The appellant/accused is aggrieved by the judgment dated
17.03.2010 passed in Criminal Appeal No.1707/2007 of the High
Court of Kerala at Ernakulam. The respondent herein preferred a
complaint against the appellant under Section 142 of the Negotiable
JUDGMENT Instruments Act (hereinafter called ‘the Act’) for an offence
punishable under Section 138 of the Act. According to the
complainant, the appellant/accused entrusted the work of
construction of an Old Age Home and a Chapel at Punnaveli,
Pathanamthitta District based on an agreement between the
appellant and the respondent. According to the respondent, the
appellant issued a post dated cheque for Rs.25 lakhs in favour of the
respondent towards the outstanding amount due to him for the work
done by him. The cheque was dated 21.03.2005. It was claimed that
when the cheque was presented by the respondent with his bankers,
the same was dishonoured due to insufficiency of funds in the
account of the appellant. It was further claimed that though the
respondent intimated about the dishonour of the cheque by a
lawyer’s notice dated 30.03.2005 served on the appellant on
31.03.2005, she came forward with a reply taking the stand that no
amount was due and that the respondent stealthily removed two
cheques from the custody of the appellant of which the present one
was forged and presented for clearance. Before the trial Court the
appellant pleaded not guilty. On behalf of the respondent Exhibits P-
1 to P-20 were marked and the respondent examined himself as
P.W.1. On behalf of the appellant Exhibits D-1 to D-4 series were
marked, in the course of cross-examination of P.W.1. No oral
evidence was adduced on behalf of the appellant. When the JUDGMENT incriminating circumstances were put against the appellant under
Section 313 of Cr.P.C. she denied the same and filed a written
statement.
The trial Court on a detailed analysis of the evidence, placed before it,
ultimately held that the appellant was able to rebut the presumption
and that there was no circumstance warranting the execution of
Exhibit P-1 cheque in favour of the respondent. So holding, the trial
Court found the appellant not guilty of the offence under Section 138
of the Act and acquitted her under Section 255(1) of Cr.P.C.
Aggrieved by the acquittal of the appellant, the respondent preferred
an appeal before the High Court of Kerala at Ernakulam wherein the
impugned judgment came to be rendered.
The High Court while reversing the judgment of the trial Court found
the appellant guilty of the offence and sentenced her to pay a fine of
Rs.30 lakhs and in default to pay the fine amount directed her to
undergo simple imprisonment for 1 ½ years. It was further directed
that on realization of the fine amount, the same should be paid to the
complainant under Section 357(1) of Cr.P.C. Appellant was also
directed to appear before the trial Court on 17.07.2010 to make the JUDGMENT payment of the fine amount. It was further directed that in default of
appearance before the trial Court, the trial Court would be free to
proceed against the appellant for taking coercive steps for executing
the sentence.
At the time when special leave petition was moved, based on the
undertaking of the appellant, she was directed to deposit a sum of
Rs.25 lakhs in the trial Court within two weeks. Subject to the said
condition notice was issued and interim stay was also granted subject
to fulfillment of the said condition. Subsequently, it was reported on
10.11.2010 that the amount directed to be deposited was also
deposited.
We have heard Mr. Basava Prabhu Patil, Senior Counsel for the
appellant and Shri V. Giri, Senior Counsel for the respondent. We
have also perused the material papers placed before us, the judgment
of the trial Court as well as that of the High Court.
Mr. Basava Prabhu Patil, Senior Counsel for the appellant in his
submissions primarily contended that the appellant discharged her
burden by rebutting the initial presumption contemplated under
Section 118 read along with Section 139 of the Act and that having JUDGMENT regard to the overwhelming preponderance of probabilities existing in
favour of the appellant, the trial Court rightly concluded that the
appellant was entitled for the acquittal. The learned Senior Counsel
further contended that the overwhelming evidence available on record
which was considered by the trial Court, though was referred to by
the High Court in the impugned judgment has been completely
omitted to be considered while reversing the order of acquittal of the
trial Court. The learned Senior Counsel, therefore, contended that the
impugned judgment of the High Court was liable to be set aside.
Apart from the above submission, the learned Senior Counsel by
referring to Sections 8, 9, 138, 139 and 142 of the Act sought to raise
a contention based on the specific expression “Holder” and “Holder in
due course” used in those provisions to contend that the respondent
cannot be said to have fulfilled the requirement of the said provisions
in order to avail the benefits under the provisions of the Act. Learned
Senior Counsel relied upon the decision of this Court, M.S. Narayana
Menon alias Mani Vs. State of Kerala and another reported in
(2006) 6 SCC 39, in support of his submissions.
As against the above submissions Mr. V. Giri, Learned Senior
Counsel for the respondent contended that the appellant was
prevaricating in her stand as regards the issuance of the cheque,
namely, the one in her reply to the lawyer’s notice and the other JUDGMENT
before the Court, in her written statement. The learned Senior
Counsel by referring to Annexure R-3 and R-4 contended that the
contents of the said documents proved appellant’s liability to the
respondent and that the appellant miserably failed to rebut the initial
presumption relating to the issuance of the cheque in favour of the
respondent. As regards the submission based on Sections 8, 9, 138,
139 and 142 of the Act, made by the learned counsel for the
appellant it was contended that the said contention has been raised
for the first time in this Court and that in any event the status of the
respondent as payee/holder of the cheque was duly proved.
