Delhi District Court
In Compliance Of Circular No. ... vs Unknown on 7 November, 2012
:1:
IN THE COURT OF SH. JAY THAREJA, MM03, NEW DELHI DISTRICT, PATIALA
HOUSE COURTS, NEW DELHI.
Presided by : Mr Jay Thareja, DJS
C.C. No: 168/1/12
Unique Case ID No. 02403R060252005
Sh. Rakesh Rajora
S/o Sh. R. N.Rajora,
R/o H. No. 163, Gali No. 6, Amrita PuriB,
East of Kailash, New Delhi.
.....Complainant
Versus
Sh. Shankar Raj
S/o Sh. Mange Ram,
Hero Meat Shop,
A17, Dayanand Colony,
Lajpat Nagar, New Delhi. ..... Accused
COMPLAINT UNDER SECTION 138 OF THE NEGOTIABLE INSTRUMENTS ACT, 1881
DATE OF INSTITUTION : 17.11.2005
DATE OF ARGUMENTS : 31.10.2012
DATE OF DECISION : 07.11.2012
JUDGMENT
1. In compliance of Circular no. 1770/44749778 F.3(4)MM/Gaz./2012 dated 29.08.2012 issued by the District & Sessions Judge, Delhi, the present case was received by C.C. No: 168/1/12 :2: way of transfer from the Court of Ms. Mona Tardi Kerketta, Ld. MM, Patiala House Courts, New Delhi, on 13.09.2012. It is being disposed off, in compliance of the said Order.
2. The present case has originated from a complaint filed under Section 138 of the Negotiable Instruments Act, 1881 (henceforth 'The NI Act, 1881') by the complainant, Sh. Rakesh Rajora against the accused, Sh. Shankar Raj. As per the complaint, the case of the complainant against the accused is that the accused had approached the complainant and sought a friendly loan of Rs. 3,00,000/. Keeping in view, the association with accused and the assurances made by the accused, the complainant had advanced the loan of Rs. 3,00,000/ to the accused and taken 6 cheques of Rs. 50,000/ each viz. cheque no. 497087 dated 27.11.2004, cheque no. 497086 dated 28.11.2004, cheque no. 497082 dated 13.04.2005, cheque no. 497083 dated 13.04.2005, cheque no. 497084 dated 26.04.2005 and cheque no. 497085 dated 28.04.2005 from the accused. Initially, the complainant had presented 2 cheques viz. cheque no. 497087 dated 27.11.2004 and cheque no. 497086 dated 28.11.2004 for encashment. They were returned unpaid by the banker of the accused with the remarks 'insufficient funds'. Thereafter, the complainant had presented the remaining 4 cheques viz. cheque no. 497082 dated 13.04.2005, cheque no. 497083 dated 13.04.2005, cheque no. 497084 dated 26.04.2005 and cheque no. 497085 dated 28.04.2005 for encashment. The said cheques were also returned unpaid by the banker of the accused with the remarks 'insufficient funds'. Upon return of the said cheques, the complainant had sent the legal demand notice dated 21.09.2005 to the accused through registered post with acknowledgment due and UPC. However, despite service of the legal demand notice dated 21.09.2005, the accused did not pay the sum of Rs. 2,00,000/ to the complainant. According C.C. No: 168/1/12 :3: to the complainant, the accused is liable to be tried and convicted of the offense described under Section 138 because no payment was made by the accused within 15 days from the receipt of the legal demand notices dated 21.09.2005.
3. A perusal of the Court record shows that the present complaint was received by way of assignment on 17.11.2005. On the basis of the presummoning evidence led by the complainant on 17.11.2005, the Ld. Predecessor Court had taken cognizance of the offense under Section 138 of the Negotiable Instruments Act, 1881 and summoned the accused. Upon service of summons, the accused had entered appearance and was granted bail. Thereafter, on 30.11.2006, a notice of accusation under Section 251 of the Code of Criminal Procedure, 1973 (henceforth 'Cr.P.C.') was framed against the accused by the Ld. Predecessor Court, whereby the accused was charged with the commission of the offense punishable under Section 138 of the NI Act, 1881 in respect of cheques viz. cheque no. 497082 dated 13.04.2005, cheque no. 497083 dated 13.04.2005, cheque no. 497084 dated 26.04.2005 and cheque no. 497085 dated 28.04.2005. The accusation was read over and explained to the accused. The accused had pleaded not guilty and claimed trial.
