Full Judgment Text
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REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 271 OF 2020
APS FOREX SERVICES PVT. LTD. .. Appellant(s)
Versus
SHAKTI INTERNATIONAL FASHION LINKERS & ORS. .. Respondent(s)
WITH
CRIMINAL APPEAL NO. 272 OF 2020
J U D G M E N T
M. R. Shah, J.
CRIMINAL APPEAL NO. 271 OF 2020
Feeling aggrieved and dissatisfied with the impugned
Signature Not Verified
judgment and order dated 20.04.2018 passed by the High Court of
Digitally signed by
MEENAKSHI KOHLI
Date: 2020.02.14
16:31:41 IST
Reason:
Delhi in Crl. L.P. No.258 of 2018 by which the High Court has
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dismissed the said application for leave to appeal challenging the
judgment and order of acquittal passed by the Learned Trial Court
acquitting the original accused respondents herein for the offence
under Section 138 of the Negotiable Instruments Act (for short, ‘the
N.I. Act’) and thereby confirming the judgment and order of
acquittal passed by the Learned Trial Court, the original
complainant has preferred the present appeal.
CRIMINAL APPEAL NO. 272 OF 2020
Feeling aggrieved and dissatisfied with the impugned
judgment and order dated 20.04.2018 passed by the High Court of
Delhi in Crl. L.P. No.259 of 2018 by which the High Court has
dismissed the said application for leave to appeal challenging the
judgment and order of acquittal passed by the Learned Trial Court
acquitting the original accused respondents herein for the offence
under Section 138 of the Negotiable Instruments Act (for short, ‘the
N.I. Act’) and thereby confirming the judgment and order of
acquittal passed by the Learned Trial Court, the original
complainant has preferred the present appeal.
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CRIMINAL APPEAL NO. 271 OF 2020
2. According to the complainant, the appellant is in the business
of sale and purchase of Foreign Exchange. That the original
accused respondents herein approached the appellant for
issuance of Foreign Exchange Currency/USD Travel Currency
Card. According to the original complainant appellant herein, a
total sum of Rs.19,01,320/ was paid to the accused through VTM
(Visa Travel Money Card) which came to be withdrawn by the
accused on different days on 10.01.2014, 20.02.2014 and
22.02.2014. According to the complainant, the original accused
respondents herein paid Rs.6,45,807/ only leaving a balance of
Rs.12,55,513/. According to the complainant, the respondents
accused issued four cheques total amounting Rs.9,55,574/, which
were issued in favour of the complainant. However, all the
aforesaid cheques when presented, came to be dishonoured.
According to the complainant thereafter the respondents issued one
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another cheque bearing No.374941 of Rs.9,55,574/ of the
partnership firm namely Shakti International in discharge of the
legal liability. According to the complainant when the same cheque
was presented the same came to be dishonoured due to “STOP
PAYMENT” vide bank memo dated 02.06.2014. Thereafter, the
complainant sent a legal notice upon the original accused under
Section 138 of the N.I. Act vide notice dated 07.06.2014. Despite
the service of the notice, the accused did not make the payment of
the cheque amount. Therefore, the original complainant appellant
herein filed the complaint before the Learned Metropolitan
Magistrate. The Learned Metropolitan Magistrate also believed that
the cheque was issued and the same was returned unpaid with
remarks “STOP PAYMENT”. The Learned Metropolitan Magistrate
believed that the accused Sushil Kumar Sharma admitted his
signature on the cheque. The Learned Metropolitan Magistrate also
believed receipt of the demand notice by the accused persons and
nonpayment towards the said cheque. However, thereafter
Learned Metropolitan Magistrate observed and held that there is no
legal liability as the payment through the card is not established
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and proved; that the payments are prior to the issuance of the card.
Resultantly, the Learned Metropolitan Magistrate dismissed the
complaint by judgment and order dated 20.01.2017. Feeling
aggrieved and dissatisfied with the judgment and order of acquittal
passed by the Learned Trial Court acquitting the accused, the
complainant preferred appeal before the Learned Sessions Court.
