Delhi District Court
In Re: Nawab Ali vs . Lalit Kumar on 4 November, 2022
IN THE COURT OF SH. SHASHANK NANDAN BHATT,
MM, NI ACT-06, SOUTH WEST, DWARKA, DELHI
IN RE: Nawab Ali Vs. Lalit Kumar
CC No. 10747/2020
CNR No. DLSW02-044952-2019
Nawab Ali
S/o Md. Sahabuddin Lilger
R/o H. No. 90, Sitapuri, Gali no. 8,
Near Pankha Road, Dabri
New Delhi-110045 ..... Complainant
Versus
Lalit Kumar
S/o Sh. Birbal
R/o RZ-C-175, Dashrath Puri,
New Delhi-110045 ..... Accused
DATE OF INSTITUTION : 17.10.2014
OFFENCE COMPLAINED OF : U/s 138 N I
Act
DATE OF JUDGMENT : 04.11.2022
DECISION : Acquitted.
JUDGMENT
1. The instant matter has originated out of a complaint under section 200 Cr.PC read with Section 138 Negotiable Instruments Act (hereinafter referred to as the 'N I Act'), filed by the complainant against the accused alleging that cheque dated 18.08.2014, amount 5,00,000/- (Rs. Five Lakhs only) bearing no. 000163 (Kotak Mahindra Bank), issued by the accused in favour of the complainant, in discharge of a legal debt or other liability, has been dishonoured and the accused has not paid the said amount even after receiving the prescribed legal demand notice. By virtue of this judgment, the present complaint is being disposed of.
Nawab Ali Vs. Lalit Kumar Page 1 of 20CC No. 10747/2020 Judgment
Brief Facts of the case
2. The case of the complainant, in nutshell, is that the complainant and accused are family friends and previously, the accused dealt in sale/ purchase of vehicles, along with the complainant. In December 2013, the accused, came to the house of the complainant and requested him for a financial help of Rs. 10 lakhs as his father was suffering from serious ailments. The complainant told the accused that he is not in a position to advance such a huge amount but the accused requested him to arrange the said funds from some other person and ensured that he shall repay the entire amount, within a short duration. Keeping in mind his cordial relationship with the accused, the complainant took some amount from his friends and relatives and thereafter, in January 2014 and February 2014, he advanced Rs. 5 lakhs each (total Rs. 10 lakhs), in cash, to the accused. In this regard, the accused issued a promissory note and also gave two post dated cheques (bearing numbers 000163 and 000179, dated 18.08.2014 & 25.08.2014 respectively, both amounting to Rs. 5 lakhs each, both drawn on Kotal Mahindra Bank) as surety to the complainant.
3. The complainant has further averred in his complaint that in the first week of August 2015, the complainant met the accused and demanded his money and the accused told the complainant to take the money by way of the abovestated post dated cheques, in two installments. The complainant presented the cheque bearing no. 000163 (out of the abovestated cheques) in his bank for encashment, but, the same got dishonored with the remark- 'Funds Insufficient'. The complainant apprised the factum of dishonor of the cheuqe to the accused, several times, but, the accused did not respond. Thereafter, the complainant sent a legal demand notice dated 22.09.2014 by registered post/ speed post, to the accused. Despite delivery of the said legal notice, the accused did not make the Nawab Ali Vs. Lalit Kumar Page 2 of 20 CC No. 10747/2020 Judgment requisite payment within the prescribed time. Being aggrieved by the above state of affairs, the complainant instituted the present complaint.
4. Pursuant to presentation of the present complaint, summons were issued against the accused. Upon the appearance of the accused, notice u/s 251 Cr.PC was framed against him vide order dated 06.06.2015, to which he pleaded not guilty and claimed trial. In the defence recorded u/s 251 Cr.P.C. on the same date, the accused stated that the cheque in question was given in a blank signed condition to the complainant for the purpose of security for a committee business. He further stated that he has already given more than Rs. 6 lakhs to the complainant, but, the cheque in question was not returned by the complainant. He also stated that the cheque in question has been misused by the complainant.
5. In support of his case, the complainant - Nawab Ali has examined himself as CW-1 and presented the following documents:
(i) The original cheque in question as Ex.CW-1/2;
(ii) Return memo as Ex.CW1/3;
(iii) Legal notice as Ex.CW1/4;
(iv) Postal receipt as Ex.CW1/5;
(v) Memorandum of settlement as Ex.CW1/6.
