Delhi District Court
Shastri Sharma vs Mukesh Garg on 21 January, 2023
IN THE COURT OF MR. SARTHAK PANWAR,
METROPOLITAN MAGISTRATE09, NI ACT, SOUTHWEST,
DWARKA, DELHI
In Re:
CNR No. DLSW020029702019
CC No. 2350/2019
Shashtri Sharma,
S/o Sh. Chunni Lal Sharma,,
R/o RZ2C/3, Gali No. 7, Indra Park,
Palam Colony, New Delhi - 110045. ............Complainant
Versus
Sh. Mukesh Garg,
S/o Sh. Subhas Chand Garg,
RZ10C, Gali No.9, Indra Park
Palam Road,
New Delhi - 110045. ............Accused
(1) Offence complained of or
proved : 138 N.I. Act
(2) Plea of accused : Pleaded not guilty
(3) Date of institution of case: 19.01.2019
(4) Date of conclusion of arguments: 21.01.2023
(5) Date of Final Order : 21.01.2023
Shastri Sharma vs Mukesh Garg
CC No.2350 of 2019 DOD 21.01.2023 Page no. 1 of 23
(6) Final Order : Acquittal
JUDGMENT
1. By this judgment I shall dispose of the present complaint case filed by the complainant under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the 'Act').
2. Brief facts relevant for the decision of the case are as under: The complainant alleged that accused had taken friendly loan of Rs.12,00,000/ in cash from the complainant on 30.09.2016 with an assurance to return the same on 06.12.2018. He further alleged that at the same time when loan was granted on 30.09.2016 accused had given a post dated cheque No. 292077 dated 06.12.2018 drawn on IDBI Bank, Janakpuri, New Delhi for repayment of aforesaid loan. Thereafter, complainant presented the aforesaid cheque in his bank account in Indian Overseas Bank, DBlock, Janakpuri which was dishonoured vide returning memo dated 14.12.2018 with the remarks "account blocked". Thereafter, complainant through his legal counsel sent legal demand notice dated 21.12.2018 to the accused vide speed post calling upon the accused to pay cheque amount within statutory period of 15 days and despite service of the notice upon the accused, he failed to pay the cheque amount within 15 days of service of notice. Thereafter, complainant has filed the present complaint case with a prayer that accused be summoned, tried and convicted according to law.
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3. In his presummoning evidence, complainant examined himself on oath via affidavit Ex. CW1/1 and reiterated the contents of the complaint and further placed on record the original cheque in dispute i.e. Ex. CW1/A, original cheque returning memo as Ex. CW1/B, Copy of legal demand notice as Ex. CW1/C, Original receipts of postal department as Ex. CW1/D and tracking reports as Ex. CW1/E.
4. After careful perusal of the record and upon appreciation of the presummoning evidence lead by the complainant, accused was summoned for the offence under Section 138 of the Act and thereafter notice under Section 251 Cr.P.C. for the offence u/s 138 Negotiable Instrument Act was framed against him to which he pleaded not guilty and claimed trial. Accused further admitted that the has issued the cheque in dispute. He further admitted that cheque in question bears his signature. He further admitted that he received the statutory legal demand notice. In his plea of defence, accused stated that he took Rs.8 lakhs from complainant and he has repaid Rs.4,30,000/ to the complainant and he is liable to pay remaining Rs.3,70,000/ as balance amount to the complainant. Thereafter, matter was listed for complainant's evidence.
5. In his post summoning evidence on 15.01.2020, complainant had adopted his presummoning evidence filed by way of affidavit as his post summoning evidence. Complainant as CW 1 was partly crossexamined on 15.01.2020 by Ld. Counsel for the accused and was further crossexamined on 23.02.2021 duly by Ld. Counsel for Shastri Sharma vs Mukesh Garg CC No.2350 of 2019 DOD 21.01.2023 Page no. 3 of 23 the accused. No other witness was produced by the complainant and he closed his evidence by giving a separate statement to this effect on 23.02.2021. Thereafter, matter was listed for statement of the accused.
