S.C. BAJAJ v. STATE ANR

Per contra, the learned counsel for Respondent No. 2 submitted that the appellant has not come with clean hands and has concealed the copy of the Forensic Examination and Comparison Report dated

04.07.2019, which declares the signatures on the cheque to be imitated and forged.

15. He submitted that Respondent No. 2 duly rebutted the presumption under Section 139 of the NI Act. The appellant has not only failed to place the documentary evidence to show the source of the money advanced as loan, he has never brought his father and/or Malkait Singh to prove that the sum was arranged from them, and therefore he has failed to discharge the burden of proof which got CRL.L.P. 637/2019 & CRL.L.P. 638/2019 shifted upon him. [Ref: S. Murugan v. M.K. Karunagaran : 2023 SCC OnLine SC 2041 and Rajaram v. Maruthachalam : (2023) 16 SCC 125]

16. He submitted that the appellant has relied on Ex. CW1/DW1, which is an acknowledgement receipt produced by the appellant before the learned MM, to show that Respondent No. 2 had taken the loan not only from him but from other persons as well, however, a bare perusal of the said document reveals that the same has been signed by a person named Satwinder Kumar and not the present accused/ Respondent No. 2. In this regard, he submitted that none of the other persons mentioned in the said document have ever been brought to the witness box, to prove that they had advanced a loan in favor of Respondent No. 2.

17. He submitted that the appellant has no financial capacity to advance the said loan of ₹9,00,000/- to Respondent No. 2 as he has himself admitted during cross examination that his business turnover was only ₹13,00,000/- in the year 2016. He further contended that the appellant has filed the complaint only with an intention to cheat and cause wrongful loss to Respondent No. 2.

18. He submitted that the appellant by filing the application under Section 391 of the CrPC is attempting to re-open the entire trial by leading evidence belatedly, at this stage, when it is not the case of the appellant that the said documents were not in existence at an earlier stage. CRL.L.P. 637/2019 & CRL.L.P. 638/2019

19. Heard arguments and perused the material on record as well as the impugned judgement.

20. It is trite law that a Court while considering the challenge to an order of acquittal, ought to only interfere if the Court finds that the appreciation of evidence is perverse. [Ref: Rajaram v. Maruthachalam (supra)]

21. The present case, however, relates to acquittal of an accused in a complaint under Sections 138 read with 142 of the NI Act. The restriction on the power of the Appellate Court in regard to other offence does not apply with the same vigour in the offence under provisions of the NI Act which entails presumption against the accused. The Hon’ble Apex Court in the case of Rohitbhai Jivanlal Patel v. State of Gujarat : (2019) 18 SCC 106 had observed as under: “12. According to the learned counsel for the appellant-accused, the impugned judgment is contrary to the principles laid down by this Court in Arulvelu [Arulvelu v. State, (2009) 10 SCC 206 : (2010) 1 SCC (Cri) 288] because the High Court has set aside the judgment of the trial court without pointing out any perversity therein. The said case of Arulvelu [Arulvelu v. State, (2009) 10 SCC 206 : (2010) 1 SCC (Cri) 288] related to the offences under Sections 304-B and 498-A IPC. Therein, on the scope of the powers of the appellate court in an appeal against acquittal, this Court observed as follows : (SCC p. 221, para 36) “36. Careful scrutiny of all these judgments leads to the definite conclusion that the appellate court should be very slow in setting aside a judgment of acquittal particularly in a case where two views are possible. The trial court judgment cannot be set aside because the appellate court's view is more probable. The appellate court would not be justified in setting aside the trial court judgment unless it arrives at a clear finding on marshalling the entire evidence on record that the judgment of the trial court is either perverse or wholly unsustainable in law.” CRL.L.P. 637/2019 & CRL.L.P. 638/2019 The principles aforesaid are not of much debate. In other words, ordinarily, the appellate court will not be upsetting the judgment of acquittal, if the view taken by the trial court is one of the possible views of matter and unless the appellate court arrives at a clear finding that the judgment of the trial court is perverse i.e. not supported by evidence on record or contrary to what is regarded as normal or reasonable; or is wholly unsustainable in law. Such general restrictions are essentially to remind the appellate court that an accused is presumed to be innocent unless proved guilty beyond reasonable doubt and a judgment of acquittal further strengthens such presumption in favour of the accused. However, such restrictions need to be visualised in the context of the particular matter before the appellate court and the nature of inquiry therein. The same rule with same rigour cannot be applied in a matter relating to the offence under Section 138 of the NI Act, particularly where a presumption is drawn that the holder has received the cheque for the discharge, wholly or in part, of any debt or liability. Of course, the accused is entitled to bring on record the relevant material to rebut such presumption and to show that preponderance of probabilities are in favour of his defence but while examining if the accused has brought about a probable defence so as to rebut the presumption, the appellate court is certainly entitled to examine the evidence on record in order to find if preponderance indeed leans in favour of the accused.” (emphasis supplied)

