11.03.10 PASSED BY FAST TRACK COURT-NO.I AT GULBARGA, 2OF CONVICTION PASSED BY III ADDL. CIVIL JUDGE (JR.DN) AND JMFC GULBARGA IN CC NO.1362/06 DATED 06.06.09 AND ACQUIT THE PETITIONER FOR THE OFFENCE P/U/S. 138 OF N.I.ACT. THIS PETITION COMING ON FOR HEARING THIS DAY, THE COURT PASSED THE FOLLOWING: ORDER The petitioner has approached this Court calling in question the judgment of conviction and sentence passed by the III Addl. Civil Judge (Jr.Dn.) & JMFC, Kalaburagi in CC No.1362/2006 for the offence punishable under Section 138 of the Negotiable Instruments Act imposing fine of Rs.2,50,000/- and also sentencing him to undergo Simple Imprisonment for six months, in default of payment of the said amount. The Court has also awarded compensation of Rs.2,45,000/- in favour of the complainant and Rs.5,000/- as fine to be credited to the State.
2. The petitioner has also called in question the order passed by the Fast Track Court I in Criminal 3Appeal No.46/2009 wherein the learned Judge has confirmed the order of the Trial Court passed in CC No.1362/2006 dated 6.6.2009.
3. For the purpose of easy understanding and convenience, the ranks of the parties are retained as per their ranks before the Trial Court.
4. The complainant (respondent herein) has filed a complaint against the petitioner herein (accused) for the offence punishable under Section 138 of the Negotiable Instruments Act ( for short, N.I. Act.) stating that the accused (petitioner herein) and himself are very good friends. In that connection, the accused has approached the complainant for a loan of Rs.2,00,000/- for the purpose of his business expenses, with a promise to repay the same within one month. Accordingly, the loan was advanced by the complainant on 25.12.2005. As the said amount was not repaid as agreed by the accused, the complainant demanded for 4repayment and in that context, the accused had issued a post dated cheque on 25.1.2006. The said cheque was presented to the Bank of Maharashtra, Kalaburagi and the same came to be returned with the shara insufficient funds in the account of the accused.
5. The complainant further stated that on 1.3.2006 on the request of the accused, the said cheque was again presented to the Bank. On the second occasion also, it was returned with a shara insufficient funds. Thereafter, the complainant has issued a statutory notice to the accused and in fact, the accused has also issued reply notice.
6. On the above said contention, the Trial Court has secured the presence of the accused by issuing summons and the accused appeared before the Court and contested the proceedings.
57. In order to prove the case, the complainant examined himself as PW1 and also examined two witnesses on his side as PWs.2 & 3 and got marked Exhibits P1 to P6. The accused was also examined u/s.313 of Cr.P.C. However, the accused did not choose to examine himself or any defence witness. The Trial Court after analysing the entire oral and documentary evidence on record has come to the conclusion that the complainant has proved his case and accordingly convicted the accused and sentenced him as noted supra.
8. Being aggrieved by the said judgment of conviction and sentence, the accused has preferred an appeal in Criminal Appeal No.46/2009, wherein the appellate Court has framed the following point for consideration:
Whether the impugned judgment of conviction and sentence dated 6.6.2009 6passed in CC No.1362/2006 by the III Addl. Civil Judge (Jr. Dn.) & JMFC, Kalaburagi is bad for any of the grounds urged in the Memorandum and calls for interference?
9. Answering the said point in the Negative, the appellate Court has held that the Trial Court has not committed any error. Therefore, no interference is called for and consequently dismissed the appeal.
10. I have heard the arguments of the learned counsel for the petitioner and the respondent.
11. The main contention of the learned counsel for the petitioner before this Court is that though the initial presumption u/s.139 of Negotiable Instruments Act was raised in favour of the complainant, but during the course of evidence, the accused has very successfully rebutted the said presumption to the effect that the complainant had not at all paid any amount to the accused and in fact he had no money with him to 7pay the same and that the complainant has not established the existence of any legally recoverable debt or liability on the part of the accused. Though some other grounds are also urged that there was a theft of two cheque leaves pertaining to the complainant by the accused, but those aspects have not been seriously contested before this Court.
12. The learned counsel for the petitioner has drawn my attention to the evidence of the complainant and his witnesses and strenuously contended that both the courts have not bestowed their attention to the cross-examination of the complainant at all. Both the courts have mainly concentrated with regard to the lapse on the part of the accused and as well the presumption in favour of the complainant with regard to the issuance of the cheque by the accused. Being swayed away in that manner both the courts have 8committed serious error in not considering the materials on record which ought to have been considered.
