Delhi District Court
I Find Myself In Agreement With ... vs Mahender Pal Page 17Of19 on 18 May, 2015
THE COURT OF MS. NEHA PALIWAL
METROPOLITAN MAGISTRATE03, (EAST)
KARKARDOOMA COURTS, NEW DELHI
Complaint No. 375/01/2011
Unique ID No. 02402R0291872011
PS. Mandawali
Smt. Sheela Sharma,
W/o Late Sh. Yudhvir Sharma,
R/o C14, Ganesh Nagar, Pandav Nagar Complex,
New Delhi - 110092. ......... Complainant.
Versus
Sh. Mahendra Pal
S/o Sh. Ram Singh,
R/o C253, Millenium Apartment,
Sector 18, Rohini,
Delhi 110089.
Also at:
12P, LIC of India,
Branch Shakti Nagar,
New Delhi. ......... Accused.
CC No. 375/01/2011 Sheela Sharma Vs Mahender Pal Page 1of19
COMPLAINT U/s 138 OF THE NEGOTIABLE INSTRUMENTS ACT
Offence complained of : U/s 138 N.I. Act
Plea of Accused person : Not guilty
Complaint filed on : 23.9.2011
Final Arguments heard &
Concluded on : 18.5.2015
Date of decision of the case : 18.5.2015
Final order : Accused is acquitted for the
offence U/s 138 NI Act.
BRIEF FACTS AND REASONS FOR DECISION OF THE CASE
1. The present case has been instituted on the complaint of the complainant Smt. Sheela Sharma, U/s 138 Negotiable Instrument Act 1881 (as amended up to date) against the accused Mahendra Pal.
2. As per the complaint, it is the case of the complainant that her late husband and accused had friendly relations. The accused approached her husband for a friendly loan of Rs. 10 lacs in order to purchase property. The complainant collected the amount of Rs. 10 lacs from all her resources and gave the said amount to the CC No. 375/01/2011 Sheela Sharma Vs Mahender Pal Page 2of19 accused in first week of October 2008 for a total sum of Rs. 10 lacs for 24 months only.
3. It is the case of the complainant that accused was to repay the said loan amount to the complainant at monthly installment of Rs. 35000/ per month on 5th of every english calendar month. Thereafter, the remaining amount of Rs. 1,60,000/ was to be paid by the accused to the complainant on 3rd October 2010.
4. It is the case of the complainant that with a view to clear the liabilities the accused issued a post dated cheque bearing no. 159064, dated 21.7.2011 for a sum of Rs. 10 lacs drawn on Axis Bank Ltd. Shakti Nagar Branch in favour of the complainant and assured the complainant that the cheque would be honoured on its presentation. It is further the case that when the accused did not complied with the agreed transaction, the complainant informed him that she will deposit the cheque for encashment and the same was not objected to by the accused.
5. It is further the case of the complainant that when she deposited the cheque for encashment, it was returned unpaid with the remarks 'Funds Insufficient' vide cheque returning memo dated 9.8.2011. Thereafter, a legal notice dated 23.8.2011 was sent by the complainant to the accused, dispatched on 1.9.2011, whereby the CC No. 375/01/2011 Sheela Sharma Vs Mahender Pal Page 3of19 accused was asked to pay the said cheque amount within 15 days to the complainant. The said notice was sent by way of registered AD, UPC and Speed Post.
6. It is the case of the complainant that as accused has not replied to the said notice within the period of 15 days, nor has paid the amount to the complainant, the present complaint was filed by the complainant against the accused. Thus it is prayed by the complainant that the accused be tried and punished for the offence U/s 138 NI Act.
7. In the present matter the complaint was filed by the complainant before the Court on 23.9.2011. The cognizance for the offence was taken on 24.9.2011 and on the very same date the Ld. Predecessor of this Court summoned the accused for the offence U/s 138 NI Act.
8. Thereafter, on 2.11.2011 accused appeared before the court. He was admitted to court bail on the same date and on that day notice U/s 251 Cr.P.C. for the offence under section 138 NI Act was framed against the accused to which he pleaded not guilty and claimed trial.
9. The accused at the stage of notice admitted that he had entered into an agreement with the husband of the complainant for CC No. 375/01/2011 Sheela Sharma Vs Mahender Pal Page 4of19 seeking loan of Rs. 10 lacs in October 2008. However, he took the defence that as the transaction did not materialize between the parties, the loan amount was not disbursed by the husband of the complainant to him. The accused further admitted the issuance of the impugned cheque in question and that he had knowledge that the cheque was dishonoured when the same was presented for encashment and that he has received legal notice of the complainant regarding intimation of dishonour of cheque. However, it was submitted by him that he took loan from Axis Bank in February 2009 and he had no pecuniary liability towards the complainant.
