Delhi District Court
The Above Legal Requirements Are ... vs Mudibasappa: (2019) 5 Scc 418 on 28 September, 2022
IN THE COURT OF MS. AAKANKSHA,
METROPOLITAN MAGISTRATE, (NI ACT)07
SOUTHWEST DISTRICT, DWARKA COURTS, NEW DELHI
Ct. Case No. 17310 of 2019
CNR No. DLSW020245472019
Amit Gupta ............Complainant
Versus
Sanjay Kumar .............Accused
(1) Name of the complainant Amit Gupta
(2) Name of the accused Sh. Sanjay Kumar
(3) Offence complained of or Section 138 NI Act
proved
(4) Plea of accused Pleaded not guilty
(5) Date of institution of case 17.05.2019
(6) Date of conclusion of 24.09.2022
arguments
(7) Date of Final Order 28.09.2022
(8) Final Order ACQUITTAL
Ct. Case No. 17310/2019 Page 1 of 26
JUDGMENT
1. The complainant Amit Gupta has instituted this complaint u/s 138 Negotiable Instruments Act, 1881 (hereinafter referred to as 'NI Act') against accused Sanjay Kumar on 16.05.2019.
2. The factual matrix as can be culled out from the complaint is that complainant and accused were on friendly terms and accused approached the complainant in the month of October 2018 requesting him to advance a friendly loan of Rs.4,50,000/ stating that he is financially constrained and also promised to return it as soon as possible. Considering the friendly relationship between the two, complainant advanced a friendly loan of Rs.4,00,000/ to the accused after having it arranged from his friends. Accused assured to return the same within three months. After the said period expired, complainant paid several visits to the accused and after much persuasion accused issued a cheque bearing number 565555 dated 26.02.2019 drawn on Corporation Bank, Tilak Nagar, New Delhi (hereinafter referred to as the 'cheque in question') to clear his above liability assuring him of the encashment upon presentation. However, to the complainant's dismay the cheque in question was returned unpaid, when it was presented for encashment through his banker State Bank of India Sector12, Dwarka, Delhi, with remarks "Payment stopped by drawer" vide return memo dated 27.03.2019. The complainant immediately asked the accused to make the payment in cash but accused sought some time to arrange the funds. Thereafter, accused started ignoring the Ct. Case No. 17310/2019 Page 2 of 26 complainant on one pretext or the other and became aggressive and violent. He threatened the complainant that he could initiate any action against accused but he was not intending to repay him. Complainant also issued a legal notice dated 10.04.2019 calling upon the accused to pay the cheque amount within 15 days from the receipt thereof, however the accused neither repaid the amount nor sent any reply to the notice despite the notice having been duly served upon him, thus constraining the complainant to file this complaint u/s 138 Negotiable Instruments Act, 1881 (hereinafter referred to as 'NI Act') seeking redress against the dishonor of cheque in question.
3. With a view to establish a prima facie case in order to enable the court to summon the accused, complainant led presummoning evidence by way of affidavit Ex.CW1/A. The complainant relied upon following documentary evidence:
(a) Original cheque bearing no. 565555 dated 26.02.2019 for a sum of Rs. 4,00,000/ drawn on Corporation Bank, which is Ex. CW1/1.
(b) Original cheque return memo dated 27.03.2019, which is Ex. CW1/2.
(c) Office copy of legal notice dated 10.04.2019, which is Ex. CW1/3.
(d) Postal receipts, which are Ex. CW1/4 and Ex. CW1/5.
(e) Tracking report, which is Ex. CW1/6 (colly.) Complainant closed his presummoning evidence on 04.06.2019.
4. On the basis of above material and finding a prima facie case made out against the accused, the accused was summoned vide order dated 04.06.2019. Accused entered his first appearance on the date fixed i.e. 03.09.2019.
