Delhi District Court
Bharat Singh vs Shankuntala on 4 September, 2024
IN THE COURT OF Ms. NEHA GUPTA SINGH
CHIEF JUDICIAL MAGISTRATE
NORTH, ROHINI COURTS : DELHI
Bharat Singh
S/o Khacheru Ram
R/o H.no. 111, VPO Bakhtawarpur,
Delhi ... Complainant
Versus
Smt. Shakuntala
W/o Sh. Sushil Kumar
R/o F. No. 371, Pocket- 7,
Sector A6 (Lal Flat)
Narela, Delhi ... Accused
Case Number. : 4100/2020
Date of Institution. : 14.08.2020
Offence Complained Of. : U/s 138 NI Act
Plea of the Accused. : Not Guilty
Arguments Heard On. : 23.08.2024
Final Order. : Acquitted for offense u/s 138
NI Act
Date of Judgment. : 04.09.2024
JUDGMENT
1. Factual matrix as brought about from the complaint is that accused approached the complainant for financial help since 2017 to October 2019, and had taken sum of Rs. 5,00,000 as loan from complainant.
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2. Accused in discharge of legal liability issued cheque bearing no. 032856 dated 16.03.2020 for sum of RS. 2,50,000 drawn on Bank Of India Bakhtawarpur branch and cheque bearing no. 000043 dated 16.03.2020 for sum of RS. 2,50,000 drawn on Bank of Baroda, Narela branch.
3. The afore stated cheques were presented by the complainant for encashment to his bank The cheque no. 000043 was returned back dishonored vide return memo dated 18.03.2020 and cheque no. 032856 was returned back dishonored vide return memo dated 18.03.2020 with reason "account blocked/dormant". Complainant thereafter gave legal demand notice to the accused on 8.07.2020 after lifting up of lockdown calling upon him to make payment within 15 days from notice. The said notice was sent by the Speed Post. Despite the service the accused did not make the payment within stipulated period, hence present complaint was filed under section 138 of Negotiable Instruments Act,1881 (The Act).
4. Complaint was perused and cognizance of the offence was taken by the Ld. Predecessor. Complainant tendered pre summoning evidence by way of affidavit ExCw1/A and relied on documents Ex.CW1/1 to Ex.CW1/9.
5. Accused was admitted on bail and notice under section 251 Cr.PC was framed against the accused on to which he pleaded not guilty and claim trial. Defence as disclosed by the notice to accused is that she has not taken loan of Rs. 5,00,000 from the complainant. She has only taken loan of Rs. 90,000 which is repaid. Cheque in question does not CC No. 4100/2020 Bharat Singh Vs. Shakuntala U/s 138 NI Act 2 of 13 bear her signatures. Blank chwques were taken by the complainant. She denied receiving legal demand notice, however stated that same bears her office address.
6. Accused made an application under section 145(2). Application was allowed and accused was given opportunity to cross examine the complainant.
7. Complainant adopted his pre-summoning evidence. He conceded in his cross examination that accused resides at Sisodiaya Mohalla, Village Bakhtawarpur, Delhi. He gave money over the period of 2-3 years. In january 2017, loan was given for Rs. 20,000/- by way of cheque, after 15-20 days Rs. 15,000/- was given in cash, in February 2017 Rs. 20,000/- was given in cash, in March 2017 Rs. 50,000/- was given in cash, in April 2017 Rs. 40,000/- was given in cash, in January 2018 Rs. 50,000/- was given in cash, in March 2018 Rs. 40,000/- was given in cash, in November 2018 Rs. 50,000/- was given in cash, in December 2018 Rs. 40,000/- was given in cash, in August 2019 Rs. 60,000/- was given in cash, in September 2019 Rs. 65,000/- in cash, in October 2019 Rs. 65,000/- in cash. There is no receipt or written agreement for the above stated transactions. Amount was given in presence of his family member Meena Devi. He is not filing ITR. His source of income is through agriculture. He never gave loan to anyone except Shakuntala. He received two cheques for a sum of Rs. 2.5 lacs each from the accused in March 2020. He denied that there is no legal liability of accused towards him. He denied that accused has not taken any loan from him. He denied that he had given Rs. 90,000/- to the husband of the accused CC No. 4100/2020 Bharat Singh Vs. Shakuntala U/s 138 NI Act 3 of 13 and they have repaid Rs. 65,000/- him. He denied that cheques were given as security which are misused without consent and knowledge of the accused. He does not know any Chndrawati.
