Delhi District Court
Avtar Singh vs State on 19 September, 2023
IN THE COURT OF MS AMBIKA SINGH, ASJ-02/ WEST
DISTRICT, TIS HAZARI COURTS, NEW DELHI
Criminal Appeal No. 143/2022
DLWT-01-006396-2022
1. Sh. AVATAR SINGH
s/o Sh. Teja Singh
r/o C-10, 1st Floor
Rampura, Hari Nagar
Maya Puri, New Delhi.
.....Appellant
Vs.
1. THE STATE
2. HARPREET SINGH
s/o Sh. Jagjit Singh
r/o WZ-455 (F-154)
Village Tihar,
New Delhi-110018
.....Respondent
Date of institution of the cases : 07.07.2022
Date when the cases reserved for order : 14.09.2023
Date of announcement of judgment : 19.09.2023
JUDGMENT:
1. This criminal appeal is directed against judgment of conviction dated 20.05.2022 and order on sentence dated 10.06.2022, passed by Ld. trial court, in a case titled as Harpreet Singh Vs. Avtar Singh, bearing CT case No. 21657/2016, under Section 138 of Negotiable Instrument Act (hereinafter referred to as the Act), PS Nihal Vihar. Vide impugned judgment of CA NO. 143/2022 AVTAR SINGH VS STATE AND ANR Page No 1 of 22 conviction, trial court convicted accused Avtar Singh (appellant herein) for aforesaid offence and vide impugned order on sentence, trial court sentenced convict to pay Rs.11,50,000/- as compensation to the complainant within a period of 30 days and in the event of failure, the convict is to undergo simple imprisonment for five months.
2. Briefly stated, it is the case that the accused/appellant was well known to the complainant since many years and accused approached the complainant for loan of Rs.7,60,000/- as he had financial crisis. At the request of accused, the complainant advanced a friendly loan of Rs.7,60,000/- to the accused on 09.07.2015. The complainant/respondent no.2 herein further claims that he received cheque bearing no.045053 worth Rs. 7,60,000/- dated 25.05.2016 drawn on Union Bank of India, Rajouri Garden, New Delhi from the appellant herein in discharge of the aforesaid loan liability. When the respondent presented the cheque, the bank returned it unpaid on 28.06.2016 as no balance was available in the account. Thereafter, the complainant constrained to send a legal demand notice to the accused/appellant herein on 30.06.2016 (delivered on 01.07.2016). However, the accused/appellant allegedly failed to pay the cheque amount and therefore, the complainant/respondent no.2 filed the complaint on 16.08.2016. On the contrary appellant has stated that mother of the complainant used to run a business of committee and he was a committee member of four such different groups run by the mother of the complainant/respondent no.2 herein and he has given four blank signed cheques to the mother of the complainant CA NO. 143/2022 AVTAR SINGH VS STATE AND ANR Page No 2 of 22 as security cheque including the cheque in question in relation to the business of committee being run by the mother of the respondent no.2 and further he denied taking any loan from complainant. Pre-summoning evidence was led, cognizance of the accused u/s 138 NI Act was taken against the accused and thereafter, summons were issued against the accused, accused entered into appearance. Further, notice u/s 251 Cr.P.C was served for the offence u/s 138 NI Act to the accused, to which accused did not plead guilty and claimed trial. In his plea of defence, recorded on 22.08.2017, the accused admitted his signature on cheques in question and stated that he had not filled the other particulars in the cheque in question. Thereafter, despite being given ample opportunities, the appellant failed to move an application u/s 145 (2) NI Act and his right to cross-examine the complainant/respondent no.2 was closed. Further, it is stated that complainant did not owe money from him, accused further stated that he has not taken the alleged loan from the complainant. The accused stated that he did not have any liability towards the complainant qua the cheque in question.
