✦ High Court of India

Sujay Kumar Chatterjee v. 1. State of Jharkhand 2. Md. Zakir Khan

Case Details

1 IN THE HIGH COURT OF JHARKHAND AT RANCHI Criminal Revision No. 506 of 2010 Sujay Kumar Chatterjee ..… Petitioner Versus 1. State of Jharkhand 2. Md. Zakir Khan With Criminal Revision No. 592 of 2010 ….. Opp. Parties Md. Zakir Khan ..… Petitioner Versus 1. State of Jharkhand 2. Sujay Kumar Chatterjee CORAM: HON'BLE MR. JUSTICE SANJAY PRASAD ….. Opp. Parties --------- For the Petitioners For the State For the O.P. No. 2 : --------- :Ms. Niteshwari Kumari, Advocate A.C. to Mr. Rajiv Kumar, Advocate (In Cr.Revision No. 592 of 2010) Mr. Rajan Raj, Advocate (In Cr.Revision No. 506 of 2010) :Mr. Arup Kumar Dey, A.P.P. :Ms. Niteshwari Kumari, Advocate A.C. to Mr.Rajiv Kumar, Advocate (In Cr.Revision No. 506 of 2010) Mr. Rajan Raj, Advocate (Cr.Revision 592 of 2010) --------- JUDGMENT Reserved on 06.7.2023 Pronounced on 17.10.2023 Both the Criminal Revision Applications, i.e. Criminal Revision No. 506 of 2010 and Criminal Revision No. 592 of 2010 have been filed on behalf of the petitioners challenging the judgment dated 29.4.2010 passed by the then learned Sessions Judge, Dhanbad in Criminal Appeal 259 of 2009, by which then learned Sessions Judge has partly allowed the Criminal Appeal by upholding the conviction and sentence of the petitioner under Section 138 of the N.I. Act and to 2 undergo S.I. for six months, but, the learned Sessions Judge has reduced the compensation amount of Rs. 4.60 lakh to Rs. 2.85 lakh. Although Shri Debashish Mohapatra, then learned Judicial Magistrate, Ist class, Dhanbad has convicted the petitioner of Criminal Revision No. 506 of 2020 for the offence under Section 138 of the N.I. Act and sentenced him to undergo S.I. for six months and has also directed him to pay compensation of Rs. 4.60 lakh. 2. Criminal Revision No. 506 of 2010 has been filed on behalf of the petitioner Sujay Kr. Chatterjee challenging the impugned judgments and order of sentence and direction to pay compensation amount passed by the learned Courts below. 3. However, Criminal Revision No. 592 of 2010 has been filed on behalf of the complainant- petitioner-Md. Zakir Khan by challenging part of the judgment of the learned Appellate Court for enhancing the amount of compensation to the extent of Rs. 4.60 lakh, which has been reduced to Rs.2.85 lakh by the learned Sessions Judge, Dhanbad vide judgment dated 29.4.2010 passed in Criminal Appeal No. 259 of 2000. 4. The petitioner Md. Zakir Khan of Criminal Revision No. 592 of 2010 i.e. the complainant had filed C.P. Case No. 1516 of 2005 giving rise to T.R.No. 720 of 2009 stating therein that he is the proprietor of Chhotanagpur Times News and C.N. Associates having its head office at Saraidhela and Housing Colony respectively within the jurisdiction of Dhanbad District. It is stated that Sujay Kumar Chatterjee was an employee under the complainant and the Complainant 3 had advanced him a sum of Rs. 1.75 Lakh in December, 2004 for purchasing a Digital Camera. Subsequently also in February, 2005, the complainant again gave a friendly loan of Rs.2.85 lacs to the O.P. No. 2- Sujay Kr. Chatterjee on the eve of marriage ceremony of his sister, who had assured that he will repay the loan amount after marriage of his sister. Subsequently, when the complainant demanded his money back, then the O.P. No.2 issued two cheques dated 12.8.2005 and 20.8.2005 of IDBI bank in favour of the complainant worth Rs. 1.75 lacs and 2.85 lacs respectively. When the cheque of Rs. 2.85 lacs was presented by the complainant for encashment, it was dishonoured on 24.08.2005. The cheque of Rs.1.75 lacs was also presented for encashment, which was dishonoured on the same date. Legal notice was served to the O.P. No.2 on 06.9.2005. The legal notice was returned unserved with endorsement that nobody was found in the house. It is also alleged that on 26.9.2005, the O.P. No.2 abused the complainant and told that his money will not be paid and he has managed the non-service of legal notice to him. 5. Heard Shri Rajan Raj, learned counsel for the petitioner in Criminal Revision No. 506 of 2010 and for the O.P. No. 2 in Criminal Revision No. 592 of 2010, Shri A.K. Dey, learned A.P.P. in both the cases and Ms. Niteshwari Kumari, learned Counsel appearing for O.P. No. 2 in Criminal Revision 506 of 2010 and for the petitioner in Criminal Revision No. 592 of 2010. 4 6. Submission of Petitioner in Criminal Revision No. 506 of 2010 & O.P. No. 2 in Criminal Revision No. 592 of 2010: It is submitted by the learned counsel for the petitioner that the impugned judgments and order passed by the learned courts below are illegal, arbitrary and not sustainable in the eye of law. It is submitted that both the learned Courts below failed to consider the material contradictions in the evidence of complainant’s witnesses and documents filed on behalf of the complainant-O.P. No.2. It is submitted that the petitioner is innocent and has been falsely implicated by O.P. No. 2- Complainant. The petitioner has never issued the cheques in question which have been produced by Complainant-O.P. No. 2 during course of evidence before the learned Courts below. It is submitted that during trial, the petitioner had filed a petition u/s 247 read with Section 243 Cr.P.C. with a prayer for sending the document to the expert for opinion mentioning specifically that handwriting is differing on body and signature part of the cheques has not been taken into consideration by the learned Sessions Judge and also by the Judicial Magistrate, Ist Class, Dhanbad. It is further submitted that the learned trial court should have taken into consideration that even during his statement recorded u/s 313 Cr.P.C., the petitioner had specifically stated that he never issued those cheques. 5 It is further submitted that it was specific defence on the part of the petitioner that he never issued those cheques and hence the cheques were required to be sent to the expert for verification and opinion, but it

Facts

was not considered by the learned Trial Court as well as learned Appellate Court. It is further submitted that while reducing the amount of compensation, the learned appellate court should have also taken into consideration that the petitioner was not required to pay even the amount of Rs. 2.85 lakh and he should have been acquitted. It is further submitted that the learned Courts below committed injustice in convicting the petitioner when there is clear difference of handwriting on the body and signature part of the cheque. It is submitted that the learned Courts below failed to take into consideration that the notice- i.e. Ext-4 has not been proved in accordance with law. It is submitted that although cheques were presented for encashment on 24.8.2005 which were dishonoured, but, legal notice was sent by the complainant-O.P. No. 2 to the petitioner on 06.9.2005. However, said legal notice has returned unserved on 16.09.2005 as house of the petitioner was found locked and hence, legal notice was not served upon the petitioner. It is submitted that the cheque of Rs. 1,75,000/- was issued by the O.P. No.2 to the petitioner for buying a Digital Camera, however, this allegation was set aside by the learned appellate court. It is submitted that petitioner had taken some advance from O.P. No. 2-Complainat at the time 6 of marriage of his sister and for which he has submitted a blank cheque to the O.P. No.2 and the said cheque have been misused