Delhi District Court
Jugesh Sehgal vs . Shamsher Singh Gogi, (2009) 14 Scc 683: on 26 September, 2019
IN THE COURT OF MS. AKRITI MAHENDRU, MM04 (NI ACT)
CENTRAL DISTRICT, TIS HAZARI COURTS, DELHI
CC No. : 520307/16
U/s : 138 NI Act
JUDGMENT
a The Sl. No. of the case : 520307/16
b The date of Institution of the case : 25.01.2008
c The name of complainant : Carzonrent (India) Pvt.
Ltd., 911912,
Prakashdeep Building, 7
Tolstoy Marg, New
Delhi.
d The name of accused : Sita Ram Sharma
S/o. Sh. Ram Babu, R/o.
C542, Mahrishi
Dayanand Marg, Chajju
Pur, Babar Pur, Shahdra,
Delhi.
e The offence complained of : 138 NI Act
f The plea of accused : Pleaded not guilty
g The final order : Acquitted
h The date of judgment : 26.09.2019
JUDGMENT
1. Vide this judgment and final order, this Court shall dispose of the present complaint case instituted by the Complainant invoking the provisions of Section 138 of the Negotiable Instruments Act, 1881 (as amended todate).
C.C. No. 520307/16 Page 1 of 152. Whereas speaking succinctly, the gravamen of the Complainant Co. is that the Accused had approached it and expressed his willingness to join the EASY CAB project launched by it, accordingly on certain terms and conditions a cab bearing Registration No. DL 1 RX 6020 was allegedly entrusted to the Accused for the purpose of plying the same on hire for a consideration amount of Rs.750/ (rupees seven hundred and fifty only) per day for the period the aforesaid vehicle continued to remain in the custody/possession of the Accused. Purportedly, in (part) discharge of his liability, the Accused had issued a cheque, now forming a subject matter of the present complaint case, to wit cheque bearing No. 121467 dated 30.10.2007, drawn on the Delhi State Cooperative Bank Ltd., Nand Nagri branch, Delhi in the sum of Rs. 5,000/ (rupees five thousand only) (hereinafter referred to as "the impugned cheque" as much for the sake of brevity as to obviate prolixity). Reportedly, upon expiry of period agreed for payment, the Complainant deposited the impugned cheques with ICICI Bank, Jhandewalan Extension branch, New Delhi for encashment. Purportedly, upon presentation, the impugned cheque bearing nos. 121467 was returned dishonored owing to the reason - "account closed", as manifested from the bank return memo dated 03.11.2007. Thereafter, the statutory legal demand notice dated 03.11.2007 evoked neither reply nor compliance inasmuch as the payment entailed in the impugned cheque was not forthcoming despite service upon the Accused. The Complainant was thereby, constrained to institute the present complaint case.
C.C. No. 520307/16 Page 2 of 153. The Complainant, insofar as it is permissible by dint of Section 145 of the Negotiable Instruments Act, 1881 (as amended todate), tendered his presummoning evidence by way of affidavit (Ex.CW1/X); and relied upon documents, to wit - Certificate of Incorporation (Ex.C1), Copy of Board Resolution (Ex.C2), Power of Attorney (Ex.CW3), Cheque (Ex.C4), Bank Returning Memo (Ex.C 5 & C6), Legal Demand Notice (Ex.C7), Postal receipt (Ex.C8). Thereupon, vide order dated 03.03.2008, the Accused was summoned to face trial of the instant complaint case.
4. Upon appearance, notice under Section 251 of the Code of Criminal Procedure, 1973 was framed against the Accused during the course of proceeding dated 08.03.2013 to which, the Accused, inter alia, pleaded not guilty and claimed to have handed over some blank signed cheques to the Complainant without filling up the rest of the particulars therein and asserted that there was a dispute with the Complainant Co. regarding hire charges and the duration for which the car was hired.
5. Thereafter, upon grant of the application under Section 145 (2) of the Negotiable Instruments Act, 1881 (as amended to date) vide order dated 08.03.2013, the Accused was granted the opportunity to crossexamine the Complainant witness(es).
