Delhi District Court
Anita Saini vs . Rakesh Kumar Singh 1/36 on 3 March, 2023
IN THE COURT OF SH. PRANAV JOSHI,
METROPOLITAN MAGISTRATE - 03,
NORTH DISTRICT, ROHINI COURTS, DELHI.
JUDGMENT
Anita Saini W/O Sh. Deepak Saini, R/O WZ 552-A, Rishi Nagar, Sakur Basti, Delhi-110034. ...................Complainant Versus Sh. Rakesh Kumar Singh, S/O Sh. Narinder Singh, R/O WZ 544-A, Rishi Nagar, Sakur Basti, Delhi-110034. ...................Accused PS - Model Town Under Section 138 of N. I. ACT, 1881
a) Case No. : CT No. 581/2018
b) Date of institution of the Case : 05.09.2014
c) Offence complained of : Under Section 138 of N. I. Act, 1881
d) Plea of accused : Pleaded not guilty
e) Final order : Convicted
f) Date on which judgment was reserved : 04.01.2023 Anita Saini Vs. Rakesh Kumar Singh 1/36
e) Date of judgment : 03.03.2023 BRIEF STATEMENT OF THE REASONS FOR DECISION : -
1. Vide this judgment, this Court shall dispose of the complaint for offence punishable under Section 138 of the Negotiable Instruments Act, 1881 filed by the complainant Anita Saini. It is the case of the complainant that she shared a good rapport with the accused and has maintained a cordial relationship with the accused for a long time, being the resident of the same locality. That the accused approached complainant in the month of March 2013 for a short-term friendly loan for a period of one year to be returnable in April 2014 on account of an urgent/pressing personal need. That the accused gave an assurance to the complainant that accused will repay the loan amount in the month of April 2014 on demand by the complainant without any default on part of the accused. That the complainant having a cordial relationship with the accused appreciating urgent personal requirement and relying upon the assurance given by the accused, the complainant acting on good faith agreed to lend and gave the accused a short-term friendly Anita Saini Vs. Rakesh Kumar Singh 2/36 loan of Rs.1,00,000/- vide cheque bearing no143487 drawn on Andhra Bank, Model Town branch, New Delhi which the accused got encashed on 22.03.2013. That the accused approached the complainant once again in the month of April 2013 for a short-term friendly loan to be returnable in April 2014 on account of an urgent/pressing personal need. That the complainant having a cordial relationship with the accused appreciating the urgent personal requirement and relying upon the assurance given by the accused, the complainant acting on good faith agreed to lend and gave the accused a short-term friendly loan of Rs.1,00,000/-, out of the said amount, Rs 50,000/- was given vide cheque bearing no. 143489 drawn on Andhra Bank, Model Town branch, New Delhi which accused got issued in the name of his relative namely Chetan which was encashed on 17.04.2013 and the rest of Rs 50,000/- was given in cash to the accused. That the accused approached the complainant once again in the month of November 2013 for a further loan for a period returnable in the month of April 2014 on account of an urgent/pressing personal need. That the complainant having a cordial relationship with the accused, Anita Saini Vs. Rakesh Kumar Singh 3/36 appreciating the urgent personal requirement and relying upon the assurance given by the accused, the complainant acting on good faith agreed to lend and gave the accused a short-term friendly loan of Rs.2,00,000/- vide cheques bearing no143494 and 143495 for Rs. 1,00,000/- each both drawn on Andhra Bank, Model Town branch, New Delhi. The cheque bearing no. 143494 was encashed on 30.11.2013 and the cheque bearing no143495 accused was encashed on 13.12.2013 by the accused. That the accused had also taken Rs 40,000/- in cash while receiving the cheques bearing no 143494 and 143495 and the accused had also signed a receipt dated 27.11.2013 for all the amount totaling Rs.4,40,000/- received by him in cash as well as through cheques as friendly loan. It is most humbly submitted that the entire loan amount was taken on interest at the rate of 15% per annum. That in the month of May 2014, the complainant approached the accused several times and demanded the repayment of the aforesaid loan amount which was taken by the accused but the accused on some pretext or the other delayed the repayment of the said loan amount. That on 18.07.2014, the accused issued two cheques bearing No. 282210 and 282211 both dated 18.07.2014 Anita Saini Vs. Rakesh Kumar Singh 4/36 and two Cheques bearing no. 285052 and 285053 both dated 22.07.2014 each, all in the sum of Rs. 1,00,000/- drawn on Syndicate Bank, CBSE Rouse Avenue, New Delhi-110002 towards the repayment of the said friendly loan amount. That the accused assured the complainant that the aforesaid cheques will be honoured and encashed on their presentation. That on getting assurance from the accused and in accordance with the banking norms and practices the complainant deposited the said four cheques but to the utter shock and dismay of the complainant, the said cheques were returned unpaid vide two separate cheque return memos dated 19.07.2014 for first two cheques with remarks "OTHERS" and vide two separate cheque return memos dated 23.07.2014 for the last two cheques with the remarks "FUNDS INSUFFICIENT". That the complainant approached the accused with his grievances on which the accused requested the complainant to present all the cheques all over again with assurance that the same will be honoured and the complainant.
