Commissioner of Customs Vs. State and anr. - Court Judgment

Excerpt:
[k.g. balakrishnan; p. sathasivam; j.m. panchal, jj.]negotiable instruments act, 1881 - sections 138, 139, 118(a) - dishonour of cheque for insufficiency, etc., of funds in the account -- in the present case, the trial court had acquitted the appellant-accused in a case related to the dishonour of a cheque under section 138 of the negotiable instruments act, 1881 [hereinafter `act']. the accused had then issued a cheque bearing no. 0886322, post-dated for 8-2-2001 for rs. 45,000 drawn on syndicate bank, kudremukh branch. consequently, on 8-2-2001, the complainant had presented this cheque through karnataka bank, ranebennur for encashment. the complainant had then issued notice to the accused in this regard on 26-2-2001. it was observed that the accused's failure to reply to the notice sent by the complainant did not attract the presumption under section 139 of the act since the complainant had failed to prove that he had given a hand loan to the accused and that the accused had issued a cheque as alleged. however, on appeal against acquittal, the high court reversed the findings and convicted the appellant-accused. this presumption is of a rebuttal nature and the onus is then on the accused to raise a probable defence. with regard to the present facts, the high court found that the defence raised by the accused was not probable. in respect of the accused's stand that he had lost a blank cheque bearing his signature, the high court noted that in the instructions sent by the accused to his bank for stopping payment, there is a reference to cheque no. 0886322, dated 20-7-1999. this is in conflict with the complainant's version wherein the accused had given instructions for stopping payment in respect of the same cheque, albeit one which was dated 8-2-2001. the high court also noted that if the accused had indeed lost a blank cheque bearing his signature, the question of his mentioning the date of the cheque as 20-7-1999 could not arise. furthermore, during the cross-examination of the complainant, it was suggested on behalf of the accused that the complainant had the custody of the cheque since 1998. this suggestion indicates that the accused was aware of the fact that the complainant had the cheque, thereby weakening his claim of having lost a blank cheque. once the cheque relates to the account of the accused and he accepts and admits the signatures on the said cheque, then initial presumption as contemplated under section 139 of the negotiable instruments act has to be raised by the court in favour of the complainant. the presumption referred to in section 139 of the n.i. act is a mandatory presumption and not a general presumption, but the accused is entitled to rebut the said presumption. the defence raised by the accused was that a blank cheque was lost by him, which was made use of by the complainant. presumptions as to negotiable instruments. the purpose of a post-dated cheque is to provide some accommodation to the drawer of the cheque. existence of legally recoverable debt is not a matter of presumption under section 139 of the act. the courts below, as noticed hereinbefore, proceeded on the basis that section 139 raises a presumption in regard to existence of a debt also. apart from not raising a probable defence, the appellant-accused was not able to contest the existence of a legally enforceable debt or liability. the appellant engaged the services of the respondent-engineer for supervising the construction of his house. the appellant requested the respondent for a hand loan to meet the construction expenses. in view of the acquaintance, the respondent paid the same by way of cash. the appellant issued a cheque for repayment of the said amount. the respondent presented the cheque for encashment. the bank issued a return memo stating that the payment had been stopped by the drawer. thereafter, the appellant did not honour the cheque within the statutorily prescribed period and also did not reply to the notice u/s. 138 of the negotiable instruments act, 1881. the respondent filed a complaint against the appellant for offence punishable u/s.138 of the act. the trial court acquitted the appellant u/s.138 in view of some discrepancies in the complainant's version. the high court holding that the appellant did not raise a probable defence to rebut the statutory presumption, convicted the appellant for commission of offence u/s. 138 of the act and directed to pay fine of rs. 75,000/-. hence the present appeal. disposing of the appeal, the court held: 1. ordinarily in cheque bouncing cases, what the courts have to consider is whether the ingredients of the offence enumerated in s.138 of the negotiable instruments act, 1881 have been met and if so, whether the accused was able to rebut the statutory presumption contemplated by s.139 of the act. with respect to the facts of the instant case, it must be clarified that contrary to the trial court's finding, s.138 of the act can indeed be attracted when a cheque is dishonoured on account of `stop payment' instructions sent by the accused to his bank in respect of a post- dated cheque, irrespective of insufficiency of funds in the account. [para 9] [518-d-f] goa plast (pvt.) ltd. v. chico ursula d'souza (2003) 3 scc 232, referred to. 2.1. the presumption mandated by s.139 of the act does indeed include the existence of a legally enforceable debt or liability. this is in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. however, there can be no doubt that there is an initial presumption which favours the complainant. section 139 of the act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. while s.138 of the act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption u/s. 139 is a device to