Delhi District Court
Naju Devi vs . Pankaj Aggarwal 1 Of 17 on 17 March, 2023
IN THE COURT OF RAHUL JAIN,
METROPOLITAN MAGISTRATE - 04, N. I. ACT,
SOUTH-WEST DISTRICT, DWARKA DISTRICT COURTS, DELHI.
JUDGMENT
Naju Devi ....................Complainant
Versus
Pankaj Aggarwal ....................Accused
PS - Janakpuri
Under Section 138 of N. I. ACT, 1881
a) Sl. No. of the case : CC No. 2147/2019
b) Name of the complainant : Smt. Naju Devi,
W/o Sh. R.K. Meena,
R/o. H.No. - 117 A, C-3A,
Janakpuri, Delhi.
c) Name of the accused : Sh. Pankaj Aggarwal,
S/o Sh. Radha Krishan Aggarwal,
R/o- Flat No. 7, 3rd Floor,
Renu Apartments,
Kishan Garh, Eidgah, Dist- Agra,
Uttar Pradesh.
d) Offence complained of : Under Section 138 of N. I. Act, 1881
e) Plea of accused : Pleaded not guilty
f) Final order : acquitted
g) Date of such order : March 17, 2023
BRIEF STATEMENT OF THE REASONS FOR DECISION : -
1. Vide this judgment, this Court shall dispose off complaint for offence punishable under Section 138 of The Negotiable Instruments Act, 1881 filed by the Naju Devi Vs. Pankaj Aggarwal 1 of 17 Rahul Digitally signed by Rahul Jain Date: 2023.03.17 Jain 15:09:18 +0530 complainant Smt. Naju Devi against accused namely Sh. Pankaj Aggarwal. In gist, it is alleged in complaint that the husband of complainant namely sh. R.K.Meena was a Government Officer in MES department and he was posted at Distt. Agra, U.P. from 2008 to till 2010. The accused was a registered contractor of the MES department and he had visiting terms with the complainant's husband namely Sh.R.K. Meena. The accused also runs a jewelery shop side by side and he was in the need of money. So, the accused took the advantage from the familiar relations with complainant and requested to the complainant's husband for friendly loan. The husband of the complainant accepted his request and provide friendly loan as per the accused's requirement. The accused also approached in the month of May, 2014 and requested to the complainant for the friendly loan and the complainant advanced friendly loan of Rs.40,00,000/- to the accused in installments as per accused's requirement. Thereafter, the accused discharged his liability and issued four cheques bearing No.495820, 495821, 495822 & 495823 of Rs.10,00,000/- each in favour of complainant, all dated 02.06.2015 and notarized written agreements were also executed between accused and the complainant. The accused assured that he will repay the loan amount on or before the due date i.e. 02.06.2015. But in May 2015, the accused assured that he will discharge his liability of friendly loan amount by all means on due date and denied for presenting aforesaid cheques. Thereafter, in the first week of October,2015, the accused contacted the complainant and Naju Devi Vs. Pankaj Aggarwal 2 of 17 Rahul Digitally signed by Rahul Jain Jain Date: 2023.03.17 15:09:28 +0530 felt sorry for his previous acts and urged that he was not in a sound financial condition and submitted that if he had not completed projects then all due payment in discharge of project works will be stuck off by the department. Then, the accused also prayed for another friendly loan of Rs.10,00,000/- for the completion of all project works on that time and gave the assurance again for return off all friendly loan amount whenever get the payment from the projects. Accordingly, the complainant had provided another friendly loan of Rs. 10,00,000/- to accused and in lieu to discharge the liability, the accused issued the cheque in question of Rs.10,00,000/- bearing No. 502137, Ex. CW1/1 dated 29.10.2018 to complainant. When the complainant asked for previous cheques, accused assured for the issuance of fresh cheques. In the first week of October, 2018 when complainant was in the urgent need of money for his daughter's marriage, he contacted the accused and again asked for the repayment of the loan amount but accused refused to repay the friendly loan amount. Thereafter, the complainant presented the cheque in question Ex. CW1/1 of Rs. 10,00,000/- as a part payment of the aforesaid friendly loan amount with his Banker for encashment. However, cheque in question was returned unpaid vide returning memo Ex. CW1/2 on 15.11.2018 with the remarks "Funds Insufficient". Thereafter, the complainant sent a legal notice, Ex. CW1/3 dated 23.11.2018 to the accused through her counsel but the accused did not make the payment of cheque within the stipulated period of 15 days from the date of receipt of the Digitally signed Naju Devi Vs. Pankaj Aggarwal 3 of 17 Rahul by Rahul Jain Date:
2023.03.17 Jain 15:09:33 +0530 legal demand notice. However, the accused replied to the legal notice vide replied notice, Ex. CW1/4 dated 18.12.2018 and denied the facts of the legal notice. Thereafter, the complainant replied to the same by his rejoinder through her counsel, dated 07.01.2019, Ex- CW1/5, hence, this complaint.
