Delhi District Court
Anil Singhal vs Surender Singh on 28 November, 2014
Criminal Appeal No. 24/14 D.O.D.: 28.11.2014
IN THE COURT OF SHRI VIDYA PRAKASH: ADDL. SESSIONS
JUDGE04 (NORTH): ROHINI COURTS: DELHI
Criminal Appeal No. 24/14
Unique Case ID: 02404R0310442014
Anil Singhal
S/o Late Sh Satya Prakash Singhal
R/o F22/140, 3rd Floor,
Sector3, Rohini, Delhi.
...Appellant
Versus
Surender Singh
S/o Sh Shish Pal Singh,
R/o H.No. G6/323,
Sector16, Rohini,
Delhi.
...Respondent
Date of Institution : 29.09.2014
Date on which Order was reserved: 07.11.2014
Date on which Order pronounced : 28.11.2014
JUDGMENT:
The present appeal is directed against the judgment dt. 29.08.14 whereby appellant/accused was convicted for offence U/s 138 N.I Act and against order on sentence dt. 06.09.14 whereby he has been sentenced to undergo SI imprisonment of six months besides fine amount of Rs. 4,10,000/ and in default of payment of fine to further undergo SI for a period of three Anil Singhal Vs. Surender Singh Page 1 of 16 Criminal Appeal No. 24/14 D.O.D.: 28.11.2014 months, passed by Ld MM Rohini Court, Delhi.
In short, the respondent herein (hereinafter referred to as the complainant for the sake of convenience) filed complaint case bearing CC no. 329/1/13 titled as Surender Singh Vs. Anil Singhal against appellant(herein after referred to as the accused for the sake of convenience) for prosecuting him in respect of offence U/s 138 N.I Act on the allegations that he had advanced friendly loan of Rs. 3,00,000/(Rupees Three Lacs only) to accused in June 2010 and the said loan was repayable within a period of one month. However, the accused failed to repay the loan amount even after expiry of one month and instead, issued cheque no. 359531 dt. 15.07.10 of Rs. 3,00,000/ drawn of ING Vaisya Bank Ltd Rohini (hereinafter called the cheque in question). The said cheque got dishonoured on its presentation vide returning memo dt. 26.10.10 with remarks "Insufficient Funds" by the bankers of accused on which complainant got issued legal notice dt. 03.11.10 but still, accused failed to make the payment and consequently, the prosecution was instituted against him before the Court of law.
Before Ld Trial Court, the accused was served with notice U/s 251 Cr.PC on 09.05.12. On the same day, application U/s 145 (2) N.I Act moved by accused was also allowed. Accordingly, complainant entered into witness box as CW1 and was also cross examined on behalf of accused. Then statement U/s 313 Cr.PC of accused was also recorded by Ld MM on 17.01.13. Thereafter, the application U/s 315 Cr.PC moved by accused was allowed and Anil Singhal Vs. Surender Singh Page 2 of 16 Criminal Appeal No. 24/14 D.O.D.: 28.11.2014 he examined himself as DW2 besides examining another witness i.e DW1 namely Inspector Sanjeev Kumar the then SHO PS KNK Marg.
After hearing both the sides and purusing the material available on record, Ld MM has been pleased to convict the accused for offence U/s 138 N.I Act as he arrived at the conclusion that complainant had been successful in establishing the guilt of accused beyond reasonable doubt.
I have already heard Ld counsel Sh. Devender Hora Adv on behalf of appellant/convict/accused and Ld counsel Sh. R.K Verma Adv on behalf of respondent/complainant. I have also gone through the material available on record as well as the authorities cited at the bar.
The submissions made on behalf of appellant/convict through his Ld counsel are two fold. The first limb of argument raised by Ld counsel of accused is that complainant failed to prove the service of legal notice dt. 03.11.10 upon accused before filing the complaint case and since service of notice was sine qua non for instituting complaint for an offence U/s 138 N.I Act, the complaint was not maintainable under the law.
Per contra, Ld counsel of complainant argued that service of legal notice has been duly proved in the present case. In this regard, he also referred to the relevant part of the testimony of complaint i.e CW1 namely Surender Singh as also to the copy of legal notice dt. 03.11.10 Ex CW1/C, postal receipt Ex CW1/D and UPC Ex CW1/E available in trial Court record.
