Delhi District Court
Cnr. Dlct020031152013 Mohd. Sadiq vs Asif Khan Page 1 Of 47 on 30 July, 2022
CC No. 525204/2016
CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 1 of 47
IN THE COURT OF SH. VISVESH, METROPOLITAN
MAGISTRATE, N.I. ACT-06, CENTRAL, TIS
HAZARI COURTS, DELHI
CNR. DLCT020031152013
CC No. 525204/2016
Mohd. Sadiq
S/o Sh. Inamullah
R/o - 586, Gali Jute Wali
Churiwalan, Jama Masjid
Delhi - 110006 ...... Complainant
Vs.
Sh. Asif Khan
S/o Late Sh. Yasin Khan
R/o H.No. BC-525, Badkal Colony
Faridabad, Haryana
Also, at:
2876, 1st Floor, Gali No. 4
Chuna Mandi, Paharganj
Delhi -110055 ...... Accused
Date of Institution : 01.06.2013
Offence complained of : s.138 of The Negotiable Instruments
Act,1881
Plea of the Accused : Not Guilty
Final Order : Acquitted
Date of Decision : 30.07.2022
Arguments were advanced by:
Sh. Mohd. Taslim, Ld. Counsel for the Complainant
Sh. Asheesh Kumar Mishra, Ld. Counsel for the Accused
Page 1 of 47
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CC No. 525204/2016
CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 2 of 47
JUDGEMENT
1. The present Complaint has been filed by the Complainant against the Accused under section 138 Negotiable Instruments Act, 1881.
Factual Matrix
2. The brief facts as alleged by the Complainant in the Complaint are that the Accused and the Complainant had entered into a partnership business under the name and style of M/s B.M. Sign Systems and started running the business at the above said address i.e., 2876, Gali No. 4, Chuna Mandi, Paharganj, Delhi - 110055 and this regard partnership deed dated 31st of March 2009 was also executed between the parties. It is also alleged that a partnership continued till September 2011 after which it was agreed to mutually dissolve the said partnership on 26th of September 2011 and that a sum of ₹ 320,000 was due from the side of the Accused and the Accused had written a note in his own handwriting by which the Accused had assured and undertaken that he will make the payment of the aforesaid amount of ₹ 320,000 to the Complainant by 24th of March 2013. Further, it is alleged that the Accused had also signed the promissory note in this regard dated 27th of September 2011 in favour of the Complainant.
2.1 It is also alleged that in the mid-of March, 2013, the Complainant had approached the Accused and demanded the above said amount and in discharge of his liability, the Accused had issued the cheque Page 2 of 47 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 3 of 47 bearing No. 587054 dated 24th of March 2013 for a sum of ₹ 320,000 drawn on ICICI bank, Connaught Place Branch.
2.2 When the Complainant presented the said cheque, hereinafter referred to as the cheque in question through his banker Canara Bank, Paharganj branch, the same was returned unpaid by the banker of the Accused vide returning memo dated 26th of March 2013 and 13th of April 2013 with the remarks "Funds Insufficient". (NB: 13th of April 2013 is the reckoning date for the purposes of limitation in the present matter) 2.3 The Complainant thereafter issued a legal demand notice on 20th of April 2013 through counsel calling upon the Accused to pay the said cheque amount within a period of 15 days from receipt thereof. The said notice was duly served upon the Accused, the Accused also sent his reply dated 15th of May 2013 but failed to pay the aforesaid cheque amount within the statutory period.
2.4 Hence, the present Complaint u/s 138 Negotiable Instrument Act 1881 (hereinafter the NI Act) was filed on 1st of June 2013 by the Complainant, praying for the Accused to be summoned, tried, and punished for commission of the offence u/s 138 of the Negotiable Instruments Act, 1881. The Complainant has averred that the present Complaint is within the period of limitation and falls within the territorial limits of this Court's jurisdiction; thus, being tenable at law.
Page 3 of 47Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 4 of 47 Proceedings before the Court
3. Pre-summoning Evidence: To prove a prima-facie case, the Complainant led pre-summoning evidence by way of affidavit, Ex. CW-1/A wherein the Complainant has affirmed the facts stated in the instant Complaint.
4. Documentary Evidence: To prove the case, the Complainant has relied upon the following documents:
a) Partnership Deed dated 31st of March 2009, Ex. CW1/1.
b) Handwritten note dated 26th of September 2011 executed by the Accused in favour of the Complainant, Ex. CW1/2.
c) Promissory note dated 27th of September 2011 executed by the Accused in favour of the Complainant, Ex.
CW1/3.
d) Original cheque bearing no. 587054 dated 24th of March 2013 for a sum of ₹ 320,000 drawn on ICICI bank bank Connaught Place Branch, Ex. CW1/4.
e) Original cheque return memo dated 26th of March 2013 and 13th of April 2013 Ex. CW1/5-6. (Only Ex. CW1/6 is being taken into account in the present matter for the purposes of satisfaction of legal ingredients).
f) Office Copy of legal notice dated 20th of April 2013 Ex. CW1/7.
g) Postal receipts, track report and returned envelopes Ex. CW1/8-10 (Colly).
h) Reply on behalf of the Accused dated 15th of May 2013 to the legal demand notice, Ex. CW1/11.
5. Summoning of the Accused: On finding of a prima-facie case against the Accused, the Accused was summoned on 7th of June 2013 where the Accused appeared before the Court on 22nd of October Page 4 of 47 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 5 of 47 2013.
6. Framing of notice & plea of defence: Notice u/s 251 Cr.P.C. was framed against the Accused on 22nd of October 2013 to which he pleaded not guilty and claimed trial. The plea of defence of the Accused was recorded where the Accused had stated that he had no knowledge about the cheque in question because during the period of partnership, many times he had signed blank cheques. He stated that it may be presumed that the cheque in question was misused by the Complainant because there is no legal liability made out against him. Further, it was stated that so far as the cheque in dispute is concerned, the Complainant's intention was just to cheat the Accused and gain monetary benefits without any legal liability. In this regard, the Accused submitted that one dissolution deed was signed on 27th of September 2011 in the presence of two witnesses. Lastly, the Accused stated that all the claims, disputes, differences regarding the affairs of the partnership firm respective capital investment, respective shares of profits or losses have been duly and completely settled between the Accused and the Complainant.
7. Evidence of the Complainant: After the framing of notice, the Accused was granted permission to cross-examine the Complainant. The Complainant was examined as CW1, adopting the pre- summoning evidence as post-summoning evidence and was cross examined and discharged. The Complainant also examined CW-2:
Sh. Hanif Memon in support of his case. Thereafter, Complainant evidence was closed, and the matter was listed for statement of the Page 5 of 47 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 6 of 47 Accused u/s 313 Cr.P.C. r/w Section 281 Cr.P.C.
8. Statement of the Accused: Statement of the Accused was recorded u/s 313 Cr.P.C. r/w Section 281 Cr.P.C on 9th of August 2019 wherein all the incriminating circumstances appearing in evidence against the Accused were put to him to which the Accused stated that he had not issued the cheque in question to the Complainant. The Accused admitted that the signature appearing on the cheque in question are his but the details on the cheque in question have not been filled up by him. He denied the dishonour and stated that he did not receive the legal demand notice. However, later on, he admitted the receipt of legal demand notice. He then stated that he and the Complainant used to run a partnership business together namely M/s B.M. Sign System but they started having some dispute and the Complainant left the partnership business in the year 2011. The Accused stated that the Complainant had started demanding his share from the Accused and he had told him that the clients with whom he was dealing, he could separately start another business taking those clients with him. He then stated that he used to keep his blank signed cheques in his office and the Complainant being a partner of the partnership firm used to know the said fact and therefore, the Complainant had stolen the cheque in question and has misused the same. The Accused denied owing any liability Complainant and stated that he is currently running the business of M/s B.M. Sign System as sole proprietorship. Regarding Ex. CW1/2, the Accused admitted his signature and his handwriting of Page 6 of 47 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 7 of 47 the said document and stated that prior to the Complainant leaving the partnership business, he and the Complainant had arrived at the mutual understanding with respect to any balance amount that the Accused had to pay to him as adjustments relating to the partnership business and it was then that the Complainant had asked the Accused to execute the said document. The Accused stated that on the very same day, the Complainant had also handed over a handwritten note to him in his handwriting wherein it was stated that the Complainant has no concern with all the property of the partnership firm which included the furniture, account books etc. and that the Complainant was leaving the partnership firm. Lastly, the Accused stated that on the very next day, to dissolution agreement was entered between the Accused and the Complainant wherein all the terms were written and was signed by both the parties. The Accused denied his signature on Ex. CW1/3 and also the contents of the same.
