Delhi District Court
Raj Bala vs . Baby Devi on 5 August, 2023
THE COURT OF SH. ABHINAV SINGH, MM (N.I. ACT)-
04, NEW DELHI DISTRICT, ROUSE AVENUE
COURTS COMPLEX, NEW DELHI
Raj Bala vs. Baby Devi
CC No. 7111-2018
U/s 138 Negotiable Instruments Act, 1881
1. CIS number : DLND02000048-2018
2. Name of the complainant : Raj Bala,
W/o Sh. Raj Kumar, Chauhan
Maholla, Rangpuri, New Delhi-
110037
3. Name of the accused, : Baby Devi,
parentage & residential W/o Sh. Rajan, R/o Flat No.3,
address Galaxy Apartment, New BJP
Office & telco, Rangpuri, New
Delhi-110037
4. Offence complained of or : U/s 138 of Negotiable
proved Instruments Act, 1881
5. Plea of the accused : Pleaded not guilty and claimed
trial.
6. Final Judgment/order : Convicted
7. Date of judgment/order : 05.08.2023
Date of Institution: 29-01-2018
Date of Reserving Judgment/Order: 22-07-2023
Date of Pronouncement of Judgment/Order: 05-08-2023
Raj Bala vs. Baby Devi
CC No. 7111-2018 Page 1 of 14
JUDGMENT
1. By way of the present Judgment, this court shall dispose of the present complaint filed by the complainant Ms. Raj Bala (hereinafter referred to as 'complainant') against Ms. Baby Devi (hereinafter referred as the 'accused') u/s 138 of Negotiable Instruments Act, 1881 r/w Section 142 of Negotiable Instruments Act, 1881 (hereinafter referred to as 'NI Act' in short).
Brief facts:
2. The case of the complainant, shorn of unnecessary details is that the accused is known to the complainant being a neighbor and the complainant had visiting terms with the accused. The accused allegedly approached the complainant in the month of April 2017 and requested for some funds to meet some urgent requirements. Considering their relationship and the trust, the complainant and advanced a sum of Rs. 1,70,000/- to the accused. The accused promised to repay the loan amount within one to two months.
After the expiry of two months, the complainant asked for the repayment of the loan amount but the accused did not make the payment and deferred the same one pretext or the other.
2.1 It is further submitted that after repeated pursuance of the complainant, the accused handed over the following cheques towards the discharge of her liabilities:
Raj Bala vs. Baby Devi CC No. 7111-2018 Page 2 of 14 Serial No. Cheque Amount Date
1. 893587 Rs. 1,00,000/- 23.10.2017
2. 893556 Rs. 70,000/- 23.10.2017 2.2. Upon being presented for encashment by the complainant with her banker, the aforesaid cheques were returned as dishonored on 25.10.2017 with remarks "Funds Insufficient". Thereafter, upon the assurance of the accused, the complainant again presented the cheque for encashment however the cheques got dishonored again. Finally, upon the repeated assurance of the accused, the complainant again presented the cheques for encashment however the same got dishonored again with remarks "Insufficient funds" vide two separate returning memos dated 06.11.2017.
2.3. Thereafter, the complainant got served legal demand notice dated 23.11.2017 to the accused by way of registered post demanding the payment of the cheque amount. It is alleged that despite service of legal demand notice, accused did not make any payment to discharge her liability.
Consequently, the present complaint has been preferred by the complainant against the accused.
Proceedings before the Court:
3. On the basis of complaint and pre-summoning evidence tendered by the complainant, cognizance of the offence U/s 138 NI Act was taken by Ld. Predecessor of this Court and process was issued against the accused on 02.01.2018.
3.1. The notice of substance of accusation u/s 251 of the Code of Criminal Procedure, 1973 (hereinafter "CrPC") was Raj Bala vs. Baby Devi CC No. 7111-2018 Page 3 of 14 given to the accused on 29.09.2018 to which accused pleaded not guilty and claimed trial. Application u/s 145(2) NI Act was moved by the accused, arguments were heard upon the application and the accused was allowed to cross examine the complainant on the basis of defense disclosed in Notice u/s 251 CrPC. CE was led and closed on 03.12.2022.
