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2023 Supreme(Online)(Bom) 20370
BOMBAY HIGH COURT
S. M. MODAK, J
PRAVINKUMAR VITHALDAS VED (SINCE DECEASED) – Appellant
Versus
PARMANAND SHITALPRASAD PANDEY AND ANR. – Respondent
APEAL/1311/2006
In prosecutions under Section 138 of the Negotiable Instruments Act, the burden lies on both parties to rebut the presumption of legally recoverable debt, with the appellate court having a limited role in reviewing acquittals.
Headnote:(A) Negotiable Instruments Act, 1881 - Section 138 - Appeal against acquittal - Conviction by trial court set aside by City Civil Court, which found no legally recoverable debt - Burden of proof in such cases lies on both parties to rebut presumption - Court emphasized that the appellate court's role is limited in cases of acquittal, but different in Section 138 prosecutions - Evidence of complainant and witnesses established the loan and cheque issuance. (Paras 1, 2, 8, 40)
(B) Evidence - The Court emphasized the importance of the relationship between the parties and the validity of the blank cheque issued by the accused, reinforcing that a signed blank cheque can be filled by the payee without invalidating it. (Paras 25, 27, 29)
Facts of the case:
The appellant-complainant advanced Rs.6 lakhs to the respondent-accused, who issued a cheque for Rs.10,29,000/- which was dishonoured. The trial court convicted the accused, but the City Civil Court acquitted him.
Findings of Court:
The appellate court erred in disregarding key evidence and failing to appreciate the presumption in favor of the complainant. The accused's defenses were found to be unsubstantiated.
Issues: The main issues involved were whether the City Civil Court was justified in setting aside the conviction and whether the presumption of legally recoverable debt was rebutted.
Ratio Decidendi: The court ruled that the appellate court's findings were perverse and that the complainant had successfully established all elements of the offense under Section 138.
Result: The appeal is allowed, and the accused is held guilty under Section 138 with a fine imposed. (Paras 43-44)
JUDGMENT :-
1. Heard learned Advocate for the Appellant-Complainant and learned Advocate for the Respondent-Accused. Though Respondent-Accused was convicted by the Court of Metropolitan Magistrate, Court No.33, Ballard Pier, Bombay for the offence punishable under Section 138 of the Negotiable Instruments Act, he was acquitted by City Civil Court. That is how present Appeal is filed by the Original Complainant.
2. The issue involved in this Appeal is whether the City Civil Court is justified in setting aside the conviction and whether it was justified in holding that the respondent has rebutted the presumption and hence there was no legally recoverable debt/liability. It is true that there is always a presumption of innocence in a criminal trial. This presumption of innocence is reinforced when the Accused is acquitted. However in a prosecution under Section 138 Of the Negotiable Instruments Act, there is burden on both the sides and it is not like any other criminal trial. So normal principle of least interference in the judgment of acquittal is not applied with full force in such acquittal. However, in this case, Accused was convicted but acquitted by the City Civil Court. So, we need to decide whether City Civil Court was justified in setting aside the findings by the trial Court in favour of the Complainant.
Case of the Complainant in short
3. The Complainant advanced money to the tune of Rs.6 lakhs to the Accused through his brother in law Dinesh Kapadia. He was a chartered accountant for the Accused. Accused was working as lecturer in Mitibai College and he was conducting tuition class in the name of M.P. tuition classes. The Accused executed a bill of exchange on 01.02.1997 in favour of the Complainant and his wife. He has agreed to pay interest at the rate of 2.75 per month. Through the intervention of said Kapadia, towards the principal and interest, accused issued a cheque for Rs.10,29,000/- in favour of the Complainant. On presenting, it got dishonoured for various reasons. Mandatory notice was issued and it was also replied too. Ultimately complaint was filed. Both the parties adduced oral and documentary evidence.
Evidence adduced by both the parties.
4. The complainant relied upon his evidence and the evidence of two witnesses. One is his brother-in-law, Chartered Accountant Shri Kapadiya through whom the money was lent to Respondent. The third one is the witness Shri Gaonkar from the banker of the accused. The complainant also relied upon documentary evidence in the form of:---
a. bill of exchange,
b. cheque return memos issued by both the banks,
c. mandatory notice,
d. reply given by the Respondent and its rejoinder.
5. As against this Respondent-accused has also entered into witness box and examined his accountant Shri Satyawan Pawar. He also relied upon few of the documents. The above said evidence was appreciated by the trial Court and the Respondent was convicted. As against this the City Civil Court reversed the conviction.
Presumption and its rebuttal.
6. The appellant relied upon following judgments :
(i) M/s. Kalamani Tex and Anr. Vs. P. Balasubramanian , Decided on 10/02/2021 by the Supreme Court of India.
(ii) T.P. Murugan (Dead) Thr. LRS. Vs. Bojan , AIR 2018 Supreme Court 3601 .
(iii) Hiten P. Dalal Vs. Bratindranath Banerjee , AIR 2001 Supreme Court 3897 .
7. Whereas The Respondent relied upon the observations in case of Rangappa Vs. Sri Mohan , 2010 (11) Supreme Court Cases 441 . There is discussion on drawing of presumption and rebuttal of presumption. There is also a discussion as to how the presumption can be rebutted. It can be also be rebutted by placing reliance on materials relied upon by the complainant. In Krishna Janardan Bhatt V/s. Dattatraya G. Hegade , (2008) 4 SCC 54 it was held that “existence of legally recoverable debt is not a matter of presumption under Section 139 of the Negotiable Instruments Act. It merely raises presumption in favour of a holder of the cheque that the same has been
