Delhi District Court
Meena vs . Norman Arun George on 24 August, 2022
IN THE COURT OF SH. ABHINAV PANDEY:
METROPOLITAN MAGISTRATE- 04,
SHAHDARA DISTRICT, KARKARDOOMA COURTS :
DELHI
CIS no. 12383/16
Meena vs. Norman Arun George
1. Complaint Case number :
CIS No. 12383/16
2 Name of the complainant : Meena
w/o Satpal Sharma
R/o 366, First Floor, Block
8A, Mayur Kunj, Trilok Puri,
Delhi-91.
3. Name and address of the : Norman Arun George r/o 5
accused Block 8-A, Mayur Kunj,
Trilokpuri, Delhi-91.
Also at 125, Block -8-A,
Mayur Kunj, Trilokpuri,
Delhi-91.
4. Offence complained of or : Under Section 138 of the
proved Negotiable Instruments Act,
1881.
5. Plea of the accused : Pleaded not guilty and
claimed trial.
6. Final Order : Acquittal
CIS No. 12383/16, Meena vs. Norman Arun George
Page 1 to 30
7. Date of Institution : 27.06.2016
8. Date of Reserving the : 23.07.2022
Judgment
9. Date of pronouncement : 24.08.2022. (pronouncement
of judgment was delayed on
account of undersigned being
infected with Covid-19)
JUDGMENT
I. Brief factual background 1.1 It is the case of the complainant that accused was having friendly relations and visiting terms with the husband of the complainant. It is further stated that in the first week of February 2013, accused requested the complainant to give him a friendly loan of Rs. 6,30,000/-, for his urgent need, and the accused assured the complainant to return the aforesaid loan within 3 years. On assurance of accused, the complainant allegedly gave afore-stated loan to the accused on 15.02.2013. In discharge of his liability, accused is alleged to have issued a cheque bearing no. 972174 dated 15.02.2016 drawn on State Bank of India, Trilokpuri Branch, amounting to Rs. 6,30,000/- to complainant. (hereinafter referred to as the 'cheque in question') That cheque in question was returned unpaid upon presentation on account of CIS No. 12383/16, Meena vs. Norman Arun George Page 2 to 30 reason "funds insufficient" vide return memo dated 05.05.2016. Thereafter, the complainant contacted the accused and apprised the fact of dishonour of cheque. The complainant then allegedly sent a legal notice dated 07.05.2016 to the accused but to no avail. It is further alleged that the accused failed to pay the cheque amount within the statutory period and hence, the present complaint under Section 138 of Negotiable Instruments Act, 1881 (hereinafter referred to as 'NI Act') was filed by the complainant against the accused.
1.2 Upon service of summons, the accused entered an appearance in the present matter on 13.10.2016 and was admitted to bail. Notice under Section 251 Cr.P.C. was served upon accused on 29.01.2018, to which the accused pleaded not guilty and claimed trial. Thereafter, the accused was allowed to cross- examine the complainant u/s 145 (2) of NI Act. After cross examination of the complainant, matter was fixed for recording statement of the accused under Section 313 Cr.P.C. In the said statement recorded on 08.06.2022, accused has stated that he had given the cheque in question only after signing the same and without filling other particulars to his wife, who had taken a loan of Rs. 50,000/- from the complainant and had repaid it, but she could not take back the cheque and that she expired. It is further stated that he has no legal liability towards the complainant and the cheque in question has been misused by the complainant. He had received the legal demand notice. Accused opted not to lead CIS No. 12383/16, Meena vs. Norman Arun George Page 3 to 30 defence evidence.
2. Evidence 2.1 In order to support his case, complainant had stepped into the witness box as CW-1, and tendered his affidavit Ex. CW1/A into evidence, wherein averments made in the complaint were reiterated. He also relied upon various documents such as Ex.CW1/1 which is the cheque in question, Ex.CW1/2 which is cheque return memo dated 05.05.2016, Ex. CW1/3 which is legal notice dated 07.05.2016, Ex CW1/4 and Ex. CW1/5 which are postal receipts, and Ex. CW1/6 and Ex. CW1/7 which are tracking report and copy of complaint to postal authority Ex. CW1/8. He was cross examined by the defence.
3. Arguments:
3.1 Ld. counsel for the complainant has argued that all the requirements of Section 138 of NI Act have been met with in the present case and, hence, the accused be convicted. On the other hand, it has been argued on behalf of accused that complainant has failed to prove his case beyond reasonable doubt and, hence, the accused is entitled to be acquitted. Written arguments were also submitted on behalf of accused. I have heard the arguments and also gone through the record carefully.
