Delhi District Court
Hon'Ble Supreme Court In Rangappa vs Sri Mohan (2010) 11 Scc 441 And Also on 27 January, 2023
IN THE COURT OF MS. PADMA LANDOL,
METROPOLITAN MAGISTRATE, NI ACT DIGITAL COURT- 03, NEW
DELHI DISTRICT, PATIALA HOUSE COURT, NEW DELHI
SATISH KUMAR SHARMA v. MOHAN SINGH
1. Complaint Case no. : 769/2020
2. Date of Institution of case : 14.12.2020 (As per Layers
Software)
3. Name of the complainant : Sh. Satish Kumar Sharma
S/o Late Sh. Banwari Lal Sharma,
R/o RZ-D-2/135, Third Floor,
Gali no. 4, Mahavir Enclave,
New Delhi-110045
4. Name and address of Accused : Sh. Mohan Singh
S/o Sh. Atar Singh
R/o RZ-H-38, Harijan Basti,
West Sagarpur, South-West,
New Delhi-110046
Also at-
RZ-30, Gali no. 24, Indra Park,
Opposite Bikaner Sweets, Palam
Colony, New Delhi-110045
5. Offence complained of : Section 138 NI Act
6. Plea of accused : Pleaded not guilty
7. Final Order : Convicted
8. Date of judgment : 27.01.2023
CC No.769/2020 SATISH KUMAR SHARMA v. MOHAN SINGH Page no. 1 of 24
Digitally signed
by PADMA
PADMA LANDOL
LANDOL Date:
2023.01.27
16:22:02 +0530
-: JUDGMENT :-
1. The present complaint under Section 138 of Negotiable Instruments Act, 1881 (hereinafter referred to as "NI Act") is filed by the complainant Satish Kumar Sharma. The background of the dispute as cited by the complainant is that the parties herein are known to each other for the last many years and sharing friendly relations. In August 2019, accused approached the complainant for a friendly loan of Rs. 1,00,000/- for enhancement of his boutique business in the name and style of M/s. Kiran Boutique. Considering the needs of the accused, complainant advanced a friendly loan of Rs. 1,00,000/- in cash to him on 10.08.2019. The accused had promised to return the said loan within one year. At the time of advancement of the loan, accused had issued a post dated cheque bearing no. 369723 dated 10.07.2020 and a hand written acknowledgment note on the photocopy of his Aadhar card. Thereafter, accused again took a friendly loan of Rs. 3,00,200/- from the complainant on various occasions. However, accused returned only a part amount of Rs. 25,200/- from the period of March 2020 till July 2020 which the complainant noted down in the accounts book of accused in his own handwriting. Thereafter, in July 2020 when the complainant asked the accused to return the remaining amount of Rs. 3,75,000/-, accused executed a written promissory note dated 10.07.2020 of the said amount on the letter head of M/s. Kiran Boutique and also issued a post dated cheque bearing no. 681424 [cheque in dispute (Ex. CW-1/D)] dated 20.09.2020 for Rs. 3,75,000/-. Accused assured that the cheque is good for payment.
2. At the assurance of the accused, complainant presented the cheque in dispute in his bank. Upon presentation, it came to be dishonoured with remark "Funds Insufficient" vide a return memorandum dated 06.10.2020 [Ex. CW-1/E]. The complainant eventually sent a legal demand notice dated 02.11.2020 [Ex. CW-1/F] to the accused through speed post vide postal receipts [Ex. CW-1/G] and internet generated tracking report [Ex. CW-1/H]. Despite service of the CC No.769/2020 SATISH KUMAR SHARMA v. MOHAN SINGH Page no. 2 of 24 Digitally signed by PADMA PADMA LANDOL LANDOL Date:
2023.01.27 16:22:12 +0530 notice, no payment was received by the complainant. The accused having failed to make the payment within the statutory period of 15 days, the present complaint has been filed by the complainant against the accused.
3. The complainant was directed to submit the original case documents (complaint, affidavit of pre-summoning evidence, cheque and annexed documents) with the Court, a condition precedent to the taking of cognizance of the complaint, as per SOP/Guidelines issued by the SCMSC Hon'ble High Court of Delhi for functioning of Digital Courts. Pursuant to the said compliance, vide order dated 14.01.2021, after being satisfied that prima facie ingredients of Section 138 NI Act are made out cognizance was taken and summons were directed to be issued against the accused. Accused entered into appearance on 02.02.2021 and was admitted to bail on the same date. Upon seeing that there is no possibility of settlement, notice under Section 251 Cr.PC was framed on 03.03.2021 and served upon the accused to which he pleaded not guilty and claimed trial. Accused admitted the issuance of the cheque in dispute with his signature and also admitted the receipt of legal demand notice. He took a defence that in November 2019 he had taken a loan of Rs. 1,00,000/- from the complainant and it was agreed that the said amount would be returned in instalment of Rs. 1000/- per day for 100 days. At that time, he issued the cheque in dispute by way of security. Thereafter, he returned Rs. 25,000/- in 25 instalments of Rs. 1000/- each. Then, he again took a loan of Rs. 30,000/- from the complainant on 01.12.2019. It was then agreed that accused would pay the loan amount in instalment of Rs. 1300/- per day for 100 days. He regularly paid the instalments till 03.03.2020 after which payment could not be made owing to the onset of Covid-19 pandemic. Complainant demanded his money after the lockdown, then accused borrowed Rs. 6500/- and paid to him. Thereafter, he again paid Rs. 25,000/- after borrowing from his brother. Again in November 2020, he borrowed Rs. 1,00,000/- from his brother and paid to the complainant.
