Sri. Anand Kumar Bhandari G vs Sri. N. Narashima Murthy

Subhash Badi

All these appeals are by the complainant against the judgment of acquittal in C.C. Nos. 21712/2007, 21708/2007, 21691/2007, 21713/2007, 21710/2007, 21715/2007,. 21714/2007, 21690/2007, dated 23.04.2011, on the file of XXII Additional Chief Metropolitan Magistrate, Bangalore City.

Complainant and accused in all these cases are common and it is submitted that except examination in chief, the cross-examination of the complainant as well as the accused was also common in all the cases. The transactions relate to issue of cheques by the accused to the complainant. The evidence being common in all the cases these appeals are heard together as there is no conflict or different evidence.

The case of the complainant was that, the accused is known to him and due to the said acquaintancy, the accused borrowed sum of Rs. 1,00,000/-, Rs. 25,000/-, Rs. 25,000/-, Rs. 1,00,000/-, Rs. 50,000/-, Rs. 1.00,000/-, Rs. 1,00,000/- and Rs. 10,000/-. In all, the accused bad borrowed sum of RS. 5,10,000/- in these cases. In discharge of the said amount, the accused had issued cheques dated 05.02.2007, 20.01.2007, 25.01.2007, 15.02.2007, 10.01.2007, 25.02.2007, 05.01.2007 and 01.03.2007. When the sail cheques were presented for encashment, they were returned by the bank with an endorsement "Payment stopped by drawer" as such, the complainant issued separate notices in respect of all the cheques on 10.03.3007, by registered post acknowledgment due and as well as Certificate of Posting. Though the accused received the said notices but did not comply with the demand made by the complainant as such, the complainant was constrained to file a private complainant u/s 200 Cr.P.C. for the offence punishable u/s 138 Negotiable Instruments Act. (for short ''N.I. Act'').

On service of summons on the accused, the accused appeared before the trial Court and pleaded not guilty. The complainant to support his case, ha got himself examined in all the oases as PW1 and marked Ex. P1 to Ex. P17. The accused got himself examined as DW1 and marked Ex. D1 to Ex. D53. The exhibits produced by the complainant and the defendant were common in all the cases.

The trial Court on appreciation of the entire evidence on record found that, there are aeries of disputes and complainant and counter-complaints between the parties since 2003. The ease of the complainant does not probabalise that fee had lent money to the accused. The accused in the year 2005 itself had issued a notice to the bank interalia informing that he had lost signed cheques. The accused had also filed a complainant of theft, of cheques. Though the complainant has admitted that he is an income tax assessee, however has neither produced any documents to show that he had tent an amount to the tune of Rs. 5,10,000/- in these cases nor has produced'' any documents to prove the transaction. The complainant admits that the transaction of loan was of the year 2003 and also admits that post dated cheques were issued however, he had filed a complaint only in the year 2007. Even on the ground of limitation, the claim of the complainant has became time barred debt.

It also has observed that, in the year 2002 itself the accused had borrowed sum of RS: 15,00,000/- from the Canara Bank as such in'' 2003 he had no reason to borrow money from the complainant as the accused was partner of the hotels and had income. By these findings, the trial Court acquitted the accused. As against the said judgment of acquittal, the complainant is before this Court.

Heard Sri. H.C. Shwaramu, teamed Counsel for the complainant and Sri, C.V. Annaish, learned Counsel for the accused.

Learned Counsel for the '' complainant submitted that, the accused, had admitted that the cheques which were presented to the bank belongs to him and he had not disputed that the cheque are signed by him. It is also not disputed that the said cheques have been dishonoured by the bank of the accused for stopped payment. Ingredients require to prove the offence u/s 139 of N.I. Act has been proved by adducing necessary evidence. Initially, presumption of legally recoverable debt arises in favour of the complainant u/s 138 of N.I. Act. To the contradictory the accused has alleged that he had lost the cheques in the year 2005 however, his private complaint filed before the Court has been rejected. Further, the accused could not haw kept so many signed cheques to his car. The theory of the accused that the cheques were stolen has not been proved, Accused was in need of money in the year 2003 for the purpose of additional construction of the house for which he had approached the complainant and complainant being known to the accused, as a lessee, had lent loan for which the accused had issued cheques.

