Delhi District Court
Rajpal Singh vs Vineet Khanna on 1 February, 2025
IN THE COURT OF Ms. AASTHA SHARMA, LD. JMIC (N.I. Act)-09,
SOUTH-WEST DISTRICT, DWARKA COURTS COMPLEX:
DELHI
RAJPAL SINGH v. VINEET KHANNA
Ct. Cases No. 26468/2018
U/S 138 Negotiable Instruments Act, 1881
1. CNR number DLSW02-028576-2018
2. Name of the complainant Sh. Rajpal Singh,
S/o Late Sh. Gurbachan Singh
R/o 139/2, Mukherjee Park,
Tilak Nagar, New
Delhi-110018.
Sh. Vineet Khanna
3. Name of the accused person(s),
parentage & residential address S/o Sh. Sheetal Khanna
R/o Plot No. 98, 3rd Floor,
Pocket-13, Sector-24, Rohini,
New Delhi-110085.
4. Offence complained of or proved U/s 138 of Negotiable
Instruments Act, 1881
5. Plea of the accused Pleaded not guilty and claimed
trial
Ct. Cases No. 26468/2018 RAJPAL SINGH v. VINEET KHANNA 1
6. Final Judgment/order Convicted
7. Date of judgment/order 01.02.2025
Date of Institution: 23.07.2018
Date of Reserving Judgment/Order: 04.01.2025
Date of Pronouncement of Judgment/Order: 01.02.2025
ARGUING COUNSELS:
Ld. Counsel for the complainant: Sh. Nishant Sharma, Ld. Counsel for
complainant.
Ld. Counsel for the Accused: Sh. B.C. Tyagi, Ld. Counsel for accused.
JUDGMENT
1. Vide this judgment, this Court shall dispose of the present complaint filed by the complainant Sh. Rajpal Singh (hereinafter referred to as "complainant") against Sh. Vineet Khanna (hereinafter "accused") under Section 138 of the Negotiable Instruments Act, 1881 read with Section 142 of Negotiable Instruments Act, 1881 (hereinafter referred to as "NI Act").
Brief facts of the case:
2. It is the case of the complainant, Ct. Cases No. 26468/2018 RAJPAL SINGH v. VINEET KHANNA 2 A. That, the complainant's daughter Amanpreet Kaur and Shikha Sachdeva were good friends and had family relations with each other and the accused is the brother of Shikha Sachdeva. That, the complainant's daughter and family members of the accused were having regular dealings amongst themselves and the complainant would regularly advance friendly loans to the accused and his family members.
B. That, in the second week of February 2016, the accused along with his sister approached the complainant and showed that he is in urgent need of money and asked for financial assistance of Rs. 2,50,000/- to meet his personal needs, and that the accused shall repay the same within 4 months. That, in pursuance of the same, the complainant lent the accused a friendly loan to the tune of Rs. 2,50,000/- by way of cash on 17.02.2016.
C. That, after the expiry of 4 months when the complainant asked the accused to make the payment, the accused in discharge of the aforesaid legally recoverable debt of Rs. 2,50,000/-, issued a post-dated cheque bearing no. 000026 dated 20.05.2018 for an amount of Rs. 2,50,000/- drawn on Bank of Baroda, East of Kailash, New Delhi-110065 in favour of the complainant.
D. That, while issuing the aforesaid cheque, the accused had assured the complainant that the aforesaid cheque is good for payment and shall be honored on presentation. That, on presentation of the aforesaid cheque no. 000026 dated 20.05.2018, amounting to Rs. 2,50,000/- in his bank Axis Bank, Sector 5, Dwarka, New Delhi for encashment, the cheque was returned dishonoured with the remarks "Payment Stopped by Drawer" vide returning memo dated 25.05.2018.
Ct. Cases No. 26468/2018 RAJPAL SINGH v. VINEET KHANNA 3 E. In these circumstances, the complainant got issued a statutory legal demand notice to the accused through his counsel, dated 19.06.2018, thereby requiring the accused to pay the amount of the aforesaid cheque 000026, amounting to a total of Rs. 2,50,000/- within a period of 15 days from the receipt of the said notice. The said notice under Sec. 138 of NI Act was sent to the accused through Courier on 19.06.2018 and Registered AD and Speed Post at his correct address on 20.06.2018. It is further submitted by the complainant that the said notice was sent at the last known address of the accused person and was duly served upon the accused person.
