Delhi District Court
Sh. Baljeet Singh vs . on 1 September, 2021
IN THE COURT OF METROPOLITAN MAGISTRATE (NI-05),
WEST, TIS HAZARI COURTS, NEW DELHI
Presided over by- Sh. Devanshu Sajlan, DJS
Case No. - 14134/2016
Unique Case ID No. - DLWT02-004682-2016
In the matter of :-
SH. BALJEET SINGH,
S/o Sh. Mangal Singh,
R/o A-90, Narsing Garden
Vishnu Garden, Delhi. ... Complainant
VS.
SH. JAGPREET SINGH,
S/o Sh. Jasbeer Singh
R/o WZ-2, Plot No. 37, 38
Ground Floor, Ram Nagar
Tilak Nagar, New Delhi. ... Accused
1. Name of Complainant : Sh. Baljeet Singh
2. Name of Accused : Sh. Jagpreet Singh
3. Section 138, Negotiable Instruments
Offence complained of or proved :
Act, 1881.
4. Plea of Accused : Not Guilty
5. Date of Filing : 11-03-2016
6. Date of Reserving Order : 31-08-2021
7. Date of Pronouncement : 01-09-2021
DEVANSH Digitally signed by
DEVANSHU SAJLAN
U SAJLAN Date: 2021.09.01
16:16:55 +05'30'
CC No. 14134/16 Baljeet Singh v. Jagpreet Singh 1 of 19
8. Final Order : Acquitted.
Argued by: Sh. Kamaljeet Singh, learned counsel for the complainant.
Sh. Nitesh Kumar, learned LAC for the accused.
TABLE OF CONTENTS
A. Factual Matrix .......................................................................................... 3
B. Pre-Summoning Evidence & Notice ..........................................................3
C. Complainant's Evidence ............................................................................4
D. Statement of Accused ................................................................................ 5
E. Ingredients of Offence and Discussion ......................................................5
I. Contentions in relation to non-fulfilment of second ingredient
1. Contention 1: Misuse of the security cheque by filling an
excessive amount
2. Contention 2: The complainant did not have financial capacity to
grant the alleged loan.
3. Contention 3: Violation of section 269SS IT Act.
II. Contention in relation to non-fulfilment of third ingredient
1. Contention 1: The return memo does not bear the official seal of
the bank
F. Conclusion ................................................................................................... 18
DEVANSHU Digitally signed by
DEVANSHU SAJLAN
SAJLAN Date: 2021.09.01
16:17:21 +05'30'
CC No. 14134/16 Baljeet Singh v. Jagpreet Singh 2 of 19
BRIEF STATEMENT OF REASONS FOR THE DECISION:-
A. FACTUAL MATRIX
1. The present complaint has been filed by Sh. Baljeet Singh (hereinafter
"complainant") against Sh. Jagpreet Singh (hereinafter "accused") under section 138
of the Negotiable Instruments Act, 1881 (hereinafter "NI Act").
2. The substance of allegations, as contained in the complaint, are as follows:
(a) The complainant claims that he received a cheque of Rs.3,50,000/- from the accused
in discharge of the loan liability of the same amount. The loan was apparently
advanced on the basis of friendly relations without any interest. When the
complainant presented the cheque, the bank returned it unpaid as no balance was
available in the account. He sent a legal demand notice but the accused allegedly
failed to pay the cheque amount and therefore, the complainant filed the present
complaint.
(b) Accused's stance, on the contrary, is that he had taken a loan of Rs. 20,000/-1 from the
complainant and that he had given a blank signed cheque as a security cheque which
has been misused by the complainant. The accused denied having taken a loan of Rs.
3,50,000 from the complainant.
B. PRE-SUMMONING EVIDENCE & NOTICE
3. Pre-summoning evidence was led by the complainant and on finding a prima facie
case, the accused was summoned to face trial vide order dated 02.06.2016. On
appearance, the accused was served with the notice of accusation under Section 251,
Code of Criminal Procedure, 1973 (hereinafter "CrPC") on 01.02.2018, to which
1 During the recording of his defense under section 251 CrPC, the accused stated that he had taken a
loan of Rs. 20,000 from the complainant. However, at the stage of recording of statement of the
accused u/s 313 CrPC, the accused stated that he had taken a loan of Rs. 50,000 from the complainant.
