Himachal Pradesh High Court
Jagdev Singh vs Sudhir Nichal on 15 December, 2023
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA Cr. Appeal No. 138 of 2011 Reserved on: 06.11.2023 .
Date of Decision: 15th December, 2023 Jagdev Singh ....Appellant/Complainant Versus Sudhir Nichal of ....Respondent/Accused.
Coram Hon'ble Mr Justice Rakesh Kainthla, Judge.
rt Whether approved for reporting? Yes For the Appellant : Mr. N.K. Thakur, Senior Advocate /Complainant with Mr Karan Veer Singh, Advocate.
For the Respondent/ : Mr. T.S. Chauhan, Advocate. Accused Rakesh Kainthla,Judge.
The present appeal is directed against the judgment dated 31.03.2011, passed by learned Judicial Magistrate First Class, Court No. IV, Una, District Una, H.P., vide which the complaint filed by the appellant (complainant before the learned Trial Court) was dismissed and the respondent (accused before the learned Trial Court) was acquitted (Parties shall hereinafter be referred to Whether reporters of the local papers may be allowed to see the judgment? Yes ::: Downloaded on - 16/12/2023 20:32:13 :::CIS 2 in the same manner as they were arrayed before the learned Trial Court for convenience).
.
2. Briefly stated, the facts giving rise to the present appeal are that the complainant filed a complaint before the learned Trial Court against the accused for the commission of an offence punishable under Section 138 of the Negotiable of Instruments Act, 1881 and Section 420 of IPC. It was asserted that the father of the complainant is suffering from paralysis. He sold rt his vehicle i.e. Tata Sumo bearing registration no. HP-20A-4196 to Surinder Singh for consideration of ₹ 2,10,000/- in April, 2005.
Surinder Singh paid a sum of ₹ 70,000/- in cash and got his vehicle financed for ₹ 1,40,000/- with M/s Chadha Associates through its Proprietor Suddhir Nischal, the present accused. The accused paid a sum of ₹ 1,10,000/- through cheque. He also issued a cheque for ₹46,000/- (Rupees 40,000/- Principal + Rupees 6000/- interest) bearing Cheque No. 352713, dated 20.8.2005 of Oriental Bank of Commerce, Una in favour of the complainant.
The complainant deposited the cheque for collection with his banker. However, the cheque was dishonoured vide memo dated 05.09.2005 with an endorsement "Insufficient Funds". The ::: Downloaded on - 16/12/2023 20:32:13 :::CIS 3 complainant served a legal notice dated 15.09.2005, upon the accused, which was received by him on 16.09.2005. The notice .
was issued to the accused to make the payment within 15 days from the date of its receipt. However, the accused failed to pay the amount. Hence, the complaint was filed to take action against the accused.
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3. The learned Trial Court recorded the preliminary evidence and found sufficient reasons to summon the accused.
rt When the accused appeared before the learned Trial Court, a notice of accusation was put to him for the commission of an offence punishable under Section 138 of the Negotiable Instruments Act. The accused pleaded not guilty and claimed to be tried.
4. The complainant examined Hem Chand (CW-1), Sohan Singh (CW-2), himself (CW-3), Des Raj (CW-4), and Surinder (CW-5) and closed the evidence.
5. The accused in his statement recorded under Section 313 of Cr.P.C. denied the case of the complainant except that he had issued a cheque. He stated that he was not the Proprietor of Chadha Associates and that he was falsely implicated. He stated ::: Downloaded on - 16/12/2023 20:32:13 :::CIS 4 that he wanted to lead defence evidence. However, he did not provide any evidence and closed the evidence on 04.01.2011.
.
6. The learned Trial Court held that no agreement was proved to establish that the accused was to pay some amount to the complainant's father. The complainant admitted in his cross-
examination that the balance amount of ₹46,000/- was to be paid of by Surinder Singh and he had no concern with the accused. The complainant admitted that Surinder Singh was to make the rt payment after getting the vehicle financed, which means that the amount was to be paid by Surinder Singh and not by the accused.
The complainant's father stated that the accused paid him an amount of ₹1,00,000/- in cash, which is contrary to the complaint, in which it was mentioned that ₹1,10,000/- was paid by cheque. The accused was under a legal obligation to pay the amount; therefore, the complaint was dismissed.
7. Feeling aggrieved and dissatisfied with the judgment passed by the learned Trial Court, the present appeal has been filed asserting that the learned Trial Court erred in acquitting the accused. It was duly established that the accused had issued a cheque for ₹46,000/- in the discharge of his legal liability. The ::: Downloaded on - 16/12/2023 20:32:13 :::CIS 5 defence raised by the accused that he had not financed the whole amount andthat the money was to be paid by Surinder Singh was .
not established. Surinder Singh admitted that he had purchased the vehicle and got the vehicle financed from the accused. The learned Trial Court ignored this evidence. The accused admitted the issuance of the cheque and there was a presumption of of consideration attached to the cheque. The learned Trial Court had erred in holding that the version of the complainant became rt doubtful due to the statement of his father. Therefore, it was prayed that the present appeal be allowed and the judgment passed by the learned Trial Court be set aside.
8. I have heard Mr. N.K. Thakur, learned Senior Counsel assisted by Mr Karan Veer Singh, Advocate for the appellant/complainant and Mr T.S.Chauhan, learned counsel for the respondent/accused.
9. Mr. N. K. Thakur, learned Senior Counsel for the appellant/complainant submitted that the accused had admitted the issuance of the cheque;therefore, a presumption of consideration applied to the present case. The learned Trial Court erred in ignoring this presumption. The accused did not ::: Downloaded on - 16/12/2023 20:32:13 :::CIS 6 provideany evidence to rebut the presumption. The version of the complainant was duly corroborated by Surinder Singh, who .
proved that the accused had financed the vehicle;therefore, he prayed that the present appeal be allowed and judgment passed by the learned Trial Court be set aside.
10. Mr T.S.Chauhan, learned Counsel for the of respondent/accused supported the judgment passed by the learned Trial Court. He submitted that the burden lies upon the rt complainant to establish the existence of legally enforceable debt or other liability. The father of the complainant admitted that the accused had no liability towards him orthe complainant. The vehicle was sold to Surinder Singh. The learned Trial Court had rightly held that only Surinder Singh is liable to pay the amount to the complainant or his father. The view taken by the learned Trial Court was a reasonable one, which cannot be interfered with in an appeal against acquittal. Hence, he prayed that the appeal be dismissed.
11 I have given considerable thought to the rival submissions at the bar and have gone through the records carefully.
::: Downloaded on - 16/12/2023 20:32:13 :::CIS 712. The present appeal has been filed against a judgment of acquittal. The Hon'ble Supreme Court laid down the .
parameters of deciding an appeal against acquittal in Jafarudheen v. State of Kerala, (2022) 8 SCC 440, as under:-
"Scope of Appeal filed against the Acquittal:
25. While dealing with an appeal against acquittal by invoking Section 378 of the Cr.PC, the Appellate Court of has to consider whether the Trial Court's view can be termed as a possible one, particularly when evidence on record has been analyzed. The reason is that an order of acquittal adds up to the presumption of rt innocence in favour of the accused. Thus, the Appellate Court has to be relatively slow in reversing the order of the Trial Court rendering acquittal.
