Delhi District Court
Shekhawat Ali vs Sanjeev Kumar on 13 March, 2020
IN THE COURT IF MS. SHILPI SINGH METROPOLITAN MAGISTRATE
(SOUTH) 04 N.I. ACT, SAKET COURTS: NEW DELHI
CT No. 471458/2016
Shekhawat Ali vs Sanjeev Kumar
1. Complaint Case number : 471458/2016
2. Name of the complainant: : Sakhawat Ali,
S/o Sh. Shokin Shah,
R/o House No.206, BlockA, JJ
Camp Tigri, New Delhi110062.
3. Name and address of the accused : Sh. Sanjeev Kumar,
S/o Sh. Umesh Prasadsah,
R/o 24 Jagdamba Colony,
Ali Vihar, Sarita Vihar,
New Delhi110076.
4. Offence complained of or proved : Under Section 138 of the
Negotiable Instruments Act,
1881.
5. Plea of the accused : Pleaded not guilty and
stated that the cheque in
question was given by way of
security.
6. Final Order: : Convicted
7. Date of institution : 24.04.2014
8. Date when reserved for judgment : 15.01.2020
9. Date of judgment : 13.03.2020
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BRIEF FACTS FOR THE DECISION OF THE CASE
1) The present case under section 138 Negotiable Instruments Act, 1881 (hereinafter referred to as NI Act), arises out of a complaint alleging inter alia, that the accused was known to the complainant through a relative and the accused requested the complainant to advance a personal loan of Rs. 3,00,000/ for a period of 12 months for development of business and investment in shop. On account of the relation that the complainant had with the accused and considering the request of the accused, the complainant advanced him a loan of Rs. 3,00,000/ which was to be repaid by the accused on or before November 2013. When the complainant demanded the accused to return the loan, the accused in order to discharge his legal liability, issued cheques bearing no. 000025 dated 20.10.2013, 000027 dated 23.10.2013 and 000028 dated 24.10.2013 for a sum of Rs. 1,00,000/ each, drawn on Kotak Mahindra Bank, NFC, New Delhi65, Ex CW 1/2 (colly), (hereinafter referred to as 'Cheques in question'). The same on presentment by the complainant, were returned by the bank with endorsement "Out Dated" for cheque bearing no. 000025 and 'Funds Insufficient' for cheque bearing no. 000027 and 000028, vide return memo dated 22.01.2014, Ex CW1/1 (colly). Constrained, the complainant sent a legal notice dated 14.03.2014, Ex CW1/3, demanding the total cheque amount of Rs. 3,00,000/. When the accused failed to make the payment within the statutory period, the complainant filed the present complaint.
2) On the accused entering an appearance, he was admitted to bail. Thereafter, at the request of the parties, the matter was sent to the mediation center and it was received back as settled. However, the accused did not make the payment as per CC No.471458/2016 Sekhawat Ali Vs. Sanjeev Kumar 2 of 10 the terms of settlement and the matter was preceded with trial. Notice u/s 251, Code of Criminal Procedure, 1973 (hereinafter referred to as CrPC), was framed against the accused on 05.04.2017 qua all three cheques, to which he pleaded not guilty. In his plea of defence recorded in the above stated notice, the accused admitted the issuance and signature on the cheques in question; however as per the accused the cheques in question were issued to the complainant in lieu of the amount borrowed from him. He further admitted the receipt of legal notice and submitted that he replied to the same. It was the defence of the accused that he has already made the entire payment towards the cheques in question.
3) The accused did not take the steps to cross examine the complainant despite several opportunities being granted to him and thereafter, on 15.07.2017, the right of the accused to conduct the cross examination of the complainant was closed.
4) In the statement of accused recorded u/s 313 CrPC and in his deposition as DW1, the accused deposed that the cheques in question were issued to the complainant by way of security when he had advanced a sum of Rs. 3,80,000/ to him. He further submitted that the said amount was repaid by him in cash and through account; and Rs. 1,50,000/ was paid by his father vide cheque bearing no. 439195 dated 29.01.2014, issued in favour of the complainant. He also admits the receipt of legal notice and submits that the cheques in question were misused by the complainant.
