Delhi District Court
Mohd. Rafat Khan vs . M/S. Faraz International on 18 April, 2022
IN THE COURT OF METROPOLITAN
MAGISTRATE (NI ACT) Digital Court No.-01, SOUTH
EAST DISTRICT, SAKET DISTRICT COURT, DELHI
Presided by: Ms. Sonam Singh
Mohd. Rafat Khan Vs. M/s. Faraz International
CC. No.2607/2021
Police Station: Kalkaji
Under Section: 138 Negotiable Instruments Act (in short "NI
Act")
CNR No. DLSE02-006208-2021
A. Registration no. of the case: 2607/2021
B. Name, parentage, and address of the complainant:
Mohd. Rafat Khan, A-64, Ashoka Enclave-II, Sector-37,
Faridabad-121003, Haryana.
C. Name, parentage, and address of the accused persons:
1. M/s. Faraz International,
R-45, Faraz Complex,Ramesh Park,
Laxmi Nagar, Delhi- 1100092.
2. Mr. Qamar Ahmed Qureshi,
R-207, Ramesh Park, St. No.-10,
Laxmi Nagar, Delhi -110092
3. Mr. Faisal Ahmed Qureshi,
S/o Mr. Qamar Ahmed Qureshi,
Authorised Signatory of M/s. Faraz International
CC. No.2607/2021
Mohd. Rafat Khan Vs. M/s. Faraz International Page No. 1
SONAM SINGH Digitally signed by SONAM SINGH
Date: 2022.04.18 15:42:16 +05'30'
R/o. R-207 IInd Floor, Ramesh Park,
Laxmi Nagar, Delhi-110092.
D. Offence complained of: Under Section 138 Negotiable
Instruments Act, 1881 (In short "NI Act".)
E. Plea of the accused: Pleaded not guilty.
F. Final order: Acquitted
G. Date of Final order: 18.04.2022
H. Date of institution: 04.03.2021
I. Final arguments heard on: 12.04.2022
J. Date of reserving: 12.04.2022
K. Date of pronouncement: 18.04.2022
JUDGMENT
BRIEF FACTS AND REASONS FOR DECISION OF THE CASE
1. Vide this judgment, I shall dispose of the present case filed by the complainant, Mohd. Rafat Khan against the accused persons M/s. Faraz International, Mr. Qamar Ahmed Qureshi and Mr. Faisal Ahmed Qureshi, U/s 138 of The Negotiable Instruments Act, 1881 (in short "NI Act"). The brief facts necessary for the disposal of the present case is hereby described as under:-
CC. No.2607/2021 Mohd. Rafat Khan Vs. M/s. Faraz International Page No. 2SONAM SINGH Digitally signed by SONAM SINGH Date: 2022.04.18 15:42:38 +05'30' Complainant's Case
2. The case of the complainant is that accused no.2 Mr. Qamar Ahmed Qureshi is his old friend of 20 years and has a real estate business. It was alleged by him that accused no.3 Mr. Faisal Ahmed Qureshi is the son of accused no.2 Mr. Qamar Ahmed Qureshi. He stated that the accused no.3 Mr. Faisal Ahmed Qureshi is the authorised signatory of accused no.1 M/s. Faraz International which is a proprietorship firm.
3. The complainant alleged that he invested Rs.12,50,000/-
with accused no.2 Mr. Qamar Ahmed Qureshi in his real estate business, who promised him a profit of 20 % per year. Further, he alleged that the said amount was paid by him vide a cheque No.455102 drawn on PNB dated 18.08.2015 drawn in favour of accused no.2.
4. Further, he alleged that the accused no.2 Mr. Qamar Ahmed Qureshi returned the principal amount of Rs.12,50,000/-. However, the accused no.2 Mr. Qamar Ahmed Qureshi was liable to pay Rs. 4,50,000/- as profit which was never paid back to the complainant.
5. The complainant alleged that on 15.02.2020, accused no.2 Mr. Qamar Ahmed Qureshi proposed to him to buy a flat of 450 Sq Ft size in his pre-constructed upcoming CC. No.2607/2021 Mohd. Rafat Khan Vs. M/s. Faraz International Page No. 3 SONAM SINGH Digitally signed by SONAM SINGH Date: 2022.04.18 15:42:51 +05'30' building, subsequent and conditional to obtaining clearances from all government authorities.
6. Further, the complainant alleged that the accused no.2 Mr. Qamar Ahmed Qureshi also gave him the discretion to cancel the booking with assured return of 20 % profit of the booking amount to be paid by the complainant. He alleged that he accepted the offer as he was looking for a small standby flat, as his son was attending his school in Daryaganj, Delhi.
