Jharkhand High Court
E-Shashi Kumar vs The State Of Jharkhand on 10 April, 2024
Author: Sanjay Prasad
Bench: Sanjay Prasad
IN THE HIGH COURT OF JHARKHAND AT RANCHI
Cr. Revision No. 1034 of 2018
E-Shashi Kumar ...... Petitioner
Versus
1.The State of Jharkhand
2.Vijay Singh ....... Opp. Parties
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CORAM: HON'BLE MR. JUSTICE SANJAY PRASAD
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For the Petitioner : Mr. Deepankar, Advocate
For the State : Mr. Rajesh Kumar, APP
For the O.P. No.2 : Mr. Girish Mohan Singh, Advocate
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JUDGMENT
th 11/Dated:10 April, 2024 This Criminal Revision Application has been filed on behalf of the petitioner against the judgment dated 08.05.2018 passed in Criminal Appeal No.63 of 2018 by the learned Sessions Judge, East Singhbhum at Jamshedpur by which the appeal preferred on behalf of the appellant-O.P.No.2 has been allowed by setting aside the judgment of conviction and sentence dated 27.02.2018 passed by the Court of Ms. Rupa Bandana Kiro, Judicial Magistrate, Ist Class, Jamshedpur in C/1 Case No.3082 of 2013 (T.R.No.18 of 2018) by which the O.P. No.2 was convicted for the offence under Section 138 of the N.I. Act and sentenced him to undergo S.I for 30 days and pay fine of Rs.14,05,000/-.
2. The complainant‟s case, in brief, is that the accused had demanded Rs.20,00,000/- from the complainant and on 16.04.2013 the accused had taken Rs.10,00,000/- as friendly loan from the complainant for development of business of his firm namely M/s Magadh Enterprises with assurance that the same will be repaid within one month. It is further case of the complainant that after 1 several demands, the accused as a proprietor of Magadh Enterprises issued a postdated cheque bearing no.057834 of Rs.10,00,000/- (Rs.Ten lakhs) dated 03.06.2013 of Bank of India in favour of the complainant and assured him that the same will be honoured by his Bank after its presentation. However, in first week of June, when the complainant presented the said cheque in his account of S.B.I, Golmuri Branch then the same was dishonoured due to „insufficient fund‟ through cheque return memo dated 29.06.2013. Then the complainant immediately informed the accused-O.P. No.2 about dishonour of cheque but the accused advised the complainant for again presentation of cheque after fifteen days. Thereafter the complainant again presented the cheque after fifteen days but again the aforesaid cheque was dishonoured due to „insufficient fund‟ and the same was informed to the complainant through cheque return memo dated 18.07.2013 and again the complainant informed to the accused regarding dishonor of cheque and the accused failed to make payment of the cheque amount. Thereafter the complainant that the complainant sent a legal notice dated 17.08.2013 through registered post and the same was received by the accused on 19.08.2013 but the accused neither paid the cheque amount nor gave reply of legal notice. Hence, the complainant lodged this complaint case for the offence under Section 138 of N.I. Act against the accused.
3. Heard Mr. Deepankar, learned counsel for the petitioner, Mr. Rajesh Kumar, learned APP for the State and Mr. Girish Mohan Singh, learned counsel for the O.P. No.2.
4. It is submitted that that the impugned judgment dated 08.05.2018 passed by the learned Appellate Court in Cr. Appeal No.63 of 2018 is illegal, arbitrary and not sustainable in the eye of 2 law. It is submitted that the learned Court below has wrongly set aside the judgment of conviction and order of sentence dated 27.02.2018 passed by the learned Judicial Magistrate, Ist Class Jamshedpur in C/1 Case No.3082 of 2013 (T.R.No.18 of 2018) by which the O.P. No.2 had been sentenced to undergo S.I for 30 days and pay the fine of Rs.14,05,000/-. It is submitted that the learned Appellate Court has failed to consider that the O.P. No.2 is legally liable to pay the debt to the petitioner. It is submitted that the learned Appellate Court has failed to consider the presumption of Section 139 of N.I. Act. It is well settled principle of law that the burden to rebut the presumption under Section 139 of N.I. Act is on accused, "the burden on the accused to rebut the presumption is only to the extent of preponderance of the probability" whereas the complainant has to prove its case beyond all reasonable doubt. It has also been submitted that the accused can rely on the evidence brought on record by the complainant to rebut the presumption and it is not necessary that he has to lead separate and direct evidence, however, in the present case the accused respondent has not been able to rebut the presumption of the cheque having been issued for consideration of amount reflected in cheque. It is submitted that the Appellate Court has given wrong finding in respect of I.T. Return. The learned Appellate Court below has committed error by observing as the amount in loan disbursed was not shown in I.T. Return, the appellant could not be said to have proved its case beyond reasonable doubt, is also erroneous. It is submitted that the learned Appellate Court has given wrong finding for not impleading the company as an accused in view of the fact that the M/s Magadh Enterprises is a proprietorship firm and accused has issued the cheque as a proprietor of the company who 3 was looking day today affair of the company and he is the responsible person of the company who had issued cheque on behalf of the company against the friendly loan and hence it is not necessary to make the company as an accused. It is submitted that the learned Appellate Court has failed to appreciate the fact that the petitioner had given friendly loan to the accused-O.P. No.2 and the O.P.No.2 being the sole proprietor had issued a cheque in favour of the petitioner. Thus, there is no necessity to make the company as an accused. It is submitted that the learned Appellate Court has failed to consider the finding of the Hon‟ble Supreme Court in Ghurey Lal vs. State of U.P (2008 (10) SCC 450, in which it has been held that the appellate court may only overrule or otherwise disturb the trial court‟s finding if it has very substantial and compelling reasons for doing so.
