CASE STUDY: Presumption

Party Name: Tasneem Murshedkar Mazhar Vs. Ramesh and others

Judgment Date: 02/01/2020Court: Bombay High Court, Mumbai bench

Main Category: Criminal

Sub Category: Presumption

Judges/Coram: Justice K. R. Shriram

Case Note: Section 139 imposed an evidentiary burden and not a persuasive burden. It is settled law that this presumption is rebuttable and the onus is on the accused to raise the probable defense. Therefore, the standard of proof for rebutting the presumption is that of preponderance of probabilities and not beyond reasonable doubt. It is not necessary for the accused to come in the witness box in support of his defense because Section 139 imposed an evidentiary burden and not a persuasive burden.

Facts: Appellant is the original complainant, who had filed summary criminal case no. 76 of 1999 before the Judicial Magistrate First Class, Vashi, against respondent no. 1 for commission of offence punishable under Section 138 (Dishonour of cheque for insufficiency, etc., of funds in the account) of the Negotiable Instruments Act, 1881 (the said Act).

According to complainant, respondent was in need of money and in the year 1997- 1998 appellant gave a loan of various sums totalling to Rs. 4,50,000/-. According to complainant, accused undertook to repay this amount of Rs. 4,50,000/- by August 1998. Accused, however, did not repay the amount on time but in September 1998, complainant received a cheque for Rs. 4,50,000/- and the cheque was dated 26th November 1998. This cheque, when deposited, came to be dishonored with the endorsement “not arranged for”. A statutory notice was issued through complainant’s advocate’s letter dated 10th December 1998 to which a baseless reply was received and hence, the complaint came to be lodged. The Trial Court after considering the evidence came to the conclusion that complainant has failed to prove that there was legally enforceable debt/liability and acquitted accused by an order and judgment dated 22nd July 2003, which is impugned in this appeal.

Accused has not been represented. Even complainant is absent. The State, respondent no. 2, however, is represented. The stand of the defense has been that accused did not know who Ms. Tasneem Murshedkar, complainant, was and therefore, the allegation that she gave a loan of Rs. 4,50,000/- also is false. It is the case of the defense that one Sanjay Alizar (Jain) (PW-2), in whose presence complainant claims to have given loan, was a business partner of the accused and both of them as per Partnership Deed made by them in April 1993 were carrying on business of wholesale medical and general items. Sanjay Alizar had 50% shares in the partnership and as such is also jointly and severally liable for the liabilities of the firm. According to the defence, Sanjay Alizar (Jain) had taken a blank cheque signed by accused sometime in May 1997 to be handed over to a third party one Mr. Jitu Mhatre for a mutually agreed transaction. After the cheque was given to Sanjay Alizar, disputes arose between accused and Sanjay Alizar and it appears that the blank cheque has been dishonestly handed over by Sanjay Alizar to complainant. According to accused, it is nothing but an act of deception on the part of Sanjay Alizar and fraud being played upon him. It is also alleged that complainant and Sanjay Alizar are close friends living in the same house and therefore, they have colluded with each other and entered into a conspiracy to harass or take revenge against the accused.

Observation: Under Section 138 of the said Act where any cheque drawn by a person on an account maintained by him is drawn in favour of another person for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, the said person shall be punished with imprisonment for a term which may be extended to two years or with fine which may extend to twice the amount of the cheque, or with both. Explanation to Section 138 provides “For the purposes of this section, “debt or other liability” means a legally enforceable debt or other liability”. The key word is legally enforceable debt or other liability.

Section 139 of the said Act provides for presumption in favour of holder and it says it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque for the discharge, in whole or in part, of any debt or other liability. It is settled law that this presumption is rebuttable and the onus is on the accused to raise the probable defense.

The Apex Court in Basalingappa Vs. Mudibasappa MANU/SC/0502/2019: (2019) 5 SCC 418 summarized the principles enumerated by the Apex Court in many matters. Paragraph 25 of the said judgment reads as under:

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

(i) 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.

(ii) The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defense. The standard of proof for rebutting the presumption is that of preponderance of probabilities.

(iii) To rebut the presumption, it is open for the accused to rely on evidence led by him or accused can also rely on the materials submitted by the complainant in order to raise a probable defense.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 they rely.

(iv) That it is not necessary for the accused to come in the witness box in support of his defense, Section 139 imposed an evidentiary burden and not a persuasive burden.

(v) It is not necessary for the accused to come in the witness box to support his defense.

Therefore, the standard of proof for rebutting the presumption is that of preponderance of probabilities and not beyond reasonable doubt. To rebut the presumption, it is open for the accused to rely on evidence led by him or accused can also rely on

the materials submitted by the complainant in order to raise a probable defense. 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 they rely. It is not necessary for the accused to come in the witness box in support of his defense because Section 139 imposed an evidentiary burden and not a persuasive burden.

The Apex Court in Chandrappa & Ors. Vs. State of Karnataka MANU/SC/7108/2007: (2007) 4 SCC 415 in paragraph 42 has laid down the general principles regarding powers of the Appellate Court while dealing with an appeal against an order of acquittal. Paragraph 42 reads as under:”

42. From the above decisions, in our considered view, the following general principles regarding powers of appellate Court while dealing with an appeal against an order of acquittal emerge;

(1) An appellate Court has full power to review, reappreciate and reconsider the evidence upon which the order of acquittal is founded;

(2) The Code of Criminal Procedure, 1973 puts no limitation, restriction or condition on exercise of such power and an appellate Court on the evidence before it may reach its own conclusion, both on questions of fact and of law;

(3) Various expressions, such as, ‘substantial and compelling reasons’, ‘good and sufficient grounds’, ‘very strong circumstances’, ‘distorted conclusions’, ‘glaring mistakes’, etc. are not intended to curtail extensive powers of an appellate Court in an appeal against acquittal. Such phraseologies are more in the nature of ‘flourishes of language’ to emphasize the reluctance of an appellate Court to interfere with acquittal than to curtail the power of the Court to review the evidence and to come to its own conclusion.

(4) An appellate Court, however, must bear in mind that in case of acquittal, there is double presumption in favour of the accused. Firstly, the presumption of innocence available to him under the fundamental principle of criminal jurisprudence that every person shall be presumed to be innocent unless he is proved guilty by a competent court of law. Secondly, the accused having secured his acquittal, the presumption of his innocence is further reinforced, reaffirmed and strengthened by the trial court.

(5) If two reasonable conclusions are possible on the basis of the evidence on record, the appellate court should not disturb the finding of acquittal recorded by the trial court.”

Held: There is an acquittal and therefore, there is double presumption in favour of accused. Firstly, the presumption of innocence available to accused under the fundamental principle of criminal jurisprudence that every person shall be presumed to be innocent unless he is proved guilty by a competent court of law. Secondly, accused having secured acquittal, the presumption of his innocence is further reinforced, reaffirmed and strengthened by the Trial Court. For acquitting accused, the Trial Court observed that the prosecution had failed to prove its case. In the circumstances, in my view, the opinion of the Trial Court cannot be held to be illegal or improper or contrary to law. The order of acquittal, in my view, cannot be interfered with. I cannot find any fault with the judgment of the Trial Court.

Appeal dismissed.

Referred case laws:

• Basalingappa Vs. Mudibasappa (2019) 5 SCC 418
• Chandrappa & Ors. Vs. State of Karnataka (2007) 4 SCC 415