DEVANSH Digitally signed by
DEVANSHU SAJLAN
U SAJLAN Date: 2021.09.01
16:17:41 +05'30'
CC No. 14134/16 Baljeet Singh v. Jagpreet Singh 3 of 19
the accused pleaded not guilty and claimed trial. While the accused admitted his
signature on the cheque in question, he stated that rest of the particulars were not
filled by him. Further, the following plea of defence was taken by the accused at this
stage:
I plead (not) guilty and have defence to make. The present cheque in question
bears my signatures and I have not filled up the other particulars of it. I had
taken a loan of Rs. 20,000/- from the complainant as my mother was
suffering with cancer. I had issued the cheque in question as security to the
complainant. I have paid total Rs. 4,000/- to the complainant in two
installments of Rs. 2,000/- each. I am ready to pay the balance amount to him
in installments. The complainant has filled wrong amount of Rs. 3.5 lakhs in
the cheque and have filed a false complaint. I have received the legal demand
notice from the complainant. I do not owe liability towards the complainant
qua the cheque in question. I want to lead defence evidence.
4. Thereafter, the accused moved an oral application u/s 145(2) NI Act which was
allowed vide order dated 01.02.2018 and the complainant was allowed to be cross-
examined by the accused.
C. COMPLAINANT'S EVIDENCE
5. During the trial, the complainant has led the following oral and documentary
evidence against the accused to prove his case beyond reasonable doubt:-
Oral Evidence
CW1 Baljeet Singh (Complainant) (tendered his evidence by
way of affidavit and the same is exhibited as CW1/A)
Documentary Evidence
Ex.CW1/1 Cheque in question bearing No. 101135 dated 05.01.2016
Ex.CW1/2 Return memo dated 08.01.2016
Ex.CW1/3 Legal notice dated 01.02.2016
Ex.CW1/4 Postal Receipt
Ex. CW1/5 Postal Receipt
Ex.CW1/6 AD Card
DEVANSH Digitally signed by
DEVANSHU SAJLAN
U SAJLAN Date: 2021.09.01
16:17:57 +05'30'
CC No. 14134/16 Baljeet Singh v. Jagpreet Singh 4 of 19
D. STATEMENT OF ACCUSED
6. Thereafter, before the start of defence evidence, in order to allow the accused to
personally explain the circumstances appearing in evidence against him, his statement
under Section 313 CrPC was recorded without oath. In reply, the accused denied all
the allegations against him and took the same plea of defence which he took while
framing of Notice under section 251 CrPC. However, there are two contradictions in
the defence taken at the stage of framing of Notice under section 251 CrPC and the
defence taken at the stage of recording of statement under section 313 CrPC. During
the recording of his defense under section 251 CrPC, the accused stated that he had
taken a loan of Rs. 20,000 from the complainant. However, at the stage of recording
of statement of the accused under section 313 CrPC, the accused stated that he had
taken a loan of Rs. 50,000 from the complainant. Further, During the recording of his
defense under section 251 CrPC, the accused stated that he had received the legal
notice from the complainant. However, at the stage of recording of statement of the
accused under section 313 CrPC, the accused stated that he had not received the legal
notice from the complainant.
7. Thereafter, the accused did not lead any evidence in his defense and hence, the matter
was listed for final arguments.
8. After listening to final arguments from both sides, the matter was reserved for
pronouncement. I have heard the learned counsels on both the sides and have given
my thoughtful consideration to the material appearing on record.
E. INGREDIENTS OF OFFENCE AND DISCUSSION
9. Before dwelling into the facts of the present case, it would be pertinent to discuss the
DEVANSH Digitally signed by
DEVANSHU SAJLAN
U SAJLAN Date: 2021.09.01
16:18:13 +05'30'
CC No. 14134/16 Baljeet Singh v. Jagpreet Singh 5 of 19
legal standards required to be met by both sides. In order to establish the offence
under Section 138 of NI Act, the prosecution must fulfil all the essential ingredients
of the offence, as highlighted below:-
First Ingredient: The cheque was drawn by a person on an account maintained by
him/her for payment of money and the same is presented for payment within a period
of 3 months from the date on which it is drawn or within the period of its validity;
Second Ingredient: The cheque was drawn by the drawer for discharge of any
legally enforceable debt or other liability;
Third Ingredient: The cheque was returned unpaid by the bank due to either
insufficiency of funds in the account to honour the cheque or that it exceeds the
amount arranged to be paid from that account on an agreement made with that bank;
Fourth Ingredient: A demand of the said amount has been made by the payee or
holder in due course of the cheque by a notice in writing given to the drawer within
thirty days of the receipt of information of the dishonour of cheque from the bank;
Fifth Ingredient: The drawer fails to make payment of the said amount of money
within fifteen days from the date of receipt of notice.
