Delhi District Court
Cc Ni Act No.5292/2021 Sh. Rahul vs . Sh. Shiv Narain Page No. 1 Of 23 Aggar ... on 24 April, 2023
IN THE COURT OF MS. EBBANI AGGARWAL
LD. MM (NI ACT), DIGITAL COURT-09, SOUTH-WEST,
DWARKA COURT, NEW DELHI
DLSW020099332021
SH. RAHUL
S/o Sh. Mahavir Prasad
R/o 634, Service Station Road, Rajokri Village
South-West Delhi - 110038 ......... Complainant
VERSUS
SH. SHIV NARAIN
S/o Sh. Ram Mehar
R/o 668, Near Barat Ghar, V.P.O Rajokri
New Delhi - 110038 ........... Accused
Complainant Case no. 5292/2021
CNR No. DLSW020099332021
Title Sh. Rahul v. Sh. Shiv Narain
Name of Complainant Sh. Rahul
Name of Accused Sh. Shiv Narain
Date of Institution of 05.02.2021
Complaint
Date of Final Arguments 18.04.2023
Date of Pronouncement of 24.04.2023
Judgment
Offence Involved Section 138 NI Act
Plea of the Accused Pleaded not guilty
Final order Acquittal
EBBANI Digitally signed
by EBBANI
CC NI ACT No.5292/2021 Sh. Rahul Vs. Sh. Shiv Narain Page No. 1 of 23 AGGAR AGGARWAL
Date: 2023.04.24
WAL 14:17:39 +05'30'
JUDGMENT
1. Present complaint has been filed by complainant company alleging an offence under Section 138 of the Negotiable Instruments Act (hereinafter referred to as the "NI Act").
2. Facts, in brief, as alleged in the complaint are that accused had approached complainant for a friendly loan of Rs. 9,00,000/- for a period of two months which the complainant had disbursed by way of cash on 31.07.2020. After expiry of period of two months, complainant demanded his money back from accused which accused avoided on one pretext or another and finally, in December 2020, accused handed over cheque bearing no. 247180 dated 17.12.2020 for a sum of Rs. 9,00,000/- (Ex. CW-1/1) (hereinafter referred to as the "cheque-in-question") in discharge of his legally enforceable debt. When the complainant presented the cheque-in-question for encashment, the same got dishonoured with remarks "Account Closed" vide return memo dated 23.12.2020 (Ex. CW-1/2). The complainant then sent a legal demand notice dated 26.12.2020 (Ex. CW-1/3) to accused calling upon him to make the payment of cheque amount within the statutory period of 15 days. However, accused did not make the payment of amount in question and hence, present complaint alleging an offence under Section 138 of the NI Act was instituted by complainant.
APPEARANCE OF ACCUSED AND FRAMING OF NOTICE Digitally signed EBBANI byAGGARWAL EBBANI CC NI ACT No.5292/2021 Sh. Rahul Vs. Sh. Shiv Narain Page No. 2 of 23 AGGAR Date:
2023.04.24 WAL 14:18:00 +05'30'
3. This court took cognizance of offence under Section 138 of the NI Act and accused was summoned vide order dated 04.03.2021. Accused entered appearance before this Court on 06.06.2022 and on the same day itself, Notice as per mandate of Section 251 of Code of Criminal Procedure, 1973 (hereinafter referred to as the "Cr.P.C.") was framed against the accused wherein accused pleaded not guilty and claimed trial. In his plea of defence, accused has stated that he knows the complainant and that there were regular transactions between them. Accused has further stated that he has no legal liability towards complainant and that four to five of his blank signed cheques were stolen and that one of those cheques is the present cheque-in-question. Accused further did not deny his signatures on the cheque-in- question and has also stated that he had received the legal demand notice.
Thereafter, Accused orally moved an application seeking permission to cross examine complainant, which was allowed, and the trial of the present complaint was converted to a summons triable case. The matter was then listed for CE.
