Himachal Pradesh High Court
Sanjay Sankhyan vs Krishan Kumar Katoch on 26 February, 2024
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA Cr. Appeal No. 196 of 2012 Reserved on: 02.01.2024 .
Date of Decision: 26.02.2024
Sanjay Sankhyan ...Appellant.
Versus
Krishan Kumar Katoch ...Respondent.
Coram
r to
Hon'ble Mr Justice Rakesh Kainthla, Judge.
Whether approved for reporting?1 Yes.
For the Appellant : Mr. Alok Ranjan, Advocate, vice Mr. Paresh Sharma, Advocate.
For the Respondent : Ms Heena Chauhan, Advocate.
Rakesh Kainthla, Judge The present appeal is directed against the judgment dated 21.10.2011, passed by learned Judicial Magistrate First Class (JMFC) III, Shimla, vide which the respondent (accused before the learned Trial Court) was acquitted of the commission of an offence punishable under Section 138 of the Negotiable Instruments (NI) Act. (The parties shall hereinafter be referred 1 Whether reporters of Local Papers may be allowed to see the judgment? Yes.
::: Downloaded on - 26/02/2024 20:30:12 :::CIS 2to in the same manner as they were arrayed before the learned Trial Court for convenience).
.
2. Briefly stated, the facts giving rise to the present appeal are that the complainant filed a complaint before the learned Trial Court for the commission of an offence punishable under Section 138 of the NI Act. It was asserted that the accused borrowed ₹52,000/- from the complainant in June 2006 for his personal needs. The accused issued a post-dated cheque (Ex.CW-1/A) in the discharge of his legal liability. The complainant presented the cheque before his bank; however, it was returned with the endorsement 'exceeds arrangement'. The complainant served a notice (Ex.CW-1/C) upon the accused;
however, the accused failed to pay the amount despite the receipt of the notice. Hence, the complaint was filed for taking action against the accused as per the law.
3. Learned Trial Court found sufficient reasons to summon the accused for the commission of an offence punishable under Section 138 of the NI Act. When the accused appeared, a notice of accusation was put to him. The accused pleaded not guilty and claimed to be tried.
::: Downloaded on - 26/02/2024 20:30:12 :::CIS 34. The complainant examined himself (CW-1), Shankar Lal (CW-2), Manohar Lal (CW-3), Swaroop Sharma (CW-4) and .
Puran Chand (CW-5).
5. The accused in his statement recorded under Section 313 of Cr.P.C. denied the complainant's case in its entirety. He examined Puran Chand (DW-1) and himself (DW-2) in defence.
6. Learned Trial Court held that the issuance of the cheque was not disputed. There is a presumption that a cheque was issued in discharge of legal liability but this presumption is rebuttable. The statement of Puran Chand Thakur (DW-1) shows that the accused had ordered the electricity goods from the complainant. He issued a cheque towards the payment of the goods. The goods were not supplied. The defence evidence rebutted the presumption of consideration attached to the cheque. Resultantly, the accused was acquitted.
7. Being aggrieved from the judgment passed by the learned Trial Court, the present appeal has been filed. It has been asserted that the learned Trial Court misconstrued the provisions of the NI Act. The accused admitted the issuance of the cheque and there is a presumption that the cheque was ::: Downloaded on - 26/02/2024 20:30:12 :::CIS 4 issued in discharge of the legal liability. This presumption was duly supported by the evidence of the complainant. Learned .
Trial Court ignored the evidence of the complainant. The statement of Puran Chand (DW-1) was not satisfactory.
Therefore, it was prayed that the present appeal be allowed and the judgment passed by the learned Trial Court be set aside.
8. I have heard Mr. Alok Ranjan, learned counsel for the appellant-complainant and Ms. Heena Chauhan, learned counsel for the respondent-accused.
9. Mr. Alok Ranjan, learned counsel for the appellant-
complainant submitted that the learned Trial Court did not properly appreciate the material placed before it. There is a presumption that the cheque is issued in discharge of legal liability and the burden is upon the accused to rebut the presumption by leading satisfactory evidence. The version that the accused had purchased electrical goods from the shop of the complainant was propounded for the first time by examining Puran Chand (DW-1). This plea was never taken in the statement recorded under Section 313 Cr.P.C. and could not be taken subsequently. He relied upon the judgment of Prem Chand Vs. ::: Downloaded on - 26/02/2024 20:30:12 :::CIS 5 State of Maharashtra 2023 (5) SCC 522 in support of his submissions.
.
10. Ms Heena Chauhan, learned counsel for the accused-
respondent supported the judgment of the learned Trial Court and submitted that no interference is required with the same.
11. I have given considerable thought to the submissions
12. to at the bar and have gone through the record carefully.
The present appeal has been filed against a judgment of acquittal. The Hon'ble Supreme Court laid down the parameters for deciding an appeal against acquittal in Jafarudheen v. State of Kerala, (2022) 8 SCC 440, as under:-
"Scope of Appeal filed against the Acquittal:
25. While dealing with an appeal against acquittal by invoking Section 378 of the Cr.PC, the Appellate Court has to consider whether the Trial Court's view can be termed as a possible one, particularly when evidence on record has been analyzed. The reason is that an order of acquittal adds up to the presumption of innocence in favour of the accused. Thus, the Appellate Court has to be relatively slow in reversing the order of the Trial Court rendering acquittal. Therefore, the presumption in favour of the accused does not get weakened but only strengthened.