10. In addition to the above, the conditions stipulated under Section 142 NI Act have to
be fulfilled.
11. Notably, the first, fourth and fifth ingredient have been duly proved without there
being any real controversy regarding the same:
(a) The complainant has proved the original cheque, Ex. CW1/1, which the accused has
not disputed as being drawn on the account of the accused. The accused's only
contention is that the cheque in question was given as a blank signed cheque which
has been filled at a subsequent date by the complainant and he has manipulated the
amount in the cheque. However, giving a blank signed cheque does not erase the
DEVANSHU Digitally signed by
DEVANSHU SAJLAN
SAJLAN Date: 2021.09.01 16:18:34
+05'30'
CC No. 14134/16 Baljeet Singh v. Jagpreet Singh 6 of 19
liability under the NI Act. If a signed blank cheque is voluntarily presented to a
payee, towards some payment, the payee may subsequently fill up the amount and
other particulars (Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197, ¶ 34). This, in
itself, would not invalidate the cheque (Ibid). The onus would still be on the accused
to prove that the cheque was not in discharge of a debt or liability (Ibid).
(b) The cheque in question was returned unpaid vide return memo Ex. CW1/2 due to the
reason, "Funds Insufficient". However, learned counsel for the accused has raised an
objection to the admissibility of Ex. CW1/2, which has been discussed later in this
judgment.
(c) The complainant has proved on record legal notice Ex. CW1/3 and postal receipt Ex.
CW1/4 and Ex. CW1/5. While the accused has stated in his statement u/s 251 CrPC
that he received the legal notice from the complainant, he has asserted in his
statement under section 313 CrPC that he did not receive the legal notice. This
assertion cannot help the accused in escaping liability under section 138 NI Act,
especially keeping in mind that the summons issued by the court were served on the
accused at the same address as mentioned in the legal notice. It is settled law that an
accused who claims that s/he did not receive the legal notice, can, within 15 days of
receipt of summons from the court, make payment of the cheque amount, and an
accused who does not make such payment cannot contend that there was no proper
service of notice as required under Section 138, by ignoring statutory presumption to
the contrary under Section 27 of the General Clauses Act and Section 114 of the
Evidence Act (C.C. Alavi Haji v. Palapetty Muhammed, (2007) 6 SCC 555, ¶ 17).
Moreover, as highlighted above, the accused has himself taken a contradictory stance
in his statement u/s 251 CrPC and u/s 313 CrPC, since, in one statement, he has stated
that he has received the legal notice, while in the other statement, he has stated that he
has not received the legal notice.
Digitally signed by
DEVANSHU SAJLAN
DEVANSHU SAJLAN Date: 2021.09.01
16:18:53 +05'30'
CC No. 14134/16 Baljeet Singh v. Jagpreet Singh 7 of 19
(d) The fact that the payment was not made within 15 days of the receipt of the legal
notice is also not disputed. As such, on the basis of the above, the first, fourth and
fifth ingredient of the offence under Section 138 NI Act stands proved against the
accused.
12. The controversy in the present complaint case pertains to second and third
ingredient.
I. CONTENTIONS IN RELATION TO NON-FULFILMENT OF SECOND
INGREDIENT
13. As far as the proof of second ingredient is concerned, the complainant is required to
prove that the cheque in question was drawn by the drawer for discharging a legally
enforceable debt. In the present case, the issuance of the cheque in question is not
denied. As per the scheme of the NI Act, once the accused admits signature on the
cheque in question, certain presumptions are drawn, which result in shifting of onus
on the accused.
14. The combined effect of section 118(a) NI Act and section 139 of the NI Act is that a
presumption exists that the cheque was drawn for consideration and given by the
accused for the discharge of debt or other liability. Both the sections use the
expression "shall", which makes it imperative for the court to raise the aforesaid
presumptions once the foundational facts required for the same are proved (Hiten P.
