Tripura High Court

Smti Sangita Sharma (Dhyani) vs M/S J.K. Construction on 30 June, 2021

                                     Page - 1 of 22


                       HIGH COURT OF TRIPURA
                             AGARTALA
                            1. Crl. Rev. P No.06/2021
1.     Smti Sangita Sharma (Dhyani),
W/o. Sri Sambhu Prasad Dhyani, R/o. Ram Krishna
Palli, 79 Tilla, P.O.-Kunjaban, PS-East Agartala,
District-West Tripura.
                                       ............... Accused Petitioner(s).

                                        Versus

1.    M/S J.K. Construction.
C/O. Das Builders, Joynagar Bus Stand, Agartala,
West Tripura. Represented by it partners, namely,
(a) Shri Jiban Kumar Saha, (b) Sri Shekhar Ch.
Podder, (c) Sri Surajit Saha, (d) Sri Debashish Das,
(e) Sri Dipankar Datta, (duly represented by its
constituted attorney namely- Sri Sekhar Ch. Podder)
2.   The State of Tripura.
Represented by learned P. P, High Court of Tripura,
Agartala.

                                                      ............... Respondent(s).

                            2. Crl. Rev. P No.07/2021

1.     Smti Sangita Sharma (Dhyani),
W/o. Sri Sambhu Prasad Dhyani, R/o. Ram Krishna
Palli, 79 Tilla, P.O.-Kunjaban, PS-East Agartala,
District-West Tripura.
                                       ............... Accused Petitioner(s).

                                        Versus
1.    M/S J.K. Construction.
C/O. Das Builders, Joynagar Bus Stand, Agartala,
West Tripura. Represented by it partners, namely,
(a) Shri Jiban Kumar Saha, (b) Sri Shekhar Ch.
Podder, (c) Sri Surajit Saha, (d) Sri Debashish Das,
(e) Sri Dipankar Datta, (duly represented by its
constituted attorney namely- Sri Sekhar Ch. Podder)

2.   The State of Tripura.
Represented by learned P. P, High Court of Tripura,
Agartala.

                                                      ............... Respondent(s).




Crl. Rev. P Nos.06/2018 & 07/2018.
                                      Page - 2 of 22

                        BEFORE
      THE HON'BLE MR. JUSTICE S. G. CHATTOPADHYAY
      In Crl. Rev. P. No.06/2021.

      For Petitioner(s)               :   Mr. T. D. Majumder, Sr. Advocate.
                                          Mr. Biplab Debnath, Advocate.
      For Respondent(s)               :   Mr. Ratan Datta, Public Prosecutor.
                                          Mr. T. K. Debbarma, Advocate.
      In Crl. Rev. P. No.07/2021.

      For Petitioner(s)               :   Mr. Biplab Debnath, Advocate.
      For Respondent(s)               :   Mr. Ratan Datta, Public Prosecutor.
                                          Mr. T. K. Debbarma, Advocate.
      Date of hearing                 :   10th   March, 2021.

      Date of Judgment & Order :          30th June, 2021.

      Whether fit for reporting       :   NO.


                           JUDGMENT AND ORDER


[1]            This criminal revision petition is directed against common

judgment dated 16.05.2020 delivered by the Sessions Judge, West

Tripura, Agartala in Criminal Appeal No.20 of 2017 and Criminal Appeal

No.21 of 2017 affirming the judgment and order of conviction and

sentence dated 04.05.2017 passed by the Additional Chief Judicial

Magistrate in case No. NI 107 of 2008 and NI 113 of 2008 sentencing the

petitioner to fine in both the cases under Section 138 of the Negotiable

Instrument Act, 1981 (for short N.I. Act). In case No. NI 107 of 2008 the

petitioner was sentenced to a fine of Rs.15,00,000/- with default

stipulation and in case No. N.I 113 of 2008 she was sentenced to a fine of

Rs.20,00,000/- with default stipulation


[2]            The petitioner filed separate criminal revision petitions against

the impugned judgment passed by the learned Sessions Judge which


Crl. Rev. P Nos.06/2018 & 07/2018.
                                      Page - 3 of 22

were numbered as Crl. Rev. P.No.6 of 2021 and Crl. Rev P. No.7 of 2021.

Facts

and law being same in both the petitions, the said petitions are

taken up together for disposal by this common judgment.

[3] Factual background of the cases are as under:

In Crl. Rev. P. No.06 of 2021:

Respondent No.1 herein being complainant filed a complaint

under Section 138 N.I Act and Section 420 IPC in the Court of the Chief

Judicial Magistrate, West Tripura, Agartala on 28.06.2008. The said

respondent, a registered partnership firm, was represented by its

constituted attorney. It was alleged in the complaint that the firm was

engaged in various businesses as a planner, developer and contractor.

