Delhi District Court
Ct. Case No.7478/2019 Angad Suri vs . Sanjeev Nagrath on 17 November, 2021
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IN THE COURT OF SHRI HARSHAL NEGI, LD. MM (NI ACT)
05, SOUTH WEST DISTRICT:DWARKA COURTS, NEW DELHI
CC No.7478/2019
CNR No.DLSW020085522019
Angad Suri
S/o Shri G S Suri
R/o B2/80, Second Floor,
Janak Puri, New Delhi. ... Complainant
Versus
Sanjeev Nagrath
S/o Sh. K K Nagrath
R/o B2B/233, Janak Puri,
New Delhi ..... Accused
Offence complained of : U/s 138, NIA. 1881
Date on which the complaint was instituted : 19.05.2010
Plea of the Accused : Pleaded not guilty
Date on which judgment was reserved : 01.11.2021
Date of Pronouncement of judgment : 17.11.2021
JUDGMENT
Ct. Case No.7478/2019 Angad Suri Vs. Sanjeev Nagrath 2 It would be convenient to summarize in the briefest terms the facts forming the foundation of the case in hand. The complainant was approached by the accused for a friendly loan in month of September 2008 and an amount of Rs 9,51,000/ was advanced in three installments. The details are thus:
SN Amount Advanced (in Rs) Year/Month Mode 1 5,16,000 30.09.2008 Cash 2 1,35,000 December 2009 Cash 3 3,00,000 January 2010 Cash
A loan agreement dated 30.09.2008 along with an affidavit and receipt for Rs 5,16,000 was entered between the parties. A promissory note dated 10.01.2010 was also entered between the parties for remaining amount of Rs 4,35,000/. It is the case of the complainant that in furtherance of repayment of the above said loan a total of 8 cheques were issued by the accused. The details are thus:
S. N. Cheque No. Dated Amount Drawn on
1. 387513 11.03.2010 5,16,000 Bank of Rajasthan,
Janakpuri, New Delhi58
2. 613127 04.03.2010 35,000 ICICI Bank, Janakpuri,
New Delhi58
3. 613139 04.03.2010 1,00,000 do
4. 613141 04.03.2010 50,000 do
5. 613144 04.03.2010 1,10,000 do
6. 613147 04.03.2010 1,00,000 do
7. 791231 04.03.2010 20,000 do
8. 791239 04.03.2010 20,000 do
Ct. Case No.7478/2019 Angad Suri Vs. Sanjeev Nagrath
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The complainant deposited the given cheque through his bankers i.e Bank of Baroda, Janak Puri, New Delhi, however, the same were returned unpaid vide return memo dated 19.03.2010 with remarks "Funds Insufficient". Mandatory statutory legal demand notice dated 12.04.2010 was served by the complainant. The above said factual matrix led to the filing of the present complaint. Material on Record The accused entered appearance on 20.10.2010. Notice under Section 251 Crpc dated 11.02.2011 was framed accordingly to which the accused pleaded not guilty and claimed trial.
The Complainant relied on the following documents:
a. Original Loan Agreement dated 30.09.2008 Ex CW 1/1, b. Original Affidavit dated 30.09.2008 Ex CW 1/2 , c. Original Receipt dated 30.09.2008 Ex CW 1/3, d. Original Promissory Note dated 30.09.2008 of Rs 5,16,000 Ex CW 1/4, e. Original Promissory Note dated 10.01.2010 of Rs 4,35,000 Ex CW1/5, f. Original Cheque No 387513 of Rs 5,16,000/ Ex CW 1/6, g. Original Cheque No 613127 of Rs 35,000/ Ex CW 1/7, h. Original Cheque No 613139 of Rs 1,00,000/ Ex CW 1/8, i. Original Cheque No 613141 of Rs 50,000/ Ex CW 1/9, j. Original Cheque No 613144 of Rs 1,10,000/ Ex CW 1/10, k. Original Cheque No 613147 of Rs 1,00,000/ Ex CW 1/11, l. Original Cheque No 791231 of Rs 20,000/ Ex CW 1/12, m. Original Cheque No 791239 of Rs 20,000/ Ex CW 1/13, n. Original returning memos Ex CW 1/14, o. Copy of Legal Notice Ex CW 1/15, Ct. Case No.7478/2019 Angad Suri Vs. Sanjeev Nagrath 4 p. Original postal receipts CW 1/16, q. Copy of Under Postal Certificate (UPC) CW 1/17.
