cannot be presumed that an implied authority is given to the holder of the cheque to fill it up towards the discharge of a debt etc.
IMPORTANT
Dishonour of cheque - There is no presumption that a cheque (whether it be blank one or not), is executed for discharge of debt. or liability.
A. Negotiable Instruments Act, Sections 138 and 141 - Blank cheque duly signed given by drawer - It cannot be presumed that an implied authority is given to the holder of the cheque to fill it up towards the discharge of a debt etc. - It cannot be presumed chat cheque was issued for discharge of debt. or liability - In the complaint there must be allegation and evidence that blank cheque was issued with implied authority to holder to fill up the same.
[Paras 42, 33, 41, 13 and 15]
B. Negotiable Instruments Act, Sections 138 and 139 - Dishonour of cheque - There is no presumption that a cheque (whether it be blank one or not), is executed for discharge of debt. or liability - In Section 139 word "received" has been used and the word "issued" or executed - Holder of cheque has to establish the basis for drawing presumption under Section 139 - Further held :-
The only fact which can be presumed under Section 139 is the `PURPOSE' for which the cheque is received by the complainant - The Court can presume under Section 139 of the Act that the purpose for which the cheque is received by the holder is, "for discharge of a debt or liability" - But the court cannot presume that the cheque is "issued/executed/drawn" by the accused.
[Paras 13, 15, 16, 18, 19, 23, 25 and 22]
C. Negotiable Instruments Act, Sections 139 and 138 - There is no presumption under Section 139 that cheque was issued in discharge of debt or liability - Before drawing presumption under Section 139 of Negotiable Instruments Act, Court must be satisfied :-
(1) That the person who seeks the benefit of the presumption in Section 139 is the "holder" as defined under Section 8 of the Act.
(2) That such person is entitled in his own name to the possession of the cheque and also to receive the amount due from the parties thereto.
(3) It must be established that such a person is in possession of same by way of entitlement.
(4) There must be evidence at least for the fact that he "received" the cheque as of right and did not obtain it by any other mode.
(5) If the court is satisfied that he is the "holder" of the cheque of the nature stated in Section 138 and that he "received" the same, the court can safely draw the presumption under Section 139 of the Act.
[Paras 45 and 51]
D. Evidence Act, Sections 3 and 4 - Presumption in law - Meaning - Presumptions in law are of two kinds : (i) presumption of law (ii) presumption of fact - The former is drawn in cases where the statute uses the words like "shall be presumed" and the other is drawn in cases where it used the words like "may be presumed" - The court may, in certain other circumstances also, make certain assumptions, presumptions or inferences, while evaluating the evidence and other materials placed before the court, as against normal human conduct etc., to decide whether a fact is proved or not under Section 3 of the Evidence Act.
[Paras 36 to 40]
E. Negotiable Instruments Act, Sections 138 and 139 - Criminal trial - An accused in any criminal prosecution is ordinarily presumed to be innocent, unless otherwise expressly provided by any statute or law - A prosecution under Section 138 is not an exception to this - No provision in the Act rebuts such presumption of his innocence - Not even, Section 139 of the Act.
[Para 18]
Cases referred :
1. Hiten P. Dalal v. Bratindranath Banerjee, 2001(3) RCR(Criminal) 460 : ((2001)6 SCC 16).
2. K.N. Beena v. Muniyappan, 2001(4) RCR(Criminal) 545 : (2001)8 SCC 458.
3. Mohanan v. Bibu Kumar, 2003(4) RCR(Criminal) 6 : (2003(2) KLT 825).
4. General Auto Sales v. Vijayalakshmi, 2005(2) RCR(Criminal) 97 : (2005(1) KLT 478).
5. State of Madras v. Vaidynanatha Iyer, 1958 SCR 580.
6. M. Narsinga Rao v. State of A.P., 2001(1) RCR(Criminal) 95 : (2001)2 SCC 691.
7. T. Shankar Prasad v. State of A.P., 2004(1) RCR(Criminal) 784 : 2004(2) Apex Criminal 384 : (2004)3 SCC 753.
8. State of A.P. v. V. Vasudeva Rao, 2003(4) RCR(Criminal) 917 : 2004(1) Apex Criminal 648 : (2004)9 SCC 319.
JUDGMENT
K. Hema, J. - Can it be presumed under section 139 of the Negotiable Instruments Act ('the Act', for short) that the cheque is drawn/executed by the accused for the discharge of a debt or liability ? What exactly is the `fact' which can be presumed by the court under section 139 of the Act ? Under what circumstance the presumption under section 139 can be drawn ? What are the basic requirements for drawing the presumption under section 139 of the Act ? On whom does the burden lie to establish those pre-requisites ? These are some of the important questions which I would ponder upon, for the purpose of disposal of this appeal.
