Ex.P5 and Ex.P7 goes to show that complainant issued statuary notice in time to known address and same was received by accused but filed to issue reply or paid cheque amount. So he failed to show that he was innocent drawer of the cheque Ex.P1. Furthermore no suggestion given that the address mentioned in Ex.P5 legal notice not belongs to accused and he was not residing in said address no cogent oral or documentary proof filed to show that accused not residing in address mentioned in Ex.P5/legal notice.
18.It is settled law that once the notice was issued to the correct address, the presumptions provided U/sec.27 of General Clauses Act and Sec.114 (f) of
Indian Evidence Act presumption can be drawn against the accused that the notice was duly served upon her. Further in view of the ratio in Muthyala
Bhushanam Vs. Patnidi Srirama Murthy and another (2015 (2) ALD
(Crl) 318) the notice is sent to correct address and if the same is un served, it is to be deemed as proper service of notice. Then it is burden of the accused that the address mentioned in the cover is not his correct address. But, in this case admittedly accused not denied that he was not residing in said address or filed any cogent proof of his residence. So it is established that accused residing in address mentioned in Ex.P5/legal notice and received legal notice vide Ex.P7/ delivery sheet.
19.Be that as it may, for a while if we will lean towards accused for the sake of argument and will accept that no notice was served upon the accused, then firstly it is a point need to be decided that whether an accused in a cheque bounce case can take a plea that notice as required U/sec.138(b) of the Act was not served upon him. In my view such type of defence is no more permitted in 8
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cheque bounce cases, in view of decision of three judge bench of Hon'ble
SUPREME Court in 'C. Alavi Haji Vs. Palapetti Muhammed and another' reported in '2007 Crl.L.J 3214 S.C'. While dealing with the question of notice in terms of clause (b) of proviso of section 138 of the Act, the Hon'ble Apex court held in para 17 that:
“It is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of criminal law, where there is no stipulation of giving of a notice before filing of a complaint. Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under section 138 of the Act, make payment of the cheque amount and submit to the court that he had made payment within 15 days of receipt of summons, and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the court, can not obviously contend that there was no proper service of notice. In our view, any other interpretation of the proviso would defeat the very object of the legislation.”.
20.The principle laid down in the above decision clearly explains the provision under section 138(b) of NI Act, that though accused can take defence that he was not served with notice and Ex.P1 was not Honoured due to not arranging sufficient amount being honest drawer he has no knowledge about the presentation of cheque so no offence committed by him. But it is not permitted to take the defence after service of summons that he has no knowledge about the dishounour of cheque since he did not move any petition for making of payment of cheque amount within 15 days after receipt of summons. It is not the case of accused that summons were not served to him so accused not disputing the address to which summons served which is one and the same address mentioned in Ex.P5/legal notice, furthermore court record showing that summons received through Registered Post by accused at 9
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same address and accused not disputed the receipt of summons by acknowledge due, by receiving summons from court appeared before court but he not ventured to file petition to show that he discharged his liability as innocent drawer of cheque after came to know about the dishonour of cheque.
But he taken defence that there is no transaction and taken inconsistent pleas that at one hand contended that complainant taken cheque from him filled it filed the case on the other hand contends that complainant stolen his cheque and filed false case to gain wrongfully. So he admitted that cheque belongs to his account but not denied the signature on Ex.P1/cheque. So prima facie presumption under section 118 and 139 of N.I Act can be drawn that Ex.P1 drawn for consideration and now the burden is shifted to accused to prove whether signed or unsigned cheque was issued to complainant. So as accused failed to pay cheque amount after receiving summons hence he failed to show that he was honest drawer and proceedings are prejudicing him and complaint is not maintainable for non service of notice. As per discussion supra notice served to accused so provision 138(B) was complied by complainant hence contention of accused that complaint not maintainable for non serving of notice not tenable.
