Delhi District Court
Cc No.4993075/2016 Dilip Kumar vs . Pinky Vats 1/16 on 27 October, 2020
IN THE COURT OF MR. PRANAT KUMAR JOSHI, METROPOLITAN
MAGISTRATE, SOUTHWEST, DWARKA, NEW DELHI
In Re:
CNR No. DLSW020032372016
CC No.4993075/2016
Dilip Kumar
S/o Kanhaiya Prasad
R/o Flat No. 101, First Floor,
RZH1B, Raj Nagar,
Palam Colony, New Delhi
............Complainant
Versus
Ms. Pinky Vats
W/o Sh. Naveen Vats
R/o WZ49 C/A
Palam Village, New Delhi .............Accused
(1) Offence complained of or
proved : 138 N.I. Act
(2) Plea of accused : Pleaded not guilty
(3) Date of registration of case : 07.05.2016
(4) Date of conclusion of arguments : 29.02.2020
(5) Date of Final Order : 27.10.2020
(6) Final Order : Acquittal
CC No.4993075/2016 Dilip Kumar Vs. Pinky Vats 1/16
JUDGMENT
1. Vide this judgment 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 runs the business of construction and in the month of January 2016, complainant had approached the accused through reliable sources for purchasing of a flat/property. After the negotiation, the accused had sold the flat bearing number 101, first floor, RZ H16B, Raj Nagar, Palam Colony, New Delhi 110077 for a consideration amount of Rs. 30,50,000/ (Thirty lac and fifty thousand only). The accused had executed the documents of the said property on the joint name of the complainant and his wife namely Mrs. Sadhna Chaurasia and handed over the peaceful possession of the said property to the complainant. Copy of property document is Annexure 'A'. At the time of the possession it was noticed by the complainant that the property was not upto the living status and required some minor work/fitting. The complainant discussed the same with the accused. The husband of the accused, being a builder, offered to carry out repair work and demanded Rs. 2.5 lac for completion of work in the said property. At the time of paying the consideration amount of Rs. 3,50,000/ (thirty lac fifty thousand only), the complainant had paid Rs. 1,00,000/ (One lac only) additional towards minor/finishing work of said property on 15.02.2016. Thereafter, due to some misunderstanding the accused refused to carry out the repair work.
2.2 In order to return the advanced money taken by the accused from the complainant, the accused had issued a cheque bearing number 684331, amounting to Rs. 1,00,000/ (One Lac Only), drawn on State Bank Of Patiala, CC No.4993075/2016 Dilip Kumar Vs. Pinky Vats 2/16 Palam extension New Delhi - 110077 in the favour of the complainant with assurance that the same would be encashed on presentation.
2.3 That believing upon the representations of the accused, the complainant presented the said cheque with his banker i.e. Axis Bank. However, despite assurances, the said cheque returned unpaid with the remark "Insufficient Funds" vide cheque returning memo dated 15.02.2016.
2.4 Thereafter, having left with no other option, the complainant got issued a legal demand notice dated 01.04.2016 through his counsel calling upon the accused to pay the amount of dishonoured cheque. Same was delivered as per their respective tracking reports obtained from internet. Despite service, the accused has neither returned the amount of dishonoured cheque nor replied to the said notice. Thus, the present complaint case.
3. The present complaint case was registered on 07.05.2016 and the pre summoning evidence was led by the complainant on 02.08.2016. 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 18.11.2016. Notice U/s 251 of the Code of Criminal Procedure (hereinafter the Code) was framed against the accused on 24.01.2017, to which the accused pleaded not guilty and claimed trial. Plea of defence of the accused was recorded simultaneously.
5. Thereafter, an application U/s 145(2) of the Act was moved by the accused on 07.03.2017 and the same was allowed after hearing the arguments of both the sides vide order passed on the same day whereafter the matter was fixed for crossexamination of the complainant.
