Delhi District Court
Naveen Bhansali vs Babu Lal Jain Cc No.4593/2010 on 24 November, 2011
IN THE COURT OF SH. RAKESH KUMAR SINGH:
METROPOLITAN MEGISTRATE (NI ACT)-1, CENTRAL:
ROOM NO.-42, TIS HAZARI COURT COMPLEX, DELHI
24.11.2011
Naveen Bhansali vs Babu Lal Jain CC No.4593/2010
JUDGMENT u/s 264 Cr.PC.
The complainant, Karta of Tolaram Bhansali HUF, has filed this complaint on the basis of a dishonoured cheque
of Rs. 2,00,000/- received in lieu of a loan advanced to the accused. The said cheque when dishonoured for insufficient
funds complainant issued a legal demand notice to the accused, however the accused failed to pay the amount. Hence this
complaint. Complainant filed affidavit to establish the ingredients of offence punishable under Section-138 NI Act.
Cheque is Ex. CW1/1, Memo Ex. CW1/2, Legal demand notice is Ex. CW1/3, registry receipts are Ex. CW1/4&5, UPC is
Ex. CW1/6, AD card is Ex. CW1/7 and Reply of accused Ex. CW1/8.
The accused pleaded not guilty and claimed trial. He cross examined the complainant. In the examination under
Section-313 CrPC he raised a defence that he had taken a loan only of Rs. 70,000/- from the complainant and the instant
cheque was given as a security for that loan. He however not led any defence evidence as per his own wish.
Discussion
Relationship is not denied by the accused. Even the loan transaction is not denied by the accused. Accused has
only disputed the amount of laon. It is the case of the accused that he had taken a loan of Rs.70,000/- from the
complainant and issued blank signed cheque for the security of that loan. However, accused never led any evidence to
establish his defence and specifically mada a statement that he does not want to lead defence evidence.
The complainant in his cross-examination remianed unimpeached throughout. Therefore, this can also not help
the accused. In such circumstances, a bare denial of the accused can not be accepted against the mandatory presumptions
of law which is in favour of the complainant.
Non-action on the part of accused in respect of misuse of the blank signed cheque is also going in favour of the
complainant. No person will remain silent if his cheque is not returned by someone or is misused by someone.
In the cross-examination of the complainant, accused asked a question about the execution of promissory note
and the complainant replied in affirmative and offered that he can produce the said documents right now. However, the
accused did not accept the offer of the complainant. Instead, accused given a suggestion to the complainant that the said
documents are forged and fabricated. Complainant denied the suggestion. Accused never tried to justify his suggestion.
Without looking into the documents, accused made a suggestion in respect of forgery the documents. This clearly goes
against the accused.
So far as the defence that other columns were not filled in by the accused, the same can not help. No law requires
that whole body of the cheque must be filled in by the drawer himself (see Ravi Chopra vs State And Anr. on 13 March,
Naveen Bhansali vs Babu Lal Jain CC No.4593/2010 1
2008 decided by Hon'ble High Court of Delhi).
It appears that entire cross-examination of the complainant revolves around the question of link of the
complainant with the payee HUF. Accused tried to suggest that complainant is not the Karta of the said HUF. All such
suggestions were denied by the complainant. Accused has not justified his suggestions by any means. Acceptance of a loan
of Rs.70,000/- and making of reply of the legal demand notice are also going against the accused. Even in the reply Ex.
CW1/8 accused has not disputed the identity of the complainant as Karta of the HUF despite the fact that legal demand
notice was served on behalf of the HUF through its Karta Naveen Bhansali i.e. the present complainant.
It may be noted that an HUF functions through its Karta and there is no role of other family members of that
HUF. Accused in his reply EX.CW1/1 even stated that he wanted to settle the accounts. Accused having accepted the
identity of the complainant at the earliest possible opportunity i.e. at the time of reply, he can now not raise any question
in this regard, particularly when he has not establish anything contrary to this.
