M/S Rajco Steel Enterprises vs Mrs. Kavita Saraff And Another
2021 Latest Caselaw 6067 Cal

                      In the High Court at Calcutta
                     Criminal Appellate Jurisdiction
                              Appellate Side

The Hon'ble Justice Sabyasachi Bhattacharyya

                           C.R.A. No.424 of 2017
                                    With
                           C.R.A. No.425 of 2017
                                    With
                           C.R.A. No.426 of 2017
                                    With
                          C.R.A. No. 427 of 2017
                        M/s Rajco Steel Enterprises
                                    Vs.
                       Mrs. Kavita Saraff and another

For the appellant
in all the appeals       :    Mr.   Debasish Roy,
                              Mr.   Arijit Bardhan,
                              Mr.   Mujibar Ali Naskar,
                              Mr.   Avik Ghatak,
                              Mr.   Amit Ranjan Pati
For the
respondent no.1 in

CRA No.424 of 2017       :    Mr. Sabyasachi Banerjee,
                              Ms. Nahid Ahmed

For the
respondent no.1 in
CRA No.425-427 of 2017:       Ms. Minal Palane,
                              Ms. Nahid Ahmed

For the State
in all the appeals       :    Mr. Bidyut Kumar Ray,
                              Ms. Rita Dutta

Hearing concluded on     :    09.10.2021

Judgment on              :    06.12.2021


Sabyasachi Bhattacharyya, J:-

1. The complainant, in a proceeding under Section 138 of the Negotiable

Instrument Act, 1881 (hereinafter referred to as "the N.I. Act") has

filed the present appeal. Vide judgment and order dated June 29,

2016, the Magistrate held that the respondent-accused was guilty of

committing an offence punishable under Section 138 of the N.I. Act

and to convict her under Section 255(2) of the Code of Criminal

Procedure (for short "the CRPC"), sentencing her to suffer simple

imprisonment for six (06) months and directing her to pay to the

complainant Rs.1,90,00,000/- as compensation under Section 357(3)

of the CRPC within one (01) month from the date of the judgment and

order; in default, the accused was to undergo a further term of simple

imprisonment for one (01) year.

2. The accused-respondent preferred an appeal against the said order of

the magistrate. Ultimately, vide judgement and order dated May 18,

2017, the Additional District and Sessions Judge, 2nd Fast Track

Court, Bichar Bhawan, Calcutta set aside the order of conviction

dated June 29, 2016 and acquitted the accused-respondent.

3. The present appeal has been preferred against the said judgment of

acquittal.

4. The four appeals are between the same parties and arise from similar

orders as above, passed in respect of different cheques. C.R.A. No.424

of 2017 arises in respect of cheque no.713384 dated November 24,

2008 for an amount of Rs.1,75,00,000/- drawn on the Axis Bank

Limited, Burrabazar Branch, Kolkata. C.R.A. No.425 of 2017 arises

from cheque no.713382 dated November 17, 2008, C.R.A. No.426 of

2017 with cheque no.713378 dated November 7, 2008 and C.R.A.

427 of 2017 from cheque no.713380 dated November 12, 2008, all to

the tune of Rs.2,00,00,000/- each, drawn on the same bank as in

C.R.A. No.424 of 2017.

5. In view of the allegations and evidence being virtually the same in all

the four cases, all the appeals are taken up for hearing and being

decided together.

6. The complainant, M/s. Rajco Steel Enterprises, a Partnership Firm,

allegedly granted financial assistance to the accused-respondent no.1,

namely Kavita Saraff, through various banking transactions.

According to the appellant, the accused issued the aforesaid cheques

in part discharge of her liability. The cheques were signed by the

respondent no.1 and presented for encashment by the complainant

through HDFC Bank Limited, Dalhousie Branch at Kolkata, but were

returned dishonoured for the reason "Funds Insufficient". The

complainant Firm issued demand notice, which was duly received by

the accused. However, the accused did not comply with the

requisition, which compelled the appellant to initiate the proceeding

under Section 138 of the N.I. Act. Learned counsel appearing for the

appellant places reliance on the presumptions under Sections 118(a)

of the 139 of the N.I. in the regard. Section 118(a) raises a rebuttable

presumption of consideration: that every negotiable instrument was

made or drawn for consideration, and that every such instrument,

when it has been accepted, indorsed, negotiated or transferred, was so

done for consideration.

