Delhi District Court
Dharambir Singh vs K.K Sharma on 20 September, 2024
IN THE COURT OF SH. MAYANK AGGARWAL
JUDICIAL MAGISTRATE FIRST CLASS-01, N.I. ACT,
SOUTH DISTRICT, SAKET COURTS, DELHI
CT Case no. 469491/2016
PS-Sangam Vihar
u/s 138 of the Negotiable Instruments Act, 1881
Dharambir Singh vs K.K Sharma
JUDGMENT
A. S.NO. OF THE CASE : 469491/2016
B. DATE OF INSTITUTION : 18.03.2015
C. DATE OF OFFENCE : After 15th day of service of
legal demand notice issued
by complainant
D. NAME OF THE : Dharambir Singh
COMPLAINANT S/o Sh. Narbir Singh
R/o- A-133, Durga Vihar,
Near Sainik Farms, Delhi.
E. NAME OF THE ACCUSED : K. K Sharma
S/o Sh. Bhagwan Swarup
R/o A-33/B/2, Dashrathpuri,
Dwarka, Delhi.
F. OFFENCE : u/s 138 NI Act
COMPLAINED OF
G. PLEA OF ACCUSED : Pleaded not guilty
H. FINAL ORDER : ACQUITTAL
I. DATE OF FINAL ORDER : 20.09.2024
CT No. 469491/2016 u/s 138 NI Act, Dharambir Singh Vs. K. K. Sharma Page no. 1 of 24
BRIEF FACTS:
1. The present case has been initiated at the instance of Sh. Dharambir Singh (hereinafter referred to as the Complainant) against Sh. K.K Sharma (hereinafter referred to as the Accused) u/s 138 of the Negotiable Instrument Act (hereinafter referred to as the NI Act) in relation to dishonor of cheques bearing number no 040885, 040884, 040886, all dated 27.01.2014, drawn on Oriental Bank of Commerce, Milap Nagar, Uttam Nagar, Delhi Branch, each for an amount of Rs. 50,000 (Rs. Fifty Thousand only) (hereinafter referred to as the cheques in question) allegedly issued for discharge of the loan advanced by the complainant to the accused.
2. Briefly stated, it is the case of the complainant that the complainant and the accused are having friendly relations for past several years. It is further alleged that considering the friendly relations between the parties herein, the complainant advanced a friendly loan of Rs. 2,00,000 (Rs. Two Lakhs only) in cash to the accused to allegedly assist the accused in bearing the expense of his sister's marriage. It is further alleged that the said loan was advanced in January 2012 and was repayable in February 2014. It is further alleged by the complainant that in discharge of the total outstanding amount of Rs. 2,00,000, a total of 4 cheques of Rs. 50,000 each (including the cheques in question) were issued by the accused. It is further alleged that out of the said four cheques one cheque got honoured upon presentation, however the cheques in question got dishonoured CT No. 469491/2016 u/s 138 NI Act, Dharambir Singh Vs. K. K. Sharma Page no. 2 of 24 vide memo dated 01.01.2015, for the reason "payment stopped by drawer". It is further alleged that upon assurance of the accused, the cheques in question were again presented for encashment, however, the cheques in question again got dishonoured vide memo dated 21.01.2015 for the reason "payment stopped by drawer". Consequently, a legal demand notice was sent demanding the amount of the cheques in question on 02.02.2015 and the same was duly received by the accused. However, despite the same, payment was not made by the accused.
3. Complaint was filed u/s 138 NI Act by the complainant and upon consideration of the same cognizance was taken and summons were issued qua the accused. Thereafter, on 27.05.2015, notice was framed against the accused upon which the accused pleaded not guilty and claimed trial. Further a defence was taken by the accused that the accused has never taken any loan from the complainant and the cheques in question were obtained by the complainant by force from the accused for the settlement of certain dues allegedly owed by the accused towards the complainant arising out of the business transactions between the complainant and the accused. It was further stated by the accused that he paid Rs. 1,50,000 to the complainant in cash and despite making the payment the complainant has not handed over certain documents of the accused.
