‘u4i24, 5:46 PM ‘ay vs. Sonia Mahotra Ce No, 236802019... on 10 Janwary, 2020 ‘ atin) (etter Premium Members Advanced Search Case Removal Search 2 coca Mow A Section 18 in The Mago struments Act, 184 Section 180 In The Negotiable struments Act 184 Aheton 18 Thtndan Contec Ac 32 Seton 138 in Theintan Contact AC 1872 Get this document in POF | Print ona ile/printer || Download Court Copy ‘inn. onTanaon Select Langage > poet Soe rat Take noes as you read a judgment using our Vonal Legal Assistant ond get emai alerts whenever a re judgment matches your query (Query Alert Serie). Tryout our Premium Member services ~ Free or one month Delhi District Court [Ajay vs Sonia Malhotra Ce No. 33680/2019 .. on 10 January, 2020 IL THE COURT OF HR PRAWAT MAR 20SHE, HETHOPOLTTAN Inte fom no. uswtzensranis ce Wo. 33680718 Ste Asay Bye she Kaptan Singh tye £26, On Vihar txtenston Ustan nagar, Row bln, onptainant nt. Sontawaihotra We 'sh. Rajesh Malhotra Wo s1/386, top Floor, Ota tahoe Naga, Opp. Guru hear Das Public School, Tilak Hagar, Rew Delhi accued (a) oFrence cowiatned of or proved sae a2. set (2) pea of acused Pleated nt gu (0) bate of registration of case so.es.2e8 & (0) bate of conclusion of angments aiaz.ans ritpssingiankanoon orgidoc!18522640 +4‘u4i24, 5:46 PM ‘ay vs. Sonia Mahotra Ce No, 236802019... on 10 Janwary, 2020 (5) date of 10.01.2020 (6) Final order Acquitted Ajay Vs. Sonia Malhotra cc No. 3680/2018 Page no. 2 of 32 uncon Vide this judgement 1 shall dispose off the present complaint case filed under section 138, [Negotiable Instrument Act, 1881 (hereinafter referred to as ‘the Act). 2. Dehors unnecessary details, the factual matrix of the prosecution case is as follows: 2.1 The accused being sisterinlaw of the complainant requested the complainant to arrange a sum of £6,00,000/ (Six Lac) on 18.09.2013 and forthe same, the accused executed # Promissory note in the form of Receipt- ‘cum declaration and in lieu of the same, the complainant handed over a sum of & 6,00,000! (Six lac) in the presence of witnesses to the accused, The accused had promised that the aforesaid amount shall be retumed within a period of one year. However, the accused did not retur the said amount and always kept promising to return the same along with some increased amount, 2.2 The complainant regularly visited the house of the accused and finally in the month of March 2016, the accused issued a cheque bearing No. 827180 dated 19.03.2016 of %6,50,000/ drawn on Andhra Bank, Janakpuri in discharge of her legal liability in favour ofthe complainant 2.3 The complainant presented the aforementioned cheque before his banker for encashment but the aforementioned cheque was retumed unpaid with the reason Ajay Vs. Sonia Malhotra CC No. 3680/2019 Page no. 2 of 32 Funds Insufficient’ vide cheque returning memo dated 21.03.2016, 2.4 Thereafter the complainant issued a legal notice dated 02.04.2016 to the accused, under section 138 of the act. The legal notice was duly served upon the accused. The accused had failed to make the payment of cheque amount within 15 days of receipt of the same. Thus, the present complaint case. 5. The present complaint case was registered on 19.05.2016 and the pre summoning evidence was led by the complainant on the same day. After considering the presummoning evidence by affidavit and the documents placed on record by the complainant, the court was pleased to summon the accused vide its ‘order passed on the same day. 4, The accused entered the appearance on 03.10.2016. Notice Uls 251 of the Code Of Criminal Procedure (hereinafter referred to as the Code) was framed against the accused on 22.04.2017, t0 which the accused pleaded not guilty and claimed trial. Plea of defence of the accused was recorded simultaneously wherein the accused admitted her signatures on the impugned cheque and admitted that she had received the legal notice, It was however stated by the accused that she had not filled other particulars inthe cheque and the cheque in question was given to the complainant who is her brotherin- Jaw (Jia) as he wanted to take loan from someone and a cheque was required for that transaction. It ‘was further stated thatthe subject cheque was given as a security alongwith certain other documents in 2014. The accused denied her lability towards the complainant. 5. The accused seeks exoneration on these grounds Ajay Vs. Sonia Malhotra CC No, 33680/2019 Page no. 3 of 32 6, Thereafter, an application Us 145(2) of the Act was moved by the accused on 22.04.2017 and the same was allowed vide order passed on the same day whereafter the matter was fixed for cross- ‘examination of the complainant. ritpssingiankanoon orgidoc!18522640‘u4i24, 5:46 PM ‘ay vs. Sonia Mahotra Ce No, 236802019... on 10 Janwary, 2020 7. On 05.08.2017 the complainant adopted the contents of his PSE by way of affidavit which is Ex. CWI/A as his examinationinchief and also relied upon the documents Ex. CWI/1 to Ex. CWLI7. The ‘complainant was partly crossexamined and the rest cross was deferred and the complainant was thereafter crossexamined on 16.12.2017 whereafter the CE was closed vide separate statement of the ‘complainant 8. The statement of the accused under Section 313 read with Section 281 of the Code was recorded on (01.02.2018, in which all the incriminating evidence along with all the exhibited documents were put to the aceused. In her statement the accused stated inter alia that she had not taken any loan from the ‘complainant, The accused further stated that the cheque in question was taken by the complainant on the pretext that he is going to lake loan from someone and the said cheque is required in the said transaction, It was further stated by the accused that she had given the subject cheque to the ‘complainant at that time without