I have considered the rival submissions made on behalf of both the sides on the issue of service of legal notice and have also gone through the Anil Singhal Vs. Surender Singh Page 3 of 16 Criminal Appeal No. 24/14 D.O.D.: 28.11.2014 material available on record. The complainant has specifically averred in para 8 of the complaint case that he got issued legal notice dt. 03.11.10 through his counsel upon accused by way of registered AD post and UPC. Not only this, he also placed copy of said legal notice alongwith original postal receipt and UPC on record. He also proved the said documents as Ex CW1/C to Ex CW1/E respectively. The accused did not dispute the service of legal notice in his reply to notice U/s 251 Cr.PC served upon him on 09.05.12. Not even a suggestion has been given during cross examination of complainant from the side of accused that no such legal notice was received by him. It is nowhere the defence of accused that his address as mentioned in the memo of parties as also in the copy of legal notice Ex CW1/C placed on record, is not his residential address or that he never resided at the said address. Moreover, trial Court record shows that warrants issued against him by Ld MM in this very case for 04.09.13, were reported to have been duly executed by concerned police official at the given address. Not only this, said NBW bearing report of Process Server namely HC Surender Kumar no. 414/OD of PS KNK Marg, was also exhibited as Ex DW2/AC during cross examination of accused as DW2 from the side of complainant.
In view of the aforesaid facts and circumstances, presumption as contained in Section 27 of General Clauses Act that legal notice bearing correct and complete address of the addressee which has been sent through UPC and registered AD post, would have been duly served upon the accused, has been rightly invoked in favour of the complainant by Ld trial Court.
Ld MM has properly dealt with the issue of service of notice in Anil Singhal Vs. Surender Singh Page 4 of 16 Criminal Appeal No. 24/14 D.O.D.: 28.11.2014 para7 of impugned judgment and has given cogent reasons in support of his conclusion that legal notice Ex CW1/C was shown to have been served upon the accused before filing the complaint case.
The second limb of argument raised by Ld counsel of accused is that complainant could not establish that there was any legally enforceable debt. In order to buttress the said submission, he vehemently argued that complainant did not place on record any document which may have been executed at the time of advancing loan amount; it is not believable that any person who did not ever visit the house of accused, would advance huge loan amount of Rs. 3,00,000/ in cash without execution of any document; the complainant failed to mention in the complaint case that this was the second occasion when he had again advanced loan of Rs. 3,00,000/ to accused in the month of June 2010 as he failed to disclose the factum of advancing similar loan to accused in the month of May 2010. For the said purpose, he also referred to the relevant portion of cross examination of complainant wherein he admitted that he did not get any document executed at the time of advancing friendly loan; his annual income was about Rs. 2,00,000/ and he was not on visiting terms with the accused. He also pointed out that signature appearing on cheque in question is in Hindi whereas the contents of the cheque in question are in different ink and in different handwriting. He also pointed out that accused is totally illiterate and cannot read or write English language and all these facts and circumstances clearly disprove the case of complainant but still Ld MM failed to appreciate the said facts and convicted the accused in this case. He therefore, urged that the impugned judgment is Anil Singhal Vs. Surender Singh Page 5 of 16 Criminal Appeal No. 24/14 D.O.D.: 28.11.2014 liable to be set aside and accused is liable to be acquitted. In support of his submissions, Ld counsel of accused also placed reliance upon the following authorities:
1. In the matter titled as "Kulvinder Singh Vs. Kafeel Ahmed" reported at 2013 (1) DCR 417.
2. In the matter titled as " K. Prakashan Vs. P.K Surenderan" reported at (2008)1 Supreme Court Cases 258.
3. In the matter titled as " Vipul Kumar Gupta Vs. Vipin Gupta" reported at 2012(4) JCC(NI) 248.
4. In the matter titled as " John K. Abraham Vs. Simon C. Abraham & Anr." reported at 2014(1) C.C. Cases(SC) 161.
5. In the matter titled as " Krishna Janardhan Bhat Vs. Dattatraya G. Hegde" reported at 2008 Crl.L.J 1172.
On the other hand, Ld counsel of complainant supported the impugned judgment by arguing that there is no illegality or infirmity therein as Ld MM has passed the said judgment after proper appreciation of facts and after applying correct law to the facts of the case while convicting the accused for offence U/s 138 N.I Act. In order to buttress his submission, he heavily relied upon presumption provided in Section 118 and Section 139 of N.I Act. He argued that defence raised by accused that cheque in question was one of the cheque stolen from his house, could not be proved by him. He also contended that accused failed to summon any handwriting expert during defence evidence in order to show that handwriting appearing on cheque in Anil Singhal Vs. Surender Singh Page 6 of 16 Criminal Appeal No. 24/14 D.O.D.: 28.11.2014 question was of some other person. He also referred to the relevant portion of cross examination of accused i.e DW2 wherein he admitted that he had taken loan from various people of Sector 16 and 17, Rohini, Delhi. He therefore, urged that the impugned judgment does not call for any interference by this Court in exercise of appellate jurisdiction and appeal is liable to be dismissed.
It goes without saying that one of the most essential ingredients of Section 138 N.I Act is that there must be a legally enforceable debt. The complainant is required to prove his case beyond reasonable doubt against the accused whereas the accused is only required to prove his defence on the basis of preponderance of probabilities. The probable defence taken by him may be proved either during cross examination of complainant's witnesses and/or by adducing his own evidence towards DE. Still if any authority is required then reference with advantage can be made to the matter titled as "Kamala S. v. Vidhyadharan M.J" reported at 2 (2007) 5 SCC 264. In para17 of the said judgment, it has been observed as under: "xxxxxxx
17. This Court clearly laid down the law that standard of proof in discharge of the burden in terms of Section 139 of the Act being of preponderance of a probability, the inference therefore can be drawn not only from the materials brought on record but also from the reference to the circumstances upon which the accused relies upon. Categorically stating that the burden of proof on the accused is not as high as that of the prosecution. xxxxxxx"
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Criminal Appeal No. 24/14 D.O.D.: 28.11.2014 In order to appreciate the contentions raised by Ld counsel of complainant that there is a presumption in favour of complainant that the cheque in question has been issued against legally enforceable debt, it is appropriate to refer to the provision contained in Section 139 N.I Act which reads as under: " 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".
The careful perusal of above mentioned provision clearly shows that it merely raises a presumption as regards the fact that cheque has been issued in discharge of any debt or other liability and not beyond that. In other words, the provision contained in Section 139 N.I Act does not raise presumption that the cheque in question is issued against legally enforceable debt. Thus, the complainant is still required to show that the cheque in question has been issued against legally recoverable debt. While saying so, I am also fortified by the judgment of Hon'ble Apex Court in the matter of "
Krishna Janardhan Bhatt Vs. Dattatraya G. Hedge" reported in 2008(4) SCC 54 wherein the Hon'ble Apex Court has also expressed a word of caution by stating that the Courts must be on guard to see that merely on the application of presumption as provided in section 139 N.I Act, same may not lead to injustice or mistaken conviction.
In view of the aforesaid discussion, Court does not agree with the Anil Singhal Vs. Surender Singh Page 8 of 16 Criminal Appeal No. 24/14 D.O.D.: 28.11.2014 submission made by counsel of complainant that it has to be presumed that the cheque in question was issued against legally enforceable debt by pressing into service the provision contained in Section 139 N.I Act.
Moreover, the presumptions attached with negotiable instruments like cheque as provided U/s 118 and 139 of the Act that every negotiable instrument was made or drawn for consideration and that holder of the cheque received the cheque, for the discharge of, whole or part of any debt or liability, are rebuttable in nature. Still if any authority is required then reference with advantage can be made to judgment of Apex Court in M/s. Kumar Exports v. M/s. Sharma Carpets, 2009 AIR(SC) 1518 wherein Hon'ble Supreme Court held in para 11 as under: Para 11. " The use of the phrase "until the contrary is proved"
in Section 118 of the Act and use of the words "unless the contrary is proved"
in Section 139 of the Act read with definitions of "may presume" and "shall presume" as given in Section 4 of the Evidence Act, makes it at once clear that presumptions to be raised under both the provisions are rebuttable. When a presumption is rebuttable, it only points out that the party on whom lies the duty of going forward with evidence, on the fact presumed and when that party has produced evidence fairly and reasonably tending to show that the real fact is not as presumed, the purpose of the presumption is over. The accused in a trial under Section 138 of the Act has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case the nonexistence of consideration and debt is so Anil Singhal Vs. Surender Singh Page 9 of 16 Criminal Appeal No. 24/14 D.O.D.: 28.11.2014 probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the Court need not insist in every case that the accused should disprove the nonexistence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the Court may either believe that the consideration and debt did not exist or their nonexistence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on to the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section in 114 of the Evidence Act to Anil Singhal Vs. Surender Singh Page 10 of 16 Criminal Appeal No. 24/14 D.O.D.: 28.11.2014 rebut the presumptions arising under Sections 118 and 139 of the Act. The accused has also an option to prove the nonexistence of consideration and debt or liability either by letting in evidence or in some clear and exceptional cases, from the case set out by the complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial. Once such rebuttal evidence is adduced and accepted by the Court, having regard to all the circumstances of the case and the preponderance of probabilities, the evidential burden shifts back to the complainant and, thereafter, the presumptions under Sections 118 and 139 of the Act will not again come to the complainant's rescue".