7. On the other hand, Section 139 of the N.I. Act gives rise to a

presumption in favour of a holder of a cheque to the effect that the

cheque has been issued for discharge of any debt or other liability.

8. The presumption under Section 139 is for the purpose of constituting

an offence under Section 138 of the N.I. Act.

9. Learned counsel for the appellant argues that, unless the contrary is

proved, the presumption raised under the aforesaid sections shall

prevail and the burden of proving the contrary would lie upon the

accused. In the event the accused disproves the existence of any

legally recoverable debt or liability, the burden shifts on the

complainant to prove that there existed a legally recoverable debt or

other liability, in discharge of which the cheques were issued.

10. In view of the language of Sections 138 and 139, it is obligatory for the

court to proceed on the presumption as stipulated in Section 139 of

the N.I. Act, which is a presumption of law, as distinguished from a

presumption of facts. Provided the facts required to form the basis of

a presumption of law exist, the court does not have discretion but to

draw the statutory conclusion. The accused thereafter is required to

set up a defence and adduce evidence in support thereof for the court

to believe the defence case, considering its existence to be reasonably

probable on the standard of reasonability of a "prudent man".

11. Learned counsel for the appellant places reliance on the judgment of

Uttam Ram Vs. Devindar Singh Hudan, reported at (2019) 10 SCC 287,

that of Kishan Rao Vs. Shankargouda, reported at (2018) 8 SCC 165

and Shree Daneshwari Traders Vs. Sanjay Jain, reported at (2019) 16

SCC 83 in support of the above argument.

12. Learned counsel for the appellant then seeks to demolish the defence

raised by the accused-respondent, arguing that the same was not a

probable one. As such, it is contended, the accused failed to rebut the

presumption which rose under Section 139 of the N.I. Act.

13. On such score, learned counsel for the appellant submits that the

accused stated in her examination-in-chief that the complainant did

not want to work in his personal account for trading or speculating

because he did not want his family members to know about it.

However, such contention is belied by the following facts:

14. The complainant is a partnership firm and cannot have a personal

account, nor could it have any family members, being a juristic entity.

15. Ramesh Kumar Gupta, who allegedly entered into secret speculative

transactions with the accused, intended to shield the said facts from

the family members as per the accused respondent; however, in such

event, Ramesh Kumar Gupta could not have transferred the money

from the account of the complainant Firm instead of dealing in cash,

particularly since all the partners of the complainant Firm were the

family members of Ramesh Kumar Gupta.

16. Moreover, learned counsel for the appellant argues that if the money

had been advanced for the purpose of trading in the speculative

segment of the share market, as alleged by the accused, all such

transactions would have been entered in a manner that the same

would not be reflective in the books of account of the complainant-

Firm, to shield the transactions from the public eye. However, in the

present case, all the transactions were made through banking

channels and were properly recorded and it was documented that the

accused had allowed the complainant to speculate in share in her

account. Since the onus was upon her to disprove the same since the

accused alleged the same and such onus was not discharged by her,

adverse inference should be drawn against her, it is submitted.

17. It is next argued that the accused admitted that the money was

received by her not as financial assistance but for trading in

speculative market of future and options in the share market and all

the money received by the accused was in lieu of the loss incurred by

the complainant in such transactions. By placing reliance on the

answer to question no. 8 at page 14 of the Paper Book, as well as page

17 of the Paper Book, containing the examination-in-chief of the

respondent no. 1 and page 18 thereof, containing her cross-

examination, learned counsel for the appellant points out that the

accused admitted that she had received the said amount from the

complainant. Documents on record also show such transfer of money

from the account of the complainant to the account of the accused, as

reflected in the balance sheet of the complainant. Moreover, Exhibits

10 and G (bank statements of the accused) confirm the receipt of the

financial assistance by the accused.