3.2. Thereafter, statement of the accused u/s 313 CrPC was recorded on 03.12.2022 wherein the accused, inter alia, admitted her signatures on the cheques in question and stated that the cheques in question were never issued to discharge any liability. The accused also denied the transaction of loan.
3.3. Further, during the course of CE, the accused also recorded her statement before the court wherein the accused undertook to pay Rs. 1,70,,000/- to the complainant by way of equal monthly installments of Rs. 10,000/- each. Later, the accused resiled from her statement and did not make any payment.
3.4. Later, defence evidence was led on behalf of accused wherein the accused examined herself as DW1. DE stood closed on 24.06.2023. Accordingly, the matter was listed for final arguments. Final arguments were heard on behalf of both the parties.
Evidence led in the matter.
4. In the present case, the complainant examined herself as CW1 vide affidavit Ex. PW1/A and relied upon the Raj Bala vs. Baby Devi CC No. 7111-2018 Page 4 of 14 following documents in order to prove essential ingredients of Section 138 NI Act:
1. Ex. PW1/1 (Colly): Cheques in question dated 23.10.2017,
2. Ex. PW1/2 (Colly): Returning memos dated 25.10.2017,
3. Ex. PW1/3 (Colly): Returning memos dated 27.10.2017,
4. Ex. CW1/4 (Colly): Returning memos dated 06.11.2017,
5. Ex. CW1/5 (Colly): Legal demand notice, courier receipts and original postal receipts.
Apart from the above, the complainnat also relied upon Ex.PW1/X1 i.e., the Original Bank Passbook of PNB belonging to the complainant.
CW1 was duly cross-examined on behalf of the accused and was discharged.
No other witness was examined on behalf of complainant and CE was closed on 03.12.2022.
4.1. The accused examined herself as DW1 and was duly cross examined on behalf of the complainant. DE stood closed on 24.06.2023.
Reasons for Decision:
5. For deciding the present case, it is essential to lay down the ingredients of the offence under Section 138 NI Act which are as follows:
(a) A person must have drawn a cheque on an account maintained by him in a bank.
Raj Bala vs. Baby Devi CC No. 7111-2018 Page 5 of 14
(b) The cheque must be drawn for payment of certain amount of money to another person to discharge in whole or in part, any legally enforceable debt or other liability.
(c) The cheque has been presented to the bank and is returned unpaid by the bank either due to insufficiency of funds or it exceeds the amount arranged to be paid from that account by an agreement made with that bank.
(d) 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 cheque within stipulated period.
(e) The drawer fails to make payment within stipulated time after the receipt of the said notice. [Reference:
Kusum Inglots & Alloys Ltd & Ors v. K Pennar Peterson Securities Ltd and Ors (2000) 2 SCC 745].
6. Further, a negotiable instrument including a cheque carries presumption of consideration in terms of Section 118(a) and presumption of existence of liability under Section 139 of the Act.
7.1. Section 118 Clause (a) of Negotiable Instruments Act reads as under:-
Raj Bala vs. Baby Devi CC No. 7111-2018 Page 6 of 14 "That every negotiable instrument was made or drawn for consideration and that every such instrument when it has been accepted, endorsed, negotiated or transferred was accepted, endorsed, negotiated or transferred for consideration".
7.2. Section 139 of the Negotiable Instruments Act reads as under:-
"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, or any debt or other liability."
8. The combined effect of Section 118(a) and Section 139 of NI Act is that it raises a presumption in favour of the holder of the cheque that he has received the same for discharge in whole or in part of any debt or other liability. In Rangappa V. Sri Mohan, (2010) 11 SCC 441, a three-judge bench observed that, Section 139 of the NI Act is stated to be an example of a reverse onus clause which is in tune with the legislative intent of improving the credibility of negotiable instruments. The Hon'ble Supreme Court observed that a reverse onus clause requires the accused to raise a probable defence or creating doubt about the existence of a legally enforceable debt or liability for thwarting the prosecution. The standard of proof for doing so would necessarily be based on "preponderance of probabilities" and not "beyond shadow of any doubt."
