Delhi District Court
Sh. Sunil Kumar Joshi vs Sh. Satender on 25 November, 2020
IN THE COURT OF SH. AJAY GUPTA, ADDL.SESSIONS
JUDGE02 (EAST), KARKARDOOMA COURTS, DELHI
Criminal Appeal No. 45/17
In the matter of:
Sh. Sunil Kumar Joshi
S/o Sh. Uday Ram Joshi
R/o Flat No.F1, First Floor,
4/170, Sector4, Vaishali,
Ghaziabad, UP ....Appellant
versus
Sh. Satender
S/o Sh. Sh. Rishi
R/o Village Dallupura
Harizan Basti, New Delhi110092 ....Respondent
Date of institution 23.03.2017
Arguments heard 06.11.2020
Date of Judgement 25.11.2020
JUDGMENT
1. The present appeal has been filed against the judgment dated 23.01.2017 passed by Ld. MM, East, Karkardooma Courts, Delhi, in a complaint case bearing CC No.55466/16 titled as Satender vs Sunil Kumar Joshi filed u/s 138 Negotiable Instruments Act. Vide the aforesaid judgment Ld. MM has convicted the appellant u/s 138 Negotiable Instrument Act (hereinafter to be referred as NI Act) and vide order dt. 22.02.2017, the appellant has been sentenced to undergo five months simple imprisonment and to pay a compensation of Rs.50 lacs (Fifty lacs only) to the complainant Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 1 of 45 within one month from the date of Order on sentence failing which he is to undergo further Simple Imprisonment of four months.
2. The brief facts of present case are that the respondent/complainant filed a complaint u/s 138 of N.I. Act against the appellant/accused (hereinafter both the parties have been referred as per their nomenclature in the complaint) on the basis of the following allegations:
(a) that in the month of November 2014, the complainant was searching for a flat for purchasing the same and during that period, accused came to the house of the complainant and introduced himself to be the owner of the property/Flat bearing No.F1, First Floor, Plot No.4/170 Residential Colony, Sector4, Vaishali, Ghaziabad, UP, measuring covered area 450 sq. ft. (hereinafter referred as 'the Flat' for the sake of brevity) and suggested the complainant to purchase the said flat and complainant agreed to purchase the said flat.
(b) That accused agreed to sell the said flat for the total amount of Rs.40 lacs (forty lacs only) and on 05.12.2014 an agreement to sell the said flat was executed between the parties. Complainant paid Rs.16,50,000/ to the accused as earnest money and he also executed one separate receipt and as per terms of agreement, accused agreed for execution of Sale Deed and handing over the peaceful and physical vacant possession of the said flat on or before 07.05.2015.
Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 2 of 45
(c) that on 06.05.2015, the accused approached the complainant and demanded remaining amount showing the urgency. The complainant gave balance sale consideration amount of Rs.23,50,000/ to the accused against receipt dated 06.05.2015 issued by the accused. Accused assured the complainant that he will execute the Sale Deed on 07.05.2015, however, accused failed to do so. Accused delayed the execution of Sale Deed on one pretext or the other and lastly he refused to execute the Sale Deed.
(d) That the appellant demanded return of the said amount and the accused issued following four cheques to the complainant to return the said amount: Sl No. Cheque No. Date Drawn on Amount 1 788602 10.06.15 Noble Cooperative Bank Ltd. 10 lacs 2 788601 14.06.15 Noble Cooperative Bank Ltd. 10 lacs 3 671970 19.06.15 Noble Cooperative Bank Ltd. 10 lacs 4 671971 27.06.15 Noble Cooperative Bank Ltd. 10 lacs
(e) that on 03.07.2015, aforesaid cheques got dishonoured as the accused was not having sufficient balance in his bank account.
(f) that complainant sent a legal notice dated 23.07.2015 to the accused by speed post and registered AD, however, despite service of legal notice, the accused did not pay the amount of dishonoured cheques, thus, it was prayed that accused may be Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 3 of 45 summoned for the offences u/s 138 of N.I Act and 406/420 of IPC.
3. The complaint was filed u/s 138 of NI Act as well as u/s 406/420 of IPC and Ld. Trial Court observed that in the facts and circumstances of the matter, prima facie an offence u/s 138 N.I.Act has been committed and accordingly, accused was summoned u/s 138 of N.I. Act.
4. On 19.01.2016, a notice u/s 251 Cr.P.C for commission of the offence u/s 138 N. I. Act was served upon the accused and accused pleaded not guilty and took following defence: Q. Do you admit your signature on the cheque?
Ans. Yes. However, the other details are not filled by me. Q. Do you admit the receipt of said legal notice?
Ans. Yes.
Q. Do you plead guilty or claim trial?
Ans. I do not plead guilty and claim trial.
Q. What is your plea of defence?
Ans. Complainant and I had entered into a committee. These
cheques were issued as security and the same has been misused by the complainant.
5. The accused also filed an application u/s 145(2) of NI Act and in the said application, he took the following defence:
2.That the complainant has filed the false and frivolous case against the accused persons just to extort the money from the accused on false grounds.
3.That the real fact is that the accused has given the said blank cheque without mentioning the amount therein only with his Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 4 of 45 signature on the demand of the complainant for the purpose of security as the accused has given the said cheque to the complainant for the security of committee of Rs.8,00,000/ and the complainant has promised/assured to the accused that he will not misuse the said cheque in any manner whatsoever and will return the same after completion of committee.
4.That no any outstanding is against the accused as alleged by the complainant and the complainant has misused the said blank cheque in the present complaint case.
5.That no agreement was ever made between the parties as alleged in the complaint by the complainant.
6.That complainant was having visiting terms with the accused in his office and he also taken the installments of the committee from his office.
7. That the complainant has sent the said legal notice on false and frivolous grounds just to extort the money from the accused.
6. In support of his case, complainant examined himself as sole witness (CW1) and he brought on record the following documents:
a) Four cheques mentioned in para No.2(d) (Ex. CW1/1, Ex.CW1/3, CW1/5 and CW1/7).
b) Cheque returning memos of the cheques (Ex.CW1/2, Ex.CW1/4, Ex.CW1/6 and Ex.CW1/8)
c) Copy of legal notice dated 23.07.2015 (Ex.CW1/9) with postal receipts (Ex.CW1/10 and Ex.CW1/11).
d) Returned envelope containing legal notice with the report of refusal (Ex.CW1/12)
e) Copy of tracking report (Ex.CW1/13)
f) Copy of Agreement to Sale in respect of the Flat (Ex.CW1/14)
g) Copy of payment receipt regarding cash payment of Rs.16,50,000/ (Ex.CW1/15)
h) Copy of payment receipt regarding cash payment of Rs.23,50,000/ (Ex.CW1/16)
i) Copy of PAN card of accused/appellant (Mark A) Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 5 of 45
j) Copy of Voter ICard of appellant (Mark B)
k) Copy of Sale Deed in respect to the Flat (Mark C)
7. After completion of complainant's evidence, the statement of accused was recorded under section 313 Cr.P.C. All incriminating evidence was put to him. Accused denied the claim of the complainant and he raised the following defence in his statement: "All the four cheques in question belong to my account and bears my signatures. The cheques were issued by me to the complainant as blank signed cheques. The cheques in question were given as a security to the complainant for the purpose of committee financial pooling given by the complainant. I have never entered into any agreement with the complainant for the purchase/sale of any flat.
