Delhi District CourtAar Kay Finelease Pvt Ltd vs Usha Anand 1/16 on 1 December, 2022IN THE COURT OF SH. ABHINAV AHLAWAT\n     METROPOLITAN MAGISTRATE, DWARKA COURTS, NEW\n                                   DELHI\n                   Criminal Complaint No.:35660/2019\n       Aar Kay Finelease Pvt Ltd.                  ......... Complainant\n                                          Versus\n       Usha Anand                                  ......... Accused\n\n\n1.     Name & address of the complainant:          Aar Kay Finelease Pvt\n                                                   Ltd., 4, State Bank\n                                                   Nagar,\n                                                   Paschim Vihar, New\n                                                   Delhi­63\n                                                   (Through its authorized\n                                                   Representative Sh. Ram\n                                                   Niwas Dahiya.)\n\n2.     Name & address of the accused               : Usha Anand\n                                                   w/o Sh. Manmohan Rai\n                                                   Anand\n                                                   R/o H. No.C­3/233\n                                                   Janakpuri\n                                                   Near Rainbow School,\n                                                   New Delhi­11058\n3.     Offence complained of                  :    U/s 138,The\n                                                   Negotiable Instruments\n                                                   Act,1881.\n4.     Date of Institution of case            :    24.09.2019\n5.     Plea of accused                        :    Pleaded not guilty.\n6.     Final order                            :    Convicted\n7.     Date of decision of the case           :    01.12.2022\n\n\n\nCC no.35660/2019\nAar Kay Finelease Pvt Ltd Vs Usha Anand                                1/16\n                                 JUDGMENT1.    Vide this judgment, I shall dispose of the aforementioned complaint\n      case as filed by the complainant, Aar Kay Finelease Pvt Ltd.\n      (hereinafter referred to as the complainant) against accused, Usha\n      Anand, (hereinafter referred to as the accused). The present\n      complaint has been filed against the accusedu/s 138of Negotiable\n      Instrument Act, 1881 (hereinafter referred to as theNI Act).2.    The brief facts as alleged by the complainant in his complaint are that\n      complainant is a private Ltd Company incorporated underCompanies Act. The present complaint has been signed and filled\n      through its Authorized Representative being a lawful authority by\n      power of attorney dated 25.10.2013 which has been executed in\n      pursuance of resolution dated 10.10.2013. The complainant through\n      the present complaint submitted that vide agreement dated\n      26.07.2017 (loan account number 285/2017), accused took a loan of\n      Rs. 20 lakhs from the complainant company against property number\n      C­3/233, Janakpuri, Delhi­58 from the complainant for a period of 24\n      months on interest at 16% per annum. That against this loan the\n      above said property was mortgaged in favour of the complainant and\n      interest payable by the accused came to Rs. 6,40,000/­ and thereby\n      total amount repayable by the accused was Rs. 26,40,000/­. The said\n      amount was to be repaid in 24 monthly installments of Rs. 1,10,000/­\n      each.3.    That towards the repayment of the above said loan, accused issued\n      two cheques in favour of the complainant towards the discharge of\n      liability of the loan which are cheque bearing no. 204225 datedCC no.35660/2019Aar Kay Finelease Pvt Ltd Vs Usha Anand                                2/16\n       25.05.2019 & cheque bearing no.204226 dated 25.06.2019, both for\n      an amount of Rs.1,10,000/­ drawn on Central Bank of India,\n      Janakpuri, Delhi (Cheques in question).4.    It is further averred in the complaint that when the complainant\n      presented both the cheques to his banker the same were returned\n      unpaid by the banker of the complainant vide cheque returning\n      memos dated 25.07.2019 with the remarks "Funds Insufficient".5.    Thereafter, the complainant served a legal demand notice upon the\n      accused through his counsel on 09.08.2019 and upon the expiry of\n      statutory period when accused failed to make the payment of cheques\n      in question, complainant had filed the present complaint case.6.    In order to prove his case, complainant in the pre­summoning\n      evidence, examined himself as CW1 by way of affidavit Ex. CW1/A\n      and relied upon following documents which are as follows:a)     Ex. CW1/1 is copy of power of attorney (OSR)b)     Ex. CW1/2 and Ex. CW1/3 are the cheques in questionc)     Ex. CW1/4 and Ex. CW1/5 Original cheque returning memos.d)     Ex. CW1/6 Legal Demand Notice\n      e)     Ex. CW1/7 is postal receipt\n      f)     Ex. CW1/8 is the tracking report\n      g)     Mark A copy of certificate of incorporation\n      h)     Mark B is the copy of loan agreement with schedule.7.    