Delhi District Court
Jugesh Sehgal vs . Shamsher Singh Gogi1 The Relevant ... on 4 June, 2013
IN THE COURT OF SH. VINOOD KUMAR MEENA;CIVIL
JUDGE03, NEW DELHI DISTRICT, PATIALA HOUSE
COURTS, NEW DELHI
Unique ID No. 02403R0765822005
CC No. 229/12
M/S. Shanlo Chits Pvt. Ltd.
K. 83B, Sheikh Sarai,
PhaseII, New Delhi
Through its manager Sh. Prem Sharma. ....Complainant
Versus
1. Sandeep Bhalla,
c/o Sudarshan Electronics,
T456/M6, Chirag Delhi,
New Delhi.
2. Sh. Arun Kumar,
255, Sector,III, Type 3,
Sadiq Nagar, New Delhi.
3. Sh. Madan Pal Singh,
s/o Sh. Mahabir Singh,
Shahid Bhagat Singh College,
Sheikh Sarai, New Delhi. ... Accused
OFFENCE COMPLAINED OF : Section 138 of
OR PROVED Negotiable Instrument Act.
PLEA OF ACCUSED : Pleaded not guilty
DATE OF INSTITUTION : 02.07.2005
DATE OF RESERVING ORDER : 23.05.2013
FINAL ORDER :Acquitted
DATE OF PRONOUNCEMENT : 04.06.2013
JUDGMENT
1. The present complaint is filed by complainant Sh. Prem Pal Sharma Manager of complainant company M/s Shanlo Chits Pvt. Ltd.
CC No. 229/12 Shanlo Chit Pvt Ltd. v Sandeep Bhalla 1 of pages 17 And Sh. S. K. Sharma director of the complainant company against Sh. Sandeep Bhalla , Sh. Arun Kumar and Sh. Madan Pal singh Singh . (henceforth referred as'accused persons') under Section 138 of Negotiable Instrument Act,1881 (hereinafter referred to as "The Act").
2. It is complainant's case that complainant company is running the business of Chit fund which is duly registered with the Registrar of chit fund under the provisions of Madras chit fund Act and extends to NCT of Delhi. Accused no.1 Sh. Sandeep Bhalla is the member of Ticket no.8 of Group/chit No.SCPL 12 for the Value of Rs. 2,10,000/ for a period of 30 months and accused has to pay Rs. 7000/ per month to complainant group/chit for 30 months or till the chit is over. When the impugned chit was auctioned and the accused became the prized subscriber and accordingly prized amount of the chit was paid to the accused. Further, at the time of receiving of amount, there was a balance of Rs. 1,40,000/ and accused no.2 Arun Kumar and accused no. 3 Madan Pal Singh stood guarantor for repayment of the balance amount and all the accused persons have executed the various document for repayment of balance amount in favour of complainant. The accused failed in making the payment of installment regularly. Further on demand of balance amount of chit from the accused by complainant, the accused no.1 Sandeep Bhalla had issued one cheque bearing no. 816103 dated 26.04.2005 for an amount of Rs. 15,500/ as part payment towards the discharge of his liability with request not to file any litigation against accused no.2 and 3. On presentation, the cheque got dishonoured and was returned unpaid by the banker of the accused on the ground "Payment stopped". Thereafter legal notice dated 25.05.2005 was served upon the accused. However, despite service of legal notice, accused failed to make the payment of cheque amount as well as balance amount of chit within the stipulated period. At the outset, Court deem it fit to mention here though the complainant has named three accused in the complaint yet, cognizance has only been taken against accused no.1 i.e Sh. Sandeep Bhalla. It is also pertinent to mention here that no allegation against accused no.2 and 3 has been made in the complaint which make them liable u/s 141 N. I. Act.
BAIL BONDS AND NOTICE
3. Court took cognizance of the offence under Section138 of The Act and summoned the accused.
CC No. 229/12 Shanlo Chit Pvt Ltd. v Sandeep Bhalla 2 of pages 17
4. Accused appeared pursuant to the process issued by the Court. Notice under Section 251 Cr P C was read and explained to the accused Sandeep Bhalla to which he pleaded not guilty and claimed trial. Consequently, the case was listed for post notice complainant's evidence.
