Delhi District Court
Rangappa vs . Sri Mohan, (2010) 11 Scc 441 Has Held ... on 22 November, 2022
IN THE COURT OF SH. VIPUL SANDWAR
METROPOLITAN MAGISTRATE-02, NORTH EAST,
KARKARDOOMA COURTS : DELHI
CC No. 426/18
Javed v. Arif
1. Complaint Case number : 426/18
2 Name of the complainant : Javed
S/o Sh. Haji Ibrahim Qureshi
R/o D-11/2, Gali No. 2, Shastri
Park, Delhi-110053.
3. Name and address of the : Arif
accused S/o Sh. Iqbal
R/o H.No. 723, Gali No.22B,
Vijay Park, Maujpur, Delhi-
110053.
4. Offence complained of : Section 138 of the Negotiable
Instruments Act, 1881.
5. Plea of the accused : Pleaded not guilty and claimed
trial.
6. Final Order : Acquittal
7. Date of Institution : 20.02.2018
8. Date of Reserving the : 14.11.2022
Judgment
9. Date of pronouncement : 14.11.2022
JUDGEMENT:
1. Briefly stated, the case of the complainant is that the complainant and accused are well known to each other for the last 15 years and in the month of June, 2017, the accused approached the complainant seeking financial help as he was in need of money and requested the complainant for a sum of C.C. No. 426//18 Javed v. Arif Page No.1 of 13 Rs.1,70,000/-. The complainant paid the said amount to the accused in cash with an assurance from the accused that the same will be repaid within 4 months.
2. On 15.11.2017, the complainant requested the accused to honour his commitment of repaying the said loan and the accused in discharge of his liability issused two cheques bearing no. 170902 dated 15.11.2017 for Rs. 85,000/- and bearing no. 170913 dated 17.11.2017 for Rs. 85,000/- both drawn on State Bank of India, C-1/5A, Yamuna Vihar, Delhi (hereinafter referred to as the 'cheques in question') with the promise that the same will be encashed on its presentation.
3. On the assurance of the accused, the complainant presented the cheque in question to his banker i.e. Central Bank of India, IT Park, Usmanpur, Delhi but the cheques in question were returned unpaid on account of "funds insufficient" vide return memos dated 19.01.2018. The legal demand notice dated 25.01.2018 was duly sent by the complainant to the accused through speed post. The accused failed to pay the cheque amount within the statutory period. Hence, the present complaint under Section 138 of Negotiable Instruments Act, 1881 (hereinafter referred to as 'NI Act') was filed.
4. On issuance of summons, accused entered appearance in the present matter for the first time on 27.07.2018 and was admitted to bail on 10.10.2018. Notice under Section 251 Cr.P.C. was served upon accused on 10.10.2018, to which he pleaded not guilty and claimed trial. Thereafter, accused was allowed to C.C. No. 426//18 Javed v. Arif Page No.2 of 13 cross-examine the complainant (CW1) after his oral application u/s 145 (2) NI Act was allowed vide order dated 10.10.2018. After that complainant evidence was closed vide order dated 12.07.2019 and matter was fixed for recording of statement of the accused under Section 313 Cr.P.C and the same was recorded on 14.01.2020. Matter was thereafter fixed for defence evidence. An application under S. 315 CrPC was moved by the accused seeking examination of accused as a defence witness, but the same was withdrawn on 22.02.2021. Vide separtate statement of Ld. Counsel for accused DE was closed on 09.12.2021. Matter was thereafter fixed for final arguments.
EVIDENCE
5. In order to support his case, the complainant had stepped into the witness box as CW-1 and tendered his affidavit Ex.CW1/G into evidence wherein averments made in the complaint were reiterated. He also relied upon various documents such as Ex.CW1/A that is cheques in question, Ex. CW1/B (colly) return memos, Ex. CW1/C is legal demand notice, Ex. CW1/D is postal receipt and Ex. CW1/E is the speed post tracking receipt.
The accused did not lead any evidence for his defence.
APPLICABLE LAW
6. Before appreciating the facts of the case in detail for the purpose of decision, let relevant position of law be discussed first. Section 138 Negotiable Instrument Act provides as under:
"Section 138.- Dishonour of cheque for insufficiency, etc., of funds in the account.- Where any cheque drawn by a person on an account maintained by him with a banker for C.C. No. 426//18 Javed v. Arif Page No.3 of 13 payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall apply unless - (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. Explanation -- for the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability.
