Delhi District Court
12. In Rangappa vs Sri Mohan (2010)11 Scc 441, It Was ... on 6 April, 2022
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IN THE COURT OF SH. VIKAS MADAAN, METROPOLITAN
MAGISTRATE (NI ACT), NORTH-WEST, ROHINI, DELHI
CNR No. DLNW020058402014
CC No. 17098-2016
Gourav Sharma s/o Sh. Rakesh Sharma.,
R/o M-3/A-1, Jhulelal Flats, Pitampura,
Delhi-110034
............Complainant
Versus
Rohit Sharma s/o Sh. Shive Darshan Sharma
R/o H. No. 94, Shakti Vihar, PitamPura,
Delhi-110034
............. Accused
JUDGMENT
(1) Name of the complainant, : Gaurav Sharma S/o Sh. Rakesh Sharma (2) Name of accused, : Rohit Sharma S/o Sh. Shive Darshan Sharma (3) Offence complained of or proved : 138 N.I. Act (4) Plea of accused : Pleaded not guilty (5) Date of institution of case : 25.02.2014 (6) Date of reserve of order : 22.12.2021 (7) Date of Final Order : 06.04.2022 (8) Final Order : Acquittal Digitally signed CC No. 17098/2016 VIKAS by VIKAS MADAAN 1 of 13 MADAAN Date: 2022.04.06 16:36:13 +0530 2 1 Vide this judgment I shall dispose of the complaint filed by the complainant under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the 'Act ').
2. Brief facts relevant for the decision of the case are as under: -
The present complaint has been filed by the complainant, Gourav Sharma against the accused, Rohit Sharma under section 138 of the Act. The substance of allegations and assertions of the complaint is that complainant and accused were having cordial relations with each other and accused had approached the complainant for borrowing a friendly loan of Rs. 7,00,000/-( Rupees Seven Lakhs Only) in the first week of October 2013 with the assurance to return the said loan amount up to December 2013. That upon such assurance, complainant had paid the amount of Rs. 7,00,000/- to the accused in cash. That when the complainant impressed upon the accused to return the said loan amount in the month of December 2013, accused sought some more time to repay the loan amount in the first week of January 2014. That in the month of January 2014, in order to discharge his liability, accused had handed over a cheque of Rs. 7,00,000/- bearing no. 768002 dated 08.01.2014 drawn on Indian Overseas Bank, Roop Nagar, Delhi (hereinafter referred to as 'cheque in question'). That when the aforesaid cheque was presented for encashment, the same was returned dishonored with the remarks "Funds Insufficient" vide cheque returning memo dated 11.01.2014. After dishonor of the aforesaid cheque, complainant issued a legal notice dated 27.01.2014 to the accused through Registered AD to the accused calling upon him to pay the loan amount. It is the case of the complainant that Digitally signed CC No. 17098/2016 VIKAS by VIKAS MADAAN 2 of 13 MADAAN Date: 2022.04.06 16:36:26 +0530 3 despite service/receipt of the notice, accused failed to make the payment to the complainant within stipulated period and hence, the present complaint.
3. In his pre-summoning evidence, complainant examined himself on affidavit vide Ex. CW1/A. He reiterated the contents of complaint and placed on record, cheque bearing no. 768002 dated 08.01.2014 for a sum of Rs.7,00,000/- (Rupees Seven Lakhs only) drawn on Indian Overseas Bank, Roop Nagar, Delhi as Ex. CW1/1, cheque returning memo dated 11.01.2014 as Ex. CW-1/2, legal notice dated 27.01.2014 as Ex. CW-1/3 and original register A.D. receipts and tracking receipts as Ex. CW1/4(colly).
4. Upon appreciation of pre-summoning evidence, accused was summoned for an offence punishable under Section 138 of the Act and notice under Section 251 Cr.P.C. for this offence was framed upon accused on 21.02.2017 to which he pleaded not guilty and claimed trial. In his plea of defence, accused stated that " I had not issued the cheque in question to the complainant. I never met the complainant prior to this case. The cheque in question is drawn on my bank. The cheque in question bear my signtature, however, the contents in the same were not filled by me. Legal notice regarding the cheque in question was received by me, however, I did not give reply to the same. I had already closed my bank account in November 2012. When I received the legal notice, I had approached my bank to ask as to how the cheque in question got dishonoured due to insufficient funds despite the fact that I have already closed my bank account. Bank Official informed me that they had not closed the bank Digitally signed CC No. 17098/2016 by VIKAS 3 of 13 MADAAN VIKAS Date:
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account from their master server and the account still operative. I had kept certain blank signed cheques in my office at Peeragarhi Industrial Area in year 2009, the complainant has acted in collusion with my manager and has obtained the cheque in question from him. I do not have any liability towards the complainant."
