Delhi District Court
Sh. Sunil Kumar Sharma vs Mohd. Jamaluddin on 3 August, 2021
IN THE COURT OF SH REETESH SINGH: ADDITIONAL SESSIONS
JUDGE-2 (EAST), KARKARDOOMA COURTS, DELHI
CA No.180/2019
In the matter of
M/s S.R. Buildtech
Through partner /AR
Sh. Sunil Kumar Sharma
S/o Sh. Ram Shankar Sharma,
R/o H.No. WZ 557, Naraina,
C-Block, Naraina Industrial Estate,
South West, Delhi-110028
............... Appellant
Vs.
Mohd. Jamaluddin
S/o Sh. Naseer,
R/o House No.500/19-A,
3B Gali no.10, Bhikam Singh Colony,
Vishwas Nagar, Shahdara, Delhi-110032 ................. Respondent
Date of institution : 16.11.2019
Final arguments : 30.07.2021
Date of order : 03.08.2021
CA No.180/2019, 181/2019 & 182/2019 M/s S.R. Buildtech Vs. Mohd. Jamaluddin Page No.1/15
AND
CA No.181/2019
In the matter of
M/s S.R. Buildtech
Through partner /AR
Sh. Sunil Kumar Sharma
S/o Sh. Ram Shankar Sharma,
R/o H.No. Wz 557, Naraina,
C-Block, Naraina Industrial Estate,
South West, Delhi-110028
............... Appellant
Vs.
Mohd. Jamaluddin
S/o Sh. Naseer,
R/o House No.500/19-A,
3B Gali no.10, Bhikam Singh Colony,
Vishwas Nagar, Shahdara, Delhi-110032 ................. Respondent
Date of institution : 16.11.2019
Final arguments : 30.07.2021
Date of order : 03.08.2021
CA No.180/2019, 181/2019 & 182/2019 M/s S.R. Buildtech Vs. Mohd. Jamaluddin Page No.2/15
AND
CA No.182/2019
In the matter of
M/s S.R. Buildtech
Through partner /AR
Sh. Sunil Kumar Sharma
S/o Sh. Ram Shankar Sharma,
R/o H.No. Wz 557, Naraina,
C-Block, Naraina Industrial Estate,
South West, Delhi-110028
............... Appellant
Vs.
Mohd. Jamaluddin
S/o Sh. Naseer,
R/o House No.500/19-A,
3B Gali no.10, Bhikam Singh Colony,
Vishwas Nagar, Shahdara, Delhi-110032 ................. Respondent
Date of institution : 16.11.2019
Final arguments : 30.07.2021
Date of order : 03.08.2021
ORDER
03.08.2021
1. These three appeals are being taken together for disposal as they arise out of identical impugned orders between the same parties.
CA No.180/2019, 181/2019 & 182/2019 M/s S.R. Buildtech Vs. Mohd. Jamaluddin Page No.3/15CA No.180/2019, M/s S.R. Buildtech Vs. Mohd. Jamaluddin
2. This appeal has been filed against the impugned order dated 23.09.2019 passed in CC No.55310 by which the appellant was convicted for the offence under section 138 of the Negotiable Instruments Act 1881 (NI Act) and order on sentence dated 15.10.2019 by which the appellant was awarded sentence of simple imprisonment for a period of six months and was directed to pay compensation of Rs.50,00,000/- to the complainant. In default of payment of compensation, the appellant was directed to undergo further simple imprisonment of one month.
CA No.181/2019, M/s S.R. Buildtech Vs. Mohd. Jamaluddin
3. This appeal has been filed against the impugned order dated 23.09.2019 passed in CC No.55311 by which the appellant was convicted for the offence under section 138 of the Negotiable Instruments Act 1881 (NI Act) and order on sentence dated 15.10.2019 by which the appellant was awarded sentence of simple imprisonment for a period of six months and was directed to pay compensation of Rs.50,00,000/- to the complainant. In default of payment of compensation, the appellant was directed to undergo further simple imprisonment of one month.
CA No.182/2019, M/s S.R. Buildtech Vs. Mohd. Jamaluddin
4. This appeal has been filed against the impugned order dated 23.09.2019 passed in CC No.48850/2016 by which the appellant was convicted for the offence under section 138 of the Negotiable Instruments Act 1881 (NI Act) and order on sentence dated 15.10.2019 by which the appellant was awarded sentence CA No.180/2019, 181/2019 & 182/2019 M/s S.R. Buildtech Vs. Mohd. Jamaluddin Page No.4/15 of simple imprisonment for a period of six months and was directed to pay compensation of Rs.50,00,000/- to the complainant. In default of payment of compensation, the appellant was directed to undergo further simple imprisonment of one month.
