Case title:

SUBRATA BOSE v. MITHU GHOSH

Date of Order:

NOVEMBER 7, 2022

Bench:

HON’BLE JUSTICE TIRTHANKAR GHOSH

Parties:

APPELLANT: SUBRATA BOSE

RESPONDENT: MITHU GHOSH

SUBJECT:

In this case, the accused was initially found guilty for a dishonoured cheque under Section 138 of the Negotiable Instruments Act (N.I. Act). On appeal, however, the Appellate Court cleared the accused, citing the complainant's inability to establish a legally recoverable debt and differences in the ink on the cheque as justifications. The judgement emphasises the use of Section 139 of the N.I. Act, the necessity for the accused to present a plausible defence, and the burden of proof placed on the complainant to establish that the cheque was issued in satisfaction of a debt that was legally enforceable. In the end, the Trial Court's conviction and sentence were upheld, and the Appellate Court's acquittal was reversed.

IMPORTANT PROVISIONS:

NEGOTIABLE INSTRUMENT ACT, 1881 –

1. Section 138 - Relating to the offense of dishonor of a cheque for insufficiency of funds or other reasons.
2. Section 139 - Establishes a presumption that the holder of a cheque received it in discharge, in whole or in part, of any debt or other liability unless proved otherwise.
3. Section 118 - Pertains to presumptions as to negotiable instruments and includes various legal presumptions regarding the date of a promissory note or bill of exchange.

CODE OF CRIMINAL PROCEDURE, 1973 –

1. Section 421 - Deals with the execution of sentences, including the recovery of fines and penalties imposed by a court.

OVERVIEW:

1. A complaint regarding a dishonoured cheque was filed in this case in accordance with Section 138 of the Negotiable Instruments Act (N.I. Act).
2. In Case No. 466/2009 (TR Case No. 324/09), the learned Trial Court found the defendant guilty and handed down a sentence.
3. The learned Additional Sessions Judge, FTC 3rd Court, Barrackpore, 24 Parganas North, heard the criminal appeal filed by the accused, Criminal Appeal No. 06/17.
4. On July 1, 2017, the accused was found not guilty by the Appellate Court, which had heard arguments from both sides.
5. The Appellate Court's decision to acquit was made for the following reasons:
   1. The complainant (PW1) failed to present a contract for the broadcast of a TV series, a trade licence, or a tax return.
   2. Although the complainant had two bank accounts, neither of his tax returns nor any other documentation from the relevant transaction period contained the names of the friends he had mentioned.
   3. The complainant was unable to demonstrate that the accused received the funds as a loan or advance on specific dates.
   4. No supporting paperwork or piece of paper was produced to prove the transaction, and the disputed cheque had different ink for the signature and the other information.
6. The Appellate Court used Section 139 of the N.I. Act and determined that the complainant had failed to independently establish that the cheque was issued in discharge of a legally recoverable debt and that the presumption in favour of the drawer (accused) is a rebuttable presumption.
7. The Appellate Court also mentioned that the accused's arguments that the complainant lacked the financial means to pay and that there were inconsistencies in the colour of the ink on the cheque were insufficient to disprove the Section 139 presumption.
8. The accused appealed the verdict, claiming that the appellate court erred by requiring proof beyond a reasonable doubt when the standard does not apply to cases involving the N.I. Act.
9. The complainant endorsed the decision of the Appellate Court and emphasised the need for the complainant to demonstrate that the cheque was written to satisfy a legally binding obligation or liability.
10. The judgement cites pertinent rulings by the Hon. Supreme Court, such as the requirement that the accused must present a plausible defence in order to refute the Section 139 presumption.
11. The Trial Court's conviction and sentence were upheld, and the Appellate Court's decision was reversed. The accused was given a deadline within which to comply with the order.

• The accused appealed against a conviction for dishonoring a cheque under Section 138 of the Negotiable Instruments Act, 1881. The trial court convicted the accused based on the presumption that a cheque is issued for the discharge of a debt or liability unless proven otherwise.
• The appellate court set aside the conviction and acquitted the accused due to the complainant's failure to provide evidence, discrepancies in the ink used, and the absence of supporting documents. The Supreme Court overturned the acquittal and confirmed the trial court's conviction and sentence.