9. Defence Evidence: The Accused has examined DW-1: Sh. V.C. Mishra, Forensic Handwriting expert, DW-2: Sh. Pankaj Sagar and Accused himself as DW-3. Thereafter, a separate statement of the Accused to that effect was recorded and defence evidence was closed. The matter was then fixed for final arguments.
10.Final Arguments: Final arguments were advanced by both sides. Considering the voluminous record and to ensure that no submission or point of argument on question of fact or law was left out, the parties were permitted to file written submissions along with necessary case law (if any) and the same were duly taken on record Page 7 of 47 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 8 of 47 and has been considered. I have heard the submissions of the Ld. Counsel for the Complainant as well as the Accused. I have also perused the record.
Legal Position
11.For the application of s.138 of the Negotiable Instruments Act, 1881, the following legal requirements must be satisfied from the averments in the Complaint as well as the evidence of the Complainant: -
(a) That a person has drawn a cheque, 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 legally enforceable debt or other liability;
(b) That the cheque has been presented to the bank within a period of three months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(c) That the cheque has been returned by the drawee bank unpaid, for the reason that 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 agreement made with that bank;
(d) That the payee or holder in due course has made a demand for payment of the said amount of money by giving a notice in writing to the drawer of the cheque within 30 days of receipt of information from the bank regarding the return of the cheque as unpaid;
(e) That the drawer of the cheque fails to make the payment of the said amount of money to the payee or holder in due course within 15 days of receipt of the said notice;
Page 8 of 47Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 9 of 47 11.1. The aforesaid legal requirements are cumulative in nature, i.e. only when all of the aforementioned ingredients are duly proved is the drawer of the cheque deemed to have committed an offence under s. 138 of the Negotiable Instruments Act.
11.2. The provision of s.138 is buttressed by s.139 and s.118 of the Act.
s. 139 of the Act provides that the Court shall presume, that the holder of a cheque received the cheque for the discharge, wholly or in part of any debt or other liability. s.118 of the Act provides inter alia that the Court shall presume, until the contrary is proved, that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration.
11.3. What follows from the aforesaid is that the offence u/s 138 of the Negotiable Instruments Act operates on reverse onus of proof theory. The presumptions u/s 139 and s. 118 of the Act mandate the Court to draw them, when a given set of facts are shown to exist. The same is evident by the peremptory language "Shall Presume"
used. However, the said presumptions are rebuttable in nature, i.e. it is open for the defence to disprove the same by establishing facts to the contrary.
11.4. In the case of Hiten P. Dalal v. Bratindranath Banerjee1, the Hon'ble Supreme Court had occasion to examine the confines of the presumption u/s 139 of the Act, wherein it held as follows:
"22. Because both Sections 138 and 139 (..) "introduce 1 (2001) 6 SCC 16 Page 9 of 47 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 10 of 47 an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the Accused."
(Ibid. at p. 65, para 14.) (...) The obligation on the prosecution may be discharged with the help of presumptions of law or fact unless the Accused adduces evidence showing the reasonable possibility of the non- existence of the presumed fact.
Therefore, the rebuttal does not have to be conclusively established but such evidence must be adduced before the Court in support of the defence that the Court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of reasonability being that of the "prudent man".
(...) in the case of a mandatory presumption, the burden resting on the Accused person in such a case would not be as light as it is where a presumption is raised under Section 114 of the Evidence Act and cannot be held to be discharged merely by reason of the fact that the explanation offered by the Accused is reasonable and probable. It must further be shown that the explanation is a true one. ........ Unless, therefore, the explanation is supported by proof, the presumption created by the provision cannot be said to be rebutted". (emphasis supplied).
11.5. Also, in the case of Rangappa v. Sri Mohan2, it was held that:
"(..)we are in agreement with the respondent claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. (..)
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 2 (2010) 11 SCC 441 Page 10 of 47 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 11 of 47 presumption under Section 139, the standard of proof for doing so is that of "preponderance of probabilities".
(...) 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(...)"(emphasis supplied) 11.6. With regard to the factors taken into account for rebutting the presumption u/s 139 read with s.118 of the Act, the judgement of Hon'ble Delhi High Court in V.S. Yadav v. Reena 3 assumes importance, wherein it was held that:
"Mere pleading not guilty and stating that the cheques were issued as security, would not amount to rebutting the presumption raised under Section 139 of N.I. Act. (...) The Accused, by cogent evidence, has to prove the circumstance under which cheques were issued". (emphasis supplied) Appreciation of evidence
12.Now I shall proceed to deal with the legal ingredients one by one and give my finding on whether the evidence on record satisfies the legal ingredient in question or not.
(a) That a person has drawn a cheque, 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 legally enforceable debt or other liability 12.1.This condition pertains to the issuance of the cheque itself. It is pertinent to note that the Accused, in his notice of accusation has 3 CRL. A. No. 1136 Of 2010 Page 11 of 47 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 12 of 47 given a vague reply in respect of the signature on the cheque in question stating that many times, he had signed blank cheques. However, in his statement u/s 313 r/w s.281 Cr.P.C., the Accused has admitted his signature on the cheque in question. Further, the cheque has been drawn on the account of the Accused. This leads to drawing of an inference u/s 139 read with s.118 of the Act, that the cheque was issued in discharge of a legally recoverable debt or other liability.
12.2.In the case of Bharat Barrel & Drum Mfg. Co. v. Amin Chand Pyarelal 4, it was held:
"12. (...) the position of law which emerges is that once execution of the promissory note is admitted, the presumption under Section 118(a) would arise that it is supported by a consideration. Such a presumption is rebuttable. The defendant can prove the non-existence of a consideration by raising a probable defence. The Court may not insist upon the defendant to disprove the existence of consideration by leading direct evidence as the existence of negative evidence is neither possible nor contemplated and even if led, is to be seen with a doubt. The bare denial of the passing of the consideration apparently does not appear to be any defence. Something which is probable has to be brought on record for getting the benefit of shifting the onus of proving to the plaintiff. (emphasis supplied)"
12.3. Also, in the case of Kumar Exports Vs. Sharma Carpets 5, it was held:
4(1999) 3 SCC 35 5 2009 (2) SCC 513 Page 12 of 47 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 13 of 47 "When a presumption is rebuttable, it only points out that the party on whom lies the duty of going forward with evidence, on the fact presumed and when that party has produced evidence fairly and reasonably tending to show that the real fact is not as presumed, the purpose of the presumption is over.
