Delhi District Court
Complainant vs . on 31 March, 2022
IN THE COURT OF METROPOLITAN MAGISTRATE (NI-05),
WEST, TIS HAZARI COURTS, NEW DELHI
Presided over by- Devanshu Sajlan, DJS
Case No. - Ct. Cases 894/2016
Unique Case ID - DLWT020007282016
No.
In the matter of :-
BIMLA KHATTAR
... COMPLAINANT
VS.
AMITA
... ACCUSED
1. Name of Complainant : Ms. Bimla Khattar
2. Name of Accused : Ms. Amita
3. Section 138, Negotiable Instruments
Offence complained of or proved :
Act, 1881.
4. Plea of Accused : Not Guilty
5. Date of Filing : 10.02.2016
6. Date of Reserving Order : 29.03.2022
7. Date of Pronouncement : 31.03.2022
8. Final Order : Acquitted
CC NO. 894/2016 BIMLA KHATTAR V. AMITA 1 OF 12
DEVANSH Digitally signed by
DEVANSHU SAJLAN
U SAJLAN Date: 2022.04.01
10:03:55 +05'30'
BRIEF STATEMENT OF REASONS FOR THE DECISION:-
A. FACTUAL MATRIX
1. The present complaint has been filed by Ms. Bimla Khattar (hereinafter
"complainant") against Ms. Amita (hereinafter "accused") under section 138 of the
Negotiable Instruments Act, 1881 (hereinafter "NI Act").
2. The substance of allegations, as contained in the complaint, are as follows:
(a) The complainant and the accused had friendly relations. In August 2015, the accused
requested the complainant for a friendly loan to the tune of Rs. 2,20,000/- and promised
to repay the same within four months.
(b) It has been further alleged that the complainant advanced the said loan to the accused
in cash.
(c) It has been further alleged that in discharge of the aforesaid legal debt, the accused
issued and signed three cheques bearing no. 764799 dated 31.12.2015 for Rs. 20,000/-,
another cheque bearing no. 764792 dated 31.12.2015 for Rs. 1,00,000/- and another
cheque bearing no. 76479 dated 31.12.2015 for Rs. 1,00,000 drawn on Punjab National
Bank, Kirti Nagar.
(d) It has been further alleged that upon the assurance of the accused, the complainant
presented the aforesaid cheques for encashment. However, the cheque no. 764789 and
764792 were returned unpaid by the bank for the reason "payment stopped by drawer".
Further the cheque no. 764799 was returned unpaid by the bank for the reason
"insufficient funds". Thereafter, the complainant sent a legal notice dated 12.01.2016
to the accused. However, the accused allegedly failed to pay the cheque amount and
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therefore, the complainant filed the present complaint.
3. Accused's stance, on the contrary, at the stage of framing of notice under section 251
CrPC was that she has no legal liability towards the complainant since she had not
taken any loan from the complainant. The accused further submitted that her cheques
were misplaced and hence, on 09.03.2013, she had sent intimation to the bank regarding
two cheques, i.e., cheque no. 764789 and 764792. The accused further submitted that
she was unaware about the third cheque and that all the cheques have been misused by
the complainant.
B. PRE-SUMMONING EVIDENCE & NOTICE
4. Pre-summoning evidence was led by the complainant and on finding a prima facie case,
the accused was summoned to face trial vide order dated 01.04.2016. On appearance,
the accused was served with the notice of accusation under Section 251, Code of
Criminal Procedure, 1973 (hereinafter "CrPC") on 06.07.2018, to which the accused
pleaded not guilty and claimed trial. The accused admitted her signature on the cheque
no. 764799. However, she denied her signature on the other two cheques.
5. Thereafter, the accused moved an application u/s 145(2) NI Act which was allowed
vide order dated 03.01.2019 and the complainant was allowed to be cross-examined by
the accused.
