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2023 DIGILAW 2807 (PNJ)

Suresh Kumar Goyal v. Darshan Singh

2023-09-19

DEEPAK GUPTA

body2023
JUDGMENT Deepak Gupta, J. CRM-172-2020 Application is allowed. Annexures A1 to A4 are taken on record. CRM-A-70-2020 Leave to appeal is hereby granted. Registry is directed to assign number to the appeal. CRA-AS-445-2023. In criminal complaint bearing CIS No. NACT 272/2016 filed by the petitioner-Suresh Kumar Goyal to prosecute the accused-Darshan Singh (now respondent) under section 138 of the Negotiable Instruments Act, 1881 [for short 'the NI Act'], the said accused has been acquitted by the Court of ld. JMIC, Dhuri vide judgment dated 06.12.2018. 2. Aggrieved against the said acquittal, complainant approached this Court by way of present appeal. 3. Perusal of the record reveals that it was alleged by the complainant that he was the proprietor of the firm M/s Aggarwal Chips and Marble Store, dealing in chips and marbles. On 25.03.2016, accused along with his relatives came to the complainant and purchased certain items like tiles, grouting, sheets, washbasin etc.for an amount of Rs.2,31,000/-. Accused requested the complainant to keep the articles with him and that he shall lift the same within 4-5 days and issued cheque No.002436 dated 25.03.2016 for Rs.2,31,000/- out of his account, drawn on Corporation Bank, Branch Nabha, favoring the complainant. On 31.03.2016, accused lifted the material purchased by him and on his demand original bill No.5894 dated 31.03.2016 was issued to him. Complainant presented the cheque with his banker i.e., Punjab National Bank, Main Branch, Dhuri, but the same was returned back as dishonored with memo dated 07.05.2016 for the reason "funds insufficient". When accused was confronted, he requested the complainant to present the cheque again with the assurance of encashment. On this assurance, complainant again presented the cheque, but the same was dishonoured vide return memo dated 12.05.2016 for the same reason i.e., "funds insufficient". Complainant then served legal notice dated 03.06.2016 and sent the same to the accused through registered post asking for the cheque amount to be paid within 15 days from the date of receipt for the notice. However, despite the said notice, accused failed to make payment. With these allegations, the complaint was filed on 13.07.2016. After recording preliminary evidence, accused was summoned to face trial under section 138 of the NI Act. On his appearance, he was served with notice of accusation under section 138 of the NI Act on 19.01.2018, to which he pleaded not guilty and claimed trial. With these allegations, the complaint was filed on 13.07.2016. After recording preliminary evidence, accused was summoned to face trial under section 138 of the NI Act. On his appearance, he was served with notice of accusation under section 138 of the NI Act on 19.01.2018, to which he pleaded not guilty and claimed trial. Application moved by the accused under section 145(2) of the NI Act was allowed. Complainant appeared in the witness box and faced cross-examination and then concluded the evidence. Statement of the accused under Section 313 Cr.P.C. was recorded, confronting him with all the incriminating material against him. He controverted the same and pleaded innocence. According to him, he had never purchased marble, floor tiles etc. from the complainant and that cheque in question had been misused by the complainant after obtaining the same from President of Gurudwara Prabandhak Committee, Doda, as he (accused) had a dispute with Raghbir Singh, President of Gurudwara Parbandhak Committee. He denied any liability. He opted to adduce evidence in defence, but closed the same without producing any evidence. 4. After hearing both the parties and appraising record, ld. trial Court recorded acquittal vide impugned judgment dated 06.12.2018. 5. Challenging the aforesaid acquittal by way of this appeal, it is contended by ld. counsel that accused had never denied his signature on the cheque and so there was presumption in favour of the complainant under section 139 of the NI Act recording the fact that cheque had been issued for discharge of debt or liability. It was for the accused to rebut the said presumption. Trial Court also failed to consider the presumption provided under section 118 of the NI Act regarding consideration etc. as per which it is to be presumed that every negotiable instrument is made or drawn for consideration. Holder of the negotiable instrument is presumed to be holder in due course. These presumptions in favour of the complainant-appellant have been ignored by the ld. trial Court. It is further pointed out that the only plea raised by the accused in his statement under Section 313 Cr.P.C. was that cheque had been misused by the complainant after obtaining the same from President of Gurudwara Parbandhak Committee with whom he (accused) had the dispute, but despite availing numerous opportunities, accused failed to produce any evidence to substantiate his defence. So much so accused did not reply to the legal notice which was sent to him prior to filing of the complaint. Attention is further drawn towards the fact that during his testimony, complainant was put a specific question regarding the handwriting on the cheque and complainant clearly stated that cheque was executed by the accused in his own handwriting. Accused did not produce any evidence to rebut the said statement. Ld. trial Court has also misread the evidence and the cross-examination of the complainant by observing that firm of the complainant did not have VAT Number, despite the fact that complainant had disclosed that his firm is filing sale and VAT return on the same. Counsel for the appellant also drawn attention towards the correct photocopy of the invoice bearing No.5894 dated 31.03.2016 as well as copy of the Vat return form and the Income Tax Return as attached with this appeal. With these submissions and alleging the impugned judgments to be based on conjectures and surmises, prayer is made to set aside the same and to convict the respondent-accused under section 138 of the NI Act. 6. Upon notice to the respondent-accused, he made appearance through his counsel and contested the appeal. 