Delhi District Court
Relied Upon Basalingappa vs . Mudibasappa (2019) 5 Scc 418 And ... on 1 April, 2021
IN THE COURT OF METROPOLITAN MAGISTRATE (NI-03),
CENTRAL, TIS HAZARI COURTS, DELHI
Presided over by: Ms. Isha Singh
Case no. : 522207/2016
Unique Case ID no. : DLCT020038752014
In the matter of :
Deepa Rani
R/o 351/1, Bagh Kade Khan,
Kishan Ganj,
Delhi ............ COMPLAINANT
Versus
Jitender Kumar
R/o Flat No. 694, Type I
Gulabi Bagh,
Delhi ............ACCUSED
1. Name of the Complainant : Deepa Rani
2. Name of the Accused : Jitender Kumar
3. Offence complained of or proved : Section 138, Negotiable Instruments
Act, 1881
4. Plea of the Accused : Not Guilty
5. Date of Filing : 04.12.2014
6. Date of Reserving Order : 12.03.2021
7. Date of Pronouncement : 01.04.2021
CC No. 522207/16 Deepa Rani v. Jitender Kumar Page 1 of 21
8. Final Order : ACQUITTED
BRIEF STATEMENT OF REASONS OF DECISION
FACTUAL MATRIX
1. The present complaint has been filed by Ms. Deepa Rani (hereinafter "complainant")
against Sh. Jitender Kumar (hereinafter "accused") under Section 138 of the
Negotiable Instruments Act, 1881 (hereinafter "NI Act").
2. The substance of allegations, as contained in the complaint, are as follows:
(a) In the month of September 2013, the accused along with his wife approached the
complainant and showed the urgent need for Rs.1,00,000/- as the accused was in
debt and had to pay off some creditor, therefore requested the complainant for a
friendly loan of Rs.1,00,000/-. Since the accused was known to the complainant,
therefore, the complainant advanced a friendly loan of 80,000/- to the accused on
the assurance that the accused will return the money as and when required by the
complainant. Then again, in a similar manner the accused approached the
complainant in November 2013 and requested for a friendly loan of Rs.50,000/-
and during that time the complainant advanced a loan of Rs. 35,000/-. At this time
the accused again gave the assurance that he will return the total money that has
been lent to him by the complainant as and when required. Then again, in May
2014, the accused requested for a friendly loan of Rs. 1,00,000/- from the
complainant on the pretext that he has applied for a bank loan and shall be
returning the entire loan amount to the tune of Rs.2,15,000/- to the complainant
once the loan is cleared. Relying upon old ties with the accused, the complainant
further granted him a friendly loan of Rs. 1,00,000/-.
(b) Thereafter, the complainant approached the accused in July 2014 for the return of
money, when the accused issued two cheques to her, one bearing no. 791805 dated
23.09.2014 in the sum of Rs. 2,00,000/- (hereinafter referred to as "cheque in
question") and another bearing no. 791803 dated 14.10.2014 in the sum of
Rs.15000/-, for which the complainant lodged a separate complaint case.
CC No. 522207/16 Deepa Rani v. Jitender Kumar Page 2 of 21
(c) The aforesaid cheque bearing no. 791805 was presented by the complainant for
payment through her banker - State Bank of India, Shopping Complex, Gulabi
Bagh, Delhi-110007 which was returned as dishonoured with the remarks "Funds
Insufficient" vide separate return memo dated 26.09.2014. Thereafter, the
complainant sent a legal notice dated 20.10.2014 which was duly served on the
accused on 21.10.2014. Despite service, the accused failed to repay the cheque
amount within the stipulated period and hence, the present complaint was filed on
04.12.2014 under section 138 of the NI Act.
APPEARANCE OF THE ACCUSED
3. Pre-summoning evidence was led by the complainant and upon finding a prima facie
case against the accused, he was summoned to face trial vide order dated 24.01.2015,
and after his appearance, notice of accusation under Sec. 251, The Code of Criminal
Procedure, 1973 (hereinafter "CrPC") was served upon him on 18.05.2015 to which
he pleaded not guilty and claimed trial. After perusal of the cheque, the accused stated
that the cheque was issued as a blank signed cheque to the complainant and he has not
filled any of the particulars. He further stated that he received the legal demand
notice. At the time of framing of notice under Sec. 251 CrPC, the accused took the
following plea of defence:
"I have taken a loan of Rs.80,000 from the complainant in three
installments in the year 2013. I have repaid the loan in the sum of Rs.
15,000/-."
4. Considering the plea of defence raised, accused was allowed the opportunity under
Sec. 145(2) NI Act, to cross-examine the complainant vide order dated 18.05.2015.
5. During the course of trial, the complainant led the following oral and documentary
evidence in order to prove his case beyond reasonable doubt:
Oral Evidence
CW1 Deepa Rani (complainant)
Documentary Evidence
Ex. CW 1/1 Cheque in question bearing no.
791805 dated 23.09.2014 in the sum
of Rs.2,00,000/-.
