Delhi District Court
16.In The Case Of Kusum Ingots And Alloys ... vs . Pennar Peterson Securities on 11 August, 2023
IN THE COURT OF SH. UMANG JOSHI
MM (NI ACT) DIGITAL COURT-05,
SOUTH WEST, DWARKA COURTS, NEW DELHI
Criminal Complaint No.: 7880/2021
Avnish Kumar ........Complainant
Versus
Seema Khanna ............. Accused
1. SI. No. of the case : CC NI Act No.7880/2021
2. Date of institution of the case : 27.03.2021
3. Name and address of the complainant : Avnish Kumar,
R/o T-85, Jain Colony,
Part -1, Uttam Nagar,
Delhi-110059
4. Name and address of the accused : Seema Khanna,
R/o U/2, Gali No.4,
Subhash Park, Solanki Road
Uttam Nagar, Mohan Garden,
Delhi-110059
5. Offence complained of: Section 138, Negotiable Instruments Act
6. Plea of the accused: Accused pleaded not guilty
7. Final order: Convicted
8. Date of such order: 11.08.2023
Umang Digitally signed by
Umang Joshi
Joshi Date: 2023.08.11
15:32:15 +05'30'
CC NI Act No. 7880/2021 Page 1 of 32
JUDGMENT
A. Factual Matrix of the case:
1. Briefly stated, the factual matrix of the case as per the complaint is that the complainant and the accused are known to each other and have good friendly relations with each other. It is further stated that in March, 2018, the accused was in desperate need of money and she contacted the complainant for friendly loan of Rs. 1,85,000/- and accordingly, the complainant, at the request of the accused, gave Rs. 1,85,000/- to the accused as friendly loan in cash and the accused promised to return the same as soon as possible. It is further stated that after some time, the complainant contacted the accused for repayment of the said loan, but the accused avoided the payment of the said loan. It is further stated that after much persuasion, the accused issued a cheque bearing no.
097859 dated 02.02.2021 amounting to Rs.1,85,000/- drawn on Bank of India, Uttam Nagar branch, New Delhi (hereinafter referred as "cheque in question") in favour of the complainant so as to repay the said loan. Thereafter, the complainant presented the said cheque for encashment with his banker but the same was dishonoured and returned with remarks "Funds Insufficient" vide return memo dated 12.02.2021. It is further stated that thereafter the complainant sent a legal demand notice dated 26.02.2021 vide speed post to the accused. However, despite service, the accused failed to pay the cheque amount to the complainant within the stipulated period of 15 days from the date of receipt of the legal demand notice. Accordingly, the present complaint has been filed by the complainant against the accused under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred as "NI Act").
Umang Digitally signed by
Umang Joshi
Joshi Date: 2023.08.11
15:32:22 +05'30'
CC NI Act No. 7880/2021 Page 2 of 32
B. Appearance of accused, framing of notice and proceedings incidental thereto:
2. Vide order dated 18.11.2021, cognizance of the offence under Section 138 of the NI Act was taken by this court and upon a prima facie case being found against the accused, the summons were issued against the accused directing the accused to appear before the court. On 02.03.2022, the accused entered appearance before this court and the accused was admitted to bail subject to furnishing of Personal Bond and Surety Bond in the sum of Rs.10,000/- each.
3. Thereafter, on 07.04.2022, the substance of allegations against the accused were explained to the accused in vernacular and notice under Section 251 of the Code of Criminal Procedure, 1973 (hereinafter referred as "Cr.P.C") for the offence punishable under Section 138 of the NI Act was put to the accused to which the accused pleaded not guilty and claimed trial. The plea of defence of the accused was also recorded in the notice. In the notice put to the accused, the accused stated that the cheque in question bears her signatures and the accused stated that she had issued a blank cheque to the complainant. The accused further stated that she has no liability towards the complainant.
4. Thereafter, the statement of the accused as to the admission/denial of documents was recorded under Section 294 Cr.P.C. The accused in her statement admitted that the cheque in question is from her bank account and also admitted her signatures on the cheque in question. Furthermore, the accused admitted the cheque return memo and also the receipt of the legal demand notice.
Umang Digitally signed by
Umang Joshi
Joshi Date: 2023.08.11
15:32:28 +05'30'
CC NI Act No. 7880/2021 Page 3 of 32
5. The accused had also filed an application under Section 145 (2) of the NI Act which was allowed vide order dated 08.08.2022 and accordingly the accused was permitted to cross-examine the complainant witnesses.
C. Complainant's Evidence:
6. In order to prove his case, the complainant examined himself as CW-1 and relied upon his evidence by way of affidavit Ex. CW-1/A wherein the contents of the complaint have been reiterated by the complainant. The complainant also relied upon the following documents to prove its case which are as follows:
a) Cheque in question bearing no. 097859 dated 02.02.2021 amounting to Rs. 1,85,000/-. Ex. CW-1/1.
b) Cheque return memo dated 12.02.2021. Ex. CW-1/2.
c) Legal demand notice dated 26.02.2021. Ex. CW-1/3.
d) Postal receipt and tracking report of the legal demand notice.
Ex. CW-1/4 (colly).
7. Thereafter, the complainant was duly cross examined by the counsel for accused. Furthermore, no other witnesses were examined by the complainant to prove its case. Accordingly, the complainant evidence was closed and the matter was listed for recording the statement of the accused under Section 313 Cr.P.C read with Section 281 Cr.P.C.
Umang Digitally signed
by Umang Joshi
Joshi Date: 2023.08.11
15:32:35 +05'30'
CC NI Act No. 7880/2021 Page 4 of 32
D. Statement of accused under Section 313 Cr.P.C read with Section 281 Cr.P.C:
8. Thereafter, all the incriminating evidence which were against the accused were put to the accused and her statement under Section 313 Cr.P.C read with Section 281 Cr.P.C was recorded on 11.07.2023 wherein the accused reiterated her defence stated in the notice. However, in her statement, the accused stated that she has a liability of only Rs.5000 towards the complainant.
