IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE JURISDICDTION - # - CRIMINAL REVISION APPLICATION NO.526 OF 2007 Y.R.Reddy ... Applicant V/s Sunshind Sand Suppliers through its proprietor and Anr.. Respondents WITH CRIMINAL REVISION APPLICATION NO.527 of 2007 Y.R.Reddy ... Applicant V/s Jaimala M. Bhoir and Ors. .. Respondents WITH CRIMINAL REVISION APPLICATION NO.528 OF 2007 Y.R.Reddy .. Applicant V/s Kailash C. Patil and Anr. .. Respondents WITH CRIMINAL REVISION APPLICATION NO.529 of 2007 Y.R.Reddy .. Applicant V/s Manoj R. Patil and Ors. .. Respondents WITH CRIMINAL REVISION APPLICATION NO.530 OF 2007 Y.R.Reddy .. Applicant V/s Dhananjay Patil and Co. and Ors. ..Respondents WITH CRIMINAL REVISION APPLICATION NO.531 OF 2007 Y.R.Reddy ..Applicant V/s Chandrakant G. Bhoir and Ors. ..Respondents WITH CRIMINAL REVISION APPLICATION NO.532 of 2007 Y.R.Reddy .. ..Applicant V/s Lakshman S. Patil and Ors. ..Respondents WITH CRIMINAL REVISION APPLICATION NO.534 OF 2007 Y.R.Reddy .. Applicant V/s Rajesh M. Bhoir and Ors. .. Respondents WITH CRIMINAL REVISION APPLICATION NO.534 OF 2007 Y.R.Reddy ..Applicant V/s Kailash Sand and Dredging Co. partnership firm and Anr. ..Respondents AND CRIMINAL REVISION APPLICATION NO.535 of 2007 Y.R.Reddy .. Applicant V/s Lakshman S. Patil and Ors. ..Respondents Shri A.P.Mundargi, Senior Advocate with Anilkumar Patil for Applicants in all matters Mr.M.S.Mohite for Respondent in all matters Mr.S.S.Pednekar, APP for Respodnent no.2 in all matters. CORAM : V.C. DAGA, J. DATE : 3rd July 2008 P.C.:- 1. All these 10 Criminal Revision Applications filed by common applicant, involving common facts arise out of common evidence, though disposed of by different orders, (since different complainants were involved), were heard together and are being disposed of by this common order. Parties are referred to in their original capacity for the sake of convenience and clarity. 2. All these revision applications are directed against the order of the District Judge-3 and Additional Sessions Judge, Thane dismissing the appeal and confirming the order of conviction passed by the learned Judicial Magistrate, Thane. THE FACTS :- 3. The facts being common, are taken from the Revision Application NO.526 of 2007 - Y.R. Ready Vs. Sunshind Sand Supplies and Anr. 4. The Respondent no.1 complainant filed a complaint under Section 138 of Negotiable Instruments Act (NI Act) against the present applicant and 7 others. 5. The accused no.1 is a company registered under the Companies Act, 1956. The accused nos.2 to 8 are the directors of the accused No.1 Company. Accused Nos. 1 to 8 were prosecuted for having committed an act, constituting an offence under Section 138 of NI Act alleging that in the month of February 1999 accused No.1-Company was in need of finance. On being approached by the accused No.1 through their directors, the complainant advanced loan of RPS.26,60,000/- by a cheque No.271061 dated 15-2-1999 issued in favour of accused No.1 Company, drawn on Development Credit Bank Ltd., Thane. The accused agreed to repay the loan amount within a short period. 6. Accused No.1- Company in discharge of its liability issued a cheque bearing NO.314007 dated 5-4-2000 drawn in the name of complainant for Rs.26,60,000/- with an assurance that the cheque will be honoured. The said cheque was presented for encashment through the bank. However, it was dishonoured and returned unpaid to the complainant by the bankers of the accused with remarks "payment stopped by the drawer" on 28-6-2000. 7. The complainant issued legal notice under section 138 of N.I. Act, dated 2-7-2000 through his advocate and demanded the amount of dishonoured cheque. A notice was received by the accused. However, it was not complied with. The complainant after expiry of statutory period filed Complaint under Section 138 of NI Act against all the accused. 8. The learned Magistrate recorded verification of the complainant. The process was issued against all the accused by an order dated 17-8-2000. Subsequent to the issuance of process, the names of the accused nos.5 to 8 were dropped by an order passed on the application filed by the accused. 9. The plea was recorded against accused nos.1 to 4 on 7-12-2001. The accused pleaded not guilt and claimed to be tried. The oral evidence was adduced by the complainant and his witnesses. The defence of the accused was that of total denial of liability. In the statement under Section 313 of Criminal Procedure Code (Cr.P.C.), the accused pleaded that the false case was filed against them by the complainant. 10. The learned trial Court after hearing the parties to the complaint, by the reasoned order convicted only accused no.2 and sentenced him to suffer simple imprisonment for five months and to pay the compensation in the sum of Rs.39,45,000/-. Accused nos.3 and 4 were acquitted for want of evidence. 