Delhi District Court
Ritas Heritage vs Sangita Gupta on 19 July, 2024
IN THE COURT OF MS. DIVYA GUPTA, JMFC
(NI ACT)-05/CENTRAL/THC/DELHI
In case of:-
M/s Ritas Heritage
(Through its partner)
Manav Khanna
S/o Sh. Ashwani Khanna
At D-46, Mansarovar Garden,
New Delhi ...... Complainant
Versus
Sangita Gupta
W/o Sh. Ajay Kumar Gupta
R/o 11, Ishwar Colony,
Pambari Road, Delhi ......Accused
JUDGMENT
a) Sl. No. of the case : 706/2019
b) CNR no. : DLCT02-001295-2019
c) Date of institution of the case: 14.01.2019
d) Offence complained of : 138 NI Act
e) Plea of the accused : Pleaded not guilty
f) Arguments heard on : 16.03.2024
g) Final order : Convicted
h) Date of Judgment : 19.07.2024
BRIEF STATEMENT OF REASONS FOR DECISION OF THE CASE:-
CC No. 706/2019 M/s Ritas Heritage Vs Sangita Gupta 1/15 FACTUAL MATRIX-
1. This is a complaint case filed under Section 138 of Negotiable Instrument Act, 1881 (hereinafter referred to as "NI Act") by M/s Ritas Hetitage through its partner Sh.
Manav Khanna (complainant) against Sangita Gupta (accused) in respect of one cheque bearing no. 582197 dated 02/11/2018, amounting to Rs. 4, 45,000/-, drawn on Indian Overseas Bank, Karol Bagh, New Delhi-11005 (hereinafter called "the cheque in question"). The facts of the case, as alleged by the complainant, are as follows:
a. That the complainant entered into lease rent deed with the accused and her husband for the entire first and second floor of the property bearing no. 15A/59, WEA, Karol Bagh, New Delhi owned by the accused and her husband namely Ajay Kumar Gupta by way of an agreement bearing certificate no. IN-DL04176001424282P issued on 12/07/2017. Further that on 29/08/2018 complainant informed the accused person that the rented premises shall be vacated on or before 31/10/2018 and on 31/10/2018 the complainant handed over the vacant possession of the rented floors to the accused and her husband. Further that complainant had deposited a sum of Rs. 4, 45,000/- as a security amount by way of cheque bearing no. 000491 dated 13/07/2017 drawn on ICICI Bank with the accused and which was duly acknowledged by the accused and her husband.
CC No. 706/2019 M/s Ritas Heritage Vs Sangita Gupta 2/15 Further that upon taking back the vacant possession of the rented premises on 31/10/2018 and after full satisfaction of the accused and her husband, the accused had issued the cheque in question in discharge of the liability for the refund of the above mentioned security amount to the complainant. However, same was dishonoured for reason "payment stopped by drawer" vide memo dated 09/11/2018.
b. Further despite service of legal demand notice dated 08/12/2018 to the accused, accused has failed to make the payment and hence the present complaint.
PROCEEDINGS BEFORE THE COURT-
2. Pre-summoning evidence was led by the complainant. On prima facie case being made out against the accused, the cognizance was taken, accused was summoned for an offence punishable under Section 138 of the Act.
3. Accused entered appearance. The particulars of the offence and substance of accusation as per provisions of Section 251 CrPC was explained to the accused on 10/01/2020 to which accused pleaded not guilty and claimed trial. Accused admitted knowing the complainant and further admitted her signature on the cheque in question and filling of all the particulars on the cheque in question. Accused further admitted receiving of legal demand notice. In her defence recorded on the same day, accused stated "The complainant was a tenant of my CC No. 706/2019 M/s Ritas Heritage Vs Sangita Gupta 3/15 commercial premises. The complainant was to vacate the property in July, 2018 however he did not do so. Complainant's security amount with me was around Rs. 10 lacs. The complainant had asked me to furnish the cheque in question toward refund of the amount. After the complainant vacated the property his electricity bills were pending. Further the property was also defaced".
