Delhi District Court
In Re: Braham Singh Bhati vs . Deepak Verma @ Neeraj Verma on 15 February, 2023
IN THE COURT OF MS. NIDHI BALA, METROPOLITAN MAGISTRATE,
NI ACT DIGITAL COURT, NORTH EAST DISTRICT,
KARKARDOMA COURT, DELHI
IN RE: BRAHAM SINGH BHATI VS. DEEPAK VERMA @ NEERAJ VERMA
1. Complaint Case no. : 780/2021
2. Date of Institution of case : 02.11.2021
3. Name of the complainant : Braham Singh Bhati
S/O Sh. Pitam Singh Bhati
R/O C-1147, Gali No. 22/3,
Shaheed Bhagat Singh Colony,
Karawal Nagar, Delhi-110094.
4. Name of Accused person : Deepak Verma @ Neeraj Verma
S/O Sh. Devi Dayal Verma @ Dayal Verma
R/O H.No. 60, A-Block, Gali No. 13, Near
Prasadi Lal Pradhan Mandir/ Shiv Shakti
Mandir, Dayalpur, Delhi-110094.
Also At:-
M/S Durga Jewelers, Shop at A/414, Budh
Bazar Chowk, Laxmi Garden, Main Road,
Indirapuri, Loni, Ghaziabad, UP.
5. Offence complained of : Section 138 NI Act
6. Plea of accused : Pleaded not guilty
7. Final Order : AQUITTED
8. Date of judgment : 15.02.2023
JUDGMENT
1. Vide this judgement the present complaint case for an offence punishable U/Sec.138 of the Negotiable Instruments Act, 1881 (hereinafter "the NI Act") is being decided.
Digitally signedNIDHI by NIDHI BALA Date:
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2. Factual matrix of the case:-
2.1 It is alleged by the complainant that in the month of February, 2020, accused was re-inducted/continued as tenant by the complainant in the built up property ground and first floor no. C-58, Gali No. 3, Dayalpur Ext., Karawal Nagar, Delhi at the monthly rent of Rs. 11,000/- per month and in this regard one rent agreement dated 04.02.2020 duly notarized was executed between the accused and the complainant for the period of two years commencing from 04.02.2020 on the terms and conditions mentioned therein. Accused was residing at the same accommodation as a tenant since 2017 and familiar relations were developed between the complainant and the accused. 2.2. Accused failed to make the payment of rent since beginning and thereafter in the month of March 2020, accused requested for some time to make the payment of arrears of rent due to nationwide lockdown because of pandemic. Thereafter in the month of April, 2021 accused requested to take back the possession of the tenanted premises as he was not in the position to pay the rent , however, assured to clear the dues of arrears of rent which was more than one lac and fifty thousand including electricity and water charges.
2.3. On 30.04.2021 accused vacated the tenanted premises and in order to discharge of abovesaid liability towards the complainant, issued a cheque bearing no. 098398 dated 23.08.2021 for an amount of Rs. 1,50,000/-(One lac Fifty thousand) drawn on ICICI Bank, Yamuna Vihar Branch, Delhi in favour of the complainant with the assurance of its encashment.
2.4 In terms of the accused's commitment, the cheque in question was presented for encashment with the complainant's banker Punjab National Bank, Branch Mukund Vihar, Karawal Nagar, Delhi (within the jurisdiction of this court). However the said cheque in question was returned unpaid / dishonored for the reason "Funds Insufficient" vide cheque return memo dated 26.08.2021. Thereafter on 14.09.2021, complainant sent a legal demand notice dated 13.09.2021 to accused through counsel via speed post and called upon the accused to make the payment of the cheque amount in question within 15 days of receipt of legal notice but the same returned unserved with the report "Refused", therefore, the present complaint is filed by the Complainant against the accused for the offence under Section 138 of the NI Act. Digitally signed NIDHI byDate:NIDHI BALA BALA 2023.02.15 17:07:17 +0530 CC No. 780/2021 Braham Singh Bhati Vs. Deepak Verma @ Neeraj Verma Page no. 2 of 15
3. On being satisfied of the prima facie ingredients of Section 138 of the NI Act, cognizance was taken and summons were directed to be issued against the accused vide order dated 17.12.2021 and accused appeared alongwith his counsel after issuance of bailable warrants against him and he was admitted to bail. On 31.03.2022 notice under Section 251 Cr.PC r/w Section 263(g) Cr.P.C was framed and served upon the accused to which he pleaded not guilty and claimed trial. While putting forth his plea of defence, accused did not admit his signatures upon the cheque in question.
