JUDGMENT : Heard Mr. K. Tama, learned counsel for the appellant. Also heard Mr. J. Jini, learned Amicus Curiae for the sole respondent. 2. This Criminal appeal under Section 378 of Code of Criminal Procedure, 1973, is directed against the impugned judgment & order dated 07.08.2019, passed by the learned Chief Judicial Magistrate, Yupia, in CR Case No. 38/2016, under Section 138 of the Negotiable Instrument Act, 1881, whereby, the respondent has been acquitted. 3. The case projected in brief is that the appellant had given a loan amount of Rs. 1,40,000/- (Rupees Four Lakhs Forty Thousand) only to the respondent with agreed terms and conditions to return the same with interest at the rate of 10% per month. The said amount was given by one Smti. Kungyam Yangfo, to the respondent on behalf of the appellant. The respondent on 11.05.2016, has issued a cheque bearing No. 756093 to the appellant for an amount of Rs. 5,00,000/- (Rupees Five Lakhs) only drawn on State Bank of India, Seppa Branch, East Kameng District, Arunachal Pradesh to discharge the debt liability owed to the appellant being the loan amount with interest at the rate of 4% per month. Accordingly, the appellant presented the said cheque in the Bank at SBI, Ganga Branch, Itanagar for encashment. However, on 12.05.2016 and 13.05.2016, it was informed to the appellant by the drawee bank that the aforesaid cheque has been dishonoured on the ground of insufficient fund and issued return slips. Thereafter, the appellant served a legal notice dated 16.05.2016, to the respondent, thereby, requested to make the payment within a period of 15(fifteen) days from the date of receipt of the said legal notice. However, despite receipt of the said legal notice, the respondent did not make the payment of dishonoured cheque amount to the appellant nor any reply to the legal notice. 4. The appellant, thereafter, filed a complaint case before the learned Chief Judicial Magistrate, Yupia, under Section 138 of Negotiable Instrument Act, 1881 (in short NI Act, 1881) read with Section 420 of IPC. Accordingly, the learned Chief Judicial Magistrate took cognizance under Section 138 of the NI Act, 1881, which was registered as C.R. Case No. 38/2016. Thereafter, the Court issued process against the respondent. 5. In order to prove the case, the appellant has examined 5 (five) witnesses including herself. Accordingly, the learned Chief Judicial Magistrate took cognizance under Section 138 of the NI Act, 1881, which was registered as C.R. Case No. 38/2016. Thereafter, the Court issued process against the respondent. 5. In order to prove the case, the appellant has examined 5 (five) witnesses including herself. The defence has not adduced any evidence other than the statement under Section 313 of Cr.P.C, 1973. 6. After consideration of the materials on record, the following points for determination have been framed, which are as follows: i) Whether the accused issued the cheque bearing No. 756093 dated 11.05.2016, in favour of the complainant for the discharge of legally enforceable debt or liability? ii) Whether the cheque was dishonoured for insufficient fund in the account of the accused? iii) Whether the accused received the demand notice issued by the complainant regarding the dishonour of the cheque? iv) Whether the accused has failed to repay the cheque amount to the complainant within stipulated period? v) Whether the accused has committed the offence under 138 of Negotiable Instrument, Act, 1881? 7. The learned Chief Judicial Magistrate, determined the point No. 1 and held that the cheque No. 756093 dated 11.05.2016, was not issued by the accused in discharge of his legally enforceable debt or liability. The point Nos. 2, 3 & 4, have been decided in affirmative and the point No. 5, was determined in negative by holding that the prosecution has failed to prove the existence of legally enforceable debt or liability of the accused towards the complainant. Accordingly, the learned Chief Judicial Magistrate, vide the impugned judgment and order dated 07.08.2019, has acquitted the respondent from the charge of offence punishable under Section 138 of the NIAct, 1881. 8. Mr. K. Tama, learned counsel for the appellant, submits that the learned CJM, Yupia has erred in law in holding that the complainant failed to prove her case against the accused beyond reasonable doubt and that, the accused even without adducing defense evidence could have rebut the presumption as envisaged under Section 139 of the NI Act, 1881. 8. Mr. K. Tama, learned counsel for the appellant, submits that the learned CJM, Yupia has erred in law in holding that the complainant failed to prove her case against the accused beyond reasonable doubt and that, the accused even without adducing defense evidence could have rebut the presumption as envisaged under Section 139 of the NI Act, 1881. The learned CJM, has erred in fact, in holding that the complainant failed to prove that there exists a legally enforceable debt in favour of the complainant whereas, evidence on record is suffice to show that, loan was given to the respondent by the complainant through CW-3 and upon negotiation in between the complainant and respondent through mediator/CW-2, the cheque was drawn and given in favour of complainant by putting signature, amount and name in the said cheque in the presence of CW-2 and CW-3. 