Delhi District Court
Manjeet Singh vs Suraj Vij on 8 March, 2022
IN THE COURT OF MS AISHWARYA SINGH KASHYAP,
METROPOLITAN MAGISTRATE (NI ACT),
KARKARDOOMA COURTS, DELHI
Manjeet Singh Vs Suraj Vij
2185/2019 [Krishna Nagar]
CNR Number: DLET020041902017
Manjeet Singh
S/o Sh Harinder Singh,
R/o H.No.61, Gali No.13, Indra Park, Chander Nagar
Delhi-110051 .......... Complainant
Vs
Suraj Vij
S/o Sh Raj Kumar Vij,
R/o 22-A/6, New Lahore Street No.11, Shastri Nagar, Gandhi Nagar,
Delhi-110031 .......Accused
Complaint Case No.: 2185/2017
Date of Institution: 17.07.2017
Offence alleged: Section 138 Negotiable Instruments Act,
1881
Plea of the accused: Pleaded not guilty
Final Order: Acquittal
Date of Decision: 08.03.2022
Argued By:
Ld. Counsel for the Complainant- Shri Kulvinder Singh
Ld. Counsel for the Accused- Ms Babita Rana
AISHWARYA Digitally signed by AISHWARYA
SINGH KASHYAP
SINGH KASHYAP Date: 2022.03.09 01:51:49
+05'30'
1 of 13
Manjeet Singh vs Suraj Vij CC 2185/2017
JUDGEMENT
Factual Matrix
1. The complaint is based on alleged facts that the parties shared good friendly relations wherein in October 2016, Mr Manjeet Singh (hereinafter 'the complainant') was approached by Mr Suraj Vij (hereinafter 'the accused') for a friendly loan of Rs 2,75,000/- for purchase of garments for his shop. A promissory note in this regard was executed on 26.10.2016. After the elapse of six months, upon being approached by the complainant for repayment, the accused issued a cheque in favour of the complainant bearing no. 201640 dated 04.04.2017 drawn on State Bank of India, Geeta Colony, Delhi-110031 (hereinafter, 'the cheque in question'). Upon presentment, the cheque in question was dishonoured with remarks "Funds Insufficient" vide return memos dated 10.04.2017 and 17.05.2017 respectively. The complainant served the legal demand notice on the accused dated 19.05.2017. On failure of the accused to pay the amount within 15 days, the complainant company filed the instant complaint within the period of limitation for committing the offence under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter 'The Act').
Pre-summoning Evidence, Cognizance and Notice
2. Pre-summoning evidence was led by the complainant and the Ld. Predecessor took cognizance and issued summons vide order dated 17.07.2017. The accused entered appearance and notice under Section 251 of the Code of Criminal Procedure, 1973 (hereinafter, 'CrPC') for the offence under Section 138 Digitally signed by AISHWARYA AISHWARYA SINGH KASHYAP SINGH KASHYAP Date: 2022.03.09 01:52:03 +05'30' 2 of 13 Manjeet Singh vs Suraj Vij CC 2185/2017 was served upon accused on 04.09.2017, to which he pleaded not guilty and claimed trial.
Ans. I have received the legal demand notice. Ans. I do not plead guilty and claim trial.
Plea of defence The cheque in question was given by me to the complainant in March, 2016 for the purpose of arranging loan from the bank. I have not taken any loan from the complainant whatsoever. I was made to sign on Mark-A (Pronote) for the purpose of arranging loan but no loan was arranged.
Complainant's Evidence
3. During the trial, the complainant has led the documentary evidence against the accused to prove his case.
Documentary Evidence
I. Ex. Mark A: Copy of Promissory Note
II. Ex. CW1/1: Cheque in Question
III. Ex. CW1/2,3: Return Memos
IV. Ex. CW1/4: Legal Demand Notice
V. Ex. CW1/5: Postal Receipt
IV. Ex. CW1/6: Reply to Legal Demand Notice
V. Ex. CW1/A: Evidence by way of Affidavit
Statement of Accused
4. Thereafter, 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 on 18.11.2019. Therein, the accused denied all the allegations against him and stated as hereunder:
1. It is correct that cheque in question bears my signature, name of my bank and my account number. However, I did not fill the body of cheques in question.
2. Yes, we are good friends.
3. No, I had not approached the complainant for loan of Rs 2,75,000/- on 26.10.2016.
4. No, I had not taken any loan. AISHWARYA Digitally signed by AISHWARYA SINGH KASHYAP SINGH KASHYAP Date: 2022.03.09 01:52:14 +05'30' 3 of 13 Manjeet Singh vs Suraj Vij CC 2185/2017
5. I had given the cheque in question to the complainant as I told the complainant to get sanctioned loan of Rs 1,00,000/-. However, he fails to get sanction any loan from the bank. I do not have any liability towards the complainant.
