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Meenu vs Shaheen Akhtar Page 1 Of 12 on 10 February, 2014

     IN THE  COURT  OF SH. APOORV SARVARIA, CIVIL JUDGE­I, NEW 
                    DELHI  DISTRICT,  NEW DELHI

C.C. No: 16/11
Unique Case ID No.02403R0098352011

Meenu
W/o Late Mr. Shamim Raza
R/o D­170, IInd Floor, DDA Flats, 
Kalkaji, New Delhi­110019. 
                                                                                    .....Complainant

                                                 Versus
Shaheen Akhtar
S/o Mr. Mehfooz Akhtar
R/o R­9, IIIrd Floor, 
Nafis Road, Near Hari Masjid,
Jamia Nagar, Okhla, 
New Delhi­110025. 
Also at: Madeena Jewellers,
161/1 Joga Bai, Batla House, 
New Delhi­110025.
                                                                                         .....Accused

                          COMPLAINT UNDER SECTION 138 OF THE 
                           NEGOTIABLE INSTRUMENTS ACT, 1881 

                                                                 Date of Institution: 09.05.2008
                                                          Date of Reserving Order: 19.08.2013 
                                                                  Date of Judgment:10.02.2014

                                            JUDGMENT

Brief facts

1. The brief facts of the present complaint filed U/s. 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as "NI Act") are that the complainant Ms. Meenu's husband had friendship with the accused. The accused is stated to have been in the business of construction of flats and also CC No. 16/11 Meenu Vs Shaheen Akhtar Page 1 of 12 running a jewellary shop in the name of M/s Madeena Jewellarers.

2. It is stated that in the month of January, 2006 the accused approached the complainant with proposal for investment in property business run by him which would earn huge profits and represented that if the complainant invests Rs. 10 lacs for a period of 21 months, then she would be able to earn Rs. 8 lacs over and above Rs. 10 lacs. Upon such inducement, the complainant is stated to have given Rs. 9,20,000/­ to the accused upon assurance of the accused that she will get Rs. 8 lacs over and above the principal amount.

3. It is further stated that the accused issued five post dated cheques as acknowledgment of the above said amount and assured the complainant that she need not encash these cheques as she will get the said amounts along with profits as assured. The details of the cheques are: cheque no. 1515 dated 25.09.2007 of Rs. 1,00,000/­, cheque no. 001509 dated 25.09.2007 for Rs. 1,00,000/­, cheque no. 001510 dated 25.09.2007 for Rs. 1,00,000/­, all drawn on IDBI Bank, New Friends Colony, New Delhi. The accused also issued cheque bearing no. 801133 dated 15.11.2007 for Rs. 5,00,000/­ and cheque bearing no. 976332 dated 25.11.2007 for Rs. 1,00,000/­, both drawn on Delhi State Cooperative Bank, Okhla, New Delhi.

4. It is stated that in September, 2007 the complainant sought return of the assured principal amount as well as other returns but the accused sought three months' time to make the payment stating that flats constructed by him in Shaheen Bagh area with the money of complainant could not be sold and as and when the same would be sold, he will return back the money with assured profits. However, in December, 2007 the accused again sought three months' time. The complainant showed her inability to give more time as one of the cheques was dated 10.08.2007 and it would have expired on 10.02.2008. Then the accused assured the complainant that he will make payment of the said CC No. 16/11 Meenu Vs Shaheen Akhtar Page 2 of 12 cheque before 10.02.2008 and the remaining payment up till 19.03.2008. It is stated that the husband of the complainant expired on 10.02.2008 and facing financial scarcity, the complainant approached the accused to make payment of at least the principal amount. The accused assured that the cheques will be cleared and told the complainant to present the cheques on 19.03.2008.

5. The complainant presented the said cheques (no. 976332, 001510, 801133 and 001509) but the same were returned unpaid with remarks "insufficient funds"

as per the return memo dated 19.03.2008. Thereafter, the complainant issued legal notice dated 02.04.2008 through registered AD and UPC. It is stated that despite service of the legal notice accused did not make the payment of the cheque amount within the prescribed period and gave reply dated 15.04.2008 to the legal notice. Therefore, it is stated that the accused is liable for the commission of the offence U/s. 138 of the NI Act.

Proceedings Before Court

6. The present complaint was received by way of assignment on 09.05.2008.

Summons were issued against the accused. The accused entered appearance and took bail and notice of accusation was framed against the accused on 14.07.2008 to which accused pleaded not guilty and claimed trial.

