Orissa High Court
Sunil Jhunjhunwala vs Natabar Moharana ...... Opp. Party on 30 May, 2025
Author: Savitri Ratho
Bench: Savitri Ratho
IN THE HIGH COURT OF ORISSA AT CUTTACK
CRLLP No. 30 of 2008
An application under Section 378(4) of the Code of Criminal Procedure
challenging the judgment dated 14.03.2007 passed by the learned
J.M.F.C., Cuttack in I.C.C. Case No. 257 of 2005/Trial No. 1251 of 2006.
--------------
Sunil Jhunjhunwala ...... Petitioner
-versus-
Natabar Moharana ...... Opp. Party
--------------------------------------------------------------------------
For Petitioner : Mr. Durgadatta Mohapatra, Adv.
For Opp. Party : Ms. Anima Kumari Dei, Adv.
----------------------------------------------------------------------------
CORAM:
HONOURABLE MISS JUSTICE SAVITRI RATHO
JUDGMENT
30.05.2025
Savitri Ratho, J This application under Section 378(4) of Cr.P.C. has
been filed challenging the acquittal of the accused - opposite party
(in short "opp. party") of the offence punishable under Section 138
of the Negotiable Instruments Act, 1881 (hereafter 'N.I. Act') by
judgment dated 14.03.2007 passed by the learned J.M.F.C.,
Cuttack in I.C.C. Case No. 257 of 2005/Trial No. 1251 of 2006.
2. The opp. Party-Natabar Moharana faced trial in the Court
of learned J.M.F.C., Cuttack in I.C.C. Case No. 257 of 2005/Trial
No. 1251 of 2006 for offence punishable under Section 138 of the
N.I. Act. The learned Trial Court vide impugned judgment and
order dated 14.03.2007 found the petitioner guilty under section
138 of the N.I. Act and sentenced him to undergo S.I. for a period
of six months and further directed under Section 357(3) of Cr.P.C.
to pay a compensation of Rs.40,000/- to the petitioner within a
period of three months for the loss suffered by him, failing with the
petitioner would be at liberty to realize the same through process of
Court.
The opp. party preferred Criminal Appeal No.24 of 2007
in the Court of learned Ad hoc Additional Sessions Judge, FTC
No.II, Cuttack and the learned Appellate Court vide impugned
judgment and order dated 30.11.2007 held that the learned
Magistrate has committed an error in not appreciating the spirit of
presumption as enumerated in Section 139 of the N.I. Act and
allowed the appeal and set aside the conviction and sentence
passed by the learned Magistrate.
CASE OF COMPLAINANT
3. The allegation of the complainant - petitioner in brief is
that the opp. party being the proprietor of M/s Ruchika Distributor
has business transaction with the petitioner who was the proprietor
of M/s Ayush Agencies, who deals with tea and Mosquito coils.
During the business transaction an outstanding of Rs. 31,045/-
accrued against the opp. party and to clear the debt and liability, he
issued a cheque bearing no. 404007 dated 29.01.2005 drawn on
SBI, Sampur Branch to the petitioner and the petitioner presented
the said cheque at Indian Overseas Bank, Sayed Seminary Brach
on the same day which was dishonored on 03.02.2005 and returned
to the petitioner unpaid. On 15.02.2005, the petitioner sent a
demand notice to the opp. party. The postal agent (Post Peon) of
Taradapada post office took several steps to deliver the notice from
16.02.2005 and returned the notice with a remark "Ruchika
Distributor Abolished and avoids to take delivery". There after the
petitioner filed a complaint case vide I.C.C No: 257/2005.
DEFENCE PLEA
4. The defence plea was that false allegations had been made
by the complainant. During his examination under Section - 313
Cr.P.C., the opp. party took the plea that as Distributor of Bell
India Ltd, he had given a blank cheque for security purpose to one
Binay Kumar Nandy sales representative of Bell India Ltd and the
cheque was lost. He used to lift goods from the complainant (Super
Stockist of Bell India Ltd.) on cash basis and there were no
outstanding dues.