In another case titled as Bharat Barrel and Drum Manufacturing Company Vs. Amin Chand Payrelal reported at AIR 1999(SC) 1008, Hon'ble Apex Court in para 12 has held that:
" the defendant can prove the nonexistence of consideration by raising a probable defence. If the defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the plaintiff who will be obliged to prove it as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument. The burden upon the defendant of proving the nonexistence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies......"
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Criminal Appeal No. 24/14 D.O.D.: 28.11.2014 Now, it is to be seen as to whether the complainant has been able to prove that the cheque in question was issued against legally enforceable debt or not. It is also to be determined as to whether the accused has rebutted the presumptions contained in Section 118(a) and 139 of N.I Act or not. In this regard, the relevant portion of cross examination of complainant as CW1 wherein he claimed that he was an income tax assessee and his annual income was approximately Rs. 2,00,000/ (Rupees Two Lacs), assumes importance.
It is pertinent to note that complainant nowhere disclosed the exact date when he had advanced friendly loan of Rs. 3,00,000/ to the accused. The conduct of complainant in not obtaining any receipt against loan amount from accused further casts doubt upon the story as put forward by him that he had advanced friendly loan to the accused. Complainant as CW1 himself admitted during cross examination that no agreement was executed at the time of advancing loan amount to the accused. It is also relevant to note that complainant claimed to have advanced friendly loan to the accused for a period of one month but cat came out of the bag when he admitted during cross examination that he was not on visiting terms with the accused and he had never seen the house of accused. It has also come on record during cross examination of complainant that he did not have any shop/office in Delhi and he used to work in NCR area whereas the accused is claimed to be having his offices/shop in Sector 16, Rohini. It has not been explained as to how the complainant and accused became friends of each other. In this backdrop, it becomes highly improbable that any person who has not even seen the house of accused, would advance such a huge amount of Rs. 3,00,000/ in cash to the Anil Singhal Vs. Surender Singh Page 12 of 16 Criminal Appeal No. 24/14 D.O.D.: 28.11.2014 accused without execution of any receipt or document.
Moreover, complainant is not shown to have disclosed the loan transaction, in his income tax return. He has also nowhere disclosed the source through which such huge amount of Rs. 3,00,000/ was arranged/generated which he advanced to the accused. Further more, the payment of a sum of Rs. 3,00,000/ in cash by complainant to the accused as alleged in this case, was also in violation of Section 269 of Income Tax Act.
At this juncture, it is useful to refer to the relevant case law on the point in issue. In the matter titled as " Sanjay Mishra Vs. Kanishka Kapoor @ Nicky and Anr." reported in 2009(3) Civil Court Cases 563(Bombay), almost similar facts were involved as the complainant therein also alleged to have extended financial help to the accused but did not disclose the said transaction in Income Tax Return. It was held by Bombay High Court that since the said transaction was in respect of an unaccounted amount, it cannot be said to be legally enforceable debt and consequently, upheld the order of acquittal passed by Trial Court in the said matter.
In another matter titled as " Rose Mariya Fernandez (Mrs.) Vs. Ms. Naso N. Kepkar" reported in 2010 II AD(Crl.)(Bombay) 177, after considering the inconsistencies and contradictions occurring in the evidence of complainant including the fact that complainant admitted during her evidence that various amounts were paid by her son, daughter and daughter in law and also the fact that date of loan was not mentioned by complainant, it was held that doubt is created on the theory of loan transaction propounded by Anil Singhal Vs. Surender Singh Page 13 of 16 Criminal Appeal No. 24/14 D.O.D.: 28.11.2014 complainant and consequently, the High Court upheld the order of acquittal passed by Trial Court in the said matter.