5. In his evidence, Complainant examined himself as CW1. CW1 has adopted his pre-summoning evidence which is EX. CW1/A and further relied upon the documents which are Ex. CW1/1 to CW1/4(colly) to prove his case against the accused beyond reasonable doubt. CW1 was further subjected to cross-examination by the counsel of the accused.
6. In order to personally explain the incriminating circumstances appearing in evidence against it, the statement of the accused namely Rohit Sharma under section 281 r/w 313 Cr. P.C was recorded without oath on 06.06.2018. In reply, he denied all the incriminating evidences appearing against him and stated that he did not know the complainant and met him first time after the filing of this case. He further stated he had not taken any loan from the accused. He further stated that cheque in question was not issued by him in favour of the complainant. He admitted his signatures upon the cheque in question but denied its contents being filled up by him. He further stated that he used to keep his signed cheque for day to day expenses in his office and one of his employee namely Sh. Dinesh had access to his drawer where he kept the signed cheques. He further admitted that the legal notice was received by him. He further wished to lead defence evidence.
Digitally signed by VIKAS MADAANCC No. 17098/2016 VIKAS Date: 4 of 13
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7. Final arguments were addressed by the both the Ld. Counsel for the complainant and accused. I have heard the submissions of both parties and have given my thoughtful consideration to the material appearing on record.
8. The factual position being thus, the legal bench mark which is to be satisfied in order to constitute an offence u/s 138 N. I. Act.
First Ingredient: The cheque was drawn by a person on an account maintained by him for payment of money and the same is presented for payment within a period of 3 months from the date on which it is drawn or within the period of its validity;
Second Ingredient: The cheque was drawn by the drawer for discharge of any legally enforceable debt or other liability;
Third Ingredient: The cheque was returned unpaid by the bank due to either insufficiency of funds in the account to honour the cheque or that it exceeds the amount arranged to be paid from that account on an agreement made with that bank;
Fourth Ingredient: A demand of the said amount has been made by the payee or holder in due course of the cheque by a notice in writing given to the drawer within thirty days of the receipt of information of the dishonor of cheque from the bank;
Fifth Ingredient: The drawer fails to make payment of the said amount of money within fifteen days from the date of receipt of notice.
Digitally signedVIKAS by VIKAS MADAAN MADAAN Date: 2022.04.06 CC No. 17098/2016 16:36:58 +0530 5 of 13 6
9. Being cumulative, a person who had drawn the cheque is deemed to have committed an offence u/s 138 NI Act when all the aforementioned ingredients are satisfied.
10. Notably, there is no dispute at bar about the proof of first, third, fourth and fifth ingredients. The complainant had proved the original cheque vide Ex. CW1/1 as the accused himself admitted his signature on the cheque in question. The cheque in question was return unpaid vide return memo Ex. CW1/2 with remarks "Funds Insufficient" was also duly proved. The complainant had proved on record the legal notice vide Ex. CW1/3 and the notice was duly sent was proved vide Ex. CW1/4 (colly) as accused himself admitted that he had received the legal demand notice. As such, on the basis of above, the first, third, fourth and fifth ingredient of the offence under section 138 NI Act stands proved against the accused.
11. As far as the proof of the second ingredient is concerned, the accused has already admitted his signature upon the cheque in question and once the foundational facts that the cheque in question bears the signatures of the accused and the same have been drawn on account maintained by him are established a factual base is established to invoke the presumption of cheque having being issued in discharge of a legally recoverable debt and drawn for good consideration arises by virtue of Section 118(a) R/W Section 139 of NI Act. It is a mandatory presumption though the accused is entitled to rebut the said presumption. In a catena of judgments, it has been laid down by the Hon'ble Supreme Court that such presumption in favour of the complainant cannot be rebutted by a mere plausible explanation but more than a plausible explanation is required.
Digitally signed by VIKAS VIKAS MADAAN
MADAAN Date:
2022.04.06
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12. In Rangappa Vs Sri Mohan (2010)11 SCC 441, it was observed that Section 139 of N.I. Act is stated to be an example of a reverse onus clause which is in tune with the legislator intend of improving the credibility of negotiable instruments. Section 138 of NI Act provides for speedy remedy in a criminal forum, in relation to dishonour of cheques.
