Delhi District Court
Vikas Pathak vs Ajay Kumar on 11 March, 2024
IN THE COURT OF MS. DIVYA SINGH
METROPOLITAN MAGISTRATE, DWARKA COURTS, NEW DELHI
Criminal Complaint No.: 18392/2017
Vikas Pathak ......... Complainant
Versus
Ajay Kumar ......... Accused
1. Name & address of the complainant: Mr. Vikas Pathak s/o
Late Sh. Nagendra
Pathak, r/o A-71
Block, A, Kesho Ram
Park, Uttam Nagar, N.
Delhi-110059
2. Name & address of the accused : Mr. Ajay Kumar
S/o Sh. Satish
Chander R/o B-156,
B-Block New
Jankipuri, New Delhi-
110059
3. Offence complained of : U/S 138, The
Negotiable
Instruments Act,1881.
4. Date of Institution of case : 28.09.2017
5. Plea of accused : Pleaded not guilty.
6. Final order : Acquitted
7. Date of decision of the case : 11.03.2024
Digitally
signed by
DIVYA DIVYA SINGH
Date:
SINGH 2024.03.11
15:52:37
+0530
CC No. 18392/2017 Vikas Pathak Vs. Ajay Kumar 1/20
JUDGMENT
1. Vide this judgment, I shall dispose of the aforementioned complaint case as filed by the complainant, Vikas Pathak (hereinafter referred to as the complainant) against accused Ajay Kumar, (hereinafter referred to as the accused).The present complaint has been filed against the accused u/s 138 of Negotiable Instrument Act, 1881 (hereinafter referred to as the NI Act).
2. The brief facts as alleged by the complainant in his complaint are that accused issued a cheque bearing no 015942 dated 29.06.2017 amounting to Rs. 4,55,000/- drawn at Palam Corporate Plaza, Palam Vihar Sec-3, Gurgaon, Haryana-122017 and further assured the complainant that the same shall be honoured on presentation. When complainant presented the above-mentioned cheques in question the same were returned unpaid by the banker of the complainant vide cheque returning memo dated 04.07.2017 with the remarks "Funds insufficient" respectively
3. Thereafter, the complainant served a legal demand notice upon the accused through his counsel on 01.08.2017 and upon the expiry of statutory period when accused failed to make the payment of cheque in question, complainant had filed the present complaint case.
4. In order to prove his case, complainant in the pre-summoning evidence, examined himself as CW1 by way of affidavit Ex. CW1/A and relied upon following documents which are as follows:
1) Ex.CW1/B is the cheque in question.
2) Ex.CW1/C is the cheque returning memo.
CC No. 18392/2017 Vikas Pathak Vs. Ajay Kumar 2/20
DIVYA Digitally signed
by DIVYA SINGH
SINGH 15:52:44 +0530
Date: 2024.03.11
3) Ex.CW1/D is the postal receipt.
4) Ex.CW1/E is the legal notice.
5) Ex. CW1/F is the tracking report.
5. Upon appreciation of pre-summoning evidence and upon finding prima facie case against the accused, pre-summoning evidence was concluded on 01.11.2017 and summons were issued to accused on the very same day.
6. Thereafter Notice u/s 251 Cr.PC was framed against the accused on accused on 23.05.2018 to which accused denied issuing cheque in question in favour of the complainant. Accused admitted giving security cheque to one Kishan Kaushik from whom he has taken a loan of Rs. 50,000/-. Accused denied having any liability toward towards the complainant.
Accused admitted his signatures on the cheque in question but denied filling in other particulars. Accused further denied receiving of legal demand notice.
7. Complainant (CW1) was cross examined by counsel for accused on 19.07.2022 & 10.04.2023 and discharged on 10.04.2023. and thereafter, matter was listed for recording of statement u/s 313 Cr.PC.
