Bombay High Court
Shree Hemant Pavel Gracias S/O Bernardo ... vs Shree Socorro Santan Fernandes on 22 August, 2007
Equivalent citations: 2008(1)MHLJ505
JUDGMENT N.A. Britto, J.
1. This is a Complainant's appeal against the acquittal of the accused under Section 138 of the Negotiable Instruments Act, 1881(Act, for short) by Judgment dated 3-5-2006 of the learned J.M.F.C., Canacona.
2. The Complainant and the accused were known to each other from student days and both are contractors.
3. The case of the Complainant is that he had given a friendly loan to the accused in the sum of Rs. 4,00,000/- and towards discharge of his liability of repayment of the said loan, the accused had issued a cheque bearing No. 007187 dated 25-8-2005 drawn on Canacona Urban Co-operative Credit Society Ltd. but when the said cheque was presented by him for encashment with the Citizen Cooperative Bank Ltd. the same was returned with memorandum of the same date with endorsement that the funds were insufficient. The Complainant therefore sent a legal notice dated 9-9-2005 calling upon the accused to pay the amount due on the said cheque with interest at the rate of 18% per year within fifteen days from the receipt of the said notice which the accused received on 12-9-2005 but did not reply or comply with the same. The Complainant therefore filed the complaint on 11-10-2005 and examined himself in support of the same.
4. The case of the accused is that a false case has been filed against him. According to the accused, the accused had given to the Complainant a blank cheque with a promise that the Complainant would advance to the accused a sum of Rs. 1,00,000/- which the Complainant did not advance to the accused till date. The accused examined himself in support of his defence.
5. The learned Magistrate has concluded that the notice was vague or in other words the learned Magistrate has observed that he was convinced that it falls short to appraise the accused the actual debt or liability he was required to pay to the Complainant. Admittedly, the statutory notice dated 9-9-2005 was received by the accused on 12-9-2005 and the accused did not reply to the same. It is not the case of the accused that it was vague or he did not understand the contents of the same. It is the case of the accused that the Complainant had assured him that he was not going to file a complaint against him and presumably for this reason he did not reply to the same. The notice dated 9-9-2005 clearly states that the accused was owing to the Complainant an amount of Rs. 4,00,000/and that the accused had issued a cheque in favour of the Complainant bearing No. 007187 dated 25-8-2005 drawn on Canacona Urban Co-operative Credit Society for an amount of Rs. 4,00,000/- in favour of the Complainant. It also mentions that the said cheque was presented for encashment and that the same was dishonoured for insufficient funds. The notice also makes a demand calling upon the accused to pay the said sum of Rs. 4,00,000/- with interest at the rate of 18% within fifteen days from the receipt of the said notice and further states that failing the said payment the Complainant would be filing a criminal case against the accused under Section 138 of the said Act.
6. On behalf of the Complainant, learned Counsel Mr. Vaze has placed reliance on Central Bank of India and Anr. v. Saxons Farms and Ors. wherein the Apex Court has stated that the object of notice is to give a chance to the drawer of the cheque to rectify his omission and also to protect an honest drawer. The Apex Court has also stated that no form of notice is prescribed in Clause (b) of Section 138 of the Act but the requirement is that the notice should be given in writing within fifteen days of receipt of information from the bank regarding return of the cheque as unpaid and in the notice a demand for payment of the amount of the cheque has got to be made. In my view, the contents of the notice which have been reproduced herein above were more than sufficient to convey all that was required to be conveyed to the accused in connection with the advance made by the Complainant, the giving of the cheque by the accused towards the discharge of the said advance, the fact that the notice was returned dishonoured and that in case the accused did not pay the amount the Complainant would be forced to file a criminal complaint. The said notice was not short of anything at all and therefore in my view, the learned Magistrate was wrong in concluding that the said notice did not sufficiently appraise the accused about the actual debt or liability which the accused was required to pay to the Complainant.
