Mohd. Imtiyaz Ahmed Khan vs Mohd. Azamat S/O Mohd. Hussain on 21 December, 2020

[Cites 28, Cited by 3]

Karnataka High Court

Mohd. Imtiyaz Ahmed Khan vs Mohd. Azamat S/O Mohd. Hussain on 21 December, 2020

Bench: P.N.Desai

                            1




         IN THE HIGH COURT OF KARNATAKA

                  KALABURAGI BENCH

 DATED THIS THE 21ST DAY OF DECEMBER 2020

                        BEFORE

         THE HON'BLE MR.JUSTICE P.N.DESAI

           CRIMINAL APPEAL NO.3536/2013

BETWEEN:

MOHD. IMTIYAZ AHMED KHAN
S/O SYED MOHAMMED KHAN
AGE: 47 YEARS, OCC: BUSINESS
H.NO.190, HUSSAIN GARDEN
M.S.K. MILL, GULBARGA
                                           .... APPELLANT

(BY SRI AMEET KUMAR DESHPANDE, ADVOCATE)

AND:

MOHD. AZMAT
S/O MOHD. HUSSAIN
AGE: 57 YEARS, OCC: BUSINESS
H.NO.1-892/B
OLD JEWARGI ROAD
NEAR JEEVAN PRAKASH
GULBARGA
                                          ... RESPONDENT

(BY SRI ALEEMUDDIN SIDDIQUI &
SRI FAIZUDDIN K. ZARDI, ADVOCATES)


       THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4)
OF CODE OF CRIMINAL PROCEDURE, PRAYING TO ALLOW THIS
                               2




APPEAL AND SET ASIDE THE JUDGMENT AND ORDER OF
ACQUITTAL DATED 22.02.2013 PASSED IN C.C.NO.2721/2011
ON THE FILE OF THE IV ADDL. CIVIL JUDGE & JMFC AT
GULBARGA AND GRANT SUCH OTHER APPROPRIATE RELIEF.


      THIS APPEAL HAVING BEEN HEARD, RESERVED FOR
JUDGMENT AND COMING ON FOR PRONOUNCEMENT OF
JUDGMENT     THIS   DAY,   THIS   COURT    DELIVERED   THE
FOLLOWING:
                        JUDGMENT

This appeal arises out of judgment of acquittal passed by the IV-Addl. Civil Judge and JMFC, Gulbarga in C.C.No.2721/2011 dated 22.02.2013 wherein the accused is acquitted for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as "N.I.Act" for short).

2. The appellant was the complainant before the trial Court and the respondent was accused before the trial Court. For the sake of convenience, the parties will be referred to as per their respective ranks before the trial Court in this judgment.

3. The brief case of the complainant before the trial Court was as under:

a) In the month of August 2009, the accused requested the complainant to advance a hand loan of Rs.21.00 lakh without interest, to fulfill the needs in doing his business. In order to discharge his liability, the accused issued a cheque bearing No.651025 dated 19.08.2010 for Rs.21,00,000/- drawn on Karnataka Bank Ltd. Supermarket, Gulbarga. The cheque was presented to the complainant's banker, but it was dishonoured and returned with an endorsement that 'payment stopped by the drawer'. Then legal notice was issued by the complainant demanding payment of cheque amount. The accused neither replied to notice nor repaid the amount. Hence, complaint came to be filed for the offence punishable under Section 138 of the N.I.Act.

b) The accused appeared. After recording of the plea of the accused, the complainant got examined himself as PW.1 and got marked five documents as Ex.P1 to Ex.P5. Thereafter, the statement of the accused as required under Section 313 of Cr.P.C. was recorded. Accused denied the incriminating circumstance appearing against him in the evidence of prosecution witness. Then accused himself got examined as DW.1 in support of his defence. After hearing the arguments, the trial Court acquitted accused.

4. Aggrieved by the same, this appeal is preferred by the appellant-complainant on the following grounds:

a) that the trial Court has committed an error in observing that complainant has failed to prove his capacity and factum of payment of Rs.21.00 lakh; 5

b) that the accused has admitted cheque and also signature on it, but the trial Court has failed to draw presumption arising under Section 139 of the N.I.Act;

c) Accused has failed to rebut the presumption;

d) The dismissal of the complaint on the ground that the cheque was issued by the firm/company not by the accused and the firm is not impleaded in the complaint is wholly illegal and erroneous;

e) No evidence is adduced by the accused to disbelieve the statement made by the complainant in his deposition;

f). When the presumption regarding consideration and existence of legally recoverable debt is available in favour of the complainant, dismissal of complaint and acquittal of accused is erroneous. 6

5. With these main grounds the appellant has prayed to allow the appeal.

6. Heard the arguments advanced by Sri Ameet Kumar Deshpande, learned counsel for the appellant and Sri Aleemuddin Siddiqui, learned counsel for the respondent. Perused the judgment of the trial Court the records of the trial Court and decision relied by both sides.

7. Learned counsel for the appellant argued that Ex.P1 is the cheque dated 19.08.2010 for Rs.21.00 lakh; Ex.P2 is the endorsement received from the Bank with intimation of "stop payment" issued by the accused; the legal notice is at Ex.P3 and postal acknowledgements are at Exs.P4 and P5; The learned counsel argued that by these documentary evidence, the complainant has complied the ingredients of Section 138 of the N.I.Act. The learned counsel for the appellant argued that once the issuance of cheque and 7 signature on it are admitted, there is statutory presumption under Section 139 of the N.I.Act in favour of complainant, but the same is not rebutted by the accused.

8. Learned counsel further argued that the trial Court wrongly dismissed the complaint a) holding that no source of income to lend the amount is proved by the complainant. b) no other security documents are executed when such huge amount is paid as loan;

c) firm is not made as party and d) presumption is not properly appreciated. e) The learned counsel argued that it is nowhere contention of the accused that the proprietorship is different and accused is different.

9. The learned counsel further argued that in view of principles stated by Hon'ble Supreme Court on the point that the source of income of complainant, it is held that the said defence is not a material one and the presumption arising under Section 139 of the N.I.Act is 8 not rebutted by such defence evidence. The purpose of enacting the said N.I.Act is to be looked into to appreciate the evidence.

10. In support of his arguments, the learned counsel relied on the decision of Hon'ble Supreme Court in case of ICDS LTD vs. Beena Shabeer and Another reported in (2002) 6 SCC 426, wherein at para 10 to 13 it is held as under:

"10. The language, however, has been rather specific as regards the intent of the legislature. The commencement of the Section stands with the words "Where any cheque". The above noted three words are of extreme significance, in particular, by reason of the user of the word "any" the first three words suggest that in fact for whatever reason if a cheque is drawn on an account maintained by him with a banker in favour of another person for the discharge of any debt or other liability, the highlighted words if read with the first three words at the commencement of Section 138, leave no manner of doubt that for whatever reason it may be, the liability under this provision cannot be avoided in the event the same stands returned by the banker unpaid. The legislature has been careful enough to record not only discharge in whole or in part of any debt but the same includes other liability as well. This aspect of the matter has not 9 been appreciated by the High Court, neither been dealt with or even referred to in the impugned judgment.

