1 IN THE HIGH COURT OF BOMBAY AT GOA CRIMINAL APPEAL NO. 3 OF 2007 1. Mahesh Chandaikar, s/o. Dr. Mohan Chandaikar, Major, businessman, Indian National, R/o of Flat No.8, Furtado Building, Chicalim, Goa. .... Appellant Versus 1. Dattaram Chandaikar, s/o. Tato Chandaikar, major, retired, Indian National, r/o. Flat No.8, Andrew's Residency, Opp. K.T.C. Bus Stand, Vasco da Gama Goa. 2. The State of Goa, through the Public Prosecutor, High Court, Panaji Bench, Goa. ..... Respondents Mr. S. D. Lotlikar, Senior Advocate with Mr. Ryan Menezes, Advocate for the appellant. Mr. N. Sardessai, Advocate for the respondent No.1. Mr. C. A. Ferreira, Public Prosecutor for the respondent No.2. Coram :- A. P. LAVANDE, J. Date of reserving the judgment :- 8 th Decem ber, 2008 Date of pronouncing the judgment :-18 th December,2008. JUDGMENT : 1. By this appeal, the appellant takes exception to the 2 judgment and order dated 21.08.2006 passed by the Additional Session Judge, South Goa, Margao in Criminal Appeal No.25/2006 by which the judgment and order dated 09.06.2006 passed by the Judicial Magistrate, First Class, Vasco in Criminal Case No.821/OA/NIA/2005 has been set aside. The learned Magistrate convicted the respondent No.1 for the offence under Section 138 of the Negotiable Instruments Act (“The Act” for short) and sentenced him to undergo imprisonment for a period of 3 months and to pay compensation of Rs.5,50,000/- to the complainant/ appellant and in default to undergo simple imprisonment for a period of 3 months. The appellant is the complainant and the respondent No.1 is the accused in the case before the learned Magistrate. The parties shall, hereinafter, be referred to as per their status before the learned Magistrate. 2. In nutshell, the case of the complainant is as under : The accused issued cheque dated 26.05.2005 drawn on State Bank of India, Vasco branch for an amount of Rs. 5 Lacs towards the payment of his share received by the accused by way of sale of the property. The complainant presented the said cheque for payment, but the same was returned by the Bank with a memo with remark 'payment stopped by the drawer' and the same was intimated to the complainant on 26.05.2005. Thereafter, the complainant sent a demand notice dated 3 21.06.2005 to the accused demanding the payment of said cheque within 15 days. The said notice was received by the accused on 21.06.2005, but the accused failed to pay the amount. The accused sent reply dated 30.06.2005 denying that the said cheque was issued towards the payment of the share of the complainant. 3. The complainant examined two witnesses including himself as P.W.1 and Advocate Rajkumar Naik as P.W.2. The accused examined himself in defence. 4. The learned Magistrate did not accept the defence of the accused since the accused had admitted his signature on the cheque and held that the accused has not rebutted the presumption under Section 139 of the Act. The learned Magistrate did not accept the defence of the accused that he had issued a blank cheque in favour of the complainant for carrying out development in the property on the ground that it was a case of the accused himself that he had done major improvements in the property and was looking after the same and as such the possibility of the accused issuing a blank cheque to the complainant, was ruled out. The learned Magistrate also relied upon the fact that during the period from 07.08.2004 till 29.01.2005, the amount in the bank account of the accused, was in the range of Rs.1,000/- to 2,000/- and on 24.05.2005, the accused had deposited Rs.5 Lacs in his account and, therefore, the 4 question of the accused giving a blank cheque to the complainant in order to carry out development in the property, did not arise. The learned Magistrate held that the defence of the accused was false and concocted. The learned Magistrate also relied upon the fact that this defence was not taken in the reply dated 30.06.2005 sent on behalf of the accused to the notice sent by the complainant before filing of the case. The learned Magistrate also held that the deposit of Rs.5 Lacs on 24.05.2005 led credence to the case set up by the complainant that the cheque for Rs. 5 Lacs was given towards the share of the complainant in the property which was sold. The learned Magistrate, therefore, held that the complainant had proved that the cheque was issued to discharge legally enforceable liability. Consequently, the learned Magistrate convicted and sentenced the accused as above. 