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2022 (1) TMI 1285
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....3. The facts in capsulized form are as follows:- 3.1. The respondent is the father-in-law of elder son of the complainant - appellant, who resided in the very village. They shared very good terms and enjoyed a cordial relationship. The respondent is having business of a contractor and was in need of money. Hence, he contacted the complainant appellant. He requested to arrange for cash of Rs. 20 lakhs and as the complainant had cordial terms, the said amount was lent. The respondent promised the same to be repaid in six months' period. When demanded back, cheque of Rs. 20 lakhs was drawn from the State Bank of India having its branch at Prahaladnagar, Ahmedabad. This when deposited, was dishonoured and was returned to the appellant with an endorsement "fund insufficient" on 02.04.2014. 3.2. A legal notice was issued on 11.04.2014 which was within the prescribed period of limitation. Upon the service of notice, a reply through the advocate has been given by the respondent. He agreed of having accepted this amount. However, the same has not been paid. Therefore, the complaint came to be filed under Section 138 of the N.I.Act, and the same was registered as Criminal Case No.4023 ....
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....edure cannot be exercised. The case of the complainant is based upon the dishonour of cheque to the tune of Rs.20 lakhs in the year 2014. Earlier certain payments were made in the year 2013, which has nexus in respect of debt and liability. To wriggle out of the operation of Sections 59 and 60 of the Indian Contract Act, wrong and belated defence is raised and the power under Section 391 cannot be exercised to fill up the lacuna. According to complainant, the procedure stipulated under Section 138 of the N.I. Act is mandatory. After confessing the legal debt and liability to the tune of Rs. 40 lakhs, it is not open to the respondent to cover up anything. 4.3. The Criminal Case No. 4023 of 2014 for a limited purpose was remanded back to the Trial Court concerned to complete the process within a period of eight (8) weeks from the date of receipt of copy of the order. It was directed to send back the entire record to this Court to proceed with the main appeal. 5. The background of this matter, as mentioned, is that the appellant preferred a complaint being Criminal Case No. 4023 of 2014 before the Additional Chief Judicial Magistrate and CBI Court No. 2, Ahmedabad (Rural) on the....
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....e, that the complainant-opponent No.1 in his deposition has once again stated that the amount lent was Rs.20/- lakh. It is also necessary to refer to the crossexamination of the complainant, where, he has stated that the amount was lent in the year 2012. It is the categorical case of the applicant-accused that there is categorical return of the amount by him by way of cheque and the said sum of Rs.4.09/- lakh (rounded off) with contemporaneous documents has been held by the trial Court to have been proved. It is to be noted that the applicantaccused, though, specifically produced vide Exhibits-41 and 42, the application of tendering the second reply to the demand notice dated 19.05.2014 and the R.P.A.D. slip, the trial Court had chosen to merely record this application and has not given any exhibit number to the same. Surprisingly, it has mentioned in the Rojnama of the said documents having been accepted, however, no documents have been exhibited. The original record is also examined and this Court does not find any reference of having exhibited those documents produced vide application Exhibit-42. The trial Court simply record the said application and vide Exhibit- 43, the closur....
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....his section shall be subject to the provisions of Chapter XXIII, as if it were an inquiry." 6.6 This provision, thus, authorizes the Appellate Court to take additional evidence, while dealing with any appeal if it deems additional evidence to be necessary on recording the reasons, either it may record itself or direct the Court of Magistrate Sessions Court. "465. Finding or sentence when reversible by reason of error, omission irregularity. (1) Subject to the provisions herein before contained, no finding, sentence or order passed by a Court of competent jurisdiction shall be reversed or altered by a Court of appeal, confirmation or revision on account of any error, omission or irregularity in the complaint, summons, warrant, proclamation, order, judgment or other proceedings before or during trial or in any inquiry or other proceedings under this Code, or any error, or irregularity in any sanction for the prosecution, unless in the opinion of that Court, a failure of justice has in fact been occasioned thereby. (2) In determining whether any error, omission or irregularity in any proceeding under this Code, or any error, or irregularity in any sanction for the pr....
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....e of gold of the purity of 99.60. The request was made in order to invoke the powers of the Court under Section 391 of the Code of Criminal Procedure, 1973, which inter alia provides that in dealing with any appeal under Chapter XXIX the appeal Court. if it thinks additional evidence to be necessary, shall record its reasons and may either take such evidence itself or ask it to be taken by a Magistrate. The High Court rejected the prayer on the ground that it did not consider it "expedient in the interests of justice to open a new vista of evidence" in view of the fact that the offence had taken place six years back. The mere fact that six years had elapsed, for which time-lag the prosecution was in no way responsible, was no good ground for refusing to act in order to promote the interests of justice in an age when delays in the Court have become a part of life and the order of the day. Apart from the fact that the alleged lacuna was a technical lacuna in the sense that while the opinion of the Mint Master had admittedly been placed on record it had not been formally proved the report completely supported the case of the prosecution that the gold was of the specified purity. To de....
