07/09/2021
IN THE COURT OF SH. RINKU JAIN, METROPOLITAN MAGISTRATE
NI Act-02, WEST DISTRICT, TIS HAZARI COURTS, DELHI
CC NO: 3097-16
U/s 138 NI Act
In the matter of:
Manmeet Singh
S/o Sh. Tajinder Singh
R/o WZ-62, Sant Nagar,
Tilak Nagar, New Delhi-18 ..... Complainant
V.
Gaurav Khurana
S/o Sh. Prakash Khurana,
R/o Plot No. 75, Sham Nagar Ext,
New Delhi-18. ..... Accused
DATE OF INSTITUTION : 01.10.2014
DATE WHEN RESERVED : 14.02.2020
DATE OF JUDGMENT : 17.09.2020
DECISION : ACQUITTED
BRIEF STATEMENT OF FACTS FOR THE DECISION:-
1. Shorn off unnecessary details, the case of the complainant as narrated
in the complaint is that accused was well known to him. In the month of April
2013, accused requested the complainant for a friendly loan of Rs. 6.5 lacs for
personal bona fide requirement for a period of four months. Complainant, in the first week of April 2013, advanced a friendly loan of Rs. 6.5 lacs to the
accused in cash. Accused in discharge of his legal liability issued a cheque
bearing number 118016 dated 23.07.2013 drawn on Axis Bank Ltd., Green
Park Branch for a sum of Rs. 6.5 lacs i.e. Ex CW1/1 (hereinafter referred to as
cheque in question). Upon presentation the cheque in question got dishonored
vide returning memo dated 25.07.2013 ExCW1/2 with remarks "Funds
Insufficient". Complainant informed the accused about same but accused
refused to make the payment. This constrained the complainant to send a legal
demand notice dated 02.08.13 Ex.CW1/3. No heed was paid by accused to the
said legal demand notice and resultantly the present complaint was filed.
2. Pre-summoning evidence was led, cognizance of the offence u/s
138 NI Act was taken and summons were issued against the accused. The
accused entered appearance, copy of complaint as well as of documents were
supplied to him. Subsequent to that notice u/s 251 Cr.P.C for offence u/s. 138
N.I. Act was served to which accused pleaded not guilty and claimed trial. In
his plea of defence, recorded on 05.01.2016 accused admitted his signatures
on cheque in question. His defence was that the cheque in question was given
as security to one Satish Ahuja on behalf of his brother Gagan Khurana for a
loan of Rs. 2 lacs taken in the year 2010. He did not know the complainant.
He denied taking of any loan from the complainant. He also denied receipt of
legal demand notice. Thus, complainant led evidence to prove his case.
Evidence of the complainant
3. Complainant examined only himself as CW1. He reiterated the
facts of his complaint in his evidence affidavit. He relied upon documents Ex.CW1/1 to Ex.CW1/7. He was duly cross-examined by the Ld. Counsel for
accused.
4. In his cross-examination, he deposed that he was into
construction business in the year 2013 and used to earn about Rs. 60,000/- to
Rs. 70,000/- per month. He met the accused in the year 2012 through one
Satish Ahuja. He could not tell any personal or family detail of the accused.
No one else was present at that time. No document was executed at the time
of loan. Cheque in question was given to him in July 2013 and he filled up the
particulars in the same on instructions of the accused. The source of loan was
proceeds of construction of a building. He brought his passbook Ex. CW1/D1
(OSR) which reflected payment of three different EMI's pertaining to loans
upon a scooty, home appliance and another loan. He had no record regarding
his construction business nor had any bank account or registration with any of
the various taxation departments regarding his construction firm. He had no
record regarding construction of buildings or regarding receipt of Rs. 6.5 lacs
for construction of any building. He further deposed that no one else was
present at the time of advancement of loan or at the time when cheque in
question was issued by the accused.