8. In his defence, the accused examined his wife Smt. Rachna Joshi as DW1. DW1 deposed that She is the wife of the accused and co owner of the Flat. She further deposed that present is a fake case and no agreement was executed between her husband and complainant. Her husband was involved in a Committee (financial pooling) with the complainant. The complainant used to visit her house and asked for a sum of Rs.8 lacs. On inquiry, her husband had told her that the subject cheques were given as security in the year 2010 for the purpose of committee. She deposed that earlier she had made payment of 34 lakh to the complainant with respect to the sale & purchase of property.
Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 6 of 45
9. On completion of the trial, Ld. Trial Court convicted the accused thereby holding that accused failed to discharge his burden to rebut the presumption.
10.Now the present appeal has been filed by the appellant mainly on the following grounds:
(a) That the Ld. Trial court erred in drawing the presumption u/s 118 of NI Act as the signature upon the subject cheques as well as issuance of cheques were admitted. The appellant did not admit any liability towards complainant and denied execution of agreement to sell and stated that his signatures on the agreement & receipt are forged and fabricated. The onus was on the appellant to examine the witness to the agreement to sell and receipt and to prove that these documents were signed by the accused. However, he did not examine any witness and failed to prove the execution of the same. The agreement is neither attested by any notary public/competent authority or bears the thumb impression of accused which is mandatory. The agreement to sell is not a valid document and cannot be enforced by law. The appellant submitted that the agreement to sell and subject cheques may be sent for comparison of signatures.
(b)That the property of accused is situated in Ghaziabad, UP, thus, the agreement to sell cannot be executed at Delhi and also cannot be executed on the stamp paper of Delhi. Ld. Trial Court ignored that the accused denied his signature on the agreement during cross examination of complainant and complainant did not Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 7 of 45 give any suggestion regarding execution of agreement and signature of accused to the witness of accused. Thus, it is to be presumed that the documents do not bear the signature of accused.
(c) That Ld. Trial court erred in holding that the accused failed to impeach the testimony of complainant as during cross examination of complainant/CW1, a suggestion was given that the agreement Ex.CW1/14 is a forged and fabricated document. Thus, under these circumstances, the onus was on the complainant to prove that the agreement bears the signature of accused by producing witnesses of the documents or by comparison of the signature of accused with his admitted signatures on the subject cheques.
(d)That Ld. Trial court failed to consider the fact that complainant stated that he had taken gold loan of Rs.40 lacs from Muthoot Finance but he failed to produce the record of the said loan. He also did not produce his income tax return showing his income and receipt of the loan amount of Rs.40 lacs from Muthoot Finance. Complainant was bound to prove his source of income when during evidence. The complainant was asked regarding the mode of payment and also if the same was shown by him in the income tax return, he gave no satisfactory answer to the same.
(e)That the accused is suffering as his previous counsel could not make submission for sending the agreement to sell and cheques for comparison. It is also stated that previous counsel also failed Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 8 of 45 to crossexamine the complainant on important and crucial point of the case.
(f) That the Ld. Trial Court erred while holding that the testimony of DW1, the wife of the accused is not reliable as being hearsay evidence. DW1 was aware of each and every aspect of the affairs of accused being his wife and she had stated in her evidence that no agreement was executed between complainant and accused and subject cheques were given as security in 2010 for the purpose of committee. DW1 was depositing the payments/installments of the committee with the complainant, thus, she was aware as well as involved in every facts of the matter.
(g)That DW1 is the coowner of the flat, thus, no transaction could have taken place without involving her. Complainant was well aware of the factum of joint ownership and therefore, no agreement could be executed only by a coowner. Thus, agreement to sell is not a valid document.
(h)That at the time of framing of notice as well as statement u/s 313 Cr.P.C, statement of appellant was recorded due to which he was under impression that there is no need of more evidence/statement on his behalf and therefore, the appellant did not examine himself in defence evidence.
(i) That the testimony of DW1 was not disputed as no suggestion with respect to her statement was given. It is clear from the record that the cheques were issued for security only, which have been Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 9 of 45 misused by the complainant as during crossexamination, he admitted that the subject cheques were not filled up by the accused. The complainant admitted that the cheques were given on the same day, however, cheques bear different dates and they were presented on the same date which shows that the complainant was already having the cheques as security and he himself filled different dates and presented on the same date.
(j) That perusal of the alleged signature of the accused shows that the major portion of his signature are on revenue ticket and only two letters are on white paper which shows that documents is forged one. There is no requirement of revenue ticket for agreement to sell and revenue stamp has been used just to forge and fabricate the signature of the accused.
(k) That Ld. Trial Court did not take into consideration that no question/suggestion was given by the complainant to DW1 in regard to the fake agreement to sell and about the security cheques, the testimony of DW1 became undisputed and proved.
(l) That the complainant failed to prove the present case beyond reasonable doubt thus, benefit of doubt ought to have been given to the accused.
(m) That Appellant is suffering due to mistake of the counsel.
Previous Ld. Counsel for accused could not crossexamine the complainant in regard to some important facts. Due to bonafide mistake and little knowledge of the counsel, he also could not lead the evidence of accused. The complainant could not be Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 10 of 45 crossexamined on the point of record of gold loan and comparison of alleged signature of accused. It is stated that it is necessary to issue direction for retrial and taking fresh evidence on some points to avoid injustice.
11.The respondent/complainant filed his written reply, reiterated the allegations and averments made by him in his complaint.
12.I have heard the submissions of Ld. Counsel for the appellant/ accused and also Ld. Counsel for the respondent/complainant. I have also gone through the record of the case as well as written arguments filed on behalf of the parties. Ld. Counsel for appellant also relied upon the following case laws in support of his contentions:
(a) Virender Singh vs Laxmi Narain and another (DHC) BC 5 30, 2007 Cri.LJ 2262
(b) M/s Indus Airways Pvt. Ltd. And Ors vs M/s Magnum Aviation Pvt. Ltd. & Another (SC) Cr. Appeal No.830 of 2014
(c) Icon Buildcon Pvt. Ltd. Vs Aggarwal Developers Pvt. Ltd. & Anr.
(DHC) CRL. L.P. No.257 of 2013(d) R. Parimala Bai Vs. Bhaskar Narasimhaiah, CRL.P. No.1387/2011
(e) Kuju Collieries Ltd. Vs Jharkhand Mines Ltd and Ors. (AIR 1974 SC 1892)
(f) K. Subramani vs K. Damodara Naidu, Cr. Appeal No.2402 of 2014
(g) Union of India vs Raman Iron Foundry and Ors, Civil Appeal No.1224, 1225 and 1330 of 1973.
(h) Mirza Javed Murtaza vs UP Financial Corporation and Anr. Writ Petn.
No.2785 of 1980(i) Iron & Hardware (India) Co. vs Firm Shamlal & Bros., Civil Revn. Appln. Nos. 1261, 1384 and 1385 of 1953.
(j) Kulvinder Singh vs Kafeel Ahmed, Cr. L.P. No.478 of 2011.
(k) Sanjay Mishra vs Ms. Kanishka Kapoor @ Nikki, Cr. Application No.4694 of 2008.
(l) Basalingappa vs Mudibasappa, Cr. Appeal No.636 of 2019.
Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 11 of 45
(m) Dalmia Cement (Bharat) Ltd. Vs Galaxy Traders & Agencies Ltd. & Ors (2001) 6 SCC 463.
