Sajal Guha vs Smt. Simamda Guri and Another

Kanchan Chakraborty, J.—This appeal is directed against the judgment and order of acquittal dated 31.5.2010 passed by the learned Additional District Judge, Fast Track, 2nd Court at Alipore in Criminal Appeal No. 15 of 2008 thereby setting aside the judgment of conviction passed by the learned Magistrate on 2.4.2008 against the respondent Sunanda Guin in Complaint Case No. 5842 of 2004 u/s 138 of the N.I. Act. Sajal Guha, the appellant herein lodged one complaint in the Court of the learned Sub Divisional Judicial Magistrate at Alipore alleging therein that he was a licensed money lender and from September, 2003 to 22.1.2004, time to time, the opposite party/respondent Smt. Sunanda Guin had taken a total sum of Rs. 1,00,000/- as loan. Since November, 2003 to 12.4.2004, she had also taken a sum of Rs. 1,20,000/- partly in cash and partly in cheque. Thereby, she had taken total loan of Rs. 2,20,000/- from Sajal Guha. In discharge of her such liability to repay the said loan, on 22.1.2004 and on 12.4.2004, Sunanda issued two post-dated account payee cheques in favour of Sajal Guha of Rs. 1,00,000/- and Rs. 1,20,000/- respectively which he presented with his banker United Bank of India, Sonarpur Branch on 5.10.2004. On 14.10.2004, his banker informed him through Bank memo dated 7.10.2004 that both the cheques were dishonoured as funds were insufficient. On 3.11.2004, Sajal Guha, the complainant sent demand notice through his Advocate under registered post with A/D asking Sunanda to pay total loan amount of Rs. 2,20,000/- covered by the cheques within a period of 15 days from the date of receipt of the notice. The said notice of demand was returned back with postal remark "not claimed". Another notice which was sent on the same date to the office address of Sunanda Guin was duly received by her on 5.11.2004. She failed and neglected to repay the cheque amount despite receiving of the demand notice. But sent a reply thereto through one Advocate making some concocted statements. Sajal Guha also mentioned in his petition of complaint that on 22.1.2004 and 12.4.2004, Sunanda executed two separate documents admitting the aforesaid two separate loans and issuance of cheques in favour of the petitioner with an undertaking to repay the said loan to him along with interest at the rate of 2% per month on principal amount.

The learned Magistrate after taking cognizance of the offence, commenced the trial and examined Sajal Guha, the sole witness of the entire case. The cheques, bank memos, demand notices, acknowledgement cards, postal receipts and two non-judicial stamp papers were admitted into evidence and marked exhibits on behalf of Sajal, the complainant. No witness was examined on behalf of the respondent/Sunanda. No document was also filed on behalf of her in course of trial. She made out a case in course of her examination u/s 313 of the Cr.P.C. that she took loan of Rs. 40,000/- only and at the relevant point of time, she badly needed cash money and as such, issued the cheques in question as per direction of the complainant Sajal and it was settled that he would return the cheques as and when the loan amount is liquidated. But he deposited the cheques in Bank.

The learned Magistrate upon consideration of the evidence on record found that the complainant Sajal Guin succeeded in establishing the case u/s 138 of the N.I. Act and accordingly, recorded his conviction u/s 138 of the N.I. Act and sentenced Sunanda to suffer simple imprisonment for one year and to pay a fine of Rs. 3,00,000/- out of which Rs. 2,75,000/- would be paid to the complainant Sajal Guha as compensation u/s 357(i)(b) of the Code of Criminal Procedure.

