Delhi District Court
Sunil Joshi vs Manish Singh on 18 December, 2023
IN THE COURT OF MS. AAKANKSHA, METROPOLITAN
MAGISTRATE, (NI ACT)-07
SOUTH-WEST DISTRICT, DWARKA COURTS, NEW
DELHI
Ct. Case No.5004591/2016
CNR No. DLSW02-012084-2016
Sunil Joshi .........Complainant
Through: Ms. Meenakshi Aggarwal, Advocate
Versus
Manish Singh .........Accused
Through: Sh. Sahil Vij, Advocate
(1) Name of the Sunil Joshi
complainant
S/o Lt. Sh. Sat Pal Joshi,
R/o B2/901, Lotus Pond,
Vaibhav Khand,
Indrapuram, Ghaziabad,
U.P.
(2) Name of the accused Manish Singh,
S/o Sh. Pawan Kumar Singh
R/o Flat no.699, D-6, Penta
Homes, VIP Road, Zirak
Pur, Punjab.
(3) Offence complained of Section 138 Negotiable
or proved Instruments Act, 1881
Ct. Case No.5004591/2016 Digitally signed
by AAKANKSHA
Sunil Joshi vs Manish Singh
AAKANKSHA Date:
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(4) Plea of accused Pleaded not guilty
(5) Date of institution of 23.09.2016
case
(6) Date of conclusion of 08.12.2023
arguments
(7) Date of Final Order 18.12.2023
(8) Final Order ACQUITTAL
JUDGMENT
1. The complainant Sunil Joshi has instituted this complaint u/s 138 Negotiable Instruments Act, 1881 (hereinafter referred to as 'NI Act') against accused Manish Singh on 22.09.2016.
2. The factual matrix as can be culled out from the complaint is that being brother-in-law of the complainant, accused borrowed Rs. 5,00,000/- on interest from complainant for his personal financial need in the month of June, 2012 through cheques bearing no.739692, 739693 for Rs.1,75,000/- each and cheque no.739694 for Rs.1,50,000/-, all dated 27.06.2012 and undertook to repay the same within three years with interest but accused failed to pay the periodical accrued interest after January, 2014. On 30.03.2016 in discharge of his aforesaid liability accused issued two Digitally signed Ct. Case No.5004591/2016 by Sunil Joshi vs Manish Singh AAKANKSHA Page 2 of 29 AAKANKSHA Date: 2023.12.18 14:24:28 +0530 post-dated cheques in question ie. cheque bearing no. 481446 dated 28.06.2016 for a sum of Rs. 2,65,000/- from his current account no.4447002100006628 and cheque no. 380106 dated 28.06.2016 for a sum of Rs.5,00,000/- from his savings account number 4447000100090070 both drawn on Punjab National Bank, Sector 10, Dwarka, Delhi with an assurance of their encashment on presentation. However, to the complainant's dismay the said cheques were returned unpaid with remarks "Kindly contact drawer/Drawee bank" vide return memos dated 12.07.2016. Complainant then issued a legal notice dated 04.08.2016 calling upon the accused to pay the cheque amount within 15 days from the receipt thereof, but the accused failed to make the payment thus constraining the complainant to file this complaint u/s 138 Negotiable Instruments Act, 1881 (hereinafter referred to as 'NI Act') seeking redress against the dishonor of the cheques in question.
3. With a view to establish a prima facie case in order to enable the court to summon the accused, complainant led pre- summoning evidence by way of affidavit Ex. CW-1/A. The complainant relied upon following documentary evidence:
(a) Original cheque bearing no. 481446 dated 28.06.2016 for a sum of Rs. 2,65,000/- drawn on Punjab National Bank, which is Ex. CW-
1/1.
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(b) Original cheque bearing no. 380106 dated 28.06.2016 for a sum of Rs.5,00,000/- drawn on Punjab National Bank, which is Ex. CW- 1/2.
(c) Return memo dated 12.07.2016, which is Ex. CW-1/3.
(d) Return memo dated 12.07.2016 which is Ex. CW-1/4.
(e) Office copy of legal notice, which is Ex. CW-1/5.
(f) Postal receipts, which are Ex. CW-1/6 and Ex.CW1/7.
(g) Tracking report, which is Ex.CW1/8.
(h) Complaint, which is Ex.CW1/9.
Complainant closed his pre-summoning evidence on 07.10.2016.
4. On the basis of above material and finding a prima facie case made out against the accused, the accused was summoned vide order dated 07.10.2016. Accused entered his first appearance through his counsel, on date fixed i.e. 23.12.2016.