E. Defence Evidence:
9. In her statement under Section 313 Cr.P.C read with Section 281 Cr.P.C, the accused stated that she wishes to lead defence evidence and thereafter an application under Section 315 Cr.P.C was filed by the accused wherein the accused sought to examine herself as a witness and also sought to examine one Mr. Deepak Khanna as witness. Vide order dated 18.07.2023, the said application was allowed and the accused was permitted to lead defence evidence. Accordingly, the accused examined herself as DW-1. Thereafter, one Mr. Deepak Khanna stated to be the husband of the accused examined himself as DW-2. DW-1 and DW-2 were also cross examined by the counsel for the complainant. Furthermore, no other witnesses were examined by the accused to prove its case and accordingly, the defence evidence was closed. Accordingly, the matter was listed for final arguments.
Umang Digitally signed
by Umang Joshi
Joshi Date: 2023.08.11
15:32:41 +05'30'
CC NI Act No. 7880/2021 Page 5 of 32
F. Final arguments:
10. Final arguments were heard at length from both the parties.
11. Ld. Counsel for the complainant has argued that the complainant has proved all the ingredients of the offence under Section 138 of the NI Act, 1881 beyond reasonable doubt. Ld. Counsel for the complainant has further argued that the accused has admitted her signature on the cheque in question and therefore the statutory presumptions under Section 139 and 118 of the NI Act arises in favour of complainant i.e. that the cheque in question was issued by the accused to the complainant in discharge of legally enforceable debt or liability. Ld. Counsel for the complainant has further argued that the accused has not raised any probable defence and has not proved her defence and the accused has failed to rebut the presumption arising in favour of complainant. Ld. Counsel for the complainant contends that despite admitting the receipt of the legal demand notice, the accused did not even reply to the legal demand notice. Ld. Counsel for the complainant has further argued that the accused did not lodge any police complaint qua the alleged misuse of the cheque in question by the complainant and qua the alleged threats by the complainant and that the accused did not write any letter to her bank regarding the alleged misuse of the cheque in question by the complainant. Ld. Counsel for the complainant has further argued that the accused has not lead any credible evidence to prove its case and has failed to rebut the presumptions during the cross examination of the complainant and even during defence evidence. Ld. Counsel for the complainant submits that the testimony of the complainant in his cross Umang Digitally signed by Umang Joshi Joshi Date: 2023.08.11 15:32:48 +05'30' CC NI Act No. 7880/2021 Page 6 of 32 examination is uncontroverted and the complainant has proved its case beyond reasonable doubt.
12.Per contra, Ld. Counsel for the accused has argued that the accused has raised a probable defence and has rebutted the statutory presumptions and the complainant has not proved its case. Ld. Counsel for the accused has argued that the complaint does not mention the date of advancing the friendly loan by the complainant to the accused and that no documents were filed by the complainant to prove the alleged loan. Ld. Counsel for the accused has argued that the accused had taken a loan only of Rs. 45,000/- from the complainant which has already been repaid by the accused and that the accused had given a blank signed cheque to the complainant at the time of taking the said loan and that the cheque in question has been misused by the complainant. Ld. Counsel for the accused has argued that whenever the accused used to make the payment to the complainant to repay the loan amount, the complainant used to acknowledge the receipt of the same by issuing a booklet to the accused mentioning the installments received by the complainant from the accused. Ld. Counsel for the accused argued that he has placed on record the said document i.e. Ex. DW1/1(Colly) and further argues the entries in the said document bears the handwriting of the complainant and also bears the signatures of the complainant. Ld. Counsel for the accused has argued that the complainant did not have the financial capacity to advance the alleged friendly loan to the accused. It is further argued by Ld. Counsel for the accused that the accused has a liability of only Rs.5000 towards the complainant. Ld. Counsel for the accused has further argued that the particulars of the cheque in question were not filled by the accused which casts a doubt on the complainant's case.
Umang Digitally signed by
Umang Joshi
Joshi Date: 2023.08.11
15:32:54 +05'30'
CC NI Act No. 7880/2021 Page 7 of 32
Ld. Counsel for the accused further contends that the accused has raised a probable defence and the complainant has not proved the ingredients of the offence under Section 138 of the NI Act.
13. I have heard the submissions made by counsel for both the parties and have also perused the record thoroughly.
G. Legal provisions and the legal principles:
14. Before appraising the facts and appreciating the evidences of the present case in detail, it is imperative to encapsulate the relevant legal provisions germane to the adjudication of the present case. The present complaint case has been filed under Section 138 of the NI Act alleging the dishonour of the cheque in question bearing no. 097859 dated 02.02.2021 amounting to Rs. 1,85,000/-.
15. Section 138 of the NI Act mandates that the dishonour of a cheque is an offence if the ingredients mentioned therein are fulfilled. It is therefore imperative to refer the bare provision of Section 138 of the NI Act and the same is as follows:
"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 provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both."
Umang Digitally signed by
Umang Joshi
Joshi Date: 2023.08.11
15:33:03 +05'30'
CC NI Act No. 7880/2021 Page 8 of 32
16.In the case of Kusum Ingots and Alloys Ltd. vs. Pennar Peterson Securities Ltd. (2000) 2 SCC 745, the apex court has expounded the ingredients which are required to be fulfilled in order to constitute an offence under Section 138 of the NI Act. The relevant portion of the said judgment laying down the ingredients to be satisfied for making out a case under Section 138 of the NI Act is reproduced as under:
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 of the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank;
iv. the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the 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;
v. the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice;"
17. A drawer of the cheque can be said to have committed an offence under Section 138 of the NI Act only when all the above mentioned ingredients are fulfilled. It is pertinent to note that Section 138 of the NI Act cannot be read in isolation and it has to be read with certain legal presumptions which arise in favour of the payee or holder in due course and the said presumptions are enunciated under Section 139 and 118 of the NI Act. Section 139 of the NI Act reads as follows:
Umang Digitally signed by
Umang Joshi
Joshi Date: 2023.08.11
15:33:11 +05'30'
CC NI Act No. 7880/2021 Page 9 of 32
"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, or any debt or other liability."
