Rajesh Kumar @ Rajesh Prasad vs The State Of Jharkhand
2021 Latest Caselaw 1111 Jhar

                                       1

           IN THE HIGH COURT OF JHARKHAND AT RANCHI

                              Cr. Rev. No. 664 of 2013

         Rajesh Kumar @ Rajesh Prasad, S/o Sri Kameshwar Prasad @
         Kameshwar Ram, R/o Station Road Jugsalai, P.O. Jugsalai, P.O.
         Jugsalai Town-Jamshedpur, Distt. Singhbhum East
                                     ...     ...     ...    Petitioner
                                Versus
         1. The State of Jharkhand
         2. Nirmal Kumar Sharma, S/o Sri Brij Bihari Sharma, R/o
            Harharguttu (Near Shiv Mandir) West Kitadih, P.O. Tatanagar,
            P.S. Parsudih, Town-Jamshedpur, Distt. East Singhbhum
                                           ...     ...    Opp. Parties
                                 ---

CORAM: HON'BLE MRS. JUSTICE ANUBHA RAWAT CHOUDHARY

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         For the Petitioner          : Ms. Pooja Kumari, Amicus Curiae
         For the State               : Mr. Shailesh Kumar Sinha, Advocate
         For the O.P. No. 2          : None

                          Through Video Conferencing


19/05.03.2021

1. Heard Ms. Pooja Kumari, learned amicus appearing on behalf of the petitioner.

2. Heard Mr. Shailesh Kumar Sinha, learned counsel appearing on behalf of the opposite party-State.

3. Nobody appears on behalf of the opposite party No. 2.

4. The arguments of the learned amicus appearing for the petitioner was heard at length on 04.03.2021 but learned counsel for the opposite party No. 2 Mr. Kaustav Panda did not appear to argue his case. Today, he has informed this court through the learned court master that he has returned the file and given no objection to the opposite party No. 2 and accordingly he is not in a position to assist this court in the matter. It appears from the record that no new counsel has entered appearance on behalf of opposite party No. 2. Accordingly, the matter has been finally heard in the absence of opposite party No. 2.

5. This revision petition has been filed against the judgment dated 21.01.2013 passed in Criminal Appeal No. 26/2011 by learned Principal Sessions Judge, East Singhbhum at Jamshedpur, whereby the appeal has been dismissed against the judgment of conviction under Section 138 of the Negotiable Instruments Act, 1881 dated 22.01.2011 passed in C/1- 383/2005, T.R. No. 148 of 2011 by the learned Judicial Magistrate, 1st Class, at Jamshedpur. The petitioner has been sentenced to undergo rigorous imprisonment for one year and has been directed to pay compensation i.e. Rs. 4 lakhs to the opposite party No. 2, being the cheque amount. Arguments on behalf of the petitioner

6. Learned Amicus has submitted that the main point which is involved in this case is as to whether the petitioner could have been convicted for bouncing of the cheque amount which was issued only as a security and was accordingly not issued against any legally payable debt or other liability. Learned counsel submits that the defence had an independent witness as D.W. 1 who has clearly deposed that he knew both the complainant and the accused and has clearly stated that the cheque was issued as security and has also described the incident and reasons for issuance of cheque. D.W. 1 has also submitted that it was settled between the parties that after getting the property, the date will be mentioned on the cheque and also stated that accordingly blank cheque was issued to the complainant in his presence. Learned counsel submits that D.W. 1 was not even cross examined by the defence as is apparent from paragraph 8 of the trial court judgment and accordingly the evidence of D.W. 1 has remained unrebutted/uncontroverted. She also submits that the accused had stated the same version even in his statement recorded under section 313 of Cr.P.C.

The learned counsel submits that aforesaid aspects of the

matter have not been properly considered by the learned courts below and accordingly the impugned judgments are perverse as one of the basic ingredients of offence under Section 138 of the Negotiable Instruments Act has not been satisfied in as much as the cheque itself was not issued in discharge of any debt or other liability.

7. Learned counsel for the petitioner has relied upon the judgment passed by Hon'ble Bombay High Court reported in 2019 SCC Online Bom 4354 (Shantaram Namdeo Sathe v. State of Maharashtra and Another) and has referred to para 8 thereof to submit that it is settled law that one of the important ingredients of offence under Section 138 of the Negotiable Instruments Act is that the cheque must have been issued for discharge, in whole or in part, of the debt or any other liability. She has also referred to the judgment passed by the Hon'ble Supreme Court reported in (2008) 7 SCC 137 (Sudhir Kumar Bhalla vs. Jagdish Chand and Others) to submit that in the circumstances where the cheque is issued by way of security, prosecution under Section 138 of the Negotiable Instruments Act, 1881 cannot be sustained.

