Delhi District Court
Naidu (D) vs Maruthachalam (D), Criminal Appeal No. ... on 16 March, 2023
Mohd. Taiyyab v. Mohd. Danish Ahmad
CC No.626088/2016
IN THE COURT OF MS. TWINKLE CHAWLA: MM-05, SOUTH-EAST
DISTRICT, SAKET COURTS COMPLEX: NEW DELHI
Mohd. Taiyyab v. Mohd. Danish Ahmad
CC No.626088/2016
U/s 138 Negotiable Instruments Act, 1881
1. CIS number : DLSE020021972013
2. Name of the Complainant : Sh. Mohd. Taiyyab.
3. Name of the Accused, : Sh. Mohd. Danish Ahmad, S/o Sh.
parentage & residential Manzoor, R/o F-53, Near Sunehari Masjid,
address Behind Taj Dawakhana, New Seelampur,
Delhi -110053.
4. Offence complained of or : U/s 138 of Negotiable Instruments Act,
proved 1881
5. Plea of the Accused : Pleaded not guilty and claimed trial
6. Final Judgment/order : CONVICTED
7. Date of judgment/order : 16.03.2023
JUDGMENT
1. The Complainant has filed the present complaint under Section 138/142 of Negotiable Instruments Act, 1881 ("NI Act") against the Accused on the averments Page 1 of 27 Mohd. Taiyyab v. Mohd. Danish Ahmad CC No.626088/2016 that Complainant has over the period of 2012 to 2013 has given Rs. 3,35,50,000/- in cash and Rs. 56,50,000/- by way of bank transfer as investment to the Accused, out of which only an amount of Rs. 35,50,000/- has been given by the Accused to the Complainant as profit.
2. As per the Complainant, the Accused in discharge of his part liability, issued the following two cheques:
(i) Cheque bearing No. 008372, drawn on ICICI Bank, B-130, Vivek Vihar, New Delhi-110092, for an amount of Rs. 22,00,000/-, dt. 08.04.2013, in favour of the Complainant ("Cheque in question 1"); and
(ii) Cheque bearing No. 008374, drawn on ICICI Bank, B-130, Vivek Vihar, New Delhi-110092 for an amount of Rs. 25,00,000/-, dt. 08.04.2013, in favour of the Complainant ("Cheque in question 2");
Cheque in question 1 and Cheque in question 2 are collectively referred to as "Cheques in question".
3. Upon presentment, the cheques in question were returned unpaid on ground of funds insufficient, by way of return memos dt. 30.05.2013.
4. The Complainant sent the legal demand notice dated 26.06.2013 through speed post at address of the Accused. Hence, despite the service of the legal demand notice, the Accused failed to make the payment within the stipulated period and the Complainant filed the present complaint.
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5. After taking pre-summoning evidence, Accused was ordered to be summoned in this case for commission of offence under Section 138 of Negotiable Instruments Act, 1881, vide order dated 08.08.2013.
6. Accused appeared and was released on bail on 27.05.2014. Thereafter, the complaint was returned on account of the judgment of the Hon'ble Supreme Court in Dashrath Rupsingh Rathod v. State of Maharasthra (Crl. Appeal No. 2287/09). The complaint was thereafter filed in district Shahadra and Accused was again summoned vide order dt. 19.01.2015. The complaint was then transferred to the present court vide order dt. 06.11.2015, in view of the Negotiable Instrument Amendment Ordinance 2015. The Accused entered appearance before this court on 01.08.2016 and was released on bail on 04.02.2017. On finding a prima facie case, notice U/s 251 of the Criminal Procedure Code, 1973 ("CrPC") was served upon the Accused on 10.04.2017 to which he pleaded not guilty and opted to contest after disclosing the following defence:
"I do not plead guilty and claim trial. The cheque in question bears my signatures and the impugned cheque was given as surety. The Complainant and I were partners in property dealing business. I had purchased the property and for that I had taken Rs. 1.5 to 2 crores from the Complainant and gave the impugned cheques as surety. I paid approximately Rs. 1.30 crores to the Complainant but the Complainant did not return the cheque. As on date, nothing is due to be paid to the Page 3 of 27 Mohd. Taiyyab v. Mohd. Danish Ahmad CC No.626088/2016 Complainant. The Complainant has misused the impugned cheque. I did not receive the legal notice."
