Delhi District Court
Ajay Timber Store vs Harish Arora on 24 March, 2023
IN THE COURT OF MS ABHILASHA SINGH:
METROPOLITAN MAGISTRATE - 02: NI ACT: SOUTH:
SAKET COURT: NEW DELHI
CC NO. 3415/2018
AJAY TIMBER STORE VS HARISH ARORA
UNIQUE IDENTIFICATION NUMBER: -DLST 02-008641-2018
U/S 138 NEGOTIABLE INSTRUMENTS ACT
JUDGMENT
(1) Serial number of the case 3415/2018 (2) Name of the complainant Ajay Timber Store through its Proprietor Mr. Ajay Khari R/o House no. 13, Village Sultanpur Mehrauli, New Delhi.
(3) Name of the accused Harish Arora S/o Mr. Trilok Singh Arora, R/o D-23, 3rd Floor, D.D. Sharma House, Gate no. 3, Freedom Fighter Colony, Neb Sarai, New Delhi.
(4) Offence complained of or Section 138 Negotiable proved Instruments Act, 1881 (5) Plea of the accused Pleaded not guilty (6) Final Order Acquittal (7) Date of Institution 17.03.2018 (8) Date of Judgment 24.03.2023 CC NO. 3415/2018 AJAY TIMBER STORE VS HARISH ARORA page no. 1/32 BRIEF STATEMENT OF THE REASONS FOR THE DECISION
1. The brief facts of this case as carved out from the complaint are that accused and complainant were having friendly relations. The house of the accused at B-12, Ground Floor, Gulmohor Park, Andrews Ganj, New Delhi
-110049 was mortgaged with a bank for which the bank had initiated a recovery proceeding against the accused and his father. The accused along with his father had accordingly approached and requested the complainant for financial help of Rs. 85,00,000/- (Rupees eighty-five lacs) @ 12% per annum. Upon request, the complainant advanced the said loan by way of RTGS transfer as well as by way of cash in the account of accused and his father. Ultimately, the accused got the house transferred in the name of his relations and failed to repay the loan amount back to the complainant.
2. Further, after persuasion and intervention of friends, accused gave 12 cheques to the complainant in terms of payment of the loan amount.
S.No. Cheque Date Amount Drawn on
number
1. 611078 15.12.2017 Rs. 2,00,000/- Vijaya Bank,
Chandani
Chowk Branch,
Delhi
2. 611079 30.12.2017 Rs. 3,00,000/- Vijaya Bank,
Chandani
Chowk Branch,
Delhi
CC NO. 3415/2018
AJAY TIMBER STORE VS HARISH ARORA page no. 2/32
3. 611086 27.12.2017 Rs. 3,00,000/- Vijaya Bank,
Chandani
Chowk Branch,
Delhi
4. 611087 30.12.2017 Rs. 5,00,000/- Vijaya Bank,
Chandani
Chowk Branch,
Delhi
5. 611088 29.12.2017 Rs.3,00,000/- Vijaya Bank,
Chandani
Chowk Branch,
Delhi
6. 611089 27.12.2017 Rs. 2,00,000/- Vijaya Bank,
Chandani
Chowk Branch,
Delhi
7. 611090 26.12.2017 Rs. 5,00,000/- Vijaya Bank,
Chandani
Chowk Branch,
Delhi
8. 611097 10.01.2018 Rs. 7,50,000/- Vijaya Bank,
Chandani
Chowk Branch,
Delhi
9. 611098 10.01.2018 Rs. 7,50,000/- Vijaya Bank,
Chandani
Chowk Branch,
Delhi
10. 611099 10.01.2018 Rs. 7,50,000/- Vijaya Bank,
Chandani
Chowk Branch,
Delhi
11. 611100 10.01.2018 Rs. 7,50,000/- Vijaya Bank,
Chandani
Chowk Branch,
Delhi
12. 572758 01.01.2018 Rs. 30,00,000/- Vijaya Bank,
Chandani
Chowk Branch,
Delhi
3. Further, the complainant presented the cheque bearing no. 611088 dated 29.12.2017 for Rs.3,00,000/- in CC NO. 3415/2018 AJAY TIMBER STORE VS HARISH ARORA page no. 3/32 favour of Ajay Timer Store drawn on Vijaya Bank, Chandni Chowk Branch, Delhi-110006 with the banker State Bank of India, Sultanpur Branch, MG Road, Delhi for encashment but on presentation was dishonored with remarks "funds insufficient" vide cheque return memo dated 17.02.2018. Thereafter, on failure of accused to pay the cheque amount, a legal demand notice dated 23.02.2018 which was deemed to be served upon the accused. Despite that payment of the cheque in question was not made by the accused within the stipulated time of 15 days. Hence, the complaint.
4. In the pre-summoning evidence on 02.06.2018, evidence by way of Ex.CW1/F was filed by Ajay Kumar, proprietor of the complainant firm. In his affidavit of evidence Ex.CW1/F, the complainant reiterated all the averments made in his complaint and relied on documents i.e. original cheque in question is Ex. CW1/A, its return memo is Ex. CW-1/B, office copy of legal notice is Ex. CW-1/C, postal receipt Ex. CW-1/D (colly) and the tracking report is Ex. CW-1/E, the Income Tax Return for the assessment years of 2015-16, 2016-17 and 2017-18 are Ex. CW-1/G (colly) and e-statement of account Ex. CW- 1/H (colly).
