TaxTMI 
TaxTMI 
2021 (1) TMI 855
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.... A.G.A. for the State. It is submitted by learned counsel for the applicant that the present matter relates to dishonour of cheque and the said matter can be well considered by Mediation Centre of this Court. It is directed that applicant shall deposit a sum of Rs. 15,000/- within two weeks from today with the Mediation Centre of which 50% shall be paid to the opposite party no. 2 for appearance before the Mediation Centre. The matter is remitted to the Mediation Centre with the direction that same may be decided after giving notices to both the parties. It is directed that Mediation Centre shall decide the matter expeditiously preferably within a period of three months. Thereafter the case shall be listed before appropriate Bench in the second week of September, 2019. Till the next date of listing, arrest of the applicant in Complaint Case No.14 of 2019, (Smt. Gyan Devi Vs. Ashok Ram Dular Vishwakarma), under Section 138 of Negotiable Instrument Act, Police Station Auraiya, District Bhadhoi, pending in the Court of the Additional Chief Judicial Magistrate, Bhadohi, Gyanpur, shall be kept in abeyance. After depositing the amount....
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....at on earlier occasions also just to linger on the matter, a request has been made on behalf of the applicant to pass over the case. In such a situation, though the case is passed over but the interim order granted earlier on 28.06.2019 stands vacated. The concerned court below may proceed with the case in accordance with law. List this matter on 25th November, 2020. " 4. This Bench heard Mr. Sarveshwari Prasad, Advocate assisted by Mrs. Ushma Mishra, learned counsel for the applicant, Sri Ganesh Shanker Srivastava, learned counsel for complainant/opposite party no.2 and Mr. Pankaj Srivastava, learned A.GA. for the State as well as perused the entire material available on record. 5. The relevant facts, as are borne out from the records of the present application are as follows: "A complaint case has been moved by opposite party no.2, namely, Mrs. Gyan Devi Brijlal Bharti on on 3rd January, 2019 before the Court of Additional Chief Judicial Magistrate, Bhadohi at Gyanpur under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the "N.I. Act"). In the said complaint case, it has been alleged by the complainant tha....
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.... Mr. Bhalachandra Anandrao Patil on 17th August, 2017. It has further been alleged in the aforesaid complaint that due to financial hardship faced by the said company for the year 2016-2017, the accused-applicant also promised the complainant that he would pay her Rs. 1,00,000/- (rupees one lac only) per month from April, 2016 but the accused-applicant failed to pay the aforesaid money. Further the accused-applicant was not loyal in disclosing the day to day working towards complainant, hence she used to request the accused-applicant to disclose the books of accounts, balance-sheet, profit but he always refused to disclose the same to her and also used to abuse her with wrong words. The accused-applicant had also refused to give 25% share in the land of the firm and value of the machinery of the said firm, due to which a dispute was arisen between the complainant and accused-applicant. Thereafter due to non-fulfillment of the terms and conditions of the memorandum of understanding so introduced between them, the complainant threatened the accused-applicant that she will file police complaint against him and she will also go to the court for the wrongful acts and cheating d....
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....d-applicant is to commit and perpetuate a fraud upon the complainant and indulge into cheating and criminal misappropriation. The accused-applicant caused wrongful loss to the complainant. The accused-applicant has failed to make payment of cheques as demanded by the legal notice, hence a case for the offence punishable under Section 138 N.I. Act is made out against him. After filing of the aforesaid complainant in the court of Additional Chief Judicial Magistrate, Bhadohi at Gyanpur under Section 138 N.I. Act, complainant/opposite party no.2 filed an affidavit under Section 200 Cr.P.C. on 2nd January, 2019. Thereafter, witnesses, namely, Devashish Bharti and Sant Lal, in support of the aforesaid complaint, have also filed their affidavits under Section 202 Cr.P.C. on 28th January, 2019. The said complaint case has been registered as Complaint Case No. 14 of 2019 (Smt. Gyan Devi Vs. Ashok Ram Dular Vishwakarma) under Section 138 of Negotiable Instrument Act, Police Station-Aurai, District-Bhadohi, pending in the Court of Additional Chief Judicial Magistrate, Bhadohi, Gyanpur. Considering the complaint and the affidavits of the complainant and her witnesses under Sections 2....
