Thursday 13 September 2018

Whether accused can be convicted in cheque bounce case if complainant fails to prove dishonour of cheque?

 There can be no doubt about the proposition that it was for the appellant prove the fact of dishonour of cheque so as to prove the guilt of the respondent.

9. In this context, Section 146 of the aforesaid Act is relevant, which reads as follows:-

"146. Bank's slip prima facie evidence of certain facts.-The Court shall, in respect of every proceeding under this Chapter, on production of bank's slip or memo having thereon the official mark denoting that the cheque has been dishonoured, presume the fact of dishonour of such cheque, unless and until such fact is disproved."

10. The said provision states the manner in which a complainant can prove dishonour of cheque. The complainant is required to produce slip or memo having an official mark on it, denoting that the cheque has been dishonoured. If such a document is placed on record by the complainant it constitutes a prima facie evidence of dishonour and a presumption operates about the fact of the dishonour of cheque, unless and until such fact is disproved. Thus, once such a memo or slip issued by the bank bearing its official mark concerning dishonour of cheque is placed on record by the complainant, the burden is clearly on the accused to disprove the fact of dishonour of cheque.

11. But, there cannot be any doubt about the fact that Section 146 of the said Act provides for one of the modes of proving dishonour of cheques and it certainly cannot be the only mode of proving the same. In the present case, the memo purportedly issued by the bank showing dishonour of cheque, admittedly does not bear official mark of the bank. It was for this reason, that the said document was not exhibited during evidence. Thus, the mode specified in Section 146 of the said Act was not satisfied in the present case and consequently no presumption arose about dishonour of cheque in question. In such a situation, the appellant claims that the dishonour of cheque was proved because a statutory notice was issued by her to the respondent. It was pointed out that specific pleadings were made in the complaint filed before the Court stating dishonour of the said cheque and that when the respondent had failed to adduce any evidence in support of her defence, the statements made by the appellant in this statutory notice and the complaint were enough to prove dishonour of the cheque. It was submitted that when there was no denial on the part of the respondent about deposit and dishonour of the cheque in question, the trial Court could not have held that the appellant had failed to prove the fact of dishonour of the cheque. It was further contended that when the findings were rendered on the question of discharge of legal debt and it was found by the trial Court that the appellant had indeed advanced hand loan for the amount stated in the cheque to the respondent, there was no reason why the trial Court could have held that the fact of dishonour of cheque was not proved by the appellant.

12. While examining the said contentions raised on behalf of the appellant, it is necessary to keep in mind that the present case concerns criminal liability alleged against the respondent. Although proceedings under the aforesaid Act are quasi criminal in nature, the fact is that when the offence under Section 138 of the said Act is said to have been proved, criminal liability is fixed upon the accused (respondent in the present case) and therefore, the evidence on record and the burden of proof have to be analyzed on the touchstone of proof beyond reasonable doubt. The burden of proof clearly lies upon the appellant in the present case to prove basic facts that would constitute an offence under Section 138 of the aforesaid Act. Under the said provision the offence is deemed to have been committed, the moment cheque in question is returned by the bank unpaid. Therefore, it is necessary that there is proof of return or dishonour of the cheque in question before it can be said that an offence under Section 138 of the Act has been committed.

13. When the complainant (appellant in the present case) asserted that the cheque was returned or dishonoured, it was for her to prove this basic fact. Section 146 of the said Act provides that if the complainant places on record a slip or memo issued by the bank having official mark of the bank thereon, denoting that the cheque was dishonoured, it would be presumed that such cheque was dishonoured until such fact was disproved. Thus, if such a document was placed on record by the appellant in the present case, it would constitute prima facie evidence of dishonour of cheque and burden would have been entirely on the respondent to disprove such a fact. But, when the memo produced in the present case by the appellant did not bear official mark of the bank, there was no document as contemplated under Section 146 of the said Act to presume that the fact of dishonour of cheque had been proved by the appellant. The burden continued to lie on the appellant to prove the basic fact of dishonour of cheque, in the facts and circumstances of the present case.

14. In such a situation, mere statement made in the statutory notice and the complaint filed before the Court would not constitute proof of dishonour of cheque, unless further evidence to corroborate the same was placed on record on behalf of the appellant. The appellant is not justified in claiming that such statements would suffice as proof of dishonour of cheque because the respondent failed to enter the witness box in support of her defence. As the complainant, it was for the appellant to prove the fact of dishonour of cheque by cogent evidence. The appellant could have examined the bank official to prove that the cheque had been indeed dishonoured, but, she failed to do so.

15. The appellant could have placed on record a certificate contemplated under Section 65-B of the Indian Evidence Act, 1872, in respect of the memo of the Bank, which was allegedly a computer generated electronic record. But, no such evidence was placed on record.