5. After closure of pre-summoning evidence, since sufficient material was found against the accused, summoning order was passed against the accused vide order dated 02.06.2018.
CC NO. 3415/2018AJAY TIMBER STORE VS HARISH ARORA page no. 4/32
6. Accused appeared pursuant to issuance of summons and was admitted to bail on 13.11.2018. Thereafter, notice u/s 251 Cr. PC was served upon the accused vide order dated 13.11.2018 to which the accused pleaded not guilty and claimed trial. During framing of notice, accused stated in his defense inter-alia that he had already made substantial payment of loan to the complainant which is already on record and only some amount is outstanding as balance which he is ready to pay after reconciliation of accounts. He further stated that he had given undated cheques to the complainant as security and that he had no legal liability to pay the cheque amount to the complainant.
7. Thereafter, upon oral request of accused u/s 145 (2) N.I. Act to cross examine the complainant and his witnesses, the same was allowed vide order dated 13.11.2018 and the accused was given an opportunity to cross examine the complainant and his witnesses.
8. Complainant examined CW-1 Ajay Khari in his post summoning complainant evidence. He was duly cross examined by Mr. Narender Kumar, Ld. counsel for the accused. CE was closed on 10.07.2019 at request of the complainant.
9. Thereafter, the plea of the accused Harish Arora u/s 313 r/w 281 Cr. P.C was recorded vide order dated 07.08.2019, wherein, all material existing on record CC NO. 3415/2018 AJAY TIMBER STORE VS HARISH ARORA page no. 5/32 including the exhibited documents were put to accused and accused reiterated his defense as taken at the stage of framing of notice. He further stated in his defense inter- alia that he did not take loan of Rs.85 lacs from the complainant @ 12% as alleged by the complainant and rather took loan of Rs. 25 lacs only without interest, as received by him from the complainant via RTGS, as he was in need of financial help. He further stated that the cheque in question was handed over to the complainant under protest. He further stated that he had already repaid the loan to the complainant, proof of which has been placed on record by him which is Mark A. He further stated that the said amount was repaid by way of RTGS transfer of Rs. 21 lacs and cash payment of remaining amount of Rs.04 lacs. He further stated that Mark X and Mark Y are forged and fabricated documents and they does not bear his signatures and no such agreement was ever executed between him and the complainant. he further stated that he does not owe any liability towards the complainant and the complainant has misused the cheques against him.
10. Accused further expressed his desire to lead defence evidence and accused examined himself as DW-1. He was cross examined by Mr. Sudhir Batra, Ld. counsel for complainant. Accused also examined DW-2 Ajay Singh, Clerk, Bank of Baroda, in his defence. At request of the accused, DE was closed vide order dated 10.05.2022 and CC NO. 3415/2018 AJAY TIMBER STORE VS HARISH ARORA page no. 6/32 matter was fixed for final arguments.
11. Ld. counsel for complainant and Ld. counsel for accused have addressed final arguments and filed written submissions. Arguments advanced by both parties heard. Written submissions filed by both the parties have been considered. Case file has been perused meticulously. Complainant and accused have relied upon certain judgments in support of their final arguments.
12. Complainant has relied upon following judgments: -
(a) C.C. Alavi Haji VS Palapetty Muhammed & Anr, Appeal (crl.) 767 of 2007.
(b) Hiten P. Dalal VS Bratindranath Banerjee, Appeal (crl.) 688 of 1995.
(c) Rangappa vs. Sri Mohan (2010) 11 SCC 44
(d) Basalingappa vs. Mudibasappa (2019) 5 SCC 418
(e) Kisan Rao Vs Shankargouda (2018) 8 SCC 165
(f) Sheela Sharma VS Mahendra Pal, 2016 Law Suit (Del) 4859
(g) Suresh Chandra Goyal Vs Amit Singhal (Crl. L.P. no. 607, 2014)
(h) Bir Singh Vs Mukesh Kumar (2019) 4 SCC 197
(i) Triyambak S.Hegde Vs Sripad (2022) 1 SCC 742
(j) Rohitbhai J Patel Vs The State of Gujarat. (2019) 18 SCC 106
(k) P. Rasiya Vs Abdul Nazer & Anr 2022 SCC OnLine SC 1131.CC NO. 3415/2018
AJAY TIMBER STORE VS HARISH ARORA page no. 7/32 Whereas, the accused has relied upon following judgments: -
(a) Basalingappa vs. Mudibasappa (2019) 5 SCC 418
(b) Vipul Kumar Gupta Vs Vipin Gupta, 202 (4) JCC 9 (NI) 248.