Therefore, the presumption in favour of the accused does not get weakened but only strengthened. Such a double presumption that enures in favour of the accused has to be disturbed only by thorough scrutiny on the accepted legal parameters."
13. This position was reiterated in Siju Kurian versus State of Karnataka 2023 online SCC 429, wherein it was held:-
"15. One of the main contentions raised by the learned counsel appearing for the appellant is to the effect that the High Court ought not to have interdicted with the judgment of the acquittal passed by the Trial Court and only in the event of the judgment of the Trial court was riddled with perversity and the view taken by the Trial Court was not a possible view, same could have been reversed by relying upon the judgment of this Court in case of Murugesan V. State through the Inspector of police(2012) 10 SCC 383 whereunder it came to be held ::: Downloaded on - 16/12/2023 20:32:13 :::CIS 8 as follows:
"33. The expressions "erroneous", "wrong"
and "possible" are defined in the Oxford English Dictionary in the following terms:
.
"erroneous.-- wrong; incorrect.
wrong.--(1) not correct or true,
mistaken.
(2) unjust, dishonest, or
immoral.
possible.--(1) capable of existing,
of
happening, or being achieved.
(2) that may exist or happen,
but that is not certain or probable."
34. It will be necessary for us to emphasize that rt a possible view denotes an opinion, which can exist or be formed irrespective of the correctness or otherwise of such an opinion. A view taken by a court lower in the hierarchical structure may be termed as erroneous or wrong by a superior court upon a mere disagreement.
But such a conclusion of the higher court would not take the view rendered by the subordinate court outside the arena of a possible view. The correctness or otherwise of any conclusion reached by a court has to be tested on the basis of what the superior judicial authority perceives to be the correct conclusion. A possible view, on the other hand, denotes a conclusion, which can reasonably be arrived at regardless of the fact where it is agreed upon or not by the higher court. The fundamental distinction between the two situations has to be kept in mind. So long as the view taken by the trial court can be reasonably formed, regardless of whether the High Court agrees with the same or not, the view taken by the trial court cannot be interdicted and that of the ::: Downloaded on - 16/12/2023 20:32:13 :::CIS 9 High Court supplanted over and above the view of the trial court."
16. It need not be restated that it would be open for the High Court to re-apprise the evidence and .
conclusions drawn by the Trial Court and in the case of the judgment of the trial court being perverse that is contrary to the evidence on record, then in such circumstances the High Court would be justified in interfering with the findings of the Trial Court and/or reversing the finding of the Trial Court. In GaminiBalaKoteswara Rao v. State of Andhra of Pradesh (2009) 10 SCC 636: AIR 2010 SC 589 it has been held by this Court as under:
"14. We have considered the arguments advanced and heard the matter at great length. rt It is true, as contended by Mr Rao, that interference in an appeal against an acquittal recorded by the trial court should be rare and in exceptional circumstances. It is, however, well settled by now that it is open to the High Court to reappraise the evidence and conclusions drawn by the trial court but only in a case when the judgment of the trial court is stated to be perverse. The word "perverse" in terms as understood in law has been defined to mean "against the weight of evidence". We have to see accordingly as to whether the judgment of the trial court which has been found perverse by the High Court was in fact so.
17. The Appellate Court may reverse the order of acquittal in the exercise of its powers and there is no indication in the Code of any limitation or restriction having been placed on the High Court in the exercise of its power as an Appellate court. No distinction can be drawn as regards the power of the High Court in dealing with an appeal, between an appeal from an order of acquittal and an appeal from a conviction.
::: Downloaded on - 16/12/2023 20:32:13 :::CIS 10The Code of Criminal Procedure does not place any fetter on the exercise of the power to review at large the evidence upon which the order of acquittal was founded and to conclude that upon that evidence the .
order of acquittal should be reversed.
18. In the case of Sheo Swarup v. King Emperor AIR 1934 PC 227, it has been held by the Privy Council as under:
But in exercising the power conferred by the Code and before reaching its conclusions upon fact, the High Court should and will always give of proper weight and consideration to such matters as:
rt 1) The views/opinion of the trial judge as to the credibility of the witnesses;
2) The presumption of innocence in favour of the accused;
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.
19. This Court has time and again reiterated the powers of the Appellate Court while dealing with the appeal against an order of acquittal and laid down the general principles in the matter of Chandrappa v. State of Karnataka (2007) 4 SCC 415 to the following effect:
"42. From the above decisions, in our considered view, the following general principles regarding the powers of the Appellate Court while dealing with an appeal against an order of acquittal emerge:::: Downloaded on - 16/12/2023 20:32:13 :::CIS 11
(1) An Appellate court has full power to review, reappreciate and reconsider the evidence upon which the order of acquittal is founded.
.
(2) The Criminal Procedure Code, 1973 puts no limitation, restriction or condition on the exercise of such power and an Appellate court on the evidence before it may reach its own conclusion, both on questions of fact and law.
(3) Various expressions, such as, of "substantial and compelling reasons", "good and sufficient grounds", "very strong circumstances", "distorted conclusions", "glaring mistakes", etc. rt are not intended to curtail extensive powers of an Appellate court in an appeal against acquittal. Such phraseologies are more in the nature of "flourishes of language" to emphasise the reluctance of an Appellate court to interfere with acquittal than to curtail the power of the court to review the evidence and to come to its own conclusion.
(4) An Appellate court, however, must bear in mind that in case of acquittal, there is a double presumption in favour of the accused. Firstly, the presumption of innocence is available to him under the fundamental principle of criminal jurisprudence that every person shall be presumed to be innocent unless he is proved guilty by a competent court of law. Secondly, the accused having secured his acquittal, the presumption of his innocence is further reinforced, ::: Downloaded on - 16/12/2023 20:32:13 :::CIS 12 reaffirmed and strengthened by the trial court.
(5) If two reasonable conclusions are possible on the basis of the evidence on .
record, the Appellate court should not disturb the finding of acquittal recorded by the trial court."
14. The present appeal has to be adjudicated in the light of the judgments of the Hon'ble Supreme Court.
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15. The accused admitted in his statement recorded under Section 313 of Cr.P.C. that he had issued the cheque, thus, the rt signatures of the accused on the cheque were not disputed. It was laid down by this Court in Naresh Verma vs. Narinder Chauhan 2020(1) Shim. L.C. 398 that where the accused had not disputed his signatures on the cheque, the Court has to presume that it was issued in discharge of legal liability and the burden would shift upon the accused to rebut the presumption. It was observed:-
"8. Once signatures on the cheque are not disputed, the plea with regard to the cheque having not been issued towards discharge of lawful liability, rightly came to be rejected by learned Courts below. Reliance is placed upon Hiten P. Dalal v. Bartender Nath Bannerji, 2001 (6) SCC 16, wherein it has been held as under:
"The words 'unless the contrary is proved' which occur in this provision make it clear that the presumption has to be rebutted by 'proof' and not by a bare explanation which is merely plausible. A fact is said to be proved when its ::: Downloaded on - 16/12/2023 20:32:13 :::CIS 13 existence is directly established or when upon the material before it the Court finds its existence to be so probable that a reasonable man would act on the supposition that it exists. Unless, therefore, the explanation is supported by .
proof, the presumption created by the provision cannot be said to be rebutted......"
