Delhi District Court
Cc No.6406/2020 Suresh Siwas vs . Kamaljit Singh Page No. 1/14 on 9 September, 2022
IN THE COURT OF MS. SONIKA, M.M. 05, N.I. ACT, SOUTH
DISTRICT, SAKET, NEW DELHI
C.C. No.6406/2020
PS: Neb Sarai
Suresh Siwas
S/o Sh. Om Prakash,
R/o H.No. 630, Village Devli,
New Delhi-110080.
...Complainant
Versus
Kamaljit Singh
S/o Sh.Surjit Singh,
R/o H. No.D-135, Top Floor,
Krishna Park, Devli Road,
Khanpur, New Delhi-110080
...Accused
Date of Institution : 04.12.2020
Offence complained of : 138 NI Act
Date of final arguments : 31.08.2022
Date of decision : 09.09.2022 SONIKA
Plea of guilt : Not guilty
Digitally signed
by SONIKA
Decision : Acquittal
Date: 2022.09.09
15:01:12 +0530
BRIEF FACTS AND REASONS FOR DECISION OF THE CASE
1. Vide this judgment, this Court shall dispose off the present complaint case instituted by the Complainant invoking the provisions of Section 138 of the Negotiable Instruments Act, 1881(hereinafter referred to as "NI Act").
2. The facts giving rise to the instant complaint case, as per the complainant, may be enumerated as hereafter: the complainant and accused CC NO.6406/2020 Suresh Siwas Vs. Kamaljit Singh PAGE NO. 1/14 having been residing in the same locality are known to each other for long time. On various occasions, from July 2016 till May, 2019, accused had borrowed a total sum of Rs.15,00,000/- in cash from the complainant as friendly loan with assurance to repay the entire amount in June, 2019 as the accused was going to sell his one plot of land. On 13.06.2019, the accused had executed an undertaking/acknowledgement that he will repay the friendly loan on or before 01.06.2020. Thereon, the accused had issued one post dated cheque bearing no.000006 dated 01.06.2020 for an amount of Rs.15,00,000/- drawn on Kotak Mahindra Bank, Branch Saket, New Delhi, in favour of complainant (hereinafter referred to as "cheque in question") in discharge of his liability with assurance of its encashment. However, the same was dishonoured due to reason 'drawer's signature differs' vide bank returning memo dated 29.08.2020. The complainant sent legal demand notice dated 19.09.2020 to the accused, despite which the accused failed to repay the amount. Thus, the complainant was constrained to institute the present complaint case against the accused. On 26.10.2020, the complainant lost his Aadhar card, photocopy of the Aadhar card of the accused, original cheque return memo and an online Information Report was submitted with Delhi Police in this regard.
3. Upon appreciation of pre-summoning evidence affidavit, accused was summoned for an offence punishable under Section 138 of NI Act. Notice under Section 251, Code of Criminal Procedure, 1973 (herein after referred to as Cr.P.C.) was served upon accused on 05.10.2021 to which he pleaded not guilty and claimed trial. On the same day, the statement of the accused under Section 294 Cr.PC was recorded, wherein, he had admitted his signatures on the cheque in question. He further admitted the undertaking/acknowledgment (Mark-A), however, he submitted that the same was signed under threat. He further denied the receipt of legal demand notice. At the time of notice under Section 251 Cr.PC., the accused had stated that he and the complainant had invested some money with one person namely Sh. Tilak Raj who had left Digitally signed by SONIKA SONIKA Date:
2022.09.09 CC NO.6406/2020 Suresh Siwas Vs. Kamaljit Singh 15:01:21 PAGE NO. 2/14 +0530 Delhi. He further stated that thereafter, the complainant had approached him and threatened that he had acted as mediator in the transaction, so he had to repay the money to the complainant. He further stated that cheque in question was handed over to the complainant under threat only, as the complainant had forced him to give the cheque in question. He further denied any liability towards the complainant.
4. Thereafter, vide order dated 05.10.2021, on oral request, the plea of accused under Section 145(2) NI Act was allowed and the accused was granted an opportunity to cross examine the complainant as well as his witnesses, if any.