Ct. Case No. 17310/2019 Page 3 of 265. Notice u/s 251 Cr.P.C. was framed against accused on 03.09.2019 stating out to him the substance of accusation, to which he pleaded not guilty and claimed trial. His defence was recorded at the stage of framing of notice in compliance of directions passed by Hon'ble High Court of Delhi in Rajesh Aggarwal v. State: 171 (2010) DLT 51. The defence he took was that he did not issue the cheque in question to the complainant, that although the signatures on the cheque were his but he did not fill in the remaining particulars, that complainant is a stranger to him, that he was carrying number of documents including blank signed cheques, Aadhar card, ATM card, copy of PAN card in a carry bag to DESU office to apply for electricity meter but his bag got misplaced somewhere when he was coming from Tagore Garden towards Tilak Nagar, he lodged a police complaint at PS Tilak Nagar and also lodged an online complaint. He admitted receiving the legal notice but denied having any liability towards the complainant.
6. On the basis of nature of defence raised, the case was deemed fit to be tried as a summons case. The application u/s 145 (2) NI Act filed by accused was allowed on 21.11.2019 and he was granted right to cross examine the complainant. The complainant examined himself as CW1 adopting his presummoning evidence as postsummoning evidence and was crossexamined and discharged. Vide separate statement of complainant, his evidence was closed on 31.01.2020.
7. Statement of accused was recorded u/s 313 Cr.P.C. r/w section 281 Cr.P.C. on 04.12.2021 wherein all the incriminating evidence was put to the accused and he was granted an opportunity to explain the Ct. Case No. 17310/2019 Page 4 of 26 circumstances appearing against him at trial. While explaining the circumstances appearing in evidence against him, accused stated without oath that he did not take any friendly loan from the complainant, although the cheque was signed by him but he did not fill in the other details, many documents including his Aadhar card and cheque in question were lost and he filed a complaint regarding the same online as well as offline, he is unaware as to how the cheque in question came in the possession of complainant, that he did not receive any legal notice however the notice bears his correct address and that he has seen the complainant for the first time in court and never gave any cheque to the complainant. Accused preferred to lead evidence in his defence.
8. In defence, accused examined himself as DW1 and closed his defence evidence vide separate statement dated 13.09.2022. Thus, DE stood closed vide order dated 13.09.2022.
9. At the stage of final arguments, Ld. counsel for complainant submitted that nothing has been proved by accused during cross examination of complainant to rebut the presumption of law in favour of complainant, that the defence taken by accused is that eight of his cheques with ATM cards got misplaced but even after receiving the summons of this case accused did not move any complaint against the complainant alleging misuse of the cheque in question, he never went to police station to enquire about the status of his complaint, no complaint has been placed on record and thus accused has been unable to rebut the presumption of legally recoverable debt and prayed to convict the accused.
Ct. Case No. 17310/2019 Page 5 of 26Per contra, Ld. counsel for accused submitted that accused did not know the complainant prior to this case, he never issued any cheque in favour of complainant, that the complainant has deposed that he runs a chicken shop and accused used to come there often, that complainant does not even know how many family members does accused have. It has been further submitted that complainant has failed to prove his financial status, when he himself is not selfsufficient how can he pay such a huge amount to accused that too a friendly one, that the complaint is silent on how much amount was taken by friends and how much amount was given by complainant from his own funds, the complainant has mentioned in the complaint that he took entire amount from his friends, however during crossexamination he deposes that he gave Rs.11.5 lac from his savings and remaining from his relatives, that there is no mention of relatives in his complaint, no name of any such relative or friend has come on record. It has been further contended that why would any person give his entire savings to someone who only is alleged to come to his shop, on a friendly loan without any security, that no other independent witness viz. some worker in the said shop or relative has been examined by complainant who would have witnesses such a huge transaction in cash at the shop and prayed to acquit the accused.
10. After hearing the arguments advanced on behalf of both the parties and perusing the record carefully, the appreciation of evidence and findings of the court are as below.
11. It would be apposite to first consider the legal position serving as base to the offence underlying Section 138 NI Act. The Ct. Case No. 17310/2019 Page 6 of 26 following legal requirements need to be satisfied in order to constitute an offence u/s 138 NI Act, as held by Hon'ble Supreme Court in the case titled as Kusum Ingots & Alloys Ltd. v. M/s Pennar Peterson Securities Ltd.: (2000) 2 SCC 745:
(i) that 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;
(ii) that the 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;
(iii) that the 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;
(iv) that 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 of the receipt of information by him from the bank regarding the return of the cheque as unpaid;
(v) that 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;Ct. Case No. 17310/2019 Page 7 of 26
The above legal requirements are cumulative, meaning thereby that only if all the aforementioned ingredients are satisfied can the person who had drawn the cheque be held liable for offence u/s 138 NI Act.