CC No.769/2020 SATISH KUMAR SHARMA v. MOHAN SINGH Page no. 3 of 24 Digitally signed PADMA by PADMA LANDOL LANDOL Date: 2023.01.27 16:22:19 +0530 That the complainant had told that entire amount stands paid, however, he still presented the cheque in dispute. That he does not owe any money to the complainant and has in fact paid more than the loan amount.
4. The accused was then granted liberty to move an application under Sec. 145(2) NI Act. He filed the application and the same was allowed. The matter was then listed for recording of evidence through video conference through Cisco Webex Meet in compliance of the Project Implementation Guidelines 2020 laid down by Hon'ble High Court of Delhi and Video Conferencing Rules 2021 issued by Hon'ble High Court of Delhi dated 26.10.2021. On 09.12.2021, complainant, CW-1 was cross-examined.
5. In Complainant's evidence, the complainant (CW-1) tendered his affidavit in post summoning evidence and relied upon following documents:
i) Original cheque bearing no. 369723 dated 10.07.2020: CW-1/A.
ii) Written acknowledgment note: Ex. CW-1/B.
iii) Written promissory note dated 10.07.2020: Ex. CW-1/C.
iv) Original cheque in dispute bearing no. 681424 dated 20.09.2020: Ex. CW-1/D.
v) Bank return memo dated 06.10.2020: Ex. CW-1/E.
vi) Copy of legal notice dated 02.11.2020: Ex. CW-1/F.
vii) Postal Receipts: Ex. CW-1/G.
viii) Internet generated tracking report: Ex. CW-1/H.
ix) Certificate u/s. 65-B Indian Evidence Act: Ex. CW-1/I.
6. In his cross-examination, the Complainant (CW-1) deposed that he knew accused for the last 6-7 years and he used to regularly visit the accused at his boutique shop. That the handwriting of all the particulars including the signature on the cheque bearing no. 369723 [Ex. CW-1/A] is of accused. That at the time of issuance of this cheque, accused also handed over a copy of his Aadhar card CC No.769/2020 SATISH KUMAR SHARMA v. MOHAN SINGH Page no. 4 of 24 Digitally signed PADMA by PADMA LANDOL LANDOL Date: 2023.01.27 16:22:25 +0530 bearing an acknowledgment of Rs. 1,00,000/-. Witness has denied the suggestion of Ld. Counsel for accused that complainant had taken a signed and blank letterhead of M/s. Kiran Boutique at the time of advancement of loan of Rs. 1,00,000/-. CW-1 has also deposed that the pronote [Ex. CW-1/C] was handed over to him by accused on 10.07.2020. That the said pronote was already written and he doesn't know if it was in the hand writing of accused. He has further denied the suggestion that the pronote was handed over to him in blank along with copy of Aadhar card and later, he himself wrote the pronote. Qua the acknowledgment [Ex. CW-1/B], CW-1 has deposed that the accused had written the same in his presence on the day of advancement of loan of Rs.1,00,000/-. He has also denied the suggestion that loan was agreed to be returned in daily instalments of Rs. 1000/- (in a total of 100 instalments). CW-1 has voluntary stated that accused had promised to return the loan as and when he had the funds and the moment he used to pay some amount, complainant used to note it down in the books of accused. That he never kept any such record with himself as he trusted the accused. Upon confrontation with documents bearing page no. 8 and 9 [Ex. CW-1/D2 (colly)], complainant admitted his hand writing on the same. He has further admitted the receiving of a total of Rs. 25,000/- in several instalments, however, denied remembering the exact date by which said amount was received. He admitted that accused had taken a further loan of Rs. 30,000/- however denied remembering the date. Witness has denied the suggestion that after advancing the said further loan of Rs. 30,000/-, it was agreed that same would be repaid in the instalments of Rs. 1,300/- per day (Rs. 1,000/- towards previous loan of Rs. 1,00,000/- and Rs. 300/- towards the loan of Rs. 30,000/-). He has voluntary stated that accused had promised to return the loan after one year and that if he has the funds before one year, he would pay the same forthwith. He has further denied the suggestion that accused has paid 68 instalments of Rs. 1,300/- each till 05.03.2020. CW-1 also denied the suggestion that he threatened the accused in August 2020 since he was not repaying the loan amount, he would charge interest CC No.769/2020 SATISH KUMAR SHARMA v. MOHAN SINGH Page no. 5 of 24 Digitally signed by PADMA PADMA LANDOL LANDOL Date:
2023.01.27 16:22:32 +0530 @ Rs. 500/- per day from the date of advancement of Rs. 1,00,000/- and if same is not paid, he would face dire consequences. Upon confrontation with para G at page no. 3 of application u/s. 145(2) NI Act, CW-1 admitted the receiving of Rs. 6,500/-, however, submitted that it was not against the loan of Rs. 1,30,000/- and it was taken by the accused for his daily needs and admission of his daughter. Upon confrontation with para J at page no. 3 of application u/s. 145(2) NI Act, CW-1 deposed that he received a total of Rs. 25,200/- towards the loan amount of Rs. 1,30,000/- and further amount of Rs. 6,500/-. CW-1 denied receiving Rs. 1,00,000/- from accused in November 2020. That he received the cheque in dispute [Ex. CW-1/D] from the accused in July or August 2020. He denied the suggestion that the cheque in dispute which was in blank was given to him at the time of advancement of loan of Rs. 1,00,000/-. Witness further denied that the handwriting on pronote [Ex. CW-1/C] and cheques [Ex. CW-1/A and Ex. CW- 1/D] are not in the handwriting of the accused. He voluntary stated that he does not know the handwriting on the same. CW-1 has again denied the suggestion that accused did not take any loan except Rs. 1,30,000/- and that he received Rs. 2,45,100/- from the accused and further that he had misused the cheque in dispute. Thereafter, the complainant closed CE on the same date.
