1. This criminal appeal filed under Section 378(4) Cr.P.C. is directed against the judgment and order dated 22.9.2009 passed by Chief Judicial Magistrate, Sultanpur acquitting accused Om Prakash Shukla of the charges framed under Section 138 N.I.Act ('Act' in short).
2. I have heard Sri S.K.Mehrotra, learned counsel for appellant and Sri Jyotindra Misra, Senior Counsel for respondent-accused and gone through the record.
3. Prosecution case apparent from complaint and statements under Section 200/202 Cr.P.C. in brief is that Udai Shanker Misra appellant filed a complaint before Chief Judicial Magistrate, Sultanpur under Section 138 of the N.I.Act alleging that Om Prakash Shukla was granted license for running diesel-petrol outlet from Bharat Petroleum. Since he was short of the fund, sought financial help from complainant as his father Sri Shyam Narain Misra had recently retired from UCO Bank as Assistant Manager under voluntary retirement scheme. He had received Rs. 20,00000/- on retirement. Sri Shukla persuaded complainant's father who agreed and extended financial help to the tune of Rs. 16,00000/-, he executed a written-note on 19.10.2001 on a stamp paper of Rs. 100/- expressing commencement of partnership business with the complainant. Partnership deed was also executed on 10.2.2003 duly verified by Sudhakar Misra, Notary, along with two witnesses, namely, Ashok Kumar and Prem Lal Srivastava, Advocate. It was agreed that Om Prakash Shukla would be partner of 51% and Udai Shanker Misra of 49%. Since for sometime nothing was paid despite repeated protests, accounts were finally settled on 30th March, 2005 and accused gave banker's cheque of Rs. 3,95,575/- towards complainant's share in the profits and unilaterally dissolved the partnership. He also executed another cheque for Rs. 16,00000/- which was principal amount advanced by complainant's father. These cheques were presented by complainant before State Bank, Kurebhar on 26.4.2005. First cheque was dishonoured on account of insufficiency of funds, while another cheque for Rs. 3,95,572/- was returned unpaid under the instructions of 'stop payments'. Thereafter complainant gave a written notice on 10.5.2005 as required under Section 138 of N.I.Act. Despite notice, an evasive reply was sent by respondent stating that both the cheques were not issued by him. Non-payment of cheque led to cause of action, hence complaint.
4. After recording statements of complainant, Shyam Narain and Ashok kumar under Sections 200 and 202 Cr.P.C., accused was summoned. Accused did not plead guilty, hence under Section 254 Cr.P.C. Complainant examined himself as P.W.1, his father Shyam Narain Misra as P.W.2 and Prem Lal Srivastava as P.W.3, no other witness was examined.
5. Accused neither appeared himself as witness nor examined any witness in his defence.
6. Chief Judicial Magistrate, Sultanpur held that complainant has failed to prove his case and she acquitted the accused vide her judgment and order dated 22.9.2009 which is impugned in this appeal.
7. Submission of Sri S.K.Mehrotra, learned counsel is that trial court has committed gross error of law by shifting burden of proof on complainant. He relied on certain decisions which will be discussed later on.
8. Section 118 of N.I.Act contemplates presumption in respect of Negotiable Instruments. Section 138 provides that where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability is returned by the bank unpaid, on account of insufficient fund etc. will be deemed to have committed offence. Section 138 despite notice makes non-payment of amount of cheque, a criminal liability and provides maximum punishment of 2 years imprisonment or fine or both. Section 139 which is also relevant envisages presumption for discharge of debt or liability if cheque is in the nature of Section 138. Section 139 is being reproduced below-
" 139. Presumption in favour of holder- 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."
