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2008 DIGILAW 1255 (BOM)

Mohammad Rafeeque v. M. Abdulla

2008-08-29

N.A.BRITTO

body2008
JUDGMENT N.A. Britto, J. This is complainant's appeal and is directed against Judgment dated 28.12.2005 of the learned J.M.F.C., Canacona, acquitting both the accused under Section 138 of the Negotiable Instruments Act, 1881. 2. The case of the complainant is that the accused are the Managing Partner and Partner, respectively, of Dhumane Rural Industries situated at Agonda, Canacona, and, as the accused were owing to the complainant a sum of Rs. 7.2. lakhs, accused No. 1 in the capacity of Managing Partner and on behalf of accused No. 2, as partner of the said Dhumane Rural Industries issued a cheque bearing No. 929777 dated 18.6.2003 for a sum of Rs. 7.2 lakhs drawn on the Federal Bank Limited, Margao, in favour of the complainant, and the said cheque was issued at Chaudi, Canacona duly signed by accused No. 1, for himself and on behalf of accused No. 2. The case of the complainant was also that when he deposited the said cheque in South Indian, Bank, Panaji, Goa, firstly, in June, 2003 and secondly, in November, 2003, for encashment, the same was returned on the first occasion with remark that the funds were insufficient and on the second occasion with remark that the payment was stopped by drawer, and, therefore the complainant by legal notice dated 6.12.2003 demanded the amount payable of Rs. 7.2 lakhs with interest at the rate of 18% per year within fifteen days which notice the accused received and replied to vide reply dated 20.12.2003 stating that the subject cheque was stolen by one P.A. Sajid who was employed by them at their factors at Agonda and that they had kept a Cheque Book of Federal Bank Limited, Margao with signed cheques with the said Sajid so that he could withdraw the money for day to day running of the business, and that the said Sajid was removed by them from their services about fifteen months back, and thereafter he was doing business with the complainant and the theft of the subject cheque was realized by the accused only after the receipt of the notice dated 6.12.2003 and that the subject cheque was one of the cheque leaves which was stolen by the said Sajid, and that the said Sajid and the complainant had entered into a criminal conspiracy to defraud the accused by using d the said cheque leaf with the fond hope that the accused would succumb to the blackmail by the accused and the accused had no dealings with the complainant at any time whether at personal level or in respect of their business and that the accused did not owe any amount to the complainant and had no liability in respect of the said cheque which was dishonoured. The accused had further stated that they would not pay to the complainant any amount including the amount of Rs. 7.2 lakhs. 3. In support of the complaint, the complainant examined himself. Accused No. 1 maintained their stand that the subject cheque was stolen by their Manager, the said Sajid and that they had not issued the subject cheque to the complainant. Accused No. 2 repeated the said plea and also gave evidence in support of the said plea by examining himself. 4. The learned trial Court without considering the evidence produced and largely on legal issues including that the firm was not made as an accused proceeded to acquit both the accused by the impugned judgment. 5. Accused No. 2 repeated the said plea and also gave evidence in support of the said plea by examining himself. 4. The learned trial Court without considering the evidence produced and largely on legal issues including that the firm was not made as an accused proceeded to acquit both the accused by the impugned judgment. 5. Admittedly, the subject cheque was signed on behalf of the firm by accused No. 1 as its Partner/Managing Partner and the firm was not made as a party accused inasmuch as it was also not the case of the complainant that he had lent the money to the said firm but on the contrary it was the case of the complainant that the subject cheque was given to the complainant by accused No. 1 in the capacity of the Managing Partner and on behalf of accused No. 2 as Partner of Dhumane Rural Industries. That the accused No. 1 could be convicted and sentenced as being a signatory to the cheque; learned Counsel on behalf of the complainant has placed reliance on the case of S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla, (2005) 8 SCC 89 . Nevertheless the fact remains that accused No. 2 was certainly not the drawer of the subject cheque and therefore on the basis of the averments in the complaint, that the complaint could not have been entertained as against accused No. 2, learned Counsel on behalf of the accused has also relied on S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla, (supra) wherein the Apex Court has reiterated the position that unless there is clear unambiguous specific allegation against the persons who are impleaded as accused that they were in charge of and responsible to the Company in the conduct of its business at the material time when the offence was committed, they cannot be prosecuted. Referring to the case of V. Sudheer Reddy v. State of A.P., (2000) 107 C.C. 107) the Apex Court approved the view that the purpose of Section 141 of the Negotiable Instruments Act would appear to be that a person who appears to be merely a Director of the Company cannot be fastened with criminal liability for offence under Section 138 of the Negotiable Instruments Act unless it is shown that he was involved in the day to day affairs of the Company