Delhi District Court
CT CASES/624688/2016 on 15 March, 2022
Kalpana Gupta v. Mukesh CC No 624688/2016
IN THE COURT OF MS. TWINKLE CHAWLA: MM, NI ACT-02, SOUTH-
EAST DISTRICT, SAKET COURTS COMPLEX: NEW DELHI
Kalpana Gupta v. Mukesh
CC No. 624688/2016
U/s 138 Negotiable Instruments Act, 1881
1. CIS number : DLSE020060962015
2. Name of the Complainant : Kalpana Gupta through her SPA holder
Sh. Prabhat Kumar Gupta
3. Name of the Accused, : Mukesh, S/o Sh. Bansi Lal, R/o K-1st,
parentage & residential 9/687/7, Sangam Vihar, New Delhi
address
4. Offence complained of or : U/s 138 of Negotiable Instruments Act,
proved 1881
5. Plea of the Accused : Pleaded not guilty and claimed trial
6. Final Judgment/order : ACQUITTED
7. Date of judgment/order : 15.03.2022
JUDGMENT
1. Complainant has filed the present complaint under Section 138 /142 of Negotiable Instruments Act, 1881 ("NI Act") on the averments that, the husband of the Complainant extended a loan of Rs. 3,20,000/- to the Accused on interest in 2013. As repayment of the said loan amount, the Accused is stated to have issued:
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(i) cheque bearing no. 471136 dt. 09.05.2015 drawn on Indian Overseas Bank, R.K. Puram Branch, New Delhi, for an amount of Rs. 1,00,000/-, in favour of the Complainant ("cheque 1");
(ii) cheque bearing no. 471135 dt. 07.05.2015 drawn on Indian Overseas Bank, R.K. Puram Branch, New Delhi, for an amount of Rs. 1,00,000/-, in favour of the Complainant ("cheque 2");
(iii) cheque bearing no. 471134 dt. 05.05.2015 drawn on Indian Overseas Bank, R.K. Puram Branch, New Delhi, for an amount of Rs. 1,20,000/-, in favour of the Complainant ("cheque 3");
(cheque 1, cheque 2 and cheque 3 are collectively hereinafter referred as "cheques in question").
2. However, when the Complainant presented the cheques in question; cheque 3 was returned unpaid on grounds of "funds insufficient"; cheque 1 was returned unpaid due to "instrument outdated" vide memo dt. 11.08.2015 and cheque 2 was returned unpaid on grounds of "payee name mismatch" vide return memo dt. 10.08.2015. The Complainant sent the legal demand notice dated 23.08.2016 through his counsel by speed post at the registered address of the Accused on 24.08.2015. Hence, despite the service of the legal demand notice, the Accused failed to reply to the legal demand notice and make the payment and hence, the Complainant filed the present complaint.
3. After taking pre-summoning evidence, Accused was ordered to be summoned in Page 2 of 19 Kalpana Gupta v. Mukesh CC No 624688/2016 this case for commission of offence under Section 138 of the NI Act, vide order dated 02.11.2015.
4. Accused appeared and was released on bail on 14.07.2016. On finding a prima facie case, notice U/s 251 of the Criminal Procedure Code, 1973 ("CrPC") was served upon the Accused on 02.08.2017 to which he pleaded not guilty and opted to contest after disclosing the following defence:
"I do not plead guilty and claim trial. I had borrowed Rs. 3,20,000/- in installments from Prabhat Gupta (SPA of Complainant). I had repaid the entire amount in monthly installments of Rs. 16,000/- to the SPA of Complainant over a period of three years. I had issued the impugned cheques after only signing and filing the amount and they were given to the SPA of the Complainant. Legal notice was sent to my house but I was out of station at that time."
5. Vide order dated 11.05.2018, opportunity was granted to the Accused to cross examine the Complainant. The SPA holder of the Complainant/CW1 adopted his pre summoning evidence affidavit Ex. CW1/1 and also proved following documents:
Ex. Special Power of Attorney in favour of Sh.
CW1/A: P.K. Gupta
Ex Photocopy of Ikrarnama dt. 01.02.2013
CW1/B:
Ex. Cheques in question issued in favour of the
CW1/C Complainant
(Colly):
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Ex. Photocopy of receipt executed by the
CW1/D: Accused.
Ex. Return memos in respect of the cheques in
CW1/E question
(Colly):
Ex. Legal demand notice dt. 23.08.2015.
