Gujarat High Court
Dashrathbhai Trikambhai Patel vs Hitesh Mahendrabhai Patel on 12 January, 2022
Author: Sonia Gokani
Bench: Sonia Gokani
R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL APPEAL NO. 1488 of 2016
FOR APPROVAL AND SIGNATURE:
HONOURABLE MS. JUSTICE SONIA GOKANI
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1 Whether Reporters of Local Papers may be allowed YES
to see the judgment ?
2 To be referred to the Reporter or not ? YES
3 Whether their Lordships wish to see the fair copy NO
of the judgment ?
4 Whether this case involves a substantial question NO
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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DASHRATHBHAI TRIKAMBHAI PATEL
Versus
HITESH MAHENDRABHAI PATEL & 1 other(s)
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Appearance:
MAULIK H VAGHELA(7810) for the Appellant(s) No. 1
MR JS UNWALLA with MS NIRALI SARDA with MS TEJAL A VASHI(2704)
for the Opponent(s)/Respondent(s) No. 1
MS MAITHILI MEHTA, ADDL. PUBLIC PROSECUTOR(2) for the
Opponent(s)/Respondent(s) No. 2
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CORAM:HONOURABLE MS. JUSTICE SONIA GOKANI
Date : 12/01/2022
ORAL JUDGMENT
1. Appellant, who is before this Court, is the original complainant of Criminal Case No.4023 of 2014 before the Court of learned Chief Judicial Magistrate in CBI Court No.2, Page 1 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 Ahmedabad (Rural), whereby respondent no.1 was sought to be prosecuted for the offence punishable under Sections 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as "the N.I. Act" for short).
2. The appellant challenges the legality, validity and propriety of the judgment and order passed in the said Criminal Case dated 30.08.2016 by the trial Court, whereby the Court acquitted respondent no.1 accused for the offence punishable under Section 138 of the N.I.Act.
3. The facts in capsulized form are as follows:-
3.1. The respondent is the father-in-law of elder son of the complainant - appellant, who resided in the very village. They shared very good terms and enjoyed a cordial relationship.
The respondent is having business of a contractor and was in need of money. Hence, he contacted the complainant appellant. He requested to arrange for cash of Rs. 20 lakhs and as the complainant had cordial terms, the said amount was lent. The respondent promised the same to be repaid in six months' period. When demanded back, cheque of Rs. 20 lakhs was drawn from the State Bank of India having its branch at Prahaladnagar, Ahmedabad. This when deposited, was dishonoured and was returned to the appellant with an Page 2 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 endorsement "fund insufficient" on 02.04.2014.
3.2. A legal notice was issued on 11.04.2014 which was within the prescribed period of limitation. Upon the service of notice, a reply through the advocate has been given by the respondent. He agreed of having accepted this amount.
However, the same has not been paid. Therefore, the complaint came to be filed under Section 138 of the N.I.Act, and the same was registered as Criminal Case No.4023 of 2014.
3.3. The complainant and witnesses were examined and various documents had been exhibited. Eventually, the trial Court acquitted the respondent on the ground that the cheque was not given for a legally enforceable debt. Not only the complainant had made a transaction through the bank, he had also shown this amount in the Income Tax return and yet, the Court had not convicted the accused respondent for the non-payment. The liability also had been accepted by the respondent.
3.4. According to the appellant, liability for the remaining amount of debt would continue of the respondent and that has also not been considered by the Trial Court. The presumption, which has been made available under Section 139 of the Page 3 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 N.I.Act, has not been rebutted by the respondent accused.
Therefore also, presumption is available that there is a default in paying the bank the legally enforceable debt.
3.5. Affidavit-in-reply is filed by the respondent denying all allegations, averments and contentions raised in the affidavit.
According to this respondent, onus lies on the accused under Section 139 of the N.I.Act to discharge the burden by rebuttal is duly fulfilled.
3.6. In the reply, according to the respondents, since the respondent has proved of paying back the amount of Rs.4,09,315/- to the complainant which has not only been not denied by the complainant, but, in terms accepted, he has sufficiently rebutted the presumption.
4. During the pendency of this appeal, request had come from the respondent to permit the parties to adduce the evidence, more particularly, because the evidence with regard to lending of sum of Rs.40 lakhs was not emerging.
4.1. A specific mention of an application moved under Section 391 and 482 of the Code of Criminal Procedure is to be made seeking production of the additional evidence i.e. letter dated 19.05.2014 to correct the error committed in the Page 4 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 earlier letter dated 25.04.2014 due to typographical error, the amount stated to be due was Rs. 40 lakhs in the place of Rs.
20 lakhs. This Court on 11.10.2018 dealt with this issue by allowing the application.
4.2. This was resisted strongly urging that in the further statement of the accused he stated that he was indebted to the complainant to the tune of Rs. 40 lakhs and to cover up the said confession in further statement, power under Section 391 of the Code of Criminal Procedure cannot be exercised.
The case of the complainant is based upon the dishonour of cheque to the tune of Rs.20 lakhs in the year 2014. Earlier certain payments were made in the year 2013, which has nexus in respect of debt and liability. To wriggle out of the operation of Sections 59 and 60 of the Indian Contract Act, wrong and belated defence is raised and the power under Section 391 cannot be exercised to fill up the lacuna.
According to complainant, the procedure stipulated under Section 138 of the N.I. Act is mandatory. After confessing the legal debt and liability to the tune of Rs. 40 lakhs, it is not open to the respondent to cover up anything.
4.3. The Criminal Case No. 4023 of 2014 for a limited purpose was remanded back to the Trial Court concerned to Page 5 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 complete the process within a period of eight (8) weeks from the date of receipt of copy of the order. It was directed to send back the entire record to this Court to proceed with the main appeal.
5. The background of this matter, as mentioned, is that the appellant preferred a complaint being Criminal Case No. 4023 of 2014 before the Additional Chief Judicial Magistrate and CBI Court No. 2, Ahmedabad (Rural) on the ground of dishonour of a cheque bearing no. 877828 for an amount of Rs.20 lakh, drawn on State Bank of India on 17.03.2014 from the Account No. 63023186218 and the same when was presented for payment on 02.04.2014, it returned with an endorsement 'insufficient funds'. The demand notice was issued by the appellant and a reply was received from respondent on 25.04.2014. The respondent in his reply has referred to the amount of Rs. 40 lakhs. The matter proceeded and prosecution adduced the evidence and eventually the respondent, at the fag end, had made a request for replacing the reply dated 25.04.2014 given in response to the demand notice with a subsequent reply filed on 19.05.2014. Two documents namely the second reply dated 19.05.2014 and the R.P.A.D. Slip both though were taken on record, they were not exhibited.
Page 6 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 5.1. In the judgment delivered by the Trial Court, it considered the case of the complainant of lending Rs. 20 lakh and also considered the proof of return of more than Rs. 4 lakh by way of cheque by the respondent accused and on the ground that on the date of issuance i.e. on 17.03.2014, there did not exist legally, enforceable debt of Rs. 20 lakh, the Trial Court acquitted the respondent.
5.2. In this backdrop of facts, request was made for exhibit of subsequent reply as well as the R.P.A.D. Slip. This Court, by a detailed order, permitted the additional evidence to that effect be recorded so as to avail a proper opportunity to the parties in accordance with law.
5.3. Apt would be reproduce the relevant paragraphs in this regard: -
" 6. Having, thus, heard the learned Advocates on both the sides, this Court notices that from the beginning the case of the original complainant in the complaint lodged under Section 138 of the NI Act is of his having lent a sum of Rs.20/- lakh to the applicant-accused. It is also his demand in the demand notice, which is a mandatory requirement prior to filing of the complaint under Section 138 of the NI Act, that the amount of Rs.20/- lakh was lent to the applicant-accused, which has not been returned and when the cheque was given and the same was deposited, it was dishonored for want of sufficient funds. The demand notice was replied by the applicant on 25.04.2014, wherein, he has allegedly stated that the amount lent was Rs.40/-
Page 7 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 lakh.
6.1 It is required to make a mention, at this stage, that the complainant-opponent No.1 in his deposition has once again stated that the amount lent was Rs.20/- lakh. It is also necessary to refer to the cross- examination of the complainant, where, he has stated that the amount was lent in the year 2012. It is the categorical case of the applicant-accused that there is categorical return of the amount by him by way of cheque and the said sum of Rs.4.09/- lakh (rounded off) with contemporaneous documents has been held by the trial Court to have been proved. It is to be noted that the applicantaccused, though, specifically produced vide Exhibits-41 and 42, the application of tendering the second reply to the demand notice dated 19.05.2014 and the R.P.A.D. slip, the trial Court had chosen to merely record this application and has not given any exhibit number to the same. Surprisingly, it has mentioned in the Rojnama of the said documents having been accepted, however, no documents have been exhibited. The original record is also examined and this Court does not find any reference of having exhibited those documents produced vide application Exhibit-42. The trial Court simply record the said application and vide Exhibit- 43, the closure pursis of the applicant-accused is accepted, stating that he did not want to adduce any further evidence either in writing or orally.
6.2 As per the Rojnama dated 18.06.2014, the application, which has been tendered for producing the additional evidence being the documents, Mark 41/1 and Mark 41/2, has been allowed and respectively the second reply dated 19.05.2014 to demand notice and the R.P.A.D. slip thereof are taken on record. This in no manner would indicate that the trial Court had exhibited those documents. What the trial Court had allowed was an application for producing additional evidence. The Rojnama also does not indicate the documents Mark 41/1 and Mark 41/2 having been proved in any manner. It is also not the case of the applicant-respondent No.1, inasmuch as on the very day, soon thereafter, he has tendered his Closing Pursis.
Page 8 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 6.3 This additional reply, is the specific defence of the accused-applicant, wherein, an attempt is made to rebut the positive evidence of the transaction of paying of the amount to the accused-applicant. The trial Court has recorded the said aspect, while adjudicating the disputes between the parties and while appreciating the evidence, both oral as well as the documentary. This aspect is being highlighted by the complainant-opponent No.1 in the appeal.
6.4 In this backdrop of facts, a request being made to this Court to consider the adducement of the additional evidence, as provided under Section 391 and 465 of the Code, deserves consideration.
6.5 Apt it would be to reproduce, both the provisions Section 391 and 465 of the Code, which read thus:
"391. Appellate Court may take further evidence or direct it to be taken. (1) In dealing with any appeal under this Chapter, the Appellate Court, if it thinks additional evidence to be necessary, shall record its reasons and may either take such evidence itself, or direct it to be taken by a Magistrate, or when the Appellate Court is a High Court, by a Court of Session or a Magistrate. (2) When the additional evidence is taken by the Court of Session or the Magistrate, it or he shall certify such evidence to the Appellate Court, and such Court shall thereupon proceed to dispose of the appeal. (3) The accused or his pleader shall have the right to be present when the additional evidence is taken. (4) The taking of evidence under this section shall be subject to the provisions of Chapter XXIII, as if it were an inquiry."
6.6 This provision, thus, authorizes the Appellate Court to take additional evidence, while dealing with any appeal if it deems additional evidence to be necessary on recording the reasons, either it may record itself or direct the Court of Magistrate Sessions Court.
"465. Finding or sentence when reversible by reason of error, omission irregularity. (1) Subject to the provisions herein before contained, no finding, sentence or order passed by a Court of competent Page 9 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 jurisdiction shall be reversed or altered by a Court of appeal, confirmation or revision on account of any error, omission or irregularity in the complaint, summons, warrant, proclamation, order, judgment or other proceedings before or during trial or in any inquiry or other proceedings under this Code, or any error, or irregularity in any sanction for the prosecution, unless in the opinion of that Court, a failure of justice has in fact been occasioned thereby. (2) In determining whether any error, omission or irregularity in any proceeding under this Code, or any error, or irregularity in any sanction for the prosecution has occasioned a failure of justice, the Court shall have regard to the fact whether the objection could and should have been raised at an earlier stage in the proceedings."
6.7 In 'RAJESWAR PRASAD MISRA' (Supra), the Apex Court has held that the additional evidence may be necessary for a variety of reasons, but, the Courts should not permit what the Legislature has refrained from doing, namely, to control discretion of the appellate Court to certain stated circumstances. It, further, held that the order must not ordinarily be made if the prosecution has had a fair opportunity and has not availed of it unless the requirements of justice dictate otherwise.
6.8 It may be noted that the applicant accused, in this matter, is seeking additional evidence, though, had an opportunity, he had chosen not to avail the same nor got the documents at Mark 41/1 and Mark 41/2 exhibited. Therefore, the only question that is required to be considered by this Court as held in 'RAJESWAR PRASAD MISRA' (Supra) as to whether, the requirement of justice would dictate this to be allowed.