7. In support of her case, the complainant produced herself as CW1 who tendered her evidence by way of affidavit dated 09.05.2008 and relied on documents Ex.CW1/A to Ex.CW1/L. Thereafter, CW1 Ms. Meenu was cross­examined. The complainant also produced CW2 Sh. Deepak Sodhi, witness from State Bank of India, New Friends Colony who produced the certificate Ex. CW2/A and account statement of the complainant for 01.03.2008 to 31.03.2008 Ex. CW2/B, account opening form Ex. CW2/C and letter of complainant requesting the Bank to join her husband Ex. CW2/D and a certificate Ex.

CW2/E relating to permanent residence of the complainant. Thereafter CW2 Sh. Deepak Sodhi was cross examined and he produced the letter dated 02.01.2013 of the Branch Manager Ex. CW2/D1 as well as clear copies Ex. CW2/D2 and Ex. CW2/D3 during his cross examination after which the complainant closed her evidence.

8. During examination conducted U/s. 313 Cr.P.C, the accused stated that he never approached the complainant for any investment and never had any transaction with her. He further stated that the husband of the complainant Sh. Shamin Raza was his business partner in construction business and he used to give blank cheques to Sh. Shamim Raza for making payment in construction business for different purposes. He stated that the cheques in question are part of those cheques given to Shamim Raza in blank condition. He further stated that he did not receive any legal notice and never had any transaction with the complainant and the cheques were never issued to her.

9. In support of his defence, the accused produced himself as DW1 and DW1 Sh.

Shaheen Akhtar was examined in chief and thereafter cross examined. The accused also produced DW2 Sh. Firoz Ashraf who was examined in chief and thereafter cross examined. Thereafter, the defence evidence was closed.

Arguments of Advocates

10.Sh. Vishal Raj, Ld. Advocate for complainant submitted that presumption U/s.

139 of NI Act is running against the accused and the accused has not rebutted the said presumption. He further submitted that complaint filed by legal representative/wife of the payee of the cheque is maintainable. He further relied on the decisions in Rai Ram Kishore Vs Ram Prasad Mishir, AIR 1952 Allahabad 245 Full Bench, Padam Parshad Vs Lok Nath Ishwar Sarup, AIR 1964 Punjab 497 Full Bench, Chandra Babu Vs Ramani II (2004) BC 152 CC No. 16/11 Meenu Vs Shaheen Akhtar Page 4 of 12 (DB), Smt. Bhagava Vs Shri Kadaisiddeshwara Trading ILR 2004 KAR 367, Ashok Kumar Vs Dr. T.R. Bhageerathi, 2009 CRL. L.J. 221(Karnataka). On the other hand, Sh. K.Z. Khan, Ld. Advocate for accused stated that accused has rebutted the presumption by leading evidence in support of his defence. He further submitted that in respect of the cheque no. 801133, the complaint is not maintainable as the payee of the said cheque is Sh. Shamim Raza and not Meenu and the complainant i.e Meenu could not have filed the complaint in respect of the said cheque. In support of his submission, he relied upon M.S. Narayana Menon @ Mani v. State of kerala & Anr. (2006) 6 SCC 39.

11. This court has heard Ld. Advocates for the complainant as well as accused and perused the record.

Findings Complaint filed by legal representative of payee is maintainable.

12. As far as the contention of the accused that the complaint is not maintainable in respect of cheque no. 801133, Section 142 of the Negotiable Instruments Act states that the complaint can be filed either by the payee or holder in due course of the cheque.

13. In Chandra Babu Vs Ramani II (2004) BC 152 (DB), the Kerala High Court has after drawing reference to Sections 7, 9, 53, 75, 78 and other case laws on the entitlement of a legal representative to initiate legal action against the drawer held that the legal representative of the payee can file a complaint under Section 138 NI Act and observed:

"Apart from the above, in this case, complainant holds the cheque after the death of the payee as a legal heir and she is entitled to possess the same in her own name and in view of Section 53, being a legal heir, she is a holder in due course and he can get a full discharge. The party was CC No. 16/11 Meenu Vs Shaheen Akhtar Page 5 of 12 free to pay the amount to her and to get back the cheque. In view of Section 53 of the Act, legal heir of the payee or holder in due course can maintain a complaint under Section 138 of the Act".