Accused also denied of receiving the legal demand notice sent by the complainant through counsel, however, admitted his address. The plea of accused is being reproduced hereinafter for ready reference:
" My name is Deepak Verma @ Neeraj Verma. I know the complainant. I was residing on rent at his house bearing no. H.No. 58, Gali No. 3, C-Block, Dayal Pur, Delhi. I owed Rs. 20,000/- as rent to the complainant till April, 2021. due to the demise of my mother on 01.04.2021 and pandemic, I could not give rent to the complainant, then he querreled with me and locked the premises where I was residing on rent. Some of my arricles were left there alongwith my cheque book. I had not given the cheque in question to the complainant towards my legal liability. Though the cheque belongs to my account but neither it bear my signatures nor the other details are written by me. I do not owe the liability of cheque amount towards the complainant. I do not want to say anything else."
4. The accused was allowed to cross examine the complainant on oral submissions made by Ld. Counsel for the accused since Ld. Counsel for the complainant also did not have any objection and the same was consequently done.
5. EVIDENCE OF COMPLAINANT:
5.1 In Complainant's evidence, complainant (CW-1) tendered his evidence affidavit in post summoning evidence (as the solitary witness) and relied upon the following documents:
i)Ex.CW-1/A : Evidence of the complainant by way of affidavit.
ii) Ex. CW-1/2:Copy of rent agreement executed between the complainant and accsued.
iii) Ex. CW-1/3: Original Cheque bearing no. 098398 dated 23.08.2021 for an amount of Rs. 1,50,000/-(One Lac Fifty Thousand) drawn on ICICI Bank, Yamuna Vihar Branch, Delhi Digitally signed by NIDHI NIDHI BALA Date:
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iv) Ex. CW-1/4: Original Cheque Return Memo dtd. 26.08.2021.
v) Ex. CW-1/5: Statutory Legal demand notice dtd. 13.09.2021 sent on 14.09.2021 by complainant to accused through counsel which returned with the remarks "Refused".
vi)Ex. CW-1/6 and Ex. CW-1/7: Speed post receipt and the returned envelope with the remarks "Refused" respectively.
6. The accused was then examined under Section 313 Cr.PC, 1973 wherein all the incriminating evidence were put to the accused and he denied the liability of the cheque amount towards the complainant and also denied his signatures on the cheque in question. Accused further denied of having issued the cheque in question in favour of the complainant. Accused further denied of receiving the legal demand notice sent by the complainant through counsel, however, admitted his address provided in records by the complainant.
7. Final arguments have been heard at length on behalf of Complainant as well as accused and written arguments were also filed by both the parties. Complete record has been perused carefully.
8. ARGUMENTS ON BEHALF OF COMPLAINANT:
8.1. During the course of arguments, Ld. Counsel for complainant reiterated the contents of the complaint and the evidence affidavit of the complainant and further argued that the accused has vaguely denied the liability of cheque amount towards the complainant.
8.2. Ld. Counsel for the complainant has further argued that accused deliberately refused to take the legal demand notice sent by complainant to him to avoid his legal liability towards the complainant. Ld. Counsel has further argued that accused has admitted that he was residing as tenant in the premises of complainant and has taken false plea of defence. He further argued that the presumption of section 139 and 118 of NI Act arise in favour of the complainant and accused has failed to rebut the same. He further argued that accused has not led any evidence to prove his defence.
