Delhi District Court
Hon. Supreme Court In Krishan Janardhan ... vs . Dattatraya G. Hegde on 27 February, 2013
IN THE COURT OF SHRI VINOD KUMAR MEENA, CIVIL
JUDGE03, NEW DELHI DISTRICT, PATIALA HOUSE COURTS,
NEW DELHI
COMPLAINT NO. 626/12
SH. HEMANT KUMAR NAUTIYAL
V
SH. PAWAN PANCHPAL
Case ID No. : 02403R0351132009
CC No. : 626/12
Date of Institution of the Complaint : 31.10.07
Name and address of Complainant : Sh. Hemant Kumar Nautiyal
s/o O. P. Nautiyal,
r/o 7/98, Malviya Nagar,
New Delhi110017
Name, parentage and address of
the accused : Sh. Pawan Panchpal
r/o C5/426, Milan Vihar, 72,
I. P. Extension,Delhi
Offence Complained of : U/s 138 of Negotiable
Instruments Act, 1881
Offence Proved : No
Plea of the Accused in his
examination. : Not guilty
Date of reservation of Order : 15.02.2013
Final Order : Acquitted
Date of Order : 27.02.2013
Police Station : Malviya Nagar
JUDGMENT
1. The present complaint was filed by complainant Sh. Hemant Kumar Nautiyal. It is the case of complainant that accused had asked for some financial help from the complainant being his friend. On the verbal request of accused, complainant had paid him Rs. 50,000/ as friendly loan in the month of April 2007 for which accused had issued a cheque bearing no. 175776 for Rs. 50,000/duly signed and filled amount of Rs. 50,000/ in words and figure by him in favour of complainant. He has also told 1 of pages 17 complainant to fill the dated and his name in the cheque himself and present the same after 31st May, 2007.
2. The complainant Hemant Kumar Nautiyal bonafidely presented the impugned cheque to his bankers in the month of August, 2007 but same was returned unpaid/dishonoured due to 'insufficient funds'. The impugned cheque was represented by the complainant on18.09.2007 but same returned dishonoured. Therefore, accused failed to discharge his liabilities despite the service of the legal demand notice dated 06.10.2007 within stipulated time. Thus the accused committed an offence U/s 138 NI Act .
Bail bond and Notice
3. The court took cognizance of the offence U/s 138 of NI Act on and issued process to the accused. The accused was later admitted to bail in the sum of Rs. 10,000/ alongwith one surety of like amount on 25.03.2008. After hearing arguments on Notice, Notice u/s 251 Cr. P.C was served upon to the accused on 16.12.2008 alleging that the impugned cheque was dishonored, to which the accused pleaded not guilty and claimed trial.
4. Thereafter, the case was fixed for complainant's evidence and complainant was directed to supply copy of the affidavit and annexed documents to the accused.
Substance of complainant's evidence and cross examination
5. According to the list of witnesses filed by the complainant in pre summoning, the complainant had wished to examine himself only as CW1.
6. CW1 Hemant Kumar Nautiyal complainant himself, adopted and tendered her affidavit vide Ex. CW1/L already filed in presummoning stage along with the documents exhibited as Ex. CW1/A to CW1/J and present complaint vide Ex. CW1/K, which are as follows:
(i) Document Ex. CW1/A is impugned cheque bearing no. 175776 dated 06.06.2007.
(ii) Document Ex. CW1/B return memo.
(iii) Document Ex. CW1/C is information letter of drawer banker
(iv) Document Ex.CW1/D Legal notice dated06.10.2007
(v) Document Ex. CW1/E to Ex. CW1/H are postal receipts, courier receipt and AD card showing receipt of notice by the accused
(vi) Document Ex. CW1/I is reply of the notice on behalf of accused.
2 of pages 17
vii) Document Ex. CW1/J copies of the e mail sent by the accused to the deponent for collecting the cheque amount after return of the impugned cheque.
