Delhi District Court
Cc Ni Act No. 1306/2022 Mr. Vasim Ahmed vs . Javed Khan Page No. 1 Of 22 Wal 14:11:25 ... on 24 August, 2023
IN THE COURT OF MS. EBBANI AGGARWAL
LD. MM (NI ACT), DIGITAL COURT-09, SOUTH-WEST,
DWARKA COURT, NEW DELHI
DLSW020019242022
MR. VASIM AHMED
S/o Late Sh. Kalil Ahmed
R/o G-1/270, Dal Mill Road
Near Peer Baba, Uttam Nagar
New Delhi - 110059 ......... Complainant
VERSUS
MR. JAVED KHAN
S/o Late Sh. Shameen Ahmed
R/o RZ-74, Third Floor, Khasra No. 6/17, Matiala
Khushi Ram Park, Uttam Nagar
New Delhi - 110059 ........... Accused
Complainant Case no. 1306/2022
CNR No. DLSW020019242022
Title Mr. Vasim Ahmed v. Mr.
Javed Khan
Name of Complainant Mr. Vasim Ahmed
Name of Accused Mr. Javed Khan
Date of Institution of 28.12.2021
Complaint
Date of Final Arguments 16.08.2023
Date of Pronouncement of 24.08.2023
Judgment
Offence Involved Section 138 NI Act
Plea of the Accused Pleaded not guilty
Final order Acquitted
EBBANI Digitally
by EBBANI
signed
AGGAR Date:
AGGARWAL
2023.08.24
CC NI ACT No. 1306/2022 Mr. Vasim Ahmed vs. Javed Khan Page No. 1 of 22 WAL 14:11:25 +05'30'
JUDGMENT
1. Present complaint has been filed by complainant alleging an offence under Section 138 of the Negotiable Instruments Act (hereinafter referred to as the "NI Act").
2. Facts, in brief, as alleged in the complaint are that in September 2019, accused had approached complainant for a friendly loan of Rs. 5,00,000/- as he was in dire need of funds. The complainant advanced a friendly loan of Rs. 5,00,000/- to accused which accused had promised to return back by July, 2021. The accused did not return the loan amount to complainant by July, 2021 and after several requests to repay the loan amount, accused issued cheque bearing no. 004683 dated 11.08.2021 for a sum of Rs. 5,00,000/- (Ex. CW-1/2) (hereinafter referred to as the "cheque-in-question") which got dishonoured twice with remarks "Funds Insufficient" vide return memo dated 13.08.2021 (Ex. CW-1/3) and return memo dated 15.09.2021 (Ex. CW-1/4). The complainant then sent a legal demand notice dated 12.11.2021 (Ex. CW-1/5) to accused calling upon him to make the payment of cheque amount within the statutory period of 15 days. However, accused did not make the payment of amount in question and hence, present complaint alleging an offence under Section 138 of the NI Act was instituted by complainant.
APPEARANCE OF ACCUSED AND FRAMING OF NOTICE
3. This court took cognizance of offence under Section 138 of the NI Act and accused was summoned vide order dated EBBANI Digitally by EBBANI signed CC NI ACT No. 1306/2022 Mr. Vasim Ahmed vs. Javed Khan Page No. 2 of 22 AGGAR Date:
AGGARWAL 2023.08.24 WAL 14:11:51 +05'30' 05.07.2022. Accused entered appearance before this Court on 10.10.2022 and thereafter, Notice as per mandate of Section 251 of Code of Criminal Procedure, 1973 (hereinafter referred to as the "Cr.P.C.") was framed against the accused wherein accused pleaded not guilty and claimed trial. In his plea of defence, accused has stated that in year 2018, he had taken a loan of Rs. 1,00,000/- from complainant and at that time, he had handed over four blank signed cheques as security. Accused further stated that he has already paid back a sum of Rs. 1,30,000/- which is inclusive of interest amount to complainant and that complainant returned two of his blank signed security cheques, however, complainant informed him that the other two blank signed cheques have been misplaced. Accused further stated that present cheque-in-question is one of the blank signed security cheques which he had handed over to complainant at time of taking of loan. Accused further stated that he has no legal liability towards complainant, his blank signed cheque is being misused and that he can also produce the loan agreement which was entered into between complainant and himself. Accused further admitted his signatures on the cheque-in-question and also stated that he knows complainant since 2017 and that he did not receive legal demand notice from complainant.