2. A complaint was tiled by the complainant-appellant through PW1, the power- of-attorney holder against the first respondent alleging offence under Section 138 of the Negotiable Instruments Act (the Act, for short). As per the allegations in the complaint, complainant and accused are friends and distant relatives. The accused allegedly borrowed a sum of Rs. 2,00,000/- from the complainant at PW1's house, agreeing to repay the amount with interest in three months. But, he failed to do so. Hence, on repeated demands, Ext.P2 was issued by him for discharge of the debt from the house of PW1. But, the cheque, on presentation to the bank, was returned unpaid for "insufficient funds" along with memo, Exhibit P3. A lawyer notice (the copy is Exhibit P5) was sent to the accused. Still, he did not repay the amount, and hence, after complying with the legal formalities, a complaint was filed against him.
3. To prove the complaint, PWs 1 to 3 were examined, Exhibits P1 to P8 and Exhibit X1 were marked. The accused did not adduce any oral evidence, but marked Exhibits D1 and D2. According to accused, he never borrowed any amount from the complainant nor did he issue any cheque to the complainant. He does not even know the complainant. This case is falsely foisted against him by the power-of-attorney holder of the complainant who is on inimical terms with him, on account of another transaction.
4. The accused set up a plea that he borrowed Rs. 25000/- from PW1, the `so- called power-of-attorney holder' of the complainant and handed over two blank cheques to her as security. He discharged a part of that liability but, PW1 was not satisfied. She demanded for more money and went to the accused's house with her husband and made unjustifiable demands. Following this, there was a quarrel between them from the accused's house which ended up in an assault. The accused was injured in the incident and a case was registered by the police on his complaint against PW1 and her husband. Thereafter. PW1 misused the blank cheques given to her and filed two complaints against the accused. One was filed by PW1 herself as the complainant; the other was filed by her, allegedly on behalf of her sister-in-law, as the power-of-attorney holder.
5. The court below, after considering the evidence and other materials, found that the complainant did not have the financial capacity to pay Rs. 2,00,000/- to the accused. It was also held that it is probable that the accused issued two signed blank cheques as security to PW1, when he borrowed Rs. 25,000/- from her. But, PW1 falsely typed complainant's name and other particulars in the cheque and presented it in the bank. The accused was acquitted of offence under Section 138 of the Act. The trial court also found that this is a false and vexatious case, and issued summons to the complainant to show cause why she should not pay compensation to the accused, invoking Section 250 of the Code of Criminal Procedure (the Code, for short).
6. On a perusal of the records, I find that the definite case of the accused is that he did not issue any cheque in favour of the complainant and he had absolutely no transaction with her. They are not even known to each other. PW1 admitted that the complainant and accused were not known to each other. It was also brought out from PW1's evidence that the accused has some liability towards PW1 and there was some quarrel on account of this from the house of the accused and he was assaulted at his house. PW1 also admitted that a complaint was lodged by the accused before the police alleging that PW1 and her husband trespassed into the accused's house, demanded money and he was assaulted, following a quarrel etc.
7. It was also brought out from PW1's evidence that she had filed two complaints against the accused, alleging offence under Section 138 of the Act. It is also in evidence that one such complaint was filed by PW1 on her own behalf and the other one, in the alleged capacity as power-of-attorney holder of her sister-in-law. PW1 also deposed that complainant is a widow having two children having 20 to 24 years old and that she has no independent source of income. PW1 gave evidence that the complainant's husband was a gold smith who expired as early as in 1982, leaving behind his widow and two children who are still dependent on complainant.
8. It is also brought out from the cross-examination of PW1 that the complainant's husband's sole property was sold as early as in 1982 for Rs. 1,50,000/-, and it was this money that she gave to the accused. According to PW1 the said sale proceeds were kept intact by her, even without depositing it in any Bank. PW1 wants the court to believe that the said amount, was kept by her for fifteen long years, from 1982 till 1997 to be given to the accused. PW1 further deposed that the complainant even sold out her gold ornaments to raise the amount to be given to the accused.
