Delhi District Court
Bhagwan Yadav vs . Adarsh Khandelwal 1 Of 14 on 10 March, 2023
IN THE COURT OF RAHUL JAIN,
METROPOLITAN MAGISTRATE - 04, N. I. ACT,
SOUTHWEST DISTRICT, DWARKA DISTRICT COURTS, DELHI.
JUDGMENT
Bhagwan Yadav ....................Complainant Versus Adarsh Khandelwal ....................Accused PS - Pallam Village Under Section 138 of N. I. ACT, 1881
a) Sl. No. of the case : CC No. 15749/2019
b) Name of the complainant : Sh. Bhagwan Yadav, Sh. Mangat Ram, R/o 716, Main Market, Kapashera, New Delhi
c) Name of the accused : Sh. Adarsh Khandelwal, S/o Sh. Puran Mal Khandelwal, R/o C201, Surya Vihar, Dundahera, Gurgaon (Haryana) 122016,
d) Offence complained of : Under Section 138 of N. I. Act, 1881
e) Plea of accused : Pleaded not guilty
f) Final order : Convicted
g) Date of such order : March 10, 2023 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 Mr. Bhagwan Yadav against accused namely Mr. Adarsh Khandelwal. In gist, it is alleged in the complaint that the accused and the complainant are friends and have friendly relations with each other since long time. It is further alleged in the complaint that the accused approached the complainant for financial help as a friendly Bhagwan Yadav vs. Adarsh Khandelwal 1 of 14 Rahul Digitally signed by Rahul Jain Jain Date: 2023.03.10 15:36:13 +0530 loan for business needs as the accused stated that he was facing some financial problem and being friends, the complainant advanced Rs. 41,00,000/ (Rupees Forty One Lakh) from time to time to the accused as interest free friendly loan. Further, the accused assured that he will repay the loan amount within 3/3 ½ years. But despite several requests made by the complainant to the accused to repay the above amount, the accused just gave false assurances to the complainant. Finally, he issued a cheque bearing no. 604888 dated 04.03.2019, Ex. CW1/1 drawn on Vijaya Bank of Rs. 41,00,000 / (Rupees Forty One Lakh Only) but the same was returned unpaid with the remarks " Funds Insufficient" vide return memo dated 06.03.2019, Ex. CW1/2. Thereafter, the complainant served a legal notice dated 03.04.2019, Ex. CW1/3 through his counsel but no payment was made, hence, this complaint. PRESUMMONING EVIDENCE & NOTICE
2. Presummoning evidence was led by the complainant side and after hearing complainant side, accused 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 the accused for offence punishable under Section 138 of the Negotiable Instruments Act, 1881 on 16.10.2021 to which accused pleaded not guilty and claimed trial. He stated that he had not taken any loan from the complainant. He admitted issuance of the cheque in question but the cheque was issued for some other purpose as a blank cheque. He further stated that he had given the cheque to the complainant as security for purchase of a property. He also stated that the complainant is known to him but the complainant Bhagwan Yadav vs. Adarsh Khandelwal 2 of 14 Rahul Digitally signed by Rahul Jain Jain Date: 2023.03.10 15:36:22 +0530 has misused the cheque and falsely implicated him in this case. He admitted receiving the legal notice. Thereafter, matter was fixed for complainant's evidence and accused side was granted opportunity to crossexamine the complainant's evidence. COMPLAINANT'S POST NOTICE EVIDENCE
3. Complainant examined himself as CW1, adopted affidavit of pre summoning as his evidence reiterating almost all facts of complaint, stating all exhibits available on record. Complainant was cross examined where he deposed that he knows the accused since 10 to 15 years and was dealing with the accused for the construction of the property at Kapashera. The accused had taken loan of Rs.41 lacs in 2016 till 2018 in three parts i.e. Rs. 10 lacs, Rs.20 lacs and Rs. 11 lacs. But he did not remember exact date or month of the advanced amount. He admitted that no receipt or loan agreement was executed between them. He further deposed that he had arranged loan amount as the property of his wife was sold and loan was given out of the proceeds. The loan amount was given in cash to the accused. He also produced the property papers Ex. CW1/D1 belonging to his wife. He admitted that details of this property was not mentioned in the complaint. He also admitted that he not mentioned the year, month and date of the loan in the complaint and the fact that the loan was advanced in installments. He had not filed any proof to show that he took money from his wife to advance to the accused. He voluntarily said that he had placed on record property records which shows source of income. He brought his ITR, but he did not wish to exhibit the same as he had not shown the present loan in the ITR. He further deposed that he did not remember the date, month or year when the cheque in question Bhagwan Yadav vs. Adarsh Khandelwal 3 of 14 Rahul Digitally signed by Rahul Jain Date: 2023.03.10 Jain 15:36:29 +0530 was delivered to him by the accused. He admitted that the transactions was for the year 2016. He denied the suggestion that he presented the cheque in the bank when the accused told him that he was going to file a police complaint. He admitted the fact that he had not mentioned in his evidence affidavit Ex. CW1/A that loan was paid to the accused in three installments. He voluntarily said that the cheque was filled by the accused. He denied all the other suggestions put by the counsel for the accused.