11. The issue as regards the co-extensive liability of the guarantor and the principal debtor, in our view, is totally out of the purview of Section 138 of the Act, neither the same calls for any discussion therein. The language of the Statute depicts the intent of the law-makers to the effect that wherever there is a default on the part of one in favour of another and in the event a cheque is issued in discharge of any debt or other liability there cannot be any restriction or embargo in the matter of application of the provisions of Section 138 of the Act: 'Any cheque' and 'other liability' are the two key expressions which stands as clarifying the legislative intent so as to bring the factual context within the ambit of the provisions of the Statute. Any contra interpretation would defeat the intent of the legislature. The High Court, it seems, got carried away by the issue of guarantee and guarantor's liability and thus has overlooked the true intent and purport of Section 138 of the Act. The judgments recorded in the order of the High Court do not have any relevance in the contextual facts and the same thus do not lend any assistance to the contentions raised by the respondents.

12. It is to be noted, however, that both the parties during the course of arguments have made elaborate submissions on Sections 126 and 128 of the Contract Act, but in our view, by reason of the specific language used by the legislature, question of consideration of the matter from the point of view of another Statute would not arise, neither would we like to express any 10 view since that may have some effect as regards the merits.

13. In our view, the High Court fell into a manifest error and as such the judgment impugned cannot obtain our concurrence. The appeal succeeds and is thus allowed. The order of the learned Single Judge stands quashed and the proceeding in ST No.141/1999 on the file of the Additional Chief Judicial Magistrate's Court, Thiruvananthapuram stands restored and so is the complaint under Section 138 of the Act. No costs."

The learned counsel also relied on a decision of the Hon'ble Supreme Court in case of Bir Singh vs. Mukesh Kumar reported in AIR 2019 SC 2446 wherein at para 16, 36, 37 and 38 it is held as under:

"16. The short question before us is whether the High Court was right in reversing the concurrent factual findings of the Trial Court and of the Appellate court in exercise of its revisional jurisdiction. The questions of law which rise in this appeal are, (i) whether a revisional Court can, in exercise of its discretionary jurisdiction, interfere with an order of conviction in the absence of any jurisdictional error or error of law and (ii) whether the payee of a cheque is disentitled to the benefit of the presumption under Section 139 of the Negotiable Instruments Act, of a cheque duly drawn, having been issued in discharge of a debt or other liability, only 11 because he is in a fiduciary relationship with the person who has drawn the cheque."

36. The proposition of law which emerges from the judgments referred to above is that the onus to rebut the presumption under Section 139 that the cheque has been issued in discharge of a debt or liability is on the accused and the fact that the cheque might be post dated does not absolve the drawer of a cheque of the penal consequences of Section 138 of the Negotiable Instruments Act.

37. A meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted.

38. If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence."

The learned counsel further relied on a decision of the Hon'ble Supreme Court in case of Rohitbhai Jivanlal Patel vs. State of Gujarat and another reported in AIR 2019 SC 1876 wherein at para 12, 15, 17, 18 and 19 it is held as under:

"12. For determination of the point as to whether the High Court was justified in reversing the judgment and orders of the Trial Court and convicting the appellant for the offence under Section 138 of the NI Act, the basic questions to be addressed to are two-fold: as to whether the complainant-respondent No. 2 had established the ingredients of Sections 118 and 139 of the NI Act, so as to justify drawing of the presumption envisaged therein; and if so, as to whether the accused-appellant had been able to displace such presumption and to establish a probable defence whereby, the onus would again shift to the complainant?

15. In Rangappa v. Sri Mohan : (2010) 11 SCC 441 : (AIR 2010 SC 1898), this Court has reiterated and summarised the principles relating to presumptions under Sections 118 and 139 of the NI Act and rebuttal thereof in the following:-

"26. In the 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 observations in 13 Krishna Janardhan Bhat may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it is based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttal 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 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 clauses and the defendant-accused cannot be expected to discharge an unduly high standard of 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 14 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."

17. In the case at hand, even after purportedly drawing the presumption under Section 139 of the NI Act, the Trial Court proceeded to question the want of evidence on the part of the complainant as regards the source of funds for advancing loan to the accused and want of examination of relevant witnesses who allegedly extended him money for advancing it to the accused. This approach of the Trial Court had been at variance with the principles of presumption in law. After such presumption, the onus shifted to the accused and unless the accused had discharged the onus by bringing on record such facts and circumstances as to show the preponderance of probabilities tilting in his favour, any doubt on the complainant's case could not have been raised for want of evidence regarding the source of funds for advancing loan to the accused-appellant. The aspect relevant for consideration had been as to whether the accused-appellant has brought on record such facts/material/circumstances 15 which could be of a reasonably probable defence.

18. In order to discharge his burden, the accused put forward the defence that in fact, he had had the monetary transaction with the said Shri Jagdishbhai and not with the complainant. In view of such a plea of the accused-appellant, the question for consideration is as to whether the accused-appellant has shown a reasonable probability of existence of any transaction with Shri Jagdishbhai? In this regard, significant it is to notice that apart from making certain suggestions in the cross-examination, the accused- appellant has not adduced any documentary evidence to satisfy even primarily that there had been some monetary transaction of himself with Shri Jagdishbhai. Of course, one of the allegations of the appellant is that the said stamp paper was given to Shri Jagdishbhai and another factor relied upon is that Shri Jagdishbhai had signed on the stamp paper in question and not the complainant.

19. Hereinabove, we have examined in detail the findings of the Trial Court and those of the High Court and have no hesitation in concluding that the present one was clearly a case where the decision of the Trial Court suffered from perversity and fundamental error of approach; and the High Court was justified in reversing the judgment of the Trial Court. The observations of the Trial Court that there was no documentary evidence to show the source of funds with the respondent to advance the loan, or that the respondent did not record the transaction in the form of receipt of even kachcha notes, or that there were 16 inconsistencies in the statement of the complainant and his witness, or that the witness of the complaint was more in know of facts etc. would have been relevant if the matter was to be examined with reference to the onus on the complaint to prove his case beyond reasonable doubt. These considerations and observations do not stand in conformity with the presumption existing in favour of the complainant by virtue of Sections 118 and 139 of the NI Act. Needless to reiterate that the result of such presumption is that existence of a legally enforceable debt is to be presumed in favour of the complainant. When such a presumption is drawn, the factors relating to the want of documentary evidence in the form of receipts or accounts or want of evidence as regards source of funds were not of relevant consideration while examining if the accused has been able to rebut the presumption or not. The other observations as regards any variance in the statement of complainant and witness; or want of knowledge about dates and other particulars of the cheques; or washing away of the earlier cheques in the rains though the office of the complainant being on the 8th floor had also been of irrelevant factors for consideration of a probable defence of the appellant. Similarly, the factor that the complainant alleged the loan amount to be Rs. 22,50,000/- and seven cheques being of Rs. 3,00,000/- each leading to a deficit of Rs. 1,50,000/-, is not even worth consideration for the purpose of the determination of real questions involved in the matter. May be, if the total amount of cheques exceeded the alleged amount of loan, a slender doubt might have arisen, but, in the present matter, the total amount of 7 cheques is 17 lesser than the amount of loan. Significantly, the specific amount of loan (to the tune of Rs. 22,50,000/-) was distinctly stated by the accused-appellant in the aforesaid acknowledgment dated 21.03.2017."

