Delhi District Court
Anand Prakash vs Prithipal Singh Chawla on 27 November, 2024
IN THE COURT OF MS. DIVYA GUPTA,
CIVIL JUDGE-08, CENTRAL, TIS HAZARI COURTS, DELHI
In case of:-
Anand Prakash
S/o Sh. Nanu Ram
At 2488/7-A, Vidyanand Market,
Teliwara Chowk, Sadar Bazar,
Delhi-110006 ...Complainant
Versus
Sh. Prithipal Singh Chawla @
Prithpal Singh Chawla
S/o Sh. D.S. Chawla
R/o AT 1695, Ground Floor,
Arya Samaj Road, Naiwala
Opposite Sat Brawa School
Karol Bagh, New Delhi
Also at:
H. No. 1101, PL-10A,
Park Royal Apartment
Dwarka, New Delhi-110075 ...Accused
JUDGMENT
a) Sl. No. of the case : 517290/2016
b) CNR no. : DLCT02- 002211-2014
c) Date of institution of the case : 28.11.2014
d) Offence complained of : 138 NI Act
e) Plea of the accused : Pleaded not guilty
f) Arguments heard on : 27.09.2024
g) Final order : CONVICTION
h) Date of Judgment : 27.11.2024
CC No. 517290/2016 Anand Prakash Vs Prithipal Singh Chawla @ Prithpal Singh Chawla 1/15 BRIEF STATEMENT OF REASONS FOR DECISION OF THE CASE:-
FACTUAL MATRIX:
1. This is a complaint case filed under Section 138 of Negotiable Instrument Act, 1881 (hereinafter referred to as "NI Act") by Sh.
Anand Prakash (complainant) against Sh. Prithi Pal Singh Chawla (accused) in respect of one cheque bearing no. 086404 dated 16.09.2010 for Rs. 2, 50,000/-, drawn on Punjab National Bank, Branch New Rajinder Nagar, New Delhi-110060 (hereinafter called "the cheque in question"). The facts of the case, as alleged by the complainant, are as follows:
a) That in the second week of August, 2014 accused being old acquaintance and having friendly relations approached the complainant seeking loan of Rs. 2,50,000/-. Thereafter, on 20/08/2014, the complainant advanced sum of Rs. 2,50,000/- to the accused in cash towards interest free friendly loan which had to be returned within 20 days and in consequence an agreement / acknowledgment was also executed by the accused. After expiry of 20 days when complainant approached the accused and demanded the amount the accused issued the cheque in question in discharge of his liability. However, the said cheque was dishonoured for reason "funds insufficient" vide returning memo dated 17.09.2014.
b) Thereafter, despite due service of legal demand notice dated 13.10.2014, accused failed to make the payment and hence, the present complaint.
CC No. 517290/2016 Anand Prakash Vs Prithipal Singh Chawla @ Prithpal Singh Chawla 2/15 PROCEEDINGS BEFORE THE COURT:
2. Pre-summoning evidence was led by the complainant. On prima facie case being made out against the accused, cognizance was taken, accused was summoned for an offence punishable under Section 138 of the Act.
3. Accused appeared appearance. The particulars of the offence and substance of accusation as per provisions of Section 251 CrPC was explained to accused on 20.11.2017 to which accused pleaded not guilty and claimed trial. The accused admitted that cheque in question belongs to him and bears his signatures. However, he denied filling of any other particulars on the said cheque. Further accused admitted receiving of legal demand notice. In his defence recorded on the same day, accused stated that "I owe no liability towards the complainant. Complainant assists people in getting loans and on pretext of getting procured a loan, the complainant got blank signed cheque from me and also took my signatures on some blank papers for same purpose. Complainant was not able to get any loan for me. I demanded my papers and cheque back. However, he stated that he has misplaced them and later on he misused the papers and cheque in question."
4. Thereafter, complainant led his evidence. Complainant was examined as CW1 and adopted his pre-summoning evidence as post summoning evidence Ex. CW1/A. He relied upon the following documents:-
i) Ex. CW1/1(OSR): Copy of receipt / acknowledgment.
CC No. 517290/2016 Anand Prakash Vs Prithipal Singh Chawla @ Prithpal Singh Chawla 3/15
ii) Ex. CW1/2: Original cheque no. 086404
iii) Ex. CW1/3: Return memo dated 17.09.2014
iv) Ex. CW1/4: Legal notice dated 13.10.2014
v) Ex. CW1/5 to Ex. CW1/8: postal & courier receipts
vi) Ex. CW1/9 & Ex. CW1/10: Tracking report
5. CW1 in his affidavit reiterated the contents of complaint.
CW1 was cross-examined by the Ld. Counsel for the accused on 27.02.2019 & 28.08.2019 and was discharged and CE was closed on the same date.
