Delhi District Court
Cc No.727/2021 Narvedeshwar Singh vs . Saravjeet Singh Page No.1 Of 21 on 23 February, 2023
IN THE COURT OF SHRI ARIDAMAN SINGH CHEEMA: MM (NI ACT) DIGITAL COURT-06: (South District) SAKET COURTS: NEW DELHI CC No. 727/2021 CNR : DLST020028972021 Under Section 138 of Negotiable Instruments Act,1881 In the matter of: NARVDESHWAR SINGH S/O LATE SH. SHRI RAM BAHAL SINGH R/O N-70, GALI NO: 3, N-BLOCK, SADATPUR EXT., DELHI-110054 ... Complainant Versus SARVJEET SINGH S/O LATE SH. HARI PRASAD SINGH R/O SHIVAM ELECTRONICS NEXT TO HITACHI ATM, PIPRAULI ROAD BOKTA, ... Accused GIDA SECTOR-13, DISTRICT : GORAKHPUR, U.P-273209 : 09.02.2021 Date of Institution Date on which judgment was reserved : 21.01.2023 Date of Judgment : 23.02.2023 Digitally signed by ARIDAMAN ARIDAMAN SINGH SINGH CHEEMA CHEEMA Date: 2023.02.23 17:19:57 +0530 CC No.727/2021 NARVEDESHWAR SINGH Vs. SARAVJEET SINGH Page No.1 of 21 JUDGMENT
BRIEF FACTS OF THE CASE :
1. The present case has been filed by complainant under Section 138 of Negotiable Instruments Act, 1881 (hereinafter referred to as NI Act).
2. The present complaint alleges, inter alia, that complainant and accused were having good terms with each other. In the 1st week of December, 2017 accused approached the complainant for finanicial help with the understanding that the same will be returned within three months. On 05.12.2017, complainant gave Rs. 6,00,000/- in cash to accused and on 03.04.2018 complainant further gave Rs. 2,40,000/- to accused through Cheque No. 008402 dated 03.04.2018 for Rs.
2,40,000/- drawn on Allahabad Bank, Sahjanwa, dist. Gorakhpur, U.P. from the account of the complainant's wife namely Urmila Singh with the understanding that in case the same is not returned within 20 days, the accused being owner of one shop located at bokta Chauraha, Sector-13, Gida, District Gorakhpur will be taken over by the complainant and respective documents will be executed for transfer of title documents in favor of the complainant. The payment/receipt of Rs. 8,40,000/- of the same was also confirmed/admitted by the accused vide Agreement dated 03.04.2018 which is Ex. CW-1/1 and the copy of statement of Account of Mrs. Urmila Singh W/o accused which is Ex. CW-1/2. The accused was unable to return the admitted amount of Rs. 8,40,000/- within 20 days as agreed by the accused as well as the accused was not ready to transfer the title/ownership rights/possessions of the abovesaid shop, after too much efforts of the complainant, the accused agreed to make the payment and came with the proposal in the month of Novermber, 2020 and settled the matter in total of Rs. 15,74,000/- and against the said outstanding he issued three cheques. Accused issued the cheque in question bearing no. 131076 dated 15.12.2020 for Rs. 5,74,000/- to complainant which is Ex. CW-1/3. Complainant deposited the cheques to his banker, however, the cheque had been returned unpaid vide returning memo Ex. CW-1/4 dated 05.01.2021 with the remark "Payment Stoppd by Drawer" Complainant sent a legal notice dated 06.01.2021 and copy of which is Ex. CW-1/5. Postal receipts is Ex. CW-1/6, courier receipt is Ex.
Digitally signed by ARIDAMAN ARIDAMAN SINGH CHEEMA SINGH Date: CHEEMA CC No.727/2021 NARVEDESHWAR SINGH Vs. SARAVJEET SINGH Page No.2 of 21 2023.02.23 17:20:07 +0530
CW-1/7and copy of tracking report of speed post as well as courier are Ex. CW- 1/8 and Ex. CW-9 respectively, no payment was made within 15 days, hence this complaint.
3. The cognizance of the offence u/s 138 NI Act was taken on 17.02.2021.
4. On the accused entering appearance, Notice u/s 251 of Code of Criminal Procedure (hereinafter referred to as Cr.PC) was framed against the accused to which he pleaded not guilty and claimed trial. In his defence, accused stated that "I plead not guilty and claim trial. I had taken a loan of Rs. 8.4 lakhs. Rs. 6 lakhs were taken from Anshuman Singh and Rs. 2.4 from Narvadeshwar Singh. Narvadeshwar Singh asked me to pay 30000 per month to clear my debt towards the whole 8.4 lakhs loan. I have paid Rs. 5.85 lakhs. In November 2020, I met Mr. Narvadeshwar Singh and the remaining debt was settled for Rs. 2.55 lakhs pending to be paid within 20 days. I even sold my hosue to pay the money but he was out of town and did not take the payment. I admit my signatures on the cheque but I did not fill in the details. I had given 4 blank cheques along with 2 stamp papers of rs. 100 each. I am willing to pay the balance 2.55 lakhs within 2-3 month if they wish to settle. I had received legal demand notice from the complainant but thought of settling the matter through court only".
