Delhi District Court
Asad Raza vs . U. S. Handicrafts & Anr. on 23 December, 2020
IN THE COURT OF MS. RENU CHAUDHARY,
METROPOLITAN MAGISTRATE04, EAST
DISTRICT, KARKARDOOMA COURTS,
DELHI
Asad Raza Vs. U. S. Handicrafts & Anr.
(a) Sr. No. of the case 56308/2016
(b) Date of offence 27.04.2013
(c) Complainant Asad Raza
(d) Accused, parentage and 1. U. S. Handicrafts.
address 2. Mohd. Umar S/o Sh. Mohd. Saeed,
Proprietor & Authorized Signatory
of U. S. Handicrafs.
(e) Offence complained of Section 138 of N. I. Act
(f) Plea of accused Pleaded not guilty
(g) Final Order Conviction
(h) Date of institution 01.10.2014
(i) Date when judgment was 25.11.2020
reserved
(j) Date of judgment 23.12.2020
CC. No.56308/16 Asad Raza Vs. U. S. Handicrafts & Anr Page 1 of 26
JUDGMENT
1) Vide this judgment, this Court shall dispose of the present complaint case instituted by the complainant under the provisions of Section 138 of N.I. Act.
2) The factual matrix of the matter, as called out from the bare perusal of the complaint is as follows: That the complainant was running a business under the name and style of Sharp Graphics at C6A, South Ganesh Nagar, Parpatganj Road, Near Mother Dairy, Delhi92. Accused no.2, namely, Mohd. Umar is the proprietor/AR of accused no.1, namely, U. S. Handicrafts (henceforth referred to as accused (s) dealing in the business of sale and purchase of copper. Complainant met accused no.2 through one Qamar Abbas in May 2010. The complainant had fixed a deal with accused (s) to buy raw copper worth Rs. 6070 lakhs and on 11.08.2010, complainant gave a cheque for amount of Rs.5,00,000/ alongwith Rs.32,00,000/ cash to the accused (s) in the presence of Qamar Abbas at his abovesaid office to buy copper rods. In return, accused (s) assured CC. No.56308/16 Asad Raza Vs. U. S. Handicrafts & Anr Page 2 of 26 the complainant to provide one container copper on or before 30.08.2010. Again on 25.08.2010, complainant gave Rs.16,00,000/ in cash to the accused (s) on assurance that he will provide one and a half container copper to the complainant. When the complainant approached the accused (s) on 30.08.2010, neither the accused (s) provided any container of copper nor returned the money to the complainant alongwith 2% interest on the total amount in lieu of delay of delivery of said copper. Thereafter, in April 2011, complainant approached accused no.2 & upon the assurance of accused no.2 to complainant to provide two full containers of copper, the complainant again gave Rs.9,00,000/ to accused no.2. on 21.05.2011 but the accused did not provide any container of copper to the complainant. On 31.12.2012, accused no.2 gave a written assurance/acknowledgement to the complainant before the Panchayat that either he would pay a sum of Rs.62,00,000/ or provide the copper containers worth the said amount to the complainant on or before 31.02.2013. Accused no.2 had also mortgaged the documents of his property bearing no. 1180/13, Govind Puri, Kalkaji, Delhi with the complainant. Thereafter on 31.03.2013, accused no.2 CC. No.56308/16 Asad Raza Vs. U. S. Handicrafts & Anr Page 3 of 26 issued two cheques bearing No. 089567 for amount of Rs.62,00,000/ and 089566 for amount of Rs.28,00,000/ both dated 05.04.2013, drawn on Axis Bank Ltd,. Saket New Delhi, in favour of complainant. However, the said cheques got dishonoured firstly on 10.04.2013 and again on 27.04.2013 for reason 'fund insufficient'. Thereafter, a legal demand notice dated 13.05.2013, was sent to the accused but despite the service of the said notice the accused (s) failed to repay the amount of cheques in question within the stipulated period. Hence, complainant has filed the present complaint case u/s 138 r/w 420 of the Negotiable Instruments Act, 1881 (in short NI Act) against the accused.