5. Trial Court record reveals that all the three complaints were heard and tried together and were decided, by separate judgments, on the same day i.e. 23.09.2019. Subsequently, orders on sentence were also passed separately in each case on 15.10.2019. The cheque amount in CC No.55310/2016 is Rs.4,50,000/- (cheque no.172257 dated 15.01.2015 drawn on Axis Bank Ltd.). The cheque amount in CC No.55311/2016 is Rs.4,50,000/- (cheque no.172256 dated 30.01.2014 drawn on Axis Bank Ltd.). The cheque amount in CC No.48850/2016 is Rs.35,50,000/- (cheque no.172260 dated 08.07.2015 drawn on Axis Bank Ltd.). However, the Ld. Trial Court in each of the three orders on sentence has directed the appellant to pay compensation of Rs.50,00,000/- to the respondent/complainant. All the three orders on sentence mention all the three complaint case numbers and it seems that the order directing the appellant to pay compensation of Rs.50,00,000/- to the complainant is a consolidated amount for payment of compensation qua all the three cheques.
ARGUMENTS ON BEHALF OF APPELLANT M/s S.R. Buildtech
6. Sh. M.K. Sharma, Ld. Counsel for the appellant has argued that these proceedings arise in pursuance of three cheques handed over by the appellant to the respondent/complainant upon execution of a Memorandum of Understanding (MOU) dated 07.07.2014 executed between the appellant and the respondent. He submitted that the appellant and the respondent had entered into an agreement for CA No.180/2019, 181/2019 & 182/2019 M/s S.R. Buildtech Vs. Mohd. Jamaluddin Page No.5/15 construction of property bearing no. B-128, Village Khokari, New Delhi, owned by a third person. Both the parties had agreed to invest equal amounts for the construction of the said property and had agreed to share the profits and losses equally. He submitted that some disputes arose during the course of construction with the owner of the property and the project could not be completed and that both the parties suffered losses equally. However the appellant, as a humanitarian gesture, agreed to compensate the respondent/complainant with a sum of Rs.46,00,000/-. For this purpose the parties entered into a written MOU dated 07.07.2014. The terms of the MOU record that the payment of Rs.46,00,000/- by the appellant to the respondent was a purely humanitarian gesture and no right can be claimed by the respondent/complainant on account of failure on the part of the appellant in making payment of the said amount.
7. Sh. M.K. Sharma, Ld. Counsel for the appellant has further submitted that MOU records that out of the amount of Rs.46,00,000/- agreed to be paid by the appellant to the respondent, Rs.1.50 lac had been paid in cash at the time of execution of the MOU, leaving a balance of Rs.44,50,000/-. Three cheques, two of which are for Rs.4,50,000/- each and one cheque for Rs.35,50,000/- were handed over by the appellant to the respondent only as security with the understanding that the same would not be presented for payment at any point of time, even if the appellant did not pay the balance amount of Rs.44,50,000/- as per the MOU. He further submitted that respondent duly signed the said MOU after going through its contents but still went on to present the security cheques for payment which he could not have done. He reiterated that the parties had agreed to construct the aforesaid property at Village Kilokari agreeing to bear profits and losses equally. The appellant as well as respondent suffered losses. Although there was no CA No.180/2019, 181/2019 & 182/2019 M/s S.R. Buildtech Vs. Mohd. Jamaluddin Page No.6/15 obligation on the part of the appellant to compensate the respondent for his losses, the appellant as a purely humanitarian gesture offered to pay compensation to the respondent. The terms of the MOU vide terms record that the respondent will not file any suit, complaint etc. before any court of law for the recovery of the said amount. He submitted that there was no legally enforceable debt payable by the appellant to the respondent and prayed that the impugned orders be set aside.
ARGUMENTS ON BEHALF OF RESPONDENT MD. JAMALUDDIN
8. Opposing the prayer made in the appeals, Sh. Amit Tanwar, Ld. Counsel for the respondent/ complainant has argued that the MOU was executed only to record the fact that the appellant was liable to pay Rs.46,00,000/- to the respondent/complainant. The three postdated cheques which were handed by the appellant to the respondent are duly mentioned in the MOU with all requisite details i.e. cheque number, date, and amount. The said cheques were handed over as security which is recorded in the MOU with the understanding that the same would be presented for payment upon any default committed by the appellant in making payment in terms of the MOU. He submitted that as per MOU, the appellant was to make the payment of Rs.44,50,000/- within one year with six months grace period from the date of execution of the MOU i.e. 07.07.2014. The three postdated cheques, which were handed over as security, were presented for payment on the respective dates of the cheques as the appellant did not make payment to the respondent as per the MOU.