CT No. 469491/2016 u/s 138 NI Act, Dharambir Singh Vs. K. K. Sharma Page no. 3 of 24
4. Further, the accused admitted his signature on the cheques in question and also admitted that the amount in words and figures on the cheques in question are also in his hand writing. However, the accused denied having received the legal demand notice and further stated that address on the notice is incomplete.
EVIDENCE LED BY THE PARTIES
5. The Complainant examined himself as CW1 and his brother Sh. Karam Chand as CW2 in order to prove his case. The CW1 in his examination in chief, relied upon and tendered his evidence by way of affidavit Ex. CW1A and relied upon the following documents:-
i. Ex.CW1/1 is cheque in question bearing no. 040884 dated 27.01.2014 ii. Ex.CW1/2 is cheque in question bearing no. 040885 dated 27.01.2014.
iii Ex.CW1/3 is cheque in question bearing no. 040886 dated 27.01.2014 iv Ex.CW1/4, Return memo dated 21.01.2015 (Cheque no 040884) v. Ex.CW1/5, Return memo dated 21.01.2015 (Cheque no 040885) vi Ex.CW1/6, Return memo dated 21.01.2015 (Cheque no 040886) vii Ex.CW1/7, Legal demand notice dated 02.02.2015 viii. Ex.CW1/8, Postal Receipts CT No. 469491/2016 u/s 138 NI Act, Dharambir Singh Vs. K. K. Sharma Page no. 4 of 24 ix. Mark A, Delivery report
6. Further, CW2 Sh. Karam Chand was examined as a witness of payment of loan amount by CW1 to the accused in his presence. Further CW-1 was cross-examined by Ld. Counsel for the accused on 18.03.2016 and 07.04.2017. In the cross examination, CW1 was confronted with document Mark A1, Ex. CW1/D1, Ex. CW1/D2 and Mark A2. Further, CW1 though admitted Ex. CW1/D1 but denied document Mark A1, Mark A2 and Ex. CW1/D2. During the cross examination, CW1, inter alia stated that after knowing the accused for two days he advanced the loan in question to the accused. Further, CW1 denied the suggestion that he has any business relations with the accused. CW1 further stated that he borrowed the loan amount from his father for advancing the same to the accused and also stated that the loan amount was handed over by CW1 in the presence of CW2. It is further admitted that nowhere in the complaint the complainant has disclosed the source of obtaining the loan amount and the fact of advancing the loan in the presence of CW2.
7. Thereafter, on 07.07.2018, statement of accused u/s 313 Cr.P.C. was recorded wherein the accused substantially reiterated his defence, taken by him at the time of framing of notice u/s 251 Cr.P.C. He further denied receipt of the legal notice.
CT No. 469491/2016 u/s 138 NI Act, Dharambir Singh Vs. K. K. Sharma Page no. 5 of 24
8. In his defence, accused examined himself as DW1, Sh. Pramod Kumar as DW2 and Sh. Bhupinder Singh, from postal department as DW3. On 21.08.2018, he deposed that he never took the alleged loan from the complainant. He further deposed that he was running an educational institute namely SM Group of Institutions where the complainant used to provide admissions in JBT/B.Ed in 2008-2012. That the complainant alleged that a balance amount of Rs. 2,00,000 is owed by the accused to the complainant and for settling the same the complainant threatened the accused with the help of certain police officials and due to the threat and pressure the accused gave 4 cheques of Rs.50,000 each to the complainant out of which one cheque got honoured and the cheques in question got dishonoured. It is further deposed that he paid Rs. 1,50,000 in cash to the complainant.
9. Upon his cross-examination, DW-1/ accused inter alia deposed that he has not filed any document regarding business transaction between the accused and the complainant. Further, the witness admitted of not having any receipt of the alleged payment of Rs. 1,50,000 by him to the complainant. It is further admitted by the witness that he did not lodge any police complaint against the complainant for his acts. Further, DW2 in his examination in chief deposed that he and DW1 are friends since 2002 and considering the friendly relations, DW2 advanced a sum of Rs. 1,50,000 to the accused and the said sum was paid by DW1 to the complainant/CW1 in his presence at the office of DW1. Further in chief, the said witness stated CT No. 469491/2016 u/s 138 NI Act, Dharambir Singh Vs. K. K. Sharma Page no. 6 of 24 that 3 cheques were given by DW1 to the complainant/CW1, whereas in his cross examination he stated that he was not told by DW1 as to how many cheques were exchanged between DW1/Accused and CW1/Complainant. Lastly, DW3 deposed that in the absence of proper address and proper colony name, it is difficult/impossible to deliver the post. However, the witness failed to comment upon the fact as to whether in the present case delivery was effected or not.
