Delhi District Court
Arun Kher vs Nehru Jain on 5 April, 2014
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IN THE COURT OF MS PREETI PAREWA : METROPOLITAN
MAGISTRATE - 02 : SOUTH : SAKET COURT : NEW DELHI
Arun Kher vs Nehru Jain
CC No 5026/1
U/s 138 Negotiable Instruments Act
Unique Identification No. :
02406R0259262011
JUDGMENT
(1) Serial number of the case : 5026/1
(2) Name of the complainant : Arun Kher
s/o Late Sh Ram Pal
(3) Name of the accused, Nehru Jain
parentage & residential address : s/o Late Sh R B Jain
r/o 78A, Dilshad
Garden, Shahdra, New
Delhi110095
(4) Offence complained of or proved : 138 Negotiable
Instruments Act
(5) Plea of the accused : Pleaded not guilty
Arun Kher vs Nehru Jain CC No. 5026/1
Page 1 of 24
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(6) Final Order : CONVICTED
(7) Date of Institution : 10/10/2011
(8) Date on which reserved for
judgment : 19/03/2014
(9) Date of Judgment : 05/04/2014
BRIEF STATEMENT OF THE REASONS FOR THE DECISION
1. By way of present judgment I shall decide the present complaint case under Section 138 of Negotiable Instrument Act 1881 (as amended up to date, hereinafter said as N I Act) filed by the complainant Arun Kher against the accused Nehru Jain.
2. The factual matrix as per the allegations in the complaint which are necessary for the disposal of the present case are that the accused had entered into an oral sale agreement in respect of property Arun Kher vs Nehru Jain CC No. 5026/1 Page 2 of 24 3 bearing no. E115, DDA, LIG Flat, Ground Floor, Pocket E, Dilshad Garden, Delhi95 on 20/05/2010 for a sum of Rs.31,50,000/ with the complainant. Accused issued two post dated cheques regarding the Bayana bearing nos. 263864 and 263867 both dated 15/07/2011 for Rs.7,00,000/ each both drawn on State Bank of India, Dilshad Garden, Delhi. It is further alleged that the complainant presented the aforesaid cheques given by the accused for encashment and on presentation of the same, both the cheques were dishonoured vide cheque returning memos dated 24/08/2011 with remarks "Funds Insufficient". It is further alleged that the complainant has given a legal notice of demand dated 01/09/2011 to the accused through registered AD and Speed Post on 02/09/2011 and the same was served upon the accused thereby calling upon the accused to make the payment on the cheques amount. It is alleged that the accused failed to pay any sum in response to the legal demand notice as a Arun Kher vs Nehru Jain CC No. 5026/1 Page 3 of 24 4 result of which the complainant has filed the present complaint for prosecution of the accused U/s 138 of N I Act.
3. Thereafter the complainant led his pre summoning evidence by way of an affidavit and after hearing the ld counsel for the complainant and considering the entire material and documents on record, summons were issued against the accused by the Court vide order dated 08/12/2011 for the offence U/s 138 N I Act. However, the accused did not appear in the court, seeking exemption on medical grounds and notice U/s 251 Criminal Procedure Code (hereinafter said "the code") dated 21/01/2013 was served upon the accused through his counsel to which he pleaded not guilty for the accused and claimed trial.
Arun Kher vs Nehru Jain CC No. 5026/1 Page 4 of 24 5
4. Sh Arun Kher, the complainant got himself examined as CW1 and filed an affidavit in evidence ExCW1/A. He got exhibited the original cheques in question as Ex. CW1/1 and Ex. CW1/2, the Cheque returning memo as Ex.CW1/3 and Ex. CW1/4, legal notice of demand as Ex. CW1/5. Regd A.D Receipt and Speed Post as Ex. CW1/6, returned AD Card as Ex. CW1/7. CW1 was cross examined by the Ld. Counsel for the accused. Thereafter, the complainant evidence was closed at request of the complainant.
5. The statement of accused was recorded U/s 313 of the Code in which all the incriminating evidence were put to the accused Nehru Jain in which he admitted that he had issued the cheques in question. But it was further submitted by the accused that he has not delivered the cheques in question to the complainant for Arun Kher vs Nehru Jain CC No. 5026/1 Page 5 of 24 6 discharging any liability. It was further stated by the accused that the cheques in question were handed over by the accused to the complainant in a blank manner after putting his signatures thereon as a security at the time of entering into the deal with the complainant. Accused also stated that he has not received the legal demand notice from the complainant. The accused further stated that the present complaint case has been falsely instituted against him and his security cheques are misused by the complainant just to implicate him in the present case. Altogether accused denied any liability towards complainant and wished to lead evidence in his defence.