13. Countering the above said arguments, the learned counsel appearing for the respondent strenuously contended that the evidence led by the complainant in toto along with the pleadings and conduct of the parties have to be evaluated by the Court. The entire transaction taken place between the accused and the complainant is on the basis of mutual trust. It is admitted by the accused that there was several transactions taken place between the complainant and himself and earlier loans were taken and returned by the accused. In that context, though previously some amount has not been paid by the accused, but with all trust and expectation of a good conduct of the accused, the complainant has paid the said amount. Though there is some discrepancy in not explaining the previous transaction between himself and 9the accused, nevertheless mutual trust has been established. Therefore, the Trial Court and the appellate Court though not in detail discussed this aspect, on overall analysis of the materials on record have rendered correct judgments which does not call for any interference at the hands of this Court.
14. The learned counsel for the respondent has also contended very seriously that the scope of revision is very limited. When the Trial Court and the Appellate Court have arrived at a conclusion on the basis of the factual aspects, in such context, the revisional Court cannot go in deep into the appreciation of evidence once again in order to reverse the findings of the Trial Court and the Appellate Court. Therefore, he contended that the Revision Petition is not maintainable and the same is liable to be dismissed.
15. Having heard the arguments of both sides, the point that would arise for consideration is 10 (1)Whether the Trial Court and the appellate Court have committed any serious legal error in appreciating the oral and documentary evidence on record in order to draw the inference of guilt of the accused? (2) What order?
16. Before adverting to the merits of the case, it is just and necessary to bear in mind under what circumstances, the Court can interfere with the judgments of the Trial Court and the appellate Court exercising power under Section 397 of Cr.P.C. In this regard, the learned counsel for the respondent has relied upon a ruling reported in [2015] ACR 320 in the case of Sanjaysingh Ramrao Chavan vs. Dattatray Gulabrao Phalke and others, wherein the Honble Apex Court has observed hereunder:
Unless the order of the Trial Court and the appellate Court are perverse or the view taken by the Courts is wholly unreasonable 11 or there is non-consideration of any relevant material or there is palpable misreading of records, the revisional Court is not justified in setting aside the order, merely because another view is possible. The revisional Court is not meant to act as an appellate Court. The whole purpose of the revisional jurisdiction is to preserve the power in the Court to do justice in accordance with the principles of criminal jurisprudence. Revisional power of the Court under Sections 397 and 401 of Cr.P.C., is not to be equated with that of an appeal. Unless the finding of the Court, whose decision is sought to be revised, is shown to be perverse or untenable in law or is grossly erroneous or glaringly unreasonable or where the decision is based on no material or where the material facts are wholly ignored or where the judicial discretion is exercised arbitrarily or capriciously, the Courts may not interfere with decision in exercise of their revisional jurisdiction.
17. So far as this case is concerned, learned counsel for the petitioner strenuously argued that the 12 Trial Court and the appellate Court have totally ignored the materials on record and material facts placed before the Court during the course of cross-examination of PW.1. The Courts below not even looked into the cross examination of PW.1. let alone appreciating with regard to the non-existence of any debt or any legally recoverable debt, elicited from P.W.1. Therefore, he contended that the above said principles are applicable in this case, there is a ground for interference with the judgment of the Trial Court.
18. Per contra, learned counsel strenuously contended that the Court has to look into the overall materials on record to find out whether the Trial Court or the appellate Court have misread or whether they have not at all considered any important material on record and thereby caused any prejudice or injustice to the accused. 13
19. Bearing in mind the above principle, in my opinion, the Court has to test the judgments of the Trial Court and the appellate Court on the touch stone of the above principles to find out whether there is any such material available to this Court to interfere with such reasoned judgments of the Trial Court and the appellate Court.
20. It is evident from the records that the Trial Court and the appellate Court have held that the accused has committed the offence punishable under section 138 of the n.i. act. Both the courts have raised presumption in favour of the complainant and held that the accused has not proved his defence and failed to rebut the presumption raised in favour of the complainant under section 139 of the n.i. act. This Court has to see as to in what manner the accused has to rebut the presumption raised in favour of the complainant. 14
21. Of-course under Section 139 of the N.I. Act, the Courts have to raise a presumption to the effect that the said cheque was issued for discharge of whole or part of any debt or liability of the accused. Though the learned counsel for the petitioner has contended that Section-139 of the N.I. Act cannot be used for the purpose of raising presumption with regard to the existence of any debt or liability or existence of any legally enforceable debt, however, this point has been considered in detail by the Honble Apex Court and the anomaly has been set at rest by the Honble Apex Court in a decision reported in (2010) 11 SCC
441 in the case of Rangappa vs. Sri Mohan. The relevant portion of the said judgment reads thus:- The presumption mandated by Section
139 includes a presumption that there exists a legally enforceable debt or liability. This is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence 15 wherein the existence of a legally enforceable debt or liability can be contested. However, herein, there can be no doubt that there is an initial presumption which favours the complainant.