CIS No. 12383/16, Meena vs. Norman Arun George Page 4 to 30
4. Points for determination:
It has been held in K. Bhaskaran vs Sankaran Vaidhyan Balan (1999) 7 SCC 510 that the offence under section 138 of the NI Act can only be completed with the concatenation of a number of acts, required for completing the offence, and accordingly, the following issues need to be determined by this court.
(i) Whether the accused issued the cheque in question to the complainant?
(ii) Whether, the cheque in question was issued by the accused for discharge, in whole or in part, of any debt or other liability?
(iii) Whether the cheque was, on presentation, dishonoured due to reasons specified in Section 138 of Negotiable Instruments Act, 1881 ?
(iv) Whether the complainant has made a demand for payment of the amount of money in the cheque, by giving to the drawer, a notice in writing, within 30 days of the receipt of information by him, from the bank, regarding the return of the cheque as unpaid and the accused has failed to make the payment of the said amount of money to the complainant, within 15 days of the receipt of said notice?
(v) Whether the cheque was presented within the period of its validity, or within 3 months from the date on which it was drawn, CIS No. 12383/16, Meena vs. Norman Arun George Page 5 to 30 and the complaint has been made, within a period of one month from the date when the cause of action has arisen under clause
(c) of the proviso to Section 138 of Negotiable Instruments Act, 1881?
5. BRIEF STATEMENT OF REASONS FOR DECISION:
On the basis of the evidence adduced, this court now proceeds to determine whether all the ingredients of the offence under section 138 NI Act have been satisfied in the present complaint.
5.1 Whether accused issued the cheque in question ?
The onus to prove the same lies upon the complainant and the same has to be proved beyond reasonable doubt, unless the accused admits the same. As per Section 58 of the Indian Evidence Act, "no fact need to be proved in any proceeding which the parties thereto or their agents agree to admit at the hearing, or which, before the hearing, they agree to admit by any writing under their hands, or which by any rule of pleading in force at the time they are deemed to have admitted by their pleadings: provided that the Court may, in its discretion, require the facts admitted to be proved otherwise than by such admissions." In the present case, in his substance of accusation u/s 251 Cr.P.C., the accused has admitted his signatures on the cheque in question and in his statement u/s 313 Cr.P.C the accused has admitted to issuing the cheque in CIS No. 12383/16, Meena vs. Norman Arun George Page 6 to 30 question, and hence, the same is concluded to have been proved.
6 Whether, the cheque in question was issued by the accused for discharge, in whole or in part, of any debt or other liability?
6.1 Onus of proof: Once the issuance of the cheque is established, either by admission or by positive evidence, the presumption under Section 139 of the Negotiable Instruments Act, 1881 arises. Section 139 of the Negotiable Instruments Act, 1881 states that 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. Therefore, here the onus shifts upon the accused to prove the nonexistence of debt or other liability. Section 139 of the Negotiable Instruments Act, 1881 uses the word "shall presume", and the meaning of the word "shall presume" in Section 4 of the Evidence Act, shows that the presumption under Section 139 is rebuttable. 6.2 Standard of proof: the standard of proof required to rebut the presumption under Section 139 is that of "preponderance of probabilities". Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or other liability, the onus shifts back to the complainant to prove by way of evidence,beyond reasonable CIS No. 12383/16, Meena vs. Norman Arun George Page 7 to 30 doubt, that the cheque in question was issued by the accused in discharge, whole or in part, of any debut or other liability, and now the presumptions under Section 118 (a) and Section 139 will not come to the rescue of the complainant. [Bharat Barrel & Drum Manufacture Co. Vs. Amin Chand Pyarelal (1999) 3 SCC 3S and M.S. Narayan Menon Vs. State of Kerala (2006) 6 SCC 39 relied upon].
6.3 Mode of Proof: The accused may adduce direct evidence to prove that the note in question was not supported by consideration, and that there was no debt or liability to be discharged by him. However, the Court need not insist in every case that the accused should prove the nonexistence of the consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that a bare denial of passing of consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable, has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances (including presumption under Section 114 Evidence Act), upon the consideration of which, the Court may either believe that the consideration and debut did not exist, or their nonexistence was CIS No. 12383/16, Meena vs. Norman Arun George Page 8 to 30 so probable that a prudent man would, under circumstances of the case, act upon the plea that they did not exist. [Kishan Rao Vs. Shankaguda, 2018 (8) SCC 165, Mosaraf Hossain Khan Vs. Bhageeratha Engg. Ltd. & Ors (2006) 3 SCC 658, Goa Plast (P) Ltd. Vs. Chico Ursula D Souza (2004) 2 SCC 235, Monaben Ketanbhai Shah Vs. State of Gujarat (2004) 7 SCC 15, Prem Chand Vijay Kumar Vs. Yashpal Singh (2005) 4 SCC 417, DCM Financial Services Vs. J N Sareen (AIR 2008 SC 2255), K. Bhaskaran Vs. Shankaran Vaidhyan Balan (1999) 7 SCC 510 relied upon].
