Delhi District Court
Qayam Shafi vs Wasi Ul Hasan on 4 September, 2024
IN THE COURT OF MS. SHEETAL CHAUDHARY PRADHAN
ADDL. SESSIONS JUDGE-02 : SOUTH EAST DISTRICT
SAKET COURT : NEW DELHI
Criminal Appeal No. 273/2023
PS- Jamia Nagar
U/Sec. 138 NI Act
In The Matter Of :-
Qayam Shafi
S/o Sh. Mohd. Shafi
R/o Village Chholas, PS Jarcha
Tehsil Dadri, District Gautam Budh Nagar
Uttar Pradesh.
.... Appellant
Versus
1. Wasi Ul Hasan
S/o Sh. Sabi Ul Hasan
R/o B-7/8, 3rd Floor
Saeed Manzil, Okhla Vihar, Jamia Nagar
Okhla, New Delhi.
2. The State
.... Respondent
Date of Institution : 01.09.2023
Date of Arguments : 24.08.2024
Date of Judgment : 04.09.2024
Decision : Appeal Dismissed.
Order of Ld. Trial
Court upheld.
Qayam Shafi Vs Wasi Ul Hasan (CA No. 273/2023) Page 1 of 36
JUDGMENT
1. Appellant has filed present appeal thereby challenging judgment dated 28.06.2023 and Order on Sentence dated 03.08.2023, passed by Ld. Trial Court in CT No. 617820/2016 titled as 'Wasi Ul Hasan Vs. Qayam Safi.
2. Both the parties shall be referred with the same nomenclature with which they were referred before Ld. Trial Court, to avoid any confusion, in my subsequent paragraphs.
3. Briefly, the facts of this case are that ;
"That on 18.10.2010, the accused had approached the complainant for a friendly loan of Rs. 8,60,000/-. Upon considering the urgency of accused, complainant gave Rs. 8,60,000/- to the accused and an agreement dated 18.10.2010 was executed between the parties. In lieu of said friendly loan, accused had issued Cheque bearing no. 509416 dated 18.10.2011 of Rs.8,60,000/- drawn on ICICI Bank, D-949 New Friends Colony New Delhi-110065, in favour of the complainant towards discharge of his legal liability. Thereafter, upon presentation, the aforesaid cheque returned unpaid with the reasons "Account Closed" vide return memo dated 30.11.2011. Thereafter, Legal Notice dated 15.12.2011 was served upon the accused but the accused failed to make the payment within the statutory period against the aforesaid cheque. Hence, the present complaint under Section 138 of NI Act was filed."Qayam Shafi Vs Wasi Ul Hasan (CA No. 273/2023) Page 2 of 36
4. Thereafter, complainant led pre-summoning evidence and after hearing arguments on the point of summoning, Ld. Trial Court took cognizance and accused was summoned vide order dated 01.02.2012.
5. After appearance of accused, vide order dated 13.12.2017, accused was granted opportunity to cross-examine the complainant.
6. Complainant examined himself as CW1 and tendered his affidavit as Ex.CW1/E in evidence. He also relied upon the documents viz. :-
(a) Ex.CW1/A- Agreement of deposit dated 18.10.2010.
(b) Ex.CW1/B- Original Cheque no. 509416 dated 18.10.2011.
(c) Ex.CW1/C- Return memo dated 30.11.2011.
(d) Ex.CW1/D- Photocopies of the legal notice and postal receipts.
(e) Ex.CW1/E- Evidence by way of affidavit. (f) Ex.CW1/F- Complaint.
7. Complainant during his cross-examination deposed that, he knew the accused since last 12-13 years who is a builder. He deposed that he had also filed another complaint case u/s 138 NI Act against the accused, pending vide CC No. 622527/16. That he had given a part payment of Rs.5 lacs to the accused, in the transaction which is the subject matter of CC no. 622527/16. He is the person in his family who earn livelihood and his wife also earn something. The income of his wife is not a regular feature, however, on average she earns Rs.2000 - Rs. 3000/- per month.
He further deposed that the payment of the loan amount was paid in cash on 18.10.2010 and the agreement Ex.CW-1/A was executed on the same Qayam Shafi Vs Wasi Ul Hasan (CA No. 273/2023) Page 3 of 36 day and at the time, besides complainant, accused and Mohd. Talak, Advocate of complainant, were present there. He further deposed that the stamp paper was purchased by him on 18.10.2010 or 17.10.2010 in the Saket Court and after reaching back to Okhla Vihar, he got signed this agreement Ex.CW1/A from one of the attesting witness. He further deposed that probably on the next day another attesting witness signed the Ex.CW1/A. He further deposed that the contents of Ex.CW1/B was written by accused at Okhla Vihar in his presence and accused had filled the contents of cheque Ex.CW1/B and then signed thereafter and handed over the same to complainant. He further deposed that the accused came to him and asked the amount in question for the purpose of lanter on roof of his project at Madanpur Khadar. He further deposed that the amount of Rs. 8,60,000/- was paid to accused in cash as he had sold two autos in the year 2010 and the abovesaid amount was given to accused from these sale proceeds.
