Research › Search › Judgment

Gujarat High Court · body

2015 DIGILAW 750 (GUJ)

Mukundlal Mohanlal Gandhi v. State of Gujarat

2015-07-30

SONIA GOKANI

body2015
JUDGMENT : Sonia Gokani, J. By way of present Revision Application preferred by the applicant under section 397 read with section 401 of the Code of Criminal Procedure, 1973, the applicant has challenged the legality and validity of the judgment and order of conviction and sentence dated March 05, 2012 rendered by the learned 11th Additional Chief Judicial Magistrate, Vadodara, in Criminal Case No.1817 of 1999, as also the judgment and order dated August 20, 2014 rendered by the learned 3rd Additional District and Sessions Judge, Vadodara in Criminal Appeal No.36 of 2012, whereby the learned Judge has confirmed the judgment and order of conviction and sentence passed by the trial Court, whereby the trial Court convicted the applicant for the offence punishable under section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as 'the Act') and sentenced him to undergo simple imprisonment for one year and a fine of Rs.5000/-, in default to undergo simple imprisonment for 15 days. 2. The facts in brief are as under :- 2.1 The respondent No.2 complainant is in the business of trading in edible oil, who supplied oil to the applicant convict. Three cheques were given to the respondent No.2 complainant by the applicant, the details of which are as under: Sr. No. Cheque No. Cheque Date Amount Drawn on 1. 087717 03.05.1999 Rs. 45,000/- The Baroda Traders Co. Op. Bank Ltd., Hathikhana, Fatepura, Vadodara 2. 0384621 07.05.1999 Rs. 35,000/- Patani Co. Op. Bank Ltd., Harni Road Branch, Vadodara 3. 38473 07.05.1999 Rs. 35,700/- Patani Co. Op. Bank Ltd., Harni Road Branch, Vadodara 2.2 When presented before the Bank, the said cheques came to be dishonoured on account of insufficiency of funds on June 03, 1999. The intimation was given to the respondent No.2 complainant by the Bank in that respect of June 04, 1999, and, therefore, a demand notice came to be issued on June 11, 1999. On June 28, 1999, a reply was given to the show cause notice, which was averred to be evasive. A complaint, therefore, came to be filed. After adducing evidence and on giving ample opportunities to both the sides, the Court concluded that the charge having been proved, the applicant is held guilty under section 138 of the Act vide its judgment and order dated March 05, 2012. A complaint, therefore, came to be filed. After adducing evidence and on giving ample opportunities to both the sides, the Court concluded that the charge having been proved, the applicant is held guilty under section 138 of the Act vide its judgment and order dated March 05, 2012. The very judgment and order of conviction and sentence was challenged before the lower Appellate forum by way of Criminal Appeal No.36 of 2012, which ultimately came to be confirmed by the Appellate Forum. It is urged that the original complainant has died and, therefore, his son has been replaced as impleaded as a complainant, who had no personal knowledge of the business of his late father. The other heirs were not joined. When the person who had no knowledge of the actual transaction had stepped into the witness box, on strength of such evidence, he did not discharge initial burden of proving the legally enforceable debt. It is further averred that when the purchase of the goods namely oil is disputed, no record of transaction can be proved and, therefore, the entire judgment and order is based on assumptions and presumptions. Moreover, the applicant is categorical that he has not given any reply to the notice. Even in his further statement under section 313 of the Code of Criminal Procedure, 1973, he has stated so, however, the Court has yet believed that the notice has been issued and, therefore, the wrong has been committed. Hence, present Revision Application. 3. A fortiori, Shri S.P. Hasurkar, learned counsel appearing for the applicant-convict has urged that unless the respondent No.2 complainant discharges his liability of proving that there existed the legally enforceable debt, the Court could not be proceeded further and invoked presumption provided under section 139 of the Act. It is his say that the complainant knew nothing about his father's business and, therefore, his answers very clearly indicated that he had no knowledge at all whether any stock of oil had been supplied or not. If the basic facts do not get proved, no presumption would be available to the party lodging the complaint. He sought to rely upon the decision of the Apex Court rendered in the case of Rashida Kamaluddin Syed and another v. Shaikh Saheblal Mardan (Dead) Through Lrs. If the basic facts do not get proved, no presumption would be available to the party lodging the complaint. He sought to rely upon the decision of the Apex Court rendered in the case of Rashida Kamaluddin Syed and another v. Shaikh Saheblal Mardan (Dead) Through Lrs. and another, reported in 2007(1) GLH 621 : AIR 2007 SC (Supp) 94, as well as a decision of the Apex Court rendered on September 17, 2014 in the case of Vinita S. Rao v. M/s. Essen Corporate Services Pvt. Ltd. while dealing with Criminal Appeal No.2065-2066 of 2014 (reported in AIR 2015 SC 882 ). 4. As the complainant in the matter before the Apex Court was not keeping good health and she was unable to attend the Court, she was represented in proceedings by her husband and the power of attorney holder Shri Sudhir, who had personal knowledge of the entire transaction. The power of attorney was filed along with the complaint. It was contended that though a sworn statement of the power of attorney was recorded, he was not examined. It is further urged by Shri S.P. Hasurkar, learned counsel appearing for the applicant, that it is a settled law that different defences could be raised by the accused and that by itself is not a ground to presume anything against the accused. 5. A contrario sensu, Shri Amrish Pandya, learned counsel appearing for the respondent No.2 original complainant has fervently urged that it requires no interference as both the Courts have concurrently held in favour of the complainant. They have appreciated the evidence at length to prove the guilt of the applicant. He has urged that in the reply to the notice issued, the applicant has, in turn, admitted such dues, wherein he has categorically admitted that the applicant needed to recover an amount of Rs.1,43,65750 ps. from the brother of the complainant, who is the proprietor of "Mona Enterprise" in the wake of some business deal and such amount was ensured to be paid by the complainant for and on behalf of his brother. Rs.40,000/- had been given for which a cheque of Alvi Cooperative Bank, Vadodara, was given. from the brother of the complainant, who is the proprietor of "Mona Enterprise" in the wake of some business deal and such amount was ensured to be paid by the complainant for and on behalf of his brother. Rs.40,000/- had been given for which a cheque of Alvi Cooperative Bank, Vadodara, was given. However, the remaining amount was not paid and the respondent No.2 had ensured the present applicant that the amount of Rs.1,16,400/- which is due to the complainant shall be adjusted and the complainant had ensured not to encash the cheque of Rs.1,16,400/-; and thereafter, he had presented such cheque for Rs.1,16,400/- without the knowledge of the applicant. According to him, it is only in the criminal proceedings, he raised the defence of the complainant not proving that the amount was towards the legally enforceable debt. He has urged that much time has gone and the complainant has already passed away. These are the transactions of the year 1999. This Court ought not to interfere in the revisional jurisdiction. 