Punjab-Haryana High Court
Lt. Col. I.S.Chouhan vs Sant Ram on 8 October, 2013
Author: Anita Chaudhry
Bench: Anita Chaudhry
CRA-S No.183-SBA of 2007 -1-
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
CRA-S No.183-SBA of 2007 (O&M)
Date of decision:08.10.2013
Lt. Col. I.S.Chouhan .... Appellant
Versus
Sant Ram .... Respondent
CORAM: HON'BLE MS. JUSTICE ANITA CHAUDHRY
Present: Mr. Aftab Singh Khara, Advocate for
Mr. Ashwani Talwar, Advocate
for the appellant.
Mr. Amandeep Singh, Advocate
for the respondent.
*****
1. Whether Reporters of local papers may be allowed to see the
judgment?
2. To be referred to the Reporters or not?
3. Whether the judgment should be reported in the digest?
Anita Chaudhry, J.(Oral)
The present appeal has been filed against the judgment of acquittal dated 03.08.2006 passed by the trial Court in a complaint filed under Section 138 of the Negotiable Instruments Act (hereinafter referred as 'the Act').
The facts, which form the background, are that Sant Ram - respondent had taken a friendly loan of Rs.30,000/- from the complainant on 01.05.1998. The amount was not paid despite repeated requests. On 04.07.1998, the complainant approached the respondent and asked him to discharge his liability. The accused issued a cheque bearing No.071221 the same day drawn at Oriental Bank of Commerce, G.T. Road, Kartarpur, District Jalandhar. The cheque was presented to the bankers for encashment, which was dishonoured as Bura Sonia 2013.10.22 10:29 I attest to the accuracy and integrity of this document Chandigarh CRA-S No.183-SBA of 2007 -2- the funds were insufficient. The complainant approached the accused and told him the fate of the cheque. He paid no head and told him that he had purposely issued the cheque. The complainant sent a statutory notice to the accused as he failed to make the payments and filed the complaint.
The accused was summoned. A notice of accusations under Section 138 of the Negotiable Instruments Act was served upon the accused. The accused pleaded not guilty and claimed trial.
The complainant examined the officers from Punjab and Sind Bank and Oriental Bank of Commerce besides making his own statement and proved the documents.
In the statement recorded under Section 313 Cr.PC, the accused pleaded false implication and stated that he had never issued a cheque to discharge any liability and the complainant had obtained four cheques as security for loan advanced to his son Rajan Kumar and the cheques had been presented to claim the amount illegally. He examined his son Rajan Kumar as his defence witness.
The trial court dismissed the complaint holding that the case was doubtful and it appeared that blank cheque signed by the respondent was obtained by the complainant and he had presented the same. It was observed that the complainant had not disclosed the true facts and false plea of friendly loan had been taken and the presumption under Section 139 of the Act stood rebutted.
I have heard learned counsels for the parties and with their assistance carefully perused the record.
It was urged on behalf of the appellant that Section 118 of the Act raises a presumption and the accused had admitted his Bura Sonia 2013.10.22 10:29 I attest to the accuracy and integrity of this document Chandigarh CRA-S No.183-SBA of 2007 -3- signatures and no evidence in rebuttal was led and it had been proved that the cheque had been dishonoured. It was urged that the amount had been given by the complainant and not by the finance company. It was urged that his finance company had given the loan to the son of the respondent to purchase the three wheeler and it was an independent transaction and the trial court has decided the matter on surmises. Reliance was placed upon K.Bhaskaran vs. Sankaran Vaidhyan Balan, 1999(4) RCR (Criminal) 309, NEPC Micon Ltd. vs. Magma Leasing Ltd., 1999(2) RCR (Criminal) 648 and Goaplast Pvt. Ltd. vs. Shri Chico Ursula D'Souza and anr., 2003 (2) RCR (Criminal) 131.
On the other hand, learned counsel for the respondent urged that the parties did not have any friendly relations and the complainant runs a finance company by the name of Shreen Hire Purchase Pvt. Ltd and the company had given a loan of Rs.70,000/- to purchase a three wheeler to his son Rajan Kumar and they had produced the receipts to show the payments and the complainant had admitted that Rajan Kumar had got a three wheeler financed from him and Sant Ram had stood guarantor and this fact has been admitted in the cross-examination. It was urged that there was no relationship between the two nor a friendly loan could have been given and the complainant has fabricated facts. It was urged that the ink on the cheque is different and the signatures differ and the blank cheque given as surety was filled up by the complainant and it is not a case of the complainant that the name and amount was filled by the accused. It was urged that under Section 118 of the Act the onus is first upon the complainant and only thereafter the presumption can be rebutted. Bura Sonia 2013.10.22 10:29 I attest to the accuracy and integrity of this document Chandigarh CRA-S No.183-SBA of 2007 -4-
In the present case, the signatures on the cheques are admitted to be that of the accused. The question is whether the presumption envisaged in Section 118 of the Act can legally be entered that the cheque was made and 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 discharge of any debt or liability and it places a burden on the accused to rebut the aforesaid presumption.
