IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) FRIDAY, THE FOURTH DAY OF DECEMBER TWO THOUSAND AND NINE PRESENT HON’BLE SRI JUSTICE K.C.BHANU CRIMINAL APPEAL No.573 OF 2003 Between: Smt. M. Vidyavathi ..... Appellant/Complainant AND 1. Chandraiah ..... Respondent/Accused 2. The Sate of Andhra Pradesh, Rep. by its Public Prosecutor, High Court of A.P., Hyderabad. … Respondent The Court made the following: JUDGMENT: The Criminal Appeal, under Section 378 (4) of the Code of Criminal Procedure, 1973 (for short, “Cr.P.C.”), is directed against the judgment, dated 25.09.2002, in C.C.No.1599 of 2001, on the file of the learned X Metropolitan Magistrate, Secunderabad, whereunder and whereby the accused was found not guilty for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short, “the Act”), and accordingly, he was acquitted. 2. The brief facts, that are necessary for the disposal of the present Criminal Appeal, may be stated as follows: The complainant’s husband and the accused are close friends. Out of the said acquaintance, on 27.05.2000, the complainant advanced to the accused a sum of Rs.1,00,000/- and again on 29.05.2000, a sum of Rs.1,00,000/-. Further, on 12.07.2000, the complainant advanced Rs.5,00,000/- to the accused i.e., in total the accused borrowed and received a sum of Rs.7,00,000/- from the complainant on various dates towards loan for the purpose of contract works i.e., for purchase of machinery. The accused executed a promissory note for a sum of Rs.7,00,000/- on 12.07.2000 promising the complainant to repay the same by August, 2000. But the accused failed to repay the said amount. In the month of September, 2000, the accused executed an undertaking on non-judicial stamp. On several representations and remainders, the accused agreed to pay Rs.1,26,000/- towards interest. Along with the undertaking, the accused issued a cheque bearing No.105710 dated 28.03.2001, for a sum of Rs.8,06,000/- drawn on Vysya Bank, Hyderabad, which is marked as Ex.P1. When Ex.P1-cheque was presented by the complainant, it was returned with an endorsement “Insufficient funds”. Thereupon, the complainant got issued a statutory legal notice, which is marked as Ex.P3, through her advocate on 04.04.2001 demanding the payment. The accused having received the notice, got issued a reply notice, which is marked as Ex.P4, on 24.04.2001 with false allegations, but the accused failed to pay that amount. Hence, the complaint. 3. When the accused was examined under Section 251 Cr.P.C. for the offence punishable under Section 138 of the Act, he pleaded not guilty and claimed to be tried. 4. To substantiate its case, the complainant examined P.W.1 and got marked Exs.P1 to P9. 5. After closure of the complainant evidence, the accused was examined under Section 313 Cr.P.C. with reference to the incriminating material found against him in the evidence of complainant witness. He denied the same. On behalf of the accused, no evidence either oral or documentary was adduced. 6. The trial Court, after considering the evidence on record, came to the conclusion that the complainant failed to establish that she lent an amount of Rs.7,00,000/- on various dates to the accused and that the cheque in question was given for legally enforceable debt and accordingly acquitted the accused. Challenging the same, the present Criminal Appeal is filed. 7. Now, the point for determination is whether the complainant proved its case beyond all reasonable doubt for the offence punishable under Section 138 of the Act and whether the judgment of the trial Court is correct, legal and proper? 8. Learned counsel appearing for the appellant contended that the complainant advanced a total amount of Rs.7,00,000/- on four different dates to the accused; that when on two occasions, an amount of Rs.1,00,000/- each was paid to the accused, no receipt was taken because of friendship of the accused with the husband of P.W.1; that the accused also executed Ex.P8-reciept, dated 12.07.2000, duly acknowledging the receipt of total amount of Rs.7,00,000/-; that Ex.P9-Undertaking letter given by the accused would clearly go to show that the complainant lent an amount of Rs.7,00,000/- and the cheque in question was given by the accused towards discharge of legally enforceable debt, and therefore, the trial Court has committed an illegality in acquitting the accused; that the complainant has established its case beyond all reasonable doubt for the offence punishable under Section 138 of the Act, and therefore, he prays to set aside the order of acquittal. 9. On the other hand, the learned counsel appearing for the first respondent/accused contended that the case of the complainant is that she paid an amount of Rs.5,00,000/- on 12.07.2009 through cheque and demand draft and no receipts were obtained; that there is no evidence to show that the cheque and demand draft were encashed by the accused; that Ex.P9-Undertaking was fabricated and typed in the office of the complainant’s husband; that when a huge amount of Rs.1,00,000/- each on two occasions was paid, no receipt was taken by the complainant which suggests that all the documents were fabricated for the purpose of this case; that the trial Court, after elaborate consideration of evidence on record, rightly acquitted the accused, and hence, there are absolutely no grounds to interfere with the order of acquittal. 