13. Before dwelling into the facts of the present case, it would be apposite to discuss the legal standards required to be met by both sides. In order to establish the offence under Section 138 of NI Act, the prosecution must fulfill all the essential ingredients of the offence. Perusal of the bare provision reveals the following necessary ingredients of the offence:-
First Ingredient: The cheque was drawn by a person on an account maintained by him for payment of money and the same is presented for payment within a period of 3 months from the date on which it is drawn or within the period of its validity;
Second Ingredient: The cheque was drawn by the drawer for discharge of any legally enforceable debt or other liability;
Third Ingredient: The cheque was returned unpaid by the bank due to either insufficiency of funds in the account to honour the cheque or that it exceeds the amount arranged to be paid from that account on an agreement made with that bank;
Fourth Ingredient: A demand of the said amount has been made by the payee or holder in due course of the cheque by a notice in writing given to the drawer within thirty days of the receipt of information of the dishonour of cheque from the bank;
Fifth Ingredient: The drawer fails to make payment of thes said amount of money within fifteen days from the date of receipt of notice.CC NO. 3415/2018
AJAY TIMBER STORE VS HARISH ARORA page no. 8/32 The accused can only be held guilty of the offence under Section 138 NI Act if the above-mentioned ingredients are proved by the complainant co-extensively. Additionally, the conditions stipulated under Section 142 NI Act have to be fulfilled.
14. The proof of first and third ingredient is not disputed. The complainant has proved the original cheque that is Ex. CW-1/A dated 29.12.2017. The accused has admitted the issuance of cheque in his reply against notice under Section 251 Cr.P.C. dated 13.11.2018. It is not disputed that the cheque in question was presented within its respective validity period. The cheque in question was returned unpaid vide return memo Ex. CW-1/B dated 17.02.2018 due to the reason, "Funds insufficient". As such, on the basis of the above, the first and third ingredient of the offence under Section 138 NI Act stands proved against the accused.
15. The complainant has filed copy of legal notice Ex.
CW1/C dated 23.02.2018, speed post Ex. CW1/D and tracking report is Ex. CW1/E on record. Accused in his reply during framing of notice u/s 251 Cr. P.C admitted the receipt of legal demand notice that was served upon him by the complainant. The complainant has relied upon C.C. Alavi Haji (supra) on the point of deemed service of legal demand notice. However, in light of admission of the accused as to the receipt of the said notice, placing reliance on the same is unnecessary in the present case.
CC NO. 3415/2018AJAY TIMBER STORE VS HARISH ARORA page no. 9/32
16. The fact that the payment was not made within 15 days of the receipt of the legal notice is also not disputed. Therefore, even fourth and fifth ingredient stands proved against the accused.
17. As far as the proof of second ingredient is concerned, the complainant has to prove that the cheque in question was drawn by the drawer for discharging a "legally enforceable debt". In the present case, the signature of the accused on the cheque in question is not denied. The accused has never denied being the signatory to the cheque in question in his reply to notice u/s 251 Cr.P.C. and also in his statement recorded u/s 313 Cr.PC. Under the NI Act, once the accused admits the signature on the cheque, certain presumptions are drawn, which result in shifting of onus. Section 118 (a) of the NI Act lays down the presumption that every negotiable instrument was made or drawn for consideration. The second presumption is contained under Section 139 of NI Act. The provision lays down the presumption that the holder of the cheque received it for the discharge, in whole or part, of any debt or other liability.
18. The combined effect of these two provisions is a presumption that the cheques was drawn for consideration and given by the accused for the discharge of debt or other liability. Both the sections use the expression "shall", which makes it imperative for the court to raise the presumptions, once the foundational facts required for the CC NO. 3415/2018 AJAY TIMBER STORE VS HARISH ARORA page no. 10/32 same are proved {Refer Hiten P. Dalal vs. Bratindranath Banerjee (2001) 6 SCC 16, as has also been relied upon by the complainant in support of his case}.
19. Further, it has been held by a three-judge bench of the Hon'ble Apex Court in the case of Rangappa vs. Sri Mohan (2010) 11 SCC 44, which has also been relied upon by the complainant in support of his case, that the presumption contemplated under Section 139 of NI Act includes the presumption of existence of a legally enforceable debt. Once the presumption is raised, it is for the accused to rebut the same by establishing a probable defence. The aforementioned law has been reiterated by the Hon'ble Apex Court in Triyambak S.Hegde (supra) and Rohitbhai J Patel (supra) as has also been relied upon by the complainant in support of his case. The principles pertaining to the presumptions and the onus of proof were recently summarized by the Hon'ble Apex Court in Basalingappa vs. Mudibasappa (2019) 5 SCC 418, as has also been relied upon by the complainant and the accused in support of their final arguments, as under:
"25. We having noticed the ratio laid down by this Court in the above cases on Section 118(a) and 139, we now summarise the principles enumerated by this Court in the following manner:
25.1. 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.
25.2. The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise probable defence. The standard of proof for rebutting the presumption is that of CC NO. 3415/2018 AJAY TIMBER STORE VS HARISH ARORA page no. 11/32 preponderance of probabilities.
25.3. To rebut the presumption, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence.
Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.
25.4. That it is not necessary for the accused to come in the witness box in support of his defence. Section 139 imposed an evidentiary burden and not a persuasive burden.
