Delhi District Court
Suman Verma vs Ramesh Verma on 13 October, 2023
IN THE COURT OF SPECIAL JUDGE (NDPS),
SHAHDARA, KARKARDOOMA COURTS, DELHI
Criminal Appeal No. 169/2023
In the matter of :
Suman Verma
W/o late Sh. M. Verma,
R/o C3/26, Yamuna Vihar,
Delhi 110053.
.......... Appellant
Versus
Ramesh Verma
S/o Sh. Om Prakash
R/o H. No. 133, Surya Niketan,
Delhi 110092.
.......... Respondent
CRIMINAL APPEAL UNDER SECTION 374 (2) OF THE
CODE OF CRIMINAL PROCEDURE, 1973
Date of institution : 21.09.2023
Date when judgment reserved : 11.10.2023
Date of Judgment : 13.10.2023
JUDGMENT:
1. This appeal impugns judgment dated 17.07.2023 and order on sentence dated 26.08.2023 passed by Sh. Anubhav Jain, Ld. ACMM, Shahdara, Karkardooma Courts, Delhi by which appellant Suman Verma was found guilty for the offence punishable under Section 138 of the Negotiable Instruments Act, Criminal Appeal No.169/2023 Page 1 of 29 Suman Verma vs. Ramesh Verma Judgment dt. 13.10.2023 1881 (in short "the NI Act") and was sentenced.
2. Brief facts as borne out from the trial court records are that accused Suman Verma (appellant herein) and complainant Ramesh Verma (respondent herein) were having good friendly relationship. On 05.07.2014, the complainant/respondent gave a friendly loan of Rs. 4,00,000/ (Four lakhs rupees) to the appellant/accused as she was in dire need of the said amount for her personal necessity for a period of three months against receipt/agreement dated 05.07.2014. The appellant/accused also issued a postdated cheque bearing no. 016194 in favour of the respondent/complainant for an amount of Rs. 4,00,000/ dated 05.10.2014 drawn on Canara Bank, Yamuna Vihar, Delhi. At the request of the appellant/accused, the respondent/complainant extended the time period to return the loan amount for a period of six months, however the appellant/accused failed to pay the loan amount to the respondent/complainant ever after lapse of six months; and after repeated requests she issued a cheque bearing No. 320927 dated 05.08.2015 for an amount of Rs. 4,00,000/ in favour of the respondent/complainant which on presentation in the bank got dishonoured and returned with remarks "Payment Stopped by Drawer". The complainant/respondent informed about the dishonour of the cheque to the appellant/accused but she avoided talking to the respondent/complainant. The complainant/respondent sent a legal notice dated 09.09.2015 to the appellant/accused through registered post but she refused to accept the same. Consequently, the respondent/complainant filed a complaint against the appellant/ accused under Section 138 of Criminal Appeal No.169/2023 Page 2 of 29 Suman Verma vs. Ramesh Verma Judgment dt. 13.10.2023 the NI Act, 1881.
3. Pursuant to service of summons, the appellant/accused appeared before the Ld. Trial Court and notice under Section 251 Cr.P.C. was served upon her on 30.07.2016 to which she pleaded not guilty and claimed trial.
4. The respondent/complainant examined himself as CW1 and relied upon receipt/agreement dated 05.07.2014 Ex.CW1/A, cheque bearing no. 016194 dated 05.10.2014 for Rs. 4,00,000/ Ex. CW1/B, cheque bearing no. 320927 dated 05.08.2015 for Rs.4,00,000/ Ex.CW1/C, bank return memo dated 11.08.2015 Ex.CW1/D, legal notice dated 09.09.2015 Ex.CW1/E, speed post receipt Ex.CW1/F and original postal envelope Ex. PW1/G.
5. The respondent/complainant has examined one more witness, namely, Sh. Ashok Kumar Hans from Oriental Bank of Commerce, Yamuna Bank, Delhi as CW2 who proved letter dated 01.07.2019 and statement of account no. 13332151005844 in the name of appellant/accused Suman Verma as Ex.CW2/A.
6. After closing of evidence of the respondent/complainant on 27.06.2022, statement of the appellant/accused was recorded under Section 313 Cr.P.C. wherein she denied to have availed any loan from the respondent/complainant and to have issued the cheque in question. She though admitted her signature thereon but denied to have filled up the remaining particulars. She claimed that she used to keep blank signed cheques including the cheque in question and cheque no. 16194 at her home for payment of Criminal Appeal No.169/2023 Page 3 of 29 Suman Verma vs. Ramesh Verma Judgment dt. 13.10.2023 electricity bill and someone took away said two cheques from her house which were misused by the respondent/complainant. Though the appellant/ accused chose lead to evidence in her defence, but no evidence has been led by her.
7. The Ld. Trial Court vide judgment dated 17.07.2023 found appellant/accused Suman Verma guilty for commission of offence punishable under Section 138 of the NI Act and vide order dated 26.08.2023 sentenced her to imprisonment for 06 months along with compensation of Rs. 6,50,000/ payable to the respondent/appellant within a month from the date of order and in default of payment of compensation, to further undergo simple imprisonment for 01 month.
