Saturday, 31 December 2016

What is importance of S 139 of NI Act in appreciation of evidence in cheque dishonour case?

This approach of the Magistrate does not seem to be
proper or in accordance with law.  It was not necessary to go into
the nature of the transaction or understanding between Balvinder

Singh   and   the   complainant,   inasmuch   as   the   accused   had
admittedly issued a cheque in favour of the complainant and not
in   favour   of   Balvinder   Singh.     The   concept   of   any   privity   of
contract, as introduced by the Magistrate was not called for, as the
question was whether the cheque in question was issued by the
accused in discharge of a legally enforceable debt or other liability.
In ascertaining this, the presumption contained in section 139 of
the Negotiable Instruments Act was required to be kept in mind,
but a perusal of the impugned judgment shows that the same was
not kept in mind or, at any rate, not given due weight by the
learned Magistrate in appreciating the evidence.
15 It is not that the Magistrate came to the conclusion
that there was no transaction at all between the parties; but he
came to the conclusion that the transaction was 'between Balvinder
Singh and the accused'.  Even if that would be so, since the accused
was not required to pay the amount to Balvinder Singh, but to the
complainant, the consideration that the transaction was between
Balvinder  Singh and the  accused was not relevant in  deciding
whether   the   cheque   had   been   issued   in   discharge   of   legally
enforceable debt or other liability.   It was not the case that in
respect   of   the   alleged   transaction   between   him   and   the   said
Balvinder Singh, the accused had paid, or was required to pay
anything to the said Balvinder Singh.
16 The learned counsel for the appellant also pointed out
that the observation made by the Magistrate in paragraph no.9 of
the impugned judgment which reads as “promissory note on the
record   is   also   issued   in   the   name   of   Balvinder   Singh”,   is   not

correct.  It is pointed out that the promissory note has been issued
jointly in the name of the complainant and the said Balvinder
Singh.     On examining the promissory note, copy of which is at
Exhibit­A, I find that this claim made by the learned counsel for
the complainant is correct.  
17 I   find   that   the   accused   has   been   evasive   in   his
evidence.     Though   he   spoke   about   the   cheques   having   been
'misplaced' and claimed that he had not issued any cheque or
promissory note in favour of the complainant, he avoided to say
whether the signature on the cheque and/or on the promissory
note was his or not.  He also avoided to say whether, according to
him, when the cheques were misplaced, they were already signed
by him.  In the cross­examination of the complainant also,  he did
not put forth a case that the signature on the promissory note and
more particularly  on the cheque, was not his.  In fact, he admitted
of having entered into a transaction, but claimed that it was with
Balvinder Singh.   A suggestion was given by the accused in the
cross­examination to the effect that 'it was Balvinder Singh who
was required to file a complaint in respect of the dishonor of the
cheque'.  This indicates and amounts to an admission on the part of
the accused of having entered into some money transaction. 
18 In my opinion, the Magistrate has not given due and
proper weight to the presumption contained in section 139 of the
Negotiable Instruments Act while appreciating the evidence.   The
said presumption is statutory and when there was no denial of the
accused having signed the cheque, to render it probable that the
cheque   might   have   been   signed   by   the   accused   without   any

amount   being   due   and   payable   by   him   to   the   complainant,
sounder grounds were necessary.  The Magistrate simply took into
consideration the assertions of the accused to the effect that the
complainant had misused the cheque, without there being any
basis for accepting such assertions.   Even if the accused is not
required   to   prove   his   assertions,   he   is   required   to   create   a
reasonable doubt about the truth of the complainant's case, which
is possible only if the assertions are considered as 'plausible'.  The
accused did not dispute his signature on the cheque, and took
various   inconsistent   defences   one   of   which   was   that   'the
transaction was not with the complainant but was with Balvinder
Singh'   and   that   therefore,   'examining   Balvinder   Singh   was
necessary'.  
19 Upon   re­appreciation   of   the   evidence   that   was
adduced   during   the   trial,   I   find   that   the   complainant   had
succeeded in proving the case against the accused.  The accused
had not been able to create a reasonable doubt to the effect that
the cheque might not have been issued in discharge of a legally
enforceable debt or other liability.  This was a case where keeping
in   mind  the   presumption   under   section  139  of  the   Negotiable
Instruments Act, the accused ought to have been convicted.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO.477 of 2011
Bharati Walia 
V
Krishan Mamlal Kapoor and anr
­­­
   CORAM :  ABHAY M. THIPSAY, J.
DATED  :  2nd FEBRUARY, 2016
­­­
Citation:2016 ALLMR(CRI)4750

