Delhi District Court
Ct No.12822/2019 Sh. Vijay Kumar vs . Sh. Akbar Ali 1 on 24 December, 2021
IN THE COURT OF SHRI APOORV BHARDWAJ, LD. MM
(NI ACT) -8, SOUTH WEST, DWARKA COURTS,
NEW DELHI.
CT No.12822/2019
Sh. Vijay Kumar
R/o A-47, Mansa Ram Park
Uttam Nagar, New Delhi-110059.
... Complainant
versus
Sh. Akbar Ali
R/o D-2/94, Block-D-2, Phase-5
Near West point School, Om Vihar
Uttam Nagar, New Delhi-110059.
Also at:
D-6A, Block-D, Om Vihar, Phase-5
Uttam Nagar, New Delhi-110059.
... Accused
JUDGMENT
24.12.2021 JUDGMENT
a) Sl. No. of the cases : 12822/2019
b) CNR of the case : DLSW02-017336-2019
c) Date of institution of the case : 08/07/2016
d) Offence complained of : 138 NI Act
e) Plea of the accused : Pleaded not guilty
f) Arguments heard on : 27/11/2021
g) Final order : Acquitted
h) Date of Judgment : 24/12/2021 CT No.12822/2019 Sh. Vijay Kumar vs. Sh. Akbar Ali 1 BRIEF STATEMENT OF FACTS FOR THE DECISION:-
As mandated U/s 355 (i) of Code of Criminal Procedure, 1973
1. Vide this judgment, I shall decide the present complaint filed U/s 138 Negotiable Instrument Act, 1881 (hereinafter referred to as 'NI Act') by the complainant against the accused.
Factual Matrix
2. According to the complainant, the parties were colleagues and enjoyed a cordial relationship. On account of this relationship the accused had sought a friendly loan of Rs 9,00,000 (Nine Lakhs) from the complainant. After 1-2 months when the accused was unable to pay the amount in question he issued the cheque in question bearing no. 026355 dated 23.05.2016 for an amount of Rs 9,00,000 (Nine Lakhs) in favour of the complainant drawn on Allahabad Bank, Uttam Nagar Branch New Delhi which was presented by the complainant in his bank i.e State Bank of Patiala, Mohan Bhagwati Shop Complex, Najafgarh Road, Delhi and was subsequently dishonoured due to the reason "drawers signature differs" vide return memo dated 26.05.2016. Thereafter, despite issuance of legal demand notice to the accused the accused failed to pay the cheque amount within 15 days thereof and hence the present case.
3. Cognizance of offence U/s 138 NI Act was taken accordingly. Accused was summoned. Thereafter separate notice explaining accusation against the accused was put to the accused u/s 251 of The Code of Criminal Procedure (hereinafter referred to as 'CrPC') to which he pleaded not guilty and claimed trial. Accused took the defence that the cheque in question does not bear his signatures and neither has he filled the particulars on it. Accused stated that he is the Pradhan of weekly Mangal Bazar which is situated at Dwarka More and is held on every Tuesday and that the complainant had approached the poor shopkeepers of the weekly bazaar for advancing small loans on interest basis. The complainant agreed to provide the financial assistance to the poor shopkeeper on the condition that the Pradhan of the market should stand surety for the shopkeepers availing loan. Thereafter on CT No.12822/2019 Sh. Vijay Kumar vs. Sh. Akbar Ali 2 the request of the shopkeepers accused had stood as surety for them and issued blank unsigned cheque to the complainant in good faith on an assurance that the same will not be misused. Accused submitted that the complainant misused the cheque and filed a false complaint against him.
4. Thereafter, on the basis of defence revealed by the accused he was given the right to crossexamine the complainant's witnesses. The complainant only examined himself as CW1 and adopted his pre-summoning evidence as his post summoning evidence and relied on his evidence by way of affidavit Ex CW1/1 exhibited 8 documents i.e. Ex. CW1/A (original cheque), Ex. CW1/B (return memo), Ex. CW1/C (legal notice), Ex. CW1/D and Ex CW1/E (Postal receipts) , EX CW1/F and Ex CW1/G (Receipts of speed post), Ex CW 1/H (Delivery report) and Mark A ( i.e a copy of conversation between the complainant and the accused person. Further he was cross examined.
5. It is pertinent to mention here that complainant failed to prove the veracity of Mark A since it is not supported by certificate u/s 65B of Indian Evidence Act, 1872 and accordingly it was not put to the accused in the statement recorded u/s 313 CrPC. Hence, Mark A being held inadmissible in evidence is not being read into.