9. In the present case, the accused has admitted her signatures on cheques in question Ex.CW1/1 (Colly), and has Raj Bala vs. Baby Devi CC No. 7111-2018 Page 7 of 14 also admitted her address on the legal demand notice, at the time of statement of accused u/s 313 CrPC. Hence, the presumption under sections 118 and 139 of the NI Act would operate against the accused as has been held by the Hon'ble Supreme Court in the case of M/S Kalamani Tex vs P. Balasubramanian (2021) 5 SCC 283. The relevant portion is reproduced below: -
"The Statute mandates that once the signature(s) of an accused on the cheque/negotiable instrument are established, then the 'reverse onus' clauses become operative. In such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him. Now it is upon the accused to rebut the presumption u/s 139 of NI Act by raising a probable defence in his favour on a scale of preponderance of probabilities."
9.1. Thus, in view of the above legal position, the burden was upon the accused to rebut the legal presumption that had been imposed upon him. In this regard, the Hon'ble Supreme Court in Kumar Exports v. Sharma Carpets (2009) 2 SCC 513 held: -
"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 presumptions shifted to the complainant. To disprove 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 non-existence was so probable that a prudent man Raj Bala vs. Baby Devi CC No. 7111-2018 Page 8 of 14 would under the circumstances of the case, act upon the plea that they did not exist."
10. Thus, it is well established that to rebut the presumption raised against the accused, it is not imperative for the accused to lead direct/definite evidence, even by relying on the facts and circumstances of the case as well as upon the flaws in evidence of the complainant, such presumption can be rebutted.
11. In the instant case, in order to rebut the presumption against her, the accused has taken the following substantial defenses:
(a) that the cheques in question were issued as security cheques;
(b) that the complainant did not have the financial capacity to advance the alleged loan amount to the accused.
11.1. As far as the question of security cheque is concerned, it is no longer res- integra that liability can be fastened upon the accused even if the cheques in question were issued as security cheques. In this regard, it is apposite to mention the judgments of V.S. Yadav v. Reena CRL. A. NO. 1136 Of 2010 wherein it was held that:
"Mere pleading not guilty and stating that the cheques were issued as security, would not give amount to rebutting the presumption raised under Section 139 of N.I. Act. If mere statement under Section 313 Cr. P.C. or under Section 281 Cr. P.C. of accused of pleading not guilty was Raj Bala vs. Baby Devi CC No. 7111-2018 Page 9 of 14 sufficient to rebut the entire evidence produced by the complainant/ prosecution, then every accused has to be acquitted. But, it is not the law. In order to rebut the pre sumption under Section 139 of N.I. Act, the accused, by cogent evidence, has to prove the circumstance under which cheques were issued."
11.2. In the instant matter, the accused has stated in her examination in chief that the complainant used to conduct a committee of which the accused was a subscriber. It is further stated that the accused had given two blank cheques to the complainant as security. Except for the bald assertions, the accused has not filed on record anything to prove that the complainant used to conduct a committee and the accused was a subscriber. No other witness has been examined by the accused to corroborate the fact of committee being run by the complainant.
Further, the accused has stated at the time of framing of notice u/s 251 CrPC that the cheques were given as security for the committee. Later, at the time of statement u/s 313 CrPC, the accused has stated that the cheques in question were given as security for one person namely Mr. Ramesh. Thus, the accused has made inconsistent statements before the court which makes the testimony of the accused highly unreliable and difficult to be relied upon. Moreover, in the cross examination of the complainant conducted on 26.06.2019, only a suggestion was put regarding the committee which was denied by the complainant. Nothing else which could be adverse or fatal to the case of the complainant has been elicited in the cross examination of the complainant. Moreover, the accused failed to Raj Bala vs. Baby Devi CC No. 7111-2018 Page 10 of 14 rebut the stand of the complainant by way of cogent defense evidence.