3) The complainant tendered his presummoning evidence by way of affidavit (Ex. CW 1/A) and relied upon the documents viz. Cheque bearing No. 089566 (Ex. CW 1/2), cheque bearing No. 089567 (Ex.1/1), bank return memo qua cheque bearing no.089566 dated 27.04.2013 (Ex. CW1/3), bank return memo qua cheque bearing no.089567 dated 27.04.2013 (Ex. CW1/3A), Legal Demand Notice dated 13.05.2013 (Ex CW 1/4), postal/courier/delivery receipt/s (Ex CW 1/5 (colly)), Postal tracking report (Ex.CW1/6 (colly)), CC. No.56308/16 Asad Raza Vs. U. S. Handicrafts & Anr Page 4 of 26 Acknowledgment (Ex.CW1/7), Written acknowledgment/receipt dated 31.03.2013 (Ex. CW1/8) and Sale deed (Ex.CW1/9). Hence, Cognizance of offense U/s 138 NI Act was taken against the accused and summons were issued vide order dated 01.10.2014. Upon appearance, notice of accusation u/s 251 Cr.P.C. was framed and served upon the accused (s) on 15.01.2015 and plea of defense of the accused was also recorded on the same day in which accused (s) had pleaded "not guilty" and claimed trial. The accused claimed that he has no legal liability towards the complainant. It is further claimed that accused (s) had borrowed a sum of Rs.5,00,000/ from the complainant and both the cheques in question were given as security for the same.
4) Thereafter, an application u/s 145(2) NI Act filed by the accused (s) seeking permission to crossexamine the complainant witness was allowed vide order dated 26.02.2015. The permission was granted to the accused (s) to crossexamine the Complainant as well as his witnesses, if any.
5) In postsummoning evidence, Complainant examined himself as CW1. The complainant CW1 adopted his presummoning evidence CC. No.56308/16 Asad Raza Vs. U. S. Handicrafts & Anr Page 5 of 26 and was crossexamined at length by the Ld. Counsel for the accused. During the course of his examination, CW1 categorically deposed that he knew Qamar Abbas who knew the accused. It was further deposed that there had been no business dealing by the complainant through Qamar Abbas prior to the present one & that he had not purchased such quantity of copper before this deal & the entire dealing was made in good faith without writing. It is further deposed that the complainant had arranged Rs.32,00,000/from his relatives and other persons (Rs.10 lakhs from Anwar Hussain, Rs.8 lakhs from Qaiser Raza and Rs. 14 lakhs from Asgar Raza) and Rs.23,00,000/ was paid to the accused in cash from his personal earning/savings/sale of property. CW1 further deposed that on 31.12.2012, accused gave an undertaking in writing on stamp paper regarding the said deal which was signed by the accused and accused had also handed over the original sale deed of his property alongwith two cheques dully filled and signed which are Ex.CW1/1 & Ex.CW1/2 to the complainant. The witness denied the suggestion that accused had handed over the cheques in question to the complainant as security cheques for Rs.5,00,000/ borrowed by the accused from the CC. No.56308/16 Asad Raza Vs. U. S. Handicrafts & Anr Page 6 of 26 complainant.
6) Thereafter accused (s) crossexamined Qamar Abbas as CW 2 who supported the case of the complainant and deposed that complainant is his cousin and CW2 knew accused no.2 since 2008. CW2 further deposed that the complainant told him that he requires copper & since accused was dealing in the business of copper, so CW2 introduced the complainant with the accused & thereafter a deal was finalized between the complainant and the accused (s). CW2 categorically deposed that on 11.08.2010, the accused visited the office of complainant where complainant issued a cheque for an amount of Rs.5 lakhs and gave Rs.32 lakhs in cash to the accused for which no receipt was issued. Thereafter, an amount of Rs.16 lakhs was again paid to the accused on 25.08.2020 by the complainant & an amount of Rs.9 lakhs was given to the accused at his native place by the complainant. The witness deposed that all these payments were made to the accused by the complainant in the presence of CW2. Upon being further cross examined, the witness CW2 deposed that the accused had handed over his property documents to the complainant before the Panchayat where CC. No.56308/16 Asad Raza Vs. U. S. Handicrafts & Anr Page 7 of 26 CW2 was also present & two cheques were also issued in favour of the complainant with the assurance that the same will be encashed. CW2 denied the suggestion that the accused had handed over the cheque in question to the complainant as security cheques for Rs.5 lakhs by the all from the complainant.
