Madhya Pradesh High Court

Dhaniram vs Prakash Chand on 15 July, 2022

Author: Sunita Yadav

                      -( 1 )-          Cr.A.No.652/2017


IN THE HIGH COURT OF MADHYA PRADESH AT
                    GWALIOR
                     BEFORE
      HON'BLE SMT. JUSTICE SUNITA YADAV


        CRIMINAL APPEAL No. 652 of 2017
Between:-
DHANIRAM           S/O          SHRI
RAMSEVAK       GUPTA,           AGED
ABOUT 50 YEARS, OCCUPATION:
KARSHI       AND    SHOPKEEPER
KARERA (MADHYA PRADESH)

                                       .... APPELLANT

(BY    MR.   RAHUL       SINGH    KUSHWAH       -
ADVOCATE)

AND

1.    PRAKASH CHAND S/O SHRI
DEENANATH          JAIN,        AGED
ABOUT 45 YEARS, OCCUPATION:
SHOPKEEPER               RATHAUR
MOHALLA        GALLA        MANDI
                            -( 2 )-           Cr.A.No.652/2017


     KAISHAV KIRANA STORE KE
     PAS   SHUBHAM       STD/PCO      KE
     BAGAL ME CYCLE PANCHAR KI
     DUKAN (MADHYA PRADESH)

                                             ....RESPONDENT

     (BY MR. SURENDRA KUMAR KHARE - ADVOCATE )

 Reserved on      :     09.07.2022

 Delivered on     :      15.07.2022




       This appeal coming on for hearing this day, this Court

passed the following:

                        JUDGMENT

The present appeal is filed against the judgment dated

18.01.2017 passed by Judicial Magistrate First Class, Karera,

District Shivpuri in case No.794/2011, by which the

respondent/accused has been acquitted from the charges under

Section 138 of Negotiable Instruments Act.

2. For the sake of convenience, the petitioner will be

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referred as the complainant and the respondent as the accused

hereinafter.

3. The facts in brief to decide the appeal are that the

complainant filed a complaint under Section 138 of Negotiable

Instruments Act alleging therein that the complainant and the

accused were having very good relations. Since the accused and

the complainant had frequent money transactions with each

other; therefore, the accused gave the complainant a cheque

bearing No.30784136344 of State Bank of India Branch

Karera. The said cheque upon submission, dishonored by the

Bank. The complainant received Bank memo stating that

"Account closed''. Thereafter, the complainant sent a notice

through registered post to the accused which he refused to

receive. Hence, the complainant filed this complaint under

Section 138 of the Negotiable Instruments Act.

4. Learned trial Court has framed the charges under Section

138 of the Negotiable Instruments Act against the accused and

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after taking evidence of the parties and hearing the matter on

merits dismissed the complaint and acquitted the accused from

the said charges.

5. Learned counsel for the petitioner argued that the

impugned judgment is perverse and contrary to the settled

principle of law. It is further submitted that learned trial Court

has failed to consider the evidence produced by the petitioner.

The accused has admitted his signature on the disputed cheque,

therefore, the learned trial Court ought to have presumed that

the amount was taken by the accused in discharging of his legal

liability. Therefore, the impugned judgment be set aside and the

respondent/accused be sentenced under Section 138 of the

Negotiable Instruments Act.

6. Per contra, learned counsel for the respondent/accused

has argued that no case can be made out against the accused as

the complainant failed to prove that he provided any money to

the accused as a loan. Therefore, learned trial Court has rightly

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acquitted him from the charges under Section 138 of

Negotiable Instruments Act.

7. On perusal of record, it appears that the complainant has

examined himself to prove his case as witness No.1 and the

respondent/accused has examined DW-1 Vidhya and DW-2

Rambabu Prajapati in support of his case.

8. Before dwelling into the facts of the present case, it

would be apposite to discuss the legal standards required to be

met by both sides. In order to establish the offence under

Section 138 of NI Act, the prosecution must fulfill all the

essential ingredients of the offence. Perusal of the bare

provision reveals the following necessary ingredients of the

offence:-

1. The cheque was drawn by a person on an account maintained by him for payment of money and the same is presented for payment within a period of 3 months from the date on which it is

-( 6 )- Cr.A.No.652/2017

drawn or within the period of its validity;

2. The cheque was drawn by the drawer for discharge of any legally enforceable debt or other liability;

3. The cheque was returned unpaid by the bank due to either insufficiency of funds in the account to honour the cheque or that it exceeds the amount arranged to be paid from that account on an agreement made with that bank;

4. A demand of the said amount has been made by the payee or holder in due course of the cheque by a notice in writing given to the drawer within thirty days of the receipt of information of the dishonour of cheque from the bank;

5. The drawer fails to make payment of the said amount of money within fifteen days from the date of receipt of notice.

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9. The complainant has proved the original cheque vide Ex.

P-1. The complainant has also proved that the cheque in

question was presented within its validity period and the

cheque in question was returned unpaid vide return memo

Exhibit P-3. The service of legal demand notice dated 06.06.11,

Exhibit P-6 has also been proved by bringing on record the

postal receipt Ex. P-8.