C.C. No. 520307/16 Page 3 of 156. In order to bring home the offence complained of against the Accused, the Complainant examined only one witness, namely its AR qua CW1. The AR of the Complainant (CW1) adopted his pre summoning evidence and was crossexamined pointedly by the Ld. Counsel for the accused on 08.07.2016. The sum and substance discernible from the testimony of CW1 may be delineated as hereafter:
Although, CW1 categorically deposed that the Complainant Co. had executed a written agreement with the Accused and the same could be produced after going through the records of the Co., however, it is piquant to notice that neither any averment to that effect has been made in the complaint nor did the Complainant took steps to bring the said alleged agreement forming a substratum of the transaction entailed herein on record to manifest, inter alia, as much the rate as the duration for hire, notwithstanding the specific query raised by the Ld. Counsel for the Accused while crossexamining CW1.
7. Upon conclusion of CE, statement of the Accused, inter alia, under Section 313 of the Code of Criminal Procedure, 1973 was recorded on 05.10.2016. In response to the incriminating evidence put to him, the Accused reiterated the stance assumed by him in notice under Section 251 of the Code of Criminal Procedure, 1973 and elaborated upon his defence stating that he had taken a car on hire from the Complainant Co. @ Rs. 300/ (rupees three hundred only) per day but when the latter tried to raise the rate of hire, the former had duly returned the vehicle and claimed to have issued the impugned cheques, C.C. No. 520307/16 Page 4 of 15 qua security, along with three others at the time availing the hire facility. The Accused denied being liable in the tune of the amount entailed in the impugned cheque inasmuch as claimed to have discharged the entire liability arising out of the hire arrangement. He unequivocally denied the existence of any written agreement with the Complainant, though.
8. The Accused adduced himself as the lone defence witness, and got himself examined qua DW1. In his statement, DW1 denied having issued the impugned cheques to the Complainant in pursuance of any liability and claimed to have handed over the same as security in blank, albeit signed condition. Besides denying his liability, the Accused rather claimed to have paid an amount of Rs.46,500/ (rupees forty six thousand and five hundred only) to the Complainant which was purportedly in excess of the amount due to the latter and placed reliance on the receipts Ex. DW1/1 to DW1/9 in support of the aforementioned fact, nonetheless admitted to have failed to initiate any proceedings either for the recovery of the excess amount or for restitution of the security cheques. He asserted that no written agreement was executed between the parties in respect of the transaction in question inasmuch as the same was based upon an oral understanding; and even the said oral understanding fell apart when the Complainant demanded the daily rent at a higher rate than mutually agreed, the Accused returned the car and opted out of the arrangement.
C.C. No. 520307/16 Page 5 of 159. Final arguments were advanced with equal vehemence on behalf of either party hereto. While it was contended on behalf of the Complainant that the Accused has failed to displace the statutory presumptions envisaged under Section 118 read with Section 139 of the Negotiable Instruments Act, 1881 (as amended todate) and therefore, liable to be convicted for the commission of offence under Section 138 of the Negotiable Instruments Act, 1881 (as amended to date); the Accused, per contra, argued that the foregoing statutory presumptions have been cogently rebutted inasmuch as the Complainant has himself failed to establish the existence of any legally enforceable debt thereby, failed to satisfy the most essential requirements to constitute commission of an offence under section 138 of the Negotiable Instruments Act,1881.
10. In the backdrop of the foregoing factual score, this Court shall now proceed to examine the position of law governing the facts peculiar to the instant CC.
11. Law is rather trite on the subject that following ingredients must be satisfied in order to bring home the guilt of a person accused for the commission of an offence punishable under Section 138 of the Negotiable Instruments Act, 1881. This position of law has been observed by the Hon'ble Supreme Court of India in the matter of Jugesh Sehgal Vs. Shamsher Singh Gogi, (2009) 14 SCC 683:
"9. It is manifest that to constitute an offence under Section C.C. No. 520307/16 Page 6 of 15 138 of the Act, the following ingredients are required to be fulfilled:
(i) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account
(ii) The cheque should have been issued for the discharge, in whole or in part, of any debt or other liability;
(iii) that 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;
(iv) that cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the 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 the bank;
(v) 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 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(vi) 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"
The abovementioned proposition of law was reiterated by the Hon'ble Supreme Court in the matter of Aparna A. Shah v M/s Sheth Developers P. Ltd & Anr. (2013)8 SCC 71
12. Admittedly, apart from disputing the liability, the Accused has objected to the very issuance of the impugned cheques in favor of the Complainant, no other ingredient enumerated hereto fore has been contested by the Accused during the course of the trial of the instant C.C. No. 520307/16 Page 7 of 15 CC. Legally speaking, and taking into account the statutory presumptions leaning in favor of the Complainant and against the Accused, the onus is on the latter to rebut them, not to mention discharge the burden of proving that he is not indebted to the former in the tune of the amount entailed in the impugned cheque, or even that the impugned cheque was not issued for the purpose alleged by the Complainant in its complaint.
