Delhi District Court
Sanjay Dandona vs State And Anr on 28 November, 2024
IN THE COURT OF SH. ABHISHEK GOYAL, ADDITIONAL
SESSIONS JUDGE-03, CENTRAL DISTRICT, TIS HAZARI
COURTS, DELHI
CNR No.: DLCT01-014834-2019
CRIMINAL APPEAL No.: 435/2019
SHRI. SANJAY DANDONA,
S/o. Shri. K. C. Dandona,
R/o. CD-245, Visakha Enclave,
Pitampura, Delhi-110088 ... APPELLANT
VERSUS
1. STATE,
Through Directorate of Prosecution,
Central District, NCT of Delhi.
2. SHRI. SUDHIR VIJ,
S/o. Mr. J. N. Vij,
Proprietor, M/s. Kanta Traders,
2/63, Roop Nagar,
Delhi-110007 ... RESPONDENTS
Date of Institution : 31.10.2019
Date when judgment was reserved : 25.09.2024
Date when judgment is pronounced : 28.11.2024
JUDGMENT
1. The present appeal has been preferred under Section 374 of the Code of Criminal Procedure, 1973 (hereinafter, referred to as 'Cr.P.C.') against the judgment dated 23.09.2019 (hereinafter referred to as 'impugned judgment') passed by the learned Metropolitan Magistrate-05/Ld. MM-05 (NI Act), Central, Tis Hazari Courts, Delhi (hereinafter referred to as the 'Ld. Trial Court/Ld. MM') in complaint case, bearing "Sudhir Vij v. Sanjay Dandona, CC No. 3373/2017", convicting the appellant for the offence under Section 138 Negotiable Instrument Act, 1881 (hereinafter referred to as 'NI Act'), and the consequent order of sentence dated 04.10.2019 (hereinafter referred to as CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 1 of 46 ABHISHEK Digitally signed by ABHISHEK GOYAL GOYAL Date: 2024.11.28 16:45:59 +0530 'impugned order'), passed by the Ld. Trial Court, awarding the appellant; simple imprisonment for a period of 02 (two) months along with fine of Rs. 2,50,000/- (Rupees Two Lakhs and Fifty Thousand only), the said amount to be paid to the complainant as compensation, and in default of payment of fine, the appellant was directed to undergo simple imprisonment for a further period of 01 (one) month (hereinafter impugned judgment and impugned order are collectively referred to as the 'impugned judgment and order').
2. Succinctly, case of the complainant (hereinafter referred to as the 'complainant/respondent no. 2') before the Ld. Trial Court was that the accused (the appellant herein) was working as a controller/supervisor with the complainant and that parties had entered into an agreement dated 01.10.2005 (hereinafter referred to as the 'agreement/agreement in question'), whereby the appellant/accused acknowledged his liability of Rs. 7,50,000/- (Rupees Seven Lakhs Fifty Thousand only), towards respondent no. 2/complainant and further assured the collection of the outstanding payment, to be recovered from the various customers of respondent no. 2/complainant to a tune of Rs. 26,65,482/- (Rupees Twenty Six Lakhs Sixty Five Thousand Four Hundred and Eighty Two only). Further, as per the complainant/respondent no. 2, against the partial discharge of the liability, the appellant issued a total of eight cheques, including the cheque bearing No. 418807, dated 10.08.2008, amounting to Rs. 50,000/- (Rupees Fifty Thousand only) and cheque bearing No. 418808, dated 20.08.2008, amounting to Rs. 1,00,000/- (Rupees One Lakh only), both drawn on Andhra Bank, Chandni Chowk, Delhi-110006 (hereinafter both the said cheques are collectively referred to as the 'cheques in CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 2 of 46 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date: 2024.11.28 16:46:03 +0530 question/dishonoured cheques'). Further, as per the complainant/respondent no. 2, the appellant/accused is proclaimed to have assured respondent no. 2 that the said cheques/cheques in question would be honoured upon their presentation. However, the said cheques were returned dishonoured/unpaid upon presentation with remarks 'Funds Insufficient', vide cheque returning memo dated 17/18.09.2008. Accordingly, a legal notice dated 27.09.2008, was served upon the appellant/accused by respondent no. 2. However, since no payment was made by the accused/appellant despite receipt of said notice/legal demand notice, the complainant/respondent no. 2, initiated the proceedings under Section 138 NI Act against the appellant by filing the complaint in question. 2.1. Notably, consequent upon pre-summoning evidence by way of affidavit having been tendered by the complainant/respondent no. 2 and thereupon, Ld. Trial Court's 1 taking cognizance of the offence on 27.11.2008, summons was issued to the appellant/accused. Subsequently, upon the appellant entering appearance before the Ld. Trial Court, notice under Section 251 Cr.P.C. was framed against him vide order dated 06.03.2010, to which, the appellant plead not guilty and claimed trial. Relevantly, during the course of trial, complainant examined himself as CW-1, while relying upon the documents, i.e., Copy of Agreement dated 01.10.2005 (Ex.CW1/1); Original cheques/cheques in question/dishonoured cheques (Ex. CW1/2 and Ex. CW1/3); cheque return memo(s), Ex. CW1/4 to Ex. CW1/7; Copy of legal demand notice dated 27.09.2008 ( Ex.
1Notably, the complaint in question was initially filed before the Ld. MM, Rohini District Courts by the complainant. However, subsequent, upon coming into force of the Negotiable Instruments (Amendment) Second Ordinance, 2015 [No. 7 of 2015] and pursuant to the order dated 12.04.2016 of Ld. MM, Rohini, the complaint was transferred to the District and Sessions Court, Central, THC via Ld. CMM, which was marked to Ld. Trial Court/Ld. MM-05, Central, THC.
CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 3 of 46
ABHISHEK ABHISHEK
Digitally signed by
GOYAL
GOYAL Date: 2024.11.28 16:46:07
+0530
CW1/8); postal receipts, Ex. CW1/9 to Ex. CW1/11; as well as the appellant's reply to the complainant's legal demand notice dated 13.10.2008 (Ex. CW1/12), as well as the complainant was cross examined, at length, by/on behalf of the appellant. The complainant/respondent no. 2 further examined, Mr. Tilak Raj Kapoor/CW-2, in support of his case. Subsequently, on conclusion of complainant's evidence, recording of statement of the appellant/accused under Section(s) 281/313 Cr.P.C. on 06.08.2018, appellant's leading witnesses/defence evidence in his support, as well as on conclusion of arguments on behalf of the parties, as aforementioned, the Ld. Trial Court vide impugned judgment and order, while holding the appellant guilty of the offence, punishable under Sections 138 NI Act, sentenced him in the manner, as noted hereinabove.
3. Learned Counsel for the appellant outrightly contended that the impugned judgment and order were passed by the Ld. Trial Court on mere conjunctures, surmises and in contravention of the settled principles of law, deserving their setting aside. In this regard, Ld. Counsel vehemently averred that the Ld. Trial Court, while passing the impugned order, failed to appreciate that in the instant case, there are numerous cavernous voids in the case put forth by the complainant and that the complainant's story neither inspires confidence, nor appeals to the senses of a prudent man. In fact, as per the Ld. Counsel, in the absence of requisite/necessary averments in the complaint along with the documents filed therewith as well as pre summoning evidence regarding alleged existence of legally recoverable debt, the cognizance of offence under Section 138 NI Act, itself is bad in law, entitling the impugned judgment and order to be set aside, at the outset. It was further submitted by Ld. CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 4 of 46 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date: 2024.11.28 16:46:12 +0530 Counsel that the Ld. Trial Court failed to appreciate that the cheques in question could not be believed to have been issued in whole or part discharge of liability. Further, as per Ld. Counsel, the Ld. Trial Court failed to appreciate that the alleged agreement dated 01.10.2005 (Ex. CW-1/1) was neither proved by the complainant/CW-1 nor by the witness/CW-2, which was specifically denied by the appellant herein. Even otherwise, as per the Ld. Counsel, the Ld. Trial Court was oblivious to the fact that Ex. CW-1/1, ex-facie is not enforceable contract, for want of consideration and ought not to have been accepted as evidence of any alleged legally enforceable debt or liability. Ergo, as per the Ld. Counsel, no presumption under Section 139 NI Act could have been drawn against the appellant herein, besides, it was contended that the Ld. Trial Court failed to appreciate that in the absence of averments or testimony of the complainant, either in complaint or legal notice (Ex. CW1/8) or evidence by way of affidavit, regarding the existence of legally recoverable debt, such presumption (presumption under Sections 118/139 NI Act) was not made out in favour of the complainant/respondent no. 2 and against the appellant, herein.