F. That despite service of the above stated notice of demand, the Accused has deliberately and wilfully failed to comply with the said notice of demand and has failed to pay the amount of the aforesaid cheque within the stipulated period of 15 days from the date of receipt of the said notice. Consequently, this case was filed by the complainant against the accused, which was within the limitation period as laid down u/s 138, NI Act.
Proceedings before the court:
3. Upon a prima facie consideration of pre-summoning evidence, it appeared that the offence u/s 138 NI Act has been made out. After leading pre-
summoning evidence by the complainant, cognizance of the offence u/s 138, NI Act was taken against the accused person and he was summoned vide order dated 24.07.2018. Thereafter, on accused entering into an appearance on 20.05.2019, a separate notice was framed against the accused u/s 251 of the Code of Criminal Procedure, 1973 (hereinafter "CrPC") on 20.05.2019, which was read over and explained to him, to which the accused pleaded not guilty and claimed trial. At the stage of framing notice, the following aspects were admitted/denied by him:
Ct. Cases No. 26468/2018 RAJPAL SINGH v. VINEET KHANNA 4
(i) Issuance of cheques to the complainant : Admitted
(ii) Signatures on the cheque in question : Admitted
(iii) Receiving the legal demand notice : Denied In his defense, the accused has stated that around two years back, the complainant told him that he can get the loan arranged from the bank for him and on the pretext of arranging a loan, the complainant took about 30 blank signed cheques and 5-6 blank signed papers with stamps from the accused. The accused further stated that he gave 6 cheques of his mother, 4 cheques of his father and 4 cheques of his brother-in-law as blank signed cheques to the complainant upon his asking for the same for arranging the loan and the complainant never returned those cheques. The accused has further stated that the complainant has misused the cheque in question.
4. During the trial, the complainant has led the following oral and documentary evidence by way of an affidavit Ex. CW1/1A, against the accused to prove its case beyond reasonable doubt and relied upon the following documents :-
● The original cheque in question bearing no. 000026 is exhibited as Ex-CW1/A. ● The original returning memo dated 25.05.2018 is Ex-CW1/B. ● The legal notice is Ex-CW1/C. ● The Speed post & Courier receipts are Ex-CW1/D1 & Ex-CW1/D2.
● The Tracking Report is exhibited as is Ex-CW1/E1 & Ex-CW1/E2.
Ct. Cases No. 26468/2018 RAJPAL SINGH v. VINEET KHANNA 5 ● The statement of accounts is Ex-CW1/D1 & Ex-CW1/D2.
The ITR for the relevant year is Ex-CW1/D3 & Ex-CW1/D4.
The agreement executed between the complainant and the accused dated 17.02.2016 is Ex- CW1/D5.
The copy of agreement executed between the complainant and the accused dated 16.02.2016 is Mark CW1/D6.
Thereafter, the accused was granted an opportunity to cross-examine the complainant CW-1 under Section 145(2), NI Act and the complainant witness was duly cross-examined by the Ld. Counsel for the accused. Thereafter, CE was closed vide order dated 08.01.2020.
5. Thereafter, before the start of defence evidence, in order to allow the accused to personally explain the circumstances appearing in evidence against him, his statement under Section 313 CrPC was recorded without oath.
6. The accused opted to lead defence evidence during the statement under Section 313 CrPC, and he examined himself as DW-1, vide an application u/s 315 CrPC moved on behalf of the accused which was allowed by this Hon'ble court in the interest of justice vide order dated 01.04.2022. DW-1 was examined, cross-examined and discharged. DE was closed vide order of this court on 18.11.2022.
7. Thereafter, the matter was listed for final arguments. After hearing the final arguments from both sides and on the basis of the written submissions on record by both the parties, the matter was reserved for pronouncement of judgment.
Ct. Cases No. 26468/2018 RAJPAL SINGH v. VINEET KHANNA 6 Arguments advanced by both the parties:
8. Ld. Counsel for the complainant while reiterating the contents of the complaint has argued that all the requirements of Section 138, NI act have been fulfilled by the complainant in the present case. Ld. counsel for the complainant submits that the loan was advanced to the accused after execution of a friendly loan agreement which the accused has not denied while cross-examining the complainant.
