Delhi District Court
Harphool Singh vs . Faheem Ahmad on 18 February, 2020
IN THE COURT OF MS. APOORVA RANA
METROPOLITAN MAGISTRATE (SOUTH) 01,
N.I. ACT, SAKET COURTS : NEW DELHI
CC No. 3948/2017
Harphool Singh Vs. Faheem Ahmad
1.Complaint Case number : CC No. 3948/2017 2 Name of the complainant : Harphool Singh, S/o Sh. Mangat Ram, R/o 2003/A, Gali No.24, IBlock, Sangam Vihar, New Delhi.
3. Name and address of the : Faheem Ahmad, accused S/o Mr. Shamim Ahmad, R/o Village Mirzapur Bela, P.O. & TehsilChandpur, Bijnor, Uttar Pradesh.
4. Offence complained of or : Under Section 138 of the proved Negotiable Instruments Act, 1881.
5. Plea of the accused : Pleaded not guilty and claimed trail.
6. Final Order : Conviction CC No. 3948/2017 Harphool Singh Vs. Faheem Ahmad Page 1 to 23
7. Date of Institution : 15.04.2017
8. Date of Reserving the : 16.01.2020 Judgment
9. Date of pronouncement : 18.02.2020 Judgment:
1. The facts giving rise to the present complaint are that one Mr. Mohsin had purchased a piece of land at Mirzapur Bela, Bijnor, UP from the complainant. It is further case of the complainant that against part payment of consideration for the said sale, the accused, who is the real brother of Mr. Mohsin, issued two cheques bearing number 000023 dated
10.01.2017 for Rs.50,000/ and 000022 dated 05.02.2017 for Rs.50,000/, both drawn on bank account maintained with Bank of Baroda, Chandpur, Bijnor, Uttar Pradesh (hereinafter referred to as the 'cheque in question') in favour of the complainant. That cheques in question were returned unpaid upon presentation on account of "payment stopped by drawer" vide return memos dated 03.03.2017 and 09.03.2017. The accused refused to pay the cheque amount CC No. 3948/2017 Harphool Singh Vs. Faheem Ahmad Page 2 to 23 despite the fact of dishonor of cheque having been brought to the notice of the accused by the complainant. Further, legal demand notice dated 17.03.2017 was duly sent by complainant to the accused in this regard, but to no avail. The complainant has stated that accused failed to pay the cheque amount within the statutory period. Hence, the present complaint under Section 138 of Negotiable Instruments Act, 1881 (hereinafter referred to as 'NI Act').
2. Upon service of summons, accused entered an appearance in the present matter for the first time through counsel on 17.11.2017 and in person on 03.05.2018 and was admitted to bail. Notice under Section 251 Cr.P.C. was served upon accused on 03.05.2018, to which the accused pleaded not guilty and claimed trial. In his statement of defence, accused stated that the accused had never issued the cheques in question to the complainant and that the same were lost by him. He further stated that he had even given instructions to his banker in this regard in the year 2017. In addition to this, he has also stated that his brother Mohsin had entered into an agreement for purchase of property with the complainant and Mohsin had paid the entire sale CC No. 3948/2017 Harphool Singh Vs. Faheem Ahmad Page 3 to 23 consideration to the complainant. The accused also admitted his signatures on the cheque in question and other details as well, except the name of the payee. Thereafter, accused was allowed to crossexamine the complainant under section 145 (2) NI Act. After cross examination of the complainant, matter was fixed for recording statement of the accused under Section 313 Cr.P.C. In the said statement recorded on 30.01.2019, the accused while reiterating the defence taken at the time of framing of notice stated that he got to know about the lost cheques when his account was debited for an amount of Rs.40,000/ when the complainant had presented one of his cheques. He also stated that it was thereafter that he issued stop payment instructions qua the remaining cheques to the bank immediately. Matter was thereafter fixed for defence evidence. Defence evidence was closed on 19.07.2019 and the matter was fixed for final arguments.
Evidence
3. In order to support his case, complainant stepped into the witness box as CW1 and tendered his affidavit Ex.CW1/A into evidence, wherein, averments made in the complaint were reiterated. He also relied upon various CC No. 3948/2017 Harphool Singh Vs. Faheem Ahmad Page 4 to 23 documents such as Ex.CW1/1 & Ex.CW1/2 which are cheques in question, Ex.CW1/3 & Ex.CW1/4 which are cheque return memo, Ex.CW1/5 which is legal notice dated 17.03.2017, Ex.CW1/6 which is postal receipt, Ex.CW1/7 which is tracking report and Mark A which is photocopy of sale deed dated 22.12.2016.
