Delhi District Court
Cc No. 5745/2020 Rahul vs . Rajat Kaushik Page No.1/12 on 28 March, 2022
IN THE COURT OF MS. SONIKA, M.M. 05, N.I. ACT, SOUTH
DISTRICT, SAKET, NEW DELHI
C.C. No. 5745/2020
PS : Saket
Rahul
C/o Sh. Vijay Kumar,
R/o H. No.A2329, 1st Floor,
Gate No.6, Green Field Colony,
Block NHPC Colony,
Faridabad, -121010.
...Complainant
Versus
Rajat Kaushik
S/o Sh.Vijender Sharma
R/o H. No.182, Gali No.11, Churiya Mohalla,
Tughlakabad Village, Jaitpur,
Badarpur, New Delhi-110044.
...Accused
Date of Institution : 22.10.2020
Offence complained of : 138 NI Act
Date of final arguments : 25.03.2022 SONIKA
Date of decision : 28.03.2022
Digitally signed
Plea of guilt : Not guilty by SONIKA
Date: 2022.03.28
Decision : Acquitted 16:11:24 +0530
BRIEF FACTS AND REASONS FOR DECISION OF THE CASE
1. Vide this judgment, this Court shall dispose off the present complaint case instituted by the Complainant invoking the provisions of Section 138 of the Negotiable Instruments Act, 1881( hereinafter referred to as "NI Act").
CC No. 5745/2020 Rahul Vs. Rajat Kaushik Page no.1/12
2. The facts giving rise to the instant complaint case, as per the complainant, may be enumerated as hereafter: the complainant sold a used four wheeler, make Swift Dzire bearing registration no.DL-1ZA-3506 to the accused for total amount of Rs.3,40,000/-. At the time of purchase, the accused had given the token amount of Rs.8,744/- to the complainant and for the rest amount, the accused has issued a PDC bearing no.000029 dated 05.08.2020 for an amount of Rs.3,31,256/- drawn on Kotak Mahindra Bank, L-9, Kalkaji, New Delhi (hereinafter referred to as "the cheque in question") with the expectation of receiving money in his account in the month of August, 2020. Before presentation of cheque in question, the complainant informed the accused and upon his assurance, presented the same for encashment. However, upon presentation the same was dishonoured due to reason 'Funds Insufficient' vide bank returning memo dated 21.08.2020. Thereafter, the complainant sent legal demand notice dated 02.09.2020 to the accused, despite which the accused failed to repay the amount. Thus, the Complainant was constrained to institute the present complaint case.
3. Upon appreciation of pre-summoning evidence affidavit, accused was summoned for an offence punishable under Section 138 of NI Act and notice under Section 251, Code of Criminal Procedure, 1973 (herein after referred to as Cr.P.C.) was served upon accused on 01.02.2021 to which he pleaded not guilty and claimed trial. On the same day, the statement of accused under SONIKA section 294 Cr.P.C. was recorded, wherein he had admitted his signatures on Digitally signed the cheque in question and the bank returning memo. However, the accused by SONIKA Date: 2022.03.28 had denied the receipt of legal demand by stating that the address is incorrect. 16:11:31 +0530 At the time of notice under Section 251 Cr.PC, the accused had stated that he had taken a car from a 3rd person and the complainant acted as a mediator. He further stated that with respect to that car, there was certain money due, amounting to Rs.1,48,000/- and the same had to be paid to Sh. Gopal Singh.
4. Thereafter, vide order dated 05.10.2021, the application under Section 145(2) NI Act filed by the accused was allowed and the accused was granted an opportunity to cross examine the complainant as well as his witnesses, if any.
