Delhi District Court
Ram Kumar Mishra vs Krishan Kumar on 15 October, 2024
IN THE COURT OF SH. ABHISHEK GOYAL, ADDITIONAL
SESSIONS JUDGE-03, CENTRAL DISTRICT, TIS HAZARI
COURTS, DELHI
CNR No. DLCT01-017345-2023
CRIMINAL APPEAL No. 303/2023
RAM KUMAR MISHRA,
S/o. Late Sh. Bhagwati Parshad Mishra,
R/o. H. No. A-454, Shastri Nagar,
Delhi-110052. ... APPELLANT
VERSUS
KRISHAN KUMAR,
S/o. Late Sh. Raghubir Singh,
R/o. H. No. B-1877, Shastri Nagar,
Delhi-110052. ... RESPONDENT
Date of Filing : 08.12.2023
Date of Institution : 09.12.2023
Date when judgment was reserved : 01.08.2024
Date when judgment is pronounced : 15.10.2024
JUDGMENT
1. The present appeal has been preferred under Section 374 of the Code of Criminal Procedure, 1973 (hereinafter, referred to as 'Cr.P.C.') against the judgment dated 29.08.2023 (hereinafter referred to as 'impugned judgment'), passed by learned Metropolitan Magistrate/Ld. MM-06 (NI Act), Central, Tis Hazari Courts, Delhi (hereinafter referred to as the 'Ld. Trial Court/Ld. MM Court') in case bearing; "Krishan Kumar v. Ram Kumar Mishra, CC No. 5707/2019", convicting the appellant for the offence punishable under Section 138 of the Negotiable Instrument Act, 1881 (hereinafter referred to as 'NI Act'), and the consequent order of sentence dated 08.11.2023 (hereinafter referred to as 'impugned order'), passed by the Ld. Trial Court, awarding the appellant; simple imprisonment for a period of 01 CA No. 303/2023 Ram Kumar Mishra v. Krishan Kumar Page No. 1 of 39 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2024.10.15 17:04:04 +0530 (one) year and fine/compensation to a tune of Rs. 5,53,000/- 1 (Rupees Five Lakhs Fifty Three Thousand only), to be paid by the appellant to the respondent/complainant, in default of payment of compensation, the appellant, being further directed to undergo simple imprisonment for a further period of 06 (six) months (hereinafter impugned judgment and impugned order are collectively referred to as the 'impugned judgment and order').
2. Succinctly, the genesis of the present proceedings is the complaint, filed by the respondent/complainant before the Ld. Trial Court in terms of the provisions under Section 138 of NI Act. Under the said complaint, the respondent inter alia asserted that the appellant was working as a broker/property dealer/agent in the locality of Shastri Nagar from past several years, as well as, was residing in the same locality as that of the respondent. Further, as per the respondent, the appellant as well the respondent were acquainted with each other. It was further asserted by the respondent that in the month of October 2018, the respondent approached the appellant and requested him for a help/loan of Rs. 4,00,000/- (Rupees Four Lakhs only) for a period of 30 (thirty) days, under the pretext that he/the appellant was in dire need of money and no one else was helping him. The complainant further asserts that, though, initially he expressed his inability to help the appellant, however, upon appellant's persistence, the respondent arranged money from somewhere, on humanitarian ground and provided the same to the appellant on 14.10.2018, as friendly loan. At the time of taking of said friendly loan, as per the respondent/complainant, the appellant assured to repay the said amount till 14.11.2018, however, when the respondent demanded 1 Being the cheque amount of Rs. 4,00,000/- (Rupees Four Lakhs only) along with interest @9% (nine percent) per annum, computed as per the decision of the Hon'ble Supreme Court in R. Vijayan v. Baby, (2012) 1 SCC 260.
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for return of his money, the appellant while expressing his inability to repay the loan amount on time, requested the respondent to wait for another month, i.e., till 15.12.2018. Further, as per the complainant/respondent, at that point in time, the appellant also made an undertaking in writing that he/appellant would repay a sum of Rs. 4,16,000/- (Rupees Four Lakhs Sixteen Thousand only) to the respondent by/on 15.12.2018, failing which, the appellant undertook to pay a sum of Rs. 5,00,000/- (Rupees Five Lakh only) to the respondent.
2.1. However, when the aforenoted assurance failed as well, the appellant is proclaimed to have again sought an apology from the respondent for his omission(s)/default in honoring his assurance/promise and again issued a receipt, with a promise to repay the loan amount till 10.01.2019. Correspondingly, at that point in time, the appellant is further proclaimed to have handed over a cheque bearing no. 637064 dated 07.01.2019, drawn on State Bank of India, Kamla Nagar Branch for a sum of Rs. 4,00,000/- (Rupees Four Lakhs only) (hereinafter referred to as the 'dishonoured cheque/cheque') to the respondent. However, as per the complainant/respondent, when the appellant's assurances fell flat, the respondent is proclaimed to have approached the appellant on 20.03.2019, making a demand of his money, however, the appellant asked the respondent to present the said cheque for encashment, assuring him that the same would be honored. Upon this, the respondent deposited the said cheque with his banker, i.e., Punjab National Bank, Shastri Nagar, Delhi on 27.03.2019, however, the same was returned dishonored vide return memo dated 29.03.2019 under the remarks, " Funds Insufficient". Consequently, the respondent issued a demand notice dated 18.04.2019 to the appellant in terms of the provisions under CA No. 303/2023 Ram Kumar Mishra v. Krishan Kumar Page No. 3 of 39 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2024.10.15 17:04:15 +0530 Section 138 NI Act, which was duly received by the respondent. However, despite the same, no payment was made by the appellant to the respondent. Ergo, under such circumstances, the respondent filed the aforenoted complaint in terms of the provisions under Section 138 NI Act.
2.2. Notably, consequent upon pre-summoning evidence by way of affidavit having been tendered by the respondent and thereupon, Ld. Trial Court's taking cognizance of the offence on 27.05.2019, summons was issued to the appellant/accused.
Subsequently, upon the appellant entering appearance before the Ld. Trial Court, notice under Section 251 Cr.P.C. was framed against him vide order dated 01.11.2019, to which, the appellant plead not guilty and claimed trial. Correspondingly, the appellant admitted the dishonour of cheque and legal notice on the said date, in terms of the provisions under Section 294/313 Cr.P.C., with the Ld. Trial Court dispensing the proof/examination of witnesses at no. 2 and 3 in the list of witnesses (complainant's/respondent's list of witnesses). Relevantly, during the course of trial, the respondent examined himself as CW-1, while adopting his pre-summoning evidence/ evidence by way of affidavit ( Ex. CW1/A) as well as, relied upon the documents, i.e., original undertaking (Ex. CW1/1); original cheque bearing No. 637064 dated 07.01.2019, drawn on State Bank of India, Kamla Nagar Branch for a sum of Rs. 4,00,000/- (Rupees Four Lakhs only) (Ex. CW1/2); original receipt (Ex. CW1/3); cheque returning memo dated 29.03.2019 (Ex. CW1/4); legal demand notice dated 18.04.2019 (Ex. CW1/5); original postal receipts (Ex. CW1/6); original courier receipts (Ex. CW1/7); and internet copy(ies) of delivery receipt(s) (Ex. CW1/8 and Ex. CW1/9). Subsequently, on conclusion of respondent's evidence, recording of statement of the appellant under Section CA No. 303/2023 Ram Kumar Mishra v. Krishan Kumar Page No. 4 of 39 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2024.10.15 17:04:20 +0530 313/281 Cr.P.C. on 09.06.2022, appellant's leading himself as witness (DW-1) in support of his case on 31.10.2022 and 13.12.2022, as well as on conclusion of arguments on behalf of the parties, as aforementioned, the Ld. Trial Court vide impugned judgment and order, while holding the appellant guilty of the offence punishable under Sections 138 NI Act, sentenced him in the manner, as noted hereinabove.
