Delhi High Court
Smt. Kamlesh vs Shri Tejpal on 24 December, 2024
IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on:24.12.2024
+ CRL.L.P. 598/2019
SMT. KAMLESH .....Appellant
versus
SHRI TEJPAL .....Respondent
Advocates who appeared in this case:
For the Appellant : Mr. C.M. Grover & Ms. Payal
Budhiraja, Advs. with appellant in
person
For the Respondent : Mr. R.K. Burman, Adv. (through VC)
CORAM
HON'BLE MR JUSTICE AMIT MAHAJAN
JUDGMENT
CRL.L.P. 598/2019
1. The present leave to appeal is filed against the judgment dated
24.07.2019 (hereafter ‘impugned judgment’) passed by the learned
Additional Sessions Judge (‘ASJ’), North District, Rohini, Delhi in
Criminal Appeal No. 10/2019 whereby the respondent was acquitted
of the offence under Section 138 of the Negotiable Instruments Act,
1881 (‘NI Act‘).
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2. For the reasons discussed below, leave to appeal is granted.
3. Petition stands disposed of.
CRL.A. ____________/2024 (to be numbered)
4. It is the case of the appellant that on an urgent requirement of
the respondent, the appellant had advanced a friendly loan for a sum
of ₹6,40,000/- to the respondent in cash. It is alleged that thereafter,
the respondent, in discharge of his liability, had issued a cheque
bearing no. 000049 dated 05.06.2015 for a sum of ₹6,40,000/-.
Subsequently, on presentation, the subject cheque returned unpaid
with the remarks “Funds Insufficient.” Thereafter, the appellant sent a
legal demand notice dated 26.06.2015. Subsequently, since the
payment was not made within 15 days of the receipt of the demand
notice, the appellant filed a complaint under Section 138 of the NI
Act.
5. The respondent, in his statement, under Section 313 of the Code
of Criminal Procedure, 1973 (‘CrPC‘) denied taking any loan from
the appellant. He stated that in December, 2014, it was infact the
husband of the appellant that requested the respondent to advance a
loan to enable the husband of the appellant to purchase a taxi for he
was unemployed. The respondent stated that the appellant’s husband’s
service in police was terminated. For this reason, the appellant’s
husband wanted to purchase a taxi and took a loan of ₹6,40,000/- from
the respondent.
6. He stated that the appellant is the bua of the respondent’s wife.
He stated that for this reason, he acceded to the request of the
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appellant’s husband. He further stated that the appellant’s husband
was working with him as a driver in his taxi. He stated that he handed
over the cheque to the appellant on the condition that she would
produce a guarantor for the loan amount. He stated that since the
appellant failed to produce the guarantor, he did not honour the
cheque. He stated that he did not borrow any loan from the appellant.
He further stated that the appellant did not return the cheque in
question despite several requests, and also misused the cheque.
7. The learned Metropolitan Magistrate (‘MM’) vide order dated
29.10.2018 convicted the respondent of the offence under Section 138
of the NI Act. It was noted that the main defence of the respondent
was that the cheque was given as a loan but when the appellant failed
to produce guarantee, he did not keep the money in the account. It was
noted that the respondent failed to show that he possessed sufficient
arrangement outside the bank to honour the cheque should the
appellant produce the guarantor and presented the cheque for
encashment. It was noted that the presumption existed in the favour of
the appellant and the defence brought by the respondent failed to
inspire confidence. Consequently, the respondent was convicted under
Section 138 of the NI Act.
8. The learned ASJ by impugned judgment acquitted the
respondent of the offence under Section 138 of the NI Act. It was
noted that the appellant deposed that she is running a dairy with 8
buffaloes, and that the appellant is not paying any Income Tax. It was
noted that the husband of the appellant was an agricultural labour, and
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the appellant could not estimate her income from animal husbandry. It
was noted that no purpose for the advancement of loan was specified.
9. The learned ASJ also took into consideration that the
respondent was in the business of Tours and Travels for the last 10
years, and had paid Income Tax for the years 2013-2018. It was noted
that as per the deposition of the respondent, he had two vehicles, that
is, a Scorpio, and Versa. As per the deposition of the respondent, these
vehicles were being driven by drivers, and the respondent’s house was
his ancestral property. It was noted that the respondent appeared to be
more economically sound in comparison to the appellant. It was noted
that the respondent admitted his signature on the cheque, and deposed
that after the cheque got bounced, he made a police complaint against
the appellant.