6.4 About security cheques:
In ICD vs. Beena Shabir and Anrs.: 2002(6) SCC 426, the Supreme Court has held that the security cheques also would fall within the purview of the Section 138of the NI Act and a person could not escape his liability merely by stating that the cheque had been given as security. As such, when there is existence of debt on the date of presentation of the cheque and the security cheques issued are dishonoured, the accused would be liable under Section 138 of the NI Act. Similar has been the law laid down by Hon'ble High court of Delhi in Wilson Mathew versus State of NCT of Delhi (Crl.Rev Pet. 188/2015).
CIS No. 12383/16, Meena vs. Norman Arun George Page 9 to 30 6.4.1 In Collage Culture and Ors. vs. Apparel Export Promotion Council: 2007 (99) DRJ 251, a distinction has been drawn between two kinds of cheques, namely, one issued in discharge in presenti but payable in future and the other issued in respect of a debt which comes into existence on the occurrence of a contingent event, and is not in existence on the date of issue of a cheque. The latter cheque, being by way of security cheque, will not be covered under Section 138 of NI Act. In the aforesaid decision, definition of the word 'due' has been given as 'outstanding on the relevant date'.The Court,therefore, held that the debt has to be in existence as a crystallized demand akin to liquidated damages and not a demand which may or may not come into existence. Also, in Suresh Chand Goyal vs. Amit Singhal (Crl.A. 601/2015decided on 14.05.2015) the concept of security cheques were discussed. It was held as follows in the aforesaid case:
"There is no magic in the word "security cheque", such that, the moment the accused claims that the dishonoured cheque (in respect whereof a complaint under Section 138 of the Act is preferred) was given as a "security cheque", the Magistrate would acquit the accused. The expression "security cheque" is not a statutorily defined expression in the NI Act. The NI Act does not per se carve out an exception in respect of a "security cheque" to say that a complaint in respect of such a cheque CIS No. 12383/16, Meena vs. Norman Arun George Page 10 to 30 would not be maintainable. There can be myriad situations in which the cheque issued by the accused may be called as security cheque, or may have been issued byway of a security, i.e. to provide an assurance or comfort to the drawee, that in case of failure of the primary consideration on the due date, or on the happening (or not happening) of a contingency,the security may be enforced. While in some situations, the dishonor of such a cheque may attract the penal provisions contained in Section 138 of the Act, in others it may not."
6.4.2 Relying on the aforesaid dicta, a bench of Hon'ble High Court of Delhi in Credential Leasing & Credits Ltd. vs. Shruti Investments and Anrs.: 2015 (151)DRJ147 held as under:
"Thus, I am of the considered view that there is no merit in the legal submission of the respondent accused that only on account of the fact that the cheque in question was issued as security in respect of a contingent liability, the complaint under Section 138 of the NI Act would not be maintainable. At the same time, I may add that it would need examination on a case to case basis as to whether, on the date of presentation of the dishonoured cheque, the ascertained and crystallized debt or other liability did not exist. The onus to raise a probable defence would lie on the accused, as the law raises a presumption in favour of the holder of the cheque that the dishonoured cheque was issued in respect of a debt or other liability."
CIS No. 12383/16, Meena vs. Norman Arun George Page 11 to 30 6.5 About Loan Agreements and Income Tax Returns in the light of Section 138 of Negotiable Instruments Act.
In Krishan Janardan Bhutt vs. Duttatreya G. Hegde (2008 4 SCC54), Hon'ble Supreme Court held that one of the considerations to be taken into account while examining whether there has been a successful rebuttal of the presumption U/s 139 of the Negotiable Instruments Act is whether an amount of loan/advance alleged to be given by the complainant to the accused, towards discharge of which the dishonored cheque was issued, was given by way of a payee cheque, or by way of cash, in case of an amount being more than Rs. 20,000/. Section 269 (SS) of the Income Tax Act 1961 states that any advance taken by way of loan of more than Rs. 20,000/ has to be made by way of an account payee cheque only, and Section 271 (D) of the Act states that if a person takes or accepts any loan or deposit in contravention of the provisions of Section 269 (SS), he shall be liable to pay way of penalty, a sum equal to the amount of loan deposit, taken or accepted. It was further held in Para No. 29 that Section 138 as three ingredients;
Firstly, there is a legally enforceable debt, Secondly, that cheque was drawn from the account of the bank for discharge, in whole or in part, of any debt or other liability, which presupposes a legally enforceable debt, CIS No. 12383/16, Meena vs. Norman Arun George Page 12 to 30 Thirdly, that the cheque so issued had been returned due to insufficiency of funds, and it was observed that the proviso appended to the said section provides for compliance of legal requirements, before a complaint can be acted upon by a court of law.
