Delhi District Court
Omprakash Agarwal vs Kiran Chaudhary on 5 August, 2016
IN THE COURT OF METROPOLITAN MAGISTRATE
MUNICIPAL MAGISTRATE(EAST), KKD, DELHI
Presided by : Ms. Nabeela Wali
Complaint No. 46606/16 (old No. 251/15)
Unique ID No. 02402R0273052013
PS: Mandawali
Omprakash Agarwal,
S/o Late Sh. Kailash Chand Agarwal,
R/o D-80 Pandav Nagar,
Near Mother Dairy,
Delhi-110092 ........Complainant
VERSUS
Kiran Chaudhary,
W/o Sh. Vir Pal Singh,
R/o 129/6 Main Road,
Mandawali,
Delhi-110092 ........Accused
Complaint under section 138 of the Negotiable
Instruments Act
Offence complained of : U/s 138 NI Act
Date of commission of offence : 22.08.2013
Plea of Accused : Not guilty
Date of decision of the case : 05.08.2016
Final Order : Conviction
CC No. 46606/16 (old No. 251/15) page no. 1 /13
BRIEF FACTS AND REASONS FOR DECISION OF THE CASE:
1. Vide this Judgment I shall dispose of the present complaint U/s 138 of Negotiable Instrument Act, 1881 (in short NI Act) filed by complainant Sh. Omprakash Agarwal against accused Kiran Chaudhary. The genesis of litigation in the present case is, that at the request of accused, complainant advanced loan of Rs.2,00,000/- at interest of 48% per annum to the accused. In order to repay the part loan amount, accused issued a cheque bearing no. 000042 dated 29.07.2013 for Rs.1,00,000/- drawn on Bank of Baroda, Patparganj, Delhi branch in favor of the complainant. The said cheque on presentation was dishonored vide return memo dated 29.07.2013 with the endorsement, "Payment stopped by drawer". Thereafter the complainant sent legal notice dated 05.08.2013, however, despite service of legal notice the accused did not make any payment in discharge of her liability.
2. Cognizance of the offence U/s 138 NI Act was taken by Ld. Predecessor court and process was issued against the accused. On appearance of the accused and on furnishing copies of the document to her, the accused was examined under section 251 Cr.P.C, putting the substance of the accusations leveled against her. The accused pleaded not guilty and claimed to be tried.
3. To substantiate his case, complainant adduced his evidence by way of an affidavit (Ex. CW1/A) and relied upon these documents:
Original cheque bearing no. 000042 dated 29.07.2013 as Ex. CW1/1, Return memo dated 29.07.2013 as Ex. CW1/2, Legal notice dated 05.08.2013 as Ex. CW1/3, Original postal receipt as Ex. CW1/4, Net tracking report as Ex. CW1/5,
4. Complainant also examined witness from post office Sh. Hari Ram Bhati as CC No. 46606/16 (old No. 251/15) page no. 2 /13 CW-2 in pre summoning evidence, who filed on record duly stamp and signed net tracking report in respect of article no. ED904568026IN as Ex. CW2/1 & Ex. CW2/2. In his post-summoning evidence, complainant examined witness Sh. Amit Bhatt from Bank of Baroda, Patparganj, Delhi branch as CW-2 U/s 311 Cr. PC, who filed on record bank statement of the accused for account bearing no. 21290100025934 from 03.03.2011 to 12.10.2015 along with details of issuance of cheque book for the said account as Ex. CW2/1(colly) (OSR).
5. After conclusion of complainant's evidence, accused was examined U/s 313 Cr.P.C, wherein all the incriminating evidence was put to the accused. Accused denied having any liability towards the complainant and stated that the loan was taken from the complainant by her husband Sh. Vir Pal Singh and in lieu of that loan she had issued some cheques to the complainant. Accused denied receiving legal notice from the complainant and further denied her liability towards the complainant.
6. Accused examined herself as DW-1 and filed on record the following documents in support of her case:
Account maintained by the accused in respect of payment made to the complainant in her handwriting as Ex. DW1/1(OSR), Calculation for payment made in the handwriting of the complainant as Ex. DW1/2(OSR). Thereafter, on conclusion of defence evidence, matter was fixed for final arguments.
