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2012 DIGILAW 1354 (GAU)

Indranil Talukdar v. State of Assam

2012-12-19

B.D.AGARWAL

body2012
JUDGMENT B.D. Agarwal, J. 1. This revision application under Section 397 /401 read with Section 482 of the Criminal Procedure Code, 1973 has been filed by the accused, assailing the legality and correctness of the judgment dated 31.12.2008, passed by the learned Sub-Divisional Judicial Magistrate, Nalbari in CR Case No. 598 of 2007 which has been affirmed by the learned Sessions Judge, Nalbari in Criminal Appeal No. 8 of 2009 vide judgment dated 30.4.2011. By these concurrent judgments the petitioner has been convicted under Section 138 of the Negotiable Instruments Act, 1881 (briefly 'N.I. Act') and the accused/petitioner has been sentenced to pay fine of Rs. 7,70,000/- (Cheque amount) and 10% thereon with default stipulation of one year rigorous imprisonment. Heard Mr. D. Choudhury, learned counsel for the petitioner and Mr. B.B. Gogoi, learned Additional Public Prosecutor and Mr. Arnali Biswas, learned counsel for the respondent No. 2/complainant. I have also perused the impugned judgments. 2. The facts of the case are very simple and in a narrow compass. Broadly the complainant's case is that the accused had borrowed a sum of Rs. 7,70,000/- for an urgent need with a promise to return the money as and when demanded by the complainant. It is the further case of the complainant that on repeated demands the accused issued Cheque No. 136417 dated 22.8.2007 for a sum of Rs. 7,70,000/-, drawn on State Bank of India, Nalbari branch. The cheque was deposited in the bank and the same was dishonoured on account of insufficient fund. Thereafter, statutory notice was issued to the accused and having not received the cheque amount the complaint under Section 138 of the N.I. Act was filed. 3. In order to establish the case, complainant examined a bank officer as PW-1, in addition to giving his own evidence. The complainant has proved, inter-alia, the cheque, dishonour letters from the bank and statutory notice issued to the accused. 4. On the other hand, the accused had put up a plea of extortion of the cheque and denied any legally enforceable liability to the complainant. The same plea was also taken in the reply to the notice of the complainant and the reply has been marked as Exhibit-4. 5. 4. On the other hand, the accused had put up a plea of extortion of the cheque and denied any legally enforceable liability to the complainant. The same plea was also taken in the reply to the notice of the complainant and the reply has been marked as Exhibit-4. 5. After going through the impugned judgments it appears to me that the petitioner has been convicted solely on the basis of presumptions provided under Section 118 and 139 of the NI Act. Besides this, the courts below have held that the accused had also failed to discharge his burden that there was no legally enforceable liability to the complainant. 6. Mr. Choudhury, learned counsel for the petitioner argued that respondent No. 2 (complainant) had based his case solely on the basis of disputed cheque without any corroborative evidence of lending hand-loan of Rs. 7,70,000/-. The learned counsel also contended that it is the burden of the complainant to prove that there was a legally enforceable liability and unless that fact is proved there is no occasion for the accused to give rebuttal evidence. The learned counsel also submitted that the accused can discharge his burden on the basis of materials on record and without giving oral evidence and the standard of rebuttal evidence will be that of "preponderance of probabilities" and not that of proof beyond all reasonable doubts. In support of these submissions, the learned counsel cited the judgment of the Hon'ble Supreme Court rendered in the case of K. P. O. Moideenkutty Hajee Vs. Pappu Manjooran; (1996) 8 SCC 586 , Krishna Janardhan Bhat Vs. Dattatraya G. Hegde (2008) 4 SCC 54 , Rangappa Vs. Sri Mohan (2010) 11 SCC 441 . 7. Per contra, Mr. Biswas, learned counsel for the respondent No. 2 contended that a case of NI Act cannot be equated with general penal offence and, as such, the degree of proof of the case is different from a criminal trial. The learned counsel also submitted that a case under Section 138 of the NI Act is based on special law and, as such, the presumptions provided in various provisions of law are mandatory in nature and a complaint cannot be dismissed on the basis of casual or even plausible explanation offered by the accused during the trial. The learned counsel also submitted that a case under Section 138 of the NI Act is based on special law and, as such, the presumptions provided in various provisions of law are mandatory in nature and a complaint cannot be dismissed on the basis of casual or even plausible explanation offered by the accused during the trial. The learned counsel also submitted that since there was no dispute about the signature of the accused on the cheque the Courts below have correctly drawn the presumption in favour of respondent No. 2. In support of his argument the learned counsel also cited the various authorities from the Hon'ble Supreme Court, more particularly, judgments rendered in the case of Kundal Lal Rallaram Vs. Custodian, Evacuee Property; ( AIR 1961 SC 1316 ), Hiten P. Dalal Vs. Bratindranath Banerjee (2001) 6 SCC 16 , K.N. Beena Vs. Muniyappan (2001) 8 SCC 458 , Mallavarapur Kasivisweswara Rao Vs. Thadikonda Ramulu Firm (2008) 7 SCC 655 , Heinz India Pvt. Ltd. Vs. State of Uttar Pradesh; (2012) 5 SCC 443 . 