Supreme Court: Production of Account books/cash book is not necessary in prosecution for dishonour of cheque

As rightly
observed by the High Court production of the account books/cash
book may be relevant in the civil court; but may not be so in

the criminal case filed under Section 138 of the N.I.Act. This
is because of the presumption raised in favour of the holder of
the cheque. In view of the concurrent findings recorded by the
Trial Court as well as by the High Court we do not see any
ground warranting interference with the conviction of the
appellant under Section 138 of the N.I.Act.
NON-REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO(S). 132 OF 2020

D. K. CHANDEL Vs  M/S WOCKHARDT LTD

Dated:JANUARY 20, 2020.

R. BANUMATHI, J.:

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Whether accused in cheque bounce case can be acquitted if complainant has failed to produce Account books?

 The trial Court has accepted that the Company admitted the "issuance of subject cheques" and the "signature of the accused on these cheques." Then, it went on to observe that notably the complainant has produced no document to prove that the alleged goods were sold and delivered to the Company. So "the defence taken by the accused persons appears to be natural and probable one." It has finally held that Doshi, in his evidence, gave the details of the alleged transaction. Yet "neither any Register nor any book of accounts is produced on recorded to show the details as such the date of delivery of goods, quality, quantity and rate of the said goods, the mode of delivery of these gods etc."

57. I am afraid the trial Court has remained oblivious of the statutory presumptions under Sections 118 and 139 of the NI Act. The Company has led no direct evidence, nor does, of course, law compel it to. Then, to rebut, it must have exposed the flaws in the complainant's case. Has it done so?

58. To put this issue in perspective, first, let me observe that after admitting that it ordered steel, the Company has never denied its liability on the ground that it had not received the goods. The best, if not the earliest, opportunity it had was when it received the statutory notice. It remained quiet. Second, the Company has not given the cheques transaction-wise. It has a running account. It received the statement of account, checked it, and accepted it. Third, keeping aside everything else, Doshi can latch on to the statutory presumption under Section 139 that the cheques were given for the discharge of a legally enforceable debt. It must have been the Company's turn to rebut it. Wishing away a presumption is no rebuttal; neither is a bald denial.

IN THE HIGH COURT OF BOMBAY

Criminal Appeal No. 657 of 2018

Decided On: 23.07.2019

 Doshi Brothers Vs.  The State of Maharashtra and Ors.

Hon'ble Judges/Coram:

Dama Seshadri Naidu, J.

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Whether Account books can be proved without examining scribe?

Mr.Ghaisas was cross-examined by the respondent-Union on the contents of the Balance- sheets and Auditor's report and the statements made thereunder. This trend of cross-examination, ultimately, resulted in proving those documents. The law in this behalf is well settled. In the case of Ram Janki Devi v. Juggilal Kalamapat MANU/SC/0533/1971 : [1971]3SCR573 , the contention that in absence of scribe, the account books were not proved -was held unacceptable. One of the reasons was that the account books were shown to the witness in the cross-examination and questions were asked on the same. The Supreme Court treated those account books as proved. Similar is the situation in case at hand vis-a-vis balance sheets, profit and loss accounts, and other financial statements are concerned. Each of them were shown and used in the cross-examination by the Union. It is, thus, not open to the respondent-Union to complain lack of proof of those documents. All those documents were rightly read by the Industrial Tribunal in evidence.

IN THE HIGH COURT OF BOMBAY

Appeal Nos. 364 and 441 of 2005 in Writ Petition No. 1097 of 2004

Decided On: 11.06.2007

Hindoostan Spg. and Wvg. Mills Ltd. Vs.  Hindustan Crown Mills Siddhivinayak Kamgar Karmachari Sangharsha Sanghatana 

Hon'ble Judges/Coram:

Dr. S. Radhakrishnan and V.C. Daga, JJ.

Citation: 2007 (4) ALLMR 376

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When book which contains successive entries of items can not be treated as account book?

 In Mukundram (supra) after dealing with the word 'book' (to which we have earlier referred) the Court proceeded to consider what is meant by a 'book of account' under Section 34 and stated as under:

"To account is to reckon, and I an unable to conceive any accounting which does not involve either addition or subtraction or both of these operations of arithmetic. A book which contains successive entries of items may be a good memorandum book; but until those entries are totalled or balanced, or both, as the case may be, there is no reckoning and no account. In the making of totals and striking of balances from time to time lies the chief safeguard under which books of account have been distinguished from other private records as capable of containing substantive evidence on which reliance may be placed."

(emphasis supplied)

28. We have no hesitation in adopting the reasoning adumbrated in the above observations. The underlined portion of the above passage supports the contention of Mr. Altaf Ahmed and rebuts that of Mr. Sibal that Mr 71/91 is only a memorandum, for the entries made therein are totalled and balanced. We are, therefore, of the opinion that MR 71/91 is a 'book of account' as it records monetary transactions duly reckoned.

