Delhi High Court
Jal Singh Malik vs Om Prakash on 19 December, 2023
Author: Sudhir Kumar Jain
Bench: Sudhir Kumar Jain
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Reserved on: September 13, 2023
Date of Decision: December 19, 2023
+ CRL. A. 786/2023
JAL SINGH MALIK ..... Petitioner
Through: Mr. Sajan K. Singh and Ms.
Sangeeta Singh, Advocates
V
OM PRAKASH ....Respondent
Through: Mr. Prashant Sharma and
Mr. Ravi Kant Gautam,
Advocates
CORAM
HON'BLE DR. JUSTICE SUDHIR KUMAR JAIN
JUDGMENT
1. The present Appeal bearing no.786/2023 is filed under section 378
of the Code of Criminal Procedure, 1973 (hereinafter referred to as
"the Code") read with section 482 of the Code to challenge judgment
02.04.2019 passed by Ms. Prabh Deep Kaur, Metropolitan Magistrate-
02, South, Saket Courts, Delhi (hereinafter referred to as the "trial
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court") bearing CC no. 471383/2016 titled as Jal Singh Malik V Om
Prakash.
2. The appellant/complainant Jai Singh Malik (hereinafter referred to
as "the appellant") through attorney Mala Devi Malik filed a
complaint under section 138 of the Negotiable Instruments Act, 1881
(hereinafter referred as "the Act") against the namely Om
Prakash/accused (hereinafter referred to as the "respondent") on
allegations that the respondent issued a cheque bearing no. 098957
dated 10.01.2016 amounting to Rs. 6,00,000/- drawn on State Bank of
India, Ambedkar Nagar, Delhi-110017 (hereinafter referred to as "the
cheque in question") in favour of the appellant towards discharge of
liability and the said cheque got dishonoured when presented for
encashment on the ground of "funds insufficient" vide return memo
dated 15.03.2016. The appellant pleaded that the appellant, a member
of paramilitary force, was advised by the respondent who is also
relative of the appellant to purchase a flat in Delhi. The appellant has
agreed to purchase a flat in locality of Krishna Park/Jawahar Park. The
appellant had deposited Rs.4,47,095/- in two accounts bearing no
160010100050643 and 10207358344 maintained at Axis Bank and
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State Bank Of India during period from 07.02.2008 to 2012 and gave
Rs. 1,52,905 in cash in the year 2013 to 2014 total Rs.6,00,000/- to the
respondent on assurance of the respondent regarding purchase flat for
the appellant.
2.1 The respondent avoided to purchase a flat for the appellant orto
return the amount already paid to the respondent. The respondent due
to intervention of the relatives had agreed to pay back Rs.6,00,000/- to
the appellant in the month of December 2015 and accordingly issued a
post-dated cheque i.e. cheque in question in favour of the appellant to
liquidate the admitted legal liability with assurance that cheque in
question would be encashed. The appellant presented cheque in
question for encashment to its banker i.e. State Bank Of India, Branch
Sangam Vihar on 11.03.2016 but the said cheque was not honoured
and returned back unpaid vide cheque return memo dated 15.03.2016
with remarks "funds insufficient". The respondent did not paid the
cheque amount despite notice dated 16.03.2016 within stipulated
period. Hence the complainant filed present complaint.
2.2 The court of Ms. Preeti Parewa, Metropolitan Magistrate-02, NI
Act. Saket vide order dated 23.04.2016 observed that there are
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sufficient ground for proceedings against the respondent and
accordingly issued the summons to the respondent. The respondent
vide order dated 06.08.2016 was given notice under section 251 of the
Code for offences punishable under section 138 of the Act to which
the respondent pleaded not guilty and claimed trial. The respondent
filed an application under section 145(2) of the Act which was
allowed vide order 06.08.2016 passed by the court of Ms. Preeti
Parewa, Metropolitan Magistrate-02, NI Act, Saket by observing that
the respondent is having valid defence. The attorney of the appellant
and the appellant were examined and cross examined as CW1 and
CW2 respectively. The evidence of the appellant was ordered to be
closed vide order dated 08.03.2018.