5. Learned counsel for the petitioner in support of his contention has placed reliance upon the judgment passed in the case of Shri Deelip Apte vs. Nilesh P. Salgaonkar and another in Criminal Revision Application No.15 of 2006 with Criminal Appeal No.60 of 2005 on 06.07.2006.
6. On the other hand, learned counsel for the State has submitted that the judgment passed by the learned Court below is fit and proper and as such no interference is required. It is submitted that the learned Appellate Court has correctly appreciated the evidence and has reversed the judgment and sentence passed by the learned trial court below. It is submitted that the petitioner has not impleaded the proprietor of the firm as party in this case. Hence the Appellate Court has rightly allowed the appeal.
47. On the other hand, learned counsel for the O.P. No.2, after adopting the submission of learned APP, has further submitted that this Criminal Revision Application is devoid of merit. It is submitted that no illegality has been committed by the learned Court below by passing the impugned judgment while reversing the judgment of conviction and sentence dated 27.02.2028 passed by the Judicial Magistrate, Ist Class, Jamshedpur. It is submitted that the complainant has failed to prove its case in absence of proprietor of Magadh Firm as a party.
8. Learned counsel for the O.P. No.2 has placed reliance upon the following judgments reported in:-
(i) AIR 2012 SC 2795 (Aneeta Hada vs. M/s Godfather Travels and Tours Pvt. Ltd.),
(ii) (2015) 15 SCC 768 (Charanjit Pal Jindal vs. L.N. Metalics,
(iii) (2019) 3 SCC 797 (Himanshu vs. B. Shivamurthy and Another) and
(iv) (2022) 6 SCC 735 (Tedhi Singh vs. Narayan Dass Mahant)
9. Perused the Lower Court Records and considered the submissions on behalf of both the parties.
10. It transpires that the complainant-petitioner had filed complaint case C/1 Case No.3082 of 2013 on 18.09.2013 for the offence under Section 138 of the N.I. Act stating therein that the accused-O.P. No.2 had taken friendly loan of Rs.20,00,000/- (Rs. Twenty lakhs) on 16.04.2013 from him for development of his business and had assured him to return the same within one month. However, after several demands made by him, the accused-O.P. No.2 being proprietor of Magadh Enterprises ahd issued postdated Cheque no.057834 dated 03.06.2013 of an amount of Rs.10,00,000/- (Rs. Ten Lakhs) of Bank of India, Jamshedpur in 5 his favour for realisation of loan amount and when the same was presented on last week of June, 2013 then he received cheque returned memo dated 29.06.2013 by which it was informed that the cheque has been dishonourned due to „insufficient fund‟. Thereafter the complainant-petitioner, on advice of accused-O.P. No.2, again presented the cheque after 15 days but again it was dishonoured and returned vide memo dated 18.07.2013 due to „insufficient fund‟. Then legal notice was sent to the O.P. No.2 on 17.08.2013 and the same was received by O.P. No.2 on 19.08.2013 but no payment was made.
11. It further appears that examination in-chief of the complainant was filed on an affidavit on 07.10.2013 and the case was fixed for his cross-examination and for enquiry evidence on several dates and on 11.07.2014, the complainant filed photo copy of certain documents and the case was fixed for passing order on the point of cognizance. Thereafter vide order dated 05.08.2014 the learned Judicial Magistrate, Ist Class had taken cognizance against the accused-O.P. No.2 under Section 138 of the N.I. Act on the basis of affidavit of complainant, instead of examining him on Solemn Affirmation (i.e. S.A) and issued summons against the accused-O.P. No.2.
12. It transpires that the accused-O.P. No.2 had surrendered before the learned Court below on 27.10.2015 and he was released on bail on 27.10.2015 itself.
13. Substance of accusation was explained to the accused-O.P. No.2 on 30.03.2016 for the offence under Section 138 of the N.I. Act and to which he pleaded not guilty and claimed to be tried.
14. During trial the complainant had got examined two (02) witness, who are as follows:
6(i) C.W-1 is E. Shashi Kumar (i.e. the complainant himself) and
(ii) C.W-2 is Manoj Kumar Das.
15. The complainant, in support of his case, had got marked the following documents as exhibits which were as follows:-
(i) Ext-1 is the original cheque no.057834 dated 03.06.2013 of Bank of India (with objection),
(ii) Ext-2 is the Cheque return memo dated 29.06.2013,
(iii) Ext-3 is the cheque return memo dated 18.07.2013,
(iv) Ext-4 is the Carbon copy of legal notice.
(v) Ext-4/1 is the postal receipt and
(vi) Ext-5 is the Acknowledgement received notice dated
19.08.2013 (with objection).
16. The O.P. No.2 had got examined two witnesses in support of his case who are as follows:-
(i) D.W-1 is Jaganath Sandil and
(ii) D.W-2 is Vinay Kumar Pankaj i.e. son of O.P. No.2.
17. Thereafter the accused-O.P. No.2 was examined under Section 313 Cr.P.C on 13.07.2017 to which he denied the circumstances put forth before him.
18. The defence in support of his case has got marked the following documents as the exhibits which are as follows:-
(i) Ext-A is photo copy of legal notice dated 17.08.2013,
(ii) Ext-B is photo copy of Cheque return memo dated 29.06.2013,
(iii) Ext-C is Photo copy of acknowledgement,
(iv) Ext-D is photo copy of Cheque no.057834 dated 03.06.2013,
(v) Ext-E is signature of Chief Manager, Telco Town Branch, BOI,
(vi) Ext-F is signature of Chief Manager, Telco Town Branch, Bank of India,
(vii) Ext-G is the cheque receiving in the letter head of M/s Magadh Enterprises and
(viii) Ext-H is the statement of account from 2006 to 2012.
