Delhi District Court
Dalip Kumar Sharma vs Suman Singh on 19 November, 2024
IN THE COURT OF MS. SADHIKA JALAN,
ADDITIONAL SESSIONS JUDGE (FTSC)(RC),
DWARKA COURTS, SOUTH-WEST DISTRICT, NEW DELHI.
In the matter of:
CNR No. DLSW01-008700-2022
Criminal Appeal No. 274/2022
(CC No. 38830/2019,
under Section 138 of Negotiable Instruments Act)
(Police Station Palam Village)
Dalip Kumar Sharma
Son of Shri Phaturan Thakur,
Resident of RZF-760/60, Gali No.2,
Raj Nagar-II, Palam Colony,
New Delhi-110077.
... Appellant
versus
Suman Singh
Wife of Shri Ramugrah Singh,
Resident of RZF-754/47B,
Raj Nagar-II, Palam Colony,
New Delhi-110077.
...Respondent
Date of Institution of Revision : 24.08.2022
Date on which Order reserved : 20.08.2024
Date of Order : 19.11.2024
Dalip Kumar Sharma v. Suman Singh
CA No. 48/2021, Police Station Dwarka North Page No. 1 of 15
JUDGMENT
1. Appeal is directed under Section 374(3) Code of Criminal Procedure (hereinafter referred to as CrPC) against order of conviction dated 15.07.2022 and order on sentence dated 25.07.2022, passed by the then learned Metropolitan Magistrate (NI Act)-6, South-West District, Dwarka Courts, New Delhi in Complaint Case bearing No. 38830/2019, titled as 'Suman Singh v. Dalip Kumar Sharma' convicting appellant for the offence punishable under Section 138 Negotiable Instruments Act, 1881 (hereinafter referred to as NI Act) and sentencing him to pay a fine of Rs.1,00,000/- under Section 357(3) CrPC with an interest of 9 percent per annum to the respondent/complainant as compensation within a period of one month from the date of order and in default of payment of compensation, appellant is directed to undergo further simple imprisonment for a period of one month.
FACTUAL MATRIX
2. Brief facts, as noted by learned Trial Court are that respondent had family relations with the appellant/accused and the appellant/accused used to avail financial help from the respondent/complainant from time to time. That on 15.10.2017, appellant/accused approached the complainant for a friendly loan of Rs.1,80,000/- for a period of six months as he was in dire need of money. On the same day, the respondent/complainant agreed and advanced a loan of Rs. 1,80,000/- by way of cash to the appellant/accused.
Dalip Kumar Sharma v. Suman Singh CA No. 48/2021, Police Station Dwarka North Page No. 2 of 15
3. In the year 2018, the appellant/accused issued three cheques of Rs.10,000/- each in favour of the husband of the complainant towards part payment of the said loan. Appellant/accused assured the complainant that remaining amount of Rs.1,50,000/- shall be returned on or before August 2019, as his business was running into losses.
4. In discharge of his part liability, on 10.08.2019, appellant/accused issued cheque bearing no. 977302, dated 10.08.2019, drawn on State Bank of India, Palam Colony. Upon his assurance, respondent/complainant presented the cheque for encashment. However, it was dishonored vide return memo dated 22.08.2019, with the reason 'funds insufficient'.
5. He informed the appellant/accused, how failed to make the requisite payment. A legal notice dated 11.09.2019, was sent to the appellant/ accused by way of speed post. It was served upon the appellant/accused and he sent a reply dated 19.09.2019 to the said notice, by virtue of which, he denied his liability and hence, respondent filed complaint under Section 138 NI Act.
6. Appellant was summoned to face trial. Notice under Section 251 CrPC was framed against him. Appellant pleaded not guilty and claimed trial. The accused admitted his signatures over the cheque in question. He stated that he does not know the complainant, rather, he knows the husband of the complainant Ram Ugrah Singh who used to run a chit fund committee. He stated that he was part of the said committee and the cheque in question was issued as a security towards this committee. Once the committee got wound up, he asked for return of his cheque but the complainant did not return it on one pretext or the other and misused it.