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9. ARGUMENTS ON BEHALF OF ACCUSED:
9.1. Per contra, Ld. Counsel for the accused argued that the present complaint is filed with ulterior motive to extort money from the accused. Ld. Counsel further argued that accsued with bona fide intentions admitted the fact that he was residing as tenant in the premises of the complainant and a small amount of arrears of rent was pending against him. Ld. Counsel further argued that the onus to prove his case is on the complainant despite the presumptions of section 118 and 139 of NI Act since accused has a probable defence to make and Ld. Counsel relied on the several judgments in this regard such as MalavarappaVs.Thadikond, 2008(3) RCR (Crl.) 205SC, Pine ProductsVs. R.C.Gupta, 2007(1) AD(Crl.) 433 and M.S.Narayana Menon Alias Maniv State of Kerala and Anr (2006) 6SCC 39. Ld. Counsel further argued that accused has successfully rebutted the presumption of law by raising a probable defence and he relied on M. S.NarayanaMenon Alias Mani v.State of KeralaandAnr.[(2006)6SCC39]. Ld. Counsel further argued that accused has not issued the cheque in question to complainant and therefore he rightly denied his signatures on the cheque in question, therefore, the initial presumptions of section 118 and 139 of the NI Act do not arise in favour of the complainant. 9.2. Ld. Counsel for accused further argued that accused has been able to rebut the testimony of complainant and complainant has failed to prove his case beyond reasonable doubts in the absence of presumption of section 118 and 139 of NI Act in his favour since accused has not admitted his signatures on the cheque in question. 9.3. Ld. Counsel for the accused further argued that complainant failed to reveal the actual arrears of the rent since he could not tell the actual default period for which accused allegedly did not pay the rent to him. He further argued that there is material contradiction in the testimony of complainant in this regard since in his evidence tendored by way of affidavit, he stated that the monthly rent was Rs. 11,000/-, however, during his cross examinatuon complainant deposed that monthly rent was of Rs. 7,500/- to Rs. 8,000/- since the inception of tenancy. Ld. Counsel further argued that complainant has admitted a handwritten document Ex. CW-1/D1 in his own handwriting and having been sent by him to accused through Whats App which clearly Digitally signed by CC No. 780/2021 Braham Singh Bhati Vs. Deepak Verma @ Neeraj Verma Page no. 5 of 15 NIDHI NIDHI BALA BALA Date:
2023.02.15 17:07:31 +0530 mentions the arrears of rent pending Rs.10,765/- as on 31.03.2021 and it is the admitted fact that accused vacated the tenanted premises in April 2021, therefore, accused never owed the liability of the cheque amount towards the complainant. Ld. Counsel further argued that during the cross examination, complainant failed to state as to what was the exact rent and also admitted that he can not tell as to what was the actual arrears of rent due outstanding against the accsued. He further argued that complainant has further failed to disclose the actual default period of paying the rent which renders the conduct of complainant doubtful and suspicious and in this regard Ld. Counsel has relied upon judgment title "John K JohnVs.TomVarghese&Anr. (IX2007SLT81)" and Subramani@ SubramanianVs. Rahim @ A.K.Rahim Bassha reported as (2018)2DCR589, MadrasHighCourt. He further argued that complainant has also not shown the alleged rent in his ITR despite the fact that he files the ITR. 9.4. Ld. Counsel for accused further argued that the cheque in question was not issued by the accused in order to discharge any liability and the same was left in the possession of the complainant when he locked the rented premises of accused wherein his belongings were kept including his cheque book when accused failed to pay the small amount of rent to him due to the demise of his mother. He further argued that complainant has forged the signatures of accused on the cheque in question. Ld. Counsel further argued that accused did not receive the legal demand notice allegedly sent by the complainant.
9.5. Ld. Counsel futher argued that the liability of the cheque amount was never due against the accused. Hence present complaint is liabile to be dismissed since accused has successfully discharged his burden to rebut the presumption of law in favour of complainant, if any raised.
10. Now, the foremost provision of law to settle the entire dispute/controversy between the parties herein is Sec. 138 of NI Act and the same is being reproduced hereinafter for the ready reference:-
"138. 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 NIDHI CC No. 780/2021 Braham Singh Bhati Vs. Deepak Verma @ Neeraj Verma Page no. 6 of 15 BALA Digitally signed by NIDHI BALA Date: 2023.02.15 17:07:36 +0530 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 be extended 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 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 of other liability" means a legally enforceable debt or other liability.
10.1 The essential ingredients in order to attract Sec. 138 of NI Act, 1881 are as following:
i) The cheque for an amount is issued by the drawer to the payee/complainant on a bank account being maintained by him.
ii) The said cheque is issued for the discharge, in whole or in part of any debt or liability.
iii) The cheque is returned by the bank unpaid on account of insufficient amount to honour the cheque or it exceeds the amount arranged to be paid from that account by an agreement made with the bank.
iv) The cheque is presented within 3 months from the date on which it is drawn or within the period of its validity.
v) within 30 days a legal demand notice is issued by the payee or the holder in due course to the drawer of the cheque on receipt of information by him from the bank regarding the dishonour of the cheque.
vi) The drawer of the said cheque fails to make payment of the said amount of the money as demanded in the legal demand notice to the payee or the holder in due course within 15 days of the reciept of said notice.
vii) The debt or other liability against which the cheque was issued is legally enforceable.
