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CHEQUE BOUNS CASE

To rebut the presumption even the accused need not enter into the witness box and examine other witnesses in support of his defence. He need not disprove the prosecution case in its entirety. He may discharge his burden on the basis of the material already brought on record. He has a constitutional right to maintain silence.

Polski: Blankiet urzędowy weksla

Polski: Blankiet urzędowy weksla (Photo credit: Wikipedia)

HON’BLE SRI JUSTICE R.KANTHA RAO

  

Crl.A.No.162 of 2006

23.01.2012

G.Ashok Kumar Goud

Smt.P.Anjali Bai and another

Counsel for appellant: Sri N.Vasudeva Reddy

Counsel for first respondent: M/s G.Madhusudan Reddy and B.Vijaysen Reddy
^ Counsel for second respondent: Public Prosecutor

? Cases referred:
1 AIR 2001 SC 3897(1)
2 (2002) 6 SCC 426
3 AIR 2001 SC 2895
4 2007-SCALE–3-235,
5 2008-AIR (SCW)-0-738

JUDGMENT:

This criminal appeal is preferred against the judgment dated 18.01.2006 in
C.C.No.621 of 2003 passed by the Judicial Magistrate of First Class, Tandur,
Ranga Reddy District.

2. The appellant/complainant filed the appeal against the judgment of
acquittal passed by the learned Magistrate acquitting the first
respondent/accused for the offence under Section 138 of the Negotiable
Instruments Act.

3. I have heard Sri N.Vasudeva Reddy, learned counsel appearing for the
appellant, Sri B.Vijaysen Reddy, learned counsel appearing for the first
respondent and the learned Additional Public Prosecutor representing the State.

4. The appellant filed a complaint against the first respondent under Section
138 of the Negotiable Instruments Act alleging that the husband of the first
respondent borrowed an amount of Rs.4 lakhs from him under a promissory note,
the first respondent in discharge of the said loan, borrowed by her husband
issued a cheque on 30.10.2003, the said cheque was presented by the appellant in
the bank for collection on 18.11.2003 and it was dishonoured on the ground of
insufficient funds in the account of the first respondent. Thereafter, the
appellant issued notice under Section 138 of the Negotiable Instruments Act
calling upon the first respondent to pay the cheque amount, but the first
respondent neither paid the amount nor did she give any reply. The appellant
then filed a case under Section 138 of the Act.

5. In the course of the trial before the learned Magistrate, the
appellant/complainant examined himself as PW-1 and examined the Branch Manager
of State Bank of Hyderabad, Tandur Branch as PW-2 and marked
Exs:P-1 to P-7. The first respondent/accused Smt.P.Anjalibai examined herself as
DW-1 and marked Exs:D-1 and D-2. The learned trial Court held that the appellant
failed to discharge his initial burden as to the existence of legally
enforceable debt or liability and also that the first respondent could be able
to rebut the presumption if any in favour of the appellant under Section 139 of
the Act, acquitted her of the offence under Section 138 of the Negotiable
Instruments Act.

6. Challenging the said order of acquittal, the present appeal is filed by
the appellant/complainant.

7. For recording the acquittal, the learned Magistrate took into
consideration the following facts and circumstances viz. that even though
allegedly the husband of the first respondent borrowed an amount of Rs.4 lakhs
under promissory note, the appellant failed to produce the said promissory note
and also failed to produce the books of account showing the existence of the
said debt, the appellant was not specific as to whether the cheque was issued by
the first respondent as a guarantor for the loan borrowed by her husband or
whether the cheque was issued as security for the loan obtained by her husband
and also that the first respondent issued Ex.D-2 notice to the appellant through
the authorities of her bank calling upon the appellant to return the blank
cheque which was obtained by him as security for the loan and not to present the
said cheque for collection and further that the attestors of the said promissory
note were also not examined by the appellant.

