The appellant – original complainant has preferred this appeal under Section 378 of the Code of Criminal Procedure and challenged the judgement and order of acquittal passed by learned Additional Senior Civil Judge and Additional Chief Judicial Magistrate, Surendranagar, on 8.6.2010 in Criminal Case No. 494 of 2005 acquitting the respondent accused for the offence under Section 138 of the Negotiable Instruments Act (“the Act” for short). 2. According to the complainant, he is a retired L.I.C. Employee and is doing business of money lending since last about one year and is holding Money Lenders Licence. Accused No. 1 is a partnership firm. Accused Nos. 2 and 3 are partners thereof. As accused No. 1 was in need of finance for carrying on its business, accused Nos. 2 and 3 obtained in all Rs. 7 lakh as hand loan. On demand of the amount advanced to the accused, accused No. 2 on behalf of accused No. 1, gave cheque No. 4313446 dated 3.1.2005 for Rs. 7 lakh drawn on Surendranagar Peoples Co-operative Bank, Surendranagar. On presentation of the said cheque in the bank, it returned with endorsement “funds insufficient”. Therefore, the complainant, inadvertently, served a notice dated 10.1.2005 to accused No. 2 believing that the cheque is drawn by accused No. 2 in his personal capacity. The said notice was served on 12.1.2005. Thereafter, again notice dated 2.2.2005 was served to the accused. Despite that, the accused did not pay the amount. Therefore, the complaint was filed.
3. Trial Court issued summons and the accused appeared and pleased not guilty to the charges and claimed to be tried. Therefore, the complainant adduced evidence. On completion of recording of evidence, incriminating circumstances appearing in the evidence against the accused were explained to them. The accused in their further statement recorded under Section 313 of the Code of Criminal Procedure, 1973, denied having committed the offence and stated that false case is filed against them. After hearing learned advocate for the parties, the trial Court by impugned judgement acquitted the accused. Being aggrieved by the said decision, the present appeal has been filed.
4. I have heard learned advocate Mr. Saiyed for the appellant and learned advocate Mr. Mehta for learned advocate Mr. Karia for the respondent accused and learned A.P.P. Ms.
C.M. Shah for the respondent State. I have also perused the impugned judgement and record and proceedings of the trial Court.
5. Learned advocate Mr. Saiyed for the appellant submitted that notice informing the accused about dishonour of the cheque was served. However, the accused did not give any reply to the notice. Therefore, the allegations made in the notice deem to have been admitted by the accused. Hence the trial Court committed error in acquitting the accused. He also submitted that the trial Court committed error in holding that the complainant was a money lender who did not produce any evidence to prove the money lend to the accused. Under the provisions of the Act, the Court is not required to consider this aspect as the Court has to only consider whether the drawer of a cheque has explained dishonour of cheque. Therefore, the trial Court committed error in acquitting the accused.
6. Learned advocate Mr. Mehta submitted that under the provisions of the Act, the accused is not required to give reply to the notice and simply not giving reply would not saddle the accused with criminal liability. He also submitted that the complainant was required to prove that money was advanced to the accused and the accused was able to prove by cross- examination that the complainant had no sufficient source to advance the amount. However, the complainant did not adduce any evidence to prove the amount advanced to the accused and therefore the trial Court was justified in acquitting the accused and no interference is warranted in the impugned judgement.
7. Learned A.P.P. Ms. C.M. Shah for the respondent State supported the submissions made by learned advocate Mr. Mehta for the accused.
8. It appears from the allegations in the FIR that accused No. 1 is a partnership firm and accused Nos. 2 and 3 are its partners. It also appears that the accused obtained Rs. 7 lakh as hand loan on sherafi from the accused and accused No. 2 gave a cheque on behalf of accused No. 1 for repayment of amount allegedly obtained by them. The allegations made in the complaint did not indicate that accused No. 3 was either partner or was managing the affairs of accused No. 1 firm. The complainant did not adduce any evidence to connect the accused No. 3 with accused No. 1. The cheque in question was drawn by accused No. 2 on behalf of accused No. 1. Therefore, except bare words there is no evidence to connect accused No.
3 with the offence. Hence the trial Court was justified in acquitting accused No. 3.
9. In order to prove the case against the accused, the complainant examined himself at Exh. 35. The witness has been extensively cross-examined by the accused. In the cross- examination the witness has stated that he has money lenders licence and maintains books of account. The witness has admitted that a form is required to be filled in for advance and copy thereof is to be retained by the lender and other copy is required to be given to the borrower. He has also stated that the accused has filled in the form and it is sent to money lenders office and is prepared to produce the form. The witness has also admitted that he has no evidence to show the dates and the amounts advanced to the accused. The witness has also admitted that daily transaction is required to be reflected in the daily ledger and the amount advanced is required to be debited in the debit note and the amount received against such amount is required to be credited in the credit note. The witness has also admitted that entry is being made in the account ledger on the basis of the entries made in the credit note and debit note. The witness has also admitted that the daily ledger produced in the Court does not indicate the date of last entry. The witness has also admitted that he does not maintain regular accounts. The witness has also admitted that any amount advanced under Money Lenders Act is required to be intimated to the authority within 30 days under the provisions of the Money Lenders Act. The witness has also admitted that except two books of account Exhs. 54-55 produced in the Court, he has no other books of account.