18.Furthermore, Section 118 (a) of the NI Act deals with presumption of consideration and provides that until the contrary is proved, it shall be presumed that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has be accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration. The aforesaid legal presumptions which arise in favour of the complainant are rebuttable in nature and the burden to rebut the said presumptions is on the accused. Furthermore, it is well settled in a catena of judgments that the accused can rebut the said presumptions by showing preponderance of probabilities. The accused can rebut the said presumptions by raising a probable defence or by discrediting or creating doubt on the case of the complainant. Furthermore, it is not incumbent upon the accused to lead direct evidence to rebut the said presumptions and the accused may rebut the said presumptions by showing preponderance of probabilities and for that purpose, he may also rely upon the evidences adduced by the complainant.
19. In this context, it is imperative to refer to the case of Rangappa vs. Sri Mohan (2010) 11 SCC 441 wherein it has been held by the Hon'ble Supreme Court as follows:
"It is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of `preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a Umang Digitally signed by Umang Joshi Joshi Date: 2023.08.11 15:33:18 +05'30' CC NI Act No. 7880/2021 Page 10 of 32 defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own."
20.Therefore, the legal position that emerges is that for rebuttal of the presumptions envisaged under Section 139 and 118 of the NI Act, the accused is not required to examine himself and the accused need not step into the witness box as the accused can discharge his burden and probabalise his defence by placing reliance on the materials already brought on record by the complainant. The standard of proof required from the accused to rebut the presumptions is preponderance of probabilities and the accused is not required to prove his defence on the yardstick of proof beyond reasonable doubt as required from the complainant.
H. Undisputed/ Uncontroverted facts
21.The accused in the notice put to her under Section 251 Cr.P.C and in the statement under Section 294 Cr.P.C, has not denied that the cheque in question was issued from her account. Therefore, it is not in dispute that the original cheque in question i.e. Ex.CW-1/1 has been drawn on an account maintained by the accused. Furthermore, the cheque in question bears the name of complainant as the payee and the present complaint has been filed by the complainant in his own name. Thus, the complainant has been able to discharge the burden of proving that the cheque in question was issued in his favour on an account maintained by the accused. Furthermore, it is not in dispute that the cheque in question was presented within its validity period. Furthermore, the factum of dishonour of the cheque in question with remarks "Funds Insufficient" vide return memo Ex. CW-1/2 is not disputed by accused. The accused in the notice Umang Digitally signed by Umang Joshi Joshi Date: 2023.08.11 15:33:26 +05'30' CC NI Act No. 7880/2021 Page 11 of 32 under Section 251 Cr.P.C and in the statement under Section 294 Cr.P.C has admitted that she had received the legal demand notice Ex. CW-1/3 from the complainant. Furthermore, all the requirements for filing a complaint under Section 138 of NI Act have been complied with in the present case and the present complaint has been filed within the period of limitation.
I. Points for determination:
a) Whether the presumption under section 118(a) and section 139 of the NI Act can be raised in favour of complainant in the present case?
b) If the answer to the aforesaid is in affirmative, whether the accused has been able to rebut the said presumptions by raising a probable defence?
J. Reasons for the decision:
a) Whether the presumption under Section 118(a) and Section 139 of the NI Act can be raised in favour of complainant in the present case?
22.The first question which needs to be determined is whether the presumption under Section 118(a) and Section 139 of the NI Act can be raised in favour of complainant in the present case. Section 118 (a) and Section 139 of the NI Act provide for legal presumptions as to the issuance of the cheque by the accused Umang Digitally signed by Umang Joshi Joshi Date: 2023.08.11 15:33:36 +05'30' CC NI Act No. 7880/2021 Page 12 of 32 in favour of the complainant for consideration and in discharge of a legally enforceable debt or other liability.
23.However, it is imperative to note that the statutory presumption under Section 118 (a) and Section 139 of the NI Act only arises if the accused admits his signatures on the cheque. Therefore, once the accused admits his signature on the cheque in question, the presumption under Section 118 and 139 of the NI Act is drawn in favour of the complainant.
24.In K. Bhaskaran vs. Sankaran Vaidhyan Balan (1999) 7 SCC 510, it has been held by the apex court that if the signature on the cheque is admitted to be that of the accused, then the presumption as provided under Section 118 of the NI Act is applicable and it can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears. Furthermore, in Kalamani Tex vs. P. Balasubramanian (2021) 5 SCC 283, it was held by the apex court as follows:
"The statute mandates that once the signature(s) of an accused on the cheque/negotiable instrument are established, then these 'reverse onus' clauses become operative. In such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him."
25.In this context, it is also imperative to refer the decision of the apex court in Basalingappa vs. Mudibasappa (2019) 5 SCC 418 wherein it was held as follows:
i. "Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.
Umang Digitally signed by
Umang Joshi
Joshi Date: 2023.08.11
15:33:43 +05'30'
CC NI Act No. 7880/2021 Page 13 of 32
ii. The presumption under Section 139 is a rebuttable presumption and the onus is on the
accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
iii. To rebut the presumption, it is open for the accused to rely on evidence led by him or accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.
iv. That it is not necessary for the accused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden. v. It is not necessary for the accused to come in the witnes box to support his defence."
26.The crux of the aforesaid decisions is that the statutory presumption as envisaged under Section 118 (a) and Section 139 of the NI Act only arises if the accused admits his signatures on the cheque. The execution of the cheque by the accused has to be therefore proved as prerequisite for the applicability of the aforesaid statutory presumptions in favour of the complainant.
