Delhi District Court
Giriraj vs Pankaj on 10 February, 2025
IN THE COURT OF SH. AVIRAL SHUKLA
JUDICIAL MAGISTRATE FIRST CLASS (N.I. ACT-03) SOUTH-
WEST: DWARKA COURTS: NEW DELHI
CNR No.DLSW02-012724-2016
Ct. Case No. 5004976/2016
U/s.138 N.I. Act.
Giri Raj Vs. Pankaj
Date of Institution of case: 04.10.2016
Date of which Judgment reserved: 13.01.2025
Date on which judgment pronounced: 10.02.2025
JUDGMENT
1) Unique ID no. of the case : DLSW02- 001919-2015
2) Name of complainant : Giriraj S/o Sh. Lakhpat Kashyap, R/O B-3/1, Block-B, Qutub Vihar, Phase-2, Goyla Dairy, Hanuman Chowk, New Delhi.
3) Name and address of accused : Pankaj
S/o Sh. Sohan Lal,
R/o B-41, Qutub Vihar,
Phase-II, B-Block, Gali
No. 3, Goyala Dairy,
New Delhi
CC No.5004976/2016 Giriraj Vs. Pankaj 1/14
4) Offence complained of : Section 138 N.I. Act
5) Plea of accused : Accused pleaded not
guilty and claimed trial
6) Final Order : Acquitted for the offence
punishable U/s.138 N.I.
Act.
7) Date of order : 10.02.2025
BRIEF STATEMENT OF REASONS FOR THE DECISION
1. The present complaint has been filed under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter "NI Act") by Giriraj S/o Sh. Lakhpat Kashyap (hereinafter "complainant") against the accused Pankaj S/o Sh. Sohan Singh (hereinafter "accused").
Brief Facts
2. The complainant and the accused are stated to have been known to each other and having friendly relations since many years. In the first week of April, 2016, the accused, his father and brother all induced the complainant that they have seen a particular plot measuring 50 Sq. Yds in Goyala Dairy, the owner of which is ready to sell his plot on cheap rates. The accused and his family told the complainant that the owner of the plot is demanding Rs.14,00,000/- as the cost of the plot and the complainant had to pay half of the consideration amount i.e. Rs.7,00,000/- for his share of 25 Sq. Yds.
3. It is stated that the accused, his father and brother took a sum of CC No.5004976/2016 Giriraj Vs. Pankaj 2/14 Rs.2,50,000/- from the complainant in cash for the purpose of giving bayana/earnest money to the owner. The accused and his family encouraged the complainant to purchase the plot. Hence, the complainant contacted his father on phone and requested to arrange more money for the purpose of paying the remainder amount of Rs.4,50,000/-. The father of the complainant arranged Rs.5,00,000/- by borrowing the same from someone @3% interest.
4. It is stated that the accused told the complainant to open a new bank account with Corporation Bank, Chhawla and the same was opened by the complainant in the presence of the accused on 02.05.2016. The accused became guarantor of the complainant at the time of opening of the bank account. On 05.05.2016, the complainant deposited the aforesaid amount of Rs.5,00,000/- in his account in Corporation Bank and on the same day itself, the accused withdrew an amount of Rs.4,50,000/- from the account of the complainant.
5. It is further stated that the accused failed to execute the documents of the said plot with the actual owner in favour of the complainant and the complainant asked the accused as well as his father and brother to return his money. It is stated that all of them started avoiding the complainant by making one or the other excuse and after great persuasion the accused, in discharge of his part liability, issued a post dated cheque bearing No. 317547 dated 31.05.2016 for a sum of Rs.5,00,000/- drawn on Corporation Bank, Chhawla, New Delhi. The accused assured the complainant that the aforesaid cheque shall be honoured upon presentation.
CC No.5004976/2016 Giriraj Vs. Pankaj 3/14
6. It is stated that upon the assurance of the accused the cheque bearing No. 317547 was presented by the complainant with the Punjab National Bank, Goyala Khurd, New Delhi for encashment but was returned dishonoured with remarks 'Funds Insufficient' vide return memo dated 15.07.2016. It is stated that when the accused was informed about the dishonour, the accused and his family promised to pay the cheque amount as soon as possible but failed in paying the same.
7. Accordingly, a legal notice dated 13.08.2016 was sent to the accused via speed post. Despite of the legal notice, the accused did not make any payment of the cheque and the complainant has thus instituted the present proceedings u/s 138 of NI Act.