9. S.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 nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.
16. Similar is the judgment in Basalingappa vs. of Mudibasappa 2019 (5) SCC 418, wherein it was held:
24. Applying the proposition of law as noted above, in the rt facts of the present case, it is clear that the signature on the cheque having been admitted, a presumption shall be raised under Section 139 that the cheque was issued in discharge of debt or liability.
17. This position was reiterated in M/S Kalamani Tex and another Versus P. Balasubramanian 2021 (5) SCC 283, wherein it was held:
"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 crystallized by this Court in Rohitbhai Jivanlal Patel v. State of Gujarat (2019) 18 SCC 106,
18 in the following words:
::: Downloaded on - 16/12/2023 20:32:13 :::CIS 14"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 of 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 rt the source of funds for advancing loan to the appellant-accused....."
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 an 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.
16. No doubt, and as correctly argued by senior counsel for the appellants, the presumptions raised under Section 118 and Section 139 are rebuttable in nature. As held in MS Narayana Menon v. State of Kerela (2006) 6 SCC 39, 32, which was relied upon in Basalingappa (supra), a probable defence needs to be raised, which must meet the standard of "preponderance of probability", and not a mere possibility. These principles were also affirmed in the case of Kumar Exports (supra), wherein it was further held that bare denial of passing of consideration would not aid the case of the accused."
::: Downloaded on - 16/12/2023 20:32:13 :::CIS 1518. This presumption was explained by the Hon'ble Supreme Court in Triyambak S. Hegde Versus Sripad 2022 (1) SCC .
742 as under:
11. From the facts arising in this case and the nature of the rival contentions, the record would disclose that the signature on the documents at Exhibits P-6 and P-2 is not disputed. Exhibit P-2 is the dishonoured cheque based on which the complaint was filed. From the evidence tendered of before the JMFC, it is clear that the respondent has not disputed the signature on the cheque. If that be the position, as noted by the courts below a presumption would arise under Section 139 in favour of the appellant who was rt the holder of the cheque. Section 139 of the N.I. Act reads as hereunder:-
"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."
12 Insofar as the payment of the amount by the appellant in the context of the cheque having been signed by the respondent, the presumption for the passing of the consideration would arise as provided under Section 118(a) of N.I. Act which reads as hereunder: -
"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, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration."::: Downloaded on - 16/12/2023 20:32:13 :::CIS 16
13. The above-noted provisions are explicit to the effect that such presumption would remain until the contrary is proved. The learned counsel for the appellant in that regard has relied on the decision of this Court in K. Bhaskaran vs. .
Sankaran Vaidhyan Balan & Anr., 1999 (7) SCC 510 wherein it is held as hereunder:
"9. As the signature in the cheque is admitted to be that of the accused, the presumption envisaged in Section 118 of the Act can legally be inferred that the cheque was made or drawn for consideration on the date on which the cheque bears. Section 139 of the Act of enjoins on the Court to presume that the holder of the cheque received it for the discharge of any debt or liability. The burden was on the accused to rebut the aforesaid presumption. The Trial Court was not rt persuaded to rely on the interested testimony of DW- 1 to rebut the presumption. The said finding was upheld by the High Court. It is not now open to the accused to contend differently on that aspect."
14. The learned counsel for the respondent has however referred to the decision of this Court in Basalingappa vs. Mudibasappa, 2019 (5) SCC 418 wherein it is held as hereunder: -
"25. We having noticed the ratio laid down by this Court in the above cases on Sections 118 (a) and 139, we now summarise the principles enumerated by this Court in the following manner:
25.1. Once the execution of the cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.
25.2. The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of the preponderance of probabilities.::: Downloaded on - 16/12/2023 20:32:13 :::CIS 17
25.3. To rebut the presumption, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence.
.
Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.
25.4. That it is not necessary for the accused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a of persuasive burden.
25.5. It is not necessary for the accused to come into the witness box to support his defence. rt
26. Applying the proposition of law as noted above, in the facts of the present case, it is clear that the signature on the cheque having been admitted, a presumption shall be raised under Section 139 that the cheque was issued in discharge of debt or liability. The question to be looked into is as to whether any probable defence was raised by the accused. In cross-examination of PW1, when the specific question was put that the cheque was issued in relation to a loan of ₹25,000 taken by the accused, PW1 said that he does not remember. PW1 in his evidence admitted that he retired in 1997 on which date he received a monetary benefit of ₹8 lakhs, which was encashed by the complainant. It was also brought in the evidence in the evidence that in the year 2010, the complainant entered into a sale agreement for which he paid an amount of ₹4,50,000 to Balana Gouda towards sale consideration. Payment of ₹4,50,000 being admitted in the year 2010 and a further payment of a loan of ₹ 50,000 with regard to which Complaint No.119 of 2012 was filed by the complainant, copy of which complaint was also filed as Ext. D-2, there was a burden on the complainant to prove his financial capacity. In the years 2010-2011, as per the own case of the complainant, he made a payment of ₹18 ::: Downloaded on - 16/12/2023 20:32:13 :::CIS 18 lakhs. During his cross-examination, when the financial capacity to pay ₹ 6 lakhs to the accused was questioned, there was no satisfactory reply given by the complainant. The evidence on record, thus, is a probable defence on .
behalf of the accused, which shifted the burden on the complainant to prove his financial capacity and other facts."
15. In that light, it is contended that the very materials produced by the appellant and the answers relating to lack of knowledge of property details by PW-1 in his cross- examination would indicate that the transaction is of doubtful and no evidence is tendered to indicate that the amount was paid. In such an event, it was not necessary for the respondent to tender rebuttal evidence but the case put forth would be sufficient to indicate that the rt respondent has successfully rebutted the presumption.
16. On the position of law, the provisions referred to in Sections 118 and 139 of N.I. Act as also the enunciation of law as made by this Court needs no reiteration as there is no ambiguity whatsoever. In, Basalingappa vs. Mudibasappa (supra) relied on by the learned counsel for the respondent, though on facts the ultimate conclusion therein was against raising presumption, the facts and circumstances are entirely different as the transaction between the parties as claimed in the said case is peculiar to the facts of that case where the consideration claimed to have been paid did not find favour with the Court keeping in view the various transactions and extent of the amount involved. However, the legal position relating to presumption arising under Sections 118 and 139 of N.I. Act on a signature being admitted has been reiterated. Hence, whether there is a rebuttal or not would depend on the facts and circumstances of each case.
19. This position was reiterated in Tedhi Singh vs. Narayan Dass Mahant 2022 (6) SCC 735, wherein it was held:
::: Downloaded on - 16/12/2023 20:32:13 :::CIS 197. It is true that this is a case under Section 138 of the Negotiable Instruments Act. Section 139 of the N.I. Act provides that the Court shall presume that the holder of a cheque received the cheque of the nature referred to in .