5. Notice u/s 251 Cr.P.C. was framed against accused on 08.05.2017 stating out to him the substance of accusation, to which he pleaded not guilty and claimed trial. His defence was recorded at the stage of framing of notice in compliance of directions passed by Hon'ble High Court of Delhi in Rajesh Aggarwal v. State 171 (2010) DLT 51. The accused took defence that he issue the said cheques but cheque bearing no. 380106 was given to complainant as Ct. Case No.5004591/2016 Digitally signed Sunil Joshi vs Manish Singh by AAKANKSHA Page 4 of 29 AAKANKSHA Date: 2023.12.18 14:24:39 +0530 security in 2012 and he did not fill the remaining particulars but only signed the same, he received legal notice, he borrowed loan of Rs.5,00,000/- with interest @ 0.5% which was to be repaid in 50 equal monthly installments of Rs.12,500/-, he has already paid Rs.3,35,000/-, cheque for amount of Rs.2,65,000/- was issued as full and final settlement of the loan taken.
6. Accused was granted right to cross-examine the complainant on an application u/s 145(2) NI Act filed by accused vide order dated 07.07.2017. The complainant was examined as CW-1 thereby adopting his pre-summoning evidence as post- summoning evidence and was duly cross-examined and discharged. The complainant also examined Bank witness/Gaurav Yadav as CW-2. He was not cross-examined despite opportunity. Vide separate statement of complainant, complainant evidence was closed on 19.10.2019.
7. Statement of accused was recorded u/s 313 Cr.P.C. r/w section 281 Cr.P.C. on 07.02.2020 wherein all the incriminating evidence was put to the accused and he was granted an opportunity to explain the circumstances appearing against him at trial. While explaining the circumstances appearing in evidence against him, accused stated without oath that he borrowed the loan in question through the cheques mentioned by the complainant but he did not take the loan for three years, cheque Ex.CW1/2 for Rs.5,00,000/-
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was given as security which bears his signatures but the contents except amount in words and figures were not filled by me, Ex.CW1/1 was given by him to complainant in March, 2016 and bears his signatures but he did not fill the same, he received the legal notice, the loan was to be repaid in 50 equal monthly installments of Rs.12,500/- (Rs.10,000/- towards principal amount and Rs.2500/- towards interest), he repaid 28 EMIs to the complainant in cash as well as cheque and through account, he stopped paying installments after September, 2014, he transferred Rs.10,000/- to complainant in January, 2015 through his wife's account, complainant approached him and settled the matter for Rs.2,65,000/- on 31.03.2016 against which he issued cheque Ex.CW1/1 without date, at that time he demanded cheque Ex.CW1/2 but complainant told him that he has misplaced it, then complainant started demanding Rs.1,00,000/- more in May, 2016 which was declined by him and thus the complainant presented his cheques. Accused preferred to lead evidence in his defence.
8. At the stage of defence evidence, accused examined himself as DW-1 and relied upon transaction sheet of his cheque book which is Ex.DW1/1(OSR), copy of bank account statement which is Mark A and whatsapp chats which are Ex.DW1/2. He was duly cross-examined and discharged. Vide his separate statement, defence evidence stood closed on 19.11.2022.
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9. At the stage of final arguments, Ld. counsel for complainant submitted that accused is brother-in-law of complainant who has admitted borrowing loan of Rs. 5 lacs from complainant on interest, accused issued two cheques in discharge of his liability but they were dishonored upon presentation, in application u/s 145 (2) NI Act accused admitted his liability, it is also admitted by accused that there was no written settlement, in his statement u/s 313 Cr.P.C. he stated that the cheque qua interest was given in March 2016 but he issued the cheque on an account in which he had no balance since 18.04.2019, he also changed his statement qua the total EMIs paid by him, he himself admits that he stopped paying the installments after September 2014 and then made payment in January 2015 of Rs. 10,000/-, accused did not issue stop payment instructions to his banker nor filed any complaint,, DW-1 deposed that three cheques got dishonored and. Then he made payment in cash, that the amount of Rs. 10,000/- from his wife's account was towards dishonored cheque, accused has admitted receiving legal notice, even if it presumed that accused paid 27 EMIs they were only towards interest and not towards principal sum and prayed to convict the accused.
