Delhi District Court
Ajay Kumar Malhotra vs Sanjeev on 9 December, 2024
IN THE COURT OF SH. AAKASH MOHAN SINGH, JMFC-05,
N.I. ACT, SOUTH DISTRICT, SAKET, NEW DELHI
CC No. : 8407/2018
U/s : 138 N. I. Act
PS : Safdarjung Enclave
Ajay Kumar Malhotra vs. Sanjeev
JUDGMENT
1. CC No. : 8407
2. Date of institution of the case : 22.06.2018
3. Name of complainant : Ajay Kumar Malhotra
S/o Lt. Sh. R.K. Malhotra
R/o 899, Sec-2,
R.K. Puram, New Delhi.
4. Name of accused, parentage
and address : Sanjeev
S/o Sh. Hari Chand
R/o P-130, Village-Pillanji,
Sarojini Nagar, New Delhi.
5. Offence complained of : 138 N. I. Act
6. Plea of accused : Accused pleaded not guilty
7. Final order : Acquittal
8. Date on which order was : 07.12.2024
reserved
9. Date of pronouncement : 09.12.2024
CC No. 8407/18
Ajay Kumar Malhotra vs. Sanjeev Page no 1 of 27 (Aakash Mohan Singh)
JMFC-05 (NI Act)/South
FACTUAL BACKGROUND 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(as in after referred to as NI Act).
2. The facts giving rise to the instant complaint case, as per the complainant, may be summarized as hereafter: That accused approached the complainant through Sh. Sanjay Gupta and Sh. Harish and submitted that he was in urgent need of money for the marriage of his son. On the assurance of Sh. Sanjay Gupta and Sh. Harish, complainant gave a friendly loan of Rs. 3,99,000/- to the accused in the month of January 2016. After that accused asked some more money from the complainant and submitted that he would repay the same after the marriage of his son. Accused assured the complainant that he would return the said whole amount within 6 months. That in the month of May 2017, complainant told the accused that he had retired and need to shift from Govt. accommodation and also requested the accused to refund the loan amount immediately to which accused sought some more time. That again complainant reminded the accused to repay the loan amount to which accused offered the complainant to take his property on rent situated at Pillanji to adjust the loan amount against the rent. That complainant agreed to the said proposal of accused and a rent agreement was executed between the parties. As per the said rent agreement, complainant gave a security amount of Rs. 1 lakh to the accused, however complainant requested to add said security CC No. 8407/18 Ajay Kumar Malhotra vs. Sanjeev Page no 2 of 27 (Aakash Mohan Singh) JMFC-05 (NI Act)/South amount in the amount already lend to accused. That from November 2017, accused started demanding extra money from the complainant without clearing previous dues started harassing the complainant upon which complainant had left the premises of accused in March 2018 and requested him to return the loan amount of Rs. 3,99,000/- and security amount of Rs. 1,00,000/-. That upon the persuasion of complainant, accused had issued one cheque bearing no. 975078 dt. 01.05.2018 for Rs. 5,00,000/- drawn on Punjab National Bank, Vinay Nagar Branch (hereinafter referred as cheque in question) in favour of the complainant in discharge of his legal liability. That when complainant presented the abovesaid cheque in question for encashment, same was returned unpaid with remarks "funds insufficient". Thereafter, the complainant issued a legal demand notice dated 17.05.2018, calling upon the accused to pay the amount of the aforesaid cheque within the stipulated period but the accused did not make the payment within the statutory period.
PROCEEDINGS BEFORE COURT
3. The complainant tendered his evidence by way of affidavit which is Ex.CW-1/A and relied upon following evidences:-
a) Cheque in question Ex. CW1/1 b) Return memo dt. 04.05.2018 Ex. CW1/2 c) Legal demand notice dt. 31.01.2017 Ex. CW1/3 d) Postal receipts Ex. CW1/4 colly. CC No. 8407/18 Ajay Kumar Malhotra vs. Sanjeev Page no 3 of 27 (Aakash Mohan Singh) JMFC-05 (NI Act)/South e) Tracking report Ex. CW1/5 f) Reply to legal demand notice Ex. CW1/6
4. Upon appreciation of pre-summoning evidence, 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 01.11.2018 to which he pleaded not guilty and claimed trial. The accused took the defence that he did not issue the cheque in question to the accused. Cheque in question including other cheques from serial no. 75-80 were stolen from my house. He further deposed that he lodged a police complaint in this regard after receiving intimation from the bank that one cheque of Rs. 5 lakhs was presented for encashment. He further deposed that cheque in question bears his signature, however other details on the same were not filled by him. He deposed that received the legal demand notice and replied to the same.