COMPLAINANT'S EVIDENCE
4. Complainant examined himself as CW-1 who tendered his affidavit of evidence. Admission-Denial of documents in terms of Section 294 of Cr.P.C. was conducted wherein the EBBANI Digitally signed by EBBANI CC NI ACT No. 1306/2022 Mr. Vasim Ahmed vs. Javed Khan Page No. 3 of 22 AGGAR AGGARWAL Date: 2023.08.24 WAL 14:12:04 +05'30' accused has not disputed the genuineness of the cheque-in- question (Ex. CW-1/2), return memos (Ex. CW-1/3 and Ex. CW-1/4) and postal receipt dated 12.11.2021 along with tracking report [Ex. CW-1/6 (Colly)]. Thereafter, Accused orally moved an application seeking permission to cross examine the complainant, which was allowed, and the trial of the present complaint was converted to a summons triable case.
5. Complainant, CW-1, was then cross-examined wherein he deposed that he knows accused since last ten years as accused is a friend of his father. Complainant further deposed that he does not maintain a ledger account of loans disbursed by him. Complainant further deposed that his monthly income ranged from Rs. 50,000/- to Rs. 1,00,000/- and that his monthly expenditure is around Rs. 40,000/- per month. Complainant further deposed that he had disbursed a loan of Rs. 5,00,000/- to accused as he had earned Rs. 8,00,000/- from lease of his property and that he has placed on record the lease deed which is Ex. CW-1/1. Complainant further deposed that he had disbursed the loan to accused at his house and his wife was also there, however, there was no witness who was present at the time of disbursal of loan to accused. Complainant further deposed that he had disbursed entire amount of Rs. 5,00,000/- to accused at one go in cash somewhere in September, 2019 and that there is no agreement or receipt which was entered into between accused and himself qua disbursal of present loan in question. Complainant further deposed that he has not shown sum of Rs. 8,00,000/- which he earned through lease Digitally signed EBBANI byAGGARWAL EBBANI CC NI ACT No. 1306/2022 Mr. Vasim Ahmed vs. Javed Khan Page No. 4 of 22 AGGAR 2023.08.24 Date:
WAL 14:12:18 +05'30' agreement in his ITR and that he has also not shown disbursal of present loan in his ITR. Complainant further deposed that he had earlier disbursed loan of around Rs. 1,50,000/- to accused which he had repaid and that he did not remember if any agreement was entered into for this earlier loan or not. Thereafter, complainant was confronted with a receipt cum declaration along entered into between accused and himself which is Ex. CW-1/X/D-1 to which complainant deposed that he is not aware about the agreement. Complainant was also confronted with two cheques bearing numbers 004684 and 004685 which is Ex. CW-1/X/D-2 (Colly) to which the complainant deposed that he does not remember anything about the cheques.
Complainant, then, closed CE.
STATEMENT OF ACCUSED UNDER SECTION 313 R/W 281 Cr.P.C.
6. Thereafter, all incriminating piece of evidence were put to accused and his statement in terms of Section 313 r/w Section 281 of Cr.P.C. was recorded wherein accused stated that he had taken a loan of Rs. 1,00,000/- from complainant and at that time, he had handed over his three blank signed cheques, one blank signed cheque of his son, some blank signed papers and his property papers as security. Accused further stated that a loan agreement was also entered into and that complainant had not provided a copy of the same to him. Accused further stated that in month of February 2019, he has paid back Rs. 1,30,000/- to complainant which is inclusive of interest @ 7% per month and that Digitally signed EBBANI byAGGARWAL EBBANI CC NI ACT No. 1306/2022 Mr. Vasim Ahmed vs. Javed Khan Page No. 5 of 22 AGGAR 2023.08.24 Date:
WAL 14:12:31 +05'30' complainant did not return back two of his blank signed cheques and one blank signed cheque of his son. Accused further stated his and his sons blank signed cheques are being misused and that he has no legal liability towards complainant.