7. The complainant alleged that as per the verbal agreement, on 16.02.2020, he paid a total of Rs 15,00,000/- as booking amount for the aforesaid flat. He alleged that he paid an amount Rs.10,00000/- (Rs.Ten Lacs) vide Cheque No.45113 drawn on PNB and an amount of Rs.5,00000/-(Rs. Five Lacs) vide Cheque No.000057 drawn on HDFC Bank.
8. The complainant alleged that on instructions of accused no.2 Mr. Qamar Ahmed Qureshi , the accused no.3 Mr. Faisal Ahmed Quresh issued three cheques on behalf of accused no.1 M/s. Faraz International which are, cheque no. 047024 dated 10.01.2021, cheque No. 047023 dated 20.01.2021 and, cheque No. 047025 dated 05.02.2021 for Rs 6 Lacs each, (total amount Rs. 18 Lacs ), all drawn on Axis Bank Ltd., Laxmi Nagar, New Delhi to the CC. No.2607/2021 Mohd. Rafat Khan Vs. M/s. Faraz International Page No. 4 SONAM SINGH Digitally signed by SONAM SINGH Date: 2022.04.18 15:43:06 +05'30' complainant (hereinafter referred to as 'the cheque in question'). It was alleged that accused persons had assured that the said cheques would be honored as and when presented for payment.
9. The complainant alleged that in September 2021, the complainant cancelled the booking, since, the accused no.1 firm and accused no.2 Mr. Qamar Ahmed Qureshi failed to obtain clearances for their aforesaid building.
10. The complainant alleged that the upon presentation of the said cheques to this bank, the cheques in question got dishonoured vide return memo dated 14.01.2021, 27.01.2021 and 06.02.2021 respectively with remarks "FUNDS INSUFFICIENT" in respect of cheque No.047024 and "PAYMENT STOPPED BY DRAWER"
in respect of cheques bearing Nos.047023 and 047025. He alleged that he contacted the accused persons in this regard but they refused to pay the amount of the cheques in question.
11. This constrained the complainant to send a legal demand notice to the accused dated 08.02.2021, which went unheeded.
12. The accused persons sent a reply dated 15.02.2021 to the legal demand notice of the complainant wherein they CC. No.2607/2021 Mohd. Rafat Khan Vs. M/s. Faraz International Page No. 5 SONAM SINGH Digitally signed by SONAM SINGH Date: 2022.04.18 15:43:22 +05'30' denied the contents of the paras of the said legal demand notice.
13. Hence, on non-payment by the accused persons of the cheques amount within 15 days of service of legal notice, the present complaint came to be filed seeking prosecution of the accused persons of the offence punishable under Section 138 NI Act.
Summoning Order, Appearance of Accused, and Admission to Bail
14. In view of the judgment of A. C. Narayanan Vs. State of Maharashtra & Anr." (2014) 11 SCC 790, by only relying upon the evidence by way of affidavit, which is Ex. CW-1/A and upon the documents on record, without formally examining the complainant in support of complainant's case, the undersigned had taken cognizance and had issued summons upon the accused no.3 Faisal Ahmed Qureshi vide order dated 25.10.2021. However, cognizance was declined qua accused no.1 M/s. Faraz International as it is a proprietorship firm and it has a non- juristic personality.
15. Further, cognizance qua accused no.2 Qamar Ahmad Quershi also was declined as he is not the signatory of the cheque and in view of the judgment of Hon'ble Supreme Court in case titled as "Alka Khandu Avhad v. Amar Syamprasad Mishra, (2021) 4 SCC 675 : 2021 SCC CC. No.2607/2021 Mohd. Rafat Khan Vs. M/s. Faraz International Page No. 6 SONAM SINGH Digitally signed by SONAM SINGH Date: 2022.04.18 15:43:39 +05'30' OnLine SC 189". In the said judgment, it was stated that only the signatory to the cheque in question can be made liable in the case where the cheque is issued in an individual capacity. The relevant para of the said judgment is reproduced below:-
"10.Therefore, a person who is the signatory to the cheque and the cheque is drawn by that person on an account maintained by him and the cheque has been issued for the discharge, in whole or in part, of any debt or other liability and the said cheque has been returned by the bank unpaid, such person can be said to have committed an offence. Section 138 of the NI Act does not speak about the joint liability. Even in case of a joint liability, in case of individual persons, a person other than a person who has drawn the cheque on an account maintained by him, cannot be prosecuted for the offence under Section 138 of the NI Act. A person might have been jointly liable to pay the debt, but if such a person who might have been liable to pay the debt jointly, cannot be prosecuted unless the bank account is jointly maintained and that he was a signatory to the cheque."
