Delhi District Court
16.In The Case Of Kusum Ingots And Alloys ... vs . Pennar Peterson Securities on 29 May, 2023
IN THE COURT OF SH. UMANG JOSHI
MM (NI ACT) DIGITAL COURT-05,
SOUTH WEST, DWARKA COURTS, NEW DELHI
Criminal Complaint No.: 437/2020
Mascot Health Series Pvt. Ltd. ........Complainant
Versus
Surinder Garg,
Proprietor of M/s Bhumika Pharma ............. Accused
1. SI. No. of the case : CC NI Act No.437/2020
2. Date of institution of the case : 28.11.2020
3. Name and address of the complainant : 75,76 and 77, 2nd floor, DDA
Market, J Block, Vikas Puri,
New Delhi-110018
4. Name and address of the accused : House No. 233, Shop No.1,
Village Haiderpur,
Taluka Shalimar Bagh,
Delhi-110088
5. Offence complained of: Section 138, Negotiable Instruments Act
6. Plea of the accused: Accused pleaded not guilty
7. Final order: Convicted
8. Date of such order: 29.05.2023
Umang Digitally signed by
Umang Joshi
Joshi Date: 2023.05.29
15:25:14 +05'30'
CC NI Act No. 437/2020 Page 1 of 35
JUDGMENT
A. Factual Matrix of the case:
1. Briefly stated, the factual matrix of the case as per the complaint is that the complainant company is engaged in the business of manufacturing and sales of pharmaceutical products and the accused used to purchase goods on credit from the complainant. It is further stated that the complainant is maintaining an open and running account in the name of the accused and as per the books of complainant, a sum of Rs. 9,02,598/- is outstanding against the accused.
Thereafter, the accused in discharge of his liability towards the complainant, issued a cheque bearing no. 272031 dated 07.10.2020 amounting to Rs. 9,02,598/- drawn on Yes Bank, AG 23, Shalimar Bagh branch, New Delhi- 110088 (hereinafter referred as "cheque in question") in favour of the complainant with the assurance that the same would be encashed on presentation. Thereafter, the complainant presented the said cheque with its banker but the same was dishonoured and returned with remarks "Drawers Signature Differs" vide return memo dated 08.10.2020. It is further stated that thereafter the complainant sent a legal demand notice dated 12.10.2020 vide registered post on the address of the accused. However, the accused failed to pay the cheque amount to the complainant within the stipulated period of 15 days from the date of service/deemed service of the legal demand notice. Accordingly, the present complaint has been filed by the complainant against the accused under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred as "NI Act").
Umang Digitally signed by
Umang Joshi
Joshi Date: 2023.05.29
15:25:25 +05'30'
CC NI Act No. 437/2020 Page 2 of 35
B. Appearance of accused, framing of notice and proceedings incidental thereto:
2. Vide order dated 29.01.2021, cognizance of the offence under Section 138 of the NI Act was taken by this court and upon a prima facie case being found against the accused, the summons were issued against the accused directing the accused to appear before the court. On 09.08.2021, the accused entered appearance before this court and the accused was admitted to bail subject to furnishing of Personal Bond and Surety Bond in the sum of Rs.10,000/- each.
3. Thereafter, on 18.01.2022, the substance of allegations against the accused were explained to the accused in vernacular and notice under Section 251 of the Code of Criminal Procedure, 1973 (hereinafter referred as "Cr.P.C") for the offence punishable under Section 138 of the NI Act was put to the accused to which the accused pleaded not guilty and claimed trial. The plea of defence of the accused was also recorded in the notice. In the notice put to the accused, the accused stated that the cheque in question bears his signatures and the accused admitted issuing the cheque in question to the complainant. In the plea of defence, the accused stated that he had given the cheque in question to the complainant company as security in January, 2019. The accused further stated that he has no liability towards the complainant.
4. Thereafter, the statement of the accused as to the admission/denial of documents was recorded under Section 294 Cr.P.C. The accused in his statement admitted that the cheque in question is from his bank account and also admitted his signatures on the cheque in question. Furthermore, the Umang Digitally signed by Umang Joshi Joshi Date: 2023.05.29 15:25:32 +05'30' CC NI Act No. 437/2020 Page 3 of 35 accused admitted the cheque return memo but denied the receipt of the legal demand notice.
5. The accused had also filed an application under Section 145 (2) of the NI Act which was allowed vide order dated 26.04.2022 and accordingly the accused was permitted to cross-examine the complainant witnesses.
C. Complainant's Evidence:
6. In order to prove its case, the complainant examined its authorised representative namely Mr. Pankaj Verma as CW-1 and its accountant namely Mr. Om Prakash Singh as CW-2. It is pertinent to mention that the present complaint has been filed by the complainant company through its authorised representative namely Mr. Pankaj Verma i.e. CW-1. In order to prove its case, CW-1 relied upon his evidence by way of affidavit Ex. CW-1/A wherein the contents of the complaint have been reiterated by the complainant. CW-1 also relied upon the following documents to prove its case which are as follows:
a) Copy of board resolution dated 12.11.2020. Ex. CW-1/1.
b) Copy of ledger account of the accused maintained by the complainant. Mark A.
c) Cheque in question bearing no. 272031 dated 07.10.2020 amounting to Rs. 9,02,598/-. Ex. CW-1/2.
d) Cheque return memo dated 08.10.2020. Ex. CW-1/3.
e) Legal demand notice dated 12.10.2020. Ex. CW-1/4.
f) Postal receipts of the legal demand notice. Ex CW-1/5 (colly).
g) Returned envelope of the legal demand notice. Ex. CW-1/6.
Umang Digitally signed by
Umang Joshi
Joshi Date: 2023.05.29
15:25:41 +05'30'
CC NI Act No. 437/2020 Page 4 of 35
7. Thereafter, CW-1 and CW-2 were duly cross examined by the counsel for accused. Furthermore, no other witnesses were examined by the complainant to prove its case. Accordingly, the complainant evidence was closed and the matter was listed for recording the statement of the accused under Section 313 Cr.P.C read with Section 281 Cr.P.C.
D. Statement of accused under Section 313 Cr.P.C read with Section 281 Cr.P.C:
8. Thereafter, all the incriminating evidence which were against the accused were put to the accused and his statement under Section 313 Cr.P.C read with Section 281 Cr.P.C was recorded on 23.01.2023 wherein the accused reiterated his defence and the accused denied any liability towards the complainant.