IN THE SUPREME COURT OF INDIA

Crl. A. Nos. 247-256 of 1998 (arising out of SLP (Crl.) Nos. 1716-1725 of 1997

Decided On: 02.03.1998

Central Bureau of Investigation Vs.V.C. Shukla & Ors.

Hon'ble Judges/Coram:

M.K. Mukherjee, S.P. Kurdukar and K.T. Thomas, JJ.

Citation: AIR 1998 SC 1406

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Whether spiral note books are books of accounts?

'Book' ordinarily means a collection of sheets of paper or other material, blank, written, or printed, fastened or bound together so as to form a material whole. Loose sheets or scraps of paper cannot be termed as 'book' for they can be easily detached and replaced. In dealing with the work 'book' appearing in Section 34 in Mukundram vs. Dayaram [AIR 1914 Nagpur 44], a decision on which both sides have placed reliance, the Court observed:-

" In its ordinary sense it signifies a collection of sheets of paper bound together in a manner which cannot be disturbed or altered except by tearing apart. The binding is of a kind which is not intended to the moveable in the sense of being undone and put together again. A collection of papers in a portfolio, or clip, or strung together on a piece of twine which is intended to be untied at will, would not, in ordinary English, be called a book............................... ................................I think the term "book" in S. 34aforesaid may properly' be taken to signify, ordinarily, a collection of sheets of paper bound together with the intention that such binding shall be permanent and the papers used collectively in one volume. It is easier however to say what is not a book for the purposes of S. 34, and I have no hesitation in holding that unbound sheets of paper in whatever quantity, though filled up with one continuous account, are not a book of account within the purview of S. 34."

We must observe that the aforesaid approach is in accord with good reasoning and we are in full agreement with it. Applying the above tests it must be held that the two spiral note books (MR 68/91 and 71/91) and the two spiral pads (MR 69/91 and MR 70/91) are "books" within the meaning of Section 34, but not the loose sheets of papers contained in the two files (MR 72/91 and MR 73/91).

Supreme Court of India

Central Bureau Of Investigation vs V.C. Shukla & Ors on 2 March, 1998

Bench: M.K. Mukherjee, S.P. Kurdukar, K.T. Thomas

Citation:AIR 1998 SC1406

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When copies of original account books are not admissible in evidence?

In order to apply the provisions' of Section 34 of the Act it would be necessary to establish that the account books were regularly kept in the ordinary course of business. The entries made in such account books would then become relevant and might be considered along with the other evidence to charge any person with liability but these entries alone would not be sufficient to fasten any liability on any person. The entries in the account books are, therefore, merely corroborative and primary evidence is always needed to prove the trans-action mentioned therein. It appears that the entries in the account books were not proved according to law. I was taken through the entire statement of Jai NarainJ He has nowhere referred to the particular entries in his account books in regard to the transaction in question. He has satisfied himself by stating that the account books were maintained by him in regular course of business but that by itself was not sufficient for bringing the case within the scope and ambit of Section 34 of the Evidence Act. Section 34 makes the particular entries in the account books relevant. The entry relevant to the payment of Rs. 500/- to the son of the plaintiff should, therefore, have been proved without which it was not pos-sible to place reliance on the account books. There is one more difficulty for the defendant in this respect. The account books obviously were not in current use. He should, therefore, have filed the original account books and then proved the rele-vant entries according to law. In the instant case it was stated before me that the original account books were produced by the defendant before the Trial Court which means that the defendant did have in his possession the original account books on the date of evidence. The defendant should, therefore, have placed before the Court the primary and not the secondary evidence, the primary evidence being the original account books. The matter would have been different had the entry relied upon been in an account book which was in current use. In the present case the primary evidence having not been filed the secondary evidence, namely the copies thereof, were not admissible in evidence. Moreover, the copies were also not proved by any person. Neither the scribe of the relevant entry of Rs. 500/- was examined nor Jai Narain himself stated that he had either himself scribed the entry or had seen the Munim scribing the same. The Courts below were, therefore, justified in not placing reliance on Exs. A-1, A-7 to A-14.

Allahabad High Court

Jai Narain Dass And Anr. vs Smt. Zubeda Khatoon on 3 July, 1972

Equivalent citations: AIR 1972 All 494

Bench: T Misra

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Whether extract of account is admissible in evidence if original account books are not produced?