12. Burden of proof: The claim based under the provisions of Negotiable Instruments Act is an exception to the general rule of law that burden of proof lies on the prosecution. The two specific provisions viz. Section 118 (a) and 139 of NI Act 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 is assumed guilty of the offence. It was held by Hon'ble Supreme Court in the case of Rangappa v. Mohan: 2010 (11) SCC 441 that presumption of Section 139 of N.I. Act also includes the existence of legally enforceable debt:
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.Ct. Case No. 17310/2019 Page 8 of 26
Hon'ble Supreme Court, in the case of Hiten P. Dalal v. Bratindranath Banerjee: 2001 (6) SCC 16 held that the presumption mentioned in the section 139 NI Act is a presumption of law and not a presumption of fact and thus, this presumption has to be drawn in favour of the drawee and the burden to rebut the presumption with the probable defence is on the accused.
This is indeed an instance of the rule of 'reverse onus', where it is incumbent on the accused to lead what can be called 'negative evidence' i.e. to lead evidence to show nonexistence of liability. Keeping in view that this is a departure from the cardinal rule of 'presumption of innocence' in favour of the accused and that negative evidence is not easy to be led by its very nature, it is now settled that the accused can displace this presumption on a scale of preponderance of probabilities and the lack of consideration or a legally enforceable debt need not be proved to the hilt or beyond all reasonable doubts. The accused can either prove that the liability did not exist or make the nonexistence of liability so probable that a reasonable person, ought under the circumstances of the case, act on the supposition that it does not exist. He can do so either by leading own evidence in his defence or even by punching holes in the case of the complainant in the testing ordeal of crossexamination. This can be deciphered from relevant para no.21 of Hiten P. Dalal (supra):
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 Ct. Case No. 17310/2019 Page 9 of 26 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". 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'.
Further, 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.
It is, thus, clear that in cases of Section 138 NI Act, upon proof of foundational facts, law presumes in favour of drawee that the cheque was issued by the accused in discharge, wholly or in part, of legally enforceable debt or liability and the burden to rebut the same is upon the accused. The burden does not have to be conclusively established but the accused has to prove his defence on preponderance of probability.
13. Now applying the above law to the facts of the present case, it has to be adjudged whether the legal requirements laid down hereinabove have been fulfilled in the instant case.
Ct. Case No. 17310/2019 Page 10 of 2613.1. The first legal requirement is:
"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."
On the outset, it has to be proved that the accused had issued the cheque in question on his account maintained with a bank for discharge of any debt or other liability. In the instant case, accused has admitted his signatures on the cheque, in his statement recorded u/s 313 Cr.P.C. and in notice framed u/s 251 Cr.P.C. The cheque in question has also been drawn on the account maintained by him with Corporation Bank. The said fact has not been denied by accused at any stage of proceeding.
It was held in the case of Kalamani Tex & anr. v. P. Balasubramanian:
2021 SCC Online SC 75 Hon'ble Supreme Court held that:
"14. Adverting to the case in hand, we find on a plain reading of its judgment that the trial court completely overlooked the provisions and failed to appreciate the statutory presumption drawn under Section 118 and Section 139 of NI Act. The statute mandates that once the signature(s) of an accused on the cheque/negotiable instrument are established, then these 'reverse onus' clauses become operative. In such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him."
Ct. Case No. 17310/2019 Page 11 of 26The above said principle has also been crystallised by Hon'ble Supreme Court in the case of Basalingappa vs Mudibasappa: (2019) 5 SCC 418, by observing that:
"25. We having noticed the ratio laid down by this Court in above cases on Sections 118(a) and 139, we now summarise the principles enumerated by this Court in following manner:
(i) Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.
(ii) 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.
(iii) To rebut the presumption, it is open for the accused to rely on evidence led by him or accused can also rely on the 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.
(iv) That it is not necessary for the accused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden.