and was responsible to the Company. The case at hand was not filed against the firm nor the money was claimed to have been given to the firm but was only claimed to have been given to both the accused and since the subject cheque was issued only by accused No. 1 as drawer and not by accused No. 2, the accused No. 2, in my view, could not have been prosecuted or convicted under Section 138 of the Act. In this view of the matter, the acquittal of accused No. 2 could not be faulted since accused No. 2 was not the drawer of the cheque and he was not prosecuted with the allegation that he was in charge of and responsible for the conduct of the business of the firm. In the light of that, reliance placed on behalf of the complainant on the decision in R. Rajagopal v. S.S. Venkat, (2001) 10 SCC 91 ) and T. Stanes and Company Limited v. A. Jaffarullah, (2001) 10 SCC 78 , in support of the proposition that a complaint under Section 138 would be maintainable against a partner of the firm without arraying the firm as an accused, is wholly irrelevant. 6. The case of S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla and another, (supra) has been subsequently followed by the Apex Court in Sabitha Ramamurthy and another v. R.B.S. Channabasavaradhya, 2006 (6) ALL MR 131 (SC) and Saroj Kumar Poddar v. State and another, 2007 ALL SCR 526. 7. As regards accused No. 1, the subject cheque was signed by him, and it is the case of the complainant that it was given on the same date i.e. 15.3.2003 which is also the date when the complainant advanced the sum of Rs. 7.2 lakhs. On behalf of both the parties a number of Judgments have been cited and now it is well settled that by virtue of Sections 118 as well as 139 of the Act the complainant has two mandatory presumptions in his favour. Firstly, as regards passing of consideration and secondly, a presumption that the holder of the cheque received the same in discharge in whole or in part of any debt or other liability. Firstly, as regards passing of consideration and secondly, a presumption that the holder of the cheque received the same in discharge in whole or in part of any debt or other liability. There is no doubt that the said presumptions are rebuttable in nature and can be rebutted by an accused or the defendant on the basis of the evidence brought in by the complainant or by leading evidence of his own and the standard of proof of rebutting the said presumption being that of balance of probabilities which is a standard applicable to the accused whenever the accused is required to prove a fact. It is not necessary for the accused to enter the witness box. 8. The expression "it shall be presumed, unless the contrary is proved" came for the consideration of the Apex Court in the case of State of Madras v. A. Vaidyanatha Iyer, AIR 1958 SC 61 , and the view held therein was upheld by the Constitution Bench in Dhanwantrai Balwantrai Desai v. State of Maharashtra, AIR 1964 SC 557 and later in Hiten P. Dalal v. Bratindranath Benerjee, (2001) 6 SCC 16 , which is a three Judge Bench decision of the Apex Court. 9. The Constitution Bench in the case of Dhanwantrai Balwantrai Desai v. State of Maharashtra, (supra) with reference to Section 4(1) of the Prevention of Corruption Act, 1947 held that it is a presumption of law and, therefore, it is obligatory on the Court to raise this presumption in every case because unlike the presumption of facts, presumption of law produced a branch of jurisprudence. The Constitution Bench further held that whether the presumption of law or fact stands rebutted by the evidence or other material on record is one of fact and not of law. The Constitution Bench further held that the burden resting on the accused person in such a case would not be as light as it is where a presumption is raised under Section 114 of the Evidence Act and cannot be held to be discharged merely by reason of the fact that the explanation offered by the accused is reasonable and probable. It must further be shown that the explanation is a true one. It must further be shown that the explanation is a true one. The words "unless the contrary is proved" which occurred in this provision make it clear that the presumption has to be rebutted by a "proof" and not by a bare explanation which is merely plausible. A fact is said to be proved when its existence is directly established or when upon the material before it the Court finds its existence to be so probable that a reasonable man would act on the supposition that it exists. Unless, therefore, the explanation is supported by proof, the presumption created by the provision cannot be said to be rebutted. (Emphasis supplied). 10. The Apex Court in the case of Hiten P. Dalal v. Bratindranath Banerjee, (supra) held that provided the facts required to form a basis of a presumption of law exist, no discretion is left with the Court but to draw the statutory conclusion, but this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary. A fact is sought 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." 