Delhi District Court
In Matter Of "Krishna Janardhan Bhat vs . Dattatraya G. Hegde" (2008) 4 on 29 August, 2019
IN THE COURT OF PARAS DALAL,
M.M. - 04 (N. I. ACT), SOUTH-EAST,
DISTRICT COURT SAKET, NEW DELHI.
Anil Kumar ...................Complainant
Versus
C. Mukesh ....................Accused
PS - Lajpat Nagar
Under Section 138 of N. I. Act, 1881.
a) Sl. No. of the case : CT 630193/2016
b) Alleged date of commission of offence :08.01.2016 Approximately
c) Name of the complainant : Anil Kumar
S/o Late Sh. Biri Singh
R/o H.No.260-A/12, Amritpuri B,
Garhi, East of Kailash,
New Delhi-110065.
d) Name of the accused person(s) : C. Mukesh
S/o Sh. B. Chinnappan
R/o H.No.399, Block-B,
J.J. Colony, Indepuri,
Near Kartik Mandir, I.AR.I.,
New Delhi-110012
e) Offence complained of : Under Section 138 of N. I. Act,1881
f) Plea of accused persons : Pleaded not guilty
g) Final order : Acquitted
h) Date of such order : August 29, 2019
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
complainant Anil Kumar against the accused person namely C. Mukesh. The complainant
states that the accused approached him for a friendly loan of Rupees Four Lakhs which he
advanced to him in March 2015. For repaying the said amount, the accused handed over a
post dated cheque Ex.CW1/A which was returned vide return memo Ex.CW1/B, following
which a legal demand notice Ex.CW1/C was issued and the same was delivered on the
accused on 23.12.2015.
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PRE-SUMMONING EVIDENCE & NOTICE
2. Pre-summoning evidence was led by the complainant side and after hearing
complainant side, accused person 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 accused wherein accused admitted that
cheques in question belong to him, however, the accused submitted that he had actually
availed a loan of Rs.20,000/- from the complainant for starting a small eatery business and
against the same had given two blank security cheque to the complainant. The accused
defended that he had returned the said amount and even after his asking, the present cheque
and the other cheque was not returned. Considering the plea of defence at the notice stage and
oral submission, the accused was given an opportunity to cross examine the complainant. The
complainant adopted his evidence by way of affidavit wherein he reiterated that he advanced
a friendly loan of Rupees Four Lakhs to the complainant in March 2015 and against which a
post dated cheque was given by the accused at the time of handing over the cheque. During
the cross examination, the complainant however submitted that the cheque was handed over
to him in November 2015. The complainant further answered that he files ITR of Rupees Four
to Five Lakhs and the present transaction in question was disclosed in the ITR for the
financial year 2015-16 The complainant also answered that he had given a loan of Rs. One
Lakh to one other person. When asked about his liabilities and financial capacity, the
complainant answered that he has a family of five and he was earning Rs. 45,000/- to
Rs.50,000, apart from which his mother has a rental income of Rs.50,000/- . The complainant
examined none other witness and closed his CE on 10.02.2017.
3. The incriminating evidence were put to the accused and his statement under section
313 CrPC r/w 281 CrPC was recorded on 27.03.2017 and he reiterated his entire defence
taken in the notice stage. The accused did prefer to lead any defence evidence and stepped in
the witness box in his defence. The accused although filed an evidence by way of affidavit,
Anil Kumar v. C. Mukesh 2 of 10
however the same not allowed by the law, the accused was called in witness box. The
evidence by way of affidavit was not allowed to be tendered though it is placed on record. In
his examination in chief the accused reiterated his stand that he had taken a loan of
Rs.20,000/- and two blank signed cheques were handed over to the complainant. The said
amount was repaid however, the complainant did not return the cheque even after being
asked. The accused was cross examined as to the alleged transaction of Rs.20,000/- and he
denied the suggestion that the same was false. The accused however, was not cross examined
as to the facts surrounding the alleged loan of Rupees Four Lakhs or about the handing over
of the cheque in March 2015 or November 2015. The accused during his cross examination
admitted his signature on the cheque, but reiterated that rest of the particulars were not in his
handwriting. The accused closed his DE on 10.07.2019
4. Final arguments from both sides heard on 13.08.2019. Records perused.
POINTS FOR DETERMINATION
5.1 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?