(n)K. Prakashan vs. P.K. Surenderan (2008) 1 SCC
(o)Ld. Counsel for respondent also relied upon the following case laws in support of his contentions:
(p) Rangappa vs Sri Mohan (2010) 11 SCC 441,
(q) M/s Laxmi Dyechem vs State of Gujrat & Ors, JT 2012 (12) SC 65
(r) K. Subramani vs K. Damodara Naidu, (2015) 1 SCC 99
(s) Iftikar Alam vs Naved Hasan 2012 (1) LRC 172 Delhi,
(t) Ravi Chopra vs State 2008 (2) JCC (NI_169) (u) Vijender Singh vs M/s Eicher Motors Limited and Anr. Crl. M.C. No.1454/2011
(v) T. Vasanthakumar vs Vijayakumari, (2015) 8 SCC 378 (w)AIR 2004 SC 3114 Zahira Habibulla H. Sheikh and another vs State of Gujrat and others.
13.It is held by Hon'ble Supreme Court in the case of 2000(2) SCC 745 titled as M/s Kusum Ignots & Alloys Ltd. Vs M/s Pennar Peterson Securities Ltd that to constitute an offence u/s 138 of Negotiable Instruments Act the following requirements are to fulfilled:
(a) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account for the discharge of any debt or other liability;
(b) that cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier;
(c) that cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank;
(d) the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 15 days (after amendment in 2003 notice is to be issued within 30 days) of the receipt of Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 12 of 45 information by him from the bank regarding the return of the cheque as unpaid;
(e)the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice.
14.Now, let us see, if the aforesaid requirements have been fulfilled in the present case. It is undisputed that the subject cheques (Ex. CW1/1, CW1/3, Ex.CW1/5, CW1/7) were drawn by the accused. It is further clear from the cheque returning memos (Ex.CW1/2, Ex.CW1/4, Ex.CW1/6 and Ex.CW1/8) that complainant had presented the subject cheques for encashment with his banker and these cheques were dishonoured due to insufficient funds in the bank account of the accused. It is further clear from the cheque returning memos that within 30 days of the return of the cheques, a legal notice dt. 23.07.2015 (Ex.CW1/19) was issued and dispatched vide postal receipts (Ex.CW1/10 and Ex.CW1/11). Though, the legal notice sent by the speed post was received back with report of refusal vide returned envelope Ex.CW1/12, however, it is undisputed that the legal notice was duly served upon the accused. The accused has categorically admitted the service of legal notice at the time of framing of notice u/s 251 Cr.P.C.
15.It is also clear from the record that accused did not pay the amount of dishonoured cheques neither within 15 days of the service of the legal notice nor thereafter. Thus, it is clear from the record that all necessary requirements to constitute the offence u/s 138 N.I. Act, have been fulfilled and now only element which is left to be seen is Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 13 of 45 whether the accused had issued the subject cheques to the complainant towards the return of the sale consideration of the flat received by him. This point will be discussed in detail in the later part of the order and before making further discussions on the factual aspects of the case, it is deemed necessary to firstly discuss the relevant provisions of N.I Act and the legal position which is necessary to be taken into consideration for adjudicating the complaint of section 138 of N.I Act.
16.The claims based upon the provisions of negotiable instruments act are exception to the general rule of law that burden of proof lies on the prosecution. There are two specific provisions in the Negotiable Instruments Act i.e. section 118 (a) and 139 which contemplates that a presumption is attached in regard to each and every negotiable instrument that the same was drawn and issued against due discharge of the liability and thus, whenever any claim is made on the basis of a negotiable instrument, the presumption has to be drawn in favour of the holder of the cheque (drawee) and the law has put the burden to rebut the presumption on the accused that the cheque was not issued by him against discharge of a debt or a liability. In case, the accused is not able to rebut the presumption and fails to prove his defence, the presumption becomes absolute and it has to be assumed that the cheque was issued by the accused in discharge of debt or liability and consequently, accused has to be assumed guilty of the offence. The relevant provisions of section 118 (a) and section 139 reads as under: Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 14 of 45 Sec 118 Presumptions to negotiable instruments.Until the contrary is proved, the following presumption shall be made:
(a) of consideration 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. Sec 139. Punishment in favour of holder: It shall be presumed, unless the contrary is provided, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.
17.It has been held by Hon'ble Supreme Court in the case reported as 2001 (6) SCC 16 titled as Hiten P. Dalal v. Bratindranath Banerjee that the presumption mentioned in the section 139 of N.I. Act is a presumption of law and not the presumption of fact and thus, this presumption has to be drawn in favour of the drawee and burden to rebut the presumption with the probable defence is on the accused. The relevant para of the aforesaid case law reads as under:
21. In other words, provided the facts required to form the basis of a presumption of law exist, no discretion is left with the Court but to draw the statutory conclusion, but this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary. A fact is said to be proved when, "after considering the matters before it, the Court either believes it 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" [Section 3 : Evidence Act]. Therefore, the rebuttal does not have to 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 standard of reasonability being that of the 'prudent man'.
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18.It has been held by Hon'ble Supreme Court in the case of reported as 2010 (11) SCC 441 titled as Rangappa v. Sri Mohan that presumption of section 139 of N.I. Act also includes the existence of legally enforceable debt. The relevant para of the said judgment reads as under:
14. In light of these extracts, we are in agreement with the respondent claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability.
19.In Bharat Barrel v. Drum Manufacturing AIR 1999 SC 1008, Hon'ble Supreme Court held that the accused has to rebut the presumption and mere denial of passing of consideration is no defence.
20.Thus, in view of the law laid down by Hon'ble Supreme Court in the aforesaid cases, the presumption as contemplated under section 139 N.I. Act has to be drawn in favour of the drawee that the cheque in question was issued in discharge of legally enforceable liability. Thus, in the present case also complainant was not required to prove that subject cheques were issued by the accused towards the return of sale consideration of the flat and initially, the claim of the complainant was to be assumed to be correct by drawing the presumption of section 139 of N.I. Act and burden to rebut the presumption with his probable defence was on the accused.
21.In the present case, the accused has not disputed that the factum of issuance of subject cheques but he took a defence that subject Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 16 of 45 cheques were issued as a security to the complainant for the purpose of committee (chitfund) and he never entered into any agreement for the sale/purchase of any flat. Thus, the accused endeavoured to contend that he does not owe anything to the complainant.
