Delhi District Court
Raman Nayar vs Varun Chauhan on 18 August, 2022
IN THE COURT OF MS AISHWARYA SINGH KASHYAP,
METROPOLITAN MAGISTRATE (NI ACT),
KARKARDOOMA COURTS, DELHI
Raman Nayar vs Varun Chauhan
CC No. 910/2017 [Shakarpur]
CNR Number: DLET020018842017
Sh. Raman Nayar
S/o Sh. Gulshan Nayar
R/o House No. D-17/1,
Lehri Colony, East Arjun Nagar,
Delhi-110032 ........ Complainant
Vs
Sh. Varun Chauhan
R/o House No. 267,
Kailash Nagar, Ghaziabad, UP
Also at
R/o D1/2, Gali No.14, East Arjun Nagar,
Lehri Colony, Delhi .......Accused
Complaint Case No.: 910/2017
Date of Institution: 29.03.2017
Offence alleged: Section 138 Negotiable Instruments Act,
1881
Plea of the accused: Pleaded not guilty
Final Order: Acquitted
Date of Reservation: 21.07.2022
Date of Decision: 18.08.2022
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AISHWARYA SINGH Digitally signed by AISHWARYA
SINGH KASHYAP
KASHYAP Date: 2022.08.18 20:32:53 +05'30'
Raman Nayar vs Varun Chauhan CC 910/2017
JUDGMENT
Factual Matrix
1. The complaint is based on alleged facts that Sh. Raman Nayar (hereinafter 'the complainant') shared friendly relations with Sh. Varun Chauhan (hereinafter 'the accused'). Upon being approached by the accused at his residence, the complainant advanced a friendly loan of Rs.2.30 Lakhs for personal need to the accused in the last week of November, 2016. In order to discharge his liability, the accused issued a cheque in favour of the complainant bearing no. 349252 dated 14.01.2017 for an amount of Rs. 2,30,000/-, drawn on ING Vysya Bank Ltd, Ground Floor, D-Block, Aditya Mall CBD, Shahdara, Delhi-32 (hereinafter, 'the cheque in question'). However, upon presentment, the same was dishonoured with remarks "Account Closed" vide return memo dated 02.02.2017. The complainant served the legal demand notice on the accused dated 23.02.2017 demanding the payment of the cheque in question. On failure of the accused to pay the total amount qua the cheque in question within 15 days, the complainant filed the instant complaint within the period of limitation for committing the offence under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter 'The Act').
Pre-summoning Evidence, Cognizance and Notice
2. Pre-summoning evidence was led by the complainant and the Ld. Predecessor took cognizance and issued summons to the accused vide order dated 29.03.2017. The accused entered appearance and notice under Section 251 of the Code of Criminal Procedure, 1973 (hereinafter, 'CrPC') for the offence 2 of 10 AISHWARYA Digitally signed by AISHWARYA SINGH KASHYAP SINGH KASHYAP Date: 2022.08.18 20:33:51 +05'30' Raman Nayar vs Varun Chauhan CC 910/2017 under Section 138 of the Act was served upon accused on 24.04.2018, to which the accused pleaded not guilty and claimed trial.
Plea of Defence of the Accused.
1. It is correct that cheque in question bears my signature, name of my bank and my account number. However, I did not fill the body of cheque in question.
2. I know the complainant as he was friend of my cousin brother Ramit Thakur. I had not given any cheque to the complainant. I do not know as to how my cheque in question came in the hand of complainant. I have never taken any money from complainant in my life. I have not been using the bank account from which cheque in question issued for long time.
3. I had not received legal demand notice issued by the complainant at any point of time. I have no liability to pay anything to the complainant.
Complainant's Evidence
3. During the trial, the complainant has led the following oral and documentary evidence against the accused to prove the case.
Oral Evidence
1. CW1: Complainant on 17.11.2018, 11.02.2019, 09.04.2019 and 19.11.2019.
Documentary Evidence
1. EX.CW1/A: Cheque in Question
2. EX.CW1/B: Return Memo
3. EX.CW1/C: Legal Demand Notice
4. EX.CW1/D-G: Postal Receipts
5. EX.CW1H-K: Copy of Tracking Report
6. EX.CW1/L-N: Registered/Speed Post Envelop
7. Ex. CW1/X: Copy of ITR for AY 2016-17
8. Mark A: Copy of Bank Statement
9. Ex. CW1/1: Evidence Affidavit 3 of 10 AISHWARYA SINGH Digitally signed by AISHWARYA SINGH KASHYAP KASHYAP Date: 2022.08.18 20:34:12 +05'30' Raman Nayar vs Varun Chauhan CC 910/2017 Statement of Accused
4. Thereafter, in order to allow the accused to personally explain the circumstances appearing in evidence against him, the statement under Section 313 CrPC was recorded by the Ld. Predecessor without oath on 05.12.2019. Therein, the accused denied all the allegations against him and stated as hereunder:
1.It is correct that cheque in question bears my signature, name of my bank and my account number. However, I did not fill the body of cheque in question.
