Delhi District Court
Gaurav Garg vs Punit Goyal on 26 November, 2024
IN THE COURT OF SH. SIDDHANT KUMAR,
METROPOLITAN MAGISTRATE (NI ACT)-06, SOUTH
DELHI DISTRICT, SAKET, NEW DELHI
JUDGMENT
DLST020361052019 CT Cases 23752/2019 PS : Saket Gourav Garg Vs. Punit Goyal Gourag Garg S/o Late Sh. Nand Kishor R/o B-139, F.F, Duggal Colony, Devli Road, Khanpur, Deoli New Delhi-110062 ..............Complainant Versus Punit Goyal S/o Late Sh. Ashok Goyal R/o C-28, Tigri Extension, Sangam Vihar, New Delhi-110062 Also at B-329, 4th Floor, Vasant Kunj, New Delhi-110070 ............ Accused Date of registration : 22.08.2019 Date of Judgment : 26.11.2024 Decision : Acquittal Digitally signed by SIDDHANT SIDDHANT KUMAR KUMAR Date:
2024.11.26 04:57:12 +0530 CT Case No. 23752 of 2019 Gourav Garg Vs. Puneet Goyal Page No.1 of 16 FACTS
1. The instant proceedings have originated out of a complaint filed by Mr. Gaurav Garg against Mr. Punit Goyal for the offense under Section 138, Negotiable Instruments Act, 1881 (hereinafter referred to as "NI Act").
2. Brief facts of the complaint are that the complainant and the accused shared a cordial relationship, with the accused frequently visiting the complainant's house. In December 2015, the accused approached the complainant for a friendly loan of Rs.
4,50,000/-, which the complainant, after initial reluctance, agreed to provide. The accused assured repayment as early as possible.
3. In discharge of the said liability, the accused issued five cheques totaling Rs.4,50,000/- towards the loan repayment. Upon presentation, five cheques Nos. 000128 dated 07.06.2019 for a sum of Rs.1,00,000/-, 000132 dated 14.06.2019 for a sum of Rs.50,000/-, cheque Nos. 000127 dated 04.06.2019 for a sum of Rs.1,00,000/-, 000129 dated 07.06.2019 for a sum of Rs.1,00,000/-, and 000131 dated 14.06.2019 for a sum of Rs.1,00,000/- were dishonored with the remark "Funds Insufficient." A legal notice dated 05.07.2019 was sent to the accused, but no payment was made, prompting this complaint. The trial was conducted simultaneously in both the connected cases as parties were the same and the liability arose out of the same transaction.
Digitally
signed by
SIDDHANT
SIDDHANT KUMAR
KUMAR Date:
2024.11.26
04:57:17
+0530
CT Case No. 23752 of 2019
Gourav Garg Vs. Puneet Goyal Page No.2 of 16
4. Thereafter, legal notice dated 05.07.2019 was sent to the accused. The accused failed to pay within the statutory period. Thus, the complaint was filed u/s 138 NI Act.
APPEARANCE OF ACCUSED AND TRIAL
5. The complainant was examined on oath. After perusing the complaint and documents annexed with it, Ld. Predecessor took cognizance and summons were issued to the accused on 11.09.2020. The accused appeared before the Court on 27.02.2021. Since, the offense u/s 138 NI Act is bailable, accused was admitted to bail.
6. Thereafter, notice u/s 251 Cr.P.C. was served upon him and explained to him on 22.03.2021. He pleaded not guilty. The accused stated in his defendant that he does not have any liability towards the complainant. His six cheques bearing nos. from 000126 to 000132 including cheques in question were misplaced and an NCR has already been filed on 28.02.2019 regarding these cheques in question. Even the complainant herein owns the liability towards him.
7. Accused was allowed u/s 145 (2) NI Act to cross examine the complainant. Considering the nature of evidence, the matter was now tried as a summons case. Thereafter, the matter was listed for CE.
