Punjab-Haryana High Court
Erfan Timber vs Balwinder Singh on 18 January, 2024
Neutral Citation No:=2024:PHHC:006789
CRM-A-208-2019 1 2024:PHHC:006789
227 IN THE HIGH COURT OF PUNJAB & HARYANA
AT CHANDIGARH
CRM-A-208-2019
Reserved on: 09.01.2024
Pronounced on: 18.01.2024
Erfan Timber .....Applicant-Appellant
Versus
Balwinder Singh ....Respondent
CORAM: HON'BLE MR. JUSTICE HARPREET SINGH BRAR
***
Present: - Mr. Alok Mittal, Advocate
for the applicant-appellant
***
Harpreet Singh Brar, J.
1. The present application under Section 378(4) of the Code of Criminal
Procedure, 1973 (hereinafter 'Cr.P.C.') is preferred against the impugned judgment
of acquittal dated 16.11.2018 passed by learned Judicial Magistrate Ist Class,
Yamunanagar at Jagdhri in complaint under Section 138 of the Negotiable
Instruments Act (hereinafter 'NI Act').
FACTUAL BACKGROUND
2. Briefly, the facts are that the applicant-complainant engaged in
business of timber with the respondent-accused. In July 2016, the respondent placed
an order for fuel wood with the applicant amounting to Rs. 1,60,925/- against credit
memo/bill no. 05 dated 16.07.2016, no. 06 dated 18.07.2016, no. 07 dated
20.07.2016, no. 08 dated 22.07.2016 and no. 09 dated 25.07.2016. To discharge his
liability, the respondent issued a cheque bearing no. 353065 dated 17.08.2016 for a
sum of Rs. 1,60,000/-. On presentation, the cheque was dishnonoured vide memo
dated 18.08.2016 with the remarks- 'Exceeds Arrangement.' Thereafter, a legal
notice dated 26.08.2016 was issued to the respondent. Since the respondent failed to
make the requisite payment, the present complaint was filed on 15.09.2016.
1 of 8
Neutral Citation No:=2024:PHHC:006789
CRM-A-208-2019 2 2024:PHHC:006789
3. On finding a prima facie case against the respondent, the learned trial
Court summoned him for having committed an offence punishable under Section
138 of the NI Act. The respondent appeared, secured his bail after which a notice of
accusation was served upon him vide order dated 29.09.2017, to which he pleaded
not guilty and claimed trial.
4. The complainant examined 2 witnesses to establish its case. Statement
of the accused under Section 313 of Cr.P.C was recorded wherein he denied all the
incriminating evidence put to him and pleaded false implication. Subsequently, the
respondent-accused was acquitted vide the impugned judgment dated 07.07.2023 as
he could successfully rebut the presumption under Section 139 of the NI Act.
CONTENTIONS
5. Learned counsel for the applicant assails the impugned judgment on
the ground that the learned trial Court has failed to consider that the signature on
the disputed cheque was admitted and presumption under Section 139 of the NI Act
has not been rebutted by the respondent-accused. The learned trial Court was
erroneously swayed by the fact that no memo/forms were produced on record as the
applicant had duly proved the bills showing purchase of the said goods by the
respondent. Further, the respondent has not led any evidence to justify the stand
taken by him in his statement recorded under Section 313 of the Cr.P.C. thereby
failing to rebut the presumptions under Sections 118 and 139 of the NI Act. No
explanation is forthcoming on behalf of the respondent regarding the purpose for
which the disputed cheque was issued. As such, the learned trial Court has fallen
into error by passing the judgment of acquittal in favour of the respondent as the
conduct of the respondent satisfies all the ingredients for the offence defined under
Section 138 of the NI Act. Reliance in this regard is placed on Sumeet Vij v. M/s
Paramount Tech Fab Industries 2021 AIR SC 1281, Uttam Ram v. Devinder
2 of 8
Neutral Citation No:=2024:PHHC:006789
CRM-A-208-2019 3 2024:PHHC:006789
Singh Hudan and Another 2020(1) R.C.R(Criminal) 110 and K.S. Ranganatha
v. Vittal Shetty 2022(1) R.C.R(Criminal) 445.
OBSERVATION AND ANALYSIS
6. This Court has heard the learned counsel for the applicant and perused
the record with his able assistance.
7. A three Judge bench of the Hon'ble Supreme Court in M/s Gimpex
Private Limited v. Manoj Goel 2021(4) R.C.R.(Criminal) 404 has laid down the
ingredients of the offence as defined under Section 138 of the NI Act. Speaking
through Justice Dr. D.Y. Chandrachud, the following was observed:
"25. The ingredients of the offence under Section 138 are:
(i) The drawing of a cheque by person on an 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;
(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
arranged to be paid from that account;
(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."
