TaxTMI 
TaxTMI 
2021 (7) TMI 340
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....ng complainant filed a complaint under Section 138 of the Negotiable Instruments Act, 1981(NI Act, for short) in the court of the CJM, Gomati Judicial District, Udaipur on 23.06.2016 alleging, inter alia, that accused Alak Dey [Respondent No.1 herein] borrowed a sum of Rs. 2 Lakhs from the petitioner in cash on 10.03.2016 to discharge his personal obligations. While borrowing the said amount of money, the respondent had undertaken that he would return the loan within a period of 01 month by 10.04.2016. The accused respondent also issued a cheque bearing No.157066 dated 10.03.2016 of a sum of Rs. 2 lakhs drawn on Tripura Gramin Bank branch at Udaipur against his account No.8070012405601 in favour of the petitioner to secure the said debt. The petitioner deposited the said cheque with his bank for crediting the said amount to his account No.31328439774 in the SBI Garji branch. But on 24.05.2016 it was intimated to him by his bank that the cheque was dishonoured by the bank due to insufficient fund in the account of the accused respondent No.1. [3] A demand notice was then issued by the petitioner to respondent No.1 through his lawyer demanding payment of Rs. 2 lakhs within 15 days....
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....Branch Manager, Garji branch of SBI as PW-3 and Sri Pranab Bhowmik, Branch Manager, Tripura Gramin Bank in the Udaipur branch as PW-4. Apart from examining the said witnesses the complainant petitioner relied on as many as 9 exhibits. [8] After the recording of prosecution evidence was over, statement of the accused respondent was recorded under Section 313 Cr.P.C. In reply, accused respondent claimed that the entire prosecution evidence appearing against him was false. In reply to question No.7 accused respondent stated that when the complainant petitioner promised to pay money to him, he issued a blank cheque in favour of the complainant petitioner. Accused respondent admitted that he received demand notice from the petitioner and despite receiving such notice he did not pay any money to the complainant petitioner. He also admitted that the cheque book from which the cheque leaf was issued by him to the complainant petitioner belonged to him. Accused respondent, however, declined to adduce any evidence on his defence. [9] Having appreciated the entire evidence, both oral and documentary, adduced by the parties and after hearing the counsel of the parties at length the learn....
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....d the said cheque was dishonoured by the bank due to insufficient fund in the account of the accused. Accordingly, Point No.(i)&(ii) are decided in affirmative and in favour of the complainant but against the accused. 12. Point No.(iii):- In this point, I have to decide whether the accused failed to pay the money on receipt of demand notice. In this respect, I find, P.W.1, the complainant deposed that on 30.05.2016 through his lawyer Mr. Kuntal Das he gave demand notice to accused by registered post demanding payment of the cheque amount Rs. 2,00,000/- only from accused and accused received the registered notice but did not pay any amount to him. P.W.2, Sri Subodh Kr. Singh, the Postal Inspector deposed before this Court that he appeared before this Court on receipt of summons and he has produced documents relating to delivery of registered article No.RE 434887872IN, dated 31.05.2016 addressed to accused Alok Dey and the notice was delivered on 04.06.2016 and identified the letter and delivery slip which is marked as Ext.4 in two sheets. From Ext.2, the demand notice dated 30.05.2016, I find, complainant issued demand notice to accused. From Ext.3, the postal receipt dated....
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....he judgment and order of conviction and sentence of the accused respondent observing as under: 11. In a case U/S 138 of the N.I. Act, mere proving that the cheque in dispute got bounced is not sufficient but it must be proved that bounced cheque was returned unpaid but in this case though P.W.4 stated that cheque got bounced because of insufficiency of fund in account of the accused and was returned unpaid but the returning of cheque was not proved. 12. In a case under Section138 of N.I. Act the accused does not need to discharge his or her liability beyond the shadow of reasonable doubt. He just needs to create holes in the case set out by the complainant. Accused can say that the version brought forth by the complainant is inherently unbelievable and therefore the case of prosecution cannot stand or the accused can give his version of the story and say that on the basis of his version the story of the complainant cannot be believed. In the first situation the accused has nothing to do except to point inherent inconsistency in the version of the complainant. 13. It is settled position of law that the standard/degree of proof in a criminal case stands on ....