3. Learned Counsel for the appellant vehemently contended that the impugned judgment and order were passed by the Ld. Trial Court on mere conjunctures, surmises and in contravention of the settled principles of law, deserving their setting aside at the outset. Ld. Counsel further submitted that the Ld. Trial Court failed to appreciate that in the instant case, there are numerous cavernous holes in the case put forth by the respondent/complainant and that the respondent's story does not inspire any confidence, nor appeals to the senses of a prudent man.
In this regard, Ld. Counsel outrightly averred that the Ld. Trial Court failed to appreciate that the Ld. Trial Court committed an error by ignoring the material contradictions in the testimony of the complainant/respondent, recorded before the Ld. Trial Court, besides, as per the Ld. Counsel, the Ld. Trial Court was oblivious to the fact that the accused/appellant was successful in discharging his burden to revert the presumption under law. Ld. Counsel further fervently argued that the Ld. Trial Court also failed to consider that the cheque in question was issued by the appellant as 'security' in lieu of him procuring loan from or with the assistance of the respondent, however, the complainant/respondent, did not provide any loan to the appellant either from his own funds or to arrange the same from any other financier/financial institution. In this regard, Ld. Counsel for the appellant, while referring to the CA No. 303/2023 Ram Kumar Mishra v. Krishan Kumar Page No. 5 of 39 Digitally signed ABHISHEK by ABHISHEK GOYAL GOYAL Date: 2024.10.15 17:04:23 +0530 appellant's answer to Q. 5 under notice framed under Section 251 Cr.P.C., as well as the respondent's cross examination, contended that in the facts of the present case, probability/possibility of the cheque being issued as security and the loan having not been finally disbursed to the appellant cannot be ruled out. Even otherwise, as per the Ld. Counsel, the particulars of the cheque in question were neither filled by the appellant, nor signed or even in his handwriting. Further, as per the Ld. Counsel, the Ld. Trial Court failed to consider the probable version adduced by the appellant that Ex. CW1/1 and Ex. CW1/3 were neither prepared by him, nor the appellant given any undertaking/assurance against the 'so called loan', rather, the appellant merely tendered his signatures on blank papers and handed over to the respondent in good faith and considering their past relationship, solely/in order to facilitate procurement of loan. Even otherwise, Ld. Counsel averred that the contents of Ex. CW1/1 and Ex. CW1/3 are irreconcilable and do not support the version put forth by the respondent, besides, as per the Ld. Counsel do not find any mention in the factual matrix noted by the Ld. Trial Court or even under the respondent's demand notice. It was further submitted that said documents, do not, even otherwise have any evidentiary value, bereft of any marginal witnesses, date, time or any other specific particulars of their execution being specified thereupon. 3.1. Ld. Counsel for the appellant further fervidly argued that the Ld. Trial Court did not even consider the fact that the respondent was admittedly a MCD Teacher, on meagre income/salary, hence, the appellant was not in a position to advance such loan as otherwise, contended by him. In this regard, Ld. Counsel further submitted that the respondent has taken contrary stand before the Ld. Trial Court. In this regard, Ld. CA No. 303/2023 Ram Kumar Mishra v. Krishan Kumar Page No. 6 of 39 Digitally signed by ABHISHEK GOYAL ABHISHEK Date: GOYAL 2024.10.15 17:04:27 +0530 Counsel submitted that the respondent, while under his complaint, proclaiming that the amount was arranged by him 'somehow'. However, in distinction/variance to the same, respondent declared in his cross examination that he had taken loan for repair and maintenance of his home, which could not fructify owing to Covid-19 restrictions. As per the Ld. Counsel, the said contentions are not only contrary, rather, grossly unbelievable considering that the loan in question is asserted by the respondent to have been disbursed to the appellant in the year, 2018, whilst Covid restrictions came to being only in the year, 2020. Ergo, Ld. Counsel contended that the respondent is guilty of misleading the Court and it was affirmed that the respondent had no means to make disbursal of any 'so called friendly loan' to the appellant from his own funds, besides it was reiterated that the money being lying with the respondent for the reasons of Covid-19 restrictions is irreconcilable to the fact that as per the respondent's own case, the loan is asserted to be disbursed by the respondent to the appellant in the year, 2018, way prior to anu such Covid-19 restrictions being imposed by the government. Accordingly, Ld. Counsel vehemently contended that despite the said fact and the respondent's failure to demonstrate his lending/financial capacity, the Ld. Trial Court proceeded to pass the impugned judgment and order, in utter contravention of law and settled judicial precedents. 3.2. Ld. Counsel for the appellant further vehemently argued that the Ld. Trial Court was oblivious to the fact that the complainant had even not provided the basic particulars regarding the mode of filling of the cheques in question, which were admittedly taken as security for repayment of the alleged loan. It was further contended that the Ld. Trial Court also failed to appreciate that in the respondent's cross-examination, the CA No. 303/2023 Ram Kumar Mishra v. Krishan Kumar Page No. 7 of 39 Digitally signed ABHISHEK by ABHISHEK GOYAL GOYAL Date: 2024.10.15 17:04:33 +0530 appellant was able to rebut the presumption of 139 NI Act and had further put forward his/appellant's case/defence, as mandated under law on preponderance of probabilities. Accordingly, Ld. Counsel submitted that not only did the Ld. Trial Court failed to consider the truth of circumstances and passed the impugned judgment in haste, rather, did not properly appreciate/examine the facts of the present case, wrongly holding the appellant guilty of the aforementioned offences. Even otherwise, as per the Ld. Counsel, the impugned order on sentence was passed by the Ld. Trial Court, inconsiderate of the correct factual scenario, awarding an exorbitant sentence and order of compensation against the appellant. Consequently, the Ld. Counsel inter alia prayed that the present appeal be allowed, and the impugned judgment and order be set aside, and the appellant be acquitted of the alleged charges. In support of the said contentions, reliance was placed upon the decision in; Basalingappa v. Mudibasappa, (2019) 5 SCC 418; Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513; Rajaram v. Maruthachalam, 2023 SCC OnLine SC 48; S. Murugan v. M.K. Karunagaram, SLP(Crl.) 7618/2023, dated 31.10.2023 (Hon'ble SC); Sri Dattatraya v. Sharanappa, Crl. Appeal No. 3257/2024, dated 07.08.2024 (Hon'ble SC); and Mangat Ram v. Pardeep Kumar, CRM.A. No. 1971-MA of 2018, dated 02.03.2022 (Hon'ble P&H High Court).
