Distt. Courts Dwarka New Delhi (18.11.2021) In Geetika Mehra Vs. Satyam Bhola. [Ct. Case No.28164/2018, CNR No.DLSW020313902018] held that; -
The first point of determination is as to whether presumption u/s.139 N.I. Act R/w Section 118 N.I. Act can be raised against the accused. In the considered opinion of this Court, such presumption can be duly raised against the accused as he has admitted his signatures on the cheque in question, and has also admitted that the particulars on the same were filled by him.
it is obligatory on the Court to raise this presumption in every case where the factual basis for the raising of the presumption has been established. It introduces an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the accused. Such a presumption is a presumption of law as distinguished from a presumption of fact which describes provisions by which the court may presume a certain state of affairs.
Presumptions are rules of evidence and do not conflict with the presumption of innocence, because by the latter all that is meant is that the prosecution is obliged to prove the case against the accused beyond reasonable doubt. The obligation on the prosecution may be discharged with the help of presumptions of law or fact unless the accused adduces evidence showing the reasonable probability of the nonexistence of the presumed fact.
but this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary. A fact is said to be proved when, after considering the matters before it, the Court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists.
Therefore, the rebuttal does not have to be conclusively established but such evidence must be adduced before the Court in support of the defence that the Court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of reasonability being that of the prudent man."
the accused can either prove the non-existence of consideration and debt by direct evidence, or by bringing 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 may act upon the plea that they did not exist
The offence punishable under section 138 NI Act is premised on theory of reverse onus of proof, and the complainant was not required, as she would have been required in a civil trial of recovery perhaps, to prove a loan transaction, as she had a valid cheque in question made in her favour by the accused.
With the presumptions stacked against him, the first order of business required the accused to plug loopholes in the case of the complainant, and only thereafter would the requirement for the complainant to prove her case beyond reasonable doubt have arisen.
Excerpts of the order;
# 1. The complainant, Ms. Geetika Mehra was friends with one Lata Bhola for a number of years. The accused herein, the son of the said Lata Bhola, alongwith his mother told the complainant that they want to purchase a house bearing no.B-204, Second Floor, Front Side, Double Storey, West Patel Nagar, New Delhi-110003 but they are facing paucity of funds, and requested the complainant to advance to them a friendly loan of Rs.6,30,000/-, in December, 2017. Their shortfall of funds being met after the complainant duly advanced them the loan of Rs.6,30,000/-, the accused and his mother purchased the aforementioned property. Both of them had agreed to repay the loan of complainant within 15 days from the date on which the loan was advanced to them. However, they avoided the repayment of the loan even after the expiry of the said period of 15 days, on one pretext or another. Finally, on 10.06.2018, after a lot of persuasion, the accused issued the cheque bearing no.209162 drawn on Union Bank of India, Patel Nagar Branch, Delhi dated 10.06.2018 for a sum of Rs.6,30,000/- in favour of the complainant, towards the repayment of the amount of friendly loan (hereinafter, 'the cheque in question'). The cheque in question was issued by accused with the assurance that it shall be duly honoured upon presentation. However, to the utter shock and dismay of the complainant, the said cheque in question was dishonoured vide cheque returning memo dated 25.06.2018 with remarks 'payment stopped by drawer'. A statutory legal demand notice dated 05.07.2018 was served upon the accused by the complainant. When the accused failed to repay the cheque amount even after expiry of the 15 days from the date of service of legal notice, the above captioned complaint was filed by the complainant seeking the summoning, trial and conviction of the accused for the offence punishable u/s.138 N.I. Act. It is the case of the complainant that instant complaint has been filed within the period of limitation as per Section 142 if the N.I. Act, and the territorial jurisdiction to try the present complaint vests with this court.
# 2. In her pre-summoning u/s.200 CrPC, the complainant examined herself as CW-1. CW-1 tendered her evidence affidavit Ex.CW1/1, bearing her signatures at point A & B respectively. The contents of the affidavit are a reiteration of the contents of the complaint, and are not being reproduced herein in the interest of brevity. At this stage, complainant also relied upon the following documents: -
(i) Cheque bearing no. 209162 Ex CW-1/A
(ii) Cheque return memo qua cheque Ex CW-1/A being Ex CW1/B
(iii) Legal Notice Ex.CW1/C
(iv) Speed Post Receipts Ex CW1/D
(v) Internet generated tracking report Ex.CW1/E
(vi) Reply qua legal notice Ex.CW1/F
Upon examination of pre-summoning evidence and after hearing the complainant on the point of summoning, cognizance of the offence punishable U/s.138 N.I. Act with respect to the cheque in question was taken against the accused, who was summoned to face trial.