In the said statement itself, accused opted to lead evidence in his defence and the matter was listed for DE.
DEFENCE EVIDENCE
7. In support of his defence, accused has examined himself as a witness and he entered the witness box himself after his application under Section 315 Cr.P.C. was allowed. Accused was examined as DW-1 wherein he deposed on similar lines as his statement under Section 313 r/w Section 281 of Cr.P.C. Accused deposed that in year 2018, he had taken a loan of Rs. 1,00,000/- from complainant which complainant had agreed to disburse on some conditions and at that time, he had given his three blank signed cheques, one blank signed cheque of his son, property papers of his house as security and that complainant had also taken his signatures on some blank papers. Accused further deposed that complainant had subsequently got a loan agreement executed which was signed by him and that within a period of two to three months of disbursal of loan, he has already paid back Rs. 1,30,000/- to complainant. Accused further deposed that complainant returned two of his blank signed cheques, however, complainant did not return one of his blank signed cheques which is the present cheque-in- question, one blank signed cheque of his son and his EBBANI Digitally signed by EBBANI CC NI ACT No. 1306/2022 Mr. Vasim Ahmed vs. Javed Khan Page No. 6 of 22 AGGAR AGGARWAL Date: 2023.08.24 WAL 14:12:47 +05'30' property papers. Accused further deposed that when he did not agree to sell his house to complainant, present case was filed against him.
8. Thereafter, Accused (DW-1) was cross examined wherein he deposed that his correct address is RZ-74, Third Floor, Khasra No. 6/17, Matiala, Khushi Ram Park, Uttam Nagar and that the address mentioned on the legal demand notice is his correct address. Accused further deposed that his son had received the legal demand notice on his correct address and that he got to know about dishonour of cheque-in- question only when legal demand notice was received by his son. Accused further deposed that he had paid Rs. 1,30,000/- to complainant by way of cash at house of complainant and that he knew complainant from before 2018 through father of complainant. Accused further deposed that he has four sisters and that one of sisters Shahana got married in 2018 and that her marriage expenses were around Rs. 3,00,000/- to Rs. 4,00,000/-. Accused further deposed that loan agreement was executed at shop where complainant had taken him which is located at main road of Hastsal Road and that complainant had refused to give a copy of the same to him. Accused further deposed that the loan agreement was not signed by complainant. Accused further deposed that he had taken financial assistance from complainant when he was in need of money of Rs. 20,000/- each earlier on multiple occasions which he has duly returned to complainant.
Thereafter, DE was closed, and matter was listed for final arguments.
EBBANI Digitally by EBBANI signed AGGAR AGGARWAL Date:
CC NI ACT No. 1306/2022 Mr. Vasim Ahmed vs. Javed Khan Page No. 7 of 22 2023.08.24 WAL 14:13:08 +05'30' FINAL ARGUMENTS
9. Ld. Counsel for complainant has reiterated the averments made in the complaint in his arguments and has further argued that complainant had advanced a friendly loan of Rs. 5,00,000/- to accused in September, 2019 which accused has agreed to repay by July, 2021 and in discharge of his legally enforceable debt, accused has issued the present cheque-in-question. Ld. Counsel for complainant has further argued that complainant had the financial capacity to disburse the friendly loan as he had earned around Rs. 8,00,000/- from lease of his property and that he has also placed on record the said lease deed which is Ex. CW-1/1. Ld. Counsel for complainant has further argued that presumption regarding service of legal demand notice exists in favour of complainant and that all statutory requirements for commission of an offence under section 138 of the NI Act have been met with in the present case. Ld. Counsel for complainant has further argued that accused has not been able to substantiate his defence and that the loan agreement placed on record by accused (Ex. CW-1/X/-D-1) has not been signed by complainant and that it does not bear the number of the cheque-in-question. Ld. Counsel for complainant has further argued that non-disclosure of loan in the Income Tax Return would not make the loan advanced by complainant an illegal debt and he has relied upon judgement of Lekh Raj Sharma Vs Yash Pal Gupta, MANU/DE/1886/2015 in support of the same. Ld. Counsel for complainant has further argued that there are various contradictions in the stand taken by accused in his defence EBBANI Digitally signed by CC NI ACT No. 1306/2022 Mr. Vasim Ahmed vs. Javed Khan Page No. 8 of 22 AGGAR EBBANI AGGARWAL Date: 2023.08.24 14:13:29 +05'30' WAL and therefore, he has not been able to rebut presumption under Section 139 of the NI Act raised in favour of complainant and that complainant has been able to prove his case beyond reasonable doubt and that in view of the facts and circumstances of the present complaint, accused be convicted of offence under Section 138 of the NI Act.