4. Per contra Ld. Counsel for the respondent submitted that the impugned judgment and order were passed by the Ld. Trial Court after due appreciation of the facts and circumstances of the case as well as in consonance with the settled judicial precedents. Even otherwise, Ld. Counsel outrightly contended that the instant appeal was filed by the appellant with a sole motive to delay compliance of the orders dated 29.08.2023 and 08.11.2023 of the CA No. 303/2023 Ram Kumar Mishra v. Krishan Kumar Page No. 8 of 39 Digitally signed ABHISHEK by ABHISHEK GOYAL GOYAL Date: 2024.10.15 17:04:38 +0530 Ld. Trial Court. In this regard, Ld. Counsel further submitted that the said intention is manifest from the telephonic conversation between the respondent/complainant and the appellant herein, filed by the respondent as Ex. DW-1/C-1 and Mark-X. It was further contended by the Ld. Counsel that the testimony of the complainant/CW-1/respondent has not only been consistent, rather, unblemished as well as lucidly points towards the only inference of guilt of the appellant. Even otherwise, as per the Ld. Counsel, the appellant has wrongly/falsely contended that the dishonoured cheque was not filled by him, contrary, to his declaration/assertion made at the time of framing of notice under Section 251 Cr.P.C. Ld. Counsel further submitted that the appellant/accused made contradictory and conflicting statements at different stages during trial, which are sufficient to prove appellant's malafide intention(s) to mislead Court. In this regard, it was submitted that during the framing of notice under Section 251 Cr.P.C., on response to Q.2, the appellant admitted his signatures on the cheque in question as well as the fact that he had filled the amount in words and figures, as specified therein, however, in an utter variance thereof, Ld. Counsel for the appellant, while cross examining the respondent, gave a suggestion that the appellant handed over a blank signed cheque to the respondent and the respondent filled the amount and date, as surety. Ld. Counsel further accentuated that while the appellant in his cross examination, proclaimed that a loan of Rs. 4,00,000/- (Rupees Four Lakhs only) was demanded by him/the appellant from the respondent somewhere around 2020, however, as per the Ld. Counsel for the respondent, the said averment is irreconcilable from the fact that the cheque in question was already dishonoured on 29.03.2019. Accordingly, as per the Ld. Counsel, the CA No. 303/2023 Ram Kumar Mishra v. Krishan Kumar Page No. 9 of 39 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2024.10.15 17:04:42 +0530 appellant's handing over the cheque in question and blank signed pages to the respondent in assurance for him/the complainant arranging funds, which were demanded by him in 2020 does not appeal to the sense(s) of prudent man or logic. 4.1. Learned Counsel for the respondent further submitted that, even otherwise, though the appellant asserted that he handed over bank cheque as well as blank papers to the respondent, which were later on converted into receipts, Ex. CW1/1 and Ex. CW1/3, however, as per the appellant's own version, he never made any complaint of the same, despite the fact that the respondent initiated the instant complaint proceedings against the appellant. It was further submitted that the respondent/complainant has been able to prove its case, beyond reasonable doubt against the appellant.
However, the appellant has not been able to rebut the presumption envisaged under law, even on preponderance of probabilities. Even otherwise, as per the Ld. Counsel, the averment regarding the alleged appellant's incapacity to loan the amount/financial incapacity is an afterthought and with a sole intention to delay the proceedings in the present case. In this regard, Ld. Counsel for the respondent fervently argued that the appellant, at no point in time, disputed the financial capacity of the complainant/respondent to advance loan amount, however, belatedly sought to raise such an insincere plea solely to prejudice the respondent's case, besides delay proceedings on one or the other ground. Even otherwise, it was averred by the Ld. Counsel that the respondent clarified the source of funds for advancement of loan in his cross examination, which has not been successfully rebutted by the appellant herein, even on preponderance of probability. Ld. Counsel further strenuously reiterated that the facts and circumstances put forth as well as the evidence placed on record, unerringly point out towards CA No. 303/2023 Ram Kumar Mishra v. Krishan Kumar Page No. 10 of 39 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2024.10.15 17:04:50 +0530 the guilt of the appellant and that no fault can be attributed to the finding of the Ld. Trial Court, which is based on proper appreciation of facts as well as law. Accordingly, Ld. Counsel for the State submitted that the present appeal deserves to be dismissed at the outset, as grossly malicious and devoid of merits. In support of the said contentions, reliance has been placed upon the decisions in; Hiten P. Dalal v. Bratindranath Banerjee, (2001) 6 SCC 16; Basalingappa v. Mudibasappa, (2019) 5 SCC 418; Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513; Rangappa v. Sri Mohan, (2010) 11 SCC 441; Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197; Uttam Ram v. Devinder Singh Hudan, (2019) 10 SCC 287; Lillykutty v Lawrence , 2003 (2) DCR 610; Rajesh Jain v. Ajay Singh, (2023) 10 SCC 148; K. Bhaskaran v. Sankaran Vaidhyan Balan, (1999) 7 SCC 510; and Bharat Barrel & Drum Mfg. Co. v. Amin Chand Payrelal, (1999) 3 SCC 35.
5. The arguments of Ld. Counsel for the appellant as well as that of Ld. Counsel for the respondent, heard and the record(s), including the Trial Court Record, written arguments/written submissions filed by the appellant and respondent, as well as the case laws relied upon by the parties in support of their respective contentions have been thoroughly perused.
6. Before proceeding further with the appreciation of the merits of the case as well as rival contentions of/on behalf of the parties, this Court deems it pertinent to reproduce the relevant provisions under law, for the purpose of present adjudication, as under;
"118. Presumptions as to negotiable instruments- Until the contrary is proved, the following presumptions shall be made:
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(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;
(b) as to date: that every negotiable instrument bearing a date was made or drawn on such date;
(c) as to time of acceptance: that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity;
(d) as to time of transfer: that every transfer of negotiable instrument was made before its maturity;
(e) as to order of indorsement: that the indorsements appearing upon a negotiable instrument were made in the order in which they appear thereon;
(f) as to stamp: that a lost promissory note, bill of exchange or cheque was duly stamped;
(g) that holder is a holder in due course: that the holder of a negotiable instrument is a holder in due course:
Provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him.
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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 extend to two years, or with fine which may extend to twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall apply unless-
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(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 or other liability" means a legally enforceable debt or other liability.
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."
(Emphasis supplied)
7. At the outset, this Court observes that the objective behind the introduction of the provision(s) under Section 138 under the NI Act, by virtue of amendment/insertion in the year 1989, is to inculcate faith in the efficacy of banking operations and credibility in transacting business on negotiable instrument. Notably, at the time of introduction of the said provision(s), the executive was cognizant of the fact that the civil remedies were found to be inadequate to curb the menace on the part of unscrupulous persons and an imminent need was felt for introduction of a penal provision to cease the propensity on the part of dishonest persons to exploit negotiable instruments for personal gains. Consequently, being wary of the impending requirement for a penal provision to bring about faith in monetary transactions, Chapter XVII was introduced in the NI Act, CA No. 303/2023 Ram Kumar Mishra v. Krishan Kumar Page No. 13 of 39 Digitally signed ABHISHEK by ABHISHEK GOYAL GOYAL Date: 2024.10.15 17:05:03 +0530 comprising of the provisions from Sections 138 to 148. In particular, penal provisions under Section 138 NI Act were designed to1, "safeguard the faith of the creditor in the drawer of the cheque, which is essential to the economic life of a developing country like India. The provision has been introduced with a view to curb cases of issuing cheques indiscriminately by making stringent provisions and safeguarding interest of creditors" . Notably, the Hon'ble Supreme Court in Goa Plast (P) Ltd. v. Chico Ursula D'Souza, (2004) 2 SCC 235, while inter alia analyzing the intent of introduction of Section 138 NI Act as well as scope and objective of the said provision(s) observed as under;
"26. The object and the ingredients under the provisions, in particular, Sections 138 and 139 of the Act cannot be ignored. Proper and smooth functioning of all business transactions, particularly, of cheques as instruments, primarily depends upon the integrity and honesty of the parties. In our country, in a large number of commercial transactions, it was noted that the cheques were issued even merely as a device not only to stall but even to defraud the creditors. The sanctity and credibility of issuance of cheques in commercial transactions was eroded to a large extent. Undoubtedly, dishonour of a cheque by the bank causes incalculable loss, injury and inconvenience to the payee and the entire credibility of the business transactions within and outside the country suffers a serious setback. Parliament, in order to restore the credibility of cheques as a trustworthy substitute for cash payment enacted the aforesaid provisions. The remedy available in a civil court is a long-drawn matter and an unscrupulous drawer normally takes various pleas to defeat the genuine claim of the payee."
(Emphasis supplied)
8. Relevantly, in order to attract culpability under the provisions of 138 NI Act, the prosecution is inter alia required to prove2; (a) that the cheque was issued/drawn by a person on an account maintained by him for payment of any sum of money to 1 Vinay Devanna Nayak v. Ryot Sewa Sahakari Bank Ltd., (2008) 2 SCC 305.
2N. Doraisamy v. Archana Enterprises, 1995 SCC OnLine Mad 25.
