Delhi District Court
Paras Nath vs Vijay Prakash Tripathi on 29 January, 2024
Paras Nath Vs. Vijay Prakash Tirpathi
IN THE COURT OF SH. VIJAY SHANKAR,
ADDITIONAL SESSIONS JUDGE - 04, (WEST DISTRICT)
TIS HAZARI COURTS, DELHI
CA No.:- 217/2023
CNR NO.:- DLWT01-005327-2023
IN THE MATTER OF :-
Paras Nath
S/o Sh. Shiv Ram
R/o M-167, Prem Nagar-II,
Kirari, Delhi .... Appellant
VERSUS
Vijay Prakash Tirpathi
S/o Sh. Ram Sukh Tirpathi
R/o D- 230, Gauri Shankar Enclave,
Prem Nagar-III, Kirari, Delhi .... Respondent
Date of institution of the appeal : 03/07/2023
Date on which judgment was reserved : 22/01/2024
Date of judgment : 29/01/2024
Digitally
signed by
VIJAY
VIJAY SHANKAR
SHANKAR Date:
2024.01.29
15:41:53
+0530
CA No. 217/2023 Page No.1/39
Paras Nath Vs. Vijay Prakash Tirpathi
JUDGMENT
1. By way of present judgment, this Court shall conscientiously adjudicate upon criminal appeal under section 374 of the Code of Criminal Procedure, 1973 (hereinafter referred to as "Cr.P.C.") filed by the appellant against the judgment dated 21/02/2023 (hereinafter referred to as 'impugned judgment') passed by Sh. P. Bhargav Rao, Ld. MM-01 (N.I. Act), West District, Tis Hazari Courts, Delhi and order on sentence dated 29/05/2023 (hereinafter referred to as 'impugned order') passed by Ms. Mansi Malik, Ld. MM-01 (N.I. Act), West District, Tis Hazari Courts, Delhi, in Criminal Complaint No.1768/2016 under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as "N.I. Act") titled as "Vijay Prakash Tirpathi vs. Paras Nath".
In the present appeal, the appellant has prayed to summon the record of the Ld. Trial Court and to set-aside the impugned judgment dated 21/02/2023 and order on sentence dated 29/05/2023 passed by the Ld. Trial Court.
Digitally
signed by
VIJAY
VIJAY SHANKAR
SHANKAR Date:
2024.01.29
15:42:09
+0530
CA No. 217/2023 Page No.2/39
Paras Nath Vs. Vijay Prakash Tirpathi
2. Appellant has preferred the present appeal against the judgment dated 21/02/2023 and order on sentence dated 29/05/2023 passed by the Ld. Trial Court. Vide judgment dated 21/02/2023, the appellant/accused was convicted by the Ld. Trial Court for the offence u/s. 138 N.I. Act. Vide order on sentence dated 29/05/2023, the appellant/accused was sentenced till rising of the Court and he was also directed to pay compensation of Rs.6,00,000/- (Rupees Six Lakh Only) to the complainant and in default of payment of compensation, to undergo simple imprisonment for the period of four months.
3. Brief facts necessary for just adjudication of the present appeal as stated in the present appeal are that the complainant (respondent herein) had filed the complaint case u/s. 138 N.I. Act against the accused (appellant herein). Vide judgment dated 21/02/2023, the appellant/accused was convicted by the Ld. Trial Court for the offence u/s. 138 N.I. Act. Vide order dated 29/05/2023 order on sentence was passed. The present appeal has been filed within statutory period.
Digitally
signed by
VIJAY
VIJAY SHANKAR
SHANKAR Date:
2024.01.29
15:43:16
+0530
CA No. 217/2023 Page No.3/39
Paras Nath Vs. Vijay Prakash Tirpathi
4. The appellant has challenged the impugned
judgment and order on sentence on the grounds, as mentioned in the present appeal.
Grounds of appeal- Ld. Trial Court has passed the impugned judgment without appreciating the facts, evidence on record and defence raised by the appellant. The impugned judgment passed by the Ld.Trial Court is based on presumptions and conjectures and same is liable to be set aside. No notice was served as per mandatory provision u/s. 138 (B) & (C) N.I. Act. The complainant had served the notice Ex.CW-1/4 without name of father and without house number of the appellant and Ex.CW-1/6 did not reflect the address of the appellant. The complainant did not file tracking report of Ex.CW-1/6. In the complaint and pre- summoning evidence, the complainant did not mention the date when the loan was advanced to the appellant and the said fact has been concealed by the complainant deliberately. The complainant has failed to prove the service of notice to the appellant. The complainant has failed to prove his case beyond reasonable doubt. In the present case, the doubt has been created by the Digitally signed by VIJAY VIJAY SHANKAR SHANKAR Date:
2024.01.29 15:43:29 +0530 CA No. 217/2023 Page No.4/39 Paras Nath Vs. Vijay Prakash Tirpathi appellant and appellant is entitled to be acquitted. Ld. Trial Court has not appreciated the true fact that the appellant has no liability towards the complainant and the complainant had misused the cheque of the complainant and filed the false and fabricated complaint case against the appellant and used the cheque in question as a device to extort money from the appellant and as such, the same cannot be termed as legally enforceable debt. Ld. Trial Court made a grave error by ascertaining that the inadvertent omission in the testimony of the complainant cannot be a ground for rejection or discarding the pleadings despite the fact that omission does not mean the proving of documents as well as facts as per law. The bank statement was also not proved as the same was not endorsed by the bank nor any bank official was summoned to prove the bank statement. The complainant has failed to produce any document to prove that the loan was advanced to the appellant and the submission of the complainant is totally vague. The presumption has been rebutted as per preponderance of probability and the onus shifted his doubts. The alleged transaction is barred u/s. 138 N.I. Act being not legally Digitally signed by VIJAY VIJAY SHANKAR SHANKAR Date:
2024.01.29 15:44:09 +0530 CA No. 217/2023 Page No.5/39 Paras Nath Vs. Vijay Prakash Tirpathi recoverable debt and liability. Source of funds to advance the loan has not been proved by the complainant. The loan amount is not reflecting in the books of account and income tax return of the complainant. Order on sentence of simple imprisonment of the appellant is on higher side and same is against the principle of natural justice. Ld. Trial Court has taken rigid view in sentencing the appellant ignoring his family responsibility. Ld. Trial Court has also committed grave error not only in awarding the imprisonment to the appellant but also to award compensation of Rs.6,00,000/- which is high and aggravated. Ld. Trial Court has passed the huge award of compensation without appreciating the financial capacity of the appellant.