5) During the cross examination of DW1, it is elucidated that the accused received the legal demand notice and that he replied to the same through email, which is Mark X. In the said reply dated 04.03.2014 he admits receiving the loan CC No.471458/2016 Sekhawat Ali Vs. Sanjeev Kumar 3 of 10 but disputes the amount that is asked by the complainant and states that more than Rs. 4,75,000/ have already been paid by him. The accused further admits during his cross examination that he had never filed any complaint against the complainant for presenting the cheques in question when allegedly, he has already made the payment, due to the friendly relations subsisting between the parties. He further denies having any liability towards the complainant.
6) Law regarding the ingredient of offence punishable u/s 138 NI Act is well settled. Section 138 of the Act was enacted with an object to improve the credibility of transactions by the negotiable instruments and to facilitate the bank transactions in a smooth manner. It is experienced that recourse of criminal trial is preferred to civil trial as it does not require to pay court fees and it is quicker. However, the section is penal with severe consequences and therefore the section warrants a strict construction on the proof of the facts. If at all the ingredients under section 138 are proved by the complainant then presumption under section 139 of the Act stands in his favour. Section 139 reads as under:
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".
7) The words that "unless contrary is proved" though are used in the section, the degree of the proof is not expected to be beyond reasonable doubt or it does not call for strict proof of the facts. For the purpose of rebuttal of the presumption, the standard of proof of the facts is required by applying the rule of preponderance of probabilities. When it is said a fact is proved it means that it is legally and judicially believed by the Court and presumption is an additional support given to CC No.471458/2016 Sekhawat Ali Vs. Sanjeev Kumar 4 of 10 such acceptance. The presumption under section 139 is a similar provision like section 118 of the Negotiable Instruments Act. Further, under section 118(a) of the Negotiable Instruments Act, the court is obliged to presume, until the contrary is proved, that the cheque was drawn for consideration. It is also a settled position that the initial burden in this regard lies on the defendant to prove the nonexistence of consideration by bringing on record such facts and circumstances which would lead the Court to believe the nonexistence of the consideration either by direct evidence or by preponderance of probabilities showing that the existence of consideration was improbable, doubtful or illegal.
8) In light of the above stated law, there can be no doubt that there is an initial presumption which favours the complainant. 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 accused cannot be expected to discharge an unduly high standard of proof. 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 CC No.471458/2016 Sekhawat Ali Vs. Sanjeev Kumar 5 of 10 accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. 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.
9) On the backdrop of this ratio, the evidence tendered by both the parties and the facts are to be assessed.
10) The counsel for the complainant had vociferously argued that all the ingredients under section 138 NI Act are fulfilled and thus, the presumption arises in his favour. The Counsel further submitted that the accused admitted his liability and the fact, that the case was settled before the mediation center, proves that the accused was liable to make the payment. He further deposed that since the presumption is not rebutted by the accused, hence the accused is liable to be punished u/s 138 NI Act.
11) Per contra, the counsel for the accused argued that the cheques in question were security cheques and an agreement was also executed between the parties, however the complainant has deliberately not placed the agreement on record. He further submitted that the accused is not liable to make the payments as he has already repaid the loan amount through account.
12) File perused. Arguments heard.
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13) Certain admitted position in this case are:
a. Issuance and signature on the cheque in question is not disputed by the accused and his only contention is that the cheques in question were issued by way of security.
b. Demand notice issued against the accused was duly served upon him and he also accepts the receipt of the same. However, he chose to reply by email wherein he admits the receipt of loan amount but disputes the liability on the ground that the payment is already made.
c. No document is placed on record to prove that the payments were actually made by the accused.
14) Considering the above admitted position, only one issue arises for consideration in this case "Whether the cheque in question was issued in discharge of a legally enforceable debt."
