AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (11) TMI 550
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.... He also owns commercial ropeway which connects various other apple orchards with the roadhead as a facility to the growers to carry their produce from the orchards to the market. 4. In the year 2011, respondent No. 1 purchased apple crops of various growers which was carried out through ropeway to the roadhead for further transportation. The packing material was procured by the respondent on credit basis from the appellant through his authorised agent Prem Chand son of Kumat Ram. In the month of September 2011, the accounts were finally settled between the appellant and the authorised agent of respondent No. 1 and a sum of Rs. 5,38,856/- was found recoverable. A cheque No. 942816 dated 2.10.2011 was issued for the said amount, but the said cheque was returned by the bank on 11.10.2011 on presentation with the endorsement "insufficient funds". 5. The appellant thereafter served a legal notice on 27.10.2011 under registered cover sent to the official and home addresses of respondent No. 1. But, in spite of receipt of the notice of 27.10.2011, no payment was made which led to filing of a complaint by the appellant. 6. The appellant in his complaint stated that total amount of R....
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.... account was settled prior to giving of cheque. He denied the suggestion that he lodged a report in police about missing cheque book in the year 2011. He deposed that the respondent has given cheque book by signing them. He denied the suggestion that the cheque in question was filled up as he colluded with the appellant. The respondent in his statement under Section 313 of the Code of Criminal Procedure for short the "Code" denied the prosecution case. The relevant question No. 9 and the answer given by the respondent are as under: "Q.9 Why the present case has been made out against you accused? Ans. This is a false case. My cheque has been misused." 12. DW1-Ranjit, Head Constable examined by the accused, has produced an entry dated 09.09.2011 regarding loss of his cheque book containing cheque Nos. 942801-942820. 13. The learned Trial Court returned a finding that mere production of entry Exh. DW1/A is not sufficient to prove that he has not issued the said cheque as such report could have been made with intention to create false evidence of the loss of cheque book. The court found that in fact if the cheque has been lost, the accused had several opportunities to lodge F....
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....f that respondent No. 1 was ordered to be acquitted." 17. The High Court again referred to the contradictions regarding empty apple cartons and the rate per carton, to hold that the appellant has failed to prove guilt of the respondent beyond reasonable doubt. 18. We find that the approach of the learned Trial Court and that of the High Court is perverse; irrational as well as suffers from material illegality and irregularity, which cannot be sustained in complaint filed under Section 138 of the Act. 19. A negotiable instrument including a cheque carries presumption of consideration in terms of Section 118(a) and under Section 139 of the Act. Sections 118(a) and 139 read as under: "118. Presumptions as to negotiable instruments.- Until the contrary is proved, the following presumptions shall be made:-- (a) of consideration -that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;.... xxx &nbs....
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.... Exports, it was held that mere denial of existence of debt will not serve any purpose but accused may adduce evidence to rebut the presumption. This Court held as under: "20. The accused in a trial under Section 138 of the Act has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case the non-existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. 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. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not insist in every case that the accused should disprove the non-existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not ser....
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.... open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant. 27. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better 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 defendant-accused cannot be expected to discharge an unduly high standard of proof." 24. In a judgment reported as Bir Singh v. Mukesh Kumar (2019) ....
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....sp; xxx xxx 36. Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt." 25. In other judgment reported as Rohitbhai Jivanlal Patel v. State of Gujarat and Another AIR 2019 SC 1876 this Court held as under: "18. So far the question of existence of basic ingredients for drawing of presumption under Sections 118 and 139 the NI Act is concerned, apparent it is that the accusedappellant could not deny his signature on the cheques in question that had been drawn in favour of the complainant on a bank account maintained by the accused for a sum of Rs. 3 lakhs each. The said cheques were....
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....sp; xxx 32. The result of discussion in the foregoing paragraphs is that the major considerations on which the Trial Court chose to proceed clearly show its fundamental error of approach where, even after drawing the presumption, it had proceeded as if the complainant was to prove his case beyond reasonable doubt. Such being the fundamental flaw on the part of the Trial Court, the High Court cannot be said to have acted illegally or having exceeded its jurisdiction in reversing the judgment of acquittal. As noticed hereinabove, in the present matter, the High Court has conscientiously and carefully taken into consideration the views of the Trial Court and after examining the evidence on record as a whole, found that the findings of the Trial Court are vitiated by perversity. Hence, interference by the High Court was inevitable; rather had to be made for just and proper decision of the matter." 26. In view of the judgm....
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....rsity when the due amount is said to be disputed only on account of discrepancy in the cartons, packing material or the rate to determine the total liability as if the appellant was proving his debt before the Civil Court. Therefore, it is presumed that the cheques in question were drawn for consideration and the holder of the cheques i.e., the appellant received the same in discharge of an existing debt. The onus, thereafter, shifts on the accusedappellant to establish a probable defence so as to rebut such a presumption, which onus has not been discharged by the respondent. 29. Learned counsel for the respondent has referred to the judgment reported in M. S. Narayana Menon v. State of Kerala (2006) 6 SCC 39 that evidence adduced by the complainant can be relied upon to rebut the presumption of consideration. However, said judgment has no applicability to the facts of the present case as the Trial Court has found that the presumption is not rebutted but still the Trial Court dismissed the complaint for the reason that the appellant has failed to prove the amount mentioned in the cheque as due amount. Once the cheque is proved to be issued it carries statutory presumption of cons....