5. Before proceeding further, it is relevant to mention here the proceedings before the Ld. Trial Court.
(i) The complainant Vijay Prakash Tirpathi had filed the complaint u/s. 138 N.I. Act against the accused Paras Nath before the Ld. Trial Court. Digitally signed by VIJAY VIJAY SHANKAR SHANKAR Date:
2024.01.29 15:44:21 +0530 CA No. 217/2023 Page No.6/39 Paras Nath Vs. Vijay Prakash Tirpathi It is mentioned in the complaint u/s. 138 N.I. Act that complainant and accused are having friendly relations with each other and they are residing in the same locality. The accused was in financial crisis and had approached the complainant and requested the complainant for a loan of Rs.Three Lakh.
Thereafter, the complainant had given friendly loan of Rs.Three Lakh and accused assured to repay the same within the period of 3-4 months. The accused did not return the loan amount to the complainant. After many efforts made by the complainant, the accused had issued a cheque bearing No.996547 dated 10/11/2010 for the sum of Rs.Three Lakh drawn on Canara Bank, Paschim Vihar, New Delhi and the accused assured the complainant that the aforesaid cheque would be encashed on its presentation. The complainant had presented the aforesaid cheque on 12/11/2010, 23/11/2010, 11/01/2011 and 10/03/2011 with his Banker and the said cheque was dishonoured with the remarks "Funds Insufficient". Thereafter, the complainant apprised the same to the accused and demanded loan amount but on 11/03/2011, accused threatened the complainant and denied to Digitally signed by VIJAY VIJAY SHANKAR SHANKAR Date:
2024.01.29 15:44:32 +0530 CA No. 217/2023 Page No.7/39 Paras Nath Vs. Vijay Prakash Tirpathi return the loan amount. Thereafter, the complainant had sent a legal notice dated 25/03/2011 through Registered A.D./ UPC and the accused had received the same and inspite of returning the loan amount, the accused had threatened the complainant and denied to return the loan amount.
(ii) Thereafter, the complainant had led his pre-
summoning evidence by filing his evidence by way of affidavit, wherein he reiterated and reaffirmed the contents of his complaint u/s. 138 N.I. Act.
(iii) Vide order dated 04/03/2015 passed by the Ld. Trial Court, it was observed that prima-facie case u/s. 138 N.I. Act is made out against the accused and accused was summoned.
(iv) Finding a prima-facie case against the accused, notice u/s. 251 Cr.P.C. for the offence u/s. 138 N.I. Act was given to him to which he pleaded not guilty and claimed trial.
Vide order dated 16/11/2018 passed by the Ld. Trial Digitally signed by VIJAY VIJAY SHANKAR SHANKAR Date:
2024.01.29 15:44:55 +0530 CA No. 217/2023 Page No.8/39 Paras Nath Vs. Vijay Prakash Tirpathi Court, application u/s. 145 (2) N.I. Act of the accused was allowed and matter was fixed for cross-examination of the complainant.
(v) Complainant in support of his case had examined himself as CW-1.
It is pertinent to mention here that the accused had not cross-examined the complainant despite opportunities. Accordingly, the opportunity of the accused to cross-examine the complainant was closed vide order dated 11/12/2019 passed by the Ld. Trial Court.
Complainant/ CW-1 in his testimony had relied upon cheque bearing No.996547 dated 10/11/2010 Ex.CW-1/2, returning memo dated 10/03/2011 Ex.CW-1/3, legal notice dated 25/03/2011 Ex.CW-1/4, debit slips dated 12/11/2010 and 23/11/2010 Ex.CW-1/5, debit slips dated 11/01/2011 and 10/03/2011 Ex.CW-1/6 and courier receipt Ex.CW-1/6.
(vi) Separate statement of the accused was recorded Digitally signed by VIJAY VIJAY SHANKAR SHANKAR Date:
2024.01.29 15:45:14 +0530 CA No. 217/2023 Page No.9/39 Paras Nath Vs. Vijay Prakash Tirpathi u/s. 313 Cr.P.C. r/w section 281 Cr.P.C, wherein he denied the allegations against him and rebutted the complainant evidence against him. It was stated by the accused in his statement that he had given the blank cheque to the complainant and he had misused it. It was also stated by the accused that funds were available in the bank. It was also stated by the accused that he had not received the legal notice. It was also stated by the accused that he has no legal liability towards the complainant. It was also stated by the accused that he took a friendly loan of Rs.20,000/- from the complainant and re-paid the said amount to the complainant. It was also stated by the accused that he gave blank signed cheque to the complainant in lieu of the loan of Rs.20,000/- and same has been misused by the complainant. It was also stated by the accused that he wants to lead defence evidence.
