Delhi District Court
Mahesg Aggarwal vs M/S Seven Engineering Projects (P) Ltd. ... on 5 September, 2012
IN THE COURT OF SH. RAKESH KUMAR SINGH:
METROPOLITAN MEGISTRATE (NI ACT)-1, CENTRAL:
ROOM NO.-42, TIS HAZARI COURT COMPLEX, DELHI
05.09.2012
Mahesg Aggarwal vs M/s Seven Engineering Projects (p) Ltd. CC No. 2733/10
JUDGMENT u/s 264 Cr.PC.
The case is based upon four dishonoured cheques of Rs.50,000/- each received in purported
discharge of part liability arising out of goods supplied to the accused. Proceeding has been
conducted as per guidelines laid down by Hon'ble High Court of Delhi in Rajesh Agarwal v State
& Another 171(2010) DLT 51 and Gurpreet Singh vs M/S Ranbaxy Laboratories Ltd. & ...Crl.
M.C. 429 of 2009 on 2 August, 2010. The accused taken a defence that business with the
complainant was terminated with final transaction on 04.07.2007 wherein Rs.25,000/- was paid to
the complainant as full and final settlement. The complainant in the cross-examination denied any
full and final settlement but accepted that he had received Rs.25,000/, however, in part discharge of
liability.
Complainant has never disclosed the source of liability. He only stated in the legal demand
notice, complaint and affidavit that accused had issued these four cheques towards part payment of
goods supplied. However, he never stated as to on which date goods were supplied and in what
manner and further for what amount the goods were supplied. Even complainant has not provided
total outstanding against the accused. Even in cross-examination he accepted that he is having no
knowledge about the total amount of transaction. These are primarily serious lapses on the part of
the complainant. The story set up by the complainant appears to be vague. Hon'ble High Court of
Delhi had reversed a concurrent conviction in Pine Product Industries And Anr. vs R.P. Gupta
And Sons And Anr. II (2007) BC 20. It was observed and held therein as under:
"12. In the present case, I find that the petitioner despite opportunities granted to him,
did not lead any defense evidence. An application under Section 311 of the Code had
been moved before the trial court but the same had been rejected. So, we are left with
only the evidence led by the complainant. If the petitioner is yet able to show from
the evidence on record that the presumption is rebutted then the complainant must be
able to establish from the evidence on record itself that a case under Section 138 is
clearly made out. The petitioner has been able to show that a contemporaneous reply
given by him on 04.02.2000 raised issues with regard to the manner and circumstance
under which the complainant came in possession of the cheque in question. However,
Mahesg Aggarwal vs M/s Seven Engineering Projects (p) Ltd. CC No. 2733/10 1
despite being aware of these issues, when the complaint was filed by the complainant,
as rightly pointed out by the learned Counsel for the petitioner, the same was
significantly vague and bereft of any details. The first paragraph of the complaint
which has been extracted above clearly refers to "discharge liabilities of repayments
of the amounts". The expression used in the complaint is that the cheque was given in
discharge of liabilities of repayments of the "amounts". Meaning thereby that several
amounts were paid by the complainant to the petitioner and it is in discharge of the
liabilities of repayments, in part, of such amounts that the cheque was given.
Unfortunately, the evidence on record and that too of PW1 himself is at variance with
this statement. Despite the contradiction which has been pointed out and the shifting
stands taken by the PW1 in his testimony, even if it is presumed that an "advance" of
Rs. 5 lakhs was paid by the complainant to the petitioner, the same has been indicated
to have been paid in one go and therefore, the expression "amounts" appearing in the
complaint would be at variance with the evidence led by PW1. Apart from this, there
is no mention in the complaint as to when the "amounts" were or amount was paid.
What was the rate of interest, what was the extent of the goods which were supplied
and adjusted against the payment. Further more, in the testimony of PW1, it is not
indicated as to when the said advance of Rs. 5 lakhs was made, on which date the
goods were received, what was the rate of interest. From which date the interest was
to be computed and how was the figure of Rs. 2.96 lakhs representing the principal
amount computed. Nor is there any computation of the interest element of the
difference between Rs. 3.15 lakhs and Rs. 2.96 lakhs indicated. All these details are
conspicuously absent. The petitioner has been convicted and sentenced on the vague
and bland allegation that cheque of Rs. 3,15,000/- had been issued by the petitioner in
discharge of liabilities of repayments of amounts taken by him. This is the only
statement contained in the complaint and no further details are forthcoming even in
the evidence led by the complainant.
