Delhi District Court
1999, In The Judgment Reported As K. ... vs . Sankaran Vaidhyan on 12 August, 2013
IN THE COURT OF SHRI ARUN KUMAR, METROPOLITAN
MAGISTRATE:DWARKA COURTS:NEW DELHI
CC NO: 1515/12
Unique Case ID No: RO531862009
Vijay Bhola
R/o House No. 3012, Gali No. 34
Tuglakabad Extn., New Delhi-110019 ...............Complainant
Versus
Vijay Nand S/o Late Sh. Chandu Lal
R/o House No. 93, Munirka Village
New Delhi-110057
and also at:-
Decan Herald
516, Indira Prakash Building
Barakhamba Road
New Delhi-110001 ................Accused
Offence Complained of or proved : Under section 138 of
Negotiable Instruments
Act, 1881
Plea of the Accused : Pleaded not guilty
Date of filing : 22.09.2009
Date of Institution : 23.09.2009
Date of reserving judgment/order : 30.07.2013
Final Order/Judgment : Acquitted
Date of pronouncement : 12.08.2013
JUDGMENT:
CC NO. 1515/12
Vijay Bhola v. Vijay Nand Judgment dated 12.08.2013 Page 1 of 33 BRIEF FACTS AND REASONS FOR THE DECISION OF THE CASE:-
1. Vide this judgment, I shall dispose of the present complaint u/s 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as NI Act) filed by the complainant against the accused.
2.Case of the complainant as per the complaint is that the accused approached the complainant for availing a loan of Rs. 75,000/- for marriage of his sister, which was given by the complainant to the accused and in discharge of his aforesaid liability, accused issued three dateless cheques bearing nos. 761660, 761654 and 761656 for a sum of Rs. 25,000/-, 30,000/- and 20,000/- respectively drawn on ICICI Bank Ltd., New Delhi branch and assured the complainant that the payment will be made on 19.08.2009 and when as per the assurance of the accused, the aforesaid cheques were presented by the complainant for encashment on 19.08.2009, the same were returned unpaid with remarks "funds insufficient" by banker of accused vide separate return memos all dated 24.08.2009, whereupon a legal notice of demand dated 26.08.2009 was sent by the complainant through his counsel to the accused calling upon the accused to make the payment of cheques in question within 15 days but the accused had failed to make the payment of cheques despite receipt of legal notice and sent a false and frivolous reply on 07.09.2009 and hence the present complaint has been filed by the complainant against the accused u/s 138 of the NI Act on 22.09.2009.
3.On receipt of the complaint, cognizance of the offence was taken and CC NO. 1515/12 Vijay Bhola v. Vijay Nand Judgment dated 12.08.2013 Page 2 of 33 accused was summoned vide order dated 30.09.2009 by the Ld Predecessor of this Court and in response to summons of the court, the accused had appeared on 04.12.2009.
4.Subsequently, notice u/s 251 Cr PC explaining accusations u/s 138 of NI Act was issued to the accused on 02.07.2010 to which he did not plead guilty and claimed trial. Thereafter, the matter was fixed for complainant's evidence and the complainant has not filed any fresh affidavit in post summoning evidence and accordingly, he was cross examined on the affidavit filed by him in pre-summoning evidence, copy of which was supplied by him to the accused on 04.09.2010 in terms of directions of Ld. Predecessor of this Court. CW-1 in his affidavit had relied upon the following documents:
Ex.CW1/A to Ex. CW-1/C: Original cheques bearing nos. 761660, 761654 and 761656 for a sum of Rs. 25,000/-, 30,000/- and 20,000/- respectively drawn on ICICI Bank Ltd., New Delhi in favour of the complainant.
Ex CW1/D1 to Ex. CW-1/D3: Original cheque return memos all dated 24.08.2009.
Ex CW1/E: Copy of legal notice dated 26.08.2009. Ex CW1/F & Ex. CW-1/F1: Original Courier receipts dated 26.08.2009 regarding dispatch of legal notice alongwith POD Ex CW1/G:Original Postal receipt dated 28.08.2009 regarding dispatch of legal notice to the accused.
Ex CW1/I: Reply dated 07.09.2009 given by the accused CC NO. 1515/12 Vijay Bhola v. Vijay Nand Judgment dated 12.08.2013 Page 3 of 33 through his counsel to legal notice dated 26.08.2009.
5.No other witness has been examined by the complainant in support of its case. CW-1 was duly cross examined by Ld. Counsel for the accused on 08.12.2010 and 09.02.2011. Thereafter, certain documents were filed by the complainant alongwith an affidavit with the permission of Court and accordingly, CW-1 was further cross examined by Ld. Counsel for the accused on the aforesaid documents. The following documents were filed by the witness alongwith affidavit in rebuttal:
Ex. CW-1/H, Ex. CW-1/I-1 (renumbered vide order dated 30.07.2013) and Ex. CW-1/J: Statement of Account no.
031105002252, Account no. 02942000005980 and Account no. 10222011011838 of the complainant maintained by him with M/s ICICI Bank, GK-I, New Delhi, M/s HDFC Bank Ltd. Ring Road, Lajpat Nagar-IV, New Delhi and Oriental Bank of Commerce, Dwarka Sector-10, New Delhi.
Ex. CW-1/K and Ex. CW-1/L: Copy of Income Tax returns of the complainant for AY 2007-08 and 2008-09.
Ex. CW-1/M: Copy of rent agreement of the complainant with landlord.
6.Thereafter, statement of accused u/s 313 of Cr.P.C was recorded on 05.08.2011 by Ld. Predecessor of this Court wherein the accused has admitted that he had availed the loan in question and also that the cheques in question bear his signatures. He has also admitted receipt of legal notice and reply sent by him through his counsel to the legal notice.
