Delhi District Court
16.In The Case Of Kusum Ingots And Alloys ... vs . Pennar Peterson Securities on 28 October, 2022
IN THE COURT OF SH. UMANG JOSHI
MM (NI ACT) DIGITAL COURT-05,
SOUTH WEST, DWARKA COURTS, NEW DELHI
Criminal Complaint No.: 18/2020
Jai Singh ......... Complainant
Versus
Vikas Singh ............. Accused
1. SI. No. of the case : CC NI Act No.18/2020
2. Date of institution of the case : 25.11.2020
3. Name and address of the complainant : Jai Singh, S/o Sh. Saudan Singh
R/o H. No. F-18, Gali No.08,
Vishwas Park, Uttam Nagar,
New Delhi-110059
4. Name and address of the accused : Vikas Singh, S/o Sh. Amar Singh
R/o G-27, Gali No.18, Rajapuri,
Uttam Nagar, New Delhi-110059
5. Offence complained of: Section 138, Negotiable Instruments Act
6. Plea of the accused: Accused pleaded not guilty
7. Final order: Acquitted
8. Date of such order: 28.10.2022
CC NI Act No. 18/2020 Digitally signed Page 1 of 26
UMANG by UMANG JOSHI
JOSHI Date: 2022.10.28
14:31:31 +05'30'
JUDGMENT
A. Factual Matrix of the case:
1. Briefly stated, the factual matrix of the case as per the complaint is that the accused being a relative of the complainant was having cordial relation with the complainant and accordingly approached the complainant for financial help in year 2019 for his personal needs for a period of six months. The complainant agreed to advance a sum of Rs. 1,50,000/- to the accused in three installments of Rs.50,000/- each and the same was paid to the accused in the year 2019 in the month of March, April, and May. It is further stated that after six months, the accused paid only Rs.10,000/- out of Rs.1,50,000/- and the accused requested to grant some more time to repay the balance amount. Thereafter, the accused again approached the complainant for financial help in the year 2020 and the complainant gave a sum of Rs.5,000/-, a sum of Rs. 10,000/- and a sum of Rs.20,000/- to the accused through cheques and a sum of Rs.25,000/- was also paid by the complainant to the accused in cash on 20.08.2020. Thereafter, the complainant approached the accused and demanded the said amount pursuant to which the accused issued a cheque bearing no. 000002 dated 28.08.2020 amounting to Rs.2,00,000/- drawn on Kotak Mahindra Bank, Janak Puri branch. It is further stated that the said cheque was issued by the accused in discharge of his legal liability with the assurance that the same would be encashed on presentation. Thereafter, the complainant presented the said cheque with his banker Indian Overseas Bank, Raja Puri, Dwarka, but the same was UMANG Digitally CC NI Act No. 18/2020 signed Page 2 of 26 by UMANG JOSHI JOSHI Date: 2022.10.28 14:31:52 +05'30' dishonoured and returned with remarks "Signature differ" vide returning memo dated 12.10.2020.
2. It is further stated that thereafter the complainant sent a legal demand notice dated 20.10.2020 vide speed post and registered A.D on the correct address of the accused. However, the accused failed to pay the cheque amount to the complainant within the stipulated period of 15 days from the date of receipt of the legal demand notice. Accordingly, the present complaint has been filed by the complainant against the accused under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred as "NI Act").
B. Appearance of accused, framing of notice and proceedings incidental thereto:
3. Vide order dated 01.12.2020, cognizance of the offence under Section 138 of the NI Act was taken by this court and upon a prima facie case being found against the accused, the summons were issued against the accused directing the accused to appear before the court on 15.12.2020. On 15.12.2020, the accused entered appearance before this court in pursuance to the summons issued against the accused and the accused was admitted to bail subject to furnishing of Personal Bond and Surety Bond in the sum of Rs.20,000/- each.
4. Thereafter, on 11.02.2021, the substance of allegations against the accused were explained to the accused in vernacular and notice under Section 251 of the Code of Criminal Procedure, 1973 (hereinafter referred as "Cr.P.C") for the offence punishable under Section 138 of the NI Act was put to the accused to which the accused pleaded not guilty and claimed trial. The plea of defence of the accused UMANG Digitally signed CC NI Act No. 18/2020 Page 3 of 26 by UMANG JOSHI JOSHI Date: 2022.10.28 14:32:06 +05'30' was also recorded in the notice. In the notice put to the accused, the accused stated that the cheque in question did not bear his signatures and he also denied issuing the cheque in question to the complainant. In his plea of defence, the accused stated that he did not issue the cheque in question to the complainant and further stated that his cheque book was stolen from the place where he was living as a tenant. The accused further stated that he had no liability towards the complainant and claimed that he was falsely implicated in the present case.
