Gujarat High Court
Manishbhai Bharatbhai Shah vs The State Of Gujarat And 4 Ors. on 28 February, 2007
Equivalent citations: (2008)1GLR392
Author: S.R. Brahmbhatt
Bench: S.R. Brahmbhatt
JUDGMENT S.R. Brahmbhatt, J.
1. Rule in Criminal Misc. Application No. 10043 of 2006 and in Criminal Misc. Application No. 3815 of 2005. Shri. M.A. Patel learned APP for the opponent No. 1 State and Shri. V.B. Patel learned Counsel for the opponents No. 2 to 5 waived service of rule. The rule was fixed forthwith with the consent of the learned Counsels of the respective parties.
2. The applicant / original complainant has filed the Criminal Misc. Application No. 10617 of 2006 under Section 5 of the Limitation Act, seeking condonation of delay occurred in preferring Criminal Miscellaneous Application No. 10043 of 2006 seeking restoration of Criminal Miscellaneous Application No. 3815 of 2005 on the file as it stood dismissed for default. This Court [Coram: S.R. Brahmbhatt, J] had issued rule in Criminal Misc. Application No. 10617 of 2006 on 3/11/2006, which was made returnable on 17/11/2006. Shri. V.B. Patel, learned Counsel appeared for the private respondents/ original accused No. 2 to 5. He opposed the delay condonation application. It would be expedient to set out few facts leading to filing of this application.
3. The applicant had to file the complaint which came to be registered as Criminal Case No. 1744 of 2003 in the court of learned Judicial Magistrate First Class Borsad against original accused No. 1 to 4 who are private respondents No. 2 to 5 herein above for offence punishable under Section 138 of the Negotiable Instrument Act as the cheque of Rs. 11,50,000=00 allegedly issued by applicant complainant had not been honoured and the accused failed in making payment of the cheque amount to the complainant after receiving statutory notice for making payment within stipulated time. The court did not believe the case of the complainant and the JMFC Borsad acquitted the accused vide his order dated 10/03/2005 in Criminal Case No. 1744 of 2003. This complainant preferred Criminal Misc. Application No. 3815 of 2005 under Section 378(4) of the Code for seeking special leave to appeal with the appeal challenging the order of acquittal dated 10/03/2005 passed by learned JMFC Borsad in Criminal Case No. 1744 of 2003. This Court (Coram: C.K. Buch, J) passed the following order on 20/12/2005 in these proceedings.
The office objections to be removed on or before 12/1/2006 failing which the petition shall stand dismissed for default.
4. As the applicant could not remove the office objections of not mentioning of provisions of law, numbering the pages etc by 12/01/2006 the matter stood dismissed. The applicants filed the Criminal Miscellaneous Application No. 10043 of 2006 for recalling the said order and for restoring the matter on board. The applicant submitted that as the matters of M/s. NANAVATY ADVOCATES are not taken up by Hon"ble Mr. Justice C.K.Buch the order dated 20/12/2005 remained unnoticed and hence the matter came to be dismissed and delay occurred in preferring the restoration application being Criminal Application No. 10043 of 2006 in Criminal Miscellaneous Application No. 3815 of 2005. The Learned Counsels of the respective parties have submitted that the Court may hear the Counsels of the respective parties at length on the merits of the appeal on the basis of the relevant papers of Criminal Case No. 1744 of 2003 produced by them so as to put an end to all these applications and appeal itself at this stage. As the delay occurred in filing this application is explained the same deserves to be condoned. As the applicant has also shown grounds for restoration of the Criminal Application No. 3815 of 2005 the application No. 10043 of 2006 also deserves to be allowed and the Criminal Application No. 3815 of 2005 is restored to the file, and in view of the general consensus amongst the learned Counsels of the respective parties that they be permitted to make submissions at length on the merits of the appeal itself, the Criminal Miscellaneous Application No. 3815 of 2005 seeking leave to appeal also deserves to be allowed. Accordingly these Criminal Miscellaneous Applications are allowed and all the matters are being disposed of by this common judgment and order.
IV. CRIMINAL APPEAL No. 2361 OF 2006.
1. The Appellant - original complainant has preferred this appeal under Section 378(4) of the Code of Criminal Procedure, 1973 [hereinafter referred to as the 'Code' for brevity] challenging the order of acquittal dated 10/3/2005 passed by learned JMFC, Borsad in Criminal Case No. 1744 of 2003 acquitting the respondents No. 2 to 5 / original accused of the charge of committing offence punishable under Section 138 of the Negotiable Instrument Act, 1881 [hereinafter referred to as 'N.I. Act for short].