5. Thereafter, an application of the accused under Section 145 (2) of NI Act was allowed vide order dated 01.11.2018 and the accused was granted opportunity to cross examine the complainant as well as his witnesses, if any.
6. The complainant examined himself as CW1. In the post summoning evidence, the complainant (CW1) has adopted his pre- summoning evidence. The complainant was cross examined at length by the Ld. Counsel for accused. In CC No. 8407/18 Ajay Kumar Malhotra vs. Sanjeev Page no 4 of 27 (Aakash Mohan Singh) JMFC-05 (NI Act)/South support of his case, complainant also examined one witness i.e. Sh. Sanjay Gupta as CW-2. CW-3 was dropped as a witness VOD 26.02.2020. CE was closed vide order dated 26.02.2020
7. Accused was, thereafter, examined U/s 281 r/w Sec 313 Criminal Procedure code, 1872 on 06.02.2020, wherein entire incriminating evidence was put to him. The accused took defence that he has no liability towards the cheque in question.
8. In his defence evidence accused got himself examined as DW-2 alongwith HC Mukesh Kumar as DW-1.
The defence evidence was closed on 05.07.2023 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.
FINAL ARGUMENTS
10. During the course of final arguments, Ld. Counsel for complainant argued that there exists during enforceable liability towards the complainant on behalf of the accused. He further argued that cheque was issued to complainant and the signatures on the cheque has already been admitted by the accused. He further CC No. 8407/18 Ajay Kumar Malhotra vs. Sanjeev Page no 5 of 27 (Aakash Mohan Singh) JMFC-05 (NI Act)/South argued that upon presentation the cheque was dishonoured and the same has been proved by cheque return memos and the present complaint is filed on the basis of the cheque return memo. Further, counsel for the complainant argued that demand notice was served upon the accused on the address mentioned in the bail bonds furnished on behalf of accused person and the accused had replied to the same. He further argued that the complainant did not receive any payment after the service of legal demand notice and was constrained to file the present criminal complaint case. Counsel for complainant submitted that all the ingredients of section 138 NI Act are fulfilled and accused should be convicted for the offence.
11. Per contra, ld. Counsel for accused has argued that since the liability of the accused is claimed to be Rs. 4.99 lacs whereas the cheque amount is of Rs. 5 lacs, the essential ingredient of Section 138 NI Act are not fulfilled. He further pointed out various infirmities in the case of the complainant and lastly prayed that the accused be acquitted in the present case.
INGREDIENTS OF OFFENCE AND DISCUSSION
12. Before dwelling into the facts of the present case, it would be apposite to discuss the legal standards required to be met by both sides. In order to establish the offence under Section 138 of NI Act, the prosecution must fulfill all the essential ingredients of the offence. Perusal of the bare provision reveals the following necessary ingredients of the offence:-
CC No. 8407/18Ajay Kumar Malhotra vs. Sanjeev Page no 6 of 27 (Aakash Mohan Singh) JMFC-05 (NI Act)/South First Ingredient: The cheque was drawn by a person on an account maintained by him for payment of money and the same is presented for payment within a period of 3 months from the date on which it is drawn or within the period of its validity;
Second Ingredient: The cheque was drawn by the drawer for discharge of any legally enforceable debt or other liability; Third Ingredient: The cheque was returned unpaid by the bank due to either insufficiency of funds in the account to honour the cheque or that it exceeds the amount arranged to be paid from that account on an agreement made with that bank;
Fourth Ingredient: A demand of the said amount has been made by the payee or holder in due course of the cheque by a notice in writing given to the drawer within thirty days of the receipt of information of the dishonour of cheque from the bank;
Fifth Ingredient: The drawer fails to make payment of the said amount of money within fifteen days from the date of receipt of notice.