9. Ld. Counsel for the complainant submits that the accused has admitted to the issuance of cheque in question and signature on the cheque in question, which means the presumption u/s 139, NI Act is raised against the accused. Ld. counsel for the complainant further submits that once the presumption is raised against the accused and legally enforceable liability is established, then source of income of the complainant is irrelevant.
10. Ld. Counsel for the complainant further submits that the defence of the accused is that the accused approached the complainant for a loan from the bank for which the complainant took 30 blank signed cheques and 5-6 blank signed papers with stamp from the accused and 14 blank signed cheques from relatives of the accused, however the accused has not filed any complaint against any authority for return of the said cheques and misuse of such cheques and blank signed papers.
11. Ld. Counsel for the complainant further submits that since all the ingredients u/s 138, NI Act have been fulfilled, the accused is liable for the offence u/s 138, NI Act and be punished with maximum punishment in Ct. Cases No. 26468/2018 RAJPAL SINGH v. VINEET KHANNA 7 accordance with law and be punished with imprisonment for a term of two years and fine of double of the amount of the said cheque.
12. Per contra, Ld. Counsel for the accused submits that the complainant has misused the cheque of the accused alongwith other cheques of family members of the accused and have filed multiple cases against the accused.
13. Ld. Counsel for the accused further submits that the complainant was not earning at the relevant period when he has claimed to have extended the loan to the accused and therefore had no financial capacity to lend the sum as stated in the complaint. It is further submitted by the Ld. Counsel for the accused that the complainant has stated that he has borrowed some amount from his brother and sister in cash to extend the loan to the accused, however the brother and sister of the accused have not been made witnesses to the present case.
14. Ld. counsel for the accused, in consequence, has prayed that the accused be acquitted as the conditions for Section 138, NI Act have not been fulfilled and the complainant has misused the cheques against the accused.
Appreciation of evidence:
15. I have heard counsels on behalf of both the sides, perused the record as well as relevant provisions of law.
16. Before appreciating the facts of the case in detail for the purpose of decision, let relevant positions of law be discussed first. Section 138, NI provides as under:
"Section 138.- Dishonour of cheque for insufficiency, etc., of funds in the account.-
Ct. Cases No. 26468/2018 RAJPAL SINGH v. VINEET KHANNA 8 Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both:"
Provided that nothing contained in this section shall apply unless:
(A) The cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(B) The payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;
and (C) The drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
Explanation -- for the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability.
Ct. Cases No. 26468/2018 RAJPAL SINGH v. VINEET KHANNA 9
17. It is well settled position of law that to constitute an offence under Section 138, NI Act, the following ingredients are required to be fulfilled:
I. drawing of the cheque by a person on an account maintained by him with a banker, II. The cheque was issued for payment to another person for discharge in whole/part any debt or liability;
III. Cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier. RBI in its notification DBOD.AML BC.No.47/14.01.001/2011-12 has reduced the aforesaid period from 6 months to 3 months.
IV. Returning of the cheque unpaid by the drawee bank for want of sufficient funds to the credit of the drawer or any arrangement with the banker to pay the sum covered by the cheque;
V. Giving notice in writing to the drawer of the cheque within 30 days of the receipt of information by the payee from the bank regarding the return of the cheque as unpaid demanding payment of the cheque amount;
VI. Failure of the drawer to make payment to the payee or the holder in due course of the cheque, of the amount covered by the cheque within 15 days of the receipt of the notice.
The offence under Section 138, NI Act is made out against the drawer of the cheque, only when all the aforementioned ingredients are fulfilled.
18. In the present case at hand, the complainant has filed on record the original cheques, i.e., bearing no. 000026 dated 20.05.2018 amounting to Rs. 2,50,000/-, Ct. Cases No. 26468/2018 RAJPAL SINGH v. VINEET KHANNA 10 drawn on Bank of Baroda, East of Kailash, New Delhi (Ex. CW1/A). In notice under Section 251 CrPC, the accused has admitted that the cheque in dispute belongs to him. It is also not disputed that the cheque in question is not drawn on the account maintained by the accused person and it is impliedly admitted therefore that the accused is the drawer of the cheque. Therefore, ingredient number I stands fulfilled in the present case.
