RAJARAM S/O SRIRAMULU NAIDU (SINCE DECEASED) THROUGH L.RS.versusMARUTHACHALAM (SINCE DECEASED) THROUGH L.RS

                          [2023] 1 S.C.R. 809                            809


  RAJARAM S/O SRIRAMULU NAIDU (SINCE DECEASED)                           A
                  THROUGH L.RS.

                                  v.

 MARUTHACHALAM (SINCE DECEASED) THROUGH L.RS.
                                                                         B
                 (Criminal Appeal No. 1978 of 2013)

                        JANUARY 18, 2023

          [B. R. GAVAI AND M. M. SUNDRESH, JJ.]

       Money Lending – The appellant’s wife subscribed to chit funds     C
(1992 and 1995) with the respondent for which two signed blank
cheques were submitted as security – After maturity of the chit funds,
appellant and his wife sought release of the subscription amount –
However, respondent presented those cheques for encashment
without any intimation to appellant – Said cheques were                  D
dishonoured as the appellant had closed the account – Respondent
filed two complaint cases u/s 138 of NI Act – Both cases were
dismissed by the trial Court – Thereafter, respondent filed suits for
recovery of money on the basis of the Promissory Notes –Both the
suits were dismissed – Appeals against the judgments in the criminal     E
matters were allowed by the High Court and order of conviction
and sentence was passed – Also, the suits were decreed by the High
Court – On appeal, held: Considering the criminal appeals first,
the trial court found that Income Tax Returns of the complainant
did not disclose that he lent amount to the accused, and that the        F
declared income was not sufficient to give loan of Rs. 3 lakhs –The
standard of proof for rebutting the presumption is that of
preponderance of probabilities – Applying this principle, the trial
Court had found that the accused had rebutted the presumption on
the basis of the evidence of the defence witnesses and attending         G
circumstances – In the instant case, the defence raised by the
appellant satisfies the standard of ‘preponderance of probability’ –
High Court was not justified in reversing the order of acquittal of
the appellant – Insofar as civil appeals are concerned, High Court
                                                                         H
                                 809
810            SUPREME COURT REPORTS                      [2023] 1 S.C.R.


A     on basis of the evidence on record, relying on the preponderance
      of probability, came to the conclusion that the plaintiff had the
      financial ability to lend sum of Rs.3 lakhs – As the appellant’s wife
      was not examined as witness, the High Court found that the best
      available evidence was withheld by the defendants/appellants and
B     as such principle of adverse inference applicable – Therefore, no
      reason to interfere with the judgments and the orders passed by the
      High Court in civil appeals.

             Disposing of the appeals, the Court
C            HELD: 1. Consider the criminal appeals first, after analyzing
      all these pieces of evidence, the 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
D     complainant that he had given a loan to the accused from his
      agricultural income was found to be unbelievable by the Trial
      Court. The 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 Trial Court also found that thecomplaint had failed
E     to produce the promissory note alleged to have been executed
      by the accused on 25th October 1998. After taking into
      consideration the defence w itnesses and the attending
      circumstances, the learned Trial Court found that the defence
      was a possible defence and as such, the accused was entitled to
F     benefit of doubt. The standard of proof for rebutting the
      presumption is that of preponderance of probabilities. Applying
      this principle, the 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
G     case, this Court is of the considered opinion that the defence
      raised by the appellant satisfies the standard of “preponderance
      of probability”.The High Court was not justified in reversing the
      order of acquittal of the appellant. [Paras 20, 25 and 27][819-E-
      H; 820-G-H; 821-C]
H
      RAJARAM S/O SRIRAMULU NAIDU THROUGH L.RS.v.                       811
            MARUTHACHALAM THROUGH L.RS.


      2. A distinguishing fact between the criminal proceedings         A
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                 B
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
                                                                        C
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            D
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. [Para 29][821-E-G]
                                                                        E
       3. 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
                                                                        F
reasonable doubt. [Para 30][822-A-B]

      4. In the result, this Court pass the following order:

      (i) Criminal Appeal Nos. 1978 of 2013 and 1990 of 2013 are
allowed and the common judgment of conviction dated 28th                G
October 2008 and order of sentence dated 30th October 2008
respectively are quashed and set aside. The judgments and orders
dated 10th July 2011 passed by the Trial Court is confirmed.