So far as the contention that complaint is not instituted in the name of HUF, I find this contention entirly
meritless for a simple reason that the complainant is instituted by the complainant in the position of Karta of HUF.
In the light of above discussion, it is clear that accused has failed to dispute any material or circumstance brought
on record by the complainant. Requirements of Section-138 NI Act being satisfied in the present case, the complaint is
bound to succeed in the absence of any contrary material. Complainant has established his case by way of affidavit
supported by documentary proof discussed above. The mandatory presumptions of law arising under Section-118, 139,
146 NI Act are in favour of the complainant. Accused has failed to rebut the mandatory presumptions of law.
The complaint has to succeed.
The Procedure:
2. Hon'ble High Court of Delhi has laid down the procedure for trial of the offences punishable U/s 138 NI Act in
the case title Rajesh Aggarwal Vs. State decided on 28.07.2010 as follows:
"17. The summary trial procedure to be followed for offences u/s 138 N.I.
Act would thus be as under:
Step I : On the day complaint is presented, if the complaint is accompanied
by affidavit of complainant, the concerned MM shall scrutinize the complaint
& documents and if commission of offence is made out, take cognizance &
direct issuance of summons of accused, against whom case is made out.
Step II : If the accused appears, the MM shall ask him to furnish bail bond to
ensure his appearance during trial and ask him to take notice u/s 251 Cr.
Naveen Bhansali vs Babu Lal Jain CC No.4593/2010 2
P.C. and enter his plea of defence and fix the case for defence evidence,
unless an application is made by an accused under section 145(2) of N.I. Act
for recalling a witness for cross examination on plea of defence.
Step III : If there is an application u/s 145(2) of N.I. Act for recalling a
witness of complainant, the court shall decide the same, otherwise, it shall
proceed to take defence evidence on record and allow cross examination of
defence witnesses by complainant.
Step IV : To hear arguments of both sides.
Step V : To pass order/judgment."
Retrospective effect of the amended provisions:
Law in respect of retrospective effect of amended provisions in the NI Act has already been settled by
the Hon'ble Supreme Court holding that Section-143 to 147 NI Act shall be applicable even to the cases pending on the
date when these provisions came into effect.
It is apt to quote Hon'ble Supreme Court in M/s Mandvi Co-op Bank Ltd vs Nimesh B thakore,
(2010) 3 SCC 83:
"28. Mr. Ranjit Kumar also made a feeble attempt to contend that the provisions of
sections 143 to 147 inserted in the Act with effect from February 6, 2003 would
operate prospectively and would not apply to cases that were pending on that date. The
High Court has considered the issue in great detail and has rightly taken the view that
the provisions of sections 143 to 147 do not take away any substantive rights of the
accused. Those provisions are not substantive but procedural in nature and
would, therefore, undoubtedly, apply to the cases that were pending on the date
the provisions came into force. We are fully in agreement and in order to buttress the
view taken by the High Court we will only refer to a decision of this court."