8. Complainant evidence was closed and the accused was examined under section 313 read with section 281 Cr.Pc. All the incriminating evidence were put to her in vernacular and accused stated that she has not taken loan of Rs.5 lac but Rs. 90,000 out of which 65000 is already paid. Cheques bears her signatures and given in blank as security. She did not receive legal demand notice, however address on notice is hers. Accused wished to lead defence evidence.
9. Accused examined herself as DW1 and proved copy of complaint 990/21 titled as "Bharat Singh v. Chandrawati" as Ex.DW1/A.
10.Final arguments were advanced by the counsel for the parties.
11.It was argued for the complainant that accused approached the complainant for financial help since 2017 to October 2019, and had taken sum of Rs. 5,00,000 as loan from complainant.
12.Accused in discharge of legal liability issued cheque bearing no. 032856 dated 16.03.2020 for sum of RS. 2,50,000 drawn on Bank Of India Bakhtawarpur branch and cheque bearing no. 000043 dated 16.03.2020 for sum of RS. 2,50,000 drawn on Bank of Baroda, Narela Branch.
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13.The afore stated cheques were presented by the complainant for encashment to his bank The cheque no. 000043 was returned back dishonored vide return memo dated 18.03.2020 and cheque no. 032856 was returned back dishonored vide return memo dated 18.03.2020 with reason "account blocked/dormant". Complainant thereafter gave legal demand notice to the accused on 8.07.2020 after lifting up of lockdown calling upon him to make payment within 15 days from notice. The said notice was sent by the Speed Post. Despite the service the accused did not make the payment within stipulated period. Presumption under sec 139 NI Act is in favor of the complainant. accused has not denied signatures on the cheque.
14.Per contra, it is argued by the counsel for the accused that complainant has failed to show any document of transaction, receipt etc. He is not able to prove the source of income for providing loan. He has denied any knowledge of Chndrawati, however he has given loan to her and has filed complaint against her. Reliance is placed on Basalingappa v. Mudibassappa AIR 2019 SC 1983.
15.I have heard the complainant and accused and have perused the record. Both the parties did not wish to file written arguments.
16.At the outset, it is wise to discuss the legal principles involved in present matter at hand. Present complaint is filed u/s 138 of the Act. The object of the legislation is to encourage the culture of use of cheques and enhance the credibility of the instrument.
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17.The legal regime pertaining to the offence under section 138 of the act has numerous components inter alia,
a) Cheque was drawn by a person on an account maintained by him
b) It was drawn for the discharge, in whole or in part, of any debt or other liability
c) Cheque was presented to the bank within a period of six month from the date it was drawn or within the period of its validity.
d) Cheque was returned by the bank unpaid due to insufficient funds or that it exceeds the amount arranged to be paid.
e) Payee or holder in due course make demand of payment of the said amount of money by giving a notice, in writing within 30 days of receipt of information by him from the bank regarding the return of cheque as unpaid.
f) The drawer of the cheque fails to make payment of the said amount of money within 15 days of the receipt of the said notice
g) Complaint was filed in writing within one month of the date on which cause of action arose.
