Delhi District Court
Pushp Lata vs K. K. Jain 1 on 14 March, 2011
IN THE COURT OF SH. RAKESH KUMAR SINGH:
METROPOLITAN MEGISTRATE (NI ACT)-1, CENTRAL:
ROOM NO.-42, TIS HAZARI COURT COMPLEX, DELHI
14.03.2011
JUDGMENT
a. Serial No. of the case
1155/10
b. Date of the commission of the offence
07.09.2004
c. Name of the complainant
Pushp Lata
d. Name of accused person and his parentage and residence
K. K. Jain, S/o Niranjan Jain, R/o- S-1/13/2 Phase-I, Budh Vihar, Delhi.
e. Offence complained of or proved Dishonor of cheque for insufficient funds punishable u/s-138 NI Act.
f. Plea of the accused and his examination (if any) Not guilty. No loan was availed of. Cheques not issued to the complainant but to the husband of the complainant as security. No liability.
g. Final Order
Held not guilty. Acquitted.
h. Date of such order
14.03.2011
i. Brief reasons:
"Just as there is evidence on behalf the prosecution so there may be evidence on behalf of the prisoner which may cause a doubt as to his guilt. In either case, he is entitled to the benefit of the doubt. But while the prosecution must prove the guilt of the prisoner, there is no such burden laid on the prisoner to prove his innocence and it is sufficient for him to raise a doubt as to his guilt; he is not bound to satisfy the jury of his innocence. . . Throughout the web of the English criminal law one golden thread is always to be seen, that it is the duty of the prosecution to prove the prisoner's guilt subject to what I have already said as to the defence of insanity and Subject also to any stationary Pushp Lata vs K. K. Jain 1 exception. If, at the end of and on the whole of the case, there reasonable doubt created by the evidence given by either the prosecution or the prisoner, as to whether the prisoner killed the deceased with a malicious intention, the prosecution has not made out the case and the prisoner is entitled to an acquittal. No matter what the charge or where the trial, the principle that the prosecution must prove the guilt of the prisoner is part of the common law of England and no attempt to whittle it down can be entertained."
------Viscount Sankey, L. C. in Woolmington versus Director of Public Prosecution: 1935 AC 462 Complainant's case:
The accused and the husband of the complainant was close friend and after the death of the complainant, accused used to come to the house of complainant and accordingly, on being approached, complainant gave a friendly loan of Rs. 7,50,000/- to the accused on an assurance of repayment within 6 months. On expiry of the said period, accused, on repeated demands, issued 7 cheques (two cheques bearing No.272690 & 272691 dated 25.05.2004 & 20.04.2004 respectively both Rs.2,50,000/-; remaining cheques bearing No.272692, 272688, 272689, 655978 & 685979 of Rs. 50,000/- each) signed by accused drawn on PNB, Janakpuri, Delhi. On presentation of cheque bearing No.272691 of Rs. 2,50,000/-, it was dishonoured with remarks "insufficient funds". Complainant approached the accused who assured that cheque would be duly honoured if presented again. This two cheques (bearing No.272690 & 272691 of Rs. 2,50,000/- each), were presented to the bank. Both the cheques returned with the remark "insufficient funds". Complainant again approached the accused for the payment of the cheques amount but the accused avoided to make the payment. The complainant served a legal demand notice dated 22.09.2004 demanding loan amount through his counsel upon the accused. The original cheques are exhibited as Ex. CW1/1 & Ex. CW1/2, memos dated 02.08.2004 07.09.2004 are Ex. CW1/3, Ex. CW1/4 & Ex. CW1/5. Carbon copy of notice is Ex. CW1/6, postal receipt is Ex. CW1/7, UPC slip is Ex. CW1/8 & AD Card is Ex. CW1/9. Despite the legal demand notice, accused did not make the payment of loan amount. Hence the present complaint.
