TaxTMI 
TaxTMI 
2025 (4) TMI 1175
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.... had convicted Accused for offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short "the said Act") and sentenced him to suffer S.I. for 1 year and imposed fine of Rs. 87,46,713/- and in default to suffer S.I for 3 months. Accused being aggrieved filed Criminal Appeal No.177 of 2010 before Sessions Court. By judgment dated 14.05.2015, his Appeal was allowed and judgment dated 08.03.2010 was quashed and set aside and the case was remanded back to Trial Court for reconsideration and rehearing with a direction to decide facts in issue about the existence of legal liability or legally enforceable debt against the Accused at the time of issuing the cheques. 5. Case on remand was heard by Trial Court and by judgment dated 01.10.2015 Accused is acquitted of the offence punishable under Section 138 of said Act. 6. This judgment of acquittal is under challenge in the present Appeal. 7. At the outset, it would be worthwhile to note the scope of Appeal against Acquittal and the law with regard to scope of interference by Appellate Court in an Appeal against acquittal. A recent decision of the Division Bench of this Court while deciding Criminal Appeal N....
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....the power conferred by clause (b) which deals with an appeal against an order of conviction, and so, it is obvious that the High Court's powers in dealing with criminal appeals are equally wide whether the appeal in question is one against acquittal or against conviction. That is one aspect of the question. The other aspect of the question centres round the approach which the High Court adopts in dealing with appeals against orders of acquittal. In dealing with such appeals, the High Court naturally bears in mind the presumption of innocence in favour of an accused person and cannot lose sight of the fact that the said presumption is strengthened by the order of acquittal passed in his favour by the trial court and so, the fact that the accused person is entitled for the benefit of a reasonable doubts will always be present in the mind of the High Court when its deals with the merits of the case. As an appellate court the High Court is generally slow in disturbing the finding of fact recorded by the trial court particularly when the said finding is based on an appreciation of oral evidence because the trial court has the advantage of watching the demeanour of the witnesses who ....
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....s are intended to emphasise is that the approach of the High Court in dealing with an appeal against acquittal ought to be cautious because as Lord Russell observed in the case of Sheo Swarup, the presumption of innocence in favour of the accused "is not certainly weakened by the fact that he has been acquitted at his trial". Therefore, the test suggested by the expression "substantial and compelling reasons" should not be construed as a formula which has to be rigidly applied in every case. That is the effect of the recent decisions of this Court, for instance, in Sanwat Singh v. State of Rajasthan AIR 1961 SC 715 and Harbans Singh v. State of Punjab AIR 1962 SC 439 and so, it is not necessary that before reversing a judgment of acquittal, the High Court must necessarily characterise the findings recorded therein as perverse. Therefore, the question which we have to ask ourselves in the present appeals is whether on the material produced by the prosecution, the High Court was justified in reaching the conclusion that the prosecution case against the appellants had been proved beyond a reasonable doubt, and that the contrary view taken by the trial court was erroneous. In answering....
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....viewing the previous decisions, laid down the correct approach that an Appellate Court should adopt in dealing with such cases. Para 70 of the said judgment is as under: "70. In light of the above, the High Court and other appellate courts should follow the well-settled principles crystallised by number of judgments if it is going to overrule or otherwise disturb the trial court's acquittal: 1. The appellate court may only overrule or otherwise disturb the trial court's acquittal if it has "very substantial and compelling reasons" for doing so. A number of instances arise in which the appellate court would have "very substantial and compelling reasons" to discard the trial court's decision. "Very substantial and compelling reasons" exist when: (i) The trial court's conclusion with regard to the facts is palpably wrong; (ii) The trial court's decision was based on an erroneous view of law; (iii) The trial court's judgment is likely to result in "grave miscarriage of justice"; (iv) The entire approach of the trial court in dealing with the evidence was patently illegal; (v) The trial court....