The complainant was cross examined on 13.10.2015, 15.02.2016, 12.05.2016 and 19.01.2018.
In his cross examination dated 13.10.2015 the complainant admitted that in the loan agreement Ex CW1/1 there is no mentioning of any interest rate, although submitting that the same finds mention in promissory note Ex CW1/4. He denied the suggestion that CW1/1 and CW1/4 are forged and fabricated. He further stated that the sum of Rs 5,16,000/ was supposed to be repaid by the accused within 2 years i.e. September 2010. The complainant further submitted that he did not obtain any written understanding from the accused regarding that accused will clear his payment by March 2010. He further submitted that document Ex CW1/5 was executed by the accused when the complainant made the payment of Rs 3,00,000/ and Rs 1,35,000/. He further denied the suggestion that Ex CW1/5 is forged and fabricated document.
In his cross dated 15.02.2016, the complainant admitted Ex CW1/DA being true copy of judicial order of Sh. Jagdish Kumar Ld ADJ06, West, Tis Hazari Court, Delhi which pertains to the cheques in question. He further stated that he has not challenged the said order. The complainant further brought three bank statements marked Ex CW1/DB to Ex CW1/DD. The complainant further stated that he had filed ITR at the relevant year 200809 but have not mentioned the factum of friendly Ct. Case No.7478/2019 Angad Suri Vs. Sanjeev Nagrath 5 loan in the ITR. Further, Ex CW1/Y was put to the complainant being the copy of the plaint of the Civil suit filed by the complainant against the accused which the complainant admitted to have filed. He further stated that the accused paid him 1% interest on Rs 5,16,000 till November 2009 in cash. However, he admitted that he had not maintained any record of the same. The complainant further admitted that Ex CW1/4 does not bear the signature of the accused; however, voluntarily submit that the signature of the accused is present on Ex CW1/5. The complainant further admitted that the witness on Ex CW1/1 and Ex CW ¼ was of his wife Smt Pooja Suri. The complainant affirmed that he have given Rs 1,35,000 in December 2009 and Rs 3,00,000/ in January 2010 and for both the amount he had got promissory note Ex CW1/5 from the accused. The complainant further affirmed that one Mr Rajan was his employee, however, stating that he was not reliable. He further stated that he had made a complaint against Mr Rajan that he had stolen some money from his office in year 2010.
In his cross dated 12.05.2016 he affirmed that Ex CW/DE is a certified copy of order dated 06.10.2015 of Sh Jagdish Kumar (ADJ) Tis Hazari Court, Delhi granting leave to defend to the accused. He further affirmed that certified copy Ex CW1/DF at page 6 Point A and at page 14 Point B is in his handwriting but denied that he know in what context it was written. He submitted that he did not know if the signatures at the end of the receipt in Ex CW 1/DF are of his employee Rajan. He stated Ct. Case No.7478/2019 Angad Suri Vs. Sanjeev Nagrath 6 that he can produce the compliant which he had filed against his employee Rajan regarding the theft committed by him from his office drawer. He further denied the suggestion that he did not have Rs 5,16,000/ during relevant time. He further denied the suggestion that accused had taken a sum of Rs 3,00,000/ and he had repaid the same which is reflected in Ex CW1/DF. He denied the suggestion that he had obtained signature of the accused and his wife on blank documents and retained the blank cheque.
In his cross examination dated 19.01.2018 the complainant stated he could not trace the complaint filed by him against his employee Rajan. He further stated that he know witness Kishan Lal whose signature are available on document Ex CW1/1 at place X. He further affirmed that name of his father in law is also Kishan Lal. On the question put to him that whether it is correct that signature on Ex CW 1/1 at place X is of complainant's father in law, the complainant stated that he do not know the signatures of his father in law and do not remember as the matter pertain to many years back.
Thereafter, CW 2 i.e. Complainant witness 2 was examined in chief on 19.01.2018. In his examination in chief CW 2 stated that he is a notary public registered with Govt of India with no 1015 since 17.11.1997. Photocopy of his certificate of practice was marked as CW 2/X. CW 2 brought notary register for period of 01.01.2008 to 31.12.2008. He stated that document Ex CW1/1 to CW 1/3 were Ct. Case No.7478/2019 Angad Suri Vs. Sanjeev Nagrath 7 notarized by him. He further affirmed the thumb impression and signature of the accused, complainant and wife of accused marked in the given documents. He further stated that the entry regarding the above said document is at serial no 1748 to 1750 in Ex CW 2/4(OSR). He further affirmed the thumb impression and signature of the accused, complainant and wife of accused marked in the above entries. He further stated that all the parties appeared before and signed and put their thumb impression on the said documents in his presence.