7. The accused was then examined under Section 313 Cr.PC wherein all the incriminating evidence was put to them. Accused has reiterated his defence in his statement u/s. 313 Cr.PC and submitted that he had given two blank signed cheques to the complainant at the time of taking of first loan of Rs. 1,00,000/-.
He denied taking of loan of Rs. 3,00,200/- and submitted that the complainant has filled the wrong amount in the cheque in dispute. That he had returned Rs. 2,45,000/- to the complainant against a total loan of Rs. 1,30,000/- and complainant has filed a false case against him.
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8. The accused was then examined as DW-1. In his examination-in-chief, DW-1 has deposed that the complainant used to visit at the nearby cyber cafe and lend money to the owner of the cyber cafe. As he was in need of funds for his business, he met the complainant through the said owner of cyber cafe.
Complainant agreed to advance loan and accordingly gave a friendly loan of Rs. 1,00,000/- which was to be repaid in the instalment of Rs.1,000/- per day for 100 days. That he paid Rs. 25,000/- in 25 days, however, he was in need of more funds and upon his request, complainant further advanced a loan of Rs. 30,000/- and he agreed to repay the same in instalment of Rs. 1,300/- per day for 100 days. Accordingly, he paid the instalments for 84 days, however, could not make further payment due to Covid-19 lockdown as his business was affected. Then the complainant told him that he would charge Rs. 500/- per day as interest from the back date. Thereafter, he paid Rs.6,500/- to the complainant on one occasion and Rs.25,000/- on another occasion. After sometime, complainant demanded Rs.1,00,000/- towards full and final payment which he agreed and paid to him after borrowing money from his brother. That, in total he has paid Rs. 2,48,000/- to the complainant against which he issued receipt in his own handwriting. However, complainant failed to return his papers despite several reminders. DW- 1 has relied on:
i) Copy of receipts, page no. 5 to 7 [Ex. CW-1/D1]
ii) Copy of receipts, page no. 8 and 9 [Ex. CW-1/D2 (colly)].
9. In his cross-examination, witness deposed that in August 2019, his income was around Rs. 1,500-1,600/- per day after deducting the expenses. That he does not file ITR. Upon confrontation with para 7 of application u/s. 315 Cr.PC, DW-1 deposed that he had paid a total of 84 instalments and not 68 and started paying the same from 05.11.2019. That the complainant had asked him to keep a record of the same, hence he used to maintain a register and after lockdown, complainant himself used to write in his register. He has further deposed that the CC No.769/2020 SATISH KUMAR SHARMA v. MOHAN SINGH Page no. 7 of 24 Digitally signed by PADMA PADMA LANDOL LANDOL Date:
2023.01.27 16:22:45 +0530 documents at Ex. CW-1/D1 and Ex. CW-1/D2 (colly) are the copies of register maintained by him. Accused admitted that nowhere on these documents, signature of the complainant is reflecting. He has further admitted that the contents on page no. 5, 6 and 7 are in his handwriting. He has denied the suggestion that the said document bearing page no. 5, 6 and 7 are false, fabricated and have no concern with the complainant. DW-1 has further stated that the pages bearing no. 5, 6 and 7 belong to one register and pages bearing no. 8 and 9 belong to another register. He has also admitted that his name and signature are nowhere reflecting on these pages. Accused has also deposed that he did not make any police complaint against the complainant after he threatened him. Witness was then confronted with para 11 of application u/s. 315 Cr.PC and asked if has any acknowledgment of payment of Rs. 25,200/- in August 2020 and Rs. 1,00,000 in November 2020, to which he replied that he was relying on pages bearing no. 8 and 9 [Ex.CW-1/D2 (colly)]. Upon asking if the amount of Rs. 2,45,000/- as mentioned in para 13 of application u/s. 315 Cr.PC is anywhere reflecting from Ex.CW-1/D1 or Ex.CW-1/D2 (colly), to which he answered that he has mentioned a collective amount. DW-1 has deposed that the name of the cyber cafe owner is Anil. He has denied the suggestion that there is no such person with the name Anil and no cyber cafe owner existed between him and the complainant. He has admitted that there is no mention of any cyber cafe owner in any of his documents filed on record. Thereafter, on the same day, accused closed his DE.
10. Final arguments have been heard at length. Complete record has been perused carefully.
In the final arguments, complainant has asserted its case for conviction against the accused essentially on the ground of having proved the cause of action against him, beyond all reasonable doubt. This is premised on the substantive proof of presentation of the cheque in dispute admittedly issued by the accused with his signature, its return as dishonoured from the payee's bank CC No.769/2020 SATISH KUMAR SHARMA v. MOHAN SINGH Page no. 8 of 24 Digitally signed by PADMA PADMA LANDOL LANDOL Date:
2023.01.27 16:22:51 +0530 upon presentation for encashment and non-payment by the accused of the legally enforceable debts within the statutorily prescribed period, despite service of legal demand notice. It is submitted by the Ld. Counsel for the complainant that the defence raised by the accused stand falsified by his own statements as there are contradictory statements given by accused at various places. In this regard, he submitted that:
i) Accused has admitted the loan being a friendly loan which means same is interest free.
ii) At one point, accused stated that he has paid a total of Rs. 2,48,000/-, however, in his application u/s. 315 Cr.PC, the same amount is stated to be Rs. 2,45,000/-.
iii) In his examination-in-chief, accused stated that he took a loan of Rs.1,00,000/- from his brother, however, in his application u/s. 315 Cr.PC, the same loan amount is stated to be Rs. 6,500/-.
iv) Accused has stated that he earned Rs.1,600/- per day at the relevant time but he did not file ITR and further, if income was Rs.1,600/- per day, why was he not able to pay Rs.1,000/- per day to complainant.