In case titled Gurpreet Singh Vs. M/s. Ranbaxy Laboratories Ltd. & decided on 02 August, 2010, Hon'ble High
Court of Delhi has observed and held as under:
"3. I have perused the orders passed by learned MM after summoning of accused. A
perusal of these orders would show that the learned MM proceeded with the case
as if it was a summon trial case and after issuing notice asked the complainant to
again lead evidence despite the fact that the evidence by way of affidavit of
complainant was already on record. The Legislature has specifically made offence
under Section 138 of the Negotiable Instruments Act as a summary trial and once the
accused is summoned, he has to state his plea and state his defence in terms of Section
Naveen Bhansali vs Babu Lal Jain CC No.4593/2010 3
263 (g) read with Section 251 Cr.P.C. The summary trial proceedings can be converted
to summon trial case only under two circumstances, firstly when the Court comes to a
conclusion that the sentence of one year would be inadequate and it was a case where
sentence of more than one year may be required to be awarded, secondly when the MM
is of the view for some reason (to be recorded) that the case should be tried as a
summon trial. In the present case none of the two things happened. The learned MM
did not pass an order as to why the case was to be converted to a summon trial. The
learned MM was bound to follow procedure of summary trial and was bound to treat
the affidavit and evidence already filed by the complainant on record as the evidence
sufficient to convict the accused unless accused had pleaded a tenable defence and
accused was prepared to prove the defence. The learned MM therefore went wrong
in posting the case repeatedly for complainant's evidence, without asking the
accused/petitioner as to what was the his defence. Since the learned trial court
committed a grave error in treating this case as a summon trial case, the order of
learned MM suffered from jurisdictional error and was liable to be set aside in
revision............Directions are hereby given to learned MM to treat the present case as a
summary trial case and the complainant's evidence, already given during inquiry at pre-
summoning stage should be treated as evidence at post-summoning stage in terms of
Section 145 of Negotiable Instruments Act and in terms of Section 263(2) of Cr.P.C
(summary trial proceedings) and the petitioner should be asked to lead evidence in
defence. (See judgment titled "Rajesh Aggarwal v State and another Crl.M.C. 1996 of
2010 decided on 28th July, 2010)."
In M/S. KALUCHA PAPER HOUSE & ANR. Vs. M/S. MAHAVIR PAPERS & ANR. Criminal M.C. No.3687
of 2009 & C.M. Appl. No.12526 of 2009 decided on 02.08.2010, Hon'ble High Court of Delhi has held that:
"2. Both the above cited cases relied upon by the petitioners are of the period when
amendment to Negotiable Instruments Act had not been made and the cases under
Negotiable Instruments Act were summon trial cases. However, after the amendment in
Negotiable Instruments Act, the cases under Negotiable Instruments Act are summary
trial cases and in view of the judgment of this court passed in Criminal M.C. No.1996
of 2010 titled Rajesh Aggarwal Vs. State & Anr. dated 28th July, 2010, the procedure
being followed by learned Metropolitan Magistrate in this case was not a correct
procedure. The witnesses of the complainant could not have been recalled unless
the petitioner had made an application under Section 145 (2) of Negotiable
Instruments Act and had taken a specific plea why he was not liable to pay the
cheque amount. The procedure being following by the learned trial court of
repeatedly fixing the complaint case again for evidence was, therefore, faulty and not
in accordance with provisions of summary trial as given in Criminal Procedure Code
and Negotiable Instruments Act.
Naveen Bhansali vs Babu Lal Jain CC No.4593/2010 4
3. I consider that the trial under Section 138 of Negotiable Instruments Act is
mandatorily to be proceeded in a summary manner and it is the accused who has to
disclose his defence and make an application before the trial court as to why he wants
to recall the complainant or other witnesses for cross-examination. The evidence
adduced before summoning has to be considered sufficient during trial and unless an
application is made under Section 145 (2) of the Negotiable Instruments Act, there is
no provision for re-examining complainant witnesses. I, therefore, consider that this
case is required to be sent back for trial according to law as laid down by this court in
Rajesh Aggarwal's case (supra)."
Hon'ble High Court of Delhi in Ishan Systems Pvt. Ltd. & Ors. Vs. Vijaya Bank, Crl.MC 3871/2010, dt.
