Thursday, 28 February 2019

Whether accused in cheque dishonour case can prove his defence by replying to notice and by effective cross examination?

The entries in the pass-book Exh. 30 show that an amount of Rs. 1,00,000/- was indeed transferred on 28.02.2013 to a particular account number. Another entry dated 02.09.2013 shows that it was paid to self but a note was appended in the handwriting of the appellant to the effect that it was given to the respondent. At one place, the note states that it was given to the respondent for Graceland Realities and at another place it just mentions the name of the respondent. The entry pertaining to the date 28.02.2013 shows transfer of Rs. 1,00,000/- to a particular account number but there is nothing placed on record on behalf of the appellant to show that the said account number belonged to the respondent. Thus, this entry falls short of proving that such an amount was indeed transferred to the respondent on the said date. As regards entry pertaining to Rs. 15,000/- dated 02.09.2013, the hand written note of the appellant creates a doubt that the said amount was given to the respondent for Graceland Realities. This is significant in the backdrop that the appellant did have transactions pertaining to immovable property with the said Graceland Realities of which the respondent was admittedly an employee.

13. As regards payment of Rs. 51,000/- by cash on 05.09.2012, there is no evidence on record. In respect of claim of the appellant that she advanced Rs. 35,000/- on 10.11.2012 by cheque in favour of the respondent, there is no evidence on record because the pass-book at Exh. 30 pertains to entries starting from the date 28.02.2013. Thus, the claims made by the appellant in her oral evidence pertaining to advancing of aforesaid amounts to the respondent are not supported by documentary evidence on record. Even otherwise, the said amounts stated in the oral evidence of the appellant, add up to Rs. 2,01,000/- while the cheques in question, purportedly issued to repay the loan are only for an amount of Rs. 2,00,000/-. The difference in said two amounts is not satisfactorily accounted for by the appellant. In this situation, the proof of foundational facts pertaining to advancing of loan to the respondent have not been satisfactorily proved by the appellant. The presumptions under the said provisions of the Act would stand triggered only if such foundational facts were proved.

14. Even otherwise, such presumptions are rebuttable on the touchstone of preponderance of probabilities. The defence has to only show that its stand is probable and that would lead to rebuttal of presumptions. In the present case, the reply notice dated 01.04.2014 issued by the respondent assumes significance, because not only did the respondent deny the claims made by the appellant in her statutory notice, but defence of the respondent was clearly indicated in the reply notice. Despite the respondent calling upon the appellant not to deposit the remaining two cheques, the appellant went ahead to deposit the same. In these circumstances, the learned counsel for the appellant placed reliance on the receipt at Exh. 31 to claim that if nothing else, the said document was a clear indicator that the respondent had indeed received amounts towards loans and the cheques were issued for repayment thereof. A perusal of the said receipt at Exh. 31 shows that a reference is made to the loan and details of three post dated cheques are given.

15. But, a perusal of the cross-examination of the appellant in the witness box shows that a specific objection was raised on behalf of the respondent in respect of the receipt at Exh. 31 and signature on the same was denied. In the face of such denial by the respondent, it was incumbent upon the appellant to have proved signature of the respondent on the said receipt. No effort was taken by the appellant to do so. It was claimed that when signatures on the cheques were not denied and an assertion had been made by the appellant that the receipt at Exh. 31 bore the signature of the respondent, no further proof was required. But, the said stand taken on behalf of the appellant is unsustainable because it was she who had claimed that the receipt at Exh. 31 was indeed signed by the respondent, which was denied by him. Therefore, it was for the appellant to have taken appropriate steps to prove that the receipt was indeed signed and executed by the respondent. As no such steps were taken, the receipt at Exh. 31 could not have become a basis for the appellant to claim that the respondent had admitted of having taken loan from the appellant.