10. As it was submitted by Ld. Counsel for complainant that he has no objection if the opportunity is granted to the accused to cross examine the complainant, Ld. predecessor of this court put the matter straightaway for the purpose of cross examination of complainant and dispensed with the requirement of moving the application U/s 145(2) NI Act.
11. In order to prove her case, the complainant examined three witnesses at the stage of post summoning complainant's evidence. She examined herself as CW1 and tendered her evidence by way of affidavit and relied upon the documents exhibited as Ex. CW1/1 CC No. 375/01/2011 Sheela Sharma Vs Mahender Pal Page 5of19 to Ex. CW1/4 which are as under:
(a) Ex. CW1/1 is cheque bearing no.
159064, dated 21.7.2011 drawn on Axis Bank Ltd. Shakti Nagar, New Delhi
(b) Ex. CW1/2 Cheque returning memo dated 9.8.2011 containing the remarks 'Funds Insufficient'.
(c) Ex. CW1/3 Legal Notice dated
23.8.2011
(d) Ex. CW1/4A to Ex. CW1/4D Postal receipts
dated 1.9.2011.
12. CW2 is Sh. Raghubir Singh Chaudhary and CW3 is daughter of complainant Smt. Sadhna Tiwari. CW3 was examined after an application was moved by the complainant U/s 311 Cr.P.C. for summoning and examining additional witnesses. Post summoning complainant's evidence was closed, vide order of the Court dated 29.11.2013 and thereafter, the matter was fixed for statement of accused.
13. Statement of accused U/s 281 read with Section 313 Cr.P.C. was recorded before the Court on 5.2.2014, wherein the accused reiterated the same stand as was taken by him at the stage of CC No. 375/01/2011 Sheela Sharma Vs Mahender Pal Page 6of19 framing of notice and stated that he was about to take a loan of Rs. 10 lacs from the husband of the complainant and the formalities were also completed. Pursuant to the same he had also given blank signed cheque to the husband of the complainant and affidavit. However, as his loan of Axis Bank got sanctioned on 9.2.2009 he did not took loan from the husband of the complainant. It was further submitted that before he could take the cheque back from the husband of the complainant, he expired. It was submitted by him that he had no pecuniary liability towards the complainant and had not received any loan from the complainant. He had received the legal notice and had even replied to the same. It was submitted by him that he wishes to lead evidence in his defence.
14. Thereafter the case was fixed for defence evidence and the accused in support of his case examined himself as DW1.
15. Thereafter the matter was fixed for final arguments.
16. I have heard the arguments as advanced by the Ld. counsels for the complainant and the accused and have gone through the material placed on record alongwith the evidence adduced by the parties before the court.
17. Before adverting to the case in hand it is necessary to discuss the law of the land as applicable to the present case in hand. The CC No. 375/01/2011 Sheela Sharma Vs Mahender Pal Page 7of19 main ingredients of Section 138 of the Negotiable Instruments Act are as follows:
(a) The accused issued a cheque on an account maintained by him with a bank.
(b) The said cheque has been issued in discharge of any legal debt or other liability.
(c) The cheque has been presented to the bank within the period of six months from the date of the issuance of the cheque or within the period of its validity.
(d) When the aforesaid cheque was presented for encashment, the same was returned unpaid/ dishonoured.
(e) The Payee of the cheque issued a legal notice of demand within 30 days from the receipt of information by him from the Bank regarding the return of the cheque.
(f) The Drawer of the cheque failed to make the payment within 15 days of the receipt of the aforesaid legal notice of demand.
18. If the aforesaid ingredients are satisfied then the drawer of CC No. 375/01/2011 Sheela Sharma Vs Mahender Pal Page 8of19 the cheque shall be deemed to have committed an offence punishable u/s 138 Negotiable Instruments Act.
19. In the present case in hand the accused at the stage of notice and at the stage of statement of accused has admitted that he had issued the cheque and had handed over the same to the husband of the complainant. He had also admitted that he had the knowledge regarding the dishonour of the cheque and he had received the legal notice intimating him regarding the dishonour of the cheque and has also replied the same. Thus in view of the admission of the accused, it is established that the accused is the drawer of the impugned cheque, the cheque was of an account maintained by the accused with the bank, the cheque was dishonoured on account of 'Funds Insufficient' and that the legal notice was received by the accused.
20. The only question which remains to be adjudicated is whether the cheque was issued by the accused to the complainant in discharge of legally enforceable debt or liability or not.