8. For better appreciation of rival submissions it would be just and proper to reproduce Sections 118(a), 138 and of the NI Act, which are as under: 118(a) 118. Presumptions as to negotiable instruments.- Until the contrary is provided, the following presumptions shall be made- (a) of 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; * * * * * * 138. Presumptions as to negotiable instruments.- Until the contrary is provided, the following presumptions shall be made- (a) of 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; * * * * * * 138. Dishonour of cheque for insufficiency, etc., of funds in the account.- Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may extend to 2 [two year], or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless- (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 3 [thirty] days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque within fifteen days of the receipt of the said notice. Explanation.-For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability. 139. Presumption in favour of holder. Explanation.-For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability. 139. Presumption in favour of holder. 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, of any debt or other liability. 9. In the case of Krishna Janardhan Bhatt (supra), the Apex Court has observed that section 138 of the NI Act has three ingredients viz. (i) that there is a legally enforceable debt (ii) that the cheque was drawn from the account of bank for discharge in whole or in part of any debt and other liability which presupposes a legally enforceable debt; and (iii) that the cheque so issued had been returned due to insufficiency of funds. 10. With regard to the presumption of legally enforceable debt the Hon'ble Court made the following observations: 30. The proviso appended to the said section provides for compliance with legal requirements before a complaint petition can be acted upon by a court of law. Section 139 of the Act merely raises a presumption in regard to the second aspect of the matter. Existence of legally recoverable debt is not a matter of presumption under Section 139 of the Act. It merely raises a presumption in favour of a holder of the cheque that the same has been issued for discharge of any debt or other liability. 31. The courts below, as noticed hereinbefore, proceeded on the basis that Section 139 raises a presumption in regard to existence of a debt also. The courts below, in our opinion, committed a serious error in proceeding on the basis that for proving the defence the accused is required to step into the witness box and unless he does so he would not be discharging his burden. Such an approach on the part of the courts, we feel, is not correct. 32. An accused for discharging the burden of proof placed upon him under a statute need not examine himself. He may discharge his burden on the basis of the materials already brought on record. An accused has a constitutional right to maintain silence. Standard of proof on the part of an accused and that of the prosecution in a criminal case is different. 33. ***** ***** ***** 34. He may discharge his burden on the basis of the materials already brought on record. An accused has a constitutional right to maintain silence. Standard of proof on the part of an accused and that of the prosecution in a criminal case is different. 33. ***** ***** ***** 34. Furthermore, whereas prosecution must prove the guilt of an accused beyond all reasonable doubt, the standard of proof so as to prove a defence on the part of an accused is "preponderance of probabilities". Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which he relies. 45. We are not oblivious of the fact that the said provision has been inserted to regulate the growing business, trade, commerce and industrial activities of the country and the strict liability to promote greater vigilance in financial matters and to safeguard the faith of the creditor in the drawer of the cheque which is essential to the economic life of a developing country like India. This, however, shall not mean that the courts shall put a blind eye to the ground realities. Statute mandates raising of presumption but it stops at that. It does not say how presumption drawn should be held to have rebutted. Other important principles of legal jurisprudence, namely, presumption of innocence as human rights and the doctrine of reverse burden introduced by Section 139 should be delicately balanced. Such balancing acts, indisputably would largely depend upon the factual matrix of each case, the