6. Having thus heard the learned counsel appearing for both the sides and having also considered the material on record, at the outset, three issues are required to be taken note of. Firstly, as the complainant had died, his son had stepped into his shoes. Whether he could discharge the burden of establishing that the cheques given by the applicant-revisionist were towards the legally enforceable debt. Secondly, whether any reply was given to the demand notice issued by the complainant prior to filing of the complaint. Thirdly, in the wake of different defences raised by the applicant-revisionist, whether both the Courts have committed any error or illegality warranting interference in the judgment and orders. 7. Taking firstly the issues of requirement of proving legally enforceable debt, the son having stepped into the shoes of original complainant as well as legal heir, both these issues on facts deserve to be considered only after discussing law on the power of attorney holder being the complainant. 7.1 Relevant discussion of the power of attorney holder in the decision of the Supreme Court rendered in the case of Vinita S. Rao ( AIR 2015 SC 882 ) (supra) is at paragraphs 17 to 19, which is required to be reproduced profitably as under: "17. The second submission of the respondents is that the complaint cannot be filed by a power of attorney holder. The second submission of the respondents is that the complaint cannot be filed by a power of attorney holder. This question is no more res integra. A Division Bench of this Court while considering a criminal appeal arising out of conviction under Section 138 of the NI Act noticed diversion of opinion between different High Courts on the question whether the eligibility criteria prescribed by Section 142(a) of the NI Act would stand satisfied if the complaint itself is filed in the name of the payee or the holder in the due course of the cheque and/or whether the complaint has to be presented before the Court by the payee or the holder of the cheques himself. The Division Bench felt that another issue which would arise for consideration is whether the payee must examine himself in support of the complaint keeping in view the insertion of Section 145 in the NI Act (Act No.5 of 2002). The Division Bench was of the view that the matter should be considered by a larger Bench so that there can be authoritative pronouncement of this Court on the above issues. In A.C. Narayanan v. State of Maharashtra, AIR 2014 SC 630 ) the three Judge Bench of this Court dealt with this reference. This Court noted the questions which had to be decided by it in terms of the reference order as under: "(i) Whether a Power of Attorney holder can sign and file a complaint petition on behalf of the complainant?/Whether the eligibility criteria prescribed by Section 142(a) of NI Act would stand satisfied if the complaint petition itself is filed in the name of the payee or the holder in due course of the cheque? (ii) Whether a Power of Attorney holder can be verified on oath under Section 200 of the Code? (iii) Whether specific averments as to the knowledge of the Power of Attorney holder in the impugned transaction must be explicitly asserted in the complaint? (iv) If the Power of Attorney holder fails to assert explicitly his knowledge in the complaint then can the Power of Attorney holder verify the complaint on oath on such presumption of knowledge? (v) Whether the proceedings contemplated under Section 200 of the Code can be dispensed with in the light of Section 145 of the N.I. Act which was introduced by an amendment in the year 2002?" 18. (v) Whether the proceedings contemplated under Section 200 of the Code can be dispensed with in the light of Section 145 of the N.I. Act which was introduced by an amendment in the year 2002?" 18. After considering the relevant provisions of the NI Act and the relevant judgments on the point, this Court clarified the legal position and answered the questions in the following manner : "(i) Filing of complaint petition under Section 138 of NI Act through power of attorney is perfectly legal and competent. (ii) The Power of Attorney holder can depose and verify on oath before the Court in order to prove the contents of the complaint. However, the power of attorney holder must have witnessed the transaction as an agent of the payee/holder in due course or possess due knowledge regarding the said transactions. (iii) It is required by the complainant to make specific assertion as to the knowledge of the power of attorney holder in the said transaction explicitly in the complaint and the power of attorney holder who has no knowledge regarding the transactions cannot be examined as a witness in the case. (iv) In the light of section 145 of NI Act, it is open to the Magistrate to rely upon the verification in the form of affidavit filed by the complainant in support of the complaint under Section 138 of the NI Act and the Magistrate is neither mandatorily obliged to call upon the complainant to remain present before the Court, nor to examine the complainant or his witness upon oath for taking the decision whether or not to issue process on the complaint under Section 138 of the NI Act. (v) The functions under the general power of attorney cannot be delegated to another person without specific clause permitting the same in the power of attorney. Nevertheless, the general power of attorney itself can be cancelled and be given to another person." 