Ex. CW 1/2 Return Memo dated 26.09.2014
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Ex. CW 1/3 Legal Notice dated 20.10.2014
Ex. CW 1/4 (colly) Postal Receipts
Ex. CW 1/5 Internet-generated Tracking Report
Once the aforesaid evidence was led, thereafter cross-examination was closed vide a
separate statement of the complainant recorded to that effect.
STATEMENT OF THE ACCUSED
After the completion of complainant evidence and before the start of defence
evidence, in order to enable the accused to personally explain the circumstances
appearing in evidence against him, his statement under Sec. 313, CrPC was recorded
without oath. In his statement under Sec. 313 CrPC, the accused denied the
complainant's version and stated that he had taken only a loan of Rs.80,000/- on an
interest of 10% per month from the complainant in 3 installments out of which
Rs.30,000/- was taken on 16.09.2011, thereafter another Rs.30,000/- was taken on
16.07.2012 and lastly Rs.20,000/- was taken on 20.10.2013 however interest was paid
every month. In his statement under Sec. 313 CrPC, the accused admitted that the
cheque was issued by him and that it bears his signatures, however he denied filling in
the particulars. As regards the legal demand notice, he admitted the receipt thereof.
Apart therefrom, he stated that:
"On 26.12.2013, I had returned Rs.65,000/- in cash to the complainant.
Thereafter, only Rs.15,000/- towards principal amount and Rs. 28,000/-
towards interest remain to be paid, which I did not have on 26.12.2013
and I had told the complainant that I shall return the said remaining
amount as and when I will have money with me. I had returned
Rs.15,000/- to the complainant before the Court of Ld. MM Sh. Bharat
Chugh. I do not have money to pay Rs.28,000/- towards interest and
same may be condoned."
6. Pursuant thereto, the accused entered the witness box himself and examined
himself as a witness after moving an application under Sec. 315 CrPC.
Oral Evidence
DW1 Jitender Kumar (Accused)
CC No. 522207/16 Deepa Rani v. Jitender Kumar Page 4 of 21
7. Thereafter, final arguments were heard in the present case, I have heard the
learned counsels on both sides and given my thoughtful consideration to the
material appearing on record.
ARGUMENTS
8. It has been argued by the Ld. Counsel for the complainant that all ingredients of
Sec. 138 NI Act, have been fulfilled in the present case and that the complainant
has duly proved her case. It was argued that accused admitted his signatures on
the cheque in his plea of defence recorded at the time of framing of notice under
Section 251 Cr.P.C as well as in his statement U/s 313 Cr.P.C. He argued that in
answer to notice under Section 251 Cr.P.C accused took the stand that he had
taken loan of Rs. 80,000/- in three installements in the year 2013 from
complainant out of which he had repaid Rs.15,000/- whereas in his statement
under section 313 Cr. P.C and in defence evidence the stand taken was that
although a loan of Rs.80,000/- was only taken, however the same was taken at
an interest of 10% per month and even the amount of Rs.65,000/- was also paid
to the complainant in cash, although the date of repayment varied at both times.
It was thus argued that the accused had taken different and inconsistent lines of
the defence. He therefore, argued that there was inconsistency in the evidence of
accused. He also argued that accused never gave reply to the legal demand
notice nor did he file any complaint for misuse of his cheques. He further argued
that no proof of repayment of Rs,65,000/- as alleged by the accused in his
defence, has been furnished by him. It was argued that accused failed to raise the
probable defence to disprove the case of complainant and to rebut the
presumptions under Section 118 and Section 139 NI Act. The Ld. Counsel for
the complainant has relied upon Jugesh Sehgal v. Shamsher Singh Gogi (2009)
14 SCC 683 and Bir Singh v. Mukesh (2019) 4 SCC 197. As such, it is prayed
that the accused be punished for the said offence.
9. Per contra, Ld. Counsel for the accused has argued that the complainant has
failed to establish his case beyond reasonable doubt. He argued that actually
only loan of Rs. 80,000/- was taken by accused from complainant and accused
had already repaid Rs. 65,000/- in cash to the complainant and another
Rs.15,000/- towards the principal amount was paid in another complaint case
CC No. 522207/16 Deepa Rani v. Jitender Kumar Page 5 of 21
filed by the complainant in another court which is duly admitted by the
complainant as well. He also argued that complainant did not sufficiently
disclose the sources of funds for present loan. He argued that there was no
written document of the loan. He argued that evidence of complainant suffered
from material lapses and was not sufficient to establish the case against accused.
He submitted that complainant has failed to prove her case beyond reasonable
doubt It is his case that the initial burden to prove debt always remains on the
complainant, which he has not discharged as the complainant has failed to prove
the existence of debt/liability to the extent of Rs.2,00,000. Further, the Ld.
Counsel for the accused has argued rebutting the presumptions raised against the
accused. In order to buttress his submissions, ld. Counsel for the accused has
relied upon Basalingappa vs. Mudibasappa (2019) 5 SCC 418 and Kulvinder
Singh v. Kafeel Ahmad 2014 (2) JCC (NI) 100. As such, it is prayed that the
accused be acquitted.
