Tedhi Singh vs Narayan Dass Mahant

REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION CRIMINAL APPEAL NO.362 OF 2022 (Arising out of SLP (Crl) No.1963 OF 2019)

TEDHI SINGH ..APPELLANT

VERSUS

NARAYAN DASS MAHANT ..RESPONDENT

JUDGMENT

K.M. JOSEPH, J.

Leave granted.

2. The appellant calls in question the judgment of the

High Court by which it dismissed the Criminal Revision

No.129 of 2018 filed under Section 397 of the Code of

Criminal Procedure, 1898 (for short ‘Cr.P.C.) against

the order of the Sessions Judge by which the Court in

turn affirmed the order passed by the Chief Judicial

Magistrate. The Chief Judicial Magistrate found the

appellant guilty of having committed the offence under Signature Not Verified Digitally signed by JAGDISH KUMAR Date: 2022.03.12 13:53:43 IST Section 138 of the Negotiable Instruments Act, 1881 Reason:

(for short ‘N.I. Act.’). The appellant stands 2

sentenced to simple imprisonment for a period of one

year. Further, the appellant is called upon to pay a

compensation of a sum of Rs.7 Lakhs.

3. The complaint of the respondent was based on the

allegation that in the month of August, 2011 the

appellant was in urgent need of money and out of

friendship he gave a sum of Rs.7 Lakhs and the cheque

given by the appellant was dishonored. In the trial,

following the complaint the appellant examined DW-1 to

DW-4. They are Officers of four Banks. This was done

by the appellant in an attempt at putting up what can

be described in the words of the learned counsel for

the appellant ‘a probable defence’. It was an attempt

by the appellant to show that the version of the

complainant that he had the financial wherewithal to

advance a loan of Rs.7 Lakhs was not to be accepted.

This is the matter which has been agitated by Ms.

Sangeeta Bharti, learned counsel for the appellant. She

would, in fact, complain that in the impugned judgment,

the High Court has observed that it is not known as to

what is the purpose for which DW-1 to DW-4 have been

examined. It is appellant’s case that the finding would

clearly help the appellant advance the contention that 3

this is a case where the High Court as also the two

Courts have not appreciated the law which is laid down

in regard to the effect of a ‘probable defence’. She

drew our attention to the judgment of this Court in

Basalingapa Vs. Mudibasappa reported in (2019) 5 SCC

418. This Court, inter alia has held as follow:-

“25. We having noticed the ratio laid down by this Court in the above cases on Sections 118(a) and 139, we now summarise the principles enumerated by this Court in following manner:

25.1. Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.

25.2. The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence.

The standard of proof for rebutting the presumption is that of preponderance of probabilities.

25.3. To rebut the presumption, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which 4

they rely.

25.5. It is not necessary for the accused to come in the witness box to support his defence.”

4. She would therefore, point out in the facts of this

case when the complainant was cross-examined, he had

stated that the transaction took place on a particular

date, namely, 5th of August, 2011 and he also deposed

as follows:-

“….. The money was demanded in first week of August on the same date only. I had given money in August. I do not remember the date. Accused had demanded money from me on 5th August.

I have my bank accounts in State Bank Kullu, ICICI Kullu, PNB Kullu and Gramin Bank Kullu also. I cannot tell from where I had withdrawn the money.

I had withdrawn Rs.2 or 2.5 lacs. The rest of the money was with me, which I had given. Accused had given me the cheque in the end of August. When he gave me the cheque, then also only both of us were there. I have not brought the statement of account with me. It is wrong that Accused is not 5

known to me. It is also wrong that Accused has not taken any money from me. It is also incorrect that I do not have the financial position or capacity to pay such amount of money.

It is also incorrect that Accused had not demanded any money from me. It is also incorrect that I had not given any money to the accused. I do not know that the accused had lost his cheque book. Volunteered that the accused had himself given me the cheque. It is also incorrect that I had filled my name and amount in the lost cheque with accused had signed and kept for his family members to withdraw money in case of need and I had presented the said forged cheque. I had received reply to the notice.

It is incorrect that I have presented a false case on the basis of a forged cheque.”