7. Final arguments were then addressed and heard on behalf of both the parties. Counsel appearing for complainant submitted that, the case of the complainant stands unrebutted and the accused is liable to be convicted. It was further contended by him that the accused has admitted taking loan from the complainant. He further submitted that accused has admitted signing the cheque in question and giving the same to the CC No. 46606/16 (old No. 251/15) page no. 3 /13 complainant for discharging her liability. Counsel for complainant also placed reliance on the following decisions in support of his averments:
Credential Leasing & Credits Ltd v. Shruti Investments & Anr Crl. L.P. 558/2014 I.C.D.S. Ltd v. Beena Shabeer & Anr Criminal Appeal No. 797/2002 The Jammu & Kashmir Bank v. Abhishek Mittal 2012 (1) DCR 189 C.C. Alavi Haji v. P. Mohammad (2007) 6 SCC 555
8. On the other hand, counsel for the accused has argued that the present complaint should be dismissed as there is no legal liability upon the accused towards the complainant. It was further contended by him that the present complaint is not maintainable as the same is pre-mature and has been filed before the expiration of the 15 days period stipulated in the legal demand notice in terms of section 138 of the Negotiable Instrument Act. Counsel for accused by way of written arguments has also contended that the complaint is not maintainable as the complainant in his legal demand notice has demanded the cheque amount along with the future interest of 48%p.a and hence the legal demand notice is illegal.
9. I have heard counsel for the parties and perused the record. Offence under S.138 N.I. Act is deemed to have been committed when any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank.
To institute a case under the said section, the following requirements are to be fulfilled:-
CC No. 46606/16 (old No. 251/15) page no. 4 /13 (i) that cheque has been presented to the bank within the period of its validity whichever is earlier;
(ii) the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 30 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;
(iii) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice.
Being cumulative, it is only when all the ingredients and aforementioned requirements are satisfied that the person who had drawn the cheque can be deemed to have committed an offence under Section 138 of the N.I. Act.
10. The above stated statutory conditions being sine qua non for the offence under section 138 NI Act have to be first satisfied in the present case before raising the presumption in favour of the complainant. It is contended by counsel for the accused that the present complaint is not maintainable as the same has been filed before the expiration of 15 days period stipulated in the legal demand notice dated 05.08.2013. Counsel for the accused further avowed that as per internet generated track report which is exhibited as CW1/5, last delivery was attempted upon the accused on 21/08/2013 and that the stipulated period of 15 days shall begin to run from the said date. According to the defence counsel the present complaint is not maintainable as the same has been filed on 27/08/2013. However, nothing has been placed on record by the defence counsel to support his submission that the stipulated period of 15 days shall begin to run from the date when the last delivery was attempted upon the accused by the postal department.
11. In order to examine the submissions of the defence counsel let us first examine section 27 of the General Clauses Act which is as follows:-
CC No. 46606/16 (old No. 251/15) page no. 5 /13 (S. 27. Meaning of service by post :-) Where any Central Act or Regulations made after the commencement of this Act authorizes or requires any document to be served by post, whether the expression served by post, whether the expression serve or either of the expressions give or send or any other expression is used, then, unless a different intention appears, the service shall be deemed to be effected by properly addresssing, pre-paying and posting by registered post, a letter contraining the document, and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post.
Reliance in this regard is also placed in the decision of C.C. Alavi Haji v. P. Mohammad (2007) 6 SCC 555, wherein the Hon'ble Apex Court held as under;
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 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 countrary 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.
Also the Hon'ble Apex Court in K. Bhaskaran v. Sankaran Vaidhyan Balan and Anr. (1999) 7 SCC 510 emphasizing that the provisions contained in Section 138 of the Act are required to be construed liberally, observed as under:
"If a strict interpretation is given that the drawer should have actually received the notice for the period of 15 days to start running no matter that the payee sent the notice on the correct address, a trickster cheque drawer would get the premium to avoid receiving the notice by different strategies and he could escape from the legal consequences of Section 138 of the Act. It must be borne in mind that Court should not adopt an interpretation which helps a dishonest evader and clips an honest payee as that-would defeat the very legislative measure."
CC No. 46606/16 (old No. 251/15) page no. 6 /13
12. In the case in hand as stated above, the legal demand notice was sent to the accused by post on 05.08.2013. The defence has not challenged the veracity of Internet generated track report which is exhibited as Ex. CW1/5. Accused in her cross examination has admitted that the address mentioned in the legal notice and the complaint is her correct address. As per exhibit CW1/5, the delivery was first attempted upon the accused on 06/08/2013. Thus, when the delivery of legal notice remained unsuccessful in all the attempts then in the opinion of this court the stipulated period of 15 days shall begin to run from 07/08/2013 and the cause of action to file the present complaint accrues on 22/08/13. Also the sender cannot be expected to know the number of delivery attempts the postman would make before sending the undelivered post back to him. He is anticipated to be heedful specially when he is hard-pressed to have his complaint filed within the period of 30 days after complying with all the requirements of the proviso to section 138 NI Act. The complaint in question has been filed on 27/08/2013 and in that case, in light of the above discussion, the argument of the defence counsel does not sustain.