6. In the statement of accused U/s 313 Cr. PC, he reiterated the defence taken by him when notice was framed against him. Accused also submitted that he wishes to lead DE, however, subsequently accused changed his stance and stated that he does not wish to lead DE and accordingly matter was proceeded on and final arguments were heard.
Legal Position:-
7. Before proceeding further to reflect upon the defence and evaluation of evidence, the foremost check point is whether the facts averred by the complainant fulfill the basic requirement of section 138 for constituting an offence U/s 138 NI Act. For the same a quick run through the legal provision becomes indispensable. The following elements come out on perusal of section 138 NI Act.
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(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.
8. Being cumulative it is only when all the aforementioned ingredients are satisfied that the person who had drawn the cheque can be deemed to have committed offence U/s 138 NI Act.
9. It is apt to discuss that a negotiable instrument including a cheque carries following presumptions in terms of Section 118 (a) and Section 139 of the NI Act:
(a) Section 118 of the NI Act provides : "Presumptions as to negotiable instruments: Until the contrary is proved, the following presumptions shall be made:
(a) of consideration that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred was accepted, indorsed, negotiated or transferred for consideration;"
(b) Section 139 of the N.I Act further provides as follows: "Presumption in favour of holder it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability."
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10. Thus, the combined effect of Section 118(a) and Section 139 of NI Act raises a presumption in favour of the holder of the cheque that he has received the same for discharge, in whole or in part of any debt or other liability.
11. For appreciating the legal position, reliance is placed on the judgement of the Hon'ble Supreme Court in the case of Hiten P. Dalal v. Bratindranath Banerjee (2001) 6 SCC 16 wherein it was held that:
"22. Because both Sections 138 and 139 require that the Court "shall presume" the liability of the drawer of the cheques for the amounts for which the cheques are drawn, as noted in State of Madras vs. A. Vaidyanatha Iyer AIR 1958 SC 61, it is obligatory on the Court to raise this presumption in every case where the factual basis for the raising of the presumption had been established. "It introduces an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the accused" (ibid). Such a presumption is a presumption of law, as distinguished from a presumption of fact which describes provisions by which the court "may presume" a certain state of affairs. Presumptions are rules of evidence and do not conflict with the presumption of innocence, because by the latter all that is meant is that the prosecution is obliged to prove the case against the accused beyond reasonable doubt. The obligation on the prosecution may be discharged with the help of presumptions of law or fact unless the accused adduces evidence showing the reasonable possibility of the non existence of the presumed fact."
Similar view has been taken by the Hon'ble Supreme Court in the case titled as K.N. Beena vs. Munyappan and Ors. AIR 2001 SC 289.
12. Further, recently the Hon'ble Supreme Court in the case titled as Kalamani Tex & Anr. v. P. Balasubramanian (2021 SCC Online SC 75) held that:
"14. Adverting to the case in hand, we find on a plain reading of its judgment that the trial Court completely overlooked the provisions and failed to appreciate the statutory presumption drawn under Section 118 and Section 139 of NIA. The Statute mandates that once the signature(s) of an accused on the cheque/negotiable instrument are established, then these 'reverse onus' clauses become operative. In such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him."
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13. From the ratio decidendi laid down in the aforesaid judgements, it is clear that for the offence under Section 138 of the Act, the presumptions under Section 118(a) and Section 139 of NI Act have to be compulsory raised as soon as execution of cheque by accused is admitted or proved by the complainant and thereafter, burden is shifted to accused to prove otherwise.
14. Evaluating the facts of the present case in the light of the above provision this court first considers as to whether the complainant has prima facie proved the issuance of cheque by the accused towards the legal liability in favour of the complainant from the account maintained by him, so as to constitute an offence U/s 138 NI Act. To carve out a prima facie case the complainant has filed on record original cheque as Ex. CW1/A. The said cheque was presented to the bank within a period of three months from the date on which it was drawn and was returned dishonoured for the reason "drawers signature differs". The return memo bearing the fact of dishonour of cheque in question has been exhibited by the complainant as Ex. CW1/B. The complainant then sent a legal notice dated 01/06/2016 i.e. within the period of statutory requirement of 30 days from the date of receipt of information of dishonour. The original postal receipt of the legal demand notice have been filed as Ex. CW1/4. Despite this the accused failed to make payment of the cheque amount.
Whether presumption u/s 118 (a) and 139 NI Act can be drawn against the accused
15. Coming to the case in hand the accused in defence and also in his statement U/s 313 Cr. PC has admitted having issued the cheque in question but he stated that he did not sign the same. Accused also took the defence that he never received the legal notice. Hence, in order to draw presumption against the accused u/s 118(a) and 139 of the NI Act first of all these two preliminary objections need to be addressed.