7. Vide order dated 10.04.2017 opportunity was granted to the Accused to cross examine the Complainant. However, due to the Accused not cross-examining the Complainant on several dates, the right of the Accused to cross examine the Complainant was closed vide order dt. 01.12.2018. Thereafter, vide order dt. 20.07.2019 passed by Ld. ASJ-03/SED, Accused was granted one effective opportunity to cross examine the Complainant. The Complainant/CW1 adopted his pre-summoning evidence affidavit, Ex. CW1/A and also proved following documents:
Ex. CW1/1: Original Cheque bearing no. 008372, dated 08.04.2013, amounting to Rs. 22,00,000/-.
Ex. CW1/2: Original Cheque bearing no. 008374, dated 08.04.2013, amounting to Rs. 25,00,000/-.
Ex. CW1/3: Original return memo dated 30.05.2013.
Ex. CW1/4: Original return memo dated 30.05.2013.
Ex. CW1/5: Copy of legal demand notice dated
26.06.2013.
Ex. CW1/6 and Speed post receipt dated 26.06.2013 in Ex. CW1/7: respect of legal demand notice.
Ex. CW1/8: Return envelope in respect of legal demand notice.
Ex. CW1/9: Return envelope in respect of legal demand notice.
Ex. CW1/10: Internet generated tracking report of speed post.
Ex. CW1/11: Internet generated tracking report of speed post.
Ex. CW1/12: Complaint u/s 138 NI Act.
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8. The Complainant examined himself as CW1 and was cross examined on 02.12.2019 and 09.01.2020. During cross-examination, the Complainant brought the bank statement of his account bearing no. xxxxxx2627, which is Ex. CA, account statement of his wife Rohi Khanam bearing no. xxxxxx2556, which is Ex. CB, bank account statement of his late mother Mrs. Rehmat UI Nisha bearing no. xxxxxx8254, which is Ex. CD and his bank accounts statement of account bearing no. xxxxxx2908, which is Ex. CE and his passbook of account bearing no. xxxxx45524, which is Mark CA.
9. Complainant Evidence was closed vide separate statement of Complainant on 09.01.2020.
10.Thereafter, Accused was examined under Section 313 of CrPC dt. 18.02.2020 for explaining the circumstances appearing against him in the Complainant's evidence. He denied the Complainant's case and pleaded false implication in the present case and opted to lead evidence in his defence.
11.As part of defence, the Accused examined one Sh. Murari Lal, Tax Assistant, Income Tax Department as DW-1 who also proved the following documents:
Ex. DW1/1: Authority letter in his favour issued by Assistant Commissioner of Income Tax dated 07.09.2022.
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Mohd. Taiyyab v. Mohd. Danish Ahmad CC No.626088/2016 Ex. ITR of the Complainant bearing DW1/A(Colly)(OSR): PAN No. AFEPT9740B of AY 2009-10 (consisting of 08 pages) Ex. ITR of the Complainant bearing DW1/B(Colly)(OSR): PAN No. AFEPT9740B of AY 2010-11 (consisting of 08 pages) Ex. ITR of the Complainant bearing DW1/C(Colly)(OSR): PAN No. AFEPT9740B of AY 2011-12 (consisting of 06 pages) Ex. ITR of the Complainant bearing DW1/D(Colly)(OSR): PAN No. AFEPT9740B of AY 2012-13 (consisting of 08 pages) Ex. DW1/2: Report in relation to A.Y. 2013- 2014 qua the Complainant.