Learned Sessions Court dismissed the said appeal on the ground
that the same is not maintainable. Thereafter the complainant filed
the appeal before the High Court. By the impugned judgment and
order, the High Court dismissed the appeal and confirmed the order
of acquittal passed by the Learned Trial Court. Hence, the original
complainant has preferred the present appeal.
3. Learned Counsel appearing on behalf of the appellant has
vehemently submitted that in the facts and circumstances of the
case both the Learned Trial Court as well as the High Court have
committed a grave error in acquitting the original accused for the
offence under Section 138 of the N.I. Act.
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3.1 It is further submitted by Learned Counsel appearing on
behalf of the original complainant – appellant herein that both the
Courts below have not appreciated and/or considered the
presumption in favour of the complainant under Section 139 of the
N.I. Act. It is further submitted by Learned Counsel appearing on
behalf of the complainant that both the Courts below have
materially erred in acquitting the accused. It is submitted that the
accused had admitted issuance of the cheque as well as the
signature on the cheque. It is submitted that therefore there is a
presumption under Section 139 of the N.I. Act in favour of the
complainant. It is submitted that thereafter the onus would be
upon the accused to rebut the presumption and for that, the
accused has to lead the evidence. It is submitted that in the
present case no evidence has been led on behalf of the accused to
rebut the presumption. It is submitted that the presumption
mandatory by Section 139 of the N.I. Act includes the presumption
that there exists a legally enforceable debt or liability and therefore
both the Courts below have materially erred in acquitting the
accused. In support of the above, reliance is placed on the
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decisions of this Court in the case of Rangappa vs. Sri Mohan ,
(2010) 11 SCC 441 and vs. , (2018) 8
Kisan Rao Shankargouda
SCC 165.
3.2 It is further submitted by Learned Counsel appearing on
behalf of the complainant that even at the time of framing of the
charge against the accused and when his statement was recorded,
the accused had admitted that he had taken services of the Foreign
Exchange and Travel Card. It is submitted that he had also
admitted that he had made part payment in discharge of the said
liability and some amount was remaining. It is submitted that
therefore the accused was required to lead the evidence and prove
that the entire amount due and payable has been paid. It is
submitted that therefore in view of the presumption under Section
139 of the N.I. Act, the Learned Trial Court ought to have convicted
the accused for the offence under Section 138 of the N.I. Act. It is
submitted that therefore the High Court has erred in confirming the
acquittal.
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4. The present appeal is vehemently opposed by the learned
counsel appearing on behalf of the accused.
4.1 It is vehemently submitted by Learned Counsel appearing on
behalf of the original accused that in the facts and circumstances of
the case both the courts below have not committed any error in
acquitting the accused.
4.2. It is further submitted that it is true that the cheque was
issued, but the same was issued towards the security. It is
submitted that as such the complainant misused the cheque to
recover the dues of business from Ranger Export of India. It is
submitted that there is a specific finding given by the Learned Trial
Court that the complainant failed to prove the legal liability and/or
the dues of the accused for which the cheque was issued.
4.3 It is submitted by Learned Counsel for the accused that in the
present case the accused has rebutted the presumption under
Section 139 of the N.I. Act and has demonstrated and proved that
there was no legal liability and/or the dues, due and payable to the
complainant.
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4.4. Relying upon the decision of this Court in vs.
Basalingappa
Mudibasappa, (2019) 5 SCC 418, it is submitted that as held by
this Court once there is probable defence on behalf of the accused,
thereafter the burden shifts on the complainant to prove his
financial capacity and other facts.
4.5 Making the above submissions and relying upon the cases, it
is prayed to dismiss the present appeal.
5 We have heard the learned counsel appearing on behalf of the
respective parties at great length.