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....stence of debt or liability is not a discretionary presumption, it is a statutory presumption and a heavy burden is cast on the accused to rebut such presumption by adducing convincing evidence. It is contended by Mr.Bhowmik, learned counsel that such presumption cannot be rebutted by merely offering an explanation. It can be rebutted only by adducing evidence to the fact that he had no debt or legal liability to be discharged towards the complainant. In support of his contention Mr. Bhowmik, learned counsel has referred to the judgment dated 10.02.2020 of the Apex Court in Rajeshbhai Muljibhai Patel and Ors.etc. vs. State of Gujarat and Anr.etc.[Crl.Appeal No.251-252 of 2020] wherein the Apex Court has held that once the issuance of the cheque is admitted/ established presumption under Section 139 NI Act would arise in favour of the holder of the cheque that it was issued in the discharge of an existing debt or liability. The burden lies upon the accused to rebut such presumption by adducing evidence. The observation of the Apex Court in paragraph 20 of the said judgment is as under: "20. The High Court, in our view, erred in quashing the criminal case in C.C.No.367/2016 ....
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....blank cheques and stated if the amount is not returned within two years then by presenting the cheques the same may be encashed. This assertion was assumed by the High Court to mean that the cheques were given only by way of security. Having said that, the High Court proceeded to hold that the "security" offered was not for the discharge of any debt or any liability. Resultantly, it came to hold that the action under Section 138 of the Negotiable Instruments Act, 1881 cannot proceed against the accused any further. 4. We have heard counsel for the parties. 5. In our opinion, the High Court has muddled the entire issue. The averment in the complaint does indicate that the signed cheques were handed over by the accused to the complainant. The cheques were given by way of security, is a matter of defence. Further, it was not for the discharge of any debt or any liability is also a matter of defence. The relevant facts to countenance the defence will have to be proved - that such security could not be treated as debt or other liability of the accused. That would be a triable issue. We say so because, handing over of the cheques by way of security per se would not extr....
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.... of the learned Chief Judicial Magistrate in his judgment dated 11.09.2018 while dismissing the compliant of the petitioner. [emphasis supplied]" [15] Mr.S.Sarkar, learned Sr.Advocate appearing fort the accused respondent on the other hand argued that the learned appellate court after complete re-appreciation and reconsideration of the entire evidence viewed that the case was not proved against the accused respondent and by a detailed judgment set aside his conviction and sentence. It was contended by Mr.Sarkar, learned Sr.Advocate that it is a settled proposition of law that where 2 views are possible, the view favourable to the accused has to be taken by the court. In support of his contention, Mr.Sarkar, learned Sr.Advocate has relied on the decision of the Apex Court in Chandrappa and Ors.Vs. State of Karnataka reported in (2007) 4 SCC 415 wherein the Apex Court has held as under: "44. In our view, if in the light of above circumstances, the trial Court felt that the accused could get benefit of doubt, the said view cannot be held to be illegal, improper or contrary to law. Hence, even though we are of the opinion that in an appeal against acquittal, powers of appel....
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.... on 30.05.2016 demanding a sum of rupees two lakhs with interest. Despite receiving the notice accused did not turn up to repay the loan to the complainant. Eventually the complainant lodged the complaint under Section 138 NI Act in the court of the Chief Judicial Magistrate at Udaipur. [17] He was cross examined by the counsel of the accused at length. He stated in the cross examination that he could not produce the impugned cheque along with his complaint. He also stated that he was unable to produce the cheque. In reply to a suggestion made by the counsel of the accused, complainant stated that it was not a fact that he was unable to produce the cheque because no such cheque was issued at all by the accused. He also denied the suggestion of the accused that due to his enmity with the accused he lodged a false case against him. [18] PW-2 is a Postal Inspector of Udaipur Head Post Office who turned to testify in court on 17.12.2016. The PW stated that the registered article no.RE434887872IN dated 31.05.2016 was delivered to the accused on 04.06.2016. He identified the delivery slips which were exhibited and marked as Exhibit-4. The article contained the statutory demand noti....