v) If the cheque in dispute was misused by complainant, accused should have stopped the payment or file a complaint against the complainant.
vi) In his examination-in-chief, accused stated that he has paid a total of 84 instalments, however, in his applications u/s. 145(2) NI Act and 315 Cr.PC, the same instalment is stated to be 68. Further, number of days from 05.11.2019 to 05.03.2020 is 121.
vii) The five pages filed by accused at Ex. CW-1/D1 and Ex. CW-1/D2 (colly) neither bear any signature, date or serial number. That these loose pages are no evidence in the light of Sec. 34 of the Indian Evidence Act, 1872 as accused did not produce the registers from which these pages have been copied and produced.
viii) Though the complainant has admitted his handwriting on page no. 8 and 9 [Ex. CW-1/D2 (colly)], however, accused has failed to show how the same is related to him as neither his name nor signature is reflecting therein.
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ix) No amount, either Rs. 2,45,000/- or Rs. 2,48,000/- is reflecting from the Ex. CW-1/D1 and Ex. CW-1/D2 (colly).
x) Accused had no financial capacity to pay Rs. 1,300/- per day as admittedly the rent of the premises where he run his boutique was Rs. 4,500/- per month and he earned only Rs. 1500-1600 per day.
xi) Accused has admitted his signature on the cheque in dispute, acknowledgment and promissory note. Transaction is also admitted and further, financial capacity of the complainant was never questioned. Hence, the presumption u/s. 139 NI Act raised in favour of the complainant and against the accused does not stand rebutted.
Ld. Counsel has relied on Oriental Bank of Commerce v. Prabodh Kumar Tewari 2022 SCC OnLine SC 1089 to argue that if a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. That onus would still be on the accused to prove that the cheque was not in discharge of the debt or liability.
11. Per contra, Ld. Counsel for the accused has prayed for dismissal of the complaint and acquittal of the accused primarily on the ground that the accused has successfully rebutted the presumption raised against him. In this regard, he submitted that:
i) That the initial loan of Rs. 1,00,000/- advanced in August 2019 is admitted by accused, however, complainant has stated that thereafter on various occasions, a loan of Rs. 3,00,200/- to accused, however, complainant has failed to show when and how this amount was given. No details in this regard has been supplied.
ii) That the handwriting on acknowledgment letter [Ex. CW-1/B] is admitted, however, the handwriting on the promissory note dated 10.07.2020 [Ex. CW-1/C] is completely different from the one in acknowledgment letter and is disputed.
iii) That the complainant has admitted his handwriting on page no. 8 and 9, hence he cannot now claim that said pages are not admissible in evidence in the absence CC No.769/2020 SATISH KUMAR SHARMA v. MOHAN SINGH Page no. 10 of 24 Digitally signed by PADMA PADMA LANDOL LANDOL Date:
2023.01.27 16:23:03 +0530 of any signature. Further, receiving of Rs. 1,00,000/- and further calculations showing Rs. 1,300/- are mentioned in these pages, hence, complainant cannot now claim that only Rs. 25,200/- has been paid by accused and there was no calculation involving Rs. 1,300/-.
iv) In his cross-examination, CW-1 has denied receiving Rs. 1,00,000/-, however, pages no. 8 and 9 [Ex. CW-1/D2 (colly)] finds mention of Rs. 1,00,000/- as received. Further, CW-1 has stated that the cheque in dispute was given by accused in July 2020 however, complainant failed to explain how the balance was computed as Rs. 3,75,000/- at that time.
iv) That the total amount returned by the accused may differ i.e. either Rs.
2,45,000/- or Rs. 2,48,000/-, however, accused had received a sum of Rs. 1,30,000/- from the complainant and an amount higher than the loan amount has been returned to the complainant.
v) That the complainant has questioned the financial capacity of accused. If the accused was financially sound, there would have been no occasion to take loan at the first place.
vi) Accused did not file any complaint against the complainant for misuse of the cheque in dispute because the accused, being a man of little means could not afford the legal expenses.
vii) That since the recoverable debt is lesser than Rs. 3,75,000/- (cheque amount). Hence, onus shifts back to the complainant to prove the case beyond reasonable doubt.
Ld. counsel for accused has relied on judgments in:
i) Basalingappa v. Mudibasappa (2019) 5 SCC 418 to support his arguments on shifting of onus to complainant and preponderance of probability.
ii) MS Narayan Menon @ Mani v. State of Kerala (2006) 6 SCC 39 to support his arguments on the extent of burden of proof on the accused.
iii) Dashrathbhai Trikmbhai Patel v. Hitesh Mahendrabhai Patel and another AIR 2022 SC 4961 to argue that when a part payment of the debt is made after the CC No.769/2020 SATISH KUMAR SHARMA v. MOHAN SINGH Page no. 11 of 24 Digitally signed by PADMA PADMA LANDOL LANDOL Date:
2023.01.27 16:23:09 +0530 cheque is drawn but before its presentation, such payment must be endorsed on the cheque. If the unendorsed cheque is dishonoured on presentation, the offence under Sec. 138 NI Act would not be attracted.
12. It is now pertinent to examine the factual matrix of the case in the light of the ingredients of the provision as produced herein:
138. Dishonour of cheque for insufficiency, etc., of funds in the account.--
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 provision 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: Provided that nothing contained in this section shall apply unless--
(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier;
(b) 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; and CC No.769/2020 SATISH KUMAR SHARMA v. MOHAN SINGH Page no. 12 of 24 Digitally signed by PADMA PADMA LANDOL LANDOL Date:
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(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.Explanation.--For the purposes of this section, "debt of other liability" means a legally enforceable debt or other liability.