9. In the case of C.Keshvamurthy v. H.K. Abdul Zabbar, 2013(4) Civil Court Cases 200 (SC), Apex Court in para 9 has held that presumption under Section 139 of the Act includes the presumption of the existence of a legally enforceable debt or liability. Para 9 of the judgment is being reproduced below-
"9. Secondly, as far as the proposition canvased on the basis of the judgment in Krishna Janardhan Bhat (supra) is concerned, it must be noted that the same has been specifically held to be not a correct one in paragraph 26 of the judgment rendered by a three- Judge Bench in Rangappa vs. Sri Mohan, reported in [2010(11)SCC 441]. The judgment clearly held that the presumption under Section 139 of the Negotiable Instruments Act, 1881, includes the presumption of the existence at a legally enforceable debt or liability. That presumption is required to be honoured, and if it is not so done, the entire basis of making these provisions will be lost. Therefore, it has been held that it is for the accused to explain his case and defend it once the fact of cheque bouncing is prima facie established. The burden is on him to disprove the allegations once a prima facie case is made out by the Complainant."
10. In this case, it was held that it is for the accused to explain his case and defend it once the fact of cheque bouncing is prima facie established in view of the decision given in the case of Rangappa v. Sri Mohan reported in 2010(3) Criminal Court Cases, page 22 (SC).
11. In the case of Anil Sachar and another v. Shree Nath Spinner Private Limited and others, (2011) 13 Supreme Court Cases 148. Sections 116, 139 of Act were discussed.
12. In para 18, Hon'ble Court observed that in view of Section 139, there is a presumption with regard to consideration when a cheque has been issued by drawer of the cheque.
13. Para 21 of the judgment is relevant and is being reproduced herein below-
"21. Looking to the facts of the case and law on the subject, we are of the view that all the four cheques referred to in both the complaints are presumed to have been given for consideration. The presumption under Section 139 of the Act has not been rebutted by the accused and, therefore, we are of the view that the trial court wrongly acquitted the accused by taking a view that there was no consideration for which the cheques were given by Munish Jain to the complainants. The aforesaid incorrect view was wrongly confirmed by the High Court. We, therefore, set aside the acquittal order and convict accused Munish Jain under Section 138 of the Act."
14. Case of Rangappa v. Sri Mohan, (2010) 11 SCC, 441, para 18 pertains to a case where payment was stopped by drawer. In para 18, it was observed that when a cheque is dishonoured on account of "stop-payment" instructions sent by the accused to his bank in respect of a post-dated cheque, irrespective of insufficiency of funds in the account, Section 138 is attracted. Reliance has been placed on a decision of Goaplast (P) Ltd. v. Chico Ursula D'Souza which can be usefully quoted below-
"18. Ordinarily in cheque bouncing cases, what the courts have to consider is whether the ingredients of the offence enumerated in Section 138 of the Act have been met and if so, whether the accused was able to rebut the statutory presumption contemplated by Section 139 of the Act. With respect to the facts of the present case, it must be clarified that contrary to the trial court's finding, Section 138 of the Act can indeed be attracted when a cheque is dishonoured on account of `stop payment' instructions sent by the accused to his bank in respect of a post-dated cheque, irrespective of insufficiency of funds in the account. This position was clarified by this Court in Goa Plast (Pvt.) Ltd. v. Chico Ursula D'Souza, (2003) 3 SCC 232, wherein it was held:
"Chapter XVII containing Sections 138 to 142 was introduced in the Act by Act 66 of 1988 with the object of inculcating faith in the efficacy of banking operations and giving credibility to negotiable instruments in business transactions. These provisions were intended to discourage people from not honouring their commitments by way of payment through cheques. The court should lean in favour of an interpretation which serves the object of the statute. A post-dated cheque will lose its credibility and acceptability if its payment can be stopped routinely. The purpose of a post-dated cheque is to provide some accommodation to the drawer of the cheque. Therefore, it is all the more necessary that the drawer of the cheque should not be allowed to abuse the accommodation given to him by a creditor by way of acceptance of a post-dated cheque.