WITNESSES
5. The complainant examined himself as P.W 1 and P.W.2
Bhagirathi Das is the postman who tried to deliver the demand
notice on the accused.
The defence has examined two witnesses. D.W.1 Binaya
Kumar Nandi, sales representative of Bells Consumer India Ltd.
and D.W.2 Harish Chandra Panda, Area Sales Manager of Bells
Consumer India Ltd.
P.W.1 is the complainant in this case. He had stated in
his evidence that he is the proprietor of Ms. Ayush Agencies and is
a wholesaler for mosquito coils and tea. He was appointed as
superstockist for Bell Consumer Care Ltd. and was supplying
goods to the accused who was appointed as distributor under him
for Jagatsinghpur area. The accused had issued the cheque for
outstanding liability of Rs. 31,045/-. But it was dishonored when
presented in the bank on 03.02.2005. He sent demand notice to the
accused on 15.02.2005, but he avoided to receive it and it was
returned with the postal endorsement that he avoided to receive the
notice.
P.W 2 is the postal peon who has stated that the notice
could not be served on the accused in spite of a number of attempts
and was returned unserved with the remark - Ruchika Distributors
abolished and avoided to take delivery.
D.W.1 and D.W.2 are former employees of Bell
Consumer Care. D.W. 1 has stated about the opp. party handing
over of the blank cheque to him and he had handed it over to
D.W.2. D.W.2 has stated that he misplaced the cheque in the
office of the complainant and that it has been misused.
EXHIBITS
6. The prosecution exhibited seven documents. Ext.1is the
cheque No. 404007 dated 29.01.2005, Ext.2 is the deposit slip,
Exts. 3 and 4 are the cheque return memos. Ext.5 if the copy of
notice dated 15.02.2005 sent to the accused Ext.6 is the postal
receipt and Ext.7 is the postal regd. packet.
The defence exhibited five documents. Ext.A is the
appointment offer dated 14.06.2004, Ext.B is the counter file dated
05.07.2004, Ext. C is the officer of appointment of Harish Ch.
Panda dated 31.03.2004, Ext.D is the money receipts dated
05.10.2004 and Ext.E is the money receipt dated 26.10.2004.
JUDGMENT OF THE LEARNED TRIAL COURT
7. The learned trial Court framed the following points for
determination :
"(i) Whether the accused had issued a cheque for amount
account in SBI, Sampur Branch in favour of the firm of the
complainant, towards discharge of his outstanding liability ?
(ii) Whether the said cheque was dishonoured for
reasons of "Refer to drawer"?
(iii) Whether the complainant had served a notice on the
firm of the accused u/s 138 (b) N.I. Act ?
(iv) Whether the accused had received the said notice
sent by complainant?
(v) Whether the accused had not paid the dues to the
complainant even after the receipt of the legal notice ?"
On analysis of materials and evidence on record, the
learned trial court arrived at the following findings:
(i) The accused had business transactions with the complainant.
ii) It is the defence argument that although transaction existed,
there were no debts.
iii) It came to a conclusion that the opp. party had business
transaction with the complainant and was receiving goods from
him and had issued cheque for this. It has not been proved that the
complainant got the cheque by unlawful means so it can be
presumed under Section - 118 of the N.I. Act that he was the
holder in due course. The opp. party had avoided delivery of
notice. In view of the presumption under Section 139 of N.I. Act,
the opp. party was convicted 138 N.I. Act and sentenced to
undergo S.I for six months and to pay compensation of Rs.40,000/-
to the complainant.
JUDGMENT OF THE LEARNED APPELLATE COURT
8. The learned Appellate Court came to hold that the
learned Magistrate has committed an error in not appreciating the
spirit of presumption as enumerated in Section 139 of the N.I. Act
for which the appeal was allowed and the conviction of the opp.
party set aside.