8. After examining the complainant, complainant evidence was closed vide order dated 06.08.2022.
9. Matter was then fixed for recording of statement of accused u/sec. 313 CrPC, and all the incriminating evidence was put to accused, in which he deposed that, in the year 2008, he had obtained a loan of Rs. 8 lacs from the complainant and the interest was repaid by him. At the time of advancing loan to him, complainant took two cheques in blank condition but signed by him including the cheque in question. He further deposed Qayam Shafi Vs Wasi Ul Hasan (CA No. 273/2023) Page 4 of 36 that the complainant also took one blank stamp paper of Rs. 50/- denomination and four blank papers and after the payment of the loan amount alongwith interest, when he demanded his cheques, stamp papers as well as blank papers complainant avoided on one pretext or other. He further deposed that these cheques have been misused by way of filing present complaint as well as another complaint and he has been falsely implicated in this case.
10. DW1- Rajender Singh Rana, Asstt. Ahlmad from the Court Sh.C.K. Chaturvedi, Ld. Presiding Officer, Special NI Act Courts, has been produced who has brought on record the summoned record case file bearing no. 622527/16 titled as Wasi Ul Hasan Vs. Sikander Raza @ Qayam Safi, and matter was then fixed for final arguments.
11. Thereafter, final arguments were heard by Ld. Trial Court. Vide impugned judgment dated 28.06.2023 and order on sentence dated 03.08.2023, were passed by Ld. Trial Court that, "convict/ accused was sentenced to pay fine of Rs. 17,20,000/-, the whole of which is to be paid to the complainant as compensation within 30 days. In default of payment of said fine, convict shall undergo simple imprisonment for a period of six months."
12. Subsequently, by aggrieved the aforesaid judgment and order on sentence passed by Ld. Trial Court, present appeal was preferred by accused on the followings grounds :-
Qayam Shafi Vs Wasi Ul Hasan (CA No. 273/2023) Page 5 of 36A. That the impugned judgment and order is against the well- settled principles of law and also against the facts and circumstances of the case and has been passed without appropriate appreciation of material/evidence on record.
B. That Ld. Trial Court has taken a contradictory stand while appreciating the evidence on record and convicting the appellant for offence u/s 138 N.I.Act although the presumptions carved out in favour of the complainant but are those of law and not those of facts.
C. That Ld. Trial Court did not appreciate that an accused for discharging the burden of proof placed upon him under a statute need not examine himself. He may discharge his burden on the basis of the materials already brought on record. The accused has a constitutional right to maintain silence. The standard of proof on the part of the accused and that of the prosecution in a criminal case is different.
D. That Ld. Trial Court did not appreciate that whereas the prosecution must prove the guilt of an accused beyond all reasonable doubt, the standard of proof so as to prove a defence on the part of the 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.
E. That Ld. Trial Court did not appreciate that by not framing of notice before the start of the formal trial resulted in depriving the Appellant /convict of his defence being recorded at the very first instance.Qayam Shafi Vs Wasi Ul Hasan (CA No. 273/2023) Page 6 of 36
F. That Ld. Trial Court misunderstood the facts and evidence on record and further failed to correctly appreciate that it was disputed from the very beginning whether the cheque in question was issued by the Appellant /convict in respect of legally recoverable debt liability or not.
G. That Ld. Trial Court did not appreciate correctly that whether a legally valid and enforceable debt existed qua the complainant and whether the cheque in question was issued by the Appellant/ convict/ drawer in discharge of said liability/debt.
H. That the existence of Agreement of Deposit Ex.CW1/A is highly suspected and it rendered a prosecution of this case very doubtful since it was produced as a document that is the basis for the grant of a loan to the accused.
I. That the stamp paper on which the agreement Ex.CW1/A executed was purchased on, as shown, dated 25th October 2010 and this agreement was attested by the Notary public on 16/11/2010.
J. That Ld. Trial Court did not appreciate correctly the evidence of the complainant whether the legal demand notice was received by the accused and this fact was also recorded during the process of recording of statement u/s 313 Cr.PC i.e. that he had not received the legal notice.
K. That Ld. Trial Court did not appreciate certain other essential facts when brought into the knowledge of Ld. Trial Court from the records which was pertaining to another case between the same parties being C.C.no.622527/16 pending before the Sh. C.K.Chaturvedi Ld. Special M.M. Saket, New Delhi and the certified copies of said proceedings were also placed on judicial record as EX.DW-1/A. Qayam Shafi Vs Wasi Ul Hasan (CA No. 273/2023) Page 7 of 36 L. That Ld. Trial Court did not appreciate the highly suspected circumstances of acceptance of a cheque from the Appellant /convict by respondent no.1 /complainant after being very well knowing about the fact that the account had already closed.
M. That Ld. Trial Court did not appreciate the lack of financial capacity of respondent no.1 /complainant to extend a loan to the Appellant/convict.
N. That Ld. Trial Court did not appreciate correctly highly suspected/ doubtful circumstances in which the alleged agreement of deposit was executed, the suggestions were wrongly interpreted and wrong presumptions were raised against the Appellant/convict.
O. That Ld. Trial Court did not appreciate that the prosecution failed to adduced cogent and convincing evidence and that not producing the important and material evidence and non- examination of available independent witnesses shows mala fide intention of prosecution and in these circumstances, it is not open to the Ld. trial Court to draw adverse inference against the defence.