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another person from out of that account; (b) the cheque must have been issued against the discharge, either in whole or in part, of any debt or other liability, though, in the absence of proof to the contrary, it shall be presumed that it was issued for the same; and
(c) the cheque was returned by the bank unpaid either because the amount of money standing to the credit of that account is insufficient to honour the cheque; or because it exceeds the amount arranged to be paid from the account by an agreement with that bank. Reference in this regard is further made to the decision of Hon'ble Supreme Court in Kusum Ingots & Alloys Ltd. v. Pennar Peterson Securities Ltd., (2000) 2 SCC 745 , wherein the Hon'ble Court, while conscientiously analyzing the provisions under Section 138 NI Act inter alia explicated the ingredients of the said provision/offence, as under;
"10. On a reading of the provisions of Section 138 of the NI Act it is clear 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 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;
(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 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 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;
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2024.10.15 17:05:11 +0530 or the holder in due course of the cheque within 15 days of the receipt of the said notice."
(Emphasis supplied)
9. Here, it is further pertinent to observe that the statute/NI Act also provides for raising of a presumption/statutory presumption, casting/permitting a reverse burden on an accused and requiring the accused to prove the non-existence of the presumed fact. Quite evidently, Section 139 NI Act provides for/creates one such exception(s) to the general rule as to the burden of proof and shifts the onus on an accused to rebut the presumption envisaged under law, against him. Another such presumption under law being, under Section 118 NI Act. Reference in this regard, is made to the decision of the Hon'ble Supreme Court in Rajesh Jain v. Ajay Singh, (Supra.), wherein the Hon'ble Court noted in regard the foregoing as under;
"33. The NI Act provides for two presumptions:
Section 118 and Section 139. Section 118 of the Act inter alia directs that it shall be presumed, until the contrary is proved, that every negotiable instrument was made or drawn for consideration. Section 139 of the Act stipulates that "unless the contrary is proved, it shall be presumed, that the holder of the cheque received the cheque, for the discharge of, whole or part of any debt or liability". It will be seen that the "presumed fact" directly relates to one of the crucial ingredients necessary to sustain a conviction under Section 138...
34. Section 139 of the NI Act, which takes the form of a "shall presume" clause is illustrative of a presumption of law. Because Section 139 requires that the Court "shall presume" the fact stated therein, it is obligatory on the Court to raise this presumption in every case where the factual basis for the raising of the presumption had been established. But this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary as is clear from the use of the phrase "unless the contrary is proved"..."
(Emphasis supplied)
10. Strikingly, the Hon'ble Supreme Court in Rangappa CA No. 303/2023 Ram Kumar Mishra v. Krishan Kumar Page No. 16 of 39 Digitally signed ABHISHEK by ABHISHEK GOYAL GOYAL Date: 2024.10.15 17:05:16 +0530 v. Sri Mohan, (Supra.), while painstakingly evaluating the intent and purpose behind the introduction of Section 139 under the Statute books/NI Act, observed as under;
"26. In light of these extracts, we are in agreement with the respondent claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat [(2008) 4 SCC 54: (2008) 2 SCC (Cri) 166] may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant.
27. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the defendant-accused cannot be expected to discharge an unduly high standard or proof."
(Emphasis supplied)
11. Markedly, it is observed from above that the presumption envisioned under Section 139 NI Act not only pertains to the fact that the cheque in question was drawn in discharge of debt or liability, rather, also includes 1 a presumption that there exists a legally enforceable debt or liability at the time of 1 S. Natarajan v. Sama Dharman, (2021) 6 SCC 413.
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ABHISHEK GOYAL
GOYAL Date:
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such drawing. Indisputably1, the burden to rebut the presumption lies on an accused, by establishing probable defence. Needless to further observe here that, though, in order to rebut the statutory presumptions2, "an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial", however, the law is settled3 that a bare denial of the passing of the consideration or of existence of debt/liability by an accused, would not serve the purpose or come to the aid/rescue of an accused. In fact, law is well settled that under such circumstances, it is expected from an accused to bring 'something which is probable', on record for getting the burden of proof shifted to the complainant. Reference in this regard is made to the decision in Kumar Exports v. Sharma Carpets, (Supra.) , wherein the Hon'ble Apex Court, explicated the law in regard the foregoing as under;
"20. The accused in a trial under Section 138 of the Act has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case the 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 presumptions an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not insist in every case that the accused should disprove the non-existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the 1 Rajaram v. Maruthachalam, 2023 SCC OnLine SC 48.2
Rohitbhai Jivanlal Patel v. State of Gujarat, (2019) 18 SCC 106.3
Kishan Rao v. Shankargouda, (2018) 8 SCC 165.
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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. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on to the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arising under Sections 118 and 139 of the Act."
(Emphasis supplied)
12. Further, Section 118(a) NI Act provides for a presumption in favour of the complainant1 inter alia to the effect that the negotiable instrument or the endorsement was made or endorsed for consideration. Concomitantly, it is further apposite to make a reference to the presumption visualized under Section 118(e) NI Act at this stage, which pertains to the endorsement appearing upon negotiable instruments, being genuine. Relevantly, it is trite law that the said presumption operates in favour of the holder in due and in case an accused intends to rebut such presumption, he would be required to lead evidence, rather than a mere denial of his signatures on the cheque. Significantly, the Hon'ble Supreme Court in Ajitsinh Chehuji Rathod v. State of Gujarat, (2024) 4 SCC 453, while assessing the provisions under Section 118(e) NI Act, remarked as under;
"13. Section 118 sub-clause (e) of the NI Act provides a clear presumption regarding indorsements made on the negotiable instrument being in order in which they appear thereupon. Thus, the presumption of the indorsements on the cheque being genuine operates in favour of the holder in due course of the cheque in question which would be the complainant 1 Kundan Lal Rallaram v. Custodian, Evacuee Property, 1961 SCC OnLine SC 10.
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herein. In case, the accused intends to rebut such presumption, he would be required to lead evidence to this effect.
14. Certified copy of a document issued by a bank is itself admissible under the Bankers' Books Evidence Act, 1891 without any formal proof thereof. Hence, in an appropriate case, the certified copy of the specimen signature maintained by the bank can be procured with a request to the court to compare the same with the signature appearing on the cheque by exercising powers under Section 73 of the Evidence Act, 1872."
(Emphasis supplied)
13. Ergo, being cognizant of the aforenoted principles, this Court would now proceed with the assessment of the rival contentions of the appellant and the respondent. Pertinently, the Ld. Counsel for the appellant has outrightly contended that the particulars of the cheque such as the name of the payee, amount in words and figures, etc., were neither filled by the appellant nor the same were in his handwriting. However, the said averment of the Ld. Counsel for the appellant are belied from the statement of the appellant, recorded at the time of framing of notice under Section 251 Cr.P.C. on 01.11.2019, in particular, the appellant's response to Q.2 therein inter alia to the effect 'whether the appellant admitted his signatures on the cheque in question?' Notably, in response to being specially questioned the same, the appellant, unambiguously asserted, "Yes, I admit my signatures on the said cheque. I have also filled the amount in words as well as digits. I have not filled the payee name and date in the cheque in question." Significantly, the appellant, again, at the time of recording of his statement in terms of the provisions under Section 294/313 Cr.P.C. dated 01.11.2019, reiterated that he/the appellant had filled the amount in words as well as digits in the cheque in question, however, did not fill the payee's name as well as the date, thereupon. Strikingly, the appellant, in his cross-examination CA No. 303/2023 Ram Kumar Mishra v. Krishan Kumar Page No. 20 of 39 Digitally signed by ABHISHEK ABHISHEK GOYAL Date: GOYAL 2024.10.15 17:05:45 +0530 dated 13.12.2022, though, did not deny issuance of cheque for a sum of Rs. 4,00,000/- (Rupees Four Lakhs only) to the respondent, however, proclaimed at such a stage that the said cheque was, "given as undated blank signed". Correspondingly, while cross- examining the respondent/complainant/CW-1 on 30.04.2022, a suggestion was put forth to the complainant/CW-1 asserting that the one blank signed cheque was handed over to the respondent by the appellant and that the appellant has filled up the amount and date as a surety, which was denied by the appellant. Notably, from the aforesaid, it is quite lucidly perceived that the signatures and particulars of the cheque amount in figures have been explicitly affirmed by the appellant to have been filled by him at the time of framing of notice under Section 251 Cr.P.C as well as while admitting documents in terms of the provisions under Section 294 Cr.P.C. on 01.11.2019. However, at that time, the appellant merely/specially proclaimed that the remaining particulars, including the date of the dishonoured cheque and payee's details were not filled by him. However, even subsequently, in his deposition dated 31.10.2022 and the cross examination of the respondent dated 30.04.2022, the appellant merely asserted that he handed over blank signed cheque to the respondent. In fact, the appellant, whilst being confronted with the variance in his assertion under Q.2 at the time of framing of notice inter alia to the effect that he had signed, filled the date as well as particulars of amount (in figures and word) at the time of framing of notice under Section 251 Cr.P.C. on 01.11.2019 and his subsequent assertion that he merely handed over blank signed cheque to the respondent, in his/appellant's cross examination dated 13.12.2022, proclaimed as under;
CA No. 303/2023 Ram Kumar Mishra v. Krishan Kumar Page No. 21 of 39
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ABHISHEK GOYAL
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"...It is correct that the cheque in question was given by me. I had given as undated blank signed. The witness is confronted with the reply to the notice of accusation and the witness is asked as to whether his statement today or the answer to question number 2 is correct. The witness has stated that he stands by his statement today and the previous answer of notice to accusation is incorrect..."