Section 138 for the discharge, in whole or in part, of any debt or other liability. This presumption, however, is expressly made subject to the position being proved to the contrary. In other words, it is open to the accused to establish that there is no consideration received. It is in the context of this provision that the theory of 'probable defence' has grown. In an earlier judgment, in fact, which of has also been adverted to in Basalingappa (supra), this Court notes that Section 139 of the N.I. Act is an example of reverse onus [see (2010) 11 SCC 441). It is also true that this Court has found that the accused is not expected to rt discharge an unduly high standard of proof. It is accordingly that the principle has developed that all which the accused needs to establish is a probable defence. As to whether a probable defence has been established is a matter to be decided on the facts of each case on the conspectus of evidence and circumstances that exist.
20. Similar is the judgment in P Rasiya vs. Abdul Nazeer 2022 (3) Crimes 343, wherein it was observed:
"As per Section 139 of the N.I. Act, 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 discharge, in whole or in part, of any debt or other liability. Therefore, once the initial burden is discharged by the Complainant that the cheque was issued by the accused and the signature and the issuance of the cheque is not disputed by the accused, in that case, the onus will shift upon the accused to prove the contrary that the cheque was not for any debt or other liability. The presumption under Section 139 of the N.I. Act is a statutory presumption and thereafter, once it is presumed that the cheque is issued in whole or in part of any debt or other liability which is in ::: Downloaded on - 16/12/2023 20:32:13 :::CIS 20 favour of the Complainant/holder of the cheque, in that case, it is for the accused to prove the contrary."
21. This position was reiterated in Rajesh Jain v. Ajay Singh, .
(2023) 10 SCC 148: 2023 SCC OnLine SC 1275, wherein it was observed at page 161:
33. The NI Act provides for two presumptions: Section 118 and Section 139. Section 118 of the Act inter alia directs that it shall be presumed until the contrary is proved, that every of negotiable instrument was made or drawn for consideration. Section 139 of the Act stipulates that "unless the contrary is proved, it shall be presumed, that the holder of the cheque received the cheque, for the discharge of, rt whole or part of any debt or liability". It will be seen that the "presumed fact" directly relates to one of the crucial ingredients necessary to sustain a conviction under Section
138. [The rules discussed hereinbelow are common to both the presumptions under Section 139 and Section 118 and are hence, not repeated--reference to one can be taken as reference to another]
34. Section 139 of the NI Act, which takes the form of a "shall presume" clause is illustrative of a presumption of law. Because Section 139 requires that the Court "shall presume" the fact stated therein, it is obligatory on the Court to raise this presumption in every case where the factual basis for the raising of the presumption had been established. But this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary as is clear from the use of the phrase "unless the contrary is proved".
35. The Court will necessarily presume that the cheque had been issued towards the discharge of a legally enforceable debt/liability in two circumstances. Firstly, when the drawer of the cheque admits issuance/execution of the cheque and secondly, in the event where the complainant proves ::: Downloaded on - 16/12/2023 20:32:13 :::CIS 21 that the cheque was issued/executed in his favour by the drawer. The circumstances set out above form the fact(s) which bring about the activation of the presumptive clause.
[Bharat Barrel & Drum Mfg. Co. v. Amin Chand .
Payrelal [Bharat Barrel & Drum Mfg. Co. v. Amin Chand Payrelal, (1999) 3 SCC 35] ]
36. Recently, this Court has gone to the extent of holding that presumption takes effect even in a situation where the accused contends that a blank cheque leaf was voluntarily signed and handed over by him to the complainant. [Bir Singh v. Mukesh Kumar [Bir Singh v. Mukesh Kumar, (2019) 4 of SCC 197 : (2019) 2 SCC (Civ) 309 : (2019) 2 SCC (Cri) 40] ]. Therefore, the mere admission of the drawer's signature, without admitting the execution of the entire contents in the cheque, is now sufficient to trigger the presumption.
rt
37. As soon as the complainant discharges the burden to prove that the instrument, say a cheque, was issued by the accused for discharge of debt, the presumptive device under Section 139 of the Act helps shifting the burden on the accused. The effect of the presumption, in that sense, is to transfer the evidential burden on the accused of proving that the cheque was not received by the Bank towards the discharge of any liability. Until this evidential burden is discharged by the accused, the presumed fact will have to be taken to be true, without expecting the complainant to do anything further.
38.John Henry Wigmore [John Henry Wigmore and the Rules of Evidence: The Hidden Origins of Modern Law] on Evidence states as follows:
"The peculiar effect of the presumption of law is merely to invoke a rule of law compelling the Jury to reach the conclusion in the absence of evidence to the contrary from the opponent but if the opponent does offer evidence to the contrary (sufficient to satisfy the Judge's requirement of some evidence), the presumption 'disappears as a rule of law and the case is in the Jury's hands free from any rule'."::: Downloaded on - 16/12/2023 20:32:13 :::CIS 22
39. The standard of proof to discharge this evidential burden is not as heavy as that usually seen in situations where the prosecution is required to prove the guilt of an accused. The accused is not expected to prove the non-
.
existence of the presumed fact beyond reasonable doubt.
The accused must meet the standard of "preponderance of probabilities", similar to a defendant in a civil proceeding. [Rangappa v. Sri Mohan [Rangappa v. Sri Mohan, (2010) 11 SCC 441 : (2010) 4 SCC (Civ) 477 : (2011) 1 SCC (Cri) 184 : AIR 2010 SC 1898] ]
40. In order to rebut the presumption and prove to the of contrary, it is open to the accused to raise a probable defence wherein the existence of a legally enforceable debt or liability can be contested. The words "until the contrary is proved" occurring in Section 139 do not mean that the rt accused must necessarily prove the negative that the instrument is not issued in discharge of any debt/liability but the accused has the option to ask the Court to consider the non-existence of debt/liability so probable that a prudent man ought, under the circumstances of the case, to act upon the supposition that debt/liability did not exist.
[Basalingappa v. Mudibasappa [Basalingappa v. Mudibasappa , (2019) 5 SCC 418 : (2019) 2 SCC (Cri) 571 : AIR 2019 SC 1983] ; see also Kumar Exports v. Sharma Carpets [Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513 : (2009) 1 SCC (Civ) 629 : (2009) 1 SCC (Cri) 823] ]
41. In other words, the accused is left with two options. The first option--of proving that the debt/liability does not exist--is to lead defence evidence and conclusively establish with certainty that the cheque was not issued in discharge of a debt/liability. The second option is to prove the non-existence of debt/liability by a preponderance of probabilities by referring to the particular circumstances of the case. The preponderance of probability in favour of the accused's case may be even fifty-one to forty-nine and arising out of the entire circumstances of the case, which includes: the complainant's version in the original complaint, the case in the legal/demand notice, ::: Downloaded on - 16/12/2023 20:32:13 :::CIS 23 complainant's case at the trial, as also the plea of the accused in the reply notice, his Section 313CrPC statement or at the trial as to the circumstances under which the promissory note/cheque was executed. All of them can raise .
a preponderance of probabilities justifying a finding that there was "no debt/liability". [Kumar Exports v. Sharma Carpets [Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513 :
(2009) 1 SCC (Civ) 629 : (2009) 1 SCC (Cri) 823] ]
22. The accused did not lead any evidence to rebut the presumption and has relied upon the statement made by him of under Section 313 Cr.P.C. It was held in Sumeti Vij vs. Paramount Tech Fab Industries AIR 2021 SC 1281 that the accused has to lead rt defence evidence to rebut the presumption and mere denial in his statement under section 313 of Cr.P.C. is not sufficient to rebut the presumption. It was observed:
"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 the Act. The statement of the accused recorded under Section 313 of the Code is not 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."