Dalal v. Bratindranath Banerjee, (2001) 6 SCC 16). Further, it has been held by the
Hon'ble Apex Court in Rangappa v. Sri Mohan, (2010) 11 SCC 441 that the
presumption contemplated under Section 139 of NI Act includes the presumption of
existence of a legally enforceable debt. In order to rebut the statutory presumption u/s
139 NI Act, the standard of proof is that of preponderance of probabilities, by which
the accused is required to raise a probable defence. To rebut the presumption, it is
open to the accused to rely on evidence led by him/her or the accused can also rely on
DEVANSHU Digitally signed by
DEVANSHU SAJLAN
SAJLAN Date: 2021.09.01
16:19:09 +05'30'
CC No. 14134/16 Baljeet Singh v. Jagpreet Singh 8 of 19
the materials submitted by the complainant or the circumstances upon which the
parties rely in order to raise a probable defence (Basalingappa v. Mudibasappa,
(2019) 5 SCC 418).
15. In this case, arguments raised by the learned counsel for the accused to rebut the
presumption are discussed below.
1. Contention 1 - Misuse of the security cheque by filling an excessive amount
16. In paragraph 2 and 3 of the complaint, it is mentioned that the accused issued a
cheque of Rs. 3,50,000 dated 05.01.2016 in discharge of his legal liability. The
accused has claimed in his statement u/s 313 CrPC that the complainant has misused
the cheque as it was given as a security cheque for availing a loan of Rs. 50,000.
17. The aforesaid contention of the accused is not sustainable since it is immaterial
whether the cheque has been filled by the complainant once the cheque has been
admitted to be duly signed by the drawer-accused. It is a settled position of law that if
a signed blank cheque is voluntarily presented to a payee, towards some payment, the
payee may fill up the amount and other particulars (Bir Singh v. Mukesh Kumar,
(2019) 4 SCC 197, ¶ 34). This, in itself, would not invalidate the cheque. The onus
would still be on the accused to prove that the cheque was not in discharge of a debt
or liability by adducing evidence. However, apart from making a bald assertion that
the complainant has misused the cheque by filling an excessive amount in the cheque,
the accused has not led any evidence in order to prove this assertion.
2. Contention 2: The complainant did not have financial capacity to grant the
alleged loan.
18. It has been contended by learned counsel for the accused that there is nothing on
record, other than the statement of the complainant, to show that he had advanced the
alleged loan of INR 3,50,000 to the accused. He submitted that no bank records or
DEVANSH Digitally signed by
DEVANSHU SAJLAN
U SAJLAN Date: 2021.09.01
16:19:29 +05'30'
CC No. 14134/16 Baljeet Singh v. Jagpreet Singh 9 of 19
ITR have been placed on record.
19. It is a settled position of law that showcasing that complainant did not have adequate
financial capacity to lend money to the accused amounts to a probable defence and
can help in rebutting the presumption that is accrued to the benefit of the complainant
in cheque dishonour cases. The relevant case laws in this regard have been
reproduced hereunder for reference:
(a) In Basalingappa v. Mudibasappa, (2019) 5 SCC 418 : AIR 2019 SC 1983, the
Hon'ble Supreme Court has observed as follows:
During his cross-examination, when financial capacity to pay Rs. 6 lakhs
to the accused was questioned, there was no satisfactory reply given by the
complainant. The evidence on record, thus, is a probable defence on behalf of
the accused, which shifted the burden on the complainant to prove his financial
capacity and other facts". (emphasis added)
(b) In APS Forex Service Private Limited v. Shakti International Fashion Linkers :
AIR 2020 SC 945, the Hon'ble Supreme Court has clarified and explained the issue
as follows:
Now so far as the reliance is placed by Learned Counsel appearing on behalf of
the accused on the decision of this Court in the case of Basalingappa (supra),
on going through the said decision, we are of the opinion that the said decision
shall not be applicable to the facts of the case on hand and/or the same shall not
be of any assistance to the accused. In that case before this Court, the defence
by the accused was that the cheque amount was given by the complainant to
the accused by way of loan. When the proceedings were initiated under Section
138 of the N.I. Act the accused denied the debt liability and the accused raised
the defence and questioned the financial capacity of the complainant. To that,
the complainant failed to prove and establish his financial capacity. Therefore,
this Court was satisfied that the accused had a probable defence and
consequently in absence of complainant having failed to prove his financial
capacity, this Court acquitted the accused. In the present case, the accused