13. In case of Kumar Exports vs. Sharma Carpets, (2009) 2 SCC 513, the Hon'ble Supreme Court had held:
"The accused under Section 138 NI Act has two options. He can either show that the consideration and debt did not exit or that under the particular circumstances of the case, the non-existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumption, an accused is not expected to prove his defence beyond reasonable doubt as it 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 non-existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which his 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 Digitally signed CC No. 17098/2016 by VIKAS 7 of 13 MADAAN VIKAS Date:
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of which, the court may either believe that the consideration and debt did not exist or their non-existence was so probably that a prudent man 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 the circumstantial evidence and if the circumstances so relied upon are so 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 arises under Section 118 and 139 of NI Act''.
14. According to the scheme of N. I. Act, on proof of foundational facts, a presumption arises as to the cheque having been issued in discharge of the legal liability and the burden is on the accused to rebut the said presumption. This clearly is an instance of the rule of "reverse onus" in action where it is incumbent on the accused to lead what can be called as "negative evidence". The evidence of a character, not to prove a fact affirmative, but to lead evidence to show non-existence of a liability. Keeping in view, this is a departure from the cardinal rule of "presumption of innocence" in favour of the accused, keeping in mind that the negative evidence is not easy to be led by its very nature. It is now clearly settled that the accused can reverse this presumption on a scale of preponderance of probabilities. Lack of legally enforceable debt in favour of the complainant need not be proved to the hilt beyond all reasonable doubts. Preponderance is superiority in weight. Preponderance Digitally signed by VIKAS VIKAS MADAAN MADAAN Date:
2022.04.06 CC No. 17098/2016 16:37:27 +0530 8 of 13 9 of probabilities means more probable than not and superior in evidentiary weight than the opposite.
15. So far as the facts of liability is concerned, in view of mandatory presumption of law as discussed above, if any cheque has been produced by the complainant bearing the signatures of the accused, there cannot be any inherent lacuna in the existence of the liability. But then definitely, accused can point loop holes in the story of the complainant by impeaching the credit of the witness during his cross-examination. The accused can discharge his burden by demonstrating the preponderance of probabilities coming in its way. In the present case, the defences raised by the accused to rebut the presumptions are discussed below:
A. DEFENCE THAT CHEQUE IN QUESTION WAS NEVER ISSUED TO THE COMPLAINANT
16. The Ld. Counsel for the accused has argued that the cheque in question was never handed over to the complainant and indeed was stolen from his office by the complainant in connivance with one of the employees of his office. It was further contended that accused used to keep some signed cheques in his drawer for his official day to day expenses and the cheque in question was stolen from his office.
17. In the present case, accused has not brought any cogent evidence on record to prove that cheque in question was stolen from his office. In a situation where a theft is committed, a prudent person would be expected to file a complaint or initiate any criminal proceedings against the offender. However, in the present case, no such action was initiated by the accused against his employee or against the complainant to show that the cheque in question was stolen from his office. Hence, a mere bald assertion in absence of any cogent evidence that the cheque was stolen Digitally signed CC No. 17098/2016 by VIKAS 9 of 13 VIKAS MADAAN MADAAN Date:
2022.04.06 16:37:41 +0530 10 from the office is not enough to substantiate his defence and thus, this defence of the accused is liable to be dismissed.
B. DEFENCE THAT NO FRIENDLY LOAN WAS ADVANCED
18. Ld. Counsel for the accused has contended that no friendly loan was ever advanced by the complainant to the accused. It is further contended that there were no friendly relations between the accused and complainant.
19. Before discussing the above said defence, here it would be prudent to refer the decision of the Hon'ble High Court of Delhi in the case titled as Sheela Sharma vs. Mahender Pal (2016 SCC Online Del 4696), where inter-alia, it was observed that:
"31. In cases where the complainant claims to have advanced a friendly loan in cash, and where the transaction of loan is not evidenced by any the availability of funds in cash with the complainant/lender, and its advancement as loan to the accused have been reflected in the income tax returns of the complainant/lender, or not, become relevant. If, the availability of funds, and the loan transaction itself is not so reflected, that factor is taken note of by the Court as relevant to hold that the presumption under Section 118 and 139 of the NI Act stands rebutted. However, these considerations would not be relevant, where loan transaction itself is otherwise established, either through documentary evidence-such as, a receipt or a loan agreement, or acknowledgement executed by the accused, or by oral evidence of an independent witness who is found to be credible. In the present case, the loan transaction, though not recorded in an agreement, or a receipt or acknowledgement executed by the accused, and though not reflected in the income-tax Digitally signed by VIKAS CC No. 17098/2016 VIKAS MADAAN 10 of 13 MADAAN Date:
2022.04.06 16:37:49 +0530 11 returns of the complainant, is evidenced by the oral testimony of CW-2, who is an independent witness and highly credible..."