9. It has also come out from the evidence of PW1 that the request for money was made by the accused to the complainant's power of attorney holder and not directly to the complainant. On the immediate next day of the request, the complainant who is residing far away at Nilambur came all the way to Kumaramangalam in another District, carrying the huge amount of Rs. 2 lakhs in cash.
10. All these commendable gestures were shown by complainant to oblige the accused, who is an absolute stranger to her. It is to be borne in mind that the accused did not even make any request to her for money. The complainant did not even take a day's break to hand over the most precious possession of Rs. 2,00,000/- to a stranger like the accused. May be, `truth is stranger than fiction' at times. But, a court while assessing the worth of the evidence or merit of the case, can only go by normal human conduct and natural course of events, which will be digestible to a reasonable man. The court cannot evaluate the evidence on the scale of any fiction or miracle, though it is also likely to occur once in blue moon.
11. Any way, for the purpose of this appeal, I am not going to make any conclusions on facts, at this juncture. I have only narrated the relevant evidence, facts and circumstances which appear to have weighed with the mind of the trial court in acquitting the accused. But, I have to decide some other important questions of law for the disposal of this appeal. But, while doing so, I also find it worthy to bear in mind, the facts which are narrated above.
12. The main contention raised by the appellant in this appeal is that there is a presumption under Section 139 of the Act that the cheque is "issued/executed/drawn" for the discharge of a debt or liability, especially since the cheque is admittedly signed by the accused. Hence the finding of the trial court that the cheque was a blank cheque etc., is not at all justified. In short, it appears from the argument that there is a presumption under section 139 in respect of "issuance" i.e., "execution" of the cheque, especially in cases where the signature in the cheque is admitted by the accused. According to appellant, the concept of issuance of a blank cheque does not arise in a complaint under Section 138 of the Act and such a plea cannot be raised since it can be presumed that a blank cheque is issued with the implied authority to fill up the same, for the discharge of a debt or liability under section 139 of the Act.
13. I cannot accept any of these arguments. Reasons are plenty. In my view, there is no presumption under section 139, that the cheque is "issued", in the sense that it is "executed" by the accused, even if the signature in the cheque is admitted by the accused. There is also no presumption under section 139 or any other provision of the Act that if a blank cheque is issued, it can be presumed that an implied authority is given to the holder of the cheque to fill it up towards discharge of a debt etc. On a close reading of the relevant provisions and the precedents (which I would discuss in detail later), I could not come across with any proposition of law being laid down in any of those decisions in the above lines of argument. Section 139 does not permit the court to presume that a cheque, (whether it be a blank one or not), is "executed" for discharge of a debt or liability.
14. To justify the view expressed by me, a detailed consideration of the relevant provision is necessary. Section 139 of the Act reads as follows :
"Section 139. Presumption in favour of holder. - It shall be presumed, unless the contrary is proved, 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."
15. Section 139 of the Act lays down that it shall be presumed, unless the contrary is proved that the holder of the cheque "received" the cheque of the nature stated in section 138 for the discharge of a debt or liability. Even on a plain reading of the provision, it is clear that the section does not provide for a presumption in respect of "issuance/execution" of a cheque. Neither of the expressions, "issued" nor "executed" is used in the section. Both are significantly absent in the provision. The court cannot therefore, introduce into section 139, any expression like "issued" thereby meaning, "executed" which is not there in the provision.
16. The court cannot insert, substitute, add, subtract or squeeze in, any word, term of expression in a provision so as to alter the very nature of the presumption that can be drawn under the provision. The court cannot incorporate any new word into the section, whereby the fact which can be presumed under the provision becomes a totally different one. The court cannot introduce any crucial expression into the provision which will run contrary to the intention of the legislature which is reflected in the language of the provision itself. Any attempt made to substitute the word "received" in section 139, by the expressions such as, "issued" or "executed" to give a wholly different meaning to the provision, in my humble view, may even amount to an assault on the legislation, leading to unintended results. Such precedential legislation is not warranted or recognised by our system.
17. Apart from all these, "issuance/execution/drawing" of the cheque is the most relevant factor to be proved in an offence under section 138. So, unless any provision specifically allows the court to draw a presumption in respect of execution/drawing of a cheque, the court shall not presume one of the ingredients of the offence under the provision. To draw a presumption under section 139 of the Act that the cheque is drawn/executed/issued, those expressions which are wholly alien to the provision will have to be consciously incorporated into the said section. But, such an exercise cannot be approved or legally recognised, since it will result even in exempting the prosecution from proving one of the most vital ingredients of the offence viz., drawing of the cheque by the accused.
