Smt. Manu R Vs Smt. Lalitha: Presumption in Favour of One Party Needs to be Contradicted by the Other Party

DATE OF JUDGEMENT:
08 June 2021

CORUM:
Hon’ble Justice Dr. H.B. Prabhakara Sastry

PARTIES:
Smt. Manu R (Appellants)
Smt. Lalitha (Respondents)

SUMMARY

The petitioner was charged with and found guilty of violating Section 138 of the Negotiable Instruments Act of 1881 in a dispute between the petitioner and the complainant who were relatives. After receiving the legal notice, the accused made an unsatisfactory response and failed to pay the amount of the checks, prompting the complainant to file a criminal complaint against the accused in the Trial Court for an alleged offence punishable under Section 138 of the NI Act. The Court did not find any substance in the evidences provided by the petitioner to negate the claims of the complainant, rather the evidences were favourable for the complainant. The petitioner’s submissions were not acceptable and it was held that she would be liable to pay compensation to the complainant as held by the Trial Court.

IMPORTANT PROVISIONS

• Section 138 of the Negotiable Instruments Act, 1881: When a cheque is dishonoured due to a lack of funds or for any of the other reasons listed in Section 138, the defaulter faces up to two years in jail, a fine of up to double the value of the cheque, or both.
• Section 397 of the Code of Criminal Procedure: Section 397 of CrPC empowers the High Courts or Sessions Courts to review the correctness, validity, or propriety of any inter se order, as well as the regularity of any lesser court's proceedings.
• Section 401 Code of Criminal Procedure: According to Section 401, the High Court has the authority to exercise any of the powers conferred on the appellate court under Sections 386, 389, 390, and 391 or the powers conferred on the Sessions Court under Section 307 in the event of any proceedings of record by the High Court itself or otherwise comes to its knowledge.
• Sections 323of the Indian Penal Code: Whoever, except in the case provided for by Section 334, voluntarily causes harm shall be punished with imprisonment of either description for a time not exceeding one year, or with a fine not exceeding one thousand rupees, or with both, according to Section 323 of the Indian Penal Code.
• Sections 342 of the Indian Penal Code:Whoever illegally confines any person must be punished with simple imprisonment of any class for a time not exceeding one year, or with a fine not exceeding one thousand rupees, or with both, according to Section 342 of the Indian penal code.
• Sections 347 of the Indian Penal Code: According to Section 347, whoever wrongfully confines any person for the purpose of extorting anything illegal or giving any information that may facilitate the commission of an offence from the person confined, or any person interested in the person confined, shall be punished with imprisonment of either description for a term that may extend to three years, and shall also be liable to a fine.
• Sections 384 of the Indian Penal Code: Extortion is punishable by imprisonment of any sort for a time up to three years, a fine, or both, according to Section 384.
• Sections 392 of the Indian Penal Code: The punishment for committing robbery is outlined in Section 392. The penalty might include up to ten years in prison as well as a monetary fine.
• Sections 506 of the Indian Penal Code: Whoever commits the offence of criminal intimidation shall be punished with imprisonment of either sort for a term not exceeding two years, or with a fine, or with both, according to Section 506 of the Indian penal code.

OVERVIEW

• The complainant and the petitioner were relatives. The complainant was in need of an immovable property and approached the petitioner. The petitioner had agreed to secure a site and took 32 lacs and 50 thousand rupees from the complainant. But the petitioner could not secure the site in the agreed time and the complainant asked to return the amount taken from her.The amount was paid in form of four cheques from Karnataka Bank Limited and four cheques from ICICI Bank.
• The petitioner was an accused and convictedfor offences under Section 138 of Negotiable Instruments Act, 1881 (NI Act) by the Trial Court in 2016. The petitioner had approached the Sessions Judge’s Court which was contested by the respondent. The Sessions Court dismissed the appeal and confirmed the conviction order passed by the Trial Court.
• The accused had sent an unsatisfactory reply after receiving the legal notice, but did not pay the amount of the cheques, forcing the complainant to file a criminal complaint against the accused in the Trial Court for the alleged offence punishable under Section 138 of the NI Act. Both the parties presented documents to support their sides along with other witnesses to support their claims.
• The counsel for the petitioner did not attend the Court despite being given several opportunities, the Court therefore appointed an Amicus Curiae for the petitioner. The Court listened to the parties and concluded that the evidences presented were not sufficient to make out a case against the complainant rather the evidences were beneficial for the complainant itself.
• The petitioner in his arguments, the Amicus Curiae for the petitioner stated that the reply to the legal notice states that the accused is not obligated to pay the amount of the cheques to the complainant and that the complainant received the cheques under duress.
• The complainant claims that the amount listed on one of the ICICI Bank cheques is for a value of 4,00,000/-, but in fact, the cheque was for a sum of 4,50,000/-.The accused filed a police report and then filed a private complaint in a competent court against the present complainant and two other people, alleging charges punishable under Sections 323, 342, 347, 384, 392 and 506 of the Indian Penal Code.
• The accusation that the accused issued eight cheques instead of a single cheque to refund the stated liability of 32,50,000/- to the complainant also casts doubt on the complainant’s argument.
• He further claimed that the complainant had failed to demonstrate that she had the financial means to provide the accused such a large sum of money. He argued that both the Trial Court and the Sessions' Court failed to grasp these factors in their appropriate context, resulting in their issuing a judgement of guilt against the accused that should be overturned.
• The counsel for the respondent submitted thatwhen she delivered the cheques for realisation through her banker, four cheques drawn on Karnataka Bank Limited were returned unpaid with the banker’s endorsement as payment halted by the drawer, as per the accused’s instructions. The remaining four ICICI Bank cheques were similarly returned unpaid due to lack of banker’s endorsement money.
• The evidence presented by the respondent, as well as the documents she submitted, establish that she had the financial means to offer the accused such a large sum of money.
• He argued that the evidences submitted by the accused do not indicate that the amounts mentioned in them were actually given by the accused to the complainant. The accused’s defence, as stated in her reply notice, is unproven. The private lawsuit was merely an afterthought on the part of the accused in order to shield her from accountability in the cheque-bouncing case.
• Exhibit D-5 aids the complainant rather than the accused, demonstrating that the complainant had paid the accused a large sum of money in the amount of 32,50,000/-, which the accused is obligated to restore to the complainant.
• The accused has admitted that she and the plaintiff had a financial transaction. In such a case, she would have to show that the cheques in question were not for any debt she owed to the complaint, which she has yet to do.The accused was correctly convicted by the trial court, which was further confirmed by the learned Sessions Judge's Court, and this Court has no jurisdiction to interfere.