4. Accused, on the other hand, examined himself as witness in his defence as DW1. DW2 was one Kamal Kumar, Special Assistant, Bank of Baroda, Chandpur Branch. No other witness was examined by the accused.
Arguments
5. Ld. counsel for the complainant has argued that all the requirements of Section 138 NI Act have been met with in the present case, and hence, the accused be convicted. On the other hand, it has been argued on behalf of the accused that the complainant has not been able to prove his case beyond reasonable doubt and that no loan was taken by the accused from the complainant. I have heard the ld. counsels for the parties and have perused the record carefully.
CC No. 3948/2017Harphool Singh Vs. Faheem Ahmad Page 5 to 23 Points for determination and reasons for decision
6. For an offence under Section 138 of NI Act to be made out against the accused, the complainant must prove the following points:
(i) The accused issued a cheque on account maintained by him with a bank.
(ii) The said cheque has been issued in discharge, in whole or in part, of any legal debt or other liability.
(iii) The said cheque has been presented to the bank within a period of 3 months from the date of cheque or within the period of its validity.
(iv) The aforesaid cheque, when presented for encashment, was returned unpaid/dishonored.
(v) The payee of the cheque issued a legal notice of demand to the drawer within 30 days from the receipt of information by him from the bank regarding the return of cheque.
(vi) The drawer of the cheque failed to make the payment within 15 days from the receipt of above mentioned legal notice of demand.
7. Thus, on the basis of the evidence adduced, the points CC No. 3948/2017 Harphool Singh Vs. Faheem Ahmad Page 6 to 23 that warrant determination are as follows:
Whether the accused issued the cheque in question to the complainant for discharge, in whole or in part, of any debt or other liability?
8. It is a well settled principle of criminal jurisprudence that a criminal trial proceeds on the presumption of innocence of the accused i.e. an accused is presumed to be innocent unless proven guilty. Thus, normally the initial burden to prove is on the complainant/prosecution to prove the guilt of the accused. Also, the standard of proof required is that of "beyond reasonable doubt". However, in offences under Section 138 NI Act, there is reverse onus clause contained in Sections 118 and 139 of the Act. Thus, the primary burden of proof in order to prove the issuance of the cheque lies upon the complainant, and the same has to be proved beyond reasonable doubt, unless the accused admits the same.
Further, the explanation to Section 138 of the Negotiable Instruments Act, 1881 states that for the purpose of this Section, "debt or other liability" means a legally enforceable debt or other liability.
CC No. 3948/2017Harphool Singh Vs. Faheem Ahmad Page 7 to 23 However, once the issuance of cheque is established, either by admission or by positive evidence, the presumption under Section 139 of the Negotiable Instruments Act, 1881 arises. Section 139 of the Negotiable Instruments Act, 1881 states that 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. Therefore, here the onus shifts upon the accused to prove the nonexistence of debt or other liability. Section 139 of the Negotiable Instruments Act, 1881 uses the word "shall presume", and the meaning of the word "shall presume" in Section 4 of the Evidence Act, shows that the presumption under Section 139 is rebuttable.
Furthermore, the standard of proof required to rebut the presumption under Section 139 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 other liability, the onus shifts back to the complainant to prove by way of evidence, beyond reasonable doubt, that the cheque in question was issued by the accused in discharge, whole or in part, of any debt or other liability, and now the presumptions under Section 118
(a) and Section 139 will not come to the rescue of the CC No. 3948/2017 Harphool Singh Vs. Faheem Ahmad Page 8 to 23 complainant. [Bharat Barrel & Drum Manufacture Co. Vs. Amin Chand Pyarelal (1999) 3 SCC 3S and M.S. Narayan Menon Vs. State of Kerala (2006) 6 SCC 39 relied upon].
Mode of Proof: The accused may adduce direct evidence to prove 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 prove the nonexistence of the consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that a bare denial of passing of consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable, has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances (including presumption under Section 114 Evidence Act), upon the consideration of which, the Court may either believe that the consideration and debt did not exist, or their nonexistence was so probable that a prudent man would, under circumstances of the case, act upon the plea that they did not exist. [Kishan Rao Vs. Shankaguda, CC No. 3948/2017 Harphool Singh Vs. Faheem Ahmad Page 9 to 23 2018 (8) SCC 165, Mosaraf Hossain Khan Vs. Bhageeratha Engg. Ltd. & Ors (2006) 3 SCC 658, Goa Plast (P) Ltd. Vs. Chico Ursula D Souza (2004) 2 SCC 235, Monaben Ketanbhai Shah Vs. State of Gujarat (2004) 7 SCC 15, Prem Chand Vijay Kumar Vs. Yashpal Singh (2005) 4 SCC 417, DCM Financial Services Vs. J N Sareen (AIR 2008 SC 2255), K. Bhaskaran Vs. Shankaran Vaidhyan Balan (1999) 7 SCC 510 relied upon].
