Andhra HC (Pre-Telangana)
K.A. Prakash Rao vs Smt. U. Indira Devi And Ors. on 17 July, 2006
Equivalent citations: II(2007)BC366
Author: B. Seshasayana Reddy
Bench: B. Seshasayana Reddy
JUDGMENT B. Seshasayana Reddy, J.
1. This criminal appeal is directed against the common judgment dated 02.04.1998 passed in Criminal Appeal Nos. 15 of 1997 and 32 of 1997 on the file of the III Additional Metropolitan Sessions Judge, Hyderabad, whereby and whereunder the learned III Additional Metropolitan Sessions Judge allowed the appeals filed by A3 and A1, A2 and A4 setting aside the conviction and sentence for the offence under Section 138 of the Negotiable Instruments Act passed in C.C.No. 622 of 1993 on the file of the V Metropolitan Magistrate, Hyderabad.
2. The appellant herein is the complainant and whereas the respondents 1 to 4 are the accused in C.C.No. 622 of 1993.
3. The brief facts of the case leading to filing of the complaint by the appellant/complainant before the V Metropolitan Magistrate, Hyderabad, are:
The appellant and R1 to R3 are the partners in M/s Simhapuri Builders (R4). Some differences arose between them with regard to partnership business in the year 1992. According to the appellant/complainant, he retired from the partnership firm and thereupon, Al to A3 agreed to pay a sum of Rs. 3,75,000/-towards his share in the partnership firm and paid cash of Rs. 2 lakhs and issued cheques for Rs. 1,00,000/-, Rs. 50,000/- and Rs. 25,000/- dated 05.03.1993. Subsequently, an amount of Rs. 25,000/was paid to the appellant/complainant and upon which, the appellant/complainant returned the cheque for Rs. 25,000/-. He presented the cheque for Rs. 1,00,000/- on 5.3.1993. The cheque came to be returned for want of funds. On the request of the accused, the appellant/complainant presented the cheque once again on 20.08.1993. The cheque received the same fate. Consequently, he issued a legal notice dated 31.08.1993 calling upon the accused to make good the amount covered under the cheque in question. Since the accused failed to pay the amount, the appellant/complainant resorted to file complaint before the V Metropolitan Magistrate, Hyderabad. The learned Magistrate took the complaint on file as C.C. No. 622 of 93. On appearance of the accused and on examination under Section 251 Cr.P.C, the accused denied the accusation and pleaded not guilty. The appellant/complainant, to substantiate the accusation leveled against the accused; examined himself as P.W.1 and examined one M. Seshagiri Rao, a Field Officer in Bank of Baroda, as P.W.2 and marked 8 documents as exhibits P1 to P8. On behalf of the accused, Al was examined as D.W.I and two documents were marked as Ex.D1 and D2. The learned Magistrate formulated three points for consideration.
1. Whether the complainant retired from the Partnership Firm/Business, whether the cheque dated 5-3-1993 was issued in lieu of the part of the share amount said to be payable to the complainant by the accused?
2. Whether the cheque is barred by limitation by the date of its presentation in the Bank?
3. Whether the accused are liable for punishment under Section 138 of N.I. Act?
4. The learned Magistrate, on considering the evidence on record and on hearing the counsel for the parties, held all the points in favour of the appellant/complainant and accordingly, found all the accused guilty for the offence under Section 138 of the Negotiable Instruments Act and convicted them accordingly and sentenced them to suffer Rigorous Imprisonment for six months each and to pay a fine of Rs. 35,000/- by A1 and A4, and whereas Al and A3 to pay a fine of Rs. 35,000/- each, in default, to suffer Rigorous Imprisonment for three months each by judgment dated 30.12.1996. Assailing the judgment of conviction and sentence, A3 filed Criminal Appeal No. 15 of 1997 and whereas A1, A2 and A4 filed Criminal Appeal No. 32 of 1997 on the file of the III Additional Metropolitan Sessions Judge, Hyderabad. The learned III Additional Metropolitan Sessions Judge, on reappraisal of evidence, came to the conclusion that the appellant/complainant failed to prove the existing legally enforceable liability on the date of issuance of cheque in question and thereby allowed the appeals setting aside the conviction and sentence of the accused for the offence under Section 138 of the Negotiable Instruments Act and acquitting them accordingly by judgment dated 02.04.1998. Hence this criminal appeal by the complainant under Section 378(4) of the Code of Criminal Procedure, 1973.
