Delhi District Court
CT CASES/611595/2016 on 17 July, 2023
IN THE COURT OF MS. NISHAT BANGARH: MM, NI ACT-02,
SOUTH-EAST DISTRICT, SAKET COURTS COMPLEX: NEW DELHI
Sushil Kumar v. Nobat Singh
CC No.611595/2016
U/s 138 Negotiable Instruments Act, 1881
1. CIS number : DLSE020000642016
DLSE02-000064-2016
2. Name of the Complainant : Sushil Kumar.
3. Name of the Accused, : Nobat Singh, Indra Gandhi National
parentage & residential Centre for the Arts, Govt. of India,
address Ministry of Culture, Janpath, New Delhi.
4. Offence complained of or : U/s 138 of Negotiable Instruments Act,
proved 1881
5. Plea of the Accused : Pleaded not guilty and claimed trial
6. Final Judgment/order : Convicted
7. Date of judgment/order : 17.07.2023
JUDGMENT
1. The Complainant has filed the present complaint under Section 138/142 of Negotiable Instruments Act, 1881 ("NI Act") against the accused on the averments that the accused was in urgent need of some money and accordingly the accused approached the complainant for a friendly loan, in the first week of June, 2015, for a period of 06 months. At the time of taking the aforesaid amount, the accused issued a post-dated Sushil Kumar v. Nobat Singh Page no.1/14 CC No.611595/2016 cheque bearing no. 166166, dt. 27.01.2016, amounting to Rs. 1,10,000/-, drawn on Canara Bank, GBM Branch, New Delhi in favour of the complainant ('Cheque in question').
2. Upon presentment, the cheque in question was returned unpaid on the ground of funds insufficient vide return memo dated 01.02.2016.
3. The Complainant sent the legal demand notice dated 27.02.2016 through speed post at the address of the Accused. Hence, despite the service of the legal demand notice, the accused failed to make the payment within the stipulated period and the Complainant filed the present complaint.
4. After taking pre-summoning evidence, Accused was ordered to be summoned in this case for commission of offence under Section 138 of NI Act vide order dated 21.04.2016.
5. Accused appeared and was released on bail on 31.05.2018. On finding a prima facie case, notice U/s 251 of the Criminal Procedure Code, 1973 ("CrPC") was served upon the Accused on 16.09.2019 to which he pleaded not guilty and opted to contest after disclosing the following defence:
" I have already made the payment in cash to some agent on behalf of the complainant. I do not remember his name. I also do not remember the date and month but the payment was made in 2016. I do not want to say anything else."
6. Vide order dated 03.12.2019, application on behalf of accused u/s 145(2) was allowed and opportunity was granted to the Accused to cross examine the Complainant. The Complainant/CW1 adopted his post- summoning evidence affidavit, Ex. CW1/G and also proved following Sushil Kumar v. Nobat Singh Page no.2/14 CC No.611595/2016 documents:
Ex. CW1/A: Original cheque bearing No. 166166
amounting to Rs. 1,10,000/- dt. 27.01.2016.
Ex. CW/B: Original return memo dt. 01.02.2016.
Ex. CW/C: Copy of legal demand notice dt. 27.02.2016.
Ex. CW/D: Postal receipt in respect of legal demand
notice.
Ex. CW/E: Internet generated tracking report in respect
of legal demand notice.
Ex. CW/F: Complaint u/s 138 NI Act.
Ex. CW/G: Evidence by way of Affidavit.
7. Complainant Evidence was closed by way of separate statement of the complainant on 22.10.2022.
8. Thereafter, Accused was examined under Section 313 of CrPC on 16.11.2022 for explaining the circumstances appearing against him in the Complainant's evidence. He denied the Complainant's case and pleaded false implication in the present case and opted to lead evidence in his defence.
9. As part of defence evidence, the accused examined himself as DW-1 and DE was closed by way of separate statement of the accused on 16.02.2023.
10. I have heard Ld. Counsel for the parties and have perused the case file along with the written submissions filed by the parties carefully and meticulously.