Defence of the accused
5. The version of facts as discernible from the cross-examination of
the complainant, statement of accused u/s 313 Cr.P.C and defence evidence is
that cheque in question was given to one Satish Ahuja as security on behalf of In his defence, accused examined HC Manjeet, PS Tilak Nagar
as DW-1 who brought DD register dated 29.12.2015 Ex. DW1/A (OSR)
pertaining to a complaint filed by the accused. The record did not mention the
name of the person against whom the complaint was filed.
7. Accused also examined Sh. Ved Pal from SBI Chaukhandi, i.e.
the bank of the complainant as DW-2. He brought bank statement of
complainant Ex. DW2/A (colly) and certificate u/s 65B of Indian Evidence
Act Ex. DW2/B.
8. The factual position being thus, the legal bench mark which is to
be satisfied in order to constitute an offence u/s 138 N. I. Act:
(a) That the accused issued cheque in favour of the payee/complainant
on an account maintained by him to discharge legal liability in whole or
in part.
(b) That the cheque was presented within stipulated time by the
complainant for encashment.
(c) That the cheque was dishonoured on presentation because of 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.
(d) That the demand for the payment of the said amount of money is
made by giving a legal demand notice within 30 days from the receipt
of information from the bank regarding the return of the unpaid cheque.
(e) That the accused fails to make payment of the cheque amount to
complainant within 15 days, after receiving of the legal demand notice. Being cumulative, a person who had drawn the cheque is deemed
to have committed an offence u/s 138 N. I. Act when all the aforementioned
ingredients are satisfied.
10. That Ld. Counsel for complainant argued the matter at length.
Ld. defence counsel also argued the matter in rebuttal. I have heard the
submissions of both parties and gone through the judicial file.
11. On analysis of the facts and legal position stated above, the Court
finds the parties to be at variance on two of the primary issues i.e. whether
legal demand notice was served upon the accused and whether the cheque in
question was issued in favour of the complainant in order to discharge the
legal liability of the accused of repayment of loan of Rs. 6.5 lac.
Service of legal demand notice
12. The first defence of the accused is non service of legal notice. It
is contended on behalf of the accused that the accused did not receive the
legal demand notice & the same was deliberately sent by complainant on
wrong address and therefore the ingredients of the offence under Section 138
NI Act are not fulfilled and this would inexorably result in the acquittal of
accused. However, this claim of the accused for acquittal is not sustainable in
the eyes of law.
13. In view of the authoritative Judgment of Hon'ble Supreme Court
in C.C. Alavi Haji v. Palapetty Muhadmmed and Ors. (2007) 6 SCC 555, the
rigour of the requirement of service of legal notice has been reduced to almost a vanishing point in Section 138 NI Act jurisprudence. The Hon'ble Supreme
Court while discussing the true intent behind the service of legal demand
notice as a precursor to the launch of prosecution has quite categorically held
that the service of summons of the court is opportunity enough for the accused
to pay the cheque amount and evade prosecution, any accused who fails to
pay the amount within 15 days of the service of summons, clearly cannot
shield himself behind the technical demand of non service of legal notice. The
relevant extract of the decision deserves to be quoted in extenso:-
''17. It is also to be borne in mind that the requirement of giving of notice is a
clear departure from the rule of criminal law, where there is no stipulation of
giving of a notice before filing a complaint. Any drawer who claims that he
did not receive the notice sent by post, can, within 15 days of receipt of
summons from the court in respect of the complaint under Section 138 of Act,
make payment of the cheque amount and submits to the court that he had
made payment within 15 days of receipt of summons (by receiving a copy of
complaint with the summons) and, therefore, the complaint is liable to be
rejected. A person who does not pay within 15 days of receipt of the summons
from the court along with the copy of the complaint under Section 138 of the
Act, cannot obviously contend that there was no proper service of notice as
required under Section 138, by ignoring statutory presumption to the contrary
under Section 27 of the G.C.Act and Section 114 of the Evidence Act. In our
view, any other interpretation of the proviso, would defeat the very object of
the legislation''.
