Delhi District Court
Rahul Sharma vs Sanjay Sharma on 24 December, 2024
IN THE COURT OF SH. SUSHIL ANUJ TYAGI,
ADDITIONAL SESSIONS JUDGE-04, CENTRAL,
TIS HAZARI COURTS, DELHI.
CNR No. DLCT01-015829-2023
CA No. 279/2023
Rahul Sharma
Proprietor of Maa Bhagwati Beads
S/o. Late Sh. Devender Kumar Sharma
R/o. H. No. 2814, Chahil Puri,
Kinari Bazar, Chandni Chowk,
Delhi-110006.
.... Appellant
Vs.
Sanjay Sharma
S/o. Sh. Jai Kishan Sharma
R/o. 2979, Masjid Khajoor,
Kinari Bazar, Chandni Chowk,
Delhi-110006.
.... Respondent
Date of institution of appeal : 03.11.2023
Date on which Order reserved : 07.12.2024
Date on which Order pronounced : 24.12.2024
ORDER
1. This is a criminal appeal U/s. 374 (3) of Cr. P.C., filed by
the appellant against the impugned judgment and order
on sentence dated 05.09.2023 and 19.09.2023
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respectively passed by the ld. Trial Court of Ms. Bhujali,
ld. M.M.-01 (NI Act), Central, Tis Hazari Courts, Delhi,
in the criminal matter bearing CC No. 5012/2018,
whereby the appellant was convicted u/s. 138 NI Act by
the ld. Trial Court and was sentenced to RI of eight
months and to pay fine of Rs. 14,00,000/-, to be paid to
the complainant as compensation and in default of
payment, to suffer further RI of six months.
2. The brief facts of the case necessary to decide the present
revision petition are that the appellant/accused
approached the complainant for a number of times and
requested him for a personal loan of Rs. 75,00,000/-.
Thereafter, after lots of requests of the appellant/accused
and being well known to the family of the
appellant/accused as well as having good relations with
the appellant/accused, the complainant gave an amount of
Rs. 57,00,000/- as personal loan. The complainant
arranged the said amount from his friends and relatives
and gave the same to appellant/accused @ 18 % per
annum. The complainant was not having more than the
aforesaid amount as demanded. An agreement was also
made in this regard on 24.04.2017. The appellant/accused
promised to repay the said loan of Rs. 57,00,000/- in
seven installments (six installments of Rs. 9,00,000/-
each and one installment of Rs. 3,00,000/-). But later on,
the accused did not honor the transaction and issued
seven cheques, all drawn on ICICI Bank, Chandni
Chowk branch, New Delhi towards refund of the amount
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advanced. One of the said cheques is the cheque in
question of the present case bearing no. 033535 dated
10.01.2018 of Rs. 9 Lacs and it got dishonoured for the
reason “Funds Insufficient”. Thereafter, complainant sent
a legal demand notice dated 24.01.2018 calling upon the
appellant to make the payment of dishonoured cheque
and in default, the present complaint u/s. 138 NI Act was
filed by the complainant against the appellant.
3. The appellant was summoned by the ld. Trial Court and
notice u/s. 251 Cr. P.C. was served upon him to which he
pleaded not guilty and took the defence that he had taken
a loan of Rs. 3,10,000/- only from the complainant and
seven cheques got misplaced from his shop. The
appellant stated that he had not returned the loan of Rs.
3,10,000/- to the complainant. The accused admitted his
signatures upon the cheque as well as on the loan
agreement. The defence of the appellant is reproduced
below for reference:-
“The cheque in dispute belong to me and bear
my signatures. None of the other particulars in
the cheque was filled by me. I have received the
legal demand notice of the complainant. The
signatures of the loan agreement are my own. I
had executed the loan agreement with the
complainant. But at the time when I signed it, it
was blank paper. I had only taken an amount of
Rs. 3,10,000/- from the complainant. But I never
issued the cheque to the complainant. Seven
cheques got misplaced from my shop. The
cheque in dispute is one of those cheques. I have
not returned the Rs. 3,10,000/- taken by me from
the complainant. I have not filed any Police
Complaint regarding my lost cheques. My cousin
brother Pankaj Sharma had also taken someCA No. 279/2023
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money from the complainant. The complainant
has misused my cheques, because of that.
My total liability towards the complainant is only
Rs. 3,10,000/- but for that the complainant has
filed multiple cases against me for an excessive
amount.”
4. In post-summoning evidence, Sh. Sanjay Sharma
examined himself as CW-1 and adopted his pre-
summoning evidence. CW-1 was cross-examined by the
appellant.
5. Thereafter, the appellant was examined u/s. 313 Cr. P.C.
wherein he took the defence that the cheque(s) in
question bears my signatures but he has not filled up the
other particulars in the cheque(s) in question. He has
received the legal demand notice from the complainant.