10. Considering the aforesaid, the learned ASJ acquitted the
respondent of the offence under Section 138 of the NI Act while
specifically noting that the respondent had successfully rebutted the
presumptions raised against him.
11. Aggrieved by the impugned judgment, the appellant has filed
the present appeal.
12. The learned counsel for the appellant submitted that the learned
ASJ erred in acquitting the respondent of the offence under Section
138 of the NI Act. He submitted that since the signature on the subject
cheque was not disputed, the presumptions under Section 139 and 118
existed in the favour of the appellant and against the respondent.
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13. He submitted that the fact that the respondent contends that he
had advanced the subject cheque, and yet failed to keep sufficient
funds in his account, itself manifested the mala fide intention of the
respondent and ought not to be overlooked.
14. He submitted that the respondent failed to rebut the
presumptions raised against him under Section 139 and 118 of the NI
Act, and consequently prayed that the impugned judgment be set
aside.
15. The learned counsel for the respondent submitted that the
learned ASJ rightly acquitted the respondent of the offence under
Section 138 of the NI Act. He submitted that the respondent had raised
a probable defence and had also rebutted the presumptions under
Section 139 and 118 of the NI Act.
16. He submitted that since the appellant failed to show that she had
the financial means to advance the loan, the learned ASJ acquitted the
respondent of the offence under Section 138 of the NI Act. He
submitted that the fact that the loan was advanced without any written
proof casts a doubt in the story of the appellant. He submitted that
since the respondent was more economically sound than the appellant,
the learned ASJ rightly acquitted the respondent.
17. He submitted that the respondent only had to raise a probable
defence to dislodge the presumptions under Section 118 and 139 of
the NI Act, which having been done, the respondent was rightly
acquitted of the offence under Section 138 of the NI Act.
ANALYSIS
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18. It is trite law that a Court while considering the challenge to an
order of acquittal ought to only interfere if the Court finds that the
appreciation of evidence is perverse [Rajaram s/o Sriramlulu Naidu
(since deceased) through LRs:Criminal Appeal No. 1978 of 2013].
19. The present case, however, relates to acquittal of an accused in
a complaint under Section 138 of the NI Act. The restriction on the
power of Appellate Court in regard to other offence does not apply
with same vigor in the offence under NI Act which entails
presumption against the accused. The Hon’ble Apex Court in the case
of Rohitbhai Jivanlal Patel v. State of Gujarat : (2019) 18 SCC 106
had observed as under:
“12. According to the learned counsel for the appellant-accused,
the impugned judgment is contrary to the principles laid down by
this Court in Arulvelu [Arulvelu v. State, (2009) 10 SCC 206 :
(2010) 1 SCC (Cri) 288] because the High Court has set aside the
judgment of the trial court without pointing out any perversity
therein. The said case of Arulvelu [Arulvelu v. State, (2009) 10
SCC 206 : (2010) 1 SCC (Cri) 288] related to the offences under
Sections 304-B and 498-A IPC. Therein, on the scope of the powers
of the appellate court in an appeal against acquittal, this Court
observed as follows : (SCC p. 221, para 36)
“36. Careful scrutiny of all these judgments leads to the
definite conclusion that the appellate court should be very
slow in setting aside a judgment of acquittal particularly in
a case where two views are possible. The trial court
judgment cannot be set aside because the appellate court’s
view ismore probable. The appellate court would not be
justified in setting aside the trial court judgment unless it
arrives at a clear finding on marshalling the entire
evidence on record that the judgment of the trial court is
either perverse or wholly unsustainable in law.”
The principles aforesaid are not of much debate. In other words,
ordinarily, the appellate court will not be upsetting the judgment of
acquittal, if the view taken by the trial court is one of the possible
views of matter and unless the appellate court arrives at a clear
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finding that the judgment of the trial court is perverse i.e. not
supported by evidence on record or contrary to what is regarded
as normal or reasonable; or is wholly unsustainable in law. Such
general restrictions are essentially to remind the appellate court
that an accused is presumed to be innocent unless proved guilty
beyond reasonable doubt and a judgment of acquittal further
strengthens such presumption in favour of the accused. However,
such restrictions need to be visualised in the context of the
particular matter before the appellate court and the nature of
inquiry therein. The same rule with same rigour cannot be
applied in a matter relating to the offence under Section 138 of
the NI Act, particularly where a presumption is drawn that the
holder has received the cheque for the discharge, wholly or in
part, of any debt or liability. Of course, the accused is entitled to
bring on record the relevant material to rebut such presumption
and to show that preponderance of probabilities are in favour of
his defence but while examining if the accused has brought about
a probable defence so as to rebut the presumption, the appellate
court is certainly entitled to examine the evidence on record in
order to find if preponderance indeed leans in favour of the
accused.”
