Madhya Pradesh High Court
Rajendra Kumar Singhal vs Sulekha Indulkar Alias Smt. Sulekha ... on 27 February, 2020
Author: Anand Pathak
Bench: Anand Pathak
1 Criminal Appeal No.254/2016
HIGH COURT OF MADHYA PRADESH
BENCH AT GWALIOR
SINGLE BENCH : HON'BLE MR. JUSTICE ANAND PATHAK
Criminal Appeal No.254/2016
Rajendra Kumar Singhal
Vs.
Sulekha Indulkar alias Smt. Sulekha Dakre
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Shri Vivek Mishra, learned counsel for the appellant.
Shri Y.S.Tomar, learned counsel for the respondent.
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JUDGMENT
(27/02/2020) The instant appeal is under Section 378 of Cr.P.C. arising out of judgment dated 22.6.2015 passed by the JMFC, Gwalior, in Criminal Case No.5337/2011 (Criminal Complaint), whereby the case preferred by the present appellant as complainant under Section 138 of the Negotiable Instruments Act (for brevity "the Act") has been dismissed and respondent/accused has been acquitted.
2. Vide order dated 1.3.2016 leave to appeal was granted and vide order dated 26.4.2016 matter was admitted for final hearing.
Thereafter matter is placed for hearing before this Court under the caption of "Final Hearing Expedited Cases".
3. Precisely stated facts of the case are that complainant/appellant (hereinafter referred to as "the complainant") filed a case against the respondent (hereinafter referred to as "the accused") under Section 138 of the Act and as per the allegations contained in the complaint, parties entered into an agreement dated 29.10.2010 (Ex.D/1) by which 2 Criminal Appeal No.254/2016 complainant intended to purchase a house owned by the accused, and therefore, advance money of Rs. ten lacs was paid to the accused. Due to some issues, agreement could not lead to execution of sale-deed and agreement aborted. Result was obvious that complainant sought return of advance money (Rs. ten lacs) paid to the accused. Apparently some amount was returned back in cash and part of the amount as alleged was tried to be returned back through cheque No.722569 dated 13.1.2011 of Syndicate Bank (Ex.P/1) amounting to Rs.2,10,000/-.
4. Said cheque was put for encashment by the complainant but dishonoured due to insufficiency of funds on 6.5.2011. Thereafter statutory notice was sent and thereafter private complaint under Section 138 of the Act was preferred. Accused appeared in fray and raised the defence about giving the cheque to the complainant as security. It was her version that she issued the cheque to Mohsin (mediator in the deal) for his payment, but Mohsin gave this cheque to the complainant and complainant tried to encash it. It was a cheque given for security, and therefore, it cannot come under the legal instrument as per the Negotiable Instruments Act because it was not for consideration of legally enforceable debt.
5. Trial conducted. After appreciating the evidence led by the parties, trial Court dismissed the complaint and acquitted the accused from the clutches of Section 138 of the Act.
6. Therefore, complainant preferred leave to appeal and leave has been granted.
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7. It is the submission of learned counsel for the appellant that trial Court erred in recording acquittal in favour of the accused and dismissing the complaint because trial Court proceeded on wrong assumption that cheque was issued for security purpose and any instrument given as security cannot be encashed and liability of Section 138 of the Act does not attract in such exigency. He relies upon the judgment of the Apex Court in the case of Rangappa v.
Mohan reported in 2010 AIR SCW 2946 to submit that existence of legally recoverable debt is a matter of presumption under Section 139 and accused has to raise a probable defence which may create doubts about existence of legally enforceable debt or liability, then only case of the complainant can fail, otherwise not. It is further submitted that trial Court erred in relying upon the judgment rendered by the Apex Court in the case of Krishna Janardhan Bhat v. Dattatraya G. Hegde reported in AIR 2008 SC 1325 because in Rangappa (supra) Apex Court has overruled the observations made in Krishna Janardhan Bhat (supra).
8. He further relied upon the recent pronouncement of the Apex Court in the case of APS Forex Services Pvt. Ltd. vs. Shakti International Fashion Linkers & Ors. decided on 14th February, 2020 in Criminal Appeal No.271/2020 wherein Apex Court has held that once accused admitted issuance of cheque and his signature on the cheque, then there is a presumption under Section 139 of the Act that there exists legally enforceable debt or liability. Of-course such 4 Criminal Appeal No.254/2016 presumption is rebuttable in nature but to rebut the presumption accused is required to lead evidence that full amount due and payable to the complainant has been paid. Here in the present case, no such evidence has been led by the accused to rebut the presumption.
9. It is further submitted that if accused could have rebutted the presumption by leading evidence of Mohsin, then the defence raised by the accused would have been different, but by not adducing the evidence of Mohsin, the said defence regarding cheque issued for security purpose could not have been taken by the accused. He relied upon the decision of Kerala High Court in the case of P.N.Salim v.
P.J.Thomas and another reported in 2004 Cri.L.J. 3096 to submit that once Mohsin has not been examined, then presumption is not rebutted regarding nature of instrument. He prayed for setting aside of the impugned judgment and prayed that appeal be allowed.