The Accused in a trial under Section 138 of the Act has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case the non-existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. (...) To disprove the presumptions, the Accused should bring on record such facts and circumstances, upon consideration of which, the Court may either believe that the consideration and debt did not exist or their non-existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability, the Accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on to the Complainant. The Accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arising under Sections 118 and 139 of the Act. The Accused has also an option to prove the non-existence of consideration and debt or liability either by letting in evidence or in some clear and exceptional cases, from the case set out by the Complainant, that is, the averments in the Complaint, the case set out in the statutory notice and evidence adduced by the Complainant during the trial. Once such rebuttal evidence is adduced and accepted by the Court, having regard to all the circumstances of the case and the preponderance of probabilities, the evidential Page 13 of 47 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 14 of 47 burden shifts back to the Complainant and, thereafter, the presumptions under Sections 118 and 139 of the Act will not again come to the Complainant's rescue.
(emphasis supplied)"
12.4.The presumption, having been raised against the Accused, it falls upon the Accused to rebut it. The Accused has chosen to do so by cross-examining CW - 1 & 2 and by leading the evidence of DW- 1 - 3 in his defence.
12.5.Before proceeding to analyse the rival contentions, it would be fruitful to briefly recapitulate the events which took place in the course of the trial so that a clear, steady and coherent train of thought could be developed.
12.6.The case of the Complainant rests upon the partnership deed dated 31st of March 2009, Ex. CW1/1 executed between the Complainant and the Accused. In addition thereto, the Complainant has also filed a handwritten note, Ex. CW1/2 dated 26th of September 2011 executed by the Accused in favour of the Complainant promising to pay ₹ 320,000 to the Complainant by 24th of March 2013. There is also a promissory note executed by the Accused in favour of the Complainant Ex. CW1/3 which is dated 27th of September 2011 and promising to pay the amount of ₹ 320,000 by way of the cheque in question dated 24th of March 2013.
12.7.After filing of the case, the Accused was summoned on 7th of June 2013 and he entered appearance of 2nd of October 2013 and notice was framed against the Accused and the same day and the matter Page 14 of 47 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 15 of 47 was listed for DE. Thereafter on 28th of February 2014, the Accused filed an application u/s 145(2) of the NI Act along with Annexure A to that application, i.e. a Dissolution Deed dated 27th September 2011 executed by the Complainant in favour of the Accused. This document was later denoted as Ex. CW1/X1 (OSR) and the original thereof was also brought on record.
12.8.The Accused was granted permission to cross-examine the Complainant whereby the Complainant adopted his pre-summoning evidence as his post-summoning evidence. Ex. CW1/3, i.e., the promissory note was objected to on behalf of the Accused and the matter was proceeded with for the cross examination of the Complainant on 23rd of June 2015 wherein the Complainant duly admitted the dissolution deed, Ex. CW1/X1, filed by the Accused. The cross-examination was completed in part and deferred.
12.9.On next effective date of hearing, i.e., 1st of June 2016, the Complainant was further cross examined and discharged and the matter was listed for RCE (remaining Complainant's evidence). On 19th of December 2016, an application u/s 311 Cr.P.C. was moved on behalf of the Accused along with copy of a handwritten note dated 26th of September 2011, allegedly executed by the Complainant in favour of the Accused (Annexure A to the application u/s 311 Cr.P.C., later Ex.DW1/C). Permission was sought therein to place the said document on record which was stated to be not available with the Accused at the time of cross- examination of CW - 1 and to re-examine CW - 1 in respect of the Page 15 of 47 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 16 of 47 said document. Reply was sought from the Complainant and the same was filed wherein the Complainant took the objection that the alleged document i.e., handwritten note is forged and fabricated. It was also stated that if any document would have been executed by the Complainant, the same would be in the knowledge of the Accused since the time of its execution but the Accused did not mention about the said document at any stage, neither at the time of framing of charge (sic. notice), nor in his application u/s 145(2) of the NI Act. Lastly, it was stated that not even a suggestion was given by the Accused to that effect during the cross examination of CW - 1 which itself inter alia, proves that the said document is forged and fabricated.
12.10. However, before the said application could be considered, another application u/s 45 of the Indian Evidence Act, 1872 was moved on behalf of the Accused along with the original handwritten note dated 26th of September 2011 executed by the Complainant as Annexure A (later Ex.DW1/C) to the said application and permission was sought to obtain opinion of a handwriting expert in respect of the handwriting as well as the age of the ink appearing on Ex.DW1/C to the application u/s 45 of the Indian Evidence Act, 1872. The said application was stated to have been moved in response to the allegation of the Complainant in his reply to the application u/s 311 Cr.P.C. that Ex.DW1/C was forged and fabricated. Even this application was opposed by the Complainant inter alia on grounds that Ex. DW1/C is irrelevant to the present case and the Page 16 of 47 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 17 of 47 Complainant is already relying on Ex. CW1/2, i.e., the undertaking given by the Accused where there is a clear mention of the cheque in question. The said application of the Accused was allowed by the Court vide order dated 15th of February 2017 noting that Annexure A is a document which supports the defence version of the Accused and that it is necessary for the Accused to establish its genuineness. The Accused was granted liberty to obtain expert opinion on the signatures and handwriting on the said document and it was stated that such expert opinion shall form part of the defence evidence which shall be produced at the relevant stage and the matter was adjourned for arguments on the application u/s 311 Cr.P.C.
12.11. On the next effective date of hearing, i.e., 24th of April 2017, an application u/s 311A of the Cr.P.C. was moved on behalf of the Accused seeking directions to the Complainant to give his specimen handwriting on a blank paper and that the original Annexure A and specimen handwriting of the Complainant kept in a sealed cover. Both this application as well as the application u/s 311 Cr.P.C. was disposed of by a common order holding that it is necessary for the Accused to cross-examine the Complainant and to confront him with the aforesaid document. It was also held that the Accused may obtain the sample signature and handwriting of the Complainant for the purposes of obtaining the report of the handwriting expert at the behest of the Accused. For the delay caused in moving of these applications and furnishing the aforesaid document, a cost was imposed upon the Accused to be paid to the Complainant. On the Page 17 of 47 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 18 of 47 next effective date of hearing, the specimen signature and handwriting of the Complainant were taken in Court (Ex. DW1/B1
- B3) and the matter was adjourned for the purposes of obtaining the expert opinion. On the next effective date of hearing, i.e., 16th of July 2018, the opinion was furnished in an envelope and the matter was adjourned for the examination of the handwriting expert as well as the further cross examination of the Complainant. On 1st of June 2019, the handwriting expert was examined as DW-1 whereby he affirmed his opinion that the disputed signatures and handwriting on Annexure A have been written by the same person who has written the specimen documents, Ex. DW1/B1 - B3. His opinion on record was denoted Ex. DW1/A (Colly in 8 pages) and the document in question, i.e., Annexure A was denoted Ex. DW1/C. 12.12.On the same day, the Complainant who had been recalled for further cross examination, was specifically questioned about Ex. DW1/C wherein he admitted the same to be in his handwriting and that he had executed the same on 26th of September 2011. This volte face by the Complainant is the subject matter of a separate application u/s 340 Cr.P.C., which is being decided along with this judgement.
12.13.Thereafter, the matter has proceeded with relatively smoothly with the examination of CW - 2, recording of statement of Accused u/s 313 r/w 281 Cr.P.C. as well as the examination of the other defence witnesses DW2 & 3.
12.14.For the purposes of better understanding and appreciating the Page 18 of 47 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 19 of 47 submissions advanced by both sides on a kaleidoscope of issues, it is deemed fit to compartmentalize them into headings and return a finding accordingly.
Issue No. 1: What is the scope and effect of Ex. CW1/2 vis-à-vis Ex. CW1/X1 and Ex. DW1/C?
12.15.It is pertinent to note that Ex. CW1/1, i.e., the partnership deed dated 31st of March 2009 is admitted between the parties. When confronted with the dissolution deed dated 27th of September 2011, Ex. CW1/X1, it is also admitted by the Complainant. Ex. DW1/C, the handwritten note executed by the Complainant is, however, admitted by the Complainant when confronted; albeit at a later stage. The Accused has duly admitted his signature and execution of Ex. CW1/2, i.e. a handwritten note executed by him in favour of the Complainant dated 26th of September 2011. Therefore, these documents would now fall within the domain of admitted and undisputed documents.