5. During CE, the complainant examined two witnesses i.e. himself as CW-
1 and bank official from Union Bank of India as CW-2 and they were duly cross examined at length by the Ld. Counsel for accused. The Complainant (CW-1) adopted his pre-summoning evidence by way of affidavit (Ex. CW- 1/A) and relied upon the documents which were exhibited and marked as:
undertaking/acknowledgment as Ex.CW-1/1 (the same was marked as Mark- A at the time of recording of statement of accused under section 294 Cr.P.C.), cheque in question as Ex.CW-1/2, the copy of bank return memo dated 29.08.2020 as Mark-B, Information report dated 26.10.2020, P.S. Crime Branch as Ex.CW-1/3, Legal demand notice dated 19.09.2020 as Ex.CW-1/4, Postal and courier Receipts as Ex.CW-1/5, tracking report as Ex.CW-1/6 and the present complaint as Ex. CW-1/7. During his examination in chief, CW-2 had placed his authority letter and the same was exhibited as Ex. CW-2/1, the account statement of account maintained jointly by Ms. Babita and the complainant for the period from 29.08.2020 to 29.08.2020 and the same was exhibited as CW-2/2 and confirmation records of the joint account bearing no.677802010008399 and the same was exhibited as Ex.CW-2/3. CE was closed vide order dated 14.12.2021.
6. Accused was, thereafter, examined U/s 281 r/w Sec 313 Cr.P.C. on 05.03.2022, wherein entire incriminating evidence was put to him. During Digitally signed by SONIKA SONIKA Date:
CC NO.6406/2020 Suresh Siwas Vs. Kamaljit Singh 2022.09.09 PAGE NO. 3/14 15:01:28 +0530 examination, he stated that he and complainant had invested some money with some person namely Tilak Raj, however, Sh. Tilak Raj ran out of Delhi and thereafter, the complainant used to threaten him to repay the money which he had invested with Sh. Tilak Raj. He further stated that in the year 2019, one day the complainant had come in front of his house and started harassing him and thereafter, the complainant took him to the Saket court and pressurized him to hand over the cheque in question and signed some papers. He further stated that the cheque in question was duly filled by him and he had handed over the cheque in question and signed the papers including the undertaking filed alongwith the present complaint under pressure / force used by the complainant. He further denied any liability towards the complainant. Since the accused choose to lead evidence, the matter was fixed for defence evidence.
7. The accused examined only one witness i.e. himself as DW-1 and he was duly cross-examined in length by the ld. Counsel for complainant. During his examination in chief, the accused had placed on record print out of whatsapp messages alongwith certificate under Section 65-B of Indian Evidence Act and the same was exhibited as Ex.DW-1/1. During cross-examination, DW-1 has placed on record his salary proof till May, 2018 as Ex.DW-1/X1, documents pertaining to property bearing no.989, first floor, flat no.2, Baba Mohalla, Aya Nagar as Ex.DW-1/X2 and certificate pertaining to flat no.991, Baba Mohalla, Aya Nagar as Ex.DW-1/X3. The defence evidence was closed on 04.08.2022 and the matter was fixed for final arguments.
8. I have considered the rival submissions of the parties and perused the entire evidence led by the parties and the material available on record.
9. During the course of final arguments, Ld. Counsel for complainant argued that there exists legally enforceable liability in favour of the complainant on behalf of the accused and the same is evident from the acknowledgement/ undertaking (Ex. CW-1/1). He further argued that the cheque in question was Digitally signed by SONIKA SONIKA Date:
2022.09.09 CC NO.6406/2020 Suresh Siwas Vs. Kamaljit Singh 15:01:36 PAGE NO. 4/14 +0530 issued to the complainant and the signature has been admitted by the accused. He further argued that upon presentation, the cheque has been dishonored and the same has been proved by the cheque return memo and the bank account statement of the complainant. Further, he argued that the demand notice was duly served upon the accused. He further argued that the complainant did not receive any payment after service of legal notice. Ld. Counsel for complainant submitted that all the ingredients of Section 138 NI Act are fulfilled and the accused should be convicted. In support of his contentions, Ld. Counsel for complainant relied upon the Judgment passed by Hon'ble Supreme Court in the case titled as C.C.Alavi Haji vs. Palapetty Muhammed, 2007 (6) SCC 555 and by Ld. MM, Dwarka Court in Ravinder vs. Narender Sharma, CC No. 1/40.