7. I have considered submissions of both the sides and appraised the record. 8. Ex.C1 is cheque No.002436 dated 25.03.2016 favouring the complainant for an amount of Rs.2,31,000/- issued by the accused and drawn on Corporation Bank, Nabha Branch, Nabha. Ex.C2 is the return memo dated 12.05.2016 issued by the Bank revealing that cheque was dishonoured for "insufficient funds". Ex.C3 is the copy of legal notice dated 03.06.2016 sent by complainant to the accused through registered post as evident from postal receipt Ex.C4, asking the accused to make payment of the cheque amount within 15 days from the date of receipt of the notice. Ex.C5 is the invoice No.5894 dated 31.03.2016 for an amount of Rs.2,31,000/- issued by the firm of the complainant in the name of accused-Darshan Singh regarding purchase of various material like, marble, grout etc. Ex.C6 is the copy of the ledger account in support of the invoice in question in the name the accused. Ex.C7 is the ledger account from 01.04.2016 to 24.05.2016 revealing that an amount of Rs.2,31,000/- is outstanding against the accused. All these documents were produced and proved by the complainant-Suresh Kumar Goyal during his testimony as CW1. 9. Ex.C6 is the copy of the ledger account in support of the invoice in question in the name the accused. Ex.C7 is the ledger account from 01.04.2016 to 24.05.2016 revealing that an amount of Rs.2,31,000/- is outstanding against the accused. All these documents were produced and proved by the complainant-Suresh Kumar Goyal during his testimony as CW1. 9. Perusal of the record reveals that accused never disputed his signatures on the cheque. Once it is so, presumption under section 139 of the NI Act to be read with section 118 (a) and (b) of the NI Act was available to the complainant. These provisions read as under: - "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." 118. Presumptions as to negotiable instruments. - Until the contrary is proved, 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, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration; (b) as to date. - that every negotiable instrument bearing a date was made or drawn on such date;" 10. In Goa Plast (P) Ltd. v. Chico Ursula D'souza and Anr., 2003 (2) Criminal Court Cases 450 (S.C.) : 2003 (3) SCC 232 , the Hon'ble Supreme Court has held that the provisions of section 138 to 142 of the N.I. Act, is for the purpose of giving credibility to negotiable instruments in business transactions. In view of section 139 of the NI Act, it has to be presumed that a cheque is always issued in discharge of any debt or other liability. The presumption could be rebutted by adducing evidence and the burden of proof is on the person who wants to rebut the presumption. 11. In view of section 139 of the NI Act, it has to be presumed that a cheque is always issued in discharge of any debt or other liability. The presumption could be rebutted by adducing evidence and the burden of proof is on the person who wants to rebut the presumption. 11. In Rangappa v. Sri Mohan, 2010 (3) Criminal Court Cases 022 (S.C.): 2010 (3) Civil Court Cases 115 (S.C.): 2010 (2) Apex Court Judgments 285 (S.C.): 2010 (11) SCC 441 , a three judges bench of the Hon'ble Supreme Court held that section 139 of the NI Act includes the presumption regarding the existence of a legally enforceable debt or liability and that the holder of a cheque is also presumed to have received the same in discharge of such debt or liability. It was clarified in the aforesaid decision that the presumption of the existence of a legally enforceable debt or liability is, of course, rebuttable and it is open to the accused to raise a defence, wherein the existence of a legally enforceable debt or liability can be contested. Without doubt, the initial presumption is in favour of the complainant. Hon'ble Supreme Court further held in above case that section 139 of the NI Act is stated to be an example of a reverse onus clause, which is in tune with the legislative intent of improving the credibility of negotiable instruments section 138 of the NI Act provides for speedy remedy in a criminal forum, in relation to dishonour of cheques. Nonetheless, the Hon'ble Supreme Court cautions that the offence under section 138 of the NI Act is at best a regulatory offence and legally falls in the arena of a civil wrong and therefore, the test of proportionality ought to guide the interpretation of the reverse onus clause. An accused may not be expected to discharge an unduly high standard of proof, reverse onus clause requires the accused to raise probable defence for creating doubt about the existence of a legally enforceable debt or liability for thwarting the prosecution. The standard of proof for doing so would necessarily be on the basis of "preponderance of probabilities" and not "beyond shadow of any doubt." 12. The standard of proof for doing so would necessarily be on the basis of "preponderance of probabilities" and not "beyond shadow of any doubt." 