                                                                        H
812           SUPREME COURT REPORTS                      [2023] 1 S.C.R.


A           (ii) Civil Appeal Nos. 10500 of 2013 and 10501 of 2013 are
      dismissed. However, the decrees of the High Court are modified,
      thereby restricting them to the amount already deposited by the
      appellants in this Court in the civil and criminal proceedings,
      along with interest accrued thereon. [Para 32][822-E-G]
B
            RohitbhaiJivanlal Patel v. State of Gujarat and Anr.
            (2019) 18 SCC 106 - held inapplicable.
            Basalingappa v. Mudibasappa (2019) 5 SCC 418 :
            [2019] 6 SCR 555; Bir Singh v. Mukesh Kumar (2019)
C           4 SCC 197 : [2019] 2 SCR 24 ; Kalamani Tex and Anr
            v. P. Balasubramanian (2021) 5 SCC 283 - referred
            to.
                            Case Law Reference

D     [2019] 6 SCR 555               referred to            Para 8
      [2019] 2 SCR 24                referred to            Para 10
      (2019) 18 SCC 106              held inapplicable      Para 10
      (2021) 5 SCC 283              referred to             Para 10
E
           CRIMINAL/CIVIL APPELLATE JURISDICTION : Criminal
      Appeal No.1978 of 2013.
             From the Judgment and Order dated 28.10.2008 and 30.10.2008
      of the High Court of Judicature at Madras in C.A. Nos.1031 &1032 of
F     2001.
            With
           Criminal Appeal No.1990 Of 2013, Civil Appeal Nos.10500 And
      10501 of 2013.
G
            Rameshwar Prasad Goyal, Ms. Neha Sharma, Anil Agarwalla,
      Advs. for the Appellants.
           V. Prabhakar, Pramit Saxena, R. Chandrachud, Advs. for the
      Respondents.
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       RAJARAM S/O SRIRAMULU NAIDU THROUGH L.RS.v.                             813
             MARUTHACHALAM THROUGH L.RS.

      The Judgment of the Court was delivered by                               A
      B. R. GAVAI, J.
       1. 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            B
(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.
       2. The Civil Appeals challenge the judgments dated 08th August
2011 and 03rd February 2012 passed by the Madras High Court whereby            C
the Original Suits filed by the plaintiff- respondents for recovery of money
on the basis of promissory notes were decreed.
       3. For the sake of convenience, the parties will be referred to as
their status before this Court.
                                                                               D
       4. 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.
                                                                               E
      5. The present appeals arise from the following factual matrix:
      5.1    In 1992, the Appellant-Rajaram’s wife subscribed to a 5-
             year chit-fund with one Maruthachalam, the Respondent in
             Criminal Appeal No. 1978/2013 and Civil Appeal No.10500/
             2013. Upon the Respondent-Maruthachalam’s persuasion
                                                                               F
             that, in order to be a successful bidder, a security by way of
             a blank cheque must be submitted, the Appellant submitted
             two signed blank cheques bearing nos. 237954 and 237956
             on behalf of his wife, since she did not have a bank account.
             It is to be noted that the cheques were drawn on the account
             of M/s Brinda Engineering, the sole proprietorship concern        G
             of the Appellant, maintained with the Laxmi Vilas Bank
             Ltd.
      5.2    It is further the case of the Appellant that in 1995, his wife
             subscribed to yet another 5-year chit-fund with the
             Respondent-Maruthachalam.                                         H
814      SUPREME COURT REPORTS                          [2023] 1 S.C.R.


