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CHEQUE BOUNS CASE

there must be legally enforceable debt , otherwise, no cheque bounce case should be maintainable

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

Madurai High Court

Madurai High Court (Photo credit: Wikipedia)

DATED: 29/03/2012

CORAM
THE HONOURABLE MR.JUSTICE P.R.SHIVAKUMAR

CRL.R.C.(MD) No.764 of 2010
Muthukumaran ..Petitioner

Vs

Periyasamy ..Respondent
Prayer

Criminal Revision case filed under Section 397 of Cr.P.C. to set aside
the order of conviction and sentence rendered by the trial court in S.T.C.No.487
of 2008 and confirmed by order, dated 21.09.2010, of the appellate court i.e.
Fast Track Court No.II, Madurai in C.A.No.43 of 2010.

!For Petitioner … Mr.N.Ananthapadmanaban
^For Respondent … Mr.Saravanakumar for R1
Mr.P.Kandasamy, G.A. (Crl.Side) for R2
:ORDER

This Criminal Revision Case has been preferred against the judgment of the
learned Additional District and Sessions Judge (Fast Track Court No.2), Madurai
dated 21.09.2010 pronounced in C.A.No.43/2010. By the said judgment, the
judgment of the trial court, namely learned District Munsif cum Judicial
Magistrate, Vadipatti dated 07.05.2010 made in S.T.C.No.487/2008 was confirmed.

2. The petitioner herein was prosecuted by the first respondent herein for
an offence punishable under section 138 of the Negotiable Instruments Act, 1881,
based on the allegation that the revision petitioner issued a cheque dated
07.11.2008 bearing No.936888 drawn on State Bank of Hyderabad, Madurai for a sum
of Rs.4,00,000/- in discharge of a debt due to the first respondent; that the
cheque, when presented through ICICI Bank, Sholavandhan, the same was
dishonoured on 10.11.2008 pursuant to which a statutory notice was issued under
section 138 of the Negotiable Instruments Act, 1881 on 20.11.2008 calling upon
the revision petitioner/accused to make payment of the said amount and that the
revision petitioner, who received the said notice on 26.11.2008, issued a reply
dated 04.12.2008 containing false averments without complying with the demand
made in the notice.

3. The private complaint preferred by the first respondent was taken on
file by the learned District Munsif cum Judicial Magistrae, Vadipatti after
following the procedure prescribed for taking cognizance of offences on
complaint and numbered it as S.T.C.No.487/2008. On receipt of summons, the
petitioner herein/accused entered appearance and denied the charge. Learned
District Munsif cum Judicial Magistrate conducted trial, in which the first
respondent herein/complainant figured as the sole witness (PW-1) on his side and
produced seven documents as Exs.P1 to P7. After the completion of evidence on
the side of the complainant, the revision petitioner herein/accused was
questioned under section 313(1)(b). Three witnesses including the revision
petitioner/accused were examined as DWs.1 to 3 and no document was marked on his
side. The learned District Munsif cum Judicial Magistrate, Vadipatti heard the
arguments advanced on both side and considered the evidence. Upon such a
consideration, the learned District Munsif cum Judicial Magistrate by judgment
dated 07.05.2010, found the revision petitioner herein/accused guilty of an
offence punishable under section 138 of the Negotiable Instruments Act, 1881,
convicted him for the said offence and sentenced him to undergo simple
imprisonment for a period of one year and to pay a fine of Rs.1,000/- and
imposed a default sentence of three months simple imprisonment in case of
failure to pay the fine amount.

4. As against the said judgment of the trial court, the revision
petitioner/accused preferred an appeal before the Sessions Court, which was
taken on file as C.A.No.43/2010. The same came to be made over to the Additional
District and Sessions Judge (Fast Track Court No.2), Madurai and the said judge,
after hearing, dismissed the appeal confirming the judgment of the trial court
in respect of conviction as well as sentence. Questioning the correctness and
legality of the said judgment of the appellate court, the revision
petitioner/accused has preferred the present criminal revision case on various
grounds set out in the grounds of revision.

5. Advancing arguments on behalf of the revision petitioner, the learned
counsel has submitted that both the courts below failed to apply the correct
legal proposition regarding the scope of presumption under section 138 of the
Negotiable Instruments Act, 1881; that though there can be a presumption that
the drawee or holder received the cheque for the discharge of any debt or other
liability, there cannot be any presumption regarding existence of a legally
recoverable debt; that the complainant is bound to prove the existence of such
legally recoverable debt or liability and that in the event of non-establishment
of the existence of a legally recoverable debt, the presumption contemplated
under section 139 of the Negotiable Instruments Act, 1881 does not get
attracted.

