Delhi District Court
Madras vs . A. Vaidyanatha Iyer Air 1958 Sc on 3 September, 2021
IN THE COURT OF SH. KAPIL GUPTA,
METROPOLITAN MAGISTRATE, (NI ACT07) SOUTHWEST,
DWARKA COURTS, NEW DELHI
Ct. Case No. 5002571 of 2016
Sh. Rajendra Choudhary ............Complainant
Versus
Sh. Satish Kumar .............Accused
JUDGMENT
(1) Name of the complainant, Sh. Rajender Chaudhary, parentage and address R/o late Sh. HarpalSingh R/o RZD122, Gali No.15, Janki Puri, Bindapur, Uttam Nagar, New Delhi110059.
(2) Name of the accused, Sh. Satish Kumar parentage and address S/o Sh. Raj Gopal Singh R/o RZ65A/351, Gali No.12, Jagdamba Vihar, West Sagarpur, near Gyan Public School, New Delhi110046 (3) Offence complained of or U/s 138 NI Act proved (4) Plea of accused Pleaded not guilty (5) Date of institution of case 13.07.2016 (6) Date of conclusion of 31.08.2021 arguments (7) Date of Final Order 03.09.2021 (8) Final Order Convicted Ct. Case No. 5002571 of 2016 Page 1 of 29
1. The complainant Rajender Chaudhary had filed a complainant under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the 'Act') against the accused Satish Kumar.
2. As per complainant, he and the accused were having friendly relations and the accused approached him in January, 2015 stating that he had an urgent need of a sum of Rs. 5,00,000/ and requested him to give such sum as friendly loan for a period of six months, however, the complainant gave a sum of Rs.4,20,000/ to the accused as friendly loan for the said period. Upon expiry of such period, the complainant requested the accused to return his money, however, the accused showed his inability to return the loan amount and requested for some more time and then in the month of October, 2015, issued a post dated cheque bearing no. 912136 dated 26.04.2016 for a sum of Rs.4,20,000/ drawn on Canara Bank, Budhna. The complainant alleged that on presentment, the said cheque was returned unpaid vide returning memo dated 04.05.2016 with the reason "insufficient funds" and he thereby sent a legal notice dated 01.06.2016 to the accused, despite which he failed to repay the amount. Thereafter, complainant filed the present complaint case.
3. In his presummoning evidence, the complainant examined himself as CW1 vide his affidavit Ex. CW1/1. He reiterated the contents of the complaint and placed on record, cheque bearing No.912136 dated 26.04.2016 for a sum of Rs.4,20,000/ drawn on Ct. Case No. 5002571 of 2016 Page 2 of 29 Canara Bank, Budhna as Ex. CW1/A, cheque returning memo dated 04.05.2016 as Ex. CW1/B, legal demand notice dated 01.06.2016 as Ex. CW1/C, postal receipt as Ex. CW1/D and delivery report as Ex. CW1/E.
4. The accused was summoned and notice under Section 251 of Code of Criminal Procedure, 1973 (hereinafter referred to as 'CrPC') was served upon him on 08.02.2017, to which he pleaded not guilty and claimed trial. He stated that he had issued the cheque in issue and had received the legal notice dated 01.06.2016. He took the defence that the said cheque was given by him to a LIC agent. He further stated that he does not know the complainant and the complainant must have taken the cheque from the LIC agent.
5. Thereafter, the complainant examined himself as CW1, wherein he adopted his version as recorded in pre summoning evidence Ex. CW1/1 in the post summoning evidence as well.
6. In his crossexamination conducted on behalf of accused, the complainant stated that he has known the accused from the last 67 years and also knows where his house is situated. He stated that from the year 1998 to 2012, he was doing a business of garment export and the accused used to come to him. He denied the suggestion that he had never contacted the accused, but stated that he had not contacted him after giving demand notice u/s 138 NI Act. He stated that he is an income tax payee and used to file Income Tax Return (ITR), however, he had not shown the alleged payment in ITR of financial Ct. Case No. 5002571 of 2016 Page 3 of 29 year 20152016 as he had given friendly loan to the accused and also stated that the amount which was given to the accused was lying with him in cash and an amount of approximately Rs.1,75,000/ was lying with his wife, who is a government employee. He stated that he had not prepared any receipt of the alleged amount nor had he signed any document at the time of giving of the alleged amount. He also stated that the accused had handed over the alleged cheque in October, 2015 but he did not know the exact date. He further stated that he knows one person namely Mahipal who is a LIC agent but denied the suggestion that the accused had handed over blank signed cheque to LIC agent Mahipal for payment of LIC premium, who in turn handed over the same to him. He further denied the suggestion that particulars in the cheque were filled by him, except signature and account number and further denied the suggestion that he has no proof of the alleged amount which he had given to the accused. He admitted that he has not filed any bank account statement and ITR to prove the amount which he had given to the accused. He further denied the suggestion that he has filed false case with connivance of Mahipal to extort money of the accused.