8. Aggrieved by the judgment dated 17.07.2023 and order on sentence dated 26.08.2023, the present appeal has been filed by the appellant/accused on the following grounds :
(a) That the Ld. Trial Court has failed to appreciate that the respondent/complainant did not present the first cheque dated 05.10.2014 bearing No. 016194/ for a sum of Rs.4,00,000/ Ex.CW1/B in the bank even after expiry of the claimed loan period and it shows that the complainant/respondent was not having the said cheque Ex.CW1/B in his possession during the alleged period.
(b) That the Ld. Trial Court has failed to appreciate that alleged extended time to repay the loan for a further period of six months also got expired on 05.04.2015 but the cheque Ex.PW1/C bearing no. 320927 is of 05.08.2015 i.e. after more than 4 months of alleged expiry of nine months Criminal Appeal No.169/2023 Page 4 of 29 Suman Verma vs. Ramesh Verma Judgment dt. 13.10.2023 and it shows that the complainant/respondent has misused the stolen cheque of the appellant/accused by materially altering the same.
(c) That the Ld. Trial Court has failed to appreciate that financial condition of the respondent/complainant was not sound to lend alleged loan of Rs. 4,00,000/ to the appellant/respondent on 05.07.2014 which is evident from the Income Tax Returns (ITRs) filed by the appellant /respondent of himself and of his firm for the financial year 20142015 and even he has not shown the alleged loan amount of Rs. 4 lakhs in his ITRs.
(d) That the Ld. Trial Court has failed to appreciate that the respondent/complainant has given false and vague replies during his crossexamination which shows that his statement is not trustworthy.
(e) That the Ld. Trial Court has failed to appreciate that the claim of the respondent/complainant that he had given the loan amount in cash is not allowed as per the law of land and is also not permissible as per Section 269 SS of the Income Tax Act.
(f) That the Ld. Trial Court has failed to appreciate that the respondent/complainant is not a financier nor he is having any license to lend money and only to cover up the legal hurdles, he has falsely claimed to have granted a friendly loan to the appellant/accused.
(g) That the Ld. Trial Court has failed to appreciate that the complainant/respondent is not aware of the mobile number Criminal Appeal No.169/2023 Page 5 of 29 Suman Verma vs. Ramesh Verma Judgment dt. 13.10.2023 of the appellant/accused or place of work of her son nor he has any photographs to show that he or the appellant/accused had ever attended any function, marriage, funeral of each other as admitted by him during his crossexamination and these admissions made by the respondent/complainant falsify his claim to have lent friendly loan to the appellant/accused.
(h) That the Ld. Trial Court has failed to appreciate that
despite categorical admission of the
complainant/respondent in his crossexamination that he has not sent any written communication to the appellant to replace the cheque, there is no plausible explanation given by the complainant/respondent as to how he got the cheque in question replaced from the appellant/accused.
(i) That the Ld. Trial Court has failed to appreciate that complaint filed by the respondent/complainant was not accompanied with mandatory affidavit which was in violation of the directions of the Hon'ble Apex Court. The respondent/complainant even did not get the complaint exhibited in his affidavit in evidence.
(j) That the Ld. Trial Court has failed to appreciate that the respondent/complainant has failed to prove the guilt of the appellant/accused beyond reasonable doubt which is evident from his crossexamination.
9. On these grounds, it is contended by the appellant/accused that the order passed by the Trial Court Criminal Appeal No.169/2023 Page 6 of 29 Suman Verma vs. Ramesh Verma Judgment dt. 13.10.2023 convicting her on the basis of unsubstantial and unreliable piece of evidence is erroneous and against the tenements of law and, therefore, she has prayed for setting aside the impugned judgment dated 17.07.2023 and order on sentence dated 26.08.2023.
10. The appeal has been contested by the respondent by filing reply thereto taking preliminary objections that the present appeal is hopelessly time barred and that the contentions raised by the appellant in the present appeal have already been dealt with by the Ld. Trial Court and were rightly dismissed. In reply on merits, the contentions raised in the present appeal have been denied and it is, inter alia, stated that in the year 20142015, the respondent had filed two ITRs, one in his personal name and the other in his firm's name and paid Rs.4,580/ as tax in his personal ITR and Rs.16,670/ as tax in his firm's ITR and he is paying the income tax regularly which shows that he had capacity to lend more than Rs.4,00,000/ in the year 20142015. It is further stated that the respondent had proved his case on documentary evidence and also with deposition and there is no error in the judgment passed by the Ld. Trial Court. The respondent has prayed for dismissal of the appeal.