In view of Section 139, it has to be presumed that a cheque is issued in discharge of any debt or other liability. The presumption can be rebutted by adducing evidence and the burden of proof is on the person who wants to rebut the presumption. This presumption coupled with the object of Chapter XVII of the Act leads to the conclusion that by countermanding payment of a post-dated cheque, a party should not be allowed to get away from the penal provision of Section 138. A contrary view would render S. 138 a dead letter and will provide a handle to persons trying to avoid payment under legal obligations undertaken by them through their own acts which in other words can be said to be taking advantage of one's own wrong. ..."
15. Para 26 and 27 are being reproduced below-
"26. In light of these extracts, we are in agreement with the respondent-claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat (supra) may not be correct.
27. 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 rebuttable presumption under Section 139 is a device to prevent undue delay in the 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 or proof."
16. In the case of K.N. Beena v. Muniyappan and another, (2001) 8 SCC page 458, Court was of the view that shifting burden of proof on the complainant was wrong. Accused had to prove by leading cogent evidence that there was no debt or liability. The first respondent not having led any evidence could not be said to have discharged the burden. Para 6 and 7 of the judgment are being quoted below-
"6. In our view the impugned Judgment cannot be sustained at all. The Judgment erroneously proceeds on the basis that the burden of proving consideration for a dishonored cheque is on the complainant. It appears that the learned Judge had lost sight of Sections 118 and 139 of the Negotiable Instruments Act. Under Sections 118, unless the contrary was proved, it is to be presumed that the Negotiable Instrument (including a cheque) had been made or drawn for consideration. Under Section 139 the Court has to presume, unless the contrary was proved, that the holder of the cheque received the cheque for discharge, in whole or in part, of a debt or liability. Thus in complaints under Section 138, the Court has to presume that the cheque had been issued for a debt or liability. This presumption is rebutable. However the burden of proving that a cheque had not been issued for a debt or liability is on the accused. This Court in the case of Hiten P. Dalal vs. Bratindranath Banerjee reported in (2001) 6 S.C.C. 16 has also taken an identical view.
7.In this case admittedly the 1st Respondent has led no evidence except some formal evidence. The High Court appears to have proceeded on the basis that the denials/averments in his reply dated 21st May, 1993 were sufficient to shift the burden of proof onto the Appellant/Complainant to prove that the cheque was issued for a debt or liability. This is an entirely erroneous approach. The 1st Respondent had to prove in the trial, by leading cogent evidence, that there was no debt or liability. The 1st Respondent not having led any evidence could not be said to have discharged the burden cast on him. The 1st Respondent not having discharged the burden of proving that the cheque was not issued for a debt or liability, the conviction as awarded by the Magistrate was correct. The High Court erroneously set aside that conviction."
(emphasis supplied)
17. Mere denial in the notice was not found to be sufficient for shifting burden of proof. In this case, accused had not led any evidence.
18. In the case of Hiten P. Dalal v. Bratindranath Banerjee, (2001) 6 SCC page 16, Hon'ble Apex Court in para 22 held that Sections 138 and 139 require that the court shall presume the liability of the drawer of the cheques for the amounts for which the cheques are drawn and Courts are bound to raise this presumption.
19. Further in para 24, the Court held that in the case of a discretionary presumption the presumption if drawn may be rebutted by an explanation which might reasonably be true and which is consistent with the innocence of the accused but not in the case of presumption of law.
20. Para 22 and 24 of the judgment are being quoted below-
" 22. Because both Sections 138 and 139 require that the Court "shall presume" the liability of the drawer of the cheques for the amounts for which the cheques are drawn, as noted in State of Madras vs. A. Vaidyanatha Iyer AIR 1958 SC 61, it is obligatory on the Court to raise this presumption in every case where the factual basis for the raising of the presumption had been established. "It introduces an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the accused" (ibid). Such a presumption is a presumption of law, as distinguished from a presumption of fact which describes provisions by which the court "may presume" a certain state of affairs. Presumptions are rules of evidence and do not conflict with the presumption of innocence, because by the latter all that is meant is that the prosecution is obliged to prove the case against the accused beyond reasonable doubt. The obligation on the prosecution may be discharged with the help of presumptions of law or fact unless the accused adduces evidence showing the reasonable possibility of the non-existence of the presumed fact.