materials brought on record and having regard to legal principles governing the same. 11. In the case of K.N. Beena (supra) the trial magistrate had convicted the accused. However, the High Court set aside the conviction and acquitted the accused on the ground that the complainant had not proved that the cheque was issued for any debt or liability. The Hon'ble Supreme Court restored the conviction and held that unless contrary is proved it is to be presumed that the negotiable instrument had been made or drawn for consideration. Their Lordships have held that in a complaint under Section 138 of the Act the court has to presume that the cheque had been issued for a debt or liability and such presumption cannot be rebutted on the basis of denial averments made in the reply by the accused. 12. Their Lordships have held that in a complaint under Section 138 of the Act the court has to presume that the cheque had been issued for a debt or liability and such presumption cannot be rebutted on the basis of denial averments made in the reply by the accused. 12. The Judgment of Rangappa (supra) is a judgment by three Hon'ble Judges of the Hon'ble Supreme Court. In this case, the legal question regarding proper interpretation of Section 139 of the NI Act, shifting the burden of proof on the accused in respect to a cheque bouncing case, was specifically raised and discussed. Referring to various authorities, their Lordships have held that presumption mandated by Section 139 of the Act does indeed include the existence of legally enforceable debt or liability. With these observations, the judgment of Krishna J Bhatt appears to have been overruled. Their Lordships have further held that under Section 139 the initial presumption is in favour of the complainant. How this presumption can be rebutted has been explained in the following words: 28. In the absence of compelling justifications, reverse onus 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 liability, 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. 29. Coming back to the facts in the present case, we are in agreement with the High Court's view that the accused did not raise a probable defence. As noted earlier, the defence of the loss of a blank cheque was taken up belatedly and the accused had mentioned a different date in the "stop payment" instructions to his Bank. Furthermore, the instructions to "stop payment" had not even mentioned that the cheque had been lost. As noted earlier, the defence of the loss of a blank cheque was taken up belatedly and the accused had mentioned a different date in the "stop payment" instructions to his Bank. Furthermore, the instructions to "stop payment" had not even mentioned that the cheque had been lost. A perusal of the trial record also shows that the accused appeared to be aware of the fact that the cheque was with the complainant. Furthermore, the very fact that the accused had failed to reply to the statutory notice under Section 138 of the Act leads to the inference that there was merit in the complainant's version. Apart from not raising a probable defence, the appellant-accused was not able to contest the existence of a legally enforceable debt or liability. 13. In the case of Mallavarapur Kasivisweswara Rao (Supra) the Apex Court has held that under Section 118 (a) of the NI Act the court is obliged to draw presumption in favour of the holder of the cheque that the promissory note was made for consideration, unless the contrary is proved. Their Lordships have further held that it is a settled position that the initial burden in this regard lies on the defendant to prove non-existence of consideration by bringing on record such facts and circumstance which would lead the court to believe the non-existence of consideration either by direct evidence or preponderance of probability showing that the existence of consideration was improbable, doubtful or illegal. 14. The judgment rendered in the case of Hiten P. Dalal (supra) is another three Judges' judgment of the Hon'ble Supreme Court, wherein it has been held that there is no escape for the court but to draw a presumption in favour of the holder of cheque unless contrary is proved. It would be useful to quote the relevant observations, which are as under: 22. Because both Sections 138 and 139 require that the court "shall presume" the liability of the drawer of the cheques for the amounts for which the cheques are drawn, as noted in State of Madras v. A. Vaidyanatha Iyer 4 it is obligatory on the court to raise this presumption in every case where the factual basis for the raising of the presumption had been established. "It introduces an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the accused." (Ibid, at p. 65 para 14.) Such a presumption is a presumption of law, as distinguished from a presumption of fact which describes provisions by which the court "may presume" a certain state of affairs. Presumptions are rules of evidence and do not conflict with the presumption of innocence, because by the latter, all that is meant is that the prosecution is obliged to prove the case against the accused beyond reasonable doubt. The obligation on the prosecution may be discharged with the help of presumptions of law or fact unless the accused adduces evidence showing the reasonable possibility of the non-existence of the presumed fact. 22. In other words, provided the facts required to form the 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 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 5. 