THE HONOURABLE Dr. JUSTICE
B.SIVA SANKARA RAO
CRIMINAL APPEAL No.473
of 2009
JUDGMENT:
The appellant
is no other than the complainant in C.C.No.56 of 2008 of private complaint case
against the 2nd respondent-accused on the file of the learned XIV
Additional Judge-cum-XVIII Additional Chief Judge, Metropolitan Magistrate, Nampally,
Hyderabad, for an offence punishable under Section 138 of the Negotiable
Instruments Act (for short, the N.I.Act), based on Ex.P.1 cheque bearing No.755570,dt.26.12.2006
for Rs.50,000/-(Rupees fifty thousand only) taken on 25.06.2006 by the accused
who later issued cheque on 26.12.2006 for said amount mentioned supra drawn on
State Bank of Hyderabad, Anandnagar branch, Khairatabad, Hyderabad towards
discharge of the said debt which the complainant presented in Syndicate Bank,
R.P.Road branch, Secunderabad on 03.03.2007 and the same was returned dishonoured
with the endorsement of ‘insufficient funds’ by memo dated 05.03.2007(Ex.P.2),
thereafter the complainant got issued Ex.P.3 legal notice dt.12.03.2007 which
was returned on 28.03.2007 with an endorsement ‘party not found’ and said
returned cover is Ex.P.4 from which the complaint is filed.
2. Pursuant to
filing of the case, same was taken on file, the accused was secured and after supplied
with copies of documents under Section 207 of Cr.P.C., when questioned under
Section 251 of Cr.P.C., he pleaded not guilty and claimed to be tried. The Court then put the parties to trial in
which the complainant as P.W.1 came to witness box by placed reliance upon
Exs.P.1 to P.4 supra. After the evidence of the complainant, the accused did
not turn up for defence, that after closing trial the accused was questioned
under Section 313 of Cr.P.C. bringing to his notice the incriminating evidence
available for which the accused denied and not chose to adduce any defence
evidence. After hearing both sides, trial court came to conclusion that the
accused found not guilty for the alleged offence under Section 138 of the
N.I.Act and acquitted her under Section 255(1) of Cr.P.C.
3. Impugning
the same, the complainant preferred this appeal with the contentions that the
judgment of the trial Court is arbitrary, against the weight of evidence and
probabilities of the case, that the trial Judge should have relied on the
evidence of complainant-P.W.1, that the learned trial Judge failed to draw a
presumption enunciated under Section 139 of the N.I.Act, that the learned judge
erred in saying that the complainant had not initiated any action in respect of the balance of Rs.26,000/- due to
him and whereas, the fact is two cases i.e. one is C.C.No.260 of 2008 and
C.C.No.243 of 2008 were already pending on the file of the I Additional chief
Metropolitan Magistrate, Hyderabad, that the learned Judge should have held
that there is subsisting legally enforceable debt and the learned Judge should
not have believed the version of the accused that the blank cheques were
misplaced at the house of the complainant which were misused by P.W.1, hence to
set aside the judgment of the learned trail judge by allowing the appeal. The
learned counsel for the appellant reiterated said contentions and also placed
reliance upon the latest Apex Court’s judgment of three judge bench in Rangappa Vs.Mohan[1].
4. The
learned counsel appearing for the 2nd respondent-accused on the
other hand contends that for this Court while sitting in appeal there is
nothing to interfere with the reasoned judgment of the trial Court but for
dismissal. Perused the material on
record. The parties hereinafter are referred to as arrayed before the
Trial Court for the sake of convenience in the appeal.
5. Now the points for
consideration are:
(1).Whether the cheque issued by the accused is not for
legally enforceable debt and if not whether trial Court’s acquittal judgment is
unsustainable and requires interference by this Court while sitting in appeal
and with what observations?
(2). To what result?
Point.1:
6. Before
coming to discuss the factual matrix further, it is just to refer the legal
propositions covering aspects like on the scope of Section 138,139,118 of the
N.I. Act, the availability of presumptions, duty of the accused to rebut and
extent of proof required etc.
6-a. The Apex Court in NARAYAN MENON v. STATE OF
KERALA[2] held that once the complainant shown
that the cheque was drawn by the accused on the account maintained by him with
a banker for payment of any amount in favour of the complainant from out of
that account for its discharge and the same when presented returned by the Bank
unpaid for insufficiency of funds or exceeds arrangement, such person shall be
deemed to have been committed an offence under Section 138 of N.I. Act. What Section 139 of the Act speaks of the
presumption against the accused to rebut is the holder of a cheque received the
cheque of the nature referred in Section 138 of the Act for discharge of debt. For rebutting such
presumption, what is needed is to raise a probable defence. Even for the said
purpose, the evidence adduced on behalf of the complainant could be relied
upon. Accused need not enter into the witness box and examine other witnesses
in support of his defence. Accused need not disprove the prosecution case in
its entirety. Therefore, the rebuttal does not have to be conclusively
established but such evidence must be adduced before the court in support of
the defence that the court must either believe the defence to exist or consider
its existence to be reasonably probable, the standard of reasonability being
that of the "prudent man".