The accused (present petitioner) was engaged in manufacturing bricks

and the name of her company was Ayush Bricks Industries. The said

accused (petitioner herein) agreed to supply bricks and bats to the

complainant for carrying out its business and an agreement was executed

between them for this purpose. Pursuant to such agreement, complainant

paid money in advance to the accused for supply of bricks and bats within

the stipulated period of time. The accused having failed to supply the

materials within the stipulated period, time was extended by a separate

agreement and post dated check was issued by the accused(petitioner

herein) to secure the transaction. Since the accused could not supply the

materials within the extended time as per the agreement, the

complainant presented the said cheque of a sum of Rs.15,00,000/- at

UCO Bank, Agartala for its encashment on 30.04.2008. The cheque was

bounced and as a result, the said bank returned the cheque to the

Crl. Rev. P Nos.06/2018 & 07/2018.

Page - 4 of 22

complainant with a return memo on account of insufficiency of fund in the

account of the accused. The complainant tried to contact the accused but

there was no response from her side. Complainant then issued statutory

demand notice to the accused asking her to pay back the cheque amount

to the complainant. Despite receiving the notice, accused did not make

the payment. Thereafter the complaint was filed under Section 138 of the

N.I Act.

In Crl. Rev. P. No.07 of 2021:

In the similar set of circumstances accused (petitioner herein)

issued a separate cheque of a sum of Rs.20,00,000/- bearing Cheque

No.B/B81/663934 dated 30.05.2008 drawn on State Bank of India at its

Kunjaban branch against her outstanding liabilities to the complainant.

The complainant presented the said cheque for encashment of UCO Bank

at its Agartala branch. But the said cheque was also dishonoured by the

bank. The cheque was returned to the complainant by a return memo

dated 31.05.2008 for insufficiency of fund in the account of the accused.

Complainant tried to contact the accused. Since there was no response

from the side of the accused, statutory demand notice was issued to her.

Despite receipt of notice the accused did not pay back the money. As a

result, the complainant filed a separate complaint under Section 138 N.I

Act in the Court of the Chief Judicial Magistrate, West Tripura at Agartala.

[4] Separate cases were registered by the trial Court on the said

complaints and the cases were also tried separately.

[5] In the course of trial complainant examined its attorney

namely, Sri Sekhar Ch. Podder as PW-1, Sri Babul Majumder, an officer of

Crl. Rev. P Nos.06/2018 & 07/2018.

Page - 5 of 22

the State Bank of India of its Kunjaban Branch as PW-2, the Manager of

the Agartala Branch of UCO Bank as PW-3 in both the cases. In case No.

N.I 107 of 2008, complainant introduced as many as 16 documents

including the dishonoured cheque (Exbt.4) in original, the return memo

issued by the bank (Exbt.5) etc. Similarly, in N.I 113 of 2008 besides

adducing the oral evidence of three PWs, complainant introduced as many

as 17 documents including the bounced cheque in original (Exbt.4), the

cheque return memo (Exbt.6) etc.

[6] After the recording of prosecution evidence was over, trial

Court examined the accused under Section 313 Cr. P.C in both the cases

separately. In her reply, in case No. N.I. 107 of 2008 accused did not

deny the cheque. It was stated by her that she issued a blank cheque to

the complainant. About the agreements she stated that she signed those

agreements without going through the contends of those agreements.

She also desired to adduce evidence on her defence. Similarly, in case

No. N.I 113 of 2008, during her examination under Section 313 Cr. P.C

she stated that she made payment of a part of the cheque amount to the

complainant during the pendency of the case. About the agreement she

stated that she was not aware of the contents of those agreements. She

also desired to adduce evidence on her defence. Eventually, she did not

adduce any evidence on her defence. The trial Court after hearing the

submissions of the counsel representing the parties delivered separate

judgments in both the cases. In case No. N.I 107 of 2008 the accused

was convicted and sentenced to a fine of Rs.15,00,000/-(Fifteen lakhs)

and in default to S.I for six months. It was ordered that fine money on

Crl. Rev. P Nos.06/2018 & 07/2018.

Page - 6 of 22

realization be paid to the complainant as compensation. In case No. N.I

113 of 2008 she was sentenced to a fine of Rs.20,00,000/-(Twenty lakhs)

and in default of payment of fine to S.I for six months and it was directed

that fine money on realization be paid to the complainant as

compensation.

