Delhi District Court
Cc No. 530817-16 Arsh Kumar vs . Vinod Kumar Govil Page No. 1/14 on 28 February, 2022
IN THE COURT OF SH. SAHIL MONGA
M.M.- 07, (N. I. ACT), CENTRAL DISTRICT,
TIS HAZARI COURTS, DELHI.
JUDGMENT
CC No.530817-16 Sh. Arsh Kumar R/o Flat No. 263-264 Neelkanth Apartments, Sector-13, Rohini, New Delhi-110085 ................................................ Complainant. Versus Sh. Vinod Kumar Govil 70, First Floor Gagan Vihar Delhi-110092 ........................................................Accused
a) Unique/new case number : DLCT02-003556-2013
b) Name of complainant : Sh. Arsh Kumar
c) Name of accused person(s) : Sh. Vinod Kumar Govil
d) Offence complained of : Under Section 138 of N. I. Act,1881
e) Plea of accused person(s) : Pleaded not guilty
f) Final order : Acquitted
g) Date of such order : 28.02.2022 CC No. 530817-16 Arsh Kumar Vs. Vinod Kumar Govil Page no. 1/14 :: JUDGMENT ::
Facts
1. The present Judgment is a result of culmination of trial initiated on the complaint filed by the complainant. The case of complainant is that accused took a loan of Rs. 30 lakh from the complainant. It is further stated in complaint that in lieu of the discharge of his part liability, the accused issued cheque bearing no. 825962 (Ex. CW1/B) dated 15.10.2013 amounting to 10,00,000/- drawn on UCO Bank, Krishan Nagar, Branch, Delhi (hereinafter referred to as cheque in question) in favour of the complainant.
2. Complainant presented the cheques in question to his banker for encashment but the same was returned unpaid with the endorsement "Funds insufficient" vide returning memo dated 31.10.2013 (Ex. CW1/C).
3. The complainant demanded the above said amount from the accused but he did not make the payment. Thereafter, complainant sent a legal notice dated 07.11.2013 (Ex. CW1/D) through courier and Postal receipts Ex. CW1/E. The accused failed to make the payment of the cheque amount to the complainant within the stipulated period. Hence, the present complaint case was filed.
4. The complainant has examined himself as CW1 and tendered affidavit CW1/1 and placed on record the following documents to prove the liability of the accused :-
a) EX CW 1/B : Original cheque in question. c) EX CW 1/C : Returning memo d) EX CW 1/D : Legal notice. e) EX CW1/E : Postal receipt and courier receipt CC No. 530817-16 Arsh Kumar Vs. Vinod Kumar Govil Page no. 2/14
5. On summoning, accused entered his appearance and thereafter notice under section 251 Cr.P.C. was put to the accused on 19.04.2014 wherein he pleaded not guilty. The plea of defence of accused was recorded wherein accused stated he is not liable to pay in respect of the cheques in question. He submitted that he had given the cheque in question to the complainant as he told him that he would give money to him in cash and would withdraw the same from his account to show his transaction in white. For that purpose he had handedover the chque in question along with two cheques from his companies account to the complainant. Since, he had faith in him, he handed over all the three cheques without taking cash from him. He further submits that he never handed over money to him and he misused his cheque.
6. An application under section 145 NI Act was moved on behalf of accused and same was allowed and complainant was recalled for cross-examination.
7. After the completion of complainant evidence, the accused was examined u/s 313 Cr.P.C. In his statement under section 313 Cr.PC he stated" that the complainant was an importer from China at that point of time. The father in law of sister of the complainant namely Sh. Hem Chand Arora was also known to me and he introduced me with complainant . He had convinced me to enter into the deal with complainant and .I had entered into the deal with the complainant and handed over the cheques to the complainant in advance regarding the deal . Later on complainant told me that all documents were sealed in some scam. Therefore , he can not hand over the cheque which are given by me to them."
8. The accused was given an opportunity to lead evidence .He examined himself as DW1 and was cross examined by the Ld. Counsel for complainant at length.
Thereafter DE was closed and the matter was listed for final arguments.
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9. I have heard counsel for the parties, perused the record and have gone through the relevant provisions of the law.
10. To make any person liable under Section 138 Negotiable Instruments Act (hereinafter to be read as 'The Act'), the following ingredients are required to be proved by the complainant:
(i) 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;
(ii) The cheque should have been issued for the discharge, in whole or in part, of any debt or other liability;
(iii)That cheque has been presented to the bank within a period of three months from the date on which it is drawn or within the period of its validity whichever is earlier;
(iv)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;
(v) 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 30 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;
(vi) 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.