In his crossexamination on 03.11.09 CW1 has stated that he used to work in the same company where the accused Pawan was working and Accused Pawan was his boss being head of the API which was an American based company. He further deposed that he used to get salary from US Company into his account and accused Pawan had given him about 6 to 6.50 lakhs by way of cheque for expenses reimbursement from his personal account as company was not having any account. CW1 further admitted that accused Pawan used to handle all the financial matters of the company and he (complainant) was also interviewed by accused Pawan before the joining of the company. He further admitted that accused had stopped coming in the office after his leaving the office and he (CW1) had presented the cheque of Rs. 50,000/. He further deposed that it was in his knowledge the accused had resumed the API. He also admitted that he (CW1) had left the services of the company. CW1 further denied that he used to spread rumors against accused Pawan in the Higher Officials due to which he was appointed in place of accused. He had also denied that he had leveled allegation against accused Pawan for fund embezzlement so that he could be promoted in place of accused Pawan. Complainant also stated that he was senior most official of API in India. He had denied that an enquiry was initiated against accused Pawan and later on accused Pawan was found to be innocent. CW1 further denied that all the allegations made by him against accused in the office were found to be base less and he was re remanded by the incharge of the company and was also asked to leave the company. He had also denied that accused Pawan had issued a cheque for a sum of Rs. 50,000/ which was lost by him and and in lieu of the same accused had also issued another cheque of Rs. 50,000/ on behalf of company. He also stated that he had settled all his accounts with the company at the time of leaving the same. However, an amount of Rs. 75,000/ remained unsettled and same was to be given to accused Pawan by the company. CW1 was also asked by the company to settle the amount with the accused. He further denied that accused was not entitled to give him Rs. 50,000/ as the same was to be given by the company. CW1 also deposed that he had given a friendly loan to accused in the month of April 2007 against which accused had given him an undated cheque which was duly signed and amount filled in figures and number by accused. However, date on the same was mentioned by CW1. CW1 further admitted that he had written the date on cheque as 06.06.2007 and present the same on 15.09.07 for the second time. CW1 could not recall the date as to when he had presented the cheque for the first time.
3 of pages 17 On further crossexamination on 26.04.2010, CW1 stated that he had not filed the deposit slip of the bank which was deposit in the bank for the first time. He further stated that he himself had mentioned the dated 06.06.2007 over the cheque Ex. CW1/A in the month of April, 2007 and did not inform about making entry over the cheque to accused. He further admitted that during September, 2007 some email correspondence took place between him and the accused and in some email correspondence of accused, accused had asked him to return the old cheque. Since CW1 did not know about any old cheque so he had not talked/asked about the old cheque from the accused Pawan Panchwal. He further told that he had never stated before the Court that the impugned cheque was given in lieu of his outstanding dues. Earlier also accused had taken loan from him and no paper work was done. CW1 also admitted that he might had taken more than Rs.6 Lakhs from the accused through cheque for company expenses which were incurred for official use. CW1 had admitted that document Ex. CW1/D1 was the correspondence through email between me and accused in which is was mentioned that "return the money or I have to file case against you after 15 days as per notice'. CW1 could not tell whether the cheque bearing no. 175778 was also issued by the accused in his favour for Rs. 50,000/ drawn on HDFC Bank K.G. Marg, New Delhi and same was cleared on 13.02.07. He had never met the accused personally after the dishonouring the same except in the Court. He had presented the cheque for the second time after dishonouring the same at first time and accused had contacted him through email to return the cheque as he had already made the payment of the said cheque to him. CW1 also told as the cheque was time barred, so he had presented the same for the second time, in the meantime accused had also asked him to contact his lawyer for collecting Rs. 50,000/ for return of the impugned cheque but the lawyer had asked for Rs. 10,000/ to return back Rs. 50,000/. He got issued legal notice dated 06.10.2007 to accused only once. He denied that he had stolen cheque no. 175776 without date from the office of the accused and pretended that the said cheque had been misplaced. As the earlier cheque was lost/misplaced the accused had issued another cheque bearing no.175778 for Rs. 50,000/ which was cleared on 13.05.07. He further denied that he had misused the earlier cheque bearing no. 175776 and without the consent of the accused he had mentioned the date over the cheque and deposited the same for getting unwanted monetary benefit or that he had manipulated the dated on the cheque deliberately or that he wanted to settle his old score with the accused and wanted to get his position in API Company or that he was expelled from the API Company because of his financial irregularities committed by him in the company. He also admitted that accused was his Boss in the API company for the second time also, however, he denied that he had leveled any allegations against the accused or that the accused as expelled from his duties for the first time because of his complaint. He also denied that 4 of pages 17 accused had not taken any loan from him as he was his boss. He admitted that initially all the money of the API Company, which was an American based used to come in the account of the accused. CW1 was not aware as to how much money was lying in the account of accused when the accused took the loan amount from him. He had further admitted that accused had called him and interviewed him as both of them belonged to Utrranchal and in email correspondence the accused had clearly mentioned that he had re issued him ( complainant) a cheque bearing no. 0175778 for Rs. 50,000/ which was cleared on 13.02.2007. He had also admitted that the General Manager of Asia Pacific along with accused and him used to attend the meeting which were used to be held in any three star hotel and some times accused used to pay the bills and some time the General Manager and bills of the hotel were amounting to Rs. 5000/ to Rs. 10,000/ etc. CW1 also admitted that salary of the staff members of the company used to be paid by the accused from his account. During his (CW1) service in the company accused might had given him the cheuqes 5060 time and except the impugned cheque no other cheque was dishonoured. He further deposed that for about 1520 times he had taken the cheque for Rs. 50,000/ from the accused. Complainant was also well aware about the fact that accused had started his own company but he did not know about the assets of company. CW1 also denied that in order to malign the image of accused he had filed the present false complaint case against the accused.