6.9 Yet, another decision relied upon is of 'STATE OF GUJARAT Vs. MOHANLAL JITAMALJI PORWAL AND ANOTHER' (Supra), the additional evidence was sought to be produced before the High Court to remove the technical or formal defect. While the report of the Mint Master that article seized was made of pure gold was already placed on record, additional evidence sought to prove the report, Page 10 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 where, the High Court had refused to adduced the additional evidence merely on the ground of lapse of six years and the Apex Court held and observed that the same was the error on the part of the High Court. The Apex Court, further, held that to deny the opportunity to remove the formal defect was to abort a case against an alleged economic offender. The mere fact that six years had elapsed, for which time- lag the prosecution was in no way responsible, was no good ground for refusing to act in order to promote the interests of justice in an age, where delays in the Court have become very common. The relevant observations read thus:
"5. The next question which arises is as regards the request made by the learned Assistant Public Prosecutor for adducing additional evidence in order to prove letter Ex. 26 received from the Mint Master certifying that the article in question was made of gold of the purity of 99.60. The request was made in order to invoke the powers of the Court under Section 391 of the Code of Criminal Procedure, 1973, which inter alia provides that in dealing with any appeal under Chapter XXIX the appeal Court. if it thinks additional evidence to be necessary, shall record its reasons and may either take such evidence itself or ask it to be taken by a Magistrate. The High Court rejected the prayer on the ground that it did not consider it "expedient in the interests of justice to open a new vista of evidence" in view of the fact that the offence had taken place six years back. The mere fact that six years had elapsed, for which time-lag the prosecution was in no way responsible, was no good ground for refusing to act in order to promote the interests of justice in an age when delays in the Court have become a part of life and the order of the day. Apart from the fact that the alleged lacuna was a technical lacuna in the sense that while the opinion of the Mint Master had admittedly been placed on record it had not been formally proved the report completely supported the case of the prosecution that the gold was of the specified purity. To deny the opportunity to remove the formal defect was to abort a case against an alleged economic offender. Ends of justice are not satisfied only when the accused in a criminal case is acquitted. The Community acting Page 11 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 through the State and the Public Prosecutor is also entitled to justice. The cause of the Community deserves equal treatment at the hands of the Court in the discharge of its judicial functions. The Community or the State is not a persona non-grata whose cause may be treated with disdain. The entire Community is aggrieved if the economic offenders who ruin the economy of the State are not brought to book. A murder may be committed in the heat of moment upon passions being aroused. An economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequence to the Community. A disregard for the interest of the Community can be manifested only at the cost of forfeiting the trust and faith of the Community in the system to administer justice in an even handed manner without fear of criticism from the quarters which view white collar crimes with a permissive eye unmindful of the damage done to the National Economy and National Interest. The High Court was therefore altogether unjustified in rejecting the application made by the learned Assistant Public Prosecutor invoking the powers of the Court under Section 391 of the Code of Criminal Procedure. We are of the opinion that the application should have, been granted in the facts and circumstances of the case with the end in view to do full and true justice. The application made by the learned Assistant Public Prosecutor is therefore granted. The High Court will issue appropriate directions for the recording of the evidence to prove the report of the Mint Master under Section 391, Cr. P.C. when the matter goes back to the High Court and is listed for directions. The appeal is therefore allowed. The order of acquittal is set aside. The matter is remitted to the High Court for proceeding further in accordance with law in the light of the above said directions."
6.10 In 'RATTIRAM AND OTHERS'(Supra), the Apex Court examined the legislative intent and content contained in the legislative intendment inhered in the language employed to hold and observed that it is graphically clear that lancination or invalidation of a verdict after trial is not to be taken recourse to solely because there is an error, omission or irregularity in Page 12 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 the proceeding. The term 'a failure of justice' has been treated as the sine qua non for setting aside the conviction. The Apex Court, further, held that 'fair trial' is the heart of criminal jurisprudence and, in a way, an important facet of a democratic polity that is governed by Rule of Law. Denial of 'fair trial' is crucifixion of human rights. It is ingrained in the concept of due process of law. While emphasizing the principle of 'fair trial' and the practice of the same in the course of trial, it is obligatory on the part of the Courts to see whether in an individual case or category of cases, because of non-compliance of a certain provision, reversion of judgment of conviction is inevitable or it is dependent on arriving at an indubitable conclusion that substantial injustice has in fact occurred. The Apex Court, further, held and observed as under:
"39. The question posed by us fundamentally relates to the noncompliance of such interdict. The crux of the matter is whether it is such a substantial interdict which impinges upon the fate of the trial beyond any redemption or, for that matter it is such an omission or it is such an act that defeats the basic conception of fair trial. Fundamentally, a fair and impartial trial has a sacrosanct purpose. It has a demonstrable object that the accused should not be prejudiced. A fair trial is required to be conducted in such a manner which would totally ostracise injustice, prejudice, dishonesty and favouritism.
40. In Mrs. Kalyani Baskar v. Mrs. M. S. Sampoornam19, it has been laid down that 'fair trial' includes fair and proper opportunities allowed by law to the accused to prove innocence and, therefore, adducing evidence in support of the defence is a valuable right and denial of that right means denial of fair trial. It is essential that rules of procedure designed to ensure justice should be scrupulously followed and the courts should be zealous in seeing that there is no breach of them.
41. In this regard, we may fruitfully reproduce the observations from Sidhartha Vashisht v. State (NCT of Delhi), wherein, it has been so stated:-Page 13 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022
R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 "In the Indian Criminal Jurisprudence, the accused is placed on a somewhat advantageous position than under different jurisprudence of some of the countries in the world. The criminal justice administration system in India places human rights and dignity for human life at a much higher pedestal. In our jurisprudence an accused is presumed to be innocent till proved guilty, the alleged accused is entitled to fairness and true investigation and fair trial and the prosecution is expected to play balanced role in the trial of a crime. The investigation should be judicious, fair, transparent and expeditious to ensure compliance to the basic rule of law. These are the fundamental canons of our criminal jurisprudence and they are quite in conformity with the constitutional mandate contained in Articles 20 and 21 of the Constitution of India."
6.11 The Apex Court also held that merely because there is any omission, error or irregularity in the matter of according sanction that does not affect the validity of the proceeding, unless the Court records the satisfaction that such error, omission or irregularity has resulted in failure of justice.
6.12 In the light of these decisions and also considering the over and above facts and circumstances in the instant case, as has been discussed herein above, this Court notices that the respondent-accused, of course, had an opportunity to get the said documents exhibited. He had also been given the liberty to do it, after the trial Court having permitted the application for additional evidence. However, merely on permitting of the said application by the trial Court, the applicant-accused chose not to get the same exhibited and instead tendered the closing pursis.
6.13 At this stage, when the request is being made for allowing to prove the second notice dated 19.05.2014, which also confirms the figure of the prosecution of having lent the amount of Rs.20/- lakh, not accepting the same on the ground that the same is an attempt to fill-up the lacunae would be an error on the part of the Court, for the reason that an attempt had already been made on the part of the Page 14 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 applicant-accused before the trial Court to get the same produced. It is different that at that stage, the learned Advocate, who appeared before the trial Court, could have been more vigilant, careful and ought to have ensured that the documents are duly exhibited. However, for the error of the lawyer, the party cannot suffer, which is a trite law. And therefore, this Court is of the opinion that the requirement of justice would demand, that an opportunity be availed to the applicant-accused that documents are proved in accordance with law and be accorded as additional evidence and as due opportunity also shall have to be given to the other side to cross-examine the person, who proves those documents and if necessary, to adduce further evidence in light of this evidence. Therefore, the request made for adducing additional evidence, by way of this application, is accepted.
6.14 Again, it is a consistent stand on the part of the appellant original complainant that the amount lent was of Rs.20/- (Twenty) lakh, whereas in rebuttal, the respondent-accused has spoken of Rs.40/- lakh initially, to correct the same to Rs.20/- lakh later and therefore also, when it is in consonance with the case of the prosecution, being adduced as an admission, there is no reason why the complainant should have objection to an attempt of setting the said stand proved through documentary evidences.
7. Resultantly, this application is ALLOWED. For this limited purpose, the matter being Criminal Case No. 4023 of 2014 is REMANDED back to the trial Court concerned, which shall complete this process within a period of EIGHT WEEKS from the date of receipt of a copy of this order and once such a procedure is over, it shall send back the entire record to this Court to proceed further with the main appeal.
7.1 In the event, if, the prosecution is desirous of any further evidence to be led in wake of the order of the Court concerned, they may be permitted to so do and if, any further time requires for the said purpose, the Court concerned shall ask for the extension of time. For the said purpose, the parties shall remain present before the Court concerned on 26TH NOVEMBER, Page 15 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 2018.
8. Office to send R&P back to the trial Court concerned, FORTHWITH. Rule is made absolute. Direct service is permitted."
6. This Court has heard extensively learned advocate Mr.Sushil Shukla assisted by learned advocate Mr. Maulik Vaghela for the appellant - complainant and learned Senior Advocate Mr. Unwalla assisted by learned advocate Ms. Nirali Sarda for the respondents, after the matter came back on recording evidence.
6.1. Learned advocate appearing for and on behalf of the appellant submits that four aspects will require thorough consideration which are as follows:
(i) Notice is invalid as payment sought is in excess of the amount, (ii) Part payment made has not been recognized, (iii) The respondent accused has rebutted presumption and, therefore, onus again lies on the complainant and, (iv) in acquittal appeal, the appellate power of the Courts when are to be exercised, the Court should not interfere just because with the very same set of evidence, it can come to the conclusion other than what has been arrived at.
6.2. As far as the first point of validity of the notice is Page 16 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 concerned, according to the respondent, it is animus notice under the provisions of the Negotiable Instruments Act, once it has proved that some amount of money had been paid and yet, the notice issued is for a different amount than what is due, payment sought since is in excess of the amount due, burden of accused is discharged. It is further emphasized that part payment has already been made by way of deposit of the cheque and, therefore, it is a reverse burden, according to the appellant which the respondent needs to discharge.
7. It appears that both the documents have been exhibited, however, the prosecution has chosen not to adduce any further evidence.
8. The two vital questions which arose in this matter are firstly needed to be addressed.
8.1. The first question is as to whether this is a case where the Appellate Court is required to exercise the discretion because of miscarriage of justice in case of acquittal, whether it enjoys full power of review evidence? And secondly, whether the notice issued is invalid in wake of the part payment made by the respondent as the payment sought is in excess of the amount due? The notice is termed as notice animus by the trial Court.
Page 17 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022
9. Following decisions, at the outset, are required to be taken into consideration: -
9.1. In case of Rajeshwar Prasad Misra vs. State of West Bengal and Another [(1966) 1 SCR 178], the appellant had been convicted under Section 408 of the Indian Penal Code and was sentenced in aggregate to suffer rigorous imprisonment for one year and to pay a fine of Rs. 2000/- (in default six months' further rigorous imprisonment). The Apex Court considered the powers of the High Court as an appellate Court to hold that it was at one time felt that the powers of the High Court were somewhat limited when dealing with an appeal against an order of acquittal, but, that was dispelled by the Judicial Committee in Sheo Swarup and Others vs. King Emperor. The Court held and observed thus: -
"5. It was at one time felt that the powers of the High Court were somewhat limited when dealing with an appeal against an order of acquittal but that was dispelled by the Judicial Committee in Sheo Swarup & others v. King Emperor(1) in a categoric pronouncement (later accepted by this Court in many cases) that "There is........ no foundation for the view apparently supported by the judgments of some Courts in India that the High Court has no power or jurisdiction to reverse an order of acquittal on a matter of fact except in cases in which the lower court has 'obstinately blundered' or has 'through incompetence, stupidity or perversity' reached such 'distorted conclusions as to produce a positive Page 18 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 miscarriage of justice', or has in some other way so conducted itself as to produce a glaring miscarriage of justice or has been tricked by the defence so as to produce a similar result. Sections 417, 418 and 423 of the Code give to the High Court full power to review at large the evidence upon which the order of acquittal was founded, and to reach the conclusion that upon that evidence the order of acquittal should be re- versed. No limitation should be placed upon that power unless it be found expressly stated in the Code. But in exercising the power conferred by the Code and before reaching its conclusions upon fact, the High Court should and will always give proper weight and consideration to such matters as (1) the views of the trial Judge as to the credibility of the witnesses; (2) the presumption of innocence in favour of the accused, a presumption certainly not weakened by the fact that he has been acquitted at his trial; (3) the right of the accused to the benefit of any doubt, and (4) the slowness of an appellate Court in disturbing a finding of fact arrived at by a Judge who had the advantage of seeing the witnesses."
6. The appellant relies upon certain observations of this Court in the case of Abinash Chandra Bose (2). The accused in that case was prosecuted under s. 409, Indian Penal Code for Misappropriating an amount belonging to his client who was the complainant. Prosecution was based upon a letter said to be written by him which he stated was a forgery. No expert was examined by the complainant and the accused was acquitted. The High Court set aside the acquittal and ordered a retrial. It was held by this Court that this was against "all well- established rules of criminal jurisprudence" that "an accused person should not be placed on trial for the same offence more than once, except in very exceptional circumstances". Holding that if the High Court did not think that "the appreciation of the evidence by the trial court was so thoroughly erroneous as to be wholly unacceptable," "it should not have put the accused to the botheration and expense of a second trial simply because the prosecution did not adduce all the, evidence that should and could have been brought before the Court of first instance" and which "it was nowhere Page 19 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 suggested had been refused to be received." Mr. Chakravarti contends that there is no essential difference between the taking of fresh evidence under s. 428 or the ordering of a retrial under s. 423, that this evidence was always available and had, in fact, been asked to be brought in at the trial but was not, and the prosecution should not have another chance whether by way of retrial or additional evidence. The other side contends that in Ukha Kolhe's case(1) the principles were restated exhaustively and that we should' guide ourselves by the statement of the law laid down there. In that case there was a conviction of the accused under s. 66(b) of the Bombay Prohibition Act. The report of the Chemical Examiner proved the existence of alcohol in the sample of blood but there were many points in the evidence of experts, which remained unexplained and their examination was perfunctory. On appeal the conviction was set aside and a retrial was ordered. This Court in dealing with the order of retrial observed in the majority judgment "An order for retrial of a criminal case is made in exceptional cases, and not unless the appellate Court is satisfied that the Court trying the proceeding had no jurisdiction to try it or that the trial was vitiated by serious illegalities or irregularities or on account of misconception of the nature of the proceedings and on that account in substance there had been no real trial or that the Prosecutor or an accused was, for reasons over which he had no control, prevented from leading or tendering evidence material to the charge, and in the interests of justice the appellate Court deems it appropriate having regard to the circumstances of the case, that the accused should be put on his trial again......."