19. Thereafter the learned court below had convicted the O.P. No.2 for the offence under Section 138 of the N.I. Act and 7 sentenced him to undergo S.I for 30 day and pay fine of Rs.14,05,000/-.
20. Thereafter the O.P. No.2 filed Cr. Appeal No.63/2018 before the learned Sessions Judge, East Singhbhum, Jamshedpur and which was allowed vide judgment dated 08.05.2018 passed by the learned Sessions Judge and hence the present Criminal Revision has been filed on behalf of the complainant-petitioner. Hence appreciation of evidence is necessary.
21. C.W-1 is the complainant himself, who has filed evidence on affidavit stating therein that the proprietor of Magadh Enterprises had issued Cheque no.057834 dated 03.06.2013 for an amount of Rs.20,00,000/- (Rs.Twenty Lakhs), Bank of India, in lieu of friendly loan taken by him for development of his business. He has proved the Cheque no.57834 marked as Exhibit-1 (with objection), Cheque return memo dated 29.06.2013 as Exhibit-2, another cheque return memo dated 18.07.2013 marked as Exhibit-C. Legal notice and postal receipts marked as Exhibit-4 and Exhiit-4/1 and acknowledgement marked as Exhibit-5 (with objection). He further stated that when he presented cheque in account then the same was returned by cheque return memo dated 29.06.2013 marked as Exhibit-2. Thereafter he again presented the cheque in his account after advice of the accused-O.P. No.2 but it was returned vide memo dated 18.07.2013 marked as Exhibit-3. Thereafter he sent legal notice and has proved postal receipts as Exhibit-4 and Exhibit-4/1 respectively. The accused had received the notice and he had proved the acknowledgement as Exhibit-5 (with objection) but O.P. No.2 had not paid any amount.
22. During cross-examination, C.W-1 stated that he was not doing business of lending and interest although he files Income 8 Tax Return but he does not remember is Pan Card and he fills his income tax return personally and also fills income tax return in the name of Firm. He could not remember the return filed in the year 2012-13. He admitted his signature in the complaint petition and stated that he has not done any business with the O.P. No.2. He denied the suggestion for doing business between the year 2006 to 2013.
23. On being confronted on the point of issuance of cheque dated 06.02.2006 vide Cheque no.832724 of Rs.1,60,000/-, Cheque no.13092 dated 08.06.2006 of Rs.25,000/-, Cheque no.13093 dated 06.07.2006 of Rs.25,000/-, Cheque no.17612 dated 06.07.2006 of Rs.25,000/- and Cheque no.17611 dated 06.07.2006 of Rs.25,000/-, Cheque no.17632 dated 02.09.2006 of Rs.30,000/- and Cheque no.17631 of Rs.30,000/-, Cheque no.5382 dated 15.12.2006 of Rs.10,000/-, Cheque no.5385 dated 18.12.2006 of Rs.30,000/-, Cheque no.63580 dated 07.01.2001 of Rs.1,00,000/-, Cheque no.188 dated 06.09.2012 of Rs.50,000/- and Cheque no.187 dated 25.08.2012 of Rs.50,000/- and Cheque no.049057 dated 27.04.2011 of Rs.1,00,000/-. He does not remember the date. Thus, the assertion of the complainant-petitioner is falsified to the effect that he had not done any business with the accused-O.P. No.2.
He further denied that for supplying Poklen Machine to Vijay Singh-O.P. No.2 and in lieu of which he made payment of the above amount. He emphasized that accused-O.P. No.2 had handed over cheque on 28.06.2013 and it is wrong to say that Cheque no.057834 is of 03.06.2013 rather the said cheque is of 28.06.2013. He admitted that he has not filed any document to show payment of Rs.20,00,000/- to the accused-O.P. No.2 in the Court. He further 9 stated that he had paid Rs.20,00,000/- to the accused-O.P. No.2 on 04.04.2013 and he had paid Rs.20,00,000/- i.e. 20.00 Lakh in cash to the accused. He further asserted that certain amount of cash belonged to him and he had taken certain amount from some persons working with him. He further stated that his personal cash amount was approx Rs.10,00,000/- and remaining Rs.10,00,000/- was taken from Manoj Das, resident of Birsa Nagar, Zone no.5 and taken Rs.4,00,000/- cash from him. He had also taken Rs.6,00,000/- cash from his partner Gurmit Singh and he had returned Rs.4,00,000/- cash to Manoj Das. He and Gurmit Singh are partners in B.M. Transport and he had also returned Rs.6,00,000/- cash to Gurmit Singh but he could not remember as to on which date he had returned amount to Manoj Das and Gurmit Singh. He had withdrawn Rs.10,00,000/- from his business and had returned the same.
24. He further stated that from 04.04.2013 to 03.06.2013 he had not demanded any amount from Vijay Singh in writing and had merely sent notice to him.
During his further cross-examination, he admitted to have also instituted C/1 Case No-3079/2013 separately for giving Rs.10,00,000/- to the O.P. No.2. He had not advised him to give only one cheque of Rs.20,00,000/-. He had submitted list of documents on 11.05.2014. He admitted to have submitted photo copy of legal notice, photo coy of cheque, photo copy of cheque return memo and photo copy of A/D.