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..../- from the month of September, 2013 to July, 2016. IV. Opposite party no.2 had threatened the applicant to return not only the principle amount due but also added Rs. 7 lacs over and above the principle amount (which has already been paid) to which a parallel proceedings were initiated by her against the applicant by means of Complaint Case No. 2917 of 2018 before the Judicial Magistrate, First Class Pimpri at Pimpri, Pune (Maharashtra). V. Prior to even establishing the right to recovery from the cheques in contention, it is disclosed that the entire amount of Rs. 80 lacs had already been paid to opposite party no.2 by the applicant through four cheques i.e. (i) cheque no. 111185 amounting to Rs. 14,00,000/-, (ii) cheque no. 36963 amounting to Rs. 25,00,000/-, cheque no. 36974 amounting to Rs. 16,00,000/- and cheque no. 123523 amounting to Rs. 25,00,000/-, which were issued from Dena Bank. (VI) The agreement in the form of memorandum of understanding dated 16/17th August, 2017 entered into between the applicant and opposite party no.2, which has been so heavily relied upon by opposite party no.2 in support of her case is mere a waste paper and has no re....
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....trength of the aforesaid submissions, it is submitted by learned counsel for the applicants that the proceedings of the above mentioned complaint case are liable to be quashed by this Court. 7. Per contra, learned A.G.A. has opposed the contentions raised on behalf of the applicant by submitting that there is no illegality or infirmity in the impugned summoning order and the proceedings initiated by opposite party no.2 against the applicant under Section 138 N.I. Act. He, therefore, submits that the present application is liable to be rejected. 8. On the other-hand, learned counsel for opposite party no.2 raised following contentions for rejecting the present application under Section 482 Cr.P.C.: (i) The accused-applicant is carrying business under the name and style of "M/s. Vishwakarma Dish Ends Works", which is a partnership firm and "M/s. Proficient Industries India Pvt. Ltd.", which is a private company. Both the firms are running at 81-B, General Block, MIDC Bhosari, Pune. The accused-applicant, who is one of the partner of the said firm and company, is a director and another director of the firm and company. The accused-applicant was in need of some finance f....
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....cant, he again promised her that he will return initial investment of Rs. 80,00,000/- to her which she had invested and he further promised to pay Rs. 87, 00,000/- to her towards shares against investment made by opposite party no.2 on assurance of the accused-applicant. In consideration of the aforesaid assurance given by the accused-applicant, he gave four cheques to her amounting to Rs. 80,00,000/- which were duly signed and issued by the accused-applicant in favour of opposite party no.2 in the capacity of one of the Director of the said firm and company. The accused applicant also accepted his legal liability to Rs. 87,00,000/- to opposite party no.2 against legal debt and against the said liability, he had issued and handed over various cheques amounting to Rs. 87,00,000/- to opposite party no.2 for discharging his legal liability. When the aforesaid four cheques amounting to Rs. 80,00,000/- were deposited by opposite party no.2 on 20th October, 2018 for encashment of the same in Kashi Gomti Smyut Gramin Bank, Branch Ugapur, Bhadohi where her bank account was maintained, the aforesaid four cheques were dishonoured and returned from the said bank with reasons "Funds Insufficie....
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....2 Cr.P.C., perusing the entire evidence and after hearing the learned counsel for the applicant, has found that a prima facie case under Section 138 N.I. Act is made out against the accused-applicant. Thereafter, the The Additional Chief Judicial Magistrate, Bhadohi at Gyanpur has issued process of law against the applicant vide order dated 13th March, 2019, which is legal and justifiable in the eyes of law. (iv) Opposite party no.2 has also filed another complaint bearing Complaint Case No. 2917 of 2018 before Judicial Magistrate, First Class, Pimpri, at Pimpri, Pune for dishnouring of cheque no. 000015 dated 31st August, 2018 amounting to Rs. 7,00,000/- which was also duly signed and issued by accused-applicant in favour of opposite party no.2, a copy of the complaint no. 2917 of 2018 has been enclosed as Annexure No.-C.A-6 to the counter affidavit filed on her behalf. In the said complaint case, non-bailable warrant has also been issued against the accused-applicant by the Judicial Magistrate, First Class, Pimpri. The said complaint case has been filed by the complaint at Pimpri Pune because the cheque no. 000015 amounting to Rs. 7,00,000/- drawn on 4111485003 Kotak Mah....
