Allowed

Sudhakar Singh v. the State of Jharkhand

Jharkhand HC24 Jul 2023Cr.Rev./1431/2018

Case brief

AI extract

What is this about?

This High Court allowed the criminal revision surrendering conviction under Section 138 NI Act. The judgment set aside the acquittal of an unaccounted cash loan failing to show legally enforceable debt alleged violation of Cr.P.C. Section 30 in default imprisonment and discharged petitioner bail.

What did the court decide?

Impugned judgments set aside; Petitioner acquitted of Section 138 offence; Discharged from bail bonds liability; Any amount paid to complainant not recoverable.

Sudhakar Singh Vs the State of Jharkhand — Cheque Dishonour | Jharkhand HC (2023)

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IN THE HIGH COURT OF JHARKHAND AT RANCHI

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Cr. Revision No. 1431 of 2018

Sudhakar Singh

…… Petitioner

Versus

1.The State of Jharkhand

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2.Bijay Prakash Pandey ……. Opp. Parties

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CORAM: HON’BLE MR. JUSTICE SANJAY PRASAD

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For the Petitioner : Mr. A.K. Chaturvedi, Advocate For the State : Mr. Pankaj Kumar, Spl.PP For the O.P. No.2 : Mr. Amitesh Kr. Geasen, Advocate

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By Oral Order in Court 08/Dated: 24^th July, 2023

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This Criminal Revision has been filed on behalf of the petitioner challenging the judgment dated 02.07.2018 passed by Sri Manoj Prasad, learned Sessions Judge, East Singhbhum, Jamshedpur in Criminal Appeal No.170 of 2017 by which the appeal has been dismissed thereby affirming the judgment of conviction and order of sentence dated 21.11.2017 passed in C/1 case no.1750/2015, Tr. No.515/2017 by Ms. Rupa Bandana Kiro, J.M, Ist Class, Jamshedpur by which the learned Magistrate has convicted the petitioner for the offence under section 138 of the N.I. Act and sentenced him to undergo S.I for 30 days and pay fine of Rs.10,00,000/- and out of the said fine amount a sum of Rs.9,95,000/- was directed to be paid to the complainant as compensation and Rs.5,000/- was to be appropriated to the State and be deposited in the Nazarat, Civil Court.

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The complaint case has been filed on behalf of the complainant-O.P. No.2 stating therein that he had given friendly loan to the petitioner in January, 2013 for his business. It has been stated that when friendly loan was accumulated to Rs.8,00,000/- the complainant-O.P. No.2 had started demanding the money and to fulfil his liability the petitioner gave two post-dated cheques drawn on Bank of India, Bhalubasa Branch at Jamshedpur dated 15.06.2015 of Rs.4,00,000/- (Rs.Four Lakh) each in favour of the

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complainant bearing Cheque No.709454 and 709455 of A/C No.595510110000337. It has been stated that when the cheques were presented for encashment then the same were dishonoured and as per Bank of India Cheque returning Memo dated 30.06.2015 the reason was shown ‘Insufficient Funds’. Thereafter legal notice was sent by the complainant to the petitioner on 07.07.2015 by registered post and the petitioner has received the legal notice on 10.07.2015. However, no amount has been paid and thereafter the complaint was filed on 01.08.2015.

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Learned counsel for the petitioner has submitted that the impugned judgments and the orders passed by the learned Courts below are illegal and not sustainable in the eye of law. It is submitted that the notice has not been served upon him. It is submitted that both the cheques of Rs.4,00,000/- each was given as the securities in the business. It is submitted that complainant-O.P. No.2 ought not to have used the cheques given by the petitioner by way of security. It has been submitted that the learned Courts below and the learned Appellate Court have not considered the case of the petitioner properly and hence the impugned judgment may be set aside. It is submitted that the petitioner has also paid Rs.1,50,000/in the light of the order dated 15.12.2018 passed by a Co-ordinate Bench of this Court and hence the impugned judgment may be set aside.

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On the other hand, learned APP for the State has submitted that the impugned judgments and order passed by the learned court below are fit and proper and hence not interference is required.

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Learned counsel for the O.P. No.2 has submitted that this Criminal Revision is devoid of merit. It is submitted that there is concurrent finding of fact against the petitioner and both the learned Courts below have found the petitioner guilty for the offence under section 138 of the N.I. Act. It is submitted that O.P. No.2 has paid friendly loan of Rs.8,00,000/- to the petitioner and for which the petitioner had issued two cheques of Rs.4,00,000/- each and which

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were dishonoured due to ‘Insufficiency of Funds’. It is submitted that complainant i.e. O.P. No.2 during his evidence has supported his case. It is submitted that the documents i.e. cheques, legal notice and the receipts, have also been proved as the Exhibits before the learned court below. It is submitted that even the learned Appellate Court below has held that the cheque dated 15.06.2015 was presented before the Bank which was dishonoured and the complaint case was filed on 01.08.2015 within the period of limitation and there is no technical fault in instituting the complaint case. Learned counsel for the O.P. No.2 has submitted that even the cheque given by way of security shows that certain amount had been taken by the petitioner and hence no illegality has been committed by the learned Courts below by passing the impugned judgments and order and hence this Cr. Revision No.1431 of 2018 may be dismissed.