18.Statutory and legal presumptions in favor of payee/ complainant as laid down by the Act and precedents can be summarized as follows :
a) Presumption as to liability: it shall be presumed unless contrary is proved that the holder of cheque received the same in discharge of any debt or liability (sec 139 and 118(a))
b) Presumption of dishonor: court shall presume dishonor of cheque on production of bank's slip or memo having official mark denoting that cheque has been dishonored unless such fact is disproved.(sec 146) CC No. 4100/2020 Bharat Singh Vs. Shakuntala U/s 138 NI Act 6 of 13
c) Service of legal demand notice: notice sent at correct address by making complete payments of postal expenses in advance deem to be served and drawer has to show during trial after leading evidence that same was not served .(see C.C. Alavi Haji v. Palapetty Muhammed 2007 Crl.l.J 3214)
19.Now, I shall discuss components of offence in light of facts and circumstances of present case
20.Issuance of cheque It is submitted by the accused that cheque in question bears her signature and given in blank as security. Section 20 NI Act talks about such instruments. As per this provision, if a person gives duly signed but blank or partly written cheque then he deem to have given implied authority to the holder to fill up the particulars in it and complete it and thus make him liable for the payment mentioned in it. Further it is argued by accused that cheque was given as security. Reliance in such case be placed on ICD vs. Beena Shabir and Anrs. 2002(6) SCC 426 wherein the Hon'ble Supreme Court has held that the security cheques also would fall within the purview of the Section 138 of the NI Act and a person could not escape his liability.
21.Cheque was present to bank for payment and it was returned back unpaid.
CC No. 4100/2020 Bharat Singh Vs. Shakuntala U/s 138 NI Act 7 of 13 The aforestated cheques were presented by the complainant for encashment to his bank The cheque no. 000043 was returned back dishonored vide return memo dated 18.03.2020 and cheque no. 032856 was returned back dishonored vide return memo dated 18.03.2020 with reason "account blocked/dormant".
22.Legal demand notice within 30 days of return of cheque and no payment by drawer within 15 days of receipt.
In present case legal demand notice Ex. CW1/5 was sent on 8.07.2020 due to country wide lockdown, and period was exempted by the Hon'ble Supreme Court from limitataion, by Speed Post and registered AD to the accused. Receipt of legal demand notice is denied by the accused. However, she has admitted on record that address on the legal demand notice is correct. Placing reliance on C.C Alavi Haji (supra) and section 27 General clauses Act, read with section 114 Evidence Act , when the notice is sent by registered post by correctly addressing the drawer of the cheque, the mandatory requirement of issue of notice in terms of Clause (b) of proviso to Section 138 of the Act stands complied with. It is then for the payee to rebut the presumption about the service of notice and show that he had no knowledge that the notice was brought to his address or that the address mentioned on the cover was incorrect or that the letter was never tendered or that the report of the postman was incorrect. In present case accused has not brought any cogent evidence to show that notice was not delivered to him, moreover she has admitted the address on notice to be correct. No payment is made after receipt of notice or after summons. In such circumstances facts stands proved against the accused.
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23.Legally enforceable debt or liability It is a well settled position of law that when a negotiable instrument is drawn, two statutory presumptions arise in favor of the complaint, one under Section 139 NI Act and another under Section 118(a) of the NI Act. Further, the court will presume a negotiable instrument for consideration unless and until after considering the matter before it, it either believes that the consideration does not exist or consider the non-existence of the consideration so probable that a prudent man ought under the circumstances of the particular case to act upon the supposition that the consideration does not exist. For rebutting such presumption, what is needed is to raise a probable defense. Reliance is placed on M.S. Narayana Menon v. State of Kerala, (2006) 6 SCC
39.
24.In Kumar Exports Vs. Sharma Carpets, (2009) 2 SCC 513, wherein the Apex Court examined as to when complainant discharges the burden to prove that instrument was executed and when the burden shall be shifted as follows.
"18. Applying the definition of the word "proved" in Section 3 of the Evidence Act to the provisions of Sections 118 and 139 of the Act, it becomes evident that in a trial under Section 138 of the Act a presumption will have to be made that every negotiable instrument was made or drawn for consideration and that it was executed for discharge of debt or liability once the execution of negotiable instrument is either proved or admitted.
CC No. 4100/2020 Bharat Singh Vs. Shakuntala U/s 138 NI Act 9 of 13 As soon as the complainant discharges the burden to prove that the instrument, say a note, was executed by the accused, the rules of presumptions under Sections 118 and 139 of the Act help him shift the burden on the accused. The presumptions will live, exist and survive and shall end only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability. A presumption is not in itself evidence, but only makes a prima facie case for a party for whose benefit it exists.