Dalip Kumar Sharma v. Suman Singh CA No. 48/2021, Police Station Dwarka North Page No. 3 of 15
7. In his evidence, respondent proved cheque bearing no. 977302 dated 10.07.2019, drawn on SBI Palam Colony, as Ex. CW1/A, Return memo as Ex. CW-1/B, legal demand notice dated 11.09.2019 as Ex. CW-1/C, Postal Receipt as Ex. CW-1/D and reply to legal notice as Ex. CW-1/E. The respondent was duly cross examined by the appellant.
8. Appellant in his statement under Section 313 CrPC stated that the husband of the complainant used to run a committee and he was a part of it. The cheque in question was given as a security towards that committee. Eventually the relationship turned sour. The respondent states that he has misused the cheque. He did not owe any liability of the cheque amount towards the respondent.
9. Appellant choose not to lead defence evidence. Matter was fixed for final arguments. Final arguments were heard.
10. Learned Trial Court in its impugned judgment held that appellant failed to prove his defense and case of respondent stands proved beyond all reasonable doubts and hence, convicted appellant for the offence punishable under Section 138 NI Act.
GROUNDS OF APPEAL--
11. Appellant has assailed impugned order on the following grounds. They are summarized as follows--
i. That the order of conviction and sentenced passed by learned Trial Court is cryptic and erroneous as is complete failure of justice, if allowed to stand it would cause irreparable injury to the Appellant.
Dalip Kumar Sharma v. Suman Singh CA No. 48/2021, Police Station Dwarka North Page No. 4 of 15 ii. That the learned Trial Court committed a serious error of law in not considering that the prosecution failed to prove its case beyond reasonable doubt as much as the prosecution failed to prove that the cheque in question was ever presented for encashment with the banker of the appellant/accused.
iii. That the learned Trial Court failed to consider that the accused categorically denied the advancement of loan from the complainant and stated that he had given the cheque in question to the husband of the respondent/complainant as security being a member of committee run by the husband of the respondent/complainant.
iv. That the learned Trial Court erred in not considering that the cheque was a non-CTS cheque and not a valid instrument and did not consider Notification No. DPSS (Che)/569/01.02.2003/2017-18 dated 21.06.2018 issued by the Reserve Bank of India. Further the reason for dishonor so stated by the respondent/complainant was funds insufficient which was not the case.
v. That the learned Trial Court failed to take note that the respondent/complainant was unable to show her financial capacity to extend the loan and also that she had violated Income Tax Act. Also, no loan agreement has been placed on record.
vi. That the learned Trial Court failed to consider the
contradictions in the testimony of the
respondent/complainant.
Dalip Kumar Sharma v. Suman Singh
CA No. 48/2021, Police Station Dwarka North Page No. 5 of 15
12. On the other hand, learned Counsel for respondent submitted that the learned Trial Court rightly came to conclusion that the cheque in question was handed over by the appellant to respondent for due consideration. It is submitted that appellant miserably failed to prove his defence and failed to discharge his onus to rebut the presumption in favor of respondent and hence, case of respondent stands proved against appellant beyond all reasonable doubts.
13. I have heard the rival contentions and have gone through the learned Trial Court record.
ANALYSIS--
14. Before proceeding further, it would be pertinent to note that in prosecution under Section 138 NI Act, the statutory presumptions under Sections 118 and 139 NI Act stand in favour of the complainant/respondent. Once the complainant/respondent proves that the negotiable instrument/cheque was executed by the maker in favour of the holder of the cheque, the law presumes that it was drawn for consideration and the holder received it in discharge of any debt or liability. A presumption is not in itself evidence but only makes a prima facie case for a party for whose benefit it exists.
15. Presumptions both under Sections 118 and 139 are rebuttable in nature. This was also held by the Hon'ble Supreme Court of India in Hiten P. Dalal v. Bratindranath Banerjee (2001) 6 SCC 16. The burden shifts on the appellant/accused to prove the contrary, which he can do through cross-examination of the complainant or/and by leading any cogent Dalip Kumar Sharma v. Suman Singh CA No. 48/2021, Police Station Dwarka North Page No. 6 of 15 evidence in defence. The burden on the accused however is not that of beyond reasonable doubt, but one of 'preponderance of probabilities'.