19. Thus, it is clear that the complaint under Section 138 of the NI Act can be filed through the power of attorney holder. In this case, Sudhir Gulvady is the power of attorney holder of the appellant and he has filed the complaint on her behalf. The learned Magistrate recorded the statement of the power of attorney holder under Section 200 of the Code on 5/3/2004 and issued summons. We have perused the said statement. In this case, Sudhir Gulvady is the power of attorney holder of the appellant and he has filed the complaint on her behalf. The learned Magistrate recorded the statement of the power of attorney holder under Section 200 of the Code on 5/3/2004 and issued summons. We have perused the said statement. It is signed by the power of attorney holder and by learned Magistrate. A.C. Narayanan states that power of attorney holder must have knowledge about the relevant transactions. There can be no dispute about the fact that in this case, the power of attorney holder being the husband of the appellant has witnessed all transactions and he possesses due knowledge about them. He is associated with all transactions at all crucial stages. The appellant has placed this fact in the forefront in her complaint. The relevant paragraph of the complaint reads as under: "3. The complainant is represented by her Power of Attorney Holder Mr. Sudhir Gulvady, her husband as the complainant is unable to come to the Court due to her not keeping good health and the whole transaction is also within the knowledge of her Power of Attorney holder who is her husband". 8. Whether the son of the complainant could establish through his personal knowledge entire details of transactions with the applicant/revisionist and whether he could thereby establish existence of legally enforceable debt, need to be examined from facts. In the present case, it is not in dispute that the complainant was dealing in oil. He was trading in edible oil in the name and style of "Sainath Enterprise". It was a wholesale business and the applicant had been supplied the edible oil by the father of the respondent No.2, who was the original complainant. 9. Both the Courts below have held that the complainant's son who stepped into the shoes of the complainant duly discharged his initial burden of proving that the cheques given were towards the legally enforceable debt and he had also withstood the cross-examination made by the other side. 10. If one looks at the examination in chief and the cross-examination of this witness, he has been categorical that his father was dealing in supply of oil as a wholesale businessman and the applicant had frequently purchased goods on credit from the original complainant. Three cheques issued were towards such supply. 10. If one looks at the examination in chief and the cross-examination of this witness, he has been categorical that his father was dealing in supply of oil as a wholesale businessman and the applicant had frequently purchased goods on credit from the original complainant. Three cheques issued were towards such supply. In the cross-examination he agreed that he joined his father's business in the year 1995 and the accused was dealing with his father since the year 1974. His father was trading in the name and style of "Sainath Enterprise". He had said in the cross-examination that he would have personal knowledge of any transaction with the applicant after he joined the business of his father. As to how many times he was supplied the goods on credit, he would know only after looking to the books of account. To the question as to whether there was any consent taken of the accused at the time of presenting the cheque in the Bank, he replied that as the dates were already indicated in the cheques, the same were presented in the Bank for encashment. He, of course, said that first time how much oil was supplied, he would not remember orally and would look at the books of account for the same. Every payment of the goods supplied is always done through the cheque. He also had agreed that there are many business transactions with the applicant and none of the cheques of the applicant had been dishonoured. Rest of all the cheques had been cleared. He did not agree to the suggestion that on account of mistake committed in the accounts that the complaint has been filed. The account books, income tax returns, he has agreed to present on seeking the advice of his advocate. 11. Much is emphasised on his not producing these books of account, so also his lack of personal knowledge of any transaction prior to joining his business in the year 1995. The entire deposition, if, is looked at closely, it on the contrary reflects that the parties had business transaction and by way of extracted admission, in the cross-examination of the complainant's son, the same gets proved. Even the factum of other cheques, other than three disputed cheques having been cleared, also get proved that it is not for the first time that these transactions have been effected. Even the factum of other cheques, other than three disputed cheques having been cleared, also get proved that it is not for the first time that these transactions have been effected. He also has reflected his knowledge of both the parties having business deals for long time. It is not at all uncommon for the wholesaler to supply goods to the parties on credit and if the other cheques were on regular basis cleared, they had no reason for not to trust such customers. Thus, the prosecution could establish the first issue beyond semblance of any doubt. He not only proved his knowledge as the legal heir, he also had witnessed the transactions and he possessed due knowledge to entitle him to act in lieu of the complainant who had passed away and who was his father. 12. Coming to the second issue, all the three cheques were towards the oil that had been supplied. Three cheques referred to herein-above when were dishonoured, when they were presented before Alvi Co-operative Bank by the original complainant. Thereafter, the demand notice was issued. Such notice was issued on June 11, 1999, which was replied by the applicant on June 28, 1999. This, according to the complainant, was an evasive reply. However, it is the say of the applicant that no reply was given to any such notice. 12.1 The Courts have also concurrently held that in the reply to the demand notice, the stand of the applicant was of his having accepted the dues of Rs.1,16,400/-. His defence was that the brother of the complainant owed larger amount of money to the applicant out of which Rs.40,000/- was already paid by the complainant, who had ensured to pay for and on behalf of his brother and he had also ensured that the cheque given by the applicant for an amount of Rs.1,16,400/- to the complainant, would not be presented to the Bank and the same would be adjusted towards his brother's outstanding dues. 12.2 The stand taken in the reply to notice also further strengthens the case of the original complainant. He does not dispute of having given the cheque of Rs.1,16,400/-, however, he reminds the complainant that such cheque was not to be presented and the amount was to be adjusted towards the dues of his brother, which was to the tune of Rs.1,43,657/-. He does not dispute of having given the cheque of Rs.1,16,400/-, however, he reminds the complainant that such cheque was not to be presented and the amount was to be adjusted towards the dues of his brother, which was to the tune of Rs.1,43,657/-. Once having realised that the stand taken of not admitting the supply of goods would get falsified by the reply by way of notice, where exact amount of three cheques being a sum of Rs.1,16,400/- is said to have been satisfied against the debt of the brother of the complainant, the applicant possibly on realising that this may amount to his admission has taken a valte face to state that no reply to the notice was at all given. This is not only, not a bona fide stand taken by the applicant, it is, in fact, a dishonest defence taken as an afterthought to evade the liability. Therefore, it can be held that the Courts below rightly held that the reply to the demand notice was given before the complaint and was not a one-fold reply. 