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.... date --that every negotiable instrument bearing a date was made or drawn on such date; (c) as to time of acceptance --that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity; (d) as to time of transfer --that every transfer of a negotiable instrument was made before its maturity; (e) as to order of indorsements --that the indorsements appearing upon a negotiable instrument were made in the order in which they appear thereon; (f) as to stamps --that a lost promissory note, bill of exchange or cheque was duly stamped; (g) that holder is a holder in due course --that the holder of a negotiable instrument is a holder in due course: Provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him. 138. Dishonour of cheque for insufficiency, etc., of funds in the account. --Where any ....
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....is essential that the cheque must have been issued in discharge of legal debt or liability by accused on an account maintained by him with a bank and on presentation of such cheque for encashment within its period of validity, the cheque must have been returned unpaid. The payee of the cheque must have issued legal notice of demand within 30 days from the receipt of the information by him from the bank regarding such dishonor and where the drawer of the cheque fails to make the payment within 15 days of the receipt of the aforesaid legal demand notice, cause of action under Section 138 NI Act arises. 12. From the Chapter XVII comprising Sections 138 to 142 of the Negotiable Instruments Act, which was introduced in statute by Act 66 of 1988, it is also apparently clear that the object underlying the provision contained in the said Chapter was aimed at inculcating faith in the efficacy of banking operations and giving credibility to negotiable instruments in business and day to day transactions by making dishonour of such instruments an offence. A negotiable instrument, whether the same is in the form of a promissory note or a cheque is by its very nature a solemn document that ca....
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....esumed to be innocent unless that presumption is rebutted by the prosecution by production of evidence as may show him to be guilty of the offence with which he is charged. The burden of proving the guilt of the accused is upon the prosecution and unless it relieves itself of that burden, the courts cannot record a finding of the guilt of the accused. There are certain cases in which statutory presumptions arise regarding the guilt of the accused, but the burden even in those cases is upon the prosecution to prove the existence of facts which have to be present before the presumption can be drawn. Once those facts are shown by the prosecution to exist, the Court can raise the statutory presumption and it would, in such an event, be for the accused to rebut the presumption. The onus even in such cases upon the accused is not as heavy as is normally upon the prosecution to prove the guilt of the accused. If some material is brought on the record consistent with the innocence of the accused which may reasonably be true, even though it is not positively proved to be true, the accused would be entitled to acquittal." 15. Further the Apex Court in Bharat Barrel & Drum Manufacturing Co....
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.... believe that the consideration did not exist or its non- existence was so probable that a prudent man would, under the circumstances of the case, shall act upon the plea that it did not exist......" 16. In M.S. Narayana Menon Alias Mani Vs. State of Kerala and Another, reported in (2006) 6 SCC 39, the Apex Court had considered Sections 118(a), 138 and 139 of the Act, 1881 and held that that presumptions both under Sections 118(a) and 139 are rebuttable in nature. Explaining the expressions "may presume" and "shall presume" referring to an earlier judgment, following was held in paragraph No.28:- "28. What would be the effect of the expressions "may presume", ''shall presume" and "conclusive proof" has been considered by this Court in Union of India v. Pramod Gupta, (2005) 12 SCC 1, in the following terms: (SCC pp. 30-31, para 52) "It is true that the legislature used two different phraseologies ''shall be presumed' and ''may be presumed' in Section 42 of the Punjab Land Revenue Act and furthermore although provided for the mode and manner of rebuttal of such presumption as regards the right to mines and minerals said to be vested in the ....