never questioned the financial capacity of the complainant. We are of the view
that whenever the accused has questioned the financial capacity of the
complainant in support of his probable defence, despite the presumption
under Section 139 of the N.I. Act about the presumption of legally
enforceable debt and such presumption is rebuttable, thereafter the onus
shifts again on the complainant to prove his financial capacity and at that
DEVANSH Digitally signed by
DEVANSHU SAJLAN
U SAJLAN Date: 2021.09.01
16:19:48 +05'30'
CC No. 14134/16 Baljeet Singh v. Jagpreet Singh 10 of 19
stage the complainant is required to lead the evidence to prove his
financial capacity, more particularly when it is a case of giving loan by
cash and thereafter issuance of a cheque. (emphasis added)
(c) The crux of the aforesaid decisions of the Hon'ble Supreme Court has been
summarized by the Hon'ble Kearala High Court in Sunitha v. Sheela Antony, 2020
SCC OnLine Ker 1750
In my view, the crux of the decisions referred to above is the following :
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. (emphasis added)
20. Therefore, in cases in which the underlying debt transaction is a cash transaction, the
accused can raise a probable defense by questioning the financial capacity of the
complainant, and once the said question is raised, the onus shifts on the complainant
to prove his financial capacity. In the present case, when the financial capacity of the
complainant was questioned during the cross-examination of the complainant, he
deposed to the following effect:
I am manufacturing gear box. I know the accused for last so many years and he
is my friend. I am income tax payee. I do not remember the exact ITR filed by
me in the year 2016 but approximately Rs.4/- lacs. I paid friendly loan of
Rs.3.5 lacs to the accused in the year 2015 in cash from my savings cash in
hand.
21. Therefore, the complainant gave the aforesaid explanation to discharge the onus
imposed upon him by law. He submitted that he is doing the business of
DEVANSH Digitally signed by
DEVANSHU SAJLAN
U SAJLAN Date: 2021.09.01
16:20:06 +05'30'
CC No. 14134/16 Baljeet Singh v. Jagpreet Singh 11 of 19
manufacturing of gear box and that he had enough savings in cash to give the alleged
loan to the accused. This version of the complainant has not been challenged by the
accused during the cross-examination. Not even a single suggestion has been put to
the complainant regarding the said deposition. The version of the complainant
regarding his financial capacity has gone unchallenged by the accused. The law is
well settled that where the evidence of a witness is allowed to go unchallenged with
regard to any particular point, it may safely be accepted as true. The said position of
law was explained by the Hon'ble High Court of Delhi in Srichand and Shivan Das
v. State, 1985 SCC OnLine Del 210 : (1985) 28 DLT 360:
6. The principal submission made by the learned counsel for the
petitioner-Shivan Dass is that there is no iota of evidence on record to
establish that Shivan Dass was owner of the factory mentioned above
and further that his son Sri Chand was conducting the business on behalf
of Shivan Dass. . . However, on going through the evidence on record I
am not persuaded to accept this contention, it is for the reason that Food
Inspector Arun Kumar has deposed in unequivocal terms that the
proprietor of the factory was Shivan Dass. This statement of his was
allowed to go unchallenged and no question was put to him with regard
to the same during the course of cross-examination by the defence
counsel. Thus, there is no reason to disbelieve Food inspector-Arun
Kumar on this aspect of the matter. The law is well settled that where
the evidence of a witness is allowed to go unchallenged with regard
to any particular point it may safely be accepted as true. So, the
contention of counsel for the petitioner Shivan Dass that were ipse dixit
of Food Inspector Arun Kumar cannot be accepted as gospel truth is
absolutely devoid of any merit. It was certainly open to the defence to
elicit information from Arun Kumar with regard to the source of his
knowledge on the basis of which he had made the above statement but
unfortunately for the petitioner no such attempt was ever made.
(emphasis added)
22. Therefore, in light of the fact that the testimony of the complainant regarding his
financial capacity has gone unchallenged, the same is required to be accepted as true
and hence, the complainant is held to have proved his financial capacity. Therefore,
DEVANSH Digitally signed by
DEVANSHU SAJLAN
U SAJLAN Date: 2021.09.01
16:20:24 +05'30'
CC No. 14134/16 Baljeet Singh v. Jagpreet Singh 12 of 19
the present contention in relation to lack of financial capacity of the complainant to
advance the loan in question stands dismissed.
