Delhi District Court
Smt. Sudesh Kumari vs . on 11 March, 2022
IN THE COURT OF MS. CHARAN SALWAN METROPOLITAN MAGISTRATE(NI ACT)02 ,
WEST DISTRICT, TIS HAZARI COURTS, DELHI
CC No.: 10489-16
CNR NO.: DLWT02-001522/12
U/s 138 NI Act
In the matter of:
Smt. Sudesh Kumari,
W/o Late Sh. Randhawa Singh,
R/o. H.No. 81, Extension-II,
Nangloi, New Delhi ......Complainant
Vs.
Sh. Prayagi Lal Yadav,
S/o Sh. Sumer Singh,
R/o. 77- Tuwan Tilla,
Azadpur, Lalit Pur, U.P. ...... Accused
DATE OF INSTITUTION : 11.07.2012
OFFENCE COMPLAINED OF : S.138 NI Act
PLEA OF THE ACCUSED : PLEADED NOT GUILTY
DATE WHEN JUDGMENT RESERVED : 02.03.2022
DATE OF JUDGMENT : 11.03.2022
DECISION : CONVICTED
CC No. 10489-16 Smt. Sudesh Kumari Vs. Prayagi Lal Yadav Page No.1 / 18
JUDGMENT:-
1. Vide this judgment, I shall decide the present complaint filed u/s 138 Negotiable Instrument Act by the complainant against the accused. Before going further, it is necessary to dwell upon the brief facts of this case.
Brief facts:
2. In brief, the case of the complainant as narrated in the complaint is that the accused is a family friend of the Complainant since a long time. The husband of the complainant, Sh. Randhawa Singh and the accused applied for allotment of two industrial plots in the Industrial Area Chandera Lalit Pur, U.P. in 2005 and plots were allotted by Distt. Industries Centre, Lalit Pur, U.P. The plot allotted in the name of Sh. Randhawa Singh was cancelled by the Distt. and Industries Centre, however, the plot in the name of the accused remained allotted. Thereafter, the accused approached the complainant in 2010 to start a small scale industrial Unit for manufacturing of fasteners/nut bolt etc. on his industrial plot No. E-15, Chandera Industrial Area Lalit Pur, U.P. in partnership. The complainant alongwith Sh. Kanwar Singha and Sh. Somveer gave the accused a total sum of Rs. 21.57 lacs on different occasions/dates through cheques as well as in cash for starting the unit on the plot allotted to the accused. The accused thereafter constructed the building and machineries were purchased from Amritsar and installed them at the plot with the help of the Complainant and her associates. The accused also got drafted a partnership in the name of the firm ' M/s Chandervanshi Industries' having the following partners:
(a) Sh. Prayagi Lal Yadav - 40%
(b) Smt. Sudesh Kumari 40%
(c) Sh. Somveer Singh- 10%
(d) Sh. Kanwar Singh - 10% Before commencement of commercial production of the unit, the accused told the complainant and her associate that no subsidy is available in a partnership firm and in CC No. 10489-16 Smt. Sudesh Kumari Vs. Prayagi Lal Yadav Page No.2 / 18 order to avail subsidy the accused got the firm registered with Khadi Gram Udyog Board as a proprietorship concern. Thereafter, the accused informed the complainant that partnership deed shall be only for sake of investment and to share profits. The accused executed an agreement on 30.12.2011 of having received the money to the tune of Rs.
16,00,000/-from the Complainant and thereafter the accused gave a blank signed cheque bearing No. 229951 (Ex. CW-1/C) drawn on Syndicate Bank, Lalit Pur, Delhi (hereinafter called the cheque in question) and assured the complainant to settle their dues at the earliest and stated that after the final settlement, the blank cheque would be taken back.
3. Thereafter, the accused agreed to pay the complainant and her associates Rs. 21.57 lacs and asked them to use the blank cheque bearing No. 229951 for Rs. 16,00,000/-. The complainant presented the cheque for encashment, but it got dishonoured on presentation with remarks "Funds Insufficient" vide returning memos dated 07.05.2012 (Ex. CW-1/E). This constrained the complainant to send a legal demand notice dated 17.05.2012 (Ex. CW- 1/F) which was sent to the accused vide postal receipt dated 29.05.2012 (Ex. CW- 1/G), to which no heed was paid by the accused and as a result, the present complaint was filed by the complainant.
