Delhi District Court
Kawal Kharbanda vs . Sanjana Bhola Cc No.21969/19 Page No. 1 ... on 18 February, 2020
IN THE COURT OF MR. PRANAT KUMAR JOSHI, METROPOLITAN
MAGISTRATE, SOUTHWEST, DWARKA, NEW DELHI
In Re:
CNR No. DLSW02305812017
CC No. 21969/17
Kawal Kharbanda
S/o Sh. K L Kharbanda
R/o 15/01, Subhash Nagar,
New Delhi ........... Complainant
Versus
Ms. Sanjana Bhola
W/o Sh. Rakesh Bhola
R/o B E 74, Hari Nagar
Near Ram Garia Gurudwara
New Delhi 110059 ............. Accused
(1) Offence complained of or
proved : 138 N.I. Act
(2) Plea of accused : Pleaded not guilty
(3) Date of registration of case : 01.11.2017
(4) Date of conclusion of arguments : 14.02.2020.
(5) Date of Final Order : 18.02.2020
(6) Final Order : Acquitted
Kawal Kharbanda Vs. Sanjana Bhola CC No.21969/19 Page no. 1 of 18
JUDGMENT
1. Vide this judgement I shall dispose off the present complaint case filed under section 138, Negotiable Instrument Act, 1881 (hereinafter referred to as 'the Act').
2. Dehors unnecessary details, the factual matrix of the prosecution case is as follows: 2.1 The husband of the accused being friend of the complainant approached complainant for a friendly loan of ₹10,00,000/ (Rupees Ten lac only). Due to the friendly relations the complainant granted the same to the husband of accused in presence of wife of the accused for five months.
2.2 On instructions of husband of the accused, accused in discharge of her legal liability of ₹ 10,00,000/ issued a cheque bearing number 554120, dated 20.09.2017 for ₹ 10,00,000/ drawn on SBI Branch, Subhash Nagar, New Delhi in favour of the complainant.
2.3 As per the advice and instructions of the accused, the complainant presented the aforementioned cheque before his banker for encashment but the aforementioned cheque was returned unpaid with the reason 'Payment Stopped by Drawer' vide cheque returning memo dated 21.09.2017.
2.4 Thereafter the complainant issued a legal notice dated 29.09.2017 to the accused, through his advocate under section 138 of the act. The legal notice was Kawal Kharbanda Vs. Sanjana Bhola CC No.21969/19 Page no. 2 of 18 duly served upon the accused. The accused had failed to make the payment of cheque amount within 15 days of receipt of the same. Thus, the present complaint case.
3. The present complaint case was registered on 01.11.2017 and the pre summoning evidence was led by the complainant on the same day. After considering the presummoning evidence by affidavit and the documents placed on record by the complainant, the court was pleased to summon the accused vide its order passed on the same day.
4. The accused entered the appearance on 01.02.2019. Notice U/s 251 of the Code Of Criminal Procedure (hereinafter referred to as the Code) was framed against the accused on the same day, to which the accused pleaded not guilty and claimed trial. Plea of defence of the accused was recorded simultaneously wherein the accused admitted his signatures on the impugned cheque and denied having filled the particulars therein. The accused denied his liability towards the complainant.
5. Thereafter, an application U/s 145(2) of the Act by the accused was allowed on 09.09.2019 the matter was thereafter fixed for crossexamination of the complainant.
6. Despite number of opportunities granted to the complainant to lead CE, he failed to lead CE. Consequently, the opportunity for the complainant to lead CE was closed vide order dated 29.01.2020. The Statement of accused under Section 313 of the Code was dispensed with since no evidence was lead by the complainant. The Kawal Kharbanda Vs. Sanjana Bhola CC No.21969/19 Page no. 3 of 18 matter was accordingly fixed for DE.
7. Accused chose not to lead DE and the DE was closed vide separate statement of the accused and the matter was fixed for final arguments.
8. The final arguments in full were heard at length by me from the accused on 14.02.2020 and the opportunity for the same was closed for the complainant due to his regular absence in the present matter.
9. Now as far as the legally enforceable liability of the accused towards the complainant is concerned, nothing has been argued on behalf of the complainant as no one had appeared on behalf of the complainant even at the stage of final arguments. Consequently, the opportunity for the complainant to address final arguments was closed.
10. However, it has been argued on behalf of the accused that the complainant has not led any evidence in support of his case and has not even stepped into the witness box. Further, it has been argued that the complainant did not even appear to address the final arguments. This conduct of the complainant, it is argued, shows that the present case has no merit and is a false case as the complainant has failed to establish his case. It is further argued that the accused has been successfully able to rebut the initial presumption which vests upon the complainant.