12. Thereafter, DE was closed by way of separate statement of the Accused on 23.09.2022.
13.I have heard Ld. Counsel for the parties and have perused the case file along with the written submissions filed by the parties carefully and meticulously. Submissions of the Complainant and Accused
14.The Ld. Counsel for the Complainant has submitted that all ingredients of Section 138 NI Act are fulfilled in the present case and hence, the presumption under Section 139 NI Act arises in the favour of the Complainant, which has not been successfully rebutted by the Accused.
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15.Per contra, Ld. Counsel for the Accused has submitted that the Accused deserves to be acquitted as there are several contradictions in the case of the Complainant, which weaken his stance, Complainant has not examined several key witnesses including Uzair Alam and that he did not have the financial capacity to invest the amount set out in the complaint with the Accused, the Complainant has been file don the basis of forged documents and the Accused has already repaid the amount taken from the Complainant. Hence, as per the Ld. Counsel for the Accused, the Accused has rebutted the presumption by way of preponderance of probabilities. Legal Framework Ingredients of Section 138 NI Act:
16.The Hon'ble Supreme Court of India in Kusum Ingots & Alloys Ltd and Ors v. K Pennar Peterson Securities Ltd and Ors., (2000) 2 SCC 745 ("Kusum Ingots Case"), has clearly stipulated that "the ingredients which are to be satisfied for making out a case under the provision are:
(i) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account for the discharge of any debt or other liability; Page 7 of 27
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(i) that cheque has been presented to the bank within a period of six months1 from the date on which it is drawn or within the period of its validity whichever is earlier;
(ii) that cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank;
(iii) the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 152 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(iv) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice;
If the aforementioned ingredients are satisfied then the person who has drawn the cheque shall be deemed to have committed an offence."
17.Therefore, if the aforesaid ingredients are made out, the Accused is deemed to have committed an offence under Section 138 NI Act.
1 Reduced to three months vide RBI circular dated 4.11.2011. 2 The same is now enhanced to 30 days.
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Mohd. Taiyyab v. Mohd. Danish Ahmad CC No.626088/2016 Presumption under Section 139 NI Act/Section 118 NI Act:
18.Section 139 NI Act states that:
"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"
19.Section 139 NI Act is a type of reverse onus clause, which stipulates a presumption in the favour of the Complainant as to fact of a cheque being received in discharge of a legal debt or liability.
20.Further, Section 118(a) of the NI Act, states as follows:
"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;"
21.The Hon'ble Supreme Court of India has in a number of judgments dealt with the combined effect of the presumptions raised under Section 139 and Section 118(a) NI Act.
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22.The following proposition can be summarized on a perusal of the judgments of the Hon'ble Supreme Court of India in Sunil Todi & Ors v. State of Gujarat, LL 2021 SC 706, Kalamani Tex v. P. Balasubramanian, 2021 SCC OnLine SC 75; APS Forex Services Pvt. Ltd. v. Shakti International Fashion Linkers and Ors., AIR 2020 SC 945; Rohitbhai Jivanlal Patel v. State of Gujarat and Ors., AIR 2019 SC 1876; Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513 ("Kumar Exports Case"); K.N. Beena v. Muniyappan and Anr., (2001) 8 SCC 458; and Dhanvantrai Balwantrai Desai v. State of Maharashtra, 1964 Cri. LJ 437:
(i) Once the execution of cheque is admitted; Section 139 of the NI Act mandates a presumption that the cheque was for the discharge of legally enforceable debt or liability;
(i) 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;
(ii) Something which is probable has to be brought on record by the Accused 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;
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(iii) The words "unless the contrary is proved" which occur in Section 139, make it clear that the presumption has to be rebutted by 'proof' and not by a bare explanation which is merely plausible. A fact is said to be proved when its existence is directly established or when upon the material before it the Court finds its existence to be so probable that a reasonable man would act on the supposition that it exists. Unless, therefore, the explanation is supported by proof, the presumption created by Section 139 NI Act cannot be said to be rebutted;
(iv) 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;
(v) 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.