10. On the other hand, learned counsel for the respondent opposed the prayer and submitted that trial Court rightly passed the impugned judgment. He supported the impugned judgment. He submits that accused rightly rebutted the presumption. He prayed for dismissal of the appeal.
11. Heard learned counsel for the parties and perused the record.
12. In the case in hand, complainant is asserting the facts on the basis of agreement between the parties for purchase of a house. The said agreement has been produced by the accused vide Ex.D/1, and therefore, it is an admitted document. The said agreement dated 5 Criminal Appeal No.254/2016 29.10.2010 indicates that complainant wanted to purchase the house and Rs. ten lacs as advance were paid to the accused.
13. Later on, said deal fizzled out, and therefore, accused had to return the advance money. As per the submissions of appellant, part of the amount was already returned and part of the amount was to be returned, therefore, cheque amounting to Rs.2.10 lac (present cheque), which got dishonoured due to insufficiency of funds, was given. In his statement, Mukesh Gupta (DW-2) admitted execution of agreement and the payment structure. He admitted in para 2 of examination-in-
chief that said cheque has been given as security. His own admission regarding execution of agreement and signing out of the cheque indicate that cheque was issued by the accused in favour of the complainant.
14. Now the question is that whether the cheque was given in security or not and its effect. The Apex Court in the case of APS Forex Services Pvt. Ltd. (supra) elaborated the exigencies in such situation in the following manner:-
"6. On the presumption under Section 139 of the N.I. Act few decisions of this Court are required to be referred to and considered.
6.1 In the case of K.N.Beena vs. Muniyappan, (2001) 8 SCC 458, it is observed and held by this Court that under Section 118 of the N.I. Act, unless the contrary is proved, it is to be presumed that the negotiable instruments (including a cheque) had been made or drawn for consideration. It is further observed and held that under Section 139, the Court has to presume, unless the contrary is proved, that the holder of the cheque received the cheque for discharge, in whole or in part, of a debt or liability.
6 Criminal Appeal No.254/2016 It is further observed that thus in complaints under Section 138, the Court has to presume that the cheque had been issued for a debt or liability. This presumption is rebuttable. However, the burden of proving that the cheque has not been issued for a debt or liability is on the accused.
6.2 In the case of Rangappa (supra) again, this Court had an occasion to consider the presumption of existence of a legally enforceable debt or liability under Section 139 of the N.I. Act. In the aforesaid decision, after considering other decisions of this Court on Section 118(a) and 139 of N.I. Act, it is observed and held that there exists a presumption which favours the complainant. It is further observed that the presumption under Section 139 of the N.I. Act is in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein there is existence of legally enforceable debt or liability can be contested. In Paragraph 27 this Court observed and has held as under:
"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 or proof."
7 Criminal Appeal No.254/2016 6.3 In the case of Kishan Rao (Supra) after considering the decision of this Court in the case of Kumar Exports vs. Sharma Carpets, (2009) 2 SCC 513, it is observed and held that the accused may adduce evidence to rebut the presumption, but mere denial regarding existence of debt shall not serve any purpose. This Court in paragraph 19 of that judgment considered paragraph 14, 15, 18 & 19 of the decision in the case of Kumar Exports (Supra) as under:
19. This Court in Kumar Exports v. Sharma Carpets (supra), had considered the provisions of the Negotiable Instruments Act as well the Evidence Act. Referring to Section 139, this Court laid down the following in paras 14, 15, 18 and 19:
"14. Section 139 of the Act provides that 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.
15. Presumptions are devices by use of which the courts are enabled and entitled to pronounce on an issue notwithstanding that there is no evidence or insufficient evidence. Under the Evidence Act all presumptions must come under one or the other class of the three classes mentioned in the Act, namely, (1) "may presume"
(rebuttable), (2) "shall presume"
(rebuttable), and (3) "conclusive
presumptions" (irrebuttable). The term "presumption" is used to designate an inference, affirmative or disaffirmative of the existence of a fact, conveniently called the "presumed fact" drawn by a judicial tribunal, by a process of probable reasoning from some matter of fact, either judicially noticed or admitted or established by legal evidence to the 8 Criminal Appeal No.254/2016 satisfaction of the tribunal. Presumption literally means "taking as true without examination or proof".
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18. Applying the definition of the word "proved" in Section 3 of the Evidence Act to the provisions of Sections 118 and 139 of the Act, it becomes evident that in a trial under Section 138 of the Act a presumption will have to be made that every negotiable instrument was made or drawn for consideration and that it was executed for discharge of debt or liability once the execution of negotiable instrument is either proved or admitted. As soon as the complainant discharges the burden to prove that the instrument, say a note, was executed by the accused, the rules of presumptions under Sections 118 and 139 of the Act help him shift the burden on the accused. The presumptions will live, exist and survive and shall end only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability. A presumption is not in itself evidence, but only makes a prima facie case for a party for whose benefit it exists.