2. The brief facts leading to filing of this appeal deserve to be set out as under.
2.1 The appellant, original complainant, was constrained to file the complaint in the court of learned JMFC, Borsad against the respondent No. 2 to 5, original accused, stating that he and his firm were engaged in money-lending business and knew the accused very well as they were having business relationship with him. The complainant alleged in the complaint that on 25/4/2003 the accused came to the complainant and borrowed Rs. 11,50,000=00 for development of their business. The accused issued cheque for the payment of the said amount of Rs. 11,50,000=00 bearing cheque No. 0232241 dated 5/05/2003 from their account No. 1423 maintained in Borsad Nagarik Sahkari Bank Ltd, Borsad. The accused assured the complainant that the payment against the cheque would be made on presenting the cheque in their bank. The complainant presented the cheque on 23/5/2003 in his bank i.e. Bank of Baroda which in turn presented the same to the Bank of the accused i.e. Borsad Nagrik Sahkari Bank at Borsad for realizing the cheque amount of Rs. 11,50,000=00. The Bank of the accused could not honour the cheque on account of insufficiency of funds in the account of the accused. The complainant received back the cheque along with memo indicating that the cheque was not honoured on account of insufficiency of funds in the account of the accused. The complainant therefore, issued notice through his advocate on 2/6/2003 by R.P.A.D. as well as Under Certificate of Posting. The complainant alleged that accused received the same and gave vague and evasive reply to their notice and did not pay the cheque amount within the statutory period. As the accused failed in making payment of the cheque amount of Rs. 11,50,000=00 to the complainant within stipulated time limit prescribed under the N.I. Act, they committed an offence punishable under Section 138 of the N.I. Act and therefore, the complaint was lodged on 27/6/2003 in the court of learned JMFC, Borsad which came to be registered as Criminal Case No. 1744 of 2003.
2.2 The trial court summoned the accused and recorded their plea at exhibit 17 to 20. The accused denied the charge and claimed to be tried. The trial court recorded evidence of the prosecution. After recording the evidence of the prosecution further statements of the accused under Section 313 of the Code came to be recorded wherein also they denied the case of the complainant and stated that nothing was due to the complainant and or to his firm and the complainant misused one of the blank cheques lying with him for falsely implicating them. Thereafter the complainant produced his written submissions at exhibit-80 and list of documents at exhibit-82. The accused produced their written submissions at exhibit-83 and list of documents at exhibit-84. The trial court after detailed analysis of the evidence on record came to the conclusion that the prosecution could not establish its case against the accused so as to bring home their guilt warranting their conviction for commission of offence under 138 of the N.I. Act and therefore, acquitted the accused vide impugned order dated 10/3/2005.
3. The appellant has challenged the order of acquittal dated 10/3/2005 in the present Criminal Appeal. As this Court has noted in its order dated 28/12/2006 in Cri. Misc. Application No. 10617 of 2006, Criminal Misc. Application No. 14000 of 2006 and in Cri. Misc. Application No. 3815 of 2005, the appeal was heard at length on merits and on the basis of papers produced by respective parties. As there was consensus between the parties that the entire appeal may be decided right at this stage on the basis of the record produced before this Court by the respective parties, the appeal is decided and disposed of along with Criminal miscellaneous applications by this common order.
4. Learned Counsel Shri. Nanavaty for the appellant has submitted that the order of acquittal is erroneous and the same deserved to be quashed and set aside. Shri. Nanavaty has submitted that the trial court erred in recording the acquittal contrary to the evidence on record.
5. Shri. Nanavaty for the appellant has submitted that the order of acquittal deserves to be quashed and set aside as the respondents original accused have not disputed the issuance of cheque and signature on the cheque. When the issuance of cheque and the signature has not been disputed, presumption under law as envisaged under Section 118 and 139 would arise in favour of the complainant. Once the complainant has established that the accused have issued the cheque in favour of the complainant, the court has to presume that the same was issued in discharge of their obligation and or liability to complainant. The burden to prove that the cheque had not been issued for any existing liability or debt is placed on the drawer i.e. the accused who is required to discharge the same by leading cogent evidence before the trial court. Shri. Nanavaty has relied upon a decision of the Apex Court in case of K.N. Beena v. Muniyappan and Ors. Reported in 2001 Cri.L.J. 4745 and submitted that the Apex Court relying upon the decision in case of Hiten P. Dalal v. Bratindranath Banerjee , observed that the accused were under duty to discharge the burden that the cheque had not been issued in respect of any existing liability or debt. Shri. Nanavaty has submitted that mere denial of averments made in the complaint alone would not be sufficient to discharge the burden that the cheque had not been issued in discharge of liability or debt. From the facts on record it can be said that the accused cannot be said to have discharged this burden successfully so as to rebut presumption under Section 118 and 139 of the N.I. Act. The trial court therefore has erred in not appreciating this fact in its true perspective. Shri. Nanavaty has further relied on a decision in case of Prajapati Oil Industry v. State of Gujarat reported in 2004 (1) GLH, 365 and in case of Girishbhai Natvarbhai Patl v. State of Gujarat and Anr. reported in 2006 (1) GLH 530 wherein this Court has held that, in absence of effective rebuttal of presumption by the accused the court is duty bound to act on the presumption and convict the accused for committing offence under Section 138 of the N.I. Act. Shri Nanavaty submitted that in this view of the matter when the accused failed in discharging the burden of establishing that the cheque in question had not been issued against any existing debt or liability then the trial court ought to have convicted them.