filling the name, date and amount, It was also stated by the accused that prior to that, some other blank documents for the said purpose were signed by the her at the instance of the complainant, She denied having any legal debt towards the complainant, 9, The matter was thereafter fixed for DE, 10. The accused got one Shravan Kumar, Assistant Manager, Andhra Bank, Ajay Vs. Sonia Malhotra CC No. 33680/2019 Page no. 4 of 32 Janakpuri Branch, New Delhi, examined in her defence as DWI and no one else. He was examined, crossexemined and discharged on 17.01.2019. DWI had furnished the bank account statement of Rajesh Malhotra bearing account No. 0268101101834, from 02.07.2014 to 31.03.2016. The same was taken on record and were Ex. DWI/I (colly) running into 20 pages. The DE was finally elosed on 03.07.2019. The matter was, therealter, fixed for final arguments. 11. The final arguments in full were heard at ength by me from both the partis on 12.12.2019 and the ‘matter was thereafter fixed for clarfication/orders on 21.12.2019 and on the said day undersigned was ‘on leave. Thereafter, the matter was listed for today i. 10.01.2019, 12, Witnesses examined by the Complainant 12.1 The complainant himself as CWI and no one else Documentary evidence relied upon by the Complainant 13,1. PreSummoning evidence by affidavit Which is Fx, CWI/A; 13.2, ReceiptoumDeclaration agreement which is Ex, CWI/1; 13.3. Original ‘Cheque whieh is Ex. CWI; 14, Retuning Memo which is Ex. CW1/3; 13.5. Legal Notice which is Ex. CWI/14; 156, Postal Receipts whichis Ex. CWIIS and Ex. CW/6; 13.7. Tracking report which is EX. CWI/7 Aiay Vs, Sonia Malhotra CC No, 33680/2019 Page no, 5 of 32 14, Witnesses examined by the Accused 14.1, The accused got one Shravan Kumar, Assistant Manager, ‘Andhra Bank, Janakpuri Branch, New Delhi, examined and no one else and relied upon Ex. DWU/I (cally) 15. This in a nutshell is the factual expose” 16, Before adverting to scanning the evidence under the lens ofthe law pertaining tothe lis at hand, let us revisit the legal benchmark to be satisfied, enunciated in Section 138 of the Act : Dishonour of ‘Cheque for insufficiency, ct. of funds in the account: ritpssingiankanoon orgidoc!18522640‘u4i24, 5:46 PM ‘ay vs. Sonia Mahotra Ce No, 236802019... on 10 Janwary, 2020 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 retumed 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 Ajay Vs. Sonia Malhotra CC No. 33680/2019 Page no. 6 of 32 deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term. ‘which may extend 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 itis 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 re ‘bank regarding the retum of the cheque as unpaid; and cipt of information by him from the (©) the drawer of such cheque fails to make the payment ofthe 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. Explanation~For the purposes of this section, "debt or other liability” means a legally ‘enforceable debt or other liability Ajay Vs. Sonia Malhotra CC No, 33680/2019 Page no. 7 of 32 17. Thus, the essential ingredients that can be culled out from the statutory provision are: (@ Person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out ofthat account; (i) The cheque should have be liability; other issued for the discharge, in whole or in part, of any debt etiod of six months fom the date on which it (GiiyThat cheque has been presented to the bank within a p is drawn or withia the petiod ofits validity whichever is earlier, (iv) That cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exeeeds the amount arranged to be paid from that account by an agreement made withthe bank; (¥) The payee or the holder in due course of the cheque 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 30 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; (vi) The drawer of such cheque fails to make payment of the said amount of money Ajay Vs, Sonia Malhotra CC No. 33680/2019 Page no, 8 of 32 to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice. ritpssingiankanoon orgidoc!18522640‘u4i24, 5:46 PM ‘ay vs. Sonia Mahotra Ce No, 236802019... on 10 Janwary, 2020 18, Being cumulative, it goes without saying that itis only when all the aforementioned ingredients are satisfied, the person who had drawn the cheque can be deemed to have committed an offence under Section 138 of the Act 19, 1 would now appreciate the facts in the light of the law mentioned above: (@) Person must have drawn @ cheque on an account maintained by him in # bank for payment of a certain amount of money to another person from out ofthat account; As far as the first ingredient of Section 138 of the Act is concemed, it is nowhere disputed that the accused had drawn the cheque on the account maintained by her. So, the first ingredient stands satisfied in the light of admissions of the accused by necessary implications 20. (i) The cheque should have been issued for the discharge, in whole or in part, of any det liability; Let us now examine the evidence placed on record by both the partes in order to satisly the second ingredient of the offence. In order to correctly appreciate this ingredient in the light of the evidence placed on Ajay Vs. Sonia Malhotra CC No. 33680/2019 Page no, 9 of 32 record by both the partes, it is necessary to revisit the provision under Section 118 and Section 139 of the Act. Section 118 of the Act inter alia provides: Presumptions as to negotiable instruments: Unil the contrary is prove that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotisted or transferred was accepted, indorsed, negotiated or transferred for consideration; ¢ Following presumptions shall be made: (a) of eonsideration in favour of holder Section 139 of the Act provides: "Presumpt hall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 