IN THE COURT OF JUDICIAL MAGISTRATE FIRST CLASS, (NI
ACT), DIGITAL COURT-01, EAST, KKD
NEW DELHI
Presided over by- Sh. Shiva Parashar, DJS
In the matter of :-
Jammu Ess IEE Finance Private Limited
Through its AR Amit Kumar,
Office at: 3rd Floor, B-47,
Sector 64, Noida-201301
Also at: G100, 2nd Floor,
Preet Vihar, Delhi-110092
…. Complainant
VS.
Jitender Kumar
S/o Ramesh Chand
R/o J-98, Indira Gandhi Camp, Sidha Basti,
Hari Nagar Ashram, New Delhi
…. Accused
DLET020041872021
- Name of Complainant : Jammu Ess IEE Finance Private
Limited - Name of Accused : Jitender Kumar
- Offence complained of or
proved : Section 138, Negotiable
Instruments Act, 1881 - Plea of Accused : Not Guilty
- Date of Filing : 29.05.2021
- Date of Reserving Order : 02.04.2025
- Date of Pronouncement : 15.04.2025
- Final Order : Acquittal
Argued by :- Sh. Vivek Pandey, Ld. counsel for the complainant.
Sh. Anil Tejan, Ld. counsel for the accused.
CC NI ACT 1277/2021 Jammu Ess Iee Finance Pvt. Ltd. Vs. Jitender Kumar 1 of 16
BRIEF STATEMENT OF REASONS FOR THE DECISION:-
FACTUAL MATRIX - The present complaint is filed against the accused Jitender Kumar S/o
Ramesh Chand under Section 138 of the Negotiable Instruments Act, 1881
(hereinafter referred to as “NI Act”). The substance of allegations and assertions of
the complainant, Jammu ESS IEE, is that the accused had approached the
complainant company for a loan amount of Rs. 50,000/ which was sanctioned and
duly availed by the accused vide Loan Account no. JEIFPL0120201135 & Loan
Agreement dated 25.01.2020. The accused undertook to repay the same in monthly
installments including the interest and other charges thereon as per the loan
agreement. As per the complainant, a sum of Rs. 89,100/- has been due and
pending as per the running statement of account and in discharge of his enforceable
liability accused has issued one cheque bearing number 613475 dated 22.03.2021
amounting to Rs. 89,100/- drawn on State Bank of India, Siddharth Extension,
New Delhi. - When the Complainant presented the said cheque, (hereinafter
referred to as ‘cheque in question’) through its banker ICICI Bank, Preet Vihar,
Delhi branch, the same was returned unpaid by the banker of the accused vide
returning memo dated 24.03.2021 with the remarks “Funds Insufficient”. - The Complainant thereafter issued a legal demand notice dated
10.04.2021 through its Counsel calling upon the accused to pay the said cheque
amount within a period of 15 days from receipt thereof. The said notice was duly
served upon the accused and the accused failed to pay the aforesaid cheque amount
within the statutory period. Hence, the present complaint u/s 138 N.I. Act was
filed.
CC NI ACT 1277/2021 Jammu Ess Iee Finance Pvt. Ltd. Vs. Jitender Kumar 2 of 16 - On finding a prima facie case against the accused, he was summoned
to face trial vide order dated 11.08.2021 and after his appearance, notice of
accusation under Section 251, Code of Criminal Procedure, 1973 (hereinafter
referred to as “CrPC”) was served on him on 03.08.2022. In reply to the notice of
accusation, the accused pleaded not guilty and claimed trial. He stated that he is
signatory to the cheque but does not have any legal liability towards the
complainant on account of repayment. - During the trial, the complainant has led the following oral and
documentary evidence against the accused to prove its case beyond reasonable
doubt:-
ORAL EVIDENCE
CW 1 : Amit Kumar (AR of Complainant)
DOCUMENTARY EVIDENCE
Ex. CW1/1 : Certified copy of certification of incorporation
Ex.CW1/2 : Board Resolution in favour of AR Sh. Amit Kumar
Ex.CW1/3 : Copy of loan agreement
Ex.CW1/4 : Certified copy of ledger account maintained by the
complainant against the accused
Ex. CW1/5 : Original cheque bearing no. 613475
Ex. CW1/6 : Original Return Memo dated 24.03.2021
Ex. CW1/7 : Legal cum demand Notice dated 10.04.2021
Ex. CW1/8 : Original postal receipts
Ex. CW1/8A : Tracking Report
Ex. CW1/9 : Evidence by way of Affidavit of CW1
Despite several opportunities, the accused failed to cross-examine the
complainant and the right to cross-examine the complainant stood closed vide
order dated 28.02.2023.
