The High Court · 2025

Counsel for the Appellant : Sri. Ch Venu Kumar Counsel for the Respondent No. 1 : Sri M V S Prasad Counsel for the Respondent No. 2 : Public Prosecutor The Court delivered the following: THE HONOURABLE SRI JUSTICE K.SURENDER cRTMTNAL AppEAL ffi-.zao oF 2019 JUDGMENT: The appellzmt/complainant preferred this appeal a.ggrieved by the acquittal of the accused, recorded by the Special Maigistrate III, Cyberabad at Itrlalkajgiri, in C.C.No.27 of 2018, clated t.)1.03.2O19, under Section 138 of the Negotiable Instruments Act, 1881.

2. Briefly, the case of the complainant is that the accused is the daughter of her cook namely Ch.Uma (examined as Dt,I/.2). Since they were acqurrinted, the accused approached the c omplainant along with (DW.rl) requesting for hand loan of Rs.10 la!:hs to meet their immediate domestic expenditure i.e., to clear dt:bts of her brother ard also for other purposes. Rs.10 lakhs was given by the complainant on various dates. The accused promiser:l that the amount would br: repaid after sale of the house o.f DW.Iil. However, the amounts vrr're not returned. Then, a Prom issory Note was executed for ttre said amount and after repea.ted re<1uests, the cheque in quest.irrn for Rs.10 lakhs was drawn by the ar.:cused and handed over to the complainant. The said cheque, wherr presented for clearanct), v/as returned unpaid on the ground of ':Lnsufficient 2 funds'. Legal Notice was sent on 2O.7O.2O17, but the same was returned with al endorsement "ii6*Srctt addressee'. Since the accused was living in the very same address and payment was not made pursuant to issuance of notice, complaint was h1ed.

3. The appellant/ complainant examined herself as PW. 1, her husband as PW.2 and two other friends as PWs.3 and 4. The accused examined herself as DW. 1 and her mother as DW.2.

4. The Learned Magistrate, having considered the evidence on record, acquitted the accused on the following grounds i) Ex.P1-Promissory Note was not attested by any of the witnesses and the name of the scribe is also not mentioned. ii) The complainant has filed the IT returns of the husband, which has no relevalce to the facts ofthe case. iii) PW.2, who is the husbald of the complainant entered into the box and stated that he was not aware of the source of amount that was given as hand loan by his wife PW. 1 to the accused. iv) It is not for a prudent man to give such huge amount of Rs.lO lakhs to a cook-cum-domestic help and her daughter who was a private employee working as lab assistant i..i! 3 v) The initial burden on the complainant to prove that the amount covered by th,: cheque was towHi enforceab.le detrt, was not discharged by the complainant. vi) The version 11iven by the accused that the prc,missory hote and the cheque were taken as security in the private chit n.rn by PW. 1 can be believed. Ihe version that the accused was rrembt::r of chit for Rs.75,O0O/- and when the prize amount was pa.id in two instalments. the promissory note and the cheque we::e given as security, is beli<:r'able

5. Learned Oounsel appearing on behalf of complainant would submit that orLc e the signature on the promissory nc te and the cheque is.admit.tr:d, presumption has to be drawn under Siection 139 of the Negotiatrlr: .Instmments Act. Except stating that. they were given towards sr:curity, no evidence was placed on rec:ord by the accused to discharge her burden. The lower Court was crlrried away by the story cre:rt.ed by the accused during the course of tr-ial.

6. Learned Counsel further argued that the Honourabll.e Supreme Court in Rangappa o. Sri Mohanr, held that presumption arises once the signatrrr:e on the cheque is admitted. In the said case, the '1ZOtO1 tt Supremc Court Cases 441 4 Honourable. Supreme Court dea,lt with a situation where the accused has takeir the defence that the cfreqff*ii lost alld he also intimated the Bank about the lost cheque. The Honourable Supreme Court found that the instructions to stop pa5rment and that the cheque was lost, were taken up at a belated stage. Further, the Court held that if the cheque was lost, the question of the cheque bearing the signature and date on the cheque becomes doubtful.