13. In these circumstances, I hold that the courts below have grossly erred in law in
concluding that the petitioner was unable to rebut the presumption raised under
Section 139. Since, the conviction and sentence have been raised merely on the
petitioner's alleged inability to rebut the presumption and there is nothing available on
record to establish the complainant's case, I am of the view that the petitioner is
entitled to acquittal. The impugned order is set aside. The petitioner is acquitted. The
petitioner is in custody. He is directed to be released forthwith."
It is the claim of the accused that on the final settlement the complainant was to return all
the three cheques but did not return the same despite receiving the settlement amount of Rs.25,000/-
and later on misuse of the cheques for filing the present complaint. He has also relied upon Mark-X
which is a photocopy of purported undertaking given by the complainant. The complainant has
already denied issuance of any such receipt and that signature of any of his employee thereon.
Mahesg Aggarwal vs M/s Seven Engineering Projects (p) Ltd. CC No. 2733/10 2
However, I consider that non disclosure by the complainant in respect of receiving of Rs.25,000/- is
itself going against him. The receipt is purportedly based upon the receiving of Rs.25,000/-. Such
receiving being accepted by the complainant in his cross-examination is also raising an inference
that the consequential part of the receipt is also not wrong.
Even further it is an admitted position that the said amount was received on 04.07.2007
whereas the entire criminal proceeding has been initiated in the year 2008 after exchange of several
letters between the parties containing allegations and counter allegations.
On the one hand, complainant has not disclosed the date of business, date of liability, date of
issuance of cheques, total liability etc. On the other hand, accused has claimed that the last
transaction with the complainant was on 02.07.2007 and that final settlement was completed on
04.07.2007. Complainant has never tried to cross-examine the accused on the point of termination
of business relation in the year 2007.
It goes without saying that a skillful cross examiner must hear the statements in chief
examination with attention, and when his turn comes, he should interrogate the witness on all
material points that go against him. If omits or ignores then they may be taken as an acceptance of
the truth of that part of witness evidence.
In Babu Lal Vs. Caltax (India Ltd.) A 1967 C 2005 it was ruled:
"generally speaking, when cross examining, a party's counsel should put
to each of his opponents witness in turn, so much of his case as concerns
the particular witness or in which he had a share............if asks no
questions, he will be taken to accept the witness account."
In case titled, "Satyender Kumar Sharma Vs. Jitender Kudsia" 2005 DLT 498 Hon'ble
Delhi High Court while referring to Section 138 Evidence Act qua cross examination ruled:
"If a witness is not cross examined on a particular point , the opposite
party must be deemed to have accepted truth of the statement."
In such circumstances, closure of the business in the year 2007 has to be believed. Now if
we accept the closure of business in the year 2007, we have to believe that there was no transaction
Mahesg Aggarwal vs M/s Seven Engineering Projects (p) Ltd. CC No. 2733/10 3
between the parties in the year 2008. Moreover, complainant has not disclosed date of business,
date of supply of goods, total outstanding amount/liability in his complaint or his affidavit or in his
legal demand notice. Even he has concealed factum of receiving of Rs.25,000/- from the accused.
As such complainant cannot be believed.
Both the parties have filed copies of certain letters written to each other containing
allegations and counter allegations. Those seem to be civil disputes between the parties. In the
circumstances of the case, no opinion is required to be expressed on such allegations and counter
allegation which taken place before the issuance of legal demand notice by the complainant.
However, it is pertinent to note that against the legal demand notice of the complainant accused had
also given the reply and exhibited the same as Mark-DW1/5 together with AD Card, letter to post
master, reply from post office showing delivered status (all photocopies running into 5 pages). In
this reply, accused denied all the allegations of complainant available in legal demand notice and
reiterated the factum of settlement. The complainant did not cross-examine the accused in respect of
this reply sent by the accused. As per discussion above, the complainant has to be deemed to have
been accepted the receiving of reply from the accused. This non disclosure by the complainant is
also going against him.
It is well settled law that if complainant does not approach the court with clean hands, he
should be denied the relief sought by him.
In the present case as discussed above, complainant has concealed material facts from the
court and has not been able to stand on its legs.
There are certain inconsistencies even in the defence evidence such as the debit notes which
are showing different amounts despite the fact that admittedly they are for the same
transaction/purpose. For this complainant may be having recourse available in law which he may
take but the same or some inconsistencies in defence evidence cannot give him a right to claim that
his case should be treated as established. (it is well settled law that maxing, "falsus in uno falsus in
omnibus" has no application in India).