The said judgment and conviction was challenged by the convict Sunanda Guin in an appeal being No. 15 of 2008 which was disposed of by the learned Additional District Judge, Fast Track Court No. 2 at Alipore on 31.5.2010 whereby the learned Judge set aside the order of conviction and sentenced passed by the learned Magistrate and acquitted Sunanda Guin from the charge and set her at liberty. The said judgment dated 31.5.2010 has been assailed by Sajal Guha in this appeal mainly on the following grounds;

a) that the learned First Appellate Court failed to appreciate the case as well as the evidence on record in its true and proper perspective;

b) that the learned First Appellate Court passed the judgment impugned ignoring the law as laid down by the Hon''ble Apex Court;

c) that the learned First Appellate Court passed the judgment basing on extraneous and inadmissible evidence making out a case which was not the case either of the parties;

d) that the learned First Appellate Court also misinterpreted the provisions of Section 139 of the N.I. Act read with Section 114 of the Act especially when there was an admission on the part of the respondent Sunanda regarding issuance of cheques in question;

e) that the learned First Appellate Court ignored completely that the respondent Sunanda failed to rebut the presumption by adducing any evidence whatsoever;

f) that the learned First Appellate Court failed to appreciate the contents of Ext. 9 and 10;

g) that the judgment being otherwise bad in law, is liable to be set aside;

The judgment impugned passed by the learned Appellate Court, clearly shows that the learned Court set aside the order of conviction passed by the learned Magistrate mainly on two grounds;

Firstly, that the appellant herein, i.e., complainant failed to discharge his initial burden to establish that he lent Rs. 2,20,000/- to the respondent and as such, the presumption u/s 139 of the N.I. Act will not come to an aid in his favour.

Secondly, that being a money lender, the appellant ought to have filed money lender''s business licence in the trial Court to make the debt and liability in question a legally enforceable debt/liability.

In fact, before this Court, these two points have been actually discussed by the learned Counsels for the parties. It was contended by Ms. Mitra, learned Counsel for the appellant that when issuance of cheques were admitted by the respondent, the presumption u/s 139 of the N.I. Act automatically comes in favour of the payee of the cheque. The presumption u/s 139 of the N.I. Act is a rebutable presumption. Naturally, the burden was entirely on the respondent to establish that the cheques were issued by him for not discharging any legally enforceable debt or liability.

Mr. Bhattacharya, learned Counsel appearing on behalf of the respondent in fact raises no objection to the submission of Ms. Mitra on this point.

In the instant case, the paragraphs 2, 3 and 4 of the petition of complaint indicate clearly that the respondent took loan on Rs. 2,20,000/-, in all, from the appellant as loan and issued two cheques for Rs. 1,00,000/- dated 20.5.2004 and for Rs. 1,20,000/- dated 12.8.2004 (Exts. 1 and 2 respectively). The Exts. 9 and 10 are two documents executed by the respondent on 22.1.2004 and 12.4.2004 whereby she admitted the fact that she had taken loan of Rs. 1,00,000/- and Rs. 1,20,000/- from the appellant on two occasions and in order to discharge the said liability, she has drawn two cheques Exts. 1 and 2) in favour of the appellant. The cheques and the documents were admitted into evidence and marked exhibits on behalf of the appellant without any objection from the side of the respondent.

In course of examination, the appellant made a consistent statement regarding lending Rs. 2,20,000/- to the respondent on two occasions and receiving of two cheques from the respondent in discharge of said loan taken by her and execution of the documents which were marked as Exts. 9 and 10.

In her cross-examination, he flatly denied that he lend Rs. 40,000/- in four installments. He also denied that he compelled the respondent to sign the documents Ext. 9 and 10. He also denied in his cross-examination that Exts. 9 and 10 were signed by the respondent without knowing the contents.

In course of examination u/s 313 of the Cr.P.C., the respondent admitted the issuance of cheques, i.e. Exts. 1 and 2 but at the same time she had taken a plea that she had taken loan of Rs. 40,000/- only and it was settled that the appellant would return the cheques issued by her when the loan would be liquidated. When she was asked about the documents admitted into evidence and marked exhibits on behalf of the appellant, she did not like to give any answer and did not challenge the genuinity and admissibility of any such document.

The learned Appellate Court taken some facts independently which were neither in evidence nor raised before it and came to a conclusion that the appellant failed to discharge his initial burden to establish that he, in fact, lend Rs. 2,20,000/- to the respondent. In doing so, the learned Appellate Court declined to give any benefit of presumption in favour of the appellant u/s 139 and 118 of the N.I. Act.

Section 139 of the N.I. Act is set out below;

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 any part or any debt or other liability.