24. Judicial statements have differed as to the quantum of rebutting evidence required. In Kundan Lal Rallaram vs Custodian, Evacuee Property, Bombay AIR 1961 SC 1316, this Court held that the presumption of law under Section 118 of Negotiable Instruments Act could be rebutted, in certain circumstances, by a presumption of fact raised under Section 114 of the Evidence Act. The decision must be limited to the facts of that case. The more authoritative view has been laid down in the subsequent decision of the Constitution Bench in Dhanvantrai Balwantrai Desai vs State of Maharashtra AIR 1964 SC 575, where this Court reiterated the principle enunciated in State of Madras vs Vaidyanath Iyer (Supra) and clarified that the distinction between the two kinds of presumption lay not only in the mandate to the Court, but also in the nature of evidence required to rebut the two. In the case of a discretionary presumption the presumption if drawn may be rebutted by an explanation which "might reasonably be true and which is consistent with the innocence" of the accused. On the other hand in the case of a mandatory presumption "the burden resting on the accused person in such a case would not be as light as it is where a presumption is raised under S.114 of the Evidence Act and cannot be held to be discharged merely by reason of the fact that the explanation offered by the accused is reasonable and probable. It must further be shown that the explanation is a true one. The words 'unless the contrary is proved' which occur in this provision make it clear that the presumption has to be rebutted by 'proof' and not by a bare explanation which is merely plausible. A fact is said to be proved when its existence is directly established or when upon the material before it the Court finds its existence 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 cannot be said to be rebutted......"
21. In the above case also, accused had not entered the witness box. (In para 33).
22. Written argument have been submitted by accused-respondent.
23. It is contended therein that accused is living in Gujarat along with his wife and children and his children are getting education in Gujarat. Complainant is son-in-law of accused's real brother in law. As such the complainant and accused were taking care of petrol pump jointly. Accused would leave blank cheques with complainant for business purposes but he has misused two such cheques.
24. Submission is that whether cheque was issued for discharging the debt or liability is to be proved by the prosecution and no presumption can be made under Section 139 of N.I.Act. He has placed reliance in the case of Krishna Janardhan Bhat v. Dattatraya G. Hegde (2008) 4 Supreme Court Cases 54. In this case, trial court had convicted the accused, Sesions Judge dismissed the appeal and the High Court in revision has reversed the order. In para 25, the Court has observed that prosecution did not produce any books of accounts or any other proof to show that he got so much money from the Bank. He admittedly did not have any written document pertaining to the accused. He accepted that there was no witness to the transaction. Moreover, observations made in the above judgment have not been found correct by three Judge Bench in the case of Rangappa v. Sri Mohan, 2010 (11) SCC 441. Para 14 of the judgment is reproduced below-
"14. In light of these extracts, we are in agreement with the respondent-claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat (supra) may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable 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."
(emphasis provided)
25. In the case of P. Venugopal v. Madan P. Sarathi (2009) 1 Supreme Court Cases 492, appeal was dismissed and all the three courts below arrived at a concurrent finding that the complainant has been able to prove his case as such, the burden of proof stands shifted upon the appellant. Again a finding of fact was arrived at that the appellant had failed to discharge his burden. Thus, this case is of no help.
