Delhi District Court
Page No. 1 To 10 Vikas Bharti vs . Nemi Chand Sharma on 7 February, 2012
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IN THE COURT OF SHRI RAKESH KUMAR RAMPURI,
METROPOLITAN MAGISTRATE (NI ACT) KARKARDOOMA COURTS:
SHAHDARA, DELHI.
JUDGMENT U/S 355 Cr.PC
a. Serial No. of the case : VK122/05
b. Date of the commission of the offence : 25/07/2005
c. Name of the complainant : Vikas Bharti
d. Name of accused person and his parentage: Hemi Chand Sharma,
and residence S/o Late Sh. Y. N. Sharma,
R/o A583, Gali No. 6,
Meet Nagar, Delhi94.
e. Offence complained of : Dishonored of
cheque for
Account closed.
f. Plea of the accused and his examination (if any): Not guilty
Because Cheque in question
was not issued by accused
and cheque in question
does not belong to
account of accused.
g. Final Order : Held not guilty.
Acquitted.
h. Date of such order : 07.02.2012.
i. Brief reasons for decision:
Page No. 1 To 10 Vikas Bharti Vs. Nemi Chand Sharma
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1.For a proper appreciation of the issues pertaining to section 138 of Negotiable Instruments Act, it would be necessary to examine the relevant legal provisions and object and reason for which those provisions were brought into existence. The first amendment inserted chapter XVII of NI Act by Banking Public Financial Institutions and Negotiable Instruments Law (Amendment) Act 1988 comprising section 138 to 143 made for the first time in the legislative history of the country, the issuance of the cheque in discharge of any debt or liability in case that was not honoured by the banker of drawer due to insufficiency of the funds in the account, a penal offence for drawer making him liable to punishment with imprisonment up to two years. (After 2 nd amendment by NI Act 2002 with effect from February 2003) or with fine that may be extended to twice the amount of the cheque or both.
2. Following ingredients have to be proved for constituting an offence u/s 138 of NI Act.
(a) Unpaid cheque must have been drawn from the account of drawer at the time of issuance of cheque in question.
(b) The unpaid cheque in question must have been issued in discharge of a debt or other legally enforceable liability, in whole or in part.
(c) The cheque in question was presented to the bank within a period of 6 months from the date of issuance of cheque or within the period of its validity.
(d) The cheque is returned by the bank of drawer unpaid because of insufficiency of the funds in the account of the accused or it exceeds the amount Page No. 2 To 10 Vikas Bharti Vs. Nemi Chand Sharma 3 arrangement made to be paid from that account by an agreement made with the that bank or cheque is return with endorsement account closed.
(e) The payee or holder in due course of such cheque should have given a written legal demand notice to the drawer of the cheque within 30 days of the receipt of the information by the complainant from the banker of the accused regarding of the return of the cheque unpaid.
(f) The drawer of such cheque should have failed to make a payment of the such amount of the money to the holder of the cheque within 15 days of the receipt of the said legal demand notice.
(g) Any written complaint u/s 138 of NI Act should have been made before Ld. MM concerned within one month from the date on which cause of action raised u/s 138 (c) of NI Act unless condonation of delay has been granted by the court concerned.
3. Unlike cardinal principle of general criminal jurisprudence regarding presumption of innocence of accused till conviction on merit by the competent court of law and burden of proof lie on the prosecution to prove guilt beyond all reasonable doubts, section 118, 139 and 140 of NI Act relieved and rescued the complainant from shouldering the initial onus of proof by providing for legal presumption as to consideration and genuineness in favour of cheque holder.