3. It is further stated that the complainant examined only himself as CW1 and a bank witness from PNB, Hari Nagar as CW-2. He reiterated the facts of his complaint in his evidence affidavit. In defence, the accused chose to examined himself as a sole defence witness, who was duly cross examined by the counsel of the complainant. The argument were heard and the trial court held appellant/accused guilty for the offence u/s 138 NI vide order dated 20.05.2022. The application for suspension of sentence u/s 389(3) Cr.P.C was moved by the appellant, which CA NO. 143/2022 AVTAR SINGH VS STATE AND ANR Page No 3 of 22 was allowed and the sentence was suspended for a period of 1 year vide order dated 12.07.2022 after furnishing the bail bonds in sum of Rs 50,000/- with one surety in the like amount. CONTENTIONS OF THE APPELLANT:
4. Being aggrieved of the impugned judgment of conviction and order on sentence, appellant has preferred this appeal and relied upon the grounds that Ld. Trial Court has erred in coming to the conclusion that the respondent has established its case against the appellant/accused beyond reasonable doubt. It is stated that the version of the respondent is based on false story with only intention to extort money because he was not earning anything and he was totally dependent upon his mother. It is stated that there is delay of one day in filing the complaint case and no application for condonation of delay has been moved. Also, no receipt was obtained by the complainant that the appellant herein has taken a loan of Rs. 7,60,000/- and from where complainant/respondent no.2 has earned his amount as he is totally dependent upon his mother. It is further submitted that the complainant/respondent no.2 has made material improvements and there are material contradictions in his testimonies. It was further admitted by the complainant that he has not shown the alleged transaction in his ITR. No compelling circumstances have been shown by the complainant for extending the loan in cash, and taking it back through cheque, either the transaction should be by way of cheque or cash. It should be adequately reflected in the ITR so that it can become an accounted transaction, recovery of black money is CA NO. 143/2022 AVTAR SINGH VS STATE AND ANR Page No 4 of 22 impermissible in law. There was no single evidence whatsoever in favour of the cash loan extended by the complainant, further this the cash loan transactions was not shown in the ITR or it has been shown that this amount has been withdrawn from any bank account, cannot be basis of an offence u/s 138 NI Act because if the amount is more than Rs.20,000/- and given in cash than it is hit by section 269 SS of Income Tax and such transactions are prohibited in the eyes of law.
5. Further, Ld. Trial Court further failed to appreciate that the basis of the present complaint is the alleged friendly loan to the accused, but complainant miserably failed to prove its case beyond reasonable doubt, complainant has not filed any document or examined any independent witness except himself, to support its case on the contrary accused successfully rebutted the presumption from the stage of Legal notice.
CONTENTIONS OF THE COMPLAINANT:
6. Ld. Counsel for the complainant contended that the Ld. Trial Court considered the evidence minutely and delivered a reasoned judgment. He contended that merely submitting that the cheque in question was a security cheque does not absolve the liability of the accused/appellant in absence of any evidence is not a plausible defence. He contended that the appellant failed to raise any probable defence to displace statutory presumption under section 138 NI Act. He contended that the complainant has proved her financial capacity to advance loan amount to the appellant. He contended that there is no manifest error of law or procedure or perversity in the impugned judgment.
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7. The jurisdiction of the appellate court is co-extensive with that of the trial court in the matter of assessment, appraisal and appreciation of the evidence and also to determine the disputed issues. A court exercising appellate power must not only consider questions of law but also questions of fact and in doing so it must subject the evidence to a critical scrutiny. In Surinder Mohan Katwal vs. State of Himachal Pradesh, (2018) 15 SCC 349, Hon'ble Supreme Court of India held as under:
"14.....The powers of the appellate court under Section 386 CrPC are the same as that of the trial court. It is true that the trial court being a primary court of facts, which has the advantage of seeing and observing the witnesses has to thoroughly analyse the evidence and record its findings. In an appeal from a conviction, it is for the appellate court to be satisfied affirmatively that the prosecution case is substantially established and record its own findings to confirm the conviction....."
8. The statement u/s 313 Cr.P.C was not recorded. I deemed it appropriate to record the same and the same was recorded on 14.09.2023 (reliance is taken on the judgment of the Hon'ble Supreme Court of India in Nar Singh Vs. State of Haryana in Crl. Appeal No. 2388/2014). In the statement u/s 313 Cr.P.C, the appellant stated that appellant/accused does not owe any legal liability towards Respondent.
