17. The Division bench of Hon'ble Supreme Court in KRISHNA JANARDHAN BHAT Vs. DATTATRAYA G. HEGDE, (2008) 4 SCC 54, has held that the accused can discharge the burden of presumption U/s 118 and U/s 139 of the NI Act by raising a probabale defence on the strength of preponderance of probabilites.
18. In RANGAPPA Vs. SRI MOHAN AIR 2010 SC 1898 the Hon'ble Supreme Court has held that it is a settled position that when an ac cused has to rebut the presumption under Section 139, the standard of proof for doing so is that of `preponderance of probabilities'. The accused can rely on the materials submitted by the complainant in order to raise such a defence.


Axis Bank Ltd. (Formerly Known As ... vs . on 17 February, 2014

19. From the reading of the above said provisions and the judg ments the position of law which emerges is that once execution of the promissory note is admitted, the presumption under Section 118(a) CC No. 241/12 Axis Bank Vs Parveen Gupta Page8/12 and Section 139 of the NI Act would arise that it is supported by a consideration. Such presumptions are rebuttable. The accused can prove the nonexistence of a consideration by raising a probable de fence. If the accused discharges the initial onus of proof by showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the Complainant who will be obliged to prove it as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the nego tiable instrument. The burden upon the accused of proving the non existence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circum stances upon which he relies. In case, where the accused fails to dis charge the initial onus of proof by showing the nonexistence of the consideration, the complainant would invariably be held entitled to the benefit of presumption arising under Section 118(a) and Section 139 of the NI Act in his favour.


20. Now coming to the instant case, in the case in hand the accused has admitted that he has taken loan of Rs 13,98000/ from the complainant in the year 2007 which was repayable in four years with an EMI of 39,500/ each. However accused submitted that he has repaid the entire loan and the statement of account Ex CW1/13 which is placed on record by the complainant itself shows his liability as NIL. Further accused as DW1 also stated that he has made payment against Cheque's in question Ex. CW1/3 and Ex. CW1/4 by way of demand draft and cheque copies of which are marked as Mark "A" and Mark "B" respectively. Accused also contended that the cheque's in question Ex. CW1/3 and Ex. CW1/4 are security Cheques which were given by him to the complainant at the time of taking of the loan.
21. I have perused the copy of demand draft Mark "A" and cheque Mark "B", it no where states that the said payment is made by the accused against the cheque's in question Ex. CW1/3 and Ex. CW1/4. Further during the cross examination of the accused as DW1 it has CC No. 241/12 Axis Bank Vs Parveen Gupta Page9/12 been admitted by the accused that the payment made by him through draft "Mark A" and cheque "Mark B" does not mention against which dues the same has been given by him to the complainant which itself dents his stand.


22. Further during the course of the arguments Ld counsel for the accused also submitted that that the statement of account of the accused Ex. CW1/13 shows the liability of the accused as Nil and this shows that the accused has paid his entire outstanding against the complainant. Per contra Ld Counsel for the Complainant submitted that the account of the accused was "Written Off" on 26/11/2009 and because of this, the statement of account shows the liability of the accused as NIL. It is trite to say that "Writing Off" is an internal accounting procedure to clean up the balance sheet of the bank. Whenever a there is continuous default on the part of the creditor the loan is declared as a "NPA" i.e. Non Performing Asset and is "Written Off" by the bank as per the guidelines and rules laid by the Reserve Bank of India. Such "Written Off" are restored to by the banks even in cases where bank has not exhausted all the avenues for recovery of the dues, further such written does not affect the right of the bank to proceed against the borrower to collect the dues. Therefore if the liability of the accused has been shown as Nil in the statement of account Ex CW1/13 due to the fact that the loan of the accused has been "Written Off" by the bank due to continuous default it cannot be said that the accused has paid all his dues and liability and he further has no liability towards the complainant. Further the payment made by the accused through demand draft Mark "A" on 17/04/2010 and by cheque Mark "B" on 28/5/2010 itself falsify the claim of the complainant that he has made the entire payment to the complainant, as there cannot be any justification for making payment by the accused in the year 2010 if all the payments have already been made by him and the liability of the accused has ceased in the year


all the payments have already been made by him and the liability of the accused has ceased in the year 2009 when the account was "Written off" by the bank.


CC No. 241/12 Axis Bank Vs Parveen Gupta Page10/12
 23. It is trite to say that mere denial on the part of the accused and stating that the entire liability has been paid by him and further labeling the Cheque's in question as security cheque's would not absolve him from any liability. It was for the accused to prove the circumstances under which the cheque's in question Ex. CW1/3 and Ex. CW1/4 were issued by him by leading cogent evidence so as to discharge and rebut the presumption raised against him by the Statute U/s 139 and 118 (a) of the NI Act.

24. The accused has not brought any material on record and also no cogent explanations or any probable defence which would rebut the shadow of presumption existing in favour of the Complainant. This court do not find any force in the arguments advanced by the learned counsel for the accused that he has succeeded in rebutting the pre sumption under Section 139 of the Act.


25. From the materials brought on record and evidence lead by the parties, It stands duly proved that the accused has failed to rebut the presumptions U/s 118 (a) and section 139 of the NI Act. Therefore, I hereby hold that the Complainant has proved and substantiated the allegations that the cheque's in question Ex. CW1/3 and Ex. CW1/4 were issued by the accused in discharge of his legal liability and for consideration.


26. Further CW1 has also deposed in his examination in chief by way of affidavit that despite service of legal demand notice Ex CW1/6 the accused has failed to make the payment. Accused has contended that he has made the payment against the Cheque's in question Ex. CW1/3 and Ex. CW1/4 through draft "Mark A" and cheque "Mark B" on 17/04/2010 and 28/05/2010. Even believing the version of the accused to be correct i.e. the payment made by him to the complainant through draft "Mark A" and cheque "Mark B" on 17/04/2010 and 28/05/2010 respectively is against the Cheque's in Question Ex. CW1/3 and Ex. CW1/4, still it is apparently clear that the CC No. 241/12 Axis Bank Vs Parveen Gupta Page11/12 said payment is made in the year 2010 i.e. much after the dishonor of the Cheque's in Question Ex. CW1/3 and Ex. CW1/4, which itself proves that payment of the cheque's amount within 15 days of the receipt of the legal demand notice has not been made by the accused. Therefore considering the entire evidence placed on record, it also stands duly proved that the accused has failed to make the payment of the Cheque's in question Ex. CW1/3 and Ex. CW1/4 within 15 days from the receipt of the legal demand notice.


27. Accordingly, In view of the facts, evidence lead by both the parties coupled with my discussion above, I hereby hold that the Complainant has proved and substantiated its allegations against the accused and all the ingredients for the offence under section 138 of the NI Act have been proved against the accused. Accordingly, accused Praveen Gupta S/o Late Sh. M.S.Gupta is hereby convicted of the offence u/s 138 NI Act.
 Copy of this Judgment be provided to the accused free of cost.

 This Judgment contains 12 pages. Every Page of this Judgment has been signed by me.

      Announced in the open Court                             (RAVINDER SINGH II)
      Dated 17.02.2014                                               MM (NI Act 07)
                                                                    Dwarka/New Delhi.

CC No. 241/12                  Axis Bank Vs Parveen Gupta                    Page12/12


Case No. : 5176/14 Raj Kumar Sharma vs . Pawan Kumar Page No. 1/12 on 17 May, 2014

IN THE COURT OF SHRI RAVINDER SINGHII
                              METROPOLITAN MAGISTRATE
                              DWARKA COURTS, NEW DELHI

Case No. : 5176/14
Unique Case ID No. : R0534662009

Raj Kumar Sharma
S/o Sh. Mali Ram Sharma
R/o RZ672, Street No. 18 E,
Sadh Nagar, Palam Colony,
New Delhi110045.                         .......................................Complainant

                                                 Versus

1)Pawan Kumar
    S/o Sh. Jagdish Prasad

2) Jagdish Prasad
R/o Radhika Collection,
VPO Khatu Shyam Jee,
Tehsil Danta Ram Garh,
District Sikar,
Rajasthan.

Also at

Sauragya Panchi Devi Memorial Chikatsalya,
Manda Chauraha,
VPO Khatu Shyam Jee,
Tehsil Danta Ram Garh,
District Sikar,
Rajasthan.                                      .......................................Accused

Date of Institution:                                                                  25.07.2009
Plea of the accused:                                                                  Pleaded Not Guilty
Date of Reserving Judgment:                                                           25/04/2014
Sentence or final Order:                                                              Convicted
Date of Judgment:                                                                     17/05/2014

                                            JUDGMENT
 BRIEF FACTS AND REASONS FOR DECISION OF THE CASE


1. By way of the present judgment, I shall decide the complaint Case No. : 5176/14 Raj Kumar Sharma Vs. Pawan Kumar Page No. 1/12 case U/s 138 Negotiable Instrument Act 1881 (hereinafter Said as NI Act) filed by the complainant Raj Kumar Sharma against the accused persons Pawan Kumar S/o Sh. Jagdish Prasad and Sh. Jagdish Prasad.