prevent undue delay in the course of litigation. however, it must be remembered that the offence made punishable by s.138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. in such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused/defendant cannot be expected to discharge an unduly high standard or proof. in the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. when an accused has to rebut the presumption under s.139, the standard of proof for doing so is that of `preponderance of probabilities'. therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own. [para 14] [525-g; 526-a-g] 2.2. the high court's view that the accused did not raise a probable defence is accepted. the defence of the loss of a blank cheque was taken up belatedly and the accused had mentioned a different date in the `stop payment' instructions to his bank. the instructions to `stop payment' had not even mentioned that the cheque had been lost. a perusal of the trial record also shows that the accused appeared to be aware of the fact that the cheque was with the complainant. furthermore, the very fact that the accused had failed to reply to the statutory notice u/s.138 of the act leads to the inference that there was merit in the complainant's version. apart from not raising a probable defence, the appellant-accused was not able to contest the existence of a legally enforceable debt or liability. the fact that the accused had made regular payments to the complainant in relation to the construction of his house does not preclude the possibility of the complainant having spent his own money for the same purpose. as per the record of the case, there was a slight discrepancy in the complainant's version, in so far as it was not clear whether the accused had asked for a hand loan to meet the construction-related expenses or whether the complainant had incurred the said expenditure over a period of time. either way, the complaint discloses the prima facie existence of a legally enforceable debt or liability since the complainant has maintained that his money was used for the construction-expenses. since the accused did admit that the signature on the cheque was his, the statutory presumption comes into play and the same has not been rebutted even with regard to the materials submitted by the complainant. thus, there is no reason to interfere with the final order of the high court which recorded a finding of conviction against the appellant. 1. whether reporters of local papers may be allowed to see the judgment? yes.2. to be referred to the reporter or not? yes.3. whether judgment should be reported in digest? yes. 1. the petitioner by this petition has assailed order dated 13 th april, 2010 whereby the learned acmm exercised power under section 67 of ipc and sentenced the commissioner of customs to imprisonment for a period of six months for non-payment of cost of rs. 23,307/-.2. section 67 of ipc reads as under:"section 67. imprisonment for non-payment of fine when offence punishable with fine only -if 1 the offence be punishable with fine only, [the imprisonment which the court imposes in default of payment of the fine shall be simple, and] the term for which the court directs the offender to be imprisoned, in default of payment of fine, shall not exceed the following scale, that is to say, for any terms not exceeding two months when the amount of the fine shall not exceed fifty rupees, and for any terms not exceeding four months when the amount shall not exceed one hundred rupees, and for any term not exceeding six months in any other case."a bare perusal of this section would show that the section can be invoked only where an offence committed by an accused is punishable only with fine. in case of non-payment of fine on conviction the court can give directions for imprisonment of the accused/offender for an appropriate term, as provided in the section. the maximum sentence is six months.3. in the present case, the learned acmm was conducting trial. during trial an adjournment was sought by the by the counsel/special public prosecutor for the state. the learned acmm imposed costs on the state to be reimbursed to the accused on the ground that accused had to come from mumbai to attend the proceedings and unnecessary adjournment was sought.4. there is no power granted to a metropolitan magistrate under cr. p.c. for awarding costs to the accused for attending the court proceedings whether an adjournment is sought or not and there is no inherent power available to mm. the only power granted to magistrate under cr. p.c. is to grant cost to the witnesses for attending the court for deposition.5. i, therefore, consider that power exercised by the learned acmm in this case asking prosecution to reimburse the cost for attending proceedings to the accused was unlawful. the learned acmm thus exceeded his power in directing the prosecution to reimburse the cost to the accused for attending the court proceedings when the public prosecutor was on leave. the court of acmm had only to see whether the adjournment was being sought for reasonable grounds or not. if the adjournment is sought on unreasonable grounds, appropriate cost can be imposed to discourage seeking of adjournments and cost has to be deposited with the state and it cannot be given to the accused.6. the learned acmm could not have resorted to section 67 of ipc for recovery of cost. when procedure is prescribed under cr. p.c. itself for recovery of cost by attaching movable/immovable assets, the order passed by learned acmm seems to be actuated by extraneous reasons as a series of orders of this acmm in respect of customs cases have been found to be suffering from similar malice.7. the petition is allowed. the order of acmm is set aside. a copy of this order be sent to chief justice.