6.5.1 It was further held that Section 139 of the Act merely raises a presumption in regard to the second aspect of the matter, and the existence of legally recoverable debt is not a matter of presumption U/s 139 of the Act. It was further observed that the proviso merely raises a presumption in favour of a upholder of a cheque that the same has been issued for discharge of any debt or other liability, and there is no presumption regarding legal enforceability of the same.
6.5.2 However, recently in Uttam Ram Vs. Devinder Singh Hudan (2019 10 SCC 287), Hon'ble Supreme Court observed that without disputing the correctness of the decision in Krishna Janardan case, as it was based on specific facts and circumstances therein, the aforesaid observations of the court in Krishna Janardhan case may not be correct. This incorrectness of approach in Krishna Janardhan case has previously been admitted by Hon'ble Supreme Court in Krishan Rao Vs. Shankar Gowda (2018 8 SCC 165) and Rangappa Vs. Sri Mohan ( 2010 11 SCC 441) as well.
CIS No. 12383/16, Meena vs. Norman Arun George Page 13 to 30 6.5.3 It also needs to be mentioned that in Bir Singh VS. Mukesh Kumar (2019 4 SCC 197) as well. Hon'ble Supreme Court departed from the observations made in Krishan Janardan case, and held that;
"The fact that the appellant/complainant might have been an Income Tax Practitioner, conversant with the knowledge of law, does not make any difference to the law relating to dishonor of a cheque. The fact that the loan has not been advanced by the cheque or demand draft, or that a receipt might have not been obtained, would make no difference. In this context, it would perhaps, not be out of context to note that the fact that the respondent/accused states to have given or signed a blank cheque to the complainant, as claimed by the respondent/accused, shows that initially, there was mutual trust and faith between them. The existence of a fiduciary relationship between the payee of the cheque and its drawer, would not disentitle the payee to the benefit of presumption U/s 139 of the Negotiable Instruments Act, in the absence of exercise of undue influence or coercion.
6.6 In the present case, the complainant admittedly as per the complaint & affidavit Ex. CW1/A made the loan to the accused on 15.02.2013, and the date mentioned on the cheque in question Ex. CW1/1 is 15.02.2016. It is further admitted that the cheque was presented for payment to the bank on 02.05.2016, i.e., after CIS No. 12383/16, Meena vs. Norman Arun George Page 14 to 30 an expiry of more than 3 years from the date on which the loan was made. It is pertinent to note that the accused has denied writing any particulars on the cheque in question apart from putting signatures thereon, in his statement of accusation U/s 251 Cr.PC, as well as in his statement U/s 313 Cr.P.C, and the overwriting on the date in the cheque is clearly visible. It is a settled proposition of law that the accused need not write all the particulars on the cheque, for the offence U/s 138 NI Act to be made out on dishonor; it is sufficient for him to put his signatures on the same, for the presumption unders section 20 read with Section 139 of NI Act to arise, and it would not amount to material alteration within the meaning of Section 87 of the Act, if the complainant fills the remaining particulars thereon, before presenting the same to the bank for encashment. {Bir Singh Vs. Mukesh Mumar (2019 4 SCC 197) and Triyambak S. Hegde Vs. Sripad (2022 1 SCC 742) relied upon}. In these circumstances, since the date on the cheque in question was not required to be filled on the date of allegedly handing over of the cheque by the accused to the complainant, i.e., 15.02.2016, and could have been filled even later on by the complainant, it appears that a period of three years had already elapsed since advance of alleged loan, before the complainant ventured to present the cheque to the concerned bank for encashment. This creates doubt about the legal enforceability of the alleged CIS No. 12383/16, Meena vs. Norman Arun George Page 15 to 30 debt/liability as Article 19 of the Schedule appended to the Limitation Act, 1963, states that the period of limitation for a suit for recovery of money payable for money lent is three years, and such period begins from the time when the loan is made, which, in the present case, is 15.02.2013. This court also now proceeds to examine the provisions of the Indian Contract Act, 1872 and other provisions of the Limitation Act, 1963 in this regard, to consider whether the legal position as aforesaid would be any different in case of postdated cheques. Section 25 of the Contract Act provides certain exceptions when agreements without any consideration are binding. One such exception is Section 25(3) of the Indian Contract Act, 1872, wherein it is considered a valid contract when a person to be charged or his agent, makes a promise to the creditor, in