Submissions of the Complainant and Accused
11. The Ld. Counsel for the Complainant has submitted that all ingredients of Section 138 NI Act are fulfilled in the present case and hence, the presumption under Section 139 NI Act arises in the favour of the Sushil Kumar v. Nobat Singh Page no.3/14 CC No.611595/2016 Complainant, which has not been successfully rebutted by the Accused.
12. Per contra, Ld. Counsel for the Accused has submitted that the Accused deserves to be acquitted as the Accused has already made entire payment of loan amount to the agent of the Complainant Ganesh, accused has no liability left towards the complainant. Hence, as per the Ld. Counsel for the Accused, the Accused has rebutted the presumption by way of preponderance of probabilities.
Legal Framework Ingredients of Section 138 NI Act:
13. The Hon'ble Supreme Court of India in Kusum Ingots & Alloys Ltd and Ors v. K Pennar Peterson Securities Ltd and Ors., (2000) 2 SCC 745 ("Kusum Ingots Case"), has clearly stipulated that "the ingredients which are to be satisfied for making out a case under the provision are:
(i) 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 cheque has been presented to the bank within a period of six months1 from the date on which it is drawn or within the period of its validity whichever is earlier;
(iii) 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 1 Reduced to three months vide RBI circular dated 4.11.2011.
Sushil Kumar v. Nobat Singh Page no.4/14 CC No.611595/2016 paid from that account by an agreement made with the bank;
(iv) 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 152 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(v) 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;
If the aforementioned ingredients are satisfied then the person who has drawn the cheque shall be deemed to have committed an offence."
14. Therefore, if the aforesaid ingredients are made out, the Accused is deemed to have committed an offence under Section 138 NI Act.
Presumption under Section 139 NI Act/Section 118 NI Act:
15. Section 139 NI Act states that:
"Presumption in favour of holder: It shall be presumed, unless the contrary is proved, 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"
16. Section 139 NI Act is a type of reverse onus clause, which stipulates a presumption in the favour of the Complainant as to fact of a cheque being received in discharge of a legal debt or liability.
17. Further, Section 118(a) of the NI Act, states as follows:
2 The same is now enhanced to 30 days.
Sushil Kumar v. Nobat Singh Page no.5/14 CC No.611595/2016 "Presumptions as to negotiable instruments. -- Until the contrary is proved, the following presumptions 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, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;"
18. The Hon'ble Supreme Court of India has in a number of judgments dealt with the combined effect of the presumptions raised under Section 139 and Section 118(a) NI Act.
19. The following proposition can be summarized on a perusal of the judgments of the Hon'ble Supreme Court of India in Sunil Todi & Ors v. State of Gujarat, LL 2021 SC 706, Kalamani Tex v. P. Balasubramanian, 2021 SCC OnLine SC 75; APS Forex Services Pvt. Ltd. v. Shakti International Fashion Linkers and Ors., AIR 2020 SC 945; Rohitbhai Jivanlal Patel v. State of Gujarat and Ors., AIR 2019 SC 1876; Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513 ("Kumar Exports Case"); K.N. Beena v. Muniyappan and Anr., (2001) 8 SCC 458; and Dhanvantrai Balwantrai Desai v. State of Maharashtra, 1964 Cri. LJ 437:
(a) Once the execution of cheque is admitted; Section 139 of the NI Act mandates a presumption that the cheque was for the discharge of legally enforceable debt or liability;
(b) 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 Sushil Kumar v. Nobat Singh Page no.6/14 CC No.611595/2016 preponderance of probabilities;
(c) Something which is probable has to be brought on record by the Accused for getting the burden of proof shifted to the Complainant.
To disprove the presumptions, the Accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non-existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist;
(d) The words "unless the contrary is proved" which occur in Section 139, 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 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 Section 139 NI Act cannot be said to be rebutted;
(e) 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;
(f) 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.