(vii) The accused had not lead defence evidence despite opportunities and right of the accused to lead defence evidence was closed vide order dated 05/09/2022 passed by the Ld. Trial Digitally signed by VIJAY VIJAY SHANKAR SHANKAR Date:
2024.01.29 15:45:26 +0530 CA No. 217/2023 Page No.10/39 Paras Nath Vs. Vijay Prakash Tirpathi Court.
(viii) Thereafter, final arguments were heard by the Ld. Trial Court. Vide impugned judgment passed by the Ld. Trial Court, accused was convicted for the offence u/s. 138 N.I. Act and order on sentence was passed by the Ld. Trial Court.
6. This Court already heard the arguments on the present appeal advanced by Ld. Counsel for the parties. Perused the material available on record.
During the course of arguments, it was submitted by Ld. Counsel for the appellant that the impugned judgment and order on sentence are liable to be set-aside on the grounds, as mentioned in the present appeal. On the other hand, it was submitted by Ld. Counsel for the respondent that the Ld. Trial Court has passed the impugned judgment and order on sentence in accordance with law and there is no merits in the present appeal and the same is liable to be dismissed.
7. For the sake of ready reference, section 138 N.I. Act Digitally signed by VIJAY VIJAY SHANKAR SHANKAR Date:
2024.01.29 15:45:38 +0530 CA No. 217/2023 Page No.11/39 Paras Nath Vs. Vijay Prakash Tirpathi is reproduced as under:-
Section 138- Dishonour of cheque for insufficiency, etc., of funds in the account - 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 provision of this Act, be punished with imprisonment for a term which may 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 the 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 Digitally signed by VIJAY VIJAY SHANKAR SHANKAR Date:
2024.01.29 15:45:55 +0530 CA No. 217/2023 Page No.12/39 Paras Nath Vs. Vijay Prakash Tirpathi 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.
Ingredients of Section 138 N.I. Act have been specified by the Hon'ble Supreme Court of India in case titled as "Gimpex Private Limited Vs. Manoj Goel", {(2021) SCC Online SC 925} as under:-
"The ingredients of the offence under Section 138 are:
(i) The drawing of a cheque by person on an account maintained by him with the banker for the payment of any amount of money to another from that account;
(ii) The cheque being drawn for the discharge in whole or in part of any debt or other liability;
(iii) Presentation of the cheque to the bank;
(iv) The return of the cheque by the drawee bank as unpaid either because the amount of money standing to the credit of that account is insufficient to PART C honour the cheque or that it exceeds the amount arranged to be paid from that account;
(v) A notice by the payee or the holder in due course making a demand for the payment of the amount to the drawer of the cheque within 30 days of the receipt of information from the bank in regard to the return of the cheque; and
(vi) The drawer of the cheque failing to make payment of the amount of money to the payee or the holder in due course within 15 days of the Digitally signed by VIJAY VIJAY SHANKAR SHANKAR Date:
2024.01.29 15:46:11 +0530 CA No. 217/2023 Page No.13/39 Paras Nath Vs. Vijay Prakash Tirpathi receipt of the notice".
8. The object of N.I. Act has been elaborated by the Hon'ble Supreme Court of India in case titled as M/s Dalmia Cement (Bharat) Ltd. Vs. M/s. Galaxy Traders and Agencies Ltd., (2001(1) R.C.R. (Criminal) 646) and it was held that :-
"The Act was enacted and Section 138 thereof incorporated with a specified object of making a special provision by incorporating a strict liability so far as the cheque, a negotiable instrument, is concerned. The law relating to negotiable instrument is the law of commercial world legislated to facilitate the activities in trade and commerce making provision of giving sanctity to the instruments of credit which could be deemed to be convertible into money and easily passable from one person to another. In the absence of such instruments, including a cheque, the trade and commerce activities, in the present- day world, are likely to be adversely affected as it is impracticable for the trading community to carry on with it the bulk of the currency in force. The negotiable instruments are in fact the instruments of credit being convertible on account of legality of being negotiated and are easily passable from one hand to another. To achieve the objectives of the Act, the legislature has, in its wisdom, thought it proper to make such provisions in the Act, for conferring such privileges to the mercantile instruments contemplated under it and provide special penalties and procedure in case the obligations under the instruments are not discharged. The laws relating to the Act are, therefore, required to Digitally signed by VIJAY VIJAY SHANKAR SHANKAR Date:
2024.01.29 15:47:10 +0530 CA No. 217/2023 Page No.14/39 Paras Nath Vs. Vijay Prakash Tirpathi be interpreted in the light of the objects intended to be achieved by it despite there being deviations from the general law and the procedure provided for the redressal of the grievances to the litigants. Efforts to defeat the objectives of law by resorting to innovative measures and methods are to be discouraged, lest it may affect the commercial and mercantile activities in a smooth and healthy manner, ultimately affecting the economy of the country".