# 3. The accused duly entered appearance to face trial. Formal notice u/s.251 CrPC was served upon the accused. By way of the said notice, substance of accusation, as contained in the complaint, against him was explained to the accused and the accused was given an opportunity to substantiate his plea of defence. At this stage, the accused pleaded not guilty, and stated that he had obtained a loan of Rs.2,50,000/- from Sanjeev Nagpal, brother of the complainant and had issued cheque in question against the said loan. The accused admitted the receipt of legal demand notice. The accused further stated that the he has no legally enforceable liability towards the complainant.
# 4. Thereafter, consequent to the application of the accused u/s.145(2) N.I. Act, which was allowed as unopposed by the complainant, the accused was permitted to cross-examine the complainant and the matter was fixed for C.E.
# 5. At the stage of C.E., the complainant examined herself as CW-1. In her examination-in-chief, the complainant adopted her pre-summoning evidence as her post-summoning evidence and also placed reliance upon documents already exhibited as Ex.CW-1/A to Ex.CW-1/F. CW-1 was cross-examined by the accused at length and thereafter, discharged as a witness.
# 6. No other witnesses were examined by the complainant and C.E. was closed.
# 12. After cross-examination of DW-3, he was discharged as witness and hearing of the case progressed to final arguments.
# 13. Final arguments have been heard by this court. Record, including written arguments filed by the parties, has been perused. In the written arguments (including additional written arguments), complainant has relied upon the following judgments: -
(i) Sripati Singh Vs. The State of Jharkhand & Anr. (Crl. Appeal No.1269-1270/21) 2021 latest case law 531 SC
(ii) APS Forex Services Pvt. Ltd. Vs. Shakti International Fashion Linkers & Ors. (Crl. Appeal No.271/2020)
(iii) Sama Dharam & Ors. Vs. S. Narajan in Crl. O.P.(MD) No.3824/2012 of the Hon’ble Madras High Court
Ld. Counsel for the accused has placed reliance on the following judgments: -
(i) Baslingappa Vs. Mudhibasappa (2019) 5 Supreme Court Cases 418 (Crl. Appeal No.636/2019; 09.04.2019)
(ii) Kulvinder Singh Vs. Kafeel Ahmed 2013 II AD (Delhi) 81 (Crl. L.P. No.478/2011; 04.01.2013
Considered.
# 14. It would be apposite at the stage to briefly discuss law applicable to the defence of dishonour of cheques. . The legal position that emerges, from a reading of S.138 N.I. Act, is that before finding of conviction with the offence punishable under Section 138 N.I. Act can be returned against the accused, it has to be established, cumulatively-
(i) that the cheque in question was issued by the accused in favour of the complainant for the discharge of legally enforceable liability.
(ii) presentation of the cheque to the bank within three months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(iii) a demand being made in writing by the payee or holder in due course by the issuance of a notice in writing to the drawer of the cheque within thirty days of the receipt of information from the bank of the return of the cheques; and
(iv) the failure of the drawer to make payment of the amount of money to the payee or the holder in due course within fifteen days of the receipt of the notice.
The legal position was discussed by the Hon’ble Supreme Court of India in MSR Leathers vs. S. Palaniappan (2013) 1 SCC 177 , wherein it was held thus,
“12. The proviso to Section 138, however, is all important and stipulates three distinct conditions precedent, which must be satisfied before the dishonour of a cheque can constitute an offence and become punishable. The first condition is that the cheque ought to have 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. The second condition is that the payee or the holder in due course of the cheque, as the case may be, ought to make 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. The third condition is that the drawer of such a cheque should have failed to make 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. It is only upon the satisfaction of all the three conditions mentioned above and enumerated under the proviso to Section 138 as clauses (a), (b) and (c) thereof that an offence under Section 138 can be said to have been committed by the person issuing the cheque.”
This court shall now examine if the four ingredients as described in the forgoing paragraph have been satisfied in this case.
