JUDGMENT
E. Dharma Rao, J.
1.
The complainant and the accused in all these three criminal appeals are one and the same, and as such, they are being disposed of by this common judgment.
2. The complainant filed these appeals challenging the acquittal of the accused by the VIII Metropolitan Magistrate, Vijayawada, for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for shot ‘the NI Act’).
3. Narrowly stated, the facts of the case are – the complainant is a Daily Newspaper, owned by M/s. Ushodaya Publications, and the accused is the proprietor of M/s. Triveni Advertisements. The accused got published certain advertisements in the newspaper of the complainant in the months of December 1992 and January, 1993, and as a result of such transaction, the accused owed a sum of Rs. 2,53,977-85 ps. to the complainant. The accused issued eight cheques (Cheque Nos. 232869 dated 10-1-1993, 233037, dated 22-1-1993, 232859, dated 3-1-1993, 233027 & 233028, dated9-1-1993, 232263, dated 17-12-1992, 232269, dated 19-12-1992, 232853, dated 26-12-1992) for different amounts, drawn on Indian Bank, Vijayawada. When the complainant presented the cheques for encashment on different dates, they were dishonoured. The complainant informed the accused about the dishonour of cheques. The accused requested the complainant to present the cheques again. Again, when the cheques were presented, they were dishonoured with an endorsement ‘insufficient funds’ in the account of the accused. The complainant got issued registered legal notice to the accused complaining about the dishonour of cheques and requested him to arrange payment within 15 days of receipt of the notice. As the accused neither replied to the said notice nor paid the amounts, the accused filed three different complaints against the accused before the trial Court.
4. Before the trial Court, the complainant contended that the accused issued eight cheques for different amounts towards the dues, which he incurred on account of his getting published in their news paper certain advertisements, and that when they were presented, they were dishonoured and that though he got issued legal notice, the accused neither replied nor paid the amounts, and therefore, the accused is guilty of an offence punishable under Section 138 of the NI Act. On the other hand, the accused contended that there does not exist any relationship between the complainant and the accused, that the persons who filed the complaints is not authorized to file the complaints, that the complainant did not file any documents in support of his case that the accused owes certain amounts to the complainant.
5. On behalf of the complainant PWs. 1 to 4 were examined and certain documents, including cheques said to have been issued by the accused, were marked, whereas on behalf of the accused none were examined and no exhibit was marked.
6. The learned trial Court upon considering the evidence and the material placed before it dismissed the complaints holding that the complainant failed to prove the debt of the accused in relation to the cheques issued by him, and accordingly acquitted the accused of the offence punishable under Section 138 of the NI Act. Hence, these appeals by the complainant.
7. The learned counsel appearing on behalf of the appellant-complainant submitted that the accused got published certain advertisements in the newspaper of the complainant in the month of December, 1992 and January, 1993, and in the course of such transaction, the accused owed to the complainant a sum of Rs. 2,53,977-85 ps., and in order to discharge such debt, the accused issued eight cheques for different amounts, and when presented, they were dishonoured. When the accused neither replied nor paid the amount within 15 days from the date of issue of legal notice by the complainant, the complainant filed complaints, and the learned trial Judge fell in error in acquitting the accused holding that the complainant failed to prove the debt of the accused. He further submitted that under Sections 118, 138 and 139 of the NI Act, a mandatory presumption can be placed that the cheques issued by the accused relate to the recovery of a legally recoverable debt, and in support of this submission, he placed reliance upon the decision of the apex Court in Hiten P. Dalal v. Bratindranath Banerjee, .
The learned counsel for the respondent-accused contended that the trial Court has rightly acquitted the accused of the offence punishable under Section 138 of the NI Act holding that the complainant has failed to prove that the cheques issued by the accused relate to legally recoverable debt. He further contended that the person who filed the complaints is not authorized by M/s. Eenadu to file such complaints. He further contended that no presumption, as submitted by the learned counsel for the appellant, can be placed under Sections 118, 138 and 139 of the NI Act. He thus submitted that the appeals be dismissed.
8. The apex Court in Hiten P. Dalal, had an occasion to deal with the questions of presumption under Sections 118, 138 and 139 of the NI Act, and it observed that the Bank was entitled to and had in fact rely upon three presumptions in support of its case, namely, under Sections 118, 128 and 139 of the Negotiable Instruments Act. That under Section 118, until the contrary is proved it shall be presumed that every negotiable instrument was made or drawn for consideration, and that every such instrument when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration. Further the presumption under Section 138 is more specific that where any cheque drawn by a person on an account for payment of any amount of money for the discharge in whole or in part of any debt or other liability, is returned by the drawee bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque, such persons shall be deemed to have committed an offence and shall be punished with imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of the cheque, or with both. That the nature of the presumption under Section 138 is subject to the three conditions specified relating to presumption, giving of the notice and the non-payment after receipt of notice by the drawer of the cheque. That under Section 139 the presumption is to place the evidential burden on the appellant of proving that the cheque was not received by the Bank towards the discharge of any liability.
9. Considering the words “shall presume” appearing in Section 138 and 139 of the Act, the apex Court relying upon its judgment in State of Madras v. Vaidyanatha Iyer, held that it is obligatory upon the court to raise this presumption in every case where the factual basis for the raising of the presumption had been established. That it introduces an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the accused. Such a presumption is a presumption of law, as distinguished from a presumption of fact which describes provisions by which the court “may presume” a certain state of affairs. Presumptions are rules of evidence and do not conflict with the presumption of innocence, because by the latter, all that is meant is that the prosecution is obliged to prove the case against the accused beyond reasonable doubt. That the obligation on the prosecution may be discharged with the help of presumptions of law or fact unless the accused adduces evidence showing the reasonable possibility of the presumed fact.