6. Thereafter, statement of accused under Section 313 Cr.P.C. was recorded in which all the incriminating evidence were put to him, in which accused again admitted his signature on cheque in question. However, denied the filling of any other particulars on the cheque in question. He admitted that he received the legal demand notice and further stated that he also gave reply to the same. He further denied receiving of loan of Rs.12,00,000/ in cash on 30.09.2016 and stated that he took loan of Rs. 5,00,000/ on 30.09.2016 which was to be repaid by him on 06.12.2018. He further stated that he had given the cheque in question as blank signed security cheque at the time of taking loan of Rs. 5,00,000/. He further stated that he used to pay Rs.15,000/ per month to the complainant and he has repaid sum of Rs.4,30,000/ in total to the complainant. He further stated that he has further taken loan of Rs.2,00,000/ in February 2017 and of Rs.1,00,000/ in March 2017 from the complainant and complainant has misused the present cheque in disptue. On being asked, whether the accused wants to lead defence evidence, accused answered in affirmative. However, on 07.05.2022, Ld. Counsel for the accused submitted that he does not want to lead defence evidence and defence evidence was closed by order of this Court. Thereafter, matter was listed for final arguments.
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7. In his final arguments, Ld. Counsel for the complainant argued that accused has admitted his signature on the cheque in dispute at the time of framing of notice u/s 251 Cr.P.C as well as in his statement U/s 313 Cr.P.C. Ld. Counsel for the complainant further argued that accused has taken loan of Rs.12,00,000/ in cash from the complainant on 30.09.2016 and the version of the accused that he has taken loan of Rs.8,00,000/ and repaid Rs.4,30,000/ in absence of any credible evidence on record is purely baseless and concocted story in order to save himself from the clutches of law. It was further averred by the Ld. Counsel for the complainant that accused has failed to rebut the statutory presumptions raised against him u/s 139 r/w section 118(a) of the Act, therefore accused is liable to be convicted u/s 138 of the Negotiable Instruments Act.
8. In rebuttal, Ld. Counsel for the accused in his final arguments reiterated the version of the accused in answer to the notice u/s 251 Cr.P.C as well as in his statement u/s 313 Cr.P.C that accused has never taken loan of Rs.12,00,000/ as alleged by the complainant and accused has only taken loan of Rs.8,00,000/ in parts i.e. Rs.5,00,000/ on 30.09.2016, Rs.2,00,000/ in February 2017 and Rs.1,00,000/ in March 2017. He further argued that he has repaid Rs.4,30,000/ out of Rs.8,00,000/ to the complainant in installments and the evidence of which is document Ex. CW 1/D4 on which complainant has admitted his signature. He further argued that he has replied to the Statutory legal demand notice of the complainant in which he has clearly mentioned about the above said transaction but complainant due to his ulterior motives have not mentioned anything about the reply in his Shastri Sharma vs Mukesh Garg CC No.2350 of 2019 DOD 21.01.2023 Page no. 5 of 23 complaint. He further argued that there was no documents such as loan agreement to prove that complainant has granted loan in sum of Rs.12,00,000/ to the accused. He further argued that complainant failed to prove the sources of fund and financial capacity to grant the alleged loan of Rs.12,00,000/. He further argued that the story of the complainant that he arranged Rs.7,00,000/ out of Rs.12,00,000/ from his brother i.e. Giri Raj Kishore Sharma and Rs.5,00,000/ out of sale consideration from the sale of plot is totally baseless and concocted story as he has never examined Giri Raj Kishore Sharma as witness in the Court in the present matter and the document Ex. CW 1/D3 which is paper regarding sale of plot as stated by the complainant does not bear the name of the complainant as a seller or as Attorney holder and name of the complainant appears as a witness in the aforesaid document. He further argued that there were several inconsistencies between the version of the complainant in his complaint and from his answers given by him in his crossexamination. He further argued that the loan was not a friendly loan but was given on interest. He further argued that complainant has not disclosed the factum of the loan advanced to the accused in his ITRs. He further submitted that accused has sufficiently rebutted the statutory presumption u/s 139 r/w Section 118 (a) of the Act. He further submitted that the case of the complainant is inherently weak and suffers from material lapses and is not sufficient to establish the guilt of the accused and complainant has failed to prove his case beyond reasonable doubt and accused is liable to be acquitted u/s 138 of Negotiable Instruments Act.