SUBSTANCE OF EVIDENCE
5. In post notice evidence, AR for complainant Sh. Prem Kumar examined himself as sole witness CW1. Hesubstantiated the averments made in the complaint and proved the following documents vide Ex. CW1/1 to Ex CW1/13:
i. His affidavit of evidence as Ex CW1/A. ii. Board resolution vide Ex CW1/1. iii. Chit agreement vide Ex. CW1/2. iv. Pronote vide Ex. CW1/3.
v. Statement of account for payment by accused vide Ex CW1/4. vi. Original impugned cheque vide Ex. CW1/5. vii. Return Memo vide Ex CW1/6.
viii. Legal demand notice vide Ex CW1/7. ix. Postal receipt vide Ex. CW1/8, 9 and 10.
x. UPC slip vide Ex. CW1/11.
xi. AD cards vide Ex. CW1/12 and Ex. CW1/13.
In his cross examination CW1 Prem Kumar stated that he did not know how many cheques were given to him by the accused as security. He personally had taken the impugned cheque from the accused Sandeep Bhalla. He further stated that the impugned cheque was filled up by him in the presence of accused and not by the accused Sandeep Bhalla. The chit was over in the month of October 2003 and the balance amount is mentioned in the statement of accounts. He also deposed that he had sent the intimation of balance to accused but has not placed any document on records regarding the same. He could not tell whether any other chit was given to accused Sandeep Bhalla after 2003. CW1 denied that the impugned cheque was given as a security. He further stated that one legal notice dated 28.04.2005 was also sent by the accused to him, however, the same was after the presentation of the impugned cheque. He denied that the impugned cheque was presented without consent of the accused. He CC No. 229/12 Shanlo Chit Pvt Ltd. v Sandeep Bhalla 3 of pages 17 further stated that complainant company take only two government employees as witnesses/guarantors and deposit the copy of their pay slip and identity card with it. Complainant company also take the signatures of witnesses on the surety set which includes the demand promissory note.
Vide order dated 07.03.2011, complainant's evidence was closed and matter was listed for examination of accused under Section 313 Cr P C. DEFENCE OF ACCUSED
6. All incriminating circumstances were put to the accused and his statement was recorded under Section 313 Cr P C. Accused refuted the complainant's claims and stated that the complainant has taken 12 blank signed cheques from him at the time of auction of the impugned chit and the day he became a prized subscriber,he had paid all the installment of the chit. The complainant did not provide him the statement of account with the complainant company. The complainant has malafidely presented the impugned cheque. Nothing was due against him towards the complainant, therefore, he had stopped the payment of the impugned cheque. Accused further stated that he has also issued a legal notice to the complainant to return his blank security cheques which was not replied by the complainant. He has not received any legal demand notice from the complainant. He further told that he had no liability against the complainant. Accused opted to lead defence evidence. Accordingly, the matter was listed for defence evidence.
Accused has examined himself in his defence as DW1 and stated that Mr. Prem Kumar Sharma is the manager in M/s Shanlo Chits Funds Ltd. He has started the chit in the year 2002 and took the price money in the year 2003. At the time of awarding the price money Mr. Prem Kumar Sharma has taken 1520 blank cheques ( only signed) as a security from him. He has also filed statement of cheques issued by Bank vide Ex. DW1/A to DW1/C. He further deposed that he had paid all the installments of the chit and nothing remained to be paid by him. He has received three intimation letter from M/s Shanlo Chits Funds Ltd. as per which only Rs. 6,900/ was the total due amount against the SCPL12/ticket no.8 vide Ex. DW1/D to Ex. DW1/F. He further stated that he had not received any intimation letter regarding due payment in the said chit in the year 2004 and 2005. However, he CC No. 229/12 Shanlo Chit Pvt Ltd. v Sandeep Bhalla 4 of pages 17 has received a phone call from his bank i.e Canara Bank, Triveni, PhII regarding the payment of a cheque of Rs. 15,500/ for which he had stopped the payment in the bank as the said cheque was given as a security in the year 2003. The cheque was deposited in the bank for encashment without his consent or intimation. He had sent a legal notice dated 28.04.2005 to Shanlo Chit Funds for returning of security cheques which were given to them in the year 2003 as a token of security vide Mark A. Thereafter, he had not got any response from the Shanlo Chit Funds except the proposal for starting the new chits. He had not received any legal notice from the Shanlo chit Funds regarding the dishonour of cheque. The ledger statement filed by complainant only pertains to installment no. 21. The complainant till date has not disclosed the actual amount which is due according to them against him and how the amount of Rs. 15,500/ is due against him. He further stated that approximately 1520 cheques are still lying with shanlo chits funds as a token of security. He further deposed that he was a regular visitor to the office of chit fund company as he was having other chits for which he had entered into agreements with the complainant company apart from the present chit.