Such a double presumption that enures in favour of the accused has to be disturbed only by thorough scrutiny on the accepted legal parameters."
::: Downloaded on - 26/02/2024 20:30:12 :::CIS 613. This position was reiterated in Siju Kurian versus State of Karnataka 2023 online SCC 429, wherein it was held:-
.
"15. One of the main contentions raised by the learned counsel appearing for the appellant is to the effect that the High Court ought not to have interdicted with the judgment of the acquittal passed by the Trial Court and only in the event of the judgment of the Trial court was riddled with perversity and the view taken by the Trial Court was not a possible view, same could have been reversed by relying upon the judgment of this Court in case of Murugesan V. State through the Inspector of police(2012) 10 SCC 383 whereunder it came to be held as follows:
"33. The expressions "erroneous", "wrong" and "possible" are defined in the Oxford English Dictionary in the following terms:
"erroneous.-- wrong; incorrect.
wrong.--(1) not correct or true, mistaken.
(2) unjust, dishonest, or immoral.
possible.--(1) capable of existing, happening, or being achieved.
(2) that may exist or happen, but that is not certain or probable."
34. It will be necessary for us to emphasize that a possible view denotes an opinion, which can exist or be formed irrespective of the correctness or otherwise of such an opinion. A view taken by a court lower in the hierarchical structure may be termed as erroneous or wrong by a superior court upon a mere disagreement. But such a conclusion of the higher court would not take the view rendered by the subordinate court outside the arena of a possible view. The correctness or otherwise of any ::: Downloaded on - 26/02/2024 20:30:12 :::CIS 7 conclusion reached by a court has to be tested on the basis of what the superior judicial authority perceives to be the correct conclusion. A possible .
view, on the other hand, denotes a conclusion, which can reasonably be arrived at regardless of the fact where it is agreed upon or not by the higher court. The fundamental distinction between the two situations has to be kept in mind. So long as the view taken by the trial court can be reasonably formed, regardless of whether the High Court agrees with the same or not, the view taken by the trial court cannot be interdicted and that of the High Court supplanted over and above the view of the trial court."
16. It need not be restated that it would be open for the High Court to re-apprise the evidence and conclusions drawn by the Trial Court and in the case of the judgment of the trial court being perverse that is contrary to the evidence on record, then in such circumstances the High Court would be justified in interfering with the findings of the Trial Court and/or reversing the finding of the Trial Court. In Gamini Bala Koteswara Rao v. State of Andhra Pradesh (2009) 10 SCC 636: AIR 2010 SC 589 it has been held by this Court as under:
"14. We have considered the arguments advanced and heard the matter at great length. It is true, as contended by Mr Rao, that interference in an appeal against an acquittal recorded by the trial court should be rare and in exceptional circumstances. It is, however, well settled by now that it is open to the High Court to reappraise the evidence and conclusions drawn by the trial court but only in a case when the judgment of the trial court is stated to be perverse. The word "perverse" in terms as understood in law has been defined to mean "against the weight of evidence". We have to see accordingly as to whether the judgment of the trial ::: Downloaded on - 26/02/2024 20:30:12 :::CIS 8 court which has been found perverse by the High Court was in fact so.
17. The Appellate Court may reverse the order of acquittal .
in the exercise of its powers and there is no indication in the Code of any limitation or restriction having been placed on the High Court in the exercise of its power as an Appellate court. No distinction can be drawn as regards the power of the High Court in dealing with an appeal, between an appeal from an order of acquittal and an appeal from a conviction. The Code of Criminal Procedure does not place any fetter on the exercise of the power to review at large the evidence upon which the order of acquittal was founded and to conclude that upon that evidence the order of acquittal should be reversed.
18. In the case of Sheo Swarup v. King Emperor AIR 1934 PC 227, it has been held by the Privy Council as under:
But in exercising the power conferred by the Code and before reaching its conclusions upon fact, the High Court should and will always give proper weight and consideration to such matters as:
1) The views/opinion of the trial judge as to the credibility of the witnesses;
2) The presumption of innocence in favour of the accused;
3) The right of the accused to the benefit of any doubt; and
4) The slowness of an appellate court in disturbing a finding of fact arrived at by a judge who had the advantage of seeing the witnesses.
19. This Court has time and again reiterated the powers of the Appellate Court while dealing with the appeal against an order of acquittal and laid down the general principles in the matter of Chandrappa v. State of Karnataka (2007) 4 SCC 415 to the following effect:
::: Downloaded on - 26/02/2024 20:30:12 :::CIS 9"42. From the above decisions, in our considered view, the following general principles regarding the powers of the Appellate Court while dealing with an .
appeal against an order of acquittal emerge:
(1) An Appellate court has full power to review, reappreciate and reconsider the evidence upon which the order of acquittal is founded.
