CRIMINAL APPEAL NO. 1316 OF 2003

14th February 2020

Petitioner Counsel: Ms. Kainaz P. Irani
Respondent Counsel: Ms. Pallavi Dabholkar
Act Name: Negotiable Instruments Act, 1881 Code of Criminal Procedure, 1973

Section :
Section 118(a) Negotiable Instruments Act, 1881 Section 138 Negotiable Instruments Act, 1881 Section 139 Negotiable Instruments Act, 1881 Section 378 Code of Criminal Procedure, 1973 Section 386 Code of Criminal Procedure, 1973

Cases Cited :
Para 9: Ghurey Lal Vs. State of U.P. (2008) 10 SCC 450
Para 10: Murlidhar & Ors. Vs. State of Karnataka, (2014) 5 SCC 730
Para 11: Ramesh Babulal Doshi Vs. State of Gujarat, 1996 SCC (cri) 972
Para 13: D. K. Chandel Vs. M/s Wockhardt Ltd & Anr, In Criminal Appeal No(s) 132 of 2020 dated 20-1-2020
Para 14: Basalingappa Vs. Mudibasappa, (2019) 5 SCC 418

JUDGEMENT

1. This is an appeal impugning an order and judgment dated 31-3-2003, by which, the Sessions Court set aside the order and judgment dated 30-12-2002 of JMFC, 2nd Court, Thane, and thereby acquitted respondent no.1 of offence punishable under Section 138 of the Negotiable Instruments Act.

2. After the appeal is filed, appellant no.1 has died and it is only appellant no.2, who is prosecuting the appeal. The cause list indicates the name of one Advocate Mr. Pankaj Das for respondent no.1, who has not been appearing even though his name was also flashed. Appellants also did not have an Advocate, therefore, the court appointed Ms Kainaz Irani to represent appellants and also to assist the court.

3. I have to note that the role played by Ms Irani was more as Amicus and her contribution in delivering the judgment has been immense, which has to be certainly acknowledged.

4. On 29-1-2020, the court directed notice be served upon respondent no.1. The court also gave liberty to appellant no.2 to serve the notice upon respondent no.1. Paragraph 4 of the said order reads as under:
“Therefore, notice be issued to respondent no.1, directing him to remain present in court in person on 14-2-2020, at 11.00 a.m. Respondent should also be informed that, if he does not remain present, this court will pass such order as required to ensure his presence. Appellant no.2 is also permitted to serve this notice directly on respondent no.1, through appellant no.2’s son - Imtiyaz Shaikh. Notice be made ready and handed over to appellant no.2’s son / dispatched by tomorrow,i.e., 30-1-2020. Copy of this notice be also given to advocate Mr. Pankaj Das, who shall also remain present in court.”

5. Appellant no.2 has filed an affidavit of her son affirmed on 13-2-2020 stating that when he went to the address, some other person has been living, who informed he is running a school and purchased the premises sometime in 2014. Mumbra Police have also filed a report stating that respondent no.1 is not available and his whereabouts are not known.
The court, therefore, decided to hear the appeal in the absence of respondent.

6. The facts in brief are that appellants were searching for a residential premises in Mumbra region / Thane, when they came across respondent no.1. Respondent no.1, who was the builder, informed appellants that he has a flat to sell and accordingly, an agreement for sale was entered into between appellant no.2 and respondent no.1 for sale of the flat in the under construction building, known as Manoj Apartment, at Kausa. Agreement for sale dated 13-2-1995 has been entered into between appellant no.2 and respondent no.1 on Rs.20/- stamp paper. The agreement is not adequately stamped and is also not registered. As per the agreement, the total consideration payable was Rs.1,20,00,000/-, out of which, appellant no.2 paid a sum of Rs.95,000/- and the balance Rs.25,000/- was to be paid at the time of taking possession of flat. The possession was expected to be given on 30-1-1996.

