TaxTMI 
TaxTMI 
TaxTMI 
2022 (4) TMI 63
X X X X Extracts X X X X
X X X X Extracts X X X X
....ave promised to return the said amount on or before August 2017. ii) An agreement is also stated to be executed in this regard, whereby, the accused-respondent admitted to having received the loan of Rs. 2,40,000/- as aforesaid. iii) When the appellant-complainant approached respondent-accused for repayment of the same, the respondent issued cheque No.150422 dated 05.08.2017 from her bank account with Allahabad Bank. The said cheque was however returned by the bank with memo dated 09.08.2017 with remarks 'insufficient funds'. iv) The appellant, thereafter, sent a legal notice raising a demand for the amount, however, upon failure on the part of the respondent to pay the amount despite demand, the complaint was instituted under Section 138 of Negotiable Instruments Act. v) The appellant appeared as CW-1 and did not lead any further evidence. No evidence was also led by the accused-respondent apart from cross-examination of the appellant. vi) Upon consideration of the same, the Chief Judicial Magistrate, Tarn Taran held that the complainant has failed to prove any legal debt or liability against the respondent and hence in absence of any legally enforceable debt, th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....wing such a cheque; was missing. If this is permitted then the drawer of the cheque can frustrate the provisions of Negotiable Instruments Act in; virtually; every case. He can get the cheque prepared as per his choice from some other person and can subsequently start pleading that he had not filled up the body of the cheque or that he had not consented to the filling of the body of the cheque. In such a situation, the payee or the holder in due course would have no means to prove his consent. Otherwise also, since the cheque is not a document which is required to be attested by witnesses for being a valid document, therefore, the complainant is under no legal obligation to examine a witness to prove the due execution of the same. On the contrary, if the drawer of the cheque takes a plea that his consent qua drawing of the cheque was missing, then it is, exclusively; for the drawer to prove the fact that he had not consented to the filling of the body of the cheque. 4. Reliance was further placed upon the judgment of the Hon'ble Supreme Court in the matter of Bir Singh Vs. Mukesh Kumar, 2019 (2) RCR (Criminal) 1, the relevant extract of the judgment is reproduced hereinbelow:-....
X X X X Extracts X X X X
X X X X Extracts X X X X
....plainant present in the Court. I had not monitory transaction with the complainant. I have no legally enforceable debt towards the complainant. The complaint is false and based upon false facts' 7. The relevant extract of the cross-examination of the respondent/complainant reads thus:- xxxxxxxxx. It was 28,06.2016 when the agreement he accused to Priya Kapoor after signing the same and it was a blank cheque. Xxxxxxxxxxx. It is correct that I withdrawn the amount of Rs. 2,50,000/- on 13.06.2016, Rs, 1,30,000/- on 14,06.2016 and Rs. 1,30,000/- on 15.06.2016 and Rs. 2,00,000/- on 24.06.2016 from my savings account. It is wrong to suggest that accused was having committee with Priya Kapoor and accused had handed over blank security cheque for the same to Priya Kapoor, which has been misused by me, in connivance with said Priya Kapoor. It is wrong to suggest that no amount was taken by the accused form me nor she is liable to pay any amount to me. Xxxxxxxxxxx. 8. It is also pertinent to refer to the specific application filed by the respondent/accused under Section 145 of the Negotiable Instrument Act, wherein it was stated as under:- 2. That the accused/applicant is not in vi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eof. Since the document Ex.C6 is not proved in accordance with law, therefore, the same provides o help to the complainant 5. The complainant claims to have family relationship with theaccused and claimed in his cross-examination that the accused is doing the government job in Government Senior Secondary School (Boys), Tarn Taran. However, on the Service record being summoned by the accused from the said school, it was reported by the school authorities that no such person, namely, Raj Kaur wife of Sukchain Singh, has worked with the School, Even the complainant, who has claimed in the complaint to have close family relations with the accused, has failed to divulge the details of the children of the accused. 6. The complainant has not brought on record his income taxreturn for the concerned period, even when he has specifically mentioned himself to be businessman and must have filed income tax returns. 