11. Being aggrieved by the order of the trial Court, an appeal was carried to the learned District and Sessions Court, Thane which was dismissed by the reasoned order dated 31-8-2007. 12 Being aggrieved by the aforesaid orders the present revision application is filed by the accused No.2. SUBMISSIONS 13. Mr. Mundargi, learned Senior counsel would submit that the complainants were desirous of purchasing shares of accused no.1-company. That is why he made part payment for purchase of shares. In his submission, it was not loan transaction as claimed by the complainant. According to him, the complainant was to make necessary applications for purchase of shares. He was to produce certain collateral documents. He was also to make payment of balance amount within reasonable time. However, the said complainant failed to comply the requirements. 14. The complainant in the month of March 2000, informed to the accused no.1-company that the he was not interested in complying the requirements and demanded refund of 25% of the share money and requested the company to refund. 15. According to Mr. Mundargi, the complainant was asked to return relevant documents, vouchers. He was also asked to give no claim certificate on or before 31-3-2000 to which the complainant had agreed. According to him, the complainant was made to understand that in case of his failure, he would be liable to pay balance of 25% of the share money and that he would be bound to purchase shares. According to Mr. Mundargi, the complainant agreed to this term suggested by accused No.1 Company. Having agreed by the complainant, Accused No.1-Company issued the cheque in question towards security under the signature of the accused No.2, subject to the condition that the same would be presented by him only after submissions of required documents. According to the Mr. Mundargi, the complainant failed to comply with the agreed condition as such the complainant became liable to 75% of the share money and that he was not entitled to put the cheque for encashment. That the accused No.1-Company had no option but to issue stop payment instructions since subject cheque was not returned by the complainant but while issuing such instructions, sufficient credit balance i.e. more than the cheque amount was maintained. 16. In the aforesaid back drop Mr. Mundargi, urged that there was no legal enforceable debt as such there was liability to pay. No offence under Section 138 of NI Act was therefore, committed by the applicant/accused. He further submits that when the cheque was presented sufficient credit balance was available in the bank account as such the cheque was not returned for want of sufficient funds. But it was returned because of stop payment instructions. Consequently, no offence under Section 138 NI Act could be said to have been committed by the applicant/accused. 17. Mr. Mundargi submits that had stop-payment instructions been issued without having sufficient credit balance in the account of the accused then only the provision of section 138 N.I. Act would attract. In his submission, so far as the case in hand is concerned, sufficient credit balance was available in the account to honour the subject cheque as such mere stop payment instructions cannot bring the case within the purview of Section 138 of NI Act. 18. Shri Mundargi did not press one of the contentions raised in the courts below that trial suffers from an incurable irregularity since the evidence was recorded by different Magistrates on different occasions and the judgment was delivered by the learned Magistrate, who did not record evidence led by the parties. Obviously, this contention was not pressed by him in view of series of judgments of this Court wherein this question is dealt with in detail rejecting him such contention in the case of Shivaji Sampat Jagtap V/s Halan Hiralal Arora reported in 2006(2) Bom.C.R. (Cri) 590. CONSIDERATION 19. So far as factual matrix is concerned on being asked, Shri Mundargi could not satisfy this court with respect to the alleged transaction leading to propose purchase of shares for want of evidence in this behalf. He could not point out any resolution passed by the company wherein the company had decided to sale 25% of its shares to the complainant. The applicant has not produced anything on record to show that there was any sum contract or transaction between the parties. 