Delhi District Court
16. In The Case Of Kusum Ingots And Alloys ... vs . Pennar Peterson Securities on 15 May, 2023
IN THE COURT OF SH. UMANG JOSHI
MM (NI ACT) DIGITAL COURT-05,
SOUTH WEST, DWARKA COURTS, NEW DELHI
Criminal Complaint No.: 4818/2021
Amit Rana ........Complainant
Versus
Amit Chaudhary ............. Accused
1. SI. No. of the case : CC NI Act No.4818/2021
2. Date of institution of the case : 03.02.2021
3. Name and address of the complainant : Amit Rana,
R/o House No. A-111, Village
& P.O. Ghevra,
New Delhi-110081
4. Name and address of the accused : Amit Chaudhary,
R/o House No. 140, Main
Road, Maujpur, North East
Delhi, Delhi-110053
5. Offence complained of: Section 138, Negotiable Instruments Act
6. Plea of the accused: Accused pleaded not guilty
7. Final order: Convicted
8. Date of such order: 15.05.2023
Digitally signed by
Umang Joshi Umang Joshi
Date: 2023.05.15
13:48:39 +05'30'
CC NI Act No. 4818/2021 Page 1 of 29
JUDGMENT
A. Factual Matrix of the case:
1. Briefly stated, the factual matrix of the case as per the complaint is that the complainant and the accused were school friends and there were friendly relations between their families. It is further stated that in March, 2015, the accused made an offer of investment to the complainant in the diamond business run by the accused with his brothers and the complainant sought time to discuss the said proposal with his family. It is further stated that the family of the complainant agreed to the said proposal and during the period of 15.03.2015
- 25.03.2015, a total sum of Rs. 15,00,000/- was paid to the accused in cash as well as through bank which was arranged by father and wife of the complainant. It is further stated that the accused promised to refund the entire amount with share in profit. It is further averred in the complaint that during the period of 11.01.2017 - 07.10.2017, the complainant and his wife also paid a sum of Rs. 4,00,000/- to the accused, out of which Rs. 1,35,000/- was transferred in the account of Mohit Chaudhary being the brother of the accused and Rs. 2,65,000/- was paid to the accused in cash as per his request and demand. It is further stated that the accused had only paid a sum of Rs.
1,00,000/- on 19.01.2018 and a sum of Rs. 2,00,000/- on 16.09.2019 in the account of wife of the complainant and assured to repay the remaining borrowed amount of Rs. 16,00,000/- with profits and sought time till December, 2019. However, the accused failed to pay the said due amount and thereafter, on 16.02.2020, a meeting was held with the accused in the presence Umang Digitally signed by Umang Joshi Joshi Date: 2023.05.15 13:48:50 +05'30' CC NI Act No. 4818/2021 Page 2 of 29 of his family members and the accused promised to repay the entire due amount of Rs.16,00,000/- within a period of 1 ½ year. It is further stated that the accused in order to discharge his liability, issued 8 post dated cheques for a sum of Rs. 2,00,000/- each, in favour of the complainant, his wife and father of the complainant. It is further stated that the cheque bearing no. 043404 dated 15.06.2020 amounting to Rs. 2,00,000/- was issued by the accused in favour of wife of complainant but it was not presented at his request. It is further stated that thereafter the accused paid a total sum of Rs.2,00,000/- in the account of wife of the complainant against the said cheque. It is further stated that the accused issued a cheque bearing no. 043405 dated 15.08.2020 amounting to Rs. 2,00,000/- drawn on Axis Bank, Karkardooma, Delhi (hereinafter referred as "cheque in question") in favour of the complainant. Thereafter, the complainant presented the said cheque for encashment with his banker Axis Bank, B-1/503, Janakpuri branch, New Delhi, but the same was dishonoured and returned with remarks "Funds Insufficient" vide return memo dated 13.11.2020. It is further stated that thereafter the complainant sent a legal demand notice dated 12.12.2020 vide speed post on the address of the accused and also through email and whatsapp. However, the accused failed to pay the cheque amount to the complainant within the stipulated period of 15 days from the date of receipt of the legal demand notice. Accordingly, the present complaint has been filed by the complainant against the accused under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred as "NI Act").
Umang Digitally signed by
Umang Joshi
Joshi Date: 2023.05.15
13:49:14 +05'30'
CC NI Act No. 4818/2021 Page 3 of 29
B. Appearance of accused, framing of notice and proceedings incidental thereto:
2. Vide order dated 04.03.2021, cognizance of the offence under Section 138 of the NI Act was taken by this court and upon a prima facie case being found against the accused, the summons were issued against the accused directing the accused to appear before the court. On 01.10.2021, the accused entered appearance before this court and the accused was admitted to bail subject to furnishing of Personal Bond and Surety Bond in the sum of Rs.10,000/- each.