E. Defence Evidence:
9. In his statement under Section 313 Cr.P.C read with Section 281 Cr.P.C, the accused stated that he wishes to lead defence evidence and thereafter an application under Section 315 Cr.P.C was filed by the accused along with the list of witnesses wherein the accused sought to examine himself as a witness and also sought to examine one Mr. Pappu Kumar and one Mr. Gaurav Jha as witnesses. Vide order dated 14.03.2023, the said application was allowed and the accused was permitted to lead defence evidence. Accordingly, the accused examined himself as DW-1. Thereafter, Mr. Pappu Kumar examined himself as DW-2 and subsequently, Mr. Gaurav Jha examined himself as DW-3. DW-1, DW-2 and DW-3 were also cross examined by the counsel for the complainant.
Umang Digitally signed by
Umang Joshi
Joshi Date: 2023.05.29
15:25:48 +05'30'
CC NI Act No. 437/2020 Page 5 of 35
Furthermore, no other witnesses were examined by the accused to prove its case and accordingly, the defence evidence was closed. Accordingly, the matter was listed for final arguments.
F. Final arguments:
10. Final arguments were heard at length from both the parties.
11. Ld. Counsel for the complainant has argued that the complainant has proved all the ingredients of the offence under Section 138 of the NI Act, 1881 beyond reasonable doubt. Ld. Counsel for the complainant has further argued that the accused has admitted his signature on the cheque in question and therefore the statutory presumptions under Section 139 and 118 of the NI Act arises in favour of complainant. Ld. Counsel for the complainant has further argued that the accused has not raised any probable defence and has not proved his defence and the accused has failed to rebut the presumption arising in favour of complainant. Ld. Counsel for the complainant has further argued that the cheque in question was issued by the accused in discharge of his legal liability towards the complainant company. Ld. Counsel for the complainant has further argued that the accused has not lead any credible evidence to prove its case and has failed to rebut the presumptions. Ld. Counsel for the complainant has further argued that there are inconsistencies in the testimony of the accused and the accused has failed to lead any cogent evidence. Ld. Counsel for the complainant has contended that the testimony of the complainant witnesses in cross examination is uncontroverted and the complainant has proved its case beyond reasonable doubt.
Umang Digitally signed by
Umang Joshi
Joshi Date: 2023.05.29
15:25:54 +05'30'
CC NI Act No. 437/2020 Page 6 of 35
12.Per contra, Ld. Counsel for the accused has argued that the accused has raised a probable defence and has rebutted the statutory presumptions and the complainant has not proved its case beyond reasonable doubt. It is further argued by Ld. Counsel for the accused that the accused has no legal liability towards the complainant. Ld. Counsel for the accused has argued that the accused does not have any legally enforceable debt or liability towards the complainant. It is further argued by Ld. Counsel for the accused that the cheque in question was issued by the accused to the complainant company as a security cheque and it cannot be said to have been issued in discharge of any legally enforceable debt. Ld. Counsel for the accused has further argued that the cheque in question was misused by the complainant company. Ld. Counsel for the complainant has further contended during final arguments that CW-1 has no knowledge about the business company. Ld. Counsel for the accused has further argued that CW-2 in his cross examination has admitted that there is a difference of ink in the particulars of the cheque in question which casts a doubt on the complainant's case. Ld. Counsel for the accused further contends that the accused has raised a probable defence and the complainant has not proved the ingredients of the offence under Section 138 of the NI Act.
13. I have heard the submissions made by counsel for both the parties and have also perused the record thoroughly.
G. Legal provisions and the legal principles:
14. Before appraising the facts and appreciating the evidences of the present case in detail, it is imperative to encapsulate the relevant legal provisions germane to the adjudication of the present case. The present complaint case has been filed Umang Digitally signed by Umang Joshi Joshi Date: 2023.05.29 15:26:00 +05'30' CC NI Act No. 437/2020 Page 7 of 35 under Section 138 of the NI Act alleging the dishonour of the cheque in question bearing number no. 272031 dated 07.10.2020 amounting to Rs.
9,02,598/-.
15. Section 138 of the NI Act mandates that the dishonour of a cheque is an offence if the ingredients mentioned therein are fulfilled. It is therefore imperative to refer the bare provision of Section 138 of the NI Act and the same is as follows:
"Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both."
16.In the case of Kusum Ingots and Alloys Ltd. vs. Pennar Peterson Securities Ltd. (2000) 2 SCC 745, the apex court has expounded the ingredients which are required to be fulfilled in order to constitute an offence under Section 138 of the NI Act. The relevant portion of the said judgment laying down the ingredients to be satisfied for making out a case under Section 138 of the NI Act is reproduced as under:
i. "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 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;
Umang Digitally signed by Umang Joshi Joshi Date: 2023.05.29 15:26:06 +05'30' CC NI Act No. 437/2020 Page 8 of 35 iii. 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;
iv. 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 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;
v. 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;"
17. A drawer of the cheque can be said to have committed an offence under Section 138 of the NI Act only when all the above mentioned ingredients are fulfilled. It is pertinent to note that Section 138 of the NI Act cannot be read in isolation and it has to be read with certain legal presumptions which arise in favour of the payee or holder in due course and the said presumptions are enunciated under Section 139 and 118 of the NI Act. Section 139 of the NI Act reads as follows:
"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, or any debt or other liability."
18.Furthermore, Section 118 (a) of the NI Act deals with presumption of consideration and provides that until the contrary is proved, it shall be presumed that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has be accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration. The aforesaid legal presumptions which arise in favour of the complainant are rebuttable in nature and the burden to rebut the said presumptions is on the Umang Digitally signed by Umang Joshi Joshi Date: 2023.05.29 15:26:15 +05'30' CC NI Act No. 437/2020 Page 9 of 35 accused. Furthermore, it is well settled in a catena of judgments that the accused can rebut the said presumptions by showing preponderance of probabilities. The accused can rebut the said presumptions by raising a probable defence or by discrediting or creating doubt on the case of the complainant. Furthermore, it is not incumbent upon the accused to lead direct evidence to rebut the said presumptions and the accused may rebut the said presumptions by showing preponderance of probabilities and for that purpose, he may also rely upon the evidences adduced by the complainant.
19. In this context, it is imperative to refer to the case of Rangappa vs. Sri Mohan (2010) 11 SCC 441 wherein it has been held by the Hon'ble Supreme Court as follows:
"It is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of `preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own."
20.Therefore, the legal position that emerges is that for rebuttal of the presumptions envisaged under Section 139 and 118 of the NI Act, the accused is not required to examine himself and the accused need not step into the witness box as the accused can discharge his burden and probabalise his defence by placing reliance on the materials already brought on record by the complainant. The standard of proof required from the accused to rebut the presumptions is preponderance of probabilities and the accused is not required to prove his defence on the yardstick of proof beyond reasonable doubt as required from the complainant.
