: 1 : IN THE HIGH COURT OF BOMBAY AT GOA. CRIMINAL APPEAL NO. 17 OF 2009 AND CRIMINAL APPEAL NO. 28 OF 2009 Sandeep Shirodkar, Aged about 50 years, Indian National, Resident of Radhakrishna Niwas, New Vaddem, Vasco-da-Gama, Goa. ... Appellant V e r s u s 1. Shankar Dhawaskar, Aged about 50 years, Indian National, Resident of H.No.15, Sarvan, Dhavaskar Waddo, Bicholim Goa. 2. State ... Respondents Mr. A. D. Bhobe, Advocate for the Appellant. Mr. Arun Bras De Sa, Advocate for the Respondent No.1. CORAM: R. M. SAVANT, J. Dated: 24th February, 2010. : 2 : JUDGMENT: 1. The above criminal Appeals involve common facts and raise a common issue and are therefore heard and disposed of together. Criminal Appeal No. 17 of 2009 is filed challenging the judgment and order dated 26.9.2008 passed by the learned Additional Sessions Judge-3, South Goa, Margao, by which the judgment and order dated 8.5.2008 passed in Criminal Case No. 1199/OA/NIA/06/B by the learned J.M.F.C., Vasco-Da-Gama, convicting the Respondent No.1/Accused came to be set aside. 2. Criminal Appeal No. 28 of 2009 is filed challenging the judgment and order dated 25.9.2008 passed by the learned Additional Sessions Judge-3, South Goa, Margao, by which the judgment and order dated 8.5.2008 passed in Criminal Case No.1200/OA/NIA/06/B by the learned J.M.F.C., Vasco-Da-Gama, convicting the Respondent No.1/Accused came to be set aside. The subject matter of the two complaints are the cheque bearing No.13840 for Rs. 10,00,000/- drawn on UTI Bank Vasco-Da-Gama and the cheques bearing Nos. 13838 and 13839 for Rs. 15,00,000/- and Rs.10,00,000/- drawn on UTI Bank, Vasco-Da- : 3 : Gama. The said cheques have been dishonoured for insufficiency of funds giving rise to the filing of the complaints under Section 138 of the Negotiable Instrument Act ( for short “the Act”). 3. The parties would be referred to as per their status in the Trial Court. The facts in Criminal Appeal No. 17 of 2009 would be referred to for the sake of convenience. 4. The Appellant herein is the original complainant who has filed the said two complaints. It is the case of the complainant that the accused was in urgent need of money for his business for which he had approached the complainant upon which the complainant and one Vassudev Surya Parab had allegedly advanced to the accused various sums as follows :- 1. Rs.5,00,000/- on 12.5.2005 2. Rs.5,00,000/- on 27.5.2005 3. Rs.5,00,000/- on 10.6.2005 4. Rs. 3,00,000/- on 10.7.2005 5. Rs.3,00,000/- on 14.8.2005 6. Rs.3,00,000/- on 13.9.2005 : 4 : 7. Rs.3,00,000/- on 9.10.2005 and 8. Rs.8,00,000/- advanced by Shri Vassudev S. Parab on the guarantee and surety of the complainant. 5. It is the case of the complainant that in discharge of his liability, the accused issued three cheques bearing Nos. 13838 dated 5.1.2006 for Rs.15,00,000/-, 13839 dated 7.1.2006 for Rs.10,00,000/- and 13840 dated 9.1.2006 for Rs. 10,00,000/-, all drawn on UTI Bank, Vasco Goa. As mentioned hereinabove, the cheque bearing No.13840 dated 9.1.2006 for Rs.10,00,000/- is the subject matter of the complaint involved in Appeal No.17 of 2009. The said cheque on presentation by the complainant with his bank was dishonoured for insufficient funds. The complainant thereafter issued a demand notice to the accused. However, since the accused failed to comply with the said notice, a complaint which came to be numbered as Criminal Case No. 1199/OA/NIA/06/B, came to be filed by the complainant. The learned J.M.F.C., was pleased to issue process against the accused, the accused appeared in the matter. The substance of accusation was explained to the accused to which the accused pleaded not guilty. The complainant examined two witnesses in support of his case and closed his evidence. The statement of the accused was recorded : 5 : under Section 313 of the Criminal Procedure Code. The Respondent No.1/accused examined himself and one witness in support of his case. 6. The Trial Court on the basis of the evidence that was before her and principally relying upon the Acknowledgement of Debt dated 4.1.2006 and the receipts at Exhibit 30 Colly came to a conclusion that the complainant had advanced the said sum of Rs.35,00,000/- to the accused and the accused had issued the cheques which were dishonoured towards the discharge of the said liability of the accused. The learned J.M.F.C., therefore convicted the accused under Section 138 of the Negotiable Instruments Act and sentenced him to undergo 15 days simple imprisonment and ordered him to pay Rs.10,00,000/- to the complainant by way of compensation under Section 357 of the Criminal Procedure Code, in default of payment of the compensation, the accused to undergo further six months simple imprisonment. In the second complaint i.e. Criminal Case No. 1200/OA/NIA/06/B the accused is convicted and sentenced to pay Rs.15,00,000/- to the complainant by way of compensation being the cheque amount and to undergo 15 days simple imprisonment, in default of payment of the compensation : 6 : the accused to undergo six months simple imprisonment. 