In his cross dated 19.01.2018, CW 2 denied knowing the parties personally. He stated that he do not retain the copy of the identity of parties but see them at the time of attestation. He stated that he file Form XIV/notary return to the Ministry of Law on yearly basis containing details of the parties. The copy of the form is marked as Mark CW2/X1. He further stated that the form XIV contains the information relating to strictly to register only.
In his further cross dated 23.07.2018, CW 2 filed the complete copy of the register of witness for 2008 marked as EX CW2/Z. He affirmed that the entry no 247 in notary register of 2008 has been done by wife of the complainant. He further stated that he do not attest the documents if there are some blank spaces on the document. Further, that the writing on page 2 of Ex CW 1/1 at point A seems to be under his stamp. He denied the suggestion that he attested the document CW 1/1 when it was blank at point A and that the writing thereon under the Ct. Case No.7478/2019 Angad Suri Vs. Sanjeev Nagrath 8 stamp has been written later. He denied the suggestion that he has forged and fabricated false document purporting to be Ex CW 1/1 and the notary register in question.
Thereafter, the complainant closed his evidence on 23.07.2018.
Statement of the accused under Section 313 CRPC was recorded on 14.08.2018. In his statement the accused admitted that the cheques in question bears his signature though denying filling of the particulars. He admitted to have taken the loan of Rs 3,00,000/ which he has already returned to the complainant. He denied receiving any legal notice from the complainant.
The accused choose to lead his defence evidence. The accused examined himself as DW 1. In his examination in chief dated 15.12.2018, the accused admitted to have taken the loan of Rs 3,00,000/ from the complainant on 3 % interest for period of 2 years. He further stated to have refund the loan by way of daily installments to the employee Rajan of the complainant and further stated that the employee of the complainant used to sign acknowledgment of receipt of money which is already marked as Ex CW 1/DF. He further admitted that at the time of giving loan the complainant sought his signature on loan agreement marked as Ex CW1/1. However, he submitted that point A at page 2 of the loan Agreement was blank and which was filled by the complainant later on. He stated that the handwriting on point A is not Ct. Case No.7478/2019 Angad Suri Vs. Sanjeev Nagrath 9 his. He further stated that the complainant sought his signature and of his wife on Ex CW ¼ and Ex CW1/5 and at the time of signing they were blank. He further stated that the complainant also took few cheques as security including cheques marked as Ex CW1/6 to Ex CW1/13. He admitted that the cheques marked as CW1/6 to CW 1/13 bears his signature. He stated that the said cheques were towards security and not towards any legally enforceable debt. He further stated that on approaching the complainant for return of the cheques in question the complainant did not return them but extended excuse that the same were lying with is CA.
In his cross examination dated 24.07.2019, he stated to know the complainant for more than 20 yrs. He admitted that he signed the cheques in question Ex CW1/6 to Ex CW1/13. He further admitted his signature as well of his wife on the loan Agreement Ex CW 1/1. He admitted his signature and that of his wife on the affidavit Ex CW1/2. He admitted his signature and that of his wife on receipt Ex CW1/3. He further admitted that the promissory note Ex CW1/4 has been signed by his wife and stated to have seen her writing and sign the same. He admitted the signing of promissory note Ex CW1/5. He further admitted that the address mentioned in the legal notice Ex CW1/15 is his correct address. He admitted to have taken the loan, however, stated that the loan amount of Rs 3, 00,000/ and not Rs 9, 00,000/. He further affirmed the suggestion that the signature of his wife on loan agreement Ct. Case No.7478/2019 Angad Suri Vs. Sanjeev Nagrath 10 is above the typed contents. He submitted that there existed terms and condition which was actually page no 2 but the complainant has removed that page and replaced it with page of witnesses and paginated the page as page no 2.
In his cross examination dated 07.03.2020, DW 1 denied the knowledge of complaint dated 06.08.2010 to SHO Janak Puri which is Ex DW 1/A. He denied the suggestion that Ex CW1/DF was fabricated by him in collusion with Rajan.