and filled by the Complainant- O.P. No. 2 for a sum of Rs. 2.85 lakh. It is submitted that petitioner had already left the job of the complainant-O.P. No. 2 on the date of filing the complainant case. It is submitted that evidence of C.W. 1 and C.W. 2 are not reliable as C.W. 1 is an employee of the complainant whereas C.W. 2 is Manager of the Bank who has said nothing against this petitioner. It is submitted that even the evidence of C.W.3 is not reliable as he has instituted a false and concocted case. It is submitted that the complainant-O.P. No. 2 was not in a position to give a loan of Rs. 1.75 lakh and Rs. 2.85 Lakh, total Rs.4.60 Lakh to the petitioner on the alleged dated of advancing friendly loan as he was not in a financial position to give such a huge loan. It is submitted that Exhibit- B reveals that the net value of the complainant was Rs.3,61,350/- only in the year 2003. It is submitted that Ext. B, Ext. C and Ext. D respectively are I.T.R. returns of the complainant-O.P. No.2 for the year 2003, 2004 and 2005 respectively showing the returns as Rs. 361,350/-, Rs. 475,337/- and Rs.5,77,507/- respectively. It is submitted that provisions of Section 139 of N.I. Act is rebuttable in nature. It is submitted that no transaction of giving loan of Rs. 1.75 lakh and Rs. 2.85 lakh was made in presence of any witness and which has been admitted even by the O.P. No. 2 during his cross-examination. Learned counsel for the 7 petitioner in support of his submission has placed reliance upon the following judgments: (i) Binod Kumar Lall Versus State of Jharkhand & Anr. reported in 2008 Cr.L.J. 3353 Jhr HC, (ii) John K. Abraham v. Simon C. Abraham, reported in 2014 (1) East C.C. 366 : (2014) 2 SCC 236, (iii) Sanjay Mishra v. Kanishka Kapoor @ Nikki reported in 2009 Supreme (Bombay) 257,

Legal Reasoning

Para 16:- This Court in M.S. Narayana Menon case [M.S. Narayana Menon v. State of Kerala, (2006) 6 SCC 39 : (2006) 3 SCC (Cri) 30] held that what is needed is to raise a probable defence, for which it is not necessary for the accused to disprove the existence of consideration by way of direct evidence and even the evidence adduced on behalf of the complainant can be relied upon. Dealing with standard of proof, the following was observed in para 32 : (SCC p. 51) “32. The standard of proof evidently is preponderance of probabilities. Inference of preponderance of probabilities can be drawn not only from the materials on record but also by reference to the circumstances upon which he relies.” 33 Para17:- In KrishnaJanardhan Bhat v. Dattatraya G. Hegde [Krishna Janardhan Bhat v. Dattatraya G. Hegde, (2008) 4 SCC 54 : (2008) 2 SCC (Cri) 166] , this Court held that an accused for discharging the burden of proof placed upon him under a statute need not examine himself. He may discharge his burden on the basis of the materials already brought on record. The following was laid down in para 32 : (SCC p. 62) “32. An accused for discharging the burden of proof placed upon him under a statute need not examine himself. He may discharge his burden on the basis of the materials already brought on record. An accused has a constitutional right to maintain silence. Standard of proof on the part of an accused and that of the prosecution in a criminal case is different.” Para 22:- Elaborating further, this Court in Rangappa case [Rangappa v. Sri Mohan, (2010) 11 SCC 441 : (2010) 4 SCC (Civ) 477 : (2011) 1 SCC (Cri) 184] held that Section 139 of the Act is an example of a reverse onus and the test of proportionality should guide the construction and interpretation of reverse onus clauses on the defendant-accused and the defendant-accused cannot be expected to discharge an unduly high standard of proof. In paras 27 and 28, the following was laid down 34 : (Rangappa case [Rangappa v. Sri Mohan, (2010) 11 SCC 441 : (2010) 4 SCC (Civ) 477 : (2011) 1 SCC (Cri) 184] , SCC pp. 453-54) “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. 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. 28. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of “preponderance 35 of probabilities”. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own.” Para 25:- We having noticed the ratio laid down by this Court in the above cases on Sections 118(a) and 139, we now summarise the principles enumerated by this Court in following manner: Para 25.5:- It is not necessary for the accused to come in the witness box to support his defence. Para 28:- There is one more aspect of the matter which also needs to be noticed. In the complaint filed by the complainant as well as in examination-in-chief the complainant has not mentioned as to on which date, the loan of Rs 6 lakhs was given to the accused. It was during cross-examination, he gave the date as November 2011. Under Section 118(b), a presumption shall be made as to date that every negotiable instrument was made or drawn on such date. Admittedly, the cheque is dated 27-2-2012, there is not even a suggestion by the complainant that a post- 36 dated cheque was given to him in November 2011 bearing the date 27-2-2012. Giving of a cheque on 27-2-2012, which was deposited on 1-3-2012 is not compatible with the case of the complainant when we read the complaint submitted by the complainant especially para 1 of the complaint, which is extracted as below: “1. The accused is a very good friend of the complainant. The accused requested the complainant a hand loan to meet out urgent and family necessary a sum of Rs 6,00,000 (Rupees Six lakhs) and on account of long standing friendship and knowing the difficulties, which is being faced by the accused the complainant agreed to lent hand loan to meet out the financial difficulties of the accused and accordingly the complainant lent hand loan Rs 6,00,000 (Rupees Six lakhs) dated 27-2-2012 in favour of the complainant stating that on its presentation it will be honoured. But to the surprise of the complainant on presentation of the same for collection through his bank the cheque was returned by the bank with an endorsement “Funds Insufficient” on 1-3-2012.” Para 29:- Thus, there is a contradiction in what was initially stated by the complainant in the complaint and in his examination-in- chief regarding date on which loan was given on one side and what was said in cross- 37 examination in other side, which has not been satisfactorily explained. The High Court was unduly influenced by the fact that the accused did not reply to the notice denying the execution of cheque or legal liability. Even before the trial court, appellant-accused has not denied his signature on the cheque.” 