12.16.So far as the case of the Complainant is concerned, liability upon the Accused is to be fastened on the basis of Ex. CW1/2, i.e., the handwritten note dated 26th of September 2011, executed by the Accused a day prior to Ex. CW1/X1 along with the promissory note dated 27th of September 2011. It is the case of the Complainant that the handwritten note, Ex. CW1/2, executed by the Accused in favour of the Complainant and recognizing his liability of ₹ 320,000, a day prior to the dissolution of the partnership would hold Page 19 of 47 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 20 of 47 good even post the dissolution of the partnership and that Ex. DW1/C is a reciprocal promise made by the Complainant to relinquish his claim against the promise of the Accused to compensate the Complainant for its value at a deferred date, and in preparation of the impending dissolution of the partnership. It is also submitted that the time of final arguments that 'duly and completely settled' referred to in Para 2 of Ex. CW1/X1 would undoubtedly mean settlement in terms of Ex. CW1/2 & Ex. DW1/C read together and not otherwise. It is further submitted that the intention of the parties is also to be gathered from Ex. CW1/X1 whereby they have designedly left out any averment in respect of this agreement encapsulated Ex. CW1/2 & Ex. DW1/C which was entered into only a day prior to the dissolution.
12.17.So far as the case of the Accused is concerned, it is the case of the Accused that the said document Ex. CW1/2 was executed by him pursuant to understanding arrived at between him and the Complainant. It is stated by the Accused in his statement u/s 313 r/w s.281 Cr.P.C., Firstly, that the mutual understanding was with respect to any balance amount that he had to pay the Complainant as adjustments relating to the partnership business and it was then that the Complainant had asked him to execute Ex. CW1/2. Secondly, Complainant had also handed over a handwritten note (Ex. DW1/C) to him in his handwriting wherein it was stated that the Complainant has no concern with all the property of the partnership firm which included the furniture, account books etc. Page 20 of 47 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 21 of 47 and that the Complainant was leaving the partnership firm. It was also stated that subsequently, on the very next day, a dissolution agreement was entered into between them wherein the terms were written and signed by both the parties.
12.18. It has been submitted on behalf of the Accused at the time of final arguments that on account of brotherhood and old relations with the Complainant, the Accused had decided to give ₹ 320,000 to the Complainant for separation (of the Complainant) from the partnership firm and so that the Complainant can start his own business and Ex. CW1/2 was executed by the Accused in good faith on 26th of September 2011 and handed over to the Complainant. It was also submitted that on the very same day the Complainant had approached and requested him that he will continue with a few clients to start his new business and will not demand any money from the Accused. It is submitted that an oral settlement took place between the Complainant and the Accused and the Complainant immediately wrote a handwritten note, Ex. DW1/C thereby relinquishing all its rights and the partnership firm with the understanding that he will dispose of Ex. CW1/2. Lastly, it is submitted that after mutual settlement of scores in respect of ₹ 320,000 and distribution of clients, Ex. CW1/X1 was entered into between the parties and since all the scores had been only settled, there was no averment in Ex. CW1/X1 in respect of Ex. CW1/2 or Ex. DW1/C. 12.19.Reliance is placed by the learned counsel for the Accused upon the Page 21 of 47 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 22 of 47 words "पाट� नरिशप से अलग के िलए उसके िहसाब का िह� ा जो की 3,20,000 �पए बनते है यह पैसे दे ने का हक़दार �।" (for the purposes of separating from the partnership, the share which falls due to him (Complainant) which is worth ₹ 320,000 is my liability to pay) occurring in Ex. CW1/2 vis-à-vis the words "िकसी भी संपि� जैसे (मेज, कुड़सी, कं�ूटर औज़ार बैग अलमारी बही ख ाते म� िलख ी सामग्री और िकसी भी प्रकार की मशीनरी व �ेयर पाट्� स" (no type of property viz. (table, chair, computer, tool bag, almirah, matter/material written in books of account and any type of machinery or spare parts) occurring in Ex. DW1/C to buttress the submission that what was agreed to be paid by the Accused vide Ex. CW1/2 were the dues of the Complainant in the partnership firm which were worth ₹ 320,000 and which were subsequently relinquished by the Complainant vide Ex. DW1/C. 12.20.It is stated that the expression "बही खाते म� िलखी सामग्री"
(matter/material written in books of account) in Ex. DW1/C would undoubtedly mean the outstanding share of the retiring partner i.e., the Complainant. It is also stated that the Complainant, having relinquished his share voluntarily post the execution of Ex. CW1/2, no liability against the Accused was made out on that score.
12.21.Further, it was submitted that even otherwise, going by Ex.
CW1/X1, as the account stood orally settled, the parties have agreed in Para 3 to the effect "that all claims disputes and differences regarding the affairs of the partnership firm respective capital investment, respective shares of profits or losses and valuation of all the assets and stocks have been duly and completely settled Page 22 of 47 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 23 of 47 among the parties and the retiring partner hereby releases and relinquishes his share in the partnership and goodwill in favour of the continuing partner. The retiring partner agrees that now nothing is due to him out of the partnership profits, properties, and partnership business. The retiring partner has also surrendered all tenancy rights in the business premises of the partnership in favour of the continuing partners". (emphasis supplied) without any mention of the previously executed Ex. CW1/2 or Ex. DW1/C. On the strength of the aforesaid, it is submitted that Ex. CW1/X1 in conjunction to Ex. DW1/C would novate Ex. CW1/2 and it is only Ex. CW1/X1 which is enforceable not Ex. CW1/2. The Complainant having agreed voluntarily in terms of Ex. CW1/X1 to absolve the Accused of liability cannot turn around and enforce the same by relying upon Ex. CW1/2.
12.22.The interpretation put forth by the defence conveniently sidesteps relevant legal and factual positions as will be apparent in the discussion in the succeeding paragraphs. Ex. CW1/2 was executed on 26th of September 2011. Ex. DW1/C was also executed on the very same date. On the very next day, Ex. CW1/X1 was executed between the parties. Considering the close proximity of execution of these documents, the identity of subject matter (partnership property) to which they undoubtedly pertain and the parties executing them, they would fall within the domain of res gestae6 6 (Section 6 of the Indian Evidence Act, 1872) Relevancy of facts forming part of same transaction.--Facts which, though not in issue, are so connected with a fact in issue as to form part Page 23 of 47 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 24 of 47 and have to be read conjunctively and not disjunctively.
12.23.It is a cardinal rule of interpretation that the document is to be read as a whole and not in bits and pieces. Hence, the total effect of Ex. CW1/2, Ex. DW1/C and Ex. CW1/X1 is to be discerned from the materials on record.