Stand of accused:
2. Accused purchased a sharp Colour TV on installments with the help of the husband of the complainant. Rs.
3,000/- was paid in cash, however, for the payment of installments, seven blank cheques were given to the husband of the complainant. And since, amount of installments was not determined at that time, cheques were given blank. Subsequently, payment of installments was made in cash. However, husband of the complainant did not return the cheques, instead he told the accused that the same would be returned after some days as the same were not traceable. Being on friendly terms with him, accused believed the story and did not initiate any action.
2.1. Complainant filled up the other columns in the cheques and without any permission presented the cheques. Complainant never advanced any loan to the accused.
Pushp Lata vs K. K. Jain 2Discussion on factual & legal position:
3. In the examination under section 313 Cr. P. C, accused has taken a defence that he had neither taken any loan from the complainant nor given any cheque to her. He however has neither denied the receiving of legal demand notice nor disputed the factum of dishonour of cheques.
4. Complainant is primarily relying upon the mandatory presumptions of law. She has not led any other evidence or filed any other documents in support of her claim. Mandatory presumptions of law arising under section-118 & 139 NI Act may be summarized as under:
Section-118 of Negotiable Instruments Act reads as under:
"118. Presumptions as to negotiable instruments.- Until the contrary is proved, the following presumptions shall be made:
(a) of consideration: that every negotiable instrument was made or drawn for consideration, and that every such instrument when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration;"
Presumptions are:
i. Cheque was drawn for consideration;
ii. Cheque was transferred for consideration;
iii. Cheque was accepted for consideration.
Section-139 of Negotiable Instruments Act reads as under:
"139. Presumption in favour of holder.- It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt, or other liability."
Presumptions are:
i. Holder of the cheque has lawfully received the cheque, meaning thereby that the holder was in lawful possession of the cheque;
ii. The cheque was given in discharge of any debt or liability;Pushp Lata vs K. K. Jain 3
iii. Legally enforceable debt or liability was in existence at the time of issuance of the cheque; (contrary view has been overruled by the three judges bench of Hon'ble Supreme Court in Rangappa vs S. Mohan decided on 07.05.2010). iv. The cheque was of the nature as described in section-138; v. The cheque was drawn by the person who was maintaining the account pertaining to the cheque;
vi. Amount of money mentioned in the cheque was intended to be given;
4.1. No doubt, the mandatory presumptions of law may arise in favour of the complainant as discussed above.
However, the inference of presumptions are left to the discretion of the Court. In this respect Hon'ble Supreme Court in Hiten P. Dalal v. Bratindranath Banerjee, (2001) 6 SCC 16 has observed that:
"23. In other words, provided the facts required to form the basis of a presumption of law exists, the discretion is left with the Court 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."
4.2. Accused has tried to rebut the mandatory presumptions in respect of the consideration, liability and the existence of the liability.
5. Some extract from the cross examination of the complainant may beneficially be reproduced as under:
"I know the accused as he was friend of my husband & is nephew of my sister-in-law(nanand)."
"I know the financial status & about his family."
"My husband expired on 5-6-2003."
"After the death of my husband, I was having visiting terms with accused for sometimes i.e. for about 10-15 days."
"After the said period of 15 days I had only contacted the accused telephonicaly."Pushp Lata vs K. K. Jain 4
"The amount of Rs. 7,50,000/- which I gave to the accused was neither withdrawn from any Bk nor the same were lying at my home."
"Vol. I had taken the said amount from Smt. Premlata i.e. My Bhabhi. Again said only part payment was taken from Smt. Premlata."
"A sum of Rs. 6 lacs was taken from Smt. Premlata & ..."
"....the remaining amt of Rs. 1,50,000/- was taken from Smt. Bimla devi i.e. my nanand (sister-in-law)."
"No pronote or any other document was executed by the accused in my favour at the time of receipt of Rs. 7,50,000/-."
"The 5 cheques of Rs. 50,000/- each issued by accused in my favour are still with me. I can produce the same if the same are traceable."
"I am aware of the fat that a cheque becomes outdated of the expiry of period of 6 months from the date on which it is drawn."
"I had not presented the said 5 cheques."