4. Thereafter, complainant led his evidence.
Complainant examined himself as CW1 and adopted his pre-summoning evidence as post summoning evidence which is Ex. CW1/1. He relied upon the following documents: -
Mark A: copy of agreement Ex. CW1/B: Original cheque no. 582197 Ex. CW1/C: Return memo dated 09/11/2018 Ex. CW1/D: Legal notice dated 08/12/20189 Ex. CW1/E: postal receipt Ex. CW1/F: courier receipt Ex. CW1/G: Reply to the legal notice The CW1 in his affidavit reiterated the contents of the complaint. CW1 was cross-examined by the Ld. Counsel for the accused on 04/03/2023. Thereafter, CW1 was discharged and CE was closed on the same day.
5. Thereafter, statement of accused was recorded under Section 313 CrPC on 26/05/2023 where all the incriminating evidence was put to the accused. The accused admitted her signature on the cheque in question. CC No. 706/2019 M/s Ritas Heritage Vs Sangita Gupta 4/15 However, denied filling of any other particulars. The accused stated that the particulars on the cheque have been filled by her husband. Further accused admitted receiving of legal demand notice and that the address mentioned on the legal demand notice is correct. She reiterated her defense stating that "I admit my signature on Mark A. It is correct that I had issued the cheque in question for refund of the security deposit but I had given it on faith before the keys of the property were handed over by the accused and before we were satisfied of the condition of the premises. But on 02/11/2018 when we inspected the premises from outside, there was damaged to the property. Because of this, I stopped the payment of the cheque." The accused further stated that the complainant has failed to deposit the electricity charges and she has also filed case for damages against the complainant. Thereafter, accused did not wish to lead defence evidence and matter was fixed for final arguments.
6. Final arguments were advanced by both the parties. I have heard counsel for both the parties, perused the record and have gone through the relevant provisions of the law.
INGREDIENTS OF THE OFFENCE AND DISCUSSION-
7. At this stage, it would be apposite to discuss the relevant provisions of law in order to ascertain the legal standard required to be met by both the parties. In order to establish an offence under Section 138 of Negotiable Instrument Act, the complainant must prove the following ingredients:-
CC No. 706/2019 M/s Ritas Heritage Vs Sangita Gupta 5/15 First Ingredient: The cheque was drawn by a person on an account maintained by him for payment of money and the same is presented for payment within a period of 3 months from the date on which it is drawn or within the period of its validity;
Second Ingredient: The cheque was drawn by the drawer for discharge of any legally enforceable debt or other liability;
Third Ingredient: The cheque was returned unpaid by the bank due to either insufficiency of funds in the account to honour the cheque or that it exceeds the amount arranged to be paid from that account on an agreement made with that bank;
Fourth Ingredient: A demand of the said amount has been made by the payee or holder in due course of the cheque by a notice in writing given to the drawer within thirty days of the receipt of information of the dishonour of cheque from the bank;
Fifth Ingredient: The drawer fails to make payment of the said amount of money within fifteen days from the date of receipt of notice.
APPRECIATION OF EVIDENCE-
8. The accused can only be held guilty of the offence under Section 138 NI Act if all of the above-mentioned ingredients are proved by the complainant-
CC No. 706/2019 M/s Ritas Heritage Vs Sangita Gupta 6/15
(i) There is no dispute qua the fact that the cheque in question (Ex. CW1/B) was drawn by the accused on the account maintained by her and the same was presented for encashment within its validity period. Thus, first ingredient stands proved.
(ii) It is also not disputed that the cheque in question was dishonoured due to "payment stopped by drawer". Thus, third ingredient stands proved.
(iii) With respect to the fourth ingredient, the accused has admitted receiving the legal notice. Thus, the fourth ingredient also stands proved.
(iv) There is no dispute either with respect to fifth ingredient. As such, the first, third, fourth and fifth ingredients of the offence under section 138 NI Act stands proved against the accused.
9. Thus, the only remaining ingredient of the offence under Section 138 NI Act and which is the main bone of contention between both the parties is that whether there was any legally enforceable debt or liability of the accused towards the complainant. In the present case, the issuance of the cheque in question is not denied and the accused has admitted her signature on the cheque. As per the scheme of the NI Act, once the accused admits signature on the cheque in question, certain presumptions are drawn in favour of the complainant, which result in shifting of onus. Section 118(a) of the NI Act lays down the presumption that every negotiable instrument was made or drawn for consideration. Another presumption is enumerated in Section 139 of NI Act. This provision lays down the CC No. 706/2019 M/s Ritas Heritage Vs Sangita Gupta 7/15 presumption that the holder of the cheque received it for the discharge, in whole or part, of any debt or other liability.
