(Prayer: Criminal Appeal filed under Section 378(4) of Cr.P.C., against the judgment of acquittal of the Respondent/Accused passed by the Learned Judicial Magistrate, (Fast Track Court at Magisterial Level No.II), Coimbatore in S.T.C.No.100 of 2012 dated 17.07.2014.)
1. The Appellant/Complainant has focused the instant Criminal Appeal before this Court as against the Judgment passed by the Learned Judicial Magistrate, (Fast Track Court at Magisterial Level No.II), Coimbatore in S.T.C.No.100 of 2012 dated 17.07.2014.
2. The Learned Judicial Magistrate, (Fast Track Court at Magisterial Level No.II), Coimbatore, while passing the impugned judgment in S.T.C.No.100 of 2012 on 17.07.2014 at para 18, among other things had observed that ....it is concluded that the complainant had failed to explain the absence of the endorsement dated 01/02/2011 in Ex.D5. Since the complainant failed to explain the same, the endorsement dated 01.02.2011 in Ex.P1 and the promissory note dated 01.02.2011 (Ex.P2) said to have been executed based on the endorsement dated 01.02.2011 also fails. It was established that the complainant had the habit of getting blank cheques as security for the transactions with the accused, which forces to believe that the cheque (Ex.P3) would have been obtained as security. All these aspects creates doubt on the complainant's case. The standard of proof prescribed for the defence side is preponderance of probability, whereas, the standard of proof for the complainant is proof beyond all reasonable doubt. The standard of proof for the complainant is heavy when compared to the accused. The defence side was able to establish doubt in the complainant's case by probable defence and had successfully rebutted the presumption drawn under Section 139 N.I. Act by preponderance of probability. The complainant had failed to prove the reverse burden beyond all reasonable doubt. In fine, the accused is not guilty for the offence under Section 138 N.I. Act and found the Respondent/Accused not guilty in respect of an offence under Section 138 of the Negotiable Instruments Act, 1881 and acquitted him in terms of ingredients of Section 255(1) of Cr.P.C.
3. Assailing the correctness, validity and legality of the judgment of acquittal dated 17.07.2014 passed by the trial Court, the Appellant/Complainant has preferred the present Appeal mainly contending that the Respondent/Accused had admitted the liability of loan amount which was due to be paid to the Appellant/Complainant and further that, the Respondent/Accused had admitted the signatures in Ex.P1 to Ex.P3 and under these circumstances, the trial Court should have held that the cheque Ex.P3 in question was issued towards the liability incurred by the Respondent/Accused.
4. Expatiating his submission, the Learned counsel for the Petitioner/Appellant projects an argument that Ex.P3 cheque was issued only to discharge the liability incurred by the Respondent/Accused for the repayment of loan amount and in reality, the Respondent/Accused had failed to adduce any evidence that he had discharged his liability to the complainant, of course, in a satisfactory manner. It is represented on behalf of the Appellant/Complainant that the trial Court should not have dismissed the complaint merely on the basis that the endorsement found in Ex.P1 (Memorandum of Understanding dated 31.07.2009) was not present in Ex.D5 (Sale Agreement dated 02.03.2006). Moreover, the signature in the endorsement portion was not denied as forged or proved to be forged.
5. The Learned counsel for the Appellant/Complainant takes a plea that the previous transactions would not be of any help to the Respondent/Accused to establish that the present cheque, namely, Ex.P3 dated 08.04.2011 was given only for the purpose of security.
6. The Learned counsel for the Appellant submits that once the liability is admitted and the cheque was issued together with a pro-note to discharge the liability by the Respondent/Accused, then, he would not be permitted to take a contra stand that the cheque in question was issued for the purpose of security without establishing that the liability towards the complaint was discharged, even by means of 'preponderance of probabilities'.
7. Yet another contending projected on the side of the Appellant/Complainant is that there would not be 'any question of security' when the Respondent/Accused had admittedly borrowed the loan amount from the Appellant/Complainant and issued a cheque for discharging the loan liability.
8. Lastly, it is the case of the Appellant/Complainant that the trial Court should not have dismissed the complaint on the ground that the Appellant/Complainant failed to prove the liability in question and also that the 'Preponderance of Probabilities' is quite inapplicable when the liability in question was not discharged.