It is only when all the aforementioned ingredients are satisfied that the person who had drawn the cheque can be deemed to have committed an offence under Section 138 of the NI Act
13. The accused can only be held guilty of the offence under Section 138 NI Act if the above-mentioned ingredients are proved by the complainant co-
CC No. 8407/18Ajay Kumar Malhotra vs. Sanjeev Page no 7 of 27 (Aakash Mohan Singh) JMFC-05 (NI Act)/South extensively. Additionally, the conditions stipulated under Section 142 NI Act have to be fulfilled.
APPRECIATION OF EVIDENCE- .
14. Notably, there is no dispute qua the proof of first, third and fifth ingredient. The complainant had proved the original cheque vide Ex. CW1/1 which the accused had not disputed as being drawn on the account of the accused. It was not disputed that the cheque in question was presented within its validity period. The cheque in question was returned unpaid vide return memos Ex. CW1/2, the same has been admitted by the accused in his statement of admission denial of documents u/s 294 CrPC as such the same is proved in view of the same. Notably, no dispute has been raised qua the fifth ingredient as such the same is deemed to be proved that no payment has been made after issuance of legal demand notice.
15. The questions which arise for consideration in the present matter are:-
a) Whether the legal demand notice issued by the complainant, has been served upon the accused?
b) Whether presumption under section 118(a) read with section 139 of the Act can be raised in favour of complainant in the present case?
c) Whether the impugned cheque was issued by the accused in discharge of a legally enforceable debt as per the version of the complainant?CC No. 8407/18
Ajay Kumar Malhotra vs. Sanjeev Page no 8 of 27 (Aakash Mohan Singh) JMFC-05 (NI Act)/South I shall be deciding the above mentioned points of determination separately.
a) whether the legal demand notice issued by the complainant, has been served upon the accused?
16. The issuance and service of legal demand notice is one of the statutory requirements in order to bring home the guilt of the accused under section 138. Any defect in the statutory requirement would go to the very root of the proceedings as such it is essential to first discuss whether the legal notice issued by the complainant in compliance with the provisions of section 138 or not.
17. Proviso (b) appended to Section 138 with respect to legal demand notice is reproduced below for ready reference:
"The payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid;"
18. As such, it is necessary that the payee or holder in due course makes demand of money due by giving a notice to the drawer, in writing, within 30 days of receipt of information from the bank regarding the return of the cheque is CC No. 8407/18 Ajay Kumar Malhotra vs. Sanjeev Page no 9 of 27 (Aakash Mohan Singh) JMFC-05 (NI Act)/South dishonoured. The object of notice is to give a chance to the door of the cheque to rectify his omission and also to protect an honest drawer. Reliance is placed upon, Central Bank of India vs Saxons Farms, 1999(39) ACC891(SC).
19. In the landmark decision of Hon'ble Supreme Court of India in matter of "C. C. Alavi Haji Vs. Palapetty Mohd. & Anr." reported in (2007) 6 Supreme Court Cases 555 held that as under:-
"16. It is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of Criminal Law, where there is no stipulation of giving of a notice before filing a complaint 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. In our view, any other interpretation, of the proviso would defeat the very object of the legislation. As observed in Bhaskarans case (supra), if the giving of notice in the context of Clause (b) of the proviso was the CC No. 8407/18 Ajay Kumar Malhotra vs. Sanjeev Page no 10 of 27 (Aakash Mohan Singh) JMFC-05 (NI Act)/South same as the receipt of notice a trickster cheque drawer would get the premium to avoid receiving the notice by adopting different strategies and escape from legal consequences of Section 138 of the Act."
20. In the instant case, the accused in his statement u/s 251 CrPC has admitted that he had received the legal demand notice. However, the same has been denied by him in his examination u/s 313 CrPC. Perusal of record shows that the address mentioned in bail bonds and the vakalatnama is the same mentioned on the legal demand notice. It has been held in the judgment of Hon'ble Madras High Court in P R Shankar Rao v. Joseph, 2001 CriLJ 2392 that evasion of notice by the accused would amount to constructive notice. More so, the accused in his examination in chief as DW2 has admitted that 'I received legal notice on behalf of the complainant". Furthermore, in view of Ex.CW1/4 viz. postal receipt and the presumption u/s 27 of the General Clauses Act, 1897 alongwith the ratio laid down in the case of "C. C. Alavi Haji Vs. Palapetty Mohd. & Anr(Supra), I am of the considered opinion that the plea of the accused that he has not received the legal demand notice is not tenable and there is a deemed delivery of legal demand notice.