3. Contention 3: Violation of section 269SS IT Act.
23. It was further argued on behalf of the accused that Section 269 SS of Income Tax Act
prohibits a loan of more than INR 20,000 in cash, and accordingly, the existence of
the said provision creates a doubt that an amount of INR 3,50,000 would have been
given in cash as loan. It was further argued that there is no documentary record to
establish the factum of grant of loan.
24. It is a settled position of law that the breach of Section 269 SS of the Income Tax Act
does not make such a transaction null and void (Sheela Sharma v. Mahendra Pal,
2016 SCC OnLine Del 4696; Dilip Chawla v. Ravinder Kumar, 2017 SCC OnLine
Del 9753). To further substantiate, the penalty for breach of Section 269 SS of the
Income Tax Act is provided under Section 271D of the Income Tax Act, which does
not provide that such a transaction would be null and void.
25. Accordingly, no adverse inference can be drawn against the complainant for not
producing ITR to prove the fact of lending of loan to the accused.
26. Therefore, as far as the second ingredient is concerned, the accused has not been
able to rebut the presumption, since he has failed to raise any probable defence.
III. CONTENTION IN RELATION TO NON-FULFILMENT OF
THIRD INGREDIENT
1. Contention 1: The return memo does not bear the official seal of the bank
27. Learned counsel for the accused has raised one last contention in support of the
defence of the accused. It has been submitted that before presumption can be raised
under section 118 and 139 of the NI Act, the complainant is required to prove the
DEVANSH Digitally signed by
DEVANSHU SAJLAN
U SAJLAN Date: 2021.09.01
16:20:44 +05'30'
CC No. 14134/16 Baljeet Singh v. Jagpreet Singh 13 of 19
third ingredient, i.e., the complainant is required to prove that the cheque was
returned unpaid by the bank due to either insufficiency of funds in the account to
honour the cheque or that it exceeds the amount arranged to be paid from that account
on an agreement made with that bank. It has been argued that the returning memo
(Ex. CW 1/2), which highlights the factum of dishonour of cheque, does not bear the
official seal of the bank and hence, it cannot be read in evidence.
28. In order to prove the third ingredient, the complainant has relied upon the returning
memo Ex. CW1/2 which carries no stamp, signature or official logo of the drawee
bank. At this stage, it becomes relevant to make reference to Section 146 of NI Act
which reads as follows:
Bank's slip prima facie evidence of certain facts : The court shall, in respect of
every proceedings under this Chapter, on production of bank's slip or memo
having thereon the official mark denoting that the cheque has been
dishonoured, presume the fact of dishonour of such cheque, unless and until
such fact is disproved.
29. The presumption under section 146 of NI Act, therefore, arises only when the bank's
slip or memo has an official mark of the bank denoting that the cheque has been
dishonoured. In the present case, Ex. CW1/2 does not bear any official mark of the
drawee bank. There is no stamp/ seal/ signature of the bank official concerned to
show that the same had been issued by the said bank.
30. Learned counsel for the complainant, in response, has submitted that specific
pleadings were made in the complaint filed before the Court stating dishonour of the
said cheque. It was further submitted that during the cross-examination of the
complainant, no question was put to the complainant regarding the return memo and
hence, when there was no objection raised as to the admissibility of the return memo,
the said document stands proved. It has been forcefully submitted by learned counsel
for the complainant that since the accused has failed, during cross-examination, to
raise any opposition to the deposition of the complainant that the cheque was
DEVANSHU Digitally signed by
DEVANSHU SAJLAN
SAJLAN Date: 2021.09.01 16:21:20
+05'30'
CC No. 14134/16 Baljeet Singh v. Jagpreet Singh 14 of 19
dishonored, the accused cannot raise any objection to the admission of the return
memo (Ex. CW 1/2) at this stage.
31. I respectfully disagree with the argument of the learned counsel for the complainant.
The burden of proof clearly lies upon the complainant in the present case to prove
basic facts that would constitute an offence under section 138 of the NI Act. It is
necessary that there is proof of return or dishonour of the cheque in question before it
can be said that an offence under section 138 of the NI Act has been committed.
32. When the return memo (Ex. CW 1/2) produced in the present case by the complainant
does not bear official mark of the bank, no presumption can be raised that the cheque
in question has been dishonored. In such a situation, mere statement made in the
complaint, even though unrebutted during cross-examination, would not constitute
proof of dishonour of cheque, unless further evidence to corroborate the same was
placed on record on behalf of the complainant. It is a settled position of law that a
witness cannot depose in respect of the facts which are not in his personal knowledge,
and which have not been witnessed by him personally. The fact of dishonour of
cheque is not within the personal knowledge of the complainant. The complainant is
required to call the bank witness to prove the same (in those scenarios where the
presumption under section 146 NI Act is not available).