11. I have heard the Ld. Counsel for the parties and perused the record carefully.
12. At the outset, I shall deal with the contention of the Ld. Counsel for the respondent that the present appeal is time barred. This contention is based on the premise that the impugned judgment was passed on 17.07.2023 whereas the Criminal Appeal No.169/2023 Page 7 of 29 Suman Verma vs. Ramesh Verma Judgment dt. 13.10.2023 present appeal has been filed on 19.09.2023 which is beyond the limitation period of 30 days and the subsequent order on sentence dated 26.08.2023 which has also been challenged by way of present appeal cannot bring the appeal within the period of limitation qua the judgment passed on 17.07.2023. However, I do not find any merit in this contention. The impugned judgment was passed by the Ld. Trial Court on 17.07.2023 by which the appellant was convicted for the offence under Section 138 of the NI Act and the order on sentence was passed on 26.08.2023. The present appeal has been filed on 20.09.2023 i.e. within 30 days of passing of order on sentence. In Rama Narang vs. Ramesh Narang & Ors., 1995 SCC (2) 513, the Hon'ble Supreme Court while referring to provisions of Sections 353, 354, 356, 357, 359 and 360 of the Code of Criminal Procedure held that, "In view of above provisions it can be seen that after the court record a conviction, the accused has to be heard on the question of sentence and it is only after the sentence is awarded that the judgment becomes complete and can be appealed against under section 374 of the Code of Criminal Procedure. Thus, a judgment is not complete unless the punishment to which the accused person is sentenced is set out therein". Furthermore, as per Article 115 to the Schedule appended to the Limitation Act, the period of limitation for filing an appeal is 30 days from the date of sentence or order. Hence, the present appeal which has been filed within 30 days of order on sentence dated 26.08.2023 is within limitation.
Criminal Appeal No.169/2023 Page 8 of 29Suman Verma vs. Ramesh Verma Judgment dt. 13.10.2023
13. Now coming to the merits of the present appeal.
14. It is a cardinal principle of criminal jurisprudence that it is the burden of the prosecution to prove the guilt of the accused beyond reasonable doubt, however the statutory presumptions wherever are available to the accused create an exception to this cardinal principle by shifting the burden of proof to the opposite party. Among the notable presumptions available under the scheme of the NI Act, two are available under Sections 118 (a) and 139 of the Act.
15. Section 118 (a) of the NI Act provides as under: Presumptions as to Negotiable Instruments Until the contrary is proved, the following presumption shall be made;
(a) of consideration that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration
16. Section 139 of the NI Act reads as under: Presumption in favour of holder It shall be presumed, unless contrary is proved, that the holder of a cheque received the cheque of the nature referred in section 138 for the discharge, in whole or in part, of any debt or other liability.
17. It has been held by the Hon'ble Supreme Court in Rangappa vs. Sri Mohan, (2010) 11 SCC 441 that :
".... the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability."Criminal Appeal No.169/2023 Page 9 of 29
Suman Verma vs. Ramesh Verma Judgment dt. 13.10.2023
18. In recent judgment in Rajesh Jain vs. Ajay Singh, Special Leave Petition (Crl.) No. 12802 of 2022 decided on 09.10.2023, the Hon'ble Apex Court has observed as under:
34. The NI Act provides for two presumptions:
Section 118 and Section 139. Section 118 of the Act inter alia directs that it shall be presumed, until the contrary is proved, that every negotiable instrument was made or drawn for consideration. Section 139 of the Act stipulates that 'unless the contrary is proved, it shall be presumed, that the holder of the cheque received the cheque, for the discharge of, whole or part of any debt or liability.' It will be seen that the 'presumed fact' directly relates to one of the crucial ingredients necessary to sustain a conviction under Section 138."
35. Section 139 of the NI Act, which takes the form of a 'shall presume' clause is illustrative of a presumption of law. Because Section 139 requires that the Court 'shall presume' the fact stated therein, it is obligatory on the Court to raise this presumption in every case where the factual basis for the raising of the presumption had been established. But this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary as is clear from the use of the phrase 'unless the contrary is proved.'
36. The Court will necessarily presume that the cheque had been issued towards discharge of a legally enforceable debt/liability in two circumstances. Firstly, when the drawer of the cheque admits issuance/execution of the cheque and secondly, in the event where the complainant proves that cheque was issued/executed in his favour by the drawer. The circumstances set out above form the fact(s) which bring about the activation of the presumptive clause. [Bharat Barrel vs. Amin Chand] [(1999) 3 SCC 35].
37. Recently, this Court has gone to the extent of Criminal Appeal No.169/2023 Page 10 of 29 Suman Verma vs. Ramesh Verma Judgment dt. 13.10.2023 holding that presumption takes effect even in a situation where the accused contends that 'a blank cheque leaf was voluntarily signed and handed over by him to the complainant. [Bir Singh v. Mukesh Kumar1]. Therefore, mere admission of the drawer's signature, without admitting the execution of the entire contents in the cheque, is now sufficient to trigger the presumption.
38. As soon as the complainant discharges the burden to prove that the instrument, say a cheque, was issued by the accused for discharge of debt, the presumptive device under Section 139 of the Act helps shifting the burden on the accused. The effect of the presumption, in that sense, is to transfer the evidential burden on the accused of proving that the cheque was not received by the Bank towards the discharge of any liability. Until this evidential burden is discharged by the accused, the presumed fact will have to be taken to be true, without expecting the complainant to do anything further.
39. John Henry Wigmore on Evidence states as follows:
"The peculiar effect of the presumption of law is merely to invoke a rule of law compelling the Jury to reach the conclusion in the absence of evidence to the contrary from the opponent but if the opponent does offer evidence to the contrary (sufficient to satisfy the Judge's requirement of some evidence), the presumption 'disappears as a rule of law and the case is in the Jury's hands free from any rule."
40. The standard of proof to discharge this evidential burden is not as heavy as that usually seen in situations where the prosecution is required to prove the guilt of an accused. The accused is not expected to prove the nonexistence of the presumed fact beyond reasonable doubt. The accused must meet the standard of 'preponderance of probabilities', similar to a defendant in a civil proceeding. [Rangappa vs. Mohan (AIR 2010 SC 1898)].