(v) It is not necessary for the accused to come in the witness box to support his defence."Ct. Case No. 17310/2019 Page 12 of 26
13.2. In the instant case, the accused having admitted his signatures on the cheque and the cheque being drawn on his bank account, a mandatory presumption automatically arises in favour of complainant by virtue of Section 118(a) r/w 139 NI Act that the cheque in question was issued by accused in discharge of, whole or part of, legally enforceable debt or liability.
13.3. Now the burden shifts upon accused to rebut the above presumption by raising a probable defence, by leading evidence or bringing such facts on record in the crossexamination of the complainant that could make the latter's case improbable. If, in such a case, the accused is proved to have discharged the initial onus of proof placed on him by showing that the existence of consideration was improbable or doubtful or illegal, then the onus will again shift back to the complainant who will then be under an obligation to prove it as a matter of fact and failure to do so will disentitle him to any relief on the basis of the negotiable instrument (as held in Satish Sharma v. State NCT of Delhi & anr.: (2013) 204 DLT 289).
13.4. The accused, in his defence, has examined himself as DW1 deposing that eight of his cheques issued on Corporation Bank, including the cheque in question, were misplaced along with other documents and he also filed a complaint, both online and offline, at PS Tilak Nagar vide e FIR No. 58/2019. He further deposed that he also referred this complaint to the bank and that he does not know the complainant and how the cheque in question came into the possession of complainant. During his cross examination, he deposed that after moving the said complaint to PS Tilak Ct. Case No. 17310/2019 Page 13 of 26 Nagar he went to the bank to stop honouring the cheque in question alongwith other cheques, but he did not move any complaint against the complainant for misusing the cheque and he never visited the police station to enquire about the status of his complaint. He has taken this consistent plea even at the time of framing of notice u/s 251 Cr.P.C. that he did not issue the cheque to the complainant and his cheque was, in fact, misplaced with other documents qua which he had already filed an FIR and that he does not have any liability towards the complainant. During the cross examination of CW1, accused has tried to prove that the complainant did not have sufficient means to advance interest free loan to the accused, that accused was not known to the complainant and that he had no liability towards the complainant. CW1, in his crossexamination, deposed that he runs a shop of chicken since last 15 years and knows accused as accused used to come to his shop often but he does not know how many family members did accused have, he knew that accused was a sweeper in MCD, that on previous occasions also he gave loan to the accused which was repaid and therefore believing that accused would repay he again advanced friendly loan of Rs.4,00,000/ to the accused as his daughter was not feeling well, that all the entire amount was given in cash by giving his savings of Rs.1,00,000/ to Rs. 1,50,000/ lacs and arranging the remaining amount from his relatives, that he did not take any security from the accused while advancing Rs.4,00,000/ to him nor did he execute any receipt, that the said amount was handed over to the accused in cash at the shop of complainant.
13.5. Ld. counsel for accused, based his arguments, on the premise that even if it is taken to be true that accused used to go to the shop of Ct. Case No. 17310/2019 Page 14 of 26 complainant often, a reasonable man would not advance a huge amount of Rs. 4,00,000/ to the accused that too interest free without executing any receipt of the same, and primarily by arranging that money from someone else. He also argued that no prudent man would give his entire savings to an acquaintance on the mere asking of him, without keeping with himself any proof of the same and that when complainant had admitted his own monthly income to be only Rs.15,000/ to Rs.25,000/ he surely did not have the capacity to advance such a huge amount to the accused and has only misused the lost cheque of accused to his advantage. He further submitted that complainant has failed to depose as to when and what amount was advanced to the accused on previous occasions on the basis of which complainant advanced such a huge sum to the accused again.
On the contrary, Ld. counsel for complainant relied upon the fact that no such complaint filed by accused has been placed on record, that accused did not file any complaint against the complainant after gaining knowledge that his cheque has been used by the complainant, that he never went to police station to enquire about the status of his complaint.