7. Statement of the accused under Section 281 CrPC read with Section 313 CrPC was recorded on 13.07.2017, wherein all the incriminating evidence was put to him and the accused stated that he had not taken any loan from the complainant and that he had not given the cheque in issue to the complainant but to LIC agent in 2013 towards payment of installments of policy. He further stated that he Ct. Case No. 5002571 of 2016 Page 4 of 29 does not know the complainant and that he had made a complaint to the SHO regarding misuse of the cheque in issue.
8. The accused, in his defence evidence examined himself as DW1 wherein he deposed that he had given the cheque in issue to Mahipal Singh who he knows since 2001, in November, 2013 towards payment of LIC premium and thereafter Mahipal Singh approached him and took cash payment of Rs.22,000/ against the said cheque in presence of one person namely Suresh Kumar and despite repeated requests, Mahipal Singh neither returned the cheque nor issued receipt towards payment of LIC premium. He further deposed that he does not know the complainant and the present case has been filed by the complainant in collusion with Mahipal Singh after misusing the cheque in issue. He relied upon complaints filed by him against the complainant and Mahipal Singh Ex.DW1/1 and Ex.DW1/2. He further relied upon copy of quotation form of LIC Ex.DW1/3 (Colly), copy of LIC bond Ex.DW1/4, copy of passbook of Canara Bank Ex.DW1/5(Colly) and copy of LIC receipts as mark A and mark B.
9. The accused was cross examined on behalf of the complainant during which he stated that he does not have any document or receipt in respect of the fact that the cheque in issue was given to Mahipal Singh towards LIC premium, however, he stated that the said cheque was given to Mahipal Singh in presence of one person namely Avnish Kumar. He further stated that he has not issued any letter or notice to Mahipal Singh from November, 2013 to June, 2016 regarding the Ct. Case No. 5002571 of 2016 Page 5 of 29 cheque in issue. He voluntarily stated that no such letter or notice was given to Mahipal Singh due to 'confidence'. He admitted that no premium of his LIC had been deposited for the month of November, 2013. He further admitted that there is no receipt/document reflecting payment of Rs.22,000/ to Mahipal Singh. He further stated that all complaints to the police were made after receiving demand notice dated 01.06.2016. He denied the suggestion that he had issued the cheque in issue to the complainant towards discharge of loan liability of Rs.4,20,000/. He admitted that he has not filed any document on record to show that the cheque in issue was given to Mahipal Singh.
10. On 12.02.2020, an application filed on behalf of the accused under Section 311 CrPC was allowed and the accused placed on record certified copy of the application u/s 156(3) CrPC r/w section 200 CrPC along with documents which were exhibited as Ex.DW1/X (colly.). In his cross examination, he admitted that such complaint case has been filed against the complainant after filing of the present case. He further admitted that he does not have any document to show that he had given money and cheque to Mahipal Singh as stated in his complaint Ex.DW1/X (colly.).
11. ASI P Puttananja was examined as DW2 and he had brought original record of complaint vide DD No. 34B dated 20.06.2017 and true copy of the same was exhibited as Ex.DW2/A. During his cross examination, he stated that he does not have personal knowledge about the present case.
Ct. Case No. 5002571 of 2016 Page 6 of 2912. Ct. Sonu Yadav was examined as DW3 and he deposed that he cannot say whether document Ex.DW1/2 is the same complaint which was made by Satish Kumar on 27.06.2017, however, he stated that Ex.DW1/2 bears the endorsement regarding receipt of the same in the DCP office. During his cross examination, he stated that he does not have any personal knowledge about the present case.