8. Statement of accused u/s 313 Cr.PC was recorded on 02.06.2023 wherein all the incriminating circumstances along with all the exhibited documents were put to the accused to which accused denied taking any loan from the complainant. Accused further denied having any liability towards the complaiant.
CC No. 18392/2017 Vikas Pathak Vs. Ajay Kumar 3/20 DIVYA Digitally signed by DIVYA SINGH SINGH 15:52:50 +0530 Date: 2024.03.11 Accused further admitted his signature but denied filling in particular on the cheque in question. Accused further denied receiving of legal demand notice.
9. Thereafter accused submits that he does not want to lead defence evidence and matter was fixed for final arguments.
10. Final arguments were concluded and record of the case and evidence of both the parties was thoroughly perused.
11. In the final arguments, the counsel for complainant submitted that complainant has been able to prove all the ingredients u/s 138 NI Act which stood corroborated by the documentary evidence led in the evidence. The counsel for complainant further submitted that accused has not brought any defence and has neither rebutted the presumption arising in favour of the complainant in terms of Section 118 & 139 of NI Act in as much as testimony of complainant has remained uncontroverted in material particulars.
On the other hand, counsel for accused stated that there were many contradictions in the evidence of the complainant and as such complainant has not been able to prove any liability of the accused.
12. Before proceedings to the merits of the case, it is important to lay down the basic provision of Section 138 of NI Act,1881. In order to ascertain whether accused has committed offence u/s 138 NI Act the following ingredients have to be proved which are as follows:
A person must have drawn a cheque on an account maintained by him in a bank for payment of a certain sum of money to another CC No. 18392/2017 Vikas Pathak Vs. Ajay Kumar 4/20 DIVYA Digitally signed by DIVYA SINGH SINGH Date: 2024.03.11 15:52:56 +0530 person from out of that account for the discharge of any legally enforceable debt or liability;
cheque has been presented to the bank within a period of three months from the date on which it is drawn or within the period of its validity whichever is earlier;
That cheque has been 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;
The payee or the holder in due course of the cheque has made a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 30 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and 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.
13. It becomes imperative to mention that Section 139 of NI Act provides a statutory presumption in favour of the drawee that the cheque was issued to him in discharge of a debt or other liability of a legally enforceable nature. Also, the said provision must be read along with Section 118 of NI Act which states that every negotiable instrument is presumed to have been drawn and accepted for consideration. That said, what follows is that trial under section 138 NI Act is structured on the premise of the reverse onus of proof theory since the offence is a document based technical one. The journey of evidence begins not from the home of the prosecution story but from the point of the defence. The presumptions carved out in favour of the complainant are those of law and not those of facts.
14. In this regard, reliance can be placed on K. N. Beena v. Muniyappan (AIR 2001 SC 2895), it was observed as follows: -
"Thus, in complaints under Section 138, the Court has to presume that the cheque had been issued for a debt or liability. This CC No. 18392/2017 Vikas Pathak Vs. Ajay Kumar 5/20 DIVYA Digitally signed by DIVYA SINGH Date: 2024.03.11 SINGH 15:53:03 +0530 presumption is rebuttable. However, the burden of proving that a cheque had not been issued for a debt or liability is on the accused. This Court in the case of Hiten P. Dalal vs. Bratindranath Banerjee reported in (2001) 6 SCC 16 has also taken an identical view."
15. The Hon'ble Supreme Court, in the case of Hiten P. Dalal vs. Bratindranath Banerjee (AIR 2001 SC 3897), observed as follows:
"Because both Sections 138 and 139 require that the Court "shall presume" the liability of the drawer of the cheque for the amounts for which the cheque are drawn, as noted in State of Madras vs. A. Vaidyanatha Iyer, (AIR 1958 SC 61), it is obligatory on the Court to raise this presumption in every case where the factual basis for the raising of the presumption had been established. It introduces an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the accused (ibid)."
16. Further, it is a settled position that when an accused has to rebut the presumption under Section 139 NI Act, the standard of proof for doing so is that of "preponderance of probabilities". As held in Rangappa vs. Srimohan [(2010) 11 SCC 441], the Hon'ble Supreme Court has observed:
"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."
