Madras High Court
Mohan vs Viswanathan
Author: N. Anand Venkatesh
Bench: N. Anand Venkatesh
In the High Court of Judicature at Madras
Date of Reserving Order 27.06.2018
Date of Pronouncing Order
05.07.2018
CORAM:
THE HONOURABLE MR.JUSTICE N. ANAND VENKATESH
Criminal Revision Case No.1739 of 2011
Mohan ... Petitioner/Appellant/Accused
Vs.
Viswanathan ...Respondent/Respondent/Complainant
Prayer:
Criminal Revision Petition filed under Section 397 and 401 of Criminal Procedure Code, against the conviction imposed in the judgment dated 18.01.2010 made in C.A.No.82 of 2009 on the file of the Principal Sessions Court, Coimbatore confirming the conviction imposed in the judgment dated 18.06.2009 made in C.C.No.14 of 2006 on the file of the Judicial Magistrate No.II, Coimbatore by allowing this Criminal Revision Petition.
For Petitioner : Mr. N. Manokaran
For Respondent : Mr.A. Sundaravadhanan
for Mr.G.K.Muthukumar
******
O R D E R
This Criminal Revision Petition has been filed against the order in Criminal Appeal No.82 of 2009 passed by the learned Principal Sessions Judge/Fast Track Court No.II, Coimbatore, confirming the order of conviction and sentence passed by the learned Judicial Magistrate No.II, Coimbatore in C.C.No.14 of 2006.
2. The brief facts are: The respondent filed a complaint against the petitioner for an offence punishable under Section 138 of the Negotiable Instruments Act, 1881. The case of the respondent is that the petitioner approached the respondent and asked for a hand loan to meet his urgent family expenses and for business purposes. On 19.03.2004, the respondent given a hand loan of Rs.2,00,000/- to the petitioner and on the very same day a promissory note was executed by the petitioner in favour of the respondent. Thereafter, the petitioner paid only a sum of Rs.20,000/- towards interest and the entire principal amount remained unpaid. Out of the total amount of Rs.2,00,000/-, the petitioner issued a cheque, dated 20.04.2005 for a sum of Rs.1,40,000/- in favour of the respondent. When the cheque was deposited by the respondent, it was dishonoured and the same was intimated to the respondent on 23.04.2005 by way of Debit Advice Memo with an endorsement "insufficient funds". The respondent informed about the dishonour of cheque to the petitioner and the petitioner requested the respondent to present the cheque again. Accordingly, the cheque was again presented for collection on 12.05.2005 and it was again dishonoured on 16.05.2005 for "insufficient funds". Thereafter, the respondent issued a statutory notice, dated 11.06.2005 calling upon the petitioner to pay the cheque amount within 15 days from the date of receipt of the notice. The petitioner in spite of the receipt of the notice neither gave a reply for the same nor paid the cheque amount. The respondent left with no other option, filed a complaint for an offence punishable under Section 138 of the Negotiable Instruments Act, 1881, against the petitioner. On the side of the respondent, his Power of Attorney Agent was examined as PW1 and the respondent examined himself as PW2 and 11 documents were marked as Ex.P1 to Ex.P11. On the side of the petitioner, one Mr.Gopal, was examined as DW1 and the petitioner examined himself as DW2.
3. The trial court after considering the oral and documentary evidence found the petitioner guilty for an offence under Section 138 of the Negotiable Instruments Act, 1881, and sentenced him to undergo simple imprisonment for one year and to pay fine of Rs.5,000/- in default, to undergo three months simple imprisonment. Aggrieved by the said order, the petitioner filed an appeal in Criminal Appeal No.82 of 2009 and the Appellate Court on consideration of the entire materials dismissed the appeal and confirmed the order passed by the learned trial Judge, by its order, dated 18.01.2010. Aggrieved by the same, the present Criminal Revision Petition has been filed before this Court.
4. The learned counsel for the petitioner would submit that the cheque in question was given as a security to one Nehru towards a vehicle loan and the petitioner got introduced to Nehru through one Mr.Gopal, who is the friend of the petitioner. According to the learned counsel, the cheque has been misused and a false complaint has been given against the petitioner. The learned counsel for the petitioner further contended that the petitioner did not borrow any loan from the respondent. The learned counsel further contends that though the promissory note (Ex.P2) and the cheque (Ex.P3) contains the signature of the petitioner, it was never executed by him in favour of the respondent.
