Delhi District Court
15. In The Case Of Kusum Ingots And Alloys ... vs . Pennar Peterson Securities on 28 February, 2023
IN THE COURT OF SH. UMANG JOSHI
MM (NI ACT) DIGITAL COURT-05,
SOUTH WEST, DWARKA COURTS, NEW DELHI
Criminal Complaint No.: 15476/2021
Sachin Homesh Tyagi ........Complainant
Versus
Rashmi Tyagi ............. Accused
1. SI. No. of the case : CC NI Act No.15476/2021
2. Date of institution of the case : 30.07.2021
3. Name and address of the complainant : Sachin Homesh Tyagi,
R/o VPO Rewla Khanpur,
Najafgarh, New Delhi-110043
4. Name and address of the accused : Rashmi Tyagi,
R/o B-101, Vikas Nagar, Vikas
Vihar East, West Delhi,
Delhi-110059
5. Offence complained of: Section 138, Negotiable Instruments Act
6. Plea of the accused: Accused pleaded not guilty
7. Final order: Acquitted
8. Date of such order: 28.02.2023
Umang Digitally signed by
Umang Joshi
Joshi Date: 2023.02.28
13:15:41 +05'30'
CC NI Act No. 15476/2021 Page 1 of 25
JUDGMENT
A. Factual Matrix of the case:
1. Briefly stated, the factual matrix of the case as per the complaint is that the accused and her husband approached the complainant in December, 2020 and requested him to advance a sum of Rs. 4,00,000/- as they were in dire of money. The complainant agreed to advance them a sum of Rs. 4,00,000/- as friendly loan which was promised to be returned within 3-4 months. Thereafter, the accused in partial discharge of her legal liability, issued a cheque bearing no.063900 dated 15.03.2021 amounting to Rs. 3,00,000/- drawn on Bank of India, Keshopur Village Branch, New Delhi-110018 with the assurance that the same would be encashed on presentation. Thereafter, the complainant presented the said cheque with his banker Federal Bank, Rewla Khanpur Branch, Najafgarh, New Delhi, but the same was dishonoured and returned with remarks "Funds Insufficient" vide return memo dated 05.06.2021. It is further stated that thereafter the complainant sent a legal demand notice dated 30.06.2021 vide speed post on the address of the accused. 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: 2023.02.28
13:15:49 +05'30'
CC NI Act No. 15476/2021 Page 2 of 25
B. Appearance of accused, framing of notice and proceedings incidental thereto:
2. Vide order dated 16.09.2021, 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 12.04.2022, 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 17.11.2022, 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 her signatures and she also admitted issuing the cheque in question to the complainant. In the plea of defence, the accused stated that she had taken a loan of Rs. 3,00,000/- from the complainant in January, 2020 and further stated that she had repaid the entire loan amount to the complainant by way of online transfer in the bank of the complainant. The accused further stated that she had no liability towards the complainant and claimed that she was falsely implicated in the present case.
Umang Digitally signed
by Umang Joshi
Joshi Date: 2023.02.28
13:15:55 +05'30'
CC NI Act No. 15476/2021 Page 3 of 25
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 her statement admitted that the cheque in question is from her bank account and also admitted her signatures on the cheque in question. Furthermore, the accused denied 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 01.02.2023 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 in question bearing no. 063900 dated 15.03.2021 amounting to Rs. 3,00,000/- Ex. CW-1/1.
b) Cheque return memo dated 05.06.2021 Ex. CW-1/2.
c) Legal demand notice dated 30.06.2021 with postal receipt and postal tracking report of the legal demand notice Ex. CW-1/3 (colly).
