TaxTMI 
TaxTMI 
2023 (10) TMI 418
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.... said to have approached the appellant-complainant (Mr. Rajesh Jain) on 01.03.2014 with a request for lending him money. The meeting is said to have been facilitated by Ms. Gita Sunar the sister-in-law of Mr. Singh who had been working as an employee under Mr. Rajesh Jain for nearly 15 years then. Mr. Rajesh Jain, appellant appearing in-person contended that he had lent a sum of Rs. 6 lacs on that day and has lent further sums thereafter, in the genuine belief that Mr. Ajay Singh would honour his promise of timely repayment and return the sum borrowed with interest, as agreed. 4. The respondent-accused failed to repay as per the timeline agreed. The complainant's efforts to recover his money were met with avoidance tactics. The accused is said to have changed his cellular telephone number without notice to the complainant, with the intent of evading his payment obligations. It is only in the year 2017, that the complainant managed to trace the accused-at which point, the accused sought for forgiveness and promised to repay the amounts borrowed along with interest, within three months. The accused had informed the complainant that he would source the funds to clear his outstand....
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....ot pay the remaining amount since complainant had started demanding higher amount. He further admits of having received the legal notice but denies having issued any cheque. 10. No defense evidence has been led on behalf of the accused. 11. On a consideration of evidence on record, the Trial Court returned a finding that the accused was not guilty. 12. The Trial Court found that (i) the complainant had discharged his initial onus of proving the essential facts underlying the offence under Section 138 of the NI Act; (ii) the signature on the cheque [Exh. CW1/A) was admitted by the accused and, hence, it rightly raised the statutory presumption under Section 139 NI Act. It, then, rightly noted that the onus of rebutting the presumption lay on the accused and said onus was to be discharged by raising a 'probable defence' which would create a doubt as to the existence of a legally enforceable debt. 13. It then framed the point for determination as follows: "The only question remaining for determination is whether a legally valid and enforceable debt existed qua the complainant and the cheque in question (Ex. CWI/A) was issued in discharge of said liability/debt?" 14. Th....
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....nt/acknowledgement of loan advanced. 16. The complainant was granted special leave to appeal under Section 378 (4) CrPC before the High Court of Punjab and Haryana. Proceedings before the High Court 17. On reappreciating the evidence on record, the High Court has found no merit in the appeal and has upheld the order of acquittal passed by the Trial Court. The High Court has reasoned that accused had discharged his onus in rebutting the statutory presumption raised under Section 139 NI Act. The onus, then, once again had shifted to the complainant to prove that the cheque had been issued in respect of a legally enforceable debt and complainant had failed in discharging the onus to prove that cheque was issued in respect of a legally enforceable debt. 18. The underlying basis of the findings in the High Court judgment can be summarised thus: 18.1 The presumption under Section 139 was rebutted by putting questions to the appellant in his cross examination and explaining the incriminating circumstances found in the statement recorded under Section 313 of Cr.P.C. 18.2 The cross examination of the appellant reveals that he had given loan to accused commencing from 1st March, 2014 ....
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....e was issued in discharge of a debt'. Once the presumption operates, the onus rests on the accused to prove the nonexistence of debt/liability and the courts could not have doubted the complainant's case from any point of view. He finally argued that the respondent cannot be said to have raised a 'probable defence' since the case set up in defence was full of inconsistencies and bereft of any evidence. He, accordingly, prays that concurrent findings be set aside, and an order of conviction be passed against the accused. 21. Mr. Yudhvir Dalal, learned counsel has contended that this Court, while hearing an appeal by special leave, must be extremely slow to interfere against concurrent findings. Merely because another view can be taken on reappreciation of the evidence, is no ground to interfere; on the merits, he contends that the accused has discharged the burden fastened by raising a 'probable defence', which meets the standard of 'preponderance of probabilities. He has relied on a few judgments to contend that the presumption can be rebutted even without leading any rebuttal evidence. In this regard, he submits that it is always open to the accused to rel....
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....ement or review of the evidence, unless the assessment of the High Court is vitiated by an error of law or procedure or is based on error of record, misreading of evidence or is inconsistent with the evidence, for instance, where the ocular evidence is totally inconsistent with the medical evidence and so on. (3) that the Court would not enter into credibility of the evidence with a view to substitute its own opinion for that of the High Court (4) that the Court would interfere where the High Court has arrived at a finding of fact in disregard of a judicial process, principles of natural justice or a fair hearing or has acted in violation of a mandatory provision of law or procedure resulting in serious prejudice or injustice to the accused. (5) this Court might also interfere where on the proved facts wrong inferences of law have been drawn or where the conclusions of the High Court are manifestly perverse and based on no evidence: It is very difficult to lay down a rule of universal application, but the principles mentioned above and those adumbrated in the authorities of this Court cited supra provide sufficient guidelines for this Court to decide criminal appeals by sp....
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.... with the concatenation of a number of acts. The following are the acts which are components of the said offence: (1) drawing of the cheque, (2) presentation of the cheque to the bank, (3) returning the cheque unpaid by the drawee bank, (4) giving notice in writing to the drawer of the cheque demanding payment of the cheque amount, (3) failure of the drawer to make payment within 15 days of the receipt of the notice." 28. The five (5) acts as set out in K Bhaskaran's case (supra) are, generally speaking, matters of record and would be available in the form of documentary evidence as early as, at the stage of filing the complaint and initiating prosecution. Apart from the above acts, it is also to be proved that cheque was issued in discharge of a debt or liability (Ingredient no. (ii) in Gimpex's case). The burden of proving this fact, like the other facts, would have ordinarily fallen upon the complainant. However, through the introduction of a presumptive device in Section 139 of the NI Act, the Parliament has sought to overcome the general norm as stated in Section 102 of the Evidence Act and has, thereby fixed the onus of proving the same on the accused. Section 139, ....