2. The factual matrix necessary for disposal of the present case as per the allegations in the complaint are that, the complainant is doing the business of garments and both the accused persons Raj Kumar and Jagdish Prasad are alleged to be the relative of the complainant. It is further alleged that accused No. 1 Pawan Kumar was having business terms with the complainant and due to this he was also having close relations with the complainant. It is further alleged that the accused No. 2 Jagdish Prasad is father of accused No. 1 Pawan Kumar. It is alleged that both the accused No. 1 and 2 due to close relationship with the complainant approached the complainant for grant of a friendly loan. It is alleged that both the accused persons approached the complainant for the said loan in the month of July, 2007 at the business place of the complainant at Delhi. It is alleged that both the accused requested the complainant to given a friendly loan of Rs. 2,50,000/ as both the accused were in need of money. It is further alleged that both the accused persons assured the complainant that they would return the money. It is further alleged that thereafter the complainant gave a loan of Rs. 2,50,000/ to both the accused persons by way of cash and it was assured by the accused persons that they would return the said loan amount within a period of one year. It is further alleged that after a months time both the accused persons contacted the complainant and requested that instead of one year they would return the loan amount within two years. It is further alleged that thereafter the accused persons in discharge of their liability towards the said loan amount issued a cheque bearing no. 495126 dated 05.04.2009 amounting to Rs. 2,50,000/ drawn on State Bank of Bikaner & Jaipur, Khatu Shyam


drawn on State Bank of Bikaner & Jaipur, Khatu Shyam Ji branch in favour of the complainant. It is alleged that the accused persons assured the complainant that the cheque will be encashed at the time of presentation. It is further alleged that the complainant had even contacted the accused persons before presentation of the cheque in question and accordingly, the complainant presented the Case No. : 5176/14 Raj Kumar Sharma Vs. Pawan Kumar Page No. 2/12 cheque in question for encashment with its bank i.e. Axis Bank Ltd. and the same was dishonoured vide cheque returning memo dated 26.05.2009 with remarks "Insufficient Funds". Thereafter it is alleged that the complainant came to know about the fact of dishonour of the cheque in question on 16.06.2009. It is further alleged that immediately after knowing of the dishonour of the cheque in question the complainant contacted the accused persons herein and requested them for making the payment but they refused to make the payment. Thereafter the complainant has given a legal notice of demand dated 24.06.2009 to the accused which was sent through speed post and U. P. C. on 24.06.2009 thereby calling upon the accused persons to make the payment of the cheque amount. It is alleged that the accused persons have failed to pay any sum in response to the legal notice of demand as a result of which the complainant has filed the present complaint for prosecution of the accused U/s 138 of the NI Act.


3. After the complaint was filed, the complainant Raj Kumar Sharma led his presummoning evidence by way of an affidavit and after hearing the counsel for the complainant and considering the entire material and documents on record, summons were issued against the accused No. 1 only i.e. Pawan Kumar by the court vide order dated 31.07.2009 for the offence U/s 138 of NI Act. Hence the complaint of the complainant remained restricted to accused No. 1 Pawan Kumar. On appearance of the accused Pawan Kumar a separate notice U/s 251 of the Criminal Procedure Code, 1973 (hereinafter said as the Code) dated 23.01.2013 was given to the accused to which he pleaded not guilty and claimed trial. Thereafter, the matter was listed for complainant's evidence.


4. The complainant Raj Kumar Sharma got himself examined as CW1 and adopted his pre summoning evidence affidavit which is Ex. CW1/A and he also relied on other documents Ex. CW1/1 to Ex. CW1/18. Ex. CW1/1 is the original cheque in question, Ex. CW1/2 is the cheque deposit slip, Ex. CW1/3 is the cheque returning memo, Ex. CW1/4 is the letter forwarding the cheque in question for collection, Ex. CW1/5 is the cheque returning letter, Case No. : 5176/14 Raj Kumar Sharma Vs. Pawan Kumar Page No. 3/12 Ex. CW1/6 is the legal notice of demand dated 24.06.2009, Ex. CW1/7, Ex. CW1/8, Ex. CW1/9 and Ex. CW1/10 are the speed post receipts, Ex. CW1/11 is the UPC vide which the aforesaid demand notice was sent to the accused and Ex. CW1/12 to Ex. CW1/18 are the returned envelopes. The complainant during evidence also tendered his original ledger book as Ex. CW1/19 and the Income Tax Return Ex. CW1/20. Complainant also tendered his account statement dated 14.07.2007 as Ex. CW1/Z. CW1 was duly cross examined by the Ld. Counsel for the accused and thereafter, the complainant's evidence was closed at request.


STATEMENT OF ACCUSED U/S 313 OF THE CODE.

5. Thereafter, the statement of accused was recorded U/s 313 of the Code in which all the incriminating evidence along with exhibited documents were put to the accused Pawan Kumar in which he stated that he has never taken any loan from the complainant and has also never approached the complainant for availing any loan. The accused however admitted that the complainant is his relative and he was having business relationship with him. The accused further submitted that the cheque in question bears his signatures but he denied that he has filled the contents of the same. The accused further stated that the cheque in question was given by him as a security to the complainant in relation to the goods purchased by him. The accused further stated that he is not aware about the dishonour of the cheque in question and further denied the receipt of the legal demand notice. The accused also stated that the ledger statement Ex. CW1/19 and the statement Ex. CW1/Z are false documents. The accused also stated that the complainant has filed this false complaint case against him and has also deposed falsely against him. He further denied that he owe any liability towards the complainant.
 DEFENCE EVIDENCE.


6. Thereafter the case was fixed for defence evidence. The accused Case No. : 5176/14 Raj Kumar Sharma Vs. Pawan Kumar Page No. 4/12 filed an application U/s 315 of the Code for producing himself as a defence witness. The said application was allowed and the accused deposed as DW1 and stated that he is running the business of readymade garments. The accused also stated that the complainant is also doing the business of readymade garment and he has given the cheque in question as a security to the complainant during the course of the business. It is also stated that he owed certain liability towards the complainant and he has also made payment to the complainant even after filing of present complaint case. The accused also stated that he owes no liability against the cheque in question. The accused also stated that he has not taken any money from the complainant and he has never come to Delhi before filing of the present complaint case. The accused also stated that the complainant used to visit his shop for business purposes. The accused also stated that he has never received the legal demand notice from the complainant against the dishonour of the cheque in question. The accused further stated that the cheque in question bears his signatures but he denied that he has filled the particulars of the same. The accused further stated that he and his father have never visited the house of the complainant and he even does not know where the complainant is residing. DW1 (accused) was duly cross examined by Ld. Counsel for the complainant. Thereafter defence evidence was closed at request of the accused and the case was listed for final arguments.

 FINAL ARGUMENTS


FINAL ARGUMENTS

7. Final arguments were addressed on behalf of both the parties. I have heard the arguments of Ld. Counsels for both the parties and have also given my anxious and thoughtful consideration to the same and further I have also perused the entire record of the case file. Before proceeding further it is imperative for me to go through the relevant provisions of law.

 Section 138 of the Negotiable Instruments Act reads as:
 "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 Case No. : 5176/14 Raj Kumar Sharma Vs. Pawan Kumar Page No. 5/12 discharge, in while or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless


(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
 (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and

 (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.

 Explanation:For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability.

APPRECIATION OF EVIDENCE IN THE LIGHT OF THE INGREDIENTS OF SECTION 138 OF THE NI ACT & THE DEFENCE RAISED BY THE ACCUSED.


8. In the instant case, it is not disputed by the accused that the Cheque in Question Ex. CW1/1 is drawn on the account maintained by him. Further the signature on the cheque in question Ex. CW1/1 is also not disputed by the accused. The presentation, dishonor of the cheque in question and the cheque returning memo has also not disputed by the accused. Therefore, In view of the evidence on record it stands proved that the cheque in question Ex CW1/1 was signed by the accused and the same was drawn on account maintained by him. It also stands proved that the cheque in question Ex. CW1/1 was presented within the period of its validity and the same was dishonoured vide cheque returning Memo Ex. CW1/3 with remarks "Funds Insufficient".
9. Perusal of the entire evidence reveals that two fold defences have been taken by the accused in the present complaint case. Firstly, that he has not been served with any legal demand notice by the complainant Case No. : 5176/14 Raj Kumar Sharma Vs. Pawan Kumar Page No. 6/12 and secondly that he has not taken any loan from the complainant and he has given the blank signed cheque in question Ex. CW1/1 to the complainant during his business dealings with the complainant and not in discharge of his loan liability as alleged by the complainant.


10. Coming to the first line of defence taken by the accused that he has not been served with the legal demand notice from the complainant, it is pertinent to note that complainant Raj Kumar Sharma as CW1 has specifically stated in his affidavit Ex. CW1/A that he has got issued the legal notice of demand dated 24.06.2009 to the accused which is Ex. CW1/6 and it was sent to the accused on 24.06.2009 itself vide speed Post and UPC, receipts of which are Ex. CW1/7 to Ex. CW1/10 and Ex. CW1/11 respectively. The Complainant has also placed on record the returned envelopes Ex. CW1/12 to Ex. CW1/18.


11. The accused at the time of framing of the notice under section 251 of the Code, in his statement under section 313 of the code and also during his evidence as DW1 has denied the receipt of the legal demand Ex. CW1/6. Interestingly, during the cross examination of accused as DW1 the accused admitted that the legal demand notice Ex. CW1/6 bears his correct address which evidences that the legal demand notice was sent on the correct address of the accused. Further, on perusal of the returned envelopes Ex. CW1/12 to Ex. CW/18 it is revealed that all of them have been returned unserved with remarks "refused". It is trite to say that when there is service of notice by post on the correct address which admittedly has taken place in the present case refusal on the part of the accused would amount to proper service. Otherwise, a trickster cheque drawer would avoid receiving the legal demand notice by adopting different strategies and escape from legal consequences of Section 138 of the NI Act. Therefore, there is always a presumption that the legal demand notice has been duly served upon the accused unless some concrete evidence in rebuttal is adduced by the accused to establish that the Legal Demand Notice has not been served upon him. It was for the accused to rebut the presumption about the service of Case No. : 5176/14 Raj Kumar Sharma Vs. Pawan Kumar Page No. 7/12 notice and show that he had no knowledge that the notice was brought to his address or that the address mentioned on the cover was incorrect or that the letter was never tendered or that the postal receipts were incorrect. Except denials and suggestions the accused has not any lead any evidence to corroborate his stand. Therefore its stands proved that the legal demand notice has been served upon the accused. As such non receipt of notice as a defence on part of the accused has no force.


12. Now coming to the second line of defence which has been taken by the accused that he has not taken any loan from the complainant and he has given the blank signed cheque in question Ex. CW1/1 to the complainant during his business dealings with the complainant and not in discharge of his loan liability as alleged by the complainant.


13. It is trite to say that the crux of penal liability under Section 138 of the Act is that the Cheque in question must be issued for the discharge of any legal debt or liability. Existing of legal debt or liability is sine qua non for constituting the offence. Before proceeding further it is imperative for me to take notice of the provisions of Sections 118(a) and 139 of the NI Act which read as under:
 "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;"

 "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.