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.... not to be taken recourse to solely because there is an error, omission or irregularity in the proceeding. The term 'a failure of justice' has been treated as the sine qua non for setting aside the conviction. The Apex Court, further, held that 'fair trial' is the heart of criminal jurisprudence and, in a way, an important facet of a democratic polity that is governed by Rule of Law. Denial of 'fair trial' is crucifixion of human rights. It is ingrained in the concept of due process of law. While emphasizing the principle of 'fair trial' and the practice of the same in the course of trial, it is obligatory on the part of the Courts to see whether in an individual case or category of cases, because of non-compliance of a certain provision, reversion of judgment of conviction is inevitable or it is dependent on arriving at an indubitable conclusion that substantial injustice has in fact occurred. The Apex Court, further, held and observed as under: "39. The question posed by us fundamentally relates to the noncompliance of such interdict. The crux of the matter is whether it is such a substantial interdict which impinges upon the fate of the t....
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....ein above, this Court notices that the respondent-accused, of course, had an opportunity to get the said documents exhibited. He had also been given the liberty to do it, after the trial Court having permitted the application for additional evidence. However, merely on permitting of the said application by the trial Court, the applicant-accused chose not to get the same exhibited and instead tendered the closing pursis. 6.13 At this stage, when the request is being made for allowing to prove the second notice dated 19.05.2014, which also confirms the figure of the prosecution of having lent the amount of Rs.20/- lakh, not accepting the same on the ground that the same is an attempt to fill-up the lacunae would be an error on the part of the Court, for the reason that an attempt had already been made on the part of the applicant-accused before the trial Court to get the same produced. It is different that at that stage, the learned Advocate, who appeared before the trial Court, could have been more vigilant, careful and ought to have ensured that the documents are duly exhibited. However, for the error of the lawyer, the party cannot suffer, which is a trite law. And theref....
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....rough consideration which are as follows: (i) Notice is invalid as payment sought is in excess of the amount, (ii) Part payment made has not been recognized, (iii) The respondent accused has rebutted presumption and, therefore, onus again lies on the complainant and, (iv) in acquittal appeal, the appellate power of the Courts when are to be exercised, the Court should not interfere just because with the very same set of evidence, it can come to the conclusion other than what has been arrived at. 6.2. As far as the first point of validity of the notice is concerned, according to the respondent, it is animus notice under the provisions of the Negotiable Instruments Act, once it has proved that some amount of money had been paid and yet, the notice issued is for a different amount than what is due, payment sought since is in excess of the amount due, burden of accused is discharged. It is further emphasized that part payment has already been made by way of deposit of the cheque and, therefore, it is a reverse burden, according to the appellant which the respondent needs to discharge. 7. It appears that both the documents have been exhibited, however, the prosecution has chose....
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.... upon which the order of acquittal was founded, and to reach the conclusion that upon that evidence the order of acquittal should be re- versed. No limitation should be placed upon that power unless it be found expressly stated in the Code. But in exercising the power conferred by the Code and before reaching its conclusions upon fact, the High Court should and will always give proper weight and consideration to such matters as (1) the views of the trial Judge as to the credibility of the witnesses; (2) the presumption of innocence in favour of the accused, a presumption certainly not weakened by the fact that he has been acquitted at his trial; (3) the right of the accused to the benefit of any doubt, and (4) the slowness of an appellate Court in disturbing a finding of fact arrived at by a Judge who had the advantage of seeing the witnesses." 6. The appellant relies upon certain observations of this Court in the case of Abinash Chandra Bose (2). The accused in that case was prosecuted under s. 409, Indian Penal Code for Misappropriating an amount belonging to his client who was the complainant. Prosecution was based upon a letter said to be written by him which he stated....