forthe discharge, in whole or in part, of any debt or other liability" 21, It is clear from the conjoint reading of the both the provisions that ordinarily in the Cheque dishonouring cases, what the courts ought to consider is whether the ingredients of the offence ‘enumerated in Section 138 of the Act have been met and Ajay Vs. Sonia Malhotra CC No. 33680/2019 Page no, 10 of 32 ifso, whether the accused was able to rebut the statutory presumption contemplated by Section 139 of the Act, 22, Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies @ strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation, 23. As far as standard of proof requited to rebut the presumption raised under $s.118 and 139 of the ‘Act is concerned, it has been laid down in the umber of judgments rendered by the Hon'ble Supreme Court of India that a defence of non existence of lability or the cheque being given as a security, ‘cannot be taken at the mere ipse dixit of the accused. The accused has to prove his innocence either by adducing his own evidence or by punching holes inthe case of the complainant, 24, Itwas held by Hon'ble Supreme Court in the case titled as Rangappa v. Sri Moban (2010) 11 SCC 441 that: "26, In the light ofthese extracts, we are in agreemer presumption mandated by Scotion 139 of the Act does indeed include the existence of a legally ‘enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that with the respondent claimant that the ritpssingiankanoon orgidoc!18522640‘u4i24, 5:46 PM ‘ay vs. Sonia Mahotra Ce No, 236802019... on 10 Janwary, 2020 cease since it is based on the specific facts and circumstances therein. As noted in Ajay Vs. Sonia ‘Malhotra CC No. 33680/2019 Page no. 11 of 32 the citations, this is of course in the nature of a rebuttal presumption and itis open to the accused to raise a defence wherein the existence ofa legal ‘enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant 27. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance ‘of the legislative objective of improving the credibility of negotiable instruments, While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the defendantaccused cannot be expected to discharge an unduly high standard of proof. 28, In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary ‘burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused hhas to rebut the presumption under Section 139, the standard of proof for doing so is that of "preponderance of probabilities". Therefore, if the Ajay Vs. Sonia Malhotra CC No. 33680/2019 Page tno, 12 of 32 accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused ccan rely on the materials submitted by the complainant in order to raise such a defence and it is ‘conceivable that in some cases the accused may not need to adduce evidence of his/her own." 25. Coming back to the facts in the present ease, the complainant had reproduced the contents of his ‘complaint in his evidence by way of affidavit which he adopted as his examination in chief 26. The complainant was crossexamined extensively on behalf of the accused. 27. Now as far asthe legally enforceable liability ofthe accused towards the complainant is concerned, ithas been inter alia argued by the Ld. Counsel for the complainant that a loan of 26,00,000/ was taken by the accused from the complainant on the basis of an agreement which contains a receipt cum declaration which is on record as Ex. CWI/I. It was further argued that the accused has admitted her liability in the said document Ex. CWI/I. It has further been argued that the accused had admitted issuing the cheque and signing the same in her statement under Section 313 of the Code. It was also argued that the accused failed to bring forth any evidence to the contrary 29 Per contra it has be time barred as the loan was allegedly taken by the accused on 22.08.2010 and the ag; signed on 18.09.2013. Hence it has been argued Ajay Vs. Sonia Malhotra CC No, 33680/2019 Page no. 3 of 32 that the complainant cannot prosecute the accused under Section 138 of the Act for @ loan argued on behalf of the accused that the loan given by the complainant was sment was, Which has become time barred, Secondly it has been argued by the Ld. Counsel for the accused that it has come in the evidence of DWI who is the bank official as well as in Ex, DWI/I that the cheque ‘book from which the subject cheque was given was issued on 02.07.2014 whereas the complainant has alleged that the subject cheque was given to him on 18.09.2013, This anomaly, it has been argued, has nowhere been explained by the complainant and thus renders his ease unworthy if eredence, It has also ‘been argued that complainant could not show his financial capacity to give the said loan despite being questioned, Lastly it has been argued that the accused has successfully ereated preponderance of probabilities and the complainant has failed to discharge the burden of proof beyond any reasonable doubt. ritpssingiankanoon orgidoc!18522640 gS ena‘u4i24, 5:46 PM ‘ay vs. Sonia Mahotra Ce No, 236802019... on 10 Janwary, 2020 30. I have heard the Ld. Counsels of both the parties and given my thoughtful consideration to them. 31. In the present case, the accused has mainly three legs of defence, One that the case is not ‘maintainable as the complainant seeks to recover the loan which has become time barred. Two, the ‘cheque book from which the subject cheque is alleged to be given was issued on 02.07.2014 whereas the subject cheque is alleged to be given on 18.09.2013. Three, the complainant had failed to show his solvency to the extent of loan allegedly given by the complainant to the accused. I shall be dealing with these three defences separately and onebyone. 