The address mentioned on the legal demand notice is his
correct address. The complainant is his family friend
since 40 years. He had taken loan of Rs. 3,10,000/- from
the complainant for investment in his business. The
agreement and stamp paper were blank when he signed
on them at the shop of the complainant. He has not yet
returned the loan of Rs. 3,10,000/-. The cheque in dispute
was misplaced from his shop. He never handed over the
cheque to the complainant. He still has liability towards
the complainant for an amount of Rs. 3,10,000/- only.
The complainant misused his lost cheque by filling
excessive amount. He wanted to lead the defence
evidence.
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6. The appellant opted to lead defence evidence and
examined himself as DW-1. DW-1 was duly cross-
examined by the ld. Counsel for complainant.
7. After hearing the final arguments, the ld. Trial Court vide
impugned judgment dated 05.09.2023 convicted the
accused u/s. 138 NI Act and passed the impugned order
of sentence dated 19.09.2023.
8. Assailing the said judgment and order of sentence, the
appellant/accused has preferred the present appeal on
several grounds :-
1. That the impugned order suffers from grave legal infirmities.
2. That the impugned order is irrational, mechanical and passed
without appreciation the evidence placed on record and therefore,
arbitrary too.
3. That the Ld. MM appears to have passed the impugned order in
a pre-determined and without judicial application mind and
therefore causing miscarriage of justice to the Appellant.
4. That the Ld. Trial Court have passed the impugned order and the
judgment as arbitrarily, unjustified and the same as been passed
hurriedly in an unilateral manner by the Ld. MM.
5. That the Ld. Trial has failed to appreciate that the averments of
the alleged complaint did not clarify any specific date and
transaction qua the loan amount and qua the cheque in questions as
averred in the complaint. It is specifically stated that a complaint
must have its potential ingredients for which the
complainant/respondent relying upon but in the afore-said there is
no proper explanation in respect of dates and to their events.
6. That the Ld. Trial has failed to appreciate the facts that the
respondent has miserably failed to prove that he had advanced
loan of Rs. 57,00,000/- in cash as stated in the complaint to the
appellant in as much as no date of granting the loan is mentioned
nor it has been proved the respondent as to in what mode or how
many occasions the said loan was disbursed to the appellant.
7. That the Ld. MM was confused at the time of passing the
judgment which is clear from the judgment as the onus to proof the
document furnished/complainant is upon him not upon the
appellant in the above noted case.
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8. That the Ld. MM failed to appreciate the fact that the
complainant is relying upon the false and fabricated agreement that
is exhibit CW-1/5 which does not rendered any authenticity in the
eye of law as the document does purports any genuine witness nor
it has been proved by the respondent/complainant during the entire
trial. It is further submitted on behalf of the Appellant/Accused that
the witnesses who had been attested as witness in the afore-said
alleged agreement namely Sh. Bijender Singh Rana and Sh. Amit
Sharma Advocate who had also signed at the column of witnesses
in agreement that is exhibit CW-1/5 was also not being deposed as
a witness during the entire trial for proving the afore-said loan
agreement dated 24/04/2017, meaning thereby the Ld. Trial Court
totally overlooked the same.
9. That the Ld. Trial court has failed to appreciate the very material
fact that the document exhibited CW-1/5 is a false and fabricated
agreement which does not purports any authencity nor any
genuinecy in the eye of law, It is stated on the behalf of the
appellant that the loan agreement dated 24/04/2017 has never been
proof by the respondent nor its amount to any genuinecy in the eye
of law, the appellant had given the specific suggestion in respect of
the loan agreement but the same has never been proved by the
calling the other witnesses neither by calling the notary who had
attested the said agreement.
10. That the Ld. Trial Court failed to appreciate the fact that no
description is being mentioned in the complaint by the respondent
that when the appellant approached the respondent, on which date
and even the respondent did not justified the facts from which
relative the respondent arranged the money given to the appellant
in cash. It is submitted the respondent is totally relying upon the
forged and manipulated agreement i.e. EX- CW1/5 as it very
impossible thing to think that a prudent person can advance huge
amount of loan amounting to Rs. 57,00,000/- in cash, meaning
thereby not even a single piece of paper nor any transaction was
being annexed with the complaint which shows that on any
occasion that the respondent had handed over money to the
appellant except the alleged agreement dated 24/07/2017. The Ld.
Trial Court even bother to assume this fact that the
respondent/complainant had not disclosed the very material fact
during the entire trial.