CW1/F:
Ex. Postal receipt in respect of the legal demand
CW1/G: notice.
6. Complainant Evidence was closed vide separate statement on 20.12.2018. Thereafter, Accused was examined under Section 313 of CrPC for explaining the circumstances appearing against him in the Complainant's evidence. He denied the Complainant's case and pleaded false implication in the present case and opted to lead evidence in his defence.
7. Accused examined his wife, Ms. Anita Devi as DW1, who supported the version of the Accused.
8. Defence evidence was closed vide separate statement of the Accused on 13.12.2021.
9. I have heard Ld. Counsel for the parties and have perused the case file carefully and meticulously.
Submissions of the Complainant and Accused
10.Complainant has submitted that all ingredients of Section 138 NI Act are fulfilled in the present case and hence, the presumption under Section 139 NI Act arises in the favour of the Complainant, which has not been successfully Page 4 of 19 Kalpana Gupta v. Mukesh CC No 624688/2016 rebutted by the Accused.
11.Per contra, Ld. Counsel for the Accused has submitted that the Accused deserves to be acquitted as there is no privity of contract with the Complainant and that the liability towards the husband of the Complainant has already been discharged. Hence, the presumption under Section 139 NI Act stands rebutted. Legal Framework Ingredients of Section 138 NI Act:
12.The Hon'ble Supreme Court of India in Kusum Ingots & Alloys Ltd and Ors v. K Pennar Peterson Securities Ltd and Ors., (2000) 2 SCC 745 ("Kusum Ingots Case"), has clearly stipulated that "the ingredients which are to be satisfied for making out a case under the provision are:
(i) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account for the discharge of any debt or other liability;
(ii) that cheque has been presented to the bank within a period of six months1 from the date on which it is drawn or within the period of its validity whichever is earlier;
(iii) that cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the account is insufficient to honour 1 Reduced to three months vide RBI circular dated 4.11.2011. Page 5 of 19
Kalpana Gupta v. Mukesh CC No 624688/2016 the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank;
(iv) the payee or the holder in due course of the cheque 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 152 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(v) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice;
If the aforementioned ingredients are satisfied then the person who has drawn the cheque shall be deemed to have committed an offence."
13.Therefore, if the aforesaid ingredients are made out, the Accused is deemed to have committed an offence under Section 138 NI Act.
Presumption under Section 139 NI Act/Section 118 NI Act:
14.Section 139 NI Act states that:
"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 2 The same is now enhanced to 30 days.
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Kalpana Gupta v. Mukesh CC No 624688/2016 part, of any debt or other liability"
15.Section 139 NI Act is a type of reverse onus clause, which stipulates a presumption in the favour of the Complainant as to fact of a cheque being received in discharge of a legal debt or liability.
16.Further, Section 118(a) of the NI Act, states as follows:
"Presumptions as to negotiable instruments. -- Until the contrary is proved, the following presumptions shall be made:
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;"
17.The Hon'ble Supreme Court of India has in a number of judgments dealt with the combined effect of the presumptions raised under Section 139 and Section 118(a) NI Act.
18.The following proposition can be summarized on a perusal of the judgments of the Hon'ble Supreme Court of India in Sunil Todi & Ors v. State of Gujarat, LL 2021 SC 706 ("Sunil Todi Case"); Kalamani Tex v. P. Balasubramanian, 2021 SCC OnLine SC 75; APS Forex Services Pvt. Ltd. v. Shakti International Fashion Linkers and Ors., AIR 2020 SC 945 ("APS Forex Case"); Rohitbhai Jivanlal Patel v. State of Gujarat and Ors., AIR 2019 Page 7 of 19 Kalpana Gupta v. Mukesh CC No 624688/2016 SC 1876; Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513; Basalingappa v. Mudibasappa, (2019) 5 SCC 418; K.N. Beena v. Muniyappan and Anr., (2001) 8 SCC 458; and Dhanvantrai Balwantrai Desai v. State of Maharashtra, 1964 Cri. LJ 437:
(i) Once the execution of cheque is admitted; Section 139 of the NI Act mandates a presumption that the cheque was for the discharge of legally enforceable debt or liability;
(ii) The presumption under Section 139 is a rebuttable presumption and the onus is on the Accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities;
(iii) Something which is probable has to be brought on record by the Accused 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 non-existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist;
(iv) The words "unless the contrary is proved" which occur in Section 139, make it clear that the presumption has to be rebutted by 'proof' and not by a bare explanation which is merely plausible. A fact is said to be Page 8 of 19 Kalpana Gupta v. Mukesh CC No 624688/2016 proved when its existence is directly established or when upon the material before it the Court finds its existence to be so probable that a reasonable man would act on the supposition that it exists. Unless, therefore, the explanation is supported by proof, the presumption created by Section 139 NI Act cannot be said to be rebutted;
(v) To rebut the presumption, it is open for the Accused to rely on evidence led by him or the Accused can also rely on the materials submitted by the Complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely;
(vi) That it is not necessary for the Accused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden.
