Delhi District Court
In Re: M/S Sri Ram Transport Finance Co. ... vs . Kamaljeet Singh on 22 February, 2023
IN THE COURT OF MS. NIDHI BALA, METROPOLITAN MAGISTRATE,
NI ACT DIGITAL COURT, NORTH EAST DISTRICT,
KARKARDOMA COURT, DELHI
IN RE: M/S SRI RAM TRANSPORT FINANCE CO. LTD.VS. KAMALJEET SINGH
1. Complaint Case no. : 348/2021
2. Date of Institution of case : 07.05.2021
3. Name of the complainant : M/s. Shriram Transport Finance Company Ltd.
3rd Floor, Mookambika Complex No.4, Lady
Desika Road, Myalapore, Chennai
Branch office at
C-1/5A, 1st Floor, Above SBI Bank,
Yamuna Vihar, Delhi -110053
4. Name of Accused person, : Kamaljeet Singh
S/o. Sh. Mahender Singh
House No. 1/10573, Mohan Park, Naveen
Shahdara, Near Dr. Johny Clinic, Delhi
5. Offence complained of : Section 138 NI Act
6. Plea of accused : Pleaded not guilty
7. Final Order : AQUITTED
8. Date of judgment : 22.02.2023
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.
2. Factual matrix of the case:-
2.1 Complainant M/S Sriram Transport Finance Company engaged in the business of finance as non banking financial company and disburses and provides loan facility to the needy persons and institutions. Mr. Gyan Singh is the branch collection manager of the complainant compnay and duly authorised to file the instant complaint and to sign any Digitally signed by NIDHI CC No. 348/2021 Shri Ram Transport Finance Ltd. Vs. Kamaljeet Singh Page no. 1 of 15 NIDHI BALA BALA Date:
2023.02.22 17:16:07 +0530 papers and do any other necessary step relating to the instant complaint vide the resolution passed by the complainant company authorizing Mr. Gyan Singh to file and defend and proceed with this complaint.
2.2. Accused approached the complainant company for financial assistance of commercial vehicle/equipment of a vehicle bearing No- DL1Z-6352 and accordingly a loan and guarantee agreement bearing no. YMNVR0801240005 (hereinafter called "the loan in question") was entered between the accused and complainant company. After taking the loan amount accused had been a defaulter in paying the required payable outstanding installment dues despite receiving the requests and reminders through telephonic messages sent on behalf of the complainant company.
2.3. As per the statement of loan account an outstanding of Rs. 7,73,381/- as on dated 04.03.2021 was existing and after repeated demands of the complainant company, accused finally agreed to repay the part liability of the said loan amount and in order to discharge of his liability, issued a cheque bearing no. 718552 dated 01.03.2021 for an amount of Rs.
4,28,000/-(Four lac Twenty eight thousand) drawn on Syndicate Bank, Shahdara Branch, Delhi (hereinafter called "the cheque in question") in favour of the complainant company with the assurance of its encashment.
2.4 As per accused's assurance, the cheque in question was presented for the encashment with the complainant's banker Axis Bank Ltd. Branch Yamuna Vihar, Delhi (within the jurisdiction of this court). However the said cheque in question was returned unpaid / dishonored for the reason "Insufficient Funds" vide cheque return memo dated 22.03.2021. Thereafter on 27.03.2021, complainant company sent a legal demand notice dated 25.03.2021 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 accused failed to make the payment of the cheque amount despite service of notice and therefore, the present complaint is filed by the complainant against the accused for the offence under Section 138 of the NI Act.
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 22.09.2021 and accused appeared accordingly alongwith legal aid counsel and NIDHI CC No. 348/2021 Shri Ram Transport Finance Ltd. Vs. Kamaljeet Singh Page no. 2 of 15 BALA Digitally signed by NIDHI BALA Date: 2023.02.22 17:16:12 +0530 he was admitted to bail. On 07.03.2022 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 admitted his signatures upon the cheque in question, however, further submitted that he gave the cheque only as security. Accused also admitted the fact of dishonour of the cheque in question and the fact of receiving the legal demand notice sent by the complainant company through counsel, however, denied its contents. The plea of accused is being reproduced hereinafter for ready reference:
"I had taken the vehicle loan from the complainant company for a vehicle for the sum of Rs. 4,28,000/- approx in the year 2018. I have paid the installments of Rs. 16,263/- against the loan till November, 2018. Thereafter, I surrendered the vehicle to the complainant company. Complainant has sold out the vehicle for Rs. 2,35,000/-. I had gone to the authority for signing the documents regarding the same.. The cheque in question had been given to the complainant as a security cheque signed in blank along with other blank signed cheques as security. I have received a notice dated 07.09.2021 sent by the complainant 2-3 days ago showing the liability of Rs. 7,11,869.42/- regarding the same loan. I do not owe the liability of the cheque amount towards the complainant. I do not want to say anything else."