13. The essential ingredients in order to attract Sec. 138 of NI Act, 1881 are:
i) Existence of legally enforceable debt or liability and issuance of cheque in discharge of said debt or liability;
(ii) Dishonor of cheque in dispute which must have been drawn on an account maintained by the accused;
(iii) Service of legal demand notice seeking payment of cheque amount within 30 days from the date of receipt of return memo;
(iv) Non-payment of cheque amount within fifteen days from the date of service of notice; and
(v) Filing of complaint within one month from the date on which cause of action arises.
14. Now, coming to the facts of the case in hand in the light of above mentioned legal principles. In the instant case, the issuance of the cheque in dispute [Ex. CW-1/D] by the accused, its presentation in the bank for encashment and subsequent dishonor due to the reason "funds insufficient", is not disputed and is a matter of record, as proved by the bank return memo [Ex. CW-1/E]. The receipt of legal demand notice [Ex. CW-1/F] stands proved through the postal receipts [Ex. CW-1/G] and even otherwise admitted by the accused in his statement u/s. 251 Cr.PC as well as u/s. 294 CrPC. Therefore, the presentation of the cheque in dispute, its dishonorment and service of legal demand notice stand proved. It is also established that the cheque in dispute belongs to the accused and admittedly the signature on the same belongs to him. Once these facts are established, a presumption of the cheque having been issued in discharge of a CC No.769/2020 SATISH KUMAR SHARMA v. MOHAN SINGH Page no. 13 of 24 Digitally signed by PADMA PADMA LANDOL LANDOL Date:
2023.01.27 16:23:21 +0530 legally existing liability and drawn for good consideration arises by virtue of Section 118 (a) of the Negotiable Instruments Act. Once Section 139 of the NI Act comes into picture, the Court presumes that the cheque was issued in discharge, in whole or in part, of any debt or liability. At this stage, with the help of presumption under Section 139 read with Section 118(a) of the Negotiable Instruments Act, the case of the complainant stands proved.
15. Since the presumption under Section 139 read with Section 118(a) of the NI Act is in favour of the complainant, it is now for the accused to rebut the same either by discrediting the veracity of material relied upon by the complainant or by leading positive evidence to probabilize his defence on the touchstone of preponderance of probabilities as provided by the three Judge bench of the Hon'ble Supreme Court in Rangappa Vs Sri Mohan (2010) 11 SCC 441 and also in Rohitbhai Jivanlal Patel v. State of Gujarat & Anr. (2019) 18 SCC 106.
16. It is trite law that for rebuttal of the said presumption under Section 139 read with Section 118(a) of NI Act, accused need not even step into the witness box as he can rebut the same by placing reliance on the material brought on record by the complainant or even by raising presumptions of fact and law on the basis of material available on record. The accused has to make out a fairly plausible defence which is acceptable to the Court. Therefore, the standard of proof required from the accused to prove his defence is "preponderance of probabilities" and not beyond reasonable doubt. However, at the same time, it is also to be remembered that bare denial of the existence of legally enforceable debt or other liability cannot be said to be sufficient to rebut the presumption and something which is probable has to be brought on record to shift the burden back to the complainant.
The statutory presumption u/s. 118(a) NI Act reads as under:
118 Presumptions as to negotiable instruments. --Until the contrary is proved, the following presumptions shall be made:--
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(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 The statutory presumption u/s. 139 NI Act reads as under:
39. 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.
17. Keeping these basic principles in mind, this Court shall now proceed to deal with the various defences taken by the accused and examine whether the accused has been able to rebut the presumption arising in favour of the complainant-
I. Defence of Daily Instalments:
First and foremost defence taken by the accused is that the total loan taken from the complainant was Rs. 1,30,000/- and not Rs. 4,00,200/- as claimed by complainant. The loan of Rs. 1,00,000/- is admittedly taken by accused, however, he claims to have taken the same in November 2019 as against August 2019 as per the version of complainant. Accused has also admitted the acknowledgment [Ex. CW-1/B] in his handwriting and signature. Accused has claimed that the loan of Rs. 1,00,000/- was to be repaid in 100 days of Rs. 1,000/- per day. That he paid 25 instalments of Rs. 25,000/- and thereafter, again took a loan of Rs. 30,000/- from complainant. The date of advancement of this loan of Rs. 30,000/- is stated to be 01.12.2019 while framing notice u/s. 251 CrPC and it is 30.11.2019 in the applications u/s. 145(2) NI Act and 315 CrPC. That the remaining payment of Rs. 75,000/- from earlier loan of Rs. 1,00,000/- and Rs.
30,000/- from the subsequent loan was clubbed and decided to be repaid in instalments of Rs.1300/- per day for 100 days. However, accused has failed to CC No.769/2020 SATISH KUMAR SHARMA v. MOHAN SINGH Page no. 15 of 24 Digitally signed by PADMA PADMA LANDOL LANDOL Date:
2023.01.27 16:23:34 +0530 explain why and how the instalment was calculated at Rs.1,300/- for 100 days when the remaining amount is Rs. 1,05,000/- only as per his own version. The oral agreement qua payment through instalments is denied by the complainant during his cross-examination.
In order to prove the payments through instalments, accused brought 5 loose/unbound pages from his two separate notebooks at page no. 5, 6 and 7 at Ex. CW-1/D1 and page no. 8 and 9 at Ex. CW-1/D2 (colly). The handwriting of contents on page no. 5, 6 and 7 is admittedly of accused. Complainant has admitted his handwriting on page no. 8 and 9. The contents on page no. 5, 6 and 7 do not go to the extent of proving the instalments and payment of the same because firstly, the same do not bear any details regarding the parties herein, hence, inference cannot be drawn that the transactions reflecting therein were between the complainant and accused. Secondly, these pages no. 5, 6 and 7 are photocopies and accused failed to produce the original notebook from where the same has been photocopied and no reason, of any sort has been given for such non-production. The Hon'ble Supreme Court of India in CBI v. V.C. Shukla AIR 1998 SC 1406 has held that loose sheets or scraps of paper cannot be termed as 'book' for they can be easily detached and replaced and hence, not relevant u/s. 34 of Indian Evidence Act, 1872.