Per contra, Ld. counsel for accused submitted that although accused admitted borrowing loan from complainant but complainant failed to tell what was the agreed amount of interest on which he gave loan to accused, the complaint mentions the word "agreed interest" and does not mention the rate of interest, complainant alleges that loan was for three years but in cross-
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examination CW-1 deposed that the loan was for one year and the interest was 2.5% per month, complainant has alleged that one cheque was towards principal sum and the other was towards interest, even if there is presumption the complainant still has to prove the liability but by no calculation the total due amount from 2012 till 2016 comes out to be Rs. 2,65,000/- as alleged by complainant, whereas the defence of accused is that complainant and accused had an arrangement under which accused borrowed Rs. 5,00,000/- and the period of loan was never disclosed, accused was to pay 50 installments of Rs. 12,500/- each out of which Rs. 10,000/- was towards principal and Rs. 2,500/- was towards interest, he paid 27 installments which has been proved by accused, complainant alleges that accused made no payment after January 2014 but accused transferred the money once or twice from his wife's account and Rs. 10,000/- was transferred in 2015 which has been admitted by complainant, when accused already made payment in 2015 then the entire case of complainant fails as on the date of presentation of cheque the accused cannot be said to have such liability, Rs. 12,500/- was admittedly transferred to complainant's account on 15.03.2014 also which is after January 2014, then at points B, C and D of Ex. CW-1/9 complainant deposed that he himself does not know who is depositing money in his bank account although he earlier admitted two credit entries made by accused, whatsapp communication has not bene disputed by complainant, complainant did not disclose depositing of Rs. 25,000/- on 27.06.2014, the transaction sheet of accused proves that on Ct. Case No.5004591/2016 Digitally signed by AAKANKSHA Sunil Joshi vs Manish Singh Page 8 of 29 AAKANKSHA Date:
2023.12.18 14:25:14 +0530 25.06.2012 cheque no. 380106 was given to Sunil but complainant deposed that he received the cheque in 2016 and prayed to acquit the accused.
10. After hearing the arguments advanced on behalf of both the parties and perusing the record carefully, the appreciation of evidence and findings of the court are as below.
11. It would be apposite to first consider the legal position serving as base to the offence underlying Section 138 NI Act. The following legal requirements need to be satisfied in order to constitute an offence u/s 138 NI Act, as held by Hon'ble Supreme Court in the case titled as Kusum Ingots & Alloys Ltd. v. M/s Pennar Peterson Securities Ltd.: (2000) 2 SCC 745:
(i) that a 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 for the discharge of any debt or other liability;
(ii) that the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier;
(iii) that the 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 Ct. Case No.5004591/2016 Sunil Joshi vs Manish Singh Digitally signed Page 9 of 29 by AAKANKSHA AAKANKSHA Date:
2023.12.18 14:25:20 +0530 the amount arranged to be paid from that account by an agreement made with the bank;
(iv) that 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 thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;
(v) that 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;
The above legal requirements are cumulative, meaning thereby that only if all the aforementioned ingredients are satisfied can the person who had drawn the cheque be held liable for offence u/s 138 NI Act.
12. Burden of proof: The claim based under the provisions of Negotiable Instruments Act is an exception to the general rule of law that burden of proof lies on the prosecution. The two specific provisions viz. Section 118 (a) and 139 of NI Act contemplates that a presumption is attached in regard to each and every negotiable instrument that the same was drawn and issued against due discharge of the liability and thus, whenever any claim is made on the basis of a negotiable instrument, the presumption has to be Ct. Case No.5004591/2016 Digitally signed Sunil Joshi vs Manish Singh by Page 10 of 29 AAKANKSHA AAKANKSHA Date:
2023.12.18 14:25:27 +0530 drawn in favour of the holder of the cheque (drawee) and the law has put the burden to rebut the presumption on the accused that the cheque was not issued by him against discharge of a debt or a liability. In case, the accused is not able to rebut the presumption and fails to prove his defence, the presumption becomes absolute and it has to be assumed that the cheque was issued by the accused in discharge of debt or liability and consequently, accused is assumed guilty of the offence. It was held by Hon'ble Supreme Court in the case of Rangappa v. Mohan: 2010 (11) SCC 441 that presumption of Section 139 of N.I. Act also includes the existence of legally enforceable debt:
14. In light of these extracts, we are in agreement with the respondent claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability.
Hon'ble Supreme Court, in the case of Hiten P. Dalal v. Bratindranath Banerjee: 2001 (6) SCC 16 held that the presumption mentioned in the section 139 NI Act is a presumption of law and not a presumption of fact and thus, this presumption has to be drawn in favour of the drawee and the burden to rebut the presumption with the probable defence is on the accused.