3. Thereafter, on 05.04.2022, the substance of allegations against the accused were explained to the accused in vernacular and notice under Section 251 of the Code of Criminal Procedure, 1973 (hereinafter referred as "Cr.P.C") for the offence punishable under Section 138 of the NI Act was put to the accused to which the accused pleaded not guilty and claimed trial. The plea of defence of the accused was also recorded in the notice. In the notice put to the accused, the accused stated that the cheque in question bears his signatures and the accused denied issuing the cheque in question to the complainant. In the plea of defence, the accused stated that that there were business transactions between him and the complainant. The accused further stated that the complainant had come to his office and had taken the cheque in question without his knowledge and has misused the same. The accused further stated that he has no liability towards the complainant.
4. Thereafter, the statement of the accused as to the admission/denial of documents was recorded under Section 294 Cr.P.C. The accused in his statement admitted that the cheque in question is from his bank account and Umang Digitally signed by Umang Joshi Joshi Date: 2023.05.15 13:49:21 +05'30' CC NI Act No. 4818/2021 Page 4 of 29 also admitted his signatures on the cheque in question. Furthermore, the accused admitted the cheque return memo and also the receipt of the legal demand notice.
5. The accused had also filed an application under Section 145 (2) of the NI Act which was allowed vide order dated 27.05.2022 and accordingly the accused was permitted to cross-examine the complainant witnesses.
C. Complainant's Evidence:
6. In order to prove his case, the complainant examined himself as CW-1 and relied upon his evidence by way of affidavit Ex. CW-1/A wherein the contents of the complaint have been reiterated by the complainant. The complainant also relied upon the following documents to prove its case which are as follows:
a) Cheque bearing no. 043404 dated 15.06.2020 amounting to Rs. 2,00,000/- issued by the accused in favour of wife of complainant. Ex. CW-1/1.
b) Copy of bank passbook of wife of complainant for the period 03.08.2016 to 09.12.2019. Mark A (Colly).
c) Cheque in question bearing no. 043405 dated 15.08.2020 amounting to Rs. 2,00,000/-. Ex. CW-1/2.
d) Cheque return memo dated 13.11.2020 of the cheque in question. Ex. CW-1/3.
e) Legal demand notice dated 12.12.2020 with postal receipt and postal tracking report of the legal demand notice. Ex. CW-1/4 (colly).
Umang Digitally signed by
Umang Joshi
Joshi Date: 2023.05.15
13:49:28 +05'30'
CC NI Act No. 4818/2021 Page 5 of 29
f) Proof of service of legal demand notice through Email and whatsapp. Ex. CW-1/5 (colly).
7. Thereafter, the complainant was duly cross examined by the counsel for accused. Furthermore, no other witnesses were examined by the complainant to prove its case. Accordingly, the complainant evidence was closed and the matter was listed for recording the statement of the accused under Section 313 Cr.P.C read with Section 281 Cr.P.C.
D. Statement of accused under Section 313 Cr.P.C read with Section 281 Cr.P.C:
8. Thereafter, all the incriminating evidence which were against the accused were put to the accused and his statement under Section 313 Cr.P.C read with Section 281 Cr.P.C was recorded on 01.03.2023 wherein the accused reiterated his defence stated in the notice and the accused denied any liability towards the complainant.
E. Defence Evidence:
9. In his statement under Section 313 Cr.P.C read with Section 281 Cr.P.C, the accused stated that he wishes to lead defence evidence and thereafter an application under Section 315 Cr.P.C was filed by the accused along with the list of witnesses. Vide order dated 27.03.2023, the said application was allowed and the accused was permitted to lead defence evidence. Accordingly, the accused examined himself as DW-1. Thereafter, one Mr. Mohit Choudhary stated to be the brother of the accused examined himself as DW-2. DW-1 and Umang Digitally signed by Umang Joshi Joshi Date: 2023.05.15 13:49:35 +05'30' CC NI Act No. 4818/2021 Page 6 of 29 DW-2 were also cross examined by the counsel for the complainant.
Furthermore, no other witnesses were examined by the accused to prove its case and accordingly, the defence evidence was closed. Accordingly, the matter was listed for final arguments.
F. Final arguments:
10. Final arguments were heard at length from both the parties.
11. Ld. Counsel for the complainant has argued that the complainant has proved all the ingredients of the offence under Section 138 of the NI Act, 1881 beyond reasonable doubt. Ld. Counsel for the complainant has further argued that the accused has admitted his signature on the cheque in question and therefore the statutory presumptions under Section 139 and 118 of the NI Act arises in favour of complainant i.e. that the cheque in question was issued by the accused to the complainant in discharge of legally enforceable debt or liability. Ld. Counsel for the complainant has further argued that the accused has not raised any probable defence and has not proved his defence and the accused has failed to rebut the presumption arising in favour of complainant. Ld. Counsel for the complainant has further argued that the cheque in question was issued by the accused in discharge of his legal liability towards the complainant and the accused has also admitted friendly relations and business transactions with the complainant. Ld. Counsel for the complainant contends that despite admitting the receipt of the legal demand notice, the accused did not even reply to the legal demand notice. Ld. Counsel for the complainant has further argued that the accused did not lodge any police complaint qua the alleged misuse of the Umang Digitally signed by Umang Joshi Joshi Date: 2023.05.15 13:49:43 +05'30' CC NI Act No. 4818/2021 Page 7 of 29 cheque in question by the complainant and also did not write any letter to his bank regarding the alleged misuse of the cheque in question by the complainant.