Arguments on behalf of the opposite party -state

8. Learned counsel appearing on behalf of the opposite party- State while opposing the prayer has submitted that the complainant was not cross examined on the point of debt, rather the complainant during cross examination was told that he got the cheque in waste basket, to which the complainant denied. In the entire deposition of the complainant, the evidence of issuance of cheque by the accused was not rebutted. He further submits that there is presumption under law that the cheque was issued against legally enforceable debt or against other liability and the accused has completely failed to bring out that the cheque was not issued against legally payable debt. He also submits that the learned court below

was of the view that non-mentioning of the source of income of the complainant, by itself, does not falsify the issuance of cheque and the presumption under law.

9. However, during the course of argument, learned counsel appearing on behalf of the opposite party-State could not dispute the fact that a defence evidence was led by the accused and he was not even cross examined by the complainant. It is further not in dispute that the accused had got his statement recorded under Section 313 of the Cr. P.C. and had also narrated about the issuance of blank cheque by way of security.

Findings of this court

10.The matter relates to dishonour of cheque for a sum of Rs. 4,00,000/- dated 27.01.2005 on account of closing of the bank account of the petitioner. The cheque was dishonoured on 28.01.2005. The legal notice in connection with bouncing of cheque was issued vide Notice dated 17.02.2005 and the notice was served upon the petitioner on 23.02.2005, but the petitioner neither responded nor paid the amount to the complainant and the complaint was filed on 23.03.2005.

11.This court finds that the complainant had examined himself as C.W. 1 and proved the following documents: -

Ext.-1-----Cheque Ext.2------return memo Ext.3------postal receipt Ext.4-------registered A/D Ext.5-------legal notice The other witness was C.W. 2 , the Advocate's clerk, who proved the carbon copy of the legal notice.

12. After closure of the prosecution evidence, the statement of the accused was recorded under Section 313 Cr. P.C. and he stated that he had given the cheque to the complainant as surety for purchase of land and the complainant had misused the

cheque. The accused had also led the defence evidence as D.W.

1.

13.This Court finds that in the prosecution story, as per the complaint, nothing was mentioned as to when and for what purpose and by which mode sum of Rs.4,00,000/- was paid to the accused by the complainant. The complainant also did not whisper a word about this aspect in his evidence-in-chief, but in his cross-examination, the complainant stated that the accused had taken loan for 4 - 5 days and no agreement was prepared in this regard. He also stated during cross- examination that he was an income tax payee, he is the distributor of Hindustan Liver Limited and denied that he picked up an undated cheque from the office of complainant. C.W. 2 is the Advocate's clerk, who proved the carbon copy of legal notice.

14.The defence witness, D.W. 1 stated that he is well known to both the sides. The cheque was given in security of property dealing and it was agreed that when the property will be delivered, then the cheque will be placed for encashment. He has also deposed that the accused had given a blank cheque to the complainant in front of him and that the complainant had not given the property to the accused and used his blank cheque. Admittedly, this witness was not cross-examined by the complainant and accordingly his evidence remained totally unrebutted.

15.The learned trial court at para 10 has recorded that the cheque was presented for encashment and it bounced as the account of the accused was closed. It has also been found that the complainant had filed the cheque, return-memo, legal notice, postal-receipt and acknowledgement and proved it and accordingly, a finding was recorded that the complainant has filed the complaint within the stipulated time and had fulfilled all the provisions of Negotiable Instruments Act so far as the

documents are concerned.

16. The learned trial court, thereafter, dealt with the plea taken by the accused in his statement under Section 313 Cr.P.C wherein, he had stated that the cheque was given to the accused as a security for purchase of land and that it was agreed that if the deal will be completed, then the cheque will be presented. The learned trial court was of the view that the complainant was examined in this case as C.W. 1, but not a single question has been asked from him during his cross-examination and was of the view that the plea taken under Section 313 Cr.P.C appeared to be a new story. The learned trial court also considered that the complainant was asked during his cross-examination that he got cheque from waste basket, which was denied by the complainant. The complainant was also cross-examined on the point as to whether he had picked up the cheque from the office of the accused which again the complainant denied. The learned trial court was of the view that the accused is confused and is trying to bring a new story at one stage or the other. In this background, the learned trial court recorded the following finding:

".......

