Delhi District Court
Rama. S vs . Sunil Kumar P. V on 21 September, 2022
In the Court of Ms. Aditi Rao
Metropolitan Magistrate (NI Act)-03
South-East District, Saket Courts, New Delhi
1 Complainant case number 615334/2016
2 Name of the complainant Rama. S
w/o Late Shri Rajeev L
r/o Sree Shailam, Devi Apartment
Flat No. 6A, Plot No. 657/1,
Devly Near MTNL Officer,
New Delhi-110062.
3 Name and address of the Sunil Kumar P. V
accused r/o Gali No. 22/644, Ground
Floor, DDA Flat, Madangir,
New Delhi-110062.
4 Offence complained of Section 138 of the Negotiable
Instruments Act, 1881
5 Plea of the accused Pleaded not guilty and claimed
trial.
6 Final order Acquittal
7 Date of institution 16.09.2014
8 Date of reserving the 07.09.2022
judgment
9 Date of pronouncement 21.09.2022
-:JUDGEMENT:-
1.The present complaint under section 138 Negotiable Instruments Act, 1881 (herein referred to as NI Act) has been filed by Smt. Rama. S (herein referred to as the 'complainant') against Shri Sunil Kumar P.V (herein referred to as the 'accused').
2. Briefly stated, the case of the complainant is that on 15.02.2012, the accused had taken a friendly loan of Rs. 05 lacs Case No. 615334/2016 Rama. S vs. Sunil Kumar P. V Page No. 1 of 14 from the complainant on the assurance that the same would be repaid within one month. When the complainant demanded her money back, the accused did not repay the loan amount.
In discharge of this legal liability, the accused issued a cheque bearing no. 533273 dated 09.07.2014 in the sum of Rs. 3,50,000/- drawn on The Catholic Syrian Bank Ltd, Dohil House, New Delhi.
Upon presentation of the said cheque, it got dishonoured with the remarks 'funds insufficient' vide return memo dated 10.07.2014. The legal demand notice dated 23.07.2014 was duly sent by the complainant to the accused on 24.07.2014 by post. The accused failed to pay the cheque amount within the statutory period. Hence, the present complaint under Section 138 of Negotiable Instruments Act, 1881 (hereinafter referred to as 'NI Act') was filed.
3. On issuance of summons, the accused entered appearance in the present matter for the first time on 19.02.2015 and was admitted to bail. Notice u/s 251 Cr.P.C was served upon the accused on 16.12.2014, to which he pleaded not guilty and claimed trial. His plea of defence was also recorded. Thereafter, the accused was allowed to cross examine the complaint u/s 145(2) NI Act. After examining the complainant as CW-1, the complainant evidence was closed vide order dated 20.12.2019 and matter was fixed for recording of statement of the accused u/s 313 Cr.P.C and the same was recorded on 31.01.2020. The accused got examined himself as DW-1, and Ms. Suma Sunil as DW-2 and thereafter, DE was closed vide order dated Case No. 615334/2016 Rama. S vs. Sunil Kumar P. V Page No. 2 of 14 05.05.2022. Thereafter, matter was fixed for final arguments.
EVIDENCE:-
4. In order to support her case, the complainant had stepped into the witness box as CW-1 and tendered her evidence by way of affidavit which is Ex.CW1/8 into evidence wherein averments made in the complaint were reiterated. He also relied upon various documents such as:
(a) Cheque No. 533273 dated 09.07.2014 as Ex.CW1/1;
(b) Deposit Slip of the cheque no. 533273 as
Ex.CW1/2;
(c) Cheque Return Memo as Ex.CW1/3;
(d) Legal Notice as Ex.CW1/4;
(e) Postal Receipts as Ex.CW1/5;
(f) Tracking Report as Ex.CW1/6 (colly);
(g) Reply to legal notice as Ex.CW1/7; &
(h) Complaint u/s 138 NI Act as Ex.CW1/8.
