Andhra HC (Pre-Telangana)
Nagisetty Nagaiah vs State Of A.P. And Anr. on 16 July, 2004
Equivalent citations: 2004(2)ALD(CRI)455, 2004CRILJ4107
ORDER C.V. Ramulu, J.
1. The only point that is urged by the learned counsel for the appellant was that the lower Court erred in coming to the conclusion that Ex.P1 cheque was not issued for the discharge of legally enforceable debt, since the complainant appellant failed to discharge his initial burden by establishing that Ex.P1 was issued for discharge of a legally enforceable debt or liability and as such, the presumption under Section 139 of the Negotiable Instruments Act (for short 'the Act') cannot be drawn.
2. The parties are hereinafter referred to as arrayed by the trial Court. Though the complaint filed by the complainant was dismissed on several grounds, the said point alone was urged by the learned counsel for the appellant in this appeal. The trial Court in view of the reported decisions of this Court in B. Mohan Krishna v. Union of India, 1996 Cri LJ 636 and C.B. Lingam v. Vitta Murali Krishna Murthy, (1997) 2 Andh LT (Crl) 100, held that the initial burden is on the accused to establish that the cheque was issued in discharge of a legally enforceable debt and then only the burden shifts to the accused to establish that the cheque issued was not of the nature referred to in Section 138 of the Act. Whereas, it was contended on behalf of the complainant before the Court below that the evidence of P.Ws. 1 to 3 is consistent as to advancing of amount by the complainant to the accused and issuing of Ex.P1 cheque by the accused. Therefore, presumption can be drawn that the cheque was issued for discharging a legally enforceable debt.
3. In B. Mohan Krishna's case (1996 Cri LJ 636) (Andh Pra) (supra), it was held as under :
"........ the rebuttal presumption under Section 139 of the N.I. Act operates only in favour of a payee or a holder in due course or in favour of a person, without consideration, became the holder of the cheque......... the initial burden is on the complainant to show that the cheque was issued for the discharge of a legally enforceable debt or other liability. Then, the burden shifts to the respondent to establish that the cheque issued was not of the nature referred to in Section 138........"
4. In C.B. Lingam's case (1997 (2) Andh LT (Cri) 100) (supra), it was held as follows :
"........when once the respondent takes the plea that the cheque was not issued for the discharge of legally enforceable debt or liability, then the complainant is bound to prove the circumstances under which the cheque was given in his favour and the same is issued in discharge of legally enforceable debt. Unless this initial burden is discharged by the complainant, the presumption available under Section 139 cannot be made use of against the respondent........."
Whereas, the learned counsel for the appellant herein contends that in view of the authoritative pronouncements of the apex Court in Hiten P. Dalai, and K.N. Beena v. Muniyappan, the judgments of this Court referred to above have no relevance and there is no initial burden on the part of the complainant to prove that the cheque was issued for discharging a legally enforceable debt in view of the provisions contained in Sections 118 and 139 of the Act. The Court has to presume that the cheque has been issued for discharging a debt or liability, which presumption of course, could be rebutted by the accused by proving to the contra. Mere denial or rebuttal by the accused in the reply notice by the complainant is not enough. The accused had to prove by cogent evidence that there was no debt or liability. In the instant case, the respondent accused not having discharged his burden, the lower Court ought not to have held that the complainant has not discharged his initial burden and as such, the presumption under Section 139 of the Act cannot be invoked.
5. In Hiten P. Dalal's case (2001 Cri LJ 4647) (SC) (supra) it was held as under :
"21. The appellant's submission that the cheque were not drawn for the "discharge in whole or in part of any debt or other liability" is answered by the third presumption available to the Bank under Section 139 of the Negotiable Instruments Act. This section provides that :
"139. 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."
The effect of these presumptions is to place the evidential burden on the appellant of proving that the cheque was not received by the Bank towards the discharge of any liability.
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 v. 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 non existence of the presumed fact.
36. The brunt of the evidence given by the appellant's witnesses was as to the nature of the transactions between the appellant and the Bank. However, not one of the defence witnesses gave any evidence in support of the only defence of the appellant, namely, that the four cheques in question had been given towards intended transactions which did not take place. No one said why the appellant had executed and delivered the particular cheques to the Bank or that the appellant had not given the four cheques to discharge his debts to the Bank. Nor did any defence witness claim that the cheques were given on account of any ready forward transactions. In fact DW 1 in cross examination admitted that it was not the practice of a purchasing party to hand over cheques in advance. The appellant alone could have said why he had admittedly executed the four cheques, handed them over to the Bank and never asked for their return. He did not choose to do so.
38. The burden was on the appellant to disapprove (sic disprove) the presumptions under Sections 138 and 139, a burden which he failed to discharge at all. The averment in the written statement of the appellant was not enough. Incidentally, the defence in the written statement that the four cheques were given for intended transactions was not the answer given by the appellant to the notice under Section 138. Then he had said that the cheques were given to assist the Bank for restructuring (Ext. H). It was necessary for the appellant at least to show on the basis of acceptable evidence either that his explanation in the written statement was so probable that a prudent man ought to accept it or to establish that the effect of the material brought on the record, in its totality, rendered the existence of the fact presumed, improbable (vide Trilok Chand Jain v. State of Delhi). The appellant has done neither. In the absence of any such proof the presumptions under Sections 138 and 139 must prevail.