Criminal Appeal No.169/2023 Page 11 of 29Suman Verma vs. Ramesh Verma Judgment dt. 13.10.2023
41. In order to rebut the presumption and prove to the contrary, it is open to the accused to raise a probable defence wherein the existence of a legally enforceable debt or liability can be contested. The words 'until the contrary is proved' occurring in Section 139 do not mean that accused must necessarily prove the negative that the instrument is not issued in discharge of any debt/liability but the accused has the option to ask the Court to consider the nonexistence of debt/liability so probable that a prudent man ought, under the circumstances of the case, to act upon the supposition that debt/liability did not exist. [Basalingappa Vs. Mudibasappa (AIR 2019 SC 1983) See also Kumar Exports Vs. Sharma Carpets (2009) 2 SCC 513].
42. In other words, the accused is left with two options. The first optionof proving that the debt/liability does not existis to lead defence evidence and conclusively establish with certainty that the cheque was not issued in discharge of a debt/liability. The second option is to prove the non existence of debt/liability by a preponderance of probabilities by referring to the particular circumstances of the case. The preponderance of probability in favour of the accused's case may be even fifty one to forty nine and arising out of the entire circumstances of the case, which includes: the complainant's version in the original complaint, the case in the legal/demand notice, complainant's case at the trial, as also the plea of the accused in the reply notice, his 313 statement or at the trial as to the circumstances under which the promissory note/cheque was executed. All of them can raise a preponderance of probabilities justifying a finding that there was 'no debt/liability'. [Kumar Exports and Sharma Carpets, (2009) 2 SCC 513.
43. The nature of evidence required to shift the evidential burden need not necessarily be direct evidence i.e., oral or documentary evidence or admissions made by the opposite party; it may comprise circumstantial evidence or presumption of Criminal Appeal No.169/2023 Page 12 of 29 Suman Verma vs. Ramesh Verma Judgment dt. 13.10.2023 law or fact.
44. The accused may adduce direct evidence to prove that the instrument was not issued in discharge of a debt/liability and, if he adduces acceptable evidence, the burden again shifts to the complainant. At the same time, the accused may also rely upon circumstantial evidence and, if the circumstances so relied upon are compelling the burden may likewise shift to the complainant. It is open for him to also rely upon presumptions of fact, for instance those mentioned in Section 114 and other sections of the Evidence Act. The burden of proof may shift by presumptions of law or fact. In Kundanlal's case (supra) when the creditor had failed to produce his account books, this Court raised a presumption of fact under Section 114, that the evidence, if produced would have shown the nonexistence of consideration. Though, in that case, this Court was dealing with the presumptive clause in Section 118 NI Act, since the nature of the presumptive clauses in Section 118 and 139 is the same, the analogy can be extended and applied in the context of Section 139 as well.
45. Therefore, in fine, it can be said that once the accused adduces evidence to the satisfaction of the Court that on a preponderance of probabilities there exists no debt/liability in the manner pleaded in the complaint or the demand notice or the affidavit evidence, the burden shifts to the complainant and the presumption 'disappears' and does not haunt the accused any longer. The onus having now shifted to the complainant, he will be obliged to prove the existence of a debt/liability as a matter of fact and his failure to prove would result in dismissal of his complaint case. Thereafter, the presumption under Section 139 does not again come to the complainant's rescue. Once both parties have adduced evidence, the Court has to consider the same and the burden of proof loses all its importance. [Basalingappa vs. Mudibasappa, AIR 2019 SC 1983; See also, Rangappa vs. Sri Mohan (2010) 11 SCC 441].
Criminal Appeal No.169/2023 Page 13 of 29Suman Verma vs. Ramesh Verma Judgment dt. 13.10.2023
19. As such, once the issuance of the cheque is admitted or proved, the court is duty bound to raise a presumption that the dishonoured cheque placed before it was indeed issued in discharge of a legally enforceable debt or liability of the amount mentioned therein. Of course, the said presumption is rebuttable one and it is for the accused to prove that the cheque in question had not been issued in discharge of a legally enforceable debt or liability.
20. It has been held in Hiten P Dalal vs. Bratindranath Banerjee, (2001) 6 SCC 16 that a mere plausible explanation given by the accused is not enough to rebut the presumption and the accused has to necessarily disprove the prosecution case by leading cogent evidence that he had no debt or liability to issue the said cheque.
21. In Rangappa vs. Sri Mohan (supra), the Hon'ble Supreme Court has observed as under: Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective to improve the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused/defendant cannot be expected to discharge an unduly high standard of Criminal Appeal No.169/2023 Page 14 of 29 Suman Verma vs. Ramesh Verma Judgment dt. 13.10.2023 proof. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of 'preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accuses may not need to adduce evidence of his/her own.
22. In view of the aforesaid proposition of law laid down by the Hon'ble Apex Court, it has to be seen as to whether the respondent/complainant has been able to prove that there was legally enforceable debt or liability for which the cheque in question was issued by the appellant/accused or that the appellant/accused has been able to rebut the presumption and prove that the cheque in question had not been issued in discharge of legally enforceable debt or liability but the same was stolen by the respondent/complainant.