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....xistence of other facts. Presumptions of fact are rebuttable by evidence to the contrary. Presumptions of law may be either irrebuttable (conclusive presumptions), so that no evidence to the contrary may be given or rebuttable. A rebuttable presumption of law is a legal rule to be applied by the Court in the absence of conflicting evidence (Halsbury, 4th Edition paras 111, 112]. Among the class of rebuttable presumptions, a further distinction can be made between discretionary presumptions ('may presume') and compulsive or compulsory presumptions ('shall presume'). [G. Vasu V. Syed Yaseen (Supra)] 33. The Evidence Act provides for presumptions, which fit within one of three forms: 'may presume' (rebuttable presumptions of fact), 'shall presume' (rebuttable presumption of law) and conclusive presumptions (irrebuttable presumption of law). The distinction between 'may presume' and 'shall presume' clauses is that, as regards the former, 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 a case the Court has an option to raise the presumption and raises the presumption....
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....wer's signature, without admitting the execution of the entire contents in the cheque, is now sufficient to trigger the presumption. 38. As soon as the complainant discharges the burden to prove that the instrument, say a cheque, was issued by the accused for discharge of debt, the presumptive device under Section 139 of the Act helps shifting the burden on the accused. The effect of the presumption, in that sense, is to transfer the evidential burden on the accused of proving that the cheque was not received by the Bank towards the discharge of any liability. Until this evidential burden is discharged by the accused, the presumed fact will have to be taken to be true, without expecting the complainant to do anything further. 39. John Henry Wigmore Rules of Evidence- The Hidden Origin of Modern Law on Evidence states as follows: "The peculiar effect of the presumption of law is merely to invoke a rule of law compelling the Jury to reach the conclusion in the absence of evidence to the contrary from the opponent but if the opponent does offer evidence to the contrary (sufficient to satisfy the Judge's requirement of some evidence), the presumption 'disappears as a ru....
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....arily be direct evidence i.e., oral or documentary evidence or admissions made by the opposite party; it may comprise circumstantial evidence or presumption of law or fact. 44. The accused may adduce direct evidence to prove that the instrument was not issued in discharge of a debt/liability and, if he adduces acceptable evidence, the burden again shifts to the complainant. At the same time, the accused may also rely upon circumstantial evidence and, if the circumstances so relied upon are compelling the burden may likewise shift to the complainant. It is open for him to also rely upon presumptions of fact, for instance those mentioned in Section 114 and other sections of the Evidence Act. The burden of proof may shift by presumptions of law or fact. In Kundanlal's case- (supra) when the creditor had failed to produce his account books, this Court raised a presumption of fact under Section 114, that the evidence, if produced would have shown the non-existence of consideration. Though, in that case, this Court was dealing with the presumptive clause in Section 118 NI Act, since the nature of the presumptive clauses in Section 118 and 139 is the same, the analogy can be extended....
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..... 50. In the statement recorded under Section 313 of Cr.P.C., the first incriminating circumstance put to the accused was as follows : "It has come in evidence against you that you along with your wife, Jyoti visited the plaintiff an Orthopaedic Surgeon on 1-3-14, and availed friendly loan from plaintiff from time to time through sister of Jyoti namely Gita Sunar working there, on the plea of need for family requirements, and promised to pay up the "interest moneys as also the entire Principal amounts, what do you have to say about this? He responded to said suggestion/question as follows: "I had taken some money from the plaintiff. I have taken Rupees Twenty Lac from the plaintiff." 51. When it was put to him that he has reneged on his promise to pay on several occasions and sought to avoid the complainant by changing his telephone number, the accused denies that he had changed his number but however, admits that he could not pay the entire sum at one go. He further admits that he did pay some interest but could not pay the remaining sum since the complainant would increase the outstanding amount every month by one lakh rupees and had been demanding higher amount. As r....
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....In fact, the signature on the cheque having not been disputed, and the presumption under Section 118 and 139 having taken effect, the complainant's case stood satisfied every ingredient necessary for sustaining a conviction under Section 138. The case of the defense was limited only to the issue as to whether the cheque had been issued in discharge of a debt/liability. The accused having miserably failed to discharge his evidential burden, that fact will have to be taken to be proved by force of the presumption, without requiring anything more from the complainant. 55. As rightly contended by the appellant, there is a fundamental flaw in the way both the Courts below have proceeded to appreciate the evidence on record. Once the presumption under Section 139 was given effect to, the Courts ought to have proceeded on the premise that the cheque was, indeed, issued in discharge of a debt/liability. The entire focus would then necessarily have to shift on the case set up by the accused, since the activation of the presumption has the effect of shifting the evidential burden on the accused. The nature of inquiry would then be to see whether the accused has discharged his onus of re....
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....gation might not have travelled all the way up to this Court. 60. Coming to the finding of High Court, we find again, there has been fundamental error in the approach with which the High Court has proceeded to consider the evidence on record. In paragraph 6 of the impugned order, the High Court finds that the complainant has proved the issuance of cheque, which means that the presumption would come into immediate effect. In paragraph 13, it rightly observes that the burden is on the accused to rebut such presumption. In the very next paragraph, it finds that the accused has rebutted the presumption by putting questions to the complainant and explaining the circumstances under section 313 Cr.P.C. 61. There is no elucidation of material circumstances/basis on which the Court reached such conclusion. It notes the allegation made in the complaint that the complainant had given the loan on 01.03.2014 and on several dates thereafter. Based on this averment, the High Court rather shockingly concludes that: "If the complainant had given loans on various dates, he must have maintained some document qua that, because it was not a one-time, loan but loan along with interest accrued on the p....