6. Thereafter, the case was fixed for defence evidence. Accused examined himself as DW1. Kamlesh Sharma was examined as DW2 and Mayank Jain was examined as DW3. DW1, DW2 and Arun Kher vs Nehru Jain CC No. 5026/1 Page 6 of 24 7 DW3 were cross examined by the Ld.Counsel for the complainant. Thereafter, defence evidence was closed at request of the accused and the case was listed for final arguments.
7. Final arguments were addressed on behalf of both the parties. I have heard Ld. Counsels for both the parties and have given my anxious and thoughtful consideration to submissions made. Further I have also carefully perused the entire case file and the evidence on record. In the instant case notice U/s 251 CrPC was served on accused through counsel vide order dated 21/01/2013. It is settled law that when the personal appearance of the accused has been exempted by the Magistrate under Section 205 CrPC and he is represented by a lawyer, the Magistrate may take the plea of the lawyer under Section 251 CrPC (Bhaskar Industries Ltd vs Bhiwani Devi and Apparels Ltd (2001) 7 SCC 401).
Arun Kher vs Nehru Jain CC No. 5026/1 Page 7 of 24 8
8. Before proceeding further it is imperative for me to go through the relevant provisions of law :
"138. Dishonour of cheque for insufficiency, etc., of funds in the account:Where 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, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both : Provided that nothing contained in this section shall apply unless (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, Arun Kher vs Nehru Jain CC No. 5026/1 Page 8 of 24 9 to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
Explanation:For the purpose of this section, "debt or other liability" means a legally enforceable debt or other liability.
APPRECIATION OF EVIDENCE IN THE LIGHT OF INGREDIENTS OF SECTION 138 NI ACT
9. The presentation, dishonor of the cheques in question Ex. CW1/1 and Ex. CW1/2 and the cheque returning memo Ex.CW1/3 and Ex. CW1/4, have not been challenged by the accused. Therefore, considering the entire evidence on record it stands duly proved that the Cheques in question Ex. CW1/1 and Ex. CW1/2 were Arun Kher vs Nehru Jain CC No. 5026/1 Page 9 of 24 10 dishonored vide cheque returning memo Ex.CW1/3 and Ex. CW1/4 with the reason "Funds Insufficient". The accused also admitted the oral sale agreement for the above mentioned flat between him and the complainant.
10. In the instant case specifically three fold defence has been taken by the accused. Firstly, that he has not been served with any legal demand notice by the complainant. Secondly, that apart from the signatures no other particulars in the cheques in question Ex. CW1/3 and Ex. CW1/4 has been filled by him. Thirdly that he has made cash payments to the amount of RS. 28.5 lacs in lieu of the sale transaction and further he has not given the cheques in question to the complainant in discharge of his liability and the same were given by him as security to the complainant at the time of the sale transaction.
Arun Kher vs Nehru Jain CC No. 5026/1 Page 10 of 24 11
11. Coming to the first line of defence taken by the accused, in the case in hand, the complainant (CW1), Sh. Arun Kher has specifically stated in his affidavit of examination in chief that he has got issued the legal notice of demand dated 01.09.2011 which is Ex. CW1/5 and it was sent to the accused vide registered Post and Speed Post on 02.09.2011 receipts of which are Ex. CW1/6. The return AD Card is Ex. CW1/7 is also placed on record by the complainant.
12. The accused has denied the receipt of legal demand notice at the time of his statement U/s 313 of the Code. However the complainant has in its evidence, placed on record the reply to the legal notice Ex. CW1/8 dated 08.09.2011 sent by the accused to the complainant on recipient of the legal notice. A bare perusal of the reply would reveal that the accused has not only received the legal demand notice, but also chose to reply the same through his counsel.
Arun Kher vs Nehru Jain CC No. 5026/1 Page 11 of 24 12 Therefore, I hold that the legal notice of demand Ex. CW1/5 was duly served upon the accused.
13. Now coming to the second line of defence taken by the accused that apart from the signatures no other particular in the cheques in question Ex. CW1/1 and Ex. CW1/2 has been filled by him. It is not disputed by the accused that the cheques in question Ex. CW1/1 and Ex. CW1/2 are drawn on the account maintained by him. Further signature on the cheques in question Ex. CW1/1 and Ex.CW1/2 have also not been disputed by the accused. During the defence evidence accused as DW1 has specifically deposed that except signatures other particulars in the cheques in question has not been filled by him. During the course of arguments Ld. Counsel for the accused also contended that the except signatures other particulars on the cheques in question has not been filled by the accused.