This is indeed an instance of the rule of 'reverse onus', where it is incumbent on the accused to lead what can be called 'negative evidence' i.e. to lead evidence to show non-existence of liability. Keeping in view that this is a departure from the cardinal rule of 'presumption of innocence' in favour of the accused and that negative evidence is not easy to be led by its very nature, it is now Ct. Case No.5004591/2016 Digitally signed Sunil Joshi vs Manish Singh by AAKANKSHA Page 11 of 29 AAKANKSHA Date: 2023.12.18 14:25:31 +0530 settled that the accused can displace this presumption on a scale of preponderance of probabilities and the lack of consideration or a legally enforceable debt need not be proved to the hilt or beyond all reasonable doubts. The accused can either prove that the liability did not exist or make the non-existence of liability so probable that a reasonable person, ought under the circumstances of the case, act on the supposition that it does not exist. He can do so either by leading own evidence in his defence or even by punching holes in the case of the complainant in the testing ordeal of cross-examination. This can be deciphered from relevant para no.21 of Hiten P. Dalal (supra):
21. In other words, provided the facts required to form the basis of a presumption of law exist, no discretion is left with the Court but to draw the statutory conclusion, but this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary. A fact is said to be proved when, "after considering the matters before it, the Court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists". Therefore, the rebuttal does not have to be conclusively established but such evidence must be adduced before the Court in support of the defence that the Court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of reasonability being that of the 'prudent man'.
Further, in Bharat Barrel v. Drum Manufacturing:
AIR 1999 SC 1008 Hon'ble Supreme Court held that the accused has to rebut the presumption and mere denial of passing of consideration is no defence. It is, thus, clear that in cases of Section 138 NI Act, upon proof of foundational facts, law presumes in favour of drawee that the cheque was issued by the accused in Ct. Case No.5004591/2016 Digitally signed by AAKANKSHA Sunil Joshi vs Manish Singh AAKANKSHA Date:Page 12 of 29 2023.12.18
14:25:37 +0530 discharge, wholly or in part, of legally enforceable debt or liability and the burden to rebut the same is upon the accused. The burden does not have to be conclusively established but the accused has to prove his defence on preponderance of probability.
13. Now applying the above law to the facts of the present case, it has to be adjudged whether the legal requirements laid down hereinabove have been fulfilled in the instant case.
13.1. The first legal requirement is:
"A 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 for the discharge of any debt or other liability."
At the outset, it has to be proved that the accused had issued the cheques in question on his account maintained with a bank for discharge of any debt or other liability. In the instant case, accused has admitted his signatures on the cheques in question in his statement recorded u/s 313 Cr.P.C. and in notice framed u/s 251 Cr.P.C. The cheques in question have also been drawn on the account maintained by him with Punjab National Bank. The said fact has not been denied by accused at any stage of proceeding.
It was held in the case of Kalamani Tex & anr. v. P. Balasubramanian: 2021 SCC Online SC 75 Hon'ble Supreme Court held that: Digitally signed by Ct. Case No.5004591/2016 AAKANKSHA AAKANKSHA Sunil Joshi vs Manish Singh Date:
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"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 NI Act. 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."
The above said principle has also been crystallized by Hon'ble Supreme Court in the case of Basalingappa v. Mudibasappa:
(2019) 5 SCC 418, by observing that:
"25. We having noticed the ratio laid down by this Court in above cases on Sections 118(a) and 139, we now summarize the principles enumerated by this Court in following manner:
(i) Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.
(ii) The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
(iii) To rebut the presumption, it is open for the accused to rely on evidence led by him or accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.
(iv) That it is not necessary for the accused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden.
(v) It is not necessary for the accused to come in the witness box to support his defence."
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Page 14 of 29 2023.12.1814:25:49 +0530 13.2. In the instant case, the accused having admitted his signature on the cheques in question and the said cheques being drawn on his bank account, a mandatory presumption automatically arises in favour of complainant by virtue of Section 118(a) r/w 139 NI Act that the cheques in question were issued by him in discharge of, whole or part of, legally enforceable debt or liability.
13.3. Now the burden shifts upon accused to rebut the above presumption by raising a probable defence, by leading evidence or bringing such facts on record in the cross-examination of the complainant that could make the latter's case improbable. If, in such a case, the accused is proved to have discharged the initial onus of proof placed on him by showing that the existence of consideration was improbable or doubtful or illegal, then the onus will again shift back to the complainant who will then be under an obligation to prove it as a matter of fact and failure to do so will disentitle him to any relief on the basis of the negotiable instrument (as held in Satish Sharma v. State NCT of Delhi & anr.: (2013) 204 DLT
289).