He further stated that the impugned chit was for a total sum of Rs. 2,10,000/ for a period of 30 months. The said chit was priced to him and he had received a sum more than Rs. 1 Lakh which was the price amount for the particular month. He further voluntarily stated that after receipt of the prices amount the complainant had taken 1220 cheque, exact number he did not remember. The impugned cheques were blank, duly signed by him. He had paid all the sum pertaining to the installments to the chit, however, he could not recall the date month and year of the last payment of the installment to the cheque. He further deposed that he had paid all the 30 installment to the complainant. However, he had not have any receipt regarding 30 installments paid by him. Vol. The complainant company never used to issue any receipt for the amount taken by the company. Nor he had demanded any receipt for the installment paid by him as he was having friendly relations with Sh. Prem Kumar Sharma ( Manager) and Sh. Shiv Kumar Sharma ( director).
He had not entered into any agreement with the complainant company during the subsistence of the present chit for another chit of Rs. 1 Lakh. He could not tell whether he had paid a sum of Rs. 15,800/ for the said chit bearing. He denied that he had stopped making payment after the 20th installment of the impugned chit and a sum of Rs. 63,000/ was due towards this chit. He was not aware CC No. 229/12 Shanlo Chit Pvt Ltd. v Sandeep Bhalla 5 of pages 17 whether the above mentioned amount of Rs. 15,800/ was transferred in the impugned chit account. He denied that as per settlement on 26.04.2005 against the outstanding amount of Rs. 47,200/ he had issued the cheque in question for Rs. 15,500/. He further stated it to be wrong that he has deposed falsely or that he has raised a false defence in order to cheat the complainant company.
Vide separate statement of accused defence evidence was closed on 05.04.2013 and matter was listed for final arguments.
ESSENTIAL INGREDIENTS
7. I have heard the final arguments advanced by the Ld. Counsels of both parties and perused the record carefully.
8. The essential ingredients which need be proved for constituting the offence under Section 138 of The Act were discussed in the case Jugesh Sehgal Vs. Shamsher Singh Gogi1 The relevant portion of the said judgment reads as under:
"9. It is manifest that to constitute an offence under Section 138 of The Act, the following ingredients are required to be fulfilled:
(i) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account;
(ii) The cheque should have been issued for the discharge, in whole or in part, of any debt or other liability;
(iii) that 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;
(iv) that cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid 1 . 2009 (9) SCALE 455.
CC No. 229/12 Shanlo Chit Pvt Ltd. v Sandeep Bhalla 6 of pages 17 from that account by an agreement made with the bank;
(v) the payee or the holder in due course of the cheque 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 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;
(vi) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice.
ESSENTIAL INGREDIENT: PRESENT CASE
9. Let us now examine whether the complainant has proved the necessary ingredients of the offence under Section 138 of The Act or not.
The first ingredient of the offence stands proved as original cheque is placed on record as Ex. CW1/5 and the issuance of same is admitted by the accused.
The second ingredient of the offence is that the cheques must have been issued in discharge of legal liability. As the signatures on the cheques are admitted, the presumptions raised under Section 139 of The Act become applicable and the issuance of cheques in discharge of the legal liability stands proved. The law on this point has been succinctly laid down by the Hon'ble Apex Court in Rangappa v. Sri Mohan AIR 2010 SC 1898.
The third ingredient of the offence is that cheque must presented to the bank within a period of six months from the date mentioned on it. The cheques Ex.CW1/5 was returned back unpaid on 26.04.2005. The cheque is also dated 26.04.2005. So it is evident that the cheque was presented for payment within the statutory period of six months.