5. She would, therefore, point out that when the

evidence adduced by the appellant through DW-1 to DW-4

would categorically establish that the version of the

complainant-respondent that he had withdrawn a specific

sum of Rs.2 or 2.5 Lakhs from the Bank and gave it the 6

appellant along with the money he had and when this

aspect is established to be false the entire case of

the complainant would collapse and what is more

important a probable defence has been made out by the

accused. In such circumstances, the three Courts which

held in favour of the complainant were entirely wrong

and, in fact, the High Court as already pointed out has

not even appreciated the very purpose of examination of

the defence witnesses in this regard. Learned counsel

for the appellant also pointed out that this is a case

where contrary to the finding of the Trial Court a reply

notice was in fact given by the appellant as admitted

by the complainant.

6. Per-contra, Mr. Ajay Marwah, learned counsel for

the complainant-respondent would draw our attention to

the version which was sought to be built up by the

appellant through DW-5 who incidentally happened to be

the son of the appellant. He took us through the

evidence and then made the point that the version of

the appellant was that the signed cheque in question

along with the cheque book was lost while it was being

carried by DW-5 but he requests the Court to notice 7

that neither DW-5 nor the appellant had made complaint

of the loss of the signed cheque to either the Bank or

to the Police. He points out that a perusal of the reply

notice sent by the appellant would clearly establish

that the respondent was known and friendly with the

appellant. This again bolstered the case of the

complainant that the complainant has helped the

appellant in his time of need by giving the hand loan.

He further points out that there is no case that the

signature on the cheque is not that of the appellant.

In this regard, in fact, the Courts below have also

noted the fact that the appellant has not produced the

evidence of the Official from the bank of the appellant

to establish that any notice was given to the Bank

regarding the alleged loss of the signed cheque. He

further drew our attention to the statements under

Section 313 of the Cr.P.C. given by the appellant. He

would point out that neither in the reply notice nor in

the statement given under Section 313 of the Cr.P.C.,

it is the appellant’s case that the respondent did not

have the financial capacity to give the hand loan. He

further ends by saying that the appellant does not have

a case regarding the capacity of the respondent to loan 8

the amount which remained after deducting the amount

referable to the withdrawal from the bank. He further

would contend that the Court may bear in mind that three

Courts have held against the appellant and no case is

made out for interference.

7. It is true that this is a case under Section 138

of the Negotiable Instruments Act. Section 139 of the

N.I. Act provides that Court shall presume 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. This

presumption, however, is expressly made subject to the

position being proved to the contrary. In other words,

it is open to the accused to establish that there is no

consideration received. It is in the context of this

provision that the theory of ‘probable defence’ has

grown. In an earlier judgment, in fact, which has

also been adverted to in Basalingappa (supra), this

Court notes that Section 139 of the N.I. Act is an

example of reverse onus [see (2010) 11 SCC 441). It is

also true that this Court has found that the accused is

not expected to discharge an unduly high standard of 9

proof. It is accordingly that the principle has

developed that all which the accused needs to establish

is a probable defence. As to whether a probable defence

has been established is a matter to be decided on the

facts of each case on the conspectus of evidence and

circumstances that exist.

8. It is indeed true that there is some merit in the

complaint of Ms. Sangeeta Bharti, learned counsel for

the appellant that in the impugned judgment the High

Court has not appreciated the real purpose of examining

DW-1 to DW-4. She is also correct when she drew our

attention to the accounts of the Gramin Bank i.e. Gramin

Bank, Kullu to show that before the 5th of August, 2011

the appellant had stopped operating the account in the

said bank and a very small and ignorable amount alone

was available in the said account.

9. The Trial Court and the First Appellate Court have

noted that in the case under Section 138 of the N. I.

Act the complainant need not show in the first instance

that he had the capacity. The proceedings under Section

138 of the N. I. Act is not a civil suit. At the time, 10

when the complainant gives his evidence, unless a case

is set up in the reply notice to the statutory notice

sent, that the complainant did not have the

wherewithal, it cannot be expected of the complainant

to initially lead evidence to show that he had the

financial capacity. To that extent the Courts in our

view were right in holding on those lines. However, the

accused has the right to demonstrate that the

complainant in a particular case did not have the

capacity and therefore, the case of the accused is

acceptable which he can do by producing independent

materials, namely, by examining his witnesses and

producing documents. It is also open to him to establish

the very same aspect by pointing to the materials

produced by the complainant himself. He can further,

more importantly, achieve this result through the cross

examination of the witnesses of the complainant.