16. The accused no.3, Mr. Faisal Ahmed Qureshi entered an appearance on 09.12.2021 and was admitted to bail.
Notice U/s 251 Cr.P.C.
17. Thereafter, notice U/s 251 Criminal Procedure Code, (in short "CrPC") P.C for the offence U/s 138 NI Act was framed against the accused no.3 Mr. Faisal Ahmed Qureshi on 16.02.2022 to which he pleaded not guilty and claimed trial.
CC. No.2607/2021 Mohd. Rafat Khan Vs. M/s. Faraz International Page No. 7SONAM SINGH Digitally signed by SONAM SINGH Date: 2022.04.18 15:43:54 +05'30'
18. In his plea of defence made at the time of notice U/s 251 Cr. P.C, the accused no.3 Mr. Faisal Ahmed Qureshi stated that on 05.02.2020, he took a loan of Rs.15 lakhs from the complainant through two cheques. Further, he stated that in March 2020, due to the pandemic of COVID-19, a nationwide lockdown was imposed and because of his personal economic difficulty, he was not left with any source of income. He further stated that in December 2020, the complainant started pressuring him to return back the loan amount but he was not in a position to return back the amount.
19. Further, he stated that the complainant presented one cheque of Rs.6 lakh without his consent, and the same was returned dishonored due to insufficiency of funds. Thereafter, the complainant presented the other two cheques of Rs.6 lakh each which got dishonored as he issued instructions to his bank to stop the payment.
20. He also stated that from January, 2021 to March 2021, he made the payment of Rs.14,50,000/- to the bank account of the complainant from the same bank account of his through which he had issued the cheques. Thereafter, he requested the complainant to return his cheques and promised him that he would hand over Rs.50,000/- in cash to him.
CC. No.2607/2021 Mohd. Rafat Khan Vs. M/s. Faraz International Page No. 8SONAM SINGH Digitally signed by SONAM SINGH Date: 2022.04.18 15:44:11 +05'30'
21. He stated that he requested the complainant to compromise with him and reduced the interest amount of Rs.3 lakh which was due to him. However, the complainant did not pay any heed to his request. He lastly stated that the complainant has filed a false case against him by fabricating a new story altogether.
Statement of Accused no. 3 Mr. Faisal Ahmed Qureshiunder Section 294 CrPC.
22. The Statement of the Accused no.3 Mr. Faisal Ahmed Qureshi was also recorded under Section 294 CrPC whereby he admitted his signatures on the cheques in question and the cheques return memos, legal demand notice, and postal receipts along with tracking reports. Consequent to his admission, the witness cited at serial no.2 in the list of witnesses by the complainant was dropped.
Oral request under Section 145 (2) of the NI Act for cross- examining the complainant and matter tried as summons case.
23. Ld. Counsel for the accused had orally made a request under Section 145 (2) of the NI Act to cross-examine the complainant by the Accused, which was allowed vide order dated 16.02.2022. Further, vide the same order, this Court deemed it appropriate not to try the case as a summary trial, since a sentence for imprisonment CC. No.2607/2021 Mohd. Rafat Khan Vs. M/s. Faraz International Page No. 9 SONAM SINGH Digitally signed by SONAM SINGH Date: 2022.04.18 15:44:26 +05'30' exceeding one year could have been passed, if the trial would have resulted in a conviction, therefore, this case was tried as a summons trial case.
Complainant Evidence
24. Thereafter, the matter was listed for the recording of complainant evidence on 31.03.2022. Separate statement of the complainant was recorded to the effect that he will contest his case on his own without any legal assistance. However, he had been apprised about his right to legal representation and to engage a counsel.
25. To prove his case against the accused, the complainant/CW1 appeared as a witness. The evidence was recorded through the Virtual Mode on the Cisco Webex Meeting, in compliance with the guidelines by the Hon'ble High Court, namely, the 'Digital NI ACT Courts in Delhi, Project Implementation Guidelines 2020' and the 'Video Conferencing Rules of 2021'. At the post summoning stage, the complainant/CW-1 tendered his affidavit which is Ex. CW-1/A, which was filed at the time of pre-summoning evidence. In his evidence by way of affidavit, the complainant reiterated all the facts, as stated in the complaint on oath.
CC. No.2607/2021 Mohd. Rafat Khan Vs. M/s. Faraz International Page No. 10SONAM SINGH Digitally signed by SONAM SINGH Date: 2022.04.18 15:44:45 +05'30' Documents on record:
26. The Complainant/CW1 Sh. Mohd. Rafat Khan relied on the following documents:
Sr. No Exhibit Nature of documents
s/
Marks
1. Ex.CW1/1 Return memo dated
14.01.2021 of cheque No.
