Kratika Chaturvedi, DJS:—

JUDGMENT BRIEF STATEMENT OF REASONS FOR THE DECISION:—

FACTUAL MATRIX-1.

1. The present complaint has been filed by the complainant, Smt. Prabhjot Kumar through SPA holder, Mr. Mohinder Singh Jadhav against the accused persons, Smt. Narinder Kaur and Mr. Lucky Bajaj under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as “NI Act”). The substance of allegations and assertions of the complainant is that the accused no. 1, Smt. Narinder Kaur had taken a loan of Rs. 3,50,000/- from the complainant and the mortgage agreement was executed on 20.03.2006 between the complainant and Smt. Narinder Kaur. Thereafter, accused no. 2, Mr. Lucky Bajaj issued a cheque bearing no. 254759 dated 27.03.2006 for Rs. 3,50,000/- drawn on Punjab National Bank, Hari Nagar branch, Delhi (hereinafter referred to as the “cheque in question”) with the assurance that the said cheque would be duly honoured after its presentation, however the said cheque in question was returned unpaid with the remarks “effect not cleared, present again” vide return memo dated 20.04.2006. Thereafter, the cheque in question was presented again and was retuned dishonoured with the remarks “funds insufficient” vide return memo dated 04.05.2006. The complainant then issued a legal demand notice dated 01.06.2006 for the cheque in question which was duly served upon the accused as the registered post was received back with the report of refusal. Despite service, the accused failed to repay the cheque amount within the stipulated period and hence, the present complaint has been filed under section 138 of the NI Act.

APPEARANCE OF ACCUSED AND TRIAL

2. As accused no. 1 was not the signatory to the cheque in question, proceedings against accused no. 1 were dropped on 31.08.2006. On finding a prima facie case against the accused no. 2, the accused no. 2 was summoned to face trial and after his appearance, notice of accusation under Section 251, Criminal Procedure Code, 1973 (hereinafter referred to as “CrPC”) was framed against the accused no. 2 on 13.02.2008. In reply to the notice of accusation, the accused pleaded not guilty and claimed trial.

3. Vide order dated 22.02.2008, the accused was allowed to cross-examine the complainant and the cross-examination of the complainant was closed vide order dated 07.09.2010. Thereafter, an application was filed under section 311 Cr.P.C. to recall the complainant's witness which was allowed vide order dated 29.02.2012 and further cross-examination of the SPA holder of the complainant was concluded on 09.02.2015.

4. During the trial, the complainant has led the following oral and documentary evidence against the accused to prove his case beyond reasonable doubt-:

ORAL EVIDENCE

CW 1: Sh. Mohinder Singh Jadhav (SPA holder of the Complainant)

DOCUMENTARY EVIDENCE

Ex. CW1/A: Mortgage Agreement dated 20.03.2006 Ex. CW1/B: Cheque bearing no. 254759 dated 27.03.2006 for Rs. 3,50,000/- Ex. CW1/C: Return memo dated 20.04.2006 Ex. CW1/D: Return memo dated 04.05.2006 Ex. CW1/E: Legal demand notice dated 01.06.06 Ex. CW1/F to Ex. CW1/K: Postal receipts, UPC and A.D. Card Ex. CW1/L: SPA dated 24.06.06 issued in favour of Mohinder Singh Jagdev Ex. CW1/1: Affidavit dated 23.08.2006 of the complainant Ex. CW1/2: Affidavit of Mohinder Singh Jadhav