5. The learned counsel further contended that a reading of the evidence of PW1 and PW2 would clearly show that there was no certainty in the amount that was said to have been borrowed by the petitioner and in the evidence, PW1 states that this loan transaction is reflected in the Income Tax Returns and whereas, Ex.P10 which was marked through PW2, which is the Income Tax Returns for the relevant period, the loan in question was never reflected. The learned counsel further contended that though it is the specific case of the complainant that the promissory note was executed by the petitioner, in the evidence of PW2, he clearly states that one Mr.Nandakumar was the person who filled up both Ex.P2 and Ex.P3. The learned counsel for the petitioner further contends that DW1-Mohan, who was the person who introduced Mr.Nehru to the petitioner, has specifically spoken about the earlier transaction wherein, this cheque was given as a security. The learned counsel, therefore, would contend that a reading of the evidence of PW1, PW2 and DW1 clearly makes out a probable defence taken by the petitioner and thereby the petitioner has discharged the initial burden cast upon him under Section 139 of the Negotiable Instruments Act, 1881 and the burden shifted on the respondent/complainant who did not prove that the cheque was issued in discharge of the debt given by him to the petitioner.
6. The learned counsel for the petitioner relied upon the following judgments in order to substantiate his case:
(i) In P. Krishnasamy v. Delta Wearables, represented by its Partners R. Thiruvengadam and Others, reported in (2012) 2 MLJ (Crl) 331.
(ii) In Bharat Barrel and Drum Manufacturing Company v. Amin Chand Payrelal, reported in (1999) 3 SCC 35.
(iii) In Kali Ram v. State of Himachala Pradesh, reported in AIR 1973 SC 2773.
7. Per contra, the learned counsel for the respondent would submit that the petitioner did not discharge the onus cast upon him under Section 139 of the Negotiable Instruments Act, 1881 and the evidence of witnesses on the side of the complainant clearly establishes that the cheque in question was indeed issued towards a legally recoverable debt. The learned counsel for the respondent contended that the petitioner who was harping about the earlier transaction with Mr.Nehru, ought to have examined him as a witness. The fact that he did not examine Mr.Nehru, and even in the cross examination he categorically stated that he is not going to examine Mr.Nehru clearly shows that this Mr.Nehru is an imaginary person and an adverse inference must be drawn against the petitioner for not having examined the best witness that was available on his side. The learned counsel for the respondent further contended that both the Court's below have properly appreciated the evidence available on record and have come to the conclusion that the petitioner has committed an offence under Section 138 of the Negotiable Instruments Act, 1881 and therefore, this Court sitting in a revisional jurisdiction cannot interfere with the said order unless there is illegality or perversity in the order.
8. This Court has carefully considered the submissions made on either side and also the entire oral and documentary evidence available on record. The undisputed facts in this case is that the petitioner's signature is found both in the promissory note (Ex.P2) as well as the cheque (Ex.P3). Under these circumstances, this Court has to see whether the petitioner has discharged the onus cast upon him under Section 139 of the Negotiable Instruments Act, 1881. It is well settled by a catena of decisions of the Apex Court and of this Court that the accused person while rebutting the presumption under Section 139 of the Negotiable Instruments Act, 1881, 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 burden shifts on the complainant and thereafter it is for the complainant to establish that the cheque was issued towards a legally enforceable debt or liability. For the purpose of establishing a probable defence, the accused can rely on the materials submitted by the complainant in order to raise such a defence and if he is able to successfully do so, the accused need not even get into the box or examine any person from his side as a witness.
9. The learned counsel for the petitioner relied upon the following judgment in the case of Bharat Barrel and Drum Manufacturing Company v. Amin Chand Payrelal reported in (1999) 3 SCC 35. Para 12 is extracted hereunder.-
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 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 relief's. 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. The bare denial of the passing of the consideration apparently does not appear to be any defence. Something which is probable has to be brought on record for getting the benefit of shifting the onus of proving to the plaintiff. To disprove the presumption, the defendant has to bring on record such facts and circumstances upon consideration of which the court may either believe that the consideration did not exist or its non-existence was so probable that a prudent man would, under the circumstances of the case, shall act upon the plea that it did not exist. We find ourselves in the close proximity of the view expressed by the Full Benches of the Rajasthan High Court and the Andhra Pradesh High Court in this regard.
