Delhi District Court
S. Satveer Singh vs . Rajesh Prasad on 11 January, 2023
IN THE COURT OF SH. MAYANK GOEL:MM-02, NI ACT,
TIS HAZARI COURTS:DELHI
____________________________________________________________________________
Ct. Case No. 14940/2016
S. SATVEER SINGH Vs. RAJESH PRASAD
PS Tilak Nagar
U/s. 138 Negotiable Instrument Act
1) S. SATVEER SINGH
S/o Late Sh. S. Charan Jeet Singh
R/o Sh. J-197, Vishnu Garden,
New Delhi-110018,
2) S. Harsimran Singh
S/o Sh. S. Satveer Singh
R/o J-197, Vishnu Garden,
New Delhi-110018, ........................ COMPLAINANT
Vs.
1) Rajesh Prasad,
Manager of R.P. Charitable Trust,
also proprietor of R.P. Masale
S/o Sh. Raja Ram,
R/o Village Kithouti,
Jabalpur, Uriya Deh, Patti,
Pratapgarh,
___________________________________________________________________________________
Ct. Case No. 14940/2016
S. SATVEER SINGH Vs. RAJESH PRASAD Page No. 1 of 15
PS Tilak Nagar
U/s. 138 Negotiable Instrument Act
Uttar Pradesh-230001
2) Sh. Virender Vir Vikram
President of R.P. Charitable Trust,
S/o Sh. Rajesh Prasad,
R/o Village Kithouti,
Jabalpur, Uriya Deh, Patti,
Pratap Garh,
Uttar Pradesh-230001,
3) Anjesh Ray
Main Trusty of R.P. Charitable Trust
S/o Sh. Rajesh Prasad
R/o Village Kithouti,
Jabalpur, Uriya Deh, Patti,
Pratap Garh,
Uttar Pradesh-230001,
4) Anjeh Mitra
Cashier of R.P. Charitable Trust
S/o Sh. Rajesh Prasad
R/o Village Kithouti,
Jabalpur, Uriya Deh, Patti,
Pratap Garh,
Uttar Pradesh-230001,
___________________________________________________________________________________
Ct. Case No. 14940/2016
S. SATVEER SINGH Vs. RAJESH PRASAD Page No. 2 of 15
PS Tilak Nagar
U/s. 138 Negotiable Instrument Act
5) Sumitra Devi,
Main Trusty of R.P. Charitable Trust,
W/o Sh. Rajesh Prasad
R/o Village Kithouti,
Jabalpur, Uriya Deh, Patti,
Pratap Garh,
Uttar Pradesh-230001, ......................... ACCUSED
JUDGMENT
1) Offence complained of : Section 138 Negotiable Instrument Act 2) Plea of accused : Pleaded not guilty 3)Date of institution of the case : 07.01.2016 4) Final order : Convicted. 5) Date of reserving of order for judgment : 07.01.2023 6) Date of final order : 11.01.2023
___________________________________________________________________________________ Ct. Case No. 14940/2016 S. SATVEER SINGH Vs. RAJESH PRASAD Page No. 3 of 15 PS Tilak Nagar U/s. 138 Negotiable Instrument Act Brief reasons for decision: 1) The necessary facts for disposal of present case as reflected in the complaint is that
the complainant no. 1 is a retired government servant, whose name is Sh. S. Satveer Singh S/o Late Sh. S. Charan Jeet Singh R/o J-197, Vishnu Garden, New Delhi- 110018. That the complainant no. 2 Sh. S. Harsimran Singh S/o Sh. S. Satveer Singh is a graduate and resides at J-197, Vishnu Garden, New Delhi-110018. That the complainant no. 2 is a Major. That the accused no. 1 Sh. Rajesh Prasad is engaged in the business of spices and the name of his proprietorship firm is M/s R.P. Masale and he is also engaged and working as a Manager of Trust. That the name of the trust where accused no. 1 is working as a Manager is R.P. Charitable Trust. That the accused no. 2 Sh. Virender Vir Vikram, is the President of the R.P. Charitable Trust, accused no. 3 Sh. Anjesh Ray is the main trusty of R.P. Charitable Trust, accused no. 4 Sh. Anjay Mitra is the cashier of the R.P. Charitable Trust and accused no. 5 Ms. Sumitra Devi is also engaged as a main trusty of the trust. That all these persons are wholly responsible for the conduct of the accused as a Manager of R.P. Charitable Trust & personally liable for all the facts and deeds of the accused R.P. Charitable Trust. That the accused no. 1 Sh. Rajesh Prasad entered into two different agreements with the complainant no. 1 and complainant no. 2. That the accused no. 1 Sh. Rajesh Prasad entered into first agreement with S. Harsimran Singh, the complainant no. 2 on 