7. Last but not the least, it is admitted that the complainant is abusinessman and the accused is a laborer and yet the complainant had not taken any receipt on the day when the alleged amount was advanced by the complainant to the accused. The alleged agreement Ex.C6 is of d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion provides that "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 the presumption had been established. "It introduces an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the accused" (ibid). Such a presumption is a presumption of law, as distinguished from a presumption of fact which describes provisions by which the court "may presume" a certain state of affairs. Presumptions are rules of evidence and do not conflict with the presumption of in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing on the accused person in such a case would not be as light as it is where a presumption is raised under S.114 of the Evidence Act and cannot be held to be discharged merely by reason of the fact that the explanation offered by the accused is reasonable and probable. It must further be shown that the explanation is a true one. The words 'unless the contrary is proved' which occur in this provision make it clear that the presumption has to be rebutted by 'proof' and not by a bare explanation which is merely plausible. A fact is said to be proved when its existence is directly established or when upon the material before it the Court finds its existence to be so probable that a reasonable man would act on the supposition that it exists. Unless, therefore, the explanation is supported by proof, the presumption created by the provision cannot be said to be rebutted......" [See also V.D. Jhingan vs. State of Uttar Pradesh AIR 1966 SC 1762; Sailendranath Bose vs. The State of Bihar AIR 1968 SC 1292 and Ram Krishna Bedu Rane vs. State of Maharashtra1973 (1) SCC 366.] (Emphasis supplied) 13. It was, thus, held that the obligation on the prosecution may be discharged w....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... namely, (1) "may presume" (rebuttable), (2) "shall presume" (rebuttable) and (3) "conclusive presumptions" (irrebuttable). The term `presumption' is used to designate an inference, affirmative or disaffirmative of the existence a fact, conveniently called the "presumed fact" drawn by a judicial tribunal, by a process of probable reasoning from some matter of fact, either judicially noticed or admitted or established by legal evidence to the satisfaction of the tribunal. Presumption literally means "taking as true without examination or proof". 16. Section 4 of the Evidence Act inter-alia defines the words `may presume' and `shall presume as follows: "(a) `may presume' - Whenever it is provided by this Act that the Court may presume a fact, it may either regard such fact as proved, unless and until it is disproved or may call for proof of it. (b) `shall presume' - Whenever it is directed by this Act that the Court shall presume a fact, it shall regard such fact as proved, unless and until it is disproved." In the former case the Court has an option to raise the presumption or not, but in the latter case, the Court must necessarily raise the presumption. If in ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rticular 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 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 de....
X X X X Extracts X X X X
X X X X Extracts X X X X
....an, would under the circumstances of the case, act upon the plea that they did not exist. 16. In the mater of Rangappa Vs. Sri Mohan (2010) 11 SCC 441, the Hon'ble Supreme Court observed on the matter of presumption cast under Section 139 of the Negotiable Instruments Act and held as under:- '26. In light of these extracts, we are in agreement with the respondent-claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat (supra) may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is 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 onusclause that has been included in furtherance ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ment convicting the accused was set aside by holding the same to be perverse. The relevant facts noticed from the aforesaid judgment are extracted as under:- '6. When we examine the case of the respondent-complainant as projected before the learned Chief Judicial Magistrate and the material evidence placed before the trial Court, we find that the trial Court had noted certain vital defects in the case of the respondent-complainant. Such defects noted by the learned Chief Judicial Magistrate were as under: a) Though the respondent as PW-1 deposed that the accused received the money at his house also stated that he did not remember the date when the said sum of Rs. 1,50,000/- was paid to him. b) As regards the source for advancing the sum ofRs. 1,50,000/-, the respondent claimed that the same was from and out of the sale consideration of his share in the family property, apart from a sum of Rs. 50,000/-, which he availed by way of loan from the co-operative society of the college where he was employed. Though the respondent stated before the Court below that he would be in a position to produce the documents in support of the said stand, it was noted that no documents were ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....id