14. The Division bench of Hon'ble Supreme Court in Krishna Janardhan Bhat v. Dattatraya G. Hegde, (2008) 4 SCC 54, has held that the accused can discharge the burden of presumption U/s 118 and U/s 139 of the NI Act by raising a probable defence on the strength of 'preponderance Case No. : 5176/14 Raj Kumar Sharma Vs. Pawan Kumar Page No. 8/12 of probabilities'.
15. In RANGAPPA Versus SRI MOHAN AIR 2010 SC 1898 the Hon'ble Supreme Court has held that it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of 'preponderance of probabilities'. The accused can rely on the materials submitted by the complainant in order to raise such a defence.


16. From the reading of the above said provisions and the judgments the position of law which emerges is that once execution of the promissory note is admitted, the presumption under Section 118(a) and Section 139 of the NI Act would arise that it is supported by a consideration. Such presumptions are rebuttable. The accused can prove the nonexistence of a consideration by raising a probable defence. If the accused discharges the initial onus of proof by showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the Complainant who will be obliged to prove it as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument. The burden upon the accused of proving the non existence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he/she relies. In case, where the accused fails to discharge the initial onus of proof by showing the nonexistence of the consideration, the complainant would invariably be held entitled to the benefit of presumption arising under Section 118(a) and Section 139 of the NI Act in his favour.


17. Now coming back to the present complaint case. In the instant case from the perusal of the entire evidence lead by both the parties it is revealed that both the parties have admitted that they are relatives. However the accused has denied that he has taken any loan from the complainant and has also stated that he has given the cheque in question Ex. CW1/1 to the complainant during his business transaction with the complainant and Case No. : 5176/14 Raj Kumar Sharma Vs. Pawan Kumar Page No. 9/12 not in order to discharge his loan liability as alleged by the complainant. To corroborate his stand the accused has examined himself as DW1 and reiterated the same contentions. The accused has also during cross examination of CW1 (complainant) has placed on record receipts Ex. Ex. CW1/X (Colly.) and Ex. CW1/Y (Colly.) to show that he was having business dealings with the complainant. Interestingly the complainant in the complaint itself has admitted that he was also having business dealings with the accused. Further the complainant during his cross examination as CW1 has also admitted that receipts Ex. CW1/X (Colly.) and Ex. CW1/Y (Colly.) placed on record by the accused has been issued by him but the complainant also stated that the loan transactions and the business transactions are altogether different. Further the complainant has also placed on record the statement of account Ex. CW1/Z maintained by him in regular course of business which also establishes that loan was granted to the accused in July, 2007. The complainant has also placed on record his Income Tax Return Ex. CW1/19 to show his solvency and capacity at the time when loan was granted to the accused. Surprisingly, apart from establishing his business relationship with the complainant which has been admitted by the complainant, the accused has not lead any evidence to


the complainant which has been admitted by the complainant, the accused has not lead any evidence to corroborate his stand. Merely establishing his business relationship with the complainant would not aid the accused in any way as it itself establishes that both the parties are well known to each other and were having regular transactions, and in such proximities loan over and above the business transactions cannot be ruled out.


18. During course of arguments Ld. Counsel for the accused also relied upon the judgment titled as John K Abharam Vs. Simon C. Abraham & Anr. (2014) 2 SCC 236 the said judgment cited by the counsel is also in clear contradiction with the fact of the present complaint case as in the case in hand the complainant has been able to clearly establish when the loan was granted by him to the accused and also that he was having sufficient funds available with him at the time of granting of the loan.


Case No. : 5176/14 Raj Kumar Sharma Vs. Pawan Kumar Page No. 10/12
 19. It was for the accused to prove the circumstances under which the cheque's in question Ex. CW1/1 was issued by him by leading cogent evidence so as to discharge and rebut the presumption raised against him by the Statute U/s 139 and 118 (a) of the NI Act and mere simplicitor denying the allegations would not be at his advantage. The entire evidence favours and supports the stand of the complainant. The accused has not brought any material on record and also no cogent explanations or any probable defence which would rebut the shadow of presumption existing in favour of the Complainant. Therefore, this court do not find any force in the arguments advanced by the learned counsel for the accused that the accused has succeeded in rebutting the presumption under Section 139 of the Act. From the materials brought on record and evidence lead by the complainant it is sufficient to hold that the accused has taken loan from the complainant and has issued the cheque's in question Ex. CW1/1 in discharge of his liability


20. Now coming to the issue that except signatures other particulars in the cheque's in question Ex. CW1/1 has not been filled by the accused. It is trite to say that by putting the name and date there is no material alteration on the cheque U/s 87 of the NI Act as there is no rule of banking business that the name of the payee as well as the amount should be written by the drawer himself, as no law provides that in case of cheque the entire body has to be written by the drawer only. Therefore, once the signature on the cheque in question is admitted as has happened in the case in hand the plea that particulars in the cheque in question has not been filled by the drawer is of no consequence unless some cogent evidence has been lead by the accused that he/she has not expressly or impliedly authorized the payee to fill the particulars therein, which is absenting in the present case. (See Ravi Chopra Vs. State and Another, 2008(2) JCC (NI) 169, Delhi, Jaipal Singh Rana Vs. Swaraj Pal 149 (2008) DLT 682,) Therefore, this defence of the accused also holds no ground.
Case No. : 5176/14 Raj Kumar Sharma Vs. Pawan Kumar Page No. 11/12


21. Considering the evidence on record, It stands duly proved that the accused has miserably failed to rebut the presumptions U/s 118 (a) and section 139 of the NI Act. Accordingly, In view of the facts, evidence lead by both the parties coupled with my discussion above, I hereby hold that the Complainant has been able to prove and substantiate its allegation against the accused and all the ingredients for the offence under section 138 of the NI Act have been proved against the accused. Accordingly, accused Sh. Pawan Kumar S/o Sh. Jagdish Prasad, is hereby convicted for the offence U/s 138 of NI Act.


Copy of this judgment be given to the convict free of cost.

This Judgment contains 12 pages and every Page of this judgment has been signed by me.

Announced in the open Court                                   (RAVINDER SINGH -II
Dated 17.05.2014                                                      MM (NI Act 07)
                                                              DWARKA/NEW DELHI.

Case No. : 5176/14                    Raj Kumar Sharma Vs. Pawan Kumar                                      Page No.  12/12


IN THE COURT OF SHRI SATVIR SINGH LAMBA, MM-01
               ( NEGOTIABLE INSTRUMENTS ACT) WEST DISTRICT,
                         TIS HAZARI COURTS, DELHI

Sh. Aman Vij
Proprietor of M/s Aman Services,
7-8, Mohan Garden,
Main Najafgarh Road,
Uttam Nagar,
New Delhi - 110059.                                            ......Complainant

                                            Vs.

Shri Anand Kumar,
Proprietor of M/s Rahul Trading Company,
B-3, Kushak Road no.2,
Saroop Nagar,
New Delhi - 110042.                                            ........Accused

                                         JUDGMENT
Complainant Case No.                 :            1283/10

Date of institution                  :            22.10.2009

Offence alleged                      :            Under Section 138 NI Act

Plea of the accused                  :            Not pleaded guilty

Final order                          :            Acquittal

Date of Decision                     :            18.02.2014

                                         Brief Facts


Date of Decision                     :            18.02.2014

                                         Brief Facts

1. Brief facts of the case are that the complainant is running the business of electronic trading as well as retailing under the name and style of M/s Aman Services. It is alleged that accused is also engaged in the same trade of electronic goods. It is further alleged that the accused approached the complainant to buy certain electronic goods and that the accused issued Ex.A1 i.e. a cheque no. 686428 dated 27.04.2009 amounting to Rs. 25,750/- drawn on Delhi State Cooperative Bank, Samaypur Badli, Delhi. The complainant presented the cheque in question for encashment through his banker but the same was got dishonored by the bankers of accused with the remarks CC No.1283/1 page no.1/11 "Funds Insufficient" vide returning memo dated 14.09.2009, same is Ex.A. Henceforth, the complainant issued the mandatory notice U/s 138 NI Act dated 23.09.2009 i.e Ex.B and the same was served upon the accused vide postal receipt, AD/U.P.C. and courier i.e. Ex.C and Ex.D.

2. When the accused failed to fulfill the conditions of the said legal notice within 15 days of its presumed service, then the complainant has filed the present complaint case U/s 138 of Negotiable Instrument Act 1881 (hereinafter the Act) against the accused.

 Pre-Trial Procedure


Pre-Trial Procedure

3. After the institution of the present complaint, the complainant adduced his pre summoning evidence U/s 200 Cr. P.C. on which basis the accused was summoned via order dated 16.11.2009 to face trial for the offence U/s 138 NI Act. After the service of the summons, the accused entered his appearance whereupon the provisions of Sec. 207 Cr. P.C. Was also complied.

4. The accused was admitted to bail then notice U/s 251 Cr. P.C. for the offence U/s 138 NI Act was served upon the accused on 03.09.2010 after hearing the contesting parties. Needless to say, the accused pleaded "Not Guilty" and claimed trial.

 Trial

5. In order to substantiate his case, the complainant examined himself as the witness as CW-1 whose contents are a mere repetition of what had already been discussed under the "Brief Facts" and hence are not repeated for the sake of brevity.

6. All the incriminating circumstances, appearing in the evidence against the accused was put in order to unable him to offer his explanation.


7. In his explanation u/sec 313 Cr.P.C r/w sec 281 Cr.P.C, the accused admitted the issuance of the cheque in question to the complainant but explained that CC No.1283/1 page no.2/11 he had already made due payment to the complainant by way of Rs.10,000/- in cash on 27.05.2009 under the due signatures of agent of complainant namely Shri Rajesh and remaining amount was paid through a cheque bearing no. 650948 dated 22.06.2009 for the sum of Rs.15,750/- drawn on Delhi State Cooperative Bank Limited. Accused denied the receiving of legal notice. He lastly stated that he is innocent and is falsely implicated in the present case and the complainant is misusing the cheque in question with malafide intention to gain wrongfully.

8. In order to prove his innocence accused examined Shri Surender, clerk, Delhi State Co-operative Bank Limited, Samaypur, Delhi as DW1 and Shri Mahesh Sharma as DW2. Accused also examined himself as DW3. All the defence witnesses were duly cross examined by the complainant. Thereafter the accused closed his defence evidence vide order dated 14.08.2013 whereupon the trial came to a conclusion and the contesting parties were duly heard.