13. Sh. Ajay Kumar was examined as DW4 and he had brought copy of LIC policy and copy of agent code record of LIC agent Mahipal Singh along with certificate under Section 65 B Indian Evidence Act, which was exhibited as Ex.DW4/A and Ex.DW4/B respectively. During his cross examination, he deposed that he does not have any personal knowledge about the present case.
14. DW5 Sh. Suresh Pal in his examination in chief deposed that he knows the accused as he is his neighbour and that the accused had given Rs.22,000/ to Mahipal Singh in his presence at his house for the payment of installment of the insurance premium. He further deposed that he knows Mahipal Singh and that the accused had asked him to return his cheque but Mahipal Singh told the accused that he will handover the same on the next date.
In his cross examination, he stated that the amount of Rs.22,000/ was given in January, 2014. He stated that the accused had informed him that Mahipal Singh had not returned his cheque after 15 days. He admitted that he had not seen the cheque personally and also that as per his knowledge, the accused did not demand the cheque from Mahipal Singh in writing. He further stated that he is not Ct. Case No. 5002571 of 2016 Page 7 of 29 aware whether the accused had taken friendly loan from the complainant and issued the cheque to return the loan amount.
15. Sh. Mukesh Kumar was examined as DW6. He deposed in his examination in chief that he knows both the accused as well as Mahipal Singh. He further deposed that the relative of the accused had taken policy through the accused from Mahipal Singh. He further deposed that Mahipal Singh was also running a Committee and relative of the accused was also a member of the same and they had some dispute in the committee whereafter Mahipal Singh stated that the accused is responsible for his relative for the nonpayment of installment of the Committee. He deposed that upon asking Mahipal Singh if he has any loan of the accused, Mahipal Singh denied. He further deposed that upon asking Mahipal Singh as to why he has filed the present false case against the accused through complainant, Mahipal Singh told him that he has loan liability of the complainant, so he handed over the blank signed cheque of the accused to the complainant.
Upon his cross examination, he admitted that he does not have any document regarding the statement given by him in his examination in chief. He voluntarily stated that Mahipal Singh had cheated the amount of installment of his brother in law. He denied the suggestion that Mahipal Singh had no concern with the present case.
16. Sh. Arnav Kumar Dey was examined as DW7 and had brought joint account statement of Satish Kumar and Gopal Raj which was Ct. Case No. 5002571 of 2016 Page 8 of 29 exhibited as Ex.DW7/A. No questions were put to the witness in the cross examination
17. I have heard the final arguments as advanced by Ld counsel for parties at length and have given my thoughtful consideration to rival submissions made by them. I have also gone through the material placed on record.
18. During the final arguments, Ld. counsel for the complainant submitted that the accused had admitted his signature on the cheque in issue. He contended that the accused did not file anything on record to show that the cheque in issue was given by the accused to LIC Agent Mahipal Singh. He lastly argued that all ingredients under Section 138 NI Act have been proved by the complainant and hence the accused must be convicted.
19. Per contra, Ld counsel for the accused argued that the complainant in his cross examination has admitted that he does not know the date of giving of the alleged loan and has also neither shown the alleged loan in his income tax return nor filed any document or receipt to show the factum of advancement of the alleged loan. He argued that the cheque in issue was given to LIC Agent Mahipal Singh, who later misused such cheque by giving it to the complainant herein and prayed that the accused be acquitted of the offence u/s 138 NI Act.
Ct. Case No. 5002571 of 2016 Page 9 of 2920. Before proceedings further, it would be appropriate to discuss, that as per Section 138 of the NI Act, following ingredients have to be proved by the complainant:
1. The accused issued a cheque on account maintained by him with a bank.
2. The said cheque has been issued in discharge, in whole or in part, of any legal debt or other liability.
3. The said cheque has been presented to the bank within a period of three months from the date of cheque or within the period of its validity.
4. The aforesaid cheque, when presented for encashment, was returned unpaid/dishonoured.
5. The payee of the cheque issued a legal notice of demand to the drawer within 30 days from the receipt of information by him from the bank regarding the return of the cheque.
6. The drawer of the cheque failed to make the payment within 15 days of the receipt of aforesaid legal notice of demand.