26. Agreement executed by accused has been assailed on the ground that there is difference of date in the statement under Section 200 Cr.P.C. and said agreement is forged paper. No such case was taken before court below as accused has not disowned the signature on these papers. It is admitted case that accused himself has signed it which has not been specifically denied by him. No suggestion of challenging notorial agreement which was attested by Premlal and Ashok Kumar has been given by accused and he does not disown signature on the said paper. Absence of registration of partnership firm merely makes it unable to sue or be sued. In the bank statement, details of amount have been given. Submission that according to prosecution case entire amount would go to more than 22 lacs and why he would accept the cheque for a lesser amount is speculative. Burden rests upon accused who does not discharge it. It has come that parties are closely related and petrol pump was allotted in favour of accused. Therefore, it was natural to seek help and to give financial assistance enabling the accused to start business, was also not unnatural conduct. After retirement money needs to be invested. A near relative needs help which was provided. Speculative questions or improbabilities do not answer the presumption raised under Section 139 of the Act.
27. In the case of K.Prakashan v. P.K. Surenderan (2008) 1 Supreme Court Cases 258, it was found that appellate court should not reverse the judgment of acquittal merely because the other view was possible. The judgment of the acquittal was not liable to be reversed by appellate court when another view was possible.
28. Complainant himself has appeared in witness-box. Prosecution has examined his father Shyam Narain and independent witnesses were also examined. Ashok Kumar testified under Section 200 Cr.P.C. while Premlal Srivastava under Section 254 Cr.P.C.. Therefore, the decision of Vijendra Singh v. Delhi 1997 ACC page 589 is not applicable as both witnesses have proved the documents. Since it was a transaction between close relatives, submission that why should he accept the cheque of less amount or against C.C. Limit is of no significance.
29. Case of Ritesh Chakravarti 2006 (12) SCC 321 does not deal with presumptions under Section 139 of the Act.
30. In the case at hand, it was proved by complainant, his father Shyam Narain, Ashok Kumar (202 Cr.P.C.) and Prem Lal (254 Cr.P.C.) that Om Prakash had signed both the deeds. It was not suggested to any witness that deeds do not contain the signature of Om Prakash accused. First deed written on Rs. 100/- stamp is in the hand writing of accused has not been disputed in cross-examination or in suggestion given to witnesses.
31. From the above discussions, it is manifest that under Sections 138 and 139 of the Act, it is incumbent upon the court to raise presumption and accused can rebut the same by leading evidence and then burden would shift to the complainant.
32. In the case in hand, accused has not entered the witness box nor has led any evidence in defence. Learned Magistrate while acquitting the accused had proceeded from reverse angle. Magistrate has started finding fault with the prosecution case instead of raising presumption under Section 139 of the Act. Accused does not deny his signatures on cheque. One Cheque has been dishonoured for the reason of insufficient funds and another cheque returned unpaid under the instructions of 'stop payment' received by Bank. Both grounds are covered under Section 138 of the Act. Despite notice, payment was not made, as such complainant had done his part. Consequently, presumption under Section 139 of the Act had to be raised. Learned Magistrate did not raise presumption as contemplated under Section 139 of the Act.
33. First reason given by the learned Magistrate is that date mentioned by complainant's father is different from the date mentioned in the complaint. Date of partnership deed is different from the dates mentioned in the criminal case filed, since dates were not clear, partnership deed becomes doubtful. Relevant part of the judgment is being reproduced below-
"...... इस प्रकार परिवादी साक्षीगण व परिवादपत्र में भिन्न-भिन्न तिथि प्रथम लिखित भागीदारी के सम्बन्ध में प्रस्तुत करने के कारण यह तथ्य स्पष्ट नहीं है कि प्रथम लिखित भागीदारी किस तिथि की है वास्तविकता में है I जहाँ द्वितीय पार्टनरशिप डीड का प्रश्न है वह प्रथम लिखित भागीदारी जो तय हुई थी इसी का पार्टनरशिप डीड है जो नोटरी द्वारा प्रमाणित है और इस प्रकार जब कि प्रथम लिखित भागीदारी की तिथि ही स्पष्ट नहीं है तो उस पर आधारित द्वितीय पार्टनरशिप डीड भी स्वयं ही संदिग्ध हो जाती है I ........."