# 15. . . . . .Further, no evidence has been adduced on record by the accused to show that account in which the cheque was presented did not belong to the complainant. By virtue of Section 146 of NI Act, this Court is bound to presume the fact that the cheque was dishonoured for the reason mentioned in the returning memo, and this presumption has also not been dislodged by the accused. An objection which is purely technical in nature, since neither the issuance of cheque nor its dishonour ave been controverted, cannot be allowed to prevail over merits, especially as it is evident from the record that the cheque was rightly presented by the complainant with her own banker, albeit in a joint bank account. As such, the objection taken by the accused is liable to be rejected. In the considered opinion of this court, the complainant as proved on record that the cheque in question was presented by the complainant with her bank for encashment within the period of its validity. Accordingly, the condition no.(ii) above stands satisfied.
# 16. It is the case of the complainant that she had sent legal notice Ex.CW1/C to the accused, within 30 days of the receipt of knowledge of the dishonour of cheque. The accused has not disputed that the legal notice was served upon him within the statutory period of limitation. Infact, the accused has relied upon the reply to the said ice Ex.CW1/F which was sent by him to the complainant. In view thereof, condition no.(iii) above stands satisfied.
# 17. Throughout the trial, the accused has taken the defence that although the cheque in question bears his signatures, the same has not been issued by him to the complainant in discharge of any legally enforceable liability. The accused has axiomatically admitted that he did not pay the amount of cheque in question to the complainant even after the expiry of 15 days from the date of receipt of legal notice. Accordingly, the condition no.(iv) above also stands satisfied.
# 18. Now it remains to be seen if the cheque in question Ex.CW1/A was issued by the accused to the complainant in discharge of legally enforceable liability, in satisfaction of condition no.(i) above.
# 19. At this stage, it becomes imperative to mention Section 139 of the Negotiable Instrument Act, 1881 which carves out a presumption in favour of the drawee that the cheque was issued to him in discharge of a debt or other liability of a legally enforceable nature. Also, the said provision must be read along with Section 118 of the same enactment which spells out another presumption in favour of the drawee that every negotiable instrument was 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.
# 20. The first point of determination is as to whether presumption u/s.139 N.I. Act R/w Section 118 N.I. Act can be raised against the accused. In the considered opinion of this Court, such presumption can be duly raised against the accused as he has admitted his signatures on the cheque in question, and has also admitted that the particulars on the same were filled by him.
# 21. The offence of Section 138 NI Act being premised on the theory of reverse onus of proof, the next point of determination is whether the accused has been able to discharge the onus of proof placed upon him. The journey of trial qua a complaint under Section 138 NI Act commences, after a determination is made that the presumption as per Section 139/118 Negotiable Instruments Act, 1881, can be raised against the accused, from the point of the accused who is required to prove that the cheque in question was not given for a consideration or for the discharge of any legally enforceable debt. In this regard, reliance can be placed on Hiten P. Dalal Vs. Bratindranath Banerjee (2001) 6 SCC 16 wherein it was held as under: -
"22. Because both Sections 138 and 139 require that the Court `shall presume' the liability of the drawer of the cheques for the amounts for which the cheques are drawn, ..., it is obligatory on the Court to raise this presumption in every case where the factual basis for the raising of the presumption has been established. It introduces an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the accused. Such a presumption is a presumption of law as distinguished from a presumption of fact which describes provisions by which the court may presume a certain state of affairs. Presumptions are rules of evidence and do not conflict with the presumption of innocence, because by the latter all that is meant is that the prosecution is obliged to prove the case against the accused beyond reasonable doubt. The obligation on the prosecution may be discharged with the help of presumptions of law or fact unless the accused adduces evidence showing the reasonable probability of the nonexistence of the presumed fact.
23. In other words, provided the facts required to form the basis of a presumption of law exists, the discretion is left with the Court to draw the statutory conclusion, but this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary. A fact is said to be proved when, after considering the matters before it, the Court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists. Therefore, the rebuttal does not have to be conclusively established but such evidence must be adduced before the Court in support of the defence that the Court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of reasonability being that of the prudent man."
In the backdrop of the legal position enunciated above, it is to be examined whether the accused, on a scale of preponderance of probabilities, has led evidence sufficient to discredit the case of the complainant so as to shift the onus placed upon him to the complainant. As held by the Hon’ble Supreme Court of India in Kumar Exports vs Sharma Carpets (2009)2 SCC 513, the accused can either prove the non-existence of consideration and debt by direct evidence, or by bringing 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 may act upon the plea that they did not exist. If this Court comes to the conclusion that the accused has not been able to rebut the presumptions raised against him, by failing to bring on record direct evidence or by even failing to sufficiently perforate the case of the complainant, the complainant is entitled to a decision in her favour.