16. The trial Court in the impugned judgments and orders has taken into consideration the entire oral and documentary evidence on record. It was found that there were transactions between the parties pertaining to immovable property. It was found that the presumptions in the present case were satisfactorily rebutted by the respondent by responding to the statutory notice and also effectively cross-examining the appellant. It is settled law that an accused in such cases can rebut the presumption not only by placing on record positive evidence and examining witnesses, but also by discrediting the complainant by effective cross-examination.

IN THE HIGH COURT OF BOMBAY (NAGPUR BENCH)

Criminal Appeal Nos. 179, 180 and 182/2018

Decided On: 09.08.2018

Mercy Vs. Cyril Enoch Arland

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

Citation: 2019(1) MHLJ 799


1. These three appeals arise out of three judgments and orders dated 23.08.2017 passed by the Court of Judicial Magistrate First Class (Special Court for N.I. Act), Nagpur (trial Court) in three complaints filed by the appellant herein in respect of dishonour of three cheques issued by the respondent (original accused).

2. Since the complaints were considered by the trial Court on the basis of common evidence adduced in respect thereof and there are three similar impugned judgments and orders only because there were three cheques of different amounts involved, these appeals are being disposed of by this common judgment.

3. The case of the appellant herein, in brief, was that she was a retired house wife, who had returned from England and settled down in Nagpur. She was interested in investing money in properties and, therefore, she came in touch with the respondent through a property agent. It was claimed that the respondent was an employee of Graceland Realities Ltd. It was claimed that investment was made in three properties through the respondent and that in the process the appellant developed good relations with the respondent and his family. On this basis, when the respondent expressed that he was facing financial hardship in the year 2012 and he sought financial help from the appellant for the education of his children, on different dates in the years 2012 and 2013, the appellant claimed to have advanced loans to the respondent, totaling Rs. 2,00,000/-.

4. It was claimed that towards repayment of the said amount of loan, the respondent had issued three cheques bearing the dates 26.02.2014 (Rs. 50,000/-), 26.03.2014 (Rs. 50,000/-) and 25.05.2014 (Rs. 1,00,000/-) drawn on the IDBI Bank, Trimurti Nagar, Nagpur.

5. When the first of these cheques was deposited, it was dishonoured, pursuant to which the appellant issued notice to the respondent demanding payment of the amount stated in the said cheque. In response to the said notice, the respondent sent a reply notice dated 01.04.2014 stating that in the month of December, 2013, the appellant had stated that she would deposit an amount of Rs. 2,00,000/- in the account of the respondent against which she requested for three post dated cheques totalling Rs. 2,00,000/-. It was stated that due to good relations and trust between the parties, without seeking any further clarification, the respondent issued the aforesaid three cheques in favour of the appellant. It was indicated in the reply notice that it appeared that the appellant wanted to convert her black money into white and that, therefore, such a modus operandi was adopted by her. In this reply notice, the respondent specifically asked the appellant not to deposit the remaining two cheques that had been issued by the respondent.

6. Despite the said reply notice wherein the appellant had been called upon not to deposit remaining two cheques, the appellant went ahead to deposit the cheques, which were dishonoured. As a consequence, the appellant filed three complaints before the trial Court alleging that the respondent had committed offence punishable under Section 138 of the Negotiable Instruments Act, 1881. The appellant placed on record the aforesaid disputed cheques, as also a receipt dated 26.12.2013 (Exh. 31), wherein the respondent had purportedly acknowledged the said loan and it was stated that post dated cheques were being issued for repayment of the same. The appellant also placed on record pass-book of her account of the State Bank of India, from which she had allegedly advanced loan amounts to the respondents. The appellant entered the witness box in support of her complaints while the respondent did not produce any witness in support of his defence.

7. By the impugned judgment and order the trial Court found that a perusal of the oral and documentary evidence on record indicated that although presumptions under Section 118 and 139 of the aforesaid Act arose in favour of the appellant, the same stood rebutted as the respondent had succeeded in raising a probable defence. On this basis, it was held that since the cheques in question could not be said to have been issued for discharge of legal debt or liability, the complaints filed by the appellants were dismissed and the respondent stood acquitted.

