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DEEPAK GUPTA, J. –

CRM-A-692-MA of 2014

This application for grant of leave to appeal under Section 378(4) Cr.P.C is directed against the order dated 19.09.2013 passed by learned Judicial Magistrate Ist Class, Panipat in complaint No.2565 of 2012 titled ‘HDFC Bank Ltd. vs. Mohinder Singh’, whereby the said complaint filed under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred as `the N.I. Act’) has been dismissed and the respondent-accused was acquitted.

2. Leave granted. On direction to the Registry to assign appeal number, number CRA-AS-348-2023 has been assigned.

CRA-AS-348-2023

3. Trial Court record reveals that as per the allegations made in the complaint, facilities of cash credit limit and the term facility were availed by the accused from the complainant- Bank and in order to discharge his outstanding dues, accused issued Cheque No.202612 dated 01.09.2009 for an amount of Rs.2,25,658.08 Ex.C1 from his account maintained in Bank of Punjab Ltd., Ambala Cantt. On presentation, the cheque was returned vide memo dated 04.09.2009 Ex.C2 with remarks “Insufficient Funds”. Legal notice dated 22.09.2009 Ex.C3 was sent to the accused asking him to make payment of the cheque amount within 15 days of the receipt of the notice but accused failed to do so, compelling the complainant- Bank to approach the Court.

4. Trial Court record reveals that after recording preliminary evidence, accused was summoned to face prosecution under Section 138 of the NI Act. On his appearance, he was charge-sheeted under Section 138 of the NI Act, to which he pleaded not guilty and claimed trial. During proceedings, accused made payment of Rs.50,000/- on 31.07.2012 and sought time for making balance payment. He did not pay the remaining amount. Evidence of the complainant was concluded. Statement of the accused under Section 313 Cr.P.C was recorded, in which he pleaded that he had already paid the balance amount of Rs.50,000/- and nothing was outstanding. However, no evidence in defence was adduced. After hearing both the sides, trial Court recorded the acquittal by way of the impugned judgment dated 19.09.2013.

5. Challenging the afore-said acquittal, it is contended by learned counsel for the appellant- complainant that learned trial Court failed to appreciate the fact that accused nowhere disputed signatures on his cheque and so, presumption under Section 139 of the NI Act was available to the complainant, which the accused had to rebut. Learned counsel contends that during proceedings of the complaint, accused made payment of Rs.50,000/- and undertook to pay the balance amount, which he did not pay and this in itself shows the falsity of the defence taken by the accused; and supports the case of the complainant to the effect that accused had the legal liability to discharge. It is further contended that the learned trial Court failed to advert to this aspect of the matter and wrongly recorded the acquittal.

6. Upon notice, appearance was made on behalf of the respondent through his counsel. However, on 18.07.2023, nobody made appearance on behalf of the respondent. It is despite the fact that intimation to counsel for the respondent was sent through e-mail.

7. Having considered the submissions of learned counsel for the appellant and after perusing the record, I find merit in the appeal.

8. Acquittal has been recorded by learned trial Court by observing that the complainant- Bank had failed to prove the legal liability qua the cheque issued by the accused and further, the execution of the cheque was not proved. It is also revealed that during the cross-examination of CW1, the defence pleaded by the accused was that a security cheque had been issued by him, which had been misused and that he did not have any liability.

9. In Basalingappa Vs. Mudibasappa 2020 SCC OnLine SC 491 = 2019(1) L.A.R. 41 = (2019) Law Today Live Doc. Id. 10036, referring to various precedents on Section 118(a) and 139 of the Negotiable Instruments Act, Hon’ble Supreme Court summarized the principles as under:

• 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.

• 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.

• 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. 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.

• It is not necessary for the accused to come in the witness box to support his defence.

10. It is in the light of the aforesaid legal position that it is required to be seen that whether accused has been able to probabilise his defence. As is clear from the legal position as above, the accused is not required to prove his defence on the standard of proof ‘beyond reasonable doubt’ and rather, he is simply required to probabilise his defence. In order to rebut the presumption available to complainant under Section 139 of the NI Act, accused can either appear in the witness box though it is not mandatory; or he can elicit circumstances favourable to him during the cross-examination of complainant; or put forth his defence in his statement under Section 313 Cr.P.C. supported by evidence. He is not even required to lead evidence to support his defence. At the same time, accused is obliged to set up a probable defence, which should not be only a 'possible' defence. There should be some credible material or circumstances available on record, which should lead the Court to conclude that defence/explanation for issuance of dishonored cheque is probable one.