9. I have gone through the entire record and carefully perused the Shastri Sharma vs Mukesh Garg CC No.2350 of 2019 DOD 21.01.2023 Page no. 6 of 23 evidence led by both the parties complainant as well as the accused but before appreciating the facts of the case in length for arriving at any conclusion, let the relevant position of the law be discussed first : Before finding the conviction of the accused u/s 138 of the Negotiable Instruments Act, it has to be established by the complainant cumulatively that :
(i) the cheque in question was issued by the accused in favour of the complainant in discharge of legally enforceable liability;
(ii) the cheque was presented before the bank for encashment within three months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(iii) a demand is made in writing by the payee or holder in due course by the issuance of a notice in writing to the drawer of the cheque within thirty days of the receipt of information from the bank of the return of the cheques; and
(iv) there is failure of the drawer to make the payment of the cheque amount to the payee or the holder in due course within fifteen days of the receipt of the notice.
This legal position was discussed by the Hon'ble Supreme Court of India in case titled as MSR Leathers vs. S. Palaniappan (2013) 1 SCC 177, wherein it was held that, "6........ The proviso to Section 138, however, is all important and stipulates three distinct conditions precedent, which must be satisfied before the dishonour of a cheque can constitute an offence and become punishable.
Shastri Sharma vs Mukesh Garg CC No.2350 of 2019 DOD 21.01.2023 Page no. 7 of 23 The first condition is that the cheque ought to have 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. The second condition is that the payee or the holder in due course of the cheque, as the case may be, ought to make 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.
The third condition is that the drawer of such a cheque should have failed to make 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. It is only upon the satisfaction of all the three conditions mentioned above and enumerated under the proviso to Section 138 as clauses (a), (b) and
(c) thereof that an offence under Section 138 can be said to have been committed by the person issuing the cheque.
This Court shall now examine if the aforesaid four ingredients as described in the forgoing paragraph have been duly satisfied in this Shastri Sharma vs Mukesh Garg CC No.2350 of 2019 DOD 21.01.2023 Page no. 8 of 23 case or not.
10. That whether the cheque in dispute was presented within the period of its validity or not has not been disputed by the accused at any stage of trial. Accordingly, condition no. (ii), as above stands satisfied.
11. Accused has stated that he has received the legal notice i.e. Ex. CW 1/C in the notice framed by this Court u/s 251 Cr.P.C as well as in his statement u/s 313 Cr.P.C., and also replied for the same. Accordingly, conditions No.(iii) and (iv) as above also stands satisfied as it is admitted by the accused that he has received the statutory legal notice and despite which he has failed to make payment of cheque amount within 15 days from the date of receipt of Statutory legal notice.
12. It is now only remains to be seen whether the accused issued the cheque in question i.e. Ex. CW 1/A in favour of the complainant in order to discharge his legally enforceable liability or not.
13. Negotiable Instrument Act, 1881 raises two presumptions in favour of the holder of the cheque i.e. Complainant in the present case, as soon as the execution of cheque is proved. Firstly, under Section 118 (a) N.I. Act, with respect to the consideration that every negotiable instrument was made or drawn for consideration and when such instrument has been accepted , transferred, negotiated or endorsed was accepted, endorsed, negotiated or transferred for Shastri Sharma vs Mukesh Garg CC No.2350 of 2019 DOD 21.01.2023 Page no. 9 of 23 consideration. Secondly, a presumption under section 139 N.I. Act that it shall be presumed that the holder of cheque received the cheque for discharge, in whole or in part of any debt or other liability unless contrary is proved.
Section 118 (a) of the N.I. Act provides :
"Presumptions as to negotiable instruments. --Until the contrary is proved, the following presumptions shall be made: 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, indorsed, negotiated or transferred for consideration;
Section 139 of the N.I. Act further provides as follows : "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."
However, both the presumptions are rebuttable in nature as held by Hon'ble Supreme Court of India in case titled as Basalingappa Vs. Mudibasappa, Crl. Appeal No.636 of 2019, (2019) 5 SCC 418: The same is produced as under :
23. We having noticed the ratio laid down by this Court in above cases on Sections 118(a) and139, we now summarise the principles enumerated by this Court in following manner:
(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.
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(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 imposed an evidentiary burden and not a persuasive burden.
