Delhi District Court
Kalrav Aggarwal vs . Maharam on 31 May, 2023
IN THE COURT OF SHRI AJEET NARAYAN, M.M-02, SHAHDARA DISTRICT,
KKD COURTS, DELHI
CT. No.: 5495/18
U/s: 138 N. I. Act
P.S: Harsh Vihar
Kalrav Aggarwal Vs. Maharam
JUDGMENT
1. Sl. No. of the case : 5495/18
2. Date of institution of the case : 12.02.2018
3. Name of complainant : Kalrav Agarwal
S/o Sh. Satish Chand Aggarwal
R/o H. No. A-17, Radha Vihar,
Saboli Village, Delhi
4. Name of accused, parentage : Maharam,
S/o Late Sh. Surjan,
R/o E-8/13, Gali No. 8,
33 Ft. Road, Dayalpur,
Delhi-110094.
5. Offence complained of
or proved : 138 N. I. Act
6. Plea of accused : Accused pleaded not guilty
7. Final order : Conviction
8. Date on which order was
reserved : 23.05.2023
9. Date of pronouncement : 31.05.2023
CC No 5495/18 Kalrav Aggarwal v Maharam Page 1 of 21
BRIEF REASONS FOR THE DECISION OF THE CASE
Factual Background of the case
1. Briefly stated facts of this case as per complaint are that the accused approached to complainant on 15.02.2017 and asked for a friendly loan of Rs.3,50,000/- as personal need for business. The complainant has given Rs. Rs.3,50,000/- to accused as friendly loan. Accused assured the complainant that the said amount shall be refund within six months. After six months, complainant approached to the accused and asked for payment of loan, but accused failed to refund the said amount. Accused asked to complainant that he will pay the same till November 2017.
On 11.12.2017, complainant reached at the house of accused and asked to friendly loan amount. The accused has issued a cheque bearing no. 627671 dated 11.12.2017 in the sum of Rs.3,50,000/- drawn on Delhi State Co- operative Bank Ltd., Branch Bhajanpura, Delhi in favour of the complainant in discharge of his liabilities. It is further alleged that the complainant presented the above-mentioned cheque with his bank, but the said cheque was returned dishonored with remarks "Funds Insufficient" vide return memo dated 12.12.2012.
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It is further alleged that thereafter, complainant served a legal demand notice dated 05.01.2018 to the accused, but the accused has not turned up to make the payment. So, present case was filed under Section 138 Negotiable Instruments Act.
Proceedings Before Court
2. On the basis of pre-summoning evidence, accused was summoned for the offence u/s 138 Negotiable Instrument Act vide order dated 12.02.2018. Accused put his appearance on 24.05.2019 with counsel, and thereafter, a notice under Section 251 Cr.P.C was framed against him on 22-10-2021, by this court to which he pleaded not guilty and claimed trial. Plea of defence of accused has been recorded as per which he states that the cheque in question bears his signature and rest of the particulars of cheque was not filled by him. He does not know the complainant. He has handed over the cheque to one Sanjay Goyal as blank security cheque in consideration for exchanging the old currency in the period of demonetization. He does not know how the cheque in question have come into possession of complainant. His cheque has been misused. He has no liability towards the complainant. He has received legal demand notice.
The complainant has relied upon the documents, legal Notice dated CC No 5495/18 Kalrav Aggarwal v Maharam Page 3 of 21 05.01.2018 which is Ex.CW1/1, postal receipt is Ex.CW1/2, delivery report is Ex.CW1/3, the cheque bearing no. 627671 dated 11.12.2017, which is Ex.CW1/4, bank return memo dated 12.12.2017 is Ex.CW1/5. Thereafter, complainant was duly cross-examined by learned counsel for accused. Thereafter, CE was closed, on 02.02.2023.
3. In statement of accused recorded on 02.03.2023, accused stated that the cheque in question bears his signature. He has not filled the other particulars of the cheque. He has handed over the cheque in question to one Sanjay Goel as blank security cheque in consideration for exchanging the old currency in the period of demonetization. He has not taken any loan from complain Kalrav Aggarwal, he does not know the complainant. He does not know how the cheque in question has come into possession of complainant. He has received a legal notice. He does not have any liability towards the complainant.
At the time of DE, accused has submitted that he does not wish to lead DE. Hence DE was closed on 02.03.2023. Afterwards, final arguments were heard and after hearing the arguments, trial was concluded.
