Madhukar V. Dessai vs Shaikh Abdul Riyaz
2006 Latest Caselaw 1130 Bom

JUDGMENT

N.A. Britto, J.

1. This is a complainant's appeal against the acquittal of the accused under Section 138 of the Negotiable Instruments Act, 1881 (Act for short) vide Order dated 14.11.2005 of the learned J.M.F.C, Canacona.

2. The case of the complainant was that the accused had received from the complainant a sum of Rs. 70,000/- as a friendly loan on a condition that the accused would pay it by a post-dated cheque in favour of the complainant and in respect of the s aid repayment, the accused issued cheque bearing No. 1082731 dated 25.7.2004 for a sum of Rs. 70,000/- drawn on Bank of India, Margao, in favour of the complainant but when the complainant presented the said cheque for collection on 30.7.2004 with his Bankers, namely Goa State Co-operative Bank Limited. Margao, the said cheque was returned dishonoured vide Memorandum dated 30.7.2004 with endorsement that the funds were insufficient, whereupon the complainant addressed a registered notice dated 21.2.2004 to the accused through his Advocate demanding the said amount of Rs. 70,000/- with interest at the rate of 18% per year within 15 days from the receipt of the notice and the accused replied the said notice vide reply dated 21.9.2004 stating that the accused had repaid the borrowed sum of money but the complainant had not returned the cheque to the accused. Since the accused failed to pay the amount to the complainant as demanded on or before 10.9.2004, the accused filed the complaint.

3. The complainant examined himself in support of his case and produced the subject cheque, the cheque return memo, the copy of the notice along with A.D. Card and the reply sent by the accused.

4. The case of the accused, as seen from his statement recorded under Section 313 of the Code of Criminal Procedure, 1973 is that he was in need of money and one Simon had introduced him to the complainant and the complainant had agreed to give him money. The complainant after deducting 7% interest gave him Rs. 27,000/- and he paid full amount to the complainant in the year 2001, with interest. However, complainant did not return his cheque in spite of repeated requests. The complainant took the cheque as security. He only signed it. The body of the cheque was written by him. The accused also examined himself in support of his defence. The learned Magistrate, after considering the evidence observed thus:

Fact that accused issued cheque at Exhibit 5 is not in dispute. Fact that cheque bears accused account is not in dispute. Fact that cheque bears accused signature is not in dispute. Fact that accused borrowed money from complainant to the extent of Rs. 30,000/- is not disputed. Fact that cheque returned unpaid for insufficient funds by cheque return memo at Exhibit 6 is not disputed. Fact that complainant demanded cheque amount in time is not disputed. Fact that accused received demand notice is not in dispute. Fact that accused did not pay the cheque amount within prescribed time is not in dispute. Fact that cheque was presented in time is not in dispute. Fact that complainant filed his complaint is also not in dispute.

5. However, the learned Magistrate came to the conclusion that the complainant had admitted that he had filled in the cheque but there was no material on record to show that at the time of filling of the cheque he had obtained the consent of the accused or that the same was filled in consultation with the accused and, therefore, held that the complainant had carried out material alteration in the cheque and, therefore, the same was void in terms of Section 87 of the Act. The learned Magistrate also held that the contention of the accused that the cheque was given as security could not be accepted in the light of what was stated by the Apex Court in the case of I.C.D.C. Ltd. v. Beena Shankar .

6. The first contention of Mr. Bras De Sa, the learned Counsel on behalf of the accused, is that the view held by the learned Magistrate is a plausible view and therefore needs no interference.

7. As far as the appellate powers of this Court are concerned it may be stated that the powers of this Court whilst considering a case of acquittal are as wide as while considering a case of conviction against an accused and all that is required to be seen is whether the finding recorded by the Trial Court is perverse or unreasonable. This Court has full power to review at large the evidence upon which the Order of acquittal is founded and to reach a conclusion that upon that evidence, the Order of acquittal should be reversed. Acquittal of the guilty and the conviction of the innocent are both required to be avoided. The Court is only required to bear in mind that with the acquittal the initial presumption of innocence of the accused gets fortified by the acquittal and not weakened and if two views or two conclusions are possible based on the evidence produced before the Court then this Court will decline to interfere and substitute its own view with that of the Trial Court but if the view taken by the Trial Court is unreasonable, and this will be demonstrated hereinafter, it is the paramount duty of this Court to set the acquittal aside. It is well to remember that the paramount consideration of the Court is to ensure that justice is done and miscarriage of justice is prevented.

8. Section 87 of the Act deals with effect of material alteration, and, provides that any material alteration of a negotiable instrument renders the same void as against any one who is a party thereto at the time of making such alteration and does not consent thereto unless it was made in order to carry out the common intention of the original parties. It also provides for alteration by indorsee and provides that any such alteration if made by an indorsee discharges his indorser from all liability to him in respect of the consideration thereof.