9. Per contra, it is the submission of the Learned counsel for the Respondent/Accused that the stand of the Respondent/Accused was that a sum of Rs.1,06,000/- was paid to the Appellant/Complainant and in this regard, the evidence of D.W.1 Pitchaiappan (sub staff of the Lakshmi Vilas Bank) unerringly supported the case of the Respondent/Accused and in fact, the trial Court had come to a right conclusion that the Respondent/Accused side was able to establish a doubt in the case of the Appellant/Complainant by probable defence and successfully rebutted the presumption drawn under Section 138 of the Negotiable Instruments Act and ultimately, found him not guilty in respect of the offence under Section 138 of the Negotiable Instruments Act and acquitted him, which may not be displaced by this Court at this distant point of time.
10. At the outset, this Court pertinently points out that an offence under Section 138 of the N.I. Act is created by a legal fiction in the statute, other than Section 141 of the Act, there is no other provision in Chapter XVII of the N.I. Act which fastens the criminal liability on an individual other than the drawer of the cheque for an offence under Section 138 of the Act.
11. Further, to attract Section 138 of the N.I. Act, the 'Debt' or 'Liability' must be a legally recoverable/enforceable one. Of course, the existence of a legally recoverable debt is not a matter of presumption under Section 139 of the N.I. Act, also that, every 'Debt' or 'Liability' upon which the cheque issued is not enforceable. To put it aptly, any 'Debt' or 'Liability' arising out of promise or contract which is unlawful or legally enforceable, would not come within the ambit of an offence under Section 138 of the N.I. Act.
12. To invoke presumption under Section 139 of the Act, the Complainant is to prove that he received the cheque in issue from the Respondent/Accused and thereby, he became its Holder.
13. This Court relevantly points out that the Appellant/Complainant in his complaint (under Section 138 of the N.I. Act r/w. Sec.200 of Cr.P.C.,) before the trial Court had clearly averred that he purchased through the Accused (Respondent) 680 Reliance Petroleum Limited shares for which, the complainant had paid a sum of Rs.50,000/- to the Accused. Further that, the Appellant/Complainant had paid several amounts, totalling Rs.1,00,000/- to the Accused (Respondent in Appeal) by way of loan.
14. It is the further plea of the Appellant/Complainant that in terms of the understanding between him and the Respondent/Accused, the Respondent/Accused had undertook to purchase 680 shares of Reliance Petroleum Limited and paid an amount of Rs.50,000/- on 31.07.2009. For the remaining sum of Rs.1,28,000/- and the interest thereon, the Respondent/Accused executed a pro-note in favour of the Appellant/Complainant and also, made an endorsement on 01.02.2011 on the back side of Memorandum of Understanding dated 31.07.2011.
15. At this stage, a cursory glance of the contents of the complaint (filed by the Appellant/Complainant) before the trial Court would indicate that the Appellant took a stand that the Respondent/Accused for the aforesaid 'Legally Enforceable Debt' handed over the cheque bearing No.114177 dated 08.04.2011 to and in his favour drawn on Lakshmi Vilas Bank Ltd., Trichy Road, Ramanathapuram, Coimbatore. Subsequently, the Appellant/Complainant presented the cheque for collection on 08.04.2011 with his banker viz., Lakshmi Vilas Bank, Kovai Pudur and the cheque was returned for the reason that 'funds insufficient' in the Respondent/Accused account together with the Return Memo dated 15.04.2011.
16. It comes to be known that the Appellant/Complainant had issued a lawyer's notice dated 13.05.2011 addressed to the Respondent/Accused through Registered post, claiming the amount in question covered under the dishonoured cheque. Inspite of receipt of the notice by the Respondent/Accused, the Respondent/Accused had failed to pay the amount in question and hence, the Appellant/Complainant was perforced to project the complaint before the trial Court.