7. The learned Magistrate has also concluded that the Complainant was not the payee of the cheque. As per the accused as well as the learned Magistrate, the Complainant Hemant Pavel Gracias is not the payee as contemplated by Clause (a) of Section 142 of the Act as the cheque issued was in the name of Pavel Hemant Gracias. The Complainant has admitted in his cross-examination that his correct name is Hemant Pavel Gracias and Pavel is his middle name. The Complainant has stated that the entire cheque was filled in by the accused though the accused has pleaded that he had given a blank cheque. The cheque was deposited in the account of the Complainant held by him in Citizen Co-operative Bank, Canacona. It was not the case of the said Bank that Pavel Hemant Gracias in whose name the cheque stood was a different individual, than Hemant Pavel Gracias who had an account with them. In any event, it must be observed that it is the very case of the accused that a blank cheque was given by the accused to the Complainant and as per the Complainant himself the cheque was written by the accused. There is nothing in the cross-examination of the Complainant even to remotely suggest that the other details, besides the signature of the accused, were filled in by the Complainant and this goes against the story of blank cheque. The learned Counsel on behalf of the accused contends that since the cheque was not in the name of the Complainant Hemant Pavel Gracias but was in the name of Pavel Hemant Gracias the same ought to have been returned by the Complainant to the accused to be duly corrected. In my view, the interchanging of the first and the middle name do not make the Complainant into a different individual and in any event that was not the case of the Bank of the Complainant who accepted the cheque and sent it for collection but it was dishonoured for a different reason, namely because the funds were insufficient. Very often many of us in this State we write our names with surname first. That does not make us different individuals. Middle name cannot be mistaken with father's name. Since the accused had admitted that the cheque was given by him to the Complainant there was no question of the Complainant not being the payee of the same only because there was a mix up of first and middle name of the Complainant. The contention of the accused and the finding of the learned Magistrate that the Complainant was not the payee in terms of Clause (a) of Section 142 of the Act cannot be upheld.
8. Admittedly, the Complainant did not plead in his complaint as to the date when he had advanced Rs. 4,00,000/- to the accused regarding which the accused had given the Complainant the said cheque. In cross-examination the Complainant admitted that he had not mentioned the details as to when the accused had borrowed from the Complainant the said sum of Rs. 4,00,000/-. The Complainant also stated that he had given the said sum in installments but had made no mention of it in his complaint. The Complainant also admitted that in the complaint he had not mentioned the mode of payment but when it was suggested to the Complainant that the Complainant had not given Rs. 4,00,000/- as a friendly loan to the accused in installments, the Complainant denied the same. Mr. Vaze, the learned Counsel on behalf of the Complainant has placed reliance on M.M.T.C. Ltd. and Anr. v. Medchl Chemicals and Pharma(P) Ltd. and Anr. and Deelip Apte v. Nilesh P. Salgaonkar and Anr. in support of his submission that there is no requirement in law that the Complainant must specifically allege in the complaint that there was a subsisting liability and that the burden of proving that there was no existing debt or liability was on the accused and this the accused have to discharge at the trial.
9. On the other hand, Mr. Nitin Sardessai, the learned Counsel on behalf of the accused has submitted that the Complainant produced no evidence as regards the advancement of the said loan of Rs. 4,00,000/- to the accused and in support of his submission has placed reliance on the case of Shri Sandesh K. Dessai and Anr. v. Shri Dattaraj Keshav (unreported decision of this Court dated 20-7-2005 in Criminal Revision Application No. 10 of 2005). In that case, this Court observed that there was a clear admission by the Complainant that there was no business transaction between the parties and therefore there was a clear rebuttal of presumption raised under Section 139 of the Act. This case stood on its own facts.
10. In K. Bhaskaran v. Sankaran Vaidhyan Balan and Anr. , the Apex Court has stated thus:
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 which the cheque bears. Section 139 of the Act enjoins on 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.
11. In M.M.T.C. Ltd. and Anr. v. Medchl Chemicals and Pharma(P) Ltd. and Anr. (supra) the Apex Court has stated as follows:
There is therefore no requirement that the complainant must specifically allege in the complaint that there was a subsisting liability. The burden of proving that there was no existing debt or liability was on the respondents. This they have to discharge in the trial. At this stage, merely on the basis of averments in the petitions filed by them the High Court could not have concluded that there was no existing debt or liability.