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.... and in the interests of justice the appellate Court deems it appropriate having regard to the circumstances of the case, that the accused should be put on his trial again......." It was pointed out that the Sessions Judge could have taken recourse to the power conferred by s. 428 and not ordered a retrial. 7. Section 428 occurs in Chapter XXXI which deals with appeals. It speaks of any appeal under that Chapter and the word 'any' means every one of the appeals (no matter which) men- tioned in the thirtyfirst Chapter of the Code. Section 417(3) is in that Chapter and S. 428 clearly applied to the appeal which was in the High Court. It only remains to determine the limits (if any) of the jurisdiction and power of the appellate Court (here the High Court) in ordering additional evidence and whether the limits so determined were exceeded by the High Court in the present case. 8. Mr. Chakravarti contends that the discretion under s. 428 is subject to the same conditions as those in s. 423 and which were laid down in Abinash Chandra Bose's case(1). He lays special emphasis on the condition that the prosecution should not be given a second chance to....
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....ances where retrial may be necessary as for example where a conviction or an acquittal was obtained by fraud, or a trial for a wrong offence was held or abettors were tried as principal offenders and vice versa. Many other instances can be imagined. The Legislature has not chosen to indicate the limits of the power and this Court must not be understood to have laid them down. Cases may arise where either of the two courses may appear equally appropriate. Since a wide discretion is conferred on appellate Courts, the limits of that Court's jurisdiction must+ obviously be dictated by the exigency of the situation and fair play and good sense appear to be the only safe guides. There is, no doubt some analogy between the power to order a retrial ind the power to take additional evidence. The former is an extreme step approximately taken if additional evidence will not suffice. Both actions subsume failure of justice as a condition precedent. There the resemblance ends and it is hardly proper to construe one section with the aid of observations made by this Court in the interpretation of the other section. 10. Additional evidence may be necessary for a variety of reasons whi....
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....held that the Court needs to presume the negotiable instrument for consideration unless existence of consideration is disproved. It has further held that unless, on consideration of matter before it, the Court either believes that the consideration does not exist or considers the non-existence of the consideration so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that the consideration does not exist. The Court held that the initial burden of proof is on the accused to rebut the said prosecutions by raising a probable defence. If he discharges the said burden, the onus thereafter shifts on the complainant to prove the same and whether the initial burden has been discharged by the accused is a question of fact. The burden of proof on the accused is not heavy. It need not disprove the prosecution's case in its entirety beyond reasonable doubt. "39. A presumption is a legal or factual assumption drawn from the existence of certain facts. 40. In P. Ramanatha Aiyar's Advanced Law Lexicon, 3rd edition, at page 3697, the term 'presumption' has been defined as under: "A presumption is an ....
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....reasonable possibility of the non-existence of the presumed fact. In other words, provided the facts required to form the basis of a presumption of law exist, no discretion is left with the court but to draw the statutory conclusion, but this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary. A fact is said to be proved when, "after considering the matters before it, the court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists". Therefore, the rebuttal does not have to be conclusively established but such evidence must be adduced before the court in support of the defence that the court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of reasonability being that of the "prudent man"." 42 The court, however, in the fact situation obtaining therein, was not required to go into the question as to whether an accused can discharge the onus placed on him even from the materials brought on records by the complainant himself....
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....he onus on an accused person may well be compared to the onus on a party in civil proceedings, and just as in civil proceedings the court trying an issue makes its decision by adopting the test of probabilities, so must a Criminal Court hold that the plea made by the accused is proved if a preponderance of probability is established by the evidence led by him..." 47. In V.D. Jhingan v. State of Uttar Pradesh, [AIR 1966 SC 1762], it was stated: "It is well-established that where the burden of an issue lies upon the accused, he is not required to discharge that burden by leading evidence to prove his case beyond a reasonable doubt" 48. In Kali Ram v. State of Himachal Pradesh [(1973) 2 SCC 808], Khanna, J., speaking for the 3- Judge Bench, held: "One of the cardinal principles which has always to be kept in view in our system of administration of justice for criminal cases is that a person arraigned as an accused is presumed 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....
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....scharge presumption imposed upon him. The second appellant once admits his signature on cheque and deed, the Trial Court ought to have presumed that cheque was issued as consideration for a legally enforceable debt. The Apex Court held that the Trial Court fell in error when it called upon the complainant to explain the circumstances under which the appellants were liable to pay. Such approach of the Trial Court was directed in teeth of established legal position and amounted to a patent error of law. The defence raised by the appellants did not inspire confidence or meet standard of preponderance of probability. In absence of any other relevant material, the High Court did not err in discarding appellants' defence and upholding onus imposed upon them in terms of Section 118 and Section 139 of the NIA. It held that the provisions of NIA envision a single window for criminal liability for dishonour of cheque as well as civil liability for realization of cheque amount. There needs to be a consistent approach towards awarding of compensation and unless there exist special circumstances, Courts should uniformly levy fine up to twice cheque amount along with simple interest at the rate ....