6. Shri. Nanavaty has further submitted that trial court has not appreciated that non-production of money lenders" license in itself could not have been treated so fatal as to vitiate the entire case of the prosecution resulting into the acquittal of the accused. Shri Nanavaty, relying upon the decision of the Apex Court in case of A.V. Murthy v. B.S. Nagabasavanna the Apex Court rejected the contention that as the money advanced was prior to four years of issuance of cheque the debit had become time barred and there exist no enforceable debt or liability, has submitted that the trial court failed in appreciating that claim of moneylender cannot be rejected only on account of his failure in producing valid license for money lending under the Bombay Money Lenders Act 1946. Shri Nanavaty submits that in the instant case the fact that the complainant and his partnership firm was engaged in money lending would be of no avail to the accused. Shri. Nanavati has further submitted that in absence of production of Money Lender"s License the proceedings for recovery of the loan and advances by the Moneylender are not completely barred. Shri. Nanavati has relied upon Kanbi Harji Hira Dubasia v. Kanbi Vasta Arjan Limani reported in 1977 GLR pg. 317 and submitted that when the plaintiff failed in producing license in money lending the suit for recovery of the money advanced by money lender can not be ipso facto barred and there is always scope for money lender to procure and produce the license before the competent court.
7. Shri. Nanavaty has invited this Court's attention to the proviso of Section 2(9) and Clause (f) of Bombay Money Lenders Act 1946 and submitted that the advance made on the basis of negotiable instrument as defined under N.I. Act 1881 would not be considered as a loan or advance falling under the purview of the provision of Bombay Money Lenders Act 1946. Therefore, the loan or advance by moneylender against Cheque would not attract the rigors of the Bombay Money Lending Act 1946 and proceedings for its recovery by the moneylender without production of money lending license cannot be said to be barred or incompetent. Shri Nanavay has invited this Court's attention to the decision in case of Sundaram Finance Limted (SFL) and Ors. v. State of Gujarat and Ors. reported in 2006 (2) GLH 362 in support of his contention that, when the provisions of money lending Act are excluded by the very same Act non production of money lenders" license in itself would not defeat the cause of the complainant. Shri Nanavati has submitted that in view of this the order of acquittal being erroneous and also contrary to the fact and evidence on record the same deserves to be quashed and set aside and as the accused have failed in making payment of the cheque amount within the stipulated time limit and when they have also failed in establishing that the cheque had not been issued against any consideration they are guilty of committing offence punishable under Section 138 of the N.I. Act.
8. Shri. V.B. Patel, learned Counsel appearing on behalf of the accused/ private respondents has submitted that the complaint was not maintainable as it was barred by the Bombay Money Lenders Act, 1946. Shri Patel has invited this Court's attention to the provision of Section 138 of the N.I. Act and submitted that only legally enforceable debt or liability could be enforced in proceedings under Section 138 of the N.I. Act. The explanation to the penal provision of Section 138 makes it abundantly clear that the dishonored cheque must have been received by the complainant against any enforceable debt or liability. Shri Patel has invited this Court's attention to the provision of Section 10 of the Bombay Money Lenders Act 1946 and submitted that the suit or proceedings initiated by the money lenders without the license are not maintainable and therefore the complaint which is filed without the license for money lending by a complainant, who has time and again stated in his complaint and in his oral evidence that he himself or his firm were engaged in money lending business, was liable to be rejected in absence of any valid license for money lending.
9. Shri. Patel has invited this Court's attention to the decision of the Apex Court in case of Shop Named Kaloji Talusappa Ganga Vathi v. Khyanagouda and Ors. and contended that the Courts are bound to dismiss the suits for recovery of loans when the plaintiffs were carrying on business of money lending on the date of transaction without money lending license. The Apex Court has observed that the moneylender could not have been maintained his suit without producing license for money lending. Shri. Patel has also placed reliance upon the decision of this Court in case of Ramanlal Punjalal Shah v. Paribhulabhai Haribhai reported in 1994 (2) GLR pg. 1475 and submitted that, it is the duty cast upon the Court to dismiss the suit under Section 10(4) of the Money Lenders Act when the plaintiff, a money lender fails in producing valid license for carrying on business of money lending. Shri. Patel has also relied upon a decision of Apex Court in case of Mannalal Khetan and Ors. v. Kedar Nath Khetan and Ors. Reported in AIR 1977 S.C. pg. 546 and submitted that, it is a duty cast upon the Court to act strictly in accordance with provisions of law and when certain transaction is banned or declared to be prohibited the agreement between the party can not lend any validity to such a transaction at all and no proceedings would be maintainable for enforcing them. Shri. Patel has relied upon the observations of the Apex Court made in para 16, 20, 21 and 22 and submitted that where a contract, express implied, is expressly or by implication forbidden by statute, no Court will lend its assistance to give it effect. Shri. Patel has also relied upon a decision of the Full Bench of the Allahabad High Court in case of Nutan Kumar and Ors. v. Additional District Judge, Banda and Ors. reported in