Ld. Counsel for the complainant has further argued that the accused has not lead any credible evidence to prove its case and has failed to rebut the presumptions during the cross examination of the complainant and even during his defence evidence. Ld. Counsel for the complainant submits that the testimony of the complainant in his cross examination is uncontroverted and the complainant has proved its case beyond reasonable doubt.
12.Per contra, Ld. Counsel for the accused has argued that the accused has raised a probable defence and has rebutted the statutory presumptions and the complainant has not proved its case beyond reasonable doubt. Ld. Counsel for the accused has argued that the complaint does not mention the sum of money advanced by the complainant to the accused. It is further argued by Ld. Counsel for the accused that the accused had no legal liability towards the complainant. Ld. Counsel for the accused has argued that no sum of money was ever taken by the accused from the complainant and the accused does not have any legally enforceable debt or liability towards the complainant. It is further argued by Ld. Counsel for the accused that that even if it is assumed that any amount was due to be paid by the accused to the complainant, even then the amount mentioned on the cheque in question does not represent the legally recoverable debt. Ld. counsel for the accused has argued that even assuming the case of the complainant to be true, even then only a sum of Rs.1,00,000/- was a legally recoverable debt to be paid by the accused to the complainant as opposed to the sum of Rs. 2,00,000/- which is the amount of the cheque in question. Ld. Counsel for the complainant has further contended during final arguments that Umang Digitally signed by Umang Joshi Joshi Date: 2023.05.15 13:49:52 +05'30' CC NI Act No. 4818/2021 Page 8 of 29 since the alleged investment in the business of the accused was done by the father and wife of the complainant in 2015 as mentioned in the complaint and since the cheque in question is dated 15.08.2020, the cheque in question cannot be said to have been issued in discharge of a legally enforceable debt as the debt became time barred. Ld. Counsel for the accused further contends that the accused has raised a probable defence and the complainant has not proved the ingredients of the offence under Section 138 of the NI Act.
13. I have heard the submissions made by counsel for both the parties and have also perused the record thoroughly.
G. Legal provisions and the legal principles:
14. Before appraising the facts and appreciating the evidences of the present case in detail, it is imperative to encapsulate the relevant legal provisions germane to the adjudication of the present case. The present complaint case has been filed under Section 138 of the NI Act alleging the dishonour of the cheque in question bearing number no. 043405 dated 15.08.2020 amounting to Rs. 2,00,000/-
15. Section 138 of the NI Act mandates that the dishonour of a cheque is an offence if the ingredients mentioned therein are fulfilled. It is therefore imperative to refer the bare provision of Section 138 of the NI Act and the same is as follows:
"Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the Umang Digitally signed by Umang Joshi Joshi Date: 2023.05.15 13:50:07 +05'30' CC NI Act No. 4818/2021 Page 9 of 29 discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that 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 that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both."
16. In the case of Kusum Ingots and Alloys Ltd. vs. Pennar Peterson Securities Ltd. (2000) 2 SCC 745, the apex court has expounded the ingredients which are required to be fulfilled in order to constitute an offence under Section 138 of the NI Act. The relevant portion of the said judgment laying down the ingredients to be satisfied for making out a case under Section 138 of the NI Act is reproduced as under:
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 months 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 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 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;
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;"
Umang Digitally signed by
Umang Joshi
Joshi Date: 2023.05.15
13:50:17 +05'30'
CC NI Act No. 4818/2021 Page 10 of 29
17. A drawer of the cheque can be said to have committed an offence under Section 138 of the NI Act only when all the above mentioned ingredients are fulfilled. It is pertinent to note that Section 138 of the NI Act cannot be read in isolation and it has to be read with certain legal presumptions which arise in favour of the payee or holder in due course and the said presumptions are enunciated under Section 139 and 118 of the NI Act. Section 139 of the NI Act reads as follows:
"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, or any debt or other liability."
18.Furthermore, Section 118 (a) of the NI Act deals with presumption of consideration and provides that until the contrary is proved, it shall be presumed that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has be accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration. The aforesaid legal presumptions which arise in favour of the complainant are rebuttable in nature and the burden to rebut the said presumptions is on the accused. Furthermore, it is well settled in a catena of judgments that the accused can rebut the said presumptions by showing preponderance of probabilities. The accused can rebut the said presumptions by raising a probable defence or by discrediting or creating doubt on the case of the complainant. Furthermore, it is not incumbent upon the accused to lead direct evidence to rebut the said presumptions and the accused may rebut the said presumptions by showing preponderance of probabilities and for that purpose, he may also rely upon the evidences adduced by the complainant.
Umang Digitally signed by
Umang Joshi
Joshi Date: 2023.05.15
13:50:33 +05'30'
CC NI Act No. 4818/2021 Page 11 of 29
19. In this context, it is imperative to refer to the case of Rangappa vs. Sri Mohan (2010) 11 SCC 441 wherein it has been held by the Hon'ble Supreme Court as follows:
"It is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of `preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own."