12.24.Now, coming over to Ex. CW1/2, it is a unilateral undertaking executed by the Accused on 26th of September 2011 in favour of the Complainant during the subsistence of the partnership promising to compensate the Complainant to the tune of ₹ 3,20,000 for value of his share in the firm by 24th of March 2013. During the subsistence of the partnership,"उसके िहसाब का िह�ा" (share which falls to him) would only mean the share of a partner in the partnership property. Hence, what was agreed to be done is to compensate the retiring partner, i.e., the Complainant to the extent of his share in the partnership property valued at ₹ 320,000. There is another reason as to why Ex. CW1/2 has to be read along with Ex. DW1/C. 12.25.Firstly, they are contemporaneous documents executed on the same date. Secondly, Ex. DW1/C, if looked at in isolation, is a unilateral document whereby the Complainant has voluntarily relinquished his share of the partnership property without any consideration. The same would clearly be hit by s.25 of the Indian Contract Act, 18727 of the same transaction, are relevant, whether they occurred at the same time and place or at different times and places 7
25. Agreement without consideration, void, unless it is in writing and registered or is a promise to compensate for something done or is a promise to pay a debt barred by limitation law.--An agreement made without consideration is void, unless-- --An agreement made without consideration is void, unless--"
Page 24 of 47Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 25 of 47 being not covered under any of the exclusionary clauses therein. This is a fortiori true when as per Ex. CW1/1 both Complainant and the Accused were partners in 50/50 shares. Moreover, when Ex. CW1/2 and Ex. DW1/C are looked at conjunctively, it is clear as day that they form reciprocal promises 8. On the one hand, the Accused has promised the Complainant to compensate him for the value of his share in the partnership property albeit on a deferred date and similarly, the Complainant has made a reciprocal promise to not claim any right in the partnership property. Both of these promises collectively would now form the consideration or part of consideration of each other so as to constitute an agreement within the meaning of Indian Contract Act, 18729. It is this agreement which is sought to be enforced as liability under the cheque in question.
12.26.It is in this backdrop that Ex. CW-1/X1 is to be read. Section 62 of the Indian Contract Act, 1872 enacts that if the parties to a contract agree to substitute a new contract for it, or to rescind or alter it, the original contract need not be performed. Now, if Ex. CW1/2, Ex.
(1) it is expressed in writing and registered under the law for the time being in force for the registration of 1[documents], and is made on account of natural love and affection between parties standing in a near relation to each other; or unless (2) it is a promise to compensate, wholly or in part, a person who has already voluntarily done something for the promisor, or something which the promisor was legally compellable to do; or unless.
(3) It is a promise, made in writing and signed by the person to be charged therewith, or by his agent generally or specially authorized in that behalf, to pay wholly or in part a debt of which the creditor might have enforced payment but for the law for the limitation of suits. In any of these cases, such an agreement is a contract.8
Section 2(f) of the Indian Contract Act, 1872: Promises which form the consideration or part of the consideration for each other, are called reciprocal promises;
9Section 2(e) of the Indian Contract Act, 1872: Every promise and every set of promises, forming the consideration for each other, is an agreement;
Page 25 of 47Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 26 of 47 DW1/C is read along with Ex. CW1/X1, it is clear that vide Ex. CW1/2 the Accused has promised the Complainant to compensate him in respect of the latter's share in the partnership property. Ex. DW1/C is a reciprocal promise by the Complainant to relinquish the share in consideration of value specified in Ex. CW1/2.
12.27.Ex. CW1/X1 is a bilateral document executed between the Complainant and Accused and which duly notes inter alia that "the retiring partner hereby releases and relinquishes his share in the partnership and goodwill in favour of the continuing partner"
without reference to either the previous agreement between the parties. The nexus between Ex. CW1/X1 on the one hand and Ex. CW1/2, Ex. DW1/C on the other is that both pertain to partnership property and have been executed in close proximity of time between the parties to the present case. Ex. CW1/X1, being a document which is executed at a later point of time and in respect of the same subject matter, i.e. partnership property (occupying the same field as the previous agreement), would, especially when it does not refer to the previous agreement but expressly sets forth new terms in respect of disposition of partnership, impliedly supersede the previous agreement and operate to substitute its terms. By executing Ex. CW1/X1, the parties have agreed upon and settled their accounts contemporaneously to the dissolution of the partnership.
12.28.It is a cardinal rule of interpretation that the plain and ordinary meaning is to be given to the words of an instrument, unless the same results in absurdity. When such an interpretation is given and Page 26 of 47 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 27 of 47 the meaning of the words are clear, Ex. CW1/X1, Ex. CW1/2, Ex. DW1/C can stand and be read together. The previous documents, i.e. Ex. CW1/2, Ex. DW1/C would stand novated and the previous agreement would stand merged with the terms of Ex. CW1/X1. Thus construed, the recitals embodied in Para 2 of Ex. CW1/X1 quoted above would amount to discharge or waiver of the previous agreement thereby extinguishing the liability of the Accused under Ex. CW1/2. On that aspect, the judgement of Nalini Singh Associates Vs. Prime Time - IP Media Services 10 relied upon by the Ld. Counsel for the Accused is clearly apposite.
12.29.Another aspect which is fit to be discussed at the stage is that the Indian Partnership Act, 1932 which entitles a partner to have business wound up, enacts continuing authority of a partner for purposes of winding up and settlement of accounts 11 and the authority of the erstwhile partners continues notwithstanding the dissolution. Accordingly, Ex. CW1/X1could also be looked at from the point of view that the said document embodies an agreement 10 2008 SCC Online Del 1038 11 See ss. 46 to 47 of the Indian Partnership Act, 1932 (reproduced below)
46. Right of partners to have business wound up after dissolution.--On the dissolution of a firm every partner or his representative is entitled, as against all the other partners or their representatives, to have the property of the firm applied in payment of the debts and liabilities of the firm, and to have the surplus distributed among the partners or their representatives according to their rights.
47. Continuing authority of partners for purposes of winding up.--After the dissolution of a firm the authority of each partner to bind the firm, and the other mutual rights and obligations of the partners continue notwithstanding the dissolution, so far as may be necessary to wind up the affair of the firm and to complete transactions begun but unfinished at the time of the dissolution, but not otherwise: Provided that the firm is in no case bound by the acts of a partner who has been adjudicated insolvent; but this proviso does not affect the liability of any person who has after the adjudication represented himself or knowingly permitted himself to be represented as a partner of the insolvent.Page 27 of 47
Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 28 of 47 concerning partnership property, with an expectation that the continuing partner carry on the business without hindrance and the obligation on the retiring partner is confined only to what is contained in Para 4 of the said document. Having reference to the statutory provisions discussed above, the aforenoted liability under the previous agreement would cease to be recoverable owing to the discharge and relinquishment of share in partnership property by the retiring partner.
12.30.So far as the submission made on behalf of the Accused that pursuant to execution of Ex. CW1/2 by the Accused there was a subsequent oral settlement between the Complainant and the Accused under which the Complainant voluntarily relinquished all its rights and executed Ex. DW1/C with the understanding that Ex. CW1/2 shall be disposed of is concerned, no evidence whatsoever was led in support of such a submission.
12.31.Further, such a submission is clearly opposed to the standard of a reasonable man. It is quite unlikely for the Complainant to unreasonably relinquish his claim for ₹ 320,000 by executing document which does not even have any particular reference that he is relinquishing the said sum or of Ex. CW1/2. However, the words and the interpretation to Ex. CW1/X1 as discussed in the preceding paragraphs has clarified the confusion whereby the Complainant has relinquished his claim absolutely.
12.32.The Ld. Counsel for the Accused has pointed out an inconsistency Page 28 of 47 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 29 of 47 in the testimony of CW-1 recorded 1st of June 2019 whereby he has deposed that Ex. DW1/C was executed on 26th of September 2011, prior to execution of Ex. CW1/X1 and a few lines thereafter, he has stated that it is only after the dissolution agreement was executed, Ex. CW1/2 was executed whereas as per record, Ex. CW1/2 & Ex. DW1/C are both dated a day prior to the dissolution agreement, Ex. CW1/X1.
12.33.Suffice it to say that such variation could be attributable to lapse of memory in 8 years since the happening of the said fact. Also, as far as such testimony is at variance with documents, it would be inadmissible having regard to Ss. 91 and 92 of the Indian Evidence Act, 1872 without affecting any other portion of the said testimony12. It would be appropriate to discuss the testimony of DW
- 2 at the stage. He stated himself to be one of the witnesses regarding execution of Ex. CW1/X1. Apart from deposing as to the execution of the said document and identifying his signature, he appears to be scarcely aware of any other aspects of the instant case. However, he has deposed that as per the terms of dissolution, the Accused was to have no right in respect of furniture kept in the office and that it was also agreed between the Complainant and the Accused that they shall be claiming payment from their respective clients. Such a stipulation is absent in Ex. CW1/X1 and the testimony of DW-2 in so far as the aforesaid terms are concerned, 12 As the rule of falsus in uno, falsus in omnibus (false in one, false in all) is inapplicable in Indian Law.Page 29 of 47
Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 30 of 47 is also rendered inadmissible13.