13. At this stage, it is deemed germane to reproduce the statutory presumptions applicable to the facts entailed in the instant CC, namely Section 20, 118 & 139, namely -
(Section 20) Inchoate stamped instruments: Where one person signs and delivers to another a paper stamped in accordance with the law relating to negotiable instruments then in force in (India), and either wholly blank or having written thereon an incomplete negotiable instrument, he thereby gives prima facie authority to the holder thereof to make or complete, as the case may be, upon it a negotiable instrument, for any amount specified therein and not exceeding the amount covered by the stamp. The person so signing shall be liable upon such instrument, in the capacity in which he signed the same, to any holder in due course for such amount; provided that no person other than a holder in due course shall recover from the person delivering the instrument anything in excess of the amount intended by him to be paid thereunder.
(Section 118) Presumptions as to negotiable instruments: Until C.C. No. 520307/16 Page 8 of 15 the contrary is provided, 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.
(b) as to date - that every negotiable instrument bearing a date was made or drawn on such date;
(c) as to time of acceptance that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity;
(d) as to time of transfer - that every transfer of a negotiable instrument was made before its maturity.
(e) as to order of indorsements - that the indorsements appearing upon a negotiable instrument were made in the order in which they appear thereon;
(f) as to stamps - that a lost promissory note, bill of exchange or cheque was duly stamped;
(g) that holder is a holder in due course - that the holder of a negotiable instrument is a holder in due course;
Provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the C.C. No. 520307/16 Page 9 of 15 holder is a holder in due course lies upon him.
(Section 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, in whole or in part, of any debt or other liability.
14. Applying the foregoing legal exposition to the facts of the instant case, this Court shall now proceed to examine the competing pleas raised by the parties hereto.
15. The first and foremost plea raised by the Accused in his defense is that the impugned cheque stood invalidated and rendered unenforceable in law by dint of the assertion that the particulars thereof, such as the name of the payee, amount (in words and figures) etc. have not been filled either by him or in his hand; and the fact that he doesn't dispute his signature doesn't compensate for the aforesaid deficiencies amounting to misuse. This Court is, however, of the considered opinion that the plea of the Accused alleging misuse of the impugned cheques and consequent invalidation, or relegated to being non est in law, does not hold water as much by virtue of the provisions of Section 20 of the Negotiable Instruments Act, 1881 as in consonance with the ratio of the judgment rendered by the Hon'ble Apex court in the case titled as 'Bir Singh v. Mukesh Kumar', C.C. No. 520307/16 Page 10 of 15 reported as (2019) 4 SCC 197. The apposite excerpt is reproduced hereafter and reads as under -
"If a signed blank cheque is voluntarily handed over to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer". The plea is accordingly rejected.
16. The second plea raised by the Accused is regarding the non receipt of the legal demand notice on the strength of which the Ld. Counsel of the Accused has argued that the complaint deserves to be dismissed. Perusal of the record reveals that the delivery report of the legal Demand notice has not been placed on record, however, it is nobody's case that the Accused tendered the amounts entailed in the impugned cheque upon entering appearance before this Court in response to summons issued in the instant CC. At this stage, the observations passed by the Hon'ble Supreme Court of India in the celebrated case titled as 'C.C Alavi Haji v. Palalpetty Muhammed & Anr.', reported as (2007) 6 SCC 555 spring to mind which reads as under:
"It is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of Criminal Law, where there is no stipulation of giving of a notice before filing a complaint. Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt C.C. No. 520307/16 Page 11 of 15 of summons from the court in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. 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 G.C. Act and Section 114 of the Evidence Act. In our view, any other interpretation of the proviso would defeat the very object of the legislation."