8. In support of his case, the complainant had filed evidence Digitally signed by SIDDHANT SIDDHANT KUMAR KUMAR Date:
2024.11.26 04:57:23 CT Case No. 23752 of 2019 +0530 Gourav Garg Vs. Puneet Goyal Page No.3 of 16 by way of affidavit i.e. Ex.CW-1/1 which reiterated the contents of the complaint. He relied upon the following documents :
(i) Original cheque no. 000128, 000132 as Ex. CW-1/1A & Ex. CW-1/1B respectively;
(ii) Return memo as Ex.CW-1/2A & CW-1/2B;
(iii) Legal Demand Notice as Ex.CW-1/3;
(iv) Postal receipts are Ex.CW-1/4A & Ex. CW1/4B;
(v) Internet generated tracking report as Ex.CW-1/4C & Ex. CW-1/4D;
9. The complainant was cross-examined on 27.08.2022. The complainant adopted his pre-summoning evidence. He answered that at the time of advancing the loan he was a property dealer. He did not remember in which denomination of notes he gave the loan amount to the accused. He answered that the accused had constructed his building in front of complainant's house. He stated that he knew the accused personally when he constructed his building in front of complainant house however he does not know any of the maternal family of the accused by name. He further stated that accused used to meet him whenever he used to visit his place except that complainant/I had not met him. Complainant stated voluntarily that he had never visited the house of accused. Again said, after advancement of loan to the accused, he visited the house of accused many times. He further stated that he had advanced the loan of Rs. 4,50,000/- to accused in December, 2015 at his home however he did not remember the exact date. All his family members were present. Complainant further stated that no written documents was signed at the time of Digitally signed by SIDDHANT SIDDHANT KUMAR KUMAR Date:
2024.11.26 CT Case No. 23752 of 2019 04:57:29 +0530 Gourav Garg Vs. Puneet Goyal Page No.4 of 16 advancement of loan. The same was advanced for a short duration. He further stated that as far as he could remember, accused agreed to repay the same in three months. He further stated that he did not remember whether the time for repayment is mentioned in the legal demand notice, complaint and evidence affidavit or not. He further stated that accused handed me 5 cheques in Feb, 2019 at his residence Tigri. He said that the hand in which the signature and the figure have been written are different on Ex.CW-1/C and Ex. CW-1/D.
10. Accused was examined without oath u/s 313 Cr.P.C on 26.04.2023 and all the incriminating evidence was put to him. He denied issuing the cheques in question. The accused denied receiving the legal notice. He stated that he never issued the cheques in question to complainant and ever took any loan from complainant. The accused wanted to lead defence evidence. Thereafter, the matter was listed for DE on 24.08.2023.
11. Accused sought to bring on record the lost document report filed by him for the loss of the cheques in question. Summons were issued accordingly to the concerned officials. The lost document report was filed on record by PS Crime Branch as Ex. D1. Counsel for the accused stated that the DE may be closed hence DE was closed on 07.08.2024. Thereafter, the matter was listed for final arguments on 13.09.2024.
ARGUMENTS Digitally signed by SIDDHANT SIDDHANT KUMAR KUMAR Date:
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12. The learned counsel for the complainant argued that the accused had taken a friendly loan of Rs. 4,50,000/- in December 2015. When the accused failed to repay the amount despite repeated reminders, he issued five cheques (cheques nos. 000128 dated 07.06.2019 for a sum of Rs.1,00,000/-, cheques no. 000132 dated 14.06.2019 for a sum of Rs.50,000/-, cheque nos. 000127 dated 04.06.2019 for a sum of Rs.1,00,000/-, 000129 dated 07.06.2019 for a sum of Rs.1,00,000/-, and 000131 dated 14.06.2019 for a sum of Rs.1,00,000/-), including the three cheques forming the basis of complaint CC No.22666/2019 (cheque nos. 000127 dated 04.06.2019 for a sum of Rs.1,00,000/-, 000129 dated 07.06.2019 for a sum of Rs.1,00,000/-, and 000131 dated 14.06.2019 for a sum of Rs.1,00,000/-) and the remaining two cheques forming a basis of the complaint CC 23752/2019 (cheques nos. 000128 dated 07.06.2019 for a sum of Rs.1,00,000/-, cheques no. 000132 dated 14.06.2019 for a sum of Rs.50,000/-) between the same parties. It was emphasized that the accused had admitted his signatures on the cheques, thereby activating the statutory presumptions under Sections 118(a) and 139 of the NI Act. These presumptions establish that the cheques were issued towards the discharge of a legally enforceable debt or liability.
13. The counsel further argued that the accused's defense regarding the alleged loss of cheques is fabricated and baseless. It was submitted that the accused strategically filed an NCR dated 28.02.2019 to create a false defense and deprive the complainant of his legitimate dues. The NCR was not followed up with any Digitally signed by SIDDHANT SIDDHANT KUMAR Date: KUMAR 2024.11.26 CT Case No. 23752 of 2019 04:57:40 +0530 Gourav Garg Vs. Puneet Goyal Page No.6 of 16 substantive action, which indicates its lack of credibility. Moreover, the accused's admission of signing the cheques undermines his claim of lost documents, as the cheques were issued voluntarily to discharge the debt.
