Choudhary Piara Singh vs Sat Pal
2024 Latest Caselaw 1980 j&K

Jammu & Kashmir High Court

Choudhary Piara Singh vs Sat Pal on 26 September, 2024

Author: Javed Iqbal Wani

Bench: Javed Iqbal Wani

                                                                   Serial No. 3

     HIGH COURT OF JAMMU & KASHMIR AND LADAKH
                                AT JAMMU
CRAA No. 82/2017
Choudhary Piara Singh                           .....Appellant(s)/Petitioner(s)
                       Through: Mr. Ajay K Gandotra, Advocate.
                vs
Sat Pal                                                    ..... Respondent(s)
                       Through: Mr. M. P. Sharma, Advocate.
Coram: HON'BLE MR. JUSTICE JAVED IQBAL WANI, JUDGE
                                  ORDER

26.09.2024 ORAL

1. Impugned in the instant appeal is judgment dated 28.09.2017 (for short

the "impugned judgment") passed by the court of Special Railway

Magistrate/ Sub-Judge, Jammu (for short the "Trial court") passed in

case titled as "Choudhary Piara Singh Vs. Sh. Sat Pal" arising out of a

complaint filed by the appellant herein (for short "the complainant")

against the respondent herein (for short "the accused") under Section

138 of the Negotiable Instruments Act, 1881 (for short "the Act of

1881"), whereunder the accused-respondent herein came to be

acquitted.

2. Before proceeding to case set up in the instant appeal, a brief

background thereof would be appropriate hereunder:-

The complainant/appellant herein in the complaint contended

that he is Managing Director of M/s Good Luck Finance

Corporation/Hire Purchase Finance Company and that the

accused/respondent herein availed a loan from him for purchase of a

truck bearing registration No. JK02A-9785 and upon his failure to

liquidate the said loan amount although had made some payments

thereof towards the said loan amount, the accused/respondent herein

issued a cheque bearing No. 405001 dated 31.01.2007 amounting to

Rs. 8,32,909/- in favour of M/s Good Luck Finance Corporation

drawn at Citizen's Cooperative Bank Ltd., Ware House Branch

Jammu, which cheque came to be presented for its encashment by the

complainant/appellant herein through his bank being J&K Bank,

Branch Nehru Market, Jammu, however, the same got dishonoured

and returned to the complainant/appellant herein along with memo

dated 11.04.2007 with the remarks "funds insufficient", whereafter the

complainant/appellant herein sent a registered notice to the

accused/respondent herein through post which however was returned

back on 19.04.2007 with the remark "Addressee refused redirected to

sender" whereupon the complainant/appellant herein filed the

complaint before the Trial court on 11.05.2007 and the Trial court

upon entertaining the complaint took cognizance and issued process

against the accused/respondent herein whereafter the

accused/respondent herein entered appearance on 05.09.2007 and

pleaded not guilty and claimed trial.

3. The complainant/appellant herein besides appearing as his own

witness before the Trial court examined two witnesses in support of

his case, namely, Madan Lal (Postman) and Sardar Balvinder Singh

(Manager J&K Bank, Nehru Market, Jammu), which evidence came to

be put to the accused/respondent herein, which came to be denied by

the accused respondent herein and consequently led rebuttal evidence

and besides appearing himself as his own witness examined three

witnesses on his behalf, namely, Romesh Kapoor (Manager Citizen's

Cooperative Bank), Waqil Singh and Krishan Lal.

4. On consideration of the entire case before it, the Trial court in terms of

the impugned judgment dismissed the complaint holding that the

accused/respondent herein has been able to raise a probable defence

that he had issued the blank signed cheque in question along with a

blank affidavit at the time of availing of loan from the

complainant/appellant herein in the year 1999 and that he had no debt

or liability towards the complainant/appellant herein which was legally

enforceable qua which the cheque in question could be said to have

been issued by him.

5. The complainant/appellant herein has challenged the impugned

judgment, inter alia, on the grounds that the same is perverse against

the law and facts and that the Trial court failed to appreciate that the

accused/respondent herein have had admitted the issuance of cheque

in question, besides having admitted his signature thereon as also the

handing over of it to the complainant/appellant herein, thus creating a

presumption under Section 118 of the Act of 1881 in favour of the

complainant herein and that the accused/respondent herein failed to

rebut the said presumption, yet the Trial court in terms of the

impugned judgment dismissed the complaint against the position of

law settled in this regard.