writing, to pay the debt partly or wholly, of which the creditor might have enforced the payment, but the debt has become barred due to the law of limitation of suits. This provision might have worked to the benefit of the complainant to make the debt legally enforceable, only when such promise was made in writing. It has been repeatedly held by the courts that Section 25(3) requires an express promise made in writing and signed by the debtor, and an implied promise is not sufficient. The language must indicate that it is something more than a mere acknowledgement of debt. A cheque, in itself does not contain such a promise as is required by CIS No. 12383/16, Meena vs. Norman Arun George Page 16 to 30 Section 25(3). {Suresh Kumar Joon Vs. Mool Chand Motors and Others (IA No. 8561/2011 and 8562/2011 in CS(OS) 389/2009, Delhi HC), V.A. Enterprises Vs. M/s Tooltek Special Machines & Others (Criminal Appeal No. 159/2012 Bom HC), N. Ethirajule Naidu Vs. K.R. Chinni Krishnan Chattiar (AIR 1975 Mad 333) and M.S.N. Charities Vs. Pilla Romarav (2002 (2) APLJ (HC) 226) also relied upon. 6.6.1 The provisions of acknowledgement as contained in Section 18 of the Limitation Act also do not assist the complainant as a simple acknowledgement under Section 18 of the Limitation Act would only extend the period provided under the Limitation Laws, but after a debt becomes time barred, the only way it can be revived is when the debtor enters into a fresh obligation with the creditor and satisfies the conditions laid down in Section 25(3). {Hiralal & others Vs. Badkulal & others (AIR 1953 SC 225) relied upon}.
6.6.2 The question whether a time barred debt is a legally enforceable debt U/s 138 NI Act has been dealt with in Sasseriyil Joseph v. Devassia 2001 CriLJ 24, wherein The Hon'ble High Court of Kerala has held as under :-
"6. The only question that arises for consideration in this appeal is whether the respondent who issued the cheque in question in discharge of a time barred debt is liable under S. 138 CIS No. 12383/16, Meena vs. Norman Arun George Page 17 to 30 of the Negotiable Instruments Act. In this case, the complainant had admitted that the loan was advanced to the accused in January, 1988 and the cheque was issued in February, 1991. Thus, by the time the cheque was issued, the debt was barred by limitation since there was no valid acknowledgment of the liability within the period of limitation. According to the learned counsel for the appellant, the promise made by the accused to repay the time barred debt would come within the purview of S. 25(3) of the Indian Contract Act. No doubt, the promise to pay a time barred cheque is valid and enforceable, if it is made in writing and signed by the person to be charged therewith. But, it is clear from S. 138 of the Negotiable Instruments Act that in order to attract the penal provisions in the bouncing of a cheque in Chapter XVII, it is essential that the dishonoured cheque should have been issued in discharge, wholly or in part, or any debt or other liability of the drawer. The explanation to S. 138 defines the expression 'debt or other liability' as a legally enforceable debt or other liability. The explanation to S. 138 reads as under:-- "Explanation:-- For the purpose of this section, "debt or other liability" means a legally enforceable debt or other liability"
"7. Thus, S. 138 is attracted only if the cheque is issued for the discharge of a legally enforceable debt or other liability. In this case, admittedly, the cheque in question was issued in discharge of a time barred debt. It cannot be said that a time- CIS No. 12383/16, Meena vs. Norman Arun George Page 18 to 30 barred debt is a legally enforceable debt. In this connection, it is also relevant to note the decision of the Andhra Pradesh High Court reported in Girdhari Lal Rathi v. P.T.V. Ramanujachari (1997 (2) Crimes 658). It has been held in that case that if a cheque is issued for a time-barred debt and it is dishonoured, the accused cannot be convicted under S. 138 of the Negotiable Instruments Act simply on the ground that the debt was not, legally recoverable. I am fully in agreement with the view expressed by the learned Judge in the decision referred to above."
24. Similarly, Hon'ble High Court of Delhi, in M/s. Vijay Polymers Pvt. Ltd. vs M/s. Vinnay Aggarwal, Crl.M.C.1682/2008, decided on 24 April, 2009, has also discussed the law whether a complaint filed under Section 138 of the Negotiable Instruments Act is maintainable in law, if the same is based upon the dishonor of a cheque which was issued in lieu of a debt which was not legally recoverable at the time of issuance of the said cheque. It has been held as under:
"12. A perusal of the aforesaid provision clearly goes to show that for analyzing the limitation of a civil liability beyond a period of three years, the acknowledgement, if any, must be there before period of limitation is over, which is not the case.