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....omplainant that the impugned cheque received from him was sent to Tripura Gramin Bank for collection. But the said cheque was returned from bank for insufficient balance in the account of accused Alak Dey. It was also informed by the Branch Manager, SBI that during the course of return, the cheque was misplaced from the custody of the bank which was reported to police. The complainant was also asked to collect a fresh cheque from the accused after confirming his balance. The said letter which is marked as Exhibit-1 reads as follows: "State Bank of India State Bank of India Garjee Branch (CODE NO-9129) Matabari, Udaipur, Tripura-799013 BM/GB/2016-2017/030 Date: 24/05/2016 Mr.Sankar Das Matabari, PO Matabari Gomati, Tripura Dear Sir, CONFIRMATION REGARDING PAYMENT OF CHEQUE CUSTOMER NAME: ALOK DAY(M:8014898147) ACCOUNT NO. 8070012405601 CHEQUE NO.157066 DT.10/03/2016 AMT.Rs. 200000/- With reference to the above we would like a piece of information, the branch has received cheque from you bearing A/c No. 31328439774 for collection of on your behalf. 2. The cheque ....
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....ments. [22] From the evidence discussed herein above, it would emerge that the impugned cheque for a sum of Rs. 2,00,000/- was issued by the accused in favour of the complainant which was presented by the complainant to his banker i.e. SBI for encashment and crediting the same in his account. The said cheque was sent to Tripura Gramin Bank from SBI for collection. But the cheque was bounced from the Tripura Gramin Bank on which it was drawn for insufficiency of fund in the account of the accused. It also stands proved that the complainant issued statutory demand notice to the accused which was received by him and despite receipt of the notice, the accused did not pay the loan of the said amount of Rs. 2,00,000/- to the complainant. Eventually the complainant lodged the complaint in the court of the CJM at Udaipur. [23] It is true that the complainant could not produce the impugned cheque at the trial. But his failure in presenting the cheque before the court does not affect his case because the Branch Manager of SBI at Udaipur branch had categorically stated in his evidence that the said cheque was missing from the custody of the bank which was also reported to the jurisdicti....
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....which cast evidentiary burden on the accused to disprove the presumptions. Relevant passages of the judgment are as under: "21. The appellant's submission that the cheques were not drawn for the 'discharge in whole or in part of any debt or other liability' is answered by the third presumption available to the Bank under Section 139 of the Negotiable Instruments Act. This section provides that : "139. It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability. "The effect of these presumptions is to place the evidential burden on the appellant of proving that the cheque was not received by the Bank towards the discharge of any liability. 22. Because both Sections 138 and 139 require that the Court "shall presume" the liability of the drawer of the cheques for the amounts for which the cheques are drawn, as noted in State of Madras vs. A. Vaidyanatha Iyer, AIR 1958 SC 61, it is obligatory on the Court to raise this presumption in every case where the factual basis for the raising of ....
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....non-existence of consideration by bringing on record such facts and circumstances which would lead the Court to believe the nonexistence of the consideration either by direct evidence or by preponderance of probabilities showing that the existence of consideration was improbable, doubtful or illegal....." [29] In the instant case, apparently the accused petitioner did not lead any evidence in rebuttal of such statutory presumptions. He has also failed to bring on record such facts and circumstances which would lead the courts below to believe that the liability, attributed to the accused petitioner was improbable or doubtful. [30] In the case of Kishan Rao vs. Shankargouda reported in (2018) 8 SCC 165, the Apex Court has succinctly held that mere denial of existence of debt shall not serve any purpose in a proceeding under Section 138, NI Act. Something which is provable has to be brought on record for getting the burden of proof shifted to the complainant. Observation of the Apex Court in this regard in paragraph 20 of the said judgment is as under: "20. This Court held that the accused may adduce evidence to rebut the presumption, but mere denial regarding existenc....