16. In the instant matter, as the learned trial Court has rightly noted that the cheque given is admittedly of the appellant. The signature on the cheque stands admitted. It is also pertinent to note that the appellant also admits to having received the legal demand notice sent by the appellant and even furnishes a reply to it.
17. Reliance is placed upon the judgment of the Hon'ble Apex Court in Rangappa v. Mohan, AIR 2010 SC 1989 wherein it was observed--
"Once the cheque relates to the account of the accused and he accepts and admits the signatures on the said cheque, then initial presumption as contemplated under Section 139 of the Negotiable Instruments Act has to be raised by the Court in favour of the complainant."
18. Further in the case of K. Bhaskaran v. Sankaran Vaidhyan Balan, 1999 (4) RCR (Criminal) 309, it has been held by the Hon'ble Supreme Court as under--
"As the signature in the cheque is admitted to be that of the accused, the presumption envisaged in Section 118 of the Act can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears. Section 139 of the Act enjoins on the court to presume that the holder of the cheque received it for the discharge of any debt or liability."
19. Thus, as per the settled law, once the accused admits the signatures on the cheque, the initial presumption as contemplated under Section 139 of the Act has to be raised in favour of the complainant and in the present case as well the appellant had admitted his signatures on the cheque. No Dalip Kumar Sharma v. Suman Singh CA No. 48/2021, Police Station Dwarka North Page No. 7 of 15 fault can be found with the observations of the learned Trial Court in this regard.
20. It is contended however by the appellant that not all details were written by him. However, Section 20 NI Act declares that inchoate instruments are also valid and legally enforceable. It clarifies that the instrument may be wholly blank or incomplete in any particular; in either case, the holder has the authority to make or complete the instrument as a negotiable one. The authority implied by a signature to a blank instrument is so wide that the party so signing is bound to a holder in due course even though the holder was authorised to fill it for a certain amount. In the case of a signed blank cheque, the drawer gives authority to the drawee to fill up the agreed liability. The appellant cannot therefore hide behind the defence that the cheque given was blank and not all particulars were filled by him.
21. In the present case, the respondent discharged his burden of establishing a prima-facie case by leading evidence and meeting the basic ingredients of Section 138 of NI Act. The burden shifted upon the appellant to rebut the presumptions under Sections 118 and 139 NI Act, standing in favour of the respondent.
Ground of Appeal: Loan was never advanced and the respondent had no financial capacity to extend such a loan.
22. It is argued by the appellant/accused that the respondent/complainant did not show that any loan was infact advanced by her to the appellant/accused. It is contended that since the respondent did not show that the alleged transaction took place, initial burden cannot be Dalip Kumar Sharma v. Suman Singh CA No. 48/2021, Police Station Dwarka North Page No. 8 of 15 considered as discharged and no presumptions can be taken against the respondent. It has further been argued that the respondent/complainant has not been able to demonstrate financial capacity/prowess to have extended the loan in question.
23. In the instant matter, the respondent stated that she in all had advanced a loan of Rs. 1,80,000/- to the appellant. Of this amount, some amount was returned by the appellant to her husband. Of the remaining Rs. 1,50,000/- in discharge of his part liability the appellant gave the cheque in question. During cross examination, the respondent admits that she has two properties to her name and one shop from which she gets rental income. She explains as to why she cannot place the rental agreements on record. No cross examination is however done to question the fact that the respondent is the owner of two properties as well as the shop. The complainant/respondent has explained that the rent received by her was in cash and that she never entered into any agreements, as the tenants were known to her. As acknowledged by the learned Trial Court, a plausible explanation was put forth by the respondent/complainant.
24. In light of the above, there is nothing to show that the respondent/complainant would not have the financial capacity to give such a loan to the appellant. Contention raised by the appellant is found to be without merit.
Ground of Appeal: Dealings with the Husband of the Respondent who ran a chit fund committee.
