Delhi District Court
Kumar Exports vs M/S Sharma Carpets 2009 (1) Civil Court on 21 March, 2012
IN THE COURT OF MS. CHARU GUPTA, MM (NI ACT)01
SOUTHEAST DISTT. SAKET COURTS, NEW DELHI
Sh Nanhey Khan,
S/o Shri Ahmed Hussain,
R/o D41, Jaitpur Extension,
PartII, New Delhi . . ........ Complainant
Vs
Sh Kaliyan,
S/o Shri R. Mugam,
R/o H. No. 418, C5, Bhelaswa Dairy,
J J Colony, Delhi . . .......... Accused
C C No. : 2400/10 (Old C C No. 360/07)
OFFENCE COMPLAINED OF :U/s 138 Negotiable Instruments
Act
PLEA OF ACCUSED : Not Guilty.
DATE OF INSTITUTION : 13.02.2007
DATE OF RESERVING ORDER : 29.02.2012
FINAL ORDER : Conviction
DATE OF ORDER : 21.03.2012
Judgment
Brief reasons for judgment :
Brief facts of the case:
1.The present is a complaint filed under section 138 Negotiable Instrument Act, 1881 ( hereinafter referred to as 'the Act') by the CC No. 2400/10 (Old CC No. 360/07) page no. 1/14 complainant against the accused for dishonour of a cheque bearing no. 547083 for insufficiency of funds. The brief facts averred by the complainant are that the accused took a friendly loan of Rs.200,000/ in moth of September 2006, from the complainant with assurance to return the same in installments in the month of October 2006 and December 2006. It is averred that to discharge the legal liability towards this friendly loan, the accused issued two cheques bearing no.s 547083 (impugned cheque) dated 03.10.2006 drawn on State Bank of India for a sum of Rs. 1,00,000/ and another cheque bearing no. 547084 dated 09.12.2006, drawn on State of India for a sum of Rs. 1,00,000/.
2. It is averred that on presentation, cheque bearing no. 547983 which is the subject matter of present complaint, was returned unpaid with remarks "funds insufficient" vide cheque return memo dated 15.12.2006. Notice of dishounour of cheque was received from the bank by the complainant on 18.12.2006. A legal demand notice dated 15.01.2007 was sent to the accused vide registered AD / UPC which was duly served upon the accused. It is averred that despite the receipt of the legal demand notice, the accused failed to pay the cheque amount and thereby committed an offence under section 138 of the Act. It is averred that the complaint is filed within the limitation CC No. 2400/10 (Old CC No. 360/07) page no. 2/14 period.
Proceedings before the Court:
3. On the aforesaid facts, the court took cognizance of the offence under section 138 of the Act and summoned the accused vide its order dated 13.02.2007. Accused appeared pursuant to service of summons and was admitted to bail. Vide order dated 11.03.2008, notice under section 251 Cr.P.C. for commission of offence under section 138 of the Act, was framed and served upon the accused.
The accused pleaded not guilty and claimed trial. His plea of defence was also recorded.
4. Complainant led his evidence by way of affidavit, reiterating the facts averred by him in his complaint and got himself examined as CW1. Evidence by way of affidavit is Ex CW1/I. He relied upon the impugned cheque as Ex CW1/A, cheque return memo as Ex CW1/B, legal demand notice as Ex CW1/C, postal receipt, UPC and AD card and returned envelope as Ex CW1/D, E, F & G respectively. Complaint is Ex CW1/H. CW1 was duly cross examined by the defence counsel.
5. Thereafter, statement of accused was recorded under section 313 Cr.P.C. where in all the incriminating evidence along with exhibited documents were put to the accused. The stand of the accused was of CC No. 2400/10 (Old CC No. 360/07) page no. 3/14 general denial. The accused denied issuance of cheque to the complainant. He denied his signature on the impugned cheque. He denied any acquaintance with the complainant. He stated that he was unaware as to how the impugned cheque came in possession of complainant. He stated that he lost the impugned cheque in year 2004. He did not remember the date or month when the cheque was lost. He stated that he had lodged a complaint in respect of the impugned lost cheque. He also stated that one Mr Raju who had befriended him must have given his cheque to the complainant. He expressed his willingness to lead defence evidence.