The fourth ingredient of the offence if that the cheque(s) must be returned unpaid. The cheque was returned unpaid for the reason "Payment stopped". The original bank return memo Ex.CW1/6 placed CC No. 229/12 Shanlo Chit Pvt Ltd. v Sandeep Bhalla 7 of pages 17 on record prove dishonour of cheque by virtue of presumption raised under Section 146 of The Act and during the trial.
The fifth ingredient of the offence is that the demand notice must be issued to the accused within 30 days of the intimation of dishonour of cheque and same be served upon the accused. Postal receipts, UPC slip, Ex CW1/7 to Ex CW1/13 show the service of legal notice through registered post. The service of legal notice is presumed to be served at initial.
The last ingredient is that the accused must not have made the payment of the cheque amount within fifteen days of the receipt of legal notice. Non payment of cheque amount is admitted by the accused in his examination under Section 313 Cr P C. All the necessary ingredients for the offence have been made out against the accused with the aid and assistance of the presumptions raised under The Act. So the complainant has discharged the initial burden of proving his case beyond reasonable doubt and now the onus shifted upon the accused to come up with a probable defence and rebut the presumptions raised against him and put the burden back on the complainant.
PLEA OF DEFENCE
10. From the material on record and arguments the accused has raised a twofold defence. Firstly, he has not received the legal demand notice. Secondly, He has issued the impugned cheque as a security and there was no legal liability when the impugned cheque was presented for encashment. It is pertinent that the accused has maintained a clear cut stand throughout and no inconsistency whatsoever has crept in his defence at any stage.
FIRST PLEA OF DEFENCE
11. As far as the first defence of the accused is concerned i.e no legal demand notice was received by the accused. It is submitted by Ld. Counsel for accused that the accused has not received the legal demand notice and he came to know about the case only when he received processes from the Court. He further brought the attention of the Court towards the fact that no proof regarding the service of the legal notice has been placed on records by the complainant which shows that the complainant has not sent any legal demand notice to the accused; ld. Counsel for accused further submitted that the complainant has CC No. 229/12 Shanlo Chit Pvt Ltd. v Sandeep Bhalla 8 of pages 17 annexed only AD cards w.r.t service of legal demand notice to some persons other than the accused which also gives an indication that legal demand notice have not been sent to the accused.
To elucidate the position regarding the service of the legal demand notice. It is pertinent to quote here the judgment passed by Hon. High Court of Delhi, titled as HDFC Bank Ltd. Vs. Amit Kumar Singh2. The relevant para reads as under: "...14. Section 138 (b), N. I. Act is unambiuous in requiring a demand in writing to be made by the payee by "giving a notice in writing to the drawer of the cheque within 30 days of receipt of intimation that the cheque has dishonoured". The expression pf "giving of notice" has to be read in the context of Section 27 of the GC Act. In terms of the said provisions whenever a statute uses the words "served" or "give" or "sent" unless a different intention appears, service would be presumed "property" addressing, numbering and positing by registered post a letter containing the document. Unless the contrary is proved service would be deemed to have been effected at that time at which the letter would be delivered in the ordinary Course.
i. ...16. The above legal position is consistent with the legislative intent of the Parliament in enacting Section 144, N. I. Act. Although this provision talks of the mode of service of summons to either a witness or an accused under the N. I. Act, this Court finds no reason why the same standard should not be insisted upon for service of legal notice upon the accused by the complainant prior to the filing of the complaint. The reason for this that where ever a summoning order is passed and summons are sent to the accused, it would be sent at the same address shown for accused 2 . 160 (2009) Delhi Law Times 478 CC No. 229/12 Shanlo Chit Pvt Ltd. v Sandeep Bhalla 9 of pages 17 in the complaint. This address ought not to be any different from the address in the legal notice. It is therefore a continuous chain of events. First there is dishonour of the cheque. Next it the legal notice to be sent to the drawer within 30 days of the payee receiving an intimation from the Bank of the dishonour of the cheque. Such legal notice in writing has to be addressed to the drawer available with the complainant such notice. Such notice has to be received by the drawer and he should fail to make payment within 15 days after receipt of such notice. This chain thereafter, continues into the next stage following the failure to make the payment. The complainant or the drawee then approaches the criminal Court with a complaint in which he will implead as accused, the drawer of the cheque, with the address being shown as the same to which the legal notice was sent. The summon, therefore, goes to the same address.