(Emphasis supplied)
14. As aforenoted, under such factual scenario, Ld. Counsel for the appellant has fervently argued that no liability under Section 138 NI Act can be attributed to/attracted against the appellant, especially when (as per the Ld. Counsel) the particulars appearing on the dishonoured cheques were not filled by the appellant. However, the said contention does not find favour with this Court, despite the appellant making varied statements as to the filling of the particulars of date and amount along with his signatures at the time of framing of notice under Section 251 Cr.P.C., as aforenoted, and subsequent assertion that he had merely handed over the cheque in question as a blank signed cheque. In fact, this Court is conscious of the fact that the law in this regard is well settled that filling of particulars of cheque by any person, other than the drawer does not invalidate the cheque and the liability under Section 138 NI Act/presumption under Section 139 NI Act would still be attracted under such situation(s), when the signatures on the cheque in question is duly admitted by the drawer/accused. Reference in this regard is made to decision in Bir Singh v. Mukesh Kumar, (Supra.), wherein the Hon'ble Supreme Court observed as under;
"33. 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 CA No. 303/2023 Ram Kumar Mishra v. Krishan Kumar Page No. 22 of 39 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2024.10.15 17:05:57 +0530 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 .
34. 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.
*** *** ***
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."
(Emphasis supplied)
15. Markedly, under the present situation, when both the appellant and the respondent affirm that the cheque was signed and handed over by the appellant to the respondent, the contention of the Ld. Counsel for the appellant that the cheque in question was not filled in the appellant's handwriting, i.e., the date of cheque and/or the payee's details thereon were not filled by the appellant, albeit only subsequent, would not, in the considered opinion of this Court, come to any aid/rescue of the appellant, in view of the aforenoted judicial dictate(s). Needless to reiterate that the law is well settled that even when a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars and that the same would not, in itself, invalidate the cheque. On the contrary, even under such circumstances, presumption under Section 139 NI Act would be attracted, burden lying on the drawer of cheque to rebut the same as per law/by preponderance of probabilities, which as hereinunder noted, the appellant has failed to do so.
16. Apropos the present discourse, this Court now deems CA No. 303/2023 Ram Kumar Mishra v. Krishan Kumar Page No. 23 of 39 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2024.10.15 17:06:02 +0530 it apposite to deal with the contention of the Ld. Counsel for the appellant at this stage inter alia to the effect that the dishonoured cheque and Ex. CW1/1 and CW1/3 were handed over by the appellant to the respondent to facilitate obtainment of loan, which as per the Ld. Counsel for the appellant were misused by the respondent. In fact, in this regard, Ld. Counsel for the appellant has vigorously relied upon the answer to Q.5 at the time of framing of notice dated 01.11.2019 inter alia asserting as under;
"Q. 5. What do you want to say in your defence? Ans. I had approached the complainant for a loan of Rs. 4,00,000/- and complainant demanded a cheque of Rs. 4,00,000/- prior to giving of the loan amount. I gave the cheque as demanded by the complainant, but the complainant never gave me the amount of Rs. 4,00,000/- and also did not return the cheque to me. I have not legal debt or liability towards the complainant..."
(Emphasis supplied)
17. Relevantly, the appellant/DW-1, in his deposition before the Ld. Trial Court further asserted as under;
"I am the accused in the present matter. I went to the complainant when I required to procure a loan from either the complainant or any bank for a sum of Rs. 4,00,000/-. I was asked by the complainant to give the cheque in question for the purposes of procuring the loan. I had given the cheque in question as undated blank signed cheque. I was not disbursed any loan either by the complainant or by any bank. I had orally requested the return of my cheque wherein the complainant refused to do so.
The complainant took my signature on bank papers and subsequently filled them up and has filled them along with the instant matter As Ex. CW1/1 and Ex. CW1/3. I am not liable under the cheque in question as the complainant had misused the cheque without any liability in my favour."
(Emphasis supplied)
18. Apposite at this stage to further refer to the cross examination of the respondent/CW-1 dated 30.04.2022, to the said effect, relevant extracts of which cross-examination is reproduced CA No. 303/2023 Ram Kumar Mishra v. Krishan Kumar Page No. 24 of 39 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2024.10.15 17:06:06 +0530 as under;
"...I gave money to the accused as he needed money for business and requested me for help. It is wrong to suggest that I assured him to arrange bank loan. It is wrong to suggest that accused gave two blank signed cheques of Rs. 2 lacs each as a surety. It is wrong to suggest that those cheques were misplaced by me. It is wrong to suggest that Accused gave one blank signed cheque and I filled up the amount and date as a surety. It is wrong to suggest that I have received one blanked signed receipt on a revenue ticket. It is wrong to suggest that I have not given any money to the accused. It is wrong to suggest that I took any advantage and assured the accused that I would arrange loan from him. It is wrong to suggest that I asked the accused to hand over me the receipt and blank signed cheque and assured him to arrange a loan. It is wrong to suggest that on my assurance accused gave me the blanked signed cheque and receipt and I file case against him. It is wrong to suggest that I have not paid any money to the accused..."
(Emphasis supplied)
19. Conspicuously, from a conjoint reading of the aforesaid, it is observed that though, at the time of framing of notice under Section 251 Cr.P.C. dated 01.11.2019 and his examination in chief, dated 31.10.2022, the appellant/DW-1 asserted that he handed over the cheque in question to the respondent in order to obtain loan. However, as per the appellant, neither the cheque was returned to the appellant nor was any loan amount disbursed by the respondent herein. In fact, as per the appellant, he orally requested the respondent for return of the said cheque, as proclaimed by him in his examination in chief dated 31.10.2022, yet, the respondent failed to do so. Markedly, while cross examining the respondent/CW-1 on 30.04.2022, it was additionally proclaimed/suggested to the respondent/complainant by/on behalf of the appellant that he had handed over two other cheques for a sum of Rs. 2,00,000/- (Two Lakhs only) each to the respondent, prior to issuance of cheque in question, which were CA No. 303/2023 Ram Kumar Mishra v. Krishan Kumar Page No. 25 of 39 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2024.10.15 17:06:09 +0530 allegedly lost by the respondent. Further, as per the appellant, the receipts were suggested to have been handed over, in blank and signed by the appellant to the respondent, in order to facilitate procurement of the loan amount. In fact, it was specially suggested by the appellant to the respondent at such time/on the date of respondent's cross examination dated 30.04.2022 that despite the amount in question not being disbursed to the appellant by the respondent, the respondent misused the cheque as well as blank signed receipts to initiate the instant case against the appellant. However, upon a scrupulous analysis of the documents and material placed on record, this Court finds itself difficult to be convinced with the version of incidents or the probable defence, as put forth by the appellant herein. In fact, in this regard, it is outrightly observed that while the factum of issuance of two other cheques for a sum of Rs. 2,00,000/- (Two Lakhs only) each, besides the cheque in question, find mention in the cross examination of the respondent/CW-1 for the first time on 30.04.2022, however, the said fact was neither mentioned at the time of framing of notice under Section 251 Cr.P.C. on 01.11.2019 and the subsequent deposition of the appellant on 31.10.2022.