(emphasis added)

14. In Smt. Bhagava Vs Shri Kadaisiddeshwara Trading ILR 2004 KAR 367, it was observed that:

"12. Having regard to the factual aspects and the settled principles of law in this regard, in the opinion of this Court, on the death of the payee, his legal heirs steps into the shoes of the payee for all practical purposes and such a person can also file and prosecute the complaint after completing the legal formalities. It is also necessary to mention that it would be incumbent upon the Complainant to prove that the Complainant is the legal representative of the deceased payee, in the event of accused disputing the same. In the case on hand, the payee had died and the wife of the payee, as the legal heir, had presented the cheque in question and on the cheque being dishonoured, legal notice had also been issued and thereafter, the proceedings had been initiated under Section 138 of the NI Act."

(emphasis added)

15. In view of the case laws cited above, the court finds that the contention of the accused that the complaint in respect of cheque no. 801133 is not maintainable as the complainant is not the payee cannot be sustained. The legal heir of the payee and in the present case, the wife of the payee of cheque no. 801133 has stepped into the shoes of her deceased husband and in view of Section 53 of the NI Act, the complainant Ms. Meenu, being the holder of the cheque has derived the title and the rights of holder in due course and was competent to file a criminal complaint under Section 142 of the NI Act. Non­receipt of legal notice.

16.As far as contention of accused that no legal notice was received, first of all the CC No. 16/11 Meenu Vs Shaheen Akhtar Page 6 of 12 reply of the accused dated 15.04.2008 Ex. CW1/5 is on record which has not been disputed. Neither the said reply is disputed by accused in cross examination of CW1 nor it has been disputed in the testimony of accused as defence witness. Therefore, the service of legal notice is deemed to be served. Even otherwise, the accused cannot raise this contention at this stage (See CC Alavi Haji v. Palapetty Muhammed & Anr. (2007) 6 SCC 555). Nature of Presumption raised under Section 139 of NI Act.

17. The signatures on the cheques no. 001509 dated 25.09.2007 for Rs. 1,00,000/­ Ex. CW1/D, cheque no. 001510 dated 25.09.2007 for Rs. 1,00,000/­ Ex. CW1/B, both drawn on IDBI Bank, New Friends Colony, New Delhi and cheque bearing no. 801133 dated 15.11.2007 for Rs. 5,00,000/­ Ex. CW1/C and cheque bearing no. 976332 dated 25.11.2007 for Rs. 1,00,000/­ Ex. CW1/A, both drawn on Delhi State Cooperative Bank, Okhla, New Delhi are admitted and, therefore, the execution of the cheques is not disputed. Hence, presumption U/s.139 of the NI Act is raised.

18.In Rangappa v. Sri Mohan AIR 2010 SC 1898 it was observed by the Hon'ble Supreme Court as under :

"14. In light of these extracts, we are in agreement with the respondent­claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat (supra) may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of CC No. 16/11 Meenu Vs Shaheen Akhtar Page 7 of 12 the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused/defendant cannot be expected to discharge an unduly high standard or proof. In the absence of compelling justifications, 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, the standard of proof for doing so is that of '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. As clarified in the citations, the accused can rely on the materials submitted by the complainant and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own. " (emphasis added)

19.In view of the decision in Rangappa laid down by the Supreme Court, the presumption raised under Section 139 of the NI Act is of legally enforceable debt or liability and it is for the accused to raise a probable defence to rebut the presumption.

Whether accused has rebutted the presumption.

20.The defence of the accused is that the cheques in question are part of those cheques given by the accused in blank condition to the husband of the complainant while they were in partnership so that payment can be made for different purposes in their construction business.

Implied authority of holder to complete the instrument.

21. As far as the defence of the accused that blank cheque bearing only his signature was given, the said defence cannot be raised in view of Section 20 of the NI Act as the accused had given an implied authority to fill up the contents of the cheque and complete the Negotiable Instrument. (See MOJJ Engineering System Ltd. Vs A.B. Sugars Ltd. 154 (2008) DLT 579).

22. To prove the defence, the accused has produced himself as DW1 and has deposed in his examination in chief that Shamim Raza used to keep the accused's cheque book being his partner. He deposed that the bank account was opend in his name and not in the name of Shamim Raza because he was a government employee. He also deposed that the name and date on the cheques was not in his handwriting. He also deposed that he was not aware if Shamim Raza had any personal account in any bank. During his cross examination, DW1 Shaheen Akhtar deposed that there was no written agreement of partnership between Shamim Raza and him. He also deposed that there was no bank transaction between Shamim Raza and him and all transactions used to be in cash. He also deposed that there was no cash receipt available with him of any transaction with Shamim Raza.

