Ramakanth v. V.A.Rahim

IN THE HIGH COURT OF JUDICATURE AT MADRASDATE : 05.02.2007CORAM:THE HONOURABLE MR.JUSTICE A.C.ARUMUGAPERUMAL ADITYANCrl.A.No.447 of 2000Ramakanth .. Appellant/Complainant vs. V.A.Rahim .. Respondent/Accused Prayer: This appeal has been preferred against the Judgment dated06.09.1999, in S.T.R.No.113 of 1999 on the file of the Sub-DivisionalJudicial Magistrate, Mahe.For Appellant : Mr.C.Rajan For Respondents : Mr.A.V.Ilango JUDGMENTThis appeal has been preferred against the judgment in S.T.R.No.113of 1999 on the file of the Sub-Divisional Judicial Magistrate, Mahe. Thecomplainant is the appellant herein.2. The short facts of the private complaint preferred under Section200 of Cr.P.C, for the offence punishable under Section 138 and 142 of theNegotiable Instruments Act, are as follows:-The accused borrowed a sum of Rs.50,000/-(Rupees Fifty Thousandonly) from the complainant on 14.09.1998 at Mahe and in discharge of thesaid amount the accused issued a cheque for the amount dated 6.1.1999bearing No.064083 drawn of Indian Bank, Tellicherry Branch. When thecheque was presented on 06.01.1999, the cheque was dishonored by theIndian Bank, Mahe, on account of insufficiency of fund in the account ofthe accused as per memo dated 8.1.1999. The complainant issued a legalnotice on 13.1.1999 through his counsel giving 15 days time from the dateof return of the cheque, calling upon him to pay the cheque amount and theaccused received the notice on 14.01.1999. However he did not pay hisdebt and he did not send reply. The accused has committed an offenceunder Section 138 of the NI Act. The complaint was filed within one monthfrom the expiry of 15 days grace period to pay the cheque amount. Hence,the complaint.3. The complaint was taken on file by the learned Sub-DivisionalJudicial Magistrate and after the accused appearing on sommons, copies https://hcservices.ecourts.gov.in/hcservices/ under Section 207 of Cr.P.C were furnished and when the offence wasexplained to the accused he pleaded not guilty.4. The complainant was examined as P.W.1. According to thecomplainant, he knows the accused for nearly two years since as a patienthe took treatment under him and that later they became friends and on14.9.1998 the accused borrowed a sum of Rs.50,000/- in cash at hisresidence at Valavil, Mahe, and that since both of them were very goodfriends he has not obtained any record from the accused to evidence thepassing of consideration of Rs.50,000/-. The accused has promised to paythe principal without any interest within two months. On 6.1.1999, theaccused gave a cheque for Rs.50,000/-. Ex.P.1 is the Cheque drawn by theaccused in favour of the complainant. On 7.1.1999 when the cheque waspresented into the Indian Bank, Mahe branch for realization but the samewas bounced on 8.1.1999 on the ground that there was no funds in theaccount of the drawer. Ex.P.2 is the memo issued by the Indian Bank,Telicherry in this regard. On 09.01.1999, the complainant received adebit slip, Ex.P.3. Ex.P.4 is the notice dated 13.01.1999. Ex.P.5 isthe postal acknowledgment for the accused having received the original ofEx.P.4. The accused has not chosen to send any replay nor made anypayment. 4. P.W.2 is a Manager of Indian Bank, Mahe Branch, who would deposeto the effect that P.W.1 is maintaining a savings bank account with IndianBank, Mahe Branch and that Ex.P.1 was presented in the bank for collectionand Ex.P.3 was issued by his branch and a sum of Rs.128/- was deducted forhandling charges of Ex.P.1.5. P.W.3 is the Assistant Manager of Indian Bank, Tellicherry Branchand that Ex.P.1 was supplied by their branch to the accused whichcontained his signature Ex.P.4 and that Ex.P.1 was received by theirbranch for collection, but the same was not honoured for want of funds andthe returned slip for the dishonouring of Ex.P.1 is Ex.P.2 and that Ex.P.2contains the signature of Manager Thiru.Ashok and that the accountNo.10161 is maintained by the accused with their bank which is stilloperative and Ex.C.1 is the photo stat copy and attested copy of thesavings Bank ledger for the said account and Ex.C.2 is the relevantportion under Ex.C.1 by which the accused bas cash balance of Rs.3068/-when Ex.P.1 was received. 