It was pointed out that the Sessions Judge could have taken recourse to the power conferred by s. 428 and not ordered a retrial.
7. Section 428 occurs in Chapter XXXI which deals with appeals. It speaks of any appeal under that Chapter and the word 'any' means every one of the appeals (no matter which) men- tioned in the thirty- first Chapter of the Code. Section 417(3) is in that Page 20 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 Chapter and S. 428 clearly applied to the appeal which was in the High Court. It only remains to determine the limits (if any) of the jurisdiction and power of the appellate Court (here the High Court) in ordering additional evidence and whether the limits so determined were exceeded by the High Court in the present case.
8. Mr. Chakravarti contends that the discretion under s. 428 is subject to the same conditions as those in s. 423 and which were laid down in Abinash Chandra Bose's case(1). He lays special emphasis on the condition that the prosecution should not be given a second chance to fill up the gaps in its case. He submits that this has been done here. Mr. Sarjoo Prasad on the other hand explains the Abinash Chandra Bose's case with the aid of Ukha Kolhe's case(1) and submits that in the latter, this Court gave an exhaustive list of circumstances in which an order for retrial can be made and indicated that in cases falling outside those circumstances, the appellate Court has a discretion to order additional evidence, if considered necessary.
9. These arguments disclose a tendency to read the observations of this Court as statutory enactments. No doubt, the law declared by this Court binds Courts in India but it should always be remembered that this Court does not enact. The two cases of this Court point out that in criminal jurisdiction the guiding principle is that a person must not be vexed twice for the same offence. That principle is embodied in S. 403 of the Code and is now included as a Fundamental Right in Art. 20(2) of the Constitution. The protection, however, is only as long as the conviction or acquittal stands. But the Code contemplates that a retrial may be ordered after setting aside the conviction or acquittal (as the case may be) if the trial already held is found to be unsatisfactory or leads to a failure of justice. In the same way, the Code gives a power to the appellate Court to take additional evidence, which, for reasons to be recorded, it considers necessary. The Code thus gives power to the appellate Court to order one or the other as the circumstances may require leaving a wide discretion to it to deal appropriately with Page 21 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 different cases. The two cases of this Court deal with situations in which a retrial was considered necessary by the appellate Court. In the case of Abinash Chandra Bose, this Court held that the order for retrial was not justified. In Ukha Kolhe's case too the order for retrial was considered unnecessary because the end could have been achieved equally well by taking additional evidence. This Court mentioned, by way of illustration, some of the circumstances which frequently occur and in which retrial may properly be ordered. It is not to be imagined that the list there given was exhaustive or that this Court was making a clean cut between those cases where retrial rather than the taking of additional evidence was the proper course. It is easy to contemplate other circumstances where retrial may be necessary as for example where a conviction or an acquittal was obtained by fraud, or a trial for a wrong offence was held or abettors were tried as principal offenders and vice versa. Many other instances can be imagined. The Legislature has not chosen to indicate the limits of the power and this Court must not be understood to have laid them down. Cases may arise where either of the two courses may appear equally appropriate. Since a wide discretion is conferred on appellate Courts, the limits of that Court's jurisdiction must+ obviously be dictated by the exigency of the situation and fair play and good sense appear to be the only safe guides. There is, no doubt some analogy between the power to order a retrial ind the power to take additional evidence. The former is an extreme step approximately taken if additional evidence will not suffice. Both actions subsume failure of justice as a condition precedent. There the resemblance ends and it is hardly proper to construe one section with the aid of observations made by this Court in the interpretation of the other section.
10. Additional evidence may be necessary for a variety of reasons which it is hardly necessary (even if it was possible) to list here. We do not propose to do what the Legislature has refrained from doing, namely, to control discretion of the appellate Court to certain stated circumstances. It may, however, be 'said that additional evidence must be necessary not Page 22 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 because it would be im- possible to pronounce judgment but because there would be failure of justice without it. The power must be exercised sparingly Sup./165--13 and only in suitable cases. Once such action is justified, there is no restriction on the kind of evidence which may be received. It may be formal or substantial. It must, of course, not be received in such a way as to cause prejudice to the accused as for example it should not be received as a disguise for a retrial or to change the nature of the case against him. The order must not ordinarily be made if the prosecution has had a fair opportunity and has not availed of it unless the requirements of justice dictate otherwise. Commentaries upon the Code are full of cases in which the powers under S. 428 were exercised. We were cited a fair number at the hearing. Some of the decisions suffer from the sin of generalization and some others from that of arguing from analogy. The facts in the cited cases are so different that it would be futile to embark upon their examination. We might have ,attempted this, if we could see some useful purpose but we see none. We would be right in assuming the existence of a discretionary power in the High Court and all that we consider necessary is to see whether the discretion was properly exercised."
9.2. Thus, the Court is empowered to exercise appellate jurisdiction of reverting judgment and need not send the matter for retrial, by considering the evidence by proper weightage and consideration. In the instant case also, as an Appellate Court, this Court can consider these parameters and arrive at consideration other than what the Trial Court did. What is vital to be considered here is that in a prosecution under the NI Act, once the cheque is dishonoured, demand of notice within a stipulated time period Page 23 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 is must and at the time of trial, the statute has provided presumption under the law and concept of reverse burden. In case of M.S. Narayana Menon @ Mani vs. State of Kerala and Another [(2006) 6 SCC 39], the Court considering the issue of presumption under the NI Act held that the Court needs to presume the negotiable instrument for consideration unless existence of consideration is disproved. It has further held that unless, on consideration of matter before it, the Court either believes that the consideration does not exist or considers the non-existence of the consideration so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that the consideration does not exist. The Court held that the initial burden of proof is on the accused to rebut the said prosecutions by raising a probable defence. If he discharges the said burden, the onus thereafter shifts on the complainant to prove the same and whether the initial burden has been discharged by the accused is a question of fact. The burden of proof on the accused is not heavy. It need not disprove the prosecution's case in its entirety beyond reasonable doubt.
"39. A presumption is a legal or factual assumption drawn from the existence of certain facts.
40. In P. Ramanatha Aiyar's Advanced Law Lexicon, 3rd edition, at page 3697, the term 'presumption' has been defined as under:Page 24 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022
R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 "A presumption is an inference as to the existence of a fact not actually known arising from its connection with another which is known.
A presumption is a conclusion drawn from the proof of facts or circumstances and stands as establishing facts until overcome by contrary proof. A presumption is a probable consequence drawn from facts (either certain, or proved by direct testimony) as to the truth of a fact alleged but of which there is no direct proof. It follows, therefore that a presumption of any fact is an inference of that fact from others that are known". (per ABBOTT, C.J., R. v. Burdett, 4 B. & Ald,
161) The word 'Presumption' inherently imports an act of reasoning a conclusion of the judgment; and it is applied to denote such facts or moral phenomena, as from experience we known to be invariably, or commonly, connected with some other related facts.
(Wills on Circumstantial Evidence) A presumption is a probable inference which common sense draws from circumstances usually occurring in such cases. The slightest presumption is of the nature of probability, and there are almost infinite shades from slight probability to the highest moral certainty. A presumption, strictly speaking, results from a previously known and ascertained connection between the presumed fact and the fact from which the inference is made."
Having noticed the effect of presumption which was required to be raised in terms of Section 118(a) of the Act, we may also notice a decision of this Court in regard to 'presumption' under Section 139 thereof.
41. In Hiten P. Dalal v. Bratindranath Banerjee [(2001) 6 SCC 16], a 3- Judge Bench of this Court held that although by reason of Sections 138 and 139 of the Act, the presumption of law as distinguished from presumption of fact is drawn, the court has no other option but to draw the same in every case where the factual basis of raising the presumption is established. Pal, J. speaking for a 3-Judge Bench, however, opined:
Page 25 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 "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 is obliged to prove the case against the accused beyond reasonable doubt. The obligation on the prosecution may be 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". 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"."
42 The court, however, in the fact situation obtaining therein, was not required to go into the question as to whether an accused can discharge the onus placed on him even from the materials brought on records by the complainant himself. Evidently in law he is entitled to do so.
43. In Goaplast (P) Ltd. v. Chico Ursula D'Souza and Another [(2003) 3 SCC 232], upon which reliance was placed by the learned counsel, this Court held that the presumption arising under Section 139 of the Act can be rebutted by adducing evidence and the burden of proof is on the person who want to rebut the presumption. The question which arose for consideration therein was as to whether closure of accounts or stoppage of payment is sufficient defence to escape from the penal liability under Section 138 Page 26 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 of the Act. The answer to the question was rendered in the negative. Such a question does not arise in the instant case.
44. In Kundan Lal Rallaram v. Custodian, Evacuee Property, Bombay [AIR 1961 SC 1316], Subba Rao, J., as the learned Chief Justice then was, held that while considering the question as to whether burden of proof in terms of Section 118 had been discharged or not, relevant evidence cannot be permitted to be withheld. If a relevant evidence is withheld, the court may draw a presumption to the effect that if the same was produced might have gone unfavourable to the plaintiff. Such a presumption was itself held to be sufficient to rebut the presumption arising under Section 118 of the Act stating:
"Briefly stated, the burden of proof may be shifted by presumptions of law or fact, and presumptions of law or presumptions of fact may be rebutted not only by direct or circumstantial evidence but also by presumptions of law or fact. We are not concerned here with irrebuttable presumptions of law."
45. Two adverse inferences in the instant case are liable to be drawn against the Second Respondent:
(i) He deliberately has not produced his books of accounts.
(ii) He had not been maintaining the statutory books of accounts and other registers in terms of the bye-
laws of Cochin Stock Exchange.
Moreover, the onus on an accused is not as heavy as that of the prosecution. It may be compared with a defendant in a civil proceeding.
46. In Harbhajan Singh v. State of Punjab and another [AIR 1966 SC 97], this Court while considering the nature and scope of onus of proof which the accused was required to discharge in seeking the protection of exception 9 to Section 499 of the Indian Penal Code stated the law as under:
Page 27 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 "In other words, the onus on an accused person may well be compared to the onus on a party in civil proceedings, and just as in civil proceedings the court trying an issue makes its decision by adopting the test of probabilities, so must a Criminal Court hold that the plea made by the accused is proved if a preponderance of probability is established by the evidence led by him..."
47. In V.D. Jhingan v. State of Uttar Pradesh, [AIR 1966 SC 1762], it was stated:
"It is well-established that where the burden of an issue lies upon the accused, he is not required to discharge that burden by leading evidence to prove his case beyond a reasonable doubt"
48. In Kali Ram v. State of Himachal Pradesh [(1973) 2 SCC 808], Khanna, J., speaking for the 3- Judge Bench, held: "One of the cardinal principles which has always to be kept in view in our system of administration of justice for criminal cases is that a person arraigned as an accused is presumed to be innocent unless that presumption is rebutted by the prosecution by production of evidence as may show him to be guilty of the offence with which he is charged. The burden of proving the guilt of the accused is upon the prosecution and unless it relieves itself of that burden, the courts cannot record a finding of the guilt of the accused. There are certain cases in which statutory presumptions arise regarding the guilt of the accused, but the burden even in those cases is upon the prosecution to prove the existence of facts which have to be present before the presumption can be drawn. Once those facts are shown by the prosecution to exist, the Court can raise the statutory presumption and it would, in such an event, be for the accused to rebut the presumption. The onus even in such cases upon the accused is not as heavy as is normally upon the prosecution to prove the guilt of the accused. If some material is brought on the record consistent with the innocence of the accused which may reasonably be true, even though it is not positively proved to be true, the accused would be entitled to acquittal."
Page 28 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022
49. In The State through the Delhi Administration v. Sanjay Gandhi [AIR 1978 SC 961], it was stated:
"Indeed, proof of facts by preponderance of probabilities as in a civil case is not foreign to criminal jurisprudence because, in cases where the statute raises a presumption of guilt as, for example, the Prevention of Corruption Act, the accused is entitled to rebut that presumption by proving his defence by a balance of probabilities. He does not have to establish his case beyond a reasonable doubt. The same standard of proof as in a civil case applies to proof of incidental issues involved in a criminal trial like the cancellation of bail of an accused"
50. The evidences adduced by the parties before the trial court lead to one conclusion that the Appellant had been able to discharge his initial burden. The burden thereafter shifted to the Second Respondent to prove his case. He failed to do so."
