Delhi District Court
The Cases Titled As Kali Ram vs . State Of Himachal Pradesh, 1973 Air ... on 30 July, 2022
IN THE COURT OF SH. KAPIL GUPTA,
METROPOLITAN MAGISTRATE, (NI ACT)-07
SOUTH-WEST DISTRICT, DWARKA COURTS, NEW DELHI
Ct. Case No. 7259 of 2017
CNR No. DLSW020098402017
Naresh ............Complainant
Versus
Ajay Jain .............Accused
JUDGEMENT
(1) Name of the complainant Sh. Naresh
(2) Name of the accused Sh. Ajay Jain
(3) Offence complained of or U/s 138 NI Act
proved
(4) Plea of accused Pleaded not guilty
(5) Date of institution of case 22.04.2017
(6) Date of conclusion of 21.07.2022
arguments
(7) Date of Final Order 30.07.2022
Ct. Case No. 7259/2017 Page 1 of 24
(8) Final Order Conviction
1. The complainant, Sh. Naresh, had filed a complaint under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the 'Act') against the accused, Sh. Ajay Jain.
2. As per complainant, the accused is known to him as son of the accused namely Mr. Kamal has friendly relations with the complainant and the accused approached the complainant and took a friendly loan of Rs. 3,00,000/- and in discharge of liability, issued cheque bearing no. 358885 for an amount of Rs. 3,00,000/- drawn on Syndicate Bank, Nangloi, New Delhi in favor of the complainant. It is alleged that the cheque upon presentment was returned dishonored with remarks "Account closed" vide return memo dated 18.02.2017. It is further alleged that the complainant thereby sent a legal notice dated 08.03.2017 to the accused, despite which the accused failed to repay the amount and thereafter the present complaint was filed.
3. In his pre-summoning evidence, the complainant stated that he maintains his bank account in Allahabad Bank, Ghumanhera, Najafgarh, New Delhi and examined himself as CW1 vide his affidavit Ex.CW1/A. He reiterated the contents of the complaint and placed on record, cheque bearing no. 358885 dated 15.12.2016 for an amount of Rs. 3,00,000/- drawn on Syndicate Bank, Nangloi, New Delhi as Ex. CW1/1, bank returning memo dated 18.02.2017 as Ex.CW1/2, legal demand notice dated Ct. Case No. 7259/2017 Page 2 of 24 08.03.2017 as Ex.CW1/3, postal receipt as Ex.CW1/4 and internet generated tracking report as Ex. CW1/5.
4. The accused was summoned and notice under Section 251 of Code of Criminal Procedure, 1973 (hereinafter referred to as 'CrPC') was served upon him on 01.08.2017, to which he pleaded not guilty and claimed trial. He stated that he had not issued the cheque in issue in favor of the complainant and had started a factory with some other persons and there was a dispute between them and he gave blank signed cheque to that person. He admitted receiving the legal demand notice.
5. Thereafter, the complainant examined himself as CW-1, wherein he adopted his version as recorded in pre summoning evidence, in the post summoning evidence as well.
6. In his cross examination, he stated that his monthly salary is Rs. 25,000/- and that he had filed income tax return for the last two years only. He stated that he knew Mr. Sanjay from the year 1999 and Mr. Kamal from the year 2009/2010 through Mr. Sanjay. He admitted that Mr. Kamal and Mr. Sanjay had started a factory and stated that he had visited the factory only once when they got matter with respect to closure of their factory settled and on the same day, the accused gave him the cheque in issue. He denied the suggestion that the accused being father of Mr. Kamal had given the cheque in issue in a blank signed manner to Mr. Sanjay at the time of settlement and the complainant being friend of Mr. Sanjay has misused the said cheque. He admitted his signature at point A on Mark A and stated that Ct. Case No. 7259/2017 Page 3 of 24 he cannot tell whether the said document is in his handwriting. He stated that he knew that deceased Mr. Sanjay and Mr. Ajay were partners in the factory. He stated that he did not take any article against the money which was given by him to the accused. He denied the suggestion that accused had given articles as security for the money given by him to the accused.
7. Statement of the accused under Section 281 CrPC read with Section 313 CrPC was recorded on 21.06.2019, wherein all the incriminating evidence was put to him and he stated that he had not taken any loan from the complainant and had given the cheque in issue to Mr. Sanjay in a blank signed manner. He admitted receiving the legal demand notice. He stated that before receiving the legal notice, he worked with Mr. Sanjay and after loss in the business, Mr. Sanjay told him that factory should be closed and meanwhile, Mr. Sanjay had expired and Mr. Sunil, brother of Mr. Sanjay started looking after the business. He stated that he had to pay Rs. 1,00,000/- to Mr. Sunil in terms of full and final settlement of the expenditure and Rs. 50,000/- were paid to him through cheque and thereafter, the complainant filed the present case against him at the instance of Mr. Sunil. He preferred to lead defence evidence.