22.12.2014. That the complainant no. 2 S. Harsimran Singh gave to the accused no. 1 a sum of Rs. 50,000/- by an account payee cheque vide cheque no. 77217 of State Bank of India, Timarpur Branch, Delhi, dated 26.12.2014. That the accused no. 1 Sh. Rajesh Prasad entered into second agreement with Sh. S. Satveer Singh, the complainant no. 1 on 13.08.2015. That the complainant no. 1 S. Satveer Singh gave to the accused no. 1 a sum of Rs. 1,00,000/- in cash. That when the business of the complainants did not work out as per the agreed terms of the accused no. 1, the ___________________________________________________________________________________ Ct. Case No. 14940/2016 S. SATVEER SINGH Vs. RAJESH PRASAD Page No. 4 of 15 PS Tilak Nagar U/s. 138 Negotiable Instrument Act complainants decided to wind up the business and asked the accused no. 1 to pay them back their money. That the accused no. 1 Sh. Rajesh Prasad, the proprietor of M/s R.P. Masale and the Manager of R.P. Charitable Trust issued to the complainants an account payee post dated cheque vide cheque no. 045423, which is Ex. CW 1/4, from current account bearing no. 1869002100201262 drawn on Punjab National Bank for a sum of Rs.1,50,000/- in full and final discharge of his liability. On presentation by the complainant with its banker, the said cheque was dishonored with the remarks "Payment stopped by drawer" on 30.09.2015, which is Ex. CW 1/5, and "funds insufficient" on 27.10.2015, which is Ex. CW 1/6. Thereafter, legal demand notices Ex.CW1/8 to Ex. CW 1/12 dated 03.11.2015 were served upon all the accused persons calling them to pay the cheque amount but despite the service of the legal notice, the accused persons have not paid the cheque amount within the stipulated period of 15 days as per NI Act. Thereafter, complainant has filed the present written complaint case u/s 138 r/w 142 of the Negotiable Instruments Act, 1881.
2) Cognizance of offence under section 138 NI Act was taken against the accused and summons were issued. The present complaint was proceeded only against accused no. 1 Rajesh Prasad vide order dated 07.09.2018 as the cheque-in-question was issued from the account of R.P. Masale and accused no. 1 Rajesh Prasad is the proprietor of R.P. Masale. Notice of accusation u/s 251 Cr.P.C. were served upon the accused on 14.12.2018 and plea of defence of the accused was also recorded on the same day in which he had not pleaded guilty and claimed trial. The plea of the accused had also been recorded on the same day. It is stated by accused that the present cheque-in-question bears his signature and he had not filled the other ___________________________________________________________________________________ Ct. Case No. 14940/2016 S. SATVEER SINGH Vs. RAJESH PRASAD Page No. 5 of 15 PS Tilak Nagar U/s. 138 Negotiable Instrument Act particulars on the cheque. He further stated that the cheque-in-question was given to the complainant for security purpose as the complainant taken the franchisee of R.P. Masale in the amount of Rs. 1,00,000/- and it was settled between the parties that if the product of R.P. Masale not run in the market, the accused returned the security amount of the complainant. He further stated that the complainant misused the abovesaid cheque of the accused by filling extra amount i.e. Rs. 1,50,000/- instead of Rs. 1,00,000/- which is mentioned in the Ex. CW 1/3 filed by the complainant. He further stated that he has no legal liability to pay the amount of Rs. 1,50,000/- to the complainant. He further stated that the accused did not receive any legal demand notice regarding the present cheque. He further stated that it is pertinent to mention that the complainant also snatched his original trust(R.P. Charitable Trust) documents forcefully. He further stated that he do not owe liability towards the complainant qua the cheque-in-question.