Having heard learned counsel for the respective parties and having
bestowed our serious consideration to the contentions raised, at the
very outset, we wish to state that while the trial Court made every
effort to examine the claim of the respondent as regards the issuance
of the cheque by the appellant in his favour and the stand of the
appellant by referring to the respective documentary evidence as well
as the version of P.W.1 before reaching the conclusion about the guilt
of the appellant, we find that the High Court completely failed to
consider and appreciate the documents marked on the side of the
appellant. We find that though the High Court made a reference to
those specific Exhibits, the attention to which was drawn by the
learned counsel, namely, Exhibit D-3, Exhibits P-6 to P-8, Exhibits D- JUDGMENT 4(A) to D-4(F) series vouchers as well as Exhibit D-4(J) voucher
unhesitatingly stated that he did not propose to enter into any finding
on merit as the same was unwarranted in the case on hand
considering the nature of allegations and claim contained in the case.
It also went on to state that in spite of those materials, in its
conclusion, the appellant failed to produce whatever records available
in her possession to show that no amount was due from her to the
respondent. When we made a comparative consideration of the
analysis made by the trial Court while holding that no offence was
made out as against the appellant, as against the above reasoning of
the learned Judge, in the order impugned in this appeal, we are
convinced that the High Court has failed to discharge its onerous
responsibility of considering the material evidence available on record
which were brought to its notice and for the reasons best known, the
High Court blatantly declined to examine those materials by simply
stating that the same was not warranted.
In order to appreciate the correctness of the impugned judgment of
the High Court, as well as, that of the trial Court, it will be
worthwhile to refer to certain conclusions drawn by the learned trial
Judge by making specific reference to the various documentary
evidence placed before it vis-à-vis the oral version of the complainant
JUDGMENThimself. The significant admission of the respondent as P.W.1 was
noted by the trial Court as under:
The construction work entrusted with the respondent had to be
completed for a total sum of Rs.78,70,678/- as stated in Exhibit
D-3.
Respondent admitted that he had not completed the work and that
he would have got payment only after the measurement of the
quantity of the work done.
All the amounts received from the accused were noted in Exhibit P-
9.
It was admitted that a sum of Rs.12,60,100/- mentioned in
Exhibit D-4 series voucher was not noted in Exhibit P-9.
The amount received by him from the accused for conducting
earth work was also not included in Exhibit P-9.
The respondent received various amounts by cheques and cash.
He, however, denied the suggestion that the accused gave two
cheques to one Joychen Manthurthy by way of security on
23.10.2001 while borrowing Rs.5 lakhs from the said person.
It was admitted by the respondent that flooring of the building was
done by the appellant herself and the expenses were not included
in the bill.
The respondent admitted that he had received Rs.77,31,500/- as
per Exhibit P-9 statement while the total amount of work as per JUDGMENT Exhibit D-3 agreement was Rs.78,70,678/-.
The respondent, however, denied the suggestion that excess
payments were made by the appellant to him.
Respondent also admitted that he did not complete the work and
the flooring was ultimately done by the appellant herself.
It was not in dispute that the final payment was to be settled only
after completion of the work and that the respondent did not
complete the work.
There was no evidence to conclude that any measurement of the
work was done and the accounts were settled.
As regards the variation in the stand of the appellant, namely, the
one in the reply notice and the other in the written statement the
same did not materially affect the stand of the appellant in the
light of the overwhelming evidence in support of her stand.
The fact that the cheque was not in the handwriting of the
appellant strengthens the defence version that it was not executed
in favour of the respondent.
There was no reliable documentary evidence adduced by the
complainant to hold that a sum of Rs.25 lakhs was due to him
warranting execution of Exhibit P-1 cheque.
There was no amount legally due to the respondent to hold that
Exhibit P-1 cheque was as a matter of fact issued by the appellant
in favour of the respondent in order to hold that he was a holder of JUDGMENT
the cheque.
It was based on the above reasoning, the trial Court ultimately
concluded that no offence was made out as against the appellant
under Section 138 of the Act in order to convict her under Section
142 of the Act. While such an elaborate consideration was made by
the trial Court for acquitting the appellant, it will be appropriate to
refer to the nature of consideration made by the High Court which
has been stated in paragraph 13 of the impugned judgment, which is
to the following effect:
“13. Another point vehemently raised by the counsel for the respondent/accused is that no amount is due from the accused to the complainant so as to issue Ext.P1 cheque. In order to substantiate the above submission, the learned counsel has taken me through the documents namely, Ext.D3, Exts.P6 to P8 final bills and Ext.D4(A) to D4(F) series vouchers and also Ext.D4(J) voucher. Regarding this submission, I am not proposed to enter into any finding on merit as the same is unwarranted in the present case considering the nature of allegations and claim contained in this case. But from the materials and evidence on record, it is crystal clear that the accused miserably failed to produce whatever records which she was in possession to show that no amount is due from the accused to the complainant. On the other hand, the attempt was to interpret and explain the documents produced by the complainant. Admittedly, no payment was made to the complainant otherwise than through the vouchers and cheques. If that be so, by producing those documents, the defence plea can be established. But there was no attempt in this regard. When the accused has admitted the transaction claimed by the complainant and the complainant has established his claim that there was outstanding amounts due from the accused to the complainant out of the contract work undertaken by him under Ext.D3 agreement, it is for the accused to establish JUDGMENT that no amount is due to the complainant by producing cogent and concrete evidence if they are sticking on their stand.