C. COMPLAINANT'S EVIDENCE
6. During the trial, the complainant has led the following oral and documentary
evidence against the accused to prove her case beyond reasonable doubt:-
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Oral Evidence
CW1 Bimla Khattar (Complainant) (tendered her evidence by
way of affidavit and the same is exhibited as CW1/1)
Documentary Evidence
Ex.CW1/A, Ex. CW1/B Cheques in question
and Ex. CW1/C
Ex. CW1/D (colly) Returning Memos
Ex.CW1/E Legal notice dated 12.01.2016
Ex.CW1/F Postal receipt
Ex.CW1/G Tracking report
D. STATEMENT OF ACCUSED
7. Thereafter, before the start of defence evidence, in order to allow the accused to
personally explain the circumstances appearing in evidence against her, her statement
under Section 313 CrPC was recorded without oath. In reply, the accused denied all
the allegations against her. The accused submitted the following in her statement under
section 313 CrPC:
I have neither issued the afore-said cheques in favour of complainant nor taken any loan
from the complainant. On 09.03.2013, it came to my knowledge that the two afore-said
cheques of Rs. 1 lakhs each were missing from my house and accordingly I have
informed the concerned bank about the same by moving an application to this effect.
Accordingly, the bank stopped the payment of those cheques. Only after receiving the
summons from this court, I came to know that the complainant has not only misused the
afore-said two cheques of Rs. 1 lakhs each but she has also misused the third cheque of
Rs.20,000/-. On 31.12.2015, the complainant has quarrelled with my mother (who has
now expired) as well as my sisters. Thereafter, in order to take revenge from me and my
family, complainant has lodged this false case against me. The complainant has
mentioned my wrong address in the complaint i.e. T-106 rather my correct address is T-
160. Due to the wrong address, the summons were not served upon me and warrants
were issued against me. Complainant has intentionally and deliberately mentioned my
wrong address in the complaint in order to harass me and my family.
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E. DEFENCE EVIDENCE
8. The accused moved an application under section 315 CrPC which was allowed vide
order dated 16.03.2022. The accused examined herself as a defense witness and
thereafter, closed her evidence. The following evidence was led during this stage:
Oral Evidence
DW1 Amita (Accused in person).
Documentary Evidence
Ex. DW1/1 (OSR) Stop payment instructions dated 09.03.2013 issued to
(colly) PNB, Patel Nagar.
Ex. DW1/2 (colly) Copy of the summons issued by the Court in the present
matter.
9. Thereafter, the matter was listed for final arguments. After listening to final arguments
from both sides, the matter was reserved for pronouncement. I have heard the learned
counsels on both the sides and have given my thoughtful consideration to the material
appearing on record.
F. INGREDIENTS OF OFFENCE AND DISCUSSION
10. Before dwelling into the facts of the present case, it would be pertinent to discuss the
legal standards required to be met by both sides. In order to establish the offence under
Section 138 of NI Act, the prosecution must fulfil all the essential ingredients of the
offence, as highlighted below:-
First Ingredient: The cheque was drawn by a person on an account maintained by
him/her for payment of money and the same is presented for payment within a period
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of 3 months from the date on which it is drawn or within the period of its validity;
Second Ingredient: The cheque was drawn by the drawer for discharge of any legally
enforceable debt or other liability;
Third Ingredient: The cheque was returned unpaid by the bank due to either
insufficiency of funds in the account to honour the cheque or that it exceeds the amount
arranged to be paid from that account on an agreement made with that bank;
Fourth Ingredient: A demand of the said amount has been made by the payee or
holder in due course of the cheque by a notice in writing given to the drawer within
thirty days of the receipt of information of the dishonour of cheque from the bank;
Fifth Ingredient: The drawer fails to make payment of the said amount of money
within fifteen days from the date of receipt of notice.
11. In addition to the above, the conditions stipulated under Section 142 NI Act must be
fulfilled.
12. Therefore, in a cheque dishonour case under section 138 NI Act, the complainant is
required to prove that the cheque in question was drawn by the drawer for discharging
a legally enforceable debt. As per the scheme of the NI Act, once the accused admits
signature on the cheque in question, certain presumptions are drawn, which result in
shifting of onus on the accused.
13. The combined effect of section 118(a) NI Act and section 139 of the NI Act is that a
presumption exists that the cheque was drawn for consideration and given by the
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accused for the discharge of debt or other liability. Both the sections use the expression
"shall", which makes it imperative for the court to raise the aforesaid presumptions
once the foundational facts required for the same are proved (Hiten P. Dalal v.
Bratindranath Banerjee, (2001) 6 SCC 16). Further, it has been held by the Hon'ble
Apex Court in Rangappa v. Sri Mohan, (2010) 11 SCC 441 that the presumption
contemplated under Section 139 of NI Act includes the presumption of existence of a
legally enforceable debt. In order to rebut the statutory presumption u/s 139 NI Act, the
standard of proof is that of preponderance of probabilities, by which the accused is
required to raise a probable defence. To rebut the presumption, it is open to the accused
to rely on evidence led by him/her or the accused can also rely on the materials
submitted by the complainant or the circumstances upon which the parties rely in order
to raise a probable defence (Basalingappa v. Mudibasappa, (2019) 5 SCC 418).