6. On 27.04.2017 the complainant adopted the contents of his PSE by way of affidavit which is Ex. CW1/1, as his examinationinchief and also relied CC No.4993075/2016 Dilip Kumar Vs. Pinky Vats 3/16 upon the documents Ex. CW1/A to Ex. CW1/F. The complainant was cross examined at length and discharged on 06.12.2017. The CE was closed vide order of the court on 26.07.2019.
7. The statement of accused Pinky Vats was recorded on 11.10.2019 under section 313 of the Code, in which all the incriminating evidence along with all the exhibited documents were put to the accused.
8. The matter was thereafter fixed for DE.
9. On 18.12.2019 the DE was recorded wherein the accused had examined her husband as DW1. The accused was crossexamined and discharged on 24.01.2020. Thereafter, the DE was closed vide separate statement of the accused and the matter was fixed for final arguments.
10. The final arguments were heard at length by me from both the parties on 29.02.2020 and the matter was fixed for 25.03.2020 for clarifications/orders. It is pertinent to mention here that on 24.03.2020 a nationwide lockdown was implemented by the Government of India in view of Corona Pandemic. The pandemic had an impact on the usual working of the court and physical hearing in the court was suspended. The hearings in the court thereafter were conducted through video conferencing as directed by the Hon'ble High Court of Delhi in order to avoid physical contact and ensure social distancing. The matter was taken up repeatedly through video conferencing but due to absence of parties, the effective order could not be passed. Eventually, the matter is taken up today i.e. on 27.10.2020 after a number of unfortunate adjournments attributable to various factors mentioned in the daily order sheets of the case record. I had heard the rival submissions made by Ld. Counsels of both the parties and given my thoughtful consideration to them.
11. 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 : CC No.4993075/2016 Dilip Kumar Vs. Pinky Vats 4/16 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 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 CC No.4993075/2016 Dilip Kumar Vs. Pinky Vats 5/16 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.
12. 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;
(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.
13. Being cumulative, it goes without saying that it is only when all CC No.4993075/2016 Dilip Kumar Vs. Pinky Vats 6/16 the aforementioned ingredients are satisfied that the person who had drawn the cheque can be deemed to have committed an offence under Section 138 of the Act.
14. 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 first ingredient of Section 138 of the Act is concerned, it is nowhere disputed that the accused had drawn the cheques on the account maintained by him. So, the first ingredient stands satisfied in the light of admissions of the accused by necessary implications.
(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 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;
CC No.4993075/2016 Dilip Kumar Vs. Pinky Vats 7/16 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"
15. It is clear from the conjoint reading of the both the provisions that ordinarily in the Cheque dishonouring cases, what the courts have 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.
16. 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.
17. 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.
18. 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 CC No.4993075/2016 Dilip Kumar Vs. Pinky Vats 8/16 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 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 CC No.4993075/2016 Dilip Kumar Vs. Pinky Vats 9/16 defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own."
19. Coming back to the facts in the present case, the defence of the accused is basically premised on one factor. The only defence of the accused is that he had issued the subject cheque as security to the accused before execution of sale deed and at the time when the complainant showed disinterest in purchasing the property from the accused.