22. In view of the above decision, it is clear that the complainant is entitled to prove his case under section 138 of the n.i. act beyond reasonable doubt either by availing the help of the presumption or by means of providing sufficient evidence on facts before the Court to prove the case against the accused. It is the responsibility of the accused to prove his defence by preponderance of probability, by creating doubt in the case of the complainant.
23. In the above decision in Rangappas case, the Court has also discussed the responsibility of the accused to rebut the presumption raised in favour of the complainant and how and in what manner he can rebut the said presumption is also emphatically 16 discussed. It is worth to extract the said observation of the Honble Apex Court in the said decision which reads as under: The reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of
preponderance of probabilities. Therefore, if the accused is able to raise a probable defence which creates doubts 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 conceivable that in some cases the accused may not need to adduce evidence on his side.
24. In view of the above said ruling, it is crystal clear that the accused either by means of cross- examination of the complainant and making use of the 17 documents or the materials produced by the complainant can create doubt in the mind of the Court with regard to existence of legally enforceable debt or liability and in certain circumstances, where the Court is satisfied with the facts showing the probability placed before the Court by the accused on the materials produced by the complainant himself, the Court need not insist for the examination of the accused or case of the accused cannot be thrown out only on the ground that accused has not led any evidence before the Court.
25. Bearing in mind the above said principles, now let me consider the factual aspects of this case.
26. It is the case of the complainant as per the complaint averments and the evidence that the accused and himself are friends and accused on several occasions taken loan from the complainant and repaid the same particularly, explaining that accused has not repaid the amount taken by him to the extent of 18 Rs.2,00,000/- on 25.12.2005. He has disputed issue of cheque bearing No.065476 on 25.01.2006 and the same was dishonored therefore, it is the specific case of the complainant in the complaint that the accused has taken loan for his business purpose and issued cheque in question.
27. The contention of the accused by way of defence during the course of cross-examination of PW.1 is that complainant has not come up before the Court with the clean hands, he has not stated anything about the previous transaction in the complaint. The conduct of the complainant in the evidence adduced itself clearly goes to show that he had no money on the date when he advanced money to the accused and further that there was no occasion for the complainant to pay the said amount to the accused and the accused also had not at all received any amount from the complainant. It is the contention of the accused that the Trial Court and the 19 appellate Court have not at all considered this vital aspect which is available in the evidence.
28. Apart from the above defence with reference to the existence of legally recoverable debt, the accused has also taken up the contention that the disputed cheques were stolen by the complainant and he has misused them for the purpose of fastening a false liability on the accused. He has also stated that there is complaint lodged against the complainants son and another in this regard. It is the further contention of the accused that at no point of time, he has taken loan of Rs.2,00,000/- from the complainant as stated by him though he has taken up the defence that earlier some loan transaction was there with the complainant and he has repaid the entire loan amount except an amount of Rs.20,000/- to Rs.25,000/-. The learned counsel for the respondent strenuously contends that this admission on the part of the accused clearly establishes 20 the relationship between the complainant and the accused and therefore, the complainant with utmost trust has stated that the accused has paid that amount though accused has not repaid the amount taken by him on the previous occasion. Therefore, in fact, the complainant apart from the presumption has also shown to the Court existence of the debt or liability.
29. Before adverting to the exact evidence before the Court, it is worth to note here some of the decision cited by the learned counsel for the respondent wherein he wants to demonstrate that if the accused has not proved his defence before the Court, the Court has to draw an adverse inference against the accused.
30. In a case law reported in ILR 2009 KAR 628 in the case of M/s. Amolak Textiles Rep. by its Proprietor vs. M/s. Uphar Fashions Rep. by its Proprietor the Court has held as hereunder: 21
Defence theory of the accused is that cheques were stolen by the complainant and he got unlawful possession of the cheques which are misused for the purpose of case and the same defence has not been established. However, the defence theory admits that the cheque belongs to the account of the accused. When the accused has failed to prove that the complainant has got the cheques by unlawful means, the presumption under Section 139 of Negotiable Instruments Act arises in favour of the complainant.
31. In another ruling reported in 2014(3) Crimes
188 (Karnt.) in the case of Smt. Shakuntala Devappa vs. B.R. Ravishankar, this Court has also held as hereunder:
Inference by the revisional Court is warranted only if Courts below committed glaring error in appreciation of evidence or error of law resulting in manifest injustice. Cheque for Rs.50,000 was alleged to have been issued for repayment of personal loan. Defence plea was that complainant had stolen cheque and misused it. Accused failed to rebut the 22 presumption. Conviction was not liable to any interference.