6. When the incriminating circumstances were put to the accused hedenied his complicity with the crime, but would putforward a defence thathe had borrowed a sum of Rs.1,00,000/- from the complainant and towardsthe said debt he has repaid interest to the tune of Rs.84,000/- in 14installments at Rs.6,000/- per installment. Further he has also paidRs.97,000/- towards the principal and that Ex.P.1 was not given for anyexisting debt. The accused has not adduced neither oral or documentaryevidence on his side. After going through the available documents, thelearned Sub-Divisional Judicial Magistrate, Mahe has come to theconclusion that the complainant has not proved the guilt of the accused https://hcservices.ecourts.gov.in/hcservices/ under Section1 38 of NI Act and accordingly he dismissed the complaint.Aggrieved by the findings of the learned trial Judge, the complainant haspreferred this appeal.7. Now the point for determination in this appeal is whether theoffence under Section 138 of NI Act has been made out against the accusedto warrant conviction under the said provision of law?8.The point:-8(a) Heard Mr.Mr.C.Rajan, learned counsel for the appellant andMr.A.V.Rajan, learned counsel for the respondent and considered theirrival submissions.8(b) The learned counsel appearing for the appellant relying on2001(3) CTC 243 (Hiten P.Dalal Vs. Bratindranath Banerjee), contended thatunder Section 118 of NI Act when the accused admits his signature in acheque (Negotiable Instrument) then the presumption will follow that itwas made for consideration and that under Section 138 of NI Act if acheque issued by a person in discharge of part or whole of liability isreturned dishonoured for want of funds drawer of such cheque shall bedeemed to have committed offence under Section 138 of NI Act and thatunder Section 139 of NI Act the presumption is to be drawn, unlesscontrary is proved that holder of cheque received cheque for discharge ofin whole or in part of any debt or other liability. The exact observationin the above said dictum runs as follows:-"The appellant's submission that the cheques were not drawnfor the 'discharge in whole or in part of any debt r otherliability' is answered by the third presumption available to theBank under Section 139 of the Negotiable Instruments Act. Thissection provides that "it shall be presumed, unless the contraryis proved, that the holder of a cheque received the cheque, ofthe nature referred to in Section 138 for the discharge, inwhole or in part, of any debt or other liability". The effectof these presumptions is to place the evidential burden on theappellant of proving that the cheque was not received by theBank towards the discharge of any liability.Because bothSections 138 and 139 require that the Court "shall presume" theliability of the drawer of the cheques for the amounts for whichthe cheques are drawn, as noted in State of Madras Vs.A.Vaidyanathan Iyer AIR 1958 SC 61, it is obligatory on theCourt to raise this presumption in every case where the factualbasis for the raising of the presumption had been established."It introduces an exception to the general rule as to the burdenof proof in criminal cases and shifts the onus on the accused"(ibid). Such a presumption is a presumption of law, asdistinguished from a presumption of fact which describesprovisions by which the Court 'may presume" a certain state ofaffairs, Presumptions are rules of evidence and do not conflictwith the presumption of innocence, because by the letter allthat is meant is that the prosecution is obliged to prove thecase against the accused beyond reasonable doubt. The https://hcservices.ecourts.gov.in/hcservices/ obligation on the prosecution may be discharged with the help ofpresumptions of law or fact unless the accused adduces evidenceshowing the reasonable possibility of the non-existence of thepresumed fact."Relying on the above dictum the learned counsel for the appellant wouldcontend that the learned trial Judge has come to an erroneous conclusionthat there was no subsisting debt and that to discharge the same Ex.A.1was drawn by the accused. In the above dictum four cheques were issued bythe accused drawn on the Andhra Bank in favour of the Standard CharteredBank for the sums of Rs.27 crores, Rs.145 crores, Rs.17 crores andRs.19,95,75,000/- respectively. Accordingly to the Bank the cheques wereissued for payment of loss suffered by the Bank arising out oftransactions kin securities entered into by the Bank through or at theinstance of the appellant during the statutory period. So it is clearfrom the facts of the above said case the cheques were issued for paymentof loss suffered by the Bank arising of the