The question would arise whether the admission of the signatures on the cheques is sufficient to raise a presumption that the cheque pertained to a legally enforceable debt when probable defence has been raised by the accused and the accused has been able to contest the existence of legally enforceable debt.
Before addressing the question, it would be apt to survey the facts leading up to the present litigation. Admittedly, the complainant runs a finance company by the name of Shreen Hire Purchase Pvt. Ltd. I.S.Chouhan - complainant has admitted that he had given a loan to Rajan Kumar s/o Sant Ram- respondent to purchase a three wheeler in 1995. Sant Ram had produced the receipts to show that the installments were being paid by his son. His defence is that the complainant had taken security and blank cheques were given to the complainant.
The offence under Section 138 of the Act can be completed only with the concatenation of a number of acts. Following are the acts which are components of the said offence : (1) Drawing of the cheque, (2) Presentation of the cheque to the bank, (3) Returning the cheque unpaid by the drawee bank, (4) Giving notice in writing to the drawer Bura Sonia 2013.10.22 10:29 I attest to the accuracy and integrity of this document Chandigarh CRA-S No.183-SBA of 2007 -5- of the cheque demanding payment of the cheque amount, (5) failure of the drawer to make payment within 15 days of the receipt of the notice.
Section 118 of the Negotiable Instruments Act, 1881 reads as under:
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 to 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 of 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:
Provided 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 Bura Sonia 2013.10.22 10:29 I attest to the accuracy and integrity of this document Chandigarh CRA-S No.183-SBA of 2007 -6- for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him. In cases under the Negotiable Instruments Act, there is exception to the general rule as to the burden of proof in criminal cases and shifts the onus upon the accused. Though there is a presumption in law against the accused under the Act but it does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary. 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 a 'prudent man'. Judicial statements have differed as to the quantum of rebutting evidence required.
In Kundan Lal Rallaram vs Custodian, Evacuee Property, Bombay AIR 1961 SC 1316, the Hon'ble Apex 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 1964 SC 575, where the Apex Court reiterated the principle enunciated in State of Madras vs Vaidyanath Iyer 1958 SCR 580 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 Bura Sonia 2013.10.22 10:29 I attest to the accuracy and integrity of this document Chandigarh CRA-S No.183-SBA of 2007 -7- 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 case would not be as light as it is where a presumption is raised under S.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.
In the case in hand it has to be considered whether the accused had submitted sufficient proof to rebut the presumption. The Special Court had found the defence to be probable and the evidence led by the complainant to be flawed and unbelievable.
Admittedly, the complainant runs a finance company. He has admitted that the company advances loan after getting the documents executed. The complainant has stated that he knew the accused because his son had obtained a loan from his company in the year 1995. The trial Court had rightly observed that there were business relations between the complainant and the son of the accused. There could be no friendly loan in favour of the accused. Bura Sonia 2013.10.22 10:29 I attest to the accuracy and integrity of this document Chandigarh CRA-S No.183-SBA of 2007 -8- The complainant was a professional money-lender, the accused was not related to him nor he was his friend, it is difficult to accept that he would have given the amount without getting any document executed. The money was not given to the respondent through cheque. The defence raised by the accused is more probable. The loan taken for purchase of three wheeler had not been entirely repaid. The complainant did not initiate any proceedings against Rajan Kumar. The complainant had first denied and later he admits that he had filed any complaint against Rajan Kumar but thereafter he admitted that actually a complaint had been filed by him against Sant Ram as the cheque was dishonoured and he was a guarantor for his son. There is an admission by the complainant that he had obtained the cheques as guarantee.
The defence raised by the respondent is more probable. If the amount had been taken as loan, there would have been some entry in the account books maintained by the complainant. The cheque is not in the hand of the respondent. The handwriting and the ink used is different from the ink used for the signatures which clearly shows that a blank cheque was used by the complainant.
After meticulously examining the oral and documentary evidence, it is found that there is no reason to differ with the view adopted by the trial court. Therefore, the order passed by the trial court is affirmed and the appeal is dismissed.
(Anita Chaudhry) Judge 08.10.2013 sonia Bura Sonia 2013.10.22 10:29 I attest to the accuracy and integrity of this document Chandigarh