(Emphasis supplied)"
23. Therefore, the statement of the accused under Section 313 of Cr.P.C. is insufficient to rebut the presumption.::: Downloaded on - 16/12/2023 20:32:13 :::CIS 24
24. It was submitted that the accused has relied upon the cross-examination of the complainant's witnesses to rebut the .
presumption and the learned Trial Court had rightly held that the existence of legally and forcible debt or legal liability was not proved. It was not necessary for the accused to examine any evidence to rebut the presumption.There can be no dispute with of the proposition that the accused can rely upon the cross-
examination of the complainant and his witnesses to rebut the rt presumption attached to the cheque. However, in the present case, the learned Trial Court had not held that the cross-
examination of witnesses was sufficient to rebut the presumption but the learned Trial Court held that the version of the complainant was not reliable due to the discrepancy in the amount mentioned by the complainant's father and the complainant. It is necessary to refer to the testimonies of the witnesses to determine whether the accused had succeeded in rebutting the presumption attached to the cheque and the learned Trial Court had rightly recorded that the discrepancy in the amount was sufficient to rebut the presumption.::: Downloaded on - 16/12/2023 20:32:13 :::CIS 25
25. Desh Raj (CW-4) stated that he had sold the Tata Sumo to Surinder Singh, who paid him₹70,000/- in cash. He (Surinder .
Singh) got the vehicle financed from Chadha Finance Company. It paid ₹1,00,000/- and issued a cheque for the remaining amount.
The cheque was issued in his name but he stated that he is a patient of paralysis and the cheque should be issued in the name of of his son. The cheque was dishonoured. He stated in his cross-
examination that he came to the Court himself. He denied that he rt had encashed the cheque issued in his name by the accused. He denied that he got a cheque issued in the name of his son by practising fraud. He admitted that Surinder Singh had financed the vehicle sold to him. He did not know that the Finance Company had not approved the transaction. He denied that he and Surinder falsely implicated the accused. He denied that the transaction was complete with Surinder Singh. He admitted that payment was to be made by Surinder Singh after getting the vehicle financed. He denied that the whole of the amount was received and when the accused demanded the cheque, the complainant said that the cheque was misplaced. He denied that a false case was made against the accused.
::: Downloaded on - 16/12/2023 20:32:13 :::CIS 2626. It is apparent from the cross-examination of the witness that the accused did not dispute his liability because it .
was suggested to him that a cheque was issued in his name and he had got the same encashed. Thus, the liability of the accused to make the payment to him stands admitted.
27. It was laid down by the Hon'ble Supreme Court in Balu of Sudam Khalde v. State of Maharashtra, 2023 SCC OnLine SC 355 that the suggestion put to the witness can be taken into consideration rt while determining the guilt or innocence of the accused. It was observed: -
"34. According to the learned counsel, such suggestions could be a part of the defence strategy to impeach the credibility of the witness. The proof of guilt required of the prosecution does not depend on the suggestion made to a witness.
35. In Tarun Bora alias Alok Hazarika v. State of Assam reported in 2002 Cri. LJ 4076, a three-judge Bench of this Court was dealing with an appeal against the order passed by the Designated Court, Guwahati, in the TADA Sessions case wherein the appellant was convicted under Section 365 of the IPC read with Section 3(1) and 3(5) of the Terrorists and Disruptive Activities (Prevention) Act, 1987.
36. In the aforesaid case, this Court, while considering the evidence on record took note of a suggestion which was put to one of the witnesses and considering the reply given by the witness to the suggestion put by the accused, arrived at the conclusion that the presence of the accused was admitted. We quote with profit the following observations ::: Downloaded on - 16/12/2023 20:32:13 :::CIS 27 made by this Court in paragraphs 15, 16 and 17 as under:
"15. The witness further stated that during the assault, the assailant accused him of giving information to the army about the United Liberation Front of Assam .
(ULFA). He further stated that on the third night, he was carried away blindfolded on a bicycle to a different place and when his eyes were unfolded, he could see his younger brother-KumudKakati (P.W.-2) and his wife Smt. PremaKakati (P.W.-3). The place was Duliapather, which is about 6-7 km. away from his village Sakrahi. The witness identified the appellant-
of Tarun Bora and stated that it is he who took him in an ambassador car from the residence of Nandeswar Bora on the date of the incident.
16. In cross-examination the witness stated as under:
rt "Accused-Tarun Bora did not blind my eyes nor he assaulted me."
17. This part of the cross-examination is suggestive of the presence of accusedTarun Bora in the whole episode. This will clearly suggest the presence of the accused-Tarun Bora as admitted. The only denial is the accused did not participate in blind-folding the eyes of the witness nor assaulted him."
37. In Rakesh Kumar alias Babli v. State of Haryana reported in (1987) 2 SCC 34, this Court was dealing with an appeal against the judgment of the High Court affirming the order of the Sessions Judge whereby the appellant and three other persons were convicted under Section 302 read with Section 34 of the IPC. While re-appreciating the evidence on record, this Court noticed that in the cross-examination of PW 4, Sube Singh, a suggestion was made with regard to the colour of the shirt worn by one of the accused persons at the time of the incident. This Court taking into consideration the nature of the suggestion put by the defence and the reply arrived at the conclusion that the presence of the accused namely Dharam Vir was established on the spot at the time of occurrence. We quote ::: Downloaded on - 16/12/2023 20:32:13 :::CIS 28 the following observations made by this Court in paragraphs 8 and 9 as under:
"8. PW 3, Bhagat Singh, stated in his examination-in- chief that he had identified the accused at the time of .
occurrence. But curiously enough, he was not cross-
examined as to how and in what manner he could identify the accused, as pointed out by the learned Sessions Judge. No suggestion was also given to him that the place was dark and that it was not possible to identify the assailants of the deceased.
9. In his cross-examination, PW 4, Sube Singh, stated of that the accused Dharam Vir was wearing a shirt of white colour. It was suggested to him on behalf of the accused that Dharam Vir was wearing a shirt of cream colour. In answer to that suggestion, PW 4 said: "It is rt not correct that Dharam Vir accused was wearing a shirt of a cream colour and not a white colour at that time." The learned Sessions Judge has rightly observed that the above suggestion at least proves the presence of accused Dharam Vir, on the spot at the time of occurrence."