Proceedings before the Court
8. Cognizance of the complaint was taken by this Court and the accused was summoned vide order dated 03.11.2016. Notice u/s 251 Cr.P.C was served upon the accused by the Court on 15.05.2019 to which the accused pleaded not guilty and claimed trial. The case was listed for the complainant's evidence thereafter. During the complainant's evidence, the following oral and documentary evidence was led by the complainant against the accused to prove his case beyond reasonable doubts-
Oral Evidence
CW-1 Testimony of complainant
Documentary Evidence
Ex.CW1/1 Cheque in question
Ex.CW1/2 Cheque Return Memos
Ex.CW1/3 Legal Demand Notice
CC No.5004976/2016 Giriraj Vs. Pankaj 4/14
Ex.CW1/4 Original Postal Receipt
Ex.CW1/5 Tracking report
9. Thereafter, upon the conclusion of complainant's evidence, the statement of the accused was recorded U/s 313 Cr.P.C on 31.07.2023 in which all incriminating material was put to the accused. The accused was also asked to personally explain the circumstances appearing in evidence against him. The accused stated before the court that he had gone alone to the complainant with respect to purchase of the plot of 50 Sq. Yds. He stated that he has no knowledge regarding payment of Rs.5,00,000/- by father of the complainant to the complainant. He admitted to the opening of account by the complainant but clarified that a cheque of Rs.4,50,000/- was issued by the complainant from the new account, using which he withdrew the amount.
10. He further stated in his examination U/s 313 Cr.P.C that he did not ignore the complainant after receiving the amount of Rs.4,50,000/- from the complainant. He stated that he gave the photocopy of ownership of the previous owner of the plot to the complainant. He stated that the cheque in question was filled up by him except for the date. He denied the liability towards the cheque in question and stated that the deal was cancelled due to fault of the complainant as he did not make the full payment.
11. The accused stated before the court that he wishes to lead defence evidence in the matter. The accused examined himself before the court as DW-1 and stated that he invested in the property business together with the complainant. He stated that he alongwith the complainant had purchased a CC No.5004976/2016 Giriraj Vs. Pankaj 5/14 piece of land as joint investment for the total consideration amount of Rs.13,70,000/-. He stated that the complainant had paid only an amount of Rs.4,50,000/- and did not make the remainder payment of Rs.1,85,000/-. DW-1 stated that he had asked the complainant to make the payment as the seller was demanding his amount. However, the deal got broken owing to non payment on the part of the complainant.
12. DW-1 stated that the cheque in question was given as a security to the complainant without any particulars mentioned therein except signatures. The cheque in question was handed over to the complainant with the condition that if the said plot is sold at a higher price, they will distribute the share of profit as well as his principle amount. DW-1 stated that the deal was broken and the payment got forfeited by the proposed sealer. He stated that he has no liability to pay any amount to the complainant as he did not receive any amount from the seller.
13. DW-1 was duly cross examined by Ld. counsel for the complainant.
Final Arguments
14. Thereafter, detailed final arguments were heard by the Court. Ld. Counsel for the complainant had vehemently argued that in accordance with the notice U/s 251 Cr.P.C framed against the accused, the accused has already admitted his signatures and contents of the cheque except for the date. Ld. Counsel has argued that testimony of the complainant is consistent with the material available on record. It has been argued that the parties had agreed to settle the matter before the Mediation Center and a CC No.5004976/2016 Giriraj Vs. Pankaj 6/14 settlement agreement was also arrived at. It has been submitted that despite of the settlement between the parties, the accused failed to make any payment to the complainant except for a payment of Rs.1,00,000/-. Ld. Counsel has thus prayed that the accused be convicted of the offence.
15. On the contrary, Ld. Counsel for the accused has argued that the complainant has failed to prove his case beyond reasonable doubts. It has been argued that there is no proof available on record which may show that the complainant paid a cash amount of Rs.2,50,000/- to the accused. It is further argued that there is no evidence whatsoever which may corroborate that the father of the complainant borrowed an amount of Rs.5,00,000/- for the purpose of helping the complainant. Ld. Counsel has thus prayed that the complaint be dismissed and the accused be acquitted.