4. Complainant closed his CE vide order dated 25.07.2022 and thereafter, matter was fixed for recording statement of accused. STATEMENT OF ACCUSED
5. The statement of accused was recorded under Section 313 Cr.P.C of the Code of Criminal Procedure, 1973 read with Section 281 of The Code of Criminal Procedure, 1973 separately on 25.07.2022. Incriminating evidence was put to him. He denied that he had taken loan of Rs.41,00,000/ from the complainant and stated that he had issued a cheque to the complainant as blank signed cheque for some other purpose. He admitted receiving the legal notice. The complainant was his neighbour and they used to be friend at a time. The complainant approached him to buy a property together for Rs, 1 Crore (Appx). The complainant told him that urgent payment was required through cheque. Thus, he issued the present cheque as a blank signed cheque for the same. The complainant has misused his cheque. He did not owe any liability of the cheque amount towards the complainant. Thereafter, matter was fixed for Defence Evidence.
6. The accused stepped into the witness box as DW1 and he reiterated that he had issued the cheque in question as blank signed security cheque. They had agreed to buy a property together and he had issued the cheque in question as security to the complainant but the deal was not executed and the cheque in question was in Bhagwan Yadav vs. Adarsh Khandelwal 4 of 14 Rahul Digitally signed by Rahul Jain Jain Date: 2023.03.10 15:36:35 +0530 possession with the complainant. He asked the complainant to return his cheque but he kept on lingering till six months and did not return his cheque. Thereafter, he told the complainant that he will file a complaint. Later, the complainant misused his cheque and sent him a legal notice. He enquired from the complainant why had he sent legal notice, then, he told him that tear it apart. As he used to have friendly relations with the complainant so he didn't take any action.
Later on, he received summons from this court after 03 months. He deposed that he had issued the cheque in question in 2017 but he did not remember the exact date or month of the cheque. He did not remember when the cheque book was issued to him by the bank. Further, he was shown the date mentioned below the QR code on the cheque and he confirmed that date was 06.04.2017. He was not aware of the date when the cheque book was printed. He further deposed that the cheque was given for the security of business deal but they did not execute any MOU or any document regarding this deal. He denied the suggestion that he had taken financial assistance of Rs. 41 lacs from the complainant in three installments for the purpose of constructing a new building in Kapashera and had assured that he will return the amount from the proceed of the sale of the building after the building was constructed. He voluntarily said that he sold some another building in Oct, 2015 for the construction of the building referred by the complainant . He stated that he used to live in Kapashera in the same village as the complainant for 40 years and the house of the complainant was 200 Meters near his house. He further stated that he had not issued any stop instruction to the bank after issuance of cheque. Further, he said that never had an amount of Rs. 41 lacs in his bank account. He also stated that he had to invest Bhagwan Yadav vs. Adarsh Khandelwal 5 of 14 Rahul Digitally signed by Rahul Jain Jain Date: 2023.03.10 15:36:40 +0530 more than Rs. 1 crore in the property deal for which he alleged he had issued the cheque. He did not lodge any police complaint after the complainant did not return his cheque and also did not file any written reply to the legal notice received from the complainant.
Thereafter, Defence evidence was closed and matter was fixed for argument vide order dated 03.01.2023.
7. Final Arguments were heard on behalf of the both the parties on 03.01.2023. Written arguments were also filed on behalf of accused.
Case file perused.
POINTS FOR DETERMINATION : 7.1 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? 7.2 Final order.
APPRECIATION OF FACTS/CONTENTIONS/ANALYSIS & FINDINGS
8. 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. Digitally signed
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(c) The cheque(s) so presented for encashment was/were
dishonored.
(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 aforesaid Legal Demand Notice.
(f) The complaint was presented within 30 days after the expiry of above 15 days.
UNDISPUTED/UNCONTROVERTED FACTS
9. At the outset, it is pertinent to mention herein that it is not in dispute that cheque in question belong to the accused, it bears his signatures, it was drawn on an account maintained by the accused with a bank, cheque in question was dishonored as alleged, legal demand notice was sent to correct address of accused and accused failed to make the payment of cheque in question till date. So, there is no need of discussion qua said ingredients and same can be regarded as being duly proved on record and being noncontroverted.
CONTENTIONS QUA CONSIDERATION 10.1(a) The contentions which have been raised by defence are that the accused had not taken any loan from the complainant. He had issued the cheque in question to the complainant for some property dealing but the same was not executed. It is the contention of defence that accused side has been able to rebut the presumption of Bhagwan Yadav vs. Adarsh Khandelwal 7 of 14 Digitally signed by Rahul Jain Rahul Jain Date: 2023.03.10 15:36:54 +0530 consideration available in favour of the complainant as consideration qua cheques in question. It is contended that accused should be acquitted in this matter. 10.1(b) On the other hand, it is the contention of the complainant side that the accused had taken friendly loan of Rs. 41,00,000/ via cash from time to time and and issued the cheque in question. Legal demand notice was issued and received by accused side, hence, all ingredients of commission of offence punishable under Section 138 of The Negotiable Instruments Act, 1881 stands established on record, therefore, accused should be held guilty in this matter. 10.2 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."