12. In Lekh Raj Sharma v. Yash Pal Gupta, 2015 (4) Civil Court Cases 234 (Delhi), Delhi High Court clarified that accused is obliged to set up a probable defence, which cannot be only a 'possible' defence. There should be some credible material or circumstance available on record, which should lead the Court to conclude that defence/explanation for issuance of dishonored cheque is probable one. 13. In Basalingappa v. Mudibasappa 2019 SCC Online SC 491, referring to various precedents on section 118(a) and 139 of the Negotiable Instruments Act, Hon'ble Supreme Court summarized the principles as under: Once the execution of cheque is admitted, Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability. The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities. To rebut the presumption, it is open for the accused to rely on evidence led by him or accused can also rely on the materials submitted by the complainant in order to raise a probable defence. 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 they rely. That it is not necessary for the accused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden. It is not necessary for the accused to come in the witness box to support his defence. 14. It is in the light of the aforesaid legal position that it is required to be seen that whether accused has been able to probabilise his defence. Here itself, it may be noted that the accused is not required to prove his defence on the standard of proof 'beyond reasonable doubt' and rather, he is simply required to probabilise his defence. Here itself, it may be noted that the accused is not required to prove his defence on the standard of proof 'beyond reasonable doubt' and rather, he is simply required to probabilise his defence. The presumption under Section 139 of the Act can be rebutted even by evidence led by the complainant; and it is not required for the defence to lead evidence to rebut presumption, as has been held in Pawan Kumar v. Sunil Kumar 2020 (1) CCC 391 by this court and also by the Hon'ble Supreme Court in Shiv Kumar v. Ram Avtar Aggarwal, 2020 (2) RCR (Criminal) 147. 15. In order to rebut the presumption available to complainant under section 139 of the NI Act, accused can either appear in the witness box though it is not mandatory; or he can elicit circumstances favourable to him during the cross-examination of complainant; or put forth his defence in his statement under Section 313 Cr.P.C supported by evidence. Here itself, it may be noted that statement of accused under Section 313 Cr.P.C is not a substantive piece of evidence. If accused puts forth his defence in said statement, he must support it with evidence. Reliance can be placed on Sumeti Vij v. M/s Paramount Tech Fab Industries, 2021 (2) CCC 348 (SC), wherein it has been held by the Hon'ble Supreme Court that statement of accused recorded under Section 313 Cr.P.C is not substantive evidence of defence, but is only an opportunity to accused to explain the incriminating circumstances appearing in the prosecution case. 16. In Sumeti Vij's case (supra) before the Hon'ble Supreme Court, accused had not led any evidence to rebut the presumption under section 139 of NI Act. Hon'ble Supreme Court held that there was no evidence to rebut the presumption that cheques were issued for consideration. Hon'ble Supreme Court held further that once the facts came on record remain unrebutted and supported with evidence on record with no substantive evidence of defence of accused to explain the incriminating circumstances appearing in the complaint against him, no error was committed by the Hon'ble High Court to convict the accused under section 138 of NI Act. 17. Similar view was taken by the Hon'ble Supreme Court in Uttam Rama v. Devinder Singh Hudan, 2019 (4) CCC 596 (SC) to the effect that statement of accused under Section 313 Cr.P.C is not substantive evidence. 17. Similar view was taken by the Hon'ble Supreme Court in Uttam Rama v. Devinder Singh Hudan, 2019 (4) CCC 596 (SC) to the effect that statement of accused under Section 313 Cr.P.C is not substantive evidence. In that case, the stand was taken by accused in the statement under section 313 Cr.P.C to the effect that cheque was misused but there was no stand that cheque was stolen. It was held that presumption was not rebutted. 18. In Uttam Rama's case (supra), contention to the effect that 'debt was not proved', was raised in a cheque dishonour case. Hon'ble Supreme Court held as under: - "20. The Trial Court and the High Court proceeded as if, the appellant is to prove a debt before civil court wherein, the plaintiff is required to prove his claim on the basis of evidence to be laid in support of his claim for the recovery of the amount due. A dishonour of cheque carries a statutory presumption of consideration. The holder of cheque in due course is required to prove that the cheque was issued by the accused and that when the same presented, it was not honoured. Since there is a statutory presumption of consideration, the burden is on the accused to rebut the presumption that the cheque was issued not for any debt or other liability. 21. There is the mandate of presumption of consideration in terms of the provisions of the Act. The onus shifts to the accused on proof of issuance of cheque to rebut the presumption that the cheque was issued not for discharge of any debt or liability in terms of Section 138 of the Act." 19. In the present case, as noticed earlier that accused did not deny his signature on the cheque, though he denied any financial or legal liability towards the complainant. The only defence as pleaded by the accused in his statement under Section 313 CrPC was that he had never issued the cheque and that it was misused by the complainant after obtaining the same from President of Gurudwara Prabandhak Committee, Doda with whom he had a dispute. However, no evidence whatsoever was adduced by the accused so as to substantiate his defence. 