-1- IN THE HIGH COURT OF BOMBAY AT GOA CRIMINAL APPEAL NO. 61 OF 2008 AND CRIMINAL APPEAL NO. 62 OF 2008 Peter Mascarenhas, aged about 36 years, s/o/ Luis Mascarenhas, r/o. House no. 60, Near Sai Baba Temple, New Vaddem, Vasco da Gama, Goa. …... Appellant V e r s u s 1. Monsabre Ashley Oswald Dias, major, s/o. Joao Francisco Ivo Paulo Dias, r/o. House No. 475, Chinchinim, Salcete, Goa. 2. Anita Maria Dias, w/o. Monsabre Ashley Oswald Dias, major, r/o. House No.475, Chinchinim, Salcete, Goa. 3. The State of Goa, through the Public Prosecutor, High Court Altinho, Panaji, Goa. .….. Respondents Mr. S. D. Lotlikar, Senior Advocate with Mr. H. Kankonkar, Advocate for the Petitioner. Mr. Arun Bras De Sa, Advocate for the Respondent nos. 1 and 2. CORAM: R. M. SAVANT, J. DATE : 11 th February, 2010. JUDGMENT The above Criminal Appeals involves identical facts and raise common questions and are therefore heard together. Criminal Appeal no. 61 of 2008 is filed challenging the Judgment and Order dated 04.08.2008 whereas the Criminal Appeal no. 62 of 2008 is filed challenging the Judgment -2- and Order dated 25.06.2008. By the said Judgment and Orders, the Appeals filed by the Respondents herein came to be allowed by the Sessions Court and the conviction of the Respondents by the learned J.M.F.C., Vasco da Gama, under Section 138 of the Negotiable Instruments Act, 1881, (Act, for short), came to be set aside. 2. The subject matter of the two complaints are the cheque nos. 273342 and 273343 for Rs.3,00,000/- each drawn on ICICI Bank, Margao Branch, which have been dishonoured on account of “stop payment advice/insufficiency of funds”. 3. The parties would be referred to as per their status in the Trial Court and the facts in Criminal Appeal No. 61 of 2009 would be referred to for convenience sake. 4. The Appellant herein is the original Complainant, who has filed the said complaints. It is the case of the Complainant that the Accused nos. 1 and 2 i.e. the Respondent nos. 1 and 2 herein, were engaged in the business of property development and that one Joao Francisco Ivo Paulo Dias and Lidvina Dias, who were the parents of Accused no.1, have given a Power of Attorney to the Accused nos. 1 and 2 in respect of their property “Doncotto” bearing Survey no. 85/8 and 84/2 of Village Cuncolim, Salcete, Goa. It is the case of the Complainant that the Accused nos. 1 and 2 had financial problems in developing their property and hence they approached the Complainant to -3- help them by arranging money with a promise to refund the same with interest. It is further the case of the Complainant that Accused nos. 1 and 2 are his relations and known to him, and therefore, in order to help them, the Complainant collected money from various persons including his own money and granted them a loan of Rs.12,00,000/- on 24.10.2005 and that they executed an Agreement of Payment dated 24.10.2005 in his favour and had issued four cheques bearing nos. 273341, 273342, 273343 and 273344 dated 24.12.2005, drawn on ICICI Bank, Margao Branch, for an amount of Rs.3,00,000/- each duly signed by them drawn on their account towards the repayment of the said amount received by them as loan. It is the case of the Complainant that all the four cheques dated 24.12.2005 were issued under the signature and drawn on their account by them. The cheque bearing no. 273342 was presented by the Complainant through his banker Canara Bank, Vasco branch, for encashment on 04.04.2006. The said cheque was dishonoured on account of payment stopped by drawer/insufficient funds. Intimation to the said effect was received by the Complainant from the Canara Bank on 12.04.2006. Similar was the case with the cheque which is the subject matter of the companion Appeal. It is the case of the Complainant that he was surprised to learn from the intimation dated 12.04.2006 given by his bank that the said cheques issued by the Accused nos. 1 and 2 under their signatures on their bank account, had bounced due to insufficiency of funds. The Complainant on such dishonour of the cheques, issued demand notices on the Accused nos. 1 and 2 as also their parents Joao Dias and Lidvina Dias and inspite of the said demand notices which were received by them, they -4- have replied to the said notices but have not paid the amount due and, therefore, the Complainant was constrained to file the complaints under Section 138 of the said Act. 5. On service being effected on the Accused, they appeared in the said complaint. Substance of the accusation came to be explained to the Accused. The accused pleaded not guilty. The complaint, therefore, proceeded to trial. 