8. Mr. S.M. Patrikar, learned counsel appearing on behalf of the appellant, submitted that the trial Court committed an error in holding that the presumption operating in favour of the appellant had been rebutted by the respondent. It was submitted that when the respondent had not denied his signature on the disputed cheques and there was sufficient oral and documentary evidence on record to demonstrate that the appellant had indeed advanced the said loan to the respondent and particularly when the receipt at Exh. 31 was on record, the trial Court could not have acquitted the respondent. It was submitted that there was sufficient material on record to show that the cheques were issued for discharge of legal debt and that the respondent had not rebutted the presumption even on the touchstone of preponderance of probabilities. On this basis, it was claimed that the appeals deserved to be allowed.

9. On the other hand, Mr. P.A. Teni, learned counsel appearing on behalf of the respondent, submitted that a perusal of the cross-examination of the appellant demonstrated that she had failed to prove even the foundational fact of having advanced loan amount to the respondent. It was pointed out that when the reply notice was issued by the respondent specifically giving his version of why the cheques were issued, the appellant ought not to have deposited the remaining two cheques. It was submitted that the respondent had denied his signature on the purported receipt at Exh. 31 and, therefore, it was for the appellant to prove that the said receipt was indeed signed by the respondent. The learned counsel also relied upon entries in the pass-book Exh. 30 produced on record on behalf of the appellant to show that the case of the appellant having advanced loan to the respondent was not made out. It was submitted that the material on record clearly proved the defence in rebuttal of the respondent on the touchstone of preponderance of probabilities and that when the trial Court had taken a possible view of the matter, no interference was warranted in the present appeals.

10. Heard counsel for the parties. The appellant has essentially relied upon the pass-book at Exh. 30, the receipt at Exh. 31 and the disputed cheques to claim that there was sufficient material to show that the cheques were issued by the respondent for discharge of legal debt. In the face of the fact that the respondent did not deny either signatures on the cheques or issuance of the same, presumptions under Section 118 and 139 of the said Act did operate in favour of the appellant. But, in order that such presumption operated, it was also necessary to examine whether the appellant had proved the foundational facts pertaining to her case of having advanced loan of Rs. 2,00,000/- to the respondent on different dates in the years 2012 and 2013. The contention raised on behalf of the appellant that in the absence of denial of signatures on the said cheques, the presumption operated in full force in favour of the appellant, needs to be examined on the basis of oral and documentary evidence on record pertaining to the fact of such loan having been advanced by the appellant.

11. In order to appreciate the entries in the pass-book at Exh. 30, the same will have to be read with the evidence of the appellant and statements made by her in cross-examination. The appellant had stated in cross-examination that she advanced amounts to the respondent in the following manner:-

Rs. 1,00,000/- by cheque on 28.02.2013

Rs. 0,15,000/- by cheque on 02.09.2013

Rs. 0,51,000/- by cash on 05.09.2012

Rs. 0,35,000/- by cheque on 10.11.2012.

12. The entries in the pass-book Exh. 30 show that an amount of Rs. 1,00,000/- was indeed transferred on 28.02.2013 to a particular account number. Another entry dated 02.09.2013 shows that it was paid to self but a note was appended in the handwriting of the appellant to the effect that it was given to the respondent. At one place, the note states that it was given to the respondent for Graceland Realities and at another place it just mentions the name of the respondent. The entry pertaining to the date 28.02.2013 shows transfer of Rs. 1,00,000/- to a particular account number but there is nothing placed on record on behalf of the appellant to show that the said account number belonged to the respondent. Thus, this entry falls short of proving that such an amount was indeed transferred to the respondent on the said date. As regards entry pertaining to Rs. 15,000/- dated 02.09.2013, the hand written note of the appellant creates a doubt that the said amount was given to the respondent for Graceland Realities. This is significant in the backdrop that the appellant did have transactions pertaining to immovable property with the said Graceland Realities of which the respondent was admittedly an employee.