3.1. Ld. Counsel for the appellant further asserted that the cheques in question (Ex. CW1/2 and Ex. CW1/3) along with 6 (six) other cheques, all dated of the year, 2008, being mentioned in the alleged agreement of the year 2005 in handwriting, admittedly of the complainant, is sufficient suspicious circumstance, disproving the case of the complainant. Even otherwise, as per the Ld. Counsel, the Ld. Trial Court omitted to consider that the cheques in question, on the basis of the facts and circumstances noted on record, could not be believed to have been issued in whole or part, discharge of any CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 5 of 46 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date: 2024.11.28 16:46:15 +0530 liability. On the contrary, as per the Ld. Counsel, the appellant sufficiently proved that all the eight cheques mentioned in the agreement, Ex. CW1/1, including the cheques in question , i.e., Ex. CW1/2 and Ex. CW1/3, were retained by the complainant/respondent no. 2, since 2005 as security of payment for value of stock agreed to be purchased by the appellant on the complainant suddenly closing down his business. Ld. Counsel further submitted that the Ld. Trial Court further failed to appreciate that it was proved on record that the said stocks were subsequently sold to some Rohit Kumar and not given/sold to the appellant, attributing any liability on the appellant/accused. Further, as per the Ld. Counsel, the appellant sufficiently proved his defence for rebutting any presumption under Section 139 r/w Section 118 NI Act. In distinction, as per the Ld. Counsel, the complainant/respondent no. 2, failed to produce any evidence to disprove the defence raised by the appellant. In this regard, Ld. Counsel further asserted that the Ld. Trial Court erred by failing to consider that the case of the complainant could not be believed in the absence of testimony of alleged customers or documentary evidence such as ledger account, sale register, bills, invoices, etc., to prove the alleged outstanding liabilities or that the appellant had, though, collected the amount on behalf of respondent no. 2, however, failed to remit the same to the complainant/respondent no.2.
3.2. Ld. Counsel for the appellant further fervently argued that the Ld. Trial Court further failed to appreciate that had the liabilities been related to the amount allegedly due to the complainant's/respondent no. 2's firm, then, the cheques in question could not have been issued in the name of the complainant/respondent no. 2, as such, the cheques have no CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 6 of 46 Digitally signed ABHISHEK by ABHISHEK GOYAL GOYAL Date: 2024.11.28 16:46:19 +0530 connection with the said alleged liability. Ergo, under such circumstances, Ld. Counsel asserted that defence raised by the appellant becomes even more probable and appealing to the senses of prudent man, which was erroneously overlooked by the Ld. Trial Court, while convicting the appellant herein. Ld. Counsel further submitted that the Ld. Trial Court further ignored the clear evidence of admission of CW-1 regarding tampering of Ex. CW1/1 and similar admission of CW-1 testifying that the cheque in question were accepted as collateral and not in discharge. It was further contended that the Ld. Trial Court failed to appreciate that as per the version of the complainant, undated cheques were held by the complainant since 2005 and presented only on the year 2008, way beyond the period of validity of said cheques. Further, as per the Ld. Counsel, the Ld. Trial Court committed grave error in deriving corroboration from failure of accused to demand unused cheques lying with the complainant or file any complaint regarding the same, in the absence of reliable substantive evidence to otherwise support the case of complainant. On the contrary, it was vehemently asserted that the Ld. Trial Court based its order of conviction only on selective inculpatory portion of the appellant and failed to appreciate the testimonies of the appellant (DW-2) as well as defence witness (DW-1) in their entirety, besides failed to consider the appellant's reply (Ex. CW1/12) to the legal demand notice (Ex. CW1/8), belying the case of respondent no. 2. In this regard, Ld. Counsel further submitted that the Ld. Trial Court further failed to appreciate that ten cheques, i.e., Ex. DW2/1 (Colly.), produced by respondent no. 2 to confront appellant (DW-2), have in fact, rendered the complainant's case quite suspicious, vitiating its veracity. Further, as per the Ld. Trial Court, the Ld. Trial Court CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 7 of 46 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date: 2024.11.28 16:46:24 +0530 gravely erred in concluding that the 'so called' chit fund liability was subsumed on execution of the agreement, Ex. CW1/1, which assumption of the Ld. Trial Court, as per the Ld. Counsel, is contrary even to the contents of the said agreement. Even otherwise, as per the Ld. Counsel, the said presumption/assumption could not have been raised by the Ld. Trial Court as the same was never the case of the complainant/respondent no. 2, herein. Accordingly, Ld. Counsel submitted that not only did the Ld. Trial Court failed to consider the truth of circumstances and passed the impugned judgment in haste, rather, did not properly appreciate/examine the facts of the present case, wrongly holding the appellant guilty of the aforementioned offence. Even otherwise, as per the Ld. Counsel, the impugned order on sentence was passed by the Ld. Trial Court, inconsiderate of the correct factual scenario, awarding an exorbitant sentence and order of compensation against the appellant. Consequently, the Ld. Counsel inter alia prayed that the present appeal be allowed, and the impugned judgment and order be set aside, and the appellant be acquitted of the alleged charges. In support of the said contentions, reliance was placed upon the decisions in; Indus Airways Private Limited v. Magnum Aviation Private Limited, (2014) 12 SCC 539; and Om Prakash Berlia v. Unit Trust of India, AIR 1983 Bom. 1.
4. Per contra Ld. Counsel for the complainant/respondent no. 2 has submitted that the impugned judgment and order were passed by the Ld. Trial Court after due appreciation of the facts and circumstances of the case as well as in consonance with the settled judicial precedents. Ld. Counsel further submitted that the testimonies of the complainant/CW-1 and CW-2/Mr. Tilak Raj Kapoor have not only been consistent, CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 8 of 46 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date: 2024.11.28 16:46:27 +0530 rather, unblemished as well as lucidly point towards the only inference of guilt of the appellant. It has been further submitted by Ld. Counsel that the respondent No.2 was doing business of sale and supply of fabrics in wholesale basis and the appellant was working with the respondent No. 2 as controller/supervisor. As per the Ld. Counsel, the appellant used to sell the goods/fabrics of respondent No. 2 to various customers and collect payment thereof from the said customers. Further, as per the Ld. Counsel, the appellant had taken a sum of Rs.7,50,000/- (Rupees Seven Lakhs Fifty Thousand only) from respondent No. 2, as well as additionally was obligated to recover a sum of Rs. 19,15,482/- (Rupees Nineteen Lakhs Fifteen Thousand Four Hundred and Eighty Two only), which was due and outstanding, from various customers, to be remitted to respondent No. 2. As such, as per the Ld. Counsel, the appellant was under an obligation to pay a sum of Rs. 26,65,482/- (Rupees Twenty Six Lakhs Sixty Five Thousand Four Hundred and Eighty Two only) to respondent No. 2, which the appellant failed despite undertaking the same under agreement dated 01.10.2005, Ex. CW-1/1 and despite persistent demand from respondent no. 2. Ld. Counsel further vehemently asserted that under such factual scenario and considering that even the cheques issued by the appellant towards part discharge of his obligation, failed/got dishonoured, Ld. Trial Court, rightly observed that the complainant proved his case beyond reasonable doubt and the accused has failed to rebut the presumption under Sections 118(a) and 139 of the NI Act.
4.1. Ld. Counsel for respondent no. 2 further strenuously asserted that the Ld. Trial Court, rightly convicted the appellant for the offence punishable under section 138 NI Act. In this CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 9 of 46 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2024.11.28 16:46:31 +0530 regard, Ld. Counsel contended that as soon as the execution of the cheques is admitted by the appellant or is proved by the respondent No. 2, presumption would be drawn against the accused/appellant, which require the same to be necessarily rebutted by the appellant. However, in the instant case, as per the Ld. Counsel, the appellant has failed to rebut the presumption under Section 118 and 139 NI Act, especially when the appellant himself admitted his signatures inter alia on the cheques in question under his statement under Section 313 Cr.P.C. It was further submitted that the complainant/respondent no. 2 lead his evidence and proved the facts of the complaint as well as the liability of the appellant towards the complainant. However, despite the same, Ld. Counsel asserted, the appellant failed to bring any circumstances against the complainant's case and his obligation, as specified under the complaint as well as admitted by the appellant under agreement dated 01.10.2005. Even otherwise, as per the Ld. Counsel, the appellant even deliberately failed to cross examine CW-2, witness of the said agreement, despite being afforded an opportunity or even to lead any evidence to belie the case of the complainant. It was further submitted that though the appellant asserted that his signatures were obtained on blank paper, which was subsequently misused by the complainant/respondent no. 2, however, has led no evidence to the said effect. In this regard, Ld. Counsel further asserted that till date, no police complaint or any protest was filed by the appellant before respondent no. 2, inter alia asserting alleged misuse of his signatures and cheques in question. Further, as per the Ld. Counsel, even the defence raised by the appellant is quite implausible for the reason that despite the appellant's own admitted case that the stocks in question were handed over CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 10 of 46 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2024.11.28 16:46:34 +0530 to some, Rohit Kumar, the appellant admittedly never sought return of his cheques from respondent no. 2. 4.2. Ld. Counsel further submitted that even the conduct of the appellant would be sufficient to demonstrate the gross falsity in the appellant's case as the appellant failed to lead any evidence or to demonstrate that the cheques were not voluntarily handed over by him to respondent no. 2. Even otherwise, the appellant did not even ask for the cheques from respondent no. 2 in the period of such a long time, as admittedly the agreement was executed in the year 2005 and the cheques were presented for encashment in the year 2008. Further, as per the Ld. Counsel, the appellant even failed to demonstrate that he had no chit fund liability towards the complainant, despite being confronted with Ex. DW2/1(Colly.). In fact, as per the Ld. Counsel, the appellant even failed to produce/adduce Mr. Arjun Gulati to prove his case that the said cheques were issued by the appellant against rent of the shop. Ergo, as per the Ld. Counsel, the facts and circumstances put forth as well as the evidence placed on record, unerringly point out towards the guilt of the appellant and that no fault can be attributed to the finding of the Ld. Trial Court under the impugned judgment, which is based on proper appreciation of facts as well as law. Accordingly, Ld. Counsel for respondent no. 2 submitted that the present appeal deserves to be dismissed at the outset, as grossly malicious and devoid of merits. In support of the said contentions, reliance has been placed upon the decisions in Rangappa v. Sri Mohan, (2010) 11 SCC 441; Hiten P. Dalal v. Bratindranath Banerjee, (2001) 6 SCC 16; Rohitbhai Jivanlal Patel v. State of Gujarat, (2019) 18 SCC 106; V.S. Yadav v. Reena, (2010) (4) CC (HC) 319; and Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197.
CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 11 of 46 Digitally signed ABHISHEK by ABHISHEK GOYAL GOYAL Date: 2024.11.28 16:46:38 +0530
5. The arguments of Ld. Counsel for the appellant as well as that of Ld. Counsel for the complainant/respondent no. 2(s) have been heard and the record(s), including the Trial Court Record, written arguments/written submissions filed by the party(ies) as well as the case laws relied upon by the appellant and respondent no. 2, in support of their respective contentions have been thoroughly perused.
6. At the outset, this Court deems it prudent to enunciate the extent of jurisdiction of this Court in appeal/appellate jurisdiction. In this regard, this Court it is pertinent to outrightly make a reference to the decision of the Hon'ble Supreme Court in Padam Singh v. State of U.P., (2000) 1 SCC 621, wherein the Hon'ble Court, while delving into the 'scope and ambit' of appellate court's jurisdiction inter alia noted as under;
"2. ... It is the duty of an appellate court to look into the evidence adduced in the case and arrive at an independent conclusion as to whether the said evidence can be relied upon or not and even if it can be relied upon, then whether the prosecution can be said to have been proved beyond reasonable doubt on the said evidence. The credibility of a witness has to be adjudged by the appellate court in drawing inference from proved and admitted facts. It must be remembered that the appellate court, like the trial court, has to be satisfied affirmatively that the prosecution case is substantially true and the guilt of the accused has been proved beyond all reasonable doubt as the presumption of innocence with which the accused starts, continues right through until he is held guilty by the final court of appeal and that presumption is neither strengthened by an acquittal nor weakened by a conviction in the trial court..."
(Emphasis supplied)
7. Correspondingly, the Hon'ble Apex Court in Narendra Bhat v. State of Karnataka, (2009) 17 SCC 785, iterated in respect of the foregoing as under;
CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 12 of 46
Digitally signed by
ABHISHEK ABHISHEK
GOYAL
GOYAL Date: 2024.11.28
16:46:42 +0530
"3. This Court has in a series of judgments held that a court exercising appellate power must not only consider questions of law but also questions of fact and in doing so it must subject the evidence to a critical scrutiny. The judgment of the High Court must show that the Court really applied its mind to the facts of the case as particularly when the offence alleged is of a serious nature and may attract a heavy punishment."
(Emphasis supplied)
8. Quite evidently, from a conjoint reading of the aforenoted judicial dictates it can be perspicuously deduced that the jurisdiction of this Court in an appeal extends to reappreciation of the entire material placed on record of the trial court and to arrive at an independent conclusion as to whether the said evidence can be relied upon or not. In fact, as aforenoted, court(s), while exercising appellate power is not only required to consider the question of law, rather, also question of facts to affirmatively reach a conclusion of guilt or innocence of an accused. In fact, it is trite law1 that non-re-appreciation of the evidence on record in an appeal may affect the case of either the prosecution or even the accused. Needless to reemphasize that the appellate court is to be further wary of fact that presumption of innocence of an accused, even extents until an accused is held guilty by the final court of appeal and that such a presumption is neither strengthened by an acquittal nor weakened by a conviction in the trial court.
9. Therefore, being cognizant of the aforesaid principles, however, before proceeding with the determination of the rival contentions of/on behalf of the parties, this Court deems it pertinent to reproduce the relevant provisions under law/NI Act, for the purpose of present adjudication, as under;
1State of Gujarat v. Bhalchandra Laxmishankar Dave, (2021) 2 SCC 735.
CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 13 of 46
Digitally signed by
ABHISHEK ABHISHEK
GOYAL
GOYAL Date: 2024.11.28
16:46:48 +0530
"118. Presumptions as to negotiable instruments- Until the contrary is proved, the following presumptions shall be made:
(a) of consideration: that every negotiable instrument was made or drawn for consideration, and that every such instrument when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;
(b) as to date: that every negotiable instrument bearing a date was made or drawn on such date;
*** *** ***
(e) as to order of indorsement: that the indorsements appearing upon a negotiable instrument were made in the order in which they appear thereon;
*** *** *** Provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him.
*** *** ***
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 provision of this Act, be punished with imprisonment for a term which may extend 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;
CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 14 of 46 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date: 2024.11.28 16:46:56 +0530
(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.
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."
(Emphasis supplied)
10. At the outset, this Court observes that the objective behind the introduction of the provision(s) under Section 138 under the NI Act, by virtue of amendment/insertion in the year 1989, is to inculcate faith in the efficacy of banking operations and credibility in transacting business on negotiable instrument. Notably, at the time of introduction of the said provision(s), the executive was cognizant of the fact that the civil remedies were found to be inadequate to curb the menace on the part of unscrupulous persons and an imminent need was felt for introduction of a penal provision to cease the propensity on the part of dishonest persons to exploit negotiable instruments for personal gains. Consequently, being wary of the impending requirement for a penal provision to bring about faith in monetary transactions, Chapter XVII was introduced in the NI Act, comprising of the provisions from Sections 138 to 148. In particular, penal provisions under Section 138 NI Act were CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 15 of 46 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date: 2024.11.28 16:47:00 +0530 designed to1, "safeguard the faith of the creditor in the drawer of the cheque, which is essential to the economic life of a developing country like India. The provision has been introduced with a view to curb cases of issuing cheques indiscriminately by making stringent provisions and safeguarding interest of creditors". Notably, the Hon'ble Supreme Court in Goa Plast (P) Ltd. v. Chico Ursula D'Souza, (2004) 2 SCC 235 , while inter alia analyzing the intent of introduction of Section 138 NI Act as well as scope and objective of the said provision(s) observed as under;
"26. The object and the ingredients under the provisions, in particular, Sections 138 and 139 of the Act cannot be ignored. Proper and smooth functioning of all business transactions, particularly, of cheques as instruments, primarily depends upon the integrity and honesty of the parties. In our country, in a large number of commercial transactions, it was noted that the cheques were issued even merely as a device not only to stall but even to defraud the creditors. The sanctity and credibility of issuance of cheques in commercial transactions was eroded to a large extent. Undoubtedly, dishonour of a cheque by the bank causes incalculable loss, injury and inconvenience to the payee and the entire credibility of the business transactions within and outside the country suffers a serious setback. Parliament, in order to restore the credibility of cheques as a trustworthy substitute for cash payment enacted the aforesaid provisions. The remedy available in a civil court is a long-drawn matter and an unscrupulous drawer normally takes various pleas to defeat the genuine claim of the payee."
(Emphasis supplied)
11. Relevantly, in order to attract culpability under the provisions of 138 NI Act, the prosecution is inter alia required to prove2; (a) that the cheque was issued/drawn by a person on an account maintained by him for payment of any sum of money to another person from out of that account; (b) the cheque must 1 Vinay Devanna Nayak v. Ryot Sewa Sahakari Bank Ltd., (2008) 2 SCC 305.
2N. Doraisamy v. Archana Enterprises, 1995 SCC OnLine Mad 25.
CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 16 of 46
Digitally signed by
ABHISHEK ABHISHEK GOYAL
GOYAL Date: 2024.11.28
16:47:04 +0530
have been issued against the discharge, either in whole or in part, of any debt or other liability, though, in the absence of proof to the contrary, it shall be presumed that it was issued for the same; and (c) the cheque was returned by the bank unpaid either because the amount of money standing to the credit of that account is insufficient to honour the cheque; or because it exceeds the amount arranged to be paid from the account by an agreement with that bank. Reference in this regard is further made to the decision of Hon'ble Supreme Court in Kusum Ingots & Alloys Ltd. v. Pennar Peterson Securities Ltd., (2000) 2 SCC 745, wherein the Hon'ble Court, while conscientiously analyzing the provisions under Section 138 NI Act inter alia explicated the ingredients of the said provision/offence, as under;
"10. On a reading of the provisions of Section 138 of the NI Act it is clear that the ingredients which are to be satisfied for making out a case under the provision are:
(i) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account for the discharge of any debt or other liability;
(ii) that 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;
(iii) that cheque is returned by the bank unpaid, either because the amount of money standing to the credit of the 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 the bank;
(iv) the payee or the holder in due course of the cheque 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 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;
(v) the drawer of such cheque fails to make payment of the said amount of money to the CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 17 of 46 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date: 2024.11.28 16:47:09 +0530 payee or the holder in due course of the cheque within 15 days of the receipt of the said notice."