COMPLAINANT'S EVIDENCE
4. Complainant examined himself as CW-1 who tendered his affidavit of evidence and in proof of its case, the complainant has relied upon the following documents:
(i) Ex. CW-1/1: Cheque in question bearing no. 247180 dated 17.12.2020 for a sum of Rs. 9,00,000/-
(ii) Ex. CW-1/2: Return memo dated 23.12.2020.
CC NI ACT No.5292/2021 Sh. Rahul Vs. Sh. Shiv Narain Page No. 3 of 23 EBBANI Digitally by EBBANI signed AGGAR AGGARWAL Date: 2023.04.24 WAL 14:18:14 +05'30'
(iii) Ex. CW-1/3: Legal Demand Notice dated 26.12.2020
(iv) Ex. CW-1/4: Postal receipts of legal demand notice.
(v) Ex. CW-1/5: Delivery report of speed post.
(vi) Ex. CW-1/6 (Colly): Screenshot of service of legal demand notice through WhatsApp along with certificate under Section 65-B of Indian Evidence Act.
Admission-Denial of documents in terms of Section 294 of Cr.P.C. was conducted wherein the accused has not disputed the genuineness of the cheque-in-question (Ex. CW-1/1) as well as the return memo (Ex. CW-1/2).
5. Complainant, CW-1, was then cross-examined wherein he deposed that he and accused live in the same village and that accused lives ten houses away from his house and that they live in the same gali. Complainant further admitted that legal demand notice as well as summons of this Court were sent on a wrong address. Complainant further deposed that in July, 2020 his monthly income was around Rs. 30,000/- to Rs. 35,000/- and that he cannot remember the income that he has shown in his ITR. Complainant further deposed that he cannot recall if he has shown present loan in his ITR or not. Complainant further deposed that he has multiple bank accounts, one of them is at Delhi State Cooperative Bank Ltd., Bijwasan Branch, New Delhi - 61 and the other is at Cooperation Bank, Rajokri, New Delhi. Complainant further deposed that in July 2020, his bank account at Cooperation Bank, Rajokri, New Delhi branch had a bank balance of Rs. 9,00,000/- and that he had withdrawn Rs.
EBBANI Digitally by EBBANI signed CC NI ACT No.5292/2021 Sh. Rahul Vs. Sh. Shiv Narain Page No. 4 of 23 AGGAR AGGARWAL Date:
WAL 2023.04.24 14:18:28 +05'30' 9,00,000/- from his bank account on 30.07.2020, however, complainant again said, that he cannot recall the exact date of withdrawal. Complainant further deposed that he had taken a loan of Rs. 9,00,000/- from Delhi State Cooperative Bank in order to disburse friendly loan to accused. In voluntary, complainant further deposed that loan of Rs. 5,00,000/- was taken in his name and that loan of Rs. 4,00,000/- was taken in name of his wife. Complainant further did not deny the suggestion that the fact that he had taken loan from bank to disburse friendly loan to accused has not been mentioned in the complaint. Complainant further deposed that he did not get anything executed in writing with respect to disbursal of loan to accused and that he had disbursed the friendly loan to accused in presence of his mother in the morning at around 10:30 AM or 11:30 AM. Complainant further deposed that the name of payee as well as the date on the cheque-in-question were filled by his uncle Dharamvir and that amount in figures as well as words on the cheque-in-question were filled by him.
6. Thereafter, complainant, CW-1, furnished following additional documents:
(i) ITR for financial year 01.04.2020 to 31.03.2021 - Ex.
CW-1/7.
(ii) Bank Account statement of himself as well as wife for month of July, 2020 - Ex. CW-1/8 (Colly)
(iii) Loan Application form of loan applied by himself and his wife - Ex. CW-1/9 (Colly) Complainant (CW-1) deposed that he has not mentioned about disbursal of present loan to accused in his ITR which Page No. 5 of 23 EBBANI by Digitally signed CC NI ACT No.5292/2021 Sh. Rahul Vs. Sh. Shiv Narain EBBANI AGGAR AGGARWAL Date:
WAL 14:18:41 +05'30' 2023.04.24 is Ex. CW-1/7. Complainant further deposed that he knows accused since last 15 to 17 years and that he often visited the house of accused. Complainant further deposed that he had disbursed the alleged loan of Rs. 9,00,000/- to accused without any interest and that he is paying interest on the loan that he had taken from bank.