# 22. . . . . the case of the accused that he had given the cheque in question to Sanjeev Nagpal as security towards repayment of the loan amount of Rs.6 lakhs, which amount was never actually advanced to him, appears implausible and unbelievable. At this juncture, it is instructive to also advert to the consistent stand taken by DW1/accused right from the stage when the notice under section 251 CrPC was served upon him to the effect that the particulars on the cheque in question were filled in by him. If the cheque in question had indeed been intended as a security cheque towards repayment of the loan amount which Mr Sanjeev Nagpal had promised to advance to him, the fact that the accused has offered no explanation as to why he had made out the cheque in the name of the complainant and not Mr Sanjeev Nagpal is also a strong circumstance against him. In this regard, an explanation has not even been attempted, much less substantiated. Credibility of DW1 also becomes unreliable in view of his slippery assertion during his examination in chief that he does not know the complainant, and later in his cross examination that he knows her for long. Vaguely deposing that he does not know how the cheque in question came in possession of the complainant, after admitting that he had filled the particulars thereupon, also makes his version dubious. Bald averments and affirmations, even if on oath, do not help the case of the accused.
# 23. The testimony of DW 2 also does not help the case of the accused. In her examination in chief, DW2 has deposed that her son had taken a loan of Rs.6 lakhs from Sanjeev Nagpal, and Sanjeev Nagpal had told her son that the remaining loan amount would be given to him in a few days time. DW2 has not deposed that she was present at the time when the alleged loan transaction took place between her son and the said Sanjeev Nagpal, which makes her version questionable. DW2 has also not elaborated on the proposed schedule in which Sanjeev Nagpal had agreed to advance the remaining loan amount to her son, or the reason why her son had given him a cheque amounting to Rs.6,30,000/-. DW2 further deposed in her examination in chief that the cheque in question was not given by the accused to the complainant but to Sanjeev Nagpal, but much like the accused, she has also failed to offer any explanation as to why the cheque in question was made out in the name of the complainant by the accused. The testimony of DW 2, replete with such lacunae, is also unreliable
# 25. The accused took the stand all along that he had obtained a loan of Rs ,50,000/- from the brother of the complainant, Sanjeev Nagpal, but he was not examined as a witness by the accused. The evaluation of the testimonies of the above witnesses as well as the aforementioned circumstance clearly establishes that the ccused has not been successful in proving his defense in the affirmative.
# 26. Now this court shall examine if the accused has been able to dislodge the presumption against him under section 139 of the NI Act, by perforating the case of the complainant.
# 27. It has been the case of the complainant that she loaned an amount of Rs.6,30,000/- to the accused and his mother, so that they could purchase a property. It is further the case of the complainant that she was promised the repayment of the loan amount at the time when the mother of the accused would get paid her alimony amount, after the conclusion of her divorce proceedings. In his cross-examination as DW1, DW-1/accused was confronted with a document Ex DW 1/CW1A, being the document of the purchase of a property by the mother of the accused on 28 December 2017. This document has been admitted by the accused, and his mother DW2, also admitted that they have been living in the said house. The date of the purchase of the document property also coincides with the date on which the alleged loan was advanced by the complainant to the accused. DW1 has further admitted that his mother obtained a divorce in 2018. When asked if his mother received an amount of
7,25,000/- as alimony, DW1 simply replied that he does not is not in a position to either affirm or deny the said fact. Weak, inconsistent answers as these shake the credibility of DW1 as a witness., and lend credibility to the version of the complainant on the other hand.
# 28. In her testimony as DW-2, the mother of the accused also stated that she does not know the amount of alimony which was received by her. She accepted as correct the suggestion that she had purchased a flat bearing number B204 W. Patel Nagar in January 2018. The fact the the mother of the accused admitted that she had indeed purchased a property in January 2018 substantiates the case of the complainant. Further, the very fact that DW 2 deposed that she does not remember the date of her divorce, and also does not remember the amount of the alimony received by her is a factor to be considered against the credibility of the witness herself, being suggestive of the fact that she deliberately gave vague answers to the questions put to her in cross examination. Examination of the testimony of DW1 and DW2 leads this Court to the conclusion that their testimony in fact supports the case of the complainant, of her loaning the money to the accused and his mother so that they could purchase a house, on the assurance that her loan will be repaid when DW-2 receives the amount of her alimony in her divorce proceedings.