5. Before the start of defence evidence, in order to allow the accused to personally explain the incriminating circumstances appearing in evidence against him, the statement of the accused was recorded without oath under Section 313 of the CrPC on 14.12.2010. In reply, the accused had stated that he had issued a blank cheque to the complainant as security which was payable on handing over the possession of the property bearing no. WZ-126, G-Block, Hari Nagar, Delhi as on 20.03.2006, the possession of the flat was not handed over to his mother. The accused no. 2 had further stated that a civil suit i.e., Vandana Ohri v. Prabhjot Kaur in respect of the property sold by the complainant to them on 20.03.2006 was pending in the court and that the complainant had not disclosed the said fact to them at the time of sale transaction. He further stated that when they reached home after the execution of the documents, they received a summon of the said suit. He further stated that the cheque in question was given in blank to the complainant as a security and it was mutually agreed between them that the same would be payable on the date when the vacant and peaceful possession (sic) of the property would be handed over to them by the complainant. The accused no. 2 also stated that his mother alongwith Smt. Vandana Ohri repeatedly visited the complainant and her SPA, Sh. Jagdev Singh who resided at BF-97, Janakpuri, Delhi, but they did not pay any heed to their requests and left the complainant. He also stated that the possession of the property was finally handed over to them on 20.03.2007 and that too under compelling circumstances when they had entered into a compromise with the tenant Smt. Vandana Ohri on paying a sum of Rs. 4 lakhs to her. Further, he stated that the electricity and other dues of the premises to the tune of Rs. 50,000/- were also borne by them though the complainant was liable for the same as per the documents executed between them.

6. Pursuant thereto, the accused has led the following oral evidence in its defence-:

ORAL EVIDENCE

DW 1: Smt. Narinder Kaur DW2: Smt. Vandana Ohri

DOCUMENTARY EVIDENCE

Ex. DW1/A: Original bill of the dues paid by DW-1 Ex. DW1/B & Ex. DW1/C: Water bills Ex. DW1/D to Ex. DW1/G: Meter reading of BSES Ex. DW1/C1 (colly): Certified copies of the civil suit no. 961/2006 Mark X: Copy of the rent agreement between Smt. Prabhjot Kaur and Sh. Arvind Kumar Ohri Ex. CW1/D1: Site plan of WZ-126, G-Block, Hari Nagar, Delhi Ex. CW1/D2: Sale deed dated 20.03.06 between Smt. Prabhjot Kaur and Smt. Narinder Kaur Ex. CW1/D3: Agreement to sell between Smt. Prabhjot Kaur and Smt. Narinder Kaur

7. The final arguments were addressed by the Ld. Counsels for complainant and the accused through video conferencing. I have heard the Ld. counsels appearing for both the parties and have given my thoughtful consideration to the material appearing on record.

ARGUMENTS-

8. The Ld. Counsel on behalf of the complainant had argued that the ingredients to the offence under section 138 NI Act are fulfilled and the complainant has duly proved its case. He had argued that once the signature on the cheque in question is admitted by the accused, a presumption of a legally enforceable debt has arisen in favour of the complainant and now it is for the accused to rebut the said presumption. He has placed reliance upon the judgment of Hon'ble Apex Court, Rangappa v. Sri Mohan . (2010) 3 RCR (Cri) 164, wherein the court has observed as under,

“This court held that once issuance of a cheque and signature hereon are admitted, presumption of a legally enforceable debt in favour of the holder of the cheque arises. It is for the accused to rebut the said presumption, though accused need not adduce his own evidence and can rely upon the material submitted by the complainant. However, mere statement of the accused may not be sufficient to rebut the said presumption.”

9. The Ld. Counsel for the complainant argued that the onus to discharge the said presumption is upon the accused. He further argued that the accused has failed to prove that the accused no. 2 had legal liability towards the complainant as the mother of the accused no. 2 had taken a loan from the complainant and in pursuance of the same, a mortgage deed was executed between the complainant and mother of the accused no. 2. The Ld. Counsel for the complainant further argued that the complainant is not aware of any settlement which took place between the tenant of the complainant and the mother of the accused in the civil suit filed by Smt. Vandana Ohri. He further argued that the accused no. 2 has failed to prove that the cheque in question was given as security and to be presented only when the possession of the said premises was handed over to the mother of the accused no. 2.