It is well settled position of law that to constitute an offence under S.138 N.I. Act, the following ingredients are required to be fulfilled: (1) drawing of the cheque by a person on an account maintained by him with a banker, for payment to another person from out of that account for discharge in whole/part any debt or liability; (2) cheque has been presented to the bank within a period of six months (now three months) from the date on which it is drawn or within the period of its validity whichever is earlier; (3) returning the cheque unpaid by the drawee bank for want of sufficient funds to the credit of the drawer or any arrangement with the banker to pay the sum covered by the cheque, (4) giving notice in writing to the drawer of the cheque within 30 days of the receipt of information by the payee from the bank regarding the return of the cheque as unpaid demanding payment of the cheque amount, (5) failure of the drawer to make payment to the payee or the holder in due course of the cheque, of the amount covered by the cheque within 15 days of the receipt of the notice.
Being cumulative, it is only when all the aforementioned ingredients are satisfied that the person who had drawn the cheque can be deemed to have committed an offence under C.C. No. 426//18 Javed v. Arif Page No.4 of 13 Section 138 of the N I Act.
The Act raises two presumptions in favour of the holder of the cheque i.e. Complainant in the present case; firstly, in regard to the passing of consideration as contained in Section 118 (a) therein and, secondly, a presumption under Section 139, that the holder of cheque receiving the same of the nature referred to in Section 138 for discharge, in whole or in part, of any debt or other liability.
Analysing all the concerned provisions of law and various pronouncements in this regard, the Hon'ble Apex Court in Basalingappa v. Mudibasappa, AIR 2019 SC 1983, noted at para 23 as follows [Bharat Barrel and Drum Manufacturing Company v. Amin Chand Pyarelal, (1999) 3 SCC 35; M.S. Narayana Menon alias Mani v. State of Kerala and another, (2006) 6 SCC 39; Krishna Janardhan Bhat v. Dattatraya G. Hegde, (2008) 4 SCC 54; Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513; Rangappa v. Sri Mohan, (2010) 11 SCC 441 referred]:
(i) Once the execution of cheque is admitted, Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.
(ii) The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
(iii) To rebut the presumption, it is open for the accused to rely on evidence led by him or accused can also rely on the materials submitted by the complainant in order to raise a probable defence. 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.
(iv) That it is not necessary for the accused to come in the witness box in support of his defence, Section 139 imposes an evidentiary burden and not a persuasive burden.
(v) It is not necessary for the accused to come in the witness box to support his defence.
To put in nutshell, the law regarding the presumption for the offence under Section 138 N.I. Act,is that the presumptions under Sections 118(a) and 139 have to be compulsorily raised as soon as execution of cheque by accused is admitted or proved by the complainant and thereafter burden is shifted upon the accused to prove otherwise. These presumptions shall end only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability etc. The onus to prove the issuance of the cheque lies upon the complainant, and the same has to be proved beyond reasonable doubt, unless the accused admits the same. Once the issuance of cheque is established, either by C.C. No. 426//18 Javed v. Arif Page No.5 of 13 admission or by positive evidence, the presumption under Section 139 of the Negotiable Instruments Act, 1881 arises. We can summarize the general principles in the following way:
Onus of proof: Section 139 of the Negotiable Instruments Act, 1881 states that it shall be presumed, unless the contrary is proved that the holder of a cheque received the cheque, of the nature referred to in Section 138, for the discharge, in whole or in part, of any debt or other liability. Therefore, here the onus shifts upon the accused to prove the nonexistence of debt or other liability. Section 139 of the N.I. Act uses the word "shall presume", which means that the presumption under Section 139 is rebuttable. Standard of proof: The standard of proof required to rebut the presumption under Section 139 is that of "preponderance of probabilities". Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or other liability, the onus shifts back to the complainant to prove by way of evidence, beyond reasonable doubt, that the cheque in question was issued by the accused in discharge, whole or in part, of any debt or other liability, and now the presumptions under Section 118 (a) and Section 139 will not come to the aid of the complainant.
Mode of Proof: The accused may adduce direct evidence to prove that the cheque in question was not supported by consideration, and that there was no debt or liability to be discharged by him. However, the Court need not insist in every case that the accused should prove the nonexistence of the consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that a bare denial of passing of consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances upon the consideration of which, the Court may either believe that the consideration and debt did not exist, or their nonexistence was so probable that a prudent man would, under circumstances of the case, act upon the plea that they did not exist.