10.Per Contra, Ld. Counsel for accused has argued that accused had taken a loan of Rs. 1,00,000/- from complainant which he has already repaid along with interest amount. Ld. Counsel for accused has further argued that accused has placed on record the loan agreement which was executed in 2018 which is Ex. CW-1/X/-D-1 to substantiate his defence which mentions that he had given two cheques as security bearing number 004684 and 004865 and the cheque-in- question in the present case bears number 004683 which has been alleged to have been issued by accused in year 2021. Ld. Counsel for accused has further argued that this fact casts a doubt over case of complainant as cheque bearing serial number 004683 could not have been issued in 2021 when cheque bearing serial numbers 004684 and 004865 were already issued by accused in 2018. Ld. Counsel for accused has further argued that non-disclosure of loan in the Income Tax Return would make the loan an unrecoverable debt and he has relied upon judgment of Hon'ble High Court of Punjab and Haryana passed in Jai Bhagwan vs Avtar Singh Saini (CRM-A- 457-MA of 2013) as well as judgment of Hon'ble Supreme Court of India passed in case of Dalmia Cement (Bharat) Ltd vs M/s Galaxy Trades & Agencies Ltd., [2001] S.C.R. 461. Ld. Counsel for accused EBBANI Digitally signed by EBBANI CC NI ACT No. 1306/2022 Mr. Vasim Ahmed vs. Javed Khan Page No. 9 of 22 AGGAR AGGARWAL Date: 2023.08.24 WAL 14:13:45 +05'30' has further argued accused has been able to rebut the presumption drawn in favour of complainant under Section 139 of the NI Act as complainant has neither disclosed the money he earned through lease agreement nor the present loan in his Income Tax Return and he has relied upon judgment passed by Hon'ble High Court of Telangana in case of R. Narender vs Yakamma Keloth Or Kalyan (Criminal Appeal No. 2852 of 2018) in support of his contention. Ld. Counsel for accused has further argued that accused has been able to rebut the presumption on basis of preponderance of probabilities and therefore, accused be acquitted for offence under Section 138 of the NI Act.
LEGAL POSITION
11. Before proceeding to decide the case on merits, it is imperative that position of law with respect to an offence under Section 138 of the NI Act is discussed.
12. Section 138 of the NI Act reads as under:
"138. Dishonour of cheque for insufficiency, etc., of funds in the account. -- 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 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, Digitally signed EBBANI byAGGARWAL EBBANI CC NI ACT No. 1306/2022 Mr. Vasim Ahmed vs. Javed Khan Page No. 10 of 22 AGGAR 2023.08.24 Date:
WAL 14:14:12 +05'30' or with both: Provided that nothing contained in this section shall apply unless--
(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(b) the payee or the holder in due course of the cheque, as the case may be, 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 thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and;
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
Explanation. -- For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability."