33. Thus, in absence of presumption under section 146 of NI in favour of the
complainant, the third ingredient of the offence under section 138 NI Act stands
unproved since in absence of the presumption under section 146 of NI Act, the
complainant was required to examine the bank witness in order to prove the factum of
dishonor of cheque, which he has failed to do.
34. Various Hon'ble High Courts have also held that in absence of a return memo bearing
the seal of the bank, presumption in relation to dishonor of cheque cannot be raised,
and the said judgments have been extracted below for reference:
DEVANSHU Digitally signed by DEVANSHU
SAJLAN
SAJLAN Date: 2021.09.01 16:21:41 +05'30'
CC No. 14134/16 Baljeet Singh v. Jagpreet Singh 15 of 19
(a) In Vandana v. Abhilasha, 2018 SCC OnLine Bom 2086, the Hon'ble Bombay High
Court has held that presumption of dishonor of cheque cannot be raised if the return
memo does not bear the official seal of the bank and in such a scenario, the
complainant would be required to lead further cogent evidence, for example, by
examining the bank official, in order to prove the factum of dishonor of cheque:
11. But, there cannot be any doubt about the fact that section 146 of the said
Act provides for one of the modes of proving dishonour of cheques and it
certainly cannot be the only mode of proving the same. In the present case,
the memo purportedly issued by the bank showing dishonour of cheque,
admittedly does not bear official mark of the bank. It was for this reason,
that the said document was not exhibited during evidence. Thus, the mode
specified in section 146 of the said Act was not satisfied in the present case
and consequently no presumption arose about dishonour of cheque in
question . . .
12. . . . [I]t is necessary to keep in mind that the present case concerns
criminal liability alleged against the respondent. Although proceedings
under the aforesaid Act are quasi criminal in nature, the fact is that when
the offence under section 138 of the said Act is said to have been proved,
criminal liability is fixed upon the accused (respondent in the present case)
and therefore, the evidence on record and the burden of proof have to be
analyzed on the touchstone of proof beyond reasonable doubt. The burden
of proof clearly lies upon the appellant in the present case to prove basic
facts that would constitute an offence under section 138 of the aforesaid
Act. Under the said provision the offence is deemed to have been committed,
the moment cheque in question is returned by the bank unpaid. Therefore, it is
necessary that there is proof of return or dishonour of the cheque in question
before it can be said that an offence under section 138 of the Act has been
committed.
13. When the complainant (appellant in the present case) asserted that the
cheque was returned or dishonoured, it was for her to prove this basic fact,
section 146 of the said Act provides that if the complainant places on record a
slip or memo issued by the bank having official mark of the bank thereon,
denoting that the cheque was dishonoured, it would be presumed that such
cheque was dishonoured until such fact was disproved. Thus, if such a
document was placed on record by the appellant in the present case, it would
constitute prima facie evidence of dishonour of cheque and burden would have
been entirely on the respondent to disprove such a fact. But, when the memo
produced in the present case by the appellant did not bear official mark of
DEVANSH Digitally signed by
DEVANSHU SAJLAN
U SAJLAN Date: 2021.09.01
16:22:05 +05'30'
CC No. 14134/16 Baljeet Singh v. Jagpreet Singh 16 of 19
the bank, there was no document as contemplated under section 146 of the
said Act to presume that the fact of dishonour of cheque had been proved
by the appellant. The burden continued to lie on the appellant to prove the
basic fact of dishonour of cheque, in the facts and circumstances of the
present case.
14. In such a situation, mere statement made in the statutory notice and
the complaint filed before the Court would not constitute proof of
dishonour of cheque, unless further evidence to corroborate the same was
placed on record on behalf of the appellant. The appellant is not justified in
claiming that such statements would suffice as proof of dishonour of cheque
because the respondent failed to enter the witness box in support of her
defence. As the complainant, it was for the appellant to prove the fact of
dishonour of cheque by cogent evidence. The appellant could have
examined the bank official to prove that the cheque had been indeed
dishonoured, but, she failed to do so.