The observations of the apex Court in Hiten P. Dalal, in my opinion, can squarely be applied to the facts and circumstances of the present case. In the instant case, eight cheques bearing Nos. 232869, dated 10-1-1993, 23307, dated 22-1-1993, 232859, dated 311-1993, 233027 and 233028, dated 9-1-1993, 232263, dated 17-12-1992, 232269, dated 19-12-1992 and 232853, dated 26-12-1992 in relation to the transactions between the complainant and the accused. When the cheques were presented, they were returned with an endorsement ‘insufficient funds’ in the account of the accused. When the accused failed to pay the amount within 15 days from the date of issue of notice, as contemplated under the Act, the complainant filed the complaints alleging that the cheques issued by the accused were in relation to the discharge of legally recoverable debt. The contention of the accused that the cheques issued by him were not in relation to the legally recoverable debt, even if accepted to be true, having regard to the judgment of the apex Court in Hiten P. Dalal, the Court can statutorily presume the liability under Sections 118, 138 and 139 of the NI Act that such a presumption can be rebutted or disproved by the accused. The prosecution has to prove by adducing evidence that the cheques were issued in relation to the discharge of debt or other liability. Even if the contention of the accused that the cheques issued by him were by way of security and not in relation to discharge of any other liability of the complaint, is accepted, still the Court can presume that the cheques were issued in relation to legally recoverable debt under Sections 118, 138 and 139 of the Act. The presumption, thus, is not final for it can be rebutted by the accused by adducing satisfactory evidence. The apex Court in Hiten P. Dalal, went further and observed that the complainant need not prove that the cheques are issued in discharge of legally recoverable debt, that the Court can draw statutory presumption that the cheques are issued in relation to discharge of legally recoverable debt, and such presumption can be rebutted by adducing evidence. That a fact is said to be proved when, after considering the matters before it, the Court either believes 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. Therefore, the rebuttal need not be conclusively established, but such evidence must be adduced before the Court in support of the defence that the Court must either believe the defence to exist or consider its existence to be reasonably probable, the stand of reasonability being that of a prudent man.
10. In the instant case, the accused simply denied in his reply notice that the cheques issued by him were in relation to the legally enforceable debt, but entered the witness box to rebut the presumption. Therefore, the Court below ought to have presumed that the eight cheques were issued in relation to the discharge of legally enforceable debt in stead of dismissing the complaints on the ground that the cheques were not issued in relation to legally recoverable debt. Thus, the prosecution in the absence of rebuttable evidence on the above said presumption that the cheques were not issued in relation to legally recoverable debt, has proved its case.
11. Insofar as the contention of the learned counsel for the accused that the person who filed the complaints is not authorized to do so, and as such, the complaints are liability to be dismissed, is concerned, the apex Court in M/s. MMTC v, Medchal Chemicals & Pharma (P) Limited, 2001 AIR SCW 4793, has held that if any special statute prescribes offences and make any special provision for taking cognizance of such offences, under the statute, then the complaint requesting the Magistrate to take cognizance of the offence must satisfy the eligibility criterion prescribed by the statute. The only eligibility criterion prescribed by Section 142 is that the complaint under Section 138 must be by the payee or the holder in due course of the said cheque. This criterion is satisfied as the complaint is in the name and on behalf of the appellant company who is the payee of the cheque. Merely because complaint is signed and presented by a person, who is neither an authorized agent nor a person empowered under the Articles of Association or by any resolution passed by the Board to do so, is no ground to quash the complaint. It is open to the de jure complainant company to seek permission of the Court for sending any other person to represent the company in the Court.
12. Thus, even presuming, that initially there was no authority, still the company can, at any stage, rectify that defect by sending a person who is competent to represent it.
13. In these circumstances, it cannot be said that the person who made the complaint was not an authorized officer to represent the complainant company for the complaints were filed in the name of the payee, Eenadu Daily Newspapers, a Division of Ushodaya Publications, Vijayawada. In view of the judgment of the apex Court in M/s. MMTC, I am unable to appreciate the contention of the learned counsel for the accused that the complaints are liable to be dismissed for lack of authority to file.
14. The above facts clearly go to show that a mandatory presumption can be placed that the cheques issued by the accused are towards discharge of the legally recoverable debt of the complainant. Thus, the prosecution, in my opinion, has proved beyond reasonable doubt, the charge levelled against the accused under Section 138 of the NI Act.
15. From the above discussion, I am satisfied that the order passed by the Court below is liable to be set aside, and it is accordingly set aside. However, having regard to the fact that the prosecution has proved beyond reasonable that the accused has issued the cheques towards discharge of legally recoverable debt, which were dishonoured, this Court in stead of sending the accused to prison feels it appropriate to direct the accused to pay compensation to the complainant.
16. In the result, I allow the three criminal appeals, filed by the complainant, holding that the accused is guilty of the offence punishable under Section 138 of the NI Act. However, in stead of sentencing the accused to undergo imprisonment, I direct him to pay to the complainant in all these three appeals a sum of Rs. 2,54,000/- under Section 544 of the Code of Criminal Procedure, 1972.