Complainant, then, closed CE.
STATEMENT OF ACCUSED UNDER SECTION 313 R/W 281 Cr.P.C.
7. Thereafter, all incriminating piece of evidence were put to accused and his statement in terms of Section 313 r/w Section 281 of Cr.P.C. was recorded wherein accused stated that he has no legal liability towards complainant and that his signed cheque book got lost and that subsequently he had written a letter to his bank to close his account, in July 2020. Accused has further stated that present cheque-in- question is one of those cheques belonging to the signed stolen cheque book. Accused has further stated that he never received any legal demand notice from complainant and that he only received notice from this court.
In the said statement itself, accused opted to lead evidence in his defence and the matter was listed for DE.
DEFENCE EVIDENCE
8. Application under Section 315 of Cr.P.C. moved by accused was allowed and accused entered the witness box himself. As part of Defence Evidence, accused has examined himself as DW-1 and HC Kanti Lal as DW-2.
EBBANI Digitally signed by EBBANI Page No. 6 of 23 AGGAR Date:
AGGARWAL CC NI ACT No.5292/2021 Sh. Rahul Vs. Sh. Shiv Narain 2023.04.24 WAL 14:18:54 +05'30'
9. In support of his defence, accused has placed on record following documents:
(i) His Bank Account Statement: Ex. DW-1/1
(ii) Letter written to his bank to close his account: Ex.
DW-1/2
(iii) Police complaint filed by him for stolen cheques:
Mark-A In his examination in chief, accused (DW-1) deposed on similar lines as his statement under Section 313 r/w Section 281 Cr.P.C. and has reiterated that he has no legal liability towards complainant and that five of his blank signed cheques which were kept in his almirah got lost and that in July, 2020 he had written a letter to his bank to close his account as five of his blank signed cheques were lost/stolen.
Accused further deposed that present cheque-in-question is one of those five blank signed cheques.
10.Accused was thereafter cross examined. In his cross- examination, accused deposed that complainant and he live in the same village and same gali and that he knows complainant from last 8 to 9 years. Accused further deposed that he has not taken any loan or financial help from complainant and that he had never handed over any cheque to complainant. Accused further deposed that some of his blank signed cheques which were kept in his almirah were stolen and that one of those cheques is the present cheque- in-question. Accused further deposed that the cheque-in- question bears his signature. Accused further deposed that there is no other case either for cheque bouncing or for recovery of money which has been filed against him. EBBANI Digitally signed by EBBANI CC NI ACT No.5292/2021 Sh. Rahul Vs. Sh. Shiv Narain Page No. 7 of 23 AGGAR AGGARWAL Date: 2023.04.24 WAL 14:19:07 +05'30'
11.HC Kanti Lal (DW-2) was summoned by accused in order to prove the police complaint which he had filed for his stolen cheques, i.e., Mark-A. DW-2 entered appearance before this court and deposed that he was posted in PS:
Vasant Kunj on 16.01.2023 and that he did not receive any complaint from accused, Sh. Shiv Narain, S/o Late Sh. Ram Mehar on 16.01.2023.
Opportunity was granted to Ld. Counsel for Complainant to cross examine DW-2, however, Ld. Counsel for complainant opted not to cross-examine the said witness.
Thereafter, DE was closed, and matter was listed for final arguments.
FINAL ARGUMENTS
12.Ld. Counsel for complainant has reiterated the averments made in the complaint in her arguments and has further argued that complainant and accused are neighbours and keeping in mind their long-term relations, complainant had disbursed a friendly loan of Rs. 9,00,000/- to accused by way of cash. Ld. Counsel for complainant has further argued that complainant has placed on record loan application form with respect to the loan taken by himself and his wife from the bank to disburse friendly loan to accused. Ld. Counsel for complainant has further argued that complainant is not required to prove financial capacity to disburse loan at the time of filing of the complaint. Ld. Counsel for Complainant has further argued that accused has admitted his signatures on the cheque-in-question and therefore, presumption under Section 139 of the NI Act operates against the accused. Ld. Counsel for Complainant has further argued that all the EBBANI Digitally signed by EBBANI CC NI ACT No.5292/2021 Sh. Rahul Vs. Sh. Shiv Narain Page No. 8 of 23 AGGAR AGGARWAL Date:
WAL 2023.04.24 14:19:19 +05'30' statutory requirements for an offence under Section 138 of the NI Act are met with in the present complaint and that complainant has been able to prove his case beyond reasonable doubt and that in view of the facts and circumstances of the present complaint, accused be convicted of offence under Section 138 of the NI Act.