45. It has been held by Hon’ble the Supreme Court in the case of Rajaram Through L.Rs. Versus Maruthachalam (Since Deceased) Through L.Rs. reported in 2023 SCC OnLine SC 48 of Para No. 26, 27, 28, 29, 30, 39 & 41 as under:- Para 26:- This Court in the case of Baslingappa v. Mudibasappa (supra) has summarized the principles on Sections 118(a) and 139 of the N.I. Act. It will be relevant to reproduce the same. Para 27:- It can thus be seen that this Court has held that once the execution of cheque is admitted, Section 139 of the N.I. Act mandates a presumption that the cheque was for the discharge of any debt or other liability. It has however been held that the presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities. It has further been held that to rebut the presumption, it is open for the accused to rely on evidence led by him or the accused can also rely on the 38 materials submitted by the complainant in order to raise a probable defence. It has been held that inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely. Para 28:- In the said case, i.e. Baslingappa v. Mudibasappa (supra), the learned Trial Court, after considering the evidence and material on record, held that the accused had raised a probable defence regarding the financial capacity of the complainant. The accused was, therefore, acquitted. Aggrieved thereby, the complainant preferred an appeal before the High Court. The High Court reversed the same and convicted the accused. This Court found that unless the High Court came to a finding that the finding of the learned Trial Court regarding financial capacity of the complainant was perverse, it was not permissible for the High Court to interfere with the same. Para 29:- In the present case, the accused appellant had examined Mr. Sarsaiyyn, Income Tax Officer, Ward No. 18, Circle (II)(5), who produced certified copies of the Income Tax Returns of the complainant for the financial year 1995-1996, 1996-1997, 1997- 1998 and 1998-1999. The certified copies of the Income Tax Returns established that the 39 complainant had not declared that he had lent Rs. 3 lakh to the accused. It further established that the agricultural income also was not declared in the Income Tax Returns. Para 30:- The learned Trial Court further found that from the income which was shown in the Income Tax Return, which was duly exhibited, it was clear that the complainant(s) did not have financial capacity to lend money as alleged. Para 39:- In the present case, we are of the considered opinion that the defence raised by the appellant satisfies the standard of “preponderance of probability”. Para 41:- In that view of the matter, we are further of the considered view that the High Court was not justified in reversing the order of acquittal of the appellant.” 46. It has been held by the Hon’ble Supreme Court and the Jharkhand High Court on various occasions that payment of friendly loan without giving any specific date or dates to the accused petitioner in absence of any witness led to suspicious transaction. It has been held by the Hon’ble Supreme Court in the case of Vijay versus Laxman & Anr. reported in 2013 (3) East Cr C 298 (SC) , Para 3 as under:- “Para 3:-…………………………………………….. ………………………………………………………… 40 The case of the accused thus, admitted the issue and handing over of the cheque in favour of the complainant but denied that the same was towards repayment of any loan. The High Court has rightly accepted the version given by the accused-respondent herein. We say so far reasons more than one. In the first place the story of the complainant that he advanced a loan to the respondent-accused is unsupported by any material leave alone any documentary evidence that any such loan transaction had ever taken place. So much so, the complainant does not even indicate the date on which the loan was demanded and advanced. It is blissfully silent about these aspects thereby making the entire story suspect……………………………………………… …………………………………………………………. It is trite that the Courts can take into consideration the circumstances appearing in the evidence to determine whether the presumption should be held to be sufficiently rebutted. The legal position regarding the standard of proof required for rebutting a presumption is fairly well settled by a long line of decisions of this Court. Para 10:- ……………………………… …………………………………………………. Non-examination of the father of the complainant who was said to be present outside the Court hall on the date the 41 complainant’s statement was recorded also assumes importance. It gives rise to an inference that the non-examination was a deliberate attempt of the prosecution to keep him away from the Court for otherwise he would have to accept that the accused was actually supplying milk to him and that the accused was given the price of the milk in advance as per the trade practice in acknowledgement and by way of security for which amount the accused had issued a cheque in question.” 47. It has been held by Hon’ble the Supreme Court in the case of Sujit Biswas v. State of Assam reported in (2013) 12 SCC 406, Para 16, 17 and 20 as under: “Para 16:- In M.G. Agarwal v. State of Maharashtra [AIR 1963 SC 200 : (1963) 1 Cri LJ 235] this Court held, that if the circumstances proved in a case are consistent either with the innocence of the accused, or with his guilt, then the accused is entitled to the benefit of doubt. When it is held that a certain fact has been proved, then the question that arises is whether such a fact leads to the inference of guilt on the part of the accused person or not, and in dealing with this aspect of the problem, benefit of doubt must be given to the accused, and a final inference of guilt against him must be drawn only if the proved fact is wholly inconsistent 42 with the innocence of the accused, and is entirely consistent with his guilt. Para 17:- Similarly, in Sharad Birdhichand Sarda [Sharad Birdhichand Sarda v. State of Maharashtra, (1984) 4 SCC 116 : 1984 SCC (Cri) 487 : AIR 1984 SC 1622] this Court held as under : (SCC pp. 127-28) Graver the crime, greater should be the standard of proof. An accused may appear to be guilty on the basis of suspicion but that cannot amount to legal proof. When on the evidence two possibilities are available or open, one which goes in the favour of the prosecution and the other benefits an accused, the accused is undoubtedly entitled to the benefit of doubt. The principle has special relevance where the guilt or the accused is sought to be established by circumstantial evidence. Para 20:- It is a settled legal proposition that in a criminal trial, the purpose of examining the accused person under Section 313 CrPC, is to meet the requirement of the principles of natural justice i.e. audi alteram partem. This means that the accused may be asked to furnish some explanation as regards the incriminating circumstances associated with him, and the court must take note of such explanation. In a case of circumstantial evidence, the same is essential to decide whether or not the chain of circumstances is complete. No matter how weak the evidence of 43 the prosecution may be, it is the duty of the court to examine the accused, and to seek his explanation as regards the incriminating material that has surfaced against him. The circumstances which are not put to the accused in his examination under Section 313 CrPC, cannot be used against him and must be excluded from consideration. The said statement cannot be treated as evidence within the meaning of Section 3 of the Evidence Act, as the accused cannot be cross- examined with reference to such statement.” 48. It has been held by a Division Bench of this Court in the case of Somnath Biswas, son of R.S. Biswas Versus The State of Jharkhand reported in 2018 (3) JCR 185, Paragraph No. 6 as under:- “Para 6:- We have considered the submissions of the learned counsel for the petitioner and perused the impugned judgment of acquittal by the appellate court as also the judgment of the learned trial court. Learned appellate court has been guided by the fact that the endorsement by the Bank clearly indicated that the cheque was not valid. Why the cheque was not valid or valid had to be shown by the complainant through his evidence and/or by examination of the banker, which he failed to do. The complainant also failed to state clearly the date and time of the friendly loan or any documentary evidence of such friendly loan having been advanced to the accused. In those circumstances, we are of the considered 44 view that the complainant-petitioner has failed to make out any case for grant of leave to appeal.” 