M. Shanthilal Jain vs S. Manjula

A.N. Venugopal Gowda, J.—1. The judgment of acquittal passed by the learned Trial Judge in a case related to the dishonour of a cheque in respect of the offence under S.138 of the Negotiable Instruments Act, 1881 (for short, ''the Act'') has been assailed in this appeal by the complainant.

The appellant was the complainant and the respondent was the accused in C.C. No. 5520/2013, on the file of the XXI ACMM, Bengaluru. The appellant was a money lender. The respondent and her husband had borrowed money from the appellant in the matter of purchase of motor vehicles. A cheque (Ex. P4) belonging to the respondent, which was with the appellant, alleged to have been issued towards discharge of the debt was presented for encashment on 05.06.2012 and was returned with an endorsement ''account closed'' (Ex. P5), on 06.06.2012. By a notice dated 21.06.2012 (Ex. P6), the respondent was notified (Ex. P7) of the said fact and payment of the cheque amount was demanded. The payment having not been made, a private complaint was filed under S.200 Cr.P.C. alleging commission of offence punishable under S.138 of the Act. Based on the sworn statement, cognizance of the offence was taken and C.C. No. 5520/2013 was registered for the offence punishable under S.138 of the Act. The accused, in response to the summons, appeared and pleaded ''not guilty'' and claimed to be tried. The case having been posted for trial, the complainant got himself examined as PW-1 and marked Exs.P1 to P8. The accused, when examined under S.313 of Cr.P.C, denied the liability and got herself examined as DW-1 and marked Exs.D1 to D14. Learned advocates appearing for the parties having addressed the arguments, the learned Trial Judge, having regard to the evidence brought on record and being of the view that there is no money transaction between the parties in the year 2011 and disbelieving the case of the complainant and being of the opinion that the accused has rebutted the presumption by producing cogent evidence and that the complainant has failed to prove his case, as pleaded, has passed the Judgment dated 11.06.2014. Thereby, the accused was acquitted of the offence.

Sri Rajkumar C, learned advocate, firstly, contended that the learned Trial Judge has failed to correctly appreciate the evidence and, that the finding recorded being perverse, the impugned Judgment is liable to be set aside. Secondly, there is a wrong conclusion, that in the year 2011, money transaction has not taken place. He submitted that in view of Exs.P1 to P3, the issuance of the cheque - Ex. P4 having been proved and the same having been returned as per Ex. P5, the demand was made as per Ex. P6 and there being no reply or the payment of the dishonoured cheque amount and the complaint having been filed in time, the ingredients of the offence under S.138 of the Act has been established. Thirdly, the presumption under Ss.118 and 139 of the Act having not been rebutted, the judgment of acquittal passed is wholly erroneous. Fourthly, the evidence of accused/DW-1 being inconsistent and not credible, ought not to have been accepted and she acquitted of the charge. Learned counsel submitted that impugned Judgment being erroneous and illegal is liable to be set aside and the respondent punished for committing of the offence under S.138 of the Act.

Sri P.M. Nayak, learned advocate, on the other hand, submitted that there being no credible evidence with regard to the issuance of cheque - Ex. P4, in relation to a legally enforceable debt and the complainant having manufactured the documents, which were marked as Exs.P1 to P3, to foist a false case, under S.138 of the Act, the learned Trial Judge has correctly assessed the evidence and is justified in passing the judgment of acquittal. Learned counsel submitted that in view of the credible evidence of the accused/DW-1, supported by Exs.D1 to D14, the learned Trial Judge is justified in holding that the presumption under Ss.118 and 139 of the Act, as having been rebutted, and in view of the failure of the complainant to prove his case, as pleaded in the complaint, in passing the Judgment of acquittal. Learned counsel made submissions in support of the finding recorded by the learned Trial Judge and sought dismissal of the appeal.

Keeping in view the rival contentions and the record of the case, perused by me, the point for consideration is, whether the Trial Judge has committed error in holding that the accused has rebutted the statutory presumption and in passing the judgment of acquittal?