047024 at Page No. 14.
2. Ex.CW1/2 to Original three cheques i.e. Ex.CW1/4 cheque No.047024, dated 10.01.2021, cheque No.047023 dated 20.01.2021 and cheque No.047025 dated 05.02.2021, all for a sum of Rs.6,00,000/- each (in total Rs.18 lakhs) and drawn on Axis Bank Ltd., Laxmi Nagar, New Delhi at page no.14A , 15A and 16A.
(hereinafter referred to as "the cheques in question")
3. Ex.CW1/5 Return memo of cheque No. 047023 dated 27.01.2021 at page No.15.
4. Ex.CW1/6 Return memo of cheque No. CC. No.2607/2021 Mohd. Rafat Khan Vs. M/s. Faraz International Page No. 11 SONAM SINGH Digitally signed by SONAM SINGH Date: 2022.04.18 15:45:05 +05'30' 047025 dated 06.02.2021 at page No.16.
6. Ex.CW1/7 The legal demand notice dated (Colly.) 08.02.2021 addressed to the accused along with postal receipt and tracking report at page Nos.17 to 19.
7. Ex.CW1/8 Proof of service of the legal (Colly.) demand notice via WhatsApp and WhatsApp chat between the complainant and the accused along with envelope and postal receipts at page No.21.
8. Ex.CW1/9 Reply dated 15.02.2021 of accused to the legal demand notice at page Nos.22 to 26.
9. Mark A Copy of cheque No. 455102 at page No.13.
27. The court will discuss the testimony of the Complainant/CW1 Mohd. Rafat Khan, at the time of appreciation of evidence.
CC. No.2607/2021 Mohd. Rafat Khan Vs. M/s. Faraz International Page No. 12SONAM SINGH Digitally signed by SONAM SINGH Date: 2022.04.18 15:45:25 +05'30' THE STATEMENT OF THE ACCUSED No.3 UNDER SECTION 313 Cr. PC. / DEFENCE OF THE ACCUSED
28. The Accused no.3 Mr. Faisal Ahmed Qureshi in his statement under Section 313 r/w Section 281 Cr.P.C., on 05.04.2022 admitted issuing the three cheques in question to the complainant. He also admitted that the said cheques were dishonored vide their respective return memos. He further admitted that the legal demand notice was sent at his address and that he sent a reply to the same.
29. He denied that the cheque No. 455102 which is Mark A was issued by the complainant in favour of accused no.2 Qamar Ahmad Qureshi and stated that he did not have any knowledge regarding the same.
30. He further denied that the accused no.2 Qamar Ahmad Qureshi on 15.02.2020 proposed to the complainant to buy a flat of 450 Sq Ft in his pre-constructed building, with clearance from all government authorities or that at the discretion of the complainant, the booking could be canceled with return of 20% profit to his booking amount.
31. He denied that as per aforesaid verbal agreement, the complainant on 16.02.2020 paid vide PNB cheque No.45113 for amount Rs.10,00000/-(Rs.Ten Lacs) and HDFC Bank Cheque No.000057 for amount Rs.5,00000/- (Rs. Five Lacs) i.e. total amount Rs.15,00000/-
CC. No.2607/2021 Mohd. Rafat Khan Vs. M/s. Faraz International Page No. 13SONAM SINGH Digitally signed by SONAM SINGH Date: 2022.04.18 15:45:42 +05'30' (Rs.FifteenLacs) and the accused No.1 firm through his hands issued the cheques in question. He also denied that the cheques in question were issued in discharge of legal liability.
32. He further denied that the complainant had given 15 lakhs to the accused No. 2 Qamar Ahmed Qureshi for booking a flat who instructed him to issue a cheque in favour of accused No. 1 Faraz International stating that the building will be constructed by Faraz International.
33. Further, he denied that the accused no.2 Qamar Ahmed Qureshi told the complainant that in case of cancellation of booking of the flat, the complainant will be reimbursed with 20 percent of profit i.e. return on investment, which is also called buy back policy.
34. The accused no.3 Mr. Faisal Ahmed Qureshi stated that he had transferred Rs.14,50,000/- from his account of his proprietorship firm at Axis Bank to the complainant's bank account with ICICI Bank . He asked the complainant to return the cheques in question to him but the complainant refused to do so and filed a fabricated complaint before the Court.
35. He admitted the fact that the complainant knows the accused no.2 Qamar Ahmed Qureshi who is his father CC. No.2607/2021 Mohd. Rafat Khan Vs. M/s. Faraz International Page No. 14 SONAM SINGH Digitally signed by SONAM SINGH Date: 2022.04.18 15:45:59 +05'30' since 1998. However, he denied that the complainant had a verbal agreement in regard to the aforesaid flat with accused no.2 Qamar Ahmad Qureshi.