21. Ergo, this contention of accused does not hold any water and is dismissed as devoid of any substance and merit and the fourth ingredient to the offence stands proved.
CC No. 8407/18Ajay Kumar Malhotra vs. Sanjeev Page no 11 of 27 (Aakash Mohan Singh) JMFC-05 (NI Act)/South b.) Whether presumption under Section 118(a) read with Section 139 of the Act can be raised in favour of complainant in the present case?
22. As per the scheme of the NI Act, once the accused admits signature on the cheque in question, certain presumptions are drawn, which result in shifting of onus. Section 118(a) of the NI Act lays down the presumption that every negotiable instrument was made or drawn for consideration. Another presumption is enumerated in Section 139 of NI Act. The provision lays down the presumption that the holder of the cheque received it for the discharge, in whole or part, of any debt or other liability.
23. The combined effect of these two provisions is a presumption that the cheque was drawn for consideration and given by the accused for the discharge of debt or other liability. Both the sections use the expression "shall", which makes it imperative for the court to raise the presumptions, once the foundational facts required for the same are proved. Reliance is placed upon the judgment of the Hon'ble Supreme Court, Hiten P. Dalal vs. Bratindranath Banerjee (2001) 6 SCC
16.
24. The Hon'ble Supreme Court in Kumar Exports vs. Sharma Carpets (2009) 2 SCC 513, while discussing the contours of section 118(a) r/w 139 of the N I Act, has held inter alia the following:
CC No. 8407/18Ajay Kumar Malhotra vs. Sanjeev Page no 12 of 27 (Aakash Mohan Singh) JMFC-05 (NI Act)/South "14. Section 139 of the Act provides that 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.
15. Applying the definition of the word "proved" in section 3 of the Evidence Act to the provisions of sections 118 and 139 of the Act, it becomes evident that in a trial under section 138 of the Act a presumption will have to be made that every negotiable intstrument was made or drawn for consideration and that it was executed for discharge of debt or liability once the execution of negotiable instrument is either proved or admitted. As soon as the complainant discharges the burden to prove that the instrument, say a note, was executed by the accused, the rules of presumptions under section 118 and 139 of the Act help him shift the burden on the accused.
The presumption will live, exist and survive and shall end only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability. A presumption is not in itself evidence, but only makes a prima facie case for a party for whose benefit it exists."
25. In the instant case, in his statement u/s 251 CrPC r/w 294 CrPC, the accused has admitted that the cheque in question viz. Ex.CW1/1 bears his signatures. The same has also been admitted in his examination u/s 313 CrPC.
CC No. 8407/18Ajay Kumar Malhotra vs. Sanjeev Page no 13 of 27 (Aakash Mohan Singh) JMFC-05 (NI Act)/South
26. It is the case of the accused that although the cheque in question bears his signatures, the same were never issued to the complainant as the cheque in question along with certain other cheques were stolen from his house.
27. In his cross-examination as DW2, the accused has stated that he is ignorant whether the whole cheque book or only few of the cheques were lost. Further, the purported police complaint upon which the accused in relying has been stated to different from the record of the police during as per DW1. More so, the said police complaint if taken to be true does not pertain to the relevant time and has subsequently registered after the presentation and dishonour of the cheque in question. The possibility that such a complaint has been lodged in order to create an afterthought defence cannot be dispelled.
28. Therefore, there is no merit in the contention of the accused that the impugned cheque was not issued to the complainant.
29. At this stage a reference has to be sought from section 20 of NI Act which talks about inchoate instruments. As per the provision if a person gives a duly signed cheque which is either blank or partly filled then he is deemed to have given implied authority to the holder to fill up the particular in it and complete the cheque, thus making the drawer liable for the payment mentioned in it. It is immaterial that the cheque may have been filled by any person other than the CC No. 8407/18 Ajay Kumar Malhotra vs. Sanjeev Page no 14 of 27 (Aakash Mohan Singh) JMFC-05 (NI Act)/South drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provision of section138 would be attracted.