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CC No.611595/2016
Analysis
20. In the case at hand, it is not in dispute that the cheque in question was drawn by the Accused from his bank account or that he is the signatory of the cheque in question, as the same has been admitted by him in statement u/s 294 and u/s 313 CrPC. Presentation of the cheque in question by the Complainant and its dishonor is also not in dispute, having been admitted by the accused in statement U/s. 313 CrPC. The receipt of the legal demand notice has been denied by the Accused in statement U/s. 313 CrPC. However, the complainant has placed on record tracking report which shows item delivered and the accused has admitted that the address mentioned on the legal notice is his correct address. Accordingly, a presumption of due service is drawn U/s. 27 of the General Clauses Act.
21. Thus, the legal demand notice Ex. CW1/C is held to have been duly served upon the Accused. Finally, the complaint has been filed within the limitation period. Therefore, essential ingredients (i) to (v) as stipulated by the Hon'ble Supreme Court in Kusum Ingots Case (supra), have been duly satisfied.
22. Further, as noted above, once the execution of the cheque by the Accused is proved/admitted, the presumption of the same being drawn for consideration stands attracted in terms of Section 139 NI Act. Now, in the case at hand, so far as the question of existence of basic ingredients for drawing of presumption U/s 118 (a) and 139 of the NI Act is concerned, from the aforesaid discussion, it is apparent that the Accused has not denied his signatures on the cheque in question that has been drawn in favour of the Complainant on a bank account maintained by the Accused; and hence the said presumption can be drawn. The Ld. Counsel for the Accused has stated that such inference cannot be drawn as a blank signed cheque was Sushil Kumar v. Nobat Singh Page no.8/14 CC No.611595/2016 given to the Complainant and the details on the same have been filled by or at the instance of the Complainant. At this stage, reliance can be laid on the observations of the Hon'ble Supreme Court in Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197; wherein it has been held that:
"It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted...
38. If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the Accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence...
40. Even a blank cheque leaf voluntarily signed and handed over by the Accused, which is towards some payment, would attract presumption Under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt."
23. The same view has been endorsed by the Hon'ble High Court of Delhi in Ravi Chopra v. State, CRL.M.C. 5211/2006.
24. Hence, in view of such clear stipulation by the Hon'ble Supreme Court and Hon'ble Delhi High Court, it is immaterial whether or not the particulars on the cheque have been filled by the Accused or not, to the Sushil Kumar v. Nobat Singh Page no.9/14 CC No.611595/2016 extent the Accused has admitted to have appended his signatures on the cheque in question. Accordingly, the applicability of the presumption under Section 139 NI Act is not dependent upon the Accused filling the particulars on the cheque. Accordingly, it is required to be presumed that the cheque in question was drawn for consideration and the holder of the cheque i.e., the Complainant received the same in discharge of an existing debt. The onus, therefore, shifts on the Accused to establish a probable defence so as to rebut such a presumption.
25.. In the segment on legal framework, set out above, the legal proposition with respect to the burden of proof upon the Accused has already been discussed. Hence, it is now to be examined as to whether the Accused brought any material on record or pointed out glaring discrepancies in the material produced by the Complainant for dislodging the presumption which meets the standard of preponderance of probabilities.
26. . The Accused in the present case, has taken the following line of defence with a view to rebut the presumption:
a). The only defence accused has taken is that he has repaid the loan amount.
27. To establish his defence, first, accused has alleged that he has already made the payment in cash to some agent on behalf of the complainant in notice u/s 251 CrPc. He also stated that he does not remember the name of the agent and the date and month in which the payment was made. Further he has stated that payment was made in the year 2016.
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28. Secondly, during cross examination of CW-1/complainant, Ld. Counsel for the accused has put forth following question to the CW- 1/complainant.
"Ques. I put to you that the accused repaid the amount of Rs 1,10,000/- to you at Eastern Court, Janpath two months after the taking of the said loan. What do you say?
Ans. It is incorrect"
Here accused has tried to establish that he has repaid the loan amount of Rs.1,10,000/- to complainant at Eastern Court, Janpath two months after taking the said loan from complainant. Hence, till this stage, accused did not dispute the loan transaction and loan amount.
29. Thirdly, in statement u/s 313 CrPC, accused has disputed the loan amount and states that it incorrect to say that he has taken loan of Rs. 1,10,000. Complainant had only given Rs. 30,000/ and he has repaid the amount of Rs.30,000/ to the complainant.
