Hem Chand Thakur Vs Ram Saran

Neutral Citation No. ( 2024:HHC:15417 )

IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA

Cr. MPM No. 1238 of 2024 Reserved on: 13.12.2024 Date of Decision: 20^th December, 2024

Hem Chan Thakur ...Petitioner Versus Ram Saran ....Respondent Coram Hon’ble Mr Justice Rakesh Kainthla, Judge. Whether approved for reporting? No For the Petitioner : Mr. Paras Ram, Advocate, vice Mr. B.R. Kashyap, Advocate. For the Respondent : None.

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Rakesh Kainthla, Judge

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The present application has been filed for seeking leave to appeal against the judgment dated 17.01.2024 passed by learned Additional Sessions Judge, CBI Court, Shimla (learned Appellate Court) in Criminal Appeal CIS Registration No. 265/2023, vide which the respondent (accused before learned Trial Court) was acquitted of the commission of an offence punishable under Section 138 of Negotiable Instruments Act (in short ‘NI Act’).

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(Parties shall be referred to in the same manner as they were arrayed before the learned Trial Court for convenience).

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Briefly stated, the facts giving rise to the present application are that the complainant filed a complaint against the accused for the commission of an offence punishable under Section 138 of the NI Act. He asserted that he entered into an agreement with the accused in the year 2014 for a consideration of ₹ 2,50,000/- for the sale of the vehicle. The accused issued five cheques. The possession was delivered to the accused. The accused failed to pay the liability of the financer or the sale consideration to the complainant. The complainant presented the cheques but they were dishonoured with the remarks ‘funds insufficient’. The complainant issued a notice on 16.01.2015, but the accused failed to pay the amount despite the receipt of the notice; hence, a complaint was filed against the accused for taking action against him as per the law.

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Learned Trial Court held that the cheque carried with it a presumption of consideration under Section 139 of the NI Act. The parties admitted that an agreement was executed between them in the year 2013. A perusal of the agreement shows that it was entered between the complainant and the son of the accused

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regarding the purchase of the vehicle for consideration of ₹4,75,000/- out of which an amount of ₹1,00,000/- was paid on 10.07.2013. The son of the accused acknowledged liability of ₹3,75,000/-. It was also agreed that the son of the accused would discharge the loan of ₹1,50,000/- taken by the complainant for purchasing the vehicle. The accused agreed to clear the liability of his son by the agreement. The cheques were dishonoured due to insufficient funds. The complainant issued a notice to the correct address. The accused failed to pay the amount even after the receipt of the notice. All the ingredients of Section 138 of the NI Act were satisfied; hence, the accused was convicted and sentenced to undergo simple imprisonment for three months and to pay a compensation of ₹2,00,000/- to the complainant.

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Being aggrieved from the judgment and order passed by the learned Trial Court, the accused filed an appeal, which was decided by the learned Additional Sessions Judge, CBI Court, Shimla (learned Appellate Court). Learned Appellate Court held that there was a presumption that the cheque was issued for consideration, and the burden is upon the accused to rebut this presumption. The complainant failed to produce the agreement on record. The learned Trial Court relied upon the agreement (Mark

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C1); however, this document was not proved as per the law, and the learned Trial Court erred in relying upon an unexhibited document. The agreement produced by the accused showed that the son of the accused and not the accused was liable. The accused could have issued the cheque in discharge of the liability of his son, but in the absence of the agreement, it cannot be said that the accused had taken the liability of his son upon himself. The complainant also did not say in his statement that the accused had taken the liability of his son and issued the cheque to discharge that liability. He stated that the accused had purchased the vehicle from him, which was not correct. The demand notice was also not proved as per law. The photocopy of the demand notice was sought to be proved, but the same was objected to, as the original was not produced. In the absence of any evidence that the complainant had issued a legal notice to the accused, the essential ingredients of Section 138 of the NI Act that the complainant had demanded the money from the accused and the accused had failed to pay the amount even after the receipt of a valid notice of demand was not established. Therefore, the learned Appellate Court allowed the appeal and acquitted the accused.