6. During his examination in chief, complainant has reiterated the contents of his complaint. He was duly cross examined by the Ld. Counsel for the accused and in his cross examination dated 17.05.2018, he stated that he has filed two cases against the accused Lalit Kumar. The witness also stated that he has studied till 10 th standard and he does not know about the status of the other case. In the year 2013/2014, he had two bank accounts, one in SBI and one in ICICI Bank. At the time of granting the alleged loan, he had Rs.
10,000/- to Rs. 20,000/- in his account. In the year 2013-2014, he was dealing in sale/ purchase of cars. He does not have any idea about his monthly/ annual income, at the time of granting the loan.
Nawab Ali Vs. Lalit Kumar Page 3 of 20CC No. 10747/2020 Judgment The witness also stated that he has not placed on record any document with regard to his income, in the year 2013-14. He does not file Income Tax Return. He cannot produce any document to prove that the accused was working with him in sale/purchase of cars.
7. The witness /CW-1 Nawab Ali further stated that he does not remember the ailment / duration of ailment, with / for which the father of the accused was suffering, nor does he remember the hospital, in which he was being treated. He has denied the suggestion that the father of the accused was not suffering from any ailment and the accused did not require any money at the relevant time. The witness denied the suggestion that he does not have any friendly relations with the accused, but, upon being specifically questioned by the Ld. counsel for the accused, he stated that he does not know the names of children of the accused. The witness also stated that he has not lend money to any other person and has not filed any other case against any other person, except the accused. He admitted that he had not mentioned the name/ address of any relative/ friend, from whom he took Rs. 10 lakhs, to advance the same to the accused, in his complaint, but, stated that he can tell the names of persons from whom, he took the money. He stated that one such person is Khaleel S/o Sh. Usman and another person is Azmer, whose father's name, he does not know. He also stated that he cannot say whether those persons could depose before the court, or not. He denied the suggestion that he has made a false story and introduced the names of the above two persons, as an afterthought, after the acquittal of the accused in other case qua the same transaction.
8. The witness/ CW-1 Nawab Ali further stated that he does not remember whether in CC No. 16361/16 filed by him against the accused, during cross examination, he had not stated the names of the persons from whom he took money and had stated that he cannot Nawab Ali Vs. Lalit Kumar Page 4 of 20 CC No. 10747/2020 Judgment produce any such person. He denied the suggestion that he is running a committee business and the cheque in question was taken as a security for the same. The cheque in question along with one other cheque was given by the accused, 2-3 months prior to the date of presentation. He had not filled the contents of the cheque and the same had been filled by the accused. He has denied the suggestion that document Ex.CW1/6 was not signed voluntarily. He also denied the suggestion that no legal demand notice was served to the accused.
9. In his statements recorded u/s 313 Cr.PC, the accused reiterated his defence given at the stage of framing of notice and stated that the cheque in question was given in a blank signed condition by him, as a security to the complainant, for becoming a member of the committee, run by the complainant. He was not getting money from committee on time and so he demanded his cheques back from the complainant. He further stated that the complainant assured him that he would give the money to him, but, later on, the complainant misused the cheque in question. He did not receive the legal demand notice.
10. Thereafter, the matter was fixed for defence evidence. The accused chose to not lead defence evidence but, in the meantime, he moved an application u/s 340 of Cr.PC and he stated that he intends to reply on the certified copies filed by him along with the application u/s 340 of Cr.PC.
11. Thereafter, the matter was listed for final arguments. During the course of arguments, it was argued by the Ld. Counsel for the complainant that in view of the fact that the accused has admitted his signatures on the cheque in question, the presumptions under 118(a)/139 N I Act are attracted and the case is fit for conviction. He has further stated the parties even settled the matter during the course of trial and separate statements of the parties, pertaining to Nawab Ali Vs. Lalit Kumar Page 5 of 20 CC No. 10747/2020 Judgment settlement were also recorded, but, later on, the accused did not honor his own words. No plausible defence has been raised by the accused.
12. Per contra, Ld. counsel for the accused has submitted that the entire case of the complainant is false and fabricated as no loan was ever taken by the accused, from the complainant. The accused has been acquitted in another connected matter that the complainant has instituted against him. The complainant has instituted a similar complaint, against one another person, wherein the contents of the present complaints have been reproduced verbatim, which in itself shows that the present case is entirely false. The complainant lacked the financial capacity to advance the loan in question and he has not explained the source of his funds. The legal notice of the present matter was never received by the accused and no cause of action arose in the present matter.