49. The Supreme Court has also held that the issuance of blank cheque with signature only by the accused may not go in favour of the holder of the cheque, i.e. the complainant. 50. It has been held by a Division Bench of this Court in the case of Shiv Pujan Prasad @ Sheo Pujan Prasad Versus The State of Jharkhand & Anr. reported in 2018 (4) East Cr C 55 (Jhr), Paragraph No.s 9 and 10 as under:- “Para 9:- As noted above, the complainant had on his part stated that the cheque was dishonoured due to “insufficient fund” but the endorsement of the return memo had showed that the payment was stopped by the drawer. The complainant in his cross-examination had also deposed that he had deposited money in share of different companies and accused had issued the said cheque for the same. He had admitted that he had not filed any document in the Court regarding the share. Amount, name and date had not been written by the accused on the cheque and it was only his signature which was proved as Ext.1. Para 10:- We have considered the submissions of the learned counsel for the petitioner and perused the impugned judgment. Consideration of the relevant pleadings as mentioned in the complaint together with the material evidence adduced on behalf of the parties goes to show that 45 the learned trial Court had sufficient reason to hold that the complainant had not been successful in bringing home the charge under Section 138 of the Negotiable Instrument Act against the accused beyond shadow of all reasonable doubts. We therefore, do not find merit in this petition to allow special leave to appeal for assailing the impugned judgment before the Appellate Court.” 51. In view of the judgments of the Hon’ble Supreme Court and law quoted above as well as the discussions made above, it is evident that the learned Courts below have failed to consider the matter in its right perspective, although the petitioner has raised probable defence that the complainant had no financial capacity to pay the said loan amount of Rs. 4.60 lakh to the petitioner. 52. Under the circumstances, judgment dated 29.04.2010, passed by then learned Sessions Judge, Dhanbad in Criminal Appeal No. 259 of 2009 and judgment of conviction & Order of sentence dated 20.7.2009 passed in C.P. Case No. 1516 of 2015, T.R. No. 720 of 2009 by Sri Debasis Mohapatra, then J.M., Ist Clas, Dhanbad, are set aside in the interest of justice and the petitioner Sujay Kr. Chatterjee of Criminal Revision No. 506 of 2010 is acquitted for the offence under Section 138 of the N.I. Act and he is not required to pay any compensation/fine to the Complainant ( i.e. the O.P. No. 2 in Criminal Revision No. 506 of 2010 & Petitioner in Criminal Revision No. 592 of 2010) and petitioner in Criminal Revision No. 506 of 2010, namely Sujay Kumar 46 Chatterjee is discharged from the liabilities of his bail bonds. 53. Thus, Criminal Revision No. 506 of 2010 is allowed, whereas Criminal Revision No. 592 of 2010 is hereby dismissed. 54. Let a copy of this judgment be communicated to the learned Court below forthwith along with Lower Court Records. s.m. (Sanjay Prasad, J.)

Arguments

(iv) Somnath Biswas, son of Shri R.S. Biswas Versus The State of Jharkhand reported in 2018 (3) JCR 185, (v) Sujit Biswas v. State of Assam reported in (2013) 3 East Criminal Cases 2981 (SC) : (2013) 12 SCC 406, (vi) Subodh S. Salaskar v. Jayprakash M. Shah reported in 2008 (13) SCC 689, (vii) M/s Rahul Builders Versus M/s Arihant Fertilizers & Chemical & Anr. reported in 2008 (1) East CrC 6(S.C.) (viii) Rajaram Through L.Rs. Versus Maruthachalam (Since Deceased) Through L.Rs. reported in 2023 SCC OnLine SC 48, (ix) Basalingappa v. Mudibasappa reported in (2019) 5 Supreme Court Cases 418 It is submitted that in view of the above, this Criminal Revision may be allowed and the petitioner may be acquitted. 7. On the other hand, learned A.P.P. has opposed and submitted that the Criminal Revision 8 Applications are devoid of merit. It is submitted that no illegality has been committed by the learned Courts below while passing the impugned judgments and order of sentence and the learned appellate court has correctly reduced the compensation from Rs. 4.60 Lakh to Rs. 2.85 Lakh. It is submitted that the complainant and his witnesses, examined as C.W.1, C.W.2 and C.W.3, have fully supported the case. It is submitted that the documents marked Ext. B, Ext. C and Ext.D have been fully considered by the learned Courts below. Thus, this Criminal Revision are devoid of merit. 8. Submission of petitioner in Criminal Revision No. 592 of 2010 and O.P. No. 2 in Criminal Revision No. 506 of 2010. It is submitted by the learned counsel that the petitioner is aggrieved by the judgment of the learned Appellate Court below by which the Appellate Court below has reduced the amount of compensation from Rs.4.60 lakh to Rs.2.85 lakh. It is submitted that the judgment of the learned appellate court is against the evidence and material on record as such the same is not sustainable in the eye of law. It is submitted that the learned Appellate Court failed to consider that the Owner of an institution is competent to lodge prosecution under section 138 of the Negotiable Instrument Act and the prosecution launched by the Owner is valid. It is submitted that the learned Appellate Court failed to take notice that the Complainant-O.P. No. 2 in the Criminal Revision No. 592 of 2010 is the 9 proprietor of Chotanagpur Times and the O.P. No. 2 was an employee under his proprietorship and even though O.P. No. 2 has not examined the petitioner or his witnesses with regard to proprietorship of the petitioner of Chotanagpur Times and hence learned Appellate Court below has committed illegality by reducing the compensation and hence the compensation may be enhanced to Rs.4.60 lakh instead of Rs. 2.85 lakh in terms of the judgment of the learned trial court below. It is submitted that C.W.1 and C.W.2, namely Prem Jeet Singh Sidhu and Priyadarshi Dhirendra have fully supported the case of the complainant-petitioner. It is submitted that the C.W.3 is the petitioner himself and he has fully supported his case and the learned trial court, i.e. Judicial Magistrate, Ist Class, Dhanbad has correctly appreciated the evidence of C.W.1, C.W.2 and C.W.3- namely Premjit Singh Sindhu, Priyadarshi Dhirendra, and Zakir Khan respectively, and has correctly relied upon Ext. 1 & 1/1, Ext. 2 & 2/1, Ext. 3 & 3/1, Ext.4 respectively while convicting the O.P. No. 2 for the offence under Section 138 of the N.I. Act & for directing him to pay compensation of Rs. 4.60 lakh & had rightly discarded the evidence of D.W.1 & Exhibits marked as Ext. A, Ext. B, Ext. C & Ext. D respectively. Hence, this Criminal Revision No. 592 of 2010 may be allowed. 9. Perused the lower court records and considered the submission of both sides. 