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....: "In the case at hand, even after purportedly drawing the presumption under Section 139 of the NI Act, the trial court proceeded to question the want of evidence on the part of the complainant as regards the source of funds for advancing loan to the accused and want of examination of relevant witnesses who allegedly extended him money for advancing it to the accused. This approach of the trial court had been at variance with the principles of presumption in law. After such presumption, the onus shifted to the accused and unless the accused had discharged the onus by bringing on record such facts and circumstances as to show the preponderance of probabilities tilting in his favour, any doubt on the complainant's case could not have been raised for want of evidence regarding the source of funds for advancing loan to the appellantaccused....." 15. Once the 2nd Appellant had admitted his signatures on the cheque and the Deed, the trial Court ought to have presumed that the cheque was issued as consideration for a legally enforceable debt. The trial Court fell in error when it called upon the Complainant Respondent to explain the circumstances under which the appe....
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....ned judgment of the High Court dated 09- 112017 is thus modified, and it is directed that Appellant No.2 shall not be required to undergo the awarded sentence. The registry of this Court is directed to transfer the amount of Rs.11.20 lakhs along with interest accrued thereupon to the respondent within two weeks." 9.4. In case of Rohitbhai Jivanlal Patel vs. State of Gujarat and Another [2019 (0) Supreme (SC) 300], it was a case where an appeal was directed against the common judgment and order whereby the High Court had reversed the judgment and order passed by the Additional Senior Civil Judge and Additional Chief Judicial Magistrate in seven criminal cases wherein one pertained to the offence under Section 138 of the Negotiable Instruments Act, 1881 for dishonour of 7 cheques in the sum of Rs. 3 lakhs each. The High Court had disproved the acquittal of the appellant while holding him guilty of offence under Section 138 of the NIA and awarded the punishment of simple imprisonment for a period of 1 year with fine to the extent of double the amount of cheque (i.e. a sum of Rs. 6 lakhs) with default stipulation of further imprisonment for a period of 1 year in each case a....
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....s and the period of transaction; and that there was no explanation as to how the complainant was claiming Rs. 22,50,000/- as the debt, when the sum total of the instalments (cheques) comes to Rs. 21,00,000/- only. The learned counsel would also argue that complainant has heavily relied on the stamp paper dated 21.03.2007 but then, admittedly, the complainant had not signed on the said stamp paper; and this document, neither notarised nor registered anywhere and only bearing the signatures of the appellant and of the said Shri Jagdishbhai, is not of any evidentiary value for the case of the complainant. According to the learned counsel, the accused-appellant has established his bonafide defence that he had a financial transaction with Shri Jagdishbhai in the past; that he gave 7 blank cheques to Shri Jagdishbhai and signed on a stamp paper as security against such transaction; and that such cheques and stamp paper were sought to be misused by the complainant. The learned counsel has contended that in the given circumstances, the judgment and orders of the Trial Court acquitting the accused-appellant of the offence under Section 138 of the NI Act deserve to be restored and the impugn....
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.... judgment of the trial court is either perverse or wholly unsustainable in law." 11.1 The principles aforesaid are not of much debate. In other words, ordinarily, the Appellate Court will not be upsetting the judgment of acquittal, if the view taken by Trial Court is one of the possible views of matter and unless the Appellate Court arrives at a clear finding that the judgment of the Trial Court is perverse, i.e., not supported by evidence on record or contrary to what is regarded as normal or reasonable; or is wholly unsustainable in law. Such general restrictions are essentially to remind the Appellate Court that an accused is presumed to be innocent unless proved guilty beyond reasonable doubt and a judgment of acquittal further strengthens such presumption in favour of the accused. However, such restrictions need to be visualised in the context of the particular matter before the Appellate Court and the nature of inquiry therein. The same rule with same rigour cannot be applied in a matter relating to the offence under Section 138 of the NI Act, particularly where a presumption is drawn that the holder has received the cheque for the discharge, wholly or in part, of an....
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.... indorsed, negotiated or transferred for consideration; (b) as to 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 of fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him." "139. ....
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....ence 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. 28. In the absence of compelling justifications, reverse onus clauses usually impose a....
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....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 nonexistence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on to the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arising under Sections 118 and 139. 21. The accused has also an option to prove the nonexistence of consideration and debt or liability either by letting in evidence or in some clear and e....