CC NO. 1515/12Vijay Bhola v. Vijay Nand Judgment dated 12.08.2013 Page 4 of 33 He has also not disputed the documents filed by the complainant in his rebuttal evidence. Only defence sought to be raised by the accused was that he had already repaid almost entire loan amount prior to presentation of cheques in question and that the cheques which were handed over by him to the complainant as security cheques have been misused by the complainant after entering the dates therein. Thereafter at request of the accused matter was fixed for defence evidence.
7.Accused has examined six witnesses in his defence including himself. Out of the aforesaid six witnesses, DW-2 i.e. the manager from ICICI Bank, Cannaught Place Branch and DW-5 i.e. the Officer from Canara Bank, Sansad Marg Branch have proved the statements of bank account of the accused bearing nos. 000701248773 and 1098101034023 maintained by him with the said banks. Besides, DW-2 has also proved certain Pay in Slips produced by the complainant showing deposition of certain amounts by him in the bank account of accused and the same were marked from Ex. DW-2/CX1 to Ex. DW-2/CX5. The aforesaid pay in slips alongwith 14 other pay-in-slips were admitted by the accused under Section 294 Cr.P.C. and the same were marked as Ex. DW-1/X (Colly) on 30.04.2013. DW-6 i.e. an officer from ICICI Bank, GK-II branch has proved the statements of accounts of complainant bearing nos. 031105002252 and 031101001546 and the same were marked as Ex. DW-6/A and Ex. DW-6/B respectively.
8.Mr. Raj Kumar Chauhan, a friend of accused, was examined by him as DW-3, who has deposed that the accused had made the payment of Rs.
CC NO. 1515/12Vijay Bhola v. Vijay Nand Judgment dated 12.08.2013 Page 5 of 33 23,000/- on 22/23.06.2008 and of Rs. 40,000/- around 10-15.07.2008 to the complainant in his presence. Mr. Pradeep Kumar, another friend of the accused, was examined by him as DW-4, who has deposed that during the month of April 2009, the accused has paid a sum of Rs. 30,000/- to the complainant in his presence after borrowing the same from him and though during examination in chief he has stated that accused has informed him that the amount of Rs. 30,000/- is required to be paid by him to the complainant against loan of Rs. 2,22,000/- availed by accused from the complainant but during cross-examination he has denied that the loan amount was ever disclosed by the accused to him. Besides, the accused has filed his affidavit in defence evidence and has examined himself as DW-1 whereby he has proved documents Ex. DW-1/1 to Ex. DW-1/3 (though in his examination in chief dated 03.09.2011 documents are referred to as Ex. DW-1/1 to Ex. DW-1/4, however as clarified in order dated 30.07.2013 the same are Ex. DW-1/1 to Ex. DW-1/3). The aforesaid documents were proved by him to show that he has deposited several sums of money in the bank account of the complainant from time to time. Later on, eight pay-in-slips were admitted by the complainant reflecting deposits of various amounts by the accused in the bank accounts of complainant under Section 294 Cr.P.C. And the same were marked as Ex. CW-1/X (Colly). Thereafter, on a separate statement of the accused, DE was closed vide order dated 30.04.2013 and the matter was fixed for final arguments. Final arguments were heard on 17.07.2013 and reheard on 30.07.2013.
CC NO. 1515/12Vijay Bhola v. Vijay Nand Judgment dated 12.08.2013 Page 6 of 33 Besides, written submissions have also been filed by Counsel for the complainant.
9.The sum and substance of arguments made by Ld. Counsel for the complainant is that the complainant has proved all the ingredients of offence under Section 138 of the NI Act against the accused beyond reasonable doubts, in as much as, not only the accused has admitted that he had availed the loan in question from the complainant but he has also admitted that the cheques in question were issued by him in favour of the accused without filling in the date therein. According to him, under the aforesaid facts and circumstances, there arise presumptions in favour of the complainant under Section 118(a) and Section 139 of the NI Act that the cheques in question were issued by the accused in favour of the complainant for consideration and in discharge of his legally enforceable liability towards the complainant. It is further submitted by him that aforesaid presumptions, though, rebuttable in nature but the accused has failed to rebut the same even by preponderance of probability. According to him, the accused has failed to prove the sole defence sought to be raised by him that he had already repaid almost entire loan amount to the complainant before the date of presentation of cheques in question or that the cheques in question were misused by the complainant. He has relied upon the following judgments in support of his contention that Section 138 is attracted even with respect to blank signed cheques:
i) ICDS Ltd. v. Beena Shabeer, 2002 Cri.L.J. 3935
ii) General Auto Sales v. Vijay Laxmi, 2005 Cri.L.J. 1454 CC NO. 1515/12 Vijay Bhola v. Vijay Nand Judgment dated 12.08.2013 Page 7 of 33
iii) Ravi Chopra v. State & anr., 2008(102) DRJ 147
iv) Lilly Kutty v. Lawrence, 2003(2) DCR 610
v) Krishana Janardhan Bhatt. v. DG Hegde AIR 2008 SC 1325
vi) Satish Shah v. Pankaj Mushroomwala, 1996 (3) RCR Criminal 720
10.On the other hand, briefly stated, submissions of Ld. Counsel for the accused are as follows:
a) This Court has no territorial jurisdiction to entertain the present complainant as none of the events leading to the commission of alleged offence has taken place within the jurisdiction of this Court and the complainant has invoked the jurisdiction of this Court only on the ground that legal notice was dispatched by him from within the jurisdiction of this court.