CC NI ACT 1277/2021 Jammu Ess Iee Finance Pvt. Ltd. Vs. Jitender Kumar 3 of 16 - Thereafter, 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 Cr.P.C. In reply, the
accused accepted the dishonour of cheque in question and denied the receipt of
legal notice
Pursuant thereto, the accused has led the following oral and
documentary evidence in its defence-:
ORAL EVIDENCE
DW 1 : Jitender Kumar (Accused)
DW2 : Mintu Paswan (Accountant of
Complainant)
DOCUMENTARY EVIDENCE
None
ARGUMENTS- - The final arguments were heard in the matter. I have heard the ld.
counsels appearing for the parties and have given my thoughtful consideration to
the material appearing on record. - It has been argued by the ld. counsel for the complainant that all the
ingredients of the offence are fulfilled in the present case. He has argued that it is
proved from the material on record that the accused borrowed Rs. 50,000/- from
the complainant and thereunder entered into a loan agreement [Ex. CW1/3] with
the complainant and issued the cheque drawn on his personal account to honour the
agreement. Further, the agreement is substantiated by the Ledger Account [Ex.
CW1/4] maintained by the complainant whereunder an amount of Rs. 89,100/-
appears to be pending against the accused. The accused has failed to prove his
CC NI ACT 1277/2021 Jammu Ess Iee Finance Pvt. Ltd. Vs. Jitender Kumar 4 of 16
defence and in addition, the accused has raised flimsy defences in his Notice under
Section 251 Cr.P.C. and in his statement recorded under Section 313 Cr.P.C. which
is not substantiated by any evidence. Additionally, the evidence of AR of
complainant remains unwavered in view of failure of accused to cross-examine
him. As such, it is prayed that the accused be punished for the said offence. - Per contra, ld. counsel for the accused has argued that the complainant
has failed to establish his case beyond reasonable doubt. He submits that the
accused has no legally enforceable liability towards the complainant to pay the
amount mentioned in the cheque in question because the complainant has charged
penal interest and compound interest at an exorbitant rate from the accused which
is not allowed as per the applicable laws. Even further, the statement of account is
riddled with hidden charges and penalties to enhance the outstanding debt upon the
accused. Further, it is submitted that the cheque in question was issued only as a
security cheque and not given to the complainant for the purposes of payment. As
such, it is prayed that the accused be acquitted.
INGREDIENTS OF OFFENCE AND DISCUSSION - 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;
CC NI ACT 1277/2021 Jammu Ess Iee Finance Pvt. Ltd. Vs. Jitender Kumar 5 of 16
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. - 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 coextensively.
Additionally, the conditions stipulated under Section 142 NI Act have
to be fulfilled. - The proof of first and third ingredient is not disputed. The
complainant has proved the original cheque, Ex. CW1/5 which the accused has not
disputed as being drawn on his account. It is not disputed that the cheque in
question was presented within the validity period. The cheque in question was
returned unpaid vide return memo, Ex. CW1/6 due to the reason, “Funds
Insufficient “. As such, on the basis of the above, the first and third ingredient of
the offence under Section 138 NI Act stands proved. - With regard to the fourth and fifth ingredient, the complainant has
proved on record legal notice Ex. CW1/7 and postal receipt Ex. CW1/8. The
cheque in question was dishonoured vide return memo Ex. CW1/6 dated
24.03.2021. The postal receipt Ex. CW1/8 is addressed to the accused and sent by
the counsel for the complainant is dated 12.04.2021 and is supported by a Tracking
Report Ex. CW1/8A which confirms the delivery of the same. The accused has
denied the receipt of legal notice in his plea of defence recorded under Section 251
Cr.P.C. Whereas, in his statement recorded under Section 313 Cr.P.C., the accused
CC NI ACT 1277/2021 Jammu Ess Iee Finance Pvt. Ltd. Vs. Jitender Kumar 6 of 16
has stated that he does not remember if he had received the legal demand notice
however, the address mentioned therein is his correct address. Be as it may, the
tracking report Ex. CW1/8A confirms the delivery of speed post. - Further, proviso (f) of Section 114 of the Indian Evidence Act, 1872
entails a presumption in regard the common course of business. In C.C. Alavi Haji
vs. Palapetty Muhammed and Ors., 2007(3)A C R2738(SC), it was observed:
“12. According to Section 114 of the Act, read with illustration (f) thereunder,
when it appears to the Court that the common course of business renders it
probable that a thing would happen, the Court may draw presumption that the
thing would have happened, unless there are circumstances in a particular case to
show that the common course of business was not followed. Thus, Section 114
enables the Court to presume the existence of any fact which it thinks likely to
have happened, regard being had to the common course of natural events, human
conduct and public and private business in their relation to the facts of the
particular case. Consequently, the court can presume that the common course of
business has been followed in particular cases. When applied to communications
sent by post, Section 114 enables the Court to presume that in the common course
of natural events, the communication would have been delivered at the address of
the addressee. But the presumption that is raised under Section 27 of the G.C. Act
is a far stronger presumption. Further, while Section 114 of Evidence Act refers to
a general presumption, Section 27 refers to a specific presumption.”