25. During his further cross-examination by the defence side, photo copy of legal notice, photo copy of cheque, bank return memo dated 29.06.2013, photo copy of acknowledgement and bank return memo dated 18.07.2013 have been exhibited as 10 Exhibit-A to Exhibit-E (on admission of witness) respectively. He admitted that no dated is mentioned in Exhibit-A (i.e. legal notice) and no date has been given with the signature of Advocate. He had also not put his signature on it. However, said cheque was deposited in Allahabad Bank but he does not remember the date. But the cheque return memo dated 04.07.2013 and second return memo was received on 04.07.2013. He had not sent any written notice for delay in payment of Rs.20,00,000/-.
26. He further admitted that Vijay Singh-O.P. No.2 had signed during his presence but he could not remember as to who had filled the cheque and who had put the date.
He denied the suggestion that amount of cheque has already been received by him in the year 2011 but he has not deliberately returned the cheque to the accused-O.P. No.2.
27. Thus, from scrutinizing the evidence of C.W-1, it is evident that his evidence is full of contradictions and incorrect statements. On the one hand, he himself admitted that he had not done any business with the O.P. No.2 but on the other hand when he was confronted of transactions of various amounts by the defence side by different cheques with the O.P. No.2, then he showed his ignorance, which shows that the witness i.e. C.W-1 is not truthful.
He further stated for having taken Rs.4,00,000/- cash from Manoj Kumar Das and Rs.6,00,000/- from Gurmit Singh has been wrongly found untrue by the learned Court below and this Court also agrees with the view of learned Appellate Court that no person would take Rs.10,00,000/- as a loan for giving loan to another person and he has also falsified from his own statements.
28. From perusal of Exhibit-C, it would appear that one Prakash Manjhi had received two cheques on 19.08.2008 from the O.P. 11 No.2-Vijay Singh bearing Cheque No.057834 and 057845 as security without filling any amount as he had taken Poklen Machine @ Rs.450/ per hour from E. Shashi Kumar.
29. It transpires that the learned Trial Court below has failed to consider Exhibit-C. However, learned Appellate Court has noticed Exhibit-C and observed that the complainant has not examined said Prakash Manjhi, who had received two cheques bearing Cheque Nos.057834 and 057845, as an employee of Magadh Enterprises and the cheques were not filled at the time of its handing over on 19.08.2008 to Prakash Manjhi, an Employee/Supervisor of Magadh Enterprises.
30. Exhibit-E and Exhibit-F respectively are signature of Chief Manager, Bank of India in which it has been stated that certain cheques including the Cheque Nos.057834 and 057845 were issued by the Bank to the O.P. No.2 and he had issued the certificate, marked as Exhibit-F as per order passed by the learned Judicial Magistrate, Jamshedpur, Case No.3082/13 and G-3079/13. Therefore, the O.P. No.2 had taken the defence that the cheques in question is the subject matter of present Criminal Revision Application, was issued as far back as on 09.06.2008 and his assertion that it was handed over by way of security to the complainant-petitioner on 19.08.2008 is corroborated from this aspect also. Thereafter the O.P. No.2 had issued more than hundreds (100) cheques from the said Bank of India.
31. C.W-2 is Manoj Kumar Das, who has also filed his evidence stating therein that he is acquainted with the complainant and the accused-O.P. No.2 and the complainant-E Shashi Kumar had taken Rs.4,00,000/- from him. He further stated that O.P. No.2 had taken Rs.20,00,000/- from the complainant in the month of April, 2013 12 and the complainant had made several demands from the accused and the accused-O.P. No.2 had issued two cheques in favour of the complainant which were dishonoured and the accused had not returned the said amount.
During cross-examination, he admitted that he had no documentary paper to show handing over Rs.4,00,000/- on 02.04.2013 to E-Shashi Kumar and he had also no documentary paper to show that E-Shashi Kumar had returned him Rs.4,00,000/- . However, he was present in Jamshedpur on 04.04.20013 to 16.04.2013. He is not a partner of complainant. He had also no document/paper to show the amount paid to the complainant previously by him. He had never kept Machine for construction of road but E-Shashi Kumar had got Poklen Machine. However, he has no information that due to non-payment of loan, he had returned Poklen Machine to the Bank.
32. Thus, from scrutinizing the evidence of C.W-2, it is evident that he claimed to be friend of the complainant but his evidence is not reliable as he has also failed to show any paper of handing over Rs.4,00,000/- cash to the complainant-E-Shashi Kumar and also for receiving Rs.4,00,000/- cash from the complainant. However, he had clearly admitted that the complainant was keeping one Poklen Machine which was being used for construction of road but he had denied the suggestion that the complainant had to surrender said Poklen Machine to the Bank.
Thus, it is evident that the complainant was doing business of running Poklen Machine and for which the document marked as Exhibit-C reveals that the accused-O.P. No.2 had taken Poklen Machine @ Rs.450/ per hour and for which there was several transactions between the petitioner and the O.P. No.2.
1333. So far as defence evidence is concerned, D.W-1 is Jaganath Sandil, who is Manager of Bank of India and has stated during his evidence that Telco Branch Manager has authorized him for giving evidence and he has proved the signature of Chief Manager, Bank of India on the authorization letter marked as Exhibit-E. He has further proved the certificate dated 19.09.2017 prepared by Anil Kumar, Chief Manager, Bank of India. He identified the signature of Chief Manager as Exhibit-F. He further stated that Cheque no.057834 comes in the bundle of cheques dated 09.06.2008.
34. During cross-examination, he stated to have not seen the Register in which the bundle of Cheque no.57801 and Cheque no.57850 was issued. He has no personal knowledge of account of accused. However, cheque issued in the year 2008 can be used by the customer in the year 2012 or any year. It is also correct that any person who receives cheque in the year 2008 can use separately.