10. Eventhough this judgment discusses about the presumption under Section 118(a) of the Negotiable Instruments Act, 1881, the very same principle will apply under Section 139 of the Negotiable Instruments Act, 1881. "The use of the phrase until the contrary is proved" in Section 118(a) of the Negotiable Instruments Act, 1881 and the use of the words "unless the contrary is proved" in Section 139 of the Negotiable Instruments Act, 1881 makes it clear that presumption that are raised under both the provisions are rebuttable. The accused standing a trial under Section 138 of the Negotiable Instruments Act, 1881 has two options. The first option is to show that debt or liability does not exist or the other option is to show that in the particular facts and circumstances of the case, the non-existence of the debt or liability is so probable that a prudent man will come to the conclusion that no debt or liability existed. It is for the accused person to choose the option.
11. In the present case, the accused has chosen the second option viz., to establish on the facts and circumstances of the case that the non-existence of the debt is so probable that this Court must come to a conclusion that no debt or liability existed between him and the complainant.
12. The learned counsel for the petitioner in order to establish the probable defence, brought to the notice of this court, the specific case of the respondent as projected in the legal notice and the complaint on the one hand and the evidence of PW2, on the other hand. In the legal notice and complaint it is stated that the cheque was issued by the complainant upon filling all the particulars but whereas the evidence of PW2 speaks otherwise. In the evidence of PW2 it is stated as follows:
"fhnrhiy gpuhkprhp nehl; Mfpatw;iw xU ee;jFkhh; vd;gth;jhd; vGjpf;bfhLj;jhh;/ butpd;a{ !;lhk;gpy; cs;s ifbaGj;Jf;Fk; brf;fpy; cs;s ifbaGj;Jf;Fk; tpj;jpahrk; ,Ug;gjhfr; brhd;dhy; rhpay;y/ ,uz;Lf;Fk; tpj;jpahrk; ,y;iy/ ,uz;L fhnrhiyfs; kl;Lk;jhd; nkhfd; bfhLj;jhh;/ Kjy; tprhuizapYk; Kjypy; FWf;F tprhuiz bra;jnghJk; fhnrhiy vGjpath; bgaiu ehd; Fwpg;gp[l;Lr; brhy;ytpy;iy vd;why; rhpjhd;/ jw;nghJjhd; ee;jFkhh; vd;W brhy;ypapUf;fpnwd;/ ee;jFkhh; vd;gth; vjphp nkhfDf;F ez;guh vd;W vdf;Fj; bjhpahJ/ vjphpa[ld; te;j re;jh;g;gj;jpy;jhd; ee;jFkhiu vdf;F bjhpa[k;/ filrpahf vg;nghJ ghh;j;njd; vd;W vd;dhy; "hgfg;gLj;j ,aytpy;iy/ ee;jFkhUld; vdf;F ntW tut[ bryt[ vJt[k; ,y;iy/ ee;jFkhUf;Fk;. nkhfDf;Fk; vd;d cwt[ vd;W vdf;F bjhpahJ/ gpuhkprhp nehl;oy; ee;jFkhh; rhl;rp ifbaGj;J nghl;Ls;shh;/ mjd; gpwF. mtiu re;jpj;jpUf;fpnwd;/ Mdhy;. khpahij epkpj;jkhfj;jhd; re;jpj;jpUf;fpnwd;/ vdf;F ntW tifapy; rhl;rp brhy;tjw;F ,Jtiu te;jjpy;iy/"
13. By pointing out the same, the learned counsel for the petitioner submitted that though the cheque was signed by the petitioner, the same has not been filled up by the petitioner and admittedly according to the respondent/complainant it was filled up by one Mr.Nandhakumar, who was not examined in this case. In this case, since the execution of the cheque is under dispute, unless it is duly proved by the Respondent/Complainant that the cheque was filled up by the petitioner and issued to him, the presumption under Section 118(a) cannot be invoked in favour of the Respondent/Complainant.