The complainant as CW-1 was duly cross-examined at length by the Ld. Counsel for the accused. After examining the complainant as CW-1, the complainant evidence was closed vide order dated 20.12.2019 and matter was fixed for recording of statement of the accused u/s 313 Cr.P.C and the same was recorded on 31.01.2020. The accused got examined himself as DW-1, and Ms. Suma Sunil as DW-2 and thereafter, DE was closed vide order dated 05.05.2022.
5. Thereafter, the matter was fixed for final arguments.
6. Final arguments have been heard at length on behalf of both the parties.
Case No. 615334/2016Rama. S vs. Sunil Kumar P. V Page No. 3 of 14 APPLICABLE LAW:-
7. Before appreciating the facts of the case in detail for the purpose of decision, let relevant position of law be discussed.
Now, Section 138 Negotiable Instrument Act provides 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 provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall apply unless (a) the cheque has been presented to the bank within a period of six months (reduced to three months vide notification no. RBI/201112/251, DBOD AMLBCNo. 47/19.01.006- 2011/12,dated 04.11.2011) 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 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.
It is well settled position of law that to constitute an offence under S.138 N.I. Act, the following ingredients are required to be fulfilled: (1) drawing of the cheque by a person on an account maintained by him with a banker, for payment to another person from out of that account for discharge in Case No. 615334/2016 Rama. S vs. Sunil Kumar P. V Page No. 4 of 14 whole/part any debt or liability; (2) cheque has been presented to the bank within a period of six months (now three months) from the date on which it is drawn or within the period of its validity whichever is earlier; (3) returning the cheque unpaid by the drawee bank for want of sufficient funds to the credit of the drawer or any arrangement with the banker to pay the sum covered by the cheque, (4) giving notice in writing to the drawer of the cheque within 30 days of the receipt of information by the payee from the bank regarding the return of the cheque as unpaid demanding payment of the cheque amount, (5) failure of the drawer to make payment to the payee or the holder in due course of the cheque, of the amount covered by the cheque within 15 days of the receipt of the notice.
Being cumulative, it is only when all the aforementioned ingredients are satisfied that the person who had drawn the cheque can be deemed to have committed an offence under Section 138 of the N I Act.
The Act raises two presumptions in favour of the holder of the cheque i.e. Complainant in the present case; firstly, in regard to the passing of consideration as contained in Section 118 (a) therein and, secondly, a presumption under Section 139, that the holder of cheque receiving the same of the nature referred to in Section 138 for discharge, in whole or in part, of any debt or other liability.
Analysing all the concerned provisions of law and various pronouncements in this regard, the Hon'ble Apex Court in Basalingappa v. Mudibasappa, AIR 2019 SC 1983, noted at para 23 as follows [Bharat Barrel and Drum Manufacturing Company v. Amin Chand Pyarelal, (1999) 3 SCC 35; M.S. Narayana Menon alias Mani v. State of Kerala and another, (2006) 6 SCC 39; Krishna Janardhan Bhat v. Dattatraya G. Hegde, (2008) 4 SCC 54; Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513; Rangappa v. Sri Mohan, (2010) 11 SCC 441 referred]:
(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 defence. 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 defence. Inference of preponderance of probabilities Case No. 615334/2016 Rama. S vs. Sunil Kumar P. V Page No. 5 of 14 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 defence, Section 139 imposes an evidentiary burden and not a persuasive burden.
(v) It is not necessary for the accused to come in the witness box to support his defence.