35. Thus, from scrutinizing the evidence of D.W-1, it is evident that he had deposed at the instance of O.P. No.2 and has been authorized by the Bank to prove that the Cheque no.057834 has been issued from the bundle issued on 09.06.2008.
36. D.W-2 is Vinay Kumar Pankaj, who is son of O.P. No.2 and has stated during his evidence filed on an affidavit, that he is acquainted with both the sides and there were business transaction between both the sides in the year 2004 and the complainant-E- Shashi Kumar had given his Poklen Machine on rent of Rs. 450/- per hour to his father. His father had issued bearing no.057834 and 057845, Bank of India, Telco Branch as security to the complainant and both the cheques were received by Prakash Manjhi, who was the staff of E-Shashi Kumar (i.e. the complainant) and he identified the signature of Prakash Manjhi and 14 Vijay Kumar Singh and has proved the document marked as Exhibit-G (with objection) and which was received by Prakash Manjhi during his presence. The entire fair of Poklen Machine has been paid to E-Shashi Kumar but he had not returned the cheques given by security and used to say that he has forgotten the cheque.
37. During cross-examination, he stated that his father is sole proprietor of Magadh Enterprises. On being shown the cheques, he stated that his father had given cheque to the complainant and Exhibit-6 does not contain the signature of the complainant. On being shown Exhibit-5, the witness stated that the date written is not clear as it may be 14 or 19. He is doing business since the year 2007. He asserted that bank transaction made with the complainant had taken place prior to the year 2013 before institution of the case. He is not aware as to whether his father had paid certain amount to the complainant. He admitted that he had not shown any document to show that Prakash Manjhi was working before the complainant. Exhibit-6, receiving receipt has been prepared in the writing of his father. He denied the suggestion that Prakash Manjhi is an imaginary person. However, he is not aware of complete address of Prakash Manjhi.
38. Thus, from scrutinizing the evidence of D.W-2, it would appear that he is son of the O.P. No.2 and had asserted that his father had given two cheques as security to Prakash Manjhi, who was the employee of the complainant. However, he also could not examine said Prakash Manjhi as a witness and he denied the suggestion that Prakash Manjhi is an imaginary person. It has also come on record from his evidence that his father was the sole proprietor of Magadh Enterprises.
1539. From perusal of the judgment passed by the learned Court below, it would appear that the learned Trial Court has convicted the O.P. No.2 on the ground that the O.P. No.2 had not denied his signature on the cheque. The Trial Court further held that the presumption is led in favour of the complainant for the holder in due course under Section 138 read with Section 118 of the N.I. Act.
40. However, the learned Appellate Court below has set aside the judgment of conviction and sentence on three grounds:-
(i) That non-impleadment of the firm-M/s Magadh Enterprises amounts to non-compliance of the Section 141 of the N.I. Act and has also placed reliance upon the judgment reported in (2015) 9 SCC 622 and held that the sole proprietor was Managing Director ought to have been arrayed as an accused.
The cheque was not issued in the personal capacity by the accused rather the cheque was issued as proprietor of Magadh Enterprises.
(ii) The Court below further observed that the date of lending of Rs.20,00,000/- (Rs.Twenty Lakhs) is not very certain and two dates i.e.04.04.2013 and 16.04.2013 have been brought on record and the complainant had also admitted that he had just Rs.10 to 12 lakhs even on 16.04.2013 with him and had borrowed Rs.6,00,000/- from a business partner Gurmit Singh and Rs.4,00,000/- from Manoj Kumar Das and held that this circumstance goes against the complainant as to why a person will borrow Rs.10,00,000/- from some third person in order to give Rs.20,00,000/- to the accused-O.P. No.2. Thus, there is a preponderance of 16 probabilities making the alleged loan transaction doubtful, even the complainant had not filed Income Tax Return to show that he had the capacity to give a friendly loan of Rs.20,00,000/- and also observed that the complainant was unable to pay EMI to its financer due to financial crunch and he had to surrender the Poklen Machine back to the financer.
(iii) Two cheques including the cheque in question were given as security and non-examination of Prakash Manjhi who signed on Exhibit-C has not been examined on behalf of the complainant and Exhibit-C revealed that two cheques were given as security to the complainant by the O.P. No.2.
41. This Court finds that no illegality has been find by the learned Appellate Court below and the learned Appellate Court below has rightly observed that the Managing Director or the sole proprietor of M/s Magadh Enterprises has not been arrayed as a party in the accused and the complaint cannot succeed in absence of non-impleadment of Managing Director or sole proprietor of M/s Magadh Enterprises in view of judgment of Hon‟ble Supreme Court reported in (2015) 9 SCC 622 and 2015 12 SCC 768.
42. It has been held in the case of Aneeta Hada vs. M/s Godfather Travels and Tours Pvt. Ltd. reported in (2012) 5 SCC 661 at paragraph nos.59 and 64 as follows:
"Para-59:- In view of our aforesaid analysis, we arrive at the irresistible conclusion that for maintaining the prosecution under Section 141 of the Act, arraigning of a company as an accused is imperative. The other categories of offenders can only be brought in the drag-net on the touchstone of vicarious liability as the same has been stipulated in the provision itself. We say so on the basis of the ratio laid down in C.V. Parekh [(1970) 3 SCC 491 : 1971 SCC (Cri) 97] which is a three-Judge Bench decision. Thus, the view expressed in Sheoratan Agarwal [(1984) 4 SCC 352 17 : 1984 SCC (Cri) 620] does not correctly lay down the law and, accordingly, is hereby overruled. The decision in Anil Hada [(2000) 1 SCC 1 : 2001 SCC (Cri) 174] is overruled with the qualifier as stated in para 51. The decision in Modi Distillery [(1987) 3 SCC 684 : 1987 SCC (Cri) 632] has to be treated to be restricted to its own facts as has been explained by us hereinabove.