The Trial Court has found the following defects in the case of the complainant:

"(a) Complainant despite stating that he has the documents to show his lending capacity, did not produce the same.

(b) Having stated that the accused had availed vehicle loan also, the documents in that regard was not produced.

(c) Despite adjustment of the loan account out of the seizure and sale of the vehicles through a recovery agent, complainant was unable to say whether Raghu, Recovery Agency had seized the two vehicles.

(d) Ex. P1/DPN is a computer printout and contains in two places - not only two signatures but two LTM marks. The blanks in Exs.P2 and P3 are filled by use of typewriter and they also contain two signatures and an LTM mark on each of them. Exs.P1 to P3 are created documents."

By analysing the evidence placed on record by the complainant and the accused, the Trial Court has held the accused not guilty of the offence under S.138 of the Act and acquitted her.

Ex. P6, the demand notice dated 20.06.2012 shows that the appellant was a money lender and that, on 19.01.2011, the respondent borrowed Rs. 2,00,000/- for her urgent domestic necessities by executing the loan documents and by undertaking to clear the loan liability within one year and that the assurance having not been honoured, after the expiry of one year period, upon persistent requests made, on 01.06.2012, issued the cheque (Ex. P4) and the said cheque, on presentation for encashment, to the shock and surprise of the appellant, was dishonoured on 06.06.2012, with an endorsement "account closed". The respondent was called upon by issue of Ex. P6, to pay the cheque amount within 15 days'' period, by notifying that in case of default, action against her for the offence punishable under S.138 of the Act would be taken and civil proceeding initiated.

Ex. P1 bearing the date 19.01.2011, contains two signatures and two left thumb impression marks of the respondent. Ex. P1 dated 19.01.2011 i.e., the DPN is a computer printout on a green sheet of paper. The printout has been taken on a paper already containing the signatures and LTM Marks. On the reverse side of Ex. P1, there is printout dated 01.06.2012, which is also a computer printout and has on it, the particulars of the dishonoured cheque (Ex. P4). It is unimaginable as to how Ex. P1 can have on its reverse side the particulars of Ex. P4. Even on the reverse side of Ex. P4, there are two signatures and two LTM marks. The printout appearing therein has been adjusted on blank sheet of paper, as has been done even in respect of Ex. P1. Ex. P2 and Ex. P3 are the Demand Promissory Note and Consideration Receipt bearing the date 19.01.2011. Neither Ex. P1 nor Ex. P3 shows the rate of interest. The column with regard to interest is blank. The blanks in Exs.P2 and P3 have been filled by use of a typewriter and the same also contain the signature and also LTM of the respondent, which is surprising. There are no signatures of the attesting witnesses.

The appellant, while deposing as PW-1, has stated that he is a pawn broker and money lender for the past about forty years and that the respondent is known to him, as she was accompanying her husband, who had money transactions with him. According to PW1, Rs. 2,00,000/- was borrowed for the domestic expenditure and the amount was paid by way of cash and that he has the documents to show, that at the time the money was advanced, he had the funds. He has stated that, since the respondent was earlier repaying the amount promptly, he advanced the loan. PW1 has admitted that the respondent had borrowed money for purchase of motor vehicle and according to him, the same is a separate transaction. He has not denied the suggestion that the husband of the respondent had availed loan for the purpose of purchase of four auto rickshaw vehicles. PW1 has expressed ignorance with regard to seizure of two vehicles by a recovery agency.

The accused has got herself examined as DW1. She has deposed that from the complainant, her husband had availed loans for purchase of four vehicles, out of which, three were seized during the year 2008. Her husband has died due to cancer on 28.02.2010. Her bank account was closed on 26.06.2005. According to her, husband had given the dishonoured cheque, towards the security. A vehicle stood in her name and Rs. 35,000/- was availed as loan during 2004 and that her husband had given blank cheque. She has stated that she did not avail any loan from the complainant. She has produced several documents, marked as Exs.D1 to D14. She has denied the suggestion that the Ex. P4 - dishonoured cheque was given in 2012, to cheat the complainant despite knowing the fact that the bank account was closed in the year 2005. She has denied the suggestion that after the death of her husband on 28.02.2010, there being domestic necessities, she took loan of Rs. 2,00,000/- from the complainant and towards repayment Ex. P4 was given.