6. In K.N. Beena's case (2001 Cri LJ 4745) (supra), the apex Court following its earlier decision in Hiten P. Dalal's case (2001 Cri LJ 4647) (supra), held as under :
"........It appears that the learned Judge had lost sight of Sections 118 and 139 of the Negotiable Instruments Act. Under Section 118, unless the contrary was proved, it is to be presumed that the negotiable instrument (including a cheque) had been made or drawn for consideration. Under Section 139 the Court has to presume, unless the contrary was proved, that the holder of the cheque received the cheque for discharge, in whole or in part, of a debt or liability. Thus, in complaints under Section 138, the Court has to presume that the cheque had been issued for a debt or liability. This presumption is rebuttable. However, the burden of proving that a cheque had not been issued for a debt or liability is on the accused.........."
7. There may not be any dispute as to the ratio laid down in the above decisions. But, the basic facts of this case do not inspire the confidence of the Court to convict the accused for the offence punishable under Section 138 of the Act, whether the accused led by evidence or not in view of the presumption under Section 139 of the Act and rebutted the contentions of the complainant. P.W. 1 stated in his evidence that the accused had dealings with him and he fell due Rs. 88,888/- and that he demanded for payment personally. The accused postponed the payment on several occasions. The accused issued a cheque for Rs. 88,888/- drawn on Vysya Bank Limited, Nandyal on 20-7-1996. Therefore, as seen from the evidence in the chief examination, it is the assertion of P.W. 1 that the accused had dealings with him and fell due Rs. 88,888/- and he demanded personally and the accused postponed payment on several occasions. In the complaint also it was averred that the accused fell due to the complainant a sum of Rs. 88,888/- and in spite of repeated demands, the accused had not paid any amounts to the complainant. Finally, the accused issued Ex.P1 cheque. It is interesting to note that during the cross examination, P.W. 1 stated that on the date of Ex.P1 itself, he gave cash. On the request of the accused, he gave cash of Rs. 88,888/-. He has not obtained any pronote. He did not remember that he withdrew the amount from the Bank on the date of Ex.P.1 or not. He admitted that a blank cheque was issued and the same was filled up by third party and not by the accused. The evidence of P.W. 3 shows that on 20-7-1996 itself the complainant paid cash and the accused gave cheque Ex.P1 in his presence. Therefore, in view of the evidence of P.W. 1 during cross examination and the evidence of P.W. 3, the version of the complainant that he demanded several times and the accused postponed the payment and finally issued Ex.P1 cheque was inconsistent. The nature of dealings which the accused was having with the complainant were also not explained. Further, it is interesting to note that Ex.P1 was issued on 20-7-1996 whereas Ex.D1 letter marked through P.W. 2 shows that the accused herein had addressed a letter on 6-7-1996 itself to the Bank stating as under :
"I have noticed that out of my Cheque Book a Blank cheque bearing No. 486359 but signed by me is missing. I have not filled up the cheque. I request you stop payment, if presented to you by anybody."
Whereas, in the evidence of P.Ws. 1 and 3 it is stated that the amount was paid to the accused on 20-7-1996 and the cheque was issued to P.W. 1 on 20-7-1996 itself.
8. As seen from above, the letter Ex.D1 was addressed 15 days prior to the issuance of Ex.Pl cheque. Therefore, the very laying of the complaint itself does not inspire confidence of the Court, whether the complainant has discharged the initial burden as held by this Court or not. The accused respondent was examined under Section 313 of Cr.P.C. He denied the issuance of the cheque and admitted the contents of the reply notice Ex.P6. He also denied that there was any debt due to P.W. 1.
9. In Ex.P4 legal notice, the complainant merely stated that the accused due to him an amount of Rs. 88,888/- and in spite of repeated demands, the accused had not paid any amount to him. Finally, the accused issued a cheque for Rs. 88,888/- on 20-7-1996 and on presentation of the same in the Bank, it was returned with an endorsement that payment was stopped at the instance of the drawer. The complainant did not say anything in Ex.P4 for what purpose he had given the amount to the accused. He merely stated that the accused due an amount of Rs. 88,888/- to him. But, while examined as P.W. 1, he developed his version and stated that himself and accused were class I contractors and had dealings with him and the accused fell due an amount of Rs. 88,888/-. In the cross examination, he had stated that he gave cash to the accused and he does not remember whether he had withdrawn the amount from the bank on the date of Ex.P1. The complainant also deposed that one of the persons belonging to the accused had filled up Ex.Pl. He did not say the name of that person or any other particulars nor examined that person. In Ex.P6 reply notice, the accused categorically denied of having any amount due to the complainant and he emphatically stated that there was no occasion or any necessity for him to become indebted to the complainant. He also stated that there is professional rivalry between him and the complainant because both of them are contractors. He further stated that he has been undertaking contract works at various places and therefore, for the facility of disbursing the amount while executing the contract works, he was in the habit of keeping the blank cheques signed by him, so that they may be used by his representatives on the field for encashment and payment. Without his knowledge, the cheque in question, which was a blank cheque but signed by him, missed. He immediately i.e. on 6-7-1996 addressed a letter to the Manager, Vysya Bank Ltd., Nandyal requesting to stop payment. He stated that he failed to know how the complainant had managed to obtain possession of that cheque and who had filled up that cheque. With regard to professional rivalry, P.W. 1 admitted that on 20-5-1996 himself, accused and others filed tenders in the Circle Office, Irrigation Department, Giddalur and the accused got the said contract, but he denied the suggestion that since the accused secured the said contract, he bore grudge against him.
