Criminal Appeal No. 439 of 2005

17th August, 2012

Petitioner Counsel: Sri P. NAGESHWARA RAO
Respondent Counsel: Sri V. RAMACHANDER GOUD

Cases Cited:
A.Bhoosanrao Vs. Purushothamdas Pantani and another, 1997(1) ALD (Crl.) 794 (AP) [Para 9]
G.B.Lingam Vs. Vitta Murali Krishna Murthy, 1998(1) ALD (Crl.) 940 (AP) [Para 9]
P.Venugopal Vs. Madan P.Sarathi, 2009 ALL MR (Cri) 915 (S.C.)=(2009) 1 SCC 492 [Para 10]
K.Bhaskaran Vs. Sankaran Vaidhyan Balan, 1999(4) ALL MR 452 (S.C.) =(1999) 7 SCC 510 [Para 13]
K.N.Beena Vs. Muniyappan, 2002(1) ALL MR 277 (S.C.) =(2001) 8 SCC 458 [Para 14]
M.S.Narayana Menon Vs. State of Kerala, 2006(5) ALL MR 33 (S.C.)=(2006) 6 SCC 39 [Para 15]
Kumar Exports Vs. Sharma Carpets, 2009 ALL MR (Cri) 239 (S.C.)=(2009) 2 SCC 513 [Para 16]
Rangappa Vs. Sri Mohan, 2010 ALL SCR 1349=(2010) 11 SCC 441 [Para 17]
K.Bhaskaran Vs. Sankaran Vaidhyan Balan, 1999 ALL MR (Cri) 1845 (S.C.)=(1999) 7 SCC 510 [Para 13]

JUDGMENT

JUDGMENT :- This appeal is directed against the acquittal of the accused in C.C.No.274 of 1999 by the I Additional Judicial I Class Magistrate, Warangal on 10.09.2004.

2. The appellant herein is the complainant and he has filed the complaint for the offence under Section 138 of the Negotiable Instruments Act (for short "the N.I. Act") against the respondent No.1 herein.

3. According to the complainant, he retired as Superintendent of Central Excise and after retirement he received Rs.3,00,000/- towards retirement benefits. The accused was working as teacher in Government Aided Andhra Balika High School and she is a colleague of the complainant's wife. The accused approached the complainant through his wife and obtained a hand loan of Rs.1,90,000/- for settlement of the debts of the son of the accused, which hncurred in the Frontier Computers Software Technology with a promise to repay the same within six months but in spite of several demands, the accused began dodging and it was very difficult to locate the accused at her residence and the complainant and his relative P.Dharma Reddy could locate her and on 26.10.1998 the accused in the presence of said Dharma Reddy gave a cheque bearing No.384351 drawn on State Bank of Hyderabad, Warangal Main Branch. The said cheque was deposited in the complainant's account but the same was returned on 02.11.1998 with an endorsement of insufficient funds and party reported to stop operations in the account. Thereafter, complainant contacted the accused on 19.11.1998 and the accused promised to instruct the bank and she will make efforts to deposit sufficient funds to clear the said cheque. So the complainant re-deposited the said cheque on 20.11.1998, again the said cheque was returned with the same endorsement. The accused with an intention to defraud complainant, was scheming to get her house bearing No.16-10-1338, situated at Shivanagar, Warangal conveyed in the name of her unmarried daughter and subsequently the complainant came to know that a lawyer's notice was appeared in Vaartha newspaper on 12.10.1998 with regard to transfer of said property in the name of her daughter. Immediately on 25.11.1998 a lawyer notice was sent to an advocate Chamanti Prabhakar Rao, which was served on him on 25.11.1998. Along with the said notice, a copy of the lawyer's notice dt.25.11.1998 addressed to the accused was sent to the said advocate with a request to inform the same to the accused. Thereafter the accused got issued a reply notice on 09.12.1998 to the counsel of the complainant. Hence, the accused has committed the offence punishable under Section 138 of the N.I. Act.

4. The accused denied the allegations when she was examined under Section 251 of Cr.P.C. During the course of trial, the complainant himself examined as PW.1 and examined the Deputy Manager of SBH, Warangal Main Branch as PW.2 and one P.Dharma Reddy as PW.3 and got marked Exs.P-1 to P-7 on his behalf. No oral evidence was adduced on behalf of the accused. During the course of examination under Section 313 of Cr.P.C., the accused marked Exs.D-1 and D-2 on his behalf.