As discussed above, from the legal provisions and the law laid down in various judgments, it can be safely gathered that it is for the accused to rebut the presumptions. He can do so by cross examining the complainant, leading defence evidence, thereby demolishing the case of the complainant. It is amply clear that the accused does not need to discharge his or her liability beyond the shadow of C.C. No. 426//18 Javed v. Arif Page No.6 of 13 reasonable doubt. He just needs to create holes in the case set out by the complainant. Accused can say that the version brought forth by the complainant is inherently unbelievable and therefore the prosecution cannot stand. In this situation the accused has nothing to do except to point inherent inconsistency in the version of the complainant or the accused can give his version of the story and say that on the basis of his version the story of the complainant cannot be believed."
ARGUMENTS AND APPRECIATION OF EVIDENCE
7. Ld. counsel for the complainant has argued that all the requirements of Section 138 NI Act have been met with in the present case and, hence, the accused be convicted. I have heard the arguments and also gone through the record carefully.
8. Ld. counsel for complainant has submitted that as the accused has not disputed the issuance of cheques or the signatures on the cheques in the present case, presumptions under Section 118 (a) read with Section 139 of NI Act about the cheques in question having been issued for consideration and in discharge of legal liability should arise in favour of the complainant. On the contrary, Ld. Counsel for accused has submitted that the complainant has misued the cheques in question. The cheques in question were not issued by the accused to the complainant rather they were stoelen from the accused. Therefore, presumption under S. 139 of NI Act, should not arise.
9. The three-Judge Bench of hon'ble Supreme Court in Rangappa Vs. Sri Mohan, (2010) 11 SCC 441 has held that C.C. No. 426//18 Javed v. Arif Page No.7 of 13 where the fact of signature on the cheque is acknowledged, a presumption has to be raised that the cheque pertained to a legally enforceable debt or liability, however, this presumption is of a rebuttal nature and the onus is then on the accused to raise a probable defence.
10. In the present case, the accused has admitted his signatures on the cheque Ex. CW1/A. In a specific question put to him during his examination under S. 313 Cr.P.C he has stated that the signature on the cheque belongs to him however rest of the particulars written on the body of the cheque such as date, name of payee and amount in words and figures have not been filled by him. Once the factum of signatures on the cheque has been acknowledged, Section 139 presumption becomes applicable and therefore, in this case also, presumption under S.139 will apply and now it is upon the accused to rebut this presumption.
11. It is pertinent to mention here that S. 139 only raises the presumption on fulfillment of its conditions that the cheque was issued for discharge of in whole or in part any debt or other liability but there is no presumption as to the existence of the debt or liabilty as such.
In Rangappa (supra) it has been held that :
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.
12. One of the main defence put forth by the Ld. Counsel for accused is that though the cheques have been signed by the C.C. No. 426//18 Javed v. Arif Page No.8 of 13 accused the same were not issued to the complainant. The cheque were to be given to someone else and the complainant took away the file and script of the accused and misued the cheques in question.
13. To discharge his burden based on balance of probablities, the accused has not led any evidence rather the accused has relied on the inconsistencies in the version of the complainant. It is the case of the accused that the complainant and the accused were known to each other for the last 15 years. In the month of September 2017, the complainant and the accused decided to shoot a documentary film at Mussori, for which the complainant had to provide technical assistance. The complainant did not provide the requisite technical assistance and was removed from the project by the accused. The complainant stole the file containing the script of the documentary and the cheques in question. On enquiry from the accused about the cheques in question, the complainant stated that they were destroyed in laundry.
14. On the dishonour of the cheque, the complainant sent the Ex. CW1/C legal demand notice dated 25.01.2018 which was received by the accused. The accused replied to the same vide reply dated 12.02.2018 Ex. CW1/D1 which was duly received by the complainant as staed by him during his cross examination dated 12.07.2019. The reply of the accused mentions the circumstances in which the cheques in question came into possession of the accused. The reply also states that SMSs Ex. CW1/D2 to Ex. CW1/D4 dated 21.10.2017 and 23.10.2017 were C.C. No. 426//18 Javed v. Arif Page No.9 of 13 sent by the accused to the complainant and the same has been acknowledegd by the complainant during his cross examination dated 12.07.2017. Though the SMSs does not talk about the cheques in question but it dos mention about the complainant having the script of the accused and the accused stopping him from using the same.
15. Certain facts came to light for the first time during the cross-examination of the complainant. The Complainant accepted the suggestion that he had earlier worked with the accused on two projects of feature film i.e. Dil Vs. Dimag and Kuchchu when he was asked about the same in his cross examination. He also affirmed the suggestion that Dil Vs. Dimag could not be shooted and Kuchchu was shooted only for 5-6 days in Mussori in October, 2017.
