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CASE NO.: Appeal (crl.)  233 of 2007

PETITIONER: Kamala S

RESPONDENT: Vidyadharan M.J. & Anr

DATE OF JUDGMENT: 20/02/2007

BENCH: S.B. Sinha & Markandey Katju

JUDGMENT: J U D G M E N T [Arising out of S.L.P. (Crl.) No. 3410 of 2006]

S.B. Sinha, J.

       Leave granted.

       Appellant herein was charged with commission of an offence under  Section 138 of the Negotiable Instruments Act, 1881 (for short, ’the Act’)   on the premise that a cheque issued by her on 05.09.1997 for a sum of Rs. 1  lakh drawn in favour of the respondent herein, when presented, was  dishonoured for the reason "funds  insufficient".  A legal notice was sent to  her, but despite  the receipt thereof, she had not repaid the said amount.            Before the learned Trial Judge, a defence was raised by the appellant  herein that the cheque in question was not drawn in discharge of any debt or  security but in fact was drawn for payment of a balance consideration for  sale of a property in her favour by the wife of the respondent.

       According to the appellant, Smt. Sathyabhama owned a property  bearing old Survey No. 1363/3-1-1 measuring an area of 47 cents.  She had  executed two  Sale Deeds, one in favour of Mr. Ramchandran Nair and  another in favour of Thankamony conveying to them 20 cents and 27 cents  respectively. The Sale Deeds were allegedly executed in favour of the  aforementioned persons as a security in lieu of some amount paid in her  favour.  However, when the Thankamony and Ramchandran Nair demanded  the money back from the wife of the respondent, the appellant was  approached for purchase of the said property for a consideration of Rs. 5  lakhs.   On 05.09.1997, the said Thankmony executed a Deed for Sale in  favour of the appellant wherefor she had withdrawn a sum of Rs. 4 lakhs  from bank.  The said amount was paid to Sathyabhama which in turn was  paid to Thankamony and Ramchandran Nair.  However, as there was a  dispute in regard to the exact area of the property and measurement therefor   had not been taken, she had given a cheque to Sathyabhama in the name of  her husband as demanded by Sathyabhama on an understanding that the  consideration shall be reduced if the area found in the Sale Deed is found  short.  As upon measurement, the area of the property conveyed in his  favour was found to be short by 4 cents,  the appellant paid a sum of Rs.  20,000/- to the respondent on 27.11.1997. Allegedly, however the  respondent had asked for a sum of Rs. 10,000/- more from the appellant, but  a sum of Rs. 5,000/- was only given to him on 18.12.1997 towards full and  final settlement thereof and in that view of the matter no further amount was  due for her.

       However, despite the same, a cheque was produced before a bank  which, as noticed hereinbefore, was dishonoured.   

       A complaint petition was filed thereafter on the allegation that the  appellant had borrowed a sum of Rs. 1 lakh from the respondent for

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purchasing a house and the same was to be repaid within a period of 5  months.

       The learned Trial Judge considered the evidence adduced on behalf of  the complainant and found the defence of the appellant to be a probable one  and having regard to the facts and circumstances of this case, held that the  presumption raised under Section 142 of the Act stood discharged and the  complainant failed to discharge the onus placed on him stating :

"\005This also suggests that Ext. P2 may be a signed  blank cheque issued by the accused to PW1 as a  security.   Thus the facts and circumstances discussed  above leads one to the conclusion that the defence set  up by accused that he had issued a signed blank  cheque as a security along with Ext. P1 agreement and  Ext. P2 is that cheque he had issued is probable.  The  circumstances discussed above are badly damaging  the prosecution case and they are sufficient to displace  the presumptions available to the complainant. These  circumstances in fact corroborates PW1 to show the  reasonable possibility of the non existence of the  presumed fact.  The accused need not prove his  defence case beyond reasonable doubt.   Here the  evidence tendered by DW1 together with the  circumstances discussed above is seen sufficient to  rebut the presumptions.   Now the burden again shifts  to the complainant and he is to prove by independent  positive evidence the most material fact of existence  of debt of the accused.  The complainant had not  produced sufficient evidence to prove his case beyond  reasonable doubt, without the help of the  presumptions\005"

       On the said finding, the learned Trial Judge recorded a judgment of  acquittal.  On an appeal preferred by the respondent herein thereagainst, the  High Court, however, reversed the said finding, opining that the appellant  had not been able to discharge the burden of proof laid down under Sections  138 and 139 of the Act, which read as under : "138. Dishonour of cheque for insufficiency, etc., of  funds in the account.\027Where any cheque drawn by a  person on an account maintained by him with a banker  for payment of any amount of money to another person  from out of that account for the discharge, in whole or in  part, of any debt or other liability, is returned by the bank  unpaid, either because of the amount of money standing  to the credit of that account is insufficient to honour the  cheque or that it exceeds the amount arranged to be paid  from that account by an agreement made with that bank,  such person shall be deemed to have committed an  offence and shall, without prejudice to any other  provision of this Act, be punished with imprisonment for  a term which may extend to two years, or with fine which  may extend to twice the amount of the cheque, or with  both: Provided that nothing contained in this section shall  apply unless\027   (a)     the cheque has been presented to the bank within          a period of six months from the date on which          it is   drawn or within the period of its validity,          whichever is earlier.    (b)     the payee or the holder in due course of the          cheque, as the case may be, makes a demand