(emphasis supplied)
20. It is also well settled that once the execution of the cheque is
admitted, the presumption under Section 118 of the NI Act that the
cheque in question was drawn for consideration and the presumption
under Section 139 of the NI Act that the holder of the cheque/
respondent received the cheque in discharge of a legally enforceable
debt or liability are raised against the accused [Ref. Rangappa v. Sri
Mohan:(2010) 11 SCC 441].
21. The Hon’ble Apex Court in Rajesh Jain v. Ajay Singh : (2023)
10 SCC 148, while discussing the appropriate approach in dealing
with presumption under Section 139 of the NI Act, observed the
following :
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“54. …. Once the presumption under Section 139 was given effect
to, the courts ought to have proceeded on the premise that the
cheque was, indeed, issued in discharge of a debt/liability. The
entire focus would then necessarily have to shift on the case set up
by the accused, since the activation of the presumption has the
effect of shifting the evidential burden on the accused. The nature
of inquiry would then be to see whether the accused has discharged
his onus of rebutting the presumption. If he fails to do so, the court
can straightaway proceed to convict him, subject to satisfaction of
the other ingredients of Section 138. If the court finds that the
evidential burden placed on the accused has been discharged, the
complainant would be expected to prove the said fact
independently, without taking aid of the presumption. The court
would then take an overall view based on the evidence on record
and decide accordingly.
55. At the stage when the courts concluded that the signature had
been admitted, the court ought to have inquired into either of the
two questions (depending on the method in which the accused has
chosen to rebut the presumption) : Has the accused led any defence
evidence to prove and conclusively establish that there existed no
debt/liability at the time of issuance of cheque? In the absence of
rebuttal evidence being led the inquiry would entail : Has the
accused proved the non-existence of debt/liability by a
preponderance of probabilities by referring to the “particular
circumstances of the case”?
xxx xxx xxx
57. Einstein had famously said:
“If I had an hour to solve a problem, I’d spend 55 minutes thinking
about the problem and 5 minutes thinking about solutions.”
Exaggerated as it may sound, he is believed to have suggested that
quality of the solution one generates is directly proportionate to
one’s ability to identify the problem. A well-defined problem often
contains its own solution within it.
58. Drawing from Einstein’s quote, if the issue had been properly
framed after careful thought and application of judicial mind, and
the onus correctly fixed, perhaps, the outcome at trial would have
been very different and this litigation might not have travelled all
the way up to this Court.
xxx xxx xxx
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61. The fundamental error in the approach lies in the fact that the
High Court has questioned the want of evidence on the part of the
complainant in order to support his allegation of having extended
loan to the accused, when it ought to have instead concerned itself
with the case set up by the accused and whether he had discharged
his evidential burden by proving that there existed no debt/liability
at the time of issuance of cheque.”
(emphasis supplied)
22. At the outset, since the execution and signature on the cheque is
not disputed, presumption under Section 138 and 118 of the NI Act is
raised against the respondent and in favour of the appellant.
23. On a perusal of the record, it is seen that right from the time of
framing of notice, the statement of the respondent under Section 313
of the CrPC, and during the course of the trial, the respondent denied
taking any loan from the appellant. The respondent, however, did not
dispute the issuance of the cheque in question, or his signatures on the
cheque. He consistently maintained that it was in fact the respondent
who had advanced the loan to the appellant.
24. During cross examination, the respondent deposed that he has
been doing the business of Tours and Travels for the last 10 years and
also paid Income Tax for the years 2013-2018. He deposed that he
possessed two vehicles, and that these vehicles were being driven by
drivers. He deposed that the house is his ancestral property. He
maintained that the signatures in the cheque were filled by him but
stated that after the cheque got bounced, he made a police complaint
against the appellant. It was noted that while the respondent had not
filed the copy of such complaint in the court record, he voluntarily
stated that he had a copy with him. It was further noted that the
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counsel for the appellant did not ask the respondent to produce the
copy of the complaint before the Court.