13.4. The accused has chosen to do so by cross-examining the complainant witnesses and by leading evidence in his defence. During cross-examination CW-1/complainant deposed, in brief, that accused is his cousin brother-in-law, accused approached him for loan after his retirement, the loan was to be paid in one year, agreed Ct. Case No.5004591/2016 Digitally signed Sunil Joshi vs Manish Singh by AAKANKSHA Page 15 of 29 AAKANKSHA Date: 2023.12.18 14:25:58 +0530 interest was 2.5 % per month. Accused used to pay Rs.12,500/- per month towards interest only and through cheque, no other document was executed qua the loan between them, he does not remember total amount paid by accused or when the accused paid last installment, in case the cheque given towards interest were got dishonored accused used to directly deposit the amount in his bank account, accused transferred once or twice the interest from his wife's account, the cheques in question were issued on 31 st March but he does not remember the year, cheque for Rs.2,65,000/- was issued towards discharge of interest liability, he does not remember the exact date of accrued interest period towards which the said cheque was issued, he cannot tell whether the last payment was made by accused on 26.02.2015 without seeing his bank statement, Rs.10,000/- was transferred from his wife's account in 2015, his Axis bank account statement is Ex.CW1/9 (now read as Ex.CW1/9A as Ex.CW1/9 is complaint) and his SBI bank account statement is Ex.CW1/10, entry at point A in Ex.CW1/9A shows that accused has deposited Rs.12,500/- in his account but he cannot say whether entries at point no. B,C and D were made by accused or not, entry at point E shows that wife of accused deposited Rs.10,000/- in his account, cheque Ex.CW1/2 was not given as security while taking loan, accused did not pay 27 installments of Rs.12,500/- each, accused did not make any payment after January, 2014, cheque Ex.CW1/1 was not given towards full and final settlement and he did not fill the name and date in the same.
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13.5. Complainant also examined Bank witness/Gaurav Yadav/CW-2 who placed on record Savings bank account statement of accused, which is Ex.CW2/1 and deposed that the said bank account is lying dormant since 18.04.2019 and also placed on record current bank account statement of accused which is Ex.CW2/2 and deposed that the said bank account is lying dormant since June, 2014.
13.6. Accused examined himself as DW-1 and deposed, in brief, that complainant is his cousin brother-in-law, he borrowed personal loan of Rs.5,00,000/- in June, 2012 which was to be paid in 50 equal installments of Rs.12,500/-, out of which Rs.10,000/- was towards principal amount and Rs.2500/- was towards interest, he issued blank signed security cheque Ex.CW1/2 at the time of advancement of loan and an entry of the same was made on the transaction sheet of his cheque book Ex.DW1/1 (OSR), he was assured by the complainant that after payment of 50 installments, the said cheque would be returned to him, he paid 28 installments through cheques, cash deposit and account transfer, he stopped making payment due to financial constraint and then transferred Rs.10,000/- through his wife's account in the bank account of complainant on 26.02.2015, various payments were made by directly depositing money in the account of the complainant after January, 2014 which were also acknowledged by the complainant through whatsapp chats Ex.DW1/2, complainant visited his house and proposed a settlement of entire dispute on 31.03.2016 in a total Ct. Case No.5004591/2016 Sunil Joshi vs Manish Singh Digitally signed by Page 17 of 29 AAKANKSHA AAKANKSHA Date:
2023.12.18 14:26:14 +0530 sum of Rs.2,65,000/-, he accepted the proposal of complainant and handed over undated cheque Ex.CW1/1 on condition that the same shall be presented only upon his specific instructions as he was expecting certain payments and upon demanding his cheque Ex.CW1/2 he was told that the same has been misplaced, complainant started demanding Rs.1,00,000/- in May, 2016 despite the said settlement which he refused and without his instructions complainant presented both the cheques, he does not have any liability towards the cheques in question, the cheques have been misused by the complainant. During cross-examination, DW-1 deposed, in brief, that he repaid Rs.3,50,000/- to complainant, he also paid Rs.10,000/- in February, 2015, cheque no.481430, 481434 and 481436 given towards installment of Rs.12,500/- were dishonored but he did not transfer Rs.25,000/- in the account of complainant against the said dishonored cheques, monthly installment of Rs.12,500/- was not only towards interest, his accounts were not inoperative when cheques Ex.CW1/1 and Ex.CW1/2 were issued, he does not know that both of his accounts were lying dormant, he did not stop the payment of cheque Ex.CW1/2 as complainant was his relative, he did not reply to the legal notice and made the payment accordingly as he did not owe anything as alleged in the notice, loan was not given at interest @ 2.5 % per month, after October, 2014 he did not make any payment except Rs.10,000/- on 26.02.2015 and he does not owe total liability of Rs.7,65,000/- towards complainant.Digitally signed by
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13.7. It is an admitted fact that accused is brother-in-law of complainant and that accused borrowed a sum of Rs. 5,00,000/- from complainant on interest, through three cheques dated 27.06.2012 each and that there was no loan agreement executed between them. However, what is disputed is the period of loan, rate of interest agreed between the parties and the payment actually made by accused. It is the case of complainant that the rate of interest was 2.5 % per month and that accused was only paying interest till January 2014 and also failed to pay the remaining interest and did not even pay the principal sum and then the accused issued the cheque Ex. CW-1/2 toward principal sum and cheque Ex.