10. As far as the proof of second ingredient is concerned, the

complainant has to prove that the cheque in question was

drawn by the drawer for discharging a legally enforceable debt.

In the present case, the accused has admitted signature on the

cheque in question. As per the scheme of the NI Act once the

accused admits signature on the cheque in question, certain

presumptions are drawn, which result in shifting of onus.

Section 118 of the NI Act lays down the presumption that every

negotiable instrument was made or drawn for consideration.

Another presumption is enumerated in Section 139 of NI Act.

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The provision lays down the presumption that the holder of the

cheque received it for the discharge, in whole or part, of any

debt or other liability. The combined effect of these two

provisions is a presumption that the cheque was drawn for

consideration and given by the accused for the discharge of

debt or other liability. Both the sections use the expression

"shall", which makes it imperative for the court to raise the

presumptions once the foundational facts required for the same

are proved.

11. It has been held by a three-judge bench of the Hon'ble

Apex Court in the case of Rangappa vs. Sri Mohan, (2010) 11

SCC 441 that the presumption contemplated under Section 139

of NI Act includes the presumption of existence of a legally

enforceable debt. Once the presumption is raised, it is for the

accused to rebut the same by establishing a probable defence.

12. In the present case, the complainant examined himself as

the sole witness. To raise the presumption of cheque having

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been issued in discharge of legally recoverable debt and drawn

for lawful consideration arising by virtue of Section 118(a) and

Section 139 of NI Act, the testimony of the complainant must

be of such a character as to be believed as gospel truth because

the complainant has accepted that there was no witness to the

transaction. The perusal of oral as well as documentary

evidence produced by the complainant shows that there is no

mention in the notice sent to the accused that the alleged

amount of money was given to the accused as a loan. Even in

the complaint the said fact is not pleaded. As per the pleadings

in the complaint, since the accused and the complainant had

frequent money transactions with each other; therefore, the

accused gave the complainant a cheque bearing

No.30784136344 of State Bank of India Branch Karera. In his

examination in chief also the complainant has not stated that

the alleged money was given as a loan. Only in cross-

examination the complainant uttered a single sentence that he

-( 10 )- Cr.A.No.652/2017

gave the money as a loan. However, the time, date and place of

alleged transaction was not mentioned in the notice and

complaint. Therefore, mere saying that the money was given as

a loan itself is not sufficient to prove that the cheque was given

for discharge of any legally enforceable debt or other liability.

13. According to the complainant the huge amount of money

allegedly given to the accused was arranged by selling the

lands but there is no proof to show that the complainant was a

land lord and sold his lands. The complainant did not produce

any books of accounts or any other proof to show how he

managed to arrange so much money. Therefore, his financial

competence to lend such a huge amount is also not found to be

proved.

14. Consequently, the presumption of existence of a legally

enforceable debt can not be drawn as it has been rebutted by the

circumstances itself as discussed above.

15. The Apex Court in the case of Krishna Janardhan Bhat

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v. Dattaraya G. Hegde, 2008(4) SCC 54 had observed that :

23. "An accused for discharging the burden of proof placed upon him under a statute need not examine himself. He may discharge his burden on the basis of the materials already brought on records. An accused has a constitutional right to maintain silence. Standard of proof on the part of an accused and that of the prosecution in a criminal case is different." It was further observed-

26. "A statutory presumption has an evidentiary value. The question as to whether the presumption stood rebutted or not, must, therefore, be determined keeping in view the other evidences on record. For the said purpose, stepping into the witness box by the appellant is not imperative. In a case of this nature, where the chances of false implication cannot be ruled out, the background fact and the conduct of the parties together with their

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legal requirements are required to be taken into consideration."

"45. We are not oblivious of the fact that the said provision has been inserted to regulate the growing business, trade, commerce and industrial activities of the country and the strict liability to promote greater vigilance in financial matters and to safeguard the faith of the creditor in the drawer of the cheque which is essential to the economic life of a developing country like India. This, however, shall not mean that the courts shall put a blind eye to the ground realities. Statute mandates raising of presumption, but it stops at that. It does not say how presumption drawn should be held to have rebutted. Other important principles of legal jurisprudence, namely presumption of innocence as human rights and the doctrine of reverse burden introduced by Section 139 should be delicately balanced. Such balancing acts,

-( 13 )- Cr.A.No.652/2017

indisputably would largely depend upon the factual matrix of each case, the materials brought on record and having regard to legal principles governing the same."

16. The Hon'ble Supreme court in the case of Basalingappa

v. Mudibasappa, (2019) 5 SCC 418 has held that inference of

preponderance of probabilities can be drawn not only from the

materials brought on record by the parties but also by reference

to the circumstances upon which they rely.

17. In the light of above principles laid down by the Apex

Court the learned trial court has rightly hold that the cheque in

question was not issued by the accused for the discharge of his

legal liability as the presumption stood rebutted by the

circumstances itself. Consequently, it can be said that no legal

liability exists in favour of the complainant, thus, the second

ingredient to the offence under section 139 of NI Act does not