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....or relied upon is that Shri Jagdishbhai had signed on the stamp paper in question and not the complainant. 18.1 We have examined the statement of Shri Jagdishbhai as also the said writing on stamp papers and are unable to find any substance in the suggestions made on behalf of the accused-appellant. 18.2 The said witness Shri Jagdishbhai, while pointing out his acquaintance and friendship with the appellant as also with the respondent, asserted in his examination-in-chief, inter alia, as under: "Accused when he comes to our shop where the complainant in the matter Shashimohan also be present that in both the complainant and accused being our friends, were made acquaintance with each other. The accused had necessity of money in his business, in my presence, had demanded Rs.22,50,000/- (Rupees twenty two lacs fifty thousandly) on temporary basis. And thereafter, the complainant from his family members by taking in piecemeal had given to the accused in my presence. Thereafter, on demanding the money by the complainant, the accused had given seven (7) cheques to the complainant in our presence but such cheques being washed out in rainy water and on informing ....
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....upport of the complaint of Shashimohan Goyanka is giving false statement." 18.4 The statement of Shri Jagdishbhai does not make out any case in favour of the accused-appellant. It is difficult to say that by merely putting the suggestion about the alleged dealing to Shri Jagdishbhai, the accused- appellant has been able to discharge his burden of bringing on record such material which could tilt the preponderance of probabilities in his favour. 18.5 The acknowledgement on the stamp paper as executed by the appellant on 21.03.2007 had been marked with different exhibit numbers in these 7 cases. In Complaint Case No. 46499 of 2008, the same is marked as Ex. 54 and reads as under : "Today the executor I Rohit Patel Ranchhodray Masala is a partner. Due to the financial difficulties having been arised, I have taken Rs.22,500,000/- (Rupees twenty two thousand fifty thousand only- sic) from my group which are to be paid to Shashimohan Goyanka. With reference to that today I have given seven (7) cheques of Corporation Bank, Alkapuri Branch bearing No. 763346 to 762252 amounting to Rs. 22,50,000/- (Rupees twenty two lacs fifty thousand only) Dates : (1) 0....
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....ly against the accusedappellant. 19. Hereinabove, we have examined in detail the findings of the Trial Court and those of the High Court and have no hesitation in concluding that the present one was clearly a case where the decision of the Trial Court suffered from perversity and fundamental error of approach; and the High Court was justified in reversing the judgment of the Trial Court. The observations of the Trial Court that there was no documentary evidence to show the source of funds with the respondent to advance the loan, or that the respondent did not record the transaction in the form of receipt of even kachcha notes, or that there were inconsistencies in the statement of the complainant and his witness, or that the witness of the complaint was more in know of facts etc. would have been relevant if the matter was to be examined with reference to the onus on the complaint to prove his case beyond reasonable doubt. These considerations and observations do not stand in conformity with the presumption existing in favour of the complainant by virtue of Sections 118 and 139 of the NI Act. Needless to reiterate that the result of such presumption is that existence of a l....
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....tal. 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." 9.5. In case of Sumeti Sumeti Vij vs. M/s. Paramount Tech Fab Industries [2021 (0) AIR(SC) 1281] there was a reversal of acquittal by the High Court. The appellant had only recorded her statement under Section 313 of the Cr.P.C. and has not adduced any evidence to rebut presumption that cheques were issued for consideration. The Apex Court held that once the facts came on record remained unrebutted and supported with the evidence on record with no substantive evidence of defence of the appellant to explain the incriminating circumstances appearing in the complaint against her, no error has been committed by the High Court in the impugned judgment, and the appellant has been rightly convicted for the offence punishable under Section 138 of the Act and needs no interference of this Cour....
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....hich reads as under: "138. Dishonour of cheque for insufficiency, etc., of funds in the account.-Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for 8 [a term which may be extended to two years'], or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless - (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (b) the payee or the holder in due course of the cheque, as the case m....
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....s on the appellant accused to establish a probable defence so as to rebut such a presumption. ....... 17. On the aspects relating to preponderance of probabilities, the accused has to bring on record such facts and such circumstances which may lead the Court to conclude either that the consideration did not exist or that its nonexistence was so probable that a prudent man would, under the circumstances of the case, act upon the plea that the consideration did not exist. This Court has, time and again, emphasised that though there may not be sufficient negative evidence which could be brought on record by the accused to discharge his burden, yet mere denial would not fulfil the requirements of rebuttal as envisaged under Sections 118 and 139 of the NI Act. This Court stated the principles in Kumar Exports [Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513] 4 (2019) 18 SCC 106 "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 nonexistence of consideration and debt is so probable that a prudent man ought to suppose t....