P. That the impugned judgment is based on conjectures and surmises and the impugned judgment suffers from glaring defect of not being a resolved judgment in as much as the Ld. Trial Court failed to record the reason forthcoming to the conclusion that the prosecution has proved its case beyond a reasonable doubt against the appellant.
Q. That impugned judgment and order on sentence is liable to set aside.Qayam Shafi Vs Wasi Ul Hasan (CA No. 273/2023) Page 8 of 36
13. Ld. Counsel for appellant/ accused has also argued that Ld. Trial Court did not appreciate the falsity in the claim of complainant and the impugned judgment passed by Ld. Magistrate is bad in the eyes of law and is liable to be set aside because the complainant, on the basis of the entire material available on record, has not been able to prove and establish all the ingredients of the offence and could not make out a prima facie case against the accused beyond all reasonable doubts in terms of section 138 of NI Act. It is argued that Ld. Trial Court did not appreciate that complainant has not proved its case beyond reasonable doubt. Ld. Counsel for accused has also relied upon the judgments titled as (1) Sukhjeet Singh Vs. State of Uttar Pradesh & Ors., Crl. Appeal No. 148/2019 decided on 25.01.2019, MANU/SC/0077/2019 (2) Rambhau & Ors. Vs. State of Maharashtra, Appeal (Crl.) No. 636/1995 decided on 26.04.2001 MANU/SC/0309/2001 and (3) Rajeswar Prosad Misra Vs. State of West Bengal & Ors., Crl. Appeal No. 19/1963 decided on 06.05.1965, MANU/SC/0080/1965. It is prayed that impugned judgment and order on sentence be set aside. Ld. Counsel for accused has also argued that the accused has been acquitted in another matter of similar nature between the parties in CC No. 622527/2016 titled as Wasi Ul Hasan Vs. Sikandar Raza @ Qayam Shafi, dated 28.05.2024. It is also argued that the documents and facts pertaining to the aforesaid matter be allowed to the accused to be taken into consideration as the contentions raised by complainant/ respondent are similar and also pertained to the transaction between the parties of the same time.
Qayam Shafi Vs Wasi Ul Hasan (CA No. 273/2023) Page 9 of 3614. Per contra, Ld. Counsel for complainant has argued that impugned judgment and order on sentence needs no interference and appeal must be dismissed. It is further argued that the presumption as stated u/sec. 118 and 119 of the NI Act, 1881, are against the accused and therefore, the conviction of accused be upheld. Ld. Counsel for complainant has argued that the signature on the cheques in question, are not disputed and were issued only to repay the loan amount to the complainant. It is argued that the complainant had discharged the onus by leading evidence and the accused has failed to raise any probable defence by leading any evidence. It is further argued that merely by putting suggestions to the complainant does not amount to disbelieving the case of the complainant. He has further argued that accused has admitted the case of the complainant in his statement recorded u/sec. 313 CrPC that he had obtained a loan of Rs. 8 Lacs and in lieu of the same, he had advanced the cheque in question to the complainant. Therefore, the impugned judgment does not require any interference and is liable to be upheld.
15. I have heard Ld. Counsel for accused/ appellant, Ld. Counsel for complainant/ respondent and have carefully gone through the record.
16. In order to appreciate and decide present appeal, I find it relevant to mention here law relating to Section 138 NI Act and with respect to the presumptions U/s. 118 (a) and 139 NI Act. The said provisions and the interpretations given by higher echelon of Judiciary, are relevant. Therefore, they are mentioned below :-
Qayam Shafi Vs Wasi Ul Hasan (CA No. 273/2023) Page 10 of 36"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 with 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 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."Qayam Shafi Vs Wasi Ul Hasan (CA No. 273/2023) Page 11 of 36
17. Hon'ble Apex Court had the occasion to appreciate and interpret aforesaid provision in case titled as Kusum Ingots and Alloys Ltd. Vs. Pennar Peterson Securities Ltd. (2000) 2 SCC 745. In the said judgment Hon'ble court observed that in order to successfully prosecute the drawer of a cheque for an offence U/s. 138 NI Act, following facts are required to be proved successfully.
"a) 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 for discharge of any debt or other liability.
b) 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, which ever is earlier.
c) That cheque is returned by the bank unpaid, either because 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 from that account by an agreement made with the bank.
d) The payee or the holder in the 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 the information by him from the bank regarding the return of the cheque as unpaid.
e) 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 said notice.........."