9.3. In case of M/s. Kalamani Tex and Another vs. P. Balasubramanian [2021 (1) Supreme 720], it was a case of dishonour of cheque. The reversal of acquittal was made by the High Court. The Court held that the Trial Court completely overlooked the provisions and failed to appreciate statutory presumption drawn under Section 118 and Section 139 of the NI Act. The statute mandates that once signature of accused on cheque/ negotiable instrument is established, then this reverse onus clause becomes operative. In such a situation, obligation shifts upon the accused to discharge presumption imposed upon him. The second appellant once admits his signature on cheque and deed, the Trial Court Page 29 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 ought to have presumed that cheque was issued as consideration for a legally enforceable debt. The Apex Court held that the Trial Court fell in error when it called upon the complainant to explain the circumstances under which the appellants were liable to pay. Such approach of the Trial Court was directed in teeth of established legal position and amounted to a patent error of law. The defence raised by the appellants did not inspire confidence or meet standard of preponderance of probability. In absence of any other relevant material, the High Court did not err in discarding appellants' defence and upholding onus imposed upon them in terms of Section 118 and Section 139 of the NIA. It held that the provisions of NIA envision a single window for criminal liability for dishonour of cheque as well as civil liability for realization of cheque amount. There needs to be a consistent approach towards awarding of compensation and unless there exist special circumstances, Courts should uniformly levy fine up to twice cheque amount along with simple interest at the rate of 9% per annum. The respondent was held to be entitled to receive cheque amount of Rs. 11.20 lakhs which appellant has already deposited with the Registry.
"12. Having given our thoughtful consideration to the rival submissions, we do not find any valid ground to interfere with the impugned judgment. It is true that the High Court would not reverse an order of Page 30 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 acquittal merely on formation of an opinion different than that of the trial Court. It is also trite in law that the High Court ought to have compelling reasons to tinker with an order of acquittal and no such interference would be warranted when there were to be two possible conclusions.5 Nonetheless, there are numerous decisions of this Court, justifying the invocation of powers by the High Court under Seoctin 378 CrPC, if the trial Court had, inter alia, committed a patenterror of law or grave miscarriage of justice or it arrived at a perverse finding of fact.6
13. On a similar analogy, the powers of this Court under Article 136 of the Constitution also do not encompass the reappreciation of entirety of record merely on the premise that the High Court has convicted the appellants for the first time in exercise of its appellate jurisdiction. This Court in Ram Jag v. State of UP7, Rohtas v. State of Haryana8 and Raveen Kumar v. State of Himachal Pradesh 9, evolved its own limitations on the exercise of powers under Article 136 of the Constitution and has reiterated that while entertaining an appeal by way of special leave, there shall not ordinarily be an attempt to reappreciate the evidence on record unless the decision(s) under challenge are shown to have committed a manifest error of law or procedure or the conclusion reached is exfacie perverse.
14. Adverting to the case in hand, we find on a plain reading of its judgment that the trial Court completely overlooked the provisions and failed to appreciate the statutory presumption drawn under Section 118 and Section 139 of NIA. The Statute mandates that once the signature(s) of an accused on the cheque/negotiable instrument are established, then these 'reverse onus' clauses become operative. In such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him. This point of law has been crystalized by this Court in Rohitbhai Jivanlal Patel v. State of Gujarat10 in the following words:
"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 Page 31 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 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 appellantaccused....."
15. Once the 2nd Appellant had admitted his signatures on the cheque and the Deed, the trial Court ought to have presumed that the cheque was issued as consideration for a legally enforceable debt. The trial Court fell in error when it called upon the Complainant Respondent to explain the circumstances under which the appellants were liable to pay. Such approach of the trial Court was directly in the teeth of the established legal position as discussed above, and amounts to a patent error of law.
19. Considering the fact that there has been an admitted business relationship between the parties, we are of the opinion that the defence raised by the appellants does not inspire confidence or meet the standard of 'preponderance of probability'. In the absence of any other relevant material, it appears to us that the High Court did not err in discarding the appellants' defence and upholding the onus imposed upon them in terms of Section 118 and Section 139 of the NIA.
20. As regard to the claim of compensation raised on behalf of the respondent, we are conscious of the settled principles that the object of Chapter XVII of the NIA is not only punitive but also compensatory and restitutive. The provisions of NIA envision a single window for criminal liability for dishonour of cheque as well as civil liability for realisation of the cheque amount. It is also well settled that there needs to be a consistent approach towards awarding compensation and unless there exist special Page 32 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 circumstances, the Courts should uniformly levy fine up to twice the cheque amount along with simple interest at the rate of 9% per annum.13
21. The respondent, nevertheless, cannot take advantage of the above cited principles so as to seek compensation. The record indicates that neither did the respondent ask for compensation before the High Court nor has he chosen to challenge the High Court's judgment. Since, he has accepted the High Court's verdict, his claim for compensation stands impliedly overturned. The respondent, in any case, is entitled to receive the cheque amount of Rs.11.20 lakhs which the appellant has already deposited with the Registry of this Court. CONCLUSION:
22. For the reasons stated above, the present appeal is liable to be dismissed. We order accordingly. Ordinarily and as a necessary sequel thereto, Appellant No.2 would be liable to undergo the sentence of simple imprisonment as awarded by the High Court. However, given the peculiar facts and circumstances of the case, namely, that the appellants volunteered and thereafter have deposited the cheque amount with the Registry of this Court in the year 2018, we are inclined to take a lenient view. The impugned judgment of the High Court dated 09- 112017 is thus modified, and it is directed that Appellant No.2 shall not be required to undergo the awarded sentence.
The registry of this Court is directed to transfer the amount of Rs.11.20 lakhs along with interest accrued thereupon to the respondent within two weeks."
9.4. In case of Rohitbhai Jivanlal Patel vs. State of Gujarat and Another [2019 (0) Supreme (SC) 300], it was a case where an appeal was directed against the common judgment and order whereby the High Court had reversed the Page 33 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 judgment and order passed by the Additional Senior Civil Judge and Additional Chief Judicial Magistrate in seven criminal cases wherein one pertained to the offence under Section 138 of the Negotiable Instruments Act, 1881 for dishonour of 7 cheques in the sum of Rs. 3 lakhs each. The High Court had disproved the acquittal of the appellant while holding him guilty of offence under Section 138 of the NIA and awarded the punishment of simple imprisonment for a period of 1 year with fine to the extent of double the amount of cheque (i.e. a sum of Rs. 6 lakhs) with default stipulation of further imprisonment for a period of 1 year in each case and, out of the amount payable as fine, the complainant was ordered to be compensated to the tune of Rs. 5.5. lakhs in each case. The Apex Court found the defence raised by the accused not probable. The accused had states that the money was given as a hand loan by his friend. The notices were given prior to the filing of the complaint in relation to all the seven cheques, four of which had not been replied to. Either on account of insufficiency of the funds or because he has closed account that the cheques could not be realized. This cumulatively led the Court to conclude that the appellant succeeded in proving the legally enforceable debt and no probable defence for rebutting the statutory presumption was Page 34 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 raised by the respondent. It was argued before the Apex Court thus: -
"8. Assailing the judgment and order so passed by the High Court, learned counsel for the accused- appellant has contended that the impugned judgment is contrary to the principles laid down in the case of Arulvelu and Anr. v. State represented by Public Prosecutor & Anr.: (2009) 10 SCC 206, particularly when the High Court has set aside the considered judgment and orders of the Trial Court without pointing out any perversity therein. The learned counsel has argued, with reference to the decisions in M.S. Narayana Menon alias Mani v. State of Kerala and Anr: (2006) 6 SCC 39 and Kumar Exports v. Sharma Carpets: (2009) 2 SCC 519, that the High Court has failed to appreciate the settled principle of law that the accused is only required to show a probable defence to be acquitted of the charges under Section 138 of the NI Act. The learned counsel has referred to the reasons assigned by the Trial Court to acquit the accused-appellant and has submitted that contradictory statements have been made by the complainant and the witness; that no clear and cogent evidence has been brought on record to prove the source of funds for advancing any loan by the complainant; that admittedly, the complainant did not have the amount of Rs. 22,50,000/- and the same was arranged through his friends and relatives but he made vacillating statement in that regard and none of such relatives or friends was examined as witness; that the witness for the complainant had more knowledge about the transaction than the complainant; that the complainant appeared to have rather no knowledge regarding the payments, funds and the period of transaction; and that there was no explanation as to how the complainant was claiming Rs. 22,50,000/- as the debt, when the sum total of the instalments (cheques) comes to Rs. 21,00,000/- only. The learned counsel would also argue that complainant has heavily relied on the stamp paper dated 21.03.2007 but then, admittedly, the complainant had not signed on the said stamp paper; and this document, neither Page 35 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 notarised nor registered anywhere and only bearing the signatures of the appellant and of the said Shri Jagdishbhai, is not of any evidentiary value for the case of the complainant. According to the learned counsel, the accused-appellant has established his bonafide defence that he had a financial transaction with Shri Jagdishbhai in the past; that he gave 7 blank cheques to Shri Jagdishbhai and signed on a stamp paper as security against such transaction; and that such cheques and stamp paper were sought to be misused by the complainant. The learned counsel has contended that in the given circumstances, the judgment and orders of the Trial Court acquitting the accused-appellant of the offence under Section 138 of the NI Act deserve to be restored and the impugned judgment and order dated 08.01.2018 deserves to be set aside. The learned counsel would also submit in the alternative that in any case, the punishment as awarded in this case is much on the higher side and deserves to be reduced.
9. Per contra, the learned counsel for the complainant-respondent No. 2 has duly supported the impugned judgment and has submitted that the accused-appellant has only put forward a vague and unsure defence that has no basis or support and stands falsified from the material on record. The learned counsel has submitted that not only the presumption under Section 139 NI Act has not been dislodged, in fact, the case of the complainant is fortified in view of the unequivocal acknowledgement and undertaking stated by the accused-appellant on the stamp paper; and in the given circumstances, the High Court has rightly convicted him for the offence under Section 138 of the NI Act."
The Apex Court held thus: -
"10. Having given anxious consideration to the rival submissions and having examined the record, we are clearly of the view that as regards conviction of the accused-appellant for the offence under Section 138 Page 36 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 NI Act, the impugned judgment and order dated 08.01.2018 does not call for any interference but, on the facts and in the circumstances of this case, the punishment as awarded by the High Court deserves to be modified.
11. According to the learned counsel for the accused- appellant, the impugned judgment is contrary to the principles laid down by this Court in the case of Arulvelu (supra) because the High Court has set aside the judgment of the Trial Court without pointing out any perversity therein. The said case of Arulvelu (supra) related to offences under Sections 304-B and 498-A IPC. Therein, on the scope of the powers of Appellate Court in an appeal against acquittal, this Court observed as follows:
"36. Carefully scrutiny of all these judgments lead to the definite conclusion that the appellate court should be very slow in setting aside a judgment of acquittal particularly in a case where two views are possible. The trial court judgment cannot be set aside because the appellate court's view is more probable. The appellate court would not be justified in setting aside the trial court judgment unless it arrives at a clear finding on marshalling the entire evidence on record that the judgment of the trial court is either perverse or wholly unsustainable in law."
11.1 The principles aforesaid are not of much debate. In other words, ordinarily, the Appellate Court will not be upsetting the judgment of acquittal, if the view taken by Trial Court is one of the possible views of matter and unless the Appellate Court arrives at a clear finding that the judgment of the Trial Court is perverse, i.e., not supported by evidence on record or contrary to what is regarded as normal or reasonable; or is wholly unsustainable in law. Such general restrictions are essentially to remind the Appellate Court that an accused is presumed to be innocent unless proved guilty beyond reasonable doubt and a judgment of acquittal further strengthens such presumption in favour of the accused. However, such restrictions need to be visualised in the context of the particular matter before the Appellate Court and the nature of inquiry therein. The same rule with same rigour cannot be Page 37 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 applied in a matter relating to the offence under Section 138 of the NI Act, particularly where a presumption is drawn that the holder has received the cheque for the discharge, wholly or in part, of any debt or liability. Of course, the accused is entitled to bring on record the relevant material to rebut such presumption and to show that preponderance of probabilities are in favour of his defence but while examining if the accused has brought about a probable defence so as to rebut the presumption, the Appellate Court is certainly entitled to examine the evidence on record in order to find if preponderance indeed leans in favour of the accused.
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?
13. We may usefully take note of the provisions contained in Sections 118 and 139, being the special rules of evidence applicable to the case as follows:
4. The principal and charging part of Section 138 NI Act may also be extracted for ready reference as follows:
"138 Dishonour of cheque for insufficiency, etc., of funds in the account.
---- Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by Page 38 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other "118. Presumption as to negotiable instruments.----- Until the contrary is proved, the following presumptions shall be made:--
(a) of consideration-----that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;
(b) as to date---that every negotiable instrument bearing a date was made or drawn on such date;
(c) as to time of acceptance-----that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity;
(d) as to time of transfer----that every transfer of a negotiable instrument was made before its maturity;
(e) as to order of indorsements----that the indorsements appearing upon a negotiable instrument were made in the order in which they appear thereon;
(f) as to stamps--- that a lost promissory note, bill of exchange or cheque was duly stamped;
(g) that holder is a holder in due course----that the holder of a negotiable instrument is a holder in due course;
Provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence of fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him."