8. It is pertinent to discuss the presumptions created in favour of the
complainant under the NI Act in terms of Sections 118 and 139 for just and proper
adjudication of the instant case. The same are reproduced as under:
Section 118: 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;
3 of 8
Neutral Citation No:=2024:PHHC:006789
CRM-A-208-2019 4 2024:PHHC:006789
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.
9. Section 139 of the NI Act uses the words "shall presume" which
makes it obligatory on the Courts to presume that the disputed cheque, once
executed, was issued in discharge of a legal liability. However, it is no longer res
integra that these presumptions are of a rebuttable nature. The accused is only
required to raise a probable defence casting a doubt on the existence of the liability
to the extent that a prudent man, in similar circumstances, is caused to believe that
such a debt or liability does not exist. The standard of proof here is required to
discharge the evidential burden is of preponderance of probabilities, as such, the
accused is not required to prove the negative as the same is neither possible nor
envisaged under the NI Act. The accused can rebut the presumptions by adducing
direct evidence on the record or by referring to the circumstances which includes
the contents of the complaint, legal notice, complainant's evidence before the trial
Court as well as his own statement under Section 313 of the Cr.P.C. and reply to
the legal notice. It must be noted that mere denial of the incriminating
circumstances cannot be considered as rebuttal, the accused must explain the
circumstances that would indicate his innocence. It is not mandatory for the
accused to adduce evidence as the material available on record itself can be looked
at from a new perspective. Once a satisfactory explanation has been presented by
the accused, the evidential burden shifts back to the complainant. However, at this
stage, the complainant cannot take shelter of the presumption under Section 139 of
the NI Act. Now, it is on the Court to assess the material available on record to
determine existence of guilt. Reliance in this regard can also be placed on the
judgments rendered by the Hon'ble Supreme Court in Basalingappa v.
4 of 8
Neutral Citation No:=2024:PHHC:006789
CRM-A-208-2019 5 2024:PHHC:006789
Mudibasappa (2019) 5 SCC 418 and Rohitbhai Jivanlal Patel v. State of Gujrat
and Another (2019) 18 SCC 106.
10. A two Judge bench of the Hon'ble Supreme Court in M.S. Narayana
Menon alias Mani v. State of Kerala and Anr 2006(6) SCC 39, speaking through
Justice S.B. Sinha, observed as follows:
"45. In Kundan Lal Rallaram v. Custodian, Evacuee Property,
Bombay [AIR 1961 Supreme Court 1316], Subba Rao, J., as the learned
Chief Justice then was, held that while considering the question as to
whether burden of proof in terms of Section 118 had been discharged or not,
relevant evidence cannot be permitted to be withheld. If a relevant evidence
is withheld, the court may draw a presumption to the effect that if the same
was produced might have gone unfavourable to the plaintiff. Such a
presumption was itself held to be sufficient to rebut the presumption arising
under Section 118 of the Act stating:
"...Briefly stated, the burden of proof may be shifted by
presumptions of law or fact, and presumptions of law or presumptions
of fact may be rebutted not only by direct or circumstantial evidence
but also by presumptions of law or fact. We are not concerned here
with irrebuttable presumptions of law."
A two Judge bench of the Hon'ble Supreme Court in Rajesh Jain v. Ajay
Singh 2023(4) R.C.R(Criminal) 800, opined as follows:
"55. ...Once the presumption under Section 139 was given effect to,
the Courts ought to have proceeded on the premise that the cheque was,
indeed, issued in discharge of a debt/liability. The entire focus would then
necessarily have to shift on the case set up by the accused, since the
activation of the presumption has the effect of shifting the evidential burden
on the accused. The nature of inquiry would then be to see whether the
accused has discharged his onus of rebutting the presumption. If he fails to
do so, the Court can straightaway proceed to convict him, subject to
satisfaction of the other ingredients of Section 138. If the Court finds that the
evidential burden placed on the accused has been discharged, the
complainant would be expected to prove the said fact independently, without
taking aid of the presumption. The Court would then take an overall view
based on the evidence on record and decide accordingly."
11. The reasoned analysis of the factual matrix of the case indicates that in
April, 2016, the respondent had bought timber worth Rs. 50,000/- from Himalyan
Timber run by one Brij Bhushan. It is alleged that the blank signed cheque issued
by the respondent to Brij Bhushan has been misused to lodge the present
complaint. The applicant-complainant had deposed that the original bills were
given to the accused while yellow coloured counter foil was kept by him for record
5 of 8
Neutral Citation No:=2024:PHHC:006789
CRM-A-208-2019 6 2024:PHHC:006789
in the bill book. Curiously, in spite of such deposition, the complainant himself
placed the original bills on record as Ex. C6 to Ex. C10. A perusal of the same
would indicate that none of the bills or the counter foils bear the signature of the
respondent-accused.