".............Judicial statements have deferred as to the quantum of rebutting evidence required. In Kundun Qayam Shafi Vs Wasi Ul Hasan (CA No. 273/2023) Page 12 of 36 Lal Rallaram Vs. Custodian, Evacuee Property, Bombay AIR 1961 SC 1316, this Court held that the presumption of law under Section 118 of presumption of fact raised under Section 114 of the Evidence Act. The decision must be limited to the facts of that case. The more authoritative view has been laid down in the subsequent decision of the Constitution Bench in Dhanvantrai Balwantrai Desai v. State of Maharashtra : 1964 Cri. L 1437 : 1964 Cril 1437, where this Court reiterated the principle enunciated in State of Madras v. Vaidyanath Iyer (supra) and clarified that the distinction between the two kinds of presumption lay not only in the mandate to the Court, but also in the nature of evidence required to rebut the two. In the case of a discretionary presumption the presumption if drawn may be rebutted by an explanation which "might reasonably be true and which is consistent with the innocence" of accused. On the other hand in the case of mandatory presumption "the burden resting on the accused person in such a case would not be as light as it is where a presumption is raised under S.114 of the Evidence act and cannot be held to be discharged merely by reason of the fact that the explanation offered by the accused is reasonable and probable. It must further be shown that the explanation is a true one. The words 'unless the contrary is proved' which occur in this provision make it clear that the presumption has to be rebutted by 'proof' and not by a bare explanation which is merely plausible. A fact is said to be proved when its existence is directly established or when upon the material before it the court finds its existence to be so probable that a reasonable man would act on the supposition that it exists. Unless, therefore, the explanation is supported by proof, the presumption created by provision cannot be said to be rebutted... ..."Qayam Shafi Vs Wasi Ul Hasan (CA No. 273/2023) Page 13 of 36
18. Section 118 (a) and Section 139 of NI Act are mentioned in verbatim below :-
"Section 118 : Presumptions as to negotiable instruments,- Until the contrary is proved, the following presumptions shall be made:-
(a) of consideration - that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted indorsed, negotiated or transferred, was accepted, was indorsed, negotiated or transferred for consideration;"
"Section 139 : Presumption in favour of holder - 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."
19. It is a well settled legal position that presumptions U/s. 118 and 139 NI Act are rebuttable presumptions and burden lies on accused to prove that he had no liability/debt on the date of issue of cheque. It is also a settled principle of law that to bring home an offence under any of the penal provisions, it is essential to prove the case beyond reasonable doubt and ingredients of offence should be satisfied. Hon'ble Apex court had the occasion to appreciate said provisions in certain case laws which are relevant for the purpose of adjudication of appeal. Relevant observations of said case laws are mentioned in my subsequent paragraphs.
Qayam Shafi Vs Wasi Ul Hasan (CA No. 273/2023) Page 14 of 3620. In case titled as M.S.Narayana Menon Vs. State of Kerala 6 SCC 39 it was held that ;
"While dealing with that aspect in a case under Section 138 of the Negotiable Instruments Act, 1881, this court held that presumptions under sections 118
(a) and 139 of the Act are rebuttable and the standard of proof required for such rebuttal is preponderance of probabilities and not proof beyond reasonable doubt.
The Court observed:
In terms of section 4 of the Evidence Act whenever it is provided by the Act that the court shall presume a fact, it shall regard such fact as proved unless and until it is disproved. The words "proved" and "disproved" have been defined in section 3 of the Evidence Act (the interpretation clause).
Applying the said definitions of "proved or "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 non-existence of the consideration so probable that a prudent man ought, 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.Qayam Shafi Vs Wasi Ul Hasan (CA No. 273/2023) Page 15 of 36
The standard of proof evidently is preponderance of probabilities. Inference of preponderance of probabilities can be drawn not only from the materials on record but also by reference to the circumstances upon which the relies.
Therefore, the rebuttal does not have to be conclusively established but such evidence must be adduced before the court in support of the defence to exist or consider its existence to be reasonable probable, the standard of reasonability being that of the "prudent man".
21. Further, in Bharat Barrel and Drum Manufacturing Company Vs. Amin Chand Pyarelal (1999) 3 SCC 35 it was observed as under:-
"Upon consideration of various judgments as noted hereinabove, the position of law which emerges is that once execution of the promissory note is admitted, the presumption under Section 118(a) would arise that it is supported by a consideration. Such a presumption is rebuttable. The defendant can prove the non-existence of a consideration by raising a probable defence. If the defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the plaintiff who will be obliged to prove it as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument. The burden upon the defendant of proving the non- existence of consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies. In such an event, the plaintiff is entitled under law to rely upon all the evidence led in the case including that of the plaintiff as well. In case, where Qayam Shafi Vs Wasi Ul Hasan (CA No. 273/2023) Page 16 of 36 the defendant fails to discharge the initial onus of proof by showing the non-existence of the consideration, the plaintiff would invariably be held entitled to the benefit of presumption arising under Section 118(a) in his favour. The court may not insist upon the defendant to disprove the existence of consideration by leading direct evidence as the existence of negative evidence is neither possible nor contemplated and even if led, is to be seen with a doubt. The bare denial of the passing of the consideration apparently does not appear to be any defence. Something which is probable has to be brought on record for getting the benefit of shifting the onus of proving to the plaintiff. To disprove the presumption, the defendant has to bring on record such facts and circumstances upon consideration of which the court may either believe that the consideration did not exist or its non-existence was so probable that a prudent man would, under the circumstances of the case, shall act upon the plea that it did not exist."
"Section 139 of the Act is an example of 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 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."Qayam Shafi Vs Wasi Ul Hasan (CA No. 273/2023) Page 17 of 36
"In the absence of compelling justification, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is settled position that when an accused has to rebut the "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 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."
