TaxTMI 
TaxTMI 
2021 (12) TMI 377
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.... 2. The factual matrix, in brief, is that the appellant and the respondent are known to each other. Both of them hail from Udupi in Karnataka. The respondent filed a private complaint under Section 2(d) read with Section 200 of the Code of Criminal Procedure ('Cr.PC' for short) against the appellant seeking that he be punished for committing the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 ('NI Act' for short). The complaint was filed on 17.03.2004 before the II Additional Civil Judge (Junior Division) and JMFC, Udupi in P.C. No. 213 of 2004 which was thereafter registered as CC No. 3207 of 2004. It was the case of the respondent that the appellant carried on the business of money lending and land brokerage for which he used to take loan from the respondent as and when required. In one such transaction, as per the case put forth by the respondent is that the appellant borrowed a sum of Rs. 3,75,000/( Rupees three lakh seventy five thousand) from the respondent on 12.06.2003 and executed an 'on demand promissory note' and a receipt in acknowledgment. The appellant also issued a post dated cheque bearing No. 062589 for Rs. 4,00,000/( Rupees four lakhs)....
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....nt to discharge the legal debt or liability and thereby committed the offence punishable under Section 138 N.I Act. The learned trial Judge having accepted the version put forth by the appellant passed an order of acquittal. The learned Judge of the High Court, has on the other hand, accepted the case of the respondent herein and taking into account the presumption that had arisen on the cheque being issued and such presumption not being rebutted for the reasons indicated by it, has allowed the appeal and convicted the appellant which has resulted in this appeal. 6. We have heard Mr. S.N. Bhat, learned counsel for the appellant, Mr. Ranji Thomas, learned senior counsel with Mr. V.N. Raghupathy, learned counsel for the respondent and perused the appeal papers. 7. From the rival contentions urged before us and the facts which emerge from the records, it is clear that cheque bearing No.062589 dated 12.12.2003 drawn on Corporation Bank, Ambalpady Branch, Udupi for the sum of Rs. 4,00,000/( Rupees four lakh), which is the subject matter of the complaint in CC No.3207 of 2004, has been brought on record. However, in the light of the defence that was raised, the point which arises for c....
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....rect or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies. In such an event, the plaintiff is entitled under law to rely upon all the evidence led in the case including that of the plaintiff as well. In case, where the defendant fails to discharge the initial onus of proof by showing the nonexistence of the consideration, the plaintiff would invariably be held entitled to the benefit of presumption arising under Section 118(a) in his favour. The court may not insist upon the defendant to disprove the existence of consideration by leading direct evidence as the existence of negative evidence is neither possible nor contemplated and even if led, is to be seen with a doubt.' This Court, therefore, clearly opined that it is not necessary for the defendant to disprove the existence of consideration by way of direct evidence. 32. The standard of proof evidently is preponderance of probabilities. Inference of preponderance of probabilities can be drawn not only from the materials on record but also by reference to the circumstances upon which he relies. 33. Presumption drawn under a statute has only an evidentiary valu....
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....absence of any cogent evidence to show that the cheque was not issued in discharge of a debt." 18. Considering the fact that there has been an admitted business relationship between the parties, we are of the opinion that the defence raised by the appellants does not inspire confidence or meet the standard of "preponderance of probability". In the absence of any other relevant material, it appears to us that the High Court did not err in discarding the appellants' defence and upholding the onus imposed upon them in terms of Section 118 and Section 139 of NIA. 19. As regards the claim of compensation raised on behalf of the respondent, we are conscious of the settled principles that the object of Chapter XVII of NIA is not only punitive but also compensatory and restitutive. The provisions of NIA envision a single window for criminal liability for dishonour of cheque as well as civil liability for realisation of the cheque amount. It is also well settled that there needs to be a consistent approach towards awarding compensation and unless there exist special circumstances, the courts should uniformly levy fine up to twice the cheque amount along with simple interest @ 9% p.a.....
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....9 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities. 25.3. To rebut the presumption, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely. 25.4. That it is not necessary for the accused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden. 25.5. It is not necessary for the accused to come in the witness box to support his defence." 11. The position of law as noted above makes it crystal clear that when a cheque is drawn out and is relied upon by the drawee, it will raise a presumption that it is drawn towards a consideration which is a legally recoverable amount; such presumption of course, is rebuttable by proving to the contrary. The onus is on the accused to raise a probab....
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....er proceedings only as a passing reference. In the instant case, what needs to be noted is the defence that had been put forth before the learned Magistrate to defeat the case of the respondent herein, so as to consider whether such contention of the appellant can still be considered as a probable defence. The defence put forth by the appellant in the instant case i.e., Section 138 NI Act proceedings in C.C. No.3207 of 2004 as referred to by the learned Magistrate in the course of the judgment, reads as hereunder: " It is further alleged that during the year 2003, in order to clear off the dues to some others, the accused has decided to sell the above referred property and the accused expressed his desire to sell his property before the complainant. At that time, the complainant proposed to purchase the said property from the accused for Rs. 3,00,000/, but the accused has refused to sell the said property to the complainant for the above said amount of Rs. 3,00,000/- since, the property is worth Rs. 7 lakh. In view of the proposal made by the complainant for small amount, the accused is declined to sell his property to him. Thereafter, the accused himself began to search t....
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....ingly, the case was registered against the complainant for the offences punishable u/s. 365, 342, 323 and 506 of IPC and accordingly, the cheque in question and some other documents also misused by the complainant against the accused. In the light of the above said defence, the accused humbly prayed for acquittal." 15. A close perusal of the above indicates that the sum and substance of the defence is that the documents and cheque had been obtained by the respondent on 20.01.2004 by threatening the appellant. In that regard, the circumstances thereto were referred and it has been categorically stated that the appellant had filed a complaint, pursuant to which a case was registered against the respondent for the offence punishable under Sections 365, 342, 323 and 506 of IPC. This makes it relevant for us to take note of the aspect that was considered in the above noted criminal complaint filed by the appellant. The said case was registered as C.C. No.6318 of 2004. In that case, the learned Magistrate, on taking note of the allegation made by the appellant, had raised the points for consideration and the findings were summarised. They are as follows: " 5. Heard both sides and per....