23. In the present case, the respondent/complainant has claimed that he had advanced a sum of Rs. 4,00,000/ to the appellant/accused as a friendly loan on 05.07.2014 for a period of three months as the appellant/accused was in dire need of the said money and against the said friendly loan, the appellant/accused had issued a post dated cheque Ex. CW1/B dated 05.10.2014 in the sum of Rs. 4,00,000/ and also issued a receipt/agreement Ex.CW1/A on the same date as an Criminal Appeal No.169/2023 Page 15 of 29 Suman Verma vs. Ramesh Verma Judgment dt. 13.10.2023 acknowledgement of the loan. It is further claim of the respondent/complainant that at the request of the appellant/accused, he extended the time for repayment of the loan for another six months but she failed to repay the loan even after expiry of six months and after repeated requests/ follow ups, the appellant/respondent towards discharge of aforesaid liability issued the cheque in question Ex.CW1/C dated 05.08.2015 for Rs.4,00,000/ which on presentation in the bank got dishnoured and returned unpaid with remarks "Payment stopped by the Drawer". Thereafter, the respondent/complainant issued a legal notice dated 09.09.2015 Ex. CW1/E to the appellant/accused but she refused to accept the same and did not pay the loan amount.
24. The appellant/accused has not disputed her signature on the cheque in question but has claimed that she had kept some blank signed cheques at her home for the purpose of payment of utility bills out of which the cheque Ex.CW1/B and the cheque in question Ex.CW1/C had been stolen and misused by the respondent/complainant. The appellant/accused has also denied to have availed friendly loan of Rs. 4,00,000/ from the respondent/appellant, execution of receipt/agreement dated 05.07.2014 Ex.CW1/A and receipt of legal notice dated 09.09.2015 Ex. CW1/E.
25. In view of the aforesaid pleadings of the parties, the admission of the appellant/accused that the cheque Ex.CW1/B and the cheque in question Ex.CW1/C bear her signatures coupled with the fact that there is corresponding receipt Ex.CW1/A on record which as per the respondent/complainant Criminal Appeal No.169/2023 Page 16 of 29 Suman Verma vs. Ramesh Verma Judgment dt. 13.10.2023 was executed by the appellant/accused as an acknowledgement of receipt of friendly loan of Rs.4,00,000/ has raised the presumption that the cheque in question Ex.CW1/C was issued by the appellant/accused towards discharge of legally enforceable debt or liability and she was required to rebut the said presumption. The appellant/accused has vaguely denied to have executed the receipt/agreement Ex.CW1/A, however she has not led any evidence to prove that the receipt/agreement Ex.CW1/A does not bear her signature or the same has been manipulated by the respondent/complainant. The onus was upon the appellant/accused to prove the said fact but she has chosen not to lead evidence in her defence. Mere denial of her signature on the receipt/agreement Ex.CW1/A will not absolve her from the presumption which was against her that she had issued the cheque in question Ex.CW1/C towards legally enforceable debt or liability for which the receipt/agreement Ex. CW1/A was also executed by her.
26. So far as the claim of the appellant/accused regarding theft of cheques Ex.CW1/B and Ex.CW1/C from her house by the respondent/complainant is concerned, it is to be noted that the appellant/accused came to know about the presentation of the cheque in question Ex.CW1/C in the bank by the respondent/complainant in the year 2015 which got dishonoured. Perusal of the trial court records reveals that before filing the complaint under Section 138 of the NI Act, the appellant/accused was issued a legal demand notice dated 09.09.2015 Ex. CW1/E through registered post, but the same was Criminal Appeal No.169/2023 Page 17 of 29 Suman Verma vs. Ramesh Verma Judgment dt. 13.10.2023 received back with the report that the addressee did not accept the post deliberately despite repeated visits. Though in the appeal as well as before the Ld. Trial Court, the appellant/accused has denied to have received the legal demand notice Ex.CW1/E but that denial is frivolous and malafide in view of the fact that the legal demand notice Ex.CW1/E was sent to the correct address of the appellant/accused which fact has not been disputed by her and she is deemed to have served with the legal notice as held in C.C. Alavi Haji vs. Palapetty Muhammad & Anr., (2007) 6 SCC 555 wherein it has been held by the Hon'ble Supreme Court that : "Section 27 gives rise to a presumption that service of notice has been effected when it is sent to the correct address by registered post. In view of the said presumption, when stating that the notice has been sent by registered post to the address of the drawer, it is unnecessary to further aver in the complaint that in spite of the return of the notice unserved, it is deemed to have been served or that the addressee is deemed to have knowledge of the notice. Unless and until the contrary is proved by the addressee, service of notice is deemed to have been effected at the time at which the letter would have been delivered in the ordinary course of business."
27. Furthermore, after filing of the complaint under Section 138 of the NI Act, the appellant/accused appeared before the Trial Court on 27.11.2015 and came to know about the claim of the respondent/complainant that she had taken a friendly loan of Rs. 4,00,000/ from him and towards its repayment the cheque in question was issued by her which on presentation got Criminal Appeal No.169/2023 Page 18 of 29 Suman Verma vs. Ramesh Verma Judgment dt. 13.10.2023 dishonoured.