22.Thus, the accused was required to establish on record the aforesaid defence taken by him. However, after considering the record and the evidence, it is clear that accused has miserably failed to prove his defence and the defence of the accused is apparently not trust worthy for the following various reasons:
a) It is undisputed that the complainant and accused were known to each other and as per accused; he had given the subject cheques to the complainant towards security of the committee of Rs.8 lakhs. This is the sole defence taken by the accused to explain as to how the subject cheques came into possession of the complainant. It is undisputed that the subject cheques were handed over by the accused to the complainant. The accused has simply taken this defence that he had given the subject cheque as security towards the committee; however, this defence of the accused is bereft of necessary particulars. It is clear that in his application u/s 145(2) NI Act as well as in his statement u/s 313 Cr.P.C., the accused has reiterated the same defence, however, no particulars, whatsoever, have been provided regarding the committee (chitfund). In order to establish his defence, the accused was required to firstly bring on record as to Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 17 of 45 on which date, the committee was started and as to when he became member of the same. He was also required to state as to how many members were there in the said committee and the details of the amount which he contributed towards his share as well as the dates on which the said amount was paid. He was further required to specify as to when the committee had begun and as to when it came to an end. He was also required to specify the amount of prize money and the date when he was given the prize money. The accused has simply taken this defence, however, despite having several opportunities from the time of filing of application u/s 145(2) NI Act, and till the time defence evidence was led by him, he neither brought on record the said requisite particulars of the committee nor led any evidence to establish his aforesaid defence. Normally, there are several members of a chitfund and therefore, in case he was one of the members of chitfund, he ought to have provided the particulars of the other members of the chitfund and ought to have examined some of them to establish that he was one of the members of a committee run by the complainant. However, the accused is completely silent in this regard and he has simply taken this defence but did not bring on record the aforesaid requisite particulars/evidence to establish the same.
b) The dates regarding beginning of chitfund and its finalization were very relevant in order to see, if there is any substance in Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 18 of 45 this defence raised by the accused. In case, the subject cheques were given by the accused to the complainant as security towards committee and he had successfully paid all the installments/contribution and the chitfund had successfully completed its period, then accused was entitled to take back the subject cheques which according to him were given to the complainant as security. It is clear that the accused did not specify schedule i.e. the starting and completion period of chit fund/committee. In order to prove his defence, the accused has examined his wife Smt. Rachna Joshi as DW1. Though, the accused did not specify any particulars or any period regarding the beginning of chitfund, however, DW1 stated that the subject cheques were given as security in the year 2010 qua the committee. Thus, as per the wife of accused, the committee was started in the year 2010 and as per accused, the complainant has misused the security cheques, thus, accused endeavoured to say that the committee which was started in the year 2010 had come to an end yet the complainant misused the security cheques. Firstly, the defence regarding the committee is not trustworthy as neither the requisite particulars have been furnished nor any evidence has been led by the accused in this regard. Furthermore, if it is assumed that the subject cheques were given as security towards the committee thus, after completion of chitfund period, the accused must have sought return of his security cheques, however, it is not the case of the Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 19 of 45 accused that the committee was completed successfully and despite its completion, the complainant did not return the cheques. It is not the case of the accused that despite his request, his cheques were not returned. Thus, it is clear that there is nothing on record to show that the security cheques were ever sought back by the accused. Not even a single suggestion has been put during crossexamination of the complainant in this regard. A simple suggestion has been given that the complainant was running a committee. The complainant has not been cross examined on the material aspect of the particulars of the committee. No suggestion has been given to the complainant that the subject cheques were given to the complainant as security towards the committee of Rs.8 lakhs and complainant did not return these cheques despite the committee completed successfully. It is clear from the record that the accused has not brought on record any particulars to show that he has ever sought return of his security cheques from the complainant. In case, the subject cheques would have been given as security towards the committee as claimed by accused, he must have sought return of the same after committee was over as in that case, complainant was not legally entitled to retain the cheques after the transaction was over. It is also not the case of the accused that he had sought return of the subject cheques and complainant had refused to return the same. In case, the subject cheques would have been given only as a security and the Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 20 of 45 transaction about which the same were given, would have come to an end, he must have sought return of the cheques and would have not remained silent as subject cheques were duly signed and were a valuable security. It is clear that the accused never sought return of subject cheques after the same were handed over to the complainant.
c) It is admitted position of fact that after dishonour of the subject cheques, a legal notice Ex.CW1/9 was issued to the accused and admittedly, it was duly served upon him. Even if it is assumed that the accused did not seek return of cheque after the transaction was over, however, after service of legal notice, he must have come to know that the complainant has presented the cheques for encashment and now he is demanding money mentioned in the subject cheques through the legal notice. He also must have come to know that the complainant would stake claim on the basis of the subject cheques, in case, he does not pay the demanded amount. However, it is clear that the even after service of the legal notice, the accused kept silent and did not send any reply refuting the claim raised by the complainant and he also did not seek return of the subject cheques, though, according to him, the complainant was not even legally entitled to hold back the security cheques, yet complainant had presented the cheques for encashment and thereafter he starting demanding the amount mentioned in the cheques. In case, the Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 21 of 45 subject cheques would have come into the possession of complainant as claimed by the accused, then after service of legal notice, the accused must have taken prompt action seeking return of cheques, however, he remained completely dormant even after service of legal notice and did not take any action whatsoever. It has been held by Hon'ble Delhi High Court in the case reported as 172 (2010) DLT 561 V.S. Yadav Vs. Reena that it is for the accused to rebut the presumption of section 139 of N.I. Act and also that under what circumstances he had issued the cheque to the complainant as issuing a cheque is a serious business. It is also held that if the cheque was not issued in discharge of the debt then accused is supposed to take appropriate action seeking return of his cheque. In case the accused failed to establish the reason of issuance of cheque and also why he did not seek return of the cheque then it is to be assumed that he failed to rebut the presumption. The relevant portion of the para no.7 of the said case reads as under: 'In order to rebut the presumption under Section 139 of N.I. Act, the accused, by cogent evidence, has to prove the circumstance under which cheques were issued. It was for the accused to prove if no loan was taken why he did not write a letter to the complainant for return of the cheque. Unless the accused had proved that he acted like a normal businessman/prudent person entering into a contract he could not have rebutted the presumption u/s 139 N.I. Act. If no loan was given, but cheques were retained, he immediately would have protested and asked the cheques to be returned and if still cheques were not returned, he would have served a notice as complainant. Nothing was proved in this case.' Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 22 of 45
d) Moreover, when accused has taken the plea of forgery, thus, in view of the provisions of section 8 of Evidence Act, his conduct subsequent to the alleged forgery is also a relevant fact to the matter in issue. It is to be seen as to whether the accused acted diligently after the factum of alleged forgery revealed to him or he remained dormant. It is clear from the record that accused had come to know about the alleged forgery after service of the legal notice and also after filing of the complaint; however, it is clear from the record that he did not take any action against the complainant for his alleged act of forgery. No prudent man would keep silent when a serious offence of forgery is committed against him especially when the alleged offender also wants to misuse the forged documents in the legal proceedings i.e in a criminal complaint. It is clear from the record that according to the accused, the alleged forgery was committed prior to the filing of the present complaint i.e. somewhere in the August 2015 and as per record, the accused was served with the legal notice in July 2015, thus, accused had come to know about the alleged misdeeds on the part of the complainant, however, the accused has not taken any action against the complainant till date. The inaction on the part of the accused speaks for itself that the documents were duly executed and no forgery was committed with him. Furthermore, since, the accused has taken the defence of forgery; thus, in view of the provisions of section 101 of Evidence Act, the onus was on him to prove his claim of forgery.
Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 23 of 45 It has been held in the case reported as AIR 2012 Gau 183 titled as Pawan Kumar Patodia Vs Vijoy Kumar Bhutoria that heavy burden lies on the party concerned to prove the claim of forgery which has taken this plea. Relevant portion of this case is reproduced as under: 'There is also no pleading in the plaint who has forged the transfer deeds. It is a settled position of law that when the allegation of forgery is made, the burden heavily lies on the person making such allegation to prove such forgery. No amount of evidence has also been laid to prove any forgery against the appellant/defendant No.6.'
e) As per complainant, the accused is the owner of said flat and he had entered into an agreement to sell the said flat and he had initially paid Rs.16.5 lakhs and balance amount of Rs.23.5 lakhs on 06.05.2015. In order to prove this claim, the complainant brought on record the agreement to sell, payment receipt of Rs.40 lakhs (Ex.CW1/15 and Ex.CW1/16), copy of PAN card and Icard of accused as Mark A and Mark B and copy of sale deed of the flat of the accused as Mark C. The accused has denied the execution of agreement to sell and contended that the signatures on the agreement to sell are forged and fabricated signatures. It is also contended that he could not have agreed to sell the flat as his wife is coowner of the same and the agreement which is in regard to the property situated in Ghaziabad, UP, could not have been executed in Delhi. The accused has simply denied his signature; however, he has not led any evidence to prove the Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 24 of 45 forgery of his signature on the said document. In case, the complainant had forged the signatures and prepared forged and fabricated documents, the accused would not have remained silent and must have initiated appropriate legal action and sought action against complainant for forging his signature with a view to usurp his property. However, again the accused is completely silent even after the alleged forgery came to his notice.
f) During his evidence, the complainant has brought on record the agreement to sell as well as several other documents. The complainant has brought on record, the copy of PAN card and Voter ICard of accused as well as title documents of the property/Flat No.F1, First Floor, Plot No.4/170, Residential Colony, Sector4, Vaishali, Ghaziabad vide Mark A, Mark B and Mark C respectively. According to complainant, the accused had entered into an agreement to sell. The complainant has deposed in para no.4 of his affidavit about the transaction of sale purchase took place between them. The para no.4 of affidavit reads as under:
4. That the accused agreed to sell above said flat to the deponent for the total amount of Rs.40,00,000/ (Rupees forty Lac Only) to the deponent and accordingly the accused entered into agreement to sell with the deponent on 05.12.2014 executed between the accused and the deponent duly signed in the presence of witnesses and the accused receive a sum of Rs.16,50,000/ (Rupees Sixteen Lac Fifty thousand only) as earnest money against the property/Flat bearing No.F1, on First Floor, (Without Roof Right), having covered area 450 sq Ft. i.e. 41.805 Sq. Mtr., consisting of Two Bedroom, One drawing Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 25 of 45 Dining, One Kitchen, two toilet & Balcony as per annexed map, built on free hold plot No.4/170 situated at Residential colony, Sector4, Vaishali, Ghaziabad, Tahsil & District Ghaziabd, UP from the deponent and in this regard the accused also execute one separate receipt and as per the terms of the agreement, the accused agreed for execution of Sale Deed and handing over the peaceful physical vacate possession of the above said flat/property to the deponent on or before 07.05.2015. The accused also handed over the photocopy of the ownership documents i.e. sale dated on 05.12.2014.
g) Thus, it is clear that the complainant has contended that the photo copy of the ownership document of the sale deed of the flat were handed over by the accused to him and likewise, photo copy of PAN Card and Icard as well his photograph would also have been provided by the accused to the complainant. The testimony of complainant in regard to the fact that the ownership documents were handed over by the accused to the complainant has not been rebutted during his crossexamination and testimony of complainant qua the same remained completely unrebutted. Thus, it is also clear that the accused has nowhere put forth any explanation as to how the title documents of his property as well as copy of his Icard and PAN card and his photographs came into the possession of complainant, if same were not provided by him to the complainant at the time of execution of the Agreement to Sell. All these facts clearly establish that the agreement to sell was executed between the complainant and accused and accused himself handed over the copy of the said documents to the complainant else complainant Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 26 of 45 would not have come into possession of the same. Furthermore, the accused has not disputed the authenticity of the documents i.e. his voter Icard, PAN card as well as title documents of Flat. This fact further corroborates that the transaction in regard to sale purchase of the flat took place between complainant and accused.
h) The accused has taken a defence that the agreement to sell and other documents are forged and fabricated documents and same do not bear his signatures. This defence of accused does not inspire any confidence when the same is considered with the facts and circumstances discussed in the preceding paras. Furthermore, as per accused, the complainant has forged his signatures and prepared forged and fabricated documents in regard to his immovable property. However, it is clear that after the accused came to know about the said forgery, the accused has not conducted himself as any other person would conduct himself under these circumstances. The accused firstly remained silent when the complainant presented his security cheques for encashment and even thereafter, when the complainant served a legal notice upon him demanding the amount of the subject cheques which were meant only for security. It is also clear that after filing of the complaint, the accused came to know that the complainant has gone one step ahead and besides staking legal claim on the basis of security cheques, he has also forged an Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 27 of 45 agreement to sell to usurp his immovable property yet he kept silent and did not take any action whatsoever against the complainant for his number of alleged illegal acts. It cannot be assumed that a person would keep silent and would not initiate appropriate legal action against such a person who is repeatedly committing several illegal acts. Thus, the silence on the part of the accused speaks for itself that the said transaction had actually taken place between them and more particularly, when his conduct is seen along with the several other facts and circumstances as discussed in the preceding paras.
i) During the course of the arguments, Ld. Counsel for accused pointed out that certain legal provisions qua the agreement to sell. It was submitted the said agreement does not have any legal sanctity and it cannot be relied upon as neither it is a registered document nor has been attested by any notary public. It is also submitted that the agreement is hit by section 23, 65 and 73 of Contract Act as the same is not a legal contract. It was submitted that the complaint filed by the complainant is not maintainable as the same was filed in respect to an unlawful contract. As per the submissions made by the Ld. Counsel for appellant in this regard that the present contract was illegal, therefore, respondent cannot enforce the agreement to file the present complaint. It was also contended that accused is only a coowner of the flat and agreement to sell between a coowner and prospective Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 28 of 45 buyer has no legal sanctity. This court does not find any substance in these submissions. It is clear from the record that the complainant has claimed that the accused had entered into an agreement to sell the flat which could not be finalized and the consideration money of Rs.40 lakh which was taken by the accused in pursuance to the said agreement was returned back by way of subject cheques. Thus, it is clear that here in the present case, the complainant has not filed the present complaint to enforce any agreement and he has filed the present case for the dishonor of the subject cheques which according to complainant were issued by the accused towards the return of the sale consideration of the flat received by him. There may be some legal flaws in the agreement and there may also be some legal impediment to enforce the agreement, however, the vendee who had entered into an agreement to purchase a property with one of the coowners is legally entitled to pursue his appropriate remedy in regard to the dishonoured cheques which have been given by the vendor/coowner qua return of the sale consideration due to non performance of the agreement. It has been specified in section 23 of Contract Act as to which agreements are not legally enforceable and certainly, entering into an agreement to sell and purchase a property is not forbidden by law. Further, the present case has not been filed for enforcing the contract entered into between the complainant and accused and the present complaint has been filed as the Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 29 of 45 cheques given by the accused towards the return of sale consideration got dishonoured. Thus, even otherwise, the sanctity of the agreement executed between the parties of the present case is not an issue here.
j) It has been further argued that as per section 269SS and Income Tax Act, the cash transaction for the amount above Rs.20,000/ is illegal for purchasing an immovable property. Thus, again it is submitted that the present complaint is not maintainable as in the present case, there was a cash transaction of above Rs.20,000/. This court does not find any substance in this submission as it is well settled law that the complainant is legally entitled to file a complaint u/s 138 NI Act even if there is cash transaction between the parties for the amount above Rs.20,000/. In the case of "Dilip Chawla v. Ravinder Kumar, (Delhi) : 2017(3) DCR 358 : 2018 ACD 216" it has been held by the Hon'ble High Court that the complaint u/s 138 NI Act is maintainable in the case of cash transaction of more than Rs.20,000/. The relevant paras of the judgment reads as under:
23. The advancement of loan in cash may entail negative consequences for a party especially an Income Tax assessee as his having acted in breach of section 269SS of Income Tax Act, 1961. Chapter XXB provides for the requirement as to the mode of acceptance, payment or repayment in certain cases to counteract evasion of tax. Section 269SS mandates that no person, after the cut off date shall take or accept from any other person any loan or deposit otherwise than by an account payee cheque or an account payee bank draft if the amount is more than Rs. 10,000/. Breach of section 269SS of the Income Tax Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 30 of 45 Act provides penalty to which a person would be subjected to under Section 271D.