5. The learned Additional Session Judge did not accept the defence version that the accused had issued a blank cheque to the complainant for carrying out development in the property. However, the learned Judge held that the exact shares of the parties, were not mentioned in the sale deed and the complainant had come out with the story that the cheque was issued towards his share for the first time in his cross-examination. The learned Judge also held that the agreement which was alleged by the complainant, pursuant to which the complainant claimed that the cheque was issued, was opposed to public 5 policy, since it was with a view to avoid tax and therefore, the said agreement was void under Section 23 of the Contract Act. The learned Judge, therefore, held that there was no legally enforceable debt and the accused had rebutted the presumption under Section 139 of the Act. Consequently, the learned Judge acquitted the accused of the offence under Section 138 of the Act. 6. Mr. Lotlikar, learned Senior Counsel appearing for the appellant/ complainant submitted that both the Courts below having not accepted the defence version that the cheque was issued by the accused to the complainant for carrying out development, the presumption under Section 139 of The Act, operates and the Appellate Court was not entitled to make out a case which is not made out by the accused. According to learned Counsel, the findings given by the learned Magistrate, are perfectly justified and, therefore, the Lower Appellate Court ought not to have interfered with the judgment and order of conviction and sentence, which was passed after considering the entire evidence led by the parties. Mr. Lotlikar submitted that the fact that the accused did not mention in his reply dated 30.06.2005 that the cheque was issued for carrying out development in the property, is an important factor which goes against the accused in as much as this defence has come up for the first time in the cross-examination of the complainant. Mr. Lotlikar pointed out that even in the said reply, it is not the case of 6 the accused that a blank cheque was given to the complainant, but the accused admitted issuance of cheque for Rs.5 Lacs while denying that it was given towards the share of the complainant. According to the learned Counsel, the agreement pursuant to which the cheque was given, cannot be termed as illegal. Moreover, schedule to the sale deed, does not mention about the shares. It is the case of the complainant that the transaction was entered into at the instance of the accused and as such there was no question of the complainant avoiding to pay tax. According to the learned Counsel, the reasons given by the learned Magistrate for convicting the accused, cannot be faulted. Therefore, the impugned judgment and order passed by the Additional Session Judge, is liable to be set aside and the judgment and order passed by the learned Magistrate, is liable to be maintained. 7. Per contra, Mr. Sardessai, learned Counsel appearing for the respondent No.1/ accused submitted that no interference is called for by this Court with the impugned judgment and order in as much as the Lower Appellate Court has correctly appreciated the legal and factual position and has acquitted the accused. He further urged that neither in the complaint nor in examination-in-chief or by putting the suggestion to the accused, the complainant has suggested that his share was 50 % in the property which was sold. Moreover, the sale deed dated 30.06.1987 by which the father of the complainant and the accused purchased the 7 property, has not been produced on record to demonstrate that the share of the complainant, was 50 %. Moreover, the sale deed produced on record discloses that Manisha M. Chandaikar, the sister of the complainant has been shown as confirming party and there is absolutely no explanation as to why she was made a confirming party. The learned Counsel submitted that since the complainant had chosen not to produce original sale deed dated 30.06.1987 to prove that his share was 50 %, adverse inference has to be drawn against the complainant. In support of this submission, the learned Counsel placed reliance upon the judgment of Apex Court in Kundanlal Rallaram Versus Custodian, Evacuee Property reported in 1961 SC 1316 and M. S. Narayana menon alias Mani Versus State of Kerala reported in (2006)6 SCC 39. The learned Counsel further urged that since the complainant had come up with a specific case that the cheque was issued towards the share of the complainant in the property sold, the complainant was bound to prove the same and since he has failed to prove the same, the learned Additional Session Judge was justified in holding that