4. During trial, the complainant examined himself as CW1 Sh. Rajesh Rajora. In examination in chief, the complainant tendered in evidence his affidavit, Ex.P1 and documents, Ex.CW1/A1 to Ex.CW1/F and document Mark X. In cross examination, the complainant inter alia stated that he knew the accused for the past 20 years as he was a tenant in the shop of his father since 1990; that he used to attend family functions at the house of the accused; that he had given the loan by way of cash, 3 days after the demand; C.C. No: 168/1/12 :4: that he had Rs.1516 lacs in cash at that time; that the loan was given at his home in Amrit Puri Gari, East of Kailash; that he was alone in his house at the time of giving the loan; that the accused had promised to return the loan in 45 months with interest of 1% per annum; that the cheques had been given on separate dates; that the cheques were filled up by him as the accused had a fracture in his hand; that one of his friend, Gautam Lumba was present at the time of handing over of one cheque, Ex.CW1/A1; that the said cheque was filled up by his friend Gautam Lumba; that the cheques Ex.CW1/A2 to Ex.CW1/A4 were filled up by him, but signed by the accused; that the interest paid by the accused was reflected in his accounts and that he had received the reply of notice issued under Section 138 of NI Act, 1881, Ex.CW1/DX1. The complainant denied that he had taken 10 blank cheques from the accused on the pretext that they will be invested in property; that some of the cheques were signed by the accused and some were not; that the signatures on the cheques, Ex.CW1/A1 to Ex.CW1/A4 were not of the accused; that the accused had no liability towards him and that instead of returning the cheques, he had misused the cheques. After being examined and cross examined once, the complainant tendered in evidence, an additional affidavit, Ex.CW1/X1 and income tax returns for the year 2005, 2006, 2007 and 2008. In cross examination qua the said affidavit and documents, the complainant stated that he was in the property business since 2000; that the loan was given in 2004; that the Ex.CW1/X was prepared in his presence at the premises of the accused in Dayanand Colony at 12 noon; that he did not remember who had brought the stamp paper of Ex.CW1/X; that the witnesses to Ex.CW1/X were known to him; that the documents Ex.CW1/X was notarized at Patiala House Courts at 34 PM; that the accused and his wife were not present at the time of the notarization and that he had not served any notice or filed any complaint visavis the C.C. No: 168/1/12 :5: cheques, Ex.CW1/Z1 and Ex.CW1/Z2. The complainant denied that he had taken certain signed and unsigned cheques on the assurance of buying properties on behalf of the accused; that he had filed the present case on account of non payment of commission by the accused qua a dealing with the land duty of the accused; that Ex.CW1/X was signed under threat by the accused and his wife and that he had not filed any complaint visavis the cheques, Ex.CW1/Z1 and Ex.CW1/Z2 because they had been given without any consideration.
5. During examination under Section 313 of Cr.P.C., the accused admitted that he had given the cheques, Ex.CW1/A1 to Ex.CW1/A4. However, the accused qualified the admission by stating that the same were not signed by him. The accused further admitted that he had received the legal demand notice, Ex.CW1/C and clarified that he had not made payment because the cheques were given without consideration.