11. That the Ld. Trial Court failed to appreciate the fact that the
respondent herein deposed himself as CW-1 and relied upon the
document i.e. the agreement dated 24/04/2017, but the Hon’ble
Court will look into the cross- examination dated 13/01/2023 the
respondent did not testify his versions that at which point of time
he had transferred an amount of Rs. 3,10,000/- to the appellant and
also did not gave a clear cut answer in respect of income tax return
and further deposed that he has also not shown the above said loan
of Rs. 57,00,000/- in his ITR. He has not mentioned the name ofCA No. 279/2023
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Bijender Singh Rana and his son Pratik in the list of witnesses.” It
is submitted on behalf the appellant that the respondent being a
businessman running his business from the past many years and
also filing his ITR for many past years then it but capacity he can
advances huge amount of loan amounting to Rs. 57,00,000/- in
cash, this intention of the respondent shown as he had made foul
play before The Ld. Trial Court. It is further submitted on behalf of
appellant that the respondent during his cross-examination itself
admitted that he had advances the loan amount to the appellant in
presence of persons namely Sh. Bijender Singh Rana, his worker
and his son namely Pratik Sharma but these persons were never
came as witnesses and deposed themselves during the entire
complainant’s evidence, meaning thereby the burden lies upon the
respondent to prove his version but the Ld. Trial Court totally
overlooked the same. It is also submitted that the respondent on
different occasions had given the contradictory statements wherein
he did not describe the actual scenario from whom he had arranged
the money even the respondent did not shown his capacity to lend
money to the appellant. Merely providing the name from whom the
amount was arranged and afterthought answers cannot considerable
and does not inspire any confidence which established the
statement of the respondent. It is further submitted the iota of
evidence has to be established by a person with the relevant and
cogent material but the respondent had not defined the actual
prospective truth.
12. That the Ld. Trial Court has failed to appreciate the fact that the
respondent during his cross-examination dated 13/01.2023 has
revealed the fact he lends money to the appellant amounting to Rs.
57,00,000/- (i.е. 54,00,000/- in cash and 3,10,000/- through RTGS)
but if this Hon’ble court will look into the evidence affidavit filed
by the respondent during the trial clearly deposed that the
respondent had given 57,00,000/- in cash, this kind of
contradictory statements has also been deposed by the respondent
which amounts to “perjury” in the eye of law. It is stated on behalf
of the appellant that the respondent with his malafide intentions
had misused the cheque in question of the appellant just to defraud
and harassed the appellant by manipulating the documents and also
prepare forge and fabricated agreement which has been conspired
against the appellant.
13. That the Ld. Trial Court failed to appreciate the fact that the
findings made by the Ld. MM states that the loan taken by the
appellant of Rs. 3,10,000/- resisted upon the appellant/accused but
if the Hon’ble court will look into the cross-examination of the
respondent where he clearly deposed that an amount of Rs.
3,10,000/- was admitted by the respondent, meaning thereby there
is no point for rebutting or proving the onus that the appellant had
taken an amount of Rs.3,10,000/-. It is stated on behalf of the
appellant that it is not case of the appellant to prove the burden
upon him, the Ld. Trial Court did not gave its proper finding in
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respect of the afore-said amount, It is the case of the respondent
that the burden to prove the complaint lies upon the respondent as
the agreement dated 24/04/2017 and the averments of the
complaint and also the evidence affidavit of the respondent states
that the respondent had arranged the loan amount from his friends
and relatives but not even a single witness had deposed or proved
the version of the respondent.
14. That the Ld. Trial Court failed to appreciate the fact that the
Ld. Court acted quite illogically and irrationally by convicting the
appellant/accused on-ti ground that while framing of notice u/s 251
Cr.P.C. did not admit the particulars filed by him upon the cheque
in question, though the signatures is deemed to be admitted but the
contents/particulars are denied. Meaning thereby again the burden
to prove the particulars and the cheque in question is upon the
respondent as there were 7 cheques in question which were handed
to the respondent as alleged in the complaint but the appellant did
not admits the contents of the cheque in question. It is also pointed
out before the Ld. Trial Court during the course of arguments but
the Ld. Trial Court totally overlooked the same.
15. That the Ld. Trial Court failed to appreciate the fact that as per
version of the respondent the 7 cheques were issued in discharge
the afore-said loan amount including the cheque in question EX as
CW-1/1 mentioned in the complaint as well as in the agreement
dated 24/04/2017 but the afore-said EX CW1/5 was never proved
by calling the notary public nor the witnesses was being summoned
to prove the genuincity and authencity of the agreement, It is
further submitted on behalf of the appellant that if the respondent is
presumed to be a prudent person then at the time of executing the
loan agreement then why there was no secured part of
surety/security articles was not mentioned or defined except the
alleged description of the cheques in question into the agreement,
meaning thereby if a person was advancing the loan to a borrower
then there must be any security or a concrete/valuable piece article
or document in respect of any property, as the alleged loan amount
of Rs. 57,00,000/- is very huge amount and very handsome in
nature for which a person cannot advance the afore- said loan
merely on a piece of paper i.e. the alleged greement, the respondent
being the reputed businessman who is well educated could lend a
loan to any person or any relative without keeping any valuable
article/security for future purpose in case of default. It is stated on
behalf of the appellant the Ld. Trail court totally overlooked the
same.