18. An accused in any criminal prosecution is ordinarily presumed to be innocent, unless otherwise expressly provided by any statute or law. A prosecution under Section 138 is not an exception to this. No provision in the Act rebuts such presumption of his innocence. Not even, section 139 of the Act. The said provision does not absolve the prosecution from proving its entire case beyond reasonable doubt. Section 139 of the Act only allows the court to presume just one of the ingredients/conditions/factors which is essentially to be proved by the prosecution in an offence under section 138 of the Act. By virtue of section 139 of the Act, all what the prosecution is relieved of is, to prove just one limb of the ingredients/requirements of the offence under Section 138 of the Act, provided the holder of the cheque establishes the basis for drawing, the presumption under section 139 of the Act. But, such limb of the ingredients which can be presumed under section 139 is not the factum or element of "issuance, execution or drawing" of the cheque by the accused.
19. But then, what exactly is the fact which can be presumed under section 139 of the Act ? What specifically is the nature of presumption available under section 139 of the Act ? On a close reading of the section, I find that the only fact which can be presumed under section 139 is the `PURPOSE' for which the cheque is received by the complainant. The court can presume under section 139 of the Act that the purpose for which the cheque is received by the holder is, "for discharge of a debt or liability". But, the court cannot presume that the cheque is "issuanced/executed/drawn" by the accused.
20. Much clamour is often made and heard across the bar that the Supreme Court held that there is a presumption under section 139 of the Act that the cheque is "issued" for the discharge of a debt or liability. Two decisions are oft- quoted on this aspect. Those are in K.N. Beena v. Muniyappan, 2001(4) RCR(Criminal) 545 : (2001)8 SCC 458, and in Hiten P. Dalal v. Bratindranath Banerjee, 2001(3) RCR(Criminal) 460 : ((2001)6 SCC 16). But, in my view, neither of those decisions, the Supreme Court laid down any proposition of law that there is a presumption under Section 139 of the Act in respect of "issuance/execution/drawing" of a cheque. It is held in Beena's case, (referring to Hiten P. Dalal's case) as hereunder :
"Under Section 139 the court has to presume, unless the contrary was proved, that the holder of the cheque received the cheque for discharge, in whole or in part, of a debt or liability. Thus in complaints under Section 138, the court has to presume that the cheque had been issued for a debt or liability. This presumption is rebuttable. However the burden of proving that a cheque had not been issued for a debt or liability is on the accused. This Court in the case of Hiten P. Dalal v. Bratindranath Banerjee has also taken an identical view" (emphasis supplied).
21. The Supreme Court, in Beena's case held that the court has to presume. under Section 139, unless the contrary was proved, that the holder of the cheque "received" the cheque `for discharge, in whole or in part, of a debt or liability'. The Supreme Court also held that in complaints under section 138, the court has to presume that the cheque has been "issued" for a debt or liability. Significantly, both expressions, "received' and "issued" are used therein by the Supreme Court. But, it is clear on reading the entire decision that the Supreme Court was giving emphasis to the expression "discharge of a debt or liability" and not to the word, "received" used in section 139 because both the words "received" and "issued" are seen used simultaneously, in the relevant context. At any rate, it cannot be said that the Supreme Court applying both the expressions "received" and "issued" to mean the same act viz., execution/drawing of the cheque. It cannot be so.
22. The expression "received" is not synonymous with the expression "issued" meaning, "executed". Those carry totally different meanings. Both these expressions connote different acts by different persons and may be, at different places also, in the context of sections 138 and 139 of the Act. The person who "issues" (meaning, "executes") the cheque for the purpose of sections 138 and 139 is the accused/drawer of the cheque whereas, the person who "receives' the cheque is the complainant/holder of the cheque. So also, the act of "issuance" and "receipt" of cheque take place at different point of time. The "issuance" of the cheque by the accused is an act preceding the act of "receipt" by the complainant, after it is "issued" by the accused. Thus, the latter succeeds the former in point of time.