19. As per the RBI guidelines, it is essential for the cheque in question be to presented within a period of three months from the date on which they are drawn and the same be returned as unpaid by the drawee bank for want of sufficient funds to the credit of the drawer or any arrangement with the banker to pay the sum covered by the cheque. In the case at hand, the cheques in question, i.e., cheque bearing no. 000026 Ex. CW1/A dated 20.05.2018 was returned vide return memo dated 25.05.2018 (Ex. CW1/B) due to the reason "Payment Stopped by Drawer." By implication thereof, the cheque was presented within three months and the same was returned for want of sufficient funds to the credit of the drawer. Therefore, Ingredient number III & IV stand fulfilled in the present case.
20. The legal notice dated 19.06.2018 (Ex. CW1/C) was dispatched on 19.06.2018 vide Courier (Ex. CW1/D2) and on 20.06.2018 vide speed post (Ex. CW1/D1), i.e., within 30 days of return of the bank memo indicating cheque in question being unpaid. The fact that the legal demand notice has made a clear and unambiguous demand for payment of the cheque in question is not disputed. The accused has not admitted to the receipt of legal demand notice in notice u/s 251 CrPC, however, the address on the legal demand notice is the same as the address mentioned at the stage of notice u/s 251 CrPC and statement of accused u/s 313 CrPC. Furthermore, as per the presumption raised under Section 114 of Indian Evidence Act, 1872 and Section 27 of General Ct. Cases No. 26468/2018 RAJPAL SINGH v. VINEET KHANNA 11 Clauses Act, if the legal demand notice is sent at the correct address, then the same shall be deemed to have been duly served. As per the precedent laid down by the Hon'ble Supreme Court in C.C. Alavi Haji v. Palapetty Muhammed, (2007) 3 SCC (Cri), "A person who does not pay within 15 days of receipt of the summons from the court along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the GC Act and Section 114 of the Evidence Act."
In K. Bhaskaran vs Sankaran Vaidhyan Balan and Anr, Appeal (crl.) 1015 of 1999 (SC) (hereinafter referred to as "K. Bhaskaran"), the Hon'ble SC observed:
"On the part of the payee he has to make a demand by `giving a notice' in writing. If that was the only requirement to complete the offence on the failure of the drawer to pay the cheque amount within 15 days from the date of such `giving' the travails of the prosecution would have been very much lessened. But the legislature says that failure on the part of the drawer to pay the amount should be within 15 days `of the receipt' of the said notice. It is, therefore, clear that `giving notice' in the context is not the same as receipt of notice."
Ct. Cases No. 26468/2018 RAJPAL SINGH v. VINEET KHANNA 12 The burden of giving notice within 30 days of return of bank memo, falls on the complainant/payee to constitute the offence u/s 138, NI Act. If the notice is sent on the correct address, then the presumption u/s 27 General Clauses Act and Section 114, Indian Evidence Act arises in the favour of the complainant/payee.
Therefore, it is deemed that the legal notice was duly served on the accused person.
The ingredient number V is fulfilled by virtue of giving legal demand notice within 30 days from the bank return memo. The receipt of legal demand notice by the accused is deemed to be admitted as per the discussion above.
21. Moving on, it is not disputed that the accused has not made the payment of the cheque amount within 15 days of the receipt of legal demand notice. Therefore, ingredient number VI also stands fulfilled in the present case.
22. Let us now move on to ingredient number II, The NI Act raises two presumptions in favour of the holder of the cheque, i.e., complainant; firstly, with regard to the issuance of cheque for consideration, as contained in Section 118(a) and secondly, with regard to the fact that the holder of cheque received the same for discharge, in whole or in part, of any debt or other liability, as contained in Section 139 of the Act.
Analysing all the concerned provisions of law and various pronouncements in this regard, the Hon'ble Apex Court in the case of Basalingappa v. Mudibasappa [AIR 2019 SC 1983] held that:
I. Once the execution of cheque is admitted, Section 139 of the Act mandates that a presumption be drawn that the cheque in question was for the discharge of any debt or other liability.
Ct. Cases No. 26468/2018 RAJPAL SINGH v. VINEET KHANNA 13 II. The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
III. To rebut the presumption, it is open for the accused to rely on evidence led by him or 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 reference to the circumstances upon which they rely.
IV. That it is not necessary for the accused to come in the witness box in support of his defence. Section 139 imposes an evidentiary burden and not a persuasive burden.
