The appellant, original complainant, has preferred this appeal under Section 378 of the Code of Criminal Procedure, 1973 and challenged the judgement and order of acquittal passed by learned Joint Civil Judge (Senior Division), Bharuch, on 31.1.2003 in Criminal Case No. 13739 of 2001 acquitting the respondents accused for the offence under Section 138 of the Negotiable Instruments Act, 1881 (“the Act” for short). 2. According to the complainant, the complainant bank is registered under the provisions of the Co-operative Societies Act and is doing business of giving advance to its members. Accused Nos. 1 to 3 are partners of Zen Enterprise, doing the business of construction. The accused gave cheque Nos. 257861 and 257862 dated 12.9.2001 for Rs. 68,600/- and Rs. 67,519/- respectively drawn on Bharuch Nagrik Sahakari Bank Limited towards discharge of their liability. The cheques were drawn by accused No. 1 Kiritbhai Meghjibhai Patel and accused No. 2 Mohammad Salim Miya. Accused No. 3 Gulam Mustafa Miya is also an active partner and therefore all the accused are liable for the cheque amount. On presentation of the cheques in the bank, both the cheques returned unpaid on account of insufficient funds. Therefore, notice was served to the accused making demand of unpaid cheque amount. The accused despite receipt of the notice, did not pay the unpaid cheque amounts. Therefore, complaint under Section 138 of the Act was filed in the Court of learned Chief Judicial Magistrate at Bharuch and it was registered as Criminal Case No. 13739 of 2001.
3. The trial Court issued summons. The accused appeared and denied having committed the offence. Therefore, prosecution adduced evidence. At the end of recording of evidence, incriminating circumstances appearing in the evidence against the accused were explained to them. In the further statement recorded under Section 313 of the Code of Criminal Procedure, 1973, the accused explained the incriminating circumstances. The accused also filed written statement. After hearing learned advocates for the parties, the trial Court by the impugned judgement, acquitted the accused. Being aggrieved by the said decision, the complainant has preferred this appeal.
4. I have heard learned advocate Mr. Unwala for learned advocate Mr. A.S. Vakil for the appellant and learned advocate Mr. Majmudar for the respondents accused at length and in great detail. I have also perused the impugned judgement and the record and proceedings of the trial Court.
5. Learned advocate Mr. Unwala for the appellant submitted that the accused did not dispute the signature on the cheques and execution of agreements and did not lead any evidence to show that there was no legal debt and the cheques were not given towards discharge of such debt and hence failed to discharge their burden of proving their defence. He further submitted that the accused did not reply to the statutory notice served under Section 138 of the Act. Therefore, the trial Court committed error in acquitting the accused. He relied on the decisions of RANGAPPA VS. MOHAN, reported in AIR 2010 SC 1898, ANIL SACHAR & ANR. VS. M/S. SHREE NATH SPINNERS P. LTD. & ORS. reported in AIR 2011 SC 2751 and M/S. KUMAR EXPORTS VS. M/S. SHARMA CARPETS reported in AIR 2009 SC 1518.
6. Learned advocate Mr. Majmudar for the respondents accused submitted that the complainant did not produce books of account to show the debt and therefore the complainant failed to prove the existence of legally recoverable debt. He also submitted that by cross-examination of the witness, the accused were able to bring the circumstances and probable defence on record of the case and the complainant failed to discharge the burden shifted on it. Therefore, the trial Court was justified in acquitting the accused and hence no interference is warranted in the impugned judgement. He also relied on the decision of M/S. KUMAR EXPORTS VS. M/S. SHARMA CARPETS (supra).