10. Per contra, ld. Counsel for accused argued that there is no legally enforceable debt/liability in favour of the complainant as the cheque in question was issued by the accused under coercion and thereat and not voluntarily. He further argued that the financial capacity of the complainant is also disputed. He further argued that the alleged advancement of loan is illegal as the accused have not mentioned the same in his ITR. He further argued that the complainant had violated the provision of Income Tax Act as the alleged loan was advanced in cash. He further argued that the demand notice was never received by the accused as the same was sent on incorrect address. He prayed that the accused be acquitted of the offence. In support of his contentions, Ld. Counsel for accused has placed reliance upon the judgments passed by Hon'ble Superior courts in cases titled as "Sanjay Mishra Vs, Kanishka Kapoor @ Nikki & Anr." (2009) 5 Bom CR 464 and "M. D Thomas Vs. P. S. Jaleel & Anr." (2009) 14 SCC 398.
11. In the backdrop of the foregoing factual score, this Court shall now proceed to examine the position of law governing the facts peculiar to the present case.
12. The following ingredients must be satisfied in order to bring home the Digitally signed by SONIKA SONIKA Date:
CC NO.6406/2020 Suresh Siwas Vs. Kamaljit Singh 2022.09.09 15:01:44 PAGE NO. 5/14 +0530 guilt of a person accused for the commission of an offence punishable under Section 138 of NI Act, which has also been observed by the Hon'ble Supreme Court of India in the matter of Jugesh Sehgal Vs. Shamsher Singh Gogi, (2009) 14 SCC 683:
"9. It is manifest that to constitute an offence under Section 138 of the Act, the following ingredients are required to be fulfilled:
(i) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account;
(ii) the cheque should have been issued for the discharge, in whole or in part, of any debt or other liability;
(iii) that 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;
(iv) that cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the 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 the bank;
(v) the payee or the holder in due course of the cheque 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 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(vi) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice"
The abovementioned proposition of law was reiterated by the Hon'ble Digitally signed by SONIKA SONIKA Date:
2022.09.09 15:01:52 CC NO.6406/2020 Suresh Siwas Vs. Kamaljit Singh +0530 PAGE NO. 6/14 Supreme Court in the matter of Aparna A. Shah v M/s Sheth Developers P. Ltd & Anr. (2013)8 SCC 71.
13. It is a well settled principle of criminal jurisprudence that a criminal trial precedes on the presumption of innocence of the accused i.e. an accused is presumed to be innocent unless proved guilty. Thus, normally the initial burden is on the complainant/ prosecution to prove the guilt of the accused and the standard of proof for the same is beyond reasonable doubt. However, in offences under Section 138 NI Act, there is a reverse onus clause, which is contained in Sections 118 and 139 of the Act.
Section 118 of the N.I Act provides:
"Presumptions as to negotiable instruments: Until the contrary is proved, the following presumptions shall be made:
(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;"
Section 139 of the N.I Act further provides as follows:
"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".
14. Once the foundational facts that the cheque in question bears the signatures of the accused and the same has been drawn on account maintained by him are established, a factual base is established to invoke the presumption of cheque having being issued in discharge of a legally recoverable debt and drawn for good consideration by virtue of Section 118(a) r/w Section 139 of NI Act. It is a mandatory presumption, though the accused is entitled to rebut Digitally the said presumption. signed by SONIKA SONIKA Date:
2022.09.09 15:02:00 +0530 CC NO.6406/2020 Suresh Siwas Vs. Kamaljit Singh PAGE NO. 7/14
15. In case of Kumar Exports vs. Sharma Carpets,(2009) 2 SCC 513, the Hon'ble Supreme Court had held:-
"The accused under Section 138 NI Act has two options. He can either show that the consideration and debt did not exist or that under the particular circumstances of the case, the non existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumption, an accused is not expected to prove his defence beyond reasonable doubt as it 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 non existence 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 his 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 there non existence was so probably that a prudent man 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 the circumstantial evidence and if the circumstances so relied upon are so compelling, the burden may likewise shift again on the Digitally signed by SONIKA SONIKA Date:
2022.09.09 CC NO.6406/2020 Suresh Siwas Vs. Kamaljit Singh 15:02:08 PAGE NO. 8/14 +0530 complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arises under Section 118 and 139 of NI Act".
16. The principles pertaining to the presumptions and the onus of proof were recently summarized by the Hon'ble Apex Court in Basalingappa vs. Mudibasappa (2019) 5 SCC 418 as under:
"25. We having noticed the ratio laid down by this Court in the above cases on Section 118(a) and 139, we now summarise the principles enumerated by this Court in the following manner:
25.1. Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.
25.2. The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
25.3. To rebut the presumption, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence.
Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.