Para-64:- Keeping in view the anatomy of the aforesaid provision, our analysis pertaining to Section 141 of the Act would squarely apply to the 2000 enactment. Thus adjudged, the Director could not have been held liable for the offence under Section 85 of the 2000 Act. Resultantly, Criminal Appeal No. 1483 of 2009 is allowed and the proceeding against the appellant is quashed. As far as the Company is concerned, it was not arraigned as an accused. Ergo, the proceeding as initiated in the existing incarnation is not maintainable either against the company or against the Director. As a logical sequitur, the appeals are allowed and the proceedings initiated against Avnish Bajaj as well as the Company in the present form are quashed."
43. It has been held in the case of Charanjit Pal Jindal vs. L.N. Metalics reported in (2015) 15 SCC 768 at paragraph nos.11 and 12 as follows:-
"Para-11:- From the aforesaid finding, we find that after analysing all the provisions and having noticed the different decisions rendered by this Court, the three-Judge Bench arrived at the irresistible conclusion that for maintaining the prosecution under Section 141 of the Act, arraigning a company as an accused is imperative. Hence in this case, we find no reason to refer the matter to the larger Bench. Para-12:- In the present case, only the appellant was impleaded as an accused. In that view of the matter, we are of the view that complaint with respect to the offence under Section 138 read with Section 141 of the Act was not maintainable following the decision in Aneeta Hada [Aneeta Hada v. Godfather Travels & Tours (P) Ltd., (2012) 5 SCC 661 : (2012) 3 SCC (Civ) 350 : (2012) 3 SCC (Cri) 241] . We set aside the judgment dated 17-4-2010 passed by the trial court, the order dated 27-5-2011 passed by the appellate court and the impugned judgment dated 9-11-2012 passed by the High Court of Orissa, Cuttack in Charanjit Pal 18 Jindal v. L.N. Metalics [Charanjit Pal Jindal v. L.N. Metalics, Criminal Revision No. 467 of 2011, decided on 9- 11-2012 (Ori)] . The appellant stands acquitted."
44. It has been held in the case of Himanshu vs. B. Shivamurthy and Another reported in (2019) 3 SCC 797 at paragraph nos.12 and 13 as follows:-
"Para-12:- The provisions of Section 141 postulate that if the person committing an offence under Section 138 is a company, every person, who at the time when the offence was committed was in charge of or was responsible to the company for the conduct of the business of the company as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished.
Para-13:- In the absence of the company being arraigned as an accused, a complaint against the appellant was therefore not maintainable. The appellant had signed the cheque as a Director of the company and for and on its behalf. Moreover, in the absence of a notice of demand being served on the company and without compliance with the proviso to Section 138, the High Court was in error in holding that the company could now be arraigned as an accused."
45. It has been held in the case of Basalingappa vs. Mudibasappa reported in (2019) 5 SCC 418 at paragraph nos. 13, 14, 16, 17, 22, 25, 25.05, 28 and 29 as follows:-
"Para-13:- This Court in Bharat Barrel & Drum Mfg. Co. v. Amin Chand Payrelal [Bharat Barrel & Drum Mfg. Co. v. Amin Chand Payrelal, (1999) 3 SCC 35] had occasion to consider Section 118(a) of the Act. This Court held 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 and defendant can prove the non-existence of a consideration by raising a probable defence. In para 12, the following has been laid down: (SCC pp. 50-51) "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 19 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 his 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. 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."
Para-14:- S.B. Sinha, J. in M.S. Narayana Menon v. State of Kerala [M.S. Narayana Menon v. State of Kerala, (2006) 6 SCC 39 : (2006) 3 SCC (Cri) 30] had considered Sections 118(a), 138 and 139 of the Act, 1881. It was held that presumptions both under Sections 118(a) and 139 are rebuttable in nature. Explaining the expressions "may presume" and "shall presume" referring to an earlier judgment, the following was held in para 28: (SCC p. 49) "28. What would be the effect of the expressions "may presume", "shall presume" and "conclusive proof" has been considered by this Court in Union of India v. Pramod Gupta [Union of India v. Pramod Gupta, (2005) 12 SCC 1] , in the following terms: (SCC pp. 30-31, para 52) „52. ... It is true that the legislature used two different phraseologies "shall be presumed" and "may be 20 presumed" in Section 42 of the Punjab Land Revenue Act and furthermore although provided for the mode and manner of rebuttal of such presumption as regards the right to mines and minerals said to be vested in the Government vis-à-vis the absence thereof in relation to the lands presumed to be retained by the landowners but the same would not mean that the words "shall presume"
would be conclusive. The meaning of the expressions "may presume" and "shall presume" have been explained in Section 4 of the Evidence Act, 1872, from a perusal whereof it would be evident that whenever it is directed that the court shall presume a fact it shall regard such fact as proved unless disproved. In terms of the said provision, thus, the expression "shall presume" cannot be held to be synonymous with "conclusive proof"."
Para-16:- This Court in M.S. Narayana Menon case [M.S. Narayana Menon v. State of Kerala, (2006) 6 SCC 39 : (2006) 3 SCC (Cri) 30] held that what is needed is to raise a probable defence, for which it is not necessary for the accused to disprove the existence of consideration by way of direct evidence and even the evidence adduced on behalf of the complainant can be relied upon. Dealing with standard of proof, the following was observed in para 32: (SCC p. 51) "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."