25.5. It is not necessary for the accused to come in the witness box to support his defence."
20. The presumptions raised under Section 118 (b) and Section 139 NI Act are rebuttable presumptions. A reverse onus is cast on the accused, who has to establish a probable defence on the standard of preponderance of probabilities to prove that either there was no legally enforceable debt or other liability. Even for the said purpose, the evidence adduced on behalf of the complainant could be relied upon (refer M.S. Narayana Menon v. State of Kerala, (2006) 6 SCC 39).
21. Further, in Kisan Rao vs. Shankargouda, (2018) 8 SCC 165, as has also been relied upon by the complainant in support of his case, it has been observed and held that the accused may adduce evidence to rebut the presumption, but mere denial regarding existence of debt shall not serve any purpose.
22. Admittedly, accused has issued the cheque Ex. CW-
1/A dated 29.12.2017. The defence of accused inter-alia is CC NO. 3415/2018 AJAY TIMBER STORE VS HARISH ARORA page no. 12/32 that he does not have legal liability of the cheque amount towards the complainant as he had only borrowed Rs.25,00,000/- from the complainant and he has already repaid the entire loan amount, out of which Rs. 21,00,000/- were paid by him by way of cheques and remaining Rs.4,00,000/- by cash.
23. On the contrary, it is the case of the complainant that he had advanced a sum of Rs. 85 lacs @ 12% p.a. , out of which Rs.25,00,000/- were advanced by way of NEFT and remaining balance by way of cash and the accused has repaid only Rs. 10,000/- to Rs.15,000/- as interest and has not repaid a single penny out of the principal loan amount that was advanced to him till date.
SOLVENCY OF COMPLAINANT :-
24. It has been argued on behalf of the accused at the stage of final arguments that the complainant has failed to prove his solvency to advance loan amount of Rs. 85 lacs as against the admitted loan amount of Rs. 25,00,000/-. Therefore, question to be determined is the regarding the solvency of the complainant to advance cash loan of remaining amount of Rs. 60,00,000/-.
25. Before appreciating the evidence on record, it is pertinent to discuss the law on the point of loan advanced in cash by the complainant and the defense of the accused as to the failure on part of the complainant to prove the CC NO. 3415/2018 AJAY TIMBER STORE VS HARISH ARORA page no. 13/32 financial capacity to advance the said loan.
26. In Vijay vs. Laxman and Anr., (2013) 3 SCC 86, the Hon'ble Supreme Court of India observed as follows:
"10...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..."
27. Further, in APS Forex Services Pvt. Ltd. vs. Shakti International Fashion Linkers and Ors., (2020) 12 SCC 724, it was laid down by Hon'ble Supreme Court of India as follows:
"19...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..."
28. Reliance is further placed by this court on Tedhi Singh vs. Narayan Dass Mahant 2022 SCC Online SC 302, wherein it was observed by Hon'ble Apex Court that:
"9... The proceedings under Section 138 of the N. I. 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, CC NO. 3415/2018 AJAY TIMBER STORE VS HARISH ARORA page no. 14/32 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... 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 peril for the reason that the accused has established a probable defence..."
29. Therefore, in cases in which the loan was advanced by the complainant in cash to the accused, or partly in cash, as the case may be and , the accused has questioned the financial capacity and/or source of funds of the complainant, the same will be considered as a probable defense. Once the said doubt is raised, even on a touchstone of probabilities, the onus shifts on the complainant to prove his financial capacity beyond reasonable doubt.
30. Coming to the case at hand, from the bare perusal of the complaint his evidence affidavit and legal demand notice, it is evident that complainant has failed to disclose the date, time and/or place of granting of the said loan to the accused. Further, the complainant has failed to provide relevant details related to advancement of the said cash CC NO. 3415/2018 AJAY TIMBER STORE VS HARISH ARORA page no. 15/32 loan despite specific questions being put to him in his cross examination.
31. During cross examination dated 29.03.2019, the complainant as CW-1 deposed that: -
"...I don't remember the exact date, month and year when loan agreement was executed.(vol. It is 3 or 4 years old transaction and the exact date is mentioned in the loan agreement... I asked someone to help the accused and we both helped the accused by sharing the 50% of the liability/loan of the accused and the documents are already with the bank). I do not remember the date, month and year when I granted loan to the accused..."
32. From perusal of his cross examination as stated above, major contradictions can be made out in the testimony of the complainant. As per the averments of the complainant that are made out in his complaint, the complainant had advanced a loan of Rs. 85 lacs on interest to the accused. However, the complainant did not mention about arrangement of 50% funds from an outside source in his complaint. It is pertinent to note here that the complainant has mentioned in his cross examination that "someone" had shared 50% liability of the accused with him. However, the complainant has not revealed the name of that person, neither has he examined him/her to testify in his favour as to advancement of such a huge amount of cash loan which casts a doubt upon his version int he case. Also, in view thereof, it appears to be improbable for any reasonable person to not remember the particulars such as CC NO. 3415/2018 AJAY TIMBER STORE VS HARISH ARORA page no. 16/32 date, place etc. of advancement of such a huge amount of cash loan as in the present case as also the source of funds for granting of the said loan.