SUBMISSIONS
9. Mr. Durgadatta Mohapatra, learned counsel for the
petitioner has submitted submits that the learned appellate court
without appreciating the3 evidence available on record against the
opp. party and without discussing the evidence of witnesses has
arrived at a wrong conclusion. He further submits that the learned
trial Court after discussing the evidence of the witnesses and the
statement of the accused that he had issued the cheque to clear
outstanding dues, had rightly held that the opp. party had issued the
cheque in favour of the petitioner for discharge of his liability and
had committed an offence under Section 138 of N.I. Act. As the
findings of the learned trial court were based on the evidence on
record, the learned appellate court should have accepted the
findings and dismissed the appeal. The learned Appellate Court
should not have taken a contrary view in acquitting the opp. party
as the learned trial Court after appreciating the evidence from all
angles and taking into consideration the exhibited documents
marked by the petitioner had convicted the opp. party. As the opp.
party did not file any document to show that the defence witnesses
was working as sales representative and area Manager in M/s. Bell
Consumer Care India Ltd their evidence should have been
disbelieved. D.W.1 and D.W 2 have stated that the cheque had
been lost but apparently they have not filed any FIR regrading this.
The accused has stated that he intimated the bank to stop payment
but has not filed any supporting document. But this has been
accepted by the learned Appellate Court to be a probable defence
No reliable evidence has been adduced by the accused as to how
the entire counterfoil of the cheque book came to the possession of
D.W.1 instead of the accused. In support of his submissions, Mr.
Mohapatra, learned counsel for the petitioner relied on the decision
of the Supreme Court in the case of Bir Singh vs. Mukesh Kumar
reported in (2019) 74 OCR (SC).
10. Ms. Anima Kumari Dei, learned counsel for the opp.
party submitted that the learned lower appellate Court has rightly
acquitted the opp. party holding that both sides were under
business transactions and initial burden required for shifting the
onus to the complainant has been discharged by the defence by
adducing defence evidence. Under such circumstances burden of
proof of existence of liability or debt has not been proved by the
prosecution by bringing on record the documents of business
account. As existence of liability was not proved by the
complainant, the impugned judgment of acquittal does not call for
any interference. She has drawn attention of the Court to the
admission of the complainant during cross examination where he
has admitted that he has not mentioned the last dates of transaction
and amount of transaction and not filed any documents in support
of such transaction. Ms. Dei, learned counsel for the petitioner
relied on the decisions of the Supreme Court in the cases of :-
i) M/s. Shree Daneshwari Traders vs. Sanjay Jain and another
: (2019) 16 SCC 83 (Para 20) ; and
ii) Rangappa vs. Sri Mohan : (2010) 11 SCC 441.
STATUTORY PROVISIONS
11. The provisions of Section 138 and 139 of the Negotiable
Instruments Act, 1881 are extracted below : -
"Section 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 to 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.
Explanation.--For the purposes of this section, "debt or
other liability" means a legally enforceable debt or other
liability."
Section 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."
JUDICIAL PRONOUNCEMENTS
12. In the case of Bir Singh (supra), the Supreme Court has
held that if a signed blank cheque is signed and voluntarily
presented to a payee, the latter may fill up the amount and other
particulars and this does not invalidate the cheque. The onus would
be on the accused to prove that the cheque was not in discharge of
a debt or liability.
In the case of M/s. Shree Daneshwari Traders (supra),
the Supreme Court has interalia held that - the accused in a trial
under Section 138 of the Act has two options. He can wither show
that consideration and debt did not exist or that under the particular
circumstances of the case the non-existence of consideration and
debt is so probable that a prudent man ought to suppose that no
consideration and debt existed. Rebut the statutory presumptions an
accused is not expected to prove his defence beyond reasonable
doubt as is expected of the complainant in a criminal trial.
In the case of Rangappa (supra), the Supreme Court has
held that presumption mandated by Section 139 does indeed
include existence of a legally enforceable debt and under Section
139 standard of proof for doing so is that of 'preponderance of
probabilities' if accused is able to raise a probable defence which
creates doubts about existence of a legally enforceable debt or
liability, prosecution can fail.