Court Observations
16. The accused has been charged with commission of an offence involving dishonor of a cheque that has been defined and made punishable u/s 138 of NI Act. The bare text of Section 138 of NI Act is being provided hereunder for ease of reference-
"where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both".
CC No.5004976/2016 Giriraj Vs. Pankaj 7/14
17. Hence, in order to ascertain whether the accused has committed an offence u/s 138 NI Act, the following ingredients constituting the offence have to be necessarily proved:
(i) The drawer of the cheque should have issued the cheque for the discharge, in whole or in part, of a legally enforceable debt or other liability.
(ii) The cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank.
(iii) The drawer of such cheque fails to make the payment of the said amount of money within fifteen days of the receipt of the notice from the payee or the holder in due course demanding the payment of the said amount of money.
It is only when all the above-mentioned ingredients are satisfied that the person who has drawn the cheque can be said to have committed an offence u/s 138 NI Act.
18. The Negotiable Instruments Act, 1881 also provides for certain presumptions which must be taken into account while adjudicating any complaint U/s 138 of the Act. The presumptions are provided under Sections 118 and 139 of the Act which are reproduced herein below. Section 118 (a) of the NI Act provides that:
"until the contrary is proved, it shall be presumed that "that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration."
Further, Section 139 of the NI Act lays down that:
"it shall be presumed, unless the contrary is proved, that the holder CC No.5004976/2016 Giriraj Vs. Pankaj 8/14 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."
19. The combined effect of Section 118(a), NI Act and Section 139, NI Act is that a presumption exists that the cheque was drawn for consideration and given by the accused for the discharge of debt or other liability. In Hiten P. Dalal v. Bratindranath Banerjee, (2001) 6 SCC 16, Hon'ble Judges of the Hon'ble Supreme Court of India observed as follows:
"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, as noted in State of Madras vs. A. Vaidyanatha Iyer AIR 1958 SC 61, 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."
20. In this regard, the Hon'ble Supreme Court of India, having analysed all the relevant provisions in Basalingappa v. Mudibasappa, (2019) 5 SCC 418 : 2019 SCC OnLine SC 491 at page 432, came down with the following conclusions:
"25. We having noticed the ratio laid down by this Court in the above cases on Section 118(a) and 139, we now summarise the principles enumerated by this Court in the following manner:
25.1. 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.
25.2. The presumption under Section 139 is a rebuttable CC No.5004976/2016 Giriraj Vs. Pankaj 9/14 presumption and the onus is on the accused to raise probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
25.3. To rebut the presumption, it is open for the accused to rely on evidence led by him or the 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. 25.4. 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.
25.5. It is not necessary for the accused to come in the witness box to support his defence."
21. In the present case, the primary allegation of the complainant relate to the dishonor of cheque bearing No. 317547 dated 31.05.2016 that was allegedly issued by the accused. The cheque bearing No. 0317547 dated 31.05.2016 has been placed on record as Ex.CW1/1 and the cheque dishonour memo dated 15.07.2016 has been placed on record as Ex.CW1/2. The return memo clearly reflects that the cheque was dishonored on account of the reason: "Funds Insufficient".
22. At the outset, it is the case of the complainant that a total consideration amount of Rs.14,00,000/- was fixed for the purpose of purchase of a plot of land jointly by the complainant and the accused. It has been stated that a cash amount of Rs.2,50,000/- was paid by the complainant in cash to the accused. Further, an amount of Rs.4,50,000/- was withdrawn by the accused from the account of the complainant. After repeated requests of the complainant, the accused agreed to issue the cheque in question in discharge of his part liability.
23. The original complaint filed before the court clearly mentions that CC No.5004976/2016 Giriraj Vs. Pankaj 10/14 the accused and the complainant agreed to purchase the plot for a total consideration of Rs.14,00,000/- out of which, both the parties, were required to pay Rs.7,00,000/- each. However, when the complainant/CW1 was cross examined on 11.05.2023, he clearly denied the factum of a joint investment by stating: "It was not the joint investment. It is wrong to suggest that it was not the joint investment as mentioned in the complaint I was just ready for purchasing this plot measuring 25 sq. yard for my brother Laxman". Hence, the complainant has prima facie contradicted the version provided in the complaint regarding the joint investment.