18. The accused, it is argued, deliberately did not produce her balance

sheet for the relevant period, which would have fortified the case of

the complainant, although the receipt of money by the accused is

already accepted and is on record. This should give rise to an adverse

inference against the accused.

19. It is next argued on behalf of the appellant that the CBI seized on

April 4, 2009 from the office of the husband of the accused at 136,

Cotton Street, Kolkata, the cheque book which initially contained the

cheque leaves from Nos. 713317 to 713388, but was bereft of the said

cheque leaves which had been issued in the manner as set out in

Exhibits 10 and G, which are the bank statements of the accused and

as indicated in the evidence of the accused when the cheque book was

seized.

20. It is argued that several cheques from the series, to which the cheque

book-in-question pertained, were issued, as per reflection in the bank

statements of the accused and two cheques, bearing nos. 713353 and

713354, were used by the accused to withdraw cash. The cheques

bearing nos. 713341 and 713342 were issued in favour of the relatives

of the accused and honoured duly, prior to the CBI raid, which is also

corroborated from the bank statements of the account of the accused

maintained with the Axis Bank.

21. That apart, learned counsel for the appellant argues, Entry Nos.

1,4,5,12 and 13 of the Seizure list indicate that, upon seizure of a

particular cheque book, if it transpired that cheques contained therein

were cancelled or were blank or were blank with the signature of the

accused, they were individually recorded as such in the Seizure list.

22. The, the irrefutable consequential conclusion can only be that the

cheque book which initially contained cheque leaves from No. 713317

to 713388, bereft of the actual cheque leaves, were seized by the CBI.

Hence, the contention of the accused, that the cheques-in-question

were lying with the CBI at the relevant juncture, is patently belied.

23. Moreover, no complaint about the alleged procurement of cheques

mysteriously was made by the accused to any authority having

jurisdiction at any point of time. Thus, such allegation of mysterious

procurement of the cheques was a mere afterthought, it is alleged.

24. The accused/DW1, during her cross-examination, said that she did

not know the meaning of "issue", although she holds a Masters Degree

in English and referred to "issue" in her statement recorded under

Section 313 of the CRPC. However, during such cross-examination,

DW1 did not say that she had not issued the subject cheque, skilfully

evading the issue.

25. The accused also admitted in her cross-examination that the seizure

list of CBI contained cheque nos. 713317 to 713388, signed by her.

26. Placing reliance on Rahul Sudhakar Anantwar Vs. Shivkumar

Kanhiyalal Shrivastav, reported at (2019) 10 SCC 203, learned counsel

argues that the signature on a cheque, if admitted, and the defence

not being probable, it cannot be said that the accused rebutted the

statutory presumption satisfactorily.

27. It is further contented by the appellant that, admittedly, there was not

agreement between the accused and the complainant firm with regard

to trading/speculation in the share market, that too, by using the

bank account of the accused, although the accused, as DW1,

admitted that the money from the complainant firm had come to her

account, but for a different cause.

28. The accused also admitted in her evidence that she had not received

any remuneration/commission from the complainant for such

speculation in the stock market by using her name in the bank

account. Such admissions, coupled with the conspicuous silence of

the accused even after deriving knowledge of the subject cheques

having been presented for encashment and even upon receipt of the

demand notice issued by the complainant's advocate, tantamount to

an admission of the accused regarding the receipt of such money. The

accused failed to corroborate her alternative case of a different cause

for the receipt of money, thereby failing to discharge the onus of

proving such case, which lay upon her.

29. Cheque no.713386, to the tune of Rs. 1,00,00,000/-, which was

seized by the CBI as Entry No. 15 of the Seizure List (Exhibit C) was

drawn in favour of the complainant, though the same had not been

made over to the complainant. Thus, it is contended, the accused

was liable to pay such sum to the complainant, which liability could

not have arisen on account of profit and/or loss during the course of

speculation in the future and options segment of the share market,

because it would be preposterous to imagine that a person would be

able to foresee the profits and /or losses, arising out of such business

in advance.

30. As such, learned counsel for the appellant assails the impugned

judgment of the Sessions Judge, acquitting respondent no.1, on the

above grounds.