On the said assurance the complainant presented the cheque bearing no 282210 once again but to the utter shock and dismay of the complainant, the said cheque bearing no 282210 was again Anita Saini Vs. Rakesh Kumar Singh 5/36 returned unpaid vide cheque return memo dated 26.07.2014 with remarks "INSUFFICIENT FUND". That immediately after the receipt of the intimation of dishonour of the cheques, the complainant sent statutory notice of demand dated 01.08.2014 calling upon the accused to make the payment within 15 days but despite the service of notice, the accused did not make the payment. Thereafter, complainant has filed the present written complaint case u/s 138 of the Negotiable Instruments Act, 1881. PRE-SUMMONING EVIDENCE & NOTICE
2. The complainant examined herself as CW1 in pre- summoning evidence and tendered her affidavit Ex.CW1/A and relied upon the following documents:
a. Copy of Pass Book pertaining to the account of the complainant Ex. CW1/1.
b. Receipt dated 27.11.2013 Ex. CW1/2 c. Cheque bearing No. 282210 of Rs. 1,00,000/- dated 18.07.2014, drawn on Syndicate Bank Ex.CW1/3. d. Cheque bearing No. 282211 of Rs. 1,00,000/- dated 18.07.2014, drawn on Syndicate Bank Ex.CW1/4. e. Cheque bearing No. 285052 of Rs. 1,00,000/- dated 18.07.2014, drawn on Syndicate Bank Ex.CW1/5. f. Cheque bearing No. 285053 of Rs. 1,00,000/- dated 18.07.2014, drawn on Syndicate Bank Ex.CW1/6.
g. Returning memo dated 19.07.2014 Ex.CW1/7.
Anita Saini Vs. Rakesh Kumar Singh 6/36 h. Returning memo dated 19.07.2014 Ex.CW1/8. i. Returning memo dated 23.07.2014 Ex.CW1/9. j. Returning memo dated 23.07.2014 Ex.CW1/10. k. Returning memo dated 26.07.2014 Ex.CW1/11.
l. Legal demand notice dated 01.08.2014 Ex.CW1/12.
m. Original Postal receipt Ex.CW1/13.
n. Tracking report Ex.CW1/14.
After hearing complainant side, accused was summoned for offence punishable under Section 138 of the Negotiable Instruments Act, 1881. Cognizance of offence under section 138 NI Act was taken and summons were issued to the accused. After appearance of accused, it was ensured that copy of complaint has been supplied. Notice of accusation u/s 251 Cr.PC was framed upon the accused on 20.08.2016 and plea of defence of the accused was recorded to which he had pleaded not guilty and claimed trial. It is stated by accused that he has given six cheques to the complainant as security against the friendly loan. He stated that the loan amount was repaid by him but the complainant did not return the cheques to him despite repeated demands. He stated that the complainant has misused the cheques against him. He further stated that the complainant has also given two cheques Anita Saini Vs. Rakesh Kumar Singh 7/36 to Ms. Jyoti and the same were misused by her by filing complaint against him u/s 138 N.I. Act.
POST SUMMONING EVIDENCE
3. In post summoning evidence Complainant has been examined as CW-1 for proving her version of the case. She adopted her pre-summoning evidence including the documents relied during the said evidence. CW-1 was duly cross examined by Ld. Counsel for the accused. The complainant examined Sh. Raj Kiran, branch manager, Andhra Bank, Model Town as CW-2 who proved the statement of account of the complainant Ex.CW2/A. CW2 was duly cross examined by Ld. Counsel for the accused.
STATEMENT OF ACCUSED AND DEFENCE EVIDENCE
4. The statement of accused was recorded under Section 313 of The Code of Criminal Procedure, 1973 separately. Incriminating evidence was put to him. Accused denied all the allegations and claimed his innocence. The accused admitted that he has approached the complainant for loan in the month of March, April and November 2013 for loan. He also admitted that the loan was payable by April 2014. He denied that the Anita Saini Vs. Rakesh Kumar Singh 8/36 complainant issued cheque of Rs. 50,000/- in favour of Mr. Chetan on his asking and gave him Rs. 50,000/- in cash. He admitted that the complainant issued cheque No 143487 for Rs. 1,00,000/- and cheques Nos 143494 and 143495 for a sum of Rs. 1,00,000/- each for advancing him loan. He denied that the complainant gave him Rs. 40,000/- in cash as part of loan and that he executed receipt dated 27.11.2013 Ex. CW1/2. He further denied that the loan was given interest @ 15% per annum and he stated that the interest payable was 4% per month. He also admitted the issuance of the cheques Ex.CW1/3, Ex.CW1/4, Ex.CW1/5 and Ex.CW1/6. He however stated that in addition to these four cheques, he had also issued two more cheques as security which have been misused by the complainant. He admitted the factum of dishonour of cheques Ex.CW1/3, Ex.CW1/4, Ex.CW1/5 and Ex.CW1/6. He admitted receiving the legal notice Ex. CW 1/12. He also stated that he had issued six blank cheques as security for loan and he repaid the entire loan. He stated that the present case has been filed for harassing him and that the case is false.
5. Thereafter, the case was fixed for defence evidence.
Anita Saini Vs. Rakesh Kumar Singh 9/36 Accused examined himself as DW1 in his defence. DW1 was duly cross-examined by Ld. Counsel for the The defence evidence was closed on 16.09.2021.
