Sri M.K. Jeevandhar vs Mrs. Margaret Menezes

K.N. Keshavanakayana

In this appeal fifed under Section-378(4) of Code of Criminal Procedure, the legality and correctness of the judgment and Order dated 7.12.2005 passed by XXII Additional Chief Metropolitan Magistrate, Bangalore in C.C. No. 5950/2003 acquitting the respondent/accused of the charge levelled against her for the offence punishable under section-136 of the Negotiable Instruments Act (''Act'' for short) is questioned.

The appellant filed a private complaint against the respondent alleging the affiance punishable under section-138 of the Act inter alia contending that the accused borrowed a sum of Rs. 51,000/- from him as loan; that towards discharge of the said debt, accused issued the cheque in question dated 12.2.2003 drawn on State Bank of India, Ulsoor branch, Bangalore; that when the said cheque was presented for encashment, it was returned with & banker''s endorsement, "insufficient funds"; that the complainant caused a legal notice dated 19.2.2003 on the respondent/accused notifying her about dishonour of the cheque and calling upon her to pay the amount within the stipulated time; that though the accused received the notice, she has failed to comply with the demands made therein, as such, she has committed the offence punishable under section-138 of the Act

Upon receipt of the summons, the respondent/accused appeared before the learned Magistrate and pleaded not guilty for the charges levelled against her. The defence of the accused was that she had earlier borrowed a sum of Rs. 1,50,000/- from the complainant, which she duly repaid even before the expiry of the period agreed with interest and that thereafter she did not borrow any money from the complainant. It is her further defence that one of her colleague by name Dhaneshwari was in need of financial assistance, therefore she introduced the said Dhaneshwan to the complainant with & request to advance loan of Rs. 20,000/- and accordingly, the complainant advanced a sum of Rs. 20,000/- to Dhaneshwari in the name of his wife and at that time as insisted by the complainant she (accused) delivered a blank cheque to the complainant as security for the repayment of the loan by her friend Dhaneshwari and though the said Dhaneshwari subsequently repaid the entire money, the complainant failed to return the cheque delivered by her and subsequently the said cheque has been misused by the complainant Thus according to the accused, she had not borrowed a sum of Rs. 51,000/- from the complamant nor the cheque in question was issued for discharge of loan due by her to the complainant.

After the parties lead the evidence, the learned Magistrate on assessment of the oral and documentary evidence, by the Judgment under appeal held that the defence of the accused that the cheque in question was delivered as a blank cheque to the complainant as security for the loan advanced to Dhaneshwari appears to be highly probable and thereby the accused has rebutted the presumption under section-139 of the Act. The-trial Court also noticed that the failure on the pert of the complainant to come out with the specific date on which amount of Rs. 51,000/- said to have been advanced le also a factor which strengthens the defence of the accused. In that view of the matter, the trial Court held that the complainant has failed to prove the charge levelled against the accused and therefore acquitted the accused and complaint consequently come to be dismissed. Against this Judgment of acquittal, the complainant is before this Court.

I have board Sri Chandranath Ariga, learned counsel appearing for the appellant/complainant and Sri Leeladhar, learned counsel for the respondent/accused. I have perused the records of the trial Court and also the judgment under appeal.

It is the submission of the learned counsel for the appellant that the Judgment under appeal is perverse and illegal being contrary to the evidence on record. According to the learned counsel, the findings recorded by the Court below are without any basis and the trial Court on wrong assumptions and presumptions, has dismissed the complaint It is also his submission that the Court below has failed to notice that '' the accused has not substantiated the defence putforth by her. On the other hand the material evidence placed by the complainant would indicate that the accused had borrowed a sum of Rs. 51,000/- and the cheque in question was issued for the discharge of the said loan amount and since admittedly the said cheque has been dishonoured when presented for encashment, the Court below ought to have convicted the accused for the offence under section-138 of the Act. It is also his submission that there is no obligation on the part of the complainant to prove the lending of money for proving the case under section-138 of the Act since what is required to be established under section-138 of the Act to the issuance of a cheque for discharge of the debt and its dishonour and also failure on the part of the drawer of the cheque to pay amount within a stipulated period after the receipt of the notice. It is also his submission that in view of the presumption under section-139 of the Act, once it is shown that the cheque relates to the account held by the drawer with a banker and it bears the signature of the accused, it is to be presumed that the cheque has been issued for discharge of the debt and it is for the accused to rebut the said presumption, According to the learned counsel, in the case on hand, accused has not rebutted the said presumption by placing acceptable evidence, therefore the Court below is not justified in acquitting the accused and dismissing the petition.