7. Aggrieved by the conviction by the J.M.F.C., by her judgment and order dated 8.5.2008, the accused filed Criminal Appeals being Criminal Appeal No. 34 of 2008 and Criminal Appeal No. 35 of 2008. The said Criminal Appeals were allowed by the learned Additional Sessions Judge-3, South Goa, Margao, and resultantly the conviction of the accused was set aside. The lower Appellate Court came to a conclusion that the accused on the basis of the material on record and relying upon the circumstances has successfully rebutted the presumption under Section 139 of the said Act and thereby probabilised his defence and since the complainant thereafter has not discharged his burden which shifted on him to prove the existence of a debt or liability of the accused, the accused was entitled to be acquitted. The lower Appellate Court, therefore, as mentioned hereinabove set aside the conviction of the accused by the learned J.M.F.C., in both the complaints. The aforesaid judgment and orders passed by the lower Appellate Court i.e. Additional Sessions Judge-3, South Goa, Margao, are the subject matter of the above two Appeals. : 7 : 8. I have heard learned Counsel for the Appellant/Complainant Shri A. D. Bhobe and the learned Counsel Shri Arun Bras De Sa for the Respondent No.1/Accused. The learned Counsel for the complainant at the outset fairly submitted that the learned J.M.F.C. has not weighed and evaluated the evidence on record whilst recording a finding as regards the guilt of the accused. The learned Counsel fairly submitted that the learned J.M.F.C. has merely recorded her conclusion without a proper evaluation or appreciation of the evidence. However, the learned Counsel submitted that if the lower Appellate Court was of the view that there was no proper appreciation or evaluation by the Trial Court, the lower Appellate Court should have remanded the matter back to the Trial Court for a de novo consideration. The learned Counsel for the complainant further relying on the Acknowledgement of Debt dated 4.1.2006 and the receipts at Exhibit 30 Colly submitted that the complainant has discharged his burden and, therefore, the cheques being issued in discharge of a debt or liability was proved by the complainant. The learned Counsel lastly submitted that there is no proper evaluation of the evidence also by the lower Appellate Court and, therefore, this Court should interfere in its Appellate jurisdiction and set aside the : 8 : acquittal of the accused. 9. Per contra, it is submitted by Shri Arun Bras De Sa, the learned Counsel for the Respondent No.1/Accused that the Trial Court had erred in convicting the accused on an 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, then the burden shifts back to the complainant. According to the learned Counsel for the Respondent No.1/Accused, the Trial Court by merely taking into consideration the Acknowledgement of Debt dated 4.1.2006 which is not even relied upon in the complaint as filed and the receipts at Exhibit 30 colly which are produced only at the time of the cross examination of the complainant, has convicted the accused without evaluating and appreciating the evidence which had come on record in its proper : 9 : perspective. The learned Counsel submitted that in the absence of such evaluation and appreciation of the evidence by the Trial Court, the lower Appellate Court was right in setting aside the conviction as the lower Appellate Court has gone threadbare into the evidence and has recorded its findings only thereafter. The learned Counsel submitted that the complainant has failed to prove by evidence that the said amount of Rs.35,00,000/- was advanced to the accused. The learned Counsel further submitted that the lower Appellate Court was right in drawing an adverse inference against the complainant for the non production of income tax returns. The learned Counsel lastly submitted that the view taken by the lower Appellate Court in the context of the evidence which is on record cannot be said to be perverse or improbable and therefore no interference was called for with the orders of acquittal. 10. Before proceeding further it would be necessary to see the averments made in the complaint filed by the complainant i.e. Appellant abovenamed. Apart from the fact that the complaint contains the statement of the various amounts allegedly advanced to the accused by the complainant and the said Vassudev S. Parab, the complaint is conspicuously silent as regards : 10 : any reference to the partnership business between the accused and the complainant or to the Acknowledgement of Debt or to the receipts. In fact in the cross examination of the complainant, it has come on record that the receipts were not relied upon in the complaint in view of the fact that the said receipts were with his Advocate. Therefore, save and except mentioning the amounts which were advanced to the accused by the complainant and the cheque issued by the accused which was dishonoured, the complaint does not contain any other details which have come in the cross examination of the complainant. This fact therefore would have to be borne in mind while adjudicating the above Appeals. The complainant examined himself. It would therefore be necessary to refer to the evidence of the complainant (PW1). He has deposed that the accused had borrowed various sums which have been mentioned in the earlier part of this order and had also borrowed a sum of Rs. 8,00,000/- from Vassudev S. Parab. PW1 has further deposed that the accused had agreed to repay the same with interest. The total amount borrowed by the accused according to the complainant was Rs.35,00,000/-. The complainant has relied upon the receipts at Exhibit 30 Colly which according to the complainant have been issued by the accused acknowledging : 11 : the receipt of each amount on the date mentioned in the receipt. The second witness PW2 Vassudev Parab has supported the case of the complainant in respect of the various amounts advanced by the complainant and has stated that he had personally advanced an amount of Rs.8,00,000/- to the accused. The aforesaid evidence therefore prima facie leads to a conclusion that the accused had borrowed the amounts as claimed by the complainant and it is towards its repayment that he had issued the three cheques in question total amounting to Rs.35,00,000/-. At this stage, it would be relevant to refer to the judgment of the Apex Court reported in 2008 (4) SCC 54, in the matter of Krishna Janardhan Bhat V/s 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 reproduced 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 : 12 : (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. 