Delhi District Court
Also In The Case Of K. Bhaskaran vs . Sankaran Vaidhyan Balan 1999 (4) on 27 September, 2018
IN THE COURT OF MR. MRIDUL GUPTA, METROPOLITAN MAGISTRATE,
SOUTH-WEST, DWARKA, DELHI
In Re:
CNR No. DLSW02-004889-2015
CC No. 4995081/16
Sunder Pandey
S/o Sh. Ramar Kumar,
R/o B- 22, Pocket 10
Sector 13, Dwarka, New Delhi ............Complainant
Versus
Amit Pawar
S/o Late Sh. Dharam Pal,
R/o RZ-B-57, Bindapur Extension
Uttam Nagar, New Delhi .............Accused
(1) Offence complained of or
proved : 138 N.I. Act
(2) Plea of accused : Pleaded not guilty
(3) Date of institution of case : 31.07.2015
(4) Date of conclusion of arguments: 24.08.2018
(5) Date of Final Order : 27.09.2018
(6) Final Order : Convicted
Sunder Pandey v. Amit Pawar CC No.4995081/16 Page no. 1 of 20
JUDGMENT
1. Vide this judgment I shall dispose of the complaint filed by the complainant under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the 'Act ').
2. Brief facts relevant for the decision of the case are as under:-
The complainant alleges that in November, 2011, he advanced friendly loan of an amount of Rs. 1,50,000/- to the accused for a period of thirty(30) months @ 2% interest per month. It is alleged that when complainant approached accused for repayment of loan in May 2014, accused pleaded financial difficulty and requested time of 6 months for repayment. Again in November 2014, accused requested time for repayment. In May 2015, accused gave one cheque of Rs. 1,50,000/- i.e. cheque in question bearing no. 694547 dated 20.05.2015 drawn on Oriental Bank of Commerce, Vijay Enclave, Delhi to complainant towards repayment of loan, with an assurance of its encashment. The complainant presented the cheque in his account maintained at Punjab National Bank, Sector 12-A, Dwarka, Delhi, which was returned with the remarks "Funds Insufficient"
vide bank return memo dated 27.05.2015. Thereafter, complainant served a legal notice dated 18.06.2015 upon the accused through his counsel demanding the said amount. Despite service of aforesaid notice, neither any reply was sent nor the money was repaid by the accused. Thereafter, complainant has filed the present complaint case with the submission that accused be summoned, tried and punished according to law.
3. In his pre-summoning evidence, complainant examined Sh. Upender Rawat, Sr. Branch Manager, PNB, Sector 12-A, Dwarka, Delhi as CW-1 who placed or record the cheque return memo dated 27.05.2015 as Ex. CW-1/1. Complainant also examined himself on affidavit Ex. CW-2/A. He reiterated the contents of complaint and placed on record, original cheque of Rs. 1,50,000/- i.e. cheque in question bearing no. 694547 dated 20.05.2015 drawn on Oriental Bank of Commerce, Vijay Enclave, Delhi as Ex. CW-2/1, legal demand notice dated Sunder Pandey v. Amit Pawar CC No.4995081/16 Page no. 2 of 20 18.06.2015 as Ex. CW-2/2, postal receipt as Ex. CW-2/3 and tracking report of delivery as Mark-A.
4. Upon appreciation of pre-summoning evidence, accused was summoned for an offence punishable under Section 138 of the Act and notice under Section 251 Cr.P.C. for this offence was framed upon accused on 04.01.2016 to which he pleaded not guilty and claimed trial. He admitted his signature on the cheque in question, however stated that except his signatures, nothing in the cheque has been filed by him. He stated that he had taken a loan of only Rs. 1,00,000/- from complainant in 2011 repayable in daily installments of Rs. 1,500/-. He stated that cheque in question was for security purpose at time of taking loan from complainant. He also stated that he had repaid entire loan to complainant. He admitted that address mentioned in legal notice is his correct address, however, denied receipt of legal notice.
5. The accused moved an oral application to cross-examine the complainant witnesses. Complainant was duly cross examined by the Ld. Counsel for accused. No other witness was produced by the complainant and he closed his evidence by giving a separate statement to this effect. Thereafter, statement of accused under Section 313 Cr.P.C. was recorded in which all the incriminating evidence were put to him to which accused stated that he had taken a loan of only Rs. 1,00,000/- from complainant repayable in daily installments of Rs. 1,500/-. He stated that he had repaid about Rs. 1,10,000/- or Rs. 1,15,000/- to complainant. He admitted only his signature on the cheque in question and stated same was give as blank signed cheque. He denied receipt of legal notice.