23. Depending upon the facts of each case, even the place at which the cheque is "issued" may vary from the place where the cheque is "received". The cheque could be "issued" by the accused at one particular place and it can be "received' by the complainant at a different place. Thus, the persons involved, the acts involved, the time involved and even the places involved are all different in the case of the two expressions, "received" and "issued". For all the above reasons and more, the expression "received" which is used in section 139 of the Act, in my view, cannot be equated with the expression "issued", meaning executed.
24. In such circumstances, it will be absurd to contend or even imagine that the Supreme Court was introducing the expression "issued" (to mean, `executed') into section 139 of the Act, which is otherwise absent therein. None can be heard to say that the Supreme Court was importing an expression "issued" into the provision so as to enable a court to presume a fact which is not provided by the section. I am most reluctant to hold that the Supreme Court was incorporating a new word into section 139, whereby the court is allowed to draw a presumption on a very crucial fact, viz., execution of the cheque. As long as the word "issued" or "executed" is not used in section 139, I am not, for a moment, prepared to accept any argument that the Supreme Court was declaring a law, which even the legislature did not intend, that too, in respect of a mandatory legal presumption.
25. In my humble view, in the decisions cited above, the Supreme Court was only highlighting the expression, "for the discharge of a debt or liability" in the relevant context to hold that there is a presumption in section 139 of the Act in respect of the purpose for which the cheque is allegedly "received" by the holder. The presumption available in section 139 is only in respect of the purpose for which the cheque is "received" by the holder-complainant i.e., for the discharge of a debt or liability. The presumption which the court can draw under section 139 confines only to the expression, "for the discharge of a debt or liability" and not to the factum of issuance, i.e., execution or drawing of the cheque. The court cannot therefore, draw any presumption that a cheque is "issued/executed" by virtue of section 139, even if the accused admits his signature in the cheque. The argument that an alleged blank signed cheque can be presumed to be "executed/issued" for the discharge of a debt etc., by virtue of section 139, under no stretch of imagination be accepted.
26. Learned counsel for appellant would also argue that in the decisions reported in Mohanan v. Bibu Kumar, 2003(4) RCR(Criminal) 6 : (2003(2) KLT 825) and General Auto Sales v. Vijayalakshmi, 2005(2) RCR(Criminal) 97 : (2005(1) KLT 478) it is held that there is a presumption under section 139 of the Act in respect of a blank cheque. If a blank cheque is handed over, the person so handing over a cheque must be presumed to have given implied authority to such person to whom the cheque is handed over to fill up the relevant details, and hence the cheque must be presumed to have been executed by the drawer. It is also argued that in the light of the above rulings, such a presumption under Section 139 is available to all cheques including a cheque which is not in the handwriting of the drawer. Therefore, in an offence under section 138 of the Act, the accused cannot wriggle out of the liability under section 138 of the Act, even if the cheque is filled up later, it is strongly argued.
27. The above arguments often reverberate in the court rooms, not only in this case but, in majority of other cases involving an offence under section 138 of the Act. So, the discussions in this judgment will not be complete, without considering the merit of the above important argument.
28. In Mohanan v. Bibukumar, 2003(2) KLT 825, it is held by a learned single judge of this court as follows :
"Normally, in the absence of compelling reasons, it has to be assumed that the cheque was not a blank cheque when it was handed over. A person so handing over a blank cheque must be assumed to have given implied authority to such person to whom the cheque is handed over to fill up the relevant details......... The presumption under Section 139 of the Negotiable Instruments Act is available to all cheques and not only to cheques in the handwriting of the drawer."
29. In General Auto Sales v. Vijayalakshmi (2005(1) KLT 478) also, it was held :
"even if a blank cheque has been given towards liability is assessed and quantified, if the cheque is filled up and presented to the bank, the person who had drawn the cheque cannot avoid the criminal liability arising out of Section 138 of the N.I. Act."
30. But, on a close reading of both the above decisions, I could not come across with any thing therein to indicate that there is a presumption under Section 139 of the Act in respect of blank cheques, as argued. In neither of those decisions, this court was referring to or dealing with the scope of any presumption under section 139, particularly in reference to a blank cheque. This court has also not referred to either in Mohanan's case or General Auto Sales' case cited above, any provision of the Act or other statute which permits or mandates the court to draw any specific presumption, in respect of a blank cheque, as argued. This court cannot be understood to lay down in either of the decisions referred above, any proposition of law that there is such a legal presumption under section 139 of the Act regarding issuance of blank cheques.