38. Thus, from the above, it is evident that the suggestion made by the defence counsel to a witness in the cross- examination if found to be incriminating in nature in any manner would definitely bind the accused and the accused cannot get away on the plea that his counsel had no implied authority to make suggestions in the nature of admissions against his client.
39. Any concession or admission of a fact by a defence counsel would definitely be binding on his client, except the concession on the point of law. As a legal proposition, we cannot agree with the submission canvassed on behalf of the appellants that an answer by a witness to a suggestion made by the defence counsel in the cross-examination does not deserve any value or utility if it incriminates the accused in any manner."
::: Downloaded on - 16/12/2023 20:32:13 :::CIS 2928. Thus, the suggestion given to a witness can be considered while appreciating the complainant's evidence.
.
29. The learned Trial Court ignored this suggestion and the further suggestion that he had got the amount and the accused had demanded the cheque from the complainant, clearly, showing that the accused had liability and he had issued the cheque to of discharge the liability.
30. Surinder Singh (CW-5) stated that he had purchased a rt vehicle bearing registration no.HP20A-4196 from Desh Raj. He made a payment of ₹ 70,000/- to Desh Raj in cash and got the vehicle financed from Chadha Finance Company, which was being managed by the accused. The remaining amount was to be paid by the accused to the complainant. The accused issued a cheque. The amount was never received by the complainant. He stated in his cross-examination that he had purchased the vehicle for ₹2,10,000/-. He had paid₹50,000/- and got the vehicle financed for ₹1,20,000/-. No agreement was executed between the parties.
He did not have any receipt regarding the payment to the Finance Company. He denied that he had not paid the money to the Finance Company; therefore, the remaining payment was ::: Downloaded on - 16/12/2023 20:32:13 :::CIS 30 stopped. He admitted that he was liable to pay the remaining amount. He had paid the remaining amount to the accused after .
one week. He admitted that the complainant was his relative. He denied that the account was settled with the complainant and that the accused was falsely implicated.
31. It was suggested to this witness in the cross-
of examination that he had not paid the money, therefore, the accused had stopped the payment of the balance of the amount. It rt clearly shows the admission on the part of the accused that he was liable to pay the money to the complainant. The accused nowhere stated that he had stopped the payment of the cheque because the balance amount was not paid by Surinder Singh. Further, the cheque was not dishonoured due to stop payment but due to insufficient funds. This falsifies the suggestion that the accused had stopped the payment as Surinder Singh had not made the payment to him.
32. Learned Trial Court held that Desh Raj stated that ₹1,00,000/- was paid in cash, whereas the complaint mentions that a cheque of ₹ 1,10,000/- was issued. This discrepancy will not affect the liability of ₹46,000/-. Surinder Singh specifically stated ::: Downloaded on - 16/12/2023 20:32:13 :::CIS 31 that he had paid ₹70,000/- in cash and the remaining amount was financed. This was not suggested to be incorrect in the cross-
.
examination and it was suggested to him that he had not paid the money to the Finance Company. Similarly, it was suggested to Desh Raj that he had received the amount. Therefore, the fact that the accused had financed the amount was not disputed in the of cross-examinations of Desh Raj and Surinder Singh. Hence, any discrepancy regarding the amount is not sufficient to rebut the rt presumption attached to the cheque.
33. Jagdev (CW-3), stated that his father sold the vehicle bearing registration no. HP20A-4196 to Surinder Singh for ₹2,10,000/-. Some money was paid in cash and the rest of the amount was financed. The accused issued a cheque of ₹.46,000/-
in his name. The cheque was dishonoured. He stated in his cross-examination that the cheque was presented before the Oriental Bank of Commerce. He did not have any account in the Oriental Bank of Commerce. He volunteered to say that the cheque was sent from Kangra Bank for its encashment. He admitted that he had sold the vehicle to Surinder Singh. He admitted that he had nothing to do with the accused and Surinder ::: Downloaded on - 16/12/2023 20:32:13 :::CIS 32 Singh had to pay ₹.46,000/-. He admitted that the Company had not financed the whole of the amount. His father executed the .
documents in the Court. He denied that Surinder Singh had made the payment of the whole amount. He denied that the accused demanded the cheque from him. He admitted that payment was to be made by Suridner Singh after getting the vehicle financed.
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34. The learned Trial Court had relied upon the statement of the complainant to hold that Surinder Singh was to make the rt payment and the accused is not liable to make the payment. This is not acceptable. It is apparent from the evidence that the accused had financed the vehicle, which means that he had agreed to pay the amount to Surinder Singh or at his instance to the seller.
35. It was laid down by Kerala High Court in A.K. Bhaskaran vs. K.G. Sheeba and Ors. MANU/KE/5580/2019, that Section 138 of Negotiable Instruments Acts, 1881,nowhere provides that the cheque drawn should be in discharge of drawer's liability alone. It could be in discharge of "any debt or other liability". It was observed:-
"12. A cheque issued by a guarantor is also a cheque regarded by Section 138 of the N.I. Act as one being issued ::: Downloaded on - 16/12/2023 20:32:13 :::CIS 33 in discharge of legally enforceable debt. Section 138 of the N.I. Act nowhere provides that the cheque drawn should be in discharge of drawer's liability alone. It could be in discharge of "any debt or other liability". In other words, .
the presumption of consideration under Section 139 of the N.I. Act accrues to guarantor cheques also.
13. A holder of a cheque is entitled to the benefit of legal presumption under Section 118(g) of the N.I. Act that he came into possession of the instrument in due course unless it is shown to have come to the custody of the possessor by means of an offence, fraud or other unlawful of means. In this case, the accused had not even put a suggestion to P.W. 1 that the cheque came to his possession otherwise than by lawful means. When the holder becomes a payee, he could successfully prosecute rt the drawer of the cheque under Section 138 of the N.I. Act irrespective of whether or not he had a direct transaction with the drawer. Section 7 of the N.I. Act defines 'payee' as follows:
"Payee" -The person named in the instrument to whom or to whose order the money is by the instrument directed to be paid is called the "payee".
The definition does not stipulate that he should necessarily be a person having had direct dealing or financial transactions with the drawer. The 'payee' is a person to whom or to whose order money is made payable by the instrument. Payee therefore could be any person whom the drawer of the cheque may, to his choice, refer to his banker, no matter the drawer has not incurred any liability to the person named by him in the cheque. Section 138 of the N.I. Act does not demand that the drawer should have had a transaction or dealing with the payee in whose name the cheque was drawn. Therefore the accused cannot escape from the prosecution for the offence under Section 138 of the N.I. Act only because the real money transaction was between her husband and the complainant. I have already held that the probabilities of ::: Downloaded on - 16/12/2023 20:32:13 :::CIS 34 the case have indicated that the issue of Ext. P1 cheque was in discharge of her husband's liability to P.W. 1."
36. Therefore, even if the cheque is issued by a person in .
discharge of other person'sliability, the same will attract Section 138 of the N.I.Act. In the present case the accused had issued the cheque in discharge of the liability of Surinder Singh and the learned Trial Court erred in ignoring this position.