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. In K. Bhaskaran v. Sankaran Vaidhyan Balan and another, (1999) 7 SCC 510 , the Apex Court has stated that once the signature of the cheque is admitted to be that of the accused, the presumption envisaged in Section 118 of the Act can legally be inferred that the cheque was made and drawn for consideration on the date which the cheque bears. Section 139 of the Act enjoins on the Court to presume that the holder of the cheque received it for the discharge of any debt or liability and the burden is on the accused to rebut such presumption. Section 139 of the Act enjoins on the Court to presume that the holder of the cheque received it for the discharge of any debt or liability and the burden is on the accused to rebut such presumption. The same is the view held in Bharat Barrel and Drum Manufacturing Company v. Amin Chand Payrelal, AIR 1999 SC 1008 , wherein the Apex Court with reference to Section 118(a) of the Act has clearly stated that once the execution of the promissory note is admitted, the presumption under Section 118 (a) would arise that it is supported by consideration. (Emphasis supplied). 11. Mr. C.A. Coutinho, learned Counsel on behalf of accused No. 1 has also placed reliance on the case of Krishna Janardhan Bhat v. Dattatraya G. Hegde, (2008) 4 SCC 54 , contending that there is a change in view of the Apex Court in relation to the rebuttal of the presumption, and, has further relied upon the case of K. Prakashan v. P.K. Surendran (2008) 1 SCC 258 , contending that the facts of the case at hand were very similar to that case and in a similar situation the accused was given an acquittal. In my view, there cannot be any change of view as long as there are decisions of the Apex Court of larger Benches, two of which have been referred to herein above. If at all, the case of Krishna Janardhan Bhat v. Dattatraya G. Hegde, (supra) ended in acquittal it was because of the peculiar facts and circumstances of that case wherein the Apex Court held that the Courts below had proceeded from wholly wrong angle i.e. wrong application of the legal principles in the fact situation of the case. In Krishna Janardhan Bhat v. Dattatraya G. Hegde, (supra) the Apex Court has not deviated at all from the views held earlier and has also referred to two previous decisions, namely, Bharat Barrel and Drum Manufacturing Company v. Amin Chand Payarelal, (supra) and the other in M.S. Narayana Menon v. State of Kerala, (2006) 3 SCC (Cri) 30). Since the law has been explained therein with great amount of clarity it would be relevant to take note of the same. Since the law has been explained therein with great amount of clarity it would be relevant to take note of the same. In Bharat Barrel and Drum Manufacturing Company v. Amin Chand Payrelal, (supra) the Apex Court stated thus : "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 consideration. Such a presumption is rebuttable. The defendant can prove the non-existence of 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 dis-entitle 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 existence of negative evidence is neither possible nor contemplated and even if led is to be seen with a doubt. The bare denial of the passing of the consideration apparently does not appear to be any defence. Something which is probable has to be brought on record for getting the benefit of shifting the onus of proving to the plaintiff. To disprove the presumption the defendant has to bring on record such facts and circumstances, upon consideration of which the Court may either believe that the consideration did not exist or its non-existence was so probable that a prudent man would, under the circumstances of the case, shall act upon the plea that it did not exist. To disprove the presumption the defendant has to bring on record such facts and circumstances, upon consideration of which the Court may either believe that the consideration did not exist or its non-existence was so probable that a prudent man would, under the circumstances of the case, shall act upon the plea that it did not exist. We find ourselves in the close proximity of the view expressed by the Full Benches of the Rajasthan High Court and Andhra Pradesh High Court in this regard:" 12. Referring to M.S. Narayan Menon v. State of Kerala, (supra) the Apex Court reiterated the position that once the accused is found to discharge his initial burden, it shifts to the complainant. The question, therefore, is whether the accused No. 1 has discharged the burden cast upon him by Sections 138 and 139 of the Act. In other words, it is essential to see whether the material brought on record whether by the accused or by the complainant is sufficient to demolish the fact which has got to be presumed under Section 139 of the Act. In my view, the said presumption available to the complainant have been more than rebutted by the accused. It may be stated that the Apex Court in Krishna Janardhan Bhat v. Dattatraya G. Hegde, (supra) has only cautioned the Courts that merely on the application of presumption as contemplated under Section 139 of the Act it may not lead to injustice or mistaken conviction. 13. Although the accused No. 1 did not step in the witness box, accused No. 2 did, and, what he has stated in his evidence has practically gone unchallenged and whatever has been stated by him is sufficiently corroborated by documentary evidence produced by him, unlike the version of the complainant. Accused No. 2 stated that they had employed the said Sajid who is none other than the brother's son of one of their partners Shri Ummer P.P. to manage the day to day affairs of the firm and who was entrusted with signed blank cheques of the firm's account with the Federal Bank Limited, Margao to meet emergency and contingency requirements. He also stated that the said Sajid had drawn a sum of Rs. 25,000/- on 2.8.1999 vide cheque No. 929763. He produced a statement of account which is at Exh. 41. He also stated that the said Sajid had drawn a sum of Rs. 25,000/- on 2.8.1999 vide cheque No. 929763. He produced a statement of account which is at Exh. 41. He further stated that the said Sajid was