9. Averting to the facts of the present case, the accused has stated in his substance of accusation u/s 251 Cr.P.C. that the accused had never issued the cheques in question to the complainant and that the same were lost by him. He further stated that he had even given instructions to his banker in this regard in the year 2017. In addition to this, he has also stated that his brother Mohsin had entered into an agreement for purchase of property with the complainant and Mohsin had paid the entire sale consideration to the complainant. The accused also admitted his signatures on the cheque in question and other details as well, except the name of the payee. Further, the accused while reiterating the defence taken at the time of framing of notice stated that he got to know about the lost cheques when his account was debited CC No. 3948/2017 Harphool Singh Vs. Faheem Ahmad Page 10 to 23 for an amount of Rs.40,000/ when the complainant had presented one of his cheques. He also stated that it was thereafter that he issued stop payment instructions qua the remaining cheques to the bank immediately. The accused has also deposed on similar terms when he appeared as DW1. However, this defence of the accused does not inspire confidence because of the following reasons:
(a). It is an undisputed fact that Mohsin, the brother of the accused, had entered into an agreement for sale of land with the complainant and the said fact has been admitted by the accused as well in his defence to substance of accusation u/s 251 Cr.P.C. However, he has stated that Mohsin had paid the entire sale consideration to the complainant and there was no liability whatsoever to be discharged to the complainant.
However, no proof regarding the said payment has been placed on record by the accused.
(b). It is the defence of the accused that the cheque in question alongwith other cheques had been lost and it was thereafter, that he had issued instructions to his banker immediately after one cheque of accused bearing no.000024 was encashed by the complainant. However, Mark DW1/3 reveals that the said cheque was encashed on 26.12.2016 while the accused gave application for "stop payment CC No. 3948/2017 Harphool Singh Vs. Faheem Ahmad Page 11 to 23 instruction" to the bank after a gap of 6 days on 02.01.2016, which was clearly not "immediately" after encashment of the above mentioned cheque. Thus, there is a probability that the said action of the accused of giving stop payment instructions to his banker was in fact an afterthought and an act of deliberation aimed at avoiding payment.
(c). The accused failed to file any complaint at the police station regarding the fact that the cheques in question alongwith two other cheques, had been lost. In fact, as regards cheque bearing no. 000024, the accused has neither stated whether the said cheque was lost nor has he disclosed as to why the same was encashed by the complainant. Even if it is to be believed that this cheque as well had been lost, no such police complaint qua this cheque was registered by the accused against the complainant when he had encashed the same.
(d). Furthermore, the accused has stated in his examination that he did not know when the cheques in question were lost and it was only when the cheque bearing no.000024 was encashed, that he got to know the same. However, in his application for issuing instructions to bank for stop payment, the accused has stated that the cheques in question were lost as he had dropped them somewhere, CC No. 3948/2017 Harphool Singh Vs. Faheem Ahmad Page 12 to 23 though he did not state, when he had lost the same.
(e). Next, the accused has admitted the fact of transaction between Mohsin and the complainant, thus, implying that he had knowledge about the same. He even seems to know the fact that Mohsin had paid the entire sale consideration to the complainant. However, during his examination in chief, the accused has stated that he did not have cordial relations with his brother since a long time and also stated on an earlier occasion that the complainant has filed the present complaint in collusion with Mohsin. This statement of the accused appears strange as it is odd that one who does not have cordial relations with another, would keep himself aware of such details about that other person. In fact, the name of Mohsin was included even in the list of witnesses of the accused, though he was not examined by him in his defence.
(f). Furthermore, during his defence to substance of accusation u/s 251 Cr.P.C., the accused admitted to having knowledge regarding the sale agreement between his brother Mohsin and the complainant, however, during his testimony as DW1, he deposed that he did not know anything about the said sale of land by the complainant to his brother. This clearly seems to be an attempt by the accused at improving CC No. 3948/2017 Harphool Singh Vs. Faheem Ahmad Page 13 to 23 his defence.
(g). The admission of the accused regarding issuance of cheque bearing no. 002538 dated 06.01.2016 for Rs.1,19,000/ to the complainant on behalf of his father, on an earlier occasion, in connection with purchase of certain property from the complainant, further gives strength to the version of the complainant as it gives rise to a probability that he would have issued a cheque on behalf of his brother as well.