6. Accused preferred to lead evidence in his defence and had examined himself as DW-1, Smt. Sunita as DW-2 and Ms. Reshma as DW-2(DW-3 in sequence). The witnesses were cross-examined by Ld. counsel for complainant. The accused did not examine any other witness and defence evidence was closed.
Sunder Pandey v. Amit Pawar CC No.4995081/16 Page no. 3 of 20
7. Thereafter, matter was listed for final arguments. It was argued by the Ld. counsel for the complainant that this is a fit case for conviction of the accused as all the essential ingredients of Section 138 of the Act read with Section 139 of the Act have been fulfilled and that the same has been aptly demonstrated by the complainant before the court. It was argued that accused admitted his signatures on the cheque in his plea of defence recorded at the time of framing of notice under Section 251 Cr.P.C as well as in his statement U/s 313 Cr.P.C. He argued that accused never gave reply to the legal demand notice. He also argued that as per version of accused, he had taken loan of Rs. 1,00,000/- from complainant which had been repaid by him. However accused could not bring on record any evidence to show any repayment and the diaries produced by accused in defence evidence were not reliable. He also argued that testimonies of DW-2 and DW-3 was not reliable. It was argued that accused failed to raise the probable defence to disprove the case of complainant and to rebut the presumption under Section 139 NI Act. Therefore, accused be convicted for the offence under Section 138 of the Act.
8. Per contra, on behalf of accused, Ld. Counsel reiterated the submissions made by accused in his plea of defence at the time of framing of notice under Section 251 Cr.P.C and in his statement under Section 313 Cr.P.C. He maintained that entire loan with interest had been repaid to complainant and the cheque in question was misused by the complainant. He disputed the identity of complainant. He also stated that cheque in question was not proper and reliable. He also argued that the bank return memo exhibited in pre summoning evidence, was not placed on record in post summoning evidence and cannot be relied upon. He also argued that cheque in question has been issued on behalf of Chauhan Dyeing, and the same has not been made party to present proceedings. He argued that address of accused mentioned in legal notice is not his correct address and there was no proof of service of legal notice. He also argued that legal notice was not proper as additional amount of charges and costs were asked for in the same. He argued that in post summoning evidence complainant only adopted his evidence affidavit and not the documents, hence the same could not Sunder Pandey v. Amit Pawar CC No.4995081/16 Page no. 4 of 20 be relied upon. He argued that complainant failed to show capacity to advance loan to accused. He argued that complainant is a money lender operating without money lender license and hence is debarred from recovering the loan. He also argued that the present loan is a time barred debt and cannot be recovered. He argued that evidence of complainant suffered from material lapses and was not sufficient to establish the case against accused. He submitted that complainant has failed to prove his case beyond reasonable doubt and accused is entitled to be acquitted of offence u/s 138 of the Act.
9. I have perused the entire record as well as evidence led by the complainant as well as by the accused.
10. Before appreciating the facts of the case in detail for the purpose of decision, let relevant position of law be discussed first:-
For the offence under Section 138 of the Act to be made out against the accused, the complainant must prove the following points, that:-
1. the accused issued a cheque on account maintained by him with a bank.
2. the said cheque had been issued in discharge, in whole or in part, of any legal debt or other liability.
3. the said cheque has been presented to the bank within a period of three months from the date of cheque or within the period of its validity.
4. the aforesaid cheque, when presented for encashment, was returned unpaid/dishonoured.
5. 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 the cheque.
6. the drawer of the cheque failed to make the payment within 15 days of the receipt of aforesaid legal notice of demand.
11. The Act raises two presumptions in favour of the holder of the cheque i.e. Complainant in the present case; firstly, in regard to the passing of consideration as contained in Section 118 (a) and secondly, a presumption that the holder of Sunder Pandey v. Amit Pawar CC No.4995081/16 Page no. 5 of 20 cheque receiving the same of the nature referred to in Section 139 discharged in whole or in part any debt or other liability.
Section 118 of the N.I Act provides :
"Presumptions as to negotiable instruments: Until the contrary is proved, the following presumptions shall be made: (a) 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;"
Section 139 of the N.I Act further provides as follows:
"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 part, of any debt or other liability".
12. For the offence under Section 138 of the Act, the presumptions under Sections 118(a) and 139 have to be compulsory raised as soon as execution of cheque by accused is admitted or proved by the complainant and thereafter burden is shifted to accused to prove otherwise. These presumptions shall be rebutted only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability etc. A presumption is not in itself evidence but only makes a prima facie case for a party for whose benefit it exists. Presumptions both under Sections 118 and 139 are rebuttable in nature. Same was held by the Hon'ble Supreme Court of India in Hiten P. Dalal v. Bratindranath Banerjee [(2001) 6 SCC 16].
