Appeal against acquittal in a cheque bouncing case dismissed. Court upheld trial court's finding that the complainant failed to establish a legally enforceable debt due to lack of income evidence and suspicious conduct regarding cheque dates.
Criminal appeal dismissed; acquittal of the accused confirmed.
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HON’BLE SRI JUSTICE C.PRAVEEN KUMAR
CRIMINAL APPEAL No. 1016 of 2006
JUDGMENT:
The appellant/complainant filed the present appeal under Section 378 (4) of Cr.P.C. aggrieved by the judgment dated 22.05.2006 passed in C.C.No.1592 of 2003 on the file of the X Additional Chief Metropolitan Magistrate, Secunderabad, wherein and whereunder the accused was acquitted for an offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short “the Act”).
For the sake of convenience, the parties will hereinafter be referred to as arrayed in C.C.
The facts in issue are as under:
The appellant complainant filed a private complaint against the accused for an offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short “the Act”). The averments in the complaint would show that the complainant and the accused are known to each other through their common friend. Out of such acquaintance, the accused approached the complainant and borrowed a hand loan of Rs.1,32,000/-. In partial discharge of the hand loan, the accused is said to have issued a cheque bearing No. 909246 dated 10.04.2003 for Rs.40,000/drawn on ICICI Bank, Secunderabad Branch and another cheque bearing No. 422232, dated 04.09.2003 for Rs.60,000/- drawn on State Bank of Hyderabad, Himmathnagar Branch, Secunderabad. When presented both the cheques were returned unpaid on 08.09.2003 due to insufficient funds. Immediately thereafter the complainant informed about the dishonour of cheques to the
accused and demanded him to make the payment. Thereafter he got issued a legal notice on 15.09.2003 calling upon the accused to pay the due amount. As the accused failed to pay any amount, the present complaint came to be filed.
After recording the sworn statement of the complainant, the Court took cognizance of the case and issued summons to the accused. On appearance, the accused was examined under Section 251 Cr.P.C. in which he pleaded not guilty and claimed to be tried.
In support of his case, the complainant himself examined as PW1 and got marked Exs. P1 to P12.
After the closure of the complainant’s evidence, the accused was examined under Section 313 Cr.P.C. explaining the incriminating material appearing against him, but the same was denied by the accused.
In support of his defence, the accused examined himself as DW.1 but no documents were marked.
After considering the evidence available on record, the trial Court acquitted the accused holding that the evidence available on record does not disclose that the cheques were issued in discharge of a legally enforceable debt.
Heard learned counsel for the appellant. In spite of service of notice, there is no representation on behalf of the accused, hence treated as heard.
Learned counsel for the appellant mainly submits that since the signature on the cheques is not in dispute, it has to be presumed that the cheques were issued in discharge of a debt or
liability. He further submits that the finding of the trial Court that the complainant has no source of income to lend a loan of Rs.1,32,000/- to the accused is incorrect. According to him, the complainant was helping his father in his vegetable shop and therefore had the capacity to advance the loan amount. In the absence of any evidence rebutting the presumption, he submits that the finding of the trial Court is incorrect and the same warrants interference.
In order to appreciate the contentions raised by the learned counsel for the appellant it may be useful to refer to the evidence of PW.1. PW.1 in his evidence in chief reiterated the averments of the complaint. In his cross examination, PW.1 admits that he was not doing any business or job in the year 2002 as he was supporting his father, who was doing vegetable business and money lending business. He denied the suggestion that he had no capacity to lend the money to the accused. He admits that a sum of Rs.32,000/- was given to the accused by way of cheques and the balance of Rs.1,00,000/- by way of cash. He also admits that he has not filed any details of the cheque through which the amounts were paid. He also admits that he has not filed any receipt showing the receipt of cash by the accused. However, he denied the suggestion that merely because the cheque details are not given and cash receipts being not filed it can be said that no amount was lent to the accused. He admits that he is an income tax assessee, but has not shown about the lending of the money in his income tax returns. In the month of March, 2003, the accused is said to have given the cheques. While recording the above statement, the Court recorded the demeanour of the witness and noted that he was giving the answers by seeing a small chit. He further states in his cross examination that both the cheques are
presented with his banker though one cheque was issued in the month of April and another in the month of September, 2003. The witness was recalled on 17.01.2006 for further chief examination and cross examination. During the course of cross examination he admits that he was not having money lending business. He further admits that whenever he gives a hand loan he will take an endorsement on the cheque books but however admits that he is not aware about the procedure which is followed by his father. He denied the suggestion that the amount covered under Exs.P9 to P12 were not given by his father. He also denied the suggestion that the cheques which are given to his father are misused by him.