6. Yes, I want to lead evidence in my defence.
Defence Evidence
5. The accused opted to lead defence evidence whereby, upon his application under Section 315 CrPC, he was examined in chief and cross-examined on 17.12.2019. Thereafter, despite several opportunities on 25.01.2020; 27.02.2020 and 22.03.2020, accused failed to bring on record DW2 Sachin thus, said witness was dropped and case was listed for final arguments.
6. Both parties filed their written submissions. Ld. Counsel for the complainant avers that the cheque is admitted and all the statutory presumptions remain in his favour. He also submits that no probable defence has been raised in the matter and story concocted by the accused with respect to handing over of the cheque is precarious and unbelievable. He submitted that details of the cheque and KYC documents were not mentioned in the legal demand notice or cross-examination. He also submitted that no police complaint was filed by the accused nor any demand notice was sent to the complainant. The denial of the accused with respect to the copy of the pro-note/Mark A is also questioned as well as his failure to bring on record the testimony of defence witness Sachin.
Per contra, Ld. Defence counsel raised several questions with respect to the existence of legal liability in the present case and challenged the complaint on multiple counts i.e. the financial capacity of the complainant to advance the alleged loan amount AISHWARYA Digitally signed by AISHWARYA SINGH KASHYAP SINGH KASHYAP Date: 2022.03.09 01:52:27 +05'30' 4 of 13 Manjeet Singh vs Suraj Vij CC 2185/2017 to the accused (reliance placed on K.Parkashan vs P K Surendran 2007 (4) RCR (Cr) 588 SC); failure of the complainant to mention the details of the date on which the loan was allegedly advanced (reliance placed on John K Abrahim vs Simon 2013 (9) LRC 23 SC); questioning the significant cash transaction despite legal mandate (reliance placed on Reliance on Pushpa Devi vs Sushila (2018) (3) LRC 466 Delhi; Mahesh Chand Sharma vs Hari Chander @ Hariya 2018 (4) CC Cases (HC) 157 Delhi; Krishna Janardan vs Datta Tarya 2008 (1) RCR (Cr.) 695 SC); failure of the complainant to reflect the loan amount in his ITR (reliance placed on Vipul Kr Gupta vs Vipin Gupta (V) AD (Cr) (DHC) 189; Sneh Jain vs Vijay Kalra (208) (2014) DLT 503; S K Jain vs Vijay Kalra (2014) (3) LRC 352 Delhi; Kulwinder Singh vs Kafeel Ahmad (2014) (1) RCR (Cr) 547 Delhi). Matter was reserved for judgement after hearing rival submissions on both sides.
Legal Position
7. In order to establish the offence under Section 138 of the Act, the prosecution must fulfil all the essential ingredients of the offence, as highlighted hereunder.
First Ingredient: The cheque was drawn by a person on an account maintained by him 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 AISHWARYA Digitally signed by AISHWARYA SINGH KASHYAP SINGH KASHYAP Date: 2022.03.09 01:52:49 +05'30' 5 of 13 Manjeet Singh vs Suraj Vij CC 2185/2017 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 the 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.
8. Further, all the conditions stipulated under Section 142 of the Act must be satisfied. The complainant claims in the present case that he prima facie satisfies all the aforesaid conditions. However, the accused has disputed the fulfilment of the second ingredient. The same is being considered hereinafter.
Standard of Proof
9. The scales of degree of proof required in a cheque dishonour case have been set by the Hon'ble Supreme Court in Rangappa vs Sri Mohan (2010) 11 SCC 441 holding that once the cheque and signatures are admitted, presumptions in favour of the complainant are raised. However, said presumptions are rebuttable in nature and the 'standard of proof' required on part of the accused is that of 'preponderance of probabilities'. This can be achieved either by adducing evidence in defence or by raising probable defence whilst relying on the evidence already on record. 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 they rely. It is not necessary for the accused to come in the AISHWARYA SINGH Digitally signed by AISHWARYA SINGH KASHYAP KASHYAP Date: 2022.03.09 01:53:07 +05'30' 6 of 13 Manjeet Singh vs Suraj Vij CC 2185/2017 witness box in support of his defence. 1 The accused has successfully put a challenge qua the existence of legally enforceable liability/ the version put forth by the complainant in the instant case.