31. On the other hand, learned counsel for the respondent no.1 argues

that there are multiple basic infirmities in the complaint, in as much

as the amount of financial assistance given to the accused by the

complainant was not disclosed, nor was any agreement or document

supporting such contention produced. The complainant could not

establish the existence of a legally enforceable debt, which is a pre-

condition to invoke Section 138 of the N.I. Act. That apart, the

complaint does not reveal if and when the cheque was handed over to

the complainant by the accused person or when the cheque was

deposited. Hence, it is contended that the basic ingredients of Section

138 of the N.I. Act were not satisfied.

32. Learned counsel for the respondent no.1 next argues that that the

complainant illegally procured the cheques-in-question, since the said

cheques were seized by the CBI from her husband's office on April 4,

2009, which fact is borne out by the relevant portion of the Seizure

List at serial no. 7 thereof, which records the seizure of one cheque

book of current account no.277010200019761 of the Axis Bank,

Burrabazar Branch in the name of Kavita Saraff containing the

cheque nos. 713317 to 713318, all signed by Kavita Saraff. The said

evidence is clinching enough to show that the cheques were supposed

to be in the custody of the CBI as per their Seizure List at the relevant

juncture, thereby defeating the complaint under Section 138 of the

N.I. Act.

33. In the cross-examination of PW1, it was admitted that the PW1 had

received the impugned cheque but he could not say on which date the

same was received, nor did he know whether the present cheque was

with him or with the accused at the time of the CBI raid as borne out

at pages 10 and 11 of the Paper Book.

34. The concerned cheque, it is argued, was not with the complainant till

March 31, 2009, otherwise it would have been reflected under the

head 'cheques in hand' of the balance sheet appearing at page 9 of the

Supplementary Paper Book, since the cheques were dated in the

month of November, 2008.

35. Learned counsel next contends that, for the accused to raise a

probable defence, the evidence on behalf of the complainant can be

relied upon. In view of the provision of Section 118 of the N.I. Act, the

date of cheque is assumed to be the date of the issuance of the

cheque, if not mentioned otherwise, that is, in the month of

November, 2008. However, the same was presented for encashment

only in the month of May, 2009, that is, after a delay of about 5

months and 20 days, just before the validity of the cheque was about

to expire, that too after the raid of the CBI on April 4, 2009, when the

cheques were supposed to be in the custody of the CBI as per their

own seizure list. No reason therefor was cited in the complaint.

36. The respondent no.1 further argues that the complainant has

miserably failed to prove that it is the legal 'holder' of the subject

cheque and has 'received' the cheque. None of the partners of the firm

were produced by the prosecution as witness to throw light on the

aspect of issuance of cheque, particularly when only Ramesh Gupta,

one of the partners, has made ambiguous and absurd statements. It

is argued that, as per the provisions of Section 114 of the Evidence

Act, a negative inference can be drawn against the complainant for

withholding such vital witnesses.

37. The basic ingredient necessary to have committed the offence under

Section 138 of the N.I. Act has not been satisfied in the present case,

it is argued, since the cheque has not been proved to be 'handed over'

by the accused and/or the complainant could not prove that it

'received' the cheque from the accused. In this regard, learned

counsel for the respondent no.1 places reliance on Thiruvanantapuram

Vs. K.S. Babu and Kamalammal Vs. Mohannan, both unreported

judgments, as well as, M.S. Narayan Menon Vs. State of Kerala,

reported at AIR 2006 SC 3366.

38. Learned counsel further argues that, in view of absence of any proof

that the cheque was 'received' by the holder and not procured illegally,

the presumption under Section 139 of the N.I. Act is not applicable

and, even if assumed to be applicable, was sufficiently rebutted.

39. That apart, learned counsel argues that there was no legally

enforceable liability of the accused towards the complainant.

40. By highlighting relevant portions of the FIR and the Charge-Sheet,

learned counsel argues that those did not corroborate the allegation of

the existence of any legally enforceable liability on the part of the

accused.