6. In support of his defense, the accused examined DW1 Sanjay and DW2 Padam Singh Rawat. In examination in chief DW1 Sanjay stated that he knew the accused for the past 1213 years as he was supplying meat at the shop of the accused; that he also knew the complainant; that in his presence, in the year 200405 the accused had handed over a cheque book to the complainant in pursuance of transaction regarding a flat of Rs. 810 lacs and that, at the time of said transaction, the accused and the complainant had good terms. In cross examination DW1 Sanjay, inter alia stated that he did not know the details of the cheques that were in the cheque book given by the accused to the complainant; that he did not know if the cheques were signed or unsigned because the cheque book was closed; that he did not C.C. No: 168/1/12 :6: remember the date, time and month of the transaction; that he had been supplying meat to the accused from the mandi and that he had no business record of his business with the accused. DW1 Sanjay denied that no handing over of cheque book had taken place in his presence; that he had no business association with the accused and that he was deposing falsely at the instance of the accused.
7. DW2 Padam Singh Rawat was examined twice by the accused. At the first instance i.e. on 11.01.2012, he appeared and merely tendered in evidence, statement of account (A/C No. 5375), Ex.DW2/1, statement of account (A/C No. 90852010022706), Ex.DW2/2, specimen signature card, Ex.DW2/3 and photocopy of issued cheque book register, Ex.DW2/4. After examination of DW2 P. S. Rawat on 11.01.2012, the accused had filed an application for sending specimen signature card, Ex.DW2/3 and the cheques, Ex.CW1/A1, Ex.CW1/A2, Ex.CW1/A3 and Ex.CW1/A4 for comparison of signatures. However, for reasons best known to the accused, the application was withdrawn on 10.02.2012 and the accused had prayed that DW2 P. S. Rawat be summoned again for examination. At the second instance i.e. on 30.08.2012, DW2 Padam Singh Rawat tendered in evidence, specimen signature card, Ex.DW2/1 (OSR) of accused Shankar Raj and stated that he could identify the signatures of the accused Shankar Raj; that the signatures of the accused Shankar Raj on the specimen signature card differed from the signatures on the cheques, Ex.CW1/A1 to Ex.CW1/A4 and that the signatures of the accused on the cheque, Ex.CW1/A1 were cut. During cross examination, DW2 Padam Singh Rawat admitted that he had not done any course in comparing handwritings and that in the dishonored memos, Ex.CW1/B1 to Ex.CW1/B4, the cheques were not stated to be dishonored on account of difference in the C.C. No: 168/1/12 :7: signatures. DW2 P. S. Rawat denied that he had colluded with the accused and that the signatures on the cheques, Ex.CW1/A1 to Ex.CW1/A4 were of the accused. After examination of DW2 Padam Singh Rawat on 30.08.2012, the defence evidence was closed.
8. I had heard Sh. B. S. Arora, Ld. Advocate for the complainant and Sh. Sanjeev Chaudhary, Ld. Advocate for the accused on 19.10.2012 and 31.10.2012. In support of the case of the complainant, the Ld. Advocate for complainant had made a three fold submission. At the first instance, the Ld. Advocate had drawn reference to the reply, Ex.CW1/DX1 given by the accused to the legal demand notice, Ex.CW1/C sent by the complainant and pointed out that in the said reply, the accused had categorically stated that he had handed over blank signed cheques to the complainant. Thereafter, the Ld. Advocate had drawn reference to Section 20 of the NI Act, 1881 and submitted that by virtue of the said provision, the complainant had the statutory authority to fill up the cheques and present them for encashment. At the second instance, the Ld. Advocate had drawn reference to the dishonored memos, Ex.CW1/B1 to Ex.CW1/B8 and pointed out that the bank had not dishonored the impugned cheques on account of forged or difference in signatures. At the third instance, the Ld. Advocate had submitted that the accused had voluntarily withdrawn the application for sending the cheques and specimen signature card to FSL and had thereby tacitly admitted that he had signed the impugned cheques. On the combined strength of the aforesaid submissions, the Ld. Advocate had concluded by stating that the accused had been unable to prove his defense and rebut the presumptions provided under Section 118(a) and therefore, the accused is liable to be convicted for the offense under Section 138 of the NI Act, 1881. C.C. No: 168/1/12 :8:
9. In support of the defence of the accused, the Ld. Advocate for the accused had drawn reference to the cross examination of the complainant and submitted that the complainant had not given any clear answer regarding the date of grant of the alleged loans and that the complainant had not examined his friend Gautam Lumba, in front of whom, the cheques were given. Thereafter, the Ld. Advocate had drawn reference to the testimony of DW2 P. S. Rawat recorded on 30.08.2012 and submitted that it proves the substantive defence of the accused that he had not issued the impugned cheques, Ex.CW1/1 to Ex.CW1/4 and that the same were misused by the complainant.