16. When the basic fact of dishonour of cheque was not proved by the appellant and the burden was not discharged, offence under Section 138 of the said Act could not be said to have been committed by the respondent. 

17. Analysis of the provisions of the said Act, particularly Sections 138, 142 and 146 thereof, shows that cognizance of the offence under Section 142 of the said Act could not have been taken by the Court in the present case because the basic fact of dishonour of cheque could not be proved by the appellant. The appellant failed to prove dishonour of cheque by any mode other than the one provided under Section 146 of the said Act. The memo of return of cheque in the present case admittedly did not bear official mark of the Bank, due to which presumption in favour of the appellant did not arise. Therefore, the complaint in the present case was correctly rejected by the trial Court, thereby acquitting the respondent.

IN THE HIGH COURT OF BOMBAY (NAGPUR BENCH)

Criminal Appeal No. 360 of 2017

Decided On: 08.08.2018

 Vandana  Vs. Abhilasha

Hon'ble Judges/Coram:
Manish Pitale, J.



1. This is an appeal against acquittal filed by the original complainant. By the impugned judgment and order dated 30-03-2016, the Court of Judicial Magistrate First Class, Nagpur (trial Court) passed in Summary Criminal Case No. 16722 of 2014, has acquitted the respondent (accused) for offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short, 'the said Act').

2. The case of the appellant was that she and the respondent were neighbours and that they had family relations. The appellant had lent amounts towards hand loan to the respondent for tuition fees of her daughter and some other expenses from 04-02-2013 to 18-07-2013 and that a total amount of Rs. 1,63,000/- had been advanced to the respondent. According to the appellant, after much persuasion, the respondent had issued a cheque dated 11-03-2014 for an amount of Rs. 1,63,000/- towards the repayment of the said loan.

3. But, when the cheque was presented for encashment on 26-03-2014, it was dishonored for the reason "insufficient funds". This fact was informed by the appellant to the respondent, who asked the appellant to again present the cheque for encashment after one month and she assured that the cheque would be encashed. Accordingly, on 12-05-2004, the appellant again presented the cheque for encashment. But, it was dishonoured once again for the same reason. Consequently, the appellant issued demand notice to the respondent. In this situation, the appellant was constrained to file complaint under Section 138 of the said Act, against the said respondent.

4. In support of her case, the appellant placed on record documents in the form of disputed cheque (Exhibit-21), demand notice (Exhibit-22), postal acknowledgment (Exhibit-23) and statement of the appellant recorded by the Police (Exhibit-24). The appellant also placed on record a computer generated copy of the memo issued by the bank when the cheque was dishonoured along with list of documents at Exhibit-20. But, since the said memo did not bear official mark or signature of the bank officer, it was not exhibited during evidence. The appellant entered into the witness box, in support of her case.

5. On the other hand, the respondent did not lead any evidence in support of her defence. She relied on the cross examination of the appellant to demonstrate that the cheque in question was given to certain persons from a "Bachat Gat" for obtaining loan. However, there was no direct suggestion made to the appellant in cross examination that the said cheque was given by the respondent to any of the said persons. It could also not be brought on record by the respondent that the appellant had any relations with those persons to whom the cheque was allegedly handed over. On the basis of the oral and documentary evidence, the trial Court found that although the appellant had been able to prove that the cheque in question pertained to discharge of legal debt i.e. repayment of hand loan, it was found that the appellant had failed to prove that the cheque had been dishonoured and consequently notice issued to the respondent was within the statutory period specified under Section 138 of the aforesaid Act. On this basis, the trial Court found that the complaint of the appellant was liable to be dismissed. As a result, the respondent stood acquitted by the impugned judgment and order.

6. Mrs. R.D. Raskar, learned Counsel appearing on behalf of the appellant, submitted that when the trial Court had returned positive findings in favour of the appellant on the question of the appellant having advanced hand loan to the respondent, in respect of repayment of which the cheque in question had been issued, a grave error had been committed by the trial Court in acquitting the respondent. It was submitted that while the appellant had placed on record documentary and oral evidence in support of her case, the respondent had failed to enter the witness box and she had not examined a single witness in support of her defence. In such a situation, the trial Court was not justified in holding that the appellant had failed to prove that she had deposited the cheque in question and that the same had been dishonoured. It was pointed out that a perusal of the cheque at Exhibit-21 showed that there was a stamp of the concerned bank, proving that the cheque had been indeed deposited. It was further submitted that when the appellant had stated in her complaint and also in her oral evidence before the Court that the cheque had been dishonoured, it was for the respondent to bring some evidence on record to dispute the same, particularly when presumptions under Sections 118 and 139 of the aforesaid Act operated against her. It was further submitted that the trial Court was not justified in placing reliance on Section 146 of the aforesaid Act to hold that the appellant had failed to prove dishonour of cheque because the said provision indicated only one of the many ways in which proof of dishonour could be placed on record. On this basis, it was submitted that when the trial Court itself had held in favour of the appellant on the merits of her claim, the complaint could not have been rejected and that the respondent ought to have been convicted for offence punishable under Section 138 of the said Act.