5. On the prayer of the accused, this court has admitted to cross examine the complainant on 19.10.2022. In CE, CW-1 was examined and dishcarged.
6. The entire evidence was put to the accused in his statement recorded u/s 313 Cr.PC wherein he deposed that " I have taken Rs. 6,00,000/- from Anshuman Singh on 05.12.2017, Digitally signed by ARIDAMAN ARIDAMAN SINGH SINGH CHEEMA CHEEMA Date:
2023.02.23 17:20:15 +0530 CC No.727/2021 NARVEDESHWAR SINGH Vs. SARAVJEET SINGH Page No.3 of 21 by going to the house of Mohadhipur, Gorakhpur, U.P. The complainant and Anshuman Singh both reside at GIDA, Sector- 22,Gorakhpur in adjacent houses and I was told by the Anshuman Singh that some paper work has to be done and the same be given to the complainant. Then on 03.04.2018, I took friendly loan from complainant for amount of Rs. 2,40,000/- from complainant's home. I along with Ishwar chand went to the home of complainant, then complainant has told me that the abovesaid amount shall be given tome in cash. But when we went to the house of complainant, he gave me the cheque of Rs. 2,40,000/- and I handed over some documents including four blank cheques. I signed all four cheques in front of the complainant. The complainant also got my signatures on two blank stamp papers on both the sides, one was Rs. 10/-stamp paper and the second was Rs. 100/- stamp paper. The complainant also got my signatures on one register also. I was to returned back the amount of Sh. Anshuman Singh in installments by paying Rs. 30,000/- every month within one year. I have paid Rs. 30,000/- each for 19 months to the complainant and in one month I paid Rs. 15,000/-. Rs.3,00,000/- was paid by Sh. Raghvender Singh on my behalf to the complainant, in 10 installments. Then on 10.01.2019, complainant asked for new cheques. When I asked for previous cheques then he told me that the previous cheques are misplaced. I asked the complainant to file missing report on the misplaced cheques but he refused. I had filed the missing report complaint on 21.01.2019. I was unaware that some instructions were given to the bank regarding the stop payment. So when I came to know about the same, I issued the instructions to bank regarding stopping of payment of misplaced cheques on 24.06.2019. Then misplaced cheques were presented in the bank, I came to know about the presentation of cheques when the legal notice. I had not replied to the legal demand notice as at that time covid-19 was prevalent and I was unaware of the legal proceedings. Again said, that when I went to the house of Anshuman Singh for taking of Rs. Digitally signed by ARIDAMAN ARIDAMAN SINGH SINGH CHEEMA CHEEMA Date:
2023.02.23 17:20:23 +0530 CC No.727/2021 NARVEDESHWAR SINGH Vs. SARAVJEET SINGH Page No.4 of 21 6,00,000/-, Ishwar Chand accompanied me. Ishwar Chand had paid Rs. 30,000/- to complainant once on 07.07.2019".
7. The accused chose to examine himself as DW-1. In DE, DW-1 accused Sarvjeet Singh, DW-2 Ishwar Chand, DW-3 Raghvendra Pratap Singh and DW-4 Beena Devi were examined on behalf of accused and were discharged. DE was closed on 22.12.2022.
8. Final arguments were addressed by both the parties. This Court has heard Ld. Counsels for both the parties and have perused the entire record/documents of the case.
9. File perused and arguments heard. After going through the record and hearing submissions advanced on behalf of the parties, there is only one issue :-
1) Whether the present cheque was issued in the discharge of of his existing debt and liablity of Rs. 15,74,000/- towards the complainant?
10. At this stage, it is important to mention the language of section 138 NI Act which is as under
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 which may be extended to two years], or with fine Digitally signed by ARIDAMAN ARIDAMAN SINGH SINGH CHEEMA CHEEMA Date:
2023.02.23 CC No.727/2021 NARVEDESHWAR SINGH Vs. SARAVJEET SINGH Page No.5 of 21 17:20:28 +0530 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.
Explanation.-- For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability.]
11. Law regarding the ingredients of the offence punishable Section 138 NI Act is well settled. It was held by the Hon'ble Apex Court in the case of 'K. Bhaskaran vs. Sankaran Bala' [1999 (7)SCC 510], that ''Offence under section 138 of the NI Act, can be completed only with the concatenation of a number of facts namely,
i) drawing of the cheque;
ii) presentation of the cheque to the bank;
iii) returning the cheque unpaid by the drawee bank;
iv) giving notice in writing to the drawer of the cheque demanding payment of the cheque amount;
v) failure of the drawer to make payment within 15 days of the receipt of the notice''.