17. It is the evidence of P.W.1 (Appellant/Complainant) that her husband and the Respondent/Accused are friends and that when the Respondent/Accused came to their house, at that time, he informed that in his name, there was a 'Demat Account' and that if the Reliance Petroleum company's shares were purchased, then one can earn profit and based on that, she gave a sum of Rs.50,000/- (from the savings amount of her husband) to the Respondent/Accused for purchasing 680 Reliance Petroleum Limited shares and later on numerous occasions, the Respondent/Accused had received a sum of Rs.2 lakhs as 'Hand-loan' and for the said loan, he was paying interest.
18. P.W.1 adds in her evidence that on 31.07.2009, there was an agreement in writing (Ex.P1) between herself and the Respondent/Accused and that on that day, the Respondent/Accused gave a sum of Rs.50,000/- to her. For receipt of the balance sum of Rs.1,28,500/-, the Respondent/Accused gave a promissory note dated 01.02.2011 and made an endorsement on the backside of the agreement.
19. According to P.W.1 (the Appellant/Complainant) that she demanded the balance debt sum of Rs.1,28,500/- as per Ex.P2 agreement from the Respondent/Accused, the Respondent/Accused gave a Lakshmi Vilas Bank cheque dated 08.04.2011 (bearing no.114177) to her and the same was dishonoured with a reason 'insufficient funds' and a legal notice Ex.P7 dated 13.05.2011 was issued through counsel to the Respondent/Accused, which was received by the latter on 16.05.2011. For the said legal notice, the Respondent/Accused had not issued any reply and in reality, the amount due to her was Rs.1,28,500/- and not Rs.1,28,000/- (which was wrongly typed).
20. At this juncture, a mere running of the eye of Ex.P1 (copy of Memorandum of Understanding dated 31.07.2009) would point out that on the reverse/backside of the said document, an endorsement dated 01.02.2011 was seen and in terms of the said endorsement, a pro-note was executed by the Respondent/Accused for an amount of Rs.1,28,500/-. As a matter of fact, the promissory note was marked as Ex.P2. In Ex.P2/pro-note, the witnesses who had affixed their signature in the endorsement dated 01.02.2011, had also signed.
21. In this connection, this Court relevantly points out that the Respondent/Accused side denied the endorsement dated 01.02.2011 in Ex.P1 (Memorandum of Understanding dated 31.07.2009) and on behalf of the Respondent/Accused, a Memorandum of Understanding dated 31.07.2009 was marked as Ex.D6. The witnesses namely, V.Anandhan and M.Gandhi who had signed on the back/reverse side of Ex.P1 (MoU) were not examined on the side of the Appellant/Complainant to establish the endorsement made in Ex.P1 and the pro-note viz., Ex.P2. In fact, the trial Court at para 15, had significantly observed that the 'Available Evidence' creates a doubt regarding the endorsement made in the promissory note and also, further opined that the liability resting on the same, was a doubtful one.
22. Also a perusal of the endorsement dated 01.02.2011 made on the backside of Ex.P1 (MoU) leads one to doubt the veracity of the same, especially, by the absence of endorsement in Ex.D5 (Sale agreement dated 02.03.2006). Moreover, Ex.D1 to D4 and D8 to D15 clinchingly prove that the Appellant/Complainant was in the habit of securing blank cheques for security purpose at the time of lending loan. Ex.D8 to Ex.D15, unfilled cheques containing the signature of the Respondent/Accused. It is the version of the Respondent/Accused that two Memorandum of Understandings were executed between the Appellant/Complainant and the Respondent/Accused and each one was given a copy of the original. Therefore, both the Appellant/Complainant and the Respondent/Accused are in possession of one copy of Memorandum of Understanding (purported to be an original one) and this was admitted by the Complainant in her cross examination as P.W.1. In Ex.D5/Sale Agreement dated 02.03.2006, the endorsement dated 01.02.2011 mentioned in Ex.P1 was not to be seen. There is no two opinion that Ex.P1 (Memorandum of Understanding dated 31.07.2009) and Ex.D5 (Sale Agreement dated 02.03.2006) were executed on the same date. In regard to the same transactions, however, the endorsement dated 01.02.2011 was not to be seen in Ex.D5/Sale agreement but the same could be only seen in Ex.P1 (Memorandum of Understanding dated 31.07.2009).