The accused examined himself as DW.1. In his evidence, DW.1 deposed that father of the complainant was doing money lending business. In the year 2002 he approached the father of the complainant for a hand loan of Rs.40,000/- for the treatment of his mother. His evidence is to the effect that at the time of taking the said hand loan, the father of the complainant took two blank cheques and a promissory note from him. Subsequently the said amount was repaid to the father of the complainant with interest at 5% per month. In spite of repeated requests made, the said cheques and promissory note were not returned to him stating that they were kept in locker and will be sent to him through the complainant. Meanwhile, disputes arose between him and the complainant, thereafter he received summons. He categorically states that he has not received any notice demanding payment of money. He denied the signature on Ex.P8.
As seen from the record the complainant is said to have lent an amount of Rs.1,32,000/- on various dates between September,
2002 to March, 2003. In the cross examination, PW.1 admits that in the year 2002 he was not doing any business or job, but he was supporting his father, who was doing vegetable and money lending business.
One of the arguments advanced by the learned counsel for the appellant is that once it is proved that the signatures on the cheques is that of the accused, the burden shifts to the accused and it is for him to prove that the cheques were not issued in discharge of any debt or liability. He also submits that mere denial of debt is not sufficient but some thing probable has to be brought on record to prove the non-existence of a debt.
There is no dispute with regard to the proposition of law stated by the learned counsel for the appellant. A Bench of three Judge of the Apex Court in Rangappa v. Moha n[1] while dealing with presumption under Section 139 of the Act held as under:
14. 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 case may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of
cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused/defendant cannot be expected to discharge an unduly high standard or proof. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of `preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own.”
In the case on hand the complainant is said to have advanced a sum of Rs.1,00,000/- to the accused on different dates and in discharge of the said debt the accused is said to have issued one cheque in the month of April, 2003, and another cheque in the month of September, 2003. If really, the accused had issued first cheque in the month of April 2003, no explanation is forth coming as to why the complainant kept quiet without presenting the same in the bank till September, 2003. It is not the case of the complainant that the accused has asked him to withhold the presentation of cheque till September, 2003 and it is
also not the case of the complainant that the cheque which was given in the month of April was a post dated cheque. Since the issuance of the cheque was dated 10.04.2003, the normal human conduct would be to present the cheque immediately or within a reasonable time after it was issued. In the absence of any explanation for the delay in presentation of the cheque a doubt arises as whether really the cheque was issued in the month of April, 2003.
Further the evidence on record establishes that the complainant was not doing any business in the year 2002 and 2003. He was only assisting his father, who was doing vegetable and money lending business. It is his version that he has advanced the money on his own to the accused. If really he has advanced the money on his own and when his father was in money lending business, the complainant would not have ventured to advance such huge amount without taking any documents from the accused. In fact he admits in his evidence that he has not filed any receipt showing payment of cash to the accused and also not filed the details of cheques through which the amount was paid to the accused. Further, he being an income tax assessee failed to mention the advance of Rs.1,32,000/- in his income tax returns. The demeanour of the witness observed by the Court shows that while giving answers about the dates of issuing of cheque by the accused, he took out a small slip and gave answers by looking into the said slip. When the accused is an income tax assessee as admitted by him and the amount lent to the accused was from his own income or from his joint family account, the same should have been mentioned in the income tax returns. No income tax returns are filed either of the Hindu undivided joint family or of his own. No evidence has been adduced to show the existence of any
hindu undivided joint family account and who are the other family members in the family who were able to earn income and place the same at the disposal of the complainant. The evidence on record is only to the effect that he was not earning any money in the year 2002 and that he was only assisting his father who was doing vegetable business and money lending business. During reexamination the witness produced on record two bank statements which are marked as Exs.P9 and P10. The said statement show payment of Rs.32,000/-.
PW.1 tried to establish the payment of Rs.32,000/- by way of cheques in the month of September, 2002 and March, 2003 by producing the endorsement made on the cheque books as Exs.P11 and P12. If really the hand loan was given by way of cheque, as reflected from the alleged entries made on cheque book slips, the same could not have been missed in the income tax returns. In fact, PW.1 admits that he is an income tax assessee but he has not mentioned about lending of money to the accused in his income tax returns. Though PW.1 in his evidence deposed that he advanced the said amount in the month of September, 2002 and in the month of March, 2003, but the endorsement on Ex.P12 which is the cheque book of Bank of Punjab Limited, show that a sum of Rs.5,000/- and Rs.3,250/were given to the accused by way of cheque on 08.11.2002. The said cheques which were given to the accused were encashed in the month of November, 2002 itself and a sum of Rs.23,750/- was encashed on 04.09.2002. Therefore, the version of the complainant with regard to giving hand loan to the accused in the month of November, 2002 appears to be incorrect.