7. It appears from the allegations made in the complaint that the complainant is a Co-operative Bank and is dealing in advancing amounts to its members and pursuant to its business loan was advanced to the accused. The complaint does not indicate as to what was the amount advanced to the accused. It is alleged that pursuant to the outstanding amounts, two cheques were given by the accused towards discharge of their liability. The complainant produced agreements Exhs. 24 and 35 and cheques in question Exhs. 25 and 26 in support of its case of advance to the accused. The accused examined complainant Kamleshbhai Bansilal Modi at Exh. 22. In the cross-examination the witness admitted that after execution of agreement Exh. 24 loan was advanced. The witness also admitted that cheques Exhs. 25 and 26 were blank cheques and were in custody of the complainant bank. The witness also admitted that the details including the date in cheques Exhs. 25 and 26 are filled in by the bank employees. In view of above evidence, it emerges that cheques Exhs. 25 and 26 were given towards loan advanced to the accused. Agreement Exh. 24 indicates that the accused obtained loan of Rs. 5 lakh from the complainant for their business purpose on 16.1.2001 and the loan amount was to be repaid in 57 instalments. It also indicates that blank cheque Nos. 257853 to 257925 and 257801 to 257805 were given to the complainant bank towards payment of instalments. The agreement also indicates that the accused were liable to pay 20% interest. The agreement further indicates that the amount of 56th instalment was to be of Rs. 8800/- and 57th instalment was to be of Rs. 7,200/-.
8. The prosecution also produced another agreement dated 14.11.2000 executed between the parties at Exh. 35. The agreement is in respect of loan of Rs. 10 lakh advanced on 14.11.2000 to the accused for their business purpose. It also indicates that the loan was to be paid in 59 monthly instalments and 58th instalment was to be of Rs. 17,000/- and 59th instalment was to be of Rs. 14,000/-. It also indicates that the accused were liable to pay interest at the rate of 19% per annum and blank cheque Nos. 257851 to 257925 and 257801 to 257805 were given towards payment of instalments.
9. In view of above evidence, it emerges that the accused obtained two loans at different time by executing separate agreements and both the agreements mentioned the same blank cheques given towards payment of instalments. The cheques Exh. 25 and Exh. 26 were allegedly given towards discharge of liability. The agreements Exh. 24 and Exh. 35 mentioned that these cheques were given towards payment of instalment. The agreements do not indicate amount of monthly instalment but only indicate amount of last two instalments. The prosecution did not produce any documentary evidence to show the amount of unpaid instalment or that the cheques were given towards payment of instalment either under agreement Exh. 24 or Exh. 35. Therefore, there is no evidence to show the outstanding amount in the account under both the agreements. Therefore, the prosecution failed to prove the outstanding amount and that the cheques were given towards discharge of such liability.
10. It appears from the cross-examination of the complainant that blank cheques towards instalments were given and bank officers filled in the detail in the cheques. Under Section 139 of the Act legal presumption is in favour of holder of a cheque that he received the cheque for discharge in whole or in part of any debt or other liability. The presumption is rebuttable presumption. It is settled proposition that standard of proof to rebut the presumption under Section 139 of the Act is that of preponderance of probabilities. In order to disprove the presumption the accused has to bring on record such facts and circumstances upon consideration of which the Court may either believe that the consideration did not exist or its non-existence was probable that a prudent man would under the circumstances of the case, act upon the plea that it did not exist. The accused is required to bring on record something which is probable for getting the benefit of shifting the onus of proving to the complainant. If the accused is able to raise a probable defence which creates doubts about existence of a legally recoverable debt, prosecution can fail. It is also settled proposition of law that in order to raise probable defence the accused is not required to enter into witness box or lead evidence but can rely on the evidence produced by the complainant. In order to prove the case, the complainant produced agreements Exhs. 24 and 35 to show that loans were advanced to the accused. In the further statement, the accused raised a defence that they applied for loan of Rs. 30 lakh but Rs. 15 lakh were given to them and out of that Rs. 2,76,000/- were repaid. The cross-examination of the complainant also indicates that blank cheques were given to the complainant bank as security and bank officers filled in the details in the cheques. The agreements also indicate that the loans were sanctioned on condition that the borrower gives cheques of instalments in advance and both the agreements were additional agreement. The original agreements are not produced on record of the case. The accused have alleged misuse of the cheques. In view of the cross-examination the accused were able to bring on record the facts and circumstances that blank cheques were in custody of the complainant bank and were misused. Therefore, the accused were able to rebut the presumption by raising probable defence. Hence the burden shifted on the complainant to prove that the cheques were given towards discharge of legally recoverable debt or liability. It is not in dispute that except agreements Exhs. 24 and 35, the complainant did not produce any documentary evidence to show that the accused gave cheques Exhs. 25 and 26 towards discharge of existing recoverable debt or liability. The agreements only indicate that loans were advanced to the accused and the loans were repayable in instalments. The agreements do not indicate outstanding amount when the cheques were allegedly given. The prosecution did not produce statement of account to show the debt and to prove that the cheques were given towards discharge of such debt or liability. Therefore, the accused were able to raise probable defence. The complainant failed to prove the debt. Therefore, the trial Court was justified in acquitting the accused.