A     5.3.   In 1997, the bank account on which the said cheques were
             drawn was closed due to non-operation.
      5.4    The first chit matured in 1997 and, since the wife of the
             Appellant was never a successful bidder, thus, the Appellant
             and his wife repeatedly requested the Respondent to release
B            the amount of the chits, but the Respondent never did so.
             On the contrary, the Respondent promised to keep the
             amount as a deposit and pay interest. Similarly, the second
             chit matured in 1999, whereafter also the wife of the
             Appellant was never a successful bidder. Thereafter,
             repeated requests for releasing the subscription amount to
C            the tune of Rs. 6 lakhs for both the chits were made on
             their behalf, but to no avail. Finally, the Appellant and his
             wife threatened the Respondent with legal action,
             whereupon the Respondent immediately presented the
             cheques for encashment without any information or
D            intimation to the Appellant.
      5.5    The Cheque No. 237954 was dated 20th October 1999 in
             favour of Respondent-Nachimuthu (who happens to be the
             brother-in-law of Maruthachalam) for an amount of Rs.
             3,50,000/, and was presented for encashment on 04 th
E            November 1999 by the Respondent through his banker
             Indian Overseas Bank. The said cheque returned unpaid
             on 14 th November 1999 with an endorsement stating
             “account closed”.
      5.6    The other Cheque No. 237956 was dated 25th October 1999
F            in favour of the Respondent-Maruthachalam for an amount
             of Rs. 3,50,000/-, and was presented for encashment on
             04th November 1999 by the Respondent through his banker
             Indian Overseas Bank. The said cheque too returned unpaid
             on 14 th November 1999 with an endorsement stating
             “account closed”.
G
      5.7    Statutory Notices dated 15th November 1999 were sent in
             respect of the aforesaid dishonoured cheques, which were
             duly replied by the accused/Appellant denying the existence
             of any legally enforceable debt and stating therein that the
             Respondent is liable to pay the chit amount along with
H
RAJARAM S/O SRIRAMULU NAIDU THROUGH L.RS.v.                           815
MARUTHACHALAM THROUGH L.RS. [B. R. GAVAI, J.]

      subsequent interest. Since the amount was not paid, the         A
      Respondents instituted Complaint Cases under Section 138
      of the N.I. Act, being CC No. 26 of 2000 in respect of
      Cheque No. 237954 and CC No. 32 of 2000 in respect of
      Cheque No. 237956. Both the cases were dismissed by the
      learned Trial Court on 10 th July 2001 vide separate
                                                                      B
      judgments.
5.8   Pursuant to the dismissal of the aforesaid cases, both the
      Respondents instituted civil/original suits for recovery of
      money on the basis of Promissory Notes.
5.9   Original Suit No. 112/2003 (earlier OS No. 602/2002) was        C
      instituted by the Respondent-Nachimuthu, alleging that the
      Appellant had borrowed a sum of Rs. 3 Lakhs on 20th
      October 1998 from him and had executed a promissory
      note on the same day thereby promising to repay the same
      with interest at 24% per annum. It was further alleged that
      the Appellant had issued a cheque on 20th October 1999          D
      for Rs. 3,50,000/- towards the discharge of his liability and
      when the same was presented for encashment, it was
      dishonoured as the Appellant had closed the account.
      Criminal Case No. 32/2000 was pursued under Section 138
      of the N.I. Act which was dismissed against which an appeal     E
      was pending before the High Court.
5.10 Another Original Suit No. 266 of 2004 (earlier OS 746 of
     2002) was instituted by the Respondent-Maruthachalam,
     alleging that the Appellant had borrowed a sum of Rs. 3
     Lakhs on 25th October 1998 from him and had executed a           F
     promissory note on 25th October 1998, thereby promising
     to repay the same with interest at 24% per annum. It was
     further alleged that the Appellant issued a cheque on 20 th
     October 1999 for Rs. 3,50,000/- towards the discharge of
     his liability and when the same was presented for
     encashment, it was dishonoured as the Appellant had closed       G
     the account. Criminal Case No. 26/2000 was pursued under
     Section 138 of the N.I. Act which was dismissed against
     which an appeal was pending before the High Court.
5.11 Original Suit No. 112 of 2003 and Original Suit No. 266 of
     2004 came to be dismissed vide judgment dated 06th January       H
816             SUPREME COURT REPORTS                           [2023] 1 S.C.R.


