Delhi District Court
And Credit Society vs Subhash on 15 April, 2023
IN THE COURT OF MS. NIDHI BALA, METROPOLITAN
MAGISTRATE, NI ACT DIGITAL COURT, NORTH EAST
DISTRICT,KARKARDOMA COURT, DELHI
IN RE: M/S JYOTI RAW PHOOLEY CO-OPERATIVE URBAN THRIFT
AND CREDIT SOCIETY VERSUS SUBHASH
1. Complaint Case no. : 570/2021
2. Date of Institution of case : 11.08.2021
3. Name of the complainant : The Jyoti Raw Phoole Co-operative
Urban Thrift & Credit Socieity Ltd.
At:- F/144, Gali No. 2,
Ganga Vihar, Delhi -110094
Through it's AR Sh. Vinod Choudhary
4. Name of Accused person : Sh. Subhash
S/o. Sh. Bishna
R/o. H.No.A-57, MCD Flats,
New Usmanpur, Delhi-110053
5. Offence complained of : Section 138 NI Act
6. Plea of accused : Pleaded not guilty
7. Final Order : Convicted
8. Date of judgment : 15.04.2023
JUDGMENT
1. Vide this judgment I am going to decide the present complaint case for an offence punishable U/Sec.138 of the Negotiable Instruments Act, 1881 (hereinafter "the NI Act").
2. FACTUAL BACKGROUND:- Digitally signed by NIDHI NIDHI BALA Date:
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2.1 Complainant Jyoti Raw Phooley Co-Operative Urban Thrift and Credit Society
Ltd. is a registered society under the Registartion of Societies Act,1972(as amended) engaged in the business of thrift credit and extending loan to its registered members and operating its business from the above noted address, filed the present complaint through its authorised representative Mr. Vinod Choudhary who is duly authorised to engage counsel/advocate to get the complaint filed, sign, verify, to adduce evidence, file documents, admit or deny any document of opposite party to peruse, withdraw or compromise the matter with the opposite party as may be deemed fit and proper by him or instruct the engaged counsel on that behalf. 2.2 Accused is the registered member of the complainant society and took a loan of Rs. 2,00,000/-(Two Lacs) on 24.08.2018 ( hereinafter called "the loan in question") against his personal account/ membership in the society bearing no. 002636 and agreed for the repayment of loan with interest in monthly insatllments. However, after taking the loan, accused had been a defaulter in paying the required payable outstanding monthly installments dues and did not pay the same despite several requests made by the complainant society through letters and telephonic messages. After repeated requests made by the complainant society, accused went to the office of complainant society and issued a cheque bearing number 865794 dated 16.06.2021 of Rs. 1,79,361/-( One0 lac Seventy nine thousand Three hundred and Sixty one ) drawn on State Bank of India, Gokalpuri, Delhi in favour of the complainant society (hereinafter "the cheque in question") in discharge of his outstanding payable dues against the abovesaid loan taken from the complainant society and assured the complainant society that the said cheque shall be encashed on its presentation. After the assuarance of the accused, complainant society presented the cheque in question in its bank account being maintained at State Bank of India, Gokal Puri Branch, Delhi (within the jurisdiction of this court). However, the said cheque in question was returned as unpaid/dishonored for the reason "Funds Insufficient" vide cheque return memo dated 17.06.2021.
Digitally signedNIDHI byDate:NIDHI BALA BALA 2023.04.15 16:58:14 +0530 CC No. 570/2021 The Jyoti Raw Phoole Cooperative T/C Society Vs. Subhash Page 2 of 12 2.3 Thereafter on 05.07.2021, Complainant society sent a legal demand notice to accused through counsel and called upon her to make the payment of the cheque amount in question within 15 days of receipt of legal notice but accused failed to make the payment of the cheque amount despite service of notice since it was sent on her true and correct last known address and therefore, the present complaint is filed by the Complainant society through its AR Mr. Vinod Choudhary against the accused for the offence under Section 138 of the NI Act.