6. The Complainant examined himself and four other witnesses namely Cw.2 Mangala Dessai, Cw.3 Sachin Khandekar, Cw.4 Mahesh Kolhapur and Cw.5 Rohit Chopra and produced various documents i.e. the dishonoured cheques at exhibit 26, the Return advice at exhibit 27, Debit advice at exhibit 28, Agreement of Payment at exhibit 29, Demand notice, courier receipts numbering four at exhibit 30 collectively and Reply sent by the Accused to the demand notice at exhibit 31. The statement of the Accused under Section 313 Cr.P.C. came to be recorded and the Accused pleaded not guilty and claimed to be tried. On behalf of the Accused, the Accused no.2 examined herself as Aw.1 and produced documents being certified copy of deposition of the Complainant in Criminal case no. 894/OA/NIA/06/A so also deposition of Mangala Dessai in Criminal Case no. 895/OA/NIA/06, deposition of Mahesh Kolhapur in Criminal Case no. 895/OA/NIA/06, deposition of Sachin Khandekar in Criminal case no. 895/OA/NIA/06 so also deposition of Complainant in Criminal case no. 895/OA/NIA/06, which certified copies were -5- exhibited as 65 collectively. The copy of the letter issued to the ICICI Bank by Accused no.1 at exhibit 66, copy of the visiting card of Nikhil Kumar at exhibit 67 and xerox copy of the Navhind Times dated 03.08.2005 and 19.08.2005 at exhibit 68 collectively. The Trial Court, i.e. the learned J.M.F.C., Vasco da Gama, on the basis of the evidence that was before him and principally on the ground that the issuance of the cheques and the execution of the Agreement of Payment Ex.29 as also the receipt by the Accused and, taking into consideration the evidence of Cw.2, Cw.3 and Cw.4, came to a conclusion that an amount of Rs.12,00,000/- was advanced by the Complainant to the Accused and, therefore, the cheques in question were towards the discharge of a debt or liability and that the Complainant has proved the existence of the debt and liability. The Trial Court, therefore, convicted the Accused under Section 138 of the said Act and sentenced them to undergo simple imprisonment for a period of three months and to pay a compensation of Rs.3,25,000/- in each of the complaints in default, to undergo simple imprisonment for a further period of three months. 7. Aggrieved by the said Judgment and Orders convicting them, the Accused filed Criminal Appeals being nos. 67/2007 and 11/2008 in the District and Sessions Court, South Goa, Margao. The said Criminal Appeals filed by the Accused were allowed by the learned Sessions Judge-2 and learned Addl. Sessions Judge-3, South Goa, Margao, by impugned Judgment and Orders dated 04.08.2008 and 25.06.2008. As a consequence, the conviction of the Accused by the Trial Court was set aside by the lower -6- Appellate Court. The lower Appellate Court came to a conclusion that the Accused have, on the basis of the material on record and relying upon the circumstances, successfully rebutted the presumption under Section 139 of the said Act and have probabilised their defence and since the Complainant thereafter has not discharged the burden which shifted to him to prove the existence of the debt or liability of the Accused. The Accused were entitled to acquittal and the Appellate Court, therefore, has set aside the conviction of the Accused. 8. As indicated above, the Judgment and Orders acquitting the Accused are the subject matter of the above two Appeals. 9. I have heard Shri S. D. Lotlikar, learned Senior Counsel appearing for the Appellants in both the Appeals and the learned Counsel Shri Arun Bras De Sa for the Respondents i.e. the original Appellants in both the Appeals. 10. On behalf of the Complainant, it was submitted by Shri Lotlikar, the learned Senior Counsel, that the lower Appellate Court has erred in setting aside the conviction of the Accused on the ground that the Accused have successfully rebutted the presumption under Section 139 of the said Act. The learned Senior Counsel submitted that in view of the admission of the Accused as regards the issuance of the cheques by them and the execution of the Agreement Ex.29 and the receipt, there was no question of any presumption -7- as the aforesaid documents were proof by themselves and, therefore, no evidence contrary to the terms of the said Agreement exhibit 29, could be led to contradict the said document. The learned Senior Counsel further submitted that it was the duty of the Appellate Court to scrutinize the Judgment of the Trial Court by coming in close quarters with it. The Appellate Court could not have set aside the findings of the Trial Court without coming to a conclusion that the findings of the Trial Court were contrary to the evidence on record. The learned Senior Counsel further submitted that one of the grounds on which the Accused were acquitted was the non examination of Advocate Rajan Naik on account of which, the Lower Appellate Court has drawn an adverse inference. The learned Senior Counsel submitted that, in view of the variance in the case of the Accused which is evidenced by the reply of the Accused to the demand notice, by the contents of the affidavit in evidence, and thereafter, by the deposition of Aw.1 in cross, the examination of Advocate Rajan Naik was not at all necessary apart from the fact that the said Rajan Naik could not have been examined for he had put in his Wakalatnama for the Complainant in the criminal cases initially but had thereafter withdrawn his appearance. The learned Senior Counsel for the Appellant relied upon the Judgment of the Apex Court reported in (2009) 2 S.C.C. 513 in the matter of Kumar Exports vs. Sharma Carpets, in support of his submission that the accused have not rebutted the presumption under Section 139 as warranted in law. The learned Senior Counsel submitted that considering the evidence on record, the Judgments in both the Appeals of the lower Appellate Court were unsustainable and, therefore, interference by this Court in its appellate -8- jurisdiction is warranted. 