[7] The complainant challenged the said judgment of the trial

Court in appeal in the Court of the Sessions Judge in West Tripura District

at Agartala. As stated above, by a common judgment dated 16.05.2020

the learned Sessions Judge affirmed the conviction and sentence of the

accused observing as under:

"6) As per the evidence adduced in both the cases, according to the deed of agreement dated 7.4.2007 (Ext.11 in NI 113/2008 & Ext.9 in NI 107/2008) the accused describing her status as Proprietor (not a partner of any partnership firm) of Ayush Bricks Industries entered into agreement with M/s J.K. Construction to sell certain quantity of brick bats and picket with certain rate to them with condition to make delivery of the same by 31.1.2008 and as per deed of agreement dated 15.12.2007 (Ext.12 in NI 113/2008 & Ext.10 in NI 107/2008)) she entered into agreement with said M/s J.K. Constructions to sell certain quantity of 1 st class bricks and 1st class bats & pickets of certain quantity with certain rate by 31.3.2008. In NI 107/2008, another agreement dated 30.3.2008 was proved as Ext.16/1 to 16/4 whereby time for performance of said two agreements by the accused was extended upto 30.4.2008 and it was also further mentioned that two post dated cheques for Rs.15 lakh dated 30.4.2008 and Rs.20 lakh dated 30.5.2008 respectively were issued as security to be deposited by the complainant side on failure from the side of accused, on and from the dated mentioned in those cheques. Thus, as per said term, the complainant was entitled to deposit the cheque dated 30.4.2008 on that date itself on failure by the accused to deliver the demanded goods. Thus, the argument from the side of accused that before the extended period of 30.5.2008, the cheque of Rs.15 lakh was illegally deposited in the Bank on 30.4.2008 is not acceptable and more so, said issue was earlier raised before Hon'ble High Court was also not accepted. Anyway, in NI 113 of 2008, the cheque dated 30.5.2008 was proved as Ext.4 and bank intimation slip was proved as Ext.6 which shows that said cheque was dishonoured with comment "Refer to drawer" and as per counterfoil of deposit voucher (Ext.5), it was deposited on 30.5.2008. On Bank Official Crl. Rev. P Nos.06/2018 & 07/2018.

Page - 7 of 22

namely Mr. Babul Majumder was examined in that case as PW.2 who stated that the maximum limit of the account of said Ayush Brick Industries was Rs.10 lakh and as such at no point of time there was Rs.15 lakh or Rs.20 lakh in said account, though in his cross examination, he stated that he could not say as to how Rs.12 lakh was allowed to be drawn from said account as statement covering period 31.3.2008 to 27.11.2009 was showing that there was negative balance of Rs.12,40,508/- in that account. Another bank employee namely Mr. Dilip Barman (PW.3) clarified that whenever there is insufficient fund or whenever there is any dispute relating to any cheque, same is returned with endorsement "referred to drawer". From, the evidences of these two witnesses, it is established that there was no scope to honour those two cheques for sufficiency of fund as maximum limit of said account (perhaps CD account) was Rs.10 lakh. Notice of dishounour of said cheque was duly sent to the accused vide Ext.7 & 8 within stipulated time which was delivered on 7.6.2008 and case was filed on 8.7.2008.

7) Similarly in NI 107/2008, the cheque dated 30.4.2008 for Rs.15 lakh (Ext.4) was dishonoured on the ground of insufficiency of fund as evident from the intimation slip dated 2.5.2008 (Ext.5). Statutory notice (Ext.6) was duly sent on 15.5.2008 as per postal receipt marked as Ext.7. As per intimation of the postal authority (Ext.8), it was delivered to the accused on 17.5.2008 and the case was filed on 28.6.2008. No reply of any of said two notices was given by the accused to the complainant, at least records do not suggest so.

8) Though Ld. Counsel of the accused-appellant argued that the both the cases were not maintainable as the cheques were issued as a matter of security, but said matter has already been agitated before Hon'ble High Court and decided in negative as mentioned above, cannot be reopened in this forum further. Ld. Counsel also argued that the firm of the accused was not made a party, so the case was not maintainable. But, there is nothing that the business establishment of the accused was a partnership firm formed as per provision of the Indian Partnership Act, 1932, or it was a company as defined in explanation (a) to section 141 of N.I.Act and therefore, the law as laid in Ajit Balse (supra) has been misplaced from the side of accused-appellant. Situated thus, it is held that the appeals are devoid of merit and hence are liable to be dismissed.