7. It appears that appellants came to know that the flat, which was sold by respondent no.1 to appellants, had been sold by him to somebody else. Therefore, when appellants contacted respondent no.1, he promised to give another flat, which also was not given. When appellants realised that respondent no.1 had no intention to give possession of any flat, they asked for return of the amount of Rs.95,000/- that was paid to him. Respondent no.1 agreed and gave five cheques, four of which were for Rs.20,000/- each and the fifth cheque was for Rs.15,000/-. It is the case of appellants that since appellant no.2, with whom, respondent no.1 had entered into the agreement for sale did not have a bank account, respondent no.1 issued these 5 cheques in the name of appellant no.1 in discharge of his liability to appellant no.2. When these cheques were presented, all were dishonoured for insufficient funds. It is appellant’s case that respondent no.1 advised them to re-present those cheques 2 or 3 days later and when they re-presented those cheques, they were once again dishonoured for insufficient funds. Appellants tried to speak to respondent no.1, who except giving empty promises, did not return the amount. Therefore, appellants through their advocate’s notice dated 3-5-1997, issued notice as required under Section 138 of the Negotiable Instrument Act, which despite receipt, respondent no.1 chose not to reply. The case of appellants in the notice is what is narrated above.

8. The Trial Court in its judgment dated 30-12-2002, convicted respondent no.1 to suffer 7 days of simple imprisonment, pay fine of Rs.5000/- and in default, suffer three months simple imprisonment and also pay a compensation of Rs.1,50,000/- to appellants. During the pendency of complaint, respondent no.1 paid a sum of Rs.35,000/-, to which credit was to be given in the compensation amount. Respondent no.1 carried this order of conviction in appeal to the Sessions Court, which appeal was allowed by an order and judgment impugned in this appeal.

9. The Apex Court in Ghurey Lal Vs. State of U.P. (2008) 10 SCC 450 has culled out the factors to be kept in mind by the Appellate Court while hearing an appeal against acquittal. Paragraph Nos.72 and 73 of the said judgment read as under:
72. The following principles emerge from the cases above:
1. The appellate court may review the evidence in appeals against acquittal under sections 378 and 386 of the Criminal Procedure Code, 1973. Its power of reviewing evidence is wide and the appellate court can reappreciate the entire evidence on record. It can review the trial court's conclusion with respect to both facts and law.
2. The accused is presumed innocent until proven guilty. The accused possessed this presumption when he was before the trial court. The trial court's acquittal bolsters the presumption that he is innocent.
3. Due or proper weight and consideration must be given to the trial court's decision. This is especially true when a witness' credibility is at issue. It is not enough for the High Court to take a different view of the evidence. There must also be substantial and compelling reasons for holding that trial court was wrong.
73. In light of the above, the High Court and other appellate courts should follow the well settled principles crystallized by number of judgments if it is going to overrule or otherwise disturb the trial court's acquittal:
1. The appellate court may only overrule or otherwise disturb the trial court's acquittal if it has "very substantial and compelling reasons" for doing so.
A number of instances arise in which the appellate court would have "very substantial and compelling reasons" to discard the trial court's decision. "Very substantial and compelling reasons" exist when:
i) The trial court's conclusion with regard to the facts is palpably wrong;
ii) The trial court's decision was based on an erroneous view of law;
iii) The trial court's judgment is likely to result in "grave miscarriage of justice";
iv) The entire approach of the trial court in dealing with the evidence was patently illegal;
v) The trial court's judgment was manifestly unjust and unreasonable;
vi) The trial court has ignored the evidence or misread the material evidence or has ignored material documents like dying declarations/ report of the Ballistic expert, etc.
vii) This list is intended to be illustrative, not exhaustive.
2. The Appellate Court must always give proper weight and consideration to the findings of the trial court.
3. If two reasonable views can be reached - one that leads to acquittal, the other to conviction - the High Courts/appellate courts must rule in favour of the accused.

10. The Apex Court in many other judgments including Murlidhar & Ors. Vs. State of Karnataka, (2014) 5 SCC 730 has held that unless, the conclusions reached by the trial court are found to be palpably wrong or based on erroneous view of the law or if such conclusions are allowed to stand, they are likely to result in grave injustice, Appellate Court should not interfere with the conclusions of the Trial Court. Apex Court also held that merely because the appellate court on re-appreciation and re-evaluation of the evidence is inclined to take a different view, interference with the judgment of acquittal is not justified if the view taken by the trial court is a possible view.
We must also keep in mind that there is a presumption of innocence in favour of respondent and such presumption is strengthened by the order of acquittal passed in his favour by the Trial Court.