Substance of statement of accused recorded U/s 313 Cr. P.C.
7. All the incriminating circumstances were put to the accused and his statement U/s. 313 Cr. PC was recorded on21.10.2010 to which he stated to be incorrect and also stated that neither he had borrowed any amount from the complainant nor he had issued any cheque in respect of the same. He had given some self signed blank cheques to the accountant in his office for office purpose/expenses and complainant had malafidely used those cheques against him. The complainant had filed the present complaint against him to malign his image in the company. The accused preferred to lead defence evidence.
Defence pleaded by the accused
8. From the cross examination of the complainant and the statement of the accused recorded U/s 313 Cr. P.C, it appears that the accused in his defence pleaded that the impugned cheque was given to the complainant for clearing office expenses and that the complainant misused the cheque.
5 of pages 17 Substance of Defence Evidence
9. On 27.04.2011 accused has examined himself as DW1 and stated that he used to work for API as a business Manager ( India) and branch of the same was opened by him in November 2005 and worked there till 2007. In January 2006 he had appointed complainant Hemant Kumar Nautiyal as Application engineer in his office. Two other members of his staff were Mr. Ravinder Bisht ( Office Co ordinator) and Arpita ( Account officer). He further deposed that amount being received from API, USA was being received in his personal account as ASPI had not opened its Bank account in India till March 2007. He further deposed that salary of the complainant for first four five months was paid from his account and thereafter, he had made arrangement for payment of the salary directly from API, USA. He further stated that cheques for payment of travel expenses to the complainant used to be issued in his own name with date and particulars. As he also used to travel for business purposes, he used to keep one blank cheque duly signed by filing in the amount in his officer to be used either by Ravinder or by Arpita for withdrawal of money for office expenses. DW1 has also stated that he had handed over the impugned cheque to the Mr. Ravinder in the month of January 2007 for office expenses when he ( DW1) had to travel for business purposes. He had returned back in the first week of February 2007 and it was told to him by Mr. Ravinder that the impugned cheque was missing from office. Thereafter, DW1 had issued number of cheques from the same cheque book from which the impugned cheque was issued and all of them were got encashed and one of the cheque for the sum of Rs, 50,000/was encashed in favour of complainant. However, he had not filed any police complaint or any complaint with the bank regarding the loss of cheque as the same got missing from the office.
It is was also deposed by the DW1 that complainant had made complaints against him with the senior officials in different ways consequent to which I was asked by the company not to attend the office from May 2007 onwards and when company came to know about the conduct of the complainant, he ( CW1) was removed in November 2007 and reappointed him in January 2008. DW1 has also stated that after receiving the legal notice he had replied the same through email stating that he has already issued a new cheque replacing the impugned cheque but after perusing his bank statement he realised that the impugned cheque was the same cheque which was missing from his office. DW1 had paid approximately Rs. 6 Lakhs to 6.5 lakhs and there was not reason to take any friendly loan from him. He had also stated that all the cheques issued to complainant were in his ( DW1) handwriting but the details filled in the 6 of pages 17 impugned cheque were not in his handwriting. DW1 had also replied the legal notice of the complainant through his counsel.