Umang Digitally signed
by Umang Joshi
Joshi Date: 2023.02.28
13:16:02 +05'30'
CC NI Act No. 15476/2021 Page 4 of 25
7. Thereafter, the complainant was duly cross examined by the counsel for accused on 08.02.2023. Furthermore, no other witnesses were examined by the complainant to prove its case. Accordingly, the complainant evidence was closed on 14.02.2023 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 her statement under Section 313 Cr.P.C read with Section 281 Cr.P.C was recorded on 15.02.2023 wherein the accused denied any liability towards the complainant. The accused further stated that she did not wish to lead defence evidence and therefore no witness was examined by the accused in her defence. Accordingly, the matter was listed for final arguments.
E. Final arguments:
9. Final arguments were heard at length from both the parties.
10. 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 her signature on the cheque in question and has also Umang Digitally signed by Umang Joshi Joshi Date: 2023.02.28 13:16:10 +05'30' CC NI Act No. 15476/2021 Page 5 of 25 admitted issuing the cheque in question to the complainant and therefore a presumption arises in favour of complainant 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 and her husband took a friendly loan Rs. 4,00,000/- from the complainant and accordingly the accused in discharge of her legal liability, issued the cheque in question to the complainant which was dishonoured on its presentation. Ld. Counsel for the complainant has further argued that the cheque in question was not issued by the accused as a security and the same was issued by the accused in discharge of her legal liability towards the complainant. Ld. Counsel for the complainant contends that the accused has not raised any probable defence and the accused has not lead any evidence to prove its case. Ld. Counsel for the complainant also submits that the testimony of the complainant in his cross examination is uncontroverted and the complainant has proved its case beyond reasonable doubt.
11. 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 is vague and it does not even mention the details and particulars of the alleged loan transaction. It is further argued by Ld. Counsel for the accused that the accused and her husband had taken a loan from the complainant only once i.e. in January, 2020 and the said loan has already been repaid to the complainant which has been admitted by CW-1 in his cross examination and therefore there was no liability of the accused towards the complainant after the payment of the said loan to the complainant in Umang Digitally signed by Umang Joshi Joshi Date: 2023.02.28 13:16:17 +05'30' CC NI Act No. 15476/2021 Page 6 of 25 January, 2020. Ld. Counsel for the accused further contends that various blank signed cheques including the cheque in question were given by the accused and her husband to the complainant as a security at the time of taking the loan from the complainant in January, 2020 and the same has been misused by the complainant. Ld. Counsel for the accused has argued that no loan of Rs.
4,00,000/- was ever taken by the accused and her husband from the complainant in December, 2020 as alleged in the complaint 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 there are various contradictions in the complainant's testimony in his cross examination and the complainant has failed to prove the alleged loan transaction. Ld. Counsel for the accused has argued that the present complaint does not mention about the earlier loan of Rs. 3,00,000/- being advanced by the complainant to the accused in January, 2020 and which was repaid to the complainant as has been admitted by CW-1 in his cross examination. Ld. Counsel for the complainant has further argued that as per the complainant i.e. CW-1, the alleged loan was advanced in presence of his friend Sukhbir but the same has not been mentioned in the complaint and furthermore, the said Sukhbir who is claimed to be the witness to the alleged loan transaction was not even examined by the complainant as a witness and therefore the complainant has failed to prove the alleged loan transaction and also failed to prove its case its case beyond reasonable doubt. 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 and has filed a false case against the accused.
Umang Digitally signed by Umang Joshi Joshi Date: 2023.02.28 13:16:24 +05'30' CC NI Act No. 15476/2021 Page 7 of 25
12. I have heard the submissions made by counsel for both the parties and have also perused the record thoroughly.
F. Legal provisions and the legal principles:
13. 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 063900 dated 15.03.2021 amounting to Rs.3,00,000/-.
14. Section 138 of the NI Act mandates that the dishonour of a cheque is an offence. 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 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."
15. 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 Umang Digitally signed by Umang Joshi Joshi Date: 2023.02.28 13:16:33 +05'30' CC NI Act No. 15476/2021 Page 8 of 25 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;"
16. 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."