6. Final arguments heard from both the parties on 04.01.2023. Case file perused.
ESSENTIAL INGREDIENTS OF THE SECTION 138, NEGOTIABLE INSTRUMENTS ACT,1881
7. To bring home conviction for offence punishable under Section 138 of The Negotiable Instruments Act, 1881, the complainant is obliged to prove : -
(a) The cheque(s) was/were drawn/issued by the accused person(s) to the complainant on an account maintained by him/her/them/it with the bank for discharge, in whole or in part, of any debt or liability.
(b) The cheque(s) was/were presented to the bank within a period of six months or within period of its/their validity.
(c) The cheque(s) so presented for encashment was/were dishonored.
(d) The payee/complainant of the cheque(s)
Anita Saini Vs. Rakesh Kumar Singh 10/36
issued a Legal Demand Notice within 30 days from the receipt of information from the bank regarding dishonour of the cheque(s).
(e) The drawer of the cheque(s) failed to make the payment within 15 days of receipt of afore-said Legal Demand Notice.
(f) The complaint was presented within 30 days after the expiry of above 15 days.
UNDISPUTED FACTS
8. At the outset, it is pertinent to mention herein that it is not in dispute that cheques in question belong to the accused, they bear his signatures, they were drawn on an account maintained by the accused with a bank, cheques in question were dishonored as alleged, and accused failed to make the payment of cheque in question till date. The accused also does not dispute the receipt of legal notice Ex.CW1/12. So, there is no need of discussion qua said ingredients and same can be regarded as being duly proved on record and being non-controverted. CONTENTIONS OF THE PARTIES
9. Ld. Counsel for the complainant Ms. Santosh Kumar submitted that the complainant has successful in proving his case Anita Saini Vs. Rakesh Kumar Singh 11/36 and the accused has failed to rebut the presumption drawn u/s 139 N.I. Act. That the complainant has been able to prove all the documents filed by her. It is submitted that the accused has failed to prove that he returned amount of Rs. 3,50,000/- to the complainant. That the accused settled the case with the accused and paid Rs. 1,60,000/- to the complainant and that the accused is habitual offender but later backed out from his undertaking. That the accused is facing trial in seven or eight cases having cheated innocent persons. That the accused has admitted that he has taken loan of Rs. 3,00,000/- from the complainant and that Chetan is his brother-in-law. That the accused has intentionally deposited one cheque in the account of Mr. Chetan. That the accused admitted in his cross-examination that he never demanded the security cheques back from the complainant. That the accused has failed to prove his defence.
10. On 01.03.2023 additional written submissions were filed on behalf of the complainant by Ld. Counsel Sh. Durga Prasad wherein it is stated that the accused has borrowed a loan of Rs. 4,40,000 from the complainant which was not rebutted/objected by the accused by giving a single suggestion that his submissions Anita Saini Vs. Rakesh Kumar Singh 12/36 were wrong or she is deposing falsely that no loan of Rs. 4,40,000 was ever being given. Further there were no suggestion of Rs. 50,000 in the account of Mr Chetan, if this question has been asked to the complainant, she could have had explained on which circumstances the said cheque was encashed by Mr Chetan, thus admitting to the fact of borrowing the loan of Rs. 4,40,000/-. It is also admitted by the accused that the cheque in question was issued in discharge of his liability. However, he took a false defence that he had repaid the loan in cash but no oral or documentary evidence was produced by the accused in his defence. Moreover, not even a single suggestion was given on the cross examinations of the accused that the accused has repaid the loan amount. Further more, that the accused has miserably failed to lead any evidence, the mode of the repayment of the loan, and in whose presence the loan amount was repaid to the complainant. The accused also submitted that even in respect of the same, the complainant has taken the cash payment but did not return the cheque which were given as security. It is well settled law that once the accused admit the issuance of the cheque and his signature, the presumption under section 118, and 139 of N.I. Anita Saini Vs. Rakesh Kumar Singh 13/36 Act becomes in favor of the complainant that accused has issued the cheque in discharge of his legally enforceable liability. He relied on Uttam Ram vs Devinder Singh Hudan and Another reported in 2019 (10) SCC 287, Krishna Bhoopal vs Sanam Jhansi Devi and Another reported in 2003 JCC (NI) 96, Umesh Prasad vs State (Govt. of NCT of Delhi) and Sudhakar Anantvar bs Shiv Kumar Kanhaiyalal Shrivastav (Hon'ble Supreme Court in Criminal Appeal No. 1598/2019). The accused has admitted receiving of the legal notice but failed to make payment within 15 days from the receipt of notice and the accused didn't give any reply to the notice. He relied on Vadivelu vs M/s Sakhti Asphalts and Pelts reported in 2003 [1] JCC [NI] 105. On the other hand, the accused has also taken a false plea that in his evidence which was recorded after the evidence of the complainant that the accused has also issued two cheques which were given to Ms Jyoti but this defence was never put at the time of recording of notice under section 251 and his statement recorded under section 313 Cr.P.C.. Moreover, the accused has not cross-examined the complainant to this aspect. If she was asked, she could explain the real incident which took Anita Saini Vs. Rakesh Kumar Singh 14/36 place. Moreover, no question was asked in cross-examination of the complainant, otherwise she could explain the real truth. In fact, it is admitted by the accused that Mr Chetan is his brother- in-law, However, he took another false plea that he has no speaking terms with Mr Chetan. No cogent evidence has been led to prove his defence that he is not on speaking terms with Mr Chetan, his brother-in-law. That the accused has also taken another false plea that the complainant has demanded more amount than the cheque amount. It is well settled law that purpose of notice is to apprise the accused about all the necessary specifications of the cheque such as cheque number, date, amount, name of the bank and date of the dishonour should be clearly mentioned in the legal notice so that accused can make the payment and there should be no confusion for understanding the cheque amount. It is