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 is 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) : 13 : “ 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 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 : 14 : 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 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 is 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 : 15 : 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 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'.” : 16 : 11. It would also be relevant to refer to the judgment of this Court reported in 2008(1) Mh.L.J. (Cri.) 517, in the matter of Vinay Parulekar V/s Pramod Meshram. Para 14 of the said judgment is material and is reproduced herein under :- “ Upon consideration of various judgments as noted hereinabove, the position of law which emerges is that it is not necessary of the accused to disprove the existence of consideration by way of direct evidence. Inference of preponderance of probabilities can be drawn not only from the materials on record but also by reference to the circumstances upon which he relies. The accused can raise a probale defence from the material brought on record by him, so also by the complainant himself. Though it is obligatory on the Court to raise presumption contemplated under Section 118, 238 and 139 in every case. Where the factual basis for raising of the presumption has been established, what is needed for the accused is to raise a probable defence or that the consideration”. 12. In so far as the judgment of the Apex Court is concerned, the said judgment lays down a proposition that the Section 139 raises a presumption that the cheques have been issued for the discharge of a debt or liability and that the existence of legally enforceable debt is not a matter of presumption under : 17 : 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 judgment of the Apex Court followed by this Court in the judgment ( supra ) that the material on record in the instant case would have to be siffed and it would have to be seen whether the accused has rebutted the presumption under Section 139 of the said Act. 13. In the said context the defence raised by the accused would have to be considered, it is the defence of the accused that he and the complainant were business partners of the firm registered in the name of M/s Kulmaya Mineral and : 18 : Transport Contractors. The said firm was established on 8.6.2005 and was registered on 10.6.2005. It is the case of the accused that he is illiterate. It is further his case that all the cheques were lying in the office of the firm and he does not know how the complainant obtained the signatures on the said cheques and how he came into the possession of the same. It is the case of the accused that the receipts produced at Exhibit 30 Colly are fabricated. It is further the case of the accused that in the course of the partnership business the complainant has obtained his signatures on the cheques and the papers when he was looking after the business of the said firm. The accused in the course of his deposition has produced the register of partnership at Exhibit 52 issued by the Registrar of Firms which proved that the accused, complainant and the said Vassudev S. Parab had entered into a partnership in the name of M/s Kulmaya Mineral and Transport Contractors. The said register further revealed that the said firm was established on 8.6.2005 and was registered on 10.6.2005. The Deed of Partnership was also produced at Exhibit 53. It discloses that the accused had invested Rs.10,000/-, the complainant Rs.3,00,000/- and the said Vassudev S. Parab Rs.50,000/- and that the said partnership was constituted to carry : 19 : on the business of resale of iron ore and transport contractor and allied activities. The said register further discloses that the accused is a resident of Sarvan Dhawaskar Vaddo, Bicholim Goa, that the complainant is a resident of Radhakrishan Niwas, Vasco- Da-Gama, Goa, and that Vassudev S. Parab is a resident of Madapai, Marcel Goa. The register of partnership and the Deed of Partnership disclose that the principal place of business of the firm was Radhakrishnan Niwas, New Vadem, Vasco-De-Gama i.e. the residential address of the complainant. It is undisputed that the account of the firm was opened in the UTI Bank at Vasco branch. The aforesaid evidence therefore demonstrates that the accused, complainant and the said Vassudev Parab were the partners in the said firm of M/s Kulmaya Mineral and Transport Contractors and that the complainant was to look after the accounts and paper work of the said firm since the accused was illiterate and therefore could not be expected to personally look after the accounts or do other paper work. These facts are conspicuously absent in the complaints. It would be also pertinent to note that in terms of clause 11 of the Partnership Deed, the partners were entitled to raise funds by way of loans from banks, financial institutions, themselves, relatives and friends. : 20 : 14. The said clause therefore indicates that the firm was entitled to raise funds by