13. Another averment made by the defence counsel challenging the maintainability of the present complaint is that the complainant in his legal demand notice has demanded the cheque amount along with the future interest of 48% p.a and hence the legal demand notice is illegal. Clause (b) of proviso to section 138 requires that the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque. Paragraph 6 of the demand portion of the legal demand notice Ex. CW1/3 is reproduced as under:
"That in the present circumstances I call upon you to pay, as per the provision of the aforesaid act, within 15 days from the date of receipt of this notice the amount of cheque Rs.1,00,000.00 (Rs. One lac only) together with a arrear of accrued interest together with CC No. 46606/16 (old No. 251/15) page no. 7 /13 further future agreed interest of 48% p.a. payable / compounded monthly to my client from the date of loan till the date of payment, in cash or by a bankers cheque to my client"
14. In Suman Sethi v. Ajay K. Churiwal (2000) 2 SCC 380 : 2000 SCC ( Cri) 414, it was observed that:
" It is a well-settled principle of law that the notice has to be read as a whole. In the notice, demand has to be made for the 'said amount' i.e. the cheque amount. If no such demand is made the notice no doubt would fall short of its legal requirement. Where in addition to the 'said amount' there is also a claim by way of interest, cost, etc. Whether the notice is bad would depend on the language of the notice. If in a notice while giving the break-up of the claim the cheque amount, interest, damages, etc. are separately specified, other such claims for interest, cost, etc. would be superfluous and these additional claims would be severable and will not invalidate the notice."
Thus, what is necessary is, making of a demand for the amount of money mentioned in the cheque in question, which is conspicuously stated in the legal notice sent to the accused in this case. The legal demand notice Ex.CW1/3, relied upon by the complainant is perfect in terms of section 138 NI Act, as it specifically demands the payment of the cheque amount of Rs. 1,00,000/- which is the amount for which the cheque in question was issued. Thus, this objection by the defence counsel, made as a last ditch effort against the maintainability of the present complaint also fails.
15. The maintainability of the present case having been established, let me now deal with the contentions raised by counsel for the accused to see whether accused has placed enough and cogent material before this court to rebut the said statutory presumption which arose in favour of the complainant. Section 118 of the NI Act inter alia provides that it shall be presumed, until the contrary is proved, that every negotiable instrument was made or drawn for consideration. Section 139 of the NI CC No. 46606/16 (old No. 251/15) page no. 8 /13 Act stipulates that unless the contrary is proved, it shall be presumed, that the holder of the cheque received the cheque, for the discharge of, whole or part of any debt or liability. The said presumptions are rebuttable in nature. In the present case since the accused has not only admitted issuing the cheque in question to the complainant but also her signature on the cheque in question, the presumption under section 139 of the Negotiable Instrument Act would operate. However, the section merely raises a presumption, and not the existence per-se of a legally recoverable debt. The accused has denied receiving any legal notice from the complainant, although the statutory presumption of delivery of legal notice is in favour of the complainant, in view of the observation in C.C. Alavi Haji v. P. Mohammad (2007) 6 SCC 555. The Hon'ble Apex court, in the present case held that it is no longer pre requisite that service of legal notice has to be proved. Even if the service of legal notice is not proved, then receipt of the summons on the complaint is sufficient to raise the cause of action U/s 138 NI Act in favour of the complainant.
16. In a trial under section 138 NI Act, an accused has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case the non-existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. In the present case the complainant has stated that the cheque in question was issued against discharge of liability arising out of loan transaction between the parties. Since the cheque in question bears the name of complainant and the present complaint has been filed by the complainant in his own name therefore, presumption arises u/s 118 (a) & 139 of NI Act in favour of the complainant that the cheque was issued in discharge of a legal liability. The onus to rebut this presumption is on the accused. The accused has disputed her legal liability to make payment on the ground that the cheques in question was issued to the complainant as security against the loan taken by her husband from the complainant.
CC No. 46606/16 (old No. 251/15) page no. 9 /13
17. It is the case of the complainant that the accused is the wife of an old friend and considering the friendly relations he had advanced a loan of Rs. 2,00,000/- to the accused at the rate of interest of 48% per annum. Accused has not denied knowing the complainant, rather during framing of notice u/s 251 Cr.P.C and in her statement U/s 313 Cr.P.C she has admitted that her husband had taken loan from the complainant. It would be worthwhile to reproduce the portion of examination in chief of the accused as under:
"I have not taken any amount from the complainant whatsoever. My husband had taken a loan of Rs.2,00,000/- from the complainant in February 2011....The cheques given my husband and the cheques in question given by me were for security only and they were given at the insistence of the complainant. When the complainant misused the cheques in question for Rs.20,000/- against me then I issued stop payment instructions for the security cheque of Rs.1,00,000/- given by me to the complainant....The complainant has given the loan to my husband and not to me, but I had also given security cheques on behalf of my husband. The security cheques of Rs.7000/- given by my husband were of SBI Bank and the complainant told us that those cheques had became outdated and therefore asked for issuance of new security cheques, after which I gave the cheques in question as security to the complainant."