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....ain come to the complainant's rescue." It was further considered by this Court in Uttam Ram vs. Devinder Singh Hudan and Another5. 19. Thereafter, two separate legal notices were served by the complainant which were duly received by the appellant and even after receiving the said notices, the appellant neither responded to the notices nor made any payment within the statutory period of fifteen days and only thereafter, two separate complaints were filed by the complainant under Section 138 of the Act against the appellantaccused. 21. That apart, when the complainant exhibited all these documents in support of his complaints and recorded the statement of three witnesses in support thereof, the appellant has recorded her statement under Section 313 of the Code, but failed to record evidence to disprove or rebut the presumption in support of her defence available under Section 139 of the Act.The statement of the accused recorded under Section 313 of the Code is not a substantive evidence of defence, but only an opportunity to the accused to explain the incriminating circumstances appearing in the prosecution case of the accused. Therefore, there is no ev....
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....unt of the cheque. But, can it be said the expression "amount of money would always mean the ‟ amount of the cheque, even if the actual liability of the drawer" all case laws yet to be typed of the cheque has got reduced on account of some payment made by him towards the discharge of the debt or liability in consideration of which the cheque in question was issued. If it is held that the expression "amount of money would ‟ necessarily mean the amount of cheque in every case, the drawer of the cheque would be required to make arrangement for more than the admitted amount payable by him to the payee of the cheque. In case he is not able to make arrangement for the whole of the amount of the cheque, he would be guilty of the offence punishable under Section 138 of Negotiable Instruments Act. Obviously this could not have been the intention of the legislature to make a person liable to punishment even if he has made arrangements necessary for payment of the amount which is actually payable by him. If the drawer of the cheque is made to pay more than the amount actually payable by him, the inevitable result would be that he will have to chase the payee of the cheque to recov....
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....unt of Rs.96,03,766/- still remained due and payable by the writ applicants to the complainant. However, I am of the view that the quantum of the amount would not be a relevant factor in the case at hand. To put it in other words, whether a substantial amount was paid or a meager amount was paid. A notice of demand which requires the drawer of the cheque to make payment of the whole of the cheque amount, despite receiving some amount against that very cheque, much before issue of notice, cannot be said to be a legal and valid notice envisaged in Section 138(b) of Negotiable Instrument Act. The expression "amount of money used in ‟ Section 138(b) of Negotiable Instrument Act, to my mind, in a case of this nature would mean the amount actually payable by the drawer of the cheque to the payee of the cheque. Of course, if the payee of the cheque makes some demands on account of interest, compensation, incidental expenses etc, that would not invalidate the notice so long as the principal amount demanded by the payee of the cheque is correct and is clearly identified in the notice. When the principal amount claimed in the notice of demand is more than the principal amount actually ....
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....he notice. It was further held that if an ominous demand is made in a notice as to what was due against a dishonoured cheque, the notice might fail to meet the legal requirement and may be regarded as bad." Reference was made of the decision of In K.R.Indira vs. Dr.G.Adinarayana [2003 (3) JCC(NI) 273] where the cheque amounts were different from the alleged loan and the demand made was not of the cheque amount but was of the loan amount. It was held that the complainant was required to make demand for the amount recovered by the cheque which was conspicuously absent in the notice and, therefore, the notice was imperfect. Referring to some of the other judgments, the Court then quashed the complaints initiated against the writ applicants. The Court held that if the Magistrates finds the demand in the notice to be absolutely ominous, then the order of process should not be issued. If the legal notice as envisaged under the provisions of the NI Act is found to be not in accordance with law, then the complaint should fail. The service of a valid legal notice in a case under section 138 of the N.I. Act, is mandatory. Service of a valid notice is trite and imperative in character f....
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.... quantum thereof was substantially altered, and that on the due date the debt if any of the drawer to the drawee was of a far smaller figure. Obviously it was neither the function of the criminal court nor necessary to decide the legal issue as to what was the precise extent of the debt. If the evidence in rebuttal which is found acceptable by the court justifies a conclusion that the cheque which was dishonoured, did not represent either the entire debt or part of the debt on the due date, section 138 would not furnish a cause of action for the criminal prosecution and/or conviction. It is in the context of this limited controversy that the evidence in rebuttal led by the accused has been examined and found to be acceptable by the court. 9. So far as the facts of the case are concerned and so far as the appreciation of evidence is concerned, I see no reason to take another view of the matter, so far as the findings of fact are concerned. Suffice it to say that the finding of fact based on the evidence on record is to the effect that when the cheque was issued, the same represented an amount due and payable to the drawee in respect of the outstanding consideration in respe....