A bare reading of Section 139 of the Act makes it implicit that a presumption would obviously go in favour of the holder of the cheque to the effect that he received the cheque for the discharge of any debt or other liability unless contrary is proved.

It is true that Section 139 of the Act merely raised presumption in favour of the holder of the cheque that the same has been issued in discharge of any debt or any liability but it does not necessarily establish existence of any legally recoverable debt. This is not a matter of presumption u/s 139 of the N.I. Act. It is also true that the respondent/accused is not required to step into witness box to rebut the presumption. He may discharge his warrant on the basis of material brought on record.

In this context, the decision of the Hon''ble Apex Court in Krishna Janardhan Bhat Vs. Dattatraya G. Hegde, can well be referred to.

In Rangappa Vs. Sri Mohan, , it was held by the Hon''ble Court that since the accused admitted that the signature on the cheque was his, the statutory presumption comes into play and the same has not been rebutted even with regard to the materials submitted by the complainant.

In the instant case, the material submitted by the complainant altogether is not sufficient enough to rebut the presumption which came into play in favour of the appellant in the event of admission made by the respondent/accused that she had drawn the cheques in favour of the appellant and that too for discharging her liability or debt. The fact that she had no knowledge about the contents of the documents which were marked Exts. 9 and 10 cannot be believed and there was no reason for the learned Appellate Court to shift the entire burden on the appellant to establish that the cheques were issued in discharge of any debt or liability. Therefore, I do not find myself in agreement with the view of the learned Appellate Court on this point.

The learned Trial Court rightly raised a question which was, however, not raised before the learned Magistrate. The complainant, i.e., the appellant has made it very clear in his complaint that he was a money lender. Nowhere within the length and breadth of the petition of complaint, it is found that the respondent/accused was near relation or friend or known person to the appellant/complainant. The appellant/complainant charged 2% interest against the loan. All these factors altogether indicates that the complainant was a money lender and lent money to the respondent in course of his money lending business. The learned Appellate Court found that in such a situation, without having any valid licence for money lending business, the loan advanced by the appellant cannot be said to be legally enforceable debt or liability within the meaning Section 138 of the N.I. Act.

Ms. Mitra, learned Counsel appearing for the appellant referred to a decision of this Court in the case of Samarendra Nath Das Vs. Supriyo Maitra, and contended that violation of provisions of Money Lenders Act cannot be a bar for continuation of a complaint u/s 138 of the N.I. Act.

In that case, the Hon''ble Single Judge was of opinion that the point for consideration before the learned Magistrate would be whether or not the act or omission of the accused/petitioner completed offence u/s 138 of the N.I. Act. It would not be a matter for consideration before the learned Magistrate whether the complainant had money lending licence or not since it was not a suit for proceeding under Money Lenders Act and, therefore, Money Lenders Act are not at all relevant for consideration in the trial before the learned Magistrate.

The explanation added to u/s 138 of the N.I. Act says that for the purposes of the section "debt or other liability" means a legally enforceable debt or other liability. Therefore, one of the main ingredients of the offence u/s 138 of the N.I. Act is that the cheque in question which was drawn by the accused must be in discharge of any legally enforceable debt or liability. In other words, when there is no legally enforceable debt or liability but cheque was issued, Section 138 of the N.I. Act is not attracted.