ISSUES RAISED:

Whether the appellate court erred in setting aside the conviction under Section 138 of the Negotiable Instruments Act, 1881, based on the presumption established under Section 139, considering the complainant's failure to provide sufficient evidence and the accused's inability to raise a probable defense to rebut the presumption?

ARGUMENTS ADVANCED BY THE APPELLANT:

1. The appellate court erred in emphasising the differences between the ink used for the signature and the body of the cheque because the cheque in question was admitted into evidence without opposition.
2. The complainant's cross-examination revealed that the accused had merely denied the allegations, and the defence had not offered any substantive evidence to refute the complainant's allegations.
3. The standard of proof beyond a reasonable doubt, which is inapplicable in cases governed by the Negotiable Instruments Act, was incorrectly applied by the appellate court. A presumption in favour of the complainant is established by Section 139 of the Act and is rebuttable.
4. The accused should not have been exonerated because the complainant failed to present a contract for the broadcast of the TV serial, a trade licence, an income tax return or any other documentation proving the transaction.
5. The conviction shouldn't have been overturned because the complainant was unable to provide specific dates or receipts for the borrowed money.
6. The accused made no claims that the cheque was a lost or stolen item, nor did they contest the signature on it.
7.  The appellate court's observations about the check's ink and the lack of a piece of paper were insufficient evidence to draw the conclusion that the check was not issued to discharge liability.

ARGUMENTS ADVANCED BY THE RESPONDENT:

1. The accused should have been found not guilty due to the complainant's inability to present solid proof of the transaction and the ink differences on the cheque.
2. The appellate court's observations about the ink on the cheque and the lack of a supporting document provided sufficient evidence to conclude that the cheque might not have been issued to satisfy a legal obligation or liability.
3. The lack of a TV serial broadcast agreement, a trade licence, income tax returns, or any other supporting documentation from the complainant raises questions about the legitimacy of the debt.
4. The complainant's inability to provide receipts or specific dates to support the alleged loan amount cast doubt on the veracity of the claim.
5. The accused did not dispute the signature on the cheque, but he highlighted the ink differences between the signature and the rest of the cheque to imply irregularities.
6. The standard of proof beyond a reasonable doubt, which does not apply in cases governed by the Negotiable Instruments Act, was correctly applied by the appellate court.

JUDGEMENT ANALYSIS:

1. The judgement emphasised the significance of Section 139 of the Negotiable Instruments Act (N.I. Act), which establishes a legal presumption that, unless proven otherwise, a cheque is issued to discharge a debt or liability.
2. The accused must bear the burden of proof to disprove the presumption, the court emphasised, in accordance with Section 139. This is an illustration of a "reverse onus clause," which places the onus of proof on the defendant.
3.  The accused does not have to provide evidence that is of an excessively high standard, the court ruled. Instead, the burden of proof shifts to the accused, who must present a plausible defence using a "preponderance of probabilities."
4. The court acknowledged that the complainant does not initially need to demonstrate their financial capacity in cases brought under Section 138 of the N.I. Act. The onus is now on the defendant to prove there is no debt or liability.
5.  The court emphasised that the accused may challenge the complainant's capacity and the existence of a debt by questioning the complainant's witnesses in cross-examination.
6.  The accused must first establish an initial defence using techniques like reply notices or by questioning witnesses and providing documentary evidence in order to successfully refute the presumption under Section 139.

7.  According to the judgement, the accused in this case did not raise an initial defence questioning the complainant's capacity or the existence of a debt. The check's signature was not contested.
8. The appellate court was faulted by the appeals court for relying on speculative issues like variations in ink without sufficient support or allegations of misplaced checks. Such flaws shouldn't be enough to invalidate the statutory presumption.
9. The court found that the accused had not successfully rebutted the presumption under Section 139 of the N.I. Act in light of the statutory presumption, the absence of an initial defence, and the lack of compelling evidence.
10. As a result, the court upheld the trial court's conviction and sentence and overturned the appellate court's judgement and order of acquittal.
11. According to the court, the conviction and sentence imposed by the trial court should stand given the statutory presumption under Section 139 and the accused's inability to provide a convincing defence.

CONCLUSION:

To conclude, finally, the court reversed the acquittal and upheld the accused's conviction and sentence in this case. The court emphasised the importance of the statutory presumption provided by Section 139 of the Negotiable Instruments Act and noted that the absence of an initial defence and the accused's inability to establish a probable defence were key factors in this decision.