25. It has been further argued that the husband of the respondent/complainant used to a run a committee and that that Dalip Kumar Sharma v. Suman Singh CA No. 48/2021, Police Station Dwarka North Page No. 9 of 15 contributions were being made by the appellant towards that. He submits that the present cheque was also given in view of the committee. However, the appellant never discloses as to what amount had he invested with the husband or any receipts that he had received over the course of time. He further stated that the committee had gotten over. He does not mention any dispute or issue on its ending, implying that he would have also gotten a return, this too has not been shown or disclosed. The husband of the respondent is stated to work in Air India. No other member of the alleged committee run by the husband of the complainant has ever been examined nor any other evidence shown to prove the existence of such a chit fund/committee. The averments made are merely vague assertions.
Ground of Appeal: Cheque in question was a Security Cheque
26. It has also been contended by the appellant that the cheque in question was a security cheque given in lieu of this committee. However the Appellant has also not shown the steps taken to ensure return of his security cheque. Reliance is placed on the case of VS Yadav v. Reena, 172 (2010) DLT 561, wherein the Hon'ble High Court of Delhi held as follows--
"In order to rebut the presumption under Section 139 of NI Act, the accused, by cogent evidence, has to prove the circumstance under which the cheques were issued. It was for the accused to prove if no loan was taken as to why he did not write a letter to the complainant for return of the cheque. Unless the accused had proved that he acted like a normal businessman/prudent person entering into contract he could not have rebutted the presumption under Section Dalip Kumar Sharma v. Suman Singh CA No. 48/2021, Police Station Dwarka North Page No. 10 of 15 139 NI Act. If no loan was given but cheques were retained, he immediately would have protested and asked the cheques to be returned and if still cheques were not returned, he would have served a notice as complainant. Nothing was proved in this case."
27. Thus, in absence of any receipts, absence of any legal action/communication seeking return of the cheque, defence of the appellant does not inspire confidence. Mere denial is not sufficient, something more probable has to be shown for shifting of the evidential burden of proof.
28. Further, as the plea of the cheque being a security cheque, it was held in ICDS v. Beena Shabir & Anr., (2002) 6 SCC 426, that security cheques would also fall within the purview of the Section 138 NI Act and a person cannot escape his liability unless he proves that debt or liability for which cheque was issued as security is satisfied otherwise.
29. This defence was also discussed recently by the Supreme Court in Sripati Singh v. State of Jharkhand, 2021 SCC Online SC 1002. The Court held therein that a cheque issued as security, pursuant to a financial transaction, cannot be considered as a worthless piece of paper.
30. Therefore, it is upon the appellant to prove that he had discharged the liability for which he claims the cheque had been given, which is a burden that the appellant has been unable to discharge in the instant matter.
Dalip Kumar Sharma v. Suman Singh CA No. 48/2021, Police Station Dwarka North Page No. 11 of 15 Ground of Appeal: Dishonour of Cheque on ground of 'Non-CTS' and not insufficient funds
31. It has been argued by the learned Counsel for the appellant that the return memo mentions that the cheque was returned due to the reason of "non-CTS, multicity cheque" and not due to funds insufficient. However, this Court finds itself in agreement with the reasoning put forth by the learned Trial Court that the dishonor of the cheque on account of it being a non-CTS cheque is purely attributable to the conduct of the accused and this cannot defeat the right of the respondent/complainant.
32. The learned counsel for the appellant has relied upon the notification no.
DPSS(Che)/569/01.02.003/2017-18 dated 21.06.2018 issued by the Reserve Bank of India wherein it is stated that separate clearing session will be discontinued from 31.12.2018. They can however be presented in Express Cheque Clearing System centres. The Reserve Bank of India has further clarified that though the non-CTS cheque loses its value from 01.01.2019, it would still be considered valid as a 'Negotiable Instrument'.