O=R=D=E=R In view of above discussion, both the appeals fail and accordingly those are dismissed.****"

[8] The aggrieved petitioner has challenged the said judgment of

the leaned Sessions Judge by filing two separate criminal revision

petitions on the following grounds:

Crl. Rev. P Nos.06/2018 & 07/2018.

Page - 8 of 22

(i) The impugned cheques were issued as collateral

security for which the accused petitioner cannot be

prosecuted under Section 138 N.I Act.

(ii) The appellate Court should not have relied on the

judgment and order dated 17.01.2012 of the High Court in

Crl. Rev. P No. 82 of 2010 which was passed by the High

Court on the question of maintainability of Case No. N.I. 107

of 2008 and similarly, the appellate Court should not have

relied on the order dated 14.09.2011 which was passed by

this High Court in Crl. Rev. P. No. 81 of 2010 on the question

of maintainability of N.I 113 of 2008.

(iii) The Courts below did not appreciate the discrepancies

appearing in the evidence of prosecution witnesses and

erroneously decided the case relying on their evidence. The

Courts below did not appreciate that by agreement dated

30.3.2008 executed between the parties time for supply of

brick bats was extended till 30.05.2008. Accordingly,

accused issued post dated cheque aggregating to

Rs.35,00,000/- as collateral security but the complainant

petitioner presented the cheque at the bank for encashment

on 30.04.2008 before the said extended period of the

agreement for which accused respondent cannot be held

liable under Section 138 N.I. Act.

[9] In the course of arguments Mr. T. D. Majumder, learned Sr.

advocate appearing for the petitioner along with Mr. B. Debnath, learned Crl. Rev. P Nos.06/2018 & 07/2018.

Page - 9 of 22

advocate argued that similar issue came up before the Apex Court in

Indus Airways Pvt. Ltd. and Others Vrs. M/s. Magnum Aviation

Pvt. Ltd. and another reported in (2014) 12 SCC 539 where post

dated cheques of different amounts were issued by the accused

purchaser as advance payment in respect of some purchase orders which

eventually got dishonoured on presentation at the bank. The Apex Court

allowed the appeal of the accused purchaser accepting the view that the

explanation to Section 138 of the N.I Act makes it clear that the cheques

shall be relatable to an enforceable liability or debt and as on the date of

issuing of the cheque there was no existing liability in the sense that the

title in the property had not passed on to the accused since the goods

were not delivered. In the present case it is contended by the counsel of

the petitioner that the petitioner did not have any enforceable liability or

debt on the date on which the cheques were issued by her and as such

she should not have been saddled with the liability under Section 138

N.I. Act.

[10] Counsel for the accused respondent also argued that in the

case of M.S. Narayana Menon alias Mani Vrs. State of Kerala and

another; reported in (2006)6 SCC 39 it was held by the Apex Court

that in a case under Section 138 N.I Act burden of proof on the accused is

not heavy and he is not required to disprove the prosecution in its

entirety. The accused discharges his burden on the basis of

preponderance of probability through direct or circumstantial evidence

and for this purpose the accused can also rely on the evidence adduced

by the complainant. According to Mr. Datta Majumder, learned Sr.

Crl. Rev. P Nos.06/2018 & 07/2018.

Page - 10 of 22

Advocate, the accused petitioner in the present case successfully

discharged her burden by raising a probable defence. The Courts below

did not appreciate these facts and erroneously held the accused

respondent guilty. Mr. Datta Majumder, learned Sr. advocate has also

relied on the decision of this High Court in Pradip Roy Vrs. Bidyut Pal:

reported in 2021 Legal Eagle (TRI) 84 wherein this High Court

accepted the view of the Trial Court that unless it is proved to the

satisfaction of the Court that the cheque was issued by the accused in the

discharge of his legally enforceable debt, the accused cannot be

prosecuted under Section 138 N.I Act. According to Mr. T. D. Majumder,

learned Sr. advocate no legally enforceable debt has been proved in the

present case and, therefore, the Courts below erroneously held the

accused petitioner guilty. Learned counsel therefore, urges the Court to

allow the criminal revision petitions.

[11] Mr. T. K. Debbarma, learned counsel appearing for the

complainant respondent has contended that the complainant successfully

proved his case at the trial Court and the courts below by their concurrent

findings found the accused petitioner guilty and she was rightly sentenced

under Section 138 N.I. Act. It is contended by Mr. Debbarma, learned

advocate that accused petitioner has not been able to make out any

ground for interfering with the concurrent findings of the Courts below.

Relying on the decision of the Bombay High Court in Balaji Agencies

Pvt. Ltd. Vrs. Vilas Bagi and Another: reported in 2009 CRI. L. J.