Umang Digitally signed
by Umang Joshi
Joshi Date: 2023.05.29
15:26:22 +05'30'
CC NI Act No. 437/2020 Page 10 of 35
H. Undisputed/ Uncontroverted facts
21.The accused in the notice put to him under Section 251 Cr.P.C and in the statement under Section 294 Cr.P.C, has not denied that the cheque in question was issued from his account. Therefore, it is not in dispute that the original cheque in question i.e. Ex.CW-1/2 has been drawn on an account maintained by the accused being the proprietor of Bhumika Pharma. Furthermore, the cheque in question bears the name of the complainant company as the payee and the present complaint has been filed by the complainant company through its authorised representative. The copy of the board resolution dated 12.11.2020 i.e. Ex. CW-1/1 has not been challenged by the accused during the trial and even the authority of CW-1 to depose on behalf of the complainant company is not disputed. Thus, the complainant has been able to discharge the burden of proving that the cheque in question was issued in its favour on an account maintained by the accused. Furthermore, it is not in dispute that the cheque in question was presented within its validity period. Furthermore, the factum of dishonour of the cheque in question with remarks "Drawers Signature Differs"
vide return memo Ex. CW-1/3 is not disputed by accused. Furthermore, all the requirements for filing a complaint under Section 138 of NI Act have been complied with in the present case and the present complaint has been filed within the period of limitation.
Umang Digitally signed
by Umang Joshi
Joshi Date: 2023.05.29
15:26:29 +05'30'
CC NI Act No. 437/2020 Page 11 of 35
I. Points for determination:
a) Whether the legal demand notice was served on the accused in the present case?
b) Whether the presumption under section 118(a) and section 139 of the NI Act can be raised in favour of complainant in the present case?
c) If the answer to the aforesaid is in affirmative, whether the accused has been able to rebut the said presumptions by raising a probable defence?
J. Reasons for the decision:
a) Whether the legal demand notice was served on the accused in the present case?
22. It is pertinent to note that the accused in the notice under Section 251 Cr.P.C and in the statement under Section 294 Cr.P.C has stated that he did not receive the legal demand notice from the complainant asking him to pay the amount of the dishonoured cheque in question. As per the complaint, the legal demand notice was sent through registered post. The legal demand notice is Ex. CW- 1/4, the postal receipts of the legal demand notice is Ex. CW-1/5 (colly) and the returned envelope is Ex. CW-1/6. As per the complaint, the legal demand notice was returned back with remarks 'refused to accept'. However, the postal tracking report has not been filed by the complainant. It is pertinent to mention that the postal receipt as to the dispatch of the legal demand notice is on record Umang Digitally signed by Umang Joshi Joshi Date: 2023.05.29 15:26:36 +05'30' CC NI Act No. 437/2020 Page 12 of 35 and therefore, there is a presumption of its delivery as per Section 27 of General Clauses Act.
23.Even otherwise, it is pertinent to note that the rigour of proving the factum of the legal demand notice being served on the accused has considerably been reduced after the legal position in this regard has been settled by the apex court in C.C. Alavi Haji vs. Palapetty Muhammed (2007) 6 SCC 555. In this case, the Hon'ble apex court has held as follows:
"Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the Court along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the G.C. Act and Section 114 of the Evidence Act."
24. In the present case, the accused has not made the payment of the cheque amount in question to the complainant within 15 days of the receipt of summons of this court. Therefore, in light of the aforesaid legal position, it is not open to the accused to make vague assertions as to the non receipt of the legal demand notice when the accused has not adopted the recourse of making payment of the cheque amount in question to the complainant within 15 days of the receipt of service of summons as laid down in the aforesaid case.
25.Accordingly, it is clear that the legal demand notice Ex. CW-1/4 was duly served upon the accused. The contention of the accused regarding the non receipt of the legal demand notice is accordingly rejected.
Umang Digitally signed by Umang Joshi Joshi 15:26:43 +05'30' Date: 2023.05.29 CC NI Act No. 437/2020 Page 13 of 35
b) Whether the presumptions under Section 118(a) and Section 139 of the NI Act can be raised in favour of complainant in the present case?
26.The first question which needs to be determined is whether the presumption under Section 118(a) and Section 139 of the NI Act can be raised in favour of complainant in the present case. Section 118 (a) and Section 139 of the NI Act provide for legal presumptions as to the issuance of the cheque by the accused in favour of the complainant for consideration and in discharge of a legally enforceable debt or other liability.
27.However, it is imperative to note that the statutory presumption under Section 118 (a) and Section 139 of the NI Act only arises if the accused admits his signatures on the cheque. Therefore, once the accused admits his signature on the cheque in question, the presumption under Section 118 and 139 of the NI Act is drawn in favour of the complainant.
28.In K. Bhaskaran vs. Sankaran Vaidhyan Balan (1999) 7 SCC 510, it has been held by the apex court that if the signature on the cheque is admitted to be that of the accused, then the presumption as provided under Section 118 of the NI Act is applicable and it can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears. Furthermore, in Kalamani Tex vs. P. Balasubramanian (2021) 5 SCC 283, it was held by the apex court as follows:
"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."
Umang Digitally signed by
Umang Joshi
Joshi Date: 2023.05.29
15:26:54 +05'30'
CC NI Act No. 437/2020 Page 14 of 35
29.In this context, it is also imperative to refer the decision of the apex court in Basalingappa vs. Mudibasappa (2019) 5 SCC 418 wherein it was held as follows:
i. "Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability. ii. The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities. iii. To rebut the presumption, it is open for the accused to rely on evidence led by him or accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but 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 witnes box to support his defence."
30.The crux of the aforesaid decisions is that the statutory presumption as envisaged under Section 118 (a) and Section 139 of the NI Act only arises if the accused admits his signatures on the cheque. The execution of the cheque by the accused has to be therefore proved as prerequisite for the applicability of the aforesaid statutory presumptions in favour of the complainant.
31.It is pertinent to note that in the notice under Section 251 Cr.P.C and in the statement under Section 294 Cr.P.C, the accused has admitted his signature on the cheque in question and has further admitted that the cheque in question is from his account. Therefore, it is concluded that the presumption under Section 118(a) and Section 139 of the NI Act that the cheque in question was issued in discharge of a legally recoverable debt or other liability is raised in favour of complainant in the present case.