24. However, section 271D does not provide that such transaction would be null and void. The payer of money in cash, in violation of section 269SS of the Income Tax Act can always have the money recovered.
25. The Supreme Court in the case of Assistant Director of Inspection v. A.B. Shanthi, (2002) 6 SCC 259 has held as follows: "The object of introducing Section 269 is to ensure that a tax payer is not allowed to give false explanation for his unaccounted money, or if he has given some false entries in his accounts, he shall not escape by giving false explanation for the same. During search and seizure unaccounted money is unearthed and the tax payer would usually give the explanation that he had borrowed or received deposits from his relatives or friends sand it is easy for the socalled lender also to manipulate his records later to suit the plea of the taxpayer. The main object of Section 269 SS was to curb this menace.
7. In the light of the observations of the Apex Court, it cannot but be said that Section 269 SS only provided for the mode of acceptance payment or repayment in certain cases so as to counteract evasion of tax. Section 269 SS does not declare all transactions of loan, by cash in excess of Rs. 20,000/ as invalid, illegal or null and void, while as observed by the Apex Court, the main object of introducing the provision was to curb and unearth black money. To construe Section 269 SS as a competent enactment declaring as illegal and unenforceable all transactions of loan, by cash, beyond Rs. 20,000/, in my opinion, cannot be countenanced.
8. Yet another reason for this opinion is section 271D which reads thus: "271D. Penalty for failure to comply with the provisions of Section 269 SS. (1) If a person takes or accepts any loan or deposit in contravention of the provisions of Section 269 SS, he shall be liable to pay, by way of penalty, a sum equal to the amount of the loan or deposit so taken or accepted.
2) Any penalty imposable under sub section (1) shall be imposed by the Joint Commissioner." In that if a person takes or Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 31 of 45 accepts any loan or deposit in contravention of Section 269 SS is liable to pay, by way of penalty, a sum equal to the amount of the loan or deposit so taken or accepted, as may be imposed by the Joint Commissioner.
11. The contravention of Section 269 SS though visited with a stiff penalty on the person taking the loan or deposit, nevertheless, the rigour of Section 271D is whittled down by Section 273B, on proof of bona fides. It cannot therefore be said that the transaction of the nature brought before this court could be declared illegal, void, and unenforceable".
k) It has been submitted on behalf of appellant/accused that the complaint filed in the present case was not maintainable as the transaction pertaining to the sale purchase of the property was not shown in the Income Tax Return. It is well settled law that the complaint where the complainant has not shown the transaction in the ITR can maintain his complaint u/s 138 of NI Act. It has been held in the case reported as 2013(5) AIR Bom.R 294 The titled as that Mr. Krishna P. Morajkar Vs Mr. Joe Ferrao that the complaint u/s 138 N.I. Act are maintainable even where the transaction has not been shown in the Income Tax Return. The relevant para of this case is reproduced as under: 'The underlined observations do not disclose as to where can one find a prohibition on recovering amounts not disclosed in income tax returns. With utmost humility, I have to state that I have not come across any provision of Income Tax Act, which makes an amount not shown in the income tax returns unrecoverable. The entire scheme of the Income Tax Act is for ensuring that all amounts are accounted for. If some amounts are not accounted for, the person would be visited with the penalty or at times even prosecution under the Income Tax Act, but it does not Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 32 of 45 mean that the borrower can refuse to pay the amount which he has borrowed simply, because there is some infraction of the provisions of the Income Tax Act. Infraction of provisions of Income Tax Act would be a matter between the revenue and the defaulter and advantage thereof cannot be taken by the borrower. In my humble view, to say that an amount not disclosed in the income tax returns becomes irrecoverable would itself defeat the provisions of section 138 of the Negotiable Instruments Act. Thus, it is held that the present complaint is maintainable.'
l) It has been further argued on behalf of the appellant that in view of the settled law the respondent was required to establish his financial capability of making cash payment of Rupees Forty Lakh. It was further submitted that respondent/complainant had contended that he had taken Gold Loan of Rupees Forty Lakh from Muthoot Finance, however, complainant did not produce any record in regard to the said loan before ld. Trial Court and thus, he has failed to prove source of his income and therefore, complainant has failed to prove his case beyond reasonable doubt. On the other hand it was contended by Ld. Counsel for complainant that complainant and his other family members had taken Gold Loan of Rs.39,48,600/ and had received the said amount in cash from Muthoot company. It was submitted that though complainant had mentioned his source of the payment of Rs.40,00,000/ to the accused during his cross examination, however, complainant could not file the documents pertaining to the Gold Loan at that time. It was further submitted that complainant has filed the Gold Loan documents in the appeal to specify the source of payment of cash amount of Rs.40,00,000/.
Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 33 of 45 Though the complainant has filed the documents pertaining to receipt of loan amount in the present proceedings, however, these documents cannot be taken into consideration as the same were not produced by the complainant in his evidence. Though, the complainant could not prove his source of the amount of Rs.40,00,000/, however, before making any discussion about the legal requirement of proving his financial capability by the complainant, it is to be seen whether the accused has been successful in rebutting the presumption u/s 118 and 139 of N.I. Act. As discussed above, it is well settled law that in view the provisions of Sec 118 as well as 139 N.I. Act, initially, it has to be presumed that the subject cheques were drawn against due consideration and firstly, onus is always on the accused to rebut the settled legal presumptions with his probable defence, however, it is clear from the discussions already made in the preceding paras that accused has miserably failed to prove his defence. Accused has not brought on record any evidence to support his defence. As far as testimony of DW1 is concerned, it is clear that she could not establish the defence taken by the accused that subject cheques were issued towards security of a committee. Thus, the defence of the accused is not supported by any relevant evidence and it is well settled law that simple denial of liability cannot be taken as rebuttal to the settled presumption. Accused was required to establish on record that the subject cheques had entered in the hands of the complainant as claimed Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 34 of 45 by him. It is well settled law that the presumption u/s 139 NI Act cannot be rebutted by simply making statement and accused has to bring on record the evidence to prove the defence taken by him. In this regard, this court is supported with the case law reported as "Hiten P. Dalal v. Bratindranath Banerjee, (SC) :
2001(5) BCR 820". The relevant para of the judgment reads as under:
21. In other words, provided the facts required to form the basis of a presumption of law exist, no discretion is left with the Court but to draw the statutory conclusion, but this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary. A fact is said to be proved when, "after considering the matters before it, the Court either believes it 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" [Section 3 : Evidence Act]. Therefore, the rebuttal does not have to 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 standard of reasonability being that of the 'prudent man'.