ARGUMENTS ADVANCED BY PARTIES
10. Final arguments were heard on behalf of both the parties at length.
11. Ld. Counsel for the complainant has argued that the complainant advanced a loan of Rs. 2,00,000 /- to the accused as friendly loan and the cheques in question was issued towards repayment of the same. It was further argued that accused admitted his signature on the cheques in question. It was further argued by the Ld. Counsel that though the accused has disputed the factum of delivery of the legal demand notice and has even claimed that the address borne by the legal notice is incomplete, no evidence has been brought on record by the accused in this regard and thus the defence raised is liable to rejected. He further argued that accused admitted that he has not filed any police complaint against the complainant for non- return of the cheque in question or for issuance of cheque under any threat as alleged by the accused. Accordingly, Ld. Counsel CT No. 469491/2016 u/s 138 NI Act, Dharambir Singh Vs. K. K. Sharma Page no. 7 of 24 for complainant argued that the accused must be convicted in the present case for the offence punishable u/s 138 of NI Act.
12. Per contra, it was argued by the Ld. Counsel on behalf of the accused that the accused has never taken the alleged loan. It was further argued that the cheques in question were got issued by the complainant under threat for the settlement of certain alleged dues owed by the accused to the complainant as per the complainant. It was further argued by the Ld. Counsel that the accused has already paid the amount under the cheques in question by way of cash and as such there is no legally enforceable liability existing under the cheques in question. It is further argued by the Ld. Counsel that legal demand notice was not received by the accused as the same bears incomplete address of the accused and accordingly since there is no valid service of legal demand notice, offence u/s 138 NI Act is not made out qua the accused.
13. It was further argued by the Ld. Counsel that it was only during the course of cross examination that the complainant disclosed that he procured the alleged loan amount from his father however, he was never examined by the complainant as a witness in the present case. Likewise, the fact that the loan amount was handed over by the complainant in the presence of CW2 also came to light only during the course of cross examination, which fact also raises doubt regarding the case set up by the complainant.
CT No. 469491/2016 u/s 138 NI Act, Dharambir Singh Vs. K. K. Sharma Page no. 8 of 24
14. It is further argued by the Ld. Counsel that CW1 admitted the execution of Ex. CW1/D1, which clearly shows that the cheques in question were issued for settlement of certain dues arising out of business transaction between the parties which fact is denied by the complainant, which again creates doubt as regards the case of the complainant and lends support to the defence raised by the accused and as such rebuts the presumption in favour of the complainant. Finally, it was argued on behalf of the accused that he must be acquitted as accused has successfully rebutted the presumption available to the complainant.
APPRAISAL
15. Before appreciating the facts of the case in detail for the purpose of decision, let relevant position of law be discussed. Section 138 of the Act provides as under:
Section 138.- Dishonour of cheque for insufficiency, etc., of funds in the account.- 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 CT No. 469491/2016 u/s 138 NI Act, Dharambir Singh Vs. K. K. Sharma Page no. 9 of 24 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.
16. It is well settled position of law that to constitute an offence under S.138 N.I. Act, the following ingredients are required to be fulfilled:
(A) drawing of the cheque by a person on an account maintained by him with a banker, for payment to CT No. 469491/2016 u/s 138 NI Act, Dharambir Singh Vs. K. K. Sharma Page no. 10 of 24 another person from out of that account for discharge in whole/part any debt or liability;
(B) 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;
(C) returning 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, (D) 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, (E) 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.
Therefore, it is only when all the aforementioned ingredients are satisfied that the person who had drawn the cheque can be deemed to have committed an offence under Section 138 of the N I Act.