Thus, when the tracking report shows the post as delivered, it may be
safely presumed that the same was delivered to the addressee mentioned therein.
Additionally, he accused has failed to bring any evidence to prove the contrary as
well. Therefore, it is proved that the legal notice was delivered to the accused on
the date mentioned in the Tracking Report Ex. CW1/8A i.e., 13.04.2021. No
dispute was raised on this issue by the counsel for the accused during arguments.
The fact that the payment was not made within 15 days of the receipt of the legal
notice is also not disputed. Therefore, the fourth and the fifth ingredient of the
offence also stands proved. - Now it remains to be ascertained if the second ingredient is proved or
CC NI ACT 1277/2021 Jammu Ess Iee Finance Pvt. Ltd. Vs. Jitender Kumar 7 of 16
not. As far as the proof of second ingredient is concerned, it has to be proved that
the cheque in question was drawn by the drawer for discharging a legally
enforceable debt. In the present case, the signature of the accused on the cheque in
question is not denied. In his reply to the notice served under Section 251 Cr.P.C.,
the accused has admitted to being a signatory to the cheque in question. Signatures
were also admitted by the accused when his statement under Section 313 Cr.P.C.
was recorded. Under the NI Act, once the accused admits his signatures on the
cheque, 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. The second presumption is contained under
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. - 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 word “shall”, which makes raising
the presumption imperative for the court, once the foundational facts required to
raise the presumption are proved {Refer Hiten P. Dalal vs. Bratindranath Banerjee
(2001) 6 SCC 16}. - Further, it has been held by a three-judge bench of the Hon’ble Apex
Court in the case of Rangappa vs. 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 on the standard of
preponderance of probabilities to prove that either there was no legally enforceable
debt or other liability. In the present case, the contentions raised by the ld. counsel
CC NI ACT 1277/2021 Jammu Ess Iee Finance Pvt. Ltd. Vs. Jitender Kumar 8 of 16
for the accused to rebut the presumption are discussed below. - COMPLAINANT HAS CHARGED ILLEGAL CHARGES AND PENALTIES IN
ITS LEDGER STATEMENT
18.1. Ld. Counsel for accused has argued that the ledger statement Ex.
CW1/4 is riddled with hidden charges and penalties. He has argued that the
complainant has charged penal interest and interest on interest from the
complainant which was not allowed as per the applicable laws.
18.2. For the sake of clarity, reference here is made to the applicable laws
of the relevant period in regards the penal interest. In the wake of coronavirus, the
Reserve Bank of India (hereinafter referred to as ‘RBI’) had firstly issued
Notification RBI/2019-20/186 DOR.No.BP.BC.47/21.04.048/2019-20 dated
27.03.2020 in the form of a regulatory measure wherein it was stated:
“In respect of all term loans (including agricultural term loans, retail and crop
loans), all commercial banks (including regional rural banks, small finance banks
and local area banks), co-operative banks, all-India Financial Institutions, and
NBFCs (including housing finance companies) (“lending institutions”) are
permitted to grant a moratorium of three months on payment of all instalments
falling due between March 1, 2020 and May 31, 2020. The repayment schedule
for such loans as also the residual tenor, will be shifted across the board by three
months after the moratorium period. Interest shall continue to accrue on the
outstanding portion of the term loans during the moratorium period.”