20. The defence of the accused about alleged non payment of 75% of share price by complainant has not been proved. Right of the accused to deny liability to pay alleged 25% share money has also not been proved. No documents are on record to show any such transaction. The complainant was not even confronted in this defence during the course of trial. Under Section 313 accused have admitted that the cheque was issued to the complainant. In absence of any probable evidence on record to support the defence of applicant both the courts below were justified in rejecting the defence canvassed by Mr. Mundargi. 21. As stated above, the defence of the accused in trial was of total denial. As held by the Apex Court in the case of State of Karnataka v/s M.V.Manjunathe Gowda and Anr. (2003) 2 SCC 188, if the defence is only of total denial, the presumption remains unrebutted. Applying this principle of law, I may mention that the presumption raised under section 139 of N.I. Act has not been rebutted by the applicant/ accused. 22. I may place it on record that in the revision petition number of grounds are raised but none of them were canvassed except one referred to hereinabove. The signature appearing on the cheques in question has not been disputed by the accused during the course of trial. 23. In the case of K.Bhaskaran v. Sankaran Vaidhyan Balan [ AIR 1999 SC 3762 ] the Apex Court held that once the signature in the cheque is admitted to be that of the accused, the presumption envisaged in Section 118 of the N.I.Act can legally be inferred to say that the cheque was made or drawn for consideration on the date which the cheque bears, Section 139 of the Act enjoins on the Court to presume that the holder of the cheque received it for the discharge of any debt or liability. The burden is on the accused to rebut the aforesaid presumption. The accused has failed to rebut this presumption as held by both the Courts below. 24. As stated by the Apex Court in the case of Hiten P. Dalal v. Bratindranath Banerjee (AIR 2001 SC 3897) the presumption available under Section 139 of the Act provides that "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 and the effect of this presumption is to place the evidential burden on the accused of proving that the cheque was not received by the complainant towards the discharge of any liability. The Supreme Court further held that both Sections 138 and 139 of the Act required that the court "shall presume" the liability of the drawer of the cheques for the amounts for which the cheques are drawn and that it introduced an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the accused and such a presumption was a presumption of law, as distinguished from a presumption of fact which describes provisions by which the court "may presume" a certain state of affairs. Presumptions are rules of evidence and do not conflict with the presumption of innocence, because by the latter all that is meant is that the prosecution is obliged to prove the case against the accused beyond reasonable doubt. The obligation on the prosecution may be discharged with the help of presumptions of law or fact unless the accused adduced evidence showing the reasonable possibility of the non existence of the presumed fact. In other words, provided the facts required to form the basis of a presumption of law exists, no discretion is left with the court but to draw the statutory conclusion, but this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary. A fact is said to be proved when, "after considering the matters before it the Court either believes it to exist or considers its existence so probable that a prudent man ought under the circumstances of the particular case, to act upon the supposition that it exists". The Supreme Court further observed that the rebuttal does not have to be conclusively established but such evidence must be adduced before the court in support of the defence that the Court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of reasonability being that of the prudent man. Earlier, the Supreme Court in the case of K.Bhaskaran v. Sankaran Vaidhyan Balan and another (1999)7 SCC 510) had observed that when the signature in the cheque is admitted to be that of the accused, the presumption envisaged in section 118 of the act can be legally inferred that the cheque was made or drawn for consideration on the date which the cheque bears. The Supreme Court had further held that Section 139 of the act enjoins on the Court to presume that the holder of the cheque received it for the discharge of any debt or liability and the burden is on the accused to rebut the aforesaid presumption. The presumption under Section 139 of the Act has the import of compulsion and the Court is required to presume, unless contrary is proved, that the holder of the cheque received it for discharge in whole or in part, of any debt or other liability. A fact is said to be proved when, after considering the matters before it, the Court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of