7) Thereafter, upon the statement of the complainant, complainant's evidence was closed vide order dated 25.05.2017. Subsequent thereto, memorandum of Statement of Accused u/s 313 r/w section 281 Cr.P.C. was recorded on 10.07.2018 wherein the accused no.2 had stated that he had given the cheques in question to the complainant in blank and signed condition as security for the loan of Rs.5,00,000/ which was taken by accused no.2 from the complainant for a period of two years. Accused no.2 further stated that after two years, he requested for further time to repay the loan amount and complainant had kept the property related documents of accused. Accused further stated that he had not received any legal demand notice from the complainant. Accused no.2 had further stated that the cheques i.e. Ex.CW1/7 & Ex.CW1/8 were only signed by him & given to the CC. No.56308/16 Asad Raza Vs. U. S. Handicrafts & Anr Page 8 of 26 complainant in blank and that CW2 is the brother of complainant and is an interested witness. The accused wished to lead defense evidence in his favor.
8) The accused did not examine any witness & upon the statement of accused, defence evidence was closed vide order dated 03.02.2020 and the matter was listed for final arguments.
9) Final arguments were advanced with equal vehemence on behalf of either parties hereto. Ld. counsel for the complainant contended that the accused has admitted that his dishonored cheque in question bears his signature and legal presumption of consideration u/s 139 of NI Act would act against the accused. Ld. Counsel for the complainant further contended that the accused does not have any defense evidence in present case and he has taken false plea to avoid his liability towards the complainant. The accused (s), per contra, argued the foregoing statutory presumptions have been cogently rebutted inasmuch as the complainant has himself failed to establish the existence of any legally enforceable debt thereby, failed to satisfy the most essential requirements to constitute the commission of an offence CC. No.56308/16 Asad Raza Vs. U. S. Handicrafts & Anr Page 9 of 26 under section 138 of NI ACT, 1881.
10) This is the factual matrix of this case. In this backdrop, let us now examine the legal benchmark which is to be satisfied in order to constitute an offence under section 138 NI Act,1881.
11) In order to bring home the guilt of a person accused for the commission of an offence u/s 138 NI Act, following ingredients must be satisfied:
(i) That the impugned cheque must have been drawn by the accused on an account maintained by him;
(ii) That impugned cheque must have been issued in favor of the complainant, unless the complainant became its holder in due course in terms of Section 9 of the Negotiable Instruments Act, 1881;
(iii) That the person must have drawn a cheque on an account maintained by him in a bank for payment of certain amount of money to another person from out of that account.
(iv) That the cheque should have been issued for discharge in whole or in part of any debt or other liability.CC. No.56308/16 Asad Raza Vs. U. S. Handicrafts & Anr Page 10 of 26
(v) That the cheque has been presented to a bank within a period of three months from the date on which it was drawn.
(vi) That cheque is returned by the bank unpaid because of the amount of money standing to the credit of account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account or any other reason.
(vii) That the payee or the holder in due course of the cheque makes a demand for the payment of said amount by giving a notice in writing to the drawer of the cheque within 30 days of the receipt of the information by him from the bank regarding the return of cheque as unpaid.
(viii) That the drawer of the said cheque fails to make payment of the said amount to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice.
12). In present case, accused no.2 has admitted his signature with respect to cheques in question in notice u/s 251 of Cr.P.C as well as in his statement U/Sec. 313 read with Section 281 Cr.P.C. However, he CC. No.56308/16 Asad Raza Vs. U. S. Handicrafts & Anr Page 11 of 26 had stated that he did not fill in the other contents of the cheques except his signatures and the same were misused by the complainant. At this juncture, it is pertinent to mention the provision under section 20 and section 118 of the Negotiable Instruments Act.
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 thereof to make or complete, as then case may be, upon it 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.
Section 118 Presumptions as to negotiable instruments of consideration Until the contrary is proved, the following presumptions shall be made:
(a) of considerationthat 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;
CC. No.56308/16 Asad Raza Vs. U. S. Handicrafts & Anr Page 12 of 26
(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 its date and before its maturity;
(d) as to time of transfer. that every transfer of a negotiable instrument was made before its maturity;
(e) as to order of endorsements that the endorsements appearing upon a negotiable instrument were made in the order in which they appear thereon;
(f) as to stampsthat 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 contained from its lawful owner, or form any person in lawful custody 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.