(Emphasis supplied)
12. Here, it is further pertinent to observe that the statute/NI Act also provides for raising of a presumption/statutory presumption, casting/permitting a reverse burden on an accused and requiring the accused to prove the non- existence of the presumed fact. Quite evidently, Section 139 NI Act provides for/creates one such exception(s) to the general rule as to the burden of proof and shifts the onus on an accused to rebut the presumption envisaged under law, against him. Another such presumption under law being, under Section 118 NI Act. Reference in this regard, is made to the decision of the Hon'ble Supreme Court in Rajesh Jain v. Ajay Singh, (2023) 10 SCC 148 , wherein the Hon'ble Court noted in regard the foregoing as under;
"33. The NI Act provides for two presumptions:
Section 118 and Section 139. Section 118 of the Act inter alia directs that it shall be presumed, until the contrary is proved, that every negotiable instrument was made or drawn for consideration. Section 139 of the Act stipulates that "unless the contrary is proved, it shall be presumed, that the holder of the cheque received the cheque, for the discharge of, whole or part of any debt or liability". It will be seen that the "presumed fact" directly relates to one of the crucial ingredients necessary to sustain a conviction under Section 138...
34. Section 139 of the NI Act, which takes the form of a "shall presume" clause is illustrative of a presumption of law. Because Section 139 requires that the Court "shall presume" the fact stated therein, 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. But this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary as is clear from the use of the phrase "unless the contrary is proved"..."
(Emphasis supplied) CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 18 of 46 Digitally signed ABHISHEK by ABHISHEK GOYAL GOYAL Date: 2024.11.28 16:47:13 +0530
13. Strikingly, the Hon'ble Supreme Court in Rangappa v. Sri Mohan, (Supra.), while painstakingly evaluating the intent and purpose behind the introduction of Section 139 under the Statute books/NI Act, observed as under;
"26. In light of these extracts, we are in agreement with the respondent claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat [(2008) 4 SCC 54: (2008) 2 SCC (Cri) 166] may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant.
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."
(Emphasis supplied)
14. Markedly, it is observed from above that the presumption envisioned under Section 139 NI Act not only pertains to the fact that the cheque in question was drawn in discharge of debt or liability, rather, also includes 1 a presumption 1 S. Natarajan v. Sama Dharman, (2021) 6 SCC 413.
CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 19 of 46
ABHISHEK Digitally signed by ABHISHEK
GOYAL
GOYAL Date: 2024.11.28 16:47:17
+0530
that there exists a legally enforceable debt or liability at the time of such drawing. Indisputably1, the burden to rebut the presumption lies on an accused, by establishing probable defence. Needless to further observe here that, though, in order to rebut the statutory presumptions2, "an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial" , however, the law is settled 3 that a bare denial of the passing of the consideration or of existence of debt/liability by an accused, would not serve the purpose or come to the aid/rescue of an accused. In fact, law is well settled that under such circumstances, it is expected from an accused to bring 'something which is probable', on record for getting the burden of proof shifted to the complainant. Reference in this regard is made to the decision in Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513, wherein the Hon'ble Apex Court, explicated the law in regard the foregoing as under;
"20. The accused in a trial under Section 138 of the Act has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case the non- existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not insist in every case that the accused should disprove the 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 1 Rajaram v. Maruthachalam, 2023 SCC OnLine SC 48.2
Rohitbhai Jivanlal Patel v. State of Gujarat, (2019) 18 SCC 106.3
Kishan Rao v. Shankargouda, (2018) 8 SCC 165.
CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 20 of 46 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date: 2024.11.28 16:47:21 +0530
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 exist. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on to the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arising under Sections 118 and 139 of the Act."
(Emphasis supplied)
15. Further, Section 118(a) NI Act provides for a presumption in favour of the complainant1 inter alia to the effect that the negotiable instrument or the endorsement was made or endorsed for consideration. Concomitantly, it is further apposite to make a reference to the presumption visualized under Section 118(e) NI Act at this stage, which pertains to the endorsement appearing upon negotiable instruments, being genuine. Relevantly, it is trite law that the said presumption operates in favour of the holder in due and in case an accused intends to rebut such presumption, he would be required to lead evidence, rather than a mere denial of his signatures on the cheque. Significantly, the Hon'ble Supreme Court in Ajitsinh Chehuji Rathod v. State of Gujarat, (2024) 4 SCC 453 , while assessing the provisions under Section 118(e) NI Act, remarked as under;
"13. Section 118 sub-clause (e) of the NI Act provides a clear presumption regarding indorsements made on the negotiable instrument being in order in 1 Kundan Lal Rallaram v. Custodian, Evacuee Property, 1961 SCC OnLine SC 10.
CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 21 of 46 Digitally signed by ABHISHEK ABHISHEK GOYAL Date: GOYAL 2024.11.28 16:47:27 +0530
which they appear thereupon. Thus, the presumption of the indorsements on the cheque being genuine operates in favour of the holder in due course of the cheque in question which would be the complainant herein. In case, the accused intends to rebut such presumption, he would be required to lead evidence to this effect.
14. Certified copy of a document issued by a bank is itself admissible under the Bankers' Books Evidence Act, 1891 without any formal proof thereof. Hence, in an appropriate case, the certified copy of the specimen signature maintained by the bank can be procured with a request to the court to compare the same with the signature appearing on the cheque by exercising powers under Section 73 of the Evidence Act, 1872."
(Emphasis supplied)
16. Ergo, being cognizant of the aforenoted principles, this Court would now proceed with the evaluation of the rival contentions of the appellant and the respondent. Pertinently, the Ld. Counsel for the appellant has outrightly contended that the particulars of the cheque such as the particulars of the payee, date existing on the cheques in question, etc., were neither filled by the appellant nor the same were in his handwriting. However, in order to appreciate the said contention, this Court deems it apposite to outrightly note that nowhere in his reply dated 13.10.2008 (Ex. CW1/12) to the legal demand notice dated 27.09.2008 (Ex. CW1/8) or anywhere during the trial, the appellant denied his signatures on the cheques in question. In fact, it was merely asserted by the appellant under the said reply that the said cheques were issued by the appellant to respondent no. 2 against the transfer of stock(s), lying at the complainant's/respondent no. 2's shop, which was to be transferred to the appellant by the complainant. Similar assertion was made by the appellant under his statement, recorded in terms of the provisions under Section(s) 281/313 Cr.P.C. Relevant CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 22 of 46 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date: 2024.11.28 16:47:32 +0530 extract(s) of the appellant's said statement, recorded under Section(s) 281/313 Cr.P.C., is reproduced as under;
"Qn. It is evidence against you that complainant is in business sale and supply of fabrics, you were working with the complainant as controller supervisor, used to sell goods of complainant, used to collect payment from customers of the complainant, entered into agreement Ex. CW-1/1 for collection of various amounts, issued 8 cheques amounting to Rs. 7,50,000/- to the complainant, cheques Ex. CW-1/2 & Ex. CW-1/3 being part of them, same returned dishonored vide Ex. CW-1/4 and Ex. CW-1/5, Ex. CW-1/6 and Ex. CW-1/7, legal demand notice Ex. CW-1/8 was sent to you vide postal receipt(s) Ex. CW-1/9, UPC being Ex. CW-1/10, you replied vide Ex. CW-1/11, however, you did not make the payment within 15 days from the date of receipt of the said notice and complainant has given his evidence on said aspects vide his/her affidavit Ex. CW-1. What do you want to say about this? Ans. It is totally false. Cheques were issued for purpose of security since the complainant side was closing its business, I was to be handed over the stock, I had to make payments to the complainant on sale of stock. However, after 7-10 days, one Rohit Kumar was handed over the stock who made payment of Rs. 8,00,000/- to the complainant and said Rohit Kumar was also repaid Rs. 50,000/- to the complainant of security deposit and further said Rohit Kumar took over the business of complainant in totality. The stock was not supplied to me and complainant misused cheque after around 3 years after filling the other particulars since they were given only as blank signed cheques..."
(Emphasis supplied)
17. As aforenoted, under such factual scenario, Ld. Counsel for the appellant has fervently argued that no liability under Section 138 NI Act can be attributed to/attracted against the appellant, especially when (as per the Ld. Counsel) the particulars appearing on the dishonoured cheques were not filled by the appellant. However, the said contention does not find favour with this Court, considering that the law in trite that filling of particulars of cheque by any person, other than the drawer CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 23 of 46 Digitally signed ABHISHEK by ABHISHEK GOYAL GOYAL Date: 2024.11.28 16:47:36 +0530 does not invalidate the cheque and the liability under Section 138 NI Act/presumption under Section 139 NI Act would still be attracted under such situation(s), when the signatures on the cheque in question is duly admitted by the drawer/accused. Reference in this regard is made to decision in Bir Singh v. Mukesh Kumar, (Supra.), wherein the Hon'ble Supreme Court observed as under;
"33. A meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted.
34. If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence.
*** *** ***
36. Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act , in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt."
(Emphasis supplied)
18. Markedly, under the present situation, when both the appellant and respondent no. 2 affirm that the cheques were signed and handed over by the appellant to respondent no. 2, the contention of the Ld. Counsel for the appellant that the cheques in question were not filled in the appellant's handwriting, i.e., the date of cheques and/or the payee's details thereon were not filled by the appellant, albeit only subsequent, would not, in the CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 24 of 46 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2024.11.28 16:47:40 +0530 considered opinion of this Court, come to any aid/rescue of the appellant, in view of the aforenoted judicial dictate(s). Needless to reiterate that the law is well settled that even when a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars and that the same would not, in itself, invalidate the cheque. On the contrary, even under such circumstances, presumption under Section 139 NI Act would be attracted, burden lying on the drawer of cheque to rebut the same as per law/by preponderance of probabilities.