Ld. Counsel for the accused has relied upon the following judgments in support of the aforesaid submission:
i) Harman electronics (P) Ltd. v. National
Panasonic India, 156 (2009) DLT 160 (SC)
ii) Gopal Mishra v. State, 167 (2010) DLT 387 (Del)
iii) Laxmi Travels, Nagpur v. GE Countrywide
Consumer & Anr. 2006 Cri.L.J. 3704
iv) Ahuja Nandkishore Dongre v. State of
Maharshtra & Anr., 2007 Cri.L.J. 115
b) That admittedly the complainant does not possess the
money lending license and as such the liability, if any, of the accused towards the complainant is not legally enforceable in CC NO. 1515/12 Vijay Bhola v. Vijay Nand Judgment dated 12.08.2013 Page 8 of 33 view of bar created by The Punjab Registration of Money Lender's Act (as extended to Delhi).
c) The evidence by way of affidavit filed by the complainant in pre-summoning evidence cannot be relied upon since the same has never been tendered by the complainant in evidence and as such the documents such as cheques, return memos, legal notice, its dispatch and receipt by the accused are not proved by the complainant.
d) The cheques in question cannot be said to have been issued by the accused in discharge of any legally enforceable liability in as much as the complainant has failed to prove that the accused was actually owing the liability either equal to or of more than the cheques amount in question towards the complainant as on the date of presentation of aforesaid cheques. According to him, the complainant has admitted during cross examination that the accused had made a payment of Rs. 98,000/- on 06.05.2008 to the complainant towards loan in question besides the other payments made by the accused by way of cash as well as by way of deposits in bank accounts of the complainant from time to time as are evidenced by deposit slips Ex. DW-1/X (Colly). Besides, according to him, the accused has categorically deposed during his cross examination that the various amounts deposited by the complainant in the bank account of the accused were returned by him and the CC NO. 1515/12 Vijay Bhola v. Vijay Nand Judgment dated 12.08.2013 Page 9 of 33 accused has even otherwise proved by way of testimonies of DW-1 to DW-6 that he had already repaid almost the entire loan amount prior to presentation of cheques in question. Thus, according to him, since the accused has proved several payments towards loan in question after availing the same from the complainant, the consideration for issuance of cheques in question, at least to the extent of aforesaid payments, had ceased to exist as on the date of presentation of cheques in question and as such the same cannot be said to have been issued in discharge of any legally enforceable liability. Ld. Counsel for the accused has relied upon the following judgments in support of the aforesaid submission:
i) Angu Parameshwari Textiles (P) ... v. Sri Rajam & Co. decided by Hon'ble Madras High Court on 24.01.2001 and SLP against which was dismissed by Hon'ble Supreme Court in SLP (Crl.) No. 1994 of 2001 vide order dated 10.07.2001.
ii) Joseph Sartho v. G. Gopinathan & Anr. AIR 2009 (NOC) 402 (Ker.)
iii) M/s Alliance Infrastructure Project Pvt. Ltd. And Ors. v. Vinay Mittal, Crl. M.C. No. 2224/2009 decided by Hon'ble Delhi High Court on 18.01.2010.
11. I will deal with the aforesaid submissions made on behalf of both the parties in the subsequent paras.
CC NO. 1515/12Vijay Bhola v. Vijay Nand Judgment dated 12.08.2013 Page 10 of 33
12.So far as the first objection of Ld. Counsel for the accused against maintainability of the present complaint on the ground of lack of territorial jurisdiction of this Court is concerned, I do not find any substance in the same upon a careful consideration of the aforesaid submission in the light of judgments relied upon by both the parties. Hon'ble Supreme Court, while dealing with the issue of territorial jurisdiction of the Courts in trial of complaint cases u/s 138 of the NI Act, laid down the law on the aforesaid subject, way back in the year 1999, in the judgment reported as K. Bhaskaran vs. Sankaran Vaidhyan Balan and another AIR 1999 SC 3782 in following words i.e. "14. The offence under Section 138 of the Act can be completed only with the concatenation of a number of acts. The following are the acts which are components of the said offence: (1) drawing of the cheque, (2) presentation of the cheque to the bank, (3) returning the cheque unpaid by the drawee bank, (4) giving notice in writing to the drawer of the cheque demanding payment of the cheque amount, (5) failure of the drawer to make payment within 15 days of the receipt of the notice.
15. It is not necessary that all the above five acts should have been perpetrated at the same locality. It is possible that each of those five acts could be done at five different localities. But a concatenation of all the above five is a sine qua non for the completion of the offence under Section 138 of the Code. In this context a reference to Section 178(d) of the Code is useful. It is extracted below:
"178. (a)-(c)***
(d) where the offence consists of several acts done in different CC NO. 1515/12 Vijay Bhola v. Vijay Nand Judgment dated 12.08.2013 Page 11 of 33 local areas, it may be enquired into or tried by a court having jurisdiction over any of such local areas."
16.Thus it is clear, if the five different acts were done in five different localities any one of the courts exercising jurisdiction in one of the five local areas can become the place of trial for the offence under Section 138 of the Act. In other words, the complainant can choose any one of those courts having jurisdiction over any one of the local areas within the territorial limits of which any one of those five acts was done. As the amplitude stands so widened and so expansive it is an idle exercise to raise jurisdictional question regarding the offence under Section 138 of the Act." (Emphasis mine)
13. Ld. Counsel for the accused has relied upon the another division bench judgment of Hon'ble Supreme Court in Herman Electronics' case (Supra), wherein it was observed by Hon'ble Supreme Court that jurisdiction of the Court to try a criminal case is governed by the provisions of the Criminal Procedure Code and not on common law principle and after referring to provisions of section 177 to 179 of Criminal Procedure Code, it was further observed that the Court ordinarily will have jurisdiction only where the offence has been committed and Sections 178 and 179 are exceptions to Section 177, though all the aforesaid provisions presupposes that all the defences are local. Thereafter, while holding that the Delhi High Court had no jurisdiction to try the case and hence transferring the case pending in the Court of Ld. ASJ, New Delhi to the Court of Ld. District & sessions Judge, Chandigarh, the Hon'ble Supreme Court further observed as follows:
CC NO. 1515/12Vijay Bhola v. Vijay Nand Judgment dated 12.08.2013 Page 12 of 33 "13. It is one thing to say that sending of a notice is one of the ingredients for maintaining the complaint but it is another thing to say that dishonour of a cheque by itself constitutes an offence. For the purpose of proving its case that the accused had committed an offence under Section 138 of the Negotiable Instruments Act, the ingredients thereof are required to be proved. What would constitute an offence is stated in the main provision. The proviso appended thereto, however, imposes certain further conditions which are required to be fulfilled before cognizance of the offence can be taken. If the ingredients for constitution of the offence laid down in provisos (a), (b) and (c) appended to Section 138 of the Negotiable Instruments Act are intended to be applied in favour of the accused, there cannot be any doubt that receipt of a notice would ultimately give rise to the cause of action for filing a complaint. As it is only on receipt of the notice that the accused at his own peril may refuse to pay the amount.