17. The Act raises two presumptions in favour of the holder of the cheque i.e., complainant in the present case; firstly, in regard to CT No. 469491/2016 u/s 138 NI Act, Dharambir Singh Vs. K. K. Sharma Page no. 11 of 24 the passing of consideration as contained in Section 118 (a) therein and, secondly, a presumption under Section 139, that the holder of cheque receiving the same of the nature referred to in Section 138 for discharge, in whole or in part, of any debt or other liability.
18. Analyzing all the concerned provisions of law and various pronouncements in this regard, the Hon'ble Apex Court in Basalingappa v. Mudibasappa, AIR 2019 SC 1983, noted as follows:
(i) Once the execution of cheque is admitted, Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.
(ii) The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
(iii) To rebut the presumption, it is open for the accused to rely on evidence led by him or accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but CT No. 469491/2016 u/s 138 NI Act, Dharambir Singh Vs. K. K. Sharma Page no. 12 of 24 also by reference to the circumstances upon which they rely.
(iv) That it is not necessary for the accused to come in the witness box in support of his defence, Section 139 imposes an evidentiary burden and not a persuasive burden.
(v) It is not necessary for the accused to come in the witness box to support his defence.
19. To put in nutshell, the law regarding the presumption for the offence under Section 138 of the Act, the presumptions under Sections 118 (a) and 139 have to be compulsorily raised as soon as execution of cheque by accused is admitted or proved by the complainant and thereafter burden is shifted upon the accused to prove otherwise. These presumptions shall end only when the contrary is proved by the accused, that is, that the cheque was not issued for consideration and in discharge of any debt or liability etc. The onus to prove the issuance of the cheque lies upon the complainant, and the same has to be proved beyond reasonable doubt, unless the accused admits the same. Once the issuance of cheque is established, either by admission or by positive evidence, the presumption under Section 139 of the Act comes into play.
20. As per s. 139 of the Act it shall be presumed, unless the contrary is proved that the holder of a cheque received the CT No. 469491/2016 u/s 138 NI Act, Dharambir Singh Vs. K. K. Sharma Page no. 13 of 24 cheque, of the nature referred to in Section 138, for the discharge, in whole or in part, of any debt or other liability. Therefore, here the onus shifts upon the accused to prove the non-existence of debt or other liability. Section 139 of the Negotiable Instruments Act, 1881 uses the word "shall presume", which means that the presumption under Section 139 is rebuttable. The standard of proof required to rebut the presumption under Section 139 is that of "preponderance of probabilities". Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or other liability, the onus shifts back to the complainant to prove by way of evidence, beyond reasonable doubt, that the cheque in question was issued by the accused in discharge, whole or in part, of any debt or other liability. If the accused is able to raise a probable defence, then the presumptions under Section 118 (a) and Section 139 will not come to the aid of the complainant. For this purpose, the accused may adduce direct evidence to prove that the cheque in question was not supported by consideration, and that there was no debt or liability to be discharged by him.
21. At the same time, it is clear that a bare denial of passing of 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 the consideration of which, the Court may either believe that the CT No. 469491/2016 u/s 138 NI Act, Dharambir Singh Vs. K. K. Sharma Page no. 14 of 24 consideration and debt did not exist, or their non-existence was so probable that a prudent man would, under circumstances of the case, act upon the plea that they did not exist. From the legal provisions and the law laid down in various judgments, it can be safely gathered that it is for the accused to rebut the presumptions. He can do so by cross examining the complainant, 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 and create a reasonable doubt over the version put forth by the complainant.
22. Reverting to the facts of the case at hand, as the accused has categorically admitted his signatures on the cheque and the execution of the cheques in question, accordingly, statutory presumption u/s 139 of the NI Act is liable to the attracted in favour of the complainant and therefore it has to be ascertained whether such presumption of legal liability or debt in favour of the complainant was rebutted by the accused during the trial or not.
