Delhi District Court
Rangappa vs Sri Mohan (2010) 11 Scc 441 And Also In ... on 20 May, 2023
IN THE COURT OF MS. PADMA LANDOL,
METROPOLITAN MAGISTRATE, NI ACT DIGITAL COURT- 03, NEW
DELHI DISTRICT, PATIALA HOUSE COURT, NEW DELHI
MD KAIF CIVIL CONTRACTOR v. ARUN TYAGI
1. Complaint Case no. : 4285/2021
2. Date of Institution of case : 31.08.2021(As per Layers
Software)
3. Name of the complainant : Md. Kaif (Proprietor)
Md Kaif Civil Contractor (Through AR)
Off: E-808, JJ Colony, Jhangirpur, Delhi-
110033
Head Office: Narela Road, Paper Mill,
Near Dhingra Cold Storage, Kundli,
Sonipat, Haryana.
4. Name and address of Accused : Arun Tyagi
S/o Sh. Chanderbhan Tyagi
R/o H. No. 747/1, Rajiv Colony,
Sector-55, Samaypur Road,
Ballabhgarh Road, Faridabad,
Haryana-121004
5. Offence complained of : Section 138 NI Act
6. Plea of accused : Pleaded not guilty
7. Final Order : Convicted
8. Date of judgment : 20.05.2023
Digitally signed
by PADMA
PADMA LANDOL
LANDOL Date:
2023.05.20
17:35:17 +0530
CC NO. 4285/2021 MD KAIF CIVIL CONTRACTOR v. ARUN TYAGI Page 1 of 21
-:JUDGMENT :-
1. This judgment shall decide and dispose off Criminal Complaint Case
No.4285/2021; titled as Md. Kaif Civil Contractor v. Arun Tyagi; instituted under
Section 138 of the Negotiable Instruments Act, 1881 (hereinafter NI Act) for the
dishonour of two cheques for a sum of Rs.1,00,000/- (Rupees Two Lakhs Only) and
Rs. 1,80,000/- (Rupees One Lakh Eighty Thousand Only).
2. It is the case of the complainant that it is a proprietorship firm engaged in the
business of hiring/renting of Ajax Fiory Machine (self loading mixture machine),
hereinafter referred to as the "machine". In July 2020, accused approached the
complainant for hiring of the machine for a project in Rajiv Colony, Sector-56,
Samaypur Road, Faridabad. The said project was completed on 14.09.2020. The total
amount mutually settled by both the parties and the total dues payable by accused is
stated to be Rs. 5,40,000/- out of which Rs. 1,60,000/- was paid by accused to
complainant. Due to some technical error in the machine, accused deducted Rs.
70,000/-, hence, the total outstanding against the accused is stated to be Rs.
3,10,000/-. After several reminders and much persuasions, the accused issued two
cheques, cheque bearing no. 295238 for a sum of Rs. 1,00,000/- and cheque bearing
no. 295239 for a sum of Rs. 1,80,000/- (cheques in dispute at Ex. CW-1/1 and Ex.
CW-1/3) both dated 30.03.2021. That the accused requested to pay the remaining
balance of Rs. 30,000/- in cash after the encashment of the two cheques. As per the
instructions of the accused, complainant presented the cheques in dispute, however,
both came to be dishonoured with remark "Payment stopped by drawer" vide a return
memorandum dated 02.04.2021. After several persuasions and request of
complainant, accused again assured that the cheques would be honoured upon
presentation. Thereafter, complainant again presented both the cheques, however,
both came to be dishonoured with remark "Payment stopped by drawer" on
24.05.2021 and 01.05.2021 respectively. Once again after the assurances of the
accused, complainant presented both the cheques, however, again both came to be
CC NO. 4285/2021 MD KAIF CIVIL CONTRACTOR v. ARUN TYAGI Page 2 of 21
Digitally signed
by PADMA
PADMA LANDOL
LANDOL Date:
2023.05.20
17:37:23 +0530
dishonoured with remark "Payment stopped by drawer" vide return memorandums
dated 23.07.2021 and 22.07.2021 [Ex. CW-1/2 and Ex. CW-1/4]. The complainant
eventually sent a legal demand notice dated 09.07.2021 [Ex. CW-1/5] to the accused
through postal receipts. Despite service of the notice as shown by internet generated
tracking report [Ex. CW-1/6 (colly)], no payment was received by the complainant.
The accused having failed to make the payment within the statutory period of 15
days, the present complaint has been filed by the complainant against the accused.
3. The complainant was directed to submit the original case documents
(complaint, affidavit of pre-summoning evidence, cheque and annexed documents)
with the Court, a condition precedent to the taking of cognizance of the complaint, as
per SOP/Guidelines issued by the SCMSC Hon'ble High Court of Delhi for
functioning of Digital Courts. Pursuant to the said compliance, vide order dated
10.11.2021, after being satisfied that prima facie ingredients of Section 138 NI Act
are made out cognizance was taken and summons were directed to be issued against
the accused. Accused entered into appearance on 28.04.2022 and was admitted to bail
on the same date. Upon seeing there is no possibility of settlement, notice under
Section 251 Cr.PC was framed and served upon the accused to which he pleaded not
guilty and claimed trial.