Analysis
23.In the case at hand, it is not in dispute that the cheques in question were drawn by the Accused from his bank account. Further, it is also not in dispute that the Accused is the signatory of the cheque in question as in the defence disclosed by the Accused Page 11 of 27 Mohd. Taiyyab v. Mohd. Danish Ahmad CC No.626088/2016 U/s 251 CrPC and Section 313 CrPC statement; he has duly admitted the same. Presentation of the cheques in question by the Complainant and their dishonor on grounds of funds insufficient is also not in dispute, having been admitted by the Accused in statement U/s. 313 CrPC.
24.The receipt of the legal demand notice has been denied by the Accused in statement U/s. 251 CrPC and 313 CrPC. However, it is seen that the address mentioned in the legal demand notice is the same address as mentioned by the Accused in his bail bonds. Accordingly, a presumption of due service is drawn U/s. 27 of the General Clauses Act. Further, since the Accused did not make payment of the cheque amount within 15 days of the receipt of summons in the present case, in line with the judgment of the Hon'ble Supreme Court of India in C.C. Alavi Hazi v. Palapetty Muhammad & Anr, (2007) 6 SCC 555, this Court is of the opinion that defence of the Accused side that he has not received any legal demand notice is without any force and is liable to be rejected.
25.Thus, the legal demand notice Ex. CW1/5 is held to have been duly served upon the Accused. Finally, the complaint had been filed and refiled (upon returning) within the limitation period. Therefore, essential ingredients (i) to (v) as stipulated by the Hon'ble Supreme Court in Kusum Ingots Case (supra), have been duly satisfied.
26. Further, as noted above, once the execution of the cheque by the Accused is proved/admitted, the presumption of the same being drawn for consideration stands Page 12 of 27 Mohd. Taiyyab v. Mohd. Danish Ahmad CC No.626088/2016 attracted in terms of Section 139 NI Act. Now, in the case at hand, so far as the question of existence of basic ingredients for drawing of presumption U/s 118 (a) and 139 of the NI Act is concerned, from the aforesaid discussion, it is apparent that the Accused has not denied his signatures on the cheques in question that have been drawn in favour of the Complainant on a bank account maintained by the Accused; and hence the said presumption can be drawn. The Ld. Counsel for the Accused has stated that such inference cannot be drawn as the cheques in question were given as blank signed cheques and the particulars on the same have been filled by or at the instance of the Complainant. At this stage, reliance can be laid on the observations of the Hon'ble SC in Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197; wherein it has been held that:
"It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted...
38. If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the Accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence...
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40. 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."
(emphasis supplied)
27.The same view has been endorsed by the Hon'ble High Court of Delhi in Ravi Chopra v. State, CRL.M.C. 5211/2006.
28.Hence, in view of such clear stipulation by the Hon'ble Supreme Court and Hon'ble Delhi High Court, it is immaterial whether or not the particulars on the cheque have been filled by the Accused or not, to the extent the Accused has admitted to have appended his signatures on the cheques in question. Accordingly, the applicability of the presumption under Section 139 NI Act is not dependent upon the Accused filling the particulars on the cheque. Accordingly, 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 Accused to establish a probable defence so as to rebut such a presumption.
29.In the segment on legal framework, set out above, the legal proposition with respect to the burden of proof upon the Accused has already been discussed. Hence, it is now to be examined as to whether the Accused brought any material on record or Page 14 of 27 Mohd. Taiyyab v. Mohd. Danish Ahmad CC No.626088/2016 pointed out glaring discrepancies in the material produced by the Complainant for dislodging the presumption which meets the standard of preponderance of probabilities.
30.The Accused in the present case, has taken the following line of defence with a view to rebut the presumption:
(i) No investment transaction was undertaken between the Complainant and Accused:
31.Ld. Counsel for the Accused has submitted that the Complainant had not invested the amount of Rs. 3,87,50,000/- with the Accused and has set out false and misleading facts in the complaint, which is evident for the following reasons:
(a) As per the complaint, the Complainant had stated that he has given Rs.