a particular case, to act upon the supposition that it exists and that is the definition given for the word "proved" in the Evidence Act and what is required is the production of such materials on which the Court can reasonably act to reach the supposition that a fact exists. Proof of a fact depends upon a decree of probability of it having existed and the standard required for reaching the supposition is that of a prudent man acting in any important matter concerning him. This Court in the case of Yogendra Bhagatram Sachdev v. State of Maharashtra and another(supra) held that the failure to reply to the notice would raise a presumption that the accused had in fact no defence whatsoever. The case of the accused has not at all been consistent. 25 The apex Court in the case of Goa Plast(P) Ltd. v. Cnico Ursula D’Souza (supra) upheld the view held in Modi Cements Ltd. v. Kuchil Kumar Nandi (1998)3 SCC 249) that once a cheque is issued by a drawer, a presumption under Section 139 must follow and merely because the drawer issued notice to the drawee or to the Bank for stoppage of payment it will not be preclude an action under Section 138 of the Act by the drawee or the holder of the cheque in due course. 26. The Supreme Court in the above judgment observed that the said view was in consonance with the object of the legislation. On the faith of payment by way of a post-dated cheque, the payee alters his position by accepting the cheque. If stoppage of payment before the due date of the cheque is allowed to take the transaction out of the purview of Section 138 of the Act, it will shake the confidence which a cheque is otherwise intended to inspire regarding payment being available on the due date. The Apex Court further observed that the object and the ingredients particularly of sections 138 and 139 of the Act could not be ignored. Proper and smooth functioning of all business transactions, particularly,of cheques as instruments, primarily depends on the integrity and honesty of the parties. In our country, in a large number of commercial transactions, it was noted that the cheques were issued even merely as a device not only to stall but even to defraud the creditors. The sanctity and credibility of issuance of cheques in commercial transactions was eroded to a large extent. Undoubtedly, dishonour of a cheque by the Bank causes incalculable loss, injury and inconvenience to the payee and the entire credibility of the business transactions within and outside the country suffers a serious set-back. Parliament, in order to restore the credibility of cheques as a trustworthy substitute for cash payment enacted the aforesaid provisions. The remedy available in a Civil Court is a long-drawn matter and an unscrupulous drawer normally takes various pleas to defeat the genuine claim of the payee. It is now well settled that Section 138 of the Act is applicable even when a cheque is issued from an already closed account as held in N.A.Issac v. Jeemon P.Abraham and another (2005 ALL MR (Cri) 1519 (SC). 27. In the case in hand, no doubt sufficient credit balance was maintained by the accused but that by itself cannot absolve the accused from the clutches of Section 138 of the N.I.Act. If the contention canvassed by Mr.Mundargi is accepted, then it is very easy to defeat provision of Section 138 of the Act by issuing stop payment instruction maintaining sufficient credit balance. Once the cheque is issued, it must be honoured by the person issuing cheque, otherwise, the very purpose of the legislation shall stand frusted. Thus, defence canvassed is misplaced. 28. It is also not open to this Court to reappreciate the evidence and reach to different conclusion. The concurrent finding of facts of both the Courts below cannot be interfered with in the revisional jurisdiction of this Court unless they are found to be perverse or based on no evidence. (See "State of Maharashtra v. Jagmohan Singh Kuldip Singh Anand and others, 2004 CRI L.J. 4254", "Selvaraj v. State of Tamilnadu, Crimes 3 (2007) 435", "Shri Shivshankar Tulsiram Pande and others v. State of Maharashtra, 2004 ALL MR (Cri) 772" and "Keshav Mahadeo Ingole v. State of Maharashtra, 2004, 2004 ALL MR (Cri) 459)". No case is made out by the learned Senior Counsel for the applicant to entertain this revision application. 29. At this stage, the learned Council for the applicant prayed for stay of this order to approach the higher Court. The prayer made is strongly opposed by the learned Counsel appearing for the Respondent complainant. Having heard both sides, no case is made out to stay the effect and operation of this order. Prayer made in this behalf is rejected. 30. In the result, all the revision applications are dismissed in limine. JUDGE.