13.Per Contra, Ld. Counsel for accused has argued that accused has never taken any friendly loan from complainant and that some of his blank signed cheques got stolen and that present cheque-in-question is one of those cheques. Ld. Counsel for accused has further argued that after his blank signed cheques got stolen, he had written a letter to his bank for getting his account closed which has been placed on record as Ex. DW-1/2 and that accused had also filed a police complaint for the same which is Mark-A. Ld. Counsel for accused has further argued that accused never handed over the cheque-in-question to complainant. Ld. Counsel for accused has further argued that complainant had admitted in the cross-examination that legal demand notice and summons were sent on a wrong address and that accused never received any legal demand notice from complainant. Ld. Counsel for accused has further argued that complainant has not shown disbursal of present loan to accused anywhere in his ITR which is Ex. CW-1/7. Ld. Counsel for accused has further argued that complainant did not have the financial capacity to disburse the friendly loan of Rs. 9,00,000/- to complainant. Ld. Counsel for accused has further argued that accused has been able to rebut the presumption on basis of preponderance of probabilities and EBBANI Digitally by EBBANI signed Page No. 9 of 23 AGGAR Date:
AGGARWAL CC NI ACT No.5292/2021 Sh. Rahul Vs. Sh. Shiv Narain 2023.04.24 WAL 14:19:32 +05'30' therefore, accused be acquitted for offence under Section 138 of the NI Act.
LEGAL POSITION
14. Before proceeding to decide the case on merits, it is imperative that position of law with respect to an offence under Section 138 of the NI Act is discussed.
15. Section 138 of the NI Act reads 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 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.
EBBANI Digitally by EBBANI signed AGGAR Date:
AGGARWAL CC NI ACT No.5292/2021 Sh. Rahul Vs. Sh. Shiv Narain Page No. 10 of 23 2023.04.24 WAL 14:19:45 +05'30' Explanation. -- For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability."
16. In order to constitute an offence under Section 138 of the NI Act the following ingredients must be fulfilled:
(i) Cheque must be drawn on an account maintained by drawer for discharge of a legally enforceable debt either in part or whole.
(ii) Cheque must be validly presented for encashment, i.e., must be presented within validity period or within 3 months from date of issuance whichever is earlier.
(iii) Cheque must be returned back unpaid with remarks funds insufficient or exceeds the amount arranged for.
(iv) A legal demand notice in writing must be issued by payee or holder in due course, within 30 days of receipt of information regarding dishonour of cheque, calling upon the drawer to make the payment of amount in question within 15 days of receipt of legal demand notice.
(v) Drawer fails to make the payment of amount in question within 15 days of receipt of legal demand notice.
17. Section 139 of the NI Act is a reverse onus clause which was added to the statute book in order to increase the credibility of cheque/negotiable instruments as a mode of payment. Section 139 reads as under:
EBBANI Digitally by EBBANI signed AGGAR Date:
AGGARWAL 2023.04.24 CC NI ACT No.5292/2021 Sh. Rahul Vs. Sh. Shiv Narain Page No. 11 of 23 WAL 14:20:00 +05'30' "139. Presumption in favour of holder. -- It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability."
18.Nature and scope of presumption under Section 139 of the NI Act has been dealt in a catena of judgments. In Hiten P. Dalal v. Bratindranath Banerjee, (2001) 6 SCC 16, the Hon'ble Supreme Court of India held as under:
"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 v. A. Vaidyanatha Iyer [AIR 1958 SC 61 : 1958 Cri LJ 232] 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. at p. 65, para 14.) Such a presumption is a presumption of law, as distinguished from a presumption of fact which describes provisions 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 non-existence of the presumed fact.