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....evidence or misread the material evidence or has ignored material documents like dying declaration/report of ballistic experts, etc. the appellate court is competent to reverse the decision of the trial court depending on the materials placed." (emphasis supplied) 16. In para 303(1), the Apex Court has held that the Appellate Court has all necessary powers to re-evaluate the evidence led before the trial Court as well as the conclusions arrived at and that it is the duty of the Court to specify the compelling and substantial reasons for reversing the order of acquittal passed by the trial Court. The reasons or reversal have to be cogent and adequate. 17. Thus, the law on the issue i.e. scope for interference in an appeal against acquittal can very broadly be summarized as follows; that in exceptional cases where there are compelling and substantial reasons; and where the judgment under appeal is found to be perverse, clearly unreasonable, manifestly erroneous, contrary to the evidence on record, or contrary to law, and the findings have been arrived at, by ignoring or excluding relevant material or by taking into consideration irrelevant/inadmissible material o....
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.... T.A. Radhakrishnan (PW-8). Whereas in defence, Accused examined himself as DW-1, Chetan Shah (DW-5), T.A. Ramanathan (DW-6), B.L. Gada (DW-7), and Sudhakar Salian (DW-8). Complainant relied on 46 documents in support of his case, prominent amongst which for the purpose of deciding the present challenge are documents exhibited as Exhibits - "P2 to P4" being handwritten note books maintained by Complainant in his own handwriting and Exhibit "P11" to Exhibit "P13" being computer printouts prepared by Complainant. 11. Correspondence of Complainant namely Notice dated 30.07.1996 is below Exhibit - "P6", reply thereto dated 09.08.1996 is below Exhibit- "P8", rejoinder dated 20.09.1996 is below Exhibit- "P10", Computer statements prepared by Complainant are below Exhibit- "P11", "P12", and "P13" and list of borrowers prepared by Complainant below Exhibit- "P14". These 6 are the main exhibits which are referred to and relied upon by Mr. Kurle while making his submissions, to persuade me to appreciate the same in favour of Complainant's case. Accused in his defence has relied upon the documents/exhibits submitted by Complainant and in addition thereto five (5) further documents are plac....
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....he impugned judgment dated 01.10.2015 is erroneous in appreciating the substantial evidence placed on record by Complainant to prove existence of the legal liability and legally enforceable debt against Accused. Though initially Mr. Kurle drew my attention to the judgment dated 08.03.2010 and also attempted to read it, I have impressed upon him to understand the fact that the said judgment stands quashed and set aside by Sessions Court in Appeal by judgment dated 14.05.2015 with a direction to remand the matter back for reconsideration by Trial Court and to determine and decide the facts in issue about existence of the legal liability or legally enforceable debt against Accused at the time of issuing the twin cheques. Complainant has also led fresh additional evidence in the form of Exhibit "P52" thereafter. I therefore asked Mr. Kurle to take me through the impugned judgment dated 01.10.2015 passed by the Trial Court after the above remand and argue his case qua the evidence placed on record and make submissions for challenging and setting aside of the same. I state this because the order of remand dated 14.05.2015 passed by Sessions Court in Criminal Appeal No.177 of 2010 had not....
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....cused issued the subject two cheques to him towards his legally enforceable liability. 14.6. He would submit that along with the Statement of claim, Complainant used to maintain a notebook of day-to-day transactions in which he used to make entries of daily transactions/ investments made which were produced by him in evidence as Exhibits "P-2" to "P- 4". 14.7. He would submit that apart from the above notebooks produced in Court Complainant did not maintain any other record of the transactions. 14.8. He would submit that based on oral and documentary evidence on record, Complainant has proven his case beyond all reasonable doubts and has established a legally enforceable debt and liability under the following eleven (11) heads as stated in Exhibit - "P13", which is the Statement of claim prepared by him. Exhibit "P14" is the list of persons who invested with the Accused at the behest of Complainant. He would submit that Exhibit - "P13" refers to 13 heads of payment. He would submit that the first claim of Complainant is for the is amount of Rs. 8,63,800/- paid by Complainant to several parties as repayment of loan which was arranged by him from such third parties. He would....
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.... eighth claim is of Rs. 1,62,000/- under the heading of 'Outstanding Salary'. Complainant was drawing salary of Rs. 3,000/- per month and his claim is that his salary was not paid from 01.04.1992 to 30.06.1996 as well as his bonus of three years equated to three month's salary all of which remained outstanding. 14.16. The ninth claim is of Rs. 1,76,571/- towards outstanding amount of sub-brokerage payable to Complainant as he was entitled to 0.5 percent of the total annual turnover of the business of Accused. 14.17. The tenth claim is of Rs. 8,275/- for out of pocket expenses that Accused had incurred. 14.18. The eleventh claim is of Rs. 1,67,700/- which is under the heading of 'Interest Claim' and is towards interest for funds arranged by Complainant from persons enlisted in Exhibit "P11" 14.19. He would submit that Exhibit "P13" is prepared by Complainant as per settlement arrived between him and Accused pursuant to which the subject 2 cheques were given to him by Accused for satisfaction of the above liabilities. He would submit that the evidence adduced by Complainant if appreciated would entitle him to the above claim in its entirety. 14.20. He would submit that....