"It is wrong to suggest that the signatures on the prt 2 cheques are of the yr 1996...."
"The accused had filled the date, name, amount & had signed the cheques in my presence in the year 2003."
"It is wrong to suggest that the accused has not handed over the cheques to me & I have found these cheques from the Almira of my deceased husband."
5.1. Some extract from the affidavit of the complainant:
"...the accused approached the deponent in the month of December, 2003 for friendly loan a sum of Rs. 7,50,000/-..."
".....the accused assured the deponent that he shall repay the said loan amount within six months."
"...after expiry of the six months, the accused did not pay the said loan amount to the deponent.."
"......after repeated requests and demands the accused have issued seven cheques......."
".....two of them cheques bearing No. 272690 of Rs. 2,50,000/- dated: 25.5.2004 and 272691 of Rs. 2,50,000/- dated 20.4.2004......"Pushp Lata vs K. K. Jain 5
"...remaining cheques Nos. 272692, 272688, 272689, 685978, 685979 of Rs. 50,000/- each...."
"......which is duly signed by the accuses, drawn on Punjab National Bank, Janakpuri, New Delhi....."
"...accordingly on receipt of the said cheque/dishonoured cheque, the deponent approached the accused and stated the facts about dishounring......"
"...thereafter the deponent again approached the accused regarding the payment of the cheques...."
5.2. Contrast in the statements of the complainant:
After 15 days from the death of her husband, the complainant never met the accused. (as per her own submission, she had made only a telephonic contact with the accused). However, in her affidavit, she claimed to have approached the accused after the dishonour of the first cheque and again after the second dishonour. These incidents were stated to be of the year 2004.
In the same line one more thing may be noted. If the complainant did not meet the accused after 15 days from the death of her husband (complainant was very categorical about the duration. See statements in para-5), the so called loan transaction ought to have been completed with in the said period. Now, husband of the complainant expired on 5-6-2003. Loan transaction would have been completed on or before 21-6-2003. However, in her affidavit, she claimed to have given the loan in the month of December 2003 (see statements in para-5.1.) Complainant has claimed that on expiry of the period of six months, accused did not pay the loan amount and on repeated demands accused issued the cheques. If loan was given in the month of December 2003 (as per the version of the complainant), six months period would have expired in the month of June 2004. Complainant could only have approached the accused after June 2004 (as per her own version, she only approached the accused after the expiry of the said period of six months). The accused would have issued the cheques thereafter. Interestingly, cheques are dated 20.4.2004 and 25.5.2004. (Complainant has not claimed that these cheques were pre-dated. Details of other 5 cheques are not even provided by the complainant).
Complainant had borrowed the money from two persons. She demanded a huge sum of money and had received the same within a short span of time. What was the use of the money? Not for her use. Neither for the use in the business of her deceased husband nor for the purpose of her future. The purpose was to advance a loan to one person. It is improbable that any one can land a huge amount of money to the second person for the further transfer of the money to some one else. It is pertinent to note that neither any mortgage was there nor any promissory note or any agreement was to be executed by the accused. Complainant has never spoken any words as to how could she convinced her relatives to land her such huge amount to be further transferred to another. How could a prudent man justifies his approval to the circumstances?
Pushp Lata vs K. K. Jain 6In the same line one thing may also be noted. Even the two persons who gave the total amount had not asked anything from the complainant. Complainant in her evidence never tried to establish the factum of transaction between herself and her relatives. (Pertinently, the whole amount of Rs. 7,50,000/- was allegedly accumulated from the two relatives). Conduct of the so called two relatives was not in the line of the conduct of a prudent man. This transaction in the absence of any concrete material is doubtful.
Complainant was not having any amount with her. However, she was willing to advance loan of a huge amount. Complainant has not claimed that she was earning at the relevant point of time. Her only source was her husband. Pertinently, after the death of her husband, she ought have dependent upon the other members of the family. She was not having any separate source of income. In such circumstances, how can it be believed that she got managed a sum of Rs. 7,50,000/- within a short period and that too for giving a loan to some one else?