5. Subsequently, the statement of the accused as to the admission/denial of documents was recorded under Section 294 Cr.P.C on 11.03.2022. The accused in his statement admitted that the cheque in question is from his bank account. However, the accused did not admit his signature on the cheque in question. Furthermore, the accused did not admit the return memo and also denied the receipt of the legal demand notice.
6. The accused had also filed an application under Section 145 (2) of the NI Act which was allowed vide order dated 25.10.2021 and accordingly the accused was permitted to cross-examine the complainant witnesses.
C. Complainant's Evidence:
7. In order to prove his case, the complainant examined himself as CW-1 and relied upon his evidence by way of affidavit Ex. CW-1/1 wherein the contents of the complaint have been reiterated by the complainant. The complainant also relied upon the following documents to prove its case which are as follows:
UMANG Digitally signed by
UMANG JOSHI
JOSHI Date: 2022.10.28
14:32:37 +05'30'
CC NI Act No. 18/2020 Page 4 of 26
a) Cheque in question Ex. CW-1/A
b) Cheque return memo Ex. CW-1/B
c) Legal Demand Notice Ex. CW-1/C
d) Postal receipts and Ex. CW-1/D (colly)
delivery report of legal demand notice
8. Thereafter, the complainant was duly cross examined by the counsel for accused on 11.04.2022. Furthermore, no other witnesses were examined by the complainant to prove its case. Accordingly, the complainant evidence was closed on 11.04.2022 and the matter was listed for recording the statement of the accused under Section 313 Cr.P.C read with Section 281 Cr.P.C.
D. Statement of accused under Section 313 Cr.P.C read with Section 281 Cr.P.C:
9. Thereafter, all the incriminating evidence which were against the accused were put to the accused and his statement under Section 313 Cr.P.C read with Section 281 Cr.P.C was recorded on 02.08.2022 wherein he reiterated his defence as stated in the notice and stated that he did not issue the cheque in question to the complainant and also stated that the cheque in question does not bear his signature. In his statement under Section 313 Cr.P.C read with Section 281 Cr.P.C, the accused also stated that on 31.08.2020, he had received information from his bank that the complainant had presented the cheque in question for encashment pursuant to which he visited his bank and blocked his account on 31.08.2020. The accused further stated in his statement that his cheque book was stolen from the place where he was living as a tenant. The accused further UMANG Digitally CC NI Act No. 18/2020 signed Page 5 of 26 by UMANG JOSHI JOSHI Date: 2022.10.28 14:32:47 +05'30' stated that after receiving the summons from the court, he had lodged an FIR against the complainant since he had an apprehension that the complainant would encash other cheques belonging to him. The accused further stated that he did not wish to lead defence evidence and therefore no witness was examined by the accused in his defence. Accordingly, the matter was listed for final arguments.
E. Final arguments:
10. Final arguments were heard at length from both the parties.
11.Ld. Counsel for the complainant has argued that the complainant has proved all the ingredients of the offence under Section 138 of the NI Act, 1881 beyond reasonable doubt. Ld. Counsel for the complainant has further argued that the accused has admitted that the cheque in question is from his account and therefore a presumption arises in favour of complainant that the cheque in question was issued by the accused to the complainant in discharge of his legally enforceable debt or liability. Ld. Counsel for the complainant contends that the accused has not raised any probable defence and the accused has not lead any evidence to prove its case. Ld. Counsel for the complainant has further argued that even though the accused claims to have lodged an FIR against the complainant alleging that the cheque book of the accused was stolen by the complainant, the accused did not lead any evidence to prove the same and did not place on record the copy of the said FIR. Ld. Counsel for the complainant also submits that the testimony of the complainant in his cross examination is UMANG CC NI Act No. 18/2020 Page 6 of 26 Digitally signed by UMANG JOSHI JOSHI Date: 2022.10.28 14:32:57 +05'30' uncontroverted and the complainant has proved its case beyond reasonable doubt.
12.Per contra, Ld. Counsel for the accused has argued that the complainant has not proved its case beyond reasonable doubt. Ld. Counsel for the accused has argued that the execution of the cheque in question has not been proved by the complainant as the accused has not admitted his signature on the cheque in question and the accused has also denied issuing the cheque in question to the complainant. It is further argued by Ld. Counsel for the accused that the accused did not receive the legal demand notice from the complainant. It is further argued by Ld. Counsel for the accused that the accused did not take any loan from the complainant and that the accused has no liability towards the complainant. Ld. Counsel for the accused further contends that the onus to prove the alleged loan transaction in question was on the complainant and the complainant has not proved the alleged loan transaction by leading any evidence. It is further argued by Ld. Counsel for the accused that the complainant did not have the financial capacity to lend such a huge sum of money to the accused since the monthly earnings of the complainant are not fixed and are approximately Rs. 15,000-20,000/- as stated by the complainant in his cross examination. Ld. Counsel for the accused further contends that the accused has raised a probable defence and the complainant has not proved the ingredients of the offence under Section 138 of the NI Act and has filed a false case against the accused.
