Bombay High Court
Datta Sonaji Doiphode vs Deepak Walmik Meshram on 16 January, 2018
Author: Rohit B. Deo
Bench: Rohit B. Deo
1 apeal349.06
IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
NAGPUR BENCH, NAGPUR.
CRIMINAL APPEAL NO.349 OF 2006
Datta sonaji Doiphode,
Aged - Major,
Occupation - Agriculturist,
R/o Borkhedi, Post - Mop.,
Tahsil - Risod, District - Washim. .... APPELLANT
VERSUS
Deepak Walmik Meshram,
Aged - Major,
R/o Khairlanji, Post - Pindkepar,
Tahsil - Sakoli, District - Bhandara. .... RESPONDENT
______________________________________________________________
Shri R.N. Ghuge, Advocate for the appellant,
None for the respondent.
______________________________________________________________
CORAM : ROHIT B. DEO, J.
DATE OF RESERVING THE JUDGMENT
: 10-10-2017
DATE OF PRONOUNCING THE JUDGMENT : 16-01-2018
JUDGMENT :
The appellant, who is the original complainant in Summary Criminal Case 915/2004 instituted under Section 138 of the Negotiable Instruments Act, 1881 ("Act" for short), is challenging the judgment and order dated 10-4-2006 passed by the learned Judicial ::: Uploaded on - 16/01/2018 ::: Downloaded on - 17/01/2018 02:21:14 ::: 2 apeal349.06 Magistrate First Class, Buldana, by and under which the respondent/accused is acquitted of offence punishable under Section 138 of the Act.
2. Heard Shri R.N. Ghuge, learned Counsel for the appellant. Since there was no appearance on behalf of the respondent-accused, at the request of the Court the learned Additional Public Prosecutor Shri H.R. Dhumale has fairly and ably assisted the Court.
3. The gist of the complaint is that the accused requested the complainant to extend hand loan of Rs.80,000/- in May 2003 since the accused was in financial difficulty. In view of the friendly relationship, the complainant extended hand loan of Rs.80,000/- which the accused agreed to refund as and when demanded.
4. Towards refund of the loan the accused issued cheque dated 25-11-2003 bearing 071551 for Rs.30,000/-, cheque dated 28-11-2003 bearing cheque 071554 for Rs.9,500/-, cheque dated 25-12-2003 bearing 071552 for Rs.20,000/- and cheque dated 25-1-2004 bearing 071553 for Rs.20,000/-, all drawn on Bhandara Rural Bank, Sakoli Branch. The cheques were, however, handed over ::: Uploaded on - 16/01/2018 ::: Downloaded on - 17/01/2018 02:21:14 ::: 3 apeal349.06 to the complainant at Buldana on 25-1-2004.
5. The four cheques were duly presented by the complainant for encashment, to the Akola District Central Co-operative Bank Limited. The four cheques were dishonoured on the ground of insufficient funds in the account of the accused. The complainant issued statutory notice dated 18-3-2004, the reply was received on 24-3-2004, however, the accused did not remit the amount covered by four cheques and hence, the complaint.
6. In the verification statement, the date of the return of memo is mentioned as 10-3-2004.
7. The complainant examined himself as C.W.1. The examination-in-chief is in consonance with the complaint.
It is brought on record that the notice does not state that Rs.80,000/- was given as hand loan nor is the date on which the hand loan was given, disclosed in the notice. It is further not disclosed that four cheques of different amount were given by the accused. The notice (Exhibit 44) does not bear the name or signature of the Advocate. The suggestion that the complainant signed statutory notice ::: Uploaded on - 16/01/2018 ::: Downloaded on - 17/01/2018 02:21:14 ::: 4 apeal349.06 (Exhibit 44) to create record, is denied. The complainant could not assign any reason why the accused issued cheques for Rs.79,500/- as against the hand loan of Rs.80,000/-. The suggestion that the accused had given blank cheques and that the contents were filled in by the complainant, is denied. The suggestion that the cheques were not issued towards payment of legally enforceable debt, is denied. It is suggested to C.W.1 that since there was drought and the complainant was in need of digging the well, the accused gave the four cheques as donation, which suggestion is denied.
8. The accused examined himself and deposed that the complainant approached him in the year 2003 and asked for donation to dig the well in the village in view of the drought. The accused has deposed that he handed over blank cheques without the date, amount or name and cautioned the complainant that a written intimation be given to the accused before filling in the amount and depositing the cheque, which written intimation was not given. The receipt of the statutory notice is denied.
In the cross-examination, it is extracted that the annual income of the accused is Rs.25,000/-. The accused, however, denied the suggestion that since he needed money, the complainant extended ::: Uploaded on - 16/01/2018 ::: Downloaded on - 17/01/2018 02:21:14 ::: 5 apeal349.06 hand loan.