21.In so far as the issuance of Ex.P1/cheque to discharge legally enforceable debt is concerned, in the evidence of PW1, he testified that out of acquaintance accused and his wife approached him requesting to arrange amount and he advanced amount of Rs.2,00,000/- (Rupees Two Lakhs), on 04.11.2015 accused promised that he will repay within one year from date of borrowing, accused borrowed amount for his business purpose. Pw1 lent Rs.2,00,000/- on 4.11.2015 and accused executed promissory note Ex.P3 and receipt Ex.P4 on the same day in token of receipt of loan amount. After one year complainant demanded amount orally but accused fails to repay and at last issued cheque Ex.P1 bearing No.11039 in the month February 2017 with post date and asked Pw1 to present the cheque in the first week of March 2017 so he presented the same 10
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on 2.03.2017 but the was dishonored on ground of insufficient funds on 3.3.2017 vide Ex.P2/cheque return memo.
22.The accused neither issued reply notice after receipt of statuary notice denying transaction and execution of promissory note/Ex.P3, receipt/P4. But denied the signature on Ex.P3 and P4 only. But accused not denied his signature on Ex.P1 or account from where it was drawn not belongs to him. His defence was total denial of transaction and allegation that complainant stolen the cheque from his shop being neighbour.
23.It is settled law that once the signature of accused on Ex.P1 is admitted by him, it is proved by complainant without any further proof and the presumptions U/sec.118 and 139 N.I Act can be drawn in favour of him that
Ex.P1 was drawn for consideration and issued to discharge the legally enforceable debt.
24.In so far as the issuance of Ex.P1/cheque to discharge legally enforceable debt is concerned, to substantiate his case complainant himself examined as
Pw1 and filed evidence affidavit in lieu of his chief examination which is replica of complaint reiterating complaint averments and marked Ex.P1 to Ex.P8. Ex.P3 and P4 are promissory note and receipt executed by accused on the day of transaction in token of receipt of amount promising to repay within one year.
Even after demand accused failed to repay amount finally he issued a post dated cheque/Ex.P1 in the month of February 2017 requesting to present in the first week of March. Ex.P1 is original cheque alleged to be issued by accused to discharge legally enforceable debt and Ex.P2 is cheque return Memo goes to show that it was returned as “Funds Insufficient”. And Ex.P3 is promissory note, Ex.P4 is receipt for borrowed amount, Ex.P5 is office copy of legal notice,
Ex.P6 original booking receipt for professional courier, Ex.P7 is acknowledgment of service of courier to accused, Ex.P8 is original letter issued to Pw1 by 11
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Accounts General of Andra Pradesh and Telangana for entitlement of Gratuity.
There is no dispute as to Ex.P1/cheque belongs to the accused and that the same is from and out of the account maintained by him.
25.The real controversy between the parties is that according to the complainant, at the request of accused, the former lent amount to the latter and as a token of receipt of amount from complainant and with promise to discharge debt issued the disputed cheque, which was not honoured.
26.On the other hand, it is contended by the accused that he never borrowed any amount from the complainant and there is no legally enforceable debt subsisting between himself and the complainant. Furthermore, he contends that complainant has not filed any document to show that he withdrawn amount from bank and Ex.P3 and P4 promissory note and receipt not executed by him the signature on both documents not belongs to him. Further, it was also upraised by the accused that there is no financial capacity to the complainant to lend such a huge amount, further no source of said amount was stated by the complainant. Accused also asserts at one hand that complainant received blank cheque and filled it and on the other hand asserts that complainant stolen the cheque from his shop. To put forth the defense set by the accused, in support of the his contentions, he fails to enter into witness box and adduce evidence in support of his case and filed any documentary proof.