In light of the abovementioned circumstances coupled with the fact that receipt of legal notice has been admitted by the Accused in his cross examination as DW1 dated 14.05.2019, the plea with respect to the nonreceipt of the legal demand notice is also rejected as being frivolous and legally inconsequential.
17. The third plea raised by the Accused is that the Complainant is reprehensible of misappropriating the impugned cheque inasmuch as it is one of the four security cheques issued to the latter at the time of availing the hire facility and since, he has discharged the entire liability, the impugned cheque cannot be said to have been issued toward the discharge of any liability. The law is rather trite on the subject that once it is established that the cheque was drawn on the account maintained by the Accused, either in his personal capacity or in the name of the firm, and it bear his signatures, the burden is on the C.C. No. 520307/16 Page 12 of 15 Accused to explain the purpose for which the impugned cheque was given to and thus, came in the possession of the Complainant. In the instant CC, besides contending that the impugned cheque was issued by way of security, the Accused has not only contested the liability by asseverating that he has already paid in excess of the amount otherwise due and liable under the hire arrangement toward the Complainant Co. but stepped into the witness box and corroborated the same by adducing the receipts (Ex. DW1/1 to DW1/9). The bone of the contention between the parties is the rate as well as duration for hire. While the Complainant has, in no convoluted terms, suggested that the rate of hire was Rs.750/ per day, the Accused, on the other hand, has deposed that the agreed rate was Rs.300/ per day. In the considered opinion of this Court, once there is a dispute with respect to the terms of an arrangement between the parties, and one of them claims that the terms have been reduced into writing whereas, the other party does not, the onus of proving the (exact) terms of engagement is on the former party as against the latter, for this Court has no means of ascertaining them unless the agreement is brought on record. In the instant case, the Complainant knows full well that the Accused has contested the very execution of a written agreement with respect to hire, not to mention the terms thereof, and yet no steps were taken by the former to adduce the socalled written agreement on record. At this stage, the ensuing reproduced provisions of Section 114 (g) of the Evidence Act, 1872 spring to mind which reads as infra:
"That evidence which could be and is not produced C.C. No. 520307/16 Page 13 of 15 would, if produced be unfavorable to the person who withholds it"
18. Having said that, this Court has no reservation in opining that the neglect/omission of the Complainant to bring the socalled written agreement on record, despite ample opportunity, only lends credence to version of the Accused on all counts, including but not limited to - the rate of hire, the duration for hire, not to mention that the Accused has already paid the Complainant in excess of the liability under the hire arrangement, more so when the receipts (Ex. DW1/1 to DW1/9) have not been contested by the Complainant. In this backdrop, there is no gainsaying that the Accused has cogently displaced the statutory presumption envisaged under Section 139 of the Negotiable Instruments Act, 1881 (as amended to date) visàvis liability on the touchstone of balance of probabilities. At this stage it is germane to recount the observations of the by the Hon'ble Apex Court in the case titled as 'Rangappa V. Sri Mohan', reported as (2010) 11 SCC 441 which read as:
"..."When an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of "preponderance of probabilities. Therefore, if the accused is able to raise a probable defence which creates doubt about the existence of a legally enforceable debt or liability, the prosecution can fail. The accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his own"...C.C. No. 520307/16 Page 14 of 15
19. The gravity of the aforesaid facts and circumstances are rather, compounded, not to mention are all the more convoluted, in the wake of the fact that the Complainant has miserably failed to prove the existence of a legally enforceable debt or liability thereby failing to satisfy an essential ingredient for constituting an offence under Section 138 of the Negotiable Instruments Act, 1881 (as amended to date).
20. All in all, the version put forth by the Complainant in his complaint as well as the attending circumstances along with the enclosed documents cease to inspire confidence in this Court. As a necessary corollary, applying the cardinal rule of criminal jurisprudence that when in doubt, its benefit should invariably be exercised in favor of the Accused, this Court hereby, acquits the Accused for the commission of offence under Section 138 of the Negotiable Instruments Act, 1881 complained of by the Complainant in the instant CC. Digitally signed by AKRITI AKRITI MAHENDRU MAHENDRU Date: 2019.09.30 16:29:39 +0530 Announced in the open (AKRITI MAHENDRU) Court on 26.09.2019 MM04 (NI Act) Central, THC, Delhi.
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