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       for the payment of the said amount of money          by giving a notice, in writing, to the drawer of the          cheque, within thirty days of the receipt of          information by him from the bank regarding the          return of the cheque as unpaid, and  

       (c)      the drawer of such cheque fails to make the          payment of the said amount of money to the payee          or, as the case may be, to the holder in due course          of the cheque, within fifteen days of the receipt of          the said notice.  Explanation.\027For the purposes of this section, "debt or  other liability" means a legally enforceable debt or other  liability." "139. Presumption in favour of holder.\027It shall be  presumed, unless the contrary is proved, that the holder  of a cheque received the cheque of the nature referred to  in section 138 for the discharge, in whole or in part, or  any debt or other liability."           The High Court in arriving at the said conclusion, although accepted  that the Sale Deeds had been executed in favour of the appellant herein, but  despite the fact that the defence witnesses had fully supported her statement,  who also examined herself as DW-1, held  "There is no explanation for non- mentioning of the same" in the reply to the notice which had been served on  her by the respondent.   

       On the aforementioned finding, the appellant was sentenced to  imprisonment till rising of the Court and  pay compensation of a sum of Rs.  1 lakh to the complainant in terms of Section 357(3) of the Code of Criminal  Procedure; and in default thereof to undergo simple imprisonment for 6  months.

       Mr. K.V. Viswanathan, the learned counsel appearing on behalf of the  appellant, would submit that the High Court committed a manifest error in  passing the impugned judgment, inasmuch as the learned Trial Judge  keeping in view the entire materials on records had arrived at an opinion that  the burden had fully been discharged by the appellant, and, thus, could not  have reversed the said finding as the said defence was a probable one.   

         Mr. Rajeev, learned counsel appearing on behalf of the respondent,  on the other hand, would draw our attention to a declaration made by the  appellant  herein  contained in Annexure R-1, which is in the following  terms :

               "I, Sukumaran Kamala at Baiju Bhawanam in  Puthoor Mukku, Kadavoor Desom in Kadavoor Village  hereby execute this agreement on 05.09.1997 (Nineteen  Ninety Seven September five) and given to Vidhyadharan  s/o Kunhikrishnan at Vidhyamandiram, at Error Amsom  Desam in Eroor Village.

               I have obtained from you Rs. One lakh for the  purpose of purchasing a property.  I hereby undertake that  I will repay Rs. One lakh within five months from this  date.  If I fail to repay Rs. One lakh within the due date  you are entitled to this amount along with interest from  such date and that you can realize from my properties.

               All the above stipulations have written with my  full knowledge and consent and signed."

       The learned counsel would contend that keeping in view the fact that  in terms of the said document a cheque was drawn by the appellant herein  within a period of 5 months from 05.09.1997, a presumption in terms of

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Section 139 of the Act was correctly raised by the High Court.   

       It was submitted that even if the defence raised by the appellant herein  was true, she has failed to offer any explanation as to why the cheque had to  be issued.   

       The Act contains provisions raising presumption as regards the  negotiable instruments under Section 118(a) of the Act as also under Section  139 thereof. The said presumptions are rebuttable ones. Whether  presumption stood rebutted or not would depend upon the facts and  circumstances of each case.  

       The nature and extent of such presumption came up for consideration  before this Court in M.S. Narayana Menon Alias Mani V. State of Kerala  and Anr.  [(2006) 6 SCC 39] wherein it was held :

"30. Applying the said definitions of "proved" or  "disproved" to the principle behind Section 118(a) of the  Act, the court shall presume a negotiable instrument to be  for consideration unless and until after considering the  matter before it, it either believes that the consideration  does not exist or considers the non-existence of the  consideration so probable that a prudent man ought,  under the circumstances of the particular case, to act  upon the supposition that the consideration dos not exist.   For rebutting such presumption, what is needed is to raise  a probable defence.   Even for the said purpose, the  evidence adduced on behalf of the complainant could be  relied upon."

       This Court clearly laid down the law that standard of proof in  discharge of the burden in terms of Section 139 of the Act being of  preponderance of a probability, the inference therefor can be drawn not only  from the materials brought on record but also from the reference  to the  circumstances upon which the accused relies upon.   Categorically stating  that the burden of proof on accused is not as high as that of the prosecution,   it was held;  

"33.  Presumption drawn under a statute has only an  evidentiary value.   Presumptions are raised in terms of  the Evidence Act.   Presumption drawn in respect of one  fact may be an evidence even for the purpose of drawing  presumption under another."