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". 15. The import and implication of the law of presumption prescribed under section 118 of the NI Act came-up for consideration before the Apex Court in the case Kundanlal Rallaram (supra). In this case their Lordships have held that the law imposed a duty on the Court to raise a presumption in favour of the holder of a negotiable instrument. Their Lordships have further gone into the question as to when the burden would shift upon the defendant/accused with reference to Section 101 of the Evidence Act in this way: 5. This section lays down a special rule of evidence applicable to negotiable instruments. Their Lordships have further gone into the question as to when the burden would shift upon the defendant/accused with reference to Section 101 of the Evidence Act in this way: 5. This section lays down a special rule of evidence applicable to negotiable instruments. The presumption is one of law and thereunder a court shall presume, inter alia, that the negotiable instrument or the endorsement was made or endorsed for consideration. In effect it throws the burden of proof of failure of consideration on the maker of the note or the endorser, as the case may be. The question is, how the burden can be discharged? The rules of evidence pertaining to burden of proof are embodied in Chapter 7 of the Evidence Act. The phrase "burden of proof" has two meanings - one the burden of proof as a matter of law and pleading and the other the burden of establishing a case; the former is fixed as a question of law on the basis of the pleadings and is unchanged during the entire trial, whereas the latter is not constant but shifts as soon as a party adduces sufficient evidence to raise a presumption in his favour. The evidence required to shift the burden need not necessarily be direct evidence i.e., oral or documentary evidence or admissions made by opposite party; it may comprise circumstantial evidence or presumptions of law or fact. To illustrate how this doctrine works in practice, we may take a suit on a promissory note. Under Section 101 of the Evidence Act, "Whoever desires any court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts, must prove that those facts exist." Therefore, the burden initially rests on the plaintiff who has to prove that the promissory note was executed by the defendant. As soon as the execution of the promissory note is proved, the rule of presumption laid down in Section 118 of the Negotiable Instruments Act helps him to shift the burden to the other side. The burden of proof as a question of law rests, therefore, on the plaintiff; but as soon as the execution is proved, Section 118 of the Negotiable Instruments Act imposes a duty on the court to raise a presumption in his favour that the said instrument was made for consideration. The burden of proof as a question of law rests, therefore, on the plaintiff; but as soon as the execution is proved, Section 118 of the Negotiable Instruments Act imposes a duty on the court to raise a presumption in his favour that the said instrument was made for consideration. This presumption shifts the burden of proof in the second sense, that is, the burden of establishing a case shifts to the defendant. The defendant may adduce direct evidence to prove that the promissory note was not supported by consideration, and, if he adduced acceptable evidence, the burden again shifts to the plaintiff, and so on. The defendant may also rely upon circumstantial evidence and, if the circumstances so relied upon are compelling, the burden may likewise shift again to the plaintiff. He may also rely upon presumptions of fact, for instance those mentioned in Section 114 and other sections of the Evidence Act. Under Section 114 of the Evidence Act, "The court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business, in their relation to the facts of the particular case". Illustration (g) to that section shows that the court may presume that evidence which could be and is not produced would, if produced, be unfavourable to the person who withholds it. A plaintiff, who says that he had sold certain goods to the defendant and that a promissory note was executed as consideration for the goods and that he is in possession of the relevant account books to show that he was in possession of the goods sold and that the sale was effected for a particular consideration, should produce the said account books, for he is in possession of the same and the defendant certainly cannot be expected to produce his documents. In those circumstances, if such a relevant evidence is withheld by the