Delhi District Court
CT CASES/615059/2016 on 31 May, 2022
Rahul Gupta v. Asha
CC No.615059/2016
IN THE COURT OF MS. TWINKLE CHAWLA: MM, NI ACT-02, SOUTH-
EAST DISTRICT, SAKET COURTS COMPLEX: NEW DELHI
Rahul Gupta v. Asha
CC No.615059/2016
U/s 138 Negotiable Instruments Act, 1881
1. CIS number : DLSE020016032014
2. Name of the Complainant : Sh. Rahul Gupta
3. Name of the Accused, : Ms. Asha, W/o Late Sh. Baldev Krishan,
parentage & residential C/o Ram Chaurasiya, R/o RZ-108A/14,
address Tughlakabad Extension, New Delhi.
4. Offence complained of or : U/s 138 of Negotiable Instruments Act,
proved 1881
5. Plea of the Accused : Pleaded not guilty and claimed trial
6. Final Judgment/order : ACQUITTED
7. Date of judgment/order : 31.05.2022
JUDGMENT
1. Complainant has filed the present complaint under Section 138 /142 of Negotiable Instruments Act, 1881 ("NI Act") against the Accused on the averments that on account of friendly relations between them, the Complainant advanced a friendly loan of Rs. 1,00,000/- to the Accused in cash; which was repayable in 6 months.
2. As per the Complainant, in discharge of this legally enforceable liability; the Accused issued a cheque bearing No. 849680 dated 20.01.2014 for Rs. 1,00,000/- Page 1 of 17
Rahul Gupta v. Asha CC No.615059/2016 drawn on Oriental Bank of Commerce, Hemkunt Chamber, 89, Nehru Place, New Delhi-110019, in favour of the Complainant (hereinafter referred as "cheque in question"). Further, as per the Complainant, when the said cheque in question was presented, it got dishonoured on grounds of "funds insufficient" vide return memo dt. 22.01.2014.
3. The Complainant sent the legal demand notice dated 17.02.2014 through registered post at address of the Accused. Hence, despite the service of the legal demand notice, the Accused failed to make the payment within the stipulated period and the Complainant filed the present complaint.
4. After taking pre-summoning evidence, Accused was ordered to be summoned in this case for commission of offence under Section 138 of NI Act, vide order dated 18.03.2014.
5. Accused appeared and was released on bail on 10.11.2014. On finding a prima facie case, notice U/s 251 of the Criminal Procedure Code, 1973 ("CrPC") was served upon the Accused on 26.02.2015 to which he pleaded not guilty and opted to contest after disclosing the following defence:
"I had taken a loan of Rs. 50,000/- in cash from Dhanno resident of Gali No. 12, Tuglakabad Extension, New Delhi. I had handed over to her two blanked signed cheques as security for procuring the above loan and the impugned cheque is one of the two cheques handed over Page 2 of 17 Rahul Gupta v. Asha CC No.615059/2016 to her. I do not know the present Complainant and I have never taken any loan from him. I have seen the Complainant for the first time today in the court. I did not receive any legal notice of demand before the filing of the present complaint. Hence, I am not liable to pay the cheque amount."
6. Vide order dated 26.02.2015, opportunity was granted to the Accused to cross examine the Complainant. The Complainant/Ex. CW1 adopted her pre-summoning evidence affidavit and also proved following documents:
Ex. CW1/A: Original cheque bearing No. 849680 dt.
20.01.2014 for an amount of Rs.
1,00,000/-.
Ex. CW1/B: Original cheque returning memo dt.
22.01.2014.
Ex. CW1/C: Copy of legal demand notice dt.
17.02.2014.
Ex. CW1/D Postal receipt dt. 17.02.2014.
& Ex.
CW1/E:
Ex. CW1/F: Complaint U/s. 138 NI Act.
Complainant Evidence was closed vide separate statement on 06.04.2018.