33. Further, from perusal of cross examination of CW-1, it is evident that though specific question was put to the him on 29.03.2019 regarding the computation sheets of his ITRs and of his relatives which he had agreed to produce the same on the next date, he refused to produce it vide his cross examination dated 10.07.2019.
34. During cross examination dated 29.03.2019, the complainant as CW-1 deposed that: -
"...I have not shown the factum of loan amount to Rs. 85 lacs in my ITRs. I filed the ITRs for the year 2015-16, 2016-17 and 2017-18 of my mother's account namely Smt. Veermati, I also filed ITRs for the year 2015-16, 2016-17 and 2017-18 of my elder brother account namely Vijay Bhushan and I also filed my ITRs for the year 2015-16, 2016-17 and 2017-18. It is correct that I did not file computation sheet along with the copy of ITRs of above said persons. (vol. I can file the same to this Court).."
35. Further, during cross examination dated 10.07.2019, the complainant as CW-1 deposed that: -
"It is correct that I cannot bring the computation sheet regarding the ITRs filed by me and my family members alongwith my complaint. I and my family members used to file our ITRs since last 10 years. I cannot tell whether I am having the computation sheets of the ITRs of previous 10 years. (Vol. I am having rental income). I do show my rental income in my ITRs. Though I cannot tell whether or not the CC NO. 3415/2018 AJAY TIMBER STORE VS HARISH ARORA page no. 17/32 same is mentioned in the ITR or not... It is correct that I transferred only amount of Rs.25,00,000/- in the account of accused through NEFT... It is further wrong to suggest that I did not mention any date, day and year in my complaint in which the loan was advanced to the accused because no such amount of loan was ever advanced to the accused."
36. It is pertinent to note that the factum of granting of the said cash loan to the accused by the complainant or any other person on his behalf cannot be made out from perusal of the ITRs, which are Ex. CW1/G (colly), in the absence of computation sheets that have not been produced by the complainant despite opportunity.
37. It has also been stated by CW-1 as quoted above that him alongwith his mother and brother draw rental income. It has been further stated by him that they have reflected their rental income in their respective ITRs. He then changed his stand and stated further that he cannot tell whether the same is reflected in the said ITRs or not. It is pertinent to mention here that on a bare perusal of Ex. CW1/G (colly), it is apparent that the said income is not reflected in ITRs for any year that have been placed on record, including the relevant period, and the same cannot be determined in the absence of relevant computation sheets as stated above.
38. Further, no proof of rental income have been filed by the complainant in support of his version of him and his family drawing rental income to proof his solvency. It is CC NO. 3415/2018 AJAY TIMBER STORE VS HARISH ARORA page no. 18/32 important to know that the gross total income of the complainant as reflecting in his ITRs for the year 2015- 2016; 2016-2017 and 2017-2018 respectively was Rs.6,31,213/-; Rs.6,20,020/-and Rs.6,06,043/- respectively which in itself reflects that the complainant did not have financial capacity to grant loan of such a huge amount as alleged by him in his complaint and his testimony as CW1.
39. Further, though the complainant has failed to disclose the exact or approximate time of granting of the loan to the accused and has also failed to produce computation sheets of the ITRs in his support, the year of granting of loan can be inferred as '2016' from the NEFT transactions that took place between the accused and the complainant in the year 2016 on 05.08.2016 and 10.08.2016, based on bank statement of the complainant, Ex. CW1/H.
40. It is pertinent to note here that the complainant has placed on record two documents namely Mark X and Mark Y in his cross examination in support of his case. On the point of the aforementioned documents, the complainant, during his cross examination as CW-1 dated 10.07.2019, has deposed as under: -
"...It is correct that the dates on which the loan was advanced to the accused is not mentioned in my complaint however, there was certain receipts signed by the accused verifying the same. It is correct that these receipts do not bear any date. It is correct that Mark Y (Colly) do not bear any date regarding the CC NO. 3415/2018 AJAY TIMBER STORE VS HARISH ARORA page no. 19/32 execution of the same and the dates on which the transactions was entered into between the parties. I do not have the originals of Mark X and Mark Y. They are in the possession of the accused. It is wrong to suggest that these documents namely Mark X and Mark Y are forged and fabricated..."
41. On a bare perusal of Mark X and Mark Y, it is evident that both are undated documents as has also been admitted by the complainant. Also, Mark Y bears signatures of the accused only, in original, and Mark X bears two signatures and is a photocopy. Further, the said documents have not been signed by any witnesses. Further, the document has not been admitted by the accused to be true. He has denied it in his statement that was recorded u/s 313 Cr.P.C. and also in his testimony as DW-1. Also, a specific suggestion was given by counsel for accused to the complainant in his cross examination of the said documents being false and fabricated.
42. During examination dated 01.10.2019, the accused as DW-1 deposed that: -
"...Mark X and Mark Y are forged and fabricated documents and they does not bear my signatures and no such agreement was ever executed between me and the complainant. I do not owe any liability towards the complainant and the complainant has misused the cheque."