It was held by Hon'ble Supreme Court of India in case titled as "M/s Laxmi Dyechem Vs. State of Gujarat & Ors.", {(2012) 13 SCC 375} that :-
"Chapter XVII comprising Sections 138 to 142 of the Negotiable Instruments Act was introduced in the statute by Act 66 of 1988. The object underlying the provision contained in the said Chapter was aimed at inculcating faith in the efficacy of banking operations and giving credibility to negotiable instruments in business and day to day transactions by making dishonour of such instruments an offence. A negotiable instrument whether the same is in the form of a promissory note or a cheque is by its very nature a solemn document that carries with it not only a representation to the holder in due course of any such instrument but also a promise that the same shall be honoured for payment. To that end Section 139 of the Act raises a statutory presumption that the cheque is issued in discharge of a lawfully recoverable debt or other liability. This presumption is no doubt rebuttable at trial but there is no gainsaying that the same Digitally signed by VIJAY VIJAY SHANKAR SHANKAR Date:
2024.01.29 15:47:40 +0530 CA No. 217/2023 Page No.15/39 Paras Nath Vs. Vijay Prakash Tirpathi favours the complainant and shifts the burden to the drawer of the instrument (in case the same is dishonoured) to prove that the instrument was without any lawful consideration. It is also noteworthy that Section 138 while making dishonour of a cheque an offence punishable with imprisonment and fine also provides for safeguards to protect drawers of such instruments where dishonour may take place for reasons other than those arising out of dishonest intentions. It envisages service of a notice upon the drawer of the instrument calling upon him to make the payment covered by the cheque and permits prosecution only after the expiry of the statutory period and upon failure of the drawer to make the payment within the said period.".
9. Before proceeding further, it is relevant to discuss the other relevant provisions of N.I. Act.
Section 6 N.I. Act has prescribed the definition of cheque and cheque is Negotiable Instrument within the meaning of section 13 of the Act. Section 30 N.I. Act talks about the liability of the drawer.
Section 20 N.I. Act talks about inchoate stamped instruments. Section 87 talks about effect of material alteration of a Negotiable Instrument.
Section 118 N.I. Act talks about presumptions as to Digitally signed by VIJAY VIJAY SHANKAR SHANKAR Date:
2024.01.29 15:48:30 +0530 CA No. 217/2023 Page No.16/39 Paras Nath Vs. Vijay Prakash Tirpathi negotiable instruments of consideration, date, time of acceptance, time of transfer, order of endorsement, stamps and holder in due course.
Section 139 N.I. Act deals with presumption of law in favour of holder of a cheque. It provides that unless the contrary is proved, it shall be presumed that the holder of a cheque received the cheque for the discharge, in whole or in part, of any debt or other liability. It is a rebuttable presumption of law and the burden of proving that a cheque has not been issued for a debt or liability is on the accused.
10. Vide impugned judgment dated 21/02/2023, the Ld. Trial Court convicted the appellant/ accused for the offence u/s. 138 N.I. Act on the grounds that:-
(a) Legally enforceable debt existed in favour of the complainant.
(b) The cheque was given by the accused in discharge of debt, which got dishonoured.
(c) Execution of cheque is admitted by the accused.
Digitally signed by VIJAY VIJAY SHANKAR SHANKAR Date:
2024.01.29 15:48:39 +0530 CA No. 217/2023 Page No.17/39 Paras Nath Vs. Vijay Prakash Tirpathi
(d) Accused has failed to make the payment to the complainant even after receiving the legal demand notice.
(e) The accused has failed to rebut the presumption u/s. 118 (a) r/w Section 139 N.I. Act by establishing a probable defence on a standard of preponderance of probabilities.
(f) The complainant has successfully proved all essential ingredients of Section 138 N.I. Act.
11. CONTENTIONS
(a) It is the contention of counsel for the appellant that the cheque in question bears the signature of the appellant but the appellant had not filled up the other particulars in the cheque and in view of the same, impugned judgment and order on sentence are liable to be set-aside.
Section 20 N.I. Act talks about inchoate stamped instruments. Section 20 N.I. Act provides that where a person delivers a signed but a wholly blank or written incomplete Digitally signed by VIJAY VIJAY SHANKAR SHANKAR Date:
2024.01.29 15:48:50 +0530 CA No. 217/2023 Page No.18/39 Paras Nath Vs. Vijay Prakash Tirpathi negotiable instrument, he is deemed to have given prima-facie authority to the holder to fill-up the particulars in it or complete it and this makes him liable for the amount mentioned therein, in the capacity in which he signed the same, to any holder in due course of such amount. Thus, blank or incomplete written but signed cheque and filled-up by any other person is a valid negotiable instrument and prosecution under Section 138 N.I. Act can be initiated on the basis of such a cheque.
It was held by Hon'ble Supreme Court of India in case titled as " Bir Singh Vs. Mukesh Kumar", {(2019) 4 SCC 197} that:-
"A meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted.
If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other Digitally signed by VIJAY VIJAY SHANKAR SHANKAR Date:
2024.01.29 15:49:07 +0530 CA No. 217/2023 Page No.19/39 Paras Nath Vs. Vijay Prakash Tirpathi particulars. This in itself would not invalidate the cheque. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence.
It is not the case of the respondent-accused that he either signed the cheque or parted with it under any threat or coercion. Nor is it the case of the respondent-accused that the unfilled signed cheque had been stolen. The existence of a fiduciary relationship between the payee of a cheque and its drawer, would not disentitle the payee to the benefit of the presumption under Section 139 of the Negotiable Instruments Act, in the absence of evidence of exercise of undue influence or coercion. The second question is also answered in the negative.
Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt.
The fact that the appellant-complainant might have been an Income Tax practitioner conversant with knowledge of law does not make any difference to the law relating to the dishonour of a cheque. The fact that the loan may not have been advanced by a cheque or demand draft or a receipt might not have been obtained would make no difference. In this context, it would, perhaps, not be out of context to note that the fact that the respondent-accused should have given or signed blank cheque to the appellant- complainant, as claimed by the respondent-accused, shows that initially there was mutual trust and faith between them.
In the absence of any finding that the cheque in question was not signed by the respondent-
Digitally signed by VIJAY VIJAY SHANKAR SHANKAR Date:
2024.01.29 15:49:16 +0530 CA No. 217/2023 Page No.20/39 Paras Nath Vs. Vijay Prakash Tirpathi accused or not voluntarily made over to the payee and in the absence of any evidence with regard to the circumstances in which a blank signed cheque had been given to the appellant-complainant, it may reasonably be presumed that the cheque was filled in by the appellant-complainant being the payee in the presence of the respondent-accused being the drawer,at his request and/or with his acquiescence. The subsequent filling in of an unfilled signed cheque is not an alteration. There was no change in the amount of the cheque, its date or the name of the payee. The High Court ought not to have acquitted the respondent- accused of the charge under Section 138 of the Negotiable Instruments Act.
In our considered opinion, the High Court patently erred in holding that the burden was on the appellant-complainant to prove that he had advanced the loan and the blank signed cheque was given to him in repayment of the same. The finding of the High Court that the case of the appellant-complainant became highly doubtful or not beyond reasonable doubt is patently erroneous for the reasons discussed above."
It was held by Hon'ble Supreme Court of India in case titled as "Kalamani Tex & Another Vs. P. Balasubramanian", {(2021) 5 SCC 283} that :-
"........The Statute mandates that once the signature(s) of an accused on the cheque/negotiable instrument are established, then these reverse onus clauses become operative. In such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him.......".
Digitally signed by VIJAY VIJAY SHANKAR SHANKAR Date:
2024.01.29 15:49:35 +0530 CA No. 217/2023 Page No.21/39 Paras Nath Vs. Vijay Prakash Tirpathi The appellant/ accused at the time of framing notice u/s. 251 Cr.P.C. stated that the cheque in question bears his signature but he had not filled the other particulars. The appellant/ accused in his statement u/s. 313 r/w section 281 Cr.P.C. stated that he had given the blank signed cheque to the complainant and complainant had misused it. The appellant has not disputed his signature on the cheque Ex.CW-1/2. In view of the law laid down in Bir Singh case (Supra), it is clear that that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. In the present case, the appellant/ accused had not cross-examined the complainant/ CW-1. The testimony of complainant/ CW-1 has gone un-rebutted, un-challenged and un-controverted. The appellant/ accused had failed to adduce any defence evidence in support of his contention in this regard. In view of the same, the contention of counsel for the appellant in this regard is not tenable.
Digitally signed by VIJAY VIJAY SHANKAR SHANKAR Date:
2024.01.29 15:49:45 +0530 CA No. 217/2023 Page No.22/39 Paras Nath Vs. Vijay Prakash Tirpathi
(b) It is the contention of counsel for the appellant that the appellant had not taken the loan of Rs. Three Lakh from the complainant and the complainant had not produced any document to prove the fact that the loan was given by the complainant to the appellant/ accused and in view of the same, impugned judgment and order on sentence are liable to be set-aside. The appellant/ accused at the time of framing notice u/s. 251 Cr.P.C. stated that he did not take any loan from the complainant and he had given the cheque to a person, who supplied the building material and his name is Raju and he does not know as to how cheque has come in the possession of the complainant and complainant has misused the cheque in question. The appellant/ accused in his statement u/s. 313 r/w section 281 Cr.P.C. stated that he had given the blank signed cheque to the complainant and complainant had misused it and he took a friendly loan of Rs.20,000/- from the complainant and re-paid the said amount to the complainant and he gave blank signed cheque to the complainant in lieu of loan of Rs.20,000/-
which has been misused by the complainant. On the one hand, the appellant/ accused at the time of framing notice u/s. 251 Cr.P.C.
Digitally
signed by
VIJAY
VIJAY SHANKAR
SHANKAR Date:
2024.01.29
15:49:58
+0530
CA No. 217/2023 Page No.23/39
Paras Nath Vs. Vijay Prakash Tirpathi stated that he did not take any loan from the complainant and on the other hand, appellant/ accused in his statement u/s. 313 r/w section 281 Cr.P.C. stated that he took a friendly loan of Rs.20,000/- from the complainant. On the one hand, the appellant/ accused at the time of framing notice u/s. 251 Cr.P.C. stated that he had given the cheque to Raju and he does not know as to how the cheque has come in the possession of the complainant and on the other hand, appellant/ accused in his statement u/s. 313 r/w section 281 Cr.P.C. stated that he took a friendly loan of Rs.20,000/- from the complainant and he gave blank signed cheque to the complainant in lieu of loan of Rs.20,000/-. The above mentioned averments/ statement made by the appellant/ accused at the time of framing notice u/s. 251 Cr.P.C. and in his statement u/s. 313 r/w Section 281 Cr.P.C. are contradictory with each other. The factum regarding taking of loan from the complainant has been admitted by the appellant/ accused in his statement u/s. 313 r/w section 281 Cr.P.C. In the present case, the appellant/ accused had not cross-examined the complainant/ CW-1. The testimony of complainant/ CW-1 has gone un-rebutted, Digitally signed by VIJAY VIJAY SHANKAR SHANKAR Date:
2024.01.29 15:50:22 +0530 CA No. 217/2023 Page No.24/39 Paras Nath Vs. Vijay Prakash Tirpathi un-challenged and un-controverted. The appellant/ accused had failed to adduce any defence evidence in support of his contention in this regard. In view of the same, the contention of counsel for the appellant in this regard is not tenable.