11. Perusal of the entire record reveals that neither in his statement under Section 313 Cr.P.C nor during the cross-examination of CW1, accused ever disputed his signatures on the cheque Ex.C1. Once it is so, there was a presumption u/s 139 of the Act in favour of the complainant- Bank to the effect that there was a legally enforceable debt against the accused. The onus shifted upon the accused to rebut the presumption. Simply by pleading that it was a security cheque, will not rebut the presumption. Even otherwise, security cheque is as good tender as a normal cheque. It is an integral part of commercial process entered between the parties. This court considered this aspect in Shalini Enterprise Vs. Indiabulls Financial Services Ltd., 2013 (2) Civil Court Cases 835, wherein the plea of security cheque was taken. It was held as under: -

“11. Additional plea of the petitioner that dishonour of a security cheque cannot fasten the liability on the drawer under the Negotiable Instruments Act is also not acceptable. There can be no doubt regarding the fact that the security cheque is an integral part of the commercial process entered into between the Petitioner and Respondent/Complainant. The security cheque is not only a deterrent for the drawer against dishonoring his financial commitment but can also be legally and validly utilized towards the discharging of the liability of the Drawer. It cannot by any stretch be argued that a security cheque is not handed over or issued in pursuance of any undischarged liability. To hold so would defeat the whole purpose of a security cheque. In the considered opinion of the Court, a security cheque is an acknowledgment of liability on the part of the drawer that the cheque holder may use the security cheque as an alternate mode of discharging his/its liability. Thus, the argument of the learned counsel for the petitioner that on dishonouring of a security cheque no offence punishable under section 138 of the Negotiable Instruments Act is made out.”

12. Learned trial Court has totally mis appreciated the evidence on record by observing that execution of the cheque was not proved or that legal liability was not proved, as the signature on the cheque were never disputed upon accused. Apart from this, the bank memo Ex.C2 reveal that cheque was dishonored for insufficient funds in the account of the accused and not that the cheque issued from the account of the accused, did not bear his signatures.

13. In “L.C. Goyal v Mrs. Suresh Joshi” 1999 (3) SCC 376, the cheque was returned by the bank with the only remarks “insufficient funds”. It was held by the Hon'ble Supreme Court that it clearly meant that signatures on the cheques were that of the drawer.

14. In another case titled as “Rohitbhai Jivanlal Patel v State of Gujarat and another”, 2019(2) R.C.R.(Criminal) 559 = 2019(1) L.A.R. 58 = (2019) Law Today Live Doc. Id. 10038, cheques were presented to the bank concerned within the period of their validity and were returned unpaid for the reason of either balance being insufficient or account being closed. The Hon'ble Supreme Court of India held that all basic ingredients of Section 138 as also of Sections 118 and 139 of the N.I. Act, apparent on face of record, therefore, it was required to be presumed that cheques in question were drawn for consideration and holder of the cheques received the same in discharge of the existing debt. Hon'ble Supreme Court held further that accused could not deny his signatures on the cheques in question.

15. Apart from above, as noticed earlier, accused paid an amount of Rs.50,000/- during proceedings of the complaint on 31.07.2012 clearly stating that he be given time to pay the balance amount. His statement to the effect that he be given time to pay the balance amount clearly indicated that amount of Rs.50,000/- paid by him did not discharge his complete liability. He did not dispute at that time that his liability was only to the extent of  Rs.50,000/-. This statement making payment of Rs.50,000/- by the accused, also indicates that accused had the legal liability towards the complainant.

16. In the above circumstances, the acquittal recorded by the trial Court cannot be at all sustained.

17. On account of entire discussion above, impugned judgment dated 19.09.2013 is hereby set aside. It is held that complainant- appellant proved beyond doubt that accused issue Cheque No.202612 dated 01.09.2009 for an amount of Rs.2,25,658.08 Ex.C1 from his account maintained in Bank of Punjab Ltd., Ambala Cantt, which has been dishonored on account of insufficient funds in his account. He failed to make payment despite statutory notice. As such, holding accused- respondent to be guilty under Section 138 of the NI Act, he is convicted thereunder.

18. The matter is adjourned to 02.08.2023, for hearing the respondent on quantum of sentence. Let the presence of the respondent-accused be procured by issuing bailable warrants in the sum of Rs.25,000/- with one surety in the like amount, to hear him on the quantum of sentence.

Order accordingly.

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