16. That the Ld. Trial Court failed to appreciate the fact that the
witnesses in the agreement dated 24/04/2017 namely Bijender
Singh Rana and Advocate Amit Sharma who had sign as a attesting
witness as the agreement is also a part of evidence and the
Advocate Namely Amit Sharma appearing before the Ld. Trial
Court and had also identified the respondent/complainant at his
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evidence affidavit and also filed his vakalatanama in the afore-said
complaint vide CC NO 5012/2018, It is stated on behalf of the
appellant that an advocate who had signed as a witness at the part
of evidence before court cannot appear or filed his vakalatanama as
per the RULE 13 OF CHAPTER II OF PART VI OF BAR
COUNCIL OF INDIA RULES UNDER THE ADVOCATES ACT
1961. It is further submitted that an advocate appears as counsel
who signed in the capacity of witness in the evidentiary document
the same would amounts to professional misconduct u/s 35 OF
THE ADVOCATES ACT 1961. It is also against the ethics of the
profession being an advocate, the same issue is also being pointed
out before the Ld. Trial during the course of arguments but the
Trial Court totally ignored the same.
17. That the Ld. Trial Court failed to appreciate the fact that the
burden to prove the loan amount lies upon the respondent not upon
the appellant and the appellant had taken his defence by rebutting
the same but the Ld. Trial totally overlooked the same. It is further
stated on behalf of the appellant that the “Supreme Court in its
judgment BASILINGAPPA VERSUS MUDIBASPPA
categorically defined that presumption u/s 139 is rebuttable
presumption and the onus is on the accused to raise the probable
defense. The standard of proof for rebutting the presumption is that
of preponderance of probabilities and it is also open to the accused
to rely on the materials submitted by the complainant in order to
raise a probable defense”, thus it made very well clear in the
aforesaid complaint of the respondent/complainant that the
complainant did not established his burden of proof which is upon
him that in which capacity he had given Rs.57,00,000/- to the
appellant merely upon false and fabricated agreement does not
rendered the liability upon the appellant and cannot be considerable
in the eye of law. That the iota of the evidence has to be established
by a person with the relevant and cogent material, herein the case
the respondent had not defined the actual prospective truth before
the Ld. Trial court and even The Ld. Trial court did not gave its
proper finding in this respect.
18. That the Ld. Trial Court failed to appreciate the fact that the
respondent during his evidence did not bring any of the witness
from whom the respondent the arranged the alleged loan amount
given to the appellant namely (Brijesh Sharma, who had arranged 2
lacs), the respondent’s son namely (Akhil and Pratik Sharma who
had arranged Rs. 1.5 lacs and 75 thousands respectively) and also
another son namely (Harsh Sharma) and also respondent’s wife
namely (Suman Sharma), the afore- said persons had arranged the
said alleged amount for respondent but these person’s were never
deposed as a witness to prove whether they had arranged the said
loan amount or not ? It is stated on behalf the appellant that the
respondent during his cross examination dated 13/01/2023 has
specifically mentioned the above-said name but they were being
called as witness nor mentioned in the list of witnesses, meaning
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thereby it is the case of the respondent that burden to prove the
alleged loan amount is upon him not upon the appellant.
19. That The Ld. Trial court has gravely erred in law in passing the
impugned judgment without considering the material facts and
evidence that the respondent/complainant has miserably failed to
prove the alleged agreement by assisting the court or by proving
the burden to advance alleged loan amount to the appellant. before
the trial Court supporting his contentions and allegations leveled by
him against the appellant/accused in the present complaint.
Therefore impugned judgment is contrary to facts and law and is
liable to be set aside.
20. That The Ld. Trial court has gravely erred in not appreciating
the material facts that in cross examination of CW-1 dated
13/01/2023 respondent/complainant failed to state as to whom he
got arranged the amount to be advanced as loan to the
appellant/accused. The respondent/complainant failed to
substantiate as to how much amount he had advanced as loan to the
appellant/accused.
21. That The Id. Trial court gravely erred in law by appreciating
the defence taken by appellant/accused in notice framed before
Hon’ble Court u/s 251 crpc or the same again in his statement on
oath u/s 313 crpc. i.e. that the appellant/accused was never issued
cheque in favor of the respondent/complainant in discharge of any
legally dischargeable liability of the appellant/accused towards the
respondent/complainant, rather the same has been misused by the
respondent/complainant and created a false liability against the
appellant.
22. That the Ld. Trial Court has failed to appreciate the fact that
the respondent was also having the financial dealing with the
brother of the appellant namely (Pankaj Sharma) who had taken a
huge amount of loan from the respondent and also having the
business dealing with the respondent, the respondent had imposed
the afore-said liability upon the appellant by filing the false case
and misused the cheque in question.
23. That the Id. Trial court gravely erred in law by ignoring that
the respondent/complainant failed to show in the entire case as to
how on the date of the cheque there was any legally enforceable
debt arose in favour of respondent/complainant and against the
appellant/accused. The entire examination of witnesses by the
respondent/complainant and the defence brought by the
appellant/accused shows that the appellant/accused had been
successfully rebutted the statutory presumption in favour of
respondent/complainant under Section 139 of NI Act.