8. The accused in his defence evidence examined himself as DW1 wherein he deposed that he had started a business in partnership and later Mr. Sanjay told him that they should close the business and showed loss of Rs. 6,00,000/- and he gave a cheque of Rs. 3,00,000/- to Mr. Sanjay and after about 2-3 months, Mr. Sanjay died. He further deposed that after receiving a legal notice, brother of Mr. Sanjay came to him and the accused Ct. Case No. 7259/2017 Page 4 of 24 told him that he will pay him an amount of Rs. 1,00,000/- in terms of full and final settlement between them and the copy of the settlement was Mark A. He also deposed that he gave a cheque of Rs. 50,000/- to Mr. Sunil. He deposed that that he had closed his bank account as he was satisfied that he had settled his previous transactions with Mr. Sunil. He denied knowing the complainant and stated that he has met him for the first time in court.
9. The accused/DW1 was cross examined on behalf of the complainant wherein he admitted that no mention of cheque in issue is present in Mark A. He stated that he has not filed any police complaint against the complainant for misuse of the cheque in issue.
10. I have heard the final arguments as advanced by Ld counsel for the parties at length and have given my thoughtful consideration to rival submissions made by them. I have also gone through the material placed on record.
11. During the course of final arguments, Ld. counsel for the complainant submitted that the accused has admitted his signature on the cheque in issue. It was argued that all ingredients under Section 138 NI Act have been proved by the complainant and hence the accused must be convicted.
12. Per contra, it was contended on behalf of the accused that the complainant did not have any friendly relations with the accused. It was further contended that the cheque in issue was given to Mr. Sanjay and such Ct. Case No. 7259/2017 Page 5 of 24 fact is specifically mentioned in document Mark A and Mr. Sanjay gave the cheque in issue to the complainant, who misused the cheque and thus the present complaint deserves to be dismissed. It was argued that the complainant did not have the financial capacity to extend the loan and the date on which the loan amount was given and the mode vide which it was given has not been mentioned by the complainant and the present case is not maintainable. It was contended that the complainant has not disclosed the loan amount in his Income Tax Return and thus, it creates a doubt on his case. He relied upon judgement passed by the Hon'ble Supreme Court in the cases titled as Kali Ram vs. State of Himachal Pradesh, 1973 AIR 2773 and M/s Kumar Exports Vs. Sharma Carpets, (2009) 2 SCC 513 in support of his arguments. It was prayed that the accused be acquitted of the offence u/s 138 NI Act.
13. Before proceeding further, it would be appropriate to discuss, that as per Section 138 of the NI Act, following ingredients have to be proved by the complainant:
1. The accused issued a cheque on account maintained by him with a bank.
2. The said cheque has been issued in discharge, in whole or in part, of any legal debt or other liability.
3. The said cheque has been presented to the bank within a period of three months from the date of cheque or within the period of its validity.Ct. Case No. 7259/2017 Page 6 of 24
4. The aforesaid cheque, when presented for encashment, was returned unpaid/dishonoured.
5. The payee of the cheque issued a legal notice of demand to the drawer within 30 days from the receipt of information by him from the bank regarding the return of the cheque.
6. The drawer of the cheque failed to make the payment within 15 days of the receipt of aforesaid legal notice of demand.
14. It is also apt to discuss that a negotiable instrument including a cheque carries following presumptions in terms of Section 118(a) and Section 139 of the NI Act:
(i) Section 118 of the NI Act provides: "Presumptions as to negotiable instruments: Until the contrary is proved, the following presumptions shall be made:
(a) of consideration 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;"
(ii) Section 139 of the N.I Act further provides as follows:
"Presumption in favour of holder 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".Ct. Case No. 7259/2017 Page 7 of 24
Thus, the combined effect of Section 118 (a) and Section 139 of NI Act raises a presumption in favour of the holder of the cheque that he has received the same for discharge, in whole or in part of any debt or other liability.
