TaxTMI 
TaxTMI 
2025 (3) TMI 1
X X X X Extracts X X X X
X X X X Extracts X X X X
....ndent. 3. Having heard learned counsel for the parties, leave to appeal is granted and the matters are taken-up as criminal appeals for final disposal today itself. APPELLANT'S SUBMISSIONS 4. Mr. Mohd. Rashid, learned counsel appearing on behalf of the appellant (complainant in the criminal complaints) submits, that the case concerns 02 cheques bearing No.167953 dated 08.11.1997 for Rs. 20 lacs and No.167954 dated 10.11.1997 for Rs.10 lacs issued by the respondent to the appellant in discharge of certain debts owed against cement that was supplied by the appellant through the respondent, who (latter) was the appellant's Carrying & Forwarding ('C&F') Agent. 5. Mr. Rashid submits, that a perusal of the impugned judgment would show that the learned Magistrate records that the respondent had admitted that they had issued the said cheques; but, after dealing with the various defences raised on behalf of the respondent, the learned Magistrate proceeds to dismiss the complaints on an incorrect application of the principles of law. It is submitted, that having first correctly enunciated the position of law, the learned Magistrate has subsequently proceeded on the basis that it ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....us then shifted upon the accused to rebut the said presumption. The standard of proof to be discharged by the accused is 'preponderance of probabilities'." 7. Mr. Rashid submits that thereafter, the learned Magistrate proceeds to deal with the various defences raised by the respondent in the following manner : 7.1. That M/s Gujarat Ambuja Cements Ltd. had no authority to prosecute the respondent : Learned counsel submits that this issue was raised since the respondent had had dealings with M/s. DLF Cements Limited, which company was the original complainant, but the name of that company was subsequently changed to M/s. Ambuja Cement Rajasthan Ltd.; and the latter company then amalgamated with M/s. Gujarat Ambuja Cements Ltd. This issue was decided by the learned Magistrate against the respondent, with the following observations : "Perusal of record reveals that vide order dated 29.08.2000, an application seeking change of name of complainant company (DLF Cement Ltd.) to 'Ambuja Cement Rajasthan Ltd.', filed on behalf of the complainant, was allowed. As such, simple name change of the complainant does not affect the rights and liabilities of the parties. Further....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s and hence, could not give the best evidence in the case. Perusal of copy of POA (Mark A) of the first AR of the original complaint reveals that necessary averments have been mentioned in the same for pursuing the present complaint (ref. A. C. Narayanan v. State of Maharasthra & Anr. (2014) 11 SCC 790). Further, it had been mentioned in the evidence affidavit that knowledge about the present case had been derived on the basis of records maintained by the complainant. Considering the same, there is no material infirmity in the authorization of the AR to pursue the complaint case." (emphasis supplied) 7.3 That the respondent was not liable for any legally enforceable debt : Mr. Rashid submits that the learned Magistrate has dealt with this issue, namely the legal liability of the respondent in relation to the cheques in question, which is central to the present appeal, in the following manner : "II. There is no legal liability upon the accused qua the cheque in question. Ld. Counsel for the accused has argued that accounts of the accused were never settled by the complainant. As per the agreement dated 21.01.1997 (Ex.CW1/10), no in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y total liability, is not commensurate with the figures mentioned in the statement of accounts filed on behalf of the complainant and the total of figures mentioned on the same is much lesser than the total amount of cheques in question in the two complaint cases. Hence, further positive evidence was required at the end of the complainant to establish the legal liability of the accused against the cheque in question. "Secondly, reliance cannot also be placed upon the statement of accounts filed on behalf of the complainant. Despite the original complainant being a Limited Company, no audited statement of accounts had been filed on behalf of the complainant to prove the liability of the accused. Adverse inference has to be drawn against the complainant for the same. Further, the account statements filed on behalf of the complainant are computerized documents and yet, no certificate under Section 65 B of Indian Evidence Act has been filed along with the same. AR of the complainant is neither the author of the same nor was able to answer any question regarding the entries on the same. Furthermore, the figures mentioned on the said statements do no corroborate with the Mark X ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....al complainant to secure themselves against bad debts. Initially four blank cheques were given and later a fifth cheque had been demanded on behalf of the complainant. The said facts have been proved by both DW-1 and DW-3 through their testimonies and by proving circular Mark X (this is the second document bearing identification Mark X). Two of those cheques have been misused in the present connected complaints. Further, if it were to be believed that the cheque in question were