BRIEF STATEMENT OF REASONS FOR THE DECISION FACTUAL MATRIX

1. The present complaint has been filed by the complainant against the accused under section 138 Negotiable Instruments Act, 1881 (hereinafter " NI Act ").

2. Briefly stated, the case of the complainant is that accused and complainant had cordial relations with each other and the accused approached him for a personal Digitally signed by KATYAYINI CC No. 13254/18 Sanjay Sharma v. Rahul Sharma Page 1 of 14 KATYAYINI SHARMA SHARMA KANDWAL KANDWAL Date:

3. In order to support his case, the complainant was examined as CW-1 and tendered his affidavit as Ex. CW 1/A into evidence wherein averments made in the complaint were reiterated. Bank witness CW-2 Mohit Mishra was also examined on behalf of the complainant. Complainant also placed reliance on the following documents in support of his case:

4. Upon service of summons, the accused entered an appearance and notice of accusation under Section 251 , Code of Criminal Procedure, 1973 (hereinafter referred to as " CrPC ") was served upon the accused on 17.03.2021 to which he pleaded not guilty and claimed trial and his plea of defence was recorded. The plea of defence taken by the accused was as follows:

5. He further stated that he had outstanding liability of only Rs. 3,00,000/- towards the complainant. Accused was granted an opportunity to cross examine the complainant vide order dated 17.03.2021.

6. After closing the complainant evidence on 11.04.2022, statement of accused under section 313 CrPC was recorded on 10.10.2022 and 24.11.2023 wherein the incriminating evidence were put to the accused. The accused reiterated his defence. He submitted that he never sought loan of Rs. 75,00,000/- from the complainant and admitted that he only took a loan of Rs.3.1 lakhs from him in 3 instalments in 2017 which has not been repaid till date. He also stated that he did not issue the cheque in question to the complainant and that the same had been misplaced from his shop. He further stated that the complainant had monetary dealings with his cousin Pankaj Sharma who owes Rs.55 lakhs to Rs.60 lakhs to the complainant and that he was approached by the complainant regarding the whereabouts of his cousin but was unable to trace him despite best efforts. It was averred that the cheque in question has been misused by the complainant to realise the amount owed from his cousin and that he does not owe anything except Rs.3.1 lakhs to the complainant.

7. Matter was thereafter fixed for defence evidence. Accused in his defence presented himself as witness DW-1. Vide order dated 17.05.2023, the defence evidence was closed and the matter was listed for final arguments.

8. During the course of arguments, Ld. Counsel for complainant argued:

9. Per contra, Ld. Counsel for accused argued:

10. Before delving into the facts of the case, it is apposite to bear in mind the law with respect to section 138 , NI Act. In order to prove his case under section 138 NI Act, the complainant must prove the following facts-

11. Further, the NI Act raises two important legal presumptions in favour of the holder of the cheque as soon as the execution of cheque is proved. As per Section 118(a) NI Act, it shall be presumed that every negotiable instrument was 'made, accepted, transferred, negotiated or endorsed for consideration, unless the contrary is proved'. Furthermore, as per section 139 NI Act, it shall be presumed that 'the holder of cheque, received the cheque for the discharge, in whole or in part, of any debt or other liability, unless the contrary is proved.'

12. The Hon'ble Supreme Court of India in Basalingappa v. Mudibasappa , (2019) 5 SCC 418 : 2019 SCC OnLine SC 491 at page 422 held as follows:

ANALYSIS/REASONING

13. At the very outset, it is pertinent to note that in the present matter the cheque in question i.e. Ex.CW1/1 was issued on 10.04.2018 and was dishonored vide return Digitally signed by KATYAYINI KATYAYINI SHARMA KANDWAL SHARMA CC No. 13254/18 Sanjay Sharma v. Rahul Sharma Page 7 of 14 Date:

14. The case of the complainant is that the accused took a loan of Rs. 57,00,000/- from him and issued the cheque in question for part payment of the loan which got dishonored upon presentation. During the course of trial, the accused has admitted his signatures over the cheque in question as well as the receipt of legal demand notice. As discussed previously, the legal presumption u/s 118 (a) / 139 of the NI Act are attracted to the present case and the burden of raising a probable defence, rests upon the accused.

15. Now it is to be examined whether the accused has been able to rebut the statutory presumptions. It is settled law that the burden to disprove the existence of legal liability is upon the accused and the presumption has to be rebutted by leading cogent evidence, on a preponderance of probabilities.

16. The Hon'ble Supreme Court in Kumar Carpets v. Sharma Exports (2009) 2 SCC 513 held as follows:

17. In the opinion of this Court, the complainant has presented a case better than the accused and the presumption in favour of the complainant u/s 118 (a) / 139 of the NI Act does not stand rebutted for the following reasons:

However, no evidence has been led by him in support of his submission that the loan amount was only of Rs. 3,10,000/-. Further, accused in his testimony stated that Ex. CW1/6 does not bear his signature and was not executed by him. However, when confronted with it during his cross- examination, accused admitted his photograph at point-X1, photograph of complainant at point-X2 and also admitted his signatures at points A, B, C and D on the aforesaid document. Thereafter, he stated that the complainant had obtained his signatures on one stamp paper and three blank papers and that though he was aware that the stamp paper was purchased to execute an agreement between him and the complainant, he was unaware of the purpose of the agreement and therefore the contents have been filled without his consent and knowledge. As per section 103 Digitally signed KATYAYINI by KATYAYINI SHARMA SHARMA KANDWAL KANDWAL Date: 2023.12.02 15:37:07 +0530 CC No. 13254/18 Sanjay Sharma v. Rahul Sharma Page 9 of 14 of the Indian Evidence Act , the burden of proof lies on the person who alleges some new facts. The accused has admitted his signatures on Ex. CW 1/6. The fact that the papers were blank at the time when they were signed is a special fact, the burden of proving which lies on the party that pleads it which in the present case is the accused. No independent evidence has been led by the accused in support of his argument that his signatures were obtained on blank papers later used to create agreement Ex. CW1/6. The accused could have examined witnesses to the agreement in support of his submission but no such evidence was led.