Findings of the Court-
13. Before delving into the facts of the case, it is apposite to bear in mind the law with respect to section 138, Negotiable Instrument Act. In order to prove his case under section 138 N I Act, the complainant must prove the following facts-
i) The accused issued a cheque on a bank account maintained by him
ii) The said cheque must have been issued, wholly or partly, in discharge of a 'legal debt or other liability'
iii) The said cheque was presented before the bank within 3 months from the date of issuance and was dishonoured
iv) The payee issued a legal demand notice, within 30 days of receipt of information of dishonour of the cheque
v) The drawer failed to make payment within 15 days of receipt of the said legal demand notice Nawab Ali Vs. Lalit Kumar Page 6 of 20 CC No. 10747/2020 Judgment
14. Further, the NI Act raises two important legal presumptions in favour of the holder of the cheque as soon as the execution of cheque is proved. As per Section 118(a), NI Act, it shall be presumed that every negotiable instrument was 'made, accepted, transferred, negotiated or endorsed for consideration, unless the contrary is proved'. Furthermore, as per section 139, NI Act, it shall be presumed that 'the holder of cheque, received the cheque for the discharge, in whole or in part, of any debt or other liability, unless the contrary is proved.'
15. The principles with respect to above mentioned presumptions, have been succinctly laid down in Para 25 of the judgment by Hon'ble apex court in Basalingappa v. Mudibasappa (2019) 5 SCC 418, which lays down as under-
" 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 the 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."Nawab Ali Vs. Lalit Kumar Page 7 of 20
CC No. 10747/2020 Judgment
16. At the very outset, it is pertinent to note that in the present matter the cheque in question (Ex.CW1/2) was issued on 18.08.2014 and was dishonored vide return memo dated 16.09.2014 (Ex.CW1/3) with the reason 'Funds insufficient'. Thereafter, a legal notice (Ex.CW1/4) was sent by the complainant on 22.09.2014 to the accused. No tracking report has been furnished by the complainant in order to prove when the said legal notice got delivered to the complainant. The present matter was instituted by the complainant on 15.10.2014.
17. In the present matter, the case of the complainant is that the accused approached him for a friendly loan of Rs. 10 lakhs, to incur the medical expenses of his father and in part discharge of the said liability, issued the cheque in question, which subsequently got dishonored. During the course of trial, the accused has admitted his signatures over the cheque in question and as discussed previously, the legal presumption u/s 118 (a) /139 of the N I Act are attracted to the present case and the burden of raising a probable defene, rests upon the accused. The defence taken by the accused is three fold- 1) the legal notice in the present case was never received by him, 2) the cheque in question was given as a security by the accused upon becoming a member of the committee, run by the complainant and
3) complainant did not have financial capacity to advance the loan in question to the accused and he has not explained the sources of his funds.
WITH RESPECT TO THE DEFENCE THAT THE LEGAL NOTICE, IN THE PRESENT CASE, WAS NEVER RECEIVED BY THE ACCUSED
18. The position of law with respect to the defence of the accused pertaining to non receipt of legal notice is no longer res integra in view of the judgment of Hon'ble apex court in C.C. Alavi Haji v. Palapetty Muhammed (2007) 6 SCC 555, wherein it has been held that an accused who has not received the legal demand notice cannot Nawab Ali Vs. Lalit Kumar Page 8 of 20 CC No. 10747/2020 Judgment claim the benifit of the defence of non receipt of the same as once summons are served upon him, it is the duty of such an accused to make the payment of the cheque in question within 15 days of recieving summons from the court. Once this option is not availed by him, the benefit of defence of non service of notice cannot be given to the accused. In light of the above legal position, no benefit of the defence pertaining to the non receipt of the legal demand notice, can be given to the accused.
WITH RESPECT TO THE DEFENCE THAT THE CHEQUE IN QUESTION WAS GIVEN AS A SECURITY BY THE ACCUSED UPON BECOMING A MEMBER OF THE COMMITTEE, RUN BY THE COMPLAINANT
19. During the course of trial, the first defence that the accused took is that the cheque in question was given by him to the complainant, as a security, upon becoming a member of the committee run by the complainant. In this regard, it is pertinent to mention that as discussed hereinabove (In Basalingappa [supra]), once the signatures on the cheque in question has been admitted, the burden of raising a probable defence, lies upon the accused. In the present matter, the accused has neither himself entered into the witness box, nor has he produced any other independent witness, in order to prove that the complainant ran a committee business and that the accused was a subscriber to the said committee. Mere allegations of the accused, in the absence of any positive evidence with respect to the complainant running the committee business, in the opinion of this court are not sufficient to prove the version of the accused. Consequently, the accused has failed in proving that the cheque in question was given by him to the complainant as a security, upon subscribing to the committee business, run by the complainant.