9. It is well to remember that every alteration is not a material alteration. It is only such alteration as would adversely affect the interest of the other side which could be called material. As far as the facts of the case go, the complainant had fairly admitted in his cross-examination that the details on the body of the cheque were written by him. He had specifically denied that the accused had issued the subject cheque as a blank cheque. In further cross-examination the complainant had stated that he had made the relevant entries on the said cheque and deposited the same in the Bank. The statement of the complainant when read as a whole is more than sufficient to conclude that it is the complainant who had written the body of the cheque and the accused had signed the same. It was not even suggested on behalf the of accused to the complainant, that the body of the cheque was written by the complainant subsequently and without his consent and the evidence of the complainant shows that the cheque was written by the complainant and signed by the accused. It is interesting to note that the accused in the reply to the statutory notice had merely stated that the cheque was issued by the accused to the complainant without any date. In other words, it was not the initial case of the accused that he had given a blank cheque and a suggestion put in that regard was denied by the complainant. From the facts stated by the complainant when read with the reply sent on behalf of the accused it is clear that it is the complainant who had written the cheque and the accused had signed the same and there is nothing even to remotely suggest in the evidence of the complainant vis-a-vis the said reply to the notice, that any blank cheque signed by the accused, was given by the accused to the complainant. The solitary statement of the accused in his affidavit in evidence that he had given blank cheque therefore could not have been accepted. On behalf of the complainant, learned Counsel Mr. P.A. Kamat has placed reliance on the case of Satish J. Shah v. Pankaj Mushroomwala (Judgments on Dishonour of Cheque) page 872 wherein the Delhi High Court has held that no law provides that in case of any negotiable instrument the entire body has to be written by maker or drawer only and what is material is the signature of the drawer or maker and not the body writing. It has also been stated that when any negotiable instrument has been given or executed, a presumption can be raised under Section 118 of the Negotiable Instruments Act then the negotiable instrument was made or drawn for valid consideration. As already stated, the evidence of the complainant clearly shows that it is the complainant who had written the body of the cheque and the accused had signed the same. The reply filed by the accused does not show that any blank cheque was issued by the accused to the complainant and the plea of the accused subsequently taken has therefore to be considered as an afterthought, and therefore there was no question of the complainant having carried out any alteration much less material alteration to the cheque so as to invite the applicability of Section 87 of the Act. The reply of the accused gives a clear impression that the amount borrowed was repaid by the accused.

10. That apart when a person hands over a blank cheque, it must be assumed that such person gives implied authority to the person and the cheque is given to fill up the relevant details. The entries made under such authority cannot amount to material alterations. A Division Bench in the case of Lillykutty v. Lawrance I (2004) BC 130 : 2003 (2) OCR 610, relying on its earlier Division Bench Judgment, in the case of Bhaskaran Chandrasekharan v. Radhakrishnan I (1999) BC 301 : 11 (1999) CCR 559 : 1998(1) KLT 881, has held that when a cheque is issued for consideration and there is no dispute regarding signature, amount and name, it cannot be said that by putting a date of the cheque by the payee who is the holder of the cheque in due course, would amount to material alterations rendering the instrument void. When a cheque is admittedly issued with blank date, and when the drawer has no objection with regard to the name, amount and signature, it can be presumed that there is an implied consent for putting the date as and when required by the payee and get it encashed, unless the contrary is proved. The burden is entirely on the drawer of the cheque to establish that the payee had no authority to put the date and amount and then encash the cheque. The Division Bench also stated that no law provides in the case of cheques, the entire body has to be written by the drawer only. What is material is the signature of the drawer and not the body of the instrument. Therefore, when the drawer has issued the cheque whether the entire body was written by the drawer written beyond the instructions of the drawer whether amount is due or not, those and such matters are defences which drawer has to raise and prove it. Therefore, the mere fact that the payee's name and the amount shown in the cheque are in different handwriting, is not a reason for not honouring the cheque by the Bank. Banks would normally see whether the instrument is that of the drawer and the cheque has been signed by the drawer himself. The burden is therefore entirely on the drawer of the cheque to establish that the date, amount and the payee's name are written by somebody else without the knowledge and consent of the drawer. This Court in the case of Mrs. Shila @ Sudha Manjunath Vernekar v. Mr. Rayaba S. Dessai and Anr. Unreported judgment dated 27.1.2005 in CRIR No. 29/2004, held that there is preponderance of judicial opinion in favour of the proposition that when a cheque is issued duly signed by the drawer and the holder completes the same in other respects namely as regards the amount due and the date, the presumption would still be available to the complainant/holder unless the accused shows that the said particulars were filled in without the consent of the accused/drawer.

11. From whatever angle one looks at the case of the complainant, the complainant was certainly entitled to all the presumptions available in his favour under the Act with the handing over of the said cheque, the complainant having received the same with all the presumptions under the Act and it was for the accused to rebut the said presumptions particularly the presumption available to the complainant under Section 139 of the Act.