transactions kin securitiesentered into by the Bank. When those cheques were presented in the Bankall the four cheques were returned dishonored by the Andhra Bank with theremark "Not arranged for". Only under such circumstance, the above dictumhas been laid, whereas in the case on hand even the notice sent underEx.P.4 is silent with regard to the subsistence of the debt for whichEx.P.1-cheque was drawn by the accused in favour of the complainant.Except the word "discharge of your debt", there is absolutely no avermentin Ex.P.4 giving details about the subsistence of the debt to whichEx.P.1-cheque dated 6.1.1999 for Rs.50,000/- was drawn.8(c) Section 138 of the Negotiable instrument Act runs as follows:-"Where any cheque drawn by a person on an account maintainedby him with a banker for payment of any amount of money toanother person from out of that account for the discharge,in whole or in part, of any debt or other liability, isreturned by the bank unpaid, either because of the amount ofmoney standing to the credit of that account is insufficientto honour the cheque or that it exceeds the amount arrangedto be paid from that account by an agreement made with thatbank, such person shall be deemed to have committed anoffence and shall without prejudice to any other provisionsof this Act, be punished with imprisonment for a term whichmay be extended to two years, or with fine which may extendto twice the amount of the cheque, or with both:PROVIDED that nothing contained in this section shallapply unless:-(a) the cheque has been presented to the bank within aperiod of six months from the date on which it is drawn orwithin the period of its validity, whichever is earlier.(b) the payee or the holder in due course of thecheque, as the case may be, makes a demand for the paymentof the said amount of money by giving a notice, in writing,to the drawer of the cheque, within thirty days of thereceipt of information by him from the bank regarding thereturn of the cheque as unpaid, and https://hcservices.ecourts.gov.in/hcservices/ (c) the drawer of such cheque fails to make thepayment of the said amount of money to the payee or, as thecase may be, to the holder in due course of the cheque,within fifteen days of the receipt of the said notice.Explanation:-For the purpose of this section, "debt or otherliability" means a legally enforceable debt or otherliability.So the explanation to Section 138 of NI Act clearly indicates that "debtor other liability" means a legally enforceable debt or other liability.The learned counsel for the appellant would advance an argument that alegally enforceable debt means that it should not be for an illegal orimmoral purposes. I am afraid that a legally enforceable debt does notmean only illegal or immoral in nature but also that it must be supportedby some evidence to show that the debt was in subsistence on the date ofdrawal of Ex.P.1-cheque. It is pertinent to note the evidence of P.W.1 inthis regard. The complainant, P.W.1, would despose that on 14.9.1998, theaccused borrowed a sum of Rs.50,000/- in hundred rupees denomination inhis house at Valavil, Mahe, but he would admit that he has not obtainedany record for parting with the said amount and that the accused gave thecheque on 6.1.1999 for Rs.50,000/-. There is no explanation forthcomingfrom the complainant to the effect why he has not obtained the cheque forRs.50,000/- on 14.9.1998 itself ie. on the date of borrowal and why thecheque-Ex.P.1 was obtained three months after the lending of money. Onlyin his evidence P.W.1 will depose that a sum Rs.50,000/- was borrowed bythe accused on 14.9.1998. Even this date of borrowal was not mentioned inEx.P.4-notice.8(d) The other decision relied on by the learned counselappearing for the appellant viz. 2002 SCC (Cri) 121 (M.M.T.C.Ltd. Andanother Vs. Medchl Chemicals and Pharma (P Ltd., and another), also willnot be applicable to the present facts of the case because only on thebasis of a memorandum of understainding dated 1.6.1994 later altered as19.9.1994 two cheques dated 31.10.1994 and 10.11.1994 respectively weredrawn by the accused in favour of the complainant, which were onpresentation dishonoured on the ground of payment stopped by drawer. Soin the above said dictum there was a document viz. Memorandum ofunderstanding entered into between the parties, to show the existence ofdebt on the date of drawal of the cheque.8(e) In other decision reported in 2001 AI R SCW 4344 (K.N.BeenaVs. Muniyappan) relied on by the learned counsel for the appellant, thecomplainant therein has proved that only in respect of a subsisting debt acheque for Rs.63,720/- was drawn by the accused in favour of thecomplainant, wherein it has been held that once the complainant has provedbout the subsistence of a debt then the burden of proof shifts on theaccused to prove by way of cogent evidence that there was no debt orliability. But in the case on hand there is absolutely no evidence onrecord to show that there was subsisting debt on the date of drawal ofEx.P.1-cheque by the accused. So, the above said dictum will not beapplicable to the present facts of the case.8(f) Per contra, the learned counsel appearing for therespondent/accused relying on 2006 (3) SCC (Cri) 30 (M.S.Narayana Menon @ https://hcservices.ecourts.gov.in/hcservices/ Mani Vs. State of Kerala and another), and contended that the presumptionunder Section 118 and 139 of NI Act as to the issuance of the saidinstruments for consideration and in discharge of debt is rebutablepresumption and that initial burden of proof is on accused to rebut thesaid presumptions by raising a probable defence and if he discharges thesaid burden, the onus thereafter shifts on to the complainant to prove hiscase. In the said case a cheque was drawn by the accused in connectionwith share transactions. When the cheque was presented it wasdishonoured. But the complainant has failed to discharge his initialburden by producing his statutory books of accounts in relation to thesaid transaction in question to show that there was a subsisting debt onthe date of drawal of cheque. The relevant observation in the above saiddicutum is as follows:-"The standard of proof evidently is preponderance ofprobabilities. Inference of preponderance of probabilities canbe drawn not only from the materials on record but also byreference to the circumstances upon which he relies. Presumption drawn under a statute has only an evidentiaryvalue. Presumptions are raised in terms of the Evidence Act.Presumption drawn in respect of one fact may be an evidence evenfor the purpose of drawing presumption under another.The second respondent was a member of a stock exchange.The transactions in relation to the stock exchange are regulatedby the statutes and statutory rules. If in terms of theprovisions of a statute, a member of a stock exchange isrequired to maintain books of accounts in a particular manner,he would be required to do so, as non-compliance with themandatory provisions of the Rules may entail punishment. It is not in dispute that transactions comprising purchases and sales of shares by investors is a matter ofconfidence. Both parties would have to rely upon one another.For the said purpose, the courts of law may also take judicialnotice of the practice prevailing in such business. The learnedappellate Judge rightly did so.The definite case of the second respondent was that thecheque dated 17.8.1992 was issued by the appellant in dischargeof his debt. The said liability by way of debt arose in terms ofthe transactions. For proving the said transactions, the secondrespondent filed books of accounts. The books of accountsmaintained by the second respondent were found to be notreflecting the correct state of affairs."Under such circumstances, it was held by the Honourable ApexCourt that the accused cannot be convicted under Section 138 ofNI Act.The same principle has been reiterated in 1996(9) SCC 225 (Ramesh BabulaDoshi Vs. State of Gujarat), 2004(10) SCC 692 (Main Pal and another Vs.State of Haryana and others), 1983 (3) SCC 629 (Ramji Surjya Padvi andAnother Vs. State of Maharashtra) and 2002(6) SCC 321 (Pritam Nath and https://hcservices.ecourts.gov.in/hcservices/ others Vs. State of Punjab), even though those cases have arisen underIndian Penal Code. Under such circumstances, I find no reason to interferewith the well considered judgment of the trial Court, which does notsuffer from any illegality or infirmity. Point is answered accordingly.9. In fine, the appeal is dismissed confirming the Judgment inSTR.No.113/1999 on the file of the Sub-Divisional Judicial Magistrate,Mahe, Pondicherry.ssvSd/-Asst.Registrar/true copy/Sub Asst.RegistrarTo, 1. The Sub-Divisional Judicial Magistrate, Mahe. Pondicherry.2. -do- Thro' The Chief Judicial Magistrate, Pondicherry.+1 cc to Mr.A.U.ILANGO, Advocate Sr.No.7386.+1 cc to Mr.C.Rajan, Advocate Sr.No.7032.TEJ(CO)dcp/14.2.07Crl.A.No.447 of 2000