"139. Presumption in favour of holder ---- It shall be presumed, unless the contrary is proved, that the holder is a cheque received the cheque of the nature Page 39 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 referred to in section 138 for the discharge, in whole or in part, if any debt or other liability."
14. So far the question of existence of basic ingredients for drawing of presumption under Sections 118 and 139 the NI Act is concerned, apparent it provisions of this Act ,be punished with imprisonment for [a term which may be extended to two years], or with fine which may extend to twice the amount of the cheque, or with both:
*** *** ***"
is that the accused-appellant 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 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 accused-appellant to establish a probable defence so as to rebut such a presumption.
15. In Rangappa v. Sri Mohan : (2010) 11 SCC 441, 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 Page 40 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 observations in 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 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."Page 41 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022
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16. 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. This court stated the principles in the case of Kumar Exports (supra) as follows:
"20. The accused in a trial under Section 138 of the Act has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case the non- existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not insist in every case that the accused should disprove the non- existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non- existence was so probable that a prudent man would Page 42 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 under the circumstances of the case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on to the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arising under Sections 118 and 139.
21. The accused has also an option to prove the non- existence of consideration and debt or liability either by letting in evidence or in some clear and exceptional cases, from the case set out by the complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial. Once such rebuttal evidence is adduced and accepted by the court, having regard to all the circumstances of the case and the preponderance of probabilities, the evidential burden shifts back to the complainant and, therefore, the presumptions under Sections 118 and 139 of the Act will not again come to the complainant's rescue."
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 Page 43 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 relevant for consideration had been as to whether the accused-appellant has brought on record such facts/ material/circumstances 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.
18.1 We have examined the statement of Shri Jagdishbhai as also the said writing on stamp papers and are unable to find any substance in the suggestions made on behalf of the accused-appellant.
18.2 The said witness Shri Jagdishbhai, while pointing out his acquaintance and friendship with the appellant as also with the respondent, asserted in his examination-in-chief, inter alia, as under:
"Accused when he comes to our shop where the complainant in the matter Shashimohan also be present that in both the complainant and accused being our friends, were made acquaintance with each other. The accused had necessity of money in his business, in my presence, had demanded Rs.22,50,000/- (Rupees twenty two lacs fifty thousandly) on temporary basis. And thereafter, the complainant from his family members by taking in piecemeal had given to the accused in my presence.Page 44 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022
R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 Thereafter, on demanding the money by the complainant, the accused had given seven (7) cheques to the complainant in our presence but such cheques being washed out in rainy water and on informing me by the complainant I had informed to the accused. Thereafter, Rohitbhai had given other seven (7) cheques to the complainant in my presence and the deed was executed on Rs. 100/- stamp paper in there is my signature."
18.3 This witness was cross-examined on various aspects as regards the particulars in the writing on the stamp paper and the date and time of the transactions. In regard to the defence as put in the cross-examination, the witness stated as under:
"I have got shop in National Plaza but in rain no water logging has taken place. It is not true that there had been no financial dealings between me and the accused today. It is not true that I had given rupees ten lacs to the accused Rohitbhai on temporary basis. It is not true that for the amount given to the accused, I had taken seven blank duly cheques also blank stamp paper without signature. It is not true that there was quarrel between me and the accused in the matter of payment of interest. It is not true that even after the payment of Rs. ten lacs and the huge amount of the interest in the matter of interest quarrel was made. It is not true that due to the reason of quarrel with the accused, in the cheques of the accused lying with me by making obstinate writing has filed the false complaint through Shashimohan Goyanka. It is not true that no financial dealings have taken place between the complainant and the accused. therefore I also the complainant both at the time of evidence the accused at what place, on what date at what time, the amount taken has not been able to make clearly. (sic) It is not true that the blank stamp paper duly signed were lying in which obstinate writing has been made therefore the same has not been registered through sub registrar. It is not true that the dealings have been made between me and accused therefore there is my signature and the signature of the accused and the complainant has not signed. It is not true that any types of dealings between the accused and the Page 45 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 complainant having not been done in my presence therefore in my statement no clarification has been given. It is not true that the accused in my presence as mentioned in the complaint any cheque has not been given. It is not true that I in collusion with the complainant to usurp the false amount the false complaint has been filed through Shashimohan Goyanka. It is not true that in support of the complaint of Shashimohan Goyanka is giving false statement."
18.4 The statement of Shri Jagdishbhai does not make out any case in favour of the accused-appellant. It is difficult to say that by merely putting the suggestion about the alleged dealing to Shri Jagdishbhai, the accused- appellant has been able to discharge his burden of bringing on record such material which could tilt the preponderance of probabilities in his favour.
18.5 The acknowledgement on the stamp paper as executed by the appellant on 21.03.2007 had been marked with different exhibit numbers in these 7 cases. In Complaint Case No. 46499 of 2008, the same is marked as Ex. 54 and reads as under :
"Today the executor I Rohit Patel Ranchhodray Masala is a partner. Due to the financial difficulties having been arised, I have taken Rs.22,500,000/- (Rupees twenty two thousand fifty thousand only- sic) from my group which are to be paid to Shashimohan Goyanka.
With reference to that today I have given seven (7) cheques of Corporation Bank, Alkapuri Branch bearing No. 763346 to 762252 amounting to Rs. 22,50,000/- (Rupees twenty two lacs fifty thousand only) Dates : (1) 01/4/08, (2) 01/05/08 (3) 01/07/08, (4) 01/08/08 (5) 01/10/08 (6) 01/11/08 (7) 01/12/08 the account of which is 40007.
Earliest these cheques were given but due to rainy water logging the said cheques having been washed out (7) cheques have again been given which is acceptable to me."
Page 46 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 18.6 The fact of the matter remains that the appellant could not deny his signatures on the said writing but attempted to suggest that his signatures were available on the blank stamp paper with Shri Jagdishbhai. This suggestion is too remote and too uncertain to be accepted. No cogent reason is available for the appellant signing a blank stamp paper. It is also indisputable that the cheques as mentioned therein with all the relevant particulars like cheque numbers, name of Bank and account number are of the same cheques which form the subject matter of these complaint cases. The said document bears the date 21.03.2007 and the cheques were post- dated, starting from 01.04.2008 and ending at 01.12.2008. There appears absolutely no reason to discard this writing from consideration. 18.7 One of the factors highlighted on behalf of the appellant is that the said writing does not bear the signature of the complainant but and instead, it bears the signatures of said Shri Jagdishbhai. We find nothing unusual or objectionable if the said writing does not bear the signatures of the complainant. The said writing is not in the nature of any bi partite agreement to be signed by the parties thereto. It had been a writing in the nature of acknowledgement by the accused-appellant about existence of a debt; about his liability to repay the same to the complainant; about his having issued seven post- dated cheques; about the particulars of such cheques; and about the fact that the cheques given earlier had washed away in the rain water logging. Obviously, this writing, to be worth its evidentially value, had to bear the signatures of the accused, which it does. It is not unusual to have a witness to such a document so as to add to its authenticity; and, in the given status and relationship of the parties, Shri Jagdishbhai would have been the best witness for the purpose. His signatures on this document, therefore, occur as being the witness thereto. This document cannot be ruled out of consideration and existing this writing, the preponderance of probabilities lean heavily against the accused- appellant.
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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 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 8 th 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 Page 48 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 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.
20. On perusing the order of the Trial Court, it is noticed that the Trial Court proceeded to pass the order of acquittal on the mere ground of 'creation of doubt'. We are of the considered view that the Trial Court appears to have proceeded on a misplaced assumption that by mere denial or mere creation of doubt, the appellant had successfully rebutted the presumption as envisaged by Section 139 of the NI Act. In the scheme of the NI Act, mere creation of doubt is not sufficient.
21. 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 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."
9.5. In case of Sumeti Sumeti Vij vs. M/s. Paramount Tech Fab Industries [2021 (0) AIR(SC) 1281] there was a reversal of acquittal by the High Court. The appellant had only recorded her statement under Section 313 of the Cr.P.C.
Page 49 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 and has not adduced any evidence to rebut presumption that cheques were issued for consideration. The Apex Court held that once the facts came on record remained unrebutted and supported with the evidence on record with no substantive evidence of defence of the appellant to explain the incriminating circumstances appearing in the complaint against her, no error has been committed by the High Court in the impugned judgment, and the appellant has been rightly convicted for the offence punishable under Section 138 of the Act and needs no interference of this Court. The Court held that there is a mandate of presumption of consideration in terms of the provisions of the Act and the onus shifts to the accused on proof of issuance of cheque to rebut the presumption that the cheque was issued not for discharge of any debt or liability in terms of Section 138 of the NIA. It also held that proceedings under Section 138 are quasi-criminal in nature and the principles which apply to acquittal in other criminal cases are not applicable in the cases instituted under the Act. Likewise, under Section 139 of the Act, a presumption is raised that the holder of a cheque received the cheque for the discharge, in whole or in part, of any debt or other liability and to rebut such presumption, facts must be adduced by the accused which on a preponderance of probability, must then Page 50 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 be proved. Two separate legal notices were served by the complainant which were duly received by the appellant and even after receiving the notices, the appellant neither responded to notices nor made payment within the statutory period of 15 days. The Court also held that statement of accused recorded under Section 313 of the Code is not a substantive evidence of defence, but only an opportunity to the accused to explain incriminating circumstances appearing in prosecution case of accused. There is no evidence to rebut presumption that cheques were issued for consideration. The appeals were accordingly dismissed.
"12. In the instant case, the appellant has only recorded her statement under Section 313 of the Code, and has not adduced any evidence to rebut the presumption that the cheques were issued for consideration. Once the facts came on record remained unrebutted and supported with the evidence on record with no substantive evidence of defence of the appellant to explain the incriminating circumstances appearing in the complaint against her, no error has been committed by the High Court in the impugned judgment, and the appellant has been rightly convicted for the offence punishable under Section 138 of the Act and needs no interference of this Court.
14. There is a mandate of presumption of consideration in terms of the provisions of the Act and the onus shifts to the accused on proof of issuance of cheque to rebut the presumption that the cheque was issued not for discharge of any debt or liability in terms of Section 138 of the Act, which reads as under: "138. Dishonour of cheque for Page 51 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 insufficiency, etc., of funds in the account.--Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for 8 [a term which may be extended to two years'], or with fine which may extend to twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall apply unless --
(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice; in writing, to the drawer of the cheque, [within thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
Explanation.--For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability."
16. It is well settled that the proceedings under Section 138 of the Act are quasicriminal in nature, and the principles which apply to acquittal in other Page 52 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 criminal cases are not applicable in the cases instituted under the Act.
17. Likewise, under Section 139 of the Act, a presumption is raised that the holder of a cheque received the cheque for the discharge, in whole or in part, of any debt or other liability. To rebut this presumption, facts must be adduced by the accused which on a preponderance of probability (not beyond reasonable doubt as in the case of criminal offences), must then be proved. In Rohitbhai Jivanlal Patel vs. State of Gujarat and Another,this Court has examined the scope of Sections 138 and 139 of the Act, which reads as under: "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 signatures 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 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.
.......
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 nonexistence was so probable that a prudent man would, under the circumstances of the case, act upon the plea that the consideration Page 53 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 did not exist. This Court has, time and again, emphasised 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 Sections 118 and 139 of the NI Act. This Court stated the principles in Kumar Exports [Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513] 4 (2019) 18 SCC 106 "20. The accused in a trial under Section 138 of the Act has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case the nonexistence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not insist in every case that the accused should disprove the non existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their nonexistence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the Page 54 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 circumstances so relied upon are compelling, the burden may likewise shift again on to the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arising under Sections 118 and 139 of the Act.
21. The accused has also an option to prove the non- existence of consideration and debt or liability either by letting in evidence or in some clear and exceptional cases, from the case set out by the complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial. Once such rebuttal evidence is adduced and accepted by the court, having regard to all the circumstances of the case and the preponderance of probabilities, the evidential burden shifts back to the complainant and, therefore, the presumptions under Sections 118 and 139 of the Act will not again come to the complainant's rescue."
It was further considered by this Court in Uttam Ram vs. Devinder Singh Hudan and Another5.
19. Thereafter, two separate legal notices were served by the complainant which were duly received by the appellant and even after receiving the said notices, the appellant neither responded to the notices nor made any payment within the statutory period of fifteen days and only thereafter, two separate complaints were filed by the complainant under Section 138 of the Act against the appellant- accused.
21. That apart, when the complainant exhibited all these documents in support of his complaints and recorded the statement of three witnesses in support thereof, the appellant has recorded her statement under Section 313 of the Code, but failed to record evidence to disprove or rebut the presumption in support of her defence available under Section 139 of Page 55 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 the Act.The statement of the accused recorded under Section 313 of the Code is not a substantive evidence of defence, but only an opportunity to the accused to explain the incriminating circumstances appearing in the prosecution case of the accused. Therefore, there is no evidence to rebut the presumption that the cheques were issued for consideration.