14. As per the ratio laid down by Hon'ble Supreme Court of India in the above mentioned Judgment, the presumptions u/s 118(a) read with Section 139 of the Act has to be compulsorily raised against the accused once execution of cheque by the accused is either admitted or proved by the complainant, and thereafter the burden is shifted upon accused to prove otherwise. These presumptions shall be rebutted only when the contrary is proved by the accused i.e. the cheque was not issued for consideration and in discharge of any debt or liability etc. In the present case, accused has admitted his signature on the cheque in question, in answer to notice u/s 251 Cr.P.C and also in his statement u/s 313 Cr.P.C. Reference in this regard can also be made to judgment of the apex Court in Rangappa vs Mohan AIR 2010 SC 1898, that Shastri Sharma vs Mukesh Garg CC No.2350 of 2019 DOD 21.01.2023 Page no. 11 of 23 " once the cheque relates to the account of the accused and he accepts and admits the signature on the said cheque, then initial presumption as contemplated u/s 139 of the Negotiable Instrument Act has to be raised by the Court in favour of the complainant."
Also in the case of K. Bhaskaran vs. Sankaran Vaidhyan Balan 1999 (4) RCR (Criminal) 309, it has been held by the Hon'ble Supreme Court as under: " As the signature in the cheque is admitted to be that of the accused, the presumption envisaged in section 118 of the Act can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears. Section 139 of the Act enjoins on the Court to presume that the holder of the cheque received it for the discharge of any debt or liability."
In view of the forgoing discussions, this Court is of the considered opinion that a presumption u/s 139 r/w section 118(a) N.I. Act can duly be raised against the accused.
15. Since the above said two presumptions has been duly raised against the accused our next point of determination is that whether the accused is able to rebut the abovesaid presumptions or not. It is now a settled law that accused can rebut these presumption on a scale of standard of preponderance of probabilities, and to rebut these presumptions it is open for the accused to rely upon the direct Shastri Sharma vs Mukesh Garg CC No.2350 of 2019 DOD 21.01.2023 Page no. 12 of 23 evidence lead by himself, or in the exceptional cases, the accused can also rely on materials submitted by the complainant i.e. (statutory notice, evidence etc.) during the trial in order to raise a probable defence. Reliance in this regard, can be placed on judgment of Hon'ble Supreme Court of India in case of Hiten P. Dalal vs. Bratindranath Banerjee (2001) 6 SCC.
"....................................Because both Sections 138 and 139 require that the Court "shall presume"
the liability of the drawer of the cheques for the amounts for which the cheques are drawn, ..., it is obligatory on the Court to raise this presumption in every case where the factual basis for the raising of the presumption had been established. "It introduces an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the accused" (ibid). Such a presumption is a presumption of law, as distinguished from a presumption of fact which describes provisions by which the court "may presume" a certain state of affairs. Presumptions are rules of evidence and do not conflict with the presumption of innocence, because by the latter all that is meant is that the prosecution is obliged to prove the case against the accused beyond reasonable doubt. The obligation on the prosecution may be discharged with the help of presumptions of law or fact unless the accused Shastri Sharma vs Mukesh Garg CC No.2350 of 2019 DOD 21.01.2023 Page no. 13 of 23 adduces evidence showing the reasonable possibility of the nonexistence of the presumed fact.
In other words, provided the facts required to form the basis of a presumption of law exists, no discretion is left with the Court but to draw the statutory conclusion, but this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary. A fact is said to be proved when, "after considering the matters before it, the Court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists" . Therefore, the rebuttal does not have to be conclusively established but such evidence must be adduced before the Court in support of the defence that the Court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of reasonability being that of the 'prudent man'."
16. In the backdrop of legal position as enunciated above, it is now to be examined by this Court that whether the accused on a scale of preponderance of probabilities has been able to rebut the presumptions which has been raised against him and in favour of the complainant, Shastri Sharma vs Mukesh Garg CC No.2350 of 2019 DOD 21.01.2023 Page no. 14 of 23 or has been able to demolish the case of the complainant to such extent to shift the onus placed upon the accused back again on the complainant, and if the Court comes to the conclusion that accused has not been able to rebut the presumptions raised against him by failing to bring on record direct evidence or by even failing to sufficiently perforate the case of the complainant, the complainant is entitled to a decision in his favour.
17. In light of the aforesaid legal position, this Court shall now first examine that whether the accused has been able to prove his defence in affirmative or not, by carrying out scrutiny of the evidence which has been led at the trial.