13.I have heard the submissions made by counsel for both the parties and have also perused the record thoroughly.
UMANG Digitally CC NI Act No. 18/2020 signed Page 7 of 26 by UMANG JOSHI JOSHI Date: 2022.10.28 14:33:14 +05'30' F. Legal provisions and the legal principles:
14. Before appraising the facts and appreciating the evidences of the present case in detail, it is imperative to encapsulate the relevant legal provisions germane to the adjudication of the present case. The present complaint case has been filed under Section 138 of the NI Act alleging the dishonour of the cheque in question bearing number 000002 dated 28.08.2020 amounting to Rs.2,00,000/-.
15. Section 138 of the NI Act mandates that the dishonour of a cheque is an offence. It is therefore imperative to refer the bare provision of Section 138 of the NI Act and the same is as follows:
"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 provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both."
16.In the case of Kusum Ingots and Alloys Ltd. vs. Pennar Peterson Securities Ltd. (2000) 2 SCC 745, the apex court has expounded the ingredients which are required to be fulfilled in order to constitute an offence under Section 138 of the NI Act. The relevant portion of the said judgment laying down the ingredients to be satisfied for making out a case under Section 138 of the NI Act is reproduced as under:
CC NI Act No. 18/2020UMANG Digitally signed by UMANG JOSHI Page 8 of 26 JOSHI Date: 2022.10.28 14:33:42 +05'30' i. "a 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 for the discharge of any debt or other liability;
ii. 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;
iii. 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;
iv. 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 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;
v. 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;"
17.A drawer of the cheque can be said to have committed an offence under Section 138 of the NI Act only when all the above mentioned ingredients are fulfilled. It is pertinent to note that Section 138 of the NI Act cannot be read in isolation and it has to be read with certain legal presumptions which arise in favour of the payee or holder in due course and the said presumptions are enunciated under Section 139 and 118 of the NI Act. Section 139 of the NI Act reads as follows:
"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, or any debt or other liability."
Furthermore, Section 118 (a) of the NI Act deals with presumption of consideration and provides that until the contrary is proved, it shall be presumed that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has be accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration.
UMANG Digitally signed CC NI Act No. 18/2020 Page 9 of 26 by UMANG JOSHI JOSHI Date: 2022.10.28 14:33:56 +05'30'
18.The aforesaid legal presumptions which arise in favour of the complainant are rebuttable in nature and the burden to rebut the said presumptions is on the accused. Furthermore, it is well settled in a catena of judgments that the accused can rebut the said presumptions by showing preponderance of probabilities. The accused can rebut the said presumptions by raising a probable defence or by discrediting or creating doubt on the case of the complainant. Furthermore, it is not incumbent upon the accused to lead direct evidence to rebut the said presumptions and the accused may rebut the said presumptions by showing preponderance of probabilities and for that purpose, he may also rely upon the evidences adduced by the complainant.
19.In this context, it is imperative to refer to the case of Rangappa vs. Sri Mohan (2010) 11 SCC 441 wherein it has been held by the Hon'ble Supreme Court as follows:
"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."
20.Therefore, the legal position that emerges is that for rebuttal of the presumptions envisaged under Section 139 and 118 of the NI Act, the accused is not required to examine himself and the accused need not step into the witness box as the accused can discharge his burden and probabalise his defence by placing reliance on the materials already brought on record by the complainant. The standard of proof required from the accused to rebut the CC NI Act No. 18/2020 UMANG Digitally signed by UMANG JOSHI Page 10 of 26 JOSHI Date: 2022.10.28 14:34:17 +05'30' presumptions is preponderance of probabilities and the accused is not required to prove his defence on the yardstick of proof beyond reasonable doubt as required from the complainant.
G. Undisputed/ Uncontroverted facts
21.The accused in the notice put to him under Section 251 Cr.P.C as well as in his statement under Section 313 Cr.P.C read with Section 281 Cr.P.C has not denied that the cheque in question was issued from his account. Therefore, it is not in dispute that the original cheque i.e. Ex.CW-1/A has been drawn on an account maintained by the accused. Thus, the complainant has been able to discharge the burden of proving that the cheque in question was issued on an account maintained by the accused.