(h). It is the admitted case of the accused that the cheque in question was signed by him and other details, except payee name, were also filled up by him. It is beyond contemplation as to why the accused would keep with him duly filled and signed cheques with him when he has no liability as such to discharge. Further, the said fact has not even been explained by the accused anywhere.
(i). Also, the accused admitted that the complainant resided in Delhi and failed to explain as to how the lost cheques came in the possession of complainant. The accused has not even mentioned the place he had dropped/lost his cheques.
(j). One defence taken by the accused is that the sale agreement Mark A does not mention the fact of tendering of CC No. 3948/2017 Harphool Singh Vs. Faheem Ahmad Page 14 to 23 PDCs by the accused in furtherance of part payment of sale consideration. However, the same is not relevant specially in view of the fact that the defence of the accused that his brother Mohsin had made the entire payment to the complainant in this regard, has also not been documented in the said agreement Mark A. In fact, the burden of proof of proving the factum of payment by his brother lay upon the accused in terms of Section 103 of Indian Evidence Act, 1872.
(k). Lastly, the accused has not explained whether the cheque bearing no. 000024 was lost or if not lost, how it was misused by the complainant. Even if it is believed that the said cheque was lost, the accused failed to explain as to why he had not filed the case u/s 200 Cr.P.C. against the complainant immediately after the above said cheque was allegedly misused by the complainant and stop payment instructions were issued by him to his banker. It is odd that the accused waited till the service of summons upon him in the present case to file the case u/s 420/468/471 IPC against the complainant at Bijnor. In view of the above, it cannot be discarded that the accused may have filed a false case against the complainant in order to absolve himself of his liability against the complainant or to pressurize the complainant to CC No. 3948/2017 Harphool Singh Vs. Faheem Ahmad Page 15 to 23 withdraw the present complaint as suggested by the counsel of the complainant.
From the above discussion, there appears to be no hitch in concluding that the cheque in question was issued by the accused in discharge of the legal liability of his brother Mohsin, which falls within the term "other liability" in terms of Section 138 NI Act.
10. Last but not the least, the accused even failed to bring to light any discordance in the version of the complainant as to the grant of the said loan to him. The testimony of the complainant went unimpeached. In fact, the accused even admitted the sale transaction between his brother and complainant.
11. Now, as far as the existence of a legal debt is concerned, the same is required to be proved beyond reasonable doubt by the complainant only after the accused rebuts the presumption u/s 139 of the Negotiable Instruments Act, on a scale of preponderance of probabilities. In the present matter, no cogent evidence or glaring loophole has been provided by the accused to raise suspicion in the version of the complainant. Not only that, the defence raised by the CC No. 3948/2017 Harphool Singh Vs. Faheem Ahmad Page 16 to 23 accused has been marred by his incoherent and incompatible averments.
12. Thus, in light of the above discussion, the accused has failed to discharge the burden of rebutting the presumption that lay upon him under S.139 of the NI Act, and therefore, the issuance of cheque by the accused to the complainant as well as existence of a legally enforceable liability, stands duly established.
Whether the cheques were, on presentation, dishonoured due to reasons specified in Section 138 of Negotiable Instruments Act, 1881 ?
13. As per Section 138 of Negotiable Instruments Act, 1881, the cheque must have been returned back as unpaid by the bank 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. But it has been held by the Hon'ble Supreme Court in various cases that "insufficiency of amount standing to credit of account/exceeds arrangement with the bank" is a genus, and CC No. 3948/2017 Harphool Singh Vs. Faheem Ahmad Page 17 to 23 dishonour for reasons such as "account closed/ blocked/ payment stopped/refer to drawer/signatures do not match/image not found" are only species of that genus. In all such cases, it shall be presumed that the amount standing to the credit of the accused's account, was insufficient to honour the cheque, as such results can possibly be brought about by the accused himself. Whether or not the dishonour was brought about by reason of insufficiency of funds is a matter of evidence, and the burden to prove that the remarks/reason for dishonour mentioned in the return memo was not due to paucity of funds, but due to some other valid cause, including absence of any debt or other liability, is upon the accused under Section 139 of the Negotiable Instruments Act. In all such cases, the question whether or not there was a legally recoverable debt or liability for discharge whereof the cheque was issued, would be a matter that the trial Court has to examine, having regard to the evidence adduced before it, and keeping in view the statutory presumption that unless rebutted, the cheque is presumed to have been issued for a valid consideration. The offence is not made out the moment a cheque is returned back as unpaid, but after a legal notice has been issued regarding the same, and the payment has still not been made. The net effect is that all the aforesaid reasons CC No. 3948/2017 Harphool Singh Vs. Faheem Ahmad Page 18 to 23 will fall within the purview of "dishonour" within the meaning of Section 138 of Negotiable Instruments Act [Modi Cement Ltd. Vs. Kuchil Kumar Nandi (1998) 3 SCC 249, NEPC Micon Ltd. Vs. Magma Leasing Ltd. (1999) 4 SCC 253, M/s Laxmi Dyechem Industries Vs. State of Gujarat (2012) 3 SCC 375].
