Delhi District Court
Jagdeep Singh vs . Mandeep Singh on 29 November, 2022
IN THE COURT OF SH. MAYANK GOEL: MM(NI ACT)-02, TIS HAZARI
COURTS: DELHI
_________________________________________________________________________
Ct. Cases No. 5475-2016
JAGDEEP SINGH Vs. MANDEEP SINGH
PS Khyala
U/s. 138 Negotiable Instrument Act
Jagdeep Singh,
S/o Sh. Mohinder Singh
R/o H-117, New Seelampur,
Shahdra,
New Delhi-110053.
................... COMPLAINANT
Vs.
Mandeep Singh,
S/o Sh. Sukh Dev Singh,
R/o Plot No. 66, Navyug Block,
Vishnu Garden,
New Delhi-110018
.......................... ACCUSED
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Ct. Cases No. 5475/2016
Jagdeep Singh Vs. Mandeep Singh
PS Khyala
U/s. 138 Negotiable Instrument Act Page 1 of 17
JUDGMENT
1) Offence complained of : Section 138 Negotiable Instrument Act 2) Plea of accused : Pleaded not guilty 3)Date of institution of the case : 29.11.2014 4) Final order : Acquitted 5) Date of reserving of order for judgment : 22.11.2022 6) Date of final order : 29.11.2022
___________________________________________________________________________________________________________ Ct. Cases No. 5475/2016 Jagdeep Singh Vs. Mandeep Singh PS Khyala U/s. 138 Negotiable Instrument Act Page 2 of 17 Brief reasons for decision:
1) The necessary facts for disposal of present case as reflected in the complaint are that the accused took a friendly loan for an amount of Rs.3,00,000/- from the complainant to overcome short-term financial crisis. That the accused has issued a cheque bearing number 081750 dated 18.10.2014 drawn on Axis Bank of India, Tilak Nagar Branch, New Delhi. The complainant accordingly, presented the aforesaid cheque which is Ex. CW1/1 and the same was returned unpaid by the banker for the reasons "Funds insufficient" vide return memo dated 21.10.2014 which is Ex. CW1/2 and Legal demand notice was sent by speed post on 05.11.2014 which is Ex.CW1/3. The original postal receipt is Ex. CW1/4. It is submitted by the complainant that the accused has failed to pay the amount of cheque in question within the stipulated period of 15 days. Thereafter, complainant has filed the present written complaint case u/s 138 r/w 142 of the Negotiable Instruments Act, 1881.
2) Cognizance of offence under section 138 NI Act was taken against the accused and summons was issued. Notice of accusation u/s 251 Cr.P.C. was served upon the accused on 10.11.2015 and plea of defence of the accused was also recorded on the same day in which he had not pleaded guilty and claimed trial. The plea of accused had also been recorded on the same day that the cheque in question bears his signature but he had not filled up the other particulars in the cheque. He and his brother had taken a joint loan of Rs.3,00,000/- from the complainant at 10% per month interest. He further stated that the complainant had advanced him sum of Rs.1,40,000/- by cheque and had advanced Rs.1,50,000 to his brother by cheque, deducting Rs.10,000/-
___________________________________________________________________________________________________________ Ct. Cases No. 5475/2016 Jagdeep Singh Vs. Mandeep Singh PS Khyala U/s. 138 Negotiable Instrument Act Page 3 of 17 towards expenses and other charges. He further stated that the complainant took the cheque in question from him and cheque bearing number 003199 drawn on Union Bank of India, Tilak Nagar from his brother as security. He further stated that his brother repaid the entire loan amount of Rs.3,00,000/- to the complainant i.e. Rs.2,00,000/- by way of cheque bearing number 021822 dated 21.07.2014 drawn on Axis Bank Tilak Nagar and Rs.1,00,000/- in cash. He further stated that complainant has misused the cheque in question and also misused the cheque belonging to his brother. He further stated that he do not owe any liability to the complainant qua the cheque in question. He further stated that he had received the legal demand notice issued by the complainant.
3) In post summoning evidence Complainant (CW-1) has been examined as sole complainant witness for proving his version of the case and was duly cross examined by Ld. Counsel for accused.