The learned counsel further relied on a decision of the Hon'ble Supreme Court in case of Uttam Ram vs. Devinder Singh Hudan and another reported in (2019) 10 SCC 287, wherein at para 25 it is held as under:

"25. In other judgment reported as Rohitbhai Jivanlal Patel v. State of Gujarat and Another this Court held as under : (SCC paras, 15, 17 & 22) "15. So far the question of existence of basic ingredients for drawing of presumption under Sections 118 and 139 of the NI Act is concerned, apparent it is that the appellant-accused could not deny his signature on the cheques in question that had been drawn in favour of the complainant on a bank account maintained by the accused for a sum of Rs. 3 lakhs each. The said cheques were presented to the Bank concerned within the period of their validity and were returned unpaid for the reason of either the balance being insufficient or the account being closed. All the basic ingredients of Section 138 as also 18 of Sections 118 and 139 are apparent on the face of the record. The Trial Court had also consciously taken note of these facts and had drawn the requisite presumption. Therefore, it is required to be presumed that the cheques in question were drawn for consideration and the holder of the cheques i.e., the complainant received the same in discharge of an existing debt. The onus, therefore, shifts on the appellant- accused to establish a probable defence so as to rebut such a presumption." xxx xxx

17. On the aspects relating to preponderance of probabilities, the accused has to bring on record such facts and such circumstances which may lead the Court to conclude either that the consideration did not exist or that its non-existence was so probable that a prudent man would, under the circumstances of the case, act upon the plea that the consideration did not exist. This Court has, time and again, emphasized that though there may not be sufficient negative evidence which could be brought on record by the accused to discharge his burden, yet mere denial would not fulfil the requirements of rebuttal as envisaged under Section 118 and 139 of the NI Act.....

xxx xxx xxx

22. The result of discussion in the foregoing paragraphs is that the major considerations on which the Trial Court chose to proceed clearly show its fundamental error of approach where, even after drawing the presumption, it had 19 proceeded as if the complainant was to prove his case beyond reasonable doubt. Such being the fundamental flaw on the part of the Trial Court, the High Court cannot be said to have acted illegally or having exceeded its jurisdiction in reversing the judgment of acquittal. As noticed hereinabove, in the present matter, the High Court has conscientiously and carefully taken into consideration the views of the Trial Court and after examining the evidence on record as a whole, found that the findings of the Trial Court are vitiated by perversity. Hence, interference by the High Court was inevitable; rather had to be made for just and proper decision of the matter."

11. Relying on the principles stated in the above referred decisions, the learned counsel contend that the trial court is not justified in acquitting the accused. Therefore, prayed to set aside the judgment and convict the accused.

12. Against this, the learned counsel for the respondent Sri Aleemuddin Siddiqui argued that, it is the bounden duty of the complainant to prove whether the cheque is issued for discharge of legally recoverable 20 debt or liability. Mere issuance of cheque is not sufficient to raise the presumption under the N.I.Act. In fact, the accused has rebutted the presumption by cross-examination of PW.1 and also by leading his defence evidence. The amount of cheque involved in this case is to the tune of Rs.21.00 lakh. No on demand promissory note is obtained, nor any interest is charged on such huge loan amount. No person will give such huge amount without any interest or without taking any other security documents only as Cheque. The learned counsel further argued that the complainant has stated that, in the presence of two persons he had handed over the cheque money to accused. But those two persons before whom the accused is stated to have received the loan amount were not examined. In the cross- examination, the complainant-PW1 clearly admitted that he has got six blank cheques belonging to accused with him. In fact cheque in question was issued along 21 with other cheques as a security for the loan barrowed by the relative of the accused which is admitted by the complainant. The loan amount of his relative was only Rs.4.00 lakh. But why eight blank cheques were taken as stated by complainant is not forthcoming. The complainant has not produced any Bank account to show that he was having any amount in his account at any time; Issuance of such huge amount/cheque is in violation of Section 269 of Income Tax Act.

13. The learned counsel further argued that Ex.P1-cheque is issued as Proprietor for ADAL Audio & Visual, but the said firm is not made as a party. So without making firm as a party, the complaint is not tenable. The learned counsel submitted that the accused has rebutted the presumption by leading his defence evidence and proved by ground realities, such as a) blank cheque was given; Rs.4.00 lakh returned;

b) there is no receipt or promissory note for having 22 barrowed huge amount of Rs.21.00 lakh; c) sufficient fund or source of income with complainant is not proved. d) Bank account pass book is not produced by complainant to show any amount or what is balance amount in his account in the bank. The learned counsel for the respondent contended that, the complainant has filed civil suit to recover the said Cheque amount. The complainant has also admitted that civil suit is filed. In the said suit he has produced one sale deed showing that the property was sold by him for Rs.2,25,000/-. In the said suit after considering the evidence on record, Civil Court disbelieved the evidence of complainant, and suit came to be dismissed after full fledged trial. Aggrieved by the same, regular first appeal filed by complainant in RFA No.6066/2013 same is pending before this High Court. The learned counsel further argued that the presumption under Section 139 of the Act is rebutted by the accused. On 23 the other hand, the complainant has failed to prove initial burden to prove legally recoverable debt or liability on the part of the accused. The accused has shown by preponderance of probabilities that his defence is true and presumption if any stands rebutted.

14. In support of his arguments, the learned counsel relied upon the decision of this High Court in case of Smt. Prabhavathi K.R. and Another vs. Sri Lokesh reported in 2020 (4) KCCR 2518, wherein at para 38, 39 and 40 it is held as under:

"38. Be that as it may, if Ex.P1-cheque if it is looked into the name of the firm has been clearly mentioned in it as M/s. Panchamukhi Enterprises and both the partners of the said firm have signed the said cheque. When he has issued the cheque, admittedly in the name of the firm and it has also been printed on the cheque as by M/s. Panchamukhi Enterprises and it has been also separately mentioned as the partners. It makes it clear that the said cheque has been issued by the firm. Then under such circumstances, the contention taken up by the learned counsel for the respondent-complainant is not having any force the same is liable to be rejected. I have carefully gone through the judgments of both the Courts. The Courts below 24 without looking into the said legal aspect have erroneously come to a different conclusion on the basis of the documents produced. It is the contention that the said documents have been concocted and created. Admittedly as per the case of complainant itself the cheque has been issued in the year 2008 and it contains the name of the firm then under such circumstances, it cannot be held that the accused has concocted the said documents to over come the liability.