Analysis
19.In the case at hand, it is not in dispute that the cheques in question were drawn by the Accused from his bank account. Further, it is also not in dispute that the Accused is the signatory of the cheques in question as in the defence disclosed by the Accused U/s 251 CrPC and Section 313 CrPC statement; he has duly admitted the same. Presentation and dishonour of the cheques in question by the Complainant is also not in dispute.
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20.The Complainant sent the legal demand notice, dated 23.08.2015 (Ex. CW1/F) by way of speed post (Ex. CW1/G). However, the Accused has disputed the receipt of the legal demand notice on the ground that he was out of station at the said time. However, it is noted that the address mentioned on the legal demand notice is same as the address mentioned by the Accused on his bail bond furnished to the Court; and the Accused has also appeared in Court pursuant to service of summons at the same address as the one mentioned in the legal demand notice. Accordingly, a presumption of due service is drawn u/s 27 of General Clauses Act which provides that where the notice is sent to the correct address of the recipient, the same shall be presumed to have been duly served. Further, the Hon'ble SC in C.C. Alavi Hazi v. Palapetty Muhammad & Anr, (2007) 6 SCC 555 has held that:
"Any drawer who claims that he did not receive the notice by post, can, within 15 days of receipt of summons from the court in respect of the complaint U/s 138 of the Act, 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 complaint with summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the court along with the copy of complaint U/s 138 of the Act, cannot obviously contend that there was no proper service of notice as required U/s 138, by ignoring statutory presumption to the contrary U/s 27 of the General Clauses Act and Page 10 of 19 Kalpana Gupta v. Mukesh CC No 624688/2016 Section 114 of the Evidence Act."
21.In view hereof, the legal demand notice Ex. CW1/F is held to have been duly served upon the Accused. Finally, the complaint has been filed within the limitation period.
22.Finally, the complaint has been filed within the limitation period. Therefore, essential ingredients (i) to (v) as stipulated by the Hon'ble SC in Kusum Ingots Case (supra), have been duly satisfied.
23.Further, as noted above, once the execution of the cheque by the Accused is proved/admitted, the presumption of the same being drawn for consideration stands attracted in terms of Section 139 NI Act. Now, in the case at hand, so far as the question of existence of basic ingredients for drawing of presumption U/s 118 (a) and 139 of the NI Act is concerned, from the aforesaid discussion, it is apparent that the Accused has not denied his signatures on the cheques in question that has been drawn in favour of the Complainant on a bank account maintained by the Accused; and hence the said presumption can be drawn.
24.The Ld. Counsel for the Accused has stated that such inference cannot be drawn as the Accused had given the cheque as a blank signed cheque and the particulars on the same, including the name of the payee, have been filled by or at the instance of the Complainant. At this stage, reliance can be laid on the observations of the Hon'ble SC in Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197; wherein it has been held that:
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Kalpana Gupta v. Mukesh CC No 624688/2016 "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...
40. 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."
(emphasis supplied)
25.The same view has been endorsed by the Hon'ble High Court of Delhi in Ravi Chopra v. State, CRL.M.C. 5211/2006; wherein it was observed that:
"A collective reading of the above provisions shows that even under the scheme of the NI Act it is possible for the drawer of a cheque to give a blank cheque signed by him to the payee and consent either impliedly or expressly to the said cheque being filled up at a subsequent point in time and presented for payment by the drawee. There is no provision in the NI Page 12 of 19 Kalpana Gupta v. Mukesh CC No 624688/2016 Act which either defines the difference in the handwriting or the ink pertaining to the material particulars filled up in comparison with the signature thereon as constituting a "material alteration" for the purposes of Section 87 NI Act. What however is essential is that the cheque must have been signed by the drawer."