6. The learned counsel for the revision petitioner/accused has contended
further that since the first respondent/complainant is only an agriculturist,
without any other source of income, the trial court and the appellate court
ought to have accepted the plea of the revision petitioner/accused that the
cheque given by the revision petitioner/accused to someone else in respect of
some other transaction, has been misused by the first respondent/complainant;
that the courts below failed to note that the burden of proof required on the
part of the accused facing trial for an offence under section 138 of the
Negotiable Instruments Act, 1881 is not proof beyond reasonable doubt and the
same can be done on preponderance of probabilities and that the courts below
ought to have held that the admissions elicited from PW-1 and the
improbabilities found in the evidence on the side of the complainant alone are
enough for the revision petitioner/accused to rebut the presumption and that
even beyond that the petitioner has also adduced evidence through DWs.1 to 4. It
is the further contention of the learned counsel for the petitioner that the
courts below ought not have forgotten that the general presumption of innocence
gets revived once the presumption under section 139 of the Negotiable
Instruments Act, 1881 is rebutted by preponderance of probabilities and
thereafter the burden shall be solely on the complainant to prove the charge
beyond reasonable doubt.

7. Per contra, learned counsel for the first respondent/complainant would
contend that the grounds alleged are raised only for the sake of raising some
grounds for challenging the well-considered concurrent findings of the courts
below; that no defect or infirmity, either in the appreciation of evidence or in
the application of law could be found in the judgments of the courts below and
that hence the criminal revision case should be dismissed.

8. The dishonoured cheque, based on which the complaint was preferred, has
been marked as Ex.P1. The bank challan evidencing the presentation of the cheque
for collection and the intimation of the bank returning the cheque without
payment stating “funds insufficient and A/c inoperative”, as reasons for
dishonour, has been marked as Exs.P2 and P3. A copy of the legal notice issued
by the first respondent/complainant to the revision petitioner/accused
intimating the dishonour of the cheque and calling upon him to make payment of
the cheque amount, the postal receipt evidencing the fact that the said notice
was sent through registered post and the postal acknowledgment evidencing
service of the said notice on the revision petitioner/accused have been produced
and marked as Exs.P4 to P6 respectively. The reply notice sent by the revision
petitioner through his advocate has been marked as Ex.P7.

9. Before the courts below, a contention came to be raised that the
complaint was premature and hence the complaint deserved to be rejected.
According to the said contention, statutory notice under section 138 of the
Negotiable Instruments Act, 1881 was served on the revision petitioner/accused
on 26.l1.2008, but before the expiry of a period of 15 days thereafter the
complaint came to be filed and hence the complaint should have been rejected as
premature. Of course the complaint came to be filed on the 15th day after
service of notice on the revision petitioner/accused. But the same was re-
presented only on 17.12.2008 after having been returned. Though the first
presentation of the complaint would be on the last day of the period of 15 days
after the service of notice, since the same was returned and it was re-presented
subsequently, by which time the clear period of 15 days had elapsed, we cannot
accept the contention that the complaint is premature. It should also be noticed
that the 15 days period has been prescribed for enabling the drawer of the
cheque to make arrangement for the payment of the cheque amount. During the said
period of 15 days, the drawer of the cheque may either pay the cheque amount or
make arrangements for the payment of the cheque amount, if the cheque is
presented again for encashment and request the payee/holder to re-present the
cheque for encashment. If the drawer of the cheque fails to do so and on the
other hand, expresses his intention not to make payment of the cheque amount by
issuing a reply notice, then it shall be unreasonable and unethical to ask the
payee/holder to again wait for the expiry of 15 days. In this case, since the
revision petitioner/accused has chosen to send a reply under Ex.P7 denying his
liability and refusing to comply with the demand made in the notice, it cannot
be contended that the complaint has been prematurely filed. The said contention
was rightly rejected by the courts below and this court also does not find any
ground to interfere with such a finding.