19. Apropos the present discourse, this Court now deems it apposite to deal with the contention of the Ld. Counsel for the appellant pertaining to the alleged non-execution of the agreement dated 01.10.2005 (Ex. CW-1/1) between the appellant and respondent no. 2 herein, as averred by the Ld. Counsel for the appellant. As aforenoted, in this regard, Ld. Counsel for the appellant has strenuously asserted that the said agreement was neither proved by the complainant/CW-1 nor by CW-2/Mr. Tilak Raj Kapoor, despite the fact that the same was denied by the appellant herein. Further, as aforenoted, as per the Ld. Counsel, the said agreement/agreement dated 01.10.2005 (Ex. CW-1/1) is unenforceable for the want of consideration. Ergo, in order to appreciate the said contention, this Court deems it apposite to make reference to the relevant extract(s) from the appellant's cross examination dated 04.01.2019, wherein the appellant inter alia proclaimed as under;
"...It is correct that my photograph is affixed on Ex. CW-1/1 at point A and I had put my signatures on photographs only. Ex CW-1/1 was signed by me on blank stamp paper. I had not made any police complaint regarding taking my signatures on blank stamp paper against complainant because the complainant had assured me that he shall handover CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 25 of 46 Digitally signed ABHISHEK by ABHISHEK GOYAL GOYAL Date: 2024.11.28 16:47:44 +0530 the stock to me and mentioned the detailed of cheques which were given by me against stock without date. It is wrong to suggest that Ex CW-1/1 was prepared on 01.10.2005 and thereafter I had signed the same and the complainant had manipulated the blank stamp paper signed by me. It is wrong to suggest that I had given the eight cheques to the complainant..."
(Emphasis supplied)
20. Markedly, it is noted from above that the appellant, though, confirmed his signatures on the photograph affixed on Ex. CW-1/1 at point A as well as that existing on the said agreement, however, asserted that the said signatures were obtained by respondent no. 2 on blank papers. Significantly, suggestions to the akin effect were also put by/on behalf of the appellant to the complainant/respondent no. 2 during his cross examination on 05.05.2012 and 13.05.2013 inter alia avowing that the appellant's signatures were obtained by the complainant/respondent no. 2 on blank papers at the time of closing of respondent no. 2's shop. However, the said suggestion(s) was explicitly denied by the complainant/respondent no. 2. Here, this Court deems it further pertinent to refer to the testimony of CW-2/Sh. Tilak Raj Kapoor, who deposed before the Ld. Trial Court as under;
"...I do not know anything about this matter since 15 years have already passed.
At this stage, the Ld. Counsel for the complainant has shown original of Ex. CWI/1 and has asked the witness whether same was prepared in his presence and bears his signatures.
The witness deposed that Ex. CWI/1 bears his signatures at the last page of said document as witness to the same, however, he does not remember about said agreement..."
(Emphasis supplied)
21. Strikingly, CW-2/Sh. Tilak Raj Kapoor, who is one of the witnesses to the aforesaid agreement, though, affirmed that CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 26 of 46 Digitally signed ABHISHEK by ABHISHEK GOYAL GOYAL Date: 2024.11.28 16:47:48 +0530 his signatures find presence on the last page of the said agreement, however, also proclaimed that he could not recollect about the said agreement due to lapse of time. Apposite at this stage to further note that during of proceedings before the Ld. Trial Court, the complainant/respondent no. 2, dropped Sh. Lal Chand, i.e., other witness to the said agreement on the account of his old age and ill health, on 25.05.2017. Under such circumstances, it has been contended by the Ld. Counsel for the appellant that the complainant/respondent no. 2 has failed to prove the execution of the agreement in question. However, the said contention does not find favour with this Court. On the contrary, in the considered opinion of this Court, in the facts and circumstances which forthcoming on record, provisions under Sections 69 and 70 of the Indian Evidence Act, 1872 ( hereinafter referred to as the 'Evidence Act'), would come into play, which provide as under;
"69. Proof where no attesting witness found-If no such attesting witness can be found, or if the document purports to have been executed in the United Kingdom, it must be proved that the attestation of one attesting witness at least is in his handwriting, and that the signature of the person executing the documents is in the handwriting of that person.
*** *** ***
71. Proof when attesting witness denies the execution-If the attesting witness denies or does not recollect the execution of the document, its execution may be proved by other evidence."
(Emphasis supplied)
22. Pertinently, it is observed from the scrupulous analysis of the above provisions that Section 71 of the Evidence Act, caters to the situation, akin to one before this Court, where the attesting witness either denies or does not recollect the execution of document, permitting the proof of execution thereof CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 27 of 46 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date: 2024.11.28 16:47:52 +0530 by 'other evidence'. Quite evidently, the underlined objective behind the said provision is to1, "lend assistance and come to the rescue of a party who had done his best, but driven to a state of helplessness and impossibility and cannot be let down without any other opportunity of proving the due execution of the document by other evidence." Needless to further mention, Section 71 of the Evidence Act is in the nature of a safeguard 2 to the mandatory provisions of Section 68 of the Evidence Act, to meet a situation where it is not possible to prove the execution of the document by calling the attesting witnesses, though alive. Consequently, under such a scenario, the party seeking to prove a document may take recourse to the provision under Section 69 of the said enactment, permitting proof of such document by demonstration of the fact that the attestation of one attesting witness, at least in his handwriting, as well as of the signatures of the person executing the documents is in the handwriting of that person. Ergo, mindful of said provisions/principles of law, reverting to the facts of the present case, as aforenoted, the appellant has not denied his signatures on the agreement dated 01.10.2005 (Ex. CW-1/1), rather, merely proclaimed that the same were obtained on blank papers by the complainant/respondent no. 2. Further, CW-2 has proved his signatures on the said agreement, besides respondent no. 2 has positively affirmed that the said agreement was executed between him as well as the appellant. Consequently, under such factual scenario, even presuming that the agreement in question was required to be mandatorily attested, same stands proved, in the considered opinion of this Court in view of the aforesaid facts 1 Jagdish Chand Sharma v. Narain Singh Saini & Ors., MANU/SC/0522/2015.
2Janki Narayan Bhoir v. Narayan Namdeo Kadam, (2003) 2 SCC 91.
CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 28 of 46
Digitally signed
ABHISHEK by ABHISHEK
GOYAL
GOYAL Date: 2024.11.28
16:47:57 +0530
and circumstances as well as judicial dictates/legal provisions, and it does not lie in the appellant's mouth to deny its execution or to assert that the complainant/respondent no. 2 took the appellant's signatures on blank papers, especially when CW-2 remained bereft of cross-examination by/on behalf of the appellant. Needless to reiterate that the present situation would be covered under the provisions under Sections 69/71 of the Evidence Act, besides, the appellant failed to adduce any evidence/witness in his support to corroborate that the agreement dated 01.10.2005 (Ex. CW-1/1) was got signed as blank papers from him/the appellant. In fact, even DW-1/Vishram Saroj feigned ignorance to the said agreement, by inter alia asserting in his cross examination that he was unaware of any compromise/settlement deed between the complainant and accused.
23. Further, in so far as the Ld. Counsel for the appellant's contention pertaining to the agreement dated 01.10.2005 (Ex. CW-1/1) being unenforceable for the want of consideration is concerned, same too, does not find favor with this Court in view of the Explanation 2 under Section 25 of the Indian Contract Act, 1872 (hereinafter referred to as the 'Contract Act'), which inter alia provides as under;
"25. Agreement without consideration, void, unless it is in writing and registered, or is a promise to compensate for something done, or is a promise to pay a debt barred by limitation law- An agreement made without consideration is void, unless--
*** *** *** Explanation 2.-An agreement to which the consent of the promisor is freely given is not void merely because the consideration is inadequate; but the inadequacy of the consideration may be taken into account by the Court in determining the question whether the consent of the promisor was freely given."
(Emphasis supplied) CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 29 of 46 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2024.11.28 16:48:21 +0530
24. Noticeably, in light of the aforesaid provision and being cognizant of the settled law, this Court unambiguously observes that it is no longer res integra that the consideration under a contract must be real and not illusory1, "whether adequate or not, adequacy being a matter purely for the contracting parties to decide and to agree upon. So long as the consideration is not unreal it is sufficient if it be of slight value only." Consequently, when the clauses under the agreement dated 01.10.2005 are conscientiously analyzed in view of the aforesaid provisions, it is unambiguously observed that the said agreement, settles the claims of the complainant/respondent no.
2, including the chit fund liability of the appellant towards the complainant/respondent no. 2 under clause 13 of the said agreement/contract, which in the considered opinion of this Court, is sufficient compliance of provisions under Section 25 of the Contract Act. Here, it is apposite to deal with the contention of the Ld. Counsel for the appellant that the chit fund liability of the firm/Romy Chit Funds Pvt. Ltd. could not have been taken over/subsumed by the complainant/respondent no. 2. However, when the cross examination of the complainant/respondent no. 2 dated 05.05.2012, is scrupulously analyzed, it is observed that the complainant/respondent no. 2, nowhere asserts the chit fund liability of the appellant towards the said firm, rather, the same is proclaimed to be towards the complainant in his individual capacity. Ergo, it becomes apposite to refer to the relevant extract(s) from the complainant's said cross examination as under;
1Kulasekaraperumal v. Pathakutty Thalevanar & Ors., AIR 1961 Mad 405; and Kannamtnal & Ors. v. Vembana Gounder & Ors., MANU/TN/3991/2009.
CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 30 of 46
Digitally signed by
ABHISHEK ABHISHEK GOYAL
GOYAL Date: 2024.11.28
16:48:28 +0530
"...It is wrong to suggest that I had not given a sum of 7,50,000/- to the accused. I do not remember the exact date, when I had given amount of Rs. 7,50,000/-. Vol. It was given in 4/5 installments. I do not remember the date of installments. It is wrong to suggest that as I had not given any money and due to that reason, I do not remember the date of installments. One agreement was executed, which is already on record as Ex. CW1/1.
Ques: It is put to you that how the abovesaid amount i.e., Rs. 7,50,000/- was given to the accused? Ans: Accused was the member of my Chit Fund Company and accused was having a due payment of Rs. 2/2.5 lakhs towards me but the said payment was not given to me. At the time of closing of shop, a sum of Rs. 7,50,000/- had come due qua accused and other amount, which is mentioned in my agreement. Ques: It is put to you that remaining amount of Rs. 5,00,000/- as you are claiming, how you have given this amount to the accused?
Ans: Accused used to get the payment from my parties and did not return to me and at the time of settlement, it was agreed that accused would pay me Rs. 7,50,000/- and besides other payments..."
(Emphasis supplied)
25. Clearly, from the above it is quite lucid that the complainant/respondent no. 2 affirmed that the amount of Rs. 7,50,000/- (Rupees Seven Lakhs Fifty Thousand only) was due and payable by the appellant to the complainant/respondent no. 2 against the amount received by the appellant from the complainant's parties, on behalf of the complainant, however, not remitted to him as well as towards the complainant's dues of Rs. 2/2.5 lakhs against him in his individual capacity. Relevantly, similar acknowledgment of liability of dues to a tune of Rs. 7,50,000/- (Rupees Seven Lakhs Fifty Thousand only) has been made by the appellant under the agreement Ex. CW-1/1, inter alia under the following terms;
"...1. That the second party Shri. Sanjay Dandona had admitted/acknowledged abovesaid amount of Rs. 7,50,000/- (Rs. Seven Lakhs Fifty Thousand) and Rs. 19,15,482/- (Nineteen Lakhs CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 31 of 46 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2024.11.28 16:48:32 +0530 Fifteen Thousand Four Hundred and Eighty Two) totaling amount to Rs. 26,65,482/- (Twenty Six Lakhs Sixty Five Thousand Four Hundred and Eighty Two only).
*** *** ***
9. That the second party Sh. Sanjay Dandona has agreed to issue post dated cheques to discharge his partly liability of Rs. 7,50,000/- (Rs. Seven Lakhs Fifty Thousand only) in favour of the first party Sh.
Sudhir Vij as per details given below;
S. Cheque Date Amount Drawn on
No. No.
1. 418801 10.06.08 Rs. Andhra
1,00,000/- Bank,
Chandni
Chowk,
Delhi-6.
2. 418802 20.06.08 Rs. Andhra
1,00,000/- Bank,
Chandni
Chowk,
Delhi-6.
3. 418803 30.06.08 -do- -do-
4. 418804 10.07.08 -do- -do-
5. 418805 20.07.08 -do- -do-
6. 418806 30.07.08 -do- -do-
7. 418808 20.08.08 -do- -do-
8. 418807 10.08.08 Rs50,000/- -do-
Total Rs. 7,50,000/-
(Rupees Seven lakhs fifty thousand only) All the cheques were drawn on Andhra Bank, Chandni Chowk, Delhi-6, issued by Second Party Sh. Sanjay Dandona..."
(Emphasis supplied)
26. Conspicuously, from a conjoint reading of the aforesaid agreement as well as deposition (including the cross examination) of the complainant/respondent no. 2 before the Ld. Trial Court, it is observed that the complainant has proved the liability/debt, owed by the appellant towards him against which the cheques in question were issued by the appellant to respondent no. 2. Here, it is further pertinent to note that the appellant, in order to belie the agreement in question has further contended that the cheques in question are dated three years CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 32 of 46 Digitally signed by ABHISHEK ABHISHEK GOYAL Date: GOYAL 2024.11.28 16:48:36 +0530 subsequent thereto and that the particulars of the said cheques have been entered under the agreement in hand by the complainant/respondent no. 2. However, in order to deal with the said contention, this Court deems it apposite to reproduce the relevant extract from the complainant's/respondent no. 2's cross examination dated 13.05.2013, wherein it is inter alia noted as under;
"...Since the accused had undertaken first during our talks that he would be making the payment in cash but on my persistence, he entered the dates on the said cheques and thus the dates were mentioned later on in hand in Ex. CW 1/1 at the time of the agreement. The agreement was typed on the date as mentioned on the same. My advocate brought the typed agreement on the same day on which it was executed, but dates were filled up later on in hand and there is no specific reason for mentioning the dates in hand. I had gone in person to fetch the stamp paper but I do not remember the exact date. It may be either the same day or one may be one or two days before. It is wrong to suggest that the accused is not liable to pay any money as per the agreement Ex. CW 1/1 or that there is no liability to make any payment to me. The cheque was presented by in the year 2008..."
(Emphasis supplied)
27. Correspondingly, in his cross examination dated 12.09.2014, the complainant/respondent no. 2 further asserted as under;
"...The reason for accepting the cheques after three years of the agreement Ex. CW1/1 as is that the accused assured me to make the payments in cash on time to time in the meanwhile itself. There was no written letter issued to the accused for not making payments in cash in the meanwhile as orally promised by him. It is wrong to suggest that cheques in question were received by me from the accused towards supply of stock of the shop which were not supplied. It is further wrong to suggest that I presented the cheques in question despite not supplying the stock to the accused..."
(Emphasis supplied) CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 33 of 46 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date: 2024.11.28 16:48:40 +0530
28. Markedly, from a reading of the above extracts from the complainant's cross examination, it is quite explicit that the complainant/respondent no. 2 unambiguously proclaimed that the appellant had initially undertaken to make the due payment to the complainant in cash, however, on respondent no. 2's persistence, the appellant entered the dates on cheques which were later mentioned in hand in the agreement. Further, even in his subsequent cross examination, the complainant iterated that the reason for accepting the cheques after three years of the agreement was that the appellant has initially assured payments to the complainant on cash. Pertinent to reiterate that the execution of the said agreement has been proved from the conjoint reading of testimonies of CW-1 and CW-2, as well as in light of the judicial precedents hereinunder noted. Needless to mention that the appellant, despite being afforded an opportunity to cross examine CW-2/Shri. Tilak Raj Kapoor, deliberately and willfully opted not to cross examine him. Further, strikingly, the appellant made no endeavor to produce any witness in support of his contention that the complainant/respondent no. 2 had obtained blank signed papers from him/the appellant, which were subsequently, (allegedly) wrongfully/maliciously misused and manipulated by respondent no. 2. Here, it is also apposite to note that the appellant admittedly made no complaint against the complainant/respondent no. 2, regarding taking of his/appellant's signatures on blank stamp paper by the complainant, as affirmed by the appellant in his cross examination dated 04.01.2019, reproduced hereinabove. Pertinent to further note at this stage that the cheques in question were dishonoured for the reason of insufficiency of funds, in contrast to the reasons such as; 'differences in signatures/fake signatures' or 'stop payment', etc., CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 34 of 46 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date: 2024.11.28 16:48:45 +0530 clearly, demonstrating that the appellant made no endeavor to even direct and/or the concerned authorities regarding such blank signed cheques, allegedly, remaining in the possession of the complainant/respondent no. 2 and which were allegedly not returned by the complainant/respondent no. 2 to the appellant, despite falling of the 'so called' deal. Inevitably, this Court is in concurrence with the finding of the Ld. Trial Court that the reasons for the appellant not even demanding/seeking return of the cheques and 'so called' blank papers from the complainant/respondent no. 2 upon the failure of the complainant to abide by the alleged undertaking to sell of the stocks and upon their consequent sale to one Mr. Rohit Kumar, is also not comprehensible to this Court.
29. Undoubtedly, the appellant, besides tendering his statement in support of his case also produced one, Shri. Vishram Saroj as DW-1, who inter alia asserted, "...it was decided between the complainant and accused that accused would take the material/stock lying in the shop of complainant..." , however, it was explicitly declared by DW-1 that he was not aware as to, "...for how much amount the deal was struck..." Markedly, it is observed from a conscientious perusal of the deposition of DW-1 that except for assertion by the said witness that it was decided/agreed between the appellant and complainant/respondent no. 2 that the appellant would take the material/stock, lying in the complainant's shop, however, gave no particular of the date, time or place when such agreement was made or whether he was present at the time of such 'so called' agreement. Needless to mention that as per DW-1, he was not even aware of the amount for which the said so called deal was stuck. Correspondingly, it is nowhere asserted in DW-1's CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 35 of 46 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date: 2024.11.28 16:48:48 +0530 deposition that the cheques in question were, in fact, issued by the appellant to the complainant/respondent no. 2 against the said 'so called' deal or agreement or the date, time or place where such cheques were issued by DW-1 to the appellant. Quite understandably, under such circumstances, it does not appeal to senses of this Court as to how the deposition of DW-1 would come to the aid or rescue of the appellant in the instant case.