10 10. It transpires that the complainant, i.e. Petitioner in Criminal Revision No. 592 of 2010 and O.P. No. 2 in Criminal Revision No. 506 of 2010 had filed Complaint Case No. 1516 of 2005 before the learned C.J.M., Dhanbad against the O.P. No. 2 (Petitioner in Criminal Revision 506 of 2010 and O.P. in 592 of 2010) and one Manoranjan Chatterjee on 28.09.2005 stating therein that he is the proprietor of Chotanagpur Times News and C.N. Associates having its Head Office at Saraidhela in Dhanbad district and O.P. No. 2 (Petitioner in Criminal Revision No.506 of 2010 and O.P. No.2 592 of 2010) was an employee in the proprietorship of the complainant for the last several years. It is stated that the complainant has made an advance of Rs.1.75 lakh for purchasing a digital camera to the accused- O.P. No. 2 in the month of December, 2004. Thereafter, the complainant-O.P. No. 2-Petitioner of Criminal Revision No. 592 of 2010 had given Rs. 2.85 lakh as a friendly loan to the accused- O.P. No. 2 in the month of February, 2005 on the eve of marriage ceremony of his sister. However, the said amount was not returned even after solemnization of marriage of the sister of the O.P. No. 2. When the complainant had demanded the said camera and loan amount from the accused-O.P. No. 2 (Petitioner of Criminal Revision No. 506 of 2010 and O.P. No. 2 in Criminal Revision No. 592 of 2010,) but it was never returned. It has been stated that complainant had made pressure upon the accused and who, being pressurized, had issued two cheques of Rs. 1.75 lakh on 12.08.2005 11 and Rs. 2.85 lakh on 20.08.2005. However, when the cheques were presented before the Bank the same were dishonoured on 24.08.2005. Then a legal notice was served upon the accused on his residential address but on 16.9.2005 the said legal notice was returned as unserved. Thereafter, on 26.9.2005, at 7 p.m. when the complainant was passing through Jharia-Sindri Main Road then accused no. 2 (one Manoranjan Chatterjee, against whom no process was issued by the court below) restrained him and abused him in filthy language for sending the legal notice upon Accused no. 1-Sujay Kumar Chatterjee- Petitioner, hence the complaint case was filed. 11. It transpires that after examining the complainant on solemn affirmation, (i.e. S.A.) and enquiring witnesses, a summon was issued upon the petitioner on 01.5.2006 under Section 138 of the N.I. Act and the learned Court below had not proceeded against the other person-Manoranjan Chatterjee. 12. The petitioner appeared before the learned Court below on 01.12.2007 and he was released on bail on 01.12.2007 by the learned Court below. 13. Thereafter, substance of accusation was explained to the accused petitioner under Section 138 of the N.I. Act on 30.5.2008 by the learned Court below and the trial began. 14. During trial the complainant had got examined three (03) witnesses who are as follows: (i) C.W. 1 is Premjit Singh Sindhu, 12 (ii) C.W. 2 is Priyadarshi Dhirendra, i.e. the Assistant Manager, I.D.B.I. Bank, Dhanbad and (iii)C.W.3 is Md. Zahir Khan, i.e. the complainant himself. 15. The complainant, in support of his case, got marked following documents as the exhibits: (i) Exhibit 1 is the Cheque return memo, (ii) Exhibit 1/1 is Cheque return memo, (iii) Exhibit 2 is Deposit Slip, (iv) Exhibit 2/1 is Deposit Slip, (v) Exhibit 3 is Cheque of IDBI Bank, (vi) Exhibit 3/1 is Cheque of IDBI Bank. (vii) Exhibit 4 is Returned Advocate’s notice 16. Thereafter, accused petitioner was examined under Section 313 Cr.P.C. on 08.9.2008. 17. The accused-petitioner of Criminal Revision No. 506 of 2010 and O.P. No. 2 in Criminal Revision No. 592 of 2010, in defence of his case has got examined one witness:- D.W. 1 is Tarun Kumar Mukherjee 18. The accused-petitioner in support of his case has got proved following documents as exhibits, which are as follows: (i) Exhibit A is Photo identity card of Sujay Kr. Chatterjee, i.e. the petitioner in Criminal Revision No. 506 of 2010, (ii) Exhibit B is Xerox copy of Income Tax Return of the year 2003 showing Rs.3,61,350/- 13 (iii) Exhibit C is Xerox copy of Income Tax Return of the year 2004 showing Rs.4,75,337/-, and (iv) Exhibit D is Xerox copy of Income Tax Return of the year 2005 showing Rs.5,77,507/- 19. Thereafter the learned Court below has convicted the petitioner of Criminal Revision No. 506 of 2010 under Section 138 of the N.I. Act and sentenced him to undergo S.I. for six months and pay compensation of Rs. 4.60 lakh. 20. The Criminal Appeal preferred by the petitioner was allowed partly by the learned appellate court below by upholding the conviction of the petitioner under Section 138 of the N.I. Act and sentence of S.I. for six months but has reduced the compensation amount from Rs. 4.60 lakh to Rs. 2.85 lakh & hence, both these Criminal Revision Applications have been filed. 21. Criminal Revision No. 506 of 2010 has been filed by the petitioner, whereas the O.P. No. 2 has filed the Criminal Revision No. 592/2010 for enhancing the compensation amount from Rs. 2.85 lakh to Rs. 4.60 lakh. 22. Though the learned Appellate Court below has concurred with the findings and there is a concurrent finding of fact yet there are some glaring irregularities committed by the learned Courts below and hence, appreciation of evidence of complainant’s witnesses and the documents are required. 14 23. It is the specific defence of the accused- petitioner that he had not issued the cheques marked as Ext. 3 and 3/1 respectively and the complainant- O.P. No. 2 of Criminal Revision No. 506 of 2010 and stated that the Petitioner of Criminal Revision No. 592 of 2010 had no paying capacity to pay such an amount but same was not considered by both the learned Courts below. 24. Ext. B, Ext.C and Ext.D respectively are the I.T.R. returns of the complainant-petitioner in Criminal Revision No. 592 of 2010 and who is O.P. No. 2 in Criminal Revision No. 506 of 2010 which reveal that the complainant had submitted return of Rs. 3,61,350/- for the assessment year 2003-04, as on 31.3.2003 and Rs. 4, 75,337/- in the year 2004 from 01.04.2003 to 31.03.2004 for the Assessment Year 2004-05 and Rs. 5,77,507/- ending March, 2005, for the assessment year and 2005-06 respectively. 25. The first loan is said to have been given of Rs.1.75 Lakh in the month of December, 2004 for purchasing Digital Camera for official use, whereas the second loan of Rs.2.85 Lakh was said to have given in February, 2005 on the eve of marriage of his sister. Thus, the petitioner is said to have given total loan of Rs. 1.75 lakh + Rs. 2.85 Lakh in December, 2004 and February, 2005, in total amounting to Rs. 4.60 Lakh but Exhibit ‘C’, which is I.T. Return for the year 2004-05 reveals that the 15 petitioner has filed Income Tax Return of Rs.4,75,337/- only. 26. Thus, the Income Tax Return filed on behalf of the complainant clearly suggests that the complainant (petitioner in Cr. Rev. No. 592 of 2010 and O.P. No. 2 in Cr.Rev. 506 of 2010) has no paying in the capacity to pay the said amount of Rs.4.60 Lakh in three months in view of own admission of petitioner Zakir Khan, who had submitted return of Rs. 4,75,337/- in the year 2004-05. If the returns are taken to be true then the statement of the complainant in the complaint petition is apparently false and incorrect. This aspect will be dealt with later on also. 27. So far as Exhibit 2 and Ext. 2/1, i.e. the cheques of Rs. 1.75 Lakh and Rs.2.85 Lakh are concerned, it is evident that the learned Appellate court had disbelieved the cheque of Rs. 1.75 Lakh and for the reasons that complaint should have been filed by the Company and not by the petitioner in his personal capacity. However, learned appellate court has believed the cheque issued by the petitioner of 2.85 Lakh on 20.08.2005. Hence, the appreciation of oral evidence is required. 