Umang Digitally signed by
Umang Joshi
Joshi Date: 2023.02.28
13:16:40 +05'30'
CC NI Act No. 15476/2021 Page 9 of 25
17.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.
18. 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."
Umang Digitally signed by
Umang Joshi
Joshi Date: 2023.02.28
13:16:46 +05'30'
CC NI Act No. 15476/2021 Page 10 of 25
19.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.
G. Undisputed/ Uncontroverted facts
20.The accused in the notice put to her under Section 251 Cr.P.C has not denied that the cheque in question was issued from her account. Therefore, it is not in dispute that the original cheque i.e. Ex.CW-1/A has been drawn on an account maintained by the accused. Thus, the complainant has been able to discharge the burden of proving that the cheque in question was issued 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-1/2 is not disputed by accused. 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.
Umang Digitally signed by Umang Joshi Joshi Date: 2023.02.28 13:16:53 +05'30' CC NI Act No. 15476/2021 Page 11 of 25 H. Points for determination:
a) Whether the legal demand notice was served on the accused in the present case?
b) 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? If yes, whether the accused has been able to rebut the said presumptions by raising a probable defence?
c) Whether the complainant has established the ingredients of the offence punishable under Section 138 of the NI Act beyond reasonable doubt against the accused or not?
I. Reasons for the decision:
a) Whether the legal demand notice was served on the accused in the present case?
21. It is pertinent to note that the accused in the notice under Section 251 Cr.P.C and in the statement under Section 294 Cr.P.C has stated that she did not receive the legal demand notice from the complainant asking her to pay the amount of the dishonoured cheque in question. The legal demand notice was sent through post. The legal demand notice along with the postal receipt and the postal tracking report is Ex. CW-1/3 (colly). Perusal of the postal tracking report denotes that it was returned with remarks 'addressee cannot be located'.
Umang Digitally signed by
Umang Joshi
Joshi Date: 2023.02.28
13:17:02 +05'30'
CC NI Act No. 15476/2021 Page 12 of 25
Furthermore, it is pertinent to note that the address mentioned by the accused on bail bonds furnished by her is the same address on which the legal demand notice was sent to the accused. Furthermore, the postal receipt as to the dispatch of the legal demand notice is on record and therefore, there is a presumption of its delivery as per Section 27 of General Clauses Act. Furthermore, process was also issued against the accused on the said address pursuant to which the accused had entered appearance before this court. Therefore, the contention of the accused that she did not receive the legal demand notice is without any substance.
22.Even otherwise, it is pertinent to note that the rigour of proving the factum of the legal demand notice being served on the accused has considerably been reduced after the legal position in this regard has been settled by the apex court in C.C. Alavi Haji vs. Palapetty Muhammed (2007) 6 SCC 555. In this case, the Hon'ble apex court has held as follows:
"Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the Court along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the G.C. Act and Section 114 of the Evidence Act."
23. In the present case, the accused has not made the payment of the cheque amount in question to the complainant within 15 days of the receipt of summons of this court. Therefore, in light of the aforesaid legal position, it is not open to the accused to make vague assertions as to the non receipt of the legal demand notice when the accused has not adopted the recourse of making Umang Digitally signed by Umang Joshi Joshi Date: 2023.02.28 13:17:11 +05'30' CC NI Act No. 15476/2021 Page 13 of 25 payment of the cheque amount in question to the complainant within 15 days of the receipt of service of summons as laid down in the aforesaid case.
24.Accordingly, it is clear that the legal demand notice Ex. CW-1/3 (colly) was duly served upon the accused. The contention of the accused regarding the non receipt of the legal demand notice is accordingly rejected.
b) 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? If yes, whether the accused has been able to rebut the said presumptions by raising a probable defence?
25.The next 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.
26.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.
Umang Digitally signed by
Umang Joshi
Joshi Date: 2023.02.28
13:17:20 +05'30'
CC NI Act No. 15476/2021 Page 14 of 25
27.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:
"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."