27.01.2011, has observed that:
"3. This Court in Rajesh Agarwal v State & Another 171(2010) DLT 51 had
made it categorically clear that when summons are issued by the court of MM
under Section 138 NI Act, the accused at the time of taking notice under Section
251 Cr.P.C. has to disclose his defence to the court of MM and if the accused
does not want to lead evidence in support of his defence, the court will decide the
complaint on the basis of evidence of complainant and on the basis of defence
raised by the accused, whether the accused was liable to be convicted or not. The
proceedings under Section 138 of NI Act are summary in nature and the accused
has to disclose to the court of MM his defence and the court of MM is competent
enough to decide whether the accused is liable to be convicted under Section on
138 NI Act or not in light of defence raised by him. The accused instead of
disclosing his defence to the court of MM cannot approach this Court and disclose his
defence to this Court and ask to quash the complaint under Section 138 of NI Act in
view of the defence disclosed to this Court. In India, we have division of work in the
courts. The High Court cannot transport the cases triable by the Magistrate to itself
in the garb of exercising jurisdiction under Section 482 Cr.P.C and start deciding
whether a complaint under Section 138 NI Act was maintainable or not. In fact, the
Magistrates are appointed for this very purpose only. It is the MM who has to exercise
this jurisdiction and to decide, after disclosure of defence by the accused, whether the
complaint was maintainable or not. It is only when the accused is not satisfied with
the decision of the Magistrate, the remedy of appeal, revision etc lies. No accused can
ask the High Court to transport the complaint to itself and adjudicate upon whether
the complaint was maintainable in light of the defence raised by him for the first time
before the High Court, when he could very well raise the same defence before the
court of learned MM."
In ORG INFORMATICS LTD. Vs STATE & ANR. Crl. M. C. No.2409/2011 decided on 01.08.2011 Hon'ble
High Court of Delhi has held that:
Naveen Bhansali vs Babu Lal Jain CC No.4593/2010 5
11. At the outset, it may be pertinent here to mention that although Section 482 Cr.P.C.
starts with a non obstante clause and reiterates powers of the High Court to pass any
order to prevent the abuse of process of law or to pass any such order to secure the ends
of justice, is not conditioned or curtailed by any provision but still Court has the
discretion to see whether the invocation of Section 482 Cr.P.C. is justified or not. It
means that even if a party has preferred a revision petition under Section 397 Cr.P.C., he
can still prefer a petition under Section 482 Cr.P.C. if the ingredients for the application
of Section 482 Cr.P.C. are satisfied, namely, the fact that the situation is such which
would warrant the interference by the High Court for the purpose of preventing the
abuse of processes of law or to secure the ends of justice. In the instant case, I do not
find that there is any possibility of interference by the High Court as there is no abuse of
processes of law nor does any order require to be passed that is contrary to the one
which has been passed by the Sessions Court which directed the petitioners to seek a
recall of witnesses under Section 145 (2) of the Negotiable Instrument Act for the
purpose of establishing his defence. It may also be pertinent here to mention that Section
397 sub clause 3 of Cr.P.C. prohibits a party from filing a second revision petition. The
present petitioners have already chosen to file a petition before the Sessions Court and
having done so, they are prohibited from filing a second revision petition even though it
has been termed as a petition under section 482 Cr.P.C. Having said so, a perusal of the
provisions under Section 143 read with Section 145 of the Negotiable Instrument Act
would make it amply clear that the concern of the legislature, while incorporating
Section 143 and 145 by way of amendment w.ef. 06.02.2003, was essentially to curtail
the delay which was occurring in the disposal of these complaints under Section 138 of
the Negotiable Instrument Act. The mandate of the law was that the case should be tried
summarily as far as possible and further, the trial should be conducted on day to day
basis and preferably be disposed of within a period of six months. In the instant case, the
entire effort of the petitioners seems to be to scuttle the trial and indulge in dilatory
tactics. The petitioners had already brought the matter before the High Court earlier in
the first round and when, it was disposed of by Hon'ble Mr. Justice A. K. Pathak on
29.09.2010. In the present case also the learned Additional Sessions Judge has
specifically observed that no prejudice is likely to be caused to the petitioners in the, the
trial proceeds according to summary procedure and the only thing that is to be done by
the present petitioner is to file their statement of defence and then seek a recall of the
complainant/respondent witness for the purpose of cross-examination as the
complainant has already made a statement that the evidence which has been filed by
way of affidavit at the stage of pre summoning may also be treated as evidence at the
stage of post summoning and therefore, in my considered view the only purpose of
filing the present petition is to indulge in dilatory tactics, which cannot be permitted by
the Court. The plea that the learned Trial Court has reviewed its own order or that the
Naveen Bhansali vs Babu Lal Jain CC No.4593/2010 6
judgment title Rajesh Agarwal case (Supra) has been applied retrospectively have
already been dealt with by the Sessions Court. I feel that it need not be gone into afresh
by this Court. "
Clearly, it is immaterial that the case was instituted prior to the pronouncement of judgment in Rajesh
Agarwal (supra). As long as evidence by way of affidavit given at the pre summoning stage is available on record, the
same can be read in evidence in the trial by virtue of Section-145(1) NI Act and therefore accused has to disclose and
prove his defence. Provisions being procedural in nature can apply with retrospective effect as held by the Hon'ble
Supreme Court in Mandavi (supra) and matter can not be fixed for post summoning complainant's evidence as held by the
Hon'ble High court of Delhi in Gurpreet Singh (supra) and M/s Kalucha Papers(supra).