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....he parties. 11. The sum and substance of the findings of fact recorded by the trial court are found in paragraph 22 of the impugned judgement. It only requires to be clarified that when the trial court uses the phrase "legal dues" in the context of the cheque in question, it only meant, and it could only mean that the amount of the cheque did not represent "in whole or in part of any debt or other liability" of the drawer to the drawee. 12. In my opinion, the judgement and order of acquittal is eminently justified not only on the facts of the case, but in view of the interpretation of section 138 of the Negotiable Instruments Act as expressed by me hereinabove. This view expressed by me gets support from a decision of the Andhra Pradesh High Court in the case of Voruganti Chinna Gopaiah Vs. M/ s Godavari Fertilizers & Chemicals Ltd., reported in 1999 Criminal Law Journal, page 1184, wherein the facts of the case are almost identical." 9.8. In case of Rahul Builders vs. Arihant Fertilizers and Chemicals [(2008) 2 SCC 321], according to the respondent, a penal provision should be construed strictly, the condition precedent wherefor is service of notice. It is one....
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....80] wherein it was stated: "8. It is a well-settled principle of law that the notice has to be read as a whole. In the notice, demand has to be made for the "said amount" i.e. the cheque amount. If no such demand is made the notice no doubt would fall short of its legal requirement. Where in addition to the "said amount" there is also a claim by way of interest, cost etc. whether the notice is bad would depend on the language of the notice. If in a notice while giving the break-up of the claim the cheque amount, interest, damages et c. are separately specified, other such claims for interest, cost etc. would be superfluous and these additional claims would be severable and will not invalidate the notice. If, however, in the notice an omnibus demand is made without specifying what was due under the dishonoured cheque, the notice might well fail to meet the legal requirement and may be regarded as bad. 9. This Court had occasion to deal with Section 138 of the Act in Central Bank of India v. Saxons Farms 3 and held that the object of the notice is to give a chance to the drawer of the cheque to rectify his omission. Though in the notice demand for compensation, inte....
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....n the actual amount payable to the payee of the cheque as principal sum. "12. In respect of the cheque, subject matter of Crl.M.C.2225/2009, the amount of the cheque was Rs.31,91,650/- and the respondent, after giving credit for the amount of Rs.10,50,000/- paid to him on 20.10.2008 demanded only a sum of Rs.21,41,650/- vide notice dated 23.1.2009. Therefore, as far as the notice of demand issued in this case is concerned, it was legal and valid as the amount demanded was the actual amount payable by the petitioner to the respondent. But, in respect of the cheque, subject matter of Crl.M.C.2224/2009, the amount demanded in the notice of demand dated 19.12.2008 was Rs.49,47,600/-, though admittedly the amount due to the respondent at that time was only Rs.32,97,600/-, after giving credit of Rs.10,50,000/- received by him by RTGS on 7.10.2008. Thus, the respondent called upon the petitioner to pay much more than the amount actually due and payable by it. In order to comply with the demand made in the notice, the petitioner would have been required to pay the whole of the amount of Rs.49,47,600/- to the complainant/respondent. A perusal of the notice would show that the compl....
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.... the payee of the cheque and the principal amount demanded from the drawer of the cheque should not be more than the actual amount payable by him though addition of some other demands in the notice by itself would not render such a notice illegal or invalid. 13. In Central Bank of India & Another vs. Saxons Farms & Others 1999(8) SCC 221, the Hon‟ble Supreme Court observed that the object of the notice under Section 138(b) of Negotiable Instrument Act is to give a chance to the drawer of the cheque to rectify his omission and also to protect the honest drawer. If the drawer of the cheque is asked to pay more than the principal amount due from him and that amount is demanded as the principal sum payable by him, it is not possible for an honest drawer of the cheque to meet such a requirement. 14. In Suman Sethi vs. Ajay K. Churiwala, 2000 (2) SCC 380, the Hon‟ble Supreme Court held that where the notice also contains a claim by way of cost, interest etc. and gives breakup of the claim of the cheque amount, interest, damages etc., which are separately specified, the claim for interest, cost etc. would be superfluous and these additional claims being sever....
