SMTI KALPANA BAISHYA vs KARUNA DEKA

This revision is directed against the judgment and order dated 24.09.2014 passed by learned Addl. Sessions Judge No. 2, Kamrup(M) in

Criminal Appeal No. 221/2013. By the said judgment, learned Sessions Judge dismissed the appeal and confirmed the judgment and order passed

by the learned Judicial Magistrate, Kamrup, whereby the petitioner was convicted u/s 138 NI Act and sentenced to imprisonment for six months

and to pay compensation of Rs. 4,96,000/- to the complainant.

As per prosecution case, the complainant/respondent was the holder of a cheque issued by the appellant on 07.12.2010 for an amount of Rs. 4

lakhs. The respondent deposited the cheque with the bank for encashment, which was initially dishonoured on 12.12.2010 with the endorsement

insufficient fund"". Therefore, the respondent again deposited the cheque with the bank for encashment, which was returned by the bank with the

endorsement ""payment has been stopped by the drawer"". The respondent issued statutory notice demanding the cheque amount and on failure of

the petitioner to pay the amount, the respondent lodged a complainant before the Magistrate u/s 138 NI Act.

Learned Magistrate took cognizance and issued process.

In course of trial, complainant examined one witness being the complainant himself. The accused/respondent also examined two witnesses in

support of his defence. On appreciation of evidence, learned trial court convicted the revision petitioner u/s 138 NI Act and awarded sentence as

indicated above.

Aggrieved by the judgment of conviction and sentence, the petitioner preferred appeal before the Addl. Sessions Judge No. 2, Kamrup.

Learned Sessions Judge by the impugned judgment, dismissed the appeal and upheld the conviction and sentence of the petitioner.

Aggrieved, the petitioner preferred the instant revision petition.

I have heard Mr. B. Chakraborty, learned counsel for the petitioner and also Mr. P. Borah, learned counsel for the respondent.

Learned counsel for the petitioner submitted that there was no legally enforceable debt, nor the cheque was issued for any consideration. The

respondent/complainant procured the cheque forcibly, and he had himself written his name, amount etc in the cheque and lodged a false case

claiming Rs. 4 lakhs. Further contention of the learned counsel for the petitioner was that the statutory presumptions u/s 139 and section 118 (a) of

the PFA Act stood rebutted by the materials elicited in cross-examination of the respondent and the evidence of DWs and respondent failed to

adduce any evidence to prove that the cheque was issued for consideration or in discharge of enforceable debt, but the learned trial court as well

as the appellate court, without appreciating the evidence in proper perspective, convicted the petitioner. It was further submitted by the learned

counsel, that the statutory presumptions in favour of the complainant having stood rebutted, the petitioner could be convicted u/s 138 NI Act, in

absence of evidence to prove that the cheque in question was issued for discharge of any enforceable debt or for consideration. To buttress his

submission, the learned counsel has placed reliance on the following decisions :-

(ii) (2013) 1 SCC 327 (Reverend Mother Marykutty V. Reni C. Kottaram & Anr.).

(ii) (2014) 2 SCC 236 (John K. Abraham V. Simon C. Abraham & Anr.).

(iii) AIR 2009 (SC) 1518 (Kumar Exports V. Sharma Carpets)

Refuting the submission of the petitioner side, learned counsel for the respondent submits that the cheque was duly issued by the respondent in

discharge of debt, and respondent having duly proved all the ingredients of offence u/s 138 NI Act by adducing evidence, and the petitioner having

failed to adduce evidence sufficient to rebut the presumption u/s 139 and 118 (a), the impugned judgment warrants no interference by this Court.

In support of his submissions, learned counsel placed reliance on a decision of Andhra Pradesh High Court reported in Sudhir Sabharawal V. Anil

Prabhakar Nilgirwar, 2003-LAWS (APH)-3-33, wherein the Andhra Pradesh High Court observed as under -

Whenever the person accused of offence under section 138 of the Act intends to plead that there did not exist legally enforceable debt, it is

for him to place such material before the Court in the form of oral and documentary evidence as is sufficient and adequate to neutralise the

presumption provided for under Section 139 of the Act. In the present case, except deposing that there did not exist any such legally enforceable

debt or liability, the petitioner did not come forward with any acceptable and reliable evidence. Therefore, having regard to the presumption

provided for under Section 139 of the Act, the law laid down by the Supreme Court in Hiten P. Dalai (supra), and in the absence of rebuttal by the

petitioner, the Courts below were left with no alternative except to continue with the presumption as to the existence of the debt in favour of the

respondent. This Court is not persuaded to take a different view.