14. Admittedly, the accused has failed to pay the cheque amount
within a period of 15 days from the date of service of summons of his
appearance before this court. Therefore, in view of the above stated Judgment passed by Hon'ble Apex Court, the fact of non service of legal demand notice
will not come to aid the accused and therefore, the accused cannot claim
acquittal on this ground.
15. The non service of legal notice challenge having been met, let us
now turn to the core issue in this case and examine "whether the cheque in
question can be said to have been issued in discharge of legal liability or not''.
Existence of legally enforceable debt or liability
16. It has been admitted by the accused that the cheque in question
was drawn by him upon the bank account maintained in his name and having
signed the same. Once these foundational facts are admitted and a factual
base is established, presumption of cheque having been issued in discharge of
legally recoverable debt and drawn for lawful consideration arises by virtue of
Section 118 (a) and Section 139 of N. I. Act. It is a mandatory presumption
though the accused is entitled to rebut the said presumption. In a catena of
judgements, it has been laid down by the Hon'ble Supreme Court that such
presumption in favour of the complainant cannot be rebutted by a mere
plausible explanation but more than a plausible explanation is required.
17. In Rangappa Vs Sri Mohan (2010)11 SCC 441, it was observed
that Section 139 of N.I. Act is stated to be an example of a reverse onus clause
which is in tune with the legislator intend of improving the credibility of
negotiable instruments. Section 138 of N. I. Act provides for speedy remedy
in a criminal forum, in relation to dishonour of cheques. In case of Kumar Exports vs. Sharma Carpets,(2009) 2 SCC 513,
the Hon'ble Supreme Court had held:-
'The accused under Section 138 NI Act has two options. He can either show
that the consideration and debt did not exit or that under the particular
circumstances of the case, the non existence of consideration and debt is so
probable that a prudent man ought to suppose that no consideration and debt
existed. To rebut the statutory presumption, an accused is not expected to
prove his defence beyond reasonable doubt as it is expected of the
complainant in a criminal trial. The accused may adduce direct evidence to
prove that the note in question was not supported by consideration and that
there was no debt or liability to be discharged by him. However, the court
need not insist in every case that the accused should disprove the non
existence of consideration and debt by leading direct evidence because the
existence of negative evidence is neither possible nor contemplated. At the
same time, it is clear that bare denial of the passing of the consideration and
existence of debt, apparently would not serve the purpose of the accused.
Something which his probable has to be brought on record for getting the
burden of proof shifted to the complainant. To disprove the presumptions, the
accused should bring on record such facts and circumstances, upon
consideration of which, the court may either believe that the consideration
and debt did not exist or there non existence was so probably that a prudent
man under the circumstances of the case, act upon the plea that they did not
exist. Apart from adducing direct evidence to prove that the note in question,
was not supported by consideration or that he had not incurred any debt or
liability, the accused may also rely upon the circumstantial evidence and if the
circumstances so relied upon are so compelling, the burden may likewise shift
again on the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut
the presumptions arises under Section 118 and 139 of NI Act''.
19. According to the scheme of N. I. Act, on proof of foundational
facts, a presumption arises as to the cheque having been issued in discharge of
the legal liability and the burden is on the accused to rebut the said
presumption. This clearly is an instance of the rule of “reverse onus” in
action where it is incumbent on the accused to lead what can be called as
“negative evidence”. The evidence of a character, not to prove a fact
affirmative, but to lead evidence to show non-existence of a liability. Keeping
in view, this is a departure from the cardinal rule of “presumption of
innocence” in favour of the accused, keeping in mind that the negative
evidence is not easy to be led by its very nature. It is now clearly settled that
the accused can reverse this presumption on a scale of preponderance of
probabilities. Lack of legally enforceable debt in favour of the complainant
need not be proved to the hilt beyond all reasonable doubts. Preponderance of
probabilities means more probable than not and superior in evidentiary weight
than the opposite.