 Facts in Issue

9. In order to have the positive outcome in his favour, the complainant was required to show that the cheque in question was given by the accused to discharge his liabilities which was dishonoured via returning memo whereafter the accused had also failed to comply with the requirements of the legal notice.

10. On the other hand, the accused was required to show his defence on the scale of preponderance of the probabilities that he is not liable to the amount involved to the complainant.

 Legal Prepositions


Legal Prepositions

11. The presumptions provided U/s 118 NI Act and 139 NI Act would come to the rescue of the complainant once the execution of the cheques in question are proved on record.

12. As per section 118 NI Act, it is to be presumed in favour of the complainant during the trial that the cheques in question were given against CC No.1283/1 page no.3/11 consideration by the accused and that the complainant was the holder of the said cheque in due course. Further as per Sec. 139 NI Act, it is to be presumed in favour of the complainant during the trial that the cheques in question were received by the complainant against a legally enforceable debt or liability (Refer :- "Rangappa Vs. Sri Mohan" SLP (Crl.) 407/06, Dated:- 07.05.2010).

13. It is well settled that both the aforesaid presumptions U/s 118 & 139 NI Act are rebuttable in nature and the onus to rebut the same squarely rests upon the accused.


14. The accused can rebut these presumptions not merely by examining his own witnesses but also through the cross examination of the complainant and his witnesses thereby bringing on record through the entire evidence available on record (inclusive of complainant's evidence and defence evidence, if any), that the complainant was a liar, that their was no existing liabilities between the parties and that the cheques in question were misused. It must be kept in mind that once evidence is brought on record from both sides, it becomes an evidence of the case and court can draw inferences from the said entire evidence either in favour or against any of the parties. Evidence is a complainant's evidence and accused's evidence only for the purposes of identifying it, but once it is adduced in the case, it becomes the evidence of the case and then the same has to be read as a whole. The court can not read the evidence of the complainant only to the extent it favours the complainant and overlook the remaining evidence which supports the accused merely on the ground that it is the complainant's evidence. Similarly, from the evidence adduced by the accused, the court can draw inferences either in favour of the complainant or against the accused. The accused has a right to argue his case even on the basis of the cross examination of the complainant & his witnesses to show to the court that there existed no legally recoverable debt or liability between the parties. In order to rebut the legal presumption in question, it emerges that the accused need not require direct evidence to disprove the existence of consideration.


15. Preponderance of probabilities is the standard of proof upon the accused to rebut the above presumptions, which is not as high as that of the prosecution whereby the accused is only required to show the existence of a CC No.1283/1 page no.4/11 probable defence so as to rebut the above presumptions. If the accused succeeds in raising a probable defence by referring to his own evidence (if any) and from the evidence of the complainant, then the onus would shift on to the complainant, who then would have to show beyond reasonable doubt the existence of consideration/existence of a legally recoverable debt or liability in respect of the cheques in question.

 Appreciation of Evidence

16. The present case is proceeded on case law i.e. Rajesh Aggarwal vs. State & Anr. - MANU/DE/1838/2010, vide which it is held by hon'ble High Court of Delhi that "17. The summary trial procedure to be followed for offences under Section 138 N.I. Act would thus be as under:
 Step I: On the day complaint is presented, if the complaint is accompanied by affidavit of complainant, the concerned MM shall scrutinize the complaint & documents and if commission of offence is made out, take cognizance & direct issuance of summons of accused, against whom case is made out. Step II: If the accused appears, the MM shall ask him to furnish bail bond to ensure his appearance during trial and ask him to take notice under section 251 Cr.P.C. and enter his plea of defence and fix the case for defence evidence, unless an application is made by an accused under section 145(2) of N.I. Act for recalling a witness for cross-examination on plea of defence.


Step III: If there is an application under Section 145(2) of N.I. Act for recalling a witness of complainant, the court shall decide the same, otherwise, it shall proceed to take defence evidence on record and allow cross-examination of defence witnesses by complainant.

 Step IV: To hear arguments of both sides.

 Step V: To pass order/judgment."

 CC No.1283/1 page no.5/11
 17. Hon'ble Delhi High Court, in the above mentioned case, emphasized that once the complainant has brought forward his case by giving his affidavit about the issuance of the cheque, dishonour of cheque, issuance of demand notice etc. he can be cross-examined only if the accused makes an application to the court as to on what point he wants to cross-examine the witnesses and then only the court shall recall the witness by recording reasons there to.

18. In a summary trial, the complainant or his witness cannot be recalled in the court for cross-examination only for the sake of pleasure. In the present complaint case after recording the plea of defence at the time of framing notice, opportunity was given to the accused for filing of the proper application. However, the accused made no application under section 145(2) of the Act for recalling the complainant for cross- examination on his plea of defence. Therefore, there was no reason to recall the complainant or witnesses during summary trial and the evidence already given by the complainant has to be considered sufficient and the matter proceeded accordingly.


19. In order to prove his innocence accused examined Bank official of Delhi State Cooperative Bank, Samay Pur Badli Branch as DW1. DW1 who has brought the summoned record i.e statement of account of Mahesh Sharma i.e Ex.DW1/1. DW1 stated that a cheque bearing no.650948 dated 20.06.2009 for a sum of Rs. 15,750/- was cleared/encashed from SB A/c no.1685 in the account of M/s Aman Services. Report is Ex.DW1/2. DW1 was duly cross examined by the complainant however, nothing material has been come out from his cross examination.


20. Accused examined his brother in law i.e. Shri Mahesh Sharma as DW2. In his examination in chief DW2 stated that he had issued the cheque i.e Ex.DW1/2 i.e. cheque bearing no.650948 dated 20.06.2009 for a sum of Rs.15,750/- drawn on The Delhi State Cooperative Bank, Samaypur Badli Branch, Delhi in favour of complainant on the asking of accused. DW2 further stated that the accused has also told him that he had already made the part payment of Rs. 10,000/- out of total due amount of Rs.25,750/- to the employee of complainant namely Ramesh on 27.05.2009. In his cross examination DW2 admitted that he was told by the accused regarding the said due amount in the first week of June 2009. DW2 further explained that he made the said payment in favour of complainant because the accused was CC No.1283/1 page no.6/11 not having sufficient funds to pay the above said liability. DW2 admitted that no other part amount was paid by the accused in his presence. However, all the suggestions put to him by the counsel for complainant were denied by the DW2.


21. Accused examined himself as DW3 and stated in his examination in chief that he is proprietor of M/s Rahul Trading Company. Accused stated that he had purchased some electronic goods from M/s Aman Services vide book no. 54, bill no. 2903 dated 28.03.2009 i.e. Ex.DW3/1 for an amount of Rs. 57,500/-. Accused further stated that against the said purchase, most of the amount was paid to the complainant in cash and had issued the cheque in question in favour of complainant for the repayment of remaining amount. Accused further stated that he had made payment of said due amount of Rs. 25,750/- by way of part payment of Rs. 10,000/- in cash to the employee of complainant namely Rajesh on 27.05.2009 as per endorsement on the back of above said original bill and same is Ex.DW3/2. Accused further stated that he paid the remaining amount of Rs. 15,750/- to the complainant to his brother in law Mahesh Sharma i.e DW2 vide cheque bearing no.650948 drawn on Delhi Cooperative State Bank for the sum of Rs. 15,750/- and same was encashed by the complainant. In his cross examination accused stated that he used to purchase electronic goods from the complainant as the complainant is a distributor of electronic goods in his area. Accused further explained that he used to made payment for the purchase of goods from the complainant by cheque as well as in cash through his representative who used to visit his retail outlet which is not disputed by the complainant. Accused further explained that he had been given credit limit of about one month to pay the amount accrued upon invoiced and he used to pay the same within the said period by installments. Accused admitted the receiving of legal notice. However, all the suggestions put to him


installments. Accused admitted the receiving of legal notice. However, all the suggestions put to him by the counsel for complainant were denied by the DW3.


22. It is argued by the Ld. counsel for complainant that from evidence on record, the complainant has proved that cheque in question was signed by the accused which was dishonoured vide bank memo and despite the legal notice accused did not make the payment. It is argued that the accused failed to cross examine the complainant, hence, nothing material has come out and the complainant has been able to prove his case. It is further argued that accused has failed to CC No.1283/1 page no.7/11 discharge the burden upon him to rebutt the presumption in favour of the complainant under the Act.

23. Now the question is whether the complainant proved his case, that whether the amount was legally enforceable debt. Offence under Section 138 of the Act is a technical offence and the complainant is only supposed to prove that the cheque issued by the accused was dishonoured, his statement that cheque was issued against liability or debt is sufficient proof of the debt or liability and the onus shifts to the accused to show the circumstances under which the cheque was issued and this could be proved by the accused only by way of cogent evidence.


24. Ld. Counsel for accused argued that the cheque in question was given to the complainant for the payment of remaining amount of Rs. 25,750/- for the purchase of electronic goods from him vide invoice Ex.DW3/1. It is further argued that on 27.05.2009 the accused paid part amount of Rs. 10,000/- to his employee namely Rajesh and the remaining amount of Rs. 15,750/- was paid to the accused through cheque Ex.DW1/2 of the DW2. It is further argued that accused has already made the due payment to the complainant and no other amount is legally recoverable from him. It is further argued that there is no legally enforceable liability towards the complainant as alleged in the present case and the cheque in question was misused by the complainant malafidely with intention to harass the accused.

25. 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/evidence on preponderance of probabilities to prove that cheque in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, there is no need 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 is probable has to be brought on record for getting the burden of proof shifted to the complainant.


CC No.1283/1 page no.8/11
 26. From the material on record, it is established that the complainant and accused are known to each other and are having business relations with each other. The signatures on the cheque in question is not disputed by the accused. It is further established on record that the cheque in question issued by the accused got dishonored vide bank memo. It is also established on record that the cheque in question pertains to the account of the accused. The receiving of the legal notice sent by the complainant is admitted by the accused. However, no reply was ever given by the accused to the said legal notice.