3,87,50,000/- to the Accused but the cheques have been received only for Rs. 3,22,00,000/-; and as per the calculation of the various amounts set out in the complaint, the amount comes to Rs. 4,27,00,000/-. Hence, Ld. Counsel for the Accused submits that on account of such discrepancies, it is clear that no such amount was invested with the Accused:
The case of the Complainant is that the Complainant was introduced to the Accused through one Sh. Uzair Alam and thereafter he invested a total amount of Rs. 3,87,50,000/-, in various tranches, from 2012 to 2013. Further, the Accused only gave an amount of Rs. 35,50,000/- as profit to the Complainant. The Complainant had also transferred an amount of Rs. Page 15 of 27
Mohd. Taiyyab v. Mohd. Danish Ahmad CC No.626088/2016 56,50,000/- in the account of the Accused and the rest of the payments were made in cash. Perusal of record shows that the cumulative value of the impugned cheques in the four cases, filed against the Accused, i.e., CC No. 626089/2016, CC No. 618063/2016, CC No. 626088/2016 and CC No. 625643/2016 is Rs. 2,12,00,000/-. While there may be some discrepancy in the actual addition of amounts as set out in the complaint and the amount of Rs. 3,87,50,000/-, a perusal of the defence taken by the Accused at the time of framing of notice shows that he has stated that he had purchased a property, for which he had taken Rs. 1,50,00,000/- to Rs. 2,00,00,000/- Crores from the Complainant and the cheques in question were issued as security. Further, even in the statement u/s 313 CrPC, the Accused has stated that he had taken Rs. 2,00,00,000/- from the Complainant. Hence, in the present case, since the cheques in question are cumulatively (of all the four complaints filed against the Accused qua this transaction) of the value of Rs. 2,12,00,000/- and the transaction value as per the Accused is also Rs. 2,00,00,000/-, this argument of discrepancy between the amounts mentioned in the complaint and their actual addition value does not become a material discrepancy and hence does not help the Accused in rebutting the presumption u/s 139 NI Act.
(b) Further, Ld. Counsel for the Accused has submitted that since one cheque bearing No. 069552 dt. 19.03.2013 of Rs. 50,00,000/- was without signature and another cheque bearing No. 069551 of Rs. 60,00,000/-was dishonored with reason instrument outdated, for which no civil suit was also filed by the Page 16 of 27 Mohd. Taiyyab v. Mohd. Danish Ahmad CC No.626088/2016 Complainant, it is clear that there is no liability of the Accused towards the Complainant as the Complainant has not taken any steps against the said two cheques of Rs. 1,10,00,000/-, which are not enforceable:
Ld. Counsel for the Accused has submitted that since no prudent man would waste cheques of the value of Rs. 1,10,00,000/-, if the same were issued against liability, this conduct of the Complainant in not seeking any remedy against the unsigned cheque and the cheque which has been returned unpaid being outdated, shows/reflects that the cheques were not issued against any legal liability. This argument of the Accused also exerts less force since the case of the Accused himself is that he has taken Rs. 2,00,00,000/- from the Complainant, which has been paid. However, this conduct of the Complainant does to certain extent make room for the possibility of the Accused having repaid the amount to the Complainant and hence the Complainant did not take any action against the said cheques. It is trite law that the presumption u/s 139 NI Act can be dislodged only by preponderance of probability and not a mere possibility. Without the Accused rendering any further evidence to show the fact of payment by him of Rs. 2,00,00,000/- to the Complainant, either by way of receipts, bank transfers, attempts made by the Accused to seek a return of the cheque in question, this conduct of the Complainant by itself does not prove the fact of repayment of Rs. 2,00,00,000/- by the Accused.
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(c) The Complainant has not examined Uzair Alam as a witness, while he was the person who introduced the Complainant to the Accused, as per the Complainant. Hence, considering that a material witness has not been examined, the case of the Complainant becomes weak. In the present case, the Complainant has not examined Uzair Alam, who was admittedly the person who introduced the Complainant and the Accused. However, firstly since the Accused has himself admitted the existence of business relation between the Complainant and the Accused, the examination is not material.