In view of these authoritative pronouncements, I am inclined to hold that no one can claim that the case
was instituted prior to the pronouncement of judgment in Rajesh Agarwal (supra), ratio of Rajesh Aggarwal (Supra)
cannot be made applicable to the present proceedings. The ratio has to be applied.
3. Consequentely, this judgment.
Discussion on Legal provisions:
4. There are some mandatory presumptions of law arising in favour of the complainant. The same may be
summarized as under:
4.1 Section-118 of Negotiable Instruments Act reads as under:
"118. Presumptions as to negotiable instruments.-
Until the contrary is proved, the following presumptions 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, endorsed,
negotiated or transferred, was accepted, endorsed, negotiated or transferred for
consideration;"
Presumptions are:
i. Cheque was drawn for consideration;
ii. Cheque was transferred for consideration;
iii. Cheque was accepted for consideration.
4.2. Section-139 of Negotiable Instruments Act reads as under:
Naveen Bhansali vs Babu Lal Jain CC No.4593/2010 7
"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."
Presumptions are:
i. Holder of the cheque has lawfully received the cheque, meaning thereby that the
holder was in lawful possession of the cheque;
ii. The cheque was given in discharge of any debt or liability;
iii. Legally enforceable debt or liability was in existence at the time of issuance of the
cheque;
(contrary view has been overruled by the three judges bench of Hon'ble Supreme Court in
Rangappa vs S. Mohan (2010) 11 SCC 441) with the observation:
"In light of these extracts, we are in agreement with the
respondent-claimant that the presumption mandated by
Section 139 of the Act does indeed include the existence
of a legally enforceable debt or liability. To that extent,
the impugned observations in Krishna Janardhan Bhat
(supra) 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.")
iv. The cheque was of the nature as described in section-138;
v. The cheque was drawn by the person who was maintaining the account pertaining
to the cheque;
vi. Amount of money mentioned in the cheque was intended to be given;
4.3. Section-146 of Negotiable Instruments Act reads as under:
"146. Bank's slip prima facie evidence of certain facts.-
The court shall, in respect of every proceeding under this Chapter, on production of
bank's slip or memo having thereon the official mark denoting that the cheque has
been dishonoured, presume the fact of dishonour of such cheque, unless and until such
fact is disproved."
Naveen Bhansali vs Babu Lal Jain CC No.4593/2010 8
Presumptions are:
i. The cheque has been dishonoured;
ii. The cheque has been so dishonoured for the reason mentioned in the memo.
On mere explanation, denial and minor inconsistencies:
5. Without any doubt, in a criminal case, the prosecution has to stand on its own lags. No blemishes in the story of
the accused will give a right to the complainant to claim that he has establish his case. Even accused can always rely upon
the material and circumstances brought on record by the complainant. However, there must be something more than a bare
denial or a mere explanation.