1 The appellant is the original complainant.   She had
filed   a   complaint   against   the   respondent   no.1   herein   alleging
commission of an offence punishable under Section 138 of the
Negotiable Instruments Act.   The Metropolitan  Magistrate. 38th
Court, Kurla, after holding a trial, acquitted the respondent no.1.
Being aggrieved by the said order of acquittal, the appellant has,
after obtaining special leave of this Court, filed the present Appeal.
2 By an order dated 28th April 2011, this Court (Coram
Smt.Roshan Dalvi, J) stipulated that the Appeal would be taken up
for final hearing at the stage of admission.  The matter had been
appearing on board thereafter on several dates, but none appeared

for the respondent no.1.  The appellant and the respondent no.1
are sister and brother.   It was, therefore, thought proper by this
Court that the parties be given an opportunity to arrive at an
amicable settlement of the dispute. However, no such settlement
has been possible.
3 Today also, when the matter is called out for final
hearing,   none   appeared   for   respondent   no.1.     Mr.M.S.Mohite,
learned counsel for the appellant submitted that the respondent
no.1 has not been remaining present, and that the final hearing of
the   Appeal   shall   not   be   deferred   any   further   just   because   the
respondent no.1 is not present.
4 Under   these   circumstances,   the   Appeal   is   being
decided after hearing the learned counsel for the appellant, and
the learned APP, and after going through the evidence adduced
during the trial, as also the impugned judgment.  
5 For the sake of convenience and clarity, the appellant
shall   be   hereinafter   referred   to   as   'the   complainant'   and
respondent no.1 as 'the accused'.
6 The case of the complainant, as put forth before the
trial Court, may be stated thus :­
That the accused is the brother of the complainant.
The accused was in need of money and therefore, the complainant
gave financial help to him by obtaining loan of Rs.2,00,000/­ from
her friend – one Mr.Balvinder Singh – and giving the amount to

the accused.   The accused executed a promissory note on 14th
November 2005, undertaking to pay the said amount on demand.
Towards the partial repayment of the amount, the accused issued
five cheques of Rs.6,000/­ each, in favour of the complainant, out
of which four were honoured and one was dishonored.  Ultimately,
the accused issued a cheque dated 31st January 2007 in the sum of
Rs.1,76,000/­ towards the payment of the entire amount due and
payable by him to the complainant.  That the said cheque, when
presented, was dishonored with the remark 'account closed'.  Since
the accused did not pay the amount of the said cheque inspite of
notice, the complainant prosecuted the accused as aforesaid, but
the case resulted in acquittal of the accused.
7 The learned counsel for the complainant submitted
that   the   appreciation   of   evidence,   as   done   by   the   learned
Magistrate   was   not   proper.     According   to   him,   the   learned
Magistrate did not give any weight to the presumption contained
in   section   139   of   the   Negotiable   Instruments   Act.     He   also
submitted that the fact that the accused had taken various and
inconsistent   deficiencies   ought   to   have   been   weighed   by   the
learned Magistrate in favour of the complainant.  It is submitted
that the order of acquittal being not in accordance with law needs
to be interfered with and the accused needs to be convicted.
8 In her affidavit in lieu of examination in chief, the
complainant stated the facts consistently with the complaint.  She
categorically stated that the cheque in question has been signed by
the accused.  The cheque was produced before the Court, tendered
in evidence and marked as “Exhibit P5”.  In the cross­examination,