Clauses (b) and (c) of the proviso to Section 138 therefore must be read together. Issuance of notice would not by itself give rise to a cause of action but communication of the notice would."
14. The Court further observed as follows:
17. Section 177 of the Code of Criminal Procedure determines the jurisdiction of a court trying the matter. The court ordinarily will have the jurisdiction only where the offence has been committed. The provisions of Sections 178 and 179 of the Code of Criminal Procedure are exceptions to Section 177. These provisions presuppose that all offences are local. Therefore, the place where an offence has been committed plays an important role. It is one thing to say that a presumption is raised that notice is served but it is another thing to say that service of notice may not be held to be of any significance or may be held to be wholly unnecessary. In Mosaraf Hossain Khan v.CC NO. 1515/12
Vijay Bhola v. Vijay Nand Judgment dated 12.08.2013 Page 13 of 33 Bhagheeratha Engg. Ltd. [(2006) 3 SCC 658 : (2006) 2 SCC (Cri) 98] this Court held: (SCC pp. 670-71, paras 30-32) "30. In terms of Section 177 of the Code of Criminal Procedure every offence shall ordinarily be inquired into and tried by a court within whose local jurisdiction it was committed. Section 178 provides for place of inquiry or trial in the following terms:
'178. Place of inquiry or trial.--(a) When it is uncertain in which of several local areas an offence was committed, or
(b) where an offence is committed partly in one local area and partly in another, or
(c) where an offence is a continuing one, and continues to be committed in more local areas than one, or
(d) where it consists of several acts done in different local areas,'
31. A bare perusal of the complaint petition would clearly go to show that according to the complainant the entire cause of action arose within the jurisdiction of the District Court of Birbhum and in that view of the matter it is that court which will have jurisdiction to take cognizance of the offence. In fact the jurisdiction of the Court of the Chief Judicial Magistrate, Birbhum, Suri, is not in question. It is not contended that the complainant had suppressed material fact and which if not disclosed would have demonstrated that the offence was committed outside the jurisdiction of the said court. Even if Section 178 of the Code of Criminal Procedure is attracted, the Court of the Chief Judicial Magistrate, Birbhum will alone have jurisdiction in the matter.
32. Sending of cheques from Ernakulam or the respondents having an office at that place did not form an integral part of 'cause of action' for which the complaint petition was filed by the appellant and cognizance of the CC NO. 1515/12 Vijay Bhola v. Vijay Nand Judgment dated 12.08.2013 Page 14 of 33 offence under Section 138 of the Negotiable Instruments Act, 1881 was taken by the Chief Judicial Magistrate, Suri."
.......
20 [Ed. Para 20 corrected vide Official Corrigendum No. F.3/Ed.B.J./25/2009 dated 21-3-2009.] . Indisputably all statutes deserve their strict application, but while doing so the cardinal principles therefor cannot be lost sight of. A court derives a jurisdiction only when the cause of action arose within its jurisdiction. The same cannot be conferred by any act of omission or commission on the part of the accused. A distinction must also be borne in mind between the ingredient of an offence and commission of a part of the offence. While issuance of a notice by the holder of a negotiable instrument is necessary, service thereof is also imperative. Only on a service of such notice and failure on the part of the accused to pay the demanded amount within a period of 15 days thereafter, the commission of an offence completes. Giving of notice, therefore, cannot have any precedent over the service. It is only from that view of the matter that in Dalmia Cement (Bharat) Ltd. v. Galaxy Traders & Agencies Ltd. [(2001) 6 SCC 463 : 2001 SCC (Cri) 1163 : AIR 2001 SC 676] emphasis has been laid on service of notice."