From the rival contention of the parties it appears that the sole question raised in this petition for consideration is whether the cheque in

question was issued for consideration and discharge of enforceable debt or whether the statutory presumption in favour of the petitioner was

rebutted.

Admittedly, except the signature in the cheque in question, all other particulars, including the amount, was written by the drawee of the cheque

and not by the drawer. Both the trial court as well as the appellate court, on the basis of evidence on record came to the conclusion that the

cheque in question having been signed and issued by the accused/petitioner, the legal presumption u/s 139 and 118 (a) of NIA Act was available

to the complainant, and such presumption remained unrebutted.

Sections 118 (a) and 139 of the NI Act read as follows :

S. 118 (a) Unless contrary is proved, the forlong presumption shall be made. That every negotiable instrument was made or drawn for

consideration, and that every such instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed,

negotiated or transferred for consideration.

S. 139 ""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, or any debt or other liability.

Sections 118 (a) raises a presumption in favour of the holder of the cheque to the effect that the cheque was issued for consideration and

section 139 raises a presumption that the cheque was issued for discharge, in whole or in part, of any debt or other liability. The expression ""unless

the contrary is proved"", appearing in both the provisions makes it clear that the presumption in favour of the holder of the cheque u/s 118 (a), as

well as, under section 139 NI Act are rebuttable like all other presumptions. However, the presumption u/s 139 and 118 (a) being legal

presumption, such presumption shall be available to the holder in due course or the payee of the cheque, as the case may be, until rebutted.

Learned trial court, as well as, the appellate court, relying on a decision of this court in Manik Lodh vs. Sate of Assam, (2007) 3 GLT 207,

held that the petitioner, drawer of the cheque has failed to rebut the presumption and convicted the petitioner as other ingredients to constitute

offence u/s 138 NI Act were proved.

Section 4 of the Evidence Act provides for three categories of presumptions - (i) may presume; (ii) shall presume and (ii) conclusive proof.

Wherever it is provided by the statute that the court may presume, the court may either presume a fact to be proved, until it is disproved or may

call for proof of it. When it is provided that the court shall presume a fact as proved unless and until it is disproved, the court does not have any

other option, but to presume such fact until rebutted. The presumptions provided by section 118 (a) and 139 falls in the category of ""shall

presume"", and therefore, when a cheque is issued, it is obligatory on the part of the court to presume that the cheque was issued for consideration

and it was also received by the holder in the nature referred to in section 138 NI Act for discharge, in whole or in part, of any debt or other

liability. Unless the contrary is proved, the court shall presume that cheque was issued for discharge of any debt and that it was for consideration. It

is trite, that the presumptions provided in section 118 (a) and section 138 of NI Act are rebuttal presumptions.

In the case of Manik Lodh (supra) this court held that in view of the expression ""unless the contrary is proved"" occurring in section 139 NI

Act, the contrary has to be proved to rebut the presumption either by bringing on record the material extracted by cross-examination of the witness

of the complainant or by adducing defence evidence. So, it is not necessary, that for rebutting a presumption, the drawer of the cheque has to

come to the dock to adduce evidence. In a particular case, the presumption may stand rebutted even by materials discernible from the evidence of

the complainant or from the material elicited in cross-examination of the complainant or his witnesses. It is also to be borne in mind at the same

time, that the accused in a criminal case is not required to prove his plea of defence with the same vigour, as is required for the prosecution to

prove its case. Prosecution needs to prove each and every ingredient constituting the charge, beyond reasonable doubt; whereas, standard of

proof to establish a defence plea cannot be more stronger than the preponderance of probability. If the accused either by adducing evidence or

from the materials elicited from the witness of the complainant can probabilise the plea of defence in the touchstone of preponderance of

probability, the burden of the accused would stand discharged. Thus, once the drawer of the cheque or the accused succeeds in probabilising his

defence by bringing on record some material having the effect of rebutting the presumption, the onus stands shifted to the complainant again to

prove that the cheque in question was issued in discharge of enforceable debt or it was issued for consideration. Because burden to prove the guilt

of the accused beyond reasonable doubt is always with the complainant/prosecution, which never shifts.