INGREDIENTS OF THE OFFENCE
10. Before dwelling into the facts of the present case, it would be apposite to discuss
the legal standards required to be met by both sides. In order to establish the
offence under Section 138 of NI Act, the prosecution must fulfil all the essential
ingredients of the offence. Perusal of the bare provision reveals the following
necessary ingredients of the offence: -
First Ingredient: The cheque was drawn by a person on an account
maintained by him for payment of money and the same is presented
for payment within a period of 3 months from the date on which it is
drawn or within the period of its validity;
Second Ingredient: The cheque was drawn by the drawer for
discharge of any legally enforceable debt or other liability;
Third Ingredient: The cheque was returned unpaid by the bank due to
either insufficiency of funds in the account to honour the cheque or
that it exceeds the amount arranged to be paid from that account on
an agreement made with that bank;
Fourth Ingredient: A demand of the said amount has been made by
the payee or holder in due course of the cheque by a notice in writing
CC No. 522207/16 Deepa Rani v. Jitender Kumar Page 6 of 21
given to the drawer within thirty days of the receipt of information of
the dishonour of cheque from the bank;
Fifth Ingredient: The drawer fails to make payment of the said
amount of money within fifteen days from the date of receipt of notice.
11. The accused can only be held guilty of the offence under Section 138 NI Act if the
above-mentioned ingredients are proved by the complainant co-extensively.
Additionally, the conditions stipulated under Section 142 NI Act have to be fulfilled.
12. Notably, the first, third, fourth and fifth ingredient have been duly proved without
there being any real controversy regarding the same.
(a) The complainant has proved the original cheque, Ex. CW1/1, which the accused
has not disputed as being drawn on the account of the accused. It is not disputed
that the cheque in question was presented within its validity period.
(b) The cheque in question was returned unpaid vide return memo dated 26.09.2014
Ex. CW1/2 due to the reason, "funds insufficient".
(c) The complainant has proved on record the legal notice vide Ex. CW1/3 dated
20.10.2014, postal receipts vide Ex. CW1/4 (colly) and tracking report Ex. CW1/5
to prove the fact of sending legal notice. Even the accused at the stage of framing
of notice under Sec.251 CrPC as well as recording of statement under Sec. 313
CrPC, has admitted the receipt of legal notice.
13. Although the Ld. Counsel for accused has raised a question as to propriety of legal
notice. He has argued that the legal notice has been signed on 18.10.2014 however, the
complaint as well as the evidence by way of affidavit reads that the notice is dated
20.10.2014. He has argued as to how can notice be signed even before its preparation.
This argument lacks merit. The difference in date is innocuous and, in any case, for the
purposes of limitation, the date of sending of legal demand notice and its receipt, is
material, which is already admitted by the accused. Therefore, this argument of the
counsel of the accused is not tenable.
14. On analysis of the facts and legal position stated above, the Court finds the parties to
be at variance on the primary issue i.e. whether the cheque in question were issued in
favour of the complainant in order to discharge the legal liability of the accused which
forms the second ingredient in the Section 138, NI Act.
CC No. 522207/16 Deepa Rani v. Jitender Kumar Page 7 of 21
15. As regards the second ingredient, it has to be proved that the cheques in question
were drawn by the drawer for discharging a legally enforceable debt. In the present
case, the signatures of the accused on the cheques in question are not denied. In his
plea of defence in notice of accusation framed under Sec.251 CrPC as well as in
statement recorded under Section 313 CrPC, the accused has admitted issuance of
cheques, however, it is his case that the loan lent by the complainant was not of
Rs.2,00,000/-, but it was for only Rs.80,000, principal amount of which has also been
repaid however, interest remains for which the present complaint has been filed.
Under the NI Act, once the accused admits his signatures on the cheque, certain
presumptions are drawn, which result in shifting of onus. Section 118(a) of the NI Act
lays down the presumption that every negotiable instrument was made or drawn for
consideration. The second presumption is contained under Section 139 of NI Act. The
provision lays down the presumption that the holder of the cheque received it for the
discharge, in whole or part, of any debt or other liability. The combined effect of these
two provisions is a presumption that the cheque was drawn for consideration and
given by the accused for the discharge of debt or other liability. Both the sections use
the word "shall", which makes raising the presumption imperative for the court, once
the foundational facts required to raise the presumption are proved {Reliance is
placed upon Hiten P. Dalal vs. Bratindranath Banerjee (2001) 6 SCC 16}.
16. Further, it has been held by a three-judge bench of the Hon'ble Apex Court in the case
of Rangappa vs. Sri Mohan (2010) 11 SCC 441 that the presumption contemplated
under Section 139 of NI Act includes the presumption of existence of a legally
enforceable debt. Once the presumption is raised, it is for the accused to rebut the
same by establishing a probable defence. The principles pertaining to the
presumptions and the onus of proof were recently summarized by the Hon'ble Apex
Court in Basalingappa vs. Mudibasappa (2019) 5 SCC 418 as under:
"25. We having noticed the ratio laid down by this Court in the above
cases on Section 118(a) and 139, we now summarise the principles
enumerated by this Court in the following manner:
25.1. Once the execution of cheque is admitted Section 139 of
theAct mandates a presumption that the cheque was for the discharge
of any debt or other liability.