Defence Evidence was closed vide order dated 07.03.2020.
Arguments adduced by Ld Counsels of both the parties have been heard at length. Evidences and documents on record perused carefully. Law Point Before analyzing the material on record, it is imperative to set forth the legal benchmark which governs the adjudication of cases under Section 138 NI Act. A bare reading of Section 138 NI Act reveals that in addition to the cheque being issued for the discharge, in whole or in part, of any debt or other liability; following are the ingredients which constitute an offence:
1. that a person drew a cheque on an account maintained by him with the banker;
2. that such a cheque when presented to the bank is returned by the bank unpaid;
Ct. Case No.7478/2019 Angad Suri Vs. Sanjeev Nagrath 11
3. that such a cheque was presented to the bank within a period of six months from the date it was drawn or within the period of its validity whichever is earlier;
4. that the payee demanded in writing from the drawer of the cheque the payment of the amount of money due under the cheque to payee; and
5. such a notice of payment is made within a period of 30 days from the date of the receipt of the information by the payee from the bank regarding the return of the cheque as unpaid.
(Para 26, N. Harihara Krishnan vs J. Thomas, (2018) 13 SCC 663, referred to in Himanshu vs B. Shivamurthy (2019) 3 SCC 797) Section 138 is to be read with the presumption, being a rebuttable presumption, as contained in Section 139. Section 139 provides that:
"Presumption in favour of holder It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability."
Thus, in cheque bouncing cases, the judicial scrutiny revolves around the satisfaction of ingredients enumerated under Section 138 NI Act and if so, whether the accused was able to rebut the statutory presumption contemplated by Section 139 NI Act. Section 139 is an example of reverse onus clause which usually imposes an evidentiary burden and not a persuasive burden. In other words, evidence of a Ct. Case No.7478/2019 Angad Suri Vs. Sanjeev Nagrath 12 character, not to prove a fact affirmatively, but to lead evidence to show nonexistence of a liability. Further The law is well settled that when an accused has to rebut the presumption under Section 139, the standard of proof of doing so is that of "preponderance of probability" (Rangappa vs Sri Mohan (2010) 11 SCC 441). Once execution of cheque is admitted, it is a legal presumption under Section 139 of Negotiable Instrument Act, the cheque was issued for discharging legally enforceable debt.
Attention is also invited to Section 118(a) wherein a presumption of the cheque having been issued in discharge of a legally sustainable liability and drawn for good consideration, arises. 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;"
Hence, it can be seen that from its very inception a presumption that the cheque was issued in discharge of a debt or other liability subsists in favour of the Complainant and onus rests upon the accused to Ct. Case No.7478/2019 Angad Suri Vs. Sanjeev Nagrath 13 rebut the existing presumption on the touchstone of preponderance of probability.
Further, the accused in a trial under Section 138 has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case the nonexistence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed (Para 20, Kumar Exports vs Sharma Carpets (2009) 2 SCC 513 which was quoted with approval in Rohitbhai Jivanlal Patel v. State of Gujarat, (2019) 18 SCC 106, Rohitbhai Jivanlal Case cited in Barun Kumar vs State NCT of Delhi, CRL.REV.P. 398/2018, Delhi High Court, judgment dated 25.06.2021 ). Another path which the accused can pursue is to show, either by creating a dent in the case of the complainant or through his own defence evidence, that he has already made good the payment of the loan or debt and nothing remains to be paid against the said loan or debt.
Analysis & Conclusion Having laid down the factual matrix and the legal position, let us now advert to whether the ingredients of Section 138 NI Act has been made out by the Complainant and whether the accused has been able to rebut the presumption which is existing against him or whether he has Ct. Case No.7478/2019 Angad Suri Vs. Sanjeev Nagrath 14 made good any of the two options given in Kumar Exports case as mentioned above.
In order to prove the case, the complainant led his evidence by way of affidavit. The complainant examined himself as CW1/1 by way of affidavit. In his evidence the complainant stated that he advanced accused a friendly loan for an amount of Rs 9,51,000/ in three installments. That a loan agreement dated 30.09.2008 along with an affidavit and receipt for Rs 5,16,000 was entered between the parties. A promissory note dated 10.01.2010 was also entered between the parties for remaining amount of Rs 4,35,000/. He further stated that in furtherance of repayment of the above said loan a total of 8 cheques were issued by the accused.