17. Thus, as laid down in catena of decisions it is an established law that onus lies upon the accused to rebut the presumption and to establish that cheque in question was not given in respect of any debt or liability, with the standard of CC No. 18392/2017 Vikas Pathak Vs. Ajay Kumar 6/20 DIVYA Digitally signed by DIVYA SINGH Date: 2024.03.11 SINGH 15:53:13 +0530 proof being preponderance of probability. Therefore, it becomes critical to examine whether the explanation of the accused coupled with the evidence on record is sufficient to dislodge the presumption envisaged by Section 118 & 139 of NI Act.
Appreciation of evidence
18. The accused has admitted his signatures on the cheque in question in his notice framed u/s 251 of Cr.P.C. on 23.05.2018. Further, the cheque has been drawn on the account of the Accused. This leads to drawing of an inference u/s 139 read with s.118 of the Act, that the cheques were issued in discharge of a legally recoverable debt or other liability, and it is now on the accused to raise a probable defence and to prove his case on the basis of preponderance of probabilities.
In this regard the following judgment can be relied upon:
19. In the case of M/S Kalamani Tex vs P. Balasubramanian Criminal Appeal No. 123 of 2021, the Hon'ble Supreme Court has held: The Statute mandates that once the signature(s) of an accused on the cheque/negotiable instrument are established, then the 'reverse onus' clause become operative. In such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him.
20. In view of the above judgment, once the accused has admitted his signatures on the cheque in question Ex. CW1/B in the present case, presumption u/s 139 of NI Act is drawn in favour of the complainant.
CC No. 18392/2017 Vikas Pathak Vs. Ajay Kumar 7/20 DIVYA Digitally signed by DIVYA SINGH SINGH 15:53:20 +0530 Date: 2024.03.11
21. To rebut the presumptions raised in favour of complainant, the defences taken by the accused are discussed hereunder:
22. The primary defence taken by the accused both in his statement under section 251 Cr.PC and under section 313 Cr.PC is that cheque in question was given as a security cheque in a blank signed manner to one person namely, Mr Kishan Kaushik and that he did not issue the cheque in favour of complainant and he owes no liability towards the complainant.
23. In the present case, the onus to prove that the accused has not issued the cheque in question in favour of the complainant, primarily lied on the accused. Section 103 of the Indian Evidence Act, 1872 enunciates that the person who asserts a fact must prove the same unless the law otherwise provides.
24. Interestingly, Mr. Kishan Kaushik was not brought as a defence witness to connect the chain of events, to show as to how the cheque which as alleged by the accused to have been given for security purpose finally got into the possession of the complainant.
25. It is pertinent to mention here that statement of accused recorded us 313 CrPC are not substantive piece of evidence, as held by the the Hon'ble Supreme Court of India in Sumeti Vij vs Paramount Tec Feb Industries (CRA 292/2021) LL 2021 SC 149, " The statement of the accused recorded under 313 of the Code is not a substantive evidence of defence, but only an opportunity to the accused to explain the incriminating circumstance appearing in the prosecution case of the accused Therefore, there is no evidence to rebut the presumption that the cheques were issued for consideration.
26. Reliance can also be placed on the judgment of V.S. Yadav v. Reena CRL. A. NO.1136 of 2010, wherein it was held that: "Mere pleading not guilty CC No. 18392/2017 Vikas Pathak Vs. Ajay Kumar 8/20 DIVYA Digitally signed by DIVYA SINGH Date: 2024.03.11 SINGH 15:53:27 +0530 and stating that the cheques were issued as security, would not 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 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 presumption under Section 139 of N.I. Act, the accused, by cogent evidence, has to prove the circumstance under which cheques were issued."