4. I have heard counsel for the parties, perused the record and have gone through relevant provisions of the law.
CC No 5495/18 Kalrav Aggarwal v Maharam Page 4 of 21 Findings
5. Before appreciating the facts of the case in detail for the purpose of decision, let relevant position of law be discussed first. Now, Section 138 Negotiable Instrument Act provides as under:
Section 138.- Dishonour of cheque for insufficiency, etc., of funds in the account.- Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall apply unless--
(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;CC No 5495/18 Kalrav Aggarwal v Maharam Page 5 of 21
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
Explanation -- for the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability. It is well settled position of law that to constitute an offence under S.138 N.I. Act, the following ingredients are required to be fulfilled:
(1) drawing of the cheque by a person on an account maintained by him with a banker, for payment to another person from out of that account for discharge in whole/part any debt or liability;
(2) Cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier;
(3) returning the cheque unpaid by the drawee bank for want of sufficient funds to the credit of the drawer or any arrangement with the banker to pay the sum covered by the cheque, CC No 5495/18 Kalrav Aggarwal v Maharam Page 6 of 21 (4) giving notice in writing to the drawer of the cheque within 30 days of the receipt of information by the payee from the bank regarding the return of the cheque as unpaid demanding payment of the cheque amount, (5) failure of the drawer to make payment to the payee or the holder in due course of the cheque, of the amount covered by the cheque within 15 days of the receipt of the notice.
Being cumulative, it is only when all the aforementioned ingredients are satisfied that the person who had drawn the cheque can be deemed to have committed an offence under Section 138 of the N I Act.
6. The Act raises two presumptions in favour of the holder of the cheque i.e., Complainant in the present case; firstly, in regard to the passing of consideration as contained in Section 118 (a) therein and, secondly, a presumption under Section 139, that the holder of cheque receiving the same of the nature referred to in Section 138 for discharge, in whole or in part, of any debt or other liability.
Analysing all the concerned provisions of law and various pronouncements in this regard, the Hon'ble Apex Court in Basalingappa v. Mudibasappa, AIR 2019 SC 1983, noted at para 23 as follows [Bharat Barrel and Drum Manufacturing Company v. Amin Chand Pyarelal, (1999) 3 SCC 35; M.S. Narayana Menon alias Mani v. State of Kerala and another, (2006) 6 SCC 39; Krishna Janardhan Bhat v. Dattatraya G. Hegde, (2008) 4 SCC 54; Kumar CC No 5495/18 Kalrav Aggarwal v Maharam Page 7 of 21 Exports v. Sharma Carpets, (2009) 2 SCC 513; Rangappa v. Sri Mohan, (2010) 11 SCC 441 referred]:
(i) 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.
(ii) The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
(iii) To rebut the presumption, it is open for the accused to rely on evidence led by him or 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.
(iv) 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.CC No 5495/18 Kalrav Aggarwal v Maharam Page 8 of 21
(v) It is not necessary for the accused to come in the witness box to support his defence.
7. To put in nutshell, the law regarding the presumption for the offence under Section 138 N.I. Act, the presumptions under Sections 118(a) and 139 have to be compulsorily raised as soon as execution of cheque by accused is admitted or proved by the complainant and thereafter burden is shifted upon the accused to prove otherwise. These presumptions shall end only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability etc. The onus to prove the issuance of the cheque lies upon the complainant, and the same has to be proved beyond reasonable doubt, unless the accused admits the same. Once the issuance of cheque is established, either by admission or by positive evidence, the presumption under Section 139 of the Negotiable Instruments Act, 1881 arises. We can summarize the general principles in the following way:
Onus of proof: Section 139 of the Negotiable Instruments Act, 1881 states that it shall be presumed, unless the contrary is proved that the holder of a cheque received the cheque, of the nature referred to in Section 138, for the discharge, in whole or in part, of any debt or other liability. Therefore, here the onus shifts upon the accused to prove the nonexistence of debt or other liability. Section 139 CC No 5495/18 Kalrav Aggarwal v Maharam Page 9 of 21 of the Negotiable Instruments Act, 1881 uses the word "shall presume", which means that the presumption under Section 139 is rebuttable. Standard of proof: The standard of proof required to rebut the presumption under Section 139 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 other liability, the onus shifts back to the complainant to prove by way of evidence, beyond reasonable doubt, that the cheque in question was issued by the accused in discharge, whole or in part, of any debt or other liability, and now the presumptions under Section 118 (a) and Section 139 will not come to the aid of the complainant. Mode of Proof: The accused may adduce direct evidence to prove that the note/cheque 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 prove the nonexistence of the 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 a bare denial of passing of 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 CC No 5495/18 Kalrav Aggarwal v Maharam Page 10 of 21 getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances upon the 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 circumstances of the case, act upon the plea that they did not exist.