14. Further, it is pertinent to note that it is a settled position of law that the accused, to rebut
the statutory presumption, should bring on record such facts and circumstances, upon
consideration of which, the court may either believe that the consideration and debt did
not exist, or their non-existence was so probable that a prudent man would under the
circumstances of the case, act upon the plea that they did not exist (Kumar
Exports v. Sharma Carpets, (2009) 2 SCC 513, ¶ 20).
15. The accused has contended that the aforesaid ingredients are not satisfied in the present
case and that the statutory presumptions cannot be raised against the accused because
the cheques in question were never drawn by the accused in favour of the complainant.
The contentions of the accused are discussed herein below.
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Contention - Stop Payment Instructions Issued in 2013
16. Ld. Counsel for the accused has contended that in the present matter, out of the three
cheques, the accused has denied her signature on two cheques Ex. CW1/A and Ex.
CW1/B. In relation to the said cheques, the accused has also exhibited a letter dated
09.03.2013 (Ex. DW1/1 (Colly) (OSR)) by which 'stop payment' instructions were
issued by the accused to her bank in relation to the aforesaid cheques for the reason that
the said cheques have been misplaced. Accordingly, it has been contended that when
'stop payment' instructions were issued in 2013 itself due to missing of the said
cheques, it becomes evident that these two cheques were never issued to the
complainant in 2015. Before this contention is analysed, it is imperative to reproduce
the relevant law in relation to liability in cases of 'stop payment instructions'.
17. Firstly, in Modi Cements Ltd. v. Kuchil Kumar Nandi (1998) 3 SCC 249, the Hon'ble
Apex Court made it clear that even if a cheque is dishonoured because of "stop
payment" instructions given to the bank, Section 138 of the NI Act would get attracted:
16. ... once the cheque is issued by the drawer a presumption under Section 139 must
follow and merely because the drawer issues a notice to the drawee or to the bank for
stoppage of the payment it will not preclude an action under Section 138 of the NI Act
by the drawee or the holder of the cheques in due course.
18. Further, in M.M.T.C. Ltd. v. Medchl Chemicals and Pharma (P) Ltd. [(2002) 1 SCC
234], the Hon'ble Apex Court laid down that while complaints cannot be quashed in
cases where the accused had issued 'stop payment instructions', the accused can show,
during trial, that the stop-payment notice had been issued because of valid causes,
including that there was no existing debt or liability at the time of presentation of
cheque for encashment:
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... even when the cheque is dishonoured by reason of stop-payment instructions by virtue
of Section 139 the court has to presume that the cheque was received by the holder for the
discharge, in whole or in part, of any debt or liability. Of course this is a rebuttable
presumption. The accused can thus show that the 'stop-payment' instructions were not
issued because of insufficiency or paucity of funds. If the accused shows that in his
account there were sufficient funds to clear the amount of the cheque at the time of
presentation of the cheque for encashment at the drawer bank and that the stop-payment
notice had been issued because of other valid causes including that there was no
existing debt or liability at the time of presentation of cheque for encashment, then
offence under Section 138 would not be made out. The important thing is that the
burden of so proving would be on the accused. Thus a court cannot quash a complaint on
this ground. (Emphasis added)
19. The same position of law has been re-iterated in Laxmi Dyechem v. State of Gujarat
(2012) 13 SCC 375 and Pulsive Technologies (P) Ltd. v. State of Gujarat, (2014) 13
SCC 18.
20. Therefore, while it is indeed true that a complaint case under section 138 NI Act is
maintainable in a case where the cheque has been dishonored for the reason "payment
stopped by drawer", the accused can raise a probable defense by showing that the stop-
payment notice had been issued because of valid causes, including that there was no
existing debt or liability at the time of presentation of cheque for encashment.
21. In the present case, the date of the letter by which stop-payment instructions were
issued to the bank is 09.03.2013. However, as per the complainant's version, the
accused had approached the complainant for a loan in August 2015 and had promised
to repay the loan within 4 months. Therefore, as per the complainant's own version,
the accused had requested for the alleged loan in August 2015, i.e., after 2 years from
the date of issuing stop-payment instructions.