9. In the the statement under Section 313 of the Criminal Procedure Code, the accused stated, in response to question 9, that it was the complainant who demanded hand loan and he issued the cheques which were blank. However, the accused did not dispute the signature on the cheques. The learned Magistrate was conscious of the statutory presumptions under Section 118 and 139 of the Act. The only ground on which the learned Magistrate has held that the statutory presumptions are duly rebutted by the accused, is the inability of the complainant to explain why towards the discharge of the loan of Rs.80,000/-, the accused issued the four cheques for total amount of Rs.79,500/-. This difference of Rs.500/- has persuaded the learned Magistrate to hold that the statutory presumptions under Sections 118 and 139 of the Act stand rebutted, although the learned Magistrate has disbelieved the defence of the accused that four cheques were issued as donation.
10. In Rangappa vs. Sri Mohan reported in (2010) 11 SCC 441, the Hon'ble Apex Court, while holding that since the signature on the cheque is not disputed, the statutory presumption under Section ::: Uploaded on - 16/01/2018 ::: Downloaded on - 17/01/2018 02:21:14 ::: 6 apeal349.06 139 of the Act is activated, which the accused could not rebut since the defence of lost cheque was not probable, observed thus :
"27. 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 causes and the defendant-accused cannot be expected to discharge an unduly high standard or proof.
28. 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."
11. In K.N. Beena vs. Muniyappan and another reported in ::: Uploaded on - 16/01/2018 ::: Downloaded on - 17/01/2018 02:21:14 ::: 7 apeal349.06 (2001) 8 SCC 458, the Hon'ble Apex Court, refers to Hiten P. Dalal v. Bratindranath Banerjee and holds, on the factual matrix, that bare denial of the liability in reply notice is not sufficient to shift the burden of proof on the complainant to prove that the cheque was issued for a debt or liability.
12. The Three Judges Bench judgment of the Hon'ble Apex Court in Hiten P. Dalal v. Bratindranath Banerjee reported in (2001) 6 SCC 16 considers the scope and ambit of Section 139 of the Act thus :
"22. Because both Sections 138 and 139 require that the court "shall presume" the liability of the drawer of the cheques for the amounts for which the cheques are drawn, as noted in State of Madras vs. A. Vaidyanatha Iyer, 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. "It introduces an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the accused" (Ibid. at p.65, para 14). Such a presumption is a presumption of law, as distinguished from a presumption of fact which describes provisions by which the court "may presume" a certain state of affairs. Presumptions are rules of evidence and do not conflict with the presumption of innocence, because by the latter all that is meant is that the prosecution is obliged to prove the case against the accused beyond reasonable doubt. The obligation on the prosecution may be discharged with the help of presumptions of law or fact unless the accused adduces evidence showing the reasonable possibility of the ::: Uploaded on - 16/01/2018 ::: Downloaded on - 17/01/2018 02:21:14 ::: 8 apeal349.06 non-existence of the presumed fact.
23. In other words, provided the facts required to form the basis of a presumption of law exists, no discretion is left with the court but to draw the statutory conclusion, but this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary. A fact is said to be proved when, "after considering the matters before it, the court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists".
Therefore, the rebuttal does not have to be conclusively established but such evidence must be adduced before the court in support of the defence that the Court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of reasonability being that of the 'prudent man'.
24. Judicial statements have differed as to the quantum of rebutting evidence required. In Kundan Lal Rallaram v. Custodian, Evacuee Property, this Court held that the presumption of law under Section 118 of Negotiable Instruments Act could be rebutted, in certain circumstances, by a presumption of fact raised under Section 114 of the Evidence Act. The decision must be limited to the facts of that case. The more authoritative view has been laid down in the subsequent decision of the Constitution Bench in Dhanvantrai Balwantrai Desai vs State of Maharashtra AIR where this Court reiterated the principle enunciated in State of Madras vs Vaidyanath Iyer and clarified that the distinction between the two kinds of presumption lay not only in the mandate to the Court, but also in the nature of evidence required to rebut the two. In the case of a discretionary presumption the presumption if drawn may be rebutted by an explanation which "might reasonably be true and which is consistent with the innocence" of the accused. On the other hand in the case of a mandatory presumption "the burden resting on the accused person in such a ::: Uploaded on - 16/01/2018 ::: Downloaded on - 17/01/2018 02:21:14 ::: 9 apeal349.06 case would not be as light as it is where a presumption is raised under Section 114 of the Evidence Act and cannot be held to be discharged merely by reason of the fact that the explanation offered by the accused is reasonable and probable. It must further be shown that the explanation is a true one. 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. (AIR p.580, para 12)"
[See also V.D. Jhingan vs. State of Uttar Pradesh; Sailendranath Bose vs. The State of Bihar and Ram Krishna Bedu Rane vs. State of Maharashtra.]"
13. The nature of the initial burden of proof on the accused to rebut the statutory presumption under Section 139 is explained by the Hon'ble Apex Court in M.S. Narayana Menon Alias Mani v. State of Kerala and another reported in (2006) 6 SCC 39 thus :
"29. In terms of Section 4 of the Evidence Act whenever it is provided by the Act that the Court shall presume a fact, it shall regard such fact as proved unless and until it is disproved. The words 'proved' and 'disproved' have been defined in Section 3 of the Evidence Act (the interpretation clause) to mean:
" 'Proved' - A fact is said to be proved when, after ::: Uploaded on - 16/01/2018 ::: Downloaded on - 17/01/2018 02:21:14 ::: 10 apeal349.06 considering the matters before it, the court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists.