13. The essential ingredients for commission for an offence under Section 138 of the NI Act has been laid down by Hon'ble Supreme Court of India in case of Kusum Ingots & Alloys Ltd and Ors. v. K Pennar Peterson Securities Ltd and Ors., [2000] 1 S.C.R. 2000 (hereinafter referred to as Kusum Ingots Case) wherein it has been held as under:
"10. On a reading of the provisions of Section 138 of the NI Act it is clear 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 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 the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount Digitally signed EBBANI byAGGARWAL EBBANI CC NI ACT No. 1306/2022 Mr. Vasim Ahmed vs. Javed Khan Page No. 11 of 22 AGGAR Date:
2023.08.24 WAL 14:14:25 +05'30' 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.
11. If the aforementioned ingredients are satisfied then the person who has drawn the cheque shall be deemed to have committed an offence. In the explanation to the section clarification is made that the phrase "debt or other liability" means a legally enforceable debt or other liability."
Therefore, in order to establish commission of an offence under Section 138 of the NI Act, complainant has to satisfy those above-mentioned ingredients.
14. Section 139 of the NI Act is a reverse onus clause which was added to the statute book in order to increase the credibility of cheque/negotiable instruments as a mode of payment. Section 139 reads as under:
"139. 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."
15.Nature and scope of presumption under Section 139 of the NI Act has been dealt in a catena of judgments. In case Rangappa v. Sri Mohan, [2010] 6 S.C.R. 507, Hon'ble Supreme Court has further held as under:
"27. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of EBBANI Digitally signed by EBBANI CC NI ACT No. 1306/2022 Mr. Vasim Ahmed vs. Javed Khan Page No. 12 of 22 AGGAR AGGARWAL Date: 2023.08.24 WAL 14:14:41 +05'30' improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. ........
28. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, 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."
16. In Basalingappa vs Mudibasappa, [2019] 6 S.C.R. 555 (hereinafter referred to as Basalingappa Case), certain principles regarding rebuttal of presumption under Section 139 of the NI Act has been laid down which are as under:
25. We having noticed the ratio laid down by this Court in the above cases on Sections 118(a) and 139, we now summarise the principles enumerated by this Court in following manner:
25.1. 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.
25.2. 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. 25.3. To rebut the presumption, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of Digitally signed preponderance of probabilities can be drawn EBBANI byAGGARWAL EBBANI AGGAR Date:
2023.08.24 CC NI ACT No. 1306/2022 Mr. Vasim Ahmed vs. Javed Khan Page No. 13 of 22 WAL 14:14:55 +05'30' not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely. 25.4.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. 25.5. It is not necessary for the accused to come in the witness box to support his defence."
(Empahsis supplied)
17. From above-mentioned discussion, it becomes clear that once the execution of cheque-in-question is admitted then it is mandatory to raise a presumption under Section 139 of the NI Act in favour of complainant and the presumption includes the presumption that the cheque-in-question was issued in discharge of a legally enforceable debt within its ambit. However, presumption under Section 139 of the NI Act is a rebuttable presumption which casts an onus on accused to rebut the same on basis of preponderance of probabilities. It is not necessary that accused enters the witness box himself for this purpose, however, making of bare averments is not enough and some proof has to be adduced by accused either from the material which is already available on record or by leading cogent evidence in support of his defence.
ANALYSIS ON MERITS
18. Position of law being as above, it becomes imperative to examine as to whether complainant has been able to establish the basic ingredients for commission of offence under Section 138 of the NI Act and if the complainant succeeds in same, whether accused has been able to rebut EBBAN Digitally signed by I EBBANI AGGARWAL CC NI ACT No. 1306/2022 Mr. Vasim Ahmed vs. Javed Khan Page No. 14 of 22 AGGA Date:
2023.08.24 RWAL 14:15:07 +05'30' the presumption drawn under Section 139 of the NI Act or not.
19. In the case at hand, accused has admitted his signatures on the cheque-in-question, therefore, a presumption exists in favour of complainant under Section 139 of the NI Act which includes the presumption that cheque-in-question was issued in discharge of a legally enforceable debt. [Reliance has been placed on Basalingappa Case (supra)]
20. With respect to essential ingredients for commission of offence under Section 138 of the NI Act, it can be seen from record that the cheque in question Ex. CW-1/2 was presented within three months from the date of issuance viz 11.08.2021 and the same was dishonoured twice with remarks "Funds Insufficient" vide return memo dated 13.08.2021 Ex. CW-1/3 and return memo dated 15.09.2021 Ex. CW-1/4. Legal Demand Notice dated 12.11.2021 Ex. CW-1/5 was sent to the accused within the prescribed period in terms of order of Hon'ble Supreme Court of India passed in case of Re: Cognizance for extension of limitation [Miscellaneous Application No. 665/2021 in Suo-Motu Writ Petition (Civil) No. 3/2020] and postal receipts along with tracking report and returned postal envelope have also been placed on record which are Ex. CW-1/6 (Colly) and Ex. CW-1/7 respectively. Thereafter, the present complaint was filed within the prescribed period of limitation, i.e., on 28.12.2021 in terms of order of Hon'ble Supreme Court of India, dt. 23.09.2021 passed in Re: Cognizance for extension of limitation [Miscellaneous Application No. 665/2021 in Suo-Motu Writ Petition EBBANI Digitally signed by EBBANI CC NI ACT No. 1306/2022 Mr. Vasim Ahmed vs. Javed Khan Page No. 15 of 22 AGGAR AGGARWAL Date: 2023.08.24 WAL 14:15:19 +05'30' (Civil) No. 3/2020]. Further, the accused has admitted his signatures on cheque-in-question in the Notice framed against him under Section 251 Cr.P.C. and therefore, it can be inferred that cheque-in-question was issued from an account maintained by the accused himself.
21. In the notice framed against the accused in terms of Section 251 of Cr.P.C., accused has stated that he did not receive the legal demand notice. However, accused has appeared before this court after summons were sent on the same address on which the legal demand notice was sent and further, in his cross-examination accused has admitted that address mentioned on the legal demand notice is his correct address. Therefore, accused cannot claim benefit of defence of non- receipt of legal demand notice. (Reliance has been placed on C.C Alavi Haji v. Palapetty Muhammed, [2007] S.C.R.
326)
22. In view of the foregoing discussion, complainant has been able to establish basic ingredients for commission of offence under Section 138 of the NI Act. The onus in now on accused to rebut this presumption drawn in favour of complainant on basis of preponderance of probabilities.
23. In order to rebut the presumption, accused has raised following issues in his defence:
23.1 Present loan is a non-recoverable debt: Ld. Counsel for accused has argued that non-disclosure of loan in the Income Tax Return makes it a non-recoverable loan and in support of his argument he has relied upon judgment of Hon'ble High Court of Punjab and Haryana passed in Jai EBBANI Digitally signed by EBBANI CC NI ACT No. 1306/2022 Mr. Vasim Ahmed vs. Javed Khan Page No. 16 of 22 AGGAR AGGARWAL Date: 2023.08.24 WAL 14:15:31 +05'30' Bhagwan vs. Avtar Singh Saini (CRM-A- 457-MA of 2013) (hereinafter referred to as Jai Bhagwan Case) as well as judgment of Hon'ble Supreme Court of India passed in case of Dalmia Cement (Bharat) Ltd. vs. M/s Galaxy Trades & Agencies Ltd., [2001] S.C.R. 461 (hereinafter referred to as Dalmia Cement (Bharat) Ltd. Case).
This Court has given a careful thought and consideration to the argument advanced by Ld. Counsel for accused and is of the opinion that the ratio decidendi of both the above- mentioned judgments cannot be interpreted in the manner as argued by Ld. Counsel for accused. The judgement of Hon'ble Supreme Dalmia Cement (Bharat) Ltd. (Supra) is on the point of the objective of the NI Act and in Jai Bhagwan (Supra), Hon'ble High Court of Punjab and Haryana has dismissed an appeal filed against acquittal and has not laid down as a ratio decidendi that undisclosed loans were not recoverable.