CW-1/1 towards interest in 2016. Whereas accused has taken defence that there was no fixed rate of interest but he was required to repay the borrowed sum in 50 monthly installments of Rs. 12,500/- each including principal sum of Rs. 10,000/- and interest of Rs. 2,500/-, that he paid total 27 installments, he even paid installments from his wife's account after January 2014 and that the cheque Ex. CW-1/2 was a security cheque given to complainant at the time of taking loan whereas cheque Ex. CW-1/1 was given towards full and final settlement of Rs. 2,65,000/- when he failed to pay the installments.
13.8. The handing over of cheques in question to complainant has not been disputed, although one the said cheque being issued as security has been pleaded. Thus, the question which arises for consideration is whether the accused was liable to pay Rs.
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7,65,000/- to complainant on the date of presentation of cheques in question. But complainant has failed to prove the essential requirements sought to calculate the liability of accused, viz. the agreed period for which money was advanced to accused and the agreed rate of interest.
13.9. The pleadings of the complainant allege that the loan was advanced to accused for a period of three years, which has been out rightly denied by accused who has stated that there was no agreed period of loan but the loan was to be repaid in 50 monthly installments of Rs. 12,500/- each. To the contrary, CW-1 deposed in his cross-examination that the loan was to be repaid within one year. The deposition of CW-1 that the period of loan was only one year also stands contradicted with his own case that accused was only paying interest till January 2014 against the loan borrowed by accused in 2012 and that accused then issued cheque Ex. CW-1/1 for Rs. 2,65,000/- towards unpaid interest. If the loan was to be repaid in one year, there was no occasion for accused to pay the interest from 2012 till January 2014. Thus, in absence of a written loan agreement, complainant has given contradictory statements qua the period of loan which is a material contradiction in the facts of this case.
13.10. To add to the contradictions, complainant has failed to allege the rate of interest on which the loan was advanced to Ct. Case No.5004591/2016 Sunil Joshi vs Manish Singh Digitally signed Page 20 of 29 by AAKANKSHA AAKANKSHA Date:
2023.12.18 14:26:35 +0530 accused. Whereas in his cross-examination, CW-1 deposed that the rate of interest agreed between the parties was 2.5% per month. The accused has, on the contrary, pleaded that there was no agreed rate of interest but he was required to repay the borrowed sum in 50 monthly installments of Rs. 12,500/- each including interest of Rs. 2,500/- per month. The deposition of CW-1 that the rate of interest was 2.5 % per month also stands contradicted with his own case that cheque for a sum of Rs. 2,65,000/- was issued towards unpaid interest and accused paid only interest till January 2014 since 2012. The same can be explained as under:
If the statement of account of complainant is carefully perused, Ex. CW-1/9 reflects that accused has been paying Rs. 12,500/- each on 04.08.2012, 03.10.2012, 02.11.2012, 04.12.2012, 04.01.2013, 07.02.2013, 02.03.2013, 06.03.2013, 11.03.2013, 03.04.2013, 03.05.2013, 94.06.2013, 09.07.2013 (payment made through cheque on 02.07.2013 was dishonored), 04.09.2013, 15.10.2013 (payment made on 05.10.2013 and 11.10.2013 through cheques were dishonored), 13.11.2013, 05.12.2013 (payment made through cheques on 07.01.2014 and 07.02.2014 were dishonored). Cash entries of Rs. 12,500/- on 15.03.2014 at point 'A' has also been admitted by CW-1 to have been paid by accused. Although CW-1 denied having knowledge of who deposited the cash of Rs. 12,500/- on 11.04.2014, Rs. 25,000/- on 28.06.2014 and Rs. 25,000/- on 28.08.2014 (at points B, C and D) but CW-1 has also not denied that they were deposited by accused. Ld. counsel for accused has taken objection that how is it possible that complainant does not know Ct. Case No.5004591/2016 Digitally signed Sunil Joshi vs Manish Singh by AAKANKSHA Page 21 of 29 AAKANKSHA Date: 2023.12.18 14:26:42 +0530 who is depositing money in his bank account. No counter argument came forth on behalf of complainant to this objection. His bank account statements do not reflect any such credit entry of exactly the same amount of Rs. 12,500/- by anyone else during that period and the whatsapp conversation Ex. DW-1/2 between the parties whereby complainant has acknowledged receipt of Rs. 25,000/- on 29.06.2014 proves that complainant