30. The Hon'ble Supreme Court in the case of Bir Singh vs. Mukesh Kumar (2019) 4 SCC 197, while upholding the validity of blank signed cheque in a proceeding u/s 138 of the Act has interalia held the following:
"If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence."
31. Therefore, under the given circumstances, a sweeping denial of the issuance of the impugned cheque in order to evade the presumption would not be tenable. Reliance is also placed upon the judgment of the Hon'ble Supreme Court in K N Beena v Muniyapan, AIR 2001 SC 2895. In case of a blank signed cheque the complainant would be entitled to the benefits of presumption, once the signatures on the cheque are proved/admitted.
32. Therefore, in light of the above discussion, this court is of the considered view that, the ground that the cheque in question was not issued to the complainant does not hold water with this Court and even in case of blank signed cheques, the statutory presumptions under section 118(a) and 139 would be raised CC No. 8407/18 Ajay Kumar Malhotra vs. Sanjeev Page no 15 of 27 (Aakash Mohan Singh) JMFC-05 (NI Act)/South in favour of the complainant. Therefore, in instant case, since the accused has admitted his signatures on the cheque in question, the aforementioned statutory presumptions would be raised in favour of the complainant regarding the fact that the impugned cheque has been drawn for consideration and issued by the accused in discharge of legally enforceable debt.
c.) Whether the impugned cheque was issued by the accused in discharge of a legally enforceable debt as per the version of the complainant?
33. The presumptions contemplated in the NI Act are rebuttable presumptions and once the same are raised, it is for the accused to rebut the same by establishing a probable defence. 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 summarize 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.CC No. 8407/18
Ajay Kumar Malhotra vs. Sanjeev Page no 16 of 27 (Aakash Mohan Singh) JMFC-05 (NI Act)/South 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."
34. In the instant case, the complainant has sought to enforce the liability of the accused on the strength of having granted a friendly loan of Rs.3.99 lacs in presence of witnesses and payment of Rs. 1 lac as security deposit. It has been pleaded that the cheque was issued in discharge of the said liability. Since a presumption as envisaged u/s 118 and 139 of the Negotiable Instruments Act is attracted in favour of the Complainant as such, it is now incumbent upon the accused to rebut the said presumption on the basis of preponderance of probabilities.
35. In order to rebut the said presumption, the Ld. Counsel for the accused has argued that vide the present complaint, the complainant has sought to enforce a liability of Rs. 4.99 lacs whereas a demand of Rs. 4.90 lacs was made in the legal demand notice and the cheque amount is of Rs. 5 lacs, which is not permissible as CC No. 8407/18 Ajay Kumar Malhotra vs. Sanjeev Page no 17 of 27 (Aakash Mohan Singh) JMFC-05 (NI Act)/South the offence u/s 138 NI Act would not be attracted when the cheque amount exceeds the liability.
36. The same is contested on the ground that a rounded off figure was filled in by the accused himself and the same appeared to be reasonable in view of a difference of one thousand rupees only.
37. Reference is craved to the judgment of Hon'ble High Court of Delhi in M/S Alliance Infrastructure Project Pvt Ltd vs Vinay Mittal, Crl.M.C. No. 2224/2009 wherein it has been held as under:-
8. The question which comes up for consideration is as to what the expression „amount of money‟ means in a case where the admitted liability of the drawer of the cheque gets reduced, on account of part payment made by him, after issuing but before presentation of cheque in question. No doubt, the expression „amount of money‟ would mean the amount of the cheque alone in case the amount payable by the drawer, on the date of presentation of the cheque, is more than the amount of the cheque. But, can it be said the expression „amount of money‟ would always mean the amount of the cheque, even if the actual liability of the drawer of the cheque has got reduced on account of some payment made by him towards discharge of the debt or liability in consideration of which cheque in question was issued. If it is held that the expression „amount of money‟ would necessarily mean the amount of cheque in every case, the drawer of the cheque would be required to make CC No. 8407/18 Ajay Kumar Malhotra vs. Sanjeev Page no 18 of 27 (Aakash Mohan Singh) JMFC-05 (NI Act)/South arrangement for more than the admitted amount payable by him to the payee of the cheque. In case he is not able to make arrangement for the whole of the amount of the cheque, he would be guilty of the offence punishable under Section 138 of Negotiable Instruments Act. Obviously this could not have been the intention of the legislature to make a person liable to punishment even if he has made arrangements necessary for payment of the amount which is actually payable by him. If the drawer of the cheque is made to pay more than the amount actually payable by him, the inevitable result would be that he will have to chase the payee of the cheque to recover the excess amount paid by him. Therefore, I find it difficult to take the view that even if the admitted liability of the drawer of the cheque has got reduced, on account of certain payments made after issue of cheque, the payee would nevertheless be entitled to present the cheque for the whole of the amount, to the banker of the drawer, for encashment and in case such a cheque is dishonoured for wants of funds, he will be guilty of offence punishable under under Section 138 of Negotiable Instrument Act.