POINTS FOR CONSIDERATION:
(a) Whether the appellant had drawn a cheque on an account maintained by him with a banker for payment of an amount of Rs. 7,60,000/- in favour of the complainant?
9. The complainant has deposed that he has advanced a CA NO. 143/2022 AVTAR SINGH VS STATE AND ANR Page No 6 of 22 friendly loan of Rs. 7.6 Lakhs to the accused as they were well known to each other and accused was in need of money and for discharge of his legal liability, accused issued a cheque from his account bearing no. 045053 (Ex. CW-1/1) of Rs. 7.6 Lakhs dated 28.05.2016. When complainant presented the cheque, it got dishonoured with the remarks 'funds insufficient' vide cheque returning memo Ex. CW-1/2 dated 28.06.2016. The complainant has placed the said cheque on record. The appellant in his reply to the notice of accusation under Sec. 251 Cr.PC has stated that he has no legal liability to the complainant as he had not issued any cheque to the complainant. Around 3-4 years ago, he had issued the said cheque along with 2-3 blank signed cheques as the security to the mother of the complainant, who used to run 'committee'. Even after committee was finished, the mother of the complainant did not return the cheques and the complainant had misused the said cheques in question and filed a false case against him. However, he admitted that the cheque bears his signature. The appellant / accused has examined himself as DW- 1 in which he has deposed that he has given security cheques to the mother of the complainant including the cheque in question, meaning thereby he has not denied that the cheque has not been drawn on an account maintained by him and he has admitted his signatures on the cheque. In these circumstances, it is proved that the cheque Ex. CW-1/1 bears signature of appellant. It is also proved that the appellant has drawn the said cheque on an account maintained by him.
(b) Whether statutory presumption under Section 118 (a) and 139 NI Act that the said cheque was drawn for CA NO. 143/2022 AVTAR SINGH VS STATE AND ANR Page No 7 of 22 consideration and the complainant received the said cheque for discharge of any debt or other liability can be raised?
10. In Hiten P. Dalal vs. Bratindranath Banerjee, (2001) 6 SCC 16, Hon'ble Supreme Court of India held that presumption under Section 139 NI Act is a presumption of law, as distinguished from a presumption of fact. It is obligatory on the court to raise this presumption in every case where factual basis for raising of presumption is established. There is no discretion with the court but to draw the statutory presumption.
11. In Rangappa vs. Sri Mohan, (2010) 11 SCC 441, Hon'ble Supreme Court of India interpreted Section 139 NI Act as under:
"27. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the defendant-accused cannot be expected to discharge an unduly high standard or proof."
12. In Kumar Exports vs. Sharma Carpets, (2009) 2 SCC 513, Hon'ble Supreme Court of India held that in a trial under Section 138 NI Act a presumption will have to be made that CA NO. 143/2022 AVTAR SINGH VS STATE AND ANR Page No 8 of 22 every negotiable instrument was made or drawn for consideration and that it was executed for discharge of debt or liability once the execution of negotiable instrument is either proved or admitted. As soon as the complainant discharges the burden to prove that the instrument was executed by the accused, the rules of presumptions under Sections 118 and 139 NI Act help him shift burden on the accused. The presumptions will live, exist and survive and 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.
13. In Rohit Bhai Jivanlal Patel vs. State of Gujarat & Another, (2019) 18 SCC 106, the accused could not deny his signatures on the cheques and that the said cheques were presented to the bank within the period of their validity and returned unpaid for the reason of either the balance being insufficient or the account being closed. Hon'ble Supreme Court of India held as under:
"15.....Therefore, it is required to be presumed that the cheques in question were drawn for consideration and the holder of the cheques i.e. the complainant received the same in discharge of an existing debt. The onus, therefore, shifts on the appellant-accused to establish a probable defence so as to rebut such a presumption."
14. In Kalamani Tex and Another vs. P. Balasubramanian, (2021) 5 SCC 283, Hon'ble Supreme Court of India held that the statute mandates that once the signature of an accused on cheque is established, then these "reverse onus" clauses become operative and the obligation shifts upon the accused to discharge the presumption imposed upon him.