10. As such, the Ld. Counsel for the complainant prays that the accused be convicted for the offence under section 138 of NI Act.

11. Per contra, the Ld. Counsel for the accused had argued that there exists no legal liability towards the complainant as the cheque in question were given as a security to the complainant to be presented after the possession of the said premises were handed over to the mother of the accused no. 2. He further argued that SPA holder of the complainant has failed to led cogent evidence to show that the possession of the premises was handed over to the mother of the accused after the execution of the sale deed. The Ld. Counsel for the accused further argued that the sale deed was executed for an amount of Rs. 10 lakhs and the SPA holder of the complainant has himself admitted that the mother of the accused had pay 9 lakhs in the form of DD and Rs. 1 lakh in cash to the complainant and Rs. 1.5 lakhs were paid in cash at the time when the agreement to sell was executed. The Ld. Counsel for the accused argued that the cheque in question was to be encashed when the physical possession of the premises was handed over by the complainant to the mother of the accused which the complainant had failed. He had argued that the accused has been able to rebut the presumption raised under Section 139 of NI Act.

12. As such, it is prayed that the accused be acquitted for the offence punishable under section 138 of the Negotiable Instruments Act.

INGREDIENTS OF OFFENCE AND DISCUSSION-

13. Before dwelling into the facts of the present case, it would be apposite to discuss the legal standards required to be met by both sides. In order to establish the offence under Section 138 of NI Act, the prosecution must fulfil all the essential ingredients of the offence. Perusal of the bare provision reveals the following necessary ingredients of the offence:—

First Ingredient: The cheque was drawn by a person on an account maintained by him for payment of money and the same is presented for payment within a period of 3 months from the date on which it is drawn or within the period of its validity;

Second Ingredient: The cheque was drawn by the drawer for discharge of any legally enforceable debt or other liability;

Third Ingredient: The cheque was returned unpaid by the bank due to either insufficiency of funds in the account to honour the cheque or that it exceeds the amount arranged to be paid from that account on an agreement made with that bank;

Fourth Ingredient: A demand of the said amount has been made by the payee or holder in due course of the cheque by a notice in writing given to the drawer within thirty days of the receipt of information of the dishonour of cheque from the bank;

Fifth Ingredient: The drawer fails to make payment of the said amount of money within fifteen days from the date of receipt of notice.

APPRECIATION OF EVIDENCE-

14. The accused can only be held guilty of the offence under Section 138 NI Act if the above-mentioned ingredients are proved by the complainant co-extensively. Additionally, the conditions stipulated under Section 142 NI Act have to be fulfilled. Notably, there is no dispute at bar about the proof of only first, third and fifth ingredient. The complainant had proved the original cheque vide Ex. CW1/B which the accused no. 2 had not disputed as being drawn on the account of the accused no. 2. It was not disputed that the cheque in question was presented within its validity period. The cheque in question was returned unpaid vide return memo dated 20.04.2006 and 04.05.2006 vide Ex. CW1/C and Ex. CW1/D due to the reason, “Effects not cleared, present again” and “funds insufficient” respectively. The complainant had proved on record the legal demand notice dated 01.06.2006 vide Ex. CW1/E, postal receipt, courier receipts and acknowledgement card vide Ex. CW1/F to Ex. CW1/K. As such, only first, third and fifth ingredient of the offence under section 138 of the NI Act stands proved.

15. As far as the proof of second ingredient is concerned, the complainant has to prove that the cheque in question was drawn by the drawer for discharging a legally enforceable debt. In the present case, the issuance of the cheque in question is not denied. As per the scheme of the NI Act, once the accused admits signature on the cheque in question, certain presumptions are drawn, which result in shifting of onus. Section 118(a) of the NI Act lays down the presumption that every negotiable instrument was made or drawn for consideration. Another presumption is enumerated in Section 139 of NI Act. The provision lays down the presumption that the holder of the cheque received it for the discharge, in whole or part, of any debt or other liability.