23. Now, the first defence taken by the accused is that the legal demand notice (Ex. CW1/7) is not received by him and the same bears its incomplete address. In this regard it is pertinent to state that the defence of the accused is not that the address borne by the legal notice is incorrect but only incomplete. In this regard Ld. Counsel for the accused has drawn attention of CT No. 469491/2016 u/s 138 NI Act, Dharambir Singh Vs. K. K. Sharma Page no. 15 of 24 this Court on order dated 10.04.2015. As per the said order, when summons issued for the accused on the address as provided by the complainant were received back unexecuted with the report "huge area and without colony name or any landmark, it is difficult to execute the summons" , the complainant gave details of a nearby landmark i.e "in front of bus terminal of Uttam Nagar and near Metro Pillar no 642" and subsequently the summons got duly served. Further the Ld. Counsel has also placed heavy reliance on the testimony of DW3 who has deposed that in the absence of proper address and colony name it is difficult/impossible to effect delivery. Accordingly, it is argued by Ld. Counsel that as per the record it is apparent that the address provided by the complainant was incomplete.
24. At this stage it is worth highlighting that during the course of the trial the accused produced certain payment receipts of SM Group of Institutions (Ex. CW1/D2). Now, as per the own case of the accused, DW1/Accused in his examination in chief has deposed that he used to run an institute under the name and style SM Group of Institution. Further, perusal of Ex. CW1/D2 would reveal that it bears the stamp of SM Group of Institutions which bears the following address "A-34, Uttam Nagar, opposite Metro Pillar No 642, Delhi-59". Needless to state that the address provided by the complainant in the complaint and the address on which the legal demand notice was sent by the complainant bears the same address. Likewise, DW3 as well nowhere deposed that address mentioned in the CT No. 469491/2016 u/s 138 NI Act, Dharambir Singh Vs. K. K. Sharma Page no. 16 of 24 legal demand notice (Ex. CW1/7) bears incomplete address. Thus, it is reasonable to state that as per the own admitted record of the accused, it cannot be said that the legal demand notice was sent at an incorrect address.
25. Further, even the report on the summons issued for the accused which returned unexecuted was not that the address provided was incorrect address. It only provided that locating the address in the absence of any landmark or colony name is difficult considering the area of execution. Thus, the question that needs to be addressed here is whether not providing any nearby landmark or other detail to facilitate locating the address of the recipient would make the address incomplete.
26. In this regard, this Court is of the view that if an address of a recipient on which any correspondence is sent is otherwise complete, non-mentioning of any landmark or other detail to facilitate locating the same would not render the address incomplete. The reason for drawing the said conclusion is simple, the purpose of providing a nearby landmark is only to facilitate locating a particular address. Thus, having a known or easily locatable landmark in close proximity is only a feature associated with the address that needs to be located which makes it easier to locate. The address of the property with or without mentioning such landmark would remain same, therefore not providing any landmark only cannot in itself make an address incomplete. Accordingly, the first defence raised by the accused is liable to be rejected and since the CT No. 469491/2016 u/s 138 NI Act, Dharambir Singh Vs. K. K. Sharma Page no. 17 of 24 address of the accused is found to be correct a presumption in terms of "C. C. Alavi Haji Vs. Palapetty Mohd. & Anr." reported in {(2007) 6 Supreme Court Cases 555, is also liable to be raised and accordingly, it cannot be said that there is no due service of the legal demand notice upon the accused in the present case.
27. Now, on merits the accused has taken a two-fold defence, firstly it is alleged by the accused that the cheques in question were issued by him under threat from the complainant for settlement of certain dues arising out of business transactions between the accused and the complainant. Secondly, as part of the first defence it is claimed by the accused that the entire amount under the cheques in question stands paid by the accused in cash.
28. Now, as regards the issue of payment of Rs. 1,50,000 by the accused in cash is concerned, it is pertinent to mention that accused/DW1 in his cross examination has categorically admitted that there is no documentary proof available with the accused of having made the payment of the said Rs.1,50,000. Further, during the course of the trial, DW1/Accused nowhere mentioned as to from where the said amount was arranged by the accused and whether there is any witness to said transaction. In fact DW1/Accused, in his deposition as well nowhere provided any details in this regard. In this background, testimony of DW2, who claims to have given a loan of Rs. 1,50,000 to DW1 for making payment to the complainant and CT No. 469491/2016 u/s 138 NI Act, Dharambir Singh Vs. K. K. Sharma Page no. 18 of 24 the fact of having witnessed the handing over of the said amount by DW1 to the complainant is in direct contradiction with testimony of DW1 and consequently becomes doubtful and lacks credibility.