22. In Case titled as M/s. Kumar Exports Vs. M/s. Sharma Carpets Crl. Appeal No. 2045 of 2008 passed by Hon'ble Supreme Court of India, it was held as under :-
"When a presumption is rebuttable, it only points out that the party on whom lies the duty of going forward with evidence, on the fact presumed and when that party has produced evidence fairly and reasonably tending to show that the real fact is not as presumed, the purpose of the presumption is over. 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 Qayam Shafi Vs Wasi Ul Hasan (CA No. 273/2023) Page 18 of 36 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 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 server 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. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability, accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may 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 non-existence 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, Qayam Shafi Vs Wasi Ul Hasan (CA No. 273/2023) Page 19 of 36 the case set out in the statutory notice and evidence adduced by the complainant during the trial. Once such rebuttal evidence is adduced and accepted by court, having regard to all the circumstances of case and preponderance of probabilities, evidential burden shifts back to the complainant and, thereafter, presumptions under Sections 118 and 139 of the Act will not again come to the complainant's rescue."
23. In Case titled as John K. John v. Tom Varghese 2007 (4) Civil Court Cases 690 (S.C), it was held as under :-
".....Presumption raised in terms of Section 139 of the Act is rebuttable. If, upon analysis of the evidence brought on records by the parties, in a fact situation obtaining in the instant case, a finding of fact has been arrived at by the High Court that the cheques had not been issued by the respondent in discharge of any debt, in our opinion, the view of the High Court cannot be said to be perverse warranting interference by us in exercise of our discretionary jurisdiction under Article 136 of the Constitution of India. The High Court was entitled to take notice of the conduct of the parties. It has been found by the High Court s of fact that the complainant did not approach the court with clean hands. His conduct was not that of a prudent man. Why no instrument was executed although a huge sum of money was allegedly paid to the respondent was a relevant question which could be posed in the matter. It was open to the High Court to draw its own conclusion therein. Not only no document had been executed, even no interest had been charged....."Qayam Shafi Vs Wasi Ul Hasan (CA No. 273/2023) Page 20 of 36
24. The net result in the light of above dictum is that complainant in a case filed U/s. 138 NI Act has to prove the ingredients of said provision, beyond reasonable doubt. The presumptions U/Sec. 118 (a) and 139 NI Act do favour complainant but those presumptions are rebutable. Accused can rebut those presumptions based on preponderance of probabilities. It is not required that in each and every case accused has to lead defence evidence for rebutting aforesaid presumptions. Accused can rebut the aforesaid presumptions on the basis of material brought on record by complainant.
25. Keeping in mind above mentioned law and understanding of law, I am proceeding further with the case in hand.
26. So far as question of leading evidence and liability or debt towards the cheque in question, is concerned, in the case law titled as K .N. Beena Vs. Muniyappan & Anr. Appeal (Crl.) 1066 of 2001, Spl. Leave Petition (Crl) No. 969/2001 decided on 18.10.2001 by Hon'ble Apex Court , it has been held that :-
In our view the impugned Judgment cannot be sustained at all. The Judgment erroneously proceeds on the basis that the burden of proving consideration for a dishonored cheque is on the complainant. It appears that the learned Judge had lost sight of Sections 118 and 139 of the Negotiable Instruments Act. Under Sections 118, unless the contrary was proved, it is to be presumed that the Negotiable Instrument (including a cheque) had been made or drawn Qayam Shafi Vs Wasi Ul Hasan (CA No. 273/2023) Page 21 of 36 for consideration. Under Section 139 the Court has to presume, unless the contrary was proved, that the holder of the cheque received the cheque for discharge, in whole or in part, of a debt or liability. Thus in complaints under Section 138, the Court has to presume that the cheque had been issued for a debt or liability. This presumption is rebutable. However the burden of proving that a cheque had not been issued for a debt or liability is on the accused. This Court in the case of Hiten P. Dalal vs. Bratindranath Banerjee reported in (2001) 6 S.C.C. 16 has also taken an identical view.
In this case admittedly the 1st Respondent has led no evidence except some formal evidence. The High Court appears to have proceeded on the basis that the denials/averments in his reply dated 21st May, 1993 were sufficient to shift the burden of proof onto the Appellant/Complainant to prove that the cheque was issued for a debt or liability. This is an entirely erroneous approach. The 1st Respondent had to prove in the trial, by leading cogent evidence, that there was no debt or liability. The 1st Respondent not having led any evidence could not be said to have discharged the burden cast on him. The 1st Respondent not having discharged the burden of proving that the cheque was not issued for a debt or liability, the conviction as awarded by the Magistrate was correct. The High Court erroneously set aside that conviction.Qayam Shafi Vs Wasi Ul Hasan (CA No. 273/2023) Page 22 of 36
27. Ld. Counsel for appellant has claimed that complainant failed to disclose his source of income and have never filed his Income Tax Return and therefore, the impugned judgment be set aside. In the case law, titled as Smt. Ragini Gupta vs Piyush Dutt Sharma, CRR No. 5263/2018 decided on 07.03.2019 by Hon'ble High Court of Madhya Pradesh, wherein it has been held that :-
"So far as the contention of the revisionist that the respondent has failed to disclose his source of income is concerned, this Court is of the considered opinion that in view of presumption provided under Section 139 of Negotiable Instruments Act, the burden shifts to the accused to dislodge the presumption. In the present case, the respondent was cross- examined in detail with regard to his source of income.
