Delhi District Court
Mudibasappa vs The State Of Gujarat on 2 August, 2023
DLST020038852020
Registered on : 10.02.2020
Presented on : 12.02.2020
Decided on : 02.08.2023
Decision : Convicted
IN THE COURT OF
METROPOLITAN MAGISTRATE (NI ACT)
AT SOUTH, SAKET DISTRICT COURT
(PRESIDED OVER BY MR.KAWAL SINGH)
CT Cases/3545/2020
CNR NO.DLST 020038852020
JUDGMENT
ANKUR TRADE LINKS (P) LTD.
Office at T24A, 1st Floor, Green Park, New Delhi.
Through its Authorized Representative Mr.Ram Shankar ..............Complainant VERSUS PARAS RAM YADAV son of Mr.Ratan Lal r/o 122, Village, Mirzapur, Post Office Nimka, Faridabad, Haryana.
.............. Accused Digitally signed KAWAL by KAWAL SINGH SINGH Date: 2023.08.02 15:33:38 +0530 CT Cases 3545/2020 Ankur Trade Links (P) Ltd. v. Paras Ram Yadav Page No.1 of 18 Offence punishable under section 138 of Negotiable Instruments Act, 1881 STATEMENT IN BRIEF OF THE DECISION WITH REASONS FACTUAL MATRIX
1. The instant proceedings have originated out of a complaint preferred by Mr.Ram Shankar (AR of the complainant) against Mr.Paras Ram Yadav (accused) for the offence under section 138, Negotiable Instruments Act, 1881 (hereinafter referred to as "NI Act").
2. A succinct account of the facts in the complaint is that, the accused has approached the complainant and requested for availing a loan facility for purchase of a vehicle. After considering his request the complainant has provided the finance facility under the loan agreement number A380126, which was to be repaid in equated monthly installments. In view of the aforesaid liability, the accused had issued cheque in question bearing number 090584 dated 30.12.2019 for a sum of Rs.1,82,610/ drawn on Oriental Bank of Commerce. (hereinafter referred to as the "cheque in question").
3. When the complainant presented the cheque in question for encashment, the same was returned unpaid upon presentation for the reason 'funds insufficient' vide return memo dated 02.01.2020.
Digitally signed by KAWALCT Cases 3545/2020 KAWAL SINGH Date: Ankur Trade Links (P) Ltd. v. Paras Ram Yadav SINGHPage2023.08.02 No.2 of 18 15:33:50 +0530 A legal notice dated 07.01.2020 was duly sent by the complainant to the accused in this regard, but to no avail as the accused failed to pay the amount of cheque in question within the prescribed period. Hence, the present complaint under Section 138 of NI Act was filed.
APPEARANCE OF ACCUSED AND TRIAL
4. The accused entered appearance in response to summons on 06.03.2023. Notice of accusation under Section 251, Code of Criminal Procedure, 1973 (hereinafter referred to as "Cr.P.C.") was served upon accused to which he pleaded not guilty and claimed trial thus, his plea of defence was recorded. The accused admitted his signature on the cheque in question and claimed that the rest of the particulars were not filled up by him. Accused further deposed that the complainant had financed an auto which was to be repaid in 23 installments of Rs.8750/. Accused also deposed that he had already repaid more than half of the installments to the complainant. Accused deposed that the cheque in question including other five cheques had been given to the complainant for security purpose only and he is willing to pay the remaining amount to the complainant.
5. The complainant was crossexamined after allowing the application under Section 145 (2) of NI Act. Following the KAWAL Digitally signed by KAWAL SINGH CT Cases 3545/2020 SINGH Date: 2023.08.02 15:33:59 +0530 Ankur Trade Links (P) Ltd. v. Paras Ram Yadav Page No.3 of 18 closing of complainant evidence, statement of accused under Section 313 Cr.P.C. was recorded wherein the incriminating evidence were denied by him.
EVIDENCE LED BY THE COMPLAINANT
6. To support his case, the complainant examined himself as CW1 and tendered his evidence by way of affidavit.
7. Documentary evidence led by the complainant/CW1:
Ex.CW1/1 : Evidence by way of affidavit Ex.CW1/B (OSR) : Authorization letter of complainant.