20. So far as the fact of liability is concerned, in view of mandatory
presumption of law as discussed above, if a cheque has been produced by the
complainant bearing the signatures of the accused, there cannot be any
inherent lacuna in the existence of the liability. But definitely, accused can
point loop holes in the story of the complainant by impeaching the credit of
witness during his cross-examination. The accused can discharge his burden
by demonstrating the preponderance of probabilities coming in its way. In the present case, the complainant examined only himself as
the sole complainant witness and to raise the presumption of cheque having
been issued in discharge of legally recoverable debt and drawn for lawful
consideration arising by virtue of Section 118 (a) and Section 139 of N. I. Act,
the testimony of the complainant must be of such a character as to be believed
as gospel truth.
22. In the case in hand, complainant was cross-examined on the
point of his financial capacity and source of funds from which he advanced
the alleged loan of Rs. 6.5 lacs to the accused. However, complainant has
miserably failed to depose on his financial capacity satisfactorily. He also
failed to bring on record even an iota of evidence to prove and corroborate his
assertion that he received any proceeds for construction of any building to the
tune of Rs. 6.5 lacs and the same were advanced to accused as friendly loan.
Complainant has even failed to prove the very existence of any such business.
This creates doubts on the story of complainant that he had financial capacity
to advance a loan of Rs. 6.5 lacs to the accused. Therefore, the story of
complainant is not sustainable at his mere ipse dixit.
23. That the complainant brought his bank passbook Ex. CW1/D1 (OSR).
At the same time, complainant admitted that the passbook reflected payments
of three loan instalments pertaining to loans on a two wheeler scooter, a home
appliance and one other loan. This appears highly implausible and indigestible
that a person who himself bought a two wheeler and a home appliance on loan
and was paying instalments for the same advanced a loan of huge sum of Rs.
6.5 lacs to someone else in cash. This further fortifies the defence of the accused that the complainant did not have financial capacity to advance the
alleged loan of Rs. 6.5 lacs. In Basalingappa Vs. Mudibasappa delivered by
Hon'ble Supreme Court on 09.04.2019 in Crl Appl. No. 636 of 2019, it has
been held that when the financial capacity is being questioned, it is incumbent
upon the complainant to have explained his financial capacity and court
cannot insist on a person to lead negative evidence. In the case in hand,
complainant has failed to bring on record any evidence to prove that he was
having sufficient means and was in possession of the funds to the tune of Rs.
6.5 lacs. In such circumstances, the story of the complainant regarding
advancement of loan to the tune of Rs. 6.5 lacs cannot be believed.
24. Ld. Counsel for accused has argued that no evidence of loan has
been brought by the complainant to corroborate the assertion of extending a
loan nor any independent witness has been called to prove the factum of loan.
The arguments of Ld. Counsel for accused are worthy of acceptance as it is
quite normal for an ordinary prudent man to remain watchful of his financial
transactions and the degree of alertness increases with the amount of money
involved and in the present case degree is higher as complainant admitted that
he was paying installments for three loans including a two wheeler and a
home appliance item. Admittedly no document of loan was reduced to
writing. Mere production of cheque cannot make the case of the complainant
absolute and sacrosanct. It is necessary for the complainant to prove that the
cheque has been issued against the liability of the accused to repay him for the
loan advanced by the complainant to the tune of Rs. 6.5 lacs with evidence of
impeccable and irrevocable character. In such circumstances the story of the
complainant becomes highly doubtful. In view of the same this court is of the
opinion that accused has been successful in probablizing his defence. The onus shifted upon the complainant to prove his alleged claim, however, he has
miserably failed to lead any cogent evidence in support of his case.
25. Therefore, in the light if above discussion the theory of
complainant giving a loan of Rs. 6.5 lacs to the accused and giving of cheque
in question by the accused to discharge the legal liability to repay the loan
taken by him does not inspire the confidence of this court and the same is
unworthy of credence.
26. Ld. counsel for the complainant has laboured hard to pick holes
into the defence of the accused by submitting that accused has failed to prove
his defence that the cheque in question was given to one Satish Ahuja on
behalf of his brother for security of loan of Rs. 2 lacs.