13. In the present case, accused has admitted his signatures on the cheque in question, in the notice U/s 251 Cr.P.C. as well as his statement U/s 313 Cr.P.C and also in defence evidence. Reference can be made to Judgment of Apex Court in Rangappa v. Mohan, AIR 2010 SC 1898,that, "Once the cheque relates to the account of the accused and he accepts and admits the signatures on the said cheque, then initial presumption as contemplated under Section 139 of the Negotiable Instruments Act has to be raised by the Court in favour of the complainant."
Also in the case of K. Bhaskaran Vs. Sankaran Vaidhyan Balan 1999 (4) Sunder Pandey v. Amit Pawar CC No.4995081/16 Page no. 6 of 20 RCR (Criminal) 309, it has been held by the Hon'ble Supreme Court as under:
"As the signature in the cheque is admitted to be that of the accused, the presumption envisaged in Section 118 of the Act can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears. Section 139 of the Act enjoins on the court to presume that the holder of the cheque received it for the discharge of any debt or liability."
It has been held in M/s. Kumar Exports v. M/s. Sharma Carpets, [2009 A.I.R. (SC) 1518] that the accused may rebut these presumptions by leading direct evidence and in some 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. Further, the burden may be discharged by the accused by showing preponderance of probabilities and the onus on the accused is not as heavy as it is on the complainant to prove his case. In light of aforestated legal position, let us carry out a scrutiny of the evidence led at the trial.
14. In the present case, the complainant by way of an affidavit led his own evidence testifying that cheque was issued to him after he had advanced loan of Rs. 1,50,000/- to the accused. The cheque in question, dishonour memo of the cheque and legal demand notice were exhibited on record.
15. The principle defence taken by the accused as brought out from his statement U/s 313 Cr.P.C and his examination in chief as DW-1, is that he had taken a loan of only Rs. 1,00,000/- from complainant repayable in daily installments of Rs. 1,500/- and that he had repaid about Rs. 1,10,000/- or Rs. 1,15,000/- to complainant. It is his defence that cheque in question was given as a blank signed cheque for security purpose at time of taking loan from complainant and same has been misused by complainant. In support of his defence, accused placed on record a diary Ex. DW-1/A which is stated to contain an account of acknowledgment of repayments made to complainant for the loan. The accused also examined Smt. Sunita as DW-2 and Ms. Reshma as DW-2(DW-3 in Sunder Pandey v. Amit Pawar CC No.4995081/16 Page no. 7 of 20 sequence) who deposed that they had also taken loans from complainant on interest. DW-2, Sunita also produced one such diary as Ex. DW-2/1 which is stated to contain handwritten record of acknowledgment of repayments made to complainant towards installments of loan.
16. However perusal of evidence reveals that the said diary entries in Ex. DW- 1/A is containing several cuttings and overwritings. Moreover the same does not state out the purpose for which it is prepared and does not mention name of complainant. In said diary, at certain places dates are mentioned but no corresponding entry is made. Accused as DW-1 himself deposed that some payments were not recorded in the diary, however the entire loan is stated to be repaid by him. It is thus clear that the alleged diary was not properly maintained in the ordinary course of business. Same is the case with diary produced by DW-2 as DW-2/1 as it is also incomplete as it is stated that some entries of repayment were not made in it. DW-2 further stated that on repayment of entire loan, the diary was crossed and take away by complainant. However if as per version of the defence witnesses, their loan had been repaid, then both the alleged diaries should have been taken away by complainant, which has not transpired in present case. Also both the diaries Ex. DW-1/A and Ex. DW-2/1 contain alteration in the alleged loan amount. Moreover the complainant unequivocally denied his handwriting of diary Ex. DW-1/A and was never confronted with the diary Ex. DW- 2/1. The accused did not produce any evidence either through expert evidence or through banker of complainant to prove signatures of complainant on the diary. It is pertinent to note that an application filed by accused for directions for verification of the diaries was allowed by Ld. Revision Court with permission to lead expert evidence to verify the signatures and handwriting of complainant on the diaries. However despite grant of several opportunities, accused did not lead any expert evidence.
