2024 TaxPub(CL) 49 (Del-HC)
NEGOTIABLE INSTRUMENTS ACT, 1881
Sections
138 & 139
Lender failed to file any evidence, which proved his financial capacity or
issuance of cheques for discharge of loan liability, the lender was unable to
discharge statutory burden cast upon, therefore, presumption under section
139 had not arisen in his favour and thus, judgment of acquittal of borrower
was rightly passed by Trial Court.
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Dishonour of cheque - Petition against
judgment of acquittal of borrower - Financial capacity or issuance of
cheques for discharge of loan liability not proved by lender with evidence -
Presumption under section 139 not arising in favour of lender
Lender filed complaint under section 138 against
borrower as issuance of cheques for discharge of loan liability was dishonoured
due to insufficient funds. Trial Court passed judgment of acquittal of the
borrower on the ground that the lender failed to prove his financial capacity.
Further, he had also not filed any evidence, which proved that the cheques were
issued for discharge of loan liability. Therefore, the lender filed petition
seeking to leave to appeal for setting aside the judgment of the Trial Court on
the ground that the borrower had not denied that the cheques were not belonged
to him. Held: In the present case, the borrower has neither
admitted to the issuance of the cheques nor his signature(s) at any stage.
Therefore, it is incumbent upon the lender to discharge the initial burden of
proving the issuance of the cheques in question, but the same is not proved
with evidence. The cheques in question are themselves shrouded in mystery as
there is no clarity qua the facets of as to firstly, who had filled
them, secondly, when were they issued and lastly, where were they issued. The
lender is unable to discharge the statutory burden cast upon him, therefore,
there is no occasion for presumption under section 139 arising in his favour.
The lender has not filed any evidence, which proves that the cheque was issued
for discharge of legally enforceable debt. Thus, the judgment of acquittal of
the borrower was rightly passed by the Trial Court.
REFERRED :
FAVOUR : Against the petitioner
A.Y. :
IN THE DELHI HIGH COURT
SAURABH BANERJEE, J.
C.P. Singh v. Vinod
Prasad
Crl. L.P. No. 37 of
2022
14 December, 2023
Petitioner by: M.P.S. Kasana, Advocate
Respondent by: Abhiesumat Gupta, Advocate
1. The petitioner, vide the present leave petition under section 378(1)
of the Code of Criminal Procedure, 1973 [Cr.P.C.], seeks leave to appeal for
setting aside of the Judgment, dated 29-10-2021 passed by the learned MM
(NI Act)-02, Central, Tis Hazari Courts, Delhi in CC No. 510612/2016 titled
as C.P. Singh v. Vinod Prasad, whereby the respondent was acquitted for
the offence punishable under section 138 of the Negotiable Instruments Act,
1881 [NI Act].
2. As per the complaint filed by the petitioner, the petitioner and the
respondent were on friendly terms for the past 10-12 years. Sometime in the
first week of January, 2016, the respondent had approached the petitioner for a
friendly loan of Rs. 15,00,000 [Rupees Fifteen Lakhs Only] for his personal
business needs and the same was extended by the petitioner to him sometime in
the second week of January, 2016. In exchange for receiving the said friendly
loan amount, the respondent had given original property documents of his
property bearing No. B-181, Arjun Nagar, Nangli Vihar, Najafgarh, New
Delhi-110043 to the petitioner as also two post-dated cheques bearing No.
675042 dated 21-4-2016 for Rs. 7,50,000 [cheque no. 1] and bearing No. 675043
dated 29-4-2016 for Rs. 7,50,000 [cheque no. 2], both drawn on State Bank of
India, Branch Nangli Sakarwati, New Delhi. Thereafter, both the cheques were
presented by the petitioner at United Bank of India, Branch Timarpur, Delhi,
whereupon, cheque no.1 was returned vide return memo dated 25-4-2016 with the
remarks 'Insufficient Funds' and the cheque no. 2 was also returned with the
remarks 'Insufficient Funds' vide return memo dated 2-5-2016. Aggrieved
thereby, the petitioner sent a Legal Notice, dated 6-5-2016 by
registered post to the respondent. The same was duly replied to by the
respondent. Thereafter, as the respondent failed to make the payment, the
petitioner filed the complaint under section 138 of the NI Act against him,
sometime in July, 2016.
3. This Court, vide Order, dated 8-2-2022, issued notice.
Further, vide Order, dated 12-5-2022, a fresh notice was directed to be
served upon the respondent and the respondent was duly served. Finally,
arguments were heard and judgment was reserved on 7-12-2023.
4. Learned counsel for the petitioner submitted that the petitioner has
complied with all the procedural formalities as regards the offence under
section 138 of the NI Act; and that the respondent has not denied that the
cheques in question belong to him and as such, the learned Trial Court has
erred in opining that the petitioner was to prove that the signature(s) on the
cheques in question were indeed the signature(s) of the respondent since the
presentation of the cheques in question by the petitioner and their subsequent
dishonour was nowhere denied by the respondent; and that since, based on
settled principles of law, there is a presumption in favour of the petitioner,
therefore, the onus lay upon the respondent to prove the contrary and lastly
since the petitioner had complied with all the requirements mandated under
section 138 of the NI Act, therefore, the respondent ought to have been
convicted for the offence punishable under section 138 of the NI Act.
