TaxTMI 
TaxTMI 
2022 (12) TMI 91
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....rem, Sanvordem, Goa for a sum of Rs.3,00,000/- and Rs.1,30,000/- each. On presentation of such cheques, the banker returned it vide memo dated 2nd July 2012 with remark "funds insufficient". The appellant issued legal notice demanding the amount mentioned in the cheque through his Advocate vide notice dated 17th July 2012 thereby calling upon the respondent to pay the amount mentioned in the cheque within a period of 15 days from the date of receipt of said notice. Respondent received legal notice and replied vide her reply dated 27th July 2012 taking false defence. Accordingly, the appellant lodged complaint under Section 138 of the N.I. Act before the learned Magistrate who after taking cognizance, issued process against the respondent. After the trial concluded, the learned Magistrate dismissed the complaint and acquitted the respondent on the ground that the appellant failed to prove that cheques were issued towards legally enforceable debt. 4. Parties are hereinafter called as a complainant and accused as arrayed before the Trial Court for the sake of brevity. 5. The learned Senior Counsel Ms. Agni, appearing on behalf of the complainant, submitted that both the cheques ....
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....ndings of the learned trial Court are perverse and against the settled proposition of law and therefore, needs to be quashed and set aside. 7. Per contra, the learned Counsel Shri J. Ramaiya appearing for the accused first of all claimed that power of this Court in an appeal against acquittal are limited and only if the Court comes to the conclusion that findings are perverse and against settled proposition of law, interference is warranted but not otherwise. 8. He then submitted that the complaint as well as legal notice did not disclose true facts and therefore, evidence brought on record is against the pleadings. He submitted that there is no mention of execution of promissory notes in the legal notice as well as in the affidavit filed by the complainant. He then submitted that one promissory note was admittedly executed by the husband of the accused and therefore, there is no presumption that the wife i.e. the accused is liable to repay such amount. There are no averments in the complaint that the accused undertook to repay the amount mentioned in the promissory note executed by her husband. He then submitted that the cheque which is in respect of the promissory note issu....
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....which is connecting to the promissory note dated 18th April 2012 (Exh-24) signed by the accused in favour of the complainant. The second promissory note dated 16^th March 2012 for Rs.1,30,000/- produced at Exh.23 admittedly signed by the husband of the accused. 14. The first aspect which has been raised by the learned Counsel Shri J. Ramaiya regarding powers of this Court and to interfere with the judgment, it is necessary to refer to the judgment of the Supreme Court in the case of Gamini Bala Koteswara Rao and others v/s. State of Andra Pradesh through Secretary (2009) 10 SCC 636 and more specifically paragraph No. 14 which reads thus: "14. In the case of Chandrappa and Ors V/s. State of Karnataka (2007)4 SCC 415, the Supreme Court has held in paragraph No.30 thus: "1. From the above decisions, in our considered view, the following general principles regarding powers of appellate Court while dealing with an appeal against an order of acquittal emerge; (1) An appellate Court has full power to review, reappreciate and reconsider the evidence upon which the order of acquittal is founded; (2) The Code of Criminal Procedure, 1973 puts no limitati....
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....egally enforceable debt?" 17. In the entire evidence brought on record, the accused did not dispute issuance of such cheques including her signature on it. However, only defence raised with regard to such cheques is that same were obtained by force and coercion as well as threats. Thus, when the signatures on the cheques are not disputed as that of the accused, the provisions of Section 139 of N.I. Act stands attracted immediately. Magistrate is duty bound to draw a presumption under Section 139 of N.I. Act in favour of the complainant and there is no other option available otherwise. 18. In the case of Basalingappa(supra) and on considering the case of Rangappa(supra), the Supreme Court in paragraph 23 has observed thus: "23. We having noticed the ratio laid down by this Court in the above cases on Section 118(a) and 139, we now summarise the principles enumerated by this Court in the following manner: i. Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability. ii. The presumption under Section 139 is a rebuttable presumption and the onus is on the a....