7. The counsel also relied on the Judgment of Honourable Supreme Court in Mallantarapu Kasiuisuesuolrq. Rolo !. Thadikond.a Ramulu firrn and. others2, wherein it is held that: u72. Under Section 118(a) of the Negotiable Instruments Act, the court is obliged to presume, until the contrary is proued., that the promissory note utas made for consideration. It is also a settled position tlwt the initial burden in this regard lies on the defend.ant to proue the non-existence of considerotion bg bnnging on record such facts and circamstonces ulhich tlould lead the court to belieue the non-existence of the consideration either bg direct euidence or by preponderance of probabilities shouing that the existence of consideration utas improbable, doubtful or illegal. In this connection, reference mag be made to a decision of this Court in Bharat Banel & Drum..-Mfg. Co. u. Amin Chand Pagrelal [(1999) 3 SCC 35/ . In para 12 of 'AtR 2OO8 S,rpreme Court 2898 ( 5 the sa-id cl.ecision, this Court obserued as under : (SCC 1'tp. 5O- '-- 51) "12. L'pon considerotion of uaious judgments as noted herein.abou,",, the position of lau-t uthich emerges is that once execution of the promissory note is admitted, tlrc presurnption under Secti.on I 18(a) would oise that it is su.pported. by a consid-erariion. Such a presumption is rebuttable. The defendant .an proue the non-existence of a consideration bg raisin!7 a )u'obable defence. If the defendant is proued to haue discharge,C the initial onus of proof showing that the exi:;tence of considenttion was improbable or doubtfuI or the same u.tas illegal the' onus uould shift to the plaintiff u.tho utill be cbliged to proue it os a motter of fact and upon its failure to proue u-tould disentitle him to the grant of relief on th.e basis of the negotiable instrument. The burden upon the defendant of prouing tL,.e non-eistence of the consideration can be either direct or by binging on record tlrc preponderan ce of proboltilitie:; bg reference to the circumstances upon u-tft,l.ch he relies. In :;ttch an euent, the plaintiff is entitled under t'ana to relg upon at-l the euidence led in tlrc case includirtg that of the plainti_ff cts utell. In case, uhere the defend.ant fo.ils to dischorge the initial onus of proof bg shouing the non exi-stence <';J the consideration, the plaintiff tuould inuaiablg be held entitte d to the benefit of presumption aising under Sectiott 118(a) in his fauour. The court mag not insist upon the defendant to disproue the eistence of ansideratipn bg leadinq direct euidence as the existence of negatiue euide nce is neither po:;:,ible nor contemploted and euen if led, is to b<: seen with a aloubt. TLrc bare denial of the passing o.,f the 5 consideration appo.rentlA does not appear to be ang defence. Something which is probabLe ha.rlo_be brought on record for getting the benefit of shifiins the onus of prouing to the plaintiff. To disproue tLrc presumption, tle d.efend.ani has to bing on record such facts ond. circumstances upon consideration. of ulhich th.e court may either belieue that th-e 'consideration did not eist or its non-existence u)as so probable that a prudent man u.tould, under tlrc ciranmstances of the case, slnll oct upon the plea that it did not eist."

8. Learned Counsel also relied on the Judgment of Honourable Supreme court in Bharat Barrel and Drum Manufacturing Compang a. Amift Chond Pagrelals, wherein the Honourable Supreme Court held that execution of a promissory note would draw a presumption under Section 118 of the Negotiable Instruments Act, that it was executed as collateral security. The Honourable Supreme Court further held that claim made by the plaintiff has to be allowed if the rebuttal evidence of the defendant was not believable.

9. In the present case, the following facts are admitted i) The accused is the daughter of the cook-cum-maid servant in the house of PW.1. r AR 1999 Supre-" Court 1008 :.15r" .,:i: 7 ii) The husband ,PW.2) of PW.1 stated that he does not l,:now about the source of inr:ome of PW. 1 and as to how she generated Rs.10 lakhs to be paid 1o the accused iii) PWs.3 and 4- were examined during the course of trizrl and their names were not mentioned at the earliest point of time that PW.1 had taken loans liom PWs.3 and 4 to give it to the a.ccuser.l

10. The accused admitted signature on the promissorg note and also the chequ,:. Once the signatures are admitted arLd also the handing over of t.he cheque and promissory note, presumlttion has to be drawn under Section 139 of the Negotiable Instrrrments Act.

11. The burden that shifts on to the accused under Sec:tion 139 of the Negotiable hrstruments Act, cal be discharged by pre.oonderalce of probability. Once the accused makes out a case rvhich j.s probable, believable and also appears to be true in the facts of a case, such defence can be erc,cepted by the Court.