A                  2004 and 29th July 2005 respectively. As against both the
                   judgments, appeals were preferred before the High Court.
            5.12 The Appeals against the judgments in criminal matters were
                 allowed by the High Court vide common judgment and order
                 of conviction and sentence dated 28.10.2008 and 30 th
B                October 2008.
            5.13 In Appeal, Original Suit No. 266 of 2004 and Original Suit
                 No. 112 of 2003 were decreed by the High Court vide
                 judgments dated 08th August 2011 and 03rd February 2012
                 respectively.
C           5.14 The Appeals against all the 3 judgments of the High Court
                 are before us and are being disposed of vide this common
                 judgment.
              6. We have heard Ms. Neha Sharma, learned counsel appearing
      for the Appellants in all the appeals, and Mr. V. Prabhakar, learned counsel
D     appearing for both the Respondents in all the appeals.
             7. Ms. Neha Sharma submits that the High Court has erroneously
      reversed the well-reasoned judgements of the learned Trial Court. She
      submitted that blank cheques issued in the year 1992 by way of security
      for chit-funds were misused by the Respondents in the year 1999. She
E     further submitted that in the year 1999, when the cheques were sent for
      encashment, the Appellant was no longer the proprietor of M/s Brinda
      Engineering and the bank account on which the said cheques were drawn
      was not operated after 1992, and had already closed in 1997 due to
      non-operation. She further submitted that even before the account was
F     closed down, the wife of the Appellant became the sole proprietor of the
      enterprise, and thus, the appellant could not have signed the said cheques
      in the capacity of the proprietor of M/s Brinda Engineering.
             8. The learned counsel submitted that the Respondents herein did
      not have the financial capacity to lend an amount of Rs.3,00,000/- each
      as on 20th October 1998 and 25th October 1998, when the promissory
G
      notes were said to have been executed. It is further submitted that
      although it was the Respondents’ case that they had given the amounts
      out of their agricultural income, since they had not declared the same in
      their Income Tax Returns from 1992-1999, thus, there was no material
      to show that they could have lent money. To buttress her submissions,
H
       RAJARAM S/O SRIRAMULU NAIDU THROUGH L.RS.v.                             817
       MARUTHACHALAM THROUGH L.RS. [B. R. GAVAI, J.]

the learned counsel relies on the judgment of this Court in the case of,       A
Basalingappa v. Mudibasappa1,
       9. Per contra, Mr. V. Prabhakar, learned counsel for the
Respondents, submits that the Appellant-Raja Ram had failed to produce
any material evidence to substantiate the claim that his wife subscribed
to the chit-funds run by Respondent, Maruthachalam. He submitted that          B
the High Court rightly observed that no material was produced by the
Appellant-Raja Ram to prove that the cheques and promissory notes
were issued only as a security for such a chit. He further submitted that
no legal proceedings were initiated for the recovery of the alleged amount
due by the Appellant either.
                                                                               C
        10. The learned counsel submitted that there arose no occasion
for the Appellant-Raja Ram to issue a blank cheque in the year 1992 for
a chit to be subscribed much later in the year 1995. It is further submitted
that even if certain amounts are not accounted for in the Income Tax
Returns, this is a matter concerning only the defaulter and Revenue
Authority. Thus, a borrower cannot be allowed to take advantage of the         D
same solely on the ground that such an amount does not reflect in the
Income Tax Returns. The learned counsel relied on the judgments of
this Court in the cases of Bir Singh v. Mukesh Kumar2, Rohitbhai
Jivanlal Patel v. State of Gujarat and Anr3, Kalamani Tex and Anr
v. P. Balasubramanian4 to buttress his submissions.                            E
      11. We shall first consider the Criminal Appeals.
      12. This Court in the case of Baslingappa v. Mudibasappa
(supra) has summarized the principles on Sections 118(a) and 139 of the
N.I. Act. It will be relevant to reproduce the same.
                                                                               F
             “ 25. We having noticed the ratio laid down by this Court in
      the above cases on Sections 118(a) and 139, we now summarise
      the principles enumerated by this Court in following manner:
             25.1. Once the execution of cheque is admitted Section
      139 of the Act mandates a presumption that the cheque was for
                                                                               G
      the discharge of any debt or other liability.
1
  (2019) 5 SCC 418
2
  (2019) 4 SCC 197
3
  (2019) 18 SCC 106
4
  (2021) 5 SCC 283
                                                                               H
818            SUPREME COURT REPORTS                           [2023] 1 S.C.R.