presumption under Section 139 of The Act, stood rebutted. In support of this submission, the learned Counsel relied upon the judgment in the case of K.P.O. Moideenkutty Hajee Versus Pappu Manjooram and another reported in (1996) 8 SCC 586. The learned Counsel further urged that the case set up by 8 the complainant is inadmissible in evidence in view of bar under Section 91 and 92 of the Indian Evidence Act. According to the learned Counsel, since the sale deed mentions that an amount of Rs.18 Lacs as mentioned in the schedule II of the sale deed, has been paid to the vendors and since Rs. 4 Lacs were paid to the complainant, the complainant cannot contend that he has half share in the property for which he was entitled to receive Rs.9 Lacs and therefore, the cheque was towards his share in the property. According to the learned Counsel, the case set up by the complainant, is inconsistent with the sale deed and, therefore, the evidence led by the complainant that the cheque was issued towards his share, is not admissible in evidence. In support of this submission, the learned Counsel relied upon the judgment in the cases of Mula Sahakari Sakhar Karkhana Ltd. Versus State Bank of India and another reported in (2005) 4 All M.R. 875 and Bhandari Construction Company Versus Narayan Gopal Upadhye reported in (2007) 3 SCC 163. Mr. Sardessai further submitted that the alleged agreement pursuant to which the complainant claims that the accused issued the cheque, is opposed to public policy and, therefore, void under Section 23 of the Contract Act. In support of this submission, the learned Counsel relied upon Section 4 of the Income Tax Act, which is charging section and placed reliance upon the judgment in the case of 9 Commissioner of Income Tax Versus Balubhai Nanubhai (Huf) reported in 1996(220) Gujarat Income Tax Reports 334 and Chowgule and Company Ltd. Versus Commissioner of Income Tax and others reported in 1992(195) Bombay Income Tax Reports 810. The learned Counsel further submitted that the parties are not entitled to contract themselves out of the Statute and placed reliance upon the judgment of Allahabad High Court in Madan Mohan Ramchander Rao reported in AIR 1935 All. 619. According to the learned Counsel, the object of agreement pursuant to which the cheque was issued, was unlawful and was opposed to public policy and, therefore, void. The learned Counsel has placed reliance upon the judgment of the Apex Court in Ratanchand Hirachand Versus Askar Nawaz Jung reported in (1991) 3 SCC 67, Mcdowell and Company Ltd. Versus Commercial Tax Officer reported in 1985(154) Income Tax Reports SC 148 and Canbank Finance Services Ltd. Versus Custodian and Others reported in (2004) 8 SCC 355. 8. The learned Counsel further placed reliance on the judgment in the case of Krishna Janardhan Bhat Versus Dattatray Hegde reported in (2008) 4 SCC 54 in which the Apex Court had held that the Criminal Court must be on the guard to see that merely on the application of presumption as contemplated under Section 139 of The Act, the same may lead to injustice or mistaken conviction. Lastly, Mr. 10 Sardessai submitted that the view taken by the Lower Appellate Court, is a possible view and in view of the settled principle that if two views are possible, no interference is warranted in appeal against the acquittal. The learned Counsel placed reliance on the judgment of the Apex Court Kamla S Versus Vidhyadharan M.J. and another reported in 2007 (5) SCC 264. 9. In rejoinder, Mr. Lotlikar, learned Senior Counsel appearing for the complainant / appellant submitted that when the cheque was issued, the burden is on the accused to prove that there was no legally enforceable debt and even if, the complainant does not prove his case, the same is irrelevant. In support of this submission, the learned Counsel relied upon the judgment of the Apex Court in the case of Bharat Barrel and Drum Manufacturing Company Versus Amin Chand Payrelal reported in AIR 1999 SC 1008 and K. Bhaskaran Versus Sankaran Vaidhyan Balan and another reported in AIR 1999 SC 3762. The learned Counsel further submitted that Sections 91 and 92 of the Evidence Act, are not attracted since the agreement pursuant to which the cheque was issued, is not in consistent with the sale deed nor there is any material on record to show that by the said agreement either party actually evaded the tax. The learned Counsel further submitted that the agreement cannot be said to be either opposed to public policy or illegal since no provision of Income Tax Act, is circumvented by the 11 said agreement. The learned Counsel, therefore, submitted that the impugned judgment and order is liable to be set aside. 