17. Thus in light of the same, considering the incomplete and sketchy record of diaries Ex. DW-1/A and Ex. DW-2/1, the same are not reliable documents. Moreover, the defence witnesses could not account for possession of the diaries, Sunder Pandey v. Amit Pawar CC No.4995081/16 Page no. 8 of 20 if as per their version loans had been repaid in full and the same also casts suspicion on these diaries. More importantly, the diaries were not proved to be in handwriting or signed by complainant, hence they cannot be considered as acknowledgment of repayment by complainant. Though both DW-2, Sunita and DW-3, Reshma stated that loan taken by accused from complainant had been repaid, they did not produce any document or material to support the same. Hence mere oral testimonies of these witnesses in this regard is not reliable. The version of accused that he had taken a loan of Rs. 1,00,000/- only from complainant which has been repaid, is not credible, as the same is not supported by any evidence on record.
18. Regarding the averment that cheque was given as blank signed cheque which was misused by complainant after repayment of loan, the same is also not a credible defence. The cheque in question has been dishonored vide cheque returning memo dated 27.05.2015 for reason "Funds Insufficient" (Ex. CW-1/1) and not for any other reason. There is no explanation or evidence as to why, if the cheque was not returned after repayment of loan way back in 2012, stop payment instructions were not issued by accused to bank. Even if for the sake of argument, it is considered that the accused gave a blank signed cheque to the complainant, once accused has admitted his signatures on the cheque he cannot escape his liability on the ground that the particulars have not been filled in by him, or that signatures on cheque and the contents are filled in different writings and inks. When such a cheque containing blanks is signed and handed over, it means that the person signing it has given implied authority to the holder of the cheque, to fill up the blank which he has left. It has been clearly laid down in Section 20 of Negotiable Instruments Act 1881, that where one person signs and delivers to another a Negotiable Instrument either wholly blank or having written thereon an incomplete negotiable instrument, he thereby gives, "prima facie authority to the holder thereof to make or complete, as the case maybe, upon it a negotiable instrument". In the case of Satish Jayantilal Shah v. Pankaj Mashruwala and Anr. 1996 Cri. L. J. 3099, it has been held that:
Sunder Pandey v. Amit Pawar CC No.4995081/16 Page no. 9 of 20 "no law provides that in case of any negotiable instruments entire body has to be written by maker or drawer only."
In the case of Moideen v. Johny 2006 (2) DCR 421, it has been held that when a blank cheque is issued, the drawer gives an authority to the person to whom it is issued, to fill it up at the appropriate stage with necessary entries and to present it to the bank. Thus, the accused can not dispute the contents of the cheque in question.
19. The accused has also disputed his liability on the ground that complainant did not have the requisite sources to advance loan to accused. Reliance has been placed on cross-examination of complainant to argue that though complainant stated that the present loan was advanced from the funds out of sale of a plot by complainant, no documents regarding the sale were placed on record. Ld. Counsel for accused argued that same casts doubt on capacity of complainant to advance loan. However, this argument of Ld. Counsel for accused is also devoid of any merit, as perusal of the evidence shows that accused has not denied the factum of taking loan of Rs. 1,00,000/- from complainant in year 2011. Moreover the defence witnesses, DW-2 Sunita and DW-3 Reshma also deposed that the complainant advanced loans of Rs. 1,00,000/- and of Rs. 40,000/- respectively, to them, as well as loans to other persons. Therefore, the accused has clearly admitted the financial capacity of complainant to advance loan of Rs. 1,50,000/- throughout trial.
Reliance in this regard can also be placed on decision of Hon'ble High Court of Delhi, in Sanjay Arora V. Monika Singh, Crl. Appeal No. 98/2017, dated 31.05.2017, wherein it was observed:
"Mere admission of the complainant that he was earning only Rs. 12,000 per month from small business or his failure to file income tax returns, or his omission to produce the bank passbook or to examine Chhotu as a witness in corroboration, are inconsequential. In order to rebut the statutory presumption, it was the burden of the respondent to prove the facts she had pleaded in answer to the notice under Section 251 Cr.P.C. No material in support of such plea having come on record, the statutory presumption under Section 139 Negotiable Instruments Act in the case at hand has not been rebutted."