20.Therefore, the legal position that emerges is that for rebuttal of the presumptions envisaged under Section 139 and 118 of the NI Act, the accused is not required to examine himself and the accused need not step into the witness box as the accused can discharge his burden and probabalise his defence by placing reliance on the materials already brought on record by the complainant. The standard of proof required from the accused to rebut the presumptions is preponderance of probabilities and the accused is not required to prove his defence on the yardstick of proof beyond reasonable doubt as required from the complainant.
H. Undisputed/ Uncontroverted facts
21.The accused in the notice put to him under Section 251 Cr.P.C and in the statement under Section 294 Cr.P.C, has not denied that the cheque in question was issued from his account. Therefore, it is not in dispute that the original cheque in question i.e. Ex.CW-1/2 has been drawn on an account maintained by the accused. Furthermore, the cheque in question bears the name of complainant as the payee and the present complaint has been filed by the complainant in his Umang Digitally signed by Umang Joshi Joshi Date: 2023.05.15 13:50:44 +05'30' CC NI Act No. 4818/2021 Page 12 of 29 own name. Thus, the complainant has been able to discharge the burden of proving that the cheque in question was issued in his favour on an account maintained by the accused. Furthermore, it is not in dispute that the cheque in question was presented within its validity period. Furthermore, the factum of dishonour of the cheque in question with remarks "Funds Insufficient" vide return memo Ex. CW-1/3 is not disputed by accused. The accused in the notice under Section 251 Cr.P.C and in the statement under Section 294 Cr.P.C has admitted that he had received the legal demand notice from the complainant. Furthermore, all the requirements for filing a complaint under Section 138 of NI Act have been complied with in the present case and the present complaint has been filed within the period of limitation.
I. Points for determination:
a) Whether the presumption under section 118(a) and section 139 of the NI Act can be raised in favour of complainant in the present case?
b) If the answer to the aforesaid is in affirmative, whether the accused has been able to rebut the said presumptions by raising a probable defence?
Umang Digitally signed by Umang Joshi Joshi Date: 2023.05.15 13:50:52 +05'30' CC NI Act No. 4818/2021 Page 13 of 29 J. Reasons for the decision:
a) Whether the presumption under Section 118(a) and Section 139 of the NI Act can be raised in favour of complainant in the present case?
22.The first question which needs to be determined is whether the presumption under Section 118(a) and Section 139 of the NI Act can be raised in favour of complainant in the present case. Section 118 (a) and Section 139 of the NI Act provide for legal presumptions as to the issuance of the cheque by the accused in favour of the complainant for consideration and in discharge of a legally enforceable debt or other liability.
23.However, it is imperative to note that the statutory presumption under Section 118 (a) and Section 139 of the NI Act only arises if the accused admits his signatures on the cheque. Therefore, once the accused admits his signature on the cheque in question, the presumption under Section 118 and 139 of the NI Act is drawn in favour of the complainant.
24.In K. Bhaskaran vs. Sankaran Vaidhyan Balan (1999) 7 SCC 510, it has been held by the apex court that if the signature on the cheque is admitted to be that of the accused, then the presumption as provided under Section 118 of the NI Act is applicable and it can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears. Furthermore, in Kalamani Tex vs. P. Balasubramanian (2021) 5 SCC 283, it was held by the apex court as follows:
Umang Digitally signed
by Umang Joshi
Joshi Date: 2023.05.15
13:50:58 +05'30'
CC NI Act No. 4818/2021 Page 14 of 29
"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."
25.In this context, it is also imperative to refer the decision of the apex court in Basalingappa vs. Mudibasappa (2019) 5 SCC 418 wherein it was held as follows:
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 witnes box to support his defence."
26.The crux of the aforesaid decisions is that the statutory presumption as envisaged under Section 118 (a) and Section 139 of the NI Act only arises if the accused admits his signatures on the cheque. The execution of the cheque by the accused has to be therefore proved as prerequisite for the applicability of the aforesaid statutory presumptions in favour of the complainant.
27.It is pertinent to note that in the notice under Section 251 Cr.P.C and in the statement under Section 294 Cr.P.C, the accused has admitted his signature on the cheque in question and has further admitted that the cheque in question is Umang Digitally signed by Umang Joshi Joshi Date: 2023.05.15 13:51:06 +05'30' CC NI Act No. 4818/2021 Page 15 of 29 from his account. Therefore, it is concluded that the presumption under Section 118(a) and Section 139 of the NI Act that the cheque in question was issued in discharge of a legally recoverable debt or other liability is raised in favour of complainant in the present case.
b) Whether the accused has been able to rebut the said presumptions by raising a probable defence?
28.Since the execution of the cheque in question in favour of the complainant has been admitted by the accused, the next question which needs to be determined is whether the accused has been able to rebut the aforesaid statutory presumptions. Therefore, the onus of proof is now upon the accused to raise a probable defence so as to rebut the presumption of the existence of a legally recoverable debt arisen in favour of the complainant.