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Perused the Lower Court Records of this case and considered the submissions of learned counsel for both the sides. 7. It transpires from the complaint that the complainant claimed to have paid Rs.8,00,000/- to the petitioner on different dates from the year 2013 to 2015 but has failed to disclose any specific date and any specific month and any specific year of any particular amount for handing over any amount to the petitioner in presence of any witness which was dishonoured.

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It further transpires from the complaint that the cheques were presented for the first time on 15.06.2015 having the signature of the petitioner.

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It transpires that the complainant has got examined only one witness in support of his case as C.W-1 i.e. the complainant himself. 10. The prosecution has adduced the following documents as Exhibits, which are as follows:-

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(i) Exhibit-1 is the cheque bearing no.709454 dated 15.06.2015, (ii) Exhibit-2 is the cheque bearing no.709455 dated 15.06.2015, (iii) Exhibit-3 and Exhibit-4 are the Bank return memo both dated 30.06.2015,

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(iv) Exhibit-5 is the legal notice dated 07.07.2015,

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(v) Exhibit-6 is the postal receipt dated 07.07.2015,

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(vi) Exhibit-7 is the receiving slip dated 21.08.2015 through the Postal Department upon service of notice upon the petitioner.

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Neither any witness has been examined nor any document has been mentioned on behalf of the accused-petitioner in this case. 12. It transpires that petitioner has issued two cheques to the complainant-O.P. No.2 but the nature of the complaint shows that the cheques appear to have been issued by the petitioner by way of security as there is no specific date of giving any amount to the petitioner in the complaint petition and the complaint is vague one. 13. From perusal of the evidence of the complainant-P.W-1, it would appear that he had handed over Rs.Eight Lakhs (Rs.8,00,000/) from January, 2013 to the petitioner for expansion of his business and there is no witness of handing over of the said amount of Rs.8,00,000/-.

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Thus there is no evidence led on behalf of the complainant to show that this amount of Rs.8,00,000/- was shown by the complainant-O.P. NO.2 in his Income Tax Return and which ought to have been shown in the Income Tax Return of the complainant but the same has not been done.

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It has been held in the case of Sanjay Mishra Versus Kanishka Kapoor @ Nikki reported in 2009 (0) Cr. L. J. 3777 by the Bombay High Court, at para- 11, 12, 13 and 15 as follows:-

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“ Para-11 :- The Apex Court also reiterated well established legal position that for rebutting the presumption under section 139 of the said Act, it is not necessary in every case for the accused to step into the witness box. The Apex Court held that the standard of proof on the part of the accused and that of prosecution in a criminal case is different. The prosecution has to prove the guilt of an accused beyond reasonable doubt, but the standard of proof so as to prove a defence is "preponderance of probability". Inference of preponderance of probabilities can be drawn even by reference to circumstances. In paragraph 44 the Apex Court observed thus:

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". The presumption of innocence is a human right (See Narendra Singh v. State of M.P., Ranjitsing Brahmajeetsing

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Sharma v. State of Maharashtra and Rajesh Ranjan Yadav v. CBI.) Rights Article 6(2) of the European Convention on Human provides: "Everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law." Although India is not bound by the aforementioned Convention and as such it may not be necessary like the countries forming European countries to bring common law into land with the Convention, a balancing of the accused's rights and the interest of the society is required to be taken into consideration. In India, however, subject to the statutory interdicts, the said principle forms the basis of criminal jurisprudence. For the aforementioned purpose the nature of the offence, seriousness as also gravity thereof may be taken into consideration. The courts must be on guard to see that merely on the application of presumption as contemplated under section 139 of the Negotiable Instruments Act, the same may not lead to injustice or mistaken conviction. ..." (Emphasis added) In paragraph 45 the Apex Court held thus:

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"45.We are not oblivious of the fact that the said provision has been inserted to regulate the growing business, trade, commerce and industrial activities of the country and the strict liability to promote greater vigilance in financial matters and to safeguard the faith of the creditor in the drawer of the cheque which is essential to the economic life of a developing country like India. This, however, shall not mean that the courts shall put a blind eye to the ground realities. Statute mandates raising of presumption but it stops at that. It does not say how presumption drawn should be held to have rebutted. Other important principles of legal jurisprudence, namely, presumption of innocence as human rights and the doctrine of reverse burden introduced by section 139 should be delicately balanced. Such balancing acts, indisputably would largely depend upon the factual matrix of each case, the materials brought on record and having regard to legal principles governing the same." (Emphasis added)

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The Apex Court held that presumption of innocence forms part of human rights and therefore the doctrine of reverse burden introduced by section 139 has to be delicately balanced.

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Para-12:- Now turning back to the facts of the present case, assuming that the presumption under section 139 of the said Act regarding existence of debt or liability is not rebutted, in order to attract section 138, the debt or liability has to be a "legally recoverable" debt or liability. As held by the Apex Court in the case of Krishna Bhat (supra) there is no presumption under section 139 of the said Act that the debt is a legally recoverable debt. In the case of Goa Plast (P) Ltd.Vs. Chico Ursula D'Souza [(2004) 2 Supreme Court

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Cases 235] the Apex Court reiterated that a debt or liability subject matter of section 138 means a legally enforceable debt or liability.