11. The complainant has filed on record cheque Ex. CW1/B bearing no. 825962 dated 15.01.2013 for a sum of Rs10,00,000/-. He has also filed returning memo dated 31.10.2013 Ex. CW1/C as per which the cheque no.825962 was returned back unpaid with the remarks "Fund insufficient". The accused stated in his plea of defence that received the legal demand notice from the complainant and duly replied the same vide reply dated 12.11.2013 sent on 23.11.2013. The original legal demand notice and postal receipts have been placed on record by complainant. However he refused to have accepted the legal demand notice in his statement under section 313 Cr.P.C. Accused has neither disputed the genuineness of postal receipts nor challenged the CC No. 530817-16 Arsh Kumar Vs. Vinod Kumar Govil Page no. 4/14 address mentioned in the postal receipt and legal notice .At this juncture, reliance is placed upon the judgment passed by Hon'ble Supreme Court in the case of C.C.Alavi Haji vs. Palapetty Muhammed, 2007 (6) SCC 555 wherein it has been held:
"It is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of Criminal Law, where there is no stipulation of giving of a notice before filing a complaint. Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. 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 G.C. Act and Section 114 of the Evidence Act. In our view, any other interpretation of the proviso would defeat the very object of the legislation. As observed in Bhaskarans case (supra), if the giving of notice in the context of Clause (b) of the proviso was the same as the receipt of notice a trickster cheque drawer would get the premium to avoid receiving the notice by adopting different strategies and escape from legal consequences of Section 138 of the Act."
Therefore, it is settled law that even if the accused has not received the legal demand notice but the complainant has sent the legal demand notice on the proper address, the accused can make the payment within 15 days of receipt of summons. The accused CC No. 530817-16 Arsh Kumar Vs. Vinod Kumar Govil Page no. 5/14 stated in his plea of defence that received the legal demand notice from the complainant and duly replied the same vide reply dated 12.11.2013 sent on 23.11.2013. The original legal demand notice and postal receipts have been placed on record by complainant. However he refused to have accepted the legal demand notice in his statement under section 313 crpc. Accused has neither disputed the genuineness of postal receipts nor challenged the address mentioned in the postal receipt and legal notice . Hence , presumption under section 114 Indian Evidence Act and section 27 of General Clauses Act can be raised to the effect that notice was duly served upon the accused, since the address mentioned on the legal notice and the postal receipts is correct. The complainant has sent legal notice dated 07.11.13 within 30 days of the knowledge of the return of the cheque but no payment was made as per the legal notice. Accordingly, cause of action arose in favour of the complainant and the present complaint has been filed within limitation.
12. It has been admitted by the accused that the cheque in question was drawn by him upon the bank account maintained in his name and having signed the same. Once the foundational facts that the cheque in question bears the signatures of the accused and the same has been drawn on account maintained by him are established a factual base is established to invoke the presumption of cheque having being issued in discharge of a legally recoverable debt and drawn for good consideration arises by virtue of Section 118(a) R/W Section 139 of NI Act. Since in the present case, the complainant has successfully established that the cheque in dispute was issued by the accused and the same got dishonored and the accused failed to make the payment even after service of statutory notice, a presumption u/s 139 N.I.Act is drawn in favour of the complainant to the effect that the cheque in dispute was issued by the accused for the discharge of legally enforceable debt.
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13. When the presumption is raised in favor of the complainant, the burden shifts upon the accused to disprove the case of the complainant by rebutting the presumption raised in favour of the complainant. In a catena of judgments, it has been laid down by the Hon'ble Supreme Court that such presumption in favour of the complainant cannot be rebutted by a mere plausible explanation but more than a plausible explanation is required. Being the rule of reverse onus, it is the duty of the accused to prove that he does not owe any liability towards the complainant. The accused can displace this presumption on the scale of preponderance of probabilities and the lack of consideration or a legally enforceable debt need not be proved beyond all reasonable doubts. The accused has to make out a fairly plausible defence which is acceptable to the court. Thus, the accused can do either by leading own evidence in his defence or by raising doubt on the material/evidence brought on the record by the complainant. . Hon'ble Supreme Court in Kumar Exports vs. Sharma Carpets decided on 16.12.2008 has held :-
To rebut the statutory presumptions an accused is not expected of to prove his defence beyond reasonable doubt as is expected of the complainant in 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 consideration and 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 CC No. 530817-16 Arsh Kumar Vs. Vinod Kumar Govil Page no. 7/14 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 also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on 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 Section 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 presumption under Section 118 and 139 of the Act will not again come to the complainant's rescue.
