TaxTMI 
TaxTMI 
2018 (1) TMI 1714
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.... complainant and a blank cheque was given towards payment of the earnest amount which was not returned despite the frustration of the agreement, is not probabilized even on the touchstone of preponderance of probabilities, is the submission. Per contra, Shri S.R. Deshpande, the learned counsel for the accused would submit that the evidence on record would suggest that the financial capacity of the complainant to extend hand loan of Rs. 2 lacs to the accused and the factum of the complainant having extended such loan, is rendered suspect in view of the material elicited in the cross-examination of the complainant. The limited burden to rebut the presumption is to render the existence of defence probable on the touchstone of preponderance of probabilities, is the submission. The learned Counsel Shri S.R. Deshpande, would submit that the father of the accused has stepped into the witness box to substantiate the defence that the complainant misused the blank cheque despite the frustration of the oral agreement to sell the plot to the accused. 4. The gist of the complaint (Exh. 1) is that in view of cordial relationship, the complainant extended a hand loan of Rs. 2 lacs to the ac....
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....red into an oral agreement to purchase the said plot from the complainant. The plot admeasured 2500 square feet in area and the consideration agreed was Rs. 2,50,000/-. The accused issued one cheque for Rs. 2 lac towards earnest. The complainant had filled in the name and figure in the cheque amount. An agreement was arrived at that the balance consideration will be paid after two days and the sale deed will be executed. The complainant had agreed to produce the documents prior to the sale deed, which he failed to produce. The complainant conveyed that there was an encumbrance on the plot and the sale deed did not materialize. In the cross-examination, DW 1 admits that he did not know details of the plot. It is admitted that there is no documentary evidence of the transaction except the cheque. He further admits that he did not verify any document pertaining to the plot. The witness volunteers that the transaction was between the complainant and the accused and the witness was later on informed of the transaction by his son - accused. DW 1 admits that when the cheque was issued amount of Rs. 2 lac was not available in the bank account of the accused. The accused and the DW 1 res....
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....reasonable doubt to impute penal liability under section 138 of the N.I. Act upon the accused. The learned trial Magistrate suspected the claim in Complaint unreasonably merely because of non-production of Income-tax return or account. The complainant is admittedly a businessman and a income Tax payer. Non-filing of tax return or evidence of it's at payment cannot help the case of the accused while we consider such defence in the light of Evidence led at the trial. One cannot jump to the conclusion that complainant cannot recover amount of hand loan; merely for the reason that the complainant did not file income tax return. Absence of or non-production of such evidence was not sufficient to rebut statutory presumption that the cheque was issued for consideration by the accused. The complainant in the present case, is businessman having business concern M/s. Kabra Sales & Marketing at Gandhibag, Nagpur. He stated in his affidavit that his brother Subhash and the accused have very close friendly and business relations. Subhash had assured that the accused who needed cash, would repay the money within a month hence ready cash was given interest free on 5.12.2006, in lieu of which,....
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....itate trading. The statutory presumptions u/s. 118 and 139 of the Act enjoins upon the Court to raise presumptions until contrary is proved. The accused is required to rebut statutory presumptions by leading satisfactory evidence that the cheque was not issued for consideration nor in discharge of any debt or liability. Only when proof is adduced to satisfy the test "preponderance of probabilities" of prudent man to believe the accused, then only the burden may shift back to the complainant to adduce proof by convincing evidence of legal and enforceable debt to disprove the probabilities. This statutory presumption has to remain operative as prima facie case for complainant payee/holder in due course. The evidence to the contrary has to be led by the accused to the effect that the cheque was not issued for consideration/debt/liability. Looking to the settled legal position the defence could not have been accepted as satisfactory and probable in the present case for to dislodge statutory presumption that the cheque in question was issued for discharge of debt or liability. It was for the accused to prove to the contrary that there was no any legally recoverable debt or liability onc....
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....38 of the N.I. Act; but the complainant is aided by the statutory presumptions which are self contained under sections 118 and section 139 of the Act. The complainant is required to prove that the cheque was drawn by the accused upon his account in the Bank for a certain sum of money on a certain date which returned dishonoured for non-payment on account of reason i.e. insufficient funds etc., and the accused has failed to pay the said amount, despite service of demand notice in writing upon him, within stipulated period. Once the primary facts as above, are averred and proved by the complainant in such case as required by the penal provision in section 138 of the Act, the statutory presumptions arising are required to be rebutted by "proof" on preponderance of probabilities. Such evidence may be by production of documents to disprove the complainant's version or by citing material elicited from the cross-examination of the complainant and his witnesses, if any. The accused may not enter in the witness box if he can dislodge the statutory presumptions otherwise". "8 Under Section 139 of the N I Act, burden lies upon the drawer of the cheque to rule out the existence of....