28. P.W. 1 is Premjit Singh Sindhu, who has stated during his evidence that he is acquainted with both the sides and he is working as a Journalist in the company of the complainant. He stated that the accused-Petitioner had issued cheque of Rs. 1.75 Lakh on 12.08.2005 and another cheque of Rs. 2.85 Lakh on 20.08.2003, both drawn on I.D.B.I. Bank 16 and the accused had signed and mentioned the amount on both the cheques during his presence and the complainant has also signed. He also stated that complainant had paid Rs. 1.75 lakh to the accused Sujay for purchasing Digital Camera and has also paid Rs. 2.85 Lakh to accused at the time of marriage of his sister. However, during cross examination he has stated and admitted that both the cheques were brought in blank condition. He has also shown ignorance about the communication between the parties. He further admitted that the money, i.e. amount was not counted in his presence and even the complaint petition was not read out to him. He also admitted that he is working in the company of the complainant. He also admitted that his Owner is paying Income Tax. Thus, the evidence of C.W. 1 is not reliable as he is under the influence of the complainant and he has admitted that money was not counted in his presence which suggests that the amount of Rs. 1.75 Lakh and the amount of Rs. 2.85 Lakh was not counted in his presence & hence, evidence of C.W.1 is not reliable. 29. P.W. 2 is the Assistant Manager of I.D.B.I. Bank and has proved Ext. 1 and Ext.1/1 which are the return memo of I.D.B.I. Bank. However, during cross examination he has admitted to have not received any Notice from the Court for giving evidence but he has been sent for giving evidence by his 17 Branch Manager. He further admitted that in Ext. 1 and Ext. 1/1 respectively the name of holder of the cheques have not been mentioned on the cheques marked as Ext. 1 and Ext.1/1 respectively and Even Memo number has also not been mentioned in the Ext. 1 and Ext.1/1 respectively and memos are sent to another Bank. Thus P.W. 2 is a formal in nature and it is surprising that for proving this return memo the Assistant Manager of I.D.B.I. Bank has come for evidence as return Memo do not disclose the name of the holder of the cheque. 30. P.W. 3 is the complainant himself. He has stated during evidence that for making payment of Rs.1.75 lakh and Rs. 2.85 Lakh to the accused petitioner –Sujoy Kumar Chatterjee as has been mentioned in the complaint. He also stated that despite his demand the money was not returned to him and after putting pressure the accused had issued and handed over two cheques on 12.08.2005 and 20.08.2005 respectively but which were dishonoured. Thereafter, he had sent legal notice on 06.09.2005 which returned to him unserved on 16.09.2005. He has further proved deposite slips marked as Ext. 2 and Ext.2/1 respectively and two cheques marked as Ext. 3 and Ext.3/1 respectively and legal notice marked Ext.4 and Ext.4/1 respectively. 31. During cross examination he has stated that when the accused petitioner had left his office, then he used to give him Rs.2,500/- per month. He 18 also admitted that the father of the accused is a permanent employee of TATA Company. He further stated that he has paid Rs. 1.75 Lakh in cash to the accused himself. However, he admitted that he does not remember the date of marriage of the sister of the accused but he had paid Rs. 2.85 Lakh in cash to the accused in presence of his father. 32. He also admitted that he used to file his income Tax Return for himself and for his Institution and he has filed his income tax return in the year 2004-05. He further stated that he had paid the money from his personal account but he is not aware that personal account has been mentioned in his income tax return or not and it can be said only by his Chartered Accountant. During further cross examination he failed to disclose his annual turnover and could not say the exact amount. He also could not say as to from where he had obtained Rs. 1.75 Lakh and Rs. 2.85 Lakh, total Rs. 4.60 lakh although he himself has added later on that 2/4/5 lakh is always available with him, but he cannot say its information. He also admitted that he has not mentioned the cheques in his Register. He also admitted that he went to the police station for reporting the matter on 26.09.2005, but he was not entertained on the ground that it is a matter of issuance of a cheque. He further admitted in Para 16 of his cross-examination that writing and signature on Ext. 3 and 3/1 are in different inks. 33. In view of the return filed by O.P. No. 2 in Criminal Revision No. 506 of 2010 & petitioner in 19 Criminal Revision No. 592 of 2010) for the year 2003- 04, 2004-05 and 2005-06 respectively of Rs.3,61,350/-, Rs.475,337/-& Rs.5,77,507/- vide Ext.B, Ext.C & Ext D respectively, it is evident that the complainant Zakir had no paying capacity to pay Rs. 1.75 lakh in December, 2004 & Rs.2.85 lakh in February, 2005, in total Rs. 4.60 lakh to the accused- petitioner Sujay Kumar Chatterjee, however, neither the learned Appellate Court nor the trial court considered the same & thus, judgments and order passed by the learned Courts below are illegal and not sustainable in the eye of law. 34. It is further evident that both the learned Courts below failed to consider the defence of the petitioner Sujay Kr. Chatterjee that the cheques, i.e. Ext.1 and Ext.1/1 respectively were not signed by him & the Trial Court failed to send the cheque before Handwriting Expert for verification of the signature of the petitioner. Thus, the defence of the petitioner was completely overlooked and the petitioner was prevented from taking valid & proper defence. 35. It transpires from Ext. 3 that Petitioner Sujay Kumar Chatterjee has issued cheque dated 12.8.2005 CHHOTANAGPUR TIMES, however, complainant has not made Chhotanagpur Times as a party in the complaint petition. 36. Ext. 3/1 is the cheque of I.D.B.I. Bank, Bank More, Dhanbad said to be issued by the petitioner Suraj Kumar Chatterjee in favour of Md. Zakir Khan. 20 Thus, the Complaint filed on behalf of the Complainant-O.P.No. 2 Zakir Khan for recovery of Rs.4.60 Lakh is not maintainable in absence of non- impleadment of CHHOTANAGPUR TIMES. 37. It has been held in the case of ANEETA HADA VS. GODFATHER TRAVELS & TOURS PVT. LTD., reported in (2012) 5 SCC 661 and G. RAMESH VS. KANIKE HARISH KUMAR UJWAL & ANR. reported in (2020) 17 SCC 239 that the company will be a necessary party. In absence of Company/Firm made as a party the complaint will not be maintainable. 