14. Regarding the argument of limitation, the counsel for the complainant submitted that the debt is not barred by limitation as the issuance of the cheques constitutes an acknowledgment of liability under Section 18 of the Limitation Act, 1963. Further, reliance was placed on Section 25(3) of the Indian Contract Act, 1872, which recognizes a promise to pay a time-barred debt as valid and enforceable if made in writing and signed by the debtor. The counsel contended that the cheques issued in February 2019 represent a written promise to pay the debt, thus renewing the liability. He relied on judicial precedents filed with his written submissions to substantiate this legal position.
15. Lastly, the counsel submitted that the address mentioned in the legal notice was correct and undisputed, invoking the presumption under Section 27 of the General Clauses Act that the notice was duly served. Thus, all necessary ingredients of the offense under Section 138 NI Act are satisfied, and the complainant is entitled to relief.
16. The learned counsel for the accused argued that the complainant failed to prove the alleged loan transaction, as no contemporaneous evidence was presented to support the advancement of Rs. 4,50,000/- in December 2015. It was Digitally signed by SIDDHANT SIDDHANT KUMAR KUMAR Date:
2024.11.26 CT Case No. 23752 of 2019 04:57:46 +0530 Gourav Garg Vs. Puneet Goyal Page No.7 of 16 emphasized that the complainant's case is riddled with inconsistencies and omissions, including the absence of a written agreement, specific details regarding the date of the transaction, and the non-examination of any witnesses to the alleged loan. Such lacunas cast serious doubt on the complainant's claims and rebut the statutory presumptions under Sections 118(a) and 139 of the NI Act by a preponderance of probabilities. The counsel submitted that under the NI Act, the burden on the accused is limited to establishing a probable defense, and this standard is significantly lower than proving the defense beyond a reasonable doubt. By highlighting the inconsistencies in the complainant's case, the accused has successfully discharged this burden. The counsel relied on judicial precedents to reinforce the principle that material gaps in the complainant's evidence can tilt the scales in favor of the accused.
17. On the point of limitation, the counsel contended that the alleged loan was advanced in December 2015, and the cheques in question were issued beyond the three-year limitation period prescribed under the Limitation Act, 1963. Therefore, the liability for the alleged loan was barred by limitation, and no penal liability under Section 138 NI Act could arise. He supported these submissions with case laws filed along with written arguments.
18. The counsel also argued that the NCR dated 28.02.2019 filed by the accused regarding the alleged loss of the cheques adds credibility to the defense. The complainant's failure to Digitally signed by SIDDHANT SIDDHANT KUMAR KUMAR Date:
2024.11.26 CT Case No. 23752 of 2019 04:57:50 +0530 Gourav Garg Vs. Puneet Goyal Page No.8 of 16 refute this document or establish its falsity undermines the presumption of liability under Section 139 NI Act. In conclusion, the counsel for the accused submitted that the complainant has failed to prove the existence of a legally enforceable debt or liability, while the accused has raised a probable defense, thereby discharging his burden. It was urged that the accused be acquitted.
LEGAL POSITION
19. The requirements which needs to be fulfilled by the complainant as per Section 138 are the following -
i) The accused issued a cheque on a bank account maintained by him;
ii) The said cheque must have been issued, wholly or partly, in discharge of a 'legal debt or other liability';
iii) The said cheque was presented before the bank within 3 months from the date of issuance and was dishonored;
iv) The payee issued a legal demand notice, within 30 days of receipt of information of dishonor of the cheque;
v) The drawer failed to make payment within 15 days of receipt of the said legal demand notice;
20. Further, the NI Act raises two important legal presumptions in favor of the holder of the cheque as soon as the execution of cheque is proved. As per Section 118(a), NI Act, it Digitally signed by SIDDHANT SIDDHANT KUMAR Date: KUMAR 2024.11.26 04:57:55 +0530 CT Case No. 23752 of 2019 Gourav Garg Vs. Puneet Goyal Page No.9 of 16 shall be presumed that every negotiable instrument was 'made, accepted, transferred, negotiated or endorsed for consideration, unless the contrary is proved'. Furthermore, as per section 139, NI Act, it shall be presumed that 'the holder of cheque, received the cheque for the discharge, in whole or in part, of any debt or other liability, unless the contrary is proved.'