A                    25.2. 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.
                     25.3. 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
B
              materials submitted by the complainant in order to raise a probable
              defence. 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.
                     25.4. That it is not necessary for the accused to come in
C             the witness box in support of his defence, Section 139 imposed an
              evidentiary burden and not a persuasive burden.
                     25.5. It is not necessary for the accused to come in the
              witness box to support his defence.”
              13. It can thus be seen that this Court has held that once the
D     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
E     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.
F
              14. In the said case, i.e. Baslingappa v. Mudibasappa (supra),
      the learned Trial Court, after considering the evidence and material on
      record, held that the accused had raised a probable defence regarding
      the financial capacity of the complainant. The accused was, therefore,
      acquitted. Aggrieved thereby, the complainant preferred an appeal before
G     the High Court. The High Court reversed the same and convicted the
      accused. This Court found that unless the High Court came to a finding
      that the finding of the learned Trial Court regarding financial capacity of
      the complainant was perverse, it was not permissible for the High Court
      to interfere with the same.
              15. In the present case, the accused appellant had examined Mr.
H
      Sarsaiyyn, Income Tax Officer, Ward No.18, Circle (II) (5), who
       RAJARAM S/O SRIRAMULU NAIDU THROUGH L.RS.v.                            819
       MARUTHACHALAM THROUGH L.RS. [B. R. GAVAI, J.]

produced certified copies of the Income Tax Returns of the complainant        A
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.
                                                                              B
        16. 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.
        17. The appellant had also examined D.W.2-Thiru Iyyappan,
Assistant Manager, City Union Bank, Ramnagar Branch with regard to            C
bank transactions made by the sole proprietorship firm, M/s Brinda
Engineering.
        18. D.W.3-Mr. Subramaniam, Manager, Lakshmi Vilas Bank,
Ganapathy Branch was also examined on behalf of the defence. The
said witness also deposed that the complainant had signed the application     D
form to introduce the accused to open the account in the bank.
        19. D.W.4-Mr. Ganesan, Village Administrative Officer, Ganapathy
Village was also examined and he deposed that the land in S.F. No. 591/
3 and 592/3 was in joint ownership, and, in the aforesaid survey numbers,
the names of 27 persons were found.
        20. After analyzing all these pieces of evidence, the learned Trial   E
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           F
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       G
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.                                                      H
820             SUPREME COURT REPORTS                            [2023] 1 S.C.R.


A            21. The scope of interference in an appeal against acquittal is
      limited. Unless the High Court found that the appreciation of the evidence
      is perverse, it could not have interfered with the finding of acquittal
      recorded by the learned Trial Court.
             22. Insofar as the reliance placed by Mr. Prabhakar on the
      judgment of this Court in the case of Bir Singh v. Mukesh Kumar
B
      (supra) is concerned, in the said case, though the accused was convicted
      by the learned Trial Court, which conviction was maintained by the
      Appellate Court, the High Court in its revisional jurisdiction interfered
      with the same and acquitted the accused. This Court found that in
      exercise of revisional jurisdiction under Section 482 of the Code of
C     Criminal Procedure, 1973, the High Court could not, in the absence of
      perversity, upset concurrent findings of fact. In any case, in the said
      case, the accused had not led evidence with regard to the financial
      capacity of the complainant. This Court held that once a cheque was
      signed and handed over by the accused, it would attract presumption
      under Section 139 of the N.I. Act in the absence of any cogent evidence
D     to show that the cheque was not issued in the discharge of a debt.
             23. In the case of Kalamani Tex and another v. P.
      Balasubramanian (supra), the learned Trial Court had dismissed the
      complaint. In appeal, at the behest of the complainant, the same was
      allowed and the accused were convicted for the offence punishable
E     under Section 138 of the N.I. Act. In an appeal at the behest of the
      original accused, this Court while affirming the order of the High Court
      observed thus:
             “18. Considering the fact that there has been an admitted business
             relationship between the parties, we are of the opinion that the
             defence raised by the appellants does not inspire confidence or
F            meet the standard of “preponderance of probability”. In the
             absence of any other relevant material, it appears to us that the
             High Court did not err in discarding the appellants’ defence and
             upholding the onus imposed upon them in terms of Section 118
             and Section 139 of NIA.”
G            24. It can thus be seen that in the facts of the said case, this Court
      found that the defence raised by the appellants/accused did not inspire
      confidence or meet the standard of “preponderance of probability”.
             25. In the present case, we are of the considered opinion that the
      defence raised by the appellant satisfies the standard of “preponderance
      of probability”.
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       RAJARAM S/O SRIRAMULU NAIDU THROUGH L.RS.v.                              821
       MARUTHACHALAM THROUGH L.RS. [B. R. GAVAI, J.]