4. The accused was allowed to cross examine the AR of complainant on oral submissions made by Ld. Legal aid 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, AR of the complainant (CW-1) namely Mr. Gyan Singh 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 AR of the complainant by way of affidavit.
ii) Ex. CW-1/1 : Copy of SPA executed by the complainant company authorising the AR of the complainant Mr. Gyan Singh.
iii) Ex. CW-1/2: Original Cheque bearing no. 718552 dated 01.03.2021 for an amount of Rs. 4,28,000/-(Four lac Twenty eight thousand) drawn on Syndicate Bank, Shahdara Branch, Delhi (Admitted by the accused during his statement recorded under section 294 Cr.P.C) Digitally signed by NIDHI CC No. 348/2021 Shri Ram Transport Finance Ltd. Vs. Kamaljeet Singh Page no. 3 of 15 NIDHI BALA BALA Date:
2023.02.22 17:16:17 +0530
iv) Ex. CW-1/3: Original Cheque Return Memo dtd. 22.03.2021 (Admitted by the accused during his statement recorded under section 294 Cr.P.C).
v) Ex. CW-1/4: Statutory Legal demand notice dtd. 25.03.2021 sent by Complainant to accused on 27.03.2021 (Admitted by accused in his statement recorded Under Section 294 Cr.P.C).
vi) Ex. CW-1/5, Ex. CW-1/6 and Ex. CW-1/7 : Postal receipt, Internet generated tracking report of speed post and certificate under section 65B of the Indian Evidence Act, 1872 respectively qua the legal demand notice sent to accused(Admitted by accused in his statement recorded Under Section 294 Cr.P.C).
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 outstanding against the loan in question. Accused opted to lead defence evidence and got himself examined as a witness for proving the same.
7. Final arguments have been heard at length on behalf of Complainant as well as accused and written arguments were not filed by any of the parties despite giving opportunity for the same. 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 AR of complainant and further argued that the accused has admitted his signature on the cheque in question and has vaguely denied the liability towards the complainant and therefore arises the initial presumption of section 118 and 139 of NI Act.
8.2. Ld. Counsel for the complainant has further argued that accused did not reply to the legal demand notice sent by complainant to him despite receiving the same, hence, the same should be treated as admitted. Ld. Counsel has further argued that accused has admitted the loan having been taken from the complainant company. 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 Digitally signed by NIDHI CC No. 348/2021 Shri Ram Transport Finance Ltd. Vs. Kamaljeet Singh Page no. 4 of 15 NIDHI BALA BALA Date:
2023.02.22 17:16:22 +0530 evidence to show the repayment of installments made by him against the loan in question to the complainant company.
9. ARGUMENTS ON BEHALF OF ACCUSED:
9.1. Per contra, Ld. LAC for the accused argued that the present complaint is filed through Mr. Gyan Singh, however, he is not duly authorised representative of the complainant company since the special power of attorney filed on records by the complainant is not the valid power of attorney as per the requirement of law as admittedly, the same does not even bear the photograph and signatures of power of attorney holder Mr. Gyan Singh. Further the original power of attorney was neither file nor produced before the court.
9.2. Ld. Counsel for accused further argued that the agreement qua loan in question has not been filed by the complainant, hence, complainant failed to prove the amount of loan advanced to the accused and the rate of interest for the repayment of the same. He further argued that the complainant has not even filed the loan account statement showing the outstanding amount against the accused qua the loan in question on the date of the cheque in question.
9.3. Ld. Counsel for the accused further argued that it is admitted by the AR of the complainant that the vehicle for which accused had taken the loan in question has been sold by the complainant company after taking its possession when accsued surrendered it. 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 since the same had been given to the complainant company only as security signed in blank with other blank signed cheques and complainant company has misused the security cheque of the accused and presented the same without his permission and for the amount which was not even due against the accused. Ld. Counsel futher argued that the liability of the cheque amount was never due against the accused and therefore complainant deliberately has not filed the loan account stsatement to hide the actual outstanding amount due against the accsued since the exaggerated amount has been filled in the security cheque of the accused by the employees of complainant company without any liability of accused for the said amount. Hence present NIDHI CC No. 348/2021 Shri Ram Transport Finance Ltd. Vs. Kamaljeet Singh Page no. 5 of 15 BALA Digitally signed by NIDHI BALA Date: 2023.02.22 17:16:26 +0530 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 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.