21. Section 118 NI Act raises a number of presumptions of consideration, date, time of acceptance, time of transfer and status of holder in due course unless the contrary is proved. The section lays down special rule of evidence applicable to negotiable CC No. 375/01/2011 Sheela Sharma Vs Mahender Pal Page 9of19 instruments and presumptions are one of law and the court shall presume that the negotiable instrument which is the cheque in the present case, was made for consideration, was made on the date which it bears and that it was handed over to the complainant by the accused in due course.
22. Section 139 of Negotiable Instruments Act raises presumption that the holder of the cheque which is the complainant in the present case received the cheque for the discharge in whole or in part of any debt or other liability.
23. However, these presumption U/s 118 and Section 139 NI Act are rebuttable in nature. These presumptions have to be compulsorily raised as soon as the execution of cheque by the accused is admitted or proved by the complainant and thereafter the burden is shifted to accused to prove otherwise. A presumption is not itself evidence, but only makes a prima facie case for a party for whose benefit it exists.
24. In the present case in hand the accused has admitted before the court that the cheque in question bears his signatures though he has disputed that the cheque was handed over to the complainant for discharge of any legally enforceable debt or other liability. Thus in the present case the execution of the cheque is admitted by the CC No. 375/01/2011 Sheela Sharma Vs Mahender Pal Page 10of19 accused before the court. As per the Negotiable Instruments Act, there is no legal requirement that the body of the cheque would also be filled by the person who is signing the same and once the signatures are admitted by the drawer, the presumptions come into force. However, these presumptions are rebuttable in nature, but the onus to rebut the same is upon the accused.
25. Hon'ble Supreme Court of India in the case of Krishna Janardhan Bhatt Vs Dattatraya G. Hegde (2008) 2 Supreme Court Cases (Cri.) 166 has cautioned that the court must be on guard to see that merely on the application of presumption as contemplated U/s 139 of the NI Act, the same may not lead to injustice or mistaken conviction.
26. It was held by Hon'ble Apex Court in the said case that the standard of proof, so as to prove a defence on the part of the accused is preponderance of probabilities whose inference can be drawn not only from the materials brought on record by the parties, but also by reference to the circumstances upon which he relies. It was held that where chances of false implication cannot be ruled out, the background fact and the conduct of the parties together with their legal requirements are required to be taken into consideration. Furthermore it is not essential for the accused to get CC No. 375/01/2011 Sheela Sharma Vs Mahender Pal Page 11of19 himself examined as witness and he can discharge the burden of proof which has been shifted upon him due to the presumptions even by cross examination of the complainant's witnesses.
27. In the case of Kumar Exports VS Sharma Carpets 2009 II AD (SC) 117 it was held by the Hon'ble Apex Court that mere denial of passing of consideration and existence of debt also would not serve the purpose of accused, something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. It was further held that once the rebutal evidence is adduced and accepted by the court the evidential burden shifts back upon the complainant and thereafter, the presumptions U/s 118 and 139 of the Act will not again come to the complainant's rescue.
28. Thus it has been held by Hon'ble Apex Court that Section 139 of the Act is an example of reverse onus clause which has been included for improving the credibility of Negotiable Instruments. However, as the offence U/s 138 is a regulatory offence only, therefore, test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused cannot be expected to discharge an unduly high standard of proof.
29. In view of the above said decisions it can be safely said that CC No. 375/01/2011 Sheela Sharma Vs Mahender Pal Page 12of19 the onus upon the accused is only to show a probable defence which is not high as that of beyond reasonable doubt and only the accused has to prove his defence to the extent of preponderance of probabilities in order to shift back the onus upon the complainant to prove his case before the court.
30. In the present case in hand the accused has been able to rebut the presumptions as raised U/s 118 and 139 of NI Act on the following grounds.
31. Firstly, in the present matter it is admitted by the complainant that she is not an Income Tax Payee. It is further deposed by her that her husband had given the amount to the accused by way of cash. It was held in the case of Krishna Janardhan Bhatt Vs Dattatraya Hegde Supra as under: "26. The courts below failed to notice that ordinarily in terms of Section 269SS of the Income Tax Act, any advance taken by way of any loan of more that Rs. 20,000/ was to be made by way of an account payee cheque only.
32. Secondly, in the present matter it is deposed by the complainant in her cross examination that the sum of Rs. 10 lacs was arranged by her husband by selling a house and by their CC No. 375/01/2011 Sheela Sharma Vs Mahender Pal Page 13of19 savings and in presence of CW2 Sh. Raghubir Singh Chaudhary. It is deposed by CW2 that the complainant had handed over Rs. 10 lacs to the accused in cash and accused at that time handed over a fully filled cheque of Rs. 10 lacs in the name of the complainant, to the complainant. There is no written agreement entered into between the parties. Moreso it is hard to believe that a person would sell their own property and give their savings to the other person in way of a friendly loan and that too to the tune of Rs. 10 lacs.