28.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.
29.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 her signature on the cheque in question. Therefore, it is concluded that the presumption under Section 118(a) and Section 139 of the NI Act is raised in favour of complainant in the present case.
30.Since the execution of the cheque in question in favour of the complainant has been admitted by the accused, it is to be examined as to whether the accused has been able to rebut the aforesaid statutory presumptions. Therefore, the onus Umang Digitally signed by Umang Joshi Joshi Date: 2023.02.28 13:17:40 +05'30' CC NI Act No. 15476/2021 Page 15 of 25 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.
31.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. 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 reasonable doubt, the accused is expected to prove his defence on the scale of preponderance of probabilities.
32. Therefore, it is imperative to examine the defence of the accused in the present case. In the application under Section 145 (2) of the NI Act, it is stated that the accused and her husband had given various cheques to the complainant as a security and the same have been misused by the complainant. It is further stated that the husband of the accused has already paid the legally enforceable debt to the complainant and the complainant has filed a false case against the accused. Furthermore, in the plea of defence in the notice under Section 251 Cr.P.C, the accused has stated that she had taken a loan of Rs. 3,00,000/- from the complainant in January, 2020 and has further stated that she had repaid the entire loan amount to the complainant by way of online transfer in the bank of the complainant. The accused has further stated in the notice under Section 251 Cr.P.C that the complainant has filed a false case against her and also her husband in respect of the same transaction. The primary defence of the accused Umang Digitally signed by Umang Joshi Joshi Date: 2023.02.28 13:17:48 +05'30' CC NI Act No. 15476/2021 Page 16 of 25 is that the accused and her husband had taken a loan from the complainant only once i.e. in January, 2020 and the same has already been repaid to the complainant. It is also the defence of the accused that various cheques including the cheque in question were given by the accused to the complainant as a security at the time of taking the loan in January, 2020 and the same has been misused by the complainant.
33.Accordingly, it is imperative to appraise the facts and the evidences in the present case. In his cross examination, the complainant i.e. CW-1 has admitted that he had advanced a loan of Rs. 3,00,000/- to the accused in January, 2020. Furthermore, CW-1 in his cross examination has also admitted that the husband of the accused has paid back the entire loan amount of Rs. 3,00,000/- to him. Therefore, the defence disclosed by the accused in the notice under Section 251 Cr.P.C that a loan of Rs. 3,00,000/- was taken by the accused from the complainant in January, 2020 and which has already been repaid to the complainant has been fortified and probabalised as CW-1 in his testimony has himself admitted that the husband of the accused has paid back the aforesaid loan of Rs. 3,00,000/- to him.
34.It is pertinent to note that CW-1 in his testimony has admitted that he had advanced a loan of Rs. 3,00,000/- to the accused in January, 2020 and CW-1 has further admitted that the husband of the accused has paid back the said loan of Rs. 3,00,000/- to him. The admission by CW-1 in his cross examination that he had advanced a loan of Rs. 3,00,000/- to the accused in January, 2020 (which is prior in point of time to the alleged loan transaction of Rs.4,00,000/- pertaining to December, 2020 forming the genesis of the present complaint) and also the admission by CW-1 that the husband of the accused has paid back the Umang Digitally signed by Umang Joshi Joshi Date: 2023.02.28 13:18:02 +05'30' CC NI Act No. 15476/2021 Page 17 of 25 said loan of Rs. 3,00,000/- to him has fortified and probabalised the primary defence of the accused that the accused and her husband had taken a loan from the complainant only once i.e. in January, 2020 and the same has already been repaid to the complainant. Therefore, the accused has raised a probable defence on the scale of preponderance of probabilities that the cheque in question was not issued to the complainant in discharge of any legally enforceable liability existing as on the date of the presentation of the said cheque. Furthermore, there are contradictions in the testimony of CW-1 and at one instance in his cross examination, CW-1 has even denied disbursing any loan to the accused in December, 2020.