has concealed the said payment in his cross-examination. The complainant never disputed the whatsapp conversation during cross-examination of DW-1. Thus in view of deposition of accused, admission of CW-1 in the whatsapp conversation and no clear denial on behalf of CW-1, it is presumed that the said entries at point B, C and D in Ex. CW-1/9 were also made by accused towards repayment of loan. CW-1 has further admitted receipt of Rs. 10,000/- from the account of wife of accused at point E in Ex. CW-1/9 on 26.02.2015. Complainant has also admitted in his complaint that repayment was regularly made till January 2014. Thus, in view of the above account statement, it is very clear that accused was regularly making payment of instalment of Rs. 12,500/- each since 04.08.2012 till 05.12.2013, Rs. 12,500/- each on 15.03.2014 and 11.04.2014 and then Rs. 25,000/- each on 28.06.2014 and 28.08.2014. Thus, on record accused has paid 19 installments of Rs. 12,500/- each through banking and Rs. 25,000/-
each twice i.e. Rs. 2,87,500/- and further Rs. 10,000/- on 26.02.2015 (17 such installments being paid till January 2014). He has further pleaded that he also used to make payment through cash, which fact has not been denied by complainant.
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13.11. Thus, in consonance with the deposition of complainant that the loan of Rs. 5,00,000/- on interest @ 2.5% per month was advanced to accused for a period of one year, the liability of accused qua the interest comes out to be Rs. 1,50,000/- only. However, the cheque in question Ex. CW-1/1 has been presented towards payment of interest for a sum of Rs. 2,65,000/- despite having admittedly received Rs. 2,97,500/- through bank as reflected from complainant's bank account statement Ex. CW-1/9. It is complainant's own case that the payments received by him were only towards interest and not towards principal sum and that for payment of principal sum accused issued cheque Ex. CW-1/2 for Rs. 5,00,000/-. Accused has, on the contrary, filed his cheque leaf status Ex. DW-1/1 to prove that the cheque Ex. CW-1/2 was issued to complainant on 25.06.2012 as security while borrowing loan and the same was to be returned after payment of installments but when he failed to pay the EMIs complainant entered into a settlement with him and took cheque Ex. CW-1/1 for Rs. 2,65,000/- with promise to return the security cheque Ex. CW-1/2 but then he presented both the cheques. There are also continuous entries of other cheques being issued by accused in the cheque leaf Ex. DW-1/1 to different other persons after the said entry at point A, which diminishes the possibility of creating an evidence as an afterthought. Most importantly, complainant has failed to challenge the veracity of Ex. DW-1/1 during cross-examination of accused.
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13.12. In alternative, if the pleadings of complainant are considered that the loan was for a period of three years, then the liability of accused towards interest would come out to be Rs. 4,50,000/- and still complainant has presented the cheque Ex. CW- 1/1 towards interest for a sum of Rs. 2,65,000/- which exceeds the liability of accused as complainant has already received Rs. 2,97,500/- through banking mode from accused admitting it to be payment only towards interest. By any calculation, the complainant has failed to prove how was the accused liable to the extent of the cheque amount on the date of their presentation.
13.13. Ld. counsel for complainant has cross-examined DW-1 to the effect that since cheques bearing number 481430, 481434 and 481436 towards payment of interest were dishonored, accused transferred Rs. 25,000/- to complainant against said dishonored cheques, which accused has denied. Even if this contention of complainant is taken to be true, the said cheques can be seen to have been dishonored in 2013 whereas the payment of Rs. 25,000/- was made by accused in June and August 2014 (i.e. after January 2014) and the complainant has never disputed that the said payments of Rs. 25,000/- was not towards the loan in question. Consequently, complainant has himself admitted having received a sum of Rs. 25,000/- twice after January 2014, which is contrary to his case that accused failed to make payment after January 2014. Thus, it is a proven fact that the cheques in issue have been presented by Ct. Case No.5004591/2016 Digitally signed by AAKANKSHA Sunil Joshi vs Manish Singh Page 24 of 29 AAKANKSHA Date:
2023.12.18 14:27:01 +0530 complainant for an amount which was not due towards complainant on the date of their presentation.