32. Let us first deal with the first defence of the accused regarding her loan being time barred and hhence the present complaint is not maintainable, The present Ajay Vs. Sonia Malhotra CC No, 3680/2019 Page no. 14 of 32 question of law has been exclusively dealt with by the Hon'ble High Court Of Bombay in the case titled as Dinesh B. Chokshi Versus Rahul Vasudeo Bhatt and another (2012 SCC OnLine Bom 1585). In the said case the Hon'ble High Court had dealt with two questions of law, these are: (@ Does the issuance of a cheque in repayment of time barred debt amounts to a written promise to pay the said debt within the meaning of section 25(3) of the Indian Act, 18727 Gi) IF it amounts to such a promise, does such a promise, by itself, ereate any legally enforceable debt or other liability as contemplated by section 138 of the Negotiable Instruments Act, 1881? ‘twas thereafter held by the court that 9, Thus, subsection (3) of section 25 of the Contract Act is an exception to the general rule that an agreement made without consideration is void. Subsection (3) of section 25 of the Contract Act applies to a case where there is a promise made in writing and signed by a person to be charged therewith to pay wholly or in part a debt which is barred by law of limitation, A promise covered by sub section (3) becomes enforceable agreement notwithstanding the fact that it is a promise to pay a debt which is already barred by limitation. Thus, subsection (3) of section 25 of the Contract Act applies to a promise ‘made in writing which is signed by a person to pay a debt which cannot be recovered by reason of expiry of period Ajay Vs. Sonia Malhotra CC No, 33680/2019 Page no. 15 of 32 of limitation for filing 4 suil for recovery. Therefore, if debtor after expiry of the period of limitation provided for recovery ‘of debt makes a promise in writing signed by him to pay the debt wholly or in par, the said promise being governed by subsection (3) of section 25 of the Contract Act becomes an agreement which is ‘enforceable in law, By viriue of the promise governed by subsection (3) of section 25 of the Contract ‘Act, the time barred debt becomes enforceable. The subsection (3) of section 25 of the Contract Act does not apply to promise to pay all categories of debls which are not enforceable in law, It applies only to a debt which is not recoverable in law only on the ground of bar created by the law of limitation, Thus, the promise under subsection (3) of section 25 of the Contract Act will not validate a debt which is not enforceable on a ground other than the ground of ber of limitation, For example, if there is a promise to pay an amount advanced for immoral purposes which is hit by section 23 of the Contract Act, it will not attract subsection (3) of section 25 of the Contract Act and the said provision ‘will be attracted only when a promise is made in writing and signed by the promisor to pay a debt which is barred by limitation 12, The decision of the Apex Court in the case of A.V. Murthy v. B.S. Nagabasavanna (supra) holds that a promise to pay a time barred debt is a valid contract, Now, the question is when a cheque is «drawn in discharge of a debt or monetary liability which is already barred by law of limitation, whether it will amount to a promise within the Ajay Vs. Sonia Malhotra CC No. 33680/2019 Page no. 16 of 32 ritpssingiankanoon orgidoc!18522640 gS m4‘u4i24, 5:46 PM ‘ay vs. Sonia Mahotra Ce No, 236802019... on 10 Janwary, 2020 ‘meaning of subsection (3) of section 25 of the Contract Act? We find that the issue is no more res integra. The issue has been dealt with by the Apex Court in the ease of National Insurance Company Limited v. Seema Malhotra (supra). This was a case which arose out of a contract of insured of the Appellant Company before the Apex Court entered into an insurance contract on 21st December, 1993 for insuring a Maruti Car. On the same day, a cheque representing the premium was issued by the insured against which a Cover Note was issued by the Appellant Company. In an accident ‘which occurred on 31st December, 1993, the insured died and the car was also damaged. While dealing With the contract of insuranee, in Paragraph 17 of the decision, the Apex Court held thus: "17. In a contract of insurance when the insured gives a cheque towards payment of premium or part of the premium, such a contract consists of reciprocal promise. The drawer of the cheque promises th that the cheque, on presentation, would yield the amount in cash, It cannot be forgotten that a cheque is 4 bill of exchange drawn on a specified banker. A bill of exchange is an instrument in writing containing an unconditional order directing a certain person to pay a certain sum of money to a certain person. It involves a promise that such money would be paid ssuranee, The 15, On plain reading of section 13 of the said Act of 1881, a negotiable instrument does contain a promise to pay the amount mentioned therein, The promise is given by the drawer. Under Ajay Vs. Sonia Malhotra CC No, 3368012019 Page no, 17 of 32 seotion 6 of the said Act of 1881, a cheque is a bill of exchange drawn on a specified banker, The drawer of a cheque promises to the person in whose name the cheque is drawn or to whom the cheque is endorsed, that the cheque on its presentation, ‘would yield the amount specified therein, Hence, it will have to be held that a cheque is a promise ‘within the meaning of subsection (3) of section 25 of the Contract Aet, What follows is that when @ cheque is drawn to pay wholly or in part, a debt which is not enforceable only by reason of bar of limitation, the cheque amounts to a promise governed by the subsection (3) of section 25 of the Contract Act. Such promise which is an agreement becomes exception to the general rule that an agreement without consideration is void. Though on the date of making such promise by issuing a ‘cheque, the debt which is promised to be paid may be already time barred, in view of subscetion (3) of section 25 of the Contract Act, the promise/agreement is valid and, therefore, the same is enforceable, ‘The promise to pay time barred debt becomes a valid contract as held by the Apex Court in the case of A.V. Moorthy (supra). Therefore, the first question will have to be answered inthe affirmative. 