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2024 Supreme(Chh) 306
IN THE HIGH COURT OF CHHATTISGARH, BILASPUR
Goutam Bhaduri, J.
Sandeep Stationary Mart & Book Depot, Through its Proprietor Sandeep Gupta, S/o Purshottam Lal Gupta - Appellant
Vs.
Kailash Kukreja S/o Shri Bandar Das Kukreja - Respondent
CRR No. 718 of 2021
Decided On : 21-02-2024
Advocate Appeared:
For the Applicant : Shri Kunal Das, Adv.
For the Respondent: Shri Tridib Bhattacharya, Adv.
IMPORTANT POINT
The central legal point established in the judgment is the application of the presumption under Section 139 of the NI Act, the burden of proof on the accused, and the shifting of burden to the complainant based on the preponderance of probabilities.
Headnote:
Negotiable Instruments Act - Conviction under Section 138 - Ex.P-1, Ex.P-2, Ex.P-3, Ex.P-4 - 138 of NI Act, 139 of NI Act, 102 of the Evidence Act, 313 Cr.P.C, 114 of the Evidence Act, 118 of NI Act - The court discussed the presumption under Section 139 of the NI Act, burden of proof on the accused, and the shifting of burden to the complainant. It highlighted the need for the accused to prove the non-existence of debt/liability and the preponderance of probabilities in favor of the accused's case. The court also referred to relevant case laws to support its decision.
Fact of the Case:
The complainant alleged that the accused issued a dishonored cheque for Rs.12,50,000/- in favor of the complainant, leading to a complaint under Section 138 of the Negotiable Instruments Act. The lower courts affirmed the conviction, but the accused challenged the finding, claiming that the transaction was with a different individual and that the lower courts' findings were perverse.
Finding of the Court:
The court found that the lower courts failed to consider the evidence on record and drew a wrong inference of law despite the burden being on the accused. It emphasized the need for the accused to prove the non-existence of debt/liability and the preponderance of probabilities in favor of the accused's case.
Issues: The key issues revolved around the source of the transaction, burden of proof on the accused, and the shifting of burden to the complainant under Section 139 of the NI Act.
Ratio Decidendi: The court's decision was based on the principles of burden of proof, presumption under Section 139 of the NI Act, and the preponderance of probabilities in favor of the accused's case.
Final Decision: The revision was allowed, and the judgment of the Sessions Judge was set aside.
Certainly. Based on the provided legal document, the key legal points are as follows:
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The presumption under Section 139 of the Negotiable Instruments Act (NI Act) applies in cases involving cheques issued in discharge of a debt or liability. This presumption shifts the burden of proof onto the accused to establish, on a preponderance of probabilities, that the cheque was not issued in respect of a debt or liability (!) (!) .
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The accused can discharge this burden by either leading direct evidence to prove the non-existence of the debt/liability or by demonstrating, through circumstances and probabilities, that such a debt or liability did not exist (!) (!) .
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Once the accused adduces sufficient evidence to create a doubt regarding the existence of a debt or liability, the burden shifts back to the complainant to prove the existence of the debt or liability beyond reasonable doubt. Failure to do so results in the dismissal of the complaint (!) .
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In cases where the source of the transaction is in dispute, and the evidence regarding the cash transactions and the source of funds is not conclusively established, the preponderance of probabilities may favor the accused, especially when the complainant's evidence regarding the cash transaction lacks corroborative documentation such as bank statements or account details (!) (!) .
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The court emphasizes that the burden of proof initially lies on the complainant to establish the issuance of a cheque in respect of a debt, but this presumption can be rebutted by the accused by producing credible evidence, shifting the burden back to the complainant to prove the debt’s existence (!) (!) .
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The judgment underscores the importance of considering all evidence, including income tax returns and bank documents, to assess the credibility of the transaction's source and the existence of the debt/liability (!) (!) .