16. The combined effect of these two provisions is a presumption that the cheque was drawn for consideration and given by the accused for the discharge of debt or other liability. Both the sections use the expression “shall”, which makes it imperative for the court to raise the presumptions once the foundational facts required for the same are proved. Reliance is placed upon the judgment of the Hon'ble Supreme Court, Hiten P. Dalal v. Bratindranath Banerjee . (2001) 6 SCC 16.

17. Further, it has been held by a three-judge bench of the Hon'ble Apex Court in the case of Rangappa v. Sri Mohan . (2010) 11 SCC 441 that the presumption contemplated under Section 139 of NI Act includes the presumption of existence of a legally enforceable debt. Once the presumption is raised, it is for the accused to rebut the same by establishing a probable defence. The principles pertaining to the presumptions and the onus of proof were recently summarized by the Hon'ble Apex Court in Basalingappa v. Mudibasappa . (2019) 5 SCC 418 as under:

“25. We having noticed the ratio laid down by this Court in the above cases on Section 118(a) and 139, we now summarise the principles enumerated by this Court in the following manner:

25.1. Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.

25.2. The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.

25.3. To rebut the presumption, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.

25.4. That it is not necessary for the accused to come in the witness box in support of his defence. Section 139 imposed an evidentiary burden and not a persuasive burden.

25.5. It is not necessary for the accused to come in the witness box to support his defence.”

18. The presumptions raised under Section 118(b) and Section 139 NI Act are rebuttable presumptions. A reverse onus is cast on the accused, who has to establish a probable defence on the standard of preponderance of probabilities to prove that either there was no legally enforceable debt or other liability. In this case, the arguments raised by the Ld. counsel for the accused to rebut the presumption are discussed below:

I. DEFENCE THAT THE ACCUSED HAD NOT RECEIVE THE LEGAL DEMAND NOTICE

19. It is contended by the Ld. Counsel for the accused no. 2 that the accused had not received any legal notice dated 01.06.2006 vide Ex. CW-1/E, so cause of action does not arise in such circumstances. Perusal of the record reveals that the legal notice was addressed to the accused and the acknowledgement card vide Ex. CW1/J and Ex CW1/K received back with the report of refusal which suggests that the legal notice was served upon the accused no. 2. It is not the case of the accused that the address mentioned in the legal notice is not the correct address. It is to be seen that the accused no. 2 has appeared after the issuance of the bailable warrants against him as the report of summons was also received back with the report of refusal. A reliance be placed on the judgment of the Hon'ble High Court of Manoj Jain v. Surinder Kumar Jain & Anr. S 2015 (3) JCC (NI) 212, wherein the court observed as under:

“The assertion of the Petitioner that the demand notice was not received by him as it was sent on a wrong address. The summons by the court which were also sent at the same address, were received by him. The notice, which was sent by UPC did not return, indicating that it was served. Thus, both the courts below rightly held that notice was validly served.”

20. The complainant has placed on record legal notice dated vide Ex. CW1/E, postal receipts and AD card Ex. CW1/F to Ex. CW1/K to show that the legal notice was duly served and the appearance of the accused in the court shows that the legal notice was validly served. Also, it is nobody's case that the accused tendered the amount entailed in the impugned cheque upon entering appearance before this court in response to the summons issued in the instant case. At this stage, a reliance be placed upon the judgment of the Hon'ble Supreme Court in the case of CC. Alavi Haji v. Palalpetty Muhammed (2007) 6 SCC 555, wherein it was observed as under,

“It is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of Criminal Law, where there is no stipulation of giving of a notice before filing a complaint. Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the Court along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the G.C. Act and Section 114 of the Evidence Act. In our view, any other interpretation of the proviso would defeat the very object of the legislation.”

21. The plea of the accused regarding the non-receipt of the legal notice is accordingly rejected as being frivolous and inconsequential. Consequently, the fifth ingredient of the offence under section 138 of NI Act stands proved.

