Delhi District Court
Hon'Ble Supreme Court In Case Titled M S ... vs . State Of on 23 June, 2011
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IN THE COURT OF SH. ARVIND BANSAL
METROPOLITAN MAGISTRATE
NEW DELHI DISTRICT: NEW DELHI
Shamsher Singh son of Shri Nanak Singh.
Resident of 11/1, Gurdwara Road, (Jangpura Road), Bhogal,
New Delhi110014 .....Complainant
Versus
1. Shri Rajeev Nayer son of Late Shri N N Nayer.
Resident of B129, Surya Nagar, Gaziabad, UP.
.....Accused
(a) Complaint Case No. 1254/1(original CC No.11817/1/06)
(b) Date of Institution: 25.09.2006
(c) Offence: Offence U/s 138 N I Act
(d) Plea of accused Pleaded not guilty and claimed trial.
(e) Argument heard and
reserve for order: 19.5.2011
(f) Final Order: Acquitted
(j) Date of Judgment: 23.6.2011
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BRIEF REASONS FOR JUDGMENT:
FACTS OF THE CASE:
1. The present is a complaint under section 138 of Negotiable Instruments Act 1881 (hereinafter referred to as 'the Act') filed by the complainant on the averments that complainant and accused were having good relationship and therefore, the accused approached the complainant in the month of June 2004 and requested him for a personal loan of Rs. 1,50,000/. It is averred that the accused took cash personal loan of Rs. 1,50,000/ from the complainant for his personal requirements and assured to pay back the same within two years.
2. It is averred that to discharge his legal liability, the accused issued a cheque bearing no. 304857 dated 7.8.2006 for a sum of Rs. 1,50,000/ drawn on SBI, Dilshad Garden, Delhi but it got dishonored on presentation vide cheque return memo dated 9.8.2006.
3. It is averred that complainant got a legal demand notice dated 26.8.2006 issued to accused through registered AD/UPC/Courier on 29.8.2006 which is stated to have been duly served. It is also averred that the accused sent a false reply to the same. The accused allegedly did not make the payment of the cheque amount despite service of legal demand notice and hence the present complaint. It is averred that complaint has been filed within period of limitation.
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PROCEEDINGS BEFORE THE COURT
4. The accused was summoned vide order dated 3.10.2006 for the
offence u/s 138 N I Act in respect of the aforesaid cheque. Thereafter, the accused person appeared before the Court and was admitted to bail in the present case. Notice u/s 251 Cr.P.C for the offence u/s 138 N I Act was served upon the accused on 2.12.2006 to which he pleaded not guilty and claimed trial.
5. Before the complainant evidence could be adduced, the complainant unfortunately expired. Thereafter, an application to substitute the LR of the complainant was filed on 24.5.2007 which was allowed on 30.7.2008. The son of complainant was substituted as LR and the affidavit of post summoning evidence was filed in his name. The complainant in support of his case led his evidence by way of affidavit which is Exhibit C1 reiterating the averments made in the complaint. The dishonored cheque is Exhibit CW1/A, the memo is Exhibit CW1/B and debit advice is Exhibit CW1/C, the legal demand notice is Exhibit CW1/D, the postal receipt is Exhibit CW1/E, UPC is Exhibit CW1/F, Courier receipts are Exhibit CW1/G and H and the AD card is Exhibit CW1/I. CW1 was duly crossexamined by the counsel for accused.
6. After complainant evidence was led, the statement of the accused CC NO. 1254/1 (Original CC No. 11817/1/06 1 to 3 4 was recorded u/s 313 Cr.P.C on 18.1.2008 wherein all incriminating material existing on record including exhibited documents were put to the accused to which the stand of the accused was of general denial. He stated that he had not given any cheque to the complainant. He further stated that he was running a partnership firm with the complainant/LR for last about ten years and during the existence of partnership, the complainant removed my signed cheques and misutilised the same in the present case. He stated that he had received a legal demand notice but he was not under any liability to pay the cheque amount. He expressed his willingness to lead defence evidence.
7. The accused sought the permission of Court U/s 315 Cr.P.C to appear as defence witness which was allowed. Accused appeared as DW1 and tendered his evidence by way of affidavit Exhibit D1. He relied upon documents i.e., copy of a police complaint dated 4.9.2006 and 6.9.2006 Exhibit DW1/1 and his own statement of account Exhibit DW1/2. He was duly crossexamined by the counsel for complainant.