4. Pre-summoning evidence was led, cognizance of the offence u/s 138 NI Act was taken against the accused vide order dated 05.01.2013. Thereafter, summons were issued against the accused. The accused entered into appearance, copy of the complaint as well as of documents were supplied to the accused.
5. Subsequent to that notice u/s 251 Cr.P.C for offence u/s 138 N.I. Act was served upon the accused to which the accused pleaded "not guilty" and claimed trial. In his plea of defence, recorded on 30.07.2014, the accused admitted his signatures on cheques in question and stated that he did not fill other particulars of the cheque in question. The accused stated that he was having business transactions with the complainant and for the supply of machinery by the complainant he had issued the cheque in question. The accused stated that he had made the payment for the machinery to the complainant. The accused stated that he did not receive any legal demand notice issued by the complainant. The accused stated that he does not owe any liability towards the complainant qua the cheque in question.
CC No. 10489-16 Smt. Sudesh Kumari Vs. Prayagi Lal Yadav Page No.3 / 18Evidence of the complainant
6. The Complainant, in order to prove her case, examined two witnesses i.e.,
(i) Complainant, herself as CW-1
(ii) Sh. Kanwar Singh as CW-2
7. The complainant adopted her pre-summoning evidence as her post summoning evidence. She was duly cross-examined by the Ld. Counsel for accused.
8. In her cross-examination, she admitted that an agreement was made between her, the accused, Sh. Somveer Singh and Sh. Kanwar Singh. She stated that she was not working in the firm. She stated that she was not aware if a profit and loss account was maintained. She stated that she used to visit Lalit Pur once or twice a month. Further, she stated that she did not visit the factory even once. She stated that she is aware of Guru Nanak Machine Tools, Amritsar, but she never visited their factory. She stated that she has received a payment of Rs. 7.5 lacs from Guru Nanak Tools. She stated that this amount was taken from her and transferred to her. She stated that she does not know how many times the other partners visited the factory of Guru Nanak Tools to purchase machinery. Therafter, She was asked if she communicated with the partners regarding the business of M/s Chandravanshi Industries and purchase of machines etc., to which the complainant replied that it is incorrect. She stated that she has given more than 21 lacs to the accused and has the record of the same. She further stated that she has not received any amount from Guru Nanak Industry, Amritsar. The complainant brought on record her passbook of her account in Bank of Baroda (Ex. CW-1/Y) which shows that she had given Rs. 2 lacs on 25.06.2011 to the accused and Rs. 1.5 lacs on 28.06.2011. The complainant also brought on record the passbook of Syndicate bank for the period of 19.08.2010 to 17.08.2011 (Ex. CW-1/X). She stated that she is a Govt. servant and she files her ITR. She stated that she did not show the dues which are payable by other persons in her ITR. She admitted that a sum of Rs. 1.5 lacs was deposited in her Syndicate Bank Account. She denied the suggestion that she has forged the blank cheque and misused by her after settlement of account.
CC No. 10489-16 Smt. Sudesh Kumari Vs. Prayagi Lal Yadav Page No.4 / 189. The evidence of CW-2, Sh. Kanwar Singh was recorded on 29.08.2017. In his examination-in-chief he stated that he knows the accused as he used to work with this maternal uncle in Saudi Arabia and used to visit his house in Nangloi. He further stated that his uncle and the accused were allotted plots at Chandera Industrial Area, Lalit Pur, U.P. The plot of his uncle was cancelled due to political influence. He stated that the accused proposed to the complainant, Sh. Somvir Singh and him to start factory at his plot. He further stated that they collected Rs. 22/23 lacs and handed over it to the accused in cash as well as through bank on various occasions. He stated that they also deposited the instalments for the plot of the accused. He stated that the factory was constructed by spending the above-said money at the plot of the accused. He stated that thereafter, the accused started misbehaving with them. He further stated that the accused on 30.12.2011, stated that he can return only her amount as she is widow of her friend and handed over one cheque of Rs. 16,00,000/- to the complainant and an agreement was also executed between the parties. His cross-examination was conducted on 07.03.2018 and 31.03.2018. In his cross-examination, he admitted that the agreement was made for business purposes between the accused, complainant and Sh. Somvir Singh. He admitted that in Lalitpur the loan from the Government was not available for partnership Firm. He stated that only partnership was executed, however, the work of partnership could not be started. He stated that accounts of profit and loss was not maintained as partnership business could not be started. He stated that he did not introduce the accused to Guru Nanak Machine Tools. He further stated the loan amount was about 21 lacs and total 18 machines were purchased for a total amount of Rs. 18 lacs besides other articles. He further stated that he knows one Sh. Ram Babu who is the brother-in-law of the accused and was witness to the agreement Ex. CW- 1/8. He stated that he did not receive any amount from Guru Nanak Machine Tools. He stated that he was not present in the room where the cheque in question was given by the accused. He denied the suggestion that the blank cheque was given to Smt. Sudesh Kumari or that the said cheque was to be returned to the accused after the settlement of account of partnership. He further stated that he did not deposit any instalment for the plot of the accused, Sh. Prayagi Lal. He denied the suggestion that the accused misbehaved with him. He stated that the factory situated at Chandera Industries, was constructed with his money also.