12.34.A faint submission was made by the Ld. Counsel for the Complainant that as DW-2 has admitted taking some space from the Accused in his office prior to dissolution, he is an interested witness. Even assuming that be so, there is no provision of law or precedent which states that the testimony of an interested witness is to be discarded outright. It is the bounden duty of the Court to sift the grain from the chaff and to examine the testimony of the witness when tested on the anvil of cross-examination, which is being done by this Court in traversing through the record. The decision of Tamil Nadu Electricity Board Vs. N. Raju Reddiar 14 is rightly relied upon by the Ld. Counsel for the Accused.
Finding: Ex CW1/2 shall not have effect to fasten liability upon the Accused as partner in the firm. As the agreement contained in Ex. CW1/2 and Ex. DW1/C stands novated by the parties. It is only Ex. CW1/X1 which would be liable to be enforced. The liability upon the Accused under Ex. CW1/2 is impliedly extinguished by the parties by their execution of Ex. CW1/X1.
Issue No. 2: Whether the version of the Complainant in the Complaint and evidence affidavit is contrary to his testimony as CW-1 and other Complainant witness in respect of material particulars of the case? If 13 Regard being had to the parol evidence rule enshrined in Ss. 91 and 92 of the Indian Evidence Act, 1872 14 (1996) 4 SCC 551 Page 30 of 47 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 31 of 47 so, the effect thereof.
12.35.Paragraph 5 of the Complaint states that when the Complainant had approached the Accused in the middle of March, 2013 and had demanded the said amount of ₹ 320,000, the Accused had issued the cheque in question in discharge of the above said legally enforceable debt/liability. An identical averment is present in the legal demand notice as well.
12.36.In his examination conducted on 23rd of June 2015, CW-1 has deposed in answer to the question as to whether any dissolution deed was executed between the parties, that "Yes. Before the execution of the dissolution deed, the Accused had given an undertaking in his own writing on stamp paper of ₹ 10 that he will pay ₹ 320,000 which were due to me and he also issued a promissory note along with the cheque in question". The aforesaid statement would place the timeline of issuance of the cheque in question sometime prior to 27th of September 2011. This anomaly does not end here.
12.37.When CW - 1 was recalled for further cross examination on 1st of June 2016, he stated that after the execution of dissolution deed, he had never met the Accused. But, barely a few lines thereafter, CW
- 1 admitted that it is correct that he had approached the Accused in the mid-of March 2013 and the Accused had issued the cheque in question. Just four lines thereafter, CW - 1 has deposed that the Accused had handed over the cheque in question to him voluntarily Page 31 of 47 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 32 of 47 and along with the cheque, the Accused had handed over handwritten note and the promissory note regarding his liability towards the Complainant. It was also stated that the cheque in question was filled up by Mr. Hanif Memon, i.e. CW-2. This latter statement would place the timeline of the handwritten note and promissory note somewhere in March 2013 and not in September 2011, i.e. the actual date on the documents. It is also pertinent to note herein the specific averment by CW-1 that the cheque in question was filled up by CW -2 as it will assume significance in the succeeding paragraphs.
12.38.Even thus far, the inconsistency can be attributed to lapse of human memory and the parts inconsistent to written documents be disregarded having regard to Ss. 91 and 92 of the Indian Evidence Act, 1872 but the testimony of CW-2 comes as a shocker.
12.39.The evidence affidavit of CW - 2 states that on 27th of September 2011, the Accused had issued a pro-note, Ex. CW1/3 thereby admitting his liability to the tune of ₹ 320,000. He also deposed that the upper portion of the said pro-note was written by him in the presence of the Complainant and the Accused and the lower portion of the said pro-note showing the details of the cheque was filled/written by the Accused himself in his presence and in the presence of the Complainant. Further, he has deposed that he had filled up the name of the Complainant, the amount of ₹ 320,000 in words and digits upon the cheque in question and had given it to the Accused for signature.
Page 32 of 47Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 33 of 47 12.40.Both CW-1 and CW-2 have independently identified the parts in Ex. CW1/3 which have been filled up by CW-2 and the Accused respectively. It is the cross-examination of CW - 2 which unravels the case of the Complainant beyond repair and the real status of affairs is revealed.
12.41.CW - 2 deposes that he was involved in the dissolution process of the partnership firm which was conducted in the presence of CW- 2, the Complainant, the Accused and a friend of the Accused wherein it was resolved that the Accused will pay the payment pertaining to the Complainant in the partnership firm from his personal account and will pay the post dated cheques.
12.42.In the said dissolution process, CW - 2 stated that the Accused had handed over the PDC one day before (the date of dissolution, i.e., on 26th September 2011) and the same was duly filled up by the Accused; making an about turn from his previous stance that the cheque in question was filled up by him and given to the Accused for signature only. After some dillydallying, CW-2 admitted that all the particulars excluding the signature of the Accused were filled up by him on the cheque in question. He then deposed that after filling up the particulars of the cheque in question, the Accused signed upon the same. He has also categorically stated that the dissolution deed was executed on the very next day of handing over the cheque in question even though he did not remember the exact date of execution of the dissolution deed.
Page 33 of 47Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 34 of 47 12.43.Another glaring anomaly in the deposition of CW-2 is that, on the one hand, he has deposed that Ex. CW1/2 was written by the Accused in his presence and on the other hand, he has deposed that the cheque in question was handed over firstly and Ex. CW1/2 and Ex. CW1/3 were given simultaneously and on the same day, with a difference of around one hour in handing over the respective documents. It is interesting to note that the cheque in question is dated 24th of March 2013, Ex. CW1/2 is dated 26th of September 2011 and Ex. CW1/3 is dated 27th of September 2011, further contradicting the case of the Complainant regarding the date of issuance of the cheque in question.
12.44.What further casts doubt on the case of the Complainant is that CW
- 2 has averred in his examination in chief at Para-3 that as the cheque in question was to be given to the Complainant by the Accused, the Complainant was under an impression that the same would be honoured and it was due to this reason it was mentioned in the dissolution deed that nothing is due towards the Complainant from the Accused and the said dissolution deed was executed after the execution and handing over the pro-note (Ex. CW1/3) dated 27th of September 2011.
12.45.As the discussion in the preceding paragraphs would show, it is the case of the Complainant that the pro-note was filled up partly by CW-2 and partly by the Accused. Even a bare perusal of the pro- note Ex. CW1/3 would reveal that the portion allegedly filled up by the Accused contains the particulars of the cheque in question and Page 34 of 47 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 35 of 47 the date of the cheque in question, i.e. 24th of March 2013 whereas the instrument itself is dated 27th of September 2011. This would mean that the cheque in question was most likely issued post dated on 27th of September 2011 itself and not in mid of March 2013, as averred in the Complaint.