9. Ld. Counsel for the appellant/accused argued that the
complaint filed by the respondent against the appellant
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was based on baseless and false allegations by
suppressing material facts. It is argued that the loan
agreement has been denied by the appellant and it has no
relevancy or authenticity in the eyes of law. It is argued
that the said loan agreement has not been proved by the
respondent during the trial and no witness has deposed in
favour of the respondent to prove the transaction of the
alleged loan of Rs. 57 Lacs. It is further argued that the
respondent has not justified the facts that from which
relative, he has arranged the money which he had given
to the appellant. It is further argued that the burden to
prove the case that the respondent has given huge loan
amount to the appellant is upon the respondent. It is
further argued that the witnesses of the alleged loan
agreement i.e. Bijender Singh Rana and Amit Sharma
had not deposed on behalf of the respondent as they were
never called by the respondent in the witness box. It is
further argued that there is material contradiction in the
complaint and the deposition given in the Court by the
respondent as in the complaint, it is mentioned that Rs.
57 Lacs were given, however, in the deposition, it was
stated that Rs. 57 Lacs was given in two parts i.e. Rs. 54
Lacs in cash and Rs. 3.10 Lacs through RTGS. It is
further argued that the cheque in question was never
handed over by the appellant to the respondent in respect
of the loan and that the appellant had misused the cheque
and is not entitled for any recoverable debt. It is further
argued that the alleged loan amount has not been
disclosed in the ITR of the respondent which is against
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the bye laws of Income Tax. It is therefore, prayed that
the impugned judgment and order on sentence may
kindly be set aside.
10. To the contrary, Ld. Counsel for respondent/ complainant
submitted that the ld. Trial Court has rightly passed the
judgment and order on sentence upon the appellant. It is
further contended that the appellant has taken
contradictory pleas during the trial of the present case and
there are seven complaint cases and one civil suit pending
against the appellant. Ld. Counsel argued that the
appellant/accused has failed to discharge his onus of
rebutting the presumptions U/s 118 (a) and Section 139
NI Act and the case of the complainant duly stands
proved warranting conviction of the accused. It was also
argued that there is a civil decree passed against the
accused. Ld. counsel further argued that the loan
transaction stands duly proved vide loan agreement dated
24.04.2017 Ex. CW1/6 and as the accused has admitted
his signatures on the said loan agreement and cheque in
question, the presumption U/s 139 N.I. Act stood against
him which has not been rebutted. It is therefore, prayed
that the present appeal may kindly be dismissed.
11. This Court has heard the rival arguments from both the
sides and has perused the judicial record.
12. To decide the present appeal, it is appropriate to advert to
the Sections 138, 139 and 118 (a) NI Act which are
reproduced below :-
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“138. 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 discharge, in whole 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.”
“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.”
“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;”
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13. It is trite in law that in the prosecution under
section 138 NI Act, the statutory presumptions U/s.
118 (a) and 139 NI Act stand in favour of the
complainant. Once the complainant proves that the
negotiable instrument/cheque is executed by the maker in
favour of the holder of the cheque, the law presumes that
the same is drawn for consideration and the holder of the
same received it in discharge of legally enforceable debt
or liability. Section 118 and Sec. 139 NI Act are the
reverse onus clauses. The burden therefore, shifts on the
shoulder of the accused to prove to the contrary, which he
can do so by demolishing the case of complainant
through cross-examination or by leading any cogent
evidence in defence.
14. The burden on the accused is not heavy as that of
prosecution but only of preponderance of probabilities. In
other words, the burden on the accused is not to prove his
case beyond reasonable doubts but only to show
preponderance of probabilities in his favour. The accused
can do so by referring to the circumstances upon which
he relies or by inference from the contradictions or
discrepancies in the complainant’s case. It is not
mandatory upon the accused to lead defence evidence.
Once the accused establishes preponderance of
probabilities in his favour by showing a probable
defence, the statutory presumptions are rebutted and then
the onus shifts back upon the complainant to prove his
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case against the accused beyond reasonable doubts,
which is the basic principle of criminal law.
15. The Hon’ble Supreme Court of India in Baslingappa v.
Mudibasappa, [(2019) 5 SCC 418] has summarized the
principles on Sections 118(a) and 139 of the NI Act. It
will be relevant to produce the same.
“25. We having noticed the ratio laid down by th is
Court in the above cases on Sections 118(a) and 139,
we now summarise the principles enumerated by this
Court in following manner:
25.1 Once the execution of cheque is admitted Section
139 of the Act mandates a presumption that the cheque
was for the discharge of any debt or other liability.
25.2 The presumption under Section 139 is a rebuttable
presumption and the onus is on the accused to raise the
probable defence. The standard of proof for rebutting
the presumption is that of preponderence of
probabilities.
25.3 The rebut the presumption, it is open for the
accused to rely on evidence led by him or the accused
can also rely on the materials submitted by the
complainant in order to raise a probable defence.
Inference of preponderence of probabilities can be
drawn not only from the materials brought on record by
the parties but also by reference to the circumstances
upon which they rely.
25.4 That it is not necessary for the accused to come in
the witness box in support of his defence, Section 139
imposed an evidentiary burden and not a pursuasive
burden.
25.5 It is not necessary for the accused to come in the
witness box to support his defence.”