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The court found that the lower courts failed to properly consider the evidence, particularly the absence of concrete proof of the source of funds and the cash transactions, leading to an incorrect legal inference. As a result, the revision was allowed, and the earlier judgment was set aside (!) (!) .
These points collectively highlight the legal principles regarding the application of presumptions under the NI Act, the shifting of the burden of proof, and the importance of evidence in establishing or rebutting the existence of a debt in cheque dishonor cases.
JUDGMENT ON BOARD :
Heard.
1. The present revision is against the judgment dated 21/09/2021 passed by the Sessions Judge, Dhamtari whereby the appeal bearing number 23/2020 against the conviction under Section 138 of the Negotiable Instruments Act was dismissed.
2. The complainant/respondent Kailash Kukreja states that a promissory note was executed by the applicant/accused of Rs.12,50,000/- on 27/07/2014 (Ex.P-1) and in order to liquidate the debt, subsequently a cheque was issued on 30/10/2014 for Rs.12,50,000/- in favour of Kailash Kukreja. The cheque was dishonored for the reason that the account did not have sufficient fund. Consequently, statutory notice was issued on 5/11/2014 which was received by the applicant on 8/11/2014. Despite that, the applicant did not discharge his dues. Thereafter, complaint was filed under Section 138 of the Negotiable Instruments Act. The learned Judicial Magistrate after the trial, sentenced the applicant/accused for one year rigorous imprisonment and damages were ordered for Rs.12,50,000/-, and in lieu of non-payment, two months further simple imprisonment was ordered for. The said judgment having been subject of challenge before the appellate court, the appellate court by its order dated 21/09/2021 has affirmed the finding of the learned Judicial Magistrate. Hence, this revision.
3. Learned counsel for the applicant would submit that with respect to the amount of Rs.12,50,000/-, the applicant never transacted with the present respondent instead certain monetary transaction was there with one Kanhaiya Lal Kamrani. The Kanhaiya Lal Kamrani handed over the said blank promissory note to the applicant along with the blank cheque which was used by the complainant. He would further submit that both the learned court below came to a perverse finding as they failed to see the returns which were of the income tax department from Ex.D-3 to Ex.D-12 as the money was said to have been received from the different family members but they did not have the cash in hand with them. He would therefore submit that the finding being perverse, is liable to be set aside.
4. Per contra, learned counsel for the respondent would submit that it is not necessary that the source of income has to be disclosed. He placed his reliance in 2022 SCC OnLine SC 1131 in between P. Rasiya Vs. Abdul Nazer & Anr. and would submit that in the said case, the Supreme Court has laid down that the presumption of Section 139 of the Negotiable Instruments Act would follow and consequently the presumption as has been drawn by both the court below is based on concurrent finding of fact, which do not require any interference. He further relies on (2015) 3 SCC 123 in between Sanjaysinh Ramrao Chavan Vs. Dattatray Gulabrao Phalke & ors.
5. I have heard the learned counsel for the parties and perused the original documents and the statements.
6. The perusal of the record would show that Ex.P-1 was a promissory note issued on 27/07/2014 for Rs.12,50,000/-. According to the complainant, in lieu of the discharge of the certain debt, a cheque was issued Ex.P-2 on 30/10/2014 which got dishonored for want of sufficient fund by Ex.P-3 and thereafter statutory notice was issued on 5/11/2014 by Ex.P-4. Receipt of the said notice is also not in dispute. Perusal of the statement of the complainant Kailash Kukreja would show that he made a statement that he knows the respondent and in the cross-examination when he was suggested about the name of Kanhaiya Kamrani, Nutandas Kamrani, Disha Kamrani and Reshma Kamrani it was stated that they stay near their house and they are known to him. According to the complainant, Rs.12,50,000/- was paid in cash to the applicant and it was entered in promissory note by the accused himself. The statement would show that he holds an account in the State Bank of India, Dhamtari and HDFC Bank, Dhamtari. In 2014 he was holding an account with HDFC Bank Dhamtari. The complainant affirms the fact that he had not withdrawn any amount o
