Delhi District Court
2 vs . on 31 October, 2013
1
IN THE COURT OF SH. SANJEEV KUMAR METROPOLITAN
MAGISTRATE1 (EAST) KARKARDOOMA COURTS, DELHI
In the matter of:
Megh Singh
Vs.
Sh. Netra Pal Singh
C.C. No.470/2008
JUDGMENT
1. The serial number of the case : 27691/08
2. The date of institution : 16.04.2008
3. Name of the complainant : Megh Singh S/o Sh. Nank Kishore R/o 12/47, Trilok Puri, Delhi110 091
4. The name, parentage and residence of accused : Sh. Netra Pal Singh S/o Sh. Ram Pal Singh R/o 12/140, Trilok Puri Delhi110 091
5. Offence complained of : Under section 138 N.I. Act
6. Plea of the accused : Pleaded not guilty
7. Final Order : Acquitted
8. Final argument heard/ : 31.10.2013 Case reserved for Judgment Page no. 1 of 17 Sh. Megh Singh vs Sh. Netra Pal Singh; CC No. 470/08 2
9. Date of such Judgment : 31.10.2013 REASONS FOR THE DECISION OF THE CASE :
1. In the present complaint, filed under Section 138 of the Negotiable Instruments Act, 1881 (in short "NI Act"), it has been alleged that accused had issued a cheque No. 227650 dated 07.01.2008 for Rs.2,00,000/ drawn on HDFC Bank Ltd, Mayur Vihar Branch, Delhi91 in favour of complainant. The said cheque was presented but it was dishonoured with remarks "Account Closed" on 05.02.2008. The complainant had obtained the legal advise and sent a legal notice dated 04.03.2008 to the accused. The accused has not made the payment of dishonoured cheque within the stipulated time. Hence, complainant made this complaint under section 138 NI Act.
2. After presummoning evidence, accused was summoned for the offence 138 N.I. Act. Substance of accusation in the form of written notice under section 251 Cr.P.C. for the offence under section 138 of N. I. Act was given to the accused Netra Pal Singh, to which he pleaded not guilty and claimed trial.
3. In post summoning complainant evidence, complainant examined in chief himself by way of affidavit as CW1 and deposed Page no. 2 of 17 Sh. Megh Singh vs Sh. Netra Pal Singh; CC No. 470/08 3 that accused and complainant are neighbourers and known to each other for many years. That accused apprised the complainant to avail auto loan as the complainant intended to purchase a Chevrolet Tavera and accused asked the complainant to handover Rs. Two lacs and few blank cheques and complainant handed over Rs. Two lacs in cash and seven blank cheque leafs bearing no.
395107 to 375113 drawn on Punjab National Bank, Delhi. The accused had issued a cheque No. 227650 (Ex CW1/A) dated 07.01.2008 of Rs. Two lacs drawn on HDFC Bank Limited, Mayur Vihar, PhaseII, Delhi91 as a security to the receipt of Rs. 2 lacs, in favour of the complainant. The said cheque was presented but was returned unpaid with returned memo Ex. CW1/B with remarks "Accounts closed" on 05.02.2008. The complainant apprised the accused about the dishonour of the cheque but the accused neither paid nor tendered the cheque amount to the complainant despite repeated requests and demands but accused flatly refused to repay the cheque amount. The complainant had sent a legal notice dated 04.03.2008 to the accused by registered AD and UPC. The legal notice is Ex CW1/C, postal receipt is Ex. CW1/D and UPC is Ex CW1/E. The accused has not made the payment of dishonoured cheque.
Complainant has also examined Sh. Yogesh Kumar who deposed that he knew the complainant for the last 1415 years. He had given Rs. 2.05 lacs to the complainant in regard of sale and Page no. 3 of 17 Sh. Megh Singh vs Sh. Netra Pal Singh; CC No. 470/08 4 purchase of plot of complainant. He further deposed that said deal was cancelled and complainant issued a cheque for Rs. 2.10 lacs which was dishonoured and he filed a case against the complainant under section 138 NI Act but the same was compromised /settled between him and the complainant.
4. Accused was examined under section 313 Cr. P. C., wherein he has stated that he did not issue cheque in question in favour of complainant. The contents of the cheque and signatures are not in his handwriting and complainant did not give any loan amount to him. Further he mentioned that complainant was with him at the time of accident of his car in which his cheque book alongwith other things were lying and after the accident some of these things scattered and some were misplaced. The complainant might have taken the cheque in question from there. He did not receive any legal notice of the complainant.