29.It is a settled law that the presumption under Section 118(a) and Section 139 of the NI Act is a rebuttable presumption and the accused can rebut the said presumption by raising a probable defence on a scale of preponderance of probabilities or by discrediting or creating doubt on the case of the complainant. Furthermore, it is not incumbent upon the accused to lead direct evidence to rebut the said presumptions and the accused may rebut the said presumptions by showing preponderance of probabilities. The standard of proof expected from the accused to establish the probability of his defence is not the same as the standard of proof expected from prosecution or complainant in a criminal trial. While the complainant or prosecution is expected to prove its case beyond Umang Digitally signed by Umang Joshi Joshi Date: 2023.05.15 13:51:13 +05'30' CC NI Act No. 4818/2021 Page 16 of 29 reasonable doubt, the accused is expected to prove his defence on the scale of preponderance of probabilities.
30. Therefore, it is imperative to examine the defence of the accused in the present case. In the plea of defence in the notice under Section 251 Cr.P.C, the accused has stated that there were business transactions between him and the complainant. The accused has further stated that the complainant had come to his office and had taken the cheque in question without his knowledge and had misused the same. The accused has further denied any liability towards the complainant. The aforesaid defence has been reiterated by the accused in his statement under Section 313 Cr.P.C read with Section 281 Cr.P.C and also in his deposition as DW-1. In his examination in chief, the accused deposed that the complainant was his school friend and the complainant used to come to his office. The accused further deposed that the cheque in question was kept in his office and the complainant has taken the cheque in question kept at his office without his knowledge and has misused the same. The primary defence of the accused is therefore that the cheque in question was kept in his office and the same was taken by the complainant from his office without his knowledge and the same has been misused by the complainant. In other words, the accused has alleged that the complainant has committed theft of the cheque in question by taking away the cheque in question kept at his office without his knowledge.
31.In order to prove its case, it was incumbent upon the accused to prove his defence on the scale of preponderance of probabilities or by discrediting the case of the complainant by leading cogent evidence or by relying on the material already on record so as to rebut the statutory presumption arising in favour of the complainant. However, throughout the entire trial, the accused has Umang Digitally signed by Umang Joshi Joshi Date: 2023.05.15 13:51:22 +05'30' CC NI Act No. 4818/2021 Page 17 of 29 miserably failed to substantiate and fortify his primary defence that the complainant has misused the cheque in question by committing its theft from the office of the accused.
32.In this context, it is imperative to refer to the cross examination of the accused i.e. DW-1. In his cross examination, DW-1 being the accused has admitted that he did not file any complaint and did not write any letter to his bank regarding the misuse of the cheque in question by the complainant. The relevant portion of the cross examination of DW-1 is as follows:
"I have not lodged any complaint with any authority with respect to misuse of the cheque in question by the complainant. I have not written any letter to my bank regarding the misuse of the cheque in question by the complainant. I have not initiated any legal proceedings against the complainant with respect to misuse of the cheque in question. I have not given any reply to the legal demand notice sent by the complainant to me."
33.In this backdrop, it is worthwhile to mention that any reasonable man of ordinary prudence whose cheque is misused and stolen from his office premises, would have promptly taken steps to get back his cheque from the person purported to have misused and stolen the same and would also have filed a police complaint against the person purported to have misused and stolen the same in the event of it not being returned. However, as per his own admission during his cross examination, the accused did not lodge any police complaint or any complaint with any authority with respect to the alleged misuse and theft of the cheque in question by the complainant. Furthermore, the accused also did not write any letter to his bank regarding the alleged misuse of the cheque in question by the complainant which thereby casts a grave doubt on the veracity of the version put forth by the accused. The accused did not take any steps to get back his cheque from the complainant who is alleged to have misused the Umang Digitally signed by Umang Joshi Joshi Date: 2023.05.15 13:51:29 +05'30' CC NI Act No. 4818/2021 Page 18 of 29 same nor did he issue any stop payment instructions to his bank qua the said cheque. It is pertinent to mention that the cheque in question was dishonoured due to the reason "Funds Insufficient" and not "payment stopped by drawer". The conduct of the accused in not lodging any complaint against the complainant for the alleged misuse of the cheque in question is indeed perplexing and defies logic and it also raises an adverse inference against the accused. In these circumstances, the defence raised by the accused does not even appear to be probable let alone credible and the said defence has remained unproved during the entire trial.
34.Furthermore, it is not the case of the accused that he does not know the complainant or that the complainant is a stranger to him. In his examination in chief, the accused DW-1 has deposed that the complainant was his school friend and has further deposed in his testimony that he had friendly relations with the complainant and his family members. The accused has also admitted that there were business transactions between him and the complainant. Therefore, it is inexplicable as to why the accused did not file any police complaint and did not take any steps against the complainant who is alleged to have misused the cheque in question.