the complainant admitted that the accused is her real brother and
that the accused and complainant were visiting the houses of each
other.   She said in the cross­examination that Balvinder Singh is
her   relative.     A   suggestion   was   given   to   her   in   the   crossexamination
that she had paid some amount to the accused in the
year 2000, which suggestion was denied.   The amount that was
paid by her to the accused, was said to have been paid in cash by
her.  She maintained in the cross­examination that the amount of
Rs.2,00,000/­ had been taken by her from Balvinder Singh.  The
cross­examiner also asked her whether she had executed a receipt
in favour of Balvinder Singh to which she replied in negative.   A
suggestion  was given  to the  complainant that there  was  some
transaction of loan between Balvinder Singh and the accused to
which she replied that she was not aware of any such transaction.
It was also suggested to her  that Balvinder  Singh is a Money
Lender and that he has licence of Money Lending business, which
suggestion, she denied.
9 A suggestion was also given to the complainant that
the   actual   transaction   was   between   Balvinder   Singh   and   the
accused, and that it was necessary for the said Balvinder Singh to
have filed a complaint against the accused.  This suggestion was
also denied by the complainant.
10 The   accused   examined   himself   in   his   defence.
According to him, in the year 2003, he misplaced three cheques
from the cheque book in respect of his bank account in Abhyudaya
Co­operative Bank, Panvel Branch.  According to him, the cheque
which was dishonored is one of the said three cheques.   In his

cross­examination, he claimed that he had informed the bank of
misplacing of the cheque book, and that after taking penalty from
him, the bank had closed this account.  He admitted that he had
not  given   any  “stop   payment”   instructions  with   respect  to   the
misplaced cheques.   He also examined one Mr.Pramod Bhosale,
clerk working in the Abhyudaya Co­operative Bank as a witness in
his defence.  This witness was examined to show that the account
in question was closed in the year 2003.  In the cross­examination,
this witness admitted that the accused had not reported missing of
the cheques which is contrary to the version of the accused.
11 I   have   carefully   gone   through   the   impugned
judgment.
12 The   learned   Magistrate   framed   only   one   point   for
determination which reads as follows :­
“Does the complainant prove that the accused
has committed the offence under Section 138
of Negotiable Instruments Act ?”
The  Magistrate  answered  the  same  in   negative.    Since  such  a
composite point for determination was framed, (which defeats the
very object behind framing points for determination) the precise
reasoning of the Magistrate leading to acquittal is not very clear.
13 In   paragraph   no.8   of   the   impugned   judgment,   the
Magistrate observed the case of the accused to be that he had no
transaction with the complainant, and that, it was the case of the

complainant herself that she had taken amount from Balvinder
Singh and given it to the accused.  The Magistrate observed that
the complainant had not examined Balvinder Singh who had paid
the amount to the accused.   The Magistrate also observed that
according   to   the   complainant,   when   the   loan   amount   was
advanced   to   the   accused,   apart   from   Balvinder   Singh,   the
complainant's son was also present, but she had not examined her
son   as   a   witness.     This   observation   was   made   inspite   of   the
submission made by the learned counsel for the complainant that
the son was not available as he had gone abroad.  The Magistrate
considered   non­examination   of   Balvinder   Singh   as   the   nonexamination
of the most important witness which, in his opinion,
weakened the case of the complainant.  The Magistrate observed
that   the   alleged   transaction   was   between   the   accused   and
Balvinder   Singh,   and   the   complainant   was   acting   only   as
middleman.  It would be appropriate to reproduce the reasoning
of   the   learned   Magistrate   appearing   in   paragraph   no.8   of   the
judgment.
“It appears that the alleged transaction was in
between accused and Balwinder Singh and the
complainant was acting only as a middleman.  In
fact, it appears that there is no any privity of
contract   in   between   the   complainant   and   the
accused.”
14 This approach of the Magistrate does not seem to be
proper or in accordance with law.  It was not necessary to go into
the nature of the transaction or understanding between Balvinder

Singh   and   the   complainant,   inasmuch   as   the   accused   had
admittedly issued a cheque in favour of the complainant and not
in   favour   of   Balvinder   Singh.     The   concept   of   any   privity   of
contract, as introduced by the Magistrate was not called for, as the
question was whether the cheque in question was issued by the
accused in discharge of a legally enforceable debt or other liability.
In ascertaining this, the presumption contained in section 139 of
the Negotiable Instruments Act was required to be kept in mind,
but a perusal of the impugned judgment shows that the same was
not kept in mind or, at any rate, not given due weight by the
learned Magistrate in appreciating the evidence.
15 It is not that the Magistrate came to the conclusion
that there was no transaction at all between the parties; but he
came to the conclusion that the transaction was 'between Balvinder
Singh and the accused'.  Even if that would be so, since the accused
was not required to pay the amount to Balvinder Singh, but to the
complainant, the consideration that the transaction was between
Balvinder  Singh and the  accused was not relevant in  deciding
whether   the   cheque   had   been   issued   in   discharge   of   legally
enforceable debt or other liability.   It was not the case that in
respect   of   the   alleged   transaction   between   him   and   the   said
Balvinder Singh, the accused had paid, or was required to pay
anything to the said Balvinder Singh.
16 The learned counsel for the appellant also pointed out
that the observation made by the Magistrate in paragraph no.9 of
the impugned judgment which reads as “promissory note on the
record   is   also   issued   in   the   name   of   Balvinder   Singh”,   is   not