30. Noticeably, the appellant has further asserted that he owed no liability towards the complainant against chit fund and that he was not even aware whether the complainant was running a Chit Fund company in the name of M/s. Romy Chit Funds Pvt. Ltd., as also affirmed in his/appellant's cross examination dated 04.01.2019. However, in this regard, as aforenoted, the complainant as fervently asserted in his cross examination that the chit fund liability was personally owed by the appellant towards the complainant, which is also specified under the agreement in question. Further, in so far as the appellant's unawareness of the complainant's running the chit fund in the name of M/s. Romy Chit Funds Pvt. Ltd. is belied from his cross examination dated 02.02.2019, wherein the appellant inter alia affirmed as under;
"...Q. Whether the cheques were issued towards payment of M/s Romy Chit Fund Pvt. Ltd.? Ans. No. I did not issue the cheques to M/s Romy Chit Fund Pvt. Ltd. The same was handed over to one Arjun Gulati as blank signed cheque towards rent as I had taken a shop on rent from him. No particulars were filled by me (the Ld. Counsel for accused objects to the cheques being placed on record in evidence as the cheques have not been issued to M/s Romy Chit Fund Pvt. Ltd. and the same are relevant. The same will be decided at the stage of final decision of the case). The said cheques are Ex. DW-2/1 (colly) (ten cheques). Q. Whether the cheques bear your signatures? Ans. The cheques bear my signatures.
CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 36 of 46
Digitally signed
ABHISHEK by ABHISHEK
GOYAL
GOYAL Date: 2024.11.28
16:48:52 +0530
I cannot produce the rent agreement of shop. However, I can produce Mr. Arjun Gulati as witness for the same I was not the member of Chit Fund bearing chit no. 98/04, 98/05, 97/08 & 97/09. It is wrong to suggest that I had issued the cheques Ex. DW-2/1 to M/s. Romy Chit Fund Pvt. Ltd. I had not made any complaint to police and not given any letter regarding aforesaid cheques as I had given the cheques to Mr. Arjun Gulati and those cheques has not been presented by him..."
(Emphasis supplied)
31. Quite evidently, it is observed from above that the avowal of the appellant regarding his awareness or dealing with M/s. Romy Chit Funds Pvt. Ltd. stands contradicted from the aforesaid cross examination of the appellant, wherein the appellant whilst being confronted with the cheques issued in the name of M/s. Romy Chit Funds Pvt. Ltd. affirmed his signatures on the said cheques. Undoubtedly, it was proclaimed by the appellant that the said cheques were issued by him to one Mr. Arjun Gulati against rent(al) of the premise taken over the appellant from Mr. Gulati. However, the appellant neither produced Mr. Arjun Gulati as a witness before the Ld. Trial Court nor produced the said rent agreement in support of the said contention, despite being afforded ample opportunity by the Ld. Trial Court. Accordingly, in this regard, this Court is in concurrence with the finding of the Ld. Trial Court that the appellant had no knowledge of chit fund or of the complainant's running M/s. Romy Chit Funds Pvt. Ltd. or of even the appellant's owing liability towards the complainant to a tune of Rs. 2/2.5 lakhs towards the complainant as against chit fund claims. Needless to reiterate that the complainant, nowhere in his cross examination dated 05.05.2012 declared that the chit fund liability of the appellant was towards the said firm/M/s. Romy Chit Funds Pvt. Ltd., rather, the same is proclaimed by the CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 37 of 46 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2024.11.28 16:48:58 +0530 complainant/respondent no. 2 to be towards him/the complainant in his individual capacity. This Court is further in concurrence with the finding of the Ld. Trial Court that the admission of signatures of the appellant on the DW2/P1 (colly.) and DW2/P2, being quotations and purchase orders of the complainant with other customers, lends credence to the complainant's assertion that the appellant was responsible for sale and purchase of material on behalf of the appellant. Correspondingly, in the same light, the clause under the agreement in question, pertaining to the appellant's obligation to tender the entire collected dues also finds support, in the considered opinion of this Court. Germane at this stage to reproduce the relevant extracts from the appellant's cross examination dated 04.01.2019, in this regard, as under;
"...At this stage, six letter heads of M/s. Kanta Traders has produced to the witness had signed at point A or not. Witness answered that yes it has been signed by me at point. A. The documents are exhibited as DW2/P1 (colly).
At this stage, one letter heads of Bhushan Steel & Strips Ltd has produced to the witness had signed at point A or not. Witness answered that yes it has been signed by me at point A. The documents are exhibited as DW2/P2.
I had only signed all the aforesaid documents and I had not put the rubber stamp of either proprietor or partner and the rubber stamp was put by someone after my signatures, it is wrong to suggest that I had prepared all six letterheads. The documents are being quotations to various companies to procure orders. The complainant had authorized me to sign only quotations as proprietor/partner on his behalf. It was oral. It is wrong to suggest that I was not authorized by the complainant and signed the aforesaid documents by own..."
(Emphasis supplied)
32. In as much as the contention of the Ld. Counsel for the appellant pertaining to the cheques in question being not CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 38 of 46 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date: 2024.11.28 16:49:02 +0530 presented for encashment by the complainant/respondent no. 2 within their period of validity is concerned, this Court deems apposite to refer to the decision of the Hon'ble Apex Court in Anil Kumar Sawhney v. Gulshan Rai, MANU/SC/0578/1993, wherein the Hon'ble Court remarked in similar context as under;
"12. Sections 5 and 6 of the Act define "Bill of Exchange" and "Cheque". A "Bill of Exchange" is a negotiable instrument in writing containing an instruction to a third party to pay a stated sum of money at a designated future date or on demand. A "cheque" on the other hand is a bill of exchange drawn on a bank by the holder of an account payable on demand. Thus a "cheque" under Section 6 of the Act is also a bill of exchange but it is drawn on a banker and is payable on demand. It is thus obvious that a bill of exchange even through drawn on a banker, if it is not payable on demand, it is not a cheque. A "post-dated cheque" is only a bill of exchange when it is written or drawn, it becomes a "cheque" when it is payable on demand . The post- dated cheque is not payable till the date which is shown on the face of the said document. It will only become cheque on the date shown on it and prior to that it remains a bill of exchange under Section 5 of the Act. As a bill of exchange a post-dated cheque remains negotiable but it will not become a "cheque"
till the date when it becomes "payable on demand".
13. It is clear from Section 19 that a "cheque" is an instrument which is payable on demand. A post- dated cheque, which is not payable on demand till a particular date, is not a cheque in the eyes of law till the date it becomes payable on demand.
14. An offence to be made out under the substantive provisions of Section 138 of the Act it is mandatory that the cheque is 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. It is the cheque-drawn which has to be presented to the bank within the periods specified therein. When a post-dated cheque is written or drawn it is only a bill of exchange and as such the provisions of Section 138(a) are not applicable to the said instrument. The post-dated cheque becomes a cheque under the Act of the date which is written on the said cheque and the six months period has to be reckoned for the purposes of Section 138(a) from the said date. One of the main ingredients of the offence under Section 138 of the CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 39 of 46 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date: 2024.11.28 16:49:06 +0530 Act is, the return of the cheque by the bank unpaid. Till the time the cheque is returned by the bank unpaid, no offence under Section 138 is made out. A post-dated cheque cannot be presented before the bank and as such the question of its return would not arise. It is only when the post-dated cheque becomes a "cheque", with effect from the date shown on the face of the said cheque, the provisions of Section 138 come into play. The net result is that a post-dated cheque remains a bill of exchange till the date written on it. With effect from the date shown on the face of the said cheque it becomes a "cheque" under the Act and the provisions of Section 138(a) would squarely be attracted. In the present case the post-dated cheques were drawn in March 1990 but they became "cheques" in the year 1991 on the dates shown therein. The period of six months, therefore, has to be reckoned from the dates mentioned on the face of the cheques."
(Emphasis supplied)
33. Unmistakably, it is observed from above that in the cases of cheques being issued, 'post-dated'/as post-dated cheques, law is settled that the period of validity of such cheques is to be reckoned from the date specified on the said cheques as the post-dated cheques continue to remain bills of exchange toll the date written on them and are converted to cheques only on the date specified therein. Accordingly, the contention of the Ld. Counsel for the appellant that whilst the agreement is stated to be executed in 2005 and the cheques are of the year 2008, the validity period of the cheques have since expired, too, does not find favour with this Court in view of the aforenoted discussion as well as settled judicial precedents. Lastly, in so far as the contention of Ld. Counsel for the appellant pertaining to alleged discrepancy/omission/improvement in the version of witnesses of the complainant, i.e., CW-1 and CW-2 is concerned, this Court unambiguously observes that nothing material/no material omissions and/or lapses have brought to the attention of this Court to belie the testimonies of the said witnesses. Needless to CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 40 of 46 Digitally signed ABHISHEK by ABHISHEK GOYAL GOYAL Date: 2024.11.28 16:49:10 +0530 mention that the law is trite law 1 that the discrepancies, which do not shake the basic version of the prosecution and those which emanate due to normal errors of perception or observation should not be given importance and must necessarily be discarded. The rationale behind the same is quite obvious, as elucidated by the Hon'ble Supreme Court in State of U.P. v. Naresh, (2011) 4 SCC 324, inter alia recording as under;
"30. In all criminal cases, normal discrepancies are bound to occur in the depositions of witnesses due to normal errors of observation, namely, errors of memory due to lapse of time or due to mental disposition such as shock and horror at the time of occurrence. Where the omissions amount to a contradiction, creating a serious doubt about the truthfulness of the witness and other witnesses also make material improvement while deposing in the court, such evidence cannot be safe to rely upon. However, minor contradictions, inconsistencies, embellishments or improvements on trivial matters which do not affect the core of the prosecution case, should not be made a ground on which the evidence can be rejected in its entirety. The court has to form its opinion about the credibility of the witness and record a finding as to whether his deposition inspires confidence.