15. Now the dilemma which this Court faces is- which of the aforesaid two judgments of two co-ordinate benches of Hon'ble Supreme Court should be followed by this Court to decide whether or not this Court do have the jurisdiction to decide the present complaint case. It would be pertinent to note at this stage that immediately after passing of the aforesaid Judgment in Harman Electronics' case by Hon'ble Supreme Court in the year 2008, the Hon'ble Delhi High Court in WP CC NO. 1515/12 Vijay Bhola v. Vijay Nand Judgment dated 12.08.2013 Page 15 of 33 (C) 11911/2009 decided on 23.09.2009, while relying on the aforesaid judgment in Harman Electronics' case has directed all the subordinate Courts to return all the complaints to the complainants, for filing the same before the courts having jurisdiction in the matter, in all the cases where jurisdiction of the Courts at Delhi was invoked merely on the ground that legal notices in those cases were dispatched from Delhi. The aforesaid judgment/direction of the Hon'ble Delhi High Court was challenged in SLP (Civil) No. 20840/2009 and SLP (Civil) No. 35762/2009 (CC) and the Hon'ble Supreme Court while referring the matter to larger bench has stayed the operation of aforesaid judgment of Hon'ble Delhi High Court. Thus, in the absence of any authoritative pronouncement by a larger bench of the Supreme Court, the subordinate Courts need to go by the fundamental doctrine of stare decisis in order to find out the answer to the query posed by me hereinabove i.e. if there are two conflicting judgments of co-ordinate benches of the Supreme Court or of the High Courts; which of the aforesaid judgments should the subordinate court follow on the subject till the time, conflict is resolved by the judgment of a larger bench. It would, thus, be apposite to refer to the judgment of Constitution Bench of Hon'ble Supreme Court of India in Central Board of Dawoodi Bohra Community v. State of Maharashtra, (2005) 2 SCC 673, in this regard, wherein it was observed by Hon'ble supreme Court as follows:
"12. Having carefully considered the submissions made by the learned Senior Counsel for the parties and having examined CC NO. 1515/12 Vijay Bhola v. Vijay Nand Judgment dated 12.08.2013 Page 16 of 33 the law laid down by the Constitution Benches in the abovesaid decisions, we would like to sum up the legal position in the following terms:
(1) The law laid down by this Court in a decision delivered by a Bench of larger strength is binding on any subsequent Bench of lesser or coequal strength. (2) [Ed.: Para 12(2) corrected vide Official Corrigendum No. F.3/Ed.B.J./21/2005 dated 3-3-2005.] A Bench of lesser quorum cannot disagree or dissent from the view of the law taken by a Bench of larger quorum. In case of doubt all that the Bench of lesser quorum can do is to invite the attention of the Chief Justice and request for the matter being placed for hearing before a Bench of larger quorum than the Bench whose decision has come up for consideration. It will be open only for a Bench of coequal strength to express an opinion doubting the correctness of the view taken by the earlier Bench of coequal strength, whereupon the matter may be placed for hearing before a Bench consisting of a quorum larger than the one which pronounced the decision laying down the law the correctness of which is doubted. (3) [Ed.: Para 12(3) corrected vide Official Corrigendum No. F.3/Ed.B.J./7/2005 dated 17-1-2005.] The above rules are subject to two exceptions: (i) the abovesaid rules do not bind the discretion of the Chief Justice in whom vests the power of framing the roster and who can direct any particular matter to be placed for hearing before any particular Bench of any strength; and (ii) in spite of the rules laid down hereinabove, if the matter has already come up for hearing before a Bench of larger quorum and that Bench itself feels that the view of the law taken by a Bench of lesser quorum, which view is in doubt, needs correction or reconsideration then by way of exception (and not as a rule) and for reasons given by it, CC NO. 1515/12 Vijay Bhola v. Vijay Nand Judgment dated 12.08.2013 Page 17 of 33 it may proceed to hear the case and examine the correctness of the previous decision in question dispensing with the need of a specific reference or the order of the Chief Justice constituting the Bench and such listing. Such was the situation in Raghubir Singh [(1989) 2 SCC 754] and Hansoli Devi [(2002) 7 SCC 273] ." (Emphasis mine.)
16. Thus, in view of the aforesaid authoritative pronouncement of Hon'ble Supreme Court, unless and until the conflict in the law laid down in two judgments of Co-ordinate benches of Hon'ble supreme Court of India in K. Bhaskaran's case (Supra) and Herman Electronics Case (Supra) is resolved by a larger bench, this Court, in my considered opinion, should follow the judgment in K. Bhaskaran's case which was decided prior to Herman Electronics Case by a co-ordinate judgment of Hon'ble Supreme Court. While taking the aforesaid view, I am supported by a recent judgment of Hon'ble Delhi High Court in GE Capital v. Raheesuddin Khan, 2011(182) DLT 385. Thus, in view of the aforesaid discussions, in my considered opinion, this Court has the jurisdiction to try the present complaint since, admittedly, the legal notice was dispatched from the place within the jurisdiction of this Court. Even otherwise, in my considered opinion, the objection raised by the accused as to the maintainability of present complaint for want of territorial jurisdiction is not sustainable since the accused has already submitted to the jurisdiction of this Court and at no stage, until the conclusion of trial, the accused has raised such an objection and by virtue of trial of present CC NO. 1515/12 Vijay Bhola v. Vijay Nand Judgment dated 12.08.2013 Page 18 of 33 complaint case no failure of justice, in my considered opinion, has been occasioned to either of the parties.
17. It is next contended by Ld. Counsel for the accused that the present complaint is not maintainable since, admittedly, the complainant does not possess the money lending license under the Punjab Registration of Money Lenders' Act despite the fact that he is engaged in the business of money lending. There is no dispute about the proposition that if a person engaged in the business of money lending does not have the money lending license under the aforesaid Act, any loan given by him cannot be legally recovered through a court of law in view of the bar created by the aforesaid legislation. It is submitted by Counsel for the accused that the accused has moved an application for summoning the records of some of the cases filed by the complainant against several persons under Section 138 of the NI Act to prove that the complainant was engaged in the business of money lending and on 03.04.2012 the aforesaid application was dismissed as withdrawn in view of admission on the part of complainant that he had filed three cases u/s 138 of the NI Act against one Ms. Hema Verma and one case against Ms. Renu Thakur. According to him, the aforesaid admission on the part of complainant leads to an inference that the complainant is engaged in the business of money lending. I do not find any merit in the aforesaid submission made on behalf of the accused in as much as a bare perusal of order dated 03.04.2012 would clearly show that the complainant had CC NO. 1515/12 Vijay Bhola v. Vijay Nand Judgment dated 12.08.2013 Page 19 of 33 made it clear that the admission by him of the factum of pendency of aforesaid cases should not be deemed to be an admission on his part that he is engaged in the business of money lending and despite the aforesaid facts, the accused had withdrawn his application and hence the application was dismissed as withdrawn. Thus, in my considered opinion, the accused has failed to prove on record that the complainant is engaged in business of money lending even by preponderance of probabilities and hence the non-availability of money lending license with the complainant does not come in his way to prosecute the accused under section 138 of the NI Act.