11. I have heard the Ld. Counsel for the accused and gone through the materials placed before me in the present case.
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12. Before adverting to scanning the evidence under the lens of the law pertaining to the lis at hand, let us revisit the legal benchmark to be satisfied, enunciated in Section 138 of the Act : Dishonour of Cheque for insufficiency, etc. of funds in the account:
Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may extend to [two] years, or with fine which may extend to twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall apply unless
--
(a) the cheque has been presented to the bank within a period of Kawal Kharbanda Vs. Sanjana Bhola CC No.21969/19 Page no. 5 of 18 six months* from the date on which it is drawn or within the period of its validity, whichever is earlier;
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, [within thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque within fifteen days of the receipt of the said notice.
Explanation.--For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability.
13. Thus, the essential ingredients that can be culled out from the statutory provision are:
(i) Person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account;
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(ii) The cheque should have been issued for the discharge, in whole or in part, of any debt or other liability;
(iii)That cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier;
(iv)That cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank;
(v) The payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 30 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;
(vi) The drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice.
14. Being cumulative, it goes without saying that it is only when all the aforementioned ingredients are satisfied, the person who had drawn the cheque can be deemed to have committed an offence under Section 138 of the Act.
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15. I would now appreciate the facts in the light of the law mentioned above:
(i) Person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account;
As far as the first ingredient of Section 138 of the Act is concerned, it is nowhere disputed that the accused had drawn the cheque on the account maintained by her. So, the first ingredient stands satisfied in the light of admissions of the accused by necessary implications.
16. (ii) The cheque should have been issued for the discharge, in whole or in part, of any debt or other liability;
Let us now examine the evidence placed on record by both the parties in order to satisfy the second ingredient of the offence. In order to correctly appreciate this ingredient in the light of the evidence placed on record by both the parties, it is necessary to revisit the provision under Section 118 and Section 139 of the Act.
Section 118 of the Act inter alia provides: Presumptions as to negotiable instruments:
Until the contrary is proved, the following presumptions shall be Kawal Kharbanda Vs. Sanjana Bhola CC No.21969/19 Page no. 8 of 18 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, indorsed, negotiated or transferred for consideration;
Section 139 of the Act provides: "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"
17. It is clear from the conjoint reading of the both the provisions that ordinarily in the Cheque dishonouring cases, what the courts ought to consider is whether the ingredients of the offence enumerated in Section 138 of the Act have been met and if so, whether the accused was able to rebut the statutory presumption contemplated by Section 139 of the Act.
18. 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.
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19. As far as standard of proof required to rebut the presumption raised under Ss.118 and 139 of the Act is concerned, it has been laid down in the number of judgments rendered by the Hon'ble Supreme Court of India that a defence of non existence of liability or the cheque being given as a security, cannot be taken at the mere ipse dixit of the accused. The accused has to prove his innocence either by adducing his own evidence or by punching holes in the case of the complainant.
20. It was held by Hon'ble Supreme Court in the case titled as Rangappa v. Sri Mohan (2010) 11 SCC 441 that: "26. In the 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 may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it is based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttal 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 Kawal Kharbanda Vs. Sanjana Bhola CC No.21969/19 Page no. 10 of 18 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 defendantaccused cannot be expected to discharge an unduly high standard of 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 doubts 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."
21. In the present case, the accused has mainly one defence that he did not issue the subject cheque in favour of the complainant in discharge of any legal liability Kawal Kharbanda Vs. Sanjana Bhola CC No.21969/19 Page no. 11 of 18 and the same was issued as security for becoming the member of the committee run by the complainant. The accused had stated the said fact in his statement of defence under Section 251 of the Code.
22. Let us now examine the evidence placed on record. It is quite strange that the complainant had never appeared in the present case ever since the present matter was listed for CE. The complainant was given a number of opportunities to lead CE before his opportunity to lead CE was closed. The complainant did not even lead his evidence in chief. Merely placing a dishonoured cheque on record is not sufficient to prove the existence of legal liability. It is a settled law that the accused may rebut the presumption regarding liability either by leading evidence or from the case of complainant in the light of accompanying circumstances. In the present case the complainant had evaded the trial ever since its inception which only goes on to show that the complainant was aware that he would not be able to prove his case.
23. Now coming over to the defence of the accused, he has stated in his statement of defence under Section 251 of the Code and in his statement of explanation under Section 313 of the Code that he had given the subject cheques for the purpose of security for becoming a member of the committee run by the complainant. The accused had denied legal liability towards the complainant. This defence set up by the accused has gone unrebutted, unblemished and uncontroverted right uptill the conclusion of the present trial. The complainant, due to his continued absence created a doubt in the merit of his case.
24. At this juncture it is profitable to refer to a case law on the point under Kawal Kharbanda Vs. Sanjana Bhola CC No.21969/19 Page no. 12 of 18 discussion. The Hon'ble Supreme Court in Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513 held that: "20. 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 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 Kawal Kharbanda Vs. Sanjana Bhola CC No.21969/19 Page no. 13 of 18 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 to 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.
21. The accused has also an option to prove the nonexistence of consideration and debt or liability either by letting in evidence or in some clear and exceptional cases, from the case set out by the complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial. Once such rebuttal evidence is adduced and accepted by the court, having regard to all the circumstances of the case and the preponderance of probabilities, the evidential burden shifts back to the complainant and, therefore, the presumptions under Sections 118 and 139 of the Act will not again come to the complainant's rescue."