21. It is also apt to discuss that a negotiable instrument including a cheque carries following presumptions in terms of Section 118
(a) and Section 139 of the NI Act:
(a) Section 118 of the NI Act provides :
"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 Ct. Case No. 5002571 of 2016 Page 10 of 29 every such instrument, when it has been accepted, indorsed, negotiated or transferred was accepted, indorsed, negotiated or transferred for consideration;"
(b) Section 139 of the N.I Act further provides as follows: "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".
Thus, the combined effect of Section 118(a) and Section 139 of NI Act raises a presumption in favour of the holder of the cheque that he has received the same for discharge, in whole or in part of any debt or other liability.
22. For appreciating the legal position, reliance is placed on the judgement of the Hon'ble Supreme Court in the case of Hiten P. Dalal v. Bratindranath Banerjee (2001) 6 SCC 16 wherein it was held that:
"22. Because both Sections 138 and 139 require that the Court "shall presume" the liability of the drawer of the cheques for the amounts for which the cheques are drawn, as noted in State of Madras vs. A. Vaidyanatha Iyer AIR 1958 SC 61, it is obligatory on the Court to raise this presumption in every case where the factual basis for the raising of the presumption had 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" (ibid). Such a presumption is a presumption of law, as distinguished from a presumption of fact which describes provisions Ct. Case No. 5002571 of 2016 Page 11 of 29 by which the court "may presume" a certain state of affairs. Presumptions are rules of evidence and do not conflict with the presumption of innocence, because by the latter all that is meant is that the prosecution is obliged to prove the case against the accused beyond reasonable doubt. The obligation on the prosecution may be discharged with the help of presumptions of law or fact unless the accused adduces evidence showing the reasonable possibility of the nonexistence of the presumed fact."
23. Further, recently the Hon'ble Supreme Court in the case titled as Kalamani Tex & Anr. v. P. Balasubramanian (2021 SCC Online SC 75) held that:
"14. Adverting to the case in hand, we find on a plain reading of its judgment that the trial Court completely overlooked the provisions and failed to appreciate the statutory presumption drawn under Section 118 and Section 139 of NIA. The Statute mandates that once the signature(s) of an accused on the cheque/negotiableinstrument are established, then these 'reverse onus' clauses become operative. In such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him."
24. From the ratio decidendi laid down in the aforesaid judgements, it is clear that for the offence under Section 138 of the Act, the presumptions under Section 118(a) and Section 139 of NI Act have to be compulsory raised as soon as execution of cheque by accused is admitted or proved by the complainant and thereafter, burden is shifted to accused to prove otherwise.
Ct. Case No. 5002571 of 2016 Page 12 of 29A presumption is not in itself evidence but only makes a prima facie case for a party for whose benefit it exists. Presumptions, both under Sections 118 and 139 of NI Act are rebuttable in nature.
25. In the present case, the accused has admitted issuing the cheque in issue in the notice served upon him under Section 251 CrPC as well as in his statement recorded under Section 281 r/w Section 313 CrPC.
26. It is pertinent to refer to the judgment of the Hon'ble Apex Court in the case of M/s Kumar Exports Vs. Sharma Carpets, (2009) 2 SCC 513 at this juncture, wherein it was held that:
"20. The accused in a trial under Section 138 of the Act has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case the non existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the Court need not insist in every case that the accused should disprove the nonexistence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the Ct. Case No. 5002571 of 2016 Page 13 of 29 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 nonexistence 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, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on 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."
27. Further, the above said principles have also been recently crystallized by Hon'ble Supreme Court in the case of Basalingappa vs Mudibasappa, (2019) 5 SCC 418, which is as follows:
"25. We having noticed the ratio laid down by this Court in above cases on Sections 118(a) and 139, we now summarise the principles enumerated by this Court in following manner:
(i) Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.
(ii) The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable Ct. Case No. 5002571 of 2016 Page 14 of 29 defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
(iii) To rebut the presumption, it is open for the accused to rely on evidence led by him or accused can also rely on the materials submitted by the complainant in order to raise a probable defence.
Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.
(iv) That it is not necessary for the accused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden.
(v)It is not necessary for the accused to come in the witness box to support his defence."
28. As noted earlier, the accused has admitted signature on the cheque in issue and hence, in the present case, a presumption under Section 139 NI Act has to be compulsorily raised in favour of the complainant. In view of the same, the burden of proof shifts upon the accused to rebut the presumption that such liability does not exist.