22. Judicial statements have differed as to the quantum of rebutting evidence required. In Kundan Lal Rallaram v. Custodian, Evacuee Property, Bombay, AIR 1961 Supreme Court 1316, this Court held that the presumption of law under Section 118 of Negotiable Instruments Act could be rebutted, in certain circumstances, by a presumption of fact raised under Section 114 of the Evidence Act. The decision must be limited to the facts of that case. The more authoritative view has been laid down in the subsequent decision of the Constitution Bench in Dhanvantrai Balwantrai Desai v. State of Maharashtra, AIR 1964 Supreme Court 575, where this Court reiterated the principle enunciated in State of Madras v. Vaidyanath Iyer (supra) and clarified that the distinction between the two kinds of presumption lay not only in the mandate to the Court, but also in the nature of the evidence Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 35 of 45 required to rebut the two. In the case of a discretionary presumption the presumption if drawn may be rebutted by an explanation which "might reasonably be true and which is consistent with the innocence" of the accused. On the other hand in the case of a mandatory presumption "the burden resting on the accused person in such a case would not be as light as it is where a presumption is raised under Section 114 of the Evidence Act and cannot be held to be discharged merely by reason of the fact that the explanation offered by the accused is reasonable and probable. It must further be shown that the explanation is a true one. The words 'unless the contrary is proved' which occur in this provision make it clear that the presumption has to be rebutted by 'proof' and not by a bare explanation which is merely plausible. A fact is said to be proved when its existence is directly established or when upon the material before if the Court finds its existence to be so probable that a reasonable man would act on the supposition that it exists. Unless, therefore, the explanation is supported by proof, the presumption created by the provision cannot be said to be rebutted........."
[See also V.D. Jhingan v. State of Uttar Pradesh, AIR 1966 Supreme Court 1762; Sailendranath Bose v. The State of Bihar, AIR 1968 Supreme Court 1292 and Ram Krishna Bedu Rane v. State of Maharashtra, 1973(1) SCC 366.]
23. We will therefore have to consider whether in the case before us, the appellant had supported his defence by any proof sufficient to rebut the presumption drawn against him.
m) It is well settled law that simple denial of liability cannot be termed to be a valid defence of the accused. In "K.N. Beena v. Maniyappan (SC), Criminal Appeal No. 1066 of 2001", it has also been held by the Hon'ble Supreme Court that the burden is on accused to prove his defence by way of cogent defence evidence and if he fails to prove that the cheque was not issued against debt or liability then presumption u/s 139 NI Act would remain unrebutted. Relevant paras reads as under: Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 36 of 45
6. In our view the impugned Judgment cannot be sustained at all. The Judgment erroneously proceeds on the basis that the burden of proving consideration for a dishonoured cheque is on the complainant. It appears that the learned Judge had lost sight of Sections 118 and 139 of the Negotiable Instruments Act. Under Section 118, unless the contrary was proved, it is to be presumed that the Negotiable Instrument (including a cheque) had been made or drawn for consideration. Under Section 139 the Court has to presume, unless the contrary was proved, that the holder of the cheque received the cheque for discharge, in whole or in part, of a debt or liability. Thus in complaints under Section 138, the Court has to presume that the cheque had been issued for a debt or liability. This presumption is rebuttable. However the burden of proving that a cheque had not been issued for a debt or liability is on the accused. This Court in the case of Hiten P. Dalal v. Bratindranath Banerjee, 2001 (3) RCR (Crl.) 460 SC : 2001(6) SCC 16 has also taken an identical view.
7. In this case admittedly the 1st Respondent has led no evidence except some formal evidence. The High Court appears to have proceeded on the basis that the denials/averments in his reply dated 21st May, 1993 were sufficient to shift the burden of proof onto the Appellant/Complainant to prove that the cheque was issued for a debt or liability. This is an entirely erroneous approach. The 1st Respondent had to prove in the trial, by leading cogent evidence, that there was no debt or liability. The 1st Respondent not having led any evidence could not be said to have discharged the burden cast on him. The 1st Respondent not having discharged the burden of proving that the cheque was not issued for a debt or liability, the convection as awarded by the Magistrate was correct. The High Court erroneously set aside that conviction.
n) It has been held by the Hon'ble Delhi High Court in the case reported as "Sanjay Arora vs. Monika Singh (Cri. Appeal no.98/2017)" that the onus is on the accused to rebut the presumption either by direct evidence or by bringing on record the required material, however, the simple denial of liability is not sufficient to rebut the presumption.
Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 37 of 45
o) In view of the facts and circumstances of the present case, it is clear that accused failed to rebut the presumptions exist in favour of the complainant, consequently, in view of the settled legal position, It is to be held that the subject cheques were drawn by the accused against due consideration. Furthermore, it is clear from the above detailed discussions that the transaction as claimed by complainant had taken place between the parties, as the agreement to sell is supported by several other documents of the accused about which no explanation has been furnished by the accused. Further, the accused has been completely inactive and dormant throughout and this conduct of the accused also makes everything amply clear that he kept mum for the sole reason as the complainant had raised a genuine claim. As far as proving the financial capacity is concerned, It has been held in recent pronouncement of Hon'ble Apex Court reported as SLP (Cri. No.3858/2019) titled Pavan Diliprao Dike vs Vishal Narenderbhai Parmar that heavy burden to prove the financial capability cannot be laid on the complainant in a cheque bounce case. In the case of T. Vasanthakumar Vs Vijaykumari reported as 2015(3) SCC (Cri) 609, also the complainant had failed to prove the source of payment of loan amount of Rs.5 Lakh to the accused. In the case of T. Vasanthakumar, the Hon'ble Apex Court has held that the presumption of Sec 139 N.I. Act can be drawn in the cases where accused has admitted the issuance of cheque as well as his signature on the cheque Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 38 of 45 and in case, he has failed to prove his defence, it is to be held that he has failed to rebut the presumption. In the case of T. Vasanthakumar while making the abovesaid observations, Hon'ble Apex Court has relied upon the Judgment of Rangappa case.