Heard learned counsel for the parties and perused the record.

6. Having regard to the facts and circumstances of the case noticed in the

preceding paras, inasmuch as the record available on the file, coupled

with the submissions of the appearing counsel for the parties, the moot

question which falls for consideration by this Court would be as to

whether the accused/respondent herein discharged his evidential

burden contained in Section 139 of the Act of 1881, qua the cheque in

question.

7. Before proceeding to advert to the aforesaid question, it would be

advantageous and appropriate to refer hereunder to the position of law

relating to Section 138 and 139 of the Act of 1881, being relevant and

germane herein.

8. The Apex Court in case titled as M/s Gimpex Private Limited vs.

Manoj Goel reported in (2022) 11 SCC 705 had held the following

structure relating to the ingredients of Section 138 of the Act of 1881:

(i) The drawing of a cheque by person on account maintained by him with the banker for the payment of any amount of money to another from that account;

(ii) The cheque being drawn for the discharge in whole or in part of any debt or other liability;

(iii) Presentation of the cheque to the bank arranged to be paid from that account;

(iv) The return of the cheque by the drawee bank as unpaid either because the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount;

(v) A notice by the payee or the holder in due course making a demand for the payment of the amount to the drawer of the cheque within 30 days of the receipt of information from the bank in regard to the return of the cheque; and

(vi) The drawer of the cheque failing to make payment of the amount of money to the payee or the holder in due course within 15 days of the receipt of the notice.

What emerges from above is that generally speaking the

aforesaid ingredients are matters of record and would be available in

the form of documentary evidence as early as at stage of filing of the

complaint and initiating prosecution. Apart from the above, it is also to

be proved that the cheque was issued in discharge of a debt or liability

and the burden of proving this fact like the other facts would have

ordinarily fallen upon the complaint, however, through the

introduction of a presumptive provision contained in Section 139 of

the Act, the onus of proving the same has been to be on the accused

and thus the Section 139 in that sense is an example of reverse onus

provision requiring an accused to prove the non existence of presumed

fact i.e. that the cheque was not issued in discharge of a debt/liability.

9. In so far as Section 139 of the Act of 1881 is concerned, it stipulates

that "Unless contrary is proved", it shall be presumed that the holder

of the cheque received the cheque for the discharge of whole or part of

any debt or liability." And under this Section, the expression "shall

presume" is illustrative of a presumption of law, in that, Section 139

requires that the court shall presume the facts stated therein and it is

obligatory on the court to raise this presumption in every case where

the factual basis for the raising of presumption had been established,

however, this does not preclude the person against whom the said

presumption is raised and drawn from rebutting it and proving

contrary as is clear from the expression appearing in Section 139

(Supra) "Unless the contrary is proved".

Thus, what is manifest from above is that as soon as the

complainant discharges the burden to prove that the cheque was issued

by the accused for discharge of a debt, the presumptive provision

under Section 139 of the Act shifts the burden on the accused and the

fact of the presumption in that sense is to transfer the evidential burden

on the accused of proving that the cheque was not issued in discharge

of any liability and unless this evidential burden is discharged by the

accused, the presumed fact will have to be taken to be true without

accepting expecting the complainant to do anything further.

The Apex Court in case titled as Rangappa Vs. Sri Mohan

reported in (2010) 11 SCC 441 has held that the standard of proof to

discharge this evidential burden is not as heavy as that is usually seen

in situations where the prosecution is required to prove the guilt of an

accused, but the accused must meet the "standard of preponderance of

probability", similar to a defendant in a civil proceeding.

Furthermore, the Apex Court in case titled as Basalingappa

Vs. Mudibasappa reported in (2019) 5 SCC 418 has laid down that

the order to rebut the presumption and to prove to the contrary, it is

open to the accused to raise a probable defence wherein the existence

of a legally enforceable debt or liability can be contested and that the

words "Until the contrary is proved", occurring in Section 139

(Supra) do not mean that the accused must necessarily prove the

negative that the instrument is not issued in discharge of any

debt/liability, but the accused has the option to ask the Court to

consider the non existence of debt/liability so probable that a prudent

man ought, under the circumstances of the case, to act upon the

supposition that debt/liability did not exist.