12.3 At this juncture, the law on proof of legally enforceable debt and presumption under section 139 of the Act require close examination. 12.4 It is a well settled law that before the presumption under section 139 of the Negotiable Instruments Act could be raised, the complainant needs to firstly establish that the cheque issued was towards the legally enforceable debt. Once this gets established that the presumption under section 139 of the Act would come to the rescue of the complainant. 12.5 In the case of Rangappa v. Mohan, reported in AIR 2010 SC 1898 , the Apex Court was considering the scope of presumption and whether the presumption mandated under section 139 of the Negotiable Instruments Act included the presumption that there existed legally enforceable debt or liability. It is held that such presumption can be made, however, the same is rebuttable presumption. The Court referred to the judgment of the Division Bench in the case of Krishna Janardhan Bhat v. Dattatraya G. Hegde, reported in (2008) 4 SCC 54 . It is held that such presumption can be made, however, the same is rebuttable presumption. The Court referred to the judgment of the Division Bench in the case of Krishna Janardhan Bhat v. Dattatraya G. Hegde, reported in (2008) 4 SCC 54 . 12.6 On perusal of the findings and observations of the Apex Court in the said authority, it transpires that section 138 has three ingredients i.e. (1) that there is a legally enforceable debt; (2) that the cheque was drawn from the account of the Bank for discharge in whole or in part of any debt or other liability which presupposes a legally enforceable debt; and (iii) that the cheque so issued had been returned due to insufficiency of funds. 12.7 This further says that the said section provides for compliance with legal requirements before a complaint can be acted upon. Section 139 merely raises a presumption in regard to second aspect of the matter. Existence of legally recoverable debt is not a matter of presumption under section 139 of the Negotiable Instruments Act. It merely raises a presumption in favour of a holder of a cheque that the same has been issued for discharge of any debt or other liability. "22. The High Court in exercise of its revisional jurisdiction although accepted the contention of the appellant that the presumption under Section 139 of the Act extends "only to the extent that the holder of the cheque received the cheque for the discharge in whole or in part of any debt or other liability" and the same only means "that cheque was issued for consideration, but does not extend to the extent that the cheque was issued for the discharge of the debt or liability as pleaded by the accused", opined that the complainant had discharged that onus by adducing his own evidence. Observing that the appellant did not step into the witness box, it was opined that although the relationship between the appellant and Shri R.G. Bhat was strained, there was nothing to show that the relationship between the appellant and the complainant became strained despite the fact that a panchayat meeting was held in regard to the said dispute in 1996. Observing that the appellant did not step into the witness box, it was opined that although the relationship between the appellant and Shri R.G. Bhat was strained, there was nothing to show that the relationship between the appellant and the complainant became strained despite the fact that a panchayat meeting was held in regard to the said dispute in 1996. The High Court, however, refused to go into the factual aspect of the matter stating that it was exercising a revisional jurisdiction, stating : "Since the burden of proving that the cheque had been misused is on the accused petitioner, and there being a concurrent finding of the Trial Court and the Appellant Court with regard to that holding that the petitioner had failed to discharge that burden, I do not find any ground to interfere in the order of the Trial Court and that the Appellate Court, so far as they hold the petitioner guilty of an offence punishable under Section 138 of the Negotiable Instruments Act." xxx xxx xxx 28. Indisputably, a mandatory presumption is required to be raised in terms of Section 118(b) and Section 139 of the Act. Section 13(1) of the Act defines "negotiable instrument" to mean "a promissory note, bill of exchange or cheque payable either to order or to bearer." 12.8 Reverting to the facts of the present case, it can be said that the defence raised by the accused is not probable at all. He has thoroughly failed to discharge the burden even with the preponderance of the probability. The statutory presumption under sections 139 and 118 of the Act when came into play and the same when have not been rebutted as required under the law, in conclusion it has been held that the Courts below committed no error nor any manifest illegality. 12.9 The Supreme Court in the case of Ramdas s/o. Khelu Naik v. Krishnanand s/o. Vishnu Naik, reported in (2014) 12 SCC 625 , was considering the question proving the debt or other liability for which the cheque is issued. The appellant convict was a property dealer and the complainant was his employee on salary of Rs.2500/- per month and Rs.20/- per day. In absence of any material in support of the complainant's giving handloan to the applicant accused and as to how the amount of Rs.5 lakh was computed and in return of hand loan of Rs.1,75,000/-. The appellant convict was a property dealer and the complainant was his employee on salary of Rs.2500/- per month and Rs.20/- per day. In absence of any material in support of the complainant's giving handloan to the applicant accused and as to how the amount of Rs.5 lakh was computed and in return of hand loan of Rs.1,75,000/-. In absence of any record, whether there was any sufficient bank balance in the account of the accused when the cheque was dishonoured. In such factual scenario, the Apex Court has held that the complainant failed to discharge the liability that it was a legally enforceable debt. This is essentially on the basis of glaring facts as mentioned herein above that the Court decided and held that the complainant failed, which would in no manner help the cause of the applicant revisionist. 