Para-17:- In Krishna Janardhan Bhat v. Dattatraya G. Hegde [Krishna Janardhan Bhat v. Dattatraya G. Hegde, (2008) 4 SCC 54 : (2008) 2 SCC (Cri) 166] , this Court held that an accused for discharging the burden of proof placed upon him under a statute need not examine himself. He may discharge his burden on the basis of the materials already brought on record. The following was laid down in para 32:
(SCC p. 62) "32. An accused for discharging the burden of proof placed upon him under a statute need not examine himself. He may discharge his burden on the basis of the materials already brought on record. An accused has a constitutional right to maintain silence. Standard of proof on the part of an accused and that of the prosecution in a criminal case is different."
Para-22:- Elaborating further, this Court in Rangappa case [Rangappa v. Sri Mohan, (2010) 11 SCC 441 : (2010) 4 SCC (Civ) 477 : (2011) 1 SCC (Cri) 184] held that Section 139 21 of the Act is an example of a reverse onus and the test of proportionality should guide the construction and interpretation of reverse onus clauses on the defendant-accused and the defendant-accused cannot be expected to discharge an unduly high standard of proof. In paras 27 and 28, the following was laid down: (Rangappa case [Rangappa v. Sri Mohan, (2010) 11 SCC 441 : (2010) 4 SCC (Civ) 477 : (2011) 1 SCC (Cri) 184] , SCC pp. 453-54) "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 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."
Para-25:- We having noticed the ratio laid down by this Court in the above cases on Sections 118(a) and 139, we now summarise the principles enumerated by this Court in following manner:
Para-25.5:- It is not necessary for the accused to come in the witness box to support his defence.
Para-28:- There is one more aspect of the matter which also needs to be noticed. In the complaint filed by the complainant as well as in examination-in-chief the 22 complainant has not mentioned as to on which date, the loan of Rs 6 lakhs was given to the accused. It was during cross- examination, he gave the date as November 2011. Under Section 118(b), a presumption shall be made as to date that every negotiable instrument was made or drawn on such date. Admittedly, the cheque is dated 27-2-2012, there is not even a suggestion by the complainant that a post-dated cheque was given to him in November 2011 bearing the date 27-2-2012. Giving of a cheque on 27-2-2012, which was deposited on 1-3-2012 is not compatible with the case of the complainant when we read the complaint submitted by the complainant especially para 1 of the complaint, which is extracted as below:
"1. The accused is a very good friend of the complainant. The accused requested the complainant a hand loan to meet out urgent and family necessary a sum of Rs 6,00,000 (Rupees Six lakhs) and on account of long standing friendship and knowing the difficulties, which is being faced by the accused the complainant agreed to lent hand loan to meet out the financial difficulties of the accused and accordingly the complainant lent hand loan Rs 6,00,000 (Rupees Six lakhs) dated 27-2-2012 in favour of the complainant stating that on its presentation it will be honoured. But to the surprise of the complainant on presentation of the same for collection through his bank the cheque was returned by the bank with an endorsement "Funds Insufficient" on 1-3-2012."
Para-29:- Thus, there is a contradiction in what was initially stated by the complainant in the complaint and in his examination-in-chief regarding date on which loan was given on one side and what was said in cross-examination in other side, which has not been satisfactorily explained. The High Court was unduly influenced by the fact that the accused did not reply to the notice denying the execution of cheque or legal liability. Even before the trial court, appellant-accused has not denied his signature on the cheque."
46. It has been held in the case of Tedhi Singh vs. Narayan Dass Mahant reported in (2022) 6 SCC 735 at paragraph nos.3 and 8 as follows:-
23"Para-3:- The learned counsel drew our attention to the judgment of this Court in Basalingappa versus Mudibasappa [Basalingappa vs. Mudibasappa, (2019) 5 SCC 418 : (2019) 2 SCC (Cri) 571] . This Court, inter alia, has held as follows :
(SCC pp. 432-33, para 25) "25. We having noticed the ratio laid down by this Court in the above cases on Sections 118(a) and 139, we now summarise the principles enumerated by this Court in the following manner:
25.1. Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.
25.2. The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
25.3. To rebut the presumption, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.
25.5. It is not necessary for the accused to come in the witness box to support his defence."
Para-8:- It is true that this is a case under Section 138 of the Negotiable Instruments Act. Section 139 of the NI Act provides that court shall presume 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. This presumption, however, is expressly made subject to the position being proved to the contrary. In other words, it is open to the accused to establish that there is no consideration received. It is in the context of this provision that the theory of "probable defence" has grown. In an earlier judgment, in fact, which has also been adverted to in Basalingappa [Basalingappa v. Mudibasappa, (2019) 5 SCC 418 : (2019) 2 SCC (Cri) 571] , this Court notes that Section 139 of the NI Act is an example of reverse onus (see Rangappa v. Sri Mohan [Rangappa v. Sri Mohan, 24 (2010) 11 SCC 441 : (2010) 4 SCC (Civ) 477 : (2011) 1 SCC (Cri) 184] ). It is also true that this Court has found that the accused is not expected to discharge an unduly high standard of proof. It is accordingly that the principle has developed that all which the accused needs to establish is a probable defence. As to whether a probable defence has been established is a matter to be decided on the facts of each case on the conspectus of evidence and circumstances that exist."
47. It is further evident that there is no witness to show that the complainant-petitioner had given Rs.20,00,000/- (Rs.Twenty Lakhs) or Rs.10,00,000/- to the O.P. No.2 either on 04.04.2013 or on 16.04.2013.
48. It further reveals that the complainant-petitioner had also not filed his Income Tax Return for Assessment Year 2012-13 and 2013-14 to show his capacity to pay the loan amount of Rs.20.00 Lakhs.