14. For the purpose of substantiating this submission, the learned counsel relied upon the following judgment in the case of P.Krishnasamy v. Delta Knit Wearables, represented by its Partners R. Thiruvengadam and Others, reported in (2012) 2 MLJ (Crl.) 331. Para 14, 15, 21 and 22 is extracted hereunder.-
"14. There is no controversy before this Court that the cheque was signed by the third respondent on behalf of the first respondent company and that the said cheque was drawn as against the account relating to the first respondent company. In order to raise the presumption under Section 139 of the Act, it is needless to point out that the due execution of the Negotiable Instrument namely the cheque in question was raised by the third respondent is to be proved. In this case, though it is the positive case of the complainant that the cheque was completely filled up indicating the due execution of the same and was handed over to the complainant by the third respondent, the contention of the third respondent is that the cheque was never issued to the complainant and it was issued only to Mr.Chellappan as a blank cheque, the same was later on filled up and the services of the complainant has been utilized by Mr. Chellappan. Section 118 of the Act, speaks of certain presumptions as to Negotiable Instruments. One of the presumptions is in respect of the consideration. It states that the Court shall presume that the Negotiable Instrument was made or drawn for consideration, and that such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration. This presumption, of course is rebuttable. In order to raise the said presumption, it is absolutely necessary for the complainant that the Negotiable Instrument was duly made, that means it was duly executed by the respondents. In this case, since the execution of the cheque is under dispute, unless it is duly proved by the complainant that the cheque was filled up by the third respondent and issued by him, the presumption under Section 118(a) cannot be invoked in favour of the complainant.
15. Yet another presumption which can be raised is in respect of the date of cheque. Section 118(b) of the Act states that the Court shall presume that the Negotiable Instrument bearing a date was made or drawn on such date. These presumptions shall remain until the contrary is proved as provided under Section 118 of the Act. But the proviso to Section 118 of the Act cannot be lost sight off which states as follows:
"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;
(b) as to date.- that every negotiable instrument bearing a date was made or drawn on such date;
(c) as time of acceptance.- that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity;
(d) as to time of transfer.-that every transfer of a negotiable instrument was made before its maturity;
(e) as to order or indorsements.- that the indorsements appearing upon a negotiable instrument were made in the order in which they appear thereon;
(f) as to stamp.- that a lost promissory note, bill of exchange or cheque was duly stamped;
(g) that holder is a holder in due course.-that the holder of a negotiable instrument is a holder in due course;
Provides that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him."
21. The learned counsel would further submit that the admission of the signature in the cheque itself would give rise to such presumption under Section 139 of the Act. But I find it very difficult to persuade myself to agree with the said argument. Signing a blank cheque will not amount to due execution. Due execution means to give a cheque in its complete form.
22. Of course, it is true that by issuing a cheque which is a blank cheque with signature alone, there can be presumption of authorisation in favour of the person to whom the same was issued to fill up the same to his convenience. But here in this case, it is the case of the third respondent that the said blank cheque was not issued to the complainant but issued to one Mr. Chellappan for some other purpose. Thus, the very issuance of cheque in favour of the complainant itself has not been proved andso, none of the presumptions as contemplated in the Act, can be raised in this case.
15. The learned counsel for the petitioner submits that this judgment will apply to the facts of the present case also since it is the case of the petitioner that the cheque was issued as a security to one Mr. Nehru, towards a vehicle loan and that cheque has been misused in the present case by filling it up through some other person called Mr.Nandhakumar and therefore, it cannot be said that there was due execution of the cheque by the petitioner in favour of the respondent.