Ultimately, it becomes the duty of the Courts to

consider carefully and appreciate the totality of the

evidence and then come to a conclusion whether in the

given case, the accused has shown that the case of the

complainant is in peril for the reason that the accused

has established a probable defence.

11

10. We have gone through the nature of the evidence in

this case. We also bear in mind the fact that three

Courts have held in favour of the respondent. In this

regard we bear in mind that though it is true that reply

notice was sent by the appellant, therein he admits the

case of the respondent that the parties were having a

cordial relationship. In the reply notice the

appellant has not set up any case that the respondent

did not have the financial capacity to advance the loan.

In fact even we notice that there is no reference to

the loss of the cheque book or signed cheque leaf. No

complaint was given of the loss of the cheque book or

the signed cheque leaf either to the police or to the

bank. In the evidence of DW5, the son of the appellant,

the version given is that on 5.10.2011, PW5 had left

home with the cheque book of the appellant which had a

cheque signed by the appellant for withdrawing money,

if needed in the absence of the appellant. He set up

the version that he drove away an unowned cow. in the

field. Thereafter, while sitting in the bus he saw the

cheque book was not with him. He further deposed that

since his father was not at home he could not tell him

about the incident and got engrossed in his study and 12

forgot the incident. In his statement under Section

313 Cr.PC given on 10.01.2013, appellant has taken the

stand that he informed the Bank. It is relevant to

notice that DW5 has further deposed that when the

appellant received the notice he asked him about the

cheque book and then he told him about the incident of

the loss of cheque book. Still, at the time when the

reply notice was sent, the case is not set up about the

loss of cheque book and about the cheque relied upon by

the respondent being one which is brought into

existence using the lost signed cheque leaf. We have

already noticed that there is no evidence to establish

that the appellant had informed the Bank about the loss

of the cheque book containing blank cheque. In fact,

In the statement under Section 313 Cr.PC. appellant had

stated that this cheque book containing a blank cheque

was lost. Appellant has no case that the signature on

the cheque in question was not put by him.

11. We must hasten here and observe that this Court

even exercising power under Article 136 of the

Constitution may not refuse to interfere in a case where

three Courts have gone completely wrong. The 13

jurisdiction generated in an appeal under Article 136

is undoubtedly rare and extraordinary. Article 136 of

the Constitution only confers a right to obtain special

leave in rare and extraordinary cases. However, this is

not to be understood as meaning that it is a clear case

of even three Courts in unison falling into palpable

error and thereby causing miscarriage of justice and

yet this Court would not interfere.

12. However, we would think that in the totality

of facts of this case the appellant has not established

a case for interference with the finding of the Courts

below that the offence under Section 138 N. I. Act

stands committed by the appellant. We have been told

that the amount of compensation in a sum of Rs.7 Lakhs

which is relatable to the cheque amount has been

deposited already in the Trial Court. However, we would

think that the appellant should be granted relief in

the form of substitution of the sentence of

imprisonment of one year with a fine. An amount of

Rs.5,000/-(Five thousand) commends itself to us as an

amount which should suffice as substitution for the

imprisonment. Apart from that, we would also direct 14

that a further amount of Rs.15,000/- shall be paid as

compensation to the respondent.

13. Accordingly, the appeal is partly allowed. While

we uphold the conviction, we direct that sentence of

imprisonment of one year shall stand vacated. However,

the appellant shall stand sentenced to fine of

Rs.5,000/- which he will deposit within a period of one

month from today in the Trial Court. In case of default,

the appellant shall undergo simple imprisonment for a

period of one month. The appellant shall also deposit

a sum of Rs.15,000/- as further compensation which can

be withdrawn by the respondent. The deposit shall be

made in the Trial Court within a period of four weeks

from today.

The appeal is partly allowed as above.

Pending application(s), if any, stands disposed

of.

…………………………………………J. [K.M. JOSEPH]

…………………………………………J. [HRISHIKESH ROY] New Delhi 07th March, 2022