On the other hand, Hon'ble High Court of Delhi in case of Lekh Raj Sharma Vs Yash Pal Gupta, MANU/DE/1886/2015 has held that non-disclosure of loan in Income Tax Return will not make it unrecoverable. In view of the same, this Court is of the opinion that mere non- disclosure of loan in Income Tax Return will not make it an unrecoverable loan.
23.2 Non-disclosure of loan in Income Tax Return is sufficient to rebut presumption under Section 139 of the NI Act: Ld. Counsel for accused has relied upon judgement passed by Hon'ble High Court of Telangana in R. Narender vs Yakamma Keloth Or Kalyan, 2021 SCC OnLine TS 533 EBBANI Digitally by EBBANI signed CC NI ACT No. 1306/2022 Mr. Vasim Ahmed vs. Javed Khan Page No. 17 of 22 AGGAR AGGARWAL Date: 2023.08.24 WAL 14:15:43 +05'30' (hereinafter referred to as R. Narender case) to argue that in the present case complainant has not disclosed the present loan in his Income Tax Return and this fact is sufficient to rebut the presumption drawn in favour of complainant under Section 139 of the NI Act.
Perusal of R. Narender (Supra) shows that non-disclosure of loan in the Income Tax Return will be not be sufficient to rebut the presumption under Section 139 of the NI Act in every case. Non-disclosure of loan in Income Tax Return will be sufficient to rebut the presumption only if the loan amount is higher and same has been disbursed for a considerable period of time. In the present case, complainant has admitted that he has not disclosed the disbursal of present loan in his ITR, present loan is for a considerable sum of Rs. 5,00,000/- and same was disbursed in year 2018 which the accused had agreed to repay by July, 2019 meaning thereby that loan was disbursed for a considerable period of time. The case of accused is therefore covered by the position of law laid down in R. Narender (Supra) and therefore, the fact that complainant has neither disclosed the loan in question nor the income earned through the lease in his Income Tax Return goes against the case of complainant.
23.3 Cheque-in-question given as a blank signed security cheque at the time of taking of loan of Rs. 1,00,000/-:
Accused has taken a defence that he had taken a loan of Rs. 1,00,000/- from complainant in 2018 and at that time, he had handed over four blank signed cheques as security out of which three cheques belonged to him and one cheque EBBANI Digitally signed by CC NI ACT No. 1306/2022 Mr. Vasim Ahmed vs. Javed Khan Page No. 18 of 22 AGGAR EBBANI AGGARWAL Date: 2023.08.24 14:15:57 +05'30' WAL belonged to his son along with property papers of his house and blank signed papers. Accused has further taken a defence that he has already repaid around Rs. 1,30,000/- to complainant which is inclusive of interest and that complainant returned back two of his blank signed cheques but did not return one of his blank signed cheque which is the present cheque-in-question, blank signed cheque of his son and his property papers.
In order to substantiate his defence, accused has placed on record a loan agreement dated 24.09.2018 which is Ex. CW-1/X-D-1. Perusal of same shows that it has been mentioned that in 2018, accused had handed over two cheques bearing numbers 004684 and 004685 as security to complainant, however, as has been alleged in the complaint, present cheque-in-question bearing number 004683 was issued by accused in 2021. The fact that cheques with serial number 004683 was issued after issuance of cheques with serial numbers 004684 and 004685, that too after a substantial gap of almost three years, casts a reasonable doubt over the case of complainant. Further, perusal of the loan agreement Ex. CW-1/X/D-1 shows that same does not bear the signature of complainant, however, complainant in his cross-examination has admitted that he had earlier disbursed loan of Rs. 1,50,000/- to accused which he had repaid. Therefore, the possibility that cheque-in-question was handed over by accused at the time of the earlier loan itself cannot be ruled out in entirety and accused has been able to establish this leg of defence on basis of preponderance of probablities.