Umang Digitally signed
by Umang Joshi
Joshi Date: 2023.05.29
15:27:02 +05'30'
CC NI Act No. 437/2020 Page 15 of 35
c) Whether the accused has been able to rebut the said presumptions by raising a probable defence?
32.Since the execution of the cheque in question in favour of the complainant has been admitted by the accused, the next question which needs to be determined is whether the accused has been able to rebut the aforesaid statutory presumptions. Therefore, the onus of proof is now upon the accused to raise a probable defence so as to rebut the presumption of the existence of a legally recoverable debt arisen in favour of the complainant.
33.It is a settled law that the presumption under Section 118(a) and Section 139 of the NI Act is a rebuttable presumption and the accused can rebut the said presumption by raising a probable defence on a scale of preponderance of probabilities or by discrediting or creating doubt on the case of the complainant. Furthermore, it is not incumbent upon the accused to lead direct evidence to rebut the said presumptions and the accused may rebut the said presumptions by showing preponderance of probabilities. The standard of proof expected from the accused to establish the probability of his defence is not the same as the standard of proof expected from prosecution or complainant in a criminal trial. While the complainant or prosecution is expected to prove its case beyond reasonable doubt, the accused is expected to prove his defence on the scale of preponderance of probabilities.
34. Therefore, it is imperative to examine the defence of the accused in the present case. In the plea of defence in the notice under Section 251 Cr.P.C, the accused has stated that he had given the cheque in question as a security to the complainant company in January, 2019. The accused has further stated that the Umang Digitally signed by Umang Joshi Joshi Date: 2023.05.29 15:27:09 +05'30' CC NI Act No. 437/2020 Page 16 of 35 cheque in question was presented without his knowledge and that he had informed the MD of the complainant company namely Mr. Narender Kukreja as soon as he got the knowledge of presentment of the cheque in question. The accused has further denied any liability towards the complainant. The aforesaid defence has been reiterated by the accused in his statement under Section 313 Cr.P.C read with Section 281 Cr.P.C and also in his deposition as DW-1 wherein he stated that he had given the cheque in question to the complainant company as a security and further stated that he had handed over the cheque in question to an employee and medical representative of the complainant company namely Mr. Gaurav Jha (DW-3 herein) so as to be given to the complainant company. The primary defence of the accused is therefore that the cheque in question was given by him to the complainant company as a security and the same was presented without his knowledge.
35.In this context it is worthwhile to mention that the mere assertion of the accused that the cheque in question was given to the complainant company as a security is not sufficient in itself to rebut the presumptions envisaged under the NI Act. Merely making a statement that the cheque in question is a security cheque is not a probable defence in itself. Since the presumptions are in favour of the complainant in the present case, the onus was upon the accused to prove its defence on the scale of preponderance of probabilities. In order to prove its case, it was incumbent upon the accused to prove his defence on the scale of preponderance of probabilities or by discrediting the case of the complainant by leading cogent evidence or by relying on the material already on record so as to rebut the statutory presumption arising in favour of the complainant. The accused had the onus to prove that the cheque in question was given as a security and that it did not represent any legally recoverable debt or liability.
Umang Digitally signed
by Umang Joshi
Joshi Date: 2023.05.29
15:31:19 +05'30'
CC NI Act No. 437/2020 Page 17 of 35
36.Since the primary defence of the accused is that the cheque in question was given to the complainant company as a security, it becomes imperative to discuss the legal position with respect to a security cheque. It is pertinent to note that the expression 'security cheque' does not find a mention in the NI Act and no exception has been carved out under Section 138 of the NI Act for a cheque issued as a security.
37.The defence of security cheque has been examined by the Hon'ble Delhi High Court in Suresh Chandra Goyal vs. Amit Singhal Crl. Appeal No. 601/2015 decided on 14.05.2015, wherein it was held as follows:
"There is no magic in the word "security cheque", such that, the moment the accused claims that the dishonoured cheque (in respect whereof a complaint under Section 138 of the Act is preferred) was given as a "security cheque", the Magistrate would acquit the accused. The expression "security cheque" is not a statutorily defined expression in the NI Act. The NI Act does not per se carve out an exception in respect of a 'security cheque' to say that a complaint in respect of such a cheque would not be maintainable. There can be mirade situations in which the cheque issued by the accused may be called as security cheque, or may have been issued by way of a security, i.e. to provide an assurance or comfort to the drawee, that in case of failure of the primary consideration on the due date, or on the happening (or not happening) of a contingency, the security may be enforced. While in some situations, the dishonor of such a cheque may attract the penal provisions contained in Section 138 of the Act, in others it may not."
38.Furthermore, recently the Hon'ble Supreme Court in Sripati Singh vs. State of Jharkhand & Anr. 2021 SCC OnLine SC 1002, explained the broad contours of a security cheque and held as follows:
"A cheque issued as security pursuant to a financial transaction cannot be considered as a worthless piece of paper under every circumstance. 'Security' in its true sense is the state of being safe and the security given for a loan is something given as a pledge of payment. It is given, deposited or pledged to make certain the fulfilment of an obligation to which the parties to the transaction are bound. If in a transaction, a loan is advanced and the borrower agrees to repay the amount in a specified timeframe and issues a cheque as security to secure such repayment; if the loan amount is not repaid in any other form before the due date or if Umang Digitally signed by Umang Joshi Joshi Date: 2023.05.29 15:27:30 +05'30' CC NI Act No. 437/2020 Page 18 of 35 there is no other understanding or agreement between the parties to defer the payment of amount, the cheque which is issued as security would mature for presentation and the drawee of the cheque would be entitled to present the same. On such presentation, if the same is dishonoured, the consequences contemplated under Section 138 and the other provisions of N.I. Act would flow."
39.Therefore, succinctly stated, the legal position that emerges is that it is immaterial as to whether the cheque has been given towards any payment actually due or for security purposes and rather what has to be examined by the court is that there should be a legally enforceable debt or liability existing as on the date of presentation of cheque. Therefore, merely raising the plea that the cheque in question was issued as a security will not by itself absolve the accused from legal liability under the NI Act. In other words, the mere defence of security cheque is not sufficient to rebut the presumption under Section 118(a) and Section 139 of NI Act and the accused has prove that there was no legally enforceable debt or liability as on date of presentment of the cheque in question.