removed from their service in the year 2002 and while leaving the service of the firm he had taken away some signed blank cheques entrusted to him including the subject cheque and that the complainant and the said Sajid were friends and were in the process of starting a factory at Agonda, Canacona, Goa after leaving the services of their firm in the year 2002 and during 2003 and thereafter. He had also stated that the complainant was neither in the service of any firm nor was doing any business and had no source of income to acquire or possess Rs. 7.2 lakhs and that the said Sajid and the complainant entered into a criminal conspiracy to defraud the firm. He further stated that after coming to know that the said Sajid had stolen some cheques they requested their bankers to stop the payments in respect of the subject cheque. He produced a copy of the letter dated 17.11.2004 at Exh. 42 and further stated that they gave a complaint that the cheque in question was stolen by Sajid and a copy of the complaint was produced at Exh. 43. The accused stated that he was in judicial custody from 26.11.2002 to 12.3.2003 at Dharwad and further stated that none of the partners of the said firm had approached the complainant either in their individual capacity or in the capacity of partners of the firm for a sum of Rs. 7.2. lakhs at any point of time. 14. Mr. N.K. Sawaikar, learned Counsel on behalf of the complainant has submitted that the subject cheque was returned of the second time with Bank's remark that the payment was stopped on or about 22.11.2003 and therefore the statement of the accused that they came to know about the subject cheque only after the receipt of the notice from the complainant cannot be accepted. Both the learned Counsel submitted that an adverse inference has got to be drawn against the other for non examination of the said Sajid. Both the learned Counsel submitted that an adverse inference has got to be drawn against the other for non examination of the said Sajid. Learned Counsel on behalf of the complainant has referred to the case of C. Antony v. K.G. Raghavan Nair, (2003) 1 SCC, to reinforce his submission that adverse inference has got to be drawn against the complainant. Mr. N.K. Sawaikar, learned Counsel on behalf of the complainant has also submitted, pointing to the cross-examination of the accused, that the complaint against Sajid was not pursued and was filed for the sake of it. 15. In my view, none of the submissions made on behalf of the complainant by Mr. Sawaikar, learned Counsel, can be accepted. Firstly, the complainant did produce the cheque return memo of November, 2003 stating that the payment was stopped by the drawer. The accused also stated in his evidence that after coming to know that the said Sajid had stolen some cheques, they requested their Bankers to stop payments of the subject cheque and produce the letter dated 17.4.2004 at Exh. 42 wherein it is clearly mentioned by the Senior Manager of the Federal Bank Limited that they stopped the payment of the subject cheque pursuant to the firm's letter dated 18.12.2003. There has been no cross-examination on this aspect and being so, there is no reason why the contention of the accused that they had issued instructions to stop the payment of the cheque only after the receipt of the notice from the complainant should not be accepted. There is no doubt that the complaint filed against the said Sajid was given entry at the Police Station and there is nothing which the accused could have done in case the Police had not investigated the same except probably to file a separate private complaint against the said Sajid. The complainant has accepted that he knew the said Sajid since the year 2002 and prior to that he knew him at Kerala and that between the years 2002 and 2003 they were together in Goa. The complainant has also admitted that in the month of January to March, 2003 the accused No. 2 was in judicial custody which fact is independently stated by the said accused in his evidence and is supported by documents. The complainant has also admitted that in the month of January to March, 2003 the accused No. 2 was in judicial custody which fact is independently stated by the said accused in his evidence and is supported by documents. The statement of account produced by the accused shows that the subject Cheque Bears No. 929777 and the cheque with previous number to that, was encashed as a self cheque on 6.8.2001 and the cheque subsequent to that number was encashed by Sajid in the sum of Rs. 5000/- on 18.9.2001. It is therefore obvious that the cheque was for a period of August/September, 2001 and could not have been given on 15.3.2003 as stated by the complainant and moreover on 15.3.2003 the accused No. 2 was in custody as stated by him, and, as admitted by the complainant, as well as independently proved by the accused No. 2 by production of relevant Court record. Therefore, the composite statement of the complainant that he had paid cash of Rs. 7.2 lakhs to accused No. 1 on 15.3.2003 in the presence of accused No. 2 at Canacona in a Udipi Hotel has been proved as a false statement. It is also to be noted that the subject cheque was only signed and the body of it was filed by the complainant which again reinforced the plea taken by the accused that it was taken by the said Sajid. Considering the allegations made by the accused and further considering that the said Sajid had a close relationship with the complainant, it was incumbent upon the complainant to have examined the said Sajid, in support of his case, if at all and it was not necessary for the accused