10. Firstly, the fact that the amount due by the accused in the business transaction between the complainant and the accused was not proved. The complainant did not file any account books, not even a scrap of paper, to show that there were business transactions between himself and the accused and the accused due to him an amount of Rs. 88,888/-. No income-tax return or audit report has been placed before the Court to construe that there was any legally enforceable debt to inspire that the factual basis for raising presumption under Section 139 of the Act had been established. Secondly, a close examination of Ex.P1 cheque reveals that the signature on the cheque was in blue ink, but it was filled up altogether with a different ink (black), admittedly, by a third person, which was not properly explained by the complainant. Even otherwise, the accused had sent a letter dated 6-7-1996 i.e. much prior to the date of Ex.P1 cheque dated 20-7-1996. It is admitted by the complainant that the amount was paid to the accused on 20-7-1996 and on that day itself, the cheque was issued. Therefore, the complainant failed to make out any case against the accused and thus the question of raising legal presumption under Section 139 of the Act does not arise. It is obligatory on the part of the Court to raise this presumption in every case where the factual basis for the raising of presumption had been established. In this context, the Court below has rightly held that the initial burden on the part of the complainant was not discharged , since, in this case, the factual basis for raising such presumption had not been established. Under these circumstances, it cannot be said that the factual basis for raising of the presumption under Section 139 of the Act has been established. 'Initial' means that which begins or stands at the beginning, i.e. the factual basis for raising such a presumption as per law. In this case, such facts are missing.
11. In almost identical situation, the apex Court in C. Antony v. K.G. Raghavan Nair, (2002) 2 Andh LD (Crl) 880 : (2003 Cri LJ 411) held that :
"8. Then again, it is to be noticed that the trial Court also took into consideration the plea of the appellant that the cheque in question was given in a blank state to Chandrappa Panicker and he being a close friend of the respondent in collusion with each other misused the said cheque to defraud the appellant. The trial Court also observed that non examination of Chandrappa Panicker has also weakened the case of the respondent especially in view of the fact that the Court had noticed that the said Chandrappa Panicker was seen in the premises of the Court house at the time of trial. This is also relevant factor on which the trial Court relied upon but the High Court did not consider the effect of the said default on the part of the respondent. The third circumstance relied upon by the trial Court is in regard to the difference in the ink found in the body of the cheque as well as in the signature of the appellant. It is the case of the respondent that the appellant had filled up the cheque in its entirety including its signature and had brought the cheque to the office of Vijay Kumar to be handed over to the respondent but the learned Magistrate on a perusal of the cheque, found that the ink used in the body of the cheque was different from the ink used in the signature on the cheque, therefore, he drew an inference that the case put forth by the respondent was doubtful, hence, could not be accepted. Even in this regard the High Court has failed to apply its mind. Having considered the findings delivered by the trial Court in regard to the above 3 points, we are of the opinion that the trial Court was justified in coming to the said conclusion because of the above three deficiencies pointed out by the trial Court, and that the respondents complaint ought to fall. In such a situation, we are of the opinion that the High Court fell in error in reappreciating the case of the respondent on a totally different perspective without coming to the conclusion that the findings given by the trial Court on the above three points are either irrelevant or contrary to material on record. Therefore, following the view laid down by this Court in the above said cases of Bhim Singh Rup Singh (supra) and Dharamdeo Singh (supra), we are of the opinion that the High Court was in error in reversing the findings of acquittal recorded by the trial Court."
12. The facts of the instant case are almost similar to the one in the above case. Therefore, it cannot be said that the trial Court was wrong in rejecting the plea of the complainant and acquitting the accused.
The initial burden does not mean that it is a burden on the part of the complainant to prove that there was a legally enforceable debt or liability by leading evidence. The mere basic facts of the case should inspire the invocation of the legal presumption under Section 139 of the Act. In the absence of such factual basis, the lower Court cannot be said to have erred in holding that the initial burden was not discharged by the complainant, which is absent in this case, as seen above.
13. For all the above reasons, the Criminal Appeal fails and the same is accordingly dismissed.