5.2 Final order.
APPRECIATION OF FACTS/CONTENTIONS/ANALYSIS & FINDINGS
6. 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.
(c) The cheque(s) so presented for encashment was/were dishonored.
Anil Kumar v. C. Mukesh 3 of 10
(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
7. At the outset, it is pertinent to mention herein that it is not in dispute that
cheques in question belongs to the accused, they were drawn on account maintained by
accused, cheques in question were dishonored on presentation as alleged, legal demand notice
in question was sent to accused vide postal receipts available on record and payment has not
been made within the statutory period and till date, therefore, there is no need for discussions
on said aspects/points/issues. Also the receipt of the legal demand notice Ex.CW1/C has been
admitted by the accused during his cross examination.
CONTENTIONS QUA CONSIDERATION
8.1(a) The defence of the accused is that he does not owe any liability towards the
complainant, therefore, case of the complainant side be rejected. The accused has taken a
consistent stand that the present cheque in question was handed over to complainant
alongwith one other cheque as security for the loan of Rs.20,000/- taken by the accused from
the complainant for starting his eatery business.. It is submitted by the accused that he never
took any loan from the present complainant and the cheque was misused by the. The accused
has sought support from his defence evidence as well as consistent stand to the notice under
Section 251 CrPC and his statement under section 313 r/w 281 CrPC.
Anil Kumar v. C. Mukesh 4 of 10
8.1(b) On the other hand, it is the contention of complainant side that accused issued
cheques in question to the complainant for discharge of outstanding legally enforceable debt
and liability, therefore, accused should be held guilty in this matter.
8.2 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 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."
Anil Kumar v. C. Mukesh 5 of 10
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 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 three
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 Anil Kumar v. C. Mukesh 6 of 10 test of proportionality should guide the construction and interpretation of reverse onus clauses and the defendant-accused cannot be expected to discharge an unduly high standard or proof."
"28. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of "preponderance of probabilities". Therefore, if the accused is able to raise a probable defence which creates doubt about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own."
8.3 So, precisely there is initial presumption of legally enforceable debt or liability against the accused side, but same is rebuttable. The standard of proof for rebuttal is preponderance of probabilities. Accused side can lead evidence in defence, even can rely on materials submitted by complainant and can rely upon circumstances also to show non- existence of consideration or it being improbable and need not adduce evidence of his own for the same.
8.4 The defence of the accused side considered in view of above-cited case laws. As far as question qua liability of the accused towards complainant is concerned, it is the case of defence that the present cheque was never issued to the present complainant towards any liability of friendly loan of Rupees Four Lakhs. There is substance in the argument of the accused. Firstly the consistent stand taken by the accused throughout the entire trial. The accused has relied on the inconsistency in the testimony of the complainant as well as unnatural and incoherent deposition. The complainant in his evidence by way of affidavit have never disclosed any date of advancing of the alleged amount and same was agreed to be returned within a stipulated period which is quite vague. Complainant further deposed that the present cheque in question was handed over to him when the amount was allegedly given to the accused, which he himself controverted during his cross examination by saying that the cheque was handed over in November 2015. Naturally a person advancing any amount as loan will be certain about these three dates i.e. date of advancement, date of handing over of the cheque as well as date of return, however if the testimony of the complainant is seen, there is no date of any of the three.
Anil Kumar v. C. Mukesh 7 of 10 8.5 The complainant next deposed about his financial capacity, however, no
documentary evidence was shown to prove the same. The complainant stated that the present transaction was disclosed by him in his ITR for the financial year 2015-16, however even then there is no documentary proof to corroborate his testimony. Moreover, there is another reason to disbelief this version of the complainant and also to insist on proof of the ITRs, as the alleged loan was advanced in March 2015 and therefore the said transaction should have been filed on ITRs for financial year 2014-15 and not 2015-16.