It is submitted by learned Senior Counsel for the revisionist that as the respondent has never disclosed his source of income in the Income Tax Return and the respondent has never filed his Income Tax Return, therefore, it should be presumed that he did not have any source of income. This Court is of the considered opinion that mere non-filing of Income Tax Return would not automatically dislodge the source of income of the complainant. Non-payment of Income Tax is a matter between the revenue and the assessee. If the assessee has not disclosed his income in the Income Tax Return, then the Income Tax Department is well within its rights to reopen the assessment of income of the Qayam Shafi Vs Wasi Ul Hasan (CA No. 273/2023) Page 23 of 36 assessee and to take action as per the provisions of Income Tax Act. However, non-filing of Income Tax Return by itself would not mean that the complainant had no source of income and thus, no adverse inference can be drawn in this regard only because of absence of Income Tax Return."
28. Further, the Hon'ble Supreme Court in the case of Bir Singh vs. Mukesh Kumar passed in Criminal Appeal Nos.230-231 of 2019 [SLP (Crl) Nos.9334-35 of 2018] has held as under:-
''41. 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.
42. In the absence of any finding that the cheque in question was not signed by the respondent-
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-
Qayam Shafi Vs Wasi Ul Hasan (CA No. 273/2023) Page 24 of 36complainant, 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."
29. In the present matter, the accused while cross-examining the complainant had asked several questions to the witness and no suggestion was given to him that the cheque in question does not bear the signature of the accused. Accused has also not disputed his signature or the signatures of its witnesses on the agreement Ex.CW1/A- dated 18.10.2010. The complainant had also clarified in his cross-examination that the amount in question was given in cash as it was obtained after selling his autos. Furthermore, in the present case, the cheque in question was not returned by the Bank on the ground of difference in his signatures but due to 'Account Closed'. The accused during his statement recorded u/sec. 313 CrPC has himself admitted that he had taken loan amount of Rs. 8 lacs from the complainant and repaid the same but the accused failed to bring on record any cogent evidence regarding repayment of the said loan amount to the complainant.
Qayam Shafi Vs Wasi Ul Hasan (CA No. 273/2023) Page 25 of 3630. Whether there was any loan transaction between the parties or not and whether there was any legally recoverable debt or not, is the subject- matter which can be ascertained in the light of entire case led by the parties. Where the accused has failed to satisfactorily explain the circumstances under which the cheque was issued by the accused or misused by the complainant, then it can be safely inferred/ presumed that the cheque was issued in discharge of legally recoverable dept/liability. Further, the accused has claimed that he had paid back all the loan amount taken by him from the complainant. In this regard, no documentary or electronic evidence was produced by accused, which does not support the case of the accused. Therefore, the accused had not disputed his signature on the cheque but he had merely stated that the cheque was given blank. Merely because the entries in the cheque in question were not filled by the accused, would not absolve him from his liability arising from the cheque. Section 20 of the Negotiable Instruments Act draws a presumption in favour of the holder of the cheque. Further, once the accused admitted his signature on the cheque and the agreement, the trial court has to presume that the cheque was issued as consideration for a legally enforceable debt. Reliance in this regard is placed upon the case law titled as Kalamani Tex & Anr. Vs. P. Balasubramanian (2021) 5 SCC 283 .
31. Ld. Counsel for accused/ appellant has argued that accused had handed over cheque in question to the complainant as a security cheque only which was misused by the complainant, however the accused did not produce any evidence in support of his aforementioned claims. It is also Qayam Shafi Vs Wasi Ul Hasan (CA No. 273/2023) Page 26 of 36 argued on behalf of accused that in the present matter, formal notice u/sec 251 CrPC was not framed against the accused and therefore the trial is vitiated.
32. The present matter is a summons trial. As per Sec. 2(w) of CrPC, a summons case means a case relating to an offence and not being a warrant- case. Further, as per Sec. 2 (x) of CrPC " a warrant-case means a case relating to an offence punishable with death, imprisonment for life or imprisonment for a term exceeding two years.
33. The provisions for a trial of summons case is provided from Sec. 251 to Sec. 259 of the CrPC. As per Sec. 251 CrPC, when in a summons case, the accused appears or is brought before the Magistrate, the particulars of the offence of which he is accused, shall be stated to him, and he shall be asked whether he pleads guilty or has any defence to make, but it shall not be necessary to frame a formal charge.
34. Therefore, in summary trial cases and summons procedure cases, the examination of accused has to be conducted under section 251 Code of Criminal Procedure. Under section 251 Code of Criminal Procedure, when the accused appears or is brought before Magistrate, particulars of the offence with which he is accused or the accusation leveled against the accused shall be stated to him and he shall be asked whether he pleads guilty or has any defence to make. Either in summary trial cases or in summons procedure cases, it is not at all necessary to frame a charge against the accused person. If accused pleads not guilty and claims to be Qayam Shafi Vs Wasi Ul Hasan (CA No. 273/2023) Page 27 of 36 tried after his examination under section 251 Cr.PC in a summary trial case, court has to conduct trial by following procedure for summary trials and pronounce judgment under section 264 Cr.PC. During examination under section 251 Code of Criminal Procedure if he pleads guilty the Magistrate shall record admission of the commission of the offence by the accused as may be as possible in the words used by accused and may in his discretion convict the accused. The very fact that in a Summons Case there is no specific provision of a discharge, unlike in Warrants Case (S.227/239/245 of CrPC) speaks volumes as to legislative intent of not having an elaborate hearing at the time of framing charge. What also deserves to be borne in mind is the fact that Summons Cases were not envisaged to be as long drawn out as Warrants Case and need for a specific discharge hearing was ousted. Therefore, framing of notice is not sine qua non for proceeding under summons trial case.