21. The aforementioned presumptions were elucidated down by the Hon'ble Supreme Court of India in Basalingappa v. Mudibasappa, 2019 SCC OnLine SC 491 held as follows:
(i) Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.
(ii) The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defense. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
(iii) To rebut the presumption, it is open for the accused to rely on evidence led by him or accused can also rely on the materials submitted by the complainant in order to raise a probable defense. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.
(iv) That it is not necessary for the accused to come in the witness box in support of his defense, Section 139 imposed an evidentiary burden and not a persuasive burden.
APPRECIATION OF EVIDENCE and FINDINGS Digitally signed by SIDDHANT SIDDHANT KUMAR KUMAR Date:
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22. As the accused has admitted his signatures on the cheques in question and has not challenged the genuineness of the cheques and the return memos, the presumption under Section 139 read with Section 118(a) of the Negotiable Instruments Act, 1881, stands triggered in favor of the complainant. It is presumed that the cheques were issued in discharge of a legally enforceable debt or liability. This presumption is, however, rebuttable, and the onus now shifts to the accused to establish a probable defense by preponderance of probabilities, as per the legal principles laid down in Basalingappa v. Mudibasappa, 2019 SCC OnLine SC 491, and Rajesh Jain v. Ajay Singh, SLP (Crl.) No. 12802 of 2022.
23. The accused has raised multiple defenses which merit scrutiny. Firstly, he has claimed that he never took any loan from the complainant and alleged that his cheques were misplaced, for which he filed an NCR dated 28.02.2019. Secondly, he has contended that the liability for the alleged loan was barred by limitation under the Limitation Act, 1963, as the loan was purportedly advanced in December 2015, and the cheques were issued in 2019. Lastly, the accused has pointed to material inconsistencies and omissions in the complainant's case, such as the absence of a written loan agreement, the failure to produce witnesses to the transaction, and contradictions in the complainant's testimony. These defenses shall now be examined in light of the evidence and legal principles to determine whether Digitally signed by SIDDHANT SIDDHANT KUMAR KUMAR Date:
2024.11.26 04:58:05 +0530 CT Case No. 23752 of 2019 Gourav Garg Vs. Puneet Goyal Page No.11 of 16 the accused has successfully rebutted the presumptions under Sections 118 and 139 of the NI Act.
24. The accused has relied on an NCR registered on 28.02.2019 with the concerned police department, which contains details of the alleged loss of cheques, including the cheques in question. The NCR was duly produced on record, and no dispute has been raised regarding its existence. However, the accused has not led any further evidence to demonstrate the steps taken following the registration of the NCR, such as filing a complaint against any misuse or initiating legal action to stop payment on the cheques. The complainant, on the other hand, has alleged that the NCR was a false and fabricated document filed with the mala fide intent to create a defense against the present complaint.
25. The genuineness of the accused's claim of losing the cheques remains inconclusive due to a lack of corroborative evidence. While the registration of the NCR does lend some support to the accused's case, as a prudent individual might take such a step in the event of losing a valuable item like a signed cheque, this defense alone is insufficient to conclusively rebut the presumptions under Sections 118 and 139 of the NI Act. In the opinion of the Court, the mere production of the NCR, without further evidence to substantiate the alleged loss or demonstrate the accused's diligence in preventing the misuse of the cheques, does not meet the standard of preponderance of Digitally signed by SIDDHANT SIDDHANT KUMAR KUMAR Date:
2024.11.26 04:58:11 +0530 CT Case No. 23752 of 2019 Gourav Garg Vs. Puneet Goyal Page No.12 of 16 probabilities required to shift the burden back to the complainant.
26. The accused has contended that the alleged loan given in December 2015 was barred by limitation when the cheques in question were issued in 2019. During the complainant's cross- examination, he admitted that the loan was extended for a period of three months, which would make the repayment due by March 2016. Under Article 19 of the Limitation Act, 1963, the limitation period to recover a debt is three years from the date the debt becomes due. In the present case, the limitation period would have expired in March 2019, three years from the stipulated repayment period. However, the cheques in question were issued in June 2019, beyond the limitation period for the alleged loan recovery.
27. The complainant has not provided evidence of any acknowledgment of liability within the limitation period as per Section 18 of the Limitation Act to extend the limitation. Consequently, the debt appears to have become time-barred under the Limitation Act. The counsel for the accused relied upon a judgment concerning the maintainability of a civil suit under Order 37 of the Civil Procedure Code, which is pertinent in asserting the time-barred nature of the debt but related to a civil suit and not criminal proceedings under section 138 NI Act.