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15. The appellant never denied that he had not drawn the said cheque on an account maintained by him in a bank. As already noted, it is proved that the said cheque was signed by the appellant and appellant has admitted that he was himself given the cheque, therefore, statutory presumptions under Section 118
(a) and 139 NI Act that the said cheque was drawn for consideration and the complainant received it in discharge of an existing debt or other liability are drawn against the appellant.
(c) Whether the trial Court rightly presumed existence of legal liability against the appellant?
16. Ld. Counsel for the appellant contended that the trial Court committed a patent error of law in presuming existence of legally enforceable liability of the appellant towards the complainant.
17. In Hiten P. Dalal vs. Bratindranath Banerjee (supra), Hon'ble Supreme Court of India held that the effect of these presumptions is to place the evidential burden on the appellant of proving that the cheque was not received by the Bank towards the discharge of any liability.
18. In Bhupesh Rathod vs. Dayashankar Prasad Chaurasia & Anr., Crl. Appeal No. 1105/2021 decided on 10.11.2021, Hon'ble Supreme Court of India held that the words of Section 139 NI Act are quite clear that unless the contrary is proved, it shall be presumed that the holder of the 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.
19. In Rangappa vs. Sri Mohan (supra), Hon'ble Supreme Court of India held that the presumption mandated by Section CA NO. 143/2022 AVTAR SINGH VS STATE AND ANR Page No 10 of 22 139 of the Act does indeed include the existence of a legally enforceable debt or liability.
20. Therefore, the trial Court has not committed any error in presuming existence of a legally enforceable debt or liability against the appellant.
(d) Whether the complainant was required to prove existence of any legally enforceable debt or liability against the appellant?
21. Ld. Counsel for the appellant contended that the loan amount was not advanced by way of cheque in violation of provisions of Income Tax Act. He contended that there is no agreement or writing regarding advancement of loan. He contended that the complainant did not prove existence of any legally enforceable debt or liability against the appellant.
22. In Bir Singh vs. Mukesh Kumar, (2019) 4 SCC 197, Hon'ble Supreme Court of India held that the loan was not advanced through banking mode or there was no receipt regarding the said loan would not make any difference and the finding of the Hon'ble High Court that the burden was on the appellant to prove that he had advanced the loan and the blank signed cheque was given to him in repayment of the same was patently erroneous. The finding of the Hon'ble High Court that the case of the appellant was highly doubtful was set-aside as under:
"37. The fact that the appellant complainant might have been an Income Tax Practitioner conversant with knowledge of law does not make any difference to the CA NO. 143/2022 AVTAR SINGH VS STATE AND ANR Page No 11 of 22 law relating to the dishonour of a cheque. The fact that the loam may not have been advanced by a cheque or demand draft or a receipt might not have been obtained would make no difference.....
39. In our considered opinion, the High Court patently erred in holding that the burden was on the appellant complainant to prove that he had advanced the loan and the blank signed cheque was given to him in repayment of the same. The finding of the High Court that the case of the appellant complainant became highly doubtful or not beyond reasonable doubt is patently erroneous for the reasons discussed above."
23. In Rohit Bhai Jivanlal Patel vs. State of Gujarat & Another (supra), Hon'ble Supreme Court of India held as under:
"20.....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. 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.....
22. The result of discussion in the foregoing paragraphs is that the major considerations on which the trial court chose to proceed clearly show its fundamental error of approach where, even after drawing the presumption, it had proceeded as if the complainant was to prove his case beyond reasonable doubt....."
24. In Kalamani Tex and Another vs. P. Balasubramanian (supra), Hon'ble Supreme Court of India held as under:
"14. Once the 2nd appellant had admitted his signatures on the cheque and the deed, the trial court ought to have presumed that the cheque was issued as consideration for a legally enforceable debt. The trial CA NO. 143/2022 AVTAR SINGH VS STATE AND ANR Page No 12 of 22 court fell in error when it called upon the respondent complainant to explain the circumstances under which the appellants were liable to pay. Such approach of the trial court was directly in the teeth of the established legal position as discussed above, and amounts to a patent error of law."