5. Accused opted to lead evidence in his defence. He has examined one Neeraj Kumar Dubey as DW1 and himself as DW2.
6. I have heard the contentions of Sh. Sona Ram, Learned counsel for complainant and Sh. S. K. Dayal, Learned counsel for the accused. I have also perused the material available on record. Page no. 4 of 17 Sh. Megh Singh vs Sh. Netra Pal Singh; CC No. 470/08 5
7. It is submitted by learned counsel for complainant that complainant has examined two witnesses including him and has proved debt or other liability, cheque in question, returning memo and legal notice, and police complaint Ex. DW2/1 filed by the accused is forged and fabricated, therefore, accused may be convicted. Further he has relied upon the decision Lalan Parsad Vs. State of Jharkhand and others 2005 (1) LRC 177 (Jhark).
On the other hand, learned counsel for the accused has submitted that complainant has admitted in para no. 3 of his complaint and para no. 4 of his evidence by way of affidavit that cheque was issued as a security to the receipt of Rs. 2 lakhs; that case of complainant is that loan was taken by him from the CW2 Yogesh Kumar but he had denied for the same in his evidence; that on 05.06.2007, accused was going for his work at Geeta Colony and he put his documents and cheque book on the dash board of his car and when he reached at Geeta Colony, he did not find any document and therefore, he lodged a complaint with the police station Geeta colony in this regard vide Ex. DW2/1 and therefore, accused may be acquitted. Further he has relied upon the decision reported as Venugopalan Vs. Moosa 2004 (3) C.C. Cases (HC) 77 & M. S. Narayan Menon @ Mani Vs. State of Kerala (2006) 6 SCC 9.
8. The Negotiable Instruments Act incorporates two Page no. 5 of 17 Sh. Megh Singh vs Sh. Netra Pal Singh; CC No. 470/08 6 presumptions in this regard: one containing in Section 118 of the Act and other in Section 139 thereof. Section 118 (a) reads as under: "118. Presumption as to negotiable instruments.--Until the contrary is proved, the following presumptions shall be made 1. 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 Act reads as under: "139. Presumption in favour of holder.It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability."
While dealing with the aforesaid two presumptions, Hon'ble Supreme Court in the matter of P. Venugopal vs. Madan P. Sarathi (2009) 1 SCC 492 had been pleased to hold that under Sections 139, 118 (a) and 138 of the N.I. Act existence of debt or other liabilities has to be proved in the first instance by the complainant but thereafter the burden of proving to the Page no. 6 of 17 Sh. Megh Singh vs Sh. Netra Pal Singh; CC No. 470/08 7 contrary shifts to the accused. Thus, the plea that the instrument/cheque had been obtained from its lawful owner or from any person in lawful custody thereof by means of an offence or fraud or had been obtained from the maker or acceptor thereof by means of an offence or fraud or for unlawful consideration, the burden of disproving that the holder is a holder in due course lies upon him. It was further observed therein, that indisputably, the initial burden was on the complainant but the presumption raised in favour of the holder of the cheque must be kept confined to the matters covered thereby. Thereafter, the presumption raised does not extend to the extent that the cheque was not issued for the discharge of any debt or liability which is not required to be proved by the complainant as this is essentially a question of fact and it is the defence which has to prove that the cheque was not issued towards discharge of a lawful debt.
9. In M.S. Narayana Menon case (supra) while dealing with that aspect in a case under Section 138 of the Negotiable Instruments Act, 1881, Hon'ble Supreme Court held that the presumptions under Sections 118(a) and 139 of the Act are rebuttable and the standard of proof required for such rebuttal Page no. 7 of 17 Sh. Megh Singh vs Sh. Netra Pal Singh; CC No. 470/08 8 is preponderance of probabilities and not proof beyond reasonable doubt. It was further observed:
"29. In terms of Section 4 of the Evidence Act whenever it is provided by the Act that the court shall presume a fact, it shall regard such fact as proved unless and until it is disproved. The words "proved" and "disproved" have been defined in Section 3 of the Evidence Act (the interpretation clause)...
30. Applying the said definitions of "proved" or "disproved" to the principle behind Section 118(a) of the Act, the court shall presume a negotiable instrument to be for consideration unless and until after considering the matter before it, it either believes that the consideration does not exist or considers the nonexistence of the consideration so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that the consideration does not exist. For rebutting such presumption, what is needed is to raise a probable defence. Even for the said purpose, the evidence adduced on behalf of the complainant could be relied upon.