23.Furthermore, it has been recently held by Hon'ble Supreme court in the case of M. Abbas Haji vs T.N. Channakeshva (2019) 9 SCC 606 that it is for the accused to establish as to how his cheques entered into the hands of the complainant. The same view has been taken by the Hon'ble High Court of Madras in the case reported as 2019(4) AICLR 873 titled as S. Ravi vs Kumarsan, Cr. Appeal No.63/2012. In the present case, the accused has taken a defence that he had handed over subject cheques to the complainant towards security of a committee, however, as discussed above the accused has not brought on record the requisite evidence in this regard. The evidence of DW1, the wife of the accused is also not reliable as she has also not brought on record the requisite particulars of the committee. Thus, it is clear that in the instant case, the accused had made only assertion that he had given the subject cheques as security for the committee, however, he has failed to bring on record the relevant evidence in this regard. It has been held in the case of Binoy Bothra v. Jitendra Singh, Crl.Rev.P. 310 of 2014 that for proving existence of a fact, the relevant evidence is to be led and a particular fact cannot be proved by merely making an Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 39 of 45 assertion about the same. The relevant para of the judgment reads as under:
20. Relying to the decisions of: (i) (2008) 7 SCC 655, Mallavarapu Kasivisweswara Rao v. Thadikonda Ramulu Firm and another;
(ii)(2001) 6 SCC 16, Hiten P. Dalal v. Bratindranath Banerjee as well as (iii)Bir Singh v. Mukesh Kumar reported in (2019) 106 ACC 923, it has been submitted that unless the accused/petitioner failed to rebut the presumption created under the N.I. Act, the accused cannot succeed to deny such legal presumption under the law. Relevant observation of the decision in Hiten P. Dalal (Supra) is extracted hereinbelow for ready reference:
"23. Judicial statements have differed as to the quantum of rebutting evidence required. In Kundan Lal Rallaram v. Custodian, Evacuee Property, Bombay AIR 1961 SC 1316, this Court held that the presumption of law under section 118 of Negotiable Instruments Act could be rebutted, in certain circumstances, by a presumption of fact raised under Section 114 of the Evidence Act. The decision must be limited to the facts of that case. The more authoritative view has been laid down in the subsequent decision of the Constitution Bench in Dhanvantrai Balwantrai Desai v. State of Maharashtra AIR 1964 SC 575, where this Court reiterated the principle enunciated in State of Madras v. Vaidyanath Iyer (Supra) and clarified that the distinction between the two kinds of presumption lay not only in the mandate to the Court, but also in the nature of evidence required to rebut the two. In the case of a discretionary presumption the presumption if drawn may be rebutted by an explanation which "might reasonably be true and which is consistent with the innocence" of the accused. On the other hand in the case of a mandatory presumption "the burden resting on the accused person in such a case would not be as light as it is where a presumption is raised under Section 114 of the Evidence Act and cannot be held to be discharged merely by reason of the fact that the explanation offered by the accused is reasonable and probable. It must further be shown that the explanation is a true one. The words 'unless the contrary is proved' which occur in this provision make it clear that the presumption has to be rebutted by 'proof' and not by a bare explanation which is merely plausible. A fact is said to be proved when its existence is Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 40 of 45 directly established or when upon the material before it the Court finds its existence to be so probable that a reasonable man would act on the supposition that it exists. Unless, therefore, the explanation is supported by proof, the presumption created by the provision cannot be said to be rebutted......".
24.Furthermore, the present case is a fit case where adverse inference should be drawn against the accused. It is clear from the aforesaid discussions that the legal notice was duly served upon the accused, however, it is clear from the record that accused did not reply to the said notice. It is clear from the legal notice that complainant claimed that the accused had issued the subject cheques to return the sale consideration amount received by the accused and the same got dishonoured. Thus it is clear that after the service of legal notice the accused must have come to know that the complainant would use the cheques in the legal proceedings to claim the said amount, however, accused kept mum and did not take any action whatsoever against the complainant for his allegedly misusing the cheques and making a false claim. If the cheques were issued only towards security and at the time of sending legal notice by the complainant, he did not owe any amount and complainant had issued a false notice, the accused must have taken appropriate action against complainant for his alleged misdeeds but he kept silent. In the case reported as 2014 (8) AD (Delhi) 26 and titled as 'Santosh Mittal Vs. Sudha Dayal, the Hon'ble High Court has held that the adverse inference can be drawn against the accused where accused has Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 41 of 45 failed to controvert the allegation by sending a reply to the legal notice. The relevant para of the said case reads as under: '21. Admittedly, no reply to the legal notice was sent by her thereby rebutting the allegations made by the complainant. As far back in the year 1980, in Kaluram v. Sita Ram, 1980 RCR Note 44, it was held by this Court that when serious allegations are made in a no tice and defendant failed to send any reply, then the allegations are deemed to have been admitted. Even in Rangappa (supra) relied upon by the learned counsel for the appellant it was observed that failure on the part of the accused to reply to the statutory notice under section 138 of the Act lead to inference that there was merit in complainant's version.'
25.There is one more crucial aspect of the case which also points out that complaint has raised a genuine claim. As per accused, he had given the cheques towards security of the committee of Rs.8 lacs and according to accused the complainant did not return these cheques and has misused the same. Thus, as per defence of the accused the entire transaction about the chit fund was done by him with the complainant and therefore, it was accused who was acquainted with all the facts and circumstances of the said transaction yet he did not chose to appear in the witness box to establish his said defence and instead he brought on record the evidence of his wife who was only a hearsay witness. Thus, for this reason also an adverse inference should be drawn against the accused that he did not examine himself to avoid the questions which might have been preferred on behalf of the complainant and proved his defence unfounded. Thus, it is seems from the record that accused did not examine himself not because of the advice of Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 42 of 45 his learned counsel rather to avoid the process of cross examination. Thus, it seems that accused did not examine himself for the abovesaid reason now in the present appeal the accused taken a plea where he has put the entire blame for his non examination on the shoulder of learned counsel who conducted the entire trial for the accused. It is well settled law that it is the duty of the court to ensure that the accused has got the legal assistance to defend the case and it is clear from the record that the appellant was assisted by his learned counsel who contested the case throughout on behalf of the accused. Thus, it cannot be said that the ld. Counsel of the appellant was inept. It has been held by Hon'ble Supreme Court in the case reported as 2005(11) SCC 600 titled as State Vs. Navjot Sandhu that court must be careful while scrutinizing the performance of the counsel for the accused as the ground of ineffective performance can be always be raised after the adverse order has been passed. The relevant portion of the said case reads as under: It is not demonstrated before us as to how the case was mishandled by the advocate appointed as amicus except pointing out stray instances pertaining to cross- examination of one or two witnesses. The very decision relied upon by the learned counsel for the appellant, namely, Strickland v. Washington [466 US 668] makes it clear that judicial scrutiny of a counsel's performance must be careful, deferential and circumspect as the ground of ineffective assistance could be easily raised after an adverse verdict at the trial.
26.There is one another plea taken by the accused that the he had given the subject cheques as security which have been misused by Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 43 of 45 the complainant. Thus, accused endeavoured to contend that accused has filled the contents of cheque and has misused the same. Though, the complainant has disputed this fact and during his cross examination complainant stated that accused had handed over duly filled cheque. The relevant question here is that whether the subject were issued against due consideration of not. In view of the settled law the complainant had every right to fill relevant particulars in the cheques for encahsment, if the same were issued against due consideration. In this regard this court is supported with the recent judgment of Hon'ble Apex Court 2019(2)SCC (Cri) 40 Bir Singh Vs Mukesh Kumar. In the present case accused has miserably failed to prove his defence and rebut the presumption and in view of the discussion made in the proceeding paras it is held that since the subject cheques were issued against due consideration, hence, complainant had every right to fill in the cheques with the requisite details and present the same with his banker.
27.Thus, it is held that the accused has failed to rebut the presumption and complainant by way of his evidence has established that the accused had issued the subject cheques towards payment of return of sale consideration of the aforesaid flat. It is respectfully observed that the case laws relied upon by the Ld. Counsel for appellant are not applicable to the peculiar facts and circumstances of the present case.
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28.Since, the accused has failed to repay the cheque amount despite service of legal notice, thus, he is guilty of commission of offence u/s 138 N.I Act.
29.Keeping in view the aforesaid discussions, this court does not find any infirmity in the order passed by learned MM. and holds that the appellant has been rightly convicted u/s 138 N.I Act. Hence, the present appeal is liable to be dismissed and accordingly, the same is dismissed. Digitally signed by AJAY AJAY GUPTA Location:
Karkardooma Court GUPTA Date: 2020.11.25 15:48:39 +0530 (Ajay Gupta) ASJ02/KKD/East/Delhi Announced in open court on 25.11.2020 Cr. Appl No.45/17 Sunil Kumar Joshi vs Satender 45 of 45