TaxTMI 
TaxTMI 
2015 (3) TMI 1282
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....n on City Union Bank, Ram Nagar Branch. When the cheque/Ex.P.1 was presented for encashment before the Indian Overseas Bank, Ganapathy Branch, it was returned as 'Insufficient Funds' which was evidenced by Ex.P.2/Return memo dated 15.03.2001. Ex.P.3 is the Debit advise. Hence, statutory notice has been issued under Ex.P.4 on 23.03.2001, which was evidenced by Acknowledgment Card/Ex.P.5 to Ex.P.8. Statutory notice sent to the second respondent has been returned, which was evidenced from Postal Cover/Ex.P.9. But the respondents have not repaid the amount. Hence, the appellant/complainant preferred a complaint under Section 138 of the Negotiable Instruments Act against the respondents/accused. 3.The trial Court has taken cognizance of an offence after recording the sworn statement and after following the procedure. Since the accused pleaded not guilty, the trial Court examined P.W.1 and Exs.P.1 to P.9 on the side of the complainant and on the side of the respondents, D.W.1 to D.W.4 were examined and Ex.D.1 to Ex.D.7 were marked. The trial Court after considering the oral and documentary evidence, acquitted the accused for the offence under Section 138 of Negotiable Instruments Act. ....
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....shmana). 7.He further submitted that it is the duty of the complainant to prove that he has source of income to lend money. To substantiate his argument, he relied upon the decision reported in 2014 (1) SCC (Crl.) 791 (John K.Abraham vs. Simon C.Abraham and another). 8.For the same proposition, he relied upon the following decisions: 1.2015 (1) SCC (Crl.) 576 (K.Subramani vs. K.Damodara Naidu) 2.2015 Cri.L.J. 1156 (Ramdas vs. Krishnanand) 9.He would also submit that since this appeal is against the judgment of acquittal, unless the judgment of acquittal is perverse, the Appellate Court shall not interfere with the finding of the judgment of acquittal. He would further submit that if two views are possible, the view favouring the accused to be taken into consideration. To substantiate his argument, he relied upon the decisions reported in 2014 (2) SCC 497 (Basappa vs. State of Karnataka) and 2015 (1) SCC 435 (Mahamadkhan Nathekhan vs. Stateof Gujarat) and prayed for dismissal of the appeal. 10.Considered the rival submissions made by both sides and perused the materials available on record. 11.The appellant herein as a complainant preferred a complaint under Section 138 of Ne....
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....er described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused/defendant cannot be expected to discharge an unduly high standard or proof. 28.In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of `preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own." 14.Before going into the facts of the ca....
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....ot in the handwriting of the appellant and that he (complainant) wrote the same. 6.5.The respondent also stated that the amount in words was written by him. 6.6.The trial Court has also noted that it was not the case of the respondent that the writing in the cheque and filling up of the figures were with the consent of the accused appellant. 8.Keeping the above factors in mind, when we examine the judgment impugned in this appeal, we find that the High Court committed a serious illegality in reversing the judgment of learned Chief Judicial Magistrate. While reversing the judgment of the trial Court, what weighed with the learned Judge of the High Court was that in the 313 questioning, it was not the case of the appellant that a blank signed cheque was handed over to his son and that even in the cross- examination it was not suggested to PW-1 that a blank cheque was issued. The High Court was also persuaded by the fact that the appellant failed to send any reply to the lawyers notice, issued by the respondent. Based on the above conclusions, the High Court held that the presumption under Sections 118 and 139 of the Negotiable Instruments Act could be easily drawn and that the ....
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....5 belonging to him. Neither in the complaint nor in the chief-examination of the complainant, there is any averment with regard to the sale price of site No.45. The concerned sale deed was also not produced. Though the complainant was an income-tax assessee he had admitted in his evidence that he had not shown the sale of site No.45 in his income-tax return. On the contrary the complainant has admitted in his evidence that in the year 1997 he had obtained a loan of Rs. 1,49,205/- from L.I.C. It is pertinent to note that the alleged loan of Rs. 14 lakhs is claimed to have been disbursed in the year 1997 to the accused. Further the complainant did not produce bank statement to substantiate his claim. The trial court took into account the testimony of the wife of the complaint in another criminal case arising under Section 138 of the N.I. Act in which she has stated that the present appellant/accused had not taken any loan from her husband. On a consideration of entire oral and documentary evidence the trial court came to the conclusion that the complainant had no source of income to lend a sum of Rs. 14 lakhs to the accused and he failed to prove that there is legally recoverable deb....
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....end hand loan of such big amount to the appellant. In the above citation, it was stated that a lorry driver/respondent has obtained Rs. 1,50,000/- as loan from the bank and paid Rs. 1,75,000/- to the appellant, who is his employer. So the Apex Court has held that it is unbelievable. But, here the facts is entirely different and so, the above citation is not applicable to the facts of the present case. 19.Now, this Court has to decide whether the presumption has been rebutted or not? It is true that the presumption has to be rebutted either by way of examining independent witness or by cross examining the prosecution witness. Here the appellant/complainant was examined as P.W.1. P.W.1, in his evidence, mainly focusing upon Ex.P.10/promissory note dated 05.12.1998. A suggestion posed to him that the cheque has been issued to Sivakrishna Finance and Chit Funds Private Limited as security was denied by him. He would submit that even though he maintained the accounts, he has not produced the same. It is true that reply notice has not been marked by P.W.1. But whereas in paragraph No.7 of the the complaint, he has stated as follows: the above notice was received by all the partners ....