CC No. 10489-16 Smt. Sudesh Kumari Vs. Prayagi Lal Yadav Page No.5 / 18In his cross-examination, CW-2 produced the following documents:
1. Passbook of Punjab National Bank - Ex. CW-2/A of account No. 3073000101275023
2. Passbook of Syndicate Bank - Mark X of account No. 87552010010027
3. Toll Tax receipt bearing No. 0839934 dated 03.06.2011- Ex CW-2/D
4. Bill on plain paper - Ex. CW-2/E
5. Photocopies of invoices - dated 02.06.2011 & 11.09.2011- Mark Y and Z respectively
6. Bill Issued by Transport Company dated 02.06.2011 of Rs.
11,600/- - Ex. CW1/C Defence of the Accused
10. The version of facts discernible from the cross-examination of the complainant and the defence evidence of the accused is that the accused does not owe liability qua the cheque in question and that the cheque in question was given to the complainant at the request of the complainant as she had to show the cheque in question to someone. The accused submits that he is not liable to pay anything to the complainant as he has already made payment due towards the complainant.
11. In his defence, the accused chose to examine the following witnesses:
1. Himself as DW-1
2. DW-2 - Sh. Shivender Mishra, Chief Manager, SBI Naveen Gala Mandir, Lalitpur, U.P.
3. DW-3- Nikhil Kumar Srivastava, Branch Manager, Syndicate Bank, Lalitpur, U.P.
4. DW-4- Sh. Aditya Goyal, Manager PNB, Main Branch Tuwan Chauraha, Lalitpur, U.P.
5. DW-5- Sh. Salman Baig, Asst. Manager, HDFC Bank, Amritsar, Punjab
6. DW-6- Sh. Ram Babu Yadav
12. The examination of DW-1 was recorded on 10.10.2018. In his examination-in-
chief, he stated that he is the owner of the factory situated at Chandera, Lalitpur, U.P. CC No. 10489-16 Smt. Sudesh Kumari Vs. Prayagi Lal Yadav Page No.6 / 18 and the factory was also constructed by him at his cost. He stated that the complainant requested him to find some work for his nephew Sh. Kanwar Singh Rana. He stated that Sh. Kanwar Singh Rana asked him to start business of iron nails as there would be less investment in the said business. The accused stated that he informed Sh. Kanwar Singh that he does not require loan from the bank as he was having sufficient money. The accused stated that the complainant in connivance of her nephew Sh. Kanwar Singh Rana and Sombir have got prepared one deed showing the shares as 40% of complainant, 40% of accused and 10% each of Sh. Kanwar Singh and Sh. Sombir without his knowledge from Jhansi. The accused further stated that he had to pay Rs. 2 lacs to the complainant and he has already paid the same. Regarding the cheque in question, the accused stated as follows:
"At request of complainant and Sh. Kanwar Singh Rana I paid Rs. 12 lacs regarding the purchasing of land by the sister-in-law of the complainant. The complainant took Rs. 16 lacs from her sister-in-law to pay to the owner of the land but retained the same with her. She asked me to give one blank signed cheque to show to her sister-in- law. I in good faith handed over the same to her. After about five months, I received documents regarding bouncing of cheque. Then I contacted the complainant and asked the reason for presenting the cheque. Then she asked me to give Rs. 32 lacs and said that only then she would withdraw the case. Then I came to the Court. I do not owe any liability towards the complainant. The complainant has misused my cheque which was given without any liability."