Further, in light of the judgment of the Hon'ble Supreme Court in Rohitbhai Case (supra), the non-examination of witnesses will itself not rebut the presumption u/s 139 NI Act. The Hon'ble Supreme Court observed that:
"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 Page 18 of 27 Mohd. Taiyyab v. Mohd. Danish Ahmad CC No.626088/2016 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." (emphasis supplied) Accordingly, as there is a presumption of existence of legally enforceable debt or liability in favor of the Complainant, the non-examination of witnesses, does not militate against the case of the Complainant.
(ii) The Complainant has not displayed the financial capacity to advance such huge amount to the Accused:
32.In this regard, Ld. Counsel for the Accused has relied upon the testimony of DW1, who has brought the ITR of the Complainant, for the F.Y. 2008-2012, as per which the net income of the Complainant was between Rs. 1,50,000/- to Rs. 3,00,000/- p.a., thereby reflecting the absence of financial capacity of the Accused to advance the amount to the Accused as investment. Further, it has been submitted that the ITR of his wife and mother have also not been filed. A perusal of the record shows that the Complainant had stated that he has taken money from the persons mentioned in Mark CB and further advanced the said sum to the Accused. The Accused in his statement u/s 251 CrPC and 313 CrPC has maintained that he has taken Rs. 2,00,00,000/- from the Complainant, which has been repaid. It is trite law that the Complainant is not required to prove his financial capacity to Page 19 of 27 Mohd. Taiyyab v. Mohd. Danish Ahmad CC No.626088/2016 advance/invest the amount with the Accused at the first instance, in light of the presumption in favour of the Complainant u/s 139 NI Act, however, once the said financial capacity has been question by the Accused, on the basis of material available on record, the onus to prove the same, is on the Complainant. In the present case, since the Accused has himself in his statements u/s 251 CrPC and 313 CrPC stated that he has taken Rs. 2,00,00,000/- from the Complainant (and the cumulative value of the cheques in the present complaint and connected matters, i.e., complaints bearing CC No. 626089/2016, CC No. 618063/2016, CC No. 626088/2016 and CC No. 625643/2016 is Rs. 2,12,00,000/-) and the Complainant has in his cross-examination stated that he has taken money from the persons mentioned in Mark CB, it cannot be said that the Accused has been able to raise a question on the financial capacity of the Complainant to advance the amount to the Accused. This is for the reason that the advancement of Rs. 2,00,00,000/- is admitted by the Accused himself, and the advancement of Rs. 56,50,000/- is by way of bank transfer, which has not been questioned or denied by the Accused. Hence, the ITR filed by DW1 of the Accused which show a much lesser income of the Complainant, does not help in rebutting the financial capacity of the Complainant, in light of the aforesaid discussion/admission of the Accused. It is for this reason that the facts of the case before the Hon'ble Supreme Court in Rajaram Sriramulu Naidu (D) vs Maruthachalam (D), Criminal Appeal No. 1978 of 2013 (Decided on 18.01.2023) are distinguishable from the facts in the present case. Page 20 of 27
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33.Further, Ld. Counsel for the Accused has also stated that the Complainant has not been able to establish that he has taken money from the persons mentioned in Mark CB as the receipt, dt. 07.03.2014 qua Sh. Nadeem Ahmed, which has been brought on record by the Accused as Mark CF shows that the amount of Rs. 5,00,000/- was returned by the Complainant to Nadeem Ahmed on 14.02.2013. However, as per the complaint, the last installment was given by the Complainant to the Accused on 10.01.2013. Hence, if the last installment of the investment was given by the Complainant to the Accused on 10.01.2013, it does not appear probable that he would take a loan for advancing to the Accused on 14.02.2013. Hence, Ld. Counsel for the Accused submits that even this version of the Complainant's case is falsified.