Accused is stated to be the nephew of the sister-in-law (nanand) of the complainant. Who were the two persons from whom the complainant secured the amount of Rs. 7,50,000/-? One her bhabi and the second her (sister-in-law) nanand. If that was the case, what was preventing the accused to have asked aunt (sister-in-law of the complainant) for advancement of some portion of the loan? And what was preventing the so called sister-in-law to advance the amount directly to her nephew instead of giving it to the complainant?
No details of other 5 cheques have been provided by the complainant. However, complainant provided the number of those five cheques. Two cheques appear to be from the different cheque book. Other cheques start with '27' whereas the two cheques start with '68'. All the seven cheques are stated to have been issued on the same date and drawn on the same bank. The accused could not be having two cheque books of different denomination from the one and the same bank. (Complainant has not claimed that accused was having two different account in the same bank). The circumstances do not inspire confidence.
Complainant had not presented the other 5 cheques for encshment. Why? After all, those cheques were covering the balance payment of Rs. 2,50,000/- (Rs. 50,000/- each). She was well aware that after the expiry of six months, the said cheues were of no use. However, she did not present the same for encashment. A prudent man can not do this. Even the complainant could not produce those five cheques. She was not sure if those cheques could be traced or not.
Complainant has claimed that the accused had filled the date, name, amount & had signed the cheques in my presence in the year 2003 (as per her cross examination). Whereas, as per her claim in the affidavit, loan itself was given in the month of December 2003 and the same was to be repaid within six months, and when the accused failed to repay the money after the expiry of the said six months, the cheques were issued on repeated demands. In such case, the cheques could not have been filled up, signed and issued in the year 2003. The version of the complainant is manifestly wrong.
5.3. Contrasts shown and discussed at para-5.2. Above do leave any doubt that the complainant has not approached the Court with clean hands, statements of the complainant are contradictory, story of the complainant is concocted & manifestly wrong and allegations are baseless and unsustainable.
Pushp Lata vs K. K. Jain 75.4. So far as the story of the accused is concerned, the same has not been established. Even the accused has not come into the witness box to justify his story. He has not provided any details of the so called transaction. He has not produced any documents supporting his claim. In such circumstances, his story in respect of the fact that he had give seven blank cheques to the husband of the complainant in respect of purchase of TV on installments, can not be treated as plausible.
5.5. The opinion rendered by the expert who has been examined as a defence witness (wrongly named as DW2) is not inspiring. He opined that there are fundamental differences in all the general and personal writing characteristics which can not be found in the writings of a same person. However, he has not detailed such characteristics. Everywhere he has rendered the opinion and opinion only. At some point he has mentioned about executional mode of letters and strokes, design, nature of curves, but has not explained as to how they are different. He also claimed differences between several other things in the disputed and comparison writings, however, has not the basis thereof. He just claimed that the same was based upon an "inter se comparison" "inter se examination" etc. 5.6. I am not inclined to rely upon the opinion rendered by the expert.
5.7. The explanation given by the accused may not be true, but it has no serious impact on the defence because from the evidence and circumstances available on record (accused is very much with in his right in relying upon the circumstances brought and material placed on record by the complainant. See the discussion on legal position herein after), he successfully improbabalized the statement regarding pre-existing debt. I mean to say, the loan transaction between the petitioner and the complainant itself is rendered improbable in view of the attending circumstances brought on record.
Legal Position:
6. To what extent a mere reliance upon the presumptions of law can help the complainant is the question involved in the present case.