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....an accused for discharging the burden of proof placed upon him under a statute need not examine himself. He may discharge his burden on the basis of the materials already brought on record. Following was laid down in Paragraph No.32:- "32. An accused for discharging the burden of proof placed upon him under a statute need not examine himself. He may discharge his burden on the basis of the materials already brought on record. An accused has a constitutional right to maintain silence. Standard of proof on the part of an accused and that of the prosecution in a criminal case is different." 20. The Apex Court again reiterated that whereas prosecution must prove the guilt of an accused beyond all reasonable doubt, the standard of proof so as to prove a defence on the part of an accused is "preponderance of probabilities". In paragraph No.34, following was laid down:- "34. Furthermore, whereas prosecution must prove the guilt of an accused beyond all reasonable doubt, the standard of proof so as to prove a defence on the part of an accused is "preponderance of probabilities". Inference of preponderance of probabilities can be drawn not only from the materials brough....
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....idence 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 serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non-existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist..............." 22. A Three-Judge Bench of the Apex Court in Rangappa Vs. Sri Mohan, reported in (2010) 11 SCC 441 had elaborately considered provisions of Sections 138 and 139. In the above case, trial court had acquitted the accused in a case relating to dishonour of cheque under Section 138. The High Court had reversed the judgment of the trial court convicting the accused. In the above case, the accused had admitted signatures on the cheque. This Court held that where the fact of s....
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....d 28, following was laid down:- "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. 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 S....
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....e aforesaid cheques, opposite party no.2 sent legal notice to the accused-applicant through her Advocate on 22nd November, 2018 and the same has been received by the accused-applicant on 26th November, 2018, i.e. within fifteen days from the date of receiving of intimation from the bank about dishonour of cheques as provided under the provisions of N.I. Act. When the accused-applicant after receiving legal notice dated 22nd/26th November, 2018, has failed to pay the amount of dishonoured cheques within fifteen days, opposite party no.2 filed a complaint against the accused-applicant on 3rd January, 2019. From the aforesaid it is clear that all the ingredients provided under Section 138 N.I. Act are fully satisfied in filing of the complaint by opposite party no.2 against the accused-applicant. Therefore, a case for the offence punishable under Section 138 N.I. Act is made out against the accused-applicant. 28. The contention of opposite party no.2 that Additional Chief Judicial Magistrate, Bhadohi, Gyanpur has every right to try the complaint case filed by opposite party no.2 under Section 138 N.I. Act, has force, as her bank account has been maintained at Kashi Gomti Sanyukt Gr....
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....tion 138 simply postpones/defers institution of criminal proceedings and taking of cognizance by the Court till such time cause of action in terms of clause (c) of proviso accrues to the complainant. (vi) Once the cause of action accrues to the complainant, the jurisdiction of the Court to try the case will be determined by reference to the place where the cheque is dishonoured. (vii) The general rule stipulated under Section 177 of Cr.P.C applies to cases under Section 138 of the Negotiable Instruments Act. Prosecution in such cases can, therefore, be launched against the drawer of the cheque only before the Court within whose jurisdiction the dishonour takes place except in situations where the offence of dishonour of the cheque punishable under Section 138 is committed along with other offences in a single transaction within the meaning of Section 220(1) read with Section 184 of the Code of Criminal Procedure or is covered by the provisions of Section 182(1) read with Sections 184 and 220 thereof." 29. The contention of the learned counsel for the applicant that the present proceedings initiated by opposite party no.2 against the applicant under Section 138 ....
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....o. 36963 amounting to Rs. 25,00,000/-, cheque no. 36974 amounting to Rs. 16,00,000/- and cheque no. 123523 amounting to Rs. 25,00,000/-, which were issued from Dena Bank, has no relevance in the facts of the present case, as any Court of law under the provisions of Section 138 N.I. Act can only see whether all ingredients mentioned in the said section are satisfied and prima facie a case for the offence punishable under the said Section is made out or not. As already noticed by this Court herein above, four cheques bearing nos. 041564 dated 7th September, 2018, 041565 dated 14th September, 2018, 041566 dated 21st September, 2018 and 041567 dated 28th September, 2018 amounting to Rs. 80,00,000/- drawn on Dena Bank, Bhosari Branch-Pune have been issued by the accused-applicant in favour of opposite party no.2, which have duly been signed by him and the same have been dishnoured and returned to her. Therefore, a prima facie case for the offence under Section 138 N.I. is made out against the applicant. However, it is open for the applicant to initiate such proceedings as he may be permissible under law for recovery of entire amount paid by him, if any, like he has already filed a suit ....