25. It is pertinent to note that the presumptions under Section 118
and 139 of the NI Act are not absolute, and may be controverted by
the accused. In doing so, the accused ought to raise only a probable
defence on a preponderance of probabilities to show that there existed
no debt in the manner so pleaded by the complainant in his complaint/
demand notice or the evidence. Once the accused successfully raises a
probable defence to the satisfaction of the Court, his burden is
discharged, and the presumption ‘disappears.’ The burden then shifts
upon the complainant, who then has to prove the existence of such
debt as a matter of fact. The Hon’ble Apex Court in Rajesh Jain v.
Ajay Singh (supra), in this regard has observed as under:
“41. In order to rebut the presumption and prove to the contrary,
it is open to the accused to raise a probable defence wherein the
existence of a legally enforceable debt or liability can be
contested. The words ‘until the contrary is proved’ occurring in
Section 139 do not mean that accused must necessarily prove the
negative that the instrument is not issued in discharge of any
debt/liability but the accused has the option to ask the Court to
consider the non-existence of debt/liability so probable that a
prudent man ought, under the circumstances of the case, to act
upon the supposition that debt/liability did not exist.
[Basalingappa Vs. Mudibasappa (AIR 2019 SC 1983) See also
Kumar Exports Vs. Sharma Carpets (2009) 2 SCC 513]
xxx xxx xxx
44. The accused may adduce direct evidence to prove that the
instrument was not issued in discharge of a debt/liability and, if
he adduces acceptable evidence, the burden again shifts to the
complainant. At the same time, the accused may also rely upon
circumstantial evidence and, if the circumstances so relied upon
are compelling the burden may likewise shift to the complainant.
It is open for him to also rely upon presumptions of fact, for
instance those mentioned in Section 114 and other sections of theSignature Not Verified
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Evidence Act. The burden of proof may shift by presumptions of
law or fact. In Kundanlal’s case- (supra) when the creditor had
failed to produce his account books, this Court raised a
presumption of fact under Section 114, that the evidence, if
produced would have shown the non-existence of consideration.
Though, in that case, this Court was dealing with the presumptive
clause in Section 118 NI Act, since the nature of the presumptive
clauses in Section 118 and 139 is the same, the analogy can be
extended and applied in the context of Section 139 as well.
45. Therefore, in fine, it can be said that once the accused
adduces evidence to the satisfaction of the Court that on a
preponderance of probabilities there exists no debt/liability in the
manner pleaded in the complaint or the demand notice or the
affidavit-evidence, the burden shifts to the complainant and the
presumption ‘disappears’ and does not haunt the accused any
longer. The onus having now shifted to the complainant, he will
be obliged to prove the existence of a debt/liability as a matter of
fact and his failure to prove would result in dismissal of his
complaint case. Thereafter, the presumption under Section 139
does not again come to the complainant’s rescue. Once both
parties have adduced evidence, the Court has to consider the same
and the burden of proof loses all its importance. [Basalingappa vs.
Mudibasappa, AIR 2019 SC 1983; See also, Rangappa vs. Sri
Mohan (2010) 11 SCC 441]”
(emphasis supplied)
26. From a perusal of the record, it is apparent that the respondent
was acquitted of the offence under Section 138 of the NI Act chiefly
on the premise that on a juxtaposition of the financial status of both
the parties, the respondent appeared to be more financially sound that
the appellant.
27. The main thrust of the respondent’s case before this Court also
pertained to questioning the financial wherewithal of the appellant,
and her capacity to advance the loan in question. It was contended that
the respondent had been doing the business of Tours and Travels for
the past 10 years, had paid income tax for the years 2013-2018, owned
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two vehicles which were driven by the drivers. It was contended that
for the same reason, it was rightly observed by the learned ASJ that
the respondent was more economically sound in comparison to the
appellant.
28. The Hon’ble Apex Court in the case of Tedhi Singh v. Narayan
Dass Mahant : (2022) 6 SCC 735, in relation to the defence
pertaining to the financial capacity of the complainant to advance a
loan had observed as under:
“10. … The proceedings under Section 138 of the NI Act is not a
civil suit. At the time, when the complainant gives his evidence,
unless a case is set up in the reply notice to the statutory notice
sent, that the complainant did not have the wherewithal, it cannot
be expected of the complainant to initially lead evidence to show
that he had the financial capacity. To that extent, the courts in our
view were right in holding on those lines. However, the accused
has the right to demonstrate that the complainant in a particular
case did not have the capacity and therefore, the case of the
accused is acceptable which he can do by producing independent
materials, namely, by examining his witnesses and producing
documents. It is also open to him to establish the very same
aspect by pointing to the materials produced by the complainant
himself. He can further, more importantly, achieve this result
through the cross-examination of the witnesses of the
complainant. Ultimately, it becomes the duty of the courts to
consider carefully and appreciate the totality of the evidence and
then come to a conclusion whether in the given case, the accused
has shown that the case of the complainant is in peril for the
reason that the accused has established a probable defence.”