12.10 The complainant before the Apex Court being an employee earning Rs.2500/- per month could not have given a hand loan of such a huge amount to his employer. 12.11 It would be profitable to regurgitate the relevant findings and observations of the said decision in the case of Rangappa ( AIR 2010 SC 1898 ) (supra) as under : "8. 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 the 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." (Emphasis supplied) Specifically in relation to the nature of the presumption contemplated by Section 139 of the Act, it was observed; "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 been rebutted. 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 been rebutted. Other important principles of legal jurisprudence, namely, presumption of innocence as a human right 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." (Emphasis supplied) 11. With respect to the decision cited above, counsel appearing for the respondent-claimant has submitted that the observations to the effect that the 'existence of legally recoverable debt is not a matter of presumption under Section 139 of the Act' and that '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' [See Para. 30 in Krishna Janardhan Bhat (supra)] are in conflict with the statutory provisions as well as an established line of precedents of this Court. It will thus be necessary to examine some of the extracts cited by the respondent claimant. For instance, in Hiten P. Dalal v. Bratindranath Banerjee, (2001) 6 SCC 16 : AIR 2001 SC 3897 , it was held (Ruma Pal, J. at Paras. 22-23): "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, ..., it is obligatory on the Court to raise this presumption in every case where the factual basis for the raising of the presumption has 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 (...). 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. 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 probability of the nonexistence of the presumed fact. 23. In other words, provided the facts required to form the basis of a presumption of law exists, the discretion is left with the Court 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. 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." (Emphasis supplied) 12. The respondent-claimant has also referred to the decision reported as Mallavarapu Kasivisweswara Rao v. Thadikonda Ramulu Firm and Ors., 2008 (8) SCALE 680 : AIR 2008 SC 2898 , wherein it was observed: "Under Section 118(a) of the Negotiable Instruments Act, the court is obliged to presume, until the contrary is proved, that the promissory note was made for consideration. It is also a settled position that the initial burden in this regard lies on the defendant to prove the nonexistence of consideration by bringing on record such facts and circumstances which would lead the Court to believe the nonexistence of the consideration either by direct evidence or by preponderance of probabilities showing that the existence of consideration was improbable, doubtful or illegal...." This decision then proceeded to cite an extract from the earlier decision in Bharat Barrel and Drum Manufacturing Company v. Amin Chand Pyarelal, (1999) 3 SCC 35 : AIR 1999 SC 1008 (Para. 12) : "Upon consideration of various judgments as noted herein above, 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 improbably 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 nonexistence 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 nonexistence 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. 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 nonexistence was so probable that a prudent man would, under the circumstances of the case, act upon the plea that it did not exist." (Emphasis supplied) Interestingly, the very same extract has also been approvingly cited in Krishna Janardhan Bhat, : AIR 2008 SC 1325 ) (supra). 13. 13. With regard to the facts in the present case, we can also refer to the following observations in M.M.T.C. Ltd. and Anr. v. MedchI Chemicals and Pharma (P) Ltd., (2002) 1 SCC 234 : ( AIR 2002 SC 182 ) (Para. 19) : "... The authority shows that even when the cheque is dishonoured by reason of stop payment instruction, by virtue of Section 139 the Court has to presume that the cheque was received by the holder for the discharge in whole or in part, of any debt or liability. Of course this is a rebuttable presumption. The accused can thus show that the 'stop payment' instructions were not issued because of insufficiency or paucity of funds. If the accused shows that in his account there was sufficient funds to clear the amount of the cheque at the time of presentation of the cheque for encashment at the drawer bank and that the stop payment notice had been issued because of other valid causes including that there was no existing debt or liability at the time of presentation of cheque for encashment, then offence under Section 138 would not be made out. The important thing is that the burden of so proving would be on the accused. ..." (Emphasis supplied) 14. In light of these extracts, we are in agreement with the respondent-claimant that the presumption mandated by Section 139 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. 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 under Section 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 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. 15. 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. 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 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. The fact that the accused had made regular payments to the complainant in relation to the construction of his house does not preclude the possibility of the complainant having spent his own money for the same purpose. As per the record of the case, there was a slight discrepancy in the complainant's version, in so far as it was not clear whether the accused had asked for a hand loan to meet the construction-related expenses or whether the complainant had incurred the said expenditure over a period of time. Either way, the complaint discloses the prima facie existence of a legally enforceable debt or liability since the complainant has maintained that his money was used for the construction expenses. Since the accused did admit that the signature on the cheque was his, the statutory presumption comes into play and the same has not been rebutted even with regard to the materials submitted by the complainant. 16. In conclusion, we find no reason to interfere with the final order of the High Court, dated 26102005, which recorded a finding of conviction against the appellant. The present appeal is disposed of accordingly." 