On the close scrutiny and appraisal of the documents it transpires that a loan agreement dated 30.09.2008 was entered between the parties marked Ex CW1/1 for an amount of Rs 5,16,000/. Further, an affidavit marked as Ex CW1/2 and receipt marked as Ex CW1/3 in furtherance of the loan agreement was also entered between the parties. Additionally, two promissory notes marked Ex CW ¼ and Ex CW 1/5 was entered between the parties. Now, Section 91 of the Evidence Act 1872 deals with the documents which are reduced into writing. Section 91 IEA is read with Section 92 IEA while appreciating a written document which has been brought on record. It has been held that Section 91 and 92 Evidence Act would apply only when the document on the face of it Ct. Case No.7478/2019 Angad Suri Vs. Sanjeev Nagrath 15 contains or appears to contain all the terms of the contract. It has been held that after the document has been placed to prove the terms under Section 91, the provisions of Section 92 comes into operation for the purpose of excluding evidence of any oral agreement or statement for the purpose of contradicting, varying, adding or subtracting from its terms (Roop Kumar vs Mohan Thedani (2003) 6 SCC 595 quoted with approval in V Anantha Raju vs T.M. Rarasimhan (Civil Appeal no 6469 of 2021 dated 26.10.2021). It has been further held that when the parties deliberately put their agreement in writing, it is conclusively presumed, between themselves and their privies, that they intended the writing to form a full and final settlement of their intentions, and one which should be played beyond the reach of future controversy, bad faith and treacherous memory (V Anantha Raju vs T.M. Rarasimhan (Civil Appeal no 6469 of 2021 dated 26.10.2021 while replying on Roop Kumar vs Mohan Thedani (2003) 6 SCC 595). The loan agreement, Affidavit and receipt gets proved through Ex CW2/Z page No 114 Entry No 17481750 brought on record by CW 2 i.e. Notary Public, in which the date of 30.09.2008 is categorically mentioned. Further, at this juncture it is apposite to state that with respect to the loan agreement, affidavit, receipt and two promissory notes marked as Ex CW 1/1, ½, 1/3, ¼, 1/5 respectively, the signature has not been disputed by the accused and there is express admission of his signature on the above said documents in his cross examination. Hence, the document marked as Ct. Case No.7478/2019 Angad Suri Vs. Sanjeev Nagrath 16 exhibited above said stands proved. Perusal of the cheques in question Ex CW 1/6 to CW 1/13 clearly transpires that the same had been issued for a sum total of Rs 9,51,000/, the details of which, for the sake of convenience are hereunder:
SN Cheque Date Amount Branch Exhibit Return Exhibit Reason of No of Memo Date of Dishonour Cheque Return Memo
1. 387513 11.03.2010 5,16,000 Bank of CW1/6 19.03.2010 CW1/14 Funds Rajasthan, Insufficient Janakpuri, New Delhi58
2. 613127 04.03.2010 35,000 ICICI Bank, CW1/7 19.03.2010 CW1/14 Funds Janakpuri, Insufficient New Delhi58
3. 613139 04.03.2010 1,00,000 do CW1/8 19.03.2010 CW1/14 Funds Insufficient
4. 613141 04.03.2010 50,000 do CW1/9 19.03.2010 CW1/14 Funds Insufficient
5. 613144 04.03.2010 1,10,000 do CW1/10 19.03.2010 CW1/14 Funds Insufficient
6. 613147 04.03.2010 1,00,000 do CW1/11 19.03.2010 CW1/14 Funds Insufficient
7. 791231 04.03.2010 20,000 do CW1/12 19.03.2010 CW1/14 Funds Insufficient
8. 791239 04.03.2010 20,000 do CW1/13 19.03.2010 CW1/14 Funds Insufficient The dishonour memo further strengthen that the cheques was dishonored for the reason "insufficient funds". Legal notice dated 12.04.2010 Ex.CW1/15 further proves that the same was issued and dispatched on 12.04.2010 vide postal receipt Ex.CW1/16. It has been proved that despite issuance of legal notice, the accused had failed to Ct. Case No.7478/2019 Angad Suri Vs. Sanjeev Nagrath 17 make the payment of the cheque amount. The perusal of these documents conclusively established that the accused had issued the cheques which were dishonorued due to "funds insufficient".