18. The principal defence which has been raised by the accused throughout the trial through his reply to Statutory legal demand notice sent by complainant, as well as from his plea of defence taken in notice u/s 251 Cr.P.C and from his statement under section 313 Cr.P.C is that he has only taken loan of Rs.8,00,000/ in total (i.e. Rs.5,00,000/ on 30.09.2016, Rs.2,00,000/ in February 2017 and Rs.1,00,000/ in March 2017) from the complainant and he has partly repaid the same in installments which cumulatively amounts to Rs.4,30,000/ and the balance amount is only Rs.3,70,000/, and he has never taken alleged loan of Rs.12,00,000/ from the complainant. He further stated that he had given the present cheque as blank signed security cheque to the complainant at the time of taking loan of Rs.5,00,000/ and the same has been misused by the complainant.
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19. In order to prove his version, accused has produced a hand written diary page at the time of crossexamination of the complainant i.e. Ex. CW 1/D4 which relates to the details of monetary transactions between the accused and the complainant as per which accused has taken loan of Rs.8,00,000/ in total i.e. Rs.5,00,000/ on 30.09.2016, Rs.2,00,000/ in February 2017 and Rs.1,00,000/ in March 2017 and repaid Rs.4,30,000/ in installments and balance amount left is only Rs.3,70,000/. In his crossexamination, complainant was specifically contradicted with the aforesaid document and has been asked whether the aforesaid document bears his signature at point A to which complainant answered in affirmative that the same is his signature. Complainant again voluntarily stated that he is not aware as to contents of the said page as his signature were obtained on blank paper. However, this explanation of the complainant does not inspire the confidence of the Court as complainant has failed to provide any satisfactory explanation that who obtained his signature on the blank document and for what purpose and under what circumstances, he has signed the aforesaid document i.e. Ex. CW 1/D4.
20. Further, upon being questioned as to complainant's financial capacity and sources of funds for granting of present loan, complainant in his crossexamination has stated that out of the loan amount of Rs.12,00,000/, he has borrowed Rs.7,00,000/ from his brother Sh. Giri Raj Kishore Sharma and remaining Rs.5,00,000/ were arranged from the sale consideration of his plot. However, in order to prove his version, complainant did not examine his brother Sh. Giri Raj Kishore Sharma as witness to prove the fact that he has Shastri Sharma vs Mukesh Garg CC No.2350 of 2019 DOD 21.01.2023 Page no. 16 of 23 arranged money from him to grant the present loan amount. In fact, in his crossexamination, he further stated that he do not even remember when exactly he took Rs.7,00,000/ from his brother. So far as it relates to the remaining amount of Rs.5,00,000/ which was allegedly arranged by selling of plot, complainant has produced a sale deed Ex. CW 1/D3 (colly. 9 pages) i.e. pertaining to the sale of entire first floor of the property bearing No. RZ271,Gali No.11 C, Village Nasirpur, New Delhi, Complainant in his crossexamination has admitted that his name is neither mentioned as seller nor mentioned as Attorney holder of the said plot in the aforesaid document i.e. Ex. CW 1/D3 (colly. 9 pages). Therefore, this testimony of the complainant also does not inspire any confidence of the Court as the name of the complainant is not mentioned in the aforesaid document at all either as a seller or as a Attorney Holder. In fact, complainant has failed to prove that he was party to transaction mentioned in the aforesaid document and in what capacity he has sold the property mentioned in the document i.e. Ex. CW 1/D3(colly.) and received funds in his name. Further, after careful perusal of the sale deed, it has also come to the notice that complainant has signed as a witness in the aforesaid document i.e. Ex. CW 1/D3 (colly.) and this Court has failed to understand that how complainant can be a seller as alleged by him and a witness to the same transaction as mentioned in document Ex. CW 1/D3 (colly.). Reliance in this regard can be placed upon decision passsed by Hon'ble High Court of Delhi in case titled as Kajal vs Marwah & Anr in Crl. Appeal No. 870 of 2013, DOD 27.03.2014 "......The complainant/appellant did not produce either of her sisters or Mr Jackey, to prove the loan Shastri Sharma vs Mukesh Garg CC No.2350 of 2019 DOD 21.01.2023 Page no. 17 of 23 alleged to have been taken by her from them.
Therefore, her deposition in this regard remained unsubstantiated. Even otherwise, it would be difficult to accept that the complainant would have raised loan from several persons, not for her personal needs, but for advancing loan to the respondent from time to time. In the normal course of human conduct, no one is likely to take obligation of others just to give loan to another person, unless he/she obtains a substantial advantage, by undertaking exercise of this nature. He/she would know that even if the person whom he/she lends money does not return the loan amount, she would have to return the loan, to the persons from whom it is taken".