20. As far as the first leg of the defence is concerned, the accused had cross examined the complainant at length on various aspects. The accused had first contradicted the complainant regarding the date on which the complainant had approached the accused. However the date on which the complainant approached the accused has no bearing on the merits of the case as will be made clear as we proceed. Such contradiction, hence, is a minor one and can be ignored. The accused, during the crossexamination of the complainant had also produced a document which was Mark CW1/D1. Same was admitted to be genuine document by the complainant. Hence the document stood proved being admitted by the complainant. It was also admitted by the complainant that the document Mark CW1/D1 contained no stipulation regarding repair work to be done by the accused. It was also deposed by the accused that he had been assured verbally by the accused for the repair work to be done by him. Thereafter the sale deed was produced before the court. However the same being not in dispute, does not make any difference to the case at hand. Further, another document Mark CW1/D3 was admittedly executed by the complainant and the accused. The accused had also produced document which is an account statement of the accused and the same is a part of record. However the same remained unmarked. Be that as it may, it was admitted by the complainant that the DD for Rs 23,69,101/ was credited in the account of the accused on 23.02.2016 and the possession was handed over to the complainant on 21.02.2016. It was therefore argued on behalf of the accused that how could the CC No.4993075/2016 Dilip Kumar Vs. Pinky Vats 10/16 accused get the possession of subject cheque on 12.02.2016 when he got the possession of premises on 21.02.2016 and as per para 3 of the case of the complainant only, he noticed the premises was not worth living only at the time of possession. No explanation came from the complainant on this aspect. It was however argued by Ld. Counsel for the complainant that the complainant had inspected the property before and noticed the condition before sale. However said argument belies the record of the case and the complainant has stated nowhere that he had objected to the condition of the premises before taking possession of the same. Admittedly the possession was taken by the complainant after the day of execution of sale deed Mark CW1/D2 i.e. after 16.02.2016. The said fact was admitted by the complainant in his cross dated 06.12.2017. What more is noteworthy is that the complainant in his chief Ex. CW1/1 had stated in para number 6 that he had given additional cost of Rs. 1 lac towards the minor/finishing work of the said property on 15.02.2016. The complainant further stated in para number 7 of his chief Ex. CW1/1 inter alia that the accused issued the subject cheque in order to return the advance money given to her by the complainant. However the said contention is not consistent with the documents on which the complainant has relied. Most crucial being the subject cheque. The subject cheque is dated 12.02.2016 i.e. even before the advance payment in return of which the cheque was alleged to be issued. Further the subject cheque was dishonoured on 15.02.2016 i.e. the day on which the complainant had alleged to give the advance payment in return of which the subject cheque was allegedly issued. Therefore, the contentions and the statements of the complainant does not inspire the confidence of the court and are belied by the documentary evidence placed on record. Further, the complainant had paid the balance amount of sale consideration much later and the same was credited in the account of the accused on 23.02.2016 as per his own admission in his crossexamination dated 06.12.2017. This was an unusual conduct insomuch as why would any prudent person go on to pay more amount to anyone who had not fulfilled his promise and the cheque given by him was CC No.4993075/2016 Dilip Kumar Vs. Pinky Vats 11/16 dishonoured. The reason for this benevolence of the complainant towards the accused after the dishonour of subject cheque has nowhere been explained by the complainant. Hence the story of the complainant that the subject cheque was issued in order to return the advance payment of Rs. 1 lac made by the complainant to the accused for repair works flies in the thin air and the same is not trustworthy. No document has been produced by the complainant to show that there was any such condition for repair works to be done by the accused. Even after considering Section 92 of the Indian Evidence Act, I am of the firm opinion that the complainant had failed to prove the condition of Rs. 1 lac towards the repair, the payment thereof and the dishonour of cheque given to return such amount. Thus the accused had sufficiently created the preponderance of probabilities in his favour and the initial presumption in the favour of the complainant had discharged.
21. Coming over to the defence of the accused, it was stated by her in pleas of defence under Section 251 of the Code that the subject cheque was given as a security. Later in her statement of accusation under Section 313 of the Code, it was inter alia submitted by her that the subject cheque was given to the complainant as security and assurance that in case the premises gets demolished the complainant could present the subject cheque for encashment. In her defence the accused got her husband examined as DW1. It was deposed by DW1 in his crossdated 24.01.2020 that the subject cheque was given by the accused to the complainant 45 days before the execution of sale deed. No suggestion to the contrary was put forth by the complainant after the said statement. Even otherwise, the documentary evidences placed on record show that the subject cheque got dishonoured on the same day of the execution of sale deed. Hence it does not require extraordinary mind to draw the inference that the same must have been given before the execution of sale deed Mark CW1/D1. That apart the complainant could not bring to the fore anything that could prove his case, once the initial presumption in his favour was rebutted by the accused. The entire CC No.4993075/2016 Dilip Kumar Vs. Pinky Vats 12/16 gamut of facts discussed above behooves me to believe the version put forth by the accused regarding the subject cheque being given as security. The complainant could not extract anything or produce anything that could destroy the line of defence established by the accused
22. It cannot be gainsaid that in the cases under Section 138 of the Act, the initial presumption vests in favour of the complainant. The initial burden of proof is upon the accused who has to rebut this initial presumption. However, the accused is not expected to prove his defence beyond reasonable doubt as the law makers realized that it is not possible to lead a negative evidence. It is therefore, required of the accused to bring on record the preponderance of probabilities which could cast clouds of doubt over the case of the complainant.