'Disproved' - A fact is said to be disproved when, after considering the matters before it the Court either believes that it does not exist, or considers its non-existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it does not exist."
30. Applying the said definitions of 'proved' or 'disproved' to principle behind Section 118(a) of the Act, the Court shall presume a negotiable instrument to be for consideration unless and until after considering the matter before it, it either believes that the consideration does not exist or considers the non-existence of the consideration so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that the consideration does not exist. For rebutting such presumption, what is needed is to raise a probable defence. Even for the said purpose, the evidence adduced on behalf of the complainant could be relied upon.
31. A Division Bench of this Court in Bharat Barrel & Drum Manufacturing Company v. Amin Chand Payrelal albeit in a civil case laid down the law in the following terms:
"12. Upon consideration of various judgments as noted hereinabove, the position of law which emerges is that once execution of the promissory note is admitted, the presumption under Section 118(a) would arise that it is supported by a consideration. Such a presumption is rebuttable. The defendant can prove the non-existence of a consideration by raising a probable defence. If the defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the plaintiff who will be obliged to prove it as a matter of fact and upon its failure to prove would disentitle him ::: Uploaded on - 16/01/2018 ::: Downloaded on - 17/01/2018 02:21:14 ::: 11 apeal349.06 to the grant of relief on the basis of the negotiable instrument. The burden upon the defendant of proving the non-existence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies. In such an event, the plaintiff is entitled under law to rely upon all the evidence led in the case including that of the plaintiff as well. In case, where the defendant fails to discharge the initial onus of proof by showing the non-existence of the consideration, the plaintiff would invariably be held entitled to the benefit of presumption arising under Section 118(a) in his favour. The court may not insist upon the defendant to disprove the existence of consideration by leading direct evidence as the existence of negative evidence is neither possible nor contemplated and even if led, is to be seen with a doubt.5"
This Court, therefore, clearly opined that it is not necessary for the defendant to disprove the existence of consideration by way of direct evidence.
32. The standard of proof evidently is preponderance of probabilities. Inference of preponderance of probabilities can be drawn not only from the materials on records but also by reference to the circumstances upon which he relies.
38. If for the purpose of a civil litigation, the defendant may not adduce any evidence to discharge the initial burden placed on him, a 'fortiori' even an accused need not enter into the witness box and examine other witnesses in support of his defence. He, it will bear repetition to state, need not disprove the prosecution case in its entirety as has been held by the High Court.
45. Two adverse inferences in the instant case are liable to be drawn against the Second Respondent:
(i) He deliberately has not produced his books of accounts.::: Uploaded on - 16/01/2018 ::: Downloaded on - 17/01/2018 02:21:14 :::
12 apeal349.06
(ii) He had not been maintaining the statutory books of accounts and other registers in terms of the bye-laws of Cochin Stock Exchange.
Moreover, the onus on an accused is not as heavy as that of the prosecution. It may be compared with a defendant in a civil proceeding."
14. If the evidence on record is considered on the anvil of the enunciation of law by the Hon'ble Apex Court, it is manifest that the accused has failed to rebut the statutory presumptions under Sections 118 and 139 of the Act. The learned Magistrate was pleased to hold, and the finding is unexceptionable, that the defence of the accused that he issued the four cheques as donation, is not believable. It is true that the defence need not be conclusively established. However, the Court must be satisfied on the basis of the evidence adduced that the defence is reasonably probable. I am satisfied, that even if the test of preponderance of probabilities is applied, the accused failed to raise a defence which creates doubt about the existence of legally enforceable debt.
15. Be it noted, that in response to question 9 in the statement recorded under Section 313 of the Criminal Procedure Code, the accused stated that it was the complainant who requested for a hand ::: Uploaded on - 16/01/2018 ::: Downloaded on - 17/01/2018 02:21:14 ::: 13 apeal349.06 loan. The signature of the accused on the four cheques is not in dispute. The defence taken in the statement recorded under Section 313 of the Criminal Procedure Code is inconsistent with the suggestions given to the complainant that in view of the drought in the village, the complainant requested the accused to give a donation to enable digging of well.
16. The judgment and order impugned is clearly unsustainable in law. The learned Magistrate has committed a serious error of law in not correctly appreciating the import and implication of statutory presumptions on the anvil of the position of law settled by the Hon'ble Apex Court. The judgment and order impugned occasions miscarriage of justice and is accordingly set aside.
17. The accused is convicted for offence punishable under Section 138 of the Act and is sentenced to payment of fine of Rs.1,59,000/- and in default to undergo simple imprisonment for period of six months.
If the fine is recovered, the same shall be paid to the complainant as compensation.
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14 apeal349.06 The appeal is allowed.
JUDGE adgokar ::: Uploaded on - 16/01/2018 ::: Downloaded on - 17/01/2018 02:21:14 :::