12. The defen<;e of the accused is that.PW. 1 was running a private chit and that th': prize amount for a chit of Rs.75,O00/- vras given in two instalmentr;. Towards security, a blank signed cheque and signed promisscry note were given. Admittedly, the prom lssory note 8 does not contain the signatures of aly witnesses. The accused was introduced to PW.1 by her mother'ffi2. -bW.2 was working as maid servant-cum-cook in the house of pW. 1. It is highly improbable that PW. 1 who did not show any proof of income would take loans from PWs.3..ald 4 to be given to the accused. No reason is given as to why such huge amount of Rs:10 lakhs was given to the daughter of her maid servant.

13. The version of PW.l is that she believed that the house of the accused would be sold and her loans would be repaid. It is not stated by the appellant as to where the house of accused is situated ald whether it was their own house.

74. In the facts of the present case, the version given by DWs.1 and 2 appears to be more probable. Once the accused is successful in proving her case by preponderance of probability, it discharges the burden that has been shifted on her under Section 139 of the Negotiable Instruments Act. 9

15. In Ravi Sharma v. State (Govetnment of NCT of Delhi| and anothero, the Hon'ble Supreme Couileld that while deaLing with an appeal against ar:quittal, the appellate court has to consirler whether the trial Court's view can be termed as a possibl€ one, :particularly when evidence on record. has been analysed. The reasort. is that an order of acquitta.. adds up to the presumption of innocen,::e in favour of the accused. l'hus, the appellate court has to be relati'zely slow in reversing the order of the trial court rendering acqrrittal.

16. In Ghureg Lal a. State of Uttar Pradesh, s 1.he Hon'ble Supreme Court after referring to several Judgments regarding the settled principle s of law and the powers of appe1lat,:: Court in reversing the order of acquittal, held at para 70, as followl; "70. ln tle light of the aboue, the High Court ancl other appellate Courts sh"oulcl ,"olloto the u.tell settled pinciples crystallized by r:umber of Judgments if it is going to ouemtle or othenoise disturtt the tritl court's acquittol: f I

1. The appellate court moA onlg ouemtle or otherutbe di:;turb the tial court's acL1uittal i,f it has "uery substantial and compelling reasons" for doing so. A numbe' of instances aise in tuhich the appelLote court utould haue 'uery :;ttbstantial ond compelling reasons" to cliscard the tial court's dectsior . "Very substantial and compelling reasons" eisr tuhen: i) 'I'trc tizt court's conclusion uLith regard to the facts ii patpablg u)roftg: 4 (2022) 8 Supreme Court (lases 536 120081 10 s,rp."-" CotLrt Cases 450 5 10 ii) The tiat court's decision utas based on an erroneous uieu-t of Iaut; iii) The tial court's judgment is lifftfi to'result in "graue miscarriage of justice"; iu) The entire approach of the trial coui in dealing tttith the euidence was patentlg illegal; 'u) fh; court's judgment utas manikstlg unjust and unreasonable ; ui) The tnot court has ignored the euidence or mbread the moterial lr;Ls ignired. mateial doatments like dging euidenle or declorations/ report of the batlistic Ex.Pert, etc. consideration o the findings of the tial court' uii)This lisl is intended to be illustratiue, not exhaustiue' 2. The appellate coutt must ahaags giue proper uteight and be reached-- one that leods to High Coutts/ appellate courts must

3. If tttto ,eoionabl" ii"-s "on acquitta[, the other to mnuiction ntle in fauour of the accused." -tLlE

17. There are no compelling reasons to reverse the well reasoned Judgment of the trial Court

18. Accordingly, Criminal Appeal is dismissed' //TRUE COPY// Sd/- M. RAMANA KRISHNA DEPUTY REGISTRAR OFFIGER To,

2. 3 4. DUgh The Special Magistrate -lll, Cyberabad at Malkajgiri. (With records, if anly) One CC to Sri. Ch Venu KumarAdvocate [OPUC] One CC to Sri M V S Prasad Advocate [OPUC] Two CD Copies % HIGH COURT DATED:10/021?.025 ? 4 I i JUDGMENT GRLA.No.730 of 2019 IB E Sl-q; o () .) r$ 2 4 ilqit ?025 t o€sn r DISMISSING THE CRIMINAL APPEAL ,{& €