28. It is, thus, evident that the factum of presentation of the cheque in question Ex.CW1/C by the respondent/complainant came to the knowledge of the appellant/accused in the year 2015 itself. It is also to be noted that the cheque in question on presentation got dishonoured for the reason "Payment stopped by Drawer" vide returning memo dated 11.08.2015 Ex.CW1/D. The intimation regarding dishonour of the cheque in question must have also been sent to the appellant/accused by the banker of the appellant. Even otherwise, CW2 Ashok Kumar Hans, Head Peon from Oriental Bank of Commerce, Yamuna Bank Delhi has proved that vide intimation dated 01.07.2019, the appellant/accused was informed that cheque in question Ex.CW1/C issued by her returned unpaid with remarks "Payment stopped by Drawer".
29. There is nothing on record to show that the appellant/accused despite having coming to know about the presentation of the cheque in question Ex.CW1/C by the respondent/complainant in the bank in the year 2015 and the intimation received from the bank in this regard in the year 2019, had initiated any action against the respondent/complainant for stealing the cheques from her house as alleged by her in her statement recorded under Section 313 Cr.P.C. as well as in the application under Section 145 (2) of the NI Act.
30. It is also interesting to note that even during cross examination of CW1 Ramesh Verma (the respondent/complainant) , not a single suggestion has been given Criminal Appeal No.169/2023 Page 19 of 29 Suman Verma vs. Ramesh Verma Judgment dt. 13.10.2023 that the cheque in question Ex.CW1/C was stolen by the respondent/complainant. Only a vague plea has been taken by the appellant/accused that she used to keep signed blank cheques at her home for payment of utility bills out of which two cheques i.e. cheque Ex. CW1/B and cheque in question Ex.CW1/C had been stolen by the respondent/complainant. It has not been disclosed by her as to when the same were stolen and when she came to know about missing of the said cheques. If the version of the appellant/accused is accepted that she used to keep signed blank cheques at her home for payment of utility bills, then it is not plausible and tenable that factum of missing of the cheques would not have been noticed by her.
31. Further, as noted above, the cheque in question Ex. CW1/C was not dishonoured on account of insufficiency of funds or for any other reason but the same was got dishonoured on account of payment stopped by drawer. It means that the accused had instructed her banker not to make the payment against the cheque in question. There can be two circumstances for which she may have instructed her banker to stop the payment. Firstly, in case when the cheque has not been issued by her and secondly when she did not want to make the payment of the issued cheque.
32. The first circumstance does not appear to be plausible in view of the fact that if she had not issued the cheque and the cheque was stolen, then a person of ordinary prudence would have taken remedial measures by lodging police complaint regarding theft of cheque. It was not only a single cheque but as Criminal Appeal No.169/2023 Page 20 of 29 Suman Verma vs. Ramesh Verma Judgment dt. 13.10.2023 per the claim of the complainant prior to cheque in question, a post dated cheque Ex. CW1/B had also been issued by the accused at the time of taking loan. Therefore, as per version of the appellant/accused, her two cheques were stolen but still she kept silent and did not take any action against the respondent/complainant, more so even after coming to know about the presentation of cheque in question Ex.CW1/C by the complainant in the year 2015 when firstly the complainant sent her legal notice and secondly when she was got served with the notice of the complaint case filed under Section 138 NI Act. No person of ordinary prudence would keep silent if blank cheques duly signed by him/her are stolen and would not file any complaint or lodge any FIR or take any action despite having coming to know about the theft of the cheques and the person who committed said theft and later on misused the same. The said conduct of the appellant/accused does not probablize her defence and falsifies her claim that the respondent/complainant had stolen the said cheques and misused the same and that she did not owe any liability.
33. During course of the arguments, Ld. Counsel for the appellant/accused though has vehemently argued that the respondent/complainant has failed to prove that he was having any such financial capacity in the year 2014 to advance a sum of Rs. 4 lakhs towards friendly loan to the appellant/accused. He also contended that the said loan amount has not been reflected in the ITRs filed by the respondent/complainant for the financial year 20142015 which shows that no such alleged loan was Criminal Appeal No.169/2023 Page 21 of 29 Suman Verma vs. Ramesh Verma Judgment dt. 13.10.2023 advanced by the respondent to the appellant. He further contended that as per Section 269 SS of the Income Tax Act, payment in cash exceeding Rs. 20,000/ could not have been made which further falsifies the claim of the respondent. In support of his contentions, he has relied upon the following judgments : (1) John K. Abraham vs. Simon C. Abraham & Anr., 2014 (1) CC Cases (SC) 161;
(2) Vipul Kumar Gupta vs. Vipin Gupta, 2012 (4) JCC 248;
(3) Kulvinder Singh vs. Kafeel Ahmed, 2013 (1) DCR 417;
(4) Krishna Janardan Bhatt vs. Dattatraya G. Hegde, 2008 Crl. IJ 1172;
(5) K Prakashan vs. P.K. Surenderan, (2008) 1 SCC 258
34. As regards the said contentions, the Ld. Trial Court has rightly relied upon the observations of the Hon'ble High Court of Delhi in Lekh Raj Sharma vs. Yash Pal Gupta, Crl. L.P 567/2014. The same is reproduced as under: "21. The finding that, as the amount of loan disbursed to the respondent was not shown in the balance sheet and ITR, the appellant could not be said to have proved its case beyond reasonable doubt, is also erroneous. In this regard, reference may be placed on the decisions of the Bombay High Court in:
i) Deelip Apte vs. Nilesh P. Salgaonkar & Anr., 2006 (6) BomCR 653, wherein the Court observed:
'The learned J.M.F.C. has also held against the complainant the fact that the complainant had not shown the amount advanced by him in his income tax Criminal Appeal No.169/2023 Page 22 of 29 Suman Verma vs. Ramesh Verma Judgment dt. 13.10.2023 returns. I do not think that every person who gives friendly loans does in all cases show such loans in their income tax returns more so if they are payable on demand after short time. The learned acquitting J.M.F.C. entirely lost sight of the several presumptions which the law has enacted in favour of the complainant.' (Emphasis Supplied)
ii) Mr. Krishna P. Morajkar vs. Mr. Joe Ferrao, 2013 CRIJ (NOC) 572 Bombay (Decided on 19.07.2013), wherein the Court observed:
'The underlined observations do not disclose as to where can one find a prohibition on recovering amounts not disclosed in income tax returns. With utmost humility, I have to state that I have not come across any provision of Income Tax Act, which makes an amount not shown in the income tax returns unrecoverable. The entire scheme of the Income Tax Act is for ensuring that all amounts are accounted for. If some amounts are not accounted for, the person would be visited with the penalty or at times even prosecution under the Income Tax Act, but it does not mean that the borrower can refuse to pay the amount which he has borrowed simply, because there is some infraction of the provisions of the Income Tax Act. Infraction of provisions of Income Tax Act would be a matter between the revenue and the defaulter and advantage thereof cannot be taken by the borrower. In my humble view, to say that an amount not disclosed in the income tax returns becomes irrecoverable would itself defeat the provisions of Section 138 of the Negotiable Instruments Act. Apart from the purpose of this Act, which has been outlined by the learned Single Judge in Shri Deelip Apte (supra) as well as in Sanjay Mishra (supra), it ought to be seen that the moment a person seeks to recover through a cheque an amount advanced in cash it gets amounted for in the system and the revenue authorities can keep a track of that and if necessary tax the person. To brand an amount which is not shown in Income Tax Act as unaccounted money Criminal Appeal No.169/2023 Page 23 of 29 Suman Verma vs. Ramesh Verma Judgment dt. 13.10.2023 would be too farfetched and, therefore, I am in respectful disagreement with the observations in Sanjay Mishra (supra), which in fact amounts to reading an additional requirement in Section 138 of the Negotiable Instruments Act, and legislating that such amounts becomes irrecoverable. At the cost of repetition, for saying that an amount not disclosed in income tax returns cannot be legally recoverable liability, some provisions of law to that effect would have to be shown. Such provision was not noticed by me and even the learned Counsel for the respondent could not show any such provision to me.' (Emphasis Supplied)
22. Similarly, in the present case, the loan given by the petitioner was a friendly loan for the business of the accusedrespondent, in the background that they had known each other for about 40 years. It was payable in a short period of time. Thus, I do not find any merit in the submission of the respondent that since the name of the accusedrespondent has not been shown in the balance sheet, or the amount had not been disclosed in the ITR, it stands established that the loan was not disbursed by the appellant."
35. The Ld. Counsel for the appellant/accused has referred to the ITRs filed by the respondent/complainant for the assessment year 20152016 to show that the respondent/complainant was running into losses and therefore, he could not have advanced loan of Rs. 4,00,000/ to the appellant/accused.
36. In the present case, the respondent/complainant has claimed to have advanced friendly loan of Rs. 4,00,000/ to the appellant/accused on 05.07.2014. Therefore, the ITRs for the assessment year 20152016 are not relevant. The ITRs which are relevant in the present case are of assessment year 20142015 Criminal Appeal No.169/2023 Page 24 of 29 Suman Verma vs. Ramesh Verma Judgment dt. 13.10.2023 filed on record and the same show that the respondent/complainant had paid income tax of Rs. 4538/ for the said assessment year. Therefore, it cannot be said that the respondent was running into losses, he had no financial capacity to advance the loan to the appellant/accused. Moreover, the respondent/complaint has averred in the complaint as well as in his evidence by way of affidavit that at the request of the appellant/accused he arranged the money from his own sources and advanced the same to her.
37. So far as the contentions regarding not showing of loan amount in the ITR and payment of cash exceeding Rs. 20,000/ being barred under Section 269 SS of the Income Tax Act are concerned, the same have already been held to be non fatal to the case of the appellant in view of the observations of the Hon'ble Delhi High Court in Lekh Raj Sharma vs. Yash Pal Gupta (supra).
38. In John K. Abraham vs. Simon C. Abraham & Anr. (supra) relied upon by the Ld. Counsel for the appellant/accused, the claim of the complainant was that sources for advancing a sum of Rs. 1,50,000/ to the accused was from the sale of his portion of his family property and the loan taken from the cooperative society. The complainant also told the Court that he would be able to produce the documents in support of his stand but he failed to do so. There were also other contradictory pleas as to who wrote the contents of the cheque , the date, time or year of the advancement of the loan to the Criminal Appeal No.169/2023 Page 25 of 29 Suman Verma vs. Ramesh Verma Judgment dt. 13.10.2023 accused and in the light of the said contradictory pleas and facts and circumstances of the case and finding lacunas which were fatal to the case of the complainant, the Hon'ble Supreme Court dismissed the complaint.