24. It is further noted that there is no proof forthcoming in evidence regarding payment of cash amount of Rs.2,50,000/- by the complainant to the accused. No documentary evidence or testimony of any independent witness has been led in the case for proving the cash payment. Infact, when the complainant/CW1 was cross examined by Ld. Counsel for accused, he simply stated: "I do not remember when the cash amount of Rs.2,50,000/- was handed over to the accused. I did not even received any receipt of amount of Rs.2,50,000/-." (sic.) Subsequently, in the cross examination, the complainant attempted to clarify the absence of any proof of payment by stating that there was no witness to the cash transaction of Rs.2,50,000/-.
25. For the remaining consideration amount of Rs.4,50,000/-, it has been stated by the complainant that he requested his father to arrange for the said sum. As per the complainant, his father arranged for an amount of Rs.5,00,000/- by way of loan from a third person. The father of the complainant has not been arrayed as a witness and no independent testimony of any other witness has been led in this regard. When the CC No.5004976/2016 Giriraj Vs. Pankaj 11/14 complainant/CW1 was cross examined on this aspect, he admitted that he did not cite his father as a witness in the case.
26. Lastly, it is the case of the complainant that the accused withdrew the amount of Rs.4,50,000/- from his bank account i.e., the bank account maintained with Corporation Bank, Chhawla Branch. It is stated that the accused was able to withdraw the aforesaid amount being a 'guarantor' of the account. It is beyond comprehension as to how any guarantor can possibly withdraw any amount from another person's bank account without any instruction or authorization.
27. Rather, when the complainant/CW1 was cross examined on this aspect, he changed his version and stated that he had handed over Rs.4,50,000/- to the accused through a bank transaction. The complainant/CW1 could not explain why the amount of Rs.4,50,000/ was given by way of a bank transfer. Hence, there are patent contradictions in the version of the complainant regarding the mode of payment of Rs.4,50,000/- to the accused.
28. At this stage, this Court is constrained to note that there are substantial inconsistencies and contradictions in the version of the complainant regarding the nature of transactions undertaken between the parties and also regarding the mode of alleged payments made by the complainant to the accused. As can be noted above, the complainant has been unable to duly substantiate, corroborate or prove the factum of joint investment or the mode of payment of amounts to the accused.
CC No.5004976/2016 Giriraj Vs. Pankaj 12/14
29. At this stage, it is pertinent to note that the primary defence taken by the accused is that the cheque in question was given as a security cheque. The accused has stated before the Court that the proposed seller of the plot had infact committed fraud and given fake documents. The same defence was taken by the accused at the stage of recording of statement U/s 313 Cr.P.C. The accused had further added that he does not have any liability towards the cheque in question as the deal was cancelled due to the fault of the complainant as the complainant did not make the full payment.
30. Perusal of the testimony of the complainant/CW-1 itself reveals that the complainant failed to remember the name of the owner to whom the plot belonged. He failed to remember whether the particular plot was to be purchased from one 'Nitish Kumar'. There is no other material available on record which may remotely reveal the details of the proposed deal. In such circumstances, the defence taken by the accused appears to be probable in nature on the scale of preponderance of probabilities. The natural benefit of the same must accrue in favour of the accused.
31. Accordingly, upon due appreciation of the oral and documentary evidence available on record, this Court is of the considered view that the complainant has failed in establishing his case beyond reasonable doubt for the purpose of proving that the accused had issued the cheque in question in discharge of his legally enforceable liability. The evidence led by the complainant does not support the version provided in the evidence by way of affidavit i.e. Ex.CW-1 and is replete with contradictions and inconsistencies. The defence taken by the accused accordingly appears to be probable in the circumstances of the case and from the material CC No.5004976/2016 Giriraj Vs. Pankaj 13/14 available on record.
32. The complaint filed by the complainant is accordingly dismissed and the accused Pankaj S/o Sh. Sohan Singh is hereby acquitted of the offence U/s 138 of the Negotiable Instrument Act, 1881.
33. Let bail bonds and surety bonds be furnished U/s 437A Cr.P.C.
34. File be consigned to record room after due compliance.
Digitally signedAVIRAL by AVIRAL SHUKLA Pronounced in the open court SHUKLA Date: 2025.02.10 17:31:16 +0530 on 10.02.2025 (AVIRAL SHUKLA) JMFC (NI Act-03), Dwarka Courts, New Delhi (South West) 10.02.2025.
CC No.5004976/2016 Giriraj Vs. Pankaj 14/14