19.The use of the phrase "until the contrary is proved" in Section 118 of the Act and use of the words "unless the contrary is proved" in Section 139 of the Act read with definitions of "may presume" and "shall presume" as given in Section 4 of the Evidence Act, makes it at once clear that presumptions to be raised under both the provisions are rebuttable. When a presumption is rebuttable, it only points out that the party on whom lies the duty of going forward with evidence, on the fact presumed and when that party has produced evidence fairly and reasonably tending to show that the real fact is not as presumed, the purpose of the presumption is over.
20. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not insist in every case that the accused should disprove the non-existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the CC No. 4100/2020 Bharat Singh Vs. Shakuntala U/s 138 NI Act 10 of 13 same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant."
25.In "Bharat Barrel & Drum Manufacturing Company Vs. Amin Chand Pyarelal" , (1999) 3 SCC 35 wherein the Court dealt with the presumption of S 118 of the Negotiable Instruments Act and held thus:
"Though the evidential burden is initially placed on the defendant by virtue of S.118 it can be rebutted by the defendant by showing a preponderance of probabilities that such consideration as stated in the pronote, or in the suit notice or in the plaint does not exist and once the presumption is so rebutted, the said presumption 'disappears'. For the purpose of rebutting the initial evidential burden, the defendant can rely on direct evidence or circumstantial evidence or on presumptions of law or fact.
Once such convincing rebuttal evidence is adduced and accepted by the Court, having regard to all the circumstances of the case and the preponderance of probabilities, the evidential burden shifts back to the plaintiff who has also the legal burden. Thereafter, the presumption under S.118 does not again come to the plaintiff's rescue. Once both parties have adduced evidence, the Court has to consider the same and the burden of proof loses all its importance."
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26. It was held in "Krishna Janardhan Bhat vs Dattatraya G. Hegde"
(2008) 4 SCC 54 that whereas prosecution must prove the guilt of an accused beyond all reasonable doubt, the standard of proof so as to prove a defence on the part of an accused is preponderance of probabilities. Inference of preponderance of probabilities can be drawn not only from the materials brought on records by the parties but also by reference to the circumstances upon which he relies.
27.In the present case, liability is disputed by the accused. He has alleged that loan was not taken as alleged by the complainant. Complainant has failed to show any document to prove that he advanced loan to the accused. There is no witness to the transaction. Nothing is brought on record by complainant, despite the fact that loan transaction is disputed by accused. Loan was not shown in ITR, nor any receipt is taken from accused. As per complaint total loan of Rs. 5,00,000 was advanced to the accused, however during deposition complainant has stated that he advanced sum of Rs. 5,15,000.
28.It is argued for the complainant that accused did not give any stop payment instructions to bank. Here it is pertinent that It is the cardinal principle of Criminal Justice delivery system that the complainant has to prove the guilt of accused beyond reasonable doubts. No matter how weak the defence of accused is but, the golden rule of the Criminal Jurisprudence is that the case of the complainant has to stand on its own leg. When, accused has raised the doubt in transaction, then complainant was duty bound to prove the transaction. Accused has rebutted the presumption raised under CC No. 4100/2020 Bharat Singh Vs. Shakuntala U/s 138 NI Act 12 of 13 section 139 NI Act. Reliance can be placed on Rajaram S/O Sriramulu Naidu vs Maruthachalam 2023 LiveLaw (SC) 46 .
29.Accordingly, Accused Shakuntala is acquitted for offense u/s 138 NI Act.
Neha Digitally signed
by Neha Gupta
Announced in the open court Gupta Singh
Date: 2024.09.04
Singh 14:53:28 +0530
on 04th September, 2024
Neha Gupta Singh
CJM North
Rohini Court/New Delhi
Certified that this judgment contains 13 pages and each page bears my signatures. Neha Digitally signed by Neha Gupta Singh Gupta Date: 2024.09.04 Singh 14:53:34 +0530 Neha Gupta Singh CJM North Rohini Court/New Delhi CC No. 4100/2020 Bharat Singh Vs. Shakuntala U/s 138 NI Act 13 of 13