8. The crucial aspect requires to be noticed is that in the prayer portion of
the complaint-petition the appellant stated that the cheque was issued by the
first respondent as a guarantor of the loan obtained by her husband, whereas in
the cross-examination she admitted that the cheque Ex.P-1 was issued as security
for the loan obtained by her husband. Thus, there are two contradictory
versions of the appellant/complainant. If really, the cheque was issued as a
security for the loan borrowed by her husband, she cannot certainly be
prosecuted for the offence punishable under Section 138 of the Negotiable
Instruments Act. Whereas, if as a guarantor under the promissory note, she
issued a cheque, she can be prosecuted for the said offence. Admittedly, the
cheque was presented by the appellant in the bank for collection on 18.11.2003
i.e. after the legal notice Ex.D-2 dated 03.11.2003 was issued by the first
respondent to him. It is the specific contention of the first respondent that
her husband did not borrow an amount of Rs.4 lakhs from the appellant under a
promissory note and that the blank cheque was obtained by the appellant from her
in connection with some other loan transaction which is for lesser amount.

9. In view of specific denial made by the first respondent about borrowing
the amount of Rs.4 lakhs by her husband under a promissory note and that the
appellant obtained a blank cheque from her in connection with some other loan
transaction, I am of the view that it is obligatory on the part of the appellant
to produce the promissory note and examine the attestors of the said promissory
note whose names he had specifically mentioned in the complaint-petition. But,
he did not do so. There was no explanation from him as to why he failed to
produce the promissory note under which the husband of the first respondent
allegedly borrowed an amount of Rs.4 lakhs. He also did not file any books of
accounts or being an income tax assessee any of the returns filed before the
income tax authorities to show the existence of the debt. DW-1 in her Ex.D-2
notice issued to the appellant specifically alleged that the appellant obtained
blank cheque and demanded him to return the blank cheque. The learned trial
Court also found that there is a clear variation in the handwriting including
the ink relating to the signature and the figures mentioned in Ex.P-1 cheque.
From this, the learned Magistrate considered the probability of the first
respondent issuing the blank cheque and the figures in the said cheque being
filled by the appellant subsequently. It is under these circumstances the
learned trial Magistrate arrived at a decision that the first respondent could
be able to rebut the presumption available to the appellant under Section 139 of
the Negotiable Instruments Act.

10. The learned counsel for the appellant would submit that there is a
presumption under Section 139 of the Negotiable Instruments Act in favour of the
appellant to the effect that the cheque was issued towards legally enforceable
debt or liability, though the presumption is a rebuttable presumption, it has to
be rebutted by the first respondent by adducing some positive evidence, but, in
the instant case, except examining herself as DW-1, the first respondent did not
adduce any evidence and therefore, the learned Magistrate erroneously held that
the first respondent could be able to rebut the presumption and the finding of
acquittal recorded by the learned Magistrate in consequence thereof is liable to
be set aside in this appeal.

11. On the other hand, Sri B.Vijaysen Reddy, learned counsel appearing for the
first respondent would contend that the first respondent entered witness box and
by her evidence could disprove the allegations in the complaint by stating her
specific case in clear terms and also by marking Ex.D-1 and D-2 documents and
bringing on record the circumstances as to the non-existence of legally
enforceable debt or liability and thus, could be able to rebut the presumption,
the findings recorded by the trial Court being based on evidence and the crucial
circumstances being brought on record by the first respondent, the order of
acquittal passed by the learned trial Court shall not be interfered with in this
appeal.

12. Learned counsel appearing for the appellant in support of his contention
relied on the following decisions:
(1). HITEN P. DALAL v. BRATINDRANATH BANERJEE1 wherein the Supreme Court held
that the presumption under Section 138 of the Negotiable Instruments Act that
cheque was drawn for discharge of liability of drawer is a presumption of law as
distinguished from a presumption of fact ought to be raised by the Court in
every case. The obligation on the prosecution may be discharged with the help
of presumption of law or fact unless the accused adduces evidence showing the
reasonable possibility of non-existence of the presumed fact.
(2) ICDS LTD. V. BEENA SHABEER AND ANOTHER2 – wherein it is held by the Supreme
Court that the cheque issued by the guarantor towards payment of dues
outstanding against the principal debtor is maintainable.
(3) K.N. BEENA v. MUNIYAPPAN AND ANOTHER3 – wherein the Supreme Court has laid
down that the burden of proving that cheque had not been issued for any debt or
liability on the accused, denial of averments in reply by the accused are not
sufficient to shift the burden of proof on to the complainant, the accused has
to prove in trial by leading cogent evidence that there was no debt or liability
and setting aside the conviction on the basis of some formal evidence led by the
accused is not proper.