Ex.CW1/C : Cheque in question dated 30.12.2019
Ex.CW1/D : Return memo dated 02.01.2020
Ex.CW1/E : Legal Demand Notice dated 07.01.2020
Ex.CW1/G : Postal Receipt
Mark A (colly) : Copy of Loan Agreement Form with
statement and agreement
Mark CW1/A : Registration Certificate
EVIDENCE LED BY THE ACCUSED
8. On the other hand, the accused did not lead any defence evidence and accordingly, the matter was fixed for final arguments.Digitally signed
KAWAL by KAWAL SINGH SINGH Date: 2023.08.02 15:34:13 +0530 CT Cases 3545/2020 Ankur Trade Links (P) Ltd. v. Paras Ram Yadav Page No.4 of 18 ARGUMENTS
9. Counsel for the complainant has argued that accused had approached the complainant for a loan facility for purchase of a vehicle, which was disbursed in the name of the accused in the year 2018. Counsel for the complainant alleged that the aforesaid loan of Rs.1,60,000/ was to be repaid in equal monthly installments. Counsel for the complainant contends that cheque in question of Rs.1,82,610/ was given by the accused to repay the aforesaid loan as per the loan agreement by the accused. Complainant submits that the cheque in question was dishonoured and a legal demand notice was sent to the address given by the accused but the accused has failed to pay back the amount due within fifteen days of its receipt.
10. In view of above all the requirements of section 138 NI Act of being met with in the present case. Hence, the accused be convicted.
11. Counsel for the accused has, on the other side argued that the complainant has filed a false and fabricated case against the accused. Counsel for the accused submitted that the accused took a loan facility from the complainant to buy a threewheeler, which was to be repaid by paying 23 equal monthly installments of Digitally signed KAWAL by KAWAL SINGH SINGH Date: 2023.08.02 15:34:24 +0530 CT Cases 3545/2020 Ankur Trade Links (P) Ltd. v. Paras Ram Yadav Page No.5 of 18 Rs.8,750/. Counsel for the accused submitted that the accused had repaid more than half of the installments to the complainant. Counsel for the accused has stated that the five cheques including the cheque in question were not issued to discharge its legal liability but for security purpose only, and the same has been misused by the complainant. Hence, the present case deserves to be dismissed.
POINTS OF DETERMINATION
12. The following points of determination arise in the present case.
1. Whether the complainant has been successful in raising the presumptions under Section 118 read with Section 139 of NI Act.
2. If yes, whether the accused has been successful in raising a probable defence?
THE LAW APPLICABLE
13. On perusal of record, and after giving my thoughtful consideration to the final submission of the parties. This court would like to narrate the legal principles relevant for adjudication of complaint under section 138 of NI act briefly, before appreciating the evidence led on behalf of both the parties.
14. The Hon'ble Supreme Court of India in Basalingappa v.
KAWAL Digitally signed by KAWAL SINGH Date: 2023.08.02 CT Cases 3545/2020 SINGH 15:34:33 +0530 Ankur Trade Links (P) Ltd. v. Paras Ram Yadav Page No.6 of 18 Mudibasappa, 2020 SCC OnLine SC 491 at page 422 held as follows:
(i) Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.
(ii) The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
(iii) To rebut the presumption, it is open for the accused to rely on evidence led by him or accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.
(iv) That it is not necessary for the accused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden.
15. The threejudge bench of the Hon'ble Supreme Court in Rangappa v. S. Mohan, (2010) 11 SCC 441 has ruled that existence of liability itself is a presumption of law. It held as under:
"26. In light of these extracts, we are in agreement with the respondent claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability."
16. The Hon'ble Supreme Court of India in C.C. Alavi Haji v.
Palapetty Muhammed, (2007) 3 SCC (Cri) 236 at page 565 held Digitally signed KAWAL by KAWAL SINGH SINGH Date: 2023.08.02 15:34:43 +0530 CT Cases 3545/2020 Ankur Trade Links (P) Ltd. v. Paras Ram Yadav Page No.7 of 18 as follows:
"A person who does not pay within 15 days of receipt of the summons from the court along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the GC Act and Section 114 of the Evidence Act."