22. It is also well settled that once the execution of the cheque is admitted, the presumption under Section 118 of the NI Act that the cheque in question was drawn for consideration and the presumption under Section 139 of the NI Act that the holder of the cheque received the said cheque in discharge of a legally enforceable debt or liability are raised against the accused. [Ref. Rangappa v. Sri Mohan:(2010) 11 SCC 441]

23. The Hon’ble Apex Court in Rajesh Jain v. Ajay Singh : (2023) 10 SCC 148, while discussing the appropriate approach in dealing CRL.L.P. 637/2019 & CRL.L.P. 638/2019 with presumption under Section 139 of the NI Act, observed the following : “54. …. Once the presumption under Section 139 was given effect to, the courts ought to have proceeded on the premise that the cheque was, indeed, issued in discharge of a debt/liability. The entire focus would then necessarily have to shift on the case set up by the accused, since the activation of the presumption has the effect of shifting the evidential burden on the accused. The nature of inquiry would then be to see whether the accused has discharged his onus of rebutting the presumption. If he fails to do so, the court can straightaway proceed to convict him, subject to satisfaction of the other ingredients of Section 138. If the court finds that the evidential burden placed on the accused has been discharged, the complainant would be expected to prove the said fact independently, without taking aid of the presumption. The court would then take an overall view based on the evidence on record and decide accordingly.

55. At the stage when the courts concluded that the signature had been admitted, the court ought to have inquired into either of the two questions (depending on the method in which the accused has chosen to rebut the presumption) : Has the accused led any defence evidence to prove and conclusively establish that there existed no debt/liability at the time of issuance of cheque? In the absence of rebuttal evidence being led the inquiry would entail : Has the accused proved the non- existence of debt/liability by a preponderance of probabilities by referring to the “particular circumstances of the case”? xxx xxx xxx

57. Einstein had famously said: “If I had an hour to solve a problem, I'd spend 55 minutes thinking about the problem and 5 minutes thinking about solutions.” Exaggerated as it may sound, he is believed to have suggested that quality of is directly proportionate to one's ability to identify the problem. A well- defined problem often contains its own solution within it. 58. Drawing from Einstein's quote, if the issue had been properly framed after careful thought and application of judicial mind, and the onus correctly fixed, perhaps, the outcome at trial would have been very different and this litigation might not have travelled all the way up to this Court. the solution one generates CRL.L.P. 637/2019 & CRL.L.P. 638/2019 xxx xxx xxx

61. The fundamental error in the approach lies in the fact that the High Court has questioned the want of evidence on the part of the complainant in order to support his allegation of having extended loan to the accused, when it ought to have instead concerned itself with the case set up by the accused and whether he had discharged his evidential burden by proving that there existed no debt/liability at the time of issuance of cheque.” (emphasis supplied)

24. From a perusal of the impugned judgment, it is seen that the learned MM acquitted the accused/ Respondent No.2 of the offence under Section 138 of the NI Act primarily on two grounds: a. Firstly, the learned MM considered the contention of the accused/ Respondent No. 2, that the signed cheques in question had been stolen from his office drawer and observed that the defence of the accused remained consistent throughout the trial. b. Secondly, the learned MM noted that the complainant/ appellant had neither proved his financial capacity nor produced the statement of bank account of Malkait Singh, from whom he had allegedly arranged ₹5,00,000/-, and the sale deed executed by his father from where he has allegedly arranged ₹4,00,000/-, to prove the source of loan advanced to the accused.

25. Since the appellant failed to provide any cogent documentary evidence in corroboration of his testimony, the learned MM held that the defence raised by the accused is a probable one to rebut the presumption under Section 139 of the NI Act and that the complainant CRL.L.P. 637/2019 & CRL.L.P. 638/2019 had failed to discharge the onus, which shifted upon him, to show the existence of a legal financial liability.

26. In the opinion of this Court, the acquittal of Respondent No. 2 in the present case is unsustainable, inter alia for the following reasons:

27. At the outset, since the execution and signatures on the cheques are not disputed, presumption under Section 138 and 118 of the NI Act is raised against the accused and in favour of the complainant. It is pertinent to note that the presumptions under Section 118 and 139 of the NI Act are not absolute and may be controverted by the accused. In doing so, the accused ought to raise only a probable defence on a preponderance of probabilities to show that there existed no debt in the manner so pleaded by the complainant in his complaint/ demand notice or the evidence. Once the accused successfully raises a probable defence to the satisfaction of the Court, his burden is discharged, and the presumption ‘disappears.’ The burden then shifts upon the complainant, who then has to prove the existence of such debt as a matter of fact. The Hon’ble Apex Court in Rajesh Jain v. Ajay Singh (supra), in this regard has observed as under: “41. In order to rebut the presumption and prove to the contrary, it is open to the accused to raise a probable defence wherein the existence of a legally enforceable debt or liability can be contested. The words ‘until the contrary is proved’ occurring in Section 139 do not mean that accused must necessarily prove the negative that the instrument is not issued in discharge of any debt/liability but the accused has the option to ask the Court to consider the non-existence of debt/liability so probable that a prudent man ought, under the circumstances of the case, to act upon the supposition that debt/liability did not CRL.L.P. 637/2019 & CRL.L.P. 638/2019