P.Benedict Fernandez v. Rajiv Bhatia, Proprietor

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 06.02.2008CORAM:THE HON'BLEMR.JUSTICE P.R.SHIVAKUMARCRL.A.NO.1429 OF 2002P.Benedict Fernandez ..Appellant Vs.Rajiv Bhatia, Proprietor ..Respondent Criminal Appeal filed against the order of acquittal dated7.8.2002 in C.C.No.4889 of 1999 on the file of the 8th MetropolitanMagistrate, George, Town, Chennai. For Appellant: Mr.T.Arulraj For Respondent: Mr.A.Arasu Ganesan--- J U D G M E N TThis Criminal appeal has been preferred against the Judgment ofthe learned VIII Metropolitan Magistrate, George Town, Chennai dated7.8.2002 made in C.C.No.4889 of 1999. The said case was taken onfile, based on the complaint of the appellant herein filed under Section 200 Cr..P.C. alleging that the respondent herein hadcommitted an offence punishable under Section 138 of the NegotiableInstruments Act(hereinafter referred as the Act).2. The following are brief averments found in the complaint ofthe appellant herein filed before the learned VIII MetropolitanMagistrate, Chennai : The respondent/accused issued a cheque bearing No.964196 dated15.4.1999 for a sum of Rs.2,60,000/- drawn on Indian Bank, KolathurBranch, Chennai towards repayment of part of the loan availed by therespondent/accused from the appellant/complainant.

When the saidcheque was presented for realisation through theappellant's/complainant's bankers, viz.,State Bank of Mysore, MainBranch, Chennai on 19.4.1999, the same was returned dishonoured withan endorsement "funds insufficient" on 21.4.1999. The said fact ofdishonour of cheque was brought to the notice of therespondent/accused and a demand for payment was made by a lawyer's https://hcservices.ecourts.gov.in/hcservices/ notice dated 4.5.1999. Inspite of the fact that the said notice wasreceived by the respondent/accused on 5.5.1999, he did not issue anyreply; nor did he make payment towards dishonour of cheque within 15days from the date of receipt of the said statutory notice. Hence theoffence punishable under Section 138 of the Act became complete onthe expiry of fifteen days from the date on which therespondent/accused received statutory notice.3. The said complaint was taken on file, after recording swornstatement of the appellant/complainant as C.C.No.4889 of 1999 andprocess were issued to the respondent/accused.

On his appearance, hewas questioned regarding the allegations and he pleaded not guilty. Pursuant to the said plea of not guilty made by therespondent/accused, the learned Metropolitan Magistrate concernedconducted trial in which two witnesses were examined and sixdocuments were marked on the side of the prosecution(complainant). Onbeing questioned under Section 313 Cr.P.C., regarding theincriminating circumstances found in the evidence adduced on the sideof the prosecution(Complainant), the respondent/accused stated thatthose evidence were false and once again maintained that he was notguilty of the offence alleged in the complaint. Therespondent/accused neither examined any witness on his side normarked any document. Excepting the answers given to the questions putto him in the examination of the accused under Section 313 Cr.P.C. tothe effect that the evidence adduced on the side the prosecution(Complainant) were not true, no other specific plea of defence hasbeen put forward either orally during such examination or by filing awritten statement.

Learned Metropolitan Magistrate concerned, afterconsidering the evidence in the light of the arguments advanced onboth sides, came to the conclusion that the offence alleged to havebeen committed by the respondent/accused had not been proved beyondreasonable doubt. Based on the said finding, the Court belowpronounced a judgment acquitting the respondent/accused in respectof the above said offence. Therefore, the appellant/complainant hascome forward with this present appeal challenging the correctness andlegality of the judgment of acquittal pronounced by the learnedMetropolitan Magistrate.4. Advancing arguments on behalf of the appellant/complainant, Mr. T.Arulraj, learned counsel for the appellant contended that thefinding of the Court below to the effect that the charge against theaccused has not been proved beyond reasonable doubt is erroneous, unsustainable and liable to be reversed by this Court in exercise ofits appellate powers.

Learned counsel for the appellant furthercontended that disregarding the provisions contained in Section 118Aand 139 of Negotiable Instruments Act, the learned MetropolitanMagistrate proceeded on the erroneous assumption that initial burdenof proof of the existence of a debt or other liability was on theappellant/complainant; that the learned Metropolitan Magistrate hadfailed to draw the presumption under the above said sections, in the https://hcservices.ecourts.gov.in/hcservices/ absence of any evidence on the side of the respondent/accusedsufficient enough to rebut the said presumption, the learnedMetropolitan Magistrate had unnecessarily embarked upon a scrutiny asto the sufficiency of the evidence adduced on the side of theappellant/complainant to prove the existence of debt or otherliability; that the learned Metropolitan Magistrate also committed anerror for arriving at a conclusion that the signature found inEx.P.5, Postal acknowledgment Card was not that of therespondent/accused; that the said conclusion was not at all warrantedin the light of the fact that no such defence plea was taken by therespondent/accused either during his examination under Section 313(1)or during the cross-examination of the witnesses examined on the sideof the appellant/complainant and that viewed from any angle, thejudgment of the learned Metropolitan Magistrate holding therespondent/accused not guilty of the offence with which he stoodcharged was in fact discrepant, legally unsustainable and liable tobe set aside and reversed.5.