(emphasis supplied)
29. In line with the dictum of the Hon’ble Apex Court in Tedhi
Singh v. Narayan Dass Mahant (supra), the initial burden to
demonstrate whether the complainant possessed the financial means to
advance the loan in question does not rest upon the complainant but on
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the accused unless a case is set up the accused in the reply to the
statutory notice. The accused can however even subsequently question
the financial wherewithal of the complainant either by producing
independent materials like examining his witnesses or producing
documents. The accused is also permitted to demonstrate the financial
incapability of the complainant to advance the loan in question by
pointing to the materials produced by the complainant or by cross-
examination of the witnesses of the complainant.
30. In the present case, the learned ASJ, after considering the rival
submissions made by the both the parties, noted that the respondent is
more economically sound in comparison to the respondent. It was
noted that the appellant only had 8 buffaloes, was not an income tax
assessee, and her husband was an agricultural labourer. It was noted
that the appellant could not prove any bank entry to show that she had
withdrawn the said amount. It was further noted that appellant further
failed to put it to the respondent on what date the loan was advanced.
31. In the opinion of this Court, however, since the issuance or the
signatures on the subject cheque were not disputed, it was not on the
appellant to establish her financial means to advance the said loan or
cross-examine the respondent on the point of the purpose or date of
advancement of the loan in question.
32. Once the execution and issuance of the cheque is not denied, the
Courts ought to proceed on the presumption that the cheque was
issued in discharge of a legally enforceable debt/liability. It is then
entirely up to the respondent to raise a probable defence on a
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preponderance of probabilities to show that there existed no
debt/liability in the manner as pleaded by the complainant. Once the
accused successfully raises a probable defence, only then does the
burden shift upon the complainant, who then, has to show the
existence of the debt as a matter of fact.
33. In the present case, except for the averments made by the
respondent, no material is led to demonstrate that the appellant did not
possess the financial wherewithal to advance the said loan in question.
Even at the stage of cross-examination, no question is put to the
appellant to indicate that she did not possess the financial means to
advance the loan in question. For this reason, in the opinion of this
Court, the burden never shifted upon the appellant to demonstrate that
she possessed the means to advance the said loan.
34. Further, it is also the case of the respondent that it was infact he
who had handed over the cheque to the complainant since she had
approached the respondent seeking a loan. It is the respondent’s own
case that he had handed over the cheque to the complainant since she
is the bua of her wife. It is further the case of the respondent that he
handed over the cheque to the complainant on the condition that she
would produce a guarantor for the loan amount, and since she failed to
produce the guarantor, the respondent did not honour the cheque in
question. However, in the opinion of this Court, the contention in itself
prima facie appears to be implausible.
35. The respondent could simply not have issued the cheque to the
appellant or could have deferred the issuance of the cheque until such
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time till the appellant produced a guarantor. Conversely, the
respondent could simply have issued stop payment instructions to the
banker while mentioning that the loan was not to be honoured for the
non-fulfilment of requisite conditions. The subject cheque, upon
presentation, was dishonoured for the reason “funds insufficient.” It is
highly peculiar why the respondent, in the first place, would issue a
duly filled and signed cheque when he knew that the honouring of the
subject cheque was condition subsequent to the appellant producing a
guarantor.
36. In fact, it is also the respondent’s own case that since the
appellant did not produce any written document to manifest the
existence of a loan agreement, the same casts a doubt in the story of
the appellant. This argument, in the opinion of this Court, is
paradoxical in nature. At one place, the respondent questions the
veracity of the case of the appellant on the ground that she failed to
produce any written agreement to substantiate the existence of any
loan and in the same breath, the respondent himself fails to produce
any written document/ agreement to show that he had advanced the
duly executed cheque to the appellant as a loan subject to the appellant
producing a guarantor.
Conclusion
37. In view of the foregoing discussion, this Court is of the opinion
that the respondent failed to rebut the presumptions raised against him
under Sections 139 and 118 of the NI Act.
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38. The impugned judgment dated 24.07.2019, acquitting the
respondent of the offence under Section 138 of the NI Act is
accordingly set aside.
39. List on 16.01.2025 for further directions. The respondent is
directed to be present on the next date of hearing.
AMIT MAHAJAN, J
DECEMBER 24, 2024
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