1 IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA Cr. Appeal No. 559 of 2001. Judgment reserved on:01.09.2008. Decided on: September 11th, 2008. ____________________________________________________________ State Bank of India. ……..Appellant. Versus Anil Kumar Sharma. …..Respondent. Coram Hon’ble Mr. Justice Surinder Singh, J. Whether approved for reporting1? Yes. For the appellant : Mr. Ashwani K. Sharma, Advocate. For the respondent : Mr. K.D. Sood, Advocate. ____________________________________________________________ SURINDER SINGH,J : The appellant has assailed the acquittal of the respondent, passed in Criminal Case No.65/3 of 2000/96, decided on 03.03.2001 by the learned Chief Judicial Magistrate, under Section 138 of the Negotiable Instruments Act, in short “the Act”. In brief, the facts giving rise to the instant appeal are that M/s Wadhwa Pharmochem (Pvt.) Limited, Kala Amb had obtained cash credit financial facility from the appellant bank, as such, its raw material, semi finished and finished goods stood hypothecated with the bank aforesaid. The respondent Company was duty bound to deposit its sale proceeds in the cash credit limit. According to the appellant, M/s Wadhwa Pharmochem Pvt. Ltd., had sold their products to the respondent vide Bill No.18-A for Rs.3,50,003.50 paise and vide Bill No.20-A for Rs.4,43,535.30 paise, total Whether reporters of the Local papers are allowed to see the judgment? Yes. 2 Rs.7,93,538.80 paise on 3.2.1996. The goods were dispatched through the transport Company and the documents were routed through the appellant-bank. The goods could not be obtained by the respondent without obtaining the documents from the appellant bank on the deposit of the requisite amount, but it is alleged that on the request of M/s Wadhwa Pharmochem Pvt. Ltd., the appellant bank purchased the aforesaid Bills amounting to Rs.7,93,538.80 paise and made 75% payment to the Company against the said bills. On his assurance that the bills would be retired by the respondent before taking the delivery of the goods from the Transport Company, but the respondent managed the delivery of the goods from the Transport Company in connivance with the consigner Company M/s Wadhwa Pharmochem Pvt. Limited and sent the cheque No.978960 for Rs.7,93,538.80 paise on 8.6.1996 drawn in the Indian Overseas Bank, New Delhi in the name of M/s Wadhwa Pharmochem being the price paid against two bills with the assurance that the same would be honored by the appellant bank as and when it would be presented. The cheque was delivered by M/s Wadhwa Pharmachem to the appellant bank on 10.6.1996 for collection. Since the appellant bank had already purchased the bills for the cheque amount by depositing 75% of the amount in the account of M/s Wadhwa Pharmachem, the appellant bank became the holder of the cheque in question for consideration in due course. The cheque aforesaid was sent for the collection to the Indian Overseas Bank, but it was received back by the appellant-bank with the endorsement “not arranged 3 for” as there was no money to honour the cheque in the accounts of the respondent. Faced with the aforesaid situation, the appellant bank issued a statutory notice of 15 days to the respondent on 10.7.96 and requested him to pay the cheque amount. Since the respondent failed to repay the amount to the appellant bank, hence a complaint was filed under Section 138 of the Act in the court of Additional Chief Judicial Magistrate, Nahan on 16.8.1996. After the preliminary evidence and finding a prima-facie case against the respondent, the summonses were issued. The respondent Anil Kumar Sharma being the proprietor of M/s Crown Traders was put to notice of accusation for the offence aforesaid. He denied the allegations and claimed trial. The appellant bank led its evidence, respondent was examined under section 313 Cr.P.C and led his evidence. At the end of trial, the respondent was convicted for the offence charged and sentenced to undergo rigorous imprisonment for a period of one year and to pay fine of Rs. 8 lac. In default of payment of fine, he was directed to undergo further rigorous imprisonment for one year. Feeling aggrieved and dissatisfied by the impugned judgment of conviction and sentence, the respondent challenged it in appeal before the learned Sessions Judge. During the pendency of the appeal, the respondent filed an application for additional evidence under Section 311 Cr.P.C. contending that the cheque in question was for consideration and