27. The plea of defence raised by the accused is that he had issued cheque in question to the complainant for the payment of remaining amount for the purchase of electronic goods vide invoice/bill i.e. Ex.DW3/1. Perusal of the document Ex.DW3/1 reveals that electronic goods worth Rs. 57,500/- was purchased by M/s Rahul Trading Company from M/s Aman Services. Accused is the proprietor of the M/s Rahul Trading Company. Complainant is the proprietor of M/s Aman Services. Further defence of the accused is that he had paid the part amount towards the payment of invoice/bill Ex.DW3/1 and amount of Rs. 25,750/- was due upon him. No doubt the accused has not furnished on record any proof regarding the alleged part payments of the due amount of Rs. 57,500/- upon which the liability remains to the extent of Rs. 25,750/-. Further defence of the accused is that he had repaid the outstanding amount of Rs. 25,750/- to the complainant. For the said outstanding amount, accused has proved that he had paid the part payment of Rs.10,000/- to the employee of the complainant namely Rajesh under his signatures on the back side of the Ex.DW3/1. The said receiving of the said part amount of Rs. 10,000/- is Ex. DW3/2.


28. Through the testimonies of the DW1 and DW2, the accused intends to establish on record that he had repaid the remaining amount of Rs.15,750/- to the complainant by way of cheque of his brother in law i.e. the cheque no. 650948 dated 20.06.2009 drawn on Delhi State Co-operative Bank Ltd., Samaypur Badli, Delhi from SB A/c No. 1685 of Sh. Mahesh Sharma.


29. The testimony of the bank official i.e. DW1 establishes on record that payment of Rs. 15,750/- through the above said cheque has been cleared / encashed CC No.1283/1 page no.9/11 in the account of complainant. The testimony of DW2 i.e. Sh. Mahesh Sharma reveals that he had issued the cheque bearing no. 650948 dated 20.06.2009 drawn on Delhi State Co-operative Bank Ltd., Samaypur Badli, Delhi in favour of the complainant on the asking of accused in lieu of the discharge of the remaining liability of the accused. The complainant has failed to explain the details for which the above said cheque bearing no. 650948 dated 20.06.2009 drawn on Delhi State Co- operative Bank Ltd., Samaypur Badli, Delhi has been encashed in his account. Further the accused has not brought on record any iota of evidence regarding his business dealing or business transaction with accused no.2 at any point of time. Meaning thereby, the clearance / encashment of the payment vide cheque bearing no. 650948 dated 20.06.2009 drawn on Delhi State Co-operative Bank Ltd., Samaypur Badli, Delhi is not regarding any independent transaction but is for the payment of the remaining liability of the accused as per his plea of defence. Therefore, the plea of defence raised by the accused is highly believable.

30. Therefore, I am of the opinion that the alleged issuance of the cheques in question by the accused to the complainant for the alleged transaction is highly improbable and is not acceptable hence, the possibility of misusing of the cheques in question of the accused cannot be ignored. Considering the above said facts of the case, the accused a raises grave doubt on the alleged liability by proving the repayment of the alleged amount of the cheque prior to the dishonor of cheque in question.


31. It is well settled law that in a criminal case, prosecution has to stand upon its own legs and it cannot take the advantage of the fact that accused has not led cogent defence evidence or accused is having a weak defence. The defence raised by the accused along with the evidence placed on record are cogent proof in support of the defence version makes it highly probable that the cheque in question was not issued towards the discharge of liability as alleged by the complainant and at the same time it weakens the foundation fabrics of the present complaint case. The suspicious circumstances rising in the present case will certainly give advantage to the accused. Moreover, the complainant has concealed the material facts from the court and had not come to the court with clean hands and his conduct is not of a prudent man. Hence, in the present case, the accused raises a cogent suspicious CC No.1283/1 page no.10/11 circumstances in the version of the complainant which belies the foundation of the present complaint case and same is sufficient to rebutt the presumption that the cheques in question were not for discharging the legal liability.

 Conclusion

32. I have gone through the entire material on record carefully and heard the arguments advance by the counsel for parties at length. After analyzing the evidence led by the parties, I am of the opinion that accused has been successful in rebutting the presumptions under NI Act by raising cogent suspicion in the version of complainant and on the scale of preponderance of probabilities that the cheques in question may not be given to the complainant as alleged by him.


33. The rebuttal does not have to be conclusively established but such evidence must be adduced before the court in support of the defence that Court must either believe the defence to exist or consider its existence to be reasonably probable. In the present case accused has not only been able to raise a probable defence and adduced sufficient evidence to prove his defence but also been able to succeed in shaking the very foundation of the fabrics of the case of the complainant.

34. Once the accused has discharged his initial burden of proving its defence the onus rebutted back on the complainant. However in the present case, complainant has miserably failed to prove the case beyond reasonable doubt.

35. Therefore, from the above discussions, this court is of considered view that in the circumstances appearing from the record of the case, the accused is entitled to the benefit of doubt. Accordingly, the accused is entitled to be acquitted and hereby stands acquitted of the offence under Section 138 of Negotiable Instrument Act.

Announced in open court on                       SATVIR SINGH LAMBA
18th Day of February, 2014                       MM-01(NI.ACT)WEST/DELHI

                                                             CC No.1283/1 page no.11/11


Case No. : 4339/14 Smt Pushpa vs Smt. Bandana Jha Page 1/11 on 3 May, 2014

IN THE COURT OF SHRI RAVINDER SINGHII
                           METROPOLITAN MAGISTRATE
                           DWARKA COURTS, NEW DELHI

Case No. : 4339/14
Unique Case ID No. : 0240SR0126322013

Smt Pushpa
W/o Sh. Parveen Kumar
R/o Flat No122, Pocket 13, PhaseI
Dwarka, Near Mangla Puri DDA Office
New Delhi110045.                    ...................................Complainant

                                         Versus

Smt. Bandana Jha
W/o Sh. Mihir Kumar Jha
R/o Flat No191, Pocket 13, PhaseI
Dwarka, Near Mangla Puri DDA Office
New Delhi110045.                                 ....................................Accused

Date of Institution:                                                        15.05.2013
Plea of the accused:                                                     Pleaded Not Guilty
Date of Reserving Judgment:                                                 03/05/2014
Sentence or final Order:                                                    Convicted
Date of Judgment:                                                           03/05/2014

                                      JUDGMENT
 BRIEF FACTS AND REASONS FOR DECISION OF THE CASE

1. By way of the present judgment, I shall decide the complaint case U/s 138 Negotiable Instrument Act 1881 (hereinafter Said as NI Act) filed by the complainant Smt Pushpa against the accused Smt. Bandana Jha W/o Sh. Mihir Kumar Jha.
 PROLOGUE (COMPLAINANT'S VERSION)


2. The encapsulated facts as perceptible from the complaint are that the accused being personally known to the complainant had taken personal loan of Rs. 1,20,000/ from the complainant for her personal Case No. : 4339/14 Smt Pushpa Versus Smt. Bandana Jha Page 1/11 needs and the same was granted to the accused by the complainant on the assurance of the husband of the accused. It is further alleged that the said loan was granted by the complainant to the accused in the presence of commonly known persons. It is further alleged that in order to discharge her liability towards the loan amount the accused issued two post dated cheque bearing no. 239303 & 239305 dated 12.03.2013 &. 14.03.2013 respectively amounting to Rs. 60,000/each both drawn on State Bank of Patiala, Defence Colony, Ring Road Branch, in favour of the complainant. It is further alleged that the husband of the accused i.e Mihir Kumar Jha assured the complainant that the said cheques shall be encashed on its presentation without any hindrance. It is further alleged that thereafter complainant presented the aforesaid cheques in question for encashment with its banker Oriental Bank Of Commerce, Palam Branch and the same were dishonoured vide cheque returning memo dated 20.03.2013 both with remarks "Account Closed". It is further alleged that thereafter the complainant has given a legal notice of demand dated 03.04.2013 to the accused which was sent to the accused through Speed post and courier thereby calling upon the accused to make the payment of the cheque amount. It is alleged that the accused has failed to pay any sum in response to the legal notice of demand as a result of which the complainant has filed the present complaint for prosecution of the accused U/s 138 of


of which the complainant has filed the present complaint for prosecution of the accused U/s 138 of the NI Act.


3. After the complaint was filed, the complainant Smt Pushpa led her presummoning evidence by way of an affidavit and after hearing the counsel for the complainant and considering the entire material and documents on record, summons were issued against the accused by the court vide order dated 16.05.2013 for the offence U/s 138 of NI Act. On appearance of the accused a separate notice U/s 251 of the Criminal Procedure Code, 1973 (hereinafter said as the Code) dated 25.07.2013 was given to the accused to which she pleaded not guilty and claimed trial. Thereafter, the accused moved an application under section 145(2) of the NI Act and the said application of the accused was allowed and the Case No. : 4339/14 Smt Pushpa Versus Smt. Bandana Jha Page 2/11 matter was listed for complainant's evidence.
 COMPLAINANT'S EVIDENCE

4. The complainant Smt Pushpa got herself examined as CW1 and adopted her pre summoning evidence affidavit Ex. CW1/A. CW1 also relied upon documents Ex. CW1/1 to Ex. CW1/7. Ex. CW1/1 & Ex. CW1/2 are the original cheque's in question, Ex. CW1/3 is the cheque returning memo, the legal notice of demand dated 03.04.2013 is Ex. CW1/4 and courier receipt and speed post receipt vide which the aforesaid notice was sent is Ex. CW1/5 & Ex. CW1/6 respectively, Ex. CW1/7 is the speed post tracking report.


5. The complainant also examined one Mahender Singh as CW2. CW2 tendered his evidence by way of affidavit Ex. CW2/A. Both CW1 & Ex. CW2 were duly cross examined by Ld. Counsel for the accused. Thereafter, the complainant's evidence was closed at request of the complainant.

