Delhi District Court
Page No. 1 To 11 S. K. Jain vs . Vijay Kalra on 4 January, 2012
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IN THE COURT OF SHRI RAKESH KUMAR RAMPURI,
METROPOLITAN MAGISTRATE (NI ACT) KARKARDOOMA COURTS:
SHAHDARA, DELHI.
JUDGMENT U/S 355 Cr.PC
a. Serial No. of the case : PP251/05
b. Date of the commission of the offence : 27/05/2005
c. Name of the complainant : Sh. S. K. Jain
d. Name of accused person and his parentage: Sh. Vijay Kalra,
and residence Proprietor M/s V. K. Rubber
Industries, 172, Hakikat Nagar, Delhi09.
e. Offence complained of : Dishonored of
cheques for
stop payment and
funds insufficient.
f. Plea of the accused and his examination (if any): Not guilty
Because accused took
loan of Rs. 1.5 lakhs and
returned the same to the
complainant and complainant
misused the cheques in question.
g. Final Order : Held not guilty.
Acquitted.
h. Date of such order : 04.01.2012.
Page No. 1 To 11 S. K. Jain Vs. Vijay Kalra
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i. Brief reasons for decision:
1.For a proper appreciation of the issues pertaining to section 138 of Negotiable Instruments Act, it would be necessary to examine the relevant legal provisions and object and reason for which those provisions were brought into existence. The first amendment inserted chapter XVII of NI Act by Banking Public Financial Institutions and Negotiable Instruments Law (Amendment) Act 1988 comprising section 138 to 143 made for the first time in the legislative history of the country, the issuance of the cheque in discharge of any debt or liability in case that was not honoured by the banker of drawer due to insufficiency of the funds in the account, a penal offence for drawer making him liable to punishment with imprisonment up to two years. (After 2nd amendment by NI Act 2002 with effect from February 2003) or with fine that may be extended to twice the amount of the cheque or both.
2. A criminal prosecution would neither mean for recovery of money nor it would be for enforcement of any security. Section 138 of NI Act is a penal provision which entails a conviction and sentence on the proof of guilt in a duly conducted criminal proceedings for bringing the offender to the penal liability. One must always keep in mind the basic tenant of criminal jurisprudence as to the penal provision has to be interpreted strictly so that no one can ingeniously or guilefully or strategically be prosecuted and punished.
3. Following ingredients have to be proved for constituting an offence u/s 138 of NI Act.
Page No. 2 To 11 S. K. Jain Vs. Vijay Kalra
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(a) Unpaid cheque must have been drawn from a live account of drawer
at the time of issuance of cheque in question.
(b) The unpaid cheque in question must have been issued in discharge
of a debt or other legally enforceable liability, in whole or in part.
(c) The cheque in question was presented to the bank within a period of 6 months from the date of issuance of cheque or within the period of its validity.
(d) The cheque is returned by the bank of drawer unpaid because of insufficiency of the funds in the account of the accused or it exceeds the amount arrangement made to be paid from that account by an agreement made with the that bank or cheque is return with endorsement account closed.
(e) The payee or holder in due course of such cheque should have given a written legal demand notice to the drawer of the cheque within 30 days of the receipt of the information by the complainant from the banker of the accused regarding of the return of the cheque unpaid.
(f) The drawer of such cheque should have failed to make a payment of the such amount of the money to the holder of the cheque within 15 days of the receipt of the said legal demand notice.
(g) Any written complaint u/s 138 of NI Act should have been made before Ld. MM concerned within one month from the date on which cause of action raised u/s 138 (c) of NI Act unless condonation of delay has been granted by the court concerned.
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4. Unlike cardinal principle of general criminal jurisprudence regarding presumption of innocence of accused till conviction on merit by the competent court of law and burden of proof lie on the prosecution to prove guilt beyond all reasonable doubts, section 118, 139 and 140 of NI Act relieved and rescued the complainant from shouldering the initial onus of proof by providing for legal presumption as to consideration and genuineness in favour of cheque holder.