PRE-SUMMONING EVIDENCE & NOTICE
2. Pre-summoning evidence was lead by the complainant side and after hearing complainant side, accused was summoned for offence punishable under Section 138 of the Negotiable Instruments Act, 1881. After appearance of accused, it was ensured that copy of complaint has been supplied. Notice was put to the accused for offence punishable under Section 138 of the Negotiable Instruments Act, 1881 on 11.03.2022 to which accused pleaded not guilty and claimed trial. He stated that he had not taken any loan from the complainant. He further stated that he knew the husband of complainant and he had agreement with the husband of the complainant to share the profit arising out of supply of work in MES. The husband of the complainant had taken the cheque in question as the guarantee for that in the year 2010. He admitted receiving the legal notice and had replied to the same. He admitted that he had issued cheque in question and particulars were also filled by him except the date. Thereafter, matter was fixed for complainant's evidence and accused side was granted opportunity to cross- examine the complainant's evidence.
Naju Devi Vs. Pankaj Aggarwal Digitally
signed by 4 of 17
Rahul Rahul Jain
Date:
Jain 2023.03.17
15:09:38
+0530
COMPLAINANT'S POST NOTICE EVIDENCE
3. The complainant examined herself as CW-1, adopted affidavit of pre- summoning as her evidence reiterating almost all facts of complaint, stating all exhibits available on record. She deposed that the accused used to visit her home frequently and that is why she knew the accused. She further deposed that in October, 2015, she gave Rs. 10 lacs to the accused in Janakpuri and in May 2014, she earlier given Rs. 40 lacs in cash to the accused. She further deposed that she had arranged the money from the savings which she kept for marriage of her daughter and the same was kept out of savings from income earned from diary, agriculture, rental income, etc . Further, she had given Rs. 40 lacs to the accused in four installments arranging some part of Rs.40 lacs kept in her home as cash and some amount brought from the village but she did not remember how much amount was kept at home and how much amount had been arranged from village. She also deposed that at that time, her husband was employed in MES but she did not remember the salary of her husband. She stated that there was no written agreement for the loan amount of Rs.40 lacs. The accused had given the four cheques i.e. Rs. 10 lacs each for the amount of Rs.40 lacs and those four cheques were still with her but she had not presented those four cheques till date and not filed any civil case for the recovery of that loan of Rs.40 lacs. She further deposed that the accused demanded Rs. 10 lacs for one year after demonetization in cash but no agreement was Naju Devi Vs. Pankaj Aggarwal Digitally signed 5 of 17 Rahul by Rahul Jain Date:
Jain 2023.03.17
15:09:44 +0530
executed and only cheque was taken from the accused. The accused had not returned Rs.40 lacs which was given earlier till then but she voluntarily said that the accused told at the time of taking Rs. 10 lacs that he will return the total loan amount together at the time of marriage of her daughter. She also deposed that she had not filed any police complaint for the recovery of the total amount of Rs.50 lacs. She further deposed that the accused had taken loan of Rs.10 lacs for his personal needs and she did not know the exact purpose. The cheque in question was handed over at complainant's home in Janakpuri with duly filled cheque in the presence of her family include her husband and children. She deposed that she does not file ITR and she is housewife. She was challenged on her financial capacity on which she deposed that she also receives rental income in cash of around Rs.1 lac to Rs.2 lacs per month. She denied all the other suggestions put to her.
4. Complainant closed his CE vide order dated 20.05.2022 and thereafter, matter was fixed for recording statement of accused. STATEMENT OF ACCUSED
5. The statement of accused was recorded under Section 313 Cr.P.C of the Code of Criminal Procedure, 1973 read with Section 281 of The Code of Criminal Procedure, 1973 separately on 20.05.2022. Incriminating evidence was put to him. He stated that he had not taken any loan from the complainant. He had issued cheque to the Naju Devi Vs. Pankaj Aggarwal 6 of 17 Rahul Digitally signed by Rahul Jain Date: 2023.03.17 Jain 15:09:50 +0530 husband of the complainant duly filled except the date as guarantee. The complainant has misused his cheque. He do not owe any liability of the cheque amount towards the complainant. He admitted receiving the legal notice and had also replied to the same.