Page no. 8 and 9 do not show daily entries of instalments rather page no. 8 shows certain amounts on 8 different dates in July 2020 of Rs. 6500/- in total. Receiving of the same is admitted by the complainant, however, same is stated to be a separate transaction. Page no. 9 bears certain calculations of some dates and it is also not a daily entry of instalments paid by accused to complainant. Accused has argued that page no. 9 bears 1300/- in calculation and since handwriting is admitted by complainant, there leaves no room for doubt but to hold that instalments of Rs. 1300/- per day were paid. This argument is bereft of merit because as pointed out by complainant, page no. 9 does not bear the signature of accused or even his name. It does not show the calculations/transactions were CC No.769/2020 SATISH KUMAR SHARMA v. MOHAN SINGH Page no. 16 of 24 Digitally signed by PADMA PADMA LANDOL LANDOL Date:
2023.01.27 16:23:40 +0530 pertaining to the parties herein or same relates to the loan transaction in question. Just because accused himself has produced the page, it cannot be assumed that it was given to him by complainant and it reflects the loan transaction between them when all the amounts except Rs. 6,500/- and 25,200/- are denied by complainant. In a first blush, this document may appear to create a probable defence, however, when looked in a holistic manner along with other facts, which shall be dealt with in the succeeding paragraphs does not inspire much confidence. Further, in order to prove this defence, accused could have called his wife as a witness since she used to work with him at his boutique but he chose not to do so. In such a scenario and for the reasons which shall be spelled out in the subsequent paragraphs, it is not probable to believe that there was an instalment of Rs. 1300/- or Rs. 1000/- per day agreed between the parties.
II. Defence of Payment already made-
Next defence of accused is that he has already paid an amount over and above the loan amount of Rs. 1,30,000/-. Firstly, in order to prove the total loan amount, no positive evidence has been led by accused. He has only filed the unbound/loose sheets (pages 5 to 9). These sheets nowhere mentions the total loan amount advanced by complainant to accused. Further, as already discussed in the preceding paragraph the pages do not bear the particulars of parties. It only mentions the name of complainant which is not sufficient to raise a plausible defence when the original notebook itself is not produced. When the best evidence is not produced by the accused, the principle of adverse inference can be drawn against him. Accused has stated in his examination-in-chief that he met the complainant through an owner of nearby cyber cafe, namely Mr. Anil as complainant used to lend money to him and he had asked Mr. Anil if complainant would lend him some money. Accused could have examined the said cyber cafe owner in support of his defence, however, he did not do so. Further, accused has stated that his wife also works at his boutique and complainant used to visit his CC No.769/2020 SATISH KUMAR SHARMA v. MOHAN SINGH Page no. 17 of 24 Digitally signed by PADMA PADMA LANDOL LANDOL Date:
2023.01.27 16:23:46 +0530 boutique to collect loan amount. Accused had an opportunity to examine his wife in support of his defence, however, he failed to bring her in the witness box.
Secondly, in his application u/s. 145(2) NI Act and in application u/s. 315 CrPC, accused has submitted that he has already paid Rs. 2,45,100/- to the complainant. Per contra, in his examination-in-chief, he deposed that he has paid a total sum of Rs. 2,48,000/- to the complainant against the loan of Rs. 1,30,000/-. However, as already mentioned in the preceding paragraph, accused has failed to explain all the figures appearing at page no. 9. Accused has been constantly stressing on only three figures therein i.e. 25,200/-, 1,00,000 and 6,500 against which "RECEIVED" is written, however, there is no mention or even an attempt to explain rest of the 14 figures in any way. Accused has further submitted in his statement u/s. 251 Cr.PC that he had taken loan from his brother, of Rs. 25,000/- at one instance and Rs. 1,00,000/- at another instance which were paid to the complainant, however, in the applications u/s. 145(2) NI Act and 315 Cr.PC, he has stated that he had borrowed Rs. 6500/- from his brother. In support of his defence, accused could have called his brother in the witness box, however, he failed to examine him. Further, during cross-examination accused could not answer if he had receiving/acknowledgment of payment of Rs. 25,200/- in August 2020 and Rs. 1,00,000/- in November 2020. Also, in his examination-in- chief, accused has deposed that complainant had asked him to pay Rs.1,00,000/- towards full and final payment and accordingly, after borrowing Rs.1,00,000/- from his brother, he paid to the complainant. However, no evidence is led to prove the same and in fact, there is a balance of Rs.1,63,500/- reflecting from page no. 9 [Ex. CW-1/D2 (colly)]. Accused has failed to give any explanation in this regard. In his examination-in-chief, accused has further stated that he had paid Rs. 2,48,000/- against which complainant had issued receipts in his own handwriting. However, accused has failed to bring any such receipts and the alleged receipts at page no. 8 and 9 [Ex. CW-1/D2(colly)] nowhere reflect acknowledgment of such an amount. Furthermore, accused has deposed that in CC No.769/2020 SATISH KUMAR SHARMA v. MOHAN SINGH Page no. 18 of 24 Digitally signed PADMA by PADMA LANDOL LANDOL Date: 2023.01.27 16:23:52 +0530 August 2020, complainant had threatened him of dire consequences if payment is not made, then 'thereafter' after borrowing money from his brother, he paid Rs. 6500/- in instalments to the complainant from 08.07.2020 till 22.07.2020. This version is highly doubtful as alleged threatening was in August 2020 and payment was stated to be made in July 2020 i.e. prior in time. These circumstances show that rather than finding a dent in the case of complainant, accused has led to creation of a doubt in his own defence. In such a scenario, accused has failed to raise a probable defence qua payment of Rs. 2,45,100/- or Rs. 2,48,000/- to the complainant.