9. Sh. Amit Tanwar, Ld. Counsel for the respondent/complainant further argued that at the stage of framing of notice under section 251 of the Cr.PC as well as recording of statement under section 313 of the CrPC, the appellant admitted his CA No.180/2019, 181/2019 & 182/2019 M/s S.R. Buildtech Vs. Mohd. Jamaluddin Page No.7/15 liability towards the complainant. He also admitted his signatures and all other particulars on the cheques which he stated had been filled by him. On such admission, the presumptions under section 139 of the NI Act arose in favour of the complainant and against the appellant to the effect that there existed a legally enforceable debt in discharge of which the cheques were handed over. He submitted that it is settled law that once the presumptions under section 139 of the NI Act are drawn, onus to rebut the same falls on the person accused who may rebut such presumptions by leading appropriate evidence in defence. He submitted that despite grant of repeated opportunities, the appellant failed to cross-examine the complainant who stepped into the witness box as CW-1. The appellant chose to lead evidence in defence but did not do so. The evidence of the complainant as well as the presumption under section 139 of the NI Act went unrebutted. He submitted that in these circumstances, the Ld. Trial Court rightly went on to convict and sentence the appellant by the impugned orders which do not call for any interference. Ld. Counsel for the respondent/complainant submitted that a complaint for the offence under section 138 of the NI Act would be maintainable against cheques given as security so long as the cheque is for an existing liability.
10. I have heard the Ld. Counsel for the parties and have perused the record of the Ld. Trial Court.
11. The facts leading to the filing of the present appeals are that on 03.02.2015 CC No. 55311/2016 was filed by the respondent/complainant in respect of cheque no. 172256 dated 30.11.2014 for Rs.4,50,000/- having been dishonoured upon presentation on 30.12.2014 for the reason of insufficiency of funds. On 02.03.2015 CC No. 55310/2016 was filed by the respondent/complainant in respect CA No.180/2019, 181/2019 & 182/2019 M/s S.R. Buildtech Vs. Mohd. Jamaluddin Page No.8/15 of cheque no.172257 dated 15.01.2015 for Rs.4,50,000/- having been dishonoured upon presentation on 16.01.2015 for the reason of insufficiency of funds. On 14.09.2015 CC No.48850/2016 was filed by the respondent/complainant in respect of cheque no. 172260 dated 08.07.2015 for Rs.35,50,000/- having been dishonoured upon presentation on 22.07.2015 for the reason of insufficiency of funds.
12. The averments made in all the three complaints are identical. The complainant in his complaints has stated that the appellant had a liability of Rs.46,00,000/- towards the complainant and the parties entered into an MOU dated 07.07.2014 vide which the appellant acknowledged his said liability and agreed to pay the same within one year with a grace period of six months from the date of the execution of MOU. Rs.1,50,000/- was paid by the appellant to the complainant at the time of execution of MOU and he undertook to pay the balance amount. In discharge of the liability of balance amount of Rs.44,50,000/-, the appellant issued the above mentioned cheques which upon presentation were returned dishonoured with the remarks 'funds insufficient'. The complainant has stated that he issued notices to the appellant calling upon him to pay the cheque amounts but the appellant failed to do so after which these complaints were filed by the complainant for the offence under section 138 of the NI Act.
13. Upon pre-summoning evidence being led by the complainant on affidavit, the Ld. Trial Court summoned the appellant for the offence under Section 138 of the NI Act. By order dated 20.05.2017 notice under section 251 of the CrPC was framed against the appellant in all the three cases. In response to the questions put by the court, the appellant admitted his signature on the cheques. He CA No.180/2019, 181/2019 & 182/2019 M/s S.R. Buildtech Vs. Mohd. Jamaluddin Page No.9/15 denied having received the demand notice. He pleaded not guilty and claimed trial. Regarding his plea of defence, the appellant in all the three cases stated as under: -
"Q. What is your plea of defence?