CC No. 522207/16 Deepa Rani v. Jitender Kumar Page 8 of 21
25.2. The presumption under Section 139 is a rebuttable
presumption and the onus is on the accused to raise probable defence.
The standard of proof for rebutting the presumption is that of
preponderance of probabilities.
25.3. To rebut the presumption, it is open for the accused to rely
on evidence led by him or the accused can also rely on the materials
submitted by the complainant in order to raise a probable defence.
Inference of preponderance of probabilities can be drawn not only
from the materials brought on record by the parties but also by
reference to the circumstances upon which they rely.
25.4. That it is not necessary for the accused to come in the
witness box in support of his defence. Section 139 imposed an
evidentiary burden and not a persuasive burden.
25.5. It is not necessary for the accused to come in the witness
box to support his defence."
17. The presumptions raised under Section 118(b) and Section 139 are rebuttable
presumptions. A reverse onus is cast on the accused, who has to establish a probable
defence on the standard of preponderance of probabilities to prove that either there
was no legally enforceable debt or other liability. In the present case, ld. counsel for
the accused has raised many defences to rebut the presumption, which are discussed
hereinbelow:
DEFECIENCIES/DISCREPANCY IN THE COMPLAINANT'S CASE
18. Ld. Counsel for the accused has argued that the case of the complainant must stand on
its own legs and cannot take advantage of the infirmities in the case of the accused. He
has argued that the complainant in her complaint to the court, has failed to mention the
dates upon which the loan was advanced to the accused. He further argued that when
the complainant was questioned as to the dates of advancement of loan to the accused,
she expressed her inability to state the exact date as to disbursement of loan to the
accused, however she added that on two occasions when the loan of Rs.80,000/- and
Rs. 35,000/- was lent to the accused, the accused handed over duly filled cheques in
the sum of Rs.80,000/- and Rs.35,000/- on the date of advancement of those two loan
CC No. 522207/16 Deepa Rani v. Jitender Kumar Page 9 of 21
amounts. Thereafter, on the third occasion when the loan of Rs.1,00,000/- was granted
to the accused, the earlier two duly filled cheques were returned to the accused and in
place thereof, the accused issued two cheques, one amounting to Rs.2,00,000/- dated
23.09.2014 (cheque in question) and the other for Rs.15,000/.
19. Ld. Counsel for the accused has argued the complainant has taken contrary stands
since in her complaint she mentioned that the cheques were given only once after the
last loan of Rs.1,00,000/- was advanced in May 2014 and no such fact about the
accused having issued duly filled cheque in favour of the complainant at the first as
well as second occasion when a loan of Rs.80,000/- and Rs.35,000/- respectively was
given to the accused has been mentioned either in the complaint or the legal notice.
20. Ld. Counsel for the accused has further pointed out the complainant has failed to
produce any receipt which was prepared at the time of advancement of loan or any
proof of the duly-filled cheques which were supposedly issued by the accused on the
date of advancement of loans, as stated by the complainant in her cross-examination.
21. This Court is in agreement with this contention of the Ld. Counsel for the accused that
the evidence of the complainant itself makes her case doubtful. The complainant CW-
1, in her examination-in-chief and her complaint has mentioned that loan was
advanced to the accused once in September 2013, thereafter in November 2013 and
lastly in May 2014. However, the complainant did not mention any details as to the
date or the time when the loan was advanced to the accused on either of these
occasions. In her cross-examination, she further admits that no receipt was even
prepared either of the times when the loan was advanced. The above stated
circumstances go on to cast a doubt on the case of the complainant. In Vijay v.
Laxman and Anr. (2013) 3 SCC 86, the Hon'ble Supreme Court observed that:
"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."
22. Furthermore, during her cross-examination, when the complainant was questioned as
to the whether any receipt was prepared on the date of advancement of loan, the
complainant completely deviated from her examination-in-chief tendered by way of an
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affidavit and her complaint. She stated, during her cross-examination that the only
reason why no receipt was prepared at the time of advancement of loan was because
the accused, at the time of advancement of loans of Rs.80,000/- as well as that of
Rs.35,000/-, issued duly filled cheques in the name of the complainant. Thereafter, she
stated that those two cheques were returned back to the accused at the time when the
third loan was advanced to him in the sum of Rs. 1,00,000/- in May 2014, and in place
of thereof, two new cheques were issued by the accused out of which one of the
cheques in the amount of Rs.2,00,000/- is the cheque in question.
23. It is pertinent to mention here that neither has the complainant been able to recall the
numbers of the cheque that were earlier supposedly issued by the accused to her at the
occasion of lending Rs.80,000/- once and thereafter Rs.35,000/- nor has she been able
to furnish any receipt, if any that was prepared at the time of returning of the
aforementioned cheques to the accused for the cheque in question. The complainant
has only given evasive replies to such questions at the time of her cross-examination
and has failed to produce any proof as to the advancement of loan to the accused to the
tune of Rs. 2,00,000/- as claimed in the complaint. The above deficiencies in the
complainant's case go on to shake the veracity of her claim. The Hon'ble Delhi High
Court in the case of Sanjay Verma v. Gopal Halwai, 2019 SCC Online Del 7572
upheld the judgement of acquittal taking into account the fact that no date of extending
the loan or rate of interest at which such loan was extended, was mentioned in the
complaint and neither was any document executed as regards the loan nor any date as
to the repayment of loan was mentioned in the complaint.