8. Accused also summoned two more witnesses to defend himself. Mr Kishore Kumar, Computer Operator, Bank of Baroda, Bhogal, New Delhi appeared as DW2 with summoned documents i.e., the true copy of account opening form of HAR Builders which is Exhibit DW2/A. Mr. Deepak Ahuja, LDC with the office of Registrar of Firms appeared as DW3 with the summoned documents. The registration certificate form A and B of Registrar of Firms are Exhibit DW3/A to C. The witnesses were CC NO. 1254/1 (Original CC No. 11817/1/06 1 to 4 5 not cross examined despite opportunity.
9. After the examination of DW1, DW2 and DW3, the defence evidence was closed on the request of counsel for accused. Thereafter, final arguments were heard on behalf of both the parties at length. I have carefully gone through the material placed on record by both the parties and the case laws relied upon by both of them.
APPRECIATION OF EVIDENCE:
10. For proving an offence u/s 138 of N I Act, following ingredients are required to be fulfilled :
1) That there is a legally enforceable debt or liability,
2) The drawer of the cheque issued the cheque to discharge in part or whole the said legally enforceable debt or liability,
3) The cheque so issued was returned unpaid by the banker of the drawer,
4) Legal demand notice was served upon the accused and the accused failed to make the payment within 15 days of the receipt of said notice.
INGREDIENTS NO. 1 & 2.
11. Before deciding ingredient no. 1 and 2, it is necessary here to reproduce section 118 (a) and section 139 of the Act which deal with the law particularly necessary to decide ingredient no. 1 and 2. The section CC NO. 1254/1 (Original CC No. 11817/1/06 1 to 5 6 118(a) reads as:
"that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration".
And Section 139 reads as under:
"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, or any debt or other liability".
12. The said two sections have been elaborately discussed, and interpreted by the Hon'ble Supreme Court in a series of judgments. The Hon'ble Supreme Court in case titled M S Narayana Menon Vs. State of Kerala AIR 2006 SC 3366 made the following observations:
"32. Applying the definitions of 'proved' and 'disproved' to the principle behind Section 118 (a) of the Act, the Court shall presume a negotiable instrument to be for consideration unless and until after considering the matter before it, it either believes that the consideration does not exist or considers the nonexistence of the consideration so probable that a prudent matter ought, CC NO. 1254/1 (Original CC No. 11817/1/06 1 to 6 7 under the circumstances of the particular case, to act upon the supposition that the consideration does not exist. For rebutting such presumption, what is needed is to raise a probable defence. Even for the said purpose , the evidence adduced on behalf of the complainant could be relied upon."
13. The following observations of the Hon'ble Supreme Court in Hiten P Dalal Vs. Bratindra nath Banerjee (2001) 6 SCC 16, at this stage are also important;
"..because both Sections 138 and 139 require the Court 'shall presume' the liability of the drawer of the cheques for the amounts for which the cheques are drawn... it is obligatory on the Court to raise this presumption in every case where the factual basis for raising the presumption has been established. It introduces an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the accused".
But the standard of proof to discharge the burden shifted on accused to rebut the presumption raised by the Court U/s 139 is not the same as upon the prosecution to prove the case.
14. The complainant through his complaint, the affidavit, dishonored cheuqe and the return memo has drawn a factual basis for raising a presumption U/s 139 of the Act against the accused that the impugned CC NO. 1254/1 (Original CC No. 11817/1/06 1 to 7 8 cheque was issued for discharge of a legal debt/liability.
15. It is the case of the complainant that the accused approached him for a personal/friendly loan of Rs. 1,50,000/ which was accordingly advanced and to discharge his legal debt, the accused issued the impugned cheque which got dishonored on presentation and hence this complaint.
16. To rebut the presumption of law raised against him, the accused cross examined the LR of the complainant at length, got his statement U/s 313 Cr.P.C recorded and adduced his defence evidence through three different defence witnesses.
17. The defence of accused in the given fact situation is multifold. First, that son of complainant/LR malafidly stole some of his cheques including the impugned cheque taking advantage of their close relationship as partners of the partnership firm named M/s. HAR Builders; second, that he had filed a complaint against the complainant and his son in PS Shalimar Garden, Sahibabad , Gaziabad regarding the misuse of the impugned cheque, third that the accused neither requested the complainant for any friendly/personal loan nor any loan was ever advanced and, therefore, he has no liability to pay any amount to the complainant. The accused has elaborated the aforesaid defences through his defence evidence.