27. Further, the Hon'ble Supreme Court in the judgment in Kumar Exports vs Sharma Carpets, (2009)2 SCC 513 observed, "The use of the phrase "until the contrary is proved" in Section 118 of the Act and use of the words "unless the contrary is proved" in Section 139 of the Act read with definitions of "may presume" and "shall presume" as given in Section 4 of the Evidence Act, makes it at once clear that presumptions to be raised under both the provisions are rebuttable. When a presumption is rebuttable, it only points out that the party on whom lies the duty of going forward with evidence, on the fact presumed and when that party has produced evidence fairly and reasonably tending to show that the real fact is not as presumed, the purpose of the presumption is over".
28. That bare denial of the passing of the consideration and existence of debt apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant.
29. For the sake of arguments, if one were to believe that cheque in question was in fact, given to Mr. Kishan Kaushik for security purpose and not to complainant, then two questions naturally arise, firstly, why did the accused not send a written notice to Mr Kishan Kaushik to demand the cheque back from CC No. 18392/2017 Vikas Pathak Vs. Ajay Kumar 9/20 DIVYA Digitally signed by DIVYA SINGH Date: 2024.03.11 SINGH 15:53:36 +0530 him. The accused has not whispered anything about the recourse he took to procure the security cheque back.
30. Secondly, why accused did not file a complaint either with his bank or with the police in order to ensure that cheque was not misused. It is also noteworthy to point out that accused had merely handed over a blank signed cheque to Mr Kishan Kaushik and never cared to ask or enquire about the status of the cheque handed over to him. Failure to lodge or file any complaint regarding misuse of cheque by the complainant or failure to disclose the steps taken by accused to know about the status of the cheque with Mr. Kishan Kaushik causes dubiety to lurk around the story of the defence.
31. An adverse inference can safely be drawn against the accused who has failed to adduce any credible evidence to show he indeed did everything within his power and control, as a prudent person would do to ensure that cheque tendered by him was not misused.
32. Further, accused has stated that cheque in question was given for security purpose. Before, evaluating the claim of the accused let us understand the position with regard to the security cheque as settled by Hon'ble Delhi High Court in Suresh Chand Goyal vs Amit Sighal;
"The contention that the cheque was issued only as security is preposterous. The cheque whether issued for payment of debt or as security makes no distinction in law. The cheque is a negotiable instrument, it may be that sometimes the cheque is issued with a request on the part of the drawer to defer the presentation of the cheque for some time to enable the drawer to make payment by cash and take back the cheque or allow time to arrange funds for encashment of cheque. When the amount is not paid as per oral understanding the payee is well justified to present the cheque for encashment. The cheque even if it is issued as a security for payment, it is negotiable instrument and encash able security at the hands of payee. Therefore, merely because the drawer contends that it is issued as security is not a ground to exonerate the penal liability under Sec.138 of the NI Act"
CC No. 18392/2017 Vikas Pathak Vs. Ajay Kumar 10/20 DIVYA Digitally signed by DIVYA SINGH SINGH 15:53:43 +0530 Date: 2024.03.11
33. Therefore, the defence of the accused that cheque in question was issued as security cheque has no force.
34. Further, accused has questioned financial capacity of the complainant to lend the loan amount to him and for the same purpose accused has cross examined the complainant.
35. Whenever the accused questions the financial capacity of the complainant in support of his defence, despite the presumption of legally enforceable debt, the onus shifts again on the complainant to prove his financial capacity and at that stage the complainant is required to lead evidence to prove his financial capacity, more particularly when it is a case of giving loan by cash and thereafter issuance of a cheque. This position was laid down in APS Forex Services Pvt. Ltd. vs. Shakti International Fashion Linkers and Ors., (2020) 12 SCC 724 by Hon'ble Supreme Court of India.