15. For appreciating such legal position, reliance is placed on the judgement of the Hon'ble Supreme Court in the case of Hiten P. Dalal v. Bratindranath Banerjee (2001) 6 SCC 16 wherein it was held that:
"22. Because both Sections 138 and 139 require that the Court "shall presume" the liability of the drawer of the cheques for the amounts for which the cheques are drawn, as noted in State of Madras vs. A. Vaidyanatha Iyer AIR 1958 SC 61, it is obligatory on the Court to raise this presumption in every case where the factual basis for the raising of the presumption had been established. "It introduces an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the accused" (ibid). Such a presumption is a presumption of law, as distinguished from a presumption of fact which describes provisions by which the court "may presume" a certain state of affairs. Presumptions are rules of evidence and do not conflict with the presumption of innocence, because by the latter all that is meant is that the prosecution is obliged to prove the case against the accused beyond reasonable doubt. The obligation on the prosecution may be discharged with the help of presumptions Ct. Case No. 7259/2017 Page 8 of 24 of law or fact unless the accused adduces evidence showing the reasonable possibility of the nonexistence of the presumed fact."
Similar view has been taken by the Hon'ble Supreme Court in the cases titled as K.N. Beena vs. Munyappan and Ors., AIR 2001 SC 289.
16. Further, recently the Hon'ble Supreme Court in the case titled as Kalamani Tex & Anr. v. P. Balasubramanian, 2021 SCC Online SC 75 held that:
"14. Adverting to the case in hand, we find on a plain reading of its judgment that the trial Court completely overlooked the provisions and failed to appreciate the statutory presumption drawn under Section 118 and Section 139 of NIA. The Statute mandates that once the signature(s) of an accused on the cheque/negotiableinstrument are established, then these 'reverse onus' clauses become operative. In such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him."
17. From the ratio decidendi laid down in the aforesaid judgements, it is clear that for the offence under Section 138 of the Act, the presumptions under Section 118 (a) and Section 139 of NI Act have to be compulsory 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.
Ct. Case No. 7259/2017 Page 9 of 24A presumption is not in itself evidence but only makes a prima facie case for a party for whose benefit it exists. Presumptions, both under Sections 118 and 139 of NI Act are rebuttable in nature. In view of the reverse onus clause, judgement passed by the Hon'ble Supreme Court in the case titled as Kali Ram vs. State of Himachal Pradesh, 1973 AIR 2773 is respectfully not applicable to the facts and circumstances of the present case.
18. In the present case, the accused has admitted his signature on the cheque in issue.
19. It is pertinent to refer to the judgment of the Hon'ble Apex Court in the case of M/s Kumar Exports Vs. Sharma Carpets, (2009) 2 SCC 513 at this juncture, wherein it was held that:
"20. 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 rebut the statutory presumptions an 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 Ct. Case No. 7259/2017 Page 10 of 24 insist in every case that the accused should disprove the nonexistence 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 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."
20. Further, the above said principles have also been recently crystallized by Hon'ble Supreme Court in the case of Basalingappa vs Mudibasappa, (2019) 5 SCC 418, which is as follows:
Ct. Case No. 7259/2017 Page 11 of 24"25. We having noticed the ratio laid down by this Court in above cases on Sections 118(a) and 139, we now summarise the principles enumerated by this Court in following manner:
(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.
(v) It is not necessary for the accused to come in the witness box to support his defence."
21. As noted earlier, the accused has admitted his signature on the cheque in issue and hence, in the present case, a presumption under Section Ct. Case No. 7259/2017 Page 12 of 24 139 NI Act has to be compulsorily raised in favour of the complainant. In view of the same, the burden of proof shifts upon the accused to rebut the presumption that such liability does not exist. The presumption raised under Section 139 of NI Act is that of legally enforceable debt or liability and it is for the accused to raise a probable defence to rebut the said presumption. Further, 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. It has been held in the case titled K. Prakashan vs P. K. Surenderan, (2008) 1 SCC 258, decided by the Hon'ble Supreme Court of India, that the accused has to discharge such burden by showing preponderance of probabilities.
22. The court has to now consider whether the accused has been successful in discharging the burden of proof. It was argued on behalf of the accused that the complainant did not have any friendly relations with the accused. It was contended that the cheque in issue was given to Mr. Sanjay and such fact is specifically mentioned in document Mark A and Mr. Sanjay gave the cheque in issue to the complainant, who misused the cheque and thus the present complaint deserves to be dismissed.