24. It is also worth observing that if the version as narrated by the complainant during her
cross-examination is taken to be true, there is no forthcoming reason as to why the
complainant did not mention the fact as to the accused issuing her cheques on
occasions more than one. In fact, she herself admits that this fact of duly filled cheques
issued earlier in the amount of Rs.80,000/- and Rs.35,000/- does not find a mention in
the complaint as well as the legal notice. It is pertinent to observe that the complainant
has not also been completely consistent either in this new narrative as well. In her
cross-examination dated 09/01/2019, firstly she states that the accused handed over the
cheques in the amount of Rs.80,000/- and Rs.35,000/- at the time of disbursement of
loan after filling its contents and amount. However, later on in her cross-examination
of even date, she states that those cheques did not bear any date of issuance. The
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complainant has vacillated from her version multiple times during her cross-
examination which is reason enough to question her credibility.
25. Furthermore, complainant also admits that she was alone at her house at the time of
advancement of loan to the accused in the sum of Rs.80,000/- as well as Rs.35,000/-.
Although the complainant has admitted in her cross-examination that at the time of
advancement of loan of Rs.80,000/- to the accused in September 2013, both the
accused and his wife were present for taking of the loan amount, however, let alone
examining the wife of the accused in order to prove the loan transaction, the
complainant did not even include her name in her list of witnesses. Even apart
therefrom, the complainant has not mentioned about any third person before whom the
friendly loan of amount of Rs. 35,000/- or Rs. 1,00,000/- was advanced.
26. It is pertinent to mention here that even the conduct of the complainant is not of a
prudent person. She advanced loans, one after the other, to the accused, even though
the earlier loans remained unpaid. During her cross-examination, the complainant
admits that, at the time when Rs.80,000/- and Rs.35,000/- was lent to the accused, the
accused did not state any specific time of repayment, however only stated that the
same shall be returned as and when money is arranged. However, even despite non-
payment of the earlier loan amounts, the complainant further lent Rs.1,00,000/- to the
accused who then stated that the entire loan amount to the tune of Rs.2,15,000/- shall
be returned in two months' time. It is worth observing that even when no definite time
was quoted by the accused as to the repayment of loan, the complainant chose not to
keep any record of the entire transaction or prepare any receipt at the time of
advancement of loan. It is the case of the complainant that the accused wanted to pay
off some creditor which is why the loan was advanced to him each time, however
during her cross-examination, the complainant admitted having no knowledge about
these creditors to whom the accused supposedly wanted to return the money. In fact,
the complainant herself stated in her cross-examination that the accused told her that
his salary was delay for 5-6 months, which the complainant never bothered to verify
and still kept taking the accused for his word and kept advancing loans only on the
strength of cordial relations, unsupported by any documentary proof. The law has been
settled in K. John v. Tom Vargese: JT 2007 (13) SC 222 wherein the Apex Court has
observed as under:-
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"10.... The High Court was entitled to take notice of the conduct of
the parties. It has been found by the High Court as of act that the
complainant did not approach the court with clean hands. His conduct
was not that of a prudent man. Why no instrument was executed
although a huge sum of money was allegedly paid to the respondent
was a relevant question which could be posed in the matter. It was open
to the High Court to draw its own conclusion therein. Not only no
document had been executed, even no interest had been charged. It
would be absurd to form an opinion that despite knowing that the
respondent even was not in a position to discharge his burden to pay
instalments in respect to the prized amount, an advance would be made
to him and that too even after institution of three civil suits. The amount
advanced even did not carry any interest. If in a situation of this nature,
the High Court has arrived at a finding that the respondent has
discharged his burden of a proof cast on him under Section s139 of the
Act, no exception thereto can be taken."
27. As such, the accused has been able to prove the version of the complainant to be
doubtful by bringing out the inconsistencies in the evidence of the complainant
FINANCIAL CAPACITY OF THE COMPLAINANT
28. Now coming to the argument of the ld. counsel for the accused that the complainant
did not possess sufficient financial means to advance a huge loan of Rs.2,15,000/- as
claimed in the complaint. Ld. Counsel for the accused has argued that the complainant
has not been able to furnish proof of her earnings from any private job and neither has
she examined her mother-in-law who has supposedly given her the money that she has
lent to the accused. Ld. Counsel further argued that no ITR has been brought on record
to prove the financial solvency of the complainant. On the other hand, Ld. counsel for
the complainant has argued that the ITRs are not relevant for adjudication of a case
under Section 138 NI Act. He has further argued once the accused has admitted the
issuance of cheque, then the presumptions operate against him and the onus to rebut
the presumption is upon him and the complainant cannot be asked to furnish proof in
support of his case once presumption is drawn against the accused.
CC No. 522207/16 Deepa Rani v. Jitender Kumar Page 13 of 21
29. At this stage, it is pertinent to refer to the decision of the Hon'ble Supreme Court in
the case of APS Forex Services Pvt. Ltd. v. Shakti International Fashion Linkers &
Ors. 2020 SCC OnLine SC 193, it was observed by the Hon'ble Apex Court, inter
alia, as under:-
"20. ..... In the present case, the accused never questioned the
financial capacity of the complainant. 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. That is not a case here."