18. To rebut the case of the complainant that the impugned cheque has been issued to discharge the legal liability of refund of the personal loan of Rs. 1,50,000/, it is the contention and defence of the accused that the son CC NO. 1254/1 (Original CC No. 11817/1/06 1 to 8 9 of the complainant had malafidely and fraudulently stolen some of his signed and unsigned cheques including the impugned one by taking advantage of being closely related as a partner for a number of years. To establish his defence, the counsel for accused has crossexamined the LR of the complainant on this aspect. The LR of the complainant denied as wrong the suggestion that he had misused the individual cheques of the accused fraudulently. The LR of the complainant deposed that the accused had delivered the impugned cheque alongwith one another cheque to his wife Smt. Uttamjeet Kaur and the columns of name and amount in words columns were blank. He further deposed that the impugned cheque was delivered by accused to his wife one week prior to the birthday of his son, i.e., around 4th or 5th of August 2006. He denied as wrong the suggestion that the accused had not given the impugned cheque to the wife of the complainant. He also denied as wrong the suggestion that cheques were misused by him in the name of his father and were without consideration. He also denied as wrong the suggestion that he had stolen the impugned cheque of the accused because an amount of Rs. 2025 lacs was due towards him on the accounts of their partnership firm. The perusal of whole crossexamination of CW1 reveals that the defence of the accused that the impugned cheque was stolen by the complainant does not get established.
19. To further establish and strengthen his defence of theft of cheques, the accused has relied upon a document alleged to be a complaint written CC NO. 1254/1 (Original CC No. 11817/1/06 1 to 9 10 to PS Shalimar Garden, Sahibabad which is Exhibit DW1/1. The perusal of the said document reveals that it is dated 4.9.2006 and 6.9.2006 and the same was posted to the concerned authority on 8.9.2006. Perusal of the record further reveals that the impugned cheque got dishonored vide cheque return memo dated 9.8.2006 and legal demand notice was sent on 29.8.2006. The aforesaid complaint Exhibit DW1/1 was a written and sent to the concerned authority after receipt of the legal demand notice of the complainant. The contents of Exhibit DW1/1 also establish this fact. It is the argument of the counsel for accused that the accused had no knowledge of the fact that his cheque has been stolen and misused by the complainant before he received the legal demand notice from the complainant. It was, therefore, the immediate reaction of the accused to file a police complaint as a prudent man.
In the thoughtful opinion of the Court, the document Exhibit DW1/1 although does not establish the defence of the accused that the impugned cheque was actually stolen and, thereafter used by the complainant but merely points towards the prudence of the accused, if any, in writing and sending the complaint to the concerned authorities.
20. The accused has further elaborated his defence of misuse of the impugned cheque, and the defence that he had no knowledge of the fact that his cheque has been stolen before he received the legal demand notice by relying upon his own statement of account Exhibit DW1/2. The said statement of account is for the period from 31.03.2005 to 31.8.2007. It is CC NO. 1254/1 (Original CC No. 11817/1/06 1 to 10 11 the argument of the counsel for accused that all the other cheques of the accused from the same cheque book had got encashed during the aforesaid period and the impugned cheque which was also a part of the cheques of the same series went missing without the knowledge of the accused.
Perusal of the statement of account of the accused reveals that most of the cheques of the same series as that of the impugned cheque got honored during 8.4.2005 to 7.8.2006.
21. It is the case of the complainant that the impugned cheque was issued by the accused in August 2006 to repay the personal loan of Rs. 1,50,000/ Per contra, it is the defence of the accused that the complainant kept the impugned cheque in his possession for about one year and used it thereafter. CW1 in his crossexamination has denied as wrong the suggestion that he kept the impugned cheque unfilled for about one year and thereafter misuse the same in the name of his father.
In the considered opinion of this Court, there appears to be a reasonable probability in the argument of the counsel for accused. It is particularly so because the other cheques of the same series as that of the impugned cheque, for example 304851 got encashed on 8.4.2005, 304855 got encashed on 21.4.2005, 304856 got encashed on 1.6.2005 and so on. A reasonable or a prudent man cannot be expected to keep one cheque of an initial number preserved for one long year to issue it to somebody after all the other cheques get exhausted. Therefore, there is a probability that the impugned cheque might have come to the possession of the CC NO. 1254/1 (Original CC No. 11817/1/06 1 to 11 12 complainant much prior to the month and date as contrarily claimed by the complainant in his complaint.