5. Learned counsel for the respondent submitted that merely because the
respondent has not denied that the cheques in question belong to him,
therefore, the presumption under section 139 read with section 118 of the NI
Act does not arise in favour of the petitioner; and that the petitioner has not
been able to prove that there exists a legally enforceable debt as on the date
of issuance of the cheques in question or on the date of their dishonour; and
that the petitioner has not been able to prove his financial capacity as on the
date of the advancement of the friendly loan amount; and that it was proved
during the cross-examination of the petitioner before the learned Trial Court
that the petitioner had no personal friendly relations with the respondent and
on the contrary, the respondent has been able to prove that he was in no way
involved with the petitioner and had not taken any loan from him, more so,
whence, the respondent had proved before the learned Trial Court that on
31-1-2016, his bag was stolen from Vishnu Garden, Delhi and the same had
various documents including the cheques in question and he had duly reported
the said theft to the Police and lastly since the petitioner has been unable to
satisfy the essential ingredients of an offence under section 138 of the NI
Act, therefore, the petition is liable to be dismissed.
6. This Court has heard the learned counsel for the parties and has
also perused the documents on record.
7. Before adverting to the merits of the matter, it is important to
note, that to constitute an offence under section 138 of the NI Act, the
following essential ingredients are required to be fulfilled :--
(a) The
'drawer' has drawn a cheque for 'discharge' of an 'existing debt or liability'.
(b) The said
cheque has to be presented 'within 3 months' or within its validity period,
whichever is earlier.
(c) The cheque
has to be dishonoured/returned 'unpaid' due to 'insufficient funds' or due to
it 'exceeding' the amount arranged.
(d) Apropos
the above, the 'drawee' has to make a demand qua the payment of the
cheque amount by way of a written legal notice to the 'drawer' of the cheque
within a further period of '30 days' of the said dishonour.
(e) The drawer
of the cheque must fail to make the payment of the cheque amount within a
further period of '15 days' of receipt of the aforesaid notice.
8. Once the aforesaid essential ingredients, having been set into
motion, are complete in all respects, it is only then that the drawer of the
cheque can be held to be guilty of the offence under section 138 of the NI Act.
9. However, the same has to be read together with the provisions of
section 118(a) of the NI Act, which relates to the presumption to be made as
regards consideration of every negotiable instrument as also the provisions of
section 139 of the NI Act which relates to the presumption in favour of holder
of the cheque. Importantly, the said presumptions under section(s) 118(a) and
139 of the NI Act, are to be raised at the first given instance and depending
thereon, the burden shifts accordingly.
10. Facts of the present proceedings reveal that though the respondent
has not denied that the cheques in question belong to him, however, he has
denied his signature(s) thereon. In fact, the respondent has neither admitted
to the issuance of the cheques in question nor his signature(s) at any stage,
be it at the time of framing of notice under section 251 of the Cr.P.C. or at
the time of recording of his statement under section 313 of the Cr.P.C. or at
the time of producing his evidence.
11. Considering the aforesaid, it was incumbent upon the petitioner to
discharge the initial burden of proving the issuance of the cheques in
question. Besides this, the petitioner, for reasons best known to himself,
chose not to examine any other independent witnesses barring himself,
especially none of the concerned Bank officials. The cheques in question are
themselves shrouded in mystery as there is no clarity qua the facets of
as to firstly, who had filled them, secondly, when were they issued and lastly,
where were they issued. In essence thereof, as the petitioner was unable to
discharge the statutory burden cast upon him, there was no occasion for the
presumption under section 139 of the NI Act arising in his favour.
12. In fact, the petitioner was unable to prove anything as regards to
his alleged long standing friendly relations with the respondent or as regards
any cogent reasons for him allegedly extending an amount of Rs. 15,00,000 to
the respondent. Further, the petitioner has not been able to provide any
reasonable explanation as to why and based upon what relationship, he had
advanced the huge sum of Rs. 15,00,000 to the respondent without taking any
receipt or acknowledgment thereof. So much so, the alleged property documents
which were also mentioned by him in the complaint never saw the light of the
day before the learned Trial Court. Lastly, the petitioner was also unable to
prove, beyond reasonable doubt, that there was any legally enforceable debt in
his favour and against the respondent. In fact, the cross-examination of the
petitioner was contrary to the case set up by him in his complaint.
13. On the other hand, the respondent, indeed raised a probable defence
and was steadfast is his version all throughout, from his response to the legal
notice till the proceedings before the learned Trial Court. Also, the
respondent had already lodged a Police complaint qua the various
documents including the cheques in question being lost much prior to the
issuance of the cheques in question. Further, during cross-examination, the
respondent had himself called a Bank official, who had indeed deposed that the
property papers were in fact deposited in the Bank.
14. In view thereof, this Court finds that the impugned order passed by
the learned Trial Court is well reasoned and balanced as it has carefully taken
note of all the factors necessary for deciding a complaint under section 138 of
the NI Act and has accordingly adjudicated upon the present dispute.
15. Accordingly, finding no infirmity with the impugned Order, dated
29-10-2021 passed by the learned MM (NI Act)-02, Central, Tis Hazari
Courts, Delhi in CC No. 510612/2016 titled as C.P. Singh v. Vinod
Prasad and after considering the factual matrix involved coupled with legal
position at hand, the present petition, alongwith the pending application, if
any, is dismissed in the above terms.