reason. Such a serious lacuna in the evidence of the complainant, which strikes at the root of a complaint under Section 138, having been noted by the learned trial Judge, which factor was failed to be examined by the High Court while reversing the judgment of the trial Court, in our considered opinion would vitiate the ultimate conclusion reached by it. In effect, the conclusion of the learned Judge of the High Court would amount to a perverse one and, therefore, the said judgment of the High Court cannot be sustained.' (Emphasis supplied) 18. In the matter of Basalingappa Vs. Mudibasappa (2019) 5 SCC 418, while dealing with the standard of proof and the presumption drawn under the Negotiable Instruments Act, the Hon'ble Supreme Court has observed as under:- '14. Justice S.B. Sinha in M.S. Narayana Menon Alias Mani Vs. State of Kerala and Another, (2006) 6 SCC 39 had considered Sections 118(a),138and139of the Act, 1881. It was held 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ragraph No.32:- "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." 17. In Krishna Janardhan Bhat Vs. Dattatraya G. Hegde,(2008) 4 SCC 54, this Court held that 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." 18. This 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, follo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s sale consideration. Payment of Rs. 4,50,000/- being admitted in the year 2010 and further payment of loan of Rs. 50,000/- with regard to which complaint No.119 of 2012 was filed by the complainant, copy of which complaint was also filed as Ex.D2, there was burden on the complainant to prove his financial capacity. In the year 2010-2011, as per own case of the complainant, he made payment of Rs. 18 lakhs. During his cross-examination, when financial capacity to pay Rs. 6 lakhs to the accused was questioned, there was no satisfactory reply given by the complainant. The evidence on record, thus, is a probable defence on behalf of the accused, which shifted the burden on the complainant to prove his financial capacity and other facts.' (Emphasis supplied) 19. A perusal of the same shows that the failure of the complainant to display his financial capacity to advance the amount alleged to have been lent would shift the burden on the complainant to prove his financial capacity to lend the money as well as the other circumstances to establish existence of consideration for issuance of cheque. After noticing that there was no evidence led before the Court to indicate the financial ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....an appeal against conviction, in-dealing with the former class of appeals, its approach is governed by the overriding consideration flowing from the presumption of innocence. Sometimes, the width- of the power is emphasized, while on other occasions, the necessity to adopt a cautious approach in dealing with appeals against acquittals is emphasised, and the emphasis is expressed in different words or phrases used from time to time. But the true legal position is that however circumspect and cautious the approach of the High Court may be in dealing with appeals against acquittals, it is undoubtedly entitled to reach its own conclusions upon the evidence adduced by the prosecution in respect of the guilt or innocence of the accused. this position has been clarified by the Privy Council in Sheo Swarup v. The King Emperor and Nur Mohammad v. Emperor AIR 1945 PC 151. (17) Some of the earlier decisions of this Court, however, in emphasizing the importance of adopting a cautious approach in dealing with appeals against acquittals, it was observed that the presumption of innocence is reinforced by the order of acquittal and so, "the findings of the trial Court which had the advantage of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h the finding of fact recorded by the High Court particularly where the said findings are based on appreciation of oral evidence. 21. Further, the Hon'ble Supreme Court has held in the matter of Nagbhushan vs. State of Karnataka, (2021) 5 SCC 212, as under: "7.2 Before considering the appeal on merits, the law on the appeal against acquittal and the scope and ambit of Section 378 Cr.P.C. and the interference by the High Court in an appeal against acquittal is required to be considered. 7.2.1 In the case of Babu v. State of Kerala (2010) 9 SCC 189, this Court had reiterated the principles to be followed in an appeal against acquittal under Section 378 Cr.P.C. In paragraphs 12 to 19, it is observed and held as under: 12. This Court time and again has laid down the guidelines for the High Court to interfere with the judgment and order of acquittal passed by the trial court. The appellate court should not ordinarily set aside a judgment of acquittal in a case where two views are possible, though the view of the appellate court may be the more probable one. While dealing with a judgment of acquittal, the appellate court has to consider the entire evidence on record, so as to....