Shri Krishan Pachori vs Manoj Kushwaha
2023 Latest Caselaw 15079 MP

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      IN THE HIGH COURT OF MADHYA PRADESH
                              AT G WA L I O R
                                      BEFORE
       HON'BLE SHRI JUSTICE SANJEEV S KALGAONKAR

                 CRIMINAL REVISION No. 4895 of 2019

 BETWEEN:-
 SHRI KRISHAN PACHORI S/O LATE SHRI BHOGI RAM
 PACHORI, AGED ABOUT 48 YEARS, OCCUPATION:
 AGRICULTURIST R/O BEHIND LEATHER FACTORY
 ADJACENT TO TIWARI BHOOSA TAAL MORAR DISTT
 GWALIOR (MADHYA PRADESH)
                                                                    .....PETITIONER
 (SHRI SANJAY GUPTA - ADVOCATE )

 AND
 MANOJ KUSHWAHA S/O SHRI HOTAM SINGH
 KUSHWAHA, AGED ABOUT 26 YEARS, OCCUPATION:
 PVT. JOB R/O 118 ADITYA NAGAR THASIL MORAR
 DISTT. GWALIOR (MADHYA PRADESH)
                                                                  .....RESPONDENT
 (SHRI SANJAY MISHRA - ADVOCATE)
-----------------------------------------------------------------------------------------
                 Reserved on                  :      09.08.2023
               Pronounced on                  :      13.09.2023
----------------------------------------------------------------------------------------
       This petition having been heard and reserved for order, coming
on for pronouncement this day, Justice Sanjeev S. Kalgaonkar
pronounced the following:
                                       ORDER

This Criminal Revision under section 397 read with Section 401 of

Cr.P.C is filed assailing the judgment dated 20.09.2019 passed by learned

XI Additional Sessions Judge, Gwalior in Cr.Appeal No.299 of 2018

whereby, the order dated 06.07.2018 of Mr. Rajendra Singh, Judicial

Magistrate First Class, Gwalior passed in Complaint Case No.6473 of

2015 was affirmed convicting the petitioner under Section 138 of

Negotiable Instrument Act.

For the sake of convenience, petitioner Shri Krishan Pachori will

be referred to as `accused' and respondent Manoj Kushwaha will be

referred to as `complainant' hereinafter.

Exposition of facts giving rise to this revision petition, is as under:

1. Complainant filed a complaint under Section 138 of the

Negotiable Instrument Act interalia, stating that the accused is his close

acquaintance. On 02.01.2015, Shri Krishan Pachori requested for loan of

Rs.6,27,500/- for his personal need. He gave requested amount in

presence of Goutam Singh Kushwah and Amrit Lal Kushwah. Accused

gave two cheques as security for the loan amount in presence of the

witnesses.

2. Complainant presented Cheque No.224639 dated 20.02.2015

for amount of Rs. 3,00,000/- and Cheque No.224640 dated 25.01.2015

for amount of Rs.3,27,500/- to the Bank of India, Branch- Morar,

Gwalior. Both cheques were returned dishonored due to insufficiency of

funds in the account of accused Shri Krishan Pachori. Complainant sent

demand notice through registered post on 16.04.2015. Despite service of

notice accused did not repay the amount of cheque. Therefore, complaint

for offence punishable under Section 138 of the N.I. Act, was filed.

Learned trial Court, after trial, convicted accused Shri Krishan

Pachori vide judgment dated 06.07.2018 passed in RCT No.6473 of 2015

for offence punishable under Section 138 of the N.I. Act and released him

on probation under Section 12 of the Probation of Offenders Act 1958.

Learned trial Court directed the accused to pay compensation of

Rs.8,43,141/- under Section 357(3) of Cr.P.C, failing which, to undergo

simple imprisonment for six month.

Feeling aggrieved by the judgment of conviction and direction to

pay the compensation, Shri Krishan Pachori filed Criminal Appeal before

the Sessions Court, Gwalior. Learned XIth ASJ, Gwalior vide judgment

dated 20th September, 2019 passed in Cr.A. No.299 of 2018, affirmed the

conviction and the direction to pay compensation and rejected the appeal.