EBBANI Digitally signed by EBBANI AGGAR AGGARWAL Date: 2023.08.24 CC NI ACT No. 1306/2022 Mr. Vasim Ahmed vs. Javed Khan Page No. 19 of 22 WAL 14:16:17 +05'30' 23.4 Financial capacity of complainant: In the cross-
examination of CW-1, Ld. Counsel for accused has questioned the financial capacity of complainant to disburse the present loan. Complainant (CW-1) has deposed that his monthly income must be around Rs. 50,000/- to Rs. 1,00,000/- and that his monthly expenditure must be around Rs. 40,000/-. Complainant further deposed that he had earned Rs. 8,00,000/- from lease of his property to Sh. Prashant Walia out of which he had disbursed loan of Rs. 5,00,000/- to accused and in proof of the same, complainant has placed on record the lease deed which is Ex. CW-1/1.
However, further in the cross-examination, Complainant has deposed that he has not shown his income through the lease agreement in the Income Tax Return and has not even examined Sh. Prashant Walia as a witness. Non-disclosure of income through lease coupled with non-examination of Sh. Prashant Walia as a witness once the financial capacity of complainant to disburse loan to accused was challenged further casts a doubt over the case of complainant.
24.On the other hand, accused has been consistent in his defence and has even substantiated his central leg of defence through the loan agreement Ex. CW-1/X/D-1 and direct admission of CW-1 regarding repayment of loan of Rs. 1,50,000/-. In light of the consistent testimony of the accused coupled with the cogent evidence lead by the accused, admission of complainant regarding repayment of loan of Rs. 1,50,000/-, this Court is of the opinion that accused has been able to rebut the presumption drawn in favour of complainant under Section 139 of the NI Act on Digitally signed EBBANI byAGGARWAL EBBANI CC NI ACT No. 1306/2022 Mr. Vasim Ahmed vs. Javed Khan Page No. 20 of 22 AGGAR Date:
2023.08.24 WAL 14:16:34 +05'30' basis of preponderance of probabilities and the possibility that present cheque-in-question was issued by accused as a blank signed cheque as at the time of taking of a loan of Rs. 1,00,000/- cannot be ruled out in entirety.
25. Once the accused has been able to establish his defence on basis of preponderance of probability, benefit of presumption in terms of Section 139 of the NI Act cannot be extended to complainant. In the absence of benefit of such presumption, it becomes imperative to examine as to whether complainant has been able to establish its case, including existence of a legally enforceable debt, beyond reasonable doubt independently on its own leg or not.
26. In order to establish existence of a legally enforceable debt, complainant has not placed on record any document. Further, in the cross-examination, CW-1 has deposed that neither there was any witness in whose presence the present loan was disbursed nor there was any agreement or receipt which was executed qua disbursal of present loan. In view of the same, this Court is of the opinion that the complainant has not been able to establish existence of a legally enforceable debt independently on its own legs without the benefit of presumption under Section 139 of the NI Act.
CONCLUSION
27.In view of the foregoing facts, arguments advanced by the parties, marshalling of evidence as well as established legal position, this court is of the considered opinion that accused has been able to rebut the presumption under Section 139 of the NI Act and has been able to establish his defence on Digitally signed EBBANI byAGGARWAL EBBANI AGGAR Date:
2023.08.24 CC NI ACT No. 1306/2022 Mr. Vasim Ahmed vs. Javed Khan Page No. 21 of 22 WAL 14:16:48 +05'30' basis of preponderance of probabilities and complainant has not been able to establish existence of legally enforceable debt. Therefore, this court is of the considered opinion that the accused Javed Khan s/o Late Sh. Khalil Ahmed is not guilty of offence under Section 138 of Negotiable Instruments Act, 1881 and accordingly, is hereby acquitted for offence under Section 138 of Negotiable Instruments Act, 1881.Digitally signed by EBBANI AGGARWAL
EBBANI Announced in open court on 24.08.2023. Date:
AGGARWAL 2023.08.24 14:17:01 +05'30' (EBBANI AGGARWAL) MM (NI ACT), DIGITAL COURT-09 SOUTH-WEST DISTRICT, DWARKA COURT NEW DELHI 24.08.2023 CC NI ACT No. 1306/2022 Mr. Vasim Ahmed vs. Javed Khan Page No. 22 of 22