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... an appellate court on the evidence before it may reach its own conclusion, both on questions of fact and of law. (3) Various expressions, such as, 'substantial and compelling reasons', 'good and sufficient 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 possi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....umption of innocence of the accused and further that the trial court's acquittal bolsters the presumption of his innocence. Interference in a routine manner where the other view is possible should be avoided, unless there are good reasons for interference." (emphasis supplied) 7.2.2 When the findings of fact recorded by a court can be held to be perverse has been dealt with and considered in paragraph 20 of the aforesaid decision, which reads as under: "20. The findings of fact recorded by a court can be held to be perverse if the findings have been arrived at by ignoring or excluding relevant material or by taking into consideration irrelevant/inadmissible material. The finding may also be said to be perverse if it is "against the weight of evidence", or if the finding so outrageously defies logic as to suffer from the vice of irrationality. (Vide Rajinder Kumar Kindra v. Delhi Admn (1984) 4 SCC 635, Excise and Taxation Officer-cum-Assessing Authority v. Gopi Nath & Sons 1992 Supp (2) SCC 312, Triveni Rubber & Plastics v. CCE 1994 Supp. (3) SCC 665, Gaya Din v. Hanuman Prasad (2001) 1 SCC 501, Aruvelu v.State (2009) 10 SCC 206 and Gamini Bala Koteswara Rao v. State of A.P.(2009)....
X X X X Extracts X X X X
X X X X Extracts X X X X
....it were wholly untenable. Confirming the order passed by the High Court convicting the accused on reversal of the acquittal passed by the learned trial court, after being satisfied that the order of acquittal passed by the learned trial court was perverse and suffered from infirmities, this Court declined to interfere with the order of conviction passed by the High Court. While confirming the order of conviction passed by the High Court, this Court observed in para 8 as under: (SCC p. 416)" 8. We have perused the judgment under appeal to ascertain whether the High Court has conformed to the aforementioned principles. We find that the High Court has not strictly proceeded in the manner laid down by this Court in Ramesh Babula Doshi v. State of Gujarat (1996) 9 SCC 225 viz. first recording its conclusion on the question whether the approach of the trial court in dealing with the evidence was patently illegal or the conclusions arrived at by it were wholly untenable, which alone will justify interference in an order of acquittal though the High Court has rendered a well-considered judgment duly meeting all the contentions raised before it. But then will this non-compliance per se ju....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Court to interfere with an order of acquittal passed by the learned Sessions Judge. 31.3. In Atley v. State of U.P. AIR 1955 SC 807, in para 5, this Court observed and held as under: (AIR pp. 809-10) "5. It has been argued by the learned counsel for the appellant that the judgment of the trial court being one of acquittal, the High Court should not have set it aside on mere appreciation of the evidence led on behalf of the prosecution unless it came to the conclusion that the judgment of the trial Judge was perverse. In our opinion, it is not correct to say that unless the appellate court in an appeal under Section 417 Cr.PC came to the conclusion that the judgment of acquittal under appeal was perverse it could not set aside that order. It has been laid down by this Court that it is open to the High Court on an appeal against an order of acquittal to review the entire evidence and to come to its own conclusion, of course, keeping in view the wellestablished rule that the presumption of innocence of the accused is not weakened but strengthened by the judgment of acquittal passed by the trial court which had the advantage of observing the demeanour of witnesses whose evidence ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....al and compelling reasons to do so". e) The appellate court should not ordinarily set aside a judgment of acquittal in a case where two views are possible, even though the view of the appellate court may be the more probable one. f) Various expressions, such as, 'substantial and compelling reasons', 'good and sufficient grounds', 'very strong circumstances', 'distorted conclusions', 'glaring mistakes', etc. are not intended to curtail the 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. g) The findings of fact recorded by a court can be held to be perverse if the findings have been arrived at by ignoring or excluding relevant material or by taking into consideration irrelevant/inadmissible material. The finding may also be said to be perverse if it is "against the weight of evidence", or if the finding so outrageously defies logic as to suffer from the vice of irrationality. CONCLUSION: 23. It is evident from a....