The impugned judgment is assailed in this criminal revision on

following grounds :

1. Learned trial Court and the first appellate Court failed to consider the

existence of legally recoverable debt or liability in absence of positive

evidence. In this regard, the judgments of both the Courts suffer from

illegality. The onus to prove existence of legally recoverable debt or

liability was on the complainant. He failed to prove his financial

capacity to extend loan of Rs.6,27,500/- to the accused;

2. The cheques in question were given as security for purchasing a plot

from the complainant. Despite payment of full consideration, the

complainant with malafide intention misused the cheques. Learned trial

Court and the first appellate Court committed grave error in overlooking

the unrebutted evidence adduced by the accused in this regard.

3. The story of complainant that he had advanced loan to the accused, is

not supported by any documentary evidence. Therefore, the story of loan

was doubtful. The accused has rebutted the presumption.

On these grounds, it is submitted that the impugned judgment

deserves to be set-aside.

Learned counsel for the revision-petitioner has drawn attention of

this Court towards Para 14 of the impugned judgment and submitted that

the learned appellate Court did not consider absence of documentary

evidence with regard to availability of loan amount and merely on the

basis of conjectures and surmises held that the complainant had sufficient

sources to show availability of Rs.6,27,500/-. Learned counsel further

contends that despite making suggestions in cross-examination, the

complainant failed to show availability of the amount by any

documentary evidence, such as income tax return or statement of

accounts. Therefore, both the courts committed grave error in finding

existence of legally recoverable debt or liability.

Learned counsel for the petitioner relying on the judgment of

Supreme Court in the case of Vijay Vs. Laxman and another 2013 (2)

JLJ 1 and Basalingappa Vs. Mudibasappa AIR 2019 SC 1983

submitted that existence of legally recoverable debt or liability needs to

be proved by the complainant for making out an offence punishable under

Section 138 of the N.I Act.

Per contra, learned counsel for the respondent submitted that the

accused failed to rebut legal presumption with regard to existence of

legally recoverable debt or liability. The defence of the accused in this

regard stands demolished by his own statement in Paras 8, 9 and 13 of his

cross-examination, wherein, he has stated that he has never reported for

giving of cheques in question as security for transaction of sale of plot.

Both the Courts have rightly convicted the accused. No patent illegality is

reflected in either of the judgments. Therefore, the revision petition

deserves to be dismissed.

Heard learned counsel for both the parties and perused the record.

Under Section 397 of the Cr.P.C, the Court is vested with the power

to call for and examine the record of any inferior Court for the purpose of

satisfying itself as to legality and regularity of any proceedings or order

made in a case. The object of this provision is to correct the patent defect

or an error of jurisdiction or the perversity which has crept in the

proceedings.

However, the High Court, in revision, exercises supervisory

jurisdiction of a restricted nature. It cannot re-appreciate the evidence, as

Second Appellate Court, for the purposes of determining whether the

concurrent finding of fact reached by the learned Magistrate and the

learned Additional Sessions Judge was correct. Recently, in case of

Malkeet Singh Gill v. State of Chhattisgarh, reported in (2022) 8 SCC

204, the Supreme Court observed as under-

"10. Before adverting to the merits of the contentions, at the outset, it is apt to mention that there are concurrent findings of conviction arrived at by two courts after detailed appreciation of the material and evidence brought on record. The High Court in criminal revision against conviction is not supposed to exercise the jurisdiction alike to the Appellate court and the scope of interference in revision is extremely narrow. Section 397 of the Criminal Procedure Code (in short "CrPC") vests jurisdiction for the purpose of satisfying itself or himself as to the correctness, legality or propriety of any finding, sentence or order, recorded or passed, and as to the regularity of any proceedings of such inferior court. The object of the provision is to set right a patent defect or an error of jurisdiction or law. There has to be

well-founded error which is to be determined on the merits of individual case. It is also well settled that while considering the same, the Revisional Court does not dwell at length upon the facts and evidence of the case to reverse those findings."

(Duli Chand v. Delhi Admn.(1975) 4 SCC 649; State of Maharashtra v. Jagmohan Singh Kuldip Singh Anand (2004) 7 SCC 659also relied) Learned counsel for petitioners relying on the judgment of Krishan

Janardhan Bhat Vs. Dattatraya G. Hegde A.I.R. 2008 SC 1325

contends that Section 139 of Negotiable Instrument Act provides for

presumption of debt or other liability in favour of holder of a cheque.

There is no presumption with regard to existence of legally recoverable

debt or other liability, therefore, in order to establish offence under

Section 138 of Negotiable Instrument Act, the complainant has to prove

beyond doubt existence of legally recoverable debt or liability.