23. In other words, provided the facts required to form the basis of a presumption of law exist, no discretion is left with the court but to draw the statutory conclusion, but this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary. A fact is said to be proved when, EBBANI Digitally by EBBANI signed Page No. 12 of 23 AGGAR Date:
AGGARWAL CC NI ACT No.5292/2021 Sh. Rahul Vs. Sh. Shiv Narain 2023.04.24 WAL 14:20:13 +05'30' "after considering the matters before it, the court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists" [ Section 3, Evidence Act]. 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 standard of reasonability being that of the "prudent man."
19. In case Rangappa v. Sri Mohan, (2010) 11 SCC 441, Hon'ble Supreme Court has further held as under:
"27. 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. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the defendant-accused cannot be expected to discharge an unduly high standard or proof.
28. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that 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 a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the EBBANI Digitally signed by EBBANI Page No. 13 of 23 AGGAR Date:
AGGARWAL CC NI ACT No.5292/2021 Sh. Rahul Vs. Sh. Shiv Narain WAL 14:20:26 +05'30' 2023.04.24 accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own."
20. In Basalingappa vs Mudibasappa, [(2019) 5 SCC 418] (hereinafter referred to as Basalingappa Case), certain principles regarding rebuttal of presumption under Section 139 of the NI Act has been laid down which are as under:
25. We having noticed the ratio laid down by this Court in the above cases on Sections 118(a) and 139, we now summarise the principles enumerated by this Court in following manner:
25.1. 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.
25.2. 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. 25.3. To rebut the presumption, 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 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. 25.4. 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. 25.5. It is not necessary for the accused to come in the witness box to support his defence."(Empahsis supplied)
21. Section 139 thus creates a rebuttable presumption in favour of complainant which casts an onus on accused to rebut the same on basis of preponderance of probabilities. It is not necessary that accused enters the witness box himself for this purpose, however, making of bare averments is not CC NI ACT No.5292/2021 Sh. Rahul Vs. Sh. Shiv Narain Page No. 14 of 23 EBBANI Digitally by EBBANI signed AGGAR AGGARWAL Date: 2023.04.24 WAL 14:20:46 +05'30' enough and some proof has to be adduced by accused either from the material which is already available on record or by leading cogent evidence in support of his defence.
ANALYSIS ON MERITS
22. Position of law being as above, it becomes imperative to examine as to whether complainant has been able to establish the basic ingredients for commission of offence under Section 138 of the NI Act and if the complainant succeeds in same, whether accused has been able to rebut the presumption drawn under Section 139 of the NI Act or not.
23. In the case at hand, accused has admitted his signatures on the cheque-in-question, therefore, a presumption exists in favour of complainant under Section 139 of the NI Act which includes the presumption that cheque-in-question was issued in discharge of a legally enforceable debt. [Reliance has been placed on Basalingappa Case (supra)]
24. With respect to essential ingredients for commission of offence under Section 138 of the NI Act, it can be seen from record that the cheque in question Ex. CW-1/1 was presented within three months from the date of issuance viz 17.12.2020 and the same was dishonoured with remarks "Account Closed" vide return memo dated 23.12.2020 Ex. CW-1/2. Legal Demand Notice dated 26.12.2020 Ex. CW- 1/3 was sent to the accused, i.e. within 30 days of dishonour and the said legal demand notice was delivered to the accused on 28.12.2020 as per the tracking report Ex. CW- 1/5 as well as screenshot of service of legal demand notice CC NI ACT No.5292/2021 Sh. Rahul Vs. Sh. Shiv Narain Page No. 15 of 23 EBBANI Digitally by EBBANI signed AGGAR Date: 2023.04.24 AGGARWAL WAL 14:21:03 +05'30' by way of WhatsApp along with certificate under Section 65-B of Indian Evidence Act Ex. CW-1/6 (Colly). Thereafter, the present complaint was filed within the prescribed period of limitation, i.e., on 05.02.2021. Further, the accused has admitted his signatures on cheque-in- question in the Notice framed against him under Section 251 Cr.P.C. and therefore, it can be inferred that cheque-in- question was issued from an account maintained by the accused himself.