Digitally
signed by
Bhagwan Yadav vs. Adarsh Khandelwal Rahul Rahul Jain
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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 nonexistence of consideration by brining 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."
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 Bhagwan Yadav vs. Adarsh Khandelwal Digitally signed 9 of 14 Rahul by Rahul Jain Date:
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under Section 118 (a) would arise that it is supported by a consideration. Such a presumption is rebuttable. The defendant can prove the nonexistence 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 nonexistence 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 nonexistence 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 Full 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 Digitally Bhagwan Yadav vs. Adarsh Khandelwal signed by 10 of 14 Rahul Rahul Jain Date:
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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 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."
11.3 So, precisely there is initial presumption of legally enforceable debt or liability against the accused side, but same is rebutable. The standard of proof for rebuttal is preponderance of probabilities. Accused side can lead evidence in defence, Bhagwan Yadav vs. Adarsh Khandelwal 11 of 14 Rahul Digitally signed by Rahul Jain Date: 2023.03.10 Jain 15:37:18 +0530 even can rely on materials submitted by complainant and can rely upon circumstances also to show nonexistence of consideration or it being improbable and need not adduce evidence of his own for the same.
11.4 The defence of the accused side considered in view of abovecited case laws. In the present case, the defence taken by the accused is not tenable. Primarily, the accused has taken a defence that he has issued the cheque in question as blank signed cheque as he and the complainant had agreed to buy a property but the deal was not executed and the complainant did not return his cheque.
Firstly, the accused challenged the financial capacity of the complainant and the source of funds. The complainant produced sale deed and deposed that he arranged the loan amount as the property of his wife was sold and the loan was given out of the proceeds. Perusal of the same corroborates the testimony of the complainant whereby the wife of the complainant had received Rs. 1,71,00,000/ (Rupees One Crore Seventy One Lakh ) vide sale deed dated 20.03.2015. Thus, this defence is rejected as the complainant has satisfactorily showed his source of funds and financial capacity.
Secondly, the accused admitted his friendly relations with the complainant when he came into the witness box and he deposed in his defence that he used to have friendly relations with the complainant and knows the complainant as they used to live in the same village for 40 years wherein the complainant used to live 200 Meters near to his house.
Thirdly, the accused gave contradictory statement in his defence as to when he had issued the cheque in question. As per his defence in his application u/s Bhagwan Yadav vs. Adarsh Khandelwal 12 of 14 Digitally signed Rahul by Rahul Jain Date: Jain 2023.03.10 15:37:26 +0530 315 Cr.P.C, he had stated that he had issued the cheque in question in 2016 while in his crossexamination, he has stated that he had issued the cheque in question in 2017.
This contradiction puts a hole in the testimony of the accused and this goes to the root of his defence that the cheque was given for a property deal.
Fourthly, the accused despite knowing that the complainant misused his cheque when deal could not be executed (as per his version) did not file any stop payment instructions to his bank.
Fifthly, the accused admitted receiving the legal notice from the complainant. It is natural to assume that accused should have replied to the legal notice given the fact that his cheque had been misused as per his version but the accused admitted that he did not file any written reply to the legal notice. This only goes to fortify the version of the complainant.
FINAL CONCLUSION
12. 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(s) of accused during notice/accusations explained to him and statement of accused recorded under Section 313 of The Code of Criminal Procedure, 1973 read with Section 281 of The Code of Criminal Procedure, 1973 that accused issued cheque in question for discharge of his liability, cheque got dishonored on presentment, complainant served legal demand notice upon accused demanding the cheque amount in question, however, accused failed to make the said Digitally signed by Bhagwan Yadav vs. Adarsh Khandelwal Rahul Rahul Jain Date:
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payment within statutory period despite service. So, all the ingredients of offence punishable under Section 138 of The Negotiable Instruments Act, 1881 stands established on record.
FINAL ORDER
13. In view of the aforementioned facts and circumstances, this Court is of the opinion that complainant has proved its case against the accused for offence punishable under Section 138 of The Negotiable Instruments Act, 1881 beyond shadow of any reasonable doubt. Accordingly, accused namely Adarsh Khandelwal stands convicted for offence punishable under Section 138 of The Negotiable Instruments Act, 1881.
Digitally signed Announced in the open Court Rahul by Rahul Jain Date: on March 10, 2023. Jain 2023.03.10 15:35:53 +0530 (RAHUL JAIN) MM (NI) ACT-04, DWARKA COURTS NEW DELHI/10.03.2023 Bhagwan Yadav vs. Adarsh Khandelwal 14 of 14