11. Per contra, it is submitted by Shri D' Sa, the learned Counsel for the Respondents that the Trial Court had erred in convicting the Accused on a erroneous premise that the presumption under Section 139 of the Act is also as regards the existence of a debt. The learned Counsel submitted that the presumption under Section 139 of the Act is only to the effect that the cheques have been issued in discharge of a debt or liability, but the existence of a debt or liability has to be initially proved by the Complainant, only thereafter the onus shifts to the Accused and if the Accused is able to discharge the burden of rebutting the presumption under Section 139 of the Act by raising a probable defence, that the burden shifts back to the Complainant. The learned Counsel submitted that the Trial Court having proceeded on an erroneous presumption by merely taking into consideration the Agreement and the Receipt without appreciating the evidence which had come on record in its proper perspective, had erroneously convicted the Accused, which conviction, according to the learned Counsel, has been rightly set aside by the Appellate Court. The learned Counsel further submitted that the evidence on record overwhelmingly leads to only one conclusion that the amount of Rs.12,00,000/- was in fact never advanced to the Accused. The learned Counsel submitted that the Appellate Court was right in drawing an adverse inference against the Complainant for the non examination of Advocate Rajan Naik in view of the fact that it was the case of the Complainant himself that the amount was paid to the Accused in the presence of the said Rajan Naik and -9- also in view of the fact that it was the case of the Accused that the cheques were handed over to Advocate Rajan Naik. The learned Counsel for the Accused submitted that the view taken by the lower Appellate Court cannot be said to be perverse on the basis of the evidence which is on record. 12. I have heard the learned Counsel for the parties and bestowed my anxious considerations to the rival contentions. In my view, it would be relevant to refer to the Judgment of the Apex Court reported in 2008 (4) S.C.C. 54, in the matter of Krishna Janardhan Bhat vs. Dattatraya G. Hegde on the point of presumption under Section 139 of the Act. Paragraphs 29, 30, 31, 32, 33, 34, 35, 36 and 41 of the said report are material and are re- produced herein under : “29. Section 138 of the Act has three ingredients viz: (i) that there is a legally enforceable debt; (ii) that the cheque was drawn from the account of bank for discharge in whole or in part of any debt or other liability which presupposes a legally enforceable debt; and (iii) that the cheque so issued had been returned due to insufficiency of funds. 30. The proviso appended to the said section provides for compliance with legal requirements before a 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. -10- 31. The courts below, as noticed hereinbefore, proceeded on the basis that Section 139 raises a presumption in regard to existence of a debt also. The courts below, in our opinion, committed a serious error in proceeding on the basis that for proving the defence the accused in required to step into the witness box and unless he does so he would not be discharging his burden. Such an approach on the part of the courts, we feel, is not correct. 32. An accused for discharging the burden of proof placed upon him under a statute need not examine himself. He may discharge his burden on the basis of the materials already brought on record. An accused has a constitutional right to maintain silence. Standard of proof on the part of an accused and that of the prosecution in a criminal case is different. 33. In Bharat Barrel & Drum Mfg. Co. v. Amin Chand Payrelal interpreting Section 118 (a) of the Act, this Court opined : (SCC pp.50-51, para 12) “ 12. Upon consideration of various judgments as noted hereinabove, the position of law which emerges in that once execution of the promissory note is admitted, the presumption under Section 118(a) would arise that it is supported by a consideration. Such a presumption is rebuttable. The defendant can prove the non-existence of a consideration by raising a probable defence. If the defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the plaintiff who will be obliged to prove it -11- as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument. The burden upon the defendant of proving the non- existence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies. In such an event, the plaintiff is entitled under law to rely upon all the evidence led in the case including that of the plaintiff as well. In case, where the defendant fails to discharge the initial onus of proof by showing the non-existence of the consideration, the plaintiff would invariably be held entitled to the benefit of presumption arising under Section 118(a) in his favour. The court may not insist upon the defendant to disprove the existence of consideration by leading direct evidence as the existence of negative evidence is neither possible nor contemplated and even if led, is to be seen with a doubt.” 34. Furthermore, whereas prosecution must prove the guilt of an accused beyond all reasonable doubt, the standard of proof so as to prove a defence on the part of an accused in “preponderance of probabilities”. Inference of preponderance of probabilities can be drawn not only form the materials brought on record by the parties but also by reference to the circumstances upon which he relies. 