 STATEMENT OF ACCUSED U/S 313 OF THE CODE


6. Thereafter the statement of accused was recorded U/s 313 of the Code in which all the incriminating evidence along with exhibited documents were put to the accused Bandana Jha. The accused denied that she knows the complainant and also denied that she has taken personal loan from the complainant to the tune of Rs. 1, 20,000/ from the complainant for her personal need. The accused person denied that the loan was granted to her by the complainant in the presence of Mahender Kumar (CW2) in the month of April, 2011. The accused further denied that CW2 (Mahender Kumar) also gave an amount of Rs. 15,000/ to the complainant for advancing her the entire loan amount of Rs. 1,20,000/. It is further stated by the accused that the cheque's bears her signatures but she denied the contents of the same. The accused further stated that she has given blank cheques to one Parveen Pal who is Case No. : 4339/14 Smt Pushpa Versus Smt. Bandana Jha Page 3/11 the husband of the complainant as she has stood guarantor for one Sindhu Vikas Sahu who has taken loan from Parveen Pal the husband of the complainant. It is further submitted by the accused that she is not aware about the dishonor of the cheque's in question. The accused further denied the receipt of legal demand notice and stated that the present complaint case is a false case and the complainant has deposed against her falsely. The accused further stated that Sandhu Vikas Sahu has repaid the loan to Parveen Pal who is the husband of the complainant in presence of one Shelly and Vinod. It is also stated by the accused that she was made to sign some blank papers by Parveen Pal the husband of the complainant. It


was made to sign some blank papers by Parveen Pal the husband of the complainant. It is also stated by the accused that when she demanded back her security cheques from Parveen Pal the same were not returned by him and she was told to collect the same later on. It is also submitted by the accused that the cheque's in question were given as security cheques and she owes no liability towards the complainant. Thereafter the case was fixed for defence evidence.


DEFENCE EVIDENCE.

7. The accused examined herself as a defence witness DW1. The defence witness DW1was duly cross examined by Ld. Counsel for the complainant. Thereafter defence evidence was closed at request of the accused and the case was listed for final arguments.

 FINAL ARGUMENTS

8. Final arguments were addressed on behalf of both the parties. I have heard Ld. Counsels for both the parties and perused the entire record of the case file Before proceeding further it is imperative for me to go through the relevant provisions of law.

 Section 138 of the Negotiable Instruments Act provides that:
 "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 Case No. : 4339/14 Smt Pushpa Versus Smt. Bandana Jha Page 4/11 any amount of money to another person from out of that account for the discharge, in while or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless


(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
 (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and

 (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.

 Explanation:For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability.

APPRECIATION OF EVIDENCE IN THE LIGHT OF THE INGREDIENTS OF SECTION 138 OF THE NI ACT AND THE DEFENCE RAISED BY THE ACCUSED


9. It is not disputed by the accused that the Cheque's in Question Ex. CW1/1 & Ex. CW1/2 are drawn on the account maintained by her. Signature's on the cheque's in question has also not been disputed by the accused. Further the presentation, dishonor of the Cheque's in question and the cheque returning memo has also not been challenged by the accused. Therefore in view of the evidence on record it stands proved that the cheque's in question Ex. CW1/1 & Ex. CW1/2 were signed by the accused and the same were drawn on account maintained by her. Further it also stands duly proved that the cheque's in question Ex. CW1/1 & Ex. CW1/2 were dishonored vide cheque returning memo Ex. Case No. : 4339/14 Smt Pushpa Versus Smt. Bandana Jha Page 5/11 CW1/3 dated 20.03.2013 both with the reason "Account Closed"
10. From the perusal of the entire evidence it has come to fore that two fold defence has been taken by the accused. Firstly, that she has not been served with the legal demand notice by the complainant. And secondly that the blank signed cheque's in question Ex. CW1/1 & Ex. CW1/2 has been issued by her to the husband of the complainant Parveen Pal as a security when she stood as a guarantor for Sandhu Vikas Sahu who took loan from the husband of the complainant Parveen Pal and not in discharge of her loan liability as alleged by the complainant.


11. Coming to the first line of defence taken by the accused that she has not been served with the legal demand notice from the complainant, it is pertinent to note that the complainant Smt. Pushpa who has examined herself as CW1 has specifically stated in her evidence affidavit Ex. CW1/A that she got issued the legal notice of demand dated 03.04.2013 to the accused which is Ex. CW1/4 and it was sent to the accused by speed post and courier on 05.04.2013 and 08.04.2013 respectively, receipts of which are Ex. CW1/6 & Ex. CW1/5 respectively. The complainant has also tendered the speed post tracking report as Ex. CW1/7.


12. The accused has denied the receipt of legal demand notice both at the time of framing of Notice U/s 251 of the Code and also in his state ment U/s 313 of the Code. I have perused the legal notice of demand. It bears the correct address of the accused and the speed post receipt Ex. CW1/5 issued by the postal authorities in ordinary course is also on record. Further Section 114 Illustration (f ) of Indian Evidence Act, 1872 also raises a rebuttable presumption in favour of the complainant that common course of business has been followed in a particular case, that is to say, when a letter is sent by post by prepaying and properly addressing it, the same is presumed to have been received by the addressee. Further more the speed post tracking report Ex. CW1/7 is also on record by the Case No. : 4339/14 Smt Pushpa Versus Smt. Bandana Jha Page 6/11 complainant which shows the status as 'delivered' and the same has not been disputed by the accused in evidence. Except denial no evidence has been lead by the complainant to corroborate her stand. Therefore, mere denial on the part of the accused at the time of framing of Notice U/s 251of the Code and also in her statement U/s 313 of the Code would not be sufficient to dislodge the burden of presumption casted upon her by Section 114 Illustration (f ) of Indian Evidence Act, 1872. Moreover, sum mons was served upon the accused at the address mentioned in the com pliant and the accused has put his appearance in compliance thereof.


13. In C.C. Alavi Hazi Vs. Palapetty Mohd. & Anr. (2007) 6 Supreme Court case 555, it was held that the course open to the drawer where he claims not to have received the notice sent by post but has received copy of the complaint with the summons is that he can within a 15 days of the receipt of summons make payment of the cheque amount and he then cannot contend that there was no proper service of notice.

14. Therefore, considering the evidence on record I find that the accused has not brought any credible evidence to rebut the presumptions provided in Section 114, Illustration (f ) of the Evidence Act, 1872 and further looking at the mandate given by the H'onble Supreme Court in C.C. Alavi Hazi Vs. Palapetty Mohd. & Anr (Supra), I hold that the legal notice of demand Ex. CW1/4 was duly served upon the accused.

15. Now coming to the second line of defence which has been taken by the accused that she has issued the blank signed cheque's in question Ex. CW1/1 & Ex. CW1/2 to the husband of the complainant Parveen Pal as a security when she stood as a guarantor for Sandhu Vikas Sahu who took loan from the husband of the complainant Parveen Pal and not in discharge of her loan liability as alleged by the complainant.
16. Before I advert to the second line of the defence taken by the accused it is imperative for me to go through the provisions of Sections Case No. : 4339/14 Smt Pushpa Versus Smt. Bandana Jha Page 7/11 118(a) and 139 of the Act which read as under:
 "118. Presumptions as to negotiable instruments.


--Until the contrary is proved, the following pre sumptions shall be made
 (a) of consideration.--that every negotiable instru ment was made or drawn for consideration, and that every such instrument when it has been ac cepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;"

 "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 na ture referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability."

17. The Division bench of Hon'ble Supreme Court in Krishna Janard han Bhat v. Dattatraya G. Hegde, (2008) 4 SCC 54, has held that the ac cused can discharge the burden of presumption U/s 118 and U/s 139 of the NI Act by raising a probable defence on the strength of 'preponder ance of probabilities'.
18. In Rangappa Versus Sri Mohan AIR 2010 SC 1898 the Hon'ble Supreme Court has held that it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of `preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. The accused can rely on the materials submitted by the com plainant in order to raise such a defence and it is conceivable that in some cases the accused may not even adduce evidence of his/her own.


19. From the reading of the above said provisions and the judgments the position of law which emerges is that once execution of the promis sory note is admitted, the presumption under Section 118(a) and Section 139 of the NI Act would arise that it is supported by a consideration. Such a presumption is rebuttable in nature. The accused can prove the non existence of a consideration by raising a probable defence. If the accused Case No. : 4339/14 Smt Pushpa Versus Smt. Bandana Jha Page 8/11 discharges the initial onus of proof by showing that the existence of con sideration was improbable or doubtful or the same was illegal, the onus would shift to the Complainant who will be obliged to prove it as a mat ter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument. The burden upon the accused of proving the nonexistence of the consideration can be either direct or by bringing on record the preponderance of probabilities by ref erence to the circumstances upon which he relies. In case, where the ac cused fails to discharge the initial onus of proof by showing the nonexis tence of the consideration, the complainant would invariably be held en titled to the benefit of presumption arising under Section 118(a) and Sec tion 139 of the NI Act in his favour.


20. Now coming back to the case in hand, in the instant case the complainant has examined herself as CW1 and stated that the accused is known to her and the accused has approached her for grant of the loan, and accordingly a loan of Rs 1,20,000/ was granted to the accused by the complainant and in order to discharge the loan liability the cheque's in question Ex. CW1/1 & Ex. CW1/2 has been issued by the accused. The complainant in support of her claim has also examined one Mahender Singh as CW2. CW2 Mahender Singh in his evidence supported the stand of the complainant and stated that the entire loan transaction between the complainant and the accused has taken place in his presence. CW2 also stated that he has also given Rs. 15,000/ to the complainant at her request as she needed the same for advancing the loan to the accused. The accused has examined herself as DW1 and denied the allegation of the complainant and stated that the blank signed cheque's in question Ex. CW1/1 & Ex. CW1/2 has been issued by her to the husband of the complainant Parveen Pal as a security when she stood as a guarantor for Sandhu Vikas Sahu who took loan from the husband of the complainant Parveen Pal and not in discharge of her outstanding loan liability as alleged by the complainant. Perusal of the entire evidence reveals that except denials and suggestion the accused has not lead any cogent evidence to corroborate her stand and dent the stand of the Case No. : 4339/14 Smt Pushpa Versus Smt. Bandana Jha Page 9/11 complainant. Further it is also surprising to see that the accused has not even examined the said Sandhu Vikas Sahu in her defence for whom she has purportedly issued the cheque's in


Sandhu Vikas Sahu in her defence for whom she has purportedly issued the cheque's in question Ex. CW1/1 & Ex. CW1/2 to the husband of the complainant. It is trite to say that mere denial on the part of the accused and putting suggestions to the complainant's witness and giving explanations without leading any defence to corroborate her stand would not absolve her from any liability. It was for the accused to prove the circumstances under which the cheque's in question Ex. CW1/1 & Ex. CW1/2 were issued by her by leading cogent evidence so as to discharge and rebut the presumption raised against her by the Statute U/s 139 and 118 (a) of the NI Act and mere simplicitor denying the allegations would not be at her advantage. The accused has not brought any material on record and also no cogent explanations or any probable defence which would rebut the shadow of presumption existing in favour of the Complainant. Therefore, this court do not find any force in the arguments advanced by the learned counsel for the accused that she has succeeded in rebutting the presumption under Section 139 of the Act.