24. In the given circumstances, the High Court, in our view, has not committed any error in recording the finding of guilt of the appellant and convicting her for an offence being committed under Section 138 of the Act under its impugned judgment, which in our considered view, needs no further interference. Consequently, the appeals are without any substance, and are accordingly dismissed."
9.6. This Court in case of Shree Corporation vs. Anilbhai Puranbhai Bansal [2018(2)GLH 105], considered the question that arose as to what the expression "amount of money" means in a case where the admitted liability of the drawer of the cheque gets reduced, on account of the part payment made by him, after issuing but before the presentation of cheque in question. The Court held thus: -
"22. The following are the components of the offence punishable under Section 138 of Negotiable Instrument Act:-
(1) drawing of the cheque by a person on an account maintained by him with a banker, for payment to another person from out of that account for discharge in whole/part any debt or liability, (2) presentation of the cheque by the payee or the holder in due course to the bank, (3) returning the cheque unpaid by the drawee bank for want of sufficient funds to the credit of the Page 56 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 drawer or any arrangement with the banker to pay the sum covered by the cheque, (4) giving notice in writing to the drawer of the cheque within 15 days of the receipt of information by the payee from the bank regarding the return of the cheque as unpaid demanding payment of the cheque amount, (5) failure of the drawer to make payment to the payee or the holder in due course of the cheque, of the amount covered by the cheque within 15 days of the receipt of the notice.
23. The question which comes up for consideration is as to what the expression "amount of money means in a case ‟ where the admitted liability of the drawer of the cheque gets reduced, on account of the part payment made by him, after issuing but before the presentation of cheque in question. No doubt, the expression "amount of money would mean the ‟ amount of the cheque alone in case the amount payable by the drawer, on the date of presentation of the cheque, is more than the amount of the cheque. But, can it be said the expression "amount of money would always mean the ‟ amount of the cheque, even if the actual liability of the drawer" all case laws yet to be typed of the cheque has got reduced on account of some payment made by him towards the discharge of the debt or liability in consideration of which the cheque in question was issued. If it is held that the expression "amount of money would ‟ necessarily mean the amount of cheque in every case, the drawer of the cheque would be required to make arrangement for more than the admitted amount payable by him to the payee of the cheque. In case he is not able to make arrangement for the whole of the amount of the cheque, he would be guilty of the offence punishable under Section 138 of Negotiable Instruments Act. Obviously this could not have been the intention of the legislature to make a person liable to punishment even if he has made arrangements necessary for payment of the amount which is actually payable by him. If the drawer of the cheque is made to pay more than the amount actually payable by him, the inevitable result would be that he Page 57 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 will have to chase the payee of the cheque to recover the excess amount paid by him. Therefore, I find it difficult to take the view that even if the admitted liability of the drawer of the cheque has got reduced, on account of certain payments made after issue of the cheque, the payee would nevertheless be entitled to present the cheque for the whole of the amount, to the banker of the drawer, for encashment and in case such a cheque is dishonoured for want of funds, he will be guilty of offence punishable under Section 138 of Negotiable Instrument Act.
24. In taking the aforesaid view, I am conscious of the implications. The drawer of a cheque may make payment of a part of the amount of the cheque only with a view to circumvent and get out of his liability under Section 138 of Negotiable Instrument Act. But, this can easily be avoided by payee of the cheque, either by taking the cheque of the reduced amount from the drawer or by making an endorsement on the cheque acknowledging the part payment received by him and then presenting the cheque for encashment of only the balance amount due and payable to him. In fact, Section 56 of Negotiable Instrument Act specifically provides for an endorsement on a Negotiable Instrument, in case of part-payment and the instrument can thereafter be negotiated for the balance amount. It would, therefore, be open to the payee of the cheque to present the cheque for payment of only that much amount which is due to him after giving credit for the part-payment made after issuance of cheque. The view being taken by me was also taken by a Division Bench of Kerala High Court in Joseph Sartho vs. Gopinathan Nair, 2009 (2) Crimes 463 (Kerala). I shall discuss the Kerala High Court decision in Joseph (supra) a little later. As noted by the Supreme Court in Rahul Builders vs. Arihant Fertilizers & Chemicals And Another, (2008) 2 SCC 321, that the Negotiable Instruments Act envisages application of the penal provisions which needs to be construed strictly. Therefore, even if two views in the matter are possible, the Court should lean in favour of the view which is beneficial to the accused. This is more so, when such a view will also advance the legislative intent, behind enactment of Page 58 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 this criminal liability.
25. I am conscious of the fact that out of the total liability of Rs. 1,08,43,766/- the liability only to the extent Rs.12,40,000/- came to be discharged. The amount of Rs.96,03,766/- still remained due and payable by the writ applicants to the complainant. However, I am of the view that the quantum of the amount would not be a relevant factor in the case at hand. To put it in other words, whether a substantial amount was paid or a meager amount was paid. A notice of demand which requires the drawer of the cheque to make payment of the whole of the cheque amount, despite receiving some amount against that very cheque, much before issue of notice, cannot be said to be a legal and valid notice envisaged in Section 138(b) of Negotiable Instrument Act. The expression "amount of money used in ‟ Section 138(b) of Negotiable Instrument Act, to my mind, in a case of this nature would mean the amount actually payable by the drawer of the cheque to the payee of the cheque. Of course, if the payee of the cheque makes some demands on account of interest, compensation, incidental expenses etc, that would not invalidate the notice so long as the principal amount demanded by the payee of the cheque is correct and is clearly identified in the notice. When the principal amount claimed in the notice of demand is more than the principal amount actually payable to the payee of the cheque and the notice also does not indicate the basis for demanding the excess amount, such a notice cannot be said to be a legal and valid notice envisaged in Section 138(b) of Negotiable Instrument Act. In such a case, it is not open to the complainant to take the plea that the drawer of the cheque could have escaped the liability by paying the actual amount due from him to the payee of the cheque. In order to make the notice legal and valid, it must necessarily specify the principal amount payable to the payee of the cheque and the principal amount demanded from the drawer of the cheque should not be more than the actual amount payable by him though addition of some other demands in the notice by itself would not render such a notice illegal or invalid. (see M/s. Alliance Infrastructure vs. Vinay Mittal, Cri. M.C. No.2224 of 2009, decided on 18th Page 59 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 January, 2018).
The Court referred to the decision of the Apex Court in case of M/s. Moser Baer Photo Voltaic Ltd. vs. M/s. Photon Energy Systems Ltd. & Ors.[Criminal Appeal No.235 of 2016, disposed of on 18th March, 2016], where also, the similar question had arisen, however, the parties amicably settled the dispute.
Reference was made to certain decisions of the Apex Court to point out the object of the notice under Section 138(B) of the NI Act is to give a chance to the drawer of the cheque to rectify his omission and also to protect the honest drawer.
"36. In Central Bank of India & Another vs. Saxons Farms & Others 1999(8) SCC 221, the Supreme Court observed that the object of the notice under Section 138(b) of Negotiable Instrument Act is to give a chance to the drawer of the cheque to rectify his omission and also to protect the honest drawer. If the drawer of the cheque is asked to pay more than the principal amount due from him and that amount is demanded as the principal sum payable by him, it is not possible for an honest drawer of the cheque to meet such a requirement.
37. In Suman Sethi vs. Ajay K. Churiwala, 2000 (2) SCC 380, the Supreme Court held that where the notice also contains a claim by way of cost, interest etc. and gives breakup of the claim of the cheque amount, interest, damages etc., which are separately specified, the claim for interest, cost etc. would be superfluous and these additional claims being severable would not invalidate the notice. It was Page 60 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 further held that if an ominous demand is made in a notice as to what was due against a dishonoured cheque, the notice might fail to meet the legal requirement and may be regarded as bad."
Reference was made of the decision of In K.R.Indira vs. Dr.G.Adinarayana [2003 (3) JCC(NI) 273] where the cheque amounts were different from the alleged loan and the demand made was not of the cheque amount but was of the loan amount. It was held that the complainant was required to make demand for the amount recovered by the cheque which was conspicuously absent in the notice and, therefore, the notice was imperfect.
Referring to some of the other judgments, the Court then quashed the complaints initiated against the writ applicants. The Court held that if the Magistrates finds the demand in the notice to be absolutely ominous, then the order of process should not be issued. If the legal notice as envisaged under the provisions of the NI Act is found to be not in accordance with law, then the complaint should fail. The service of a valid legal notice in a case under section 138 of the N.I. Act, is mandatory. Service of a valid notice is trite and imperative in character for maintaining a complaint.
9.7. This Court in case of Arvind Maneklal Tailor vs. State Page 61 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 of Gujarat and Another [2000 (3) G.L.H. 442], was considering the case of the dishonour of cheque after issuance of cheque but before the due date, there was a change in the obligations between the parties whereby extent and quantum of debt was subsequently altered. On due date the debt was of a lesser amount than the amount of cheque which was dishonoured. The Court held that the said cheque did not represent either the entire debt or the part of the debt on due date.
"2. The principles laid down by the Supreme Court as regards the proper approach and perspective in relation to appeals against acquittals are by now well settled and do not require a detailed discussion. Suffice it to say that the appellate courts are under an obligation not to allow such appeals lightly or on a casual basis, unless the findings recorded on the basis of the evidence on record are grossly unjust, patently unsustainable or based on no evidence at all. On the facts of the present case I find that such is not the case.
8. Now coming to the crux of the matter and the factual controversy involved in the present appeal, the impugned judgement of acquittal is based upon the acceptance on the part of the trial court of the defence put up by the accused to the effect that the dishonoured cheque was not in respect of "discharge, in whole or in part, of any debt or other liability"
within the meaning of section 138 of the said Act. The trial court, after discussing all the facts and factual materials on record, came to the conclusion that the cheque issued for Rs.2 lacs did not represent either the whole of the debt or other liability of the drawer towards the drawee, nor did it represent part of such debt or liability.
8.1. No doubt, the trial court has in its judgement Page 62 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 (delivered in Gujarati) has very often used the phrase to the effect that the cheque does not represent the "legal dues" of the drawer to the drawee. However, there cannot be any controversy that the entire factual evidence is based upon not the issue as to whether there is any debt or not, but on the defence of the accused that after the issuance of the cheque, but before due date, there was a change of circumstances and change in the obligations between the parties whereby the extent of the debt and the quantum thereof was substantially altered, and that on the due date the debt if any of the drawer to the drawee was of a far smaller figure. Obviously it was neither the function of the criminal court nor necessary to decide the legal issue as to what was the precise extent of the debt. If the evidence in rebuttal which is found acceptable by the court justifies a conclusion that the cheque which was dishonoured, did not represent either the entire debt or part of the debt on the due date, section 138 would not furnish a cause of action for the criminal prosecution and/or conviction. It is in the context of this limited controversy that the evidence in rebuttal led by the accused has been examined and found to be acceptable by the court.
9. So far as the facts of the case are concerned and so far as the appreciation of evidence is concerned, I see no reason to take another view of the matter, so far as the findings of fact are concerned. Suffice it to say that the finding of fact based on the evidence on record is to the effect that when the cheque was issued, the same represented an amount due and payable to the drawee in respect of the outstanding consideration in respect of the shops sold by the drawee to the drawer. However, subsequently, after the issuance of the cheque, but before the due date, the parties readjusted their mutual obligations as evidenced by Exh.24, etc., and the drawer of the cheque made payments in respect of the then outstanding amount in respect of the shops purchased by him by instalments as also interest, which payment has been accepted by the drawee. The evidence on record discloses that the cheque was originally issued on the understanding that the drawer as a purchaser of the shops would be able to Page 63 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 obtain bank loans, on the basis of supporting documents to be provided by the complainant; however, since the complainant did not or could not provide the necessary documents, the bank loan although sanctioned, was not disbursed, and therefore the accused was unable to get the amount and therefore could not redeem the cheque from the drawee before the due date. It was for this reason that the drawer of the cheque followed the alternate arrangements and instead of making the lumpsum payment from the loan amount expected, made payments towards his debt in smaller sums by way of the instalments and also paid interest. This finding is based on a concrete documentary evidence in the form of an agreement between the parties at Exh.24 which contemplates that if the bank loan is not sanctioned, the purchaser (the drawer of the cheque) would make payments by monthly instalments. There is no dispute that the bank loan, although sanctioned in principle, was not disbursed, and this was because the relevant documents were not or could not be provided by the complainant. It was for this reason that the accused made payments by instalments as contemplated by Exh.24. It is also not in controversy that payments by instalments together with interest has been accepted by the complainant, impliedly as of right under Exh.24, and without protest.
10. It requires to be noted that as a result of these readjustments between the parties, the accused made monthly payments by instalments by cheques. It is stated that two of such cheques were honoured and subsequent cheques were dishonoured. Specifically in respect of these dishonoured cheques further complaints under section 138 have been filed. Furthermore, the complainant has also filed a civil suit against the accused in respect of these civil transactions between the parties.
11. The sum and substance of the findings of fact recorded by the trial court are found in paragraph 22 of the impugned judgement. It only requires to be clarified that when the trial court uses the phrase "legal dues" in the context of the cheque in question, it only meant, and it could only mean that the amount of the cheque did not represent "in whole or in part Page 64 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 of any debt or other liability" of the drawer to the drawee.