(c) It is the contention of counsel for the appellant that the complainant in his complaint and evidence by way of affidavit did not mention the date when the loan was advanced to the appellant and in view of the same, impugned judgment and order on sentence are liable to be set-aside. The appellant/ accused in his statement u/s. 313 r/w section 281 Cr.P.C. stated that he took a friendly loan of Rs.20,000/- from the complainant and he gave blank signed cheque to the complainant in lieu of loan of Rs.20,000/-. Factum regarding taking of loan from the complainant is not disputed by the appellant/ accused in his statement u/s. 313 r/w section 281 Cr.P.C. In view of the same, non-mentioning of date of loan in the complaint and evidence by way of affidavit is not fatal to the case of the complainant. In the present case, the appellant/ accused had not cross-examined the Digitally signed by VIJAY VIJAY SHANKAR SHANKAR Date:
2024.01.29 15:50:37 +0530 CA No. 217/2023 Page No.25/39 Paras Nath Vs. Vijay Prakash Tirpathi complainant/ CW-1. The testimony of complainant/ CW-1 has gone un-rebutted, un-challenged and un-controverted. The appellant/ accused had failed to adduce any defence evidence in support of his contention in this regard. In view of the same, the contention of counsel for the appellant in this regard is not tenable.
(d) It is the contention of counsel for the appellant/ accused that the appellant/ accused had not received the legal notice from the complainant and in the legal notice Ex.CW-1/4 the name of father of the accused and house number of the appellant/ accused were not mentioned and postal/ courier receipt did not reflect the address of the appellant/ accused and the complainant had also not filed the tracking report of postal/ courier receipt and in view of the same, impugned judgment and order on sentence are liable to be set-aside.
It was held by Hon'ble Supreme Court of India in case titled as " C. C. Alavi Haji Vs. Palapetty Muhammed and Another", {2007) 6 SCC 555} that:-
Digitally signed by VIJAY VIJAY SHANKAR SHANKAR Date:
2024.01.29 15:50:49 +0530 CA No. 217/2023 Page No.26/39 Paras Nath Vs. Vijay Prakash Tirpathi "........It is, thus, trite to say that where the payee dispatches the notice by registered post with correct address of the drawer of the cheque, the principle incorporated in Section 27 of the G.C. Act would be attracted; the requirement of Clause
(b) of proviso to Section 138 of the Act stands complied with.........
...........In our opinion, therefore, when 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 of the Act stands complied with..........."
The appellant/ accused at the time of framing notice u/s. 251 Cr.P.C. and in his statement u/s. 313 r/w section 281 Cr.P.C had stated that he had not received any legal notice from the complainant. The appellant/ accused at the time of framing notice u/s. 251 Cr.P.C. had stated that he had not received any legal notice, however the same bears his previous address. The appellant/ accused at the time of framing notice u/s. 251 Cr.P.C. had admitted the fact that the legal notice bears his previous address. Section 27 of General Clauses Act deals with the presumption of service of notice sent by post and provides that service of such notice shall be deemed to have been affected unless the contrary is proved. It is not disputed by the appellant/ Digitally signed by VIJAY SHANKAR VIJAY Date:
SHANKAR 2024.01.29 15:51:08 +0530 CA No. 217/2023 Page No.27/39 Paras Nath Vs. Vijay Prakash Tirpathi accused that he was not residing at the address as mentioned in the legal notice Ex.CW-1/4 at the time when the same was sent to him. Ex.CW-1/6 is the courier receipt. The complainant/CW-1 in his evidence by way of affidavit Ex.CW-1/1 specifically mentioned that he had sent a legal notice by way of Registered A.D./ UPC on 25/03/2011 and accused had received the same. In the present case, the appellant/ accused had not cross-examined the complainant/ CW-1. The testimony of complainant/ CW-1 has gone un-rebutted, un-challenged and un-controverted. The appellant/ accused had failed to adduce any defence evidence in support of his contention in this regard. In view of the law laid down in C. C. Alavi Haji case (supra), the contention of counsel for the appellant in this regard is not tenable.
(e) It is the contention of counsel for the appellant that the complainant had not lead any evidence regarding his financial capacity and source of funds to advance the loan and in view of the same, impugned judgment and order on sentence are liable to be set-aside.
Digitally signed by VIJAY VIJAY SHANKAR SHANKAR Date:
2024.01.29 15:51:19 +0530 CA No. 217/2023 Page No.28/39 Paras Nath Vs. Vijay Prakash Tirpathi It was held by Hon'ble Supreme Court of India in case titled as " Rohit Bhai Jivanlal Patel Vs. State of Gujarat & Another", {(2019) 18 SCC 106} that:-
"In the case at hand, even after purportedly drawing the presumption under Section 139 of the NI Act, the Trial Court proceeded to question the want of evidence on the part of the complainant as regards the source of funds for advancing loan to the accused and want of examination of relevant witnesses who allegedly extended him money for advancing it to the accused. This approach of the Trial Court had been at variance with the principles of presumption in law. After such presumption, the onus shifted to the accused and unless the accused had discharged the onus by bringing on record such facts and circumstances as to show the preponderance of probabilities tilting in his favour, any doubt on the complainant's case could not have been raised for want of evidence regarding the source of funds for advancing loan to the accused-appellant. The aspect relevant for consideration had been as to whether the accused-appellant has brought on record such facts/material/circumstances which could be of a reasonably probable defence."