22. I am of the humble view that the aforesaid set of facts raise a probable defense in favour
of the accused. The 'stop-payment instructions' were issued in March 2013. The
alleged loan was taken in August 2015. It is not possible that the accused would have
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predicted the future that she would take a loan from the complainant in August 2015
and give the cheques-in-question for repayment of the said loan, and therefore, she
went ahead and issued 'stop-payment' instructions in 2013 itself, i.e., two years before
she even requested for the said loan. The 'stop-payment instructions' makes it evident
that the accused's version is truthful, i.e., that she had issued 'stop-payment
instructions' in 2013 because she had misplaced the cheques in question. It is pertinent
to mention here that the accused and the complainant are neighbours and used to visit
each other frequently. Accordingly, it is not inconceivable that the misplaced cheques
of the accused came into the possession of the complainant.
23. The alleged loan was taken in 2015 and hence, the accused could not have hatched a
plan in 2013 itself to defraud the complainant by issuing 'stop-payment instructions'
in 2013 qua the cheques in question. It would have been a different scenario if the stop-
payment instructions were issued after grant of the alleged loan. However, issuance of
stop-payment instructions way back in 2013 makes it evident that the accused had
issued the said instructions due to bona-fide reasons, i.e., the accused had misplaced
the cheques in question in 2013. Therefore, the accused has been able to raise a
probable defense by showing that the stop-payment notice had been issued because of
valid causes, and that the cheques in question were never issued by her in discharge of
legal liability.
Contention - Failure to show financial capacity/ source of funds to advance the
alleged loan
24. Apart from the aforesaid probable defense raised by the accused, it is pertinent to note
that there are other material discrepancies in the version of the complainant.
25. It is a settled position of law that showcasing that complainant did not have adequate
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financial capacity to lend money to the accused amounts to a probable defence and can
help in rebutting the presumption that is accrued to the benefit of the complainant in
NI Cases (Basalingappa v. Mudibasappa, (2019) 5 SCC 418; K. Subramani v. K.
Damodara Naidu, (2015) 1 SCC 99; Sheela Sharma v. Mahendra Pal, 2016 SCC
Online Del 4696).
26. In the present case, the complainant has not been able to adequately show her financial
capacity to lend a loan of Rs. 2,20,000. It is pertinent to note that in her evidence
affidavit, the complainant has nowhere disclosed her source of funds for advancement
of the alleged loan. Therefore, it was incumbent upon the complainant to prove her
source of funds when she was questioned regarding the same. However, the
complainant did not offer any sufficient explanation regarding her source of funds/
financial capacity to advance the alleged loan.
27. In her cross-examination, the complainant has specifically deposed that she is a
housewife and that her husband is the only earning member of the family. She has
further deposed that she does not know her bank balance in August 2015 (the month in
which the alleged loan was granted). The complainant could have produced her bank
account statements to show her financial capacity. However, despite admitting that she
maintains a bank account, the complainant has not furnished her bank account
statements / passbook.
28. Further, if the complainant had arranged funds from her husband, who is the sole
earning member of the family, she could have deposed her husband to corroborate her
version. The complainant had deposed in her cross-examination that her husband takes
care of all financial transactions and that he maintains a diary in respect of the loan
advanced. Therefore, the husband of the complainant must have been summoned by
the complainant to depose regarding the alleged loan and to further tender in evidence
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the diary in which the details of the alleged loan were maintained. However, the
complainant did not take any steps to prove her financial capacity/ source of funds.
Therefore, an adverse inference ought to be drawn against the complainant in this
regard. Therefore, in my humble view, the accused has been able to raise a probable
defense by casting a credible doubt over the source of funds / financial capacity of the
complainant to advance the loan in question.
G. CONCLUSION
29. In the backdrop of the above discussion, I am of the considered opinion that the accused
has successfully raised a probable defence in her favour and the complainant has failed
to prove her case beyond reasonable doubt.
30. In the result of analysis of the present case, the accused Amita is hereby acquitted from
the charge of offence punishable under Section 138 of the Negotiable Instruments Act.
The bail bond furnished earlier during trial is accepted for the purposes of section 437-
A CrPC.
DEVANSH Digitally
ORDER :- ACQUITTED. signed by DEVANSHU SAJLAN U SAJLAN Date: 2022.04.01 10:03:25 +05'30' Announced in the Open (Devanshu Sajlan) Court on 31.03.2022 MM (NI Act-05), West, THC DELHI CC NO. 894/2016 BIMLA KHATTAR V. AMITA 12 OF 12