10. The combined effect of these two provisions is a presumption that the cheque was drawn for consideration and given by the accused for the discharge of debt or other liability. Both the sections use the expression "shall", which makes it imperative for the court to raise the presumptions, once the foundational facts required for the same are proved. Reliance is placed upon the judgment of the Hon'ble Supreme Court, Hiten P. Dalal vs. Bratindranath Banerjee (2001) 6 SCC 16.
11. Further, it has been held by a three-judge bench of the Hon'ble Apex Court in the case of Rangappa vs. Sri Mohan (2010) 11 SCC 441 that the presumption contemplated under Section 139 of NI Act includes the presumption of existence of a legally enforceable debt. Once the presumption is raised, it is for the accused to rebut the same by establishing a probable defence. The principles pertaining to the presumptions and the onus of proof were recently summarized by the Hon'ble Apex Court in Basalingappa vs. Mudibasappa (2019) 5 SCC418 as under:
"25. We having noticed the ratio laid down by this Court in the above cases on Section 118(a) and 139, we now summarize the principles enumerated by this Court in the following manner:
25.1. Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that CC No. 706/2019 M/s Ritas Heritage Vs Sangita Gupta 8/15 the cheque was for the discharge of any debt or other liability.
25.2. The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
25.3. 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.
25.4. 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.
25.5. It is not necessary for the accused to come in the witness box to support his defence."
12. Section 139 NI Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. The reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139 NI Act, the standard of proof for doing so is that of CC No. 706/2019 M/s Ritas Heritage Vs Sangita Gupta 9/15 '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 liability, the prosecution can fail. The accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own.
13. As discussed herein above, under Section 139 NI Act strong rebuttable presumptions in favor of the complainant arises but same can be rebutted by the accused by way of credible defence.
DEFENCE OF THE ACCUSED:-
14. In the present matter the accused has admitted the rent agreement and issuing of the cheque in question for refund of the security amount to the complainant however, the accused has taken a defence that the cheque in question was issued before inspecting the rented premises and on inspection premises were found to be damaged and complainant had not paid the electricity and water charges as well.
ARGUMENTS BY BOTH THE PARTIES:-
15. It was argued by the Ld. Counsel for accused that the cheques in question was given before the inspection of property and on inspection property was found to be damaged. Further that civil suit for recovery was filed by the accused against the complainant and same has been CC No. 706/2019 M/s Ritas Heritage Vs Sangita Gupta 10/15 decreed by the Ld. Trial court in her favour. Hence, there was no legally recoverable debt/liability against the accused as on the date of presentment of cheque in question and prayed for acquittal.
16. Per contra argued by the Ld. Counsel for complainant that the accused has admitted his signatures on cheque in question and filling of all the particulars. That the execution of the said decree which was passed by civil court has been stayed and matter is pending before the appellate court. That accused failed lead any defence evidence despite opportunity given. It is further argued by the Ld. Counsel for the complainant that there is nothing on record to rebut the presumption raised against the accused and prayed for conviction.
COURT'S OBSERVATIONS:-
17. In the present matter, the case of complainant is that on 31/10/2018 the complainant handed over the vacant possession of the rented floors to the accused and her husband. Further that upon taking back the vacant possession of the rented premises on 31/10/2018 and after full satisfaction of the accused and her husband, the accused had issued the cheque in question in discharge of the liability for the refund of the security amount to the complainant, Ex. CW1/B. To prove his case, the complainant got himself examined as CW1 and same fact was reiterated by the complainant in the evidence filed by way of an affidavit which is Ex. CW1/1. Testimony of CW1 remained unshaken as nothing contradictory came out in the cross-examination.
CC No. 706/2019 M/s Ritas Heritage Vs Sangita Gupta 11/15
18. On the other hand, accused has admitted his signatures on the cheque in question, Ex. CW1/B. The NI Act provides for two presumptions, one under Section 118 of the Act, which directs that it shall be presumed, until the contrary is proved, that every negotiable instrument was made or drawn for consideration. Further, under Section 139, which stipulates that unless the contrary is proved, it shall be presumed that the holder of the cheque received the cheque for the discharge of, whole or part of any debt or liability. It is a settled law that once accused admits his signatures on the cheque, the above-mentioned presumptions are raised in favour of the complainant and burden falls on the accused to rebut the said presumptions.