21. From the materials brought on record and evidence lead by the complainant it is sufficient to hold that the accused has taken loan from the complainant and has issued the cheque's in question Ex. CW1/1 & Ex. CW1/2 in discharge of her liability.


22. Now coming to the issue that except signatures other particulars in the cheque's in question Ex. CW1/1 & Ex. CW1/2 has not been filled by the accused, for this defence also except arguments, denials and sugges tions accused has not brought any evidence on record to support her stand i.e. except signatures she has not filled the other particulars in the cheque's in question. Furthermore even believing the stand of accused to be correct, still there is also no evidence on record to show that she has not even authorized the complainant to fill the said particulars. More so it is trite to say that by putting the name and date there is no material Case No. : 4339/14 Smt Pushpa Versus Smt. Bandana Jha Page 10/11 alteration on the cheque U/s 87 of the NI Act as there is no rule of banking business that the name of the payee as well as the amount should be written by the drawer himself, as no law provides that in case of cheque the entire body has to be written by the drawer only. Therefore, once the signature on the cheque in question is admitted as has hap pened in the case in hand the plea that particulars in the cheque in ques tion has not been filled by the drawer is of no consequence unless some cogent evidence has been lead by the accused that he/she has not ex pressly or impliedly authorized the payee to fill the particulars therein. (See Ravi Chopra Vs. State and Another, 2008(2) JCC (NI) 169, Delhi, Jaipal Singh Rana Vs. Swaraj Pal 149 (2008) DLT 682,) Therefore, this defence of the accused also holds no ground.


23. Considering the evidence on record, It stands duly proved that the accused has miserably failed to rebut the presumptions U/s 118 (a) and section 139 of the NI Act. Furthermore, accused has also failed to prove that she has made payment to the complainant within 15 days from the receipt of the legal demand notice.


24. In view of the aforesaid discussion, I hereby hold that the complainant has proved and substantiated its allegation against the accused and all the ingredients of Section 138 of NI Act also stands proved against the accused. Accordingly, Smt. Bandana Jha W/o Sh. Mihir Kumar Jha is hereby convicted of the offence u/s 138 NI Act.

This judgment contains 11 pages. Every Page of this judgment has been signed by me Copy of this judgment be given to the convict free of cost.

Announced in the open Court                       (RAVINDER SINGH II)
Dated 03.05.2014                                      MM (NI Act 07)
                                                   DWARKA/NEW DELHI.

Case No. : 4339/14             Smt Pushpa Versus Smt. Bandana Jha                       Page 11/11


Cc No.6223/10 Sbl (P) Ltd vs . Chaudhary Homeo Pharmacy Page ... on 18 December, 2013

CC No.6223/10   SBL (P) Ltd  Vs.  Chaudhary Homeo Pharmacy  Page no. 1 of  Pages 14

      IN THE COURT OF SH. GAJENDER SINGH NAGAR
 METROPOLITAN MAGISTRATE, KKD, EAST, NEW DELHI

 Complaint No. 6223/10
 Unique ID No. 02402R0123382010
 PS. Vivek Vihar

 M/s SBL (P) Ltd
 through its Authorized Representative
 Sh. D.C. Varshney,
 S/o Late Sh. J.L. Varshney,
 Office at 2 Commercial Complex,
 Shreshtha Vihar, Delhi92               ......... Complainant.

                        Versus
 1. Choudhary Homeso Pharmacy
 2. Sunil Kumar,
 C394 Mohan Gali, Nanak Chand Basti,
 Kotla Mubarakpur
 Delhi110003                            .........  Accused.

COMPLAINT U/s 138 OF THE NEGOTIABLE INSTRUMENTS ACT

 Offence complained of                                   :       U/s 138 N.I. Act

 Date of commission of offence                           :       09.04.2010

 Plea of Accused                                         :       Not guilty

 Complaint filed on                                      :       03.05.2010

 Final Arguments heard & Concluded on    : 07.12.2013

 Date of decision of the case                            :       18.12.2013

 Final order                                             :       Acquittal
     CC No.6223/10   SBL (P) Ltd  Vs.  Chaudhary Homeo Pharmacy  Page no. 2 of  Pages 14

BRIEF FACTS AND REASONS FOR DECISION OF THE CASE


BRIEF FACTS AND REASONS FOR DECISION OF THE CASE

1.  By way of the present judgment, this court shall decide the

complaint   case   U/s   138   Negotiable   Instrument   Act   1881   (as

amended   up   to   date)   filed   by   the   complainant   SBL   (P)   Ltd

through   its   AR   Sh.   D.C.   Varshney,   against   the   accused   M/s

Chaudhary Homeo Pharmacy and its proprietor Sunil Kumar.

2. The prosecution story in brief necessary for the disposal of the

present case is that,  complainant is a private limited company

incorporated under the Indian Laws and carries on the business

inter alia, of preparation, production, manufacture, supply and

sale of Herbal / Homeopathic Medicines/ goods and the present

case has been filed by the company through its AR. The accused

has placed the orders for the purchase of herbal / homeopathic

medicines / goods from the complainant and in terms of their

business   transaction   as   on   02.03.2010   the   accused   firm   was

liable   to   pay   Rs.82,057.34   to   the   complainant   against   the

purchases. The accused firm was also liable to pay interest on

the due amount at the rate of 15% per annum from 02.03.2010

to onwards till the date of realization of the amount with up to

date interest. To discharge the liability of Rs. 82,057.34 towards

the   complainant   company   the   accused   issued   a   post   dated


the   complainant   company   the   accused   issued   a   post   dated

cheque bearing no.004661 dated 02.03.2010 for the sum of Rs.

82,057.34   drawn   on  Canara   Bank,  South  Extention  branch  in

favour of  the complainant but on presentation the said cheque

was returned back dishonored with the remark "INSUFFICIENT
      CC No.6223/10   SBL (P) Ltd  Vs.  Chaudhary Homeo Pharmacy  Page no. 3 of  Pages 14

FUND"   vide   dishonour   memos   dated   06.03.2010.   Thereafter   a

legal  notice  was   sent  to  the  accused  on  23.03.2010  by  way  of

regd   AD   and   UPC.   It   is   further   alleged   that   despite   service   of

legal   notice   accused   has   not   paid   the   cheque   amount   to   the

complainant till the filling of the case.

3.        After   the   complaint   was   filed,   summons   were   issued

against the accused vide order dated 14.05.2010 for the offence

U/s 138 Negotiable Instrument Act 1881. On appearance of the

accused   notice U/s 251 Cr.P.C. Dated 10.08.2011  was framed

upon  the   accused  to   which  he  pleaded  not  guilty  and   claimed

trial.

4.        In order to prove the case, the AR of the complainant Sh.


4.        In order to prove the case, the AR of the complainant Sh.

D.C.   Varshney   examined   himself   as  CW1  and   reiterated   the

contents of the complaint on oath before this court and filed an

affidavit in evidence.   He also exhibited the board resolution as

Ex. CW1/1, certificate of incorporation as Ex. CW1/2, Copies of

memorandum and article of association as Ex. CW1/3, Original

invoice   /   bills   are  Ex.   CW1/4,   Ex.   CW1/5,   Ex.   CW1/6,  Ex.

CW1/7, Ex. CW1/8, Ex. CW1/9, Ex. CW1/10 & Ex. CW1/11,

original cheque bearing No. 004661 as Ex. CW1/12, the cheque

returning   memo   as  Ex.   CW1/13,   the   legal   notice   of   demand

dated   23.03.2010   as  Ex.   CW1/14,  The   original   receipts   of

registered post as Ex. CW1/15 & U.P.C. as Ex. CW1/16, the net

tracking report as Ex. CW1/17A, Ex. CW1/17B, Ex. CW1/17C
      CC No.6223/10   SBL (P) Ltd  Vs.  Chaudhary Homeo Pharmacy  Page no. 4 of  Pages 14

& Ex. CW1/17D, Returned AD as Ex. CW1/18A, Ex. CW1/18B,


Ex. CW1/18C & Ex. CW1/18D. During the cross examination of

CW1 the witness also exhibited trade policy of the complainant

company as  Ex. CW1/25  ( no document has been exhibited at

serial no. Ex. CW1/19 to Ex. CW1/24), copy of minutes of board

meeting   as  Ex.   CW1/26(OSR).   Thereafter,   the   complainant

evidence was closed at request.

5.    After   that   on   03.11.2012   the   statement   of   accused   was

recorded U/s 313 Cr.P.C in which all the incriminating evidence

along with exhibited documents were put to the accused. In his

statement it is submitted by the accused that he had made bill to

bill   payment   to   the   complainant   company   and   he   does   not

remember   what   was   outstanding   on   him   but   even   that

outstanding   was   covered   by   the   bonus   schemes   and   other

schemes floated by the complainant company, hence, he was not

liable   to   pay   anything   to   the   complainant.   The   cheque   in

question was given as security to the complainant company in

blank signed condition. At the time of handing over this cheque

he had also taken receiving from the official of the complainant

company   stating   that   the   cheque   in   question   was   given   as

security along with one another blank signed cheque bearing no.