7. Thereafter, Accused was examined under Section 313 of CrPC for explaining the circumstances appearing against him in the Complainant's evidence. She denied the Complainant's case and pleaded false implication in the present case and opted to lead evidence in her defence. In her defence, the Accused moved an application for sending the cheque to FSL, which was dismissed by way of order dt. 18.07.2019. Thereafter, the application filed by the Accused u/s 311 CrPC was also dismissed Page 3 of 17 Rahul Gupta v. Asha CC No.615059/2016 as withdrawn. Accordingly, no defence evidence was led.
8. I have heard Ld. Counsel for the parties and have perused the case file along with the written submissions filed by the parties carefully and meticulously. Submissions of the Complainant and Accused
9. The Ld. Counsel for the Complainant has submitted that all ingredients of Section 138 NI Act are fulfilled in the present case and hence, the presumption under Section 139 NI Act arises in the favour of the Complainant, which has not been successfully rebutted by the Accused.
10.Per contra, Ld. Counsel for the Accused has submitted that the Accused deserves to be acquitted as the Complainant has failed to prove the transaction with the Accused and the Accused has rebutted the presumption by way of preponderance of probabilities.
Legal Framework Ingredients of Section 138 NI Act:
11.The Hon'ble Supreme Court of India in Kusum Ingots & Alloys Ltd and Ors v. K Pennar Peterson Securities Ltd and Ors., (2000) 2 SCC 745 ("Kusum Ingots Case"), has clearly stipulated that "the ingredients which are to be satisfied for making out a case under the provision are:
(i) a person must have drawn a cheque on an account maintained by him in a Page 4 of 17 Rahul Gupta v. Asha CC No.615059/2016 bank for payment of a certain amount of money to another person from out of that account for the discharge of any debt or other liability; 1
(ii) that cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier;
(iii) that cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank;
(iv) the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the 2 drawer of the cheque, within 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(v) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice;
If the aforementioned ingredients are satisfied then the person who has 1 Reduced to three months vide RBI circular dated 4.11.2011. 2 The same is now enhanced to 30 days.
Page 5 of 17
Rahul Gupta v. Asha CC No.615059/2016 drawn the cheque shall be deemed to have committed an offence."
12.Therefore, if the aforesaid ingredients are made out, the Accused is deemed to have committed an offence under Section 138 NI Act.
Presumption under Section 139 NI Act/Section 118 NI Act:
13.Section 139 NI Act states that:
"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"
14.Section 139 NI Act is a type of reverse onus clause, which stipulates a presumption in the favour of the Complainant as to fact of a cheque being received in discharge of a legal debt or liability.
15.Further, Section 118(a) of the NI Act, states as follows:
"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;"Page 6 of 17
Rahul Gupta v. Asha CC No.615059/2016
16.The Hon'ble Supreme Court of India has in a number of judgments dealt with the combined effect of the presumptions raised under Section 139 and Section 118(a) NI Act.
17.The following proposition can be summarized on a perusal of the judgments of the Hon'ble Supreme Court of India in Sunil Todi & Ors v. State of Gujarat, LL 2021 SC 706, Kalamani Tex v. P. Balasubramanian, 2021 SCC OnLine SC 75; APS Forex Services Pvt. Ltd. v. Shakti International Fashion Linkers and Ors. ("APS Forex Case"), AIR 2020 SC 945; Rohitbhai Jivanlal Patel v. State of Gujarat and Ors., AIR 2019 SC 1876; Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513; Basalingappa v. Mudibasappa, (2019) 5 SCC 418 ("Basalingappa Case"); K.N. Beena v. Muniyappan and Anr., (2001) 8 SCC 458; and Dhanvantrai Balwantrai Desai v. State of Maharashtra, 1964 Cri. LJ 437:
(i) Once the execution of cheque is admitted; Section 139 of the NI Act mandates a presumption that the cheque was for the discharge of legally enforceable debt or liability;
(ii) The presumption under Section 139 is a rebuttable presumption and the onus is on the Accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities;
(iii) Something which is probable has to be brought on record by the Accused for getting the burden of proof shifted to the Complainant. To disprove the Page 7 of 17 Rahul Gupta v. Asha CC No.615059/2016 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 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;
(iv) The words "unless the contrary is proved" which occur in Section 139, make it clear that the presumption has to be rebutted by 'proof' and not by a bare explanation which is merely plausible. A fact is said to be proved when its existence is directly established or when upon the material before it the Court finds its existence to be so probable that a reasonable man would act on the supposition that it exists. Unless, therefore, the explanation is supported by proof, the presumption created by Section 139 NI Act cannot be said to be rebutted;
(v) To rebut the presumption, it is open for the Accused to rely on evidence led by her or 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;
(vi) That it is not necessary for the Accused to come in the witness box in support of her defence, Section 139 imposed an evidentiary burden and not a Page 8 of 17 Rahul Gupta v. Asha CC No.615059/2016 persuasive burden.