3) In post summoning evidence, the complainants examined complainant no. 1 i.e. S. Satveer Singh as CW 1, for proving their version of the case and was duly cross examined by Ld. Counsel for the accused.
4) Thereafter memorandum of statement of accused u/s 313 Cr.P.C. r/w Sec 281 Cr.P.C.
were also recorded in the case wherein the accused stated that the complainant has disturbed him so much that his business was closed and he went to his village. He further stated that the complainant made the agreement from the copy of his trust. He further stated that the complainant also threatened him to throw him from his office. He further stated that the cheque-in-question was given as security forcefully. He ___________________________________________________________________________________ Ct. Case No. 14940/2016 S. SATVEER SINGH Vs. RAJESH PRASAD Page No. 6 of 15 PS Tilak Nagar U/s. 138 Negotiable Instrument Act further stated that he had taken Rs. 50,000/- from the complainant and ready to pay the same. He further stated that he wants to lead DE.
5) In his defence, the accused did not examine any witness despite opportunities being given and his right to lead DE was closed vide order dated 10.11.2022.
6) Thereafter, the complainant and Learned Counsel for the accused made final oral submissions.
7) It is stated by the complainant that the accused Rajesh Prasad had given the cheque-
in-question at the time of winding up of the business with him towards full and final discharge of his liability and the said cheque got dishonoured and he has liability to pay the cheque amount of Rs. 1,50,000/- to him.
It is stated by the Ld. Counsel for the accused that the cheque-in-question was given to the complainant as security purpose as the complainant had taken the franchise of R.P. Masale for an amount of Rs. 1,00,000/-. It is further stated by the Ld. Counsel for the accused that it was settled between the parties that if the product of R.P. Masale not run in the market, the accused would return the security amount of the complainant i.e. Rs. 1,00,000/- but the complainant misused the security cheque-in-question by filling Rs. 1,50,000/- on the cheque-in-question. It is further stated by the Ld. Counsel for the accused that the agreements placed on record by the complainant have been made by the complainant from the copy of the trust of the accused. It is further stated by the Ld. Counsel for the accused that the complainant during his cross-examination admitted that he had distributed some of the goods and ___________________________________________________________________________________ Ct. Case No. 14940/2016 S. SATVEER SINGH Vs. RAJESH PRASAD Page No. 7 of 15 PS Tilak Nagar U/s. 138 Negotiable Instrument Act therefore, the accused had no liability towards the complainant even to the tune of Rs. 1,00,000/-. It is further stated by the Ld. Counsel for the accused that during the cross-examination of the complainant, a serious doubt is created in the case of the complainant and the accused may kindly be acquitted in the present case.
8) This is the factual matrix of this case. Let us now examine the legal benchmark which is to be satisfied in order to constitute an offence under section 138 NI Act:
(i) That the persons must have drawn a cheque on an account maintained by him in a bank for payment of certain amount of money to another person from out of that account.
(ii) That the cheque should have been issued for discharge in whole or in party of any debt or other liability.
(iii) That the cheque has been presented to a bank within a period of three months from the date on which it was drawn.
(iv) That cheque is returned by the bank unpaid because of the amount of money standing to the credit of account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account or any other reason.
(v) That the payee or the holder in due course of the cheque makes a demand for the payment of said amount by giving a notice in writing to the drawer of the cheque within 30 days of the receipt of the information by him from the bank regarding the return of cheque as unpaid.
(vi) That the drawer of the said cheque fails to make payment of the said amount to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice.