2. I had not given the cheque in question to anyone. I was living with my maternal uncle and my cheque was kept at the house of my maternal uncle. I know the complainant as he is friend of my cousin and he used to visit the house of my maternal uncle. The complainant might have taken the cheque in question from the house of my maternal uncle. My present account was dormant. I do not have any liability towards the complainant.
3.Yes, I want to lead defence in my evidence.
5. However, subsequently, when despite several opportunities, the accused failed to lead defence evidence, Ld. Predecessor closed his right vide order dated 06.03.2020. The undersigned took charge on 17.11.2020 and after hearing rival submissions on behalf of both sides, the matter was reserved for judgement.
Legal Position
6. In order to establish the offence under Section 138 of the Act, the prosecution must fulfil all the essential ingredients of the offence, as highlighted hereunder.
First Ingredient: The cheque was drawn by a person on an account maintained by him for payment of money and the same is presented for payment within a period of 3 months from the date on which it is drawn or within the period of its validity;
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AISHWARYA Digitally signed by AISHWARYA
SINGH KASHYAP
SINGH KASHYAP Date: 2022.08.18 20:34:32 +05'30' Raman Nayar vs Varun Chauhan CC 910/2017 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 the 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.
7. Further, all the conditions stipulated under Section 142 of the Act must be satisfied. The complainant asserts that he has prima facie satisfied all the aforesaid conditions. However, the accused has disputed the fulfilment of the second and fifth ingredients. The same are being considered hereinafter.
Appreciation of Evidence Standard of Proof
8. The scales of degree of proof required in a cheque dishonour case, where the cheque has been admitted by the accused, have been set by the Hon'ble Supreme Court in Rangappa vs Sri Mohan (2010) 11 SCC 441 holding that once the cheque and signatures are admitted, presumptions in favour of the complainant are raised. However, said presumptions are rebuttable in nature and the 'standard of proof' required on part of the accused is that of 'preponderance of probabilities'. This 5 of 10 AISHWARYA Digitally signed by AISHWARYA SINGH KASHYAP SINGH KASHYAP Date: 2022.08.18 20:34:51 +05'30' Raman Nayar vs Varun Chauhan CC 910/2017 can be achieved either by adducing evidence in defence or by raising probable defence whilst relying on the evidence already on record. 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. It is not necessary for the accused to come in the witness box in support of his defence. 1 The accused has successfully put a challenge qua the existence of legally enforceable liability/ the version put forth by the complainant in the instant case and the same is being discussed hereinafter.
Absence of Legally Enforceable Debt/Liability
9. The accused has admitted his signatures on the cheque in question, therefore statutory presumptions under Section 118 read with Section 139 of the Act have been raised in favour of the complainant. However, the existence of legally enforceable liability has been put to test based on the material available on record itself. This view was reinforced by the Hon'ble Supreme Court in M/s Kumar Exports vs M/s Sharma Carpets AIR 2009 SC 1518 wherein, the court held as under:
The accused in a trial under Section 138 of the Act has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case the non-existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as is expected of the Complainant in a criminal trial....However, the court need not insist in every case that the accused should disprove the non-existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the 1 Basalingappa vs Mudibasappa (2019) 5 SCC 418; M/s Kumar Exports vs M/s Sharma Carpets AIR 2009 SC 1518.
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SINGH KASHYAP Date: 2022.08.18 20:35:10 +05'30' Raman Nayar vs Varun Chauhan CC 910/2017 accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their 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. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on to the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arising under Section 118 and 139 of the Act.
The accused has also an option to prove the non-existence of consideration and debt or liability either by letting in evidence or in some clear and exceptional cases, from the case set out by the complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial. Once such rebuttal evidence is adduced and accepted by the court, having regard to all the circumstances of the case and the preponderance of probabilities, the evidential burden shifts back to the complainant and, thereafter, the presumptions under Section 118 and 139 of the Act will not again come to the complainant's rescue.2 This has further been elaborated in Rangappa (supra) holding that:
Under Section 118(a) of the NI Act, the court is obliged to presume, until the contrary is proved, that the promissory note was made for consideration. It is also a settled position that the initial burden in this regard lies on the defendant to prove the non-existence of consideration by bringing on record such facts and circumstances which would lead the court to believe the non-existence of the consideration either by direct evidence or by preponderance of probabilities showing that the existence of consideration was improbable, doubtful or illegal."3 Therefore, the existence of legally enforceable liability has been put to challenge by the accused on the touchstone of preponderance of probabilities.