(b) Further, in Tejendrasingh v. Ravindrakumar, 2019 SCC OnLine Bom 60 : (2019) 3
Mah LJ 612, it has been observed by the Hon'ble Bombay High Court that:
Admittedly, UCO Bank representative is not examined. Trial Court refused to
accept bank memo issued by that bank. It does not bear the seal of the bank.
I agree with the trial Court. The presumption under section 146 of the N.I.
Act will not come to his rescue. There has to be the seal on the bank slip
before the presumption as to dishonour can be drawn. I could have given
benefit of this lacunae even if proper person from SBI, that is signatory of the
letter, could have been examined. It seems that while conducting the
prosecution, these minor procedural aspects are overlooked. (emphasis added)
(c) Further, in Rajendrakumar v. State of Gujarat, 2011 SCC OnLine Guj 480, the
Hon'ble High Court of Gujrat upheld an order of acquittal of the accused inter-alia on
the ground that the debit memo and cheque returning memo brought on record by the
complainant did not bear stamp of any bank and thus, as per section 146 of NI Act,
the said documentary evidence could not be considered:
14. The trial Court has, after appreciating the oral as well as documentary
evidence, observed that the appellant and the opponent No. 2-accused knew
each other because of business relations between them. It is also observed by
the learned trial Judge that the prosecution has failed to prove ingredients of
Sections 118 and 139 of the Act. It is also observed by the learned trial
DEVANSH Digitally signed by
DEVANSHU SAJLAN
U SAJLAN 16:22:22 +05'30'
Date: 2021.09.01
CC No. 14134/16 Baljeet Singh v. Jagpreet Singh 17 of 19
Judge that cheque return memo and debit memo produced on record by
the original complainant does not bear stamp of any Bank and therefore,
as per Section 146 of the Act, the said documentary evidence cannot be
considered. It is also observed by the learned trial Judge that the amount of Rs.
01,00,000/- given by the original complainant to Hastak Corporation was
received by the original complainant-present appellant vide cheque No.
889014. Thus, the cheque No. 999015 was towards the interest of the amount
in question. Looking to this fact, present opponent No. 2-accused is proved his
case. It is also observed by the learned Judge that the prosecution has failed to
prove beyond reasonable doubt the ingredient of Section 138 of the Negotiable
Instruments Act. The learned trial Judge has observed that there are serious
lacuna in the oral as well as documentary evidence of prosecution. Nothing is
produced on record of this appeal to rebut the concrete findings of the Trial
Court.
15. I find that the findings recorded by the trial Court are absolutely just
and proper and in recording the said findings, no illegality or infirmity has
been committed by it.
16. I am, therefore, in complete agreement with the findings, ultimate
conclusion and the resultant order of acquittal recorded by the trial Court
and hence find no reasons to interfere with the same.
35. Based on the aforesaid settled position of law, since the complainant has failed to
place on record original returning memo from drawee bank or examine the bank
official in this regard, the complainant has failed to prove on record that cheque in
question was dishonoured/returned unpaid on presentation. In these circumstances,
complainant cannot take aid of presumptions contained in Section 118, Section 139 or
Section 146 of NI Act to fasten criminal liability upon the accused.
F. CONCLUSION
36. In the backdrop of the above discussion, I am of the considered opinion that the
accused has successfully raised a probable defence in his favour and the complainant
has failed to prove his case beyond reasonable doubt.
37. In the result of analysis of the present case, the accused Jagpreet Singh is hereby
acquitted from the charge of offence punishable under Section 138 of the Negotiable
Instruments Act. Accused is directed to furnish bail bond and surety bond in terms
DEVANSHU Digitally signed by
DEVANSHU SAJLAN
SAJLAN Date: 2021.09.01
16:22:42 +05'30'
CC No. 14134/16 Baljeet Singh v. Jagpreet Singh 18 of 19
of section 437-A CrPC. Subject to compliance of above said direction in terms of
section 437-A CrPC, present bail bond and surety bond of accused are cancelled, and
the surety is discharged. Documents of surety be returned after cancellation of
endorsements thereon.
DEVANSH Digitally signed by
DEVANSHU SAJLAN
ORDER :- ACQUITTED U SAJLAN Date: 2021.09.01 16:23:01 +05'30' Announced in the Open (Devanshu Sajlan) Court on 01.09.2021 MM (NI Act-05) , West, THC DELHI CC No. 14134/16 Baljeet Singh v. Jagpreet Singh 19 of 19