16. At this juncture, it is also apt to refer to the principles laid
by the Hon’ble Apex Court in case titled as Kumar
Exports v. Sharma Carpets, [(2009) 2 SCC 513], which
are as follows:
“20. The accused in a trial under Section 138 of the
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Act has two options. He can either show that
consideration and debt did not exist or that under the
particular circumstances of the case the non-existence
of consideration and debt is so probable that a prudent
man ought to suppose that no consideration and debt
existed. 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 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. To disprove the
presumptions, the accused should bring on record
such facts and circumstances, upon consideration of
which, the court may either believe that the
consideration and debt did not exist or their non-
existence was so probable that a prudent man would
under the circumstances of the case, act upon the plea
that they did not exist. Apart from adducing direct
evidence to prove that the note in question was not
supported by consideration or that he had not incurred
any debt or liability, the accused may also rely upon
circumstantial evidence and if the circumstances so
relied upon are compelling, the burden may likewise
shift again on to the complainant. The accused may
also rely upon presumptions of fact, for instance,
those mentioned in Section 114 of the Evidence Act
to rebut the presumptions arising under Sections 118
and 139 of the Act.
21. The accused has also an option to prove the non-
existence of consideration and debt or liability either
by letting in evidence or in some clear and
exceptional cases, from the case set out by the
complainant, that is, the averments in the complaint,
the case set out in the statutory notice and evidence
adduced by the complainant during the trial. Once
such rebuttal evidence is adduced and accepted by the
court, having regard to all the circumstances of the
case and the preponderance of probabilities, theCA No. 279/2023
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evidential burden shifts back to the complainant and,
therefore, the presumptions under Sections 118 and
139 of the Act will not again come to the
complainant’s rescue.”
17. The Hon’ble Supreme Court of India in K. Bhaskaran Vs.
Sankaran Vaidhya Balan, [(1999) 7 SCC 510]
summarized the ingredients of the offence U/s 138 N.I.
Act. The relevant extract is reproduced below for
reference:-
“The offence U/s 138 of the Act can be completed only
with the concatenation of a number of acts. The
following are the acts which are components of the said
offence: (1) drawing of the cheque, (2) presentation of
the cheque to the bank, (3) returning of the cheque
unpaid by the drawee bank, (4) giving notice in writing
to the drawer of the cheque demanding payment of the
cheque amount, (5) failure of the drawer to make the
payment within 15 days of the receipt of notice.”
18. In the present case, the complainant has proved the
aforesaid components of Section 138 NI Act and
therefore, the presumptions u/s. 118 and 139 NI Act stand
in his favour. It has to be considered by this Court
whether the appellant has been able to rebut the aforesaid
presumptions on the standard of preponderance of
probabilities.
19. The case of the complainant is that the appellant had
taken Rs. 57 Lacs as personal loan from him and one
written agreement dated 24.04.2017 was also signed
between them with respect to the said loan which was to
be repaid by the appellant in seven installments (six
installments of Rs. 9 Lacs and one installment of Rs. 3
Lac). It is further the case of the complainant that seven
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post dated cheques were handed over by the appellant to
the complainant for repayment of the said loan which got
dishonoured on presentation. The impugned cheque is
one of those seven post dated cheques.
20. On the other hand, the defence of the appellant is that the
cheques got misplaced from his shop, though the
signatures on the cheque are not denied. The appellant
had taken a plea that cheques were never issued to the
complainant and that the other particulars on the cheques
are not filled by him. He also took a defence that his
cousin brother Pankaj Sharma had taken some money
from the complainant due to which the complainant had
misused the cheques. The appellant admitted that he had
taken loan from the complainant in the tune of Rs. 3.10
Lacs and has also admitted that he has not repaid the
same.
21. The signature on the impugned cheque is undisputedly of
the appellant. The defence of the appellant that he has not
filled the other particulars in the cheque is of no value as
Section 20 of the N.I. Act specifically provides that when
a person signs and delivers a negotiable instrument either
wholly blank or having written thereon an incomplete
negotiable instument, he thereby gives prima facie
authority to the holder thereof to make or complete upon
it a negotiable instrument and the person so signing shall
be liable upon such instrument. Having admitted the
signatures on the impugned cheque, the presumptions u/s.
118 (a) and Sec. 139 NI Act are invoked in favour of the
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complainant that the impugned cheque was drawn in
discharge of legally enforceable debt or liability and the
same was for consideration. The only question that needs
to be decided is that whether the accused has been able to
rebut the said presumptions or not.
22. The primary defence taken by the appellant is that the
seven cheques are misplaced from his shop and that he
has not issued the same to the complainant. He has not
been able to explain if the cheques were misplaced how
the same came into the possession of the complainant. It
is quite natural for a person to lodge a police complaint if
a cheque that too signed, is misplaced or even to give
instructions to the bank concerned to stop its payment.
But interestingly, no action has been taken by the
appellant in this regard. He has not even informed his
bank regarding the loss of the cheques. Even after
receiving the legal demand notice or after receiving the
information regarding the alleged misuse of cheques, no
complaint has been filed by the appellant against the
complainant.