36. At this stage, it is pertinent to refer to the decision of the Hon'ble Supreme Court in the case Basalingappa vs.Mudibasappa, (2019) 5 SCC 418, wherein it was observed as under:-
"We are of the view that when evidence was led before the Court to indicate that apart from loan of Rs.6 lakhs given to the accused, within 02 years, amount of Rs.18 lakhs have been given out by the complainant and his financial capacity being questioned, it was incumbent on the complainant to have explained his financial capacity. Court cannot insist on a person to lead negative evidence...." (emphasis supplied).
CC No. 18392/2017 Vikas Pathak Vs. Ajay Kumar 11/20 DIVYA Digitally signed by DIVYA SINGH Date: 2024.03.11 SINGH 15:53:50 +0530
37. Therefore, as per the abovementioned judgement, it is incumbent upon the complainant to prove his financial capacity, if the accused disputes the same. However, the same above judgment has clearly stated that if by leading probable defence the accused disputes the financial capacity of complainant to pay amount, burden would be on the complainant to establish his financial capacity.
38. It is also pertinent to mention the judgment of Hon'ble Kerala High Court in Sunitha vs. Sheela Antony, 2020 SCC OnLine Ker 1750, wherein the principles laid down by the Hon'ble Supreme Court of India in various judgments were summarized and it was held that:
"The complainant has no obligation, in all cases under Section 138 of the Act, to prove his financial capacity. But, when the case of the complainant is that he lent money to the accused by cash and that the accused issued the cheque in discharge of the liability, and if the accused challenges the financial capacity of the complainant to advance the money, despite the presumption under Section 139 of the Act, the complainant has the obligation to prove his financial capacity or the source of the money allegedly lent by him to the accused. The complainant has no initial burden to prove his financial capacity or the source of the money. The obligation in that regard would arise only when his capacity or capability to advance the money is challenged by the accused."
39. In the present case, accused has questioned the financial capacity of the complainant and he was cross-examined apropos his financial capacity. The counsel for accused has drawn the attention of the court to the cross examination of the complainant dated 19.07.2022 wherein the complainant stated that he is into property and cloth business. He further stated that he had advanced a sum of Rs. 4,55,000/- to the accused in cash in February 2017 and no written agreement/receipt was executed between him and the accused regarding the advancement of the said amount.
CC No. 18392/2017 Vikas Pathak Vs. Ajay Kumar 12/20
DIVYA Digitally signed
by DIVYA SINGH
Date: 2024.03.11
SINGH 15:53:57 +0530
40. Relevant portion of the cross examination of the complainant as CW1 on 19.07.2022 is reproduced as follows:
"No written agreement/receipt was executed between us regarding the advancement of Rs. 4,55,000/- by me to the accused. I had handed over the said sum to the accused at my residence and no other person were present there. I had sold one of my property situated in Burari and received some payments. I cannot produce any documents to show the sale of that property in Burari. Vol. There was new colony being created and all the transaction were done by me orally. I cannot even produce any bayana receipt regarding the sale of said property. I had sold the said property to one person by the name of Devender. I do not know the full name of the said person. That person had shifted back to some other place. I do not know his present whereabouts."
41. In the present case, as per the complaint and evidence by way of affidavit Ex. CW1/A, the accused had issued on cheque bearing no. 015942 dated 29.06.2017 amounting to Rs. 4,55,000/- to the complainant in discharge of his liability. However, complainant has not placed on record any documentary evidence to support his case. Absence of any documentary evidence to prove financial capacity as well as advancement of loan and non-disclosure of loan in income tax return of complainant becomes relevant in the state of affairs where transactions is made by way of cash.
42. A suggestion was also given by learned counsel for the accused that accused never asked for any amount from the complainant nor the complainant had given any amount to the accused and that the complainant had created a false story for the purpose of this case.
43. During the final arguments, learned counsel for the accused also contended that complainant is making false story as the whole amount of Rs. 4,55,000/- has been advanced in cash and no agreement was executed. He further submitted that it is hard to believe that a prudent man will give a huge amount to someone in cash without executing any acknowledgement or receipt CC No. 18392/2017 Vikas Pathak Vs. Ajay Kumar 13/20 DIVYA Digitally signed by DIVYA SINGH Date: 2024.03.11 SINGH 15:54:03 +0530 and also an absence of any witness specially when the friendly relations of the accused and complainant are itself in doubt.
