Rakeshkumar Roshanlal Surana vs Mr.Abdul Hakkim & Anr.

. This Appeal is against the acquittal of the Accused in case No. 3002253/SS/2013, for the offence punishable under Section 138 of the Negotiable Instrument Act (‘N.I. Act’. for short)

The facts leading to the present case are as follows-

The complainant, Rakeshkumar Surana, is a goldsmith by profession and carries on his business at Baiganwadi, Govandi, Mumbai, under the name and style of M/s. Ritik Jewellers. The accused, Abdul Hakkim, was a customer of the complainant. The complainant and the accused shared cordial and friendly relations. In the month of March 2013, the accused approached the complainant seeking financial assistance of Rs.5,00,000/-. Relying upon the trust and goodwill between them, the complainant advanced a friendly loan of Rs.5,00,000/- to the accused. The accused assured the complainant that the said amount would be repaid on or before 22.03.2013.Towards repayment of the said friendly loan, the accused issued two cheques bearing Nos. 319005 and 319006, both dated 22.03.2013, each for an amount of Rs.2,50,000/-, drawn on Kokan Mercantile Co-operative Bank Ltd., Govandi Branch, Mumbai.

After a lapse of about one month, the complainant contacted the accused and requested repayment of the loan amount. The accused instructed the complainant to present the aforesaid cheques for encashment and assured him that the cheques would be honoured. Acting upon the said assurance, the complainant presented the cheques in question in his bank account maintained with Hindustan Co-operative Bank Ltd., Govandi Branch, Mumbai, on 17.04.2013. On 20.04.2013, both the cheques were returned unpaid by the bank with the endorsement “funds insufficient”.

Thereafter, the complainant issued a statutory demand notice dated 08.05.2013 to the accused by Registered Post Acknowledgment Due, demanding payment of the cheque amounts. The accused received the said notice. Despite receipt of the statutory demand notice, the accused failed and neglected to make payment of the cheque amounts within the stipulated period. The complainant was therefore constrained to file the present complaint seeking punishment of the accused for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881, and for compensation under Section 357 of the Code of Criminal Procedure.

Process was issued against the accused for the offence punishable under Section 138 of the Negotiable Instruments Act. Upon service of summons, the accused appeared before the Court and was enlarged on bail. The substance of accusation was explained to the accused at Exhibit-6, to which the accused pleaded not guilty and claimed to be tried.

The facts on record indicate that, it is the case of the complainant that he had acquaintance with the Accused and in the year 2013 he lent a sum of Rs.5 lakhs in cash. It is his further case that Accused for repayment of the said amount issued two cheques bearing No. 319005 and 319006 for Rs.2,50,000/- each. Since, the said cheques were dishonored, a statutory notice was issued. The notice came to be replied by the Accused. Since, the Accused failed to pay the requisition amount within the stipulated period complaint came to be filed.

Before the Trial Court complainant examined himself and placed reliance on the cheques, bank memo etc., the Accused stepped in witness box and sought to prove his defence. The learned Trial Court accepted the contention of the Accused and found that the Accused was able to rebut the presumption of Section 118 and 119 of the Negotiable Instrument Act and acquitted the Accused.

Learned counsel for the Appellant strenuously drew attention of the Court to the entire record which according to him is not being rightly considered by the Trial Court. It is his argument that the Trial Court ought to have considered the evidence led by the Complainant in the form of Income Tax Return which indicate his financial capacity to lend the money. It is his grievance that the Tribunal on the basis of the admission of the Complainant of he having business to the tune of Rs.2 lakhs in the year 2001 has held that he was not in the capacity to lend the money. On these amongst other submission it is his contention that, since the Accused has failed to rebut the presumption under the Negotiable Instrument Act, the order of the acquittal deserves to be set aside and complaints need to be allowed.

The learned counsel for the Respondent/Original Accused has drawn attention of the Court to the evidence led by the Accused in the form of the bank record indicating that the cheques in question were issued in the year 2005 i.e. at the time of the transaction of lending Rs.40,000/- by the Complainant to the Accused. It is his submission that the Accused is not required to prove his case beyond reasonable doubt but it is sufficient for him to probabilise his defense.

Since, this is Appeal against the acquittal, this Court is expected to consider the finding recorded by the Trial Court unless the findings are so perverse that cannot be maintained under Section 118 and 139 of the N.I. Act, once it is established that the negotiable instrument has been issued, the same is considered to have been issued in discharge of the legally enforceable debt. The burden therefore would be upon the Accused to rebut the said presumption. In the case of Rangappa v. Mohan (2010)^{11.(2010) 11 SCC 441}, the Supreme Court clarified that the statutory presumption under Section 139 of the Negotiable Instruments Act includes the existence of a legally enforceable debt or liability. Reconsidering its earlier view in Krishna Janardan Bhat^{22.(2008) 4 SCC 54}, the Court held that once the accused admits the issuance of the cheque and their signature, it must be presumed that the cheque was issued in discharge of a debt or liability. Although this presumption is rebuttable, the burden of rebuttal lies on the accused. Thus once the accused rebuts the presumption, there is reverse burden on complainant to prove his transaction.

Here in this case though the Accused admits the execution of the cheques in question, he specifically claims in his response to the statutory notice so also before the Trial Court that the said cheques were issued at the time of transaction of loan of Rs.40,000/- in the year 2005. To support the same, he has placed reliance on the evidence i.e. bank record which indicates that the said series of the cheque pertains to the year 2005. The burden on accused to rebut presumption would be on preponderance of probability only. The evidence led by accused is sufficient to hold that this could be a case where cheques were issued during the transaction of year 2005 and hence it cannot be said that offence under section 138 of NI Act is proved against him. Pertinently, though it is now sought to be argued, on behalf of the counsel for Complainant that, this would be a wise act on the part of the Accused in issuing old cheques however no such case is made out before the trial court. Accused had entered the witness box, however, there is no cross-examination conducted of the Accused on this point. This Court therefore finds no reason to accept the said contention of the complainant. Having regard to the law on the point of scope of causing interference in the judgment of acquittal this court finds that the trial court has rightly appreciated the evidence on record and the findings so rendered cannot be termed as perverse to cause interference therein.

As a result of the above discussions, there is no merit or appeal. Hence the same stands dismissed.

At this stage learned counsel for the Appellant states that since Civil dispute is pending before the Competent Court, this order shall not come in the way of the parties. Needless to say that the findings recorded by the Criminal Court are not binding on the Civil Court.

All pending Applications are disposed of.