43. As per the provisions of the Indian Evidence Act, the onus of proving the documents is on the complainant as he has placed reliance on the same, in view of the denial CC NO. 3415/2018 AJAY TIMBER STORE VS HARISH ARORA page no. 20/32 of the accused. Also, despite denial of documents by the accused, the complainant did not take any steps to prove the genuineness of the documents. No application was filed for seeking expert opinion of handwriting expert over the signatures of the accused on both the documents. Also, no witnesses have been examined by the complainant to prove the documents. In view thereof, the complainant has failed to prove the genuineness of the said documents and they cannot be relied upon to fix liability of cheque amount on the accused.
44. Further, a perusal of both the documents makes it evident that though the date of the NEFT transactions has been mentioned in the documents, most of the cash transactions are mentioned without any dates. A cheque transaction of Rs.9,60,000/- dated 05.05.2016 has been reflected in the documents.
45. Also, it has only been suggested once by the counsel for the complainant during cross examination of the accused as DW-1 that the brother of the complainant had advanced Rs. 15 lacs in cash to the accused and that the mother of the complainant had advanced Rs. 9,60,000/- by RTGS to the father of the accused. The same was denied by the accused. It is pertinent to note that the complainant has not mentioned about the same anywhere in his complaint, his evidence affidavit or legal demand notice and even at the stage of his examination.
CC NO. 3415/2018AJAY TIMBER STORE VS HARISH ARORA page no. 21/32
46. However, even if the version of the complainant that the said money was transferred by the mother of the complainant to the father of the accused, as suggested, is believed to be true, no bank statement of the mother of the complainant has been placed on record to prove the said transaction. Further, the complainant has not made her or his brother witness in support of his case.
47. The complainant has also placed reliance on P. Rasiya Vs Abdul Nazer & Anr 2022 SCC OnLine SC 1131 on the point that mere non-disclosure of nature of transactions and source of funds by the complainant in his "complaint" cannot lead to acquittal in cases under section 138 NI Act. It is pertinent to note that the facts of that case are in stark distinction with the present factual matrix wherein the complainant has not only failed to disclose the source of funds, date, place and other particulars related to the loan in his complaint, evidence affidavit and legal demand notice, but he has also failed to prove and disclose the relevant facts with respect to the said loan in his cross examination when specific questions were put to him over the same.
48. The accused has placed reliance on Vipul Kumar Gupta Vs Vipin Gupta 202 (4) JCC 9 (NI) 248 in support of his defense on the point of failure of the complainant to prove his solvency to provide the alleged cash loan. The Hon'ble High Court of Delhi has observed as under: -
CC NO. 3415/2018AJAY TIMBER STORE VS HARISH ARORA page no. 22/32 "9...before a person is convicted for having committed an offence under Section 138 of the Act, it must be proved beyond a reasonable doubt that the cheque in question, which has been made as a basis for prosecuting therespondent/accused, must have been issued by him in the discharge of his liability or a legally recoverable debt... Some of them are that non-mentioning by the appellant in his Income Tax Return or the Books of Accounts, the factum of the loan having been given by him because by no measure, an amount of ` 9,00,000/-
can be said to be a small amount which a person would not reflect in his Books of Accounts or the Income Tax Return, in case the same has been lent to a person. The appellant, neither in the complaint nor in his evidence, has mentioned the date, time or the year when the loan was sought or given... The respondent/accused has only to create a doubt in the version of the appellant, while as the appellant has to prove the guilt of the accused beyond reasonable doubt, in which, in my opinion, he has failed miserably..."
49. In light of the aforementioned discussion and appreciation of documents and testimony of witnesses, it can be inferred that the complainant has hatched a concocted story around advancement of cash loan of Rs. 60,00,000/- in addition to the NEFT transactions, wherein his version appears to be an afterthought.
50. It is also pertinent to mention here that the complainant has also filed bank statement of complainant proprietorship concern for the relevant period as Ex. CW1/H. Upon perusal of the statement, it reflects that the same has only been relied upon by the complainant to prove the advancement of loan of Rs. 25,00,000/- by way of NEFT which has already been admitted by the accused. The same, however, cannot be relied upon to prove the CC NO. 3415/2018 AJAY TIMBER STORE VS HARISH ARORA page no. 23/32 factum of cash loan of Rs. 60 lacs . In view thereof, this court is of the view that the complainant has only been able to prove advancement of loan of Rs. 25,00,000 to the accused.
51. Therefore, in view of the above dicta of Hon'ble Apex Court and discussion, the complainant has failed to prove his solvency beyond reasonable doubt, to advance cash loan of Rs. 60,00,000 despite specific question being put to him and opportunity being given to furnish relevant details.
NON DISCLOSURE OF LOAN IN ITR:-
52. During final arguments, it has also been argued on behalf of the accused that the complainant has not shown the said loan in his ITRs and therefore, the complainant has failed to prove his case. On the other hand, the complainant has relied upon the judgment of Sheela Sharma vs Mahendra Pal (supra) wherein it was held that non-disclosure of loan advanced by complainant to the accused may attract penal provisions under the Income Tax Act but the same has no consequences on the proceedings of the complaint U/s 138 N I Act.