AIR 1994, Allahabad (FB) 298 in support of his submission that an agreement forbidden by law and when such an agreement is made penal the same can not be enforced in the court of law. Shri Patel has submitted that in the instant case when the complainant has time and again admitted that he and his firm were engaging in the business of money lending and when no valid license for money lending was produced the trial court was duty bound to dismiss the complaint in view of the clear provisions of Section 10 of the Bomaby Money Lenders Act 1946. Shri. Patel has also relied upon decision of Apex Court in case of Badri Prasad and Ors. v. Nagarmal and Ors. in support of his submission that the court can not assist the plaintiff and or complainant so as to facilitate his furthering any prohibited and or illegal claim. The Apex Court in the aforesaid case clearly held that where an association of more than 20 persons was formed in contravention of Section 11(2) of the Companies Act and a claim was made by some members of such illegal association against another member on the footing that the association should be treated as legal in order to give rise to a liability to render accounts in respect of transactions of the association, such a claim was clearly untenable, and it was held that where a plaintiff comes to the court on claiming breach of conditions of illegal partnership contract then the only course for the courts to pursue is to say that he is not entitled to any relief on the allegations made as the court can not adjudicate in respect of contracts which the law declares to be illegal. Shri. Patel has also relied upon a decision of the Apex Court in case of The Martin Burn Ltd v. The Corporation of Calcutta reported in 1966 S.C. pg. 529 in support of his submission that when something is not permissible to be done under any law then it can not be done under the court's order. Thus the explanation to Section 138 of the N.I. Act clearly stipulates that the Sdebt or other liability means a legally enforceable debt or other liability, go to show that the moneylenders" claim against his borrower for recovering his dues without production of valid money lenders" license would be an unenforceable claim under Section 138 of the N.I. Act. In the instant case also as the complainant who has time and again stated that he and his firm were engaged in the business of money lending, was bound to produce valid money lending license and his failure to produce the same was therefore bound to result into dismissal of the complaint.
10. Shri. Patel has further submitted that the Apex Court has time and again reiterated this principle in case of Commissioner of Income Tax v. Mussadilal Ram BHAROSE . The observations made by the Apex Court in para-11 that, once the explanation is held to be applicable to the case of an assessee, it straightway raises three legal presumptions, viz; (i) that the mount of assessed income was the correct income and it was in fact the income of the assessee himself; (ii) that the failure of the assessee to return the correct assessed income was due to fraud, or (iii) that the failure of the assessee to return the correct assessed income was due to gross or willful neglect on his part. But such presumptions are always rebuttable. The court has said that these are the presumptions and has become rule of evidence but such presumptions raised are not conclusive presumptions and are rebuttable. Shri Patel submitted that in the instant case also the presumption envisaged under Section 118 and 139 of the N.I. Act are rebuttable and the evidence on record go to show that the accused have successfully rebutted the same. Shri. Patel has further submitted that the Apex Court in case of Maharashtra State Board of Secondary and Higher Secondary Education v. K.S. Gandhi and Ors. , relying upon the case of Sodhi Transport co. and Ors. v. State of U.P. and Ors. observed that, a presumption only makes a prima facie case for the party in whose favour it exists. It is a rule concerning evidence. It indicates the person on whom the burden of proof lies. When presumption is conclusive, it obviates the production of any other evidence to dislodge the conclusion to be drawn on proof of certain facts. But when it is rebuttal it only points out the party on whom lies duty of going forward with evidence on the fact presumed, and when that party has produced evidence fairly and reasonably tending to show that the real fact is not as presumed the purpose of presumption is over.
11. Shri. Patel has invited this Court"s attention to document at exhibit-37 to 45 and exhibit 53 to 56 Blank Cheques and original blank discount vouchers which were returned by the complainant and his Firm to the accused on executing the Settlement Agreement dated 15/03/2003 at exhibit 46, and submitted that these documents are capable of showing that the presumption raised against the accused was fully rebutted.
12. Shri. Patel has submitted that the case of the complainant was inherently improbable as it could be seen from the documents at exhibit-46 that the complainant and accused were having a kind of dispute which was required to be settled by and between the parties with the help of mediators. The date of settlement is immediately prior to the date of issuance of the cheque. When the account of past was required to be settled with the help of mediators and when both the sides were required to give up part of their claim, it would certainly be very improbable that right thereafter an another loan of quite a sizable amount of Rs. 11,50,000 would be advanced by the complainant to the respondents. As against this, the evidence in form of Settlement Agreement at Exhibit 46, the returned blank cheques of the accused at exhibit 37 to 45, the blank vouchers signed by the accused at Exhibit 53 to 56 go to show that the defense of the accused was quite probable. The impugned order of acquittal therefore deserves to be sustained.