On 30.07.2011 DW1 recalled for further crossexamination and he had placed on records his statement of account for the period from 01.01.2006 to 31.03.2007 vide Ex. DW1/1 and statement of accounts from 28.02.2007 to 29.02.2007 vide Ex. DW1/2 . He further stated that he had started using his cheque book on which the impugned cheque was a part from December, 2006 and all the cheques of the cheque book got exhausted on 22.03.2007 and impugned cheque was not presented by the complainant during above mentioned intervening period. Same was presented on 17.08.2007./ DW1 had issued another cheque bearing no. 17578 to the complainant of his office expenses which was got encased on 13.02.2007. He had also stated that he had no liability to pay any amount to the complainant and the impugned cheque had been fraudulently misused by the complainant.
On 17.02.2012 in his cross examination he admitted that he along with accused used to work together. Accused was appointed as application engineer in API. DW1 was on the rolls of the company from 2005 to March 2007 and against from January 2008 to January, 2009. He had good terms with the CEO of the company . He further admitted that he was removed from the company in the year 2007. He further stated that he had resigned from the services as he had started his own company. He further admitted that the finances received from API (US) used to be deposited in his account as the company did not have any bank account in India. The cheques used to be issued and duly signed by him. The accountant of the company used to look after the accounts of the company to segregate his finances from the finance of the company. He had also admitted that impugned cheque was duly signed by him and the amount in figures was in his handwriting, however the name and date might have been in the handwriting of the complainant. He also admitted that he had issued the impugned cheque, however, same was issued for the expenses of the company and got misplaced. The cheques used to be in the custody of the accountant of the office. He had handed over only one cheque the accountant before going out on tour and it was the impugned cheque. He had not informed API ( US) as it was issued from his personal account and handed not filed any complaint with the police authorities. He denied that the impugned cheque was given to the complainant in lieu of the loan amount taken by him from complainant. He had also admitted that email Ex. CW1/J (III) had been written and sent by him.
On confronting with the email dated 15.08.2008, DW1 admitted that he had received the same. He further voluntarily stated that the above mentioned email related to the time after his resignation from the company 7 of pages 17 and same contained only the allegations of the sender against him. He further voluntarily stated that he had also replied the same and complainant had not filed the copy of the same. DW1 further voluntarily stated that Mr. Lee and complainant were removed from the office in December 2007 and reinstated him ( DW1) in January 2008. He had not financial dealing with the complainant and used to withdraw the company's money for his personal use. He denied that he was deposing falsely.
10. On 27.04.2011 accused had also produced Sh. Ravinder Singh as DW2 who had stated that he was working as office peon in API since 2006 and worked there for about 67 months. In January 2006 accused had handed over him one duly signed blank cheque after filling the amount. The said cheque was missing from the drawer of the office and he had told the fact to the accused when he came back from the tour. He further stated that handwriting appearing on the rupees and signatures column in the impugned cheque Ex. CW1/A is that of the accused but the handwriting appearing in the pay and date column is not that of the accused.
In his crossexamination he had stated that he could produce the salary register of the company before the Court to show that he was working for the said company. He was appointed in the company by accused Pawan Panchpal. He did not know the General Manager of API. He had further deposed that he had appeared before the Court to depose regarding the missing of the impugned cheques. The cheque was duly signed and amount was filled in the handwriting of the accused and name and date column were blank. DW2 also deposed that he used to give these kinds of cheques to get encashed as "self" for the office expenses. He denied that he did not have information about the above mentioned incident and was deposing falsely at the instance of the accused.
Thereafter, accused did not produce any other defence witness and defence evidence was closed vide order dated17.02.2012 and matter was listed Judgment and Reasons
11. Final arguments of both the parties were heard and later on clarifications were sought.
12. It has been observed by the Hon'ble Supreme Court in Rangappa v Sri Mohan1, that ordinarily in cheque bouncing cases, what the courts have to consider is whether the ingredients of the offence enumerated in Section 1 2010 Cri. L.J. 2871 8 of pages 17 138 of the Act have been met and if so, whether the accused was able to rebut the statutory presumption contemplated by Section 139 of the Act. It was further observed that the test to be applied in cases U/s 138 NI Act is one of preponderance of probabilities, which has been held in various other case law as well. For the purpose of reaching a decision in the present matter, it is thus important to first decide whether the complainant has been able to fulfill the ingredients as enumerated under section 138 NI Act and if yes, then decide if the accused has been able to rebut the statutory presumption contemplated by Section 139 of NI Act.