Both the paras of the aforesaid judgment make it absolutely clear that the accused in a cheque dishonour case need not even step into the witness box and he may rely upon the material produced by the complainant in order to show a Kawal Kharbanda Vs. Sanjana Bhola CC No.21969/19 Page no. 14 of 18 preponderance of probabilities in his favour which would suffice to shift the burden onto the complainant. Moreover, what has been held in above judgment is that once the burden has been shifted by the accused to the complainant, the initial presumption under Section 119 and Section 139 of the Act will not come to the aid of the complainant. Furthermore, it is a cardinal canon of criminal jurisprudence that the primary burden of proving the case rests upon the complainant and that the case of the complainant should stand on his own legs.
25. In the present complaint, the case brought forth by the complainant is in itself doubtful for the reasons stated above. Even in the absence of the defence of the accused, the complainant has failed to prove his case beyond reasonable doubts.
26. In the light of above discussion and case laws discussed supra, I have no doubt in holding that the complainant has utterly failed to prove that there was an existing legally enforceable liability of Rs. 10,00,000/ upon the accused towards the complainant. In order to opine as above I rely upon the rules of evidence enunciated under Section 106 of the Indian Evidence Act, 1872 which provides: When any fact is specially within the knowledge of any person, the burden of proving that fact is upon him.
Also, Section 103 of the Indian Evidence Act, 1872 which provides that: The burden of proof as to any particular fact lies on that person who wishes the court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person.
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27. In sum and substance, the accused has been able to successfully punch holes in the case of the complainant. Moreover, it is clear from the lucid judgment rendered by the Hon'ble Supreme Court, in Bharat Barrel & Drum mfg. Co. v. Amin Chand Pyarelal (1999) 3 SCC 35: "We are of the view that where, in a suit on a promissory note, the case of the defendant as to the circumstances under which the promissory note was executed is not accepted, it is open to the defendant to prove that the case set up by the plaintiff on the basis of the recitals in the promissory note, or the case set up in suit notice or in the plaint is not true and rebut the presumption under S.118 by showing a preponderance of probabilities in his favour and against the plaintiff. He need not lead evidence on all conceivable modes of consideration for establishing that the promissory note is not supported by any consideration whatsoever. The words 'until the contrary is proved' in S.118 do not mean that the defendant must necessarily show that the document is not supported by any form of consideration but the defendant has the option to ask the court to consider the nonexistence of consideration so probable that a prudent man ought, under the circumstances of the case, to act upon the supposition that consideration did not exist (emphasis supplied). Though the evidential burden is initially placed on the defendant by virtue of S.118 it can be rebutted by the defendant by showing a preponderance of probabilities that such consideration as stated in the pronote, or in the suit notice or in the plaint does not exist and once the presumption is so rebutted, the said presumption 'disappears'. For the Kawal Kharbanda Vs. Sanjana Bhola CC No.21969/19 Page no. 16 of 18 purpose of rebutting the initial evidential burden, the defendant can rely on direct evidence or circumstantial evidence or on presumptions of law or fact. Once such convincing rebuttal evidence is adduced and accepted by the Court, having regard to all the circumstances of the case and the preponderance of probabilities, the evidential burden shifts back to the plaintiff who has also the legal burden. Thereafter, the presumption under S.118 does not again come to the plaintiff's rescue. Once both parties have adduced evidence, the Court has to consider the same and the burden of proof loses all its importance"
(emphasis supplied).
28. In present matter, the accused has been able to raise a reasonable and probable defence from the case of the complainant coupled with the consistent line of defence taken by him and has been able to rebut the presumptions under sections 118 and 139 of the Act. The complainant has clearly not come before the court at all let alone coming with clean hands. Resultantly, the reverse onus cast upon the accused has been discharged satisfactorily. The case of complainant must stands on its own legs. In the instant case, complainant has failed to discharge the said burden of proof and could not prove the case beyond reasonable doubt.
29. Consequently, this court finds the accused Sanjana Bhola not guilty for the offence under Section 138, Negotiable Instruments Act, 1881 and acquits him accordingly.
30. This judgment contains 18 pages. Every page of this judgment has been Kawal Kharbanda Vs. Sanjana Bhola CC No.21969/19 Page no. 17 of 18 signed by me.
31. This judgment be uploaded on the website of Dwarka District Court forthwith. PRANAT Digitally signed by PRANAT KUMAR KUMAR JOSHI Date: 2020.02.18 JOSHI 18:00:56 +0530 ANNOUNCED IN THE OPEN COURT (PRANAT KUMAR JOSHI) th TODAY i.e. 18 FEBRUARY 2020 METROPOLITAN MAGISTRATE DWARKA DISTRICT COURTS/NEW DELHI Kawal Kharbanda Vs. Sanjana Bhola CC No.21969/19 Page no. 18 of 18