13. This Court has perused all the relevant papers pertaining to the Criminal Case No. 1744 of 2003 produced by the counsels of the respective parties and heard them at length. In this appeal under Section 378 of the Code this Court is to examine as to whether the impugned order is so erroneous and perverse as to result into miscarriage of justice. The impugned order of acquittal is in fact based upon the detailed analysis of the evidence adduced by the parties on record and it did not proceed merely on the one contention that as the complainant failed in producing valid money lenders license the complaint was required to be dismissed. It deserves to be noted that the trial court has recorded acquittal only after a full-fledged trial and after recording its finding on the all points of facts and law. The trial court has also taken into consideration the non-production of money lending license by the complainant as one of the factors for acquitting the accused. But that alone is not the ground for recording acquittal as it could be seen from the judgment of the trial court. Thus this Court is to examine the order of acquittal on the basis of the material and evidence adduced by the parties.
14. Let us examine the plea of Shri. Patel with regard to the bar in continuing the proceedings as envisaged under Section 10 of the Money Lenders Act 1946 in the event of the non-production of the money lenders" lincense by the complainant in the proceedings under Section 138 of the N.I.Act. It would be expedient to set out the extract of the relevant provisions of the act.
Section 2. In this Act, unless there is anything repugnant in the subject or context,-
(9) 'Loan' means an advance at interest whether of money or in kind, but does not include
(f) an advance made on the basis of a negotiable instrument as defined in the Negotiable Instrument Act 1881 other than a promissory note ;
Section 10(4) :-If the money ...lender fails to produce the license required under Sub-section (2) within the period specified therein or within such period as may be extended under Sub-section (3), the Court shall dismiss the suit. If the moneylender produces such license within the aforesaid period, the Court shall proceed to hear the suit.
15. Thus the Section 10(4) of the Bombay Money Lenders Act 1946 makes it incumbent upon the court to dismiss the suit on the plaintiff, moneylender"s failure in producing the license as envisaged under the Act. The decisions of the Apex Court and this Court relied upon by Shri Patel would certainly go to show that when money lender fails in producing the money lenders" license it is the bounden duty cast upon the court hearing the suit to dismiss the same as it is mandated in provision of Section 10(4) of the Bombay Money Lenders Act, 1946. The Courts cannot help the party in enforcing the unenforeable contract or transactions. The other decision relied upon by Shri Patel would certainly help the proposition that no court should enforce impermissible and unenforceable claim of any party. If the transaction or contract is illegal or it is prohibited under any law for the time being in force or it is repugnant to any public policy than no court should help any party to enforce it. But a question arises as to whether the complaint under Section 138 of the N.I.Act is liable to be dismissed when the complainant,a moneylender, without producing valid license of money lending, seeks to maintain his complaint against the accused borrower whose cheque, a negotiable instrument, was returned on account of insuffiency of funds in his account and who failed in making payment to the moneylender within the statutory time limit. The transaction of this nature is expressly excluded from the purview of the Bombay Money-lenders Act 1946 as it clearly provides in Clause (f) of Sub-section 9 of Section 2 of the Bombay Money lenders Act 1946 that an advance made on the basis of the negotiable instrument, as defined in the Negotiable Instruments Act 1881 other than promisory note is not a loan" within the meaning of term Sloan defined in the Bombay Money lenders Act 1946 so as to attract the applicability of the Bombay Money Lenders Act 1946. This Court has in case of Sundaram Finance Limited (SFL) (supra) considered the provisions of Section 2(9)(g) of the Bombay Money lenders Act 1946 in a proceedings under Section 482 of the Code of Criminal Procedure while examining the prayer for quashing the complaint, which had been filed by the borrowers, complainant alleging that the petitioner finance company had vilotated provisions of the Bombay Money lenders Act 1946. The petitioner Finance Company had taken up a ground that in view of the provisions of Section 2(9)(g) of the Money lenders Act 1946 the loan to a trader was not covered under the Bombay Money lenders Act 1946, except for the purpose of Section 23 and 25 of the Act. In para 20 of the judgment this Court has held that loan to a trader is not covered under the Bombay Money lenders Act 1946 except for the purpose of Section 23 and 25.
16. Therefore it raises a question as to whether a cheque in question at exhibit 26 was a negotiable instrument so as to be excluded from the provisions the Bombay Money lenders Act 1946.
The Section 13 of the Negotiable Instrument Act 1881 is extracted hereunder.
Section 13. S Negitiable instrument (1) A S negoitiable instrument means a promisory note, bill of exchange or cheque payable either to order or to bearer.
Explanation :(i) A promisory note, bill of exchange or cheque is payable to order which is expressed to be so payable or which is expressed to be payable to a particular person and does not contain words prohibiting transfer or indicating an intention that it shall not be transferable.
Explanation (ii) - A promisory note, bill of exchange or cheque is payable to bearer which is expressed to be so payable or on which the only or last indorsement is an indorsement in blank.
Explanation (iii) Where a promisory note, bill of exchange or cheque, either originally or by indorsement is expresed to be payable to the order of specified person and not to him or his order it is nevertheless payable to him or his order at his option.
(2) A negotiable instrument may be made payable to two or more payees jointly or it may be made payable in the alternative to one of two or some of several payees.