9. I am conscious of the implication that the drawer of a cheque may make payment of a part of the amount of the cheque only with a view to circumvent and get out of his liability under Section 138 of Negotiable Instrument Act. But, this can easily be avoided, by payee of the cheque, either by taking the cheque of the reduced amount from the drawer or by making an endorsement on the cheque acknowledging the part payment received by him and then presenting the cheque for encashment of only the balance amount due and payable to him. In fact, Section 56 of Negotiable Instrument Act specifically provides for an endorsement on a Negotiable Instrument, in case of part-payment and the instrument can CC No. 8407/18 Ajay Kumar Malhotra vs. Sanjeev Page no 19 of 27 (Aakash Mohan Singh) JMFC-05 (NI Act)/South thereafter be negotiated for the balance amount. It would, therefore, be open to the payee of the cheque to present the cheque for payment of only that much amount which is due to him after giving credit for the part-payment made after issuance of cheque. The view being taken by me was also taken by a Division Bench of Kerala High Court in Joseph Sartho vs. Gopinathan Nair, 2009 (2) Crimes 463 (Kerala).
As noted by the Hon‟ble Supreme Court in Rahul Builders vs. Arihant Fertilizers & Chemicals & Anr, (2008) 2 SCC 321, Negotiable Instrument Act envisages application of the penal provisions which needs to be construed strictly. Therefore, even if two views in the matter are possible, the Court should lean in favour of the view which is beneficial to the accused. This is more so, when such a view will also advance the legislative intent, behind enactment of this criminal liability.
12.......The expression „amount of money‟ used in Section 138(b) of Negotiable Instrument Act, to my mind, in a case of this nature would mean the amount actually payable by the drawer of the cheque to the payee of the cheque. Of course, if the payee of the cheque makes some demands on account of interest, compensation, incidental expenses etc, that would not invalidate the notice so long as the principal amount demanded by the payee of the cheque is correct and is clearly identified in the notice. When the principal amount claimed in the notice of demand is more than the principal amount actually payable to the payee of the cheque and the notice also does not indicate the basis for demanding the excess amount, such a notice cannot be said to be a legal and valid notice envisaged in Section 138(b)of Negotiable Instrument Act. In such a case, it is not open to the complainant to take the plea that the drawer of the cheque could have escaped liability by paying the actual amount due CC No. 8407/18 Ajay Kumar Malhotra vs. Sanjeev Page no 20 of 27 (Aakash Mohan Singh) JMFC-05 (NI Act)/South from him to the payee of the cheque. In order to make the notice legal and valid, it must necessarily specify the principal amount payable to the payee of the cheque and the principal amount demanded from the drawer of the cheque should not be more than the actual amount payable by him though addition of some other demands in the notice by itself would not render such a notice illegal or invalid.
13. In Central Bank of India & Another vs. Saxons Farms & Others (8) SCC 221, the Hon‟ble Supreme Court observed that the object of the notice under Section 138(b) of Negotiable Instrument Act is to give a chance to the drawer of the cheque to rectify his omission and also to protect the honest drawer. If the drawer of the cheque is asked to pay more than the principal amount due from him and that amount is demanded as the principal sum payable by him, it is not possible for an honest drawer of the cheque to meet such a requirement.
38. Similar has been held by the Hon'ble Kerela High Court in Joseph Sartho v Gopinathan, MANU/KE/0342/2008 and Hon'ble High Court of Gujarat in Shree Corporation v. Anilbhai Puranbhai Bansal, MANU/GJ/0379/2018 . The view has been endorsed by the Hon'ble Supreme Court in Dashrathbhai Trikambhai Patel vs. Hitesh Mahendrabhai Patel and Ors., MANU/SC/1294/2022.
