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2024 (8) TMI 468
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....backdrop giving rise to the present challenge is that the Appellant is the original complainant who claims to know the sole Respondent for the last six years and that he had borrowed INR 2,00,000/- (Rupees Two Lakhs only) from the Appellant on account of family necessities and accommodation. Against the said loan the Respondent issued a cheque bearing No. 015639 which was drawn on the Bank of India, as a guarantee against repayment. He was to repay the said loan amount within a period of six months thereof. An agreement to this effect was also signed between the parties. 4. However, since the Respondent failed to repay the loan despite repeated requests, the Appellant presented the concerned cheque for encashment on 22.10.2013, but nevertheless, as per the Bank Memo dated 24.10.2013, the cheque was dishonoured on account of "insufficient funds". 5. Aggrieved from the said dishonour of cheque, a Demand Notice dated 31.10.2013 was sent by the Appellant to the Respondent, whereby, the Counsel on behalf of the Appellant alleged that the Respondent had intentionally cheated him and had not made any efforts to discharge his liability. Accordingly, the Respondent was said to have co....
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....ated in favour of the Respondent, resultantly dismissing the complaint moved by the Appellant and acquitting the Respondent. 9. Aggrieved by the decision of Trial Court, the Appellant moved the High Court of Karnataka in Criminal Appeal No. 200139 of 2019, which went on to observe that, admittedly, there was a contradiction in the statement of the Appellant as to when the cheque was issued in his favour. Furthermore, as was laid down in the decision of this Court in Rangappa v. Sri Mohan (2010) 11 SCC 441, the presumption under Section 139 of the NI Act 1881 is a rebuttable one. The contention of the Respondent as to the financial capacity of the Appellant to grant a loan in his favour was to be discharged by him, and being unable to do so, it shall be presumed that a loan transaction had not taken place. Accordingly, the findings of the Trial Court were affirmed in the impugned Judgment dated 03.03.2023. 10. The Appellant has thereupon moved this Court in challenge to the said impugned judgment on the grounds that as the signature on the concerned cheque was admitted by the Respondent, the Appellant was able to successfully raise a presumption under Section 139 of the NI Act....
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....for the payment of the said amount of money by giving a notice; in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. Explanation.-For the purposes of this section, "debt of other liability" means a legally enforceable debt or other liability." 13. This Court in ICDS Ltd. v. Beena Shabeer and Another (2002) 6 SCC 426, has held that proceedings under Section 138 of the NI Act 1881 can be initiated even if the cheque was originally issued as security and was subsequently dishonoured owing to insufficient funds. The failure to honour the concerned cheque is per se deemed as a commission of an offence under Section 138 of the NI Act 1881. 14. The NI Act 1881 enlists three essential conditions that ought to be fulfilled before the said provision of law can be invoked. Firstly, the cheque ought to have been presented within the period of its va....
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....Moreover, issuance of a nonbailable warrant in case of absence of the accused, at the first instance, shall, due to any circumstance, be avoided. 18. As the presumption contemplated by virtue of Section 118 of the NI Act 1881 entails, Section 139 was similarly introduced to provide for a presumption that the holder of cheque had received the concerned issued cheque towards discharging of the liability of the drawer, either in whole or in part. Therefore, at this juncture, it is ideal to make a reference to Section 118 of the NI Act 1881, which is reproduced as: "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....
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....esaid presumption entails an obligation on the court conducting the trial for an offence under Section 138 of the NI Act 1881 to presume that the cheque in question was issued by the drawer or accused for the discharge of a particular liability. The use of expression "shall presume" ameliorates the conundrum pertaining to the right of the accused to present evidence for the purpose of rebutting the said presumption. Furthermore, the effect of such presumption is that, upon filing of the complaint along with relevant documents, thereby prima facie establishing the case against the drawer, the onus of proof shifts on the drawer or accused to adduce cogent material and evidence for rebutting the said presumption, and as established in Laxmi Dyechem v. State of Gujarat and Others (2012) 13 SCC 375, based on preponderance of probabilities. 20. While describing the offence envisaged under Section 138 of the NI Act 1881 as a regulatory offence for largely being in the nature of a civil wrong with its impact confined to private parties within commercial transactions, the 3-Judge Bench in the decision of Rangappa (supra) highlighted Section 139 of the NI Act 1881 to be an example of a re....
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....ty, or through adduction of circumstantial evidence vide standard of preponderance of probabilities. 22. Since a presumption only enables the holder to show a prima facie case, it can only survive before a court of law subject to contrary not having been proved to the effect that a cheque or negotiable instrument was not issued for a consideration or for discharge of any existing or future debt or liability. In this backdrop, it is pertinent to make a reference to a decision of 3-Judge Bench in Bir Singh v. Mukesh Kumar (2019) 4 SCC 197, which went on to hold that if a signature on a blank cheque stands admitted to having been inscribed voluntarily, it is sufficient to trigger a presumption under Section 139 of the NI Act 1881, even if there is no admission to the effect of execution of entire contents in the cheque. 23. It is therefore apposite to make a reference to the provision of Section 140 of the NI Act 1881, which ruminates mens rea to be immaterial while dealing with proceedings under Section 138 of the NI Act 1881. The said legislative wisdom of the Parliament which is imbibed in the bare text of the provision is reproduced as below: "140. Defence which may....
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....t not to adduce any further or new evidence from his end in said circumstances to rebut the concerned statutory presumption. 27. Applying the aforementioned legal position to the present factual matrix, it is apparent that there existed a contradiction in the complaint moved by the Appellant as against his cross-examination relatable to the time of presentation of the cheque by the Respondent as per the statements of the Appellant. This is to the effect that while the Appellant claimed the cheque to have been issued at the time of advancing of the loan as a security, however, as per his statement during the cross - examination it was revealed that the same was presented when an alleged demand for repayment of alleged loan amount was raised before the Respondent, after a period of six months of advancement. Furthermore, there was no financial capacity or acknowledgement in his Income Tax Returns by the Appellant to the effect of having advanced a loan to the Respondent. Even further the Appellant has not been able to showcase as to when the said loan was advanced in favour of the Respondent nor has he been able to explain as to how a cheque issued by the Respondent allegedly in f....
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....ption gets emboldened by virtue of concurrent findings of acquittal. Therefore, this court must be extracautious while dealing with a challenge against acquittal as the said presumption gets reinforced by virtue of a well-reasoned favourable outcome. Consequently, the onus on the prosecution side becomes more burdensome pursuant to the said double presumption. ii) In case of concurrent findings of acquittal, this Court would ordinarily not interfere with such view considering the principle of liberty enshrined in Article 21 of the Constitution of India 1950, unless perversity is blatantly forthcoming and there are compelling reasons. iii) Where two views are possible, then this Court would not ordinarily interfere and reverse the concurrent findings of acquittal. However, where the situation is such that the only conclusion which could be arrived at from a comprehensive appraisal of evidence, shows that there has been a grave miscarriage of justice, then, notwithstanding such concurrent view, this Court would not restrict itself to adopt an oppugnant view. [ Vide State of Uttar Pradesh v. Dan Singh (1997) 3 SCC 747 ] iv) To adjudge whether the concurrent ....