13.6. The court finds force in the arguments advanced on behalf of accused. Since the signatures of the accused on the cheque in question are admitted and the presumption has arisen in favour of cheque in question being issued to discharged legally recoverable debt or other liability, the accused has been able to raise a probable defence by crossexamining CW 1 and also examining himself as DW1. Although accused has failed to bring on record any such FIR lodged by him complaining of the lost cheque in question together with other documents, but he has surely deposed that the eFIR No. was 58/2019 PS Tilak Nagar and that after Ct. Case No. 17310/2019 Page 15 of 26 lodging the said FIR, he approached the bank and gave stop payment instructions. It is not incumbent upon a person, who has received summons of a criminal case lodged against him, to also lodge another complaint against the complainant for misusing his cheque, more particularly in view of the fact that he had already lodged an eFIR No. 58/2019 PS Tilak Nagar with respect to the misplaced cheque in question.
13.7. Further, in order to rebut the presumption of legally recoverable debt, accused has crossexamined CW1 to prove that complainant did not have the required means to advance the said loan. CW1 has admitted that he runs a shop of chicken and that accused used to come to his shop often. This is the only acquaintanceship with the accused pleaded by complainant, and he does not know how many family members did accused have. CW1 has further deposed that accused asked for money as his daughter was unwell, however in his complaint he merely stated that accused demanded loan as he was financially constrained. CW1 also deposed that he earns around Rs.15,000/ to Rs.25,000/ per month and does not file ITR. He further deposed that he gave an amount of Rs. 4,00,000/ to the accused that too interest free. Moreover, he arranged that amount of money by giving his savings of Rs. 1,00,000/ to Rs. 1,50,000/ and arranging the remaining amount from his relatives. However, what has been pleaded in the complaint is that the complainant somehow arranged the said amount of Rs. 4,00,000/ from his friends. This statement of the complainant is a material contradiction to his pleading, as to the source of funds. Also, the statement of CW1 during crossexamination that he took the remaining amount from his relatives, is a material contradiction to his pleading that he took the remaining amount from his friends. It also does Ct. Case No. 17310/2019 Page 16 of 26 not appeal to the conscience of the court that a prudent man who himself earns approximately Rs. 1,80,000/ to Rs. 3,00,000/ per annum would advance a huge sum of Rs. 4,00,000/, purportedly more than what he himself makes in an entire year, to just an acquaintance who visits his shop often. Further, the complainant would had this court to believe that a prudent man would part with his entire savings of Rs.1,00,000/ to Rs.1,50,000/ and then arrange the remaining sum of around Rs. 3,00,000/ from his friends or relatives, which he does not himself remember from whom he arranged the money, to give interest free loan to a friend. Moreover, neither the name of any such relative or friend have ever surfaced nor has any such person been examined by the complainant. Parting away with entire savings of his along with asking help of thrice that amount from relative/friend in order to advance an interest free loan to a friend and that too without executing any receipt/slip or proof of the same, does not appeal to the conscience of the court as an act of a prudent person. Thus, accused has been able to successfully rebut the presumption of law and discharge the burden of proof by raising a probable defence that he had no liability towards complainant and therefore he gave stop payment instructions to the bank after having a complaint registered qua the lost cheque in question.
13.8. Having rebutted the presumption of law, the burden now again shifts upon complainant to prove the issuance of cheque in discharge of legally recoverable debt or other liability, but now as matter of fact. The same could have been discharged by examining any relative/friend from whom the remaining loan amount was arranged or by examining any eye witness of the transaction as CW1 deposed that the advancement of loan Ct. Case No. 17310/2019 Page 17 of 26 in cash took place at his shop or by any other means. Even in the cross examination of DW1, complainant has been unable to contradict the defence witness. At the cost of repetition, it is not incumbent upon a person to file another complaint against every other individual for misusing his lost cheque in view of the fact that he had registered an eFIR qua the lost cheque and had been prompt in instructing his bank not to honour the cheque apprising them about the FIR, and thus has acted prior to the misuse of the cheque in question and prior to any financial loss being caused to him. Thus, the complainant has been unsuccessful in proving the issuance of cheque as a matter of fact after the initial burden to disprove the legal presumption has been discharged by the accused.
The first legal requirement is, thus, proved against the complainant and in favour of accused.
14. The second legal requirement is:
"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."
The cheque in question (Ex. CW1/1) is dated 26.02.2019. The cheque return memo (Ex. CW1/2) is dated 27.03.2019, which proves that the cheque in question was presented within the period of its validity. Further, defence has failed to controvert the said fact.