The presumption raised under Section 139 of NI Act is that of legally enforceable debt or liability and it is for the accused to raise a probable defence to rebut the said presumption. Further, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a Ct. Case No. 5002571 of 2016 Page 15 of 29 probable defence. The accused has to discharge such burden by showing preponderance of probabilities.
29. The court has to now consider whether the accused has been successful in discharging the burden of proof.
30. In the present case, as noted above, accused has admitted issuing the cheque in issue, however accused has maintained that the said cheque was issued to Mahipal Singh. In his cross examination, the accused has admitted that he does not have any document or receipt to prove that the cheque in issue was given to Mahipal Singh towards LIC premium. He stated in his cross examination that the said cheque was given to Mahipal Singh in presence of one person namely Avnish Kumar. However, the accused has not examined the said person namely Avnish Kumar. He further admitted that he had not issued any letter or notice to Mahipal Singh from November, 2013 to June, 2016 regarding the cheque in issue. He further admitted that there is no receipt/document reflecting payment of Rs.22,000/ to Mahipal Singh. Further, upon perusal of DW1/1, DW1/2 and DW2/A, it is revealed that these are the complaints made by the accused to police authorities reciting the misuse of cheque by Mahipal Singh and the complainant. It is however worthy to note that such complaints have admittedly been filed by the accused after filing of the present case
31. It is worthy to note that despite stating that the cheque in issue was given to Mahipal Singh in presence of one person namely Avnish Ct. Case No. 5002571 of 2016 Page 16 of 29 Kumar, to utter shock and surprise, the accused has not bothered to examine the said person Avnish Kumar who may have been a star witness and further could also not bring anything on record in support of such contention. Further, it is also noteworthy that the accused never demanded back the cheque from Mahipal Singh or even filed a complaint against him until before receiving the legal demand notice qua the present case. This again raises a suspicion over the claim of the accused that the cheque in issue was given to a person namely Mahipal Singh, as any prudent person would immediately atleast give a notice in writing to a person who has been withholding something as valuable as a blank signed cheque of the accused. Even if it was to be believed that the cheque in issue was given to Mahipal Singh and has been later misused by him, still, an adverse inference can be drawn by the fact that no complaint was ever filed against Mahipal Singh who has holding blank signed cheque of the accused until before he received legal notice from the complainant. In the totality of facts and circumstances of the present case, nonexamination of such vital witness by the accused and nondemand of cheque, atleast in writing, raises a serious doubt about the veracity of defence taken by the accused.
32. Upon perusal of the record, it is revealed that the application u/s 156(3) CrPC exhibited as Ex.DW1/X (colly.), which was filed by the accused against the complainant and Mahipal Singh has been admittedly dismissed by the Ld. Concerned Court vide order dated 19.07.2018. Moreover, as per the Ld. Counsel of the accused, summons have not yet been issued against the complainant and Ct. Case No. 5002571 of 2016 Page 17 of 29 Mahipal Singh, as on date, in the complaint filed under Section 200 CrPC. Further, in his cross examination, the accused has admitted that such complaint case has been filed against the complainant herein only after filing of the present case. He further admitted that he does not have any document to show that he had given money and cheque to Mahipal Singh as stated in his complaint Ex.DW1/X (colly.). Thus, in light of the above observations, the complaint case filed by the accused herein under Section 200 CrPC against the complainant herein does not have any bearing with reference to the present complaint case under Section 138 NI Act.
33. Ld. Counsel for the accused stated that documents exhibited as DW1/3, DW1/4, Mark A, Mark B, DW4/A and DW4/B disclose that LIC policy was taken by the accused. However, the accused has failed to point out if such documents disclose that cheque in issue was given by the accused to Mahipal Singh towards payment of LIC Premium. Thus, such documents relied upon by the accused, fail to come to his aid in any manner whatsoever for dislodging presumptions under the NI Act.
34. Ld. Counsel for the accused has relied upon DW1/5 and DW7/A to argue that the cheque no. 912136 could not have been issued by the accused later than cheque no. 912137, however, no law or rule has been pointed out on behalf of the accused which stipulates that a prior leaf of the cheque has to be issued before the subsequent leaf of the cheque i.e. the cheques have to be issued in chronological order of the cheque book. Thus, such documents relied upon by the Ct. Case No. 5002571 of 2016 Page 18 of 29 accused also don't prove the case of the accused in any manner whatsoever.