23. It has also been held by Hon'ble Supreme Court in Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513 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 CC No.4993075/2016 Dilip Kumar Vs. Pinky Vats 13/16 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 nonexistence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on 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."
24. The aforesaid principle was reiterated by the Hon'ble Supreme Court most recently in Rohitbhai Jivan lal Patel v. State Of Gujarat 2019 SCC Online SC 389, wherein it was held that:
20. On the aspects relating to 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 CC No.4993075/2016 Dilip Kumar Vs. Pinky Vats 14/16 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. This Court has, 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.
25. 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. 1 lac upon the accused towards him. Further the complainant has also failed to prove the factum of giving Rs. 1 lac towards the repair of the premises and the subject cheque being issued in the discharge of that payment. Hence, in present matter, accused has been able to raise a reasonable 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. Resultantly, the reverse onus cast upon him has been discharged satisfactorily.
26. Once the accused had rebutted the statutory presumptions, the onus had again shifted back upon the complainant. The presumptions under Sections 118 and 139 of the Act do not, again, come for the rescue of the complainant. The case of complainant must stands on his own legs. In the instant case, complainant has failed to discharge the burden of proof and could not prove the case beyond reasonable doubt.
27. Now, as far as the fate of the present case is concerned, the law declared by the Hon'ble Supreme Court, comes to our aid. It has been categorically held in Indus Airways Private Limited And Others v. Magnum Aviation Private Limited And Another (2014) 12 SCC 539 that
9. The Explanation appended to Section 138 explains the meaning of the expression "debt or other liability" for the purpose of Section 138. This expression means a legally enforceable debt or other liability.
CC No.4993075/2016 Dilip Kumar Vs. Pinky Vats 15/16 Section 138 treats dishonoured cheque as an offence, if the cheque has been issued in discharge of any debt or other liability. The Explanation leaves no manner of doubt that to attract an offence under Section 138, there should be a legally enforceable debt or other liability subsisting on the date of drawal of the cheque. In other words, drawal of the cheque in discharge of an existing or past adjudicated liability is sine qua non for bringing an offence under Section 138 (emphasis supplied). If a cheque is issued as an advance payment for purchase of the goods and for any reason purchase order is not carried to its logical conclusion either because of its cancellation or otherwise, and material or goods for which purchase order was placed is not supplied, in our considered view, the cheque cannot be held to have been drawn for an existing debt or liability. The payment by cheque in the nature of advance payment indicates that at the time of drawal of cheque, there was no existing liability.
28. Accordingly, the complainant in the present case has failed to prove the existence of legally enforceable debt upon the accused towards him. Hence, the offence under Section 138 of the Act cannot be said to have been proved.
29. Consequently, this court finds the accused Pinky Vats not guilty for the offence under Section 138, Negotiable Instruments Act, 1881 and acquits her accordingly.
30. This judgment contains 16 pages. Every page of this judgment has been signed by me.
31. Let a copy of this judgment be posted on the official website of District Court, Dwarka.
PRANAT Digitally signed
by PRANAT
KUMAR KUMAR JOSHI
Date: 2020.10.27
JOSHI 17:33:17 +0530
ANNOUNCED IN THE OPEN COURT (PRANAT KUMAR JOSHI)
TODAY i.e. 27th OCTOBER 2020 METROPOLITAN MAGISTRATE
DWARKA DISTRICT COURTS
NEW DELHI
CC No.4993075/2016 Dilip Kumar Vs. Pinky Vats 16/16