Calcutta High Court in a recent Judgment noted that it cannot be a probable defence that the complainant has no capacity to pay the money until and unless an initial defence was set up by a reply notice or the accused examines his witnesses and relies upon documentary evidence. High Court observed that the order of the Appellate Court calls for interference.
The Single Judge Bench of Justice Tirthankar Ghosh was hearing an appeal on the Negotiable Instruments Act and observed that As such what was required for the accused to do in such a case was to raise a probable defence. It cannot be a probable defence that the complainant has no capacity to pay the money until and unless an initial defence was set up by a reply notice or the accused examines his witnesses and relies upon documentary evidence. High Court reversed the order of acquittal as the accused failed to raise any defence to rebut the statutory presumption.
The present appeal has been preferred against the order of acquittal passed by the learned Additional Sessions Judge, in connection with the Criminal Appeal, wherein the Appellate Court reversed the order of conviction and sentence passed by the learned Judicial Magistrate under Section 138 of the Negotiable Instruments Act, 1881.
Facts:
The complainant/appellant filed a complaint before the learned ACJM alleging the commission of an offence punishable under Section 138 of the Negotiable Instruments Act against the accused/respondent. The allegations made in the petition of complaint were to the effect that the complainant and the accused had a business relationship and as such, they were known to each other. The accused and on or about 25.06.07 the complainant entered into an agreement for telecasting a serial on Sun TV Bangla. It was agreed by and between the parties that there was a number of episodes and each episode was of 23½ minutes. For the said purpose as a security deposit, a sum of Rs.3,00,000/- was tendered. A further sum was demanded by the accused in order to incorporate the TV channel namely Sun TV Bangla, which the complainant collected from his friends and gave him with the hope that his serial would be telecast. It has been alleged that from 26.06.2008 to 12.12.2008 on different dates the complainant paid by cash a sum of Rs.9,70,000/-. In the discharge of such debt and legal liability, the accused issued an account payee cheque in favour of the complainant for a sum of Rs.9,70,000/- bearing Cheque No. 767432 dated 12.12.08 drawn on Punjab National Bank, G.T. Road Branch, Burdwan. The said cheque was presented several times i.e. on 12.12.08, on 01.01.09, on 27.04.09 and on 14.05.09 and on each occasion the same was dishonoured with the endorsement ‘fund insufficient’. Lastly, the cheque was presented with the complainant’s banker i.e. United Bank of India, Titagarh Branch on 08.06.09 which was dishonoured vide return memo dated 09.06.09 issued by Punjab National Bank, 18, N.S. Road, Kolkata-1, Branch with the endorsement ‘fund insufficient’ and the bank return memo along with the dishonoured cheque was received by the complainant on 09.06.09. The complainant sent notice of demand by registered post with A/D dated 23.06.09 through his learned Advocate demanding the amount of Rs.9,70,000/- within 15 days from the date of receipt of the notice. The said notice/letter was sent on23.06.09 vide postal receipt no. 2981 dated 23.06.09 which was returned with postal remarks ‘absence’ or ‘refused’ on 02.07.09 and was received by the learned Advocate for the complainant on 14.07.09. The complainant alleges that the accused refused to accept the notice and neglected to pay the amount covered by the dishonoured cheque and as such made herself liable for the commission of an offence punishable under Section 138 of the Negotiable Instruments Act. On a such complaint being filed before the learned ACJM, Barrackpore, cognizance of the offence was taken and the case was transferred to the Court of the learned Judicial Magistrate for trial and disposal.
The learned trial Court by its judgment dated 07.01.17 was pleased to convict the accused/ respondent and sentence her to pay compensation of Rs.19,40,000/- only in default to suffer Simple Imprisonment for four months.
Being aggrieved by the order of conviction and sentence passed by the learned Trial Court, the accused preferred an appeal. The said appeal was finally heard out by the learned Additional Sessions Judge. The learned Appellate Court after hearing both the parties was pleased to set aside the judgement and order of conviction and sentence so passed by the learned trial Court on 07.01.17 and acquitted the accused/appellant.
Appellant’s Submission:
Learned Advocate appearing for the appellant submitted that the cheque in question was admitted in evidence without any objection and the learned appellate Court on its own stressed the difference in ink with regard to the signature of the accused on the cheque and the body of the cheque. There was no material in evidence whereby the defence has challenged the signature or taken a plea of a lost cheque. The nature of cross-examination itself would reflect that the same was a case of mere denial and finding out certain minor inconsistencies in the prosecution case. No evidence was led by the accused to dislodge as to how the cheque came into possession of the complainant rather emphasis was made in cross-examination wherefrom the complainant obtained the money to give a loan to the accused. The appellate Court according to the learned Advocate ignored the provisions of Section 139 and Section 118 of the N.I. Act and arrived at its finding of acquittal based on the standard of proof beyond reasonable doubt as in Indian Penal Code offences which by no stretch of the imagination can be an accepted proposition in cases under the provisions of the Negotiable Instruments Act.