4. The accused then expressed their willingness to move an application under Sec.
145(2) NI Act. Upon the submission of the Ld. Counsel for complainant that he has
no objection to the said application and also considering the facts of the case and
defence taken by accused, the oral application stood allowed. The matter was then
listed for recording of evidence through video conference through Cisco Webex Meet
in compliance of the Project Implementation Guidelines 2020 laid down by Hon'ble
High Court of Delhi and Video Conferencing Rules 2021 issued by Hon'ble High
Court of Delhi dated 26.10.2021. AR for Complainant was examined and cross-
examined as CW-1. He tendered his affidavit in post summoning evidence (as the
solitary witness) and relied upon following documents:
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Digitally signed
by PADMA
PADMA LANDOL
LANDOL Date:
2023.05.20
17:35:27 +0530
i) Original cheque in dispute bearing no. 295238 dated 30.03.2021: Ex. CW-
1/1.
ii) Bank Return memo dated 23.06.2021: Ex. CW-1/2.
iii) Original cheque in dispute bearing no. 295239 dated 30.03.2021: Ex. CW-
1/3.
iv) Bank Return memo dated 22.06.2021: Ex. CW-1/4.
v) Legal Demand Notice dated 09.07.2021: Ex. CW-1/5.
vi) Postal receipts and internet generated tracking report: Ex. CW-1/6(colly).
vii) Certificate u/s. 65-B Indian Evidence Act: Ex. CW-1/7.
viii) Registration certificate of complainant's proprietorship firm: Ex. CW-1/8.
ix) Authority letter dated 11.08.2021: Ex. CW-1/9.
x) Conversation/chat between the parties: Mark A.
5. After the conclusion of complainant evidence, accused was examined under
Section 313 Cr.PC wherein all the incriminating evidence were put to him. Accused
then moved an application u/s. 315 CrPC which was allowed. Thereafter, accused
was examined and cross-examined as DW-1. Thereafter, father of accused was
examined and cross-examined as DW-2. Accused then closed his defence evidence.
6. Final arguments have been heard at length. Complete record including the
written submissions filed by Ld. Counsel for accused have been perused carefully.
7. The Court shall now deal with the defence taken by the accused and
contentions of both the parties.
DEFENCE OF ACCUSED:
8. While framing notice u/s. 251 Cr.PC, accused has taken a defence that in July
2020 he had taken a machine on rent from the complainant. The rent was fixed for
Rs. 1,80,000/- per month for a period of one year. That he had given Rs. 1,00,000/- in
advance by way of cash and also gave the cheques in dispute by way of advance
CC NO. 4285/2021 MD KAIF CIVIL CONTRACTOR v. ARUN TYAGI Page 4 of 21
Digitally signed
by PADMA
PADMA LANDOL
LANDOL Date:
2023.05.20
17:37:31 +0530
payment. He had also paid Rs. 60,000/- towards daily needs of labour, driver etc. It
has further stated that however due to monsoon season, he could not carry on the
work beyond 20 days. On 21st or 22nd day, complainant took back the machine. That
he had asked the complainant to return the cheques in dispute, however, to no avail.
Thereafter, when the complainant presented the cheques, he issued stop payment
instructions to his bank. Accused has further admitted his signature on both the
cheques in dispute. Accused further admitted the address on the legal demand notice
to be correct, however, denied receiving the same. He further admitted having filled
the cheques amount (in figure) in his handwriting. In his statement u/s. 313 Cr.PC,
accused has reiterated his defence. In addition, he has stated that he had given two
cheques for Rs. 1,80,000/- and Rs. 1,00,000/- as advance payment for subsequent
months. That the said project has been completed by DMC Company. Accused has
further stated that cheques in dispute were not issued after hiring of machines. In fact,
cheques were given at the time of hiring of machines. That the complainant wrongly
presented the cheques in dispute which is why he issued stop payment instructions to
his bank. Further that the dues were for 20-22 days only.
9. In the final arguments, complainant has asserted its case for conviction against
the accused essentially on the ground of having proved the cause of action against
him, beyond all reasonable doubt. This is premised on the substantive proof of
presentation of the cheques in dispute admittedly issued by the accused with his
signature, their return as dishonoured from the payee's bank upon presentation for
encashment and non-payment by the accused of the legally enforceable debts within
the statutorily prescribed period, despite service of legal demand notice. It is
submitted by the Ld. Counsel for the complainant:
i) That it is an undisputed fact that the rent of the machine was fixed for Rs.
