Applicant
- original complainant has preferred this application under section 378(4) of the Code of Criminal Procedure for special leave to appeal challenging judgment and order of acquittal passed by the learned Additional CJM, Palanpur on 30.12.2011 in Criminal Case No. 660 of 2008 acquitting the opponent accused for the offence under section 138 of the Negotiable Instruments Act, 1881 (for short "the Act").
2. According to the applicant, he advanced Rs.60 lacs at the rate of 21% interest per annum on 27.4.2007 for a period of five months. Thereafter, he advanced Rs.19 lacs at the rate of 21% interest per annum on 17.5.2007 for 12 months. As the accused did not pay interest or return the principal amount, he made demands for return of the amount paid to the complainant. Therefore, the accused gave cheque No.766280 dated 5.5.2008 for Rs.42,000/- drawn on Gujarat Industrial Cooperative Bank Limited, Palanpur branch. On presenting the cheque in the bank, it returned unpaid with the endorsement "Today opening balance insufficient". Therefore, notice dated 26.5.2008 was served to the accused. The notice was received by the accused, but he did not return the amount of unpaid cheque.
Therefore, complaint under section 138 of the Act was filed in the Court of learned Additional Senior Civil Judge and JMFC, Palanpur and it was registered as Criminal Case No.660 of 2008.
3. The trial Court issued summons to accused and the accused appeared and pleaded not guilty and claimed to be tried. Therefore, the complainant adduced evidence in support of his case. On completion of recording of evidence, the incriminating circumstances appearing in the evidence against accused were explained to him. Accused in his further statement recorded under section 313 of the Code of Criminal Procedure, 1973 denied having committed the offence. After hearing learned advocates for the parties, the trial Court by impugned judgment, acquitted the accused. Being aggrieved by the said decision, the applicant - original complainant has preferred this application for special leave to appeal.
4. I have heard learned advocate Mr. Sheth for the applicant at length and in great detail. I have also perused the the paper book supplied by the learned advocate.
5. Learned advocate Mr. Sheth submitted that the accused agreed to pay interest on the deposit at the rate of 21% and the deposits were made on 27.4.2007 for five months and on 17.5.2007 for one year. However, the accused did not pay the interest and therefore, the complainant demanded return of the amount. Therefore, cheque in question was given towards amount after calculating the interest as agreed between the parties. Therefore, the applicant had proved that the cheque in question was given towards discharge of legally recoverable debt, but the trial Court committed error in not accepting the evidence of the prosecution. He also submitted that the cheque in question was given on 5.5.2008 and therefore, the amount, which was given for one year, was not payable, but the other amount, which was given for five months, was payable and therefore, even assuming that the second amount was not payable, the trial Court committed error in acquitting the accused not believing the amount payable, which was advanced on the fist occasion. Therefore, the impugned Judgment is required to be set aside.