13. Further in M/s Kumar Exports v. M/s Sharma Carpets2 it has been observed as follows: The accused in a trial U/s 138 NI Act has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case the non existence of consideration or debt is so probable that a prudent man ought to suppose that no consideration or debt existed. To rebut the statutory presumption the accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial.
14. The essential ingredients which need be proved for constituting the offence under Section 138 NI Act were discussed in the case Jugesh Sehgal v. Shamsher Singh Gogi3. In view of the judgment and also the provisions U/s 138 NI Act, an offence U/s 138 NI Act is committed when a person draws a cheque 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, and that cheque is returned by the bank unpaid due to "insufficient funds" or "exceeds arrangements" or any other such reasons. Further, as per proviso to Section 138 NI Act, the drawer shall be liable only if;
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 validity, whichever is earlier;
B) the holder of the cheque makes a demand for the payment of the cheque amount by giving a legal notice to the drawer within 30 days of receipt of information by him from the bank regarding dishonor;
C) the drawer of the cheque fails to make the payment to the drawee within 15 days from receipt of legal notice.
2 AIR 2011 SC 1518 3 2009 (9) SCALE 455 9 of pages 17
15. On perusal of the file it is seen that the cheques bearing no.175776 dated 06.06.2007 drawn on HDFC Bank, Surya Kiran building, 19 Kasturba Gandhi Marg, New Delhi was given to the complainant allegedly towards the repayment of friendly loan amount. However, when the complainant presented the impugned cheque to her bankers the same cheque was returned unpaid/dishonoured with remarks mentioned on a separate " payment stopped by the drawer". Thereafter, a legal notice dated 06.10.2007 was sent to the accused within stipulated time, however, accused failed to discharge his liabilities despite the service of the legal demand notice within stipulated time i.e 15 days from the service of legal notice. Thus the complainant has filed sufficient evidence to raise the presumption u/s 139 NI Act.
16. The issue is whether the accused has been able to rebut the presumption U/s 139 NI Act. In order to answer this question, it is important to see the cross examination of the complainant and defence of the accused.
17. The documents filed by the complainant and the accused have been carefully perused. After going through all the records placed in the case file by both the parties, evidence adduced by both the parties and after hearing the submissions of both the parties, it came to the fore that the accused is relying on the defence that :
1. The case is filed after the limitation period has expired as the legal notice was sent by way of email as on 03.09.2007, however, the case has been filed on 31.10.2007 and
2. there is no legal liability against him towards the complainant and the complainant has misused the cheque; the complaint is based on false and concocted facts.
18. As far as the first defence is concerned i.e . the case is filed after the limitation period has expired as the legal notice was sent by way of email as on 03.09.2007, however, the case has been filed on 31.10.2007, ld. Counsel for accused raised the point that the accused has already served legal notice on 3rd September 2007 by way of email and the present case is filed on 31.10.2007 and accordingly the present matter is time barred and liable to be dismissed on the ground of limitation. Per contra it is submitted by the ld. Counsel for the complainant that he has served the legal notice 06.10.2007 and according same is not hit by limitation. Perusal of the evidence as well as court record it is revealed that the computer generated 10 of pages 17 copy of the e mail communication has been placed on the record and the court is mindful about the fact that legal notice may be served through fax, email or by post as provided in section 94 of the NI Act.
Now the court is confronted the question whether the computer generated copy of the email can be read in the evidence. Section 65B of the Indian evidence act provide that a computer generated document may be taken in the evidence if same is accompanied with the certificate as provided in the section 65B of the evidence act.
In the present matter the computer generated copy of the e mail communication is not accompanied with the certificate as enumerated in section 65B of the Indian evidence act. So it becomes inevitable to discuss the gist of the principle laid by Hon'ble Supreme court in State v Mohd. Afjal and ors 2003 iv AD(cr.) 205 and by Hon'ble High Court of Delhi in Devesh Kumar v State Cr. Appeal no. 793/2004 decided on 10.02.2010 wherein it was specifically provided that in order to prove a computer generated document the requirement of section 65B of the NI Act has to be satisfied. In Devesh Kumar v state (supra) it was observed that if neither a certification from a responsible officer of the company having a control over the computer or authorized to generated a print out from the computer was proved nor was anybody from the company examined to state that computer generated sheets were generated through the computer storing the information and the information generated was stored in the ordinary course of business of the service provider; then it is not admitted in the evidence as condition under section 65B are not fulfilled.