14. On analysis of the facts and legal position stated above, the Court finds the parties to be at variance on only one of the primary issues i.e. whether the cheques in question were issued by the accused in favour of the complainant for payment of the loan amount of RS 10,00,000/- in order to discharge the legal liability.
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15. In the present case, the complainant examined himself as CW1 and to raise the presumption of cheque having been issued in discharge of legally recoverable debt and drawn for lawful consideration arising by virtue of Section 118 (a) and Section 139 of N. I. Act, the testimony of the complainant must be of such a character as to be believed as gospel truth. The complainant has been cross examined at length by the counsel for the accused and there are many contradictions in the cross examination of the complainant which cast a shadow of doubt on his case.
16. The complainant in his cross-examination was questioned about the source of funds to which he replied that he had arranged Rs. 30 lacs to give to the accused after borrowing Rs. 4 lacs from his jija and the remaining amount from his five brother in laws. He further stated that he did not remember the date on which he has taken money from his brother in laws. However, the complainant has failed to examine any of the persons from which the alleged amount was borrowed. He could have examined any one of them to prove the amount borrowed by him. At this stage, it is pertinent to refer to the decision of the Hon'ble Supreme Court in the case of APS Forex Services Pvt. Ltd. v. Shakti International Fashion Linkers & Ors. 2020 SCC OnLine SC 193, it was observed by the Hon'ble Apex Court, inter alia, as under:-
"20. In the present case, the accused never questioned the financial capacity of the complainant. We are of the view that whenever the accused has questioned the financial capacity of the complainant in support of his probable defence, despite the presumption under Section 139 of the N.I. Act about the presumption of legally enforceable debt and such presumption is rebuttable, thereafter the onus shifts again on the complainant to prove his financial capacity and at that stage the complainant is required to lead the evidence to prove his financial capacity, more particularly when it is a case of giving loan by cash and thereafter issuance of a cheque. That is not a case here."
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17. Similar views were expressed in Basalingappa (supra), wherein it was observed as under :-
"30. We are of the view that when evidence was led before the Court to indicate that apart from loan of Rs.6 lakhs given to the accused, within 02 years, amount of Rs.18 lakhs have been given out by the complainant and his financial capacity being questioned, it was incumbent on the complainant to have explained his financial capacity. Court cannot insist on a person to lead negative evidence...."
(emphasis supplied).
18. Thus, it becomes clear that in order to raise a probable defence, it is open to the accused to challenge the financial means of the complainant after which the onus shifts upon the complainant to prove the same
19. In friendly loan transactions where the loan amount is disbursed in cash, the source of loan assumes importance and the complainant has failed at explaining from where he arranged the funds to lend to the accused. In the present facts and circumstances, the financial capacity of the complainant has been sufficiently challenged by the accused and the complainant has not been able to discharge the shifted onus and bring on record evidence in order to prove source of advancement of loan. Further, the source of advancement of loan has neither been stated in the complaint nor the evidence by way of affidavit and the same has come on record only at the stage of cross-examination and that itself is also not supported with any evidence.
20. Ld. Counsel for the accused has argued that the complainant has failed to furnish any documentary proof in support of the alleged amount advanced to the accused as stated in complaint. He has argued that the complainant has brought no proof on record to prove the factum of advancement of amount of Rs. 30 lacs to the accused. In the cross examination of complainant, he stated that he did not take any CC No. 530817-16 Arsh Kumar Vs. Vinod Kumar Govil Page no. 10/14 receiving from the accused for the loan amount.There was no execution of any document while advancing the loan. In Vijay v. Laxman and Anr. (2013) 3 SCC 86, the Hon'ble Supreme Court observed that:
"the absence of any details of the date on which the loan was advanced as also the absence of any documentary or other evidence to show that any such loan transaction had indeed taken place between the parties is a significant circumstance."
21. It is worth observing that the complainant chose not to keep any record of the entire transaction or prepare any receipt at the time of advancement of loan. It is quite implausible for someone to have advanced loan in such a huge amount even when there is no close relations between both the parties, unsupported by any documentary proof. The law has been settled in K. John v. Tom Vargese: JT 2007 (13) SC 222 wherein the Apex Court has observed as under:
"10.... The High Court was entitled to take notice of the conduct of the parties. It has been found by the High Court as of act that the complainant did not approach the court with clean hands. His conduct was not that of a prudent man. Why no instrument was executed although a huge sum of money was allegedly paid to the respondent was a relevant question which could be posed in the matter. It was open to the High Court to draw its own conclusion therein. Not only no document had been executed, even no interest had been charged. It would be absurd to form an opinion that despite knowing that the respondent even was not in a position to discharge his burden to pay instalments in respect to the prized amount, an advance would be made to him and that too even after institution of three civil suits. The amount advanced even did not carry any interest. If in a situation of this nature, the High Court has arrived at a finding that the respondent has discharged his burden of a proof cast on him under Section s139 of the Act, no exception thereto can be taken."