4. In M/s. Kumar Exports Vs. Sharma Carpets2009(1) R.CR.(Crl) 478, Hon'ble Supreme Court has explained in detail the scope of Section 118 and Section 139 N.I. Act. The relevant observations made therein are as follows: Page No. 3 To 10 Vikas Bharti Vs. Nemi Chand Sharma 4 The use of the phrase "until the contrary is proved" in Section 118 of the Act and use of the words "unless the contrary is proved" in Section 139 of the Act read with definitions of "may presume" and "shall presume" as given in Section 4 of the Evidence Act, make it at once clear that presumptions to be raised under both the provisions are rebuttable. When a presumption is rebuttable, it only points out that the party on whom lies the duty of going forward with evidence, on the fact presumed and when that party has produced evidence fairly and reasonably tending to show that the real fact is not as presumed, the purpose of the presumption is over. The accused in a trial under Section 138 of the Act has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case the nonexistence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumptions 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 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 non existence of 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 bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused.
Page No. 4 To 10 Vikas Bharti Vs. Nemi Chand Sharma 5 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, upon 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 the circumstances of the case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on to the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arising under Sections 118 and 139 of the Act. The accused has also an option to prove the nonexistence of consideration and debt or liability either by letting in evidence or in some clear and exceptional cases, from the case set out by the complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial. Once such rebuttal evidence is adduced and accepted by the court, having regard to all the circumstances of the case and the preponderance of probabilities, the evidential burden shifts back to the complainant and, thereafter, the presumptions under Sections 118 and 139 of the Act will not again come to the complainant's rescue."
5. Thus, it is settled position that the accused has to rebut the Page No. 5 To 10 Vikas Bharti Vs. Nemi Chand Sharma 6 presumption u/s 139 of NI Act, with the standard of proof of the preponderance of probabilities. Thereafter accused may be able to raise a probable defence/plea which creates doubt about the existence of consideration in form of debt or liability legally enforceable by leading direct evidence or even circumstantial ones. Accused may discharge his burden on the basis of materials already brought on the record. In that case burden of proof shift again on the complainant who will be obliged to prove the same as matter of fact. Accordingly presumption of innocence and doctrine of reverse burden introduce by section 139 and proviso to section 138 of NI Act should be delicately balanced.
6. The objects and reason of amending act 2002 were to encourage the culture of use of cheque and enhancing of credibility of Negotiable Instruments in globalized and complex economic activities and order of the 21 Century by providing enhanced punishment in case of dishonouring of the cheque with simplified procedure for the court to deal with such cases expeditiously.
7. Having visited the relevant provision of law, its objects, legal principles, and authorities we may embark to examine the case in hand on the basis of its factual matrix.
8. As per version of complaint, the complainant and accused were having good relations and accused approached the complainant for grant of a loan of Rs. 1,00,000/. It is also submitted by the complainant that complainant was no in position to pay such huge amount. Accordingly Rs. 50,000/ was advanced by the complainant and another remaining amount of Rs. 50,000/ was Page No. 6 To 10 Vikas Bharti Vs. Nemi Chand Sharma 7 paid by the brother of complainant namely Yogender Singh. It is also submitted by the complainant that a loan of Rs. 50,000/ was advanced by the complainant to the accused on 12.08.2003 at the interest rate of 18 % per annum. It is case of complainant that accused paid neither the loan amount nor the interest to the complainant. Accordingly, an agreement Ex. CW1/1 was executed on 04.10.2004 and a cheque Ex. CW1/2 of Rs. 50,000/ was given to the complainant with assurance for seeking some more time for paying loan amount alongwith interest. It is case of complainant that cheque in question was returned unpaid vide cheque return memo Ex. CW1/3, dt. 06.07.2005 with remarks account closed. It is also case of complainant that accused did not pay cheque amount within stipulated time despite service of legal demand notice Ex. CW1/5, dt. 09.07.2005. Hence the present complaint case.
9. On the other hand, the plea of accused is that he had not issued any cheque in question to the complainant and cheque in question does not belong to his account. Accused further contends that he never executed any agreement Ex. CW1/1 and he did not take any loan from the complainant. Accused also stated that he did not know the complainant before receiving of summon of this case. [See the statement of accused u/s 313 Cr.P.C read with 281 Cr.P.C and examination in chief of accused (DW1)].