12. Admittedly, the accused received the statutory notice sent by the Complainant to the accused but did not react to the same till this date except for his bare statement that the Complainant had told him that the Complainant would not file a complaint against the accused. As per the accused, the blank cheque was given by him on 23-8-2005 upon the assurance that the Complainant would give to the accused a sum of Rs. 1,00,000/- on 24-8-2005 but when he went to collect the same he was told to wait for one more day but he failed to keep his promise. In my view, the case of the accused appears to be highly improbable. In case the Complainant was to advance a sum of Rs. 1,00,000/- to the accused there is no plausible explanation as to why the accused had to give a blank cheque to the Complainant. It would have been reasonable to assume that the accused would fill in the cheque for Rs. 1,00,000/- and hand over the same to the Complainant awaiting the Complainant to advance Rs. 1,00,000/- to him. The plea of the accused further appears to be improbable in that the accused did not react to the statutory notice sent by the Complainant to the accused inspite of the accused knowing that the blank cheque issued by him to the Complainant was misused by the latter not only by not giving him Rs. 1,00,000/- but further demanding Rs. 4,00,000/-. The silence on the part of the accused in not replying to the statutory notice is a strong circumstance which reflects the falsity of the case of the accused. It is again surprising that till date the accused has taken no action against the Complainant who according to him, has deceived him by not only not advancing Rs. 1,00,000/- but by misusing the cheque for Rs. 4,00,000/-.
13. In the case of Gorantla Venkateswara Rao v. Kolla Veera Raghava Rao and Anr. 2006 CRI. L. J. 1 the Andhra Pradesh High Court has held that the failure of the accused in giving reply to the legal notice issued by the Complainant is one of the strong circumstances to draw an inference that the accused borrowed the amount from the Complainant and the cheque was issued towards part payment of the legally enforceable debt. If the Complainant had fabricated and misused the blank cheque issued by the accused, the accused would have immediately protested and threatened the Complainant with legal action and would not wait till the end of the trial without taking any action against the Complainant. Adverse inference is required to be drawn against the accused for not replying to the notice. The contention of the learned Counsel of the accused that many times notices are not at all answered cannot be accepted. Those who don't answer may do so at their own risk, including drawing an adverse inference like the case at hand.
14. The accused has also admitted that he did not give any notice to his Bankers requesting his Bankers to stop the payment in respect of the cheque handed over to the Complainant. This again is an unusual conduct on the part of the accused. In case the accused had given to the Complainant a blank cheque and a sum of Rs. 1,00,000/- promised by the Complainant was not forthcoming, it was expected of the accused as a prudent businessman to have issued stop payment instructions to his Bankers and this conduct again shows the falsity of the case of the accused.
15. The cheque as per the Complainant was written by the accused and the fact that it was written with the middle name of the Complainant as his first name makes it more probable that it was written by the accused rather than the Complainant who would have written his correct name with his first name, first. As already stated there is nothing in the cross-examination of the Complainant even to remotely suggest that the cheque was completed in other respects, except for the signature of the accused, by the Complainant.
16. Reverting to the case of K. Bhaskaran v. Sankaran Vaidhyan Balan and Anr. (supra) the Apex Court has also stated that Section 139 of the Act enjoins on the Court to presume that the holder of the cheque received it for the discharge of any debt or liability and the burden is on the accused to rebut the aforesaid presumption. In the case of Hiten P. Dalal v. Bratindranath Banerjee the Apex Court, speaking through three learned Judges, held that Sections 138 and 139 of the Act require that the Court shall presume the liability of the drawer of the cheques for the amounts for which the cheques are drawn, and 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. 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. In other words, observed the Supreme Court, that provided the facts required to form the basis of a presumption of law exist, 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 to the contrary. The Supreme Court also noted that 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.
17. Although, the accused in this case has given his own evidence, the case of the accused appears to be far from probable. In case the Complainant had misused the blank cheque not only by not giving to the accused Rs. 1,00,000/- as promised but on the contrary by making a further claim of Rs. 4,00,000/-, the accused would have immediately reacted and reacted strongly to the same. On the contrary, the accused has not been able to make any dent into the case of the Complainant. It is true that the Complainant has not been able to produce any document to support his claim of the advance of Rs. 4,00,000/- to the accused, except for the cheque but this in itself was insufficient to displace the presumptions available to the Complainant. The Complainant might have been required to prove the same in case the accused was able to displace the said presumptions available to the Complainant by virtue of Sections 138 and 139 of the Act.