34.In the present case, since the Accused has himself in his statements u/s 251 CrPC and 313 CrPC stated that he has taken Rs. 2,00,00,000/- from the Complainant (and the cumulative value of the cheques in the present complaint and connected matters, bearing CC No. 626089/2016, CC No. 618063/2016, CC No. 626088/2016 and CC No. 625643/2016 is Rs. 2,12,00,000/-), this fact does not negate the version of the Complainant.
(iii) The alleged investment is an unaccounted transaction and hence no liability u/s 138 NI Act can ensue:
35.Ld. Counsel for the Accused has submitted that as per the case of the Complainant the majority investment was advanced by the Complainant in cash to the Accused He has further submitted that as per the Income Tax Act, 1961, no transaction above Page 21 of 27 Mohd. Taiyyab v. Mohd. Danish Ahmad CC No.626088/2016 Rs. 20,000/- can be made in cash and hence, the aforesaid transaction is prohibited. Accordingly, he submits that the alleged investment, if any, is an illegal transaction. In this regard, it is seen that the Hon'ble High Court of Delhi in Dilip Chawla v. Ravinder Kumar and Ors., 2017 SCC OnLine Del. 9753, ("Dilip Chawla Case") has observed that the advancement of funds in cash entails negative consequences for a person for having acted in breach of Section 269SS of the Income Tax Act; and that the breach of the same provides penalty u/s 271(D) IT Act. However, it was observed by the Hon'ble High Court of Delhi that Section 271(D), IT Act does not state that the said transaction would be null and void; and hence, the said money may be recovered, albeit subject to penalty. Hence, by virtue of fact that the said transaction was made in cash and was more than Rs. 20,000/-, though it may attract penalty as per the provisions of Income Tax Act, does not make transaction inherently illegal for the purposes of Section 138 NI Act.
(iv) Non-filing of ITR by the Complainant and non-disclosure of the advancement in the ITR by the Complainant, renders the transaction improbable/illegal:
36.With respect to this contention, it is noted that it is trite law that non-disclosure of the transaction in ITR, may give rise to consequences under Income Tax Act, 1961; but does not make the transaction illegal/void; and hence the liability under Section 138 NI Act, remains untouched. Reliance is placed on the decision of Delhi High Court in Dilip Chawla Case (supra). Hence, infraction of provisions of the Income Page 22 of 27 Mohd. Taiyyab v. Mohd. Danish Ahmad CC No.626088/2016 Tax Act, 1961 remain a matter between revenue and defaulter and the advantage thereof cannot be taken by defaulting borrower.
(v) The cheque in question is a security cheque, which has been misused by the Complainant:
37.It has been submitted by Ld. Counsel for the Accused that the cheque in question was given as a blank signed cheque for security, which has been misused. The defence of the Accused is that the amount of Rs. 2,00,00,000/-, which was taken from the Complainant has been repaid in installments in cash. However, no defence evidence has been led by the Accused to prove the said repayment. In fact, even in the cross-examination of the Complainant, not a single question on the repayment of the said amount has been put to the Complainant by the Accused. The details of the said repayment, i.e., the number of installments, the amount of each installment, the time period of repayment, have also not been set out by the Accused, at any stage of trial. Further, the cheque in question has been dishonored on the ground of "Funds Insufficient" and not payment stopped by drawer; which means that even after the alleged repayment of the amount by the Accused to the Complainant, no stop instructions were issued by the Accused in respect of said cheque in question, despite the non-return of the cheque in question to the Accused.
38.No written request for return of the cheque in question has also been placed by the Accused. Further, no FIR or complaint has been lodged by the Accused against the Complainant for non- return of the cheque/misuse of the cheque. Page 23 of 27
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39.The Hon'ble Delhi High Court in VS. Yadav v. Reena, 172 (2010) DLT 561, where the Accused had similarly pleaded that no loan was ever taken and yet the security cheques were not returned by Complainant; noted that:
"In order to rebut the presumption under Section 139 of N.I. Act, the Accused, by cogent evidence, has to prove the circumstance under which cheques were issued. It was for the Accused to prove if no loan was taken why he did not write a letter to the Complainant for return of the cheque. Unless the Accused had proved that he acted like a normal businessman/prudent person entering into a contract he could not have rebutted the presumption under section 139 N.I. Act. If no loan was given but cheques were retained, he immediately would have protested and asked the cheques to be returned and if still cheques were not returned, he would have served a notice as Complainant. Nothing was proved in this case."