32. Relying on the above said rulings and also rulings cited supra, in Rangappas case it cannot be said that merely because the accused has failed to prove his defence theory with regard to the issuance of cheque in question and with regard to the loss of cheque and unlawful possession of the cheques by the complainant but nevertheless on that ground alone the case of the accused cannot be thrown out. If the accused is able to show before the Court that though he has failed to prove his defence theory in full with reference to the loss of cheques, but if he is able to show to the Court a doubt or a probability which creates reasonable doubt in the mind of the Court with regard to non-existence of legally recoverable debt, then the reverse burden of proving the said factum that there exists a legally recoverable debt will be on the complainant. It can be simply said that when the burden is cast on the 23 complainant to prove a particular fact in issue, it should be proved by the complainant either by taking the help of presumption in his favour or by means of placing satisfactory facts before the Court. If any doubt is created, by means of preponderance of probability by the accused then the complainant can lead further evidence to establish on facts, the existence of such legally recoverable debt or liability, apart from the presumption being rebutted by the accused. In this background, the Court has to see whether by means of preponderance of probability of evidence the accused has created any doubt with regard to existence of a legally recoverable debt or not.
33. In this regard, it is worth to note here a decision reported in AIR 2009 SC 1518 in the case of M/s. Kumar Exports vs. M/s. Sharma Carpets, wherein the Honble Apex Court has observed as hereunder: 24
The accused in a trial under section 138 of the n.i.act has two options. He can either 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. To rebut the statutory presumption an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial.
34. In another ruling reported in 2008 (1) AIR Kar R 129 in the case of John K. John vs. Tom Verghese and Another the guidelines and principles in the said case is that -
The High Court is entitled to take notice of the conduct of the parties in order to ascertain probabilities of the case. On facts the Court has held that the respondent alleged to have borrowed huge sum from appellant complainant despite suits for recovery of defaulted amount filed against 25 him by appellant No document executed Amount advanced carrying no interest Finding of fact by High Court that respondent did not issue cheques in discharge of any debt an discharged burden of proof cast on him under Section 139 Being not perverse cannot be interfered with under Art. 136. Therefore, the finding given by the High Court acquitting the accused cannot be interfered with. 35. Looking to the above said rulings ultimately it all depends on the facts of the particular case. If the Court on analysis of the evidence and the materials on record comes to the conclusion that the defence of the accused is probable and acceptable if such material has not been considered by the Court below, High Court can interfere with such order. Of course in this case accused though has taken defence of loss of cheques due to the commission of theft by the complainant that defence has not been proved by the accused even by means of probabilities because the accused has not 26 produced any material before the Court with regard to the loss of cheque as alleged by him. It is also not denied by him that the said cheque does not belong to him and there is no account in his name referable to the cheque, which is in dispute. The only point that arises for consideration is that Whether the accused has placed any material with regard to non-existence of debt or liability on the part of the accused?
36. In this background, the evidence placed before the Court play a dominant role. The complainant has examined himself as PW.1. It is categorically reiterated with regard to the issuance of the cheque by the accused, presentation of the same and dishonour of the same. In the course of cross-examination it is elicited that accused and the complainant were known to each other about six years, they were doing business and they were also had some money transaction with each other. It is also admitted by means of suggestions 27 that the complainant was often visiting shop of the accused and he has stolen cheques. It is further stated that prior to the present loan transaction between accused and complainant there were two transactions and even complainant has given an amount of Rs.2,00,000/- in the year 2005 prior to the present loan transaction it is also admitted that the accused has given a cheque for discharge of the said earlier amount of Rs.2,00,000/- and the said amount has not been paid to him. It is further elicited that even in spite of the accused not repaying the earlier loan amount, the complainant has given an amount of Rs.2,00,000/- on 25.12.2005 but the complainant has not explained what was the reason for giving such huge amount of Rs.2,00,000/- to the accused, when the accused has not returned the earlier amount of Rs.2,00,000/- without any security on the date of advancing the loan. It is also admitted by the complainant that in the month of November 2005 the accused has taken Rs.2,00,000/- 28 but he has not stated within what time he had to repay the same. The complainant has demanded for the said amount and the accused told that he would arrange for the money. It is further admitted by the complainant that he presented the earlier cheque issued by the accused for a sum of Rs.2,00,000/- and same was bounced. It is also admitted by the complainant that he has not taken any action to issue any notice to the accused or to file any complaint under section 138 of Negotiable Instruments Act. It is further admitted by the complainant in the evidence that he has paid the loan amount of Rs.2,00,000/- on 25.12.2005 in cash. It is further admitted that he has taken that amount from his friend from one Ashok Nadar by way of loan and he in turn gave that amount to the accused by way of loan. It is also admitted, though the said amount was given by Ashok Nadar on 25.12.2005 as loan, till the date of evidence before the Court on 07.07.2007, the said 29 Ashok Nadar has not even demanded for the said amount.