53. In view of the above dictum and discussion, the plea of the accused is not sustainable and the case of complainant cannot fail only on the ground that complainant has failed to reflect the loan advanced to CC NO. 3415/2018 AJAY TIMBER STORE VS HARISH ARORA page no. 24/32 accused in his ITR. However, the same does not come to the rescue of the complainant in the present factual matrix as he has failed to prove the mere existence of liability of the accused of the amount as averred in the complaint. On this point, it has been observed by Hon'ble High Court of Delhi in Sheela Sharma vs Mahendra Pal 2016 Law Suit (Del) 4859 that: -
"30. In cases where the complainant claims to have advanced a friendly loan in cash, and where the transaction of loan is not evidenced by any other documentary or other reliable evidence, no doubt, the aspect whether the availability of funds in cash with the complainant/ lender, and its advancement as loan to the accused have been reflected in the income tax returns of the complainant/ lender, or not, become relevant. If, the availability of funds, and the loan transaction itself is not so reflected, that factor is taken note of by the Court as relevant to hold that the presumption under Section 118 and 139of the NI Act stands rebutted. However, these considerations would not be relevant, where loan transaction itself is otherwise established, either through documentary evidence - such as, a receipt or a loan agreement, or acknowledgement executed by the accused, or by oral evidence of an independent witness who is found to be credible."
54. However, in the present case, the complainant has failed to establish the loan transaction as averred in the complaint, by way of documentary and other evidence, thereby making the factum of non-disclosure of the advancement of the said loan in his ITR as a relevant consideration to be considered as a probable defence in favour of the accused.
CC NO. 3415/2018AJAY TIMBER STORE VS HARISH ARORA page no. 25/32 WHATSAPP CHAT :-
55. Also, the complainant has placed reliance on whatsapp chats that took place between the accused and the complainant, Ex. DW1/A. The document has been denied by the accused. However, in view of his admission as to his mobile number and the number as reflected on the chats, the complainant has been able to prove the genuineness of the document. However, the complainant has relied on the chats to prove the existence of debt of Rs. 85,00,000/- and non-payment of the same on part of the accused. From perusal of the chats, it is evident that though the accused is requesting for extension of time for repayment , neither of the parties has mentioned the exact amount payable by the accused to the complainant. Therefore, the content of the document, in no possible interpretation, can be read as proof of liability of the accused to the extent of Rs. 85 lacs towards the complainant.
MISCELLANEOUS :-
56. Further, it is also pertinent to keep in mind that even if there are contradictions in the testimony of DW-1 as argued by the complainant, the accused only has to raise a probable defence on preponderance of probabilities and the case of the complainant has to stand on its own feet, once a probable defence has been raised, and the noted contradictions cannot then come to the rescue of the CC NO. 3415/2018 AJAY TIMBER STORE VS HARISH ARORA page no. 26/32 complainant who is then required to prove his case beyond reasonable doubt, which is not the case in the present factual matrix wherein major contradictions can be made out in the testimony of complainant/CW-1.
57. The case of the complainant becomes doubtful for other reasons as well. It is settled law that the complainant has to approach the court with clean hands in order to seek relief from the court of law. It is not the case here as the complainant has concealed relevant factum of repayment by the accused. The accused has placed reliance on his bank statement Ex. DW2/1 which reflects repayment of Rs. 21 lacs by way of cheques between 10.02.2017 & 08.02.2018. This fact has not been disclosed by the complainant. It is pertinent to note here that a copy of the bank statement Mark A was put to the complainant in his cross examination. the complainant did not deny the same. he stated that he was not sure about the factum of repayment and will have to confirm from his bank.
58. The perusal of bank statement of the accused reflects that the said cheques have been duly honoured in the name of the complainant. In view thereof, it is highly improbable to apprehend for any reasonable person to have forgotten such a relevant fact such as presentation of cheque for encashment to his own accord, for which he has pleaded to be unsure. Therefore, the credibility of complainant has been impeached owing to major contradictions in his testimony. During his cross CC NO. 3415/2018 AJAY TIMBER STORE VS HARISH ARORA page no. 27/32 examination dated 10.07.2019 wherein Mark A was put to him, he deposed as under: -
"...At this stage, the attention of the witness is drawn to the document now Mark A showing the payment made by the accused to the complainant to which the witness testifies that he has to confirm from his bank..."