10. In view of above, it appears from the cross- examination of the witness that the witness was a money lender and had advanced alleged amount to the accused as money lender. It also emerges that a form is required to be filled in for the amount advanced and a copy thereof is required to be retained by the money lender and it is to be sent to the authority under the provisions of the Money Lenders Act. The complainant though showed his readiness to produce such form has not produced any such form to prove that the alleged amount was advanced to the accused. It is also pertinent that vague statement is made that amounts were advanced on different dates as it does not give specific dates of alleged advances. The books of account produced at Exhs. 54-55 raise serious doubt as they do not indicate details and the amount allegedly advanced to the accused. The document produced at Exh. 54 is a copy of daily ledger. It only mentions that Rs. 7 lakh is advanced to accused No. 1. The document produced at Exh. 55 is account of the accused wherein Rs. 7 lakh has been debited on 3.11.2004. This evidence is contrary to the complainant's version that different amounts were advanced to the accused on different dates. Therefore, the books of account do not inspire confidence. Even the witness has also admitted that he does not maintain the accounts regularly. Therefore, there is no cogent and convincing evidence to indicate that the complainant advanced aggregate amount of Rs. 7 lakh as alleged in the complaint.
11. It also appears that the notice dated 10.1.2005 Exh.
44 was served to accused No. 2 informing him about money advanced and return of the cheque unpaid. It is alleged in the notice that accused No. 2 was doing the business as general merchant and commission agent and had obtained the amount for his business purpose. The notice does not allege that accused No. 2 obtained the amount on behalf of accused No. 1, partnership firm and as partner thereof. The evidence indicates that after service of notice, again a notice dated 2.2.2005 Exh. 46 was served to the accused alleging that accused No. 1 is a partnership firm and accused Nos. 2 and 3 are managing the affairs of accused No. 1 partnership firm. It is also alleged that as accused Nos. 2 and 3 were managing the affairs of accused No. 1 firm, and accused Nos. 2 and 3 demanded the amount from the complainant. Except the allegation that accused Nos.
2 and 3 are managing the affairs of accused No. 1, there is no convincing evidence produced by the complainant to connect the accused. Cheque Exh. 41 appears to have been drawn by a partner of accused No. 1. As observed earlier, notice Exh. 44 and notice Exh. 46 are contradictory. Therefore, benefit is required to be given to the accused. It was submitted that non- reply of notice amounts to accepting the allegations levelled in the notice. Under Section 138 of the Act, payee is required to inform the drawer of the cheque regarding return of the cheque as unpaid. It is settled proposition that in order to saddle a person with criminal liability, law is required to be strictly interpreted. Therefore, simply because accused did not reply to the notice, it cannot be said that accused admitted the allegations made in the notice. Therefore, this submission cannot be accepted.
12. As regards submission that the Court committed error in mixing the provisions of the Act and Money Lenders Act, in my view when cheque was allegedly issued for the amount advanced by the complainant by virtue of licence under a Money Lenders Act, a duty was cast upon the complainant to prove advance of amount to the accused. It is settled proposition that presumption raised in favour of holder of cheque does not extend to the extent that the cheque was issued for the discharge of any debt or liability. It is required to be proved by the complainant. By cross-examination of the complainant, the accused was able to raise a probable defence that they did not receive any amount from the complainant. Therefore, burden of proof shifted on the complainant to prove that the amount was advanced to the accused and the cheque was issued towards discharge of such liability. It is not in dispute that the alleged amount was advanced in cash and no writing in that regard was obtained. The books of account produced in support of the case do not inspire confidence as the account has not been regularly maintained.
13. It is settled proposition that when an accused has to rebut the presumption under Section 139 of the Act, 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. The accused can rely on the materials submitted by the complainant in order to raise such a defence. In the present case the accused was able to raise probable defence.
14. In view of the above, as the respondent-accused was able to rebut the presumption under Section 139 of the Act and raised a probable defence and the appellant-complainant failed to prove that the cheque in question was given towards discharge of existing recoverable debt, the trial Court was justified in passing the impugned judgement acquitting the respondent-accused. Learned advocate for the appellant- complainant has not been able to point out any infirmity in the impugned judgement.
In the result, the appeal is dismissed.
(BANKIM N. MEHTA, J) (pkn)