5. Heard the learned Counsel for the parties.
6. Sri. M.N. Narasimha Reddy, learned Counsel appearing for the appellant/complainant submits that the lower appellate Court failed to note the presumptions under Section 138 of the Negotiable Instruments Act as well as Section 118 of the Evidence Act and thereby erred in recording a finding that the appellant/complainant failed to discharge the initial burden of the existence of legally enforceable liability.
7. The appellant/complainant came up with Criminal M.P.No. 1072 of 2006 under Section 391(1) of the Code of Criminal Procedure to receive the documents detailed hereunder as additional evidence and material as Ex.P9 and P. 10 respectively (1) 'Retirement Deed' dated 18.12.1992 and (2) 'deed of settlement' of even date.
8. It is contended by the learned Counsel appearing for the appellant/complainant that the two documents could not be produced before the trial Court as they were with a mediator namely V. Subrahmanyam. He refers para 3 of the affidavit filed in support of the petition which ready as under:
Notice of demand as contemplated under Section 138 of the Negotiable Instruments Act was issued and on failure to pay, the said amount he has filed two complaints in C.C. No. 269 of 1993 and C.C.No. 622 of 1993 in the Court of V Metropolitan Magistrate, Hyderabad. During the trial, he could not produce the retirement deed and deed of settlement as they were in the custody of the mediator for settlement Sri V. Subrahmanyam. When he approached the mediator for the return of the documents he insisted that he should get one of the remaining partners to give consent for the return of the documents. As the other partners being the accused in his complaint, he could not obtain their consent for the return of the documents. The trial was completed, with out the documents. The learned Magistrate convicted the accused and sentenced them to undergo imprisonment for 6 months and to pay a fine of Rs. 35,000/- each and in default to undergo imprisonment for a further period of 3 months.
9. As can be seen from the affidavit filed in support of the petition in Criminal M.P., the appellant/complainant took the plea that the two documents were in the custody of the mediator for settlement. The appellant/complainant was examined as a witness before the trial Court as P.W.I. It is nowhere stated by him on oath that the two documents were in the custody of mediator and therefore, he was not able to produce them before the trial Court. Such is the situation, he cannot be permitted to introduce the documents at the appellate stage and therefore, the application filed by him to receive the two documents referred above has no merit and accordingly, the same is hereby dismissed.
10. The learned Counsel appearing for the appellant/complainant vehemently contended that the lower appellate Court has not correctly understood the scope of Section 138 and 118 of the Negotiable Instruments Act and thereby erred in recording a finding whether the appellant/complainant has not discharged the initial burden of the existing legally enforceable liability. In support of his submissions, reliance has been placed on the decisions of the Supreme Court reported in K.N. Beena v. Muniyappan Hiten p. Dalal v. Bratindranath Banerjee Goaflast (P) Ltd v. Chico Ursula D'souza .
11. In the first cited decision, Che Supreme Court held that the accused has to prove in the trial, by leading cogent evidence that there is no debt or liability.
Para 6 of the judgment needs to be noted and it is thus:
In our view the impugned judgment cannot be sustained at all. The judgment erroneously proceeds on the basis that the burden of proving consideration for a dishonoured cheque is on the complainant. It appears that the learned Judge had lost sight of Sections 118 and 139 of the Negotiable Instruments Act. Under Section 118, unless the contrary was proved, it is to be presumed that the negotiable instrument (including a cheque) had been made or drawn for consideration. Under Section 139 the court has to presume, unless the contrary was proved, that the holder of the cheque received the cheque for discharge, in whole or in part, of a debt or liability. Thus in complaints under Section 138, the Court has to presume that the cheque had been issued for a debt or liability. This pit-sumption is rebut table. However the burden of proving that a cheque had not been issued for a debt, or liability is on the accused. This Court in the case of Hiten P. Dalal v. Bratindranath Banerjee has also taken an identical view.