13) Further, in Mojj Engineering Systems Limited & Ors. Vs. A.B. Sugars Ltd.; 154 (2008) Delhi Law Times 579, the Hon'ble Delhi High Court had observed as under : "7 Even otherwise, prima facie, it was the petitioners who had handed over the undated cheque for a certain amount to the respondent in terms of a contract between the parties. Since an undated cheque cannot be encashed, it can only mean that the petitioners had authorized the complainant to enter an appropriate date on it. In Young Vs. Grote (1827) 4 Bing. 253 it was held that when a blank cheque is signed and handed CC. No.56308/16 Asad Raza Vs. U. S. Handicrafts & Anr Page 13 of 26 over, it means the person signing it has given an implied authority to any subsequent holder to fill it up. Similarly, in Scholfield Vs. Lord Londesborough (1895-1899) All ER Rep 282 it was held that whoever signs a cheque or accepts a bill in blank, and then puts it into circulation, must necessarily intend that either the person to whom he gives it, or some future holder, shall fill up the blank which he has left. This common law doctrine was also affirmed by Justice Macnaghten in Griffiths Vs. Dalton [1940] 2 KB 264 where it was held that the drawer of an undated cheque gives a prima facie authority to fill in the date. This aspect has also been incorporated in Section 20 of the Negotiable Instruments Act, which deals with Inchoate Stamped Instruments. The Supreme Court in T.Nagappa Vs. Y.R.Murlidhar, (2008) 5 SCC 633 while discussing the scope of Section 20 held that by reason of this provision, a right has been created in the holder of the cheque. Prima facie, the holder thereof is authorized to complete the incomplete negotiable instrument. In that view of the matter, all further issues that may be raised by the petitioners regarding the nature and scope of the authority of the respondent to put any particular date on the cheque in question, are all matters for trial.
''8. It is not as if the cheque came to be issued without any consideration whatsoever in the first place or that there was such a glaring defect in the complaint that the decision of the Trial Court to issue summons has ex facie resulted in miscarriage of justice or an abuse of the process of Court, and therefore interference under Section 482 Cr.P.C. to quash the proceedings is warranted in the interest of justice. The question whether the consideration for which the cheque was issued was ultimately satisfied or whether the cheque was wrongly sought to be encashed, are all issues that must also be decided at the trial. The Supreme Court in the case of M.M.T.C. Ltd. and Another Vs. MEDCHL Chemicals and Pharma (P) Ltd. and ANOTHER , CC. No.56308/16 Asad Raza Vs. U. S. Handicrafts & Anr Page 14 of 26 (2002) 1 SCC 234 held as follows:
"13. THE well-settled law that the power of quashing criminal proceedings should be exercised very stringently and with circumspection. It is settled law that at this stage the Court is not justified in embarking upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the complaint. The inherent powers do not confer an arbitrary jurisdiction on the court to act according to its whim or caprice. At this stage the Court could not have gone into merits and/or come to a conclusion that there was no existing debt or liability." The Court further held that:
"17. There is therefore no requirement that the complainant must specifically allege in the complaint that there was a subsisting liability. The burden of proving that there was no existing debt or liability was on the respondents. This they have to discharge in the trial. At this stage, merely on the basis of averments in the petitions filed by them the High Court could not have concluded that there was no existing debt or liability."
14) Applying the foregoing legal provisions to the facts of the instant case, it is manifest that a right has been created in the holder of the cheque. Primafacie, the holder thereof is authorized to complete the incomplete negotiable instrument. Hence, in the present case, admission of signature itself creates the presumption u/s 139 of NI act in favor of CC. No.56308/16 Asad Raza Vs. U. S. Handicrafts & Anr Page 15 of 26 the complainant. Now the burden of proof shifts upon the accused to rebut the presumption that such liability does not exist. The presumption raised U/Sec. 139 of N.I.A is of legally enforceable debt or liability and it is for the accused persons to raise the probable defence to rebut the presumption. The standard of proof for doing so is that of "preponderance of probabilities". A trial U/Sec 138 N.I.A is structured on the premise of the reverse onus of proof theory.