12. In my opinion, the judgement and order of acquittal is eminently justified not only on the facts of the case, but in view of the interpretation of section 138 of the Negotiable Instruments Act as expressed by me hereinabove. This view expressed by me gets support from a decision of the Andhra Pradesh High Court in the case of Voruganti Chinna Gopaiah Vs. M/ s Godavari Fertilizers & Chemicals Ltd., reported in 1999 Criminal Law Journal, page 1184, wherein the facts of the case are almost identical."
9.8. In case of Rahul Builders vs. Arihant Fertilizers and Chemicals [(2008) 2 SCC 321], according to the respondent, a penal provision should be construed strictly, the condition precedent wherefor is service of notice. It is one thing to say that the demand may not only represent the unpaid amount under cheque but also other incidental expenses like costs and interests, but the same would not mean that the notice would be vague and capable of two interpretations. An omnibus notice without specifying as to what was the amount due under the dishonoured cheque would not subserve the requirement of law.
"10. Service of a notice, it is trite, is imperative in character for maintaining a complaint. It creates a legal fiction. Operation of Section 138 of the Act is limited by the proviso. When the proviso applies, the main Section would not. Unless a notice is served in conformity with Proviso (b) appended to Section 138 of the Act, the complaint petition would not be maintainable. The Parliament while enacting the said provision consciously imposed certain conditions.
Page 65 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 One of the conditions was service of a notice making demand of the payment of the amount of cheque as is evident from the use of the phraseology "payment of the said amount of money". Such a notice has to be issued within a period of 30 days from the date of receipt of information from the bank in regard to the return of the cheque as unpaid. The statute envisages application of the penal provisions. A penal provision should be construed strictly; the condition precedent wherefor is service of notice. It is one thing to say that the demand may not only represent the unpaid amount under cheque but also other incidental expenses like costs and interests, but the same would not mean that the notice would be vague and capable of two interpretations. An omnibus notice without specifying as to what was the amount due under the dishonoured cheque would not subserve the requirement of law. Respondent No. 1 was not called upon to pay the amount which was payable under the cheque issued by it. The amount which it was called upon to pay was the outstanding amounts of bills, i.e., Rs. 8,72,409/-. The noticee was to respond to the said demand. Pursuant thereto, it was to offer the entire sum of Rs. 8,72,409/-. No demand was made upon it to pay the said sum of Rs. 1,00,000/- which was tendered to the complainant by cheque dated 30.04.2000. What was, therefore, demanded was the entire sum and not a part of it.
11. Mr. Jain relied upon a decision of this Court in Suman Sethi v. Ajay K. Churiwal and Another [(2000) 2 SCC 380] wherein it was stated:
"8. It is a well-settled principle of law that the notice has to be read as a whole. In the notice, demand has to be made for the "said amount" i.e. the cheque amount. If no such demand is made the notice no doubt would fall short of its legal requirement. Where in addition to the "said amount" there is also a claim by way of interest, cost etc. whether the notice is bad would depend on the language of the notice. If in a notice while giving the break-up of the claim the cheque amount, interest, damages et c. are separately specified, other such claims for interest, cost etc. would be superfluous and these additional claims would be severable and will not invalidate the Page 66 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 notice. If, however, in the notice an omnibus demand is made without specifying what was due under the dishonoured cheque, the notice might well fail to meet the legal requirement and may be regarded as bad.
9. This Court had occasion to deal with Section 138 of the Act in Central Bank of India v. Saxons Farms 3 and held that the object of the notice is to give a chance to the drawer of the cheque to rectify his omission. Though in the notice demand for compensation, interest, cost etc. is also made the drawer will be absolved from his liability under Section 138 if he makes the payment of the amount covered by the cheque of which he was aware within 15 days from the date of receipt of the notice or before the complaint is filed."
[Underlining is ours for emphasis] As therein, some other sums were indicated in addition to the amount of cheque, it was, therefore, not held to be a case where the dispute might be existing in respect of the entire outstanding amount.
12. On this aspect of the matter, we may consider K.R. Indira v. Dr. G. Adinarayana [(2003) 8 SCC 300] wherein this Court upon noticing Suman Sethi (supra) stated the law, thus:
"...However, according to the respondent, the notice in question is not separable in that way and that there was no specific demand made for payment of the amount covered by the cheque. We have perused the contents of the notice.
Significantly, not only the cheque amounts were different from the alleged loan amounts but the demand was made not of the cheque amounts but only the loan amount as though it is a demand for the loan amount and not the demand for payment of the cheque amount, nor could it be said that it was a demand for payment of the cheque amount and in addition thereto made further demands as well. What is necessary is making of a demand for the amount covered by the bounced cheque which is Page 67 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 conspicuously absent in the notice issued in this case. The notice in question is imperfect in this case not because it had any further or additional claims as well but it did not specifically contain any demand for the payment of the cheque amount, the non- compliance with such a demand only being the incriminating circumstance which exposes the drawer for being proceeded against under Section 138 of the Act"
13. As in the instant case, no demand was made for payment of the cheque amount, we are of the opinion that the impugned judgment cannot be faulted."
9.9. In case of M/s. Alliance Infrastructure Project Pvt.
Ltd. and Others vs. Vinay Mittal [ILR (2010) III Delhi 459], it has been held that if an ominous demand is made in a notice as to what was due against a dishonoured cheque, the notice might fail to meet the legal requirement and may be regarded as bad. The principle would follow where the principal sum demanded in the notice is more than the actual amount payable to the payee of the cheque as principal sum.
"12. In respect of the cheque, subject matter of Crl.M.C.2225/2009, the amount of the cheque was Rs.31,91,650/- and the respondent, after giving credit for the amount of Rs.10,50,000/- paid to him on 20.10.2008 demanded only a sum of Rs.21,41,650/- vide notice dated 23.1.2009. Therefore, as far as the notice of demand issued in this case is concerned, it was legal and valid as the amount demanded was the actual amount payable by the petitioner to the respondent. But, in respect of the cheque, subject matter of Crl.M.C.2224/2009, the amount demanded in the notice of demand dated 19.12.2008 was Rs.49,47,600/-, though admittedly the amount due to Page 68 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 the respondent at that time was only Rs.32,97,600/-, after giving credit of Rs.10,50,000/- received by him by RTGS on 7.10.2008. Thus, the respondent called upon the petitioner to pay much more than the amount actually due and payable by it. In order to comply with the demand made in the notice, the petitioner would have been required to pay the whole of the amount of Rs.49,47,600/- to the complainant/respondent. A perusal of the notice would show that the complainant did not at all refer to the payment of Rs.16,50,000/- received through RTGS, while issuing the notice of demand dated 19.12.2008. This is not as if the complainant/respondent acknowledged the payment of Rs.16,50,000/- and despite that asked the petitioner to make payment of the whole of the amount of the cheque. The complainant/respondent did not even refer to the substantial payment which he had received by way of RTGS. To ask the drawer of the cheque to make payment of Rs.49,47,600/- despite having earlier received a sum of Rs.16,50,000/- against that very cheque is nothing but a dishonest conduct. Had the petitioner complied with the demands made in this notice, it would have been compelled to later on chase the complainant for recovery of the excess amount paid by it and had the complainant not paid the excess amount received by him, the petitioner would also have been compelled to initiate legal proceedings against him. Therefore, a notice of demand which requires the drawer of the cheque to make payment of the whole of the cheque amount, despite receiving a substantial amount against that very cheque, much before issue of notice, cannot be said to be a legal and valid notice envisaged in Section 138(b) of Negotiable Instrument Act. The expression „amount of money‟ used in Section 138(b) of Negotiable Instrument Act, to my mind, in a case of this nature would mean the amount actually payable by the drawer of the cheque to the payee of the cheque. Of course, if the payee of the cheque makes some demands on account of interest, compensation, incidental expenses etc, that would not invalidate the notice so long as the principal amount demanded by the payee of the cheque is correct and is clearly identified in the notice. When the principal amount claimed in the notice of demand Page 69 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 is more than the principal amount actually payable to the payee of the cheque and the notice also does not indicate the basis for demanding the excess amount, such a notice cannot be said to be a legal and valid notice envisaged in Section 138(b) of Negotiable Instrument Act. In such a case, it is not open to the complainant to take the plea that the drawer of the cheque could have escaped liability by paying the actual amount due from him to the payee of the cheque. In order to make the notice legal and valid, it must necessarily specify the principal amount payable to the payee of the cheque and the principal amount demanded from the drawer of the cheque should not be more than the actual amount payable by him though addition of some other demands in the notice by itself would not render such a notice illegal or invalid.
13. In Central Bank of India & Another vs. Saxons Farms & Others 1999(8) SCC 221, the Hon‟ble Supreme Court observed that the object of the notice under Section 138(b) of Negotiable Instrument Act is to give a chance to the drawer of the cheque to rectify his omission and also to protect the honest drawer. If the drawer of the cheque is asked to pay more than the principal amount due from him and that amount is demanded as the principal sum payable by him, it is not possible for an honest drawer of the cheque to meet such a requirement.
14. In Suman Sethi vs. Ajay K. Churiwala, 2000 (2) SCC 380, the Hon‟ble Supreme Court held that where the notice also contains a claim by way of cost, interest etc. and gives breakup of the claim of the cheque amount, interest, damages etc., which are separately specified, the claim for interest, cost etc. would be superfluous and these additional claims being severable would not invalidate the notice. It was further held that if an ominous demand is made in a notice as to what was due against a dishonoured cheque, the notice might fail to meet the legal requirement and may be regarded as bad. The same consequence, in my view, would follow where the principal sum demanded in the notice is more than Page 70 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 the actual amount payable to the payee of the cheque as principal sum. In the present case, while demanding Rs.49,47,600/- vide notice dated 19.12.2008, the complainant did not even indicate that the actual amount due to him was only Rs.32,97,600/- and he called upon the complainant to pay the whole of the amount of the cheque without even trying to justify the demand made by him.
15. In K.R.Indira vs. Dr.G.Adinarayana, 2003 (3) JCC(NI) 273, a consolidated notice was sent in respect of four cheques. Two of which were issued to him in the name of the husband and the two were in the name of the wife. It was noted by the Hon‟ble Supreme Court that the cheque amounts were different from the alleged loan and the demand made was not of the cheque amount but was of the loan amount. It was held that the complainant was required to make demand for the amount recovered by the cheque which was conspicuously absent in the notice and, therefore, the notice was imperfect. The same would be the legal effect when a part-payment against a cheque is made, after its issue. The amount covered by the cheque would necessarily mean the principal amount due to the payee after giving credit for the par-payment received by him and, therefore, if the notice does not specifically demand that particular amount, it would not be a valid notice and would not fasten criminal liability on account of its non-compliance.
16. In Rahul Builders (supra), the outstanding amount due to the appellant from respondent No.1 was Rs.8,72,409/. Respondent No.1 issued a cheque of Rs.1 lakh in favour of the appellant, which, on presentation was dishonoured. A notice was thereafter sent by the appellant to respondent No.1 informing him about dishonour of the cheque and asking him to remit the amount of Rs.8,72,409/-. It was noted that the amount which respondent No.1 was called upon to pay was the outstanding amount of the bills, i.e. Rs.8,72,409/- and the noticee was to respond that demand by offering the entire sum of Rs.8,72,409/-. It was further noted that there was no Page 71 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 demand to pay the sum of Rs.1 lakh which was the amount of the cheque and what was demanded was the entire sum of Rs.8,72,409/- and not a part of it. In these circumstances, it was held that there was no demand for payment of the cheque amount. The decision of the High Court holding that the notice was invalid, was upheld by the Hon‟ble Supreme Court.
17. For the reasons given in the preceding paragraphs, I hold that the complaint, subject matter of Crl.M.C.No.2225/2009 is liable to be quashed because the complainant presented the cheque for encashment of the whole amount of Rs.49,47,600/- though the amount due to him on the date of the presentation of the cheque was Rs.32,9600/- and he also demanded the whole of the amount of Rs.49,47,600/- as principal sum without even indicating the principal amount due to him under the cheque was Rs.32,97,600/- and without even referring to the part- payment of Rs.16,50,000/- which he had received by RTGS on 7.10.2008. The criminal complaint, subject matter of Crl.M.C.2224/2009 is liable to be quashed as the complainant presented the cheque for encashment of whole of its amount of Rs.31,91,650/- though he had already received a sum of Rs.10,50,000/- before presentation of the cheque and the principal amount due to him on the date of presentation of the cheque was only Rs.21,41,650/-."
9.10. On the aspect of proof of debt, the decision in case of Kumar Exports vs. Sharma Carpets [(2009) 2 SCC 513] is heavily relied upon to urge that the accused in a trial under Section 138 has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case, non-existence of consideration and debt is so probable that a prudent man Page 72 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 ought to suppose that no consideration debt existed and secondly the accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him.