12.46.The Ld. Counsel for the Complainant has submitted that it is immaterial as to when the cheque in question was issued by the Accused or whether it was issued duly filled up or blank signed. He has stated that once the Accused has admitted his signature, the presumption u/s 139 of the NI Act comes into play and it is immaterial as to when or who had filled up the cheque in question 15. He has stated that the liability under Ex. CW1/2 was still outstanding on 24th of March 2013 and any inconsistency in the testimony of the Complainant would not extinguish a liability already existing. However, the said approach fails to take into account the terms and conditions of the subsequent agreement Ex. CW1/X1 executed between the parties. As is apparent in the discussion in the preceding paragraphs, when the liability under Ex. CW1/2 stood extinguished by the execution of Ex. CW1/X1, the fact that reasonable doubt has been cast over the date of the issuance 15 Reliance was placed on s.20 of the NI Act (reproduced below) s.20 Inchoate stamped instruments.--Where one person signs and delivers to another a paper stamped in accordance with the law relating to negotiable instruments then in force in 1[India], and either wholly blank or having written thereon an incomplete negotiable instrument, he thereby gives prima facie authority to the holder thereof to make or complete, as the case may be, upon it a negotiable instrument, for any amount specified therein and not exceeding the amount covered by the stamp. The person so signing shall be liable upon such instrument, in the capacity in which he signed the same, to any holder in due course for such amount; provided that no person other than a holder in due course shall recover from the person delivering the instrument anything in excess of the amount intended by him to be paid thereunder.
Page 35 of 47Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 36 of 47 and handing over of the cheque in question would operate to for the post of the defence of the Accused that the cheque in question was retained and presented without any liability. Whether the cheque in question was issued duly filled or blank signed or whether it was issued postdated or on 24th March 2013 would be of no significance whatsoever if the Accused was not liable under it on the date of presentation. On that score, the judgements of Triyambak S. Hegde Vs. Sripad16, Maruti Udyog Vs. Narender 17 and Grasim Industries Vs. Aggarwal Steels18 are clearly distinguishable on facts.
12.47.At this stage it would be apposite to deal with another submission of the Ld. Counsel for the Complainant. He submits that all throughout the trial the Accused has alleged that the promissory note Ex. CW1/3, is forged and fabricated without leading any evidence in support of it. He states that even de hors the cheque in question or Ex. CW1/2, the Accused has independently acknowledged his liability to pay the 3,20,000 to the Complainant upon the said pro-note. The said submission is fanciful but devoid of merit.
12.48. Even though the Accused has not led any evidence to assail the genuineness of Ex. CW1/3 at any stage, it must be borne in mind that the instant case is a criminal prosecution under s.138 of the 16 CRA 849-850/2011 (SC) 17 (1999) 1 SCC 113 18 Civil Appeal 5994/2004 Page 36 of 47 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 37 of 47 Negotiable Instruments Act, 1881 and not a civil suit upon a pro- note. For the purposes of maintaining a prosecution under the aforesaid section, the Complainant is to rely primarily upon the cheque in question and the presumptions envisaged under the Act. The Complainant cannot, in a prosecution under s.138 of the Negotiable Instruments Act, 1881 rely upon the receipt and the pro- note independently as the sole basis to fasten the liability upon the Accused de hors the cheque in question, especially when the Accused has managed to rebut the presumptions raised against him.
12.49.Even when the pro-note is considered independently, it is seen that even the said pro-note has reference of the cheque in question as a medium of discharge of liability under the said note. When it has already been held that the liability under the cheque in question stood extinguished; for this Court to consider as to whether the liability is made out under the pro-note is beyond the scope of the ingredients of the offence forming subject matter of the instant trial.
12.50.The testimony of CW - 2 is quite significant to the instant case. CW
- 2 has admitted himself to be a mutual friend of the Complainant as well as the Accused and knowing both of them since long (18 to 20 years). It is it is also clear that he was quite involved in the dissolution process as is evident from his clear recollection of events which happened almost 8 years prior to his examination in Court. In addition thereto, CW - 2 is also a witness to Ex. CW1/X1 as well as the person who has admittedly filled up the cheque in question as well as the pro-note in the presence of the Complainant Page 37 of 47 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 38 of 47 and the Accused.
12.51. CW - 2 has all the characteristics of an independent witness and has not been shown to have any personal or the pecuniary interest in the outcome of the trial. CW - 2 has, in the course of his examination, manifestly contradicted the case of the Complainant in material particulars regarding the date of issuance of the cheque in question, the aspect of filling up of the cheque in question.
12.52.Even if the lapses in the testimony of CW - 1 regarding the date of issuance of the cheque in question could be disregarded, the fact remains that while CW - 1 has jumped back-and-forth between 27th of September 2011 and 24th of March 2013, CW - 2 has clearly and unequivocally placed the timeline of the issuance of the cheque in question at or around 27th of September 2011, which is at direct variance to the case of the Complainant borne from the Complaint as well as the evidence affidavit. Further, even if it be assumed for the sake of argument that CW - 1 had 'mistakenly' recalled the date of issuance of the cheque in question to be around 27th of September 2011 and later corrected himself, it is quite hard to believe that even CW - 2 would commit the same 'mistake' in his testimony.
12.53.Hence, the diametrically opposite stances taken by the Complainant in his examination and the mutually contradictory testimony of the Complainant's witnesses regarding the essential aspects of the case would cast more than a shadow of doubt on the case of the Complainant and render it improbable when viewed from the Page 38 of 47 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 39 of 47 standpoint of a reasonable man. In this regard, reliance is quite well placed by the Ld. Counsel for the Accused upon the judgements of John K. Abraham Vs. Simon C. Abraham 19 and Lakshmi represented by power agent L. Vijay Jain Vs. V.N. Dhanakodi 20.
Finding: The version of the Complainant as well as the Complainant witnesses suffers from manifest irregularities and contradictions in respect of the date of issuance and handing over of the cheque in question as well as in respect of filling up of the cheque in question in other details except the signature. There is quite a lot of doubt as to how the Complainant has come into possession of the cheque in question. The aforesaid irregularities are material when it is considered that it is the defence of the Accused that a blank signed cheque was misused by the Complainant. Further, the testimony of the Complainant and the Complainant witnesses runs counter to the documents on record and the Complaint/evidence affidavit on multiple occasions, thereby, probabilizing the defence of the Accused on a preponderance of probabilities that the cheque in question was presented without any consideration.
Issue No. 3: What is the significance of the testimony of DW-1?
12.54.DW - 1 is an expert witness called upon by the Accused to obtain an opinion as to the handwriting and signature appearing on Ex. DW1/C. For the said purpose the specimen signature and 19 (2014) 2 SCC 236 20 (201) SCC Online Mad 6325 Page 39 of 47 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 40 of 47 handwriting sample of CW - 1 were taken vide Ex. DW1/B1 - B3. The said witness has rendered his opinion vide Ex. DW1/A along with DW1/D1-D4 that the disputed signature and handwriting appearing on Ex. DW1/C is that of the person who had written Ex. DW1/B1-B3. He has deposed and affirmed this opinion. The Complainant has chosen not to cross-examine the said witness in cross-examination was recorded as "Nil. Opportunity given.", thereby admitting the whole of the testimony of DW -1. In addition thereto, when CW - 1 was confronted with the said document at a subsequent stage, he has admitted the signature as well as the handwriting appearing on the said document. Under these circumstances, when the Complainant has not disputed the testimony of DW - 1 and has admitted the disputed document, such admission would even otherwise amount to waiver of proof and resultantly, Ex. DW1/C would stand as an admitted document between the parties.
Finding: As the document in question, Ex. DW1/C stands subsequently admitted by the Complainant, it is immaterial to consider the testimony of DW-1. Moreover, the testimony of DW-1 stands admitted by the Complainant. The subsequent admission of CW-1 shall amount to waiver of proof.
Page 40 of 47Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 41 of 47 Issue No. 4: Whether non-production of account books/ not showing the amount due in the ITR/balance sheet would be fatal to the case of the Complainant?