4) Thereafter memorandum of statement of accused u/s 313 Cr.P.C. read with Section 281Cr.P.C also recorded in the case wherein accused stated that he had taken a loan of Rs.1,40,000/- from the complainant on interest @ 10% per month in the year 2013. He further stated that total amount of loan including him and his brother was Rs.3,00,000/- and the complainant deducted Rs.10,000/- towards filing charges. He further stated that they used to pay the interest of Rs.30,000/- per month in cash. He further stated that they had repaid the whole loan amount in July, 2014. He further stated that they had paid Rs.2,00,000/- by way of bank transfer and Rs.1,00,000/- in cash but they had no written receipt of the payment in cash the further stated that the ___________________________________________________________________________________________________________ Ct. Cases No. 5475/2016 Jagdeep Singh Vs. Mandeep Singh PS Khyala U/s. 138 Negotiable Instrument Act Page 4 of 17 complainant had filed false case against them by misusing the cheques in question in order to extort money from them. He further stated that at the time of advancement of loan, the complainant took their signatures on the blank papers and took the blank signed cheques, which are the cheques in question. He further stated that they do not have any liability towards the complainant qua the cheques in question.
5) In his defence, no evidence has been led by the accused despite opportunity being given.
6) Thereafter, Learned Counsels for both the parties made detailed final oral submissions on behalf of respective parties.
7) Ld. Counsel for the complainant contended that the accused has admitted that his dishonored cheque in question bears his signature and legal presumption of consideration u/s 139 of NI Act would act against the accused. It is further stated by Ld. Counsel for the complainant that the testimony of complainant during cross-examination by Ld counsel for the accused is very consistent and the accused failed to shake his credibility and veracity. It is further stated by Ld. Counsel for complainant that the accused has duly admitted the receiving of legal demand notice but not replied the same. It is further stated by Ld. Counsel for complainant that accused admitted the taking of loan from the complainant at every stage of trial but alleged that he and his brother took a loan of Rs. 3,00,000/- in total i.e. Rs. 1,40,000/- in the account of accused ___________________________________________________________________________________________________________ Ct. Cases No. 5475/2016 Jagdeep Singh Vs. Mandeep Singh PS Khyala U/s. 138 Negotiable Instrument Act Page 5 of 17 Mandeep Singh and Rs. 1,50,000/- in the account of accused Jagdeep Singh after deducting of Rs. 10,000/- towards expenses and other charges by the complainant. It is further stated by Ld. Counsel for complainant that no complaint has been filed by the accused persons against the complainant. It is further stated by Ld. Counsel for complainant that the accused person did not even stop the payment of cheques in question. It is further stated by Ld. Counsel for complainant that accused has not lead any defence evidence with the fear that if he lead the defence evidence, the truth would come out. It is further stated by Ld. Counsel for complainant that accused failed to prove his defence. It is further stated by Ld. Counsel for complainant that accused failed to rebut the presumption raised against him under section 139 NI Act and therefore the accused may kindly be convicted in the present case. Ld. Counsel for complainant relied upon certain judgments which are as follows:
(a) (2007) 6 SCC 555, titled as "C.C. Alavi Hazi Vs. Palapetty Muhammed And Another".
(b) 2020 (2) CLJ 331 (SC), titled as "APS Forex Services Pvt.
Ltd. Vs. Shakti International Fashion Linkers".
(c) 2017 (2) JCC (NI) 106, titled as "Virender Soni Vs. The State of NCT of Delhi".
(d) 2018 [1] JCC [NI] 1, titled as "Ranbir Sharma Vs. M/s HBN Housing Finance".
(e) 2022 (3) CLJ 225 (SC), titled as "Tedhi Singh Vs. Narayan Dass Mahant".
(f) 2017 (3) JCC [NI] 153, titled as "Manish Singhal Vs. State of U.P."
(g) 2017 (4) CLJ 15 (NOC) Delhi, titled as "Sukhbir Singh Vs. Amandeep Singh".
(h) 2019 [2] JCC 1553, titled as "Bir Singh Vs. Mukesh
Kumar".
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(i) Cr. Rev. Pet. No. 1246/2019, D.O.D. 11.02.2020, titled as "Guddo Devi @ Guddi Vs. Bhupinder Kumar".