Ans. The cheque in question was given by me to the complainant only as security purposes. The complainant was supposed to invest Rs.1 crore in a project in which I was partner along with complainant and Mr. Mohd. Rafiq. I had invested around Rs.60 lakhs in the project. Ex. CW1/A was MOU entered between me and the complainant. The project had remained incomplete. I have liability to the tune of Rs.38 lakhs towards the complainant. I had given the cheque as I had assured the complainant that I will give the payment with respect to the loss suffered by the complainant. Complainant had made the investment for the sum of Rs.38 lakhs only in the project. I have no personal liability with respect to cheques in question."
14. The appellant also stated that he wanted to cross examine the complainant and wanted to lead evidence in defence. Accordingly, the Ld. Trial Court by order dated 20.05.2017 granted an opportunity to the appellant to cross- examine the complainant CW-1. Trial Court record reveals that despite grant of multiple opportunities, the appellant failed to cross examine the complainant CW-1 and his right to do so was closed by order dated 27.07.2017. The complaints were thereafter fixed for recording of statement of the appellant under section 313 of the CrPC. Identical statements of the appellant under section 313 of the CrPC were recorded in all the three cases on 17.08.2017. The same reads as under :-
"All the incriminating circumstances appearing in evidence against the accused have been put to him to which has replied that "The cheque in question bears my signatures. I have also filled all the particulars on the cheque in question. I have not received the legal demand notice. The cheque in question was given by me to my friend Mr. Ram Dhani. I know the complainant. The cheque in question was given to the complainant by Mr. Ram Dhani. I have entered into an MOU with the CA No.180/2019, 181/2019 & 182/2019 M/s S.R. Buildtech Vs. Mohd. Jamaluddin Page No.10/15 complainant which is Ex. CW1/A and same bears my signature. I have also made payment to the tune of Rs.6/6.5 lakhs against the cheques given by me. I cannot tell my liability towards the complainant".
15. The appellant further stated that he wanted to lead evidence in defence. Once again, despite grant of several opportunities the appellant did not lead any evidence in defence and his right to do so was closed by order dated 27.08.2019.
16. After considering the evidence on record, the Ld. Trial Court convicted and sentenced the appellant by the impugned orders as recorded above.
17. As evident, the appellant at the stage of framing of notice under section 251 of the CrPC has admitted his signatures on the cheques in question. He stated that he had a liability to the tune of Rs.38,00,000/- towards the complainant and that he had given the cheques to the complainant to compensate him for the losses suffered by the complainant. He stated that the complainant had invested Rs.38,00,000/- in the project. He however stated that he had no personal liability with respect to the cheques in question.
18. Upon the appellant having admitted issuance of the cheques in question, the presumptions under section 139 of the N.I. Act to the effect that the complainant received the same for the discharge of a debt or other liability arose against the appellant. In the cases of APS Forex Services (P) Ltd. v. Shakti International Fashion Linkers1, Rajeshbhai Muljibhai Patel v. State of Gujarat2, 1 (2020) 12 SCC 724 2 (2020) 3 SCC 794 CA No.180/2019, 181/2019 & 182/2019 M/s S.R. Buildtech Vs. Mohd. Jamaluddin Page No.11/15 Shree Daneshwari Traders v. Sanjay Jain 3, Basalingappa v. Mudibasappa4 and Bir Singh v. Mukesh Kumar5 the Hon'ble Supreme Court has been please to reiterate the law in respect to complaints under section 138 of the NI Act as well as the presumptions to be drawn under section 139 thereof. It has been held that: -
Once the accused admits issuance of the cheque bearing his signature, a presumption arises that there exists a legally enforceable debt or liability and that that the holder of the cheque received the same towards discharge, in whole or in part, of a debt or liability. Such presumption is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of Negotiable Instruments The presumption is rebuttable in nature. It is open to the accused to raise a defence wherein the existence of legally enforceable debt or liability can be contested.
It is for the accused to adduce evidence of such facts and circum- stances to rebut the presumption that such debt does not exist or that the cheques are not supported by consideration. Accused may adduce evi- dence to rebut the presumption, but mere denial regarding existence of a debt shall not serve any purpose. The accused is required to lead evi- dence that the entire amount due and payable to the complainant was paid. The presumptions under section 139 of the N.I.Act will live, exist and survive and shall end only when the contrary is proved by the ac- cused.
