The Case
Court was dealing with a Trial where a Cheque for Rs. 5,00,000 was dishonoured for want of Funds. Accused drawer of the Cheque admitted signatures but denied the Complainant's capacity to pay cash Loan and sought dismissal of Complaint on plea of coercion.
Complainant's Case
Complaint was filed by complainant against the accused on account of dishonour of a cheque bearing for a sum of Rs. 5,00,000/- drawn on Bank of India, Delhi in favour of the complainant allegedly in discharge of his liability towards the complainant against a personal loan of Rs.5,00,000/- received by the accused from the complainant in cash for a period of 15 months for upgradation of his sweet shop.
It is the case of complainant that the accused and his brother, being the friends of her husband, were known to the complainant and had approached the complainant for a personal loan of Rs. 5,00,000/- for a period of 15 months for upgradation of his sweet shop. The complainant has accordingly given a loan of Rs. 5,00,000/- in cash to the accused vide a written loan agreement partially after withdrawal from her bank account and partially after arranging from her friends/relatives. It is further her case that when, she had demanded the return of the aforesaid loan from the accused, the accused had issued the cheque in question in favour of complainant with the assurance that the same shall be honoured on its presentation, however, the said cheque, on presentation, was returned back unpaid by the banker of complainant with the remarks "funds insufficient" vide return memo.
The accused has failed to make the payment of the cheque amount to the complainant despite receipt of legal notice, which was dispatched by the complainant to the accused through speed post as well as courier, the accused has committed the offence u/s 138 of the Negotiable Instruments Act, 1881. The complainant has thus filed the complainant seeking prosecution of the accused for the offence u/s 138 of the Negotiable Instruments Act, 1881.
Counsel for the complainant took a plea that since the accused has admitted his signatures on the dishonoured cheque, there are sufficient grounds to raise presumptions under Section 118 (a) and Section 139 of the NI Act in favour of the complainant that the cheque in question was issued by him in discharge of his legally enforceable liability towards the complainant. It was further contended that the accused has failed to rebut the aforesaid presumptions, in as much as, he has failed to lead any evidence in support of his plea that the husband of the complainant had borrowed the car of accused, wherein, allegedly the blank signed cheque in question with blank signed papers were lying and were misused by the complainant.
Complainant had proved her financial capacity to the extent of Rs. 5,00,000/- at the time of grant of loan to the accused and bald suggestions given by Counsel for accused to the complainant during her cross- examination were not sufficient to demolish the case of complainant. It was submitted that the non-filing of ITRs by the complainant is a matter between the Income Tax Department and the complainant and accused can't take any benefit due to the same.
Accused's Case
While defending himself though the accused has not denied his signatures on the cheque in question as well as the loan agreement, however, has denied the execution of Loan agreement and issuance of cheque in question in favour of complainant besides availing of loan in question from the complainant. He has taken a plea that the blank signed cheque in question and the blank signed papers were lying in his car, which was taken by the complainant and she has misused the same. Although during his examination u/s 313 CrPC, accused chose to lead evidence in his defence, however, since he has failed to lead any evidence in his defence despite repeated opportunities, his DE was closed.
Counsel for the accused pleaded that the complainant failed to prove her case against the accused beyond reasonable doubts, in as much as, the entire transaction in question was allegedly in cash and no independent witness has been examined by the complainant in support of her case. It was submitted that the complainant has failed to produce any document to prove the connection of accused with M/s Paras Sweets. He submits that the transaction of huge amount of Rs. 5,00,000/- in cash despite the fact that the complainant was not an income tax assessee casts serious doubts about the veracity of the case sought to propounded by the complainant.
A plea was taken that the complainant has failed to prove her financial capacity to grant a huge loan of Rs. 5,00,000/- in cash and has admitted that all the particulars in the cheque in question are in her handwriting, are sufficient to rebut the presumptions, if any, arising in favour of the complainant, more so, when the accused had already lodged a complaint with the police against the complainant and her husband. He has also raised the issue of the complaint being pre-mature i.e. the same being filed before expiry of period of 15 days from the date of service of legal notice upon the accused. Accused prayed for acquittal of the accused from the charge u/s 138 of the Negotiable Instruments Act, 1881
Legal Discussion
Issue regarding the scope of presumptions u/s 118(a) and u/s 139 of the NI Act has come up for consideration before the Hon'ble Supreme Court in a number of cases. There is no doubt about the settled legal position that once the signatures on the cheque are admitted by the drawer of the cheque, there arises a presumption in favour of the payee/holder in due course in terms of Section 118 (a) and Section 139 of the NI Act that the cheque has been issued for consideration and in discharge of a legally enforceable debt or liability. Although in Krishna Janardhan Bhat v. Dattatraya G. Hegde, (SC) 2008(1) R.C.R (Criminal) 695, Hon'ble Supreme Court has held that
'the presumption does not go to the extent of presuming the existence of debt and b) the aforesaid presumption is rebuttable in nature'.
However, a Three judge bench of Hon'ble Supreme Court in Rangappa Vs. Sri Mohan (7 May 2010) Citation : 2010 Latest Caselaw 366 SC, has overruled the first of the aforesaid proposition while holding that the presumption u/s 139 of the NI Act, though rebuttable, goes to the extent of even presuming the existence of a legally enforceable debt.
In M.S. Narayana Menon @ Mani Vs. State of Kerala & Anr, 2006 Latest Caselaw 360 SC, it has been held that,
'for rebuttal of the presumptions it is not necessary that the accused must step into the witness box but the presumptions can be rebutted either by cross examination of the complainant's witnesses or even by raising presumptions of fact or law from the material available on record as held in Kundan Lal Rala Ram V. Custodian Evaccue Property, reported as AIR 1961 SC 1316).'
Moreover, standard of proof for rebuttal of presumptions by any person accused of an offence u/s 138 of the Negotiable Instruments Act, 1881 is preponderance of probabilities and accused is not liable to prove his defence beyond reasonable doubts. On the other hand, bare denial or bald suggestions give by the accused would not be sufficient to rebut the aforesaid presumptions. Thus, whether the presumption has or has not been rebutted depends upon the facts of each case to be analyzed in the light of aforesaid legal principles.
Court reasoning
All the suggestions given by the accused to the complainant regarding taking away of the car of accused by the husband of complainant (wherein the blank signed cheques of the accused were allegedly lying), regarding the forcible taking of signatures of accused by the husband of complainant upon some blank papers, regarding consequential filing of police complaint by the accused against husband of complainant and regarding misuse of the blank signed cheques and blank signed papers of the accused by the complainant have been categorically denied by the complainant and accused has failed to prove the aforesaid facts by leading any evidence.
Complainant has categorically deposed during her cross- examination that she was an income tax assessee since around the year although she had admitted that she had not shown the loan in question in her ITR of the relevant year, however, the aforesaid fact by itself, in my considered opinion, shall not be sufficient to demolish the case of complainant regarding grant of loan of Rs. 5,00,000/- by her to the accused in view of authoritative pronouncement of Hon'ble Delhi High Court in Barun Kumar vs State of NCT of Delhi, 2021 Latest Caselaw 1711 Del.
As such Court concluded that Accused deserved to be Convicted for commission of offence punichable u/s 138 of the Negotiable Instruments Act, 1881.
Cause Title : Shashi Sharma vs. Akash Jain
Complainant's Counsel: Sh. CSS Tomar
Accused's Counsel: Sh. Hemant Goel
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