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11. Now, coming to the facts of the present complaint case keeping in view the essential ingredients of section 138 of NI Act.
11.1. In this case, accused has not admitted his signatures on the cheque in question, however, it is not in dispute that the cheque in question belongs to him of a bank account being maintained by him and he further denied the fact of filling up the cheque in question. Complainant has failed to examine the bank witness to prove the fact that the cheque in question bears the signatures of accused only. Therefore complainant has failed to prove essential ingredient(i) against the accused.
11.2. Further, accused has not admitted the fact of dishonour of cheque in question, however, keeping in view Section 146 of NI Act, another essential ingredients (iii) and
(iv) stand proved against the accused.
11.3. Now, w.r.t essential ingredients (v) and (vi), it is not in dispute that the address of accused provided by Complainant in records on which he had sent the legal demand notice, is correct and keeping in view Sec.27 of the General clauses Act,1897 as well as settled law in this regard in the case of C.C Alavi Haji Versus Palapetty Mudh. & Anr 2007 6 SCC 555 wherein it was categorically held that Section 27 of General Clauses Act gives rise to a presumption that service of notice has been effected when it is sent to the correct address by registered post. Unless and until the contrary is proved by the addressee, service of notice is deemed to have been effected at the time at which the letter would have been delivered in the ordinary course of business. Similar view has been taken the Hon'ble Supreme Court in Subodh S. Salaskar Versus Jay Praksh M.Shah & Anr.(2008) 13 SCC 689. And in the case in hand, accused has failed to prove otherwise and vaguely denied the fact of receiving the legal demand notice sent to him by Complainant and Complainant has relied upon the computer generated tracking report for the speed post whcih shows the delivery to accused. Therefore the essential ingredients (v) and (vi) also stand proved.
12. Now coming to the last and the remaining core ingredient (ii) and (vii) of section 138 of NI Act as discussed in preceding Para 10.1 and the real issue of NIDHI CC No. 780/2021 Braham Singh Bhati Vs. Deepak Verma @ Neeraj Verma Page no. 8 of 15 BALA Digitally signed by NIDHI BALA Date: 2023.02.15 17:07:45 +0530 controversy herein i.e. whether the cheque in question was issued in discharge of any debt or liability, whole or in part. Section 139 of the NI Act is germane to this and according to Section 139 of Negotiable Instruments Act, which mandates that unless the contrary is proved, it is to be presumed that the holder of a cheque received the cheque of the nature referred to in Section 138 of NI Act for the discharge, in whole or in part, of any debt or other liability. In the case in hand, accused has not admitted his signatures on the cheque in question and also denied its particulars having been written by himself. He further denied the fact of giving the cheque in question to complainant to discharge any debt or liability, rather accused stated that complianant has misappropriated his cheque which was left in his rented accommodation along with his other belongings when complainant locked the premises upon his failure of paying small amount of rent to the complainant. Accused further alleged that it is the complainant who might have forged his signatures on the cheque in question since the same does not bear his signatures. Accused has further denied the alleged cheque amount having been given against the arrears of rent towards the complainant. Further, complainant has failed to examine the drawee bank to prove the signatures of accused on the cheque in question or the cheque in question having been issued by the accused instructing the drawee bank to honour the amount mentioned in it. Therefore initial presumption of section 139 of NI Act does not arise in favour of the complainant which is being reproduced hereinafter for ready reference:-
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.
12.1. It is settled law now that once accused/drawer of the cheque admits his signatures on the cheque then the presumption of law as provided in Section 139 of NI Act has to be raised in favour of the holder of the cheque and it is explicit in the said provision that the said presumption shall remain untill contrary is proved. In K. Bhaskaran vs Sankaran Vaidhyan Balan And Anr, (1999) 7 SCC 510, the Hon'ble Supreme Court held as hereunder:
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"9. As the signature in the cheque is admitted to be that of the accused, the presumption envisaged in Section 118 of the Act can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears.
Section 139 of the Act enjoins on the court to presume that the holder of the cheque received it for discharge of any debt or liability. The burden was on the accused to rebut the aforesaid presumption..."