It is not in dispute that the cheques in question were signed by the accused himself as in Notice under Section 251 Crpc the accused admitted that cheques in question bears his signature. The same gets further cemented in his statement under Section 313 Crpc wherein he admitted his signature though denying filling of particulars on the cheques. The law is no longer res integra that even if a signed blank cheque is presented to the payee and payee fill up the amount and other particulars, this in itself would not invalidate the cheque and the accused would still have to prove that the cheque was not in discharge of a debt or liability by adducing evidence (Bir Singh vs Mukesh Kumar (2019) 4 SCC 197).
The accused both in Notice under Section 251 CRPC and his statement under Section 313 CRPC has categorically denied receipt of any legal notice regarding demand of the loan amount. At this stage it is worth noting that the address that has been mentioned in the legal notice and the addresses given by the accused in Notice under Section 251 Crpc, Statement under Section 313 Crpc as well as the address given by him in his examination in chief are the same. The Hon'ble Supreme Ct. Case No.7478/2019 Angad Suri Vs. Sanjeev Nagrath 18 Court in K Bhaskaran vs Sankaran Vaidhyan Balan (1999) 7 SCC 510 in Para 18 observed thus:
"......'Giving Notice' in the context is not the same as 'receipt of notice'. Giving is a process of which receipt is the accomplishment. It is for the payee to perform the former process i.e. Giving, by sending the notice to the drawer at the correct address....."
Further, in Para 24 of the above said judgment the Hon'ble Supreme Court held that where the sender has dispatched the notice by post with correct address written on it, the principle incorporated in Section 27 of General Clauses Act could profitably be imported in such a case. It was further held that in this situation service of notice is deemed to have been effected on the sendee.
Law with respect to the delivery of legal notice by post and the presumption with respect to the same has been succinctly put forth by the Hon'ble Supreme Court in C C Alavi Haji vs Palapetty Muhammed (2007) 6 SCC 555. Para 13 & 14 of the judgment is worth mentioning as under:
"13. According to Section 114 of the Act, read with Illustration (f) thereunder, when it appears to the Court that the common course of business renders it probable that a Ct. Case No.7478/2019 Angad Suri Vs. Sanjeev Nagrath 19 thing would happen, the Court may draw presumption that the thing would have happened, unless there are circumstances in a particular case to show that the common course of business was not followed. Thus, Section 114 enables the Court to presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business in their relation to the facts of the particular case. Consequently, the court can presume that the common course of business has been followed in particular cases. When applied to communications sent by post, Section 114 enables the Court to presume that in the common course of natural events, the communication would have been delivered at the address of the addressee. But the presumption that is raised under Section 27 of the G.C. Act is a far stronger presumption. Further, while Section 114 of Evidence Act refers to a general presumption, Section 27 refers to a specific presumption
14. Section 27 gives rise to a presumption that service of notice has been effected when it is sent to the correct address by registered post. In view of the said presumption, when stating that a notice has been sent by registered post to the address of the drawer, it is unnecessary to further Ct. Case No.7478/2019 Angad Suri Vs. Sanjeev Nagrath 20 aver in the complaint that in spite of the return of the notice unserved, it is deemed to have been served or that the addressee is deemed to have knowledge of the notice. Unless and until the contrary is proved by the addressee, service of notice is deemed to have been effected at the time at which the letter would have been delivered in the ordinary course of business Thus, in view of the law as above said and the fact that the address that has been mentioned in the legal notice and the addresses given by the accused in Notice under Section 251 Crpc, Statement under Section 313 Crpc as well as the address given in his examination in chief being the same, the mandatory statutory legal notice marked as Ex CW 1/15 is deemed to have been served on the accused in the present case. Thus, the factum of issuance and receipt of mandatory statutory legal notice also stands proved based on the documentary evidence of legal notice, postal receipts.
The evidence led by way of affidavit by the complainant has been fully substantiated with the documentary evidence. Ergo, the complainant has proved that despite the statutory requirement of law as required under the Act the accused failed to honour the cheque amount within the statutory period. On the above said, the ingredients of Section 138 NI Act has been made out by the Complainant.
Ct. Case No.7478/2019 Angad Suri Vs. Sanjeev Nagrath 21 Now, the next scrutiny is with respect to the two options which are available to the accused as per the dicta of Kusum Exports case. Firstly, to show that consideration and debt did not exist and secondly, that under the particular circumstances of the case the nonexistence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. It is trite law that bare denial of 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.