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.... given a cheque and promissory note to one Kaliswamy, Managing Director, Sivakrishna Finance and Chit Funds (P) Limited.He further submitted that he is not liable to pay any amount. In his cross examination he has stated that Ex.P.10/promissory note contains his signature and the signature of the third respondent.He has also fairly conceded that he has not given any complaint against the said Kaliswamy.He further submitted that he has not filed any documents and he has not sent any notice to the said Kaliswamy except the copy of the notice, which is marked as Ex.D.2. He further stated that till 31.03.1998, all the respondents were partners of the partnership firm.He fairly conceded that he has not filed any document to show that the documents were given to the said Kalisamy.So, except the denial from D.W.1, there is no evidence to show that Ex.P.1 and Ex.P.10 has been given to Kaliswamy.He has also fairly conceded that he has not taken any criminal action against the Kaliswamy.So, the cross examination of P.W.1 and the evidence of D.W.1 has not probablises the defence raised by the respondents.No prudent man will kept quite after he discharged the amount due to the Sivakrishna Fina....
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.... appears to have proceeded on the basis that the denials/averments in his reply dated 21st May, 1993 were sufficient to shift the burden of proof onto the Appellant/Complainant to prove that the cheque was issued for a debt or liability. This is an entirely erroneous approach. The 1st Respondent had to prove in the trial, by leading cogent evidence, that there was no debt or liability. The 1st Respondent not having led any evidence could not be said to have discharged the burden cast on him. The 1st Respondent not having discharged the burden of proving that the cheque was not issued for a debt or liability, the conviction as awarded by the Magistrate was correct. The High Court erroneously set aside that conviction. 24.It is also appropriate to consider the decision relied upon by the learned counsel appearing for the respondents reported in 2011 Cri.L.J. 552, wherein in paragraph No.11, it was held as follows: 11.Apart from this technical defect of the complaint, the learned Magistrate has also noticed that the complainant has not placed any evidence to show that he had financial capacity to lend substantial amount of Rs. 4,50,000/-.Admittedly, no document evidencing the loan ....
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....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. (Emphasis supplied) 10.It is also not the case of the prosecution that the judgment of the trial court is based on no material or that it suffered from any legal infirmity in the sense that there was non-consideration or misappreciation of the evidence on record. Only in such circumstances, reversal of the acquittal by the High Court would be justified. In K. Prakashan v. P.K. Surenderan[2], it has also been affirmed by this Court that the appellate court should not reverse the acquittal merely because another view is possible on the evidence. In T. Subramanian v. State of Tamil Nadu[3], it has further been held by this Court that if two views are reasonably possible on the very same evidence, it cannot be said that the prosecution has proved the case beyond reasonable doubt. 11.In Bhim Singh v. State of Haryana[4], it has been clarified that interference by the appellate c....
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....the above infirmities it can then and then only reappraise the evidence to arrive at its own conclusions. (Emphasis supplied) 14.In Ganpat v. State of Haryana and others[7], at paragraph-15, some of the above principles have been restated. To quote:(SCC p.62) 15.The following principles have to be kept in mind by the appellate court while dealing with appeals, particularly, against an order of acquittal: (i)There is no limitation on the part of the appellate court to review the evidence upon which the order of acquittal is founded and to come to its own conclusion. (ii)The appellate court can also review the trial courts conclusion with respect to both facts and law. (iii)While dealing with the appeal preferred by the State, it is the duty of the appellate court to marshal the entire evidence on record and by giving cogent and adequate reasons may set aside the judgment of acquittal. (iv)An order of acquittal is to be interfered with only when there are compelling and substantial reasons for doing so. If the order is clearly unreasonable, it is a compelling reason for interference. (v)When the trial court has ignored the evidence or misread the material evidence or ha....
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....icient grounds, very strong circumstances, distorted conclusions, glaring mistakes, etc. 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 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, 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. (Emphasis supplied) 26.For the same proposition, the learned counsel appea....
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....les in the decision referred to above permit it to do so and because it has the power to do so it has to correct an error of law or fact significant enough to necessitate overturning the verdict of the trial court.The High Court has to exercise its discretion very cautiously, keeping in mind the acquittal of the accused and the rights of the victim. There is no quarrel over the proposition laid down in the above said citations that the Appellate Court shall not interfere with the finding of the judgment of acquittal unless the judgment of acquittal is perverse. 27.As already stated, the Trial Court has ailed to invoke presumption under Section 139 of Negotiable Instruments Act.Once the presumption under Section 139 of Negotiable Instruments Act has been rebutted by the respondents/accused, then only the onus is shifted to the complainant to prove that the cheque has been issued for discharging legally subsisting liability.But the Trial Court has not considered the same.The Trial Court in its judgment mainly focusing on Ex.P.10/promissory note whereas D.W.4/the second respondent herein himself admitted that Ex.P.10 contains his signature and the signature of the third respon....