Arun Kher vs Nehru Jain CC No. 5026/1 Page 12 of 24 13 However, a bare perusal of the cheques in question only goes on to show that the signatures and other particulars have been filled in the same handwriting and by the same ink. Further, DW2 in her examination in chief has specifically stated that the cheques in question were issued in filled up condition by the accused. Further DW3 in his chief as well as cross examination supported that the cheques were issued by the accused as part payment for the sale transaction. It is trite to say that by putting the name and date there is no material alteration on the cheque U/s 87 of the NI Act. There is no rule of banking business that the name of the payee as well as the amount should be written by the drawer himself as no law provides that in case of cheque the entire body has to be written by the drawer only. Therefore, once the signature on the cheque in question is admitted the plea that particulars in the cheques in question has not been filled by the drawer is of no consequence. (Reliance placed on Arun Kher vs Nehru Jain CC No. 5026/1 Page 13 of 24 14 T. Nagappa Vs. Y.R. Muralidhar, (2008) 5 SCC 633, Ravi Chopra Vs. State and Another, 2008(2) JCC (NI) 169, Delhi, Jaipal Singh Rana Vs. Swaraj Pal 149 (2008) DLT 682, P.S.A. Thamotharan Vs. Dalmia Cements (P) Ltd., 2005 (1) JCC (NI) 96 Madras, Jammu & Kashmir Bank vs. Abhishek Mittal, 2012 CD DCR 189). Therefore the arguments and contentions of the accused in this regard also hold no ground.
14. Now coming to the third line of defence taken by the accused that he has made payments against the Cheques in questions Ex. CW1/3 and Ex. CW1/4 and the cheques in question were not given by him to the Complainant in discharge of his liability and the same were given as security to the complainant at the time of taking possession of the flat in respect of which the sale agreement was entered into between the parties. No doubt the crux of penal liability under Arun Kher vs Nehru Jain CC No. 5026/1 Page 14 of 24 15 Section 138 of the NI Act is that the Cheque in question must be issued for the discharge of any legal debt or liability. Existing of legal debt or liability is sine qua on for constituting the offence.
15. Before I advert to the above said line of defence taken by the accused, it is imperative for me to notice the presumptions under Sections 118(a) and 139 of the NI Act which read as under:
"118. 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;"
"139. 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, Arun Kher vs Nehru Jain CC No. 5026/1 Page 15 of 24 16 in whole or in part, of any debt or other liability.
16. The Division bench of Hon'ble Supreme Court in Krishna Janardhan Bhat Vs. Dattatraya G. Hegde, (2008) 4 SCC 54, has held that the accused can discharge the burden of presumption U/s 118 and U/s 139 of the NI Act by raising a probable defence on the strength of preponderance of probabilities.
17. In Rangappa Vs. Sri Mohan AIR 2010 SC 1898 the Hon'ble Supreme Court has held that it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of `preponderance of probabilities'. The accused can rely on the materials submitted by the complainant in order to raise such a defence.
Arun Kher vs Nehru Jain CC No. 5026/1 Page 16 of 24 17
18. From the reading of the above said provisions and the judgments the position of law which emerges is that once execution of the promissory note is admitted, the presumption under Section 118(a) and Section 139 of the NI Act would arise that it is supported by a consideration. Such presumptions are rebuttable. The accused can prove the nonexistence of a consideration by raising a probable defence. If the accused discharges the initial onus of proof by showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the Complainant who will be obliged to prove it as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument. The burden upon the accused of proving the nonexistence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies.
Arun Kher vs Nehru Jain CC No. 5026/1 Page 17 of 24 18 In case, where the accused fails to discharge the initial onus of proof by showing the nonexistence of the consideration, the complainant would invariably be held entitled to the benefit of presumption arising under Section 118(a) and Section 139 of the NI Act in his favour.
19. Now coming to the instant case, the accused has admitted that he had entered into a deal with the complainant for the purchase of a flat for Rs. 31.5 lacs which belonged to the brother of the complainant. However, the accused has deposed that he has already paid an amount of Rs. 28.5 lacs in cash in installments to the complainant and an amount of Rs. 3 lacs only was due to the complainant. However, in his cross examination, he has deposed that he has no receipts in support of the amount paid by him in cash to the complainant nor is this amount reflect in his Income Tax Arun Kher vs Nehru Jain CC No. 5026/1 Page 18 of 24 19 returns. Further during the examination of DW2, he has deposed that the cheques in question were meant to be encashed for the payment of the flat. In his examination in chief, DW3 has also stated that the cheques in question were issued to account for the income in white according to the prevalent circle rates.