One of the foremost defence raised by the accused is the submission that as per the loan agreement itself the loan was for a period of 2 years i.e. October 2008 to September 2010 and the refund was to be made only on the expiry of the period of 2 years and not before and that accused deliberately deposited the cheques in question before the expiry of 2 year period. This submission of the accused does not hold much water. The loan Agreement in categorical terms mentions that the entire loan amount will be refunded "within" a period of 2 years and not after the expiry of the terms of 2 yrs. Even otherwise, whenever a loan is advanced, the same is taken to be due from the date of the loan itself. The same does not become due for repayment on the expiry of any period. Of course, the parties can agree that the repayment of the loan advanced will start from a certain date or that the whole loan amount is Ct. Case No.7478/2019 Angad Suri Vs. Sanjeev Nagrath 22 ought to be paid by a certain time period or that the loan becomes due after certain date or time. However, in event of absence of any such categorical agreement between the parties, the loan advanced is taken to be due for repayment from the date of the loan itself. In this case, no such agreement has been arrived at between the parties wherein the parties agreed that the repayment is to begin after the expiry of certain period or that it is only after the expiry of certain period the loan is taken to be due. On the contrary, the loan agreement is categorical with respect to the repayment that the loan amount taken has to be repaid "within" 2 years and not that repayment is to begin after the expiry of the 2 year period. Thus, this argument of the accused is rejected.
The next foundational defence which runs ubiquitous in the defence of the accused is that he had taken a loan of Rs 3,00,000/ from the complainant and had deposited the cheques in question as security deposit and further that he has already made the payment through daily installments to the complainant through complainant's employee namely, Rajan. This, by and large is the core defence that has been raised by the accused.
The Hon'ble High Court of Delhi in Credential Leasing & Credits Ltd. Vs. Shruti Investments 223 (2015) DLT 343 have held that even a security cheque can form the basis of complaint under Section 138 of the Ct. Case No.7478/2019 Angad Suri Vs. Sanjeev Nagrath 23 NI Act, if on the date of the deposit of the security cheque, the debt of the accused stood crystallized.
The law as to security cheque has been laid down by the Hon'ble Supreme Court in its latest judgment Sripati Singh (since deceased) through Gaurav Singh vs State of Jharkhand & Anr, 2021 SCC Online SC 1002 wherein the question was whether an offence under Section 138 NI Act is not made out where the dishonourment is of the cheque issued by way of "security" and not towards discharge of any debt or liability. In Para 16 & 17 of the above judgment, the Hon'ble Supreme Court observed thus:
"16. A cheque issued as security pursuant to a financial transaction cannot be considered as a worthless piece of paper under every circumstance. 'Security' in its true sense is the state of being safe and the security given for a loan is something given as a pledge of payment. It is given, deposited or pledged to make certain the fulfilment of an obligation to which the parties to the transaction are bound. If in a transaction, a loan is advanced and the borrower agrees to repay the amount in a specified timeframe and issues a cheque as security to secure such repayment; if the loan amount is not repaid in any other form before the due date or if there is no other Ct. Case No.7478/2019 Angad Suri Vs. Sanjeev Nagrath 24 understanding or agreement between the parties to defer the payment of amount, the cheque which is issued as security would mature for presentation and the drawee of the cheque would be entitled to present the same. On such presentation, if the same is dishonoured, the consequences contemplated under Section 138 and the other provisions of N.I. Act would flow.
17. When a cheque is issued and is treated as 'security' towards repayment of an amount with a time period being stipulated for repayment, all that it ensures is that such cheque which is issued as 'security' cannot be presented prior to the loan or the instalment maturing for repayment towards which such cheque is issued as security. Further, the borrower would have the option of repaying the loan amount or such financial liability in any other form and in that manner if the amount of loan due and payable has been discharged within the agreed period, the cheque issued as security cannot thereafter be presented. Therefore, the prior discharge of the loan or there being an altered situation due to which there would be understanding between the parties is a sine qua non to not present the cheque which was issued as security. These are only the defences that would be available to the drawer of the Ct. Case No.7478/2019 Angad Suri Vs. Sanjeev Nagrath 25 cheque in a proceedings initiated under Section 138 of the N.I. Act. Therefore, there cannot be a hard and fast rule that a cheque which is issued as security can never be presented by the drawee of the cheque. ...".