25. In view of the foregoing discussion, complainant has been able to establish basic ingredients for commission of offence under Section 138 of the NI Act. The onus in now on accused to rebut this presumption drawn in favour of complainant on basis of preponderance of probabilities.
26. In order to rebut the presumption, accused has raised following issues in his defence:
26.1 Financial Capacity of complainant: Accused has questioned the financial capacity of complainant to disburse a friendly loan of Rs. 9,00,000/- to accused primarily on the ground that complainant and his wife had themselves taken loan from bank to disburse alleged friendly loan to accused.
Complainant has placed on record Loan Application form of loan applied by himself and his wife which is Ex. CW- 1/9 (Colly). Ld. Counsel for accused has relied upon Tedhi Singh vs. Narayan Dass Mahant, (2022) 6 SCC 735 in support of his contention that complainant is bound to prove his financial capacity to disburse loan when the same has been challenged by the accused.
EBBANI Digitally signed by EBBANI AGGAR AGGARWAL Date: 2023.04.24 Page No. 16 of 23 WAL 14:21:18 +05'30' CC NI ACT No.5292/2021 Sh. Rahul Vs. Sh. Shiv Narain 26.2 Legal Demand Notice and summons were sent on wrong address: Ld. Counsel for accused has argued that complainant has himself admitted in the cross examination that legal demand notice and summons were sent on a wrong address and therefore, one of the statutory requirements for an offence under Section 138 of the NI Act has not been fulfilled. Ld. Counsel for accused has relied upon Engineering Control vs. Banday Infratech Pvt. Ltd., (2022) 4 BC 414 and Harman Electronics Private Limited and Another vs. National Panasonic India Private Ltd., (2009) 1 SCC 720 to argue that there is a difference between sending and actually receiving the legal demand notice.
Ld. Counsel for accused has further argued that accused appeared before this Court only after fresh address was furnished by the complainant which further substantiates the argument that legal demand notice was sent on a wrong address.
26.3 Non-existence of legally enforceable debt: Ld. Counsel for accused has argued that accused has been consistent in this defence and has stated that he never took friendly loan from complainant and that accused never handed over the cheque-in-question to complainant.
Ld. Counsel for accused has also argued that cheque-in- question forms part of the blank signed cheque book of accused which got stolen and after the same was stolen, accused wrote a letter to his bank to close his bank account which is Ex. DW-1/2 and that accused had also filed a police complaint which is Mark -A. EBBANI Digitally signed by AGGAR EBBANI AGGARWAL Date: 2023.04.24 14:21:34 +05'30' CC NI ACT No.5292/2021 Sh. Rahul Vs. Sh. Shiv Narain Page No. 17 of 23 WAL
27. Coming to the contention that legal demand notice and summons were sent on a wrong address, Ld. Counsel for accused has relied upon the admission of complainant, in his cross-examination, that summons as well as legal demand notice were sent on an incorrect address and has further argued that accused appeared before this Court only after a fresh address was furnished by complainant.
28. Hon'ble Supreme Court of India in case of C.C. Alavi Haji v. Palapetty Muhammed, (2007) 6 SCC 555 (hereinafter referred to as C.C. Alavi Haji Case), has held as under:
"...an accused who has not received the legal demand notice cannot claim the benefit of the defence of non-receipt of the same as once summons are served upon him, it is the duty of such an accused to make the payment of the cheque in question within 15 days of receiving summons from the court. Once this option is not availed by him, the benefit of defence of non- service of notice cannot be given to the accused."