31. In Mohanan's case this court was testing the worth of the materials before court, in the light of section 3 of Evidence Act, as specifically referred to in that judgment itself, and it was not on the basis of any provision relating to a 'presumption of fact' or `presumption of law' under section 139 of the Act, or any other statute, to lay down any proposition of law in respect of any presumption in the case of a blank cheque. This court in the above case, made a reference to section 3 of Evidence Act and held that a fact is said to be proved when, after considering the matters before it, the Court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists. (emphasis supplied)
32. But, it is needless to say that such a belief referred to in section 3 of Evidence Act can be formed only on the basis of materials placed before the court in each case. Section 3 of the Evidence Act comes into operation when the court examines whether a particular fact is proved or not, on the basis of the evidence before the court. But, it cannot be said that in each and every case or in all cases where blank cheques are produced, the court shall presume that a blank cheque is handed over by the drawer with an implied authority to fill it up. All `assumptions' referred to in Mohanan's case, therefore, have to be understood to confine to the facts of that case, but those have no reference to any `presumption in law' which is permitted by any statute or law or more particularly under section 139 of the Act.
33. Of course, there is an observation in Mohanan's case, that "the presumption under Section 139 of the Negotiable Instruments Act is available to all cheques and not only to cheques in the handwriting of the drawer". This proposition of law cannot be doubted for a moment. A close reading of the decision shows that this court only held that the presumption under section 139 of the Act applied to all cheques of the nature stated in section 138 of the Act, whether the cheque is in the handwriting of the drawer or not. If a particular cheque is proved to be of the nature stated in section 138, whether the handwriting in the cheque is of the drawer or not, presumption under section 139 will certainly apply, if the basis for drawing such presumption exists. But, it cannot be further understood to mean that there is a presumption under section 139 of the Act or any other provision in the Act or other statute that a blank cheque is given with an authority whether implied or express etc., to fill up the cheque as long as there is no provision therein allowing any presumption of law or fact to that extent.
34. In fact. Section 139 applies only if it is established that the cheque is of the nature stated to in Section 138 of the Act. Such a cheque must, necessarily be, one which satisfies the definition of "cheque" under section 6 read with section 5 of the Act. It must contain an order in writing to pay to a certain person a certain sum of money only etc. etc., as defined in the Act. There is nothing in section 139 to show that the prosecution is exonerated from proving that the cheque falls within the definition of the cheque under the Act. The cheques produced in all the cases under section 138, ordinarily contain an order in writing. But, that does not mean that the court shall immediately come to a conclusion that such cheques satisfy the definition under the Act.
35. In cases where the accused raises a plea that the cheque was a blank signed one when it was handed over or received by another person, the court will have to scan through the evidence and materials placed before it and decide whether the complainant "proved" that the accused has drawn a cheque of the nature defined under the Act or, whether it was only a signed blank cheque, which does not satisfy the definition of a cheque under the Act, when it was handed over. The former has to be proved by the prosecution, just as in any criminal prosecution whereas, the latter need only be probabilised, as in a defence case. The degree of proof certainly differs.
36. The court must also bear in mind, the legal import of the "presumption in law" and other type of inferences or presumptions which the court may make under section 3 of the Evidence Act. 'Presumptions in law' are of two kinds : i) presumption of law ii) presumption of fact. The former is drawn in cases where the statute uses the words like "shall be presumed" and the other is drawn in cases where it used the words like "may be presumed". The court may, in certain other circumstances also, make certain assumptions, presumptions or inferences, while evaluating the evidence and other materials placed before the court, as against normal human conduct etc. to decide whether a fact is proved or not under section 3 of the Evidence Act.
37. But, such assumptions drawn under section 3 of the Evidence Act cannot strictly be construed as either "factual presumptions" or "legal presumptions". Those presumptions are only inferences which do not get the hue and life of the "presumption in law", which the court "may" or "shall" draw, by virtue of the specific expressions contained in the statute as "may presume" or "shall presume". Any presumptions drawn by the court, in the absence of such specific expressions are not `presumptions in law' but those are only assumptions/presumptions/inferences made on the facts of that case and those will confine only to the facts of that case.
38. In a decision rendered by 3 learned judges of the Supreme Court, in State of Madras v. Vaidynanatha Iyer, 1958 SCR 580, 589, His Lordship, L.J. Kapur, J., held thus :
"It may here be mentioned that the legislature has chosen to use the words "shall presume" and not "may presume", the former a presumption of law and latter of fact. Both these phrases have been defined in the Indian Evidence Act."