22. It is the case of the complainant that the impugned cheque was issued by the accused for discharge of his legal liability arising out of the advancement of personal loan of Rs. 1,50,000/. It is the case of the complainant that the loan was advanced in the month of June 2004 and the accused assured the complainant to pay back the same within two years. CW1 in his crossexamination denied as wrong the suggestion that no loan was given by his father to the accused at any point of time.
But, on being crossexamined by the counsel for accused on the source of amount allegedly advanced by the father of CW1, CW1 deposed that he cannot say whether his father had shown the amount of loan of Rs. 1,50,000/ in his income tax returns. He further stated that he cannot say from where his deceased father had taken or withdrawn the alleged amount to pay to the complainant.
The answers of CW1 appears to be protective of the claim of his father on one side and full of deficient knowledge about the actual occurrence and details thereof.
23. Further, the counsel for accused has challenged the competency of CW1 to depose on behalf of his father. CW1 denied as wrong the suggestion that he was not competent to depose on behalf of his father. CW1 stated that his father was an income tax payee but he reverted from his statement at once, and stated again that he cannot tell this fact CC NO. 1254/1 (Original CC No. 11817/1/06 1 to 12 13 positively and can state this fact positively and can state the same only after verifying the same from CA which he never did.
In his affidavit on oath, CW1 stated that he being son of the complainant is well conversant with the facts of the case. In the considered opinion of this Court, the statement appears to be doubtful in the wake of kind of answers given by him in the cross examination. Therefore, competency of CW1 as a representative to depose on behalf of complainant remains doubtful and so the version of complainant.
Also, the Court seriously doubts the personal knowledge of the son of complainant i.e., CW1 about the transaction in present case in general and about income / income tax status of his father in particular and thereby the version narrated in crossexamination.
24. The complainant has relied upon the judgment of Hon'ble Supreme Court in Rangappa Vs. Sri Mohan, 2010 AIAR Cri 584 wherein the Hon'ble Supreme Court has laid down a dual proposition on existence presumption of issuance of cheque in discharge of legal liability as also the existence of such legal debt/liability.
In the opinion of that Court, the above presumptions stands rebutted by the existence of stark contradictions and inherent infirmities in the complainant's version. Firstly, claim of the complainant rests upon the deposition by his son as his legal representative testifying as CW1. CW1 though claiming and swearing to be aware of facts and circumstances of the case has hardly been able to disclose the source of loan amount CC NO. 1254/1 (Original CC No. 11817/1/06 1 to 13 14 allegedly arranged by his father and advanced to the accused, nor has he been able to tell whether his father was an income tax assessee or whether the loan amount was reflected in his ITR.
25. Secondly, going by the averments of the complainant that the loan was advanced to the accused in June 2004 for two years makes it obligatory for the complainant to disclose the nature of said loan or if the same was advanced on interest, if any. As stated by the complainant, the loan was allegedly a friendly loan. The complainant has not proved the friendly relation between himself and the accused. In the opinion of this Court, the relation between accused and the complainant as appears from the record was never so proximate for the complainant to have advanced a sum of Rs. 1.5 lacs for two years without deciding upon a rate of interest. Complainant has also not stated anywhere in the complaint any reason why the accused borrowed money from him or whether accused ever told him the reason for need of money.
It is moreso important when the same accused is the partner of son of complainant and could have very easily borrowed the sum of Rs. 1.5 lac from his partner or from partnership firm.
26. Thirdly, it has been stated by CW1 that the accused had handed over two cheques, one for settlement of accounts of their partnership firm which was allegedly dissolved in June 2006 and the other cheque in discharge of his liability against the loan taken from father of CW1. As per CW1 both these cheques had been handed over to the wife of CW1.
CC NO. 1254/1 (Original CC No. 11817/1/06 1 to 14 15 If CW1 is to be believed, then the only witness to handing over of cheques by the accused. The accused has denied handing over both the alleged cheuqes as well as the handing over at a time as claimed by CW1. It is a settled law that when the accused raises a doubt in claim of complainant on probabilities, the burden of proof shifts to complainant to prove its case beyond reasonable doubt. In these circumstances, the wife of CW1 as complainant witness by the complainant/ LR to prove the handing over of cheques at a particular time gives a serious blow to the version of complainant. At this stage, the following observations of Hon'ble Supreme Court in C Antony Vs. K G Ragavan Nair 2002 (4) RC (Cri) 750 are imperative:
"... it is to be seen that the trial Court came to conclusion that non examination of advocate Vijay Kumar was fatal to the case of complainant/respondent because it is the case of respondent that he came to know the appellant through said Vijay Kumar and amount was paid in the office of said Vijay Kumar...we also think this was a very necessary piece of evidence to establish the fact that respondent had in fact advanced a sum..."
