Telangana High Court

Smt.K.Lavanya vs Chittmalla Rajani, on 10 February, 2025

         THE HONOURABLE SRI JUSTICE K.SURENDER
               CRIMINAL APPEAL No.730 OF 2019
JUDGMENT:

The appellant/complainant preferred this appeal aggrieved by

the acquittal of the accused, recorded by the Special Magistrate III,

Cyberabad at Malkajgiri, in C.C.No.27 of 2018, dated 01.03.2019,

under Section 138 of the Negotiable Instruments Act, 1881.

2. Briefly, the case of the complainant is that the accused is the

daughter of her cook namely Ch.Uma (examined as DW.2). Since

they were acquainted, the accused approached the complainant

along with (DW.2) requesting for hand loan of Rs.10 lakhs to meet

their immediate domestic expenditure i.e., to clear debts of her

brother and also for other purposes. Rs.10 lakhs was given by the

complainant on various dates. The accused promised that the

amount would be repaid after sale of the house of DW.2. However,

the amounts were not returned. Then, a Promissory Note was

executed for the said amount and after repeated requests, the

cheque in question for Rs.10 lakhs was drawn by the accused and

handed over to the complainant. The said cheque, when presented

for clearance, was returned unpaid on the ground of 'insufficient

funds'. Legal Notice was sent on 20.10.2017, but the same was

returned with an endorsement 'no such addressee'. Since the

accused was living in the very same address and payment was not

made pursuant to issuance of notice, complaint was filed.

3. The appellant/complainant examined herself as PW.1, her

husband as PW.2 and two other friends as PWs.3 and 4. The

accused examined herself as DW.1 and her mother as DW.2.

4. The Learned Magistrate, having considered the evidence on

record, acquitted the accused on the following grounds:

i) Ex.P1-Promissory Note was not attested by any of the witnesses

and the name of the scribe is also not mentioned.

ii) The complainant has filed the IT returns of the husband, which

has no relevance to the facts of the case.

iii) PW.2, who is the husband of the complainant entered into the

box and stated that he was not aware of the source of amount that

was given as hand loan by his wife PW.1 to the accused.

iv) It is not for a prudent man to give such huge amount of Rs.10

lakhs to a cook-cum-domestic help and her daughter who was a

private employee working as lab assistant.

v) The initial burden on the complainant to prove that the amount

covered by the cheque was towards enforceable debt, was not

discharged by the complainant.

vi) The version given by the accused that the promissory note and

the cheque were taken as security in the private chit run by PW.1

can be believed. The version that the accused was member of chit for

Rs.75,000/- and when the prize amount was paid in two

instalments, the promissory note and the cheque were given as

security, is believable.

5. Learned Counsel appearing on behalf of complainant would

submit that once the signature on the promissory note and the

cheque is admitted, presumption has to be drawn under Section 139

of the Negotiable Instruments Act. Except stating that they were

given towards security, no evidence was placed on record by the

accused to discharge her burden. The lower Court was carried away

by the story created by the accused during the course of trial.

6. Learned Counsel further argued that the Honourable Supreme

Court in Rangappa v. Sri Mohan 1, held that presumption arises

once the signature on the cheque is admitted. In the said case, the

(2010) 11 Supreme Court Cases 441

Honourable Supreme Court dealt with a situation where the accused

has taken the defence that the cheque was lost and he also intimated

the Bank about the lost cheque. The Honourable Supreme Court

found that the instructions to stop payment and that the cheque was

lost, were taken up at a belated stage. Further, the Court held that if

the cheque was lost, the question of the cheque bearing the

signature and date on the cheque becomes doubtful.

7. The counsel also relied on the Judgment of Honourable

Supreme Court in Mallavarapu Kasivisweswara Rao v.

Thadikonda Ramulu firm and others 2, wherein it is held that:

"12. Under Section 118(a) of the Negotiable Instruments Act, the court is obliged to presume, until the contrary is proved, that the promissory note was made for consideration. It is also a settled position that the initial burden in this regard lies on the defendant to prove the non-existence of consideration by bringing on record such facts and circumstances which would lead the court to believe the non-existence of the consideration either by direct evidence or by preponderance of probabilities showing that the existence of consideration was improbable, doubtful or illegal. In this connection, reference may be made to a decision of this Court in Bharat Barrel & Drum Mfg. Co. v. Amin Chand Payrelal [(1999) 3 SCC 35] . In para 12 of

AIR 2008 Supreme Court 2898

the said decision, this Court observed as under : (SCC pp. 50-

51) "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 its 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."