6.1. Hon'ble High Court of Bombay in Peter Mascarenhas Vs. Monsabre Ashley Oswald Dias, CCC X-2010(4) 234 has dealt with the above aspect in great detail. This was also a case of friendly loan of Rs. 12 lakhs which the complainant had lent to the accused after collecting the same from several other persons. Complainant had examined the persons from who he collected the amount. There was also an agreement executed by the accused person. However, after a detailed factual and legal discussion, Hon'ble High Court has acquitted the accused primarily on the ground that complainant has failed to discharge his onus to establish accumulation of money. It has been observed therein that:
"In juxtaposition though the Complainant was faced with the aforesaid material which has come through the cross examination of Cw.2, Cw.3 and Cw.4, the Complainant did not choose to lead any further evidence to discharge the burden of proving the existence of the liability when the burden again shifted to him. Applying the principles that the Complainant has to prove the offence beyond reasonable doubt but the Pushp Lata vs K. K. Jain 8 Accused has to only probabilise his defence, in my view, the test has been satisfied by the Accused then the Complainant. The Complainant as can be seen has not led any further cogent evidence to prove the factum of the lending of the money to the Accused and thereby has not discharged the burden which had shifted to him on account of the evidence which has come in cross examination of the Complainant and his witnesses."
6.2. In the present case, complainant has not examined any other person, has not shown any documentary proof in respect of loan. The instant case is even weaker than the case before the Hon'ble High Court of Bombay.
6.3. Hon'ble Supreme Court in K. Prakashan vs P.K. Surenderan decided on 10 October, 2007 has also dealt with the aspect of friendly loan and scope of presumptions of law. The facts of the case were:
"3. Respondent herein allegedly, on diverse dates, advanced a sum of Rs. 3,16,000/- to the appellant who issued a cheque for the said amount on 18.12.1995. The said cheque was dishonoured on the ground of insufficient fund. Allegedly, when the matter was brought to the notice of the appellant, he undertook to remit the amount on or before 30.01.1996. The cheque was again presented but the same was not encashed on the ground payment stopped by the drawer.
5. The complainant in support of its case led evidence to show that he had advanced various sums on the following terms:
On 31-1-94 a sum of Rs. One lakh; on 8-6-94, Rs. 86,000/-; on 12-6-94, Rs. 28,000/-; on 23-4-95, Rs. 50,000/- on 18-6-95, Rs. 40,000/- and on 7-8-95, Rs. 12,000/-.
6. Defence of the appellant, on the other hand, was that he had issued blank cheques for the purpose of purchase of spare parts, tyres, etc. in connection with the business of transport services run in the name of his brother. The blank cheques used to be returned by the sellers of spare parts, etc. when the amounts were paid. According to the appellant, the complainant lifted the impugned cheque book put in the bag and kept in his shop. Appellant in support of his case examined the Bank Manager of the Bank concerned. "
Hon'ble High Court having reversed the judgment of acquittal, accused approached the Hon'ble Supreme Court. Hon'ble Supreme Court has observed therein that:
"14. The learned Trial Judge had passed a detailed judgment upon analysing the Pushp Lata vs K. K. Jain 9 evidences brought on record by the parties in their entirety. The criminal court while appreciating the evidence brought on record may have to weigh the entire pros and cons of the matter which would include the circumstances which have been brought on record by the parties. The complainant has been found to be not a man of means. He had allegedly advanced a sum of Rs. 1 lakh on 13.01.1994. He although had himself been taking advances either from his father or brother or third parties, without making any attempt to realize the amount, is said to have advanced sums of Rs. 86,000/- on 8.06.1994. Likewise he continued to advance diverse sums of Rs. 28,000/-, Rs. 50,000/-, Rs. 40,000/- and Rs. 12,000/- on subsequent dates. It is not a case where the appellant paid any amount to the respondent towards repayment of loan. He even did not charge any interest. He had also not proved that there had been any commercial or business transactions between himself and the appellant. Whey the appellant required so much amount and why he alone had been making payments of such large sums of money to the appellant has not been disclosed. According to him, he had been maintaining a diary. A contemporaneous document which was in existence as per the admission of the complainant, therefore, was required to be brought on records. He failed to do so. He also did not examine his father and brothers to show that they were men of means and in fact advanced a huge sum to him only for the purpose of grant of loan by him to the appellant. The learned Trial Court not only recorded the inconsistent stand taken by the complainant in regard to the persons from whom he had allegedly borrowed the amount, it took into consideration the deposit of the cheques in the bank commenting: Ext. D1 the counterfoil of the cheque book issued to the accused from that bank, was proved through him. It contains the counterfoils of the cheques 782451 to 782460. Ext. D2 is the pass book issued to the accused from that bank. SW1 is the Branch Manager of Syndicate Bank,Koyilandy. He would say that in Ext. P4 ledger extract, cheque No. 782460 reached the bank for collection on 30.12.93. The net transaction in that account was in the year 1996. Cheque No. 782451 reached the bank on 8.1.96. Ext. D1 shows that is the first cheque in that book. 782460 is the lost cheque in that book. If the lost cheque i.e. 782460 reached the bank for collection on 30.12.93 in normal and reasonable course the first cheque i.e. 782451 might have been issued even prior to that date. Case of the complainant is that Ext. P1 cheque was given to him by the accused on 5.10.95 and the cheque was dated 18.12.95. Ext. P4, D1 and D2 substantiate the case of the accused that the allegation of the complainant that Ext. P1 cheque was given to him on 18.12.95 is not genuine."