16. The learned counsel for the petitioner further developed his arguments by placing reliance on the evidence of PW1, who is the Power of Attorney agent of the complainant who in his evidence states as follows:
"vjphp nkhfd; vdf;F bjhpa[k;/ thjp Ml;nlhbkhigy; bjhHpy; bra;fpwhh;/ ehd; mjpy; fzf;fhsuhf ,Uf;fpnwd;/ vjphp thjpaplk; U:/2 yl;rk; fldhf th';;fpdhh;/ me;j bjhif 19/03/2004?y; th';fpdhh;/ mjw;F mth; 36% tl;o jUtjhf xg;g[f;bfhz;L xU flDWjp rPl;L 19/03/2004?k; njjpapnyna thjp tp!;tehjd; ngUf;F U:/2 yl;rj;jpw;F vGjpf;bfhLj;jhh;/ me;j flDWjpr;rPl;L th/rh/M/2 nghl;nlh efy; Vw;fdnt tHf;F nghLk;nghJ jhf;fy;bra;ag;gl;lJ/ tl;o vjphp nkw;go flDf;fhf U:/20.000-? jpUg;gp brYj;jpa[s;shh;/ ghf;fpj;bjhif vjphp a{dpad; ng';f; Mg; ,z;oah. gyf;fhL fpisf;fhf fhnrhiy vz;/8086689 vd;w vz; cs;s fhnrhiy U:/1.40.000-?f;fhdij 20/04/2005?k; njjpapl;L thjp tp!;tehjd; bgaUf;F g{h;j;jp bra;J ifbahg;gkpl;L bfhLj;jhh;/ me;j mry; fhnrhiy th/rh/M/3 vjphp bfhLf;Fk;nghJ tN:Yf;F nghl;lhy; gzk; fpilj;JtpLk; vd brhd;dhh;/" kw;Wk;.
"ehd; thjp tp!;tehjdplk; 2 tUl fhykhf ntiy ghh;j;J tUfpnwd;/ 2004 Kjy; ntiy bra;fpnwd;/ vjphp ,t;tHf;F fhnrhiyia thjp tp!;tehjdplk; bfhLj;jhh;/ vd; Kd;dpiyapy;jhd; vjphp fhnrhiyapy; vGjpf;bfhLj;jhh;/"
17. PW1 in his evidence categorically states that Ex.P2 and Ex.P3 was filled up and given by the petitioner to the respondent at the time when he took the loan from the respondent. Whereas, PW2 who is the complainant states that in his evidence that Ex.P2 and Ex.P3 was filled up by another person called Mr.Nandhkumar and it is the same Mr.Nandhakumar, who has signed as one of the witness in the promissory note (Ex.P2). Therefore, there is an apparent discrepancy between the evidence of PW1 and PW2 with regard to the fundamental facts as to who filled up the contents of Ex.P2 and Ex.P3. The judgment relied upon by the learned counsel for the petitioner will clearly apply to the facts of the present case. In this case, since the execution of the cheque is under dispute, the person who filled up Ex.P2 and Ex.P3 gains a lot of significance. PW1 who admittedly is working as an accountant with the respondent gives a completely different version with regard to the person who filled up the promissory note and cheque which is in total variance with what PW2 has stated in his evidence. Therefore, this Court is of the considered view, that the respondent/complainant has failed to prove the due execution of the cheque.
18. One more factor that can be taken into consideration is with regard to the actual amount that is due and payable by the petitioner. PW1 who is the accountant working with the respondent/complainant in his evidence states as follows:
"thjp tUkhd thp jhf;fy; bra;Js;shh;/ me;j tUkhd thp fzf;fpy; vjphpf;F fld; bfhLj;jij Fwpg;gpl;Ls;nshk;/ me;j Fwpg;gpl;l tUkhd thp fzf;if vd;dhy; jhf;fy;bra;a Koa[k;/ ehd; ,e;j fhnrhiyia 2 Kiw t';fpapy; tN:Yf;F nghl;nld;/ Kjy;Kiw fhnrhiyia tN:Yf;F nghl;L jpUk;gpat[ld; mjd; gpd; vjphpf;F tf;fPy; mwptpg;g[ mDg;gtpy;iy/ Mdhy;. vjphpaplk; bjhiyngrpapy; gzk; nfl;nlhk;/ mjd;gpd;jhd; 2?k; Kiw vjphp fhnrhiyia tN:Yf;F nghlr;brhy;yp tN:Yf;F nghl;nld;/ vjphp U:/20.000-? bfhLj;jJ nghf U:/1.40.000-? fhnrhiy bfhLj;jJ nghf ghf;fp U:/60000-?f;F ehd; eltof;if vLf;ftpy;iy/"
19. Whereas PW2 in his cross examination states as follows.-
"mth; tl;o gzk; bfhLj;jJ nghf ghf;fpa[s;s bjhif U:/1.40.000-? fhnrhiy bfhLj;jhh;/"
"ehd; ,jw;F Kd;g[ Kjy; FWf;F tprhuiz bra;jnghJ vjphp bfhLf;fntz;oa U:/60.000-?j;jpidg; gw;wp vd;d brhd;ndd; vd;gJ gw;wp jw;nghJ "hgfkpy;iy/"
20. From the evidence extracted above, it is clear that there is discrepancy even with regard to the actual amount that is due and payable by the petitioner.