To put in nutshell, the law regarding the presumption for the offence under Section 138 N.I. Act,is that the presumptions under Sections 118(a) and 139 have to be compulsorily raised as soon as execution of cheque by the accused is admitted or proved by the complainant and thereafter burden is shifted upon the accused to prove otherwise. These presumptions shall end only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability etc. The onus to prove the issuance of the cheque lies upon the complainant, and the same has to be proved beyond reasonable doubt, unless the accused admits the same. Once the issuance of cheque is established, either by admission or by positive evidence, the presumption under Section 139 of the Negotiable Instruments Act, 1881 arises. We can summarize the general principles in the following way:
Onus of proof: Section 139 of the Negotiable Instruments Act, 1881 states that it shall be presumed, unless the contrary is proved that the holder of a cheque received the cheque, of the nature referred to in Section 138, for the discharge, in whole or in part, of any debt or other liability. Therefore, here the onus shifts upon the accused to prove the nonexistence of debt or other liability. Section 139 of the N.I. Act uses the word "shall presume", which means that the presumption under Section 139 is rebuttable.
Standard of proof: The standard of proof required to rebut the presumption under Section 139 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 other liability, the onus shifts back to the complainant to prove by way of evidence, beyond reasonable doubt, that the cheque in question was issued by the accused in discharge, whole or in part, of any debt or other liability, and now the presumptions under Section 118 (a) and Section 139 will not come to the aid of the complainant. Mode of Proof: The accused may adduce direct evidence to prove that the cheque in question was not supported by consideration, and that there was no debt or liability to be discharged by him. However, the Court need not insist in every Case No. 615334/2016 Rama. S vs. Sunil Kumar P. V Page No. 6 of 14 case that the accused should prove the nonexistence of the 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 a bare denial of passing of 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 the consideration of which, the Court may either believe that the consideration and debt did not exist, or their nonexistence was so probable that a prudent man would, under circumstances of the case, act upon the plea that they did not exist.
As discussed above, from the legal provisions and the law laid down in various judgments, it can be safely gathered that it is for the accused to rebut the presumptions. He can do so by cross examining the complainant, leading defence evidence, thereby demolishing the case of the complainant. It is amply clear that the accused does not need to discharge his or her liability beyond the shadow of reasonable doubt. He just needs to create holes in the case set out by the complainant. Accused can say that the version brought forth by the complainant is inherently unbelievable and therefore the prosecution cannot stand. In this situation the accused has nothing to do except to point inherent inconsistency in the version of the complainant or the accused can give his version of the story and say that on the basis of his version the story of the complainant cannot be believed.
ARGUMENTS AND APPRECIATION OF EVIDENCE:-
8. Ld. Counsel for the complainant has argued that all the requirements of Section 138 NI Act have been met with in the present case and hence, the accused be convicted. I have heard the arguments and also gone through the record with due circumspection.
9. In the case at hand, Ld. Counsel for the complainant has submitted that the accused has not disputed the issuance of Case No. 615334/2016 Rama. S vs. Sunil Kumar P. V Page No. 7 of 14 cheque in the present case, thus, the presumptions u/s 118 (a) read with Section 139 of NI Act about the cheque in question having been issued for consideration and in discharge of legal liability should arise in favour of the complainant. On the contrary, Ld. Counsel for accused has submitted that the complainant has misued the cheque in question with malafide intention without sending any intimation before presenting the cheques. Therefore, presumption under S. 139 of NI Act, should not arise. The three-Judge Bench of hon'ble Supreme Court in Rangappa Vs. Sri Mohan, (2010) 11 SCC 441 has held that:
"where the fact of signature on the cheque is acknowledged, a presumption has to be raised that the cheque pertained to a legally enforceable debt or liability, however, this presumption is of a rebuttal nature and the onus is then on the accused to raise a probable defence."
10. In the present case, the accused has not denied his signatures on the cheque Ex.CW1/1. Thus, the factum of signatures on the cheque is not disputed and has been acknowledged.
11. It is pertinent to mention here that Sec. 139 only raises the presumption on fulfillment of its conditions that the cheque was issued for discharge of in whole or in part any debt or other liability but there is no presumption as to the existence of the debt or liabilty as such. In Rangappa (supra) it has been held that :
"Existence of legally recoverable debt is not a matter of presumption under Section 139 of the Act. It merely raises a presumption in favour of a holder of the cheque that the same Case No. 615334/2016 Rama. S vs. Sunil Kumar P. V Page No. 8 of 14 has been issued for discharge of any debt or other liability."