44. The counsel for accused had highlighted that the relevant portion of the cross examination of the complainant CW1 on 19.07.2022 which is reproduced as follows:
"I do not have any contact number/mobile number of the accused. I used to had the contact number of the accused but the same was lost as I had lost my previous mobile phone. I had last conversed with the accused on his mobile phone in the June 2017 when I informed him that I was presenting the cheque in question for encashment, and I asked whether he was maintaining the requisite bank balance. I do not know the name of father and mother of the accused. It is correct that I have not mentioned any of the fact regarding my previous acquaintance with the accused in my complaint or in my evidence affidavit."
45. The aforenoted contention of the ld. Counsel for the accused is well merited. The version of the Complainant is backed only by the testimony of CW
-1 and there is no other evidence or document on record which can independently establish the advancement of alleged friendly loan in the absence of any witness.
46. It has been held in the case of Kulvinder Singh Vs. Kafeel Ahmad CR.L. L.P 478 of 2011 of Delhi High Court as well as K. Prakashan Vs. P.K. Surenderan 2008 (1) SCC 258 that acquittal is proper on prosecution in complaints u/s 138 of NI Act where Complainant is not able to show the source of friendly loan or solvency for the same. In other words, it was held that presumption of cheques gets dislodged where Complainant is not able to give source of the amount loaned to Accused.
CC No. 18392/2017 Vikas Pathak Vs. Ajay Kumar 14/20 DIVYA Digitally signed by DIVYA SINGH Date: 2024.03.11 SINGH 15:54:11 +0530
47. Therefore, on the basis of the above-cited judgments and in the facts of the present case, the accused has been successfully able to prove on the basis of preponderance of probabilities that the complainant did not have the necessary financial capacity or the source of funds to advance the alleged loan.
48. Hence, in view of the above discussion and considering the facts of the present case, this court opines that the inescapable conclusion is that the case of complainant of advancing loan in cash to the accused stands scarred.
49. The counsel for accused also highlighted that the complainant did not file ITR and the bank account statement of the relevant period.
50. The complainant in the present case has stated in his cross examination dated 19.07.2022 that he is income tax assessee and started filing the ITR in the year 2018-2019. Thereafter the cross-examination of the witness was deferred for want of ITR of the complainant on 19.07.2022. However, on 10.04.2023 complainant stated that he is not able to produce the ITR for the relevant period and the bank statement from 01.01.2017 to 31.12.2019.
51. The counsel for accused submits that these facts shows that the complainant has cooked up a story about lending an amount of Rs. 4,55,000/- in cash to the accused. During the final arguments, learned counsel for the accused stated that non filing of ITRs and bank statement clearly shows that no loan has been advanced by the complainant to the accused.
52. At this stage reliance can be placed on the judgement of Hon'ble High Court of Delhi in Guddo Devi @ Guddi Vs. Bhupender Kumar Crl. Rev. P. 1246/2019, wherein the scope and ambit of Sanjay Mishra Vs. Kanishka Kapoor was examined, and it was held:
CC No. 18392/2017 Vikas Pathak Vs. Ajay Kumar 15/20 DIVYA Digitally signed by DIVYA SINGH Date: 2024.03.11 SINGH 15:54:22 +0530 "14. Section 269SS of the Income Tax Act, 1961 prohibits making of any payment in cash above a sum of ₹20,000/-. Thus, any person violating the same would attract imposition of penalties under the said Act. However, the same does not render the said debt un- enforceable or precludes the lender from recovering the same."
53. It cannot be said that that mere fact that the loan has been advanced in cash or that when it is not reflected in the ITR of the Complainant, the said facts would ipso facto cast aspersions on the case of the Complainant. The Income Tax Act is a distinct statute and the assessee will be liable to the consequences therein, as that matter is between the revenue and the assessee. However, it cannot be said that the prosecution u/s 138 of the NI Act in respect of the said loan would become non-maintainable.