Upon appreciation of pre­summoning evidence and upon finding\n      prima facie case against the accused, the accused was summoned for\n      an offence punishable undersection 138NI Act. Thereafter NoticeCC no.35660/2019Aar Kay Finelease Pvt Ltd Vs Usha Anand                                3/16\n       u/s 251 Cr.Pc was framed against the accused on 31.03.2022 to\n      which she pleaded not guilty and claimed trial.8.    Ld. counsel for accused failed to move the application u/s 145(2) NI\n      Act despite repeated opportunities, thereby the right of the accused to\n      cross examine the complainant was closed vide order dated\n      31.05.2022 and matter was listed for recording of statement u/s 313\n      Cr.PC.9.    Statement of accusedu/s 313Cr.PC was recorded on 01.06.2022\n      wherein all the incriminating circumstances which were against the\n      accused were put to her to which accused stated that it was correct\n      that she took a loan of Rs 20 Lakhs from the complainant and\n      accused further stated that she had paid Rs 9 Lakhs back to the\n      complainant and that she was willing to clear all the outstanding\n      amount. Accused further admitted her signature on the cheques in\n      question but denied filling in the particulars on the cheques and\n      stated that she never received any legal demand notice from the\n      complainant.10.   Thereafter, the matter was listed for Defence Evidence. Accused\n      moved the applicationu/s 315Cr.PC along with list of witnesses and\n      the same was allowed upon the non­objection of the AR for the\n      complainant vide order dated 17.08.2022. Thereafter, despite many\n      opportunities accused failed to lead any defence and remained absent\n      and ultimately vide order dated 10.10.2022, DE was closed and\n      matter was fixed for final arguments.11.   In the final arguments, the counsel for complainant submitted thatCC no.35660/2019Aar Kay Finelease Pvt Ltd Vs Usha Anand                                4/16\n       complainant has been able to prove all the ingredientsu/s 138NI Act\n      which stood corroborated by the documentary evidence led in the\n      evidence. The counsel for complainant further submitted that accused\n      has not brought any defence and has neither rebutted the presumption\n      arising in favour of the complainant in terms ofSection 118&139of\n      NI Act in as much as testimony of CW1 has remained uncontroverted\n      in material particulars.12.   On the other hand, the husband of accused submitted that his wife,\n      i.e., the accused was willing to clear the remaining amount and again\n      sought adjournment. Despite opportunity being granted to the\n      husband of accused to ensure the presence of their counsel, husband\n      of accused again insisted for adjournment stating that they were\n      willing to pay the remaining amount but the same was not allowed as\n      already many adjournment were granted to enable the accused to\n      clear the remaining amount, however every time, accused failed to\n      pay any amount to the complainant. Final arguments were concluded\n      and record of the case and evidence of both the parties were\n      thoroughly perused.13.   Before proceedings to the merits of the case, it is important to lay\n      down the basic provision ofSection 138of NI Act,1881. In order to\n      ascertain whether accused has committed offenceu/s 138NI Act the\n      following ingredients have to be proved which are as follows:a)     A person must have drawn a cheque on an account maintained by him\n             in a bank for payment of a certain sum of money to another person\n             from out of that account for the discharge of any legally enforceable\n             debt or liability;CC no.35660/2019Aar Kay Finelease Pvt Ltd Vs Usha Anand                                      5/16\n       b)     cheque has been presented to the bank within a period of three monthsfrom the date on which it is drawn or within the period of its validity\n             whichever is earlier;c)     That cheque has been returned by the bank unpaid, either because of\n             the amount of money standing to the credit of the account is insufficient\n             to honour the cheque or that it exceeds the amount arranged to be paid\n             from that account by an agreement made with the bank;d)     The payee or the holder in due course of the cheque has made a\n             demand for the payment of the said amount of money by giving a notice\n             in writing, to the drawer of the cheque, within 30 days of the receipt of\n             information by him from the bank regarding the return of the cheque as\n             unpaid; ande)     The drawer of such cheque fails to make payment of the said amount of\n             money to the payee or the holder in due course of the cheque within 15\n             days of the receipt of the said notice.14.   