ii. ... 24. At this juncture, this Court would also like to emphasize that even under Section 27, GC Act the requirement is that the notice must be "properly" addressed. The word "properly" obviously envisages the notice being sent to the correct present address of the noticee. The complainant will not be able to demonstrate before the Court that it had "properly' addressed the noticee unless it is able to produce the proof of delivery in the form of a postal endorsement or certificate of the courier agency or an internet generated delivery report or some other proof of delivery." (emphasis supplied). The accused has also categorically mentioned throughout the course of trial that he has not received any legal notice. In his statement u/s 313 Cr. P. C he also categorically mentioned that he has not received any legal demand notice. After going through the above mentioned observations made by the Hon'ble Justice S. Murlidharan in the above mentioned case and after going through the averments made CC No. 229/12 Shanlo Chit Pvt Ltd. v Sandeep Bhalla 10 of pages 17 by both the parties during the Course of evidence and after going through all the documents it is clear that it is incumbent upon the complainant to prove that he has sent a legal demand notice by producing the delivery report/AD. In the present case complainant has not filed any record/proof regarding the delivery of the legal demand notice.
To make the position here more clear, the Court find it pertinent to mention here the observations made by Hon'ble Supreme Court in D.Vinod Shivappa Versus Nanda Belliappa3 wherein it was made clear that in case where the notice has been returned unclaimed or a notice has been returned after having been refused by the accused, the principle incorporated in Section 27 of General Clauses Act can profitably be imported. The relevant para reads as under: " 15 ... if the complainant is able to prove that the drawer of the cheque knew about the notice and deliberately evaded service and got a false endorsement made only to defeat the process of law, the Court shall presume service of the notice. This, however, is a matter of evidence and proof. Thus, even in a case where the notice is returned with the endorsement that premises has always been found locked or the addressee was not available at the time of postal delivery,it will be open to the complainant to prove at the trial by evidence that the endorsement is not correct and that the addressee, namely, the drawer of the cheque, with the knowledge of the notice had deliberately avoided to receive the notice."
In view of the observations made by the Hon. Superior Courts as mentioned above it would be unsafe to say that deeming provisions of Section 27 of General Clauses Act would be attracted as the drawer ( noticee) has proved that legal notice has not really served and he was not responsible for such non service. Complainant have not filed any proof regarding the delivery or proof regarding the fact that same was sent but returned undelivered or refused. It is also pertinent to mention here that complainant has filed the AD Card w.r.t service of 3 . (2006) 6 SCC 456 CC No. 229/12 Shanlo Chit Pvt Ltd. v Sandeep Bhalla 11 of pages 17 legal demand notice to some persons other than the accused. Accordingly, it is clear that the accused has raised a probable defence in this case to the effect that legal notice has not served to him. As it is made clear that the legal notice has not been served to the accused, there is no need to deal with the case on the other defences. However, for the sake of clarity and to give the finality to the order, the other defence, raised by the accused is hereby also discussed.
SECOND PLEA
12. As far as the second plea of defence of the accused is concerned i.e there was no legal liability and cheques were given as security cheques, it is averred by the ld. Counsel for accused that there was no legal liability at the time when the cheque was presented to the bank for encashment and the impugned cheque was given as security cheque along with other cheques which are still in the possession of the complainant. It is also submitted by Ld. Counsel for accused that the fact that there was no legal liability is substantiated with the fact that the complainant has not annexed the ledger account to substantiate the statement of account as exhibited as CW1/4. He also submitted that the statement of account/balance sheet Ex. CW1/4 is manipulated one and is not showing the true picture w.r.t liability. He also submitted that impugned cheque was given as security cheque and same is substantiated with the fact that the pen used for signing the cheque and filling the details is different which further substantiate the fact that cheque was given as security as blank cheque. He also submitted that the accused has issued a legal notice marked as mark A to return all the security cheque as there was no legal liability and accused has already cleared the liability. Ld. Counsel for accused also submitted that there is not even a single mention in the complaint or in the evidence by way of affidavit as to what was the liability and how that liability has arrived. Ld. Counsel further submitted that present complaint case is based on false and concocted facts.