7. Per contra, Shri R.R. Vyas, learned Counsel appearing on behalf of the respondent, submitted that since the present case concerned criminal liability alleged against the respondent, the burden of proof was entirely on the appellant to prove the basic facts of deposit and dishonour of cheque, in order to claim that an offence under Section 138 of the said Act had been committed by the respondent. Reference was made to Sections 101 to 104 of the Indian Evidence Act, 1872, to emphasize that the burden of proof was absolutely on the appellant to prove the said facts pertaining to dishonour of cheque and that in the absence of cogent evidence to prove the same, no error could be found with the impugned judgment and order passed by the trial Court. It was submitted that Section 138 read with Section 142 of the said Act required that all the conditions specified under the said provisions were to be satisfied for cognizance of offence under Section 138 of the Act to be taken by the Court. It was submitted that in the present case, admittedly, the cheque in question had been deposited twice. Although cheque (Exhibit-21) did bear a stamp of the bank, there was no date to indicate as to when it was deposited. The memo purportedly issued by the bank for return of cheque did not bear official mark of the bank and therefore, it did not satisfy the requirement of Section 146 of the aforesaid Act. It was submitted that even if it was accepted that Section 146 of the Act provided only one of the modes in which dishonour of cheque could be proved, the appellant in the present case ought to have placed on record evidence in the form of examination of the bank officer or any other such evidence to prove that the cheque was indeed dishonoured. It was submitted that when this fundamental fact was not proved in the present case, there was no question of presumptions operating against the respondent. Since there was lack of evidence to show dishonour of cheque, there was no way in which it could be ascertained as to whether the statutory notice issued by the appellant was within the limitation provided under Section 138 of the said Act and therefore, the Court could not have taken cognizance of the offence under Section 142 of the said Act. On this basis, it was submitted that the trial Court had correctly rejected the complaint of the appellant and acquitted the respondent.

8. Heard learned Counsel for the parties. In the present case, if the findings of the trial Court that the appellant had failed to prove dishonour of cheque and that the complaint could not be said to have been filed within limitation, are found to be erroneous, then the impugned order acquitting the respondent will have to be reversed. Since the trial Court found that the issue of legal debt or liability was proved by the respondent, the only question that arises in the present case is, as to whether it could be said that there was sufficient evidence to prove dishonour of cheque to conclude that the respondent had committed offence under Section 138 of the said Act. There can be no doubt about the proposition that it was for the appellant prove the fact of dishonour of cheque so as to prove the guilt of the respondent.

9. In this context, Section 146 of the aforesaid Act is relevant, which reads as follows:-

"146. Bank's slip prima facie evidence of certain facts.-The Court shall, in respect of every proceeding under this Chapter, on production of bank's slip or memo having thereon the official mark denoting that the cheque has been dishonoured, presume the fact of dishonour of such cheque, unless and until such fact is disproved."

10. The said provision states the manner in which a complainant can prove dishonour of cheque. The complainant is required to produce slip or memo having an official mark on it, denoting that the cheque has been dishonoured. If such a document is placed on record by the complainant it constitutes a prima facie evidence of dishonour and a presumption operates about the fact of the dishonour of cheque, unless and until such fact is disproved. Thus, once such a memo or slip issued by the bank bearing its official mark concerning dishonour of cheque is placed on record by the complainant, the burden is clearly on the accused to disprove the fact of dishonour of cheque.

11. But, there cannot be any doubt about the fact that Section 146 of the said Act provides for one of the modes of proving dishonour of cheques and it certainly cannot be the only mode of proving the same. In the present case, the memo purportedly issued by the bank showing dishonour of cheque, admittedly does not bear official mark of the bank. It was for this reason, that the said document was not exhibited during evidence. Thus, the mode specified in Section 146 of the said Act was not satisfied in the present case and consequently no presumption arose about dishonour of cheque in question. In such a situation, the appellant claims that the dishonour of cheque was proved because a statutory notice was issued by her to the respondent. It was pointed out that specific pleadings were made in the complaint filed before the Court stating dishonour of the said cheque and that when the respondent had failed to adduce any evidence in support of her defence, the statements made by the appellant in this statutory notice and the complaint were enough to prove dishonour of the cheque. It was submitted that when there was no denial on the part of the respondent about deposit and dishonour of the cheque in question, the trial Court could not have held that the appellant had failed to prove the fact of dishonour of the cheque. It was further contended that when the findings were rendered on the question of discharge of legal debt and it was found by the trial Court that the appellant had indeed advanced hand loan for the amount stated in the cheque to the respondent, there was no reason why the trial Court could have held that the fact of dishonour of cheque was not proved by the appellant.