In the case of Krishna Janardhan Bhat vs Dattatraya G.
Hegde : 2008 (4) SCC 54 , the Supreme Court has held as follows:
"The courts must be on guard to see that merely on the
application of presumption as contemplated under Section
139 of the Negotiable Instruments Act, the same may not
lead to injustice or mistaken conviction. It is for the
aforementioned reasons that we have taken into
consideration the decisions operating in the field where
the difficulty of proving a negative has been emphasized. It
is not suggested that a negative can never be proved but
there are cases where such difficulties are faced by the
accused e,g,. honest and reasonable mistake of fact. In a
recent Article -The Presumption of Innocence and
Reverse Burdens : A Balancing Duty, published in
[2007] C.L.J. (March Part) 142 it has been stated :-
"In determining whether a reverse burden is
compatible with the presumption of innocence regard
should also be had to the pragmatics of proof. How
difficult would it be for the prosecution to prove guilt
without the reverse burden? How easily could an
innocent defendant discharge the reverse burden? But
courts will not allow these pragmatic considerations
to override the legitimate rights of the defendant.
Pragmatism will have greater sway where the reverse
burden would not pose the risk of great injustice
where the offence is not too serious or the reverse
burden only concerns a matter incidental to guilt. And
greater weight will be given to prosecutorial
efficiency in the regulatory environment.".
34. 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, 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."
ANALYSIS AND CONCLUSION
13. From a reading of the provisions and the judgments of the
Supreme Court , it is no longer res integra that while an Appellate
Court has full power to review, re-appreciate and reconsider the
evidence upon which the order of acquittal is founded, but if two
reasonable conclusions are available on the basis of the evidence
on record, the Appellate Court should not disturb the finding of
acquittal recorded by Court acquitting the accused, merely, because
the Appellate Court could have arrived at a different conclusion . .
There is also a double presumption of innocence of the accused for
the following reasons:-
i) The presumption of innocence which is available to an accused
in all criminal cases; and
ii) A competent Court has acquitted the accused,
14. But where the judgment acquitting the accused is totally
perverse and the findings have been arrived at by ignoring or
excluding relevant material or by taking into consideration
irrelevant or inadmissible material, then the Appellate Court would
be well within its powers to interfere with the said findings and set
aside the acquittal.
15. In view of the evidence on record and the discussion above,
I am of the view that the opposite party - accused has been able to
rebut the presumption that the cheque was issued in the discharge
of a legally enforceable debt and the view taken by the Trial Court
while acquitting him is a reasonable view based on the evidence on
the record and cannot be said to be perverse and therefore not liable
for interference .
16. I have carefully perused the judgment of the learned trial
Court and the learned appellate court and considered the
submissions of the learned counsel.
17. The complainant written in his complain petition that the
accused to pay Rs. 31,045 for balance payment but he also stated in
his cross examination "I have not mentioned the exact date of
transaction and the money, I have also not mention the last date
between me and the accused and the amount of such transaction."
The complainant has not filed any documents to indicate existence
of any legal liability or debt.
18. By examining D.W 1 and 2, the opp. party has been able to
dispel the presumption under Section - 139 of the N.I. Act that the
cheque in question had been received by the complainant for the
discharge in whole or in part of any debt or liability.
19. The evidence of D.W.1 and D.W. 2 and failure of the
complainant to adduce any documentary evidence to show that any
dues were outstanding against the opp. party, causes a doubt to rise
in the mind of the Court that whether the cheque was issued for
discharge of any liability.
20. I am therefore not satisfied that leave should be granted to
the petitioner to file appeal against the judgment of acquittal.
21. The CRLLP is dismissed.
...........................
(Savitri Ratho, J)
Orissa High Court, Cuttack.
The 30th May, 2025
S.K. Behera/ Puspa
Signed by: PUSPANJALI MOHAPATRA
Designation: Personal Assistant
Reason: Authentication
Location: Orissa High Court
Date: 06-Jun-2025 19:05:58