13.14. Failure of accused in deposing consistently the exact amount paid by him or in sending reply to legal notice or filing complaint against complainant, does not benefit the complainant.
Complainant deposed that he himself does not know what amount has been paid by accused. Complainant himself was unable to depose from where he received three installments of Rs. 12,500/- and Rs. 25,000/- twice and later during cross-examination of accused he admitted receiving Rs. 25,000/-. Thus, complainant only does not know what amount was accused actually liable to pay to him and still presented the cheques in issue. It is settled law that complainant's case shall stand on its own legs and complainant cannot shelter of weakness of the defence nor can the court, on its own, make out a new case for the prosecution and convict the accused on that basis.
13.15. Thus, the accused has been able to prove his defence that the cheques were presented for more than his liability as on date of presentation and has been able to successfully rebut the presumption of law.
The first legal requirement is, thus, proved in favour of accused and against the complainant.
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AAKANKSHA
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Date:
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14. The second legal requirement is:
"That cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier."
The cheques in question Ex. CW-1/1 and Ex. CW-1/2 are dated 28.06.2016 each. The cheque returning memos Ex. CW- 1/3 and Ex. CW-1/4 are dated 12.07.2016 each, which proves that the cheques in question were presented within the period of their validity. Further, defence has failed to controvert the said fact.
Thus, the second legal requirement is adjudicated in favour of complainant.
15. The third legal requirement is:
"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."
Section 146 NI Act presumes the fact of dishonour of cheque upon production of bank's slip or memo having the official mark denoting that the cheque in question has been dishonoured. This is also a rebuttable presumption and the upon production of such bank memo, the burden shifts upon accused to disprove the same.
Digitally
signed by
Ct. Case No.5004591/2016 AAKANKSHA
Sunil Joshi vs Manish Singh AAKANKSHA Date:
Page 26 of 29 2023.12.18
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It was held in Laxmi Dyechem v. State of Gujarat: (2012) 13 SCC 375 that:
"15. ... We find ourselves in respectful agreement with the decision in NEPC Micon Ltd. (supra) that the expression "amount of money .......... is insufficient" appearing in Section 138 of the Act [NI 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."
In the instant case, a presumption has been raised in favour of complainant by virtue of Section 146 NI Act that the cheques in question were dishonored for the reason stated therein viz. kindly contact drawer/drawee bank and please present again. As held in Laxmi Dyechem (supra) dishonour of cheque with the remarks "kindly contact drawer" also fall within the offence u/s 138 NI Act and therefore, the burden now shifts upon the accused to rebut this presumption by establishing some reasonable justification for the same. But the accused has admitted his signature on the cheques in question.
Thus, the third legal requirement is adjudicated in favour of complainant.
16. The fourth legal requirement is:
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AAKANKSHA Date:
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"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 thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid."
In the instant case, the cheques in issue were returned dishonoured on 12.07.2016. The complainant sent a legal notice dated 04.08.2016 (Ex. CW-1/5) addressed to the accused. Speed post receipts dated 04.08.2016 (Ex. CW-1/6) are also on record, which proves that the legal notice was sent within the prescribed period. Accused has admitted receiving of legal notice in his plea of defence and statement u/s 313 Cr.P.C. Thus, it is proved that the legal notice was sent to accused within thirty days of receipt of intimation of dishonor of cheques in issue.
The fourth legal requirement is, thus, adjudicated in favour of complainant.
17. The fifth legal requirement is:
"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."
It is an undisputed fact and also a matter of record that the accused has failed to make the payment till date let alone making payment within 15 days of receipt of notice.
Thus, the fifth legal requirement is adjudicated in favour of complainant.
Digitally signedCt. Case No.5004591/2016 by
Sunil Joshi vs Manish Singh AAKANKSHA
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AAKANKSHA Date:
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18. All the legal requirements constituting an offence u/s 138 NI Act being cumulative in nature, the fact that the first legal requirement has not been proved in favour of complainant, the ingredients necessary to bring home the guilt of accused remain incomplete. Accordingly, accused Manish Singh is acquitted for the alleged offence u/s 138 NI Act.
Digitally signed by AAKANKSHAAnnounced in the open AAKANKSHA Date:
court on 18.12.2023. 2023.12.18
14:27:35 +0530
(Aakanksha)
Metropolitan Magistrate(NI Act)-07
South West District, Dwarka Courts,
New Delhi
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Sunil Joshi vs Manish Singh
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