Delhi District Court
Sushil Kumar vs Ashish Agarwal on 30 November, 2023
IN THE COURT OF MS DIVYA ARORA, MM (NI ACT)-01,
SOUTH-WEST DISTRICT: NEW DELHI
CC No. 13878/17
Under Section 138 of N.I. Act
In the matter of:
Sushil Kumar
S/o Shri Vijay Pal
R/o RZ-18/A, Gali no.3
Main Sagarpur,
Delhi - 110 045. ... Complainant
Versus
Ashish Aggarwal
s/o Shri Anil Gupta
R/o 23A, Gali no.4, Old No.(712)
Near RSM Convent School,
Main Sagarpur,
Delhi - 110 046. ..... Accused
Date of Institution : 17.07.2017
Date of Judgment : 30.11.2023
JUDGMENT
1. Briefly, the case of complainant is that on account of friendly relations, accused approached complainant for a friendly loan of Rs.7 lacs to meet his financial exigencies. It is further alleged that accused agreed to repay this loan amount within a short span of time and upon this assurance, complainant gave the loan amount of Rs.7 lacs to accused in November 2016 after withdrawing Digitally from his bank account. It is further alleged that accused in signed by Divya Divya Arora Sushil Kumar vs. Ashish Aggarwal Page number 1 to 13 Arora Date:
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discharge of his legal liability issued Cheque bearing no.072853 dated 12.05.2017 for Rs.7 lacs drawn on ICICI Bank Ltd. Sector 6, Dwarka, Delhi (hereinafter referred to Cheque in question), however, on presentation of the Cheque in question, the same was returned dishonoured vide return memo dated 17.05.2017 with the remarks "Funds Insufficient". Upon this, the complainant sent a legal demand notice dated 06.06.2017 to the accused. On failure of accused to pay the cheque amount within the mandatory period of 15 days, the complainant has moved this court with a complaint under section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred as "NI Act").
Original Cheque is Ex.CW1/1, Returning memo is Ex.CW1/2, Legal notice is Ex.CW1/3, Postal receipt is Ex.CW1/4 and Internet generated report is Ex.CW1/5.
2. On finding of prima facie case against the accused, summons were issued against him and he appeared before the court on 15.03.2018.
3. The notice under section 251 of the Code of Criminal Procedure ("Cr.P.C.") was framed against the accused vide order dated 31.05.2018 to which he pleaded not guilty. He deposed that, "The cheque in question bears my signature. However, I had not handed over the cheque in question to the complainant. I know the complainant as he is my friend. I had also lodged a complaint in the month of July 2016 for the loss of cheque in question. The other particular namely name of payee, amount and date are not in my Divya Arora Sushil Kumar vs. Ashish Aggarwal Page number 2 to 13 Digitally signed Complaint Case no13878/17 by Divya Arora Date: 2023.11.30 16:30:45 -0600 handwriting. I have not taken any friendly loan as alleged by the complainant. I have not received any legal notice."
4. The complainant adopted his pre-summoning evidence tendered by way of affidavit as his post-summoning evidence.
5. After framing of notice, complainant examined himself as CW1 and he was cross examined by Ld counsel for accused at full length. Thereafter, CE was closed and the matter was listed for statement of accused under Section 313 CrPC.
6. Statement of accused was recorded under Section 313 CrPC read with Section 281 Cr.P.C. on 06.05.2022 wherein all the incriminating circumstances appearing in evidence against the accused was put to him to which he stated that, "The Cheque in question bears my signatures. I did not fill the particulars on the Cheque in question. I had lost my Cheque book in 2015-16. I had also filed an E complaint. I did not receive any legal notice. However, the address mentioned on the legal notice is mine. Complainant has filed a false case against me. I have never taken any loan as alleged by him. I do not owe any liability with respect to Cheque in question."
7. Accused examined himself as DW1 and was cross examined by Ld. Counsel for complainant and DE was Digitally closed on 24.09.2022. Therefore, the matter was fixed for signed by Divya Divya Arora Sushil Kumar vs. Ashish Aggarwal Page number 3 to 13 Arora Date:
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final arguments.
8. Thereafter, the Ld. Counsel for complainant and the accused filed written submissions and the matter was reserved for Judgment.
9. Before proceeding to the merits of the case, it is important to lay down the basic provision of law with respect to Section 138 NI Act which is as follows:- Section 138 of Negotiable Instruments Act, 1881 makes dishonour of cheques an offence. It provides that ''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 extend to twice the amount of the cheque, or with both''.
10. In order to ascertain whether the accused has committed on offence u/s 138 NI Act, the following ingredients constituting the offence have to be proved:- Digitally signed by Divya Divya Arora Arora Date:
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Complaint Case no13878/17 0600 (a) The drawer of the cheque should have issued the
cheque for the discharge, in whole or in part of a legally enforceable debt or other liability.
(b) The cheque 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.
(c) The drawer of such cheque fails to make the payment of the said amount of money within fifteen days of the receipt of the notice from the payee or the holder in due course demanding the payment of the said amount of money.
It is only when all the above mentioned ingredients are satisfied that the person who has drawn the cheque can be set to have committed an offence u/s 138 NI Act.