(ii) Moreover, any reasonable person who alleges that a document was fraudulently manufactured by a party after obtaining his signatures on blank documents is at the very least expected to approach some authority or the court to lodge a complaint against such an act. A reasonable man is also expected to take some steps to get such agreement cancelled or nullified. Further, the accused could have given a notice to the complainant regarding misuse of the blank papers for purpose other than what it was intended for. In the present case, the accused has not placed on record anything to show any steps taken by him with respect to cancellation/nullification of the agreement nor has any notice/complaint regarding such fact been placed on record. Thus, in light of his admission that the agreement Ex. CW1/6 was signed by him, unless the accused could have buttressed his contention that its execution cannot be favourably considered as his signatures were obtained on blank papers, the submission of accused appear to be mere bald assertions not sufficient to shift the burden of proof from the accused to the complainant and do not inspire confidence of this Court.

(iii) Another contention of accused is that some of his cheques including the cheque in question were kept in his shop and misplaced from there. A reasonable man is expected to lodge a police complaint after cheques are misplaced/lost from his office. The accused has, however, failed to place on record any police complaint that he may have lodged after misplacing Digitally signed KATYAYINI by KATYAYINI SHARMA SHARMA KANDWAL KANDWAL Date: 2023.12.02 15:37:28 +0530 CC No. 13254/18 Sanjay Sharma v. Rahul Sharma Page 10 of 14 his cheques from his shop. Further, the accused has been unable to place on record any cogent evidence to show the steps taken by him after the cheques were allegedly misplaced by him and misused by the complainant. For instance, a reasonable man would issue "stop payment"

During his cross-examination, accused was confronted with Ex. DW1/C1, DW1/C2 and DW1/C3 wherein the accused clearly admitted to various contradictions in his testimony in the present case. When confronted with Ex. DW1/C1, the accused admitted that in CS No. 1221/2018, he admitted that that he handed over seven blank cheques, certain signed blank papers and some other documents to the complainant. Immediately after the statement, he stated that he had not given seven cheques to the complainant at any point of time. Similarly, when confronted with Ex. DW 1/C2, the contradiction regarding the blank pages in Ex. CW 1/6 was shown to the accused to which she stated that he does not remember the statement made by him in CS No. 1221/2018. Further, the accused admitted that several cases including the present case were compromised for an amount of Rs. 43 lakhs on 26.08.2019 when referred to mediation Digitally signed KATYAYINI by KATYAYINI SHARMA SHARMA KANDWAL KANDWAL Date: 2023.12.02 15:37:59 +0530 CC No. 13254/18 Sanjay Sharma v. Rahul Sharma Page 11 of 14 in CC No. 473/19, but stated that he entered into the settlement at the advice of certain persons as he was scared of getting caught in a web of litigation and that he later refused to pay the amount to complainant at he did not have any outstanding liability towards the complainant. However, the accused has failed to show any steps taken by him to get the mediation settlement agreement nullified which would have been the step taken by a reasonable man when he enters into a settlement unknowingly or under any misrepresentation. The accused failed to give any satisfactory explanation regarding the contradictions in his statements in various cases pending between him and the complainant.

(v) Another defence taken by accused as that the complainant has failed to show that he had the financial capacity to advance loan of Rs.57 lakhs. However, the accused failed to bring on record any credible evidence to challenge the financial capacity of the complainant. In fact, he himself stated that he has taken a loan from the complainant but that the loan was only of Rs. 3,10,000/-. The complainant is not obligated to prove his financial capacity in the first place. It is only after the accused has been able to raise doubts on his financial capacity that the complainant is expected to lead specific and independent evidence in support of the same. In the absence of any credible/independent evidence or circumstances, which show that it was not probable that the complainant could have advanced the loan as being claimed by him, merely because certain questions have been asked on his financial capacity cannot entitle the accused to benefit of doubt. Hon'ble Delhi High Court in Sheela Sharma v. Mahendra Pal 2016 SCC OnLine Del 4696 held that:

18. In view of the foregoing discussion, this court holds that complainant has established his case beyond reasonable doubt by proving all the ingredients under Section 138 NI Act by leading cogent evidence and the accused has failed to raise a probable defence.

19. Accordingly, accused Rahul Sharma is hereby convicted for offence punishable under Section 138 NI Act qua the cheque in question in the present case.

20. Let the convict be heard separately on quantum of sentence. Copy of this judgment be given free of cost to the convict.

21. A copy of this judgment be placed on the official website of the District Courts.

(THIS JUDGMENT CONTAINS 14 PAGES AND EACH PAGE IS SIGNED BY ME) CC No. 13254/18 Sanjay Sharma v. Rahul Sharma Page 14 of 14