6. Accused examined Smt Ranjdum, his wife as DW1 and Sh Rajender as DW2. DW1 and DW2 were duly cross examined by counsel for complainant. Head Constable Gajender Singh, Police Station Samaypur Badali was summoned as court witness to prove the genuiness of Ex DW1/1. HC Ganjender Singh was duly cross examined by counsel for accused. Thereafter, counsel for accused moved an application under section 311 Cr.P.C. for calling a report from Reader of SHO, PS Samaypur Badali for verifying if any compliant had been filed by the accused on 03.02.2004 or 03.02.2007. Before the Reader of SHO, could be examined, counsel for accused sought to close his defence evidence. After the defence evidence CC No. 2400/10 (Old CC No. 360/07) page no. 4/14 was closed, matter was posted for final arguments.
7. I have heard counsels for both the parties and thoroughly considered the material on record.
Appreciation of Evidence:
8. I have carefully perused the material on record and considered the rival contentions of both the counsels in the light of law. At the outset, to make out an offence u/s 138 of the Act against the accused, all the following ingredients are required to be proved : (I) There is legally enforceable liability / debt. (II) The drawer of the cheques issued the cheques to satisfy part or whole of the debt or other liability.
(III) The cheques so issued has been returned due to insufficiency of funds.
(IV) Payment not made by the accused despite service of the valid legal demand notice.
9. Before further adverting to the facts of the case, it is convenient for the sake of clarity to reproduce section 118 (a) and 139 of the Negotiable Instrument Act, Section 118 (a) read as:
"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 CC No. 2400/10 (Old CC No. 360/07) page no. 5/14 for consideration."
and section 139 reads as under:
"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, or any debt or other liability."
As per section 118 (a) of the Act, there is presumption in favour of complainant that the instrument i.e. cheque in dispute is issued for a consideration and further under section 139 of the Act it shall be presumed, unless the contrary is proved that the holder of the cheque received the cheque for discharge, in whole or in part, or any debt or other liability. The presumption raised under Section 118 and 139, however, is rebuttable. Discussing the standard of proof, Hon'ble Supreme Court observed in M/S Kumar Exports V/s M/S Sharma Carpets 2009 (1) Civil Court Cases 778 (Supreme Court).
"To rebut the statutory presumption an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove CC No. 2400/10 (Old CC No. 360/07) page no. 6/14 that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not insist in every case that the accused should disprove the nonexistence of consideration and debt by leading direct evidence because the existence of negative is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of accused."
For the purpose of appreciating the rival contentions of both the parties, it is necessary to examine the existence of legally enforceable debt or liability in light of the decision of Hon'ble Supreme Court in Rangappa Vs Sri Mohan 2010 AIAR Cri 584 (SC) wherein the court while upholding the decision and observation of the Hon'ble High Court held that :
" once the cheque relates to the account of the accused and he accepts and admits the signatures on the said cheques, then initial presumption as contemplated under section 139 of the Act has to be raised by the court in favour of the complainant. The presumption referred to in section 139 of the Act is a mandatory presumption and not a general presumption, but the accused is entitled to rebut the said presumption. What is required to be established by the accused in order to rebut the presumption is different from each case under given circumstances. But the facts remains that mere plausible explanation CC No. 2400/10 (Old CC No. 360/07) page no. 7/14 is not expected from the accused and it must be more than a plausible explanation by way of rebuttal evidence. In other words, the defence raised by way of rebuttal evidence must be probable and capable of being accepted by the court..."
The Apex Court categorically ruled that the presumption mandated by section 139 of the Act does indeed include the existence of a legally enforceable debt or liability.