6. The accused stepped into witness box and examined himself as DW-1. He reiterated that he had given the cheque in question to Sh R.K. Meena who is the husband of the complainant in 2010 as security for the profits and commission which were received from MES. He further stated that he had no relations with the complainant and he had never any financial transactions with the complainant. He used to visit the husband of the complainant due to work of the department and he knew the complainant and her husband since 2008. He had given one cheque to the complainant. Complainant's husband got transferred in the end of the year 2010 or beginning of 2011. He denied the suggestion that husband of the complainant had transfered from MES Agra in 2010 and after that he used to go to the house of complainant. He did not remember whether he had borrowed Rs. 40 lacs from the complainant or handed over 04 cheque of Rs. 10 lacs each dated 02.06.2015. He further voluntarily said that he had returned every amount that he had borrowed. He denied the suggestion that he had not issued the cheque in 2010 as RBI had issued guidelines to withdraw the non-CTS cheques by the end of July 2013 and thereby implying that CTS cheques were issued Naju Devi Vs. Pankaj Aggarwal Rahul Digitally signed by Rahul Jain 7 of 17 Date: 2023.03.17 Jain 15:09:56 +0530 only after 2010 and non- CTS were issued in 2010 and the present cheque is CTS cheque and he denied all the suggestions put to him.
Defence evidence was closed and matter was fixed for argument vide order dated 21.11.2022
7. Final Arguments were heard on behalf of the both the parties on 23.12.2022. Case file perused.
POINTS FOR DETERMINATION : -
8.1 Whether the complainant has been able to establish ingredients of offence punishable under Section 138 of The Negotiable Instruments Act, 1881 beyond shadow of reasonable doubt against the accused or not?
8.2 Final order.
APPRECIATION OF FACTS/CONTENTIONS/ANALYSIS & FINDINGS
9. 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 cheques(s) was/were presented to the bank within a period of six months or within period of its/their validity.Digitally signed
Naju Devi Vs. Pankaj Aggarwal Rahul by Rahul Jain Date: 8 of 17 Jain 2023.03.17 15:10:11 +0530
(c) The cheque(s) so presented for encashment was/were dishonored.
(d) The payee/complainant of the cheque(s) issued a Legal Demand Notice within 30 days from the receipt of information from the bank regarding dishonourment 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/UNCONTROVERTED FACTS
10. At the outset, it is pertinent to mention herein that it is not in dispute that cheque in question belong to the accused, it bears his signatures, it was drawn on an account maintained by the accused with a bank, cheque in question was dishonored as alleged, legal demand notice was sent to correct address of accused and accused failed to make the payment of cheque in question till date. 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. The accused even admitted that he had received the legal notice. CONTENTIONS QUA CONSIDERATION 11.1(a) The contentions which have been raised by defence are that the accused had not taken any loan from the complainant and the cheque in question was given to the Naju Devi Vs. Pankaj Aggarwal Rahul Digitally signed by Rahul Jain Date: 2023.03.17 9 of 17 Jain 15:10:18 +0530 husband of the complainant for some other purpose. It is the contention of defence that accused side has been able to rebut the presumption of consideration available in favour of the complainant as consideration qua cheques in question. It is contended that accused should be acquitted in this matter.
11.1(b) On the other hand, it is the contention of the complainant side that the accused had taken friendly loan of Rs. 10,00,000/- in cash and issued the cheque in question. Legal demand notice was issued and received by accused side, hence, all ingredients of commission of offence punishable under Section 138 of The Negotiable Instruments Act, 1881 stands established on record, therefore, accused should be held guilty in this matter.
11.2 Submissions of both side considered.
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 Digitally signed Naju Devi Vs. Pankaj Aggarwal Rahul by Rahul Jain 10 of 17 Date: 2023.03.17 Jain 15:10:23 +0530 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 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."
Digitally signed by Naju Devi Vs. Pankaj Aggarwal Rahul Rahul Jain Date: 11 of 17 Jain 2023.03.17 15:10:28 +0530 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 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 Naju Devi Vs. Pankaj Aggarwal 12 of 17 Rahul Digitally signed by Rahul Jain Date: 2023.03.17 Jain 15:10:33 +0530 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 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 Naju Devi Vs. Pankaj Aggarwal 13 of 17 Digitally signed Rahul by Rahul Jain Date: Jain 2023.03.17 15:10:38 +0530 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."