FINDINGS AND REASONING POINT OF DETERMINATION NO. 1:
17. It is not in dispute that the cheque in question was drawn on account maintained by the accused. The signature on the cheque in question is admitted. The dishonourment of the cheque in question for the reason "Funds insufficient" can be seen from return memo Ex.CW1/D which has not been disputed. The return memo Ex.CW1/D being signed by the concerned bank, the presumption of dishonour under section 146, NI Act arises. The receipt of legal demand notice Ex.CW1/E has not been admitted by the accused. It is pertinent to note that the address mentioned on Ex.CW1/E has been admitted by the accused while framing of notice under Section251 Cr.PC. Legal notice being properly addressed and sent, gives way to the presumption under section 114 of Indian Evidence Act and Section 27 of the General Clauses Act that the legal notice has been received by the accused in light of the pronouncement CC Alavi (supra). No evidence was led to rebut the aforesaid presumption on behalf of the accused Digitally signed KAWAL by KAWAL SINGH CT Cases 3545/2020 SINGH 15:34:54 Date: 2023.08.02 +0530 Ankur Trade Links (P) Ltd. v. Paras Ram Yadav Page No.8 of 18 save mere denial of the accused. Also, it is nobody's case that the accused tendered the amount entailed in the cheque in question upon entering appearance before this court in response to the summons issued in the instant case. The plea of the accused regarding nonreceipt of legal notice is accordingly rejected as being inconsequential.
18. The ingredients necessary for raising the statutory presumptions being fulfilled, the presumptions under sections 139 and 118, NI Act that the cheque in question was issued for a legally recoverable debt/liability stand activated.
19. Accordingly, the point of determination no.1 is decided in the affirmative.
POINT OF DETERMINATION NO. 2:
20. Now it is to be examined whether the accused has been able to rebut the statutory presumptions.
21. The case of the complainant is that the cheque in question Ex.CW1/C was issued to make the payment towards the loan facility availed for purchasing of a threewheeler by the accused. The complainant had filed the loan agreement and loan account statement Mark A (colly) in support of its case. The complainant KAWAL Digitally signed by KAWAL SINGH CT Cases 3545/2020 SINGH 15:35:04 +0530 Date: 2023.08.02 Ankur Trade Links (P) Ltd. v. Paras Ram Yadav Page No.9 of 18 has also placed on record return memo of the dishonoured cheque Ex.CW1/D and legal demand notice Ex.CW1/E which was sent to the address of the accused.
22. The Authorized representative (AR) complainant was cross examined by the counsel of the accused. Therein, it had emerged that the complainant company had provided a loan facility to the tune of Rs. 1,60,000/ at interest of 1.8 percent per month to the accused and the cheque in question was issued by the accused while availing the aforesaid loan. The AR of the complainant had stated that the aforesaid loan was to repaid in 24 monthly installments, out of which the accused had already repaid 1012 installments back to the complainant.
23. The accused chose not to lead defence evidence and in support of his contentions, the accused through his counsel has relied on the crossexamination of the AR of the complainant while making final submissions before this court.
24. Counsel for the accused had argued that the accused has no liability of the cheque amount i.e. Rs.1,82,610/ as alleged by the complainant since neither in the complaint nor in the loan account statement Mark A (colly) the complainant had shown how an Digitally signed KAWAL by KAWAL SINGH CT Cases 3545/2020 SINGH 15:35:13 Date: 2023.08.02 +0530 Ankur Trade Links (P) Ltd. v. Paras Ram Yadav Page No.10 of 18 amount of Rs.1,82,610/ is due upon the accused. Counsel for the accused had argued that the accused took a loan finance facility to the tune of Rs.1,60,000/ at 1.8 percent monthly interest as stated by the AR of the complainant in his cross examination. Counsel for the accused had further pointed out that the AR of the complainant in his testimony himself admitted that accused had repaid 1012 installments towards the loan facility in question. Counsel for the accused had argued that the complainant had arbitrarily calculated the cheque amount as they have failed to explain the extra charges levied upon the accused as shown in Mark A (colly) and the authority to levy the same. Counsel for the accused had also questioned the authenticity of Mark A (colly) as the same is neither in original nor the certified copy of the original. Counsel for the accused contends that the accused does not know English and thus, put his signature only in Hindi. However, the loan facility form has been filled in English. Hence, the accused has no legal liability of the cheque amount as alleged by the complainant.