2.3 The statement of the respondent was recorded under section 313
read with section 281 of the Code wherein the respondent stated that
he had given Rs. 50,000/- to the appellant in the year 2007. The
appellant returned back Rs. 49,000/- back to the respondent on
07.02.2008 with assurance to pay balance amount of Rs.1,000/- later
on. The appellant approached the respondent in December, 2008 for
taking Rs.3,50,000/- for purchasing a property and the respondent
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gave Rs.3,50,000/- to appellant who assured to return said amount
soon. The appellant repaid Rs. 3,50,000/- in span of 04 years and the
appellant returned said amount till year 2012. The respondent involved
other relatives as the appellant was making payment in installment and
the appellant assured that he would remain careful in future. The
appellant approached the respondent in year 2015 for purchasing a
property jointly and offered that he would pay Rs.6 lacs while the
respondent should pay Rs. 10 lacs. The appellant asked for a security
cheque of Rs. 06 lacs and assured the respondent to pay Rs. 6 lacs in
cash. The appellant assured the respondent to pay Rs. 3 lacs by
December, 2015 and balance amount of Rs. 3 lacs in first week of
January. The appellant did not pay any amount and misused the
cheque. The appellant received legal notice. The respondent preferred
to lead defence evidence. The respondent examined Manju Singhal as
DW1 and himself as DW2. The defence evidence on behalf of the
respondent was ordered to be closed vide order dated 06.03.2019. The
trial court vide impugn judgment acquitted the respondent for offence
punishable under section 138 of the Act.
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3. The appellant being aggrieved filed present appeal. The appellant
was granted leave to appeal vide order dated 13.09.2023. The
appellant challenged impugned judgment on grounds that the trial
court failed to appreciate that the presumption as per the Act is always
drawn in the favour of the holder of the instrument i.e. the payee. The
respondent has admitted signature on the instrument and other
particulars were filed by him. The trial court erred in holding that the
appellant has changed his version as minor discrepancies in the oral
testimony of the Appellant are not sufficient to disbelieve his
testimony which cannot be discarded being hearsay. The impugned
order suffers from perversity as the trial court has failed to appreciate
that liability toward the cheque in question was to be disproved by the
drawer of the cheque i.e. the respondent as the presumption draws
always in the favour of the payee. The trial court has fastened entire
liability of proving upon the appellant. The trial court did not
appreciate that the appellant has paid major part of amount of
Rs. 6,00,000/- by depositing in account of the respondent which
remained un-rebutted and stood affirmed and gave Rs. 1,52,905/- in
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cash. The respondent relied on document Ex. CW2/D1. The appellant
prayed that the appeal be accepted.
4. The counsel for the appellant advanced oral arguments and also
submitted written submissions. The counsel for the appellant argued
that the respondent admitted issuance of cheque in question Ex.
CW1/B and service of legal notice Ex. CW1/D. The entire testimony
of the appellant as CW2 cannot be disbelieved due to minor
discrepancies in his testimony as the appellant had deposited major
part of amount directly in bank accounts of the respondent as proved
from Bank Deposit Receipt Ex. CW1/J. The respondent could not
establish his defence as per law i.e. the cheque in question Ex.CW1/B
was not issued towards discharge of liability. The counsel for the
appellant in respect of document Ex. CW2/D1 argued that document
Ex. CW2/D1 was put to the appellant in cross examination by the
respondent as such said document can be read against the respondent.
The trial court erred in holding that document Ex. CW2/D1 is
incomplete and does not imply that the appellant had paid to the
respondent and wrongly held that it appeared that the appellant and the
respondent are co-buyers and the respondent is assuring to buy the
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share of the respondent and there is no admission of any liability by
the respondent. However, the respondent has acknowledged his
liability towards the Appellant. The counsel for the appellant relied on
Rangappa V Sri Mohan,2010(5) SCALE 340 and Uttam Ram V
Devinder Singh, 2019(4) SCALE 136. The counsel for the appellant
argued that the appeal be accepted and impugned judgment be set
aside.
4.1 The counsel for the respondent during argument defended the
impugned judgment and argued that the respondent has raised
probable defence as per section 145(2) of the Act and the appellant
could not prove basic ingredients of section 138 of the Act. The case
put forward by the appellant is improbable regarding giving of money
to the respondent in installments for purchase of property from the
year 2006 to 2014. The counsel for the respondent also referred cross
examination of CW1 and CW2. The document Ex.CW2/D1 although
admitted by the respondent is a vague and ambiguous document which
was never acted upon. The appeal is liable to be dismissed.