12. The Apex Court in the case of Hiten P. Dalai v. Bratindranath Banerjee , speaking through three learned Judges, stated that both Sections 138 and 139 require that the Court "shall presume" the liability of the drawer of the cheques for the amounts for which the cheques are drawn. The Supreme Court also observed that the obligation on the prosecution may be discharged with the help of presumptions of law or fact unless the accused adduces evidence showing the reasonable possibility of the non-existence of the presumed fact and further observed that provided the facts required to form the presumption of law exist, no discretion is left with the Court but to draw the statutory conclusion, but this does not preclude the person against whom presumption is drawn from rebutting it and proving the contrary. The Apex Court also observed that the rebuttal does not have to be conclusively established but such evidence must be adduced before the Court in support of the defence that the Court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of reasonability being that of prudent man. Following the said decision, the Apex Court in the case of K.N. Beena v. Muniyappan and Anr. , observed that under Section 118 of the Act, unless the contrary was proved, it is to be presumed that the negotiable instrument (including a cheque) had been made or drawn for consideration. Under Section 139, the Court has to presume, unless the contrary is proved, that the holder of the cheque received the cheque for discharge, in whole or in part of a debt or liability. This presumption is rebuttable but, however, the burden of proving that the cheque had not been issued for a debt or liability is on the accused. It is now well settled that the burden which is on the accused, is a light or burden which can be discharged by a lower standard namely by preponderance of probabilities, as in a civil case. As stated by the Apex Court by referring to the expression "unless the contrary is 'proved' in the case of Hiten P. Dalai, (supra) the presumption has got to be rebutted by proof and not by a bare explanation, which is merely plausible. What degree of probability will amount to proof, will be an exercise particular to each case, the concept of probability and the degrees of it not being able to be expressed in terms of mathematical units.

13. On behalf of the accused, it is submitted that the presumption available to the complainant was rebutted on the failure of the complainant to examine the said Simon in whose presence the money was advanced to the complainant. The said Simon was a common friend of the complainant and the accused. In this context, it may be stated that the said Simon was sought to be summoned by the accused as his witness but as the accused did not give his complete address, he could not be summoned and examined in the case. In case no money was given to the accused, it was for the accused to have examined the said Simon in support of his version that he had not received the consideration of Rs. 70,000/- for which the accused had given the subject cheque. In fact, the accused had admitted in the cross-examination of the complainant that the accused had borrowed only Rs. 30,000/-. Adverse interference, if any, has got to be drawn against the accused and not against the complainant since it was for the accused to have proved whether he had repaid Rs. 70,000/- or Rs. 30,000/-. It is also submitted on behalf of the accused that since there are many cheque bouncing cases filed by the complainant, it shows that the complainant was in the habit of filing false cases. This submission cannot be accepted to displace the presumptions in favour of the complainant.

14. As already stated, the accused in reply to the notice, has admitted the issuance of the cheque of Rs. 70,000/- but has stated that it was given as a security for the sum of money borrowed by him and which was repaid. The burden was entirely on the accused to show that he had repaid the said sum of Rs. 70,000/-.

The accused after admitting that he had borrowed only Rs. 30.000/- from the complainant, in his cross-examination, stated in his statement under Section 313 of the Code as well as in his evidence that the complainant gave him Rs. 30,000/- after deducting Rs. 2,100/- towards interest of one year and which he repaid to the complainant at his residence. However, the accused did not spell out as on which date the said sum was repaid or in whose presence it was repaid or why on that occasion he did not ask for the cheque to be returned. There has been no explanation from the accused as to why he allowed the cheque to remain with the complainant in case he had paid the amount due to the complainant, there is also no explanation as to why the accused had to give a cheque of Rs. 70,000/- as stated in the reply of the accused in case he had borrowed only Rs. 30,000/-. There is no documentary evidence produced by the accused in support of his plea that he had either repaid the entire amount of Rs. 70,000/- as mentioned in reply to the notice or Rs. 27,900/- as narrated by the accused in his statement under Section 313, Cr.P.C. and in his evidence before the Court, The case of the accused has not been consistent. Inconsistency is a sign of improbability. The cheque was issued by way of repayment of Rs. 70,000/-. Bare statements of the accused that he had repaid either Rs. 70,000/- as contented in the reply or Rs. 30,000/- or Rs. 27.900/- cannot be accepted. If the amount of Rs. 30.000/- was given after deducting interest there is no reason why accused had paid Rs. 30,000/- and not Rs. 27,900/-. The conflicting stands taken by the accused were insufficient either to disprove the presumptions or to hold that the amount taken was repaid. The learned Magistrate, therefore, ought to have convicted the accused under Section 138 of the Act.

15. In view of the above, the appeal deserves to succeed, The impugned Order dated 14.11.2005 is hereby set aside. Consequently, the accused is hereby convicted under Section 138 of the Act.

16. The accused is hereby sentenced under Section 138 of the Act to undergo S.I. for ten days and to pay compensation of Rs. 85.000/- to the complainant in default to undergo three months S.I. At the request of the learned Counsel for the accused, the sentence imposed herein, is suspended for a period of four weeks to enable the accused to file appeal before the Supreme Court, as desired by him. The bail bonds executed by the accused pursuant to the Order of this Court dated 18.3.2006, before the learned J.M.F.C., Canacona, shall remain in force for the said period of four weeks after which they shall stand cancelled.