The High Court dismissed the appellant’s complainant’s appeal and upheld the order of acquittal (Para 2)
On direct confrontation, the accused is said to have issued a post-dated cheque No.163044 (dated 19.10.2017) for a sum of Rs.6,95,204/- towards part repayment of outstanding dues. The accused assured the complainant that the balance dues would be repaid by issuing a second cheque in the month of December 2017. (Para 5)
The Trial Court found that (i) the complainant had discharged his initial onus of proving the essential facts underlying the offence under Section 138 of the NI Act; (ii) the signature on the cheque [Exh. CW1/A) was admitted by the accused and, hence, it rightly raised the statutory presumption under Section 139 NI Act. It, then, rightly noted that the onus of rebutting the presumption lay on the accused and said onus was to be discharged by raising a ‘probable defence’ which would create a doubt as to the existence of a legally enforceable debt. (Para 12)
It then framed the point for determination as follows:
“The only question remaining for determination is whether a legally valid and enforceable debt existed qua the complainant and the cheque in question (Ex. CWI/A) was issued in discharge of said liability/debt?” (Para 13)
The Trial Court answered the issue in the negative. It held that the complainant had failed to prove his case beyond reasonable doubt. It has been observed that the defence led by the accused has created a doubt regarding the truthfulness of the complainant’s case. (Para 14)
The underlying basis of the findings in the High Court judgment can be summarised thus: (Para 18)
The presumption under Section 139 was rebutted by putting questions to the appellant in his cross examination and explaining the incriminating circumstances found in the statement recorded under Section 313 of Cr.P.C. (Para 18.1)
According to him, the signature on the cheque not being under dispute, and the presumption under Section 139 having been drawn against the accused, there was nothing available on record to suggest that the accused had discharged his onus of rebutting the presumption. He drew our attention to the reasoning given in the orders of acquittal to contend that courts below had erroneously proceeded to appreciate the evidence as though the onus was on the complainant to prove that ‘the cheque was issued in discharge of a debt’. Once the presumption operates, the onus rests on the accused to prove the nonexistence of debt/liability and the courts could not have doubted the complainant’s case from any point of view. He finally argued that the respondent cannot be said to have raised a ‘probable defence’ since the case set up in defence was full of inconsistencies and bereft of any evidence. He, accordingly, prays that concurrent findings be set aside, and an order of conviction be passed against the accused. (Para 20)
He submits that the complaint is lacking in material particulars-it fails to state the total sum loaned, the dates on which the loans were given, the basis on which the demand was made for a sum of Rs. 6,95,204/-. These facts coupled with other circumstances has justifiably created a doubt in the mind of the court as to the genuineness of the complainant’s case and therefore, courts below were justified in disbelieving the complainant’s version. On these grounds he prays for dismissal of the appeal. (Para 21)
Since the execution of the cheque is, admittedly, not under dispute, the limited question to be considered, is (i) whether the accused can be said to have discharged his ‘evidential burden’, for the courts below to have concluded that the presumption of law supplied by Section 139 had been rebutted? (Para 23)
As soon as the complainant discharges the burden to prove that the instrument, say a cheque, was issued by the accused for discharge of debt, the presumptive device under Section 139 of the Act helps shifting the burden on the accused. The effect of the presumption, in that sense, is to transfer the evidential burden on the accused of proving that the cheque was not received by the Bank towards the discharge of any liability. Until this evidential burden is discharged by the accused, the presumed fact will have to be taken to be true, without expecting the complainant to do anything further. (Para 38)
When it was put to him that he has reneged on his promise to pay on several occasions and sought to avoid the complainant by changing his telephone number, the accused denies that he had changed his number but however, admits that he could not pay the entire sum at one go. He further admits that he did pay some interest but could not pay the remaining sum since the complainant would increase the outstanding amount every month by one lakh rupees and had been demanding higher amount. As regards the circumstance of return of the cheque, the legal notice and non-reply to the demand notice, he admits of having received the demand notice. He states that he had no knowledge about the dishonor of his cheque since his cheque book and bank passbook were kept in his sister-in-law’s house. (Para 51)
On an overall consideration of the record, we find that the case set up by the accused is thoroughly riddled with contradictions. It is apparent on the face of the record that there is not the slightest of credibility perceivable in the defense set up by the accused. (Para 52)
Nothing significant has been elicited in the cross-examination of complainant to raise any suspicion in the case set up by the complainant. Other than some minor inconsistencies (Para 54)
There is a fundamental flaw in the way both the Courts below have proceeded to appreciate the evidence on record. Once the presumption under Section 139 was given effect to, the Courts ought to have proceeded on the premise that the cheque was, indeed, issued in discharge of a debt/liability. (Para 55)
Coming to the finding of High Court, we find again, there has been fundamental error in the approach with which the High Court has proceeded to consider the evidence on record. In paragraph 6 of the impugned order, the High Court finds that the complainant has proved the issuance of cheque, which means that the presumption would come into immediate effect. In paragraph 13, it rightly observes that the burden is on the accused to rebut such presumption. In the very next paragraph, it finds that the accused has rebutted the presumption by putting questions to the complainant and explaining the circumstances under section 313 Cr.P.C. (Para 60)
There is no elucidation of material circumstances/basis on which the Court reached such conclusion. It notes the allegation made in the complaint that the complainant had given the loan on 01.03.2014 and on several dates thereafter. Based on this averment, the High Court rather shockingly concludes that: “If the complainant had given loans on various dates, he must have maintained some document qua that, because it was not a one-time, loan but loan along with interest accrued on the principal, which made the amount to Rs.6,95,204/-.” Therefore, according to the High Court, ‘the burden was primarily on the complainant to prove the debt amount’. (Para 61)
The fundamental error in the approach lies in the fact that the High Court has questioned the want of evidence on part of the complainant in order to support his allegation of having extended loan to the accused, when it ought to have instead concerned itself with the case set up by the accused and whether he had discharged his evidential burden by proving that there existed no debt/liability at the time of issuance of cheque. (Para 62)
SUPREME COURT OF INDIA
2023 STPL(Web) 322 SC
[2023 INSC 888]
Rajesh Jain Vs. Ajay Singh
Criminal appeal no. 3126 of 2023 (@ Special Leave Petition (Crl.) No.12802 of 2022)-Decided on 9-10-2023
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