5. The perusal of impugned judgment reflects that the trial court has
discussed legal provisions and observed that the court is under an
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obligation to raise the presumption contemplated under sections 118
and 139 of the Act and the accused is required to raise a probable
defence to rebut such a presumption by leading evidence or brining
such facts on record in the cross examination of the complainant that
could make the latter's case improbable. It is not necessary for the
accused to disprove the existence of consideration by way of direct
evidence. The standard of proof has been held to be preponderance of
probabilities & the inference of preponderance of probabilities can be
drawn not only from the material that has been placed on record but
also by reference to the circumstances upon which the accused relies.
It was further observed that if the accused is proved to have
discharged the initial onus of proof placed on him by showing that the
existence of consideration was improbable or doubtful or illegal, then
the onus will shift back to the complainant who will then be under an
obligation to prove it as matter of fact and failure to do so will
disentitle him to any relief on the basis of the negotiable instrument
and this obligation can be also discharged by way of cross
examination of the complainant.
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5.1 The trial court after referring cross examination of CW1 who was
attorney of the appellant observed that CW1 was not aware of the
material facts of the transactions in question as she admitted that she
did not have personal knowledge of all the facts and circumstances of
the transactions in question and accordingly opined that the testimony
of CW1 is of no use to the appellant to prove his case. The trial court
after referring testimony of the appellant as CW2 observed that the
appellant had paid Rs.1,52,905/- to the respondent in cash but the
appellant has kept changing his version as to when the cash payment
was made whether till the year 2012 only or in between the year 2013
to 2014 and further observed that in absence of a particular account
statement then liability of the appellant to pay the cheque amount
cannot be determined. The trial court also observed that it is highly
improbable that a person who has given cash payment to the
respondent on regular basis in installments would be able to recollect
or remember the accurate details of payments on day to day basis
without keeping the written record and the appellant who wants to buy
a property worth Rs.20 lacs would keep paying money in installments
from the year 2006 till 2014 and would pay only Rs. 06 lacs in eight
By:JITENDRA CRL. A. 786/2023 Page 10
years for purchasing the property without the actual purchase of the
property. The trial court pertaining to document Ex.CW2/D1 observed
that document Ex.CW2/D1 is incomplete and does not imply that the
appellant has made the payment of Rs. 06 lacs to the respondent and
return of which was assured by the respondent rather it was reflecting
from the document Ex.CW2/D1 as if the appellant and the respondent
are co-buyers and accused is assuring to buy the share of the appellant
and the respondent is assuring the appellant to make the payment of
share of the appellant. It was observed by the trial court that
Ex.CW2/D1does not give any help to the appellant as there is no
admission of any liability by the respondent. The document
Ex.CW2/D1 corroborated the plea of the respondent that he issued the
cheque as security.
5.2 The trial court ultimately dismissed the complaint and acquitted
the respondent by observing that the presumptions in favour of the
appellant under section 118 and 139 of the Act have been rebutted by
the respondent by preponderance of probabilities whereas the
appellant has failed to prove its case beyond all reasonable doubt.
By:JITENDRA CRL. A. 786/2023 Page 11
6. Section 138 of the Act creates criminal liability on a person who
issues a cheque towards discharge of a debt or any other liability as a
whole or in part and the cheque is dishonoured by the bank on
presentation. Section 139 of the Act provides presumption in favour
of holder that he received the cheque for the discharge, in whole or in
part, of any debt or other liability. Section 145(2) of the Act the Court
may, if it thinks fit, and shall, on the application of the prosecution or
the accused, summon and examine any person giving evidence on
affidavit as to the facts contained therein.
7. The respondent admitted issuance of cheque in question Ex.CW1/B
and receipt of legal notice Ex. CW1/D. It is also proved that cheque in
question Ex. CW1/B was dishonoured due to "funds insufficient" vide
cheque return memo Ex. CW1/C. Issue which needs consideration is
that whether cheque in question Ex. CW1/B was issued in discharge of
legally enforceable liability and whether the respondent is able to
probable defence sufficient to rebut in presumption in favour of the
appellant.