29. Thus, in the absence of any convincing material on record, the claim of the accused of having paid the amount due under the cheques in question is liable to be rejected. Now, as regards the defence of the accused that there were business relations between the complainant and the accused and the cheques in question were issued for discharging liability arising out of business transactions is concerned, it is pertinent to observe that CW1/Complainant has taken a consistent stand during the course of the trial that he had no business transaction/relation with the accused. Now, during the cross examination, CW1 has admitted execution of Ex.CW1/D1, which is a receipt bearing the signature of the complainant and is executed on 04.09.2014.
30. A bare perusal of Ex. CW1/D1 would reveal that it pertains to issuance of 4 cheques of Rs. 50,000 each against full and final settlement of accounts between the complainant and the accused and is related to "admission session 2009-2011, JBT 2008-2010". Needless to state that when on one hand the complainant claims that he had no business relations with the accused and on the other hand he admits execution of a receipt which provides for settlement of accounts between the parties qua certain business transaction, the entire case of the prosecution becomes doubtful.
CT No. 469491/2016 u/s 138 NI Act, Dharambir Singh Vs. K. K. Sharma Page no. 19 of 24
31. The accused throughout the trial has maintained a consistent defence that complainant has business association with the accused and that to for period between 2008- 2012 in respect of admission in JBT/B.Ed and the complainant also admitted Ex. CW1/D1 which is related to admission session 2009-2011, JBT 2008-2010, thereby giving strength to the defence raised by the accused. Further, the complainant/CW1 also nowhere provided the source from where the funds were arranged by him for advancing the loan in question to the accused and it was only during the course of cross examination that CW1 deposed that he took a loan from his father, however, the complainant/CW1 never got his father examined, which fact further raises doubt regarding the whole case of the complainant.
32. Likewise, CW1/Complainant nowhere claimed that the loan amount was advanced by him in the presence of his brother or the fact that the money borrowed by CW1/Complainant from his father was brought to him by CW2 which is in direct contradiction with the testimony of CW2 and accordingly reduces the credibility of the testimony of both CW1 and CW2. Further, in the complaint it is contended by the complainant that complainant and accused were having friendly relations for past several years, whereas during cross examination CW1 deposed that he knew the accused for only 2 days.
CT No. 469491/2016 u/s 138 NI Act, Dharambir Singh Vs. K. K. Sharma Page no. 20 of 24
33. At this stage it is worthwhile to reproduce the observations in Tedhi Singh v. Narayan Dass Mahant, (2022) 6 SCC 735:
(2022) 2 SCC (Cri) 726, the following was observed by the Hon'ble Supreme Court of India:
8. It is true that this is a case under Section 138 of the Negotiable Instruments Act. Section 139 of the NI Act provides that court shall presume 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. This presumption, however, is expressly made subject to the position being proved to the contrary. In other words, it is open to the accused to establish that there is no consideration received. It is in the context of this provision that the theory of "probable defence" has grown. In an earlier judgment, in fact, which has also been adverted to in Basalingappa [Basalingappa v.
Mudibasappa, (2019) 5 SCC 418 : (2019) 2 SCC (Cri) 571] , this Court notes that Section 139 of the NI Act is an example of reverse onus (see Rangappa v. Sri Mohan [Rangappa v. Sri Mohan, (2010) 11 SCC 441 : (2010) 4 SCC (Civ) 477 : (2011) 1 SCC (Cri) 184] ). It is also true that this Court has found that the accused is not expected to discharge an unduly high standard of proof. It is accordingly that the principle has developed that all which the accused needs to establish is a probable defence. As to whether a probable defence has been established is a matter to be decided on the facts of each case on the conspectus of evidence and circumstances that exist.