10. Though the revision petitioner/accused had taken a plea in the trial
court that the cheque was presented through ICICI Bank, Sholavandhan in order to
prefer the complaint in the court of learned District Munsif cum Judicial
Magistrate, Vadipatti, learned counsel for the revision petitioner has conceded
before this court that the question of jurisdiction does not arise in this case,
because the revision petitioner resides at Sholavandhan within the jurisdiction
of the learned District Munsif cum Judicial Magistrate, Vadipatti and that hence
the complaint filed on the file of the learned District Munsif cum Judicial
Magistrate, Vadipatti could not be challenged on the ground of want of
jurisdiction or malafide preference of jurisdiction.

11. Ex.P1-cheque is alleged to have been issued by the revision
petitioner/accused in favour of the first respondent/complainant on 07.11.2008
for the discharge of an alleged debt, namely a sum of Rs.4,00,000/- borrowed by
the revision petitioner/accused from the first respondent. Of course it is not
in dispute that Ex.P1-cheque bearing cheque No.936888 pertains to the bank
account maintained by the revision petitioner/accused with his banker, namely
State Bank of Hyderabad, Madurai-1. Though the first respondent/complainant
would have stated that the revision petitioner/accused borrowed a sum of
Rs.4,00,000/- from the first respondent/complainant and for the discharge of the
said debt Ex.P1-cheque was issued, the revision petitioner/accused has taken a
definite stand that there was no transaction between the revision
petitioner/accused and the first respondent/complainant. On the other hand, it
is the contention of the revision petitioner/accused that he had dealings with
one Bhaskar, with whom he had entrusted blank cheques as security; that the said
Bhaskar and one Periya Karuppan, the father-in-law of the complainant, filled up
one of the said cheques in the name of the complainant and the complainant has
been used as a stooge in their hands for prosecuting the revision
petitioner/accused. In this regard, learned counsel for the first
respondent/complainant would submit that the very fact that the revision
petitioner/accused would state the relationship of the first respondent and
Periyakaruppan to be son-in-law and father-in-law, would falsify the stand of
the revision petitioner/accused that the revision petitioner/accused did not
know who the first respondent/complainant was before the receipt of the legal
notice. In this regard, learned counsel for the revision petitioner/accused has
made it clear that right from the beginning the stand of the revision
petitioner/accused happened to be consistent, as he had taken a stand in the
reply notice that the revision petitioner/accused never borrowed any amount,
much less a sum of Rs.4,00,000/- from the first respondent/complainant and he
never issued Ex.P1-cheque to him. It was also stated in the reply notice in
clear terms that the revision petitioner/accused did not know the first
respondent and he had not even seen him and that there was no chance or
possibility for the revision petitioner to have borrowed any amount from the
first respondent/complainant. On the other hand, in the reply notice itself he
had stated that one Bhaskar, a police constable had lent him a sum of
Rs.1,00,000/- on 29.12.2006, for which he got three unfilled signed cheques and
three unfilled signed pro-notes from the revision petitioner/accused; that one
Ravichandran of Kallanai, a friend of the revision petitioner/accused had
borrowed a sum of Rs.5,00,000/- from the said Bhaskar and one Papa @
Periyakaruppan, for which borrowal, the revision petitioner/accused had given
three unfilled signed cheques and an unfilled signed pro-note as guarantor for
the repayment of the same; that the said Ravichandran had discharged the above
said loan, but the lendor, namely Bhaskar, had not returned the revision
petitioner’s cheques and pro-note given as security for the loan of
Ravichandran; that when a demand was made with Bhaskar he informed that he had
misplaced the cheques and pro-note and that after the receipt of legal notice,
the revision petitioner/accused came to know that the first
respondent/complainant has been used as a stooge by the said Bhaskar and Papa @
Periyakaruppan.

12. Section 139 of the Negotiable Instruments Act, 1881 contemplates a
presumption in favour of the payee/holder that the cheque was obtained for the
discharge of a debt or other liability. There are earlier decisions to the
effect that such presumption will not be enlarged by including a presumption
that there was a legally enforceable debt or other liability in discharge of
which the cheque was issued. The learned counsel for the first
respondent/complainant would contend that if the presumption does not include a
presumption regarding the existence of a legally enforceable debt or other
liability in discharge of which the cheque was issued, then the provision found
in section 139 of the Negotiable Instruments Act, 1881 would almost become a
dead letter and that the same was the reason that made a larger bench of the
Hon’ble Supreme Court to hold that the presumption mandated by section 139 of
the Negotiable Instruments Act, 1881 includes a presumption that there exists a
legally enforceable debt or other liability in Rangappa v. Sri Mohan reported in
(2010) 11 SCC 441. Learned counsel for the first respondent/complainant relied
on the observations of the Hon’ble Supreme Court in Goaplast (P) Ltd. v. Chico
Ursula D’Souza reported in (2003) 3 SCC 232, wherein it has been observed as
follows:
” 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 the post-dated
cheque, a party should not be allowed to get away from the penal provision of
Section 138 of the Act. A contrary view would render Section 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.”