1,80,000/- per month for a period of 3 months i.e. Rs. 5,40,000/- in total out of which
accused paid only Rs. 1,60,000/- and Rs. 70,000/- was paid towards repair of the
CC NO. 4285/2021 MD KAIF CIVIL CONTRACTOR v. ARUN TYAGI Page 5 of 21
PADMA Digitally signed by
PADMA LANDOL
LANDOL 17:35:37 +0530
Date: 2023.05.20
machine. Towards the outstanding liability of Rs. 3,10,000/-, accused issued two
cheques whose encashment was deliberately stopped by the accused.
ii) That the whatsApp chat [Mark A] dated 27.07.2020 shows the promise of accused
for making payment. Accused has admitted the said conversation [Mark A] in
statement u/s. 294 Cr.PC.
iii) That the accused has deposed in his cross-examination that the machine was lifted
from the construction site in July 2020, however, DW-2 deposed that the machine
was functioning at the site even in August and September 2020. Hence, DW-2 has
supported the case of the complainant that the machine was at the site for 3 months
period. Further, that the statement of DW-1 is false and not reliable.
iv) During his cross-examination, accused has voluntarily deposed that he had
whatsApp communication with the complainant for the presentation of the cheques
on dispute wherein he had sought time for clearing the payment.
10. Per contra, Ld. Counsel for the accused has prayed for dismissal of the
complaint and acquittal of the accused on several counts:
i) That the AR for the complainant is not a competent person to represent the
complainant as the complainant as an individual cannot grant a letter of authorization
rather should have executed a power of attorney in favour of his AR. That the letter of
authorization [Ex. CW-1/9] neither bears the details of AR nor signed by him.
Further, nowhere in the complaint or evidence affidavit it is mentioned as to under
what capacity AR was working with complainant's proprietorship firm and whether
he has first hand knowledge about the present matter. Further, the copy of Aadhar
card of AR is not proved and his identity is highly disputed. Hence, the case is not
maintainable.
ii) That as per the complainant, the machine was rented out on 24.07.2020 and the
project was completed on 14.09.2020 i.e. in one month and three weeks. On the other
hand, it is the case of the complainant that machine was rented out for three months
CC NO. 4285/2021 MD KAIF CIVIL CONTRACTOR v. ARUN TYAGI Page 6 of 21
Digitally signed
PADMA by PADMA
LANDOL
LANDOL Date: 2023.05.20
17:35:43 +0530
@ Rs. 1,80,000/- per month. That there are no invoices or documents to prove that
the machine was with the accused for three months.
iii) That there is no contract between the parties to hire the machine for three months,
hence, liability does not arise to pay rent for three months.
iv) That the Complainant in his statement dated 15.09.2022 stated that the cheques in
dispute were given to him in the month of August 2020 and was told by the accused
to present within 3 days for encashment and therefore, if there was any liability on
the part of the accused, there was no need for the complainant to wait for 7 months to
present the cheques for the first time. This shows that the said cheques were issued as
advance cheques by the accused to the Complainant and not against any liability and
were misused by the Complainant.
v) That the complainant has stated that the Accused had undertaken that the cheques
would be duly honoured upon their presentation. However, no such documents,
whatsApp chats or texts have been produced to show the said confirmation/
undertaking given by the accused with regard to the encashment of the cheques in
question.
vi) That in para 7 of the complaint, the complainant states that pursuant to the
dishonour of the cheques, he had approached the accused through whatsApp and texts
regarding the dishonour of the cheques in dispute. However, no such document/
whatsApp chats or texts have been filed on record. This goes to show that the story of
the complainant is false and the presumption under Section 114(g) of the Indian
Evidence Act, 1872 would be attracted.
vii) That the whatsApp chats marked as Mark A is also not proved as the certificate
under Sec. 65-B of the Indian Evidence Act [Ex. CW-1/7] is untenable as it is not
signed by the author of the certificate and there is neither any date on the certificate
nor any details of the Computer/digital system used in the print out of the said chats.
11. It is now pertinent to examine the factual matrix of the case in the light of the
ingredients of the provision as produced herein:
CC NO. 4285/2021 MD KAIF CIVIL CONTRACTOR v. ARUN TYAGI Page 7 of 21
Digitally signed
by PADMA
PADMA LANDOL
LANDOL Date:
2023.05.20
17:35:49 +0530
138. Dishonour of cheque for insufficiency, etc., of funds in the account.--
Where any cheque drawn by a person on an account maintained by him
with a banker for payment of any amount of money to another person
from out of that account for the discharge, in whole or in part, of any
debt or other liability, is returned by the bank unpaid, either because of
the amount of money standing to the credit of that account is
insufficient to honour the cheque or that it exceeds the amount
arranged to be paid from that account by an agreement made with that
bank, such person shall be deemed to have committed an offence and
shall, without prejudice to any other provision of this Act, be punished
with imprisonment for a term which may be extended to two years, or
with fine which may extend to twice the amount of the cheque, or with
both: Provided that nothing contained in this section shall apply unless
--
(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier;
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice; in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. Explanation.--For the purposes of this section, "debt of other liability" means a legally enforceable debt or other liability.
12. The essential ingredients in order to attract Sec. 138 of NI Act, 1881 are:
CC NO. 4285/2021 MD KAIF CIVIL CONTRACTOR v. ARUN TYAGI Page 8 of 21 Digitally signed by PADMAPADMA LANDOL LANDOL Date:
2023.05.20 17:35:55 +0530
i) Existence of legally enforceable debt or liability and issuance of cheque in discharge of said debt or liability;
(ii) Dishonor of cheque in dispute which must have been drawn on an account maintained by the accused;
(iii) Service of legal demand notice seeking payment of cheque amount within 30 days from the date of receipt of return memo;
(iv) Non-payment of cheque amount within fifteen days from the date of service of notice; and
(v) Filing of complaint within one month from the date on which cause of action arises.