5.1 We have considered minutely the evidence on record, both oral
as well documentary. We have also considered and gone through
the judgment and order passed by the Courts below acquitting the
respondents accused for the offence under Section 138 of the N.I.
Act.
5.2. What is emerging from the material on record is that the
issuance of cheque by the accused and the signature of the accused
on the said cheque are not disputed by the accused. The accused
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has also not disputed that there were transactions between the
parties. Even as per the statement of the accused, which was
recorded at the time of the framing of the charge, he has admitted
that some amount was due and payable. However, it was the case
on behalf of the accused that the cheque was given by way of
security and the same has been misused by the complainant.
However, nothing is on record that in the reply to the statutory
notice it was the case on behalf of the accused that the cheque was
given by way of security. Be that as it may, however, it is required
to be noted that earlier the accused issued cheques which came to
be dishonoured on the ground of ‘insufficient funds’ and thereafter
a fresh consolidated cheque of Rs. Rs.9,55,574/ was given which
has been returned unpaid on the ground of “STOP PAYMENT”.
Therefore, the cheque in question was issued for the second time.
Therefore, once the accused has admitted the issuance of cheque
which bears his signature, there is presumption that there exists a
legally enforceable debt or liability under Section 139 of the N.I. Act.
However, such a presumption is rebuttable in nature and the
accused is required to lead the evidence to rebut such presumption.
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The accused was required to lead evidence that the entire amount
due and payable to the complainant was paid.
6. On the presumption under Section 139 of the N.I. Act few
decisions of this Court are required to be referred to and
considered.
6.1 In the case of K.N. Beena vs. Muniyappan , (2001) 8 SCC 458,
it is observed and held by this Court that under Section 118 of the
N.I. Act, unless the contrary is proved, it is to be presumed that the
negotiable instruments (including a cheque) had been made or
drawn for consideration. It is further observed and held that under
Section 139, the Court has to presume, unless the contrary is
proved, that the holder of the cheque received the cheque for
discharge, in whole or in part, of a debt or liability. It is further
observed that thus in complaints under Section 138, the Court has
to presume that the cheque had been issued for a debt or liability.
This presumption is rebuttable. However, the burden of proving
that the cheque has not been issued for a debt or liability is on the
accused.
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6.2 In the case of (supra) again, this Court had an
Rangappa
occasion to consider the presumption of existence of a legally
enforceable debt or liability under Section 139 of the N.I. Act. In
the aforesaid decision, after considering other decisions of this
Court on Section 118(a) and 139 of N.I. Act, it is observed and held
that there exists a presumption which favours the complainant. It
is further observed that the presumption under Section 139 of the
N.I. Act is in the nature of a rebuttable presumption and it is open
to the accused to raise a defence wherein there is existence of
legally enforceable debt or liability can be contested. In Paragraph
27 this Court observed and has held as under:
“27. Section 139 of the Act is an example of a
reverse onus clause that has been included in
furtherance of the legislative objective of improving
the credibility of negotiable instruments. While
Section 138 of the Act specifies a strong criminal
remedy in relation to the dishonour of cheques,
the rebuttable presumption under Section 139 is a
device to prevent undue delay in the course of
litigation. However, it must be remembered that
the offence made punishable by Section 138 can
be better described as a regulatory offence since
the bouncing of a cheque is largely in the nature
of a civil wrong whose impact is usually confined
to the private parties involved in commercial
transactions. In such a scenario, the test of
proportionality should guide the construction and
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interpretation of reverse onus clauses and the
defendantaccused cannot be expected to
discharge an unduly high standard or proof.”
6.3 In the case of Kishan Rao (Supra) after considering the
decision of this Court in the case of Kumar Exports vs. Sharma
Carpets , (2009) 2 SCC 513, it is observed and held that the
accused may adduce evidence to rebut the presumption, but mere
denial regarding existence of debt shall not serve any purpose. This
Court in paragraph 19 of that judgment considered paragraph 14,
15, 18 & 19 of the decision in the case of Kumar Exports (Supra)
as under:
This Court in v.