II. DEFENCE THAT THE ACCUSED DOES NOT HAVE ANY LEGALLIABILITY TOWARDS THE COMPLAINANT

22. It is the case of the accused that the cheque in question was issued as a security which was payable on handing over the possession of the property bearing no. WZ-126, G-Block, Hari Nagar, Delhi (hereinafter referred to as “the said premises”) on 20.03.2006, however, the said possession of the property was not handed over to the mother of the accused as agreed upon. The accused no. 2 had stated that no legal liability is due towards the complainant as the possession of the said premises were not handed over to Smt. Narinder Kaur on 20.03.2006 as agreed upon and the possession of the said premises were handed over to the accused on 20.03.2007 after the matter was compromised with the tenant of the complainant i.e., Smt. Vandana Ohri. To corroborate this fact, DW-1 in her testimony has stated that the ground floor of the said premises was purchased vide registered sale deed vide Ex. CW1/D2 on 20.03.2006 on the assurance that the same was free from all sorts of disputes and was informed by the complainant that Smt. Vandana Ohri would vacate the premises on or before 27.03.2006. However, a civil suit of perpetual injunction was filed by Smt. Vandana Ohri against the complainant, Smt. Prabhjot Kaur and DW-1, Smt. Narinder Kaur for restraining them from taking forcible possession, prior to the registration of the sale deed as evident vide Ex. DW1/C3. It is the case of the accused that the complainant had concealed the fact of the dispute with her tenant at the time of execution of the sale deed. It is an admitted fact that the complainant had never appeared in the civil suit and that the matter was compromised before the court of Sh. Jitender Mishra, Ld. Civil Judge on 20.03.2007between the DW-1 and DW-2 wherein the possession of the portion in the occupation of DW-2 had to be handed over to DW-1 on 20.03.2007. It is the case of the accused no. 2 that the possession of the said premises were handed over to DW1 on 20.03.2007 which is evident from the proceedings held in the civil suit. The testimony of DW-1 is further corroborated by the testimony of DW-2, Smt. Vandana Ohri wherein she has stated that she had filed a civil suit against the complainant and DW-1 and the possession of the said premises was handed over to DW-1 on 20.03.2007 after the civil suit was compromised between the parties before the court.

23. On the other hand, the SPA holder of the complainant had failed to prove as to when the physical possession of the said premises was handed over to the Smt. Narender Kaur. The SPA holder of the complainant himself stated that the DW-1 was not in possession of the said premises when the mortgage deed vide Ex. CW1/8 was executed between the complainant and DW-1, however he also stated that the mortgage deed vide Ex. CW1/8 and sale deed vide Ex. CW1/D2 was executed on the same day. Further, the SPA holder of the complainant had also stated that the possession of the said premises was handed over to DW-1 after the execution of the sale deed vide Ex. CW1/D2 on the same day. Also, the CW-1 has admitted in his cross-examination that the possession means the physical possession which was allegedly handed over to DW-1. However, the SPA holder of the complainant failed to produce any document to show that the physical possession was handed over to the DW-1 on the date when the sale deed was executed despite being assured by the SPA holder of the complainant that he will produce the same before the court. After perusal of the evidence placed on record, it is clear that the physical possession was not handed over to DW-1 on 20.03.2006 by the complainant.