12. It was further held in the above mentioned case that:-
ARIDAMAN ''As the signature in the cheque is admitted to be that of the accused, SINGH CHEEMA Digitally signed by ARIDAMAN SINGH CHEEMA Date: 2023.02.23 17:20:32 +0530 CC No.727/2021 NARVEDESHWAR SINGH Vs. SARAVJEET SINGH Page No.6 of 21 the presumption envisaged in Section 118 of the Act, can be legally be inferred that the cheque was made or drawn for consideration, on the date which the cheque bears. Section 139 of the Act enjoins the court to presume that the holder of the cheque received it for discharge of any debt or liability. The burden was on the accused to rebut the aforesaid presumption''.
13. Ld. Counsel for the complainant has submitted that there exists legally enforceable liability in favour of the complainant on behalf of the accused on the basis of the affidavit between the parties which is Ex-CW1/1 and on the basis of presumption under section 139 NI Act and on the basis of the averments made in the complaint and the evidence by way of affidavit. He has further submitted that the cheque in question was issued to the complainant which is Ex-CW1/3, He has further submitted that the dishonour of the cheque is proved by the cheque return memos which are Ex-CW1/4. Further copy of legal notice is Ex. CW-1/5. Postal receipts is Ex. CW-1/6, courier receipt is Ex. CW-1/7and copy of tracking report of speed post as well as courier are Ex. CW-1/8 and Ex. CW- 1/9 respectively. He has further submitted that the complainant received no payment within 15 days of the service the legal notice. Ld. Counsel for complainant has thus submitted that all the ingredients laid down u/s. 138 NI Act are fulfilled and the accused persons should be convicted.
14. Ld. Counsel for complainant has stated that the loan of amount of Rs. 8,40,000/- is already admitted but as per the version of accused, he has repaid the amount of Rs. 6,00,000/- but no substantial evidence has been brought on record to substantiate the fact of repayment. The Ex. CW-1/1 i.e. affidavit/contract specifically mentioned about the transaction and in case of non payment, the point no. 3 is activated and accused was to transfer the ownership of shop mentioned therein. As per the version of the accused, the payment of Rs. 6,00,000/- was taken from Anshuman Singh whereas he has not been called as a witness by the accused. The counsel for complainant further argued that the accused in his statement u/s 313 Cr.P.C has stated that Anshuman Singh was not ARIDAMAN present when some paper work was to be done after the payment of Rs. SINGH CHEEMA Digitally signed by ARIDAMAN SINGH CHEEMA CC No.727/2021 NARVEDESHWAR SINGH Vs. SARAVJEET SINGH Page No.7 of 21 Date: 2023.02.23 17:20:37 +0530 6,00,000/- and the same was completed by the complainant, which in itself puts doubt on the version of the accused. The name of the witness DW-2 Ishwar Chand has not been mentioned at the time of framing of Notice and the accused has stated that the repayment was done by himself whereas in the statement u/s 313 Cr.P.C. the accused has stated that the payment was done by two persons namely Raghvender Singh and Ishwar Chand which in itself contradictory. Counsel for complainant has further argued that if the payment was taken from one person namely Anshuman Singh then why the repayment was done to the complainant as per the statement of accused u/s 313 Cr.P.C. He has also argued that no receipt are placed on record regarding the repayment of the loan amount as said by the accused.
15. Ld. counsel for accused has advanced his final arguments by stating that complainant is unable to prove that how the liability has changed from Rs. 8,40,000/- to Rs. 15,74,000/-. It has been admitted by the complainant in para no. 3 of his complaint that the complainant has paid Rs. 8,40,000/- in total to the accused person. No where in the complaint it has been mentioned that how the liability is of Rs. 15,74,000/-. The financial capacity of the complainant was questioned in his cross examination, to which he has replied that he was earning more in overtime then in his regular work which in itself is the very doubtful statement. There is no documents on record regarding the financial capacity of complainant apart from the statement of wife of accused which was only payment of Rs. 2,40,000/-. The complainant has further admitted in his cross examination that there were no talks of charging of interest on loan amount then again how is the liability increased. The lost report which is Ex. DW-1/2 (OSR) was launched on 21.01.2019 which was almost 22 months prior to the filing of complaint. The cheques were security cheques and were not returned after the repayment of Rs. 5,85,000/-. The accused has also issued instructions for the stopping of payment which is Ex. DW-1/3 (OSR). The counsel for accused has further stated that there were no talks regarding the transfer of ownership of shop and such thing was never contemplated in any of the talks between the complainant and the accused. The accused has no liability as the complainant has failed to prove his liability of Rs. 15,74,000/- as mentioned in the complaint. ARIDAMAN SINGH CHEEMA Digitally signed by ARIDAMAN SINGH CHEEMA Date: 2023.02.23 CC No.727/2021 NARVEDESHWAR SINGH Vs. SARAVJEET SINGH Page No.8 of 21 17:20:41 +0530
16. It is a well settled position of law that when a negotiable instrument is drawn, two statutory presumptions arises in favour of the complainant, one under Section 139 NI Act and another u/s 118(a) of the NI Act. Further, the court will presume a negotiable instrument for consideration unless and until after considering the matter before it, it either believes that the consideration does not exist or consider the nonexistence of the consideration so probable that a prudent may 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.