Hon'ble Supreme Court. Hon'ble Supreme Court has observed therein that:
"15. The High Court, as noticed herein before, on the other hand, laid great Pushp Lata vs K. K. Jain 10 emphasis on the burden of proof on the accused in terms of Section 139 of the Act.
16. The question came up for consideration before a Bench of this Court in M.S. Narayana Menon (supra) wherein it was held:
"38. If for the purpose of a civil litigation, the defendant may not adduce any evidence to discharge the initial burden placed on him, a fortiori even an accused need not enter into the witness box and examine other witnesses in support of his defence. He, it will bear repetition to state, need not disprove the prosecution case in its entirety as has been held by the High Court."
A presumption is a legal or factual assumption drawn from the existence of certain facts. It was furthermore opined that if the accused had been able to discharge his initial burden, thereafter it shifted to the second respondent in that case.
The said legal principle has been reiterated by this Court in Kamala S. v. Vidhyadharan M.J. and Another [(2007) 5 SCC 264] wherein it was held:
"The Act contains provisions raising presumption as regards the negotiable instruments under Section 118(a) of the Act as also under Section 139 thereof. The said presumptions are rebuttable ones. Whether presumption stood rebutted or not would depend upon the facts and circumstances of each case."
The nature and extent of such presumption came up for consideration before this Court in M.S. Narayana Menon Alias Mani V. State of Kerala and Anr. [(2006) 6 SCC 39] wherein it was held :
"30. Applying the said definitions of proved or disproved to the principle behind Section 118(a) of the Act, the court shall presume a negotiable instrument to be for consideration unless and until after considering the matter before it, it 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 Pushp Lata vs K. K. Jain 11 consideration dos not exist. For rebutting such presumption, what is needed is to raise a probable defence. Even for the said purpose, the evidence adduced on behalf of the complainant could be relied upon. "
This Court clearly laid down the law that standard of proof in discharge of the burden in terms of Section 139 of the Act being of preponderance of a probability, the inference therefor can be drawn not only from the materials brought on record but also from the reference to the circumstances upon which the accused relies upon. Categorically stating that the burden of proof on accused is not as high as that of the prosecution, it was held;
"33. Presumption drawn under a statute has only an evidentiary value. Presumptions are raised in terms of the Evidence Act. Presumption drawn in respect of one fact may be an evidence even for the purpose of drawing presumption under another. "
..........