35.Accordingly, in view of the aforesaid, it is concluded that the accused has raised a probable defence on the scale of preponderance of probabilities and has created doubt in the complainant's case and the accused has thereby rebutted the statutory presumptions under Section 118 (a) and Section 139 of the NI Act.
c) Whether the complainant has established the ingredients of the offence punishable under Section 138 of the NI Act beyond reasonable doubt against the accused or not?
36.It is pertinent to mention that when the accused has created a doubt in the complainant's case and has raised a probable defence by drawing inferences from the materials on record, the statutory presumptions under Section 118 (a) and Section 139 of the NI Act stand rebutted and the burden of proof shifts back upon the complainant to prove the guilt of the accused beyond reasonable doubt.
Umang Digitally signed by
Umang Joshi
Joshi Date: 2023.02.28
13:18:09 +05'30'
CC NI Act No. 15476/2021 Page 18 of 25
37.The next question which therefore needs to be determined is whether the complainant has been able to prove the ingredients of the offence under Section 138 of the NI Act in the present case beyond reasonable doubt. The complainant was therefore required to prove that the cheque in question was issued by the accused to the complainant for a legally recoverable debt or other liability. In other words, the complainant was required to prove that there existed a legally recoverable debt or other liability in lieu of which the cheque in question was issued by the accused in favour of the complainant.
38.The complainant was therefore required to prove the factum of alleged friendly loan of Rs. 4,00,000/- advanced by him to the accused by leading clear and cogent evidence. In his cross examination, the complainant i.e. CW-1 has deposed that the accused along with her husband came to his house in the month of November or December, 2020 to seek financial assistance from him. CW-1 in his testimony has further deposed that he had advanced a sum of Rs. 4,00,000/- in cash to the accused and her husband after one week of their raising the demand and further states that the loan of Rs. 4,00,000/- was advanced to the husband of the accused in presence of complainant's friend namely Sukhbir. CW-1 has further deposed that he had demanded two cheques in return of the loan of Rs. 4,00,000/- which were already signed by the accused and her husband and further states that he had filled both the cheques which were handed over to him by the accused and her husband. Therefore, in his cross examination, the complainant claims to have advanced a sum of Rs. 4,00,000/- in cash to the accused and her husband but no particulars of the exact date, place and even the exact month of advancing the alleged loan have been stated by CW-1 in his cross examination. Furthermore, as per the deposition of CW-1, it is evident that CW-1 is himself uncertain as to the exact month in Digitally signed by Umang Umang Joshi Joshi Date: 2023.02.28 13:18:18 +05'30' CC NI Act No. 15476/2021 Page 19 of 25 which the accused and her husband came to his house to seek financial assistance as he has not deposed with certainty as to whether it was the month of November, 2020 or December, 2020. Furthermore, the averments in the complaint and the evidence by way of affidavit of the complainant are specifically silent regarding the particulars as to the exact date of advancing the alleged loan of Rs.4,00,000/- by the complainant to the accused which casts a doubt on the veracity of the alleged loan transaction. It is pertinent to note that even in his cross examination, the complainant CW-1 has not mentioned the date, place or even the exact month in which he had allegedly advanced a loan of Rs. 4,00,000/- in cash to the accused which casts a doubt on the veracity of the alleged loan transaction.
39. Mere assertions of the complainant cannot ipso facto amount to proof of the said alleged fact, unless the complainant leads clear and cogent evidence to prove the said fact. Section 103 of the Indian Evidence Act lays down a cardinal rule of evidence and provides that the burden of proof as to any particular fact lies on that person who wishes the court to believe in its existence, unless it is provided by any special law that the proof of that fact shall lie on any particular person. Therefore, it was incumbent upon the complainant to substantiate and prove his assertions through clear and cogent evidence but the complainant did not lead any cogent evidence to substantiate his version.