In the case in hand accused has not admitted his signatures on the cheque in question and also denied the fact of issuing the same in favour of the complainant. Now the point for consideration here is whether the fact of drawing the cheque in question by the accused is proved in the present case or not since accused has even denied his signatures on the cheque in question. Section 6 of NI Act defines cheque which says a "cheque" is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand and it includes the electronic image of a truncated cheque and a cheque in the electronic form. Section 7 of NI Act defines the term "Drawer" as the maker of a bill of exchange or cheque. Now, in the present case the cheque in question may not be called having been drawn by the accused since the same does not bear the signatures of accused as denied by the accused and complainant failed to lead any evidence to prove otherwise since the drawee bank was not even examined on behalf of complainant. Therefore the initial presumtion of section 139 of NI Act does not arise in favour of the compainant.
12.2. Further in Rangappa v. Sri Mohan, (2010) 11 SCC 441, the Hon'ble Supreme Court has held that the presumptions under Sections 118(a) and 139 of the NI Act are rebuttable in nature and for rebuttal of the same accused need not even step into the witness box as he can rebut the same by placing reliance on the material brought on record by the complainant. It is also a well settled legal position that the presumptions can be rebutted even by raising presumptions of fact and law on the basis of material available on record. It is further well settled that the standard required from the accused to prove his defence is preponderance of probabilities and accused need not prove his defence beyond reasonable doubts. Again in Basalingappa vs Mudibasappa (2019) 5 SCC 418, the Hon'ble Supreme Court categoracally held as under:-
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"10. The complainant being holder of cheque and the signature on the cheque having not been denied by the accused, presumption shall be drawn that cheque was issued for the discharge of any debt or other liability. The presumption under Section 139 is a rebuttable presumption. Before we refer to judgments of this Court considering Section 118 and 139, it is relevant to notice the general principles pertaining to burden of proof on an accused especially in a case where some statutory presumption regarding guilt of the accused has to be drawn."
12.3. Needless to mention herein that the presumption contemplated under Section 139 of the Negotiable Instruments Act, is a rebuttable presumption. However, the onus of proving that the cheque was not in discharge of any debt or other liability is on the accused drawer of the cheque. Now, whether or not the accused has been able to rebut the said presumption is a question of fact which needs to be decided after appreciation of entire evidence led on behalf of both the parties in the light of guiding principles laid down by the Hon'ble Supreme Court as mentioned herein above and depends upon the facts and circumstances of each case. In the present case, since the accused has not admitted his signatures on cheque in question, therefore the initial presumption in terms of Section 118 (a) and 139 of the NI Act does not arise in favour of the complainant regarding existence of legally enforceable liabililty and also regarding issuance of cheque in question by the accused in favour of complainant in discharge of his aforesaid liability. And complainant had the burden to prove the said fact by leading any cogent and reliable evidence.
12.4. The accused has chosen not to examine himself as a witness or lead defence evidence, so, now it is to be seen in the light of cross-examination of the complainant and defences taken, whether accused is successful in dislodging the case of the complainant by bringing on record such facts/material/circumstances which could result the testimony/evidence of complainant into disbelief. Complainant has been unable to reveal the actual amount of the arrears of rent due against the accused and also failed to disclose the period of default made by the accused in paying the rent since during his cross examination, complainant himself stated that accused used to pay the monthly rent of Rs. 9,000/- in lieu of Rs. 11,000/-. Further, complainant himself admitted a document produced by the accused during his cross examination having been written in his own handwriting and having been sent to accused by him NIDHI CC No. 780/2021 Braham Singh Bhati Vs. Deepak Verma @ Neeraj Verma Page no. 11 of 15 BALA Digitally signed by NIDHI BALA Date: 2023.02.15 17:07:59 +0530 through Whats App wherein it is mentioned that the arrears of rent due against the accused on 31.03.2021 was Rs. 10,765/-. There are multiple contradictions in the testimony of complainant and it appears that complainant himself has taken contradictory stands w.r.t the liability of accused qua the cheque amount in question.