3. On being satisfied of the prima facie ingredients of Section 138 NI Act, cognizance was taken and summons were issued against the accused vide order dtd. 26.03.2021 and he entered his appearance alongwith his counsel after issuance of Non-Bailable warrants and accused was admitted on bail and on the same day notice under Section 251 Cr.PC r/w Section 263(g) Cr.P.C was framed and served upon the accused to which he pleaded not guilty and claimed trial. Accused admitted certain facts pursuant to which his statement was recorded under Section 294 Cr.P.C wherein he admitted his signature,however, denied filling up the other contents such as name, date and amount upon the cheque in question and also admitted the fact of the dishonour of the cheque in question. Accused further admitted the fact of receiving the legal demand notice sent by complainant but denied its contents. Accused further admitted the loan in question having been taken from the complainant society and the execution of loan documents in this regard. While putting forth his plea of defence, accused denied liability of cheque amount towards the complainant, however, admitted the loan of Rs.2,00,000/- (Two Lac) having been taken from the complainant. The plea of accused is being reproduced hereinafter for ready reference:
"I had taken the loan from the complainant of Rs. 2,00,000/- in the year 2017-
18. I have repaid around Rs. 45,000/- to the complainant. I do not owe the liability of cheque amount to the complainant. The cheque in question has been given to the complainant as security at the time of taking the loan. I do not want to say anything else."Digitally signed
NIDHI by NIDHI BALA Date:
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4. Matter was settled between the parties in mediation, however, accused did not comply with the terms of the settlement and his statement qua the same was also not recorded in the court. Therefore, the matter was proceeded on merits. No application under section 145(2) of NI Act was moved on behalf of the accused despite giving the opportunity, therefore the opportunity given to accused to cross examine the AR of complainant was closed since accused did not have any plausible defence to make as he admitted the loan in question and also his signatures on the cheque in question.
5. EVIDENCE OF COMPLAINANT:-
5.1. In Complainant's evidence, AR of the complainant (CW-1) tendered his evidence in the form of affidavit (as the solitary witness) being duly aquainted with the facts and circumstances of the present case and relied upon the following documents:
i) Ex. CW-1/A : Evidence of AR of complainant by way of affidavit.
ii) Ex. CW-1/1 and Ex. CW-1/2 : Copy of Resolution and authority letter passed by the complainant society in favour of the AR/CW-1 to file the present case and to depose in the court respectively.
iii) Ex. CW-1/3 : Cheque bearing number 865794 dated 16.06.2021 of Rs.
1,79,361/-( One lac Seventy nine thousand Three hundred and Sixty one ) drawn on State Bank of India, Gokalpuri, Delhi (Admitted by accused during his statement recorded under Sec.294 Cr.P.C,1973)
iv)Ex. CW-1/4: Original Cheque Return Memo dtd. 17.06.2021 (Admitted by accused during his statement recorded under sec.294 Cr.P.C,1973).
v) Ex. CW-1/5: Statutory Legal demand notice dtd. 05.07.2021 sent by complainant to accused(The address as well as fact of receiving the legal demand notice sent by complainant is admitted by accused during his statement recorded under Sec.294 Cr.P.C,1973).
vi)Ex. CW-1/6 (Colly) and Ex.CW-1/7: Postal receipt and Internet generated tracking report respectively.(The fact of receiving the legal demand Digitally signed by NIDHI NIDHI BALA Date:
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notice sent by complainant is admitted by accused during his statement recorded under Sec.294 Cr.P.C,1973).
vii)Ex. CW-1/8, Ex. CW-1/9 and Ex. CW-1/10: Loan Application, Bond signed by accused and Voucher respectively (Admitted by accused during his statement recorded under sec.294 Cr.P.C,1973).
viii)Ex. CW-1/11: Computer generated loan account statement showing the out-standing amount against the accused as on 15.06.2021.
6. The accused was then examined under Section 313 Cr.PC wherein all the incriminating evidence were put to the accused and he affirmed the fact of having taken the loan in question from the complainant society, however denied the liability of the cheque amount submitting that he had paid some amount around Rs. 45,000/- (Forty five thousand) to the complainant society against the loan in question and further submitted that he had given the cheque in question signed in blank to complainant society only as security at the time of taking the loan in question and denied of having given the said cheque in question after their final demand made for the outstanding loan amount.
7. EVIDENCE OF ACCUSED:-
7.1. Accused did not lead any defence evidence.
8. Final arguments have been heard at length on behalf of Complainant as well as accused. Complete record has been perused carefully.
9. ARGUMENTS ON BEHALF OF COMPLAINANT:-
9.1. During the course of arguments, Ld. Counsel for complainant reiterated the contents of the complaint and the evidence affidavit of the AR of complainant and further argued that the loan amount of Rs. 2,00,000/-(Two Lac) is admitted by the Digitally signed NIDHI by NIDHI BALA Date:
BALA 2023.04.15 16:58:28 +0530 CC No. 570/2021 The Jyoti Raw Phoole Cooperative T/C Society Vs. Subhash Page 5 of 12 accused from the complainant society. Ld. Counsel further argued that accused has admitted his signatures upon the cheque in question and has vaguely denied the liability towards the complainant society against the cheque in question. Ld. Counsel for the complainant has further argued that once the accused has admitted his signatures upon the cheque in question, the legal presumptions of Section 118(a) and section 139 of NI Act arises in favour of the complainant and accused has failed to rebut the said presumption of law by leading any cogent evidence. Ld. Counsel for the complainant has further argued that once the presumption has arisen in favour of the complainant then the burden of proof shifts to the accused to prove otherwise and the burden of complainant stands discharged. Ld. Counsel further argued that accused settled the present case with the complainant in the mediation, however, did not comply with the terms of settlement in order to delay the trial and to mislead the court without any inclination to pay the settlement amount. It is further submitted by the Ld. Counsel for the complainant that the complainant has been able to prove all the ingredients of the offence under Section 138 of the NI Act against the accused.The Complainant has thus prayed for conviction of the accused for the offence u/s 138 of NI Act.