11.3 So, precisely there is initial presumption of legally enforceable debt or liability against the accused side, but same is rebutable. 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.
11.4 The defence of the accused side considered in view of above-cited case laws. It is the case of the complainant herself that she had earlier advanced Rs. 40 lacs to the accused which have not been returned by the accused. She had also admitted that she had not filed any civil suit for recovery for the loan of Rs. 40 lacs. Further she had deposed that the accused had given 04 cheques of Rs. 10 lacs each for earlier loan of Rs. 40 lacs. It is highly improbable that a person would further advance Rs. 10 lacs even though the borrower has not returned the earlier huge amount of Rs. 40,00,00/-. Digitally signed
Naju Devi Vs. Pankaj Aggarwal 14 of 17
Rahul by Rahul Jain
Date:
2023.03.17
Jain 15:10:44
+0530
Secondly, the complainant didn't even know what was the requirement of the loan but she deposed in her cross-examination that the present loan was given for personal needs of the accused while in her evidence affidavit, she had stated that the present loan was required for completion of project works. She had alleged in her evidence affidavit that earlier the loan of Rs. 40 lacs was also given to boost the accused's business where the accused was working as a contractor in MES and had sanctioned 2-3 projects as a contractor and required huge sum of money for completion of afore-said projects. This is substantial contradiction as earlier she had stated that loan was needed for commercial purpose while in her cross-examination, she deposed that the present loan was given for his personal needs.
Thirdly, the accused has taken a consistent stand that he had given cheque in question to the complainant in 2010 as security for the profit and commission which were to be received from MES. The complainant put a suggestion to the accused that the present cheque was a CTS cheque to disprove the fact that the cheque could have been given in 2010 as the complainant implied that only non-CTS could have been given in 2010. During the final arguments, counsel for the accused pointed out that the present cheque was indeed non-CTS cheque. Perusal of the same reveals that the cheque in question is in fact a non-CTS cheque.
Digitally signed
Naju Devi Vs. Pankaj Aggarwal Rahul by Rahul Jain
Date: 15 of 17
2023.03.17
Jain 15:10:50
+0530
From the above facts, the accused discharged the burden of preponderance of probabilities to rebut the presumption u/s 139 of NI Act. It was now incumbent upon the complainant to prove her case beyond reasonable doubt which she failed to do so.
The complainant has not produced any written document to prove the alleged loan. She had deposed in her evidence affidavit that duly notarised agreements were also executed for the earlier loan of Rs. 40,00,000/-. The complainant did not produce the same but rather contradicted herself and deposed in her cross-examination that there was no written agreement for the loan amount of Rs. 40 lacs. It is highly doubtful that further loan would be given without any written agreement when earlier loan were allegedly given after execution of duly notarised agreements when in fact the borrower hadn't even returned the earlier loan.
Secondly, the complainant did not produce any witness who could corroborate the loan transaction and issuing of the cheque in question when she deposed in her cross examination that her family including her husband and children were present at the time of granting of loan and issuing of cheque. FINAL CONCLUSION
12. It stands established on record in the form of evidence of the complainant given vide affidavit (which can be read in evidence at all stages as per judgment of "Rajesh Agarwal Vs. State & Anr." 171 (2010) DELHI LAW TIMES 5), documents Digitally signed by Naju Devi Vs. Pankaj Aggarwal Rahul Rahul Jain Date: 16 of 17 Jain 2023.03.17 15:10:58 +0530 exhibited in evidence, admission(s) of accused during notice/accusations explained to him and statement of accused recorded under Section 313 of The Code of Criminal Procedure, 1973 read with Section 281 of The Code of Criminal Procedure, 1973 that accused did not issue the cheque in question Ex. CW1/1 for discharge of his liability as the legal enforceable debt remains unproved.
FINAL ORDER
13. In view of the aforementioned facts and circumstances, this Court is of the conclusion that complainant has not been able to duly prove its case under Section 138 of The Negotiable Instruments Act, 1881 beyond shadow of any reasonable doubt. Accordingly, accused namely Sh. Pankaj Aggarwal stands acquitted for offence punishable under Section 138 of The Negotiable Instruments Act, 1881 qua three cheques in question in the present complaint. Digitally signed by Announced in the open Court Rahul Rahul Jain Date:
on March 17, 2023. Jain 2023.03.17
15:11:05
+0530
(RAHUL JAIN)
MM (NI) ACT-04,
DWARKA COURTS
NEW DELHI/17.03.2023
Naju Devi Vs. Pankaj Aggarwal 17 of 17