5. The Magistrate by taking into consideration said oral and documentary evidence and by relying upon various decisions of the Apex Court and this Court, held that the complainant failed to establish that the accused issued Ex.P-1 cheque towards legally enforceable debt or liability due to the complainant and thereby found the accused not guilty and acquitted her.

6. Aggrieved by the said acquittal, the complainant therein has filed the present appeal.

7. The counsel appearing for the appellant has pleaded that the accused has not disputed her signature on the said cheque Ex.P-1 and when once the cheque was issued the presumption under Section 139 of the N.I. Act is available to the complainant and the burden is on the accused to disprove that the said cheque was not issued in discharge of any liability or legally enforceable debt and as the complainant has not examined herself nor produced any evidence to rebut the same the trial Court committed an error in dismissing the complaint and acquitting the accused.

8. The counsel appearing for the respondent No.1, on the other hand, pleaded that the presumption available under Section 139 of the N.I. Act is a rebuttable presumption and it can be established by the evidence available on record and there is no need to examine the accused to establish the defence and the trial Court has rightly come to the conclusion that initial burden is on the accused to prove that the said cheque was issued in discharge of legally enforceable debt and the trial Court has rightly dismissed the complaint and acquitted the accused.

9. The trial Court by relying upon the decisions of this Court in A.Bhoosanrao v. Purushothamdas Pantani and another [1997(1) ALD (Crl.) 794 (AP)] and G.B.Lingam v. Vitta Murali Krishna Murthy [1998(1) ALD (Crl.) 940 (AP)], held that the initial burden is on the accused to prove the said cheque, which was issued in discharge of legally enforceable debt and then the burden shifts on the accused to disprove the same and as the complainant failed to discharge the initial burden, come to the conclusion that the complainant has failed to prove that the said cheque was issued for the legally enforceable debt.

10. In P.Venugopal v. Madan P.Sarathi (2009) 1 SCC 492 : [2009 ALL MR (Cri) 915 (S.C.)], the Apex Court held that "the facts and circumstances of a debt or other liability has to be proved in the first instance by the complainant and in discharge of the said debt or liability the accused issued the cheuqes and the burden shifts on the accused and in the said case as the appellant could not discharge the burden, the appeal was dismissed."

11. In the present case, the complainant examined himself as PW.1 and stated that the accused borrowed the amount of Rs.1,90,000/- from him, on demand she has issued the cheque Ex.P-1 for discharging of the said debt. PW.3 also stated that the accused issued the cheque in favour of the complainant. From the evidence of PW.2, it is evident that the said cheque was dishonoured when presented by the complainant for collection. Thus, prima facie the complainant could establish that the said cheque was issued in discharge of legally enforceable debt and the presumption under Section 139 of N.I. Act is available to the complainant. Now the burden shifts on the accused to disprove the same.

12. The complainant's counsel contends that the accused could rebut the said presumption either by examining herself or producing any evidence on her behalf and thus, the lower Court erred in acquitting the accused.

13. In K.Bhaskaran v. Sankaran Vaidhyan Balan, (1999) 7 SCC 510 : [1999(4) ALL MR 452 (S.C.) : 1999 ALL MR (Cri) 1845 (S.C.)] the Apex Court held that "as the signature in the cheque is admitted to be that of the accused, the presumption envisaged in Section 118 of the Act can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears. Section 139 of the Act enjoins on the Court to presume that the holder of the cheque received it for the discharge of any debt or liability. The burden was on the accused to rebut the aforesaid presumption."

14. In K.N.Beena v. Muniyappan, (2001) 8 SCC 458 : [2002(1) ALL MR 277 (S.C.)] the Apex Court held that "in view of the provisions contained in Sections 118 and 139, the Court has to presume that the cheque had been issued for discharging a debt or liability. However, the said presumption could be rebutted by the accused by proving the contrary. Mere denial or rebuttal by accused in the reply to the legal notice sent by the complainant is not enough. The accused had to prove by cogent evidence that there was no debt or liability."