20. It is trite to say that mere denial on the part of the accused and stating that the entire liability has been paid by him and further labeling the Cheques in question as security cheques would not absolve him from any liability. It was for the accused to prove the circumstances under which the cheques in question Ex. CW1/1 and Ex. CW1/2 were issued by him by leading cogent evidence so as to discharge and rebut the presumption raised against him by the Statute U/s 139 and 118 (a) of the NI Act.
Arun Kher vs Nehru Jain CC No. 5026/1 Page 19 of 24 20
21. The accused has not brought any material on record and also no cogent explanations or any probable defence which would rebut the shadow of presumption existing in favour of the Complainant. This court does not find any force in the arguments advanced by the learned counsel for the accused that he has succeeded in rebutting the presumption under Section 139 of the Act.
22. From the materials brought on record and evidence led by the parties, it stands duly proved that the accused has failed to rebut the presumptions U/s 118 (a) and section 139 of the NI Act. Therefore, I hereby hold that the Complainant has proved and substantiated the allegations that the cheques in question Ex. CW1/1 and Ex. CW1/2 were issued by the accused in discharge of his legal liability and for consideration.
Arun Kher vs Nehru Jain CC No. 5026/1 Page 20 of 24 21
23. Further CW1 has also deposed in his examination in chief by way of affidavit that despite service of legal demand notice Ex CW1/5 the accused has failed to make the payment. Ld counsel for the accused has submitted that the accused has made the payment against the Cheques in question Ex.CW1/1 and Ex. CW1/2 by way of cash in different installments. However, he has not brought anything on record to support this contention. Therefore considering the entire evidence placed on record, it also stands duly proved that the accused has failed to make the payment of the Cheques in question Ex. CW1/1 and Ex. CW1/2 within 15 days from the receipt of the legal demand notice.
24. Accordingly, in view of the facts, evidence led by both the parties coupled with my discussion above, I hereby hold that the Arun Kher vs Nehru Jain CC No. 5026/1 Page 21 of 24 22 Complainant has proved and substantiated its allegations against the accused and all the ingredients for the offence under section 138 of the NI Act have been proved against the accused. Accordingly, accused Nehru Jain is hereby convicted of the offence u/s 138 NI Act.
Announced in the open court on 05/04/2014 (PREETI PAREWA) Metropolitan Magistrate02/N I Act/South Saket Court/New Delhi Certified that this judgment contains 22 pages and each page bears my signature.
(PREETI PAREWA)
Metropolitan Magistrate02/N I Act/South
Saket Court/New Delhi
Arun Kher vs Nehru Jain CC No. 5026/1
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IN THE COURT OF MS PREETI PAREWA : METROPOLITAN MAGISTRATE - 02 : SOUTH : SAKET COURT : NEW DELHI Arun Kher vs Nehru Jain CC No 5026/1 U/s 138 Negotiable Instruments Act ORDER Ld. counsel for convict requests for taking lenient view on the ground that convict is not a previous convict and he is 55 years old and, therefore, should be dealt with leniently.
On the other hand, Ld. counsel for the complainant requests for maximum punishment to the convict and requests that no leniency should be shown towards the convict as the complainant has been pursuing the present complaint since the year 2011. Counsel for complainant has further requested for strictest punishment of two years to the convict as well as compensation of twice the cheque amount as the convict has dragged the case with no genuine defence and no mitigating circumstances against him.
I have heard the submissions made by both the sides. I have also Arun Kher vs Nehru Jain CC No. 5026/1 Page 23 of 24 24 considered the circumstances of the case. Punishment awarded to the convict must be commensurate with the gravity of offence committed by the convict and all the mitigating and extenuating circumstances should be looked at before awarding punishment to the convict.
Therefore, keeping in view the arguments and totality of circumstances, convict is hereby sentenced to simple imprisonment for one year and further directed to pay a compensation of twice the cheque amount which is Rs.28,00,000/ (Twenty Eight Lakhs) within a period of 30 days to the complainant. It is ordered that the compensation amount if not paid in time, shall be recoverable under the provisions of section 421 CrPC.
Copy of the order be given dasti to the convict. Announced in the open court on 09/04/2014 (PREETI PAREWA) Metropolitan Magistrate02/N I Act/South Saket Court/New Delhi Arun Kher vs Nehru Jain CC No. 5026/1 Page 24 of 24