Similar question was raised before Bombay High Court in Nanda Vs. Nandkishor, reported in 2010 Law Suyit (Bom) 26 (2010 (2) ECRN (Bombay) 1459). In that case, the complainant was a money lender under Bombay Money Lenders Act and he charged interest on the loan. He failed to establish that he was having any licence to run such a business. The Bombay High Court came to a conclusion that the cheque drawn in favour of the money lender having no licence to run money lending business against any money borrowed by the drawer of the cheque in course of money lending business of the complainant, cannot be said to be a legally enforceable debt. Similar view was taken by the High Court of Bombay (Aurangabad Bench) in Anil Vs. Purshottam, reported in 2009 Law Suit (Bom) 1865. The Bombay Money Lenders Act, 1946 is pari materia with Bengal Money Lenders Act which lays down that no money lenders shall carry on business of money lending except in the area for which he has been granted a licence and except in accordance with the terms and conditions of such licence. It was the case of the present appellant/complainant before the learned Magistrate that he had money lending business but he has not stated anywhere that he was carrying such money lending business with a valid licence. Under the Bengal Money Lenders Act, no Court shall pass a decree in favour of a money lender in any suit to which the act applies unless the Court is satisfied that at the time when the loan or any part thereof, to which the suit relates was advanced, the money lender held a valid licence, and if the Court is satisfied that the money lender did not hold a valid licence, it shall dismiss the suit. In other words, carrying on money lending business without licence debars a person from doing money lending and recovery of such amount through Court. As per explanation to Section 138 of the N.I. Act, "debt or other liability" means a legally enforceable debt or other liability. So, a loan advanced by a money lender who is doing business of money lending without licence is not a debt or liability legally enforceable and as such, the provision of Section 138 of the N.I. Act will not apply to any such transaction.

In the instant case, although the appellant/complainant claimed himself as a money lender, he did not establish that he was having a valid money lending business at the relevant period of time. He lent money to a person not related to him or not known to him. He imposed 2% interest on the loan advanced. That being the fact it can well be presumed that he lent the money in course of money lending business which was running illegally as he was having no licence. This point was not raised before the learned Magistrate and the learned Magistrate had no occasion to deal with this point. The fact that the complainant was having no money lending licence was not seriously challenged in course of trial. However, the learned Appellate Court took up the point as it was brought to his notice and accordingly, the learned Appellate Court came to a conclusion that without valid money lending business licence, the appellant herein cannot claim the debt in question a legally enforceable debt within the meaning of Section 138 of the Act and as such, presumption u/s 139 of the Act will not also come in aid to him. That finding of the learned Appellate Court does not appear to be incorrect.

Ms. Mitra filed one paper showing that at the relevant time the appellant was having a licence which he surrendered with the authority on 8.12.2005. But this document was not placed before the learned Magistrate and the learned Magistrate had no occasion to deal with the matter. Had the appellant a valid licence at the relevant period of time, the view of the learned Appellate Court would have been otherwise. The matter is subject to strict proof since the question was not raised before the learned Magistrate, the appellant herein did not file any paper regarding his money lending business before the learned Trial Court. No doubt, that the respondent took a loan from the appellant and issued two cheques towards repayment of such loan. Whether the loan is a legally enforceable debt or liability within the meaning of Section 138 of the Act is a question to be decided by the learned Trial Court upon consideration of the documents and evidence on record. Simply because the learned Trial Court did not take up the point or the learned Counsel on behalf of the parties did not bring the fact to the notice of the learned Trial Court, the appellant herein cannot be allowed to be deprived of his money he lent to the respondent and the respondent on the other hand, cannot take an advantage of this position and enjoy the money without repayment.

The justice, in my opinion, would be met if the appellant is given another opportunity to place document regarding his money lending business prevailing at the relevant period of time before the learned Trial Court.

In view of the facts above, I think that it would be wise and proper to remit the case back to the Court of the learned Magistrate only to decide whether the appellant herein had a valid money lending business licence at the relevant period of time or not. The learned Magistrate will take evidence of the appellant/complainant only on this issue giving the respondent opportunity to controvert such a case of the appellant by way of filing documents or cross-examination of the witnesses.

In view of the discussions above, I dispose of this appeal with the following directions;

1) that the case be remitted back to the learned Trial Court for taking evidence, oral and documentary, on the issue that whether the appellant herein had a valid money lenders licence at the relevant period of time or not;

2) that in case such document is produced and oral evidence is adduced, the learned Magistrate should give the respondent an opportunity to file the document to controvert such a case and allow him to cross-examine the witnesses;

3) no other point is open for discussion before the learned Magistrate.

4) upon recording of such evidence, the learned Magistrate, keeping in mind the decision of the learned First Appellate Court, pass a fresh judgment as early as possible within a period of six months.

Let a copy of this judgment along with the L.C.R. be sent down to the learned Trial Court. Urgent Photostat certified copy of this order, if applied for, be given to the appearing parties upon compliance of necessary formalities.