(underlining is ours)
We can understand if the High Court had considered those Exhibits,
the attention of which was drawn to it and stated as to how it was not
in a position to agree with the conclusions drawn by the learned trial
Judge. The above statement contained in paragraph 13 of the
impugned judgment discloses that the attention of the High Court
was drawn to the specific Exhibits which were relied upon by the
appellant and referred to by the learned trial Judge to reach a
conclusion about the guilt or otherwise of the appellant. After
referring to those Exhibits, unfortunately, we find that in the very
next sentence the High Court proceeded to state that the appellant
failed to produce any material which was in her possession to show
that no amount was due from the appellant to the respondent. Such
an approach of the High Court, in our considered opinion, has
displayed the total perversity in its approach while reversing the
order of the trial Judge. Even, Mr. V. Giri, learned Senior Counsel for
the respondent in spite of his best efforts was unable to convince us
to support the above conclusion found in the judgment of the High
Court.
That apart having considered the conclusions of the learned trial JUDGMENT Judge, we find that those conclusions were drawn by adducing
cogent and convincing reasoning and we do not find any fault in the
said conclusions drawn by the learned trial Judge. In the
circumstance, the principles set out in the decision relied upon by the
learned counsel for the appellant in M.S. Narayana Menon alias
Mani (supra) as regards the presumption to be drawn and the
preponderance of probabilities to be inferred, as set out in
paragraphs 31 to 33, are fully satisfied. Those principles, set out in
paragraphs 31 to 33, can be usefully referred to which are as under:
“31. A Division Bench of this Court in Bharat Barrel & Drum Mfg. Co. v. Amin Chand Payrelal albeit in a civil case laid down the law in the following terms: (SCC pp. 50-51, para 12)
“12. Upon consideration of various judgments as
noted hereinabove, the position of law which emerges
is that once execution of the promissory note is
admitted, the presumption under Section 118(a)
would arise that it is supported by a consideration.
Such a presumption is rebuttable. The defendant can
prove the non-existence of a consideration by raising
a probable defence. If the defendant is proved to have
discharged the initial onus of proof showing that the
existence of consideration was improbable or doubtful
or the same was illegal, the onus would shift to the
plaintiff who will be obliged to prove it as a matter of
fact and upon its failure to prove would disentitle him
to the grant of relief on the basis of the negotiable
instrument. The burden upon the defendant of
proving the non-existence of the consideration can be
either direct or by bringing on record the
preponderance of probabilities by reference to the
circumstances upon which he relies. In such an
event, the plaintiff is entitled under law to rely upon
all the evidence led in the case including that of the
plaintiff as well. In case, where the defendant fails to
discharge the initial onus of proof by showing the JUDGMENT
non-existence of the consideration, the plaintiff would
invariably be held entitled to the benefit of
presumption arising under Section 118(a) in his
favour. The court may not insist upon the defendant
to disprove the existence of consideration by leading
direct evidence as the existence of negative evidence
is neither possible nor contemplated and even if led,
is to be seen with a doubt.”
This Court, therefore, clearly opined that it is not necessary for the defendant to disprove the existence of consideration by way of direct evidence.
32. The standard of proof evidently is preponderance of probabilities. Inference of preponderance of probabilities can be drawn not only from the materials on record but also by reference to the circumstances upon which he relies.
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.”
Applying the abovesaid principles to the case on hand, we find that
the judgment of the trial Court in having drawn the conclusions to
the effect that the appellant sufficiently rebutted the initial
presumption as regards the issuance of the cheque under Sections
138 and 139 of the Act, was perfectly justified. We also find that the
preponderance of probabilities also fully support the stand of the
appellant as held by the learned trial Judge. The judgment of the
High Court in having interfered with the order of acquittal by the
learned trial Judge without proper reasoning is, therefore, liable to be
set aside and is accordingly set aside. Consequently, the conviction
JUDGMENTand sentence imposed in the judgment impugned is also set aside.
Having regard to our above conclusions, the amount deposited by the
appellant with the trial Court in a sum of Rs.25 lakhs with accrued
interest, if any, shall be refunded to her forthwith on production of a
copy of this judgment. The appeal stands allowed with the above
directions.
[Dr. B.S. Chauhan]
[Fakkir Mohamed Ibrahim Kalifulla]
New Delhi; October 12, 2012