8. The appellant pleaded and deposed in affidavit Ex.CW2/X that the
respondent instigated the appellant to purchase a property/flat and
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accordingly the respondent deposited Rs.4,47,095 during period from
07.02.2008 till 2012 in two accounts of the respondent as reflected
from 32 receipts Ex. CW1/J besides payment of Rs.1,52,905 in cash
during period 2013-2014 to the respondent. However the respondent
did not purchase the flat for the appellant. Thereafter the respondent
due to intervention of relatives issued post-dated cheque in December,
2015 i.e. the cheque in question Ex. CW1/B which on presentation got
dishonoured on ground of "funds insufficient" vide cheque retuned
memo Ex. CW1/C. The respondent did not pay cheque amount despite
service of notice Ex. CW1/D. The appellant as CW2 in cross
examination deposed that he had paid Rs. 6 lacs in cash and by
deposition during period 2008 to 2012. The appellant admitted that he
did not have any written document regarding cash payment of
Rs.1,52,905 to the respondent. The cheque in question was given to
him in December, 2015 by the respondent in lieu of the payment made
by him. The appellant as CW2 in cross examination was confronted
with document dated 11.12.2015 Ex. CW2/D1 and deposed that said
document was executed at time of issuance of cheque as
acknowledgement. The appellant denied suggestions that the
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respondent issued cheque in question Ex. CW1/B in pursuance of Ex.
CW2/D1 and not towards any legal liability or that the appellant failed
to comply with agreement Ex. CW2/D1 and as such the respondent
does not have any liability to pay cheque amount to the appellant.
8.1 The respondent in his defence in statement under section 313 of
the Code read with section 281 of the Code stated that the appellant in
year 2015 approached the respondent for purchase of the property and
has agreed to contribute Rs.6 lacs. The respondent issued the cheque
in question Ex. CW1/B as security cheque which was misused by the
respondent. DW1 Manju Singhal deposed that the respondent
deposited Rs.4,47,095/- in account of the respondent for household
purpose of the wife of the appellant i.e. CW1. The appellant and CW1
never gave any money to the respondent. The appellant misused the
cheque Ex. CW1/B which was given as security. The appellant and
CW1 has agreed to return Rs.6 lacs in two installments of Rs.3 lacs
each but did not pay installments. DW1 in cross examination admitted
signature of the respondent on document Ex. CW2/D1 and reasserted
that cheque in question Ex. CW1/B was given as security cheque.
DW1 further asserted that the appellant and the respondent agreed to
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purchase property as per agreement and for which the respondent had
agreed to contribute Rs.10 lacs and appellant had to contribute Rs. 6
lacs but the appellant did not give pay said amount. The appellant has
taken the cheque in question Ex. CW1/B as security and subsequently
misused the cheque in question Ex. CW1/B. DW1 in cross
examination also deposed about previous transaction of money
between the appellant.
8.1.1 The respondent as DW2 deposed that on earlier occasions had
given Rs. 50,000/- and Rs. 3,50,000/- to the appellant. The appellant
also deposited Rs. 4,47,095/- in his account for household expenses.
The appellant in month of December, 2015 proposed to purchase a
property jointly for which agreement Ex. CW2/D1 was executed. The
appellant had agreed to pay Rs. 6 lacs in installments to be paid in
December 2015 and January 2016 by depositing in account of the
respondent and took cheque in question as security cheque. However
the appellant did not pay Rs. 6 lacs and misused cheque in question
Ex. CW1/B given as security cheque. The respondent as DW2 in cross
examination admitted that cheque in question Ex. CW1/B was filled
and signed by him and he also received notice Ex. CW1/D. The
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respondent admitted that Ex. CW1/D1 was signed by him after
reading it. The respondent as DW1 also admitted that the appellant
had deposited some amount in his account for purchase of property
and Rs. 4,47,095/- towards household expenses of CW1.
9. It is reflecting from quality and quantity of evidence proved on
record that the respondent issued cheque in question Ex. CW1/B in
favour of the appellant. The cheque in question Ex. CW1/B was got
dishonoured on ground of "funds insufficient" vide memo Ex. CW1/C
and cheque amount was not paid by the respondent despite service of
notice Ex. CW1/D. It is also established that the appellant deposited
4,47,095/- in two accounts of the respondent vide 32 receipts Ex.
CW1/J. The respondent in cross examination also admitted that the
appellant deposited certain amount in accounts of the respondent for
the purchase of the property. The plea of the respondent that the
appellant had deposited Rs. 4,47,095/- in the account of the
respondent for household expenses of CW1 who is wife of the
appellant does not inspire confidence and appears to be highly
improbable once the respondent admitted payment of certain amount
by the appellant for the purchase of the property.