16. As per para 3 of the evidentiary affidavit of the complainant Ex. CW1/G, the complainant had advanced the loan of Rs.1,70, 000/- in cash to the accused which was to be returned in four months i.e. in October, 2017. Therefore, as per the version of the complainant, the accused already had a debt to be paid to the complainant in the month of October 2017, still, the complainant agreed to work with him on Kuchchu in Mussori in October, 2017 (as evidenced from cross - examination of the complainant dated 12.07.2019.
17. It seems improbable that without settling the previous claims first the complainant agreed to work with the accused and this working together was not mentioned by the complainant C.C. No. 426//18 Javed v. Arif Page No.10 of 13 rather this fact came to light for the first time during cross - examination of the complainant dated 12.07.2019. This per se affects the credibility of the version of the complainant.
18. A question was put to the complainant during his cross examination dated 02.05.2019 and he was asked whether he had filed his income tax return for the year 2017-18. On the said date, he had stated that he does not remember if he had filed his income tax return for the year 2017-18. When the complainant was cross - examined again on 12.07.2019, he had stated that he can produce the income tax return filed by him, however no sucg document was brought by him.
19. Thus, on the basis of above discussion, it would be safe to assume that showing the money advanced to someone in one's ITR is not the only way to prove it, but if the same is not shown in the ITR an adverse inference can always be drawn that no money was advanced. This view has been affirmed by Hon'ble Delhi High Court in Kulvinder Singh v. Kafeel Ahamed 2013(2) AD (Delhi) 81 wherein the court has observed that:
"He has not reflected the loan advanced to the respondent in his income- tax return nor is he able to tell to the court the Ward in which the income-tax return is filed. The learned Magistrate has rightly placed reliance on the provisions of Section 269 SS of the Income-Tax Act wherein it is specifically laid down that if a loan is advanced which is more than 20,000/-, it has to be by way of writing reflected in the books of account but nothing of that sort has been done in the instant case. Obviously, this clearly creates a doubt regarding the truthfulness of the stand taken by the petitioner that he had advanced a loan of 9,30,000/- to the respondent."
20. The complainant has not mentioned the specific need of C.C. No. 426//18 Javed v. Arif Page No.11 of 13 the accused for taking the loan. It is the version of the complainat that the loan was advanced by him in cash. On a query put to him, during his cross examination dated 12.07.2019 he has stated that he used to retain cash at home. No bank records, passbok entry in respect of the cash of Rs. 1,70,000/- has been placed on record. No written agreement, acknowledgement, receipt has been produced by the complainant to prove the loan. There are no witnesses who can substantiate the version of the complainant of advancing the loan. In his cross examination, the complainant has stated that since the accused was his best friend he did not any written record of the loan advanced. This again seems improbable that, a lender will have absolutely no records of the loan advanced only because the lendee is his best friend.
21. It has been held in Devender Kumar v. Khem Chand 2015(223) DLT 419 that:
"22. Keeping the above preposition of law in mind, on an analysis of fact, the scale of balance tilts in favour of the respondent. The respondent appears to have rebutted the presumption under S. 139 NI Act, namely, the existence of a legaly enforcable debt by establishing that no loan was advanced to him even though there was an agreement and a correspondig promissory note and an affidavit. The aforesaid loan was not shown in the ITR of the petitioner. An adverse inference could be drawn against the petitioner on that account. The loan ammount also appears to be doubtful."
22. Thus, on the basis of above discussion, it would be safe to assume that in the present case there is no document to support C.C. No. 426//18 Javed v. Arif Page No.12 of 13 the handing over of Rs. 1,70,000/- to the accused. No Income tax return of the complainant has come on record which would show the advancement of the load to the accused as discussed above. Certain facts that the accused and the complainant were working together on a project in October, 2007 was not brought by the complainant rather came up during his cross-examination. These are inconsistencies which diminishes the credibility of the version put forth by the complainant. On the contrary, the version of the accused seems probable and he has been consistent in his stand through out starting from the reply to the legal demand notice of the accused.
CONCLUSION
23. In view of the above discussion, this court is of the considered opinion that the complainant has failed to establish his case beyond reasonable doubt by proving all the ingredients under Section 138 NI Act by leading cogent evidence and the accused has successfully rebutted statutory presumptions arising against him. Therefore accused Arif is hereby acquitted for offence punishable under Section 138 NI Act.
Digitally
signed by
VIPUL
VIPUL SANDWAR
SANDWAR Date:
2022.11.22
16:08:00
+0530
Announced in the Open Court (VIPUL SANDWAR)
on 22nd day of November, 2022 MM-02/NE/KKD COURTS
22.11.2022
C.C. No. 426//18 Javed v. Arif Page No.13 of 13