10. It is the case of complainant that he advanced a friendly loan of Rs. 2,00,000/ to the accused and in discharge of liability of repayment of the same, he issued two cheques for a sum of Rs.1,00,000/ each. It is his case that on presentation, cheque bearing no.547083 ( impugned cheque), was returned unpaid with remarks 'funds insufficient' and despite service of legal demand notice, no payment was made.
11. The complainant through his complaint, affidavit, dishonoured cheque, return memo and legal demand notice has created a factual basis to raise the dual presumptions of law against the accused i.e. presumption as to issuance of cheque for discharge of legally enforceable debt or liability as also presumption as to existence of legal liability / debt, as such.
12. To the case of complainant, it is the defence of the accused that he CC No. 2400/10 (Old CC No. 360/07) page no. 8/14 never issued the impugned cheque to the complainant. It is his defence that he had lost the impugned cheque in the year 2004 and also got a report of the lost cheque lodged. It is also his defence that one Mr. Raju who had befriended him must have given this impugned cheque to the complainant.
13. In order to rebut the presumption under law and prove his innocence, the defence counsel cross examined CW1, complainant. Accused also examined his wife Ranjdum as DW1 and relied upon documents Ex DW1/1, DW1/2 and DW1/A. Ex DW1/1 is a police report pertaining to loss of cheque book. Ex DW1/2 is a complaint pertaining false acquisition and Ex DW1/A is a complaint against false acquisition and death threat.
14. During his cross examination, CW1 stated that he came to know the accused through one Raju. He admitted that the accused had issued two cheques for month of October & November 2006. He stated that the impugned cheque was filled up in all respects along with date, his name, amount in words and figures, and the accused signed the same in his presence. He stated that both the cheques including the impugned cheque were handed over by the accused at the time of taking loan. CW1, further, stated that he arranged Rs.2,00,000/ by selling his property situated at Jaitpur, Extn. Part II. CW1 could not CC No. 2400/10 (Old CC No. 360/07) page no. 9/14 answer the status of his another connected matter pending before Patiala House Court, in respect of another cheque of Rs.1,00,000/ allegedly issued to him by the accused. CW1 not only denied that the cheques were stolen from the accused by Raju but also denied his knowledge about complaints lodged in respect of lost cheque, false implication and death threat i.e. Ex DW1/1, Ex DW1/A and Ex DW1/2 respectively. He denied that impugned cheque had been misused or that he was not known to the accused or that the cheque was not signed in his presence. He denied deposing falsely.
15. To further strengthen his defence, the accused examined his wife, Ranjdum as DW1. DW1 deposed that in 2004, one Raju, who was friend of her husband had stolen one of the cheques of her husband and FIR against the same was got lodged in Rohini Police Station. She testified that Raju must have handed over the cheque to the complainant who has misused the same.
16. Sh Rajender was examined as DW2. DW2 deposed that in 2004, accused had stated to him that his cheque for an amount of Rs. 1,00,000/ had been stolen. He further testified that the accused was aware that his cheque had been stolen by Raju and got an FIR lodged regarding the same.
17. As the court observed an overwriting on the date and signatures of CC No. 2400/10 (Old CC No. 360/07) page no. 10/14 the receiving officer on the stamp of Police Station Samaypur Badali over Ex DW1/1, Gajender Singh, Head Constable, Belt No.3019/OD, PS Samaypur Badali was summoned and examined. This witness could not locate any DD entry in the Roznamcha of PS Samaypur Badali for dates 03.02.2004 or 03.02.2007 in respect of any complaint Ex DW1/1 in name of the accused.