Per contra it is submitted by ld. Counsel for complainant that accused was having liability at the impugned time when the cheque was presented for encashment and the cheque was not given as security cheque.
13. After hearing submissions of both the parties and after going through the averrments as made by both the parities in their evidence , the statement of the accused u/s 313 Cr. P. C and the complaint, the CC No. 229/12 Shanlo Chit Pvt Ltd. v Sandeep Bhalla 12 of pages 17 Court has observed that the liability w.r.t impugned cheque pertains to chit number SCPL 12 which was for a value of Rs. 2,10,000/ and accused was supposed to clear all the installments by way of 30 equal monthly installments of Rs. 7,000/ each. However, perusal of statement of account/balancesheet, Court has observed that on 25.03.2003 which is a date prior to the date of the cheque, amount has been transferred from chit no. SCPL18. It is pertinent to mention here that statement of account/balance sheet Ex. CW1/4 pertains to chit no. SCPL12; no reason, for transfer of the amount from Chit no. SCPL18 to the statement of account/balance sheet of SCPL12, has been assigned. No document regarding the transfer as mentioned above has been annexed in the complaint, complaint also does not have any mention regarding the transfer of amount from chit no. SCPL 18 to chit no. SCPL12. It is also pertinent to mention here that in his cross examination AR for the complainant has averred as CW1 that the impugned cheque was given by Sh. Sandeep Bhalla personally to him and the same was filled by him i.e AR Sh. Prem Kumar in the presence of the accused. No reason has been given as to why the cheque was filled by him despite the admitted fact that accused was present at the impugned time. Relevant para is quoted here as under for the sake of clarity: "...I took the cheque personally from Mr. Sandeep Bhalla for the copany. The said cheque was filled up by me and not by Mr. Sandeep BhallaMr. Bhalla was present at that time..."
Further perusal of the cheque it is revealed that the signatures and details in the cheque are of different ink. It gives an indication and fortify the averment of the accused that the cheques had been given as the security cheques.
The Court has also observed that despite putting a specific enquiry AR for the complainant as CW1 has not given a satisfactory reply w.r.t fact as to how the amount as shown in the impugned cheque has arrived on and has only given a vague reply that the balance amount is shown in the statement of account filed in the judicial file.
The relevant para is quoted here as under for the sake of clarity: "...The balance amount is mentioned in the CC No. 229/12 Shanlo Chit Pvt Ltd. v Sandeep Bhalla 13 of pages 17 statement of account filed in the judicial file. I had sent the intimation of balance to accused but have not put any such document on record..."
After perusing the above mentioned averment and also keeping in mind the fact that in complaint the basis of the liability is the chit No. SCPL12, and also keeping in mind the fact that a sum of amount had been transferred from chit no. SCPL 18 to chit no.SCPL12 without mentioning the same in the complaint or without giving any reason regarding the same and also without filing any document w.r.t same; the Court is of the view that the contradiction to this level has raised an probable defence in favour of the accused to the fact that there was no liability w.r.t chit no. SCPL12 as averred in the complaint itself.
The Court has also observed that CW1 in his crossexamination has averred that they had issued the receipt regarding the payment made by the accused and same are on records; however, perusal of the Court records, no such receipt has been annexed on records by the complainant. It is also pertinent to mention here that accused has annexed three receipts regarding the payment made by him and same are exhibited EX. DW1/D, Ex. DW1/E and Ex. DW1/F and same are not denied by the complainant. Perusal of the same it is revealed that receipt cum intimation letter Ex. DW1/F is w.r.t the payment made by the accused w.r.t chit no. SCPL12 and chit no. SCPL18. Further perusal of the same it is revealed that the accused have made payment w.r.t SCPL12 and the same is 28th installment. To check the varasity and correctness of the statement of accounts/balancesheet exhibited as EX. CW1/4, the above mentioned receipt cum intimation letter have been compared with the statement of accounts/balancesheet exhibited as EX. CW1/4; It is observed by the Court that the statement of accounts/balancesheet exhibited as EX. CW1/4 have shown the payment by the accused till 21st installment. And thereafter, one amount has been transferred from SCPL18 without giving any reason as mentioned above. After going through the above mentioned observations the Court is getting a prima facie indication that statement of accounts/balancesheet exhibited as EX. CW1/4 is not showing the true and correct statement; and accordingly, the Court is of the view that the accused has raised probable defence to the effect that there was no legal liability as mentioned in the complaint at the time of presenting the impugned cheque for encashment and the impugned cheque was given as security cheque.