23. Further, it is also important to note that a written
agreement dated 24.04.2017 Ex. CW-1/6 was also
executed between the complainant and the appellant
regarding the said loan. The appellant has admitted his
signatures on all the pages of the agreement and he has
also admitted that the photograph present at point B of
the agreement is his photograph. There is also signature
of the accused running across the photograph of the
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appellant and the agreement paper. Thus, the defence
taken by the appellant that blank papers were got signed
from him with respect to the agreement, holds no water.
The said written agreement dated 24.04.2017 clearly
mentions that the appellant had handed over seven post
dated cheques including the impugned cheques to the
complainant for repayment of the loan.
24. Apart from the above, it is pertinent to observe that the
appellant examined himself as DW-1 and during his
cross-examination, the documents of civil suit no.
1221/2018 which was decided in favour of the
complainant, were put to the appellant. In the WS Ex.
DW-X/1, the appellant had pleaded that he had handed
seven blank cheques to the complainant. When the
appellant was confronted with the said pleading during
the cross-examination in the present case, the appellant
remained with his plea that the cheques were misplaced
but he has not furnished any explanation for the
contradictory pleas but rather he feigned ignorance. To
add further, the appellant in his cross-examination dated
24.08.2022 Ex. DW-1/X2 in the aforementioned civil
suit, voluntarily deposed that he has given three cheques
to the plaintiff in lieu of loan of Rs. 3.10 Lacs. The
appellant has never disclosed about the said three cheques
during the trial of the present case neither in the defence
recorded at the stage of Sec. 251 Cr. P.C. nor in the
statement recorded u/s. 313 Cr. P.C. Also during his
further cross-examination on 02.11.2022 Ex. DW-1/X2,
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the appellant deposed that he had given five cheques
from the cheque book to the complainant towards
repayment of loan. It is apparent that contrary stands have
been taken by the appellant during the trial of civil suit as
well as the present case. The testimony of the appellant as
DW-1 therefore, cannot be considered as reliable.
25. The other defence taken by the appellant that he had
taken a loan of Rs. 3.10 Lacs which he has not returned
yet but such defence taken by the appellant has only
remained as a bald averment without any substantial
proof. There is nothing on record to substantiate such
averment of the appellant. The appellant had admitted his
signatures on the loan agreement Ex. CW-1/6 which
clearly mentions the loan amount to be Rs. 57 Lacs. No
documentary proof has been produced by the appellant to
show that the loan amount was Rs. 3.10 Lacs and not Rs.
57 Lacs. In presence of a written signed agreement
between the parties, the appellant cannot be allowed to
contradict or vary the terms of the agreement in view of
Sec. 91 and 92 of the Indian Evidence Act.
26. The another plea taken by the appellant is that his cousin
brother Pankaj Sharma had also taken some money from
the complainant and for that reason the complainant had
misused the cheques. In this regard, it is important to note
that the appellant has not brought his cousin brother
Pankaj Sharma as a witness in his defence. No question
were put to the complainant during cross-examination in
this regard. To the contrary, the complainant questioned
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the appellant in cross-examination wherein the appellant
stated that he does not know what amount of loan was
taken by his cousin Pankaj Sharma from the complainant
and that he cannot bring him as a witness in the Court. It
is clear that this defence taken by the appellant has not
been corroborated by any evidence and the same is
insufficient to rebut the presumptions standing in favour
of the complainant.
27. The appellant has also challenged the source of income
and the financial capacity of the complainant to give loan
amount of Rs. 57 Lacs. In the testimony, the complainant
as CW-1 disclosed that different amounts which he had
taken from his family members. No further questions
were asked by the appellant to the complainant regarding
the capacity of the family members. Nothing has been
proved by the appellant to show that complainant does
not have financial capacity to extend loan of Rs. 57 Lacs.
Further, the fact that the amount of loan is not shown in
the ITR would not swipe the case of the complainant.
Reference can be made to the judgment of Hon’ble High
Court of Delhi in Sheela Sharma vs. Mahendra Pal, Crl.
L. P. 559/2015 decided on 02.08.2016 wherein it was
observed as follows:-
“30. In cases where the complainant claims to have
advanced a friendly loan in cash, and where the
transaction of loan is not evidenced by any other
documentary or other reliable evidence, no doubt, the
aspect whether the availability of funds in cash with
the complainant/ lender, and its advancement as loan
to the accused have been reflected in the income tax
returns of the complainant/ lender, or not, become
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relevant. If, the availability of funds, and the loan
transaction itself is not so reflected, that factor is
taken note of by the Court as relevant to hold that the
presumption under Section 118 and 139 of the NI Act
stands rebutted. However, these considerations would
not be relevant, where loan transaction itself is
otherwise established, either through documentary
evidence – such as, a receipt or a loan agreement, or
acknowledgment executed by the accused, or by oral
evidence of an independent witness who is found to
be credible.”