9. He submits that the learned CJM, has erred in law in holding that the accused had rebutted the statutory presumption available under Section 139 of NI Act, 1881, without there being any material on record and by presuming that since the relationship between accused and complainant was not cordial and since there is no any written document of transaction therefore, prosecution case is doubtful and accused might not have issued/drawn the cheque in favour of complainant out of legally enforceable debt and liability. Whereas, complainant and in the evidence of CW-3 had deposed that the accused asked her to lend him some money, so she managed to take loan from complainant for accused. He submits that the impugned Judgement & Order dated 07.08.2019, has caused grave prejudice to the appellant and hence an illegal order of acquittal of accused is liable to be set aside and quashed. 10. Mr. K. Tama, learned counsel, while laying emphasis on the paragraph No. 26.2, finally submitted that the statement of the appellant that the cheque was handed over to by the respondent remains unchallenged. The respondent has not denied even in the statement that the cheque was not issued by him. Therefore, the impugned order dated 07.08.2019, acquitting the respondent is not only illegal but being perverse is totally unsustainable in law. 11. In support of his submissions, Mr. K. Tama, learned counsel for the appellant has placed reliance on the following judgments:- I. Uttam Ram vs. Devinder Singh Hudan and Anr. reported in (2019) 10 SCC287. II. Therefore, the impugned order dated 07.08.2019, acquitting the respondent is not only illegal but being perverse is totally unsustainable in law. 11. In support of his submissions, Mr. K. Tama, learned counsel for the appellant has placed reliance on the following judgments:- I. Uttam Ram vs. Devinder Singh Hudan and Anr. reported in (2019) 10 SCC287. II. Col. R.P. Mendiratta vs. Sandeep Choudhary reported in 2015 0 Supreme (Del) 774, in CRL.A No. 1125/2013. 12. On the other hand, Mr. J. Jini, learned Amicus Curiae, submits that this is an appeal against the acquitted and that being so, the view taken by the learned trial Court should not be disturbed except under extraordinary circumstances. There is a presumption of innocence in favour of the accused, which stands reinforce by the impugned order of acquitted passed by the learned trial Court in his favour. The appellant has failed to prove that the cheque No. 756093 dated 11.05.2016, was issued by the accused in the discharge of his legally enforceable debt or liability. The appellant has also failed to prove that the alleged loan amount was given by him to the respondent. Therefore, he submits that no interference is called for to the impugned judgment & order dated 07.08.2019, passed by the learned Chief Judicial Magistrate, Yupia. 13. I have heard and considered the submissions advanced by the learned counsel for the parties and perused the materials on record. 14. In order to appreciate, it is apposite to refer and consider the deposition of the witnesses. 15. The appellant, CW-1, had deposed that on 10.02.2012, the complainant had given a loan amount of Rs. 1,50,000/- (Rupees one lakh fifty thousand) only to the accused person with condition to return the amount with 10% interest per month. The loan money was given to the accused through one Kungyam Yangfo on behalf of the accused. The appellant/complainant has adduced the evidence of Kungyam Yangfo as CW-3. She had deposed that accused asked her to lend him some money. As she did not have any money, she arranged money from Yashi Yangfo, appellant and had given Rs 1,40,000/-to accused. Appellant had deposed that accused issued a Cheque bearing No. 756093 dated 11.05.2016 for Rs 5,00,000/- to the appellant/complainant but the same was dishonoured due to insufficiency of fund. As she did not have any money, she arranged money from Yashi Yangfo, appellant and had given Rs 1,40,000/-to accused. Appellant had deposed that accused issued a Cheque bearing No. 756093 dated 11.05.2016 for Rs 5,00,000/- to the appellant/complainant but the same was dishonoured due to insufficiency of fund. In her cross examination, the appellant/complainant stated that she knows accused person as he is from her village and accused is the Anchal Chairman since 2012. She further deposed that she did not support the accused during election. The accused had earlier quarrel with her husband Chungma Yangfo for money transaction. Appellant further deposed that the loan amount of Rs 1,40,000 was given to the accused through her aunty on her behalf. The cheque i.e. Exhibit-1 was also not issued to her and she does not know who has written her name and amount in the cheque. The appellant has received the cheque from the wife of Niku Yangfo namely Yanang Yangfo. She also stated that one Niku Yangfo, Kungyam Yangfo, Taram Yangfo and Taniyang yangfo were present at the time of transaction. CW-4 had deposed that his wife (CW-3) took loan from Yashi Yangfo and gave it to Ronmir Yangfo and complainant demanded the loan amount from his wife i.e. CW-3. CW-2 had deposed that the accused and his wife came to his house with the cheque and put his signature in the cheque. CW-4 had deposed that the accused took them to the house of Niku Yangfo and drawn a cheque in his presence and handed over the same to Niku Yangfo. 