18. Ms. Srivastava has relied upon a decision of this Court in Goaplast (P) Ltd. v. Chico Ursula DSouza and Another [(2003) 3 SCC 232] wherein this Court opined:
"The presumption can be rebutted by adducing evidence and the burden of proof is on the person who wants to rebut the presumption. This presumption coupled with the object of Chapter XVII of the Act which is to promote the efficacy of banking operation and to ensure credibility in business transactions through banks persuades us to take a view that by countermanding payment of post-dated cheque, a party should not be allowed to get away from the penal provision of Section 138 of the Act. A contrary view would render Section 138 a dead letter and will provide a handle to persons trying to avoid payment under legal obligations undertaken by them through their own acts which in other words can be said to be taking advantage of ones own wrong. If we hold otherwise, by giving instructions to banks to stop payment of a cheque after issuing the same against a debt or liability, a drawer will easily avoid penal Pushp Lata vs K. K. Jain 12 consequences under Section 138. Once a cheque is issued by a drawer, a presumption under Section 139 must follow and merely because the drawer issued notice to the drawee or to the bank for stoppage of payment it will not preclude an action under Section 138 of the Act by the drawee or the holder of the cheque in due course. This was the view taken by this Court in Modi Cements Ltd. v. Kuchil Kumar Nandi 2 . On same facts is the decision of this Court in Ashok Yeshwant Badave v. Surendra Madhavrao Nighojakar. The decision in Modi case overruled an earlier decision of this Court in Electronics Trade & Technology Development Corpn. Ltd. v. Indian Technologists & Engineers (Electronics) (P) Ltd. which had taken a contrary view. We are in respectful agreement with the view taken in Modi case. The said view is in consonance with the object of the legislation. On the faith of payment by way of a post-dated cheque, the payee alters his position by accepting the cheque. If stoppage of payment before the due date of the cheque is allowed to take the transaction out of the purview of Section 138 of the Act, it will shake the confidence which a cheque is otherwise intended to inspire regarding payment being available on the due date. "
19. No exception to the aforementioned legal principle can be taken. What, however, did not fall for consideration in the aforementioned case was as to how the said burden can be discharged.
20. It is now trite that if two views are possible, the appellant court shall not reverse a judgment of acquittal only because another view is possible to be taken. The appellate courts jurisdiction to interfere is limited. [See M.S. Narayana Menon (supra) and Mahadeo Laxman Sarane & Anr. v. State of Maharashtra, 2007 (7) SCALE 137] The High Court furthermore has not met the reasons of the learned Trial Judge. It proceeded on the premise that the appellant had not been able to discharge his burden of proof in terms of Section 139 of the Act without posing unto itself a further question as to how the said burden of proof can be discharged. It furthermore did not take into consideration the legal principle that the standard of proof upon a prosecution and upon an accused is different. "
Pushp Lata vs K. K. Jain 13Nature and extent of rebuttal
7. Hon'ble Supreme Court in Kamala S vs Vidyadharan M.J. & Anr Appeal (crl.) 233 of 2007, decided on 20.02.2007 "15. The Act contains provisions raising presumption as regards the negotiable instruments under Section 118(a) of the Act as also under Section 139 thereof. The said presumptions are rebuttable ones. Whether presumption stood rebutted or not would depend upon the facts and circumstances of each case.
16. The nature and extent of such presumption came up for consideration before this Court in M.S. Narayana Menon Alias Mani V. State of Kerala and Anr. [(2006) 6 SCC 39] wherein it was held :
"30. Applying the said definitions of "proved" or "disproved" to the principle behind Section 118(a) of the Act, the court shall presume a negotiable instrument to be for consideration unless and until after considering the matter before it, it 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 dos not exist. For rebutting such presumption, what is needed is to raise a probable defence. Even for the said purpose, the evidence adduced on behalf of the complainant could be relied upon."
17. This Court clearly laid down the law that standard of proof in discharge of the burden in terms of Section 139 of the Act being of preponderance of a probability, the inference therefor can be drawn not only from the materials brought on record but also from the reference to the circumstances upon which the accused relies upon. Categorically stating that the burden of proof on accused is not as high as that of the prosecution, it was held;
"33. Presumption drawn under a statute has only an evidentiary value. Presumptions are raised in terms of the Evidence Act. Presumption drawn in respect of one fact may be an evidence even for the purpose of drawing presumption under another."Pushp Lata vs K. K. Jain 14
It was further observed that ;
" 38. If for the purpose of a civil litigation, the defendant may not adduce any evidence to discharge the initial burden placed on him, a "fortiori" even an accused need not enter into the witness box and examine other witnesses in support of his defence. He, it will bear repetition to state, need not disprove the prosecution case in its entirety as has been held by the High Court.
