RAJARAM S/O SRIRAMULU NAIDU (SINCE DECEASED) THROUGH L.RS.
versus
MARUTHACHALAM (SINCE DECEASED) THROUGH L.RS.
The Criminal Appeals challenge the common judgment and order of conviction
and sentence dated 28th October 2008 and 30th October 2008 passed by the Madras
High Court whereby the Appellant has been convicted under Section 138 of the
Negotiable Instruments Act, 1881 (hereinafter referred to as “the N.I. Act”) and has
been sentenced to a fine of Rs. 7 Lakhs in each case in respect of two cheques for an
amount of Rs. 3.5 Lakhs.
The Civil Appeals challenge the judgments dated 08th August 2011 and 03rd
February 2012 passed by the Madras High Court whereby the Original Suits filed by
the plaintiffrespondents for recovery of money on the basis of promissory notes were
decreed.
Since both the Criminal Appeals arise out of a common judgment, we consider
it apposite to refer to the facts in Criminal Appeal No.1978 of 2013. Insofar as the Civil
Appeals are concerned, while they arise out of different judgments, for the sake of
convenience, we shall refer to the facts arising from Civil Appeal No.10501 of 2013.
It can thus be seen that this Court has held that once the execution of cheque
is admitted, Section 139 of the N.I. Act mandates a presumption that the cheque was
for the discharge of any debt or other liability. It has however been held that the
presumption under Section 139 is a rebuttable presumption and the onus is on the
accused to raise the probable defence. The standard of proof for rebutting the
presumption is that of preponderance of probabilities. It has further been held that to
rebut the presumption, it is open for the accused to rely on evidence led by him or the
accused can also rely on the materials submitted by the complainant in order to raise
a probable defence. It has been held that 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.
In the present case, the accused appellant had examined Mr. Sarsaiyyn,
Income Tax Officer, Ward No.18, Circle (II) (5), who produced certified copies of the
Income Tax Returns of the complainant for the financial year 1995-96, 1996-97,
1997-98 and 1998-99. The certified copies of the Income Tax Returns established that
the complainant had not declared that he had lent Rs.3 lakh to the accused. It further
established that the agricultural income also was not declared in the Income Tax
Returns
The learned Trial Court further found that from the income which was shown in
the Income Tax Return, which was duly exhibited, it was clear that the complainant(s)
did not have financial capacity to lend money as alleged.
After analyzing all these pieces of evidence, the learned Trial Court found that
the Income Tax Returns of the complainant did not disclose that he lent amount to the
accused, and that the declared income was not sufficient to give loan of Rs.3 lakh.
Therefore, the case of the complainant that he had given a loan to the accused from
his agricultural income was found to be unbelievable by the learned Trial Court. The
learned Trial Court found that it was highly doubtful as to whether the complainant had
lent an amount of Rs.3 lakh to the accused. The learned Trial Court also found that
the complaint had failed to produce the promissory note alleged to have been
executed by the accused on 25th October 1998. After taking into consideration the
defence witnesses and the attending circumstances, the learned Trial Court found that
the defence was a possible defence and as such, the accused was entitled to benefit
of doubt. The standard of proof for rebutting the presumption is that of preponderance
of probabilities. Applying this principle, the learned Trial Court had found that the
accused had rebutted the presumption on the basis of the evidence of the defence
witnesses and attending circumstances.
In the present case, we are of the considered opinion that the defence raised
by the appellant satisfies the standard of “preponderance of probability”.
In that view of the matter, we are further of the considered view that the High
Court was not justified in reversing the order of acquittal of the appellant.
That leaves us to consider the Civil Appeals. Insofar as the Civil Appeals are
concerned, the High Court, by two different judgments and orders, has reversed the
judgments and orders of the learned Trial Court dismissing the suits, thereby
decreeing them. It is a settled proposition of law that the standard of proof in criminal
proceedings differs with that in civil proceedings.
A distinguishing fact between the criminal proceedings and the civil proceedings
in the present case is that, while in the criminal proceedings the complainant had failed
to produce the promissory notes, in the civil proceedings, the complainant had proved
the promissory notes. The High Court found that the Civil Appeals were required to be
decided on the basis of the preponderance of probabilities. The High Court found that
the complainant had established that he was working as a LIC Agent, that his father
was owning extensive agricultural properties and that he was deriving agricultural
income. The High Court, on the basis of the evidence placed on record, relying on the
preponderance of probability, came to a conclusion that the plaintiff had the financial
ability to lend the sum of Rs.3 lakh as on 20th October 1998. The High Court also found
that the appellant’s wife was not examined as a witness in the said case so as to
probabilize the defence plea. The High Court found that the best available evidence
was withheld by the defendants/appellants herein and as such, the principle of
adverse inference was also applicable.
Though it was sought to be argued before the High Court that in view of the
judgment in the criminal proceedings, the suit(s) was also liable to be dismissed, the
High Court rightly observed that the adjudication in civil matters is based on
preponderance of probabilities whereas adjudication in criminal cases is based on the
principle that the accused is presumed to be innocent and the guilt of the accused
should be proved to the hilt and the proof should be beyond all reasonable doubt.
Criminal Appeals Allowed