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22. The complaint is silent about the date/month of advancement of loan. In the cross examination of complainant, upon being questioned as to the time of advancement of loan to the accused, the complainant, at the stage of cross- examination has stated that the loan was advanced to the accused in 5-6 installments in the year 2012. As regards the date/month, the complainant states that the loan was advanced to the accused starting from February, 2012, however, he did not remember the exact date or month of advancement of instalments. Having said that, he also admitted that no receiving was taken by him from the accused.
23. The exact date/month of advancement of loan in instalments is not known to the complainant in this case. Moreover, the complainant has stated about advancement of loan in instalments for the first time during his cross-examination only and there is not even a whisper about the advancement of loan in instalments or even about the year of advancement of loan in the complaint. No witness has been gotten examined by the complainant to depose in support of advancement of loan. In addition to that, no document has been brought on record to prove the factum of advancement of loan as it is case of the complainant again that no written agreement/undertaking was executed between him and the accused. At this stage, it is pertinent to refer to the judgment in the case of Sanjay Verma v. Gopal Halwai, 2019 SCC Online Del 7572 wherein the Hon'ble Delhi High Court upheld the judgement of acquittal taking into account the fact that no date of extending the loan or rate of interest at which such loan was extended, was mentioned in the complaint and neither was any document executed as regards the loan nor any date as to the repayment of loan was mentioned in the complaint.
24. The accused Examined himself as DW1. The accused in his examination in chief deposed contrary to what he had stated in his plea of defence. He deposed that he knew the complainant through the father in law of sister of complainant . He deposed that there was a property deal between both the parties regarding some land near Gazipur (Koshambi) which was approx. 10758 meter. He further deposed that CC No. 530817-16 Arsh Kumar Vs. Vinod Kumar Govil Page no. 12/14 complainant represented to him that the said land was allotted to him and thereafter the deal was finalized for Rs 78 crores and he issued the cheques in question as advance. He stated that father in law of sister of complainant had assured him that papers qua the allotment would be supplied to him. . Later on he found that no such land was allotted to complainant by DDA and it was all fake. Since the deal could not be effected, he thereafter made several requests for return of cheques but complainant did not return the cheques. Ld counsel for complainant cross examined the accused at length but no question regarding the above stated deal was asked to the accused. It is a settled law that a party has to put his case in cross examination. Failing to cross examine the opposite party on particular point infers that his testimony on that point is accepted and believed by party cross examining. In the present case, the testimony of accused (DW1) regarding the deal of property remained unrebutted since no question was put regarding the same.
25. Mere production of cheque cannot make the case of the complainant absolute and sacrosanct. It is necessary for the complainant to prove that the cheque has been issued against the liability of the accused to repay him for the loan advanced to the accused with evidence of impeccable and irrevocable character. The accused had to raise a probable defence on the standard of preponderance of probabilities and the inference of the preponderance of probabilities can be drawn not only from the materials on record, but also by reference to the circumstances upon which the accused relies. In view of the facts and circumstances discussed above, the defence raised by the accused appears to be genuine. The accused has succeeded in rebutting the statutory presumption in favour of the complainant. It is doubtful in this case, whether the accused had issued the cheque in question to the complainant in discharge of a legal debt or liability.
26. In the existing set of circumstances, the version of the complainant does not inspire the confidence of the court when otherwise also, inconsistencies have been CC No. 530817-16 Arsh Kumar Vs. Vinod Kumar Govil Page no. 13/14 brought out by the accused in the case of the complainant and even the financial capacity of the complainant has been extensively challenged for which no explanation/proof was furnished by the complainant. In addition to the same, no documentary proof has been brought on record by the complainant to buttress his case that loan of Rs. 30 lacs was advanced to the accused.
28. In view of the discussion above, the accused has been able to probabalise his defence that the complainant might have misused the cheque in question .In the facts and circumstances discussed above, the defence of the accused is probable and more believable than that of the complainant. The accused had to prove his defence on the scale of preponderance of probabilities. The defence of the accused is probable and raises a doubt in the mind of the court.
29. Therefore, for the above reasons, the accused cannot be held guilty for the offence alleged in complaint. Accused Vinod Kumar Govil is hereby acquitted for offence under Section 138 of Negotiable Instruments Act.
Announced in the Open
Court on 28.02.2022 (Sahil Monga)
MM-07 (NI-Act)/Central/THC
Delhi/28.02.2022
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