13. Now, coming to the facts of the case in hand in the light of above mentioned legal principles. In the instant case, the issuance of the cheques in dispute [Ex. CW- 1/1 and Ex. CW-1/3] by the accused, their presentation in the bank for encashment and subsequent dishonour due to the reason "payment stopped by drawer", is not disputed and is a matter of record, as proved by the return memos [Ex. CW-1/2 and Ex. CW-1/4]. It is also established that the cheques in dispute belong to the accused and even the signatures on the same are admittedly of the accused. Once these facts are established, a presumption of the cheque having been issued in discharge of a legally existing liability and drawn for good consideration arises by virtue of Section 118 (a) of the Negotiable Instruments Act. Once Section 139 of the NI Act comes into picture, the Court presumes that the cheque was issued in discharge, in whole or in part, of any debt or liability. At this stage, with the help of presumption under Section 139 of the Negotiable Instruments Act, the case of the complainant stands proved.
14. Since the presumption under Section 139 read with Section 118(a) of the NI Act is in favour of the complainant, it is now for the accused to rebut the same either by discrediting the veracity of material relied upon by the complainant or by leading positive evidence to probabilise his defence on the touchstone of preponderance of probabilities as provided by the three Judge bench of the Hon'ble Supreme Court in CC NO. 4285/2021 MD KAIF CIVIL CONTRACTOR v. ARUN TYAGI Page 9 of 21 Digitally signed PADMA by PADMA LANDOL LANDOL Date: 2023.05.20 17:36:01 +0530 Rangappa Vs Sri Mohan (2010) 11 SCC 441 and also in Rohitbhai Jivanlal Patel v. State of Gujarat & Anr. (2019) 18 SCC 106.
15. It is trite law that for rebuttal of the said presumption under Section 139 read with Section 118(a) of NI Act, accused need not even step into the witness box as he can rebut the same by placing reliance on the material brought on record by the complainant or even by raising presumptions of fact and law on the basis of material available on record. The accused has to make out a fairly plausible defence which is acceptable to the Court. Therefore, the standard of proof required from the accused to prove his defence is "preponderance of probabilities" and not beyond reasonable doubts. However, at the same time, it is also to be remembered that bare denial of the existence of legally enforceable debt or other liability cannot be said to be sufficient to rebut the presumption and something which is probable has to be brought on record to shift the burden back to the complainant.
The statutory presumption u/s. 118(a) NI Act reads as under:
118 Presumptions as to negotiable instruments. --Until the contrary is proved, the following presumptions shall be made:--
(a) of consideration --that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration The statutory presumption u/s. 139 NI Act reads as under:
39. Presumption in favour of holder. --It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.
16. Keeping these basic principles in mind, this Court shall now proceed to deal with the various defences taken by the accused and examine whether the accused has been able to rebut the presumption arising in favour of the complainant:
CC NO. 4285/2021 MD KAIF CIVIL CONTRACTOR v. ARUN TYAGI Page 10 of 21 Digitally signed by PADMAPADMA LANDOL LANDOL Date:
2023.05.20 17:36:08 +0530 I. Defence of non-existence of any liability:
The first and foremost defence taken by the accused is that he owes no liability towards the accused to the extent of cheques amount in dispute. It is based on the premise that the machine in question could not run beyond 20-22 days due to monsoon rainfall and hence, he returned the machine to complainant. In this regard, accused has stated while framing notice u/s. 251 CrpC, that in July 2020, he had taken the machine on rent from complainant at Rs. 18,000/- per month for one year. He had given Rs. 1,00,000/- in cash towards advance payment, Rs. 60,000/- towards the daily expenses of labours, driver etc. and handed over the cheques in dispute by way of advance payment. It is further stated that because of monsoon rainfall, he could not carry the work beyond 20 days and on 21 st or 22nd day, complainant took back the machine. That he had asked the complainant to return the cheques, however, to no avail. Further, when the complainant presented the cheques in dispute in his bank, he issued stop payment instructions to his bank. In the statement u/s. 313 CrPC, accused has further reiterated the same defence and also added that he had issued two cheques for Rs. 1,80,000/- and Rs. 1,00,000/- as advance payment for subsequent months. That the project has now been completed by one DMC company. Further, that the outstanding liability is not Rs. 3,10,000/- and in fact, he had paid the due amount by way of advance payment. Ld. Counsel for accused has contended that it is the case of the complainant that the machine was rented out on 24.07.2020 and the project was completed on 14.09.2020 i.e. in one month and three weeks. On the other hand, it is also the case of the complainant that machine was rented out for three months @ Rs. 1,80,000/- per month. That there are no invoices or documents to prove that the machine was with the accused for three months. Ld. Counsel for accused has further argued that there is no contract between the parties to hire the machine for three months, hence, liability does not arise to pay rent for three months. Per contra, Ld. Counsel for complainant has contended that it is an undisputed fact that the rent of the machine was fixed for Rs. 1,80,000/- per month for a period of 3 CC NO. 4285/2021 MD KAIF CIVIL CONTRACTOR v. ARUN TYAGI Page 11 of 21 Digitally signed PADMA by PADMA LANDOL LANDOL Date: 2023.05.20 17:36:15 +0530 months i.e. Rs. 5,40,000/- in total out of which accused paid only Rs. 1,60,000/-. It is further contended that Rs. 70,000/- was paid by accused towards repair of the machine. Towards the discharge of partial outstanding liability of Rs. 3,10,000/-, accused issued two cheques whose encashment was deliberately stopped by the accused. These defences shall be dealt with herein in seriatim:
i) In order to prove this defence that machine ran for only 20-22 days and thereafter accused returned the machine on 21st or 22nd day, accused has not produced any documentary proof whatsoever and it is only a bald averment. However, he has examined his father, Sh. Chanderbhan Tyagi as DW-2. DW-2 has deposed that he had got the project to construct RCC sewer from Sh. Deen Mohd (proprietor of M/s.