Sunder Pandey v. Amit Pawar CC No.4995081/16 Page no. 10 of 20
20. Ld. counsel for accused also argued that complainant is a money lender operating without money lender license and hence is debarred from recovering the loan. However this argument is devoid of any merit as accused could not produce any evidence to substantiate this allegation. Even otherwise, this argument advanced on behalf of the accused fails to persuade this court in light of the decision of Hon'ble High Court of Delhi rendered in case titled as Kajal vs Marwah (Crl. Appeal No.870/2003, date of decision 27.03.2014), wherein the Hon'ble High Court of Delhi under similar facts held:-
''In my view, even if the appellant / complainant was engaged in lending money, that would not debar her from filing a complaint under Section 138 NI Act, if a cheque issued to her towards repayment of the loan advanced by her is dishonoured by a bank for want of funds and the drawer of the cheque fails to make payment within the prescribed time, after receipt of legal notice from the render. Section 3 of Punjab Registration of Money Lenders Act, 1938, which applies to Delhi, to the extent it is relevant provides that notwithstanding any contained in any other enactment for the time being in force, a suit by a money lender for the recovery of a loan shall, after the commencement of the act, be dismissed unless the money lender at the time of institution of the suit is registered and hold a valid license or holds a certificate from the commissioner under Section 11 of the Act, specifying the loan in respect of which the suit is instituted or if he is not already a registered or licensed money lender, he satisfies the court that he has applied for such registration or license, but the application is pending. The aforesaid provision does not debar a money lender from instituting a complaint under Section 138 of the NI Act, 1881, which is a remedy enforceable before a criminal court, and totally independent of a civil suit. The criminal liability is incurred only in case a cheque is issued in discharge of a debt or any other liability, the said cheque is dishonoured for want of funds and the borrower fails to make payment of the amount of the cheque even after the receipt of notice from the lender''.
It is, therefore, apparent that the embargo is with respect of filing of suit for recovery of money or simply the recovery of that money. This fails to have a bearing on the present case, since what is at hand is a complaint case under Section 138 NI Act, which is not a recovery proceedings but are proceedings to punish a person who after issuing a cheque fails to honour the same and also commits a default in paying the said amount on receipt of the notice. Hence, the argument of amount being irrecoverable and therefore, not a legally enforceable Sunder Pandey v. Amit Pawar CC No.4995081/16 Page no. 11 of 20 debt is misconceived in the facts of the case and in view of the legal position as enunciated above.
21. Ld. Counsel for accused also argued that present loan is in violation of Section 269SS of Income Tax Act, 1961, which prohibits cash transaction over the amount of Rs. 20,000/-. It is argued that therefore present transaction is contrary to law and present loan is not recoverable. However this argument of Ld. Counsel for accused is also bereft of any merit as provisions of Section 269SS of Income Tax Act, 1961, prohibit taking or accepting loan over amount of Rs. 20,000/- in cash and do not make the amount of loan given in cash, unrecoverable in proceedings under Section 138 of the Act. Reliance in this regard can be placed upon the decision of Hon'ble High Court of Delhi in Lekh Raj Sharma v. Yashpal Sharma, (Crl.L.P. 567/2014),D.O.D. 30.06.2015, wherein it was observed:
".......21. The finding that, as the amount of loan disbursed to the respondent was not shown in the balance sheet and income tax return, the appellant could not be said to have proved its case beyond reasonable doubt, is also erroneous.In this regard, reference may be placed on the decisions of the Bombay High Court in:
........
ii) Mr. Krishna P. Morajkar vs. Mr. Joe Ferrao, 2013 CRIJ (NOC) 572 Bombay (Decided on 19.07.2013), wherein the Court observed:
"The underlined observations do not disclose as to where can one find a prohibition on recovering amounts not disclosed in income tax returns. With utmost humility, I have to state that I have not come across any provision of Income Tax Act, which makes an amount not shown in the income tax returns unrecoverable. The entire scheme of the Income Tax Act is for ensuring that all amounts are accounted for. If some amounts are not accounted for, the person would be visited with the penalty or at times even prosecution under the Income Tax Act, but it does not mean that the borrower can refuse to pay the amount which he has borrowed simply, because there is some infraction of the provisions of the Income Tax Act. Infraction of provisions of Income Tax Act would be a matter between the revenue and the defaulter and advantage thereof cannot be taken by the borrower. In my humble view, to say that an amount not disclosed in the income tax returns becomes irrecoverable would itself defeat the provisions of Section 138 of the Negotiable Instruments Act."
Sunder Pandey v. Amit Pawar CC No.4995081/16 Page no. 12 of 20 Therefore, though non-compliance of provisions of Section 269SS of Income Tax Act,1961, may invite penal action under the said Act, however the same cannot operate to undue advantage on borrower who can refuse to pay the loan amount taken by him on this ground.
22. Ld. Counsel for accused also argued that the cheque in question has been issued on behalf of one "Chauhan Dyeing", however, said entity has not been made party to present proceedings. It is therefore argued that present complaint is not maintainable. However this argument of Ld. Counsel for accused is also without substance as the contents of the cheque in question Ex. CW-2/1 clearly show that cheque has been issued "For Chauhan Dyeing" by the accused as proprietor of the said entity. The accused has not denied his signatures on the cheque in question, nor did the accused dispute that he was proprietor of "Chauhan Dyeing" at time of issuance of cheque in question, throughout trial. At this stage, it is profitable to refer to decision of Hon'ble High Court of Delhi in M.M.Lal v. State NCT of Delhi 2012 (4) JCC 284 (NI) wherein it was observed:-
"5. It is well settled that a sole proprietorship firm has no separate legal identity and in fact is a business name of the sole proprietor. Thus any reference to sole proprietorship firm means and includes sole proprietor thereof and vice versa."