specifically stated that the description of the cheque in question is given in para number 11, 12, 13, 14 and 15 in statutory demand notice. Moreover, in para number 20, there is a clear demand of cheque amount. However, the total demand of Rs. 4,40,000/- has been demanded as entire balance. He relied on Suman Sethi vs Ajay Chudiwal and Others Anita Saini Vs. Rakesh Kumar Singh 15/36 (2000) 2 Supreme Court Cases 380. The complainant has successfully proved his case by establishing all the necessary ingredients of the offence under the section 138 of NI Act, while the accused has miserably failed to rebut presumptions and took any defence as he has failed to lead any evidence except himself as DW1. It is worthwhile to mention here that DW1 took another plea of defence which never raised at the of recording the notice under section 251 Cr.P.C. wherein he took a plea of defence that accused admitted that the cheques in question were issued against friendly loan, as a security. However, loan amount has been repaid by him to the complainant but the complainant has not returned the cheques in question to him despite his repeated demands for the same. Whereas he has taken another false plea of defence at the time of framing of notice dated 20.08.2016, cross examination of the complainant and statement under section 313 Cr. P.C. that one of the cheques was encashed by Mr Chetan who happen to be accused's brother- in-law, but he is not on speaking terms with him. The complainant was never cross-examined on this aspect. Offence under section 138 NI Act is completed when the accused failed to make the payment from 15 days of receipt Anita Saini Vs. Rakesh Kumar Singh 16/36 of the notice for the dishonored cheque issued against the legally enforceable debt. The accused has admitted that he has given the duly signed cheques, however it has been stated by the accused that the cheque was issued to the complainant as security cheque against the friendly loan. It means that he has accepted the receiving of loan. Though he has stated that he has repaid the loan in cash, but no cogent evidence was ever led in support of his defence. He also submitted that he has asked the complainant to return the cheque, but he has failed to prove his defence by leading any oral or documentary evidence. Moreover, the complainant was never cross-examined in the aspects of repayment of loan in cash, and the issuance of cheque as a security as well as not returning the cheques by the complainant on his demand.The complainant has to prove that the cheque was issued against the legally enforceable liability/debt which were subsequently dishonored due to insufficiency of fund statuary legal notice for making the payment was issued within limitation, despite receiving of the notice accused failed to make the payment within statutory period nor gave any reply to the legal notice. The complainant has successfully proved all of the above Anita Saini Vs. Rakesh Kumar Singh 17/36 facts. As issuance of cheques is not disputed receiving of legal notice is also not disputed and accused has not replied to the legal notice. He relied on R. Vadivelu Versus M/S Sakthi Asphalts and Pelts reported in 2003 [1] JCC [NI] 105. The insufficiency of fund at the time of presentation of the cheques in question are also not disputed, accused has not made the payment as demanded in the notice within 15 days from the receipt of notice. He further relied on Krishna Bhoopal Vs Sanam Jhansi devi & Anr 2003 JCC NI 96.
11. On the other hand, Ld. Counsel Sh. Rakesh Gupta for the accused submitted that accused has been successful in rebutting presumption u/s 139 N.I. Act. It is submitted by Ld. Counsel for the accused that the complainant has filed a false complaint without any basis. That the case of the complainant that he had given friendly loan for the sum of Rs. 4,40,000/- to the accused and alleged loan agreement was executed by the accused on 27/11/2013 but the complainant has not acknowledged/signed the alleged loan agreement. That the case of the complainant that she has paid Rs. 90,000/- cash to- the accused and issued three cheque for the sum of Rs. 1,00,000/- each and one cheque for the Anita Saini Vs. Rakesh Kumar Singh 18/36 sum of Rs. 50,000/- which was encashed by Mr. Chetan. That it is not mentioned in the loan agreement that the complainant has paid Rs. 90,000/- cash and cheque for Rs. 50,000/- has been issued in favour of Chetan. That the complainant has admitted that she knew that the cheque has been encashed in the account of Chetan even then she has not taken any action against Mr. Chetan. That as per the memos of the cheques bearing No 282210 Ex.CW1/7, the cheque has been dishonoured with the reason "OTHERS" and the said reason has not attracted section 138 of Negotiable Instruments act. That the legal notice dated 01.08.2014 Ex-CW-1/12 is also defective, as the cheque amount is 4,00,000/- but in the notice the complainant has demanded the loan amount i.e. Rs. 4,40,000/- hence the complaint filed on the basis of defective notice is also defective. He relied upon Kapil Aggarwal Vs Raghu Vias" 2007(4) Civil Court Cases 106 ( Delhi). That the loan agreement exhibit CW-1/2 was executed on 27.11.2013 and as per the case of the complainant the cheques bearing No. 143494 and 143495 have been cleared on 30.11.2013 and 13.12.2013. It is also admitted by the complainant that she was not sure that the loan amount has been delivered before Anita Saini Vs. Rakesh Kumar Singh 19/36 executing the Loan agreement. That in the cross examination dated 24.10.2016 the complainant has stated on oath that she has filed ITR for the relevant period of giving Loan and Loan amount has also been shown by the complainant in her ITR. That on 01.12.2016 the complainant has filed ITR for the period of 2015- 16 and in the said ITR Ex. CW1/15, the loan for the sum of Rs. 4,40,000/- has been mentioned however, the alleged loan was given in the year 2013-2014. It is also admitted by the complainant that after 24.10.2016, the complainant has filed the said ITR. It clearly proves that only to fill the locuna and to prove her false case she has filed the ITR in the year 2015. That the complainant has admitted that she is a money-lender as she has not denied that and she has stated that she has no knowledge a for the business of money lending, licence is required and she will apply for the same. That the accused has already paid Rs. 1,60,000/- to the complainant after 30.09.2021. It is therefore, submitted that the case of the complainant deserves to be dismissed.