13. However, the learned counsel for the revision petitioner/accused drew
the attention of the court to the observations made by another Division Bench of
the Hon’ble Supreme Court in Krishna Janardhan Bhat v. Dattatraya G. Hegde
reported in (2008) 4 SCC 54, wherein the following observations were made:
” 29. Section 138 of the Act has three ingredients viz.:
(i) that there is a legally enforceable debt;
(ii) that the cheque was drawn from the account of bank for discharge in
whole or in part of any debt or other liability which presupposes a legally
enforceable debt; and
(iii) that the cheque so issued had been returned due to insufficiency of
funds.
30. The proviso appended to the said section provides for compliance with
legal requirements before a complaint petition can be acted upon by a court of
law. Section 139 of the Act merely raises a presumption in regard to the second
aspect of the matter. Existence of legally recoverable debt is not a matter of
presumption under section 139 of the Act. It merely raises a presumption in
favour of a holder of the cheque that the same has been issued for discharge of
any debt or other liability.
31. The courts below, as noticed hereinbefore, proceeded on the basis that
Section 139 raises a presumption in regard to existence of a debt also. The
courts below, in our opinion, committed a serious error in proceeding on the
basis that for proving the defence the accused is required to step into the
witness box and unless he does so he would not be discharging his burden. Such
an approach on the part of the courts, we feel, is not correct.”

14. Clear observations have been made by a larger bench of the Hon’ble
Supreme Court in Rangappa v. Sri Mohan reported in (2010) 11 SCC 441 cited
supra, which will provide a fitting answer to the above said contention raised
by the learned counsel for the revision petitioner/accused. In paragraph 26 of
the said judgment, their Lordships of the Hon’ble Supreme Court has made the
following observations:
” 26. In the 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 may not be correct.”

As such, it can be said that it is now well settled that the presumption
mandated by Section 139 of the Negotiable Instruments Act, 1881 includes the
presumption of existence of a legally enforceable debt or other liability.
Otherwise, as rightly contended by the learned counsel for the first
respondent/complainant, the presumption contemplated in Section 139 of the
Negotiable Instruments Act, 1881 will become a dead letter.

15. But, at the same time, it should not be forgotten that the presumption
contemplated under section 139 of the Negotiable Instruments Act, 1881, is a
rebuttal presumption and that in every criminal case unless and until the
accused is proved to be guilty of the offence either by leading positive
evidence or by evidence in the form of presumptions, shall be presumed to be
innocent. While considering the scope of the general presumption of innocence
and the presumption contemplated under section 139 of the Negotiable Instruments
Act, 1881, their Lordships of the Hon’ble Supreme Court, have made it clear that
the presumption under section 139 of the Negotiable Instruments Act, 1881, is a
rebuttable presumption and when it is rebutted by the accused, the burden again
shifts on the prosecution/complainant to prove the offence beyond reasonable
doubt. Regarding the scope of proof needed for rebutting the presumption under
section 139 of the Negotiable Instruments Act, 1881, it has been again
reiterated that it is not comparable with the proof of guilt needed on the part
of the prosecution to prove the commission of the offence, which shall be beyond
reasonable doubt and it shall be enough for the accused to rebut the presumption
by preponderance of probabilities.

16. A further explanation has also been given in a number of judgments to
the effect that for rebutting the presumption, it is not necessary for the
accused to get into the witness box or examine any witness or produce any
document. On the other hand, if the accused is able to show that the materials
available in the evidence adduced on the side of the prosecution/complainant and
by the answers elicited from the prosecution witnesses on the side of the
complainant would improbablise the case of the complainant and such degree of
proof shall be enough to rebut the presumption and shift and recast the burden
of proving the guilt of the accused on the prosecution/complainant. In this
backdrop of legal principle, we have to consider, whether the petitioner has
succeeded in rebutting the presumption and if so, whether the
respondent/complainant has proved the existence of legally recoverable debt as
claimed by him beyond reasonable doubt.