11. In the decision of RANGAPPA VS. MOHAN (supra), Hon'ble Supreme Court ruled that existence of legally recoverable debt or liability is a matter of presumption under Section 139 of the Act. The Court also ruled that the standard of proof for rebutting is that of preponderance of probabilities. In the present case, as observed earlier, the accused were able to rebut the presumption by preponderance of probabilities but the complainant failed to discharge the burden shifted on him. Therefore, this decision does not render any assistance to the appellant.
12. Learned counsel for the appellant relied on the decision of ANIL SACHAR & ANR. VS. M/S. SHREE NATH SPINNERS P. LTD. & ORS. (supra). This decision is with regard to presumption under Section 139 of the Act. In the present case, as observed earlier, the accused were able to rebut the presumption and therefore this decision does not help the appellant.
13. Learned counsel for both the parties relied on the decision of M/S. KUMAR EXPORTS VS. M/S. SHARMA CARPETS (supra). This decision is on the point that the accused need not prove his defence beyond reasonable doubt. In the present case, this decision does not render any assistance to the appellant but it helps the respondents-accused.
14. In view of above, it clearly emerges that though the accused did not dispute the signature on the cheques, the accused by cross-examining the complainant, were able to raise probable defence that blank cheques were in custody of the complainant bank and those cheques were misused. It is true that the accused did not lead any evidence to prove non- existence of debt but it is settled proposition that there cannot be negative evidence. In view of decision of RANGAPPA (supra) the accused can rely on the material submitted by the complainant to raise such defence. When the accused were able to rebut the presumption by raising probable defence, it was for the complainant to prove existence of legally recoverable debt and therefore the submission of Mr. Unwala that the accused failed to lead evidence to show non-existence of debt cannot be accepted.
15. As regards the other contention that the accused did not dispute execution of the agreements Exhs. 24 and 35 and therefore the burden was on the accused to prove that the cheques were not given pursuant to the agreements, as observed earlier, loan agreements indicate that blank cheques were given to the complainant. The agreements do not indicate the outstanding amounts when the cheques were given to the complainant. Therefore, even if the agreements were not disputed by the accused that would not absolve the complainant from his liability to prove the existence of legally recoverable debt. Therefore, this submission cannot be accepted.
16. As regards the submission that as the accused did not reply to the statutory notice, under Section 138 of the Act defence should not be believed. It is settled position that in a criminal trial, accused has a right to keep silence. The accused is not required to prove his defence. The notice under section 138(b) of the Act only provides for giving an opportunity to the drawer of the cheque to make payment of dishonoured cheque. Therefore, even if an accused does not reply to the statutory notice, no inference could be drawn against the accused as the complainant is required to prove the case beyond reasonable CR.A/473/2003 10/10 JUDGMENT doubt.
17. In view of above, the trial Court was justified in acquitting the accused. Learned advocate for the appellant failed to point out any legal infirmity in the impugned judgement. The appeal, therefore, fails and stands dismissed.
(BANKIM N. MEHTA, J) (pkn)