10. I have considered the submissions made by the learned Counsel for the parties and perused the record and the judgments relied upon. 11. In view of the rival submissions, following points arise for determination in the present appeal : i) Whether the cheque issued by the accused to the complainant, was towards legally enforceable debt ? ii) Whether the agreement pursuant to which the cheque was issued, is opposed to public policy and as such, is illegal ? iii) Whether the case set up by the complainant, is inadmissible in terms of Sections 91 and 92 of the Evidence Act ? 12. There is no dispute that the sale deed dated 20.05.2005 was executed by the complainant and the accused along with Mrs Shobhawati, the wife of the accused in respect of the properties bearing Survey Nos. 175/1 and 181/2 situated at Pernem and sale deed was executed before Sub-Registrar, Pernem on 23.05.2005. The said properties were sold to one Subhash Chavda and in the sale deed, Mrs. 12 Manisha Chandaikar has been shown as confirming party. The sale deed discloses that an amount of Rs.14 Lacs was paid to the accused.. In the sale deed, there is no mention about the shares of the vendors or whether the confirming party had any share in the property. It is the case of the complainant that the accused represented to him that instead of paying Rs.9 lacs to the complainant at the time of execution of sale deed, if an amount of Rs.14 Lacs is paid to the accused, the accused being a senior citizen, would be benefited. In cross- examination, the complainant stated that the sale deed as on the date, was valid and on the date of execution of sale deed, he was aware that the amount of Rs.9 Lacs to which he was entitled, was not mentioned in the sale deed. He added that the accused had promised to give him Rs.5Lacs and also promised to execute some document and specified why he was giving the cheque of Rs.5 Lacs and hence, he signed the deed. The complainant denied the suggestion that a blank undated cheque was deposited with him which was to be used by him for withdrawal of money to carry out developments in the property. He also admitted that in terms of the sale deed Exh.21, the accused was not even liable to pay any amount to him, but he voluntarily stated that as per oral agreement between him and the accused, he was to get his share of Rs.9 Lacs and on the date of the execution of the sale deed, Rs. 4 Lacs were paid to him and towards balance amount of Rs. 5 Lacs, the cheque was issued by the accused. 13 13. The accused in his examination-in-chief, stated that he had major share in the property and one blank cheque was given to the complainant somewhere in the month of January. He further stated that when they purchased the property jointly, there was no other person entitled for any share and the complainant was not entitled for the half share in the said property. In cross-examination, the accused stated that he had no proof that he had done improvements in the property by spending huge amount. He also denied the suggestion that he did not have major share in the said property. He also denied that he had received Rs.14 Lacs and he had agreed to pay the complainant Rs.5Lacs towards his share in the property. He also denied the suggestion that he had informed the complainant that in order to save the tax he had changed the mode of payment being a senior citizen and no tax can be charged upon receiving the payment in his name. 14. The first question which arises for consideration is, whether the cheque was issued by the accused to the complainant towards his share in the property, which was sold. Upon scrutiny of the evidence led by the complainant and the accused in the light of the defence taken by the accused, I am of the opinion that the complainant has been able to establish that the cheque was issued by the accused to the complainant towards his share in the property which was sold by 14 sale deed dated 20.5.2005 which was executed before Sub-Registrar, Pernem on 23.05.2005. There are two clinching circumstances which lead credence to the case set up by the complainant. Firstly, in the reply dated 30.06.2005 sent by the accused to the notice issued by the complainant before filing of the case, the accused only denied that the cheque was issued towards his share. In the notice, the accused neither denied the execution of the agreement nor stated that a blank cheque was issued to the complainant for carrying out development in the property. Paras 2 and 3 of the reply sent by Advocate D. P. Agni on behalf of the accused, are relevant. They read thus : 2. With reference to para 1 of your notice, my client specifically denies that the said cheque of Rs.5,00,000/- issued to your client was towards the payment of his share of the sale of property, received by my client, as alleged. My client specifically denies that it is legally enforceable debt and liability to your client, as alleged. 