39. In the facts of the present case, the complainant has averred the liability of the accused to be of Rs. 4.99 lacs in his complaint as well as legal demand notice Ex.CW1/3. It has also been admitted by the complainant in his cross CC No. 8407/18 Ajay Kumar Malhotra vs. Sanjeev Page no 21 of 27 (Aakash Mohan Singh) JMFC-05 (NI Act)/South examination that the liability of the accused extends upto Rs. 4.99 lacs only. However, the cheque amount is of Rs. 5 lacs. The repayment sought vide legal demand notice is less than the cheque amount.
40. Applying the law discussed above to the facts of the present case, the liability sought to be enforced is greater than the cheque amount. It is not the case of the complainant that the differential of Rs. One thousand was on account of any interest, penalty etc. It is also not the case of part payment made by the accused which would have subsequently reduced the liability. No cogent explanation has been given as to how the offence would be attracted in view of the difference in demand made and the cheque amount.
41. Even otherwise, on merits, the accused has been able to puncture holes in the version of the complainant during his cross-examination as CW1. In order to challenge the financial capacity of the complainant, certain questions were addressed wherein it was stated that some amount was withdrawn from Bank in order to lend the same. However, the witness has failed to point out the relevant entries upon bringing his statement of account on record. Further, the impugned loan is stated to have been granted for the purpose of the marriage of the son of the accused. However, it has been admitted that the son of the accused has not been married till date. Furthermore, the monthly salary of the complainant is stated to be Rs.50,000/- per month with monthly expenses of Rs. 8-10,000/- apart from rent expenses. The bank balance of the complainant is stated to be Rs.1.5 lacs.
CC No. 8407/18Ajay Kumar Malhotra vs. Sanjeev Page no 22 of 27 (Aakash Mohan Singh) JMFC-05 (NI Act)/South Therefore, the grant of the loan amount of Rs. 3.99 lacs alongwith security amount of Rs. 1 lac appears to be improbable. More so, the complaint mentions the time of grant of loan to be January 2016 whereas as CW1, it is stated to be January 2017-
18. The complainant has also failed to file any documentary evidence regarding the grant of the impugned loan in the form of receipts, promissory note etc.
42. Further, the complainant witness examined as CW2 in his cross- examination has admitted that the loan amount was not always lent in his presence. Ignorance has also been pleaded qua the demand of repayment. He further stated that only a sum of Rs.10,000-15,000/- was lent in his presence. Ignorance has been pleaded qua the other transactions amongst the parties. Lastly, it has been admitted that the witness was not present when the cheque in question was handed over in discharge of the legally enforceable liability in favour of the complainant.
43. The rebuttal of presumption can be done in two ways, i.e. either the accused punches hole in the case of the complainant and shakes the leg of the complainant's case or the accused brings some evidence to prove his own case.
44. Under the circumstances, the accused has been able to raised doubt in the testimony of the primary witness of the complainant i.e. the complainant himself/CW1 and the supporting witness has also failed to depose to the effect of witnessing of the grant of alleged loan amount to the accused.
CC No. 8407/18Ajay Kumar Malhotra vs. Sanjeev Page no 23 of 27 (Aakash Mohan Singh) JMFC-05 (NI Act)/South
45. To summarize the discussion above, infirmities have been pointed out by the accused in the case of the complainant which raises suspicion that the complainant advanced the alleged loan to the accused. The onus upon the accused was to rebut the presumptions by raising a probable defence or to dislodge the version of the complainant upon preponderance of probabilities and the accused by pointing out the loopholes in the case of the complainant has been able to bring out circumstances which rebut such presumptions.