12. Submissions of both side considered.
POINTS FOR DETERMINATION : -
Anita Saini Vs. Rakesh Kumar Singh 20/36
13. Whether the complainant has been able to establish ingredients of offence punishable under Section 138 of The Negotiable Instruments Act, 1881 against the accused? APPRECIATION OF EVIDENCE AND FINDINGS
14. Section 118 (a) of The Negotiable Instruments Act, 1881 provides as under : -
"Section 118. Presumption as to negotiable instruments.- Until the contrary is proved, the following presumption shall be made:-
(a) of consideration- that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, was indorsed, negotiated or transferred for consideration;........."
Section 139 of The Negotiable Instruments Act, 1881 provides as under :-
"Section 139 Presumption in favour of holder.- 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."
In matter of "Krishna Janardhan Bhat Vs. Dattatraya G. Hegde" (2008) 4 SCC 54, Hon'ble Supreme Court of India has observed : -
"32. An accused for discharging the burden of proof placed upon him under a statute need not examine himself. He may discharge his burden on the basis of the materials already brought on record. An accused has a constitutional right to maintain silence. Standard of proof on the part of the accused and that of the prosecution in a criminal case is different.
34. Furthermore, whereas prosecution must prove the guilty of an accused beyond all reasonable doubt, the Anita Saini Vs. Rakesh Kumar Singh 21/36 standard of proof so as to prove a defence on the part of the 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."
In matter of "Mallavarapu Kasivisweswara Rao Vs. Thadikonda Ramulu Firm" (2008) 7 SCC 655, Hon'ble Supreme Court of India (though it was a civil matter related to promissory note, but is relevant to refer herein) has held : -
"17. Under Section 118 (a) of the Negotiable Instruments 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 brining 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."
In matter of "Bharat Barrel & Drum Mfg. Co. V. Amin Chand Payrelal" (1999) 3 SCC 35, Hon'ble Supreme Court of India (though it was also a civil matter related to promissory note, but is relevant to refer herein) has held : -
"12. Upon consideration of various judgments as noted hereinabove, 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 rebuttable. The defendant can prove the non-existence 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 non-existence of the Anita Saini Vs. Rakesh Kumar Singh 22/36 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 event, the plaintiff is entitled under the 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 initial onus of proof by showing the non- existence of the consideration, the plaintiff would invariably 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 nor contemplated and even if led, is to be seen with a doubt. The bare denial of the passing of the consideration apparently does not appear to be any defence. Something which is probable has to be brought on record for getting the benefit of shifting the onus of proving to the plaintiff. To disprove the presumption, the defendant has to bring on record such facts and circumstances upon consideration of which the court may either believe that the consideration did not exist or its non-existence was so probable that a prudent man would, under the circumstances of the case, shall act upon the plea that it did not exist."
In matter of "Rangappa Vs. Sri Mohan" (2010) 11 SCC 441 which is a Full Bench Decision, Hon'ble Supreme Court of India while discussing above said provisions, judgments and other case law on the point has held : -
"26. In light of these extracts, we are in agreement with the respondent claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To the extent, the impugned observations in Krishna Janardhan Bhat may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant.
27. Section 139 of the Act is an example of a reverse onus Anita Saini Vs. Rakesh Kumar Singh 23/36 clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the defendant-accused cannot be expected to discharge an unduly high standard or proof."
28. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of "preponderance of probabilities". Therefore, if the accused is able to raise a probable defence which creates doubt about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own."
15. So, precisely there is initial presumption of legally enforceable debt or liability against the accused side, but same is rebuttable. The standard of proof for rebuttal is preponderance of probabilities. Accused side can lead evidence in defence, even can rely on materials submitted by complainant and can rely upon circumstances also to show non-existence of consideration or it being improbable and need not adduce evidence of his own for the same. After going through the complaint, documents filed Anita Saini Vs. Rakesh Kumar Singh 24/36 on record and the evidence recorded during trial, this Court is of the opinion that the accused has failed to rebut the presumption raised initially in favour of the complainant under section 139 N.I. Act.