H. Points for determination:
a) Whether the legal demand notice was served on the accused in the present case?
b) Whether the presumption under section 118(a) and section 139 of the NI Act can be raised in favour of complainant in the present case?
c) Whether the complainant has established the ingredients of the offence punishable under Section 138 of the NI Act beyond reasonable doubt against the accused or not? UMANG Digitally signed by UMANG JOSHI JOSHI Date: 2022.10.28 14:34:35 +05'30' CC NI Act No. 18/2020 Page 11 of 26 I. Reasons for the decision:
a) Whether the legal demand notice was served on the accused in the present case?
22. Ld. Counsel for the accused has argued that the accused did not receive any legal demand notice from the complainant and therefore the ingredients of the offence punishable under Section 138 of the NI Act are not complete. Per contra, Ld. Counsel for the complainant has argued that the legal demand notice was sent to the accused vide speed post and registered A.D on the correct address of the accused and the accused failed to pay the cheque amount to the complainant within the stipulated period of 15 days from the date of receipt of the legal demand notice.
23. Submissions heard.
24. It is pertinent to note that the accused in the notice under Section 251 Cr.P.C and in his statement under Section 294 Cr.P.C has stated that he did not receive the legal demand notice from the complainant asking him to pay the amount of the dishonoured cheque in question. The legal demand notice Ex. CW-1/C was sent through post. The postal receipts and the postal tracking reports are Ex. CW-1/D (colly). Perusal of the postal tracking report denotes that the same has been delivered. Furthermore, it is pertinent to note that the address mentioned by the accused on bail bonds furnished by him is the same address on which the legal demand notice was sent to the accused. Furthermore, summons were also served on the accused on the said address pursuant to which the accused had CC NI Act No. 18/2020 UMANG Digitally signed by UMANG JOSHI Page 12 of 26 JOSHI Date: 2022.10.28 14:34:45 +05'30' entered appearance before this court. Therefore, the contention of the accused that he did not receive the legal demand notice is without any substance.
25.Even otherwise, it is pertinent to note that the rigour of proving the factum of the legal demand notice being served on the accused has considerably been reduced after the legal position in this regard has been settled by the apex court in C.C. Alavi Haji vs. Palapetty Muhammed (2007) 6 SCC 555. In this case, the Hon'ble apex court has held as follows:
"Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the Court along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the G.C. Act and Section 114 of the Evidence Act."
26. In the present case, the accused has not made the payment of the cheque amount in question to the complainant within 15 days of the receipt of summons of this court. Therefore, in light of the aforesaid legal position, it is not open to the accused to make vague assertions as to the non receipt of the legal demand notice when the accused has not adopted the recourse of making payment of the cheque amount in question to the complainant within 15 days of the receipt of service of summons as laid down in the aforesaid case.
27.Accordingly, it is clear that the legal demand notice Ex. CW-1/C was duly served upon the accused. The contention of the accused regarding the non receipt of the legal demand notice is accordingly rejected.
CC NI Act No. 18/2020 UMANG Digitally signed Page 13 of 26by UMANG JOSHI JOSHI Date: 2022.10.28 14:34:55 +05'30'
b) Whether the presumption under Section 118(a) and Section 139 of the NI Act can be raised in favour of complainant in the present case?
28.The next question which needs to be determined is whether the presumption under Section 118(a) and Section 139 of the NI Act can be raised in favour of complainant in the present case. Section 118 (a) and Section 139 of the NI Act provide for legal presumptions as to the issuance of the cheque by the accused in favour of the complainant for consideration and in discharge of a legally enforceable debt or other liability.
29.However, it is imperative to note that the statutory presumption under Section 118 (a) and Section 139 of the NI Act only arises if the accused admits his signatures on the cheque. Therefore, once the accused admits his signature on the cheque in question, the presumption under Section 118 and 139 of the NI Act is drawn in favour of the complainant.
30.In K. Bhaskaran vs. Sankaran Vaidhyan Balan (1999) 7 SCC 510, it has been held by the apex court that if the signature on the cheque is admitted to be that of the accused, then the presumption as provided under Section 118 of the NI Act is applicable and it can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears. Furthermore, in Kalamani Tex vs. P. Balasubramanian (2021) 5 SCC 283, it was held by the apex court as follows:
"The statute mandates that once the signature(s) of an accused on the cheque/negotiable instrument are established, then these 'reverse onus' clauses become operative. In such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him."CC NI Act No. 18/2020
UMANG Digitally signed by UMANG JOSHI Page 14 of 26 JOSHI Date: 2022.10.28 14:35:07 +05'30'
31.The crux of the aforesaid decisions is that the statutory presumption as envisaged under Section 118 (a) and Section 139 of the NI Act only arises if the accused admits his signatures on the cheque. The execution of the cheque by the accused has to be therefore proved as prerequisite for the applicability of the aforesaid statutory presumptions in favour of the complainant.