As discussed above, from the legal provisions and the law laid down in various judgments, it can be safely gathered that it is for the accused to rebut the presumptions. He can do so by cross examining the complainant, or by leading defence evidence, thereby demolishing the case of the complainant. It is amply clear that the accused does not need to discharge his or her liability beyond the shadow of reasonable doubt. He just needs to create holes in the case set out by the complainant. Accused can say that the version brought forth by the complainant is inherently unbelievable and therefore the prosecution cannot stand.
8. In the present case, the accused in his defence under Section 251 Cr.P.C. has accepted his signature on the cheque and issuance of cheque. In such a scenario, a presumption shall be raised under Section 139 r/w Section 118 of NI Act that cheque in question was issued in discharge of valid debt or liability and it is thereafter upon him, to rebut them by adducing evidence. If upon CC No 5495/18 Kalrav Aggarwal v Maharam Page 11 of 21 preponderance of probabilities, the accused is able to do the same, onus once again shifts back on the complainant to prove its case beyond reasonable doubt.
9. In the present case, the accused has submitted in his defence under Section 251 Cr.PC, and in statement under Section 313 of Cr.PC that the cheque in question bears his signature. He has not filled the other particulars of the cheque. He has handed over the cheque in question to one Sanjay Goel as blank security cheque in consideration for exchanging the old currency in the period of demonetization. He has not taken any loan from complainant Kalrav Aggarwal, he does not know the complainant. He does not know how the cheque in question has come into possession of complainant. He has received a legal notice. He does not have any liability towards the complainant.
10. The accused has cross examined complainant as CW-1, but has not examined himself in DE for purpose of proving his defence. The main question to be decided is whether there was outstanding liability towards accused of cheque amount as claimed by the complainant or whether cheques were misused by the complainant.
It is the case of complainant that complainant has given friendly loan of Rs. 3,50,000/- to accused and accused has issued cheque in question for discharging the liability outstanding towards complainant. CC No 5495/18 Kalrav Aggarwal v Maharam Page 12 of 21
Per Contra, it is the case of accused that that the cheque in question were given as blank security cheque to one Sanjay Goel in consideration for exchanging the old currency in the period of demonetization and he has not taken any loan from complainant. Accused alleges that he has no liability towards the cheques in question towards the complainant.
11. Regarding the defence of the accused that he had issued blank signed undated cheque, it is manifest that by reason of the provision under Section 20 NI Act, a right has been created in the holder of the cheque. When a blank cheque is signed and handed over, it means that person signing it has given an implied authority to any subsequent holder to fill it up. Prima facie, holder thereof is authorized to complete the incomplete inchoate instrument. Thus, merely the allegation of issuance of incomplete negotiable instrument does not create absolute defence in favour of the accused. There is no law that a person drawing the cheque has to necessarily fill it up in his own handwriting. Hence, once accused has admitted his signature on cheques, he cannot escape his liability on the ground that same has not filled in by him. A person issuing a blank cheque is supposed to understand the consequences of doing so. Thus, this defence is of no assistance to accused. (Jaspal Singh v. State, Crl. Rev. 160/2016, by Hon'ble High Court of Delhi, & Ravi Chopra v. State 2008 (102) DRJ 147, relied on.) CC No 5495/18 Kalrav Aggarwal v Maharam Page 13 of 21 As regards the defence of accused that cheque in question was security cheque is without any merits in view of the decision of Hon'ble Apex Court in ICDS Ltd Vs. Beena Shabeer (2002) (2) SCC 426 and of Hon'ble High Court of Delhi in Credential Leasing & Credits Ltd. Vs. Shruti Investments & Anr 223 (2015) DLT 343, that security cheques fall within the purview of Section 138 NI Act. As per the decision of Credential Leasing & Credits Ltd. vs. Shruti Investments & Anr (supra) it has been held that the scope of Section 138 NI Act would cover cases where ascertained and crystallized debt or other liability exists on the date when the cheque is presented and not only to the cases where ascertained and crystallized debt or other exists on the date on which it was delivered to the seller as a post-dated cheque or as a current cheque with a credit period. Hence, it would have to be examined in a case-to-case basis, whether an ascertained or crystallized debt or other liability exists or not.