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....resumption under Section 118 of N.I. Act qua promissory notes and simply rejected to accept such promissory notes on the reason that there is no mention of such promissory note in the legal notice and that execution of such promissory notes were not proved as a Notary before whom promissory notes were executed was not examined. 22. Chapter XIII of N.I. Act deals with Special Rules of Evidence. Section 118 of the N.I. Act reads thus: "118 Presumptions as to negotiable instruments. -Until the contrary is proved, the following presumptions shall be made:- (a) of consideration -that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, 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 ....
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....ue course of such promissory note, until the contrary is proved. The presumption includes clauses (a) to (g) as found mentioned in Section 118 of the said Act and more specifically that every Negotiable Instrument was made or drawn for consideration. It is for the other side/accused to prove contrary by showing that there was no consideration for drawing such negotiable instrument/promissory note. 26. Both promissory notes were produced by the complainant during the trial and were duly exhibited as Exhibit 23 and 24 respectively. The observation of the learned Magistrate in paragraph 12 of the impugned judgment that execution of the promissory note is not proved by the complainant although the promissory note is executed before the Notary and that the said Notary is not examined by the complainant, is completely against the settled proposition of law. First of all there is no dispute or denial on the part of the accused that such promissory notes were not even executed by her along with her husband. The only defence is with regard to the cheques in question. Therefore, if it is not a case of the accused that promissory notes are not executed by them, inference drawn by the trial....
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....1 to 15th June 2012 whereas the date of promissory note is 18th April 2012. Similarly, it is the contention on behalf of the accused that it is found in the reply notice dated 27th July 2012, produced at Exh-26 that the complainant and the accused are engaged in the business of online survey of the consumer product and the accused borrowed an amount of Rs.3,00,000/- from the complainant vide promissory note dated 23rdApril 2011 duly executed before the Notary and that the accused paid such borrowed amount of Rs.3,00,000/- in installments which can been seen clearly from the passbook of Saraswat Bank, Curchorem-Goa. Even the copy of the passbook of Saraswat Co-operative Bank in the name of the accused and her husband is produced at Exh-31 to show that the payment was made with regard to such a promissory note. 31. However, one thing is clear that reply notice at Exh-26 shows that whatever payment is made as claimed therein, is in connection with another promissory note dated 23rd April 2011. Perusal of the passbook produced at Exh-31 and as pointed above by the learned Counsel for the accused show that there is entry on 17th May 2011 regarding payment by cash to the complainant f....
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....n that part payment was made by the accused and that the promissory note at Exh-24 nowhere explain the period mentioned in the promissory note thereby creating a doubt. 34. Paragraph 24 of the impugned judgment therefore needs to be considered as incorrect observations. First of all the learned trial Court's observation that promissory note beginning from 16th October 2011 to 15th June 2012, if calculated it is seen that during this period the accused was already repaying an amount of Rs.3,00,000/- which was taken by her by executing the promissory note dated 23rd April 2011, are clearly by misunderstanding the facts and failing to appreciate evidence on record. 35. The promissory note dated 23rd April 2011 referred by the accused in her reply is clearly a different promissory note from Exh-24 and the cheque which is the subject matter of the present proceedings. The learned Magistrate seems to be confused with two promissory notes, one executed on 23rd April 2011 and another executed on 18th April 2012. As earlier observed, the passbook entries produced at Exh-31 clearly show that there were business transactions between the complainant and the accused and accepting such....
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....raised on behalf of the accused are of no substance. 40. The learned Counsel Shri Ramaiya appearing for the accused then submitted that the evidence of the complainant clearly shows that she was not having capacity to disburse loan of Rs.3,00,000/- to the accused and therefore, accused succeeded in rebutting the presumption that the cheque was issued for legally enforceable debt. However, perusal of cross examination of Pw1 at page 5 clearly support the contention of the complainant and it reads thus: "I had given an amount of Rs.3,00,000/- to the accused on 18.04.2012, given in three cheques of Rs.1,00,000/- each. Out of these three cheques one cheque was to be drawn on Central Bank of India, Curchorem branch, another SBI Curchorem and Saraswat Bank Curchorem branch." 41. After few lines, Pw1 then stated as under: "The cheques of Saraswat Bank and State Bank were from my account and the cheque from Central Bank was in the account of Peter alias and handed over to Shaikh Hasina." 42. It is necessary to see that during further cross-examination of Pw1, there is no other material with regard to the above aspect except denial. Such statement of the complainant sup....