27.The accused during cross examination of complainant/PW1 neither denied his signature on Ex.P1 or account from where it was drawn. He denied the signatures on Ex.P3/promissory note and Ex.P4/acknowledgment. But not taken any steps to send the same for expert opinion. As accused not denied the signature on Ex.P1 which is issued to discharge the debt under Ex.P3 and P4 so it supports the transaction on 4.11.2015 under Ex.P3 promissory note. Further as rightly contended by learned counsel for complainant in his written 12
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arguments relying on ruling of Honourable Karnataka High Court between
V.R.Shastri Vs Bhaskar.P in Criminal Appeal No.2109 of 2017, dated
14.10.2019 in which it is held at para 13 that “if really accused did not made any transaction with the complainant, he would give reply to the notice, Ex.P3 immediately when he received the same. Inspite of service of notice, he did not give any reply to the notice, if no such transaction has taken place between complainant, he would have raised the defence that the cheque not belongs to him and the same has been not done.” in this case on hand also accused not issued reply notice denying transaction and execution of Ex.P3 and Ex.P4 promissory note and receipt and even after receiving summons and copies from
Court accused failed to take any steps to disprove the signature on Ex.P3 and
Ex.P4, furthermore Ex.P1/cheque from the account of accused is in the custody of complainant and signature on it not denied so presumption under section 118 N.I Act can be drawn in favour of complainant that Ex.P3 and Ex.P4 are executed by accused in token of receipt of amount. And Ex.P1 and Ex.P3 are supported by consideration.
28.Once the signature of accused on Ex.P1 is admitted by him it is proved by complainant without any further proof and the presumptions U/secs.118 and 139 N.I Act can be drawn in favour of him that Ex.P1 was drawn for consideration and issued to discharge the legally enforceable debt.
29.In a criminal trial, one has to start with the presumption of innocence in favour of the accused which is also regarded as human right. Because no one can be convicted and punished merely on the ground of suspicion, however, strong it may be. The prosecution is required to prove the offence beyond reasonable doubt. In special prosecutions based upon dishonoured cheque also the complainant is required to aver and prove the offence punishable under section 138 of the N.I Act. But the complainant is aided by the statutory presumptions which are self contained under sections 118 and 139 of the Act.
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30.Section 118 of the N.I Act provides certain presumptions to be raised.
This Section lays down some special rules of evidence relating to presumptions.
The reason for these presumptions is that, negotiable instrument passes from hand to hand on endorsement and it would make trading very difficult and negotiability of the instrument impossible, unless certain presumptions are made. The presumption, therefore, is a matter of principle 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 endorsement, (vi) as to appropriate stamp and (vii) as to holder being a holder in due course.
31.The Honourable Apex Court in Kundan Lal Rallaaram Vs. Custodian
Evacuee Property, Bombay (AIR 1961 SC 1316) declared by relying upon the law laid down in Rameshwar Singh Vs. Bajit Lal (AIR 1929 PC 95) approved by Honourable Apex Court in Hiralal Vs. Badkulal (AIR 1953 SC
225) the Section 118 of the Act lays down a prescribed special rule of evidence applicable to negotiable instruments. The presumption contemplated there under is one of law which obliges the Court to presume, interalia, that the negotiable instruments or the endorsement was made or endorsed for consideration and the burden of proof of failure of consideration is thrown on the maker of the note or the endorser as the case may be. it was held:- "This section lays down a special rule of evidence applicable to negotiable instruments. The presumption is one of law and there under a court shall presume, interalia that the negotiable instrument or the endorsement was made or endorsed for consideration. In effect it throws the burden of proof of failure of consideration on the maker of the note or the endorser, as the case may be”.
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32.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. 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. Presumption literally means "taking as true without examination or proof". Section 118 of the Act interalia directs that it shall be presumed, until the contrary is proved, that every negotiable instrument was made or drawn for consideration.
33.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 as the complainant discharges the burden to prove that the instrument, say a note, was executed by the accused, the rules of presumptions under Sections 118 and 139 of the
Act help him to 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.