20. Statement of the accused under Section 313 Cr.P.C. being not on oath as per the legal position discussed earlier, so it cannot be treated as substantive evidence. However, no evidence whatsoever was adduced by the accused so as to substantiate his defence. 20. Statement of the accused under Section 313 Cr.P.C. being not on oath as per the legal position discussed earlier, so it cannot be treated as substantive evidence. Once the accused had taken a particular defence, he was required to substantiate the same or at least probabilise the same. No evidence was adduced by the accused as to what dispute he had with the President of Gurudwara Prabandhak Committee, Doda and even if he had any such dispute, how the complainant of the case is connected with that dispute and why any such President of Gurudwara Prabandhak Committee would hand over the cheque to the complainant. 21. Further as pointed out by ld. counsel for the appellant, during his cross-examination, specific question was put to the complainant regarding handwriting on the cheque and CW1-complainant clarified that the cheque was in the handwriting of the accused. Accused did not rebut the said evidence either by appearing in the witness box or by producing any handwriting expert so as to deny his handwriting on the cheque. Meaning thereby accused does not dispute the fact that body of the cheque was in his handwriting. Once it is so, it becomes clear that cheque had been issued by the accused in the name of the complainant. 22. Still further, one of the reasons given by the trial Court to record acquittal is that though the cheque is dated 25.03.2016, but it was presented in May 2016 and that it was strange as to why the complainant will present the cheque after such a long delay. The said reasoning given by the trial Court is absolutely fallacious. Once the cheque was presented before the bank within the validity period of the cheque, no questions could have been raised regarding the bona fides of the complainant simply because he did not present the cheque immediately. 23. Another reason given by the trial Court to record acquittal is that bill No.5894 does not bear the signature of accused Darshan Singh and that VAT number is also not mentioned therein. Ld. counsel for the appellant has pointed out that Ex.C5, the invoice in question, as produced before the Court, was a photocopy and the upper most portion thereof containing the VAT number was missed therein. Ld. Ld. counsel for the appellant has pointed out that Ex.C5, the invoice in question, as produced before the Court, was a photocopy and the upper most portion thereof containing the VAT number was missed therein. Ld. counsel has placed on record the complete copy of Ex.C5 as Annexure A1, which clearly shows that the VAT number of the complainant. Ld. counsel for the appellant has further placed on record Form VAT 15 as Annexure A3 which also shows the accused-respondent to be one of the sundry-debtor to the extent of Rs.2,31,000/-. 24. Another reasoning given by the trial Court to record acquittal is that accused was still having a kaccha house as was stated by the complainant in his cross-examination and therefore, for what purpose the accused had purchased the marble, tiles etc. Again, the said reasoning given by the trial Court, recorded acquittal is absolutely fallacious, as complainant was not concerned as to for what purpose the accused had purchased the material. 25. It is further important to notice that despite sending a legal notice to the accused, prior to filing of the complaint, asking him to make payment of the cheque amount within 15 days from the date of receipt of the notice, accused failed to respond to the said notice. In case accused had any defence whatsoever or he had not purchased the material as per his defence taken in his statement 313 CrPC, he would have immediately responded to the legal notice. Besides, in case his cheque had been misused, for the reasons stated by him in his statement under Section 313 CrPC, he would have lodged complaint against the complainant with the authorities concerned. However, no such step was ever taken by him. 26. Consequent to the entire discussion above, it is held that impugned judgment of acquittal as recorded by the trial Court cannot be sustained in the eyes of law. The same is hereby set aside. It is proved from the evidence on record that accused-respondent issued cheque No.002436 dated 25.03.2016 for an amount of Rs.2,31,000/- drawn of Corporation Bank in favour of the complainant, which on presentation within the period of its validity, was dishonored due to "insufficient funds" in the account of the accused. The same is hereby set aside. It is proved from the evidence on record that accused-respondent issued cheque No.002436 dated 25.03.2016 for an amount of Rs.2,31,000/- drawn of Corporation Bank in favour of the complainant, which on presentation within the period of its validity, was dishonored due to "insufficient funds" in the account of the accused. Accused failed to make payment of the cheque amount within stipulated period despite legal notice sent to him prior to filing of the complaint and so, all ingredients to constitute offence under section 138 NI Act stand established. 27. Consequently, setting aside the impugned judgment of acquittal, the accused-respondent is held to be guilty and hereby convicted under section 138 NI Act. Let he be heard on quantum of sentence. Adjourned to 05.10.2023 for appearance of the respondent-accused in person for hearing him on the quantum of sentence.