6. Under section 139 of the Act, it shall be presumed that the holder of a cheque received the cheque for whole or in part of any debt or other liability unless contrary is proved. It is settled position that presumption
6. It appears from the impugned judgment that except bare wards, no cogent and convincing evidence was produced by the complainant to prove the transactions. The allegations made in the complaint indicate that there was transaction between the parties since 2000 and on settlement of account, Rs.12,00,400/- remained payable by the accused to the complainant and the cheque was allegedly given for such amount. It is not in dispute that no documentary evidence with regard to alleged settlement of account between the parties was produced on record of the trial Court. The account statements Exh-26 to 34 appears to be balance sheets, but they are not in respect of the business of the complainant. The balance sheets indicate income from diamond brockerage, whereas the complainant is running a laboratory. The acknowledgment Exh-35 and 36 of the income tax department were also in the name of father of the complainant. These documents do no indicate that the complainant had the funds to advance to the accused. Therefore, except bare words, no documentary evidence was produced by the complainant to show that such a huge amount was advanced to the accused. It also appears that alleged outstanding amount is not shown in the income tax returns and in the cross examination, the complainant admitted that he cannot say whether details in cheque Exh-20 are written by the accused. It also appears that the complainant did not give details of transactions which took place since 2000. Therefore, no cogent evidence was produced to show that cheque Exh-20 was given towards discharge of legally recoverable debt or liability. In the decision of Rangappa (supra) relied upon by the learned advocate for the applicant, Hon'ble Supreme Court has held that presumption mandated by section 139 includes a presumption that there exists a legally enforceable debt or liability. Such presumption is rebuttable in nature. There cannot be any dispute with regard to legal proposition laid down in the said judgment. But the Hon'ble Supreme Court in the said decision has also ruled that the presumption is a rebuttable presumption and it is open to the accused to raise a defence, wherein the existence of legally enforceable debt or liability can be contested. It is also held that when the accused has to rebut the presumption, 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 recoverable debt or liability, the prosecution can fail. It is also held that 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. In the present case, it appears that the accused challenged having received the amount from the complainant. The complainant did not produce documentary evidence to support his claim that on settlement of account, Rs.12,00,400/- remained payable by the accused. Therefore, the accused was able to raise a probable defence, which creates doubt about existence of a legally recoverable debt or liability, as according to the complainant, there were transactions between the parties since the year 2000. In the decision of P. Venugopal v. Madan P. Sarathi reported in 2008 AIR SCW 7702, Hon'ble Supreme Court has ruled that the presumption raised in favour of the holder of the cheque must be kept confined to the matters covered thereby. The presumption raised does not extend to the extent that the cheque was issued for discharge of any debt or liability, which is required to be proved by the complainant. In the decision of M/s Kumar Exports Vs. Sharma Carpets reported in AIR 2009 SC 1518, Hon'ble Supreme Court reiterated that presumption under section 139 is rebuttable presumption. The Court also ruled thus:-
"11. 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. 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 his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not insist in every case that the accused should disprove the non-existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the pas sing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non-existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstance s so relied upon are compelling, the burden may likewise shift again on to the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arising under Sections 118 and 139 of the Act. The accused has also an option to prove the non-existence of consideration and debt or liability either by letting in evidence or in some clear and exceptional case s, from the case set out by the complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial. Once such rebuttal evidence is adduced and accepted by the court, having regard to all the circumstances of the case and the preponderance of probabilities, the evidential burden shifts back to the complainant and, thereafter, the presumptions under Sections 118 and 139 of the Act will not again come to the complainant's rescue."
7. Similarly, in the decision of K. Prakashan v. P.K. Surenderan reported in (2008) 1 SCC 258, Hon'ble Supreme Court again reiterated that presumption under sections 139 and 118 of the Act are rebuttable and burden of proof lying on the accused is required to be discharged by preponderance of probabilities while that lying on prosecution is to be discharged by proof beyond reasonable doubt.
8. In view of these decisions, it is clear that though necessary presumption under section 139 of the Act is in favour of holder of cheque, it is rebuttable presumption and if by preponderance of probabilities, an accused is able to raise a probable defence, the burden shifts on the complainant to prove that cheque was given towards discharge of legally recoverable debt or liability. As observed earlier, in the present case, except bare words, there was no evidence to show the transaction between the parties. Even, no documentary evidence with regard to alleged settlement of accounts was produced. The documents produced at Exh-27 to 34 do not indicate that the complainant had the funds. Even, the income tax acknowledgments Exh-35 and 36 do not indicate that the complainant had filed income tax returns. Therefore, the accused was able to bring on record the facts and circumstance by cross examining the complainant to believe the Court non existence of debt or liability. The accused was able to raise probable defence and rebut the presumption, but the prosecution failed to discharge the burden shifted on it beyond reasonable doubt that the cheque was issued towards legally recoverable debt or liability.
9. In view of above, no ground is made out to grant leave to appeal.
Therefore, the application for leave to appeal is required to be refused.
10. In the result, the application fails. The application for leave to appeal is refused.
11. Consequently, appeal also stands dismissed.
(BANKIM.N.MEHTA, J.) shekhar* Top