34.A conjoint reading of the three Sections will show that whenever the drawer of the cheque is either admitted or proved his signature on the cheque, the presumption under Section 118A of the Negotiable Instruments Act will come into picture to say that the cheque is supported by consideration. The presumption under Section 139 of the Negotiable Instruments Act is 15
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explanatory and supplementary to the presumption under Section 118A of the
Act to show that the cheque was received by the holder for the discharge of debt or other liability. Therefore, this Court has to accept the contention of the learned counsel for the complainant that in a case where in the signature of the drawer of the cheque is admitted or proved, then there shall be a presumption in regard to the purpose for which the cheque was issued and the onus will shift upon the accused to rebut such presumption. In case of such rebuttal, the burden shall be again shifted on the complainant to prove the existence of debt or other liability for discharge of which the cheque was issued. Of course, there are a Catina of decisions of our Honourable Apex court to the effect that the evidence need to be adduced by the accused for rebutting such presumption shall not be comparable with the evidence required to be adduced on the side of the prosecution. The prosecution is expected to prove their case beyond reasonable doubt whereas the defence case can be proved by preponderance of probabilities.
35.Furtherrelating to statutory presumption is concerned this court relying on the following judgments. In a decision reported in 2001 (2) ALD (Crl) 234 (SC) between Hiten P.Dala Vs Bratindranath Banerjee and another their
Lordships reiterating the law written in AIR 1964 S.C 575 between
Banwantarai Desai Vs State of Maharashtra while dealing with the phrases ‘unless contrary is proved’ appeared in 139 of N.I. Act held that presumption has to be rebutted by proof and not by bare explanation which is merely plausible. Their Lordships also held “that fact is said to be proved when
existence is directly established or when upon the material before it
the Court found it is exists to be so probable that a reasonable man
would act on the supposition that it exists. Unless, therefore the
explanation is supported by proof the presumption created by the
provision can not be said to be rebutted.” 16
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36.In view of the above decisions, in a prosecution for the offence under
Section 138 of N.I. Act unless contrary is proved, the Court must statutorily presume;
a) that the cheque was drawn on an account maintained by the drawer with the banker,
b) that it was for the purpose of paying money to any other person out of that account;
c) that it was for discharge, in whole or in part, of any debt or any other liability; and
d) that it was received by the holder in discharge of any debt or any liability.
37.It is contended by the learned counsel for the complainant that the complainant successfully established his case by examining PW.1 by exhibiting
Ex.P1 to Ex.P8. Here in this case as rightly contended by the learned counsel
for the complainant that by producing Ex.P1 to Ex.P8, complied all the
provisions of 138 N.I Act and further more by proving the signature of the accused on Ex.P1, P3 and P4 the complainant has discharged his initial burden.
Here it is pertinent to mention that accused nowhere denied that the signature on Ex.P1/Cheque, is not that of his, though the accused cross examined the
Pw1 with regard to filling of the cheque/Ex.P1. And PW1 deposed that the cheque/Ex.P1 and Ex.P4/receipt were filled by himself and Ex.P3/promissory note filled by one of his friend Lingam. During cross examination suggested that Pw1 received blank cheque and filled it the suggestion was denied but Pw1 also deposed that accused issued cheque to him on the day of transaction he filled it and filed the case. Learned counsel for accused vehemently argued that
Pw1 at one hand contending that after one year of alleged transaction on demand issued cheque in the month of February, 2017 where as in his cross examination deposed that the alleged cheque/Ex.P1 issued on the day of transaction so the cheque is not tallying with complaint averments hence there is no transaction and Pw1 stolen cheque filled it and filed false case for 17
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wrongful gain. The contention is not tenable and mere admission of PW1 that cheque issued on the date of transaction there is some descripency in contention of Pw1 with regard to time of issuing of cheque it itself will not fatal to complainant case. In this case complainant filed Ex.P3 and Ex.P4 which are executed on the day of transaction in support of transaction and it is contention of complainant that Ex.P1 is post dated cheque issued for discharge of debt, furthermore it is the allegation of accused that complainant stolen his cheque so burden is on accused to prove theft.