Thereafter, the accused produced on record the certified copy of complaint filed by accused against complainant and Sh. Kanwar Singh Rana before the Ld. CJM, Lalitpur, Uttar Pradesh and same is Ex. DW-1/A.
13. The cross-examination of accused (DW-1) was conducted on 11.09.2019. The accused deposed as follows:
"I have constructed my factory in the year 2010 but I do not know the exact date. The amount of Rs. 10 lacs was withdrawn in instalments and given to the complainant in instalments only in the year 2010- CC No. 10489-16 Smt. Sudesh Kumari Vs. Prayagi Lal Yadav Page No.7 / 18 2011. I do not remember the date, month or year in which I paid entire amount to the complainant. I do not know in which month, year I had paid Rs. 16 lacs to sister-in-law of the complainant. Vol. I have got the list of money to her. I do not know the month, year in which the complainant asked me to give Rs. 32 lacs for withdraw the present case. Vol. it was two days prior when I got received the summons from the present case. It is wrong to suggest that I do not pay any amount to the complainant regarding this case. It is wrong to suggest that I have legal liability towards the complainant. It is wrong to suggest that I am deposing falsely."
14. The examination of DW-2 Sh. Shivender Mishra, Chief Manager, SBI Naveen Gala Mandir, Lalitpur, U.P. was conducted on 05.12.2018. He produced the certified copy of account no. 31431292447 of Sh. Prayagi Lal Yadav for the period 20.09.2010 to 14.09.2018. The same is Ex. DW-2/A (colly) (four pages). He was not cross-examined by the Ld. Counsel for the complainant despite opportunity given.
15. The examination of DW-3 Sh. Nikhil Kumar Srivastava, Branch Manager, Syndicate Bank, Opp. Naveen Gala Mandir, Lalitpur, U.P. was conducted on 05.12.2018. He produced the certified copy of account no. 87552010009744 of Sh. Prayagi Lal Yadav for the period 01.01.2009 to 29.11.2018. The same is Ex. DW-3/A (colly) (three pages). He was not cross-examined by the Ld. Counsel for the complainant despite opportunity given.
16. The examination of DW-4 Sh. Aditya Goyal, Manager PNB, Main Branch Tuwan Chauraha, Lalitpur, U.P. was conducted on 05.12.2018. He produced the certified copy of account no. 0299000103292621 of Sh. Prayagi Lal Yadav for the period 01.03.2011 to 03.10.2018. The same is Ex. DW-4/A (colly) (eight pages). He was not cross-examined by the Ld. Counsel for the complainant despite opportunity given.
17. The examination of DW-5 Sh. Salman Baig, Asst. Manager, HDFC Bank, Amritsar, Punjab was conducted on 05.12.2018. He produced the certified copy of account no. 08562020001099 of Gurunanak Machine Tools for the period March, 2009 CC No. 10489-16 Smt. Sudesh Kumari Vs. Prayagi Lal Yadav Page No.8 / 18 to November, 2018. The same is Ex. DW-5/A (colly) (86 pages). He also produced the account opening form of Gurunanak Machine Tooks Mark A. He was not cross- examined by the Ld. Counsel for the complainant despite opportunity given.
18. The examination of DW- 6 Sh. Ram Babu Yadav was conducted on 08.03.2019. In his examination-in-chief he stated that he is the witness of the agreement Ex. CW1/B and bears his signature at Point A. He stated that the accused gave a blank signed cheque to the complainant before him. He further stated that the accounts were not settled and it was agreed that if the amount is payable to the complainant, then it would be paid to the complainant and if amount is payable to the accused, then it would be payable to the accused. He further stated that the complainant had asked money from the accused. He stated that the complainant asked for a blank signed cheque to show to some other person as she had to pay some amount to that person and assured the accused that she will return the said cheque after settlement of accounts. He further submitted that the said cheque was given by the accused in the year 2011 and he was not sure if Ex CW-1/C was the said cheque. In his cross-examination, he stated that the complainant required the blank signed cheque to show some other person she had to pay some amount to that other person. He stated that the accused has already paid more than sufficient amount to the complainant which is not mentioned in Ex CW-1/A.
19. The factual position being thus, the legal benchmark which is to be satisfied in order to constitute an offence u/s 138 N. I. Act is:
a) That the accused issued a cheque in favour of the payee/complainant on an account maintained by him to discharge legal liability in whole or in part.
(b) That the cheque was presented within stipulated time by the complainant for encashment.