DMC Enterprises) for which his son arranged the machine from Shahrukh. In his cross examination, DW-2 deposed that machine was brought at the site in the end of July 2020. He has further deposed that in the month of August 2020, machine worked for about 7-8 days and in September 2020, machine worked for about 10-15 days. He has also deposed that he is unaware as to when was the machine lifted from the site. It is to be seen that DW-2 has not lent any corroboration to the defence taken by the accused, rather he has gone ahead to depose that machine was operational even in August and September 2020 which is in effect supporting the case of the complainant. Further, regarding the lifting of the machine from the site, DW-2 has shown his unawareness. The deposition of DW-2 has in fact weakened or created a doubt in the defence of the accused. Further, accused has not shown any circumstance under which it can be assumed that machine was returned on 21 st-22nd day or in the end of July 2020. Hence, the accused has miserably failed to prove that he returned the machine much before the actual agreed duration and hence, there was no liability to pay for the subsequent period.
ii) Coming to the rental amount and duration for which the machine was agreed to be rented, as rightly stated by the Ld. Counsel for complainant, accused has admitted during framing of notice u/s. 251 Cr.PC, statement u/s. 313 CrPC and also during his CC NO. 4285/2021 MD KAIF CIVIL CONTRACTOR v. ARUN TYAGI Page 12 of 21 Digitally signed PADMA by PADMA LANDOL LANDOL Date: 2023.05.20 17:36:20 +0530 cross-examination that rent was fixed for Rs. 1,80,000/- per month. In the cross- examination of the AR for complainant, AR has deposed that rent of Rs. 1,80,000/- per month was fixed for 3 months. However, no contrary suggestion has come from the accused side in any manner at any point of time. In fact, while framing notice u/s. 251 CrPC, accused has stated that rent was fixed for Rs. 1,80,000/- per month for a period of one year i.e. a much longer period than the one stated by the complainant. During the final arguments, Ld. Counsel for accused has contended that the complainant has not produced any invoices or documents to prove that machine was rent out for three months. This Court is of the opinion that when the accused has failed to show the return of machine on 21st or 22nd day or in the end of July 2020 and further in the absence of a single suggestion throughout the trial that the machine was not rented for three months, this boils down to the only conclusion that the accused has duly admitted the duration of the rent of machine as three months. Ld. Counsel for accused has also contended that as per the complainant's own version, machine was supplied on 24.07.2020 and work was completed on 14.09.2020, then accused shall not be liable to pay for three months. In this regard, AR has deposed during his cross-examination that it was agreed between the parties that irrespective of running of machine, the accused would pay a fixed rental amount of Rs. 1,80,000/- per month. It is noted that no contrary suggestions to this effect has come from the accused side at any point of time. AR has further stated in his cross-examination that the machines were returned only after 3 months. There is admittedly no rental agreement between the parties. It is to be noted that accused has admitted the whatsApp chat [Mark A] in his statement u/s. 294 CrPC and even during his cross-examination, whereby he had sought time from the complainant to arrange the payments. When the accused has failed to show the return of machine in the end of July 2020 as contended by him through any document whatsoever and further when the DW-2 has deposed in contrary to the version of accused, this Court is of the opinion that the contention of the Ld. Counsel for accused holds no merits and is liable to be dismissed.
CC NO. 4285/2021 MD KAIF CIVIL CONTRACTOR v. ARUN TYAGI Page 13 of 21 Digitally signedPADMA by PADMA LANDOL LANDOL Date: 2023.05.20 17:36:27 +0530 II. Defence pertaining to cheques in dispute:
i) During framing of notice u/s. 251 Cr.PC accused has stated that he had given the cheques in dispute by way of advance payment and when the work could not be continued after 20 days, he asked the complainant to return the cheques, however to no avail. Thereafter, when the complainant presented the cheques in his bank, accused issued instructed his bank to stop the payment. Accused has admitted the amount on both the cheques in dispute to be in his handwriting. Even in his statement u/s. 313 Cr.PC, accused has stated that at the time of hiring of the machine, he had given both the cheques in dispute for Rs. 1,80,000/- and Rs. 1,00,000/- as advance payment for subsequent months. Further, during the cross-examination of CW-1, Ld. Counsel for accused has given a suggestion that the cheques in dispute were given by way of advance payment for the 2nd month. Per contra, during the same cross-
examination, another suggestion has come from accused side whereby it is stated that the cheques in dispute were security cheques.