21. Therefore, while answering, second question, we are specifically dealing with a case of promise created by a cheque issued for discharge of a time barred debt or liability. Once itis held that a cheque drawn for discharge of a time barred debt creates a promise which becomes enforceable contract, it ccannot be said that the Ajay Vs. Sonia Malhotra CC No. 33680/2019 Page no. 18 of 32 cheque is drawn in discharge of debt or liability which is not legally enforceable. The promise in the form of a ‘cheque drawn in discharge of a time barred debt or liability becomes enforceable by virtue of sub- section (3) of section 25 of the Contract Act. Thus, such cheque becomes a cheque drawn in discharge ‘ofa legally enforceable debt as contemplated by the explanation to section 138 of the said Act of 1881 Therefore, even the second question will have to be answered inthe affirmative. Hence itis clear from the above enunciation of law that not only the cheque given in discharge of a timebarred debt is a promise within the meaning of Section 25(3) of the Indian Contract Act, but the ‘same become legally recoverable by virtue of Section 25(3) of the Indian Contract Act, Accordingly, the first defence of the accused that the present case is not maintainable due to debt being timebarred fails to withstand the test of law ofthe land, 33, Having discussed and discredited the frst defence, I shall now deal with the second leg of defence ‘of the accused. It has been inter alia argued on behalf of the aecused that the cheque book was issued to the accused on 02.07.2014 whereas the complainant has alleged that the subject cheque was given to hhim on 18.09.2013. Now as far as the complaint of the complainant and his affidavit of evidence which ritpssingiankanoon orgidoc!18522640‘u4i24, 5:46 PM ‘ay vs. Sonia Mahotra Ce No, 236802019... on 10 Janwary, 2020 is his examination in chief is eoncermed, it has been alleged by the complainant that the accused took a friendly loan of %6,00,000/ and executed a promissory notelteceipt cum declaration on 18.09.2013 in para 3 of his affidavit, Further in Ajay Vs. Sonia Malliotra CC No, 33680/2019 Page no. 19 of 32 para 5 of his affidavit of evidence, it has been inter alia deposed by the complainant that finally in the month ‘of March 2016, the accused issued a cheque bearing no. 827180 dated 19.03.2016 of 26,50,000/ drawn ‘on Andhra Bank, Janak Puri, New Delhi in favour of the deponent to discharge her liability. Curiously ‘enough, this stand of the complainant changes in its entirety in his cross examination dated 05.08.2017. twas inter alia deposed by the complainant as CWI that he had paid %6 lac to the accused on 18.09.2013. At payment the agreement Ex. CWI was executed, It was further deposed by the complainant that at the at time his wife, mother, father and other friends were present and on the day of time of taking the loan the accused had issued a PDC i.e. Cheque in question in the sum of 86 lac and again said of 86.5 lac. Further it was deposed by the complainant that at the time of issuance of the c’cheque the column of the date was blank and he filled the same at the time of its presentation on 19.03.2016. Now this contradiction in the ease of the iplainant as highlighted by the Ld. Counsel of the accused las nowhere been addressed by the complainant anywhere. Moreover, the complainant has not bothered to off ran explanation on the said contradiction by bringing forth any other evidence. On the contrary the complainant hed contented himself by merely getting himself examined he and failed to bring any eye witness to testify in his behalf when there were many eye witnesses as per the ‘complainant's own deposition, These acts and omissions on the part of complainant makes his ease selfdestructiv. 34, In a criminal trial under Section 138 of the Act, it is necessary that the execution of the cheque ‘against the legal liability should be proved by presenting the evidence which is ievocable, ‘unblemished and of impeccable character. Mere Ajay Vs. Sonia Malhotra CC No, 33680/2019 Page no. 20 of 32. production of the cheque cannot make the case of the complainant sacrosanct and impregnable, All it does is raises a rebuttable presumption inthe favour of the complainant but it does not absolve him from his duty to present an unassailable, trustworthy and cogent case. Unfortunately, in the present case the complainant has ended up destroying his own credibility by his own statements, In addition to that, when the accused got DW1 examined in her defence, the complainant did not seck any explanation on the fact of issuance of the cheque book from which the subject cheque is alleged to be given. The only impression it creates is that the same was a wilful and a deliberate omission done ‘with the intention of shielding the truth from being revealed, 35. The third defence of the accused is that the complainant did aot have the financial capability to ‘erant the loan of 86 lac to the accused. Under normal circumstances the financial capacity of the accused cannot be questioned. However, if the accused has been able to ereate a preponderance of probability and a doubt regarding the financial capability of the complainant then it becomes incumbent upon th understand this aspect of financial capability of the complainant, itis appropriate to quote