It is well settled law that the accused to prove his innocence is not required to establish the
factum beyond all reasonable doubts. He can always prove his innocence by the preponderance of
probabilities. Mandatory presumptions of law do not relieve the prosecution from establishing the
Mahesg Aggarwal vs M/s Seven Engineering Projects (p) Ltd. CC No. 2733/10 4
foundational facts. It is a cardinal principle of criminal jurisprudence that the Prosecution
(Complainant) has to stand on its own leg. The burden is so heavy that no blemishes in the story of
the accused can give a right to the complainant to claim that his version should be preferred,
whereas the burden on the accused is slightly light as he has to discharge the burden by
preponderance of probabilities. The accused can always rely upon the material and circumstances
brought on record by the complainant. If the material and circumstances available on record in its
entirety suggest the existence of any circumstance which is contrary to the stand of the Prosecution
(Complainant), the prosecution has to fail and the accused has to be given benefit of doubt. (see It
is further well settled law that even if two view are possible, the court should adopt the view which
does not interfere in the life and liberty of any person. (See a constitution bench judgment of
Hon'ble Supreme Court in Sharad Birdhi Chand Sarda vs State Of Maharashtra 1984 AIR
1622 ).
Having heard both the Ld. counsels and having gone through the entire record, I am of the
opinion that the complainant can not succeed.
Nature and extent of rebuttal:
2. A three judges bench of Hon'ble Supreme Court while dealing with Prevention of
Corruption Act has observed in respect of presumptions of law in Trilok Chand Jain vs State Of
Delhi 1977 AIR 666 as under:
"The presumption however, is not absolute. It is rebuttable. The accused can
prove the contrary. The quantum and the nature of proof required to displace
this presumption may vary according to the circumstances of each case. Such
proof may partake the shape of defence evidence led by the accused, or it
may consist of circumstances appearing in the prosecution evidence itself, as
a result of cross-examination or otherwise. But the degree and the character
of the burden of proof which s. 4(1) casts on an accused person to rebut the
presumption raised thereunder, cannot be equated with the degree and
character of proof which under s. 101, Evidence Act rests on the prosecution.
While the mere plausibility of an explanation given by the accused in his
examination under s. 342, Cr.P.C. may not be enough, the burden on him
to negate the presumption may stand discharged, if the effect of the
material brought on the record, in its totality, renders the existence of the
fact presumed, improbable. In other words, the accused may rebut the
presumption by showing a mere preponderance of probability in his favour; it
Mahesg Aggarwal vs M/s Seven Engineering Projects (p) Ltd. CC No. 2733/10 5
is not necessary for him lo establish his case beyond a reasonable doubt-
see Mahesh Prasad Gupta v. State of Rajasthan (1). Another aspect of the
matter which has to be borne in mind is that the sole purpose of the
presumption under s. 4(1) is to relieve the prosecution of the burden of
proving a fact which is an essential ingredient of the offences under s. S (1)
(2) of the Prevention of Corruption Act and s. 161, Penal Code. The
presumption therefore can be used in furtherance of the prosecution case
and not in derogation of it. If the story set up by the prosecution
inherently militates against or is inconsistent with the fact presumed, the
presumption will be rendered sterile from its very inception, if out of
judicial courtesy it cannot be rejected out of hand as still born."
2.1. Hon'ble Supreme Court in Kamala S vs Vidyadharan M.J. & Anr Appeal (crl.) 233 of
2007, decided on 20.02.2007 has observed as under:
"15. The Act contains provisions raising presumption as regards the negotiable
instruments under Section 118(a) of the Act as also under Section 139 thereof. The
said presumptions are rebuttable ones. Whether presumption stood rebutted or not
would depend upon the facts and circumstances of each case.
16. The nature and extent of such presumption came up for consideration before
this Court in M.S. Narayana Menon Alias Mani V. State of Kerala and Anr. [(2006) 6
SCC 39] wherein it was held :
"30. Applying the said definitions of "proved" or "disproved" to the
principle behind Section 118(a) of the Act, the court shall presume a
negotiable instrument to be for consideration unless and until after
considering the matter before it, it either believes that the consideration
does not exist or considers the non-existence of the consideration so
probable that a prudent man ought, under the circumstances of the
particular case, to act upon the supposition that the consideration dos
not exist. For rebutting such presumption, what is needed is to raise a
probable defence. Even for the said purpose, the evidence adduced on
behalf of the complainant could be relied upon."
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 therefor 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 accused is
not as high as that of the prosecution, it was held;
Mahesg Aggarwal vs M/s Seven Engineering Projects (p) Ltd. CC No. 2733/10 6
"33. Presumption drawn under a statute has only an evidentiary value.
Presumptions are raised in terms of the Evidence Act. Presumption
drawn in respect of one fact may be an evidence even for the purpose of
drawing presumption under another."