17. Thus a crossed and even only account payee cheque also remains negotiable instrumemnt. The cheque is negotiable instrument unless its specifically made non-negotiable by the drawer. As it is held in National Bank v. Silke (1891) 1 QB 435, Akrokerri(Atlantic) Mines Ltd. v. Economic Bank (1904) 2 KB 465 ,Tailors Priya v. Gulabchand drawing of cheques with the words account payee" or account payee only" does not restrain negotiability of the cheque unless it is specifically mentioned on the instrument that Snot negotiable. The cheque in question at exhibit 26 as it appears on the face of it that the same was negoitiable instrument and as such falling under the exclusion of Clause (f) of Sub-section (9) of Section 2 of the Bombay Money Lenders Act 1946.
18. In view of the aforesaid discussion this Court is unable to agree with the submission of Shri. Patel that in view of the specific mandate under Section 10(4) of the Bombay Money Lenders Act 1946 the court was duty bound to dismiss the complaint when the complainant failed in producing valid money lending license. In fact as it is stated herein above provision of Section 2(9)(f) has the effect of excluding the transaction made on the basis of the Negotiable Instrument and therefore on this count this Court has no hesitation to come to the conclusion that the complaint was not required to be dismissed only on the ground of complainant's failure in producing the required license as it is an admitted fact that the transaction was in fact on the basis of the negotiable instrument i.e the cheque in question at exhibit 26 which had been dishonored and payments whereof had not been made in time by the accused. Thus the findings of the trial court in respect of the requirement of complainant"s producing the license for lending deserves to be reversed and is accordingly reversed.
19. This leads now to examining the other aspect as to whether the acquittal is justified on the basis of the evidence on record when this Court has negatived the submission in respect of requirement of valid money lending license for maintaining the complainant under Section 138 of the N.I. Act.
20. The following emerge from the close perusal of record and proceedings and the evidence adduced by the parties.
1. The Complainant has stated in the complaint and his deposition that he and his partnership firm were engaged in the business of money lending and they knew the accused very well on account of their good business relationship with them.
2. The complainant has time and again stated in his deposition that in past there were transactions with the accused on number of occasions. There existed dispute between the parties in respect of earlier money transaction. The dispute was settled with the help of mediators and in the process of settlement both the sides had to give up part of their respective claims against each other. The Settlement Agreement was executed on 15/03/2003 and it is exhibited as Exhibit 46 on the record. The complainant has admitted the same.
3. The complainant has also admitted that it is true that the cheques at mark No. 36 /1 to 36/9 were the original blank cheques of the accused lying with the complainant and returned to them pursuant to the Settlement Agreement dated 15/03/2003 at exhibit 46. As the complainant accepted it the cheques were exhibited as exhibit No. 37 to 45.
4. The complainant has also admitted that the blank vouchers of the accused at mark 52/1 to 52/4 which were lying with the complainant were in fact returned to the accused on account of settlement or earlier dispute recorded at exhibit 46. As the complainant admitted them these vouchers were exhibited as exhibit 53 to 56.
5. The complainant has stated that after execution of the Settlement Agreement dated 15/03/2003 on 25/04/2003 the accused borrowed a sum of Rupees 11,50,000=00 and issued a cheque bearing No. 0232241 dated 5/05/2003 for Rupees 11,50,000=00 drawn on Borsad Nagrik Sahkari Bank Ltd. Borsad from their account No. 1423 for payment of the said amount to the complainant. Thus as per the version of the complainant only within a short period of one month and ten days the complainant loaned a sizable amount of Rs. 11,50,000=00 to the accused with whom they had serious disputes which was resolved only with the help of mediators and that too after giving up part of their original claim. This version of the complainant deserves to be viewed with the serious omissions in specifically indicating as to who had in fact gone to collect the amount, whether all the four accused together had gone to collect the amount, or whether only some of them had gone to collect it, has not come on record. The complainant could not give specific answer as to in fact who had gone to the complainant for collecting the amount.
6. The complainant has stated in his deposition that the cheque in question was signed and the amount was filled in his presence by the accused. The Complainant has also stated during his examination in chief that the accused were given cash amount by cheque but nowhere such cheque transaction of complainant giving Rs. 11,50,000=00 to the accused has been proved.
7. The complainant has admitted in his cross that theirs was a profit making partnership firm doing business of money lending. The complainant has also admitted that for initiating any legal action the consent of all the partners was necessary but the partners were family members only and therefore no permission was required. He has admitted that notice was issued by him without any permission from the other partners.
8. The complainant has also admitted that before the transaction of 11,50,000=00 was made all other transaction had come to an end. The account had been completely settled. The cheque had not been received towards any earlier outstanding from the accused. The complainant has also admitted that in the business of money lending and commission agent all payments above Rs. 20,000=00 are required to be through cheque only.
9. The complainant has also denied that the cheque at exhibit 26 was one of those cheques which were lying with him in respect of old transactions. The complainant has also denied the suggestion that on the cheque at exhibit 26 except signature other writings are made by the complainant. The complainant has also admitted that it is true that the last cheque of Rs. 20,000=00 dated 30/04/2003 for settling the old accounts issued by the accused was en-cashed from the bank.