Analysis
18.In the case at hand, it is not in dispute that the cheque in question was drawn by the Accused from her bank account. Further, it is also not in dispute that the Accused is the signatory of the cheque in question as in the defence disclosed by the Accused U/s 251 CrPC and Section 313 CrPC statement; she has duly admitted the same. Presentation of the cheque in question by the Complainant is also not in dispute.
19.The dishonour of the cheque in question by way of the return memo, Ex. CW1/B, is also not in dispute as it bears the stamp of the bank. The Complainant sent the legal demand notice, dated 17.02.2014 (Ex. CW1/C) by way of speed post (Ex. CW1/D & Ex. CW1/E). While the Accused has taken the stance that she has not received the legal demand notice, it is seen that the Accused has appeared in court pursuant to processes served at the same address. Hence, the legal demand notice was sent on the correct address of the Accused. Therefore, a presumption of due service is drawn u/s 27 of General Clauses Act, 1897; which provides that where the notice is sent by registered post to the correct address, the same shall be presumed to have been duly served. In M/s Darbar Exports and other v. Bank of India, 2003 (2) SCC (NI) 132 (Delhi), the Hon'ble High Court of Delhi held that a presumption of service of notice is to be drawn where the notice is sent through registered post as well as UPC on correct address. Further, the Hon'ble Supreme Court in C.C. Alavi Hazi v. Palapetty Muhammad & Anr, (2007) 6SCC 555 has Page 9 of 17 Rahul Gupta v. Asha CC No.615059/2016 held that: "Any drawer who claims that he did not receive the notice by post, can, within 15 days of receipt of summons from the court in respect of the complaint U/s 138 of the Act, make payment of the cheque amount and submit to the court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the court along with the copy of complaint U/s 138 of the Act, cannot obviously contend that there was no proper service of notice as required U/s 138, by ignoring statutory presumption to the contrary U/s 27 of the General Clauses Act and Section 114 of the Evidence Act.".
20.Thus, the legal demand notice Ex. CW1/C is held to have been duly served upon the Accused. Finally, the complaint has been filed within the limitation period. Therefore, essential ingredients (i) to (v) as stipulated by the Hon'ble SC in Kusum Ingots Case (supra), have been duly satisfied.
21. Further, as noted above, once the execution of the cheque by the Accused is proved/admitted, the presumption of the same being drawn for consideration stands attracted in terms of Section 139 NI Act. Now, in the case at hand, so far as the question of existence of basic ingredients for drawing of presumption U/s 118 (a) and 139 of the NI Act is concerned, from the aforesaid discussion, it is apparent that the Accused has not denied her signatures on the cheque in question that has been drawn in favour of the Complainant on a bank account maintained by the Accused; Page 10 of 17
Rahul Gupta v. Asha CC No.615059/2016 and hence the said presumption can be drawn. The Ld. Counsel for the Accused has stated that such inference cannot be drawn as the cheque in question was not issued to the Complainant and that the same was given as a blank signed cheque to one Ms. Dhanno. At this stage, reliance can be laid on the observations of the Hon'ble SC in Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197; wherein it has been held that:
"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...