38. It has been held in the case of Aneeta Hada v. Godfather Travels & Tours (P) Ltd. reported in (2012) 5 SCC 661, Paragraph No.s 53, 58 and 59 as under:- “Para 53:- It is to be borne in mind that Section 141 of the Act is concerned with the offences by the company. It makes the other persons vicariously liable for commission of an offence on the part of the company. As has been stated by us earlier, the vicarious liability gets attracted when the condition precedent laid down in Section 141 of the Act stands satisfied. There can be no dispute that as the liability is penal in nature, a strict construction of the provision would be necessitous and, in a way, the warrant. Para 58:- Applying the doctrine of strict construction, we are of the considered opinion that commission of offence by the company is 21 an express condition precedent to attract the vicarious liability of others. Thus, the words “as well as the company” appearing in the section make it absolutely unmistakably clear that when the company can be prosecuted, then only the persons mentioned in the other categories could be vicariously liable for the offence subject to the averments in the petition and proof thereof. One cannot be oblivious of the fact that the company is a juristic person and it has its own respectability. If a finding is recorded against it, it would create a concavity in its reputation. There can be situations when the corporate reputation is affected when a Director is indicted. Para 59:- In view of our aforesaid analysis, we arrive at the irresistible conclusion that for maintaining the prosecution under Section 141 of the Act, arraigning of a company as an accused is imperative. The other categories of offenders can only be brought in the drag-net on the touchstone of vicarious liability as the same has been stipulated in the provision itself. We say so on the basis of the ratio laid down in C.V. Parekh [(1970) 3 SCC 491 : 1971 SCC (Cri) 97] which is a three-Judge Bench decision. Thus, the view expressed in Sheoratan Agarwal [(1984) 4 SCC 352 : 1984 SCC (Cri) 620] does not correctly lay down the law and, accordingly, is hereby overruled. The decision in Anil Hada [(2000) 1 22 SCC 1 : 2001 SCC (Cri) 174] is overruled with the qualifier as stated in para 51. The decision in Modi Distillery [(1987) 3 SCC 684 : 1987 SCC (Cri) 632] has to be treated to be restricted to its own facts as has been explained by us hereinabove. 39. It has been held in the case of G. Ramesh v. Kanike Harish Kumar Ujwal reported in (2020) 17 SCC 239, Paragraph No.s 53, 58 and 59 as under:- “Para 11:- In terms of the Explanation to Section 141, the expression “company” has been defined to mean any body corporate and to include a firm or other association of individuals. Sub-section (1) of Section 141 postulates that where an offence is committed under Section 138 by a company, the company as well as every person who, at the time when the offence was committed, was in charge of and was responsible to the company for the conduct of the business shall be deemed to be guilty of the offence. Para 12:- In determining as to whether the requirements of the above provision have been fulfilled, it is necessary to bear in mind the principle of law that a partnership is a compendious expression to denote the partners who comprise the firm. By the deeming fiction in Explanation (a) the expression “company” is defined to include a firm. 23 Para 16:- In the present case, it is evident from the relevant paragraphs of the complaint which have been extracted above that the complaint contains a sufficient description of : (i) the nature of the partnership; (ii) the business which was being carried on; (iii) the role of each of the accused in the conduct of the business and, specifically, in relation to the transactions which took place with the complainant. At every place in the averments, the accused have been referred to in the plural sense. Besides this, the specific role of each of them in relation to the transactions arising out of the contract in question, which ultimately led to the dishonour of the cheques, has been elucidated. 40. It has been held by the Hon’ble Supreme court that presumption under Section 139 of the N.I. Act is a rebuttable presumption and onus is on the accused to raise the probable defence. The Supreme Court has further held that the accused can also raise probable defence regarding the financial capacity of the complainant. 41. It has been held by a Division Bench of this Court in the case of Binod Kumar Lall Versus State of Jharkhand & Anr. reported in 2008 CrLJ 3353 Jhr HC, Paragraph No.s 1, 4 and 5 as under:- Para 1:- The present application has been preferred by the petitioner-complainant Binod 24 Kumar Lall, being aggrieved with the judgment passed by the Additional Sessions Judge, Fast Track Court No. III, Jamshedpur in Cr.A. 309 of 2006 dated 12-3-2007 by which the O.P. No. 2 Renu Rani Singh has been acquitted of the charges under Section 138 of the N.I. Act. The respondent has appeared through lawyer. Para 4:- We have gone through the impugned judgment dated 12-3-2007. The learned A.D.J., Jamshedpur has considered the materials available in the case record. The learned lower appellate Court has considered the factum whether the petitioner complainant was competent to advance Rs. 2,35,000/- by way of loan to the opposite party at length in which he found that the petitioner-complainant having no regular source of income nor any business, was not in a position to advance such a huge amount of loan. Para 5:- The learned lower appellate Court, further considered the point of presumption under Section 118 and 139 of the N.I. Act in paras 6, 7, 8 and 9 of the judgment. Para 6:- Having considered the materials on records as well as the reasoning given by the learned appellate Court, find no ground to differ with the view taken by the learned lower appellate Court.” 42. It has been held by the Hon’ble Supreme Court in the case of Sanjay Mishra v. Kanishka 25 Kapoor @ Nikki reported in 2009 Supreme (Bombay) 257-at Page 12, 13 and 15 as under: “Para 12:- Now turning back to the facts of the present case, assuming that the presumption under section 139 of the said Act regarding existence of debt or liability is not rebutted, in order to attract section 138, the debt or liability has to be a “legally recoverable” debt or liability. As held by the Apex Court in the case of Krishna Bhat (supra) there is no presumption under section 139 of the said Act that the debt is a legally recoverable debt. In the case of Goa Plast (P) Ltd. v. Chico Ursula D'souza, 2003 (2) Mh.L.J. (SC) 366 : (2004) 2 SCC 235 the Apex Court reiterated that a debt or liability subject matter of section 138 means a legally enforceable debt or liability. Para 13:- In the present case, there is a categorical admission that the amount allegedly advanced by the applicant was entirely a cash amount and that the amount was “unaccounted”. He admitted not only that the same was not disclosed in the Income Tax Return at the relevant time but till recording of evidence in the year 2006 it was not disclosed in the Income Tax Return. By no stretch of imagination it can be stated that liability to repay unaccounted cash amount is a legally enforceable liability within the meaning of explanation to section 138 of the said Act. The 26 alleged debt cannot be said to be a legally recoverable debt. Para 15:- The Apex Court has held that the laws relating to the said Act are required to be interpreted in the light of the object intended to be achieved by it despite there being deviation from general law. The Apex Court expressed that the object of section 138 of the said Act was to ensure that commercial and mercantile activities are conducted in smooth and healthy manner. The explanation to section 138 of the said Act clearly provides that a debt or other liability referred to in section means a legally enforceable debt or other liability. The alleged liability to repay an unaccounted cash amount admittedly not disclosed in the Income Tax Return cannot be a legally recoverable liability. If such liability is held to be a legally recoverable debt, it will render the explanation to section 138 of the said Act nugatory. It will defeat the very object of section 138 of the Act of ensuring that the commercial and mercantile activities are conducted in a healthy manner. The provision of section 138 cannot be resorted to for recovery of an unaccounted amount. A cheque issued in discharge of alleged liability of repaying “unaccounted” cash amount cannot be said to be a cheque issued in discharge of a legally enforceable debt or liability within the meaning of explanation of section 138 of the said Act. Such an effort to 27 misuse the provision of section 138 of the said Act has to be discouraged.” 