54. Hence, the failure to show the loan amount in the ITR would not ipso facto render the debt irrecoverable but the said fact can be taken into account alongwith lack of any other independent evidence or record for the purposes of holding the factum of advancement and the financial capacity of the Complainant, doubtful.
55. The said situation has been examined in Sheela Sharma Vs. Mahendra Pal 2016 SCC OnLine Del 4696 wherein it was held that:
"31. In cases where the Complainant claims to have advanced a friendly loan in cash, and where the transaction of loan is not evidenced by any other documentary or other reliable evidence, no doubt, the aspect whether the availability of funds in cash with the Complainant/lender, and its advancement as loan to the Accused have been reflected in the income tax returns of the Complainant/lender, or not, become relevant. If, the availability of funds, and the loan transaction itself is not so reflected, that factor is taken note of by the Court as relevant to hold that the presumption under Section 118 and 139 of the NI Act stands rebutted. However, these considerations would not be relevant, where loan transaction itself is otherwise established, either through documentary evidence-such as, a receipt or a loan agreement, or acknowledgement executed by the Accused, or CC No. 18392/2017 Vikas Pathak Vs. Ajay Kumar 16/20 DIVYA Digitally signed by DIVYA SINGH Date: 2024.03.11 SINGH 15:54:31 +0530 by oral evidence of an independent witness who is found to be credible". (Emphasis supplied)
56. A failure to reflect the loan amount in the ITR would be very relevant in the case like the present, where admittedly no document has been executed in respect of an alleged friendly loan which was advanced in cash and the loan does not stand proved by any independent evidence/document. The factum of not showing the loan in the ITR or maintaining any independent record would be relevant not from the point of recoverability of the amount u/s 138 of the NI Act but from the point of view of rendering the factum of advancement of the loan and the financial capacity of the Complainant itself, quite doubtful.
57. As already discussed in the above paragraphs, the Ld. Counsel for the Accused has submitted that a perusal of the testimony of CW - 1 itself would reveal that the advancement of the loan itself is shrouded in doubt and the financial capacity of the Complainant has also been put in dispute by the Accused.
58. On a perusal of the testimony of CW-1, recorded on 19.07.2022 and 10.04.2023, the aforesaid submissions are well merited. CW-1 has pointedly stated that the loan amount was advanced in cash in February 2017, as the exact date was not known to him. CW - 1 also admitted that no written agreement or receipt was executed between the parties. He also submitted that there was no one present when the loan amount was handed over to the accused.
59. Hence, in addition to the loan being admittedly advanced in cash and without any document in writing, CW-1 deposes quite waveringly in respect of how the said amount was arranged. No documentary/ reliable independent evidence is forthcoming to support the factum of advancement of the loan. In the backdrop of this case, the aforesaid omission to show the loan in the ITR CC No. 18392/2017 Vikas Pathak Vs. Ajay Kumar 17/20 DIVYA Digitally signed by DIVYA SINGH Date: 2024.03.11 SINGH 15:54:40 +0530 becomes very relevant, not as a factor affecting recoverability under the provisions of the Income Tax Act, 1961 but as a factor rendering the advancement itself, doubtful.
60. Therefore, as per judgment in Basalingappa vs Mudibasasapa (supra), it is incumbent upon the complainant to prove his financial capacity, if the accused disputes the same. However, the same above judgment has clearly stated that if by leading probable defence the accused disputes the financial capacity of complainant to pay amount, burden would be on the complainant to establish his financial capacity.
61. It can be safely said that the accused does not need to discharge his or her liability beyond the shadow of reasonable doubt. He just needs to create holes in the case set out by the complainant. Accused can say that the version brought forth by the complainant is inherently unbelievable and therefore the prosecution cannot stand. In this situation the accused has nothing to do except to point inherent inconsistency in the version of the complainant 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.