10. ARGUMENTS ON BEHALF OF ACCUSED:-
10.1. Per contra, Ld. Counsel for the accused argued that accused does not owe the liability to the complainant society qua the cheque in question since the same was not issued against any liability but as security at the time of taking loan in question and complainant has misused his security cheque. Ld. Counsel has further argued that the accused had paid some amount against the loan in question which was not considered by the complainant society. Ld. Counsel further argued that accused does not owe the cheque amount and the same is an exaggerated amount by the complainant society.
Ld. Counsel further argued that accused has settled the present case with the complainant in the mediation and ready to comply with the settlement terms.
Digitally signedNIDHI by NIDHI BALA Date:
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11. Now the foremost provision of law to settle the entire dispute between the parties is Sec. 138 of NI Act and the same is quoted hereunder for the ready reference:-
"138. Dishonour of cheque for insufficiency, etc., of funds in the account.
--Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall apply unless--
(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice; in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
Explanation.--For the purposes of this section, "debt of other liability"
means a legally enforceable debt or other liability.
11.1. The essential ingredients in order to attract Sec. 138 of NI Act, 1881 are as following:
i) The cheque for an amount is issued by the drawer to the payee/complainant on a bank account being maintained by him.
ii) The said cheque is issued for the discharge, in whole or in part of any debt or liability.
iii) The cheque is returned by the bank unpaid on account of insufficient amount to honour the cheque or it exceeds the amount arranged to be paid from that account by an agreement made with the bank.
iv) The cheque is presented within 3 months from the date on which it is drawn or within the period of its validity.
v) within 30 days a legal demand notice is issued by the payee or the holder in due course to the drawer of the cheque on receipt of information by him from the bank regarding the dishonour of the cheque.
Digitally signed by NIDHI NIDHI BALA Date:
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vi) The drawer of the said cheque fails to make payment of the said amount of the money as demanded in the legal demand notice to the payee or the holder in due course within 15 days of the reciept of said notice.
vii) The debt or other liability against which the cheque was issued is legally enforceable.
12. Now, coming to the facts of the present complaint case keeping in view the essential ingredients of section 138 of NI Act. In this case, it is not disputed by the accused that the cheque in question bears his signatures and belongs to him of a bank account being maintained by him though he denied the fact of filling up the cheque in question. The said proposition has been duly observed by Hon'ble Supreme Court in the case of Bir Singh versus Mukesh Kumar, (2019) 4 SCC 197. The relevant paras are being reproduced hereinafter for ready reference:-
"36. Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt.
37. A meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted.
38. If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence."
And further reiterated in Triyambak S Hedge vs Sripad (2021) SCC Online SC 788. In the present case, accused has duly admitted her signatures upon the cheque in question though denied the fact of having the liability of cheque amount in question, however he failed to establish this fact by any cogent evidence or any plausible explainantion thereby attracting the initial presumption of section 139 of NI Act in favour of the complainant. Further, Digitally signed NIDHI by NIDHI BALA Date:
BALA 16:58:44 2023.04.15 +0530 CC No. 570/2021 The Jyoti Raw Phoole Cooperative T/C Society Vs. Subhash Page 8 of 12 during his plea of defence, accused has admitted the loan amount in question having been taken from the complainant society and further stated that he has repaid some loan amount. However, he failed to prove the same by leading any cogent evidence.
12.1. Keeping in view the aforesaid observation of Hon'ble Apex Court, the essential ingredient (i) as discussed in the preceding paragraph stands fulfilled.
Accused has further admitted fact of dishonour of the cheque in question as well as fact of receiving the legal demand notice. Hence, the essential ingredients iii), iv), v) and vi) also stand proved.