In the matter titled as "Kulvinder Singh Vs. Kafeel Ahmed"
reported at 2013 (1) DCR 417, it was alleged by complainant that he had advanced loan of Rs. 9,30,000/ in the first instance to the accused and in this backdrop, it has been held by our own High Court that if such a huge amount of money is advanced as a loan to the accused, the complainant ought to have shown to the Court as to the source from where he had generated such a huge amount.
The facts of the present case are also covered by the aforesaid judgment as in the present case also, complainant has admitted during cross examination that no agreement was executed at the time of advancing huge loan amount of Rs. 3,00,000/ to the accused and he was having annual income of Rs. 2,00,000/ during the relevant period. He also admitted during cross examination that he was not on visiting terms with the accused.
Moreover, the perusal of cheque in question Ex CW1/A would show that signature and the amount of cheque as mentioned in cheque in words are in different handwriting and rest of the contents thereof are in different handwriting. The complainant has deposed during cross examination as CW1 that the contents of the cheque were already filled up when it was handed over to him but he expressed his ignorance by deposing that he did not know that the cheque in question was only signed by the accused. He also could not say if the cheque in question was filled up in different ink.
Anil Singhal Vs. Surender Singh Page 14 of 16
Criminal Appeal No. 24/14 D.O.D.: 28.11.2014 In somewhat similar facts and circumstances, it has been held by Hon'ble High Court of Delhi in the judgment titled as " Vipul Kumar Gupta Vs. Vipin Gupta" reported at 2012(4) JCC(NI) 248 that non mentioning by appellant/complainant in his income tax return or the books of account, the factum of loan having been given by him, non mention of the date, time or year when loan was sought or given and the cheque being written with two different inks as signature appearing in one ink while remaining portion filled up in cheque found in different ink, prove the defence of respondent/accused to be plausible to the effect that he had issued said cheque by way of security. In para9 of the said judgment, it was further held by Hon'ble High Court as under: " 9. xxxxxx The respondent/accused has only to create doubt in the version of the appellant as the appellant has to prove the guilt of the accused beyond reasonable doubt which, in my opinion, he has failed miserably. xxxxxx"
Similar view has been taken by Hon'ble Apex Court in the recent decision delivered in the matter of " K. Subramani Vs. K. Damodara Naidu passed in Criminal Appeal No. 2402 of 2014 decided on 13.11.14 wherein also facts were more or less similar as complainant had failed to prove the source of income through which he was in a position to advance loan of Rs. 14,00,000/ to the accused. It was held by Hon'ble Apex Court that the complainant failed to prove that there was legally recoverable debt payable by accused to him and consequently, Hon'ble Apex Court upheld the judgment of Anil Singhal Vs. Surender Singh Page 15 of 16 Criminal Appeal No. 24/14 D.O.D.: 28.11.2014 acquittal passed by trial Court while setting aside the judgment passed by Hon'ble High Court of Karnataka.
In view of the above mentioned reasons and the authorities on the point in issue, this Court is of the view that complainant had failed to prove beyond reasonable doubt that the cheque in question was issued by accused towards discharge of legal enforceable debt or liability. The approach adopted by Ld MM in convicting the accused or arriving at the conclusion that complainant had been able to establish his case for offence U/s 138 N.I Act against accused/appellant beyond reasonable doubt, thus suffers from material illegality and is, therefore, liable to be set aside.
Resultantly, the present appeal is accepted and the impugned judgment dt. 29.08.14 convicting the appellant for the offence U/s 138 N.I Act and order on sentence dt. 06.09.14 passed by Ld Trial Court, are hereby set aside. Consequently, the complaint case bearing C.C no. 329/1/13 filed by respondent/complainant against appellant/accused stands dismissed. Appellant who is in custody, is directed to be released forthwith if not required in any other case. TCR be sent back alongwith copy of this judgment. Appeal file be consigned to Record Room.
Announced in open Court today
on 28.11.2014 (Vidya Prakash)
Additional Sessions Judge04 (North)
Rohini Courts, Delhi
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