4250 learned counsel submits that even if it is assumed that accused

petitioner issued the cheques as security, the provision of Section 138 N.

Crl. Rev. P Nos.06/2018 & 07/2018.

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I Act would be attracted because she neither disputed her liability nor

informed the complainant that the complainant should not present such

cheques at bank. Purpose of giving the securities is to ensure that such

securities can be enforced when need arises and those are not mere

pieces of paper. Learned counsel referred to paragraphs 21 and 22 of the

judgment wherein the Bombay High Court having referred to various

judgments of the Apex Court on the issue held as follows:

21. The expression "secure", as per Black's Law Dictionary means to give security, to assure payment. As per Oxford dictionary security, inter alia, means thing deposited or hypothecated as pledge for fulfillment of undertaking or payment of loan to be forfeited in case of failure. Security is given, not as a piece of paper to be retained by the creditor but to be enforced when the debtor fails to pay the amount. In this case the subject cheque was given to assure the payment of the goods taken on credit by the accused and once payment was not forthcoming, nor the bank guarantee sought for by the Complainant, the Complainant was certainly entitled to enforce the security and this was done by the Complainant after due notice to the accused and in such a situation, in my humble view, it could not be said that the subject cheque was not given in payment of any debt or liability and only because it was given as security the accused would not be liable for dishonour of the same. What use is a security which cannot be enforced? Since the accused had not objected to the letter dated 16-3- 1999 the Complainant was free to complete the details on the cheque, earlier given as security, and present the same to recover the amount due to the Complainant. In such a fact situation, the ratio of the Apex Court in I.C.D.S. Ltd. v. Beemna Shabeer(supra) was fully attracted. In other words, no doubt the cheque was issued as security but demand to clear the debt was made and upon failure, the security was enforced.

22. In the above context, reference to the case of Karekar Finance Pvt. Ltd. v. M. N. Bashyam and another(2007(9) LJSOFT(URC) 15) would be relevant. Referring to the Judgment in Mrs. Shila @ Sudha Manjunath Vernekar v. Rayaba S. Dessai and another(unreported decision of this Court dated 27-1- 2005 in Criminal Revision Application No.29 of 2004) this Court observed that:-

"From the decisions cited on behalf of both the parties and referred to herein above, it appears that there is preponderance of judicial opinion in favour of the proposition that when a cheque is issued duly signed by the drawer and the holder completes the same in other respects namely as

Crl. Rev. P Nos.06/2018 & 07/2018.

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regards the amount due and the date, the presumption would still be available to the complainant/holder unless the accused shows that the said particulars were filled in without the consent of the accused/drawer".

"In my view cases like this cannot be termed to be a case where there is a material alteration. Material alteration will presuppose a change of something which is there to something which was not there. In cases like this there is a tacit or implied consent by the drawer to fill in the details of the amount and the date of the cheque".

[12] Under the aforesaid premises counsel appearing for the

complainant respondent urges the Court for dismissing the petitions of

the accused petitioner.

[13] In the course of their arguments counsel representing the

parties had taken this Court to the evidence recorded during trial.

[14] In Crl. Rev. P. No.06 of 2021 Sekhar Ch. Podder, constituted

attorney of the complainant respondent testified at the trial Court as PW-

1. He submitted the cheque bearing No.663933 dated 30.04.2008 of a

sum of Rs.15,00,000/- drawn on SBI, Kunjaban branch which was issued

by the accused petitioner in favour of the complainant respondent. Said

cheque was marked as Exbt-4 at the trial. The bank's slip/memo dated

02.05.2008 returning the said cheque for insufficiency of the fund in the

account of the accused was also produced at the trial on behalf of the

complainant and it was taken into evidence and marked as Exbt.5.

In his cross examination the PW categorically asserted that

the accused petitioner issued two post dated cheques aggregating to

Rs.35,00,000/-. As noted, the petitioner has produced the original cheque

and also the bank slip dated 02.05.2008 returning the said cheque for

Crl. Rev. P Nos.06/2018 & 07/2018.

Page - 13 of 22

insufficiency of the fund in the account of the accused respondent in

original. From a perusal of said cheque (Exbt.4) it appears that the

cheque was dated 30.4.2008 which was deposited by the petitioner at his

bank and by the return memo dated 2.5.2008, bank returned the said

cheque to the petitioner intimating that the cheque was dishonoured for

insufficiency of fund. Similarly, in Crl. Rev. P. No. 07/2021 the same PW-

1 asserted in his cross examination in chief that accused respondent

issued a post dated cheque which was dated 30.5.2008 bearing

No.663534 of an amount of Rs.20,00,000/- drawn on SBI, Kunjaban

branch. The PW identified the said cheque which was marked as Exbt.4 in

original. The PW further stated that vide deposit slip dated 30.5.2008

(Exbt.5) complainant respondent presented the said cheque to his bank

at the Agartala branch of UCO Bank and the said cheque was returned by

the Bank by return memo dated 30.5.2008 (Exbt.6).

