Delhi District Court
Monika vs Reena on 18 December, 2023
IN THE COURT OF MS. MANYA, M.M. (N.I. ACT) DIGITAL COURT-02, CENTRAL
DISTRICT, TIS HAZARI COURTS, NEW DELHI
C.C. No. 2711/2021
PS : Subzi Mandi
Smt. Monika
W/o Deepak Karot,
R/o H. No.197, Gali Bashesharnath,
Katra Nanak Chand, Sabzi Mandi,
Ghantaghar, Delhi - 110007 .............Complainant
Versus
Smt. Reena
W/o Sushil,
R/o H. No. 2807, First Floor,
Gali Rajputana, Near Pyare Lal Jewellers,
Sabzi Mandi, Ghantaghar, Delhi-110007 ................. Accused
Date of Institution : 01.04.2021
Offence complained of : Section 138 NI Act
Plea of the Accused : Not Guilty
Date of decision : 18-12-2023
Decision : Acquitted
JUDGMENT:
1. Vide this judgment, this Court shall dispose off the present complaint case instituted by the Complainant invoking the provisions of Section 138 of the Negotiable Instruments Act, 1881(as in after referred to as NI Act).
2. The factual matrix giving rise to the instant complaint case, as per the complainant, may be enumerated as hereafter: That complainant had good friendly relations with accused since many years on the basis of which she gave a loan of Rs. 2,50,000/- to the accused as the accused asked for such money from the complainant on the ground of financial crunch. The said loan of Rs. 2,50,000/- was given to the accused for personal use in May 2020 for six months. The complainant gave this loan to the accused after arranging the same from her Digitally signed by MANYA MANYA Date:
2023.12.18 17:00:52 +1000 CC NO.2711/21 Monika Vs. Reena Page 1/11 friends and relatives. After six months, the complainant asked the accused to return the money and the accused thereafter gave some cash and the cheque in question to her. When the complainant presented the said cheque with her banker i.e. UCO Bank, Sabzi Mandi, Delhi - 110007, the above said cheque were returned unpaid with remarks "Payment Stopped by Drawer" vide return memo dated 03.03.2021. The complainant thereafter issued a legal demand notice dated 03.03.2021 through her counsel, calling upon the accused in compliance with the statutory provisions of Section 138 of the NI Act. The accused was duly served via speedpost at her residence. However, despite the knowledge of the legal demand notice, the accused failed to make the payment of the above mentioned dishonoured cheque amount. Hence, the present complaint u/s 138 NI Act was instituted.
3. The complaint was filed within limitation on 01.04.2021 pursuant to which summons were issued against the accused on 31.07.2021 and consequently, the accused entered appearance on 11.10.2021. Notice u/s 251, Code of Criminal Procedure, 1973 (herein after referred to as Cr.P.C.) was framed against the accused on 12.01.2022 to which the accused pleaded not guilty and claimed trial. Thereafter, the matter was listed for evidence.
4. After the framing of notice, the complainant led evidence by examining herself as CW-1, wherein she adopted her pre-summoning evidence. In order to prove her case, the Complainant had relied upon the following documents:-
a) Cheque bearing no. 930114 dated 16.01.2021 amounting to Rs. 1,50,000/-
Ex.CW1/1,
b) Return memo dated 03.03.2021 Ex.CW1/2,
c) Legal demand notice dated 03.03.2021 Ex.CW1/3,
d) Postal Receipt and delivery receipt Ex.CW1/4 and Ex.CW1/5 respectively, and,
e) Reply to Legal demand notice dated 09.03.2021 Ex.CW1/6.
The complainant was cross examined at length by the Ld. Counsel for accused. CE was closed vide order dated 27.09.2022 and the matter was listed for statement of the accused u/s 313 Cr.P.C.
