Dismissed

Raju Stephen v. Smt B.Sivamma

Telangana HC9 Apr 2010CRLA/859/2009

Case brief

AI extract

What is this about?

On an appeal against acquittal under Section 138 of the Negotiable Instruments Act, the High Court held that the complainant failed to discharge the initial burden of establishing a legally enforceable debt. Consequently, the presumption under Section 139 did not arise. The appeal was dismissed, and the acquittal was upheld.

What did the court decide?

The appeal was dismissed, and the impugned judgment acquitting the accused was upheld without interference.

Raju Stephen Vs Smt B.Sivamma — Cheque Dishonour | Telangana HC (2010)

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IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD

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FRIDAY, THE 9^th DAY OF APRIL TWO THOUSAND AND TEN

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PRESENT HON’BLE SRI JUSTICE G.V.SEETHAPATHY

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Crl.A.No.859 OF 2009

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Between:Raju Stephen

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…Appellant A n d

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1. Smt.B.Sivamma 2. The State of A.P., Rep. by its Public Prosecutor, High Court Buildings, Hyderabad.

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…Respondents

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HON’BLE SRI JUSTICE G.V.SEETHAPATHY CRL.A.No.859 OF 2009

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JUDGMENT:

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This appeal is directed against the judgment dated

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02-01-2009 in S.T.C.No.146 of 2007, on the file of the IV-Additional Judicial Magistrate of the First Class, Chittoor, wherein the

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respondent herein, the accused, was found not guilty of the offence under Section 138 of the Negotiable Instruments Act, (for short ‘the Act’) and was acquitted under Section 255(1) Cr.P.C.

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2. Heard the learned counsel for the appellant/complainant and the learned counsel for the respondent/accused. Perused the records.

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3. The appellant herein filed the complaint alleging that the respondent borrowed Rs.1 lakh from the complainant on 07-03-2005 promising to repay the same with interest at 24% per annum and also executed a promissory note in favour of the complainant and after repeated demands, the respondent issued a cheque-Ex.P-1 bearing No.054149 for Rs.90,000/- on 13-09-2006 on Andhra Bank, Chittoor and the same when presented under Ex.P-2 presentation slip on

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13-09-2006 to the State Bank of India, Chittor for collection, it was returned under Exs.P-3 and P-4 on 15-09-2006 on the ground of ‘insufficient funds’. The complainant issued a registered notice-

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Ex.P-5 dated 22-09-2006 demanding repayment of the amount within 15 days. The accused received the notice under Ex.P-6 postal acknowledgement on 23-09-2006 and gave a replyEx.P-7 dated

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06-10-2006 with false allegations. The respondent/accused denied the offence and pleaded not guilty.

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4. During enquiry, the complainant was examined as P.W.1 and Exs.P-1 to P-7 were

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marked on his side. The complainant’s wife Shoba Rani was examined as D.W.1 and no documents were marked on behalf of the accused.

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5. On a consideration of the evidence available on record, the learned Magistrate found the accused not guilty of the offence and acquitted her holding that the complainant failed to discharge the initial burden of establishing the existence of a legally enforceable liability on the part of the accused.

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6. According to the complainant, the accused borrowed Rs.1 lakh on 07-03-2005 and executed a promissory note in his favour, promising to repay the debt with interest at 24% per annum and in discharge of the said liability, the accused gave the cheque-Ex.P-1 dated 13-09-2006 for a sum of Rs.90,000/- and the same was dishonoured. The accused though admitted her signature on the cheque-Ex.P-1 but denied any borrowal from the complainant or execution of any pronote in favour of the complainant. She further denied to have issued any cheque under Ex.P-1 in discharge of the alleged debt. According to the accused, she availed a hand loan of Rs.1 lakh from the complainant’s wife Shoba Rani who was examined as D.W.1 and towards security for repayment of the said hand loan, she gave a signed blank pronote and blank cheque in favour of the wife of the complainant. She further alleges that taking advantage of the signed blank cheque, Shoba Rani and her husband, the complainant, collusively fabricated the chequeEx.P-1 and filed the complaint to make a wrongful gain. In view of the specific denial of the existence of any legally enforceable debt or liability on the part of the accused, the initial burden certainly lies on the complainant to show that the accused, in fact, borrowed an amount of Rs.1 lakh from him and in discharge of the said debt only, the cheque-Ex.P-1 was issued.

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7. In order to constitute the offence under Section 138 of the Act, the existence of the necessary ingredients constituting the said offence have to be established by the complainant. The complainant has to establish by evidence that there is a legally enforceable debt and the drawer of the cheque issued the cheque to satisfy in whole or in part a debt or other liability and the cheque so issued has been returned due to insufficiency of funds. No doubt, Section 139 of the Act contains a presumption, a rebuttable one, to the effect that it shall be presumed that the holder of the cheque received the cheque for the discharge in whole or in part the debt or any other liability. The said presumption can be drawn in favour of the holder of the cheque provided the initial burden showing that the cheque was given in discharge of legally enforceable debt is established by the complainant.