2 Paras 11 and 12.
3 Para 23.
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10. Most importantly, the existence of legally enforceable debt is hinged on the fact of advancing friendly loan to the accused. It is not the case of the complainant that the amount was advanced through bank transfer; in-fact, he categorically deposed before the court that the amount was advanced in the last week of November and consisted of notes in the denomination of Rs 500/- and Rs. 1000/-. He deposed as under:
I must have given some currency notes of Rs. 500/- and Rs. 1000/- to the accused. I would have deposited Rs. 2.10 Lacs to Rs. 2.20 Lacs in my bank account in November, 2016 including currency notes of Rs. 500/- and Rs. 1000/-. I did not take any cheque from accused or secure pronote or written receipt at the time of advancement of loan in question to the accused. I did not advance any loan to other person. I did not make any bank transfer of money in favour of accused.4 I had given the money to the accused in the denomination of 500/- and 1,000/-. However, I do not know the number of notes in both the denominations...I came to know that the above said currency notes were prohibited to deal on 08.11.2016 by the Government. I was aware that where these currency notes can be deposited. I was not aware that these currency notes were illegal to deal.5 I had advanced the loan to the accused in the last week of November 2016 around 27/28.11.2016. It is correct that the denomination of currency note of Rs. 500/- and 1,000/- was not legally tender at that time.6
11. Therefore, by his own admission, the complainant admitted that he knew that currency denominations of Rs 500/- and Rs/ 1,000/- were not legal tender at the relevant period. The Government of India announced on November 8, 2016 that currency notes of Rs 500/- and Rs 1000/- would cease to be legal tender commencing midnight wherein people were allowed to deposit the old currency notes in banks and post offices until December 30, 2016. Further, an upper limit was imposed on daily 4 Cross Examination of CW1/Complainant on 11.02.2019. 5 Cross Examination of CW1/Complainant on 09.04.2019. 6 Cross Examination of CW1/Complainant on 19.11.2019.
8 of 10 Digitally signed by AISHWARYA AISHWARYA SINGH KASHYAP SINGH KASHYAP Date: 2022.08.18 20:35:49 +05'30' Raman Nayar vs Varun Chauhan CC 910/2017 and weekly cash withdrawals on the public as well. 7 The amount was admittedly advanced (in old currency notes) during the last week of November, 2016 i.e. during the time of demonetisation when old currency notes could only be exchanged against a daily cap, at banks and post offices against a valid ID proof. Further, the complainant also admitted that not only did he advance the alleged amount in old currency, he further borrowed an amount of Rs. 80,000/- from his mother and Rs. 50,000/- from his wife.8 Against the backdrop of the aforementioned demonetisation, keeping aside the fact that the old currency notes were invalid tender, it is further improbable to believe that a reasonable man during a time of acute liquidity crisis would advance such amount by borrowing from his mother and wife. Therefore, when the alleged loan advanced was an invalid legal tender, the question of legally enforceable debt does not arise and the second essential ingredient is found wanting in the present complaint.
12. Therefore, based on the material available on record, the existence of legally enforceable debt of cheque in question becomes doubtful on the touchstone of preponderance of probabilities. The accused has successfully raised a probable defence and rebutted the statutory presumptions in favour of the complainant, who has failed to establish the existence of legally enforceable liability as per his own admission during cross- examination. On account of the aforesaid, the complaint cannot be sustained in the eyes of law. No justification is forthcoming with respect to the failure of the complainant to bring on record 7 Demonetisation of Rs 500 and Rs 1000 notes: RBI Explains; The Hindu on December 9, 2016 (available at https://www.thehindu.com/news/national/Live-Narendra-Modis-address- to-nation/article60643315.ece).
8 Cross Examination of CW1/Complainant on 11.02.2019.
9 of 10 AISHWARYA SINGH Digitally signed by AISHWARYA SINGH KASHYAP KASHYAP Date: 2022.08.18 20:36:08 +05'30' Raman Nayar vs Varun Chauhan CC 910/2017 cogent evidence in his support. 13. On the contrary, glaring loopholes in the version of the complainant do not inspire any confidence before the court and his version cannot be relied upon. The complainant has failed to satisfy the second ingredient essential for the prosecution of complaint under Section 138 of the Act. Thus, the fifth ingredient does not warrant any analysis as the complainant has failed to prove the existence of legally enforceable liability.
Decision
14. In view of the aforementioned discussion, the accused has successfully raised a probable defence on the touchstone of preponderance of probabilities and the complainant has failed to prove the existence of legally enforceable liability/the second essential ingredient of Section 138 of the Act. Accordingly, the complaint is dismissed and the accused is hereby acquitted of the charge of the offence punishable under Section 138 of the Act.
ORDER: Acquitted Accused shall furnish personal bond and surety bond as per the mandate of Section 437A CrPC upon which previous bonds shall be cancelled and previous surety shall be discharged. Announced in Open Court on 18.08.2022.
(This judgement contains 10/Ten signed pages.) Digitally signed by AISHWARYA SINGH KASHYAP AISHWARYA SINGH KASHYAP Date: 2022.08.18 20:36:31 +05'30' Aishwarya Singh Kashyap) MM/NI Act(East)/KKD Courts/Delhi 18.08.2022 10 of 10