On the other hand, learned counsel for the respondent sought, to justify the judgment under appeal. He contended that the Court below on proper appreciation of evidence on record has recorded a finding of fact that the accused has substantiated her defence and thereby rebutted the statutory presumption under section-139 of the Act, therefore the said finding does not warrant interference by this Court. It is also his submission that the accused is not required to prove his defence beyond all reasonable doubt, as the standard of proof is only preponderance of probability and in the case on hand, the circumstances brought on record by the accused would probablise her defence theory and the same has been rightly accepted by the trial Court, as such the judgment under appeal does not suffer from perversity or illegality and therefore it does not call for interference by this Court, In that view of the mater, he sought for dismissal of the appeal.

In the facts and circumstances of the case and having heard the submissions of the learned counsel on both sides, the point that arises for consideration is "whether the judgment under appeal suffers from perversity or litegality calling for interference by this Court" ?

There is no serious dispute that the cheque in question marked as Ex.P2 relates to the account held by the accused to Bank of India and it bears her signature. It is the specific case of the complainant that the cheque in question was issued for discharge of the loan of Rs. 51,000/-borrowed by the accused. Under section-139 of the Act, the Court has to draw presumption that holder of the cheque received cheque for the discharge, in whole or part, of any debt or liability. Of course the said presumption is rebutable one. Section-118 of the Act raises a presumption as to the consideration that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration. Section-118B(b) of the Act raises further presumption that every negotiable instrument bearing a date was made or drawn on such date. In the case on hand, there is no serious dispute that complainant had advanced a sum of Rs. 1,50,000/- to the accused on 21.5.2001 in respect of which accused had executed an agreement as per Ex.D1 and the said loan amount of Rs. 1,50,000/- was duly repaid with interest on 20.10.2001. According to the complainant, thereafter, subsequent to June-2002, the accused borrowed loan of Rs. 51,000/-. As noticed supra, the defence of the accused was that she delivered the cheque in question as a blank cheque to the complainant as security for the loan transaction between the complainant and her friend Dhaneshwari. There is no serious dispute as to the fact that certain money was advanced to Dhaneshwari, a friend of the accused. It is also not in dispute that the said Dhaneshwari was introduced to the complainant and his wife by the respondent/accused and thereafter money was advanced to her, it is also not in serious dispute that the loan amount paid to Dhaneshwari was repaid. Ex.D2 is a receipt issued by K. Chandranath Ariga, Advocate acknowledging the receipt of Demand Draft dated 22.9.2003 for Rs. 10,500/- drawn in favour of H.S. Makarandaji from Mrs, R. Dhaneshwari through Mrs. Marganet Menezes (respondent herein). Smt Makarandaji is none other than the wife of the complainant The Court below having regard to the various circumstances has recorded a finding that the defence of the accused is highly probable. The circumstances relied upon by the Court below are:-

(i) The accused who had borrowed a sum of Rs. 1,50,000/- from the complainant has duly repaid the same with Interest even before the expiry of the period agreed under Ex.D1.

(ii) If the accused was not involved in the transaction in favour of Dhaneshwari, there was no occasion for her name being mentioned in Ex.D2, nor there was no occasion for the accused to deliver the Demand Draft on behalf of Dhaneshwari.

(iii) The entries in the passbooks at Ex.D2(a) and Ex.D2(b) produced by the accused would indicate that the cheque in question relates to the book which came to an end some time during October-November-2002

(iv) The failure on the part of the complainant to disclose either in the notice or in the complaint or in his evidence before the Court as to the date on which the loan amount was advanced.