23. It has been specifically averred in the complaint that accused is well known to the complainant as the son of the accused person namely Mr. Kamal has friendly relations with the complainant. Per contra, it has been deposed by the accused in his examination in chief that he does not know the complainant and met him for the first time in court. In the cross- examination of the complainant, he was confronted with a document Mark Ct. Case No. 7259/2017 Page 13 of 24 A and the complainant admitted that the document bears his signature at Point A. Admittedly, the document is dated 13.03.2016, however, the accused entered appearance before the court on 07.06.2017. Moreover, as per the accused, he and the complainant were present at the time when Mark A was executed. Thus, there are glaring contradictions in the averment of the accused and in view of the same, it is unconscionable to believe that the accused met the complainant for the first time in court. It is also pertinent to mention that neither any question has been put on behalf of the accused in the cross examination of the complainant regarding the friendly relations of the parties nor any such suggestion has been given. In view of no cross examination of the complainant by the accused on such aspect, it further cannot be said that the complainant did not have friendly relations with the accused. Further, it is worthy to note that despite the complainant stating that he knew the accused, as son of the accused Mr. Kamal had friendly relations with him and the said fact is being disputed by the accused, the accused has not bother to examine his own son Mr. Kamal as a witness. The examination of such witness may have proved the contention of the accused that complainant did not have friendly relations with him. However, to utter shock and surprise, the accused chose to not examine such person as witness who would have been a star witness in support of his claim. The accused has also not even brought any evidence on record in support of the contention. Thus, in the totality of facts and circumstances of the present case, contention on behalf of the accused that he did not have friendly relations with the complainant, in the absence of any credible evidence, cannot be taken as a gospel truth.
Ct. Case No. 7259/2017 Page 14 of 2424. It is also worthy to note that it has been stated by the complainant in cross examination upon questioning on behalf of the accused, that he did not take any article against the money which was given by him to the accused and he further denied the suggestion that accused had given articles as security for the money given by him to the accused. In view of the line of cross examination and the suggestion given on behalf of the accused, it is evident that the complainant had given some money to the accused.
25. It was contended on behalf of the accused that the cheque in issue was given to Mr. Sanjay and such fact is specifically mentioned in document Mark A and Mr. Sanjay gave the cheque in issue to the complainant, who misused the cheque and thus the present complaint deserves to be dismissed.
26. It was argued on behalf of the accused that the cheque in issue was given to Mr. Sanjay at the time of settlement and the settlement deed is Mark A. Admittedly, Mark A bears signature of the complainant. Upon perusal of document Mark A it is revealed that there is no mention of the cheque in issue being given to Mr. Sanjay. During the course of arguments it was stated by Ld. Counsel for the accused that a number "358885" is mentioned in Mark A and the cheque in issue bears the same number "358885". Upon scrutiny of Mark A it is revealed that there is a stray mention of number 358885, however, the said number is neither a part of a sentence nor is prefixed or suffixed by any words whatsoever. Thus, the contention raised on behalf of the accused that the cheque in issue was Ct. Case No. 7259/2017 Page 15 of 24 given to Mr. Sanjay and the same is recorded in Mark A is frivolous, bald and untenable. It is also worthy to note that neither any question has been put on behalf of the accused in the cross examination of the complainant regarding the cheque number being mentioned in Mark A nor any such suggestion has been given. In view of no cross examination of the complainant by the accused on such aspect, such contention is again liable to be rejected. Moreover, mere bare averments cannot amount to proof of the contention raised on behalf of the accused. The accused has been unable to take home his contention even by relying on testimony of the complainant or the material available on record.
27. It was also contended on behalf of the accused that the cheque in issue has been misused by the complainant. As observed earlier, the accused could not bring any cogent evidence in support of his claim that the cheque in issue was given to Mr. Sanjay. It is further noteworthy that the accused has not bothered to give instructions to his bank to stop payment qua the cheque in issue and no explanation has been given by him for the same, despite the alleged misuse of the cheque in issue. Any reasonable person would rush to give instructions of stop payment as soon as they discover that the cheque they have issued might be misused and not doing so raises a suspicion over the case of the accused. Moreover, no complaint was lodged by the accused against the complainant alleging misuse of the cheque in issue.
28. Further, it is also worthy to note that the accused never demanded in writing the cheque from the complainant or from the survivors of Mr. Ct. Case No. 7259/2017 Page 16 of 24 Sanjay after its alleged misuse. This again raises a suspicion over the claim of the accused that the cheque in issue were misused, as any prudent person would atleast immediately give a notice in writing to a person who has been allegedly withholding something as valuable as signed cheque. Moreover, as observed earlier, the accused knew the complainant from before filing of the present case. The presumption is fortified by the fact that the complainant had produced the cheque in issue from his possession. In the totality of facts and circumstances of the present case, non demand of the cheque and non-filing of a complaint regarding misuse of the cheque in issue, raises a serious doubt about the veracity of defence of misuse of the cheque taken by the accused and thus the contention raised on behalf of accused that cheque in issue was misused is rejected.