(2) The Criminal Procedure Code, 1973 puts no limitation, restriction or condition on the exercise of such power and an Appellate court on the evidence before it may reach its own conclusion, both on questions of fact and law. (3) Various expressions, such as, "substantial r and compelling reasons", "good and sufficient grounds", "very strong circumstances", "distorted conclusions", "glaring mistakes", etc. are not intended to curtail extensive powers of an Appellate court in an appeal against acquittal. Such phraseologies are more in the nature of "flourishes of language" to emphasise the reluctance of an Appellate court to interfere with acquittal than to curtail the power of the court to review the evidence and to come to its own conclusion.
(4) An Appellate court, however, must bear in mind that in case of acquittal, there is a double presumption in favour of the accused. Firstly, the presumption of innocence is available to him under the fundamental principle of criminal jurisprudence that every person shall be presumed to be innocent unless he is proved guilty by a competent court of law. Secondly, the accused having secured his acquittal, the presumption of his innocence is further ::: Downloaded on - 26/02/2024 20:30:12 :::CIS 10 reinforced, reaffirmed and strengthened by the trial court.
(5) If two reasonable conclusions are possible .
on the basis of the evidence on record, the Appellate court should not disturb the finding of acquittal recorded by the trial court."
14. The present appeal has to be adjudicated in the light of the judgments of the Hon'ble Supreme Court.
15. The accused (DW-2) stated in his examination-in-
chief that he had handed over a cheque of ₹52,000/- to Puran Chand for purchasing the articles from the complainant but the articles were not sent by the complainant. He asked Puran Chand to return the cheque; however, Puran Chand was told that the cheque was misplaced. He admitted in his cross-examination that the cheque (Ex.CW-1/A) was filled by him. Thus, it is apparent from the statement of the accused on oath that he has not disputed the issuance of the cheque and the fact that the cheque was filled by him. It was laid down by this Court in Naresh Verma vs. Narinder Chauhan 2020(1) Shim. L.C. 398 that where the accused had not disputed his signatures on the cheque, the Court has to presume that it was issued in discharge of legal liability and the burden would shift upon the accused to rebut the presumption. It was observed:-
::: Downloaded on - 26/02/2024 20:30:12 :::CIS 11"8. Once signatures on the cheque are not disputed, the plea with regard to the cheque having not been issued towards discharge of lawful liability, rightly came to be .
rejected by learned Courts below. Reliance is placed upon Hiten P. Dalal v. Bartender Nath Bannerji, 2001 (6) SCC 16, wherein it has been held as under:
"The words 'unless the contrary is proved' which occur in this provision make it clear that the presumption has to be rebutted by 'proof' and not by a bare explanation which is merely plausible. A fact is said to be proved when its existence is directly established or when upon the material before it the Court finds its existence to be so probable that a reasonable man would act on the supposition that it exists. Unless, therefore, the explanation is supported by proof, the presumption created by the provision cannot be said to be rebutted......"
9. S.139 of the Act provides that it shall be presumed unless the contrary is proved, that the holder of a cheque received the cheque of nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.
16. Similar is the judgment in Basalingappa vs. Mudibasappa 2019 (5) SCC 418 wherein it was held:
24. Applying the proposition of law as noted above, in the facts of the present case, it is clear that the signature on the cheque having been admitted, a presumption shall be raised under Section 139 that the cheque was issued in discharge of debt or liability.
17. This position was reiterated in M/S Kalamani Tex and another Versus P. Balasubramanian 2021 (5) SCC 283 wherein it was held:
::: Downloaded on - 26/02/2024 20:30:12 :::CIS 12"14. Adverting to the case in hand, we find on a plain reading of its judgment that the trial Court completely overlooked the provisions and failed to appreciate the .
statutory presumption drawn under Section 118 and Section 139 of NIA. The Statute mandates that once the signature(s) of an accused on the cheque/negotiable instrument are established, then these 'reverse onus' clauses become operative. In such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him. This point of law has been crystallized by this Court in Rohitbhai Jivanlal Patel v.
State of Gujarat (2019) 18 SCC 106, 18 in the following words:
"In the case at hand, even after purportedly drawing the presumption under Section 139 of the NI Act, the trial court proceeded to question the want of evidence on the part of the complainant as regards the source of funds for advancing loan to the accused and want of examination of relevant witnesses who allegedly extended him money for advancing it to the accused. This approach of the trial court had been at variance with the principles of presumption in law. After such presumption, the onus shifted to the accused and unless the accused had discharged the onus by bringing on record such facts and circumstances as to show the preponderance of probabilities tilting in his favour, any doubt on the complainant's case could not have been raised for want of evidence regarding the source of funds for advancing loan to the appellant-accused....."
15. Once the 2nd Appellant had admitted his signatures on the cheque and the Deed, the trial Court ought to have presumed that the cheque was issued as consideration for a legally enforceable debt. The trial Court fell in error when it called upon the Complainant-Respondent to explain the circumstances under which the appellants were liable to pay. Such an approach of the trial Court was ::: Downloaded on - 26/02/2024 20:30:12 :::CIS 13 directly in the teeth of the established legal position as discussed above and amounts to a patent error of law.
16. No doubt, and as correctly argued by senior counsel .
for the appellants, the presumptions raised under Section 118 and Section 139 are rebuttable in nature. As held in MS Narayana Menon v. State of Kerela (2006) 6 SCC 39, 32, which was relied upon in Basalingappa (supra), a probable defence needs to be raised, which must meet the standard of "preponderance of probability", and not a mere possibility. These principles were also affirmed in the case of Kumar Exports (supra), wherein it was further held that bare denial of passing of consideration would not aid the case of the accused."