It becomes imperative to mention thatSection 139of NI Act\n      provides a statutory presumption in favour of the drawee that the\n      cheque was issued to him in discharge of a debt or other liability of a\n      legally enforceable nature. Also, the said provision must be read\n      along withSection 118of NI Act which states that every negotiable\n      instrument is presumed to have been drawn and accepted for\n      consideration. That said, what follows is that trial undersection 138NI Act is structured on the premise of the reverse onus of proof\n      theory since the offence is a document based technical one. The\n      journey of evidence begins not from the home of the prosecution\n      story but from the point of the defence. The presumptions carved out\n      in favour of the complainant are those of law and not those of facts.15.   In this regard, reliance can be placed on K. N. Beena v.Muniyappan (AIR 2001 SC 2895), it was observed as follows: ­\n\n                    "Thus, in complaints underSection 138,\n                    the Court has to presume that the chequeCC no.35660/2019Aar Kay Finelease Pvt Ltd Vs Usha Anand                                         6/16\n                     had been issued for a debt or liability. This\n                    presumption is rebuttable. However, the\n                    burden of proving that a cheque had not\n                    been issued for a debt or liability is on the\n                    accused.This Court in the case ofHiten P.\n                    Dalal vs. Bratindranath Banerjeereported\n                    in (2001) 6 SCC 16 has also taken an\n                    identical view."The Hon'ble Supreme Court, in the case ofHiten P. Dalal vs.\n      Bratindranath Banerjee(AIR 2001 SC 3897), observed as follows:"Because bothSections 138and139require that the Court "shall presume" the\n                    liability of the drawer of the cheques for the\n                    amounts for which the cheques are drawn,\n                    as noted inState of Madras vs. A.\n                    Vaidyanatha Iyer, (AIR 1958 SC 61), it is\n                    obligatory on the Court to raise this\n                    presumption in every case where the\n                    factual basis for the raising of the\n                    presumption had been established. It\n                    introduces an exception to the general rule\n                    as to the burden of proof in criminal cases\n                    and shifts the onus on to the accused\n                    (ibid)."Also, in the case ofK. Bhaskaran vs. Sankaran Vaidhyan Balan[1999(4) RCR (Criminal) 309], it has been held by the Hon'ble\n      Supreme Court as under:"As the signature in the cheque is admitted\n                    to be that of the accused, the presumption\n                    envisaged inSection 118of the NI Act can\n                    legally be inferred that the cheque was\n                    made or drawn for consideration on the\n                    date which the cheque bears.Section 139of\n                    the Act enjoins on the court to presume that\n                    the holder of the cheque received it for the\n                    discharge of any debt or liability."16.   Further, it is a settled position that when an accused has to rebut the\n      presumption underSection 139NI Act, the standard of proof forCC no.35660/2019Aar Kay Finelease Pvt Ltd Vs Usha Anand                                7/16\n       doing so is that of "preponderance of probabilities". As held in\n      Rangappa vs. Srimohan [(2010) 11 SCC 441], the Hon'ble\n      Supreme Court has observed:"Keeping this in view, it is a settled position\n                    that when an accused has to rebut the\n                    presumption underSection 139, the\n                    standard of proof for doing so is that of\n                    preponderance of probabilities. Therefore,\n                    if the accused is able to raise a probable\n                    defence which creates doubts about the\n                    existence of a legally enforceable debt or\n                    liability, the prosecution can fail.As clarified in the citations, the accused\n                    can rely on the materials submitted by the\n                    complainant in order to raise such a\n                    defence and it is conceivable that in some\n                    cases the accused may not need to adduce\n                    evidence of his/her own."17.   