39. In M. Narsinga Rao v. State of A.P., 2001(1) RCR(Criminal) 95 : (2001)2 SCC 691, His Lordship, K.T. Thomas, J., speaking for another three-judges Bench held as follows :
"Before proceeding further, we may point out that the expressions "may presume" and "shall presume" are defined in Section 4 of the Evidence Act. The presumptions falling under the former category are compendiously known as "factual presumptions" or "discretionary presumptions" and those falling under the latter as "legal presumptions" or "compulsory presumptions".
40. Later, in two of the decisions of the Supreme Court in T. Shankar Prasad v. State of A.P., 2004(1) RCR(Criminal) 784 : 2004(2) Apex Criminal 384 : (2004)3 SCC 753 and State of A.P. v. V. Vasudeva Rao, 2003(4) RCR(Criminal) 917 : 2004(1) Apex Criminal 648 : (2004)9 SCC 319 also, His Lordship Justice Arajit Pasayat also held thus :
"Before proceeding further, we may point out that the expressions "may presume" and "shall presume" are defined in Section 4 of the Evidence Act. The presumptions falling under the former category are compendiously known as "factual presumptions" or "discretionary presumptions" and those falling under the latter as "legal presumptions" or "compulsory presumptions".
41. In the above circumstances, in my humble view, none of the observations made in either of the decisions in Mohanan's case or General Auto Sales' case can be interpreted as a `presumption of law' or `presumption of fact' or much less, any presumption drawn under section 139 of the Act purportedly, in respect of a blank cheque. The relevant `assumptions' made in Mohanan's case are only inferences made by the court under section 3 of the Evidence Act, for the purpose of that case, on the basis of materials placed before the court.
42. In such circumstances, the observations made in Mohanan's case about blank cheque cannot be applied to the facts of this case, to draw a presumption under Section 139 that the blank cheque allegedly issued in this case was given with an authority to fill up the same etc. This is specially so, since no such allegations are made either in the complaint or in evidence or in any of the materials placed before me, allowing this court to draw such an inference of implied authority etc. In the absence of any specific allegation to that effect, I am not inclined to work on any hypothesis as argued, since those surmises do not gain support from the records, except by the colourful fancies of learned counsel for the appellant.
43. Now I shall revert hack to another important question of law which deserves serious consideration, on the facts and circumstances of this case. The question is, under what circumstances, the court shall draw a presumption under section 139 of the Act ? What are the pre-requisites to be established before a court draws the presumption under section 139 of the Act ?
44. Before proceeding with the above task, I shall profitably bear in mind that the presumption which the court is bound to draw only under specified circumstances. In view of the mandatory nature of the provision, a court must be extremely careful in drawing such presumption. The court must, at least be aware of the circumstances under which such presumption be drawn, before drawing the presumption under section 139 of the Act.
45. A reading of section 139 of the Act shows that a presumption in respect of a debt or liability can be drawn, if the following facts are established viz., i) that the person in whose favour the presumption is drawn is the holder of the cheque ii) that the cheque is of the nature stated in section 138 of the Act iii) that such cheques is "received" by the holder. Only if the above three conditions are satisfied, the court can draw a presumption under section 139 of the Act. But then, on whom does the burden lie to establish the above facts ?
46. The presumption under section 139 of the Act, as revealed from the title to section itself, is in favour of the "holder" of the cheque. Such presumption is drawn against an accused who, as in any other criminal prosecution, is presumed to be innocent. So, if the holder has to avail of the benefit of the presumption under section 139 of the Act, the burden is on him to establish all the pre-requisites for drawing such presumption. Only if the holder establishes the basis for raising a presumption under section 139 of the Act, the court shall draw such presumption. But, once the basis of presumption exists, the court is left with no other option than to draw such presumption under section 139 of the Act.
47. It is so held by the Supreme Court in Hiten P. Dalal's case cited above thus :
"In other words, provided the fact required to form the basis of a presumption of law exists, no discretion is left with the court to draw the statutory conclusion."
(emphasis supplied)
48. So, a court shall draw the presumption under section 139 of the Act, only if all the requirements for drawing the presumption under section 139 of the Act are established by the `holder' of the cheque. Such pre-requisites under section 139 are, i) that the person in whose favour the presumption is drawn is the holder of the cheque ii) that the cheque is of the nature stated in section 138 of the Act iii) that such cheque is `received' by the holder.