10. Keeping in mind the aforesaid position of law and reverting back to the

case in hand, record reveals that the accused/respondent herein availed a

loan from the complainant/appellant herein for purchase of a vehicle in the

year 1999 and in furtherance of availing of said loan executed certain

documents and that the said loan came to be provided to the

accused/respondent herein by the complainant/appellant herein by way of

two cheques amounting to Rs. 2,50,000/- covered by two cheques

amounting to Rs. 2,00,000/- and Rs. 50,000/-,which cheques came to be

deposited by the accused/respondent herein in his newly opened bank

account in Citizen's Cooperative Bank, Branch Ware House, Jammu on

22.03.1999, in which account, the said cheques came to be deposited by the

accused/respondent herein on 23.03.1999. It also emerges from the record

that the said bank issued a cheque book in favour of the accused/respondent

herein containing cheques bearing Nos. from 402001 up to 405010 and out

of the said cheques, the cheque in question bearing No. 405001 qua which

the complainant/appellant herein filed the complaint against the

accused/respondent herein, whereunder the instant appeal has arisen, two

other cheques bearing Nos. 405002 and 405003 both dated 22.04.1999 have

had been issued by the accused/respondent herein for an amount of Rs.

1,00,000/- and 1,50,000/- respectively in favour of one Badri Nath from

whom the accused/respondent herein purchased the vehicle in respect of

which the complainant/appellant herein had provided loan to the

accused/respondent herein. It is an admitted fact that the cheque in question

bearing No. 405001 (Supra) bears the date of 31.01.2007.

Further perusal of the record available on the file manifestly reveals

that the complainant/appellant herein had contended that after availing the

loan of Rs. 2,50,000/- at the rate of 16% interest, the accused/respondent

herein purchased the vehicle and, however, did not liquidate the loan

amount, after paying few instalments in furtherance thereof and upon his

failure to repay the said loan, a settlement came to be arrived at between the

complainant/appellant herein and the accused/respondent herein which

resulted into issuance of the cheque in question dated 31.01.2007

amounting to Rs. 8,32,909/- issued in the name of M/s Good Luck Finance

Corporation, by the accused respondent herein, which cheque got

dishonoured after being presented for encashment by the

complainant/appellant herein.

On the contrary, record reveals, in particular the defence set up by

the accused/respondent herein and the evidence led by him before the Trial

court, that the cheque in question have had been taken as blank by the

complainant/appellant herein as a guarantee besides a blank affidavit at the

time of availing of loan by him in the year 1999 and that the said cheque

came to be misused by the complainant/appellant herein in the year 2007. A

deeper and closer examination of the statement of the

complainant/appellant herein reveals that the complainant/appellant herein

has not anywhere either stated in his statement or proved while leading

evidence in support of his case that the loan amount covered in the cheque

in question had been the accumulated amount of loan amounting to Rs.

8,32,909/-. Even no documentary evidence in this regard has been produced

by the complainant/appellant herein. It is significant to note here that the

loan amount granted by the complainant/appellant herein to the

accused/respondent herein was admittedly of Rs. 2,50,000/- to be repaid by

the accused/respondent herein to the complainant/appellant herein within a

period of three years commencing from the year 1999 along with an interest

@ 16% and out of said loan amount, according to the statement of the

accused/respondent herein an amount of Rs. 90,600/- had been paid back to

the complainant/appellant herein and in presence of this position the

complainant/appellant herein, however, as has been noticed in the

preceding paras, has nowhere either in his statement or by way of oral or

documentary evidence, has mentioned that the remaining outstanding

amount payable by the accused/respondent herein to him got accumulated

to the tune of Rs. 8,32,909/-. How the amount of Rs. 8,32,909/- covered by

the cheque in question has been worked out to be payable by the accused

respondent to the complainant appellant herein is nothing short of a

mystery, more so, in view of the contradictory statements made by the

complainant/appellant herein before the Trial court that the cheque in

question came to be furnished by the accused/respondent herein in the year

2007, upon arriving at a settlement in his office which settlement as well

has not surfaced and that the amount of cheque was filled in by his

accountant therein the cheque as also the date contained in the cheque in

question.