correct.  It is pointed out that the promissory note has been issued
jointly in the name of the complainant and the said Balvinder
Singh.     On examining the promissory note, copy of which is at
Exhibit­A, I find that this claim made by the learned counsel for
the complainant is correct.  
17 I   find   that   the   accused   has   been   evasive   in   his
evidence.     Though   he   spoke   about   the   cheques   having   been
'misplaced' and claimed that he had not issued any cheque or
promissory note in favour of the complainant, he avoided to say
whether the signature on the cheque and/or on the promissory
note was his or not.  He also avoided to say whether, according to
him, when the cheques were misplaced, they were already signed
by him.  In the cross­examination of the complainant also,  he did
not put forth a case that the signature on the promissory note and
more particularly  on the cheque, was not his.  In fact, he admitted
of having entered into a transaction, but claimed that it was with
Balvinder Singh.   A suggestion was given by the accused in the
cross­examination to the effect that 'it was Balvinder Singh who
was required to file a complaint in respect of the dishonor of the
cheque'.  This indicates and amounts to an admission on the part of
the accused of having entered into some money transaction. 
18 In my opinion, the Magistrate has not given due and
proper weight to the presumption contained in section 139 of the
Negotiable Instruments Act while appreciating the evidence.   The
said presumption is statutory and when there was no denial of the
accused having signed the cheque, to render it probable that the
cheque   might   have   been   signed   by   the   accused   without   any

amount   being   due   and   payable   by   him   to   the   complainant,
sounder grounds were necessary.  The Magistrate simply took into
consideration the assertions of the accused to the effect that the
complainant had misused the cheque, without there being any
basis for accepting such assertions.   Even if the accused is not
required   to   prove   his   assertions,   he   is   required   to   create   a
reasonable doubt about the truth of the complainant's case, which
is possible only if the assertions are considered as 'plausible'.  The
accused did not dispute his signature on the cheque, and took
various   inconsistent   defences   one   of   which   was   that   'the
transaction was not with the complainant but was with Balvinder
Singh'   and   that   therefore,   'examining   Balvinder   Singh   was
necessary'.  
19 Upon   re­appreciation   of   the   evidence   that   was
adduced   during   the   trial,   I   find   that   the   complainant   had
succeeded in proving the case against the accused.  The accused
had not been able to create a reasonable doubt to the effect that
the cheque might not have been issued in discharge of a legally
enforceable debt or other liability.  This was a case where keeping
in   mind  the   presumption   under   section  139  of  the   Negotiable
Instruments Act, the accused ought to have been convicted.
20 I have heard Mr.M.S.Mohite, learned counsel for the
complainant, in respect of the sentence that ought to be imposed
upon the accused.  In my opinion, a sentence of find would meet
the ends of justice.
20 Appeal is allowed.

21 The impugned judgment and order of acquittal is set
aside.  
22 The   respondent   no.1   is   convicted   of   an   offence
punishable under section 138 of the Negotiable Instruments Act,
and is sentenced to pay a fine of Rs.2,50,000/­, in default to suffer
Simple Imprisonment for a period of three months.
23 If the  fine  is realized, an amount of Rs.2,00,000/­
therefrom shall be paid to the appellant as compensation.
24 The  respondent  no.1  shall   pay  the   amount  of   fine
within   a   period   of   two   months   from   today,   failing   which   the
learned   Magistrate   shall   take   appropriate   further   steps   in   the
matter.
25 Appeal is disposed of accordingly.
(ABHAY M.THIPSAY, J)

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