39. However, the same is not the case here in the present matter where the complainant has categorically disclosed that the accused had approached him for a friendly loan and accordingly he advanced a friendly loan of Rs. 4 lakhs to the accused on 05.07.2014 by arranging the money from his own sources. The complainant has also given details as to when he again approached the accused for repayment of the loan and issuance of the cheque by the accused in his favour pursuant to repeated follow ups.
40. Ld. Counsel for the appellant during course of the arguments has taken this Court through the crossexamination of the respondent/complainant where the complainant has admitted that he was not aware of the mobile number of the appellant/accused or place of work of her son nor he has any photographs to show that he or the appellant/accused had ever attended any function, marriage, funeral of each other and these admissions on the part of the respondent/complainant are sufficient to disprove his claim that he had friendly relations with the accused. However, in my considered opinion, there is no merit in this contention of the Ld. Counsel for the appellant. If the complainant was not able to tell the mobile phone of the accused or place of working of her younger son, that would not be a sufficient ground to discard the claim of the complainant Criminal Appeal No.169/2023 Page 26 of 29 Suman Verma vs. Ramesh Verma Judgment dt. 13.10.2023 that he knew the accused as a friend and advanced her a friendly loan of Rs.4,00,000/. When the accused did not make the payment and litigation started between the parties in the year 2015, relation between them had soured and, therefore, when the respondent/complainant appeared in the court for his cross examination on 20.11.2018, he was not supposed to remember or to have mobile number of the accused and also to know the whereabouts and place of working of her younger son.
41. Ld. Counsel for the appellant has also contended that the complainant has given evasive answers regarding difference of pen and handwriting on the cheque as used for signatures and for filing up other details on it.
42. The Trial Court records reveal that during cross examination of the complainant, a question was put to him that, "Is it correct that pen and writing on cheque Ex. CW1/C are different as used for signatures and for filling up other details?"
Similar question was put to him in respect of cheque Ex. CW1/B to which the complainant could not comment. The complainant was not further suggested by the accused that pen and writing on the cheques Ex. CW1/B and Ex. CW1/C as used for signatures and for filling up other details are different nor any such evidence has been led by the appellant/accused. This Court has seen the cheques Ex. CW1/B and Ex. CW1/C and found that the signatures and other filled up details on both the cheques are in one pen.
43. Ld. Counsel for the appellant has also contended that the complaint was not supported with the affidavit and in the Criminal Appeal No.169/2023 Page 27 of 29 Suman Verma vs. Ramesh Verma Judgment dt. 13.10.2023 absence of verified supporting affidavit, the complaint was not maintainable.
44. Perusal of Trial Court records reveal that the supporting affidavit along with the complaint was not filed by the complainant, but on the same date evidence by way of affidavit of the complainant had been filed reiterating the contents of the complaint. Therefore, it cannot be said that the complaint under Section 138 of the NI Act was not duly verified and sworn on affidavit. The Trial Court has taken note of the same in para number 26 of the judgment. The non filing of the supporting affidavit along with the complaint may be an irregularity but on this count, the complaint cannot be dismissed.
45. In the light of the aforesaid discussions, in my considered opinion, there is no illegality, infirmity or perversity in the judgment dated 17.07.2023 passed by the Ld. Trial Court thereby convicting the appellant/accused under Section 138 of the NI Act. The impugned judgment is well reasoned and does not call for any interference.
46. Vide impugned order dated 26.08.2023, the appellant/accused was sentenced to imprisonment for 06 months along with compensation of Rs. 6,50,000/ payable to the respondent/complainant within a month from the date of order and in default of payment of compensation, to further undergo simple imprisonment for 01 month.
47. In the present case, the friendly loan of Rs.4,00,000/ was advanced by the respondent/complainant to the appellant/accused on 05.07.2014 and the order on sentence Criminal Appeal No.169/2023 Page 28 of 29 Suman Verma vs. Ramesh Verma Judgment dt. 13.10.2023 has been passed after about 09 years of the date of the advancement of the loan and, therefore, the compensation awarded to the respondent/complainant as well as the sentence of imprisonment of six months awarded to the appellant/accused does not appear to be on higher side. This Court is in agreement with the Ld. Trial Court on the quantum of sentence awarded to the appellant/accused vide impugned order dated 26.08.2023. Thus, no interference is required.
48. The present appeal is devoid of any merits and the same is hereby dismissed.
49. The appellant is taken into custody and warrant of commitment be sent to the concerned Jail Superintendent for executing the sentence.
50. Copy of judgment is supplied to the appellant free of cost against acknowledgement.
51. Appeal file be consigned to Record Room after due compliance.
52. TCR be sent back to the Ld. Trial Court along with copy of this judgment.
Announced in the open Court on 13th October, 2023 (Balwant Rai Bansal) Special Judge (NDPS Act), Shahdara Karkardooma Courts, Delhi Criminal Appeal No.169/2023 Page 29 of 29 Suman Verma vs. Ramesh Verma Judgment dt. 13.10.2023