13. From the discussion made herein above, it is being held that the complainant duly discharged the initial burden of proving that there existed legally enforceable debt towards which all the three impugned cheques had been issued. In no uncertain terms in the demand notice issued prior to lodging of the complaint, such debt came to be admitted and the applicant herein in no uncertain terms also has conceded to giving of the cheque towards the outstanding amount. However, he has sought to adjust the cheque amount of Rs.1,43,657/- towards the dues of the brother of the complainant and that is one of his defences. However, he has sought to adjust the cheque amount of Rs.1,43,657/- towards the dues of the brother of the complainant and that is one of his defences. He has a recourse open of pursuing the debt if at all existed of the brother of the complainant. There is nothing on record to indicate that he has pursued any legal option for recovery. He also was at liberty to raise the defence of adjusting these amounts of three cheques against the outstanding debt of brother of the complainant. However, he does not appear to have either proceeded legally against the brother of the complainant nor has he taken consistent stand in the present proceedings also. He, on the contrary, went on changing his defence making his case further very weak. Assuming that he can take multiple defences, it could not be either sham or bogus nor should it be reflecting the inconsistent approach of the applicant and that exactly what has emerged from the record. 14. Resultantly, in view of the foregoing discussion, all the three questions are answered in favour of the prosecution. Both the Courts while holding concurrently against the applicant have committed no error in either convicting or sentencing the applicant for a period of one year. 15. However, so far as the amount of fine and absence of compensation are concerned, this Court needs to emphasis at this stage that the trial Courts and the Appellate Fora trying the matters under the Negotiable Instruments Act, are required to bear in mind the provisions of the Negotiable Instruments Act, so also the ratio laid down by the Apex Court in various decisions, wherein it has emphasised the need for granting compensation, which should be in tune with the provisions of Negotiable Instruments Act and such amount could be upto double the cheque amount. 16. When it takes years for the proceedings under section 138 of the Negotiable Instruments Act to get finally concluded, expecting a person to take also recourse of civil proceedings for recovery of money when the law of limitation also may not come to his rescue, would amount to travesty of justice. 17. 16. When it takes years for the proceedings under section 138 of the Negotiable Instruments Act to get finally concluded, expecting a person to take also recourse of civil proceedings for recovery of money when the law of limitation also may not come to his rescue, would amount to travesty of justice. 17. The Apex Court in R. Vijayan v. Baby and another, reported in (2012) 1 SCC 260 : AIR 2012 SC 528 , has considered at length the objects of the Act and held that the Chapter xvii provides for both traditional punitive provisions as well as compensatory and restitutive provisions. The Court also pointed out difficulties for complainants with regard to recovery of cheque with interest and suggested that the approach of the Court should be more uniform, practical and realistic and provisions of Chapter xvii be amended suitably. Apt it would be reproduce the relevant paragraphs of the above cited decision, which read as under : "14. This case relates to dishonour of cheque in the year 1995. Though the complainant appellant has succeeded in obtaining a conviction, he has virtually lost in the sense he did not get compensation to recover the amount of the dishonoured cheque. As the limitation for filing a civil suit expired during the pendency of the appeal before the Sessions Court, the appellant has also lost the opportunity of recovering the amount by way of civil suit. In view of this peculiar position, we requested Dr. Rajiv Dhavan, senior counsel, to assist us as an Amicus Curiae to suggest methods to improve the disposal of cases under section 138 of the Act and also improve the relief that could be granted in such cases. 15. In the meantime a three Judge Bench of this Court in Damodar S. Prabhu v. Sayed Babalal H. [ 2010 (5) SCC 663 : AIR 2010 SC 1907 : 2010 Cri LJ 2860, addressed the question of reluctance of offenders to compound the cases at earlier stages of the case prosecution leading to a huge pendency of cheque dishonour cases, and issued the following guidelines proposing levy of 'a graded scale of fine' to encourage compounding at earlier stages of the case: "21. ..(i)..(a) That directions can be given that the Writ of Summons be suitably modified making it clear to the accused that he could make an application for compounding of the offences at the first or second hearing of the case and that if such an application is made, compounding may be allowed by the court without imposing any costs on the accused. (b) If the accused does not make an application for compounding as aforesaid, then if an application for compounding is made before the Magistrate at a subsequent stage, compounding can be allowed subject to the condition that the accused will be required to pay 10% of the cheque amount to be deposited as a condition for compounding with the Legal Services Authority, or such authority as the Court deems fit. (c) Similarly, if the application for compounding is made before the Sessions Court or a High Court in revision or appeal, such compounding may be allowed on the condition that the accused pays 15% of the cheque amount by way of costs. (d) Finally, if the application for compounding is made before the Supreme Court, the figure would increase to 20% of the cheque amount. x x x x x 25. The graded scheme for imposing costs is a means to encourage compounding at an early stage of litigation. In the status quo, valuable time of the Court is spent on the trial of these cases and the parties are not liable to pay any Court fee since the proceedings are governed by the Code of Criminal Procedure, even though the impact of the offence is largely confined to the private parties. Even though the imposition of costs by the competent court is a matter of discretion, the scale of costs has been suggested in the interest of uniformity. The competent Court can of course reduce the costs with regard to the specific facts and circumstances of a case, while recording reasons in writing for such variance. Bona fide litigants should of course contest the proceedings to their logical end." 16. We propose to address an aspect of the