[15] In the cross examination of the witness accused petitioner

had taken the same plea that she had issued a blank cheque and the said

cheque was not even filled in by her. Suggestions were put to the witness

on behalf of the accused petitioner in this regard which were denied by

the witness.

[16] PW-2, Babul Majumder was an officer in the State Bank of

India at its Kunjaban branch at the material time who supported the facts

that the impugned cheques were dishonoured from the said bank due to

insufficiency of fund in the account of the accused.

Crl. Rev. P Nos.06/2018 & 07/2018.

Page - 14 of 22

[17] PW-3, Dilip Barman who was an Officer at the UCO bank at

its Agartala branch at the material time also testified in both the cases

and stated that the impugned cheques were presented by the

complainant respondent for encashment through the said branch of UCO

bank where the respondent maintained its account. The cheques were

sent to SBI, Kunjaban branch on which the cheques were drawn and the

same were returned from the said Kunjaban branch of SBI for

insufficiency of fund in the account of the accused petitioner.

[18] From a perusal of the statement of the said witnesses, it

appears that the accused petitioner did not dispute issuance of the

impugned cheques. She tried to defend herself by saying that the said

cheques were issued in blank by her and she did not even fill in those

cheques. She however, did not deny her signature on either of the

cheques.

[19] The Apex Court in Bir Singh Vrs. Mukesh Kumar: reported

in (2019) 4 SCC 197 succinctly held that once a person signs a cheque

and makes it over to the payee remains liable unless he adduces evidence

to rebut the presumption that the cheque had been issued for payment of

a debt or in discharge of a liability. It had also been held by the Apex

Court by the said judgment that even if a blank cheque is voluntarily

presented to the payee, towards some payment, the payee may fill up

the amount and other particulars which itself would not invalidate the

cheque. Observation of the Apex Court in this regard is as under:

"32. The proposition of law which emerges from the judgments referred to above is that the onus to rebut the presumption under Section 139 that the cheque has Crl. Rev. P Nos.06/2018 & 07/2018.

Page - 15 of 22

been issued in discharge of a debt or liability is on the accused and the fact that the cheque might be post dated does not absolve the drawer of a cheque of the penal consequences of Section 138 of the Negotiable Instruments Act.

33. A meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted.

34. If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence.

35. It is not the case of the respondent-accused that he either signed the cheque or parted with it under any threat or coercion. Nor is it the case of the respondent- accused that the unfilled signed cheque had been stolen. The existence of a fiduciary relationship between the payee of a cheque and its drawer, would not disentitle the payee to the benefit of the presumption under Section 139 of the Negotiable Instruments Act, in the absence of evidence of exercise of undue influence or coercion. The second question is also answered in the negative.

36. Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt."

In the present context there is no allegation from side of the

accused petitioner that she signed the impugned cheques involuntarily.

Rather, her business transaction with the respondent is admitted by her

and the fact that she had borrowed advance from the respondent to

facilitate such transaction is also admitted by her. The accused petitioner

however, denied her debt or liability. Her case is that she repaid full

Crl. Rev. P Nos.06/2018 & 07/2018.

Page - 16 of 22

amount of advance to the respondent. Law is well settled that mere

denial would not absolve the accused from the liability unless the

statutory presumptions under the N.I Act is rebutted by the accused and

the contrary is proved by adducing cogent evidence, direct or

circumstantial.

[20] In Laxmi Dyechem Vrs. State of Gujarat and others :

reported in (2012) 13 SCC 375 the Apex Court held that under Section

139 of N.I Act it has to be presumed that the cheque was issued in

discharge of a debt or other liability but such presumption should be

rebutted by adducing evidence. Observation of the Supreme Court is as

under:

"25. Therefore, if the accused is able to establish a probable defence which creates doubt about the existence of a legally enforceable debt or liability, the prosecution can fail. The accused can rely on the materials submitted by the complainant in order to raise such a defence and it is inconceivable that in some cases the accused may not need to adduce the evidence of his/her own. If however, the accused/drawer of a cheque in question neither raises a probable defence nor is able to contest existence of a legally enforceable debt or liability, obviously statutory presumption under Section 139 of the NI Act regarding commission of the offence comes into play if the same is not rebutted with regard to the materials submitted by the complainant.