18. This presumption was explained by the Hon'ble Supreme Court in Triyambak S. Hegde Versus Sripad 2022 (1) SCC 742 as under:
11. From the facts arising in this case and the nature of the rival contentions, the record would disclose that the signature on the documents at Exhibits P-6 and P-2 is not disputed. Exhibit P-2 is the dishonoured cheque based on which the complaint was filed. From the evidence tendered before the JMFC, it is clear that the respondent has not disputed the signature on the cheque.
If that be the position, as noted by the courts below a presumption would arise under Section 139 in favour of the appellant who was the holder of the cheque. Section 139 of the N.I. Act reads as hereunder:-
"139. Presumption in favour of holder- It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability."
12 Insofar as the payment of the amount by the appellant in the context of the cheque having been signed by the ::: Downloaded on - 26/02/2024 20:30:12 :::CIS 14 respondent, the presumption for the passing of the consideration would arise as provided under Section 118(a) of N.I. Act which reads as hereunder: -
.
"118. Presumptions as to negotiable instruments -
Until the contrary is proved, the following presumptions shall be made: -
(a) of consideration - that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration."
13. The above-noted provisions are explicit to the effect that such presumption would remain until the contrary is proved. The learned counsel for the appellant in that regard has relied on the decision of this Court in K. Bhaskaran vs. Sankaran Vaidhyan Balan &Anr., 1999 (7) SCC 510 wherein it is held as hereunder:
"9. As the signature in the cheque is admitted to be that of the accused, the presumption envisaged in Section 118 of the Act can legally be inferred that the cheque was made or drawn for consideration on the date on which the cheque bears. Section 139 of the Act enjoins the Court to presume that the holder of the cheque received it for the discharge of any debt or liability. The burden was on the accused to rebut the aforesaid presumption. The Trial Court was not persuaded to rely on the interested testimony of DW-1 to rebut the presumption. The said finding was upheld by the High Court. It is not now open to the accused to contend differently on that aspect."
14. The learned counsel for the respondent has however referred to the decision of this Court in Basalingappa vs. Mudibasappa, 2019 (5) SCC 418 wherein it is held as hereunder: -
::: Downloaded on - 26/02/2024 20:30:12 :::CIS 15"25. We having noticed the ratio laid down by this Court in the above cases on Sections 118 (a) and 139, we now summarise the principles enumerated by .
this Court in the following manner:
25.1. Once the execution of the cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.
25.2. The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of the preponderance of probabilities.
25.3. To rebut the presumption, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.
25.4. That it is not necessary for the accused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden.
25.5. It is not necessary for the accused to come into the witness box to support his defence.
26. Applying the proposition of law as noted above, in the facts of the present case, it is clear that the signature on the cheque having been admitted, a presumption shall be raised under Section 139 that the cheque was issued in discharge of debt or liability. The question to be looked into is as to whether any probable defence was raised by the accused. In cross-examination of PW1, when the specific question was put that the cheque was issued in relation to a loan of ₹25,000 taken by the accused, PW1 ::: Downloaded on - 26/02/2024 20:30:12 :::CIS 16 said that he does not remember. PW1 in his evidence admitted that he retired in 1997 on which date he received a monetary benefit of ₹8 lakhs, which was .
encashed by the complainant. It was also brought in the evidence in the evidence that in the year 2010, the complainant entered into a sale agreement for which he paid an amount of ₹4,50,000 to Balana Gouda towards sale consideration. Payment of ₹4,50,000 being admitted in the year 2010 and a further payment of a loan of ₹ 50,000 with regard to which Complaint No.119 of 2012 was filed by the complainant, copy of which complaint was also filed as Ext. D-2, there was a burden on the complainant to prove his financial capacity. In the years 2010-2011, as per the own case of the complainant, he made a payment of ₹18 lakhs. During his cross-
examination, when the financial capacity to pay ₹ 6 lakhs to the accused was questioned, there was no satisfactory reply given by the complainant. The evidence on record, thus, is a probable defence on behalf of the accused, which shifted the burden on the complainant to prove his financial capacity and other facts."
15. In that light, it is contended that the very materials produced by the appellant and the answers relating to lack of knowledge of property details by PW-1 in his cross-examination would indicate that the transaction is doubtful and no evidence is tendered to indicate that the amount was paid. In such an event, it was not necessary for the respondent to tender rebuttal evidence but the case put forth would be sufficient to indicate that the respondent has successfully rebutted the presumption.
16. On the position of law, the provisions referred to in Sections 118 and 139 of N.I. Act as also the enunciation of law as made by this Court needs no reiteration as there is no ambiguity whatsoever. In, Basalingappa vs. Mudibasappa (supra) relied on by the learned counsel for the respondent, though on facts the ultimate conclusion therein was against raising presumption, the facts and ::: Downloaded on - 26/02/2024 20:30:12 :::CIS 17 circumstances are entirely different as the transaction between the parties as claimed in the said case is peculiar to the facts of that case where the consideration claimed .
to have been paid did not find favour with the Court keeping in view the various transactions and extent of the amount involved. However, the legal position relating to presumption arising under Sections 118 and 139 of N.I. Act on a signature being admitted has been reiterated. Hence, whether there is a rebuttal or not would depend on the facts and circumstances of each case.