25.4. That it is not necessary for the accused to come in the witness box in support of his defence. Section 139 imposed an evidentiary burden and not a persuasive burden.
25.5. It is not necessary for the accused to come in the witness box Digitally to support his defence." signed by SONIKA SONIKA Date:
2022.09.09 15:02:16 +0530 CC NO.6406/2020 Suresh Siwas Vs. Kamaljit Singh PAGE NO. 9/14
17. As discussed above, it is clear that the accused need not discharge burden of proof beyond the shadow of reasonable doubt rather needs to prove his defence upon preponderance of probabilities. Accused can say that the version brought forth by the complainant is inherently unbelievable and therefore, the prosecution cannot stand or the accused can give his version of the story and say that on the basis of his version, the story of the complainant cannot be believed. In the first situation, the accused has nothing to do except to point inherent inconsistencies in the version of the complainant.
18. So far as the factum of liability is concerned, in view of the mandatory presumptions of law as discussed above, if an accepted signed cheque has been produced the complainant, then there cannot be any inherent lacuna in the existence of the liability. Recently, the Hon'ble Supreme Court in Kalamani Tex & Anr. v. P. Balasubramanian (2021 SCC Online SC 75) held as follows:
"14. Adverting to the case in hand, we find on a plain reading of its judgment that the trial Court completely overlooked the provisions and failed to appreciate the statutory presumption drawn under Section 118 and Section 139 of NIA. The Statute mandates that once the signature(s) of an accused on the cheque/negotiable instrument are established, then these 'reverse onus' clauses become operative. In such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him."
But then, definitely, accused can create some loopholes in the story of the complainant. Accused can discharge his burden by demonstrating the preponderance of probabilities.
19. Further, it is trite law that while deciding a complaint U/s 138 NI Act, the Court has to firstly see whether the Complainant has successfully established the ingredients constituting the offence under the said section. The ingredients of Section 138 NI Act which are required to be established by the Digitally signed by SONIKA SONIKA Date:
2022.09.09 15:02:25 CC NO.6406/2020 Suresh Siwas Vs. Kamaljit Singh +0530 PAGE NO. 10/14 Complainant have been set out by the Hon'ble SC in Jugesh Sehgal (Supra). Once these ingredients are established by the Complainant and the Accused admits the issuance of the cheque/his signatures, the presumption U/s 118 (a) and 139 of the NI Act arise.
20. One of the key ingredients is that the " payee or holder in due course of the cheque makes a demand for the payment of said amount of money by giving a notice in writing, to the drawer of the cheque ". It is trite law that when the notice is sent by registered post by correctly addressing the drawer of the cheque, the mandatory requirement of issuance of notice in terms of clause (b) of proviso to Section 138 of the NI Act stands complied with. At this juncture, reliance is placed upon the judgment passed by Hon'ble Supreme Court in the case of C.C.Alavi Haji vs. Palapetty Muhammed, 2007 (6) SCC 555 wherein it has been held that:
"15. Insofar as the question of disclosure of necessary particulars with regard to the issue of notice in terms of proviso (b) of Section 138 of the Act, in order to enable the Court to draw presumption or inference either under Section 27 of the G.C. Act or Section 114 of the Evidence Act, is concerned, there is no material difference between the two provisions. In our opinion, therefore, when the notice is sent by registered post by correctly addressing the drawer of the cheque, the mandatory requirement of issue of notice in terms of Clause (b) of proviso to Section 138 of the Act stands complied with. It is needless to emphasise that the complaint must contain basic facts regarding the mode and manner of the issuance of notice to the drawer of the cheque. It is well settled that at the time of taking cognizance of the complaint under Section 138 of the Act, the Court is required to be prima facie satisfied that a case under the said Section is made out and the aforenoted mandatory statutory procedural requirements have been complied with. It is then for the drawer to rebut the presumption about the service of notice and Digitally signed by SONIKA SONIKA Date:
2022.09.09 CC NO.6406/2020 Suresh Siwas Vs. Kamaljit Singh 15:02:33 PAGE NO. 11/14 +0530 show that he had no knowledge that the notice was brought to his address or that the address mentioned on the cover was incorrect or that the letter was never tendered or that the report of the postman was incorrect. In our opinion, this interpretation of the provision would effectuate the object and purpose for which proviso to Section 138 was enacted, namely, to avoid unnecessary hardship to an honest drawer of a cheque and to provide him an opportunity to make amends."