The said moratorium period was further extended vide Notification
RBI/2019-20/244 DOR.No.BP.BC.71/21.04.048/2019-20 dated 23.05.2020 in the
following terms:
“In view of the extension of lockdown and continuing disruption on account of
COVID-19, all commercial banks (including regional rural banks, small finance
banks and local area banks), cooperative banks, All-India Financial Institutions,
and Non-banking Financial Companies (including housing finance companies)
(“lending institutions”) are permitted to extend the moratorium by another three
CC NI ACT 1277/2021 Jammu Ess Iee Finance Pvt. Ltd. Vs. Jitender Kumar 9 of 16
months i.e. from June 1, 2020 to August 31, 2020 on payment of all instalments in
respect of term loans (including agricultural term loans, retail and crop loans).
Accordingly, the repayment schedule for such loans as also the residual tenor, will
be shifted across the board. Interest shall continue to accrue on the outstanding
portion of the term loans during the moratorium period.”
The Notification dated 27.03.2020 was thereafter challenged before
the Hon’ble Supreme Court in Gajendra Sharma Vs. Union of India and Anr WP
(Civil) No. 825 of 2020, on the ground that it allows charging of interests during
the moratorium period. Therein, the Hon’ble Supreme Court had disposed the
matter in terms of the scheme formulated by the union government for grant of exgratia
payment of difference between compound interest and simple interest for six
months to borrowers in specified loan accounts. The scheme was made applicable
to 07 types of borrowers and it was directed to all the lending institutions to credit
the difference between compound interest and simple interest in the respective
accounts of eligible borrowers for the period between 1.3.2020 to 31.8.2020. This
amount was directed to be credited by each of the lending institutions referred to in
clause 3 of the Scheme, irrespective of whether such eligible borrowers had fully
availed or partially availed or had not availed of the moratorium viz. deferment in
payment of instalments as per the Circulars dated 27.3.2020 and 23.5.2020 issued
by RBI.
18.3. Thereafter, another set of petitioners approached the Hon’ble Supreme
Court challenging the regulatory packages issued by the RBI in Small Scale
Industrial Manufactures Association (Registered) Vs Union of India , AIRONLINE
2021 SC 165. Therein, the Hon’ble Supreme Court was pleased to dismiss the
pleas of the Petitioners except for one. It was held:
“There is no justification shown to restrict the relief of not charging interest
on interest with respect to the loans up to Rs. 2 crores only and that too restricted
to the aforesaid categories. What are the basis to restrict it to Rs. 2
crores are not forthcoming. Therefore, as such, there is no rational to restrict
CC NI ACT 1277/2021 Jammu Ess Iee Finance Pvt. Ltd. Vs. Jitender Kumar 10 of 16
such relief with respect to loans up to Rs. 2 crores only. Even otherwise, it is
required to be noted that the scheme dated 23.10.2020 granting
relief/benefit of waiver of compound interest/interest on interest contains
eligibility criteria and it provides that any borrower whose aggregate of all
facilities with lending institution is more than Rs. 2 crores (sanctioned limit or
outstanding amount) will not be eligible for exgratia payment under the said
scheme. Therefore, if the total exposure of the loan at the grant of the sanction is
more than Rs. 2 crores, the borrower will be ineligible irrespective of the actual
outstanding. For Example, if the borrower has been sanctioned a loan of Rs. 5
crores and has availed of the same, even though he might have repaid
substantially bringing down the principal amount of less than Rs. 2 crores as on
29.02.2020, but because of the sanction of the loan amount of more than Rs. 2
crores, he will be ineligible. It also further provides that the outstanding amount
should not be exceeded to Rs. 2 crores and for this purpose aggregate of all
facilities with the lending institution will be reckoned. Therefore, if a borrower,
for example, MSME Category has availed and has outstanding of business loan of
Rs. 1.99 crores and also has dues of its credit card of Rs. 1.10 lakhs, thereby
making the aggregate to Rs. 2.10 crores, it stands ineligible. Therefore, the
aforesaid conditions would be arbitrary and discriminatory.
31.1 Even otherwise, it is required to be noted that compound interest/interest on
interest shall be chargeable on deliberate/willful default by the borrower to
pay the instalments due and payable. Therefore, it is in the nature of a penal
interest. By notification dated 27.03.2020, the Government has provided the
deferment of the installments due and payable during the moratorium period.
Once the payment of installment is deferred as per circular dated 27.03.2020, non –
payment of the instalment during the moratorium period cannot be said to be
willful and therefore there is no justification to charge the interest on
interest/compound interest/penal interest for the period during the moratorium.