the law laid complainant to show his solvency to the extent of the oan amount. In order to down in two most crucial judgments of the Hon'ble Supreme Court on tis aspect. It was inter alia held by Hon'ble Supreme Court in Rohitbhai Jivanlal Patel v. State Of Guajarat and Another 2019 SCC OnLine SC 389 that 21, In the case at hend, even after purportedly drawing the presumption under Section 139 of the NI Act, the Trial Court Ajay Vs. Sonia Malhotra CC No. 3680/2019 Page no. 21 of 32 proceeded to question the want of eviden fon the part of the complainant as regards the source of funds for ‘advancing loan to the accused and want of examination of relevant witnesses who allegedly extended hhim money for advancing it to the accused, This approach of the Trial Court had been at variance with the principles of presumption in law. After such presumption, the onus shifted to the accused and unless the accused had discharged the onus by bringing on record such facts and circumstances as t0 show the preponderance of probabilities tilting in his favour, any doubt on the complainant's case could ritpssingiankanoon orgidoc!18522640 gS ona‘u4i24, 5:46 PM ‘ay vs. Sonia Mahotra Ce No, 236802019... on 10 Janwary, 2020 not have been raised for want of evidence regarding the souree of funds for advancing lean to the accused appellant. The aspect relevant for consideration lad been as to whether the accusedappellant has brought on record such factsimateria/circumstances which could be of a reasonably probable defence. Im another judgment titled as Basalingappa v, Mudibasappa (2019) 5 SCC 418, wherein it was held that 25.2. The presumption uncler 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 preponderance of probabilities. 253. To rebut the presumption, itis open for the accused to rely on evidence led by him or the accused ‘can also rely on the materials Ajay Vs. Sonia Malhowa CC No. 33680/2019 Page no. 22 of 32 submitted by the complainant in order to raise a probable defence, Inference of preponderance of probabilities can be drawn not only fiom the materials brought on record by the parties but also by reference to the circumstances upon which they rely 30, We are of the view that when evidence was led before the court to indicate that apart from loan of Rs 6 lakhs given to the accused, within 2 years, amount of Rs 18 lakhs have been given out by the ‘complainant and his financial capacity being questioned, it was incumbent on the complainant to have ‘explained his financial capacity, Court cannot insist on a person to Iead negative evidence, The ‘observation of the High Court that trial cours finding that the complainant filed to prove his financial capacity of lending money is perverse, cannot be supported. We fail (o see that how the trial cours findings can be termed as perverse by the High Court when it was based on consideration of the ‘evidence, which was Ted on behalf of the defence, The pith of the two judgments quoted above is that, once a preponderance of probability has been established by the accused either by leading his own evidence or from the other materials placed on record and accompanying circumstances, the financial capability of the accused can be considered by the court in order to find the truth for itis no more res integra that every criminal tial is the voyage of discovery of which truth isthe quest. 35:1 In the present ease, itis not disputed that the complainant and the acused ate related to each other as brother and sister in law, Iti very much conceivable Ajay Vs. Sonia Malhotra CC No, 33680/2019 Page no. 23 of 32 that the cheque and the document Ex, CWI has been signed in blank as alleged by the accused, taking into account the relationship between her and the complainant. In such a situation it ‘was all the more a responsibility of the complainant to have approached the court with absolutely clean hands. The document Ex. CWI has not been satisfactorily proved by the complainant. It neither bears any stamp of the notary nor did the complainant produce any attesting witness to show that the said ‘document was indeed executed by the accused, Signing a blank document atthe instance of brother in Jaw is plausible if not absolutely normal, Iti certainly not bizarre or something incomprehensible, The ‘complainant should have made an altempt to prove the document Ex. CWI/I by leading other cogent ‘evidence. Further, when the complainant has been questioned about his financial capacity, he had stated that he had a monthly salary of € 15,000 per month, On being specifically asked in his cross dated 05.08.2017, that on his own the complainant could not have granted a loan of %6 lac to the accused, it was stated by him that he could not have but he took the help from his family members namely his brother Sanjay and his father. In his further cross dated 16.12.2017 the complainant produced the ITRs of his brother Sanjay and his Fath taken by him from them has been reflected in the ITRs filed by them. At that stage, it was incumbent ‘upon the complainant to get his brother Sanjay and his father examined as a witness in this case but for reasons undisclosed the complainant chose to keep them away from the witness box. This has cost the but he failed to show that the amount of loan ritpssingiankanoon orgidoc!18522640 gS 014‘u4i24, 5:46 PM ‘ay vs. Sonia Mahotra Ce No, 236802019... on 10 Janwary, 2020 ‘complainant dearly for it paves the way for drawing adverse inference against the complainant and doubt the veracity of his case. The complainant's case is full of such omissions which are noticeable by their sheer absence. In the absence of any such evidence, by no stretch of imagination can the case of ‘complainant be taken at its face value. Ajay Vs. Sonia Malhotra CC No. 33680/2019 Page no. 