It is therefore implied that the law regarding the presumption for the offence under Section 138, NI Act, the presumptions under Section 118(a) and Section 139 have to be compulsorily raised as soon as the execution of cheque by the accused is admitted or proved by the complainant and thereafter the burden is shifted upon the accused to prove otherwise.
23. These presumptions shall end only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability etc. The Hon'ble Apex Court in Kumar Exports v. Sharma Carpets [(2009) 2 SCC 513], has laid down the benchmark for the burden of proof that the accused has to raise a doubt as to the presumption under Section 139, NI Act.
"The accused in a trial under Section 138 of the Act has two options. He can either show that consideration and debt did not exist or that under the particular Ct. Cases No. 26468/2018 RAJPAL SINGH v. VINEET KHANNA 14 circumstances of the case the non-existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumptions, an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not 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, 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. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability, the accused may Ct. Cases No. 26468/2018 RAJPAL SINGH v. VINEET KHANNA 15 also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on to the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arising under Sections 118 and 139 of the Act. The accused has also an option to prove the non-existence of consideration and debt or liability either by letting in evidence or in some clear and exceptional cases, from the case set out by the complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial. Once such rebuttal evidence is adduced and accepted by the court, having regard to all the circumstances of the case and the preponderance of probabilities, the evidential burden shifts back to the complainant and, thereafter, the presumptions under Sections 118 and 139 of the Act will not again come to the complainant's rescue."
To put in a nutshell, the intent behind the NI Act is to prevent financial frauds and affect the socio-economic well-being of the country. If the burden is placed on the complainant to prove the existence of liability against the accused, that would be too heavy a burden as most of these transactions are in the nature of "friendly loan" and the accused would, in a normal circumstance, always deny the liability. Therefore, the legislation is drafted in a way so as to discharge the complainant from proving the liability and a presumption is raised by virtue of Ct. Cases No. 26468/2018 RAJPAL SINGH v. VINEET KHANNA 16 Section 139 read with Section 118(a) of the Act that the cheque if issued by the accused, then the same is deemed to be in discharge of some legally enforceable debt in favour of the complainant. The presumption is rebuttable and the accused "may" either prove that no legally enforceable debt existed or punch holes in the story of the complainant and give rise to a probable defence to rebut the presumption. As per the law discussed above, the burden of proof on the accused to raise a probable defence is that of "preponderance of probabilities", and not "beyond reasonable doubt." Once a probable defence is raised, then the onus is shifted to the complainant to establish that a legally enforceable liability existed in his favour and the burden of proof on the complainant in this case is that of "beyond reasonable doubt."
28. The accused can rebut the presumption as raised under the NI Act by (a) putting forth his defence at the time of framing of notice u/s 251 CrPC; (b) cross-examining the complainant; (c) when statement of accused is recorded u/s 313 CrPC; (d) or by leading defence evidence, thereby demolishing the case of the complainant. It is amply clear that the accused does not need to discharge his or her liability beyond the shadow of reasonable doubt. He just needs to create holes in the case set out by the complainant. Accused can say that the version brought forth by the complainant is inherently unbelievable and therefore the prosecution cannot stand.
24. In light of the above discussion, since the accused has admitted to issuance of cheque, admitted the signatures on the cheque and legal notice has also been deemed to be served, what is left to be seen is whether the accused has been able to rebut the presumption against him, i.e., whether the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt?
Ct. Cases No. 26468/2018 RAJPAL SINGH v. VINEET KHANNA 17
25. The complainant in his complaint has stated that the accused has borrowed a sum of Rs. 2,50,000/- from the complainant in cash and an agreement was executed in pursuance of that on 17.02.2016 which is placed on record as Ex. CW1/D5. The primary defence of the accused is that the accused had contacted the complainant for a loan in 2016 and the complainant had agreed to get it financed from a bank, against which the accused had given 30 blank signed cheques by him, 4 cheques belonging to his mother, brother and brother-in-law each to the complainant alongwith 6 blank signed stamp papers to the complainant. It seems highly imprudent for a person to hand over more than 40 blank signed cheques to the complainant for financing a loan and 6 blank signed papers along with it, without taking any undertaking. Furthermore, the accused has never taken any active steps for return of the cheques and the blank signed stamp papers from the complainant, nor has he filed any complaint in front of any authority regarding the misuse of such cheques and blank signed papers by the complainant.