19. This position was reiterated in Tedhi Singh vs. Narayan Dass Mahant 2022 (6) SCC 735 wherein it was held:
7. It is true that this is a case under Section 138 of the Negotiable Instruments Act. Section 139 of the N.I. Act provides that the Court shall presume that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability. This presumption, however, is expressly made subject to the position being proved to the contrary. In other words, it is open to the accused to establish that there is no consideration received. It is in the context of this provision that the theory of 'probable defence' has grown. In an earlier judgment, in fact, which has also been adverted to in Basalingappa (supra), this Court notes that Section 139 of the N.I. Act is an example of reverse onus [see (2010) 11 SCC 441). It is also true that this Court has found that the accused is not expected to discharge an unduly high standard of proof.
It is accordingly that the principle has developed that all which the accused needs to establish is a probable defence. As to whether a probable defence has been established is a matter to be decided on the facts of each case on the conspectus of evidence and circumstances that exist.
::: Downloaded on - 26/02/2024 20:30:12 :::CIS 1820. Similar is the judgment in P Rasiya vs. Abdul Nazeer 2022 (3) Crimes 343 wherein it was observed:
.
"As per Section 139 of the N.I. Act, it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for discharge, in whole or in part, of any debt or other liability. Therefore, once the initial burden is discharged by the Complainant that the cheque was issued by the accused and the signature and the issuance of the cheque is not disputed by the accused, in that case, the onus will shift upon the accused to prove the contrary that the cheque was not for any debt or other liability. The presumption under Section 139 of the N.I. Act is a statutory presumption and thereafter, once it is presumed that the cheque is issued in whole or in part of any debt or other liability which is in favour of the Complainant/holder of the cheque, in that case, it is for the accused to prove the contrary."
21. This position was reiterated in Rajesh Jain v. Ajay Singh, (2023) 10 SCC 148: 2023 SCC OnLine SC 1275 wherein it was observed at page 161:
33. The NI Act provides for two presumptions: Section 118 and Section 139. Section 118 of the Act inter alia directs that it shall be presumed until the contrary is proved, that every negotiable instrument was made or drawn for consideration. Section 139 of the Act stipulates that "unless the contrary is proved, it shall be presumed, that the holder of the cheque received the cheque, for the discharge of, whole or part of any debt or liability". It will be seen that the "presumed fact" directly relates to one of the crucial ingredients necessary to sustain a conviction under Section 138. [The rules discussed hereinbelow are common to both the presumptions under Section 139 and ::: Downloaded on - 26/02/2024 20:30:12 :::CIS 19 Section 118 and are hence, not repeated--reference to one can be taken as reference to another]
34. Section 139 of the NI Act, which takes the form of a .
"shall presume" clause is illustrative of a presumption of law. Because Section 139 requires that the Court "shall presume" the fact stated therein, it is obligatory on the Court to raise this presumption in every case where the factual basis for the raising of the presumption had been established. But this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary as is clear from the use of the phrase "unless the contrary is proved".
35. The Court will necessarily presume that the cheque had been issued towards the discharge of a legally enforceable debt/liability in two circumstances. Firstly, when the drawer of the cheque admits issuance/execution of the cheque and secondly, in the event where the complainant proves that the cheque was issued/executed in his favour by the drawer. The circumstances set out above form the fact(s) which bring about the activation of the presumptive clause. [Bharat Barrel & Drum Mfg. Co. v. Amin Chand Payrelal [Bharat Barrel & Drum Mfg.
Co. v. Amin Chand Payrelal, (1999) 3 SCC 35] ]
36. Recently, this Court has gone to the extent of holding that presumption takes effect even in a situation where the accused contends that a blank cheque leaf was voluntarily signed and handed over by him to the complainant. [Bir Singh v. Mukesh Kumar [Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197 : (2019) 2 SCC (Civ) 309 : (2019) 2 SCC (Cri) 40] ]. Therefore, the mere admission of the drawer's signature, without admitting the execution of the entire contents in the cheque, is now sufficient to trigger the presumption.
37. As soon as the complainant discharges the burden to prove that the instrument, say a cheque, was issued by the accused for discharge of debt, the presumptive device under Section 139 of the Act helps shifting the burden on ::: Downloaded on - 26/02/2024 20:30:12 :::CIS 20 the accused. The effect of the presumption, in that sense, is to transfer the evidential burden on the accused of proving that the cheque was not received by the Bank .
towards the discharge of any liability. Until this evidential burden is discharged by the accused, the presumed fact will have to be taken to be true, without expecting the complainant to do anything further.
38. John Henry Wigmore [John Henry Wigmore and the Rules of Evidence: The Hidden Origins of Modern Law] on Evidence states as follows:
"The peculiar effect of the presumption of law is merely to invoke a rule of law compelling the Jury to reach the conclusion in the absence of evidence to the contrary from the opponent but if the opponent does offer evidence to the contrary (sufficient to satisfy the Judge's requirement of some evidence), the presumption 'disappears as a rule of law and the case is in the Jury's hands free from any rule'."