17. Learned counsel for the revision petitioner/accused has pointed out
several improbabilities in the case of the complainant, which are also revealed
in the evidence adduced on the side of the respondent/complainant and submitted
that the same alone shall be enough to raise a strong suspicion as to the
complainant’s case, which shall be enough to rebut the presumption under section
139 of the Negotiable Instruments Act, 1881 by preponderance of probabilities.
Learned counsel for the petitioner, besides relying on the discrepancies found
in the evidence adduced on the side of the prosecution, has also pointed out the
fact that the revision petitioner/accused examined three witnesses on his side
and by such evidence also, he was able to prove the improbabilities of the
complainant’s case. The further contention of the learned counsel for the
revision petitioner/accused is that when the case of the complainant/prosecution
is inconsistent and oscillating at various points, whereas the case of the
accused is consistent, it must be held that the prosecution failed to prove the
charge and the accused is entitled to acquittal.

18. In support of the said contention, the learned counsel for the
revision petitioner/accused relied on a judgment of the Hon’ble Supreme Court in
Krishna Janardhan Bhat v. Dattatraya G.Hegde reported in (2008) 1 MLJ (Crl) 1149
(SC). Of course it is true that in this judgment, a Division Bench of the
Hon’ble Supreme Court held that the presumption contemplated under section 139
of the Negotiable Instruments Act, 1881, does not include a presumption
regarding existence of a legally recoverable debt and on the other hand, it
merely raises a presumption in favour of a holder of the cheque that the same
has been issued for discharge of any debt or other liability. The said view was
held to be incorrect by a larger Bench of the Hon’ble Supreme Court in Rangappa
v. Sri Mohan reported in (2010) 11 SCC 441 discussed supra. But, excepting the
question of the scope of the presumption regarding the existence of a legally
recoverable debt or other liability in discharge of which the cheque was issued,
all other observations made in Krishna Janardhan Bhat v. Dattatraya G.Hegde’s
case have been quoted with approval by the larger Bench of the Supreme Court.
In Krishna Janardhan Bhat v. Dattatraya G.Hegde’s case, the Hon’ble Supreme
Court has held that the trial court and the appellate court therein committed
serious error in proceeding on the basis that for proving the defence, the
accused was required to step into the witness box and unless he does so he would
not be discharging his burden and that such an approach on the part of the court
was not correct. Clear observation has also been made to the effect that for
discharging burden of proof placed upon the accused under a statute, he need not
examine himself; that he may discharge his burden on the basis of the materials
already brought on record and that the standard of proof on the part of an
accused and that of the prosecution in criminal cases are different meaning that
the standard of proof required from the accused is on preponderance of
probabilities, whereas the proof required on the part of the prosecution in a
criminal case is proof beyond reasonable doubt. The following are the
observations of the Hon’ble Supreme Court:
“25. Furthermore, whereas prosecution must prove the guilt of the accused
beyond all reasonable doubt, the standard of proof so as to prove a defence on
the part of an accused is preponderance of probabilities. Inference of
preponderance of probabilities can be drawn not only from the materials brought
on records by the parties but also by reference to the circumstances upon which
he relies.
26. A statutory presumption has an evidentiary value. The question as to
whether the presumption stood rebutted or not, must, therefore, be determined
keeping in view the other evidences on record. For the said purpose, stepping
into the witness box by the appellant is not imperative…….”

As pointed out supra, the said view expressed by the Division Bench of the
Hon’ble Supreme Court has been quoted with approval by the larger Bench of the
Hon’ble Supreme Court in Rangappa v. Sri Mohan reported in (2010) 11 SCC 441.

19. In this case, the learned counsel for the revision petitioner/accused,
has pointed out various imponderables and improbabilities found in the case of
the complainant. First of all, the learned counsel for the revision
petitioner/accused has pointed out the fact that the case of the complainant is
not consistent and his stand was oscillating from time to time as he changed his
version according to the exigencies of the circumstances. Ex.P4 is the copy of
the statutory notice issued to the revision petitioner/accused by the
respondent/complainant through his counsel. In Ex.P4-notice, it had been stated
that the revision petitioner/accused borrowed a sum of Rs.4,00,000/- from the
respondent/complainant and in order to discharge the said liability, he issued a
cheque bearing No.936888 dated 07.11.2008 drawn on State Bank of Hyderabad, West
Perumal Maistry Street Branch, Madurai and that when the cheque was presented
for collection, it was returned unpaid with an endorsement ‘insufficient fund
and A/c inoperative’. It is pertinent to note that in the said notice, the
respondent/complainant had not stated the date on which the revision
petitioner/accused borrowed the said amount and the date on which the cheque was
issued. It has not even been stated as to whether the cheque was issued on the
date of borrowal or on a subsequent day.