(c) That the cheque was dishonoured on presentation 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 CC No. 10489-16 Smt. Sudesh Kumari Vs. Prayagi Lal Yadav Page No.9 / 18 from that account by an agreement made with the bank.
(d) That the demand for the payment of the said amount of money is made by giving a legal demand notice within 30 days from the receipt of information from the bank regarding the return of the cheque as unpaid.
(e) That the accused fails to make payment of the cheque amount to the complainant within 15 days, after receiving of the legal demand notice.
20. Being cumulative, a person who has drawn the cheque is deemed to have committed an offence u/s 138 N. I. Act when all the above -mentioned ingredients are satisfied.
21. The Ld. Counsel for the complainant and the Ld. defence counsel have argued the matter at length. I have perused the submissions of both the parties and have gone through the judicial file.
22. On analysis of the facts and legal positions stated above, the court finds the parties to be at variance on only two issues i.e., firstly, whether the accused received the legal demand notice and secondly, whether the cheque in question was issued in favour of the complainant to discharge the legal liability of the accused to pay the amount of Rs.16,00,000/-.
Service of legal demand notice
23. The first defence of the accused is non -service of legal demand notice. It is contended on behalf of the accused that the accused did not receive the legal demand notice and therefore the ingredients of the offence under Section 138 NI Act are not fulfilled and this would inexorably result in the acquittal of accused. However, this claim of the accused for acquittal is not sustainable in the eyes of law.
24. In view of the authoritative Judgment of Hon'ble Supreme Court in C.C. Alavi CC No. 10489-16 Smt. Sudesh Kumari Vs. Prayagi Lal Yadav Page No.10 / 18 Haji vs Palapetty Muhadmmed and Ors. (2007) 6 SCC 555, the rigor of the requirement of service of legal notice has been reduced to an almost vanishing point in Section 138 NI Act jurisprudence. The Hon'ble Supreme Court while discussing the true intent behind the service of legal demand notice as a precursor to the launch of prosecution has quite categorically held that the service of summons of the court is opportunity enough for the accused to pay the cheque amount and evade prosecution, any accused who fails to pay the amount within 15 days of the service of summons, clearly cannot shield himself behind the technical demand of non-service of legal notice. The relevant extract of the decision deserves to be quoted in extenso:-
''17. It is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of criminal law, where there is no stipulation of giving of a notice before filing a complaint. Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under Section 138 of Act, make payment of the cheque amount and submits to the court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the 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 the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the G.C.Act and Section 114 of the Evidence Act. In our view, any other interpretation of the proviso, would defeat the very object of the legislation''.
25. Admittedly, the accused has failed to pay the cheque amount within a period of 15 days from the date of service of summons of his appearance before this court. Therefore, in view of the above stated Judgment passed by Hon'ble Apex Court, the fact of non-service of legal demand notice will not come to aid the accused and therefore, the accused cannot claim acquittal on this ground.
CC No. 10489-16 Smt. Sudesh Kumari Vs. Prayagi Lal Yadav Page No.11 / 1826. The non-service of legal notice argument having been met, let us now turn to the core issue in this case and examine ''whether the cheque in question can be said to have been issued in discharge of legal liability or not''.
Existence of legally enforceable debt or liability
27. It has been admitted by the accused that the cheque in question was signed by the accused and that the cheque in question was drawn from his account. Once these foundational facts are admitted and a factual base is established, presumption of cheque having been issued in discharge of legally recoverable debt and drawn for lawful consideration arises by virtue of Section 118 (a) and Section 139 of N. I. Act.
Section 118 (a) of the Act provides that until the contrary is proved, it shall be presumed that "that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration."
Further, Section 139 of the Act lays down that "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."
For appreciating the legal position, reliance is placed on the judgment of the Hon'ble Supreme Court in the case of Hiten P.Dalal v/s Bratindranath Banerjee (2001) 6 SCC 16 where in it was held that :
"22. Because both sections 138 and 139 require that the court "shall presume" the liability of the drawer of the cheques for the amounts for which the cheques are drawn, as noted in State of Madras vs. A Vaidyanatha Iyer AIR 1958 SC 61, 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. "It introduces an exception to CC No. 10489-16 Smt. Sudesh Kumari Vs. Prayagi Lal Yadav Page No.12 / 18 the general rule as to the burden of proof in criminal cases and shifts the onus on to the accused" (ibid). Such a presumption is a presumption of law, as distinguished from a presumption of fact which describes provisions by which the court "may presume" a certain state of affairs. Presumptions are rule of evidence and do no conflict with the presumption of innocence, because by the latter all that is meant is that the prosecution is obliged to prove the case against the accused beyond reasonable doubt. The obligation on the prosecution may be discharged with the help of presumptions of law or fact unless the accused adduces evidence showing the reasonable possibility of the non-existence of the presumed fact."