35. A statutory presumption has an evidentiary value. The question as to whether the presumption whether stood rebutted or not, must, therefore, be determined keeping in view the other evidence on record. For the said purpose, stepping into the witness box by the -12- appellant is not imperative. In a case of this nature, where the chances of false implication cannot be ruled out, the background fact and the conduct of the parties together with their legal requirements are required to be taken into consideration. 36. In M. S. Narayana Menon v. State of Kerala it was held that once the accused in found to discharge his initial burden, it shifts to the complainant. … 41. Mr. Bhat relied upon a decision of this Court in Hiten P. Dalal v. Bratindranath Banerjee wherein this Court held; (SCC pp.24-25, paras 22-23 ) “22. ....... 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 adduces evidence showing the reasonable possibility of the non-existence of the presumed fact. 23. In other words, provided the facts required to form the basis of a presumption of law exist, 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 -13- man ought, under the circumstances of the particular case, to act upon the supposition that it exists'. Therefore, 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'.” 13. The said Judgment, therefore, lays down a proposition that Section 139 of the Act raises a presumption that the cheque had been issued for discharge of a debt or liability and that the existence of legally recoverable debt is not the matter of presumption under Section 139 of the said Act. The said Judgment further lays down that whereas the prosecution must prove the guilt of the Accused beyond reasonable doubt, the standard of proof so as to prove the defence on the part of an Accused is preponderance of probabilities. The inference of preponderance of probabilities can be drawn not only from the material brought on record, but also by reference to the circumstances upon which he relies. The rebuttal by the Accused does not have to be conclusively adduced but such evidence has to be adduced by him 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 probability being that of a prudent man. It is on the touchstone of the aforesaid Judgment of the Supreme Court that the material on record in the instant case would have to be siffed and it would have to be seen whether the -14- Accused has rebutted the presumption under Section 139 of the said Act. The evidence in respect of the Complainant having collected Rs.12,00,000/- from various persons which he allegedly advanced to the Accused, would have to be seen. In this respect, evidence of Cw.1, Cw.2, Cw.3 and Cw.4 is material. 14. Coming to the evidence of Cw.1, the said Cw.1 has in his cross examination stated that the statement in his affidavit in evidence that the Accused nos. 1 and 2 are his relations, is not correct. Therefore, the Cw.1, has started with this initial discordant note. It is also stated by Cw.1 in his cross examination, that the amount of Rs.12,00,000/-, which he advanced to the Accused was accumulated by him by collecting Rs.6,00,000/- from one Mangala Dessai, Rs. 3,00,000/- from one Sachin and Rs.2,00,000/- from Mahesh and Rs.1,00,000/- from his personal savings. It would be pertinent to note that he has also stated that he has not given any sort of written document to the said persons as a security or in acknowledgment of having received the said amount. He has further stated that he has to return only the principal amount meaning thereby, that he was not required to pay any other amount to the aforesaid persons. Taking the said statement of the Complainant, it is impossible to believe that such a large amount of money was lent by the persons to the Complainant which was to be returned without interest and without the said persons taking any receipt from the Complainant of having taken the said amount. It would also be pertinent to note that in the Agreement exhibit 29, it has been stated that the said amount has been raised by the Complainant from “friend”, however, in his deposition, he has stated the -15- names of the aforesaid four persons who are his friends. Significantly, the said Agreement, wherein the word “friend” finds place, has been drafted by an Advocate and, therefore, it is impossible to believe that when so many persons had allegedly lent the money to the Complainant, the Advocate would use the word “friend” rather than “friends”. This, in my view, is a circumstance which casts a doubt as regards the lending of money by the said persons to the Complainant. 15. The evidence of the said three persons, Cw.2-Mangala, Cw.3- Sachin and Cw.4-Mahesh would have to be considered. In so far as Mangala/Cw.2 is concerned, she has stated that in the third week of October 2005, the Complainant had approached her for a loan of Rs.6,00,000/- as he wanted to help one of his relations. Upon his request, she gave him the money out of the Confra money (some sort of a kitty) of which she is the President. She has further stated that the Complainant had informed her that this amount was given by him to the Accused. In her cross examination, it has come on record that the Complainant is also member of the Confra but he could not borrow as he had already taken a loan from the said Confra and hence he requested her to take the loan in her name. The said witness after stating that the entry regarding the loan of Rs.6,00,000/- is taken in the books of account,