23. The accused has also produced DW2 Sh. Firoz Ashraf to corroborate his own testimony with him. DW2 Sh. Firoz Ashraf has deposed that presently he is the business partner of Shaheen Akhtar and is in possession of cheque book issued in accused's name. He deposed that he does not have any partnership account with Shaheen Akhtar and all transactions are carried out from personal account of Shaheen Akhtar. He also deposed that Shamim Raza was in partnership with the accused. He deposed that Shamim Raza was a government employee in MCD school. In his cross examination, DW2 Sh. Firoz Ashraf deposed that he is not a government servant and his partnership with the accused began in CC No. 16/11 Meenu Vs Shaheen Akhtar Page 9 of 12 April, 2012 and he has been in possession of the cheque book of accused since May or June. He also deposed that he cannot tell the account number of Shaheen Akhtar as it is sixteen digit number. He also deposed that during the business of export of ladies garments and he has been working in export house since 2009.

24.Analysing the above evidence produced by the accused in his defence, the court finds that the accused has failed to prove his partnership with Sh. Shamim Raza, the deceased husband of the complainant . Neither the accused has produced any partnership documents nor any cash receipt or any other documentary proof to show that there was a partnership between him and Sh. Shamim Raza. Mere oral testimony of the witness DW2 Sh. Firoz Ashraf does not prove the partnership of the accused and Shamim Raza. In fact, the witness appears to be a planted witness. The said witness has not even produced any document to prove his own partnership with the accused. The testimony of the said witness cannot be relied upon. Also, the accused has admitedly deposed that the husband of the complainant Sh. Shamim Raza was a government employee. This fact further disproves the defence of the accused that Sh. Shamim Raza was in partnership with the accused. As the accused has failed to prove his partnership with the husband of the complainant, he has also failed to prove that the cheques in question were issued to the husband of the complainant during the course of his partnership with the accused. Security cheque to be determined as on date of cheque.

25.As far as the contention that the cheques were given in nature of security, even if it is accepted that the cheques were given as security, the accused has not been able to prove that he was not liable to pay the cheque amounts as on the date of cheques in question. Even if it is presumed that the cheques were issued as security, they no more remained as security as on the dates of the cheques.

In KS Bakshi v. State 146 (2008) DLT 125, it was observed as under :

"31. A distinction has to be drawn between a cheque issued as security and a cheque issued towards discharge of a liability to pay notwithstanding that the money is by way of security for due performance of the contract. A cheque given as security is not to be encased in presenti. It becomes enforceable if an obligation in future is not enforced. It is not tendered in discharge of a liability which has accrued.

32. Thus where a cheque forms part of a consideration under a contract it is paid towards a liability."

(emphasis added)

26.In Sri Sai Auto Agencies v. Sheikh Yusuf Sheikh Umar 2011 (1) DCR 78 (Bombay), the High Court of Bombay has held that even if blank cheque has been given towards liability or even as security, when the liability is assessed and quantified, if the cheque is filled up and presented to the bank, the person who had drawn the cheque cannot avoid the criminal liability arising out of Section 138 of the NI Act.

27. Therefore, the accused has not been able to raise any probable defence in support of his case and has failed to rebut the presumption raised U/s. 139 of the NI Act.

28.Since the accused has failed to rebut the presumption raised U/s. 139 of the NI Act, there is no need to go into complainant's evidence for proving the complainant's case. Even otherwise, CW1 Ms. Meenu has deposed the facts mentioned in the complaint in her evidence affidavit. During her cross examiantion CW1 has deposed that she and her husband had invested Rs. 9.2 lacs. Even during her cross examination CW1 has been consistent with her stand that money was given to the accused as investment. There is nothing coming out in the cross examination of CW1 Ms. Meenu which would probablise the defence raised by the accused or falsify the case of the complainant.

29.Therefore, the complainant has been able to prove that the cheques Ex. CW1/A, Ex. CW1/B, Ex. CW1/C and Ex. CW1/D were issued by accused in discharge of legally recoverable liability owed to the complainant. The accused is convicted for the offence punishable U/s. 138 of the NI Act in respect of cheques Ex. CW1/A, Ex. CW1/B, Ex. CW1/C and Ex. CW1/D. The accused shall be heard on the point of sentence on 24.02.2014 at 2.00 pm. Announced in the Open Court (Apoorv Sarvaria) on 10th February, 2014 Civil Judge­I/MM, New Delhi District New Delhi CC No. 16/11 Meenu Vs Shaheen Akhtar Page 12 of 12