Even otherwise, the version of the appellant that he had handed over the blank signed cheque as well as blank receipt to the respondent, which were exploited by the respondent do not appeal to the senses of this Court, especially when the appellant has failed to demonstrate as to despite being made aware of such so called 'misuse/exploitation' of the said documents in question, the appellant did not opt to seek return thereof or initiate any proceedings/complaint against the respondent for his said alleged acts. In fact, the factum of issuance of cheque in question (Ex. CW1/2) and the undertakings/signed receipts (Ex. CW1/1 and Ex.
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CW1/3) specifically find mention under paras 3 and 4 of the respondent's legal demand notice dated 18.04.2019 (Ex. CW1/5). However, the appellant, despite acknowledging the receipt of said notice at the time of framing of notice under Section 251 Cr.P.C. (under Q.3 thereof) and admission recorded under Section 294/313 Cr.P.C. (under Q. 3 thereof), both, dated 01.11.2019, opted not to reply to the said notice or to even initiate any legal proceedings/complaint against the respondent, as aforenoted. In fact, when being specially confronted regarding the same in his cross examination dated 13.12.2022, the appellant/DW-1 affirmed as under;
"...I have not filed any complaint against the complainant in respect of his alleged unlawful acts. Ex. CW1/3 has been signed by me and has not been filled up by me. (Vol. My signature was obtained on a blank paper). It is wrong to suggest that I am deposing falsely in this regard. Ex. CW1/1 has been signed by me but had been signed at a time when the said document was a blank piece of paper. It is wrong to suggest that I have duly read Ex. CW1/1 and Ex. CW1/3 before signing. I do not remember the date and time when my signature at point A were obtained on Ex. CW1/1 & 3. I had signed on blank papers on the trust and confidence on the complainant due to our long relationship..."
(Emphasis supplied)
20. Correspondingly, the appellant/DW-1 in his cross examination dated 13.12.2022 affirmed regarding the cheque in question as well as the 'so called' earlier cheques as under;
"...I did not receive any amount out of the bank loan. I did not receive Rs. 4,00,000/- from the complainant as promised (Vol. I was asked to hand over the cheque in question first). It is wrong to suggest that the cheque in question was handed over after disbursal of loan. (Vol. I was asked to give two cheques of Rs. 2,00,000/- each before the disbursal of loan. The said cheques were never returned to me). The cheque of Rs. 4,00,000/- was demanded by the complainant subsequently. It is wrong to suggest that no cheques of Rs. 2,00,000/- were given to the CA No. 303/2023 Ram Kumar Mishra v. Krishan Kumar Page No. 27 of 39 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2024.10.15 17:06:18 +0530 complainant and only a cheque of Rs. 4,00,000/- was given by me to the complainant after taking loan. It is correct that the cheque in question was given by me. I had given as undated blank signed..."
(Emphasis supplied)
21. Conspicuously, in light of the foregoing, this Court unambiguously reiterates that the defence of the appellant pertaining to the dishonoured cheque as well as the receipts/undertakings, i.e., Ex. CW1/1 and Ex. CW1/3, being issued for the purpose of procuring the loan by the appellant from/with the assistance of the respondent, does not appeal to the senses of this Court, for the reasons noted hereinabove. In particular, from the facts and circumstances brought forth it does not seem logical as to why the appellant would issue another cheque for Rs. 4,00,000/- (Rupees Four Lakhs only) to the respondent herein, after the respondent is asserted to have earlier misplaced/lost/not returned two cheques for a sum of Rs. 2,00,000/- (Rupees Two Lakhs only) each. Further, this Court finds itself difficult to concede with the submission of the appellant/Ld. Counsel for the appellant that despite such misplacement/loss/non-return of earlier cheques, the appellant issued another blank cheque as well as blank signed receipts and never sought for either the return thereof or initiated any proceedings against the respondent, even after being made aware of such 'so called misuse' vide respondent's demand notice dated 18.04.2019 (Ex. CW1/5). In fact, as aforenoted, the appellant deliberately opted neither to reply to the said notice, nor raised any such defence of even the receipts in question having been wrongfully got signed by the respondent from the appellant at the time of framing of notice under Section 251 Cr.P.C. on 01.11.2019. Au contraire, it was only at the time of respondent's cross CA No. 303/2023 Ram Kumar Mishra v. Krishan Kumar Page No. 28 of 39 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2024.10.15 17:06:23 +0530 examination dated 30.04.2022, the factum of said earlier cheques or the appellant's signing the receipts as blank papers, was raised by/on behalf of the appellant. Needless to reiterate that the said defence not only, in considered opinion of this Court, an afterthought, flimsy and insubstantial, rather, unbelievable, and unconvincing. Undoubtedly, as aforenoted, to rebut the statutory presumption under Section 118/139 NI Act, it is not expected from an accused/appellant herein to prove his defence 'beyond reasonable doubt' and that the same may be done by bringing 'something which is probable' on record for getting the burden of proof shifted to the complainant. However, in the instant case, the appellant has failed to bring forth any such facts and circumstances, upon consideration of which, this 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." On the contrary, as aforenoted, the inherent inconsistencies and discordances in the various version put forth by the appellant in his defence, make the same highly implausible and trifling. Correspondingly, this Court concurs with the finding of the Ld. Trial Court that the appellant has not been able to rebut the initial presumption raised against him.
22. In as much as the contention of the Ld. Counsel for the appellant pertaining to respondent's lack of financial capacity to lend the loan of Rs. 4,00,000/- (Rupees Four Lakhs only) is concerned, it is outrightly observed that the law in aspect is trite1 th at it is not obligatory on the complainant to first assert his financial capacity in the case of cheque dishonour, unless an accused sets up a case regarding such complainant's wherewithal. Reference in 1 APS Forex Services (P) Ltd. v. Shakti International Fashion Linkers, (2020) 12 SCC 724; and K. Ilayarajalingam v. K. Karthikeyan, Crl. R.C. No. 1123 of 2017, dated 20.06.2022 (Madras HC).
CA No. 303/2023 Ram Kumar Mishra v. Krishan Kumar Page No. 29 of 39 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date: 2024.10.15 17:06:27 +0530 this regard is made to the decision of the Hon'ble Supreme Court in Tedhi Singh v. Narayan Dass Mahant, (2022) 6 SCC 735, wherein the Hon'ble Court expounded the law regarding the foregoing as under;
"10. The trial court and the first appellate court have noted that in the case under Section 138 of the NI Act the complainant need not show in the first instance that he had the capacity. The proceedings under Section 138 of the NI Act is not a civil suit. At the time, when the complainant gives his evidence, unless a case is set up in the reply notice to the statutory notice sent, that the complainant did not have the wherewithal, it cannot be expected of the complainant to initially lead evidence to show that he had the financial capacity. To that extent, the courts in our view were right in holding on those lines. However, the accused has the right to demonstrate that the complainant in a particular case did not have the capacity and therefore, the case of the accused is acceptable which he can do by producing independent materials, namely, by examining his witnesses and producing documents. It is also open to him to establish the very same aspect by pointing to the materials produced by the complainant himself. He can further, more importantly, achieve this result through the cross-examination of the witnesses of the complainant. Ultimately, it becomes the duty of the courts to consider carefully and appreciate the totality of the evidence and then come to a conclusion whether in the given case, the accused has shown that the case of the complainant is in peril for the reason that the accused has established a probable defence"
(Emphasis supplied)
23. Strikingly, in the instant case, as aforenoted, the appellant did not respond to the legal demand notice (Ex. CW1/5) raising any such objection as to the financial capacity of the respondent herein. In fact, it was only during the respondent's cross examination dated 30.04.2022, the appellant made a feeble endeavor to seek respondent's ability to arrange for the loan amount, which was responded by the respondent as under;
"Q: How you arrange the money as you worked as a teacher in MCD School?