"17. Even otherwise, a bare perusal of legal notice of demand Ex.CW-1/4 shows that even the legal notice has been served upon the accused on the instructions of M/s Veterans Infrastructure Pvt. Ltd., and not on the instructions of M/s Veterans Infrastructures Strategiserz Pvt. Ltd., i.e. the payee of the cheque. Once the notice has not been served by the payee/holder in due course of the cheque, in my considered opinion, the accused was not obliged to comply with the same and hence, for non-compliance of the demand raised by way of an invalid notice, accused cannot be prosecuted for the offence u/s 138 of NI Act. It is significant to note in this regard that though an error in the complaint can be rectified by the complainant by way of an amendment, the error in the name of the person raising the demand by M/s. Veterans Infrastructure Pvt. Ltd. v. M/s Enable Technologies Pvt. Ltd. Judgment dated 22.03.2018 way of legal notice cannot even be rectified by the complainant by way of an amendment. Thus, in the absence of service of any valid legal notice of demand by the payee/holder in due course of the cheque upon the accused, no offence u/s 138 of NI Act is made out against the accused and the accused are entitled to acquittal on this ground alone.
18. In view of my aforesaid finding, discussion on merits of the case has become academic, however, since both the parties have advanced arguments on merits of the case and since the judgment passed by this court is amenable to appeal before the superior courts, it is imperative for this Court to give its finding on all the issues sought to be raised by the parties.Page 73 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022
R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022
19. It is significant to note that at no stage of the trial, the accused had denied the issuance of cheque in question by him in favour of complainant. (For the sake of convenience any reference to the complainant henceforth shall be considered to be the reference to M/s Veterans Infrastructures Strategiserz Pvt. Ltd.). In view of admission by him of issuance of cheque in question in favour of complainant, there arises a two fold presumption in favour of complainant that the cheque in question was issued by the accused for consideration and in discharge of his legally enforceable liability towards the complainant M/s. Veterans Infrastructure Pvt. Ltd. v. M/s Enable Technologies Pvt. Ltd. Judgment dated 22.03.2018 and that there exists a legally enforceable liability of the accused towards the complainant to the extent of the cheque amount in terms of Section 118 and 139 of NI Act. No doubt the aforesaid presumptions are rebuttable in nature and the same could have been rebutted by the accused not only by way of cross examination of CW- 1 while relying upon the material brought on record by the complainant but also by raising presumptions of fact and law on the basis of facts admitted/proved on record. Whether or not the accused have been able to rebut the aforesaid presumption is a question of fact which shall be decided on the basis of material available on record.
19. The basic defence of the accused is that there was no liability of the accused towards the complainant much less any legally enforceable liability in view of the fact that no work under the MOU Ex.CW-1/1A and agreement Ex.CW-1/1 had ever been done by the complainant. According to him, the cheque in question was given by him to the complainant as security and the same has been misused by the complainant without doing any work. In order to probablize the aforesaid defence counsel for accused has relied upon clause 3 of the MOU which records that the payment was to be made after mutual acceptance as to success achieved in the work and clause 7 of the agreement which required the work to be done by the complainant by M/s.Page 74 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022
R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 Veterans Infrastructure Pvt. Ltd. v. M/s Enable Technologies Pvt. Ltd. Judgment dated 22.03.2018 31.05.2012 read with clause 4 of the MOU and clause 9 of the agreement which talks about the advance payment of Rs.15 lacs by the accused to the complainant and submits that since no advance payment was made by the accused to the complainant, complainant had not even started the work much less there had been any acceptance on the part of accused regarding the success achieved by the complainant in performance of work under the MOU/agreement giving rise to the liability of accused towards the complainant.
20. On the other hand, counsel for complainant has relied upon the opening part of the agreement which says that the agreement was in pursuance to the MOU dated 01.03.2009 and clause 5 of the agreement, which refers to the alleged practice since beginning whereby the complainant had been performing the consultancy and other works as per para 4 of the agreement in co-ordination with executives deputed by the accused and acknowledges the verbal reporting of the development by the complainant on weekly basis. Counsel for complainant has further relied upon clause 10 of the agreement which records full satisfaction of accused with the work in progress and those already executed by the complainant. On the basis of the aforesaid clauses, it is submitted by counsel for complainant that the defence sought to be raised by accused regarding non-start of M/s. Veterans Infrastructure Pvt. Ltd. v. M/s Enable Technologies Pvt. Ltd. Judgment dated 22.03.2018 any work by the complainant under the MOU/Agreement stands disproved.
21. I have heard the submissions and carefully gone through the entire material available on record including the MOU Ex. CW-1/1A and agreement Ex. CW-1/1. No doubt, accused could not have been expected to prove the non-performance of work by the complainant under the MOU and Agreement by leading any direct evidence, however, considering Page 75 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 the nature of work to be performed by the complainant in terms of MOU and Agreement and various terms and conditions of the same, it was not even possible for the complainant to lead any direct evidence of performance of work. It is significant to note that neither the MOU nor the agreement contemplates placing of any work order by the accused and raising of any invoice by the accused. The agreement does not even contemplate reporting of work performed by the complainant in writing nor does it contemplate feedback by the accused in writing. In my considered opinion, whether or not any work had been performed by the complainant for the accused in terms of the agreement can be ascertained only from the wholesome and meaningful reading of two documents Ex. CW-1/1 and Ex. CW- 1/1A in the light of conduct of the parties."
It is to be noted that this decision has already been referred to in case of Rohitbhai Jivanlal Patel (supra) by the Apex Court.
10. Reverting to the facts of the instant case, it is the case of the complainant that the accused is the in-laws of his elder son who shared the good relations with the family. He was having business as a contractor and was in need of money.
The appellant - original complainant arranged for the cash of Rs.20 lakhs which he promised to return in six months' period and when he did not return the same, the demand was made.
He gave a cheque of Rs.20 lakhs drawn on the State Bank of India having the branch at Prahladnagar, Ahmedabad. It was deposited in the bank and endorsement of insufficient balance Page 76 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 was sent on 02.04.2014. The notice was given on 11.04.2014 and the reply was sent on 25.04.2014 by the respondent. As is quite apparent from the judgment of the Trial Court, it had noted from the deposition of the complainant that the total transaction was of Rs. 40 lakhs between the parties and the oral agreement was that the accused needed to pay Rs. 1 lakh by way of cheque and Rs. 80,000/- cash every three months and once the entire amount is repaid, both the cheques which were given towards the security, were needed to be returned.
10.1. In the further statement, the accused had desired the correction in the notice which had been issued on 10.04.2014 where it wanted the amount to be corrected to Rs. 20 lakhs instead of Rs. 40 lakhs. It was a case of the respondent that there had been a misuse of the cheque on the part of the appellant since he needed the money. It is also his defence that there was a dispute between her son and the daughter-in-
law and the respondent accused is the brother-in-law of his son. It is also to be noted that in a cross-examination, the complainant had admitted that, in all, the amount of Rs.
4,09,315/- had been deposited in his account no.
10397293635 by way of cheques of different dates which is as follows: -
Page 77 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 Date Amount 18.04.2012 Rs. 49,315/-
05.10.2012 Rs. 1,20,000/-
15.01.2013 Rs. 60,000/-
10.07.2013 Rs. 1,20,000/-
30.12.2013 Rs. 60,000/-
Total Rs. 4,09,315/-
10.2. The complainant also agreed that his son Kinjal had filed a divorce petition to take divorce from the sister of the respondent accused. Compromise had been arrived at and the daugher-in-law returned with the son. Once again, in March, 2014 his son had preferred the divorce petition. It is thus admitted by the appellant that the amount of Rs.4,09,315/-
had already been received from the accused and yet he had deposited the cheque which has been lying with him by way of security. On noticing the fact that no reference of this amount had been received, the Trial Court concluded that the appellant failed to establish the amount of money which was due from all the cheques and the drawer failed to make the payment of the said amount of money to the payee or the holder in due course of the cheque.
10.3. As the essential ingredient of Section 138 are of the drawing of the cheque by a person on an account maintained by him with a banker for payment of any amount of money to Page 78 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 another person from out of that account for the discharge, in whole or in part, of any debt or other liability, on presentation of the cheque by the payee or the holder in due course, the return of the cheque unpaid by the drawee of the bank for want of insufficient fund obligates issuance of a written notice to the drawer of the cheque within 15 days. Failure of the drawer to make the payment to the payee would amount to his not having fulfilled the liability of the drawer of the cheque as to the amount of the money and as in the matter on hand, the part payment had already been made, the Trial Court rightly held that the part payment made by the respondent ought to have been reflected in the notice issued by the appellant.
After the issuance of cheque in favour of the drawee or the payee, the amount of money is construed to be the amount of cheque alone. In case of the amount payable by the drawer on the date of presentation of the cheque would always mean the actual liability which exists on the date of the cheque.
11. In the instant case, as the amount of cheque is higher than the amount which actually was due to the appellant, the Court has chosen to hold that the statutory notice issued for demand of return of cheque was not a valid notice and an omnibus notice for not having recognized the payment made.
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12. This Court also will need to take into consideration that in Criminal Case No. 4023 of 2014 which is for another cheque being no. 256966, the respondent has been held guilty under Section 138 of the NI Act whereas in the instant case, it is only on the ground of making of the part payment and absence of any endorsement of such part payment on the cheque, the Court has acquitted the person.
13. On the issue of Omnibus notice, much emphasis is rightly laid on the decision of the Rahul Builders (supra), where the Apex Court has held that in maintaining the complaint, service of correct amount of demand in notice is imperative. Unless the notice is served in conformity with proviso (b) appended to Section 138 of the Act, complaint would not be maintainable. The service conditions are provided in the statute, one of which is the service of notice making demand of the payment of the amount of cheque where the use of word is "payment of said amount of money"
which requires to be issued within a stipulated time period from the date of receipt of the information from the bank in regard to the return of cheque. The Apex Court has therefore held that this being a penal provision should be construed very strictly and the service needs to be regarded with requisite strictness. The notice cannot be permitted to be Page 80 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 vague and capable of different interpretations. The omnibus notice without specifying as to what was the amount due cannot sub-serve the requirement of law.
14. As is quite obvious from the notice which has been issued in the instant case that the demand was made of the outstanding amount of Rs.20 lakhs. The noticee was required to respond to the said demand. There was no reference to the payment to the tune of Rs. 4,09,315/-, as according to the appellant also, the said sum of Rs. 4,09,315/- had been gradually paid over a period of time from 2012 to 2013, prior to the issuance of the cheque in question. It is only at the time of cross-examination that the appellant has agreed to have received the said amount. Before that, at no point of time, this has been either mentioned or accepted. The demand continued for the amount of Rs. 20 lakhs. As has been held in case of Rahul Builders (supra), the importance of notice cannot be undermined. This non-revelation on the part of the appellant shall need to be viewed strictly. An attempt is made to distinguish the facts of this case from those in Rahul Builders (supra) by urging that the amount of Rs. 4 lakhs (rounded off) was paid prior to the issuance of cheque unlike in the matter before the Apex Court. That, in the opinion of this Court, is hardly the distinguishing fact to nullify the need Page 81 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 of specific reference of the amount received. At the time of issuance of cheque, the amount received in the year 2012 and 2013 were in knowledge of the drawer, the fact remains that the cheque was meant to be the security for the entire amount and when the family dispute arose, the undated cheque was presented to the bank without the recognition of the amount of Rs. 4 lakhs (rounded off) and without putting the drawer to any notice. When addition of interest, cost etc. also is held impermissible for calculating the amount to be paid by the drawer of cheque, non-reference of the amount paid in the demand notice would surely make the notice omnibus. The Trial Court, if has followed the ratio of the Apex Court, its decision cannot be interfered with by terming it as having resulted into miscarriage of justice.
14.1. This being penal statute, if stricter interpretation is made along the line of the decision of the Apex Court, it also does not affect the right of the litigant - appellant to recover the amount if otherwise permissible under the law so far as remaining amount is concerned.
15. The Apex Court in case of Suman Sethi vs. Ajay K. Churiwala, [2000 (2) SCC 380] has made it clear that in the notice, the demand is to be made for the cheque amount. If no Page 82 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 such demand is made in the notice, the same would fall short of its legal requirement. In a notice, there could be other additional claims which are severable like interest, damages, etc. and they would not invalidate the notice but, in the notice, if ominous demand is made without specifying what is due in the dishonoured cheque, the notice would fail to meet the legal requirement. The object of the notice is to give an opportunity to the drawer of the cheque to absolve himself of the liabilities under Section 138 by making the payment of the amount covered by the cheque. When the notice itself is vague, the notice would be imperfect for not having specifically contained the demand for the payment of the outstanding amount and therefore, a notice of demand which requires the drawer to make the payment of the entire sum of cheque after having received a part of such amount against that very cheque, the issuance of notice under Section 138(b) of the NI Act cannot be said to be legal and valid notice.
16. The Apex Court in case of Central Bank of India & Another vs. Saxons Farms & Others [1999(8) SCC 221] has held that the object of the notice under Section 138(b) of the NI Act is to give a chance to the drawer of the cheque to rectify his omission and also to protect the honest drawer, if the drawer of the cheque is asked to pay more than the Page 83 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022 R/CR.A/1488/2016 JUDGMENT DATED: 12/01/2022 principal amount due from him and that amount is demanded as principal sum paid by him, it is not possible for the honest drawer to meet with such a requirement.
17. Resultantly, this appeal deserves no indulgence at the hands of this Court. However, this would not preclude the appellant to take any other legal recourse permissible under the law for recovery of the outstanding amount.
(SONIA GOKANI, J) Bhoomi Page 84 of 84 Downloaded on : Sun Apr 24 09:22:49 IST 2022