35. In the deposition of DW5, it has merely been revealed that accused has given amount of Rs.22,000/ to Mahipal Singh in his presence, however it is not the case that the cheque in issue was given by the accused to Mahipal Singh in his presence. Further the witness had merely stated that the accused had informed him that Mahipal Singh has not returned his cheque after 15 days. Thus no material evidence comes to rescue of the accused from the deposition of the said witness.
36. In the deposition of DW6 it has been stated, that upon asking Mahipal Singh as to why he has filed the present false case against the accused through complainant, Mahipal Singh stated that he has loan liability of the complainant, so he handed over the blank signed cheque of the accused to the complainant, however, upon his cross examination, the witness admitted that he does not have any document regarding such statement. Moreover, it is again not the case that the cheque in issue was given by the accused to Mahipal Singh in his presence or even if Mahipal Singh gave the cheque in issue to the complainant in his presence. Thus, the evidence of such witness also does not come to the assistance of the accused.
37. It is also pertinent to mention that the entire defence of the accused has revolved around the fact that the cheque in issue was given to Mahipal Singh, who later in connivance with the Ct. Case No. 5002571 of 2016 Page 19 of 29 complainant misused the cheque and filed the present case. However, surprisingly, the accused has not bothered to examine Mahipal Singh who could have been a pivotal witness. In facts and circumstances of the present case, nonexamination of such vital witness by the accused, raises a serious doubt about the veracity of the defence taken by the accused.
38. It is further noteworthy that the reason for dishonour of cheque is 'insufficient funds' and no explanation has been given by the accused as to why did he not issue stop payment instruction to his bank upon non return of cheque by Mahipal Singh. Any reasonable person would rush to give instructions of stop payment as soon as they discover that the cheque that they have issued might be misused and not doing so raises a suspicion over the case of the accused.
39. It was argued by Ld. counsel for the accused that the complainant has failed to prove the sources of his funds to advance loan of such a huge amount. He placed reliance upon the judgement of the Hon'ble High Court of Delhi in the case titled as Kulvinder Singh vs Kafeel Ahmed, 2013 SCCOnLine Del 34 in support of his claim.
Upon a careful perusal of the said judgement, it is observed that the facts of that case were that the complainant had advanced a loan of Rs. 9,30,000/ to the accused. The Hon'ble High Court held that "If such a huge amount of money is advanced as a loan to the respondent, the petitioner ought to have shown to the court concerned as to the source from where he had generated such a huge Ct. Case No. 5002571 of 2016 Page 20 of 29 amount". Moreover, in the said case accused had stated that he was a member of a committee where he was contributing an amount and the petitioner used to take two duly signed cheques from each of the member. The Hon'ble High Court whereafter observed that "These facts get verified from the testimony of two other independent witnesses DW2, Gulam Moinuddin and DW3, Masoom. Their testimony has not been dented. So this clearly establishes that the petitioner was running some kind of committee and was taking two security blank cheques duly signed by the member."
40. In the facts and circumstances of the present case, the complainant has categorically stated that the amount which was given to the accused was lying with him in cash and an amount of approximately Rs.1,75,000/ was lying with his wife. Moreover, in the present case, the accused has admitted issuing the cheque in issue and his stand that the cheque in issue was given to Mahipal Singh could not be proved by any of the witnesses examined by the accused as seen above, as none of the witnesses examined by the accused had actually seen him giving the cheque in issue to Mahipal Singh and thus, the burden to dislodge the presumptions still lies upon the accused in the present case. Moreover, as observed earlier, the accused has failed to examine Mahipal Singh or Avnish Kumar, in whose presence the cheque in issue was allegedly given to Mahipal Singh. Thus, the judgement of Kulvinder Singh vs. Kafeel Ahmed (supra) is, respectfully, not applicable in the facts and circumstances of the present case.