Nawab Ali Vs. Lalit Kumar Page 9 of 20CC No. 10747/2020 Judgment WITH RESPECT TO THE DEFENCE THAT THE COMPLAINANT DID NOT HAVE FINANCIAL CAPACITY TO ADVANCE THE LOAN IN QUESTION TO THE ACCUSED AND HE HAS NOT EXPLAINED THE SOURCES OF HIS FUNDS.
20. The legal position with respect to the defence of financial incapacity of the complainant has to be examined in the light of the judgment of Hon'ble apex court in Basilingappa (supra), wherein it has been cogently laid down that when the financial capacity of the complainant has been questioned by the accused, it is 'incumbent upon the complainant to have explained his financial capacity' and the court 'cannot insist a person to lead negative evidence'.
21. In the present matter, the case of the complainant is that, upon the request of the accused, he arranged funds from his friends and relatives, to advance the loan in question to the accused. During the stage of cross examination of the complainant, the Ld. Counsel for the accused specifically asked the complainant about his financial capacity as well as the details of the people from whom he arranged the funds, for advancing the alleged loan. The complainant, during his cross examination, categorically stated that at the time of advancing the loan in question, he had approximately Rs. 10,000/- to Rs. 20,000/- in his bank account and he borrowed money from persons, namely- Khaleel S/o Sh. Usman and Azmer, whose father's name he does not remember.
22. At this stage, it is pertinent to mention that in his complaint, the complainant has not named the persons who advanced him the loan in question, which, in the opinion of this court, is a material omission and casts a suspicion over his version. It is also pertinent to note that at the stage of complainant's evidence, the complainant neither himself produced the said Khaleel and Azmer as witnesses, nor did he take steps to get them summoned by the court. In such a situation by taking resort to the illustration (g) appended to section Nawab Ali Vs. Lalit Kumar Page 10 of 20 CC No. 10747/2020 Judgment 114 of the Indian Evidence Act, it can very well be presumed that had the said witnesses, appeared in the witness box, their testimony would have been unfavourable to the version of the complainant.
23. During the course of arguments, the Ld. Counsel for the accused has drawn the attention of the court to the certified copies (filed along with application u/s 340 of Cr.PC) of the evidence of the complainant and judgment in CC No. 136361/16 and the complaint filed by the complainant against one Shiv Kumar Verma. A careful scrutiny of the said documents reveals that the complainant has filed a complaint against one Shiv Kumar Verma on exact same facts. What is all the more appalling, is the fact that the complaint filed by the complainant in that case is a verbatim copy of the present complaint(with necessary changes). In this regard, it is axiomatic to state that a matter pertaining to section 138 of the N I Act is a 'Civil Sheep' in a 'Criminal Wolf's Clothing' (as laid by the Hon'ble Apex Court in P. Mohan Raj Vs. M/s Shah Brothers Ispat Ltd. LL 2021 SC 120). From a perusal of the entire material placed on the record, it is apparant that the complainant has filed a complaint on exactly same facts against another person, previously, and in the present trial, categorically lied about the said fact by stating in his cross examination that he has not instituted any other case u/s 138 of the N I Act. In view of the above, there is no iota of doubt in the mind of this court that the complainant has not approached this court with clean hands.
24. Furthermore, during his cross examination, the complainant has himself stated that he does not know the names of the children of the accused, which suggests that he did not share close relations with the accused. In the opinion of the court, it is highly unnatural and unreasonable for a person, who admittedly, has Rs. 10,000/- to Rs. 20,000/- in his bank account, to arrange a loan amounting to Rs. 10 lakhs, which is a substantial amount, more so, when he does not Nawab Ali Vs. Lalit Kumar Page 11 of 20 CC No. 10747/2020 Judgment even share close family terms with the other person. Thus, the entire story of the complainant appears to be concocted and does not inspire the confidence of the court. Consequently, the accused has succeeded in challenging the financial capacity / sources of funds of the complainant to advance the loan in question. Moreover, by leading specific evidence (along with the application u/s 340 of Cr.PC), the accused has raised sufficient doubts as to the veracity of the complainant and the existence of the alleged legal debt.