He further submitted that the trial Court while appreciating the evidence has not considered the presumption arisen u/s 139 of N.I. Act and has also not considered the evidence of the complainant that he had lent money for the purpose of construction and accordingly in discharge of the same, the accused had issued the cheque. Though the accused alleges that he had lost cheques and pro-notes, the said allegations is not substantiated by any material much less, no proof of the same. The trial Court while considering the evidence ought to have seen that owe cheque is issued and it is dishonoured for want of fund or otherwise and on demand, if the amount is not paid, the presumption of legally recoverable debt arises in favour of the complainant and it is far the accused to show that there is no such legally recoverable debt, by adducing evidence or from the evidence of complainant. Merely aseerting that he had lost the cheques does not by itself prove that there was no debt recoverable against the accused. He relied on the evidence of the complainant and submitted that the complainant has proved his case beyond reasonable doubt, however, the trial Court has erroneously acquitted the accused.

On the other hand, learned Counsel for the accused submitted that the complainant was a lessee under the accused during 2005. Dispute started as regard to the ejectment of the complainant. A notice was also issued demanding a vacant possession of the premises let-out to the complainant. Neither there was reply nor the complainant had made any claim that the accused had borrowed money. Accused has specifically mentioned that he was due of Rs. 4,50,000/- to the complainant after deducting necessary amounts. In the year 2005, when the accused lost cheques, he had filed a complaint before the police, The said complaint though rejected as the ''accused had not proved that it is stolen by the complainant but it has not been rejected on the ground that there is no theft. He also submitted that the complainant has specifically alleges that, in the year 2003 itself loan was advanced to the accused and post dated cheques were collected, if loan is of the year 2003, cheques were presented for encashment in the year 2007, fey that time, the debt itself had became time barred. To mates debt legally recoverable it must be debt in law becomes legally recovered, if debt is time boned it does not become legally recoverable. He further submitted that there were series of disputes between the parties from 2003, If the parties relationship had strained from the year 2003 and more so in 2005-06 as there were complainants and suits it does not probabalise that the complainant could have advanced loan under these circumstances to the accused.

From the evidence led by the parties it shows that the complainant was a lessee under the accused, he had taken the premises on tease in December 2003. The period of lease was 2 years and on 13.08.2005 itself the complainant had informed the bank that he had lost the cheques in question and had asked for stop payment On 29.10.2005, as per Ex. D26, the accused bad issued a legal notice interalia terminating the lease and directing the complainant to vacate, and hand over the vacant premises on or before 06.12.2005 by receiving back the Lease Deposit subject to such deductions at the time of handing ever of the possession. In the said notice, the accused had specifically mentioned that he had received only Rs. 4,50,000/- towards the Lease Deposit. This notice though has been served on the complainant, the complainant has not issued any reply. Again on 07.08.2006, another notice was issued and for which also there was no reply.

Ex. D1 is & plaint copy of a suit filed by the complainant in C.S.No. 5783/2007 wherein the complainant has sought for recovery of sum of Rs. 19,18,845/-. This suit is filed on 27.07.2007, to the said suit the complainant refers to 12 transactions under pro-note and he claims that this is an amount borrowed by the accused, Evan in the said suit though it is filed after the borrowing of the alleged loan by the accused in the year 2003, complainant has not referred to any other transactions between the complainant and the accused.