(j) Crl. A. No. 870/2013, titled as "Kajal Vs. Vikas Marwah", D.O.D 27.03.2014.
It is stated by Ld. Counsel for accused that there is lot of contradiction in the examination-in-chief of the complainant by way of affidavit and during his cross-examination. It is further stated by Ld. Counsel for accused that in his examination in chief by way of affidavit, it is deposed by the complainant that he had given the friendly loan of Rs. 3,00,000/- to each accused person, however during his cross-examination, it is deposed by the complainant that he do not have any personal relation with the accused persons and he had only relation with the accused persons through one person namely Baldeep Singh. It is further stated by Ld. Counsel for accused that in his examination in chief by way of affidavit, it is deposed by the complainant that he had given the alleged loan for an amount of Rs. 3,00,000/- to each accused, however, during his cross-examination, it is deposed by the complainant that he had given the alleged loan of Rs. 5,00,000/- to the accused persons and the accused persons assured to return total Rs. 6,00,000/- to him including Rs. 1,00,000/- as profit. It is further stated by Ld. Counsel for accused that in his examination in chief by way of affidavit, it is deposed by the complainant that the accused persons took the alleged loan to overcome short term financial crisis, however during his cross-examination, it is deposed by the complainant that the accused persons took the alleged loan for starting a new property project in Tilak Nagar, Vishnu Garden as the accused persons are builders. It is further stated by Ld. Counsel for accused that the complainant during his cross-examination deposed that there is a written agreement in respect of the alleged loan ___________________________________________________________________________________________________________ Ct. Cases No. 5475/2016 Jagdeep Singh Vs. Mandeep Singh PS Khyala U/s. 138 Negotiable Instrument Act Page 7 of 17 transaction but failed to produce the same. It is further stated by Ld. Counsel for accused that the accused failed to place on record any document or proof to show that he had advanced a loan of Rs. 2,10,000/- in cash to the accused persons jointly. It is further stated by Ld. Counsel for accused that during the cross-examination of the complainant, a serious doubt is also created in the financial capacity of the complainant as it is deposed by the complainant that at the time of alleged loan transaction, he earned around Rs. 30,000/- per month and his monthly expenses were around Rs. 10,000/- to Rs. 15,000/-, then how can he advance the alleged loan of Rs. 3,00,000/- each to accused persons. It is further stated by Ld. Counsel for accused that in order to cover up the fact of his financial capacity, it is deposed by the complainant during his cross- examination that he took cash from her mother to gave cash amount of the alleged loan i.e. Rs. 2,10,000/- and her mother was having the cash as she sold the family property in Burari for about Rs. 12,00,000/- Rs. 13,00,000/- in the year 2012. It is further stated by Ld. Counsel for accused that all these contradictions in the examination in chief of the complainant by way of affidavit and during his cross-examination creates serious doubt in the case of the complainant and the accused has very well rebutted the presumption raised against him under section 139 NI Act. It is further stated by Ld. Counsel for accused that the accused may kindly be acquitted in the present case.
8) This is the factual matrix of this case. Let us now examine the legal benchmark which is to be satisfied in order to constitute an offence under section 138 NI Act:
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(i) that the persons must have drawn a cheque on an account maintained by him in a bank for payment of certain amount of money to another person from out of that account.
(ii) That the cheque should have been issued for discharge in whole or in party of any debt or other liability.
(iii) that the cheque has been presented to a bank within a period of three months from the date on which it was drawn.
(iv) that cheque is returned by the bank unpaid because of the amount of money standing to the credit of account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account or any other reason.
(v) that the payee or the holder in due course of the cheque makes a demand for the payment of said amount by giving a notice in writing to the drawer of the cheque within 30 days of the receipt of the information by him from the bank regarding the return of cheque as unpaid.
(vi) that the drawer of the said cheque fails to make payment of the said amount to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice.
9) It is only when all the aforementioned ingredients are satisfied, that the person who had drawn the cheque can be deemed to have committed an offence u/s 138 of NI Act.