19. Kumar Exports Sharma
Carpets (Supra) , had considered the provisions of
the Negotiable Instruments Act as well the
Evidence Act. Referring to Section 139, this Court
laid down the following in paras 14, 15, 18 and
19:
“ . Section 139 of the Act provides that it
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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, of any debt or other liability.
. Presumptions are devices by use of
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which the courts are enabled and entitled to
pronounce on an issue notwithstanding that
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there is no evidence or insufficient evidence.
Under the Evidence Act all presumptions
must come under one or the other class of
the three classes mentioned in the Act,
namely, ( 1 ) “may presume” (rebuttable), ( 2 )
“shall presume” (rebuttable), and ( 3 )
“conclusive presumptions” (irrebuttable). The
term “presumption” is used to designate an
inference, affirmative or disaffirmative of the
existence of a fact, conveniently called the
“presumed fact” drawn by a judicial tribunal,
by a process of probable reasoning from
some matter of fact, either judicially noticed
or admitted or established by legal evidence
to the satisfaction of the tribunal.
Presumption literally means “taking as true
without examination or proof”.
*
18 . Applying the definition of the word
“proved” in Section 3 of the Evidence Act to
the provisions of Sections 118 and 139 of the
Act, it becomes evident that in a trial under
Section 138 of the Act a presumption will
have to be made that every negotiable
instrument was made or drawn for
consideration and that it was executed for
discharge of debt or liability once the
execution of negotiable instrument is either
proved or admitted. As soon as the
complainant discharges the burden to prove
that the instrument, say a note, was
executed by the accused, the rules of
presumptions under Sections 118 and 139
of the Act help him shift the burden on the
accused. The presumptions will live, exist
and survive and shall end only when the
contrary is proved by the accused, that is,
the cheque was not issued for consideration
and in discharge of any debt or liability. A
presumption is not in itself evidence, but
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only makes a prima facie case for a party for
whose benefit it exists.
. The use of the phrase “until the contrary
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is proved” in Section 118 of the Act and use
of the words “unless the contrary is proved”
in Section 139 of the Act read with
definitions of “may presume” and “shall
presume” as given in Section 4 of the
Evidence Act, makes it at once clear that
presumptions to be raised under both the
provisions are rebuttable. When a
presumption is rebuttable, it only points out
that the party on whom lies the duty of going
forward with evidence, on the fact presumed
and when that party has produced evidence
fairly and reasonably tending to show that
the real fact is not as presumed, the purpose
of the presumption is over.”
6.4 Now so far as the reliance is placed by Learned Counsel
appearing on behalf of the accused on the decision of this Court in
the case of Basalingappa (supra), on going through the said
decision, we are of the opinion that the said decision shall not be
applicable to the facts of the case on hand and/or the same shall
not be of any assistance to the accused. In that case before this
Court, the defence by the accused was that the cheque amount was
given by the complainant to the accused by way of loan. When the
proceedings were initiated under Section 138 of the N.I. Act the
accused denied the debt liability and the accused raised the defence
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and questioned the financial capacity of the complainant. To that,
the complainant failed to prove and establish his financial capacity.
Therefore, this Court was satisfied that the accused had a probable
defence and consequently in absence of complainant having failed
to prove his financial capacity, this Court acquitted the accused. In
the present case, the accused never questioned the financial
capacity of the complainant. We are of the view that whenever the
accused has questioned the financial capacity of the complainant in
support of his probable defence, despite the presumption under
Section 139 of the N.I. Act about the presumption of legally
enforceable debt and such presumption is rebuttable, thereafter the
onus shifts again on the complainant to prove his financial capacity
and at that stage the complainant is required to lead the evidence to
prove his financial capacity, more particularly when it is a case of
giving loan by cash and thereafter issuance of a cheque. That is not
a case here.