8.6 Another reason to disbelief the version of the complainant is that he stated that he had friendly relations with the accused and he himself stated his address of a JJ Colony. It is quite unnatural to believe that the complainant would advance a loan of Rupees Four Lakhs to a person without verifying his financial capacity to repay, his assets, or securing the return with a documentary proof. The accused on the other hand has taken a consistent stand the had availed a loan of Rs.20,000/- from the complainant which he had returned, but the present cheque alongwith another security cheque was not returned. The accused stepped in the witness box and not even a single question or suggestion was put to the accused by the complainant side surrounding the present transaction in question of advancement of a friendly loan of rupees four lakhs. Both the opposite versions are entirely based on oral testimonies and neither side has produced any documentary proof, however, it is true that the cheque was given post-dated security cheque. Even if the version of the complainant is admitted that the same given in March 2015 or November 2015, in both circumstances it becomes a post-dated security cheque. The law with regard to post-dated security cheque is clear that the same will attract the provisions of Section 138 Negotiable Instrument Act, provided the complainant is able to prove that as on the date of cheque the amount as alleged is actual debt due. The same has not been established by the complainant by any documentary proof. The ITRs were not filed and even there is incoherence and inconsistencies in the testimony of the complainant. This is enough to tilt scales of balance of probabilities in favour of the accused owing to his Anil Kumar v. C. Mukesh 8 of 10 consistent stand and deposition that only Rs.20,000/- was availed which in view of his financial capacity sounds more logical and natural.
8.7 The onus thus shifts on the complainant and the rebuttable presumption of law under section 139 N.I. Act thus vanishes. The complainant has now to prove the case beyond reasonable doubt. The complainant has not stated any specific date of advancement of friednly loan to the accused. Moreover, it is unnatural that a person will advance a loan of four lakh without any documentary proof. It is also unnatural that complainant will advance a friendly loan, without knowing the capacity of the accused, securing his repayment or without fixing an exact date of repayment. This fortifies the defence version that no such alleged amount was advanced.
8.8 In a more recent judgment passed on 09.04.2019 by a Division Bench of the Hon'ble Supreme Court in Basalingappa v. Mudibasapp, Criminal Appeal no.636 of 2019 it was held that when the accused proves a probable defence, the reverse onus of proof shifts the burden on the complainant who is bound to explain his financial capacity and the transaction of loan advanced. Applying the above test in the present case, the complainant has not pleaded even a single fact surrounding the transaction of loan advanced. Neither any documentary evidence was produced, nor any evidence was led to show that the amount of Rs. 4,00,000/- (Rupees Four Lakh only) was lend by the complainant to the accused. Moreover, the act of complainant of lending money without any proof, does not adduce confidence of this Court. The complainant has thus failed to prove his case beyond reasonable doubt.
FINAL CONCLUSION
9. 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 exhibited in evidence, admission of accused during accusations explained to him and statement of accused Anil Kumar v. C. Mukesh 9 of 10 recorded under Section 313 of The Code of Criminal Procedure, 1973 read with Section 281 of The Code of Criminal Procedure, 1973 that accused never received any amount as loan from the complainant as alleged. The complainant has not been able to prove that the cheque in question was for discharge of legally enforceable liability as on the date of the cheque and hence the foremost ingredients of offence punishable under Section 138 of The Negotiable Instruments Act, 1881 is not established.
FINAL ORDER
10. 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 C. Mukesh stands acquitted for offence punishable under Section 138 of The Negotiable Instruments Act, 1881 qua cheque in question in the present complaint.
PARAS Digitally signed
by PARAS DALAL
Announced in the open Court Date: 2019.08.30
on August 29, 2019.
DALAL 15:15:53 +0530
(PARAS DALAL)
M.M.(N.I.Act)-04/South-East,
Saket/New Delhi/29.08.2019
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