"13. It may also be relevant to take note of the judgment delivered by the Bombay High Court in Smt. Ashwini Satish Bhat Vs. Shri Jeevan Divakar Lolienkar & Another [2000(5) Bom CR 9], wherein also in a similar case when a cheque was CIS No. 12383/16, Meena vs. Norman Arun George Page 19 to 30 dishonoured which issued beyond the period of limitation the appeal filed by the complainant was dismissed. The relevant observations made in this regard in the aforesaid judgment are reproduced hereunder:-
"3. On the other hand, learned Advocate Shri C.A. Ferreira, appearing for the respondent, submitted before me that the dishonoured cheque in question was not in respect of a legally enforceable debt and in view of Explanation to section 138 of the said Act, the Magistrate has rightly acquitted the respondent on the said count as well as on the ground that there was doubt as to whether the amount mentioned in the said cheque was in the handwriting of the respondent as the defence of the respondent is that he had handed over to the appellant a blank cheque. In support of his submission that the dishonoured cheque in question is not in connection with any legally enforceable debt, reliance was placed by him on Girdhari Lal Rathi v. P.T.V. Ramanujachari and another, 1998 Bank J. 127 : 2000 Do Ch. (A.P.)420. He, therefore, submits that there is no case for interference with the acquittal.
"4. The complainant, respondent and one Shankar Prabhudessai had entered into partnership vide Partnership Deed Exhibit P.W. 1/D on 24th August 1990. This partnership was dissolved on 13th June 1991 after an agreement was executed between the parties under which the respondent agreed to pay a sum of Rs. 1,53,724 to the appellant/complainant within 12 CIS No. 12383/16, Meena vs. Norman Arun George Page 20 to 30 months and in case he fails to make the said payment during the said period, the said amount was to carry bank interest from the date of the agreement. The case of the complainant further is that the respondent did not pay the amount as agreed under the said Agreement dated 13th June, 1991, but on 19th July, 1996 the respondent issued cheque for Rs. 3,87,500/- and this cheque has bounced.
"5. The defence had taken the stand that the dishonoured cheque was not in relation to any legally enforceable debt and, as such, the respondent could not be held guilty under section 138 of the said Act. The contention of learned Advocate for the appellant is that this cheque dated 19th July 1996 itself is an acknowledgement of debt and, as such, there is no merit in the submission of the defence that the liability under dishonoured cheque is not on account of legally enforceable debt. Insofar as the dishonoured cheque is concerned, the stand taken by the respondent is that the cheque was not written by him and it is not in his handwriting and that he had, in fact, issued a blank cheque in favour of the appellant for certain purpose. This stand was specifically taken by the respondent in the course of the trial and, as such, it was necessary for the complainant to have sought the opinion of handwriting expert in case her case was that the cheque in question was in the handwriting of the respondent, so as to rebut the theory of blank cheque taken by the respondent. It is in these circumstances that the Magistrate had come to the CIS No. 12383/16, Meena vs. Norman Arun George Page 21 to 30 conclusion that the dishonoured cheque in question cannot be treated as acknowledgement under section 18 of the Limitation Act, since the acknowledgement should be before the period of limitation is over and that it should be in writing. In view of this position, the Magistrate was right in coming to the conclusion that it had not been proved that the dishonoured cheque was in relation to a legally enforceable debt or liability in law. The dishonoured cheque admittedly was issued after 5 years of the said Agreement dated 13th June 1991.
"6. The ruling upon which reliance has been placed by the learned advocate for the respondent is applicable on all fours. In that case loan was advanced in the year 1985 and the cheque was issued in the year 1990. By the time the cheque was issued, the debt was barred by limitation because no acknowledgement was obtained before the expiry of 3 years from the date of loan. In these circumstances, it was held there that the debt was not legally enforceable at the time of issuance of cheque and the accused could not be punished under section 138 of the said Act. It was further held therein that in case a cheque is issued for time barred debt and it is dishonoured, the accused cannot be convicted under section 138 on the ground that the said debt was not legally recoverable.
"7. For the aforesaid reasons, I do not find any merit in this appeal and the appeal is liable to be dismissed. The appeal is accordingly dismissed.
CIS No. 12383/16, Meena vs. Norman Arun George Page 22 to 30 "14. No contrary judgment has been cited on behalf of the complainant/respondent. Accordingly the petition is allowed..."
25. Hon'ble High Court of Delhi in M/s. Jage Ram Karan Singh & Anr vs State & Anr, Crl. Rev. P. no. 82/2013, decided on 31 July, 2019, has summarized the law in this regard. It has been held as under:
"A bare perusal of the aforesaid provision clearly goes on to show that for analyzing the limitation of a liability beyond a period of three years, the acknowledgment, if any, must be there before the period of limitation is over, which is not the case in hand.