The Apex court in Kumar Exports Vs.Sarma Carpets, AIR 2009 SC 1518 relied by the petitioner, while dealing with the burden of the

complainant to prove its case vis-a-vis the presumption u/s 139 and 118 (a) of the NI Act observed as under :-

The use of the phrase ""until the contrary is proved"" in Section 118 of the Act and use of the words ""unless the contrary is proved"" in Section 139

of the Act read with definitions of ""may presume"" and ""shall presume"" as given in 13Section 4 of the Evidence Act, makes it at once clear that

presumptions to be raised under both the provisions are rebuttable. When a presumption is rebuttable, it only points out that the party on whom

lies the duty of going forward with evidence, on the fact presumed and when that party has produced evidence fairly and reasonably tending to

show that the real fact is not as presumed, the purpose of the presumption is over. The accused in a trial under Section 138of the Act has two

options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case the non-existence of

consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory

presumptions an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The

accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability

to be discharged by him. However, the court need not insist in every 14case that the accused should disprove the non-existence of consideration

and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear

that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which

is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused

should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did

not exist or their non-existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not

exist. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any

debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may

likewise shift again on to the complainant. The accused 15may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of

the Evidence Act to rebut the presumptions arising under Sections 118 and 139 of the Act. The accused has also an option to prove the non-

existence of consideration and debt or liability either by letting in evidence or in some clear and exceptional cases, from the case set out by the

complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the

trial. Once such rebuttal evidence is adduced and accepted by the court, having regard to all the circumstances of the case and the preponderance

of probabilities, the evidential burden shifts back to the complainant and, thereafter, the presumptions under Sections 118 and 139 of the Act will

not again come to the complainant''s rescue.

The Apex Court in John K. Abraham Vs. Simon C. Abraham & Anr., (2014) 2 SCC 236, while dealing with the presumption u/s 139 and

118 (a) of the NI Act, held as under :-

It has to be stated that in order to draw the presumption under section 118 read along with section 139 of the Negotiable Instruments Act, the

burden was heavily upon the complainant to have shown that he had the required funds for having advanced the money to the accused; that the

issuance of the cheque in support of the said payment advanced was true and that the accused was bound to make the payment as had been

agreed while issuing the cheque in favour of the complainant.

In the above case, the allegation was that the drawer of the cheque borrowed Rs. 1,50,000/- from the complainant and the cheque was stated

to have been issued in discharge of the said debt of Rs. 1,50,000/-. From the evidence and materials on record, it was revealed that the

complainant did not have the capability to extend loan of Rs. 1,50,000/-. The evidence and materials brought on record probabilised the defence

case that the complainant did not have the capacity or required funds for extending loan of Rs, 1,50,000/- and on surfacing such materials

probabilising the defence case, the Apex Court held that the burden was with the complainant to show that he had the required funds to advance

loan to the drawer of the cheque.

In Reverend Mother Marykutty Vs. Rani C. Kottaram, (2013) 1 SCC 327, while dealing with the question of rebuttal of presumption under

the NI Act, the Apex Court held as under :-

That apart having considered the conclusions of the learned trial Judge, we find that those conclusions were drawn by adducing cogent and

convincing reasoning and we do not find any fault in the said conclusions drawn by the learned trial Judge. In the circumstance, the principles set

out in the decision relied upon by the learned counsel for the appellant in M.S. Narayana Menon alias Mani (supra) as regards the presumption to

be drawn and the preponderance of probabilities to be inferred, as set out in paragraphs 31 to 33, are fully satisfied. Those principles, set out in

paragraphs 31 to 33, can be usefully referred to which are as under:

A Division Bench of this Court in Bharat Barrel & Drum Mfg. Co. v. Amin Chand Payrelal albeit in a civil case laid down the

law in the following terms: (SCC pp. 50-51, para 12) ""12. Upon consideration of various judgments as noted hereinabove, the

position of law which emerges is that once execution of the promissory note is admitted, the presumption under Section 118(a) would

arise that it is supported by a consideration. Such a presumption is rebuttable. The defendant can prove the nonexistence of a

consideration by raising a probable defence. If the defendant is proved to have discharged the initial onus of proof showing that the

existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the plaintiff who will be obliged

to prove it as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the negotiable

instrument. The burden upon the defendant of proving the non-existence of the consideration can be either direct or by bringing on

record the preponderance of probabilities by reference to the circumstances upon which he relies. In such an event, the plaintiff is

entitled under law to rely upon all the evidence led in the case including that of the plaintiff as well. In case, where the defendant fails

to discharge the initial onus of proof by showing the non-existence of the consideration, the plaintiff would invariably be held entitled

to the benefit of presumption arising under Section 118(a) in his favour. The court may not insist upon the defendant to disprove the

existence of consideration by leading direct evidence as the existence of negative evidence is neither possible nor contemplated and

even if led, is to be seen with a doubt."" This Court, therefore, clearly opined that it is not necessary for the defendant to disprove the

existence of consideration by way of direct evidence.

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.

Presumption drawn under a statute has only an evidentiary value. Presumptions are raised in terms of the Evidence Act.

Presumption drawn in respect of one fact may be an evidence even for the purpose of drawing presumption under another."" .

Applying the abovesaid principles to the case on hand, we find that the judgment of the trial Court in having drawn the conclusions to

the effect that the appellant sufficiently rebutted the initial presumption as regards the issuance of the cheque under Sections 138 and

139 of the Act, was perfectly justified. We also find that the preponderance of probabilities also fully support the stand of the

appellant as held by the learned trial Judge. The judgment of the High Court in having interfered with the order of acquittal by the

learned trial Judge without proper reasoning is, therefore, liable to be set aside and is accordingly set aside. Consequently, the

conviction and sentence imposed in the judgment impugned is also set aside.

What therefore follows from the above authorities of the Apex Court is that in order to rebut the presumptions raised by section 118 (a) and

section 139 of the Negotiable Instruments Act, it is not necessary that the accused must step into the witness box to rebut the presumption nor the

accused is required to disprove the existence of consideration by any direct evidence, inasmuch as, it may not be possible in all cases to adduce

direct evidence of a negative fact. The presumption drawn can very well be rebutted by reference to the facts and circumstances elicited from the

evidence of the prosecution.

Coming to the case at hand, the complaint is totally silent as regard the cheque having been issued in discharge of any debt or for any

consideration. It has been simply stated in the complaint that the complainant is the holder of the cheque, which was issued by the drawer towards

the payment of his entitlement of Rs. 4 lacs. There is not even a whisper in the complaint as to the basis of entitlement of Rs. 4 lacs. However, in

his evidence the complainant stated that the drawer of the cheque purchased goods from his shop on credit for seven months and Rs. 90,000 was

due for such purchase and he advanced loan of Rs.3,10,000/- to the accused in two instalments. In crossexamination he stated that there was no

document with regard to providing the loan of Rs.3,10,000/- to the petitioner. It was also elicited from the cross-examination of PW 1, that the

complainant has been running a small pan shop under the name and style ""Mama Bhagin Pan Dokan"". No document had been produced to

support the claim, that the petitioner purchased goods on credit for amount of Rs. 90,000/- during seven months. The accused/petitioner stated

that she borrowed Rs. 40000/- from the complainant, out of which she repaid Rs. 20,000/- in two instalments and she was liable to pay Rs.

20,000/- only. However, the complainant forcibly obtained a cheque from her, wherein he had written his name and the figure of Rs. 4 lakhs by

himself and presented the said cheque in the bank. It is an admitted position that except the signature, all other entries in the cheque, including the

amount were made by the complainant. Admittedly the petitioner is a widow and working as Grade - IV employee. It was also elicited during

cross examination, that acquaintance of the complainant with the petitioner was only as a customer.