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10) As per section 114, Indian Evidence Act,1872 which is applicable to communication sent by the post, the court are to presume that in the common course of natural events, the communication would have been delivered at the address of the addressee. Section 27 of the General Clauses Act envisages that when a registered notice is posted , it is presumed to have been served unless rebuttal is given.
11) Final arguments addressed on behalf of both the parties have been heard and carefully considered along with the entire evidence on record.
12) In Kumar Exports Vs. Sharma Carpets, (2009) 2 SCC 513, the Hon'ble Supreme Court, held as under:
"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 nonexistence 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. Cases No. 5475/2016 Jagdeep Singh Vs. Mandeep Singh PS Khyala U/s. 138 Negotiable Instrument Act Page 10 of 17 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, 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."
13) In M.S Narayana Menon Vs. State of Kerala, (2006) 6 SCC 39, the Apex Court dealing with the statutory presumption under Sections 118(a) and 139 of the N. I. Act inter alia held as under:
"29. 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 "dis proved" have been defined in Section 3 of the Evidence Act (the interpretation clause)......
30. 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 nonexistence of the consideration so probable that a prudent man ought, under the circumstances of the particular case, to ___________________________________________________________________________________________________________ Ct. Cases No. 5475/2016 Jagdeep Singh Vs. Mandeep Singh PS Khyala U/s. 138 Negotiable Instrument Act Page 11 of 17 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.
XXX XXX XXX
32. 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 he relies. XXX XXX XXX Therefore, the rebuttal does not have to be conclusively established but such evidence must be adduced before the Court in support of the defence that the Court must either believe the defence to exist or consider its existence to be reasonably probable, the s standard of reasonability being that of the 'prudent man'."
14) It is a well settled proposition of law that once execution of Negotiable instrument is admitted, the presumption under Section 118(a) NI Act would arise that it is supported by a consideration. However, such presumption is rebuttable and the accused can prove the non-existence of a consideration by raising a probable defence. The burden upon the accused of proving the non- existence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies. To disprove the presumption, the accused 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, act upon the plea that it did not exist.
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15) The gist of two above mentioned precedents is that the accused is in trial under Section 138 NI Act is left with two alternatives for his defence. He can either show that consideration and debt did not exist for which direct evidence could be adduced which is seldom available or he can show by relying upon circumstantial evidence that under the particular circumstances of the case the nonexistence of consideration and debt is so probable that prudent man ought to suppose that no consideration and debt existed. It is evident that standard of proof to rebut the statutory presumption is not to prove it beyond the reasonable doubt as required in a criminal complaint. The onus to that effect on the accused is not onerous and what is required is a probable defence which could primarily find its foundation in preponderance of probabilities. In order to raise a probable defence, the accused can also rely on the evidence adduced by the complainant. However, a bare denial of the statutory presumption by the accused will not suffice.
16) In present case, accused has admitted his signature and account number with respect to cheque in question. It is the case of the complainant that he had advanced the loan of Rs. 3,00,000/- each to the accused and his brother, who is accused in other connected matter. It is the defence of the accused that he and his brother had not taken a loan of Rs. 3,00,000/- each from the complainant rather they had taken jointly a loan of Rs. 3,00,000/- from the complainant and had received Rs. 1,40,000/- in one account and Rs. 1,50,000/- in other's account after deduction of Rs. 10,000/- by the complainant towards expenses and other charges. The accused persons had also taken plea that they had return the loan of Rs. 3,00,000/- by way of bank transfer of Rs. 2,00,000/- and by ___________________________________________________________________________________________________________ Ct. Cases No. 5475/2016 Jagdeep Singh Vs. Mandeep Singh PS Khyala U/s. 138 Negotiable Instrument Act Page 13 of 17 giving Rs. 1,00,000/- in cash. However, the accused persons have proved that they had given Rs. 2,00,000/- by way of bank transfer as the same is admitted by the complainant. But the complainant refuted the receiving of Rs.2,00,000/- for the alleged loan transaction and stated that the said amount of Rs.2,00,000/- was given by the accused persons for some previous loan of Rs.2,40,000/-. The complainant also produced the statement of his bank account showing the transfer of Rs. 2,40,000/- in the account of accused persons i.e. Rs. 1,30,000/- in the account of accused Jitender Singh and Rs. 1,10,000/- in the account of accused Mandeep Singh. The accused persons failed to prove that they had given Rs. 1,00,000/- in cash to the complainant and consequently, failed to prove their defence.