26. It is no doubt true that the dishonour of cheques in order to qualify for prosecution under Section 138 of the NI Act precedes a statutory notice where the drawer is called upon by allowing him to avail the opportunity to arrange the payment of the amount covered by the cheque and it is only when the drawer despite the receipt of such a notice and despite the opportunity to make the payment within the time stipulated under the statute does not pay the amount, that the said default would be considered a dishonour constituting an offence, hence punishable. But even in such cases, the question whether or not there Crl. Rev. P Nos.06/2018 & 07/2018.

Page - 17 of 22

was lawfully recoverable debt or liability for discharge whereof the cheque was issued, would be a matter that the trial court will have to examine having regard to the evidence adduced before it keeping in view the statutory presumption that unless rebutted, the cheque is presumed to have been issued for a valid consideration........."

[21] The Supreme Court reiterated the same principle in Kumar

Exports Vrs. Sharma Carpets: reported in (2009) 2 SCC 513 wherein

the Apex Court held that it would be presumed that every negotiable

instrument is duly executed for discharge of a debt or liability. The said

presumption is rebutted only by proving the contrary. Observation of the

Apex Court is as under:

"13. In a significant departure from the general rule applicable to contracts, Section 118 of the Act provides certain presumptions to be raised. This Section lays down some special rules of evidence relating to presumptions. The reason for these presumptions is that, negotiable instrument passes from hand to hand on endorsement and it would make trading very difficult and negotiability of the instrument impossible, unless certain presumptions are made. The presumption, therefore, is a matter of principle to facilitate negotiability as well as trade. Section 118 of the Act provides presumptions to be raised until the contrary is proved (i) as to consideration, (ii) as to date of instrument, (iii) as to time of acceptance, (iv) as to time of transfer, (v) as to order of indorsements,

(vi) as to appropriate stamp, and (vii) as to holder being a holder in due course.

14. Section 139 of the Act provides that 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.

15. Presumptions are devices by use of which the courts are enabled and entitled to pronounce on an issue notwithstanding that there is no evidence or insufficient evidence. Under the Evidence Act all presumptions must come under one or the other class of the three classes mentioned in the Act, namely, (1) "may presume" (rebuttable), (2) "shall presume" (rebuttable) and (3) "conclusive Crl. Rev. P Nos.06/2018 & 07/2018.

                                        Page - 18 of 22

               presumptions"       (irrebuttable).   The      term

"presumption" is used to designate an inference, affirmative or disaffirmative of the existence of a fact, conveniently called the "presumed fact" drawn by a judicial tribunal, by a process of probable reasoning from some matter of fact, either judicially noticed or admitted or established by legal evidence to the satisfaction of the tribunal. Presumption literally means "taking as true without examination or proof".

16. Section 4 of the Evidence Act inter-alia defines the words "may presume" and "shall presume" as follows: -

"4. `may presume' - Whenever it is provided by this Act that the Court may presume a fact, it may either regard such fact as proved, unless and until it is disproved or may call for proof of it.

`shall presume' - Whenever it is directed by this Act that the Court shall presume a fact, it shall regard such fact as proved, unless and until it is disproved:

**** ***** ****** *****"

In the former case the Court has an option to raise the presumption or not, but in the latter case, the Court must necessarily raise the presumption. If in a case the Court has an option to raise the presumption and raises the presumption, the distinction between the two categories of presumptions ceases and the fact is presumed, unless and until it is disproved.

17. Section 118 of the Act inter alia directs that it shall be presumed, until the contrary is proved, that every negotiable instrument was made or drawn for consideration. Section 139 of the Act stipulates that unless the contrary is proved, it shall be presumed, that the holder of the cheque received the cheque, for the discharge of whole or part of any debt or liability."

[22] In an earlier decision in K.N. Beena Vrs.Muniyappan and

another: reported in (2001) 8 SCC 458 It is held by the Apex Court

that statutory presumptions under Sections 139 and 118 N.I Act cannot

be rebutted by mere denial by the accused. The accused has to prove by

Crl. Rev. P Nos.06/2018 & 07/2018.

Page - 19 of 22

cogent evidence that he had no debt or liability. In the said judgment, the

Apex Court made the following observation on this issue:

"6. .............. It appears that the learned Judge had lost sight of Sections 118 and 139 of the Negotiable Instruments Act. Under Sections 118, unless the contrary was proved, it is to be presumed that the Negotiable Instrument (including a cheque) had been made or drawn for consideration.