27.It is pertinent to note that in the notice under Section 251 Cr.P.C and in the statement under Section 294 Cr.P.C, the accused has admitted her signature on the cheque in question and has further admitted that the cheque in question is from her account. Therefore, it is concluded that the presumption under Section 118(a) and Section 139 of the NI Act that the cheque in question was issued in discharge of a legally recoverable debt or other liability is raised in favour of complainant in the present case.
Umang Digitally signed by Umang Joshi Joshi Date: 2023.08.11 15:33:51 +05'30' CC NI Act No. 7880/2021 Page 14 of 32
b) Whether the accused has been able to rebut the said presumptions by raising a probable defence?
28.Since the execution of the cheque in question in favour of the complainant has been admitted by the accused, the next question which needs to be determined is whether the accused has been able to rebut the aforesaid statutory presumptions. Therefore, the onus of proof is now upon the accused to raise a probable defence so as to rebut the presumption of the existence of a legally recoverable debt arisen in favour of the complainant.
29.It is a settled law that the presumption under Section 118(a) and Section 139 of the NI Act is a rebuttable presumption and the accused can rebut the said presumption by raising a probable defence on a scale of preponderance of probabilities or by discrediting or creating doubt on the case of the complainant. Furthermore, it is not incumbent upon the accused to lead direct evidence to rebut the said presumptions and the accused may rebut the said presumptions by showing preponderance of probabilities. The standard of proof expected from the accused to establish the probability of his defence is not the same as the standard of proof expected from prosecution or complainant in a criminal trial. While the complainant or prosecution is expected to prove its case beyond reasonable doubt, the accused is expected to prove his defence on the scale of preponderance of probabilities.
30.Therefore, it is imperative to analyse the facts, appreciate the evidences on record and examine the defence of the accused in the present case. In the plea of defence in the notice under Section 251 Cr.P.C, the accused has stated that she had taken a loan of Rs. 45,000/- from the complainant and further stated that Umang Digitally signed by Umang Joshi Joshi Date: 2023.08.11 15:34:02 +05'30' CC NI Act No. 7880/2021 Page 15 of 32 she had paid Rs. 85,000/- to the complainant to repay the said loan. The accused has further stated that despite making the payment to the complainant, the complainant started threatening her and demanded a further sum of Rs. 20,000/- from her pursuant to which she paid Rs. 15,000/- to the complainant. The accused has further stated that a sum of Rs. 5000/- was due to be paid to the complainant by her. The aforesaid defence has been reiterated by the accused in her statement under Section 313 Cr.P.C read with Section 281 Cr.P.C and also in her deposition as DW-1. It is pertinent to mention that in the application under Section 145 (2) of the NI Act, it is stated that the accused was a committee member who had deposited monthly/weekly amount with the complainant and it is further mentioned that the complainant took blank cheque from the accused and misused the same. However, strangely, the said version of the accused being a committee member as mentioned in the application under Section 145 (2) of the NI Act was not stated by the accused either in the notice under Section 251 Cr.P.C or in her statement under Section 313 Cr.P.C or in her deposition as DW-1 and the same is inexplicable.
31.In her examination in chief, the accused deposed that she had taken a loan of Rs. 45,000/- from the complainant in 2018. The accused further deposed that at the time of taking the loan from the complainant, the complainant asked her to give a blank signed cheque and accordingly she gave a blank signed cheque to the complainant. The accused further deposed that she had paid Rs. 85,000/- to the complainant to repay the said loan. The accused further deposed that despite making the full and final payment to the complainant, the complainant started threatening her pursuant to which her husband entered into a compromise with the complainant in which it was agreed that a further sum of Rs.20,000/- was to be paid by her to the complainant. The accused deposed that thereafter she paid Umang Digitally signed by Umang Joshi Joshi Date: 2023.08.11 15:35:09 +05'30' CC NI Act No. 7880/2021 Page 16 of 32 Rs. 15,000/- to the complainant but could not pay the remaining sum of Rs. 5000/- to the complainant as lockdown was imposed. The accused further deposed that she only has a liability of Rs. 5000/- towards the complainant. The primary defence of the accused is therefore that she had taken a loan only of Rs. 45,000/- from the complainant which has already been repaid by her and that she had given a blank signed cheque to the complainant at the time of taking the said loan.
32.In order to prove its case, it was incumbent upon the accused to prove her defence on the scale of preponderance of probabilities or by discrediting the case of the complainant by leading cogent evidence or by relying on the material already on record so as to rebut the statutory presumption arising in favour of the complainant. The accused had the onus to prove that the cheque in question did not represent any legally recoverable debt or liability. However, the accused has miserably failed to probabalise and fortify her primary defence throughout the entire trial.
33.The primary defence of the accused is that the accused had taken a loan only of Rs. 45,000/- from the complainant and that the accused had given a blank signed cheque to the complainant at the time of taking the said loan and further that an amount exceeding the said loan amount has already paid by the accused to the complainant. Therefore, it was incumbent upon the accused to prove her said defence on the scale of preponderance of probabilities. However, throughout the entire trial, the accused has miserably failed to substantiate and fortify her defence and has miserably failed to rebut the mandatory presumptions of law envisaged under Section 118 and 139 of the NI Act. It is pertinent to mention that the accused did not lead any cogent evidence to Umang Digitally signed by Umang Joshi Joshi Date: 2023.08.11 15:35:19 +05'30' CC NI Act No. 7880/2021 Page 17 of 32 substantiate her version that she had indeed paid a sum of Rs. 85,000/- and a sum of Rs. 15,000 to the complainant to repay the loan of Rs. 45,000/- taken by her from the complainant and the accused merely made bald assertions which remained unsubstantiated throughout the entire trial. Furthermore, the accused did not depose anything as to the mode of the alleged payment of Rs. 85,000/- made by her to the complainant and the accused did not even state the date, month or the year in which she had paid the alleged sum of money to the complainant to repay the loan which further erodes the credibility of the defence put forth by the accused. Furthermore, as regards the alleged payment of Rs.15,000/-, the accused in her cross examination deposed that the said payment was paid by her to the complainant in cash. However, the accused again did not depose anything as to the date, month or the year of such alleged payment made by her to the complainant and therefore, the version put forth by the accused remained unsubstantiated throughout the entire trial. Furthermore, in her statement under Section 313 Cr.P.C and during examination in chief, the accused has admitted that she still has a liability of Rs.5000 towards the complainant. However, throughout the entire trial, the accused failed to substantiate as to why even the admitted liability of Rs.5000 towards the complainant has not been discharged by the accused till now which further erodes the credibility of the defence put forth by the accused. Furthermore, the accused did not lead any cogent evidence to show that she had indeed paid any sum of money to the complainant to repay the loan of Rs.45,000/- taken by her from the complainant as stated by the accused in her deposition.