9. It is indeed true that there is some merit in the complaint of Ms Sangeeta Bharti, learned counsel for the appellant that in the impugned judgment [Tedhi Singh v. Narayan Dass, 2018 CT No. 469491/2016 u/s 138 NI Act, Dharambir Singh Vs. K. K. Sharma Page no. 21 of 24 SCC OnLine HP 2336] the High Court has not appreciated the real purpose of examining DW 1 to DW 4. She is also correct when she drew our attention to the accounts of Gramin Bank i.e. Gramin Bank, Kullu to show that before 5- 8-2011 the appellant had stopped operating the account in the said bank and a very small and ignorable amount alone was available in the said account.
10. The trial court and the first appellate court have noted that in the case under Section 138 of the NI Act the complainant need not show in the first instance that he had the capacity. The proceedings under Section 138 of the NI Act is not a civil suit. At the time, when the complainant gives his evidence, unless a case is set up in the reply notice to the statutory notice sent, that the complainant did not have the wherewithal, it cannot be expected of the complainant to initially lead evidence to show that he had the financial capacity. To that extent, the courts in our view were right in holding on those lines. However, the accused has the right to demonstrate that the complainant in a particular case did not have the capacity and therefore, the case of the accused is acceptable which he can do by producing independent materials, namely, by examining his witnesses and producing documents. It is also open to him to establish the very same aspect by pointing to the materials produced by the complainant himself. He can further, more importantly, achieve this result through the cross-examination of the witnesses of the complainant. Ultimately, it becomes the duty of the courts to consider carefully and appreciate the totality of the evidence and then come to a conclusion whether in the given case, the accused has shown that the case of the complainant is in CT No. 469491/2016 u/s 138 NI Act, Dharambir Singh Vs. K. K. Sharma Page no. 22 of 24 peril for the reason that the accused has established a probable defence.
34. Thus, perusal of the above observations clearly shows that when the accused has successfully raised a doubt over the credibility of the case put forth by the complainant or his capacity to advance a loan of a huge amount in cash, it can be said that the presumption of law can be rebutted. In such circumstances, the onus shifts back to the complainant to prove its case. Further, the perusal of the record clearly reveals that the defence taken by the accused throughout the trial is consistence and in fact the complainant has admitted documents which lends credit to the defence of the accused.
35. On the other hand, testimony of the complainant in Ex. CW1/A as well as his cross examination, would clearly reveal that he has miserably failed to show the source of funds from where he arranged the loan amount in cash. The complainant has also admitted Ex.CW1/D1 which clearly suggests existence of business association between the parties, which fact is otherwise denied by the complainant. Such circumstances, creates a serious doubt over the credibility and truthfulness in the case set up by the complainant.
36. Accordingly, upon comprehensive consideration of the evidence led on record, it appears that neither the capacity/source of the complainant to advance the alleged loan nor the existence of debt or liability has been proved on record by the complainant beyond reasonable doubt and accused has CT No. 469491/2016 u/s 138 NI Act, Dharambir Singh Vs. K. K. Sharma Page no. 23 of 24 been successful in raising a "probable defence" and strong suspicion over the case put forth by prosecution by pointing out the circumstances existing on the record. Accordingly, in view of the above observations, I am of the considered opinion that the accused has successfully rebutted the presumption. The complainant has not been able to prove his case beyond reasonable doubt against the accused and accordingly, the accused deserves to be acquitted.
37. Accordingly, for the reasons stated above, this court hereby acquits the accused Sh. K. K Sharma for the offence punishable u/s 138 of the Negotiable Instruments Act, 1881 in respect of cheques in question.
38. Copy of this judgment be given free of cost to the accused against receiving. Digitally signed by Mayank Mayank ANNOUNCED IN OPEN COURT Aggarwal Aggarwal Date:
Today i.e. 20.09.2024 2024.09.20
04:54:20
+0530
(Mayank Aggarwal)
Judicial Magistrate First Class-01
N.I. Act/South/Saket/Delhi
20.09.2024
Present judgment consists of 24 pages and each page bears my initials.
Digitally signed by MayankMayank Aggarwal Date:
Aggarwal 2024.09.20 04:54:39 +0530 (Mayank Aggarwal) Judicial Magistrate First Class-01 N.I. Act/South/Saket/Delhi 20.09.2024 CT No. 469491/2016 u/s 138 NI Act, Dharambir Singh Vs. K. K. Sharma Page no. 24 of 24