(emphasis supplied)
26.Hence, in view of such clear stipulation by the Hon'ble SC and Hon'ble Delhi High Court, it is immaterial whether the particulars on the cheque have been filled by the Accused or not, to the extent the Accused has admitted to have appended his signatures on the cheque in question. Accordingly, the applicability of the presumption under Section 139 NI Act is not dependent upon the Accused filling the particulars on the cheque. Accordingly, it is required to be presumed that the cheques in question were drawn for consideration and the holder of the cheque i.e., the Complainant received the same in discharge of an existing debt. The onus, therefore, shifts on the Accused to establish a probable defence so as to rebut such a presumption.
27.In the segment on legal framework, set out above, the legal proposition with respect to the burden of proof upon the Accused has already been discussed. Hence, it is now to be examined as to whether the Accused brought any material on record or pointed out glaring discrepancies in the material produced by the Complainant for dislodging the presumption which meets the standard of preponderance of probabilities.
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28.The Accused in the present case, has taken the following line of defence with a view to rebut the presumption:
(a) The cheque in question was issued as a security cheque:
29.The Accused in his defence evidence as well as statement u/s 251 CrPC as well examination u/s 313 CrPC has submitted that the cheques in question were given as security cheques and not for repayment, and hence, the provisions of Section 138 NI Act do not apply. Even the husband of the Complainant, in his cross- examination dt. 20.12.2018 has submitted that it is correct that the cheques in question were issued as security cheques. In this regard, it is noted that the Hon'ble High Court of Delhi in Suresh Chandra Goyal v. Amit Singhal, Crl. L.P, 706/2014 has succinctly observed that:
"Section 138 of NI Act does not distinguish between a cheque issued by the debtor in discharge of an existing debt or other liability, or a cheque issued as a security cheque on the premise that on the due future date the debt which shall have crystallized by then, shall be paid. So long as there is a debt existing, in respect whereof the cheque in question is issued, in my view, the same would attract Section 138 of NI Act in case of its dishonour." (emphasis added)
30.Hence, it appears that if on the date of presentment of cheque, liability of the Accused existed towards the Complainant, the same would fall under Section 138 NI Act, even if the same was issued as a security cheque; and hence, it is Page 14 of 19 Kalpana Gupta v. Mukesh CC No 624688/2016 not relevant if the cheques in question were issued with the intent of being a security cheque. In fact, the Hon'ble Supreme Court in a recent judgment of the Sunil Todi Case (supra), has held that the provisions of Section 138 NI Act apply to cheques issued on advance basis as well, if at the time of presentation of the same, liability exists. It was observed that:
"The object of the NI Act is to enhance the acceptability of cheques and inculcate faith in the efficiency of negotiable instruments for transaction of business. The purpose of the provision would become otiose if the provision is interpreted to exclude cases where debt is incurred after the drawing of the cheque but before its encashment. In Indus Airways, advance payments were made but since the purchase agreement was cancelled, there was no occasion of incurring any debt. The true purpose of Section 138 would not be fulfilled, if 'debt or other liability' is interpreted to include only a debt that exists as on the date of drawing of the cheque." (emphasis added)
31.Hence, unless it is shown that no liability existed on the date of presentation, either because no loan was advanced or that the payment was already made by other modes; provision of Section 138 NI Act would apply to cheques issued on an advance basis as well. Accordingly, this argument/defence of the Accused, by itself, does not rebut the presumption u/s 139 NI Act.
(b) The Accused is not liable for the cheque amount on account of repayment: Page 15 of 19
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32.It is the case of the Accused that the Accused had taken a loan of Rs. 3,20,000/-
from the husband of the Complainant on interest and has repaid the same in monthly installments of Rs. 16,000 per month for 3 years. Further, the husband of the Complainant (i.e., the SPA holder) has also in his cross examination dt. 20.12.2018 stated that "it is correct that the Accused was paying me the interest". It is further noted that the Accused has in his statement U/s. 313 CrPC stated that he used to pay Rs. 16,000/- monthly and has returned Rs. 5,70,000/- till date. The Accused has examined his wife Ms. Anita Devi as DW1 who has also deposed that an amount of Rs. 16,000/- per month was paid by the Accused to the Complainant for 2 years in front of her. No cross-examination of DW-1 has been done on the point of repayment of Rs. 16,000/- per month by the Complainant. Hence, the payment of Rs. 16,000/- by the Accused per month is not disputed. It is also clear that the cheques in question were given as security; as is evident from the wording of Ex. CW1/D and Ex. CW1/B. Further, the husband of the Complainant, i.e., the SPA holder, has in his cross examination dt. 20.12.2018 also stated that "it is correct that the cheques in question were the security cheques only". Accordingly, the liability under these cheques in question would only arise if the Complainant is able to show that the cheque amount was due and payable by the Accused on the date of presentation and the same had not been paid at a prior point in time by the Accused.