20. In the present case, admittedly there is no document on record to prove that the friendly loan of Rs. 7,00,000/- was given to the accused and neither there is any independent witness to prove that the said loan was given to the accused by the complainant. However, the complainant in his complaint and pre-summoning evidence deposed that accused was in habit of taking small friendly loan from him as there were cordial relations between them. But surprisingly, in his cross-examination, the complainant deposed that expect the loan in question here no other loan was granted by him to the accused. It was further deposed in his cross- examination that accused was introduced to him by Rakesh Beniwal in the year 2012 and they used to sit together in a group. However, complainant did not remember the name of any other person who used to sit in his group along with accused. It seems quite improbable on the part of the complainant that despite sitting in a common group complainant did not have any information about the group member. Apart from this, in his cross-examination, he further stated that accused used to meet him once or twice in a week but despite that he was not aware about the job of the accused. All these inconsistencies on the part of the complainant raised a shadow of doubt over his claims that he was having friendly and cordial relations with the accused. Even complainant had not examined Sh. Rakesh Beniwal who is said to be a common friend of accused and complainant. Resultantly, it can be said that there were no friendly relations between the accused and complainant. Now so far as the alleged loan transaction is concerned, no documents or receipts were executed at the time of lending of the said loan. Neither any ITR was filed showing the lending of loan nor any independent witness was examined by the Digitally signed CC No. 17098/2016 by VIKAS 11 of 13 VIKAS MADAAN MADAAN Date:
2022.04.06 16:37:58 +0530 12 complainant to prove that the loan was given by him to the accused. It seems quite improbable that a prudent person would lend such a huge amount to any person without executing any receipts or documents or collateral guarantees. Consequently, keeping in view the foregoing discussions, this court is of the considered view that accused has succeeded to create doubt in complainant's claim of advancing friendly loan of Rs. 7,00,000/-.
Thus, this court finds merit in the defence raised by the accused.
21. In the present case, as already observed, the complainant failed to prove that liability of Rs. 7,00,000/- existed towards the accused qua the cheque in question. Consequently, this court is inclined to agree with this argument of the accused. Resultantly, the accused raised a plausible defence and successfully rebutted the presumption under section 118 and section 139 of the NI Act based on test of preponderance of probabilities.
22. Thus, in view of the totality of the circumstance and the settled legal positions as discussed above, the case attempted to be built by the complainant, appears to be suffering from fatal infirmities so much so, it goes directly to the root of the case and shakes the very edifice on which the case of the complainant rests. It is also relevant to mention here that it is of paramount importance to demand evidence of unambiguous, impeccable and of unimpeachable in nature so as to entail criminal conviction of the accused and which the complainant has failed to bring.
23. In the case of 'Kulvinder Singh vs Kafeel Ahmad'', Crl L. P. 478 of 2011, decided on 04.01.2013, Hon'ble Delhi High Court has held that the basic principle in criminal law is that the guilt of the accused / respondent, must be proved beyond reasonable doubts and if there is any Digitally signed by VIKAS CC No. 17098/2016 VIKAS MADAAN 12 of 13 MADAAN Date:
2022.04.06 16:38:08 +0530 13 slightest doubt about the commission of an offence, then the benefit has to accrue to him.
CONCLUSION
24. In view of the above discussions, the present case appears to be a fit case where benefit of doubt can be extended to the accused. Accordingly, in view of the above discussions, this court hold that the complainant has failed to prove his case. The accused has been able to rebut presumption under Section 118 and 139 NI Act arising in favour of the complainant.
25. In light of foregoing reasons, it is clear that accused Rohit Sharma has succeeded in rebutting the presumption of legal liability and the complainant has failed to prove the same affirmatively. As a result, accused Rohit Sharma stands acquitted from the offence u/s 138 NI Act.
26. Accused has furnished bail bond and surety bond in terms of Section 437A Cr. PC. Accordingly, bail bond and surety bond of the accused, furnished at the time of first appearance, are cancelled, and the surety is discharged. Documents of surety, if any be rreturned after cancellation of endorsement thereon. Digitally signed by VIKAS MADAAN VIKAS Date:
MADAAN 2022.04.06
16:38:16
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ANNOUNCED IN THE OPEN COURT (VIKAS MADAAN)
TODAY 06.04.2022 METROPOLITAN MAGISTRATE ROHINI
DISTRICT COURTS DELHI
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