On the other hand, Mr..Arasu Ganesan, present counsel for therespondent/accused argued that there was no defect or infirmity inthe conclusion arrived at by the learned Metropolitan Magistrate andthat stronger ground ought to have been made out for interfering withthe judgment of acquittal pronounced by the Court below and that inthis case, no stronger ground has been made by theappellant/complainant to warrant interference with the judgment ofthe Court below.6. This Court paid its anxious considerations to the respectivesubmissions made by the learned counsel appearing on either side. Thematerials available on record were also perused.7. It is true that there is a general presumption in allcriminal cases regarding the innocence of the accused . Whenever thestatute prescribes that a presumption shall be drawn under givencircumstances against the existence of certain fact in favour of theprosecution, such presumptions are only procedural and will not be inconflict with the general presumption of innocence of the accused.

However, the said general presumption is not eroded by presumptiondescribed under Section 118A and 139 of the Negotiable InstrumentsAct. Section 118-A of the Act says that there shall be a presumptionuntil the contrary is proved that every negotiable instrument wasmade or drawn for consideration and that every such instrument whenit has been accepted ,indorsed, negotiated or transferred, wasaccepted indorsed negotiated or transferred for consideration. Section 139 of the Negotiable Instruments Act says that it shall bepresumed, unless the contrary is proved, that the holder of a chequereceived the cheque, of the nature referred to in Section 138 of the Negotiable Instruments Act, for the discharge, in whole or in part, of any debt or other liability. The term "cheque of the nature"referred to in Section 138 of the Negotiable Instruments Act https://hcservices.ecourts.gov.in/hcservices/ appearing in Section 139 of Negotiable Instruments Act means anycheque drawn by a person on an account maintained by him with abanker for payment of any amount of money to another person from outof that account for the discharge, in whole or in part, of any debtor other liability, which is returned unpaid by the bank eitherbecause the amount of money standing to the credit of that account isinsufficient to honour the cheque or that it exceeds the amountarranged to be paid from that account by an agreement made with thatbank.

A conjoint reading of the three Sections will show thatwhenever the drawal of the cheque is either admitted or proved, thepresumption under Section 118A of the Negotiable Instruments Act willcome into picture to say that the cheque is supported byconsideration. The presumption under Section 139 of the NegotiableInstruments Act is explanatory and supplementary to the presumptionunder Section 118A of the Act to show that the cheque was received bythe holder for the discharge of debt or other liability. Therefore, this Court has to accept the contention of the learned counsel forthe appellant that in a case wherein the drawal of the cheque isadmitted or proved, then there shall be a presumption regarding thepurpose for which the cheque was issued and the burden shall be castupon the accused to rebut such presumption. In case of such rebuttal, the burden shall be again shifted on the complainant to prove theexistence of debt or other liability for discharge of which thecheque was issued.

Of course, there are a number of decisions to theeffect that the evidence need to be adduced by the accused forrebutting such presumption shall not be comparable with the evidencerequired to be adduced on the side of the prosecution in so far asthe prosecution is expected to prove the prosecution case beyondreasonable doubt whereas the defence case can be proved bypreponderence of probabilities.8. Keeping in mind the above said proposition of law, the factsof the case can be analysed. It is not in dispute that the chequeleaf is that of the respondent/accused and the signature foundtherein is also that of the respondent/accused. When such is thecase, it shall be the duty of the respondent/accused to explain as tohow the cheque happened to fall into the hands of theappellant/complainant. According to the submissions made by thelearned counsel for the respondent/accused, the cheque was not oneissued in favour of the appellant/complainant and that the same wasissued as a blank cheque in favour of a third party, which has beenfilled up in the name of the appellant/complainant.

When the drawerof the cheque admits that he issued the cheque with the signatureleaving the other parts of the cheque blank, it tantamounts togiving an authority to the person to whom the same was issued to fillup the blanks to make it a fulfledged Negotiable Instrument. Apartfrom the said fact that it is an admission on the part of therespondent/accused that the cheque was one pertaining to his accountand that the cheque bears his signature, there is no evidencewhatsoever forthcoming from the respondent/accused to substantiate https://hcservices.ecourts.gov.in/hcservices/ his contention that the cheque was issued as a blank cheque toanother person. Further more, absolutely there is no evidencecapable of rebutting the presumption drawn under Section 139 of the Negotiable Istruments Act to the effect that the cheque was issuedfor the discharge of a debt or other liability in whole or in part.