16. The signature in the cheque is proved to be that of the accused, under provision of law, it is presumed that the cheque pertains to a legally enforceable debt or liability. This presumption, however, is of a rebuttable nature and onus is on accused to rebut. 17. While appreciating the evidences, the learned Chief Judicial Magistrate has proceeded to decide if there is any legally enforceable debt in favour of the appellant. The learned trial court held that it is not believable that complainant would lend money to accused when she did not support the accused in his election during 2012 and also when her husband had a fight with accused for money transaction based on the statement in cross examination. The learned trial court held that it is not believable that complainant would lend money to accused when she did not support the accused in his election during 2012 and also when her husband had a fight with accused for money transaction based on the statement in cross examination. As she has not supported the accused in the election in the 2012 that means there was no cordial relationship between the accused person and the complainant and it is not believable that in the same year in 2012, complainant lend money to accused that also without executing any document. Learned CJM has held that CW-2 deposed in his cross examination that accused took him to the house of complainant as accused did not know the house of the complainant. If accused had a close relationship with the complainant then he would certainly have known the house of the complainant. From the statement of complainant and CW-2, it is clear that there was no close and cordial relationship between the complainant and accused person and it is not believable that complainant would lend money to accused through another person without executing any agreement or promissory note. There was no direct transaction between the accused as complainant admitted that loan amount was paid through her aunt to the accused and the cheque was handed over to complainant by one Yanang Yangfo. The complainant has not adduced the evidence of Yanang Yangfo. The complainant had stated in her compliant petition that the loan of Rs. 1,50,000/-was given to the accused with agreed terms and conditions to return the same with 10% interest per month. But the complainant has not produced any agreement/promissory note or she has mentioned the date on which the loan was given. The amount is also mentioned as Rs. 1,40,000/- in her cross examination which creates a doubt on her statement. It is not possible that any prudent man would lend money to anyone not close to him without executing a document. 18. CW-3 deposed that accused asked her to lend him some money. As she was not having any money, she managed the money from the complainant and complainant gave her an amount of Rs. 1,40,000/- which she had handed over to accused Ronmir Yangfo. She further deposed that when the cheque given by accused to complainant got bounced, the complainant demanded the money from her. As she was not having any money, she managed the money from the complainant and complainant gave her an amount of Rs. 1,40,000/- which she had handed over to accused Ronmir Yangfo. She further deposed that when the cheque given by accused to complainant got bounced, the complainant demanded the money from her. In her cross she deposed that cheque was handed to complainant by Niku yangfo. It appears that while giving the loan amount to accused, CW-3 also did not execute any document to prove that she had in fact given the money to accused. 19. CW-2 deposed that there was talk of compromised going on. Accused and his wife came to his house with a cheque and accused put his signature and date in the cheque was also put as per the instruction of the accused but in his cross examination he stated that accused asked complainant to put the date on the cheque and complainant might have put date on the cheque. The evidence of CW-2 is contradictory with the statement of the complainant. Complainant deposed that cheque was handed over to her by the wife of CW-2. The complainant did not depose that accused was present during the time of handing over of the cheque. CW-4 deposed that her wife i.e. CW-3 took loan from complainant for accused and the complainant was demanding the loan money from his wife as accused did not return the amount. So, they sit together to settle the matter. Next day accused took him and his wife to the house of Niku Yangfo and had drawn the cheqhe in his presence. He further deposed that accused told them that he would pay the money within 30th April and if fail, to put the date on the cheque and withdraw the amount. 