After going through the above mentioned observations the Court is of the view that the computer generated email communication can not be read in evidence as same are not accompanied with the certificate u/s 65 B of Indian Evidence Act. Accordingly, the plea of the accused w.r.t the limitation on the ground of legal notice by way of email is not sustainable as the legal notice dated 06.10.2007 has been served on the accused through registered post and courier and the case has been filed on 31.10.2007. Same is within limitation.
19. As far as second defence is concerned i.e there is no legal liability against him towards the complainant and the complainant has misused the cheque; the complaint is based on false and concocted facts.
It is submitted by the Ld. Counsel for the accused that the present case is based on totally false and concocted cases; there is no legal liability against the complainant. He further submitted that the averments of the 11 of pages 17 complainant in his evidence as well as his complaint are marred with contradictions which prove that the complainant has filed a case false and concocted facts. Ld. Counsel for accused also argued that the complainant was appointed as employee in the company by the accused and the accused has misused the cheque which was given him for the purpose of daily company expenses when the accused went out for the business purposes. It is also submitted by Ld. Counsel for accused that the impugned cheque in the present case is bearing number as 175776 and the same bears the date as 06.06.2007. However, the cheque bearing number 175775,175777, 175778, 175779 and 175781 have already been encashed in the month of February 2007 itself, admittedly for office expenses. So, it is clear that complainant has misused the cheques.
20. The Court has observed that the complainant in his complaint avered that accused had issued a post dated cheque bearing no. 175776 dated 06.06.2007 for the sum of Rs. 50,000/. The similar averment has been made in the evidence by way of affidavit. However, in the cross examination, it is submitted by the complainant that the impugned cheque was given for the discharge of legal liability without mentioning the date of the said cheques. The relevant para from the crossexamination of CW1 is quoted as under: " I had given a friendly loan to the accused in the month of April 2007 and he had given me the cheque of the same without mentioning the date of the said cheque. Figures in words and numbers as well as signatures was put by the accused in the said cheque. I had mentioned the date on the cheque"
21. The court also observed that it is categorically admitted by the complainant that he has received at least 1012 cheques of Rs. 50,000/ drawn by the accused and all have been duly honoured. He also admitted that the accused had given him about 6 to 6.5 lakhs by way of cheques for expenses, reimbursement from his personal account because company was not having any account.
The Court also observed after perusing the document Ex. DW1/1 which is statement of account, that all the cheques in the sequence from 175773 to 175788 have been duly encashed in the month of February itself admittedly for the purpose of office expenses and it is very unlikely that the cheque bearing number 175776 had been issued by the accused in the month of April 2007. The Court also found it very strange that a employer has 12 of pages 17 taken a loan from the employee, specially in a case where he has admittedly given almost 6 to 6.5 lakhs to the complainant admittedly for office expenses. The Court also observed that bare perusal of cheque in question reveals that the inks used for putting signature and filing the amount on cheuque and filing rest of the particulars are different. No person if filing the cheque contemporaneously with signatures, would use two different pens/inks. The use of different ink indicate that signatures along with amount and the other particulars were filled at different times. It is a vital circumstance particularly considering the defence plea and unsatisfactory testimony of CW1 w.r.t issuance of cheque and the admitted fact that the accused used to give cheques for the purpose of office expenses of the company from his personal account as admittedly company did not have any separate account. The same seems material in the light that the cheques in the sequence from 175773 to 175788 have been duly encashed in the month of February itself admittedly for the purpose of office expenses. The Court also found that no written receipt was taken by the complainant at the time of giving the loan of Rs. 50,000/, the complainant also failed to give the date when the loan was given to the accused.
22. From the aforesaid discussions, the following position has crystallised:
The complainant's story of friendly loan is preposterous and does not inspire confidence of this Court.
It is now trite that the accused may rebut the presumptions from the circumstances of the case and need not lead positive evidence for rebuttal. At this stage, the court deem it fit to quote certain observations as made by Hon. Supreme Court in Krishan Janardhan Bhat vs. Dattatraya G. Hegde 4 .
"...20. Indisputably, a mandatory presumption is required to be raised in terms of Section 118
(b) and Section 139 of the Act. Section 13 (1) of the Act defines "negotiable instrument" to mean " a promissory note, bill of exchange or cheque payable either to order or to bearer."