34.It is pertinent to mention that during the cross examination of the complainant, the counsel for the accused had placed on record some documents claiming to be the diaries containing the entries pertaining to the amount received by the Umang Digitally signed by Umang Joshi Joshi Date: 2023.08.11 15:37:21 +05'30' CC NI Act No. 7880/2021 Page 18 of 32 complainant from the accused. The said document was exhibited as Ex. DW1/1 (Colly). The complainant, upon being confronted with the said documents during his cross examination, deposed that the said diaries do not bear his signatures and further deposed that he does not know about the entries in the said diaries. Ld. counsel for the accused argued that whenever the accused used to make the payment to the complainant to repay the loan amount, the complainant used to acknowledge the receipt of the same by issuing a booklet to the accused mentioning the installments received by the complainant from the accused. Ld. counsel for the accused argued that the entries in Ex. DW1/1(Colly) bears the handwriting of the complainant and also argued that the said Ex. DW1/1(Colly) bears the signatures of the complainant.
35.It is pertinent to mention that in her statement under Section 313 Cr.P.C read with Section 281 Cr.P.C, the accused had stated that when she used to make the payment to the complainant to repay the loan amount, the complainant used to put the entry of the said amount in the booklet issued by the complainant to her and further stated that the initials of the complainant were there on the said booklet. Furthermore, the accused in her examination in chief, deposed that when she used to make the payment to the complainant to repay the loan amount, the complainant used to acknowledge the same and used to put the entry of the said amount in a passbook of the complainant.
36.The burden of proving the document Ex. DW1/1 (Colly) was upon the accused. However, the accused did not lead any cogent evidence and also did not examine any independent witness to prove the said document. Furthermore, it is pertinent to mention that DW-2 being the other defence witness and being the husband of the accused did not even depose anything on the said document and Umang Digitally signed by Umang Joshi Joshi Date: 2023.08.11 15:37:30 +05'30' CC NI Act No. 7880/2021 Page 19 of 32 the same further erodes the credibility of the said document and a grave doubt is cast on the veracity of the said document filed by the accused. Even otherwise, the document Ex. DW1/1 (Colly) does not in any manner substantiate or fortify the defence of the accused. Perusal of the document Ex. DW1/1 (Colly) denotes that it contains various booklets mentioning various handwritten entries showing various handwritten dates, amounts and also signatures on the said entries. It is pertinent to mention that the dates qua the various entries mentioned in Ex. DW1/1 (Colly) do not even denote the year to which the said entries pertain. Furthermore, there are also some cuttings in one of yellow booklet forming a part of Ex. DW1/1 (Colly) and a grave doubt is cast on the veracity of the said document. In her cross examination, the accused deposed that Ex. DW1/1 (Colly) does not bear the name and details of the complainant. Perusal of document Ex. DW1/1 (Colly) denotes that it nowhere mentions the name of the complainant and the same has also been admitted by the accused in her cross examination. Therefore, the accused has miserably failed to prove that the complainant had issued the said document to the accused. Accordingly, the said document is wholly irrelevant and an unreliable piece of evidence. The accused had further deposed in her cross examination that the yellow booklet being a part of Ex. DW1/1 (Colly) does not bear her name. However, it appears that even the accused is unaware about the contents of the said document as the said document containing various booklets mentions the name of the accused on two booklets, one of which is a yellow booklet, but the accused has herself denied the said fact during her cross examination thereby eroding the credibility of the said document. Furthermore, the accused in her cross examination has admitted that the said document remained with her i.e. remained in her possession and the accused has failed to lead any cogent evidence to prove that the said document was issued by the complainant. Furthermore, the document Digitally signed by Umang Joshi Umang Joshi Date: 2023.08.11 15:37:47 +05'30' CC NI Act No. 7880/2021 Page 20 of 32 Ex. DW1/1 (Colly) contains mere handwritten entries which do not ipso facto prove or substantiate the defence put forth by the accused in any manner and the accused has miserably failed to prove the veracity of the said document. Furthermore, DW-2 did not even depose anything on the said document and the same is inexplicable which thereby casts a grave doubt on the genuineness of the said document. Accordingly, the document Ex. DW1/1 (Colly) is held to wholly unreliable and unworthy of credence.
37.Furthermore, since the execution of the cheque in question is not disputed by the accused in the present case, Section 139 of the NI Act which is a reverse onus clause becomes operative and a presumption is raised that the cheque was issued for the discharge of a legally enforceable debt or other liability. In such a case, it was incumbent upon the accused to rebut the said presumptions by raising a probable defence or by discrediting or creating doubt on the case of the complainant. However, the accused did not lead any cogent evidence and did not even create any doubt on the case of the complainant even during cross examination of the complainant and even during defence evidence. The burden of proof was upon the accused to show that there were no subsisting liability upon her qua the complainant at the time of issuance of the cheque in question but the accused did not discharge the said burden of proof.