"26. Further, it has been held time and again by the Apex Court as well as by the various High Courts that mere giving of a cheque, without anything more, will not revive a time-barred debt, because cheque has to be given, as contemplated by the explanatory, in discharge of a legally enforceable debt. In this regard, it may be relevant to take note of the order dated 10.9.2001 relied upon by the learned counsel for the respondent No.2 titled Sasseriyil Joseph v. Devassia (supra) wherein, in a similar case, it has been held by the Supreme Court that, a cheque which has been issued by the accused for a due which was barred by limitation, the penal provision under Section 138 of the NI Act is not attracted. The relevant observations made in this regard in the aforesaid judgment are reproduced hereunder: -
"We have heard learned counsel for the petitioner. We have CIS No. 12383/16, Meena vs. Norman Arun George Page 23 to 30 perused the judgment of the High Court of Kerala in Criminal Appeal No. 161 of 1994 confirming the judgment/order of acquittal passed by the Addl. Sessions Judge, Thalassery in Criminal Appeal No. 212 of 1992 holding inter alia that the cheque in question having been issued by the accused for due which was barred by limitation the penal provision under Section 138 of the Negotiable Instruments Act is not attracted in the case.
"On the facts of the case as available on the records and the clear and unambiguous provision in the explanation to Section 138 of the Negotiable Instruments Act the judgment of the lower appellate Court as confirmed by the High Court is unassailed. Therefore, the special leave petition is dismissed."
"27. In Vijay Polymers Pvt. Ltd. & Anr. v. Vinnay Aggarwal (supra), relying upon the judgment of the Supreme Court in Sasseriyil Joseph (supra), it has been observed that, cheques issued for a timebarred debt would not fall within the definition of 'legally enforceable debt', which is the essential requirement for a complaint under Section 138 of the NI Act; the extended meaning of debt or liability has been explained in the Section which means a legally enforceable debt or liability. Useful reference may also be made to the case titled Prajan Kumar Jain v. Ravi Malhotra, 2009 SCC Online Del 3368, wherein, like the case in hand, it has been held by another Coordinate Bench of this Court that, an acknowledgment to be encompassed CIS No. 12383/16, Meena vs. Norman Arun George Page 24 to 30 within the ambit of Section 18 of the Limitation Act has to be an acknowledgment in writing as also within the prescribed period of limitation. These are the twin requirements which have to be fulfilled in order to be a valid acknowledgment under Section 18 of the Limitation Act. Relevant portion of the aforesaid judgment is reproduced hereunder:
"10....This acknowledgment even as per the complaint was much after the statutory period of three years which is the prescribed period of limitation for the recovery of an outstanding amount. An acknowledgment to be encompassed within the ambit of Section 18 of the Limitation Act has to be an acknowledgment in writing as also within the prescribed period of limitation. These are the twin requirements which have to be fulfilled in order to be a valid acknowledgment under Section 18 of the Limitation Act which is admittedly not so in the instant case. In this case this acknowledgment to pay the balance amount was in terms of the settlement dated 26.1.2005 i.e. much after the statutory period of three years; it also does not speak of the acknowledgement being in writing. It was thus not a valid acknowledgment."
26. Thus, there pronouncements lay down that for a time barred debt, proceedings under section 138, the N.I. Act are not maintainable. Section 138 is attracted only if the cheque is issued for the discharge of a legally enforceable debt or other liability. No doubt, time barred debt would come within the purview of CIS No. 12383/16, Meena vs. Norman Arun George Page 25 to 30 Section 25(3) of the Indian Contract Act. The promise to pay a time barred debt is valid and enforceable, if it is made in writing and signed by the person to be charged therewith. But, it is clear from Section 138 of the Negotiable Instruments Act that in order to attract the penal provisions in the dishonouring of a cheque in Chapter XVII, it is essential that the dishonoured cheque should have been issued in discharge, wholly or in part, of any debt or other liability which is legally enforceable by the drawer to the payee. So, as per the ratio in the above mentioned judgments, if any cheque is issued for a time barred debt, the complaint under section 138 NI Act is not maintainable.
6.7 In the present case also admittedly, as per the complaint, the loan was given on 15.02.2013 and the cheques were also allegedly issued on the same date. Therefore, there was no promise or acknowledgement in the writing by the accused to the complainant to pay the time barred debt in the year 2013. The debt itself had become barred by limitation on 15.02.2016, i.e., before the presentation of the cheques to the bank for encashment.