Necessary averments have been made in the complaint of theappellant/complainant and evidence has also been adduced to thateffect. Even then there is no evidence adduced on the side of theaccused to show that there as no debt or other liability at all indischarge of which the cheque would have been issued, the complainanthas not chosen to lead evidence narrating how he arranged funds forthe loan made to the accused.9. Learned Metropolitan Magistrate seems to have been proceededon an assumption that a fact has got to be proved only by documentaryevidence and oral evidence is of no use. The observation made by thelearned Metropolitan Magistrate to the effect that the complainanthad not even produced a scrap of paper to show that he had a cash ofRs.70,000/- with him and Rs.1,96,000/- was the amount he got from the Foreman of the Chit under a chit transaction after making payment ofthe entire subscription.

When there is a clear assertion through PW1who is none other than the complainant and his evidence having notbeen discredited either by eliciting points contrary to the standduring the cross examination or by adducing contra evidence, theobservation made by the learned Metropolitan Magistrate is quiteunwarranted. Above all, there was no occasion for the learnedMetropolitan magistrate to embark upon a rowing enquiry as to whetherexistence of debt or other liability has been proved by theappellant/complainant. As pointed supra, there is no evidence adducedon the side of the appellant/accused sufficient enough to make itappear that the cheque could have been issued to a third party andhence the cheque could not have been issued for the discharge of anydebt or other liability towards the appellant/complainant. Wheneverthe accused in a criminal prosecution for an offence punishable under Section 138 of the Negotiable Instruments Act comes forward with aplea that the cheque issued in favour of another person has beenmisused by the complainant for prosecuting him, either he should haveexamined the said person in whose favour the cheque, according tohim, was issued or adduced evidence to that effect, otherwise hecould have elicited answers from the witnesses examined on the sideof the prosecution which will make his case probable.

In this case, after going through the evidence of PW1, this Court is of theconsidered view that no such answer has been elicited from theprosecution witnesses by the learned counsel for the accused whoappeared in the lower court. The additional fact that goes againstthe respondent/accused in this case is that the accused has not comeforward to say who was that the third party in whose favour thecheque was issued. Under such circumstances, this Court comes to theconclusion that the respondent/accused has not made out even a primafacie case that the cheque was not issued in discharge of debt or https://hcservices.ecourts.gov.in/hcservices/ other liability. Therefore, without any hesitation this Court holdsthat the respondent/accused has not rebutted the presumption raisedunder Section 139 of Negotiable Instruments Act, regarding thepurpose for which the cheque was issued. That alone is enough toconvict the accused for the said offence, provided the otherconditions are proved.

10. It is a fact not in dispute that the cheque bears date15.4.1999 and it was presented for encashment during its validityperiod. It was presented on 20.4.1999 and returned with anendorsement "funds not sufficient". Ex.P1 is the dishonoured cheque. Ex.Pl2 is the dishonour slip. The banker's memo indicating thedishonour to the appellant/complainant is Ex.P.3. It is also obviousthat within 15 days from the date of receipt of intimation ofdishonour, the statutory notice was issued. Ex.P4 is the copy of thenotice. Ex.P.5 is the postal acknowledgment card evidencing thereceipt of the said notice by the respondent/accused. Nowhere in thecross-examination of PW1, it was suggested that the said notice wasnot at all received by the respondent/accused and that the signaturefound in Ex.P.5 was not that of the respondent/accused. This Courtwonders how the learned Metropolitan Magistrate took the job uponhimself to test the genuineness of such a document which was not atall disputed by the party in the trial.

The finding of the learnedMagistrate to the effect that the signature found in the postalacknowledgment card marked as Ex.P.5 was not proved to be that of theaccused is perverse. Therefore, the said finding of the learnedMagistrate being discrepant has got to to be set aside and reversed. 11. It is also not in dispute that the amount covered by thecheque was not settled by the respondent/accused within the timeprescribed by sub-clause (c) of Section 138 of Negotiable InstrumentsAct. Therefore, this Court comes to the conclusion that the learnedMagistrate has committed a blatant error in arriving at a conclusionthat the offence with which the respondent/accused stood charged wasnot proved beyond reasonable doubt. The said finding of the Courtbelow is no doubt erroneous and discrepant and this Court has to setit right by setting aside the said finding and reverse the judgmentof the acquittal pronounced by the Courts below.

Considering the facts and circumstances of the case , this Court feels that it is a fit case in which imposition of a sentenceof one month Simple Imprisonment shall be appropriate. In addition tothat, there shall be a direction to the accused under Section 357(3)and (4) of the Code of Criminal Procedure to pay a sum ofRs.2,60,000/- (cheque amount) as compensation to the complainant. This Court grants' two months time from this date to the respondentherein to pay the said amount by way of a demand draft drawin infavour of the appellant and payable at Chennai. In default thereof, the respondent shall suffer simple imprisonment for three months.

With the above observation, the Criminal Appeal isdisposed of.sd/-Asst. Registrar/true copy/Sub Asst. RegistrarVJYToVIII Metropolitan Magistrate, George Town, Chennai+1cc to Mr. A.Arasu Ganesan, SR.No.5970+1CC to Mr.T.Arulraj, SR.No.5905 CRL.A.NO.1429 OF 2002mrd[co]gkg/25.2