28. The Hon'ble Delhi High Court in M/S Vijay Polymers Pvt. Ltd. & Anr. v. M/S Vinnay Aggarwal Crl. MC 1682/2008 has Digitally signed by SIDDHANT SIDDHANT KUMAR Date: KUMAR 2024.11.26 04:58:16 CT Case No. 23752 of 2019 +0530 Gourav Garg Vs. Puneet Goyal Page No.13 of 16 categorically held that a cheque issued for a time-barred debt does not constitute a legally enforceable liability under Section 138 of the NI Act. In the present case, the cheques were issued well after the friendly loan had become time-barred, with no acknowledgment of the debt during the limitation period. Applying the principles of the judgment cited, the Court finds merit in the defense of the accused that the debt was barred by limitation, and therefore, the presumption under Sections 118 and 139 of the NI Act cannot be sustained in this regard.
29. Upon careful analysis of the evidence on record, it becomes apparent that the complainant has failed to substantiate his claim that the cheques in question were issued in discharge of a legally enforceable debt or liability. The complainant's primary failure lies in his inability to demonstrate any acknowledgment of the alleged loan by the accused within the statutory limitation period. The loan was claimed to have been advanced in December 2015, with a repayment term of three months. Consequently, the limitation period expired in March 2019. However, the cheques in question were issued months after this period, and no evidence--oral or documentary has been produced to suggest that the accused acknowledged the debt in any form to extend the limitation period under Section 18 of the Limitation Act, 1963.
30. Additionally, the complainant's case is plagued by significant factual and evidentiary lacunas. No written agreement or contemporaneous documentation has been produced to Digitally signed SIDDHANT by SIDDHANT KUMAR KUMAR Date: 2024.11.26 CT Case No. 23752 of 2019 04:58:22 +0530 Gourav Garg Vs. Puneet Goyal Page No.14 of 16 corroborate the alleged friendly loan transaction. The complainant also failed to present any independent witnesses to substantiate the transaction, despite stating that family members were present at the time of the loan being advanced. Furthermore, the complainant could not provide a specific date for the advancement of the loan, and the omission of such crucial details from the complaint and supporting affidavit raises serious doubts about the veracity of the claim.
31. The cumulative effect of these deficiencies undermines the complainant's case and creates significant doubt about the existence of the alleged debt. In light of these shortcomings and the credible defense raised by the accused, the complainant has failed to discharge the burden of proof shifted to him following the rebuttal of presumptions under Sections 118 and 139 of the NI Act.
32. Based on the appreciation of evidence and the arguments advanced by both sides, it is evident that the complainant has failed to establish his case beyond a reasonable doubt. While the accused admitted his signatures on the cheques, triggering the presumptions under Sections 118 and 139 of the Negotiable Instruments Act, these presumptions have been successfully rebutted by the accused on a preponderance of probabilities. The accused's defense regarding the loan being time-barred under the Limitation Act, 1963, has been accepted, as the cheques were issued long after the expiration of the limitation period without any valid acknowledgment of the debt to extend it. Digitally signed by SIDDHANT SIDDHANT KUMAR KUMAR Date:
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33. Further, the complainant's inability to produce sufficient evidence regarding the loan transaction, including the absence of any written agreement, independent witnesses, or contemporaneous documentation, raises significant doubts about the existence of a legally enforceable debt or liability. The inconsistencies in the complainant's narrative and the lack of specificity regarding the loan's details weaken his case substantially. On the other hand, the accused has raised credible defenses, including the filing of an NCR prior to the issuance of the cheques, which further adds to the doubt regarding the complainant's claims.
34. Accordingly, the accused is acquitted of the charges leveled against him in this case. The accused is held not guilty. Consequently, accused Punit Goyal is hereby acquitted for the offense punishable u/s 138 NI Act qua the cheque in the present case.
This Judgment contains 16 pages and each page bears the signature of Ld. Presiding Officer.
A copy of the judgment to be uploaded on the District Courts website.
Pronounced in the open court today i.e. on 26.11.2024.
Digitally signed by SIDDHANT SIDDHANT KUMAR KUMAR Date: 2024.11.26 04:58:33 +0530 (Siddhant Kumar) MM NI Act-06/South District, Saket Courts, New Delhi 26.11.2024 CT Case No. 23752 of 2019 Gourav Garg Vs. Puneet Goyal Page No.16 of 16