Absence of Legally Enforceable Debt/Liability and Adducing Probable Defence
10. The second ingredient is the primary point of contention in the present case wherein, the accused has denied the existence of a legally enforceable liability towards the complainant. He has replied to the legal demand notice and his defence has remained consistent throughout the trial whereby accused claims that the cheque in question was given to the complainant along with KYC documents for facilitating sanctioning of loan from a bank; and the same was not given for any liability as no loan was taken from the complainant by the accused. It is averred that the complainant received blank signed cheque in question from the accused.2 The accused has raised a probable defence by eroding the version of the complainant by challenging his financial capacity, casting the existence of a legally enforceable liability/debt in grave doubt. It is clear that a person cannot be compelled to produce negative evidence in his/her defence. Thus, the accused must rebut the statutory presumptions on the basis of preponderance of probabilities in order to raise doubt over the existence of debt/liability. This view was reinforced by the Hon'ble Supreme Court in M/s Kumar Exports vs M/s Sharma Carpets AIR 2009 SC 1518 wherein, the court held as under:
1 Basalingappa vs Mudibasappa (2019) 5 SCC 418. AISHWARYA Digitally signed by AISHWARYA SINGH KASHYAP 2 Reply to the Legal Demand Notice Ex. CW1/6. SINGH KASHYAP Date: 2022.03.09 01:53:22 +05'30' 7 of 13 Manjeet Singh vs Suraj Vij CC 2185/2017 The accused in a trial under Section 138 of the 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 and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as is expected of the Complainant in a criminal trial...To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non-existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist.3 This has further been elaborated in Rangappa (supra) holding that:
Under Section 118(a) of the NI Act, the court is obliged to presume, until the contrary is proved, that the promissory note was made for consideration. It is also a settled position that the initial burden in this regard lies on the defendant to prove the non-existence of consideration by bringing on record such facts and circumstances which would lead the court to believe the non-existence of the consideration either by direct evidence or by preponderance of probabilities showing that the existence of consideration was improbable, doubtful or illegal."4 Therefore, the existence of legally enforceable liability has been challenged by the accused on the grounds discussed hereunder by challenging the fulfilment of the second essential ingredient of the offence.
Financial Capacity
11. The second ingredient with respect to existence of legally enforceable liability is pivotal in the present case wherein the loan is stated to be advanced in cash by the complainant. Therefore, the accused has challenged the financial capacity of the complainant to advance the loan amount of Rs 2, 75,000/- in cash and the complainant has failed to furnish any cogent Digitally signed by AISHWARYA AISHWARYA SINGH KASHYAP 3 Paras 11 and 12. SINGH KASHYAP Date: 2022.03.09 01:53:39 +05'30' 4 Para 23.
8 of 13
Manjeet Singh vs Suraj Vij CC 2185/2017
evidence, oral or documentary, in order to support his claim. The relevant excerpts of his cross-examination on this issue are being reproduced hereunder:
I know the accused for last three years and I came to know about him as I used to visit the office of my friend and property dealer namely Lucky Arora and accused was running his own shop in front of the same...I am an income tax payee. I would have shown my annual income year in year 2007 about Rs 3.5 lacs in my ITR. Again said I was under impression that the question relates to my annual income of 3-4 years ago. I would have shown my annual income for year 2017 somewhere between Rs 3.5 lacs to Rs 4 lacs.5 I was doing the business of property dealer and I had received the commission Rs 1,70,000/- approximately from one property dealing and remaining amount was taken from my wife's savings. I do not maintain any account with respect to the commission received by me from my property dealing. I had advanced the friendly loan to the accused in cash.6
12. Once the accused challenges the financial capacity of the complainant, attempting to erode the existence of legally enforceable liability, he raises a probable defence in his favour in order to rebut the presumptions under Section 118 read with Section 139 of the Act. Thus, in line with the mechanism of the reverse onus clause, once probable defence is raised, the onus shifts upon the complainant and it becomes incumbent upon him to furnish cogent evidence in support of his case/discharge his burden to prove his financial capacity. Herein, the complainant claims that he received Rs 1,70,000/- as commission from a property deal however, in the same breath, he also deposed that he does not maintain any account of such commissions. No other documentary evidence in the form of his ITR (despite claiming to file them) or otherwise has been furnished in order to substantiate his claim vis-a-vis financial capacity to advance the loan in cash.Digitally signed by
5 Cross-examination of CW1 on 02.04.2018. AISHWARYA AISHWARYA SINGH KASHYAP 6 Cross-examination of CW1 on 04.09.2019. SINGH KASHYAP Date: 2022.03.09 01:53:53 +05'30'
9 of 13 Manjeet Singh vs Suraj Vij CC 2185/2017 Further, he deposed that he used his wife's savings along with his commission to advance the loan. It is peculiar that he has neither elaborated upon his wife's source of income, nature and proof of her savings nor brought her as a witness before the court. Therefore, on this count, the version of the complaint fails and existence of loan transaction/liability is rendered improbable based on the material available on record.