It will be noticed that sanctity is attached in the law of evidence to books of account if the books are indeed "account books i.e. in original and if they show, on their face, that they are kept in the "regular course of business". Such sanctity, in our opinion, cannot attach to private extracts of alleged account books where the original accounts are not filed into Court. This is because, from the extracts, it cannot be discovered whether the accounts are kept in the regular course of business or if there are any interpolations or whether the interpolations are in a different ink or whether the accounts are in the form of a book with continuous page-numbering. Hence, if the original books have not been produced, it is not possible to know whether the entries relating to payment of rent are entries made in the regular course of business.

It is only in the case of Bankers' Books Evidence Act, 1891 that certified copies are allowed or the case must come under Section 65(f) or (g) of the Evidence Act. Private extracts of accounts in other cases can only be secondary evidence and unless a proper foundation is laid for adducing such secondary evidence under Section 65 or other provisions of the Evidence Act, the privately handwritten copies of alleged account books cannot by themselves be treated as secondary evidence.

In the recent judgment of this Court in Central Bureau of Investigation Vs. V.C. Shukla ( 1998(3) SCC 410), it has been laid down that for purposes of Section 34, 'Book' ordinarily means a collection of sheets of paper or other material, blank, written or printed, fastened or bound together so as to form a material whole. Loose sheets of paper or scraps of paper cannot be termed as 'book' for they can be easily detached and replaced. It has also been held that the rationale behind admissibility of parties' books of account as evidence is that the regularity of habit, the difficulty of falsification and the fair certainty of ultimate detection give them in a sufficient degree, a probability of trustworthiness." When that is the legal position, extracts of alleged account books, in our view, were wrongly treated as admissible by the courts below though the original books were not produced for comparison nor their non-production was explained nor the person who had prepared the extracts was examined. Therefore, the private extracts of alleged account books like Exs.D2 to D5 are not admissible. The principal evidence relating to the alleged payment of rent disappears and the foundation for the alternative plea of tenancy crumbles. 

Supreme Court of India

Ishwar Dass Jain (Dead) Thr. Lrs vs Sohan Lal (Dead)By Lrs on 29 November, 1999

Bench: M.Jagannadha Rao, M.B.Shah

Citation:AIR 2000 SC426   

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Whether private extracts of account books are admissible in evidence?

Unfortunately, in a latter passage, the trial Court referred to these extracts as 'account books' and applied Section 34 of the Evidence Act. The Court forgot that these were extracts of alleged accounts.

Now under Section 34 of the Evidence Act, entries in "account books" regularly kept in the course of business are admissible though they by themselves cannot create any liability. Section 34reads as follows:

"Section 34: Entries in books of account when relevant - Entries in books of account, regularly kept in the course of business, are relevant whenever they refer to a matter into which the Court has to inquire, but such statements shall not alone be sufficient evidence to charge any person with liability".

It will be noticed that sanctity is attached in the law of evidence to books of account if the books are indeed "account books i.e. in original and if they show, on their face, that they are kept in the "regular course of business". Such sanctity, in our opinion, cannot attach to private extracts of alleged account books where the original accounts are not filed into Court. This is because, from the extracts, it cannot be discovered whether the accounts are kept in the regular course of business or if there are any interpolations or whether the interpolations are in a different ink or whether the accounts are in the form of a book with continuous page-numbering. Hence, if the original books have not been produced, it is not possible to know whether the entries relating to payment of rent are entries made in the regular course of business.

It is only in the case of Bankers' Books Evidence Act, 1891 that certified copies are allowed or the case must come under Section 65(f) or (g) of the Evidence Act. Private extracts of accounts in other cases can only be secondary evidence and unless a proper foundation is laid for adducing such secondary evidence under Section 65 or other provisions of the Evidence Act, the privately handwritten copies of alleged account books cannot by themselves be treated as secondary evidence.

In the recent judgment of this Court in Central Bureau of Investigation Vs. V.C. Shukla ( 1998(3) SCC 410), it has been laid down that for purposes of Section 34, 'Book' ordinarily means a collection of sheets of paper or other material, blank, written or printed, fastened or bound together so as to form a material whole. Loose sheets of paper or scraps of paper cannot be termed as 'book' for they can be easily detached and replaced. It has also been held that the rationale behind admissibility of parties' books of account as evidence is that the regularity of habit, the difficulty of falsification and the fair certainty of ultimate detection give them in a sufficient degree, a probability of trustworthiness." When that is the legal position, extracts of alleged account books, in our view, were wrongly treated as admissible by the courts below though the original books were not produced for comparison nor their non-production was explained nor the person who had prepared the extracts was examined. Therefore, the private extracts of alleged account books like Exs.D2 to D5 are not admissible. 

Supreme Court of India

Ishwar Dass Jain (Dead) Thr. Lrs vs Sohan Lal (Dead)By Lrs on 29 November, 1999

Bench: M.Jagannadha Rao, M.B.Shah

Citation:AIR 2000 SC426

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