20. On receipt of the said notice, the revision petitioner/accused issued
a reply under Ex.P7. In Ex.P7, the revision petitioner has stated in unambiguous
terms that he never borrowed any amount from the respondent/complainant and he
did not issue cheque No.936888 dated 07.11.2008 to the respondent/complainant.
In addition, the revision petitioner/accused has also stated in the reply notice
that there was no chance or possibility for him to borrow any amount from the
respondent/complainant and that there was no possibility for him to issue a
cheque on 07.11.2008. In fact in paragraphs 3 and 4 of the reply notice, the
revision petitioner/accused has narrated the facts of his borrowing an amount
from one Baskar, the borrowal of one Ravichandran, a friend of the revision
petitioner/accused from Baskar and Pappa @ Periakaruppan and the discharge of
the said loan extended to Ravichandran. Besides reciting the same, he has also
made an averment to the effect that when the return of the signed and unfilled
cheques and pronotes were sought for, the said Baskar informed that he had
misplaced them. Reciting all those facts, the revision petitioner/accused had
stated in his reply notice that he apprehended misuse of the cheques by the said
Baskar and Pappa @ Periakaruppan and issuance of the notice through the
respondent/complainant. When such is the case, naturally, the complainant is
expected to state the details of the borrowal, namely the date of borrowal and
the fact whether the cheque was issued on the date of borrowal or subsequently.
In the complaint also, the respondent/complainant simply reproduced what had
been stated in Ex.P4-notice, without stating whether the cheque was issued on
the date of borrowal or subsequently. In the proof affidavit accepted as his
evidence-in-chief also, the respondent/complainant has stated that the revision
petitioner/accused borrowed a sum of Rs.4,00,000/- from him at his residence and
issued the cheque dated 07.11.2008. The said statement contained in a single
sentence, is capable of conveying a meaning that the cheque was issued on the
date of borrowal itself. Nowhere in the notice, complaint or the proof
affidavit, the respondent/complainant has stated that he had lent the amount
without any supporting document at the first instance and subsequently, when
demand for payment was made, the revision petitioner/accused issued the cheque
in question, namely Ex.P1. However, during cross-examination, PW.1 would state
that the cheque was handed over to him by the revision petitioner/accused on
07.11.2008.

21. It has been admitted by PW.1 that the signature found in Ex.P1-cheque
is that of Muthukumaran, the revision petitioner/accused and the other
particulars written in the cheque are not in the handwriting of the revision
petitioner/accused. However PW.1 would also state that a person, who came along
with the revision petitioner/accused, wrote the other particulars in the cheque
and the revision petitioner/accused put his signature using a different pen.
Though the revision petitioner/accused would have taken a stand that there was
no transaction between the respondent/complainant and the revision
petitioner/accused and the signed blank cheques given to one Baskar and Pappa @
Periakaruppan seems to have been filled up in the name of the
respondent/complainant and thus the case has been foisted against the revision
petitioner/accused, the evidence of the respondent/complainant in this regard is
some what evasive. He would state that on prior occasions he did not have any
transaction with the revision petitioner/accused. He would also admit that the
above said Pappa @ Periakaruppan is none other than his father-in-law and he got
acquainted with the revision petitioner/accused only through his father-in-law,
namely the above said Pappa @ Periakaruppan. However, he would plead ignorance
as to whether Baskar and Pappa @ Periakaruppan were doing money lending
business. He would also state that neither Baskar nor Ravichandran, the friend
of the petitioner/accused was known to him.

22. Apart from the respondent/complainant, who figured as the sole witness
(PW.1) on his side, no other witness has been examined in support of his case.
On the other hand, besides examining himself as DW.1, the revision
petitioner/accused has examined two other witnesses as DWs.2 and 3. DW.2 is the
Manager of ICICI Bank, Vadipatti branch. The said witness was examined only to
show that in order to choose the jurisdiction of Vadipatti Judicial Magistrate,
the cheque came to be deposited for collection through ICICI Bank, Vadipatti.
But, as pointed out supra, the revision petitioner/accused has given up the said
plea as the said plea cannot be sustained because even otherwise the learned
Judicial Magistrate, Vadipatti has jurisdiction since the petitioner/accused was
residing within the jurisdiction of the said court. As such, no importance can
be attached to the evidence of DW.2.