19. The use of the phrase "until the contrary is proved" in Section 118 of the Act and use of the words "unless the contrary is proved" in Section 139 of the Act read with definitions of "may presume" and "shall presume" as given in Section 4 of the Evidence Act, makes it at once clear that presumptions to be raised under both the provisions are rebuttable. When a presumption is rebuttable, it only points out that the party on whom lies the duty of going forward with evidence, on the fact presumed and when that party has produced evidence fairly and reasonably 9 Criminal Appeal No.254/2016 tending to show that the real fact is not as presumed, the purpose of the presumption is over."
6.4 Now so far as the reliance is placed by Learned Counsel appearing on behalf of the accused on the decision of this Court in the case of Basalingappa (supra), on going through the said decision, we are of the opinion that the said decision shall not be applicable to the facts of the case on hand and/or the same shall not be of any assistance to the accused. In that case before this Court, the defence by the accused was that the cheque amount was given by the complainant to the accused by way of loan. When the proceedings were initiated under Section 138 of the N.I. Act the accused denied the debt liability and the accused raised the defence and questioned the financial capacity of the complainant. To that, the complainant failed to prove and establish his financial capacity. Therefore, this Court was satisfied that the accused had a probable defence and consequently in absence of complainant having failed to prove his financial capacity, this Court acquitted the accused. In the present case, the accused never questioned the financial capacity of the complainant. We are of the view that whenever the accused has questioned the financial capacity of the complainant in support of his probable defence, despite the presumption under Section 139 of the N.I. Act about the presumption of legally enforceable debt and such presumption is rebuttable, thereafter the onus shifts again on the complainant to prove his financial capacity and at that stage the complainant is required to lead the evidence to prove his financial capacity, more particularly when it is a case of giving loan by cash and thereafter issuance of a cheque. That is not a case here.
7. Coming back to the facts in the present case and considering the fact that the accused has admitted the issuance of the cheques and his signature on the cheque and that the cheque in question was issued for the second time, after the earlier cheques were dishonoured and that even according to the accused some amount was due and payable, there is a presumption under Section 139 of the N.I. Act that 10 Criminal Appeal No.254/2016 there exists a legally enforceable debt or liability. Of course such presumption is rebuttable in nature. However, to rebut the presumption the accused was required to lead the evidence that full amount due and payable to the complainant has been paid. In the present case, no such evidence has been led by the accused. The story put forward by the accused that the cheques were given by way of security is not believable in absence of further evidence to rebut the presumption and more particularly the cheque in question was issued for the second time, after the earlier cheques were dishonoured. Therefore, both the courts below have materially erred in not properly appreciating and considering the presumption in favour of the complainant that there exists legally enforceable debt or liability as per Section 139 of the N.I. Act. It appears that both, the Learned Trial Court as well as the High Court, have committed error in shifting the burden upon the complainant to prove the debt or liability, without appreciating the presumption under Section 139 of N.I. Act. As observed above, Section 139 of the Act is an example of reverse onus clause and therefore once the issuance of the cheque has been admitted and even the signature on the cheque has been admitted, there is always a presumption in favour of the complainant that there exists legally enforceable debt or liability and thereafter it is for the accused to rebut such presumption by leading evidence."
15. Perusal of the above discussion makes it very clear that if any cheque is given in security, then presumption of legally enforceable debt or liability exists which has to be rebutted by the accused to the extent that full amount due and payable to the complainant has been paid or otherwise as discussed above.
16. Here in the case in hand, accused did not discharge the onus lying over her and she could not rebut the presumption as per Section 118 and Section 139 of the Act. Mohsin did not enter into witness box 11 Criminal Appeal No.254/2016 and he could have been the witness who could have elaborated the intention of the parties. Although agreement to sell and issuance of cheque were admitted by the accused and rightly so because she signed those instruments, and therefore, it was herculean task for her to discharge the onus. Nevertheless she failed even otherwise. On the contrary, complainant (PW-1) pleaded in his complaint and examination-in-chief about the evidence in detail and he established the fact that cheque was issued by the accused for consideration of legally recoverable debt. Mahesh Chandra (PW-2) was the Chief Manager of Syndicate Bank, Lashkar, Gwalior, who proved dishonour of cheque.
17. In the cumulative analysis, it is established that trial Court erred in passing the impugned judgment regarding acquittal in favour of the accused i.e. respondent. Therefore, impugned judgment dated 22.6.15 is hereby set aside and appeal stands allowed.
18. In consequence to allowing of appeal, complaint is hereby allowed to the extent that accused shall have to pay Rs.2,10,000/-
(Two Lac Ten Thousand Only) and compensation to the tune of Rs.1,50,000/- (Rs. One Lac Fifty Thousand Only) to the complaint within two months from the date of passing of this judgment, else she shall have to undergo rigorous imprisonment of one year.
19. Trial Court be informed accordingly.
(Anand Pathak) Judge ms/-
MADHU SOODAN PRASAD 2020.02.29 16:31:02 -08'00'