Respondent’s Submission:
Learned Advocate appearing for the respondent/accused supported the judgment of the appellate Court and argued that a complainant in a case under the provisions of the N.I. The act cannot claim as of right the amount covered by the dishonoured cheque until and unless he substantiates his case that the cheque was issued in discharge of a legally enforceable debt or liability. To that aspect learned Advocate drew the attention of the Court to the relevant part of the cross-examination as also the findings of the appellate Court to the effect that there was no agreement between the parties, no trade license was produced, no money receipt was brought in evidence to show as to wherefrom the money was borrowed by the complainant, neither the persons whose names were disclosed in evidence (as those who gave money to the complainant) were examined in support of the prosecution case. Further, the observation of the appellate Court with regard to the difference in ink does support the defence case that the cheque was not issued in discharge of liability and as such the appeal should be dismissed.
High Court’s Analysis:
The High Court noted that in P. Rasiya v. Abdul Nazer, REED 2022 SC 08027, the Hon’ble Supreme Court has dealt with the issue relating to the nature of transactions and source of funds of the complainant in the backdrop of the provisions of Section 138 of the N.I. Act.
In Tedhi Singh v. Narayan Dass Mahant, REED 2022 SC 03074, the Hon’ble Supreme Court was pleased to deal with the manner in which the complainant is expected to lead evidence in a proceeding under the provisions of Section 138 of N.I. Act. It has been held that unless the accused in reply notice to the statutory notice sent is able to set up a case regarding the capacity of the complainant there is no requirement for the complainant to lead such evidence. In case the accused intends to demonstrate he has to examine his witness and place documentary materials to rebut the prosecution or the complainant’s case.
The High Court observed that in the present case the only relevant answers in cross-examination were a mode of denial wherein the complainant answered in respect of a question of the accused that it was “Not a fact that, the accused persons never issued a cheque of the amount Rs.9,70,000/-”.
In the present case the accused did not adduce any evidence nor did she rely upon any documentary materials to rebut the prosecution or the complainant’s case. As such the cited three judgments of the Hon’ble Supreme Court assumed importance in view of the fact that all the questions which were confronted relate to the source of funds of the complainant and the capacity of the complainant to give such money to the accused neither any document has been relied upon by the defence to show that there cannot be such due nor the signature in the cheque has been disputed. Thus, it would be very difficult for a Court to accept a rebuttal of the statutory presumption available under the provisions of the Negotiable Instruments Act. The issues weighed with the Appellate Court in acquitting the accused were that the complainant has not been able to prove that the cheque was issued by the convict/appellants in the discharge of his liability or any legally enforceable debt. The reasons for coming to such a conclusion was because the complainant in cross-examination has neither given the date, month or year when the loan was given nor had obtained any receipt from the accused; the amount of the loan has neither been reflected in the income tax return of the complainant nor has it been in the books of account; on the contrary, the cheque in question was signed by the accused with the different ink and the particulars regarding the date, name and money it has been filled up in the cheque which has been in different ink, no chit of paper has been produced by the complainant in support of the transaction of a huge sum of Rs.9,70,000/-. Such infirmities according to the appellate Court were sufficient to draw inference regarding the probability of defence of the accused that he has not issued the cheque for discharging the liability and the Magistrate Court erroneously banking upon Section 139 of the N.I. Act to arrive at its finding of guile.
The aforesaid observations of the appellate Court were beyond the scope of appreciating the evidence in respect of provisions relating to the adjudication of an offence under Section 138 of the N.I. Act. Section 139 of the N.I. Act is a statutory presumption which carries with it an expression “unless the contrary is proved”. The test of proportionality in such cases must guide the determination of the issue of rebuttal. As such what was required for the accused to do in such a case is to raise a probable defence. It cannot be a probable defence that the complainant has no capacity to pay the money until and unless an initial defence was set up by a reply notice or the accused examines his witnesses and relies upon documentary evidence. In this case, the signature on the cheque also has not been challenged, no evidence to that effect was reflected in the cross-examination of the complainant (the sole witness in this case). Further, no materials have been produced to show how the cheque was in possession of the complainant as there are no allegations of a lost cheque or the signature in the cheque being forged. Although it was permitted in a case of such nature to raise a probable defence from the available materials in the cross-examination of the prosecution witness only, the nature of the cross-examination and the probable defence raised by the accused did not qualify as a rebuttal to the provisions under Section 139 of the N.I. Act and the learned Appellate Court unnecessarily resorted to the issue of difference in ink as no case has been made out by the accused for the cheque having been lost or the same was obtained by coercion.
The High Court noted that having regard to the factual circumstances presented by the prosecution/complainant in this case in its evidence and the accused has failed to create or raise any defence to rebut the statutory presumption and having regard to the aforesaid three cited judgments of the Hon’ble Supreme Court, the order of the Appellate Court calls for interference. Accordingly, the judgment and order of acquittal dated 5th September 2018 passed by the learned Additional Sessions Judge, Barrackpore, in Criminal Appeal No. 06/17 were set aside and the order passed by the learned Judicial Magistrate was confirmed.
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