18. Thus, in view of the above testimony of the accused there remains no doubt that the accused had issued the cheque in question to the complainant to discharge the liability against the loan of Rs.2,00,000/- advanced by the complainant. The only defence taken by the accused in the present case is that the cheque in question was issued as security against the loan of Rs.2,00,000/- taken by the husband of the accused and that she herself is not liable for the cheque in question. However this submission of the accused does not hold good by reason of the fact that Section 138 CC No. 46606/16 (old No. 251/15) page no. 10 /13 of the NI Act provides for issuance of a cheque to another person towards the discharge in whole or in part of any liability. The Hon'ble Apex Court in I.C.D.S. Ltd v. Beena Shabeer & Anr (AIR 2002 SC3014) was pleased to observe as under:
"......The commencement of the Section stands with the words "where any cheque" The above noted three words are of excrement significance, in particular, by reason of the user of the word "any"--the first three words suggest that in fact for whatever reason if a cheque is drawn on an account maintained by him with a banker in favour of another person for the discharge of any debt or other liability, the highlighted words if read with the first three words at the commencement of Section 138, leave no manner of doubt that for whatever reason it may be, the liability under this provision cannot be avoided in the event the same stands returned by the banker unpaid. The legislature has been careful enough to record not only discharge in whole or in part of any debt but the same includes other liability as well."
Since in the case in hand it is admitted that the accused is the drawer of the cheque in question there cannot be any embargo in the manner of application of the provisions of section 138 NI Act against her.
19. Also, in as much as the statutory presumption is in favour of the complainant, the complainant need not prove anything else apart from the fact that the accused issued the cheque bearing her signatures, that the same was dishonored on presentation, that legal notice was sent to the accused demanding payment of cheque amount and failure of accused to pay the cheque amount within 15 days after receipt of legal notice. In the instant case, all of the above have been proved by the complainant. Accused has herself admitted advancement of loan by the complainant. Nothing has come in the cross examination of the complainant that renders the story of the complainant unbelievable.
CC No. 46606/16 (old No. 251/15) page no. 11 /13
20. It is stated by the accused that her husband has already paid part amount of the loan to the complainant in cash and has also placed on record Ex. DW1/1 & Ex. DW1/2 (OSR) in support of her submissions. However, the same does not lend any credence to to the case of the accused, as Ex. DW1/1 & Ex. DW1/2 (OSR) are mere photocopies of the record maintained by the accused, which does not have any evidentary value. Hence, the accused has also failed to rebut the statutory presumption in favour of the complainant as the defence disclosed is quite unbelievable. It is seen from the evidence of the complainant that he has categorically stated that the accused did not pay the cheque amount within 15 days of receipt of legal notice sent to him. It has already been discussed above that the accused cannot take the defence of not receiving legal notice sent by the complainant, therefore, she was liable to pay the cheque amount within 15 days of receipt of summons from the Court. Accused has stated in her statement U/s 313 Cr. PC that she did not make the payment as she was not liable to pay in respect of the cheque in question. Therefore, the fact that the payment was not made has been admitted by the accused and thus, stands proved.
21. As observed by Hon'ble High Court of Delhi in V.S. Yadav v. Reena 2010 (4) JCC (NI) 323, the statutory presumption under NI Act are mandatory in nature and the same can not be rebutted on mere explanations / bald statements made by the accused U/s 251 Cr. PC and Section 313 Cr. PC without leading any evidence. Also Hon'ble Supreme Court in Kumar Exports v. Sharma Carpets (2009) 2 SCC 513 held, that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non-existence was so probable CC No. 46606/16 (old No. 251/15) page no. 12 /13 that a prudent man would under the circumstances of the case, act upon the plea that they did not exist.
22. In the instant case accused has miserably failed to discharge the onus of proving her defence even on the basis of preponderance of probabilities. The evidence adduced by the accused in the present case is not sufficient to rebut the statutory presumption in favour of the complainant. In light of the above discussion, complainant can be said to have discharged the burden upon him to prove the above said requirements for offence u/s 138 NI Act. Accordingly, accused Kiran Chaudhary, W/o Sh. Vir Pal Singh, R/o 129/6 Main Road, Mandawali, Delhi-110092 stands convicted for offence U/s 138 Negotiable Instrument Act.
Copy of the judgment be given to the convict free of cost. Convict be now heard on quantum of sentence.
Announced in the open court
today i.e. 05.08.2016 (NABEELA WALI)
MM:KKD:DELHI:05.08.2016
This judgment contains 13 pages all signed by the presiding officer.
CC No. 46606/16 (old No. 251/15) page no. 13 /13