III. Inconsistent Defence:
There is no gainsaying that the burden on accused to rebut the presumptions against him is not a heavy one. He need not prove his defence beyond reasonable doubt and in fact, the presumptions stand rebutted once he raises a probable defence and creates a shadow of cloud on the case of complainant. In other words, the accused has to cross the threshold of preponderance of probability to be able to rebut the presumptions. He cannot raise inconsistent defences at different stages and claim to have rebutted the presumptions. Such is a case herein. While framing notice u/s. 251 Cr.PC and statement u/s. 313 Cr.PC, accused has stated that along with other documents, the cheque in dispute [Ex. CW-1/D] was given to the complainant at the time of taking of initial loan of Rs. 1,00,000/-, however, in his applications u/s. 145(2) NI Act and Sec. 315 Cr.PC, there is no mention of handing over of cheque in dispute at any point of time. Further, accused has stated in his applications u/s. 145(2) NI Act and Sec. 315 Cr.PC that he paid Rs. 25,200/- to the complainant in August 2020, however, on page no. 9 [Ex. CW-1/D2 (colly)], Rs. 25,200/- is mentioned as received from 06.03.2020 till 07.07.2020. No explanation of any sort has been given by accused for the contrary time period. Furthermore, in the applications u/s. 145(2) NI Act and 315 Cr.PC, it is mentioned that accused had paid 68 instalments of Rs.
CC No.769/2020 SATISH KUMAR SHARMA v. MOHAN SINGH Page no. 19 of 24 Digitally signed by PADMA PADMA LANDOL LANDOL Date:
2023.01.27 16:24:02 +0530 1,300/- per day from 01.12.2019 till 05.03.2020, however, when he was confronted with this fact during his cross-examination, accused took a contrary stand and deposed that he has paid 84 instalments and not 68 instalments. If 68 instalments are the instalments comprising of Rs.1,300/- per day as above- mentioned and accused has repeatedly stated that he had paid 25 instalments of Rs. 1000/- per day, then the total instalments (comprising of Rs. 1000/- per day and Rs. 1300/- per day) is 93 (68+25) and not 84. Alternatively, if the total instalments (comprising of Rs. 1000/- per day and Rs. 1300/- per day) is 84, then the instalments qua Rs. 1300/- per day is 59 (84-25). If accused used to maintain a daily register of instalments as stated by him, he is supposed to know the total instalments paid by him to the complainant.
Furthermore, accused in his applications u/s. 145(2) NI Act and 315 CrPC has submitted that he has already paid Rs. 2,45,100/- to the complainant. Per contra, in his examination-in-chief, he deposed that he has paid a total sum of Rs. 2,48,000/-. Now, considering the possible number of instalments allegedly paid by accused (since there is discrepancy in the figure as already seen), the total amount comes out to be-
1st Possibility 2nd Possibility Considering 25 instalments of Rs. Considering 25 instalments of Rs. 1000 per day and 59 instalments 1000 per day and 84 instalments of of Rs. 1300 per day (84 Rs. 1300 per day instalments in total) •25 x 1000 = 25000 (I) •25 x 1000 = 25000 (I) •59 x 1300= 76,700 (II) •84 x 1300= 1,09,200 (II) •25,200-admittedly received by •25,200-admittedly received by complainant (III) complainant (III) •6500-admittedly received by •6500- admittedly received by complainant (IV) complainant (IV) •1,00,000-allegedly paid by •1,00,000-allegedly paid by accused (V) accused (V) Total(I+II+III+IV+V)=2,33,400/- Total(I+II+III+IV+V)= 2,65,900/-
CC No.769/2020 SATISH KUMAR SHARMA v. MOHAN SINGH Page no. 20 of 24 Digitally signed by PADMA PADMA LANDOL LANDOL Date:
2023.01.27 16:24:08 +0530 Arguendo, even if the entire defence of the accused is believed to be probable, the total amount possibly paid by the accused to the complainant as per accused's own figures should have been either Rs. 2,33,400/- or Rs. 2,65,900/- and not Rs. 2,45,100/- or Rs. 2,48,000/- as claimed by him. This makes the defence of accused highly improbable or unbelievable. Ld. Counsel for the complainant has argued that the number of days from 05.11.2019 to 05.3.2020 is 121, hence the version of 68 instalments or 84 instalments is unbelievable. In the light of above discussion, this argument holds some merit.
IV. Defence of blank documents and misuse of same:
Accused has stated that the promissory note dated 10.07.2020 on the letter head of M/s. Kiran Boutique [Ex. CW-1/C] and the cheque in dispute [Ex. CW-1/D] were given to the accused in blank with only signature. Once a signed cheque is handed over to the Complainant, the authority to fill up the remaining particulars and use the cheque also stands transferred to the holder. In this context, the observations of Hon'ble High Court of Delhi in Hon'ble High Court of Delhi in Ramesh Goyal v. State & Anr. 2017 SCC OnLine Del 8887 to the effect that 'there is no law that a person drawing the cheque must necessarily fill it up on his own hand writing and once the signatures on the cheque are admitted, the liability arising therefrom cannot be evaded on the specious plea that the contents were not filled up by the drawer of the cheque', bears relevance. The Hon'ble Supreme Court in Bir Singh v. Mukesh Kumar (2019) 4 SCC 197 has also held that-
"34. 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."