6.8 As already discussed in the preceding paragraph of this judgment, the standard of proof required to rebut the presumption U/s 139 of the NI ACt about the cheque being issued for a legally CIS No. 12383/16, Meena vs. Norman Arun George Page 26 to 30 enforceable debt or other liability, is only "preponderance of probabilities", and when such probabilities regarding non existence of the debt or liability or its legal enforceability is shown, the presumption U/s 139 of NI Act must be deemed to have been rebutted. In the opinion of this court, as per the aforesaid discussion, the accused has been successful in rebutting the presumption U/s 139 of NI Act upon a standard of preponderance of probabilities, and therefore, the complainant is required to prove his case, 'de hors' such presumption.
6.9 Coming to the contents of the affidavit in evidence of the complainant, which is Ex. CW1/A, the complainant took the postdated cheques dated beyond three years from the accused, even though she has admitted in her later crossexamination dated 27.09.2021 that the loan was supposed to be returned within one year by the accused, and therefore, the conduct of the complainant does not stand the test of conduct of a reasonable/prudent man, in terms of Section 114 of the Indian Evidence Act, 1872. The complainant has not proved herself to be a person of such means as to be capable of giving an amount of Rs. 6,30,000/, as loan to the accused, as she has admitted during her crossexamination by Ld. defence counsel that her monthly earnings at the relevant time were ten to twelve thousand rupees per month, whereas her monthly expenditure CIS No. 12383/16, Meena vs. Norman Arun George Page 27 to 30 were Rupees eight to ten thousand per month. There are material contradictions in the testimony of the complainant as in her crossexamination dated 02.02.2021, she has first stated that she did not execute any written loan agreement with the accused, but also again stated on the same date that there was a written contract, which has been filed along with the documents in the present complaint case. Upon perusal of the case record on the very same day, no such written agreement was found to exist. In her crossexamination dated 27.09.2021, complainant has stated that the loan transaction was entered into with the accused in the presence of her husband, accused and his wife, but none of these persons have been produced as witnesses by the complainant. In her crossexamination dated 02.02.2021, the complainant stated that she had arranged the sum of Rs. 6,30,000/ to be paid to the accused after mortgaging her old jewellery, and obtaining some amount from her brother, apart from the some amount being in her own possession. Neither any such mortgage receipt or purchase bill of jewellery has been produced in evidence by the complainant, nor has she examined her brother or the mortgage to prove this fact. The complainant alleges to have given Rs. 6,30,000/ to the accused in cash, without any loan agreement or promissory note, which renders the loan transaction to be not worthy of believing, apart form the fact that any such transaction is in clear violation of the taxation laws, particularly Section 269 CIS No. 12383/16, Meena vs. Norman Arun George Page 28 to 30 (SS) and Section 271D of the Income Tax Act, 1961.
6.10 In these circumstances, this court is of the opinion that the complainant has failed to prove the existence of a legally enforceable liability towards discharge of which cheque in question was issued, beyond reasonable doubt.
6.11 As held in the case of K. Bhaskaran Vs. Sankaran Vaidhyan Balan [(1999) 7 SCC 510], the offence under Section 138 of NI Act is completed by a concatenation of all the essential ingredients of the offence, and since in the present case, there is found to be an absence of a legally enforceable debt or other liability, meaning thereby that one of the essential ingredients of the offence under Section 138 is not made out, therefore, there is no requirement to dwell upon the existence of other ingredients, i.e., the reason for return of the cheque as unpaid, and the delivery of the mandatory legal notice.
Conclusion In view of the above discussion, I am of the considered opinion that the accused has rebutted the statutory presumption u/s 139 of the Negotiable Installments Act, and the complainant has failed to establish her case beyond reasonable doubt against the accused. Accordingly, accused Norman Arun George r/o 5 CIS No. 12383/16, Meena vs. Norman Arun George Page 29 to 30 Block 8-A, Mayur Kunj, Trilokpuri, Delhi-91, also at 125, Block- 8-A, Mayur Kunj, Trilokpuri, Delhi-91 is hereby acquitted of the offence punishable under Section 138 NI Act. Copy of this judgment be given free of cost to both the sides.
Digitally signed by ABHINAV Announced in the open Court on 24.08.2022. ABHINAV PANDEY PANDEY Date: 2022.08.30 11:39:39 +0530 (Abhinav Pandey) Metropolitan Magistrate-04 (Shahdara) KKD/Delhi The judgment contains 30 pages, all ABHINAV Digitally signed by ABHINAV PANDEY pages signed by the presiding officer PANDEY Date: 2022.08.30 11:39:52 +0530 (Abhinav Pandey) Metropolitan Magistrate-04 (Shahdara) KKD/Delhi
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