Term ''proved"", ""disproved"" and ""not proved"" has been defined in section 3 of the Evidence Act as under :-

Proved"" .-A fact is said to be proved when, after considering the matters before it, the Court either believes it to exist, or considers its existence

so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists.

Disproved"". - A fact is said to be disproved when, after considering the matters before it, the Court either believes that it does not exist, or

considers its non-existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it

does not exist.

Not proved"". - A fact is said not to be proved when it is neither proved nor disproved.

The definition of ""proved"" or ""disproved"" provides for two condition of mind, firstly the situation in which a man feels absolutely certain of a

fact or in other words, ""believes it to exist'' or ""believes that it does not exist"". Secondly though a man may not feel absolutely certain of a fact, but

he thinks it so probable, that a prudent man under the circumstances assumes its existence. As absolute certainty is seldom to be had in the affairs

of practical life, we need to act on certain degrees of probability. Therefore, degrees of probability plays an important role in judging a right or

wrong or existence or non-existence of a fact. Absolute certainty being seldom possible, one needs to look for such a high degree of probability,

so as to justify one in regarding it as certainty and to act accordingly. Therefore, one has to keep in mind the realities of life while coming to the

conclusion with regard to existence or non -existence of a thing so as to decide whether certain fact has been ""proved"" or ""disproved"" or ""not

proved"".

The materials elicited from the cross-examination of PW 1 that he is a small pan shop vendor appears to be a strong circumstance to render

the claim of the complainant/respondent that he sold articles of Rs. 90,000/- from his pan shop on credit during the span of 6/7 months, highly

improbable and an absurd one and also raises a question as to the capacity or source of fund of the respondent to extend a loan of Rs. 3,10,000/-

to a person whom he even does not know properly inasmuch as, his acquaintance with the petitioner was only as a customer of his shop.

Admittedly no paper was produced regarding lending of Rs. 3,10,000/- to the petitioner. Extending loan of Rs. 3,10,000/-, without any

documents, in the facts and circumstances of the case, also appears to be unbelievable. Thus, the above facts and circumstances emerging from the

cross-examination of PW 1 indicates the claim of the respondent to be highly improbable and absurd, probabilising the case of the defence that the

cheque was not issued for Rs. 4,00,000/- in discharge of any enforceable debt or for consideration. In view of the above facts and circumstances

and the materials elicited from the evidence of the complainant, indicating that the complainant did not have the capacity to extend a loan of Rs.

4,00,000/-, initial presumption u/s 139 and 118 (a) of the NI Act stood rebutted. These vital facts emerging from the cross-examination of the

complainant, perhaps lost the sight of both the courts below. The presumption in favour of the complainant having stood rebutted, the burden stood

shifted to the complainant to prove, that he actually provided loan of Rs. 3,10,000/- or articles of Rs. 90,000/- on credit or in other words, the

cheque was issued for consideration or in discharge of any enforceable debt. Evidently no account book or other document of his shop had been

produced to show that the petitioner purchased goods on credit for an amount of Rs. 90,000/-. With regard to providing loan of Rs. 3,10,000/-

also no document or any other evidence has been adduced. Thus, the entire facts and circumstances, more particularly, the cheque being a blank

one, which was admittedly filled up by the respondent/complainant himself and absence of any evidence to prove that complainant had the capacity

or source to extend such a huge amount of loan rendered the claim of the complainant that the cheque in question was issued in discharge of any

enforceable debt or for consideration, unbelievable.

The statutory presumption u/s 139 and 118 (a) of the NI Act in favour of the complainant having stood rebutted and complainant/respondent

having failed to prove that the cheque in question was issued for consideration or in discharge of any enforceable debt, complainant can, by no

stretch of imagination, be held to have proved the offence u/s 138 NI Act beyond reasonable doubt and therefore, the conviction and sentence u/s

138 NI Act cannot be maintained. Accordingly, the revision is allowed and the conviction and sentence is set aside.

Send back the LCRs.