34. She further scraps the prosecution case by saying that petrol pump was allowed in the name of accused. Without informing company how can partnership be settled and same is not legal. Another reason given by Magistrate is that signature of accused alone and not that of complainant or his father are on the first note executed on Rs. 100/- stamp. No reason has been assigned by complainant or witness for this omission. Observation made in this regard is being quoted below-
"... इसके अतिरिक्त प्रथम लिखित भागीदारी पर सिर्फ मुल्जिम ओम प्रकाश शुक्ला के ही हस्ताक्षर है इसपर न तो वादी के हस्ताक्षर है न ही उसके पिता के हस्ताक्षर हैं. I परन्तु वादी अथवा उसके पिता के हस्ताक्षर क्यों नहीं है इसका कोई कारण परिवादी अथवा उसके साक्षियों द्वारा स्पष्ट नहीं किया गया I जब कि भागीदारी बिना सभी भागीदारों के हस्ताक्षर के माननीय नहीं है विशेष तौर पर तब जब कि मुल्जिम द्वारा अपने हस्ताक्षर को नकारते हुए फर्जी होना कहा गया हो I "
35. It has come on record that first note was not partnership deed but it was an acknowledgment executed on a stamp paper of Rs. 100/- on 10.2.2003. Thus entering into partnership by the first note was not acceptable to the Magistrate. So far as second deed is concerned, learned Magistrate has considered affidavit, given by one Om Prakash that he has wrongly signed it, deed has not been written in his presence nor has he signed it to disbelieve it. Moreover, complainant himself has not proved the partnership deed rather his father has proved. It has come on record that complainant and father both were examined by the Magistrate. Learned Magistrate forgot that these things were not necessary for a partnership, although same was duly proved.
36. In para 5, learned Magistrate has held that partnership deed was not proved which is the basis of the complaint, as such the basis for issuing cheque to accused has not been proved. Para 5 of the judgment is being reproduced below-
" ........ इस प्रकार उपरोक्त समस्त तथ्यात्मक विश्लेषण से चूँकि न तो परिवादी द्वारा वर्णित दोनों पार्टनरशिप डीड की न तो तारीख निश्चित रूप से प्रमाणित की गयी और न ही भागीदारी प्रलेख ही सही तरीके से प्रमाणित किया गया अतः दोनों भागीदारी प्रलेख प्रमाणित न होने के कारण परिवादी का जो परिवाद का आधार है जिसके आधार पर परिवादी द्वारा मुल्जिम पर ऋण व दायित्व का अधिरोपण किया गया है चूँकि वह ऋण व दायित्व ही प्रमाणित नहीं पाया जा रहा है I अतः मुल्जिम द्वारा परिवादी के पक्ष में चेक निर्गत किया जाने का कोई पर्याप्त आधार प्रमाणित नहीं पाया जाता I "
37. Learned Magistrate does mention that signatures on cheque has been admitted by accused. Magistrate refers to the case of the accused that complainant had run away with the banker cheque on 15.2.2006 when accused had gone to Gujarat. Another reason given is that complainant's father himself was Assistant Manager as such he should have known that he was accepting cheque of Rs. 16,00000/- while C.C. Limit was Rs. 6,00000/- for which no explanation has been given by complainant and his father. Learned Magistrate has held that complainant did not produce any document to show that his father had received Rs. 18,00000/- after his retirement' and it is not clear as to whether he had sufficient funds or not, as such it could not be clarified whether amount was available in the cash and was given after withdrawing from Bank. Learned Magistrate refers to some more contradictions in the statements of complainant and his father and states that complainant should have filed evidence to show that payment was made through bank draft and he did not explain as to why he had accepted a cheque of Rs. 16,00000/-. In the complaint, payment is said to be made through UCO Bank, Allahabad. According to Magistrate, there are certain contradictions in their statements as such same are not liable to be believed.