40.The legal position being thus, it is now imperative to analyse the facts and appreciate the evidences on record in the present case. Since the primary defence of the accused is that the cheque in question was given to the complainant as a security, it was incumbent upon the accused to prove his said defence on the scale of preponderance of probabilities. Merely making a statement that the cheque was a security cheque is not sufficient in itself to rebut the statutory presumptions envisaged under the NI Act. Furthermore, it is not the case of the accused that some amount was already repaid by him to the complainant company and therefore, the onus was all the more upon the accused to prove that the cheque in question did not represent any legally Umang Digitally signed by Umang Joshi Joshi Date: 2023.05.29 15:27:47 +05'30' CC NI Act No. 437/2020 Page 19 of 35 recoverable debt or liability. Therefore, it was incumbent upon the accused to substantiate or probabalise his defence by leading cogent evidence. However, throughout the entire trial, the accused has failed to substantiate and fortify his defence that the cheque in question was given to the complainant company as a security. Furthermore, the accused has even failed to substantiate with reasonable certainty, the reason and the purpose for handing over the alleged security cheque to the complainant company.
41.To begin with, there are various contradictions and inconsistencies in the testimony and the versions put forth by the accused which renders the defence of the accused unworthy of credence. In the plea of defence in the notice under Section 251 Cr.P.C, the accused has stated that he had given the cheque in question as a security to the complainant company in January, 2019. However, in his statement under Section 313 Cr.P.C read with Section 281 Cr.P.C, the accused has stated that he had given the cheque in question to the complainant company as a security in December, 2018. The aforesaid inconsistency in the version of the accused shows that the accused is himself uncertain about the exact period of handing over the alleged security cheque by him to the complainant. Furthermore, at the stage of framing of notice, the accused had categorically denied filling the particulars on the cheque in question including the date and name of the payee. However, in his examination in chief, the accused DW-1 deposed that he had filled only the name of the complainant company and had signed the said cheque. In this context, it is pertinent to mention that it is no longer res integra that law does not require that the particulars on the cheque should be filled by the drawer himself and therefore, if the signatures on the cheque are admitted by the accused, the same is sufficient. However, in his examination in chief, the accused has admitted that Umang Digitally signed by Umang Joshi Joshi Date: 2023.05.29 15:27:59 +05'30' CC NI Act No. 437/2020 Page 20 of 35 he had filled the name of the complainant company on the cheque in question as opposed to his statement at the stage of framing of notice wherein the accused had categorically denied filling any particulars on the cheque in question. The said inconsistencies and discrepancies in the versions of the accused the cast a doubt on veracity of the version put forth by the accused
42.Furthermore, to understand the contours of the defence of the accused, it is imperative to refer to the examination in chief of the accused. In his examination in chief, the accused DW-1 deposed that he was a stockist of the complainant company. DW-1 further deposed that he had given the cheque in question as security to one Mr. Gaurav Jha (DW-3 herein) who as per the accused was a medical representative of the complainant company and the same was done at the behest of two employees of the complainant company namely Mr. Sameer Wadhwa and Mr. Ankit Singh. The accused further deposed that he had taken a receiving from DW-3 at the time of giving the cheque in question to him. During his examination in chief, DW-1 had placed on record the said receiving allegedly obtained by him from DW-3 at the time of giving the cheque in question to him and the said document was exhibited as Ex. DW1/1. However, interestingly, during his cross examination, the accused deposed that he did not take any receiving of the document handed over by him to DW-3. Therefore the accused in his cross examination has contradicted his own version as stated by him in his examination in chief and the same is inexplicable and is indeed a material contradiction. The testimony of the accused is far from being uncontroverted and there are glaring contradictions and inconsistencies in the testimony of the accused which renders the defence of the accused unworthy of credence and it additionally casts a grave doubt on the entire defence put forth Umang by the accused. Digitally signed by Umang Joshi Joshi Date: 2023.05.29 15:28:14 +05'30' CC NI Act No. 437/2020 Page 21 of 35
43. Furthermore, in his cross examination, the accused has admitted that no written communication was made by him with the complainant company, before or after handing over the security cheque by him to DW-3. Therefore, as per the own admission of the accused during cross examination, there is no document or any written communication with the complainant company to substantiate that the cheque in question was given as a security. The accused has therefore failed to substantiate his defence of the cheque in question being a security cheque by leading any cogent evidence and has merely made mere bald assertions unsubstantiated by any cogent and credible evidence. The onus was upon the accused to prove his defence but the accused has miserably failed to prove and substantiate that the cheque in question was handed over to the complainant company for security.
44.The entire defence of the accused is that the cheque in question was given by him as security to the complainant company through DW-3 who as per the accused was an employee and also a medical representative of the complainant company and as per the accused, the same was done at the behest of two employees of the complainant company namely Mr. Sameer Wadhwa and Mr. Ankit Singh. However, in his cross examination, the accused deposed that he did not check any written authorisation of DW- 3 at the relevant time. In other words, the accused has admitted that he did not even verify whether DW-3 had any authority to act for and on behalf of the complainant company. Therefore, as per the accused, he simply gave the cheque in question to DW-3, without exercising any due diligence and without even verifying the authority of DW-3 to accept the said cheque on behalf of the complainant company, which thereby casts a grave doubt on the defence put forth by the accused.
Umang Digitally signed by
Umang Joshi
Joshi Date: 2023.05.29
15:28:23 +05'30'
CC NI Act No. 437/2020 Page 22 of 35
45.In this backdrop, it is worthwhile to mention that no reasonable man of ordinary prudence would hand over his cheque to any third person, purportedly acting on behalf of any entity, without first verifying the credentials and the authority of that person. The accused, in the present case is a businessman and he is running a proprietorship firm and therefore, the accused cannot be expected to act with naivety. Therefore, it is highly unlikely and improbable that the accused would hand over his cheque, allegedly for security purpose to any third person (i.e. DW-3) purportedly acting on behalf of the complainant company, without even verifying the authority and credentials of that person. As per the accused, he simply gave his cheque to DW-3, who was acting on behalf of the complainant company without even verifying whether DW-3 had any authority to act on behalf of the complainant company. The aforesaid conduct of the accused does not appear to be that of an ordinary prudent person and entire the defence of the cheque in question being a security cheque appears to be an afterthought. No cogent evidence whatsoever has been brought on record by the accused to show that the cheque in question was indeed a security cheque. Therefore, the defence of security cheque put forth by the accused does not appear to be a probable defence and is not sufficient to rebut the statutory presumption in favour of the complainant.