25. It is not in dispute that the accused availed a loan facility of Rs.1,60,000/ at 1.8 percent monthly interest to finance a three wheeler from the complainant company in 2018, which was to be returned in around two years by paying a equal monthly Digitally signed KAWAL by KAWAL SINGH SINGH Date: 2023.08.02 15:35:23 +0530 CT Cases 3545/2020 Ankur Trade Links (P) Ltd. v. Paras Ram Yadav Page No.11 of 18 installment of Rs.8,750/ approximately. It is also not in dispute that the accused had repaid half of the installments due upon him before defaulting to repay the entire remaining loan amount. The complainant had relied upon the loan agreement and loan statement Mark A (colly) to explain the penalty charges calculated by the complainant company, which is the cheque amount in question. Perusal of Mark A (colly) shows clear account of installments paid by the accused and installments defaulted upon by the accused. The terms of the loan agreement also clearly mentions the authority of the complainant company to levy penalty charges including other charges in case the borrower or the beneficiary defaults in repayment of installments within time. A clear bifurcation of the principal amount due upon the accused and penalty charges levied can be seen from Mark A (colly). Thus, the argument of the accused that the complainant had calculated the cheque amount arbitrarily is rejected, as it is not proved by leading any cogent evidence or examination of any witnesses.
26. Furthermore, the accused had candidly admitted his signature on Mark A (colly) while recording of his statement under Section 313 Cr.PC and the AR of the complainant in his testimony had stated that the details of the loan form was filled by the Digitally signed KAWAL by KAWAL SINGH SINGH 15:35:31 Date: 2023.08.02 +0530 CT Cases 3545/2020 Ankur Trade Links (P) Ltd. v. Paras Ram Yadav Page No.12 of 18 complainant company but signed by the accused. Hence, the argument that Mark A (colly) is a false document since the accused does not know English and that he signs in Hindi only is without merit therefore, accordingly rejected.
27. And as far as the non production of Mark A (colly) in original is concerned, the AR of the complainant in his testimony explained the same with reasoning that the same is with the previous counsel. Nonetheless, the AR of the complainant himself, as noted in his testimony offered to produce the original if required. But the same was never asked for by the accused, therefore the accused cannot take the benefit of Mark A (colly) being not in original when he himself admitted his signatures on it and have failed to ask the complainant to produce the original despite giving adequate opportunity.
28. The second line of defence of the accused is that there occurs gross inconsistencies in the case of the complainant throughout the trial which creates a reasonable doubt upon the case of the complainant. Counsel for the accused pointed out that in the cross examination of the AR of the complainant the AR testified that the cheque in question was given to the complainant company while availing the loan facility in question whereas in its legal Digitally signed KAWAL by KAWAL SINGH SINGH 15:35:42 Date: 2023.08.02 +0530 CT Cases 3545/2020 Ankur Trade Links (P) Ltd. v. Paras Ram Yadav Page No.13 of 18 demand notice Ex.CW1/E, the complainant alleged that the cheque in question dated 30.12.2020 was issued in partial discharge of the loan amount. Counsel for the accused had also pointed out that in its testimony, the AR of the complainant testified that a recall notice was sent to the accused within fifteen days of default in making the payment of the installment due. However, no such recall notice in original or its copy has been filed by the complainant before this court because no notice was ever sent to the accused.
29. Perusal of the record shows that the cheque in question has been admitted by the accused. The accused had questioned the purpose and the time when the cheque in question has been issued to the complainant. It is a well settled law that the presumption under section139 of the NI Act is in the favour of the complainant and it is the accused who has to rebut the presumption. Here, the factum of issuance of the cheque in question is not disputed and only the purpose for which it was issued is in dispute, the initial burden to prove this is upon the accused. Even if for the sake of argument, this court agrees with the argument of the accused that the cheque in question was given for security purpose while availing loan. Then also when a loan is advanced and the borrower agrees to repay the amount in a specified time frame Digitally signed KAWAL by KAWAL SINGH SINGH 2023.08.02 Date:
15:35:53 +0530 CT Cases 3545/2020 Ankur Trade Links (P) Ltd. v. Paras Ram Yadav Page No.14 of 18 and issues a cheque as security to secure such repayment, the cheque which is issued as security would mature for presentation and the drawee of the cheque would be entitled to present the same. Unless the loan amount has been repaid in any other form before the due date or if there is an understanding or agreement between the parties to defer the payment of amount.
30. Similarly, the filing of recall notice by the complainant on record is of little importance as the same was never asked by the accused to produce despite giving adequate opportunity. Hence, the benefit of non production of the same will not go to the accused.