Hence it is a trite position of law that the sole proprietor and proprietorship concern are one and the same legal entity in eyes of law. Therefore arraying the proprietor by name as accused and not the proprietorship concern, is a mere technicality of nomenclature and does go to root of the matter so as to render the complaint defective in eyes of law. The same does not cause any prejudice to accused, as accused was well aware of nature of proceedings against him and the capacity in which he has been arrayed as accused.
23. At the stage of final arguments. Ld. Counsel for accused also disputed the identity of complainant stating that the spelling of complainant's name is different Sunder Pandey v. Amit Pawar CC No.4995081/16 Page no. 13 of 20 from the spelling in signature of complainant in his pleadings. However this argument of Ld. Counsel for accused is frivolous and baseless as the contents of signature of a person is his personal discretion and there is no legal requirement that a person should spell out his name correctly in his signature. Moreover this argument clearly appears to be an afterthought at stage of final arguments as no such objection as to identity of complainant was raised during entire trial and no question or suggestion regarding the same was put to complainant during his cross-examination. The accused did not lead any evidence to show that the present complainant is not the payee of cheque in question.
24. Ld. Counsel for accused also argued that the bank return memo exhibited in pre summoning evidence, was not placed on record in post summoning evidence and cannot be relied upon. He also argued that in post summoning evidence complainant only adopted his evidence affidavit and not the documents, hence the same could not be relied upon. However these arguments of Ld. Counsel are bereft of any merit in view of decision of Hon'ble High Court of Delhi in Rajesh Agarwal v. State and Anr., Crl. M.C. No. 1996/2010, DoD, 28.07.2010, wherein it was held:
"In order to ensure that the cases u/s 138 N.I. Act are tried before the Court of MM/JM in an expeditious manner, Legislature provided for summary trial. Section 145 of N.I. Act provides that evidence of complainant may be given by him by way of affidavit and such affidavit shall be read in evidence in any inquiry, trial or other proceedings in the court. This also makes clear that a complainant is not required to examine himself twice i.e. one after filing the complaint and one after summoning of the accused. The affidavit and the documents filed by the complainant along with complaint for taking cognizance of the offence are good enough to be read in evidence at both the stages i.e. pre-summoning stage and the post summoning stage. The complainant is not required to be recalled and re-examined after summoning of accused unless the MM passes a specific order as to why the complainant is to be recalled. Such an order is to be passed on an application made by the accused or under section 145(2) of N.I. Act suo moto by the Court."
Therefore the legal position is clear that in cases under Section 138 of the Sunder Pandey v. Amit Pawar CC No.4995081/16 Page no. 14 of 20 Act, complainant is not required to tender evidence again after summoning of accused and the pre-summoning evidence shall be read in evidence at post summoning stage also. Therefore the objection, that the documents of complainant were not adopted in his post summoning evidence, is not sustainable. Similarly the objection regarding the bank return memo not being placed on record in post summoning evidence is also not sustainable, as in present case the bank return memo was exhibited as Ex. CW-1/1 during pre summoning evidence of complainant, by banker of complainant. The oral application of accused for permission to cross-examine the complainant witnesses under Section 145(2) was allowed. However accused conducted cross- examination of complainant only and never made any oral or written application for recalling the bank witness for the purpose of cross examination, throughout trial.
25. Even otherwise, these arguments of Ld. Counsel for accused clearly appear to be an afterthought at stage of final arguments as no such objections were raised by accused during entire trial. Perusal of record reveals that after accused was summoned, his application under section 207 Cr.P.C. for supply of complaint and documents was allowed. Thereafter vide order dated 23.12.2015 it was recorded that documents have been supplied to accused. Hence all the documents of the case were in knowledge of accused. Furthermore the accused conducted exhaustive cross-examination of complainant over two dates of hearing and also confronted him with documents including cheque in question. However no suggestion or question was put to complainant to deny dishonor of cheque in question. Also the factum of dishonor of cheque in question for the reason 'Funds Insufficient' alongwith the bank return memo Ex. CW-1/1 were put to the accused in his statement under Section 313 Cr.P.C to which he replied "It is a matter of record". Even otherwise, accused has never denied the factum of dishonor of cheque in question throughout trial and merely because the bank return memo was not re-exhibited in post summoning evidence is at the most an irregularity which does not vitiate trial as clearly no prejudice was caused to the accused due to the same. It is also pertinent to note that in post summoning evidence Sunder Pandey v. Amit Pawar CC No.4995081/16 Page no. 15 of 20 complainant adopted his pre-summoning affidavit of evidence. Perusal of pre- summoning affidavit of evidence of complainant Ex. CW-2/A reveals that complainant has referred to and annexed all the documents which were exhibited during pre-summoning evidence. Hence even in the evidence affidavit of complainant all the documents are detailed and merely because the same were not expressly stated out again in post summoning evidence, would not exclude them from consideration. Moreover all the documents of complainant were put to accused in his statement under Section 313 Cr.P.C. Hence accused was well aware of the evidence against him and no prejudice was caused to him.