21. Further, the Hon'ble High Court of Delhi in R.L. Varma & Sons vs. PC Sharma, 2019 SCC OnLine Del 8964 has observed as follows:
"22.Legal presumption of service of notice can only arise in case the notice is correctly addressed. If the notice is incorrectly addressed no legal presumption can arise..."
"24. Section 138 of the Negotiable Instruments Act mandates the issuance of the statutory notice as a pre-condition to filing of a complaint. The cause of action to file a complaint under section 138 of the Negotiable Instruments Act arises only on issuance and service of statutory notice and failure of the accused to comply with the statutory notice. In the absence of service of statutory notice the cause of action would not accrue. Service of statutory notice would also include legal presumption of service if circumstances so warrant."
"34. Since the pre-condition of filing a complaint under section 138 of the Negotiable Instruments Act of sending a statutory notice has not been satisfied in the present case, no cause of action arose in favour of the complainant to file the subject complaint. Since no cause of action arose, the petitioner could not have instituted the complaint nor could the trial court as well as the appellate court by the impugned order have convicted the petitioner." Digitally signed by SONIKA SONIKA Date:
2022.09.09 15:02:41 +0530 CC NO.6406/2020 Suresh Siwas Vs. Kamaljit Singh PAGE NO. 12/14
22. Accordingly, if the legal demand notice bears the incorrect address of the Accused, no presumption under Section 27 of the General Clause Act, 1897 can be drawn and the requirement of sending a legal demand notice will stand unfulfilled.
23. In the present case, the Accused at the stage of framing of notice under Section 251 Cr.P.C, in his statement under Section 294 Cr.P.C and in his examination in chief had stated that he had not received the legal demand notice. During his cross-examination, the accused (DW-1) volunteered that in September 2020, he was not residing at 135, top floor, Krishna Park i.e. the address on which the demand notice was addressed. It is noteworthy that he demand notice is dated 19.09.2020. It is also noteworthy that the tracking report (Ex. CW-1/6), shows that the demand notice was duly served, but the same nowhere suggests that it was served upon the accused. Here, it is pertinent to note that as per the complainant, he and the accused were residing in the same locality and during his cross-examination the complainant (CW-1) had admitted that he was having the knowledge that the accused was not residing at the address, at which demand notice was addressed, since 2018 and he was aware of this fact in 2020 also. Here, for easy reference, the relevant extract of the cross examination is reproduced:
"...It is correct that I have the knowledge that the accused is not residing at D-135, Top Floor, Krishna Park, Devli Road, Khanpur, New Delhi-80 since 2018. (Voltd. I have got the knowledge about this fact after 6-7 months from his shifting). It is correct that in the year 2020, I was aware about this fact. It is wrong to suggest that I have sent the demand notice Ex.CW-1/4 on incorrect address intentionally."
24. Perusal of the record further reveals that the accused had entered into his appearance on service of summons through electronic mode only. Thus, it is evident from the above stated facts that the demand notice was sent on an incorrect address and the complainant was fully aware that the accused was Digitally signed by SONIKA SONIKA Date:
CC NO.6406/2020 Suresh Siwas Vs. Kamaljit Singh 2022.09.09 PAGE NO. 13/14 15:02:48 +0530 not residing at that address, when the demand notice was sent.
25. Since, Section 138 NI Act is a technical offence, all ingredients as mentioned in Jugesh Sehgal (Supra) must be established for the accrual of cause of action in favour of the Complainant. In view of the above detailed discussion, the Complainant has failed to establish the essential ingredients of Section 138 of NI Act, therefore, the liability under section 138 NI cannot be attracted.
26. Since the Complainant has failed to discharge his initial burden under Section 138 NI Act, there is no requirement to delve into further evidence in the present case. Thus, in view of the totality of the circumstance and the settled legal positions as discussed above, the case attempted to be built by the complainant, appears to be suffering from fatal infirmities so much so, it goes directly to the root of the case and shakes the very edifice on which the case of the complainant rests.
27. Accordingly, in light of the above discussion, the accused Kamaljit Singh stands acquitted of the offence under Section 138 of NI Act.
Digitally signed by SONIKA SONIKA Date:
2022.09.09
15:02:58
ANNOUNCED IN THE (SONIKA)
+0530
COURT ON 09.09.2022 MM-05/NI ACT/SOUTH/SAKET
NEW DELHI
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