5. In M/s. Kumar Exports Vs. Sharma Carpets2009(1) R.CR.(Crl) 478, Hon'ble Supreme Court has explained in detail the scope of Section 118 and Section 139 N.I. Act. The relevant observations made therein are as follows: The use of the phrase "until the contrary is proved" in Section 118 of the Act and use of the words "unless the contrary is proved" in Section 139 of the Act read with definitions of "may presume" and "shall presume" as given in Section 4 of the Evidence Act, make it at once clear that presumptions to be raised under both the provisions are rebuttable. 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 nonexistence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumptions an Page No. 4 To 11 S. K. Jain Vs. Vijay Kalra 5 accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not insist in every case that the accused should disprove the non existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear 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 nonexistence 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 Page No. 5 To 11 S. K. Jain Vs. Vijay Kalra 6 nonexistence 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 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."
6. Thus, it is settled position that the accused has to rebut the presumption u/s 139 of NI Act, with the standard of proof of the preponderance of probabilities. Thereafter accused may be able to raise a probable defence/plea which creates doubt about the existence of consideration in form of debt or liability legally enforceable by leading direct evidence or even circumstantial ones. Accused may discharge his burden on the basis of materials already brought on the record. In that case burden of proof shift again on the complainant who will be obliged to prove the same as matter of fact. Accordingly presumption of innocence and doctrine of reverse burden introduce by section 139 and proviso to section 138 of NI Act should be delicately balanced.
7. The objects and reason of amending act 2002 were to encourage the culture of use of cheque and enhancing of credibility of Negotiable Instruments in globalized and complex economic activities and order of the 21 Century by providing enhanced punishment in case of dishonouring of the cheque with Page No. 6 To 11 S. K. Jain Vs. Vijay Kalra 7 simplified procedure for the court to deal with such cases expeditiously.
8. Having visited the relevant provision of law, its objects, legal principles, and authorities we may embark to examine the case in hand on the basis of its factual matrix.
9. As per version of complaint, accused is known to complainant and his wife for last 10 years. In the month of September 2002 accused allegedly approached complainant for a loan of Rs. 31 Lakhs as his factory was on the verge of closure. Accordingly, complainant and his wife advanced accused a loan of Rs. 31 lakhs for his business purposes with condition that accused will return the same with interest after one year of advancing of alleged loan in question. It is case of complainant that after one year complainant demanded back his loan amount from the accused to which accused pleaded for some time as his business was not picking up. It is also case of complainant that believing of the words of accused complainant extended accused time of one year for paying back the loan amount. It is further case of complainant that in January 2005 accused issued a cheque bearing number 593875, dt. 10.01.2005 for sum of Rs. 10 Lakhs towards the partial discharge of legal liability. It is case of complainant that in February 2005 accused issued another post dated cheque bearing number 118051, dt. 03.03.2005 for Rs. 4,35,000/. It is also case of complainant that cheque bearing number 593875, Ex. CW1/A was returned unpaid with remarks stop payment by drawer vide cheque returning memo Ex. CW1/D, dt. 21.04.2005 and another cheque bearing number 118051 was Page No. 7 To 11 S. K. Jain Vs. Vijay Kalra 8 returned unpaid vide cheque return memo dt. 21.04.2005, Ex. CW1/E with remarks Funds Insufficient. It is further case of complainant that accused did not pay the cheques amount within stipulated time after receiving of legal demand notice Ex. CW1/F, dt. 11.05.2005 Hence the present complaint case.
10. On the other hand accused raised pleas that he had taken loan of Rs. 1.5 lakhs from the complainant through cheque and he had given 34 signed blank cheques to the complainant as security cheques. It is further pleaded by the accused that he repaid entire aforesaid loan amount through another cheque which was acknowledged through receipt Ex. DW1/B by the wife of complainant. However, accused also pleaded that despite request complainant did not return cheques in question to him on assurance that same duly return to him later on. Accused admitted that he had received the notice. (See the statement of accused u/s 313 Cr.P.C read with 281 Cr.P.C).