28. In the aforesaid judgment it was also observed that :
“24. The mere advancement of the loan in cash,
may entail consequences for the party acting in
breach of Section 269 SS of the Income Tax
Act.That is not the concern of this Court. Whether,
or not, the appellant reflected the availability of the
said amount in her income-tax returns, is also not a
matter of concern for this Court. That would again
be an aspect to be considered by the income-tax
authorities. The advancement of loan, in cash, to
the tune of Rs.10 Lakhs is not prohibited in law.
The transaction of advancement of loan of Rs.10
Lakhs, in cash, does is not illegal. Such a
transaction is enforceable at law.
25. Breach of Section 269 SS of the Income Tax
Act provides the penalty to which the person
would be subjected to under Section 271D of the
Income Tax Act. Section 271D does not provide
that such a transaction would be null & void. The
payer of the money in cash – in violation of Section
269 SS of the Income Tax Act would, therefore, be
entitled to enforce an agreement of advancement
of money in cash beyond Rs.20,000/-.”
29. The appellant has also contended that the complainant
was not having money lending license and therefore, the
complaint u/s. 138 NI Act is not maintainable. In this
regard, it is to be noted that Punjab Registration of
Money Lenders Act, 1938 which also applies to Delhi
does not restrict the money lenders from instituting
complaint u/s. 138 NI Act which is enforceable before
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the Criminal Courts and not Civil Courts. Reference may
be had to the judgment of the Hon’ble High Court of
Delhi in Kajal vs. Marwah, Crl. Appeal No. 870/2013,
decided by the Hon’ble High Court of Delhi on
27.03.2014 wherein similar issue was dealt by the
Hon’ble Court.
30. The appellant has pointed out towards the cross-
examination of the complainant wherein CW-1 deposed
that he has given Rs. 54 Lacs in cash and Rs. 3.10 Lacs
through RTGS which the appellant contends that the
same is contrary to the complaint in which it was averred
that the amount of Rs. 57 Lacs was given. The
complainant has categorically explained that the appellant
had returned Rs. 10,000/- in cash and the cheque of Rs. 3
Lacs was given in return of the RTGS of Rs. 3.10 Lacs.
He had further explained that the loan of Rs. 57 Lacs
comprises of Rs. 54 Lacs cash and Rs. 3 Lacs given
earlier. No further cross-examination was conducted by
the appellant in this regard. The discrepancy, if any, has
been duly explained by the complainant and there is no
reason to doubt the case of the complainant. The
signatures on cheques and loan agreement are duly
admitted by the appellant. The appellant has also
admitted the extension of loan to him by the complainant
but he has only challenged the quantum of loan. The
defences raised by the appellant are not found sufficient
to rebut the presumptions standing against the appellant.
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31. For the foregoing reasons, this Court unflinchingly holds
that the appellant has failed to set up probable defence or
to prove his case on the preponderance of probabilities.
The impugned judgment passed by the ld. Trial Court
convicting the appellant u/s. 138 NI Act is accordingly
upheld.
SENTENCE
32. Vide impugned order of sentence dated 19.09.2023, the
appellant has been sentenced to undergo rigorous
imprisonment for eight months and directed to pay fine/
compensation of a sum Rs. 14,00,000/- within 30 days
exclusive of the date of sentencing and in default of
payment of the amount, he shall undergo further rigorous
imprisonment for period of 06 months. The imprisonment
for the offence under section 138 of the NI Act is upto
two years, or with fine which may extend to twice the
amount of the cheque, or with both.
33. The ld. counsel for appellant/convict sought lenient view
on the ground that the sentence of rigorous imprisonment
for eight months is quite harsh.
34. On the other hand, Ld. Counsel for the
complainant/respondent argued that contradictory stands
have been taken by the appellant in the different trials and
he has considerably delayed the trial and tried to evade
his liability under the cheques. It is contended that the
appropriate sentence has been awarded by the ld. Trial
Court.
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35. In the present case, the impugned cheque pertains to
dated 033535 and the appellant has been convicted after
more than five years i.e. on 05.09.2023 and the order on
sentence was passed on 19.09.2023. Thereafter, the
present appeal has also taken more than a year. The
complainant/respondent has thus been dragged into the
litigation which has lasted for about more than 06 years.
36. In the given facts and circumstances, this Court is of the
view that the order on sentence passed by the ld. Trial
Court warrants no interference.
37. The present appeal is hereby dismissed.
38. Copy of this judgment be supplied to the Counsel for the
appellant/convict free of cost against acknowledgment.
39. Trial Court Record be sent back to the Ld. Trial Court
alongwith copy of this judgment. The Ld. Trial Court is
requested to execute its order on sentence dated
19.09.2023.
40. Appeal file be consigned to Record Room after due
compliance.
Pronounced in open court
on 24th December, 2024 (SUSHIL ANUJ TYAGI)
Additional Sessions Judge-04,
Digitally
Central, Delhi, THC, Delhi.
signed by
SUSHIL SUSHIL
ANUJ TYAGI
ANUJ Date:
TYAGI 2024.12.24
15:55:22
+0530
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