59. Further, from perusal of the contents of the complaint, it reflects that the dates mentioned on the 12 cheques range from 15.12.2017 to 10.01.2018 which has been allegedly issued by the accused to the complainant in discharge of his liability of Rs. 85 lacs, which falls within the range of dates of repayment of debt by the accused as per his bank statement from 10.02.2017 & 08.02.2018. Further, the accused has taken the defence that the amount on the cheques has been filled up by him and handed over the complainant under protest wherein the complainant had threatened the accused to fill the amount more than the actual liability. The accused as DW-1 had deposed in his cross examination dated 23.11.2019 that: -
"...All the cheques given by me to the accused were filled by me, however, the date on the cheques was not filled by me. The amount written in the cheque was also filled by me. It is incorrect that all the 12 cheques given by me to the complainant were after settling the amount payable to the complainant to clear my debts... It is incorrect that to show my genuineness to the complainant for repayment of the amount, I had handed over the documents Mark X to the complainant. I have not given any documents pertaining to property mentioned in Mark X to the complainant. It is incorrect that I had given all the 12 cheques to the CC NO. 3415/2018 AJAY TIMBER STORE VS HARISH ARORA page no. 28/32 complainant to discharge my liability towards the complainant. I issued the cheques because I was pressurized by the complainant to give the cheques. The complainant had threatened me to kill and to so out of danger to my life, I handed over the cheques to him signed by me...".
60. In light of the testimony of the accused as DW-1 and the dates of all the cheques issued by the accused including the cheque in question, it can be inferred that the possibility of the complainant actually threatening the accused to have filled an excessive amount on the cheques cannot be ruled out as the accused had been making payment by way of cheques to the complainant as discussed above. In view of the fact that the payment was getting duly honoured in the account of the complainant, it is highly improbable for the accused to have still issued the said cheques in discharge of his liability of the alleged amount despite parallel repayment of the same.
61. The complainant has relied upon Suresh Chandra Goyal (supra) on the point of law around security cheques and the liability of the accused even if the cheque in question was issued as security .Though it is settled law that even cheques issued as security will attract liability u/s 138 NI Act in case the complainant is able to prove the existence of debt/ legal liability of the accused towards the complainant, of the cheque amount, on the date of issuance/ presentation of the said cheque. However, the same is not the case here wherein the complainant has failed to prove existence of liability of Rs. 85 lacs at the date of CC NO. 3415/2018 AJAY TIMBER STORE VS HARISH ARORA page no. 29/32 presentation of cheque in question, for which the said 12 cheques including the cheque in question were allegedly issued by the accused.
62. The complainant has also relied on Bir Singh (supra) on the point of issuance of blank signed cheque/ undated cheque by the accused in favour of the complainant. As far as the plea regarding issuance of blank signed undated cheque is concerned, accused cannot escape his liability because no law provides that in case of any negotiable instrument, entire body has to be written by the maker or drawer only and only the signature of the drawer or maker are significant.
63. However, this court is of the considered opinion that the accused has been able to raise a doubt on the solvency of the complainant to grant loan of the amount as mentioned in the complaint for which the said 12 cheques including the cheque in question were allegedly issued by the accused. Further, it is opined that since the complainant has in turn failed to clarify/prove the existence of debt of the amount as averred in the complaint as claimed against the accused at the concerned time beyond reasonable doubt, dwelling upon the other aspects of the case is not necessary in light of surrounding circumstances of the case.
64. In the facts and circumstances of the present case, the accused has been able to raise a probable defence since CC NO. 3415/2018 AJAY TIMBER STORE VS HARISH ARORA page no. 30/32 the complainant has failed to give the source of such a huge amount having been advanced as a loan. It has been held in K. Prakashan v. P.K. Surenderan 2007 (4) CCC 713 (SC) that if a huge amount of money is advanced as a loan by the complainant, then the complainant must also show the solvency to the extent of the loan either through the bank account or through other means.
65. Thus, in view of the above dicta and discussion, this court is of the opinion that complainant has not been able to prove his case beyond reasonable doubt against the accused as he has failed to prove the averments in his complaint and has failed to prove the existence of a legally enforceable debt or liability existing in favour of the complainant and against the accused as on the date of issuance/ presentation of the cheque in question. On the other hand, the accused has raised a probable defence on the preponderance of probabilities by challenging the solvency of the complainant to grant the entire amount of loan as alleged in the complaint by the complainant thereby casting a doubt on the credibility of CW-1. The accused has thus been able to rebut the presumption u/s 118 & 139 of the Act.
66. Resultantly, this court finds the accused Harish Arora not guilty for the punishable U/s 138 N I Act. Hence, he stands acquitted.
67. Further, accused is directed to furnish bail bond and CC NO. 3415/2018 AJAY TIMBER STORE VS HARISH ARORA page no. 31/32 surety bond in the sum of Rs.50,000/- U/s 437(A) Cr.P.C. and is directed to be present before the Ld. Appellate Court as and when notice is served upon him.
Announced in the open court on 24.03.2023 Digitally signed by ABHILASHA ABHILASHA SINGH SINGH Date: 2023.03.24 16:58:12 +0530 (ABHILASHA SINGH) METROPOLITAN MAGISTRATE-02/NI ACT/SOUTH SAKET COURT/NEWDELHI/24.03.2023 Certified that this judgment contains 32 pages and each page bears my signature. Digitally signed by ABHILASHA ABHILASHA SINGH SINGH Date: 2023.03.24 16:58:21 +0530 (ABHILASHA SINGH) METROPOLITAN MAGISTRATE-02/NI ACT/SOUTH SAKET COURT/NEW DELHI/24.03.2023 CC NO. 3415/2018 AJAY TIMBER STORE VS HARISH ARORA page no. 32/32