49. In a case where the pre-requisites under section 139 of the Act are not established or the basis for drawing the presumption does not exist, the court shall not presume that the cheque was drawn for the purpose of discharging a debt or liability under section 139 of the Act. In such a case, the prosecution has to independently prove all ingredients of section 138 including the alleged purpose for which the cheque is drawn i.e., it is for the discharge of a debt or liability. It also follows in such cases that no burden is cast on the accused to rebut any presumption under section 139, since no presumption arises at all. The accused cannot then be called upon to prove that the cheque was not drawn for the discharge of a debt or liability. The burden will be entirely upon the complainant to prove all ingredients of section 138 of the Act.
50. I have already held that one of the requirements for drawing the presumption under section 139 of the Act is that the cheque is "received" by the holder. The cheque can reach the hands of a person in many ways. It can be, as handed over by the drawer, for the discharge of a debt or liability. It could be as a finder of a lost or misplaced cheque. It could be as taken away by force. It could be by committing theft. It could have been procured by the alleged holder in a number of ways. But, for drawing a presumption under section 139 of the Act, the court must be satisfied that the holder of the cheque "received" the cheque by entitlement and that he did not procure it by any other means.
51. Before drawing presumption under section 139, the court must be satisfied that the person who seeks the benefit of the presumption in section 139 is the "holder" as defined under section 8 of the Act. That is, such person is entitled in his own name to the possession of the cheque and also to receive the amount due from the parties thereto. It must be established that such a person is in possession of same by way of entitlement. So, there must be evidence at least for the fact that he "received" the cheque as of right and did not obtain it by any other mode the court is satisfied that he is the "holder" of the cheque of the nature stated in section 138 and that he "received" the same, the court can safely draw the presumption under section 139 of the Act.
52. But, on the facts of this case, there is no evidence to show that the holder/complainant "received" the cheque. The receipt of cheque by the complainant is a very crucial factor in the peculiar facts and circumstances of this case. The accused has a definite case that a blank signed cheque was handed over to PW1 (the power-of-attorney-holder), in connection with another transaction which is misused by her to file the present complaint. But, he does not even know the complainant and he did not also give the cheque Exhibit P2 to her.
53. In such circumstances, the court must be satisfied that the complainant "received" Exhibit P2 cheque. But curiously, there is absolutely no material on record to show that the complainant received the cheque. The complaint is manifestly silent on this aspect. It is only stated in the complaint that the cheque was "issued" from PW1's house. But, there is no averment that the cheque was given to or received by the complainant or even by PW1. There is also no evidence to prove this crucial fact. While PW1 was examined in court, she did not state that the cheque was given to the complainant or that it was received by the complainant.
54. PW1 is the only person examined to prove the alleged transaction. But, she has no case that the cheque was received by the complainant. She did not say that she had seen the accused handing over the cheque to the complainant. No other person is examined to prove the relevant fact. The complainant did not mount the box. She did not even appear in court or give evidence. She is the best person to speak about the relevant fact. But, the complainant is held back without any explanation, despite all the allegations made against PW1 that she has forged the signed blank cheque given to her in connection with another transaction etc., to foist a false case against the accused. In the absence of the complainant, at least, some other person who could give direct evidence on the crucial fact ought to have been examined. That was also not done.
55. In the above circumstances, there is total lack of evidence to establish that the cheque is "received" by the complainant and hence the complainant failed to establish one of the pre-requisites for drawing a presumption under section 139 of the Act. She could not establish that she is the holder of the cheque as defined under section 8 of the Act. Therefore, the basis for drawing presumption does not exist in this case and hence no presumption arises in this case under section 139. The prosecution has also failed to establish that the cheque was drawn for the discharge of any debt or liability towards the complainant.
56. In the above circumstances, the accused cannot be called upon to prove that the cheque was not drawn for the purpose of discharging any debt or liability, as argued. The evidence, facts and circumstances which I have discussed in detail towards the beginning of this judgment reveal that the prosecution failed to prove that the accused committed the offence under section 138 of the Act. The trial court rightly acquitted the accused, even though it was on some other grounds.
On the facts of this case, I also do not find any reason to interfere with the order passed by the trial court for proceeding under Section 250 of the Code.
This appeal is dismissed.
