1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELATE JURISDICTION CRIMINAL APPLICATION NO. 4413 OF 2008 Madhukar Shankar Koshti .. Appellant Versus Pravin Maruti Aldar and another .. Respondents Mr. S. S. Patwardhan, for the Appellant Mr. Umesh R. Mankapure, for Respondent No.1, Mr. A. S. Shitole, AGP, for the Respondent-State CORAM: MRS. MRIDULA BHATKAR, J. Reserved for order on: 13th April, 2009 Order pronounced on: 28th April, 2009 J U D G E M E N T 1. An application for leave to appeal under Section 78(4) is preferred by the Applicant against the order dated 16.7.2008 passed by the 4th Judicial Magistrate, First Class, Sangli. 2. The applicant has contended that the respondent no.1- had borrowed money time to time from the applicant, totaling sum of Rs.2,90,000/-. The respondent No.1 issued the cheque of Rs.2,90,000/- towards repayment of the loan amount on 8th October, 2005. However, the said 2 cheque, when presented by the applicant in his Bank, was returned back with the remark “ fund insufficient”. The applicant, thereafter issued notice of demand under Section 138 of Negotiable Instruments Act. However, the said notice returned with remark “not claimed'. Thus, after following due procedure, the complainant, launched prosecution against the Respondent No.1 under Section 138 of N.I. Act. 3. Despite of the admission of issuance of Cheque by the accused, learned Magistrate held that it was not for the repayment of the loan amount but it was an independent transaction of the purchase of Plot from the Applicant/Complainant as the details of the hand loan were not given. Learned Trial Judge further held that the complainant has failed to prove that the debt or liability was legally enforceable and the initial burden in respect of advance hand loan was not discharged. 4. The learned counsel appearing for the complainant has submitted that the learned Magistrate has not properly considered the provisions of presumption under Section 139 of the N.I. Act. He pointed out that Section 139 contemplates a statutory presumption and the burden shifts on the accused as soon as the Complainant proves that the 3 cheque was issued by the accused. The learned Counsel submits that in the present case, the learned Trial Judge, ought not to have accepted the defence of the accused that the said cheque was issued towards payment of purchase of plot. He further submitted that as per the defence of the accused, said cheque was given in the presence of one friend- Amol. However, said Amol was not examined by the accused to substantiate his defence, hence, the burden of rebuttal of presumption was on the accused which he could not discharge. 5. Learned counsel appearing for the accused/ Respondent No.1, while opposing the application, has submitted that the accused has rebutted the said presumption by putting his defence that he had issued the cheque to purchase the plot from the complainant. He has relied on Krishna Janardhan Bhat Vs. Dattatraya G. Hegde, reported in (2008) 4 Supreme Court Cases 54. 6. In the explanation of Section 138 of the N.I. Act, the words debt or liability are not merely mentioned but they are qualified by adjective “legally enforceable”. The proof of legally enforceable liability or debt is substantive ingredient of Section 138 of the N.I. Act. The burden is on the 4 prosecution i.e. on the complainant to prove the fact that there was legally enforceable debt or liability. The complainant has to satisfy the Court, not by just making oral statement that he has given hand loan and towards repayment of the said loan, the accused has issued the impugned cheque. It is true that on number of occasions such transaction is not supported by any documentary proof. It is a simple transaction between two persons arising out of mutual faith and trust on the virtue of honesty in the human being; in such cases demand of documentary evidence is totally unrealistic and wrong. However, the evidence i.e. details of the loan amount, approximately when it was given, from where and how that money was available to the complainant are expected to be adduced. The factors viz. capacity to pay or from where the fund was arranged to have bearing over the appreciation of evidence. If the complainant fails to prove these facts, then he may lose in the Court of law. In the present case, the complainant did not adduce any such evidence on this point and therefore, the learned Judge is right in his findings. 7. On the point of rebuttal of presumption, the learned counsel relied on the ruling in the case of Krishna Janardhan Bhat Vs. Dattatraya G. Hegde, reported in (2008) 4 5 Supreme Court Cases 54. The Hon'ble Supreme Court has laid down as under: “....other principles of legal jurisprudence, namely prosecution of innocence as a human right and the doctrine o reverse burden introduced by Section 139 should be delicately balanced- Such balancing acts would largely depend upon the factual matrix of each case.....” “30. The proviso appended to the said action provides for compliance with legal requirement s before the complaint petition can be acted upon by a Court of law. Section 139 of the Act merely raises a presumption in regard to the second aspect of the matter. Existence of legally recoverable debt is not a matter of presumption under Section 139 of the Act. It merely raises a presumption in favour of a holder of the cheque that the same has been issued for discharge of any debt or other liability.” 8. In the present case the complainant has given admission that he was dealing with sell of plots and . The accused had issued blank signed cheque in favour of the complainant for the purchase of plot from the complainant. It is easy to innovate and set up imaginary or factitious transaction for the purpose of issuance of cheques. If the complainant has proved his capacity to pay such amount, issuance of cheque and the requisite procedural formalities under Section 138 of the NI Act then, there is no rebuttal by 6 such imaginary defence. Presumption, in fact filters and prohibits such hollow defence. In the present case, the defence of the accused cannot be accepted. However, the complainant could not establish legally enforceable liability or debt against the accused and hence, there is no merit in the application. Hence order of the Trial Court need not be interfered with. In the result the application for leave to appeal is rejected. ( MRIDULA BHATKAR, J.) jpc/-