17. Applying the principles as elucidated above to the facts of the case at hand, wherein, the signatures on the cheque in question being admitted by the accused, is thus, a fit case to draw the presumption envisaged under Section 118 read with Section 139 of the NI Act, in favour of the complainant. Now, let us begin to examine whether the accused has been able to discharge the burden upon him on the scale of preponderance of probabilities.
18. It has been argued by counsel for the accused, at the stage of final arguments, that the burden upon the accused is that of preponderance of probabilities and the same had been discharged by him, by pointing out the inherent improbability of the case of the complainant, and by the defence led by him. At this stage it would be fruitful to once again refer to Judgment of Hon'ble Apex Court rendered in, 'Basalingappa v. Mudidasappa', AIR 2019, SC 1983, wherein it was further observed as hereunder:-
"17. In Kumar Exports Vs. Sharma Carpets, (2009) 2 SCC 513, this Court again examined as to when complainant discharges the burden to prove that instrument was executed and when the burden shall be shifted. In paragraph Nos. 18 to 20, following has been laid down:- "18. Applying the definition of the word "proved" in Section 3 of the Evidence Act to the provisions of Sections 118 and 139 of the Act, it becomes evident that in a trial under Section 138 of the ARIDAMAN SINGH CHEEMA Digitally signed by ARIDAMAN SINGH CHEEMA Date: 2023.02.23 17:20:46 +0530 CC No.727/2021 NARVEDESHWAR SINGH Vs. SARAVJEET SINGH Page No.9 of 21 Act a presumption will have to be made that every negotiable instrument was made or drawn for consideration and that it was executed for discharge of debt or liability once the execution of negotiable instrument is either proved or admitted. As soon as the complainant discharges the burden to prove that the instrument, say a note, was executed by the accused, the rules of presumptions under Sections 118 and 139 of the Act help him shift the burden on the accused. The presumptions will live, exist and survive and shall end only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability. A presumption is not in itself evidence, but only makes a prima facie case for a party for whose benefit it exists. 19 19. The use of the phrase "until the contrary is proved" in Section 118 of the Act and use of the words "unless the contrary is proved" in Section 139 of the Act read with definitions of "may presume" and "shall presume" as given in Section 4 of the Evidence Act, makes it at once clear that presumptions to be raised under both the provisions are rebuttable. 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. 20. ........................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 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 Digitally exist......" signed by ARIDAMAN ARIDAMAN SINGH SINGH CHEEMA CHEEMA Date:
2023.02.23 17:20:51 +0530 CC No.727/2021 NARVEDESHWAR SINGH Vs. SARAVJEET SINGH Page No.10 of 21
19. A cumulative analysis of the above decision reveals that though the burden on the accused is that of preponderance of probabilities, he need not even enter the witness box in support of his defence and may rely upon the material submitted by the complainant in order to raise a probable defence. The accused is also not expected to disprove the existence of the consideration and debt by leaving direct evidence because of the impossibility of adducing negative evidence. However, as has been categorically held by the Hon'ble Supreme Court, a bare denial of the passing of the consideration and existence of debt, would not serve the purpose of the accused. Something must be brought on record for getting the burden of proof shifted to the complainant whether it be in the form of evidence led by him or by pointing out the inherent improbabilities in the case as set up by the complainant.
20. Let us begin by examining the cross-examination of the CW-1. As per the cross- examination of CW-1 he stated that he knows Sarvjeet Singh as he lives in his village Deva Par Dugduiyapali, Sahjanwa, Gorakhpur, U.P. He knew the accused since he was five years of age. He has submitted that he has no family relation with the accused and did not know the actual date when accused approached him for the first time. Complainant has further admitted that the amount arranged for friendly loan was arranged by him. Complainant is engaged in Private Sector Job of Offset Printing Machine Operator and used to get salary amounting to Rs. 25,000/- per month. He has seven members in his family including himself. He has only two sons. At the time of giving the loan, both his sons were dependent on him. In the year 2017-18, he used to save Rs. 30,000/- per month on account of over duty. At the time of giving the loan there were no talks of charging of interest on loan amount. He has further admitted that there were no witness at the time of forwarding the loan amount to the accused. He has denied the suggestion that there were two witnesses at the time of forwarding the loan amount to the accused. He has admitted that three cheques have been handed over to him by the accused in the month of November 2020. He has further admitted that the contents filled in the cheque were filled by the accused and handed over to him. It is further admitted by the complainant that one stamp paper which was handwritten was handed over by the accused to him. He has ARIDAMAN SINGH CHEEMA Digitally signed by ARIDAMAN SINGH CHEEMA Date: 2023.02.23 17:20:55 +0530 CC No.727/2021 NARVEDESHWAR SINGH Vs. SARAVJEET SINGH Page No.11 of 21 further admitted that there was no agreement between him and the accused but it was affidavit on stamp paper signed by the accused as well as by his wife. The stamp paper was got notarized by the accused before handing over to complainant and he does not know who notarized the stamp paper. He knows Anshuman Singh. Anshuman Singh has nothing to do in the present case. He has denied the suggestion that accused has returned Rs. 5,85,000/- to him against the friendly loan. He has further denied the suggestion that only Rs. 2,55,000/- was balance against the accused out of total loan amount of Rs. 8,40,000/- in all the three cases.