32.It is pertinent to note that in the present case, the accused has consistently denied his signature on the cheque in question. The accused at the stage of framing of notice under Section 251 Cr.P.C and also in his statement under Section 313 Cr.P.C read with Section 281 Cr.P.C has stated that the cheque in question does not bear his signature and thus the accused has not admitted his signature on the cheque in question in the present case. Furthermore, the aforesaid defence of the accused is duly corroborated by the cheque return memo Ex. CW-1/B which mentions the reason for dishonour of the cheque in question as 'Drawer's signature differs'. It is pertinent to note that Section 146 of the NI Act provides that bank's memo denoting the dishonour of cheque is prima facie evidence of the fact of dishonour of cheque. It has been categorically stated by the accused in the notice under Section 251 Cr.P.C and also in his statement under Section 313 Cr.P.C read with Section 281 Cr.P.C that he did not issue the cheque in question to the complainant and that the cheque in question does not bear his signature. It is further stated by the accused in his defence that his cheque book was stolen from the place where he was living as a tenant.
33.Therefore, it is clear that the execution of the cheque in question by the accused and also the issuance of the cheque in question by the accused in favour of the complainant has not been admitted by the accused in the present case. In the CC NI Act No. 18/2020 UMANG Digitally signed by UMANG JOSHI Page 15 of 26 JOSHI Date: 2022.10.28 14:35:18 +05'30' present case, the accused has consistently denied his signature on the cheque in question and has also denied issuing the cheque in question to the complainant. The cheque return memo Ex. CW-1/B also mentions the reason for dishonour of the cheque in question as 'Drawer's signature differs' which fortifies the defence of the accused to that extent.
34.Therefore, once the accused has denied his signature on the cheque in question and the execution of the cheque in question has not been admitted by the accused, the presumptions as provided under Section 139 and Section 118 (a) of the NI Act become inapplicable and thus the complainant cannot take the aid of the aforesaid presumptions in such a case. Accordingly, in such a case, where the signature on the cheque in question were not admitted by the accused, the complainant ought to have examined the bank witness or any expert witness to prove that the cheque in question bears the signature of the accused.
35.However, it is pertinent to note that the complainant did not examine any bank witness in the present case and also did not lead any evidence to prove that the signature on the cheque in question were indeed that of the accused. The cheque return memo also mentions the reason for dishonour of the cheque in question as 'Drawer's signature differs' but the complainant did not summon and examine the concerned bank witness to prove that the signature on the cheque in question were that of the accused. Accordingly, since the signature of the accused on the cheque in question were not proved in the present case, the initial burden of proof on the complainant for the presumption under Section 139 and Section 118 (a) of the NI Act to be applied in his favour was not discharged by the complainant.
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36. In view of the aforesaid discussion, it is concluded that the presumption under Section 118 (a) and Section 139 of the NI Act cannot be raised in favour of complainant in the present case.
c) Whether the complainant has established the ingredients of the offence punishable under Section 138 of the NI Act beyond reasonable doubt against the accused or not?
37. Since the presumptions as provided under Section 118 (a) and Section 139 of the NI Act are not applicable in the present case for the reasons as discussed above, it was imperative upon the complainant to prove its case by proving all the ingredients of the offence under Section 138 of the NI Act beyond reasonable doubt by leading clear and cogent evidence. Therefore, the complainant had the burden to prove that the cheque in question was issued in his favour by the accused for a legally recoverable debt or other liability. Furthermore, since the presumptions as laid down under Section 139 and Section 118 of the NI Act do not apply in the present case, the question of the accused rebutting such presumptions does not arise and rather the complainant was required to discharge its burden of proof and thereby prove its case beyond reasonable doubt. The onus on the accused in such a case was to create a doubt in the complainant's version or raise a probable defence on the scale of preponderance of probabilities.
38.The next question which therefore needs to be determined is whether the complainant has been able to prove the ingredients of the offence under Section 138 of the NI Act in the present case beyond reasonable doubt. The complainant was therefore required to prove that the cheque in question was CC NI Act No. 18/2020 UMANG Digitally signed by UMANG JOSHI Page 17 of 26 JOSHI Date: 2022.10.28 14:36:15 +05'30' issued by the accused to the complainant for a legally recoverable debt or other liability. In other words, the complainant was required to prove that there existed a legally recoverable debt or other liability in lieu of which the cheque in question was issued by the accused in favour of the complainant.