10. The complainant has also admitted that he was ready and willing to produce the books of account and partnership deed of his firm. The complainant has also admitted that his firm did not authorize him in writing to lodge the complaint. The complainant has also admitted that he did not mention in his complaint that who out of the four accused had come to borrow and collect the money. The complainant has also admitted that it is true that in the complaint it is not written that the accused were given money in cash. The complainant has also admitted that it is true that he has not produced any documents to show that he had available balance of Rs. 11,50,000=00 on the day when it is alleged that he gave that amount to the accused. The complainant has also admitted that it is true that in his firm the amount lying in the balance is always noted with the details of currency notes and its denomination. The complainant has also admitted that it is true that no license of money lending was held by them.
11. The complainant has also admitted that it is true that the writing on the cheque at exhibit 26 was not done in his presence though in his chief examination he says that the cheque was written in his presence.
12. At one place the complainant has stated that it is true both Rs. 11,45,000=00 and Rs. 11,50,000=00 were given to the accused. He is not explaining as to what was the exact amount in fact advanced to the accused. Nor is he explaining the discrepancy in mode of advancing the amount to the accused as to whether it was through cheque or through cash.
13. The other witnesses of the complainant have merely deposed to support the version of returning the cheque at exhibit 26. But from their depositions the factum of complainant advancing money to the accused and accused handing them over the cheque at exhibit 26 cannot be said to have been proved beyond doubt.
14. The complainant has examined Shri Rajnikant Choksi of Borsad Nagrik Bank. During his testimony the Bank Statements and extract of Chequue inward register have been produced.
15. Shri Rana of Bank of Baroda is examined at exhibit- 68.
21. Thus against the aforesaid backdrop it is to be examined as to whether the impugned order of acquittal has been so perverse as to result into miscarriage of justice.
22. The complainant has not very clearly stated as to what was the mode of actual payment made to the accused on 25/04/2003. At times he has stated that it was through cheque and at times he has stated that it was paid in cash. He has also stated that being in the business of money lending he was aware that no payment above Rs. 20,000=00 could legally be made by cash. The complainant is also not very sure as to what was the exact amount advanced to the accused whether it was Rs. 11,50,000=00 or Rs. 11,45,000=00. At times the amount of Rs. 11,45,000=00 has also figured into the testimony of the complainant. At one place the complainant has stated that the payment of Rs. 11,50,000=00 and 11,45,000=00 both are true. The statement of paying of Rs. 11,50,000=00 and Rs. 11,45,000=00 in the same breath without any proper explanation raises serious doubt in the version of the complainant.
23. The accused has during the evidence of the complainant brought on record the signed blank cheques at exhibit 37 to 45. The complainant has admitted in unequivocal terms that these signed blank cheques of accused were lying with the complainant as security in respect of old transactions. They were returned to the accused, as the disputes in respect of old transaction had been resolved with the help of mediators. The accused has also brought on record during the evidence of the complainant the blank vouchers bearing revenue stamp and stamp of Jay Marketing, the Firm of the accused and its partner"s signature lying in the custody of the complainant as security for old transaction which were returned to the accused after the settlement agreement at exhibit 46. These vouchers were duly proved and exhibited at exhibit 53 to 56.
24. Thus the number ambiguity noticed in the version of complainant in respect of the mode of payment of Rs. 11,50,00000, the uncertainty in respect of the person or persons to whom it was handed over on 25/4/2003 and two figures of amount of payment i.e. Rs. 11,50,000=00 and 11,45,000=00 without any explanation for saying that story of giving of both the amounts is true, and the complainant"s statement that he has not produced any proof showing that on 25/04/2003 this big amount was available with him or his firm for advancing it to the accused, the complainant"s contradicting himself during his testimony on many aspects like writing on the cheque at exhibit 26, raises serious doubts in the veracity of his version.
25. This being an acquittal appeal this Court needs to bear in mind the principles laid down by the apex court in case of C. Antony v. K.G.Raghavan that though this Court has all powers to appreciate the evidence, it should not substitute the findings of the trial court by taking all together a different perspective on such appreciation, unless its held that the trial court"s findings were so perverse as to offend reason.
26. Shri Nanavaty"s submissions on presumption under Section 118 and 139 deserve to be examined keeping the above stated principle in mind. It is submitted on behalf the appellant that the trial court has erred in not raising the statutory presumption in favour of the complainant. It is submitted that the accused could not be said to have discharged the burden of proving that the cheque at exhibit 26 had not been issued against any liability or debt. It is submitted on behalf of the appellant that in light of the observations of the Apex Court in case of Hiten P.Dalal AND and K.N. Beena , when any of the accused did not examine himself can it be said that they have discharged the burden of proving that the cheque at exhibit 26 had in fact not been given against any enforceable debt or liability.