25. The complainant is not required to prove existence of a legally enforceable debt or other liability as if, the complainant is to prove a debt before a civil Court wherein, the plaintiff is required to prove his claim on the basis of evidence to be laid in support of his claim for the recovery of the amount.
26. A dishonour of the cheque carries a statutory presumption of consideration. The holder of cheque in due course is required to prove that the cheque was issued by the accused and that when it was presented, it was not honoured. After drawing presumption under Section 118 (a) and 139 NI Act, the onus is shifted to the accused and unless the accused discharges the onus by bringing on record such evidence demonstrating a probable defence, the complainant cannot be called upon to show existence of a legally enforceable debt or other liability.
(e) What is the manner and standard of proof for dislodging presumption under Section 118 (a) and 139 NI Act?
27. As regards standard of proof for displacing presumption under Section 118 (a) and 139 NI Act, it is settled that the defence has to establish its case on the principle of preponderance of probability.
28. In Rangappa vs. Sri Mohan (supra), Hon'ble Supreme Court of India held that standard of proof for rebutting CA NO. 143/2022 AVTAR SINGH VS STATE AND ANR Page No 13 of 22 presumption under Section 139 NI Act is preponderance of probabilities and for that matter, the accused can rely on the material submitted by the complainant, as under:
"28. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of "preponderance of probabilities".
29. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his / her own.
30. In Kishan Rao vs. Shankargouda, (2018) 8 SCC 165, Hon'ble Supreme Court of India held that the accused may adduce evidence to rebut the presumption, but mere denial regarding existence of debt shall not serve any purpose. It was held in para 20: (Kumar Exports case, SCC p. 520):
"20..... 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, CA NO. 143/2022 AVTAR SINGH VS STATE AND ANR Page No 14 of 22 apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non- existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist....."
31. Once the signature of the appellant on the said cheque are established, then "reverse onus" clauses become operative. The obligation to discharge the presumption is shifted upon the appellant. In the present case, the appellant has admitted his signatures on cheque.
32. The presumptions raised under Section 118 (a) and 139 NI Act are rebuttable in nature. The appellant is required to raise a probable defence and the standard of proof for displacing the presumption is preponderance of probability and not mere possibility. The appellant can lead evidence or rely upon the evidence adduced by the complainant to show non-existence of a legally enforceable debt or other liability or want of consideration
(f) Whether the appellant is able to raise a probable defence?
33. The appellant has not filed the application under Sec. 145(2) of NI Act and the right to cross-examination was struck off by the Ld. Trial Court. Appellant / accused had taken the defence that he has no legal liability to the complainant as he had not issued any cheque to the complainant. Around 3-4 years ago, CA NO. 143/2022 AVTAR SINGH VS STATE AND ANR Page No 15 of 22 he had issued the said cheque along with 2-3 blank signed cheques as the security to the mother of the complainant, who used to run 'committee'. Even after committee was finished, the mother of the complainant did not return the cheques and the complainant had misused the said cheques in question and filed a false case against him. However, he admitted that the cheque bears his signature.
34. The complainant has appeared as CW-1 and has deposed by an affidavit that he is known to the accused and accused was in need of money and he took a loan of Rs. 7.6 Lakhs from him and in discharge of legal liability, has issued a cheque bearing no. 045053 worth Rs. 7.6 Lakhs dated 28.05.2016 in favour of the complainant and when the complainant presented the said cheque, it dishonoured with remarks 'funds insufficient' vide returning memo Ex. CW-1/2 dated 28.06.2016. As already noted, the complainant was not cross-examined by the appellant / accused.
35. Appellant / accused appeared as DW-1 and he has deposed that he knows the mother of the complainant namely Gursharan Kaur, who used to organize committee 8 years back. He had given 4 blank signed cheques to the mother of the complainant as security cheques including the cheque in question. He requested the mother of the complainant to return the cheques, however, she refused on one pretext or the other. The cheque in question has never been issued to the complainant. Complainant was not earning anything and he is totally dependent upon his mother and he has no source of income. He does not even have any bank account in Delhi and complainant has not filed any document to CA NO. 143/2022 AVTAR SINGH VS STATE AND ANR Page No 16 of 22 show from where he had obtained Rs. 7.6 lakhs. There is no liability owed to the complainant by him. The complainant has filed a false case in connivance with his mother.