30. Similar views were expressed in Basalingappa (supra), wherein it was observed as
under :-
"30. We are of the view that when evidence was led before the Court
to indicate that apart from loan of Rs.6 lakhs given to the accused,
within 02 years, amount of Rs.18 lakhs have been given out by the
complainant and his financial capacity being questioned, it was
incumbent on the complainant to have explained his financial
capacity. Court cannot insist on a person to lead negative
evidence...." (emphasis supplied).
31. Thus, it becomes clear that in order to raise a probable defence, it is open to the
accused to challenge the financial means of the complainant after which the onus
shifts upon the complainant to prove the same.
32. In the case at hand, although the complainant has claimed Rs. 2 lakhs from the
accused by way of cheque in question, however in her complaint she has averred that a
loan of Rs.2,15,000/- was given to the accused in cash in three installments. As
regards the source of funds for lending the loan amount of Rs.2,15,000/-, the
complainant in her evidence by way of affidavit has stated that she made savings by
working in some private firms from time to time and apart from these savings, she was
CC No. 522207/16 Deepa Rani v. Jitender Kumar Page 14 of 21
also in possession of some money which she had saved up for herself. However, in her
cross-examination, upon being questioned as to the financial capacity to grant loan to
the tune of Rs.2,15,000/- to the accused, the complainant stated that she used to have
cash at hand as her savings and some money was also received from her mother-in-law
for the same. However, neither the mother-in-law of the complainant was examined
nor any document was brought on record by the complainant to show that money was
in fact received from the mother-in-law for lending loan to the accused. Upon being
questioned as regards her income which she supposedly saved up for lending loan to
the accused, she stated that she usually earns Rs.10,000 to Rs 15,000 by working in
her house as well as some private job. Although when she was asked about the address
of her private job, she stated that she cannot recollect her job address. Upon being
further questioned as to her source of funds, she stated that she used to sell clothes
from her house for which even she did not have any document to support. She stated
that although she has a PAN Card, however she does not know whether ITR was filed
by her. No ITR has been produced either that reflects the loan amount. In her cross-
examination, she stated that her husband is working as a driver in his own Wagon-R
car, and apart from that she has two children aged about 20 years and 18.5 years.
33. The above testimony of the complainant casts doubt on her version that she had Rs.
2,15,000/- at home which was entirely either saved up from her income of Rs 10,000
to Rs15,000 per month or given to her by her mother-in-law sans any proof towards
the same, the whole of which was also supposedly utilized for giving loan to accused.
Even considering the version of complainant as regards her monthly income to be true,
although no document has also been brought on record for the same, one cannot lose
sight of the fact of the monthly expenditures of the complainant considering the fact
that she has two children of considerable age.
34. Ld. Counsel for the accused has referred to the case titled as Kulvinder Singh v.
Kafeel Ahmad 2014 (2) JCC (NI) 100 in which the Hon'ble High Court of Delhi has
relied upon the Supreme Court judgment in the case of K. Prakashan v. P.K
Surenderan; (2008) 1 SCC 258 wherein the Hon'ble Apex Court has held that if a
huge amount of money is advanced as a loan then the person who has purportedly
advanced the loan must also show the solvency to the extent of the loan either through
the bank account or through other means.
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35. No evidence has been brought on record to show the source of funds or the proof of
solvency of the complainant. In friendly loan transactions, the source of loan assumes
importance and the complainant has not anywhere explained from where she arranged
the funds to lend to the accused.
36. Ld. Counsel for the accused further highlighted that the Hon'ble High Court of Delhi
in Kuvinder (Supra), has also held that when alleged loan is in contravention of
Section 269SS of Income Tax Act, it clearly creates doubt regarding truthfulness of
stand taken by complainant about advancement of loan. In the present case, the loan of
Rs.2,15,000/- as alleged by the complainant was advanced in cash only for which
neither any document has been brought on record nor any third party/witness to the
transaction has been examined by the complainant. In addition to that, the complainant
is not aware whether or not ITR was filed by her. The absence of any independent
evidence on record and advancement of loan of Rs.2,15,000/- in cash to the accused in
contravention of Sec. 269SS of Income Tax Act, raises doubts on the veracity of the
claim of the complainant.
37. Thus, it is brought out that though complainant was extensively cross examined as to
her financial capacity and sources of funds for the loans of Rs. 2,15,000/- given to
accused, however she failed to explain the same miserably.
OTHER DEFENCES OF THE ACCUSED
38. Another contention of the ld. counsel of the accused is that there is no legally
enforceable liability as the accused had taken only an amount of Rs. 80,000/- from the
complainant and had repaid the entire principal amount however, some of interest in
the sum of Rs.28,000/- was pending for which the present complaint has been filed.