16. The first contention of Ld. Counsel for the accused is that the legal demand notice Ex.CW1/12 is defective as the amount demanded in the notice is more than the cheque amount and hence the same is not in terms of section 138 N.I. Act. Ld. Counsel for the accused has relied upon the judgment of Kapil Aggarwal (supra). However, the said judgment is not applicable to the facts of the present case. In Kapil Aggarwal (supra) the complainant has sent the legal demand notice stating an omnibus amount without specifying the cheque amount and the interest and other components. In this regard, it is relevant to reproduce the observations made by Hon'ble Supreme Court in Dashrathbhai Trikambhai Patel Vs. Hitesh Mahendrabhai Patel & Anr. (Criminal Appeal No. 1497 of 2022, dated 11.10.2022) in paras 23 and 24:
"23. This Court has interpreted the phrase 'the said amount of money' as it finds place in proviso (b) to Section
138. In Suman Sethi v. Ajay K Churiwal, the appellant issued a cheque for rupees twenty lakhs in favour of the first respondent. The cheque was dishonoured. A demand Anita Saini Vs. Rakesh Kumar Singh 25/36 notice for an amount higher than the cheque amount was issued. A two-Judge Bench of this Court held that the demand has to be made for the 'said amount', which is the cheque amount. It was also observed that the question of whether the notice demanding an amount higher than the cheque amount is valid would depend on the language of the notice:
"8. It is a well-settled principle of law that the notice has to be read as a whole. In the notice, demand has to be made for the "said amount"
i.e. the cheque amount. If no such demand is made the notice no doubt would fall short of its legal requirement. Where in addition to the "said amount" there is also a claim by way of interest, cost etc. whether the notice is bad would depend on the language of the notice. If in a notice while giving the break-up of the claim the cheque amount, interest, damages etc. are separately specified, other such claims for interest, cost etc. would be superfluous and these additional claims would be severable and will not invalidate the notice. If, however, in the notice an omnibus demand is made without specifying what was due under the dishonoured cheque, the notice might well fail to meet the legal requirement and may be regarded as bad."
24. In KR Indira v. G. Adinarayana , it was held that the notice did not demand the payment of the cheque amount but the loan amount. It was observed that for the purposes of proviso (b), the amount covered in the dishonoured cheque must be demanded. In Rahul Builders (supra), the drawee demanded the payment of rupees 8,72,409 which was higher than the sum of rupees 1,00,000 represented in the cheque. It was reiterated that the phrase 'payment of the said amount' in proviso (b) would mean the cheque amount. Since the demand in the notice was not severable as the cheque amount could not be severed from the demand for the additional amount, it was held that it was an omnibus notice. Justice SB Sinha writing for a two- Judge Bench of this Court observed:
"10. [...] One of the conditions was service of a notice making demand of the payment of the amount of cheque as is evident from the use of the phraseology "payment of the said amount of Anita Saini Vs. Rakesh Kumar Singh 26/36 money". [...] It is one thing to say that the demand may not only represent the unpaid amount under cheque but also other incidental expenses like costs and interests, but the same would not mean that the notice would be vague and capable of two interpretations. An omnibus notice without specifying as to what was the amount due under the dishonoured cheque would not subserve the requirement of law. Respondent 1 was not called upon to pay the amount which was payable under the cheque issued by it. The amount which it was called upon to pay was the outstanding amounts of bills i.e. Rs 8,72,409. The noticee was to respond to the said demand. Pursuant thereto, it was to offer the entire sum of Rs8,72,409. No demand was made upon it to pay the said sum of Rs 1,00,000 which was tendered to the complainant by cheque dated 30-4-2000. What was, therefore, demanded was the entire sum and not a part of it."
In the present case, the legal demand notice Ex.CW1/12 issued by the complainant does not mention any omnibus amount which is more than that of the cheque amount. The complainant has specified the cheque amount and the other components of the loan amount given in cash by the complainant. Thus, the contention of Ld. Counsel for the accused is without any force.
17. It is relevant to note that the accused has not disputed the fact that he has taken loan from the complainant. The version of the accused is that he has taken loan of Rs. 3,00,000/- from the complainant which he has repaid. The accused disputes the case of the complainant that the accused was given loan of Rs.