        26. Insofar as the reliance on the judgment of this Court in the        A
case of Rohitbhai Jivanlal Patel v. State of Gujarat and Anr. (supra)
is concerned, in the said case, the learned Trial Court had acquitted the
accused, the High Court, in appeal, reversed the acquittal and convicted
the accused for the offence punishable under Section 138 of the N.I.
Act. Affirming the order of the High Court, this Court held that merely
by denial or merely by creation of doubt, the accused cannot be said to         B
have rebutted the presumption as envisaged under Section 139 of the
N.I. Act. This Court held that unless cogent evidence was led on behalf
of the accused in defence of his case, the presumption under Section
139 of the N.I. Act could not be rebutted. As such, the said judgment
also would not be applicable to the facts of the present case.                  C
        27. 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.
        28. 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          D
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.
        29. A distinguishing fact between the criminal proceedings and
the civil proceedings in the present case is that, while in the criminal        E
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        F
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
                                                                                G
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.
        30. 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   H
822              SUPREME COURT REPORTS                        [2023] 1 S.C.R.


A     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.
             31. We, therefore, find no reason to interfere with the judgments
      and orders passed by the High Court in the Civil Appeals. However, in
B
      the facts and circumstances of the case, we are inclined to modify the
      decree. During the pendency of the proceedings before this Court, the
      appellants have deposited an amount of Rs.7 lakh and Rs. 2 lakh pursuant
      to the orders of this Court dated 20th February, 2009 passed in Criminal
      Appeal No. 1978 of 2013 (arising out of Special Leave Petition (Criminal)
C     No.1456 of 2009 and connected matter and dated 13th August, 2012
      passed in Civil Appeal No.10501 of 2013 (arising out of Special Leave
      Petition (Civil) No.23036 of 2012). The said amount has been directed
      to be invested in a Fixed Deposit Receipts from time to time. We are,
      therefore, of the view that, in the facts and circumstances of the present
      case, the decree needs to be modified restricting it to the amount already
D     deposited by the appellants in both the proceedings with interest accrued
      thereon.
             32. In the result, we pass the following order:
             (i)    Criminal Appeal Nos. 1978 of 2013 and 1990 of 2013 are
                    allowed and the common judgment of conviction dated 28th
E                   October 2008 and order of sentence dated 30th October
                    2008 respectively are quashed and set aside. The judgments
                    and orders dated 10th July 2011 passed by the learned Trial
                    Court is confirmed.
             (ii) Civil Appeal Nos. 10500 of 2013 and 10501 of 2013 are
                    dismissed. However, the decrees of the High Court are
F
                    modified, thereby restricting them to the amount already
                    deposited by the appellants in this Court in the civil and
                    criminal proceedings, along with interest accrued thereon.
             (iii) The respondents in both the Civil Appeals would be entitled
                    to withdraw 50% of the amount each from the amount
G                   deposited in this Court with interest accrued upto date.
             33. There shall be no order as to costs. Pending application(s), if
      any, shall stand disposed of.

      Ankit Gyan                                               Appeals disposed of.
      (Assisted by : Rahul Rathi, LCRA)
H