6. Thereafter statement of accused was recorded u/s 313 Cr. PC on 19.12.2019 wherein all the incriminating evidence was put to the accused. The accused admitted his signature on the cheque in question. However, denied filling of any particulars on the cheque. Accused admitted receiving of legal notice from the complainant. He reiterated his defence stating that "The complainant does not have the capacity to lend such a huge amount as loan. The complainant works as loan facilitator and obtains loans from various sources. Cheque in question was given as security to the complainant towards processing for procuring the said loan. However, the complainant was not able to get any loan sanctioned in my favour. I asked the complainant to return my cheque. He informed me that the cheque has been misplaced."
7. Thereafter accused led defence evidence and got himself examined as DW1. He was cross-examined by Ld. Counsel for CC No. 517290/2016 Anand Prakash Vs Prithipal Singh Chawla @ Prithpal Singh Chawla 4/15 complainant and discharged on 23/02/2023 and DE was closed on the same day and matter was fixed for final arguments.
8. Final arguments were advanced by both the parties. I have heard counsel for both the parties, perused the record and have gone through the relevant provisions of the law.
INGREDIENTS OF THE OFFENCE AND DISCUSSION:
9. At this stage, it would be apposite to discuss the relevant provisions of law in order to ascertain the legal standard required to be met by both the parties. In order to establish an offence under Section 138 of Negotiable Instrument Act, the complainant must prove the following ingredients:-
First Ingredient: The cheque was drawn by a person on an account maintained by him for payment of money and the same is presented for payment within a period of 3 months from the date on which it is drawn or within the period of its validity;
Second Ingredient: The cheque was drawn by the drawer for discharge of any legally enforceable debt or other liability; Third Ingredient: The cheque was returned unpaid by the bank due to either insufficiency of funds in the account to honour the cheque or that it exceeds the amount arranged to be paid from that account on an agreement made with that bank;
Fourth Ingredient: A demand of the said amount has been made by the payee or holder in due course of the cheque by a notice in writing given to the drawer within CC No. 517290/2016 Anand Prakash Vs Prithipal Singh Chawla @ Prithpal Singh Chawla 5/15 thirty days of the receipt of information of the dishonour of cheque from the bank; Fifth Ingredient: The drawer fails to make payment of the said amount of money within fifteen days from the date of receipt of notice.
APPRECIATION OF EVIDENCE:
10. The accused can only be held guilty of the offence under Section 138 NI Act if all of the above-mentioned ingredients are proved by the complainant-
i) There is no dispute qua the fact that the cheque in question (Ex. CW1/2) belongs to the account maintained by him and the same was presented for encashment within its validity period. Thus, first ingredient stands proved.
ii) It is also not disputed that the cheque in question was dishon-
oured due to "funds insufficient". Thus, third ingredient stands proved.
iii) With respect to the fourth ingredient, the accused has admitted receiving the legal notice. Thus, the fourth ingredient also stands proved.
iv) There is no dispute either with respect to fifth ingredient. As such, the first, third, fourth and fifth ingredients of the offence under section 138 NI Act stands proved against the accused.
11. Thus, the only remaining ingredient of the offence under Section 138 NI Act and which is the main bone of contention between both the parties is that whether there was any legally CC No. 517290/2016 Anand Prakash Vs Prithipal Singh Chawla @ Prithpal Singh Chawla 6/15 enforceable debt or liability of the accused towards the complainant. In the present case, the issuance of the cheque in question is not denied and the accused has admitted his signature on the cheque. As per the scheme of the NI Act, once the accused admits signature on the cheque in question, certain presumptions are drawn in favour of the complainant, which result in shifting of onus. Section 118(a) of the NI Act lays down the presumption that every negotiable instrument was made or drawn for consideration. Another presumption is enumerated in Section 139 of NI Act. This provision lays down the presumption that the holder of the cheque received it for the discharge, in whole or part, of any debt or other liability.
12. The combined effect of these two provisions is a presumption that the cheque was drawn for consideration and given by the accused for the discharge of debt or other liability. Both the sections use the expression "shall", which makes it imperative for the court to raise the presumptions, once the foundational facts required for the same are proved. Reliance is placed upon the judgment of the Hon'ble Supreme Court, Hiten P. Dalal vs. Bratindranath Banerjee (2001) 6 SCC 16.