15) In this context, it is profitable to refer to the following reproduced excerpts extracted from the judgment of the Hon'ble Apex Court of India in the case of ' M/s Kumar Exports Vs. Sharma Carpets, (2009) 2 SCC 513,wherein it was held as under:
"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 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 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 CC. No.56308/16 Asad Raza Vs. U. S. Handicrafts & Anr Page 16 of 26 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 would under the circumstances of the case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on the complainant. 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."CC. No.56308/16 Asad Raza Vs. U. S. Handicrafts & Anr Page 17 of 26
16) In M. S. Narayana Menon Vs. State of Kerala, (2006) 6 SCC 39, the Apex Court dealing with the statutory presumption under Sections 118(a) and 139 of the N. I. Act inter alia held as under:
"29. In terms of Section 4 of the Evidence Act whenever it is provided by the Act that the Court shall presume a fact, it shall regard such fact as proved unless and until it is disproved. The words "proved" and "disproved" have been defined in Section 3 of the Evidence Act (the interpretation clause)......
30. Applying the said definitions of "proved" or "disproved" to the principle behind Section 118(a) of the Act, the Court shall presume a negotiable instrument to be for consideration unless and until after considering the matter before it, it either believes that the consideration does not exist or considers the nonexistence of the consideration so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that the consideration does not exist. For rebutting such presumption, what is needed is to raise a probable defense. Even for the said purpose, the evidence adduced on behalf of the complainant could be relied upon. The standard of proof evidently is preponderance of probabilities. Inference of preponderance of probabilities can be drawn not only from the materials on record but also by reference to the circumstances upon which he relies. Therefore, the rebuttal does not have to be CC. No.56308/16 Asad Raza Vs. U. S. Handicrafts & Anr Page 18 of 26 conclusively established but such evidence must be adduced before the Court in support of the defense that the Court must either believe the defense to exist or consider its existence to be reasonably probable, the standard of reasonability being that of the 'prudent man'."
17) In view of the above discussion, since the issuance of the cheque in question by the accused is not disputed, hence, presumption U/Sec. 139 of N.I.A is raised and the plea of the accused with respect to misuse of the cheque in question is rejected.
18) Another plea raised by the accused in his defense is that the accused has no liability towards the complainant and the cheques in question were given to the complainant as security cheques for Rs.5,00,000/ borrowed from the complainant and hence, complaint U/Sec. 138 N.I.A is not maintainable. It was held by the Hon'ble High Court of Delhi in Credential Leasing and Credits Ltd. Vs. Shruti Investments and Anr. decided on 29.06.2015 in Criminal LP No. 558/2014 that the security cheques fall within the purview of Section 138 N.I.A. It was further held that the scope of Section 138 N.I.A would cover cases where ascertained and crystallized debt or other CC. No.56308/16 Asad Raza Vs. U. S. Handicrafts & Anr Page 19 of 26 liability exists on the date when the cheque is presented and not only to the cases where ascertained and crystallized debt or other liability exists on the date on which it was delivered to the seller as a post dated cheque or as a current cheque with a credit period. Morever, nothing has been adduced as an evidence on behalf of the accused to prove the said averrments.
19) Section 103 of the Indian Evidence Act, 1872 enunciates that the person who asserts a fact must prove the same, unless the law otherwise provides. In the present case, the onus to prove that the cheque in question is a security cheque which was misused by the complainant was upon the accused (s), but the accused (s) failed to do so. The accused (s) neither placed on record any document nor examined any witness to prove the said assertion. For the sake of arguments, even if it is assumed that the defence of the accused is proved, then two pertinent questions arise that why did the accused (s) not send a written notice to the complainant to demand the cheques & property related documents back from him and why did the accused (s) not file any police complaint or complaint with his bank to ensure that CC. No.56308/16 Asad Raza Vs. U. S. Handicrafts & Anr Page 20 of 26 the cheques were not misused. The accused (s) has not even placed on record anything to prove that any request was made to the complainant for the return of the said cheques & property documents nor have proved that any complaint was made against the complainant for return of the said security cheques & property related documents. Mere assertions/allegations would not serve the purpose of the accused and something probable has to be brought on record for getting the burden of proof shifted to the complainant. The accused did not mention anything about the course he took to procure back the security cheques & property documents from the complainant. Hence, in the absence of any credible evidence the story of the accused cannot be taken as a gospel truth.
20) Another defence raised by the accused is regarding the non receipt of the legal demand notice from the complainant. Here, it becomes profitable to mention the observations made by Hon'ble Apex Court in the case of C.C. Alavi Hazi Vs. OPalapitty Mohd. & Anr. (2007) 6 SCC 555, wherein it was held as under:
"It is also to be borne in mind that the requirement CC. No.56308/16 Asad Raza Vs. U. S. Handicrafts & Anr Page 21 of 26 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 the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receiptof 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 view, any other interpretation of the proviso would defeat the very object of the legislation."