Judgment:
1. Whether reporters of local papers may be allowed to see the judgment? Yes.

2. To be referred to the reporter or not? Yes.

3. Whether judgment should be reported in Digest? Yes.

1. The petitioner by this petition has assailed order dated 13 th April, 2010 whereby the learned ACMM exercised power under Section 67 of IPC and sentenced the Commissioner of Customs to imprisonment for a period of six months for non-payment of cost of Rs. 23,307/-.

2. Section 67 of IPC reads as under:

"Section 67. Imprisonment for non-payment of fine when offence punishable with fine only -If 1 the offence be punishable with fine only, [the imprisonment which the Court imposes in default of payment of the fine shall be simple, and] the term for which the Court directs the offender to be imprisoned, in default of payment of fine, shall not exceed the following scale, that is to say, for any terms not exceeding two months when the amount of the fine shall not exceed fifty rupees, and for any terms not exceeding four months when the amount shall not exceed one hundred rupees, and for any term not exceeding six months in any other case."

A bare perusal of this Section would show that the Section can be invoked only where an offence committed by an accused is punishable only with fine. In case of non-payment of fine on conviction the Court can give directions for imprisonment of the accused/offender for an appropriate term, as provided in the Section. The maximum sentence is six months.

3. In the present case, the learned ACMM was conducting trial. During trial an adjournment was sought by the by the counsel/Special Public Prosecutor for the State. The learned ACMM imposed costs on the State to be reimbursed to the accused on the ground that accused had to come from Mumbai to attend the proceedings and unnecessary adjournment was sought.

4. There is no power granted to a Metropolitan Magistrate under Cr. P.C. for awarding costs to the accused for attending the court proceedings whether an adjournment is sought or not and there is no inherent power available to MM. The only power granted to Magistrate under Cr. P.C. is to grant cost to the witnesses for attending the court for deposition.

5. I, therefore, consider that power exercised by the learned ACMM in this case asking prosecution to reimburse the cost for attending proceedings to the accused was unlawful. The learned ACMM thus exceeded his power in directing the prosecution to reimburse the cost to the accused for attending the court proceedings when the Public Prosecutor was on leave. The court of ACMM had only to see whether the adjournment was being sought for reasonable grounds or not. If the adjournment is sought on unreasonable grounds, appropriate cost can be imposed to discourage seeking of adjournments and cost has to be deposited with the State and it cannot be given to the accused.

6. The learned ACMM could not have resorted to Section 67 of IPC for recovery of cost. When procedure is prescribed under Cr. P.C. itself for recovery of cost by attaching movable/immovable assets, the order passed by learned ACMM seems to be actuated by extraneous reasons as a series of orders of this ACMM in respect of customs cases have been found to be suffering from similar malice.

7. The petition is allowed. The order of ACMM is set aside. A copy of this order be sent to Chief Justice.