38.As can be seen from cross examination of Pw1 he deposed that the cheque was issued on the day of transaction and it was filled by him it is pertinent from to say with cost of repetition but it is necessary to mention here that accused not denied the signature on Ex.P1. So Pw1 deposing that signature on Ex.P1 belongs to accused and accused also not denied the signature on
Ex.P1. At this point this court relied on Honourable Apex Court Judgment between Bir Singh Vs Mukesh Kumar AIR 2019 SC 2446 at Para 38 that “If a blank signed cheque is voluntarily presented to a payee, towards some payment, the Payee may fill up the amount and other particulars this in itself would not invalidate the cheque. The onus is still on accused to prove that the cheque was not in discharge of debt or liability by adducing evidence.” Hence it can be safely concluded that cheque belongs to accused account and it bears his signature. So presumption under section 139 N.I Act can be drawn in favour of complainant that cheque issued for discharge of borrowed amount the burden to rebut the same is on accused.
39.Learned counsel for accused cross examined Pw1 with regard to Ex.P1 and his defence. During cross examination of PW1 suggested on one occasion that complainant received blank cheque filled it, but failed to mention why Pw1 received blank cheque from accused it itself shows accused issued with knowledge the cheque which supports there is some transaction between 18
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accused and complainant and also supports there is legally enforceable debt.
On other occasion suggests that complainant stolen cheque from accused shop being neighbour accused admitting acquaintance between both.
40.Thus, it is the burden of the accused to prove his allegations and also to rebut the presumption in favour of complainant under section 139 N.I Act as he not denied the signature on Ex.P1. The presumption drawn against the accused is, however, rebuttal in nature. To rebut the presumption and prove allegations accused not entered into witness box and adduced his evidence.
41.Actually in proceedings under section 138 of N.I Act accused need not enter into witness box to rebut the presumption, it is observed by Honourable
Apex court and our Honourable High Court in catena of decisions, the burden of accused is not like the burden on the complainant. The accused by eliciting points from the cross examination of the complainant can dispel the presumptions, what is required to be shown is preponderance of probability and there is no necessity for him to lead cogent evidence.
42.Now it is the burden of the accused to rebut the presumption drawn against him. The presumption drawn against the accused is, however, rebuttal in nature. Now the question for consideration is what is the degree of proof to be produced by the accused to rebut the presumption? Whether he has to prove his defence beyond reasonable doubt? The standard of proof required for rebutting any such presumption is not as high as that required of the prosecution. So long as the accused can make his version reasonably probable, the burden of rebutting the presumption would stand discharged. Whether or not it is so in a given case depends upon the facts and circumstances of that case. It is trite that the courts can take into consideration the circumstances appearing in the evidence to determine whether the presumption should be held to be sufficiently rebutted. The legal position regarding the standard of 19
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proof required for rebutting a presumption is fairly well settled by a long line of decisions of Hon'ble Apex Court of India.
43.In K. Prakashan Vs. P.K. Surenderan (2008) 1 SCC 258 (paras 13 and 14). Honourable Apex Court reiterated the legal position as under:
“The Act raises two presumptions; firstly, in regard to the passing of consideration as contained in Section 118 (a) therein and, secondly, a presumption that the holder of cheque receiving the same of the nature referred to in Section 139 discharged in whole or in part any debt or other liability. Presumptions both under Sections 118 (a) and 139 are rebuttable in nature.
14. It is furthermore not in doubt or dispute that whereas the standard of proof so far as the prosecution is concerned is proof of guilt beyond all reasonable doubt; the one on the accused is only mere preponderance of probability.”
44.Further in Rangappa Vs Sri Mohan [A.I.R 2010 S.C 1898], Hon’ble
Apex Court held that to rebut the presumption drawn against the accused he can rely on the materials produced by the complainant and he may need not adduce evidence. In para No.14 their lord ships held that:
“....... As noted in the citations, this is of course in the nature of a rebuttal presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant. 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 rebuttal presumption under Section 139 is a device to prevent undue delay in the 20
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course of litigation. However, it must be remembered that the offence made punishable by Section 138 can 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 of proof. 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 to rebut the presumption under Section 139, the standard of proof for doing so is that of `preponderance of probabilities'. 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 a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own.”
