R SANKARALINGAM Vs. UNION OF INDIA

JUDGEMENT

(1.) This Writ Petition is for declaration that Section 138 of the Negotiable Instruments Act (hereinafter referred to as 'the Act'), is unconstitutional, being opposed to the basic structure of the Constitution of India found in the preamble thereof, guaranteeing social and economic justice. In the affidavit filed in support of the writ petition, the following averments are found : For the purpose of a civil suit in which the petitioner's wife is the plaintiff, at her request the petitioner had given seven post-dated blank cheques to the fifth respondent to enable him to lend a sum of Rs. 20,000/- to the petitioner's wife.The cheques were not supported by any consideration. They were meant only to be security for due repayment. The petitioner also handed over copies of documents of title to the fifth respondent in respect of certain property with reference to which the petitioner's wife has filed the suit. It was specifically understood that the cheques having been handed over as security, in the event of default in payment by the petitioner's wife, they should not be used for purposes of any criminal proceedings under Section 138 of the Act. A total sum of Rs. 10,000/- had been paid by the petitioner and his wife to the fifth respondent to which he agrees to give credit. The fifth respondent filed C.C. No. 5577 of 1992 before the VIIth Metropolitan Magistrate, George Town, Madras, who is the third respondent herein. He also filed a Civil Suit O.S. No. 7972 of 1993 on the file of the IV Assistant Judge, City Civil Court, Madras, for recovery of Rs. 7,000/- covered under one of the seven cheques given to him, he has also filed two other criminal cases viz., C.C. Nos. 1793 and 1794 of 1993 on the file of the third respondent relating to two other cheques.

(2.) As the onus of proof relating to the cheques involved in the criminal cases would show that no consideration ever passed for the cheques is one the petitioner as per Section 139 of the Act in a case instituted under Section 138 of the Act, the petitioner filed a petition before the third respondent under Section 243(2) of the Criminal Procedure Code. The third respondent has, without considering the said petition, issued a non-bailable warrant against the petitioner. Section 138 of the Act gives the holder of a cheque a preferential and unchecked right to institute original proceedings against the drawer, even without proving actual consideration towards the cheque. On the other hand, the onus of proving passing no consideration viz., proof of a negative is placed on the unfortunate drawer of the cheque. Already in Section 119 of the Act, if the drawer of a cheque admits his signature in the cheque, it is for him to prove that no consideration passed. The fifth respondent having admitted taking a promissory note from the petitioner for which he has also taken a cheque from him, the petitioner is sought to be made liable for one and the same transaction before two forums, one the Civil Court and the other the Criminal Court. At least if the petition filed by the petitioner to send for the income-tax returns and assessment orders of the fifth respondent filed before the third respondent had been taken on the file by the third respondent, the petitioner would have discharged the onus of proof as per Section 139 of the Act that no consideration ever passed under the cheques and that the fifth respondent had no capacity to lend money to the petitioner. Unfortunately, the provisions of Section 138 of the Act are designed in such a way that it gives an upper hand to the holder of a dishonoured cheque and the formality of getting endorsement of dishonour is made so easy to deny the right of the drawer to defend the action. Under the general law of accounting between a creditor and debtor though the onus of proof of discharge is also on the debtor, there is a departure in the procedure regarding discharge of the debt in a proceeding initiated under Section 138 of the Act. There is another feature which has to be considered. In a criminal case under Section 138 of the Act, the only mental satisfaction of the complainant in the event of his case being accepted is that he had successfully put the debtor in jail, which is nothing but a sinister pleasure. This is because he has to again approach the Civil Court to recover the money from the debtor. The provision in Section 138 of the Act is only a punitive measure and not a preventive one. The question is whether a creditor simply because he is holding an instrument and without proving actual consideration for the said instrument, can be allowed to initiate criminal proceedings against the drawer just for his mental satisfaction. The petitioner is, therefore, praying for a declaration that Section 138 of the Act as unconstitutional which is opposed to the basic structure of the Constitution of India found in the preamble thereof, guaranteeing social and economic justice.

(3.) Learned Counsel for the petitioner contended that the basic principle of criminal law is that any person accused of an offence is presumed to be innocent and until he is proved to be guilty of the offence, he cannot be punished. It is contended that the burden of proof has been shifted by Sections 138 and 139 of the Act on to the accused which is against the fundamental principle of criminal law. It is, therefore, argued that such a provision is against the basic principles of the Constitution which are guaranteed in the preamble thereof. According to learned Counsel, the shifting of the burden on to the drawer of the cheque would amount to denial of justice, social, economic and political. It is also contended that in such proceedings, the Criminal Court refuses to grant petitions under Section 243 of the Code of Criminal Procedure under which the accused seeks to summon certain documents from third parties to discharge his burden. According to learned Counsel, the same will invalidate Section 138 of the Act itself.