39. In that light as mandated under Section 141 of the NI Act, without making the firm as a party to the proceedings the vicarious liability cannot be fixed on the petitioners- accused. This aspect has not been properly considered by the Court below and have been swayed away by the contention of the complainant. Keeping in view the anatomy of the above said provision of law and analyzing the Section 141 of the NI Act and in view of the larger bench decision of the Hon'ble Apex Court in the case of Aneeta Hada (quoted supra) it is aptly applicable to the present facts of the case. In that light without making the Company a party, the complaint is not maintainable. No doubt the other contentions which have been taken up by the accused has not rebutted the presumption drawn as contemplated under Section 139 of the Act is concerned it can be safely held that though the primary aspect has been proved to show that there exists a liability, the accused has admitted the signature on the cheque and then the burden shifts on to the accused to rebut the said presumption. But however, when the basic ingredients have not been established to take the cognizance of the case and they have not been proved as contemplated under the law, then under such circumstances not rebutting the 25 presumption will not come to the aid of the complainant so as to take advantage. The trial court as well as the first appellate court has not applied their mind to Section 141 of the NI Act and has erroneously come to the wrong conclusion.

40. I am conscious of the fact that a Revisional Court is having a limited jurisdiction but I am also conscious of the fact that if there is jurisdictional error or error of law, then under such circumstances, this Court can exercise its power as contemplated under the law and set aside the said orders. This proposition of law has been laid down by the Hon'ble Apex Court in the case of Bir Singh vs. Mukesh Kumar reported in (2019) 4 SCC 197 at paragraph No.13 it has been observed as under:

"13. The short question before us is whether the High Court was right in reversing the concurrent factual findings of the trial court and of the appellate court in exercise of its revisional jurisdiction. The questions of law which rise in this appeal are, (i) whether a Revisional Court can, in exercise of its discretionary jurisdiction, interfere with an order of conviction in the absence of any jurisdictional error or error of law and (ii) whether the payee of a cheque is disentitled to the benefit of the presumption under Section 139 of the Negotiable Instruments Act, of a cheque duly drawn, having been issued in discharge of a debt or other liability, only because he is in a fiduciary relationship with the person who has drawn the cheque."

The learned counsel relied on decision of the Hon'ble Supreme Court in case of Krishna Janardhan Bhat 26 vs. Dattatraya G. Hegde reported in AIR 2008 SC 1325 at para 13, 33, 34 and 35 wherein the Hon'ble Supreme Court has considered the ground realities and same is confirmed with some modification in case of Rangappa vs. Mohan reported in AIR 2010 SC 1898, it is held as under:-

"13. It again referred to a decision of this Court in K. Bhaskaran v. Sankaran Vaidhyan Balan and Others [AIR 1999 SC 3762] and made almost a similar observation holding that as the complainant has discharged his initial burden, the onus shifted on the accused to produce rebuttal evidence against the presumption laid down in favour of the complainant stating: Here, the accused has not produced any evidence to discard the testimony of PW-1. Therefore, the presumption is to be drawn in favour of the holder of the cheque, who has received it for discharge of liability in view of the decision of the Hon'ble Supreme Court.

33. But, we may at the same time notice the development of law in this area in some jurisdictions.

The presumption of innocence is a human right. [See Narender Singh & Anr. v. State of M.P. (2004) 10 SCC 699, Ranjitsing Brahmajeetsing Sharma v. State of Maharashtra and Anr. (2005) 5 SCC 294 and Rajesh Ranjan Yadav @ Pappu Yadav v.

CBI through its Director (2007) 1 SCC 70] Article 27 6(2) of he European Convention on Human Rights provides : Everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law. Although India is not bound by the aforementioned Convention and as such it may not be necessary like the countries forming European countries to bring common law into land with the Convention, a balancing of the accused rights and the interest of the society is required to be taken into consideration. In India, however, subject to the statutory interdicts, the said principle forms the basis of criminal jurisprudence. For the aforementioned purpose the nature of the offence, seriousness as also gravity thereof may be taken into consideration. The courts must be on guard to see that merely on the application of presumption as contemplated under Section 139 of the Negotiable Instruments Act, the same may not lead to injustice or mistaken conviction. It is for the aforementioned reasons that we have taken into consideration the decisions operating in the field where the difficulty of proving a negative has been emphasized. It is not suggested that a negative can never be proved but there are cases where such difficulties are faced by the accused e,g,. honest and reasonable mistake of fact. In a recent Article The Presumption of Innocence and Reverse Burdens : A Balancing Duty published in [2007] C.L.J. (March Part) 142 it has been stated :

In determining whether a reverse burden is compatible with the presumption of innocence regard should also be had to the pragmatics of proof. How difficult would it be for the prosecution to prove guilt without the reverse burden? How easily could an innocent defendant discharge the reverse burden? But courts will not allow these pragmatic considerations to override the 28 legitimate rights of the defendant. Pragmatism will have greater sway where the reverse burden would not pose the risk of great injustice where the offence is not too serious or the reverse burden only concerns a matter incidental to guilt. And greater weight will be given to prosecutorial efficiency in the regulatory environment.

34. We are not oblivious of the fact that the said provision has been inserted to regulate the growing business, trade, commerce and industrial activities of the country and the strict liability to promote greater vigilance in financial matters and to safeguard the faith of the creditor in the drawer of the cheque which is essential to the economic life of a developing country like India.

This, however, shall not mean that the courts shall put a blind eye to the ground realities. Statute mandates raising of presumption but it stops at that. It does not say how presumption drawn should be held to have rebutted. Other important principles of legal jurisprudence, namely presumption of innocence as human rights and the doctrine of reverse burden introduced by Section 139 should be delicately balanced. Such balancing acts, indisputably would largely depend upon the factual matrix of each case, the materials brought on record and having regard to legal principles governing the same.

35. Keeping in view the peculiar facts and circumstances of this case, we are of the opinion that the courts below approached the case from a wholly wrong angle, viz., wrong application of the legal principles in the fact situation of the case. In view of the legal position as has been enunciated by this Court in M.S. Narayana Menon (supra) and later cases, we are of the opinion that the 29 High Court should have entertained the revision application."