41. Learned counsel for the respondent no.1 next argues that the

complainant's books of accounts are false and manipulated, since no

bank will provide an unsecured loan of such a huge amount (Rs. 63

crore), that too, without any document. When the complainant is

paying an interest of Rs.98 lakh to the bank, he could not have given

any financial assistance without any interest. The complainant-Firm

is running at a huge loss of approximately Rs.1 crore and it is not

credible for anybody to lend financial assistance of such an exorbitant

amount to the said Firm. In support of such submissions, learned

counsel places reliance on Pages 9 and 10 of the Supplementary Paper

Book.

42. It is further submitted that no Chartered Accountant has

authenticated the balance sheet, relied on by the complainant.

43. Learned counsel for the respondent no.1 contends that, to rebut the

presumption under Section 139 of the N.I. Act, it is open to the

accused to rely on the materials produced by the complainant in order

to raise a probable defence.

44. In support of such proposition, learned counsel relied on John K.

John Vs. Tom Varghese [(2007) 12 SCC 714], K. Prakashan Vs. P.K.

Surenderan [(2008) 1 SCC 258], M.S. Narayan Menon Vs. State of

Kerala (supra) and Basalingappa Vs. Mudibasappa [(2019) 5 SCC 418].

45. Learned counsel submits that there was no legal agreement executed

by the complainant in respect of the alleged loan. The complainant

failed to produce any written document of loan confirmation or loan

agreement to substantiate his claim of advancing financial assistance

of such a huge amount. Reliance, in such regard, is placed on the

following judgments:

I) Krishna Janardhan Bhat Vs. Dattatraya G. Hegde [AIR (2008) 4

SC 1325];

II) John K. John Vs. Tom Varghese (supra);

III) Rev. Mother Marykutty Vs. Reni C. Kottaram [(2013) 1 SCC 327];

IV) Basalingappa Vs. Mudibasappa (supra).

46. Learned counsel further submits that the issue of legal recovery of

debt is not a matter of presumption under Section 139 of the N.I. Act,

which merely raises presumption in favour of the holder of the cheque

that the same has been issued for discharge of any debt or other

liabilities.

47. Learned counsel for the respondent no.1 next submits that the PW1 is

unaware as to when and why the alleged 'financial assistance' was

advanced to the accused and when he started demanding back the

same. Learned counsel relied on relevant extract from pages 7 and 8

of the Paper Book to harp on such point and relied on John K.

Abraham Vs. Simon C. Abraham [(2014) 2 SCC 236] and M.S. Narayan

Menon (supra), in such context.

48. It is next argued that the complainant deliberately withheld relevant

evidence, being his bank statement, which would have substantiated

the contents of the CBI Charge Sheet. No prudent person, it is

argued, would lend financial assistance to anybody by illegally

procuring money from the bank.

49. Placing reliance on Section 114 of the Evidence Act, it is argued that if

such a relevant evidence is withheld by the complainant company, the

court has to draw a presumption to the effect that, if produced, the

said accounts would be unfavourable to the complainant company,

and the same would be enough to rebut the presumption, if any, in

favour of the accused. Learned counsel, in such respect, relied on

Narayan Menon (supra) and Kundan Lal Rallaram Vs. Evacuee

Property [AIR 1961 Supreme Court 1361].

50. The complainant Firm did not have legal and moral funds to grant

such a huge amount as financial assistance, it is next argued on

behalf of respondent no. 1, placing reliance on the deposition of PW1,

a partner of the complainant Firm (at page 8 of the Paper Book) to the

effect that the said witness did not think that the source of money is a

relevant issue in this case.

51. According to learned counsel for the respondent no.1, this proves that

it was not the company's own fund but illegally procured fund from

the Central Bank of India. It is implied that no prudent mind will lend

financial assistance after putting his life and liberty at stake by

defrauding a nationalized bank. Learned counsel places reliance on

John K. Abraham (supra) and Basalingappa (supra) as well as K.

Prakashan (supra) and K. Subramani Vs. K. Damodara Naidu [(2015) 1

SCC 99] in this regard.

52. Thus, it is contended that the prosecution against the accused under

Section 138 of the N.I. Act was not maintainable in law.