36. He admitted his signatures on the cheques in question and stated that he has filled all the particulars of the cheques in question. However, he stated that he did not remember whether he filled in the name of the payee.
37. He further reiterated his stand taken in his defence, at the time of notice framed u/s 251 CrPC. He stated that in February, 2020, he had taken a loan of Rs.15 lakhs from the complainant, who had issued two cheques of Rs.10 lakh and Rs.5 lakh each for giving him the loan. Further, he stated that in this regard, he had given three security cheques which are the cheques in question of Rs.6 lakhs each along with interest of Rs.3 lakhs. The aforesaid loan was to be paid back vide the aforesaid three cheques on the dates mentioned in the cheques itself.
38. He also stated that in March, 2020 due to the pandemic of COVID-19, a nationwide lockdown was imposed for six months and he was not left with any source of income. After the lockdown was lifted in December 2020, the complainant started making calls to his father and him, demanding his money back. They tried to explain to him that due to the lockdown of six months, there was no CC. No.2607/2021 Mohd. Rafat Khan Vs. M/s. Faraz International Page No. 15 SONAM SINGH Digitally signed by SONAM SINGH Date: 2022.04.18 15:46:18 +05'30' source of income and it would be difficult to return his money within two months. However, the complainant did not pay any heed to their request and started harassing them and also misbehaved with them.
39. He further stated that the complainant without his consent presented one cheque of Rs.6 lakh to his bank for encashment. The said cheque was dishonored for the reason of "insufficient funds" as he did not have any funds in his bank account. Thereafter, he gave instructions to his bank not to honor the subsequent two cheques. Thereafter, from January 2021 to March 2021, he transferred an amount of Rs.14,50,000/- from his bank account at Axis bank to the bank account of the complainant with ICICI Bank. The said amount was transferred with a lot of difficulty.
40. Lastly, he stated that after the payment of Rs.14,50,000/-, he tried to contact the complainant and told him that he was ready to pay the remaining amount of Rs.50,000/- and requested him to return the cheques in question. He also told him that they could amicably discuss the payment regarding the interest rate which was payable to him by the accused, as he had undergone a lot of financial difficulty due to nationwide lockdown but the complainant refused to listen to him.
CC. No.2607/2021 Mohd. Rafat Khan Vs. M/s. Faraz International Page No. 16SONAM SINGH Digitally signed by SONAM SINGH Date: 2022.04.18 15:46:38 +05'30' Defence Evidence
41. Thereafter, the matter was listed for the recording of defence evidence on 11.04.2022 as the accused no.3 Mr. Faisal Ahmed Qureshi wanted to lead evidence.
42. DW1 Sh. Himanshu Agrwal, Deputy Manager, Axis Bank, Laxmi Nagar, New Delhi and DW2 Sh. Raj Kumar, SWO B, PNB, Shakerpur, Laxmi Nagar Branch, New Delhi appeared in the witness box and relied upon the following documents. Their testimony will be discussed at the time of appreciation of evidence.
Sr. No Exhibits/ Nature of documents
Marks
1. Ex.DW1/1 The certified copies of the
(Colly). account statement of M/s
Faraz International bearing
account
No.917020069339670 from
the period 01.01.2021 to
31.12.2021 containing 37
pages.
2. Ex.DW2/1(col The certified copies of the ly) account statement of M/s CC. No.2607/2021 Mohd. Rafat Khan Vs. M/s. Faraz International Page No. 17 SONAM SINGH Digitally signed by SONAM SINGH Date: 2022.04.18 15:46:58 +05'30' Faraz International bearing account No.1603002100038703 from the period 27.09.2016 to 11.04.2022 containing 15 pages.
FINAL ARGUMENTS
43. The Court heard the final arguments on 12.04.2022.
ANALYSIS AND FINDINGS
44. I have heard the submissions of Sh. Mohd. Rafat, the complainant as well as that of Sh. Sunil Kumar Singh, Ld. counsel for the accused. The court has also diligently gone through the complaint, documents, evidence recorded, and the entire material on record.
45. To decide the present case, it is important to discuss the provisions.
46. At this stage for reference, the relevant provisions of the NI Act are hereby reproduced as under:-
Section 138 of NI Act: Dishonour of cheque for insufficiency etc. of funds in the account.-Where CC. No.2607/2021 Mohd. Rafat Khan Vs. M/s. Faraz International Page No. 18 SONAM SINGH Digitally signed by SONAM SINGH Date: 2022.04.18 15:47:16 +05'30' any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for [a term which may be extended to two years] or with fine which may extend to twice the amount of the cheque or with both:
Provided that nothing contained in this section shall apply unless-
(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(b) the payee or the holder in due course of the cheque, as the case may be makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of cheque [within thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid;and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or as the case may be , to the holder in due course of the cheque within fifteen days of the receipt of the said notice.