11. On the contrary, perusal of the statement of the accused/respondent herein

made before the Trial court during the course of leading evidence

manifestly tends to show that the accused/respondent herein has in explicit

terms has deposed that the cheque in question had been provided by him to

the complainant/appellant herein at the time of availing of loan as a security

whereafter he had opened a bank account in the Citizen's Cooperative Bank

under the instructions of the complainant/appellant herein and that the

cheque in question was blank even without bearing a date, though signed by

him and same came to be retained by the complainant/appellant herein at

that relevant point of time as security against the loan which was availed by

the accused/respondent herein having thus established that the cheque in

question was not issued in discharge of a debt liability.

Herein it would be advantageous in this regard to refer to the

judgment of the Apex Court passed in case titled as Rajesh Jain Vs. Ajay

Singh reported in (2023) 10 SCC 148 wherein following has been laid

down at paras 41, 42, 43 and 44:-

"41. In other words, the accused is left with two options. The first option of proving that the debt/liability does not exist--is to lead defence evidence and conclusively establish with certainty that the cheque was not issued in discharge of a debt/liability. The second option is to prove the non-existence of debt/liability by a preponderance of probabilities by referring to the particular circumstances of the case. The preponderance of probability in favour of the accused's case may be even fifty-one to forty-nine and arising out of the entire circumstances of the case, which includes: the complainant's version in the original complaint, the case in the legal/demand notice,

complainant's case at the trial, as also the plea of the accused in the reply notice, his Section 313 Cr. P.C. statement or at the trial as to the circumstances under which the promissory note/cheque was executed. All of them can raise a preponderance of probabilities justifying a finding that there was "no debt/liability" [Kumar Exports v. Sharma Carpets reported in (2009) 2 SCC 513]

42. The nature of evidence required to shift the evidential burden need not necessarily be direct evidence i.e. oral or documentary evidence or admissions made by the opposite party; it may comprise circumstantial evidence or presumption of law or fact.

43. The accused may adduce direct evidence to prove that the instrument was not issued in discharge of a debt/liability and, if he adduces acceptable evidence, the burden again shifts to the complainant. At the same time, the accused may also rely upon circumstantial evidence and, if the circumstances so relied upon are compelling, the burden may likewise shift to the complainant. It is open for him to also rely upon presumptions of facts, for instance those mentioned in Section 114 and other sections of the Evidence Act. The burden of proof may shift by presumptions of law or fact. In case titled as Kundan Lal vs. Custodian (Evacuee Property) reported in AIR 1961 SC 1316 it has been held that when the creditor had failed to produce his account books, this Court raised a presumption of fact under Section 114, that the evidence, if produced would have shown the non-existence of consideration. Though, in that case, this Court was dealing with the presumptive clause in Section 118 NI Act, since the nature of the presumptive clauses in Section 118 and 139 is the same, the analogy can be extended and applied in the context of Section 139 as well.

44. Therefore, in fine, it can be said that once the accused adduces evidence to the satisfaction of the Court that on a

preponderance of probabilities there exists no debt/liability in the manner pleaded in the complaint or the demand notice or the affidavit-evidence, the burden shifts to the complainant and the presumption "disappears" and does not haunt the accused any longer. The onus having now shifted to the complainant, he will be obliged to prove the existence of a debt/liability as a matter of fact and his failure to prove would result in dismissal of his complaint case. Thereafter, the presumption under Section 139 does not again come to the complainant's rescue. Once both parties have adduced evidence, the Court has to consider the same and the burden of proof loses all its importance. [Basalingappa vs. Mudibasappa reported in (2019) 5 SCC 418 and Rangappa vs. Sri Mohan reported in (2010) 11 SCC 441].

12. In view of the aforesaid position of law and having regard to what has

been observed, considered and analyzed hereinabove, it cannot by any

stretch of imagination be said that the Trial court in the matter has

faulted or committed any illegality or perversity or else wrongly

dismissed the complaint of the complainant/appellant herein.

13. Viewed thus, there is no merit in the instant appeal, which

accordingly is dismissed.

(JAVED IQBAL WANI) JUDGE

Jammu 26.09.2024 Sahil Padha Whether the order is speaking: Yes/No. Whether the order is reportable: Yes/No.