21. Yet another factor that emerges out of the evidence of PW1 and PW2 is the manner in which this loan transaction was shown in the Income Tax Returns. PW1 in his evidence states as follows.-
"thjp tUkhd thp jhf;fy;bra;Js;shh;/ me;j tUkhd thp fzf;fpy; vjphpf;F fld; bfhLj;jij Fwpg;gpl;Ls;nshk;/ me;j Fwpg;gpl;l tUkhd thp fzf;if vd;dhy; jhf;fy; bra;a Koa[k;;/"
22. PW2 in his evidence states as follows.-
"01/04/2003 Kjy; 31/03/2004 tiuapyhd vd; bgahpy; ehd; tUkhd thp brYj;jpajw;fhd rPhpay; nghl;nlh efy; th/rh/M/10 MFk;/ ehd; me;j thp tpjpg;g[f;F U:/39.544-? brYj;jpajw;fhd ft[z;lh; igapy; nghl;nlh efy; th/rh/M/11 MFk;/ (th/rh/M/10. 11 nghl;nlh efy; vd;gjhy; Ml;nrgizapd; nghpy; FwpaPL bra;ag;gl;lJ)/ ,tw;wpy; mjhtJ ,e;j Mtz';fspy; mry; tUkhd thp mYtyfj;jpy; bfhLj;Js;nsd;/ mjd; kw;bwhU efy; Mol;lhplk; ,Uf;fpwJ/ ,Ue;jhy; th';fp jhf;fy; bra;fpnwd;/ me;j Fwpg;gpl;l th/rh/M/10 tUkhd thp fzf;fpy; vdf;F me;j tUlk; U:/2.05.750-? tUkhdk; te;Js;sJ. ehd; vd; brhj;ij tpw;w tUkhdj;jpyUe;Jk; fld; bfhLj;Js;nsd;/"
"th/rh/M/10?y; vjphpf;F gzk; bfhLj;jjw;fhd tptuk; ,y;iy/ Mdhy; me;j th/rh/M10?y; gzk; bfhLj;jjw;fhd Fwpg;g[ mjpy; tuhJ/ th/rh/M/10?y; cs;s Fw;g;g[fspy; vjphpf;F gzk; fld; bfhLj;j tptuk; mjpy; ,y;iy vd;why; me;j tptuk; mjpy; tuhJ/ vjphpf;F bfhLj;j fld; tuhf;fld; vdf th/rh/M/10y; fhl;ltpy;iy/ tuhf;fld; vd tUkhd thpapy; ehd; js;Sgo nfhutpy;iy/"
",g;nghJ ele;J tUk; tHf;F U:/2.00.000-?j;jpw;fhd fhnrhiyf;Fz;lhdJ MFk;/ kw;bwhU tHf;F U:/2.50.000-?f;fhd tHf;F MFk;/ fldhspfs; gl;oaypy; tUkhd thp fzf;fpy; vjphp nkhfd; juntz;oa U:/4.50.000-?j;ij fzf;fpy; fhl;ltpy;iy/"
23. From the above evidence, it is very clear that a strong suspicion has been raised by the petitioner with regard to whether this loan transaction was actually shown in the Income Tax Returns.
24. Added to this, the petitioner has also examined DW1-Mohan, who speaks about the earlier transaction with Mr.Nehru and the subject matter cheque that was given as a security.
25. The cumulative effect of all these evidence which has been discussed herein above, clearly raises a probable defence on the side of the petitioner, which creates doubt about the existence of a legally enforceable debt. The petitioner has rebutted the presumption cast upon him under Section 139 of the Negotiable Instruments Act, 1881, by raising a probable defence with reference to the circumstances upon which he relied upon.