Whether the cheque was a blank unsigned cheque
16. In the present case, accused admitted to issuing the cheque in question to the complainant but denied having signed the cheque at the stage of framing of notice u/s 251 CrPC as well as in his statement recorded u/s 313 CrPC. The cheque was dishonoured also for the reason 'drawers signatures differs'.
CT No.12822/2019 Sh. Vijay Kumar vs. Sh. Akbar Ali 6 Therefore, a reasonable doubt regarding the fact that whether the cheque was signed by accused does arise. However, after considering following evidences and circumstances I come to the conclusion that cheque was indeed signed by the accused -
In the cross-examination of the complainant, a suggestion is put to him which is reproduced hereunder " It is wrong to suggest that I was given three blank signed cheques as security, one signed by the accused and two by the wife of the accused as guarantee for payment of loan taken by small shopkeeper from me" (emphasis supplied) This very suggestion put to the accused clearly shows that during the cross-examination of the complainant the stance of accused vis- a-vis signing of the cheques had undergone a sea change. The defence taken by the accused is that the complainant is running a money lending business and lends money to small shopkeepers and that the accused stood as surety on behalf of them. Even if for argument's sake, this defence is to be believed, it is highly implausible that a money lender will accept a 'blank unsigned cheque' as security towards the loan.
Moreover, Hon'ble Supreme Court of India in Laxmi Dyechem v State of Gujarat, (2012) 13 SCC 375 held after reflecting on a catena of judgments that
16. The above line of decisions leaves no room for holding that the two contingencies envisaged under Section 138 of the Act must be interpreted strictly or literally. We find ourselves in respectful agreement with the decision in Magma case [(1999) 4 SCC 253 : 1999 SCC (Cri) 524] that the expression "amount of money ... is insufficient" appearing in Section 138 of the Act is a genus and dishonour for reasons such "as account closed", "payment stopped", "referred to the drawer"
are only species of that genus. Just as dishonour of a cheque on the ground that the account has been closed is a dishonour falling in the first contingency referred to in Section 138, so also dishonour on the ground that the "signatures do not match" or that the "image is not found", which too implies that the specimen signatures do not match the signatures on the cheque would constitute a dishonour within the meaning of Section 138 of the Act:
(emphasis supplied) CT No.12822/2019 Sh. Vijay Kumar vs. Sh. Akbar Ali 7 . Also, it has been held by Hon'ble Karnataka High Court in Dinesh Harakchand Sankla v Kurlon Ltd (2005) 2 MWN (Cri) DCC 57 that
8. Even when the cheque is dishonoured by the reason of "alteration in date and drawer's signature differs", the Court has to presume by virtue of Section 139 of the Negotiable Instruments Act that the cheques are received by the holder for the discharge, in whole or in part, of any debt or liability. Of course, this is a rebuttable presumption. The accused alone can show to the Court that the alterations in signature and date were not made because of insufficiency or paucity of funds.
For these reasons, I reject the hypothesis advanced by the accused that the cheque was given in an unsigned state to the complainant or that the fact that the cheque was dishonored for the reason "drawers signature differs"
to be of any aid to his cause.
17. Moreover, it is observed that even if it was to be believed that the accused had issued the cheques in issue in a blank signed manner and the other details were filled by the complainant, such defence will not come to the rescue of the accused as per the binding ratio decidendi of the Hon'ble Supreme Court in Bir Singh vs Mukesh Kumar, (2019) 4 SCC 197.
Whether legal demand notice was correctly issued upon the accused
18. In the present case the accused has submitted that he never received the legal demand notice. However, perusal of the record indicates that the address of the accused in the legal notice, memo of parties as well as on the bail bond furnished by the accused is the same. Hence, I hold that the legal demand notice was properly addressed and posted and it is presumed to have been delivered u/s 114 Indian Evidence Act, 1872. Moreover, in light of the decision of the Hon'ble Supreme Court of India in C C Alavi Haji v Palapetty Muhammad & Anr (2007) 6 SCC 555, the accused not having paid the amount of cheque in question with 15 days of service of summons to him, cannot be allowed to take such a plea.
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19. The above facts suffice in raising the presumption U/s 118(a) & 139 NI Act in favour of the complainant. In "Rangappa Vs Sri Mohan"
2010 V AD (SC), three Judge Bench of Hon'ble Supreme Court held that section 139 raises a presumption of existence of legally enforceable debt or liability and not simple existence of debt or liability. This presumption is rebuttable presumption and it is open to the accused to raise a defence wherein the existence of legally enforceable debt or liability can be contested.