35.It is pertinent to mention that in the notice under Section 251 Cr.P.C, the accused has admitted that he had received the legal demand notice from the complainant. Furthermore, in his cross examination, the accused has admitted that he did not give any reply to the legal demand notice sent by the complainant to him. The said conduct of the accused is inexplicable and it further erodes the credibility of his defence. Since the primary defence of the accused is that the complainant had come to his office and had taken the cheque Umang Digitally signed by Umang Joshi Joshi Date: 2023.05.15 13:51:41 +05'30' CC NI Act No. 4818/2021 Page 19 of 29 in question without his knowledge, it was incumbent upon the accused to atleast reply to the legal demand notice sent by the complainant and thereby rebut the allegations of the complainant. However, the accused strangely preferred to remain silent even after the receipt of the legal demand notice from the complainant and did not even bother to reply to the said notice. The silence of the accused in such circumstances casts a grave doubt on the veracity of the version put forth by the accused and it also raises an adverse inference against the accused. Such conduct of the accused defies all logic and is antithetical to how a reasonably prudent person would have acted in the event of his cheque being stolen and misused by a known person from his office premises. The aforesaid conduct of the accused further renders the defence of the accused unworthy of credence.
36. Furthermore, it is pertinent to mention that during the entire cross examination of the complainant CW-1, neither any question and nor any suggestion was put by the accused to the complainant on the alleged misuse of the cheque in question by the complainant. The entire defence of the accused is founded on the alleged theft and misuse of the cheque in question by the complainant from the office of the accused. The accused in his defence has alleged theft of the cheque in question by the complainant from the office of the accused and it is indeed a grave allegation. However, the accused did not even ask a single question from the complainant on the aspect of the alleged theft and misuse of the cheque in question by the complainant during the entire cross examination of the complainant and it additionally casts a grave doubt on the entire defence put forth by the accused.
Umang Digitally signed by
Umang Joshi
Joshi Date: 2023.05.15
13:51:49 +05'30'
CC NI Act No. 4818/2021 Page 20 of 29
37. Furthermore, even during his examination in chief, the accused DW-1 failed to substantiate and prove his defence as to the alleged misuse of the cheque in question by the complainant. The accused in his examination in chief merely reiterated what was already stated by him at the stage of framing of notice and in his statement under Section 313 Cr.P.C read with Section 281 Cr.P.C and merely deposed that the cheque in question was kept in his office and the complainant took the said cheque without his knowledge and has misused the same. Throughout the entire trial, the accused has merely reiterated the said defence but has miserably failed to prove and even substantiate the same. The accused has not even mentioned the particulars as to the date, month or even the year when the complainant allegedly came to his office and took away and stole the cheque in question from his office without his knowledge. The entire defence raised by the accused does not even appear to be probable and the same is unworthy of credence.
38.Furthermore, in the entire cross examination of the complainant, the accused has been unable to elicit any admission from the complainant admitting the defence of the accused. Even during the cross examination of the complainant, the accused could not discredit the case of the complainant and the accused did not even ask any question or put any suggestion to the complainant so as to challenge his financial capacity to have lent any sum of money to the accused. The complainant deposed in his cross examination that he had invested a sum of Rs.4,00,000/- in the business of the accused. However, even during the cross examination of the complainant, the accused failed to punch holes in the case of the complainant and the accused could not disprove or discredit the said version of the complainant i.e. the alleged investment by the complainant in the business of the accused. Furthermore, no evidence whatsoever was led by the Umang Digitally signed by Umang Joshi Joshi Date: 2023.05.15 13:51:57 +05'30' CC NI Act No. 4818/2021 Page 21 of 29 accused during the entire trial to rebut the said version of the complainant. Rather, the accused has admitted during the trial that there were business transactions between him and the complainant. The accused has admitted that he and his brother used to supply GPS tracking devices to the complainant in pursuance of their business transactions with the complainant. If the accused was genuinely questioning and disputing the alleged investment by the complainant in the business of the accused, he should have questioned the complainant on various aspects and should have asked the complainant to disclose the details of the said investment or to prove his source of his income or to produce his account books or any other details so as to discredit or create a doubt in the case of the complainant. However, no such questions were asked by the accused during the cross examination of the complainant. By choosing not to ask any such question from the complainant even during his cross examination, the accused has failed to probabalise his defence and has failed to rebut the statutory presumptions. Furthermore, since the execution of the cheque in question has not been disputed by the accused, the statutory presumptions are raised in favour of the complainant and therefore the burden was upon the accused to rebut the same. However, the accused has miserably failed to prove and substantiate his defence and has been unable to bring to fore sufficient material or circumstances upon which the court may disbelieve the case of the complainant. No cogent evidence was led by the accused in his defence so as to discredit the case of the complainant. As already stated, the statutory presumptions are raised in favour of the complainant in the present case and the burden was upon the accused to disprove the version of the complainant. However, no cogent evidence was led by the accused in his defence to discredit the case of the complainant.
Umang Digitally signed by
Umang Joshi
Joshi Date: 2023.05.15
13:52:06 +05'30'
CC NI Act No. 4818/2021 Page 22 of 29
39.Furthermore, even the testimony of DW-2 i.e. Mohit Chaudhary being the brother of the accused has not probabalised and fortified the defence of the accused. In his testimony, DW-2 admitted that there were business transactions between him and the complainant. DW-2 further deposed that the cheque in question was not handed over to the complainant by him or by the accused in his presence. However, even DW-2 did not depose anything on the aspect of the alleged misuse of the cheque in question by the complainant and even DW-2 failed to substantiate and prove the defence of the accused. However, in his cross examination, DW-2 admitted that the accused did not file any complaint against the complainant regarding the misuse of the cheque in question. Except for bare denial to the suggestions put, the testimony of DW-2 has not given any credence to the case of the accused.