Further, there is no evidence with regard to payment of
balance of Rs.1,00,000/- to the accused. Though the witness tried to say that the said amount was paid by way of cash but the same is not supported by any documents. In fact no evidence has been produced to show that the complainant was earning substantial amount so as to lent a sum of Rs.1,00,000/- by way of cash to the accused. Even assuming for a moment that the said amount paid from the amount out of the Hindu undivided family or from the business of his father, nothing prevented the complainant to show the same by filing the statements of accounts of the said business. If really the accused has taken hand loan from the complainant in the month of March, 2003, the question of he paying the same by giving a cheque dated 10.04.2003 would be quite improper. It is not the case of the complainant that on the date of borrowing of money in the month of March, 2003 the accused gave a post dated cheque 10.04.2003. It would be relevant to extract that portion of the evidence of PW.1 in chief and in cross, which read as under:
“I submit that during September, 2002 and March, 2003 the accused has borrowed hand loan to the tune of Rs.1,32,000/-.”
In cross examination the witness states as under: “ I am an income tax assessee. I have not mentioned about the lending of money in my income tax returns. There is no body present to witness the lending of money in the month of March, 2003 the accused has given me the cheques. (Witness has taken out a small chit and gave the answer)”.
Therefore, the version of the complainant as to the payment of money in the month of March, 2003 to the complainant appears to be incorrect and a doubt arises whether really the complainant had capacity to lent any amount in the month of September, 2002 and March, 2003 when he had no income of his own. In the
absence of any explanation as to when and how and under what circumstances cash of Rs.1,00,000/- was given to the accused, the plea of the accused appears to be probable and it can be said that he has rebutted the presumption by preponderance of probabilities.
The question as to the effect of complainant in not proving his source of income came up before the Apex Court in John K.Abraham v Simon C.Abraham and another[2] . It was a case where the accused was said to have borrowed Rs.1,50,000/- from the complainant and issued a cheque in discharge of the said amount, which was returned unpaid on presentation to the bank. The argument raised in the said case was that the complainant has no source of income to lend such amount. Dealing with the said aspect the Apex Court in Para No.9 of the said judgment held as under:
“In order to draw the presumption under Section 118 read along with 139 of the Act, the burden was heavily upon the complainant to have shown that he had required funds for having advanced the money to the accused; that the issuance of the cheque in support of the said payment advanced was true and that the accused was bound to make the payment as had been agreed while issuing the cheque in favour of the complainant.”
Since the evidence on record does not establish beyond reasonable doubt that the complainant had requisite source for lending the amount to the accused, the plea taken by the accused that these cheques were taken as security by the father of the complainant and the same were not returned in spite of payment of entire due amount cannot be brushed aside.
In view of the above, it is not necessary for this Court to go into the aspect with regard to non receipt of statutory notice sent by the complainant to the accused and the effect of non receipt of notice by the accused.
In view of the foregoing discussion, this Court is of the opinion that there are no merits in the appeal and the same is liable to be dismissed.
Accordingly, the appeal is dismissed, confirming the judgment dated 22.05.2006 passed in C.C.No.1592 of 2003 on the file of the X Additional Chief Metropolitan Magistrate, Secunderabad. As a sequel thereto, Miscellaneous Petitions, if any, pending shall stand closed.
C. PRAVEEN KUMAR, J
21.08.2014 gkv
[1] AIR 2010 (SC) 1898
[2] 2014 (2) ALD (Crl.) 61 (SC)
2 issues framed by the court
Whether the accused successfully rebutted the presumption of debt under Section 139 of the Negotiable Instruments Act due to lack of evidence regarding the complainant's source of funds.
Whether the voluntary nature of the alleged loan by the complainant (assisting his father) explains the absence of formal receipts and income tax filings.
Colour shows how this judgement treated each authority
Rangappa v. MohanRelied on¶23
AIR 2010 (SC) 1898 · Who else cites this
John K.Abraham v Simon C.AbrahamRelied on¶37
2014 (2) ALD (Crl.) 61 (SC)
3 provisions across 2 enactments
UNKNOWN APPPELLANT
UNKNOWN ACCUSED
C. PRAVEEN KUMAR
As recorded by the court registry
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