39. In the present case, the accused has entered the witness box and deposed that he had
taken Rs.80,000/- from the complainant in three installments at an interest of 10% per
month for which he issued two blank signed cheques to the complainant by way of
security. He further deposed that he had repaid Rs.65,000/- in cash to complainant on
26.10.2013 and another 15,000/- was paid in cash to the complainant in another
complaint case before another court. As regards the interest, he deposed that he had
paid interest of 10% per month to the complainant from 2011 till 2013 and thereafter
an interest of Rs.28,000/- was pending which he was unable to pay. He further
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deposed that it is the same interest of Rs.28,000/- for which the complainant has
instituted this complaint for an exaggerated amount of Rs.2,00,000/-.
40. Ld. Counsel for complainant has argued that the accused has taken contrary stands
throughout the span of the trial. Ld. Counsel pointed out that at the stage of notice of
accusation under Sec.251 CrPC, the accused stated that only a loan of Rs.80,000/- was
taken from the complainant in three installments in the year 2013 out of which he has
already repaid Rs.15,000/-. Thereafter, Ld. Counsel pointed out that at the stage of
recording of statement of accused under Section 313 CrPC, the accused has stated that
only a loan of Rs.80,000/- was taken from the complainant at an interest of 10% per
month in three installments, out of which Rs.30,000/- was taken on 16.09.2011,
thereafter another Rs.30,000/- was taken on 16.07.2012 and lastly Rs.20,000/- was
taken on 20.10.2013 however interest was paid every month. In his statement under
Section 313 CrPC, the accused has further stated that he repaid Rs.65,000/- in cash to
the complainant on 26.12.2013 after which Rs.15,000/- towards the principal amount
were left and Rs.28,000/- were left towards the interest. Thereafter, the accused stated
that Rs.15000/- was paid in another complaint case filed by the complainant however
interest amount of Rs.28,000 was left to be paid. Lastly, Ld. Counsel for the
complainant pointed out that in his defence evidence, the accused has deposed that
although loan of Rs.80,000/- was taken from the complainant in three installments at
10% per month, however the time/year has not been mentioned by the accused. As per
the deposition of the accused, the repayment of Rs.65000/- in cash was done on
26.10.2013, which is different from the date earlier mentioned by him during
statement under Sec.313 CrPC. Ld. Counsel further argued that even if repayment was
made by the accused either on 26.10.2013 or 26.12.2013, as the case may be, no proof
of repayment has been furnished by the accused.
41. This Court is in agreement with the Ld. Counsel for the complainant as this particular
defence of the accused does not inspire confidence of the court. That is because the
accused has been inconsistent as regards the date of repayment of Rs.65,000/- to the
complainant and each time that the accused has stated the details of the loan that was
lent to him by the complainant, he has improved upon the details. Even in his cross-
examination, he has not divulged the complete details, he has merely stated that he has
borrowed Rs.30,000/- from the complainant at 10% per annum in 2011. He also
mentioned about the loan of Rs.20,000/- in 2013 and has denied the suggestions put to
CC No. 522207/16 Deepa Rani v. Jitender Kumar Page 17 of 21
him as regards loan of Rs.2,15,000/-. He has further admitted giving blank signed
cheques to the complainant in the year 2013, whereas the case of the complainant is
that the cheque was given in the year 2014.
42. Although the payment of Rs.15,000/- as deposed by the accused to have been paid by
him in another complaint case has been admitted by the complainant in her cross-
examination, however, no proof of repayment of Rs.65,000/- by the accused to the
complainant in cash has been furnished before the court. Neither has any document
been placed on record nor has any witness been examined by the accused to testify as
to the fact of this repayment.
43. Even the conduct of the accused has also been challenged by the Ld. Counsel for the
complainant. A prudent person on repayment of debt would ensure that the cheques he
issued by way of security are either returned or that stop payment instructions are
issued to the bank to avoid misuse of the cheques. Admittedly, neither of the above
was done in this case. Accused has also admitted in his defence in notice under
Sec.215 CrPC as well as that under Section 313 CrPC that he had received the legal
demand notice, however he did not send a reply to the legal notice of the complainant.
Even no police complaint has been lodged by the accused when the complainant
refused to return the cheque to him upon alleged repayment.
44. Ld. Counsel for the complainant has argued on the basis of Jugesh Sehgal v.
Shamsher Singh Gogi (2009) 14 SCC 683 that mere denial on part of the accused is
not sufficient to rebut the presumption. He has further relied upon Bir Singh v.
Mukesh (2019) 4 SCC 197 to argue that once a person signs a cheque and makes it
over to the payee, remains liable unless he adduces evidence to rebut the presumption
that the cheque had been issued for payment of debt or discharge of liability. Ld.
Counsel has argued that no evidence has been brought on record by the accused to
rebut the presumption under Sec.118 and Sec.139, NI Act.