Similarly, the examination of wife of CW1 was a necessary evidence which the complainant chose not to lead which therefore, affects the case of the complainant.
27. Further, during his cross examination CW1 stated that at the time CC NO. 1254/1 (Original CC No. 11817/1/06 1 to 15 16 of handing over the two cheques, both he cheques were signed by the accused and filing in the amount in figures but the space for payee's name as well as amount in words were left blank. Accused has denied this averment of CW1. In the opinion of this Court, no reasonable or prudent man can be expected to have issued a cheque to the payee by filling in the amount in figure but not in words and to issue and hand over the same to a person without filling in his name when it is purportedly to be issued to a particular person.
In the wake of it, the argument of the counsel for accused that the complainant has wrongly misappropriated the cheques kept in the office of accused, seems to be more justified and probable; particularly when the complainant and the accused shared a fiduciary relationship with each other.
28. Thus, the whole aforesaid discussion raises substantial doubts in the mind of the Court on the case of the complainant to have advanced a friendly loan of Rs. 1.5 lacs to the accused and the consequent issuance of impugned cheque by the accused to discharge his legal liability /debt. In view thereof, Ingredient no.1 and 2 stand decided in the favour of accused and against the complainant.
INGREDIENT NO. 3 AND 4:
29. As regard the return of cheque returned unpaid for the reasons signatures differs is well established from the cheque return memo placed on record Exhibit CW1/B. Section 146 of the Act reads as under:
CC NO. 1254/1 (Original CC No. 11817/1/06 1 to 16 17 "The Court shall in respect of every proceeding under this chapter, on production of bank's slip or memo having thereupon the official mark denoting that the cheque has been dishonored, presume fact of dishonor of such cheque unless and until such fact is disproved".
The return of the cheque unpaid on account of signatures differs has not been disputed by the accused because it is his allegation against the complainant that he has forged his signatures on the impugned cheque. The statement of account of the accused available on record reveals that the funds in his account on the date of dishonor were also insufficient and in view thereof, the dishonor of the cheque stands proved.
30. The receipt of legal notice by the accused is also not in dispute. The nonpayment of the cheque amount thereafter within 15 days of the receipt of the legal notice is also not in dispute. Therefore, ingredients no. 3 and 4 stand decided in the favour of the complainant and against the accused.
STANDARD OF PROOF
31. It is the basic principle of criminal law that in order to hold an accused guilty of an offence, all the ingredients of that offence should be established against him beyond reasonable doubt and the burden upon accused is not so onerous and the standard expected of him is that of preponderance of probabilities by moving cogent and viable evidence.
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The observations of the hon'ble Supreme Case in the case Krishna
Janardhan Bhat Vs. Dutta Traya G. Hegde (2008) 4 SCC 54 are
important:
" the standard of proof for accused is preponderance of probabilities. The standard of proof on the part of an accused and that of the prosecution in a criminal case is different. Whereas prosecution must prove the guilt of an accused beyond all unreasonable doubt, the standard of proof as to prove a defence on part of the accused is Preponderance of probabilities.
Inference of preponderance of probabilities can be drawn not only from the materials brought on records by the parties but also by reference to circumstances upon which he relies".
This settled position finds mention in the Rangappa Vs. Sri Mohan 2010 AIAR (CRI) 584 in para 14 in the following words:
"...it is a settled position that when an accused has to rebut the presumption u/s 139, the standard of doing so is that of preponderance of probabilities...".
Similar observations have been made by the Hon'ble Supreme Court in K Prakashan Vs. P K Surenderan (2008) 1 SCC 258, Kamal S Vs. CC NO. 1254/1 (Original CC No. 11817/1/06 1 to 18 19 Vidhyadharan M J (2007) 5 SCC 264 and M S Narayana Menon Vs. State of Kerala AIR 2006 SC 3366.
FINAL ORDER:
32. In the thoughtful opinion of this Court, the overall circumstances of the case and the above discussion into law and facts goes on to conclusion that the case of complainant has material deficiencies and it falls short of the required standard of proof of beyond reasonable doubt. At the same time, the accused has raised a number of doubts in the mind of Court on the standard of preponderance of probabilities. Hence, the accused is acquitted.
Announced in Open Court On 23rd June, 2011 (ARVIND BANSAL) METROPOLITAN MAGISTRATE:3 PATIALA HOUSE COURTS, NEW DELHI.
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