cases under section 138 of the Act, which is not dealt with in Damodar S. Prabhu. It is sometimes said that cases arising under section 138 of the Act are really civil cases masquerading as criminal cases. Bona fide litigants should of course contest the proceedings to their logical end." 16. We propose to address an aspect of the cases under section 138 of the Act, which is not dealt with in Damodar S. Prabhu. It is sometimes said that cases arising under section 138 of the Act are really civil cases masquerading as criminal cases. The avowed object of Chapter xvii of the Act is to "encourage the culture of use of cheques and enhance the credibility of the instrument". In effect, its object appears to be both punitive as also compensatory and restitutive, in regard to cheque dishonour cases. Chapter xvii of the Act is an unique exercise which blurs the dividing line between civil and criminal jurisdictions. It provides a single forum and single proceeding, for enforcement of criminal liability (for dishonouring the cheque) and for enforcement of the civil liability (for realisation of the cheque amount) thereby obviating the need for the creditor to move two different Fora for relief. This is evident from the following provisions of Chapter xvii of the Act: (i) The provision for levy of fine which is linked to the cheque amount and may extend to twice the amount of the cheque (section 138) thereby rendering section 357(3) virtually infructuous insofar as cheque dishonour cases. (ii) The provision enabling a First Class Magistrate to levy fine exceeding Rs.5,000/- (Section 143) notwithstanding the ceiling to the fine, as Rs.5,000/- imposed by section 29(2) of the Code; (iii) The provision relating to mode of service of summons (section 144) as contrasted from the mode prescribed for criminal cases in section 62 of the Code; (iv) The provision for taking evidence of the complainant by affidavit (section 145) which is more prevalent in civil proceedings, as contrasted from the procedure for recording evidence in the Code; (v) The provision making all offences punishable under section 138 of the Act compoundable. 17. The apparent intention is to ensure that not only the offender is punished, but also ensure that the complainant invariably receives the amount of the cheque by way of compensation under section 357(1)(b) of the Code. 17. The apparent intention is to ensure that not only the offender is punished, but also ensure that the complainant invariably receives the amount of the cheque by way of compensation under section 357(1)(b) of the Code. Though a complaint under section 138 of the Act is in regard to criminal liability for the offence of dishonouring the cheque and not for the recovery of the cheque amount, (which strictly speaking, has to be enforced by a civil suit), in practise once the criminal complaint is lodged under section 138 of the Act, a civil suit is seldom filed to recover the amount of the cheque. This is because of the provision enabling the court to levy a fine linked to the cheque amount and the usual direction in such cases is for payment as compensation, the cheque amount, as loss incurred by the complainant on account of dishonour of cheque, under section 357(1)(b) of the Code and the provision for compounding the offences under section 138 of the Act. Most of the cases (except those where liability is denied) get compounded at one stage or the other by payment of the cheque amount with or without interest. Even where the offence is not compounded, the courts tend to direct payment of compensation equal to the cheque amount (or even something more towards interest) by levying a fine commensurate with the cheque amount. A stage has reached when most of the complainants, in particular the financing institutions (particularly private financiers) view the proceedings under section 138 of the Act, as a proceeding for the recovery of the cheque amount, the punishment of the drawer of the cheque for the offence of dishonour, becoming secondary. 18. Having reached that stage, if some Magistrates go by the traditional view that the criminal proceedings are for imposing punishment on the accused, either imprisonment or fine or both, and there is no need to compensate the complainant, particularly if the complainant is not a 'victim' in the real sense, but is a well to do financier or financing institution, difficulties and complications arise. In those cases where the discretion to direct payment of compensation is not exercised, it causes considerable difficulty to the complainant, as invariably, by the time the criminal case is decided, the limitation for filing civil cases would have expired. In those cases where the discretion to direct payment of compensation is not exercised, it causes considerable difficulty to the complainant, as invariably, by the time the criminal case is decided, the limitation for filing civil cases would have expired. As the provisions of Chapter xvii of the Act strongly lean towards grant of reimbursement of the loss by way of compensation, the courts should, unless there are special circumstances, in all cases of conviction, uniformly exercise the power to levy fine upto twice the cheque amount (keeping in view the cheque amount and the simple interest thereon at 9% per annum as the reasonable quantum of loss) and direct payment of such amount as compensation. Direction to pay compensation by way of restitution in regard to the loss on account of dishonour of the cheque should be practical and realistic, which would mean not only the payment of the cheque amount but interest thereon at a reasonable rate. Uniformity and consistency in deciding similar cases by different courts, not only increase the credibility of cheque as a negotiable instrument, but also the credibility of courts of justice. 19. We are conscious of the fact that proceedings under section 138 of the Act cannot be treated as civil suits for recovery of the cheque amount with interest. We are also conscious of the fact that compensation awarded under section 357(1)(b) is not intended to be an elaborate exercise taking note of interest etc. Our observations are necessitated due to the need to have uniformity and consistency in decision making. In same type of cheque dishonour cases, after convicting the accused, if some courts grant compensation and if some other courts do not grant compensation, the inconsistency, though perfectly acceptable in the eye of law, will give rise to certain amount of uncertainty in the minds of litigants about the functioning of courts. Citizens will not be able to arrange or regulate their affairs in a proper manner as they will not know whether they should simultaneously file a civil suit or not. Citizens will not be able to arrange or regulate their affairs in a proper manner as they will not know whether they should simultaneously file a civil suit or not. The problem is aggravated having regard to the fact that in spite of section 143(3) of the Act requiring the complaints in regard to cheque dishonour cases under section 138 of the Act to be concluded within six months from the date of the filing of the complaint, such cases seldom reach finality before three or four years let alone six months. These cases give rise to complications where civil suits have not been filed within three years on account of the pendency of the criminal cases. While it is not the duty of criminal courts to ensure that successful complainants get the cheque amount also, it is their duty to have uniformity and consistency, with other courts dealing with similar cases. 