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....any debt or liability. The burden was upon the accused to rebut that "presumption" the defense evidence must be such which the Court can believe the defense to exist or consider it's existence as reasonably probable, the standard of reasonability being that of the prudent person. To discharge onus it may not be essential for the accused to enter in the witness box to depose as he can rebut the presumption by cross-examining the complainant and his witnesses if any to prove defence upon preponderance of probabilities. Thus, onus as expected to be discharged by the accused, was not discharged in this case. Once it is held that the accused had failed to rebut the statutory presumptions it ought to be concluded that the presumption itself was tantamount to proof of the case of the complainant." "9. Section 138 of the N.I. Act aims at punishing unscrupulous drawers of cheques who though purport to discharge their liability by issuing cheque, have no real intention to pay. This Court must on guard to prevent miscarriage of justice. The learned trial Magistrate ought to have noticed that the obligation on the part of the complainant stood discharged with the help of statutory....
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....pellant was not owner of six (6) plots which were agreed to be alienated. However, he was owner of the two (2) plots which he had already transferred in favour of one Shri Tufane. The identity of said Shri Tufane is rendered into obscurity. No attempt was made to examine said Shri Tufane. I mean to say, it was incumbent on the respondent No. 1 (accused) to probabalize the defence that the appellant was, in fact, dealing in plotting business and had several such transactions with other customers. In any case, there was no difficulty in filing a copy of registered sale-deed in respect of the plot which was sold to Shri Tufane by the appellant. No such effort was made by the respondent No. 1. Nor it is suggested during cross-examination of PW Lalji that he had alienated those two (2) plots to one Shri Tufane and thereby had cheated the respondent No. 1 in respect of the transaction of sale in respect of the two (2) plots". The learned counsel for the accused Shri S.R. Deshpande relies on the judgment of a learned Single Judge of this Court in Rosa Maria Fernandes vs. Nauso N. Kepkar, 2010 (4) Mh.L.J. 611 and another judgment of a learned Single Judge in Sanjay Mishra vs. Kanishka K....
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....ch the cheques are drawn, as noted in State of Madras vs. A. Vaidyanatha Iyer, 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. at p. 65, para 14). 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 innocence, because by the latter all that is meant is that the prosecution is obliged to prove the case against the accused beyond reasonable doubt. The obligation on the prosecution may be discharged with the help of presumptions of law or fact unless the accused adduces evidence showing the reasonable possibility of the non-existence of the presumed fact. 23. In other words, provided the facts required to form the basis of a presumption of law exists, no discretion is left with the court but to draw the statutory conclusion, but this does n....
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.... 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. (AIR p. 580, para 12)" [See also V.D. Jhingan vs. State of Uttar Pradesh; Sailendranath Bose vs. The State of Bihar and Ram Krishna Bedu Rane vs. State of Maharashtra.]" 11. The nature of the initial burden of proof on the accused to rebut the statutory presumption under Section 139 is explained by the Hon'ble Apex Court in M.S. Narayana Menon Alias Mani v. State of Kerala and another reported in (2006) 6 SCC 39 thus: "29. In terms of Section 4 of the Evidence Act whenever it is provided by the Act that the Court shall presume a fact, it shall regard such fact as proved unless and until it is disproved. The words 'proved' and 'disproved' have been defined in Section 3 of the Evidence Act (the interpretation clause) to mean: " 'Proved' - A fact is said to be proved when, after considering ....
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....es. In such an event, the plaintiff is entitled under law to rely upon all the evidence led in the case including that of the plaintiff as well. In case, where the defendant fails to discharge the initial onus of proof by showing the non-existence of the consideration, the plaintiff would invariably be held entitled to the benefit of presumption arising under Section 118(a) in his favour. The court may not insist upon the defendant to disprove the existence of consideration by leading direct evidence as the existence of negative evidence is neither possible nor contemplated and even if led, is to be seen with a doubt. 5" This Court, therefore, clearly opined that it is not necessary for the defendant to disprove the existence of consideration by way of direct evidence. 32. The standard of proof evidently is preponderance of probabilities. Inference of preponderance of probabilities can be drawn not only from the materials on records but also by reference to the circumstances upon which he relies. 38. If for the purpose of a civil litigation, the defendant may not adduce any evidence to discharge the initial burden placed on him, a 'fortiori' even ....
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....to purchase a plot from the complainant and the transaction did not materialize since the plot was encumbered, the accused not stepping into the witness box and instead examining the father who concededly has no personal knowledge of the transaction, is inexplicable. No evidence is adduced to show that the complainant intended to sell a plot or that the accused entered into an oral agreement to purchase a particular plot. The defence is that the documents were not produced, and the transaction did not materialize since the plot was encumbered, is not probabilized even on the touchstone of probabilities. A prudent person, who enters into an oral agreement to purchase a plot for Rs. 2,50,000/- is not likely to issue a cheque, much less a cheque which is only signed and is blank otherwise, in favour of the seller without perusing the documents. The issuance of a cheque which is only signed leaving the complainant with the freedom to fill in the contents is per say improbable. In the case at hand, the only suggestion given to the complainant is that he owns plots at Washim. No suggestion is given to the complainant that the accused and the complainant entered into an oral agreement to ....