62. The complainant has failed to do so as the complainant has not examined any other witness or led any documentary evidence to prove the loan transaction and aforesaid discussion casts doubt over the complainant's version that he had given loan of Rs. 4,55,000/- in cash to the accused.
63. It is apparent that the case of the complainant that the cheque in question was issued to him by the accused for payment of loan taken by him is unworthy of credit and fails to inspire the confidence of this court.
CC No. 18392/2017 Vikas Pathak Vs. Ajay Kumar 18/20
DIVYA Digitally signed
by DIVYA SINGH
SINGH Date: 2024.03.11
15:54:49 +0530
64. The upshot of the discussion in the preceding paragraphs is that the Accused has been able to establish his defence on a preponderance of probabilities and has been able to show that the case of the Complainant is improbable and at variance with the standard of a reasonable man. The onus to prove the existence of a legally enforceable debt or other liability now falls back upon the Complainant and when viewed from this angle, the material on record would show that the case of the Complainant is now devoid of legs to stand on and has been demolished by the Accused and this ingredient remains unfulfilled as against him.
65. It is pertinent to mention here that the burden to establish all the ingredients of the offence and that too beyond reasonable doubt lies upon the Complainant and never shifts. Though the case of the Complainant is initially aided by the presumptions existing in his favour, ultimately the case of the Complainant must stand on its own legs. The Complainant cannot call to his aid and assistance, any inconsistencies, irregularities or infirmities in the defence to support his own case.
66. Further, the standard of proof upon an Accused to prove his defence is not as heavy as that on the Complainant. The Accused is not necessarily required to adduce any oral/documentary evidence in his defence. The Accused can very well rely upon the material placed on record by the Complainant or on the cross examination of the Complainant witnesses to probabilize his defence. It is not necessary for the Accused to establish each and every line of his defence to the hilt. It is sufficient if the Accused establishes his plea on a preponderance of probabilities.
67. Complainant's reliance on K. N. Beena v. Muniyappan (AIR 2001 SC 2895) and Hiten P. Dalal vs. Bratindranath Banerjee (AIR 2001 SC 3897), CC No. 18392/2017 Vikas Pathak Vs. Ajay Kumar 19/20 DIVYA Digitally signed by DIVYA SINGH Date: 2024.03.11 SINGH 15:54:57 +0530 Bir Singh vs. Mukesh Kumar (supra) will not aid him as presumption has already been raised against the accused and accused has managed to rebut the same by way of preponderance of probabilities.
68. The judgments relied on by the accused have been read carefully by this Court and it emerges that point of law/fact which has been laid down/discussed by the Hon'ble Courts has already been discussed above in detail and to that extent, they have considered and applied. This Court does not wish to multiply authorities by discussing each of them individually.
69. Now as far as the other ingredients of Section 138 NI act are concerned, I do not deem it necessary to delve into it in as much as the complainant has failed to prove an essential ingredient as to the existence of legally enforceable debt.
DECISION
70. To epitomise the above discussion, the accused has been successful in establishing a probable defence on a standard of preponderance of probabilities to rebut the presumption under section 118 and 139 of the NI Act by punching the holes in the case of the complainant and making the case of the complainant doubtful. The accused has been successful in establishing a probable defence by way of proving that the complainant did not have the requisite financial capacity to advance the alleged loan and also by proving that no legally enforceable liability existed towards the complainant.
71. Accordingly, the accused Mr. Ajay Kumar S/o Sh. Satish is acquitted of the offence punishable u/s 138 NI Act. DIVYA Digitally signed by DIVYA SINGH Date: 2024.03.11 SINGH 15:55:08 +0530 Announced in the open court on Divya Singh 11.03.2024 MM-NI Act -02, South West District Dwarka Courts, Delhi CC No. 18392/2017 Vikas Pathak Vs. Ajay Kumar 20/20