*THE HON’BLE SRI JUSTICE K.G. SHANKAR +Crl.R.C.No.1469 of 2005 % 20.10.2011 Between: #Shaik Ayaz … Petitioner Vs. $Abdul Khader and another … Respondents ! Counsel for the petitioner: Sri M. Dhilip Rao Counsel for the Respondents: S. Raja Kumar for R-1 Addl. P.P. for R-2 <Gist: >Head Note: ? Cases referred: 1. 2004 (2) DCR 390 2. 1997 (2) ALT Crl. 100 3. 1998 Crl. L.J. 1397 4. 2008 Crl. L.J. 1172 (SC) 5. 2007 (5) SCC 264 THE HON’BLE SRI JUSTICE K.G. SHANKAR Crl.R.C.No.1469 of 2005 Date: 20.10.2011 Between: Shaik Ayaz … Petitioner AND 1. Abdul Khader 2. The State of A.P. rep.by P.P., High Court of A.P., Hyderabad. … Respondents THE HON’BLE SRI JUSTICE K.G. SHANKAR Crl.R.C.No.1469 of 2005 ORDER: The case came up for hearing on 28.09.2011. There was no representation for the petitioner and for the respondents. The case, consequently, was posted to next day for dismissal. On 29.09.2011, no one represented the first respondent. The learned counsel for the petitioner and the learned representative of the Additional Public Prosecutor were present. This revision is, therefore, disposed of after hearing the learned counsel for the petitioner and the learned representative of the Additional Public Prosecutor and without hearing the learned counsel for the first respondent. 2. The sole accused laid the revision. The complainant (first respondent herein) filed a case against the accused that the accused issued Exs.P.1 and P.2 cheques in discharge of subsisting debts, that the cheques bounced when presented and that the accused, consequently, committed the offence under Section 138 read with Section 142 of the Negotiable Instruments Act (the Act, for short). The trial Court found the accused guilty. The accused was sentenced to Simple Imprisonment for a period of 10 months and fine of ` 2,000/- with appropriate default sentence. The sole accused preferred Criminal Appeal unsuccessfully. Hence, the revision. 3. The sole point is whether the accused is guilty of the offence u/s.138 of the Act. The basic contention of the learned counsel for the accused is that there was no legally enforceable debt in respect of which the cheques were issued and that Section 138 of the Act has, therefore, no application. I n P. Narasimha Reddy v. D.L. Narasimha Rao[1], C.V. Ramulu, J has observed “Insofar as the legally enforceable debt is concerned, as noticed above, the very notice sent under Ex.P.6 does not refer to the complainant and further the complainant failed to bring home the guilt of the accused by adducing evidence to show that the cheque in question was issued in respect of the debt in question. Except his oral testimony and the testimony of PW.2, who is said to have been witnessed the borrowal of Rs.96,750/- by the respondent-accused, no other evidence is put forward by the appellant-complainant. So also, no documentary evidence is forthcoming to show that the cheque in question was issued in connection with the legally enforceable debt. Therefore, no case is made out by the appellant-complainant warranting interference by this Court in the judgment under appeal.” The High Court of A.P. thus adopted the view that the cheque in question was not issued in connection with the legally enforceable debt. 4. In G.B. Lingam v. Vitta Murali Krishna Murthy[2], a single Judge of this Court held that the initial burden would be on the drawee to show that the cheque was issued for the discharge of a legally enforceable debt or other liability. The Court further observed “From this, it is evident that when once the respondent takes the plea that the cheque was not issued for discharge of a legally enforceable debt or liability then the complainant is bound to prove the circumstances under which the cheque was given in his favour and that the same is issued in discharge of legally enforceable debt. Unless this initial burden is discharged by the complainant, the presumption available under Section 139 cannot be made use of against the respondent. The proceedings being criminal in nature the accused is not expected through his defence by examining the witnesses and placing the evidence at his command. The case of the prosecution has to stand or fall on the evidence let in by it. The accused person is given liberty to cross-examine the witnesses examined in support of the prosecution case, to dislodge the version of the prosecution or to prove that the prosecution’s version is not true. The Court is entitled to record the findings after taking into consideration the totality of the circumstances and evidence let in on behalf of the complainant that the cheque was not given to the holder in discharge of a legally enforceable debt. When once such a finding is recorded by the Court, on the basis of the evidence let in by the prosecution, the question of the accused person letting in evidence in support of his defence does not arise.” The High Court took the view that the presumption u/s.139 of the Act could not be used against the accused. 5. It may be recalled that Chapter XVII of the Act came into the statute book, through Central Act 66 of 1988 and became enforceable with effect from 01.04.1989. Chapter XIII of the Act deals with the Rules of Evidence in respect of the Act. Section 118 of the Act, which is the first section under Chapter XIII provides as many as seven presumptions under the Act. Inter alia, the Court shall presume that any cheque was drawn for consideration and was transferred for consideration as the case may be. Nevertheless, Section 139 of the Act was incorporated by the Central act 66 of 1988. Section 139 of the Act also deals with presumption. Section 139 of the Act reads: “Presumption in favour of holder:- 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.” 