18. In the case of Shanaz D'Souza v. Sheikh Ameer Saheeb 2007(2) Bom.C.R. 362 which has been upheld by the Apex Court, reference was made to a Division Bench of this Court in T.H. Abdul Rehman v. T.E. Bharamchari 1948 BLR 219 wherein it was held that it was not necessary for the plaintiff to prove any consideration and the presumption under Section 118 continued in all its rigour. Assuming that the plaintiff did attempt to prove consideration, the mere fact that he failed to prove such consideration did not in any way relieve the defendant from his obligation in law to establish the contrary of the presumption raised by Section 118 of the Act. The learned Division Bench finally held that the plaintiff having failed to prove that consideration passed and the defendant also having failed to prove that he did not get the consideration, the presumption in favour of the plaintiff continued and the failure of the plaintiff was not sufficient to lead one to the conclusion that the presumption under Section 118 of the Act was rebutted. It was held that the said ratio would apply with greater force now for prosecutions under Section 138 of the Act. Once it is held that the accused had failed to rebut the presumptions, the learned Magistrate ought to have concluded that the presumption in itself tantamounted to proof of the case of the Complainant. In my view, therefore, the learned Magistrate was not at all justified in acquitting the accused under Section 138 of the Act.
19. The appeal, therefore, succeeds. The impugned Order is hereby set aside. The accused therefore is hereby held guilty under Section 138 of the Act.
20. Heard learned Counsel on behalf of the Complainant and the Accused. After the accused was convicted on 22-8-2007 the case was adjourned thrice at the request of the parties to enable them to work out a settlement. The learned Counsel have now informed that no settlement is possible.
21. Mr. Vaze, learned Counsel on behalf of the Complainant has left the matter of sentencing to the discretion of the Court. Mr. Sardessai, learned Counsel on behalf of the accused has submitted that the accused has two small minor children and has no other source of income except that the wife of the accused earns a living for the family by selling fish, and, considering the said facts appropriate sentence may be imposed upon the accused. Learned Counsel on behalf of the accused also submits that the Complainant is still at liberty to file a suit to recover the money due to him, and such a suit will not be barred by limitation.
22. As stated in para 3 of the complaint, the Complainant had given a friendly loan to the accused in the sum of Rs. 4,00,000/- and it is towards the discharge of that liability that the subject cheque dated 25-8-2005 was issued to the Complainant.
23. The Apex Court in the case of Suganthi Suresh Kumar v. Jagdeeshan has stated that if the amount had been paid to the Complainant, there perhaps would have been justification by imposing a flea bite sentence but where the amount covered by the cheque remained unpaid, it should be the look out of the trial Magistrates that the sentence for the offence under Section 138 should be of such a nature as to give proper effect to the object of legislation. No drawer of the cheque can be allowed to take dishonour of the cheque issued by him light heartedly. The very object of enactment of provisions like Section 138 of the Act would stand defeated if the sentence is of the nature passed by the trial Magistrate. It is a different matter if the accused paid the amount at least during the pendency of the case.
24. This Court in Basavraj D. Allayyanavar v. Santosh Kapadi 2007 (3) AIR Bom R 314 observed that though no formula of a fool-proof nature is possible to be laid down in awarding appropriate sentences, the sentence to be imposed should be proportionate to the crime committed and the same should be awarded by taking into consideration the facts and circumstances of each case. It is not only the rights of the criminals which are required to be looked into at the time of imposition of sentence, but also of the victims of the crime and the society at large, and also by considering the object sought to be achieved by the particular legislation. No material is placed for consideration of this Court in support of the plea for leniency. Complainant no doubt has a remedy of filing a civil suit to recover his money but that in normal course would take years to be decided. Considering that the Complainant has been deprived of, of his money, for a period of almost two years and also considering the object of legislation i.e. to inculcate faith in the efficacy of banking system and credibility in transacting business by cheques ends of justice would be met by sentencing the accused under Section 138 of the Act to undergo S.I. for four months and also directing him to pay a compensation of Rs. 4.60 lakhs and in default to undergo S. I. for six months. The accused to surrender before the learned trial Court within a period of four weeks to undergo the sentence.