45.In view of the above legal position, 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 accused is not expected to prove hisdefence beyond reasonable doubt as is expected for the complainant in a criminal trial. What is required to be established by the accused in order to rebut the presumption is different from each case under given circumstances. But the fact remains that a mere plausible explanation is not expected from the accused and it must be more than a plausible explanation by way of rebuttal evidence. In other words, 21
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the defence raised by way of rebuttal evidence must be probable and capable of being accepted by the Court.
46.To rebut the burden of proof in this case on hand accused not entered into witness box and failed to file any documents in his favour he only relied on cross examination. It is one of the contention that complainant is an income
Tax assessee but not shown the transaction in returns so deemed that there is no debt existing, learned counsel for complainant relied on Honourable Panjab and Haryana High Court between Manchanda Agencies Vs Sanmeet Singh 2019 Lawsuit (P&H) 1250 in which at para nine it is observed that “there is no requirement of law to produce sales Tax or Income Tax returns. Simple legal requirement for complainant is to satisfy the court that the cheque in question was issued by the accused to discharge the legal liability, in the instant case accused not denied his signature on cheque in question and the same pertains to his bank account. Therefore trial court bound to draw presumption in favour of applicant under section 139 of NI Act”. In this case on hand complainant proved as per discussion supra that Ex.P1 issued for discharge of debt under
Ex.P3 which is legally enforceable debt. Further this court also relies on ruling of Hon’ble Madya Pradesh High Court in Smt. Ragini Gupta Vs Piyush Datta
Sharma CRR No.5263/2018 in which it is held that “ Non filing of I-T returns does not mean that the complainant has no source of income. Non payment of
Income Tax is a matter between the revenue department and assesse. If the assesse is not disclosed the income in the Income Tax returns, then the Income
Tax Department is well within its right to reopen the assessment of Income tax
Returns. By itself would not mean that the complainant had no source of income and no adverse inference can be drawn in this regard only because of absence of I-T Returns”. So the contention of accused that complainant failed to show debt in income tax returns, for that adverse inference can be drawn that either complainant has no capacity or there is no existing debt is not tenable.
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47. It is another contention of accused that complainant have no capacity to lend amount. In this case on hand during cross examination tried to elicited from PW1 about the capacity of complainant, it is the case of PW1 that he was government employee worked in Lands and Survey department and retired from services to that extent no suggestion given by accused counsel during cross examination so as rightly contended by learned counsel for complainant that complainant specifically mentioned in complaint that he was government employee and same is not denied by accused so admitted the facts. Admitted fats need not be proved even than complainant filed Ex.P8 original letter issued to complainant by The office of Accountant General of Andra Pradesh and
Telangana showing his entitlement of gratuity. Ex.P8 Dt.23.9.2015 which shows that complainant was retired from services in the month of September 2015 and transaction was in the month of November, 2015 which shows that complainant have capacity to lend amount and he received retirement benefits.
48.Learned counsel for accused vehemently argued that complainant not filed bank statement and any documentary proof that he withdrawn amount from bank so it cannot be believable that complainant have capacity to lend amount and relied on Hon’ble Apex Court judgment between Basalingappa Vs
Mudibasappa 2019 SAR (Criminal) 604 on perusal of ruling with due respect to their Lordships the facts and circumstances are not one and the same in this case. In the cited ruling complainant lent to different persons amount and his retirement date also so previous than the transaction in this case on hand complainant lent amount to accused only and accused failed to bring on record whether complainant lent amount to different persons to show that he has no capacity. For a retired employee after receiving retirement benefits lending Rs.2,00,000/- is not out of his capacity and Ex.P8 supporting complainant has capacity to lend amount.
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49.Further learned counsel for complainant at this stage relied on Hon’ble
Apex Court ruling in Rohit Bhai Jivan lal Vs State of Gujarat Criminal
Appellate Jurisdiction Criminal Appeal No. 508 OF 2019 (Arising out of Special
Leave Petition (Crl.) 1883 of 2018) in which it is held that “complainant need
not prove source of funds once section 139 NI Act presumption is
drawn. Observed at para 17 , 18 and 19 of that judgment.