18. The next contention of Ld. Counsel for the accused is that in the absence of tendering of the affidavit filed by the complainant at pre- summoning stage, the same cannot be read in evidence against the accused and in case the aforesaid affidavit is left out of consideration, then, there is effectively no evidence against the accused in as much as all the documents relied upon by the complainant in his complaint remains unproved and therefore the accused is entitled to be acquitted. The aforesaid contention, though seems to be plausible at first blush, however, in my considered opinion, is without any merit. In this regard, it would be pertinent to refer to a judgment o Hon'ble Delhi High Court in Ranbir singh Kharab v. Smt. Santosh 2007 II AD (Delhi) 316, wherein it has been held by Hon'ble Delhi High Court that when affidavit of the complainant submitted at preliminary stage is considered CC NO. 1515/12 Vijay Bhola v. Vijay Nand Judgment dated 12.08.2013 Page 20 of 33 by the Court at the time of passing of summoning order, then mere fact that the same was not formally tendered in evidence is of no consequences and such affidavit submitted at pre-summoning stage amounts to an evidence within meaning of Section 3 of Indian Evidence Act. In view of the aforesaid judgment non-tendering of the affidavit at the pre-summoning stage does not vitiate the summoning order and once the accused is summoned in view of the special procedure prescribed under the NI Act for disposal of complaint cases u/s 138 of the NI Act there is no need for leading any post summoning evidence by the complainant and immediately after explanation of accusations by the Court to the accused in terms of Section 251 Cr.P.C., in case the accused does not plead guilty and claims trial, the case shall be fixed for defence evidence unless an application under section 145(2) of the NI Act is moved by the accused for recalling the complainant and its witnesses for cross examination. And even if the complainant is recalled under Section 145(2) of the NI Act, he need not examine himself on oath and he shall be cross examined on the basis of affidavit filed by him at pre- summoning stage. While taking the aforesaid view, I find support from the law laid down by Hon'ble Supreme Court of India in Mandvi Cooperative Bank Ltd. v. Nimesh B. Thakore (2010) 3 SCC 83 and by Hon'ble Delhi High Court in Rajesh Agarwal v. State & Anr. 2010(171) DLT 51. Even otherwise, no prejudice has actually been caused to the accused by non-tendering of the affidavit as the complainant has been duly cross examined by his counsel on the basis of same affidavit. Thus, CC NO. 1515/12 Vijay Bhola v. Vijay Nand Judgment dated 12.08.2013 Page 21 of 33 the aforesaid contention of ld. Counsel for the accused is not sustainable and is accordingly rejected.
19. Now coming to the final contention of ld. Counsel for the accused i.e. the accused has successfully rebutted the presumption, if any, arising in favour of the complainant that the cheques in question were issued by the accused in favour of complainant in discharge of his legally enforceable liability towards the later. So far as the judgments relied upon by both the parties in support of their submissions are concerned, I would like to observe at the threshold that there is no dispute about the propositions of law set forth in the aforesaid judgments viz. I) Provisions of Section 138 of the NI act are attracted even in cases of blank signed cheques which are subsequently filled in by the payee as per the understanding between the parties, II) Section 138 of NI Act is not attracted in case the liability of drawer as on the date of presentation of cheque in question was less than the cheque amount in question, III) the presumptions arising in favour of the complainant under Section 118(a) and 139 of the NI Act are rebuttable in nature, IV) the presumptions can be rebutted by the accused by relying upon the material brought on record by the complainant and accused is not required to step into the witness box to rebut the same and V) the degree of proof required from the accused to prove his defence is preponderance of probabilities and accused is not required to prove his defence beyond reasonable doubts.
20. Now I will examine the facts of the present case in the light of CC NO. 1515/12 Vijay Bhola v. Vijay Nand Judgment dated 12.08.2013 Page 22 of 33 aforesaid prepositions of law laid down in the judgments relied upon by both the parties. The admitted facts of the case in hand are as follows:
The accused had availed the loan in question from the complainant and handed over the dateless cheques in question to the complainant and the aforesaid cheques were presented by the complainant after filling in the dates and the cheques were dishonoured on their respective dates of presentation, whereupon, complainant has served a legal notice of demand upon the accused, which was duly received by the later and though the accused has not made the payment of cheques in question as per demand of the complainant but he has responded to the same through his counsel.
21. In view of the aforesaid admitted facts, there arise twin presumptions under Sections 118(a) and 139 of the NI Act in favour of the complainant that the cheques in question were issued by the accused for valid consideration and in discharge of his legally enforceable liability towards the complainant. The accused has taken a defence that the cheques in question were handed over by him to the complainant as security and the same have been misused by the complainant despite the fact that he had already repaid almost entire loan amount to the complainant prior to presentation of cheques in question and as such he was not owing any liability to the extent of cheques amount in question as on the date of presentation of the cheques.
22.According to Ld. Counsel for the accused, the accused has proved his CC NO. 1515/12 Vijay Bhola v. Vijay Nand Judgment dated 12.08.2013 Page 23 of 33 defence by preponderance of probabilities not only by way of cross examination of complainant, but also, by examining six witnesses in his defence including himself. It is submitted by him that testimony of CW-1 is fraught with contradictions and hence no weight can be attached to his testimony. Some of the contradictions pointed out by him are as follows: a) though as per the complaint and affidavit the accused was required to repay the alleged loan with interest but during his cross examination dated 08.12.2010, he stated that he gave a friendly loan to the accused without interest and b) though the complainant in his cross examination dated 09.02.2011 has denied the suggestion that he had filed many cases u/s 138 of the NI Act against numerous persons but has admitted on 03.04.2012 before the Court that several cases filed by him against two other persons are also pending in other courts. Besides, according to him, the name of accused has not been shown by the complainant in the list of debtors in his income tax returns of the relevant period and even otherwise, according to him, a loan of more than Rs. 20,000/- could not have been given by the complainant to the accused except by way of cheque as per the provisions of Income Tax Act. Thus, according to him, the complainant is not a reliable witness and hence his testimony should be left out of consideration and in such an eventuality, the accused shall be entitled for acquittal as the complainant has failed to examine any witness except himself.