5.1. It is a settled law that a mere denial of passing off consideration is not sufficient. In Bharat Barrel & Drum
Manufacturing Company v. Amin Chand Pyarelal, (1993) 3 SCC 35 (Para. 12) it has been held that:
"Upon consideration of various judgments as noted herein above, the position of law which
emerges is that once execution of the promissory note is admitted, the presumption under
Section 118(a) would arise that it is supported by a consideration. Such a presumption is
rebuttable. The defendant can prove the non-existence of a consideration by raising a
probable defence. If the defendant is proved to have discharged the initial onus of proof
showing that the existence of consideration was improbably or doubtful or the same was
illegal, the onus would shift to the plaintiff who will be obliged to prove it as a matter of fact
and upon its failure to prove would disentitle him to the grant of relief on the basis of the
negotiable instrument. The burden upon the defendant of proving the non-existence of the
consideration can be either direct or by bringing on record the preponderance of probabilities
by reference to the circumstances upon which he relies. In such an event, the plaintiff is
entitled under law to rely upon all the evidence led in the case including that of the plaintiff
as well. In case, where the defendant fails to discharge the initial onus of proof by showing
the non-existence of the consideration, the plaintiff would invariably be held entitled to the
benefit of presumption arising under Section 118(a) in his favour. The court may not insist
upon the defendant to disprove the existence of consideration by leading direct evidence as
the existence of negative evidence is neither possible nor contemplated and even if led, is to
be seen with a doubt. The bare denial of the passing of the consideration apparently does
not appear to be any defence. Something which is probable has to be brought on record
for getting the benefit of shifting the onus of proving to the plaintiff. To disprove the
presumption, the defendant has to bring on record such facts and circumstances upon
consideration of which the court may either believe that the consideration did not exist
or its non-existence was so probable that a prudent man would, under the
circumstances of the case, act upon the plea that it did not exist."
Naveen Bhansali vs Babu Lal Jain CC No.4593/2010 9
5.2. In the present case, no such circumstances have been brought on record which suggest the inference that
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.
5.3. Further, a mere explanation given by the accused is also not sufficient. In case titled V S Yadav vs Reena CrLA
No. 1136/2010 decided on 21.09.2010, Hon'ble High Court of Delhi has observed that:
"3. The appellant had taken a stand that no reply to the notice of legal demand
was sent by the respondent, instead, envelopes with blank sheets in it were sent by
the respondent. In her examination under Section 281 Cr. P.C. she did not deny
issuance of cheques, but, took a defence that cheque were issued as security for
seeking loan but no loan was advanced and the cheques were therefore without
consideration. The learned MM observed that conviction under Section 138 of
N.I. Act cannot be made acting on evidence of complainant and considering the
presumption under Section 139 of N.I. Act. The complainant has to prove beyond
reasonable doubt the debt or liability of the accused. Learned MM observed
that complainant had not specified the date of giving loan and a reasonable
man would remember the date of giving substantial sum of money as loan to
other and this blissful forgetness of the date by the complainant raised doubt
about the liability of the accused, more so, in view of the stand taken by the
accused that the cheques were issued as security and the same were never
returned.
*******
5. It must be borne in mind that the statement of accused under Section 281 Cr. P.C. or under Section 313 Cr. P.C. is not the evidence of the accused and it cannot be read as part of evidence. The accused has an option to examine himself as a witness. Where the accused does not examine himself as a witness, his statement under Section 281 Cr. P.C. or 313 Cr. P.C. cannot be read as evidence of the accused and it has to be looked into only as an explanation of the incriminating circumstance and not as evidence. There is no presumption of law that explanation given by the accused was truthful. In the present case, the accused in his statement stated that he had given cheques as security. If the accused wanted to prove this, he was supposed to appear in the witness box and testify and get himself subjected to cross examination. His explanation that he had the cheques as security for taking loan from the complainant but no loan was given should not have been considered by the Trial Court as his evidence and this was liable to be rejected since the accused did not appear in the witness box to dispel the presumption that the cheques were issued as security. Mere suggestion to the witness that cheques were issued as security or mere explanation given in the statement of accused under Section 281 Cr. P.C., that the cheques were issued as Naveen Bhansali vs Babu Lal Jain CC No.4593/2010 10 security, does not amount to proof. Moreover, the Trial Court seemed to be obsessed with idea of proof beyond reasonable doubt forgetting that offence under Section 138 of N.I. Act was a technical offence and the complainant is only supposed to prove that the cheques issued by the respondent were dishonoured, his statement that cheques were issued against liability or debt is sufficient proof of the debt or liability and the onus shifts to the respondent/ accused to show the circumstances under which the cheques came to be issued and this could be proved by the respondent only by way of evidence and not by leading no evidence.