20. When the presumption is raised in favour of the complainant, the burden is shifted on the accused to disprove the case of the complainant by rebutting the presumption raised in favour of the complainant. Being the rule of reverse onus, it is 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 lack of consideration or a legally enforceable debt need not be proved beyond or reasonable doubt as is the general rule in criminal cases. The accused has to make out a fairly plausible defence which is acceptable to the court. This the accused can do either by leading his own evidence or by raising doubt /demolishing the material or evidence brought on record by the complainant. With this in mind, this court now proceeds to discuss the defence of the accused.
Defence of the accused:-
21. The defence taken by the accused on a conjoint reading of his plea of defence U/s 251 Cr. PC and his statement recorded u/s 313 CrPC is that the accused had given the cheque in question as a blank unsigned cheque to the complainant towards security for loan taken by other small shopkeepers of the weekly market and that the accused had no liability towards the complainant. During the cross-examination of complainant Ld counsel for the accused has additionally tried to prove that no loan was ever advanced to the accused nor did the complainant had the financial capacity to advance the loan.
CT No.12822/2019 Sh. Vijay Kumar vs. Sh. Akbar Ali 9 Whether cheque was given as a security and if yes, its effect
22. As far as the defence of the cheque in question being security cheque is concerned, reliance is placed on the judgment "V.S. Yadav Vs Reena"
(2010), wherein, Hon'ble High Court of Delhi has held:
" Mere pleading not guilty and stating that the cheques were issued as security, would not give amount to rebutting the presumption raised U/s 139 NI Act. If mere statement U/s 313 Cr. PC or U/s 281 Cr. PC of accused of pleading not guilty was sufficient to rebut the entire evidence produced by the complainant/ prosecution, then every accused has to be acquitted. But, it is not the law. In order to rebut the presumption U/s 139 NI Act, the accused, by cogent evidence has to prove the circumstance under which cheques were issued. It was for the accused to prove if no loan was taken why he did not write a letter to complainant for return of the cheque. Unless the accused had proved that he acted like a normal businessman/prudent person entering into a contract, he could not have rebutted the presumption U/ s 138 NI Act. If no loan was given, but cheques were retained, he immediately would have protested and asked the cheques to be returned and if still cheques were not returned, he would have served a notice as complainant. Nothing was proved in this case."
(Emphasis supplied)
23. In the present case, accused had enough scope, notice and opportunity to adduce evidence in his defence that he stood as surety/guarantor for other people. He could have examined any of the shopkeepers for whom he stood as surety. In this light a relevant part of cross-examination of the complainant is being reproduced hereunder "It is wrong to suggest that I have giving loan to several shopkeepers of the market of which the accused is the pradhan and the name of some of them are Ravi, Shahid, Mohseen, Krishna, Shekhar etc."
CT No.12822/2019 Sh. Vijay Kumar vs. Sh. Akbar Ali 10 Therefore, accused cited a number of people for whom he stood as surety. However, he failed to bring even a single witness in his defence. It is not even his case that the principal debtors had paid their loan amount to the complainant and so, he is not liable towards the cheque amount. Hence, this version of the accused cannot be believed.
Whether the complainant lacked the financial capacity to advance the loan.
24. Ld counsel for the accused submitted during the final argument that since the complainant was earning a nominal salary of 35,000/- per month only, he lacked the financial capacity to advance the loan to the accused. He also submitted that since the complainant does not file ITR it can be presumed that he did not have the financial capacity to advance the loan.
25. It is a settled position of law that in case of cash transactions, showcasing that complainant did not have adequate financial capacity does give rise to a plausible defence. I have carefully perused the judgments cited at the bar by both the Ld Counsels along with some other relevant authorities i.e Basalingappa v. Mudibasappa, (2019) 5 SCC 418, APS Forex Service Private Limited v. Shakti International Fashion Linkers AIR 2020 SC 945, Ragini Gupta v. Piyush Dutt Sharma, 2019 SCC OnLine MP 4372 and Bijender Sharma v Anil Sabharwal 2017 SCCOnline Del 10375. A perusal of aforementioned cases clearly shows that in cash transactions whenever the financial capacity of the complainant is challenged and no satisfactory reply is given by the complainant the onus shifts on the complainant to prove his financial capacity. However, in the present case, I hold that the accused has failed to create any reasonable doubt regarding the financial capacity of the complainant, for the reason that it is not the case of the complainant that his income is only Rs 30-35,000/- per month. Rather, he has stated in his cross examination that he is running a business along with his wife and as a Manager of that firm he draws a salary of Rs 30-35,000/-. After this reply, nothing further has been asked from the complainant to probe his financial capacity. Similarly, non filing of ITR also is not sufficient circumstance so as to shift the onus on the complainant to prove his financial capacity.