It is an undisputed fact that the accused had given Rs. 1,60,000/- to the complainant at the time of hiring of the machine. It is further an undisputed fact that rent of the machine was fixed at Rs. 1,80,000/- per month. The case of the complainant is that the machine was with the accused for three months. As already seen above accused has failed to establish that he had returned the machine after 20 days or in the end of July 2020 itself. It is further an undisputed fact that as per the oral agreement between the parties, the rent of the machine was irrespective of its running at the site. Further, the handwriting of amount on both the cheques in dispute is admittedly of accused. Hence, considering all these facts together in a holistic manner, the only possible conclusion is that the accused had given the cheques in dispute towards the outstanding liability only, be it through advance payment or given after settlement of accounts. This is further fortified by the admission of the accused during his cross-examination whereby he stated that "I had whatsApp communication with the complainant for the presentation of the cheques in dispute wherein I had sought time for clearing the payment". Accused has also admitted the CC NO. 4285/2021 MD KAIF CIVIL CONTRACTOR v. ARUN TYAGI Page 14 of 21 Digitally signed by PADMA PADMA LANDOL LANDOL Date:
2023.05.20 17:36:32 +0530 whatsApp chat [Mark A] wherein on 29.07.2020 he has promised to make payment in following words, "sir payment ka arrangement nhi ho paa raha believe me agar kal bhi hota hai toh mai kal khud aa kar pasaaa poucha duga jasa machine lana aya tha aur sir ager kal nhi ho pata hai toh saturday ko ful payment poucha k jauga believe me". After these admissions, there's no doubt left but to conclude that the accused was liable to pay the cheque amount which he had filled in his own handwriting. This admission of the accused rather corroborates the fact that cheques were given by way of advance payment which the accused has attempted to use as a defence. In view of the same, the defence that cheques were given by way of advance payment or by security lends no help to the accused in any manner. Moreover, the law on security cheques is settled. It has been held by the Hon'ble Supreme Court of India in Sripati Singh v. State of Jharkhand and Anr. 2021 SCC OnLine SC 1002 wherein it has been held that:
"17. A cheque issued as security pursuant to a financial transaction cannot be considered as a worthless piece of paper under every circumstance. 'Security' in its true sense is the state of being safe and the security given for a loan is something given as a pledge of payment. It is given, deposited or pledged to make certain the fulfilment of an obligation to which the parties to the transaction are bound. If in a transaction, a loan is advanced and the borrower agrees to repay the amount in a specified timeframe and issues a cheque as security to secure such repayment; if the loan amount is not repaid in any other form before the due date or if there is no other understanding or agreement between the parties to defer the payment of amount, the cheque which is issued as security would mature for presentation and the drawee of the cheque would be entitled to present the same. On such presentation, if the same is dishonoured, the consequences contemplated under Section 138 and the other provisions of NI Act would flow."CC NO. 4285/2021 MD KAIF CIVIL CONTRACTOR v. ARUN TYAGI Page 15 of 21 Digitally signed
PADMA by PADMA LANDOL LANDOL Date: 2023.05.20 17:36:37 +0530 Further, the Hon'ble High Court of Delhi in Credential Leasing & Credits Ltd. Vs. Shruti Investments 2015 SCC OnLine Del 10061 has held that even a security cheque can form the basis of complaint under Section 138 of the NI Act, if on the date of the deposit of the post-dated security cheque, the debt of the accused stood crystallized.
In the present case, accused has failed to show that there was no outstanding liability against him on the date of presentation of the cheques in dispute or there was any kind of understanding or agreement between the parties whereby payment of outstanding liability was deferred, hence, the complainant was within his rights to present the cheques in dispute and consequently file the present complaint. In view of the same, there is no gainsaying that this defence is also liable to be dismissed being devoid of merits.
III. Attempt to pick holes in the case of complainant:
i) Ld. Counsel for accused has tried to pick holes in the case of the complainant by contending that the Complainant in his statement dated 15.09.2022 stated that the cheques in dispute were given to him in the month of August 2020 and was told by the accused to present within 3 days for encashment and therefore, if there was any liability on the part of the accused, there was no need for the complainant to wait for 7 months to present the cheques for the first time. This shows that the said cheques were issued as advance cheques by the accused to the Complainant and not against any liability and were misused by the Complainant.