19. In the present cases, the appellant not only admitted issuance of the cheques in question but he also admitted that the same had been issued towards discharge of an existing liability of Rs.38,00,000/- which he head towards the complainant. The only exception was that whereas the complainant contended that
3 (2019) 16 SCC 83 4 (2019) 5 SCC 418 5 (2019) 4 SCC 197 CA No.180/2019, 181/2019 & 182/2019 M/s S.R. Buildtech Vs. Mohd. Jamaluddin Page No.12/15 the liability was Rs.44,50,000/-, the appellant stated that the same was Rs.38,00,000/-. The appellant not only failed to cross examine the complainant CW1 but also did not lead any evidence in defence. In such circumstances the Ld. Trial Court has rightly held that the appellant had been unable to dislodge the presumptions drawn against him under section 139 of the NI Act.
20. It had been submitted by the Ld. Counsel for the appellant that the cheques were given only as security and that the MOU recorded that the appellant had agreed to make payment of Rs.46,00,000/- to the complainant on purely humanitarian considerations. He had also submitted that the MOU recorded that the complainant would not be entitled to file any suit, complaint for the recovery of the said amount. The submissions made by the Ld. Counsel for the complainant in the appeal are of no consequence as the appellant was obliged to rebut the presumptions drawn against him under section 139 of the NI Act by leading appropriate evidence. The appellant not only failed to cross examine the complainant but also did not lead evidence in defence. In the absence of the same, these oral submissions made at the stage of appeal cannot be considered. At the same time, it is also to be seen that the appellant, in response to court questions at the stage of framing notice under section 251 of the CrPC, not only admitted his liability of Rs.38,00,000/- towards the complainant but also that he had issued the cheques in question in discharge of the same. The appellant had no defence.
21. As far as the terms of the MOU are concerned, it records a liability of Rs.46,00,000/- of the appellant towards the complainant out of which Rs.1,50,000/- was paid at the time of execution of MOU and the balance amount of Rs. 44,50,000/- was payable within one year with a grace of six months. The CA No.180/2019, 181/2019 & 182/2019 M/s S.R. Buildtech Vs. Mohd. Jamaluddin Page No.13/15 details of the three postdated cheques in question are mentioned with the cheque numbers, dates and amounts and it is recorded that the cheques were handed over as security. Any document/agreement needs to be considered as a whole and not in parts. The fact that the three postdated cheques with all particulars filled by the appellant were handed over to the complainant as security at the time of the execution of MOU corresponding to the outstanding liability of Rs.44,50,000/- outstanding as on that day i.e. 07.07.2014 would lead to only one inference that these cheques would be presented for payment in case the appellant failed to make payments of the outstanding amounts in terms of the said MOU.
22. In the case of Sampelly Satyanarayana Rao v. Indian Renewable Energy Development Agency Ltd. reported in (2016) 10 SCC 458, the Hon'ble Supreme Court with respect to cheques given as security was pleased to hold that the crucial question to determine applicability of Section 138 of the Act is whether the cheque represents discharge of existing enforceable debt or liability or whether it represents advance payment without there being subsisting debt or liability. In the case of Don Ayengia v. State of Assam reported in (2016) 3 SCC 1, the Hon'ble Supreme Court in similar circumstances was pleased to hold that if non-payment of the agreed debt/liability within the time specified also did not entitle the holder to present the cheques for payment, the issuance and delivery of any such cheques would be meaningless and futile, if not absurd.
23. In the present case, all the three cheques were handed over by the appellant to the complainant on the date of the execution of the MOU i.e. 07.07.2014. The MOU itself records an outstanding liability of Rs.44,50,000/- of the appellant towards the complainant. The total amount of the three cheques in CA No.180/2019, 181/2019 & 182/2019 M/s S.R. Buildtech Vs. Mohd. Jamaluddin Page No.14/15 question comes to Rs.44,50,000/- which is the recorded outstanding liability as on the date of handing over of the cheques. The appellant in his defence plea recorded at the stage of framing of notice under section 251 CrPC admitted having issued the cheques in discharge of an existing liability qua the complainant. In these facts and circumstances the cheques in question represented discharge of existing enforceable debt of the appellant towards the complainant. Thus in terms of the ratio laid down in the cases of Sampelly Satyanarayana Rao v. Indian Renewable Energy Development Agency Ltd. and Don Ayengia v. State of Assam, the complaints of the complainant on the basis of the cheques in question were maintainable.
24. For the reasons recorded above, these appeals have no merit and are dismissed. File be consigned to record room. Trial court record be sent back along with a copy of this order.
(Reetesh Singh)
ASJ-2/KKD/East/03.08.2021
Announced in open
court on 03.08.2021
Digitally signed
by REETESH
SINGH
REETESH Location:
SINGH Karkardooma
Court
Date: 2021.08.04
14:02:51 +0530
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