       It was further observed that ;

" 38.  If for the purpose of a civil litigation, the defendant  may not adduce any evidence to discharge the initial  burden placed on him, a "fortiori" even an accused need  not enter into the witness box and examine other  witnesses in support of his defence.   He, it will bear  repetition to state, need not disprove the prosecution case  in its entirety as has been held by the High Court.

 39.  A presumption is a legal or factual assumption  drawn from the existence of certain facts."

       Indisputably, a sale deed was executed in favour of the appellant  herein by the persons in whose favour the wife of the respondent had  executed Deeds of Sale.  

       A sum of Rs. 4 lakhs had been withdrawn by the respondent from the  bank.  

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       The document was executed on the same day on which Exhibit P-1  was executed.

       The learned Trial Judge as also the High Court had arrived at a  finding of fact that the testimony  of the appellant (DW-1) was supported by  other witnesses examined on her behalf. The High Court, however,  proceeded to hold that Ramchandran Pillai and Thankamony had not been  examined nor the purported Deeds of Sale executed on their behalf by the  wife of the respondent had been examined. Appellant, as noticed  hereinbefore, examined herself.  The wife of the complainant had been  working in a school near her house.  Her explanation in regard to the  circumstances in which she had drawn a cheque was not controverted.    Appellant also examined the scribe of the deed.   According to the appellant,  two Sale Deeds were executed showing considerations therefor as Rs.  80,000/- and Rs. 20,000/- only at the instance of the appellant although the  agreed consideration therefor the same was Rs. 5 lakhs.  DW-3, Shashi was  also a document writer.

       The testimonies of the said witnesses were relied upon by the learned  Trial Judge.

       A finding of fact was arrived at that the cheque was not signed 5  months after the execution of the agreement as contained in Ex. P-1 but on  the same day.  This finding was arrived at on comparison of the colour of the  ink and ’letter pattern’ obtaining in both the documents.  A further finding of  fact was arrived at by the learned Trial Judge that the same had been written  by the same pen.  The respondent who examined himself as PW-1 accepted  that he had received a sum of Rs. 20,000/- after the execution of the said  Deed of Sale, but raised a contention that said amount had not been paid in  relation to another transaction; but  what other transaction was entered into  by and between the parties thereto had not been disclosed.  Despite a definite  stand taken by the appellant in that behalf, the respondent did not bring any  fact to establish as to what the possible transaction could have been.   It was,  therefore, opined ;

"...This also suggests that Ext. P2 may be a signed  blank cheque issued by the accused to PW1 as a  security.  Thus the facts and circumstances discussed  above leads one to the conclusion that the defence set  up by the accused that he had issued a signed blank  cheque as a security along with Ext. P1 agreement and  Ext. P2 is that cheque he had issued is probable.  The  circumstances discussed above are badly damaging the  prosecution case and they are sufficient to displace the  presumptions available to the complainant.  These  circumstances in fact corroborates PW1 to show the  reasonable possibility of the non existence of the  presumed fact.  The accused need not prove his defence  case beyond reasonable doubt.  Here the evidence  tendered by DW1 together with the circumstances  discussed above is seen sufficient to rebut the  presumptions.   Now the burden again shifts to the  complainant and he is to prove by independent positive  evidence the most material fact of existence of debt of  the accused. The complainant had not produced  sufficient evidence to prove his case beyond reasonable  doubt, without the help of the presumptions. Thus the  complainant failed to prove beyond reasonable doubt  that the accused had issued Ext. P1 cheque towards the  repayment of Rs. 1,00,000/- he had borrowed from  PW1 as alleged...."

       The High Court, on the other hand, only on the premise that said

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Ramchandran Pillai and Thankamony had not been examined and the  appellant did not exhibit the Deeds of Sale executed in their favour by the  wife of the respondent opined that the said finding was perverse.  The  reasonings of the learned Trial Judge had not been met by the High Court.    Nothing has been stated as to why the findings of the learned Trial Judge  were not probable.   

       Having considered the entire fact situation obtaining in the present  case, we are of the opinion that the defence case cannot said to be wholly  improbable one.  If it was probable, the findings of the learned Trial Judge  could not have been thrown out without meeting the reasonings therefor.    The High Court, therefore, in our opinion was not correct in interfering with  the said Judgment.   

       It is now well settled when two views are possible, the High Court  while exercising its appellate power against a judgment of acquittal, shall  not ordinarily interfere therewith. [See V. Venkata Subbarao v. State  represented by Inspector of Police, A.P. \026 2006 (14) SCALE 125].

       For the reasons aforementioned, the impugned judgment cannot be  sustained, which is set aside accordingly.  The appeal is allowed.