30. Fourthly, during the chief examination of DW1/Accused, he brings new facts on record by stating that he knows complainant through one of the colleagues in his office namely Saroj, he has taken loan of Rs. 30,000/ through Saroj and he has already paid the entire amount to Ganesh who is brother of the complainant. He also stated that Ganesh has told him that he has not given money to the complainant.
Further, accused during cross-examination stated of DW- 1/Accused, he reveals that he did not file any complaint before any police station that he has paid the amount to Ganesh and complainant has not Sushil Kumar v. Nobat Singh Page no.11/14 CC No.611595/2016 received the amount from Ganesh. He also admitted that he did not write any letter to the complainant regarding the amount given to Ganesh. Then, he voluntarily stated that he had orally told the complainant that amount has already been paid to Ganesh. He further voluntarily stated that he maintains a diary but the same has been misplaced by him and he cannot produce the said diary. He also stated that the signature on that diary is not of the complainant but of Ganesh (brother of complainant).
31. For the sake of argument, if one were to assume that accused has taken loan of Rs. 30,000/- from the complainant and he has repaid the entire amount to Ganesh who is brother of the complainant. Then following pertinent questions arises.
a). Why accused did not send a written notice to complainant to demand his cheque back from him after repayment of loan amount. Throughout the course of trial, the accused did not whisper anything about the recourse he took to procure back the cheque from complainant.
b). Why accused did not file a complaint either with his bank or with the police in order to ensure that his submitted cheques were not misused. It is also noteworthy to point out that accused merely issued a blank cheque and never cared to ask or enquire about the status of the cheque issued by him.
32. Failure to disclose the steps taken by accused to procure back the cheque, to know about the status of the cheque or to file complaint regarding misuse of cheque causes dubiety to lurk around the story of the defence. Hence, adverse inference can be drawn against the accused as he has failed to adduce any credible evidence to show that he did everything within his power and control as a prudent person would do to ensure that cheques issued by him were not misused.
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33. Further, no document or record was brought on record to even substantiate the fact that accused had repaid the loan amount to the brother of the complainant Ganesh or to complainant. Accused merely stated voluntarily in his cross examination that he maintains a diary but the same has been misplaced by him and he cannot produce the said diary. He further stated that the signature on that diary is not of the complainant but of Ganesh (brother of complainant). Also, accused did not mention at any stage of the trial that Ganesh was authorized to receive money on behalf of the complainant, on the contrary, accused admits during his examination as DW-1 that the amount has never been paid to the complainant, Ganesh told him that he has not given money to the complainant.
34. Furthermore, accused did not find it appropriate to cite or examine Mr. Ganesh as witness. Hence, it cannot be ruled out accused had something to hide. If this were not so he would not have lost the valuable opportunity to examine Mr Ganesh as witness to whom he claims to have paid the money.
35). Also, the fact that accused has taken inconsistent and contradictory stand at different stages of the trial, in itself reflects doubt on the story of accused.
36). Accordingly, this defence of the Accused as to repayment of the liability under the cheque in question, does not inspire confidence from the stand point of a reasonable man weighed against the standard of preponderance of probabilities.
Conclusion:
37). In these circumstances and in view of the above detailed Sushil Kumar v. Nobat Singh Page no.13/14 CC No.611595/2016 discussion, this court is of the considered opinion that the Accused has failed to rebut the presumption under Section 139 of Negotiable Instruments Act, 1881 in favour of the Complainant and ingredients of Section 138 of Negotiable Instruments Act, 1881 are fully proved. Therefore, Accused is held guilty and convicted for commission of offence punishable under Section 138 of the Negotiable Instrument Act, 1881. Let he be heard on the quantum of sentence on 21.07.2023 at 12:30 noon.
Announced in Open Court (Nishat Bangarh)
MM (NI-Act 02), South East
Saket Court, New Delhi/17.07.2023
Note: This judgment contains 14 pages and each page has been signed by me.
(Nishat Bangarh) MM (NI-Act 02), South East Saket Court, New Delhi/17.07.2023 Sushil Kumar v. Nobat Singh Page no.14/14 CC No.611595/2016