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37. It was submitted that no agreement was executed between the parties and the whole transaction is suspect.
rt This submission ignores the presumption under Section 139 of the Negotiable Instruments Act. It was laid down by the Hon'ble Supreme Court in Uttam Ram Versus Devinder Singh Hudan and another (2019) 10 SCC 287 that the complainant is not to prove the debt as in a Civil Court in view of the presumption but only to prove that the cheque was issued by the accused. It was observed:
"20. The Trial Court and the High Court proceeded as if, the appellant is to prove a debt before a civil court wherein, the plaintiff is required to prove his claim on the basis of evidence to be laid in support of his claim for the recovery of the amount due. Dishonour of a cheque carries a statutory presumption of consideration. The holder of the cheque in due course is required to prove that the cheque was issued by the accused and that when the same was presented, it was not honoured. Since there is a statutory presumption of consideration, the burden is on the accused to rebut the presumption that the cheque was issued not for ::: Downloaded on - 16/12/2023 20:32:13 :::CIS 35 any debt or other liability.
38. Therefore, the absence of any agreement will not make the case of the complainant doubtful.
.
39. Thus, the cross-examination of the complainant or his witness was insufficient to rebut the presumption and it was duly proved on record that the accused had issued a cheque in of discharge of his liability. Learned Trial Court erred in holding otherwise.
40. rt Hem Chand (CW-1) stated that the cheque(Exhibit C-1) was deposited with the bank. The cheque was dishonoured due to insufficient funds. He admitted in his cross-examination that the account of the accused was closed. It is apparent from the statement of this witness that the cheque was dishonoured due to insufficient funds, was not challenged in the cross-examination and has to be accepted as correct. It was laid down by the Hon'ble Supreme Court in Arvind Singh Versus State of Maharashtra AIR 2020 (SC) 2451 that where the testimony of a witness is not challenged in the cross-examination, the same is to be accepted as correct. It was observed:
[57] The House of Lords in a judgment reported as Browne v. Dunn 1894 6 Reports 67 (HL) considered the principles of ::: Downloaded on - 16/12/2023 20:32:13 :::CIS 36 appreciation of evidence. Lord Chancellor Herschell, held that it is absolutely essential to the proper conduct of a cause, where it is intended to suggest that a witness if not speaking the truth on a particular point, direct his attention .
to the fact by some questions put in cross-examination showing that imputation is intended to be made, and not to take his evidence and pass it by as a matter altogether unchallenged. It was held as under:
"Now, my Lords, I cannot help saying that it seems to me to be absolutely essential to the proper conduct of a cause, where it is intended to suggest that a witness is of not speaking the truth on a particular point, to direct his attention to the fact by some questions put in cross- examination showing that that imputation is intended to be made, and not to take his evidence and pass it by rt as a matter altogether unchallenged, and then, when it is impossible for him to explain, as perhaps he might have been able to do if such questions had been put to him, the circumstances which it is suggested indicate that the story he tells ought not to be believed, to argue that he is a witness unworthy of credit. My Lords, I have always understood that if you intend to impeach a witness you are bound, whilst he is in the box, to give him an opportunity of making any explanation which is open to him; and, as it seems to me, that is not only a rule of professional practice in the conduct of a case but is essential to fair play and fair dealing with witnesses. Sometimes reflections have been made upon excessive cross-examination of witnesses, and it has been complained of as undue, but it seems to me that cross- examination of a witness which errs in the direction of excess may be far more fair to him than to leave him without cross-examination, and afterwards, to suggest that he is not a witness of truth, I mean upon a point on which it is not otherwise perfectly clear that he has had full notice beforehand that there is an intention to impeach the credibility of the story which he is telling."::: Downloaded on - 16/12/2023 20:32:13 :::CIS 37
[58] Lord Halsbury, in a separate but concurring opinion, held as under:
"My Lords, with regard to the manner in which the evidence was given in this case, I cannot too heartily .
express my concurrence with the Lord Chancellor as to the mode in which a trial should be conducted. To my mind, nothing would be more absolutely unjust than not to cross-examine witnesses upon evidence which they have given, so as to give them notice, and to give them an opportunity of explanation, and an opportunity very often to defend their own character, of and, not having given them such an opportunity, to ask the jury afterwards to disbelieve what they have said, although not one question has been directed either to their credit or to the accuracy of the facts they have rt deposed to."
[59] This Court in a judgment reported as State of U.P. v. Nahar Singh, 1998 3 SCC 561, quoted from Browne to hold that in the absence of cross-examination on the explanation of the delay, the evidence of PW-1 remained unchallenged and ought to have been believed by the High Court. Section 146 of the Evidence Act confers a valuable right of cross-examining the witness tendered in evidence by the opposite party. This Court held as under: -
"13. It may be noted here that part of the statement of PW 1 was not cross-examined by the accused. In the absence of cross-examination on the explanation of the delay, the evidence of PW 1 remained unchallenged and ought to have been believed by the High Court. Section 138 of the Evidence Act confers a valuable right of cross-examining the witness tendered in evidence by the opposite party. The scope of that provision is enlarged by Section 146 of the Evidence Act by allowing a witness to be questioned:
(1) to test his veracity, (2) to discover who he is and what is his position in life, or ::: Downloaded on - 16/12/2023 20:32:13 :::CIS 38 (3) to shake his credit by injuring his character, although the answer to such questions might tend directly or indirectly to incriminate him or might expose or tend directly or indirectly to expose him .
to a penalty or forfeiture."
[60] This Court in a judgment reported as Muddasani Venkata Narsaiah (Dead) through LRs. v. Muddasani Sarojana, 2016 12 SCC 288 laid down that the party is obliged to put his case in cross-
examination of witnesses of the opposite party. The rule of putting one's version in cross-examination is one of essential justice and not merely a technical one. It was held as under:
of "15. Moreover, there was no effective cross-
examination made on the plaintiff's witnesses with respect to the factum of execution of the sale deed, PW 1 and PW 2 have not been cross-examined as to the rt factum of execution of the sale deed. The cross- examination is a matter of substance not of procedure one is required to put one's version in the cross- examination of the opponent. The effect of non-cross- examination is that the statement of the witness has not been disputed. The effect of not cross-examining the witnesses has been considered by this Court in Bhoju Mandal v. Debnath Bhagat [Bhoju Mandal v. Debnath Bhagat, 1963 AIR(SC) 1906]. This Court repelled a submission on the ground that the same was not put either to the witnesses or suggested before the courts below. A party is required to put his version to the witness. If no such questions are put the Court would presume that the witness account has been accepted as held in Chuni Lal Dwarka Nath v. Hartford Fire Insurance Co. Ltd. 1958 AIR(P&H) 440.