In the entire deposition of the complainant the evidence of issuance of cheque by the accused was not rebutted. It is true that no agreement was made between the complainant and the accused and it in its absence, it can't be presumed that the accused has not issued a cheque in favour of the complainant. In the entire evidence the accused couldn't bring out that the cheque issued was not signed by him and wasn't issued by him. There is legal presumption that the cheque was issued for discharging an antecedent liability, or legal enforceable debt. It was for the accused to prove that the said cheque was not issued for the purpose of legal enforceable debt. The accused has completely failed to bring out that the cheque wasn't issued for legal debt. The non-mentioning of the source of income of the complainant doesn't falsify of issuance of cheque. One defence evidence was examined and he stated that the accused had given a blank cheque after signing. But these facts were never raised or contended by the accused during the examination of the complainant. So, at different stage the accused raised different contentions which seems very

unreasonable and unrealistic. It was further argued that the writing or signature of the accused and the date on the cheque differed. The accused had never raised it during the trial challenged and, in the argument, stated this fact before the court. The accused should rely on those facts which he had defended himself during trial and so this fact is not sustainable as there is no evidence on it."

17.In the aforesaid circumstances, the learned trial court was of the opinion that the accused had issued a cheque in favour of the complainant and had fulfilled and proved all the requirements of Section 138 of Negotiable Instruments Act, 1881 by oral, as well as, documentary evidence and accordingly, held the accused guilty of offence under Section 138 of Negotiable Instruments Act and convicted the accused to rigorous imprisonment for one year and to pay cheque amount of Rs.4,00,000/- to the complainant as compensation.

18.In the judgment passed in the case of Rangappa v. Sri Mohan by Hon'ble Supreme Court reported in (2010) 11 SCC 441, the Hon'ble Supreme Court has dealt with the rebuttable presumptions under Section 139, standard of proof for rebutting and the manner in which the defence can be raised by the accused. The Hon'ble Supreme Court in para 26 to 28 held as follows:

"26. In light of these extracts, we are in agreement with the respondent claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable 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. However, there can be no doubt that there is an initial presumption which favours the complainant.

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 or 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 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."

19.Thus, it is settled position that when an accused has to rebut presumption under Section 139, the standard of proof for doing so is that of "preponderance of probabilities" and therefore, the accused can raise a probable defence which creates a doubt about the existence of a legally enforceable debt or liability and if the defence is able to do so, the prosecution can fail.

20.Thus accused is entitled to bring on record, the relevant material to rebut such presumption under Section 139 and to show that preponderance of probabilities are in favour of his defence, and the learned courts below are under legal obligation to examine the evidence on record in order to find if preponderance of probabilities leans in favour of accused.

21.This Court finds that the learned trial court while considering the case has not examined the case in the light of "preponderance of probabilities" regarding the defence which was raised from the side of the accused. This Court further finds that neither in the complaint petition nor in the evidence-in- chief, the complainant had disclosed about the legally enforceable debt and only in his cross-examination, he stated

that he had given the money to the accused just 4 - 5 days back from the date of the cheque for which no agreement was entered into between the parties. The case of the complainant hinges upon presumption under section 139 of Negotiable Instruments Act, 1881 and it was for the accused to discharge his onus on the principles of "preponderance of probabilities" .

22. The accused in his statement under Section 313 Cr.P.C has clearly taken a specific stand that the cheque was given to the complainant as a surety for purchase of land and the complainant had misused the cheque in his favour. The accused has also examined a defence witness, D.W-1 , who claimed to be well known to both the sides. The D.W-1 has also fully supported the case of the defence that the accused had given a blank cheque to the complainant as a security of a property dealing which was to be encashed when the property was delivered and the complainant never gave the property to the accused and used the blank cheque. The learned trial court lost site of the fact that the solitary defence witness was not even cross-examined by the complainant and accordingly, the evidence of D.W. 1 remained totally unrebutted.

23.The learned trial court failed to consider the case of the defence in the light of 'preponderance of probabilities '. The learned trial court examined the case from the point of view of legal presumption drawn in favour of the complainant and totally discarded the defence evidence as an afterthought on the ground that the complainant was not cross examined on these lines.

24. This Court finds that the learned trial court fell in gross error in law in not examining the evidences on record from the point of view of 'preponderance of probabilities' and has thereby ignored the defence raised by the accused in his statement recorded under Section 313 Cr.P.C as well as the evidence of his solitary witness, D-W-1 who claimed to be an eye witness

and well known to both the parties. The learned trial court also failed to take into account that the evidence of D.W-1 remained totally unrebutted in absence of his cross-examination by the prosecution and in such circumstances, the accused had discharged his reverse burden on the point of legal presumption on issuance of cheque in discharge of debt or other liability under section 139 of Negotiable Instruments Act, 1881 .