In the first blush, it may raise a question as to why the complainant waited for 7 months to present the cheques, however, when this fact is considered with the entirety of the facts it does not seem to have any adverse bearing on the case of the complainant, firstly, a cheque can be presented any time within its validity period and secondly, AR of complainant (CW-1) could have been cross-examined on this aspect, however, accused has chosen not to do so. Not a single question has been asked as to why the cheques in dispute were not immediately presented for encashment. In fact, CC NO. 4285/2021 MD KAIF CIVIL CONTRACTOR v. ARUN TYAGI Page 16 of 21 Digitally signed by PADMA PADMA LANDOL LANDOL Date:
2023.05.20 17:36:42 +0530 the admission of accused in this regard is already on record whereby he stated that he had sought time from complainant for clearing the payment of cheques amount through a whatsApp chat. In view of the same, the argument of the Ld. Counsel for accused holds no water and is liable to be dismissed.
ii) Ld. Counsel for accused has also contended that the complainant has stated that the Accused had undertaken that the cheques would be duly honoured upon their presentation. However, no such documents, whatsApp chats or texts have been produced to show the said confirmation/ undertaking given by the accused with regard to the encashment of the cheques in question.
This argument is also devoid of any merit. Once a cheque is given in discharge of any liability, the drawer is duty bound to honour the cheque. In the present case, accused has repeatedly stated that cheques in dispute with signature and amount in his handwritings were issued for advance payment for subsequent months/2 nd month and when he has failed to show that he was not liable to pay for subsequent months or 2nd month, it was his responsibility to honour the cheques. Burden is rather on the accused to show why cheques were dishonoured and not on the complainant to show the undertaking of accused for honour of cheques in dispute upon presentation. However, the accused has failed to discharge his burden.
iii) It is further contended by the Ld. Counsel for accused that in para 7 of the complaint, the complainant states that pursuant to the dishonour of the cheques, he had approached the accused through whatsApp and texts regarding the dishonour of the cheques in dispute. However, no such document/ whatsApp chats or texts have been filed on record. This goes to show that the story of the complainant is false and the presumption under Section 114(g) of the Indian Evidence Act, 1872 would be attracted.
This argument again is devoid of any merit. The statutory requirement after dishonour of a cheque is to send a demand notice to the drawer asking for the cheque amount, which has been rightly done so by the complainant in the present case. Even CC NO. 4285/2021 MD KAIF CIVIL CONTRACTOR v. ARUN TYAGI Page 17 of 21 Digitally signed PADMA by PADMA LANDOL LANDOL Date: 2023.05.20 17:36:47 +0530 though the accused has stated that he has not received the notice, he has admitted the address at which legal demand notice [Ex. CW-1/5] was sent to be correct. Moreover, the tracking report [Ex. CW-1/6 (colly)] shows 'Item delivery confirmed' on 12.07.2021. Furthermore, the bail bonds and vakalatnama produced by accused also bear the same address on which the legal demand notice was sent. Hence, the legal demand notice is deemed to be delivered upon accused in terms of Section 27 of General Clauses Act, 1897 read with Section 114 of Indian Evidence Act, 1872. Reliance in this regard is also placed on the judgment in C.C Alavi Haji v. Palapetty Muhammed [(2007) 6 SCC 555]. Even if the complainant has not produced any documentary proof showing he approached accused after the dishonour of the cheques in dispute, it has no bearing on the case of the complainant in any way when the statutory requirements are otherwise complied with.
iv) Ld. Counsel for accused has also contended that the whatsApp chats [Mark A] is also not proved as the certificate under Sec. 65-B of the Indian Evidence Act [Ex. CW-1/7] is untenable as it is not signed by the author of the certificate and there is neither any date on the certificate nor any details of the Computer/digital system used in the print out of the said chats.
This argument yet again finds no force because the whatsApp chat [Mark A] is duly admitted by the accused in his statement u/s. 294 CrPC and even during his cross-examination and DW-2 has also admitted that the phone number which is reflecting on the whatsApp chat belongs to the accused.
IV. No authority with AR of complainant to file the present complaint:
For the first time at the stage of final arguments, Ld. Counsel for accused has challenged the authority of the Authorised Representative of the complainant to file the present case. He has contended that the AR for the complainant is not a competent person to represent the complainant as the complainant as an individual cannot grant a letter of authorization rather should have executed a power of attorney in favour of his AR. That the letter of authorization [Ex. CW-1/9] neither bears the details of AR CC NO. 4285/2021 MD KAIF CIVIL CONTRACTOR v. ARUN TYAGI Page 18 of 21 Digitally signed by PADMA PADMA LANDOL LANDOL Date:
2023.05.20 17:36:52 +0530 nor signed by him. Further, nowhere in the complaint or evidence affidavit it is mentioned as to under what capacity AR was working with complainant's proprietorship firm and whether he has first hand knowledge about the present matter. Further, the copy of Aadhar card of AR is not proved and his identity is highly disputed.