CC No. 229/12 Shanlo Chit Pvt Ltd. v Sandeep Bhalla 14 of pages 17 In view of the above discussion, the Court is of considered opinion that court has successfully proved that the cheques were given as security. The Hon'ble Superior courts, in their various judgments, have mandated that the cheque issued for security purposes does not attract the liability under Section 138 of the Act. In M. S. Narayana Menon @ Mani Vs. State Kerala and another 4, the Hon'ble Apex Court observed:
"The appellant clearly said that nothing is due and the cheque was issued by way of security.
The said defence has been accepted as probable. If the defence is acceptable as probable the cheque, therefore cannot be held to have been issued in discharge of the debt as, for example, if a cheque is issued for security or for any other purpose the same would not come within the purview of Section 138 of the Act."
The above quoted judgment was relied upon by the Hon'ble Delhi High Court in Collage Culture and others vs. Apparel Export Promotion Council 5. As the cheque was not issued in discharge of any liability but merely for security, the provisions of Section 138 are not attracted.
It is trite now that the accused may rebut the presumptions from the circumstances of the case and need not lead positive evidence for rebuttal. In Kumar Exports v. Sharma Carpets6 discussing at length the question of the rebuttal of the presumption, it was observed:
"....Apart from adducing direct evidence to prove that the notes in question was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may 4 . 2006 (6) SCC 39 5 . 2007 (99) DRJ 2512 6 . (2009) 2 SCC 513 CC No. 229/12 Shanlo Chit Pvt Ltd. v Sandeep Bhalla 15 of pages 17 likewise shift again on to the complainant.
The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arising under Sections 118 and 139 of The Act. The accused has also an option to prove the nonexistence of consideration and debt or liability either by letting in evidence or in some clear and exceptional cases, from the case set out by the complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial...."
. In Birender Singh Vs. State (NCT of Delhi) and Anr.I (2008) BC 452, it was held:
"5. There is no doubt that the burden rests on the accused to rebut the presumption as raised under Sections 139 and 118 of the Negotiable Instruments Act. However, this presumption can be rebutted by the accused not merely by examining his own witnesses but even by crossexamination of the complainant and his witnesses and bringing out on record, through crossexamination, that the complainant was altar and there was no privity of contract between the complainant and the accused and cheques were misused."
As quoted above, the standard of proof so as to establish a defence on the part of an accused is 'preponderance of probabilities'. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which he relies. After carefully scrutinizing and analyzing the evidence together with the circumstances discussed above,there is no doubt in my mind that the accused has come up with a highly probable defence. The Court is of the opinion that there is sufficient material on record to displace the presumptions raised under The Act. Infact the circumstances and material on record contradict the CC No. 229/12 Shanlo Chit Pvt Ltd. v Sandeep Bhalla 16 of pages 17 averments made in the complaint and rather indicate towards the fact that the complainant has infact instituted a false and fabricated complaint.
Conclusions
14. After carefully scrutinizing and analyzing the evidence together with the circumstances discussed above,there is no doubt in the mind of the Court that the accused has come up with a highly probable defence. I am of the opinion that there is sufficient material on record to displace the presumptions raised under The Act. Infact the circumstances and material on record contradict the averments made in the complaint and rather indicate towards the fact that the complainant has infact instituted a false and fabricated complaint.
Decision
15. In totality of the circumstances and the discussions above, the Court is of the considered view that the accused has proved his defence on the basis of preponderance of probabilities and successfully rebutted the presumptions raised under The Act.
In the considered opinion of the Court, in view of the legal provisions and case law discussed, the accused is held not guilty for the offence u/s 138 NI Act and is accordingly,acquitted.
Announced in the open Court (Vinod Kumar Meena) today on 04.06.2013 CJ03/NDD/PHC/ND CC No. 229/12 Shanlo Chit Pvt Ltd. v Sandeep Bhalla 17 of pages 17