# 32. An attractive argument was raised by the accused to the effect that in the legal notice as well as in her cross-examination, the complainant has admitted that the money was in fact loaned by her to Lata Bhola and not to the accused, and she had also received assurance from the said Lata Bhola, who is the mother of the accused, that she shall be repaid the loan amount after she receives money in her divorce proceedings. It was argued that this circumstance shows that even if it is conceded that the complainant advanced the amount of Rs.6,30,000/-, the best case of the complainant would be that this amount was due to the complainant by the mother of the accused, namely Lata Bhola, and not the accused himself. It was argued that this part of the testimony of the complainant shows that there is no legal liability of the accused towards the complainant qua the cheque in question, and therefore the accused deserves to be acquitted for the offence punishable under section 138 NI Act with respect to the cheque in question. As attractive as the argument may seem, it does not find favour with this court. Bare perusal of the statutory provision of Section 138 NI Act reveals that it makes punishable the dishonour of a cheque issued by the accused in favour of the complainant for the discharge of a debt or ‘other liability’ Explanation to 138 also provides that debt or liability means legally enforceable debt or other liability. The reliance by the complainant, to counter this argument, in the additional written statements upon the judgment titled Sama Dharam (supra) seems misplaced, as the said Judgment does not have any nexus with the facts of the present case. Be that as it may, in the considered opinion of this court, the words ‘other liability’ or of wide amplitude, and can subsume within themselves the scenario such as the one in the present case where a son has issued a cheque in discharge of the liability of his mother. Reliance at this juncture can be placed upon the judgment of the Hon’ble High Court of Delhi titled Pratap Singh Yadav And Anr. vs Atal Behari 2003 CriLJ 705, 100 (2002) DLT 673, 2003 (66) DRJ 101 wherein it has been held that criminal liability can be fastened upon the person who has issued a cheque in discharge of a liability of another. This Court is further fortified in its opinion by virtue of the dictum of the Hon'ble Supreme Court of India in the case titled as I.C.D.S. Ltd. vs. Beena Shabeer [2002 (4) Crimes 75 (SC)] wherein it has been held,
“The language, however, has been rather specific as regards the intent of the legislature. The commencement of the Section stands with the words "Where any cheque". The above noted three words are of extreme significance, in particular, by reason of the user of the word "any" the first three words suggest that in fact for whatever reason if a cheque is drawn on an account maintained by him with a banker in favour of another person for the discharge of any debt or other liability, the highlighted words if read with the first three words at the commencement of Section 138, leave no manner of doubt that for whatever reason it may be, the liability under this provision cannot be avoided in the event the same stands returned by the banker unpaid. The legislature has been careful enough to record not only discharge in whole or in part of any debt but the same includes other liability as well.”
In view of the legal position discussed above, even if it is conceded that the loan was advanced by the complainant only to the mother of the accused and not to the accused and his mother together, the cheque issued by the accused can still be construed to be issued in discharge of “any other liability”, and the accused cannot avoid penal consequences of the dishonour of the cheque merely because the loan amount was not advanced to him by the complainant. This argument of the accused is also accordingly repelled.
# 33. Finally, the argument of the accused that there was no document or loan agreement executed to evidence loan transaction is a circumstance which should be construed in favour of the accused, so as to entitle him to an acquittal is also liable to be rejected. The offence punishable under section 138 NI Act is premised on theory of reverse onus of proof, and the complainant was not required, as she would have been required in a civil trial of recovery perhaps, to prove a loan transaction, as she had a valid cheque in question made in her favour by the accused. With the presumptions stacked against him, the first order of business required the accused to plug loopholes in the case of the complainant, and only thereafter would the requirement for the complainant to prove her case beyond reasonable doubt have arisen. As it was upon the accused to dislodge the presumptions attached the the cheque in question, and as he has been unable to do so, the case of the complainant stands.
# 34. For the reasons mentioned in the foregoing paragraphs, this Court has reached the conclusion that the accused failed both in establishing the version that he had set forth in the affirmative, and in perforating the case of the complainant and dislodging the presumptions of Sections 139/118 NI Act stacked against him. The accused Satyam Bhola, S/o Pankaj Bhola is accordingly convicted for the offence punishable u/s 138 NI Act with respect to the cheque in question.
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