sought to produce some 4 documents and examine witness, it was allowed and the conviction and sentence passed by the Additional Chief Judicial Magistrate was set-aside and the case was remanded back to the learned chief Judicial Magistrate to decide it afresh in accordance with law after obtaining the evidence from the respondent. Prosecution witness Shri S.S. Randhawa witness was recalled in evidence and examined with reference to the record of the appellant bank. The arguments were heard and the respondent was acquitted on the ground that the appellant-bank could not establish beyond all reasonable doubt that the impugned cheque Ex.P1 issued for a sum of Rs.7,93,538.80 paise was issued to discharge his legal and enforceable liability. The complainant bank challenged the acquittal of the respondent in this appeal. The leave to appeal was granted. Shri Ashwani Kumar Sharma, learned counsel for the appellant-bank has vehemently argued that the learned trial court has confused the whole issue with respect to Bills No.18 and 18-A and Bills No.20 and 20-A on the erroneous belief and further that in fact the cheque Ex.P1 pertained to bills No.18 and 20 and not 18-A and 20-A pertaining to the year 1995 and later bills have no concern with the present dispute. Though bill Nos.18-A and 20-A were referred to by M/s Wadhwa Pharmochem Pvt. Ltd., in letters Exts.P11 and P12, but it was clarified by PW1 S.S. Randhawa in his subsequent statement recorded on 17.2.1998 but his testimony was not appreciated in the right perspective by the learned trial court, which result into miscarriage of justice. Further that the filing 5 of suit subsequently for the recovery of an outstanding amount against M/s Wadhwa Pharmochem Ltd. Before the Debt Recovery Tribunal was on a different cause of action, it has nothing to do with the present matter. On the other hand Shri K.D. Sood, learned counsel for the respondent has supported the findings of the acquittal arrived at by the learned trial court and urged that two views are possible from the evidence on record, the benefit of favorable view to the accused has to be given to him. It is also argued that the cheque in question was proved to be without consideration, and the legal presumption attached to it as per the Act stands rebutted by preponderance of probabilities, therefore, there are no grounds to interfere with the impugned judgment of acquittal. I have given my thoughtful consideration to the rival contentions of the parties and have meticulously examined and reappraised the evidence on record. As already stated above, originally the case of the appellant bank has been, the cheque Ex.P1 was issued by M/s Wadhwa Pharmochem Pvt. Ltd., to discharge the legal and enforceable liability, as M/s Wadhwa Pharmochem has sold their product to the respondent vide Bill No.18-A dated 31.1.1996 for Rs.3,59,003.50 paise as well as vide Bill No.20-A dated 3.2.1996 for a sum of Rs.4,43,535.30 paise and dispatched the goods through transport Company and routed the documents through the complainant bank, as such the respondent issued a Cheque Ex.P1 as price of the goods to M/s Wadhwa Pharmochem Pvt. Ltd., and on the 6 request of M/s Wadhwa Pharmochem Pvt. Ltd., appellant bank purchased the aforesaid bills as stated above. The respondent has not disputed the issuance of cheque Ex.P1 for a sum of Rs.7,93,538.80 paise, however, the defence raised by the respondent is that it was a post-dated cheque issued in favour of M/s Wadhwa Pharmochem Pvt. Ltd., as a security for the supply of 1100 Kgs. Mebendazole (Ex.D1) and vide letter Ex.D2 M/s Wadhwa Pharmochem Ltd., had acknowledged the receipt of post dated cheque Ex.P1 for the above amount aforesaid against part payment of the supply of Mebendazole and assured the supply by 3.6.96, but the order for its supply was subsequently cancelled vide letter Ex.D3 dated 6.6.96, as the quality of the sample of the aforesaid item was not found satisfactory, as such the respondent had made the request to return the cheque vide letter Ex.D4 dated 25.6.96, M/s Wadhwa Pharmochem Ltd., in response to letter Ex.D2 informed the respondent that cheque aforesaid had already been presented for clearance with State Bank of India, Kalama Amb, and it would be returned as soon as they would get it back. Further letter Ex.P12 dated 10.6.1996 referred to the about cheque No.928960 dated 6.6.1996 for Rs.7,93,538.90 paise (Ex.P1) having been issued by the respondent, for the bills No.18-A and 20-A whereas the appellant bank later produced on record the Bills No.18 and 20 as against their original case set up for 18-A and 20-A and no copies of the Bill of 18-A and 20-A were even placed on record. 