26. Ld. Counsel for accused also argued that legal notice was not proper as additional amount of charges and costs were asked for in the same. However this argument of the counsel is also devoid of any merit as perusal of legal demand notice Ex. CW-2/2 reveals that cheque amount of Rs. 1,50,000/- has been clearly and specifically mentioned and claimed and further amount of Rs. 5,000/- is claimed as cost and charges of the legal notice, i.e. incidental charges. It is trite law that demand of costs and charges in addition to cheque amount does not invalidate the notice. The decision of Apex Court in K.R. Indira v. Dr. G. Adinarayana AIR 2003 SC 4689, can be cited here with purpose, wherein it was held:
"8. As was observed by this Court in Central Bank of India and Anr. v. Saxons Farms and Ors., [1999] 8 SCC 221 the object of the notice is to give a chance to the drawer of the cheque to rectify his omission. The demand in the notice has to be in relation to 'said amount of money' as described in provision. The expression 'payment of any amount of money' as appearing in the main portion of Section 138 of the Act goes to show it needs to be established that the cheque was drawn for the purpose of discharging in whole or in part of any debt or any liability, even though the notice as contemplated may involve demands for compensation, costs, interest etc. The drawer of the cheque stands absolved from his liability under Section 138 of the Act if he makes the payment of the amount covered by the cheque of which he was the drawer within 15 days from the date of receipt of notice or before the complaint is filed.
9. In Suman Sethi v. Ajay K. Churiwal and Another, [2000] 2 SCC 380 it was held that the legislative intent as evident from Section 138 of Sunder Pandey v. Amit Pawar CC No.4995081/16 Page no. 16 of 20 the Act is that if for the dishonoured cheque demand is not met within 15 days of the receipt of the notice the drawer is liable for conviction. If the cheque amount is paid within the above period or before the complaint is filed the legal liability under Section 138 ceases to be operative and for the recovery of other demands such as compensation, costs, interests etc. separate proceedings would lie. If in a notice any other sum is indicated in addition to the amount covered by the cheque, that does not invalidate the notice."
27. Ld. Counsel for accused also argued that cheque in question was not proper and reliable. He argued that the cheque in question mentions the amount in words as "One Lac Fififty Thousand", hence the amount is not clear which casts doubt on cheque. However, perusal of cheque in question no. 694547 reveals that the amount in words is written as "One Lac Fififty Thousand" and the amount in figures is written as "150000". Moreover the return memo Ex. CW-1/1 shows that said cheque for an amount of Rs. 150000/- has been dishonored for reason "Funds Insufficient" only and not any other reason. Hence dishonor of cheque is not due to any discrepancy or inconsistency in the amount written therein. Also mentioning the amount as "One Lac Fififty Thousand", prima facie appears at the most to be a spelling error for "One Lac Fifty Thousand" and does not go to root of the matter. It is also pertinent to note that this objection was never taken during trial. Though it is defence of accused, that he gave a blank signed cheque to complainant, he never confronted complainant with this aspect of the cheque, in his cross-examination, to dispute the validity of the cheque. Hence this argument is not sustainable.