Anita Saini Vs. Rakesh Kumar Singh 27/36 90,000/- in cash and that Rs.50,000/- was given by cheque in the name of the his relative Chetan. The accused has taken the plea that he has issued six cheques to the complainant as security which the complainant did not return. He has further taken the plea that two of the said six cheques were given by the complainant to her friend Ms. Jyoti without his consent and Ms. Jyoti misused those cheques. It is the case of the accused that he has taken a sum of Rs. 3,00,000/- and he has returned the said loan. It is pertinent to mention that accused could not produce any proof that he has paid a sum of Rs. 3,00,000/- to the complainant. Accused deposed in support of his case but could not produce any receipt, documentary proof or any other material which could have corroborated his defence. As per the accused, he issued six signed cheques to the complainant but the complainant misused the same. However, admittedly no complaint was made by him against the complainant; he neither issued stop payment instructions in regard to the cheques issued nor has he demanded those cheques back from the complainant. It is also relevant to note that the accused has admitted the execution of Ex.CW1/2 i.e the receipt dated 27.11.2013.The said Anita Saini Vs. Rakesh Kumar Singh 28/36 receipt is in the handwriting of the accused where the accused admitted the loan of Rs.4,40,000/- taken by him from the complainant. The accused, however, has taken the plea that the receipt was executed even before the entire loan amount was given to him and he actually received Rs. 3,00,000/-. Ld. Counsel for the accused has relied upon the cross-examination of the complainant on 24.10.2016 where the complainant stated that she could not tell whether she has given the complete amount to the accused before the cheques in question were given by the accused. This deposition does not prove anything. The contents of the documents can be proven by the document itself and the document Ex.CW1/2 in unequivocal terms records that the accused has borrowed a sum of Rs.4,40,000/- from the complainant. The accused could not explain the acknowledgment given by him in Ex.CW1/2. He only deposed during his cross- examination that he was expecting that the complainant would pay him back a sum of Rs.1,40,000/-.
18. It is pertinent to mention that the accused denied receiving loan through cheque of Rs.50,000 in the name of Mr. Chetan. The accused carefully avoided explaining the relationship Anita Saini Vs. Rakesh Kumar Singh 29/36 between him and Chetan until he was asked in his cross- examination where he admitted that Mr. Chetan is his brother-in- law. Accused stated that he is not in speaking terms with him. The accused has not disputed seeking loan from the complainant. The stand taken by the accused is that he issued the cheques as security for the loan. It is now a settled law that there is no charm in the phrase "security cheque" and that the cheque issued for security for loan would mature for presentation if the loan is not paid by the borrower by any other means. In this regard the observations made by Hon'ble Supreme Court in the case of Sripati Singh v. State of Jharkand (2021 SCC OnLine SC 1002) is relevant which is reproduced as under:
"17. A cheque issued as security pursuant to a financial transaction cannot be considered as a worthless piece of paper under every circumstance. 'Security' in its true sense is the state of being safe and the security given for a loan is something given as a pledge of payment. It is given, deposited or pledged to make certain the fulfilment of an obligation to which the parties to the transaction are bound. If in a transaction, a loan is advanced and the borrower agrees to repay the amount in a specified timeframe and issues a cheque as security to secure such repayment; if the loan amount is not repaid in any other form before the due date or if there is no other understanding or agreement between the parties to defer the payment of amount, the cheque which is issued as security would mature for presentation and the drawee of the cheque would be entitled to present the same. On such presentation, if the same is dishonoured, the consequences contemplated under Anita Saini Vs. Rakesh Kumar Singh 30/36 Section 138 and the other provisions of N.I. Act would flow. When a cheque is issued and is treated as 'security' towards repayment of an amount with a time period being stipulated for repayment, all that it ensures is that such cheque which is issued as 'security' cannot be presented prior to the loan or the instalment maturing for repayment towards which such cheque is issued as security. Further, the borrower would have the option of repaying the loan amount or such financial liability in any other form and in that manner if the amount of loan due and payable has been discharged within the agreed period, the cheque issued as security cannot thereafter be presented. Therefore, the prior discharge of the loan or there being an altered situation due to which there would be understanding between the parties is a sine qua non to not present the cheque which was issued as security. These are only the defences that would be available to the drawer of the cheque in a proceedings initiated under Section 138 of the N.I. Act. Therefore, there cannot be a hard and fast rule that a cheque which is issued as security can never be presented by the drawee of the cheque. If such is the understanding a cheque would also be reduced to an 'on demand promissory note' and in all circumstances, it would only be a civil litigation to recover the amount, which is not the intention of the statute. When a cheque is issued even though as 'security' the consequence flowing therefrom is also known to the drawer of the cheque and in the circumstance stated above if the cheque is presented and dishonoured, the holder of the cheque/drawee would have the option of initiating the civil proceedings for recovery or the criminal proceedings for punishment in the fact situation, but in any event, it is not for the drawer of the cheque to dictate terms with regard to the nature of litigation."
It is also pertinent to mention that the accused has admitted issuance of the cheques Ex.CW1/3 to Ex.CW1/6 in the sum of Rs. 1,00,000/- to the complainant. Had the accused taken only Rs.3,00,000/- from the complainant, there would be no occasion Anita Saini Vs. Rakesh Kumar Singh 31/36 for him to issue four cheques for Rs. 1,00,000/- each.
19. It is the further contention of Ld. counsel for the accused that the Ex. CW1/3 and Ex. CW1/4 dishonoured with the remarks 'Others' and hence, section 138 N.I. Act is not attracted. It is pertinent to mention that cheque Ex. CW1/3 was again presented for payment but the same got dishonored vide returning memo Ex.CW1/11 with the remarks 'Fund Insufficient'. The accused does not dispute issuing cheque to the complainant and the fact that they were dishonoured. The accused has not been able to prove that he had in fact repaid the loan. In these circumstances, this Court can presume that the cheque Ex.CW1/4 was dishonoured either due to insufficient funds or that it exceeds the amount arranged to be paid from that account.