21. Now let us examine the evidence of the defence witnesses i.e. DW-1, DW-2, DW-3 & DW-4.DW-1 in his examination in chief accused has admitted that he knows the complainant. He had taken Rs. 6,00,000/- from Anshuman Singh by going to the house at Mohadhipur, Gorakhpur, UP. Complainant and Anshuman Singh are neigbours. He was told by Anshuman Singh that some paper works has to be done. On 03.04.2018, complainant issued a cheque of Rs. 2,40,000/- which was deposited in his account maintained with SBI, GIDA, Gorakhpur, UP and he handed over the documents along with 4 blank signed cheques to the complainant. The complainant also took his signatures on two blank stamp papers of Rs. 10/- and Rs. 100/- respectively. Complainant had again taken a stamp paper of Rs. 100/- after one month of getting signatures on previous stamp papers. Accused has further stated that he had returned Rs. 5,85,000/- to the complainant. On 10.01.2019, the complainant asked for new cheques therefore, accused asked to return previous given cheques to the complainant then the complainant told him that the previous cheques were misplaced. Thereafter, accused asked the complainant to file missing report of the misplaced cheques but the complainant refused to lodge the missing report. Thereafter, accused filed the missing report of cheques on 21.01.2019 as Ex. DW-1/2 (OSR). He had also given complaint to the bank to stop the payment of said cheques dated 24.06.2019 Ex. DW-1/3 (OSR). In his cross examination, accused had admitted that he was having good relations with the complainant. Accused has further stated that he used to earn around Rs. 200-300/- daily from his shop which comes around Rs. 9,000/- monthly. He has also admitted that he ARIDAMAN SINGH CHEEMA Digitally signed by ARIDAMAN SINGH CHEEMA Date: 2023.02.23 CC No.727/2021 NARVEDESHWAR SINGH Vs. SARAVJEET SINGH Page No.12 of 21 17:21:00 +0530 was in need of fund for the expansion of his TV repair shop and he discussed this issue with the complainant. One specific question was put to DW-1 whether he was in need of Rs. 2,40,000/- for the expansion of TV repair shop or why he had said at the time of framing of Notice u/s 251 Cr.P.C that he had taken a loan of Rs. 8,40,000/- in the cross examination to which he had replied that he needed the additional fund of rs. 6,00,000/- for the expansion of TV repair shop which inluded stablizer manufacturing and he had accepted that this statement was true.DW-1 has submitted that he approached the complainant 3-4 days before 03.04.2018 when he took the money. He refused that the Ex. CW-1/1 was executed by him. He does not have knowledge whether Ex. CW-1/1 is a Shapat Patar i.e. Affidavit. The accused has admitted his signature at point A but denied that other signature are of his wife which is marked at Point B. He has further denied the suggestion that he has written the contents of Ex. CW-1/1. He has further admitted that settlement was arrived with the complainant. One more specific question was put to DW-1 whether as per him Rs. 6,00,000/- was paid by Anshuman Singh then why stamp paper was not executed by him to which he replied that Anshuman Singh had told him that all the stamp papers and cheques shall be given to complainant as the complainant was living adjacent to the house of Anshuman Singh. DW-1 has submitted that he has returned Rs. 5,85,000/- to Anshuman Singh through the complainant. He has admitted that he has not asked for return of stamp paper and the signed cheques from Anshuman Singh as on date Rs. 15,000/- was still balance. He has submitted that he had no knowledge in respect of check return memo dated 05.12.2020 till the legal notice dated 07.12.2020 was received by him. He has got the knowledge of cheque return memo on 15.12.2020 through legal notice. One more specific question was put to accused whether the ink used in Affidavit cum Agreement dated 03.04.2018 is same with the signatures at point A and B to which he replied that it is same.
22. On behalf of the accused, DW-2, Ishwar Chand was examined. In his cross examination He has denied that suggestion that he has not given Rs. 30,000/- in cash to the accused Saravjeet Singh and the accused had given the above said amount to the complainant while the deponent went to the house of complainant ARIDAMAN SINGH CHEEMA Digitally signed by ARIDAMAN SINGH CHEEMA CC No.727/2021 NARVEDESHWAR SINGH Vs. SARAVJEET SINGH Page No.13 of 21 Date: 2023.02.23 17:21:05 +0530 alongwith accused. DW-3, Raghvendra Pratap Singh was examined and in his affidavit Ex. DW-3/1 that he had stated that he had given Rs. 30,000/- per month from 05.03.2018 to 05.11.2018 to the complainant and the affidavit was made in front of him. He has put his signatures at point A and B before the attesting madam. He has denied the suggestion that he had not given Rs. 30,000/- per month in cash to the complainant from 05.03.2018 to 05.11.2018 and also given Rs. 30,000/-on 08.03.2018 thus he has paid Rs. 3,00,000/- to the complainant on behalf of complainant Saravjeet Singh.