It was further observed that ;
" 38. If for the purpose of a civil litigation, the defendant may not
adduce any evidence to discharge the initial burden placed on him, a
"fortiori" even an accused need not enter into the witness box and
examine other witnesses in support of his defence. He, it will bear
repetition to state, need not disprove the prosecution case in its entirety
as has been held by the High Court.
39. A presumption is a legal or factual assumption drawn from the
existence of certain facts."
2.2. Hon'ble Supreme Court in Krishna Janardhan Bhat v. Dattatraya G. Hegde 2008 AIR
SCW 738 has observed that:
"30. The proviso appended to the said section provides for compliance with legal
requirements before a complaint petition can be acted upon by a court of law.
Section 139 of the Act merely raises a presumption in regard to the second aspect
of the matter. Existence of legally recoverable debt is not a matter of presumption
under Section 139 of the Act. It merely raises a presumption in favour of a holder
of the cheque that the same has been issued for discharge of any debt or other
liability.
31.The courts below, as noticed herein before, proceeded on the basis that Section
139 raises a presumption in regard to existence of a debt also. The courts below,
in our opinion, committed a serious error in proceeding on the basis that for
proving the defence the accused is required to step into the witness box and
unless he does so he would not be discharging his burden. Such an approach
on the part of the courts, we feel, is not correct.
32. An accused for discharging the burden of proof placed upon him under a
statute need not examine himself. He may discharge his burden on the basis of the
materials already brought on record. An accused has a constitutional right to
maintain silence. Standard of proof on the part of the accused and that of the
prosecution in a criminal case is different.
... ....
34. Furthermore, whereas prosecution must prove the guilt of an accused beyond
all reasonable doubt, the standard of proof so as to prove a defence on the part of
Mahesg Aggarwal vs M/s Seven Engineering Projects (p) Ltd. CC No. 2733/10 7
the accused is 'preponderance of probabilities'. 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 he relies.
......
45. We are not oblivious of the fact that the said provision has been inserted to regulate the growing business, trade, commerce and industrial activities of the country and the strict liability to promote greater vigilance in financial matters and to safeguard the faith of the creditor in the drawer of the cheque which is essential to the economic life of a developing country like India. This however, shall not mean that the courts shall put a blind eye to the ground realities. Statute mandates raising of presumption but it stops at that. It does not say how presumption drawn should be held to have been rebutted. Other important principles of legal jurisprudence, namely, presumption of innocence as a human right and the doctrine of reverse burden introduced by Section139 should be delicately balanced. Such balancing acts, indisputably would largely depend upon the factual matrix of each case, the materials brought on record and having regard to legal principles governing the same."
It may be pertinent to mention here that a three judges bench of the Hon'ble Supreme Court in Rangappa Vs. S. Mohan decided on 07.05.2010 has considered the dictum of Krishna Janardhan Bhat (supra) and overruled the view so far as existence of liability is concerned, however, has not dissented with other parameters observed and laid down in the said case. It has been observed therein that:
"14. In light of these extracts, we are in agreement with the respondent-claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat (supra) may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. "
2.3 In the facts and circumstances of the present case, if we make a fine balance between the two propositions i.e. reverse onus and presumption of innocence, it can be safely held that accused has successfully probabilised his defence by showing that the non-existence of debt or liability and consideration is probable or its non existence is so probable that a prudent man would under the circumstances act upon the supposition that it did not exist.
2.4. I am of the opinion that an accused has a right to rebut the presumption by placing reliance Mahesg Aggarwal vs M/s Seven Engineering Projects (p) Ltd. CC No. 2733/10 8 upon the circumstances brought and material placed by the complainant. Hon'ble Supreme Court in Rangappa Vs. S. Mohan decided on 07.05.2010 has further held that:
"However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused/defendant cannot be expected to discharge an unduly high standard or proof. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of 'preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own."
Conclusion:
3. I am of the opinion that the above attending circumstances are sufficient to displace the burden of proof which is somewhat lighter on accused. The law regarding the degree of proof required from the accused to prove his defence is well settled. The accused is required only to prove by preponderance of probabilities that the defence bears ring of truth. The accused is not required to prove his defence beyond reasonable realm of doubt as is required to be done by the prosecution. Accused has created a reasonable doubt in respect of existence of liability and consideration. Complainant failed to discharge the sifted burden. In such circumstances, prosecution has to fail.
4. I accordingly return a finding of not guilty against the accused.
5. Accused company and accused Sandeep Gaddh are acquitted from the charges in the present complaint case i.e. for offence U/s 138 NI Act.
6. A copy of this order be placed on the official website of the District Court.
(Rakesh Kumar Singh) MM(NI Act)-01, Central 05.09.2012 Mahesg Aggarwal vs M/s Seven Engineering Projects (p) Ltd. CC No. 2733/10 9