36. He was cross-examined by Ld. Counsel for the complainant in which he has deposed that he knew the complainant for last about 9 years. He had given the cheque in question to the mother of the complainant for last 8 years back, might be in the year 2016. He further deposed that he has no liability towards the complainant, however, he failed to tell the exact date, time, month and year in which he demanded back the cheque in question. He further deposed that he had not given any notice to the complainant for returning his cheque and has also not lodged any complaint in this regard. However, the appellant / accused admitted his signatures on the cheque in question and the address mentioned in the complaint is his correct address and he is residing on the same address since 1998. He denied the suggestion that he had given cheque in question to the complainant after receiving of Rs. 7.6 Lakhs from the complainant. However, he admitted that the address mentioned on the legal notice is his correct address but he do not remember whether he received the said legal notice on 30.06.2016. He deposed that the mother of the complainant organized committee and the complainant was dependent upon her mother and there is no legal liability of Rs. 7.6 Lakhs of the cheques in question against him. He has further deposed that he has handed over the cheque in question in presence of mother and wife of the complainant.
37. After careful perusal the testimonies of aforesaid CA NO. 143/2022 AVTAR SINGH VS STATE AND ANR Page No 17 of 22 witnesses, it can be safely concluded that accused has merely denied of taking any loan from the complainant. Accused has taken the stand that he has handed over the cheques to the mother of the complainant including the cheque in question. However, he has failed to prove on record that the cheque were in fact handed over to the mother of the complainant. He has failed to provide any date, time and place of handing over the said cheques to the mother of the complainant. It is beyond comprehension of the Court that accused has not filed any complaint to police or any other legal authority when mother of the complainant refused to return his blank signed cheques to him. It is the stand of the accused in his reply to the notice under Sec. 251 Cr.PC that he has handed over these cheques around 3-4 years back. However, it is beyond imagination that accused did not file any single complaint to any legal forum when these cheques were not returned for good 3-4 years. Further, the accused has deposed that he has given these cheques in front of wife and mother of the complainant, however, he did not summoned them to record their evidence and confront them to substantiate his stand.
38. Appellant/accused has denied friendly relations with complainant/respondent. Mere denial of relationship with the complainant is not sufficient to prove that the appellant has no friendly relationship with the complainant in absence of any evidence or record. Ld. Trial Court has rightly held that the onus was on the accused to rebut the statutory presumption. Therefore, the accused was required to bring on record such facts and circumstances which would make the Court believe that the CA NO. 143/2022 AVTAR SINGH VS STATE AND ANR Page No 18 of 22 cheques in question was given to the mother of the complainant as a security cheque in relation to the committee system being run by her. Ld. Trial Court has rightly held that the accused has been unable to satisfy the burden of proof cast upon him.
39. Accused has taken the defence that mother of the complainant used to run committee, however, he has not brought any witness or evidence in his support to show that the committee was being run by the mother of the complainant and whereas the complainant has specifically denied that his mother used to run the committee.
40. As regards contention that the said cheque was a security cheque and it was issued without consideration, it can be stated that the complainant in his examination-in-chief Ex. CW-1/1 categorically stated that the appellant had issued the said cheque towards payment of the loan advanced to him.
41. It is well settled that a security cheque issued for discharge of the present liability as security would not absolve the accused from penal consequences under Sec. 138 NI Act. In Sripati Singh vs. The State of Jharkhand & Anr., Crl. Appeal Nos. 1269-1270 of 2021 decided on 28.10.2021, Hon'ble Supreme Court of India held as under:
"16.....If in a transaction, a loan is advanced and the borrower agrees to repay the amount in a specified time-frame and issues a cheque as security to secure such repayment; if the loan amount is not repaid in any other form before the due date or if there is no other understanding or agreement between the parties to defer the payment of amount, the cheque which is issued as security would mature for presentation and the drawee of the cheque would be entitled to present the same. On such presentation, if the same is CA NO. 143/2022 AVTAR SINGH VS STATE AND ANR Page No 19 of 22 dishonoured, the consequences contemplated under Section 138 and the other provisions of N.I. Act would flow."