23. One Prathaban, has been examined as DW.3. He speaks about the loan
transaction between Baskar and the revision petitioner/accused. According to his
version, the revision petitioner/accused borrowed a sum of Rs.1,00,000/- from
Baskar and gave an unfilled, but signed cheque and an unfilled but signed
promissory note to the said Baskar. He has also stated that in the unfilled
promissory note he also affixed his signature as a witness. It is the further
evidence of DW.3 that the said borrowal was made on 29.12.2006 and the said
Baskar, after deducting a sum of Rs.10,000/- as interest, paid only a sum of
Rs.90,000/- to the revision petitioner/accused. It is also his statement that
the said Baskar did not return the promissory note and the cheque obtained from
the revision petitioner/accused. Though the evidence of DW.3 is confined to the
alleged loan transaction between Baskar and the revision petitioner/accused, for
which a blank cheque and a blank promissory note were issued, his evidence is
not helpful to prove the revision petitioner’s case that one Ravichandran
borrowed a sum of Rs.4,00,000/- from Baskar and Pappa @ Periakaruppan, for which
also the revision petitioner gave three unfilled but signed promissory notes and
three unfilled but signed blank cheques as guarantor for the repayment of the
same. Even, if the evidence of DW.3 in this regard is disregarded, as rightly
contended by the learned counsel for the revision petitioner/accused, the degree
of proof needed on the part of the revision petitioner/accused to rebut the
presumption under section 139 of the Negotiable Instruments Act, 1881 is not by
proof beyond reasonable doubt and it is only on preponderance of probabilities.
Such a proof can be made not only by positive evidence adduced on the side of
the accused, but also by eliciting admissions from the prosecution witnesses and
by pointing out the improbabilities of the prosecution case. Once it is done,
the reverse burden is cast on the prosecution/complainant and the proof required
from the complainant becomes one of proof beyond reasonable doubt.

24. In this case, as pointed out supra, there are many imponderables and
improbabilities in the prosecution case. First of all, the
respondent/complainant did not state when the amount was lent and whether the
cheque was issued on the date of lending itself or on a subsequent day. The
statutory notice (Ex.P4) simply states that the revision petitioner/accused
borrowed a sum of Rs.4,00,000/- from the respondent/complainant and issued a
cheque bearing cheque No.936888 dated 07.11.2008 drawn on State Bank of
Hyderabad for the discharge of the said liability. Similar is the case of the
contents of the complaint. In Ex.P7-reply notice, the revision
petitioner/accused has taken a definite stand that he did not know the
respondent/complainant and he never borrowed any amount from the
respondent/complainant, much less a sum of Rs.4,00,000/- on 07.11.2008; that one
of the blank signed cheques issued in favour of Baskar and Pappa @
Periakaruppan, could have been misused by filling it in the name of the
respondent/complainant and that the respondent/complainant issued the notice, as
a stooge in the hands of the above said persons.

25. An attempt has been made on the part of the respondent/complainant to
show that the very fact that the revision petitioner/accused admits that Pappa @
Periakaruppan is the father-in-law of the respondent/complainant, makes his case
that the respondent/complainant got acquaintance with the revision
petitioner/accused on being introduced by his father-in-law Pappa @
Periakaruppan has become probable. It is pertinent to note that nowhere it was
admitted by the revision petitioner/accused that before the receipt of Ex.P4-
notice, he knew that Pappa @ Periakaruppan was the father-in-law of the
respondent/complainant. On the other hand, in Ex.P7-reply notice, he has simply
referred to Baskar, a police constable and Pappa @ Periyakaruppan as two
persons, who had obtained signed blank cheques and signed blank promissory notes
from the revision petitioner/accused as security for the repayment of the loan
advanced to one Ravichandran, a friend of the revision petitioner/accused.
Nowhere in the reply notice, the revision petitioner/accused has admitted that
he had knowledge that Pappa @ Periakaruppan was the father-in-law of the
respondent/complainant or that the respondent/complainant was known to him
through the said Pappa @ Periakaruppan. On the other hand, there is clear
evidence to the effect that only after the receipt of the notice and after the
filing of the case, the revision petitioner/accused came to know that the said
Pappa @ Periakaruppan was none other than the father-in-law of the
respondent/complainant. Therefore, the above said contention raised on behalf of
the respondent/complainant does not hold any water and the same deserves to be
rejected. When such a clear stand has been taken by the revision petitioner/
accused, the respondent/complainant could have at least examined the the above
said Pappa @ Periakaruppan and Baskar to prove that either there was no such
transaction between those persons and the revision petitioner/accused or the
transaction between those persons and the revision petitioner and the
transaction between the respondent/complainant and the revision
petitioner/accused are totally different.