“17. In the case at hand, even after purportedly drawing the presumption under Section 139 of the NI Act, the Trial Court proceeded to question the want of evidence on the part of the complainant as regards the source of funds for advancing loan to the accused and want of examination of relevant witnesses who allegedly extended him money for advancing it to the accused. This approach of the Trial Court had been at variance with the principles of presumption in law. After such presumption, the onus shifted to the accused and unless the accused had discharged the onus by bringing on record such facts and circumstances as to show the preponderance of probabilities tilting in his favour, any doubt on the complainant's case could not have been raised for want of evidence regarding the source of funds for advancing loan to the accused-appellant. The aspect relevant for consideration had been as to whether the accused-appellant has brought on record such facts/material/ circumstances which could be of a reasonably probable defence.
18. In order to discharge his burden, the accused put forward the defence that in fact, he had had the monetary transaction with the said Shri Jagdishbhai and not with the complainant. In view of such a plea of the accused-appellant, the question for consideration is as to whether the accused-appellant has shown a reasonable probability of existence of any transaction with Shri
Jagdishbhai? In this regard, significant it is to notice that apart from making certain suggestions in the cross-examination, the accused- appellant has not adduced any documentary evidence to satisfy even primarily that there had been some monetary transaction of himself with Shri Jagdishbhai.
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19. Herein above, we have examined in detail the findings of the Trial
Court and those of the High Court and have no hesitation in concluding that the present one was clearly a case where the decision of the Trial Court suffered from perversity and fundamental error of approach; and the High Court was justified in reversing the judgment of the Trial Court. The observations of the
Trial Court that there was no documentary evidence to show the source of funds with the respondent to advance the loan, or that the respondent did not record the transaction in the form of receipt of even kachcha notes, or that there were inconsistencies in the statement of the complainant and his witness, or that the witness of the complaint was more in know of facts etc. would have been relevant if the matter was to be examined with reference to the onus on the complaint to prove his case beyond reasonable doubt. These considerations and observations do not stand in conformity with the presumption existing in favour of the complainant by virtue of Sections 118 and 139 of the NI Act.
Needless to reiterate that the result of such presumption is that existence of a legally enforceable debt is to be presumed in favour of the complainant. When such a presumption is drawn, the factors relating to the want of documentary evidence in the form of receipts or accounts or want of evidence as regards source of funds were not of relevant consideration while examining if the accused has been able to rebut the presumption or not”.
50.The observations in above ruling is aptly applicable to the facts of case in hand. As discussed supra, the accused defence is total denial of transaction.
And disputed that accused not borrowed amount and not issued any cheque to the complainant. Accused failed to enter into witness box and adduced any oral or documentary evidence in his defence. Accused taken a specific defence that the cheque Ex.P1 is stolen from the shop of accused. To prove the allegation accused neither entered into witness box nor filed any documentary proof to show that his cheque was stolen from his shop. Accused not issued 25
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any reply notice to complainant stating that complainant stolen the cheque or lodged any report before police with regard to theft of cheque from his house or shop prior to the presentation of complaint or after receipt of notice. Mere taking plausible defence accused utterly failed to substantiate his defence.
Hence accused failed to rebut the presumption with cogent and probable evidence except plausible defence.
51. So there is no probable explanation from accused to rebut the presumption. Though cross examined at length Nothing useful to shatter credibility of complainant testimony elicited from him during cross examination hence complainant proved his case by filing original cheque beyond reasonable doubt.
52.Having regard to the discussion made in the foregoing paragraphs coupled with the evidence on record this court holds that complainant proved the offence against the accused beyond reasonable doubt.
53.In the result, accused is found guilty of the offence punishable
U/sec.138 of Negotiable Instruments Act. Accordingly he is convicted for the same U/sec.255(2) Cr.P.C.