39.Accordingly, it is imperative to appraise the facts and the evidences in the present case. The complainant's version as evident from the complaint and the evidence by way of affidavit is that he had advanced a sum of Rs. 1,50,000/- to the accused in three installments of Rs.50,000/- each and the same was paid to the accused in the year 2019 in the month of March, April, and May. It is further stated in the complaint and the evidence by way of affidavit that in the year 2020, the complainant had given a sum of Rs.5,000/ to the accused through cheque bearing no. 629346 dated 20.03.2020, a sum of Rs. 10,000/- vide cheque bearing no 623949 in the month of June and a sum of Rs.20,000/- vide cheque bearing no.623950 in the month of July. It is further stated that the said amount of money given to the accused through cheques was encashed by the accused and it is further stated that a sum of Rs.25,000/- was also paid to the accused in cash on 20.08.2020. Therefore, it emerges that as per the complainant's version as evident from the complaint, a sum of Rs. 1,75,000/- was advanced by the complainant to the accused in cash and a sum of Rs. 35,000/- was advanced by the complainant to the accused through cheques on different dates which were allegedly encashed by the accused. Therefore, as per the averments in the complaint, a total sum of Rs. 2,10,000/- is alleged to have been advanced by the complainant to the accused.
40.The complainant was therefore required to prove the factum of alleged loan/sum of money advanced by him to the accused by leading clear and cogent UMANG Digitally signed by CC NI Act No. 18/2020 Page 18 of 26 UMANG JOSHI JOSHI Date: 2022.10.28 14:36:27 +05'30' evidence. In his cross examination, the complainant i.e. CW-1 has deposed that he had given a sum of Rs. 1,50,000/- in cash to the accused in the year 2019 but he does not remember the date of giving the said amount to the accused. CW-1 in his testimony has further deposed that he had also given a sum of Rs. 25,000/- in cash to the accused. Therefore, in his cross examination, the complainant claims to have advanced a total sum of Rs. 1,75,000/- in cash to the accused but no particulars of the date and place of advancing the alleged sum have been mentioned by CW-1 in his cross examination. Furthermore, the averments in the complaint and the evidence by way of affidavit of the complainant are specifically silent regarding the particulars as to the exact date and place of advancing the alleged sum of Rs.1,50,000/- in cash by the complainant to the accused. Furthermore, even through the complainant claims to have advanced a total sum of Rs. 35,000/- to the accused by way of three cheques which he claims were encashed by the accused, the complainant did not place on record any document or even his bank statement to substantiate the said fact.
41. Mere assertions of the complainant cannot ipso facto amount to proof of the said alleged fact, unless the complainant leads clear and cogent evidence to prove the said fact. Section 103 of the Indian Evidence Act lays down a cardinal rule of evidence and 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 special law that the proof of that fact shall lie on any particular person. Therefore, it was incumbent upon the complainant to substantiate and prove his assertions through clear and cogent evidence but the complainant did not lead any cogent evidence to substantiate his version.
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42.In this context, it is apposite to refer to the case of Vijay vs. Laxman (2013) 3 SCC 86, wherein the Hon'ble Supreme Court of India observed as follows:
"The absence of any details of the date on which the loan was advanced as also the absence of any documentary or other evidence to show that any such loan transaction had indeed taken place between the parties is a significant circumstance."
43.It is pertinent to note that in his cross examination, the complainant CW-1 has deposed that he does not remember the date on which he had advanced a sum of Rs. 1,50,000/- in cash to the accused. CW-1 has further deposed that he does not remember the particulars of the cheque in question. Furthermore, there is nothing in the cross examination of CW-1 which substantiates the version of the complainant that he had also advanced a sum of Rs. 35,000/- to the accused by way of three cheques which he claims were encashed by the accused, as averred in the complaint. The loan transaction as alleged by the complainant is predominantly a cash transaction and therefore the complainant was required to prove the factum of alleged sum of money/loan being advanced to the accused through clear and cogent evidence. It is pertinent to note that the complainant has not produced any cogent oral or documentary evidence in order to prove the factum of advancement of alleged sum of money/loan by him to the accused. In his cross examination, the complainant CW-1 has merely deposed that a sum of Rs. 1,50,000/- and Rs. 25,000/- was given by him to the accused in cash and no particulars as to the date and place of the advancement of the said amount is stated by the complainant in his deposition which casts a doubt on the veracity of the alleged transaction. Therefore, it is pertinent to note that in the present case, the particulars as to the date or place of advancement of the alleged sum of Rs. 1,75,000/- in cash to the accused have not been substantiated by the complainant which casts a doubt on the version of the complainant.