It is correct that the authorization letter has been given by Mohd. Kaif, proprietor of Md. Kaif Civil Contractors (payee of the cheques in dispute) on the letter head of the proprietorship firm. However, the authority letter bears the name of AR i.e. Shahrukh and a copy of his Aadhar card is attached with the authority letter. Further, the authority letter is duly signed and stamped by the complainant and there is no requirement under law that the authority holder should also sign the same. During the cross-examination of the AR (CW-1), he has deposed that he works as a Manager of the complainant proprietorship firm. Though it is not mentioned in the complaint if the AR has the first hand knowledge of the transaction in question, however, at several places during his evidence, accused has mentioned the name of AR (Shahrukh), as in he had hired the machine from Shahrukh, he did the loading of the machine and Shahrukh took the machines with him, that he asked Shahrukh to return his cheques in dispute. Further, DW-2 has also deposed that his son had arranged the machine from Shahrukh, that he had asked Shahrukh to execute an agreement, however, he refused. DW-2 has further deposed that he, his son along with 2-3 persons of Shahrukh brought the machine at the site. These depositions of accused and his father clearly reflects that Shahrukh, AR for the complainant had the first hand knowledge of the transaction in question, in fact he seems to be the one who was actively functioning and entered into the oral agreement with accused on behalf of the complainant. It is to be noted that the identity of the AR has never been disputed at any stage of trial and dispute is raised at a belated stage i.e. at the time of final arguments which cannot be allowed. Accused should have been vigilant to raise this dispute at the earliest possible stage, if there was any. Not furnishing of the authority letter vide a power of attorney may lead to loss of some revenue to the State CC NO. 4285/2021 MD KAIF CIVIL CONTRACTOR v. ARUN TYAGI Page 19 of 21 Digitally signed PADMA by PADMA LANDOL LANDOL Date: 2023.05.20 17:36:58 +0530 as the authority letter on record is bereft of any stamp duty, other than that there is no designated format of Power of Attorney which the complainant ought to have followed. This Court is of the opinion that the accused cannot avail benefit from this especially when he has failed to rebut the presumption raised against him u/s. 118 and 139 of NI Act. Moreover, AR has stated on oath that he is the AR of the complainant and accused has also raised no dispute to this effect at any stage of trial. The dispute has only come at the stage of final arguments i.e. at a very belated stage of which accused cannot avail benefit of. Hence, this court is of the opinion that omission on the part of the complainant is not to the extent that would vitiate the entire proceedings specially when on merits the complainant has built a strong case and accused has failed to rebut the presumptions raised against him. Consequently, this defence of accused is also liable to be dismissed being devoid of merits.
17. It is a settled law that though the degree of burden on the accused to rebut the presumption is only to the extent of preponderance of probability, however, in order to cross this threshold accused has to take some steps which is more that mere averments, however, this has not been done in the present case. The Hon'ble Supreme Court in Rohitbhai Jivanlal Patel (supra) and in various other rulings have time and again, emphasized that though there may not be sufficient negative evidence which could be brought on record by the accused to discharge his burden, yet mere denial would not fulfil the requirements of rebuttal as envisaged under section 118 and 139 of the NI Act. In the case at hand, keeping all the aspects in view, the defence put forth by the accused and rebuttal of presumption raised against him is only a mere denial when tested on the touchstone of preponderance of probability. Further, it has been held in Rajesh Agarwal v. State 2010 SCC OnLine Del 2511 that:
"9. .....There is no presumption that even if an accused fails to bring out his defence, he is still to be considered innocent. If an accused has a defence against dishonour of the cheque in question, it is he alone who CC NO. 4285/2021 MD KAIF CIVIL CONTRACTOR v. ARUN TYAGI Page 20 of 21 Digitally signed by PADMA PADMA LANDOL LANDOL Date:
2023.05.20 17:37:02 +0530 knows the defence and responsibility of spelling out this defence to the court and then proving this defences is on the accused....."
18. In the light of the foregoing discussions, this court is of the firm opinion that the accused has not led any cogent evidence to rebut presumptions under Sec. 118 and 139 of NI Act. There is nothing coming out either in the cross examination of CW-1 or in Defence evidence which would probabilize the defence raised by the accused or falsify the case of the complainant, in fact as already discussed the defence of the accused is highly improbable and is not in the nature of compelling rebuttable evidence. In the above view, the complainant has proved that the accused had issued the cheques in dispute in his favour for discharge of the legally enforceable liability. This Court has no hesitation in holding that in the facts and circumstances of the present case, the complainant has brought home his case proving the complicity of the accused in the offence under Sec. 138 Negotiable Instruments Act. Resultantly, the accused Arun Tyagi is thus, held guilty and stands convicted for the said offence.
Announced in Open Court today on 20.05.2023.
Digitally signedPADMA by PADMA LANDOL LANDOL Date: 2023.05.20 17:37:08 +0530 (PADMA LANDOL) MM (NI Act) Digital Court-03 New Delhi, PHC/Delhi/ 20.05.2023 Certified that this judgment contains 21 pages and each page bears my signatures.
Digitally signed by PADMAPADMA LANDOL LANDOL Date:
2023.05.20 17:37:12 +0530 (PADMA LANDOL) MM (NI Act) Digital Court-03 New Delhi, PHC/Delhi/ 20.05.2023 CC NO. 4285/2021 MD KAIF CIVIL CONTRACTOR v. ARUN TYAGI Page 21 of 21