39. The standard of proof to discharge this evidential burden is not as heavy as that usually seen in situations where the prosecution is required to prove the guilt of an accused. The accused is not expected to prove the non-
existence of the presumed fact beyond reasonable doubt. The accused must meet the standard of "preponderance of probabilities", similar to a defendant in a civil proceeding. [Rangappa v. Sri Mohan [Rangappa v. Sri Mohan, (2010) 11 SCC 441 : (2010) 4 SCC (Civ) 477 : (2011) 1 SCC (Cri) 184 : AIR 2010 SC 1898] ]
40. In order to rebut the presumption and prove to the contrary, it is open to the accused to raise a probable defence wherein the existence of a legally enforceable debt or liability can be contested. The words "until the contrary is proved" occurring in Section 139 do not mean that the accused must necessarily prove the negative that the instrument is not issued in discharge of any debt/liability but the accused has the option to ask the Court to consider the non-existence of debt/liability so ::: Downloaded on - 26/02/2024 20:30:12 :::CIS 21 probable that a prudent man ought, under the circumstances of the case, to act upon the supposition that debt/liability did not exist.
.
[Basalingappa v. Mudibasappa [Basalingappa v. Mudibasap pa, (2019) 5 SCC 418 : (2019) 2 SCC (Cri) 571 : AIR 2019 SC 1983] ; see also Kumar Exports v. Sharma Carpets [Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513 : (2009) 1 SCC (Civ) 629 : (2009) 1 SCC (Cri) 823] ]
41. In other words, the accused is left with two options. The first option--of proving that the debt/liability does not exist--is to lead defence evidence and conclusively establish with certainty that the cheque was not issued in discharge of a debt/liability. The second option is to prove the non-existence of debt/liability by a preponderance of probabilities by referring to the particular circumstances of the case. The preponderance of probability in favour of the accused's case may be even fifty-one to forty-nine and arising out of the entire circumstances of the case, which includes: the complainant's version in the original complaint, the case in the legal/demand notice, complainant's case at the trial, as also the plea of the accused in the reply notice, his Section 313CrPC statement or at the trial as to the circumstances under which the promissory note/cheque was executed. All of them can raise a preponderance of probabilities justifying a finding that there was "no debt/liability". [Kumar Exports v. Sharma Carpets [Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513 : (2009) 1 SCC (Civ) 629 : (2009) 1 SCC (Cri) 823] ]
22. Therefore, the Court has to start with the presumption that the cheque was issued in discharge of legal liability and the burden is upon the accused to prove the contrary.
::: Downloaded on - 26/02/2024 20:30:12 :::CIS 2223. The accused claimed that the cheque was issued by him for purchasing the articles. It was submitted that this plea is .
not available to the accused as it was never taken in his statement recorded under Section 313 of Cr.P.C. Reliance was placed upon the judgment of Prem Chand (supra). However, this judgment only lays down that failure to explain the facts within the personal knowledge of the accused will be a circumstance against him. The question whether the failure to take a plea under Section 313 of Cr.P.C. would deprive the accused of the defence or not was considered by the Hon'ble Supreme Court of India in Darshan Singh Vs. State of Punjab 2024 SCC Online 17 wherein it was held that mere omission to take a specific plea is not sufficient to deny him a defence if the same can be made out otherwise. It was observed:-
39. It is trite law that the statement recorded u/s. 313 CrPC cannot form the sole basis of conviction.
Therefore, the presence of the appellant cannot be found solely based on his statement, notwithstanding the lack of independent evidence led by the prosecution. Further, this Court has previously considered the consequences when a particular defence plea was not taken by the accused u/s 313 CrPC and held that mere omission to take a specific plea by the accused when examined u/s 313 CrPC, is not enough to denude him of his right if the same can be made out otherwise. See: Periasami v. State of Tamil Nadu, (1996) 6 SCC 457" (Emphasis supplied) ::: Downloaded on - 26/02/2024 20:30:12 :::CIS 23
24. Therefore, the submission that the failure to take the plea in the statement recorded under Section 313 Cr.P.C. that the .
accused had issued the cheque towards the advance payment of the articles to be purchased from the complainant will not deprive him of taking this plea if the same is otherwise established on the record.
25. The complainant admitted in his cross-examination that he is running a shop of electronic articles. He stated that he had known the accused for 3-4 years. The accused used to take the electrical articles from his shop because the accused is an electricity contractor. Sometimes, the accused would visit the shop himself and sometimes he would send some other person.
Puran Chand was working with the accused. He denied that the cheque was handed over to him by Puran Chand. He denied that the accused had placed an order for supply of the material which was not fulfilled by him. He denied that no order was placed regarding the amount mentioned in the cheque. He denied that no amount was paid by him to the accused.
26. The cross-examination of the complainant shows that it was specifically suggested to him that the accused had ::: Downloaded on - 26/02/2024 20:30:12 :::CIS 24 placed an order for the electricity material. It was also suggested to him that the cheque was delivered to him by Puran Chand and .
not by the accused. Hence, the accused had taken a defence during the cross-examination of the complainant that the cheque was delivered by Puran Chand and not by the accused and the cheque was for the payment of electrical articles to be supplied by the complainant. This clearly shows that the plea taken by the accused was not an afterthought as is being submitted but this plea was being taken by the accused right from the beginning.