12. The accused has cross examined complainant as CW-1, for the purpose of rebutting the presumption and for proving his defence, but has not lead DE.
Accused, has not examined any witness in his DE. In this case, accused has not brought anything on record to prove his defence. Accused has not brought any material to prove that he has given one blank security cheque to one Sh. Sanjay Goyal in consideration for exchanging old currency notes in CC No 5495/18 Kalrav Aggarwal v Maharam Page 14 of 21 period of demonetisation. Accused has not brought any witness or any documentary evidence regarding his claim. Accused has not summoned Sanjay Goyal to whom he has allegedly issued the cheque in question. Accused has taken the defence that he has issued the signed cheque to Sh. Sanjay Goyal in consideration for exchanging old currency notes in period of demonetisation, but it is very unreasonable why accused will hand over Sanjay Goyal a blank security cheque if he has issued cheque in consideration of exchange of currency notes. He has failed to explain how much old currency notes have been exchanged. Accused has failed to explain the circumstances as to why Sanjay Goyal has given the cheque to the complainant. Accused has not brought on record anything to explain why and how the cheque in question got into the possession of complainant, if there is no liability of accused towards complainant. Accused has not proved this fact that he has issued the cheque in question as blank security cheque to Sanjay Goyal. Hence, accused has not proved his main defence by any independent evidence.
Also, accused has not made any police complaint, or any written communication regarding the fact that complainant or Sanjay Goyal has not returned the cheque and he has been cheated by the complainant or Sanjay Goyal.
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It is the case of accused he has issued the cheque to Sanjay Goyal and not to complainant, but accused has not proved this by way of any independent evidence. It is only a bald assertion that he does not have any transaction with the complainant and complainant has misused the cheques. Accused has not adduced anything to substantiate its case. The onus to prove this fact is on the defence for which accused has to bring some cogent evidence on record. As per Sec. 103 of Indian Evidence Act, 1872 which provides that burden of proof as to any particular fact lies on that person who wishes the court to believe in its existence. In the absence of any independent evidence to support its case, these are merely bald assertions. Also, accused has not made any communication to the complainant or Sanjay Goyal for returning his cheques. Also, accused did not give stop payment instructions to his banker qua the cheque in question when cheque was not returned to him. Hence, defence of accused is unsubstantiated by any cogent evidence. Hence, it casts a doubt over version of accused.
Since accused has not stepped into witness box to lead DE, only thing is to be seen is case of complainant and cross examination of complainant, that whether the defence of accused is getting probabilised by the case of complainant or not.
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13. Coming to the cross-examination of the complainant/CW-1, it is deposed by the complainant that, he knows the accused since 2013 as accused is his friend. Accused is residing in Dayalpur. He does not know the other family members of the accused and he has visited the house of the accused once or twice. Complainant is running a footwear shop. He had given the friendly loan in cash to the accused on 15.02.2017. He has not given this friendly loan in the presence of any person and have not executed any document i.e., pro-note or any agreement at that time. Complainant has deposed that he has arranged the said amount from his daily business sale and savings from sale and from his other friends. He does not remember whether at the time of giving loan, the demonetization period was running, or not. He cannot tell whether he had given the loan amount with in new currency or old currency. Complainant knows Sanjay Goyal as he is his friend. Complainant has denied suggestion that Sh. Sanjay Goyal has given the old currency to exchange into new currency to accused. Complainant has denied suggestion that cheque in question was given by the accused to Sanjay Goyal. Complainant has denied suggestion that Sanjay Goyal has given the said cheque to him. It is wrong to suggest that I had misused the said cheque. Complainant has denied suggestion that the new currency was given to Sanjay Goyal after exchanging the old currency and complainant has misused the cheque in question with collusion of Sanjay Goyal. CC No 5495/18 Kalrav Aggarwal v Maharam Page 17 of 21
14. Coming to the cross examination of complainant accused has tried to create doubts over the story of the complainant, and tried to question the financial capacity of complainant. Complainant has deposed in his cross examination that she has given loan to accused after arranging from daily business sale and savings and also from other friends.