19. The accused has taken defence that the cheque in question was issued to the complainant before inspection of the rented premises. The burden to prove the same was on the accused. However, accused has failed to bring any documentary or oral evidence on record to prove the same. On the other hand complainant has placed on record copy of lease-rent agreement deed, which is Mark A, and as argued by the Ld. Counsel for complainant, clause 19 of the rent agreement (Mark A) shows that the cheque for refund of security amount was issued by the accused in favour of the complainant, only after full satisfaction and taking back the vacant possession of the rented premises.
20. Hence, it is not in dispute that the accused had issued the cheque in question in discharge of the liability towards the complainant for refund of security amount. It was argued on behalf of the accused that the complainant had damaged the premises and therefore she stopped the CC No. 706/2019 M/s Ritas Heritage Vs Sangita Gupta 12/15 payment and that recovery civil suit was filed by the accused against the complainant and same has been decreed by the Ld. Trial court in her favour and certified copy of civil suit which is CW1/D1 and certified copy of decree which is CW1/D2 was filed on record. Per contra it was argued on behalf of the complainant that the execution of the said decree has been stayed and matter is pending before the appellate court. Further it is a settled law that the proceedings under section 138 NI Act are not compensatory in nature and rather punitive in nature. Proceedings u/s 138 NI Act are not recovery proceedings. The other civil proceedings related to the same cheque in dispute do not in any manner impact the proceedings u/s 138 NI Act.
21. Thus, accused has failed to place any oral or documentary evidence on record to prove her innocence. Here, it would be apposite to refer to the judgment of Hon'ble Supreme Court in Kumar Exports vs. Sharma Carpets - (2009) 2 SCC 513, wherein it was held that "bare denial of the passing of the 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, 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." In the present case, apart from bald CC No. 706/2019 M/s Ritas Heritage Vs Sangita Gupta 13/15 assertions, there is nothing on record to show that the accused is not liable to pay the cheque amount as alleged by the complainant.
22. In the present case, the accused has chosen not to step into the witness box to lead any evidence to rebut the presumptions against her and to prove her innocence. In a case titled as Sumeti Vij v. M/s Paramount Tech Fab Industries Criminal Appeal No. 292 of 2021, the hon'ble Division Bench of Apex Court has observed that "mere statement under Section 313 Code of Criminal Procedure, 1973, without any additional evidence to rebut the statutory presumption under Section 139 Negotiable Instruments Act, 1881, cannot absolve the accused of the charges under Section 138 of the Act. The statement of the accused recorded under Section 313 of the Code is not substantive evidence of defence, but only an opportunity to the accused to explain the incriminating circumstances appearing in the prosecution case of the accused." In the present case accused failed to lead DE despite opportunity given.
23. Therefore, from the foregoing discussions, it is clear that the accused has not led any such cogent evidence so as to rebut presumption of existence of a legally enforceable debt in favor of the complainant. There is nothing coming out in the cross-examination of the complainant that would support the case of the accused. As such, the court finds that the accused has not been able to prove any probable defence and has failed to rebut the presumption raised under Section 118/139 of the NI Act, and thus, the second CC No. 706/2019 M/s Ritas Heritage Vs Sangita Gupta 14/15 ingredient of the offence under Section 138 NI Act stands proved.
24. Therefore, the complainant has been able to prove all the ingredients of the offence under Section 138 NI Act beyond reasonable doubt. It is evident that the complainant has been able to prove that the cheque in question, i.e., cheque bearing no. 582197 dated 02/11/2018, amounting to Rs. 4, 45,000/-, drawn on Indian Overseas Bank, Karol Bagh, New Delhi-11005, Ex. CW1/B, was issued in discharge of legally recoverable liability owed to the complainant by the accused. The complainant has been able to prove his case beyond reasonable doubt.
FINAL DECISION:-
25. Thus, Accused Smt. Sangita Gupta is convicted for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881. Let the accused be heard separately on quantum of sentence. A copy of the judgment be given free of cost to the convict.
DIVYA Digitally signed
by DIVYA GUPTA
GUPTA Date: 2024.07.26
16:31:28 +0530
Announced in open court (Divya Gupta)
in the presence of convict Judicial Magistrate First Class on
19.07.2024 (NI Act)-05, (C)/ THC/Delhi
19.07.2024
CC No. 706/2019 M/s Ritas Heritage Vs Sangita Gupta 15/15