27. The law of evidence on statutory presumption has by now crystallized into concrete proposition that presumption is an inference of a certain fact drawn from other proved facts. While inferring the existence of a fact from another, the Court is only applying a process of intelligent reasoning that the mind of a prudent man would do under similar circumstances. Presumption is not the final conclusion to be drawn from other facts. But it could as well be final if it remains undisturbed later. Presumption in law or evidence is a rule indicating the stage of shifting the burden of proof. From a certain fact or facts the Court can draw an inference and that would remain until such inference is either disproved or dispelled. Unless the presumption is disproved or dispelled or rebutted the Court can treat the presumption as proof. The accused have, during the testimony of the complainant, produced evidences in form of signed blank cheques and vouchers that were lying with the complainant as security for old transactions and which were returned by the complainant to the accused on settlement of accounts. The complainant"s failure in establishing the fact of advancing sizable amount of Rs. 11,50,000=00 or 11,45,000=00 on 25/04/2003 to the accused coupled with his unequivocal admission of the returning of signed blank cheques and vouchers lying with them a security to the accused on settlement of old disputes go to support the defense version that there exist no liability to the complainant and or his firm and the complainant have misused one of the signed blank cheques lying with them for falsely implicating them as they had to settle the disputes wherein both the parties had to give up part of their respective claim against each other. Thus the accused have in fact successfully discharged the initial burden of proving that cheque at exhibit 26 had not been issued by them for any legally enforceable debt or liability towards the complainant. In case of K.N. Beena (supra) there was merely denial by the accused and that was treated to be sufficient by the High Court, which was found to be insufficient proof of rebuttal by the Apex Court. There cannot be any proposition of law that the accused has to lead evidence by examining himself in witness box for rebutting the presumption under Section 139 of the N.I. Act. The accused in the present case in fact has produced material on the record, which has been duly proved and exhibited showing that they have discharged the initial burden.
28. The apex court has in case of Kundanlal Rallaram v. Custodian Evacuee Property Bombay reported in AIR 1961 SC 1316 held that when the plaintiff withheld important document without any proper explanation the presumption under Section 118 of the N.I. Act against the defendant stood discharged. In the instant case also though the complainant has stated time and again that books of accounts were maintained but the relevant books of accounts have not been produced at all by the complainant indicating the transaction in question of advancing the amount of Rs. 11,50,000=00 or 11,45,000=00 to the accused.
29. The Apex Court has in case of Trilok Chand Jain v. State of Delhi while examining the provisions of Section 4 of the Prevention of Corruption Act 1947 in respect of statutory presumption held that the presumption however, was not absolute. It was rebuttable. The accused can prove the contrary. The quantum and the nature of proof required to displace this presumption may vary according to the circumstances of each case. Such proof may partake the shape of defense evidence led by the accused, or it may consist of circumstances appearing in the prosecution evidence itself, as a result of cross-examination or otherwise. But the degree and the character of the burden of proof which Section 4(1) casts on an accused person to rebut the presumption raised under it cannot be equated with the degree and character of proof which under Section 101, Evidence Act rests on the prosecution. While the mere plausibility of an explanation given by the accused in his examination under Section 342, Cr. P. C. may not be enough, the burden on him to negate the presumption may stand discharged, if the effect of the material brought on the record, in its totality, renders the existence of the fact presumed, improbable. In other words, the accused may rebut the presumption by showing a mere preponderance of probability in his favour; it is not necessary for him to establish his case beyond a reasonable doubt. The evidence adduced during the testimony of the complainant in the instant case go to show that the accused did discharge the burden under Section 139 of the N.I. Act.
30. It also deserve to be noted that when documents in form of signed blank cheques and vouchers at exhibit No. 37 to 45 and 53 to 56 respectively brought on record by the accused during the testimony of the complainant and when the complainant has unequivocally admitted that it was the practice of keeping blank cheques and vouchers of the accused by way of security the accused did discharge their initial burden of proving under Section 139 of the N.I. Act that the cheque at exhibit 26 was not issued against any legally enforceable debt or liability. The burden thereafter had shifted upon the complainant to prove that they had in fact advanced a sum of Rs. 11,50,000=00 or 11,45,000=00 to the accused on 25/04/2003 and the accused issued the cheque at exhibit 26 dated 5/05/2003 against the said advance only and the accused failed in making payment of the said amount within stipulated time. The Apex Court has in case of M.S. Narayan Menon @ Mani v. State of Kerala and Anr. held that once the accused under Section 139 of N.I. Act shows that the cheque in question had in fact not been issued for any legally enforceable liability or debt then the burden shifts on to the complainant to prove the contrary. Thus in view of this the acquittal of the accused impugned in this appeal cannot be said to be so perverse as to result into miscarriage of justice warranting any interference under Section 378 of the Code.
31. In the result, this Court is of the considered view that the complainant could not establish his case against the accused so as to bring home guilt on their part. On the basis of the facts & circumstances and evidence on record, it would not be safe for this Court to reverse the order of acquittal and fasten the accused / present respondents No. 2 to 5 with the criminal liability so as to punish them under Section 138 of the Negotiable Instrument Act, 1881. The appeal therefore, deserves to be dismissed, and dismissed accordingly.