Explanation- For the purposes of this section "debt or other liability" means a legally enforceable debt or other liability.
Section 142 of NI Act: Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974)-
(a) no court shall take cognizance of any offence punishable under section 138 except upon a CC. No.2607/2021 Mohd. Rafat Khan Vs. M/s. Faraz International Page No. 19 SONAM SINGH Digitally signed by SONAM SINGH Date: 2022.04.18 15:47:35 +05'30' complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque;
(b) such complaint is made within one month of the date on which the cause of action arises under clause (c) of the proviso to section 138;
(c) no court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try any offence punishable under section 138."
47. In Kusum Ingots & Alloys Ltd. v. Pennar Peterson Securities Ltd. (2000) 2 SCC 745, the Hon'ble apex court discussed the conditions of section 138 NI Act which are to be fulfilled for a cause of action to arise in favour of the Complainant. It was stated that the following facts as given below must be shown to exist for initiating prosecution for the offence u/s 138 NI Act. :
"(i) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account for the discharge of any debt or other liability;
(ii) that cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(iii) that cheque is returned by the bank unpaid, either because the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank;
(iv) the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 15 days (now 30 days) of the receipt of information by him from the bank regarding the return of the cheque as unpaid;CC. No.2607/2021 Mohd. Rafat Khan Vs. M/s. Faraz International Page No. 20
SONAM SINGH Digitally signed by SONAM SINGH Date: 2022.04.18 15:47:55 +05'30'
(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."
48. The aforesaid ingredients are to be satisfied cumulatively and only then the person who had drawn the cheque can be deemed to have committed an offence under Section 138 NI Act.
49. The object underlying Section 138 of the NI Act is to promote faith in the efficacy of the banking system and give credibility to negotiable instruments, in business transactions. The intention is to punish those unscrupulous persons, who issued cheques for discharging their liabilities, without really intending to honour the promise.
Appreciation of Evidence and Application of law to the facts of the case
50. After going through the record, and hearing submissions advanced by the Complainant and the Ld. Counsel for the accused, it is apparent that the only issue which arises for examination is to whether the cheques in question can be said to have been issued in discharge of a legally enforceable debt or liability or not.
CC. No.2607/2021 Mohd. Rafat Khan Vs. M/s. Faraz International Page No. 21SONAM SINGH Digitally signed by SONAM SINGH Date: 2022.04.18 15:48:16 +05'30'
51. The issue of service of legal demand notice need not be discussed as the accused no.3 Mr. Faisal Ahmed Qureshi has admitted its service and also filed its reply.
Question of Liability
52. Now, once foundational facts are admitted, it is a well-
settled position of law that when a negotiable instrument is drawn, two statutory presumptions arise in favour of the complainant, one under Section 139 NI Act and another under Section 118 (a) of the N I Act, which is a presumption of the cheque having been issued in discharge of legal liability and drawn for good consideration, arises.
53. Section 118 of the N.I Act and Section 139 NI Act are reproduced for ready reference:
Section 118 NI Act provides: "Presumptions as to negotiable instruments:
"Until the contrary is proved, the following presumptions shall be made: (a) of consideration - that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred was accepted, indorsed, negotiated or transferred for consideration;
Section 139 of the NI Act further provides as follows:
"Presumption in favour of holder - It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability"CC. No.2607/2021 Mohd. Rafat Khan Vs. M/s. Faraz International Page No. 22
SONAM SINGH Digitally signed by SONAM SINGH Date: 2022.04.18 15:48:36 +05'30'
54. Hence, in view of the aforesaid provisions, it is explicit that on proof of foundational facts, the Court will presume that cheque was made or drawn for consideration and that it was executed for discharge of debt or liability, once the execution of negotiable instrument is either proved or admitted and the burden of proof lies upon the accused to rebut the said presumption.
55. This is an example of the rule of 'reverse onus' in action, where it is an obligation on the accused to lead what can be called 'negative evidence'. The accused is not to prove a fact affirmatively, but to lead evidence to demonstrate the non-existence of debt or liability. Since, this rule is against the general principle of the criminal law of 'presumption of innocence in favour of the accused' and considering that such negative evidence, by character is difficult to lead, the threshold for the accused to rebut the presumption is on the scale of the preponderance of probabilities. This was held in Sangappa v. Sri Mohan' [(2010) 11 SCC 441], This means that the lack of consideration or a legally enforceable debt is not be proved beyond all reasonable doubt.