12. As regards legal notice, the receipt of the same has not been denied by the accused. It is stated by the accused in notice u/s 251 Cr.PC dated 16.12.2014 that the accused had received the legal notice. Hence, legal notice being undisputed was duly served upon the accused.
13. As regards to the fact of dishonour of the cheque in question, the original return memo Ex.CW1/3 filed by the complainant clearly shows that the cheque in question Ex.CW1/1 was dishonoured for the reason 'Funds Insufficient'. In the case at hand, neither any argument has been raised on behalf of the accused to dispute the dishonor of the cheque nor this fact has been denied at any stage of the matter. Thus, taking into account that dishonour of cheques is not disputed, this fact, also stands proved.
14. Thus, the presentation of the cheque in question, its dishonour and service of legal notice is not under question. Consequently, the complainant has successfully raised a presumption under Section 139 NI Act.
Accordingly, it is required to be presumed that the cheque in question was drawn for consideration and the holder of the cheque i.e., the complainant received the same in discharge of an existing debt. The onus, therefore, shifts on the accused to establish a probable defence so as to rebut such a presumption.
In the segment on legal framework, set out above, the legal Case No. 615334/2016 Rama. S vs. Sunil Kumar P. V Page No. 9 of 14 proposition with respect to the burden of proof upon the accused has already been discussed. Hence, it is now to be examined as to whether the accused brought any material on record or pointed out glaring discrepancies in the material produced by the Complainant for dislodging the presumption which meets the standard of preponderance of probabilities.
15. In the present matter, the main defence of the accused is that the accused had not taken any loan from the complainant. In fact, the wife of the accused had taken a friendly loan of Rs. 5,11,000/- from the complainant and the said loan was interest free. In pursuance of the above mentioned loan transaction, the accused and his wife together had issued 12 security cheques to the complainant for double of the loan amount i.e. Rs. 10,22,000/-. Accordingly to the accused, he had made the payment of whole of the loan amount by way of different installments and the last payment was made on 11.05.2014. Despite repayment of the loan amount, the complainant only returned 09 security cheques out of 12 cheques. It is the case of the accused that out of the 03 security cheques that were still lying with the complainant, the complainant had misused one of those cheques in the present complaint. Accordingly to the accused as the loan of Rs. 5,11,000/- has already been repaid, he does not owe any legal liability in favour of the complainant.
16. In order to bolster his version, the accused had brought the court his wife Ms. Suma Sunil as DW-2 who in her evidence dated 01.04.2022 has reiterated the version of the accused and Case No. 615334/2016 Rama. S vs. Sunil Kumar P. V Page No. 10 of 14 has stated "Rama.S is my friend. I borrowed Rs. 5,11,000/- from Rama. S for my export surplus business ... I issued security cheques for double of the loan amount. I issued total 12 cheques, out of which one cheque was from account of my husband." It is further stated by DW-2 that "I repaid the loan amount to Rama. S at different occasions. She returned my nine cheques but three cheques remained in her possession. When I demanded three cheques, she said that it was not traceable."
17. The accused had come before the court as DW-1 and in his cross-examination as DW-1 dated 01.04.2022 stated that the complainant is a friend of his wife and he has never visited the residence of the complainant. It is further stated that "I had not taken any loan from the complainant ... I had given 12 cheques, out of which one cheque is from my account and the remaining were given by my wife." The accused as DW-1, in relation to the repayment of the loan had stated that "I made all these payment in cash. I have not prepared or got signed any receipt against the payment made to the complainant as whenever I made the payment to the complainant, the complainant returned me my cheques." Testimony of both these witnesses remained unshaken even when questions were thrown on them during the time of their cross examination.