004662  against  which   a   connected  case   has   been  filed   by  the


same   company  in  the  name   SBL   Industries  (P)  Ltd.  Thereafter

the case was fixed for Defence evidence. The accused examined

himself as  DW1  and retreated the defence as stated by him in
       CC No.6223/10   SBL (P) Ltd  Vs.  Chaudhary Homeo Pharmacy  Page no. 5 of  Pages 14

his statement U/s 313 Cr. PC, and submitted that in the year

200506 MR of the company had asked him to give two blank

signed security cheques for providing credit facility, that MR had

also   given   acknowledgment   of   taking   those   cheques   which   is

exhibited as  Ex. DW1/1  (earlier marked as Mark X1) (Original

in   CC   no.   6222/10   copy   exhibited   in   CC   No.   6223/10).   It   is

further submitted by him that the series from which cheque in

question has been issued was utilized by him in the year 2006

itself. He filed his statement of bank account on record as  Ex.

DW1/2, Ex. DW1/3 & Ex. DW1/4. He had also filed on record

photocopy of a letter dated 26.12.2009 sent by SBL (P) Ltd to the

accused   which   is   marked   as   Mark   CW1/D1.   Sh.   R.P.   Singh,

official   Canara   Bank   examined   as   DW2.   Who   exhibited   bank

statement of the accused as  Ex. DW2/A. No other witness was


statement of the accused as  Ex. DW2/A. No other witness was

examined and Defence Evidence was closed and the matter was

fixed for final arguments.

6.     I have heard Ld. counsels and perused the entire record of

the case file and the evidence on record. Both the counsel have

referred   to   a   number   of   cases,   I   have   discussed   them   at   the

relevant place.

7.     Before   proceeding   further   let   us   go   through   the   relevant

provisions of law.   The main ingredient of  Section 138 of the

Negotiable Instruments Act are as follows:

     (a) The accused issued a cheque on an account maintained by

        him with a bank.
       CC No.6223/10   SBL (P) Ltd  Vs.  Chaudhary Homeo Pharmacy  Page no. 6 of  Pages 14

     (b) The said cheque has been issued in discharge of any legal

        debt or other liability.

     (c) The   cheque   has   been   presented   to   the   bank   within   the

        period of six months from the date of the cheque or within

        the period of its validity.

     (d) When the aforesaid cheque was presented for encashment,

        the same was returned unpaid/ dishonoured.

     (e) The Payee of the cheque issued a legal notice of demand

        within 30 days from the receipt of information by him from

        the Bank regarding the return of the  cheque.

     (f) The   Drawer   of   the   cheque   failed   to   make   the   payment


within 15 days of the receipt of the aforesaid legal notice of

        demand.

        If the aforesaid ingredients are satisfied then the drawer of

the   cheque   shall   be   deemed   to   have   committed   an   offence

punishable u/s 138 Negotiable Instruments Act.

8.      Now let us deal with the each ingredient of the section 138

of Negotiable Instruments Act to see whether the case against the

accused has been proved or not.

WHETHER THE CHEQUE IN QUESTION HAS BEEN ISSUED IN

DISCHARGE OF ANY LEGAL DEBT OR OTHER LIABILITY:

9.      It is submitted by the CW1 that the accused has issued

the cheque in question to discharge his liability. However, it is

submitted by the accused that the cheque was issued as security

without   filling   in   the   amount   and   date,   however,   the   name   of
       CC No.6223/10   SBL (P) Ltd  Vs.  Chaudhary Homeo Pharmacy  Page no. 7 of  Pages 14

payee on the cheque is SBL (P) Ltd and signature on the cheque

are admitted by the accused to be his own, hence, prima facie it

is   established   that   cheque   was   issued   in   the   name   of

complainant.

10.    At this  stage  let us go  through the  relevant  provisions  of

law.   There  is  a  presumption  in   favour  of   the   complainant  u/s

118 (a) Negotiable Instruments Act  that until the contrary is

proved, it will be presumed that every negotiable instrument was


proved, it will be presumed that every negotiable instrument was

drawn for consideration and every such instrument when it has

been accepted, endorsed, negotiated or transferred was accepted,

endorsed, negotiated or transferred for consideration.

11.    Further Section 139 of the Negotiable Instruments Act,

1881 provides that it shall be presumed until the contrary

is proved that the holder of the cheque received the cheque

of the nature referred in the Section 138 for the discharge

in whole or in part of his debt or liability.

12.    Now it will have to be examined whether the accused has

rebutted   the   presumption   as   contemplated   by   Section   118   (b)

and Section 139 of Negotiable Instruments Act.

13.    It has been observed by the Hon'ble High Court of Delhi in

V.S. Yadav    Vs.   Reena 172(2010) DLT 561  that the offence

u/s 138 NI Act is a technical offence and the complainant is only


u/s 138 NI Act is a technical offence and the complainant is only

supposed   to   prove   that   the   cheques   issued  by   the   respondent were dishonored, his statement that cheques were issued against liability or debt is sufficient proof of the debt or liability and the CC No.6223/10 SBL (P) Ltd Vs. Chaudhary Homeo Pharmacy Page no. 8 of Pages 14 onus shifts to the respondent / accused to show the circumstances under which the cheques came to be issued and this could be proved by the respondent only by way of evidence and not by leading no evidence.
14. Therefore after the establishment of the fact that the cheque was issued by the accused and specific statement of the complainant as stated above regarding liability of the accused the burden to rebut the presumption shifted to the accused. It is established principle of law that presumption of law as raised Under sections 138 & 118 of the N.I. Act can be rebutted only by cogent evidence. In Kumar Exports V. Sharma Carpets (2009) 2 SCC 513 it was held by Hon'ble Supreme Court that:

 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 nonexistence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. CC No.6223/10 SBL (P) Ltd Vs. Chaudhary Homeo Pharmacy Page no. 9 of Pages 14


15. In the present matter the following circumstances shows that the defence of the accused is true one:


i) The accused has submitted that in the year 2005 or 2006 he was made to handover two undated and unamounted security cheques to the SBL PVT LTD. It is accepted by CW1 that there was an employee of the complainant company namely Mr. R. Chandan who was head of the marketing department . It is also accepted by CW1 that Mr. R. Chandan was dealing with the accused company. CW1 had submitted, " I do not know that whether Mr. R. Chandan has collected the subject cheques in question from the accused as security". Thus CW1 has not specifically denied that the cheque in question might have been collected by Mr. R. Chandan as security. When a letter dated 31.10.2006 written by Mr. R. Chandan addressed to accused firm was shown to this witness it is submitted by him that he does not identify signatures of Mr. R. Chandan but he accepted that the letter dated October 31, 2006 is on their companies letter head. This document was earlier marked as Mark X1, however, later on the same was exhibited in the examination of the accused as DW1/1. This letter inspire confidence of this Court as a genuine one as the same is admittedly on the letter head of SBL Pvt Ltd addressed to Chaudhary Homeo Pharmacy and has been produced in court by the accused who is proprietor of Chaudhary Homeo Pharmacy i.e. addressee of the letter, signature of Mr. R. Chandan on this letter are apparently similar to his signature printed on the first page of Ex. CW1/25 i.e. the CC No.6223/10 SBL (P) Ltd Vs. Chaudhary Homeo Pharmacy Page no. 10 of Pages 14 trade policy of SBL PVT LTD. All these things made this letter a reliable


Pages 14 trade policy of SBL PVT LTD. All these things made this letter a reliable document. It is written in the letter, " we thankfully acknowledge receipt of your letter dated 30.10.2006 wherein you have sent two undated blank cheques no. 004661 & 004662 of Canara Bank South Ext. Branch, Delhi branch as security against default of payment terms against 45 day's credit." Thus this document clearly proves that the cheque in question along with another cheque bearing no. 004662 were given by the accused to SBL Pvt Ltd and that too for the purpose of security only in the year 2006.


ii) The accused has deposed U/s 315 Cr. PC that the cheque in question was given by him in the year 2006, however, it is submitted by CW1 that the cheque in question was given 23 days prior to the date of the cheque (date of the cheque is 02.03.2010). To prove his point accused has filed on record his statement of bank account which were exhibited as Ex. DW1/2, Ex. DW1/3 & Ex. DW1/4 and to further support his defence he called bank witness with his account statement. Who exhibited his bank account statement as Ex. DW2/A. The bank account statements (account no. GEGA000073419, M/s Chaudhary Homeo Pharmacy, Canara Bank, South Ex. Branch) of the accused exhibited on record show that the cheques of the same series i.e 0046.... were presented in his account as follows, cheque bearing no. 004603 was presented in his account for encashment on 05.10.2006, 004601 & 004611 on 12.10.2006, 004605 on 13.10.2006, 004607 on 16.10.2006, 004651 on CC No.6223/10 SBL (P) Ltd Vs. Chaudhary Homeo Pharmacy Page no. 11 of Pages 14 17.10.2006, 004628 on 18.10.2006, 004650 on 19.10.2006, 004609 on 26.10.2006, 004658, 004625 & 004610 on 28.10.2006, cheque no. 004660 on 03.11.2006, 004633 on 07.11.2006, 004670 on


004633 on 07.11.2006, 004670 on 08.11.2006, 004631 on 10.11.2006, 004634 on 10.11.2006, 004635 on 11.11.2006, 004655 on 14.11.2006, 004700 on 14.11.2006, 004632 on 15.11.2006, 004616 on 15.11.2006, 004618 on 20.11.2006, 004657 on 22.11.2006, 004619 on 22.11.2006, 004620 on 23.11.2006, 004638 on 23.11.2006, 004636 on 23.11.2006, 004659 on 23.11.2006, 004621 on 24.11.2006, 004669 on 25.11.2006, 004637, 004639 & 004623 on 28.11.2006, 004641, 004666 on 01.12.2006, 004671 on 11.12.2006, 004672 on 12.12.2006, 004673 on 15.12.2006, 004676 & 004677 on 19.12.2006, i.e the cheque of the same series as cheque in question were mainly utilized during the last three months of the year 2006. Further statement of the bank account (account no. 0267261073419, Chaudhary Homeo Pharmacy, Canara Bank South Ex. Branch) of the accused brought by the banker shows that the cheques of the series 0046.... were not utilized / presented in the account of the accused from


of the series 0046.... were not utilized / presented in the account of the accused from 09.04.2007 till 21.01.2010. Thus it is proved that cheque of the series 0046.... were utilized by the accused in the year 2006 only. Hence, the version of the accused that the cheque in question along with cheque bearing no. 004662 was given as security in the year 2006 appears to be more reliable as cheques of the same series were utilized during that period only.