23. On behalf of the accused, DW-4, Mrs. Beena Devi (wife of accused) was examined. In her cross examination she has submitted that she works as a tailor and used to earn around Rs 9,000/- to Rs. 10,000/- per month. She has further submitted that her husband used to work as repairing of electric goods and used to earn around Rs. 9,000/- to Rs. 10,000/- per month and they both jointly earn Rs. 20,000/- per month and entire earning amount of Rs. 20,000/- is utilized in the maintenance of family. She has admitted that her husband was in urgent financial need for business purpose hence, he approached the complainant and her husband had taken loan of Rs. 2,40,000/- from the complainant being told by her husband. She has denied the suggestion that Rs. 6,00,000/- was taken as loan from the complainant. At the time of passing of loan amount from the complainant Ex. CW-1/1 was signed by her husband. She is shown Ex. CW-1/1 and shown the signature of her husband at point A, and the same is not the signature of her husband. She has further submitted that she cannot tell whose signature is at point B by the name of Beena Devi and submitted that It is not her signature. One specific question was put to DW-4 whether CC No. 333/2021 an application u/s 145 (2) of NI Act in para no. 3 last two lines is written as "Two blank papers of Rs. 100/- and one stamp paper of Rs. 10/- signed by applicant/accused and his wife for security purpose", the signatures at point B has been admitted by you to which she replied that it is incorrect, as it is not her signature.
24. It has been vociferously argued by the counsel for the complainant that the ARIDAMAN presumption under section 118 read with Section 139 of the NI Act, arises in SINGH CHEEMA Digitally signed by ARIDAMAN SINGH CHEEMA Date: 2023.02.23 CC No.727/2021 NARVEDESHWAR SINGH Vs. SARAVJEET SINGH Page No.14 of 21 17:21:10 +0530 favour of the complainant and the accused has failed to rebut the said presumption. At this stage it would be relevant to refer to Judgment of Hon'ble Apex Court rendered in, 'Basalingappa v. Mudidasappa', AIR 2019, SC 1983, wherein the principles in relation to the presumption raised under section 118 (a) read with Section 139 were summarised as under :
"23. We having noticed the ratio laid down by this Court in above cases on Sections 118(a) and 139, we now summarize 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 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 28 139 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.
"24. Applying the preposition of law as noted above, in facts of the present case, it is clear that signature on cheque having been admitted, a presumption shall be raised under Section 139 that cheque was issued in discharge of debt or liability."
ARIDAMAN
25. Now, let us begin to examine, if the accused has on the scale of preponderance SINGH CHEEMA Digitally signed by ARIDAMAN SINGH CHEEMA CC No.727/2021 NARVEDESHWAR SINGH Vs. SARAVJEET SINGH Page No.15 of 21 Date: 2023.02.23 17:21:17 +0530 of probabilities been able to rebut the presumption envisaged under Section 118
(a) read with Section 139 of NI Act. To show that there was no legally enforceable debt or liability existing in favour of the complainant as on the date written on the cheque or on the date of their presentation, the following submissions have been made by the accused:
(a) That the signatures of the accused have been obtained on the blank papers and the affidavit/contract which is Ex-CW1/1.
(b) That the total amount of loan advanced is only Rs.8,40,000/- out of which Rs. 2,40,000/- was advanced by the complainant and Rs. 6,00,000/- was advanced by his friend Mr. Anshuman Singh. That the total amount of loan advanced by the complainant was only Rs. 2,40,000/- as against Rs.15,74,000/-
as demanded by the complainant.
(c) That the part payment of Rs. 5,85,000/- has been made.
(d) It has been submitted by the Ld. Counsel for accused that no where the complainant is able to prove that how the amount of Rs. 8,40,000/- has increased to Rs. 15,74,000/-. There is no calculation of amount provided either in the complaint or in any of the documents relied upon by the complainant. The complainant had admitted in his cross examination that the loan advanced was without interest.
(e) Ld. Counsel for accused has further stated that accused had given stop payment instructions to his Bank on 24.06.2019 and a complaint regarding loss of cheque was also given on 21.01.2019 which was almost 22 months prior to the presentation of cheque.
26. Ld. counsel for the complainant has made the following counter arguments to the submissions made on behalf of the accused:
(a) That the signatures of the accused have not been obtained on blank papers. That no proof has been brought on record to support the submissions that signatures of the accused have been taken on blank papers. It is further submitted on behalf of the complainant that the complaint of accused to the ARIDAMAN SINGH police which is Ex. DW-1/2 (OSR) mentions about two Rs. 100/- Stamp Papers CHEEMA Digitally signed by ARIDAMAN SINGH CHEEMA Date: 2023.02.23 17:21:24 +0530 CC No.727/2021 NARVEDESHWAR SINGH Vs. SARAVJEET SINGH Page No.16 of 21 were lost whereas Ex. CW-1/1 is on Rs. 10/- Stamp Paper and not on Rs. 100/-
Stamp Paper. It has been admitted by the accused in his application u/s 145(2) of NI Act that the stamp paper of Rs. 10/- was signed by him and his wife whereas DW-4, wife of accused has denied her signature in the cross examination, which in itself is contradictory.