38.It is pertinent to mention that in the notice under Section 251 Cr.P.C, the accused has admitted that she had received the legal demand notice from the complainant. Furthermore, in her cross examination, the accused has admitted that she received the legal demand notice from the complainant and further admitted that she did not give any reply to the legal demand notice sent by the complainant to her. Since one of the defence of the accused as evident from the Umang Digitally signed by Umang Joshi Joshi Date: 2023.08.11 15:37:58 +05'30' CC NI Act No. 7880/2021 Page 21 of 32 application under Section 145 (2) of the NI Act filed by the accused is that the complainant had taken a blank cheque from the accused and that the complainant had misused the said cheque, it was incumbent upon the accused to atleast reply to the legal demand notice sent by the complainant and thereby rebut the allegations of the complainant. However, the accused strangely preferred to remain silent even after the receipt of the legal demand notice from the complainant and did not even bother to reply to the said notice. The silence of the accused in such circumstances casts a grave doubt on the veracity of the version put forth by the accused and it also raises an adverse inference against the accused. The aforesaid conduct of the accused is inexplicable and renders the defence of the accused unworthy of credence.
39.Furthermore, in her examination in chief, the accused had deposed that despite making the full and final payment to the complainant, the complainant started threatening her pursuant to which her husband entered into a compromise with the complainant in which it was agreed that a further sum of Rs.20,000/- was to be paid by the accused to the complainant. The accused deposed that thereafter she had paid Rs. 15,000/- to the complainant and further deposed that she could not pay the remaining sum of Rs.5000 to the complainant as lockdown was imposed. Since the complainant in his cross examination had denied that any such settlement had taken place, it was incumbent upon the accused to substantiate and prove her said version by leading cogent evidence. However, the accused miserably failed to substantiate the said version put forth by her and failed to lead any cogent evidence to prove that any such compromise or settlement had taken place. The accused did not depose anything as to the date, month or the year of such alleged payment of Rs.15,000/- made by her to the complainant and therefore, the version put forth by the accused remained Digitally signed by Umang Joshi Umang Joshi Date: 2023.08.11 15:38:07 +05'30' CC NI Act No. 7880/2021 Page 22 of 32 unsubstantiated throughout the entire trial. Furthermore, in her cross examination, the accused admitted that the said settlement was not in writing and further deposed that the said settlement took place prior to the lockdown.
40.At this stage, it is imperative to examine the testimony of the other defence witness i.e. Mr. Deepak Khanna, being the husband of the accused, who examined himself as DW-2. In his testimony, DW-2 stated that his wife i.e the accused told him that the complainant was torturing her despite paying the loan amount and he accordingly called the complainant to his house for settlement. DW-2 further deposed that the complainant came to his house and it was agreed that a sum of Rs.20,000/- was to be paid by the accused to the complainant. DW-2 further deposed that he paid Rs.15,000/- in three installments of Rs. 5000 each to the complainant but could not pay the remaining sum of Rs.5000 to the complainant as lockdown was imposed.
41.At this juncture, it is imperative to point out a contradiction between the version put forth by DW-1 and DW-2. During his cross examination, DW-2 deposed that he had called the complainant to his house for settlement after the lockdown was lifted. Therefore, as per the version of DW-2, the said settlement took place after the lockdown was lifted. However, it is pertinent to mention that the accused DW-1 in her cross examination had deposed that the said settlement took place prior to the lockdown Therefore, there is a material contradiction in the testimony of DW-1 and DW-2 as to when the alleged settlement had taken place which thereby casts a doubt on veracity of the version put forth by the accused. Furthermore, even the date, month or the year of the alleged settlement was not deposed either by DW-1 or by DW-2. It is a well settled principle of law that mere assertion of a fact does not amount to Umang Digitally signed by Umang Joshi Joshi Date: 2023.08.11 15:38:17 +05'30' CC NI Act No. 7880/2021 Page 23 of 32 proof of the same. The accused has not produced any evidence, documentary or oral, which would provide credibility to her defence. Furthermore, DW- 2 in his cross examination had deposed that the said settlement with the complainant took place in the presence of his family members and in the presence of some persons from neighborhood. DW-2 further deposed that he can produce one Vinod Kumar and one Avinash Khanna as witnesses to prove the said settlement. However, no such witnesses were ever produced and examined by the accused in her defence to prove the alleged settlement and the same erodes the credibility of the version put forth by the accused and also casts a doubt on veracity of the version put forth by the accused. The accused failed to substantiate her version by leading any cogent evidence and failed to show that any settlement took place between the complainant and the accused as alleged by the accused. Therefore, the accused has miserably failed to substantiate and fortify her version and has merely made mere bald assertions unsubstantiated by any cogent and credible evidence.
42.Admittedly, DW-2 being the husband of the accused was an interested witness and was bound to support the version of the accused. Therefore, it was incumbent upon the accused to prove her defence and also to prove the factum of alleged compromise or settlement by leading cogent evidence or by examining any independent witness. However, the accused miserably failed to prove that any compromise or settlement took place between the complainant and the accused. The testimony of DW-2 has not probabalised and fortified the defence of the accused but rather it has weakened the defence of the accused for reasons explained hereunder. Firstly, there is a material contradiction in the testimony of DW-1 and DW-2 as to when the alleged settlement had taken place. Secondly, no independent witnesses were examined by the defence to Umang Digitally signed by Umang Joshi Joshi Date: 2023.08.11 15:38:36 +05'30' CC NI Act No. 7880/2021 Page 24 of 32 prove the alleged settlement despite DW-2 deposing that such witnesses were present when the settlement had taken place. Furthermore, the version put forth by the accused is improbable and even if the said version is to be believed, it is still inexplicable as to why the accused or her husband did not file any police complaint against the complainant for the alleged threats given by the complainant to the accused, despite paying more than the loan amount to the complainant as stated by the accused. The entire defence put forth by the accused is nothing but moonshine and has remained unsubstantiated throughout the entire trial. In view of the aforesaid, the credibility of the entire defence of the accused is eroded and a grave doubt is cast on the veracity of the version put forth by the accused.