Per contra, there is lot of contradiction in the examination-in-chief of the complainant by way of affidavit and during his cross-examination. In his examination in chief by way of affidavit, it is deposed by the complainant that he had given the friendly loan of Rs. 3,00,000/- to each accused person, however during his cross-examination, it is deposed by the complainant that he do not have any personal relation with the accused persons and he had only relation with the accused persons through one person namely Baldeep Singh. In his examination in chief by way of affidavit, it is deposed by the complainant that he had given the alleged loan for an amount of Rs. 3,00,000/- to each accused, however, during his cross-examination, it is deposed by the complainant that he had given the alleged loan of Rs. 5,00,000/- to the accused persons and the accused persons assured to return total Rs. 6,00,000/- to him including Rs. 1,00,000/- as profit. In his examination in chief by way of affidavit, it is deposed by the complainant that the accused persons took the alleged loan to overcome short term financial crisis, however during his cross-
___________________________________________________________________________________________________________ Ct. Cases No. 5475/2016 Jagdeep Singh Vs. Mandeep Singh PS Khyala U/s. 138 Negotiable Instrument Act Page 14 of 17 examination, it is deposed by the complainant that the accused persons took the alleged loan for starting a new property project in Tilak Nagar, Vishnu Garden as the accused persons are builders. There is grave contradictions in the examination-in-chief of the complainant by way of affidavit and his cross examination, which creates serious doubt on the veracity and credibility of the testimony of the witness/complainant. Moreover, the complainant failed to produce the written agreement of the alleged loan transaction as it is deposed by complainant during his cross-examination that the written agreement was executed. The complainant also failed to produce any document regarding the sale of their family property in Burari in the year 2012 by his mother and also failed to examine his mother as complainant's witness, to prove his financial capacity to advance the alleged loan. Moreover, the earning of the complainant is not that much that he can advance the alleged loan of Rs. 6,00,000/- or Rs.5,00,000/- to the accused persons. The complainant himself had created serious doubt about the alleged loan transaction. The facts of all the judgments filed by the complainant are different from the facts of the present case. Here though the admission of signature and account number has itself creates the presumption u/s 139 of NI act in favor of the complainant but the evidence led by the complainant itself creates doubt about the existence of a legally enforceable debt or liability. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. When an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of preponderance of probabilities. Therefore, if the accused is able to raise the probable defence which creates doubt about the existence of a legally enforceable debt or liability, the prosecution can fail.
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17) In the present complaint case, the complainant himself creates doubt in his evidences about the existence of any legally enforceable debt or liability in his favour to be paid by the accused.
18) Ld. Counsel for the complainant relied on several judgments. The proposition of law which has been clearly explained in Bir Singh V. Mukesh Kumar dated 06.02.2019 and have been subsequently relied upon by the Apex Court and other Hon'ble Courts is as follows:-
a) That the onus to rebut the presumption u/s 139 of the NI Act 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 the cheque of legal consequences.
b) That the bare reading of the provisions of Section 20, Section 87 and Section 139 of the NI Act makes it amply clear that a person who signed the 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 a payment of debt or in discharge of a liability. It has also been held that it is immaterial that the cheque may have been filed by any other person other than the drawer if the cheque has been duly signed by the drawer.
c) Even if the blank cheque leaf voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption u/s 139 of the NI Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of any debt.
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19) In view of above discussions, this court is of considered view that accused has created reasonable doubt over the veracity of story of complainant by balance of probabilities. It is noticeable that the complainant has to prove his case beyond reasonable doubt which the complainant has fails to do in present case.
20) In upshot of aforesaid discussion, I return finding of acquittal of accused for offence u/s 138 of NI Act in this case.
Digitally signed by MAYANK MAYANK GOEL
Announced in open court GOEL Date:
2022.11.29
15:53:42 +0530
On 29.11.2022 (MAYANK GOEL)
MM(NI ACT)-02/West District
THC Courts/Delhi
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