Thus, as laid down in catena of decisions it is an established law that\n      onus lies upon the accused to rebut the presumption and to establish\n      that cheque in question was not given in respect of any debt or\n      liability, with the standard of proof being preponderance of\n      probability. Therefore, it becomes critical to examine whether the\n      explanation of the accused coupled with the evidence on record is\n      sufficient to dislodge the presumption envisaged bySection 118&139of NI Act.18.   Being cumulative, it goes without saying that it is only when all the\n      aforementioned ingredients are satisfied that the person who had\n      drawn the cheque can be deemed to have committed an offenceu/s\n      138NI Act. This criminal liability can be attached by proving each\n      of the elements of the section under which liability is sought to be\n      enforced. I shall now go on to appreciate the evidence, documentaryCC no.35660/2019Aar Kay Finelease Pvt Ltd Vs Usha Anand                                8/16\n       or oral, in the light of how compellingly it satisfies each of such\n      ingredient, if it all.Appreciation of Evidence and finding:19.   On appearance of accused, notice of accusationu/s 251Cr.PC was\n      served upon the accused on 31.03.2022, to which accused pleaded\n      not guilty and claimed trial. The accused stated that she had taken a\n      loan of Rs. 20 lakhs from the complainant in the year 2017 which\n      was to be repaid back with an EMI of Rs. 1,10,000/­ for a period of\n      23 months. Accused further stated that she had already repaid back\n      around Rs. 9 lakhs and she was willing to pay back the remaining\n      amount which was around Rs. 11 lakhs.The accused admitted her signature on the cheques in\n      question but denied filling in the other particulars on the cheques.\n      Accused further stated that she does not remember receiving any\n      legal demand notice from the complainant.20.   It is settled law that, once accused admits the signature on impugned\n      cheque, a statutory presumption arises in favour of the complainant\n      u/s 139NI Actr/wSection 118NI Act.Accused has remained silent throughout the trial and not stated\n      anything to rebut the presumption. Accused also failed to cross\n      examine the complainant on the defence raised by her in her answers\n      undersection 251CrPC and further failed to lead any evidence in her\n      defence. No evidence, material or record has been brought by the\n      accused to substantiate the defence taken by her when notice u/s 251\n      crpc was framed.21.   In order to rebut the statutory presumption, it was burden upon theCC no.35660/2019Aar Kay Finelease Pvt Ltd Vs Usha Anand                               9/16\n       accused to prove the facts she pleaded in answer to the notice under\n      251Cr.PC. No material in support of such plea having come on the\n      record, the statutory presumptionu/s 139NI Act in the case in hand\n      has not been rebutted.Reliance can be taken from the decision of Hon'ble\n      Supreme Court in the case of M/s Kumar Exports vs M/s Sharma\n      Carpets, SLP(Crl.) 955/2007, wherein while discussing the denial\n      of existence of legally enforceable debt in the context ofSection 139NI Act, the Hon'ble Apex Court has held that:­,\n            "bare denial of the consideration and existence of debt,\n            apparently would not serve the purpose of accused and\n            something which is probable has to be brought on the record\n            by the accused. Something which is probable has to brought\n            on record for getting the proof of burden shifted to\n            complainant".This ratio has been reiterated by the Hon'ble Supreme Court in the\n      case of Kishan Rao vs Shankar Gouda SLP (Crl.) 10030 of 2016.22.   Further, as held by the Hon'ble Supreme Court in the case of Basa\n      Lingapa vs Mudibasappa, SLP (Crl) 8641/2018 wherein it was\n      stated that it is not fatal to the case of the accused if he fails to lead\n      defence evidence. The court explained that accused can rely on\n      material submitted by the complainant in order to raise such a\n      defence and it is conceivable that in some cases accused may not\n      need to adduce evidence of his or her own.Accused in the present case has not even availed the right to\n      cross examine the complainant and also failed to place on record any\n      cogent evidence nor pointed out any infirmities in the complainantCC no.35660/2019Aar Kay Finelease Pvt Ltd Vs Usha Anand                                   10/16\n       evidence. Accused has not led any evidence to show either the loan\n      has been repaid or that there is no outstanding liability against her.23.   In view of the principles of law laid down by the Hon'ble Apex\n      Court of India and Delhi High Court in the above referred decisions,\n      it makes very clear that ones the holder in due course i.e.