33.It is noted that the rate of interest in Ex. CW1/B, i.e., the Iqrarnama is blank and no rate of interest has been mentioned therein. Hence, the rate of interest cannot Page 16 of 19 Kalpana Gupta v. Mukesh CC No 624688/2016 be determined on the basis of the written document executed between the parties. The husband of the Complainant, i.e., the SPA holder has in his cross examination dt. 20.12.2018 stated that the said loan was given at the rate of 2% per month. However, the same is not mentioned in Ex.CW1/B and Ex.CW1/D and has not been proved by way of any other evidence. It is noted that even in the complaint, the interest amount has not been mentioned. In paragraph 2(b) of the complaint, it has been stated that the Accused agreed to pay the interest on the said amount, but the rate of interest has not been mentioned.
34.As per Ex.CW1/B, the amount of Rs. 3,20,000/- was given on 01.02.2013. The said amount had to be repaid within 12 months and the said amount was advanced on an interest basis, percentage of which has not been specified. Even otherwise, if the rate of interest is taken to be 2% per month, i.e., on the basis of the answer of the Complainant's SPA holder in the cross-examination, the amount of interest comes to Rs. 6400 per month. However, the Accused in notice u/s. 251 CrPC as well as statement u/s. 313 CrPC has stated that he used to pay a monthly installment of Rs. 16,000/-. Even as per the testimony of DW-1, which has gone unrebutted on this point, supports the version of the Accused of paying Rs. 16,000/- per month, for at least 2 years. In her cross examination, neither any question has been put on the amount of the installment nor has a suggestion been given that the said amount was not given or not paid by the Accused. In fact, without specifying the amount, the husband of the Complainant has in his cross examination stated that the Accused was paying the interest to him. Assuming Page 17 of 19 Kalpana Gupta v. Mukesh CC No 624688/2016 that the interest component was Rs. 6,400/- per month and the Accused, the Accused has proved that he was paying monthly installment of Rs. 16,000/-. This means that the Accused was re-paying the principal amount along with the interest component. Accordingly, the amount of liability due as on the date of presentation of the cheques in question could not have been of the total principal amount, even if it is taken that the said amount has been paid for 24 months and not 36 months. Further, in the cross examination of the DW1 on 13.12.2021 by Ld. Counsel for the Complainant, a suggestion has been given to the wife of the Accused, i.e., DW-1, that a settlement was reached between the parties before the police wherein the Accused had accepted to pay an amount of Rs. 1,50,000/- to the Complainant. By this suggestion in itself, a doubt as to the amount of liability has been created by the Complainant as well. Accordingly, the Accused has by the standard of preponderance of probabilities rebutted the presumption U/s. 139 NI Act and the burden shifts to the Complainant to prove the amount due from the Accused on the date of presentation of the cheques in question, beyond all reasonable doubt. However, the Complainant has failed to bring on record any evidence to explain/prove the amount of liability on the date of presentation of the cheques in question. Accordingly, the Complainant has failed to discharge his burden of proving the guilt of the Accused beyond all reasonable doubt.
Conclusion
35.In these circumstances and in view of the above detailed discussion, this court is Page 18 of 19 Kalpana Gupta v. Mukesh CC No 624688/2016 of the considered opinion that the Accused has successfully rebutted the presumption under Section 139 of Negotiable Instruments Act, 1881 and the ingredients of Section 138 of Negotiable Instruments Act, 1881 do not stand proved. Therefore, Accused, Mukesh is held not guilty and is acquitted of the offence punishable under Section 138 of the Negotiable Instrument Act, 1881.
ORDER: ACQUITTAL
Announced in Open Court (Twinkle Chawla)
15.03.2022 MM (NI-Act 02), South East
Saket Court, New Delhi
Note: This judgment contains 19 pages and each page has been signed by me.
(Twinkle Chawla) MM (NI-Act 02), South East Saket Court, New Delhi Page 19 of 19