14. In the present case, the return memos Ex.CW1/3 and Ex.CW1/4 have been duly admitted by the accused. The reasons for the return, as per return memo is "payment stopped by drawer", which falls straight within the purview of Section 138 of the NI Act. Hence, it can be safely concluded that the return of the cheques as unpaid was due to reasons specified in Section 138 of the NI Act.
Whether the complainant has made a demand for payment of the amount of money in the cheques, by giving to the drawer, a notice in writing, within 30 days of the receipt of information by him, from the bank, regarding the return of the cheques as unpaid and the accused has failed to make the payment of the said amount of money to the complainant, within 15 days of the receipt of said notice?
CC No. 3948/2017Harphool Singh Vs. Faheem Ahmad Page 19 to 23
15. The Hon'ble Supreme Court of India in C.C. Alvi Haji Vs. Palapetty Mohammad (2007) 6 SCC 555, has held that when the notice is sent by registered post, by correctly addressing the drawer of the cheque, the mandatory requirement of issuance of the notice in terms of clause (b) of proviso to Section 138 of Negotiable Instruments Act, stands complied with, as per the statutory presumptions under Section 27 of the General Clauses Act and Section 114 of the Indian Evidence Act. Any drawer who claims that he did not receive the notice sent by post, can within 15 days of the receipt of summons from the Court in respect of the complaint under Section 138 of Negotiable Instruments Act, 1881, make payment of the cheque amount, and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of the complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of summons from the Court along with copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the General Clauses Act and CC No. 3948/2017 Harphool Singh Vs. Faheem Ahmad Page 20 to 23 Section 114 of the Indian Evidence Act.
Needless to mention, the legal notice must satisfy the requirements of Section 138. The accused must be called upon, by such notice, to pay the amount which was payable under the cheque issued by it. [Central Bank of India Vs. M/s Saxons Farms (AIR 1999 SC 3607), M/s Rahul Builders Vs. M/s Arihant Fertilisers and Chemicals & Anr. (2008) Cr.L 4520 SC relied upon].
In the present case, the complainant has duly proved legal notice Ex.CW1/5 & postal receipt Ex.CW1/6 and has been successful in raising presumption of service in due course under Section 114 of the Indian Evidence Act and Section 27 of the General Clauses Act. Also, it is a settled law that failure on part of the the accused to reply to the statutory notice under section 138 of the NI Act would lead to the inference that there is merit in the complainant's version (see Rangappa vs Sri Mohan, 2010 SC, relied upon in Santosh Mittal vs Sudha Dayal, 2014 Del HC). Though the accused denied the receipt of legal notice, he failed to adduce any evidence to prove the same and the testimony of CW1 also went unimpeached in this regard.
Thus, point number 3 also stands answered in the CC No. 3948/2017 Harphool Singh Vs. Faheem Ahmad Page 21 to 23 affirmative.
Whether the cheques were presented within the period of its validity or within, 3 months from the date on which they were drawn, and the complaint has been made, within a period of one month from the date when the cause of action has arisen under clause (c) of the proviso to Section 138 of Negotiable Instruments Act, 1881?
16. In the present case, both the requirements have been admittedly satisfied. The cheques bear the date 10.01.2017 and 05.02.2017. Now, as per return memos, the same were returned on 03.03.2017 and 09.03.2017, respectively. Further, legal notice was sent on 17.03.2017, and the complaint was filed on 15.04.2017 which is within the period of one month from the date on which cause of action arose under clause (c) of proviso to Section 138 Negotiable Instruments Act, 1881.
Conclusion
17. In view of the above discussion, I am of the considered CC No. 3948/2017 Harphool Singh Vs. Faheem Ahmad Page 22 to 23 opinion that the complainant has established his case by leading cogent evidence and accused has failed to rebut statutory presumptions arising against him. Accused Faheem Ahmad, is hereby convicted for the offence punishable under Section 138 NI Act. Let the convict be heard separately on quantum of sentence. Copy of this judgment be given free of cost to the convict.
Announced in the open Court on 18.02.2020 (Apoorva Rana) Metropolitan Magistrate01 (South), NI Act/Saket/New Delhi/18.02.2020 CC No. 3948/2017 Harphool Singh Vs. Faheem Ahmad Page 23 to 23