(b) That if Rs. 6,00,000/- was taken from the friend of complainant then why Rs. 5,85,000/- is returned to the complainant and not to his friend Anshuman Singh. Further, if payment was taken from Anshuman Singh then why the cheques were given to the complainant. That accused had stated in his Notice u/s 251 Cr.P.C that he had made several payments some through cash and other through account but no proof of any payment has been placed on record.
(c) Ld. Counsel for the complainant has submitted that the signatures are already admitted on Ex. CW-1/1 and as per the Ex. CW-1/1, if the amount taken is not returned the accused was to transfer the ownership right of his shop to complainant as mentioned in EX. CW-1/1.
(d) That the entire due amount has not been paid by the accused: That no payment as stated by DW2 and DW3 has been made to the complainant. No document regarding the payment has been placed on record.
(e) That the amount stipulated in the complaint is not by way of penalty and is a reasonable compensation for breach by the accused: It is submitted on behalf the complainant that all the consequences of non- compliance as mentioned in the affidavit/contract which is Ex. CW-1/1 have been duly stated. It has further been submitted that the consequences of non-payment on time are reasonable.
(f) That the cheque in question has been issued in discharge of legally enforceable debt or liability.
FINDINGS OF THE COURT
27. With respect to the plea of the accused that his signatures have been obtained on blank papers by the complainant. No proof has been advanced on behalf of the ARIDAMAN accused to show that his signatures were obtained on blank papers by the SINGH CHEEMA Digitally signed by ARIDAMAN SINGH CHEEMA Date: 2023.02.23 17:21:29 +0530 CC No.727/2021 NARVEDESHWAR SINGH Vs. SARAVJEET SINGH Page No.17 of 21 complainant, which have been turned into the affidavit/contract. Any reasonable prudent person, would file a complaint with the police or in a court of law if his signatures have been obtained on blank papers by force and under coercion, so as to prevent the misuse of such papers. The complaint made by the accused does not pertains to the Rs. 10/- Stamp Paper. Accordingly, the said fact that the signatures of the accused have been obtained on blank papers by the complainant cannot be deemed to have been proved merely on the basis of statements of the accused himself as DW1 and the statement of DW4 in the absence of any proof and who has every reason to deny the signatures to save her husband from liability, cannot prove that the signatures were taken on blank papers.
28. With respect to the plea of the accused that the actual amount of loan advanced was only Rs. 8,40,000/-: As per the affidavit/contract which is Ex-CW1/1, the amount of loan was given to the accused in two parts. Perusal of the cross- examination of CW1 shows that his source of funds have been expressly challenged by the accused, wherein the following statements were made in response to the questions asked by the counsel for accused:
"I am engaged in Private Sector Job of offset printing machine operator and used to get salary amounting to Rs. 25,000/- per month. I have seven members in my family including myself. I have only two sons. At the time of giving the loan both my sons were dependent on me. In the year 2017-18, I used to save rs. 30,000/- per month on account of over duty."
29. Reliance is placed by this court on the judgment of judgment of Hon'ble Supreme Court of India in John K. Abraham vs. Simon C. Abraham, (2014) 2 SCC 236, Vijay vs. Laxman and Anr., (2013) 3 SCC 86, APS Forex CC No. 9827/2019 Services Pvt. Ltd. vs. Shakti International Fashion Linkers and Ors., (2020) 12 SCC 724, Basalingappa vs. Mudibasappa, (2019) 5 SCC 418, and on the judgment of Hon'ble Kerala High Court in Sunitha vs. Sheela Antony, 2020 SCC OnLine Ker 1750 and the law as laid down by the Hon'ble Superior Courts ARIDAMAN in these judgments is that if the accused challenges the financial capacity of the SINGH CHEEMA Digitally signed by ARIDAMAN SINGH CHEEMA Date: 2023.02.23 17:21:35 +0530 CC No.727/2021 NARVEDESHWAR SINGH Vs. SARAVJEET SINGH Page No.18 of 21 complainant to advance the money, despite the presumption under Section 139 of the Act, the complainant has the obligation to prove his financial capacity or the source of the money allegedly lent by him to the accused. Furthermore, it has also been held that the complainant is bound to tell the exact details of the advancement of loan to the accused.
30. In the facts of the present case, the complainant has stated in his cross examination that he was earning around Rs. 25,000/- per month in a private sector and was also earning Rs. 30,000/- per month extra on account of over duty in the year 2017-2018. At that time, there were seven members in his family including himself. His two sons were dependent upon him at the time of advancing of loan. This court cannot adopt a hyper-technical approach when there is a affidavit/contract on record, the presumption u/s. 139 NI Act is already in favour of the complainant. The source of the funds has not been substantially proved as no documentary evidence is placed on record regarding the salary and extra amount on account of over duty of complainant apart from the payment of Rs. 2,40,000/- made from the account of the wife of the accused.