20. One other solution is a further amendment to the provision of Chapter XVII so that in all cases where there is a conviction, there should be a consequential levy of fine of an amount sufficient to cover the cheque amount and interest thereon at a fixed rate of 9% per annum followed by award of such sum as compensation from the fine amount. This would lead to uniformity in decisions, avoid multiplicity of proceedings (one for enforcing civil liability and another for enforcing criminal liability) and achieve the object of Chapter XVII of the Act, which is to increase the credibility of the instrument. This is, however, a matter for the Law Commission of India to consider." (emphasis supplied) 18. The Apex Court has, thus, insisted on uniformity and consistency in the grant of compensation. Different approach of different Courts obviously in the case of dishonour of cheques would give rise to uncertainty in the minds of litigants about functioning of the Courts. They also would be puzzled as to whether there would be requirement of preferring a civil suit. The Apex Court has, thus, insisted on uniformity and consistency in the grant of compensation. Different approach of different Courts obviously in the case of dishonour of cheques would give rise to uncertainty in the minds of litigants about functioning of the Courts. They also would be puzzled as to whether there would be requirement of preferring a civil suit. The Court went to the extent of saying that when the Chapter XVII of the Negotiable Instruments Act leans in form of reimbursement of loss by compensation, it would be the duty of the Court that successful complainant gets the amount of cheque by way of compensation and levy of fine uniformly to cover the cheque amount and interest thereon at a rate of 9% per annum upto twice the cheque amount as permissible under the law unless the special circumstances warrant otherwise. And, the Court should consider the cheque amount with interest thereon at the rate of 9% per annum followed by the award of compensation from the fine levied in view of section 357(1) of the CrPC. The object is specified to be both, punitive, as also restitutive and compensatory. The object being a single window solution for dishonour of cheque essentially, consistency in approach is expected to achieve the same. Therefore, not only punitive aspect alone needs emphasis, restitutive and compensatory aspect also cannot be lost sight of while dealing with these matters. 19. The compensation under section 357 of the CrPC is insisted upon right from the time of the case of Hari Singh v. Sukhbir Singh, reported in AIR 1988 SC 2127 , by the Apex Court. The victim of dishonour of cheque is thereby ensured that he/she is not forgotten by the criminal justice system. More so, in a case under the Negotiable Instruments Act, where both civil and criminal remedies get blurred at same stage. Such compensation can be granted under section 357(1) of the CrPC from the fine levied by the Court as : (i) in defraying the expenses incurred in prosecuting the case; (ii) for loss or injury caused by the offence when such compensation is recoverable through civil court; (iii) bearing in mind the compensation permissible under the Fatal Accidents Act, 1855 and (iv) in compensating bona fide purchaser of such property for the loss caused if such property is restored in the case of offences of theft, cheating, etc. 20. Yet another way of granting is under section 357(3) of the CrPC. Easier it is to implement and execute the order of compensation given from the fine levied under section 357(1) of the CrPC. When compensation cannot be given as fine does not form part of sentence in which under section 357(3) of the CrPC may become necessary to be invoked. 21. This Court since is exercising powers under section 397 read with section 401 of the Code of Criminal Procedure, 1973, it can in revisional jurisdiction rectify any illegality and/or error and non-grant of compensation to the complainant when otherwise the Courts found the guilt of the accused/revisionist established duly deserves indulgence. 22. For the foregoing reasons, the present Revision Application fails and is, accordingly, rejected. The impugned judgment and order of conviction and sentence dated March 05, 2012 passed by the learned 11th Additional Chief Judicial Magistrate, Vadodara, in Criminal Case No.1817 of 1999 as well as the judgment and order dated August 20, 2014 rendered by the learned 3rd Additional District and Sessions Judge, Vadodara, in Criminal Appeal No.36 of 2012, confirming the judgment and order of conviction and sentence, is upheld. 23. However, so far as the sentence of fine is concerned, the same is hereby quashed and set aside since the compensation under section 357(3) of the Code of Criminal Procedure, 1973 can be granted only in the case where there is no sentence of fine. In view of the same, the applicant is directed to pay compensation to the respondent No.2 complainant under section 357(3) of the Code of Criminal Procedure at the rate of 9% per annum on the total amount of cheques of Rs.1,16,400/- from the date of filing of the complaint before the trial Court. 24. The applicant-convict is directed to surrender himself before the concerned trial Court within a period of eight weeks, failing which the trial Court concerned shall issue a non-bailable warrant against the applicant-convict, so as to get the custody of the applicant and thereafter, he shall be sent to jail for serving the sentence. 25. The amount of Rs.50,000/- has already been deposited with the Registry of this Court. The same shall be paid to the respondent-complainant by way of an account payee cheque on his proper identification, subject to the outcome of the proceedings, if any preferred before the Apex Court. 25. The amount of Rs.50,000/- has already been deposited with the Registry of this Court. The same shall be paid to the respondent-complainant by way of an account payee cheque on his proper identification, subject to the outcome of the proceedings, if any preferred before the Apex Court. Revision Application stands disposed of accordingly.