24 of 32 36, It isa settled position of law that the case of the complainant should stand on its own leg, It cannot take advantage of the weakness of the defence, nor can the court, make out a new case for the prosecution and convict the accused on that basis. If defence version is incorrect, it docs not mean that the prosecution version is necessarily correct. Hence, the argument of the LD. Counsel of the ‘complainant that the accused herself never stepped into witness box and failed to Iead any defence at all is of no avail to the complainant as he himself has built up an extremely weak case which was Drought down on its knees simply by eross examining him, 137. The Hon'ble Apex Court in the epic judgment passed in the case titled as Sharad Bhirdichand Sarda \. State Of Maharashtra (1984) 4 SCC 116, while discussing the principles of appreciation of has held that prosecution and defence eviden 151, Te is well settled that the prosecution must stand or fall on its own legs and it cannot derive any strength from the weakness of the defence. This is tite aw and no decision has taken a contrary view. What some cases have held is only this: where various links in a cain are in themselves complet, then a false plea or a false defence may be called into aid only to lend assurance to the court, In other words, before using the additional link it must ‘be proved that all the links in the chain are complete and do not suffer from any infimity {tis not the law that where there is any infirmity or lacuna in the prosecution ease, the same could be ‘cured or supplied by a false Ajay Vs. Sonia Malhotra CC No. 33680/2019 Page no. 25 of 32 defence or ‘plea which is not accepted by 2 court. 38. At this juncture, itis profitable to also refer to a case law on the point under discussion, The Hon'ble Supreme Court in Kumar Exports v; Sharma Carpets, (2009) 2 SCC $13 held that: "20, The accused in a trial under Section 138 of the Act has two options, He can either show that consideration and debt did not exist or that under the particular circumstances of the ease the nonexistence of ‘consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed, To rebut the statulory presumptions an accused is nol 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 de! tor liability to be discharged by him, However, the court need not insist in every case that the accused should disprove the nonexistence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated, At the same time, itis 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 fo the complainant. To disprove the Ajay Vs. Sonia Malhotra CC No, 3680/2019 Page no, 26 of 32 presumptions, the accused should bring on record such facts and circumstances, upon consideration of whieh, 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 citeumstances so relied upon are compelling, the burden may likewise shift again on to the ritpssingiankanoon orgidoc!18522640 gS se‘u4i24, 5:46 PM ‘ay vs. Sonia Mahotra Ce No, 236802019... on 10 Janwary, 2020 ‘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, 21. The accused has also an option to prove the nonexistence of consideration and debt or lability 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 ease and the preponderance of cither by letting in evidence or in some cl probabilities, the 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.” ‘Ajay Vs. Sonia Malhotra CC No, 3680/2019 Page no, 27 of 32 Both the paras of the aforesaid judgment make it absolutely clear that the accused in a cheque dishonour case need not even step into the witness box and he may rely upon the material produced by the complainant in order to show @ preponderance of probabilities in his favour which would suffice to shift the burden onto the ‘complainant. Moreover, what has been held in above judgment is that once the burden has been shifted by the accused to the complainant, the initial presumption under Section 119 and Scetion 139 of the Act will not come to the aid of the complainant, Furthermore, it is @ cardinal canon of criminal jurisprudence that the primary burden of proving the case rests upon the complainant and thatthe case ‘of the complainant should stand on its own legs. 39, In the present complaint, the case brought forth by the complainant is in itself doubtful for the reasons stated above. Even in the absence of the defence of the accused, the complainant has failed to prove his case beyond reasonable doubts. The case of the complainant seen in the light of statements ‘made by him is marred by reasonable doubts regarding the date of receiving the subject cheque and his source of funds. Apropos the point under consideration we can beneficially take refuge in a ease law wherein it was held by Hon'ble Supreme Court in the case titled as K. Prakashan v. PK Surenderan (2008) 1 SCC 258, and reiterated by Hon'ble High Court of Delhi in Kulvinder Singh v. Kafil Ahmed 2014 (2) JCC (ND 100, that if a huge amount of money is advanced as a loan then the person who has purportedly advanced the loan must also show the solvency to the extent of the loan either through the bank account or through other means, Ajay Vs. Sonia Malhotra CC No, 3360/2019 Page no. 28 of 32 40. Inthe light of above discussion and case laws discussed supra, I have no doubt in holding that the ‘complainant has utterly failed to prove that there was an existing legally enforceable liability of Rs. 6,00,000/ upon the accused towards the complainant, Further, the complainant failed to explain how ‘could he procure the subject cheque before the cheque book to which it belonged was issued in favour ‘of the accused. In order to opine as above I rely upon the rules of evidence enunciated under Section 106 of the Indian Evidence Act, 1872 which provides: When any fact is specially within