The complainant in his evidence has admitted that his income par year is 5 to 6 lakhs and he is an income tax assessee since about 15 to 20 years. He admits that he keeps accounts as he and his wife are running Ice Cube factory and other establishmonts. And also admits that in all he had lent Rs. 8,10,000/- under the cheques to the aocused. However, he has not produced any evidence, much less, the income tax return to show that he bad lent such a huge amount. If he is an Income Tax assessee for 15 to 20 years and lending of Rs. 8,10,000/- in one year necessarily should have been reflected in the income tax returns.

Further, the complainant has also admitted that he has filed a suit for recovery of Rs. 19,18,845/-. If that is so, he has lent about RS,30,00,000/- to the accused alone and if that is so there must have been some documents mentioning the loan transactions between the complainant and the accused reflecting either in books of account or in the income tax returns or another documents of accounts. It is not a small transaction.

It is the case of the complainant that, he had tent money in the year 2003 and received post-dated cheques. If the transactions are of the year 2003 and the cheques were also issued in 3003 itself, however they were presented in 2007 even in ordinary circumstances if the debt had become due in 2003 or 2004, the suit should have been filed within three years otherwise it become time barred debt.

The complainant''s case is that in the year 2003 the accused was in need of money. However, Ex. D42 a statement of accounts of the Canara Bank shows that the accused had borrowed Rs. 15,00,000/- for construotion purpose in the year 2002 itself and the statement shows the said balance in the account of the accused.

No doubt, initial presumption of legally recoverable debt arises in favour of the complainant in view of the provision of 118 and 139 of N.I. Act but the accused has shown from the evidence on record that there is no debt much less legally recoverable debt. If the evidence on record probabalizes the case of this accused that there is no LEGALLY recoverable debt that the presumption in favour of the complainant gets rebutted. The Apex Court in the judgment reported in Rangappa Vs. Sri Mohan, at para 14 has observed thus:

In light of these extracts, we are in agreement with the respondent claimant that the presumption mandated by Section 239 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna janardhan Bhat (supra) may not be correct However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption u/s 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused/defendant cannot be expected to discharge an unduly high standard or proof. In the absence of compelling justifications, reverse arsis clauses usually impose an evidentiary burden and not a persuasive burden-Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section. 139, the standard of proof for doing so is that of ''preponderance of probabilities''. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or hability, the prosecution can fail As clarified in the citations, the accused can rely on the materials submitted ''by the complainant in order to ''raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own.

In this case, the accused to probalise that there is no legally recoverable debt has shown that the complainant was a lessee under him since 2003 and has also shows that the litigation started between the complainant and accused in the year 3003 in connection with water supply. Further, in the year 2005-06, the relationship of the complainant and the accused had become strained. The accused had made known to the complainant that he owes only Rs. 4,50,000/- to the complainant as lease deposit. In 2005 itself, the complainant if realty he had transaction in the year 2003 he would have definitely made known to the accused of his loan of Rs. 8,10,000/- under the cheques, he would not have kept quite. When the relationship between the parties is strain and they were in the court litigating on several aspects from 2005 onwards it is inconceivable as to how the complainant could have kept quite till 2007 and files a complaint without even mentioning as to when the loan was taken except mentioning that in discharge of loan cheque are issued.

it is, in these circumstances, the ''trial Court has found that the defence of the accused probabalise that there is no legally recoverable debt and more so, when the complainant, has not even produced any documents to show that such an amount was lent except producing cheque. No doubt, the complaint Bled by the accused regarding theft in the year 2005 has been rejected but in the year 2005, the accused has taken steps that to informing the bank. Whether theft is proved or not, he has taken steps in the year 2005 and it was also made known to the complainant, even then the complainant had kept quite till 2007. Hence the evidence does not prove the case of the legally-recoverable debt and the trial Court on proper appreciation of the evidence has rightly held that the complainant has failed to prove the debt more so legally recoverable debt. In these circumstances, I find no ground to interfere with the judgment of the trial Court. Accordingly, the appeals fail and are dismissed.

However, observations made in these appeals will not have any bearing on the disposal of the civil suit filed by the complainant.