11. It is important to recall Section 118 of the Indian Evidence Act 1872 and Section 139 of the N.I Act here. Section 118 (a) of the Act provides that until the contrary is proved, it shall be presumed that ''that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration''. Further, Section 139 of the Act lays down that ''it shall be presumed, unless the contrary Digitally is provided, that the holder of a cheque received the cheque signed by Divya Divya Arora Sushil Kumar vs. Ashish Aggarwal Page number 5 to 13 Arora Date:
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of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.
12. In the case of Hiten P. Dayal Vs Bratindranath Bannerjee (2001) G SCC 16, the Hon'ble Supreme Court of India had observed that ''Because both sections 138 and 139 CrPC required that the court shall presume the liability of the drawer of the cheque for the amount for which the cheques are drawn as noted in State of Madras Vs A. Vaidhyanatha Iyer AIR 1958 SC 61, it is obligatory on the court that raise this presumption in every case where the factual basis for raising of the presumption has been established. It introduces an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the accused''.
13. The core issue that arises for consideration whether the cheque in question was issued by the accused in discharge of his liability.
14. The accused has admitted his signatures on the cheque in question at the stage of notice framed u/s 251, Cr.P.C. and examination u/s 313, Cr.P.C. Thus, unless the contrary is proved, it shall be presumed that the complainant received the cheque in discharge of the debt/liability from the accused. The standard of proof for rebuttal is on preponderance of probabilities. As held by the Hon'ble Supreme Court in decision cited as K.N. Beena vs Muniyappan And Another;(2001) 8 SCC 458, in order to rebut the presumption, mere denial by the accused will not Divya Sushil Kumar vs. Ashish Aggarwal Page number 6 to 13 Arora Complaint Case no13878/17 Digitally signed by Divya Arora Date: 2023.11.30 16:31:12 -0600 suffice. The accused must prove by leading cogent evidence that there was no debt/ liability.
15 Major defence led by accused is that he has never taken a loan of Rs.7 lacs from complainant and his cheque in question was lost. In the present case, the onus to prove that accused has not issued the cheque in question in favour of the complainant to discharge any liability, primarily lied on the accused. Section 103 of the Indian Evidence Act, 1872 enunciates that the person who asserts a fact must prove the same unless the law otherwise provides.
16. Accused has stated in his evidence that he lost his bag in 2016 and cheque book was in the bag. It is further stated by him that he filed an e-complaint with regard to loss of bag in July 2016. The complaint filed on record is marked as Mark A.
17. Perusal of Mark A reveals that accused filed a report on 13.07.2016 in relation to loss of his bag, signed cheque book of ICICI and Axis bank. It does not mention specifically about the cheque in question, it merely mentions the bank name of which the cheque books were lost. The circumstantial evidence has to be seen from a reasonable person point of view. If the signed cheque books were lost , then why did accused not gave any communication to concerned banks for stopping the payment of cheques. In fact, accused has admitted in his evidence that he closed his Digitally signed by Divya bank account in 2018 or 2019; why was no action taken for Divya Arora Sushil Kumar vs. Ashish Aggarwal Page number 7 to 13 Arora Date:
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two years when his cheque books were lost in 2016. Further, accused has admitted in his cross examination dated 24.09.2022 that he never inquired about the complaint from concerned police station. No prudent person would behave in such a relaxed manner if his signed cheques of two different banks are lost.
18. It has been held by Hon'ble Supreme Court in Basalingappa v Mudibasappa (2019) 5 SCC 418 that:
" To rebut the presumption, it is open for the accused to rely on evidence led by him or he 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."
19. Ld. Counsel for accused argued that complainant has not furnished the bank statement on record to show the withdrawal of Rs.7 lacs, which clearly shows he does not have financial capacity to advance loan. He further argued that complainant has taken inconsistent stand in his case. He pointed out that in his complaint, complainant has stated he gave loan of Rs.7 lacs to accused in November 2016 after withdrawing from bank account, however, in his cross examination he has stated loan of Rs.7 lacs was given to accused in two instalments of Rs 4 lacs and Rs.3 lacs. Lastly, Divya Arora Sushil Kumar vs. Ashish Aggarwal Page number 8 to 13 Complaint Case no13878/17 Digitally signed by Divya Arora Date: 2023.11.30 16:31:27 -0600 he argued that why was loan amount not transferred directly in the bank account of accused, instead of withdrawing this amount.
20. These inconsistencies and arguments raised by ld. Counsel for accused will not discredit the entire case of complainant when nothing cogent on record has been brought by the accused. It has been held by Hon'ble Supreme court in the case of Rohitbhai Bhai JeevanLal vs State of Gujrat (2019) 18 SCC 106 that minor inconsistencies do not lead to the rebuttal of presumption raised under Section 118 (a) read with Section 139 of NI Act.
21. Perusal of cross examination of complainant reveals that accused has no where asked complainant to bring his bank statement on record to prove the withdrawal entry. Merely raising an argument will not suffice to raise a doubt upon the transaction. Accused should have challenged the financial capacity by asking for bank statement.