to have examined him. In the case of C. Antony v. K.G. Raghavan Nair, (supra) the cheque in question was stated to have been issued as a blank cheque to one Chandrappa Panicker in October, 1985 as security for future installments of the amount if due from the appellant in a chit transaction but the said Panicker did not return the cheque even after the chit transaction was over and the said cheque was misused by the respondent in collusion with the said Panicker. The Apex Court accepted the view of the trial Court that non examination of Chandrappa Panicker had weakened the case of the applicant especially in view of the fact that the Court had noticed that the said Chandrappa Panicker was seen in the premises of the Court house at the time of the trial which was a relevant factor which the trial Court had considered. As already stated if at all adverse inference has got to be drawn for non examination of the said Sajid it is against the complainant who were close to one another at least for two years i.e. 2002-2003 whilst both were in Goa. Considering the facts of this case, the accused had sufficiently rebutted the presumption available to the complainant by virtue of Sections 118 and 139 of the Act by showing that neither the money nor the cheque exchanged hands as stated by the complainant. 16. The contention of the accused that the complainant was not a person of means who could have advanced a sum of Rs. 7.2 lakhs to the accused is also sufficiently proved by the accused. The complainant was asked whether he could produce any documents to show that he had a sum of Rs. 7.2 lakhs in the months of January, February and March, 2003 and the complainant replied that he had no problem in producing the said documents. However, the complainant could not produce the said documents. The complainant admitted that he had never filed income tax returns individually in his name. He further stated that he came to Goa about four years back after selling his business in Kerala in the year 1994 and further stated that he was having earth moving machinery with another partner by name K.M. Ali but admitted on further cross-examination that the earth moving machinery was recorded in the R.C. Books in the name of the said K.M. Ali. He further stated that he had a Sandal Wood Factory by name Star Factory and except for buying the machinery he did not do any business after he had taken the said factory on the lease but on further cross-examination he admitted that he was only a lessee and it was owned by Darshan Naik Gaonkar. When he was further asked as to from where he got Rs. When he was further asked as to from where he got Rs. 7.2 lakhs he stated that he had land in Kerala and he had obtained a loan of Rs. 2.35 lakhs by pawning his wife's jewellery from South India Bank at Kesargol but in further cross-examination, however, the complainant did not produce any document to support the said claim but went to the extent of deposing that he did not even recollect the date on which the said loan was taken or the name of the Bank Manager. Learned Counsel on behalf of the accused submits that no person would have pawned his wife's jewellery to take loan and given money to some one else with whom the complainant admittedly did not have even close connections. The submission can certainly be accepted. The complainant further stated that he sold a property admeasuring 10 cents for Rs. 2.5 lakhs. However, the documents produced by him shows that the complainant could not have received more than one lakh from the property sold and that too on or about 1.1.2002. He admitted that he deposited Rs. 50,000/- in his wife's saving account as the land belongs to her. He further stated that accused No. 2 lent money to him in the sum of Rs. 1.5 lakhs on 5.3.2003 and at the same time he stated that two months prior to 15.3.2003 the accused had requested money from him. If a person had Rs. 7.2 lakhs with him, he certainly would not seek a loan from accused No. 2 on 5.3.2003. Again, his statement that accused No. 2 personally came to him two months prior to 15.3.2003 at his residence in Canacona requesting money is again a false statement as from 26.11.2002 accused No. 2 was in custody. It is not necessary to deal further with his cross-examination and point out to other inconsistencies in the evidence of the complainant. The evidence of the complainant when analysed as a whole can be seen to be a bundle of lies and more lies and as such the same cannot be accepted. 17. The learned trial Court did not deal with the evidence led by the parties and proceeded to acquit the accused on some legal issues only. The evidence of the complainant when analysed as a whole can be seen to be a bundle of lies and more lies and as such the same cannot be accepted. 17. The learned trial Court did not deal with the evidence led by the parties and proceeded to acquit the accused on some legal issues only. Considering the evidence led by both the parties this is a case where the accused had sufficiently rebutted the presumption available to the complainant and the complainant had failed to prove that he had at all advanced any money to the accused. 18. Viewed thus, the acquittal of the accused cannot be faulted. The accused has filed this appeal in a case which is entirely based on falsehood and, therefore, needs to be dismissed with costs. Hence, the same is hereby dismissed with costs of Rs. 5000/- to be paid by the complainant to each of the accused. The costs be paid within thirty days before the trial Court who shall take steps to ensure that the same are paid to the complainant. Appeal dismissed.