43.Ld. counsel for the accused argued that the cheque in question was misused by the complainant. However, the said argument is devoid of any merits. During her examination in chief, the accused DW-1 did not depose anything on the alleged misuse of the cheque in question by the complainant and the same is inexplicable. Furthermore, the accused did not take any steps to get back her cheque from the complainant who is alleged to have misused the same nor did she issue any stop payment instructions to her bank qua the said cheque which thereby casts a doubt on the plea of alleged misuse of the cheque in question by the complainant. It is pertinent to mention that the cheque in question was dishonoured due to the reason "Funds Insufficient" and not "payment stopped by drawer". Furthermore, if the cheque in question was indeed misused by the complainant, the accused could have filed a police complaint against the complainant or could have written a letter to her bank regarding the alleged misuse of the cheque in question by the complainant. However, the accused did not file any complaint against the complainant for the alleged misuse of the Digitally signed by Umang Joshi Umang Joshi Date: 2023.08.11 15:38:46 +05'30' CC NI Act No. 7880/2021 Page 25 of 32 cheque in question and also did not write any letter to her bank regarding the alleged misuse of the cheque in question and preferred to remain silent. The conduct of the accused in not lodging any complaint against the complainant for the alleged misuse of the cheque in question further erodes the credibility of the defence of the accused. Merely making a statement that the cheque was misused or that it does not represent any legally recoverable debt or liability is not sufficient in itself to rebut the statutory presumptions envisaged under the NI Act. Therefore, the argument as to the alleged misuse of the cheque in question is bereft of any merits.
44.In this backdrop, it is worthwhile to mention that any reasonable man of ordinary prudence who takes a loan and gives a blank signed cheque to the lender at the time of taking the said loan would promptly take steps to get back his cheque from the said lender after the repayment of the loan so as to prevent its misuse. However, as per her own admission during her cross examination, the accused did not lodge any police complaint or any complaint with her bank with respect to the alleged misuse of the cheque in question by the complainant which thereby casts a grave doubt on the veracity of the version put forth by the accused. Furthermore, the accused did not file any police complaint regarding the alleged threats given by the complainant to her which thereby casts a grave doubt on the veracity of the version put forth by the accused. The conduct of the accused in not lodging any complaint against the complainant for the alleged misuse of the cheque in question and for the alleged threats given by the complainant to the accused is indeed perplexing and defies logic and it also raises an adverse inference against the accused. In these circumstances, the defence raised by the accused does not even appear to be probable and the said defence has remained unproved during the entire trial.
Umang Digitally signed by
Umang Joshi
Joshi Date: 2023.08.11
15:38:56 +05'30'
CC NI Act No. 7880/2021 Page 26 of 32
45.Another argument raised by Ld. counsel for the accused was that the complainant did not have the financial capacity to advance the alleged loan of Rs.1,85,000/- to the accused. Ld. counsel for the accused argued that the complainant did not produce his ITR and that since the complainant also admitted that he did not file any ITR prior to the year 2022-202, the complainant failed to show that he had the financial capacity to advance the alleged loan to the accused. It is pertinent to mention that in his cross examination, the complainant CW-1 deposed that he had filed ITR for the year 2022-2023 and further deposed that he did not file any other ITR prior to filing the ITR for the year 2022-2023. CW-1 further stated that he had advanced the loan to the accused in March, 2018. It is pertinent to mention that the complainant in his cross examination had stated that he can produce his bank account statement for the period 01.04.2017 - 31.03.2018. However, strangely, the counsel for the accused did not ask the complainant to produce his bank account statement for the said period and the same is inexplicable. The bank account statement of the complainant for the said period was indeed relevant and the same would have certainly shown whether or not the complainant had the financial capacity to advance the alleged friendly loan to the accused. However, throughout the entire trial, the counsel for the accused did not ask the complainant to produce his bank account statement for the said period despite the complainant stating in his cross examination that he can produce the same. Furthermore, during the cross examination of the complainant, the counsel for the accused did not ask any question or give any suggestion to the complainant with respect to the monthly income and earnings of the complainant. Furthermore, the counsel for the accused did not even ask the complainant about the amount of loan advanced by the complainant to the accused and the Umang Digitally signed by Umang Joshi Joshi Date: 2023.08.11 15:39:07 +05'30' CC NI Act No. 7880/2021 Page 27 of 32 same is inexplicable. Rather, the counsel for the accused asked the complainant to state the amount of loan advanced by the complainant to one Mr. Pramod Rajak who was unrelated to the present case and the same was irrelevant for the adjudication of the present case. Furthermore, the counsel for the accused also did not ask any question from the complainant with respect to the source of funds for advancing the alleged friendly loan to the accused.
46.Therefore, even during the cross examination of the complainant, the accused could not discredit the case of the complainant and the accused failed to show that the complainant did not have the financial capacity to advance the alleged loan to the accused. The mere fact of non filing of ITR by the complainant or the mere non disclosure of the alleged loan by the complainant in his ITR for the year 2022-2023 is not sufficient in itself to show that the complainant did not have the financial capacity to advance the alleged loan to the accused. If the accused was genuinely questioning and disputing the financial capacity of the complainant to advance the alleged loan to the accused, the accused should have questioned the complainant on various aspects and should have specifically asked the complainant to produce his bank account statement for the relevant period or should have asked the complainant to prove his source of income or to show the source of funds from where the complainant arranged the alleged loan amount so as to discredit or create a doubt in the case of the complainant. However, no such questions were asked by the accused during the cross examination of the complainant. By choosing not to ask any such questions from the complainant even during his cross examination, the accused has failed to probabalise her defence and has failed to rebut the statutory presumptions. Furthermore, it is imperative to mention that the counsel for the accused did not ask the complainant to produce his bank account statement for Umang Digitally signed by Umang Joshi Joshi Date: 2023.08.11 15:39:19 +05'30' CC NI Act No. 7880/2021 Page 28 of 32 the relevant period despite the complainant stating that he can produce the same and the same is inexplicable. Resultantly, the accused has miserably failed to dispute or raise a doubt as to the financial capacity of the complainant to advance the alleged loan to the accused. Therefore, the argument that the complainant did not have the financial capacity to advance the alleged loan to the accused is untenable and is bereft of any merits for the reasons as enunciated and explained above.