15) In the present case, the issuance of cheque is not in dispute and neither is the accused denying the receipt of loan. It is not the law at all that in a prosecution under Section 138 of the Negotiable Instruments Act, the complainant must establish the original cause of action in meticulous details. That is precisely why the presumption under Section 139 of the Negotiable Instruments Act has been incorporated in addition to the presumption under Section 118 of the Evidence Act which was already there. Once the signature, execution and handing over of the cheque is satisfactorily proved by the evidence by the complainant, presumption under Section 139 of the N.I. Act comes into play and the same holds the field until the accused discharges the burden on him at least by the inferior standard of preponderance of possibilities and probabilities as applicable in a civil case.
CC No.471458/2016Sekhawat Ali Vs. Sanjeev Kumar 7 of 10 16) Now the defence of the accused is that he is not liable to pay the cheque
amount as he has already made the entire payment in cash and through cheque. The accused wanted to bring on record his account statement in order to prove that the payments were actually made to the complainant. The right of the accused to lead DE was closed, yet considering the fact that the defence as put forth by the accused is relevant, his application u/s 311 CrPC was allowed on 25.09.2019. The accused stepped into the witness box and had also placed on record his account statement, but the said document was never exhibited in chief. Since the said document was never exhibited nor relied upon by the accused during DE, the said document cannot be read into evidence.
17) Further, the accused has not explained as to why the security cheques were not taken back from the complainant when the payments were made by him. Also, the reason for dishonor in this case is,"funds insufficient". The accused himself admits that he did not inform his bank to stop the payment and neither did he file any complaint against the complainant when the security cheques were not returned by him. The accused, in fact chose not to file any complaint against the complainant even after the filing of the present case. The conduct of the accused reflects that he was aware about the entire situation yet he willingly chose not to act upon it. The only reason can be that the accused was actually liable to make the payments and hence he chose not to take any action against the complainant. The defence taken by the accused is that due to the friendly relations subsisting between the parties, he chose not to take any action. This defence is not probabalized even on the touchstone of probability and is completely vague, sham and nothing but a cock and bull story.
CC No.471458/2016Sekhawat Ali Vs. Sanjeev Kumar 8 of 10 18) Moreover, in the present case, notice u/s 251 CrPC is framed against the
accused qua all three cheques in question, however the cheque bearing no. 000025 was outdated when it was presented. The accused has admitted the issuance and signature on all three cheques and; even the counsel for the accused never objected that the cheque bearing no. 000025 is outdated and that the complaint is not maintainable qua the said cheque. Though, the legal notice was sent w.r.t all three cheques and the amount that is asked by the complainant is Rs. 3,00,000/ but since the legal notice specifically mentions the details regarding all three cheques, hence, in such circumstances, the complainant is not entitled to claim the amount qua cheque bearing no. 000025.
19) In view of the above discussion, I have no hesitation in holding that the defence as advanced by the accused is a sham defence and the accused has failed to point out any improbability in the case of the complainant. In my opinion, the accused has not succeeded in rebutting the presumption of legal liability even on the scale of preponderance of probabilities. The accused has in fact, by his admission of friendly relations with complainant, and that of having availed a loan from the complainant, further strengthened the case of the complainant, and explains away, the absence of any documentary proof evidencing the advancement of the loan in question. Thus, the complainant has, with the aid of, inter alia, evidence led, admissions in his favour, and the presumption of legal liability under Section 118 read with Section 139 of the NI Act, in his favour, successfully proved the basic ingredients of the offence under Section 139 NI Act.
20) Resultantly, the accused SANJEEV KUMAR, stands convicted for the offence under Section 138 NI Act for cheques bearing no. 000027 and 000028.
Let the convict be heard separately on the quantum of sentence.
CC No.471458/2016Sekhawat Ali Vs. Sanjeev Kumar 9 of 10 Let the copy of the Judgment be supplied to the accused, free of cost.
(Shilpi Singh)
MM04/ NI Act, Saket Courts,
South/ New Delhi/13.03.2020
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