It was held by Hon'ble Supreme Court of India in case titled as " Tedhi Singh Vs. Narayan Dass Mahant", {(2022) SCC Online SC 302} that:-
"The Trial Court and the First Appellate Court Digitally signed by VIJAY VIJAY SHANKAR SHANKAR Date:
2024.01.29 15:51:53 +0530 CA No. 217/2023 Page No.29/39 Paras Nath Vs. Vijay Prakash Tirpathi have noted that in the case under Section 138 of the N. I. Act the complainant need not show in the first instance that he had the capacity. The proceedings under Section 138 of the N. I. Act is not a civil suit. At the time, when the complainant gives his evidence, unless a case is set up in the reply notice to the statutory notice sent, that the complainant did not have the wherewithal, it cannot be expected of the complainant to initially lead evidence to show that he had the financial capacity. To that extent the Courts in our view were right in holding on those lines......."
Hence, financial capacity and source of funds were not required to be proved by the complainant. In the present case, the appellant/ accused had not cross-examined the complainant/ CW-1. The testimony of complainant/ CW-1 has gone un-rebutted, un-challenged and un-controverted. The appellant/ accused had failed to adduce any defence evidence in support of his contention in this regard. In view of the law laid down in Rohit Bhai Jivanlal Patel and Tedhi Singh cases (Supra), the contention of counsel for the appellant in this regard is not tenable.
(f) It is the contention of counsel for the appellant that the complainant had not mentioned the loan amount in his ITR and books of account and same shows that no loan was ever Digitally signed by VIJAY VIJAY SHANKAR SHANKAR Date:
2024.01.29 15:52:13 +0530 CA No. 217/2023 Page No.30/39 Paras Nath Vs. Vijay Prakash Tirpathi extended to the appellant/accused and in view of the same, impugned judgment and order on sentence are liable to be set-aside.
It is well settled law that merely because the loan amount is not shown in the Income Tax Return, in every case, one cannot jump to the conclusion that the presumption u/s. 139 N.I. Act stands rebutted. Failure to show the loan amount in Income Tax Return cannot always said to be fatal to the case.
It was held by Hon'ble Delhi High Court in case titled as "Lekh Raj Sharma Vs. Yash Pal Gupta.", {Crl. LP 567/2014 decided on 30/06/2015 } that:-
"The finding that, as the amount of loan disbursed to the respondent was not shown in the balance sheet and ITR, the appellant could not be said to have proved its case beyond reasonable doubt, is also erroneous......"
It was held by Hon'ble Bombay High Court in case titled as "Krishna P. Morajkar Vs. Joe Ferrao & Anr.", {2013 ALL MR (Cri) 4129} that:-
".......The entire scheme of the Income Tax Act is for ensuring that all amounts are accounted for. If Digitally signed by VIJAY VIJAY SHANKAR SHANKAR Date:
2024.01.29 15:52:31 +0530 CA No. 217/2023 Page No.31/39 Paras Nath Vs. Vijay Prakash Tirpathi some amounts are not accounted for, the person would be visited with the penalty or at times even prosecution under the Income Tax Act, but it does not mean that the borrower can refuse to pay the amount which he has borrowed simply, because there is some infraction of the provisions of the Income Tax Act. Infraction of provisions of Income Tax Act would be a matter between the revenue and the defaulter and advantage thereof cannot be taken by the borrower. ......."
Non-mentioning of the loan amount in the ITR may entail consequences under Income Tax Act but it does not mean that the borrower can refuse to pay the amount which he has borrowed simply, because there are some fractions in provisions of the Income Tax Act. The appellant/ accused cannot escape from his legal liability to pay the loan amount only on the ground that the complainant had not mentioned the loan amount in his ITR and books of account. In view of the law laid down in Lekh Raj Sharma and Krishna P. Morajkar cases (Supra), the contention of counsel for the appellant in this regard is not tenable.
(g) It is the contention of counsel for the appellant that in view of the grounds mentioned in the present appeal, the Digitally signed by VIJAY VIJAY SHANKAR SHANKAR Date:
2024.01.29 15:52:43 +0530 CA No. 217/2023 Page No.32/39 Paras Nath Vs. Vijay Prakash Tirpathi appellant/accused had been successful to rebut the presumption u/s. 118 and 139 N.I. Act and in view of the same, impugned judgment and order on sentence are liable to be set-aside.
It is well settled law that the presumptions u/s. 118 and 139 of the N.I. Act are rebuttable and burden is on the accused to rebut the presumption which can be discharged by the accused by preponderance of probabilities. It is well settled law that presumptions u/s. 118 and 139 of the N.I. Act have to be rebutted by cogent evidence and mere plausible explanation is not enough.
It was held by Hon'ble Supreme Court of India in case titled as " Kumar Exports Vs. Sharma Carpets", {(2009) 2 SCC 513} that:-
" 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. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or Digitally signed by VIJAY VIJAY SHANKAR SHANKAR Date:
2024.01.29 15:52:54 +0530 CA No. 217/2023 Page No.33/39 Paras Nath Vs. Vijay Prakash Tirpathi liability to be discharged by him. 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 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.........."