10. One of the golden principles that was passing through the web of criminal justice system is that the accused is presumed to be innocent unless contrary is proved. That presumption of innocence is further strengthened by an order of acquittal. Ordinarily, the appellate Court would be slow in interfering with the order of acquittal. The paramount consideration of the Court is to ensure that miscarriage of justice is prevented. A miscarriage of justice which may arise from acquittal of an accused person is no less than from the conviction of an innocent. In a case where admissible evidence is overlooked, inadmissible evidence has taken into consideration in acquitting the accused, a duty is cast upon the Appellate Court to reappreciate the evidence. If the impugned judgment is clearly unreasonable, it is a compelling reason of interference. 11. On this aspect, it is pertinent to refer to a decision reported in Aher Raja Khima v. State of Saurashtra[1], wherein it is held thus: “A court hearing an appeal under S.417 might be confronted with three possibilities: (i) It might come to the same conclusion as the trial court on the questions in issue, in which case, of course, it should dismiss the appeal; (ii) it might consider that the evidence was not clear and conclusive one way or the other, in which case its duty as an appellate court would be not to interfere with the judgment appealed against; and (iii) it might come to a conclusion on an appreciation of the evidence opposite to that reached by the court of first instance, in which case it would clearly be its duty in exercise of its powers under S.417 to set aside that order of acquittal.” Bearing the above principles in mind, it is to be seen whether the complainant proved its case against the accused beyond all reasonable doubt for the offence punishable under Section 138 of the Act. 12. Under Section 138 of the Act, “Where 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 punishable under Section 138 of the Negotiable Instruments Act, 1881.” To constitute an offence incorporated in the main enacting clause of Section 138 of the Act, three conditions have to be satisfied: (i) 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. (ii) the payee or the holder in due course of the cheque makes a demand for the payment of the amount by giving a notice in writing within 15 days from receiving information from the bank regarding the dishonour of cheque. (iii) the drawer of the cheque fails to make payment within 15 days from the date of receipt of notice. 13. There cannot be any dispute that the initial burden is on the complainant to establish that the cheque in question was given by the accused for legally enforceable debt or liability. After discharging that burden, the accused must plead and establish that the cheque in question was not given for legally enforceable debt in view of the presumption under Section 139 of the Act, which reads as follows: “It 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.” The word ‘unless contrary is proved’ in Section 139 of the Act would mean that there must be a pleading and evidence to substantiate the same and mere explanation is not sufficient for discharging the burden placed on the accused. 14. The evidence of P.W.1 would go to show that on 27.05.2000, she advanced an amount of Rs.1,00,000/- and again on 29.05.2000, she advanced another sum of Rs.1,00,000/- when the accused asked for a loan. On 12.07.2000, she advanced Rs.5,00,000/- to the accused. At that time, the accused promised to repay the amount after August, 2000. Thereafter, the accused executed Ex.P7-promissory note for a sum of Rs.7,00,000/-. As per the understanding, the accused executed an undertaking on non-judicial stamp and also cheque was given for Rs.8,06,000/-. When the cheque was presented, it was returned with an endorsement “Insufficient Funds”. She admitted that when she paid Rs.1,00,000/- each on 27.05.2000 and on 29.05.2000, she did not obtain any receipt. The trial Court found that P.W.1 having obtained Ex.P9-Undertaking ought to have obtained the receipt for advancing an amount of Rs.2,00,000/- on two occasions. That cannot be a ground to disbelieve the evidence of P.W.1 in view of close association of the accused with the husband of P.W.1. The fact that the husband of P.W.1 is a close friend of the accused is not in dispute. In such circumstances, advancing certain amounts without there being any document cannot be said to be improbable or unbelievable. Thereafter, Ex.P9-Undertaking was executed by the accused. 