56. The accused is required to either prove the non-existence of the liability or the existence of it so improbable that a prudent man would think that it does not exist. The CC. No.2607/2021 Mohd. Rafat Khan Vs. M/s. Faraz International Page No. 23 SONAM SINGH Digitally signed by SONAM SINGH Date: 2022.04.18 15:48:57 +05'30' accused can do this either by leading direct or relying upon circumstantial evidence in his defence. Alternatively, the accused can punch holes within the case of the complainant by way of cross-examination. Thereafter, the onus of proof shifts back to the complainant, and the presumptions under Sections 118 and 139 of the Act, will not again come to the complainant's rescue.
57. In the light of the aforesaid provisions and principles of law, let us proceed to examine the defence of the accused Mr. Faisal Ahmed Qureshi and answer whether the same is a plausible one.
58. I am of the opinion that in the present case, the accused no.3 Mr. Faisal Ahmed Qureshi has succeeded in rebutting the presumption of legal liability, by exposing the inherent improbability of the case of the complainant. Various intrinsic infirmities in the case of the complainant have been exposed in his cross-examination conducted on 31.03.2022.
59. It is briefly reiterated that the complainant has claimed that the accused no.2 Mr. Qamar Ahmed Qureshi assured him 20 % profit per year from his real estate business and upon his proposal, the complainant invested Rs. 12,50,000/- which was paid to accused no.2 vide cheque CC. No.2607/2021 Mohd. Rafat Khan Vs. M/s. Faraz International Page No. 24 SONAM SINGH Digitally signed by SONAM SINGH Date: 2022.04.18 15:49:19 +05'30' no. 455102 dated 18.08.2015. Further, he alleged that the accused no.2 Mr. Qamar Ahmed Qureshi returned the principal amount of Rs.12,50,000/- but Rs. 4,50,000/- which was the promised profit which was never paid back to the complainant.
60. The complainant alleged that on 15.02.2020, accused no.2 Mr. Qamar Ahmed Qureshi proposed to him to buy a flat of 450 Sq Ft size in his pre-constructed upcoming building, subsequent and conditional to obtaining clearances from all government authorities.
61. Further, the complainant alleged that the accused no.2 Mr. Qamar Ahmed Qureshi also gave him the discretion to cancel the booking with assured return of 20 % profit of the booking amount to be paid by the complainant. He alleged that he accepted the offer as he was looking for a small standby flat, as his son was attending his school in Daryaganj, Delhi.
62. The complainant alleged that as per the verbal agreement, on 16.02.2020, he paid a total of Rs 15,00,000/- as booking amount for the aforesaid flat. He alleged that he paid an amount Rs.10,00000/- (Rs.Ten Lacs) vide Cheque No.45113 drawn on PNB and an amount of Rs.5,00000/-(Rs. Five Lacs) vide Cheque No.000057 drawn on HDFC Bank.
CC. No.2607/2021 Mohd. Rafat Khan Vs. M/s. Faraz International Page No. 25SONAM SINGH Digitally signed by SONAM SINGH Date: 2022.04.18 15:49:41 +05'30'
63. The complainant alleged that on instructions of accused no.2 Mr. Qamar Ahmed Qureshi , the accused no.3 Mr. Faisal Ahmed Quresh issued the three cheques in question on behalf of accused no.1 M/s Faraz International firm.
64. CW1/Mohd. Rafat/complainant in his cross-examination held on 31.03.2022 deposed that he only had a verbal agreement with the accused no.2 Mr. Qamar Ahmed Qureshi in relation to booking of the aforesaid flat and there is no written agreement. The fact that such a huge amount of Rs. 15 lacs was paid by the complainant without executing any written document goes against ordinary human conduct. His conduct is not that of a prudent man. Apart from the cheques in question, there is not any other evidence produced by the complainant to substantiate the agreement of purchase of the flat.
65. Further, the improbability of the complainant's case is manifest from his cross-examination, wherein he deposed that "I cannot tell the flat no. as the building was not constructed". He did not specify any other details regarding the flat. No photographs were filed and proved. No other independent witness was cited to prove his version. This testimony of complainant raises serious doubt regarding the booking of the flat at the first instance CC. No.2607/2021 Mohd. Rafat Khan Vs. M/s. Faraz International Page No. 26 Digitally signed by SONAM SONAM SINGH SINGH Date: 2022.04.18 15:50:04 +05'30'
66. Further, he alleged in the complaint that he had booked the flat as his son was attending his school in Daryaganj but he did not even cite his wife as a witness, who could have deposed regarding this fact to corroborate his version.