15. In M.S.Narayana Menon v. State of Kerala, (2006) 6 SCC 39 : [2006(5) ALL MR 33 (S.C.)] the Apex Court held that "the initial burden of proof is on accused to rebut the said presumptions by raising a probable defence. If he discharges the said burden, the onus thereafter shifts on to the complainant to prove his case. Whether the initial burden has been discharged by the accused is a question of fact. The accused need not disprove the prosecution case in its entirety. He can discharge its burden on the basis of preponderance of probabilities through direct or circumstantial evidence. For the said purpose, he can also rely upon evidence adduced by the complainant."

16. In Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513 : [2009 ALL MR (Cri) 239 (S.C.)] the Apex Court held that "the accused in a trial under Section 138 of the Act has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case the non-existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial."

17. In Rangappa v. Sri Mohan, (2010) 11 SCC 441 : [2010 ALL SCR 1349] the Apex Court held that "when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of preponderance of probabilities. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. The accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own."

18. In view of the above said decisions, the presumption, which is available under Section 139 of the N.I. Act can be rebutted by producing necessary evidence or he can also rely upon the evidence produced by the complainant and the material available on record without examining himself. The burden can be discharged by the accused on the basis of preponderance of possibilities.

19. In the present case, the accused has not disputed her signature on Ex.P-1, the cheque. But according to her, the blank cheque was issued in favour of Ushodaya Finance Company in which complainant's son is a partner and the complainant misused the same for filing the complaint and she further pleaded that she has not borrowed any amount from the complainant and he has no capacity to lend the amount.

20. PW.1 in the beginning of the chief examination has stated that the accused borrowed the amount on 26.10.1998 and subsequently has stated six months prior to 26.10.1998 and in cross-examination he has deposed that he does not remember as to why he agreed to lend money and actually when he lent the money to the accused and his evidence is inconsistent with regard to date on which the amount was lent to the accused. The complainant as PW.1 has stated that he retired from service in the month of April, 1995 and according to him after one year he has received the retirement benefits and from the date of his retirement till he lent the money to the accused, he kept the money with him in the hands. According to him the amount was lent to the accused in the month of April or October, 1998 and there is a gap of nearly two years in lending the amount to the accused and according to the complainant he kept the said amount in his house for all these two years. The trial Court has rightly disbelieved said version of keeping such a huge amount without investing the same in his house. PW.1 further deposed that the accused has executed a bond on her own hand-writing after receiving the said amount of Rs.1,90,000/- and in the cross-examination he has deposed that the said bond was returned by the complainant one week or ten days prior to the issuing Ex.P-1 cheque. The trial Court has rightly disbelieved that version as no prudent man would return the bond executed by the borrower without obtaining the cheque in lieu of said bond and more particularly when there is a dispute with regard to the property between the accused and her daughter as per paper publication made in Vaartha newspaper.According to PW.3 P.Dharma Reddy, he has gone to the house of the accused along with the complainant and in his presence the accused has issued the said cheque to the complainant but he could not state about the location of the house or identity of the house of the accused. The accused has got marked Ex.D-2 a letter written by her to the bank requesting stop payment of the disputed cheque stating that she has issued two blank cheques bearing No.384351 (marked as Ex.P-1) and No.132958 to Ushodaya Finance Company and she had no liability to the said firm and in the event of presentation of the said cheque for encashment, the payment may be stopped. Admittedly, the said letter was addressed to the State Bank of Hyderabad on 08.10.1998 and the same was acknowledged by the said bank. The said letter was addressed by the accused to the said bank much prior to the date of issuing the cheque Ex.P-1. PW.1 admitted that he himself scribed the contents of Ex.P-1 cheque. Admittedly, the accused was working as a teacher as on that date and if really she has issued a cheque for Rs.1,90,000/- she would have written the blanks in the said cheque with her own hand writing. Thus, the complainant has scribed the same in his hand-writing supports the contention of the accused that she issued two blank cheques in favour of Ushodaya Finance Company. The above circumstances create a doubt with regard to lending of the money by PW.1 to the accused and the accused issued the cheque in favour of the complainant. Thus, the accused by relying upon the evidence produced by the complainant could able to rebut the presumption available under Section 139 of the N.I. Act by preponderance of possibilities. Thus, the trial Court has rightly held that the complainant has failed to establish the offence under Section 138 of the N.I. Act and rightly dismissed the complaint basing on the material available on record.

21. In the result, the Criminal Appeal dismissed.

Appeal dismissed.