24. Further, perusal of the complainant and the legal notice reveals that the complainant had stated that a loan of Rs. 3,50,000/- was taken by the Smt. Narinder Kaur and the mortgage deed was executed on 20.03.2006 for which the accused no. 2 had issued the cheque in question. The SPA holder of the complainant in his cross-examination had admitted that no copy of sale deed vide EX. CW1/D2 and agreement to sell vide Ex. CW1/D3 was filed with the complaint or in his evidence. It is pertinent to note that the complainant has concealed the material facts regarding the entire transaction. Further, the complainant has stated that a loan was advanced to Smt. Narinder Kaur, however, the evidence placed on record shows that the cheque in question was issued with regard to the sale consideration. The SPA holder in his testimony has himself admitted that loan and the sale consideration cannot be the same thing. Further, the SPA holder of the complainant i.e., CW-1 had stated in his cross-examination that the complainant had received an advance of Rs. 1 lakh prior to 20.03.2006 and Rs. 1.5 lakhs was paid on 08.02.2006 at the time of agreement to sell vide Ex. CW1/D3 for the said premises which has not been mentioned in the complaint. He has also stated that remaining amount of Rs. 13,50,000/- were to be paid at the time of execution of the sale deed. SPA holder stated that the complainant had received 1 lakh in advance as first instalment and Rs. 1.5 lakhs as second instalment were received before the execution of the sale deed. While, at the time of execution of the sale deed, the complainant had received two cheques of Rs. 9 lakhs and Rs. 3.5 lakhs which is the cheque in question which got dishonoured. Thus, the case of the complainant is highly unreliable when the accused no. 2 has brought sufficient evidence to rebut the story of the complainant which in itself is contradictory and untrustworthy.

25. Further, in agreement to sell vide Ex. CW1/D3, it was agreed between the parties that the government dues, taxes, electricity bills and water charges till the date of the execution of the sale deed would be borne by the seller but due to the disputes between the parties, the electricity dues and other expenses were borne by the accused no. 2.

26. The Hon'ble Supreme Court in the case of Kumar Exports v. Sharma Carpets . (2009) 2 SCC 513, has observed that in a trial under Section 138 of the Act a presumption will have to be made that every negotiable instrument was made or drawn for consideration and that it was executed for discharge of debt or liability once the execution of the negotiable instrument is either proved or admitted. As soon as the complainant discharges the burden to prove that the instrument, say a note was executed by the accused, the rules of presumptions under Sections 118 and 139 of the Act help him shift the burden on the accused. The presumptions will live, exist and survive and shall end only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and discharge of any debt or liability. A presumption is not in itself evidence but only makes a prima facie case for a party for whose benefit it exists. The Apex Court further held that in a trial under Section 138 of the Act the accused has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case the non-existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumption an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the Court need not insist in every case that the accused should disprove the non-existence of consideration and that by leading direct evidence because the existence of negative evidence is entirely possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of that, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumption the accused should bring on record such facts and circumstances, upon consideration of which the Court may either believe that the consideration and debt did not exist, or their non-existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on the complainant.

27. In the present case, the accused no. 2 has placed on record cogent evidence to rebut the presumption laid down under section 139 of the NI Act. The Hon'ble Supreme Court in the case of M.S. Narayana Menon @ Mani v. State of Kerala (2006) 6 SCC 39 has observed as under

“32. A Division Bench of this Court in Bharat Barrel & Drum Manufacturing Company v. Amin Chand Pyarelal [(1999) 3 SCC 35] albeit in a civil case laid down the law in the following terms:

“Upon consideration of various judgments as noted hereinabove, the position of law which emerges is that once execution of the promissory note is admitted, the presumption under Section 118(a) would arise that it is supported by a consideration. Such a presumption is rebuttable. The defendant can prove the non-existence of a consideration by raising a probable defence. If the defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the plaintiff who will be obliged to prove it as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument. The burden upon the defendant of proving the non-existence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies. In such an event, the plaintiff is entitled under law to rely upon all the evidence led in the case including that of the plaintiff as well. In case, where the defendant fails to discharge the initial onus of proof by showing the non-existence of the consideration, the plaintiff would invariably be held entitled to the benefit of presumption arising under Section 118(a) in his favour. The court may not insist upon the defendant to disprove the existence of consideration by leading direct evidence as the existence of negative evidence is neither possible nor contemplated and even if led, is to be seen with a doubt.”