13. Further, it has been held by a three-judge bench of the Hon'ble Apex Court in the case of Rangappa vs. Sri Mohan (2010) 11 SCC 441 that the presumption contemplated under Section 139 of NI Act includes the presumption of existence of a legally enforceable debt. Once the presumption is raised, it is for the accused to rebut the same by establishing a probable defence. The principles pertaining to CC No. 517290/2016 Anand Prakash Vs Prithipal Singh Chawla @ Prithpal Singh Chawla 7/15 the presumptions and the onus of proof were recently summarized by the Hon'ble Apex Court in Basalingappa vs. Mudibasappa (2019) 5 SCC418 as under:
"25. We having noticed the ratio laid down by this Court in the above cases on Section 118(a) and 139, we now summarize the principles enumerated by this Court in the following manner:
25.1 Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability. 25.2 The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
25.3 To rebut the presumption, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely. 25.4 That it is not necessary for the accused to come in the witness box in support of his defence. Section 139 imposed an evidentiary burden and not a persuasive burden. 25.5 It is not necessary for the accused to come in the witness box to support his defence."
CC No. 517290/2016 Anand Prakash Vs Prithipal Singh Chawla @ Prithpal Singh Chawla 8/15
14. Section 139 NI Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. The reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139 NI Act, 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. 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.
15. As discussed herein above, under Section 139 NI Act strong rebuttable presumptions in favor of the complainant arises but same can be rebutted by the accused by way of credible defence.
DEFENCE OF THE ACCUSED:
16. In the present matter the accused has taken a defence that the complainant had assured to arrange loan amount for me and at that time accused had given the blank signed cheque in question to the complainant for security purpose. However, no loan was advanced and further that complainant had taken his signatures on blank paper same has been misused by the complainant.
CC No. 517290/2016 Anand Prakash Vs Prithipal Singh Chawla @ Prithpal Singh Chawla 9/15 ARGUMENTS BY BOTH THE PARTIES:
17. It is argued by the Ld. Counsel for the accused that no sum was advanced as assured. Further that complainant has not proved his financial capacity to advance huge sum of Rs.2.5 lacs. Further that cheque in question was a blank signed security cheque and hence no legally recoverable liability arose. Further that CW1/1 is forged and false. Further that there was no legally enforceable debt equivalent to cheque amount against the accused as on the date when cheque in question were presented for encashment and hence, prayed for acquittal.
18. Per contra it was argued by the Ld. Counsel for the complainant that the loan of Rs. 2.5 lacs was given to the accused. Further that accused has admitted his signatures on cheque in question and on pronote. Further that other than bare denial accused has not produced any evidence on record to prove his innocence. Further that accused failed to show that he filed any police complaint against the alleged misuse of the cheque in question and against alleged misuse of blank signed papers. Further that accused has taken contradictory stands. Thus, there is nothing on record to rebut the presumption raised against the accused and prayed for conviction.
COURT'S OBSERVATIONS:
19. In the present matter, the case of complainant is that on 20/08/2014 complainant advanced sum of Rs. 2, 50,000/- to the accused in cash towards interest free friendly loan which had to be returned within 20 days and in consequence an agreement / CC No. 517290/2016 Anand Prakash Vs Prithipal Singh Chawla @ Prithpal Singh Chawla 10/15 acknowledgment was also executed by the accused and accused issued the cheque in question (Ex. CW1/2) for Rs. 2.5 lacs in discharge of his liability. Same fact was reiterated by the complainant in his evidence by way of an affidavit which is Ex. CW1/A. To prove his case, complainant has filed on record a copy of receipt dated 20/08/2014, which is Ex. CW1/1(OSR).
20. On the other hand, accused has admitted his signatures on the cheque in question (Ex. CW1/2). The NI Act provides for two presumptions, one under Section 118 of the Act, which directs that it shall be presumed, until the contrary is proved, that every negotiable instrument was made or drawn for consideration. Further, under Section 139, which stipulates that unless the contrary is proved, it shall be presumed that the holder of the cheque received the cheque for the discharge of, whole or part of any debt or liability. It is a settled law that once accused admits his signatures on the cheque, the above-mentioned presumptions are raised in favor of the complainant and burden falls on the accused to rebut the said presumptions.
21. In the present case, accused has admitted his signatures on the cheque in question, which is Ex. CW1/2. However accused is taking a defence that complainant did not advance any loan as assured and has misused his cheque and that complainant had taken his signatures on blank paper and that CW1/1 is false and fabricated.
22. Firstly, the defense of cheque being a security cheque is not sustainable in view of the various pronouncements of the higher CC No. 517290/2016 Anand Prakash Vs Prithipal Singh Chawla @ Prithpal Singh Chawla 11/15 courts, more recently in Sripati Singh vs State of Jharkhand , decided on 28.10.2021 by Hon'ble Supreme Court. Thus, even if the cheque was given as security, the accused would be guilty of the offence under Section 138 NI if he/she was liable to pay the cheque amount as on the date of the presentation of the cheque in the bank.