46.At this stage, it is imperative to examine the testimony of DW-3. It is pertinent to mention that the testimony of Mr. Gaurav Jha i.e. DW-3 is wholly unreliable and it has eroded the credibility of the defence of the accused for reasons explained hereunder. In his testimony, DW-3 claimed himself to be a former employee of the complainant company but he did not bring any document to substantiate the same. Therefore, DW-3 could not even prove as to how he was related to the complainant company and the same casts a grave doubt on the Umang Digitally signed by Umang Joshi Joshi Date: 2023.05.29 15:28:36 +05'30' CC NI Act No. 437/2020 Page 23 of 35 credibility of the said witness. Be that as it may, DW-3 deposed that he had taken a document and a security cheque from the accused for it giving it to the complainant company and further deposed that the same was done on the instructions of two employees of the complainant company namely Mr. Ankit Kumar Singh and Mr. Sameer Wadhwa. However, in his cross examination, DW-3 admitted that he did not have any authority letter from the complainant company to obtain any cheque or payment on behalf of the complainant company. DW-3 further admitted that there was no receiving or acknowledgment in his favour by the complaint company for receiving any cheque on behalf of the complainant company. The said aforesaid admission has not only eroded the credibility of the testimony of DW-3 but even the entire defence of the accused has been reduced to a sham by virtue of such an admission. The entire defence of the accused is that he had given the cheque in question as security to DW-3, who as per the accused was an employee and a medical representative of the complainant company, so as to be handed over to the complainant company and the same was done at the behest of two employees of the complainant company. However, DW-3 has squarely admitted that he did not have any authority letter from the complainant company to obtain any cheque or payment on behalf of the complainant company and has further admitted that there is no receiving or acknowledgment in his favour for receiving any cheque on behalf of the complainant company. Furthermore, in his cross examination, even the accused admitted that he did not verify whether DW-3 had any written authorisation to act on behalf of the complainant company at the relevant time i.e. at the time of handing over the alleged security cheque by the accused to DW-3. Furthermore, even DW-3 in his deposition has admitted that he had no authority from the complainant company to obtain any cheque or payment on behalf of the complainant company and the Umang Digitally signed by Umang Joshi Joshi Date: 2023.05.29 15:28:46 +05'30' CC NI Act No. 437/2020 Page 24 of 35 aforesaid admission by DW-3 has demolished the credibility of the entire defence put forth by the accused. It is inexplicable and perplexing as to why the accused would even hand over the cheque in question to DW-3, who himself has stated that he had no authority to obtain any cheque or payment on behalf of the complainant company. Even otherwise, it has not been proved by the accused or even by DW-3 that DW-3 was ever an employee of the complainant company as alleged by the accused and the entire testimony of DW-3 becomes irrelevant and cannot be relied upon. Consequently, the document filed by the accused i.e. document Ex. DW1/1 which is the alleged receiving obtained by the accused from DW-3 at the time of giving the cheque in question to him is held to be a sham document and is also held to be wholly irrelevant and unreliable. Even otherwise, perusal of Ex. DW1/1 denotes that it does even not bear the stamp and seal of the complainant company and is also undated and it cannot be relied upon. Furthermore, the document filed by DW-3 i.e. document Ex. DW3/1 which is the alleged receipt issued by Mr. Ankit Kumar Singh and Mr. Sameer Wadhwa is also held to be wholly irrelevant and cannot be relied upon. Even otherwise, perusal of Ex. DW3/1 denotes that it does even not bear the stamp and seal of the complainant company and the same is a handwritten piece of paper which hardly proves the defence of the accused and the same is wholly irrelevant and an unreliable piece of evidence.
47.It is also imperative to analyse the testimony of the other defence witness i.e. Mr. Pappu Kumar who examined himself as DW-2. In his examination in chief, DW-2 claimed himself to be a former employee of the complainant company but even he did not bring any document to substantiate the same. Therefore, even DW-2 could not prove as to how he was related to the complainant company and the same casts a doubt on the credibility of the said witness. Even Umang Digitally signed by Umang Joshi Joshi Date: 2023.05.29 15:28:55 +05'30' CC NI Act No. 437/2020 Page 25 of 35 otherwise, the testimony of DW-2 is irrelevant for reasons explained hereunder. In his testimony, DW-2 stated that he has come to depose at the behest of the accused and further admitted that he did not have any knowledge about the ledger account between the complainant and the accused. It is inexplicable as to why a person who himself does not have any knowledge about the present case and who could not even prove his association with the complainant company was brought as a witness by the accused. The testimony of DW-2 has not given any credence whatsoever to the case of the accused and rather the entire testimony of DW-2 is irrelevant as he could not even prove his association with the complainant company and more importantly, he did not even have any knowledge about the present case. The testimony of DW-2 and DW-3 has entirely eroded the credibility of the defence put forth by the accused rather than giving any credence or even semblance of probability to the version of the accused. The testimony of DW-2 and DW-3 has not probabalised and fortified the defence of the accused but rather it has entirely weakened the defence of the accused. Furthermore, even the entire defence put forth by the accused is nothing but moonshine and has remained unsubstantiated throughout the entire trial. In view of the aforesaid, the credibility of the entire defence of the accused is eroded and a grave doubt is cast on the veracity of the version put forth by the accused.
48.Furthermore, both the complainant witnesses withstood the rigours of cross examination and no material contradiction, variation, improvement or omission could be elicited by the accused. Therefore, even during the cross examination of the complainant witnesses, the accused could not discredit the case of the complainant and the accused failed to punch holes in the case of the Umang Digitally signed by Umang Joshi Joshi Date: 2023.05.29 15:29:04 +05'30' CC NI Act No. 437/2020 Page 26 of 35 complainant so as to rebut the statutory presumptions. To prove its case, the complainant examined its authorised representative namely Mr. Pankaj Verma as CW-1 and its accountant namely Mr. Om Prakash Singh as CW-2. It is pertinent to mention that the accused did not challenge the copy of board resolution dated 12.11.2020 i.e. Ex. CW-1/1 authorising CW-1 to represent and to depose on behalf of the complainant company in the present case. Therefore, the authority of CW-1 to depose on behalf of the complainant company is not in dispute in the present case. In his cross examination, CW-1 deposed that the accused was a stockist of the complainant company and further deposed that the complainant company was supplying medicines in bulk to the accused. CW-1 further deposed that the accused has a liability of Rs. 9,02,598/- towards the complainant. CW-1 denied that the complainant company has misused the cheque in question and further denied that the cheque in question was given by the accused to the complainant company as security. Furthermore, CW-2 being the other complainant witness and being the accountant of the complainant company, deposed that as per the books of the complainant, a sum of Rs. 9,02,598/- is outstanding against the accused and further deposed that the cheque in question was issued by the accused in pursuance of his liability. It is pertinent to mention that in his cross examination, CW-2 admitted that at the time of starting the business, the complainant company used to take security cheque from the stockist and also admitted that the accused was the stockist of the complainant company. However, when asked specifically about the cheque in question, CW-2 deposed that he cannot say that the accused had given the cheque in question as security to the complainant. Therefore, CW-2 in his cross examination did not specifically admit or depose that the cheque in question was given by the accused to the complainant company as security. CW-1 and CW-2 corroborated each other and also corroborated the averments of the Umang Digitally signed by Umang Joshi Joshi Date: 2023.05.29 15:29:14 +05'30' CC NI Act No. 437/2020 Page 27 of 35 complaint as per which a sum of Rs. 9,02,598/- is outstanding against the accused.