40.The onus of proving that the complainant stole the cheque in question from the office of the accused and misused the same was upon the accused. However, the accused has miserably failed to substantiate the said defence and has merely made mere bald assertions unsubstantiated by any cogent and credible evidence. It is a well settled principle of law that mere assertion of a fact does not amount to proof of the same. The accused has not produced any evidence, documentary or oral, which would provide credibility to his defence. The defence of the accused does not even remotely appear to be a probable defence and the accused has miserably failed to rebut the mandatory presumptions of law envisaged under Section 118 and 139 of the NI Act.
41.Furthermore, during the final arguments stage, Ld. counsel for the accused argued that even if it is assumed that any amount was due to be paid by the accused to the complainant, even then the amount mentioned on the cheque in Umang Digitally signed by Umang Joshi Joshi Date: 2023.05.15 13:52:18 +05'30' CC NI Act No. 4818/2021 Page 23 of 29 question does not represent any legally recoverable debt. Ld. counsel for the accused argued that assuming the case of the complainant to be true, even then only a sum of Rs. 1,00,000/- was due to be paid by the accused to the complainant. Ld. counsel for the accused has argued that as per paragraph 3 of the complaint, it is mentioned that the complainant and his wife had paid a sum of Rs. 4,00,000/- to the accused and has further argued that the complainant has admitted in paragraph 4 of the complaint that the accused had repaid a sum of Rs. 3,00,000/- in the account of the wife of the complainant. Ld. counsel for the accused has argued that even assuming the case of the complainant to be true, even then only a sum of Rs.1,00,000/- was a legally recoverable debt to be paid by the accused to the complainant as opposed to the sum of Rs. 2,00,000/- which is the amount of the cheque in question.
42.The said argument is devoid of any merits for various reasons explained hereunder. It is imperative to mention that the question as to whether the cheque in question represents any legally recoverable debt or not is a matter of evidence and trial. However, interestingly, throughout the entire trial, the accused has denied any debt being due to the complainant but at the stage of final arguments, an argument has been advanced by Ld. counsel for the accused that the cheque in question does not represent any legally recoverable debt. However, no evidence whatsoever was led during the trial by the accused so as to prove that the cheque in question does not represent any legally recoverable debt. Furthermore, no defence to that effect was ever raised by the accused during the entire trial. It is pertinent to note that the accused has not even admitted any debt or any sum of money being due by him to the complainant and rather during the entire trial, his case was that no sum of money was due to be paid by him to the complainant. If it was the case of the accused that at best, Umang Digitally signed by Umang Joshi Joshi Date: 2023.05.15 13:52:26 +05'30' CC NI Act No. 4818/2021 Page 24 of 29 only a sum of Rs. 1,00,000/- was due to be paid by him to the complainant, then the accused had to first admit the factum of any debt being due by him to the complainant. However, during the entire trial, the accused has not admitted any debt or any sum of money being due by him to the complainant and rather during the entire trial, his case was that no sum of money was due to be paid by him to the complainant. Furthermore, it is nowhere mentioned in the complaint that any sum of money was repaid by the accused to the complainant. It is pertinent to mention that CW-1 in his testimony deposed that he had invested a sum of Rs. 4,00,000/- in the business of the accused. However, no evidence whatsoever was led by the accused during the trial to rebut the said version of the complainant. Furthermore, the accused failed to punch holes in the case of the complainant during the cross examination of the complainant and could not disprove the said version of the complainant. The burden of proof was upon the accused to show that there were no subsisting liabilities upon him qua the complainant at the time of issuance of the cheque in question but the accused did not discharge the said burden of proof. Even during the cross examination of the complainant, the accused failed to punch holes in the case of the complainant and could not discredit the version of the complainant.
43. Furthermore, the accused cannot be allowed to blow hot and cold at the same time. The accused has contended during the entire trial that no sum of money whatsoever was due to be paid by him to the complainant and has also contended during the stage of final arguments that at best, only a sum of Rs. 1,00,000/- was due to be paid by him to the complainant and both the contentions are antithetical to each other. Furthermore, since the execution of the cheque in question is not disputed by the accused in the present case, Section 139 of the NI Act which is a reverse onus clause becomes operative and Umang Digitally signed by Umang Joshi Joshi Date: 2023.05.15 13:52:36 +05'30' CC NI Act No. 4818/2021 Page 25 of 29 a presumption is raised that the cheque was issued for the discharge of a legally enforceable debt or other liability. In such a case, it was incumbent upon the accused to rebut the said presumptions by raising a probable defence or by discrediting or creating doubt on the case of the complainant. However, the accused did not lead any cogent evidence and did not even create any doubt on the case of the complainant even during cross examination of the complainant and even during defence evidence. Therefore, the argument raised by Ld. counsel for the accused at the final arguments stage that the amount mentioned on the cheque in question does not represent a legally recoverable debt is devoid of any merits.