53. As far as the contentions of the complainant are concerned, learned

counsel for the respondent no.1 submits that the proposition, that the

counterfoil and not the cheques had been seized by the CBI is absurd,

since the Seizure List mentions the cheques which had been seized as

"signed by Kavita Saraff". There cannot arise any question of her

signature appearing in the 'counterfoil' of the cheques.

54. Reliance of the complainant on some other cheques passed in the

Seizure List need not necessarily mean issuance of the impugned

cheques, it is argued. The Seizure List was not disproved and was

prepared by an independent investigating agency. The case of the

complainant was, thus, not proved beyond reasonable doubt.

55. The police itself had seized the impugned cheques from the office of

the husband of the accused, so any misuse of the cheques would be

detrimental to the person himself who manipulates with the

instrument and no further complaint was required. Further, the

suggestion had been put forward to PW1 (Ramesh Gupta) during his

cross-examination that the impugned cheques had been illegally

procured by the complainant Firm after the CBI raid.

56. Learned counsel for respondent no.1 submits that no reply to the

demand notice was given as, at that time, the respondent no.1 was

pregnant and had delivered a baby after a week on May 27, 2009.

That apart, the CBI investigation was on and respondent no.1 was

undergoing mental tension as she was maliciously implicated and

framed in the said case. No reply to the notice was given by her under

such circumstances. Failure to reply to a notice, it is contended, does

not attract any presumption under Section 139 of the N.I. Act, to the

effect that the cheque was issued.

57. In such context, learned counsel relies on Basalingappa (supra), John

K. Abraham (supra) and Thiruvanantapuram (supra).

58. A bare perusal of the Seizure List, it is argued, will reveal that the

cheque book, along with the impugned cheques, were seized by the

CBI on April 4, 2009, thus making it impossible for the impugned

cheques to be delivered to the appellant and subsequently being

dishonoured via a return memo dated May 4, 2009.

59. The Balance Sheet attached does not support the appellant's

contention, as evident from page 9 of the Supplementary Paper Book.

No mention of the impugned cheque finds place in the 'cheque in

hand' section of the said balance sheet, which infirmity is sufficient to

create a probable doubt as regards the complainant's case, it is

argued. The balance sheet also discloses that the appellant Company

was running at a loss of Rs.1 crore in the 'net loss' section of the same

(page 10 of the Supplementary Paper Book). Thus, it is highly

improbable that the appellant Company would give financial

assistance to the respondent without levying any interest upon the

same.

60. Remuneration was paid for share speculation to the company of the

husband of the accused and not to the accused. Thus, Kavita Saraff

never received any remuneration from the complainant. As mentioned

in her deposition, the husband of respondent no.1 was a sub-broker

of M/S Motilal Oswal and she was a client of the same. The brokerage

generated in her account, while speculating on behalf of the

complainant, was paid to the parent broker Motilal Oswal, a certain

percentage of which brokerage was paid to her husband's company as

he was the sub-broker of the Company. The respondent no.1 never

received any remuneration from the complainant company for

speculating in the stock market. Hence, no fact has been proved

commensurate with the standard of reasonability of a "prudent man".

M. S. Narayan Menon (supra) is again referred to in such context.

61. K. Prakashan (supra) is reiterated in support of the proposition that, if

two views are possible, the appellate court shall not reverse a

judgment of acquittal only because another view is possible to be

taken. Moreover, it is argued, the onus on an accused is not as heavy

as that on the prosecution, which may be compared with the

defendant in a civil proceeding, as held in M. S. Narayan Menon

(supra).

62. The submissions made in C.R.A. No.424 of 2017 are adopted in

connection with the other appeals as well, apart from certain factual

distinctions as indicated above.

63. For a proper appreciation of the legal backdrop against which the

present case is set, the cumulative scope of Sections 138 and 139 of

the N.I. Act come to the forefront. The said Sections are set out below:

138. Dishonour of cheque for insufficiency, etc., of funds in the account.--Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for [a term which may be extended to two years], or with fine which may extend twice the amount of the cheque, or with both:

Provided that nothing contained in this section shall apply unless -

(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;

(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, [within thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and

(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.