49.In the entire cross examination of the complainant witnesses, the accused has been unable to elicit any admission from the complainant witnesses admitting the defence of the accused. Furthermore, during the cross examination of CW-1 and CW-2, the accused could not discredit the case of the complainant and the accused did not even ask any question or put any suggestion to the complainant witnesses with respect to the copy of ledger account filed by the complainant company i.e. document Mark A. The genesis of the complainant's case is that as per the books of the complainant, a sum of Rs. 9,02,598/- is shown to be outstanding against the accused and that the accused had given the cheque in question to the complainant to discharge the said liability. It is pertinent to mention that even the amount of the cheque in question is Rs. 9,02,598/- i.e. the same corresponds with the amount alleged to be outstanding against the accused as per the books of the complainant. Therefore, it was incumbent on the accused to discredit the said version of the complainant by atleast disputing or challenging the veracity and genuineness of the copy of the ledger account filed by the complainant i.e. document Mark A. The burden of proof was upon the accused to show that there were no subsisting liability upon him qua the complainant at the time of issuance of the cheque in question but the accused did not discharge the said burden of proof. However, throughout the entire trial, the accused did not even challenge the copy of the said ledger account filed by the complainant and the accused did not even contend that the ledger account filed by the complainant is false or fabricated. If the accused was genuinely questioning his liability towards the complainant company, the accused should have atleast disputed the veracity of the said ledger account filed by the Umang Digitally signed by Umang Joshi Joshi Date: 2023.05.29 15:29:26 +05'30' CC NI Act No. 437/2020 Page 28 of 35 complainant and should have challenged the basis of computation of the alleged outstanding amount of Rs. 9,02,598/- but the accused failed to do so. Admittedly, there were business relations between the complainant company and the accused as the complainant company used to supply medicines to the accused who was a stockist of the complainant company. Therefore, the accused should have questioned the complainant witnesses on various aspects and should have asked CW-1 and CW-2 to disclose the basis of computation of the alleged outstanding amount of Rs. 9,02,598/- so as to discredit or create a doubt in the case of the complainant. However, no such questions were asked by the accused during the cross examination of the complainant witnesses. By choosing not to ask any such question from the complainant witnesses even during his cross examination, the accused has failed to probabalise his defence and has failed to rebut the statutory presumptions. Therefore, even during the cross examination of the complainant witnesses, the accused failed to punch holes in the case of the complainant and the accused could not disprove or discredit the case of the complainant.
50.Even the documents produced by the accused during the trial do not substantiate the defence of the accused in any manner and the rather the said documents are wholly irrelevant for reasons explained hereunder. During the cross examination of CW-1, the accused had placed on record a document claiming to be a debit note in respect of the return of the medicines by the accused and the said document was marked as Mark 1. CW-1 during his cross examination was shown the said document and deposed that he is not aware whether the accused had come to the complainant company to return the medicines as per the said debit note. Furthermore, the accused had produced another document during the cross examination of CW-1, which the accused Umang Digitally signed by Umang Joshi Joshi Date: 2023.05.29 15:29:36 +05'30' CC NI Act No. 437/2020 Page 29 of 35 claimed was the details of the customers from the complainant company had to recover certain amount. The said document was marked as Mark 2. With respect to document Mark 2, CW-1 deposed that he is unaware regarding the said document. One fails to understand as to how the said documents are in any manner relevant to prove or substantiate the defence of the accused. The primary defence of the accused is that the cheque in question was given to the complainant company as security. Therefore, it is inexplicable as to how the purported debit note i.e. Mark 1 and the purported details of the customers of the complainant company i.e. Mark 2 as filed by the accused, has in any manner substantiated or probabalised the defence of the accused. Furthermore, it is pertinent to mention that during his examination in chief, the accused did not depose anything as to the aforesaid documents and the accused merely reiterated his defence of security cheque. Therefore, even the accused has failed to substantiate the credibility of the aforesaid documents produced by him. Accordingly, documents Mark 1 and Mark 2 are held to be irrelevant and they have not given any credence to the defence of the accused.
51. Furthermore, during his examination in chief, the accused deposed that the cheque in question was presented without his knowledge. The accused further deposed that he contacted the manager of the complainant company namely one Mr. Narender Kukreja through whatsapp and told him that the cheque in question was presented without his knowledge. To substantiate the same, the accused during his examination in chief, placed on record a document claiming to be the print outs of the email sent by him to the complainant company on 08.10.2020. The said document was marked as Mark A. Perusal of the said document prima facie denotes that the purported email was not delivered to the intended recipient. Furthermore, perusal of document Mark A also denotes that Umang Digitally signed by Umang Joshi Joshi Date: 2023.05.29 15:29:46 +05'30' CC NI Act No. 437/2020 Page 30 of 35 it contains a screenshot of an alleged whatsapp message sent to one Mr. Narender Kukreja. However, it is unclear whether the email/whatsapp was indeed sent to the complainant company. Assuming for the sake of convenience, that the said email and the whatsapp conversation was indeed sent by the accused to the complainant company, even then it is wholly irrelevant for reasons explained hereunder. Perusal of the contents of the said email and whatsapp conversation denotes that it does not even mention the particulars of the cheque in question and it also does not mention the amount of the cheque in question. No details or particulars of the cheque in question are mentioned in the said alleged email and whatsapp conversation and by failing to mention the same, the accused has failed to prove that the said alleged email/whatsapp conversation pertained to the cheque in question. Accordingly, in view of the aforesaid, document Mark A is held to be irrelevant and cannot be relied upon. Furthermore, the accused has not filed any document to show that the accused had written any letter to the complainant company prior to the dishonor of the cheque in question, so to get back his cheque from the complainant company and the aforesaid conduct of the accused renders the defence of the accused unworthy of credence.