28. At stage of final arguments, Ld. Counsel for accused also argued that as per version of complainant the loan in question was given to accused in November 2011, whereas the cheque in question towards discharge of loan liability was issued on 20.05.2015, i.e. after expiry of period of three years of limitation from date of loan. It was thus argued that the present loan is a time barred debt and cannot be recovered. However this argument of Ld. Counsel is also bereft of any merit as it is case of complainant that loan was given to Sunder Pandey v. Amit Pawar CC No.4995081/16 Page no. 17 of 20 accused in November 2011, which is also admitted by accused with exception to the amount of loan. As per complainant the loan was for a period of thirty months, and as mutually agreed, the complainant approached the accused for repayment in May 2014 and finally the cheque for repayment was given in May 2015. Therefore the right to sue for recovery of loan accured in May 2014 and period of limitation of three years is to be computed from that time, and cheque in question dated 20.05.2015 is an acknowledgment of debt within period of limitation. The burden of proof to show that recovery of loan is barred by limitation was on accused who took such objection and he did not produce any materiel to show that the loan was not repayable in 30 months i.e. by May 2014. Rather the accused in his examination-in-chief stated that he had taken the loan from complainant on 13.11.2011, which was repayable in 90 daily installments. However in his cross-examination, accused admitted that the loan was repaid by him by the end of 2012. Hence accused has himself admitted that time for repayment of loan extended beyond 90 days. Even if as per version of accused, last payment regarding present loan was made in end of 2012, and period of limitation of three years is calculated from end of 2012, the cheque in question was issued as acknowledgement within time.
29. Ld. Counsel for accused also argued that address of accused mentioned in legal notice is not his correct address and there was no proof of service of legal notice. However, perusal of record reveals that accused has admitted in the notice U/s 251 Cr.P.C that address mentioned on legal demand notice dated 18.06.2015 is his correct address. It is also worth noting that the address of the accused as mentioned in legal demand notice is the same address as that in notice under section 251 Cr.P.C. and statement of accused under section 313 Cr.P.C i.e. RZ B- 57, Bindapur Extension, Uttam Nagar, Delhi-59. Moreover the accused has not brought on record any evidence to show that he was not residing at above address at time of legal notice. The above shows that legal notice was sent at correct address of accused. Once the legal notice is proved to be sent by post to correct address of accused then the presumption u/s 27 of General Clauses Act, Sunder Pandey v. Amit Pawar CC No.4995081/16 Page no. 18 of 20 1897 arises and it shall be presumed unless proved contrary, that legal notice sent to address of accused was delivered to him. In M/s Darbar Exports and Ors. Vs. Bank of India, 2003 (2) SCC (NI) 132 (Delhi), the court held that a presumption of service of notice is to be drawn where the notice is sent through registered post as well as UPC on correct address. In the light of the same the legal notice is deemed to have been served upon the accused. The accused has failed to adduce any evidence to rebut the presumption of due service. As such, the legal notice stood served upon the accused but no payment was made despite the service nor any reply sent to the same. In Rangappa v. Mohan (supra), the Apex Court held:
"Furthermore, the very fact that the accused had failed to reply to the statutory notice under Section 138 of the Act leads to the inference that there was merit in the complainant's version."
The decisions in Santosh Mittal v. Sudha Dayal, 2014 (8) AD (Delhi) 268, and G.L. Sharma v. Hemant Kishor 2015 (2) AD (Delhi) 340, are also to the same effect.
30. Moreover as per the dicta of Apex Court in C.C. Alavi Haji vs Palapetty Muhammed & Anr, 2007 Cr. L.J. 3214, If the accused did not receive the legal notice, he could have made payment of the cheque amount within 15 days of receipt of summons from this court and could have prayed for rejection of the complaint, but this course of action has not been adopted by accused. Hence the defence of non-service of legal notice is without substance.
31. The judgments relied upon by the parties, but not discussed hereinabove reiterate the established principles of law already discussed or are distinguishable on facts and proposition of law laid down therein and hence, are not applicable to the case at hand. In view of the above, this court is of the considered opinion that apart from not raising a probable defence, the accused was not able to contest the existence of a legally enforceable debt or liability. The complaint disclosed the Sunder Pandey v. Amit Pawar CC No.4995081/16 Page no. 19 of 20 existence of a legally enforceable debt or liability vide the cheque in question, retun memo and the legal notice brought on record. However, accused failed to rebut the presumption in favour of complainant either on the basis of material available on record or by adducing any cogent and reliable defence evidence. There is sufficient material on record to conclude that complainant has successfully proved his case beyond reasonable doubt.
32. Accordingly, the accused is convicted for the offence under Section 138 of Negotiable Instruments Act, 1881.
33. Let the convict be heard on quantum of sentence.
34. Copy of Judgment be supplied to the convict free of cost.
MRIDUL Digitally signed by
MRIDUL GUPTA
GUPTA Date: 2018.09.27
17:11:01 +0530
ANNOUNCED IN THE OPEN COURT (MRIDUL GUPTA)
TODAY i.e. 27th SEPTEMBER 2018 METROPOLITAN MAGISTRATE
DWARKA DISTRICT COURTS/ DELHI
Sunder Pandey v. Amit Pawar CC No.4995081/16 Page no. 20 of 20