29. It was argued by the Ld. counsel for the accused that the complainant did not have the financial capacity to extend the loan and the date on which the loan amount was given and the mode vide which it was given has not been mentioned by the complainant and the present case is not maintainable.
30. In order to appreciate the argument led on behalf of the accused challenging the financial capacity of the complainant, it has to be considered whether the accused has actually challenged such financial capacity of the complainant by either setting up any defence or by leading any evidence. Upon a perusal of the notice served upon the accused under Section 251 CrPC, his statement under Section 281 CrPC read with Section 313 CrPC, the cross examination of the complainant Ct. Case No. 7259/2017 Page 17 of 24 conducted on behalf of the accused, the evidence led by the accused and on the basis of other material available on record, it is revealed that not a single mention or challenge of the financial capacity of the complainant has been made to the effect that the complainant did not have the financial capacity to extend the present loan in question and in fact the same has been brought forth for the first time during the course of final arguments.
31. For further appreciating the argument led on behalf of the accused, reliance is placed on judgement of the Hon'ble Supreme Court in the case titled as Rohitbhai J Patel vs The State Of Gujarat, (2019) 18 SCC 106 wherein it has been held that:
"20. The observations of the Trial Court that there was no documentary evidence to show the source of funds with the respondent to advance the loan, or that the respondent did not record the transaction in the form of receipt of even kachcha notes, or that there were inconsistencies in the statement of the complainant and his witness, or that the witness of the complaint was more in know of facts etc. would have been relevant if the matter was to be examined with reference to the onus on the complaint to prove his case beyond reasonable doubt. These considerations and observations do not stand in conformity with the presumption existing in favour of the complainant by virtue of Sections 118 and 139 of the NI Act. Needless to reiterate that the result of such presumption is that existence of a legally enforceable debt is to be presumed in favour of the complainant.Ct. Case No. 7259/2017 Page 18 of 24
When such a presumption is drawn, the factors relating to the want of documentary evidence in the form of receipts or accounts or want of evidence as regards source of funds were not of relevant consideration while examining if the accused has been able to rebut the presumption or not. The other observations as regards any variance in the statement of complainant and witness; or want of knowledge about dates and other particulars of the cheques; or washing away of the earlier cheques in the rains though the office of the complainant being on the 8th floor had also been of irrelevant factors for consideration of a probable defence of the appellant."
32. In the present case, the signature on the cheque in issue has been admitted by the accused and thus, in the present case also, presumption of a legally enforceable debt is raised in favour of the complainant as discussed above. Moreover, as per the ratio decidendi laid down by the Hon'ble Supreme Court in the above stated case, when such a presumption is drawn, the factors relating to source of funds are not of relevant consideration while examining if the accused has been able to rebut the presumption or not. Also, in view the aforesaid judgement it is also held that mere questioning the capacity of the complainant to grant the alleged loan to the accused at the stage of final arguments will not support his cause, more so when the potential of the complainant to grant the alleged loan could not be impeached. Further, in light of the fact that the financial capacity of the complainant was not put into doubt by the accused at the relevant stage, such argument led on behalf of the accused for the first time Ct. Case No. 7259/2017 Page 19 of 24 in the course of final arguments cannot be considered. Even no evidence on the lack of financial capacity has been placed on record by the accused. Thus, in absence of any evidence on the lack of financial capacity of the complainant to have extended the present loan having been placed on record by the accused, in the considered opinion of this court, the burden of proof did not shift back on the complainant to prove his financial capacity and thus the contention raised on behalf of the accused is liable to be rejected.
33. It was further argued by Ld. Counsel for the accused the date on which the loan amount was given and the mode vide which it was given has not been mentioned by the complainant and the present case is not maintainable
34. In order to appreciate the argument, reliance is again placed on judgement of the Hon'ble Supreme Court in the case titled as Rohitbhai J Patel vs The State Of Gujarat (supra). As observed earlier, presumption of a legally enforceable debt is raised in favour of the complainant in the present case. As per the ratio decidendi laid down by the Hon'ble Supreme Court in the above stated case, when such a presumption is drawn, factors such as the date on which the loan amount was given and the mode vide which it was given are also not of relevant consideration while examining if the accused has been able to rebut the presumption or not. Moreover, such defence has been set up for the first time at the stage of final arguments and was not set up at the relevant stage. Therefore, in the considered opinion of this court, non mention of the date on which the loan amount was given and Ct. Case No. 7259/2017 Page 20 of 24 the mode vide which it was given is of irrelevant consideration for deciding the present case.