\n      complainant proves that, the cheque in question belongs to drawer\n      and the signature on the cheque are admitted by the drawer,\n      mandatory requirements as requiredu/s 138NI Act, a presumption\n      u/s 118 and 139 ofNI Actindeed does extend to the existence of\n      legally enforceable debt.In the present case also, the complainant has complied with\n      the mandatory requirement and has proved that, the accused had\n      issued the cheques in question in his favour and accused has also\n      admitted her signature on the cheques when notice of accusationu/s\n      251Cr.PC was served upon her. Therefore, presumptions have to be\n      drawn towards the legally enforceable debt as persection 139NI\n      Act.24.   Further, as perSection 103of Indian Evidence Act, a person who\n      asserts a fact must prove the same unless the law otherwise provides.\n      In the present case, the onus was upon the accused to prove that she\n      no longer owed any liability towards the complainant or that she had\n      returned the due amount of money as claimed by the complainant\n      and that nothing remained to be paid to the complainant, and the\n      same rested on the accused.Accused has failed to bring on record any evidence that\n      can satisfy the factum of repayment. No evidence of whatsoeverCC no.35660/2019Aar Kay Finelease Pvt Ltd Vs Usha Anand                                  11/16\n       nature, was led by the accused. An adverse inference can be drawn\n      against the accused that the cheques in question issued by the\n      accused was towards discharging the liability.25.   It is also important to note that during the pendency of the case,\n      accused had merely stated that she was ready to pay the remaining\n      amount of loan, however, accused failed to show that the remaining\n      loan amount or the amount mentioned on the cheques in question\n      were repaid.It will be utter disregard to the established principle of\n      evidence, if this court accepts the oral explanation or answer given\n      by the accused during notice framing or submission made at the time\n      of final arguments, devoid of any documentary evidence to\n      concretize the proof. The story of the accused, in the absence of any\n      credible evidence, cannot be taken as gospel truth.26.   Further as laid down by Hon'ble Supreme Court inRangappa v\n      Mohan, 20110 11 SCC 441, wherein it was observed that, "In the\n      light of these extracts, we are in agreement with the respondent­\n      claimant that the presumption mandated bysection 139of the Act\n      does indeed include the existence of the legally enforceable debt or\n      liability.Without placing on record any evidence to disprove that cheque was\n      not issued in discharge of liability, the accused has failed to rebut the\n      presumption.CC no.35660/2019Aar Kay Finelease Pvt Ltd Vs Usha Anand                                  12/1627.   Now that the defences taken by the accused are dealt with, let us\n      examine the potentiality of the prosecution story. The complainant\n      story is that complainant is a private limited company and vide loan\n      agreement no.285/17 dated 26.07.2017 Mark B, accused took a loan\n      of Rs. 20 lakhs from the complainant returnable along with an\n      interest @ 16% per month and hence a total amount of Rs.\n      26,40,000/­ was to be repaid by the accused in 24 monthly\n      instalments of Rs.1,10,000/­ each.Complainant has placed on record the copy of the loan\n      agreement dated 26.07.2017 Mark B along with its schedule for\n      repayment of the EMIs, regarding the lending of the loan amount to\n      the accused, but in the absence of any contrary evidence, the\n      unchallenged testimony of the complainant has to be believed as\n      accused has admitted the fact of taking the loan from the\n      complainant. Further, despite the opportunities given accused failed\n      to cross examine the complainant. As such there was no rebuttal\n      evidence on behalf of the accused to rebut the presumption available\n      underSections 118and139of the NI Act.28.   In the present matter, despite giving sufficient time, accused neither\n      cross­examined the complainant nor led any defence evidence,\n      therefore the evidence placed by the complainant remained\n      unchallenged and there was no reason to disbelieve the version of the\n      complainant.Accused has not brought forth not even an iota of evidence to\n      pillar her defence. Accused did not bring any evidence to impeach\n      the credibility of the document tendered by the complainant. Burden\n      lied heavily on the accused to have probablized the factum ofCC no.35660/2019Aar Kay Finelease Pvt Ltd Vs Usha Anand                               13/16\n       repayment of the EMI amount or repayment of the loan amount.