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8. The complainant has not filed the promissory note alleged to have been executed by the accused for a sum of Rs.1 lakh and no reason or explanation is furnished for not filing the same. None connected with the alleged transaction of borrowal is also examined to prove the existence of the alleged debt. In the evidence also, except marking the documents Exs.P1 to P-7, the testimony of P.W.1 is silent as to the details of the alleged borrowal and execution of the promissory note. In the cross-examination P.W.1 says that he does not even know whether the promissory note is filed into Court or not or he gave it to the counsel or not. He

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does not know who scribed the promissory note. He named one Afroz and Venkatesh as attestors of the said promissory note, but did not take any steps to examine them. P.W.1 further stated in the cross-examination that he gave

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Rs.1 lakh to the accused towards hand loan, which is contrary to

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his version that he lent the amount against the promissory note.

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Thus, there is nothing on record to show that the accused, in fact, borrowed a sum of Rs.1 lakh from the complainant and executed a promissory note along with her husband in favour of the complainant. The complainant has failed to discharge the initial burden of showing the existence of any debt or liability by the accused towards him. When that is so, the question of invoking the presumption contained in Section 139 of the Act in favour of the complainant does not arise. It is only when the complainant establishes that a cheque was, in fact, issued by the accused, the way it is alleged by the complainant, it shall be presumed that it was in discharge of a legally enforceable debt or liability. When the evidence does not disclose that the cheque-Ex.P-1 was issued by the accused with the contents and for the consideration as alleged, the presumption under Section 139 of the Act does not get attracted notwithstanding the fact that signature thereon belongs to the accused.

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9. The learned counsel for the appellant/complainant would contend that the presumption is not rebutted as the accused neither gave evidence herself nor adduced any other evidence. When the presumption itself is not available in the factual matrix of the present case to be drawn in favour of the complainant, the question of the same being rebutted by the accused, does not arise.

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10. The learned counsel for the appellant relied on a decision in K.N.BEENA V.

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MUNIYAPPAN AND ANOTHE R^[1] wherein Apex Court held that it is not for the complainant to prove that there is an existing liability in respect of which the cheque in question has been issued. In the above case, the accused has not led any evidence and the High Court based on the denial contained in the reply issued by him found it sufficient to shift the burden of proof onto the complainant to prove that the cheque was issued for a debt or liability. The conviction recorded by the Magistrate was set aside by the High Court. The Apex Court held that the High Court had lost sight of

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the presumptions contained in Section 118 and 139 of the Act. Under Section 118 of the Act, unless the contrary is proved, it must be presumed that the Negotiable Instrument is made or drawn for consideration. In the present case, the existence of any such Negotiable Instrument is not proved at all. The complainant failed

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to establish that there was, in fact, any promissory note executed by the accused nor any cheque issued for discharge of any such debt due by or under the said promissory note. In the absence of proof of existence of Negotiable Instrument, the question of invoking presumption under Section 118 of the Act to the effect that it was made or drawn for consideration, does not arise. Similarly, in the absence of proof of existence of cheque, which is alleged to have been issued by the accused, question of drawing presumption under Section 139 of the Act to the effect that the holder of the cheque received it in discharge in whole or in part of debt or liability, also does not arise. Simply because the signature on the cheque is not disputed by the accused, the complainant is not absolved of discharging the

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initial burden of showing the existence of a cheque before the onus can be shifted on to the accused to rebut the presumption contained in Section 139 of the Act. The decision cited is, therefore, not applicable to the facts of the present case. For the same reason, the decision in HITEN P. DALA V. BRATINDRANATH BANERJE E^[2] of the Apex Court wherein it was held that burden lies on the accused to prove that there is no subsisting liability and the poof must be sufficient enough to rebut the presumption and mere explanation is not sufficient, is also not applicable to the facts of the present case.

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11. In SRI TAHER N.KHAMBATI V. M/S VINAYAK ENTERPRISES, SECUNDERABAD AND

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OTHER S^[3] , it was held by this Court that when the complainant obtained blank signed cheque, it cannot be construed that the accused issued the cheque voluntarily for discharge of any debt or legal liability.

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12. The learned counsel for the appellant/complainant would contend that the accused by not examining herself or adducing any other evidence failed to establish her plea that she gave a signed blank cheque to the wife of the complainant in connection with hand loan of Rs.1 lakh and the said cheque was misused. No doubt, the accused did not go into the witness box. Firstly, no part of the onus got shifted on to the accused because the complainant failed to discharge the initial burden as stated supra. Secondly, there is no need for the accused to give evidence and the presumption contained in Section 139 of the Act when invoked in a given case can be rebutted by

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other evidence available on record including the admissions of the complainant and his witnesses in the cross-examination and other circumstantial evidence.

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13. In a decision in KRISHNA JANARDHAN BHAT V. DATTATRAYA G.HEDG E^[4] , the Apex Court held as under:-

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“Indisputably, a mandatory presumption is required to be raised in terms of Section 118(b) and Section 139 of the Act. Section 13(1) of the Act defines “negotiable instrument” to mean a “promissory note, bill of exchange or cheque payable either to order or to bearer.”