12. In the second cited decision, the Supreme Court after referring to Section 139 of the Negotiable Instruments Act has observed as follows:
Because both Sections 138 and 139 require that the court "shall presume" the liability of the drawer of the cheques for the amounts for which the cheques are drawn, as noted in State of Madras v. A. Vaidyanatha Iyer it is obligatory on the court to raise this presumption in every case where the factual basis for the raising of the presumption had been established, " It introduces an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the accused." (Ibid, at P.65, para 14.) Such a presumption is a presumption of law, as distinguished from a presumption of fact which describes provisions by which the court" may presume" a certain state of affairs. Presumptions are rules of evidence and do not conflict with the presumption of innocence, because by the latter, all that is meant is that the prosecution of innocence, because by the latter, all that is meant is that the prosecution is obliged to prove the case against the accused beyond reasonable doubt. The obligation on the prosecution maybe discharged with the help of presumptions of law or fact unless the accused adduces evidence showing the reasonable possibility of the non-existence of the presumed fact.
In other words, provided the facts required to form the basis of a presumption of law exist, no discretion is left with the court but to draw the statutory conclusion, but this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary. A fact is said to be proved when, "after considering the matters before it, the court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists" (Section 3, Evidence Act) Therefore, the rebuttal does not: have to be conclusively established but such evidence must be adduced before the court in support of the defence that the court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of reasonability being that of the "prudent man".
13. In the third cited decision, the Supreme Court, after referring to Section 139 of the Negotiable Instruments Act, has observed that It has to be presumed that a cheque is issued in discharge of any debt or other liability. The presumption can be rebutted by adducing evidence and the burden of proof is on the person who wants to rebut the presumption. This presumption coupled with the object of Chapter XVII of the Act leads to the conclusion that by countermanding payment of post-dated cheque, a party should not be allowed to get away from the penal provision of Section 138 of the Act. A contrary view would render Section 138 a deed letter and will provide a handle to persons trying to avoid payment under legal obligations undertaken by them through their own acts which in other words can be said to be taking advantage of one's own wrong.
14. The appellant/complainant took a specific plea that he retired from the partnership firm and consequent on his retirement, the accused issued the cheque in question towards his share and on presentation of the same, it came to be dishonoured. Whereas as the accused took a specific plea that the appellant/complainant still continues to be a partner of A1 firm. Both the parties went on trial with their respective specific pleadings. The appellant/complainant while being examined as P.W.1 admits that he has not informed about the retirement from the partnership business to the Registrar of firms and public. For better appreciation I may refer the cross-examination of P.W.1, in his own words and it is thus:
I used to sit in the office and also look after ploting. I did not got mentioned in Ex.P4 the date when I informed to accused about bouncing of the cheque. I did not got mentioned the date of settlement deed in court. I have not informed about my retirement from the partnership business to the Registrar of firms and public. It is not true to say that the partnership firm including me as a partner is in existence even now. It is not true to say that A4, used to issue blank cheques and handover those cheques to me for the purpose of payment of wages to the workers in construction work and that taking advantage of said cheques in my possession I got foisted this case against the accused. It is not true to say that there was no settlement in owe any amount to me, and that this case is filed to harass the accused.
15. The first accused while being examined as D.W. 1 has specifically stated that the firm is still existing and there is no settlement as spoken by P.W.1 (appellant/complainant). The appellant/complainant having taken the plea of settlement of account at the time of his retirement from the partnership firm (A4) did not choose to adduce any evidence to substantiate it. When once the appellant/complainant failed to prove the factum of his retirement from the partnership from (A4), the only reasonable conclusion is that there was no existing liability as on the date of the issuance of Ex.PI cheque by A1. The lower appellate Court considered this aspect in right perspective and set aside the conviction of the respondents/accused for the offence under Section 138 of the Negotiable Instruments Act. I do not see any valid grounds to interfere with the judgment of acquittal of the lower appellate Court.
16. Accordingly, the appeal fails and is hereby dismissed.