UMANG Digitally signed Page 20 of 26 CC NI Act No. 18/2020 by UMANG JOSHI JOSHI Date: 2022.10.28 14:37:06 +05'30'
44.Furthermore, the complainant did not place on record any document or even his bank statement to substantiate that he had advanced a sum of Rs. 35,000/- to the accused through cheques which were encashed by the accused as averred in the complaint. No evidence whatsoever has been led by the complainant to prove the factum of advancement of the alleged sum of money/loan by him to the accused which casts a doubt on the veracity of the alleged transaction.
45.Furthermore, it is pertinent to note that no receipt or any written acknowledgment/document and neither any witness has been brought on record by the complainant so as to prove the factum of advancement of the alleged sum of money/loan by him to the accused which additionally casts a doubt on the veracity of the said alleged loan transaction. It is incomprehensible as to why a sum of Rs. 2,10,000/- which is indeed a huge sum of money would be advanced by any reasonable and prudent person without executing any receipt or any written document and without ascertaining the capacity of the borrower to repay.
46.The complainant and the accused are relatives as has been stated in the complaint and the same has also been admitted by the accused in the notice under Section 251 Cr.P.C. The complainant has stated in his complaint and the evidence by way of affidavit that there were cordial relations between him and the accused owing to which he had advanced the alleged sum of money to the accused for his personal needs as the accused had allegedly approached the complainant for financial help. However, no evidence has been led by the complainant and no witness has been examined by the complainant to establish the cordial relations between the accused and the complainant, based on which UMANG Digitally signed CC NI Act No. 18/2020 Page 21 of 26 by UMANG JOSHI JOSHI Date: 2022.10.28 14:37:22 +05'30' the alleged sum of money/loan is stated to have been given by the complainant to the accused.
47.CW-1 has further deposed in his cross examination that he is running a tailor shop and his earnings are not fixed and that his monthly earnings are approximately Rs. 15,000-20,000/-. Since, the complainant claims to have advanced a total sum of Rs.2,10,000/- to the accused, out of which a sum of Rs. 1,75,000/- is alleged to have been given by the complainant to the accused by cash, a question is thereby raised by the accused as to the financial capacity of the complainant to advance the said sum of money to the accused given that the monthly earnings of the complainant as stated by the complainant in his cross examination are approximately Rs. 15,000-20,000/-.
48.In this context, it is imperative to refer to the decision of the apex court in APS Forex Service Private Limited vs. Shakti International Fashion Linkers AIR 2020 SC 945, wherein it has been observed as follows:
"We are of the view that whenever the accused has questioned the financial capacity of the complainant in support of his probable defence, despite the presumption under Section 139 of the N.I. Act about the presumption of legally enforceable debt and such presumption is rebuttable, thereafter the onus shifts again on the complainant to prove his financial capacity and at that stage the complainant is required to lead the evidence to prove his financial capacity, more particularly when it is a case of giving loan by cash and thereafter issuance of a cheque."
49.The complainant has no initial burden to prove his financial capacity or the source of money advanced to the accused. However, in cases particularly where the complainant has alleged that he had lent money to the accused by cash and that the accused issued the cheque in discharge of his liability, the accused can raise a probable defence by questioning the financial capacity of the CC NI Act No. 18/2020 UMANG Digitally signed Page 22 of 26 by UMANG JOSHI JOSHI Date: 2022.10.28 14:37:36 +05'30' complainant to advance the money and accordingly, the onus shifts on the complainant to prove his financial capacity.
50.Therefore, in this context, it was imperative upon the complainant to show and prove as to how he was able to arrange a huge sum of Rs. 2,10,000/- to be lent to the accused, out of which a sum of Rs. 1,75,000/- is alleged to have been given by the complainant to the accused by cash. The said question assumes importance given that the monthly earnings of the complainant as per his own deposition are not fixed and are approximately Rs. 15,000-20,000/- and the alleged loan transaction is predominantly a cash transaction. However, the complainant has failed to show as to how and from what source, he was able to arrange a huge sum of Rs. 1,75,000/- in cash which was allegedly given by him to the accused. The complainant has not placed on record any document or any evidence to substantiate and demonstrate his financial capacity or even the source or arrangement of funds of Rs.1,75,000/- in cash for advancing the alleged loan to the accused. Furthermore, the complainant did not place on record any document particularly his bank account statement or ITR to show his financial capacity to lend a huge sum of Rs. 2,10,000/- to the accused. Accordingly, it is amply clear that the complainant has failed to prove his financial capacity and the accused has been able to raise a probable defence by casting a doubt over the source of funds/financial capacity of the complainant to advance the alleged sum of money/ loan to the accused. The complainant has failed to establish that the alleged sum of money/ loan had been advanced by him to the accused and the complainant has also failed to prove that the accused had any legally recoverable debt or liability towards the complainant.