Thus, as noticed above, the only defences with respect to a cheque deposited as a security which is available with the accused is either the prior discharge of the loan or there being an altered situation due to which there would be understanding between the parties. Further, when a cheque is issued and is treated as 'security' towards repayment of an amount with a time period being stipulated for repayment, all that it ensures is that such cheque which is issued as 'security' cannot be presented prior to the loan or the installment maturing for repayment towards which such cheque is issued as security. In the case at hand, the cheque in question was presented after the loan was given. Thus, the defence of the cheque issued as "security" being presented prior to the loan stands not satisfied. As regard another defence that the cheque cannot be presented prior to installment maturing for repayment. As has already been discussed, the terms of the loan agreement were categorical that the loan was to be paid "within" period of 2 years. Nowhere, on the reading of the loan agreement, can it be deduced that parties have arrived at any such agreement or arrangement to incorporate as to when the installments will mature for repayment.
Ct. Case No.7478/2019 Angad Suri Vs. Sanjeev Nagrath 26 Thus, the defence with respect to the "security" cheque in the light of the present case also fails.
Now, coming to another defence that has been raised by the accused with respect to the security cheque that he has taken loan of Rs 3, 00,000 / only and that too he has repaid. At the outset, it stands proved that the loan amount is of Rs 9, 51,000/. The accused neither from the material on record or from cross examination of the complainant has not able to show that the loan was of Rs 3,00,000/. Through cross examination of CW 2, the notary, the accused tried to create a dent in the case of the complainant by attempting to show that the Loan agreement, affidavit, receipt and the two promissory notes are false. However, the testimony of CW 2, inclusive of his cross examination, along with the documents brought on record by him nowhere creates such dent.
To prove his defence that he has already made payment of the debt, the accused relied on Ex CW 1/DF. Now, a look at Ex CW 1/DF shows it to be a dairy in which certain entries are made. We are concerned with the Entries made in Page no 6 to 18 of Ex CW 1/DF with respect to the present case. A bird's eye view of Page No 6 to 18 of Ex CW1/DF shows it to be divided primarily into three headings, firstly, date, secondly, amount and thirdly, signature. The date is of the years 2009 to 2010 approximately. There exists certain other entries which are not understandable and not connected to the present case. Now, the Ct. Case No.7478/2019 Angad Suri Vs. Sanjeev Nagrath 27 amount which is mentioned in these pages differ. In some pages it is 900, in some 300, 2100 etc. Lastly, the signatures which are shown are incomprehensible. Prima facie it cannot be made out whose signatures are these. However, there exists some signature by the name of Angad Suri but that too are reflecting in bits and pieces. Nowhere, from the scrutiny of the document any conclusion can be arrived at that the entries which are made are with respect to the loan in question. The amounts which are mentioned in the document nowhere shows the loan amount to be Rs 3,00,000/ or that the repayment of Rs.3,00,000/ has been made. Even addition of the amount mentioned cannot be done in absence of any clarity or details despite close scrutiny of the document. Further, the accused stated that he had made the payment of the loan amount to one person namely Rajan, who used to be the employee of the complainant. This document i.e. Ex.CW1/DF nowhere is able to show that the signatures which are in the pages are that of the one Rajan. Also, the accused did not brought Rajan, who he claimed to have given the loan repayment amount in installments and whose signatures are allegedly existing in the document, as a witness. Thus, the above said document does not further the cause of the accused defence that he has already made the payment.
Therefore, in view of the oral and documentary evidence brought on record by the complainant and the accused, statement of the accused under Section 313 Cr.P.C and on the basis of above said discussion and Ct. Case No.7478/2019 Angad Suri Vs. Sanjeev Nagrath 28 analysis, the accused has failed to rebut the presumption and it is clear that the accused had committed an offence under Section 138 of the Negotiable Instruments Act.
On the basis of the above said analysis and conclusions arrived, the accused namely Sanjeev Nagrath S/O Shri K K Nagrath is convicted for the commission of the offence punishable under Section 138 of the Act.
This Judgment contains 28 pages. Every Page of this Judgment has been signed by me.
Digitally signed Announced in the open court by HARSHAL
HARSHAL NEGI
NEGI Date:
on this day of 17th November, 2021. 2021.11.17
16:53:20 +0530
(HARSHAL NEGI)
MM(NI Act)05/SouthWest District
Dwarka Courts/New Delhi
Ct. Case No.7478/2019 Angad Suri Vs. Sanjeev Nagrath