CC No. 5745/2020 Rahul Vs. Rajat Kaushik Page no.2/12
5. During CE, the Complainant has adopted his pre-summoning evidence affidavit (Ex. CW1/1) as well as the affidavit furnished at the time of amendment of complaint (Ex.CW-1/1A) and relied upon the following documents which were duly exhibited and marked: cheque bearing no. 000029 dated 05.08.2020 for an amount of Rs.3,31,256/- drawn on Kotak Mahindra Bank, L-9, Kalkaji, New Delhi(cheque in question) as Ex.CW1/A, Bank Returning Memo dated 21.08.2020 as Ex.CW1/B, Legal demand notice dated 02.09.2020 as Ex.CW1/C, Postal Receipts as Ex.CW1/D, Internet generated tracking reports as Ex. CW1/E and The bank statement of M/s ANS9 Innovations (proprietorship firm of the complainant) for a period 01.05.2018 to 06.09.2019 as Ex.CW-1/F and the blank cheque bearing no.088055 handed over by Sh. Gopal Singh alongwith the affidavit sworn by Sh. Gopal Singh as Ex.CW-1/G.
6. The Complainant examined only one witness i.e. himself as CW-1 and he was duly cross examined at length by the Ld. Counsel for accused. CE was closed vide order dated 22.10.2021.
7. Accused was, thereafter, examined U/s 281 r/w Sec 313 Cr.P.C. on 14.12.2021, wherein entire incriminating evidence was put to him. At this stage, he has stated that he had purchased a Swift car from the complainant for an amount of Rs.2,04,000/-. He further stated that at that time, the permit or other documents pertaining to the car were not complete and it was agreed that SONIKA the same will be issued in his name and the payment will be made by him and Digitally signed the same had to be deducted from the amount of Rs.2,04,000/-. He further by SONIKA Date: stated that he had completed all the documents and had spent Rs.96,000/-. He 2022.03.28 16:11:39 +0530 further submitted that, thereafter, the remaining amount was payable in installments. He further stated that he had paid installments of Rs.10,000/- only by way of cash. Since, the accused chose to lead evidence in his defence, matter was fixed for DE.
8. Accused examined himself as DW-1 and his father Sh. Vijender Sharma as DW-2 and they were duly cross examined by the Ld. Counsel for Complainant. During his examination in chief, DW-2 has filed a police CC No. 5745/2020 Rahul Vs. Rajat Kaushik Page no.3/12 complaint dated 14.09.2020 lodged at PS Govindpuri against the complainant and the same was exhibited as Ex.DW-2/A. DE was closed on 23.02.2022 and the matter was fixed for final arguments.
9. I have considered the rival submissions of the parties and perused the entire evidence led by the parties and the material available on record.
10. During the course of final arguments, Ld. Counsel for complainant argued that there exists legally enforceable liability in favour of the complainant on behalf of the accused. He further argued that the cheque in question (Ex.CW1/A) was issued to the complainant and the signatures has already been admitted by the accused. He further argued that upon presentation the cheque has been dishonored and the same has been proved by the cheque return memo which is Ex.CW1/B. Further, he argued that the demand notice (Ex.CW1/C) was duly served upon the accused. He further argued that the complainant did not receive any payment after service of legal notice. Ld. Counsel for complainant submitted that all the ingredients of Section 138 NI Act are fulfilled and the accused should be convicted. The ld. Counsel for complainant has placed reliance upon the judgment passed by Hon'ble Supreme Court C.C.Alavi Haji vs. Palapetty Muhammed, 2007 (6) SCC 555.
11. Per contra, ld. Counsel for accused argued that the cheque in question was issued for security purpose as the accused had purchased a car from the complainant. He further argued that the car was not registered in the name of complainant nor he was authorized by the original owner to enter into any SONIKA transaction with respect to that car. He further argued that no legal liability Digitally signed exist in favour of the complainant as the car was never transferred in the name by SONIKA Date: of accused. He further argued that the accused had never received any legal 2022.03.28 16:11:45 +0530 demand notice and the complainant has deliberately sent the demand notice on incorrect address, despite having the original Aadhaar card of accused. He prayed that the accused be acquitted of the offence. In support of his contentions, he has relied upon the order passed by National Consumer Dispute Redressal in Dewar Motors @ Dewesh Motors Vs. Uttam Bhuyia, the CC No. 5745/2020 Rahul Vs. Rajat Kaushik Page no.4/12 revision petition no.2680 of 2016.