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9.1 The respondent also took defence that the appellant and the
respondent month of December, 2015 agreed to purchase a property
and for that the respondent had agreed to contribute Rs. 10 lacs and
the appellant had agreed to contribute Rs. 6 lacs. The appellant had
agreed to pay Rs. 6 lacs in two installments of Rs. 3 lacs each and out
of which first installment was to be paid in December, 2015 and
another was to be paid in month of January, 2016 and at that time, the
respondent cheque in question Ex. CW1/B as security cheque. The
appellant did not pay Rs. 6 lacs in installment as agreed and misused
the cheque. The defence as taken by the respondent is appearing to be
highly probable. It is not understandable that why the respondent
issued the cheque in question Ex. CW1/B in favour of the appellant in
December, 2015 even as security cheque once amount of Rs. 6 lacs
was not paid by the appellant as his share for purchase of the property.
The defence of the respondent does not inspire any confidence appears
to be sham and without any basis. The respondent was needed to
understand that instrument like cheque should not be issued in such
casual manner as once cheque is issued it carries serious legal
consequences. The respondent in agreement/document Ex. CW2/D1
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admitted its execution as well his signature. The document Ex.
CW2/D1 was put to the appellant during his cross examination as
CW2 by the respondent himself. The perusal of Ex. CW2/D1 reflects
that the appellant had contributed Rs. 6 lacs for purchase of property
as detailed in document/agreement Ex. CW2/D1 and the respondent
had agreed to pay back Rs. 6 lacs to the appellant by issuance of
cheque in favour of the appellant. The appellant proved deposition of
Rs. 4,47,095/- in two accounts of the respondent from 32 receipts Ex.
CW1/J and also deposed payment of Rs. 1,52,905 in cash in the year
2013 to 2014 total amounting to Rs.6,00,000/- to the respondent. The
document Ex. CW2/D1 again corroborated plea of the appellant that
the respondent issued cheque in question Ex. CW1/B in favour of the
appellant. The respondent could not raise probable defence as section
145(2) of the Act to rebut presumptions in favour of the appellant as
per sections 118 and 139 of the Act pertaining to the cheque in
question Ex. CW1/B. The respondent also preferred not to reply notice
Ex. CW1/D to raise his defence at first instance which also render
defence of the respondent as afterthought.
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9.2 The counsel for the appellant rightly argued that the trial court
entire shifts burden on the appellant even the respondent admitted
issuance of cheque in question Ex. CW1/B and receipt of notice Ex.
CW1/D and entire testimony of the appellant as CW2 cannot be
disbelieved due to minor discrepancies in his testimony particularly
when the appellant had deposited major part of amount directly in
bank accounts of the respondent as proved from 32 Bank Deposit
Receipt Ex. CW1/J and the trial court erred in holding that document
Ex. CW2/D1 is incomplete and by not reading in favour of the
appellant also. The respondent issued cheque Ex. CW1/B in discharge
of legal debt.
9.3 The counsel for the respondent argued without any legal and
factual force that the respondent has raised probable defence as per
section 145(2) of the Act and plea of the appellant is improbable
regarding giving of money to the respondent in installments for
purchase of property from the year 2006 to 2014. The arguments
advanced by the counsel for the respondent cannot be accepted.
10. The trial court passed the impugned judgment after taking into
consideration minor and insignificant variations and contradictions in
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cross examination of the appellant as CW2 regarding details of cash
amount stated to be paid by the appellant to the respondent and also on
basis of unfounded assumptions and presumptions as detailed in
impugned judgment. The trial court shifted the entire burden on the
appellant to prove issuance of cheque in question Ex. CW1/B for
discharge of legally enforceable debt even the respondent admitted
issuance of cheque in question Ex. CW1/B in favour of the
respondent. The trial court also misread and misunderstood document
Ex. CW2/D1 to the benefit of the respondent and did not consider
defence of the respondent. The defence taken by the respondent in
cross examination of CWs, statement under section 313 and by
leading defence evidence does not inspire any confidence and cannot
be accepted. The impugned judgment is not legally sustainable and is
set aside. The respondent is accordingly convicted for offence
punishable under section 138 of the Act. The appeal is accordingly
allowed.
11. List for arguments on the quantum of sentence on 16.01.2024.
DR. SUDHIR KUMAR JAIN
(JUDGE)
DECEMBER 19, 2023/abk
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