Thus, in view of the settled legal position, the accused has failed to show the circumstances under which the cheques in question were given as security cheques and has failed to prove that there was no legally enforceable debt or liability on the date of the cheques. Thus, the accused has miserably failed to prove her first defense.
12. The accused has further disputed the financial capacity of the complainant to advance the alleged loan. The attention of this court has been drawn by the accused to the cross examination conducted on 26.06.2019 where questions regarding the financial capacity have been put to the complainant. The complainant, in order to prove her financial capacity, has placed on record her Bank A/c Passbook Ex. PW1/X-1 where the entries dated 15.03.2017 and 22.03.2017 show that the complainant withdrew Rs. 2 lakhs from her account. As per the version of the complainant, the alleged loan was advanced in the month of April 2017. Further, a perusal of the remaining entries and the bank balance at the relevant time, substantiates that the complainant had the financial capacity to advance the alleged loan to the accused. Further, in the cross examination conducted on 03.12.2022, the complainant has explained in detail the source of the funds from which the alleged loan amount was advanced to the accused. The accused has miserably failed to disprove the statements of the complainant by way of her own evidence or by adducing any other proof.
Raj Bala vs. Baby Devi CC No. 7111-2018 Page 11 of 14 Thus, the defense of financial incapacity of the complainant to advance the alleged loan transaction does not hold any water.
The accused has argued that in the Legal Demand Notice Ex. PW1/5, the complainant has mentioned the repayment duration as two to three months whereas in the affidavit of evidence, the loan duration has been mentioned as one to two months. It is further argued that in her cross examination dated 03.12.2022, the complainant stated that the loan amount was given to the accused in presence of the husband of the complainant but the complainant has not examined her husband as a witness. It is further argued that although the complainant stated that the loan was given for the urgent requirements of the accused but the requirements have not been specified. It is also argued that the complainant has not proved any document with regard to payment in cash, of the loan amount, to the accused.
12.1. It is imperative to note that the contradictions that have been pointed are minor contradictions in the testimony of the complainant and are not so fatal as to throw out the case of the complainant completely. Moreover, the court must also not lose sight of the fact that the complainant is also armed with the benefit of the presumptions u/s 118 (a) and Section 139 of the NI Act. It was upon the accused to discharge the burden imposed by the provisions of the Act.
Conclusion
13. Signatures on the cheques in question were Raj Bala vs. Baby Devi CC No. 7111-2018 Page 12 of 14 admitted by the accused and therefore, presumption u/s 118 NI Act of consideration and Section 139 NI Act of existence of legal liability is raised against the accused. It was then incumbent upon the accused to rebut the presumption raised in favour of complainant either by leading direct evidence or by showing circumstances in the case of complainant which makes the story of complainant unbelievable for a reasonable man. However, the accused has miserably failed to prove the defense, and further failed to show any contradiction or discrepancy so fatal to the case of complainant that presumption raised against it stands rebutted.
14. What is imperative for the purpose of rebutting the presumption u/s 139 NI Act, as per the defence of the accused, is that on the date of issuance of cheques there should not be any outstanding legal liability towards the complainant. The nature of liability has already been put forth by the complainant. Nothing substantial to controvert the nature of liability has been proffered by the accused company. There is a presumption under Section 139 of the NI Act that there exists a legally enforceable liability.
Final Order
15. It is true that for offence U/s 138 NI Act the accused is not expected to prove her defence beyond reasonable doubt in order to rebut the statutory presumption. However, in the instant case the accused has miserably failed to discharge the onus of proving her defence even on the basis of preponderance of Raj Bala vs. Baby Devi CC No. 7111-2018 Page 13 of 14 probabilities. Accordingly, the accused Baby Devi W/o Sh. Rajan stands convicted for offence under section 138 NI Act.
Bail Bond in compliance of Section 437-A CrPC furnished today.
A copy of this judgment be uploaded on the official website of the District Court.
Announced in open court today i.e., 05.08.2023. (This judgment contains 14 pages. Each page has been signed by me).
(ABHINAV SINGH) MM:RACC:ND DELHI Raj Bala vs. Baby Devi CC No. 7111-2018 Page 14 of 14