21. With regard to the financial capacity of the complainant, Ld. Counsel for the accused has argued in his final arguments that although accused has taken loan in sum of Rs.8,00,000/ from the complainant in parts but the complainant had no financial capacity to grant alleged loan of Rs.12,00,000/ in the year 2016. Whereas, complainant has stated in his crossexamination that he was employed with H.N. Plastics since 2013 and he was drawing salary of Rs. 25,000/ only in year 2016. At the time of his crossexamination, he has also produced the ITR statements for year 20152016, 20162017 and 20172018 i.e. Ex. CW 1/D1 (colly. 6 pages) as per which his total gross income for three years is Rs. 10,53,980/. As per the version of the complainant in the year 2015, complainant has also purchased aforementioned plot via GPA dated 18 th day of October, 2015 in the sum of Rs.16,00,000/ in cash i.e. Ex. CW 1/D2 (colly. 6 pages) and as per his answers in crossexamination, out of Rs.16,00,000/, Rs.6,00,000/ were arranged from his savings and remaining Rs.10,00,000/ in cash were borrowed from his family (i.e. Shastri Sharma vs Mukesh Garg CC No.2350 of 2019 DOD 21.01.2023 Page no. 18 of 23 Rs.5,00,000/ from his father and Rs.2,50,000/ each in cash from his brothers). However, this version of the complainant also does not appear plausible as it is highly improbable to believe that a person having gross income of Rs. 10,53,980/ for three years and whose savings of Rs.6,00,000/ had already been exhausted while purchasing of the plot in the year 2015 could have financial capacity to grant loan of Rs.12,00,000/ in cash. Further, the story of the complainant that he has arranged Rs.5,00,000/ from the selling of the aforesaid plot also cannot be believed for the reasons as discussed previously. Hence, in view of the above discussion, this Court is of considered opinion that complainant lacked the financial capacity to grant loan in sum of Rs.12,00,000/ in cash to the accused in the year 2016. Reliance in this regard can also be placed upon the decision of Hon'ble Supreme court of India, in case titled as Basalingappa vs Mudibasappa Crl Appeal No. 636 of 2019, DOD 09.04.2019, as under: " 25........Thus, there was evidence on record to indicate that in December, 2009, he gave Rs.7 lakhs in sale agreement, in 2010, he made payment of Rs.4,50,000/ towards sale consideration and further he gave a loan of Rs.50,000/ for which complaint was filed in 2012 and further loan of Rs.6 lakhs in November, 2011. Thus, during the period from 2009 to November, 2011, amount of Rs.18 lakhs was given by the complainant to different persons including the accused, which put a heavy burden to prove the financial capacity when it was questioned on behalf of the accused, the accused being a retired employee of State Transport Corporation, who retired in 1997 and total retirement benefits, which were encashed were Shastri Sharma vs Mukesh Garg CC No.2350 of 2019 DOD 21.01.2023 Page no. 19 of 23 Rs.8 lakhs only....."
The Apex Court further held:
"28. We are of the view that when evidence was led before the Court to indicate that apart from loan of Rs.6 lakhs given to the accused, within 02 years, amount of Rs.18 lakhs have been given out by the complainant and his financial capacity being questioned, it was incumbent on the complainant to have explained his financial capacity. Court cannot insist on a person to lead negative evidence. The observation of the High Court that trial court's finding that the complainant failed to prove his financial capacity of lending money is perverse cannot be supported. We fail to see that how the trial court's findings can be termed as perverse by the High Court when it was based on consideration of the evidence, which was led on behalf of the defence....."
"29. High Court without discarding the evidence, which was led by defence could not have held that finding of trial court regarding financial capacity of the complainant is perverse. We are, thus, satisfied that accused has raised a probable defence and the findings of the trial court that complainant failed to prove his financial capacity are based on evidence led by the defence....."