Therefore, it is a mandatory presumption though the accused is entitled to rebut the said presumption. In a catena of judgements, it has been laid down by the Hon'ble Supreme Court that such presumption in favour of the complainant cannot be rebutted by a mere plausible explanation, but more than a plausible explanation is required.
28. In Rangappa Vs Sri Mohan (2010)11 SCC 441, it was observed that Section 139 of N.I. Act is stated to be an example of a reverse onus clause which is in tune with the legislative intent of improving the credibility of negotiable instruments. Section 138 of N. I. Act provides for speedy remedy in a criminal forum, in relation to dishonour of cheques.
29. In case of Kumar Exports vs. Sharma Carpets, (2009) 2 SCC 513, the Hon'ble Supreme Court has held: -
"The accused under Section 138 NI Act has two options. He can either show that the consideration and debt did not exit or that under the particular circumstances of the case, the nonexistence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumption, an accused is not expected to prove his defence beyond reasonable doubt as it is expected of the complainant in a criminal trial. The accused CC No. 10489-16 Smt. Sudesh Kumari Vs. Prayagi Lal Yadav Page No.13 / 18 may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not insist in every case that the accused should disprove the nonexistence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist, or their nonexistence was so probable that a prudent man 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 the circumstantial evidence and if the circumstances so relied upon are so compelling, the burden may likewise shift again on 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 arises under Section 118 and 139 of NI Act''.
30. Further, in the case of K.N.Beena v/s Muniyappan, AIR 2001 SC 2000, it was established as follows :
"In a complaint u/s 138 the court has to presume that the cheque had been issued for a debt or liability, this presumption is rebuttable, however, the burden of proving that the cheque has not been issued for the discharge of debt or liability lies on the accused."CC No. 10489-16 Smt. Sudesh Kumari Vs. Prayagi Lal Yadav Page No.14 / 18
31. According to the scheme of N. I. Act, on proof of foundational facts, a presumption arises as to the cheques having been issued in discharge of the legal liability and the burden is on the accused to rebut the said presumption. This clearly is an instance of the rule of "reverse onus" in action where it is incumbent on the accused to lead what can be called as "negative evidence". The evidence of a character, not to prove a fact affirmative, but to lead evidence to show non-existence of a liability. Keeping in view, this is a departure from the cardinal rule of "presumption of innocence" in favour of the accused, keeping in mind that the negative evidence is not easy to be led by its very nature. It is now clearly settled that the accused can reverse this presumption on a scale of preponderance of probabilities. Lack of legally enforceable debt in favour of the complainant need not be proved to the hilt beyond all reasonable doubts. Preponderance is superiority in weight. Preponderance of probabilities means more probable than not and superior in evidentiary weight than the opposite.
32. As discussed above, it is clear that the accused need not discharge his liability beyond the shadow of reasonable doubt. He just needs to create holes in the case set out by the complainant. Accused can either say that the version brought forth by the complainant is inherently unbelievable and, therefore, the prosecution cannot stand, or the accused can give his version of the story and say that on the basis of his version the story of the complainant cannot be believed. In the first situation, the accused has nothing to do but to point inherit inconsistencies in the case of the complainant.
33. So far as the facts of liability is concerned, in view of mandatory presumption of law as discussed above, if any accepted signed cheque has been produced by the complainant, there cannot be any inherent lacuna in the existence of the liability. But then definitely, accused can point loop holes in the story of the complainant by impeaching the credit of the witness during his cross-examination. The accused can discharge his burden by demonstrating the preponderance of probabilities coming in its way.