139. Presumption in favour of holder. - It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability."

64. Section 139 raises a reverse presumption against the accused by

providing that the holder of a cheque shall be presumed to have

received the cheque of the nature referred to in Section 138 for the

discharge, in whole or in part, of any debt or other liability.

65. The Explanation to Section 138 provides that, for the purposes of the

said Section, "debt or other liability" means a legally enforceable debt

or other liability.

66. The view of the Supreme Court was initially that the presumption

mandated under Section 139 does not include the existence of a

'legally enforceable' debt or other liability, as exemplified in Krishna

Janardhan Bhat Vs. Dattatraya G. Hegde, reported at (2008) 4 SCC 54.

67. However, the law has since been settled in Uttam Ram (supra),

wherein the Supreme Court virtually overruled the ratio of Krishna

Janardhan Bhat (supra) and held that the presumption mandated by

Section 139 does indeed include the existence of a legally enforceable

debt or liability.

68. Proceeding on such premise, if we explore the standard of proof

required for the purpose of Sections 138 and 139, Uttam Ram (supra),

which was cited by the appellant itself, clearly laid down the

proposition that, to disprove the presumption raised under Section

139 of the N.I. Act, the accused should bring on record such facts and

circumstances, upon consideration of which the court may either

believe that the consideration and debt did not exist or their non-

existence was so probable that a prudent man would, under the

circumstances of the case, act upon the plea that they did not exist.

It was clearly held that the accused, apart from adducing direct

evidence to prove non-existence of the contract or the debt or liability,

may also rely upon circumstantial evidence and if the circumstances

so relied upon are compelling, the burden may shift again on to the

complainant.

69. In Rangappa Vs. Shi Mohan, reported at (2010) 11 SCC 441, also cited

by the appellant, it was further elaborated that 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. It was further

specified by the Supreme Court that when an accused has to rebut

the presumption under Section 139, the standard of proof for doing so

is that of "preponderance of probabilities". 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. 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.

70. The aforesaid basic principles have been reiterated in several

judgments cited by both the parties.

71. The other legal principle, hitting at the root of this court's jurisdiction

is that, while exercising an appellate power against a judgment of

acquittal, the High Court should bear in mind the well-settled

principle of law that where two views are possible, the appellate court

should not interfere with the finding of acquittal recorded by the court

below. The said proposition found place in M. S. Narayana Menon

(supra), as approved in John K. John (supra), both of which have been

relied on by the respondent no.1.

72. As such, the scope of inquiry in the appeal is circumscribed by the

aforesaid contours.

73. If the evidence-on-record in the instant case is taken into

consideration, it is the test of "preponderance of probability" that has

to be applied to the case made out by the accused/respondent no.1

for the purpose of rebuttal of the presumption under Section 139 of

the N.I. Act. Further, the materials submitted by the complainant can

be relied on by the accused in order to raise such a defence, in some

cases not requiring adducing evidence of his/her own.

74. Applying the said standard of proof, a perusal of the evidence-on-

record indicates that a reasonable doubt, befitting a prudent man, is

cast upon the prosecution case insofar as, although the Seizure List of

the CBI indicates that the entire cheque book, which originally

contained a bunch of cheques including the incriminating ones, was

seized; however, other entries in the same Seizure List mention

independent recovery of some of the cheques which were part of the

same cheque book. Such cheques were, in fact, separately mentioned

as independent and separate items of the CBI Seizure List, including

the relevant details as regards signatures/absence of signatures

thereon, which indicates that the cheque book, though recovered, did

not contain all the leaves which were originally contained therein, at

the relevant juncture. If the defence case is to be accepted, the

incriminating cheques were in the custody of the CBI at the relevant

juncture, contained in the seized cheque book, thereby obviating the

possibility of such cheques having been issued by the accused at the

relevant juncture. On the other hand, the prosecution case is that the

independent seizure of other cheques from the same cheque book,

details of which were separately given in several items of the Seizure

List, indicates that the CBI merely seized the empty, or partially

empty, cheque book which might not have contained the leaves of the

incriminating cheques, thereby lending credence to the possibility of

the accused having issued the dishonoured cheques. Equal weight

can very well be attached to either of such theories for the purpose of

preponderance of probabilities.