5. Statement of the accused was recorded u/s 313 Cr.P.C. r/w Section 281 Cr.P.C on Digitally signed by MANYA MANYA Date:
2023.12.18 17:00:57 +1000 CC NO.2711/21 Monika Vs. Reena Page 2/11 12.12.2022 wherein all the incriminating circumstances appearing in evidence against the accused were put to her. The accused chose to lead evidence in her defence, and the matter was fixed for defence evidence.
6. In her defence evidence, the accused examined three witnesses including himself i.e. the accused as DW-1, DW-2 Sh. Sushil Kumar and DW-3 ASI Harish Kumar and they were duly cross-examined by ld. Counsel for complainant. The defence evidence was closed on 29.11.2023 and the matter was fixed for final arguments.
7. Thereafter, the Ld. Counsels for the complainant and the accused were heard at length in the present case and the matter was reserved for judgment.
8. The submissions of both the parties have been heard and the entire evidence led by the parties and the material available on record has been thoroughly perused.
9. During the course of final arguments, Ld. Counsel for complainant argued that there exists legally enforceable liability in favour of the complainant on behalf of the accused and the same has been admitted by accused. He further argued that the cheque in question (Ex.CW1/1) was issued to the complainant and the signature has already been admitted by the accused. He further argued that upon presentation the cheque has been dishonored and the same has been proved by the cheque return memo which is Ex.CW1/2. Further, he argued that legal demand notice (Ex.CW-1/3) was duly served upon the accused. He further argued that the complainant did not receive any payment even after sending the legal demand notice to the accused. Ld. Counsel for complainant submitted that all the ingredients of Section 138 NI Act are fulfilled and the accused should be convicted.
10. Per contra, ld. Counsel for accused argued that the complainant fails to prove the liabilities of the accused towards her. Ld. counsel for the accused argued that the accused had lost her cheque book with blank signed cheques including the cheque in question. She further argued that the accused duly replied to the same through her counsel. She further argued that the essential ingredient of Section 138 NI Act are not satisfied in order to constitute a valid complaint as there was no existing legally enforceable liability of the accused towards the complainant. She prayed that the accused be acquitted of the offence.
11. Before proceeding to the merits of the case, it is pertinent to lay down the basic provision of Digitally signed by MANYA MANYA Date:
2023.12.18 17:01:06 +1000 CC NO.2711/21 Monika Vs. Reena Page 3/11 law with respect to section 138 of the NI Act which is as follows: Section 138 of Negotiable Instruments Act, 1881 makes dishonour of cheques an offence. It provides that "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".
12. In order to ascertain whether the accused has committed an offence u/s 138 NI Act, the following ingredients constituting the offence must be proved:
(a) 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.
(b) 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.
(c) 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 mandatory that all the above mentioned ingredients must be satisfied that the person who has drawn the cheque can be set to have committed an offence u/s 138 NI Act.
13. Further, it is a well settled principle of criminal jurisprudence that a criminal trial precedes on the presumption of innocence of the accused i.e. an accused is presumed to be innocent unless proved guilty. Thus, in the regular course, the initial burden is on the complainant/ prosecution to prove the guilt of the accused and the standard of proof for the same is beyond reasonable doubt. However, in offences under Section 138 NI Act, thereDigitally is a reverse signed by MANYA MANYA Date:
2023.12.18 17:01:12 +1000 CC NO.2711/21 Monika Vs. Reena Page 4/11 onus clause, which is contained in Sections 118 and 139 of the Act. It is pertinent to reproduce Sec.118 of the Indian Evidence Act, 1872 and Sec.139 of the N.I. Act here.
Section 118 of the N.I Act provides :
"Presumptions as to negotiable instruments: Until the contrary is proved, the following presumptions 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, indorsed, negotiated or transferred for consideration;"
Section 139 of the N.I Act further provides as follows:
"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".
14. Further, in the case of K.N. Beena Vs. Muniyappan AIR 2001 SC 2000, it was established by the Hon'ble Supreme Court of India as follows:
"In complaint u/s 138 the court has to presume that the cheque had been issued for a debt or liability, this presumption is rebuttable, however, the burden of proving that the cheque has not been issued for the discharge of debt or liability lies on the accused".