23. On behalf of the Respondent/Accused, Ex.D2/Letter dated 12.02.2006 executed by the Respondent/Accused to and in favour of the Appellant/Complainant was marked and a reading of the contents of the said Ex.D2 would point out that the Respondent/Accused had borrowed a sum of Rs.1,75,000/- and handed over a Sale agreement dated 12.02.2006 and blank cheques drawn at Lakshmi Vilas Bank (bearing Nos.349954 to 349958) and in fact, Ex.D2 was marked (in cross examination of P.W.1) who had admitted the same in Ex.D3 dated 19.05.2007, the signatures of the Respondent/Accused and one R.Vishlakshi are seen. In Ex.D4, the signature of Respondent/Accused, one R.Vishlakshi and V.Anandhan are seen and in fact, the said document is one for borrowing a sum of Rs.50,000/- by the Respondent/Accused and handing over a three cheques as 'security'. In fact, the cheques specified in Ex.D1 to D3 were marked as D8 to D15 and P.W.1 (Appellant/Complainant) had admitted in her evidence that she was in the habit of obtaining cheques as security for the transactions with the Respondent/Accused.
24. Although before the trial Court, a plea was taken on behalf of the Respondent/Accused that the statutory notice/Ex.P7 does not satisfy the ingredients of Section 138(3) of the N.I. Act and the same was not accepted because of the reason that in the said notice, it was specifically mentioned that the liability in question was Rs.1,28,500/- and the cheque for the said amount was said to have been issued. Although the amount was not mentioned in the cheque in Ex.P7 notice (at para 2), the amount was made in regard to the payment for the cheque amount in question, suffice it for this Court to point out that the entire reading of Ex.P7/legal notice is an unequivocal/unambiguous one and gives a clear indication as to the sum payable by the Respondent/Accused. Therefore, in this regard, this Court concurs with the view taken by the trial Court.
25. In the instant case on hand, the Respondent/Accused had denied only the endorsement found in Ex.P1 (copy of Memorandum of Understanding dated 31.07.2009). Further, the Respondent/Accused had admitted his liability in Ex.P1 (Memorandum of Understanding dated 31.07.2009) and Ex.D5 (Sale Agreement dated 02.03.2006) in terms of Ex.P1 and Ex.D5, the liability of the Respondent/Accused was Rupees One lakh and the cheque date was 08.04.2011. In the present case, the endorsement dated 01.02.2011 and the promissory note dated 01.02.2011 assume significance and in fact, by examining the concerned witnesses, the Appellant/Complainant had not made any endeavour to establish the endorsement in Ex.P1 and pro-note/ Ex.P2. It is to be remembered that a 'Court of Law' cannot compel any party/litigant to adduce through witnesses of their liking/choice and in fact, the litigants/parties are the best judge to determine to what type of evidence they have to adduce in a given case and mark what type of documents which they seek or rely upon to project their case/substantiate their case, as opined by this Court.
26. In the present case, the evidence of D.W.1, Pitchaiappan (Sub-staff of Lakshmi Vilas Bank) points out in a clear cut manner that 'on 18.03.2011 at about 8.00 p.m., he along with the Respondent/Accused went to the house of the Appellant/Complainant and at that time, the Respondent/Accused wife had also came there and at that time, the Respondent/Accused gave a sum of Rs.1,06,000/- to the Appellant/Complainant and the said sum was the money inducted to be paid by the Respondent/Accused to the Appellant/ Complainant.
27. Furthermore, D.W.1 had added in his evidence, the amount repaid by the Respondent/Accused was towards the principal and interest and that the amount paid by the Respondent/Accused was received by the Appellant/Complainant and the entire loan obtained by the Respondent/Accused from the Appellant/Complainant was paid back. Moreover, D.W.1 in his evidence had deposed that the Respondent/Accused had asked the Appellant/Complainant to return all the documents given by him and at that time, the Appellant/Complainant informed the Respondent/Accused that the documents were in 'Locker' and they would be given to him on the next day. That apart, D.W.1 had also stated in his evidence that the Respondent/Accused had handed over two signed unfilled cheques and also signed but unfilled pro-note and the said documents were not handed over by the Appellant/Complainant to the Respondent/Accused and later on also, the Appellant/Complainant had not handed over the said documents at any time.