Ct. Case No. 5002571 of 2016 Page 21 of 2941. Ld. Counsel for the accused had also relied upon the judgement of Basalingappa vs Mudibasappa (supra) in support of his claim that the complainant did not have the financial capacity to extend the alleged loan. However upon a careful scrutiny of the said case, it is observed that the issue in that case was whether any probable defence was raised by the accused as the complainant in the said case had stated that he does not remember the date and time of the loan and had further made several payments from the same corpus of amount.
42. In the present case, complainant has stated that he works as a LIC agent and moreover it was stated by him that the amount which was given to the accused was lying with him in cash and an amount of about Rs.1,75,000/ was lying with his wife. He has also stated in his complaint that the accused had approached him in January, 2015 for the loan, whereafter he extended it. Moreover, it is neither the case of the accused that the complainant could not have had cash of such amount with him due to his financial incapability and nor was it the case of the accused that the complainant has extended loans to multiple people and hence did not have the financial capacity to extend the present loan. Thus, since the facts of the present case are not similar to the facts of the case of Basalingappa vs Mudibasappa (supra); the said judgement is, respectfully, not applicable in the facts and circumstances of the present case.
43. It was further argued by Ld. Counsel for the accused that specific date of giving of loan has not been mentioned in the Ct. Case No. 5002571 of 2016 Page 22 of 29 complaint or in the affidavit filed by the complainant and no receipt of the alleged extending of loan has been furnished by him either.
44. In order to appreciate the argument, reliance is placed on judgement of the Hon'ble Supreme Court in the case titled as Rohitbhai J Patel vs The State Of Gujarat, (2019) 18 SCC 106 wherein it has been held that:
"20. The observations of the Trial Court that there was no documentary evidence to show the source of funds with the respondent to advance the loan, or that the respondent did not record the transaction in the form of receipt of even kachcha notes, or that there were inconsistencies in the statement of the complainant and his witness, or that the witness of the complaint was more in know of facts etc. would have been relevant if the matter was to be examined with reference to the onus on the complaint to prove his case beyond reasonable doubt. These considerations and observations do not stand in conformity with the presumption existing in favour of the complainant by virtue of Sections 118 and 139 of the NI Act. Needless to reiterate that the result of such presumption is that existence of a legally enforceable debt is to be presumed in favour of the complainant. When such a presumption is drawn, the factors relating to the want of documentary evidence in the form of receipts or accounts or want of evidence as regards source of funds were not of relevant consideration while examining if the accused has been able to rebut the presumption or not. The other observations as regards any variance in the statement of complainant and witness; or want of knowledge about dates and other particulars of the cheques; or washing away of the earlier cheques in Ct. Case No. 5002571 of 2016 Page 23 of 29 the rains though the office of the complainant being on the 8th floor had also been of irrelevant factors for consideration of a probable defence of the appellant."
45. In the present case, the signature on the cheque in issue has been admitted by the accused and thus, in the present case also, presumption of a legally enforceable debt is raised in favour of the complainant as discussed above. Moreover, as per the ratio decidendi laid down by the Hon'ble Supreme Court in the above stated case, when such a presumption is drawn, the factors relating to the want of documentary evidence in the form of receipts or accounts or want of evidence as regards source of funds are not of relevant consideration while examining if the accused has been able to rebut the presumption or not. Further, it has been stated in the complaint that the accused approached the complainant in January, 2015 stating that he had urgent need of a sum of Rs.5,00,000/ and requested him to give the sum as friendly loan for a period of six months, and the complainant gave a sum of Rs.4,20,000/ which could not be rebutted by the accused. Furthermore, the accused could not show that the complainant has deposed falsely.
46. Moreover, after appreciating the judgement of Rohitbhai J Patel vs The State Of Gujarat (supra) it is also observed that mere questioning the capacity of the complainant to grant the alleged loan to the accused will not support his cause, more so when the potential of the complainant to grant the alleged loan could not be impeached. Even no evidence on the lack of financial capacity has been placed on Ct. Case No. 5002571 of 2016 Page 24 of 29 record by the accused. Therefore, in my considered opinion, the burden did not shift back to the complainant to prove his financial capacity and moreover, in view of the above observation, non production of receipt or nonmentioning of exact date on which the loan was stated to be advanced to the accused are irrelevant considerations for deciding the present case.
47. It was further argued by Counsel for the accused that the complainant has not disclosed the loan in his Income Tax Return and thus, it creates a doubt on his case.