The learned counsel also relied on another decision of this High Court in the case of Veerayya vs. G.K.Madivalar reported in 2012 (3) KCCR 2057 wherein at para 15 and 16 it is held as under:

"15. It may not be out of place to mention at this place that the learned counsel for the petitioner has drawn my attention to the observations of the Trial Court in the suit filed by the complainant, wherein the Trial Court has observed that at no point of time, was there a balance of more than Rs.5,000/- in the account of the complainant. That apart, the Trial Court has also observed that the tailor shop was run on the footpath with a tin shed being put. Though this Court is not expected to look to the observations made in the civil suit which was dismissed, even on the basis of the evidence placed in the instant case before the Trial Court, there is absolutely no material placed by the complainant to show that, on the day he advanced Rs.2,00,000/- loan to the accused, he had that much of bank balance.

16. Another aspect to be taken note of is that, this Court in the case of Shiva Murthy vs. Amruthraj, reported in ILR 2008 Karnataka 4629, has also observed that no prudent man would lend substantial amount of Rs.75,000/- without charging interest and the provisions of Section 269-SS of the Income Tax Act had not been followed and, therefore, the Court, in the instant 30 case, declined to accept the case of the complainant with regard to the loan transaction. In the instant case, the amount involved is not Rs.75,000/- but Rs.2,00,000/- and even in this case also, there is no evidence of the complainant that the said amount was given as loan by charging interest. It is therefore, difficult to accept the complainant's case that he lent Rs.2,00,000/- without charging any interest and that too the said amount in cash and not by means of any account payee cheque. For all these reasons, the contention of the learned counsel for the petitioner that the complainant had no capacity to advance Rs.2,00,000/- loan has to be accepted.

15. Relying on the principles stated in the above referred decisions, the learned counsel for the accused argued that complainant has failed to discharge initial burden on him. On the other hand the cross- examination of PW.1 and evidence of accused clearly rebut the presumption if any. The learned counsel supports the judgment of trial court and prays to dismiss appeal.

16. I have given my anxious and careful consideration to the decisions relied by both the sides 31 and also contentions taken by both the sides and perused the evidence.

17. The undisputed contention are that a) Ex.P1-cheque is signed by the accused; b) the said cheque was returned with an endorsement stating that the "payment stopped" by the drawer; c) PW.1- Md.Imtiyaz Ahmed Khan, complainant stated that he has got other six cheques belonging to accused with him which according to him given to him while loan was given to accused; d) Suit filed by the complainant for recovery of loan based on Ex.P1 - cheque in O.S.No.1/2012 came to be dismissed. Against that the complainant has filed RFA No.6066/2013, which is pending before the High Court. e) It is also evident that either in the complaint or in his evidence the complainant has not stated that the date when he has advanced the said hand loan. Simply it is stated that in the month of August 2009 the said loan amount was 32 given. f) The complainant in his written complaint filed before the Court not mentioned whether he has enquired the accused as to why he has issued "stop payment instruction" to Bank, nor it is stated in the Statutory demand notice that this is the said cheque, which was returned with endorsement stating that the payment stopped by the Proprietor. g) On perusing Ex.P3-legal notice it is evident that the entire legal notice is typed in Kannada letters and in para-3 one sentence is added with ink by handwriting stating that 'your cheque was returned so you have committed offence under Section N.I. Act' in English letters, why and when such insertion is made by handwriting is also not forthcoming.

18. In the light of these undisputed contentions, let me consider the evidence of both the parties in the light of arguments advanced and the decision relied by both sides.

19. In order to prove his case the complainant got examined himself as PW.1. In his chief-examination he has reiterated his complaint averments and got marked the cheque as Ex.P1, Bank endorsement - Ex.P2, legal notice - Ex.P3 and Ex.P4 and Ex.P5 are postal acknowledgments. In the cross-examination of PW.1, he has admitted that he has not produced any documents to show that he was doing warehouse business. He has stated that he was getting monthly income of Rs.60,000/- to Rs.70,000/- and out of that amount a sum of Rs.20,000/- to Rs.25,000/- used to be deposited in the Bank. But no Bank account extract or pass book of his account is produced. For the first time he has stated before the court that he has given amount of Rs.21.00 lakh to the accused on 18.08.2009. Neither the said date is mentioned in the written complaint nor in his examination-in-chief or in the legal notice the said date is mentioned. He has stated that, 'in the' 34 presence of one Mohd.Mukthar and Mohd.Rafi he had given loan amount to accused in cash. But complainant has not examined any one of them. PW.1 has further stated that he has kept with him the amount received by selling the plot standing in his name at Solapur and that amount he has given to the accused. But he has not withdrawn any amount from the Bank. Complainant has not produced any documents to show, what was the consideration amount he received by selling the said plots. PW.1 has also admitted that he has not taken any other documents or on demand promissory note or receipts as a security from the accused for advancing the such huge amount as loan without interest.

20. Complainant-PW.1 has further admitted in his cross-examination that he know one Sagir Ahmed Anwar who is the accused sister's son. Complainant- PW.1 has expressed his ignorance about the said Sagir 35 Ahmed looking after the business of accused at Gulbarga. Complainant has admitted that accused was running business as Zaag transport. PW.1 has also admitted that in the year 2007 the said Sagir Ahmed had taken Rs.5.00 lakh loan from him. But he has denied a suggestion that the said Sagir Ahmed has given a blank cheque signed by the accused as a security for the said loan amount. PW.1 has also admitted that the said Sagir Ahmed has repaid the said loan amount. PW.1 has admitted that his wife's name is "Haseena Begum" and as per his instructions the accused has paid amount of Rs.1,20,000/- through cheque drawn in the name of his wife on 09.03.2008. Again on 09.04.2008 accused has paid Rs.1,92,000/- through cheque bearing No.650645 in favour of his wife. But he has denied suggestions. On 09.11.2009 he has received Rs.75,000/-, on 15.11.2009 he has received Rs.50,000/-, on 02.12.2009 he has received 36 Rs.1,50,000/- and on 21.12.2009 he has received Rs.50,000/- from accused. PW.1 has denied a suggestion that inspite of the loan amount was repaid he has misused the blank cheque which was given as a security for the said loan of Sagir Ahmed. PW.1 has stated that he has taken the said cheque for the security of Rs.21.00 lakhs given to the accused. He has also admitted that he had worked at Saudi Arabia as auto technician. So it is evident that this cheque was taken as a security for the loan barrowed by the accused relative one Sagir Ahamed, which is clearly admitted by PW.1 in his cross-examination at page-6. Further PW.1 has stated that he has given loan amount in the house of accused. This also is a very strange circumstances. Usually person who receive the loan will go the house of a person who lends loan. But here PW.1 himself go to the house of accused along with above said two persons and stated that he gave 37 Rs.21.00 lakhs as loan without interest and sureties or any documents. PW.1 has clearly admitted that he has also filed a suit in O.S.No.1/2012 in respect of recovery of amount mentioned in the said Ex.P1-cheque before Senior Civil Judge Court. PW.1 has also admitted that from the year 1994 to 2007 he was working at Saudi Arabia. So, he came to India only in the year 2007. PW.1 has also admitted that he is a income tax assessee, but in his income tax returns he has not mentioned about Rs.21.00 lakh loan. PW.1 has produced any income tax returns of that year to show what was his income.