12. In the backdrop of the foregoing factual score, this Court shall now proceed to examine the position of law governing the facts peculiar to the present case.
13. The following ingredients must be satisfied in order to bring home the guilt of a person accused for the commission of an offence punishable under Section 138 of NI Act, which has also been observed by the Hon'ble Supreme Court of India in the matter of Jugesh Sehgal Vs. Shamsher Singh Gogi, (2009) 14 SCC 683:
"9. It is manifest that to constitute an offence under Section 138 of the Act, the following ingredients are required to be fulfilled:
(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;
(ii) the cheque should have been issued for the discharge, in whole or in part, of any debt or other liability;
(iii) that cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier;
(iv) that cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank;
(v) the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and Digitally signed by SONIKA SONIKA Date:
2022.03.28 16:11:52 +0530 CC No. 5745/2020 Rahul Vs. Rajat Kaushik Page no.5/12
(vi) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice"
The abovementioned proposition of law was reiterated by the Hon'ble Supreme Court in the matter of Aparna A. Shah v M/s Sheth Developers P. Ltd & Anr. (2013)8 SCC 71.
14. It is a well settled principle of criminal jurisprudence that a criminal trial precedes on the presumption of innocence of the accused i.e. an accused is presumed to be innocent unless proved guilty. Thus, normally the initial burden is on the complainant/ prosecution to prove the guilt of the accused and the standard of proof for the same is beyond reasonable doubt. However, in offences under Section 138 NI Act, there is a reverse onus clause, which is contained in Sections 118 and 139 of the Act.
Section 118 of the N.I Act provides:
"Presumptions as to negotiable instruments: Until the contrary is proved, the following presumptions shall be made:
(a) of consideration - that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred was accepted, indorsed, negotiated or transferred for consideration;"
Section 139 of the N.I Act further provides as follows:
SONIKA "Presumption in favour of holder - it shall be presumed, unless the contrary is proved, that the holder of a cheque received the Digitally signed by SONIKA Date:
cheque of the nature referred to in Section 138 for the discharge, in 2022.03.28 16:12:02 +0530 whole or in part, of any debt or other liability".
15. Once the foundational facts that the cheques in question bears the signatures of the accused and the same has been drawn on account maintained by him are established, a factual base is established to invoke the presumption CC No. 5745/2020 Rahul Vs. Rajat Kaushik Page no.6/12 of cheque having being issued in discharge of a legally recoverable debt and drawn for good consideration by virtue of Section 118(a) r/w Section 139 of NI Act. It is a mandatory presumption, though the accused is entitled to rebut the said presumption.
16. The principles pertaining to the presumptions and the onus of proof were recently summarized by the Hon'ble Apex Court in Basalingappa vs. Mudibasappa (2019) 5 SCC 418 as under:
"25. We having noticed the ratio laid down by this Court in the above cases on Section 118(a) and 139, we now summarise the principles enumerated by this Court in the following manner:
25.1. Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.
25.2. The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
25.3. To rebut the presumption, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence.
Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.
25.4. That it is not necessary for the accused to come in the witness box in support of his defence. Section 139 imposed an evidentiary burden and not a persuasive burden.
25.5. It is not necessary for the accused to come in the witness box to support his defence." Digitally signed by SONIKA SONIKA Date:
2022.03.28 16:12:10 +0530 CC No. 5745/2020 Rahul Vs. Rajat Kaushik Page no.7/12
17. As discussed above, it is clear that the accused need not discharge burden of proof beyond the shadow of reasonable doubt rather needs to prove his defence upon preponderance of probabilities. Accused can say that the version brought forth by the complainant is inherently unbelievable and therefore, the prosecution cannot stand or the accused can give his version of the story and say that on the basis of his version, the story of the complainant cannot be believed. In the first situation, the accused has nothing to do except to point inherent inconsistencies in the version of the complainant.