Section 138 of the Act has three ingredients, viz:
(i) that there is a legally enforceable debt;
(ii) that the cheque was drawn from the account of bank for discharge in whole or in part of any debt or other liability which
4. AIR 2008, Supreme Court 1325 13 of pages 17 presupposes a legally enforceable debt; and
(iii) that the cheque so issued had been returned due to insufficiency of funds.
21. The proviso appended to the said section provides for compliance of legal requirements before a complaint petition can be acted upon by a Court of law. Section 139 of the Act merely raised a presumption in regard to the second aspect of the matter. Existence of legally recoverable debt is not a matter of presumption Under Section 139 of the Act. It merely raises a presumption in favour of a holder of the cheque that the same has been issued for discharge of any debt or other liability.
24. In Bharat Barrel & Drum Manufacturing Companyvs.Amin chand Pyarelal5 interpreting Section 118 (a) of the Act, this Court opined: "Upon consideration of various judgments as noted herein above, the position of law which emerges is that once execution of the promissory note is admitted, the presumption under Section 118 (a) would arise that it is supported by a consideration. Such a presumption is rebuttal.
The defendant can prove the nonexistence of a consideration by raising a probable defence. If the defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the plaintiff who will be obliged to prove it as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument. The burden upon the defendant of proving the nonexistence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies. In such an even, the plaintiff is entitled under law to rely upon all the evidence led in the case including that of the plaintiff as well. In case, where the defendant fails to discharge the
5. 1999 AIR SCW636, para 12.
14 of pages 17
initial onus of proof by showing the non
existence of the consideration, the plaintiff
would invariably to be held entitled to the benefit of presumption arising under Section 118 (a) in his favour. The Court may not insist upon the defendant to disprove the existence of consideration by leading direct evidence as the existence of negative evidence is neither possible not contemplated and even if led, is to be seen with a doubt..." (emphasis supplied)
25. Furthermore, whereas prosecution must prove the guilt of an accused beyond all reasonable doubt, the standard of proof so as to prove a defence on the part of an accused is "preponderance of probabilities". Inference of preponderance of probabilities can be drawn not only from the materials brought on records by the parties but also by reference to the circumstances upon which he relies.(emphasis supplied) A statutory presumption has an evidentiary value. The question as to whether the presumption whether stood rebutted or not, must, therefore, be determined keeping in view the other evidences on record. For the said purpose, stepping into the witness box by the appellant is not imperative. In a case of this nature, where the chances of false implication cannot be ruled out, the background fact and the conduct of the parties together with their legal requirements are required to be taken into consideration."
23. In Kumar Exports v. Sharma Carpets6 discussing at length the question of the rebuttal of the presumption, it was observed:
"....Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debtor liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on to the complainant. The accused may also rely upon presumptions of
6. (2009) 2 SCC 513 15 of pages 17 fact,for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arising under Sections 118 and 139 of The Act. The accused has also an option to prove the non existence of consideration and debt or liability either by letting in evidence or in some clear and exceptional cases, from the case set out by the complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial...."
24. In Birender Singh Vs. State (NCT of Delhi) and Anr 7. it was held:
"5. There is no doubt that the burden rests on the accused to rebut the presumption as raised under Sections 139 and 118 of the Negotiable Instruments Act. However, this presumption can be rebutted by the accused not merely by examining his own witnesses but even by cross examination of the complainant and his witnesses and bringing out on record, through cross examination,that the complainant was altar and there was no privity of contract between the complainant and the accused and cheques were misused."
25. As quoted above, the standard of proof so as to establish a defence on the part of an accused is 'preponderance of probabilities'. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which he relies. After carefully scrutinizing and analyzing the evidence together with the circumstances discussed above, there is no doubt in my mind that the accused has come up with a highly probable defence. I am of the opinion that there is sufficient material on record to displace the presumptions raised under the Act. In fact the circumstances and material on record contradict the averments made in the complaint and rather indicate towards the fact that the complainant has in fact instituted a false and fabricated complaint.
26. In totality of the circumstances and the discussions above, I am of the considered view that the accused has proved his defence on the basis of 7 I (2008) BC 452, 16 of pages 17 preponderance of probabilities and successfully rebutted the presumptions raised under the Act.
27. In the considered opinion of the Court, in view of the legal provisions and case law discussed, the accused is held not guilty for the offence u/s 138 NI Act and is accordingly, acquitted.
Pronounced in open Court (Vinod Kumar Meena)
on 27thFebruary,2013 Civil Judge03/NDD
PHC/New Delhi
17 of pages 17