42. As regards the contention that complainant has failed to prove source of funds and examine any independent witness to transaction of loan. The complainant has not been cross- examined by accused. Therefore, the testimony of the complainant has gone un-rebutted. Moreover, the accused has failed to bring on record any substantial evidence to prove that complainant has no source of income. Ld. Trial Court has rightly held that the accused never questioned the complainant about his financial capacity or source of funds. To put it simply, the version of the complainant that he advanced a loan of Rs. 7.6 Lakhs to the accused, has not been challenged by the accused by way of cross-examination. The law is well settled that where the evidence of a witness is allowed to go unchallenged with regard to any particular point, it may safely be accepted as true.
43. As regards the contention that in the said cheque was blank and only his signatures were there and rest of the particulars have been filled by the complainant itself, it may be relevant to take note of the judgment in Bir Singh vs. Mukesh Kumar (supra), as under:
"36. Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt."
44. In view of the aforesaid circumstances, Ld. Trial Court has CA NO. 143/2022 AVTAR SINGH VS STATE AND ANR Page No 20 of 22 rightly held that accused has not been able to sufficiently rebut the presumption in favour of the complainant and failed to raise to probable defence. Ld. Trial Court has rightly held that the ambiguity in the deposition of the accused has weakened the defence of the accused and held him guilty of the offence punishable under Sec. 138 of NI Act.
45. The complainant presented the said cheque dated 25.05.2016 for encashment within its period of validity. The said cheque was returned unpaid by the banker of the appellant with the endorsement 'funds insufficient' vide bank memo dated 28.06.2016 Ex. CW-1/2. The complainant issued demand notice Ex. CW-1/3 within the prescribed period. The appellant was served with the demand notice. The appellant admitted receipt of demand notice. The appellant failed to make payment of the cheque amount despite receipt of demand notice within statutory period. The complaint was within limitation. The complaint established all pre-requisites as required under Section 138 NI Act.
46. The appellant was rightly convicted for committing offence under Section 138 NI Act. There is no manifest error of law or procedure or perversity in the impugned judgment.
47. On the aspect of sentence, it may be noted that the cheque was returned unpaid on 28.06.2016 and the complaint was instituted on 16.08.2016.
48. In Kalamani Tex vs. P. Balasubramanian (supra), Hon'ble Supreme Court of India held as under:
"19. As regards the claim of compensation raised on behalf of the respondent, we are conscious of the settled principles that the object of Chapter CA NO. 143/2022 AVTAR SINGH VS STATE AND ANR Page No 21 of 22 XVII of NIA is not only punitive but also compensatory and restitutive. The provisions of NIA envision a single window for criminal liability for dishonour of cheque as well as civil liability for realization of the cheque amount. It is also well settled that there needs to be a consistent approach towards awarding compensation and unless there exist special circumstances, the courts should uniformly levy fine up to twice the cheque amount along with simple interest @ 9% p.a."
49. In the present case, the cheque amount is Rs.7,60,000/-. The complaint case was instituted on 16.08.2016. The trial Court is sentenced to the appellant to pay a fine of Rs.11,50,000/- out of which the entire amount shall be payable as compensation to the complainant within a period of 30 days and in the event of failure to pay the compensation amount as ordered above, the convict shall undergo simple imprisonment for a period of 5 months.
50. The trial Court has already taken lenient view in imposition of sentence. There is no reason to interfere in the quantum of compensation.
51. The appellant shall deposit the fine amount of Rs. 11,50,000/- out of which the entire amount shall be payable as compensation to the complainant within a period of 30 days and in the event of failure to pay the compensation amount as ordered above, the convict shall undergo simple imprisonment for a period of five months.
52. A copy of the judgment along-with trial Court record be sent to the trial Court. Appeal file be consigned to record room.
Announced in the open court (Ambika Singh)
on 19.09.2023 ASJ-02/THC, West/Delhi
19.09.2023
CA NO. 143/2022
AVTAR SINGH VS STATE AND ANR Page No 22 of 22