25.So far as the learned appellate court is concerned, the appellate court though recorded the evidence of D.W.1 but has not noticed that the statement of D.W.1 remained unrebutted as he was never cross-examined on behalf of the complainant. The learned lower appellate court recorded its finding in para 10 & 11 which reads as under:

"10. After carefully considering the evidence of the evidence and the material which has been brought on record I find that with regard to the issuance of the cheque favour of the complainant by the accused, defence witness has also said in his evidence in that the cheque was a blank cheque. The cheque has been brought on record which has been marked Ext.1 in this case which shows that the cheque bearing no.164128 dated 27/1/2005 of Rs.4,00,000/- was issued by the accused in favour of the complainant. The cheque bearing the signature of the accused and bears the seal of the firm of the accused. This shows that it is a signed cheque of Rs.4,00,000/- which was issued by the accused in favour of the complainant. Ext.2 is the cheque return memo which show that on presentation of the said cheque in the bank it was dishonoured as account closed. Thereafter legal notice was sent by the complainant to the accused which has been marked Ext.5 in this case. Ext. 3 is the post receipt. The witness examined in this case on behalf of the complainant has fully supported the case of the complainant and they have said with regard to the issuance of cheque by the accused in favour of the complainant. The material on record shows that a cheque of Rs.4,00,000/- was issued by the accused in favour of the complainant and on presentation of the said cheque in the bank it was dishonoured and thereafter legal notice was sent and when the amount was not paid then case was filed.

11. Learned trial court in the impugned judgement has discussed the evidence of the witnesses and the materials available on record and he has rightly found the appellant to be guilty of offence under section 138 of N.I.Act. I also find that all the requirement to prove a case under section 138 of N.I Act has been fulfilled by the complainant. Accordingly, I find and hold that the complainant has well proved the charge against the appellant beyond all shadow of reasonable doubts and the impugned judgement of conviction as passed by the learned trial court needs no interference. Hence it is hereby confirmed and maintained."

26.This Court finds that the learned lower appellate court has completely failed to apply any judicial mind and examine the evidences on record to examine as to whether the accused has discharged his burden against the legal presumption in connection with issuance of cheque under section 139 of Negotiable Instruments Act, 1881 by applying the principles of 'preponderance of probabilities'. The learned appellate court totally ignored the legal consequences of unrebutted evidence of D.W. 1. Accordingly, the learned lower appellate court has erred in law, leading to miscarriage of justice against the accused-petitioner.

27.Considering the evidences on record and in view of the peculiar facts and circumstances of this case, particularly , the specific stand taken by the accused in his statement under Section 313 Cr.P.C coupled with unrebutted evidence of defence witness D.W. 1 (who is well known to both the parties and claimed to be the eye witness of the entire transaction and stated that the cheque was issued only as a security) this Court is of the considered view that the accused had discharged his burden in connection with the cheque and his defence creates a doubt in the case of the prosecution on the point of issuance of cheque in discharge of debt or other liability which is certainly an important ingredient of offence punishable under section 138 of Negotiable Instruments Act,

1881. Accordingly, the petitioner is entitled to benefit of doubt.

28. Both the learned courts below have failed to consider the case by applying the principles of 'preponderance of probabilities', which has resulted in complete failure of justice rendering the impugned judgements perverse, calling for interference under revisional jurisdiction. Consequently, impugned appellate court's judgement dated 21.01.2013, passed by Principal Sessions Judge, East Singhbhum at Jamshedpur and order dated 22.01.2011 passed in C/1- 383 of 2005, T.R. No. 148 of 2011 by the learned Judicial Magistrate, 1st Class at Jamshedpur, are hereby set aside. The revision application is hereby allowed.

29. The petitioner as well as the bailors are discharged of their liability under the bail bond.

30.This court observes that vide order dated 25.10.2019, Ms. Pooja Kumari, Advocate was appointed as Amicus Curiae in this case by this Court. This court records its appreciation for the valuable assistance accorded by the learned Amicus Curiae in final disposal of this case. The Secretary, Jharkhand High Court Legal Services Committee is directed to ensure that the legal remuneration of the learned Amicus Curiae is duly paid to her within a period of 4 weeks upon submission of bills by her.

31.The office is directed to provide a copy of this order to Ms. Pooja Kumari, the learned Amicus Curiae and also to be Secretary, Jharkhand High Court Legal Services Committee.

32.Let the lower court records be sent back immediately to the court concerned.

33.Let a copy of this order be communicated to the learned court below through e-mail/FAX.

Binit/Saurav

(Anubha Rawat Choudhary, J.)