the knowledge ‘of any person, the burden of proving that fact is upon him, Also, Section 103 of the Indian Evidence Act, 1872 which provides that: The burden of proof as to any particular fact lies on that person who wishes the court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person, 41, In sum and substance, the accused has been able to successfully punch holes in the case of the ‘complainant. Moreover, it is clear from the lucid judgment rendered by the Hon'ble Supreme Cour, in ‘Bharat Barrel & Drum mfg. Co. v. Amin Chand Pyarelal (1999) 3 SCC 35: "We are of the view that ‘where, ina suit on & promissory note, the ease ofthe defendant as to the circumstances under which the promissory note was executed is not accepted, itis open to the defendant to prove that the case set up by the plaintiff on the basis of the recitals in the promissory Ajay Vs. Sonia Malhotra CC No. ritpssingiankanoon orgidoc!18522640 gS sane‘u4i24, 5:46 PM ‘ay vs. Sonia Mahotra Ce No, 236802019... on 10 Janwary, 2020 33680/2019 Page no. 29 of 32 note, or the ease set up in suit notice or in the plant is not true and rebut the presumption under S.118 by showing a preponderance of probabilities in his favour and against the plaintiff. He need not lead evidence on all conceivable modes of consideration for establishing that the Promissory note is not supported by any consideration whatsoever. The words ‘until the contrary is proved’ in S.118 do not mean that the defendant must necessarily show that the document is not supported by any form of consideration but the defendant has the option to ask the court to consider the nonexistence of consideration so probable that a prudent man ought, under the circumstances of the ‘ease, to act upon the supposition that consideration did not exist (emphasis supplied). Though the ‘evidential burden is initially placed on the defendant by virtue of $.118 it can be rebutted by the defendant by showing a preponderance of probabilities that such consideration as stated in the pronote, ‘or in the suit notice or in the plaint does not exist and once the presumption is so rebutted, the said presumption ‘disappears. For the purpose of rebutting the initial evidential burden, the defendant can rely on direct evidence or circumstantial evidence or on presumptions of law or fact. Once such convincing rebutial evidence is adduced and accepted by the Court, having regard to all the cireumstances of the ease and the preponderance of probabilities, the evidential burden shifts back to the plaintiff’ who has also the legal burden, Thereafter, the presumption under S.118 does not again ‘come to the plaintiff's rescue. Once both patties have adduced evidence, the Cot same and the burden of proof loses all its importanc 1s to consider the Ajay Vs. Sonia Malhotra CC No, 33680/2019 Page no. 30 of 32.(emphasis supplied). 42. In present matter, the accused has been able to raise a reasonable and probable defence from the ‘case of the complainant coupled withthe consistent line of defence taken by her and has been able to rebut the presumptions under sections 118 and 139 of the Act. The complainant has cl before the court with clean hands. Resultantly, the reverse onus cast upon the accused has been discharged satisfactorily. ly not come 43. Now, as far as the fate of the present case is concerned, the law declared by the Hon'ble Supreme Court, comes to our aid. It has been categorically held in Indus Airways Private Limited And Others v Magnum Aviation Private Limited And Another (2014) 12 SCC $39 that 9, The Explanation appended to Section 138 explains the meaning of the expression "debt or other liability" for the purpose of Section 138. This expression means a legally enforceable debt or other liability. Section 138 treats dishonoured cheque as an offence, if the cheque has been issued in discharge of any debt or other lability. The Explanation leaves no manner of doubt that to atract an ‘offence under Section 138, there should be a legally enforceable debt or other liability subsisting on the date of drawal of the cheque. In other words, drawal of the cheque in discharge of an existing or past adjudicated liability is sine qua non for bringing an offence under Section 138 (emphasis supplied). Ifa ‘cheque is issued as an advance payment for purchase of the goods and for any Ajay Vs. Sonia Malhotra CC No, 3368012019 Page no, 31 of 32 reason purchase order is not carried to its logical conclusion cither because of its cancellation or otherwise, and material or goods for which purchase order was placed is not supplied, in our considered view, the cheque cannot be held to have been drawn for an ‘existing debt or liability. The payment by cheque in the nature of advance payment indicates that atthe time of drawal of cheque, there was no existing lability 44, Likewise, in e present case the benefit of doubt must go to the accused and T hold that the ‘complainant has miserably failed to prove the existence of any legal liability on the accused towards hhim, Consequently, this court finds the accused Sonia Malhotra W/o Sh. Rajesh Malhotra not guilty for the offence under Section 138, Negotiable Instruments Act, 1881 and acquits her accordingly. 45, This judgment contains 32 pages. Every page of this judgment has been signed by me, ritpssingiankanoon orgidoc!18522640 gS sane‘u4i24, 5:46 PM ‘ay vs. Sonia Mahotra Ce No, 236802019... on 10 Janwary, 2020 46. This judgment be uploaded on the website of Dwarka District Court forthwith, Digitally signed PRANAT by PRANAT gost 47:19:38 40528 ANNOUNCED IN THE OPEN COURT (PRAKAT KUMAR JOSHI) TODAY Se, 18th JANUARY 2629 METROPOLITAN MAGTSTRATE DOWARKA DISTRICT COURTS/NEW DELAT Ajay Vs. Sonia malhotea cc No. 3680/2018 Page no. 32 of 32 ritpssingiankanoon orgidoc!18522640 gS sane