25. During the course of arguments, Ld. Counsel for the complainant, drew the attention of this court towards the memorandum of settlement Ex.CW1/6(OSR) and stated that the accused had himself agreed to settle the matter. In this regard, as discussed previously, the entire case of the complainant appears to be fabricated and concocted and in such a situation, this court sees no reason to believe the contents of the memorandum of settlement Ex.CW1/6(OSR). The Ld. counsel for the complainant has also submitted that during the course of the trial as well, the accused himself settled the matter as is reflected from order dated 02.03.2016, passed by the Ld. Predecessor Judge. The Ld. Counsel for the complainant has also drawn the attention of this court towards the judgment of the Hon'ble High Court of Delhi in Dayawati Vs. Yogesh, and submitted that in terms of the said judgment, the court should pass an order u/s 431 r/w 421 Cr.PC to recover the amount agreed to be paid by the accused, during the course of trial, as a settlement. In this regard, it is pertinent to mention that the complainant did not raise any objections, when the trial of the present matter was proceeded with by the Ld. Predecessor Judge. A perusal of the record reveals that after the matter was transferred from Tis Hazari Courts to the present court, both the parties willfully participated in the trial. Moreover, after the matter was sent for mediation by this court, as per order sheet dated 12.11.2021, parties themselves jointly submitted that mediation has failed and they want the matter to proceed on merits.
Nawab Ali Vs. Lalit Kumar Page 12 of 20CC No. 10747/2020 Judgment In such a situation, in the opinion of this court, the complainant cannot be permitted to blow hot and cold at the same time, and since he himself neither raised any objection when the trial of the matter was being proceeded with, on merits, nor did he file any application u/s 431 r/w 421 of Cr.PC, at the relevant time, he cannot be permitted to raise this point, at the stage of final arguments.
26. Before parting with the judgment, it is apposite to mention that the Ld. counsel for the accused has relied on case laws - K Prakash Vs. T K Sundaram (2008) 1 SCC 258, Krishna Janardhan Bhat Vs. Dattatraya G Hegde AIR 2008 SC 1325 which provide that the burden of proof upon the accused in cases u/s 138 of the N I Act, has to be discharged as per the standards of 'preponderance of probabilities', while, the complainant has to prove his case 'beyond reasonable doubt' and Kulwinder Singh Vs. Kafeel Ahmad 2014 (2) JCC (NI) 100, which lays down that in cases where huge sum of money (Rs. 9,30,000/-) is involved, the complainant ought to have shown the source of such funds. The court has perused the said judgments and has duly considered them in appreciating the facts of the present case.
27. Consequently, in the considered opinion of the court, the accused has succeeded in challenging the financial capacity and the sources of funds of the complainant to advance the loan in question. By producing the certified copies of another case filed by the complainant against one - Shiv Kumar Verma, the accused has successfully raised doubts over the veracity and truthfulness of the case of the complainant. Thus, the accused has succeeded in raising a probable defence and rebutting the presumptions u/s 118A and 139 of the NI Act.
CONCLUSION
Nawab Ali Vs. Lalit Kumar Page 13 of 20
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28. Thus, on account of above appreciation of facts, evidences and materials on record, this court is of the considered opinion that the complainant has failed to prove his case on the touchstone of 'beyond reasonable doubt'. On the contrary, the accused has succeeded in raising a probable defence as per the yardstick of 'preponderance of probabilities'. Consequently, the accused- Lalit Kumar is acquitted under the accusation of committing the offence u/s 138 N I Act.
29. This judgment contains 14 pages. This judgment has been signed and pronounced by the undersigned in open court.
30. Let a copy of the judgment be uploaded on the official website of Digitally signed District Courts, Dwarka forthwith. SHASHANK by SHASHANK NANDAN NANDAN BHATT BHATT Date: 2022.11.04 PRONOUNCED IN THE OPEN COURT 14:20:39 +0530 TODAY i.e. ON 4th November, 2022 (Shashank Nandan Bhatt) Metropolitan Magistrate (NI Act)-06 South- West, Dwarka 04.11.2022 Nawab Ali Vs. Lalit Kumar Page 14 of 20 CC No. 10747/2020 Judgment