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9) It is only when all the aforementioned ingredients are satisfied, that the person who had drawn the cheque can be deemed to have committed an offence u/s 138 of NI Act.
10) As per section 114, Indian Evidence Act,1872 which is applicable to communication sent by the post, the court are to presume that in the common course of natural events, the communication would have been delivered at the address of the addressee. Section 27 of the General Clauses Act envisages that when a registered notice is posted , it is presumed to have been served unless rebuttal is given.
11) Final arguments addressed on behalf of both the parties have been heard and carefully considered along with the entire evidence on record.
12) In Kumar Exports Vs. Sharma Carpets, (2009) 2 SCC 513, the Hon'ble Supreme Court, held as under:
"The accused in a trial under Section 138 of the Act has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case the nonexistence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. 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 disprove the nonexistence of consideration and debt by leading direct evidence because the existence of ___________________________________________________________________________________ Ct. Case No. 14940/2016 S. SATVEER SINGH Vs. RAJESH PRASAD Page No. 9 of 15 PS Tilak Nagar U/s. 138 Negotiable Instrument Act negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the 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, upon consideration of which, the Court may either believe that the consideration and debt did not exist or their non existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arising under Sections 118 and 139 of the Act."
13) In M.S Narayana Menon Vs. State of Kerala, (2006) 6 SCC 39, the Apex Court dealing with the statutory presumption under Sections 118(a) and 139 of the N. I. Act inter alia held as under:
"29. In terms of Section 4 of the Evidence Act whenever it is provided by the Act that the Court shall presume a fact, it shall regard such fact as proved unless and until it is disproved. The words "proved" and "dis proved" have been defined in Section 3 of the Evidence Act (the interpretation clause)......
30. Applying the said definitions of "proved" or "disproved" to the principle behind Section 118(a) of the Act, the Court shall presume a negotiable instrument to be for consideration unless and until after considering the matter before it, it either believes that the consideration does not exist or considers the nonexistence of the consideration so probable that a prudent man ___________________________________________________________________________________ Ct. Case No. 14940/2016 S. SATVEER SINGH Vs. RAJESH PRASAD Page No. 10 of 15 PS Tilak Nagar U/s. 138 Negotiable Instrument Act ought, under the circumstances of the particular case, to act upon the supposition that the consideration does not exist. For rebutting such presumption, what is needed is to raise a probable defence. Even for the said purpose, the evidence adduced on behalf of the complainant could be relied upon.
XXX XXX XXX
32. The standard of proof evidently is preponderance of probabilities. Inference of preponderance of probabilities can be drawn not only from the materials on record but also by reference to the circumstances upon which he relies.
XXX XXX XXX Therefore, the rebuttal does not have to be conclusively established but such evidence must be adduced before the Court in support of the defence that the Court must either believe the defence to exist or consider its existence to be reasonably probable, the s standard of reasonability being that of the 'prudent man'."
14) It is a well settled proposition of law that once execution of Negotiable instrument is admitted, the presumption under Section 118(a) NI Act would arise that it is supported by a consideration. However, such presumption is rebuttable and the accused can prove the non-existence of a consideration by raising a probable defence. The burden upon the accused 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. To disprove the presumption, the accused 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, act upon the plea that it did not exist.
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15) The gist of two above mentioned precedents is that the accused is in trial under Section 138 NI Act is left with two alternatives for his defence. He can either show that consideration and debt did not exist for which direct evidence could be adduced which is seldom available or he can show by relying upon circumstantial evidence that under the particular circumstances of the case the nonexistence of consideration and debt is so probable that prudent man ought to suppose that no consideration and debt existed. It is evident that standard of proof to rebut the statutory presumption is not to prove it beyond the reasonable doubt as required in a criminal complaint. The onus to that effect on the accused is not onerous and what is required is a probable defence which could primarily find its foundation in preponderance of probabilities. In order to raise a probable defence, the accused can also rely on the evidence adduced by the complainant. However, a bare denial of the statutory presumption by the accused will not suffice.