20. On appreciation of the evidences, this court finds that the loan amount was paid to the accused through one Kungyam Yangfo and the Exhibit-1 (cheque) was handed over to complainant by one Yanam Yangfo. Although, there is no any document to show that respondent/accused had taken loan from the appellant/complainant or by Kungyum Yangfo, oral evidence establishes the same. The issuance of cheque and the signature in the cheque are proved to be of the respondent/accused and under the provisions of law it is presumed that the cheque pertains to a legally enforceable debt or liability. The issuance of cheque and the signature in the cheque are proved to be of the respondent/accused and under the provisions of law it is presumed that the cheque pertains to a legally enforceable debt or liability. This presumption, however, is of a rebuttable nature and onus is on accused to rebut. The respondent/accused in the present case has failed to rebut the same. Even under Section 313 Cr.PC statement, respondent/ accused did not denied his signature on the cheque. Thus, same is not rebutted. 21. Section 138 of the NI Act, 1881 provides which is extracted herein under: “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 provisions of this Act, be punished with imprisonment for [a term which may be extended to two years] or with fine which may extend to twice the amount of the cheque or with both” 22. A negotiable instrument including a cheque carries presumption of consideration in terms of Section 118 (a) and under Section 139 of the NI Act, 1881. Section 118 (a) read as under: “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, drawn for consideration and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration; Section 139 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.” 23. 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.” 23. Bare reading of the above provisions shows that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted. Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the NI Act, 1881 in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt. However, in the event the accused is able to raise a probable defence which creates doubt with regard to the existence of a debt or liability, the presumption would fail. 24. As held in the case of Col. R.P. Mendiratta (Supra), the explanation appended to Section 138 explains the meaning of the expression ‘debt or other liability’ for the purpose of Section 138 of NI Act, 1881. This expression means a legally enforceable debt or other liability. Section 138 treats dishonoured cheque as an offence, if the cheque has been issued in discharge of any debt or other liability. The explanation leaves no manner of doubt that to attract an offence under Section 138, there should be legally enforceable debt or other liability subsisting on the date of drawal of the cheque. In other words, drawal of the cheque in discharge of existing or past adjudicated liability is sine quo non for bringing an offence under Section 138. 25. In the case of Uttam Ram (Supra), the Hon’ble Supreme Court has held which are reproduced herein under:- “20. In other words, drawal of the cheque in discharge of existing or past adjudicated liability is sine quo non for bringing an offence under Section 138. 25. In the case of Uttam Ram (Supra), the Hon’ble Supreme Court has held which are reproduced herein 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. 22. In Kumar Exports, it was held that mere denial of existence of debt will not serve any purpose but accused may adduce evidence to rebut the presumption. This Court held as under: “20. The accused in a trial under Section 138 of the Act has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case the non-existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not insist in every case that the accused should disprove the non-existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non-existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on to the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arising under Sections 118 and 139 of the Act.” 27. 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. 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 defendant-accused cannot be expected to discharge an unduly high standard of proof.” 