THE HON'BLE Dr. JUSTICE G. RADHA RANI
CRIMINAL REVISION CASE No.2155 of 2005
ORDER:
This Criminal Revision Case is filed by the respondent No.1 - de facto complainant against the Judgment in Criminal Appeal No. 184 of 2003 on the file of II Additional District & Sessions Judge (FTC), Medak at Sangareddy dated 02-05-2005.
2. The facts of the case in brief are that the accused borrowed an amount of Rs.2,60,000/- from the 1st respondent - de facto complainant on 04-04-1999 and executed two promissory notes with a promise to return the amount within six months, but failed to return the same. When the complainant approached the accused, he gave two cheques for Rs.1,10,000/- and Rs.1,50,000/- dated 29-04-2000 and 12-05-2000, respectively, and the complainant returned the promissory notes to the accused. After presentation of the cheques in the bank, both the cheques were returned by the bank on the ground of "insufficient funds". The complainant issued a legal notice. The accused refused the same. Thereafter, the complainant filed the complaint under Section 138 of the Negotiable Instruments Act (for short 'the Act').
3. The defence of the accused was that he did not know the complainant - SN Chary. He issued two blank cheques to one PSN Chary, co-brother of the complainant for security purpose in connection with the loan amount advanced by him and the Dr.GRR,J 2 CrlRC.No.2155 of 2005 complainant made use of the said cheques by filling the contents and filed the present case. He denied receiving any notice.
4. The de facto complainant examined himself as PW.1 and examined one of the bank employee as PW.2. Exs.P1 to P7 were marked by the de facto complainant. The accused was examined as DW.1. No documents were marked by the accused.
5. After considering the evidence on record, the Addl. Judicial Magistrate of First Class, Sangareddy, convicted the accused for the offence under Section 138 of NI Act, sentencing him to undergo simple imprisonment for a period of 6 months and to pay a fine of Rs. 5,000/- in default to undergo simple imprisonment for 4 months.
6. Aggrieved by the said conviction and sentence, the accused preferred an appeal which was decided by the II Additional District & Sessions Judge (FTC), Medak at Sangareddy and after re-appreciating the evidence on record, the learned Sessions Judge allowed the appeal by setting aside the judgment of conviction imposed by the trial Court and directed the fine amount to be refunded to the appellant - accused.
7. Aggrieved by the said reversal of the judgment, the complainant preferred this revision contending that the appellate Court should have seen that the respondent No.1/accused admitted his signature on the cheque, the presumption would lie in favour of the complainant that the cheque was issued in discharge of a legally enforceable debt, the appellate Court should have seen that the complainant returned the promissory notes to the respondent No.1 when the cheques were issued, hence the question of filing the Dr.GRR,J 3 CrlRC.No.2155 of 2005 promissory notes would not arise. As the accused refused to receive the notice, it would amount to service of notice and the case was filed within the time. The petitioner was a practicing advocate and his name was SN Chary and the letter 'P' was added before his name. It could be presumed that the petitioner was the same person to whom the accused issued two cheques. To avoid the payment, the accused was saying that he issued two cheques to one PSN Chary, but had not produced any proof to that effect and prayed to set aside the order under revision.
8. Heard the learned counsel for the revision petitioner. There is no representation by learned counsel for the respondent/accused.
9. Perused the record. As per the facts of the case, the accused admitted his signature on the cheque, but denied that it was issued to the complainant in discharge of any legally enforceable debt. Though he contended that he had issued two signed blank cheques to one PSN Chary and the complainant SN Chary was not the said person, but was co-brother of PSN Chary, failed to prove that there was any other person by name PSN Chary and as to how the said cheques came into possession of the complainant-SN Chary. Though he stated that PSN Chary was the co-brother of the complainant, the complainant in his evidence stated the names of his co-brothers as 'Subrahmanyam' and 'Damodar'. When the accused admitted his signature on the cheque, presumption would lie in favour of the complainant under Section 118 of the NI Act that unless the contrary is proved, it is to be presumed that the negotiable instruments (including the cheque) had been made Dr.GRR,J 4 CrlRC.No.2155 of 2005 or drawn for consideration. As per Section 139 of the NI Act, the Court has to presume unless contrary is proved that the holder of the cheque received the cheque for discharge, in whole or in part, of a debt or liability. In complaints under Section 138 of NI Act, the Court has to presume that the cheque has been issued for a debt or liability but the said presumption is rebuttable. The burden of proving that the cheque has not been issued for a debt or the liability, is on the accused. The Hon'ble Apex Court in the case of Rangappa v. Sri Mohan1 observed that:
"The presumption under Section 139 of the NI Act is in the nature of rebuttal presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested."
In paragraph - 27, it was held that:
"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 accused/defendant cannot be expected to discharge an unduly high standard or proof.
10. The accused can discharge the burden laid upon him by preponderance of probability. But, mere denial regarding existence of debt would not serve any purpose.
1 2010 (11) SCC 441 Dr.GRR,J 5 CrlRC.No.2155 of 2005
11. The story put-forward by the accused that the cheques were issued to one PSN Chary for security purpose and the complainant was not the said person, could not be believed as he failed to produce any evidence to show as to who was PSN Chary and that the said cheques were not issued in discharge of any subsisting debt or liability.
12. As the notice sent to the accused was returned as 'refused' the contention of the accused that he did not receive the notice also cannot be accepted. The trial Court rightly relied upon the judgments of the Hon'ble Apex Court in Harcharan Singh v. Smt. Shiv Rani and others2 and Jagadish Singh v. Natthu Singh3 raised the presumption under Section 27 of the General Clauses Act and considered that the notice refused to be accepted by the addressee is presumed to have been served on him. The trial Court rightly placed the burden on the accused to rebut the presumption and as he failed to prove the same, convicted the accused for the offence under Section 138 of NI Act. But, the appellate Court without considering the presumptions in favour of the complainant wrongly set aside the judgment of conviction of the trial Court. As such, it is considered fit to allow the revision setting aside the judgment of the appellate Court.
13. In the result, the Criminal Revision Case is allowed setting aside the Judgment, dated 02-05-2005, passed in Crl.A.No.184 of 2003 by the II Additional District & Sessions Judge, (FTC), Medak, 2 1991 (2) SCC 5325 3 1992 (1) SCC 647 Dr.GRR,J 6 CrlRC.No.2155 of 2005 Sangareddy. The trial Court is directed to take consequential steps in pursuance of dismissal of this revision case.
Miscellaneous petitions pending, if any, shall stand closed.
_____________________ Dr. G. RADHA RANI, J November 09, 2021 KTL