18. So far as the factum of liability is concerned, in view of the mandatory presumptions of law as discussed above, if an accepted signed cheque has been produced the complainant, then there cannot be any inherent lacuna in the existence of the liability. Recently, the Hon'ble Supreme Court in Kalamani Tex & Anr. v. P. Balasubramanian (2021 SCC Online SC 75) held as follows:
"14. Adverting to the case in hand, we find on a plain reading of its judgment that the trial Court completely overlooked the provisions and failed to appreciate the statutory presumption drawn under Section 118 and Section 139 of NIA. The Statute mandates that SONIKA once the signature(s) of an accused on the cheque/negotiable Digitally signed by SONIKA instrument are established, then these 'reverse onus' clauses Date:2022.03.28
become operative. In such a situation, the obligation shifts upon the 16:12:19 +0530 accused to discharge the presumption imposed upon him."
But then, definitely, accused can create some loopholes in the story of the complainant. Accused can discharge his burden by demonstrating the preponderance of probabilities.
19. Further, it is trite law that while deciding a complaint U/s 138 NI Act, the Court has to firstly see, whether the Complainant has successfully established the ingredients constituting the offence under the said section or not. The ingredients of Section 138 NI Act which are required to be established by the Complainant have been set out by the Hon'ble Supreme Court in Jugesh CC No. 5745/2020 Rahul Vs. Rajat Kaushik Page no.8/12 Sehgal (Supra). Once these ingredients are established by the Complainant and the Accused admits the issuance of the cheque/his signatures, the presumption U/s 118 (a) and 139 of the NI Act arises.
20. One of the key ingredients is that the " payee or holder in due course of the cheque makes a demand for the payment of said amount of money by giving a notice in writing, to the drawer of the cheque ". It is trite law that when the notice is sent by registered post by correctly addressing the drawer of the cheque, the mandatory requirement of issuance of notice in terms of clause (b) of proviso to Section 138 of the NI Act stands complied with. At this juncture, reliance is placed upon the judgment passed by Hon'ble Supreme Court in the case of C.C.Alavi Haji vs. Palapetty Muhammed, 2007 (6) SCC 555 wherein it has been held as follows:
"15. Insofar as the question of disclosure of necessary particulars with regard to the issue of notice in terms of proviso (b) of Section 138 of the Act, in order to enable the Court to draw presumption or inference either under Section 27 of the G.C. Act or Section 114 of the Evidence Act, is concerned, there is no material difference between the two provisions. In our opinion, therefore, when the notice is sent by registered post by correctly addressing the drawer of the cheque, the mandatory requirement of issue of notice in terms of Clause (b) of proviso to Section 138 of the Act stands complied with. It is needless to emphasise that the complaint must contain basic facts regarding the mode and manner of the issuance of notice to the drawer of the cheque. It is well settled that at the time of taking cognizance of the complaint under Section 138 of the Act, the Court is required to be prima facie satisfied that a case under the said Section is made out and the aforenoted mandatory SONIKA statutory procedural requirements have been complied with. It is then for the drawer to rebut the presumption about the service of Digitally signed by SONIKA Date:
notice and show that he had no knowledge that the notice was 2022.03.28 16:12:27 +0530 brought to his address or that the address mentioned on the cover CC No. 5745/2020 Rahul Vs. Rajat Kaushik Page no.9/12 was incorrect or that the letter was never tendered or that the report of the postman was incorrect. In our opinion, this interpretation of the provision would effectuate the object and purpose for which proviso to Section 138 was enacted, namely, to avoid unnecessary hardship to an honest drawer of a cheque and to provide him an opportunity to make amends."
21. Further, the Hon'ble High Court of Delhi in R.L. Varma & Sons vs. PC Sharma, 2019 SCC OnLine Del 8964, has observed as follows:
"22.Legal presumption of service of notice can only arise in case the notice is correctly addressed. If the notice is incorrectly addressed no legal presumption can arise..."
"24. Section 138 of the Negotiable Instruments Act mandates the issuance of the statutory notice as a pre-condition to filing of a complaint. The cause of action to file a complaint under section 138 of the Negotiable Instruments Act arises only on issuance and service of statutory notice and failure of the accused to comply with the statutory notice. In the absence of service of statutory notice the cause of action would not accrue. Service of statutory notice would also include legal presumption of service if circumstances so warrant."