21. It is evident from defence of accused that PW.1 has misused the cheque given to him as a security for the loan barrowed by one Sagir Ahmed who is son of accused, appears probable. Complainant-PW.1 has stated in his evidence that he has got still six cheques belonging to accused with him. PW.1 has further stated 38 that the said six cheques were given to him by the accused one year prior to he giving evidence. Therefore, according to this complainant still he has six cheques of accused with him. Why they are with him, for what purpose he is keeping those six cheques and for what purpose those six cheques were given? When those cheques were given? Whether they are blank cheques or any amount filled in the cheque? Whether they are signed by accused? All these unanswered questions creates doubt about the complainant case and makes the defence of accused probable.

22. Therefore, on perusing the oral evidence of PW.1 with reference to his written complaint and his evidence in examination-in-chief, it is evident that nowhere he has stated the date when he has given loan amount. Only for the first time in the cross-examination he states on 18.08.2009 he has given loan amount in cash and he himself went to the house of the accused 39 and paid that amount which is not a natural course of conduct of a person in such situation. The two witnesses Mohd.Mukthar and Mohd.Rafi who were stated to be present at the time of giving loan amount, were not examined. Admittedly, the said amount was not withdrawn from any Bank or from his account. PW.1 states that the amount was received by him in respect of the plot sold by him at Solapur. But no records were produced in this regard. Complainant- PW.1 simply states that as himself and accused were doing business, he know accused. There is no separate close relationship or friendship between them. Complainant-PW.1 also admits about giving of Rs.5.00 lakh loan to one Sagir Ahmed, who is son of sister of accused, and it is Sagir Ahamed was looks after business of the accused. Complainant-PW.1 also admits that accused has paid a sum of Rs. 1,20,000/- through cheque and against he paid a sum of 40 Rs.1,92,000/- in March 2008 and April 2008 to his wife. If at all the accused had barrowed the amount in August 2009, then what was the necessity for the accused to give the cheques in the name of wife of the complainant? for what purpose he has given the said cheques?. Complainant-PW.1 denies the subsequent date of payment of amount on 09.11.2009, 15.11.2009, 02.12.2009 and 21.12.2009 stated to have been paid by accused in cash. On the other hand, it is evident that the said cheque was given as security for the loan given by him. It is evident that the accused has not given the cheque for discharge his liability or debt. Why accused has given him six cheques? nothing is forthcoming. So this type of evidence of complainant clearly indicates that the cheque in question was not issued for discharging the alleged loan. The cheque was in fact taken prior to the date mentioned on it i.e. Ex.P1. 41

23. The initial burden is on the complainant to prove that there is existence of legally recoverable debt or other liability for which said Ex.P1-cheuqe was issued. Simply because a cheque is issued, the accused cannot be automatically held guilt of offence under Section 138 of the N.I.Act. The presumption arises under Section 139 of the Act regarding issue of cheque, is only in respect of holder of cheque that same has been issued for recovery of debt or other liability. There is no dispute about it. But initial burden is on the complainant to prove it. Accused can rebut such presumption by preponderance of probabilities either by cross-examination of PW.1 and also by leading his defence evidence.

24. The said principle is laid down by the Apex Court in the decision referred by Hon'ble Supreme Court in the case of Krishna Janardhan Bhat case supra, the said decision is reiterated and approved with 42 slight modification by the Supreme Court in Rangappa referred case supra.

25. It is also stated by the complainant-PW.1 in his evidence that he has advanced the said loan by cash. But he has not stated anything as to what made him to lend such huge amount of Rs.21.00 lakh without taking any security. Even he has not stated any close association or acquaintance with the accused. No documents were produced to establish his financial capacity to advance such huge amount, though it may not be relevant in all cases. The complainant has stated that he has got other six cheques belonging to accused with him, that aspect assumes importance as to why he has kept still six cheques belonging to accused. Why the accused gave money through cheque on different dates to the wife of the complainant. All these circumstances, which are not explained creates doubt about genuiness of the contents of the complaint. 43 PW.1 also admits that sister's son of accused was barrowing of loan amount and he has repaid the said amount. But PW.1 denies that he has misused the cheque given as security for the said loan, though the loan amount was already repaid. It is not that both the appellant and accused were very close friends or relatives or very much acquainted each other. Both are business men. Then how complainant could have advanced such huge amount without any interest to the person who is not acquainted with him is also one of the circumstance goes against the complainant's case.

26. The Hon'ble Supreme Court in the case of K.Subramani vs. K.Damodara Naidu reported in 2014(4) KCCR 3661 has held that complainant has to show to the Court that he had capacity to lend huge amount to the accused.

27. It is to be remembered that the burden to prove the consideration for the cheque lies on the accused. If not rebutted, the presumption is that the cheque was issued for consideration. It is for the accused to prove that the cheque was not issued towards a debt or liability. Accused has to lead credible evidence for rebuttal of this presumption. The presumption that the cheque was issued for valid consideration under Section 118 can be raised only when the proceedings are initiated after complying with the statutory requirement of service of notice on the drawer. The presumption under Section 139 of the Act is a presumption of law, it is not a presumption of fact. This presumption has to be raised by the Court in all the cases once the factum of dishonour of cheque is established, the onus of proof to rebut this presumption lies on the accused. The standard of such rebuttal 45 evidence depends on the facts and circumstances of each of case.

28. The Hon'ble Supreme Court in the case of John K. John vs. Tom Verghees & another reported in AIR 2008 SC 278 held that the presumption under Section 139 could be raised in respect of some consideration and burden is on the complainant to show that he had paid amount shown in the cheque, whenever there is huge amount shown in the cheque. Though the initial burden is on the accused, it is equally necessary to know how the complainant advanced such a huge amount. The Hon'ble Supreme Court in latest decision Uttam Ram case referred supra and in case of Don Ayengia vs. State of Assam and another reported in (2016) 3 SCC 1 elaborated the presumption with reference to earlier decision rendered by Hon'ble Supreme Court.

29. Further, the documentary evidence produced by the complainant clearly indicates that Ex.P1 the said cheque was issued by the Proprietor, for ADAL Audio & Visual in favour of Md.Imtiyaz Ahammad Khan. So the said cheque is not issued by the accused in his personal capacity but, it is issued for ADAL Audio & Visual, as proprietor. That proprietorship or firm is not made a party. There is no explanation in this regard by complainant.

