2011(4) Crimes 362 (Bom.)
SHORT NOTE
BOMBAY HIGH COURT
A.P., Bhangale, J.
Mohammad Murtuza Mohammad
Yusuf —Applicant
versus
Gulam Nabi Abdul Rehman
and Anr. —Respondents
Criminal Appeal No. 23 of 2010
Decided on 15.2.2010

IMPORTANT POINT
Bare denial of passing of consideration and existence of debt, would not serve purpose of accused to seek dismissal of complaint.

Headnote:(i) Negotiable Instruments Act, 1881—Section 138 read with Sections 118 and 139—Criminal Procedure Code, 1973—Section 378—Dishonour of cheque—Acquittal—Cheque was issued towards repayment of hand loan—To rebut statutory presumption that cheque was issued for discharge of legally enforceable debt or liability accused is not expected to prove his defence beyond reasonable doubt—At the same time, bare denial of passing of consideration and existence of debt, would not serve purpose of accused to seek dismissal of complaint—Something which is probable has to be brought on record for getting burden of proof shifted back to complainant—Adverse inference is required to be taken against accused for not replying notice—Accused sentenced to undergo imprisonment till rising of Court and to pay compensation of Rs. 45,000 (Amount covered by cheque) plus Rs. 10,000 as cost.

       Held: It is no doubt true that under Section 139 of the Act, under the abovesaid circumstances, the Court has to raise a presumption that the holder of the cheque received the cheque for the discharge of any debt or liability, but it is a rebuttable one. The accused can establish that the debt or liability was not legally enforceable for to uproot the prosecution. Under Section 139 of the Act burden lies on the drawer of the cheque to rule out the existence of the debt or creditor relationship. The use of the phrase “until contrary is proved” in Section 118 of the Act and further use the words “unless the contrary is proved” in Section 118 of the Act read with definition of “may presume” and “shall presume” as given in section 4 of the Evidence Act, make it clear that presumption is rebuttable, it only points out that the party on whom lies the duty of going forwards 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 the presumption is over. But it is settled law that to rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt, as is expected of the complainant in a criminal trial to prove offence. The accused may adduce evidence to prove that these was no debt or liability to be discharged by him. At the same time, it has to be borne in mind that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused to seek dismissal of the complaint. Something which is probable has to be brought on record for getting the burden of proof shifted back to the complainant. It case of the complainant is false then the accused as any reasonable ordinary prudence person is bound to react sharply by replying to the demand notice received by the accused.

       Keeping deliberate silence by the accused while demand notice in writing is served upon the accused is itself a strong circumstance in favour of the complainant. The accused did not stop payment of the cheque through his bank nor reported alleged misuse of the cheque to the police. In Gorantala Venkateswara Rao v. Kolla Veera Raghavan & Anr. the Andhra Pradesh High Court held that the failure of the accused to give reply to the legal notice issued by the complainant is one of the strong circumstances to draw an inference that the accused borrowed the amount from the complainant and the cheque was issued towards payment of the legally enforceable debt. If the complainant has misused the cheque or fabricated it, the accused is bound to immediately protest and threaten the complainant with legal action and would not wait until the conclusion of the trial without taking any action against the complainant. Adverse inference is, therefore, required to be taken against the accused for not replying the notice. In Hiten P. Dalal v. Bratindranath Banerjee the three Judge Bench of the Apex Court that the Sections 138 and 139 of the Act require that the Court “shall presume” the liability of the drawer of the cheque for the amount for which cheque is drawn and in K. Bhaskaran v. Sankaran Vaidhyan Balan and Anr. Hon’ble Supreme Court observed thus:

        “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 which the cheque bears. Section 139 enjoins the Court to presume that the holder of the cheque received it for the discharge of any debt or liability. The burden was upon the accused to rebut that presumption. The defence evidence must be such which the Court can believe the defence to exist or consider its existence as reasonably probable, the standard of reasonability being that of the prudent person. To discharge onus it may not be essential for the accused to enter in the witnesses box to depose as he can rebut the presumption by cross-examining the complainant and his witnesses if any to prove defence upon preponderance of probabilities. Thus, onus as expected to be discharged by the accused was not discharged in this case. Once it is held that the accused had failed to rebut the statutory presumption it ought to be concluded that the presumption itself was tantamount to proof of the case of the complainant”.