13. Relying on the above cited judgments, the learned counsel appearing for
the appellant contended that since there is no positive evidence let in by the
first respondent to establish that the cheque was not issued in discharge of
legally enforceable debt or liability for which the impugned cheque was issued,
that the learned trial Court erroneously acquitted the first respondent holding
that she could be able to rebut the presumption available to the appellant under
Section 139 of the Negotiable Instruments Act.

14. On the other hand, the learned counsel appearing for the first respondent
in support of his contention that there was enough material on record whereby
the first respondent could be able to rebut the presumption of law in favour of
the appellant under Section 139 of the Negotiable Instruments Act, relied on the
following judgments.
1) KAMALA S. v. VIDYADHARAN M.4
2) KRISHNA JANARDHAN BHAT v. DATTATRAYA G.HEGDE5

15. In these two decisions the Supreme Court laid down as to the presumption
available to the complainant under Section 139 of the Act and the nature and
extent of the burden to be rebutted by the accused in the following terms:
“The mandatory presumption is indisputably required to be raised in terms of
Section 118(b) and Section 139 of the Act. 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 the bank for discharge in whole or in part
of any debt or other liability which pre-supposes a legally enforceable debt;
and (iii) that the cheque so issued had been returned due to insufficiency of
funds. Section 139 of the Act merely raises a presumption in regard to the
second aspect of the matter, but 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.
The prosecution must prove the guilt of an 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’. The presumptions both under Sections 118-a
and 139 of the Act are rebuttable in nature. To rebut the presumption even the
accused need not enter into the witness box and examine other witnesses in
support of his defence. He need not disprove the prosecution case in its
entirety. He may discharge his burden on the basis of the material already
brought on record. He has a constitutional right to maintain silence. 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.”

16. From the ratio laid down by the Supreme Court in the two judgments above
referred, it is therefore obvious that a presumption which has to be raised by
Courts, as required under Section 139 of the Act in favour of the complainant
need not be rebutted by the accused by adducing any positive evidence. It is
enough on his part to show the circumstances in his favour from the material
available on record and the standard of proof required is that of the
preponderance of probabilities. Therefore, the contention advanced on behalf of
the complainant that there is no positive evidence adduced by the first
respondent/accused to disprove the case of the complainant has no foundation in
law. In the instant case, the first respondent/accused came up with a specific
case that her husband never borrowed an amount of Rs.4 lakhs under a promissory
note from the appellant. Whereas, the contention of the appellant is that there
is a promissory note executed by the first respondent’s husband in his favour
under which he borrowed an amount of Rs.4 lakhs. He named the attestors of the
promissory note in the complaint petition but he did not examine them. He did
not even produce the promissory note. At one time, he states that the first
respondent is one of the guarantors under the promissory note and gave
inconsistent version in the cross-examination to the effect that the promissory
note was executed by the first respondent as security for the loan borrowed by
her husband. The appellant though an income tax assessee failed to file any
income tax returns nor did he produce any books of accounts. The first
respondent issued legal notice Ex.D-2 indicating therein the circumstances under
which the blank cheque and the promissory note were obtained and calling upon
the appellant to return those documents. But, in spite of receiving the said
notice, the appellant presented the cheque for encashment. The appellant was
unable to produce any document showing that the first respondent’s husband
borrowed from him an amount of Rs.4 lakhs. From all these materials available on
record, the first respondent could be able to rebut the presumption available to
the appellant under Section 139 of the Act and the learned trial Court rightly
held that the first respondent could be able to rebut the presumption as
aforesaid available in favour of the appellant. Even if it is considered that
from the facts and evidence two views are possible, this Court while exercising
appellate jurisdiction against the judgment of acquittal shall not interfere
with the findings recorded by the trial Court. The judgment rendered by the
learned trial Court being based on evidence and not being perverse shall not be
interfered with in this appeal against acquittal.

17. For the foregoing reasons, the judgment of acquittal passed by the learned
trial Court is confirmed. The criminal appeal is dismissed.

________________
R.KANTHA RAO,J
Date:23.01.2012

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