30. It is also evident from the trial Court records that on 08.11.2012 after hearing final arguments of the complainant's counsel before trial Court an application under Section 311 of Cr.P.C. came to be filed by the complainant stating that the accused is proprietor of ADAL Audio & Visual, the cheque is also bearing seal of the same. But however in the cause title it does not depict or disclose this. Complainant has contended that it is due to oversight. Therefore, he has sought 47 permission of court to lead evidence to that effect and prayed that he be permitted to rectify that mistake. But the said application came to be rejected by trial Court by order dated 08.11.2012 stating that the complainant cannot be allowed to take 'U' turn to contend that the cheque in question drawn by the accused for and on behalf of ADAL Audio & Visual and he cannot now change his contention nor it is his case all along. The trial Court held that at this belated stage, just fill up the lacuna such contention or rectification of such mistake cannot be permitted, when the arguments are already advanced by the complainant. Neither in his complaint nor in his statutory demand notice the complainant has stated anything about the cheuqe being issued by accused on behalf of said proprietorship of the ADAL Audio & Visual. This is also one more circumstances creates doubt about complainant's case. 48

31. Ex.P2 is memorandum issued by the Bank stating that the said cheque was returned as "payment stopped" by the drawer. Though the complainant has shown in his complaint, list of witnesses to be examined on his behalf and shown Branch Manager of that Karnataka Bank as witness but the Manager was not examined. Complainant has not produced any documents or evidence to show, why and for what reason the said "payment was stopped" by the drawer, because Bank will have information in this regard. But such information is not produced before the Court. On the other hand, the accused has stated that as the complainant did not return the cheque inspite of clearing the loan by the said Sagir Ahmed, he intimated the bank to "stop the payment" in respect of the cheque. It is evident that before presentation of said cheque by the complainant to the Bank, the accused had already issued intimation to Bank to "stop the payment". This 49 also indicates that the accused has taken all the precautions to see that the complainant should not misuse the said cheques. This is also another circumstances, brought out by the accused to rebut the presumption in favour of the complainant.

32. Ex.P3 is the demand legal notice. The contents of the said legal notice also creates a doubt about the complainant's case, sofar as requirement of ingredients of Section 138 of the N.I.Act. Because legal notice is issued not only to he accused but it is also issued to the Manager Karnataka Bank. It is stated that in the said notice that this complainant came to know that the accused had barrowed loan of Rs.20.00 lakh from the said Bank by mortgaging the house belonging to the accused, hence intimated in the said notice to the Bank that they have got first charge on the said property, and complainant has got second charge over the said property. The complainant informed the Bank 50 not to give any loan to the accused. This also indicates that, according to the complainant accused had already taken loan of Rs.20.00 lakh from the Bank, then what was the necessity for him to take again Rs.21.00 lakh from the complainant is not forthcoming. In his notice complainant has not stated the date when cheque was returned, 'dishonored' and when it was returned from the Bank. If at all accused had barrowed loan in August 2009, what was the necessity for accused to give that cheque in the year 2010? According to complainant the accused had barrowed loan of Rs.20.00 lakh from the Bank in the month of September 2010. But no records were produced. The complainant has not stated that after the cheque was returned dishonoured, whether he enquired the accused in this regard and demanded accused to return the amount nor he has mentioned the reason for dishonour of the cheque. Complainant has stated that accused has committed 51 offence under the N.I.Act, which appears to have been inserted and written subsequently after the legal notice is typed, then by handwriting in ink same is inserted without there being any signature or initial of any person for adding such sentences in ink at para-3 of Ex.P.3-Notice. When the other entire matter was typed, why and when that sentence was added in ink is not forthcoming. It is stated that the amount was not paid with interest @ 12%. So it appears Ex.P3 demand notice is not in accordance with the mandatory requirement of the notice under Section 138 of the N.I.Act, This is also is one of the factor in favour of the accused and against the complainant.

33. Admittedly, the complainant has filed a Civil suit in O.S.No.1/2012. As submitted by the counsel for the accused, the said suit came to be dismissed. This is not disputed by complainant's side. This High Court in 52 decision reported in 2012 (3) KCCR 2057 in the case of Veerayya vs. G.K.Madivalar held at para-20 as under:

"20. One other aspect to be taken note of is the submission concerning the suit filed by the respondent. The learned counsel for the petitioner has placed the judgment in O.S.No.213/2010, which was in respect of the suit filed by the respondent for recovery of money and the said suit was dismissed by the Trial Court. Though the learned counsel for the respondent submits that the respondent has preferred an appeal against the dismissal of the suit, the fact that the Trial Court had dismissed the suit also lends support to the argument of the learned counsel for the petitioner that the complainant had no capacity to advance Rs.2,00,000/- loan to the petitioner."

Therefore, dismissal of Civil Suit filed by the complainant after full fledged trial for recovery of money mentioned in Ex.P1 - cheque is yet another circumstance goes in favour of accused and strength his rebuttal evidence.

34. It is settled principles of law that the accused can rebut the presumption by two modes: First is by cross examining the complainant or his witnesses 53 and elicit in their evidence such evidence to show that presumption in favour of PW.1-complainant is not tenable and his defence is probable; The second mode is accused entering the witness box and giving his own defence evidence so as to rebut the presumption ofcourse by preponderance of probabilities. The proof by accused is not beyond reasonable doubt.

35. Now to rebut the evidence of complainant the accused entered the witness box and has given his own evidence as DW.1. The accused in his evidence states that he is not acquainted with the complainant nor he has given any cheque to complainant. But when his nephew Sagir Ahmed was looking after his transport business, at that time, he had made certain transactions and whenever he came to Gulbarga, the complainant used to visit Sagir Ahmed house. The said cheque was given to Sagir Ahmed by accused as security for the loan borrowed from the complainant. 54 The said amount of Rs.4.00 lakh was returned, but inspite of that the complainant did not return the cheque. When accused enquired Sagir Ahmed in this regard the said Sagir Ahamed told him that he had given it to complainant, but complainant did not return the said cheque. Therefore, accused gave intimation to Bank stating that if such cheque is presented "payment should be stopped". Accused has further deposed that the complaint allegations are all false. He is not at all liable to pay amount.

36. The cross examination of accused by complainant side indicates that most of the cross- examination evidence is regarding denial of case of complainant. The case of defence is not denied by complainant in cross examination. Therefore, it amounts admission on the part of complainant. In the cross-examination accused has stated that he do not know complainant, and he is not having acquaintance 55 with complainant. His evidence that Sagir Ahmed has made transaction with complainant is also not denied by complainant side. Accused evidence that he had given said cheque to Sagir Ahmed is not denied. Accused evidence that as complainant did not return the cheque to Sagir Ahmed which was given as security, so gave intimation to the Bank to "stop payment", as he is not liable to pay any amount, the said evidence that he is not liable is also not denied in the cross- examination. Simply it is suggested that whether any complaint was given by accused or any notice was issued to complainant, to that the accused has stated that he has not given any complaint. Accused has denied suggestion that for the loan barrowed, he has given cheque for Rs.21.00 lakhs. So except general cross-examination there is nothing in accused cross- examination so as to disbelieve his evidence. 56

37. Therefore, the cumulative effect of the evidence of complainant and the accused if considered, in the light of the principles stated in the judgments relied by both the sides it is evident that the complainant has failed to discharge initial burden casted upon him. On the other hand, accused defence evidence rebut the presumption and accused has placed evidence to prove his defence by preponderance of probabilities.