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.... ground this court should consider the supporting evidence below Exhibit "P25" (letter of admission by Accused accepted in 313 statement at appeal paperbook page No.183), Exhibit "P26" to Exhibit 'P28' (similar admissions by Accused in 313 statements), Exhibit "P29" to Exhibit "P33' (Securities cheque and balance sheet), Exhibit "P34" to Exhibit "P37" (admission by Accused regarding securities cheque in 313 statement at appeal paperbook 185) and Exhibit "P38" to Exhibit "P40" (securities cheque and LIC policy surrender receipt), and after examining the same in its proper perspective should have been allowed. He would submit that evidence of defence witnesses namely DW-6 and DW-7 who are two parties who dealt with the Complainant clearly supports Complainant's case and is against the defence raised by Accused. 14.26. He would submit that while passing the impugned judgement the Trial Court has completely disregarded the evidence and liability of PW-4 to PW-8 in its entirety as these persons dealt with the Accused through the Complainant. He would therefore urge the Court to hold that Complainant has proved his case beyond reasonable doubt and Accused deserves to be punished in th....
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....ubmit that Mr. K.P. Vishweshwaran used to buy and sell shares through the firm of Accused. He would submit that two cheques below Exhibit "P-1" were to be issued to Mr. K.P. Vishweshwaran against the outstanding amount of about Rs. 40,00,000/-. However Exhibit "P1" (both cheques) did not bear the name of Mr. K.P. Vishweshwaran or Mr. Girichandran Iyer as the amount was to be split up. He would submit that the details of the name of drawee was also not inserted in Exhibit "P1", as the client was supposed to provide the same. Since the said details were not provided, Exhibit "P1" i.e. two signed cheques remained in custody of Complainant who was managing all office affairs. He would submit that Complainant misused the trust reposed in him, since he was handling the entire work of investment and banking of the firm of Accused for several years and fraudulently inserted his name on the two cheques and claimed them towards his outstanding liability. He would submit that never once did the Complainant demand any of the alleged claim from Accused when he was in service of the Accused. 16. He would submit that in the remand order by the Sessions Judge Complainant was required to prove e....
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.... statement of claim dated 30.06.1996 prepared pursuant to mutual settlement between parties. He would submit that the said suit is dismissed by this court for non-prosecution. He would submit that therefore Complainant has evaded to prove his case for claiming the outstanding amount to be a legally enforceable debt. He would submit that all exhibits in the form of lists exhibited by the Plaintiff in evidence are prepared by him and none of the said lists had been proved in evidence and therefore the findings returned by the learned Trial Court deserve to be accepted as the burden was on the Complainant to prove that the amount stated in the two cheques was in respect of a legally enforceable debt due and payable by the Accused to the Complainant. He has drawn by specific attention to the cross examination of the Complainant which was conducted on 24.07.2015. This was the concluding part of his cross examination. It is appended at page nos. 4 and 8 of the paperbook He would submit that Complainant has admitted the fact that Exhibit "P52" does not add up to Rs. 49,83,836/-. He would submit that apart from Exhibit "P- 52" another document namely Exhibit "P13" is the only other documen....
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....nant to prove that the two cheques were issued to him by Accused towards any legally enforceable debt and liability. Due to this failure he would submit that considering the scope of an appeal against acquittal the reasons stated in the impugned judgement being cogent and relevant, the judgement deserves to be upheld and would therefore urge the court to dismiss the Appeal. 19. Mr. Kale, in support of his above submissions, has referred to and relied upon two decisions of the Supreme Court in the case of (i) Alamelu & Anr Vs. State represented by Inspector of Police (Criminal Appeal No. 1053 of 2009) and (ii) Krishna Janardhan Bhat Vs. Dattatraya G. Hegde (2008) 4 SCC 54. He would submit that argument of the Complainant relating to presumption to be regarded under Section 139 of the said Act cannot be accepted in view of the fact that the said presumption is rebuttable and has been adequately rebutted. 20. He would submit that presumption of innocence as a human right and the doctrine of reverse burden introduced by Section 139 of the said Act should be considered in view of the evidence placed before the Court. He would submit that this is not a case where the Accused has no....