NIDHI CC No. 348/2021 Shri Ram Transport Finance Ltd. Vs. Kamaljeet Singh Page no. 6 of 15 BALA Digitally signed by NIDHI BALA Date: 2023.02.22 17:16:31 +0530
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.
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 admitted his signatures on the cheque in question but she denied the fact of filling up the cheque in question. Accused has further admitted the fact of dishonour of the cheque in question. Hence essential ingredients (i), (iii) and (iv) are duly proved against the accused.
11.2. Now, w.r.t essential ingredients (v) and (vi), it is admitted by accused during her statement recorded under section 294 Cr.P.C, 1973 that she received the statutory legal demand notice sent by complainant. Therefore the essential ingredients (v) and (vi) also stand proved against the accused.
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 controversy herein i.e. whether the cheque in question was issued in discharge of any debt or liability, whole or in part and the debt against which the cheque in question was issued is legally recoverable. 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 NIDHI CC No. 348/2021 Shri Ram Transport Finance Ltd. Vs. Kamaljeet Singh Page no. 7 of 15 BALA Digitally signed by NIDHI BALA Date: 2023.02.22 17:16:35 +0530 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. Now in the present case accused has duly admitted his signatures on the cheque in question but denied having filled the other details of the cheque. However, the said proposition has been duly observed and settled by Hon'ble Supreme Court in the case of Bir Singh versus Mukesh Kumar, (2019) 4 SCC
197. The relevant paras are being reproduced hereinafter for ready reference:-
"36. Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt.
37. A meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Sections 20, 87 and 139, makes it amply clear that a person who 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 a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted.
38. If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence."
Further reiterated in Triyambak S Hedge vs Sripad (2021) SCC Online SC 788 and these two judgements are rightly relied on by Ld. Counsel for the complainant to support his arguments. Therefore 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 for the discharge, in whole or in part, of any debt or other liability. In the case in hand, accused has admitted her signatures on the cheque in question and also admitted the fact of giving the cheque in question to complainant though not to discharge any debt or liability, thereby attracting the initial presumption of section 139 of NI Act 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.
NIDHI CC No. 348/2021 Shri Ram Transport Finance Ltd. Vs. Kamaljeet Singh Page no. 8 of 15 BALA Digitally signed by NIDHI BALA Date: 2023.02.22 17:16:40 +0530 12.1. It is settled law now that once accused/drawer of the cheque admits his/her 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:
"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..."
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:-
"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."
Digitally signed by NIDHI NIDHI BALA BALA Date:
2023.02.22 17:16:45 +0530 CC No. 348/2021 Shri Ram Transport Finance Ltd. Vs. Kamaljeet Singh Page no. 9 of 15 12.2. 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.
12.3. Now in the present case, since the accused has admitted his signatures on cheque in question, there arises an initial presumption in terms of Section 118 (a) and 139 of the NI Act not only regarding existence of legally enforceable liability in favour of the complainant but also regarding issuance of cheque in question by the accused in favour of complainant in discharge of his aforesaid liability. 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.
12.4. The primary issue in the case in hand is to determine whether the accused has succeeded in discharging his burden, that whether he has successfully raised a probable defence in order to create a reasonable doubt in the case of complainant to discard the presumption of law in favour of complainant.
12.5. The accused has chosen to examine himself as a witness/DW-1, so, now it is to be seen in the light of cross-examination of the AR of complainant as well as defence evidence lead by the accused, whether he 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. In the present case, the accused has tried to rebut the presumptions u/s. 118(a) and 139 NI Act on the ground that he had not given the cheque in question to Complainant in order to discharge any debt or liability but as security.
AR of the complainant did not disclose the sanctioned loan amount in the complaint and his evidence by way of affidavit and he later disclosed it during his cross examination as Rs. 4,28,000/-(Four lac Twenty eight thousand). It is a matter of record and also admitted by CC No. 348/2021 Shri Ram Transport Finance Ltd. Vs. Kamaljeet Singh Page no. 10 of 15 NIDHI BALA Digitally signed by NIDHI BALA Date: 2023.02.22 17:16:49 +0530 AR of complainant examined as CW-1 that the loan agreement in question has not been filed and also the loan account statement showing the outstanding loan amount against the accused. Therefore, complainant has failed to prove the fact that the cheque amount in question was outstanding as liability against the accused towards the complainant on its date. The controversy qua security cheque is duly addressed and observed by the Hon'ble Supreme Court in Dashrathbhai Trikambhai Patel vs Hitesh Mahendrabhai Patel (2023) 1 SCC 578 wherein 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 part payment is made after the cheque is drawn, the payee has the option of either taking a new cheque for the reduced amount or by 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.