Furthermore, Section 20 of the NI Act, 1881 also gives holder of a negotiable instrument authority to fill the same.
CC No.769/2020 SATISH KUMAR SHARMA v. MOHAN SINGH Page no. 21 of 24 Digitally signed by PADMA PADMA LANDOL LANDOL Date:
2023.01.27 16:24:14 +0530 With regards to the promissory note, when the signature on the same is admitted there is a natural assumption that a person signing the same have signed the same after reading and understanding the contents, no matter in whose handwriting the same is appearing. Accused has asserted that complainant had taken a blank letter head with only signature, then he ought to have taken some steps to prove the same or at least show a circumstance in which the letter head could be naturally assumed to have been given in blank to the complainant. However, accused has taken no steps in this direction. Moreover, accused could have replied to the legal demand notice and asserted regarding the misuse of the letter head and cheque in dispute but no reply has been given despite receiving the demand notice. Though non-sending of reply per se is not fatal to the defence of the accused, however, it bears some relevance when the defence is otherwise weak or improbable.
V. Defence of Interest on loan:
Accused has stated that when he could not pay the loan amount, complainant threatened him in August 2020 that he would charge an interest of Rs. 500/- per day from the date of initial loan of Rs.1,00,000/-. However, no witness has been examined to prove the same. Even otherwise it is unfathomable to a reasonable mind that on one hand, loan was admittedly a friendly one and on the other hand, a very high interest of Rs. 500/- per day was charged on an alleged loan of Rs.1,30,000/-. It is again improbable why a man whose sole earning is Rs. 1500- 1600 per day would pay an additional interest of Rs. 500/- per day over and above the instalment of Rs. 1300/- per day. He has admittedly not made any complaint in this regard against the complainant. The entirety of the facts goes to show that the defence raised by the accused is highly improbable. The word 'probable' is defined in Black's Law Dictionary as "having the appearance of truth; having the character of probability; appearing to be founded in reason or experience." As already discussed, the defence of the accused suffers from major CC No.769/2020 SATISH KUMAR SHARMA v. MOHAN SINGH Page no. 22 of 24 Digitally signed by PADMA PADMA LANDOL LANDOL Date:
2023.01.27 16:24:21 +0530 inconsistencies and contradictions and it cannot, at all be concluded to have the appearance of truth.
18. Further, the financial capacity of the complainant is not challenged by accused. It is trite law that complainant need not prove his financial capacity unless the same is questioned by accused. Reliance is placed on Tedhi Singh Vs. Narayan Dass Mahant (2022) 6 SCC 735 and APS Forex Services Pvt Ltd vs Shakti International Fashion Linkers & Ors. AIR 2020 SC 945. Ld. counsel for the accused has raised an objection that complainant has not explained the occasions when the subsequent loan of Rs. 3,00,200/- was advanced to the accused. In the opinion of the court, it is not a material defect which goes to the root of the complainant's case, specially when the accused has miserably failed to rebut the presumptions raised against him.
19. It is a settled law that though the degree of burden on the accused to rebut the presumption is only to the extent of preponderance of probability, however, in order to cross this threshold accused has to take some steps which is more that mere averments, however, this has not been done in the present case. The Hon'ble Supreme Court in Rohitbhai Jivanlal Patel (supra) and in various other rulings have time and again, emphasized that though there may not be sufficient negative evidence which could be brought on record by the accused to discharge his burden, yet mere denial would not fulfil the requirements of rebuttal as envisaged under section 118 and 139 of the NI Act. In the case at hand, keeping all the aspects in view, the defence put forth by the accused and rebuttal of presumption raised against him is only a mere denial when tested on the touchstone of preponderance of probability. Further, it has been held in Rajesh Agarwal v. State 2010 SCC OnLine Del 2511 that:
"9. .....There is no presumption that even if an accused fails to bring out his defence, he is still to be considered innocent. If an accused has a defence against dishonour of the cheque in question, it is he alone who CC No.769/2020 SATISH KUMAR SHARMA v. MOHAN SINGH Page no. 23 of 24 Digitally signed by PADMA PADMA LANDOL LANDOL Date:
2023.01.27 16:24:27 +0530 knows the defence and responsibility of spelling out this defence to the court and then proving this defences is on the accused....."
20. In the light of the foregoing discussions, this court is of the firm opinion that the accused has not led any cogent evidence to rebut presumptions under Sec. 118 and 139 of NI Act. There is nothing coming out either in the cross examination of CW-1 or in Defence evidence which would probabilize the defence raised by the accused or falsify the case of the complainant, in fact as already discussed the defence of the accused itself suffers from major inconsistencies. In the above view, the complainant has proved that the accused had issued the cheque in dispute in its favour for discharge of the legally enforceable liability. This Court has no hesitation in holding that in the facts and circumstances of the present case, the complainant has brought home his case proving the complicity of the accused in the offence under Sec. 138 Negotiable Instruments Act. Resultantly, the accused Mohan Singh is, thus, held guilty and stands convicted for the said offence.
Announced in Open Court today on 27.01.2023.
Digitally signed by PADMA PADMA LANDOL
LANDOL Date:
2023.01.27
16:24:33 +0530
(PADMA LANDOL)
MM (NI Act) Digital Court-03
New Delhi, PHC/Delhi/27.01.2023.
Certified that this judgment contains 24 pages and each page bears my signatures.
Digitally signed by PADMA PADMA LANDOL
LANDOL Date:
2023.01.27
16:24:39 +0530
(PADMA LANDOL)
MM (NI Act) Digital Court-03
New Delhi, PHC/Delhi/27.01.2023.
CC No.769/2020 SATISH KUMAR SHARMA v. MOHAN SINGH Page no. 24 of 24