49. It has been held in the judgment rendered in the case of Sanjay Mishra Versus Kanishka Kapoor @ Nikki reported in 2009 (0) Cr. L. J. 3777 by the Bombay High Court, at para- 11, 12, 13 and 15 as follows:-
"Para-11:- The Apex Court also reiterated well established legal position that for rebutting the presumption under section 139 of the said Act, it is not necessary in every case for the accused to step into the witness box. The Apex Court held that the standard of proof on the part of the accused and that of prosecution in a criminal case is different. The prosecution has to prove the guilt of an accused beyond reasonable doubt, but the standard of proof so as to prove a defence is "preponderance of probability".
Inference of preponderance of probabilities can be drawn even by reference to circumstances. In paragraph 44 the Apex Court observed thus:
". The presumption of innocence is a human right (See Narendra Singh v. State of M.P., Ranjitsing Brahmajeetsing 25 Sharma v. State of Maharashtra and Rajesh Ranjan Yadav v. CBI.) Rights Article 6(2) of the European Convention on Human 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's 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. ..."
(Emphasis added) In paragraph 45 the Apex Court held thus:
"45.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."
(Emphasis added) The Apex Court held that presumption of innocence forms part of human rights and therefore the doctrine of reverse 26 burden introduced by section 139 has to be delicately balanced.
Para-12:- Now turning back to the facts of the present case, assuming that the presumption under section 139 of the said Act regarding existence of debt or liability is not rebutted, in order to attract section 138, the debt or liability has to be a "legally recoverable" debt or liability. As held by the Apex Court in the case of Krishna Bhat (supra) there is no presumption under section 139 of the said Act that the debt is a legally recoverable debt. In the case of Goa Plast (P) Ltd.Vs. Chico Ursula D'Souza [(2004) 2 Supreme Court Cases 235] the Apex Court reiterated that a debt or liability subject matter of section 138 means a legally enforceable debt or liability.
Para-13:- In the present case, there is a categorical admission that the amount allegedly advanced by the applicant was entirely a cash amount and that the amount was "unaccounted". He admitted not only that the same was not disclosed in the Income Tax Return at the relevant time but till recording of evidence in the year it was not disclosed in the Income Tax Return. By no stretch of imagination it can be stated that liability to repay unaccounted cash amount is a legally enforceable liability within the meaning of explanation to section 138 of the said Act. The alleged debt cannot be said to be a legally recoverable debt.
Para-15:- The Apex Court has held that the laws relating to the said Act are required to be interpreted in the light of the object intended to be achieved by it despite there being deviation from general law. The Apex Court expressed that the object of section 138 of the said Act was to ensure that commercial and mercantile activities are conducted in smooth and healthy manner. The explanation to section 138 of the said Act clearly provides that a debt or other liability referred to in section means a legally enforceable debt or other liability. The alleged liability to repay an unaccounted cash amount admittedly not disclosed in the Income Tax Return cannot be a legally recoverable liability. If such liability is held to be a legally recoverable debt, it will render the explanation to section 138 of the said Act nugatory. It will defeat the very object of section 138 of the Act of ensuring that the commercial and 27 mercantile activities are conducted in a healthy manner. The provision of section amount. A cheque 138 cannot be resorted to for recovery of an unaccounted issued in discharge of alleged liability of repaying "unaccounted" cash amount cannot be said to be a cheque issued in discharge of a legally enforceable debt or liability within the meaning of explanation of section 138 of the said Act. Such an effort to misuse the provision of section 138 of the said Act has to be discouraged."
50. It has been held in the case of Rajaram S/O Sriramulu Naidu (Since Deceased) through L.RS. Versus Maruthachalam (Since Deceased through L. RS. reported in 2023 LiveLaw (SC) 46 at para-20 as follows:-
"Para-20:- After analyzing all these pieces of evidence, the learned Trial Court found that the Income Tax Returns of the complainant did not disclose that he lent amount to the accused, and that the declared income was not sufficient to give loan of Rs.3 lakh. Therefore, the case of the complainant that he had given a loan to the accused from his agricultural income was found to be unbelievable by the learned Trial Court. The learned Trial Court found that it was highly doubtful as to whether the complainant had lent an amount of Rs.3 lakh to the accused. The learned Trial Court also found that the complaint had failed to produce the promissory note alleged to have been executed by the accused on 25th October 1998. After taking into consideration the defence witnesses and the attending circumstances, the learned Trial Court found that the defence was a possible defence and as such, the accused was entitled to benefit of doubt. The standard of proof for rebutting the presumption is that of preponderance of probabilities. Applying this principle, the learned Trial Court had found that the accused had rebutted the presumption on the basis of the evidence of the defence witnesses and attending circumstances."
51. Thus, it is evident that the complainant-petitioner ought to have placed his Income Tax Return also for the Assessment Year- 2012-13 and 2013-14.
2852. In view of the law laid down by the Hon‟ble Supreme Court and in view of the discussion made above, it is evident that the O.P. No.2-Vijay Singh has rebutted the presumption under Section 139 of the N.I. Act drawn against him and thus there is no merit in this Criminal Revision Application also.
53. In the result, it is evident that the complainant has failed to array the Managing Director or proprietor of the company as an accused in this case and it is also evident that the complainant has failed to prove that the cheque issued was the legal liability/enforceable liability and hence the learned Appellate Court has committed no illegality by allowing the Cr. Appeal No.63 of 2018 and hence this Criminal Revision Application is dismissed.
54. Accordingly, Cr. Revision No.1034 of 2018 stands dismissed.
(Sanjay Prasad, J.) Saket/-
AFR 29