7. Coming back to the facts in the present case and considering
the fact that the accused has admitted the issuance of the cheques
and his signature on the cheque and that the cheque in question
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was issued for the second time, after the earlier cheques were
dishonoured and that even according to the accused some amount
was due and payable, there is a presumption under Section 139 of
the N.I. Act that there exists a legally enforceable debt or liability.
Of course such presumption is rebuttable in nature. However, to
rebut the presumption the accused was required to lead the
evidence that full amount due and payable to the complainant has
been paid. In the present case, no such evidence has been led by
the accused. The story put forward by the accused that the
cheques were given by way of security is not believable in absence
of further evidence to rebut the presumption and more particularly
the cheque in question was issued for the second time, after the
earlier cheques were dishonoured. Therefore, both the courts below
have materially erred in not properly appreciating and considering
the presumption in favour of the complainant that there exists
legally enforceable debt or liability as per Section 139 of the N.I.
Act. It appears that both, the Learned Trial Court as well as the
High Court, have committed error in shifting the burden upon the
complainant to prove the debt or liability, without appreciating the
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presumption under Section 139 of N.I. Act. As observed above,
Section 139 of the Act is an example of reverse onus clause and
therefore once the issuance of the cheque has been admitted and
even the signature on the cheque has been admitted, there is
always a presumption in favour of the complainant that there exists
legally enforceable debt or liability and thereafter it is for the
accused to rebut such presumption by leading evidence.
8. In view of the reasons stated above, the impugned judgment
and order passed by the High Court and that of the Metropolitan
Magistrate acquitting the original accused respondents herein for
the offence under Section 138 of the N.I. Act cannot be sustained
and the same deserves to be quashed and set aside and are
accordingly quashed and set aside. The original accused
respondents herein are held guilty for the offence under Section 138
of the N.I. Act. All the original accused respondents herein are
therefore, convicted under Section 138 of the N.I. Act. Original
Accused No.2 to 4 Respondent No.2 to Respondent No.4 herein are
sentenced to undergo three months simple imprisonment with a
fine of Rs.10,000/ each and in default thereof to undergo further
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one month simple imprisonment. The original accused
respondents herein are also directed to pay a sum of
Rs.19,11,148/ to the original complainant by way of compensation
to be paid within a period of eight weeks from today.
9. Present appeal is accordingly allowed.
CRIMINAL APPEAL NO. 272 OF 2020
10. Now so far as this appeal arising out of the impugned
judgment and order passed by the High Court in Crl. L.P. No.
259/2018 arising out of the judgment and order passed by the
learned trial Court in Criminal Complaint No. 62/15 (new no.
613738/16) acquitting the original accused for the offence under
Section 138 of the N.I. Act is concerned, the only difference is with
respect to the cheques amount. In the present case, four cheques
each of Rs. 1,00,000/ were issued which came to be dishonoured.
Except the cheques amount, there is no difference.
11. For the reasons stated in Criminal Appeal No. 271 of 2020
which has been allowed today, this appeal is also allowed. The
impugned judgment and order passed by the High Court as well as
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that of the trial Court acquitting the original accused – respondents
herein for the offence under Section 138 of the N.I. Act cannot be
sustained and the same deserves to be quashed and set aside and
are accordingly quashed and set aside. The original accused
respondents herein are held guilty for the offence under Section 138
of the N.I. Act. All the original accused respondents herein are
therefore, convicted under Section 138 of the N.I. Act. Original
Accused No.2 to 4 Respondent No.2 to Respondent No.4 herein are
sentenced to undergo three months simple imprisonment with a
fine of Rs.10,000/ each and in default thereof, to undergo further
one month simple imprisonment. The original accused
respondents herein are also directed to pay a sum of Rs.8,00,000/
to the original complainant by way of compensation to be paid
within a period of eight weeks from today.
……..…………………..J.
(ASHOK BHUSHAN)
…………………………..J.
(M. R. SHAH)
New Delhi;
February 14, 2020.