10. After hearing the Ld. Advocates for the parties and perusing the record of the Court file, I find that the decision in this case hinges on the merit of the substantive defence taken by the accused that he had not issued the cheques, Ex.CW1/A1 to Ex.CW1/A4. In order to prove the said defence the accused has primarily examined DW2 P. S. Rawat. In his examination on 30.08.2012, he has merely stated that the signatures of the accused on the specimen signature card do not match with the signatures on the cheques, Ex.CW1/A1 to Ex.CW1/A4. The said witness has nowhere stated that the signatures on the cheques Ex.CW1/A1 to CW1/A4 are not in the handwriting of the accused. A mere difference in signatures does not mean that the accused had not signed the cheques, Ex.CW1/A1 to CW1/A4. The accused could have proved the fact of not signing the said cheques by examining a private handwriting expert or pursuing the application for sending the cheques and the specimen signature card to FSL, Rohini. Since the accused has not exercised any of these options, merely on the basis of the aforesaid testimony of DW2 P. S. Rawat, this Court cannot conclude that the cheques, Ex.CW1/A1 to Ex.CW1/A4 have not been issued by the C.C. No: 168/1/12 :9: 1 accused. Thus, I find that the accused had issued the cheques, Ex.CW1/A1 to Ex.CW1/A4 to the complainant.
11. In respect of the dishonor of the cheques, Ex.CW1/A1 to Ex.CW1/A4, I find that the testimony of the complainant supported by the dishonor memos, Ex,CW1/B4 to CW1/B8 proves that the said cheques were dishonored by the banker of the accused upon presentation by the banker of the complainant.
12. In respect of the service of the legal demand notice, Ex.CW1/C on the accused, I find that during trial and during statement under Section 313 of CrPC, the accused has not denied that he had received the said legal demand notice, Ex.CW1/C and sent the reply, Ex.CW1/DX1 to the complainant. Thus, it stands proved that the accused had been served with the legal demand notice, Ex.CW1/C.
13. In respect of the substantive defense raised by the accused that he had not taken any loan from the complainant, I find that the decision thereon depends on the answer to the following questions:
(a) Whether the accused has rebutted the presumptions provided under Section 118(a) and Section 139 of the NI Act, 1881?
(b) If yes, whether the complainant has been able to establish beyond reasonable doubt that the accused had committed the 1 In this context, it is relevant to note that the falsity of the defence taken by the accused is also exposed by his admission in the reply, Ex.CW1/DX1 to the effect that he had handed over blank signed cheques to the complainant and not unsigned cheques.
C.C. No: 168/1/12 :10: offence described under Section 138 of the NI Act, 1881?
14. In order to adjudicate on the first question, I find it expedient to refer to the law laid down by the Hon'ble Supreme Court of India in Bharat Barrel and Drum Manufacturing Company v. Amin Chand Pyarelal, (1999) 3 SCC 3, Krishna Janardhan Bhat v Dattatraya G. Hegde, AIR 2008 SC 1325 and Rangappa v Sri Mohan, AIR 2010 SC 1898.