6-b.
The presumption that further applied among clauses (a) to (g) of Section 118 of
N.I. Act also, like the presumption under Section 139 of the Act, as per
Section 4 of the Evidence Act, is a rebuttable presumption for which the burden
is on the accused, however, to rebut the presumption if a case is made out by
accused either by pointing out from the case of the complainant including very
documents and cross-examination or by examining any person and need not be
always by coming to witness box vide decision in KUMAR EXPORTS PVT. LTD. V.
SHARMA CARPETS[3].
6-c.
Further, as per the expression of the Apex Court in RANGAPPA vs. MOHAN[4]
(3-Judges Bench) paras-9 to 15 referring to Goa Plast’s case (supra), KRISHNA
JANARDHAN BHAT v. DATTATRAYA G. HEGDE[5]
by distinguishing at para-14 saying the observation in KRISHNA JANARDHAN BHAT
(supra) of the presumption mandated by Section 139 does not indeed include the
existence of a legally enforceable debt or liability is not correct, though in
other respects correctness of the decision does not in any way cause doubted;
by also referring to HITEN P. DALAL v. BRATINDRANATH BANERJEE[6]
holding at paras-22 and 23 therein of the obligation on the part of the Court
to raise the presumption under 138, 139 and 118 of the N.I. Act, in every case
where the factual basis for raising the presumption has been established since
introduces an exception to the general rule as to the burden of proof in
criminal cases and shifts the onus on to the accused, as a presumption of law
distinguished from a presumption of fact as part of rules of evidence and no
way in conflict with presumption of innocence and the proof by prosecution
against the accused beyond reasonable doubt, but for saying to rebut the
accused can discharge the burden showing reasonable probability of
non-existence of the presumption of fact and to that proposition, the earlier
expression in BHARAT BARREL & DRUM MANUFACTURING COMPANY v. AMIN CHAND
PYARELAL[7]
para-12 showing the burden on the accused is to bring on record by
preponderance of probability either direct evidence or by referring to
circumstances upon which he relies, rather than bare denial of the passing of
the consideration; apparently that does not appear to be of any defence, to get
the benefit in discharge of the onus against, also held referring the M.M.T.C.
LTD. AND ANOTHER v. MEDCHL CHEMICALS & PHARMA (P) LTD[8]
that where the accused able to show justification of stop payment letter even
from funds are there, but no existence of debt or liability at the time of
presentation of cheque for encashment to say no offence under Section 138 of
the N.I. Act made out in discharge of
the burden. It was concluded referring to the above, including of MALLAVARAPU
KASIVISWESWARA RAO v. THADIKONDA RAMULU FIRM & ORS[9]
paras-14 and 15 that the initial presumption lays in favour of the complainant
and Section 139 is an example of a reverse onus clause, which has been included
in furtherance of the legitimate objection of improving the credibility of the
negotiable instruments. While Section 138 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. 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 and the
test of proportionality should guide the construction and interpretation of
reverse onus clause and the accused cannot be expected to discharge an unduly
high standard or proof and in the absence of compelling justifications, reverse
onus clauses usually impose an evidentiary burden and not a persuasive burden
to discharge by preponderance of probabilities by raising creation of doubt
about the existence of a legally enforceable debt or liability to fail the
prosecution and for that the accused can rely on the material submitted by the
complainant also in order to raise such a defence and he may not need to adduce
any evidence of his own.
6-d. It
was also observed in para-15 that the accused appear to be aware of the fact
that the cheque was with the complainant, further-more the very fact that the
accused has failed to reply to the statutory notice under Section 138 of the
Act leads to the inference that there was merit in the complainant’s
version. It was also held by this court
way back Chapala Hanumaiah Vs Kavuri
Venkateswarlu[10]
that having received and acknowledged the statutory legal
notice after dishonour of cheque, non-giving of reply to said legal notice,
improbablises the defence version, as any prudent person under the said
circumstances should have, but for no defence to reply.