37. From the above said evidence, it is crystal clear that the accused is a defaulter in payment of the money of Rs.2,00,000/- earlier and he has issued a cheque with reference to the loan transaction and in spite of repeated requests the said amount was not paid and the cheque, which was issued also came to be bounced. In the circumstance, whether the complainant can trust the accused so much for the purpose of giving further huge amount of Rs.2,00,000/- without there being any record to that effect. As admittedly in the complaint it is stated that on the date of the transaction the accused has not given this disputed cheque but he gave cheque on 25.01.2006 after the loan transaction. Therefore, whether it can be said that the complainant could advance such money without taking any security from the accused as on the 30 date of the loan transaction. Apart from the above said strong circumstance, which makes the complainant case doubtful, as rightly contended by the learned counsel for the petitioner that the said Ashok Nadar has not been examined before the Court at least to show that he had such an amount on that particular day and he paid the said amount to the complainant in order to enable the complainant to give the same in favour of the accused. It is also admitted that the complainant has not produced any other documents except a disputed cheque to show that the said transaction was taken place between him and the accused either by producing Income Tax returns or any other document evidencing the transaction. When a person has no money with him and particularly knowing that the accused is a defaulter and is not conducting himself to repay the amount to him and the earlier cheque issued by him was bounced would it be expected of an ordinary prudent man to give such huge amount by taking loan from some other 31 person, therefore, in my opinion, the accused has furnished sufficient materials in the course of cross- examination of the complainant that it is doubtful transaction between the accused and the complainant particularly as on 25.12.2005.
38. I have referred to the decision in John K. Johns case referred supra in that case also it is observed in facts that, there was a money dispute between the parties there was a case filed before the Court and in spite of the existence of a case between the parties the complainant claimed that he has advanced some money to the accused which was disbelieved by the Court and in that case also both the Trial Court and the First Appellate Court have raised presumption under section 139 of the Act in favour of the complainant and convicted the accused and ultimately Supreme Court on re-appreciation of evidence on record came to the conclusion that the existence of a debt or 32 liability was doubtful and the accused has placed sufficient material to rebut the transaction.
39. On careful perusal of the judgments of the Trial Court and the First Appellate Court with regard to the existence of the debt or liability has not at all discussed the evidence with reference to the elucidation of doubtful facts in the course of cross examination of P.W.1. On careful consideration of the judgments of the both Courts, they never whisper anything about the previous transactions between the complainant and the accused and also issuance of the cheque earlier by the accused, which came to be bounced and thereafter taking loan from other person, complainant advanced loan to the accused. All these facts have not even looked into by the Courts below.
40. In view of the above said facts and circumstances, though perception of a person differs from one another with regard to the acceptance of 33 evidence on record but in my perception and consideration, the accused has been successful in creating doubt in the mind of the Court with regard to the existence of the debt or liability particularly with reference to the alleged transaction dated 25.12.2005 as alleged by the complainant. Hence, in my opinion the High Court has full power to interfere with such judgment of the Trial Court as subject matter exactly falls within the parameters of section 397 of the code and also guidelines of the Apex Court as noted in the above said decisions. Therefore, I am of the considered opinion the Trial Court and the First Appellate Court have committed serious error in merely proceeding on the basis of the presumption under section 139 of the Act and also on the basis that, the accused has not proved his defence with reference to the loss of cheque etc. Hence, I answered the point in the affirmative and proceeded to pass the following: 34 ORDER The revision petition is hereby allowed. Consequently, the judgment and sentence passed by the III-Addl. Civil Judge (Jr.Dn.) & JMFC, Kalaburagi in C.C.No.1362/2006 which is affirmed by Fast Track Court I at Kalaburagi in Crl.A.No.46/2009 are hereby set aside. Consequently, the accused is acquitted of the charges levelled against him under section 138 of n.i.act. If any fine amount is deposited by the accused/petitioner, the same is ordered to be refunded to him. The Court places on record the valuable assistance given by the learned counsel for the petitioner Sri Shivakumar Kalloor and learned counsel for the respondent Sri Venkatesh C. Mallabadi. Sd/- JUDGE PL*