38. In para 9, learned Magistrate has observed that the partnership deed was made but why date has not been mentioned ? Complainant did not produce any evidence to prove partnership. According to Magistrate, it is not clear who has made signatures over cheque. Complainant has not led any documentary evidence to show the entire amount received on retirement and that same was deposited in the UCO Bank, Allahabad. With these observations, learned Magistrate came to the conclusion that complainant has failed to prove his case and she acquitted the accused.
39. Was Magistrate deciding the validity of partnership ? Was it open to her to non-suit complainant because source of money was not allegedly proved ?
40. From the above discussions, it is apparent that learned Magistrate has relied upon non-existent contradictions and non-suited the complainant therefor. She doubted the genuineness of the partnership deed while accepting signature of accused thereon. She also doubted the complainant's version on the ground that he has failed to produce documentary evidence that his father actually received Rs. 20,00000/- on retirement as Assistant Manager. Magistrate also doubted the case on the ground that complainant did not pass any resolution to dissolve partnership in 2005 when it was agreed to work till life and one of the witness of the partnership deed has not proved the partnership ? What learned Magistrate has conveniently chosen to ignore is that Prem Lal Srivastava, Advocate, another witness of the partnership deed had proved the partnership in his statement under Section 254 Cr.P.C. Ashok Kumar (whose affidavit filed subsequently relied on by trial court) had proved the partnership deed in his statement under Section 202 Cr.P.C.
41. It is apparent from the order-sheets that complainant wanted to file passbook to show that money was paid from his account but his application was not allowed vide order dated 3.9.2008. Was it open for the Magistrate to consider validity of the partnership deed, genuineness of the retiral dues and payment made to accused ? Both the witnesses Ashok Kumar and Prem Lal Srivastava had proved the deed. Ashok Kumar under Section 202 Cr.P.C. while Prem Lal under Section 254 Cr.P.C. Complainant and Shyam Narain both were examined by prosecution.
42. Magistrate has failed to raise, the legal presumption when signatures on cheques have been admitted and they have been dishonoured. Despite notice, payment was not made. Accused has not appeared in the witness box nor has led any evidence in defence. Even in these circumstances, presumption required under Sections 138 and 139 of N.I.Act have not been raised. Learned Magistrate had proceeded to decide the case from wrong angle. Magistrate has failed to take into account the legal provisions and had erroneously shifted the burden upon complainant. In the absence of any evidence in defence, Magistrate ought to have believed the complaint case in view of Sections 138/139 of the Act.
43. It was pointed out that on 5.9.2009, transfer application was filed by complainant seeking transfer from the court of Chief Judicial Magistrate, Sultanpur. It is also apparent from record that written arguments were filed citing decision of Hon'ble Apex Court given in the case of K.M. Beena (supra) MMTC Ltd. v. Medchl Chemicals & Pharma (P) Ltd. (2002) (44) SCC 369 but Magistrate has not referred to them in her judgment.
44. When ingredients of Section 138 namely (a) accused drew the cheque on an account maintained by him (b) cheque issued for the discharge of debt/liability (c) cheques were presented within six months (d) cheques returned unpaid for insufficiency of funds and stop payment (e) notice was given but no payment was made, stood proved and defence having not led any evidence, conviction should have been recorded.
45. From the above discussion, it is established that prosecution had proved its case beyond reasonable shadow of doubt. Judgment is absolutely perverse and contrary to law. Court does not want to say much against trial court. Consequently, this appeal deserves to be allowed.
46. Appeal is allowed. Judgment and order dated 22.9.2009 is set aside. Respondent is convicted under Section 138 of the Negotiable Instruments Act and sentenced to a period of one year simple imprisonment in addition to fine of Rs. 38,00000/- (thirty eight lacs) out of which a sum of Rs. 35,00000/- (thirty five lacs) will be paid as compensation to the complainant-appellant.
47. Respondent is directed to surrender before Chief Judicial Magistrate, Sultanpur, within a month, failing which non-bailable warrant will be issued by Chief Judicial Magistrate to secure his presence.
48. Record will be remitted forthwith.
Order Date :- 28.06.2016 VB/-