CC NI Act No. 18/2020 Digitally signed Page 23 of 26by UMANG JOSHI UMANG JOSHI Date: 2022.10.28 14:37:50 +05'30'
51.The contentions of Ld. counsel for the complainant that the accused did not examine himself and did not lead any defence evidence to prove its case are bereft of any merit. As already discussed, it is a trite law that for discharging the burden of proof placed upon an accused under a statute, the accused need not examine himself and need not step into the witness box. The accused may discharge his burden and probabalise his defence by relying on the materials already brought on record. Ld. counsel for the complainant has further argued that though the accused has stated in his statement under Section 313 Cr.P.C that his cheque book was stolen and that he had lodged an FIR against the complainant, the accused did not bring on record the copy of the FIR allegedly lodged by him claiming that his cheque book was stolen. The submissions of Ld. counsel for the complainant are devoid of merits for two reasons. Firstly, as discussed above, the accused in order to prove his defence is not required to lead evidence and rather the accused can probabalise his defence on the basis of the evidence and the materials already on record. Secondly, the complainant has to discharge its initial burden of proof and is required to prove its case beyond reasonable doubt. The standard of proof required on part of the accused is that of preponderance of probabilities while that on part of the prosecution/complainant is proof beyond all reasonable doubt. Though the accused did not place on record the copy of the alleged FIR, the complainant cannot take benefit of the weakness of the defence of the accused as the case of the complainant has to stand on its own legs and the complainant has to discharge its initial burden of proof and prove its case beyond reasonable doubts which has not been done by the complainant in the present case.
UMANG Digitally signed
by UMANG JOSHI
JOSHI Date: 2022.10.28
14:38:10 +05'30'
CC NI Act No. 18/2020 Page 24 of 26
52.In view of the aforesaid discussion, it is concluded that the complainant has failed to establish the ingredients of the offence punishable under Section 138 of the NI Act beyond reasonable doubt against the accused.
J. Decision:
53. In view of the aforesaid discussion and upon a careful examination of the complaint, evidence by way of affidavit and upon appreciation and appraisal of the evidences on record, it is amply clear that the complainant has miserably failed to discharge its burden of proof and has failed to establish the ingredients of the offence punishable under Section 138 of the NI Act beyond reasonable doubt against the accused. The execution of the cheque in question by the accused was not proved by the complainant and the accused has thereby raised a probable defence that he did not sign and issue the cheque in question to the complainant. Furthermore, the complainant has miserably failed to prove and establish that the alleged sum of money/ loan was advanced by him to the accused as the version of the complainant has not been substantiated by any cogent evidence. Since the accused had denied taking of any loan from the complainant and had further denied any liability towards the complainant, it was incumbent upon the complainant to prove the alleged loan transaction by leading clear and cogent evidence. However, the complainant did not summon any witness and did not lead any cogent evidence to prove the alleged loan transaction. Furthermore, no receipt or any written acknowledgment/document and neither any witness has been brought on record by the complainant so as to prove the factum of advancement of the alleged sum of money/loan by him to the accused. The accused has been able to create a doubt in the version of the complainant and has also been able to raise a probable defence in his favour on CC NI Act No. 18/2020 UMANG Digitally signed by Page 25 of 26 UMANG JOSHI JOSHI Date: 2022.10.28 14:38:27 +05'30' a scale of preponderance of probabilities. All the aforesaid facts and circumstances when considered and analysed together cast a grave suspicion and doubt on the version of the complainant and also on the veracity of the alleged loan transaction.
54.On a conspectus of the factual matrix and the legal position as discussed above, this court is of the considered view that the complainant has failed to discharge its burden of proof and has failed to establish the ingredients of the offence punishable under Section 138 of the NI Act beyond reasonable doubt against the accused. The complainant has failed to prove that the cheque in question was issued by the accused to the complainant for a legally recoverable debt or other liability.
55.Accordingly, the accused Vikas Singh is hereby acquitted for the offence punishable under section 138 of the NI Act.
Announced in the Open Court on this 28th day of October 2022. This Judgment consists of 26 signed pages.
UMANG Digitally signed by
UMANG JOSHI
JOSHI Date: 2022.10.28
14:39:11 +05'30'
(UMANG JOSHI)
MM (NI Act) DIGITAL COURT-05,
South West, Dwarka Courts, New Delhi
28.10.2022
CC NI Act No. 18/2020 Page 26 of 26