35. It was further argued by Counsel for the accused that the complainant has not disclosed the loan amount in his Income Tax Return and thus, it creates a doubt on his case.
36. In order to appreciate the argument led on behalf of the accused, reliance is placed on the judgment of the Hon'ble High Court of Delhi in the case of Sanjay Arora v. Monika Singh, 2017 SCC Online Del 8897 wherein it was held that:
"24. Mere admission of the complainant that he was earning only Rs.12,000/ per month from small business or his failure to file income tax returns, or his omission to produce the bank pass book or to examine Chhotu as a witness in corroboration, are inconsequential. In order to rebut the statutory presumption, it was the burden of the respondent to prove the facts she had pleaded in answer to the notice under Section 251 Cr.P.C.. No material in support of such plea having come on record, the statutory presumption under Section 139 Negotiable Instruments Act in the case at hand has not been rebutted."
Accordingly, in the present case, the statutory presumption under the NI Act has to be rebutted by the accused only even upon non disclosure of the loan advanced in the Income Tax Return and the burden to prove the Ct. Case No. 7259/2017 Page 21 of 24 defence taken by the accused has to be discharged by him. In view of totality of the facts and circumstances of the present case and in view of the judgement of the Hon'ble Court of Delhi in the above stated case, the court does not find merit in the said submission of Ld. Counsel for the accused.
37. Further, reliance is also placed on the judgment of the Hon'ble High Court of Delhi in the case titled as Dilip Chawla v. Ravinder Kumar and Ors., 2017 SCC OnLine Del wherein it has been held as follows:
"23. The advancement of loan in cash may entail negative consequences for a party especially an Income Tax assessee as his having acted in breach of Section 269SS of Income Tax Act. Chapter XXB provides for the requirement as to the mode of acceptance, payment or repayment in certain cases to counteract evasion of tax. Section 269SS mandates that no person, after the cut off date shall take or accept from any other person any loan or deposit otherwise than by an account payee cheque or an account payee bank draft if the amount is more than Rs.10,000/. Breach of Section 269SS of the Income Tax Act provides penalty to which a person would be subjected to under Section 271D.
24. However, Section 271D does not provide that such transaction would be null and void. The payer of money in cash, in violation of Section 269SS of the Income Tax Act can always have the money recovered."Ct. Case No. 7259/2017 Page 22 of 24
Thus, in view of the above ratio decidendi, it is held that non disclosure of loan in the Income Tax Return may give rise to consequences under Income Tax Act, 1961 but does not make the transaction illegal or void and hence the liability under Section 138 NI Act remains unaffected and thus, it can be again observed that the argument advanced on behalf of the accused does not hold water. It is also pertinent to mention that no question or suggestion was put on behalf of the accused to the complainant regarding non disclosure of the loan amount in the Income Tax Return and such defence has been set up for the first time at the stage of final arguments and was not set up at the relevant stage. Thus, non disclosure of the loan in the Income Tax Return does not prejudice the case of the complainant as the statutory presumption under Section 139 of the NI Act has to be rebutted by the accused and the burden to prove the defence taken by the accused has to be discharged by him.
38. In considered opinion of the court, the present complaint has disclosed the existence of a legally enforceable debt or liability vide the cheque in issue, return memo and the legal notice brought on record. Moreover, the complainant has successfully proved all the necessary ingredients of Section 138 of NI Act. On the other hand, the accused has failed to rebut the presumption in favour of complainant either on the basis of the material available on record or by adducing any cogent evidence as except for bare averments, which were not at all substantiated by any material on record.
Ct. Case No. 7259/2017 Page 23 of 2439. In view of the evidence adduced, documents put forth and arguments advanced by the parties and further in view of the above discussion, the court is of the considered opinion that the accused Sh. Ajay Jain is guilty of offence under Section 138 of Negotiable Instruments Act, 1881 and accordingly, is hereby convicted under Section 138 of Negotiable Instruments Act, 1881.
Copy of this judgement be given Dasti to the convict free of cost as per rules.
Announced in the court on 30.07.2022.
(Kapil Gupta) Metropolitan Magistrate(NI Act)-07 South West District, Dwarka Courts, New Delhi Ct. Case No. 7259/2017 Page 24 of 24