40.In this context, it is apposite to refer to the case of Vijay vs. Laxman (2013) 3 SCC 86, wherein the Hon'ble Supreme Court of India observed as follows:
"The absence of any details of the date on which the loan was advanced as also the absence of any documentary or other evidence to show that any such loan transaction had indeed taken place between the parties is a significant circumstance."
Umang Digitally signed by
Umang Joshi
Joshi Date: 2023.02.28
13:18:26 +05'30'
CC NI Act No. 15476/2021 Page 20 of 25
41.CW-1 has further deposed in his cross examination that he had advanced a loan of Rs. 4,00,000/- to the husband of the accused in presence of his friend Sukhbir. However, it is pertinent to note that the fact that the alleged loan of Rs. 4,00,000/- was advanced by the complainant in presence of his friend Sukhbir has nowhere been mentioned by the complainant in the complaint and in the evidence by way of affidavit. Furthermore, the said Sukhbir was not mentioned as a witness in the list of witnesses filed by the complainant in the complainant. More importantly, the said Sukhbir who is claimed by CW-1 to be a witness to the alleged loan transaction was not even examined by the complainant as a witness which casts a grave doubt on the complainant's case and also on the veracity of the alleged loan transaction. It was incumbent upon the complainant to prove the factum of advancement of the alleged loan to the accused by leading clear and cogent evidence. However, the complainant did not examine any other witness and did not even examine the said Sukhbir in whose presence the complainant claims to have advanced the alleged loan of Rs. 4,00,000/- to the accused which raises grave doubt on the complainant's case. The said loan transaction as alleged by the complainant is entirely a cash transaction as per his deposition in his cross examination and therefore the complainant was required to prove the factum of alleged loan being advanced to the accused through clear and cogent evidence. It is pertinent to note that the complainant has not produced any cogent oral or documentary evidence in order to prove the factum of advancement of alleged loan by him to the accused. In his cross examination, the complainant CW-1 has merely deposed that a loan of Rs. 4,00,000/- was advanced by him to the accused in cash and no particulars as to the date and place of the advancement of the said loan is stated by the complainant in his deposition which casts a doubt on the veracity of the alleged transaction. It is pertinent to note that in the present case, the particulars as to the exact date and Umang Digitally signed by Umang Joshi Joshi Date: 2023.02.28 13:19:09 +05'30' CC NI Act No. 15476/2021 Page 21 of 25 place of advancement of the alleged loan of Rs. 4,00,000/- in cash to the accused have not been substantiated by the complainant in his complaint and even in his testimony which casts a doubt on the version of the complainant.
42.Furthermore, it is pertinent to note that no receipt or any written acknowledgment/document and neither any witness has been brought on record by the complainant so as to prove the factum of advancement of the alleged friendly loan by him to the accused which additionally casts a doubt on the veracity of the said alleged loan transaction. It is incomprehensible as to why a sum of Rs. 4,00,000/- which is indeed a huge sum of money would be advanced by any reasonable and prudent person without executing any receipt or any written document and without ascertaining the capacity of the borrower to repay.
43.CW-1 has further deposed in his cross examination that he does not have fixed monthly income and has also deposed that he does not file income tax return. Therefore, in this context, it was imperative upon the complainant to show and prove as to how he was able to arrange a huge sum of Rs. 4,00,000/- which was allegedly lent by the complainant to the accused by cash. The complainant has failed to show as to how and from what source, he was able to arrange a huge sum of Rs. 4,00,000/- in cash which was allegedly given by him to the accused. The complainant has not placed on record any document or any evidence to substantiate and demonstrate the source or arrangement of funds of Rs.4,00,000/- in cash for advancing the alleged loan to the accused. Accordingly, it is amply clear that the complainant has failed to demonstrate the source or arrangement of funds for advancing the alleged loan to the accused and the accused has been able to raise a probable defence by casting a doubt Umang Digitally signed by Umang Joshi Joshi Date: 2023.02.28 13:19:17 +05'30' CC NI Act No. 15476/2021 Page 22 of 25 over the source or arrangement of funds by the complainant to advance the alleged loan to the accused. The complainant has failed to establish that the alleged loan was advanced by him to the accused and has also failed to prove that the accused had any legally recoverable debt or liability towards the complainant. Consequently, the complainant has failed to prove that there existed a legally recoverable debt or other liability in lieu of which the cheque in question was issued by the accused in favour of the complainant. No clear and cogent evidence whatsoever has been led by the complainant to prove the factum of advancement of the alleged loan by him to the accused which casts a doubt on the veracity of the alleged transaction.