26. Furthermore, the accused has neither admitted nor denied execution of the agreement between complainant and the accused dated 17.02.2016 Ex. CW1/DW5 which clearly states that the accused has borrowed a sum of Rs. 2,50,000/- from the complainant in cash for urgent personal need.
Section 91 of the Indian Evidence Act 1872 (hereinafter, IEA) deals with the documents which are reduced into writing. Section 91 IEA is read with Section 92 IEA while appreciating a written document, which has been brought on record in this case. The Hon'ble Apex Court in Roop Kumar vs Mohan Thedani (2003) 6 SCC 595 quoted with approval in V Anantha Raju vs T.M. Rarasimhan (Civil Appeal no 6469 of 2021 dated 26.10.2021 has held that:
Ct. Cases No. 26468/2018 RAJPAL SINGH v. VINEET KHANNA 18 "Section 91 and 92 Evidence Act would apply only when the document on the face of it contains or appears to contain all the terms of the contract. It has been held that after the document has been placed to prove the terms under Section 91, the provisions of Section 92 comes into operation for the purpose of excluding evidence of any oral agreement or statement for the purpose of contradicting, varying, adding or subtracting from its terms."
It has been further held by the Hon'ble Apex Court in V Anantha Raju vs T.M. Rarasimhan (Civil Appeal no 6469 of 2021 dated 26.10.2021 while relying on Roop Kumar vs Mohan Thedani (2003) 6 SCC 595) that:
"When the parties deliberately put their agreement in writing, it is conclusively presumed, between themselves and their privies, that they intended the writing to form a full and final settlement of their intentions, and one which should be played beyond the reach of future controversy, bad faith and treacherous memory."
Therefore, there is a presumption as to genuineness and correctness of the document, i.e., Ex. CW1/D5 which clearly states that the accused has borrowed a sum of Rs. 2,50,000/- from the complainant and the complainant shall return the same within the specified duration. The document in question is not denied by the accused and in fact, the accused has admitted to the signatures on the document, however has stated that the complainant had taken his signatures on the blank signed stamp papers and has implied that the same papers must have been misused by the complainant.
Ct. Cases No. 26468/2018 RAJPAL SINGH v. VINEET KHANNA 19 However, the signatures on the agreement in question Ex. CW1/D5 indicate that the same are coincidentally positioned appropriately to the entire document and therefore there is nothing on record that would lead the court to entertain a doubt upon the genuineness of a legal document.
27. Furthermore, the reason for dishonour of the cheque in question as indicated by the return memo Ex. CW1/B is "Payment Stopped by Drawer", which indicates that the accused had intentionally stopped payment on the cheque in question and shows the mala fide of the accused that he never intended to return the amount owed to the complainant. The accused has nowhere offered any explanation as to why he has stopped payment on the cheque in question. Furthermore, the accused has nowhere stated if he ever received any loan from the complainant for which the accused had approached the complainant. Despite not receiving any sum from the complainant or from a bank through the complainant, the accused has neither asked the complainant to return the cheques or filed any complaint against the complainant. The conduct of the accused person seems to be doubtful and of a prudent person.
28. The accused has taken a consistent defence of approaching the complainant for financing a loan, however the accused has merely made bald suggestions without any proof. In that regard, the Hon'ble Supreme Court of India in Rohitbhai J. Patel v. The State of Gujarat, Criminal Appeal no. 508/2019 held as follows:
"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 Ct. Cases No. 26468/2018 RAJPAL SINGH v. VINEET KHANNA 20 or want of evidence as regards source of funds were not of relevant consideration while examining if the accused has been able to rebut the presumption or not. The other observations as regards any variance in the statement of complainant and witness; or want of knowledge about dates and other particulars of the cheques; or washing away of the earlier cheques in the rains though the office of the complainant being on the 8th floor had also been of irrelevant factors for consideration of a probable defence of the appellant it is noticed that the Trial Court proceeded on a misplaced assumption that by mere denial or mere creation of doubt, the appellant had successfully rebutted the presumption as envisaged by Section 139 of the NI Act. In the scheme of NI Act, mere creation of doubts is not sufficient."