31. In addition to this, It has been held by Hon'ble Supreme court in the case of Rohitbhai J Patel vs The State Of Gujarat, criminal appeal no. 508/19 that minor inconsistencies do not lead to the rebuttal of presumption raised under Section 118 (a) read with Section 139 of NI Act. Therefore, the argument that there exist gross inconsistencies in the case of the complainant is rejected as it is devoid of any merits.
32. The last line of defence taken by the accused is that the cheque in question was issued for security purpose only and not to discharge the liability as alleged by the complainant. Be that as it KAWAL Digitally signed by KAWAL SINGH Date: 2023.08.02 CT Cases 3545/2020 SINGH 15:36:03 +0530 Ankur Trade Links (P) Ltd. v. Paras Ram Yadav Page No.15 of 18 may, even if it were to be assumed that the cheque was issued as security towards the loan availed. Then by this fact alone, the presumption under Section 139 NI Act cannot be dislodged. The Hon'ble High Court of Delhi in Suresh Chandra Goyal v. Amit Singhal Crl. L.P, 706/2014 has succinctly observed that:
"Section 138 of NI Act does not distinguish between a cheque issued by the debtor in discharge of an existing debt or other liability, or a cheque issued as a security cheque on the premise that on the due future date the debt which shall have crystallized by then, shall be paid.
So long as there is a debt existing, in respect whereof the cheque in question is issued, in my view, the same would attract Section 138 of NI Act in case of its dishonour."
33. Therefore, the defence of the cheque being a security cheque does not by itself rebut the presumption. However, it is the case of the accused that he has no liability against the cheque in question as the same was issued as security against the loan facility availed of Rs.1,60,000/ and not to repay the cheque amount. However, except his contradictory statements recorded us 251 Cr.PC and Section 313 Cr.PC, accused has not been able to create any reasonable doubt with regard to the purpose and absence of liability to pay the cheque amount. The accused has not led any evidence to show that the cheque amount is not due upon him towards the complainant and the cheque in question has been misused. Further, the circumstantial evidence has to be seen from Digitally signed KAWAL by KAWAL SINGH SINGH Date: 2023.08.02 15:36:15 +0530 CT Cases 3545/2020 Ankur Trade Links (P) Ltd. v. Paras Ram Yadav Page No.16 of 18 the point of a reasonable or prudent man. Hence, when the loan was already partially repaid and the complainant had misused the cheque issued for security purpose only, why did the accused not take any legal action for getting the security cheque and blank signed documents back.
34. Here, the accused had not filed any complaint either with the police or with her bank regarding the misused of the cheque in question and return of other cheques in possession of the complainant despite knowing the fact that one such cheque has been allegedly misused by the complainant.
35. In view of above, the contention of the accused regarding absence of legal liability to pay the cheque amount and misuse of the cheque, in absence of legal action or communication seeking return of the security cheques, the defence of the accused is only by way of mere/bare denial and does not inspire confidence from the stand point of a reasonable or prudent man.
36. On the other hand, this court finds that the complainant has proved his version by way of consistent and reliable oral testimony as well as documentary evidence.
Digitally
signed by
KAWAL KAWAL SINGH
Date:
SINGH 2023.08.02
15:36:25
+0530
CT Cases 3545/2020
Ankur Trade Links (P) Ltd. v. Paras Ram Yadav Page No.17 of 18
37. Accordingly, in light of the aforesaid discussion, the point of determination no.2 is decided in the negative.
VERDICT
38. In view of the foregoing discussion, this court holds that complainant has established his case beyond reasonable doubt by proving all the ingredients under Section 138 NI Act by leading cogent evidence and the accused has failed to raise a probable defence.
39. Accordingly, accused Paras Ram Yadav is hereby convicted for offence punishable under Section 138 NI Act qua the cheque in question in the present case.
40. Let the convict be heard separately on quantum of sentence. Copy of this judgment be given free of cost to the convict. Announced in the Open Court on this 2nd August 2023. This Judgment consists of 18 signed pages.
Digitally signed by KAWALKAWAL SINGH SINGH Date:
2023.08.02 15:36:38 +0530 (KAWAL SINGH) Metropolitan Magistrate03 (South), NI Act Saket/New Delhi/02.08.2023 CT Cases 3545/2020 Ankur Trade Links (P) Ltd. v. Paras Ram Yadav Page No.18 of 18