15. A perusal of Ex.P9-Undertaking would go to show that on 27.05.2000, a sum of Rs.1,00,000/-; on 29.05.2000, another sum of Rs.1,00,000/-; on 12.07.2000, a sum of Rs.1,63,948/-; and on 12.07.2000, a sum of Rs.3,36,052/-; totaling to Rs.7,00,000/- for execution of contract works has been received by the accused and that the accused also admitted that he executed a promissory note for Rs.7,00,000/- in favour of P.W.1 on 12.07.2000. He also agreed to pay Rs.1,26,000/- towards interest for eight months and he paid a sum of Rs.20,000/- towards interest. For the remaining principal and interest amount, he issued Ex.P1-cheque. Except giving a suggestion that Ex.P9-Undertaking was fabricated document and that the husband of P.W.1 obtained his signature on Exs.P1, P7, P8 and P9 on blank papers, nothing has been elicited to infer that the documents were given by the accused in blank. The evidence of P.W.1 coupled with Ex.P9 would go to show that the accused borrowed a total amount of Rs.7,00,000/- on various dates and executed Ex.P7-promissory note. Once the execution of promissory note is admitted, the presumption is that it was supported by consideration in view of the presumption under Section 118E of the Act. 16. The learned counsel appearing for the first respondent contended that P.W.1 admitted that she issued a cheque and demand draft for Rs.1,63,948/- and Rs.3,36,052/-. No receipts were filed to show that the cheque and demand draft respectively were handed over to the accused and the accused in turn encashed from the bank. P.W.1 only admitted that she has not taken any receipt for handing over the cheque and demand draft on which she advanced the amount. There was no suggestion to P.W.1 that the accused has not received the cheque and demand draft and that they were not encashed by the accused from the concerned bank. Once a fact has been stated by the witness and the same is not denied or disputed in the cross-examination, it must be said that such a fact is admitted. The statement of P.W.1 that she issued a cheque and demand draft for Rs.1,63,948/- and Rs.3,36,052/- remained unchallenged. There is no contra evidence to show that Ex.P1-blank cheque, Ex.P2-blank receipt and Ex.P9-blank stamped paper were given to P.W.1 at the time of taking some hand loan from her. The accused himself need not come to the witness box to show that he has not borrowed any amount and that he has not received the cheque and demand draft or the amount of Rs.7,00,000/- on four different dates, he can also rebut the burden by eliciting the same from complainant’s evidence by proving the fact by preponderance of probabilities. 17. In proving the case of the accused, he need not himself examine as a witness, but he can as well elicit from the evidence of the complainant by showing that he has not received the amounts. No such evidence was elicited from the cross-examination of P.W.1 to infer that he has not received an amount of Rs.7,00,000/- on four different dates as mentioned in Ex.P9-Undertaking and as testified by P.W.1 and receipts in Exs.P1 and P2. Therefore, the burden shifts to the accused and that burden has not been discharged. This aspect of the case has been completely over looked by the trial Court. 18. The trial Court has come to a conclusion that P.W.1 has no capacity to lend the amount. Capacity to lend the amount is not an ingredient for the offence punishable under Section 138 of the Act. Therefore, the complainant has established her case beyond all reasonable doubt with regard to issuance of Ex.P1-cheque for legally enforceable debt for the amounts advanced. It is not the case of the accused that he has not taken any amount in doing contract works and for the purpose of purchase of machinery. There is quite possible for the accused to borrow certain amounts from P.W.1 who is no other than his friend’s wife. Therefore, in those circumstances, the trial Court has given a perverse finding. When the amounts advanced is Rs.7,00,000/-, why the cheque was given for Rs.8,06,000/-. That was properly explained by P.W.1 that the remaining amount was towards interest. Non- taking of receipts for a sum of Rs.2,00,000/- is not a ground to disbelieve the evidence of P.W.1. Therefore, the accused is found guilty for the offence punishable under Section 138 of the Act and accordingly he is convicted of the same. 19. With regard to sentence, considering the facts that the transaction is relating for over more than a decade back; that admittedly, the husband of P.W.1 and the accused are close friends; that may be due to loss in the contracts, the accused would not have paid that amount, and it is brought to the notice of this Court that the civil suit filed basing on the promissory note was decreed, a lenient view can be taken with regard to the sentence. Hence, the accused is sentenced to pay compensation of Rs.8,06,000/- within a period of six months, failing which the accused shall undergo Simple Imprisonment for a period of six months. 20. Accordingly, the Criminal Appeal is allowed. ______________ (K.C.BHANU, J) Date: 4th December, 2009. KL [1] A.I.R. 1956 S.C. 217 (V.43 C. 45 Mar.)