44.The contentions of Ld. counsel for the complainant that the accused did not examine herself and did not lead any defence evidence to prove its case are bereft of any merit. As already discussed, it is a trite law that for discharging the burden of proof placed upon an accused under a statute, the accused need not examine himself and need not step into the witness box. The accused may discharge his burden and probabalise his defence by relying on the materials already brought on record. The accused in order to prove his defence is not required to lead evidence and rather the accused can probabalise his defence on the basis of the evidence and the materials already on record. Furthermore, the complainant has to discharge its initial burden of proof and is required to prove its case beyond reasonable doubt. The standard of proof required on part of the accused is that of preponderance of probabilities while that on part of the prosecution/complainant is proof beyond all reasonable doubt. In the present case, the accused has been successful in creating a reasonable doubt in the case put forth by the complainant and the accused has also been able to raise a probable defence on a scale of preponderance of probabilities. The case of the Umang Digitally signed by Umang Joshi Joshi Date: 2023.02.28 13:19:26 +05'30' CC NI Act No. 15476/2021 Page 23 of 25 complainant has to stand on its own legs and the complainant has to discharge its initial burden of proof and prove its case beyond reasonable doubt which has not been done by the complainant in the present case.
45.In view of the aforesaid discussion, it is concluded that the complainant has failed to establish the ingredients of the offence punishable under Section 138 of the NI Act beyond reasonable doubt against the accused.
J. Decision:
46. 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 amply clear that the complainant has miserably failed to discharge its burden of proof and has failed to establish the ingredients of the offence punishable under Section 138 of the NI Act beyond reasonable doubt against the accused. Furthermore, the complainant has miserably failed to prove and establish that the alleged loan was advanced by him to the accused as the version of the complainant has not been substantiated by any cogent evidence. Furthermore, the accused has been able to create a doubt in the version of the complainant and has also been able to raise a probable defence on a scale of preponderance of probabilities. All the aforesaid facts and circumstances when considered and analysed together cast a grave suspicion and doubt on the version of the complainant and also on the veracity of the alleged loan transaction.
Umang Digitally signed by Umang Joshi Joshi Date: 2023.02.28 13:19:34 +05'30' CC NI Act No. 15476/2021 Page 24 of 25
47.On a conspectus of the factual matrix and the legal position as discussed above, this court is of the considered view that the complainant has failed to discharge its burden of proof and has failed to establish the ingredients of the offence punishable under Section 138 of the NI Act beyond reasonable doubt against the accused. The complainant has failed to prove that the cheque in question was issued by the accused to the complainant for a legally recoverable debt or other liability
48.Accordingly, the accused Rashmi Tyagi is hereby acquitted for the offence punishable under section 138 of the NI Act.
Announced in the Open Court on this 28th day of February 2023. This Judgment consists of 25 signed pages.
Umang Digitally signed by
Umang Joshi
Joshi Date: 2023.02.28
13:19:43 +05'30'
(UMANG JOSHI)
MM (NI Act) DIGITAL COURT-05,
South West, Dwarka Courts, New Delhi
28.02.2023
CC NI Act No. 15476/2021 Page 25 of 25