20. It is also the contention of the accused that the complainant is a money lender and she has admitted that the complainant did not have any licence in this regard. Even though, it is to be presumed for the sake of arguments that the complainant does not a have licence for granting loans that by itself does not help the accused in rebutting the presumption drawn in favour of the Anita Saini Vs. Rakesh Kumar Singh 32/36 complainant u/s 139 N.I Act. The accused has not disputed that he has sought loan from the complainant and admitted the factum of issuance of cheques Ex. CW1/3 to Ex. CW1/6 to the complainant. The accused could not prove the defence taken by him. Thus, merely by the statement of the complainant during the cross-examination that she did not know whether a licence is required for giving loan would not rebut the presumption u/s 139 N.I Act.
21. It is further contention of the accused that the complainant could not prove whether she has shown the loan given to the accused in the ITR for the relevant period. It is the contention of Ld. Counsel of the accused that the complainant filed the ITR for the period 2015-16 whereas the loan was given in the year 2013- 14 and that the ITR for the period 2015-16 was only filed after the question in this regard was asked during her cross- examination. In this regard, it is suffice to say that the accused has failed to rebut the presumption u/s 139 N.I. Act by raising preponderance of probabilities in his favour and without the accused rebutting the statutory presumption u/s 139 NI Act, any suspicion on the case of the complainant cannot be raised Anita Saini Vs. Rakesh Kumar Singh 33/36 regarding want of evidence for the source of funds for advancing the loan. In this regard, reliance can be placed on the judgment of Hon'ble Supreme Court in Rohitbhai Jivanlal Patel Vs. State of Gujarat (2019 18 SCC 106). In Rohit Bhai, the Trial Court found that the accused had admitted his signature on the cheques and with reference to the decision in the case of Rangappa v. Sri Mohan (2010) 11 SCC 441, drew the presumption envisaged by Section 139 of NI Act. However, the trial Court found that the complainant failed to lead any evidence in regard to his financial capacity to advance loan. The Hon'ble High Court reversed the decision of acquittal and observed that the presumption under Sections 118 and 139 of the NI Act was required to be drawn that the cheques were issued for consideration and until contrary was proved, such presumption would hold good. The Hon'ble Supreme Court confirmed the decision of Hon'ble High Court and sustained the conviction of the accused. It is relevant to reproduce the para 17 and 18 in this regard :
" 17. In the case at hand, even after purportedly drawing the presumption under Section 139 of the NI Act, the Trial Court proceeded to question the want of evidence on the part of the complainant as regards the source of funds for advancing loan to the accused and want of examination of relevant witnesses who allegedly extended him money for advancing it to the accused. This Anita Saini Vs. Rakesh Kumar Singh 34/36 approach of the Trial Court had been at variance with the principles of presumption in law. After such presumption, the onus shifted to the accused and unless the accused had discharged the onus by bringing on record such facts and circumstances as to show the preponderance of probabilities tilting in his favour, any doubt on the complainant's case could not have been raised for want of evidence regarding the source of funds for advancing loan to the accused-appellant. The aspect relevant for consideration had been as to whether the accused-appellant has brought on record such facts/material/circumstances which could be of a reasonably probable defence.
18. In order to discharge his burden, the accused put forward the defence that in fact, he had had the monetary transaction with the said Shri Jagdishbhai and not with the complainant. In view of such a plea of the accused- appellant, the question for consideration is as to whether the accused-appellant has shown a reasonable probability of existence of any transaction with Shri Jagdishbhai? In this regard, significant it is to notice that apart from making certain suggestions in the cross- examination, the accused- appellant has not adduced any documentary evidence to satisfy even primarily that there had been some monetary transaction of himself with Shri Jagdishbhai. Of course, one of the allegations of the appellant is that the said stamp paper was given to Shri Jagdishbhai and another factor relied upon is that Shri Jagdishbhai had signed on the stamp paper in question and not the complainant."
Thus, the contention of the accused cannot be sustained. CONCLUSION
22. It stands established on record from the evidence recorded and documents exhibited that complainant has advanced friendly loan to the accused and the accused issued cheques in question Ex. CW1/3 to Ex. CW1/6 to the complainant for discharge of legal liability. It has been established that the cheque Ex. CW1/3 to Ex. CW1/6 issued by the accused in discharge of his legal Anita Saini Vs. Rakesh Kumar Singh 35/36 liability got dishonored on presentment, complainant served legal demand notice upon accused demanding the cheque amount in question, however, accused failed to make the said payment within statutory period despite service. So, all the ingredients of offence punishable under Section 138 of The Negotiable Instruments Act, 1881 stands established on record. The defence raised by accused side is not tenable as per above discussions. FINAL ORDER
23. In view of the aforementioned facts and circumstances, this Court is of the opinion that complainant has duly proved its case against the accused for offence punishable under Section 138 of The Negotiable Instruments Act, 1881 qua accused. Accordingly accused namely Sh. Rakesh Kumar Singh stands convicted for offence punishable under Section 138 of the Negotiable Instruments Act, 1881.
Digitally signed by PRANAV
Announced in the open Court PRANAV JOSHI
on 03.03.2023. JOSHI Date:
2023.03.03
17:03:31 +0530
(PRANAV JOSHI)
M.M.-03/North District,
Rohini/Delhi 03.03.2023.
Anita Saini Vs. Rakesh Kumar Singh 36/36