        Looking into the submissions at the Bar in the light of relevant legal provisions, it seems that Trial Court did notice the fact that cheque in question issued was signed by the drawer (accused) drawn on the Akola Urban Cooperative Bank Limited. Main Branch, Akola and that there is presumption in favour of the complainant in view of Section 139 of the Negotiable Instruments Act. However, it appears that learned Trial Magistrate has misled himself by the alleged handwriting by complainant’s brother Mustafa on the cheque. The logic of the Trial Court that it did not find evidence to believe the financial soundness of the complainant to lend huge amount of Rs.45,000 and therefore, it did not feel that the amount may have been lent to the accused appears strange, because first of all, sum of Rs. 45,000/- is not such a huge amount which is person running business, though small may be, may not have at his disposal. Be that as it may, presumptions statutorily available to the complainant were not rebutted by the accused by adducing satisfactory evidence to the contrary. Section 138 of the Act aims at punishable unscrupulous drawers of cheques who though purport to discharge their liability by issuing cheque, have no real intention to pay. Trickster drawer may found out way and means to defeat the honest payee by avoiding payment. The Court must be on guard to prevent miscarriage of justice. Learned Trial Magistrate ought to have noticed that the obligation on the part of the complainant stood discharged with the help of statutory presumptions of law unless the accused adduced evidence to establish the reasonable possibility of the non-existence of the presumed fact.

       13. On careful scrutiny of evidence led in the case, the complainant denied the suggestion that his brother had obtained the blank signed cheques from the accused. Suggestion was also denied that the two cheques were given as security. According to the accused, brother of the complainant had obtained two blank cheques from the accused as security. I find the requirements of Section 138 of the Act have sufficiently been proved in order to reverse the impugned judgment and order of acquittal passed in favour of the accused. The acquittal order appears unreasonable, contrary to the record in the facts and circumstances of the case, I find the respondent accused guilty of offence punishable under Section 138 of the Negotiable Instruments Act and convict him thereunder.

        On the question of sentence, it is not necessary to insist upon incarceration of the accused having regard to nature of offence. The accused is sentenced to undergo imprisonment till rising to the Court and to pay compensation in the sum of Rs.45,000, the amount covered by cheque in question plus Rs. 10,000 as cost for prosecuting the accused payable under Section 357(3) CrPC to the complainant, within two months from the date of this judgment. In default of payment of compensation, the accused shall under go simple imprisonment for three months. The accused shall appear before the learned Judicial Magistrate, Fist Class (Special Court under Section 138 of the Act)at Akola and his security to produce him on 2.3.2010. Compensation, if not paid, shall be recovered as fine.

        (Paras 11 to 14)

       (ii) Negotiable Instruments Act, 1881—Section 138 read with Sections 118 and 139—Dishonour of cheque—In special prosecutions based upon dishonoured cheque offence punishable under Section 138 complainant is aided by statutory presumption which are self contained under Sections 118 and 139—Complainant is required to prove that cheque was drawn by accused upon his account for non-payment on account of insufficient funds and accused failed to pay the amount despite service of demand notice—Once primary facts are averred and proved by complainant statutory presumptions arising are required to be rebutted by accused by adducing satisfactory evidence which is to be tested on preponderance of probabilities.

       Held: In a criminal trial one has to start with the presumption of innocence in favour of the accused which is also regarded as human right because no one can be convicted and punished merely on the ground of suspicion however strong it may be. The prosecution is required to prove offence beyond reasonable doubt. In special prosecutions based upon dishonoured cheque offence punishable under Section 138 of the Negotiable Instruments Act, however, the complainant is aided by the statutory presumption which are self contained under Sections 118 and 139 of the Act. The complainant is required to prove that the cheque was drawn by the accused upon his account in the bank for non-payment on account of reason i.e. insufficient funds, etc and the accused had failed to pay the said amount despite service of demand notice in writing upon him, within stipulated period. Once the primary facts as above are avered and proved by the complainant in such case as required by the penal provision in Section 138 of the Act, the statutory presumptions arising are required to be rebutted by the accused by adducing satisfactory evidence which is to be tested on preponderance of probabilities. Such evidence may be by production of documents to disprove the complainant’s version or by citing material elicited from the cross-examination of the complainant and his witnesses if any. The accused may not enter in the witness box if he can dislodge the statutory presumptions otherwise. (Para 10)