Moreover, the complainant has admitted in his crossexamination that he has not disclosed in his ITR statements that he has advanced the loan of Rs.12,00,000/ in cash to the accused. Which is clearly in contravention of section 269 SS of Income Tax Act, 1961, wherein it is specifically laid down that if the loan is advanced in a sum which is more than Rs.20,000/ then it has to be reflected in books of accounts. Which also creates doubt regarding the the truthfulness of the fact Shastri Sharma vs Mukesh Garg CC No.2350 of 2019 DOD 21.01.2023 Page no. 20 of 23 that he has advanced the loan in the sum of Rs.12,00,000/ in cash to the accused. Reliance can also be placed upon the judgment of The Hon'ble High Court of Delhi in case of Kulvinder vs. Kafil Ahmed, in Crl. L.P. NO. 478 of 2011 dated 04.01.2013.
22. Further, there are inconsistencies in the case of complainant as in his complaint, he has stated that he has given the loan of Rs.12,00,000/ as friendly loan whereas in his crossexamination, he has stated that he has given loan to the accused @ 3% per month. Further, complainant has also failed to explain that why he has not mentioned about the reply to his statutory legal demand notice by the accused in his complaint, and why he has not dealt with the defence raised by the accused in his reply to the statutory legal demand notice in his complaint. The above mentioned facts also casts doubt on the truthfulness of the case of the complainant.
23. In light of the above mentioned facts and circumstances, it is revealed that the case of the complainant is inherently very weak. The complainant in the present matter has not been able to sufficiently prove in his evidence, his sources of funds and financial capacity for granting loan of Rs.12,00,000/ in cash to the accused. Further, there is also no written loan agreement on record to prove the case of the complainant. Further there are significant inconsistencies in answers of the complainant in his crossexamination. Further, complainant has not been able to provide satisfactory explanation as to why and under what circumstances, he has signed on handwritten diary note produced by the accused i.e. Ex. CW 1/D4. So far as it relates to the Shastri Sharma vs Mukesh Garg CC No.2350 of 2019 DOD 21.01.2023 Page no. 21 of 23 fact that the present cheque in question was given as blank signed security cheque, accused has not produced any evidence in support of it and hence this version of the accused in absence of any evidence on record does not hold any merit.
24. In order to rebut the presumption under section 139 r/w section118 (a) of N.I, Act, accused is not required to bring direct evidence before the Court, but he can also rely upon the evidence lead by the complainant or upon the circumstances which shows the probability of nonexistence of any legal debt or liability and accused has to prove his defence merely on the scale of preponderance of probabilities. Reliance in this regard can also be placed upon the judgment passed by Hon'ble Supreme Court of India in case titled as Tedhi Singh vs Narayan Dass Mahant in Crl. Appeal No.362 of 2022, 2022 Livelaw (SC 275) DOD 07.03.2022.
Relevant para reads as under
" However, the accused has the right to demonstrate that the complainant in a particular case did not have the capacity and therefore, the case of the accused is acceptable which he can do by producing independent materials, namely, by examining his witnesses and producing documents. It is also open to him to establish the very same aspect by pointing to the materials produced by the complainant himself. He can further more importantly, achieve this result through the crossexamination of the witnesses of the complainant. Ultimately, it becomes the duty of the Courts to consider carefully and appreciate the totality of the evidence and then come to a conclusion whether in the given case, the accused has shown that the case of the complainant is in peril for the reason that the accused has established a probable defence".
Shastri Sharma vs Mukesh Garg CC No.2350 of 2019 DOD 21.01.2023 Page no. 22 of 23 In the present matter, accused has been able to raise a reasonable probable defence from the case of the complainant himself and has sufficiently rebutted the presumption under section 139 r/w section118 (a) of N.I, Act.
25. Since the accused has rebutted the statutory presumptions raised against him on scale of preponderance of probabilities, now the onus of proving his case again shifts back upon the complainant. Now, presumption u/s 118(a) and 139 of the Act will not come for the rescue of the complainant and his case has to stand on his own legs. In the instant case, complainant has failed to discharge the burden of proof and could not prove his case beyond reasonable doubt.
26. Accordingly, accused Mukesh Garg is acquitted of the offence u/s 138 of Negotiable Instruments Act.
ANNOUNCED IN THE OPEN COURT Digitally signed TODAY On 21.01.2023. SARTHAK by SARTHAK PANWAR PANWAR Date: 2023.01.21 16:14:55 +0530 (SARTHAK PANWAR) METROPOLITAN MAGISTRATE 09 (NI Act) SOUTH WEST DISTRICT, DWARKA NEW DELHI Shastri Sharma vs Mukesh Garg CC No.2350 of 2019 DOD 21.01.2023 Page no. 23 of 23