26. An useful reference can be made to the following judgments in this regard. The relevant portion of the judgment is as follows.-
(i) In Narayana Menon @ Mani v. State of Kerala, reported in 2006 (6) SCC 39, and has made the following observation:
"33. Since the proceedings under Section 138 of the Negotiable Instruments Act, is punitive in nature and once the Court has come to the conclusion that the Accused is guilty, such conclusion has to be supported by clear evidence. In this regard, the Law laid down by the Hon'ble Apex Court in M.S. Narayana Menon @ Mani v. State of Kerala and another, 2006 (6) SCC 39, can be taken as a precedent. The Hon'ble Apex Court in the said Judgment cited supra has stated that the presumption under Sections 118 and 139 shall be with the standard of proof of preponderance of probability only. The relevant portions of the said Judgment are extracted hereunder:
"27. In view of the aforementioned backdrop of events, the questions of law which had been raised before us will have to be considered. Before we advert to the said questions, we may notice the provisions of Sections 118(a) and 139 of the Act which read as under:
"118. Presumptions as to Negotiable Instruments.- Until the contrary is proved, the following presumption 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;
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. Presumptions both under Sections 118(a) and 139 of the Act are rebuttable in nature."
30. Applying the said definitions of proved or disproved to the 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 and Drum Mfg. Co. v. Amin Chand Payrelal, 1999 (3) SCC 35, albeit in a Civil case laid down the law in the following terms: (SCC pp.50-51, para 12).
"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 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. 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 record but also by reference to the circumstances upon which he relies.
34. If the above said principles of the Apex Court in both Judgments cited above, are applied to the present case, the Statutory presumption found in favour of the Complainant merely on the basis of the issuance of Cheques and acceptance of signature by the Accused, has been acceptably rebutted with a degree of proof of preponderance of probability, by the Accused."
(ii) N. Lakshmi v. P. Damodarasamy, 2018 (1) LW Crl. 584. The relevant paragraphs are usefully extracted here under:
"26. In a number of cases, the Law under Section 138 of the Negotiable Instruments Act, has been developed and strengthened by Law Courts at various point of time. If the initial presumption under Sections 139 and 118 of the Negotiable Instruments Act give a favourable tilt towards the Complainant, such a Statutory presumption is always a rebuttable presumption only.
27. In this regard, if decree of proof, to come to a presumption in favour of the Complainant, is the preponderance of probability. Equally the degree of proof for rebutting on the side of the Accused, again would be the preponderance of probability.
28. In this regard, the classic Judgment of the Hon'ble Apex Court in Rangappa v. Sri Mohan, 2010 (11) SCC 441, can very well be pressed into service. In the said Judgment cited supra, their Lordships at Paragraphs 26 to 28 has held as follows:
"26. In light of these extracts, we are in agreement with the Respondent Claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observation in Krishna Janardhan Bhat, 2008 (4) SCC 54 : 2008 (2) SCC (Cri) 166, may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the Accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption, which favours the Complainant.
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 under delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a Cheque is largely in the nature of a Civil wrong, whose impact is usually confined to the Private parties involved in Commercial transactions. In such a scenario, the Test of Proportionality should guide the construction and interpretation of reverse onus clauses and the 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"
27. Both the Courts below have lost sight off this crucial aspect in this case. The trial court erroneously held that the petitioner by not examining Mr.Nehru has not discharged the onus cast upon him and therefore, has proceeded to convict the petitioner. The appellate Court also endorses the view of the trial court without any independent discussion on the evidence that has been let in in this case.
28. Thus, the order of the Courts below suffers from manifest illegality, perversity and infirmity and the same deserves to be set aside by this Court in exercise of its revisional jurisdiction. Accordingly, the order of the trial court convicting and sentencing the petitioner for an offence punishable under Section 138 of the Negotiable Instruments Act, 1881, and as confirmed by the Appellate Court is hereby set aside.
29. In the result, this Criminal Revision Petition is allowed. The bail bond executed by the petitioner shall stand cancelled and fine amount, if any, paid by the petitioner shall be refunded to him.
05.07.2018 msm Speaking Order: Yes/No Index: Yes/ No Internet: Yes/ No To
1. The Principal Sessions Court, Coimbatore,
2. The Judicial Magistrate No.II, Coimbatore.
N. ANAND VENKATESH, J.
msm Pre-Delivery Order in CRL.R.C.No. 1739 of 2011 05.07.2018