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32. The standard of proof evidently is preponderance of Page no. 8 of 17 Sh. Megh Singh vs Sh. Netra Pal Singh; CC No. 470/08 9 probabilities. Inference of preponderance of probabilities can be drawn not only from the materials on record but also by reference to the circumstances upon which he relies.
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41...Therefore, the rebuttal does not have to be conculsively 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'."
10. The decision in M.S. Narayana Menon case (supra) was relied upon in K. Prakashan v. P.K. Surenderan (2008) 1 SCC 258 where Hon'ble Supreme Court reiterated the legal position as under:
"13. The Act raises two presumptions; firstly, in regard to the passing of consideration as contained in Section 118 (a) therein and, secondly, a presumption that the holder of cheque receiving the same of the nature referred to in Section 139 discharged in whole or in part any debt or other liability. Presumptions both under Sections 118 (a) Page no. 9 of 17 Sh. Megh Singh vs Sh. Netra Pal Singh; CC No. 470/08 10 and 139 are rebuttable in nature.
14. It is furthermore not in doubt or dispute that whereas the standard of proof so far as the prosecution is concerned is proof of guilt beyond all reasonable doubt; the one on the accused is only mere preponderance of probability."
11. To the same effect is the decision in Krishna Janardhan Bhat v. Dattatraya G. Hegde (2008) 4 SCC 54 where Hon'ble Supreme Court observed:
"32... Standard of proof on the part of an accused and that of the prosecution a criminal case is different.
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34. Furthermore, whereas prosecution must prove the guilt of an accused beyond all reasonable doubt, the standard of proof so as to prove a defence on the part of an accused is preponderance of probabilities.
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45... Statute mandates raising of presumption but it stops at that. It does not say how presumption drawn should be held to have rebutted. Other important principles of legal jurisprudence, namely presumption of Page no. 10 of 17 Sh. Megh Singh vs Sh. Netra Pal Singh; CC No. 470/08 11 innocence as human rights and the doctrine of reverse burden introduced by Section139 should be delicately balanced."
12. Presumptions under Sections 118(a) and Section 139 were held to be rebuttable on a preponderance of probabilities in Bharat Barrel & Drum Manufacturing Company v. Amin Chand Pyarelal (1999) 3 SCC 35 also where the Hon'ble Supreme Court observed:
"11... Though the evidential burden is initially placed on the defendant by virtue of S.118 it can be rebutted by the defendant by showing a preponderance of probabilities that such consideration as stated in the pronote, or in the suit notice or in the plaint does not exist and once the presumption is so rebutted, the said presumption 'disappears'. For the purpose of rebutting the initial evidential burden, the defendant can rely on direct evidence or circumstantial evidence or on presumptions of law or fact. Once such convincing rebuttal evidence is adduced and accepted by the Court, having regard to all the circumstances of the case and the preponderance of probabilities, the Page no. 11 of 17 Sh. Megh Singh vs Sh. Netra Pal Singh; CC No. 470/08 12 evidential burden shifts back to the plaintiff who has also the legal burden."
13. In Hiten P. Dalal v. Bratindranath Banerjee (2001) 6 SCC 16 Hon'ble Supreme Court compared evidentiary presumptions in favour of the prosecution with the presumption of innocence in the following terms:
"22... Presumptions are rules of evidence and do not conflict with the presumption of innocence, because by the latter all that is meant is that the prosecution is obliged to prove the case against the accused beyond reasonable doubt. The obligation on the prosecution may be discharged with the help of presumptions of law or fact unless the accused adduces evidence showing the reasonable possibility of the nonexistence of the presumed fact.
23. In other words, provided the facts required to form the basis of a presumption of law exists, 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. ..."
14. Decisions in Mahtab Singh & Anr. v. State of Uttar Page no. 12 of 17 Sh. Megh Singh vs Sh. Netra Pal Singh; CC No. 470/08 13 Pradesh (2009) 13 SCC 670, Subramaniam v. State of Tamil Nadu (2009) 14 SCC 415 and Vishnu Dutt Sharma v. Daya Sapra (2009) 13 SCC 729, take the same line of reasoning. Hence, it is well settled that whereas, the standard of proof so far as the prosecution is concerned is proof of guilt beyond all reasonable doubts but on the accused only mere preponderance of probability.
15. In M. S. Narayan Menon case (supra) Hon'ble Supreme Court observed as under :
" 52. .............. if the defence is acceptable as probable the cheque therefore, cannot be held to have been issued in discharge of debt as, for example, if a cheque is issued for security or for any other purpose the same would not come within the purview of Section 138 of the Act."