CT No.12822/2019 Sh. Vijay Kumar vs. Sh. Akbar Ali 11 Whether any loan was advanced to the accused
26. To prove that no loan was advanced to the accused certain questions were put to the complainant in his cross-examination by ld counsel for the accused. Relevant excerpts are being reproduced hereunder . "I do not remember the year when I had given the loan to the accused. It is approximately 3-4 years back"
"No agreement pro-note or any other document was executed while recording the factum of the loan"
"The money which was extended to the accused as loan out of which Rs 4 lakh in cash was given by my father and Rs 5 lakhs in cash was given by me"
27. Ld. Counsel for the accused submitted at bar that the fact the complainant could not clearly recall the date when the loan was advanced combined with the facts that neither did he take any receipt/acknowledgment in writing from the accused affirming the factum of advancement of loan and that he did not get his father or his friend Shekhar examined as witnesses to prove advancement of loan there are clear lacunas in the story of the complainant and hence it cannot be believed.
28. I have carefully considered these submissions. Upon perusal of record it appears that the complaint and affidavit filed by the complainant are silent regarding the approximate date on which the loan was advanced. During cross- examination the complainant was not able to recall even the year in which the loan was advanced by him, as he simply stated that the loan was given, 'approximately 3-4 years back'.
29. In the complaint and affidavit, the complainant has not even stated the reason why the alleged friendly loan was advanced to the accused. It appears to be quite unbelievable that a person would advance a huge sum of Rs 9 lakhs that too after pooling both his own and his father's funds without obtaining any kind of written acknowledgment whatsoever and yet not remember the approximate date of that transaction.
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30. It is not the case of the complainant that he took the cheque at the time of advancing the loan, rather he has stated that the cheque was given 2-3 months later when the complainant demanded repayment. It appears implausible that a person who has already availed a cash loan without any kind of written acknowledgment would later on issue a cheque knowing fully well that he does not have the funds to honour it.
31. In his affidavit the complainant has further stated that once the cheque got dishonoured he confronted the accused who asked him to wait for one month to which the complainant agreed. However the complainant has nowhere averred as to whether the cheque was presented twice. From the affidavit it simply appears that the intimation regarding dishonour was received on 26.05.2016 and the legal notice was sent on 01.06.2016 hence, complainant's version that he waited for one month after receiving intimation of dishonour is also prima facie untrue and makes his entire testimony doubtful. Reliance can be placed on John K. John v. Tom Varghese, 2007 (4) LRC 218 SC, decided by the Hon'ble Apex Court -
10.... "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".
In case titled Vijay v. Laxman, Criminal Appeal No. 261 of 2013 dated 07.02.2013 by Hon'ble Supreme Court, it was observed that Para 3..... "In the first place the story of the complainant that he advanced a loan to the respondent accused is unsupported by any material leave alone any documentary evidence that any such loan transaction had place. So much so, the complaint does not even indicate the date on which loan was demanded and advanced. It is blissfully silent about these aspects making the entire story suspect".
32. In light of the aforesaid observations, it is clear that case of complainant is also doubtful due to absence of any details i.e. date, month or year when the loan was allegedly advanced. This combined with discrepancies in the affidavit filed by the complainant makes his case all the more unbelievable. In these circumstances I hold that on a preponderance of probabilities the accused has CT No.12822/2019 Sh. Vijay Kumar vs. Sh. Akbar Ali 13 been able to shift the onus on the complainant to prove that the underlying transaction did occur. As is apparent from the testimony of the complainant that the loan was advanced in front of his father and his friend Shekhar, he could have easily examined either of them as a witness to prove the transaction but surprisingly he chose not to do so.
33. Thus, the complainant has not been able to prove his case beyond reasonable doubt as there are various lacunas in the story of the complainant. Accused Akbar Ali is, therefore, acquitted for the offence u/s 138, N.I. Act. Bail bonds (except furnished under section 437A Cr.P.C.) are cancelled and surety stands discharged. Endorsement, if any, stands cancelled.
34. This judgment contains 14 pages. This judgment has been pronounced by the undersigned in the open court today and each page bears my signatures.
35. Let a copy of the judgment be given to the accused free of cost.
36. Let a copy of the judgment be uploaded on the official website.
Digitally signed by APOORV APOORV BHARDWAJ
BHARDWAJ Date: 2021.12.24
17:33:13 +0530
(Apoorv Bhardwaj)
MM (NI Act)-08, S-W District,
Dwarka Courts, N.D/24.12.2021
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