35. Charge is accusation made against person in respect of the offence alleged to have been committed by him. Section 2 (b) of Code of criminal Procedure "Charge" defined as under :-
"Charge" includes any head of the charge when the charge contains more head than one.
36. The question of framing charge arises only when the court finds that the accused is not entitled to discharge under Sections 227 and 239 Code of Criminal Procedure in Sessions Cases and Warrant Cases and the provisions relating to discharge of the accused are very important and the Qayam Shafi Vs Wasi Ul Hasan (CA No. 273/2023) Page 28 of 36 Judge must consider first whether there are any sufficient grounds for proceeding against the accused. Section 227 Code of Criminal Procedure empowers the Sessions Judge to discharge the accused in case he finds that there is no sufficient ground for proceeding against the accused. Likewise Section 239 Code of Criminal Procedure empowers the Magistrate to discharge the accused in case the charge levelled against the accused is groundless. In both the cases reasons for doing so, are to be recorded.
37. Law regarding framing of charges is now well settled. It is permissible for a trial Judge to sift and weigh the evidence for the limited purpose of finding out whether or not prima facie case against the accused has been made out or not. The material to determine prima facie case would depend upon the facts of each case. However it is truthfulness of not expected to decide the credibility and the available material at the stage of charge. The disputed defence of accused cannot be taken into consideration at this stage. Sufficiency of material or evidence is not required for framing of charges unless court finds that the materials are completely and absolutely absent for the purpose of trial. It is well settled that when there is evidence indicating strong suspicion against accused, the trial court will be justified in framing of charge and granting an opportunity to the prosecution to bring on record the entire evidence for the purposes of trial, but the same is not available to the court where the accused is facing offences which are triable as summons cases.
Qayam Shafi Vs Wasi Ul Hasan (CA No. 273/2023) Page 29 of 36Sec.252 Cr.P.C reads as follows :-
Substance of accusation to be stated:- When in a summons case the accused appears or is brought before the Magistrate, the particulars of the offence of which he is accused shall be stated to him and he shall be asked whether he pleads guilty or has any defence to make, but it shall not be necessary to frame a formal charge. Therefore, the Ld. Trial Court was required to be only convinced that there is a prime facie case, where there is no necessity to adduce reasons for framing charges. Therefore, in the present matter, once the accused had moved an application u/sec. 145(2) CrPC for seeking opportunity to cross-examine the complainant, it was assumed that he had understood the allegations against him and for which he even had led defence evidence. Therefore, I find no merit in the contentions raised on behalf of accused/ appellant that the Notice in the present matter was not framed against the accused by Ld. Trial Court.
38. Ld. Counsel for accused has argued that accused be granted an opportunity to lead additional evidence regarding the matter in which he has been acquitted by Ld. Trial Court, since the parties were having another transaction and the documents pertaining to them are required to be considered by Ld. Trial Court while deciding the present matter. It has been argued that the accused could not bring the same on record before Ld. Trial Court and therefore, he be granted opportunity to lead additional evidence in this regard.
Qayam Shafi Vs Wasi Ul Hasan (CA No. 273/2023) Page 30 of 3639. I have carefully considered the aforesaid contention raised on behalf of accused/ appellant, however the nature of transaction and the issue before Ld. Trial Court is pertaining to different cheques and therefore there is no merit in the aforesaid submissions since the other matter i.e. CC No. 622527/2016, in which the accused has been acquitted, has been decided when the DE in the present matter was concluded before Ld. Trial Court and therefore it is of no relevance as far as the defence of the accused in the present matter is concerned. More so, Ld. Trial Court had granted ample opportunity to the accused to lead defence evidence and it is the not the case of the accused that he was not granted opportunity to lead evidence in his defence.
40. Issue related to the execution of cheque for security purpose vis-a- vis section 138 of the Act needs to be examined. As per the Act, presumption is in favour of the holder of cheque regarding the execution of cheque for consideration and in discharge of a legally enforceable debt. If the accused is issuing a cheque after signing the same to the complainant albeit blank, he is also giving implied authority to the complainant to fill the blank details and to present the cheque on or after the date mentioned in the cheque. Therefore, aforementioned statutory presumptions can be raised in favour of the complainant even in case of blank cheque also. Reliance in this regard is placed upon the decision of the Hon'ble Supreme Court in the case of Bir Singh vs. Mukesh Kumar (2019) 4 SCC 197 , wherein Hon'ble Apex Court while upholding the validity of blank signed cheque and post dated cheque in a proceeding u/s 138 of the Act has interalia held the following :-
Qayam Shafi Vs Wasi Ul Hasan (CA No. 273/2023) Page 31 of 36"36. The proposition of law which emerges from the judgments referred to above is that the onus to rebut the presumption under Section 139 that the cheque has been issued in discharge of a debt or liability is on the accused and the fact that the cheque might be post dated does not absolve the drawer of a cheque of the penal consequences of Section 138 of the Negotiable Instruments Act.