plaintiff, Section 114 enables the court to draw a presumption to the effect that, if produced, the said accounts would be unfavourable to the plaintiff. This presumption, if raised by a court, can under certain circumstances rebut the presumption of law raised under Section 118 of the Negotiable Instruments Act. This presumption, if raised by a court, can under certain circumstances rebut the presumption of law raised under Section 118 of the Negotiable Instruments Act. Briefly stated, the burden of proof may be shifted by presumptions of law or fact, and presumptions of law or presumptions of fact may be rebutted not only by direct or circumstantial evidence but also by presumptions of law or fact. We are not concerned here with irrebuttable presumptions of law. 16. The legal principles of the law of presumption in a case of negotiable instrument enunciated by the Hon'ble Supreme Court in the aforesaid judgment have been affirmed in the case of K.P.O. M Hazi (supra). Their Lordships have reiterated that under certain circumstances presumption of law or fact may stand rebutted not only by direct or circumstantial evidence but also by presumption of law and fact. 17. What crystallizes from the aforesaid authorities is that in a complaint under Section 138 of the NI Act the initial presumption that the negotiable instrument must have been issued to discharge a legally enforceable debt or liability in favour of holder of the instrument, in view of section 118 (a) and section 139 of the Act, unless the contrary is proved by the accused. It is equally true that the averments made in the complaint petition about the debt or liability of the accused cannot be taken as a gospel truth just because it is accompanied by a cheque, bearing the signature of the accused. In other words, a cheque may be issued by a person under various circumstances and there may be certain developments in between the date of issuance of the cheque and presentation of the same in the bank. In certain cases signed cheques may also land in the possession of some persons, who may misuse the same by way of projecting a case of payment against a debt. This is the reason that the accused persons have been given the scope to rebut the presumption by way of projecting a plausible defense case during the cross examination of complainant and its witnesses or on the basis of materials on record. This is the reason that the accused persons have been given the scope to rebut the presumption by way of projecting a plausible defense case during the cross examination of complainant and its witnesses or on the basis of materials on record. It is not mandatory for an accused to stand in the dock to prove its alibi since the standard of proof of the case of the accused is only that of "preponderance of probabilities" and not that of proof beyond all reasonable doubt. At the same time putting up a fancy story, without any substance, as a defense is not sufficient to discharge the burden that the cheque was not issued against any debt or liability. 18. In the case before me the only plea that was taken by the accused in the trial court was that the cheque was extorted under threat in a market. It may be mentioned here that a case under section 386 of the IPC was also filed by the accused Indranil Talukdar in the Court being CR Case No. 606 of 2007. In the said case the learned SDJM, Nalbari has acquitted respondent No. 2. In this way, the plea of extortion of the cheque could not be proved in the court and the judgment of learned SDJM was affirmed by the learned Sessions Judge. From the aforesaid judgments, it is also apparent that the complaint of extortion was also instituted in the court belatedly. Had it been a genuine case of extortion and snatching the cheque under threat and that too in a market the petitioner was expected to rush to a nearby police station, but that was not done. Even otherwise the drawer could have intimated the bank not to honour the cheque. However, in the present case there was no instruction of 'stop payment' to the bank. On the other hand, the cheque was dishonoured due to insufficiency of fund. This apart, there is no dispute that the cheque was not written by the petitioner nor is there any dispute about the drawers signature on the cheque. In the backdrop of these facts I hold that the accused/petitioner failed to discharge his burden that the cheque was not issued against any legally enforceable debt or liability. Hence, the Courts below have rightly convicted the petitioner and I do not find any manifest illegality in the impugned judgments. 19. In the backdrop of these facts I hold that the accused/petitioner failed to discharge his burden that the cheque was not issued against any legally enforceable debt or liability. Hence, the Courts below have rightly convicted the petitioner and I do not find any manifest illegality in the impugned judgments. 19. In the result the revision application stands dismissed. Stay order stands vacated. The Registry is directed to return the LCR with a copy of this judgment. Application dismissed