28. A statutory presumption has an evidentiary value. The question as whether the presumption stood rebutted or not, must, therefore, determined keeping in view the other evidence on record. In case of this nature, where the chances of false implication cannot be ruled out the background fact and the conduct of the parties together with the legal requirements are required to be taken into consideration. The Hon'ble Supreme Court in the case of Krishna Janardhan Bhat v. Dattaraya G. Hegde (supra) had observed that,

“45. We are not oblivious of the fact that the said provision has been inserted to regulate the growing business, trade, commerce and industrial activities of the country and the strict liability to promote greater vigilance in financial matters and to safeguard the faith of the creditor in the drawer of the cheque which is essential to the economic life of a developing country like India. This, however, shall not mean that the courts shall put a blind eye to the ground realities. Statute mandates raising of presumption, but it stops at that. It does not say how presumption drawn should be held to have rebutted. Other important principles of legal jurisprudence, namely presumption of innocence as human rights and the doctrine of reverse burden introduced by Section 139 should be delicately balanced. Such balancing acts, indisputably would largely depend upon the factual matrix of each case, the materials brought on record and having regard to legal principles governing the same.”

29. The Ld. Counsel for the complainant has raised the objection regarding the tendering of the evidence of defence witnesses by affidavit in their examination in chief, however, the same has been allowed by the Ld. Predecessor of this court. It is a settled law that the court has no power to review or recall its own order as held by the Hon'ble Supreme Court in Adalat Prasad v. Rooplal Jindal (2004) 7 SCC 338. Thus, the defence evidence tendered in examination in chief will be read as evidence and the objection of the Ld. Counsel for the complainant does not stand.

30. In the present case, the accused has raised a probable defence that the cheque in question was given as a security cheque and the same to be presented when the physical possession of the said premises are handed over to the mother of the accused no. 2. Also, the accused no. 2 has been able to show that the physical possession of the said premises were handed over when the civil suit was compromised between the Smt. Narinder Kaur and Smt. Vandana Ohri, being the tenant of the complainant. In order to rebut the presumption raised under section 118 and 139, it is clear that the accused can rely on the evidence led by him or he can also rely on the materials submitted by the complainant in order to raise a probable defence. The Hon'ble Supreme court in the case of Basalingappa v. Mudibasappa . (supra) has held that inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely. In the considerate opinion of this court, the accused has raised a probable defence by bringing on record such facts and circumstances in order to rebut the presumption raised under section 139 of the NI Act and that the non-existence of the consideration and debt is so probable that a prudent man would under the circumstances of the case, act upon the plea as it did not exist.

31. The case of the complainant that the cheque in question was issued by the accused for discharging his legal liability for the loan taken by the mother of the accused no. 2 is unworthy of credit and fails to inspire the confidence of the court. Thus, it can be clearly said that the accused no. 2 has rebutted the presumption raised under section 139 of NI Act. Consequently, it can be said that no legal liability exists in favour of the complainant, thus, the second ingredient to the offence under section 138 of NI Act does not stands proved.

CONCLUSION

32. To recapitulate the above discussion, the accused has been successful in establishing a probable defence on a standard of preponderance of probabilities to rebut the presumption under section 118 and 139 of the NI Act by punching the holes in the case of the complainant and making the case of the complainant doubtful. Cogent evidence is required to be proved beyond reasonable doubt to secure conviction in a criminal trial. The accused no. 2 has been in successful in establishing a probable defence from the evidence of the complainant and the circumstances of the case that there was no legal liability to the tune of Rs. 3,50,000/-.

33. As such, the complainant has failed to prove the offence beyond reasonable doubt and the accused has been able to raise a probable defence. Resultantly, the complaint of the complainant is hereby dismissed, and the accused no. 2, Sh. Lucky Bajaj is hereby acquitted of the offence under section 138 of the NI Act.

34. Announced in the open court on 11.03.2022 in the presence of both the parties.