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Para-13:- In the present case, there is a categorical admission that the amount allegedly advanced by the applicant was entirely a cash amount and that the amount was "unaccounted". He admitted not only that the same was not disclosed in the Income Tax Return at the relevant time but till recording of evidence in the year it was not disclosed in the Income Tax Return. By no stretch of imagination it can be stated that liability to repay unaccounted cash amount is a legally enforceable liability within the meaning of explanation to section 138 of the said Act. The alleged debt cannot be said to be a legally recoverable debt.

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Para-15:- The Apex Court has held that the laws relating to the said Act are required to be interpreted in the light of the object intended to be achieved by it despite there being deviation from general law. The Apex Court expressed that the object of section 138 of the said Act was to ensure that commercial and mercantile activities are conducted in smooth and healthy manner. The explanation to section 138 of the said Act clearly provides that a debt or other liability referred to in section means a legally enforceable debt or other liability. The alleged liability to repay an unaccounted cash amount admittedly not disclosed in the Income Tax Return cannot be a legally recoverable liability. If such liability is held to be a legally recoverable debt, it will render the explanation to section 138 of the said Act nugatory. It will defeat the very object of section 138 of the Act of ensuring that the commercial and mercantile activities are conducted in a healthy manner. The provision of section amount. A cheque 138 cannot be resorted to for recovery of an unaccounted issued in discharge of alleged liability of repaying "unaccounted" cash amount cannot be said to be a cheque issued in discharge of a legally enforceable debt or liability within the meaning of explanation of section 138 of the said Act. Such an effort to misuse the provision of section 138 of the said Act has to be discouraged.”

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It has been held in the case of Rajaram S/O Sriramulu Naidu (Since Deceased) through L.RS. Versus Maruthachalam (Since Deceased through L. RS. reported in 2023 Live Law (SC) 46 at para-20 as follows:-

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“Para-20:- After analyzing all these pieces of evidence, the learned Trial Court found that the Income Tax Returns of the complainant did not disclose that he lent amount to the accused, and that the declared income was not sufficient to

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give loan of Rs.3 lakh. Therefore, the case of the complainant that he had given a loan to the accused from his agricultural income was found to be unbelievable by the learned Trial Court. The learned Trial Court found that it was highly doubtful as to whether the complainant had lent an amount of Rs.3 lakh to the accused. The learned Trial Court also found that the complaint had failed to produce the promissory note alleged to have been executed by the accused on 25th October 1998. After taking into consideration the defence witnesses and the attending circumstances, the learned Trial Court found that the defence was a possible defence and as such, the accused was entitled to benefit of doubt. The standard of proof for rebutting the presumption is that of preponderance of probabilities. Applying this principle, the learned Trial Court had found that the accused had rebutted the presumption on the basis of the evidence of the defence witnesses and attending circumstances.”

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Apart from this, it further transpires that even the learned Appellate Court has not discussed the evidence of the complaint on merit and has merely passed the order in technical manner by endorsing the finding of the learned Court below.

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It further transpires that while passing the sentence, the Court below has convicted the petitioner to undergo S.I for a period of 30 days and directed to pay fine of Rs.10,00,000/- but thereafter the learned court below has further directed that in case of default of fine the petitioner will further undergo S.I for three months which is in violation of Section 30 of the Cr.P.C.

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It appears from the record that the petitioner had remained in custody from 07.12.2018 till 15.12.2018 and thus the petitioner also remained in custody for eight (08) days.

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In view of the above, the impugned judgment dated 02.07.2018 passed by Sri Manoj Prasad, learned Sessions Judge, East Singhbhum, Jamshedpur in Criminal Appeal No.170 of 2017 and the judgment of conviction and order of sentence dated 21.11.2017 passed in C/1 case no.1750/2015, Tr. No.515/2017 by Ms. Rupa Bandana Kiro, J.M, Ist Class, Jamshedpur by which the learned court below has convicted the petitioner for the offence under section 138 of the N.I. Act and sentenced him to undergo S.I for 30 days and pay fine of Rs.10,00,000/- and out of the said fine

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amount a sum of Rs.9,95,000/- was directed to be paid to the complainant as compensation and Rs.5,000/- was to be appropriated to the State and be deposited in the Nazarat, Civil Court and in default the accused petitioner was to undergo imprisonment for a period of three months, are set aside and the petitioner namely Sudhakar Singh is acquitted for the offence under section 138 of the N.I. Act and the petitioner is also discharged from the liability of bail bonds.

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However, the amount paid by the petitioner to the O.P. No.2 shall not be recoverable.

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Thus, this Criminal Revision No.1431 of 2018 is allowed.

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(Sanjay Prasad, J.)

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Saket/-

Sudhakar Singh v. the State of Jharkhand

Case brief

What is this about?

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Sudhakar Singh v. the State of Jharkhand

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