15. In Bharat Barrel and Drum Manufacturing Company v Amin Chand Pyarelal, (1999) 3 SCC 35, the Hon'ble Supreme Court of India has observed, "Upon consideration of various judgments as noted hereinabove, the position of law which emerges is that once execution of the promissory note is admitted, the presumption under Section 118(a) would arise that it is supported by a consideration. Such a presumption is rebuttable. The defendant can prove the nonexistence of a consideration by raising a probable defence. If the defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the plaintiff who will be obliged to prove it as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument. The burden upon the defendant of proving the nonexistence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies. In such an event, the plaintiff is entitled under law to rely upon all the evidence led in the case including that of the plaintiff as well. In case, where the defendant fails to discharge the initial onus of proof by showing the nonexistence of the consideration, the plaintiff would invariably be held entitled to the benefit of presumption arising under Section 118(a) in his favour. The court may not insist upon the defendant to disprove the existence of consideration by leading direct C.C. No: 168/1/12 :11: evidence as the existence of negative evidence is neither possible nor contemplated and even if led. is to be seen with a doubt..."
16. In Krishna Janardhan Bhat v Dattatraya G. Hegde, AIR 2008 SC 1325, the Hon'ble Supreme Court of India has observed, "20. Indisputably, a mandatory presumption is required to be raised in terms of Section 118(b) and Section 139 of the Act. Section 13(1) of the Act defines "negotiable instrument" to mean "a promissory note, bill of exchange or cheque payable either to order or to bearer."
Section 138 of the Act has three ingredients, viz. :
(i) that there is a legally enforceable debt;
(ii) that the cheque was drawn from the account of bank for discharge in whole or in part of any debt or other liability which presupposes a legally enforceable debt; and
(iii) that the cheque so issued had been returned due to insufficiency of funds.
21. The proviso appended to the said section provides for compliance of legal requirements before a complaint petition can be acted upon by a court of law. Section 139 of the Act merely raises a presumption in regard to the second aspect of the matter.
Existence of legally recoverable debt is not a matter of presumption under Section 139 of the Act. It merely raises a presumption in favour of a holder of the cheque that the same has been issued for discharge of any debt or other liability.
22. The courts below, as noticed hereinbefore, proceeded on the basis that Section 139 raises a presumption in regard to existence of a debt also. The courts below, in our opinion, committed a serious error in proceeding on the basis that for proving the defence the accused is required to step into the witness box and unless he does so he would not be discharging his burden. Such an approach on the part of the courts, we feel, is not correct.
23.An accused for discharging the burden of proof placed upon him under a statute need not examine himself. He may discharge his C.C. No: 168/1/12 :12: burden on the basis of the materials already brought on records. An accused has a constitutional right to maintain silence. Standard of proof on the part of an accused and that of the prosecution in a criminal case is different.
...
25. Furthermore, whereas prosecution must prove the guilt of an accused beyond all reasonable doubt, the standard of proof so as to prove a defence on the part of an accused is "preponderance of probabilities". Inference of preponderance of probabilities can be drawn not only from the materials brought on records by the parties but also by reference to the circumstances upon which he relies.
26.A statutory presumption has an evidentiary value. The question as to whether the presumption whether stood rebutted or not, must, therefore, be determined keeping in view the other evidences on record. For the said purpose, stepping into the witness box by the appellant is not imperative. In a case of this nature, where the chances of false implication cannot be ruled out, the background fact and the conduct of the parties together with their legal requirements are required to be taken into consideration.
...