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A: I had taken loan for repair and maintenance of my house but due to covid guidelines the repair and maintenance work restrained by the Government and for that reason I had the money out of which I provided money to the accused..."
(Emphasis supplied)
24. Remarkably, while seeking recourse to respondent's said proclamation, in particular, to the fact that while the loan is asserted by the respondent to have been given in the year, 2018 and the Covid-19 guidelines, coming to force in the year, 2020, it was asserted that the respondent did not have the capacity to lend money to the appellant. However, the said contention, too, fails to impress this Court. Here, it is relevant to reiterate that the appellant nowhere prior to enquiring as aforesaid from the respondent, in his cross examination, did not raise any question as to the financial capacity of the respondent herein. Even otherwise, the appellant even in the respondent's cross examination did not lead any suggestion inter alia challenging respondent's financial capacity to lend money to the appellant. In fact, even upon the respondent's declaration that he had obtained loan for repair and maintenance purpose(s), the appellant opted not even to seek production of any documents/summoning of documents from the respondent to support his said assertion. Rather, as aforementioned, the appellant merely asserted that since the Covid-19 guidelines came into being in the year 2020, the assertion of the respondent of having obtained loan for the same and not been able to utilize for repair purpose does not fall in tandem with the respondent's proclamation of having lend out the money to the appellant in the year 2018. However, even on this aspect, this Court concurs with the finding of the Ld. Trial Court that the proclamation of the respondent has to be read disjunctively, especially when the superior courts have CA No. 303/2023 Ram Kumar Mishra v. Krishan Kumar Page No. 31 of 39 Digitally signed ABHISHEK by ABHISHEK GOYAL GOYAL Date: 2024.10.15 17:06:36 +0530 persistently avowed1 that witnesses do have tendency to exaggerate, embroider or embellish their version before court. Reference in this regard is made to the decision in Sohrab v. State of M.P., (1972) 3 SCC 751, wherein the Hon'ble Apex Court, unwaveringly proclaimed as under;
"8. ...It appears to us that merely because there have been discrepancies and contradictions in the evidence of some or all of the witnesses does not mean that the entire evidence of the prosecution has to be discarded. It is only after exercising caution and care and sifting the evidence to separate the truth from untruth, exaggeration, embellishments and improvement, the Court comes to the conclusion that what can be accepted implicates the appellants it will convict them. This Court has held that falsus in uno falsus in omnibus is not a sound rule for the reason that hardly one comes across a witness whose evidence does not contain a grain of untruth or at any rate exaggeration, embroideries or embellishments. In most cases, the witnesses when asked about details venture to give some answer, not necessarily true or relevant for fear that their evidence may not be accepted in respect of the main incident which they have witnessed but that is not to say that their evidence as to the salient features of the case after cautious scrutiny cannot be considered though where the substratum of the prosecution case or material part of the evidence is disbelievable it will not be permissible for the Court to reconstruct a story of its own out of the rest..."
(Emphasis supplied)
25. Ergo, in light of the foregoing this Court reiterates that merely because the respondent asserted that he could not utilize the loan obtained by him owing to covid guidelines and which amount was lent by him/the respondent to the appellant, which does not fall in tandem with the timeline for loan and cheque dishonour, the entire version of respondent cannot be discarded. Needless to reiterate that the appellant did not challenge the financial capacity of the respondent either by issuing any reply to legal demand notice (Ex. CW1/5) nor at the time of framing of 1 Sucha Singh v. State of Punjab, (2003) 7 SCC 643.
CA No. 303/2023 Ram Kumar Mishra v. Krishan Kumar Page No. 32 of 39
Digitally signed
ABHISHEK by ABHISHEK
GOYAL
GOYAL Date: 2024.10.15
17:06:42 +0530
notice on 01.11.2019, rather, merely asked the aforesaid question from the respondent in his cross examination on 30.04.2022. Further, even at that stage, upon the respondent's declaration that the loan was obtained by the respondent for his house repair, which was eventually lent to the appellant, the appellant did not ask the respondent to produce any documents/summon any material from the respondent in support of the said declaration or even suggested to the respondent regarding his 'so called' financial inability anywhere in his/respondent's cross examination. On the contrary, the said assertion is further belied from the appellant's declaration that he repeatedly approached the respondent for loan, despite him having allegedly misplaced his earlier two cheques for a sum of Rs. 2,00,000/- (Rupees Two Lakhs only) each. Here it is relevant to note that even presuming that the respondent promised to arrange for loan amount for the appellant from a bank and that the respondent did not have the financial capacity to lend, as contended by the appellant herein, it does not appeal to the senses of this Court as to why the appellant would insistently entrust the respondent by issuing blank cheque and blank signed papers, after he had allegedly lost earlier two cheques for a sum of Rs. 2,00,000/- (Rupees Two Lakhs only) each, albeit to arrange money from a bank or 'somewhere'. Needless to reiterate the improbability and mendacity of the said averment would be quite ostensible from the fact that admittedly the appellant never asked for return of such return of such blank cheques or signed blank documents from the respondent, despite his lack of 'so called' financial capacity or of inability to arrange funds or even after receipt of legal demand notice dated 18.04.2019 (Ex. CW1/5). As a corollary, this Court is further in concurrence with the finding of the Ld. Trial Court that the document placed on record of the Ld. CA No. 303/2023 Ram Kumar Mishra v. Krishan Kumar Page No. 33 of 39 Digitally signed ABHISHEK by ABHISHEK GOYAL GOYAL Date: 2024.10.15 17:06:47 +0530 Trial Court, including the acknowledgement/receipts Ex. CW1/1 and Ex. CW1/3 stand in proof of advancement of loan by respondent to the appellant and the existence of legal debt/liability on the appellant herein, which documents (as well as presumption under law), the appellant has failed to rebut. Correspondingly, this Court also finds itself in agreement with the Ld. Trial Court's observation that in the instant facts and circumstances, the feeble plea of 'so called' lack of financial capacity of the respondent would not operate to the benefit of the appellant, when the advance of loan is proved by credible material on record. Indubitably, it is reiterated that under such circumstances, in the considered opinion of this Court, the appellant has not been able to raise a reasonable/defensible plea in support of his case or, been able to rebut the presumption under Section 139/118 NI Act in the instant case, even on preponderance of probabilities. Needless to mention that, though this Court holds highest regard of the decisions relied upon by Ld. Counsel for the appellant, however, the same would not come to the aid and rescue of the appellant, in the manner as pleaded by the Ld. Counsel for the appellant for the reason that the facts and circumstances of the present case are clearly distinguishable.
26. Conclusively, in conspectus of the above and inter alia keeping in view consistent testimony of the respondent/complainant/CW-1 as well as the documents placed on record, the only conclusion which can be arrived at in the facts and circumstances brought forth pertains to the guilt of the appellant for the commission of the offence under Section 138 NI Act. Needless to mention that the defence raised by the appellant are not only unworthy and uninspiring confidence, rather, irreconcilable as well as unworthy of credence. Accordingly, this CA No. 303/2023 Ram Kumar Mishra v. Krishan Kumar Page No. 34 of 39 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2024.10.15 17:06:55 +0530 Court has no hesitation in reasonably reaching a conclusion that the complainant has proved its case 'beyond reasonable doubt' against the appellant for the offence under Section 138 NI Act. On the contrary, the appellant has failed to raise a probable defence/defence by 'preponderance of probabilities' in his favour for the reasons hereinunder noted.