33. Reliance was correctly placed by the learned Trial Court upon the case of M/s Laxmi Dyechem v. State of Gujarat & Ors, Crl.Appeal No.1870- 1909/2012 in SLP No.1740-1779/2022 dated 27.11.2012, wherein the Hon'ble Supreme Court held as under--
"The court should lean in favour of the interpretation which serves the object of the statue. The two contingencies shown in section 138 are species and the other contingencies which could be found in the return memos are geneses."
Dalip Kumar Sharma v. Suman Singh CA No. 48/2021, Police Station Dwarka North Page No. 12 of 15
34. From the above ratio of the Apex Court, it is clear that, the contingencies which can be shown as the reason for the return of cheques shall be considered as geneses of the two contingencies mentioned in the Section and they too would attract the offence punishable under section 138 of NI Act.
35. In the instant matter, the appellant admits giving the cheque as a security cheque. It is not the case of the appellant that he gave the cheque before the year 2010 when non-CTS cheques were asked to be discontinued. He gave it knowing that he is giving a non-CTS cheque. The appellant cannot then be allowed to stand behind the defence that the cheque was then dishonoured for this purpose. Therefore, the defense taken by the accused is not sustainable and the reasons shown for the return of cheque as non-CTS cheque also would attract the offence punishable under section 138 of NI Act.
Ground of Appeal: Loan Amount not shown in Income Tax Returns
36. Counsel for the appellant has also contended that the loan amount has not been shown in income tax statement by the respondent and therefore the said amount can be presumed to have not been given. It is pertinent to mention that no such question was ever raised by the appellant during cross examination of the respondent. Nonetheless, it is also to be noted that Section 269SS of the Income Tax Act mandates that no person, after the cut-off date shall take or accept from any other person, any loan or deposit, otherwise than by an account payee cheque or an account payee bank draft if the amount is more than Rs. 20,000/-. Section 269SS of the Income Tax Act does not declare all transactions of loan, by cash in excess of Rs. 20,000/- as invalid, illegal or null and void. Breach of Dalip Kumar Sharma v. Suman Singh CA No. 48/2021, Police Station Dwarka North Page No. 13 of 15 Section 269SS of the Income Tax Act provides penalty to which a person would be subjected to under Section 271D. Section 271D does not provide that such transaction would be null and void. The payer of money in cash, even if in violation of Section 269SS of the Income Tax Act can always have the money recovered. Onus is thus on accused to show that cash loan was infact never advanced. This onus however has not been discharged by the appellant. Reliance is placed upon Dilip Chawla v. Ravinder Kumar, 2017 SCC OnLine Del 9753 and Assistant Director of Inspection v. A.B. Shanthi, (2002) 6 SCC 259.
FINAL CONCLUSION--
37. In the light of the aforesaid discussions, the impugned judgment is found to be based upon fair appreciation of the evidence. It deserves no intervention. Sentence order is also considered and justified given the facts of the case. Therefore, the appeal filed by the appellant/accused Dalip Kumar Sharma, is found to be without merit and it hereby dismissed and impugned judgment dated 15.07.2022 and order on sentence dated 25.07.2022 passed by the learned Trial Court are accordingly upheld.
38. It has also been prayed by the learned counsel for the respondent that the amount deposited under Section 148 NI Act in the sum of Rs.27,200/- by way of Term Deposit Receipt dated 22.09.2022, drawn on State Bank of India by the appellant be released to them. In light of the above conclusion as well as provision of Section 148 NI Act, the said term deposit receipt be released in favour of the respondent/complainant. It be re-validated by the bank, if so required and be released in favour of the respondent/complainant Suman Singh.
Dalip Kumar Sharma v. Suman Singh CA No. 48/2021, Police Station Dwarka North Page No. 14 of 15
39. Trial Court Record be sent back along with copy of this order.
40. File be consigned to record room.
Announced in Open Court on this 19th day of November, 2024.
It is certified that this judgment contains 15 pages and all pages have been duly signed.
(SADHIKA JALAN) Addl. Sessions Judge (FTSC) (RC) South West District, Dwarka Court New Delhi, 19.11.2024 Dalip Kumar Sharma v. Suman Singh CA No. 48/2021, Police Station Dwarka North Page No. 15 of 15