15. In the present case, the accused has admitted in her defence u/s 251 Cr.P.C. that the cheque in question bears her signature. Since the accused has admitted her signatures along with the fact that the cheque belongs to her, the statutory and mandatory presumption u/s 118 Indian Evidence Act and Section 139 NI Act is raised in favour of the complainant. Once the foundational facts that the cheque in question bears the signatures of the accused and the same has been drawn on account maintained by him are established, a factual base is established to invoke the presumption of cheque having being issued in discharge of a legally recoverable debt and drawn for good consideration by virtue of Section 118(a) r/w Section 139 of NI Act. It is a mandatory presumption, though the accused is entitled to rebut the said presumption. Reference can be made to Judgment of Apex Court in Rangappa v.
Digitally signed by MANYA MANYA Date:
2023.12.18 17:01:17 +1000 CC NO.2711/21 Monika Vs. Reena Page 5/11 Mohan, AIR 2010 SC 1898, wherein it was held:
"Once the cheque relates to the account of the accused and he accepts and admits the signatures on the said cheque, then initial presumption as contemplated under Section 139 of the Negotiable Instruments Act has to be raised by the Court in favour of the complainant."
16. The Hon'ble Supreme Court in Krishna Janardhan Bhat Vs. Dattatraya G. Hegde, (2008) 4 SCC 54 again reiterated that whereas prosecution must prove the guilt of an accused beyond all reasonable doubt, the standard of proof so as to prove a defence on the part of an accused is "preponderance of probabilities". In paragraph No.34, following was laid down:-
"34. Furthermore, whereas prosecution must prove the guilt of an accused beyond all reasonable doubt, the standard of proof so as to prove a defence on the part of an 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."
17. The Hon'ble Supreme Court of India in Basalingappa Vs. Mudibasappa (2019) 5 SCC summarized the principles regarding the statutory presumption under Section 118(a) r/w 139 NI Act:-
"..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 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.
25.3 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.
25.4 That it is not necessary for the accused to come in the witness box in support of Digitally signed by MANYA MANYA Date:
2023.12.18 17:01:22 +1000 CC NO.2711/21 Monika Vs. Reena Page 6/11 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."
18. In the light of the above discussion, it can be said that in the present case, the onus is upon the accused to rebut the presumption raised under Sections 118(a) and 139 of the said Act and merely saying that the cheque in question was not given in discharge of the liability that the complainant avers is not sufficient to rebut the presumption of law.
19. The accused stated in her plea of defence in notice u/s 251 Cr.P.C. that this is a false case filed against her by the complainant as she does not know the complainant. The accused stated that although the cheque bears her signature, she had not filled the particulars of the cheque in question. Further, the accused had consistently taken a plea that her cheque book was lost on 15.01.2020 and she had also filed a complaint against the complainant. During her statement recorded u/s 313 Cr.P.C. r/w s 281 Cr.P.C. the accused stated that she never had any monetary transaction with the complainant and that her cheque has been misused by the complainant. The accused also stated that she had lost her cheque book with blank signed cheques for which she had also filed an NCR dated 15.01.2020 the record of which was later produced by DW-3 ASI Harish Kumar, No. 355, PS Crime Branch along with Certificate u/s 65-B Indian Evidence Act, 1872 Ex.DW3/1.
20. The accused DW-1 in her examination-in-chief had deposed that she got an NCR registered bearing LR No. 53586/2020 dated 15.01.2020 and a copy of the same was filed as Mark A. She further deposed that she had also replied to the legal demand notice on 09.03.2021 and thereafter filed a complaint with SHO PS Subzi Mandi against the complainant for stealing and misusing her cheque. The original copy of the said complaint was filed by the accused Ex.DW1/1. Further, the accused clearly denied taking any loan from the complainant. Consistent facts were deposed by DW-2 Sh. Sushil Kumar, i.e., the husband of the accused. No discrepancies were found whatsoever in the deposition of DW-1 and DW-2.