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Being aggrieved from the judgment passed by the learned Appellate Court, the complainant has filed the present application seeking leave to appeal. It has been asserted that the learned Appellate Court erred in acquitting the accused. The accused took a defence that his signatures on the agreement were put by his son, and this defence was not proved. There was an agreement between the parties. The accused took advantage of the sudden and untimely death of his young son-Heera Lal. The accused had taken the liability of his son by executing an agreement and issuing post-dated cheques with an understanding that he would clear the liability due to Shriram Transport Finance Company Limited. The notice was duly served upon the accused. The accused failed to pay the amount even after the receipt of the notice. Learned Appellate Court erred in acquitting the accused; therefore, it was prayed that the leave to appeal be granted.

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I have heard Mr. Paras Ram, learned counsel representing the complainant.

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Mr Paras Ram, learned counsel representing the complainant, submitted that the learned Appellate Court erred in acquitting the accused. It was rightly held by the learned Trial Court that the cheque carried with it a presumption of

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consideration; therefore, the complainant was not supposed to prove the agreement on record. The burden was upon the accused to rebut the presumption, and he should have led evidence to show that there was no consideration for issuance of the cheque. Learned Appellate Court erred in shifting the burden of proof upon the complainant. The notice was duly proved on record, and learned Appellate Court had taken a hyper-technical view by holding that a notice was not proved as per the law; hence, he prayed that the leave to appeal be granted.

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I have given considerable thought to the submissions made at the bar and have gone through the records carefully.

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It is undisputed that the legal notice was not proved on record. It has been shown as Mark C-1 in the form ‘B’ annexed to the judgment of the learned Trial Court. Learned Trial Court referred to the agreement as Mark ‘C1’ in the judgment and to the legal notice as (Ext. CW1/D), which is the acknowledgement due and not the legal notice. Thus, it is apparent that the learned Trial Court had misdirected itself while deciding the matter. It relied upon the acknowledgement (Ext. CW1/D) as the legal notice and held that the accused had failed to pay the amount even after the

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receipt of the notice. Learned Appellate Court had rightly reversed this finding of the learned Trial Court.

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It further appears from the judgment of the learned Trial Court that it referred to the agreement in another case titled Hem Chand Thakur versus Ram Saran, 221-3 of 17/14; however, it is not apparent from the judgment of the learned Trial Court that the said file was exhibited before it. It is difficult to see how the learned Trial Court could have referred to the documents annexed to another case without the same being proved before it as per the law. Thus, the learned Trial Court had erred in relying upon inadmissible evidence, and the learned Appellate Court had rightly reversed this finding of the learned Trial Court.

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It was submitted in the memorandum of appeal that the accused had taken the liability of his son. This is not acceptable. There is no whisper in the complaint to this effect. Even in the statement of the complainant, it was not mentioned that the accused had taken the liability of his son and issued the cheques to discharge his liability. Rather, it was asserted that the complainant had sold his vehicle to the son of the accused for a consideration of ₹4,75,000/- and the accused was using the

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vehicle. Learned Appellate Court was, therefore, justified in holding that in the absence of any evidence that accused had issued the cheque to discharge the liability of his son, the presumption under Section 139 of NI Act stood rebutted by the agreement (Ext. DY) and in absence of the agreement between the accused and the complainant, no inference could have been drawn that accused had agreed to discharge the liability of his son; hence, the first condition that the cheque was issued in discharge of the legal liability was not proved.

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The complainant was supposed to issue a legal notice to the accused. The complainant failed to prove the legal notice by legally admissible evidence. He relied upon the photocopy, and it was marked as Mark C1. Therefore, the complainant was aware of the fact that the document had not been exhibited because the primary evidence was not produced. He could have easily filed an application for leading secondary evidence justifying the reception of the photocopy of the notice; however, he did not do so and remained satisfied with the marking of the documents. Learned Appellate Court had rightly held that in the absence of the evidence that the notice was served upon the accused asking him to pay the amount, he could not be held liable.

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Learned Trial Court held that the person who takes a

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plea that he had not received the notice could pay the amount within 15 days of the receipt of the summons from the Court, and if he fails to do so, he cannot take a plea that no notice was served upon him. This situation will arise once it is proved on record that a notice was issued on the correct address of the accused. In the absence of any evidence regarding the issuance of the notice, the accused cannot be called upon to face the prosecution on the premise that the notice of the Court has to be treated as the notice from the complainant. This would make the provision of Section 138 of the NI Act requiring the issuance of the notice of demand by the complainant and the failure of the accused to pay the amount despite the receipt of the notice of the offence redundant.

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