16. In Maroti Bansi Teli v. Radhabai [Maroti Bansi Teli v. Radhabai, 1945 AIR(Nag) 60, it has been laid down that the matters sworn to by one party in the pleadings not challenged either in pleadings or cross-examination by other party must be accepted as fully established. The High Court of Calcutta in A.E.G. Carapiet v. A.Y. Derderian ::: Downloaded on - 16/12/2023 20:32:13 :::CIS 39 1961 AIR(Cal) 359 has laid down that the party is obliged to put his case in cross-examination of witnesses of the opposite party. The rule of putting one's version in cross-examination is one of essential justice and not .
merely a technical one. A Division Bench of the Nagpur High Court in Kuwarlal Amritlal v. Rekhlal Koduram 1950 AIR(Nag) 83 has laid down that when attestation is not specifically challenged and the witness is not cross-
examined regarding details of attestation, it is sufficient for him to say that the document was attested. If the other side wants to challenge that of statement, it is their duty, quite apart from raising it in the pleadings, to cross-examine the witness along those lines. A Division Bench of the Patna High Court in Karnidan Sarda v. Sailaja Kanta Mitra 1940 AIR(Pat) 683 rt has laid down that it cannot be too strongly emphasised that the system of administration of justice allows of cross-examination of opposite party's witnesses for the purpose of testing their evidence, and it must be assumed that when the witnesses were not tested in that way, their evidence is to be ordinarily accepted. In the aforesaid circumstances, the High Court has gravely erred in law in reversing the findings of the first appellate court as to the factum of execution of the sale deed in favour of the plaintiff."
41. Sohan Singh (CW-2) stated that a cheque was received for its collection, which was sent for its realization, however, it was returned with the endorsement "Insufficient Funds". He admitted in his cross-examination that he had broughta copy of the record. He volunteered to say that it was authenticated by the Manager of the Bank. He denied that he had brought the wrong record.
::: Downloaded on - 16/12/2023 20:32:13 :::CIS 4042. Testimony of this witness will not make the case of the complainant suspect because the cheque was drawn on Oriental .
Bank of Commerce and the official of the said bank specifically stated that the cheque was dishonoured due to insufficient funds.
Therefore, the next requirement that a cheque was dishonoured due to insufficient funds has been duly established.
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43. The complainant stated that he issued the legal notice (Ext. C-3) asking the accused to make the payment within 15 days.
rt Postal receipts (C-4 and C-5) and acknowledgement (C-6) corroborates his testimony. The acknowledgement shows that the registered cover was returned after delivery; therefore, it is duly proved that legal notice was duly served.
44. It was laid down in C.C. Allavi Haji vs. Pala Pelly Mohd.
2007(6) SCC 555 that the person who claims that he had not received the notice has to pay the amount within 15 days from the date of the receipt of the summons from the Court and in case of failure to do so, he cannot take the advantage of the fact that notice was not received by him. It was observed:
"It is also to be borne in mind that the requirement of giving notice is a clear departure from the rule of Criminal Law, where there is no stipulation of giving of a notice ::: Downloaded on - 16/12/2023 20:32:13 :::CIS 41 before filing a complaint. Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under Section 138 of the Act, make payment of the cheque .
amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of the complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the Court along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the G.C. Act and Section 114 of the Evidence Act. In our view, any other interpretation of the proviso would defeat the very object rt of the legislation. As observed in Bhaskaran's case (supra), if the giving of notice in the context of Clause (b) of the proviso was the same as the receipt of notice a trickster cheque drawer would get the premium to avoid receiving the notice by adopting different strategies and escape from legal consequences of Section 138 of the Act."(Emphasis supplied)
45. Thus, it was duly proved that the cheque was issued in discharge of the legal liability, which was dishonoured due to insufficient funds and the accused had not made the payment despite receipt of a valid notice of demand.
46. Hence, the complainant has proved all the ingredients for the commission of an offence punishable under Section 138 of the Negotiable Instruments Act.
::: Downloaded on - 16/12/2023 20:32:13 :::CIS 4247. The learned Trial Court did not consider the presumption attached to the cheque and the suggestions made to .
the complainant and his witnesses. It had taken a view which could not have been taken by any reasonable person. The judgment of the learned Trial Court proceeds in ignorance of the settled position of law and the same is liable to be interfered with of even in an appeal against the acquittal.
48. It was laid down in Rajesh Jain (supra) that when the rt Court failed to consider the presumption under Section 139 of the Negotiable Instruments Act, its judgment could be interfered with. It was observed at page 166:
54. As rightly contended by the appellant, there is a fundamental flaw in the way both the courts below have proceeded to appreciate the evidence on record. Once the presumption under Section 139 was given effect to, the courts ought to have proceeded on the premise that the cheque was, indeed, issued in discharge of a debt/liability.
The entire focus would then necessarily have to shift on the case set up by the accused since the activation of the presumption has the effect of shifting the evidential burden on the accused. The nature of inquiry would then be to see whether the accused has discharged his onus of rebutting the presumption. If he fails to do so, the court can straightaway proceed to convict him, subject to the satisfaction of the other ingredients of Section 138. If the court finds that the evidential burden placed on the accused has been discharged, the complainant would be expected to prove the said fact independently, without taking the aid of ::: Downloaded on - 16/12/2023 20:32:13 :::CIS 43 the presumption. The court would then take an overall view based on the evidence on record and decide accordingly.
55. At the stage when the courts concluded that the signature had been admitted, the court ought to have .
inquired into either of the two questions (depending on the method in which the accused has chosen to rebut the presumption): Has the accused led any defence evidence to prove and conclusively establish that there existed no debt/liability at the time of issuance of cheque? In the absence of rebuttal evidence being led the inquiry would entail: Has the accused proved the non-existence of of debt/liability by a preponderance of probabilities by referring to the "particular circumstances of the case"?
56. The perversity in the approach of the trial court is noticeable from the way it proceeded to frame a question at rt trial. According to the trial court, the question to be decided was "whether a legally valid and enforceable debt existed qua the complainant and the cheque in question (Ext. CW I/A) was issued in discharge of said liability/debt". When the initial framing of the question itself being erroneous, one cannot expect the outcome to be right. The onus instead of being fixed on the accused has been fixed on the complainant. A lack of proper understanding of the nature of the presumption in Section 139 and its effect has resulted in an erroneous order being passed.
57. Einstein had famously said:
"If I had an hour to solve a problem, I'd spend 55 minutes thinking about the problem and 5 minutes thinking about solutions."
Exaggerated as it may sound, he is believed to have suggested that the quality of the solution one generates is directly proportionate to one's ability to identify the problem. A well-defined problem often contains its own solution within it.
58. Drawing from Einstein's quote, if the issue had been properly framed after careful thought and application of ::: Downloaded on - 16/12/2023 20:32:13 :::CIS 44 judicial mind, and the onus correctly fixed, perhaps, the outcome at trial would have been very different and this litigation might not have travelled all the way up to this Court."
.
49. Therefore, the present appeal is allowed, and the judgment passed by the learned Trial Court in Case No. 171-I-
2005/RBT No. 80-II-2008/05, dated 31.03.2011 is set aside. The accused is convicted for the commission of offence punishable of under Section 138 of the Negotiable Instrument Act, 1881. Let he be produced on 28.12.20223 for hearing him on the quantum of sentence.
rt (Rakesh Kainthla) Judge 15th December,2023 (Ravinder) ::: Downloaded on - 16/12/2023 20:32:13 :::CIS