40. 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." (emphasis supplied) Page 11 of 17 Rahul Gupta v. Asha CC No.615059/2016
22.The same view has been endorsed by the Hon'ble High Court of Delhi in Ravi Chopra v. State, CRL.M.C. 5211/2006; wherein it was observed that:
"A collective reading of the above provisions shows that even under the scheme of the NI Act it is possible for the drawer of a cheque to give a blank cheque signed by him to the payee and consent either impliedly or expressly to the said cheque being filled up at a subsequent point in time and presented for payment by the drawee. There is no provision in the NI Act which either defines the difference in the handwriting or the ink pertaining to the material particulars filled up in comparison with the signature thereon as constituting a "material alteration" for the purposes of Section 87 NI Act. What however is essential is that the cheque must have been signed by the drawer." (emphasis supplied)
23.Hence, in view of such clear stipulation by the Hon'ble Supreme Court and Hon'ble Delhi High Court, it is immaterial whether or not the particulars on the cheque have been filled by the Accused or not, to the extent the Accused has admitted to have appended her signatures on the cheque in question. Accordingly, the applicability of the presumption under Section 139 NI Act is not dependent upon the Accused filling the particulars on the cheque. Accordingly, it is required to be presumed that the cheque in question were drawn for consideration and the holder of the cheque i.e., the Complainant received the same in discharge of an existing debt. The onus, therefore, shifts on the Accused to establish a probable defence so as to rebut such Page 12 of 17 Rahul Gupta v. Asha CC No.615059/2016 a presumption.
24.In the segment on legal framework, set out above, the legal proposition with respect to the burden of proof upon the Accused has already been discussed. Hence, it is now to be examined as to whether the Accused brought any material on record or pointed out glaring discrepancies in the material produced by the Complainant for dislodging the presumption which meets the standard of preponderance of probabilities.
25.The Accused in the present case, has taken the following line of defence with a view to rebut the presumption:
(i) There was no transaction between the Complainant and the Accused
26.The Accused has at all stages of trial taken the defence that she had not taken any loan from the Complainant and that she had in fact, taken a loan of Rs. 50,000/-, from one Smt. Dhanno, who also stays in the same locality as the Complainant and Accused and as security for the same, she had given her 2 cheques, which includes the cheque in question. Further stated that she has already repaid the said loan and Smt. Dhanno has given the cheque in question to the Complainant herein, who has misused the same. The Accused is even stated to have filed a police complaint with the DCP, Sarita Vihar against Smt. Dhanno, the Complainant herein and Sh. Sanjeev, who is the Complainant in a connected matter.
27.While the Accused has not led any defence evidence, the Complainant has been Page 13 of 17 Rahul Gupta v. Asha CC No.615059/2016 cross-examined at length. Despite express questions, the Complainant has deposed that he does not remember the exact date of giving the said loan, and of receiving the cheque in question. It is also noted that the basis of his complaint, as set out in paragraph 2 of the complaint is that: "the Accused was having friendly relations with the Complainant for a considerable period of time and the Accused used to seek financial help from the Complainant as and when the Accused was in need of money. The relations between the Accused and Complainant were cordial". Hence, a loan in cash was given to the Accused by the Complainant, without execution of any written receipt or agreement, on account of such cordial relations. However, when questions on the relationship were put to the Complainant during the cross-examination, he has stated that: "the Accused never took any loan from me prior to this loan"; which is against the averment made in the complaint of Accused regularly taking financial help from the Complainant. Furthermore, he has further stated that he does not know the educational qualification of the Accused or even her place of residence or the number of children of the Accused. Here, it does not seem probable for someone who has friendly relations for a long period of time but to not know such basic details; such as the place of residence of the Accused, or her educational qualifications. Further, it does not seem probable for a reasonable man to advance an amount of Rs. 1 lakh to someone in cash, that too without any receipt, in the absence of friendly relations. Hence, the fact of existence of friendly relations between the Complainant and the Accused become doubtful; especially when the Accused has denied acquaintance with the Complainant at all stages of Page 14 of 17 Rahul Gupta v. Asha CC No.615059/2016 the trial.