31. With respect to the plea of the accused that the amount stipulated in the complaint is by way of penalty and is not a reasonable compensation to be paid to the complainant: Before moving further it is pertinent to discuss the provisions of section 74 of the Indian Contract Act, 1872, which reads as follows:
"74. Compensation for breach of contract where penalty stipulated for:
When a contract has been broken, if a sum is named in the contract as the amount to be paid in case of such breach, or if the contract contains any other stipulation by way of penalty, the party complaining of the breach is entitled, whether or not actual damage or loss is proved to have been caused thereby, to receive from the party who has broken the contract reasonable compensation not ARIDAMAN SINGH exceeding the amount so named or, as the case may be, the penalty CHEEMA Digitally signed by ARIDAMAN SINGH CHEEMA Date: 2023.02.23 17:21:39 +0530 CC No.727/2021 NARVEDESHWAR SINGH Vs. SARAVJEET SINGH Page No.19 of 21 stipulated for.
Explanation.--A stipulation for increased interest from the date of default may be a stipulation by way of penalty."
32. Thus, in terms of section 74 of Indian Contract Act, a party to a contract is entitled to only reasonable compensation and not the sum named therein which is a stipulation by way of penalty. Section 138 NI Act requires that the cheque should have been issued in discharge of legally enforceable debt or liability. In the case at hand the following consequences ensue if the accused does not perform his part as mentioned in Ex. CW-1/1, he has to transfer the ownership of shop as mentioned in Point 3 of the Ex. CW-1/1. As the complainant has mentioned that the amount of settlement between the accused and himself is Rs. 15,74,000/-. In the considered opinion of this court, this stipulation is by way of penalty and cannot in any manner be termed as a reasonable compensation.
33. With respect to the plea of the accused that even if the entire case of the complainant is deemed to be true then also there is no liability of the accused equivalent to the amount mentioned in the complaint. The total liability as per the accused is Rs. 2,40,000/- towards the complainant and Rs. 6,00,000/- towards the friend of complainant Anshuman Singh.
34. Thus, even If the entire case of the complainant is deemed to be true then also the liability equivalent to Rs. 15,74,000/- is not made out.
CONCLUSION
35. Thus, this court arrives at the following conclusions on the basis of the above discussion:
(a) That the cheque in question was given only for security purposes.
(b) That is plea of the accused that his signatures have been obtained on blank papers by the complainant is not proved for want of evidence.
(d) That the remedy available with the complainant as per the documents placed Digitally signed by ARIDAMAN ARIDAMAN SINGH SINGH CHEEMA CHEEMA Date:
2023.02.23 17:21:54 +0530 CC No.727/2021 NARVEDESHWAR SINGH Vs. SARAVJEET SINGH Page No.20 of 21 on record is to seek specific performance of the agreement as mentioned in Ex. CW-1/1, or in the alternative, seek damages for the breach thereof.
(e) No amount is proved to have been paid by the accused to the complainant towards repayment of loan.
(f) That the stipulations of non-compliance mentioned in the document exhibited as Ex. CW-1/1 is by way of penalty and cannot be said to be reasonable compensation as per section 74 of the Indian Contract Act. The complainant could only recover the principal amount of Rs.8,40,000/- as it has already been admitted by the complainant in his cross examination that there was no interest charged on the loan amount.
36. In the light of the foregoing reasons, the present case is a fit case where benefit of doubt ought to be extended to the accused as the accused has been able to rebut the presumption u/s 118 NI Act read with section 139 NI Act. . The cheque in question was issued towards the recovery of amount of Rs. 15,74,000/- which is not legally recoverable debt. The complainant has failed in proving the existence of a legally recoverable debt in his favour, which is the foundation of an offence u/s 138 NI Act, resultantly, the accused Saravjeet Singh stands acquitted of the offence under section 138 of NI Act.
37. Copy of digitally signed Judgment be supplied to the accused, free of cost and a copy of the same be placed on the case file. Digitally signed by ARIDAMAN ARIDAMAN SINGH SINGH CHEEMA CHEEMA Date:
Decided on 23.02.2023 2023.02.23
17:22:00
+0530
Announced in open court.
(Aridaman Singh Cheema)
MM(NI Act)Digital Court-06 (South)
Saket/New Delhi/23.02.2023
This judgment contains 21 pages and all pages bears my digital signatures.
Digitally
signed by
ARIDAMAN
ARIDAMAN SINGH
SINGH CHEEMA
CHEEMA Date:
2023.02.23
17:22:04
+0530
(Aridaman Singh Cheema)
MM(NI Act)Digital Court-06 (South)
Saket/New Delhi/23.02.2023
CC No.727/2021 NARVEDESHWAR SINGH Vs. SARAVJEET SINGH Page No.21 of 21