75. Although Section 114 of the Indian Evidence Act, clothes an official

act with the presumption of being duly done, upon subsequent

adduction of evidence, in particular the Seizure List itself, such

presumption is rendered academic, since the aforesaid facts are

elicited from the said Seizure List itself. Even if a presumption of

correctness is attached to the Seizure List, the Schrodinger's cat

dilemma between the two probable views, diametrically opposite to

each other, remains. Akin to the cat, there is equal probability,

simultaneously, of the dishonoured cheques having been seized and

not seized by the CBI during the relevant period.

76. A perusal of Section 138 reveals that the primary ingredients of an

offence under the said provision are that: (i) the cheque has to be

drawn by the accused; (ii) it should be for the payment of any amount

of money to another person; (iii) such payment has to be for the

discharge, in whole or in part, of any debt or other liability. Such debt

or other liability, within the purview of the Explanation to the section,

means a legally enforceable debt or other liability.

77. In the present case, no valid documentary evidence could be produced

by the complainant and/or the prosecution for substantiating the

legality and/or existence of any "enforceable debt or other liability" on

the part of the accused and the Court has to resort to a balance of

probabilities between the contentions of the parties.

78. A plausible case has been made out by the defence as regards the

non-existence of any such legally enforceable debt or other liability,

also because the said debt/liability is not reflected from the relevant

balance-sheet which was produced as evidence. Thus, illegal share

transactions, which were the premise of such alleged liability, could

not be construed, even as per the prosecution case, to be "legally

enforceable".

79. That apart, the 'cheque in hand' section of the exhibited balance sheet

does not reflect the alleged debt/liability.

80. The credibility of the prosecution case further comes under the

scanner, since it is not logical to a prudent man as to why the

complainant had invested through the accounts of the Partnership

Firm, which comprised of other family members of the complainant, if

it was the intention of the complainant to hide the clandestine deals of

share transactions from his family members.

81. Hence, from the evidence adduced by the prosecution itself, several

questions arise as regards the veracity of the chain of events sought to

be projected by the prosecution.

82. Certain other irregularities visit the prosecution case as well. As

rightly argued by the respondent no.1, the forlorn picture of the

balance-sheet and account statements would reflect a sorry state of

affairs for the finances of the accused. Hence, the accused, within the

prudence of a normal person, could not have undertaken such illegal

transactions, as alleged, gratis for the complainant, without any

consideration whatsoever.

83. Hence, the very premise of the presumption raised by Section 139 in

the present case is demolished sufficiently by applying the standard of

preponderance of probability.

84. That apart, it is well-settled that, merely because a different view is

possible on the facts of the case, the Appellate Court shall not set

aside or reverse the findings and/or decision of the Trial Court.

85. Upon a perusal of the judgment and order impugned in the appeal, it

is evident that the Trial Judge took sufficient pains to discuss all the

relevant facets of the matter and the governing law and, upon

comprehensive consideration of the materials-on-record and the law

applicable, arrived at the findings and the final decision assailed in

the present appeal. Merely because of a second opinion is possible, it

is not for this court, sitting in appeal, to reverse the said decision of

the Trial Court, in the absence of any infirmity and/or illegality in the

Trial Court's judgment. The inferences drawn by the Trial Court and

the conclusions arrived at are well within the domain of

preponderance of probability. Thus, the judgment of the Trial Court,

if tested on the anvil of such a standard of proof as enunciated by the

Supreme Court in several judgments for the purpose of rebuttal of the

presumption under Section 139 of the N.I. Act, there is no scope of

interfering with the impugned judgment and order of acquittal.

86. In view of the above considerations, there is no merit in the appeals.

87. Accordingly, CRA No.424 of 2017, CRA No.425 of 2017, CRA No.426

of 2017 and CRA No.427 of 2017 are dismissed. The judgments and

orders of the Trial Court, challenged respectively in the said appeals,

are hereby affirmed.

88. Urgent certified copies of this order shall be supplied to the parties

applying for the same, upon due compliance of all requisite

formalities.

( Sabyasachi Bhattacharyya, J. )