47.Ld. counsel for the accused has further contended that the accused did not fill the particulars on the cheque in question as stated by the accused in the notice put to her under Section 251 Cr.P.C. Ld. counsel for the accused has argued that the same casts a doubt on the case of the complainant as the particulars on the cheque in question were not filled by the accused. However, even the said argument is devoid of any merits. It is a settled law that the mere fact that the details in the cheque have not been filled by the drawer, but by some other person is immaterial and if the signatures on the cheque are admitted by the accused, the same is sufficient to give rise to the statutory presumptions. It is pertinent to mention that the execution of the cheque in question is not disputed by the accused in the present case. Furthermore, in Oriental Bank of Commerce vs. Prabodh Kumar Tewar 2022 SCC OnLine SC 1089, it has been held by the apex court that even if the details in the cheque have not been filled up by drawer but by another person, this is not relevant to the defence whether cheque was issued towards payment of a debt or in discharge of a liability. Accordingly, the aforesaid argument raised by Ld. counsel for the accused is devoid of any merits.
Umang Digitally signed
by Umang Joshi
Joshi Date: 2023.08.11
15:39:31 +05'30'
CC NI Act No. 7880/2021 Page 29 of 32
48.Ld. counsel for the accused has further contended that the complaint does not mention the date of advancing the friendly loan by the complainant to the accused and has further contended that no documents were filed by the complainant to prove the alleged loan transaction. However, even the said argument is devoid of any merits for reasons explained hereunder. It is imperative to mention that statutory presumptions are envisaged under the NI Act in relation to the existence of legally enforceable debt or liability and the accused is required to rebut the same. Since the execution of the cheque in question has not been disputed by the accused, the statutory presumptions are raised in favour of the complainant and therefore the burden was upon the accused to rebut the same. However, the accused has miserably failed to prove and substantiate her defence and has failed to rebut the statutory presumptions. The accused has been unable to bring to fore sufficient material or circumstances upon which the court may disbelieve the case of the complainant. No cogent evidence was led by the accused in her defence so as to discredit the case of the complainant. Furthermore, the non mentioning of the date of advancing of loan in the complaint or the mere fact the loan agreement was not in writing or that that no documents were filed to prove the alleged loan, cannot by itself probabalise the defence of the accused. In this context, it is imperative to refer the decision of the apex court in Rohitbhai Jivanlal Patel vs. State of Gujarat (2019) 18 SCC 106, wherein it was held that the circumstances such as lack of documentary evidence to show the source of funds of the complainant to advance the loan or the lack of any written record of the loan transaction in the form of receipt do not rebut the presumption raised under Section 139 of the NI Act. It was further held that in a proceeding under Section 138, the standard of proof is not beyond reasonable doubt but preponderance of probabilities. In Umang Digitally signed by Umang Joshi Joshi Date: 2023.08.11 15:39:42 +05'30' CC NI Act No. 7880/2021 Page 30 of 32 view of the said legal position, the aforesaid argument raised by Ld. counsel for the accused is devoid of any merits.
49.Furthermore, in the entire cross examination of the complainant, the accused has been unable to elicit any admission from the complainant admitting the defence of the accused. The complainant withstood the rigours of cross examination and no material contradiction, variation, improvement or omission could be elicited by the accused. Therefore, even during the cross examination of the complainant, the accused could not discredit the case of the complainant and the accused failed to punch holes in the case of the complainant so as to rebut the statutory presumptions.
50.Since the execution of the cheque in question is not disputed by the accused in the present case, Section 139 of the NI Act which is a reverse onus clause becomes operative and a presumption is raised that the cheque was issued for the discharge of a legally enforceable debt or other liability. In such a case, it was incumbent upon the accused to rebut the said presumption by raising a probable defence or by discrediting or creating doubt on the case of the complainant. However, the accused did not lead any cogent evidence and did not even create any doubt on the case of the complainant even during cross examination of the complainant and even during defence evidence. The accused has miserably failed to prove and substantiate her defence throughout the entire trial and has been unable to bring to fore sufficient material or circumstances upon which the court may disbelieve the case of the complainant. No cogent evidence was led by the accused in her defence so as to discredit the case of the complainant or to rebut the statutory presumptions.
Umang Digitally signed
by Umang Joshi
Joshi Date: 2023.08.11
15:39:52 +05'30'
CC NI Act No. 7880/2021 Page 31 of 32
K. Decision:
51.In the considered opinion of this court, the accused has not been able to raise a probable defence even on the scale of preponderance of probabilities. The accused has failed to probabalise her defence even on the scale of preponderance of probabilities and has miserably failed to rebut the mandatory presumptions of law envisaged under Section 118 and 139 of the NI Act. All the facts, circumstances and the evidences on record when considered and analysed together render the defence of the accused unworthy of credence and also cast a grave suspicion and doubt on the defence put forth by the accused. Furthermore, nothing substantial has been brought on record by the accused during the entire trial to falsify and discredit the case of the complainant. The defence of the accused has not been substantiated by any cogent evidence and the entire defence of the accused is unworthy of credence for various reasons, as already discussed.
52.Accordingly, the accused is hereby convicted for the offence punishable under section 138 of the NI Act.
Announced in the Open Court on this 11th day of August 2023. This Judgment consists of 32 signed pages.
Umang Digitally signed by
Umang Joshi
Joshi Date: 2023.08.11
15:40:02 +05'30'
(UMANG JOSHI)
MM (NI Act) DIGITAL COURT-05,
South West, Dwarka Courts, New Delhi
11.08.2023
CC NI Act No. 7880/2021 Page 32 of 32