In order to draw the presumption under S.118 read with S.139 of the Act, the initial burden is on the complainant. He has to show that he had the required funds for advancing the loan and that the cheque in question was issued towards repayment. With regard to the scope of Ss.118 and 139 of the Act, Apex Court has held as follows:

"(i) In M.S. NARAYANA MENON ALIAS MANI v. STATE OF KERALA AND ANOTHER, , (2006) 6 SCC 39, Apex Court has held that the presumptions under S.118(a) and 139 of the Act are rebuttable and that the standard of proof required for such rebuttal is preponderance of probabilities and not proof beyond reasonable doubts. The relevant paragraphs read as are:

"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).

Applying the said definitions of "proved" or "disproved" to the principle behind Section 118(a) of the Act, the court shall presume a negotiable instrument to be for consideration unless and until after considering the matter before it, it either believes that the consideration does not exist or considers the non-existence of the consideration so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that the consideration does not exist. For rebutting such presumption, what is needed is to raise a probable defence. Even for the said purpose, the evidence adduced on behalf of the complainant could be relied upon.

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The standard of proof evidently is preponderance of probabilities. Inference of preponderance of probabilities can be drawn not only from the materials on record but also by reference to the circumstances upon which he relies.

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41.....Therefore, the rebuttal does not have to be conclusively established but such evidence must be adduced before the court in support of the defence that the court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of reasonability being that of the ''prudent man''."

(ii) The aforesaid decision was relied upon in K. PRAKASHAN v. P.K. SURENDERAN, , (2008) 1 SCC 258 and the legal position was explained as hereunder:

"13. The Act raises two presumptions; firstly, in regard to the passing of consideration as contained in Section 118 (a) therein and, secondly, a presumption that the holder of cheque receiving the same of the nature referred to in Section 139 discharged in whole or in part any debt or other liability. Presumptions both under Sections 118 (a) and 139 are rebuttable in nature.

It is furthermore not in doubt or dispute that whereas the standard of proof so far as the prosecution is concerned is proof of guilt beyond all reasonable doubt; the one on the accused is only mere preponderance of probability."

(iii) In KRISHNA JANARDHAN BHAT v. DATTATRAYA G. hegde, , (2008) 4 SCC 54, it has been held as follows:

"32... Standard of proof on the part of an accused and that of the prosecution a criminal case is different.

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Furthermore, whereas prosecution must prove the guilt of an accused beyond all reasonable doubt, the standard of proof so as to prove a defence on the part of an accused is preponderance of probabilities.

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45... Statute mandates raising of presumption but it stops at that. It does not say how presumption drawn should be held to have rebutted. Other important principles of legal jurisprudence, namely presumption of innocence as human rights and the doctrine of reverse burden introduced by Section 139 should be delicately balanced."

The case of the complainant has been examined by the Trial Judge with reference to the material evidence brought on record. The Trial Judge has rightly concluded that the complainant has failed to establish that Ex. P4 was issued towards discharge of any legally recoverable debt. The lacuna in the evidence of the complainant/PW1, has rightly been pointed out. The case of the accused/DW1 has also been noticed. The evidence brought on record has been correctly appreciated. In view of the serious lacuna in the evidence of PW1, which strikes at the root of the complaint filed alleging commission of an offence under S.138 of the Act and there being no error committed, the impugned Judgment is not liable to be set aside.

The finding recorded by the Trial Court against the complainant is neither perverse nor illegal. The case of the complainant being dependent upon the documents which have been tailor-made and the contents of Ex. P4, other than the signature of the respondent being not in her handwriting, the Trial Judge is justified in holding that the accused has rebutted the statutory presumption and in passing the Judgment of acquittal.

In the result, the appeal being devoid of merit is dismissed.