26. Coming back to present case, the respondent/accused did not deny issuance of cheque and his signature on the cheque in question in favour of the appellant/complainant. The said cheque was presented to the Bank concerned within the period of their validity and were returned unpaid for the reason of the fund being insufficient. All the basic ingredients of Section 138 as also of Sections 118 and 139 are apparent on the face of the record. The Trial Court had failed to take note of these facts and had not drawn the requisite presumption. Therefore, it is required to be presumed that the cheque in question was drawn for consideration and the holder of the cheque i.e. the appellant/complainant received the same in discharge of an existing debt. The onus, therefore, shifts on the respondent/accused to establish a probable defence so as to rebut such a presumption. 27. The Hon’ble Supreme Court has observed on the aspects relating to preponderance of probabilities, that the accused has to bring on record such facts and such circumstances which may lead the Court to conclude either that the consideration did not exist or that its non-existence was so probable that a prudent man would, under the circumstances of the case, act upon the plea that the consideration did not exist. The Hon’ble Supreme Court has , time and again, emphasized that though there may not be sufficient negative evidence which could be brought on record by the accused to discharge his burden, yet mere denial would not fulfil the requirements of rebuttal as envisaged under Section 118 and 139 of the NI Act, 1881. The Hon’ble Supreme Court has , time and again, emphasized that though there may not be sufficient negative evidence which could be brought on record by the accused to discharge his burden, yet mere denial would not fulfil the requirements of rebuttal as envisaged under Section 118 and 139 of the NI Act, 1881. In view of the above, I am of the view that the Trial Court has proceeded on a fundamental error of approach as if the complainant was to prove his case beyond reasonable doubt. Such being the fundamental flaw on the part of the Trial Court, I deem it appropriate to interfere with the judgement and order impugned herein in reversing the judgment of acquittal. 28. Having carefully scrutinised the evidence, this court finds that the respondent/accused has not rebutted the presumption of consideration in issuing the cheque. The statement of the appellant that the cheque was handed over to by the respondent remains unchallenged. The respondent/accused under Section 313 Cr.PC statement has not denied or disputed the issuance of cheque and his signature. Even otherwise, the statement of accused under Section 313 is not substantive evidence of defence of the accused but only an opportunity to the accused to explain the incriminating circumstances appearing in the prosecution case of accused. Therefore, there is no evidence to rebut the presumption that the cheque was issued for consideration. Rather, the issuance of cheque and signature of the respondent/accused are proved. The respondent/accused has failed to lead any evidence to rebut the statutory presumption. Therefore, it is presumed that the cheque in question were drawn for consideration and the holder of the cheques i.e. the appellant received the same in discharge of an existing debt. The onus, thereafter, shifts on the respondent/accused to establish a probable defence so as to rebut such a presumption, which onus has not been discharged by the respondent. Once the cheque is proved to be issued it carries statutory presumption of consideration. Then the onus is on the respondent to disprove the presumption at which the respondent/accused has miserably failed. 29. In my view, the findings recorded by the learned Chief Judicial Magistrate, appears to be on misreading of the statutory provisions more so when the respondent/accused has not led any evidence to rebut the presumption of consideration. Cross-examination on the prosecution witness is not sufficient to rebut the presumption of consideration. 29. In my view, the findings recorded by the learned Chief Judicial Magistrate, appears to be on misreading of the statutory provisions more so when the respondent/accused has not led any evidence to rebut the presumption of consideration. Cross-examination on the prosecution witness is not sufficient to rebut the presumption of consideration. Mere discrepancies in the statement with regard to handing over of cheque would not rebut the statutory presumption which is proved by CW-1, 2 and 3. Thus, the conclusion drawn by the Trial Court to acquit the respondent is unsustainable in law. 30. Consequently, impugned judgement and order dated 07.08.2019, passed by the learned Chief Judicial Magistrate, Yupia, in CR Case No. 38/2016, under Section 138 of the NI Act, 1881, is hereby set aside. The respondent is held guilty of dishonour of cheque for an offence under Section 138 of the Act. The respondent shall pay Rs. 2,50,000/-(Rupees two lakh and fifty thousand) only as fine and a cost of Rs. 50,000/- (Rupees fifty thousand) only within three months from the date of judgement. If the amount of fine and the costs are not paid within three months, the respondent shall undergo imprisonment for a period of 6 (six) months. 31. Criminal Appeal stands allowed and disposed of, accordingly.