13. As regards payment of Rs. 51,000/- by cash on 05.09.2012, there is no evidence on record. In respect of claim of the appellant that she advanced Rs. 35,000/- on 10.11.2012 by cheque in favour of the respondent, there is no evidence on record because the pass-book at Exh. 30 pertains to entries starting from the date 28.02.2013. Thus, the claims made by the appellant in her oral evidence pertaining to advancing of aforesaid amounts to the respondent are not supported by documentary evidence on record. Even otherwise, the said amounts stated in the oral evidence of the appellant, add up to Rs. 2,01,000/- while the cheques in question, purportedly issued to repay the loan are only for an amount of Rs. 2,00,000/-. The difference in said two amounts is not satisfactorily accounted for by the appellant. In this situation, the proof of foundational facts pertaining to advancing of loan to the respondent have not been satisfactorily proved by the appellant. The presumptions under the said provisions of the Act would stand triggered only if such foundational facts were proved.

14. Even otherwise, such presumptions are rebuttable on the touchstone of preponderance of probabilities. The defence has to only show that its stand is probable and that would lead to rebuttal of presumptions. In the present case, the reply notice dated 01.04.2014 issued by the respondent assumes significance, because not only did the respondent deny the claims made by the appellant in her statutory notice, but defence of the respondent was clearly indicated in the reply notice. Despite the respondent calling upon the appellant not to deposit the remaining two cheques, the appellant went ahead to deposit the same. In these circumstances, the learned counsel for the appellant placed reliance on the receipt at Exh. 31 to claim that if nothing else, the said document was a clear indicator that the respondent had indeed received amounts towards loans and the cheques were issued for repayment thereof. A perusal of the said receipt at Exh. 31 shows that a reference is made to the loan and details of three post dated cheques are given.

15. But, a perusal of the cross-examination of the appellant in the witness box shows that a specific objection was raised on behalf of the respondent in respect of the receipt at Exh. 31 and signature on the same was denied. In the face of such denial by the respondent, it was incumbent upon the appellant to have proved signature of the respondent on the said receipt. No effort was taken by the appellant to do so. It was claimed that when signatures on the cheques were not denied and an assertion had been made by the appellant that the receipt at Exh. 31 bore the signature of the respondent, no further proof was required. But, the said stand taken on behalf of the appellant is unsustainable because it was she who had claimed that the receipt at Exh. 31 was indeed signed by the respondent, which was denied by him. Therefore, it was for the appellant to have taken appropriate steps to prove that the receipt was indeed signed and executed by the respondent. As no such steps were taken, the receipt at Exh. 31 could not have become a basis for the appellant to claim that the respondent had admitted of having taken loan from the appellant.

16. The trial Court in the impugned judgments and orders has taken into consideration the entire oral and documentary evidence on record. It was found that there were transactions between the parties pertaining to immovable property. It was found that the presumptions in the present case were satisfactorily rebutted by the respondent by responding to the statutory notice and also effectively cross-examining the appellant. It is settled law that an accused in such cases can rebut the presumption not only by placing on record positive evidence and examining witnesses, but also by discrediting the complainant by effective cross-examination.

17. In the present case, the admissions given by the appellant in cross-examination read with the documents produced by the appellant herself, show that the entire story put forth on behalf of the appellant was not proved beyond reasonable doubt and that the respondent had successfully proved his defence on the touchstone of preponderance of probabilities.

18. Although the learned counsel for the respondent has placed reliance on various judgments, a reference to the same is not necessary because the present appeals have been decided on the facts, evidence and material produced by the appellant in support of her case.

19. In the light of the above, it is found that the view taken by the trial Court in the present three cases, is a possible view and when two views are possible, it is trite in criminal jurisprudence that the one that accrues in favour of the accused is to be adopted. Accordingly these appeals are dismissed and the impugned judgments and orders passed by the trial Court are confirmed.




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