16. In M/s. Collage Culture & Ors. Vs. Apparel Export Promotion Council & Anr. Crl. M. C. No. 3011/2004, decided on 11.10.2007, Hon'ble Delhi High Court has held that :
"20. A post dated cheque may be issued under 2 circumstances. Under circumstance one, it may be issued for a debt in presenti but payable in future. Under second circumstance it may be issued for a debt which may become payable in future upon the occurrence of a contingent event. Page no. 13 of 17 Sh. Megh Singh vs Sh. Netra Pal Singh; CC No. 470/08 14
21. The difference in the two kinds of postdated cheques would be that the cheque issued under first circumstance would be for a debt due, only payment being postponed. The latter cheque would be by way of a security.
22. The word 'due' means 'outstanding at the relevant date'. The debt has to be in existence as a crystallized demand akin to a liquidated damages and not a demand which may or may not come into existence; coming into existence being contingent upon the happening of an event.
23. .........................................................................
24. It would be relevant to note that the statute does not refer to the debt being payable, meaning thereby, a post dated cheque for a debt due but payment postponed at a future date would attract Section 138 of the Negotiable Instruments Act 1881. But the cheque issued not for an existing due, but issued by way of a security, would not attract Section 138 of the Negotiable Instruments Act 1881, for it has not been issued for a debt which has come into in existence."
It is clear from the M/s. Collage Culture case (supra) and M. S. Narayan Menon case (supra) that if cheque was not issued for an existing due but issued by way of a security, same would not attract section 138 of the NI. Act. In the present case, Page no. 14 of 17 Sh. Megh Singh vs Sh. Netra Pal Singh; CC No. 470/08 15 complainant has himself admitted in para no. 3 of his complaint and para no. 4 of his evidence by way of affidavit that cheque was issued as a security to the receipt of Rs. 2 lakhs which reads as follows:
"3 That as a security of Rs. 2,00,000/ (Rupees Two Lakhs Only), the accused also issued cheque bearing no. 227650 dated 07.01.2008 of Rs. 2,00,000/ drawn on HDFC Bank Limited, Mayur Vihar Phase II, Delhi 110091 in favour of complainant and assured the complainant that the accused would return the said amount, if could not avail loan and further assured the complainant to go with this cheque, if the accused failed with his commitment".
Hence, it is clear from the case of the complainant that cheque was issued to him as a security to the receipt of Rs. 2 lakhs and therefore, offence under section 138 NI Act does not attract against the accused.
17. Further defence of the accused is that he had not issued the cheque in question to the complainant and said cheque does not bear his signature and said cheque was misplaced and in this regard, he had lodged a complaint with the police station Geeta Colony on 05.10.2007. Accused has examined DW1 Sh. Neeraj Kumar Dubey, personal banker, Page no. 15 of 17 Sh. Megh Singh vs Sh. Netra Pal Singh; CC No. 470/08 16 HDFC Bank who brought the copy of account opening form of accused Mark A having the signatures of account holder/accused at point C. This witness has got marked the copy of personal details form of accused as Mark B having signature of accused at point D. It is stated by this witness in his cross examination that Mark A & B are scanned copy and was provided by the branch Manager. Hence, accused has proved his account opening form of account no. 2931370000308 and personal detail form as Mark A & B respectively. Said account was opened on 28.01.2006, prior to the issuance of the cheque dated 7.01.2008 Ex. CW1/A. Account opening form and personal detail form of the accused bears signature of the accused at point C and D respectively. I have compared the signatures mentioned on the cheque Ex. CW1/A and on Account opening form and personal detail form of the accused and have found that the signatures mentioned on the cheque Ex. CW1/A are not similar to the signatures mentioned on the account opening form and personal detail form of the accused. It is correct that cheque was dishonoured with the remarks 'Account Closed' and not with the 'signature differs' but in this regard, Neeraj Kumar Dubey, DW1, has clarified that usually, in case of accounts closed, bank does not telly the speciman signatures of the drawer. Hence, accused has been succeeded to prove/show that cheque Ex. CW1/A Page no. 16 of 17 Sh. Megh Singh vs Sh. Netra Pal Singh; CC No. 470/08 17 does not bear his signature.
18. In view of above discussion, I am of the view that complainant has failed to prove his case against the accused Netra Pal Singh and therefore he is acquitted for the offence under section 138 N.I. Act.
Announced in the open court (Sanjeev Kumar) On 31st Day of October, 2013 Metropolitan Magistrate1 (East) (total seventeen pages) Karkardooma Courts, Delhi Page no. 17 of 17 Sh. Megh Singh vs Sh. Netra Pal Singh; CC No. 470/08