23.I have heard the aforesaid submissions made by d. Counsel for the CC NO. 1515/12 Vijay Bhola v. Vijay Nand Judgment dated 12.08.2013 Page 24 of 33 accused and have perused the record. On a careful consideration of aforesaid submissions in the light of factual matrix of the case as well as in the light of legal principles quoted hereinabove, I do not find any force in the submissions made on behalf of the accused. It is true that Income Tax Act bars a person from giving any loan of more than Rs. 20,000/- in cash but in view of admission on the part of accused that he had availed the loan in question from the accused, the aforesaid bar does not help the accused in as much as violation of the aforesaid provision of Income Tax Act, though may invite the penalty under the Income Tax Act for the violator, but, it does not render the liability legally unenforceable. For the same reasons, non-reflection of name of accused as a debtor in the Income Tax return of the complainant for the relevant year is of no consequence for the purposes of present proceedings in the peculiar facts and circumstances of case in hand. Moreover, the contradictions, if any, in the testimony of the complainant about the repayment of loan with or without interest is of little consequence unless and until the accused successfully proves at least one payment made by him to the complainant towards the loan in question. So far as the denial of suggestion by the complainant about pendency of several cases against numerous persons and later on his admission regarding pendency of several cases u/s 138 of the NI Act against two other persons is concerned, it would be pertinent to note that during the cross examination of the complainant dated 09.02.2011 a composite suggestion was given to him i.e. "that complainant is a professional CC NO. 1515/12 Vijay Bhola v. Vijay Nand Judgment dated 12.08.2013 Page 25 of 33 money lender and lend money on interest or that he has filed many cases under Section 138 of the NI Act against numerous persons" and thus the denial of the same was justifiable in as much as complainant has taken a categorical and consistent stand that he is not a professional money lender. Even otherwise, the aforesaid contradictions cannot be termed as material contradictions so as to render the entire testimony of complainant wholly unreliable.
24. Now coming to the testimonies of DW-3 and DW-4 about several payments made by the accused to the complainant in their presence, in my considered opinion, the same is of no consequence, in as much as, DW-3 has failed to depose that the payments were made by the accused towards the loan in question. Similarly, though DW-4 has deposed in his examination in chief that he was informed by the accused that he needed a sum of Rs. 30,000/- for making repayment against a loan of Rs. 2,22,000/- availed by him from the complainant but, during his cross examination, he deviated from the aforesaid track and deposed that he was never informed by the accused about the amount of loan taken by him from the complainant. Thus, in view of the aforesaid facts, by way of testimonies of DW-3 and DW-4, though, the accused might have proved certain payments made by him to the complainant but the witnesses have failed to depose that the said payments were made by him to the complainant towards the loan transaction in question.
25. Coming to the affidavit of DW-1, a perusal of the same would CC NO. 1515/12 Vijay Bhola v. Vijay Nand Judgment dated 12.08.2013 Page 26 of 33 show that it has nowhere been deposed by him that the payments reflected in the pay in slips or in his statements were made by him towards the loan in question. Similarly, though several deposits by both the accused and the complainant in the bank accounts of each other were admitted by them under section 294 Cr.P.C. but I need to examine whether the aforesaid deposits by the accused in the bank accounts of the complainant can be taken to have been made by him towards the loan in question. Ld. Counsel for the accused has relied upon the admissions on the part of complainant during his cross examination dated 25.06.2011 to connect the aforesaid payments with the loan transaction in question. Relevant portion of the cross examination dated 25.06.2011 is reproduced hereinbelow:
"It is correct to suggest that I have received an amount of Rs. 98,000/- from accused on 06.05.2008 towards the loan in question. It is correct to suggest that the accused used to deposit money in my bank account as well as through cash towards the loan in question."
26. According to Ld. Counsel for the accused, the aforesaid admissions on the part of the complainant, coupled with his admission of eight pay-in-slips produced by the accused which are marked as DW-1/X (Colly), would prove the defence of the accused that he had already made substantial payments to the complainant towards the loan in question prior to presentation of cheques in question and as such was not owing the liability towards the complainant to the extent of cheques amount in question.
CC NO. 1515/12Vijay Bhola v. Vijay Nand Judgment dated 12.08.2013 Page 27 of 33
27. On the other hand, it is contended by ld. Counsel for the complainant that a bare perusal of para 1 of affidavit filed by the complainant in his rebuttal evidence, which, according to him, remained uncontroverted during his cross examination, would show that the complainant has deposited several sums of money (22times) in the bank accounts of the accused from time to time and according to him, the deposits made by the accused through pay in slips Ex. DW-1/X (Colly) were against some of the aforesaid 22 deposits made by the complainant in bank accounts of accused and the same were not towards the loan in question. It was further contended by him that the aforesaid two statements out of cross examination of complainant dated 25.06.2011 should not be read in isolation and the entire evidence led by both the parties should be read as a whole and, if so read, the same would show that the alleged payment of Rs. 98,000/- made by the accused to the complainant and admitted by the complainant in his cross examination was towards two cash deposits of Rs. 49,000/- each made by the complainant in bank account of the accused on the same day i.e. 06.05.2008 and not towards the loan in question. Similarly, according to him, the other deposits made by the accused in bank account of the complainant were also towards the deposits made by the complainant in the bank accounts of accused and the same were not towards the loan in question.
28. In rebuttal, it is submitted by Ld. counsel for the accused that the CC NO. 1515/12 Vijay Bhola v. Vijay Nand Judgment dated 12.08.2013 Page 28 of 33 Court need not go into the aforesaid details in view of the categorical admissions on the part of complainant, which have been reproduced hereinabove, as the aforesaid admissions have never been explained by the complainant at any stage of the proceedings and it was only during the final arguments that the complainant had tried to get out of the aforesaid admissions by confusing the Court with imaginary calculations.