18. In order to support the above mentioned statement the accused in the present matter has brought before the court 09 security cheques that were returned by the complainant after the loan was repaid. The same have been Ex.DW1/1, Ex.DW1/2, Case No. 615334/2016 Rama. S vs. Sunil Kumar P. V Page No. 11 of 14 Ex.DW1/4, Ex.DW1/5, Ex. DW1/6, Ex.DW1/7, Ex.DW1/8, Ex.DW1/9 and Ex.DW1/10, all signed by the wife of the accused i.e. Ms. Suma Sunil.
In relation to the above exhibited cheques, it is submitted on behalf of the complainant that as each of the cheques amount to Rs. 50,000/- and it is stated by the accused that cheques for double amount of loan were given i.e. Rs. 10,22,000/-; then why 12 cheques were handed over when double the amount of the loan could only be recovered in 10 cheques.
Perusal of these cheques reveals that all the cheques are dated starting from year 2012 to 2014 which is the time around the year in which it is stated by the accused that his wife had taken the loan. Further, these cheques also contains signatures of Ms. Suma Sunil which again corroborates with the statement of DW-1 & DW-2 that all the cheques were given from account of Ms. Suma Sunil except the one which forms part of the present matter which is from the account of the accused. Further, these cheques are pertaining to different amount.
19. In addition, in order to strengthen his version, the accused has placed on record copy of reply to the legal notice dated 19.08.2014 which is Ex.DW1/11 (colly) in which the whole version of the accused as stated by him throughout his trial has been reiterated. This reply also contains the details of the repayment of loan of Rs. 5,11,000/- by way of various installments. This document also mentions that three cheques still remains to be returned on behalf of the complainant even after Case No. 615334/2016 Rama. S vs. Sunil Kumar P. V Page No. 12 of 14 whole of the payment has been made by the accused to the complainant. By way of this reply to the legal notice, the accused has denied his legal liability on the ground that whole of the loan amount has been repaid, the last installment being paid on 11.05.2014. It is important to note that the accused even during the time of his evidence as DW-1 had mentioned the date of payment of last installment as 11.05.2014.
20. In order to further bolster his defence, the accused has placed on record the copy of a police complaint which is Ex.DW1/14 (colly) which is dated 16.12.2014. Perusal of this document reveals that by way of this complaint, the accused has not only consistently reiterated his version but has also mentioned in his complaint that even after repayment of the loan amount, the complainant has kept with herself few cheques out of which cheque bearing no. 533273 (which is mentioned in the complaint alongwith other cheques) forms part of the present complaint.
On the contrary, Ld. Counsel appearing on behalf of the complainant has stated that the police complaint was only filed once the present complaint had been instituted against the accused.
In the opinion of this court, the delay in filing the complaint by the accused will not hamper the weight of this piece of evidence which it has on this case especially where in order to prove his side of the story the accused has placed on record other documentary proofs.
Case No. 615334/2016Rama. S vs. Sunil Kumar P. V Page No. 13 of 14
21. It is a settled position that accused has to rebut the presumption raised under Section 139 and the standard of proof of which is 'preponderance of probabilities'. It is for the accused to raise a probable defence which creates a doubt on the version of the complainant. The accused, in the present matter has been successful in creating a doubt on the amount of legal liability which the accused owed in favour of the complainant. The consistent defences on the part of the accused throws a probable doubt on the version put forth by the complainant. The complainant on the other hand has failed to prove her case beyond reasonable doubt.
CONCLUSION:-
22. The court finds that cumulatively, the accused has been able to rebut the presumption raised against him under section 139 NI Act.
DECISION:-
23. Resultantly, the accused is acquitted of the alleged offence under section 138 of NI act.
Announced in the open court today on 21.09.2022. This judgment contains 14 pages all are signed by me. A copy of this judgment be placed on the official website of the District Court.
(ADITI RAO) Metropolitan Magistrate-03 (NI Act) South-East, Saket Courts, New Delhi.
Case No. 615334/2016Rama. S vs. Sunil Kumar P. V Page No. 14 of 14