*******
7..............The Trial Court in this case turned a blind eye to the fact that every accused facing trial, whether under Section 138 of N.I. Act or under any penal law, when charged with the offence, pleads not guilty and takes a stand that he has not committed the offence. Even in the cases where loan is taken from a bank and the cheques issued to the bank stand dishonoured, the stand taken is same. Mere pleading not guilty and stating that the cheques were issued as security, would not give amount to rebutting the presumption raised under Section 139 of N.I. Act. If mere statement under Section 313 Cr. P.C. or under Section 281 Cr. P.C. of accused of pleading not guilty was sufficient to rebut the entire evidence produced by the complainant/ prosecution, then every accused has to be acquitted. But, it is not the law. In order to rebut the presumption under Section 139 of N.I. Act, the accused, by cogent evidence, has to prove the circumstance under which cheques were issued. It was for the accused to prove if no loan was taken why he did not write a letter to the complainant for return of the cheque. Unless the accused had proved that he acted like a normal businessman/prudent person entering into a contract he could not have rebutted the presumption u/s 139 N.I. Act. If no loan was given, but cheques were retained, he immediately would have protested and asked the cheques to be returned and if still cheques were not returned, he would have served a notice as complainant. Nothing was proved in this case."
5.4. In Rangappa(supra), the case of the accused was that of a lost cheque. However initially, the High Court dealing with matter had held that:
'6. Once the cheque relates to the account of the accused and he accepts and admits the signatures on the said cheque, then initial presumption as contemplated under Section 139 of the Negotiable Instruments Act has to be raised by the Court in favour of the complainant. The presumption referred to in Section 139 of the N.I. Act is a mandatory presumption and not a general presumption, but the accused is entitled to rebut the said presumption. What is required to be established by the accused in order to rebut the presumption is different from each case under given circumstances. But the fact remains that a mere plausible Naveen Bhansali vs Babu Lal Jain CC No.4593/2010 11 explanation is not expected from the accused and it must be more than a plausible explanation by way of rebuttal evidence. In other words, the defence raised by way of rebuttal evidence must be probable and capable of being accepted by the Court. The defence raised by the accused was that a blank cheque was lost by him, which was made use of by the complainant. Unless this barrier is crossed by the accused, the other defence raised by him whether the cheque was issued towards the hand loan or towards the amount spent by the complainant need not be considered. ...' The judgment of conviction upon the above basis recorded by the Hon'ble High Court was finally upheld by the Hon'ble Supreme Court in Rangappa (supra).