7 PW1 S.S. Randhawa, the Branch Manager of the appellant bank in his earlier statement testified that the cheque was issued for Bills No.18-A and 20-A dated 31.1.1996 and 3.2.1996 for discharging its liability by the respondent. Further vide legal notice Ex.P2 dated 10.7.1996 sent through its Advocate by the appellant bank requested the respondent to pay the amount of Rs.7,93,538.80 paise within 15 days from the receipt of the notice, but the appellant did not specify against which liability the cheque in question was issued. If this notice is read with the statement of PW1 S.S. Randhawa, it makes crystal clear that it is with respect to Bill Nos.18-A and 20-A. After the remand of the case finding itself at a tight corner, in his statement dated 17.1.2001 Shri S.S.Randhawa when re-examined, totally backed out from the earlier contentions made in the complaint and his statement and took U-turn that the disputed bills were Ext.A/3 and A/1 which are bills No.18 and 20 were alleged to have been purchased from M/s Wadhwa Pharmochem Pvt. Ltd., for which they had paid 75% amount to the said concern and further that no payment to the extent of 75% qua the amount of bills No. 18-A and 20-A were ever credited to their account and there was no distinct entry regarding the payment in their account. However, in his cross-examination conducted by the learned counsel for the appellant-bank, he stated that the letter Ex.P12 was wrongly given by M/s Wadhwa Pharmochem Pvt. Ltd. Whereby they had made the reference of Bills No.18-A and 20-A which was credited to their accounts since there was no distinct entry regarding this payment, but again this 8 statement appears to be prima-facie incorrect as the letter aforesaid (Ex.P12) makes the distinct entry of bills No.18 and 20 dated 15.11.1995 and 19.11.1995 with respect to sum of Rs.2,92,001.50 paise and Rs.2,20,497.35 paise respectively and the Bills No.18-A and 20-A have been distinctly shown as aforesaid in the name of the respondent. Further, Shri Yash Pal Jain (DW1) of M/s Wadhwa Pharmochem Pvt. Ltd., has caused a severe dent to the case of the appellant Bank, by admitting the case of the respondent that the cheque Ex.P1 was taken by them as a security amount and proved his letters Exts.D2 to D4 which substantiated the plea of respondent. He has also proved the letter of confirmation Ex.D5 dated 19,9,96 whereby it was certified to him that there were no dues towards the respondent and M/s Wadhwa Pharmochem Limited owed all liabilities of the appellant bank against the bounced cheque. Thus the above facts which have emerged from the evidence, the legal presumption attached to the cheque stands rebutted. It has been held in M.S. Narayana Menon Alias Mani vs. State of Kerala and Another [(2006)6 Supreme Court Case 39] that the presumption both under Sections 118(a) and 139 of the Act are rebuttable in nature. For rebutting such presumption, what is needed is to raise a probable defence. Even for the said purpose, the evidence adduced on behalf of the complainant could be relied upon. It is not necessary for the defendant to disprove the existence of consideration by way of direct evidence. The standard 9 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 the accused relies. The accused need not disprove the presumption case in its entirety. Moreover, the onus on an accused is not as heavy as that of the prosecution. It may be compared with that on a defendant in a civil proceeding. Thus, the accused is only required to discharge the initial onus of proof. He is not necessarily required to disprove the prosecution case. In the given facts and circumstances of the case, the respondent accused has been able to probablise the defence and has successfully discharged the initial burden. The evidence on record gives rise to two views and view which was favourable to the accused respondent was rightly weighed in his favour by the learned trial Court. For the foregoing reasons, I do not find any substance in the instant appeal worth interfering into the impugned judgment of acquittal, recorded by the learned trial court. The appeal sans merit, accordingly dismissed. The respondent is discharged of his bail bonds entered upon by him at any stage during the proceedings of the case. Send down the records. (Surinder Singh), Judge. September 11, 2008. (Pds)