27. Puran Chand (DW-1) stated that he knew the accused. He was working with the accused w.e.f. 2006 till 2008.
The accused is an electrical contractor. He also knows the complainant who is running an electronic shop at Totu. The accused handed over a cheque of ₹52,000/- for purchasing electronic articles. The material was to be supplied within 15 days; however, the material was not supplied. When he asked the complainant as to why the material was not supplied, he (the accused) replied that the cheque should be taken; however, the accused did not return the cheque. The accused stated that the cheque was misplaced and would be returned as and when it ::: Downloaded on - 26/02/2024 20:30:12 :::CIS 25 would be traced. He stated in his cross-examination that he was not summoned by the Court and he was brought to the Court by .
the accused.
28. It is apparent from the cross-examination of this witness that his testimony was not challenged in the cross-
examination. He was just asked only two questions that he was not a summoned witness and he was brought by the accused. His statement that he had handed over the cheque to the complainant towards the advance payment for the material to be supplied by the complainant was not even suggested to be incorrect. Therefore, his testimony to this extent is to be accepted as correct. It was laid down by the Hon'ble Supreme Court in State of Uttar Pradesh Versus Nahar Singh 1998 (3) SCC 561 that where the testimony of a witness is not challenged in the cross-examination, the same cannot be challenged during the arguments. This position was reiterated in Arvind Singh Versus State of Maharashtra AIR 2020 (SC) 2451 and it was held:
[57] The House of Lords in a judgment reported as Browne v. Dunn 1894 6 Reports 67 (HL) considered the principles of appreciation of evidence. Lord Chancellor Herschell, held that it is absolutely essential to the proper conduct of a cause, where it is intended to suggest that a witness if not speaking the truth on a ::: Downloaded on - 26/02/2024 20:30:12 :::CIS 26 particular point, direct his attention to the fact by some questions put in cross-examination showing that imputation is intended to be made, and not to take his .
evidence and pass it by as a matter altogether unchallenged. It was held as under:
"Now, my Lords, I cannot help saying that it seems to me to be absolutely essential to the proper conduct of a cause, where it is intended to suggest that a witness is not speaking the truth on a particular point, to direct his attention to the fact by some questions put in cross-examination showing that that imputation is intended to be made, and not to take his evidence and pass it by as a matter altogether unchallenged, and then, when it is impossible for him to explain, as perhaps he might have been able to do if such questions had been put to him, the circumstances which it is suggested indicate that the story he tells ought not to be believed, to argue that he is a witness unworthy of credit. My Lords, I have always understood that if you intend to impeach a witness you are bound, whilst he is in the box, to give him an opportunity of making any explanation which is open to him; and, as it seems to me, that is not only a rule of professional practice in the conduct of a case but is essential to fair play and fair dealing with witnesses. Sometimes reflections have been made upon excessive cross-examination of witnesses, and it has been complained of as undue, but it seems to me that cross-examination of a witness which errs in the direction of excess may be far more fair to him than to leave him without cross-examination, and afterwards, to suggest that he is not a witness of truth, I mean upon a point on which it is not otherwise perfectly clear that he has had full notice beforehand that ::: Downloaded on - 26/02/2024 20:30:12 :::CIS 27 there is an intention to impeach the credibility of the story which he is telling."
[58] Lord Halsbury, in a separate but concurring .
opinion, held as under:
"My Lords, with regard to the manner in which the evidence was given in this case, I cannot too heartily express my concurrence with the Lord Chancellor as to the mode in which a trial should be conducted. To my mind, nothing would be more absolutely unjust than not to cross-examine witnesses upon evidence which they have given, so as to give them notice, and to give them an opportunity of explanation, and an opportunity very often to defend their own character, and, not having given them such an opportunity, to ask the jury afterwards to disbelieve what they have said, although not one question has been directed either to their credit or to the accuracy of the facts they have deposed to."
[59] This Court in a judgment reported as State of U.P. v. Nahar Singh, 1998 3 SCC 561, quoted from Browne to hold that in the absence of cross-examination on the explanation of the delay, the evidence of PW-1 remained unchallenged and ought to have been believed by the High Court. Section 146 of the Evidence Act confers a valuable right of cross-examining the witness tendered in evidence by the opposite party. This Court held as under:-
"13. It may be noted here that part of the statement of PW 1 was not cross-examined by the accused. In the absence of cross-examination on the explanation of the delay, the evidence of PW 1 remained unchallenged and ought to have been believed by the High Court. Section 138 of the Evidence Act confers a valuable right of cross- examining the witness tendered in evidence by the ::: Downloaded on - 26/02/2024 20:30:12 :::CIS 28 opposite party. The scope of that provision is enlarged by Section 146 of the Evidence Act by allowing a witness to be questioned:
.
(1) to test his veracity, (2) to discover who he is and what is his position in life, or (3) to shake his credit by injuring his character, although the answer to such questions might tend directly or indirectly to incriminate him or might expose or tend directly or indirectly to expose him to a penalty or forfeiture."