6. Albeit a statutory presumption is created u/s.139 of the Act that the cheque was issued in discharge of a subsisting debt, the preponderance of judicial view is that the onus is upon the holder of the cheque to show that the cheque was issued in discharge of a subsisting debt. It was held in G.B. Lingam’s case that the initial burden rests upon the drawer. Though it was held initially by the Supreme Court in Modi Cements Ltd., v. Kuchil Kumar Nandi[3] that once a cheque is issued by the drawer, a presumption u/s.139 of the Act would arise and that the drawer, however, would be entitled to unsettle the presumption by rebuttal evidence, it was held in Krishna Janardhan Bhat v. Dattatraya G. Hegde[4] that the existence of legally recoverable debt is not a matter of presumption. 7. The Supreme Court has clarified in S. Kamala v. M.J. Vidyadharan[5] that if the accused by preponderance of evidence has discharged the burden contemplated by Section 139 of the Act, the burden would shift to the complainant to prove his case beyond reasonable doubt without the help of Section 139 of the Act. Thus, it is primarily for the drawee to show that the cheque was issued in connection with a subsisting debt. The onus on the part of the drawer is in the nature of proof in a civil case, viz., establishing a fact by preponderance of evidence, whereas the complainant shall have to establish his case beyond reasonable doubt. In this backdrop, the facts of the present case deserve to be examined. 8. Inter alia, the learned counsel for the accused contended that the trial Court and the appellate Court did not issue any finding regarding the legally enforceable debt and that PW.1 did not speak about the existence of a legally enforceable debt. I may clarify that PW.1 is the complainant while DW.1 is the accused. PW.1 also examined PWs.2 and PW.3, who are the Manager of the Andhra Bank, and the Assistant Accountant of Cooperative Urban Bank, Guntur. Primarily, there is no dispute regarding the issuance of cheques under Exs.P.1 and 2 for ` 2,00,000/- and ` 30,000/- respectively, nor is there any dispute regarding the bouncing of the cheques. 9. PW.1 claimed that the accused borrowed a hand loan of ` 2,30,000/- in connection with the purchase of a house and that the accused issued Exs.P.1 and 2 cheques drawn on Cooperative Urban Bank Limited, Guntur. It may also be noticed that primarily there is no contention that the accused did not issue Exs.P.1 and 2 cheques and that they were forgery. The learned counsel for the accused did not raise such a contention before me. His main contention is that there was no allegation much less proof from the complainant that the cheques were in discharge of a legally enforceable debt. It is his further contention that the trial Court and the appellate Court also did not give any finding that the cheques were in discharge of a legally enforceable debt. 10. I am afraid that in view of the evidence of PW.1, the contention of the accused is not correct. PW.1 claimed that the accused borrowed ` 2,30,000/- in connection with the purchase of house property and that he, consequently, issued Exs.P.1 and 2 cheques. When PW.1 contended that the cheques were issued regarding the amount borrowed by the accused, I consider that PW.1 was deposing that the cheques were issued in discharge of a legally enforceable debt. 11. The limited question, therefore, is whether such a debt, in fact, existed. As rightly submitted by the learned counsel for the accused, although PW.1 deposed that the accused borrowed ` 2,30,000/- and issued Exs.P.1 and P.2, there is no proof that the accused borrowed the monies as alleged by PW.1. 12. How did PW.1 pay the accused? Was it in the shape of cash or cheques? If the money was borrowed by the accused for the purchase of a house, there must have been a sale deed in favour of the accused at about the time of the borrowal of ` 2,30,000/- by the accused from PW.1. PW.1 neither gave the details nor did he produce any proof relating to the circumstances in which the cheques were issued. 13. Further, the two cheques under Exs.P.1 and P.2 were not contemporaneous with the borrowal. The alleged borrowal of ` 2,30,000/- was on 15.02.2001. More than a year thereafter, on 11.04.2002 and 08.03.2002, Exs.P.1 and P.2 cheques were allegedly issued. I am afraid that the very fact that the borrowal was more than a year prior to the issuance of cheques would show that the cheques were not in discharge of the borrowals made by the accused as nexus between the borrowal and issued cheques has not been established. 14. I am afraid that PW.1 invited the burden upon himself by stating the circumstances in which the cheques were issued. Once PW.1 deposed that the cheques were issued in connection with the amount borrowed by the accused on 15.02.2001, it is for PW.1 to establish that the amounts were borrowed on 15.02.2001. As already stated, PW.1 did not produce any proof regarding the alleged borrowal on 15.02.2001. Thus, the very basis of the claim u/s.138 of the Act that the cheques were issued in connection with a subsisting debt has not been made out by the complainant. 15. Unfortunately, the trial Court and the appellate Court went by the assumption that in view of the evidence of PW.1 it should be presumed that the cheques were issued in connection with the subsisting debt. They have lost sight to the fact that the alleged borrowal has not been established by PW.1 in any manner barring for the ipsi dixit of PW.1. I wholly agree with the contention of the learned counsel for the accused that the appreciation of evidence and the consequent conclusion by the trial court and the appellate Court were erroneous and are liable to be set aside. The complainant failed to establish that Exs.P.1 and P.2 were in connection with the subsisting debt. 16. Accordingly, the Criminal Revision Case is allowed. The conviction and sentence recorded by the trial court and confirmed by the appellate Court are set aside. It is found that the complainant failed to establish that the cheques were issued in connection with a subsisting debt, so much so, the guilt of the accused for the offence u/s.138 of the Act is not made out. The petitioner/accused, consequently, is acquitted of the offence u/s.138 of the Act. ________________ K.G. SHANKAR, J Date: 20.10.2011 Note: L.R. Copy marked. (B/o.) Isn [1] 2004 (2) DCR 390 [2] 1997 (2) ALT Crl. 100 [3] 1998 Crl.L.J. 1397 [4] 2008 Cr.L.J. 1172 (SC) [5] 2007 (5) SCC 264