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.... first of all reply at Exh.26 from the accused clearly admit that both are engaged in business of online survey of the consumer product and on earlier occasion accused borrowed an amount of Rs.3,00,000/- from the complainant. Secondly, the entries of passbook produced at Exh.31 show that there are various transactions between the accused and the complainant. Thus only by putting same questions to the complainant, it cannot be expected that she had no capacity to give loan of Rs.3,00,000/-. Thirdly, the accused executed a promissory note at Exh.24 dated 18th April 2022 which presume the consideration. Similarly, an earlier promissory note produced at Exh-30 dated 23^rd April 2011 again proved that the complainant was having sufficient means to give Rs. 3,00,000/- to the accused as loan, which has been clearly admitted in the reply notice at Exh.26. Thus, the submissions of the learned Counsel Shri J. Ramaiya on this aspect is clearly unacceptable. 45. As far as the cheque of Rs.3,00,000/- signed by the accused qua the complaint dated 15th June 2012 produced at Exh-21 is concerned, except creating some confusion, presumption under Section 139 of N.I. Act has not been rebutted. ....
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....r states that the accused and her husband were scared of the behaviour of the Opponent and under threat and coercion she handed over two cheques dated 15th June 2012 for Rs.3,00,000/- and Rs.1,30,000/- each to the complainant. Paragraph 4 of the said complaint further reads that the accused apprehened on that in order to harass them, the complainant inspite of knowing the fact that there are no sufficient funds in the account of the accused may deposit such cheques for realisation and on being bounced, could lodge false criminal cases under N.I. Act. 49. First of all the date of such complaint lodged with Curchorem Police is 2nd July 2012 i.e. on the date when the cheques were already bounced/dishonoured. The alleged incident of threatening is dated 15th July 2012 and that too in the residence of the accused which is in Curchorem itself. There is no explanation from the accused as to why she failed to lodge the complaint on the same day or at the most on the next day of the alleged incident. Admittedly, no action was taken by the police. Purpose of lodging such a complaint is obvious. It was lodged only on getting knowledge from her own bank that the cheques were presented and d....
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....,00,000/- is concerned dated 15th June 2012, the accused is found guilty for the offence under Section 138 of the N.I. Act. 53. Now coming to the second cheque for Rs.1,30,000/- issued on 15th June 2012 and produced at Exh.22 is concerned, the averments in the complaint needs to be looked into as there is clearly variance between the contents of the complaint and the evidence produced on record. Another aspect which needs to be noted is the promissory note produced by the complainant at Exh-23 which is admittedly executed by the husband of the accused. During evidence it is the case of the complainant that the promissory note at Exh-23 for Rs.1,30,000/- was executed by the husband of the accused and in discharge of such loan amount, the accused issued cheque in favour of the complainant dated 15th July 2012 for Rs.1,30,000/- produced at Exh-22. 54. However, averments in the main complaint and specifically paragraph 1 show otherwise. Said paragraph 1 shows that the accused took a hand loan and she executed two promissory notes dated 28th April 2012 amount to Rs.3,00,000/- and Rs.1,30,000/- respectively, registered with the Notary public. Similarly, towards repayment and the sa....
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....usband. In such circumstances, the complainant was required to plead that the accused being the wife agreed to repay loans of her husband and accordingly issued a cheque in discharge of such liability. In absence of such pleadings, the complainant cannot be permitted to raise such grounds only because she admitted during cross examination that the amount of Rs.1,30,000/- was not given to the accused. 59. The learned Senior Counsel Ms. A. Agni while relying in the case of ICDS Ltd (supra) claimed that the word "any debt or other liability" has to be construed in favour of the complainant since the cheque was issued by the wife in discharge of loan given to her husband. 60. In ICDS Ltd (supra), the question for consideration was to the effect as to the maintainability of the proceedings under Section 138 of N.I. Act viz-a-viz the guarantor. In that matter the husband of respondent No.1 entered into a hire-purchase agreement with the appellant for the purpose of purchase of car and his wife stood as guarantor in respect of hire-purchase facilities. In that respect, the Supreme Court observed that respondent no.1 being the wife, was guarantor in the hire-purchase agreement ....