It was further held in Rangappa (supra) as under:
"Coming back to the facts in the present case, we are in agreement with the High Court's view that the accused did not raise a probable defence. As noted earlier, the defence of the loss of a blank cheque was taken up belatedly and the accused had mentioned a different date in the 'stop payment' instructions to his bank. Furthermore, the instructions to 'stop payment' had not even mentioned that the cheque had been lost. A perusal of the trial record also shows that the accused appeared to be aware of the fact that the cheque was with the complainant. Furthermore, the very fact that the accused had failed to reply to the statutory notice under Section 138 of the Act leads to the inference that there was merit in the complainant's version. Apart from not raising a probable defence, the appellant-accused was not able to contest the existence of a legally enforceable debt or liability. The fact that the accused had made regular payments to the complainant in relation to the construction of his house does not preclude the possibility of the complainant having spent his own money for the same purpose. As per the record of the case, there was a slight discrepancy in the complainant's version, in so far as it was not clear whether the accused had asked for a hand loan to meet the construction-related expenses or whether the complainant had incurred the said expenditure over a period of time. Either way, the complaint discloses the prima facie existence of a legally enforceable debt or liability since the complainant has maintained that his money was used for the construction-expenses. Since the accused did admit that the signature on the cheque was his, the statutory presumption comes into play and the same has not been rebutted even with regard to the materials submitted by the complainant. "
On requirement to establish the fact within special knowledge:
5.5. In Rajesh Agarwal vs State decided on 28.07.2010, Hon'ble High Court of Delhi has observed that:
Naveen Bhansali vs Babu Lal Jain CC No.4593/2010 12 "9. An argument is raised that the accused, under Article 21 of Constitution of India, has a right of silence in a criminal trial and therefore he cannot be forced to disclose his defence. This argument is misconceived in view of Section 106 of Indian Evidence Act.
Since an offence under section 138 of Negotiable Instrument Act is technical in nature and defence which an accused can take are inbuilt, like the cheque was given without consideration, the accused was not Director at that time, accused was a sleeping partner or a sleeping Director, cheque was given as a security etc. etc., the onus of proving these defences is on the accused alone, in view of section 106 of Evidence Act. Since the mandate of Legislature is trial of such cases in a summary manner, the evidence already given by the complainant by way of affidavit is sufficient proof of the offence and this evidence is not required to be given again in terms of section 145(1) of N.I. Act and has to be read during the trial. The witnesses i.e. the complainant or other witnesses can be recalled only when accused makes an application and this application must disclose the reason why accused wants to recall the witnesses and on what point witness is to be cross examined. One must not forget that the offence under section 138 of N.I. Act is not of the kind of offence as in IPC where the State prosecutes a person for offence against the society. The offence under section 138 of N.I. Act is an offence in the personal nature of the complainant and it is an offence made under N.I. Act so that the trust in commercial transactions is not destroyed because of the dishonour of cheques. When it is within the special knowledge of the accused as to why he is not to face trial under section 138 N.I. Act, he alone has to take the plea of defence and burden cannot be shifted to complainant. There is no presumption that even if an accused fails to bring out his defence, he is still to be considered innocent. If an accused has a defence against dishonour of the cheque in question, it is he alone who knows the defence and responsibility of spelling out this defence to the court and then proving this defences is on the accused. I, therefore, consider that the proper procedure to be followed by MM is that soon after summoning, the accused must be asked to disclose his defence & his plea should be recorded. Where an accused takes no defence and simply says "I am innocent", there is no reason for the MM to recall the complainant or witnesses during summary trial and the evidence already given by the complainant has to be considered sufficient and the trial court can ask the accused to lead his evidence in defence on the plea of innocence as the evidence of the complainant is already there. In a summary trial, a complainant or his witness cannot be recalled in the court for cross examination only for the sake of pleasure. Once the complainant has brought forward his case by giving his affidavit about the issuance of cheque, dishonour of cheque, issuance of demand notice etc., he can be cross examined only if the accused makes an application to the court as to on what point he wants to cross examine the witness (es) and then only the court shall recall the witness by recording reasons thereto."
Naveen Bhansali vs Babu Lal Jain CC No.4593/2010 13 Result:
6. I accordingly return a finding of guilt against the accused person.
7. The accused Babu Lal Jain is hereby convicted for the offence as punishable under Section-138 NI Act, 1881 charged in the present complaint case.
8. Let the convict be heard on the point of sentence.
9. A copy of this order be placed on the official website of the District Court.
(Rakesh Kumar Singh)
MM(NI Act)-01, Central
24.11.2011
Naveen Bhansali vs Babu Lal Jain CC No.4593/2010 14