23. The accused has further taken a defence of financial capacity that complainant has not been able to prove his financial capacity to advance huge sum of Rs. 2.5 lakhs and further that the same has not been disclosed in ITR. In case titled as Tedhi Singh vs. Narayan Dass Mahant SLP (crl) No. 1963 of 2019 , the Hon'ble Supreme Court has observed that, "the proceedings under Section 138 of the N. I. Act is not a civil suit. At the time, when the complainant gives his evidence, unless a case is set up in the reply notice to the statutory notice sent, that the complainant did not have the wherewithal, it cannot be expected of the complainant to initially lead evidence to show that he had the financial capacity."
24. Further to prove his defense, accused got himself examined as DW1 who during cross-examination deposed that Ex.CW1/1(OSR) does not bear his signature or thumb impression. Onus to prove the same was on the accused. The accused has failed to show that what stopped him from getting the same examined from the expert to prove his defence. Further the accused had admitted his signatures on the cheque in question (Ex.CW1/2) during notice framing and while statement u/s 313 CrPC. However, the accused changed his stand and deposed during cross-examination that "It is wrong to suggest that CC No. 517290/2016 Anand Prakash Vs Prithipal Singh Chawla @ Prithpal Singh Chawla 12/15 Ex. CW1/2 bears my signature." This contradictory stand raised by the accused raises cloud over the veracity of the accused/DW1.
25. Further accused has taken a defence that the cheque in question and acknowledgment/receipt has been misused by the complainant. Accused has failed to show that he ever demanded his signed cheque and signed blank papers back from the complainant by any legal demand notice or that he had filed any police complainant against the alleged misuse of cheque in question and signed blank papers. Though DW1/accused has stated in his cross-examination that he had filed a complaint against the complainant to which NCR has been registered, however, accused has failed to prove the same by any oral or documentary evidence and same is simple assertion of fact.
26. Here, it would be apposite to refer to the judgment of Hon'ble Supreme Court in Kumar Exports vs. Sharma Carpets - (2009) 2 SCC 513, wherein it was held that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. 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.
CC No. 517290/2016 Anand Prakash Vs Prithipal Singh Chawla @ Prithpal Singh Chawla 13/15
27. In the present case, apart from bald assertions, there is nothing on record to show that the accused is not liable to pay the cheque amount as alleged by the complainant. From the foregoing discussions, it is clear that the accused has not led any such cogent evidence so as to rebut presumption of existence of a legally enforceable debt in favor of the complainant. There is nothing coming out in the cross-examination of the complainant that would support the case of the accused. As such, the court finds that the accused has not been able to prove any probable defence and has failed to rebut the presumption raised under Section 118/139 of the NI Act, and thus, the second ingredient of the offence under Section 138 NI Act stands proved.
28. Therefore, the complainant has been able to prove all the ingredients of the offence under Section 138 NI Act beyond reasonable doubt. It is evident that the complainant has been able to prove that the cheque in question, i.e. cheque bearing no. 086404 dated 16.09.2010 for Rs. 2, 50,000/-, drawn on Punjab National Bank, Branch New Rajinder Nagar, New Delhi-110060, which is Ex. CW1/2 was issued in discharge of legally recoverable liability owed to the complainant by the accused. The complainant has been able to prove his case beyond reasonable doubt.
FINAL DECISION:
29. Thus, Accused Sh. Prithipal Singh Chauhan is convicted for the offence punishable under Section 138 of the Negotiable CC No. 517290/2016 Anand Prakash Vs Prithipal Singh Chawla @ Prithpal Singh Chawla 14/15 Instruments Act, 1881. Let the accused be heard separately on quantum of sentence.
30. A copy of the judgment be given free of cost to the convict.
Digitally
signed by
DIVYA
DIVYA GUPTA
GUPTA Date:
2024.11.27
05:28:43
+0530
ANNOUNCED IN OPEN COURT (Divya Gupta)
Today i.e. 27.11.2024 Civil Judge-08 (Central)/Tis Hazari Courts/Delhi Present judgment consists of 15 pages and each page bears my initials.
Digitally
signed by
DIVYA
DIVYA GUPTA
GUPTA Date:
2024.11.27
05:28:50
+0530
(Divya Gupta)
Civil Judge-08 (Central)/Tis Hazari
Courts/Delhi
27.11.2024
The present judgment was reserved vide order dated 21.10.2024 passed in the Court of Ld. MM-05 (NI Act), Central District, Delhi and the same has been in this Court in terms of Note no.25 of the Order bearing no.38/DHC/Gaz-IIB/G-7/VI.E.2(a)/2024 dated 25.10.2024 of the Hon'ble Delhi High Court, regarding Transfers & Postings of the Hon'ble High Court of Delhi. Digitally signed by DIVYA DIVYA GUPTA GUPTA Date:
2024.11.27 05:28:57 +0530 (Divya Gupta) Civil Judge-08 (Central)/Tis Hazari Courts/Delhi 27.11.2024 CC No. 517290/2016 Anand Prakash Vs Prithipal Singh Chawla @ Prithpal Singh Chawla 15/15