27. Significantly, in as much as the aspect of sentence awarded to the appellant by the Ld. Trial Court is concerned, this Court, at the outset, notes that the superior courts have persistently cautioned towards the grant of just and appropriate sentence, post- conviction, as well as cautioned1 that mere long pendency of case is no ground to award lesser sentence. In fact, in the instances of cheque dishonour cases, law is settled 2 that the sentence imposed must be such as to give proper effect to the object of the legislation and to dissuade unscrupulous drawers of such negotiable instruments from taking advantage of their own wrongs. In this regard, reference is made to the decision in Suganthi Suresh Kumar v. Jagdeeshan, (2002) 2 SCC 420, wherein the Hon'ble Apex Court unswervingly opined as under;
"12. The total amount covered by the cheques involved in the present two cases was Rs 4,50,000. There is no case for the respondent that the said amount had been paid either during the pendency of the cases before the trial court or revision before the High Court or this Court. If the amounts had been paid to the complainant there perhaps would have been justification for imposing a flea-bite sentence as had been chosen by the trial court. But in a case where the amount covered by the cheque remained unpaid it should be the lookout of the trial Magistrates that the sentence for the offence under Section 138 should be of such a nature as to give proper effect to the object of the legislation. No drawer of the cheque can be allowed to take dishonour of the cheque issued by him light-heartedly. The very object of enactment of 1 State of M.P. v. Ghanshyam Singh, (2003) 8 SCC 13.2
H. Pukhraj v. D. Parasmal, (2015) 17 SCC 368.
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ABHISHEK ABHISHEK GOYAL
GOYAL Date: 2024.10.15
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provisions like Section 138 of the Act would stand defeated if the sentence is of the nature passed by the trial Magistrate. It is a different matter if the accused paid the amount at least during the pendency of the case."
(Emphasis supplied)
28. Correspondingly, the Hon'ble Supreme Court in R. Vijayan v. Baby, (2012) 1 SCC 260 , while fervently professing towards the grant of reimbursement of the loss by way of compensation to the complainant/victim in cheque dishonour cases, avowed as under;
"17. The apparent intention is to ensure that not only the offender is punished, but also ensure that the complainant invariably receives the amount of the cheque by way of compensation under Section 357(1)
(b) of the Code. Though a complaint under Section 138 of the Act is in regard to criminal liability for the offence of dishonouring the cheque and not for the recovery of the cheque amount (which strictly speaking, has to be enforced by a civil suit), in practice once the criminal complaint is lodged under Section 138 of the Act, a civil suit is seldom filed to recover the amount of the cheque. This is because of the provision enabling the court to levy a fine linked to the cheque amount and the usual direction in such cases is for payment as compensation, the cheque amount, as loss incurred by the complainant on account of dishonour of cheque, under Section 357(1)
(b) of the Code and the provision for compounding the offences under Section 138 of the Act. Most of the cases (except those where liability is denied) get compounded at one stage or the other by payment of the cheque amount with or without interest. Even where the offence is not compounded, the courts tend to direct payment of compensation equal to the cheque amount (or even something more towards interest) by levying a fine commensurate with the cheque amount.
A stage has reached when most of the complainants, in particular the financing institutions (particularly private financiers) view the proceedings under Section 138 of the Act, as a proceeding for the recovery of the cheque amount, the punishment of the drawer of the cheque for the offence of dishonour, becoming secondary.
18. Having reached that stage, if some Magistrates go by the traditional view that the criminal proceedings are for imposing punishment on CA No. 303/2023 Ram Kumar Mishra v. Krishan Kumar Page No. 36 of 39 Digitally signed ABHISHEK by ABHISHEK GOYAL GOYAL Date: 2024.10.15 17:07:04 +0530 the accused, either imprisonment or fine or both, and there is no need to compensate the complainant, particularly if the complainant is not a "victim" in the real sense, but is a well-to-do financier or financing institution, difficulties and complications arise. In those cases where the discretion to direct payment of compensation is not exercised, it causes considerable difficulty to the complainant, as invariably, by the time the criminal case is decided, the limitation for filing civil cases would have expired. As the provisions of Chapter XVII of the Act strongly lean towards grant of reimbursement of the loss by way of compensation, the courts should, unless there are special circumstances, in all cases of conviction, uniformly exercise the power to levy fine up to twice the cheque amount (keeping in view the cheque amount and the simple interest thereon at 9% per annum as the reasonable quantum of loss) and direct payment of such amount as compensation. Direction to pay compensation by way of restitution in regard to the loss on account of dishonour of the cheque should be practical and realistic, which would mean not only the payment of the cheque amount but interest thereon at a reasonable rate. Uniformity and consistency in deciding similar cases by different courts, not only increase the credibility of cheque as a negotiable instrument, but also the credibility of courts of justice."
(Emphasis supplied)
29. Ergo, wary of the aforenoted judicial dictates, facts and circumstances of the present case as well as the arguments addressed by the Ld. Counsel for the appellant as well as the respondent, this Court unswervingly observes that the Ld. Trial Court has acted quite leniently with the appellant by awarding sentence/simple imprisonment for a period 01 (one) year and fine/compensation to a tune of Rs. 5,53,000/- (Rupees Five Lakhs Fifty Three Thousand only), to be paid by the appellant to the respondent/complainant, in default of payment of compensation, the appellant, being further directed to undergo simple imprisonment for a further period of 06 (six) months, under the impugned order/order of sentence dated 08.11.2023. Needless to mention that in the instant case, substantial time has lapsed since CA No. 303/2023 Ram Kumar Mishra v. Krishan Kumar Page No. 37 of 39 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2024.10.15 17:07:08 +0530 the initiation of the complaint proceedings by the respondent in the year, 2019, culminating in its adjudication in the present appeal, the respondent being embroiled in litigation for dishonoured cheque during the interregnum. Needless to further mention that the appellant has failed to demonstrate any mitigating factor, convincing this Court to grant any relaxation in favour of the appellant. Clearly, under such circumstances, this Court is of the considered opinion that no interference in the quantum of sentence awarded by Ld. Trial Court is warranted by this Court, while determining the present appeal, as the sentence awarded to the appellant by the Ld. Trial Court not only corresponds with the crime involved, rather, falls in tandem with the resolute declarations of the superior courts, as hereinunder noted.
30. Conclusively, in view of the above discussion, the present appeal deserves to be rejected/dismissed and is hereby dismissed. The judgment dated 29.08.2023, convicting the appellant for the offences punishable under Section 138 NI Act and the consequent order of sentence dated 08.11.2023, passed by the Ld. Metropolitan Magistrate/Ld. MM-06 (NI Act), Central, Tis Hazari Courts, Delhi, awarding the appellant; simple imprisonment for a period 01 (one) year and fine/compensation to a tune of Rs. 5,53,000/- (Rupees Five Lakhs Fifty Three Thousand only), to be paid by the appellant to the respondent/complainant, in default of payment of compensation, the appellant, being further directed to undergo simple imprisonment for a further period of 06 (six) months, in case bearing "Krishan Kumar v. Ram Kumar Mishra, CC No. 5707/2019", are hereby upheld. Appellant is directed to surrender before the Ld. Trial Court within a period of seven days from today for serving the sentence/remainder period thereof.
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Digitally signed
by ABHISHEK
ABHISHEK GOYAL
GOYAL Date:
2024.10.15
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31. Trial Court Record be sent back along with a copy of this order/judgment, with direction to proceed against the appellant as per law. Copy of this order/judgment be also given dasti to the appellant.
32. Appeal file be consigned to record room after due compliance. Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2024.10.15 17:07:17 +0530 Announced in the open Court (Abhishek Goyal) on 15.10.2024. ASJ-03, Central District, Tis Hazari Courts, Delhi CA No. 303/2023 Ram Kumar Mishra v. Krishan Kumar Page No. 39 of 39