52.Furthermore, during his examination in chief, the accused deposed that he maintains ledger account of the complainant company and further deposed that as per his books of account, a sum of Rs. 14,46,585/- is to be collected by the employees of the complainant company from the market. During his examination in chief, the accused placed on record a document claiming to be the print outs of the ledger account of the complainant company and the said document was marked as Mark B. However, in his cross examination, the accused DW-1 deposed that document Mark B is the list of his vendors from Umang Digitally signed by Umang Joshi Joshi Date: 2023.05.29 15:29:57 +05'30' CC NI Act No. 437/2020 Page 31 of 35 whom he had to collect payments. Therefore, the accused is himself uncertain as to the description of document Mark B as the nomenclature of the document Mark B changed from being the ledger account of the complainant company to being the list of vendors of the accused and the same is inexplicable. The accused in his cross examination further deposed that he had not given any notice or written communication to his vendors mentioned in document Mark B for recovery of any payment. Be that as it may, the accused has miserably failed to show as to how the said document is relevant to prove its defence or to even discredit the case of the complainant and it is inexplicable as to how the document Mark B as filed by the accused, has substantiated or probabalised the defence of the accused. Therefore, the document Mark B is held to be wholly irrelevant and has not given any credence to the defence of the accused.
53.Ld. counsel for the accused argued that the cheque in question was misused by the complainant company. However, the said argument is devoid of any merits. During his examination in chief, the accused DW-1 did not depose anything on the alleged misuse of the cheque in question by the complainant. Furthermore, the accused did not take any steps to get back his cheque from the complainant company who is alleged to have misused the same nor did he issue any stop payment instructions to his bank qua the said cheque which thereby casts a doubt on the plea of alleged misuse of the cheque in question by the complainant. Furthermore, if the cheque in question was indeed misused by the complainant company, the accused could have filed a complaint against the complainant company. However, the accused did not file any complaint against the complainant company for the alleged misuse of the cheque in question. The conduct of the accused in not lodging any complaint against the complainant company for the alleged misuse of the cheque in question further erodes the Umang Digitally signed by Umang Joshi Joshi Date: 2023.05.29 15:30:08 +05'30' CC NI Act No. 437/2020 Page 32 of 35 credibility of the defence of the accused. Therefore, the argument as to the alleged misuse of the cheque in question is bereft of any merits.
54.Ld. counsel for the accused has further contended that CW-2 in his cross examination has admitted that there is a difference of ink between the name of the complainant company and the amount written in figures as well as words and the date of the cheque in question. Ld. counsel for the accused has argued that the same casts a doubt on the case of the complainant as the particulars on the cheque in question were not filled by the accused. However, even the said argument is devoid of any merits. It is a settled law that the mere fact that the details in the cheque have not been filled by the drawer, but by some other person is immaterial and if the signatures on the cheque are admitted by the accused, the same is sufficient to give rise to the statutory presumptions. It is pertinent to mention that the execution of the cheque in question is not disputed by the accused in the present case. Furthermore, in Oriental Bank of Commerce vs. Prabodh Kumar Tewar 2022 SCC OnLine SC 1089, it has been held by the apex court that even if the details in the cheque have not been filled up by drawer but by another person, this is not relevant to the defence whether cheque was issued towards payment of a debt or in discharge of a liability. Accordingly, the aforesaid argument raised by Ld. counsel for the accused is devoid of any merits.
55.Furthermore, another argument raised by Ld. counsel for the accused during the stage of final arguments was that CW-1 had no knowledge about the terms and conditions of the business between the complainant company and the accused and it casts a doubt on the case of the complainant. Even the said argument is devoid of any merits as the onus of proving its defence that the cheque in Umang Digitally signed by Umang Joshi Joshi Date: 2023.05.29 15:30:18 +05'30' CC NI Act No. 437/2020 Page 33 of 35 question was a security cheque was upon the accused. However, the accused has miserably failed substantiate and fortify his defence that the cheque in question was given to the complainant company as a security and has merely made mere bald assertions unsubstantiated by any cogent and credible evidence. It is a well settled principle of law that mere assertion of a fact does not amount to proof of the same. The accused has not produced any evidence, documentary or oral, which would provide credibility to his defence. The defence of the accused does not even remotely appear to be a probable defence and the accused has miserably failed to rebut the mandatory presumptions of law envisaged under Section 118 and 139 of the NI Act. The entire defence raised by the accused does not even appear to be probable and the same is unworthy of credence.
56. Furthermore, since the execution of the cheque in question is not disputed by the accused in the present case, Section 139 of the NI Act which is a reverse onus clause becomes operative and a presumption is raised that the cheque was issued for the discharge of a legally enforceable debt or other liability. In such a case, it was incumbent upon the accused to rebut the said presumption by raising a probable defence or by discrediting or creating doubt on the case of the complainant. However, the accused did not lead any cogent evidence and did not even create any doubt on the case of the complainant even during cross examination of the complainant and even during defence evidence. The accused has miserably failed to prove and substantiate his defence throughout the entire trial and has been unable to bring to fore sufficient material or circumstances upon which the court may disbelieve the case of the complainant. No cogent evidence was led by the accused in his defence so as to discredit the case of the complainant or to rebut the statutory presumptions.
Umang Digitally signed
by Umang Joshi
Joshi Date: 2023.05.29
15:30:28 +05'30'
CC NI Act No. 437/2020 Page 34 of 35
K. Decision:
57.In the considered opinion of this court, the accused has not been able to raise a probable defence even on the scale of preponderance of probabilities. The accused has failed to probabalise his defence even on the scale of preponderance of probabilities and has miserably failed to rebut the mandatory presumptions of law envisaged under Section 118 and 139 of the NI Act. All the facts, circumstances and the evidences on record when considered and analysed together render the defence of the accused unworthy of credence and also cast a grave suspicion and doubt on the defence put forth by the accused. Furthermore, nothing substantial has been brought on record by the accused during the entire trial to falsify and discredit the case of the complainant. The defence of the accused has not been substantiated by any cogent evidence and the entire defence of the accused is unworthy of credence for various reasons, as already discussed.
58.Accordingly, the accused is hereby convicted for the offence punishable under section 138 of the NI Act.
Announced in the Open Court on this 29th day of May 2023. This Judgment consists of 35 signed pages.
Digitally signed by Umang Umang Joshi Joshi
Date: 2023.05.29 15:30:40
+05'30'
(UMANG JOSHI)
MM (NI Act) DIGITAL COURT-05,
South West, Dwarka Courts, New Delhi
29.05.2023
CC NI Act No. 437/2020 Page 35 of 35