21. At this stage, this Court is inclined to discuss the documents filed by DW-1 and DW-3. DW-3 produced the record of NCR registered bearing LR No. 53586/2020 dated 15.01.2020 Digitally signed by MANYA MANYA Date:
2023.12.18 17:01:27 +1000 CC NO.2711/21 Monika Vs. Reena Page 7/11 by the accused along with certificate u/s 65B Indian Evidence Act, 1872 Ex.DW3/1. Perusal of the same shows that the particular NCR was registered on 15.01.2020 i.e., on the day the accused avers to have lost her blank signed cheque book. Further, "Any other details" as provided by the accused at the timing of registering the NCR are filled as follows:
"I have lost my SBI cheque book serial no. 930104 to 930117 in my name."
It is pertinent to mention that the cheque in question i.e., cheque bearing no. 930114 drawn on SBI belonging to Reena, has cheque number which is one of the cheque numbers that was complained to be lost by the accused as per the record of NCR Ex.DW3/1, which corroborates the plea taken by accused throughout her defence.
22. The complainant is required to prove his case beyond reasonable doubt against the accused, whereas, the accused is only required to prove his defence on the basis of preponderance of probabilities. The probable defence taken by the accused may be proved either during the cross-examination of the complainant or by adducing his own evidence towards defence evidence.
23. The Hon'ble High Court of Delhi in the case of V.S. Yadav Vs. Reena, 172 (2010) DLT 561 has held that "there is no presumption of law that the explanation given by the accused was truthful." It was further held that the offence u/s 138 of the NI Act is a technical offence and the complainant is only supposed to prove that the cheques issued by the accused were dishonoured, the complainant's statement that the cheques were issued against the liability or debt is sufficient proof of the debt or liability and the onus shifts to the accused to show the circumstances, against which the cheques came to be issued and this can be proved by the accused only by way of evidence and not by leading no evidence.
24. Merely by denial or merely by creation of doubt, the accused cannot be said to have rebutted the presumption as envisaged under Section 139A NI Act. The reference can be made to the judgment of Hon'ble Supreme Court of India "P. Rasiya Vs Abdul Nazer and Anr. CrA no.1233-1235 of 2022".
"7...As per Section 139 of the N.I. Act, 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 discharge, in whole or in part, of any debt or other liability. Therefore, Digitally signed by MANYA MANYA Date:
2023.12.18 17:01:31 +1000 CC NO.2711/21 Monika Vs. Reena Page 8/11 once the initial burden is discharged by the Complainant that the cheque was issued by the accused and the signature and the issuance of the cheque is not disputed by the accused, in that case, the onus will shift upon the accused to prove the contrary that the cheque was not for any debt or other liability. The presumption under Section 139 of the N.I. Act is a statutory presumption and thereafter, once it is presumed that the cheque is issued in whole or in part of any debt or other liability which is in favour of the Complainant/holder of the cheque, in that case, it is for the accused to prove the contrary".
25. As discussed above, it can be said that accused in the present case has succeeded in raising a reasonable doubt that the cheque in question belongs to the accused which was duly signed by her, however, the same was never given to the complainant in discharge of any legally enforceable liability as the cheque in question was lost by the accused which was duly corroborated by NCR Ex.DW3/1. Further, defence of the accused is further strengthened by the fact that the cheque in question was dishonoured for the reason "Payment Stopped by Drawer" which requires a step further by a person to instruct their bank to stop payment.
26. Ld. Counsel for the complainant while cross examining DW-1 and DW-2 had constantly asked as to why no further action was taken against the complaint after knowledge of misuse of the cheque of the accused by the complainant. He further impressed upon the fact that neither the accused filed any application u/s 156(3) Cr.P.C. against the complainant nor any complaint was filed u/s 200 Cr.P.C. against the complainant by the accused. Accused DW-1 had filed original complaint dated 16.03.2021 Mark A to SHO PS Subzi Mandi regarding misuse of her lost cheque by the complainant, right after receiving legal demand notice dated 03.03.2021 from the complainant.