44.Another argument raised by Ld. counsel for the accused during the stage of final arguments was that since the alleged investment in the business of the accused was done by the father and wife of the complainant in 2015 as mentioned in the complaint and since the cheque in question is dated 15.08.2020, it cannot be said to have been issued in discharge of a legally enforceable debt as the debt became time barred. The said argument was another attempt by the accused to bring out a fallacy in the complainant's case during the final arguments stage.
45.It is pertinent to mention that no such suggestion as to the debt being time barred was even put by the accused to the complainant during his cross examination. Furthermore, neither any evidence to show that the debt became time barred was lead by the accused during the entire trial and nor any defence to that effect was ever raised by the accused during the entire trial. The defence as to the debt being time barred had to be proved by the accused during the trial and not at the stage of final arguments. The question as to whether the cheque Umang Digitally signed by Umang Joshi Joshi Date: 2023.05.15 13:52:49 +05'30' CC NI Act No. 4818/2021 Page 26 of 29 in question had been issued in discharge of a time barred debt is a matter of evidence and trial. In other words, if the cheque was indeed issued by the accused in discharge of a time barred debt, the onus was on the accused to prove the same by leading clear and cogent evidence during the trial. However, during the entire trial, no evidence to show that the debt became time barred was lead by the accused and nor any defence to that effect was ever raised by the accused. Furthermore, during the entire trial, the accused has denied any liability towards the complainant and the accused has not even admitted the factum of any debt or any sum of money being due by him to the complainant. Therefore, the argument that the cheque in question was issued in discharge of a time barred debt is untenable and is bereft of any merits for the reasons as enunciated and explained above.
46. Furthermore, as per the Limitation Act, the limitation period for recovering a debt is 3 years from the date of advancing the loan. Ld. counsel for the accused has referred to the alleged investment in the business of the accused by the father and wife of the complainant in 2015 as mentioned in the complaint to contend that since the cheque in question was issued in 2020, the said debt became time barred and the cheque in question cannot be said to have been issued in discharge of a legally enforceable debt. However, as per the averments in the complaint and the evidence by way of affidavit, it is specifically mentioned that during the period of 11.01.2017- 07.10.2017, a sum of Rs. 4,00,000/- was paid by the complainant and his wife to the accused, out of which, a sum of Rs. 1,35,000/- was transferred in the account of Mohit Chaudhary i.e. the brother of the accused and a sum of Rs.2,65,000/- was advanced to the accused in cash. Therefore, in the absence of any evidence to the contrary, the limitation period of 3 years for recovering the said sum of Umang Digitally signed by Umang Joshi Joshi Date: 2023.05.15 13:52:59 +05'30' CC NI Act No. 4818/2021 Page 27 of 29 money is to be computed from 07.10.2017 (which is the last date on which the said sum of money was advanced by the complainant to the accused as mentioned in the complaint) and not from the year 2015 (which is the period during which a sum of Rs. 15,00,000/- was paid by the father and wife of the complainant to the accused as mentioned in the complaint) and accordingly the said period expired on 07.10.2020. The cheque in question bears the date of 15.08.2020 and the same is within the period of 3 years as computed from 07.10.2020. Even otherwise, no evidence to show that the debt became time barred was brought on record by the accused and nor any defence to that effect was lead by the accused during the entire trial. Therefore, in view of the aforesaid, the contention of Ld. counsel for the accused that the cheque in question was issued in discharge of a time barred debt is untenable and is bereft of any merits.
K. Decision:
47.In the considered opinion of this court, the accused has not been able to raise a probable defence even on the scale of preponderance of probabilities. The accused has failed to probabalise his defence even on the scale of preponderance of probabilities and has miserably failed to rebut the mandatory presumptions of law envisaged under Section 118 and 139 of the NI Act. All the facts, circumstances and the evidences on record when considered and analysed together render the defence of the accused unworthy of credence and also cast a grave suspicion and doubt on the defence put forth by the accused.
Furthermore, nothing substantial has been brought on record by the accused during the entire trial to falsify and discredit the case of the complainant. The Umang Digitally signed by Umang Joshi Joshi Date: 2023.05.15 13:53:10 +05'30' CC NI Act No. 4818/2021 Page 28 of 29 entire defence of the accused is unworthy of credence for various reasons, as already discussed.
48. In view of the aforesaid discussion and upon a careful examination of the complaint, evidence by way of affidavit and upon appreciation and appraisal of the evidences on record, it is concluded that the accused has failed to raise a probable defence and has thereby failed to rebut the mandatory presumptions of law envisaged under Section 118 and 139 of the NI Act arising in favour of the complainant. The defence of the accused has not been substantiated by any cogent evidence and the accused has failed to raise a probable defence even on the scale of preponderance of probabilities.
49.Accordingly, the accused Amit Chaudhary is hereby convicted for the offence punishable under section 138 of the NI Act.
Announced in the Open Court on this 15th day of May 2023. This Judgment consists of 29 signed pages.
Umang Digitally signed by
Umang Joshi
Joshi Date: 2023.05.15
13:53:33 +05'30'
(UMANG JOSHI)
MM (NI Act) DIGITAL COURT-05,
South West, Dwarka Courts, New Delhi
15.05.2023
CC NI Act No. 4818/2021 Page 29 of 29