12.55.The Ld. Counsel for the Accused has submitted, albeit briefly that CW - 1 has admitted to nonproduction of account books and not showing the amount due to him in his ITR/balance sheet, which would affect the recoverability of the debt. However, the said aspect has already been settled by the decision in DK Chandel Vs. Wockhardt Ltd21 whereby it was held that the production of account books/cash books is not relevant for the purposes of establishing the ingredients of the offence u/s 138 of the NI Act. Similarly, in the case of Sheela Sharma Vs. Mahendra Pal 22 it was held that failure to reflect the amount due under the cheque in question in the ITR/balance sheet would not ipso facto make the debt recoverable. The decision of Ramdas Hanumant Palankar Vs. N. D. Venekar23 relied upon by the Ld. Counsel for the Accused is distinguishable on facts.
Finding: Negative. Failure to show the amount due under the cheque in question in in the ITR/Balance sheet or to produce account books is not fatal to the case of the Complainant.
Issue No. 4: What is the effect of the inconsistencies in the case of the 21 Crl. A No. 132/2020 22 2016 SCC OnLine Del 4696 23 2008 SCC Online Bom 1382 Page 41 of 47 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 42 of 47 Accused from the standpoint of the Complainant?
12.56.It has been pointed out by the learned counsel for the Complainant that even though the Accused has taken the defence that the Complainant had misused/stolen the cheque in question, the Accused has admitted that he has not filed any Complaint against the Complainant in this regard, even after filing of the instant case. He also submits that it is apparent from the record that the cheque in question has been dishonoured for want of funds and not on account of stop payment by the Accused. Further, it is submitted that the Accused has firstly concealed Ex. DW1/C and brought it on record at a later stage. Lastly, it is stated that the Accused, when appearing as DW-3, has admitted being liable under Ex. CW1/2 and having not discharged the said liability till date.
12.57. To examine these contentions in the right perspective, it must first be realised that the burden to establish all the ingredients of the offence and that too beyond reasonable doubt lies upon the Complainant and never shifts. Though the case of the Complainant is initially aided by the presumptions existing in his favour, ultimately the case of the Complainant must stand on its own legs. The Complainant cannot call to his aid and assistance, any inconsistencies, irregularities or infirmities in the defence to support his own case. Further, the standard of proof upon an Accused to prove his defence is not as heavy as that on the Complainant.
12.58.The Accused is not necessarily required to adduce any Page 42 of 47 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 43 of 47 oral/documentary evidence in his defence. The Accused can very well rely upon the material placed on record by the Complainant or on the cross examination of the Complainant witnesses to probabilize his defence. It is not necessary for the Accused to establish each and every line of his defence to the hilt. It is sufficient if the Accused establishes his plea on a preponderance of probabilities. In the instant case, the Accused has been able to show from the cross-examination of CW - 1, CW - 2 as well as the documentary evidence on record that the case of the Complainant is at variance to the standard of a reasonable man and is quite improbable in nature, thereby rebutting the presumption which was raised initially against the Accused.
12.59.Even if the defence of the Accused is held to be inconsistent and an adverse inference is drawn, the fact remains that the same is an inference and not evidence. An adverse inference cannot tilt the scales in favour of the Complainant when the essential ingredients of the offence have not been established by the Complainant. Moreover, the testimony of DW-3 must be read as a whole and the complexion of the case is to be made out from a consideration of all the materials on record. An affirmation of a stray suggestion given to DW-3 will not operate to establish the whole case of the Complainant de hors the other ingredients of the offence, especially when the Accused has been able to probabilise his defence on materials and evidence on record. Hence, the aforesaid contentions advanced from the side of the Complainant are found to be without Page 43 of 47 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 44 of 47 merit.
Finding: Complainant cannot rely upon the inconsistencies in the defence to buttress his own case. Further, at best an adverse inference can be drawn against the defence which would not be sufficient to support the case of the Complainant.
12.60. The upshot of the above discussion is that the Accused has been able to cast a reasonable doubt on the case of the Complainant by establishing his defence on a preponderance of probabilities. Now, the onus shifts back upon the Complainant to prove the existence of a legally enforceable debt or other liability. Considering the evidence already available on record, the Complainant has miserably failed to discharge the said onus. Accordingly the said ingredient remains unfulfilled as against the Accused.
(b) That the cheque has been presented to the bank within a period of three months from the date on which it is drawn or within the period of its validity, whichever is earlier;
12.61.This requirement is satisfied on a perusal of the cheque in question Ex. CW1/4 which bears date of 24th of March 2013 and the return memo Ex. CW1/6 which bears the date of 13th of April, 2013. The defence has led no evidence to controvert the same and hence, this ingredient stands fulfilled as against the Accused.
(c) That the cheque has been returned by the drawee bank unpaid, for the reason that 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 agreement made with that bank Page 44 of 47 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 45 of 47 12.62.s. 146 of the Negotiable Instruments Act, 1881 provides that the Court shall, on production of bank's slip or memo having therein the official mark denoting that the cheque has been dishonored, presume the fact of dishonour of such cheque, unless and until such fact is disproved. The bank return memo Ex. CW1/6 on record states that the cheque in question has been returned dishonoured for the reason "Funds Insufficient". The defence has led no evidence to controvert the same and hence, this ingredient is also fulfilled as against the Accused.
(d) That the payee or holder in due course has made a demand for payment of the said amount of money by giving a notice in writing to the drawer of the cheque within 30 days of receipt of information from the bank regarding the return of the cheque as unpaid 12.63.As regards the service of legal demand notice, the Complainant has sent the same, Ex. CW1/7 to the Accused. The original postal receipts, track reports and returned envelopes in respect of the same are already on record as Ex. CW1/8-10. The Accused has admitted receiving legal demand notice, in the statement of the Accused u/s 313 read with s.281 Cr.P.C. Further, there is also a reply sent on behalf of the Accused, i.e. Ex. CW1/11 on record. Accordingly, this ingredient is fulfilled as against the Accused, being undisputed.
(e) That the drawer of the cheque fails to make the payment of the said amount of money to the payee or holder in due course within 15 days of receipt of the said notice 12.64.In the instant case, the Accused has admitted receiving legal demand notice, in the statement of the Accused u/s 313 read with Page 45 of 47 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 46 of 47 s.281 Cr.P.C. Further, there is also a reply sent on behalf of the Accused, i.e. Ex. CW1/11 on record. It is also an admitted position that the Accused has not paid the cheque amount, a fact which the Accused himself has admitted when appearing as DW-1. Hence, this ingredient stands fulfilled as against the Accused, being undisputed.
Decision
13. At this stage, it is deemed fit to draw curtains on this litigation spanning 3346 days (9 years, 1 month and 29 days). Needless to say, the instant case is one of the oldest cases pending before this Court. Before proceeding to give the final verdict, this Court deems it fit to bring on record its gratitude to both Ld. Counsel for their able assistance throughout the trial and especially during the COVID-19 period whereby they have acted with diligence and promptitude in ensuring compliance by their respective clients to the orders of this Court. They have also promptly filed written arguments bearing upon the main case as well as the pending application u/s 340 Cr.P.C.
13.1 As all the ingredients of the offence are not cumulatively satisfied against the Accused, the Accused Asif Khan is hereby Acquitted of the offence u/s 138 of the Negotiable Instruments Act, 1881.
13.2 The application u/s 340 Cr.P.C. filed on behalf of the Accused is dismissed.
13.3 This judgement contains an addendum (Annexure A) i.e., a Page 46 of 47 Visit ecourts.gov.in for updates or download mobile app "eCourts Services" from Android or iOS CC No. 525204/2016 CNR. DLCT020031152013 Mohd. Sadiq V/s Asif Khan Page 47 of 47 separate decision on the application u/s 340 Cr.P.C. filed on behalf of the Accused and the same is to treated as part and parcel of this judgement and be read accordingly.
VISVESH Digitally signed by VISVESH
Date: 2022.07.30 17:40:44 +05'30'
ANNOUNCED IN OPEN (VISVESH)
COURT ON 30.07.2022 MM, NI ACT-06, CENTRAL
TIS HAZARI COURTS,
DELHI
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