45. At this stage, it is imperative to refer to the judgement of the Hon'ble Supreme Court
in the case of Kumar Exports v. Sharma Carpets (2009) 2 SCC 513, wherein the
Apex Court has held that in a trial under Sec. 138, NI Act a presumption will have to
be made that every negotiable instrument was made or drawn for consideration and
that it was executed for discharge of debt or liability once the execution of the
negotiable instrument is either proved or admitted. As soon as the complainant
CC No. 522207/16 Deepa Rani v. Jitender Kumar Page 18 of 21
discharges the burden to prove that the instrument, say a note was executed by the
accused, the rules of presumptions under Sections 118 and 139 of the Act help him
shift the burden on the accused. The presumptions will live, exist and survive and shall
end only when the contrary is proved by the accused, that is, the cheque was not
issued for consideration and discharge of any debt or liability. A presumption is not in
itself evidence but only makes a prima facie case for a party for whose benefit it
exists. The Apex Court further held that in a trial under Section 138 of the Act the
accused has two options. He can either show that consideration and debt did not exist
or that under the particular circumstances of the case the non-existence of
consideration and debt is so probable that a prudent man ought to suppose that no
consideration and debt existed. To rebut the statutory presumption 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 non-existence of consideration and that by leading
direct evidence because the existence of negative evidence is entirely possible nor
contemplated. At the same time it is clear that bare denial of the passing of the
consideration and existence of that, apparently would not serve the purpose of the
accused. Something which is probable has to be brought on record for getting the
burden of proof shifted to the complainant. To disprove the presumption the accused
should bring on record such facts and circumstances, upon consideration of which the
Court may either believe that the consideration and debt did not exist or their non-
existence was so probable that a prudent man would under the 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 the complainant.
46. Although the defence of repayment of the Rs.65,000/- by the accused does not appear
to be convincing to the court, however, this court is of the opinion that the accused, by
way of cross-examination of the complainant has brought on record facts and
circumstances to disprove the claim of the complainant, majority of which, as
CC No. 522207/16 Deepa Rani v. Jitender Kumar Page 19 of 21
discussed in above paragraphs, have been established by the accused and the some
referred to above are not fully proved. Loopholes in the defence of the accused would
have assumed relevance had the complainant also brought credible evidence on record
in support of her case for proving her financial capacity/source of funds.
47. Before pronouncing judgment in this matter, a clarification was sought by the
undersigned from both the parties as regards the cheque in question which has been
drawn in the sum of Rs.2,00,000/- by the accused in favour of the complainant as
alleged in the complaint. However, on a careful perusal of the cheque, it is observed
that there is an endorsement printed on the cheque which reads "Valid for Rs.1,00,000
& under". In such circumstances, question was put to the complainant as to what
compelled/prompted her to accept a cheque amounting to Rs.2,00,000/- when the
endorsement on the cheque clearly read that the same was only valid for payment of
Rs.1,00,000 and not more. Complainant, in return, failed to furnish any explanation as
regards accepting the cheque in question in ths sum of Rs.2 lakhs from the accused
when it is the case of the complainant that the cheque in question was given in part
discharge of loan liability of Rs. 2,15,000/. In fact, Ld. Counsel for the complainant
argued that the accused has purposely given such a cheque in part discharge of loan
liability of Rs.2,15,000/- and this shows that the accused never wanted to repay the
loan amount that was advanced to him. When the accused was asked to furnish
explanation as to why the cheque in question i.e., valid uptil Rs.1,00,000/- only was
given in discharge of loan of Rs.2,00,000/-, the Ld. Counsel for the accused argued
that since the inception, the stand of the accused has been that the loan of Rs.80,000/-
only was taken from the complainant. He further argued that the mere fact that the
cheque is valid for Rs.1,00,000/- or less, in fact probabilizes his defence and suggests
that the cheque was never meant to be given in discharge of a loan over and above
Rs.1,00,000/-.
48. In such set of circumstances, the version of the complainant does not inspire the
confidence of the court when otherwise also, inconsistencies have been brought out by
the accused in the case of the complainant and even the financial capacity of the
complainant has been extensively challenged for which no explanation/proof was
furnished by the complainant.
49. Thus, second ingredient is not fulfilled in the present case.
CC No. 522207/16 Deepa Rani v. Jitender Kumar Page 20 of 21
CONCLUSION
50. To recapitulate the above discussion, the accused has been successful in establishing a
probable defence on a standard of preponderance of probabilities to rebut the
presumption under Section 118 and Section 139 of NI Act by punching holes in the
case of the complainant and making the version of the complainant doubtful. Cogent
evidence is required to be proved beyond reasonable doubt to secure conviction in a
criminal trial. This court has no hesitation to hold that the case of the complainant is
more unlikely than that of the accused. The accused has been successful in
establishing a probable defence from the evidence of the complainant and the
circumstances of the case that there was no legal liability of Rs. 2,00,000/-. The
challenge raised on the financial capacity of the complainant to lend the loan amount
has not been met with any satisfactory rebuttal by the complainant. She has failed to
prove her solvency and the source of loan.
51. As a result, the complainant has failed to prove the offence beyond reasonable doubt
and the accused has been able to raise a probable defence. As such, the complaint of
the complainant is dismissed and the accused Jitender Kumar is hereby acquitted of
the offence of Section 138 of the Negotiable Instruments Act, 1881.
Digitally
signed by
ISHA ISHA SINGH
Date:
ORDER:ACQUITTED SINGH 2021.04.01 17:02:06 +0530 (Isha Singh) Announced in open court on 01.04.2021. MM / NI Act -03 / Central Delhi /01.04.2021 Note: This judgement contains 21 pages and each page has been signed by me.
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