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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 amount. The conditions stipulated in the provisos to Section 138 need to be fulfilled in addition to the ingredients in the substantive part of 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 has failed to prove the loan amount having been sactioned to the accused and also the outstanding loan amount as on the date of the cheque in question since neither any loan agreement was filed to prove the loan in question nor any NIDHI CC No. 348/2021 Shri Ram Transport Finance Ltd. Vs. Kamaljeet Singh Page no. 12 of 15 BALA Digitally signed by NIDHI BALA Date: 2023.02.22 17:16:59 +0530 loan account statement was filed to prove the outstanding liability against the accused qua the cheque amount in question. It is admitted by the AR of complainant that the loan amount sanctioned to the accsued was Rs. 4,28,000/- and it is further admitted by AR of complainant himself during his cross examnation that the vehicle in question for which the alleged loan was given to accused was in the possession of the complainant company and the same is duly sold for the amount of Rs. 1,70,000/-(One lac Seventy thousand). It is further admitted by the AR of the complainant during his cross examination that accused had paid Rs. 2,96,578/- against the loan in question which included the vehicle sale amount. And it appears from the evidence that the cheque amount in question i.e. Rs. 4,28,000/- is not due against the accused. Complainant has further failed to prove as to what was the outstanding liability against the accused at the time of presenting the cheque in question since it is admitted by the AR of complainant that the cheque in question had been given by the accused to complainant company at the time of taking of loan. It is further deposed by the AR of complainant that accused had given the cheque in question duly filled. However, I fail to understand as to how is it possible to anticipate the outstanding amount even prior to the default in the repayment of loan by the drawer of the cheque.
14. Complainant has filed the present complaint through its AR Mr. Gyan Singh authorised by special power of attorney. However, the SPA in favour of the AR Ex. CW-1/A does not even bear the signatures of its holder nor his photograph on it and further the board resolution of the company which authorised its executor is also not led in evidence, hence, not proved.
15. 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, at the time of his statement recorded under section 313 Cr.P.C, 1973 and also during his testimony recorded as DW-1. On the other hand the version of AR of complainant remained uncorroborated by any documentory proof for the same despite its availability. Complainant is a registered finance company and is in the business of finance, therefore, it is not possible that the loan is being advanced to the borrowers without execution of any document or maintainance of any accounts. It is NIDHI CC No. 348/2021 Shri Ram Transport Finance Ltd. Vs. Kamaljeet Singh Page no. 13 of 15 BALA Digitally signed by NIDHI BALA Date: 2023.02.22 17:17:03 +0530 surprised to see and observe that no document qua the alleged loan in question has been filed by the complainant and complainant has not even bothered to file any loan account statement showing the outstanding loan amount against the accsued. 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.
15.1. 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 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-exixtence of the consideration for which cheque in question is allegedly issued to complaianant by accused, is so probable that any prudent man would consider the same in the facts and circumstances similar to the case in hand.
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 and accused has succeded in rebutting the presumptions of section 118 and 139 of NI Act raised in favour of the complainant. Resultantly, the accused, thus, stands aquitted for the said offence and the bail bond and surety bond furnished by him before this court during trial NIDHI CC No. 348/2021 Shri Ram Transport Finance Ltd. Vs. Kamaljeet Singh Page no. 14 of 15 BALA Digitally signed by NIDHI BALA Date: 2023.02.22 17:17:08 +0530 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 2023.02.22
17:17:12 +0530
Announced in Open Court (NIDHI BALA)
today on 22.02.2023 MM (NI Act) Digital Court,
NORTH EAST,KARKARDOOMA
Certified that this judgment contains 15 pages and each page bears my signatures.
Digitally signed NIDHI by NIDHI BALA
Date:
BALA 2023.02.22
17:17:15 +0530
(NIDHI BALA)
MM (NI Act) Digital Court,
NORTH EAST,KARKARDOOMA/22.02.2023
CC No. 348/2021 Shri Ram Transport Finance Ltd. Vs. Kamaljeet Singh Page no. 15 of 15