Chapter XIII of the Negotiable Instruments Act, 1881 provides for

"Special Rules of Evidence". Section 118 provides for presumptions as

to negotiable instruments as follows:

Presumptions as to negotiable instruments.-- Until the contrary is proved, the following presumptions shall be made:

(a) 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 accepted, indorsed, negotiated or transferred for consideration;

(b) as to date : that every negotiable instrument bearing a date was made or drawn on such date;"

Section 139 of the Act, 1881 provides for presumption in favour of holder

as under-

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."

The Supreme Court Bharat Barrel & Drum Mfg. Co. Vs. Amin

Chand Payrelal, (1999) 3 SCC 35, held that once execution of the

promissory note is admitted, the presumption under Section 118(a) would

arise that it is supported by consideration.

"12. Upon consideration of various judgments as noted hereinabove, the position of law which emerges is that once execution of the promissory note is admitted, the presumption under Section 118(a) would arise that it is supported by a consideration. Such a presumption is rebuttable. The defendant can prove the non-existence of a consideration by raising a probable defence. If the defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the plaintiff who will be obliged to prove it as a matter of fact and upon his failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument. The burden upon the defendant of proving the non-existence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies. In such an event, the plaintiff is entitled under law to rely upon all the evidence led in the case including that of the plaintiff as well. In case, where the defendant fails to discharge the initial onus of proof by showing the non-existence of the consideration, the plaintiff would invariably be held entitled to the benefit of presumption arising under Section 118(a) in his favour. The court may not insist upon the defendant to disprove the existence of consideration by leading direct evidence as the existence of negative evidence is neither possible nor contemplated and even if led, is to be seen with a doubt. The bare denial of the passing of the consideration apparently does not appear to be any defence. Something which is probable has to be brought on record for getting the benefit of shifting the onus of proving to the plaintiff. To disprove the presumption, the defendant has to bring on record such facts and circumstances upon consideration of which the court may either believe that the consideration did not exist or its non-existence was so probable that a prudent man would, under the circumstances of the case, shall act upon the plea that it did not exist." ( emphasis added)

In case of Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513,

the Supreme Court examined the application of above mentioned statutory presumptions and laid down :

"18. Applying the definition of the word "proved" in Section 3 of the Evidence Act to the provisions of Sections 118 and 139 of the Act, it becomes evident that in a trial under Section 138 of the Act a presumption will have to be made that every negotiable instrument was made or drawn for consideration and that it was executed for discharge of debt or liability once the execution of negotiable instrument is either proved or admitted. As soon as the complainant discharges the burden to prove that the instrument, say a note, was executed by the accused, the rules of presumptions under Sections 118 and 139 of the Act help him shift the burden on the accused. The presumptions will live, exist and survive and shall end only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability. A presumption is not in itself evidence, but only makes a prima facie case for a party for whose benefit it exists.

19. The use of the phrase "until the contrary is proved" in Section 118 of the Act and use of the words "unless the contrary is proved" in Section 139 of the Act read with definitions of "may presume" and "shall presume" as given in Section 4 of the Evidence Act, makes it at once clear that presumptions to be raised under both the provisions are rebuttable. When a presumption is rebuttable, it only points out that the party on whom lies the duty of going forward with evidence, on the fact presumed and when that party has produced evidence fairly and reasonably tending to show that the real fact is not as presumed, the purpose of the presumption is over.

20. ... The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not insist in every case that the accused should disprove the non-existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, 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."

( emphasis added) The Supreme Court in case of Rangappa Vs. Sri Mohan, (2010) 11

SCC 441 held that Section 139 of the Act is an example of a reverse onus

and imposes an evidentiary burden on the accused which can be

discharged by establishing preponderance of probabilities of the defence.

After referring to catena of judgments, the Supreme Court held that the

presumption mandated by Section 139 of the Act includes the existence

of a legally enforceable debt or liability. In para 26, it was laid down-

"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."(emphasis added)

Manoj Kushwaha PW-1 stated that he has advanced loan on

Rs.6,27,500/- to the accused on 02.01.2014 in presence of Hotam Singh

and Amrit Lal Kushwaha. The accused has promised to pay Rs.3,27,500/-

in January, 2015 and remaining Rs.3,00,000/- in February, 2015 and to

secure the payment, the accused has issued Cheque No.224640 dated

25.01.2015 for amount of Rs.3,27,500/- and Cheque No.224639 dated

20th February, 2015 for amount of Rs.3,00,000/-.