Therefore complainant has failed to prove the fact that the cheque amount in question was outstanding as liability against the accused towards the complainant. In Dashrathbhai Trikambhai Patel vs Hitesh Mahendrabhai Patel (2023)1 Supreme Court Cases 578, Hon'ble Supreme Court categorically observed as under:-
"15. This Court in NEPC Micon Ltd. v. Magna Leasing Ltd.6 held that the Courts must interpret Section 138 with reference to the legislative intent to supress the mischief and advance the remedy. The objective of the Act in general and Section 138 specifically is to enhance the acceptability of cheques and to inculcate faith in the efficacy of negotiable instruments for the transaction of business. Section 138 criminalises the dishonour of cheques. This is in addition to the civil remedy that is available. Through the criminalisation of the dishonour of cheques, the legislature intended to prevent dishonesty on the part of the drawer of a negotiable instrument. The interpretation of Section 138 must not permit dishonesty of the drawee of the cheque as well. A cheque is issued as security to provide the drawee of the cheque with a leverage of using the cheque in case the drawer fails to pay the debt in the future. Therefore, cheques are issued and received as security with the contemplation that a part or the full sum that is addressed in the cheque may be paid before the cheque is encashed.
16. The judgments of this Court on post-dated cheques when read with the purpose of Section 138 indicate that an offence under the provision arises if the cheque represents a legally enforceable debt on the date of maturity. The offence under Section 138 is tipped by the dishonour of the cheque when it is sought to be encashed. Though a post- dated cheque might be drawn to represent a legally enforceable debt at the time of its drawing, for the offence to be attracted, the cheque must represent a legally enforceable debt at the time of encashment. If there has been a material change in the circumstance such that the sum in the cheque does not represent a legally enforceable debt at the time of maturity or encashment, then the offence under Section 138 is not made out.
28. A Division Bench of the Kerala High Court has held in Joseph Sartho v. Gopinathan12 that since the representation in the cheque was for a sum higher than the amount that was due on the date that it was presented for encashment, the drawer of the cheque cannot be convicted for the offence under Section 138 of the Act. The High Court of Delhi addressed the same issue in Alliance Infrastructure Project Ltd. v. Vinay Mittal13. The High Court observed that when NIDHI part payment is made after the cheque is drawn, the payee has the BALA option of either taking a new cheque for the reduced amount or by Digitally signed by NIDHI BALA Date: 2023.02.15 17:08:04 +0530 CC No. 780/2021 Braham Singh Bhati Vs. Deepak Verma @ Neeraj Verma Page no. 12 of 15 making an endorsement on the cheque acknowledging that a part payment was made according to the provisions of Section 56 of the Act. It was also held that the notice of demand which requires the drawer of the cheque to make payment of the whole amount represented in the cheque despite receiving part repayment against the sum, before the issue of notice, cannot be valid under Section 138(b) of the Act. A similar view was taken by the High Court of Gujarat in Shree Corporation v. Anilbhai Puranbhai Bansal.
29. Under Section 56 read with Section 15 of the Act, an endorsement may be made by recording the part-payment of the debt in the cheque or in a note appended to the cheque. When such an endorsement is made, the instrument could still be used to negotiate the balance amount. If the endorsed cheque when presented for encashment of the balance amount is dishonoured, then the drawee can take recourse to the provisions of Section 138. Thus, when a part- payment of the debt is made after the cheque was drawn but before the cheque is encashed, such payment must be endorsed on the cheque under Section 56 of the Act. The cheque cannot be presented for encashment without recording the part payment. If the unendorsed cheque is dishonoured on presentation, the offence under Section 138 would not be attracted since the cheque does not represent a legally enforceable debt at the time of encashment.
30. In view of the discussion above, we summarise our findings below:
(i) For the commission of an offence under Section 138, the cheque that is dishonoured must represent a legally enforceable debt on the date of maturity or presentation;
(ii) If the drawer of the cheque pays a part or whole of the sum between the period when the cheque is drawn and when it is encashed upon maturity, then the legally enforceable debt on the date of maturity would not be the sum represented on the cheque;
(iii) When a part or whole of the sum represented on the cheque is paid by the drawer of the cheque, it must be endorsed on the cheque as prescribed in Section 56 of the Act. The cheque endorsed with the payment made may be used to negotiate the balance, if any. If the cheque that is endorsed is dishonoured when it is sought to be encashed upon maturity, then the offence under Section 138 will stand attracted;
(iv) The first respondent has made part-payments after the debt was incurred and before the cheque was encashed upon maturity. The sum of rupees twenty lakhs represented on the cheque was not the 'legally enforceable debt' on the date of maturity. Thus, the first respondent cannot be deemed to have committed an offence under Section 138 of the Act when the cheque was dishonoured for insufficient funds; and
(v) The notice demanding the payment of the 'said amount of money' has been interpreted by judgments of this Court to mean the cheque Digitally signed by amount. The conditions stipulated in the provisos to Section 138 need NIDHI NIDHI BALA to be fulfilled in addition to the ingredients in the substantive part of BALA Date:
2023.02.15 17:08:08 +0530 CC No. 780/2021 Braham Singh Bhati Vs. Deepak Verma @ Neeraj Verma Page no. 13 of 15 Section 138. Since in this case, the first respondent has not committed an offence under Section 138, the validity of the form of the notice need not be decided.