26. Apart from failing to examine those persons, the
respondent/complainant has also failed to prove that he had sufficient source of
funds for lending such a huge amount. He would state that he was having a sum of
Rs.4,00,000/- in his hands as the amount realised by the sale of paddy. No
receipt to show that he had sold paddy for such an amount to prove his source of
funds, has been produced. In addition, he has also pleaded loss of memory as to
the date or month during which he raised the funds by selling paddy. The
evidence of PW.1 is to the effect that he got the money little by little by
selling his paddy. How long he was thus getting the amount from the sale of the
agricultural produce, namely paddy, is not known. It is the further evidence of
PW.1 that it was in October, the revision petitioner/accused approached the
respondent/complainant for borrowing; that since he promised to repay the said
amount, the respondent/complainant paid it as a hand loan. The relevant part of
the evidence in the vernacular is extracted hereunder:
” vjphp mf;Blhgh; khjj;jpy; gzk; Bfl;lhh;. Bjjp qhgfkpy;iy. ehd; xU
khjj;jpy; vjphp jpUg;gp jUtjhf brhd;djhy; ifkhj;jhfj; jhd; bfhLj;Bjd;. fldhf
bfhLf;ftpy;iy.” ”

The above said version of PW.1 is nothing but an attempt to show that the amount
was paid as a hand loan prior to the date of the cheque, without obtaining any
document and subsequently on demand for repayment, the cheque in question was
issued. As rightly pointed out by the learned counsel for the revision
petitioner/accused, it is highly improbable that such a huge amount would have
been lent by the respondent/complainant as a hand loan, without getting proper
document evidencing the loan transaction.

27. If all the above said aspects are taken into consideration, we can
come to the only conclusion that the revision petitioner/accused was able to
establish the improbabilities of the case of the respondent/complainant and also
prove his defence case by preponderance of probabilities and that the
respondent/ complainant has not discharged his reverse burden of proving that
the cheque was issued in his favour for a legally recoverable debt or other
liability. The respondent/complainant has also failed to prove that the revision
petitioner/accused has committed an offence under section 138 of the Negotiable
Instruments Act, 1881 beyond reasonable doubt to dislodge the general
presumption, which stands cast on the respondent/complainant on due rebuttal of
the presumption under section 139 of the Negotiable Instruments Act, 1881. Both
the courts below have not properly appreciated the evidence in this regard and
the principles of law governing the degree of proof required for an accused
facing a charge under section 138 of the Negotiable Instruments Act, 1881 to
rebut the presumption under section 139 of the Act and the degree of proof
required on the part of the complainant when such rebuttal takes place. This
court is also of the opinion that the courts below would have arrived at a
conclusion that the charge was not proved beyond reasonable doubt and the
revision petitioner/accused was entitled to be acquitted, as he could not be
found guilty of the offence with which he stood charged, had they properly
appreciated the evidence and applied legal principles referred above correctly.
For all the reasons stated above, this court comes to the conclusion that the
judgment of the trial court convicting the appellant and that of the lower
appellate court confirming the conviction, are defective, infirm and are liable
to be interfered with and set aside by invoking the revisional powers of this
court.

28. In the result, the criminal revision case is allowed. The judgment of
the learned Additional District and Sessions Judge (Fast Track Court No.2),
Madurai dated 21.09.2010 made in C.A.No.43/2010 confirming conviction recorded
and the sentence imposed by the trial court, namely District Munsif cum Judicial
Magistrate, Vadipatti in his judgment dated 07.05.2010 made in
S.T.C.No.487/2008, is set aside. The revision petitioner is acquitted of the
offence with which he stood charged. Fine amount collected if any, shall be
refunded to the revision petitioner.

asr

To

The Additional District and
Sessions Judge (FTC NO.2),
Madurai

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