43. It has been held By the Hon’ble Supreme Court in the case of John K. Abraham v. Simon C. Abraham, reported in 2014 (1) East C.C. 366 : (2014) 2 SCC 236, at Para 8, 9 and 12 as under:- “Para 8:- Keeping the above factors in mind, when we examine the judgment impugned in this appeal, we find that the High Court committed a serious illegality in reversing the judgment of the learned Chief Judicial Magistrate. While reversing the judgment of the trial court, what weighed with the learned Judge of the High Court was that in the Section 313 CrPC questioning, it was not the case of the appellant that a blank signed cheque was handed over to his son and that even in the cross-examination it was not suggested to PW 1 that a blank cheque was issued. The High Court was also persuaded by the fact that the appellant failed to send any reply to the lawyer's notice, issued by the respondent. Based on the above conclusions, the High Court held that the presumption under Sections 118 and 139 of the Negotiable Instruments Act could be easily drawn and that the appellant failed to rebut the said presumption. On that single factor, the learned Judge of the High Court reversed the judgment of the trial Judge and convicted the appellant. 28 Para 9:- It has to be stated that in order to draw the presumption under Section 118 read along with Section 139 of the Negotiable Instruments Act, the burden was heavily upon the complainant to have shown that he had the required funds for having advanced the money to the accused; that the issuance of the cheque in support of the said payment advanced was true and that the accused was bound to make the payment as had been agreed while issuing the cheque in favour of the complainant. Para 10:- Keeping the said statutory requirements in mind, when we examine the facts as admitted by the respondent complainant, as rightly concluded by the learned trial Judge, the respondent was not even aware of the date when substantial amount of Rs 1,50,000 was advanced by him to the appellant, that he was not sure as to who wrote the cheque, that he was not even aware when exactly and where exactly the transaction took place for which the cheque came to be issued by the appellant. Apart from the said serious lacuna in the evidence of the complainant, he further admitted as PW 1 by stating once in the course of the cross-examination that the cheque was in the handwriting of the accused and the very next moment taking a diametrically opposite stand that it is not in the handwriting of the accused and that it was written by the 29 complainant himself, by further reiterating that the amount in words was written by him. 44. It has been held by the Hon’ble Supreme Court in the case of Basalingappa v. Mudibasappa reported in (2019) 5 Supreme Court Cases 418, Para 13, 14, 16, 17, 22, 25 (i) to (v), 28, 29 as under:- Para 13:- This Court in Bharat Barrel & Drum Mfg. Co. v. Amin Chand Payrelal [Bharat Barrel & Drum Mfg. Co. v. Amin Chand Payrelal, (1999) 3 SCC 35] had occasion to consider Section 118(a) of the Act. This Court held that once execution of the promissory note is admitted, the presumption under Section 118(a) would arise that it is supported by a consideration. Such a presumption is rebuttable and defendant can prove the non-existence of a consideration by raising a probable defence. In para 12, the following has been laid down : (SCC pp. 50-51) “12. Upon consideration of various judgments as noted hereinabove, the position of law which emerges is that once execution of the promissory note is admitted, the presumption under Section 118(a) would arise that it is supported by a consideration. Such a presumption is rebuttable. The defendant can prove the non-existence of a consideration by raising a probable defence. If the defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbable or doubtful or the 30 same was illegal, the onus would shift to the plaintiff who will be obliged to prove it as a matter of fact and upon his failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument. The burden upon the defendant of proving the non-existence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies. In such an event, the plaintiff is entitled under law to rely upon all the evidence led in the case including that of the plaintiff as well. In case, where the defendant fails to discharge the initial onus of proof by showing the non-existence of the consideration, the plaintiff would invariably be held entitled to the benefit of presumption arising under Section 118(a) in his favour. The court may not insist upon the defendant to disprove the existence of consideration by leading direct evidence as the existence of negative evidence is neither possible nor contemplated and even if led, is to be seen with a doubt. The bare denial of the passing of the consideration apparently does not appear to be any defence. Something which is probable has to be brought on record for getting the benefit of shifting the onus of proving to the plaintiff. To disprove the presumption, the defendant has to bring on record such facts and circumstances upon consideration of which the court may 31 either believe that the consideration did not exist or its non-existence was so probable that a prudent man would, under the circumstances of the case, shall act upon the plea that it did not exist.” Para 14:- S.B. Sinha, J. in M.S. Narayana Menon v. State of Kerala [M.S. Narayana Menon v. State of Kerala, (2006) 6 SCC 39 : (2006) 3 SCC (Cri) 30] had considered Sections 118(a), 138 and 139 of the Act, 1881. It was held that presumptions both under Sections 118(a) and 139 are rebuttable in nature. Explaining the expressions “may presume” and “shall presume” referring to an earlier judgment, the following was held in para 28 : (SCC p. 49) “28. What would be the effect of the expressions “may presume”, “shall presume” and “conclusive proof” has been considered by this Court in Union of India v. Pramod Gupta [Union of India v. Pramod Gupta, (2005) 12 SCC 1] , in the following terms : (SCC pp. 30-31, para 52) ‘52. … It is true that the legislature used two different phraseologies “shall be presumed” and “may be presumed” in Section 42 of the Punjab Land Revenue Act and furthermore although provided for the mode and manner of rebuttal of such presumption as regards the right to mines and minerals said to be vested in the Government vis-à-vis the 32 absence thereof in relation to the lands presumed to be retained by the landowners but the same would not mean that the words “shall presume” would be conclusive. The meaning of the expressions “may presume” and “shall presume” have been explained in Section 4 of the Evidence Act, 1872, from a perusal whereof it would be evident that whenever it is directed that the court shall presume a fact it shall regard such fact as proved unless disproved. In terms of the said provision, thus, the expression “shall presume” cannot be held to be synonymous with “conclusive proof”.’ ”

This is the original judgment text as indexed from the source corpus. Always verify against the official court record before relying on it in a filing — you can do so on eCourts or the Supreme Court of India website. ← Search more judgments