Under Section 139 the Court has to presume, unless the contrary was proved, that the holder of the cheque received the cheque for discharge, in whole or in part, of a debt or liability. Thus in complaints under Section 138, the Court has to presume that the cheque had been issued for a debt or liability. This presumption is rebutable. However the burden of proving that a cheque had not been issued for a debt or liability is on the accused. This Court in the case of Hiten P. Dalal vs. Bratindranath Banerjee reported in (2001) 6 S.C.C. 16 has also taken an identical view."

[23] Following the decision of the Apex Court in Hiten P. Dalal

Vrs. Bratindranath Banerjee: reported in (2001) 6 SCC 16 this Court

in Benu Roy Vrs. Rajib Ghosh: reported in (2018) 2 TLR 463 similarly

held that the explanation in order to rebut the statutory presumption

under the N.I Act should be supported by proof otherwise such

presumption created by the statute cannot be stated to have been

rebutted.

[24] The Apex court further examined the issue in Sampelly

Satyanarayana Rao Vrs. Indian Renewable Energy Development

Agency Limited; reported in (2016) 10 SCC 458 and clarified that

presumption under Section 138 N.I. Act being statutory in nature, has to

be rebutted by the accused by adducing some evidence. In the said

judgment the Apex Court further clarified that some statement of the

Crl. Rev. P Nos.06/2018 & 07/2018.

Page - 20 of 22

accused itself could not be sufficient to rebut such presumption.

Observation of the Apex Court is as under:

"17. In Rangappa v. Sri Mohan, this Court held that once issuance of a cheque and signature thereon are admitted, presumption of a legally enforceable debt in favour of the holder of the cheque arises. It is for the accused to rebut the said presumption, though accused need not adduce his own evidence and can rely upon the material submitted by the complainant. However, mere statement of the accused may not be sufficient to rebut the said presumption. A post dated cheque is a well recognized mode of payment"

[25] It is no case of the accused petitioner that she signed the

impugned cheques or parted with those cheques under any threat or

coercion. In view of the ratio decided by the Apex Court in the case of Bir

Singh (supra) her plea that she issued blank cheques and she did not

even fill in those cheques cannot absolve her from her liability particularly

when it is proved that she had a business transaction with the petitioner

and admittedly she had taken advance from the petitioner to facilitate

such transaction for which she issued cheque in favour of the petitioner.

In such circumstances statutory presumptions that the cheques were

issued by her in discharge of her liability arises against her which she

could not rebut by adducing evidence. Therefore, in so far as her

conviction is concerned I do not find any error in the concurrent findings

of the Courts below. In the result, conviction of the petitioner under

Section 138 N.I. Act is upheld.

[26] In so far as the sentence is concerned, it is found that in case

No. N.I 107/2008 trial Court sentenced her to a fine of Rs.15,00,000/-

and in default to S.I for six months and in case No. N.I. 113/2008 the Crl. Rev. P Nos.06/2018 & 07/2018.

Page - 21 of 22

trial Court sentenced the accused respondent to fine of Rs.20,00,000/-

and in default S.I for six months. It was directed in both the cases that

fine on realisation be paid to the complainant respondent as

compensation.

[27] But PW-1, attorney of the respondent, in his cross

examination in both the cases has made a categorical statement that the

respondent paid an advance of Rs.24,00,000/- to the accused but they

had taken post dated cheques of an amount Rs.35,00,000/- from her. His

statement is as under:

"On failure to perform the agreements dated 07.04.07 and 15.12.07 the letter agreements dated 03.03.08 was executed. As per first clause of agreements for saying dated 07.04.07 we paid Rs.7 lakh by a post dated cheque and Rs.2 lakh in cash to the accused for purchasing bricks. As per agreement dated 15.12.07 we paid Rs.5 lakh by two post dated cheque and Rs.2 lakh in cash to the accused and by way two agreements we paid Rs.24 lakh to the accused. We took a post dated of Rs.35 lakh from the accused in case she fails to perform the terms of 3rd agreement.****"

Such assertion of the witness was not specifically denied by

the accused. She simply suggested to the PW that she had no dues to be

paid to the complainant which was denied by the complainant. In view of

such statement made by PW-1 on behalf of the complainant respondent,

it appears that accused had an outstanding liability to the extent of

Rs.24,00,000/- to the complainant. Admittedly, the complainant had

taken post dated cheques of Rs.35,00,000/- from her in anticipation that

she might fail to perform the terms of 3rd agreement executed between

them.

Crl. Rev. P Nos.06/2018 & 07/2018.

Page - 22 of 22

[28] Considering the amount of liability of the accused towards the