"34. Since the pre-condition of filing a complaint under section 138 of the Negotiable Instruments Act of sending a statutory notice has not been satisfied in the present case, no cause of action arose in favour of the complainant to file the subject complaint. Since no SONIKA cause of action arose, the petitioner could not have instituted the Digitally signed by SONIKA complaint nor could the trial court as well as the appellate court by Date:
2022.03.28 16:12:35 +0530 the impugned order have convicted the petitioner."
22. Accordingly, if the legal demand notice bears the incorrect address of the Accused, no presumption under Section 27 of the General Clause Act, 1897 can be drawn and the requirement of sending a legal demand notice will stand CC No. 5745/2020 Rahul Vs. Rajat Kaushik Page no.10/12 unfulfilled.
23. In the present case, the Accused at the stage of framing of notice under Section 251 CrPC as well as in his statement under Section 294 CrPC had submitted that he had not received the legal demand notice and his address on the legal demand notice was incorrect. He further stated that his address is " H. No. 162, Gali No. 11 Churiya Maholla, Tughlakabad Village, Jaitpur, Bardarpur, New Delhi", however, on demand notice, house number is mentioned as 182. During the cross-examination, ld. Counsel for complainant argued that the demand notice was duly served, which is evident from the tracking report, Ex. CW1/E. However, perusal of the same, nowhere suggests that the same was served to the addressee. Perusal of the record reveals that alongwith his bail bonds, the accused had annexed the copy of his Aadhaar card. Perusal of the same shows that the correct address of the accused is " H. No.162, Gali No.11, Churiya Mohalla, Tughlakabad Village, Jaitpur, Badarpur, New Delhi". Further, it was argued by the Ld. Counsel for accused that the complainant is having the original Aadhaar card of the accused and the same has been duly admitted by the Ld. Counsel for complainant at the time of final arguments. Moreover, during his examination in chief, accused had categorically stated that at the time of purchase of car, original Aadhaar Card SONIKA was handed over to the complainant and this fact had never been disputed by Digitally signed by the complainant. Further, DW-2 had relied upon a complaint lodged by the SONIKA Date: 2022.03.28 accused at PS Govindpuri, Ex. DW-2/A. Perusal of the same shows that the 16:12:44 +0530 address of the accused is the same as mentioned in the Aadhaar Card as well as in his statement under Section 294 Cr.P.C. Perusal of the record further reveals that the accused had entered into his appearance on service of summons through electronic mode only.
24. Thus, it is evident from the above stated facts that the demand notice was sent on an incorrect address. Further, the complainant has failed to lead any evidence to show the reasons for his belief that the house number of the accused is 182 and not 162, despite having the original Aadhaar card of the accused.
CC No. 5745/2020 Rahul Vs. Rajat Kaushik Page no.11/12
25. Since, Section 138 NI Act is a technical offence, all ingredients as mentioned in Jugesh Sehgal (Supra) must be established for the accrual of cause of action in favour of the Complainant. In view of the above detailed discussion, the Complainant has failed to establish the essential ingredients of Section 138 of NI Act, hence no presumption under Section 139 is attracted in the present case.
26. Since the Complainant has failed to discharge his initial burden under Section 138 NI Act, there is no requirement to delve into further evidence in the present case. Thus, in view of the totality of the circumstance and the settled legal positions as discussed above, the case attempted to be built by the complainant, appears to be suffering from fatal infirmities so much so, it goes directly to the root of the case and shakes the very edifice on which the case of the complainant rests.
27. Accordingly, in light of the above discussion, the accused Rajat Kaushik stands acquitted of the offence under Section 138 of NI Act.
Digitally
ANNOUNCED IN THE (SONIKA)
signed by
SONIKA
COURT ON 28.03.2022 MM-05/NI ACT/SOUTH/SAKET
SONIKA NEW
Date:
DELHI
2022.03.28
16:12:56
+0530
CC No. 5745/2020 Rahul Vs. Rajat Kaushik Page no.12/12