Therefore, we are of the opinion that there shall not be any charge of
interest on interest/compound interest/penal interest for the period during the
moratorium from any of the borrowers and whatever the amount is recovered by
way of interest on interest/compound interest/penal interest for the period during
the moratorium, the same shall be refunded and to be adjusted/given credit in the
next instalment of the loan account.”
Thus, the Hon’ble Supreme Court extended the benefit of scheme
dated 23.10.2020 to all loans irrespective of the amount of loans and the categories
thereof. The compound interest/penal interest/interest on interest was thus required
to be refunded or adjusted in the accounts of the borrowers, if charged during the
period of moratorium.
18.4. In the present factual matrix, the complainant has given the benefit of
CC NI ACT 1277/2021 Jammu Ess Iee Finance Pvt. Ltd. Vs. Jitender Kumar 11 of 16
moratorium under notification dated 27.03.2020 to the accused herein and
accordingly interest was accrued but not charged from the account of accused
during the period 25.04.2020 to 25.08.2020. Hence, the Ledger Account for the
period 01.04.2019 to 05.05.2021 Ex. CW1/4 does not mention any debit of EMI
and credit of bouncing charges during the period 25.04.2020 to 25.08.2020. There
are several credit entries of “Interest Accrued” of Rs. 1,000/- each on 25.04.2020,
25.05.2020, 25.06.2020, 25.07.2020 and 25.08.2020. However, EMIs were not
debited from the account of accused during this period.
18.5. Thereafter, on 10.03.2021, the complainant has charged Rs. 24,302.00
from the accused under the head “Overdue Interest EMI Payment Late Int.”. Here,
a perusal of the loan agreement Ex. CW1/3 reveals that it mentions penal interest
as, “an additional interest payable by the Borrower to the Lender as a penalty in
case of delay in payment of Monthly Installments, at the rate as mentioned in
Schedule I”. In this regard, Schedule I indicates a penal interest at 3 per cent per
month upon a delay in payment of monthly instalment. Additionally, Schedule II
mentions the interest rate of the loan at 24 per cent per annum.
18.6. In order to further explain the charges/penalties, the accused had
brought Sh. Mintu Paswan, Accountant of complainant institution as DW2 in his
defence evidence. During his examination-in-chief, DW2 stated, “The late
payment charges of EMI of Rs. 5,167/- for first month i.e. February, 2020 is Rs.
1,958.29/-. Late payment charges for second month i.e. March, 2020 is Rs.
1,808.45/-. Late payment charges for third month i.e. April 2020 is Rs. 1,648.27/-.
The late payment charges is referred in the loan agreement as penal interest,
however, it is generally referred to as late payment charges.” DW2 has admitted to
levying of penal interest/late payment interest upon the accused for each default in
payment of EMI between 25.02.2020 to 10.03.2021.
CC NI ACT 1277/2021 Jammu Ess Iee Finance Pvt. Ltd. Vs. Jitender Kumar 12 of 16
18.7. The complainant has charged a comprehensive amount of Rs.
24,302.00/- as late payment charges on 10.03.2021 meaning thereby that it
continued to charge late payment/penal interest from the accused on a monthly
basis despite the RBI Notification and the judgments of Hon’ble Supreme Court
which barred the same during the moratorium period. In addition, the complainant
has failed to give any explanation upon the levying of penal interest and interest on
interest upon the accused.
18.8. It is further argued by ld. Counsel for accused that in addition to penal
interest, the complainant has also charged interest on interest from the complainant
as well. It is argued that the late payment charges at 3 per cent per month is
charged on the amount of the EMI Rs. 5,167/- which already includes an interest
amount of Rs. 1,000/-. During his examination-in-chief, DW2 stated, “The interest
quotient in EMI of Rs. 5,167/- is Rs. 1,000/-. As per my calculation, the total penal
interest on the late payment of interest of Rs. 1,000/- for 13 months and 15 days is
Rs. 4,860/-.” Thus, interest on interest has been charged by the complainant which
was not allowed as per law.