11. Complainant admitted in his complaint that earlier he was in business of finance and running a firm by the name of M/s Umang Fincap. Pvt. Ltd.. During cross examination CW1 (complainant) stated that he had been residing at Pitam Pura for 1996 to 2001 and during that period he was doing finance business. Complainant further stated during his cross examination that from the period 2002 to 2008 his source of income was private job and he was receiving a salary less than Rs. 10,000/ during aforesaid period. Complainant also stated during his cross examination that he had four children and his wife during cross examination as CW1 in another connected case bearing number PP252//05 Page No. 8 To 11 S. K. Jain Vs. Vijay Kalra 9 admitted that she is just house wife. Complainant during cross examination stated that loan amount in question had not been shown by him in his relevant income tax return. Complainant further stated that no written document was executed at the time of advancement of loan in question. Complainant further stated that he has no document to show that he had sold a house situated at Rohini for a consideration of Rs. 22 Lakhs. Complainant admitted that another complaint case u/s 138 of NI Act had also been filed by him against Sunil Kalra and aforesaid amount was also not shown by him in his relevant income tax return. Complainant further admitted during his cross examination that he had filed a suit for recovery of Rs. 4,15,000/ against Anil Kalra which has already been dismissed. It was suggested by the counsel for accused during cross examination of complainant that accused took a loan of Rs. 1,50,000/ from Umang Fincap. Pvt. Ltd. during year 1999 for that amount complainant kept alleged cheques as security and accused had already returned aforesaid amount to the complainant. Here, Ld. counsel for complainant contends that bank witnesses stated that cheque book Ex. CW2/A comprising cheques bearing number 593801 to 593900 including cheque in question bearing number 593875 Ex. CW1/A was issued on 13.07.2000 and another cheque book Ex. CW2/b bearing number 118001 to 118051 including cheque in question bearing number 118051 was issued on 08.08.2000. Accordingly, ld. counsel for complainant submits that this all goes to prove the falsehood of the defence of accused as cheque in question was not in existence in year 1997 or year 1999 in which Page No. 9 To 11 S. K. Jain Vs. Vijay Kalra 10 accused allegedly given as security cheques.
12. Ld. counsel for accused submits that complainant and his wife had allegedly advanced total amount of Rs. 40,15,000/ (Rs. 31 Lakh as per version of complaint of this case + 5 lakh as per case titled Sh. S. K. Jain Vs. Sunil Kalra + Rs. 4,15,000/ as per civil suit for recovery against Sh. Anil Kalra) during the period 2002 to 2004 despite admitted factum that complainant was drawing a salary less than of Rs. 10,000/ during relevant period. It is admitted fact that complainant was dealing in the business of finance and running a private limited company who is not supposed to give such huge amount of money in question to the tune of Rs. 31 Lakhs that too in cash without executing any agreement or securing any formal documentary proof. Moreover, counsel for accused submitted that it is important to take notice of the guidelines of the Reserve bank India according to which any transaction which is more than Rs. 20,000/ can not be conducted in cash. Complainant also failed to explain his conduct in not insisting any execution of document even after lapse of one year from the date of advancement of huge loan in question.
13. Court is mindful of the legal proposition that once accused managed to probablies his defence with standard of balance of probability, complainant is obliged to prove his case beyond reasonable doubt. Court is also aware of the legal position that the case of complainant has to stand on its leg and can not be allowed to prove the same by taking benefit of lacuna in the defence. Moreover, as per basic tenant of criminal jurisprudence benefit of any reasonable doubt Page No. 10 To 11 S. K. Jain Vs. Vijay Kalra 11 must go in favour of accused.
14. Having gone through the cross examination of CWs and DW and documents, the court is of opinion that accused had created reasonable/probable doubts over the genuineness of the version of the complainant, thus it was the duty of the complainant to prove his case beyond reasonable doubts once initial burden of rebuttal of legal presumption discharged by accused with standard of balance of probabilities.
15. In view of above discussion of the facts and circumstances of the case and applicable legal provisions and principles this court is of considered opinion that accused has probablized his defence with standard of balance of probability by creating probable doubt over existence of legally enforceable liability towards complainant in discharge of which the alleged cheques in question were allegedly issued. Accordingly accused stands acquitted.
ANNOUNCED IN THE OPEN COURT (Rakesh Kumar Rampuri)
ON 04th Day of January, 2012 MM, NI Act, (East)
KKD Courts, Delhi.
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