67. In addition to this, it would be apposite to remind ourselves that the accused no.3 Mr. Faisal Ahmed Qureshi, in his defence, has argued that the cheques were handed over to the complainant as security for a loan of Rs 15,00,000/- which he had taken in March 2020. He alleged that from January 2021 to March 2021, he transferred an amount of Rs. 14,50,000/- from his bank account to the bank account of the complainant with ICICI Bank .
68. Further, he alleged that after the said payment, he tried to contact the complainant and told him that he was ready to pay the remaining amount of Rs 50,000/- and requested him to return the cheques in question. Moreover, he alleged that he told the complainant that he was willing to amicably discuss the interest which was to be paid to the complainant, as he had undergone a lot of financial difficulty due to nationwide lockdown but the complainant refused to listen to him.
CC. No.2607/2021 Mohd. Rafat Khan Vs. M/s. Faraz International Page No. 27SONAM SINGH Digitally signed by SONAM SINGH Date: 2022.04.18 15:50:31 +05'30'
69. The accused no.3 Mr. Faisal Ahmed Qureshi summoned the two bank witnesses DW1 Sh. Himanshu Agrwal, Deputy Manager, Axis Bank, Laxmi Nagar, New Delhi and DW2 Sh. Raj Kumar, SWO B, PNB, Shakerpur, Laxmi Nagar Branch, New Delhi. They produced the certified copies of the account statement of M/s Faraz International bearing account No.917020069339670 from the period 01.01.2021 to 31.12.2021 which is Ex.DW1/1(Colly.) and the certified copies of the account statement of M/s Faraz International bearing account No.1603002100038703 from the period 27.09.2016 to 11.04.2022 which is Ex.DW2/1(Colly.) The said statements reflect payment of Rs. 14,50,000/- by the accused no.3 to the account of the complainant which makes the story of the complainant improbable.
70. In the existing set of circumstances, the version of the complainant does not inspire the confidence of the court when otherwise also, inconsistencies have been brought out by the accused in the case of the complainant. In addition to the same, no documentary proof has been brought on record by the complainant to buttress his case.
71. The complainant alleged that since the government clearances were not obtained, the booking was to be cancelled. However, this has not been supported by any CC. No.2607/2021 Mohd. Rafat Khan Vs. M/s. Faraz International Page No. 28 SONAM SINGH Digitally signed by SONAM SINGH Date: 2022.04.18 15:50:53 +05'30' documentary evidence nor by the testimony of any other independent witness. The complaint is vague with respect to which clearances were not obtained. Further, on cancellation, the complainant would have shown anxiety which would be reflected in correspondences exchanged between the parties. However, the complainant failed to bring any such supporting evidence on record.
72. The voice recordings emphasised in written submissions were never produced in evidence and cannot be relied upon. Further, the complainant in his written submissions stated that the accused persons are habitual offenders. However, the said submission does not assist the complainant in proving his case, as it is not a relevant fact in the present case.
73. It is a cardinal principle of criminal jurisprudence that the complainant is to prove the guilt of the accused beyond the possibility of any reasonable doubt. It is also a settled principle that thought there may be an element of truth in the complainant's story against the accused but considered as a whole there is invariably a long distance to travel and whole of this distance must be covered by the complainant by legal, trustworthy and unimpeachable evidence before an accused can be convicted CC. No.2607/2021 Mohd. Rafat Khan Vs. M/s. Faraz International Page No. 29 SONAM SINGH Digitally signed by SONAM SINGH Date: 2022.04.18 15:51:17 +05'30' Conclusion
74. Therefore, in view of the aforesaid discussion, the accused no.3 Mr. Faisal Ahmed Qureshi has clearly raised sufficient doubt about the existence of a legally sustainable liability, which the complainant has failed to prove after the onus shifted on him, and therefore the end result, for the foregoing reasons, is that the accused Mr. Faisal Ahmed Qureshi is hereby acquitted of offence u/s 138 of the N.I.Act. Consequently, the present complaint stands dismissed.
75. A copy of this order be placed on the official website of the District Court.
76. The judgment duly digitally signed be uploaded onto Layers App and CIS forthwith. Additionally, a copy of the same, digitally signed, be preserved in the physical record.
77. File be consigned to Record Room as per Rules upon completion and pagination after compliance of the provisions of Section 437 A Cr.P.C.
SONAM Digitally signed by
SONAM SINGH
Announced in the open SINGH Date: 2022.04.18
15:51:44 +05'30'
court on 18.04.2022 (SONAM SINGH)
MM (NI Act) DIGITAL COURT-01,
SOUTH-EAST/New Delhi
Certified that this judgment contains 30 pages and each page bears my signature.
CC. No.2607/2021 Mohd. Rafat Khan Vs. M/s. Faraz International Page No. 30