No doubt in order to prove the offence u/s 138 of the Act what is required to be established by the drawee of the cheque is that the cheque In question was issued for discharge of legally enforceable debt or any other liability. Having regard to the presumption under section-139 of the Act, the moment it is established that the cheque relates to the account held by the drawer in a bank and it was issued by the drawer, the presumption as to the issue of such cheque for discharge of the loan comes into play. Then it is for the accused to rebut the presumption. It is fairly well settled law that the standard of proving the defence by the accused is only preponderance of probability and not proof beyond reasonable doubt as required by the prosecution. It is sufficient if the accused probablises the defence theory. In the light of the presumption under section-139 of the Act, In the case on hand, It can be said that the complainant by proving that the cheque in question relates to the account held by the accused in a bank, is entitled for the presumption under section-139 of the Act However the question is whether the accused has rebutted the said presumption. As noticed supra, loan transaction between complainant or his wife on the one hand and Dhaneshwari, colleague of the accused on the other hand is admitted. The said Dhaneshwari was admittedly introduced to the complainant and his wife by the accused, The loan amount paid to Dhaneshwari was repaid, Ex.D2 is the receipt for acknowledging the receipt of the Demand Draft. As per the contants of Ex.D2, the Demand Draft was handed over by the accused to the counsel for the creditor H.S. Makarandaji. It is in the evidence that the said Makarandaji had filed small causes suit against Dhaneshwari and upon receipt of the summons in that ease the amount claimed therein was paid through the Demand Draft. If really, there was no involvement of the accused in the loan transaction in favour of Dhaneshwari, there was no occasion for the accused to hand over the Demand Draft for Rs. 10,500/- on behalf of Dhaneshwari The perusal of the passbook relating to the S.B. account of the accused maintained in S.B.I.,. Ulsoor branch, which is marked as Ex.D2(a) and (b) indicates that the cheque book of which cheque in question was a part, appear to have been exhausted somewhere in October-2002. But as per the apparent date on Ex.P2, it was issued on 12.2.2003. As per the evidence of DW-1, the loan transaction in favour of Dhaneshwari was sometime during April-2002 and the cheque in question according to the DW-1 was delivered during April-2002. As seen from the passbook, by the end of December-2002, the accused had taken a different cheque book bearing Nos. 00899011 onwards. As on the apparent date of Ex.P2, the accused did not had the cheque leaf bearing No. 00880165 whereas she had cheque book bearing Nos. 0089901 onwards. This circumstance further probablises the defence theory that the cheque in question had been delivered to the complainant as a security in respect of the loan transaction in favour of Dhaneshwari as Dhaneshwari was admittedly introduced to the complainant and his wife by accused. Very interestingly, the complainant has not come out with the details as to the date on which the loan was advanced to the accused, Ex.P4 Is a copy of the notice issued to the accused, in the notice, there is no mention to on what date the loan was advanced, in the complaint as well as in the evidence filed by way of affidavit, there is no mention as to on what date loan amount was paid, In the cross-examination, PW-1 has come out with the statement that the subsequent to June-2002, the loan amount was paid in 2 or 3 Installments. There again, he was not definite as to on what date amount was paid and the details of the installments are also not furnished. This clearly indicates that the complainant is not definite as to the date an which loan amount was paid. In addition to this, the complainant was an employee of Reserve Bank of India. The loan amount stated to be advanced to the accused was Rs. 31.000/-. Under section-269(ss) of the income Tax Act any monetary transaction exceeding Rs. 20.000/- should be by means of account payee cheque. The complainant being an employee of the Reserve Bank of India, presumed to have known this provision of law. It is not the case of the complainant that the loan amount was paid by means of account payee cheque.

Having regard to the facts and circumstances of the case end the circumstances brought out by the accused, in my considered opinion, the Court below is justified in holding that the accused has rebutted the presumption under section-139 of the Act by substantiating her defence theory. The inferences drawn by the Court below are in accordance with the evidence on record and the findings recorded by the Court below are sound and reasonable having regard to the facts and circumstances of the case. In my considered opinion, the judgment under appeal does not suffer from any perversity or illegality calling for interference by this Court. In the circumstances, I do not find any merit in this appeal. Accordingly, the appeal is dismissed.