Typed to my dictation, corrected and pronounced by me in open court, this the 6th day of January, 2020.
I-Addl. Judicial Magistrate of First Class,
Nizamabad
54.The accused when questioned as to the quantum of sentence to be imposed against him, he stated that he was sole bread winner of his family members who depending on him, hence prayed to take lenient view.
55.Considering nature of offence proved against the accused and as the accused deliberately issued the Ex.P1/cheque without having sufficient amount 26
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in his account, if the accused is released under Probation of Offenders Act, it is nothing but traverse of justice and the very object of the legislative mandate of making bouncing of cheque will be ruined. Therefore, this court is of the view that it is a not fit case to invoke beneficial provisions of Probation of Offenders
Act in favour of the accused.
56.Further our Hon’ble Apex Court in a decision reported in S.Suresh Kumar
Vs. Jagadeeshan (2002(1) ALD (Crl) 417) held that- “it should be the look
out of the trial court Magistrate that the sentence for the offence
under section 138 of Negotiable Instruments Act, 1881 should be of
such a nature as to give proper effect to the object of the legislation.
No drawer of the cheque can be allowed to take dishonor of the
cheque issued by him light heartedly. The very object of the
enactment of the provisions like 138 of Negotiable Instruments Act,
1881 would stand defeated if the sentence is flee bite in nature. It is a
different matter, if the accused is paid the amount at least during the
pendency of the case.” Further Hon’ble Apex Court in a decision reported in
R. Vijayan Vs. Baby and another (2012 (1) SCC 260: (AIR 2012 SC 528)
held that:- “this Court observed that the object of Chapter XVII of the
Negotiable Instruments Act is both punitive as also compensatory and restitutive. It provides a single forum and single proceeding for enforcement of criminal liability by reason of dishonour of cheque and for enforcement of the civil liability for realization of the cheque amount, thereby obviating the need for the creditor to move two different for a relief”. In view of the above decision and in the circumstances of this case, this court is of the opinion that this is not a fit case to take a lenient view.
57.Hence, the accused is sentenced to undergo Simple Imprisonment for
a period of Six(6) MONTHS and compensation of cheque amount of
Rs.2,00,000/- (Rupees Two Lakhs only) to be deposited within one month 27
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from the date of Judgment and compensation amount shall be given to complainant, in default of payment of compensation he shall undergo Simple
Imprisonment for a period of Six(6) MONTHS for the offence
punishable under Section 138 and 142 of Negotiable Instrument Act.
58.Further, accused is informed about his right of appeal before Hon’ble
Sessions Court and also informed about his right to get free Legal Aid through
Hon’ble Chairman, District Legal Services Authority, Nizamabad, if he has no
means.
Typed to my dictation by Personal Assistant, corrected and pronounced by me in open court, this the 6th day of January, 2020.
I-Addl. Judl. Magistrate of First Class, Nizamabad.
APPENDIX OF EVIDENCE
Witnesses examined
For Complainant: - For Accused :-
PW.1: Kanche Eerranna.- None -
Documents marked
For Complainant:
Ex.P1 : Original cheque bearing No.110329, dated 3.03.2017 of SBI, Shivaji -nagar branch, Nizamabad. Ex.P2: Original cheque return memo, dated 03.03.2017 Ex.P3: Original Promissory note, dated 4.11.2015 executed by accused Ex.P4: Original Acknowledgment receipt dt 4.11.2015 receiving loan by accused Ex.P5: Office copy of statutory notice, dated 11.03.2017 Ex.P6: Original booking receipt of professional courier service with consignment No.NZB702752, dated 16.03.2017 Ex.P7: Original Acknowledgment of receipt of statutory notice by the accused through professional courier service, dated 17.03.2017 Ex.P8: Original letter issued to PW1 by office of the Accountant General (A & E) Andhra Pradesh and Telangana showing entitlement of gratuity.
For Accused:-
- NIL -
I-Addl. Judl. Magistrate of First Class, Nizamabad.