29. Perusal of record shows that the address of accused which was furnished by complainant, at the time of filing of the complaint is 668, Near Barat Ghar, V.P.O Rajokri, New Delhi - 110038 and vide order dated 09.10.2021, complainant had verified the address of accused and summons were again sent to the accused on the same address in furtherance of which accused entered appearance before this Court on 06.06.2022. In view of the same, this court is of the opinion that present case is squarely covered by C.C. Alavi Haji Case (supra) of Hon'ble Supreme Court of India as no fresh address was furnished by complainant and accused had appeared before this Court after summons were sent on the same address where to which the legal EBBANI Digitally signed CC NI ACT No.5292/2021 Sh. Rahul Vs. Sh. Shiv Narain Page No. 18 of 23 AGGAR byAGGARWAL EBBANI Date: 2023.04.24 WAL 14:21:56 +05'30' demand notice was also sent. It is also pertinent to mention that the tracking report of legal demand notice (Ex. CW- 1/5) shows item delivered, Accused had also admitted that he had received the legal demand notice in the Notice framed against him under Section 251 of Cr.P.C. and the address which has been furnished by accused himself in the Notice framed against him mentions the same house number, 668 and area, Rajokri as was mentioned in the address to which the legal demand notice was sent.
30. The judgment of Harman Electronics Private Limited and Another vs. National Panasonic India Private Ltd., (2009) 1 SCC 720 relied upon by Ld. Counsel for accused is not applicable to the present case as in the said judgement, the question which was being ascertained by the Hon'ble Supreme Court was with respect to giving and receipt of legal demand notice to determine the territorial jurisdiction. Further, judgement of Hon'ble High Court of Jammu and Kashmir in Engineering Control vs. Banday Infratech Pvt. Ltd., (2022) 4 BC 414 is also not applicable since the present case is squarely covered by the mandate of C.C. Alavi Haji Case (supra).
31. Coming to the central defence, i.e., non-existence of legally enforceable debt, Accused has has placed on following documents and evidence:
31.1 Ex. DW-1/2: Copy of letter which he had written to his bank dated 14.07.2020.
31.2 Mark -A: Copy of police complaint filed by accused for his stolen cheques and in order to prove the said EBBANI Digitally by EBBANI signed CC NI ACT No.5292/2021 Sh. Rahul Vs. Sh. Shiv Narain Page No. 19 of 23 AGGAR Date:
AGGARWAL 2023.04.24 WAL 14:22:11 +05'30' complaint, accused has also examined the concerned police official, HC Kanti Lal, as DW-2.
32. Copy of the police complaint (Mark-A) which has been placed on record is undated and further, HC Kanti Lal (DW-
2) has deposed in his examination that no complaint was received from the accused. In view of the same, this Court is of the opinion that Mark-A cannot be relied upon to substantiate the defence of the accused.
33. Accused has been consistent in his defence and has time and again denied taking any financial help from complainant and has stated that some of his blank signed cheques got stolen and one of those cheques is the present cheques-ini- question. Accused had written the letter to his bank requesting to close his bank account on 14.07.2020 (Ex. DW-1/2) which bears stamp of the concerned bank official with a noting that request of the accused (account holder) was received on 27.07.2020. In light of the consistent testimony of the accused coupled with the cogent evidence lead by the accused, the possibility that accused wrote the letter (Ex. DW-1/2) to close his account due to his stolen bank signed cheques cannot be ruled out in entirety. Therefore, this Court is of the opinion that accused has been able to rebut the presumption drawn in favour of complainant under Section 139 of the NI Act on basis of preponderance of probabilities.
34. Once the accused has been able to establish his defence on basis of preponderance of probability, benefit of presumption in terms of Section 139 of the NI Act cannot be extended to complainant. In the absence of benefit of CC NI ACT No.5292/2021 Sh. Rahul Vs. Sh. Shiv Narain Page No. 20 of 23 EBBANI Digitally by EBBANI signed AGGAR AGGARWAL Date: 2023.04.24 WAL 14:22:30 +05'30' such presumption, it becomes imperative to examine as to whether complainant has been able to establish existence of a legally enforceable debt or not.