In this regard, reliance is placed on the judgment of the Hon'ble High Court of Delhi in the case of Sanjay Arora v. Monika Singh (2017 SCC Online Del 8897) wherein it was held that:
"24. mere admission of the complainant that he was earning only Rs.12,000/ per month from small business or his failure to file income tax returns, or his omission to produce the bank pass book or to examine Chhotu as a witness in corroboration, are inconsequential. In order to rebut the statutory presumption, it was the burden of the respondent to prove the facts she had pleaded in answer to the notice under Section 251 Cr.P.C.. No material in support of such plea having come on record, the statutory presumption under Section 139 Negotiable Instruments Act in the case at hand has not been rebutted."
In the case at hand, accordingly, statutory presumption has to be rebutted by the accused only, even upon nondisclosure in the income tax return and the burden to prove the defence taken by the Ct. Case No. 5002571 of 2016 Page 25 of 29 accused has to be discharged by him. In view of totality of the facts and circumstances of the present case and in view of the judgement of the Hon'ble Court of Delhi in the above stated case, the court does not find merit in the said submission of Ld. Counsel for the accused.
48. Reliance is also placed on the judgment of the Hon'ble High Court of Delhi in the case titled as Dilip Chawla v. Ravinder Kumar and Ors., 2017 SCC OnLine Del wherein it has been held as follows:
23. The advancement of loan in cash may entail negative consequences for a party especially an Income Tax assessee as his having acted in breach of Section 269SS of Income Tax Act, 1961. Chapter XXB provides for the requirement as to the mode of acceptance, payment or repayment in certain cases to counteract evasion of tax. Section 269SS mandates that no person, after the cut off date shall take or accept from any other person any loan or deposit otherwise than by an account payee cheque or an account payee bank draft if the amount is more than Rs.10,000/. Breach of Section 269SS of the Income Tax Act provides penalty to which a person would be subjected to under Section 271D.
24. However, Section 271D does not provide that such transaction would be null and void. The payer of money in cash, in violation of Section 269SS of the Income Tax Act can always have the money recovered.
Thus, in view of the above ratio decidendi, it is held that non disclosure of loan in ITR, may give rise to consequences under Income Tax Act, 1961; but does not make the transaction Ct. Case No. 5002571 of 2016 Page 26 of 29 illegal/void; and hence the liability under Section 138 NI Act, remains unaffected and thus again the argument advanced on behalf of the accused does not hold water.
49. Ld. Counsel for the accused had also argued that the cheque in issue was issued in a blank signed manner and details had been subsequently filled by the complainant and thus it has been misused.
50. For appreciating such argument, reliance is placed upon the decision of the Hon'ble Apex Court in the case titled as Bir Singh vs Mukesh Kumar, (2019) 4 SCC 197 wherein it has been held as follows:
37. A meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted.
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.
Ct. Case No. 5002571 of 2016 Page 27 of 2951. Upon appreciation of above said judgment, it is observed that even if it was to be believed that the accused had issued the cheque in issue in a blank signed manner and the other details were filled by the complainant, such defence will not come to the rescue of the accused as per the binding ratio decidendi of the Hon'ble Supreme Court in the above stated case, as the same 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.
52. In considered opinion of the court the present complaint has disclosed the existence of a legally enforceable debt or liability vide the cheque in issue, return memo and the legal notice brought on record. Moreover, the complainant has successfully proved all the necessary ingredients of Section 138 of NI Act. On the other hand, the accused has failed to rebut the presumption in favour of complainant either on the basis of other material available on record or by adducing any cogent defence evidence as except for bare averments, which were not at all substantiated by any material on record.
53. In view of the evidence adduced, documents put forth and arguments advanced by the parties and further in view of the above discussion, the court is of the considered opinion that the accused Satish Kumar is guilty of offence under Section 138 of Negotiable Ct. Case No. 5002571 of 2016 Page 28 of 29 Instruments Act, 1881 and accordingly, he is hereby convicted under Section 138 of Negotiable Instruments Act, 1881 .
Copy of this order be given dasti to the convict free of cost as per rules.
Announced in the court on 03.09.2021.
(Kapil Gupta) Metropolitan Magistrate(NI Act)7 South West District, Dwarka Courts, New Delhi Ct. Case No. 5002571 of 2016 Page 29 of 29