Thus, the second legal requirement is adjudicated in favour of complainant.
Ct. Case No. 17310/2019 Page 18 of 2615. The third legal requirement is:
"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."
Section 146 NI Act presumes the fact of dishonour of cheque upon production of bank's slip or memo having the official mark denoting that the cheque in question has been dishonoured. This is also a rebuttable presumption and the upon production of such bank memo, the burden shifts upon accused to disprove the same. In the instant case, the perusal of cheque return memo (Ex. CW1/2) proves that the cheque in question was returned dishonoured with the remarks "Payment stopped by drawer".
It was held in Laxmi Dyechem v. State of Gujarat: (2012) 13 SCC 375 that:
"28. What is wished to be emphasized is that the matters arising out of "stop payment" instruction to the bank although would constitute an offence under section 138 of the NI Act since this is no longer res integra, the same is an offence subject to the provision of Section 139 of the Act and hence, where the accused fails to discharge his burden of rebuttal by proving that the cheque could be held to be a cheque only for discharge of a lawful debt, the offence would be made out. Therefore the cases arising out of stop payment Ct. Case No. 17310/2019 Page 19 of 26 situation where the drawer of cheques has sufficient funds in his account and yet stops payment for bona fide reasons, the same cannot be put on par with other variety of cases where the cheque has bounced on account of insufficiency of funds or where it exceeds the amount arranged to be paid from that account, since Section 138 cannot be applied in isolation ignoring Section 139which envisages a right of rebuttal before an offence could be made out under section 138 of the Act as the Legislature already incorporates the expression "unless the contrary is proved" which means that the presumption of law shall stand and unless it is rebutted or disproved, the holder of the cheque shall be presumed to have received the cheque of the nature referred to in Section 138 of the NI Act, for the discharge of a debt or other liability. Hence, unless the contrary is proved, the presumption shall be made that the holder of a negotiable instrument is holder in due course.
30. ...the said category of cases would be subject to rebuttal as this question being rebuttable, the accused can show that the stop payment instructions were not issued because of insufficiency or paucity of funds, but stop payment instruction had been issued to the bank for other valid causes including the reason that there was no existing debt or liability in view of bona fide dispute between the drawer and drawee of the cheque. If that be so, then offence under section 138 although would be made out, the same will attract section 139 leaving the burden of proof of rebuttal by the drawer of the cheque. Thus, in cases arising out of "stop payment situation", Section 138 and 139 will have to be given a harmonious Ct. Case No. 17310/2019 Page 20 of 26 construction as in that event Section 139 would be rendered nugatory."
15.1. In the instant case, a presumption has been raised in favour of complainant by virtue of Section 146 NI Act that the cheque in question was dishonoured for the reason stated therein viz. payment stopped by drawer. The burden now shifts upon the accused to rebut this presumption by establishing some reasonable justification for giving such stop payment instruction to the bank.
15.2. To do the same, the accused examined himself in defence as DW1 and deposed that eight of his cheques issued on Corporation Bank, including the cheque in question, were misplaced along with other documents and he also filed a complaint, both online and offline, at PS Tilak Nagar vide eFIR No. 58/2019. He further deposed that he also referred this complaint to the bank and that he does not know the complainant and how the cheque in question came into the possession of complainant. During his crossexamination, he deposed that after moving the said complaint to PS Tilak Nagar he went to the bank to stop honouring the cheque in question alongwith other cheques, but he did not move any complaint against the complainant for misusing the cheque and he never visited the police station to enquire about the status of his complaint. At the cost of repetition, it would be pertinent to note that it is not incumbent upon a person to file a complaint against every other individual for misusing his lost cheque in view of the fact that he had registered an eFIR qua the lost cheque and had been prompt in instructing his bank not to honour the cheque apprising them about the FIR, and thus has acted prior Ct. Case No. 17310/2019 Page 21 of 26 to the misuse of the cheque in question and prior to any financial loss being caused to him. As observed in para no.13 (supra), accused has been able to prove that he did not owe any existing debt or liability towards complainant and has proved herein that not owing any debt/liability towards complainant was the reason he instructed his bank to stop the payment of cheque, the third legal requirement is adjudicated in favour of accused and against the complainant.