\n      Therefore, considering the admission of the accused that signature on\n      the cheques in question belongs to her and compelling documentary\n      evidence placed on record and failure of the accused to put forth any\n      reasonable and believable defence, the first element of thesection\n      138NI Act stands assembled.29.   As for the second condition qua the presentation of the cheques\n      within three months is concerned, the same is satisfied upon the\n      perusal of the cheques in question Ex CW1/2 and Ex. CW1/3 dated\n      25.05.2019 and 25.06.2019 respectively while the return memos Ex\n      CW1/4 and Ex. CW1/5, both dated 25.07.2019, thus, being presented\n      within the prescribed period of limitation of three months. The\n      defence did not adduce any evidence whatsoever to contradict the\n      same.30.   The third condition pertains to the cheque being returned unpaid\n      owing to their being dishonored. Bank return memo or slip is prima­\n      facie proof of the dishonor.Section 146of the Negotiable\n      Instruments Act, 188, in this regard comes into play which raises a\n      presumption that the court shall presume the fact of dishonor of the\n      cheque in case of cheque is returned vide a return memo issued by\n      the bank having thereon the official mark denoting that the cheque\n      has been dishonored. Perusal of bank dishonour memos i.e., Ex\n      CW1/4 and Ex. CW1/5 shows that cheques in question on being\n      presented in the bank were returned dishonoured due to "funds\n      insufficient" on 25.07.2019. As the defence has failed to rebut the\n      said presumption, hence the said condition is also satisfied.CC no.35660/2019Aar Kay Finelease Pvt Ltd Vs Usha Anand                               14/1631.   Further, the legal notice was served by the complainant upon the\n      accused on the address of the accused. The accused stated during\n      framing ofu/s 251Cr.PC that she does not remember whether she\n      had received the legal demand notice from the complainant whereas\n      during the recording statementu/s 313Cr.PC accused stated that she\n      did not receive any legal demand notice from the complainant.Perusal of the noticeu/s 251Cr.PC and statementu/s\n      313Cr.PC reveals that address mentioned as mentioned by the\n      accused on both is the same address upon which the legal demand\n      notice was sent by the complainant. Therefore, a presumption of\n      deemed service is drawn undersection 27General Clauses Act\n      which provides that where notice is sent to the correct address, the\n      same shall be presumed to have been duly served. Also, in CC Alavi\n      Haji Vs. Palapatti Mohammad (Crl.) 767/2007 the Hon'ble\n      Supreme Court of India held that "where the notice is sent by\n      Registered post by correctly addressing the drawer of the cheque, the\n      mandatory requirement of issue of notice in terms of clause (b) of\n      proviso tosection 138Act stands complied with.Accused has failed to adduce any evidence to rebut the\n      presumption of due service. As such, the legal notice stood served\n      upon the accused, thus implying the satisfaction of the fourth\n      condition.32.   The last condition is that accused fails to make the payment within\n      fifteen days from the date of the receipt of the legal demand notice.\n      In the present case, the accused has evidently failed to make the\n      payment within the fifteen days contending that she owes no legal\n      liability to pay the amount mentioned in the cheques in question. The\n      accused has miserably failed to prove the said assertion and thus, theCC no.35660/2019Aar Kay Finelease Pvt Ltd Vs Usha Anand                                15/16\n       last limb of what will entail the liability against the accused, is also\n      structured.33.   Ratio: Finally, having considered the totality of the facts and the\n      circumstances of the case, the accused has failed to rebut the\n      presumption in favour of the complainant as spelled undersection\n      139NI Act. The law as laid down undersection 138NI Act, 1881 is\n      made out against the accused. The weight of the evidence adduced\n      by the complainant to prove his case against the accused is sufficient\n      enough to impute criminality on the accused. Complainant has\n      successfully proved all the essential ingredients ofSection 138of the\n      Act. Therefore, accused is held guilty and convicted for commission\n      of offence punishable undersection 138of the Negotiable Instrument\n      Act, 1881.Let the convict be heard on the quantum of sentence separately.34.   Let the copy of this judgment be given to the convict free of cost.Announced in the open court on                Abhinav Ahlawat\n01.12.2022                                    MM­NI Act­02,\n                                              South West District\n                                              Dwarka Courts, DelhiCC no.35660/2019Aar Kay Finelease Pvt Ltd Vs Usha Anand                                  16/16