18. To counter the defence of the accused, counsel for complainant cross examined DW1, DW2 and HC Gajender Singh of Police Station Samaypur Badali. Perusal of cross examination of DW1 & DW2, reveal stark contradictions and conflicting versions in the defence sought to be raised by the accused and the depositions of defence witnesses DW1 & DW2, during their cross examination. One such material contradiction lies in the testimony of DW1, Ranjdum, wife of the accused, who deposed that in 2004, Raju stole "one of the cheques" of her husband. She further admitted in her cross examination that in 2004, she got to know that " a cheque" was missing from the cheque book of her husband. To the contrary, Ex DW1/1, as relied upon by the accused ( though not formally proved ), is a complaint regarding loss of "cheque book" wherein the accused, without mentioning the particulars of series of cheques or cheque book number, asserts that he had lost one of his cheque book issued CC No. 2400/10 (Old CC No. 360/07) page no. 11/14 by State Bank of India, and since he was in habit of keeping all his cheques signed, there is an apprehension that the same may be misused. Strangely, no such intimation was ever given by accused to his banker. Also, despite the fact that as per testimony of DW2, Rajender, accused was aware that his cheque for an amount of Rs. 1,00,000/, has been stolen by one Raju, he never mentioned the same in Ex DW1/1 nor there is anything on record to show that an FIR was lodged for theft of any cheque or any legal action was pursued by the accused against Raju.
19. Testimony of DW1 and DW2, apart from the contradictions and discrepancies, cannot be relied with confidence by court as both the witnesses deposed nothing independent from their knowledge but deposed as instructed and informed by the accused. As such, both DW1 and DW2 appear to be interested witnesses. Further, in his explanation to incriminating evidence, recorded under section 313 Cr.P.C., the accused categorically denied even his signature on impugned cheque Ex CW1/A while as per Ex DW1/1, as relied upon by him, he had lost a cheque book containing all the cheques already signed. Also, such defence of forged signature is no where taken by him either during cross examination of CW1 or through his witnesses DW1 and DW2. Reliance upon Ex DW1/1 therefore has turned self CC No. 2400/10 (Old CC No. 360/07) page no. 12/14 destructive to his plea. Ex DW1/A and Ex DW1/2 do not prove or disprove anything and are unconnected with the plea of defence raised by the accused.
20. The varied defences, taken by the accused at different stages through different evidences raise doubt as to its credibility. As such, no plausible defence has been raised by the accused and the presumptions raised against him have not been successfully rebutted. Accordingly, ingredient no. I & II stand decided against the accused. Ingredient No. III
21. As regards ingredient no. III, the cheque must have been return unpaid for insufficiency of funds. Return of cheque for "Insufficient Funds" is duly established from the cheque return memo Ex. CW1/B. Further section 146 of the Act raises a rebuttable presumption of dishonour of cheque, on production of bank's slip and memo having thereon the official mark denoting that the cheque has been dishonoured. The accused has neither denied the fact of dishonour of cheque for insufficiency of funds nor has led any sufficient evidence to rebut this presumption. As such, ingredient no. III stands proved against the accused.
Ingredient No.IV
22. Service of legal demand notice upon the accused is a precondition to CC No. 2400/10 (Old CC No. 360/07) page no. 13/14 the completion of offence u/s 138 of the Act. Complainant seeks to prove due service of legal notice Ex CW1/C vide postal receipt Ex CW1/D, UPC Ex CW1/E, AD card Ex CW1/F and returned envelope Ex CW1/G. The accused has not denied receipt of legal notice. As such, legal notice is deemed to have been duly served upon the accused, despite which he did not pay the cheque amount. Accordingly, ingredient no. IV stands proved against the accused. Final Order
23. From the material on record, it stands established that the cheque was issued by the accused, the same was returned dishonoured for the reason "Funds Insufficient", legal notice was served upon the accused despite which no payment was made. Accused has failed to rebut his liability under section 138 of the Act even on preponderance of probabilities. Accordingly, the complainant has proved his case beyond reasonable doubt. As such, the accused is convicted for the offence under section 138 of the Negotiable Instrument Act.
Announced in the open court (CHARU GUPTA) 21.03.2012 MM1(N I Act):SE Distt: 21.03.2012 CC No. 2400/10 (Old CC No. 360/07) page no. 14/14