As far as the testimony of the complainant is concerned, accused has failed to elicit anything out of the testimony of the complainant, to his benefit. Accused is not able to bring out any major inconsistency in the story of complainant whereby he is able to rebut the presumption. There is nothing coming out in the cross examination of complainant's witness which would probabilise the defence raised by the accused or falsify the case of the complainant. There is nothing in the cross-examination of the complainant regarding the defence taken by the accused, which could be of assistance to accused.
In view of the provision of section 139 of NI Act r/w Section 118 NI Act thereof, the Court had to presume that cheque has been issued for discharging debt or liability. The said presumption which is rebuttable could be rebutted by accused by proving the contrary. The accused had to prove by cogent evidence that there was no debt or liability. For shifting the burden, accused has to prove his defence by preponderance of probabilities whereas he CC No 5495/18 Kalrav Aggarwal v Maharam Page 18 of 21 has failed to do so. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. Without rebutting the presumption, the onus to prove his case will not shift to complainant. The evidence of complainant can't be considered till the accused raises a probable defence in his favour. Although accused can rely on the evidence brought on record by the complainant to rebut the presumption, however in the present case, there is nothing in the cross-examination which is in favour of accused.
Also, it must be remembered that once the presumption u/s 139 NI Act is drawn the complainant need not prove his source of funds, etc., and also, evidence of complainant can't be considered, till accused discharges his primary burden as has been held by Apex Court in Rohit Bhai Jeevan Lal Patel Vs. State of Gujarat 2019 SCC online SC 389.
Recently, Supreme Court in P. Rasiya vs Abdul Nazer, in Criminal Appeal Nos. 1233-1235 of 2022, has held that complainant is not required to spell out in the complaint, the nature of transaction or source of fund, since the onus is on the accused to prove that the cheque was issued not towards a debt or liability.
Also, accused has not stepped into witness box to led evidence. It is well settled that the statement of accused under S. 281 Cr. P.C. or under S.313 CC No 5495/18 Kalrav Aggarwal v Maharam Page 19 of 21 Cr. P.C. is not the evidence of the accused and it cannot be read as part of evidence. The accused has an option to examine himself as a witness. Where the accused does not examine himself as a witness, his statement under S. 281 Cr. P.C. or 313 Cr. P.C. cannot be read as evidence of the accused and it has to be looked into only as an explanation of the incriminating circumstance and not as evidence. 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. If mere statement under Section 313 Cr. P.C. or under Section 281 Cr. P.C. of accused of pleading not guilty was sufficient to rebut the entire evidence produced by the complainant/ prosecution, then every accused has to be acquitted. In order to rebut the presumption under Section 139 of N.I. Act, the accused, by cogent evidence, has to prove the circumstance under which cheques were issued. (V. S. Yadav v. Veena, 172 (2010) DLT 561, relied on.)
15. Regarding the requirement of giving notice in writing to the drawer/accused of the cheque within 30 days of the receipt of information by the payee from the bank, the accused has accepted the receipt of the legal notice in his statement under Section 251 CrPC.
16. From the foregoing discussions, it is clear the accused has not led any such cogent evidence to rebut presumptions under S. 118/139 NI Act. In CC No 5495/18 Kalrav Aggarwal v Maharam Page 20 of 21 view of the aforesaid discussions the Court finds that accused has not been able to prove any probable defence and has failed to rebut the presumption raised under Section 118/139 of NI Act.
17. The complainant has been able to prove that the cheque in question i.e., issued cheque bearing no. 627671 dated 11.12.2017, for amount of Rs.3,50,000/- and drawn on The Delhi State Co-operative Bank Ltd., Bhajanpura Branch, New Delhi, as Ex.CW1/4, was issued in discharge of a valid legally recoverable liability owed to the complainant by the accused, with the aid of presumptions of law raised in his favour.
18. Therefore, the entirety of the evidence holds the accused guilty and the accused Maharam S/o- Lt. Sh. Surjan is convicted for the offence punishable U/s. 138 of the Negotiable Instruments Act in respect of cheques in question. Digitally signed by AJEET AJEET NARAYAN NARAYAN Date:
2023.05.31 17:05:40 +0530 Announced and dictated directly (AJEET NARAYAN) in the open court on 31.05.2023 MM-02/Shahdara/KKD Courts 31-05-2023 CC No 5495/18 Kalrav Aggarwal v Maharam Page 21 of 21