28. D.W.1 (in his cross examination) had specifically denied that it was not correct to state that he had not gone along with the Respondent/Accused and not paid a sum of Rs.1,06,000/-.
29. D.W.2 (in chief examination) had stated that on 18.03.2011 he had repaid the outstanding sum of Rs.1,05,000/- to the Appellant/Complainant and her husband. Also, D.W.2 in his evidence had proceeded to state that when he demanded back his documents on repayment of the outstanding amount on 18.03.2011, at that point of time, the Appellant/Complainant and her husband informed that the 'documents were in Locker' and they would give back after taking the same from the 'Locker' but they had not handed over the documents inspite of numerous demands made by him.
30. D.W.2 (in his cross examination) had stated that it is true that he had not produced the documents to show that he had repaid a sum of Rs.1,05,000/-.
31. As far as the present case is concerned, one cannot ignore the evidence of D.W.2 [the Respondent/Accused (in Cross Examination)] to the effect that for three months, a sum of Rs.2000/- per month as interest, totalling to a sum of Rs.6000/- was paid in addition to the principal amount of Rupees One Lakh amounting in all, a sum of Rs.1,06,000/- was to be tendered and they went to the Appellant/Complainant's house but on 18th date itself, since the amount was repaid, he asked for reduction of sum of Rs.1000/- with the Appellant/Complainant but she refused to accede to the said request and therefore, a sum of Rs.1,06,000/- was paid by them.
32. To put it precisely, D.W.2 (Respondent/Accused) in her cross examination had clearly admitted that on 18.03.2011 Rs.1,05,000/- was paid to the Appellant/Complainant by him and from the evidence of D.W.1 and D.W.2, as to the payment of money to the Appellant/Complainant, there is only a marginal difference of Rs.1000/-. At the risk of repetition, this Court points out that D.W.1 had stated in his evidence that the Respondent/Accused had paid a sum of Rs.1,06,000/- to the Appellant/Complainant but however, D.W.2/the Respondent/Accused in his evidence stated that he along with D.W.1 went to the house of the Complainant and paid a sum of Rs.1,05,000/-. The said marginal variation/difference in the evidence between the witnesses, namely,D.W.1 and D.W.2 would not in the considered opinion of this Court affect the case of the Respondent/Accused (notwithstanding the fact for the payment of Rs.1,06,000/- or Rs.1,05,000/- as the case may be, there was no receipt).
33. The very fact that D.W.1 and D.W.2 had stated in their evidence that a sum of Rs.1,06,000/- or Rs.1,05,000/- was paid to the Appellant/Complainant, this Court is of the earnest opinion that the Respondent/Accused had raised a probable defence by means of 'Preponderance of Probabilities' and indeed, a presumption under Section 139 of N.I. Act was rebutted on behalf of the Respondent/Accused. When once the amount of Rupees One Lakh either Rs.1,06,000/- or Rs.1,05,000/- paid to the Appellant/Complainant (inclusive of the interest amount for Rs.2000/- per month, calculated for three months amounting to Rs.6000/- etc., in all a sum of Rs.1,06,000/- or Rs.1,05,000/- was paid to the Appellant/Complainant) this Court comes to an inevitable conclusion that the Appellant/Complainant had failed to establish her case that the Respondent/Accused had failed to pay the amount/debt in question and resultantly, the Respondent/Accused is entitled in Law, to a Judgment/Order of 'Acquittal' and the ultimate view taken by the trial Court in coming to the conclusion that the Appellant/Complainant had failed to prove her case beyond all reasonable doubt etc., does not suffer from any material irregularities or patent illegalities in the eye of Law. Consequently, the Criminal Appeal fails.
34. In fine, the Criminal Appeal is dismissed and the judgment of Acquittal dated 17.07.2014 in S.T.C.No.100 of 2012 passed by the Learned Judicial Magistrate, (Fast Track Court at Magisterial Level No.II), Coimbatore is hereby confirmed by this Court for the reasons assigned in this Criminal Appeal.