3. With reference to para 2 of your notice, my client has instructed me to state that your client was not entitled to deposit the said cheque of Rs.5,00,000/- issued by my client to your client for realisation on 26/5/2005 or at any time. However, having done so, without the consent of my client, he had to stop the payment of the said cheque. My client has instructed me to state that the said cheque for Rs.5,00,000/- was not for any consideration to your client. 15 Thus, the accused in reply to the notice sent by the complainant neither stated that a blank cheque was issued to the complainant nor stated that the same was issued for carrying out developments in the property. It is for the first time, in the cross- examination of the complainant and thereafter in his own evidence that the accused came out with a story that he had issued a blank cheque to the complainant. It is pertinent to note that not only the learned Magistrate but even the learned Additional Session Judge has not accepted the defence taken by the accused. This fact assumes more importance because the accused has to state as to why he had issued the cheque to the complainant. Therefore, the defence taken by the accused in the course of cross-examination of the complainant and during his evidence, appears to be an afterthought. I am unable to accept the submission of Mr. Sardessai that the complainant was bound to state in the complaint and in his examination-in-chief the details about his share in the property and why the cheque of Rs. 5 Lacs, was issued in his favour by the accused. In terms of Sections 118 and 139 of the Act, the presumption operates and the accused is expected to rebut the presumption more particularly under Section 139 of The Act either by cross-examination of the complainant and his witnesses or by leading defence evidence. There is an initial presumption that the cheque was issued for consideration, therefore, mere fact that the complainant did not specify his share in the property either in the complaint or in his 16 examination-in-chief, would not be a ground to disbelieve the complainant. There is one more clinching circumstance against the accused. Perusal of statement of account Exh.33 of the accused of the State Bank of India, discloses that on 24.5.2005, the accused deposited an amount of Rs.5 Lacs and during the period 07.08.2004 till 29.01.2005 the balance in his account, was ranging between 1,000/- to 2,000/-. This is a clinching circumstance, which goes against the accused and in the absence of any explanation from the accused as to why he deposited an amount of Rs. 5 Lacs in his account on 24.05.2005, leads corroboration to the version of the complainant that at the time of the execution of the sale deed on 23.05.2005, the accused had agreed to pay Rs. 5 Lacs to the complainant towards his share and had issued the cheque in question. 15. I am of the considered opinion that the complainant has been able to establish that the cheque was issued in discharge of legally enforceable liability and the accused has not been able to discharge the presumption under Section 139 of the Act. In so far as other grounds taken by the accused in support of his defence are concerned, I shall deal with the same one by one later, but in my considered opinion, none of the grounds urged on behalf of the accused has any merit. 17 16. In so far as the submission made by Mr. Sardessai that since the complainant has not stated his share in the complaint or in the evidence and therefore, the case set up by the complainant, cannot be accepted is concerned, I find no merit in the said submission. It is the case of the complainant in the cross-examination that the cheque was issued towards his share in the property since the entire amount was not paid to him. This clearly means that he was entitled to Rs. 9 Lacs towards his share in the property. Consideration mentioned in the sale deed, is Rs.18 Lacs and therefore, the necessary sequitur is that the share of the complainant in the property sold, is 50 %. Merely because the complainant did not state that he was entitled to 50 % share in the property or for that matter Manisha Chandaikar was the confirming party in the deed, the version of the complainant that