12. While examining the said contentions raised on behalf of the appellant, it is necessary to keep in mind that the present case concerns criminal liability alleged against the respondent. Although proceedings under the aforesaid Act are quasi criminal in nature, the fact is that when the offence under Section 138 of the said Act is said to have been proved, criminal liability is fixed upon the accused (respondent in the present case) and therefore, the evidence on record and the burden of proof have to be analyzed on the touchstone of proof beyond reasonable doubt. The burden of proof clearly lies upon the appellant in the present case to prove basic facts that would constitute an offence under Section 138 of the aforesaid Act. Under the said provision the offence is deemed to have been committed, the moment cheque in question is returned by the bank unpaid. Therefore, it is necessary that there is proof of return or dishonour of the cheque in question before it can be said that an offence under Section 138 of the Act has been committed.

13. When the complainant (appellant in the present case) asserted that the cheque was returned or dishonoured, it was for her to prove this basic fact. Section 146 of the said Act provides that if the complainant places on record a slip or memo issued by the bank having official mark of the bank thereon, denoting that the cheque was dishonoured, it would be presumed that such cheque was dishonoured until such fact was disproved. Thus, if such a document was placed on record by the appellant in the present case, it would constitute prima facie evidence of dishonour of cheque and burden would have been entirely on the respondent to disprove such a fact. But, when the memo produced in the present case by the appellant did not bear official mark of the bank, there was no document as contemplated under Section 146 of the said Act to presume that the fact of dishonour of cheque had been proved by the appellant. The burden continued to lie on the appellant to prove the basic fact of dishonour of cheque, in the facts and circumstances of the present case.

14. In such a situation, mere statement made in the statutory notice and the complaint filed before the Court would not constitute proof of dishonour of cheque, unless further evidence to corroborate the same was placed on record on behalf of the appellant. The appellant is not justified in claiming that such statements would suffice as proof of dishonour of cheque because the respondent failed to enter the witness box in support of her defence. As the complainant, it was for the appellant to prove the fact of dishonour of cheque by cogent evidence. The appellant could have examined the bank official to prove that the cheque had been indeed dishonoured, but, she failed to do so.

15. The appellant could have placed on record a certificate contemplated under Section 65-B of the Indian Evidence Act, 1872, in respect of the memo of the Bank, which was allegedly a computer generated electronic record. But, no such evidence was placed on record. The trial Court has also held that there was lack of evidence to show even deposit of the cheque because deposit slip was not placed on record by the appellant. But, a perusal of the cheque in question (Exhibit-21) does show that stamp of the bank in which the cheque was deposited is very much present on the cheque. To that extent, the trial Court was not right in holding that even the proof of deposit of cheque was not on record. Yet, this fact alone does not take the case of the appellant any further because the stamp affixed on the cheque shows only name of the bank and there is nothing to signify the date on which the cheque was deposited in the bank. Even as per the case of the appellant, the cheque in question was deposited twice and it is clear that there is no cogent evidence placed on record by the appellant to show dishonour of the said cheque.

16. When the basic fact of dishonour of cheque was not proved by the appellant and the burden was not discharged, offence under Section 138 of the said Act could not be said to have been committed by the respondent. Another important aspect of the present case is that when there is lack of evidence to show dishonour of cheque and consequently the date when the cheque was dishonoured, there is no reference point to ascertain as to whether the notice for demand of payment was issued by the appellant to the respondent within the period of 30 days of receipt of information from the bank regarding return of cheque as unpaid, as provided under proviso (b) to Section 138 of the said Act. This is the reason why the trial Court has held that the appellant failed to prove that she made demand for payment of amount within the statutory period, as the statutory period could not be computed in the facts of the present case.

17. Analysis of the provisions of the said Act, particularly Sections 138, 142 and 146 thereof, shows that cognizance of the offence under Section 142 of the said Act could not have been taken by the Court in the present case because the basic fact of dishonour of cheque could not be proved by the appellant. The appellant failed to prove dishonour of cheque by any mode other than the one provided under Section 146 of the said Act. The memo of return of cheque in the present case admittedly did not bear official mark of the Bank, due to which presumption in favour of the appellant did not arise. Therefore, the complaint in the present case was correctly rejected by the trial Court, thereby acquitting the respondent.

18. In the light of the above, it is evident that the present appeal does not deserve to be allowed. The appellant has failed to demonstrate any error in the findings rendered by the trial Court on the question of proof of dishonour of cheque. Consequently, the appeal is dismissed and the impugned judgment and order passed by the trial Court is confirmed.


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