22. Furthermore, the counsel for accused has contended that complainant did not disclose the factum of advancement of loan in question in his ITR, yet such factor alone cannot be enslaving enough to shroud the prosecution story with doubt. The averment of the counsel for accused regarding non mentioning of loan amount in ITR to doubt the case of complainant do not inspire confidence as culpability of offence under section 138 NI Act will not freeze for the reason Divya that there is violation of section 269 of Income Tax Act and the Arora Sushil Kumar vs. Ashish Aggarwal Page number 9 to 13 Digitally signed Complaint Case no13878/17 by Divya Arora Date: 2023.11.30 16:31:34 -0600 same does not prevent the operation of the statutory presumption of section 139 of NI Act. The prosecution u/s 138 of NI Act cannot be dismissed or stalled for non-compliance of Section 269 SS of the Income Tax Act. Such violation may give rise to an independent criminal offence, but on account of violation of the said provision, the prosecution of the accused for the alleged dishonour of cheque u/s 138 NI Act does not become bad in law.
23. Therefore, considering the weight of the attending circumstances viz, the consistency in the prosecution story, and the failure of the accused to put forth any reasonable and believable defence and fact that the accused has not proved his defence to cause the probabilities to lie in his favour, an element of section 138 NI Act stands assembled.
24. Another condition with regard to Section 138 NI Act is receiving of legal notice. Accused has denied to the receiving of legal notice at the stage of notice framed u/s 251 CrPC, however, has admitted his address to be correct in his cross examination. This court is of the view that the address on the legal notice once having been shown to be the correct address of accused and legal notice having been dispatched by registered AD, a presumption of due service arises in view of Section 27 of General Clause Act & Section 114 of Indian Evidence Act and now it is upon accused to prove that notice was not served upon him. Not even an iota of evidence has been brought on record by the accused to displace the Digitally signed by presumption of due service. To the contrary, perusal of record Divya Divya Arora Arora Date:
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Complaint Case no13878/17 0600 shows that complainant has issued a legal demand notice to the accused and same was dispatched by way of speed post.
25. Also in CC Alavi Haji Vs. Palapatti Mohammad (Crl.)767/2007 the Hon'ble Supreme Court of India held that "where the notice is sent by Registered post by correctly addressing the drawer of the cheque, the mandatory requirement of issue of notice in terms of clause (b) of proviso to section 138 Act stands complied with." Further, the above judgment also stated that any drawer who claims that he did not receive the notice sent by post, can within 15 days of receipt of summons from the court in respect of the complaint u/s 138 NI Act make payment of the cheque amount and submit to the court that he had made payment within 15 days of receipt of summons. In the present case, the accused has failed to adduce any evidence to rebut the presumption of due service. As such, the legal notice stood served upon the accused.
26. Another condition qua the presentation of the cheques within three months is concerned, the same is satisfied upon the perusal of the cheques in question (Ex CW1/1) dated 12.05.2017 and while the return memo (Ex.CW1/2) dated 17.05.2017, thus, being presented within the prescribed period of limitation of three months. The defence did not adduce any evidence whatsoever to contradict the same.
27. Divya Another condition pertains to the cheque being returned unpaid owing to their being dishonored. Bank return Arora Sushil Kumar vs. Ashish Aggarwal Page number 11 to 13 Digitally signed Complaint Case no13878/17 by Divya Arora Date: 2023.11.30 16:31:47 -0600 memo or slip is prima facie proof of dishonor. Section 146 of the Negotiable Instruments Act, 1881, in this regard comes into play which raises a presumption that the court shall presume the fact of dishonor of the cheque in case of cheque is returned vide a return memo issued by the bank having thereon the official mark denoting that the cheque has been dishonored. Again, as the defence has failed to rebut the said presumption, hence the said condition is also satisfied.
28. The last condition is that accused fails to make the payment within fifteen days from the date of the receipt of the legal demand notice. In the present case, the accused has evidently failed to make the payment within the fifteen days contending that he owes no legal liability to pay the amount mentioned in the cheque in question. The accused has miserably failed to prove that said assertion and thus, the last limb of what will entail the liability against the accused, is also structured.
29. In view of the forgoing discussion, the accused has miserably failed in probabilising his defence, even on the scale of preponderance of probabilities.
30. The complainant has with the aid of evidence led a presumption of legal liability under Section 118 read with Section 139 of N. I. Act and has successfully proved the basic ingredients of offence under section 138 N. I Act.
Divya Arora Digitally signed by Sushil Kumar vs. Ashish Aggarwal Page number 12 to 13 Divya Arora Complaint Case no13878/17 Date: 2023.11.30 16:31:54 -0600
31. Resultantly, the accused Ashish Aggarwal stands convicted for the offence under Section 138 NI Act. Let the convict be heard separately on the quantum of sentence.
32. Let a digitally signed copy of the Judgment be supplied to the accused, free of cost, and a copy of the same be placed on record. Digitally signed by Divya Divya Arora Arora Date:
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Decided on 30.11.2023 0600
Announced in open court. (DIVYA ARORA)
MM (NI Act)-01/SW/DWK
New Delhi
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Complaint Case no13878/17