13. The legal position on this point has been delineated elaborately by the Hon'ble Supreme Court in Basalingappa vs Mudibasappa7 wherein (under similar circumstances where the complainant claimed to have received consideration upon sale of property) it was held as under:
..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.8 Similarly, in K Prakashan vs P K Surendran,9 where on the question of source of funds, the complainant deposed that he borrowed from others, the Hon'ble Apex Court was not inclined to assume his capacity to lend the (friendly) loan amount and upheld the acquittal order of the Ld. Trial Court.
Failure to Bring on Record Material/Eye Witness
14. Juxtaposed with the aforesaid background, and keeping in mind the defence put forth by the accused, it is not clear why the complainant failed to bring on record the testimony Digitally signed by 7 Basalingappa vs Mudibasappa (2019) 2 SCC (Cri) 571. AISHWARYA AISHWARYA SINGH KASHYAP 8 Para 26. SINGH KASHYAP Date: 2022.03.09 01:54:07 +05'30' 9 2008 (1) SCC 258.
10 of 13
Manjeet Singh vs Suraj Vij CC 2185/2017
of key eye-witness (known to him for over a decade) Sh Ram Niwas who was not only present at the time of alleged advancement of loan but also witness to the execution of pro- note/Mark-A (denied by the accused during his cross- examination on 17.12.2019).
I have advanced loan in question to the accused on 26.10.2016 in presence of my friend Ram Niwas at my house. Again said I advanced loan in question to the accused in presence of my friend Ram Niwas and one more person known to the accused, who came with him. I know said Ram Niwas for last 10- to 12 years. Ram Niwas, accused and I had also met together at various times previously. It is wrong to suggest that the accused has never met any person namely Ram Niwas.
Other Missing Particulars
15. Further, the defence of the accused has been consistent in line with his reply to the legal demand notice. However, the legal demand notice of the complainant is conspicuously silent on the execution of a pro-note/Mark A in the presence of the aforesaid witness- Sh Ram Niwas. It has also not been explained why the original pro-note has not been filed on record. Mark A is not countersigned OSR in the file. During cross-examination, the complainant claimed to have mentioned the pro-note in his legal demand notice however, later retracted from his statement.
I have mentioned regarding execution of promissory note between me and accused in my Legal Demand Notice. It is correct that I had not mentioned the execution of promissory note in my Legal Demand Notice.10 No explanation has been tendered as to why this material fact was not mentioned in the legal demand notice by the complainant. Therefore, it is improbable to believe the version put forth by the complainant. Instead, the defence put forth by the 10 Cross-examination of CW1 on 04.09.2019.
AISHWARYA Digitally signed by AISHWARYA
SINGH KASHYAP
SINGH KASHYAP Date: 2022.03.09 01:54:21 +05'30' 11 of 13 Manjeet Singh vs Suraj Vij CC 2185/2017 accused is probable that no legally enforceable liability existed on the day of presentation of the cheque.
16. In the present case, after considering the totality of the facts and circumstances along with the evidence available on record, it becomes clear that the accused has successfully raised a probable defence in his favour by rebutting the assumed presumptions in favour of the complainant (keeping in mind that the second ingredient has not been fulfilled). Whereas, the complainant has neither been able to fulfil all the essential ingredients of the offence nor rebutted the onus shifted upon him vis-a-vis proving his financial capacity. On account of the aforesaid, the complaint cannot be sustained in the eyes of law. No justification is forthcoming with respect to the failure of the complainant to bring on record cogent evidence in its support. On the contrary, glaring loopholes in the version of the complainant do not inspire any confidence before the court; its testimony rests on shaky grounds and its version cannot be relied upon. The complainant has not approached the court with clean hands.
17. Therefore, the complainant has failed to successfully prosecute his complaint under Section 138 of the Act as the complainant has failed to prove the existence of legally enforceable liability.
Decision
18. In view of the aforementioned discussion, the complaint is not maintainable since the complainant has neither fulfilled the essential ingredients of the offence of Section 138 of the Act nor presented cogent evidence in its support after the accused succesfully raised probable defence. Accordingly, the complaint Digitally signed by AISHWARYA AISHWARYA SINGH KASHYAP SINGH KASHYAP Date: 2022.03.09 01:54:34 +05'30' 12 of 13 Manjeet Singh vs Suraj Vij CC 2185/2017 is dismissed and the accused is hereby acquitted of the charge of the offence punishable under Section 138 of the Act.
ORDER: Acquitted Accused shall furnish personal bond and surety bond as per the mandate of Section 437A CrPC upon which previous bonds shall be cancelled and previous surety shall be discharged.
Announced in Open Court on 08.03.2022.
(This judgement contains 13/Thirteen signed pages.) AISHWARYA SINGH Digitally signed by AISHWARYA SINGH KASHYAP KASHYAP Date: 2022.03.09 01:54:51 +05'30' (Aishwarya Singh Kashyap) MM/NI Act(East)/KKD Courts/Delhi 08.03.2022 13 of 13