Analyses of Defence of Accused CC No. 10489-16 Smt. Sudesh Kumari Vs. Prayagi Lal Yadav Page No.15 / 18
34. The defence of the accused is that the accused did not fill the details in the cheque in question. At this juncture, it would be worthwhile to discuss the provisions under section 20 of the Negotiable Instrument Act, which is as under:
Section 20. Inchoate stamped Instruments: - where one person signs and delivers to another a paper stamped in accordance with the law relating to negotiable instruments then in force in India, and either wholly blank or having written thereon an incomplete negotiable instrument, he thereby gives prima facie authority to the holder to make or complete, as then case may be, upon a negotiable instrument, instrument, for any amount specified therein and not exceeding the amount covered by the stamp. The person so signing shall be liable upon such instrument, in the capacity in which he signed the same, to any holder in due course for such amount, provided that no person other than a holder in due course shall recover from the person delivering the instrument anything in excess of the amount intended by him to be paid thereunder.
Bare perusal of the provisions of Section 20 of N.I. Act, clearly suggests that where one person signs and delivers to another a paper stamped in accordance with the law relating to negotiable instruments, either wholly blank or having written thereon an incomplete negotiable instrument, he thereby gives prima facie authority to the holder thereof to make or complete, as the case may be, upon it a negotiable instrument, for any amount specified therein and not exceeding the amount covered by the stamp.
This Court places reliance on the judgment of Bir Singh vs. Mukesh Kumar (Criminal Appeal No. 230-231 of 2019) in which it was held by the Hon'ble Supreme Court that if a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars.
Therefore, according to section 20 of the Negotiable Instrument Act, the person who signs the cheque shall be liable even if the particulars of the cheque were not filled by him. Therefore, the defence of the accused that he did not fill the contents of the cheque hold no ground.CC No. 10489-16 Smt. Sudesh Kumari Vs. Prayagi Lal Yadav Page No.16 / 18
35. The defence of the accused is that he gave the cheque in question to the complainant because the complainant asked for a cheque as she had to show someone. No proof of the same has been adduced by the accused. He further states that he had business transactions with the complainant for the supply of machinery. Also, the accused submits that he has already paid for the machines. However, the accused has not taken any steps to take back the cheque in question from the complainant. No complaint was lodged against the complainant for return of the cheque in question. It has been argued on behalf of the accused that the accused gave the cheque in question to the complainant as the account was not settled between the complainant and the accused and after the settlement, had the accused been liable to pay to the complainant, he would make the payment and thereafter the complainant would return the cheque. It is pertinent to mention that the accused in his defence to the notice framed u/s 251 Cr.P.C stated as follows:
"I was having business transaction with the complainant and for the supply of machinery by the complainant I had issued the cheque in question, I had made the payment for the machinery to the complainant."
The accused has furnished different defences regarding the cheque in question. Therefore, the defence of the accused does not inspire the confidence of the Court.
36. The defence of the accused is that he had business transactions with the complainant regarding supply of machines. The accused has brought on record statement of accounts, whereby he shows that he has made payment of machines. The accused has not produced any record which shows that he has repaid the complainant. It is pertinent to mention that witness DW-6 does not support the defence of the accused.
37. The Ld. Counsel for the accused has relied upon the judgment of M.S. Narayan Menon @ Mani vs State of Kerala Appeal (Crl.) 1012 of 1999, Ravi Kumar D vs. State of Delhi and another , Basalingappa vs. Mudibasappa (2019) 5 SCC 418.
CC No. 10489-16 Smt. Sudesh Kumari Vs. Prayagi Lal Yadav Page No.17 / 1838. In the considered opinion of this Court, in the present complaint, the complainant has disclosed the existence of a legally enforceable debt/liability. The complainant has also proved the ingredients of Section 138 of Negotiable Instrument Act, 1881.
39. Therefore, in the opinion of this court, the accused has failed to prove his defence and in rebutting the presumption of legal liability even on the scale of preponderance of probabilities and the defence of the accused cannot be termed as a plausible defence. The presumption of legal liability u/s 118 (a) r/w Section 139 NI Act has gone un-rebutted, and the complainant has successfully proved the basic ingredients of the offence u/s 138 of the NI Act.
40. Resultantly, the accused Sh. Prayagi Lal Yadav, is held guilty and is convicted of the offence under Section 138 of the NI Act.
Let a copy of this judgment be given free of cost to the convict. Let the convict be heard separately on the quantum of sentence.
Pronounced in open Court on this day of 11.03.2022 (Charan Salwan) Metropolitan Magistrate (NI Act) - 02 District- West, Tis Hazari Courts, Delhi CC No. 10489-16 Smt. Sudesh Kumari Vs. Prayagi Lal Yadav Page No.18 / 18