*** *** *** Therefore, mere marginal variations in the statements of a witness cannot be dubbed as improvements as the same may be elaborations of the statement made by the witness earlier. The omissions which amount to contradictions in material particulars i.e. go to the root of the case/materially affect the trial or core of the prosecution's case, render the testimony of the witness liable to be discredited..."
(Emphasis supplied)
34. Conclusively, in conspectus of the above and inter alia keeping in view consistent testimony of complainant/respondent no. 2/CW-1 and CW-2/Mr. Tilak Raj Kapoor as well as the documents placed on record, the only conclusion which can be arrived at in the facts and circumstances 1 Appabhai v. State of Gujarat, 1988 Supp SCC 241.
CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 41 of 46
Digitally signed
ABHISHEK by ABHISHEK
GOYAL
GOYAL Date: 2024.11.28
16:49:19 +0530
brought forth pertains to the guilt of the appellant for the commission of the offence under Section 138 NI Act. Needless to mention that the defence raised by the appellant is not only unworthy and uninspiring confidence, rather, irreconcilable as well as unworthy of credence. Accordingly, this Court has no hesitation in reasonably reaching a conclusion that the complainant has proved its case 'beyond reasonable doubt' against the appellant for the offence under Section 138 NI Act. On the contrary, the appellant has failed to raise a probable defence/defence by 'preponderance of probabilities' in his favour for the reasons hereinunder noted.
35. Significantly, in as much as the aspect of sentence awarded to the appellant by the Ld. Trial Court is concerned, this Court, at the outset, notes that the superior courts have persistently cautioned towards the grant of just and appropriate sentence, post-conviction, as well as cautioned 1 that mere long pendency of case is no ground to award lesser sentence. In fact, in the instances of cheque dishonour cases, law is settled 2 that the sentence imposed must be such as to give proper effect to the object of the legislation and to dissuade unscrupulous drawers of such negotiable instruments from taking advantage of their own wrongs. In this regard, reference is made to the decision in Suganthi Suresh Kumar v. Jagdeeshan, (2002) 2 SCC 420, wherein the Hon'ble Apex Court unswervingly opined as under;
"12. The total amount covered by the cheques involved in the present two cases was Rs 4,50,000. There is no case for the respondent that the said amount had been paid either during the pendency of the cases before the trial court or revision before the High Court or this Court. If the amounts had been paid to the complainant there perhaps would have 1 State of M.P. v. Ghanshyam Singh, (2003) 8 SCC 13.2
H. Pukhraj v. D. Parasmal, (2015) 17 SCC 368.
CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 42 of 46
Digitally signed by
ABHISHEK ABHISHEK GOYAL
GOYAL Date: 2024.11.28
16:49:23 +0530
been justification for imposing a flea-bite sentence as had been chosen by the trial court. But in a case where the amount covered by the cheque remained unpaid it should be the lookout of the trial Magistrates that the sentence for the offence under Section 138 should be of such a nature as to give proper effect to the object of the legislation. No drawer of the cheque can be allowed to take dishonour of the cheque issued by him light- heartedly. The very object of enactment of provisions like Section 138 of the Act would stand defeated if the sentence is of the nature passed by the trial Magistrate. It is a different matter if the accused paid the amount at least during the pendency of the case."
(Emphasis supplied)
36. Correspondingly, the Hon'ble Supreme Court in R. Vijayan v. Baby, (2012) 1 SCC 260 , while fervently professing towards the grant of reimbursement of the loss by way of compensation to the complainant/victim in cheque dishonour cases, avowed as under;
"17. The apparent intention is to ensure that not only the offender is punished, but also ensure that the complainant invariably receives the amount of the cheque by way of compensation under Section 357(1)(b) of the Code. Though a complaint under Section 138 of the Act is in regard to criminal liability for the offence of dishonouring the cheque and not for the recovery of the cheque amount (which strictly speaking, has to be enforced by a civil suit), in practice once the criminal complaint is lodged under Section 138 of the Act, a civil suit is seldom filed to recover the amount of the cheque.
This is because of the provision enabling the court to levy a fine linked to the cheque amount and the usual direction in such cases is for payment as compensation, the cheque amount, as loss incurred by the complainant on account of dishonour of cheque, under Section 357(1)(b) of the Code and the provision for compounding the offences under Section 138 of the Act. Most of the cases (except those where liability is denied) get compounded at one stage or the other by payment of the cheque amount with or without interest. Even where the offence is not compounded, the courts tend to direct payment of compensation equal to the cheque amount (or even something more towards interest) by levying a fine commensurate with the cheque CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 43 of 46 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date: 2024.11.28 16:49:27 +0530 amount. A stage has reached when most of the complainants, in particular the financing institutions (particularly private financiers) view the proceedings under Section 138 of the Act, as a proceeding for the recovery of the cheque amount, the punishment of the drawer of the cheque for the offence of dishonour, becoming secondary.
18. Having reached that stage, if some Magistrates go by the traditional view that the criminal proceedings are for imposing punishment on the accused, either imprisonment or fine or both, and there is no need to compensate the complainant, particularly if the complainant is not a "victim" in the real sense, but is a well-to-do financier or financing institution, difficulties and complications arise. In those cases where the discretion to direct payment of compensation is not exercised, it causes considerable difficulty to the complainant, as invariably, by the time the criminal case is decided, the limitation for filing civil cases would have expired. As the provisions of Chapter XVII of the Act strongly lean towards grant of reimbursement of the loss by way of compensation, the courts should, unless there are special circumstances, in all cases of conviction, uniformly exercise the power to levy fine up to twice the cheque amount (keeping in view the cheque amount and the simple interest thereon at 9% per annum as the reasonable quantum of loss) and direct payment of such amount as compensation. Direction to pay compensation by way of restitution in regard to the loss on account of dishonour of the cheque should be practical and realistic, which would mean not only the payment of the cheque amount but interest thereon at a reasonable rate. Uniformity and consistency in deciding similar cases by different courts, not only increase the credibility of cheque as a negotiable instrument, but also the credibility of courts of justice."
(Emphasis supplied)
37. Ergo, wary of the aforenoted judicial dictates, facts and circumstances of the present case as well as the arguments addressed by the Ld. Counsel for the appellant as well as the complainant/respondent no. 2, this Court unswervingly observes that the Ld. Trial Court has acted quite leniently with the appellant by awarding sentence/simple imprisonment for a period of 02 (two) months along with fine of Rs. 2,50,000/- (Rupees CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 44 of 46 Digitally signed ABHISHEK by ABHISHEK GOYAL GOYAL Date: 2024.11.28 16:49:31 +0530 Two Lakhs and Fifty Thousand only), the said amount to be paid to the complainant as compensation, and in default of payment of fine, the appellant, being directed to undergo simple imprisonment for a further period of 01 (one) month, under the impugned order/order of sentence dated 04.10.2019. Needless to mention that in the instant case, substantial time has lapsed since the initiation of the complaint proceedings by the respondent in the year, 2008, culminating in its adjudication in the present appeal, the complainant/respondent no. 2, being embroiled in litigation for dishonoured cheques, during the interregnum. Needless to further mention that the appellant has failed to demonstrate any mitigating factor, convincing this Court to grant any relaxation in favour of the appellant. Clearly, under such circumstances, this Court is of the considered opinion that no interference in the quantum of sentence awarded by Ld. Trial Court is warranted by this Court, while determining the present appeal, as the sentence awarded to the appellant by the Ld. Trial Court not only corresponds with the crime involved, rather, falls in tandem with the resolute declarations of the superior courts, as hereinunder noted.
38. Conclusively, in view of the above discussion, the present appeal deserves to be rejected/dismissed and is hereby dismissed. The judgment dated 23.09.2019, passed by the learned Metropolitan Magistrate-05/Ld. MM-05 (NI Act), Central, Tis Hazari Courts, Delhi in complaint case, bearing "Sudhir Vij v. Sanjay Dandona, CC No. 3373/2017", convicting the appellant for the offence under Section 138 NI Act and the consequent order of sentence dated 04.10.2019, awarding the appellant; simple imprisonment for a period of 02 (two) months along with fine of Rs. 2,50,000/- (Rupees Two Lakhs and Fifty Thousand CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 45 of 46 Digitally signed ABHISHEK by ABHISHEK GOYAL GOYAL Date: 2024.11.28 16:49:35 +0530 only), the said amount to be paid to the complainant as compensation, and in default of payment of fine, the appellant, being directed to undergo simple imprisonment for a further period of 01 (one) month, are hereby upheld. Appellant is directed to surrender before the Ld. Trial Court within a period of 10 (ten) days from today for serving the sentence/remainder period thereof.
39. Trial Court Record be sent back along with a copy of this order/judgment, with direction to proceed against the appellant as per law. Copy of this order/judgment be also given dasti to the appellant.
40. Appeal file be consigned to record room after due compliance.
Digitally
signed by
ABHISHEK
ABHISHEK GOYAL
GOYAL Date:
2024.11.28
16:49:40
+0530
Announced in the open Court (Abhishek Goyal)
on 28.11.2024. ASJ-03, Central District, Tis Hazari Courts, Delhi CA No. 435/2019 Sanjay Dhandhona v. State & Anr. Page No. 46 of 46