29. I have considered the submissions made on behalf of both the parties and have also perused the records. A careful reading of the affidavit of complainant in rebuttal evidence and cross examination of complainant dated 25.06.2011 would show that the complainant has admitted that amounts mentioned in his rebuttal affidavit prior to February 2008 was given and paid back to him in due course, meaning thereby, that none of the moneys deposited by him in the bank account of the accused upto February 2008 were due towards the accused and thereafter a total sum of Rs. 2,45,000/- was deposited by the complainant in the bank accounts of the accused and the same was repaid by the accused to the complainant on the same dates when the cash was deposited by the complainant in the bank accounts of accused. Thus admittedly the accused had repaid the entire amount deposited by the complainant in the bank accounts of accused in due course and even if the payment of Rs. 98,000/- made by the accused to the complainant on 06.05.2008 by way of a cheque is deemed to have been made by the CC NO. 1515/12 Vijay Bhola v. Vijay Nand Judgment dated 12.08.2013 Page 29 of 33 accused otherwise than towards the loan in question, still there are at least 6 deposit slips between 13.05.2008 and the date of presentation of cheques in question which, if read alongwith the admission on the part of the complainant that the accused used to deposit in his bank account and by way of cash amounts towards the loan in question, would reduce the liability of the accused under the loan agreement in question much below the cheques amount in question and as such despite the fact that initially the cheques in question were issued for a valid consideration but subsequently i.e. on the date of presentation of cheques in question, part of the consideration had already ceased to exist in view of the payments made by the accused to the complainant towards loan in question and as such the cheques which were admittedly given by the accused to the complainant simultaneously at the time of availing the loan in question could not have been presented by the complainant and if presented, dishonor of the same would not attract the liability under section 138 of the Negotiable Instruments Act in view of provisions of Section 45 of the NI Act and in view of judgment of Hon'ble Kerala High Court in Joseph Sartho v. Gopinathan Nair, 2009 (2) Crimes 463 (Kerala) and of Hon'ble Delhi High Court in Alliance Infrastructure Project Pvt. Ltd. v. Vinay Mittal, (2010) 115 DRJ 241. The relevant paras from the aforesaid judgment of Hon'ble Delhi High Court are reproduced hereinbelow for ready reference:
"8. The question which comes up for consideration is as to what the expression "amount of money" means in a case CC NO. 1515/12 Vijay Bhola v. Vijay Nand Judgment dated 12.08.2013 Page 30 of 33 where the admitted liability of the drawer of the cheque gets reduced, on account of part payment made by him, after issuing but before presentation of cheque in question. No doubt, the expression "amount of money" would mean the amount of the cheque alone in case the amount payable by the drawer, on the date of presentation of the cheque, is more than the amount of the cheque. But, can it be said the expression "amount of money" would always mean the amount of the cheque, even if the actual liability of the drawer of the cheque has got reduced on account of some payment made by him towards discharge of the debt or liability in consideration of which cheque in question was issued. If it is held that the expression "amount of money" would necessarily mean the amount of cheque in every case, the drawer of the cheque would be required to make arrangement for more than the admitted amount payable by him to the payee of the cheque. In case he is not able to make arrangement for the whole of the amount of the cheque, he would be guilty of the offence punishable under Section 138 of Negotiable Instruments Act. Obviously this could not have been the intention of the legislature to make a person liable to punishment even if he has made arrangements necessary for payment of the amount which is actually payable by him. If the drawer of the cheque is made to pay more than the amount actually payable by him, the inevitable result would be that he will have to chase the payee of the cheque to recover the excess amount paid by him. Therefore, I find it difficult to take the view that even if the admitted liability of the drawer of the cheque has got reduced, on account of certain payments made after issue of cheque, the payee would nevertheless be entitled to present the cheque for the whole of the amount, to the banker of the drawer, for encashment and in case such a cheque is dishonoured for wants of funds, he will be guilty of offence punishable under Section 138 of Negotiable Instrument Act.
9. I am conscious of the implication that the drawer of a CC NO. 1515/12 Vijay Bhola v. Vijay Nand Judgment dated 12.08.2013 Page 31 of 33 cheque may make payment of a part of the amount of the cheque only with a view to circumvent and get out of his liability under Section 138 of Negotiable Instrument Act. But, this can easily be avoided, by payee of the cheque, either by taking the cheque of the reduced amount from the drawer or by making an endorsement on the cheque acknowledging the part payment received by him and then presenting the cheque for encashment of only the balance amount due and payable to him. In fact, Section 56 of Negotiable Instrument Act specifically provides for an endorsement on a Negotiable Instrument, in case of part-payment and the instrument can thereafter be negotiated for the balance amount. It would, therefore, be open to the payee of the cheque to present the cheque for payment of only that much amount which is due to him after giving credit for the part-payment made after issuance of cheque. The view being taken by me was also taken by a Division Bench of Kerala High Court in Joseph Sartho v. Gopinathan Nair, 2009 (2) Crimes 463 (Kerala). As noted by the Hon'ble Supreme Court in Rahul Builders v. Arihant Fertilizers & Chemicals, (2008) 2 SCC 321, Negotiable Instruments Act envisages application of the penal provisions which needs to be construed strictly. Therefore, even if two views in the matter are possible, the Court should lean in favour of the view which is beneficial to the accused. This is more so, when such a view will also advance the legislative intent, behind enactment of this criminal liability." (Emphasis mine)
30. In view of the aforesaid discussions, in my considered opinion, the accused has successfully rebutted the presumptions under Sections 118(a) and 139 of the Negotiable Instruments Act by preponderance of probabilities and hence the accused is acquitted of charges under Section CC NO. 1515/12 Vijay Bhola v. Vijay Nand Judgment dated 12.08.2013 Page 32 of 33 138 of the Negotiable Instruments Act (as amended upto date).
31. Ordered Accordingly.
Pronounced in the Open Court on this 12th day of August, 2013. This Judgment consists of 33 signed pages.
(ARUN KUMAR) Metropolitan Magistrate:Dwarka Courts:
New Delhi CC NO. 1515/12 Vijay Bhola v. Vijay Nand Judgment dated 12.08.2013 Page 33 of 33