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....curred or took place. Same cause of Action is pleaded by Complainant in the present case also when he is called upon to prove his legally enforceable debt or liability of the Accused towards him. 24. In the above context the evidence before the Trial Court in the present case therefore needs to be thoroughly analysed to prove existence of the legally enforceable debt against the Accused. The Civil Suit has been dismissed by this Court on 13.10.1999 for non- prosecution. It may not have bearing on determination of the present case. The above fact is stated only to show the conduct of the Complainant. 25. The present appeal is dependent upon the strength of the evidence of the Complainant to prove the legally enforceable debt. In the present case it is seen that substantial witness action is led by both sides. What is crucial to be noted is the fact that claim of Complainant is for a substantial tenure of time on the ground that he brought good amount of business to the Accused and was to get 0.5 percent of the total turnover in addition to Rs. 3,000/- per month as salary. Complainant was employee of Accused and his firm, Meera Investments is an admitted fact. The most importan....
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....ase that he had to pay the amount of investment to PW-2 from his own pocket. The claim of PW-2 that action of Complainant is not supported by any documentary evidence so as to entitle Complainant to claim the repayment made by him to PW-2 from the Accused Exhibit "P25" which is the letter given by the Accused to PW-4 is in the normal course of business given by a firm to any investor who parks his funds. That letter has no nexus with the Complainant. The Complainant does not get any right to assume the role of a recovery agent on behalf of PW-2 or PW-4 in the absence of any agreement between the Complainant, Accused and the third parties. 28. Next it is seen that PW-5 K. Ramalingam is the relative of the Complainant who invested Rs. 50,000/- through Complainant with the Accused on 24.12.1990. Admittedly he received interest at the rate of 3 percent on his investment up to February 1995 for five years. This is Complainant's case. Similarly PW-6 T. Ramaswami, Complainant's younger brother, invested Rs. 1,50,000/- in cash with Accused at the behest of the Complainant in 1989. He also received returns in the form of interest at the rate of 2 to 2.5 percent for several years. In the ....
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....n the counterfoil of the chequebook and the notebook which is placed on record as Exhibit "DW2" by the Accused. This clearly shows malafides of the Complainant's case. It is further seen that when the Complainant is confronted with the same in his cross examination he has admitted the same in his deposition. It is clearly discernible that there is no positive evidence proved by the Complainant in support of his case of any legally enforceable debt under any of the eleven (11) heads. 31. It is seen that the entire case of the Complainant is based on Exhibit "P11" to Exhibit "P13" which are the computer statements prepared by the Complainant himself. These statements are clearly prepared by the Complainant after filing of the complaint during the course of Trial. According to Complainant, these entries are based on the diary entries made by him in Exhibit "P2" to Exhibit "P4". The said exhibits namely Exhibit "P11" to Exhibit "P13" are electronic evidence of printouts from the computer which are not proved in evidence under Sections 65A and 65B of the Indian Evidence Act which lay down proof of evidence of electronic record. Thus, case of the Complainant cannot be accepted due to ....
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.... off and canceled by the Complainant himself and if they are juxtaposed with Exhibit "P13" that is the list prepared by the Complainant, they do not match with each other. 36. According to the Complainant there was mutual settlement between the parties but the manner in which the settlement has taken place in discharge of a legally enforceable debt is not proved by him at all despite he been given an opportunity. The evidence led by Complainant merely identifies eleven (11) heads of payment. When the remand was specifically made by the Sessions judge, the only additional evidence led by the Complainant to prove the legally enforceable debt is Exhibit "P52" pertaining to outstanding of the amount of Rs. 1,76,571/- towards sub-brokerage and nothing more. Even the statement on the face of it cannot be accepted without evidence as it is prepared by him subsequently. 37. There is no evidence whatsoever led by the Complainant to prove the outstanding liability under the alleged eleven (11) heads of payment and once this is the case, it cannot be said that Complainant has proved his case beyond reasonable doubt. 38. In view of the above observations and findings, I am in complete....