29. As per the discussion above in the cases of Basalingappa (2019, supra) and Kumar Exports (2009, supra), once the presumption is raised u/s 118 read with Section 139, NI Act that the cheques were issued for consideration, i.e., for a legally enforceable debt in favour of the complainant, then onus of proof shifts to the accused to rebut the presumption by raising a probable defence. In the present case, when the issuance of cheques and signatures on the cheques were admitted by the accused, a presumption u/s 118 read with Section 139 has been raised that the cheques were issued by the accused for consideration. The accused has not only been unable to rebut the presumption, but he has also admitted to the consideration of approaching the complainant for getting a loan financed through him and issuing the signed security cheques to the Ct. Cases No. 26468/2018 RAJPAL SINGH v. VINEET KHANNA 21 complainant. Furthermore, the document Ex. CW1/D5 corroborates the version of the complainant.
30. Qua the defence raised by the accused vis-a-vis the financial capacity of the complainant to lend the sum of Rs. 2,50,000/- to the accused. The burden was upon the accused to rebut the statutory presumption raised in favour of the complainant as per section 118 and section 139 of the NI Act and the burden of the accused cannot be thrusted upon the complainant by bringing forth such an argument that the complainant has himself not placed on record any documentary evidence to prove his case. It was only in a circumstance where the accused would have been able to discharge his burden of proof and rebut the statutory presumption taken in favour of the complainant, that the burden would have been shifted upon the complainant. In the instant case the accused has failed to discharge his initial onus of proof either by establishment of his own defence or by creating a doubt in the mind of the court upon the complainant's case and hence the accused has failed to rebut the presumption taken in favour of the complainant. It was held in the case of Rohitbhai Jivanlal Patel v. State of Gujarat (2019) 5 SCALE 138, "In the case at hand, even after purportedly drawing the presumption under Section 139 of the NI Act, the Trial Court proceeded to question the want of evidence on the part of the complainant as regards the source of funds for advancing loan to the accused and want of examination of relevant witnesses who allegedly extended him money for advancing it to the accused. This approach of the Trial Court had been at variance with the principles of presumption in law. After such presumption, the onus Ct. Cases No. 26468/2018 RAJPAL SINGH v. VINEET KHANNA 22 shifted to the accused and unless the accused had discharged the onus by bringing on record such facts and circumstances as to show the preponderance of probabilities tilting in his favour, any doubt on the complainant's case could not have been raised for want of evidence regarding the source of funds for advancing loan to the accused-appellant. The aspect relevant for consideration had been as to whether the accused-
appellant has brought on record such facts/material/circumstances which could be of a reasonably probable defence."
Besides this, the complainant in his evidence has stated that he has procured the sum for lending loan to the accused partly from his own savings, partly from his rental income and partly from his brother and sister. Therefore, questioning the source of funds of the complainant without any basis seems redundant and evasive. There is nothing on record that would lead the court to entertain a doubt upon the financial capacity of the complainant.
31. In the present case, the accused has failed to even create any doubt, let alone discharging his burden of proof to rebut the presumption u/s 139, NI Act. Further, the accused is obligated to set up a probable defence and not a possible defence, i.e., there should be some credible material or circumstance on record to show that the defence taken by the accused is a probable one. In the present case, firstly, the accused has not brought any witness on record nor brought any documentary evidence on record to substantiate his claims. It is the duty of the accused to punch holes in the story of the complainant which he has not been able to do. Secondly, the complainant has brought documentary evidence so as Ct. Cases No. 26468/2018 RAJPAL SINGH v. VINEET KHANNA 23 to prove his version of the story alongwith the benefit of presumption raised u/s 139, NI Act in his favour.
32. In light of the discussion above, ingredient no. II has been fulfilled in the present case.
Conclusion:
33. In view of the evidence adduced, documents put forth and arguments advanced by the parties and further in view of the above discussion, the court is of the considered view that accused Vineet Khanna is guilty of offence under Section 138 of Negotiable Instruments Act, 1881 and accordingly, accused is hereby convicted under Section 138 of Negotiable Instruments Act, 1881.
Digitally
PRONOUNCED IN THE OPEN COURT signed by
AASTHA
AASTHA SHARMA
TODAY ON 01.02.2025. SHARMA Date:
2025.02.01
16:30:50
+0530
(Aastha Sharma)
Judicial Magistrate-Ist Class
(NI Act)-09/South-West,
Dwarka/01.02.2025
This judgment consists of 24 pages and all pages are duly signed by me.
Ct. Cases No. 26468/2018 RAJPAL SINGH v. VINEET KHANNA 24