As the complainant has filed on record postal receipts alongwith showing proof of delivery, the Court see no substance in the CC. No.56308/16 Asad Raza Vs. U. S. Handicrafts & Anr Page 22 of 26 defence of the accused (s) and the defence that the accused (s) has not received any legal notice is without any force & is liable to be rejected.
21) During the course of arguments, Ld. Counsel for accused vociferously argued that in view of the nondisclosure of the source of income by the complainant, the presumption U/Sec. 118 & U/Sec.139 NI. Act stands rebutted. In this contest, it is relevant to reproduce herein the following excerpts from the judgment in Rohitbhai Jinanlal Patel Vs. State of Gujarat, Criminal Appeal No.508 of 2019 decided on 15.03.2019:
"19. .......existence of a legally enforceable debt is to be presumed in favour of the complainant. When a presumption is drawn, the factors relating to the want of documental evidence in the form of receipts or accounts or want of evidence as regards source of funds were not of relevant consideration while examining if the accused (s) has been able to rebut the presumption or not......"
22. In view of the same, the defence of the accused (s) that complainant has not proved consideration in lieu of cheques in question is without any merits as only after the accused (s) has rebutted the CC. No.56308/16 Asad Raza Vs. U. S. Handicrafts & Anr Page 23 of 26 presumption U/Sec. 139 NI Act, the burden shifts on the complainant to prove his source of money out of which loan was granted to the accused
(s). Moreover, nondisclosure of the source of income by the complainant, cannot be a solitary basis for rejecting his evidence as where the issuance of cheque is proved beyond reasonable doubt & signature is not disputed by the accused (s), then a presumption U/Sec. 139 NI Act can be drawn against the accused (s). Nonfiling of IT Return is a matter between revenue & the assesses and no adverse influence can be drawn in this regard only because of absence of IT Return.
It was held by the Hon'ble High Court of Delhi in Guddo Devi Vs. Bhupender Kumar, as under: "14. Section 269SS of the Income Tax Act, 1961 prohibits making of any payment in cash above a sum of 20,000/. Thus, any person violating the same would attract imposition of penalties under the said Act. However, the same does not render the said debt unenforceable or precludes the lender from recovering the same".
CC. No.56308/16 Asad Raza Vs. U. S. Handicrafts & Anr Page 24 of 26
23) As regards the defence of the accused (s) that he does not owe any liability towards the complainant and the cheques in question were given as security cheques to the complainant, the accused (s) has not brought forth any evidence to prove the same. The accused (s) did not examine any witness in support of his contentions. Thus, the story of the accused (s) that cheques were given by way of security cannot be accepted in the absence of any evidence & the factor that renders the defence version bizarre & suspicious is that the accused (s) has not brought forth even an iota of evidence to pillar his defence. Conclusion
24) In view of above discussions, this Court is of considered view that accused (s) have failed to create reasonable doubt over the veracity of story of complainant by balance of probabilities. It is noticeable that the complainant has to prove his case beyond reasonable doubt only when the accused has rebutted the presumption u/s 139 NI act which the accused (s) have failed to do in present case. Except for bare averments, accused (s) have not led any cogent evidence which could be termed as a probable defence. On the other hand, the complainant has successfully CC. No.56308/16 Asad Raza Vs. U. S. Handicrafts & Anr Page 25 of 26 proved all the necessary ingredients of Section 138 of N.I.A.
25) In upshot of aforesaid discussion, I return finding of conviction of accused U. S. Handicrafts and accused Mohd. Umar, Proprietor & Authorized Signatory of U. S. Handicrafts for offense u/s 138 of NI Act in this case. Copy of this order be given dasti to the convict free of cost.
26) Put up for arguments on the quantum of sentence on 02.02.2021.
This judgment contains 26 pages and each page is checked and signed by me.
Announced in court Digitally signed
(through VC proceedings RENU
by RENU
CHAUDHARY
on CISCO Webex)in the CHAUDHARY Date:
2020.12.23
presence of accused 16:40:09 +0530
on 23.12.2020
( RENU CHAUDHARY)
MM04/East/KKD/Delhi/23.12.2020
CC. No.56308/16 Asad Raza Vs. U. S. Handicrafts & Anr Page 26 of 26