7. From above legal
position, coming to decide on the facts from oral, circumstantial and
documentary evidence, how far it is proved the case of the complainant for
drawing of presumptions and also inferences, if any, to draw on either side
and, how far the presumptions are rebutted by accused concerned;
From
the very defence of the accused including in the cross-examination of the P.W.1
for she did not come to witness box, there is no dispute on the factum that the
Ex.P.1 cheque (for Rs.50,000/-) bearing No.755570 is routed from her account
and with her signature. There is also no
dispute on the fact that the accused borrowed from the complainant Rs.50,000/-
but for to say as if four years back. Leave about Rs.26,000/- regarding the
alleged discrepancy pointed out by the trial Court for what P.W.1 deposed of
Rs.26,000/- paid by cash and Rs.50,000/- given by cheque for making therefrom
as if mountain out of a mould hill, particularly in para-12, Rs.50,000/- is lent
to the accused by way of a cheque which was also stated on 25.06.2006 and it is
for the same the accused issued for the said Rs.50,000/- the Ex.P.1 cheque dated 26.12.2006. The defence of the accused including the
cross-examination of P.W.1 is that besides eliciting the above facts in
confirmation from cross-examination of P.W.1, the suggestion of 4 years back the accused
received Rs.50,000/- cheque from the complainant and it was not of dated
25.06.2006 and at that time 9 blank cheques under pronote obtained by the
complainant and after six months she discharged entire amount and the pronote was
torn out by the complainant in his presence but did not return the alleged
cheques stating those were not traced with a promise to return. It is highly improbable to believe that
defence, apart from it, accused did not come to witness box even to
cross-examine her in this regard by complainant. Prudence requires even under Section
3 of the Indian Evidence Act to infer for no prudent person would keep quiet,
that too, taken the pronote and it was torn out for alleged 9 blank cheques
issued and from saying not traced kept quiet without insisting any receipt to
return after traced or even the alleged taking of the amount 4 years back and
discharged 6 months thereafter with no proof for plea of discharge even by
taking any amount; without even subsequently for non-return of alleged 9 blank
cheques. If true, she could have been issued
at least legal notice. She could have
obtained receipt for the payment made and blank cheques to return. She did not
even cause produce her cheque book counterfoils much less proved of the same by
summoning her banker of any such cheques with what serial numbers not sent for
collection. She did not even by mentioning the fact ask the bank not to honour
if such cheques presented. She did not even given the so called nine blank
cheques numbers to give credence to such version of her. The trial Court did not appreciate this aspect
though as per Rangappa(supra) the burden is on the accused under the reverse
onus clause including the alleged defence of discharge. She pleaded and set up
the alleged non-return of cheques defence and o;f blank cheque used theory. So far as the notice is concerned, the notice
sent covered by Ex.P.3 that was returned with Ex.P.4 postal cover with
endorsement “party not found”. In the
cross-examination of P.W.1 by the accused in this regard, it is elicited that
the complainant managed postal authorities in cause returning with endorsement
‘party not found’. He did not even
dispute that the address is incorrect or it is not his residence. Thereby, the
presumption due service can be drawn as per the settled law and from the said endorsements
tantamounts the refusal for not even making any arrangement to take the notice
in the absence that is required and the lower Court rightly followed the three
judge Bench expression of the Apex Court in CC Alavi Haji, Vs. Palapetty Muhammed[11]. However, the lower Court went wrong in
dismissing the complaint instead of above factual matrix, complainant could
prove the false and the accused failed to rebut the said evidence on behalf of
the complainant and also the presumptions of cheque is issued for legally
enforceable debt and once the cheque is issued that was routed from the account
of the accused and it is in discharge of the liability and under Section 118 of
the N.I. Act for the said amount in the name of the complainant and on the said
date it bears, the Court shall presume as what the theory set up in the
cross-examination of P.W.1 by accused could not make out to rebut the
presumptions thereby the trial Court’s acquittal judgment is liable to be set
aside and accused is found guilty for the offence punishable under Section 138
of the N.I.Act. Point No.1 is answered accordingly.
Point No. 2:
8. In the result, the
Criminal Appeal is, therefore, allowed and the order of acquittal recorded by
the Court below is hereby set aside and the 2nd respondent-accused
is found guilty of the offence under Section 138 of the N.I. Act and is
convicted accordingly.
9. For hearing of the accused
on the quantum of sentence posted to 23.01.2015.
_____________________________
Dr. JUSTICE B. SIVA SANKARA RAO
Date:29-12-2014
Vvr
23.01.2015
10. Following the expression of the Apex
Court in SOMNATH SARKA Vs. UTPAL BASU MALLICK[12]
that the Act not contemplated grant of compensation but envisages
imposition of fine not exceeding twice the amount of dishonoured cheque and out
of said fine amount, the complainant be compensated under Section 357 Cr.P.C
and that ‘unlike for other forms of crime, the punishment here (insofar as
the complainant is concerned) is not a means of seeking retribution, but is
more a means to ensure payment of money.
The complainant’s interest lies primarily in recovering the money rather
than seeing the drawer of the cheque in jail.
The threat of jail is only a mode to ensure recovery. As against the accused who is willing to
under go a jail term, there is little available as remedy for the holder of the
cheque.”
11. Having regard to the above and from
the submission by the appellant/ complainant of the endeavour is to recover the
amount of compensation from out of fine or otherwise, rather than sentencing
the accused to jail, the accused is sentenced to undergo Simple Imprisonment
till rising of the day and to pay a fine of Rs.75,000/- of which Rs.5,000/-
shall go to the Government and the balance amount of Rs.70,000/- which the complainant
is entitled towards compensation and the accused is directed to pay or deposit
the same within four weeks from the date of receipt of copy of this
Judgment. It is thereby directed the
learned Magistrate to secure the presence of accused on warrant to undergo the
sentence in that open Court and also to cause recover the fine amount under
Section 431 read with Section 421 Cr.P.C by issuing warrant levying the fine
with default sentence of three months Simple imprisonment as per Sections 65 to
68 read with Section 53 (6) IPC.
________________________
Dr.B.SIVA SANKARA RAO, J
Dt: 23.01.2015
B/o
Vvr/knl