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....oted that there was no demand to pay the sum of Rs.1 lakh which was the amount of the cheque and what was demanded was the entire sum of Rs.8,72,409/- and not a part of it. In these circumstances, it was held that there was no demand for payment of the cheque amount. The decision of the High Court holding that the notice was invalid, was upheld by the Hon‟ble Supreme Court. 17. For the reasons given in the preceding paragraphs, I hold that the complaint, subject matter of Crl.M.C.No.2225/2009 is liable to be quashed because the complainant presented the cheque for encashment of the whole amount of Rs.49,47,600/- though the amount due to him on the date of the presentation of the cheque was Rs.32,9600/- and he also demanded the whole of the amount of Rs.49,47,600/- as principal sum without even indicating the principal amount due to him under the cheque was Rs.32,97,600/- and without even referring to the part- payment of Rs.16,50,000/- which he had received by RTGS on 7.10.2008. The criminal complaint, subject matter of Crl.M.C.2224/2009 is liable to be quashed as the complainant presented the cheque for encashment of whole of its amount of Rs.31,91,650/- though he h....
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....rt to give its finding on all the issues sought to be raised by the parties. 19. It is significant to note that at no stage of the trial, the accused had denied the issuance of cheque in question by him in favour of complainant. (For the sake of convenience any reference to the complainant henceforth shall be considered to be the reference to M/s Veterans Infrastructures Strategiserz Pvt. Ltd.). In view of admission by him of issuance of cheque in question in favour of complainant, there arises a two fold presumption in favour of complainant that the cheque in question was issued by the accused for consideration and in discharge of his legally enforceable liability towards the complainant M/s. Veterans Infrastructure Pvt. Ltd. v. M/s Enable Technologies Pvt. Ltd. Judgment dated 22.03.2018 and that there exists a legally enforceable liability of the accused towards the complainant to the extent of the cheque amount in terms of Section 118 and 139 of NI Act. No doubt the aforesaid presumptions are rebuttable in nature and the same could have been rebutted by the accused not only by way of cross examination of CW- 1 while relying upon the material brought on record by the com....
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.... for complainant that the defence sought to be raised by accused regarding non-start of M/s. Veterans Infrastructure Pvt. Ltd. v. M/s Enable Technologies Pvt. Ltd. Judgment dated 22.03.2018 any work by the complainant under the MOU/Agreement stands disproved. 21. I have heard the submissions and carefully gone through the entire material available on record including the MOU Ex. CW-1/1A and agreement Ex. CW-1/1. No doubt, accused could not have been expected to prove the non-performance of work by the complainant under the MOU and Agreement by leading any direct evidence, however, considering the nature of work to be performed by the complainant in terms of MOU and Agreement and various terms and conditions of the same, it was not even possible for the complainant to lead any direct evidence of performance of work. It is significant to note that neither the MOU nor the agreement contemplates placing of any work order by the accused and raising of any invoice by the accused. The agreement does not even contemplate reporting of work performed by the complainant in writing nor does it contemplate feedback by the accused in writing. In my considered opinion, whether or not any....
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.... 60,000/- Total Rs. 4,09,315/- 10.2. The complainant also agreed that his son Kinjal had filed a divorce petition to take divorce from the sister of the respondent accused. Compromise had been arrived at and the daugher-in-law returned with the son. Once again, in March, 2014 his son had preferred the divorce petition. It is thus admitted by the appellant that the amount of Rs.4,09,315/- had already been received from the accused and yet he had deposited the cheque which has been lying with him by way of security. On noticing the fact that no reference of this amount had been received, the Trial Court concluded that the appellant failed to establish the amount of money which was due from all the cheques and the drawer failed to make the payment of the said amount of money to the payee or the holder in due course of the cheque. 10.3. As the essential ingredient of Section 138 are of the drawing of the cheque by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, on presentation of the cheque by the payee or the holder in....
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....he service needs to be regarded with requisite strictness. The notice cannot be permitted to be vague and capable of different interpretations. The omnibus notice without specifying as to what was the amount due cannot sub-serve the requirement of law. 14. As is quite obvious from the notice which has been issued in the instant case that the demand was made of the outstanding amount of Rs.20 lakhs. The noticee was required to respond to the said demand. There was no reference to the payment to the tune of Rs. 4,09,315/-, as according to the appellant also, the said sum of Rs. 4,09,315/- had been gradually paid over a period of time from 2012 to 2013, prior to the issuance of the cheque in question. It is only at the time of cross-examination that the appellant has agreed to have received the said amount. Before that, at no point of time, this has been either mentioned or accepted. The demand continued for the amount of Rs. 20 lakhs. As has been held in case of Rahul Builders (supra), the importance of notice cannot be undermined. This non-revelation on the part of the appellant shall need to be viewed strictly. An attempt is made to distinguish the facts of this case from those ....