10. DW2 (Sh. J. S. Nirala, clerk in the Delhi Nagrik Sahkari Bank, Ltd., Yamuna Vihar Branch, Delhi) filed statement of account of accused Ex. DW2/1 bearing number 7553 (SB) in Delhi Nagrik Sahkari Bank, Ltd., Yamuna, New Page No. 7 To 10 Vikas Bharti Vs. Nemi Chand Sharma 8 Delhi. DW2 (Bank witness) further stated that as per bank record the cheque book containing cheque in question had not been issued on 20.10.2008 in saving account of another customer namely Sachin Jain bearing account number 7617. It is also stated by the DW2 (bank witness) that current account number 1270 appearing on cheque in question is that of M/s Madhumita Garments situated at D638, Gali No. 1, Ashok Vihar, Delhi93 of which Arun Bangla is proprietor. During cross examination DW2 stated that it is correct that signature appearing on document Ex. DW2/X (account opening form) is that of some A. K. Maithi.
11. In view of aforesaid testimony of independent bank witness (DW2) and document Ex. DW2/X and statement of current account number 1270 of some Madhumita Garments and statement of account Ex. DW2/1 of saving account number 7553 of accused, it is clear that cheque in question bearing number account number C/A 1270 drawn at the Delhi Nagarik Sahkari Bank, Ltd., Yamuna Vihar, Delhi was not issued to the accused in question.
12. It is important to reiterate the settled legal proposition that dishonoring of cheque u/s 138 of NI Act is hyper technical offence and criminal law containing provision of curtaining liberty and huge economic punishment has to be construed strictly. Section 420 of IPC and section 138 of NI Act are mutually exclusive penal provision and legislative provision has to be interpreted in consistent with legislative intent behind framing the same. The main provision of section 138 of NI Act reads as under:
Where any cheque drawn by a person on an account maintained by Page No. 8 To 10 Vikas Bharti Vs. Nemi Chand Sharma 9 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 provisions 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.
13. Hon'ble High Court of Delhi in Sukant Papers Vs. Om Prakash Jain & Anr. decided on 20.12.2010 observed in para no. 4 which is reproduced herein.
"It is submitted by the counsel for the appellant that Section 138 envisages that at the time of issuance of cheque, the account maintained by the accused should be a 'live' account. The counsel for the appellant argued that that 'the account maintained' only means that the 'account being maintained' on the date of issuance of cheque and if the cheque was issued on a closed account, section 138 would not be attracted. I consider that this interpretation given by the counsel for the appellant of section 138 is not a correct interpretation. In commercial transactions, cheques are exchanged in lieu of liabilities and are frequently given against the purchase of goods etc on the trust that the cheque would be encashed and it was a valid negotiable Page No. 9 To 10 Vikas Bharti Vs. Nemi Chand Sharma 10 instrument. At the time when cheque is given by a person to another, the giver of cheque gives it as a valid negotiable instrument. If the cheque is given against a closed account, the holder of the cheque, to whom the cheque is given cannot be penalized for this dishonesty of the issuer of the cheque and it cannot be said that Section 138 would not be attracted. The words " on an account maintained by him"
cannot be read as "on an account being maintained by him". The word "an account maintained by him" implies that the account was opened by him and for operation of the account of cheque book was issued to him."
14. In view of above discussion of the facts and circumstances of the case and applicable legal provisions and principles this court is of considered opinion that complainant failed to prove the most ingredient of the offence u/s 138 of NI Act i.e. due drawing of cheque in question by accused on an account maintain by him with a banker in discharge of debt or other liability as accused did not even open the account in question. Accordingly, accused stands acquitted.
ANNOUNCED IN THE OPEN COURT (Rakesh Kumar Rampuri)
ON 7th Day of February , 2012 MM, NI Act, (East)
KKD Courts, Delhi.
Page No. 10 To 10 Vikas Bharti Vs. Nemi Chand Sharma