38. At the cost of repetation it is to be stated that there is no evidence about the same either in the examination-in-chief or in the legal notice of complainant, as to when the amount was given to the accused. It is simply stated that in the year August 2009, accused barrowed the amount and issued one post dated cheque. No interest is charged or no other documents were taken as security for such huge loan amount. No evidence led to show that this complainant 57 had capacity or income to pay loan to the tune of Rs.20.00 lakhs. It is admitted by complainant in cross- examination that sister son of accused had transaction with him and he has repaid the loan amount borrowed by him. The accused has stated that as he is not liable to pay any amount, he intimated the Bank to "stop the payment" in respect of that cheque, said evidence not denied. The complainant though cited Bank Manager as witness on his behalf but did not examine him. The suit filed by the complainant for recovery of payment of said amount based on Ex.P1-cheuqe came to be dismissed in a full fledged trial by Civil Court. The complainant states that he has got six more cheques belonging to accused. For what reason, for what purpose the accused had given him six cheques to him? Why complainant has kept these six cheques with him? what transaction he had with accused? is not forthcoming. The complainant also admits that accused 58 has paid some amount at different dates through cheques to his wife, but why he paid such amount is not forthcoming. But accused has given explanation in his evidence that in respect of amount barrowed by his nephew the said cheque signed by him were given to complainant's wife, for which no explanation is forthcoming from complainant's side. The complainant himself admits in his cross examination that Ex.P1 - Cheque was received by him only as a security for the loan barrowed. Therefore, presumption that the cheque was issued for legally recoverable debt or liability or there is any existence of legally recoverable debt or liability stood rebutted by bringing on record, evidence in this regard by cross examination of complainant and also by defence evidence of accused.

39. Therefore, in view of above said discussion and peculiar facts and circumstances of the case, which clearly indicates that the preponderance of probabilities 59 is tilting in favour of the accused. The accused has also brought on record such facts, material and circumstances in the cross-examination of PW.1 which could be reasonably said as accused proved a probable defence. Therefore, the burden to rebut the evidence of complainant and presumption in favour of complainant had been discharged by the accused to prove that the cheque was not issued in discharge of any legally recoverable debt or other liability or there exist any debt or liability by the accused to pay the said amount mentioned in the cheque to the complainant.

40. The decision in Rohitbhai Jivanlal Patel's case (referred supra) will not help the complainant's case and evidence. Hon'ble Supreme Court has referred to its earlier decision Rangappa's case (supra) and summarized the principles regarding presumption under Section 118 and 139 of the N.I.Act and also referred the decision of Kumar Exports vs. Sharma 60 Carpets reported in (2009) 2 SCC 513. It is evident from the principles stated in the said decision that initial presumption is drawn, the factors relating to the want of documentary evidence in the form of receipts or accounts or want of evidence as regards source of funds are not of relevant consideration while examining as to whether the accused has been able to rebut the presumption or not. But in view of factual matrix of this case which are peculiar facts, evidence and circumstances of this case, the nature of the admission made by the complainant and defence evidence of accused, the said principle has no application to this case. The Hon'ble Supreme Court at para-16 clearly held that the word relating to the preponderance of probabilities that the accused has to bring on record such facts and such circumstances which may lead the Court to conclude that either that the consideration did not exist or that its non-existence was so probable that 61 a prudent man would, under the circumstances of the case, act upon the plea that the consideration did not exist and mere denial of the case will not be sufficient to discharge the burden. But here if the evidence of complainant and accused are considered it is evident that the accused has discharged the onus on him. But complainant failed to discharge onus shifted on him.

41. In Kumar's case (referred supra) again the Hon'ble Supreme Court reiterated the principles regarding presumption arising under Section 138 and 139 of the Act. In that case there was no evidence lead to rebut the presumption. Under that circumstances, the Court held, mere denial is not sufficient but accused has to bring out the evidence to rebut the presumption. The said decision will not help the complainant in this case. The appellant also relied upon decision of the Hon'ble Supreme Court in Uttam Ram's case (referred supra). Again the Hon'ble Supreme Court reiterated the 62 principles regarding presumption arising under Section 139 of the Act by referring its earlier decision in Kumar's case (supra). In those cases the accused has not lead any evidence to rebut the presumption and cross-examination prosecution is not sufficient to rebut the presumption. But here the evidence, both in examination-in-chief and cross examination of complainant coupled with rebuttal evidence adduced by the accused clearly indicates that the presumption of consideration has been rebutted by the respondent- accused even on the basis of the evidence laid by the complainant alone. Apart from it the complainant has not denied defence evidence which is probable defence of accused. The accused has lead legally admissible defence evidence to rebut presumption if any in favour of complainant.

42. In view of the principles stated in the above referred decisions if the facts and evidence in this case 63 are considered, in my considered view the trial Court is justified in acquitting the accused. The trial Court has raised proper points for consideration by considering the relevant provisions under the N.I.Act and also decisions stated thereon and also discussed oral and documentary evidence in detail and came to conclusion that the accused has rebutted presumption and there is no legally recoverable debt or liability in existence. It is settled principles of law, that while considering the judgment of acquittal, the First Appellate Court or High Court normally should not set aside the judgment of acquittal or interfere, unless the judgment of the trial Court is perverse and not based sound principles regarding appreciation of evidence in N.I.Act cases. In the light of these principles and the principles stated in the decisions of the Hon'ble Supreme Court referred above, it is evident that the evidence placed before the trial Court clearly indicates that the complainant is 64 disentitled to benefit of presumption under Section 139 of N.I.Act. He has failed to discharge initial burden on him to show that the cheque in question was issued in discharge of any legally recoverable debt or other liability.

43. In view of the facts, circumstances and vidence peculiar to this case and the dismissal of civil suit for recovery of the cheque amount in full fledged trial by the Civil Court, I find no grounds to interfere with the well reasoned finding of the trial Court. Accordingly, the appeal being devoid of merits, is liable to be dismissed.

44. Hence, I proceed to pass the following:

ORDER Accordingly, the appeal stands dismissed. 65 The judgment and order passed by the IV-Addl. Civil Judge & JMFC, Gulbarga in C.C.No.2721/2011 dated 22.02.2013, is hereby confirmed.

Send back the Trial Court Records to the concerned Court forthwith.

Sd/-

JUDGE sdu

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