33. But, we may at the same time notice the development of law in this area in some jurisdictions. The presumption of innocence is a human right. [See Narender Singh and Ann v. State of M.P. (2004) 10 SCC 699; Ranjitsing Brahmajeetsing Sharma v. State of Maharashtra and Anr. (2005) 5 SCC 294 and Rajesh Ranjan Yadav @ Pappu Yadav v. CBI through its Director (2007) 1 SCC 70] Article 6(2) of he European Convention on Human Rights provides : "Everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law". Although India is not bound by the aforementioned Convention and as such it may not be necessary like the countries forming European countries to bring common law into land with the Convention, a balancing of the accused rights and the interest of the society is required to be taken into consideration. In India, however, subject to the statutory interdicts, the said principle forms the basis of criminal jurisprudence. For the aforementioned purpose the nature of C.C. No: 168/1/12 :13: the offence, seriousness as also gravity thereof may be taken into consideration. The courts must be on guard to see that merely on the application of presumption as contemplated under Section 139 of the Negotiable Instruments Act, the same may not lead to injustice or mistaken conviction. It is for the aforementioned reasons that we have taken into consideration the decisions operating in the field where the difficulty of proving a negative has been emphasized. It is not suggested that a negative can never be proved but there are cases where such difficulties are faced by the accused e.g., honest and reasonable mistake of fact. In a recent Article "The Presumption of Innocence and Reverse Burdens : A Balancing Duty" published in [2007] CLJ (March Part) 142 it has been stated : "In determining whether a reverse burden is compatible with the presumption of innocence regard should also be had to the pragmatics of proof. How difficult would it be for the prosecution to prove guilt without the reverse burden? How easily could an innocent defendant discharge the reverse burden? But courts will not allow these pragmatic considerations to override the legitimate rights of the defendant. Pragmatism will have greater sway where the reverse burden would not pose the risk of great injustice where the offence is not too serious or the reverse burden only concerns a matter incidental to guilt. And greater weight will be given to prosecutorial efficiency in the regulatory environment."
34. We are not oblivious of the fact that the said provision has been inserted to regulate the growing business, trade, commerce and industrial activities of the country and the strict liability to promote greater vigilance in financial matters and to safeguard the faith of the creditor in the drawer of the cheque which is essential to the economic life of a developing country like India. This, however, shall not mean that the courts shall put a blind eye to the ground realities. Statute mandates raising of presumption but it stops at that. It does not say how presumption drawn should be held to have rebutted. Other important principles of legal jurisprudence, namely presumption of innocence as human rights and the doctrine of reverse burden introduced by Section 139 should be delicately balanced. Such C.C. No: 168/1/12 :14: balancing acts, indisputably would largely depend upon the factual matrix of each case, the materials brought on record and having regard to legal principles governing the same."
17. In Rangappa v Sri Mohan, AIR 2010 SC 1898, the Hon'ble Supreme Court of India has observed, "In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this is in view, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of 'preponderance of probabilities'..."
18. Upon examining the facts and circumstances of the present case, in light of the law laid down in the aforesaid judgments, I find that in the present case, the accused has failed to rebut the presumptions provided under Section 118(a) and Section 139 of the NI Act, 1881. The accused has not led any credible evidence to prove that the cheques, Ex.CW1/A1 2 to Ex.CW1/A4 were not issued in discharge of a civil liability. The first defence witness i.e. DW1 Sanjay has merely stated that a cheque book was handed over in his presence by the accused to the complainant. He did not know if the cheques were signed/filled or not. The second defence witness i.e. DW2 P. S. Rawat has merely stated the signatures on the cheques, Ex.CW1/A1 to Ex.CW1/A4 do not match with the signatures on the specimen signature card, Ex.DW2/1(OSR). He has not deposed that the signatures are not in the handwriting of the accused. In my view the testimonies of both these witnesses is gravely insufficient to rebut the presumptions provided under Section 118(a) and Section 139 of the NI Act, 1881.
2 It is relevant to note that the accused has not himself entered the witness box and denied the liability/taking of loan from the complainant.
C.C. No: 168/1/12 :15:
19. In respect of the second question identified in paragraph 13 of this Judgment, I find that none of the inconsistencies pointed out in the case of the complainant, by the Ld. Advocate for the accused, go to the root of the matter or hurt the foundation of the case of the complainant. Further, I find that through his cogent and consistent evidence, the complainant has succeeded in proving all the ingredients of the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 against the accused.
20. As a net result of the aforesaid analysis, the accused is convicted of the offense defined under Section 138 of the Negotiable Instruments Act, 1881 in respect of cheques, Ex.CW1/A1 to Ex.CW1/A4. A copy of this Judgment shall be provided free of cost to the convict. The convict shall be heard on the quantum of sentence on 20.11.2012 at 2.00 p.m. Announced in the Open Court (Jay Thareja) On 07.11.2012 MM03, New Delhi District New Delhi C.C. No: 168/1/12