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Section 138 of the Act has three ingredients, viz.,

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(i) that there is a legally enforceable debt;

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(ii) that the cheque was drawn from the account of bank for discharge in whole or in part of any debt or other

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liability which presupposes a legally enforceable debt; and

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(iii) that the cheque so issued had been returned due to insufficient of funds.

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The proviso appended to the said section provides for compliance of 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.

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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.

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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

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feel, is not correct.

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An accused for discharging the burden of

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proof placed upon him under a statute need not examine himself. He may discharge his burden on the basis of the materials already brought on records. An accused has a constitutional right to maintain silence. Standard of proof on the part of an accused and that of the prosecution in a criminal case is different.”

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In the above case, it was further held as under:

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“Furthermore, whereas 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”. 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.

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A statutory presumption has an evidentiary value. The question as to whether the presumption whether 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. In a case of this nature, whether the chances of false implication cannot be ruled out, the background fact and the conduct of the parties together with their legal requirements are required to be taken into consideration.”

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……………………………………………………………………………………………………………… …………The Courts were required to draw an inference as to the probability of the complainant’s advancing a sum of Rs.1.5 lakhs on mere asking and that too without keeping any documentary proof. Even there was no witness. The purported story that the appellant would himself come forward to return the amount by a cheque knowing fully well that he did not have any sufficient funds is difficult to believe.”

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In the above case, it was further held as under:

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The presumption of innocence is a human right (See Narender Singh and Ann V. State of M.P. (2004) 10 SCC 699; Ranjitsing Brahmajeetsing Sharma v. State of Maharashtra and Anr. (2005) 5 SCC 294 and Rajesh Ranjan Yadav @ Pappu Yadav v. CBI through its Director (2007) 1 SCC 70} Article 6(2) of the European Convention on Human Rights 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 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. It is for the aforementioned reasons that we have taken into consideration the decisions operating in the field where the difficulty of proving a negative can never be proved but there are cases where such difficulties are faced by the accused e.g., honest and reasonable mistake of fact. In a recent Article “The Presumption of Innocence and Reverse Burdens: A Balancing Duty” published in (2007) CLJ (March Part) 142 it has been stated:-

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“In determining whether a reverse burden is compatible with the presumption of innocence regard should also be had to the pragmatics of proof. How difficult would it be for the prosecution to prove guilt without the reverse burden? How easily could an innocent defendant discharge the reverse burden? But courts will not allow these pragmatic considerations to override the legitimate rights of the defendant. Pragmatism will have greater sway where the reverse burden would not pose the risk of great injustice – where the offence is not too serious

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or the reverse burden only concerns a matter incidental to guilty. And greater weight will be given to prosecutorial efficiency in the regulatory environment.”

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In the above decision, it is held that the presumption of innocence is a human right and the doctrine of reverse burden introduced by Section 139 of the Act should be delicately balanced. In the above case also, the accused admitted the signature on the cheque, but contended that a signed blank cheque was misused by his P.A the holder through his relative who was the complainant. The trial Court convicted the accused and the same was confirmed by the Sessions Court on the basis of the presumption contained in Section 139 of the Act. The High Court, however, held that the presumption only means that the cheque was issued for consideration, but does not extend to the extent that the cheque was issued for the discharge of liability as pleaded by the accused, but however, opined that the complainant had discharged the onus by adducing his own evidence and declined to go into the question in exercise of revisional jurisdiction as a concurrent finding on question of fact was recorded by the Courts below regarding alleged misuse of the cheque. The High Court, therefore, confirmed the conviction, but modified the sentence. The Apex Court, however, set aside the conviction and sentence passed against the accused and held as stated supra.

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14. In view of the principles laid down in the above decision, which are applicable to the facts of the present case as well, it must be held that the presumption contained in Section 139 of the Act is of no avail to the complainant, as he failed to discharge the initial burden of showing the existence of the first ingredient viz., that there was a legally enforceable debt. The said presumption, which is in regard to the second ingredient viz., when the cheque was drawn in discharge of the debt or other liability does not, therefore, get attracted.

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15. The impugned judgment of the learned Magistrate holding the accused not guilty does not, therefore, call for any interference.

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16. It is well settled that an order of acquittal cannot easily be interfered with in appeal unless there are strong and compelling reasons to do so. In the present case, there are no such strong and compelling reasons that would call for interference with the order of acquittal passed by the learned Magistrate. There are no merits in the appeal.

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17. In the result, the appeal is dismissed.

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____________________ G.V.SEETHAPATHY, J

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Dated 09^th April, 2010 Lrkm.

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[1] 2001(2) ALD (Crl.) 824 (SC) [2] 2001(2) ALD (Crl.) 234 (SC) [3] 1995 CRL.L.J. 560

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[4] AIR 2008 SC 1325

Raju Stephen v. Smt B.Sivamma

Case brief

What is this about?

What did the court decide?

Raju Stephen v. Smt B.Sivamma

Case brief

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What did the court decide?

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