ISSUES

• Whether the judgments of the lower Courts were perverse, illegal and erroneous and needed interference from the Court?

ANALYSIS OF THE JUDGEMENT

• The Trial Court after hearing both sides and recording the evidence presented before it had the found the accused guilty of the offence punishable under Section 138 of the NI Act and sentenced her to pay a fine of Rs. 5000/-, in default of which she was sentenced to simple imprisonment for a period of three months, and to pay full compensation to the complainant at the rate of 6% per annum from the date of issue of cheques to realisation of the cheques. The accused then approached the Sessions’ Court but the appeal was dismissed.
• The Court analysed the facts and circumstances and found truth in the facts of relation between the parties and other details provided. A presumption arises in favour of the complaint, based on Section 139 of the NI Act that a legally enforceable debt exists in her favour. However, because the presumption is rebuttable, the question that must be answered is whether the accused has effectively rebutted the presumption. The complainant must show the accused’s alleged guilt beyond a reasonable doubt, but it is sufficient for the accused to establish a case on the preponderance of the evidence to rebut the complainant’s presumption.
• Without any agreement addressing the purchase of the site and without any reference of the supposed site, it is difficult to believe that the complainant paid such a large sum of money to the accused on the basis of the accused's alleged assurance that she would receive a site. However, it cannot be overlooked that the complainant's case is not one in which the accused identified a specific site and promised to obtain that property from a specific individual for a certain money.
• Nowhere in the complaint has the complainant alleged that she was shown a specific site or that the parties reached an agreement. Rather, it is her case that the accused was a relative of hers, and that she (the complainant) parted with such a large sum in the accused's favour because of her commitment. The complainant stated before the police that the accused brought Ramesh Kumar with her and promised that he had some land in a village and that he would form a layout therein and give a site to the complainant, and that he made her part with a sum of 12,00,000/- initially and believing their words, she gave a sum of 12,00,000/-. And later on making excuses of the daughter of the man not agreeing, they collected the remaining amount.
• The accused was unable to pay the amount or secure a site so upon asking to realise the four cheques from ICICI Bank which were presented as security, she had requested to not present it and that she would pay the amount in cash. The complaint against her was filed in retaliation of her demand for realisation of the cheques and legal notice. These evidences are favourable to the complainant rather than the accused who presented all the evidence.
• The Amicus Curiae had raised questions on the complainant of submitting 8 cheques instead of one but since this was not questioned before the complainant, the answer would not be known but that does not negate the case of the complainant. The complainant had produced several documents to prove her obtaining money from various sources which showed her capacity to afford the amount she claimed to have paid. The Court also observed that the complaint that the accused has lodged against the complainant was looked into by the Police and they were suggested to solve the matter before a Court of Competent jurisdiction and the evidence regarding the complaint and statements of the complainant had been produced and came to be in favour of the complainant.
• If the accused had paid at least a portion of the alleged liability to the complainant, the cheques would have been issued after deducting the payment, if any. The accused was unable to overcome the presumption in favour of the complainant and defence that the cheques in question were obtained in a coercive manner by the complainant and that the accused was illegally imprisoned at the complainant's home has not been proven in any way. The Court held that the decision of the Trial Court and the Sessions Court was correct and sentenced her proportionately.

CONCLUSION

The case revolved around the involvement in negotiable instruments and the punishment in case of default. India has seen a recent surge in cases related to cheques and the offenders like Mehul Choksi and Vijay Mallya get away with committing scams. It is important to recognise offenders and make appropriate provisions to ensure that such people do not get away with their actions.

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