It was held by Hon'ble Supreme Court of India in case titled as "Rangappa Vs. Sri Mohan", {(2010) 11 SCC 441} that:-
"Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since Digitally signed by VIJAY VIJAY SHANKAR SHANKAR Date:
2024.01.29 15:53:13 +0530 CA No. 217/2023 Page No.34/39 Paras Nath Vs. Vijay Prakash Tirpathi the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused/defendant cannot be expected to discharge an unduly high standard or proof. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of `preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own."
In view of the aforesaid discussion in preceding paras, it is clear that the appellant/accused had failed to rebut the presumption u/s. 118 and 139 N.I. Act. In the present case, the appellant/ accused had not cross-examined the complainant/ CW-1. The testimony of complainant/ CW-1 has gone un-rebutted, un-challenged and un-controverted. The appellant/ accused had Digitally signed by VIJAY VIJAY SHANKAR SHANKAR Date:
2024.01.29 15:53:24 +0530 CA No. 217/2023 Page No.35/39 Paras Nath Vs. Vijay Prakash Tirpathi failed to adduce any defence evidence in support of his contentions. The appellant/ accused had failed to raise any probable defence. In view of the same, the contention of counsel for the appellant in this regard is not tenable.
12. It is well settled law that the Appellate Court will usually not interfere with the exercise of discretion by the Trial Court and the Appellate Court will interfere only if it is found that the discretion has been exercised arbitrarily, capriciously and perversely. The first Appellate Court is required to examine the case of the appellant with reference to the grounds urged in the appeal.
It was held by Hon'ble Supreme Court of India in case titled as " Rajan Vs. State of MP", {(1999) 6 SCC 29} that:-
"Appellate Court's jurisdiction is co-extensive with that of the trial Court in the matter of assessment, appraisal and appreciation of the evidence and also to determine the disputed issues.".
13. The complainant in his complaint and in his Digitally signed by VIJAY VIJAY SHANKAR SHANKAR Date:
2024.01.29 15:53:34 +0530 CA No. 217/2023 Page No.36/39 Paras Nath Vs. Vijay Prakash Tirpathi testimony/ evidence by way of affidavit had categorically, elaborately and graphically described as to how offence u/s. 138 N.I. Act had been committed by the appellant/accused. The complainant/CW-1 had duly proved on record cheque bearing No.996547 dated 10/11/2010 Ex.CW-1/2, returning memo dated 10/03/2011 Ex.CW-1/3, legal notice dated 25/03/2011 Ex.CW-1/4, debit slips dated 12/11/2010 and 23/11/2010 Ex.CW-1/5, debit slips dated 11/01/2011 and 10/03/2011 Ex.CW-1/6 and courier receipt Ex.CW-1/6.
In the present case, the appellant/ accused had not cross-examined the complainant/ CW-1. The testimony of complainant/ CW-1 has gone un-rebutted, un-challenged and un- controverted. The appellant/ accused had failed to adduce any defence evidence in support of his contentions.
The appellant/ accused had failed to raise any probable defence. Appellant/accused had failed to rebut the presumption u/s. 118 and 139 N.I.Act. On the other hand, the case of the complainant was duly corroborated by his testimony and documentary evidence.
Digitally signed by VIJAY VIJAY SHANKAR SHANKAR Date:
2024.01.29 15:53:46 +0530 CA No. 217/2023 Page No.37/39 Paras Nath Vs. Vijay Prakash Tirpathi
14. All the points and contentions of both the parties were duly dealt with by the Ld. Trial Court. Ld. Trial Court rightly held that the complainant had successfully proved all essential ingredients of Section 138 N.I. Act. There is nothing on the record to show that the Ld. Trial Court has exercised its discretion arbitrarily, capriciously and perversely. There is no illegality, impropriety and infirmity in the impugned judgment and order on sentence passed by the Ld. Trial Court.
Sentence and compensation amount awarded by the Ld. Trial Court are not excessive and the same are reasonable and justified.
15. Applying priori and posteriori reasonings and the aforesaid case laws, this Court is held that there is no illegality, impropriety and infirmity in the impugned judgment and order on sentence passed by the Ld. Trial Court. Impugned judgment dated 21/02/2023 and order on sentence dated 29/05/2023 passed by the Ld. Trial Court are upheld. Accordingly, the present appeal of the appellant is dismissed. No order as to costs. Digitally signed by VIJAY VIJAY SHANKAR SHANKAR Date:
2024.01.29 15:53:57 +0530 CA No. 217/2023 Page No.38/39 Paras Nath Vs. Vijay Prakash Tirpathi Fine/ compensation amount not paid/ deposited by the appellant.
Appellant be taken into custody to serve the sentence awarded by the Ld. Trial Court. Benefit of Section 428 Cr.P.C. be given to the appellant.
Copy of this judgment supplied to the appellant free of cost. Trial Court Record be sent back alongwith the copy of this judgment. Appeal file be consigned to record room after due compliance.
Digitally signed by VIJAY VIJAY SHANKAR SHANKAR Date:
Announced in the open Court 2024.01.29 15:54:06 on 29/01/2024 +0530 (VIJAY SHANKAR) ASJ-04 (West) Tis Hazari Courts, Delhi CA No. 217/2023 Page No.39/39