46. It has been held by Hon'ble High Court of Delhi in 'Satish Sharma v. State NCT of Delhi & Anr. [(2013) 204 DLT 289]' -
"8. Although the Court is under an obligation to raise the presumption contemplated under Sections 118, 138 and 139 in every case, where the factual basis for raising the presumption has been established by the complainant, the accused is required to raise a probable defence or rebut such a presumption by leading evidence or bringing such facts on record in the cross-examination of the complainant that could make the latter's case improbable. For doing so, it is not necessary for the accused to disprove the existence of consideration by way of direct evidence. The standard of proof has been held to be preponderance of probabilities and the inference of preponderance of probabilities can be drawn not only from the materials that have been placed on record, but also by reference to the circumstances upon which the accused CC No. 8407/18 Ajay Kumar Malhotra vs. Sanjeev Page no 24 of 27 (Aakash Mohan Singh) JMFC-05 (NI Act)/South relies. (Ref: AIR 1999 SC 1008 titled Bharat Barrel and Drum Manufacturing Company vs. Amin Chand Payrelal). If the accused is proved to have discharged the initial onus of proof placed on him by showing that the existence of consideration was improbable or doubtful or illegal, then the onus will shift back to the complainant who will then be under an obligation to prove it as matter of fact and failure to do so will disentitle him to any relief on the basis of the negotiable instrument."
47. In light of the aforementioned facts and circumstances, it is clear that since the accused has successfully punched holes in complainant's version, the onus of proof would shift back upon the complainant.
48. It has been argued by the complainant that the accused has taken contrary stands in respect of the loss of impugned cheque. However, it is a cardinal principle of the criminal jurisprudence "that the prosecution has to prove its case beyond reasonable doubt by leading reliable, cogent and convincing evidence; and the subtle proposition of criminal law that in order to successfully bring home the guilt of the accused, the prosecution is supposed to stand on its own legs and it cannot derive any benefits whatsoever from the weakness, if any, in the defence of the accused."; However, in the facts of the present case, the complainant has not lead any further evidence and no explanation has been brought forward by the complainant to fill the loopholes created by the accused in the version of the complainant. Perusal of the cross examination of the defence witness also shows CC No. 8407/18 Ajay Kumar Malhotra vs. Sanjeev Page no 25 of 27 (Aakash Mohan Singh) JMFC-05 (NI Act)/South that nothing has been brought out in order to fill the loopholes created and infirmities pointed by the accused in the version of the complainant.
49. It is also a settled position of law that in criminal trials the guilt of the accused has to be proved beyond any shadow of doubt; and the criminal trial stand on a different pedestal than that of a civil case where any suspicious circumstance arising will certainly give advantage to the accused. Reliance is placed upon Veena Rani Chabra vs. Manju Rohida, MANU/DE/3067/2008.
50. Hence, in the light of discussion and the authorities cited in the aforegoing para(s), it is apparent that the case of the complainant that the cheque in question was issued to him by the accused for the purpose repaying the loan amount advanced by the former to the latter is unworthy of credit and fails to inspire the confidence of the Court. The finding that the version put forward by the complainant is full of infirmities and the failure of the complainant to bring on record anything to cure the infirmities is fatal to the case of the complainant. It can be concluded that the accused has rebutted the presumption raised under section 139 of NI Act. Consequently, it can be said that no legal liability exists in favour of the complainant qua the cheque amount, thus, the second ingredient to the offence under section 138 of NI Act does not stands proved.
CONCLUSION:
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51. To recapitulate the above discussion, the accused has been successful in establishing a probable defence on the standard of preponderance of probabilities to rebut the presumption under section 118 and 139 of the NI Act. Cogent evidence is required to be proved beyond reasonable doubt to secure conviction in a criminal trial. The accused has been successful in establishing a probable defence and thereby proving that the cheque was not given in discharge of legal debt or liability owed to the complainant. In the result of the analysis of the present case, the accused Sanjeev is hereby acquitted of the offence punishable under Section 138, Negotiable Instruments Act, 1881.
52. This judgment contains 27 pages. This judgment has been signed and pronounced by the undersigned in open court.
53. Copy of this Judgment be given dasti free of cost as per rules.Digitally signed by AAKASH
AAKASH MOHAN SINGH MOHAN Date: SINGH 2024.12.09 15:58:59 +0530 ANNOUNCED IN THE OPEN (AAKASH MOHAN SINGH) COURT ON 09.12.2024 JMFC-05/NI ACT/SOUTH/SAKET NEW DELHI CC No. 8407/18 Ajay Kumar Malhotra vs. Sanjeev Page no 27 of 27 (Aakash Mohan Singh) JMFC-05 (NI Act)/South