12. Admittedly, the applicant-complainant is a commission agent in the
timber business for over a decade. However, he could neither produce the I-form,
issued to the contactor from whom firewood is purchased by the commission agent,
or the M-form, which is deposited with the marketing committee in the name of the
contractor and the buyer, regarding the sale of fuel wood to the respondent. Further,
even if the transaction was made before the implementation of Goods and Service
Tax, the applicant-complainant still ought to bring something on record to prove
sale of fuel wood to the respondent. While the signatures on the cheque are not
disputed, the respondent-accused has denied existence of any legally enforceable
debt towards the petitioner. For the presumptions under Section 118 and 139 of the
NI Act to be put in action, the execution of the disputed cheque needs to be proved,
which necessarily requires for the complainant's case to have legs of its own. If the
complainant fails to do so, presumption under Section 139 of the NI Act is not
attracted. As such, the respondent has successfully rebutted the presumption and
explained the circumstances to point towards his innocence by the standard of
preponderance of probabilities in view of judgement rendered by this Court in
Varinder Singh v. Sandeep Kumar Chawla 2016(4) Law Herald 3197.
13. The power of the Appellate Court to unsettle the order of acquittal on
the basis of re-appreciation of the evidence is subject to the settled law that where
two views are possible and out of the two, one points towards the innocence of the
accused, the view which favours the accused should prevail over the other pointing
towards his guilt. Furthermore, the trial Court has the additional advantage of
closely observing the prosecution witnesses and their demeanour, while deciding
6 of 8
Neutral Citation No:=2024:PHHC:006789
CRM-A-208-2019 7 2024:PHHC:006789
about the reliability of the version of prosecution witnesses. (See H.D. Sundara
and others Vs. State of Karnataka, Criminal Appeal No.247 of 2011 decided on
26.09.2023 and Kali Ram v. State of H.P., 1973 (2) SCC 808). A Division bench
of this Court in the judgment passed in State of Haryana Vs. Ankit and others
passed CRM-A No.3 of 2022 decided on 06.07.2023 has held that presumption of
innocence further gets entrenched on the acquittal of accused by the trial Court.
14. A two Judge Bench of Hon'ble Supreme Court in Chandrappa and
others v. State of Karnataka, (2007) 4 SCC 415 has laid down the parameters
with regard to the power of appellate Court while dealing with an appeal against an
order of acquittal. Speaking through Justice C.K. Thakker, the following was held:
"42. From the above decisions, in our considered view, the
following general principles regarding powers of appellate Court
while dealing with an appeal against an order of acquittal emerge;
(1) An appellate Court has full power to review, re-appreciate and
reconsider the evidence upon which the order of acquittal is founded;
(2) The Code of Criminal Procedure, 1973 puts no limitation,
restriction or condition on exercise of such power and
an appellate Court on the evidence before it may reach its own
conclusion, both on questions of fact and of law;
(3) Various expressions, such as, 'substantial and compelling reasons',
'good and sufficient grounds', 'very strong circumstances', 'distorted
conclusions', 'glaring mistakes', etc. are not intended to curtail
extensive powers of an appellate Court in an appeal against acquittal.
Such phraseologies are more in the nature of 'flourishes of language'
to emphasise the reluctance of an appellate Court to interfere with
acquittal than to curtail the power of the Court to review the evidence
and to come to its own conclusion.
(4) An appellate Court, however, must bear in mind that in case of
acquittal, there is double presumption in favour of the accused.
Firstly, the presumption of innocence available to him under the
fundamental principle of criminal jurisprudence that every person
shall be presumed to be innocent unless he is proved guilty by a
competent court of law. Secondly, the accused having secured his
acquittal, the presumption of his innocence is further reinforced,
reaffirmed and strengthened by the trial court.
(5) If two reasonable conclusions are possible on the basis of the
evidence on record, the appellate court should not disturb the finding
of acquittal recorded by the trial court."
7 of 8
Neutral Citation No:=2024:PHHC:006789
CRM-A-208-2019 8 2024:PHHC:006789
CONCLUSION
15. In view of the facts and circumstances of the case, this Court finds that
learned counsel for the applicant-appellant has failed to point out any perversity or
illegality in findings recorded by the learned trial Court which warrants
interference by this Court. As such, there is no merit in the present application and
hence, the leave to appeal is denied.
16. Pending miscellaneous application(s), if any, shall also stand disposed
of.
18.01.2024 (HARPREET SINGH BRAR)
manisha JUDGE
Whether speaking/reasoned Yes/No
Whether Reportable Yes/No
Neutral Citation No:=2024:PHHC:006789
8 of 8