28.Further, in the present case, the Complainant has given evasive replies as to his source of funds. While the Accused has denied any transaction with the Complainant and express questions have been put to the Complainant in his cross- examination as to the source of funds; the Complainant has only replied that: "I arranged the loan amount of Rs. 1 lakh from my personal savings". It is seen that the Complainant has deposed that the annual turnover of his shop was Rs. 2 lakhs to 2.5 lakhs. However, no explanation or evidence has been brought on record to show that while his annual turnover was Rs. 2.5 lakhs, he had Rs. 1 lakh as personal savings, which he readily gave to a person, who was his customer, without even knowing her place of residence and without any written agreement.
29.In the Basalingappa Case (supra) as well as the APS Forex Case (supra), the Hon'ble SC has noted that when financial capacity to advance the loan is questioned, the burden shifts on the Complainant to prove his financial capacity and other facts. In the APS Forex Case (supra), it was noted that:
"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 Page 15 of 17 Rahul Gupta v. Asha CC No.615059/2016 financial capacity, more particularly when it is a case of giving loan by cash and thereafter issuance of a cheque."
30.Undisputedly, the present case relates to a cash loan given on friendly terms and is a case where the financial capacity of the Complainant has been questioned by way of questions put in the cross-examination by the Accused. However, the Complainant has only given evasive replies, and without further details as to the source of funds for the loan, it does not seem probable for a reasonable man whose annual turnover is Rs. 2,50,000/- to advance a loan of Rs. 1,00,000/- in cash without any receipt/written acknowledgment to another person, and to not remember the details of disbursement of such a big loan amount, which is almost equal to half of his annual turnover. Further, the Complainant has in his cross-examination also deposed that "The loan was taken in July, 2013 but I do not remember the exact date. It is correct that I do not remember if the loan was taken on 01.07.2013 or 30.07.2013."; and "I do not remember the time when loan was given. I do not remember if I make the payment to the Accused either in morning, afternoon or in the evening."
31.Added to this, he has even pleaded ignorance as to the educational qualification, residential address and family details of the Accused, who he states to have friendly relations with. Furthermore, while the Complainant has deposed that he does not know any Sanjeev in his cross-examination, it is noted that the Complainant and Sh. Sanjeev have filled the cases u/s 138 NI Act against the same Accused on the Page 16 of 17 Rahul Gupta v. Asha CC No.615059/2016 same contentions, through the same advocate on the same date. Further, the cheque number of the cheque in question and the cheque impugned in the complaint of Sh. Sanjeev is the immediate successor number. Further, upon oral inquiry at the stage of final arguments from the Complainant in court, he has stated that he and Sh. Sanjeev are friends. In this context, it is seen that evidence of the Complainant does not inspire confidence from the point of a reasonable man. Accordingly, the Complainant has failed to discharge his burden of proving the guilt of the Accused beyond all reasonable doubt.
Conclusion
32.In these circumstances and in view of the above detailed discussion, this court is of the considered opinion that the Accused has successfully rebutted the presumption under Section 139 of Negotiable Instruments Act, 1881 and the Complainant has failed to prove the ingredients of Section 138 of Negotiable Instruments Act, 1881. Therefore, Accused is held not guilty and is acquitted for commission of offence punishable under Section 138 of the Negotiable Instrument Act, 1881.
ORDER: ACQUITTAL
Announced in Open Court (Twinkle Chawla)
31.05.2022 MM (NI-Act 02), South East
Saket Court, New Delhi
Note: This judgment contains 17 pages and each page has been signed by me.
(Twinkle Chawla) MM (NI-Act 02), South East Saket Court, New Delhi Page 17 of 17