[60] This Court in a judgment reported as Muddasani Venkata Narsaiah (Dead) through LRs. v. Muddasani Sarojana, 2016 (12) SCC 288 laid down that the party is obliged to put his case in cross-examination of witnesses of the opposite party. The rule of putting one's version in cross-examination is one of essential justice and not merely a technical one. It was held as under:
"15. Moreover, there was no effective cross-
examination made on the plaintiff's witnesses with respect to the factum of execution of the sale deed, PW 1 and PW 2 have not been cross-
examined as to the factum of execution of the sale deed. The cross-examination is a matter of substance not of procedure one is required to put one's version in the cross-examination of the opponent. The effect of non-cross-examination is that the statement of the witness has not been disputed. The effect of not cross-examining the witnesses has been considered by this Court in Bhoju Mandal v. Debnath Bhagat [Bhoju Mandal v. Debnath Bhagat, 1963 AIR(SC) 1906]. This Court repelled a submission on the ground that the same was not put either to the witnesses or suggested before the courts below. A party is required to put ::: Downloaded on - 26/02/2024 20:30:12 :::CIS 29 his version to the witness. If no such questions are put the Court would presume that the witness account has been accepted as held in Chuni Lal .
Dwarka Nath v. Hartford Fire Insurance Co. Ltd. 1958 AIR(P&H) 440.
16. In Maroti Bansi Teli v. Radhabai [Maroti Bansi Teli v. Radhabai, 1945 AIR(Nag) 60, it has been laid down that the matters sworn to by one party in the pleadings not challenged either in pleadings or cross-examination by other party must be accepted as fully established. The High Court of Calcutta in A.E.G. Carapiet v. A.Y. Derderian 1961 AIR(Cal) 359 has laid down that the party is obliged to put his case in cross-examination of witnesses of the opposite party. The rule of putting one's version in cross-examination is one of essential justice and not merely a technical one. A Division Bench of the Nagpur High Court in Kuwarlal Amritlal v. Rekhlal Koduram 1950 AIR(Nag) 83 has laid down that when attestation is not specifically challenged and the witness is not cross-examined regarding details of attestation, it is sufficient for him to say that the document was attested. If the other side wants to challenge that statement, it is their duty, quite apart from raising it in the pleadings, to cross-examine the witness along those lines. A Division Bench of the Patna High Court in Karnidan Sarda v. Sailaja Kanta Mitra 1940 AIR(Pat) 683 has laid down that it cannot be too strongly emphasised that the system of administration of justice allows of cross- examination of opposite party's witnesses for the purpose of testing their evidence, and it must be assumed that when the witnesses were not tested in that way, their evidence is to be ordinarily accepted. In the aforesaid circumstances, the High Court has gravely erred in law in reversing the ::: Downloaded on - 26/02/2024 20:30:12 :::CIS 30 findings of the first appellate court as to the factum of execution of the sale deed in favour of the plaintiff."
.
29. Therefore, the testimony of Puran Chand (DW-1) that he had handed over the cheque to the complainant towards the advance payment for the material to be supplied to the accused has to be accepted as correct.
30. It was suggested to Puran Chand that he was not a summoned witness and he was brought by the accused. This will not make much difference. It was laid down by the Hon'ble Supreme Court in Vidhyadhar v. Manikrao, (1999) 3 SCC 573: 1999 SCC OnLine SC 294 that the statement of a witness cannot be discarded on the ground that he was not summoned by the Court. It was observed at page 589:-
"32. In view of the above, even though the name of Defendant 2 was not mentioned in the list of witnesses furnished by the plaintiff, he was properly examined as a witness and his testimony was not open to any criticism on the ground that he was produced as a witness without being summoned through the Court and without his name being mentioned in the list of witnesses."
31. Hence, the fact that Puran Chand was not a summoned witness is not a cogent reason to discard his testimony.
::: Downloaded on - 26/02/2024 20:30:12 :::CIS 3132. The accused stated in his cross-examination that the electrical material was to be fitted in Type-II Quarters located at .
Prospect Hill, Kamna Devi, Boileauganj. He purchased the articles subsequently from Chandigarh. He could not produce the bill as he had destroyed the original bill. The electrical material was to be fixed under a Government contract but he had not placed any record regarding awarding of the contract. It was submitted based on these statements that in the absence of any bill and the award letter, his testimony that he had to buy some articles from the complainant and the cheque was issued towards its payment, cannot be accepted. This submission is not acceptable. The complainant never disputed in his cross-
examination that the accused used to buy the electrical articles from him. Therefore, the relationship between the complainant and the accused was never disputed by the complainant.
Further, as already stated, the statement of Puran Chand was not challenged in the cross-examination and it is not permissible to challenge the same at this stage.
33. Therefore, the learned Trial Court had taken a reasonable view that the defence evidence rebutted the presumption of consideration, which could have been taken on ::: Downloaded on - 26/02/2024 20:30:12 :::CIS 32 the material placed before it. No interference is required with the same in the exercise of the appellate jurisdiction against the .
order acquitting the accused.
34. No other point was urged.
35. Therefore, the judgment passed by the learned Trial Court is fully sustainable and no interference is required with the same.
36. to In view of the above, the present appeal fails and the same is dismissed.
(Rakesh Kainthla) Judge 26th February, 2024 (Chander) ::: Downloaded on - 26/02/2024 20:30:12 :::CIS