16) In present case, accused has admitted his signature and account number with respect to cheque-in-question. The main defence of the accused is that the complainant misused the cheque-in-question by filling extra amount i.e. Rs. 1,50,000/- instead of Rs. 1,00,000/- as mentioned in Ex. CW 1/3. In the defence made by the accused at the time of framing of Notice u/s 251 Cr.P.C., he himself admitted the liability to the tune of Rs. 1,00,000/- by deposing that the complainant misused the cheque-in- question by filling extra amount i.e. Rs. 1,50,000/- instead of Rs. 1,00,000/- as mentioned in Ex. CW 1/3. At the time of recording of statement u/s 313 Cr.P.C. R/w Section 281 Cr.P.C., it is stated by accused that he had taken Rs. 50,000/- and ready to pay the same. Both these statements of the accused are contradictory in itself and ___________________________________________________________________________________ Ct. Case No. 14940/2016 S. SATVEER SINGH Vs. RAJESH PRASAD Page No. 12 of 15 PS Tilak Nagar U/s. 138 Negotiable Instrument Act in both of these statements, the accused admitted his liability to the tune of Rs.1,00,000/- and Rs. 50,000/- respectively. The accused also admitted the giving of cheque-in-question to the complainant. Nothing came out during the cross- examination of the complainant, which creates any doubt on the case of the complainant. The accused also admitted the taking of Rs. 1,00,000/- from the complainant at the time of granting the franchise of R.P. Masale to the complainant and also admitted that the accused would return the security amount of Rs.1,00,000/- in case the product of R.P. Masale not run in the market. Moreover, no evidence has been lead by the accused in his defence despite sufficient opportunities being granted. The reason for not leading the defence evidence may be that if he entered the witness box, truth would be revealed out. Here, the admission of signature and account number has itself creates the presumption u/s 139 of NI Act in favor of 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. 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 the probable defence which creates doubt about the existence of a legally enforceable debt or liability, the prosecution can fail.
17) In the present complaint case, the accused has failed to rebut the presumption raised under section 139 of NI act that such liability do not exist.
18) Ld. Counsel for the complainant relied on several judgments. The proposition of law which has been clearly explained in Bir Singh V. Mukesh Kumar dated 06.02.2019 ___________________________________________________________________________________ Ct. Case No. 14940/2016 S. SATVEER SINGH Vs. RAJESH PRASAD Page No. 13 of 15 PS Tilak Nagar U/s. 138 Negotiable Instrument Act and have been subsequently relied upon by the Apex Court and other Hon'ble Courts is as follows:-
a) That the onus to rebut the presumption u/s 139 of the NI Act that the cheque has been issued in discharge of a debt or liability is on the accused and the fact that the cheque might be post-dated does not absolve the drawer of the cheque of legal consequences.
b) That the bare reading of the provisions of Section 20, Section 87 and Section 139 of the NI Act makes it amply clear that a person who signed the cheque and makes it over to the Payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for a payment of debt or in discharge of a liability. It has also been held that it is immaterial that the cheque may have been filed by any other person other than the drawer if the cheque has been duly signed by the drawer.
c) Even if the blank cheque leaf voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption u/s 139 of the NI Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of any debt.
19) In view of above discussions, this court is of considered view that accused has failed to create reasonable doubt over the veracity of story of complainant by balance of probabilities. It is noticeable that the complainant has to prove his case beyond reasonable doubt only when the accused had rebutted the presumption under section 139 NI Act which the accused has failed to do in the present case.
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20) In upshot of aforesaid discussion, I return finding of conviction of accused Rajesh Prasad for offence u/s 138 of NI Act in this case.
21) Let the copy of judgment be given free of cost to the convict.
22) Let convict be heard on quantum of sentence.
Digitally signed by
MAYANK MAYANK GOEL
GOEL Date: 2023.01.11
16:05:46 +0530
Announced in open court (MAYANK GOEL)
on 11.01.2023 MM(NI ACT)-02/West District
THC Courts/Delhi
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