8. Learned Counsel also relied on the Judgment of Honourable

Supreme court in Bharat Barrel and Drum Manufacturing

Company v. Amin Chand Payrelal 3 , wherein the Honourable

Supreme Court held that execution of a promissory note would draw

a presumption under Section 118 of the Negotiable Instruments Act,

that it was executed as collateral security. The Honourable Supreme

Court further held that claim made by the plaintiff has to be allowed

if the rebuttal evidence of the defendant was not believable.

9. In the present case, the following facts are admitted:

i) The accused is the daughter of the cook-cum-maid servant in the

house of PW.1.

AIR 1999 Supreme Court 1008

ii) The husband (PW.2) of PW.1 stated that he does not know about

the source of income of PW.1 and as to how she generated Rs.10

lakhs to be paid to the accused.

iii) PWs.3 and 4 were examined during the course of trial and their

names were not mentioned at the earliest point of time that PW.1

had taken loans from PWs.3 and 4 to give it to the accused.

10. The accused admitted signature on the promissory note and

also the cheque. Once the signatures are admitted and also the

handing over of the cheque and promissory note, presumption has to

be drawn under Section 139 of the Negotiable Instruments Act.

11. The burden that shifts on to the accused under Section 139 of

the Negotiable Instruments Act, can be discharged by preponderance

of probability. Once the accused makes out a case which is probable,

believable and also appears to be true in the facts of a case, such

defence can be accepted by the Court.

12. The defence of the accused is that PW.1 was running a private

chit and that the prize amount for a chit of Rs.75,000/- was given in

two instalments. Towards security, a blank signed cheque and

signed promissory note were given. Admittedly, the promissory note

does not contain the signatures of any witnesses. The accused was

introduced to PW.1 by her mother DW.2. DW.2 was working as maid

servant-cum-cook in the house of PW.1. It is highly improbable that

PW.1 who did not show any proof of income would take loans from

PWs.3 and 4 to be given to the accused. No reason is given as to

why such huge amount of Rs.10 lakhs was given to the daughter of

her maid servant.

13. The version of PW.1 is that she believed that the house of the

accused would be sold and her loans would be repaid. It is not stated

by the appellant as to where the house of accused is situated and

whether it was their own house.

14. In the facts of the present case, the version given by DWs.1 and

2 appears to be more probable. Once the accused is successful in

proving her case by preponderance of probability, it discharges the

burden that has been shifted on her under Section 139 of the

Negotiable Instruments Act.

15. In Ravi Sharma v. State (Government of NCT of Delhi) and

another 4, the Hon'ble Supreme Court held that while dealing with an

appeal against acquittal, the appellate court has to consider whether

the trial Court's view can be termed as a possible one, particularly

when evidence on record has been analysed. The reason is that an

order of acquittal adds up to the presumption of innocence in favour

of the accused. Thus, the appellate court has to be relatively slow in

reversing the order of the trial court rendering acquittal.

16. In Ghurey Lal v. State of Uttar Pradesh, 5 the Hon'ble

Supreme Court after referring to several Judgments regarding the

settled principles of law and the powers of appellate Court in

reversing the order of acquittal, held at para 70, as follows:

"70. In the light of the above, the High Court and other appellate Courts should follow the well-settled principles crystallized by number of Judgments if it is going to overrule or otherwise disturb the trial court's acquittal:

1. The appellate court may only overrule or otherwise disturb the trial court's acquittal if it has "very substantial and compelling reasons"

for doing so.

A number of instances arise in which the appellate court would have "very substantial and compelling reasons" to discard the trial court's decision. "Very substantial and compelling reasons" exist when:

i) The trial court's conclusion with regard to the facts is palpably wrong:

(2022) 8 Supreme Court Cases 536

(2008) 10 Supreme Court Cases 450

ii) The trial court's decision was based on an erroneous view of law;

iii) The trial court's judgment is likely to result in "grave miscarriage of justice";

iv) The entire approach of the trial court in dealing with the evidence was patently illegal;

v) The trial court's judgment was manifestly unjust and unreasonable;

vi) The trial court has ignored the evidence or misread the material evidence or has ignored material documents like dying declarations/report of the ballistic Ex.Pert, etc.

vii) This list is intended to be illustrative, not exhaustive.

2. The appellate court must always give proper weight and consideration o the findings of the trial court.

3. If two reasonable views can be reached__ one that leads to acquittal, the other to conviction __the High Courts/appellate courts must rule in favour of the accused."

17. There are no compelling reasons to reverse the well reasoned

Judgment of the trial Court.

18. Accordingly, Criminal Appeal is dismissed.

___________________ K.SURENDER, J Date: 10.02.2025 tk