13. In the case in hand complainant did not have the presumption of law in his favour under section 139 of NI Act since accused denied his signatures on the cheque in question, hence, the burden was on the complainant himself to prove that the cheque in question was drawn in his favour to discharge the liability of the cheque amount. However, complainant has miserably failed to do so since his own testimony could not remain intact during his cross examnation and accused has successfully able to create the doubt in his testimony as well as rendered his testimony so unrelaible that any prudent man would not believe. It appears from the testomony of the complainant that he has exaggerated the liability of accused and filled the cheque in question accordingly since accused has categorically denied his signatures on the cheque in question and having filled its particulars.
14. The defence taken by accused has remained intact throughout the proceedings whenever his statement in this regard was recorded such as at the time of framing of notice, during cross examination of complainant and at the time of his statement recorded under section 313 Cr.P.C, 1973. Again, the accused is only supposed to discharge his onus not beyond the reasonable doubt but on the principle of preponderance of probabilities which is again a settled position of law and it has been reitereted again and again through the precedents that the said appreciation depends upon the facts and circumstance of each and every case and no air tight formula can be adopted in order to ascertain as to whether accused has been successful in dislodging the testimony of complainant before the court.
14.1. On the aspects of preponderance of probabilities, the accused has to bring on record such facts and such circumstances which may lead the court to conclude either that the consideration did not exist or that its nonexistence was so probable that a prudent man would, under the circumstances of the case, act upon the plea that the consideration did not exist. The Hon'ble Supreme Court in Rohitbhai Jivanlal Patel NIDHI BALA CC No. 780/2021 Braham Singh Bhati Vs. Deepak Verma @ Neeraj Verma Page no. 14 of 15 Digitally signed by NIDHI BALA Date:
2023.02.15 17:08:13 +0530 vs State of Gujarat and Another 2019) 18 SCC 106 and in various other rulings have time and again, emphasized that though there may not be sufficient negative evidence which could be brought on record by the accused to discharge his burden, yet mere denial would not fulfil the requirements of rebuttal as envisaged under section 118 and 139 of the NI Act. However, in the present case accused has not merely denied the liability but has proved the same by rebutting the testimony of complainant through his cross examination which led this court to believe that the non-existence of the consideration for which cheque in question is allegedly issued to complainant by accused, is so probable that any prudent man would consider the same in the facts and circumstances similar to the case in hand.
15. In the present case in hand keeping in view the facts and circumstances of the present case , the presumption of law as per section 118(a)and section 139 of NI Act do not arise in favour of complainant and complainant has failed to prove all the ingredients of section 138 of NI Act.
16. This Court has considered opinion that the complainant has been unable to prove his case against the accused for the offence under Sec. 138 Negotiable Instruments Act. Resultantly, the accused is, thus, stands aquitted for the said offence and the bail bond and surety bond furnished by him before this court during trail stands cancelled and surety stands discharged and he be returned his orginal document, if any, taken on record for the said purpose. Digitally signed NIDHI byDate:NIDHI BALA BALA 2023.02.15 17:08:17 +0530 Announced in Open Court (NIDHI BALA) today on 15.02.2023 MM (NI Act) Digital Court, NORTH EAST, KARKARDOOMA Certified that this judgment contains 15 pages and each page bears my signatures.
Digitally signedNIDHI byDate:NIDHI BALA BALA 2023.02.15 17:08:21 +0530 (NIDHI BALA) MM (NI Act) Digital Court, NORTH EAST,KARKARDOOMA/15.02.2023 CC No. 780/2021 Braham Singh Bhati Vs. Deepak Verma @ Neeraj Verma Page no. 15 of 15