11. The Apex Court in Ramesh Babulal Doshi Vs. State of Gujarat, 1996 SCC (cri) 972 has held that if the Appellate Court holds, for reasons to be recorded that the order of acquittal cannot at all be sustained because Appellate Court finds the order to be palpably wrong, manifestly erroneous or demonstrably unsustainable, Appellate Court can reappraise the evidence to arrive at its own conclusions. In other words, if Appellate Court finds that there was nothing wrong or manifestly erroneous with the order of the Trial Court, the Appeal Court need not even re-appraise the evidence and arrive at its own conclusions.

12. I have perused the evidence and judgment of the Trial Court and the impugned judgment of the Sessions Court and also heard Ms. Dabholkar, learned APP and Ms Irani. I do not find anything palpably wrong, manifestly erroneous or demonstrably unsustainable in the impugned judgment.

13. There can be no dispute that the agreement for sale was entered into between appellant no.2 and respondent no.1. The entire amount of Rs.95,000/- under the agreement for sale, has been paid by appellant no.2 to respondent no.1. The fact that the cheques were given by respondent no.1 to appellant no.1, and those cheques were dishonoured, also cannot be disputed. But Section 138 of the said Act provides that the cheque drawn by a person on an account maintained by him for payment of any amount of money to another person, must be for the discharge, in whole or in part, of any debt or other liability. The explanation to Section 138 says “debt or other liability’ means a legally enforceable debt or other liability. The cheques have not been issued in favour of appellant no.2. Therefore, appellant no.2 could not have filed the complaint. The cheques have been issued in favour of appellant no.1. Did respondent no.1 issue the cheque in discharge of any legally enforceable debt or liability to appellant no.1 ? The answer is no. Ms Irani submitted that the understanding between the parties was the cheques were being given to appellant no.1 in discharge of liability to appellant no.2. First of all, there is nothing in writing to that effect between the parties and secondly, appellant no.2 did not owe any money to appellant no.1. I ask myself, whether appellant no.1 could have in his own name maintained a suit to recover this amount from respondent no.1. There was no cause of action that appellant no.1 had against respondent no.1 and he could not have filed such a suit. Therefore, to that extent the Sessions Court is correct. I will hasten to add, I do not agree with the view expressed by the Sessions Court that appellants should have first proved that they had given the amount of Rs.95,000/- from their bank accounts. That was not at all required, mainly because respondent no.1 had not denied receiving those amounts. Ms Irani relies upon an unreported order of D. K. Chandel Vs. M/s Wockhardt Ltd & Anr, In Criminal Appeal No(s) 132 of 2020 dated 20-1-2020 in which, the court has observed that the production of the account books /cash book etc., may be relevant in the Civil Court, may not be so in the criminal case filed under Section 138 of the N.I. Act. There is a presumption that the holder of cheque received a cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability. It is a rebuttal presumption and the onus is on the accused to raise the probable defence.

14. The Apex Court in Basalingappa V/s. Mudibasappa, (2019) 5 SCC 418 summarized the principles enumerated by the Apex Court in many matters. Paragraph 25 of the said judgment reads as under :
25. We having noticed the ratio laid down by this Court in above cases on Sections 118(a) and 139, we now summarise the principles enumerated by this Court in following manner:-
(i) Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.
(ii) The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
(iii) To rebut the presumption, it is open for the accused to rely on evidence led by him or accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.
(iv) That it is not necessary for the accused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden.
(v) It is not necessary for the accused to come in the witness box to support his defence.

15. Therefore, the standard of proof for rebutting the presumption is that of preponderance of probabilities and not beyond reasonable doubt. To rebut the presumption, it is open for the accused to rely on evidence led by him or accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely. It is not necessary for the accused to come in the witness box in support of his defence because Section 139 imposed an evidentiary burden and not a persuasive burden. In my view, respondent no.1 has discharged that onus effectively.

16. Ms Irani submitted that out of Rs.95,000/-, which was paid by appellant no.2 towards consideration of purchase of flat, Rs.30,000/- was paid by respondent no.1 by cheque and, therefore, at least to that extent, there was a legal enforceable debt / liability. I have to note that first of all, this is not the case of appellants in the complaint. Secondly, during the course of the trial respondent no.1 has paid Rs.35,000/-, which would take care of that Rs.30,000/- that was payable to appellant no.1.

17. Therefore, as there is no legal enforceable debt or liability to appellant no.1, the complaint has to fail.

18. In the circumstances, I have to dismiss the appeal. Appeal dismissed.

Decision : Ordered accordingly.