13. Now coming to the last and the remaining core ingredient of section 138 of NI Act and the real issue of controversy herein i.e. whether the cheque in question was issued in discharge of any debt or liability, whole or in part. Section 118(a) and Section 139 of the NI Act are germane to this and according to Section 139 of Negotiable Instruments Act, which mandates that unless the contrary is proved, it is to be presumed that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability. Section 118 and 139 of NI Act are being reproduced herein for ready reference:-
Section.118 Presumptions as to negotiable instruments. --Until the contrary is proved, the following presumptions 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, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;
(b) as to date --that every negotiable instrument bearing a date was made or drawn on such date;
(c) as to time of acceptance --that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity;
Digitally signed by NIDHI NIDHI BALA Date:
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(d) as to time of transfer --that every transfer of a negotiable instrument was made before its maturity;
(e) as to order of indorsements --that the indorsements appearing upon a negotiable instrument were made in the order in which they appear thereon;
(f) as to stamps --that a lost promissory note, bill of exchange or cheque was duly stamped;
(g) that holder is a holder in due course --that the holder of a negotiable instrument is a holder in due course:
Provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him.
Sec.139. Presumption in favour of holder.--It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability."
13.1. Needless to mention herein that the presumption contemplated under Section 139 of the Negotiable Instruments Act, is a rebuttable presumption. However, the onus of proving that the cheque was not in discharge of any debt or other liability is on the accused drawer of the cheque. And in the present case accused has admitted his liability and also admitted his signature on the cheque in question and has not rebutted the presumption of law in favour of complainant. On the aspects of preponderance of probabilities, the accused has to bring on record such facts and such circumstances which may lead the court to conclude either that the consideration did not exist or that its nonexistence was so probable that a prudent man would, under the circumstances of the case, act upon the plea that the consideration did not exist. The Hon'ble Supreme Court in Rohitbhai Jivanlal Patel vs State of Gujarat and Another 2019) 18 SCC 106 and in various other rulings have time and again, emphasized that though there may not be sufficient negative evidence which could be brought on record by the accused to discharge his burden, yet mere denial would not fulfil the requirements of rebuttal as envisaged under section 118 and 139 of the NI Act.
Digitally signed by NIDHI NIDHI BALA Date:
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Further, it has been held in Rajesh Agarwal v. State, 2010 SCC online Del 2501 that:-
"9. .....There is no presumption that even if an accused fails to bring out his defence, he is still to be considered innocent. If an accused has a defence against dishonour of the cheque in question, it is he alone who knows the defence and responsibility of spelling out this defence to the court and then proving this defences is on the accused....."
In the present case, accused has merely denied the liability of the cheque amount in question and failed to prove the same either by rebutting the testimony of AR of complainant through cross examination which led this court to believe that the non-existence of the consideration for which cheque in question is allegedly issued to complainant by accused, is so probable that any prudent man would consider the same in the facts and circumstances similar to the case in hand or by leading any cogent and believable evidence since at the time of his plea of defence recorded while framing notice, accused himself admitted the loan in question having been taken from the complainant society and also admitted the fact that he failed to pay the installments of the loan after a particular period of time.
14. In the present case in hand, keeping in view the facts and circumstances of the present case and the settled position of law in this regard, the presumption of law as per section 118(a)and section 139 of NI Act clearly comes to the rescue of complainant and its burden of proving the fact of issuance of cheque in question in discharge of legally enforceable debt stands discharged and the accused has miserably failed to dischrge his reverse onus since accused has only taken a single defence that he paid some loan amount and does not owe the liability of the cheque amount in question, however, he failed to bring on record anything to show the payment made by him and also failed to rebut the loan account statement produced by the complainant society in evidence which showed the outstanding liability of accused against the loan in question for which he issued the cheque in question. In Digitally signed NIDHI by NIDHI BALA Date:
BALA 16:59:00 2023.04.15 +0530 CC No. 570/2021 The Jyoti Raw Phoole Cooperative T/C Society Vs. Subhash Page 11 of 12 the light of the foregoing discussions, this court is of the opinion that the accused has not led any cogent evidence to rebut presumptions under Sec. 118 and 139 of NI Act. There is nothing coming out during the trial which would probablise the defence raised by the accused or falsify the case of the complainant.
15. In the above view, the complainant has proved that the accused had issued the cheque in question in its favour for discharge of the legally enforceable liability. This Court has considered opinion that in the facts and circumstances of the present case, the complainant has proved his case against the accused for the offence under Sec. 138 Negotiable Instruments Act. Resultantly, the accused is, thus, held guilty and stands convicted for the said offence.
Digitally
signed by
NIDHI NIDHI BALA
Date:
BALA 2023.04.15
16:59:07
+0530
Announced in Open Court (NIDHI BALA)
today on 15.04.2023 MM (NI Act) Digital Court,
NORTH EAST,KARKARDOOMA
Certified that this judgment contains 12 pages and each page bears my signatures.
Digitally signedNIDHI by NIDHI BALA Date:
BALA 2023.04.15 16:59:14 +0530 (NIDHI BALA) MM (NI Act) Digital Court, NORTH EAST,KARKARDOOMA/15.04.2023 CC No. 570/2021 The Jyoti Raw Phoole Cooperative T/C Society Vs. Subhash Page 12 of 12