27. It is a settled position of the law that the case of the complainant
should stand on its own legs. It cannot take advantage of the weakness of the
defence, nor can the court, on its own make out a new case for the prosecution
and convict the accused on that basis. If defence version is incorrect, it does
not mean that the prosecution version is necessarily correct. Therefore the
contention of the Ld. Counsel for the complainant regarding the deep defence
of the accused appears to be of no use in sailing through the case of the
complainant.
28. The Hon'ble Apex Court in the landmark judgment titled as “The
Hon'ble Apex Court in the epic Judgment passed in the case titled as 'Sharad
Birdichand Sarda vs State of Maharasthra' (1984) 4 SCC 116, while discussing the principles of appreciation of prosecution and defence evidence,
has held that-
''It is well settled that the prosecution must stand or fall on its own legs
and it cannot derive any strength from the weakness of the defence. This
is trite law. However, where various links in a chain are in themselves
complete, then a false plea or false defence may be called into aid only
to lend assurance to the court. In other words, before using the
additional link it must be proved that all the links in the chain are
complete and do not suffer from any infirmity. It is not the law that
where there is any infirmity or lacuna in the prosecution case, the same
could be cured or supplied by a false defence or a plea which is not
accepted by a court''.
29. It is all more significant that presumption can only be raised in
furtherance of prosecution case and not in derogation of the same. The three
judge bench of Hon'ble Supreme Court in a case dealing with prevention of
Corruption Act has observed in respect of presumption of law in ''Trilok
Chand Jain vs State of Delhi', 1977 AIR 666 as under:-
'The presumption therefore, can be used in furtherance of the prosecution case
and not in derogation of it. If the story set up by the prosecution inherently
militates against or is inconsistent with the fact presumed, the presumption
will be rendered sterile from its inception''.
30. Thus, in view of the totality of the circumstance and the settled legal
positions as discussed above, the case attempted to be built by the
complainant, appears to be suffering from fatal infirmities so much so, it goes directly to the root of the case and shakes the very edifice on which the case
of the complainant rests. It is also relevant to mention here that it is of
paramount importance to demand evidence of unambiguous, impeccable and
of unimpeachable in nature so as to entail criminal conviction of the accused
and which the complainant has failed to bring.
31. In the case of 'Kulvinder Singh vs Kafeel Ahmad'', Crl L. P. 478 of
2011, decided on 04.01.2013,Hon'ble Delhi High Court has held that the basic
principle in criminal law is that the guilt of the accused / respondent, must be
proved beyond reasonable doubts and if there is any slightest doubt about the
commission of an offence, then the benefit has to accrue to him.
32. At the same time, it is important to underscore the established canon
of criminal law that in order to pass a conviction in a criminal case, the
accused ''must be'' guilty and not merely ''may be'' guilty. The mental distance
between ''may be'' guilty to ''must be'' guilty is a long one and must be travel
not on surmises and conjectures, but by cogent evidence. In this case, after the
accused successfully rebutted the presumption of consideration by raising a
doubt on the very factum of the loan. The accused has clearly presented a case
which is superior in way. And as per the settled law, this is all that what is
required, as preponderance of probabilities is not a rigorous standard of proof,
but only so much evidence as makes the court lean in, in favour of one side
and not the other. Consequently, the benefit of doubt must go to the accused.
The material on record does not suggest that the accused ''must be'' guilty
whichever way one looks at it.
33. In view of the above discussions, the present case appears to be a fit case where benefit of doubt can be extended to the accused. Accordingly, in
view of the above discussions, this court holds that the complainant has failed
to prove his case. The accused has been able to rebut presumption under
Section 118 and 139 NI Act arising in favour of the complainant.
34. In light of foregoing reasons, it is clear that accused Gaurav Khurana
has succeeded in rebutting the presumption of legal liability and the
complainant has failed to prove the same affirmatively. As a result, accused
Gaurav Khurana stands acquitted from the offence u/s 138 NI Act.
Announced through CISCO WEBEX
on this day of 17.09.2020 (Rinku Jain)
MM (NI Act)-02 (West)/THC/ Delhi.