27. This Court is of the opinion that complainant had constantly raised the question of no legal steps being taken by the accused after receiving the knowledge of misuse of her cheque as averred by her, however the same holds no merit as it is the discretion of the party whether to take legal action against someone or not. This Court is inclined to believe that a complaint dated 16.03.2021 Mark A was indeed registered by the accused as the same is consistent with the facts and circumstances of the case. Digitally signed by MANYA MANYA Date:
2023.12.18 17:01:36 +1000 CC NO.2711/21 Monika Vs. Reena Page 9/11
28. Further, it is pertinent to mention that case of the complainant is not supported by any documentary evidence or witnesses. The same was argued by Ld. Counsel for accused wherein it was contended that complainant CW-1 in her cross examination had mentioned that she arranged money from her friends and family to be given to the accused, however, no such witnesses were called for cross-examination. She further submitted that CW-1 had stated during her cross examination that some amount of the alleged loan was given from the money savings she received after her divorce.
29. A reasonable person is expected to act with caution, more so when the transaction relates to monetary things. This Court is of the considered view that no prudent person with reasonable intelligence would pay the amount to the estimate mentioned above after arranging funds from friends and family as well using up money received after divorce to be given to a friend's friend which was stated during her cross examination by CW-1. Further, this Court is in agreement with the submissions of Ld. Counsel for accused that no witnesses were produced by the complainant to prover her case, in the presence of the same as averred by the complainant herself. This Court is not inclined to believe the version of the complainant.
30. Ld. Counsel for complainant further called for copy of bank statement of husband of the accused Mark A wherein he contended that the financial condition of the accused was not good and emphasised on the same stating that the reason for which the accused borrowed money from the complainant was for financial difficulties. In the facts and circumstances discussed above, this Court is of the opinion that the submissions herein stands immaterial.
31. Lastly, Ld. Counsel for complainant submitted that vide order dated 12.01.2022, accused had submitted that the cheque in question was given by her to complainant as a security cheque. However, on perusal of the order dated 12.01.2022, it shows that notice u/s 251 Cr.P.C. was framed on that day. Perusal of the notice showed that no such plea was taken by the accused. It was later clarified by the stenographer that a format order was inadvertently typed in the order sheet. It hereby stands corrected.
32. For the reason indicated above, the accused person can be said to have succeeded in rebutting the presumption of law in favour of complainant on the basis of preponderance of Digitally signed by MANYA MANYA Date:
2023.12.18 17:01:41 +1000 CC NO.2711/21 Monika Vs. Reena Page 10/11 probabilities. Thus, in view of the totality of the circumstance and the settled legal positions as discussed above, the case attempted to be built by the complainant, appears to be suffering from fatal infirmities so much so, it goes directly to the root of the case and shakes the very edifice on which the case of the complainant rests. Further, the accused has succeeded in raising a reasonable doubt that there was no legally enforceable liability of the accused existing towards the complainant.
33. In view of the evidence adduced, documents put forth and arguments advanced by the parties and further in view of the above discussion, the Court is of the considered opinion that the accused person namely Smt. Reena is acquitted for offence under Section 138 of Negotiable Instruments Act.
34. Copy of this Judgment be emailed to both the parties as well as given dasti to the acquit free of cost as per rules.
Digitally
signed by
MANYA
MANYA Date:
ANNOUNCED IN THE OPEN COURT 2023.12.18
17:01:45
AS WELL AS THROUGH +1000
VC PROCEEDINGS (MANYA)
ON 18.12.2023 MM (NI ACT) DIGITAL
COURT-02/CENTRAL/THC
NEW DELHI
CC NO.2711/21 Monika Vs. Reena Page 11/11