38. If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other 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."
41. Further, the defence taken by Ld. Counsel for the accused that the findings of Ld. Trial Court being security cheque, could not form the basis of a complaint under Section 138 of the NI Act, is not tenable. Reliance in this regard is also placed upon the case law Suresh Chandra Goyal vs. Amit Singhal Crl. L.P 707/2014 wherein the Hon'ble High Court of Delhi, wherein it has been held that ;
"28. There is no magic in the word "security cheque", such that, the moment the accused claims that the dishonoured cheque (in respect whereof a complaint under Section 138 of the Act is preferred) was given as a "security Qayam Shafi Vs Wasi Ul Hasan (CA No. 273/2023) Page 32 of 36 cheque", the Magistrate would acquit the accused. The expression "security cheque" is not a statutorily defined expression in the NI Act. The NI Act does not per se carve out an exception in respect of a 'security cheque' to say that a complaint in respect of such a cheque would not be maintainable. "
42. Further, the cheque in question for an amount of Rs. 8,60,000/- was dishonoured on the ground of 'Account Closed' vide memo dated 30.11.2011. In the present matter, accused during his statement recorded u/sec. 313 CrPC has admitted his signatures on the cheque bearing no. 18.10.2010.
43. It should be noted that there exists a statutory presumption in favour of the complainant regarding the existence of a legally enforceable debt. It is for the accused to rebut the said presumption. The complainant is under no liability to actively prove the execution of loan. Burden of proof to prove that no loan was granted by the complaint lies on the accused but accused has failed to rebut the same by leading any cogent evidence or by proving any documentary proof.
44. Ld. Counsel for the accused/ appellant has argued that the accused did not receive any legal demand notice issued by the complainant in the present case. In order to substantiate the submission, he has referred to the statement recorded u/s 313 Cr.PC of the accused wherein, accused has stated that he did not receive any legal demand notice.
Qayam Shafi Vs Wasi Ul Hasan (CA No. 273/2023) Page 33 of 3645. Reference can be taken from the decision of Hon'ble Supreme Court in the case of C.C Alavi Haji Vs. Palapetty Muhd. & Anr 2007 6 SCC 555 wherein the Hon'ble Court has opined that section 27 of General Clauses Act gives rise to a presumption that service of notice has been effected when it is sent to the correct address by registered post. Unless and until the contrary is proved by the addressee, service of notice is deemed to have been effected at the time at which the letter would have been delivered in the ordinary course of business.
46. Complainant examined himself as CW1. His examination-in-chief was based on his affidavit, in which he deposed facts, in tune with his case. Complainant was cross-examined by accused but he did not put any questions to the complainant to derail his story or by which the veracity of complainant could be doubted. Further, the signature on the cheque in question is not disputed. Complainant has stood in the acid test of testimony. So, the probable defence of accused was not put to complainant for checking its veracity. The suggestions of deposing falsely, was refuted by complainant. Even otherwise, accused did not develop his case, based on said suggestions. He has also failed to bring any evidence in support of his version/ case.
47. In the instant case, accused in his statement u/sec. 313 CrPC, has himself admitted that he had taken a loan amount of Rs. 8 Lacs and has not disputed the agreement signed between the parties and has not disputed the signatures of the witnesses to the agreement Ex.CW1/A, which strengths the case of the complainant only.
Qayam Shafi Vs Wasi Ul Hasan (CA No. 273/2023) Page 34 of 3648. So, the net result is that, accused did not put his specific case to complainant by way of suggestions or by way of putting questions, based on that case. Accused as such shied away from putting his case upon the complainant which did not make his case probable. By not putting his case on to the complainant, while cross-examining complainant, accused failed to rebut the case of complainant and presumptions u/sec. 118/139 NI Act.
49. There was nothing unreasonable and improbable about the conduct, demeanor and facts deposed by complainant, in his testimony. I believed the testimony of complainant, to be trustworthy and reliable.
50. The probable defence of accused was never specifically put to complainant when complainant was cross-examined, for checking its veracity. Therefore, that defence was of no consequence to the cause of accused. So, accused failed to probablize his defence based on preponderance of probabilities. The version of the complainant is quite credible and probable.
51. The case laws relied upon by Ld. Counsel for accused are distinguishable on facts and therefore, do not help to the case of accused and are discarded accordingly.
52. The grounds of appeal as such, are vague in nature. Accused failed to highlight any shortcoming in the reasoning given by Ld. Trial Court in impugned judgment of conviction, based on facts of this case and law. Therefore, accused had filed present appeal, just for the sake of it. Same Qayam Shafi Vs Wasi Ul Hasan (CA No. 273/2023) Page 35 of 36 did not help his cause. Therefore, in my considered view, there is no merit in the present appeal filed by the accused/ appellant and the same stands dismissed. Impugned judgment dated 28.06.2023 and Order on Sentence dated 03.08.2023, passed by Ld. Trial Court, stands upheld.
File be consigned to Record Room after due compliance.
Digitally signedAnnounced in the Open Court SHEETAL by SHEETAL CHAUDHARY CHAUDHARY Date: 2024.09.04 Today. 15:40:16 +0530 [Sheetal Chaudhary Pradhan] ASJ-02, South-East/Saket/Delhi 04.09.2024 Qayam Shafi Vs Wasi Ul Hasan (CA No. 273/2023) Page 36 of 36