16. The fourth legal requirement is:
"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 of the receipt of information by him from the bank regarding the return of the cheque as unpaid."
The legal notice dated 10.04.2019 (Ex.CW1/3) addressed to the accused and the corresponding speed post receipts (Ex.CW1/4 and Ex. CW1/5) with the speed post tracking report (Ex. CW1/6 colly.) proves that the legal notice was sent to the accused by complainant and was duly delivered to the accused on 12.04.2019. The same is further substantiated by the plea of defence taken by accused in the notice framed u/s 251 Cr.P.C. wherein he admitted the receipt of legal notice. However, later in his examination u/s 313 Cr.P.C when the incriminating evidence was put to the accused, he denied receiving any legal notice but at the same time admitted that the notice (Ex.CW1/3) bears his correct address.
16.1. In this regard, Section 27 General Clauses Act comes into play which gives rise to presumption that service of notice has been effected Ct. Case No. 17310/2019 Page 22 of 26 when it is sent to the correct address of accused by registered post. It was held by Hon'ble Supreme Court in the case titled as C.C. Alavi Haji v. Palapetty Muhammad: (2007) 6 SCC 555 that:
14. Section 27 [General Clauses Act] gives rise to presumption that service of notice has been effected when it is sent to the correct address of accused by registered post. In view of the said presumption when stating that a notice has been sent by registered post to the address of the drawer, it is unnecessary to further aver in the complaint that in spite of the return of the notice unserved, it is deemed to have been served or that the addressee is deemed to have knowledge of the notice. Unless and until the contrary is proved by the addressee, service of notice is deemed to have been effected at the time at which the letter would have been delivered in the ordinary course of business."
Thus, in view of Section 27 General Clauses Act it is presumed that the accused received the legal notice, as he admitted his address as correctly mentioned on the legal notice (Ex.CW1/3).
16.2. Even otherwise, law expects a person pleading nonreceipt of any demand notice to prove his bona fide by making the payment of the cheque amount within 15 days of receiving court summons. This is crystallized by the verdict of Hon'ble Supreme Court in the case titled as C.C. Alavi Haji v. Palapetty Muhammed & anr.: (2007) 6 SCC 555:
"17. It is also to be borne in mind that the requirement of Ct. Case No. 17310/2019 Page 23 of 26 giving of notice is a clear departure from the rule of Criminal Law, where there is no stipulation of giving of a notice before filing a complaint. Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under section 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the Court along with the copy of the complaint under section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under section 138, by ignoring statutory presumption to the contrary under Section 27 of the G.C. Act and section 114 of the Evidence Act."
16.3. In the case at hand, despite issuance of summons and appearance of accused before the court, accused has failed to pay the cheque amount to the complainant and thus is precluded from raising the plea of nonservice of demand notice.
The fourth legal requirement is, thus, adjudicated in favour of complainant.
Ct. Case No. 17310/2019 Page 24 of 2617. The fifth legal requirement is:
"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.'' It has been presumed hereinabove that the accused received the legal notice on 12.04.2019. It is an undisputed fact and also a matter of record that the accused has failed to make the payment till date let alone making payment within 15 days of receipt of notice. The defence taken by accused for not making the payment within the statutory period of 15 days has been that he has no liability to pay the complainant.
Thus, the fifth legal requirement is adjudicated in favour of complainant.
18. All the legal requirements constituting an offence u/s 138 NI Act being being cumulative, the fact that the first and third legal requirement has not been proved in favour of complainant, the ingredients necessary to bring home the guilt of accused remain incomplete. Accordingly, accused Sanjay Kumar is acquitted for the alleged offence u/s 138 NI Act.
19. Previous bail bonds/surety bonds of the accused stand cancelled. Previous surety stands discharged. Documents of previous surety, if any, Ct. Case No. 17310/2019 Page 25 of 26 be returned against due acknowledgment. Bonds under Section 437A Cr.P.C. already furnished on behalf of the accused after conclusion of final arguments are accepted for a period of six months from today.
Announced in the open court on 28.09.2022 (Aakanksha) Metropolitan Magistrate(NI Act)07 South West District, Dwarka Courts, New Delhi Ct. Case No. 17310/2019 Page 26 of 26