35. In the case of Tedhi Singh vs. Narayan Dass Mahant, (2022) 6 SCC 735, it has been held by the Hon'ble Supreme Court of India that initially, financial capacity of complainant to disburse loan is immaterial for an offence under Section 138 of the NI Act. However, if accused has questioned the financial capacity of complainant then the same becomes relevant. The Hon'ble Supreme Court has held as under:
"10. The trial court and the first appellate court have noted that in the case under Section 138 of the NI Act the complainant need not show in the first instance that he had the capacity. The proceedings under Section 138 of the NI Act is not a civil suit. At the time, when the complainant gives his evidence, unless a case is set up in the reply notice to the statutory notice sent, that the complainant did not have the wherewithal, it cannot be expected of the complainant to initially lead evidence to show that he had the financial capacity. To that extent, the courts in our view were right in holding on those lines. However, the accused has the right to demonstrate that the complainant in a particular case did not have the capacity and therefore, the case of the accused is acceptable which he can do by producing independent materials, namely, by examining his witnesses and producing documents. It is also open to him to establish the very same aspect by pointing to the materials produced by the complainant himself. He can further, more importantly, achieve this result through the cross-examination of the witnesses of the complainant. Ultimately, it becomes the duty of the courts to consider carefully and appreciate the totality of the evidence and then come to a conclusion whether in the given case, the accused has shown that the case of the complainant is in peril for the reason that the accused has established a probable defence."
EBBANI Digitally by EBBANI signed AGGAR AGGARWAL Date:
CC NI ACT No.5292/2021 Sh. Rahul Vs. Sh. Shiv Narain Page No. 21 of 23 WAL 14:22:45 +05'30' 2023.04.24
36. In the case at hand, Accused has also taken a defence that complainant did not have the financial capacity to disburse a loan of Rs. 9,00,000/- to accused by putting up the said defence through cross-examination of complainant (CW-1) wherein complainant has admitted that he and his wife had taken personal loan from Delhi State Co-operative Bank Ltd. to disburse the alleged friendly loan to accused. Complainant (CW-1) had also deposed that his monthly income was around Rs. 30,000/- to Rs. 35,000/- in July, 2020. The fact that complainant had to take a loan from Bank to disburse the alleged friendly loan to the accused points clearly points that complainant did not have the financial capacity to disburse the alleged friendly loan to accused.
37. It is the case of complainant that complainant had disbursed a friendly loan of Rs. 9,00,000/- to accused in cash, however, complainant has neither examined any other witness nor has put any document on record in support of disbursal of loan. Complainant has placed on record bank account statement of himself and his wife, i.e., Ex. CW-1/8 (Colly) wherein there is an entry dated 30.07.2020 showing withdrawal of Rs. 9,00,000/- by way of cheque to self, however, no evidence has been led by complainant to connect the said withdrawal with the disbursal of present loan in question. On the other hand, accused has denied the alleged loan transaction altogether and has been able to establish that complainant did not have the financial capacity to disburse the alleged friendly loan to accused. In view of the same, this Court is of the opinion that the complainant has not been able to establish existence of a EBBANI Digitally signed by EBBANI CC NI ACT No.5292/2021 Sh. Rahul Vs. Sh. Shiv Narain Page No. 22 of 23 AGGAR AGGARWAL Date: 2023.04.24 WAL 14:23:40 +05'30' legally enforceable debt independently on its own legs without the benefit of presumption under Section 139 of the NI Act.
CONCLUSION
38.In view of the foregoing facts, arguments advanced by the parties, marshalling of evidence as well as established legal position, this court is of the considered opinion that accused has been able to rebut the presumption under Section 139 of the NI Act and has been able to establish his defence on basis of preponderance of probabilities and complainant has not been able to establish existence of legally enforcebale debt. Therefore, this court is of the considered opinion that the accused Shiv Narain s/o Sh. Ram Mehar is not guilty of offence under Section 138 of Negotiable Instruments Act, 1881 and accordingly, is hereby acquitted for offence under Section 138 of Negotiable Instruments Act, 1881.
Announced in open court on 24.04.2023. EBBANI Digitally signed by EBBANI AGGAR AGGARWAL Date: 2023.04.24 WAL 14:23:57 +05'30' (EBBANI AGGARWAL) MM (NI ACT), DIGITAL COURT-09 SOUTH-WEST DISTRICT, DWARKA COURT NEW DELHI 24.04.2023 CC NI ACT No.5292/2021 Sh. Rahul Vs. Sh. Shiv Narain Page No. 23 of 23