18.9. It is clear from the above discussion that the lending institutions were
not allowed to charge interest on interest or compound interest or penal interest
from the borrowers during the period of moratorium. The complainant has charged
such penal interest in the form of late payment charges from the accused which
was also an interest on interest. Further, the complainant was required to adjust or
refund the excess amount in the loan account of the accused and a perusal of the
ledger statement for the period 01.04.2019 to 05.05.2021 does not reflect any such
adjustment or refund by the complainant. Even further, the outstanding
liability/debt of Rs. 89,100/- in favour of the complainant arises out of the same
ledger statement Ex.CW1/4 and the accused has raised substantive doubts upon the
CC NI ACT 1277/2021 Jammu Ess Iee Finance Pvt. Ltd. Vs. Jitender Kumar 13 of 16
accuracy and genuineness of the same. Thus, the same cannot be relied upon to
bind the accused to a particular liability. - CHEQUE IN QUESTION WAS GIVEN FOR SECURITY AND NOT FOR
PAYMENT
19.1. Ld. Counsel for accused has argued that the cheque in question was
given as a security cheque for the loan. Even if it is assumed that the cheque in
question was issued as security for loan, by this fact alone, the presumption u/s 139
N.I Act cannot be dislodged. The law is settled on the point of security or advance
cheque. The Hon’ble Supreme court of India in Sripati Singh (D) Vs. State of
Jharkhand 28.10.2021 held that:
“A cheque issued as a security pursuant to a financial transaction cannot be
considered as a worthless piece of paper under every circumstance. Security in its
true sense is the state of being safe and the security given for a loan is something
given as a pledge of payment. It is given, deposited or pledge to make certain the
fulfilment of an obligation to which the parties to the transaction are bound. If in a
transaction, a loan is advance and borrower agrees to repay the amount in a
specified time frame and issued a cheque as security to secure such repayment; if
the loan amount is not repay in any other form before the due date or if there is no
other understanding or agreement between the parties to defer the payment of
amount, the cheque which is issued as security would mature for presentation and
the drawee of the cheque would be entitled to present the same. On such
presentation, if the same is dishonoured, the consequences contemplate u/s 138
and the other provisions of N.I Act would flow.”
19.2. Hence, mere averment that the cheque in question was given as
security in the absence of any cogent evidence is not sufficient to rebut the
statutory presumption raised against the accused. Further, a perusal of the loan
agreement Ex. CW1/3 shows that the PDCs were given to the complainant for the
purpose of security of payment and in the event ECS was not processed, the
complainant had the right to present the PDCs for encashment. Therefore, in view
of the above judgments, the defence taken by the accused that the cheque in
CC NI ACT 1277/2021 Jammu Ess Iee Finance Pvt. Ltd. Vs. Jitender Kumar 14 of 16
question was given as a security has no force. - This court is of the opinion that the accused has brought on record
facts and circumstances to disprove the claim of the complainant, majority of
which, as discussed in above paragraphs, have been established by the accused.
Therefore, in view of the discussion in the foregoing paragraphs, the inevitable
conclusion is that the accused has been successful in proving that there was no
legally enforceable debt to the tune of Rs. 89,100/- towards the complainant on the
date of presentation of cheque in question. Therefore, the second ingredient is not
fulfilled in the present case.
CONCLUSION – - 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 Section 139 of NI Act by punching
holes in the case of the complainant and making the version of the complainant
doubtful. Cogent evidence is required to be proved beyond reasonable doubt to
secure conviction in a criminal trial. The accused has been successful in
establishing a probable defence from the evidence of the complainant and the
circumstances of the case that there was no legal liability of Rs. 89,100/- and the
cheque in question was given only as security towards securing payment of loan.
This court has no hesitation to hold that the case of the complainant is more
unlikely than that of the accused. The accused has been successful in proving that
as per the applicable RBI notifications and judgments of Hon’ble Supreme Court,
the complainant had to adjust or refund the penal interest charged from the account
of the accused and in absence of any such adjustment/refund, the ledger statement
cannot reflect the true and correct outstanding liability upon the accused.
CC NI ACT 1277/2021 Jammu Ess Iee Finance Pvt. Ltd. Vs. Jitender Kumar 15 of 16 - 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 dismissed and the accused Jitender
Kumar is hereby acquitted of the offence of Section 138 of the Negotiable
Instruments Act, 1881.
ORDER:- ACQUITTED
Pronounced in open court on 15.04.2025.
(Shiva Parashar)
JMFC (NI Act) Digital Court-01, East
KKD, New Delhi
Note: This judgment contains 16 pages and each page has been signed by me.
CC NI ACT 1277/2021 Jammu Ess Iee Finance Pvt. Ltd. Vs. Jitender Kumar 16 of 16