40.Similarly, the Hon'ble Supreme Court in Shree Daneshwari Traders v. Sanjay Jain & Anr., AIR 2019 SC 4003, observed that:
"the defence of the Respondent that though he made payment for the commodities/rice bags, the blank cheques were not returned by the Appellant-Complainant is quite unbelievable and unacceptable." (emphasis supplied)
41.Moreover, recently, the Hon'ble Supreme Court in APS Forex Case (supra) has noted that:
Page 24 of 27
Mohd. Taiyyab v. Mohd. Danish Ahmad CC No.626088/2016 "However, to rebut the presumption, the Accused was required to lead the evidence that full amount due and payable to the Complainant has been paid. In the present case, no such evidence has been led by the Accused. The story put forward by the Accused that the cheques were given by way of security is not believable in the absence of further evidence to rebut the presumption."
(emphasis supplied)
42.In view hereof, the contention of the Accused qua repayment of the amount to the Complainant, in absence of any receipts; absence of legal action/communication seeking return of the security cheque, non-issuance of stop instructions qua the cheque in question; does not help in rebutting the presumption u/s 139 NI Act.
(vi) Non specification of nature of transaction by the Complainant:
43.Ld. Counsel for the Accused has also submitted that since the nature of the transaction has not been set out by the Complainant in his complaint properly and it is only mentioned that there was some investment in relation to projects undertaken by the Accused, there is vagueness in the case of the Complainant and the presumption u/s 139 NI Act stands rebutted. However, it is noted that on this ground alone, the presumption u/s 139 NI Act cannot be rebutted. The Hon'ble Supreme Court in P. Rasiya v. Abdul Nazer (Crl. Appeal No. 1233-1235 of 2022, decided on 12.08.2022) has observed as follows:
"By the impugned common judgment and order, the High Court has reversed the concurrent findings recorded by both the courts below and has acquitted the Accused on the ground that, in the complaint, the Complainant has not Page 25 of 27 Mohd. Taiyyab v. Mohd. Danish Ahmad CC No.626088/2016 specifically stated the nature of transactions and the source of fund. However, the High Court has failed to note the presumption under Section 139 of the N.I. Act. As per Section 139 of the N.I. Act, 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 discharge, in whole or in part, of any debt or other liability. Therefore, once the initial burden is discharged by the Complainant that the cheque was issued by the Accused and the signature and the issuance of the cheque is not disputed by the Accused, in that case, the onus will shift upon the Accused to prove the contrary that the cheque was not for any debt or other liability. The presumption under Section 139 of the N.I. Act is a statutory presumption and thereafter, once it is presumed that the cheque is issued in whole or in part of any debt or other liability which is in favour of the Complainant/holder of the cheque, in that case, it is for the Accused to prove the contrary. The aforesaid has not been dealt with and considered by the High Court."
44.Hence, on the ground of non-specification of the exact nature of transaction, by the Complainant, the presumption u/s 139 NI Act cannot be said to be rebutted. Conclusion:
45.In these circumstances and in view of the above detailed discussion, this court is of the considered opinion that the Accused has failed to rebut the presumption under Section 139 of Negotiable Instruments Act, 1881 in favour of the Complainant and ingredients of Section 138 of Negotiable Instruments Act, 1881 are fully proved. Page 26 of 27
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46.Therefore, Accused is held guilty and convicted for commission of offence punishable under Section 138 of the Negotiable Instrument Act, 1881.
ORDER: CONVICTED
Announced in Open Court (Twinkle Chawla)
MM-05, South East
Saket Court, New Delhi
Note: This judgment contains 27 pages and each page has been signed by me.
(Twinkle Chawla) MM-05, South East Saket Court, New Delhi Page 27 of 27