39. A presumption is a legal or factual assumption drawn from the existence of certain facts."
7.1. Hon'ble Supreme Court in Krishna Janardhan Bhat v. Dattatraya G. Hegde 2008 AIR SCW 738 has observed that:
"30. The proviso appended to the said section provides for compliance with legal requirements before a complaint petition can be acted upon by a court of law. Section 139 of the Act merely raises a presumption in regard to the second aspect of the matter. Existence of legally recoverable debt is not a matter of presumption under Section 139 of the Act. It merely raises a presumption in favour of a holder of the cheque that the same has been issued for discharge of any debt or other liability.
31. The courts below, as noticed herein before, proceeded on the basis that Section 139 raises a presumption in regard to existence of a debt also. The courts below, in our opinion, committed a serious error in proceeding on the basis that for proving the defence the accused is required to step into the witness box and unless he does so he would not be discharging his burden. Such an approach on the part of the courts, we feel, is not correct.
32. An accused for discharging the burden of proof placed upon him under a statute need not examine himself. He may discharge his burden on the basis of the materials already brought on record. An accused has a constitutional right to maintain silence. Standard of proof on the part of the accused and that of the prosecution in a criminal case is different.
... ....
34. Furthermore, whereas prosecution must prove the guilt of an accused beyond Pushp Lata vs K. K. Jain 15 all reasonable doubt, the standard of proof so as to prove a defence on the part of the accused is 'preponderance of probabilities'. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which he relies. ......
45. We are not oblivious of the fact that the said provision has been inserted to regulate the growing business, trade, commerce and industrial activities of the country and the strict liability to promote greater vigilance in financial matters and to safeguard the faith of the creditor in the drawer of the cheque which is essential to the economic life of a developing country like India. This however, shall not mean that the courts shall put a blind eye to the ground realities. Statute mandates raising of presumption but it stops at that. It does not say how presumption drawn should be held to have been rebutted. Other important principles of legal jurisprudence, namely, presumption of innocence as a human right and the doctrine of reverse burden introduced by Section139 should be delicately balanced. Such balancing acts, indisputably would largely depend upon the factual matrix of each case, the materials brought on record and having regard to legal principles governing the same."
It may be pertinent to mention here that a three judges bench of the Hon'ble Supreme Court in Rangappa Vs. S. Mohan decided on 07.05.2010 has considered the dictum of Krishna Janardhan Bhat (supra) and overruled the view so far as existence of liability is concerned, however, has not dissented with other parameters observed and laid down in the said case. It has been observed therein that:
"14. In light of these extracts, we are in agreement with the respondent-claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat (supra) may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. "
7.2. In the facts and circumstances of the present case, if we make a fine balance between the two propositions, it can be safely held that accused has successfully probabilised his defence by showing that the non-existence of debt or liability and consideration is probable.
7.3. I am of the opinion that an accused has a right to rebut the presumption by placing reliance upon the circumstances brought and material placed by the complainant. Hon'ble Supreme Court in Rangappa Vs. S. Mohan decided on 07.05.2010 has further held that:
Pushp Lata vs K. K. Jain 16"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 accused/defendant cannot be expected to discharge an unduly high standard or proof. 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."
8. In the light of the above discussion, I am of the opinion that accused has created a reasonable doubt in respect of accumulation of money, existence of liability and issuance of cheques for consideration. The complainant has not tried to establish the factum of loan by any other means and has chosen to rely only upon the mandatory presumptions of law. The prosecution has to fail in the circumstances discussed above.
9. I accordingly return a finding of not guilty against the accused person.
10. Accused is hereby acquitted from the charges in the present complaint case.
11. A copy of this order be placed on the official website of the District Court.
(Rakesh Kumar Singh) MM(NI Act)-01, Central/14.03.2011 Pushp Lata vs K. K. Jain 17