issued pursuant to letter dated 08.11.1997 (Ex.CW1/11 and also Ex.CW1/D), then how come the said fact of issuance of cheques finds no mention in the said document. This clearly shows that the cheques were not issued on 08.11.1997. Per contra, Ld. Counsel for the complainant has argued that as per agreement dated 21.01.1997 (Ex.CW1/10), security of Rs. 6 lakhs had been taken from the accused and as such, the company did not require any further security from him. Hence, there was no question of taking any blank cheque from the accused. Further, the circular Mark X and other such circulars, relied upon by the accused, mention only about security cheques to be taken from dealers and not from C&F agents. Hence, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d of nature as contemplated under Section 138 of NI Act. "22. In the light of above discussion, on account of the fact that the complainant has failed establish the ingredients of offence under Section 138 of NI Act against the accused beyond reasonable doubt, accused Vijay Bhutda, Proprietor of Shree Lakshmi Venkatesh Cargo Movers and Consultants, is hereby acquitted for the offence under section 138 NI Act. ... ..." (emphasis supplied) 9. Learned counsel for the petitioner submits, that the criminal complaints came to be filed in relation to the subject cheques inter alia based on Minutes of Meeting ('MoM') dated 17.10.1997 signed between the appellant and the respondent, whereby the respondent had admitted to a total outstanding debt of approximately Rs. 76,52,991.75 towards the Indore Depot after considering the pending bills upto 16.10.1997, with details as set-out in the said minutes of meeting; and the respondent had also accepted that further supply of cement to the Indore Depot would resume only after they clear the outstanding upto 30.09.1997. 10. Mr. Rashid submits, that it was in this backdrop that against a total outstanding debt of more than Rs....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 17. Learned counsel argues, that as recorded inter-alia in para 5 of the impugned judgment, the learned Magistrate has also noted that the authorized representative appearing on behalf for the appellant had clearly said in his post-summoning evidence that his knowledge about the case was derived only from the official records; that he was not working with the complainant at the relevant time; and that he was not aware of the records of M/s DLF Cement Ltd. 18. It is pointed-out, that the authorized representative of the complainant had also disclaimed any knowledge about the dealers and C&F Agents of M/s. DLF Cement Ltd. in the Indore Depot area at the relevant time; and had admitted that he could not give any specification of the goods supplied to them. 19. Learned counsel for the respondent also draws attention to what is narrated in para 5 of the criminal complaint filed by the appellant, which is extracted below : "... ... The total outstanding balance as on that date was Rs.30,81,058.50. The accused vide cheque No. 167953 for Rs. 20,00,000/- made part payment towards the outstanding amount in its account." Mr. Mehra submits that therefore, there is discrepanc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....supplied) 139. Presumption in favour of holder.- It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability. (emphasis supplied) 24. Clearly therefore, as per section 118 (a) of the NI Act, a statutory presumption must be drawn in favour of a complainant that every negotiable instrument (such as a cheque) is made or drawn for consideration until the contrary is proved by the accused person. 25. Section 139 of the NI Act goes further to cast the onus on the accused of proving that a cheque was not received by a holder in discharge of a debt or other liability owed. 26. This position of law has been articulated by the Supreme Court in Rangappa vs. Sri Mohan (2010) 11 SCC 441, and further re-articulated by a Coordinate Bench of this court in Satish Kumar vs. State NCT of Delhi 2013 SCC OnLine Del 2963. Furthermore, this court also notices the decision of the Supreme Court in Bir Singh vs. Mukesh Kumar (2019) 4 SCC 197, which has been cited with approval by the Supreme Court in its very recent orde....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r, as to the threshold for rebutting a presumption under section 139 of the NI Act. The relevant portion of the judgement reads thus : "6. In our view the impugned judgment cannot be sustained at all. The judgment erroneously proceeds on the basis that the burden of proving consideration for a dishonoured cheque is on the complainant. It appears that the learned Judge had lost sight of Sections 118 and 139 of the Negotiable Instruments Act. Under Section 118, unless the contrary was proved, it is to be presumed that the negotiable instrument (including a cheque) had been made or drawn for consideration. Under Section 139 the court has to presume, unless the contrary was proved, that the holder of the cheque received the cheque for discharge, in whole or in part, of a debt or liability. Thus in complaints under Section 138, the court has to presume that the cheque had been issued for a debt or liability. This presumption is rebuttable. However the burden of proving that a cheque had not been issued for a debt or liability is on the accused. This Court in the case of Hiten P. Dalal v. Bratindranath Banerjee [(2001) 6 SCC 16 : 2001 SCC (Cri) 960] has also taken an identical v....