The testimony of Manoj Kushwaha PW-1 is duly supported by

Hotam Singh PW-2 and Amrit Lal Kushwaha CW-1. Amrit Lal was

examined as Court witness in compliance with the order dated

08.01.2018. Further, Shri Krishan Pachori (DW-1) has admitted execution

of cheques in question Exhibit (P-1) and Exhibit (P-3). Thus, the

execution of Cheques in question was proved by complainant as well as

admitted by the accused. In such a scenario, the presumption under

Sections 118 and 139 would operate in favour of complainant- holder of

cheque untill the contrary is proved by the accused, i.e, the cheque was

not issued for consideration and in discharge of any debt or liability.

The Supreme Court in case of Basalingappa Vs. Mudibasappa

AIR 2019 SC 1983, summarised the principles regarding application of

presumption under Sections 118(a) and 139 of the Act, as under-

25.1. Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.

25.2. The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.

25.3. To rebut the presumption, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence. 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.

25.4. That it is not necessary for the accused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden.

25.5. It is not necessary for the accused to come in the witness box to support his defence.

Shri Krishan Pachori (DW-1) stated that he has purchased a plot

from family of the complainant. He had issued a cheque for amount of

Rs.6 lakhs and for security of clearance of such cheque, he had issued

two more blank cheques on assurance of complainant Manoj that he will

return the blank cheques after encashment of the cheque issued towards

payment of consideration amount for sale of plot.

In cross-examination, Shri Krishan Pachori (DW-1) has admitted

that the consideration amount for the registry of plot was Rs.6,85,900/-,

he had issued Cheque No.224637 dated 15.04.2015 for amount of

Rs.6,89,500/- which was also mentioned in the sale deed (Exhibit D-1).

The Cheque No.224637 was encashed.

Shri Krishan Pachori (DW-1) failed to provide plausible

explanation as to why there was difference between the amount of cheque

issued towards consideration of the sale of plot and total amount of

cheques in question, issued towards security of encashment of other

cheque. Shri Krishan DW-1 in Para 13 of his cross-examination admitted

that despite encashment of cheque, he has not asked for return of the

blank cheques from Manoj. Shri Krishan Pachori (DW-1) admitted that

he has not given any notice or complaint to Police, he has not applied for

stoppage of payment of the cheques. The conduct of accused as revealed

by cross-examination, manifests the improbability and falsity of defence.

Learned trial Court and the First Appellate Court considered these aspects

in detail and committed no error in holding that no inference can be

drawn that cheques in questions were issued as guarantee for encashment

of other cheque issued for payment of consideration amount. Thus, the

accused failed to establish probability of his defence.

Learned counsel for the petitioner contends that complainant has

failed to prove his financial capacity to extend loan of Rs.6,27,500/-. The

complainant has failed to submit documentary evidence to establish

availability of the amount alleged to be advanced as loan to the accused.

The accused has failed to establish his defence even on

preponderance of probability, therefore, there was no occasion to shift

onus of proof on the complainant to establish existence of legally

recoverable debt or liability. Manoj Kushwaha (PW-1), Hotam Singh

(PW-2) and Amrit Lal Kushwaha (CW-1) also stated about availability of

funds sufficient to advance the loan, therefore, considering the statutory

presumption in favour of holder of cheque absence of documentary

evidence to establish financial capacity of the complainant is immaterial.

In opinion of this Court, no patent illegality, perversity or

impropriety is made out in the concurrent finding of conviction by

learned Trial Court and the First Appellate Court. The sentence imposed

by learned trial Court and affirmed by the First Appellate Court is proper

and appropriate. Consequently, no interference in concurrent finding of

conviction of petitioner for offence punishable under Section 138 of the

Negotiable Instruments Act and sentence imposed, is called for in

exercise of revisional jurisdiction.

The revision-petition being devoid of merit, is hereby dismissed.

(SANJEEV S KALGAONKAR) JUDGE Rks/vijay

VIJAY Digitally signed by VIJAY TRIPATHI DN: c=IN, o=HIGH COURT OF MADHYA PRADESH BENCH GWALIOR, ou=HIGH COURT OF MADHYA PRADESH BENCH

TRIP GWALIOR, 2.5.4.20=663cb09dd950bfc3ea7 ed4f02d97ddae5364f1d4b042d bc59921b76e812d2d6b, postalCode=474001, st=Madhya Pradesh,

ATHI serialNumber=58392D8C4E7C96 93BFEEB5B46B3CA006F1127E89 008952BBEC528CE4D82551BD, cn=VIJAY TRIPATHI Date: 2023.09.13 17:56:35 +05'30'