33. Thirdly, perusal of the body of the cheque reveals that the cheque was signed and the amount in figures was written in one handwriting and the name of the payee and the date and the amount in words was written in another handwriting.
34. Fourthly and most importantly it is the case of the complainant in her complaint that accused had issued a post dated cheque for a sum of Rs. 10 lacs in her favour and when accused did not stand upon his words, the complainant informed him regarding depositing the cheque in the bank for encashment. The same was not objected to by the accused. It is deposed by CW2 Sh. Raghubir Singh Chaudhary, that accused handed over the impugned cheque in question to the complainant on the same date when the CC No. 375/01/2011 Sheela Sharma Vs Mahender Pal Page 14of19 complainant handed over the loan to the accused. No written instruction is placed on record by the complainant to show that the accused has authorised her later on to present the cheque in question before the bank.
35. In the case of M/s Collage Culture VS Apparel Export Promotion Council, 2007 (4) JCC (NI) 388, it was held by the Hon'ble High Court of Delhi that a post dated cheque may be issued under two circumstances, one, it may be issued for a debt in presenti but payable in future, second it may be issued for a debt which may become payable in future upon occurrence of a contingent event. The second types of cheque would be by way of security. In the present case the impugned cheque would fall under the second category as in view of the own deposition of complainant's witnesses the cheque was handed over to the complainant by the accused in the same transaction when the loan was handed over and as per the agreement entered into between the parties as stated in the complaint of the complainant, the loan was to be repaid by the accused to the complainant in monthly installments of Rs. 35000/ per month and thereafter the remaining amount of Rs. 1,60,000/ was to be paid on 3.10.2010. Thus as there was a mode of payment of loan agreed upon, though as per the CC No. 375/01/2011 Sheela Sharma Vs Mahender Pal Page 15of19 complainant not adhered to by the accused, the cheque given at the time of handing over the loan amount would be issued for a debt which may become payable in future upon occurrence of contingent event, which in the present case would be non adherence of schedule of payment and therefore, fall under the category of cheques issued by way of security.
36. Considering all these four grounds in totality, the accused has succeeded to prove a probable defence in his favour as in the present case the loan transaction is shown to be a friendly loan of Rs. 10 lacs which has not been shown in the Income Tax Returns and has been given by way of cash by the complainant to the accused as per her own admission, thereby casting a suspicion upon the version of the complainant as a transaction which is bad in one law cannot be said to be good in another. Moreso, the cheque is established to be a cheque issued for the purpose of security, the cheque is written in two inks, the date, name of payee and the amount in words is written in one ink and the signatures and the amount in figures is written in different ink.
37. In the case of Vipul Kumar Gupta Vs Vipin Gupta 2012 (4) JCC (NI) 248 it was held by Hon'ble High Court of Delhi as under
: CC No. 375/01/2011 Sheela Sharma Vs Mahender Pal Page 16of19 I find myself in agreement with reasoning given by Ld. ACMM that before a person is convicted for having committed an offence under section 138 of the Act, it must be proved beyond reasonable doubt that the cheque in question, which has been made as a basis of prosecuting the respondent/accused, must have been issued by him in the discharge of his liability or a legally recoverable debt. In the facts and circumstances of this case, there is every reason to doubt the version given by the appellant that the cheque was issued in the discharge of a liability or a legally recoverable debt. The reasons for this, are a number of facts which have been enumerated by the Learned ACMM also. Some of them are that nonmentioning by the appellant in his Income Tax Return or the Books of Accounts, the factum of the loan having been given by him because by no measure, an amount of Rs. 9,00,000/ can be said to be a small amount which a person would not reflect in his Books of Accounts or Income Tax Return, in case the same has been lent to a person. The appellant, neither in the complaint nor in his evidence, has mentioned the date, time or the year when the loan was sought or given. The appellant has presented a cheque, which obviously is written with two different inks, as the signatures is appearing in one ink, while as the remaining portion, which has been filled up in the cheque, is in a different ink. All these factors prove the defence of the respondent to be plausible to the effect that he had issued CC No. 375/01/2011 Sheela Sharma Vs Mahender Pal Page 17of19 these cheques by way of security to the appellant for getting a loan from Prime Minister Rojgar Yojna. The respondent/accused has only to create a doubt in the version of the appellant, while as the appellant has to prove the guilt of the accused beyond reasonable doubt in which in my opinion he has failed miserably."
38. Thus in the said judgment also the Hon'ble High Court of Delhi uphelded the judgment of the trial court on the reasoning that the loan transaction was not shown in either Books of Accounts or Income Tax Returns and the cheque was written in two different inks, signatures in one ink and body in the another.
39. In the present case in hand as well the complainant has not shown the loan transaction in the Income Tax Returns, the transaction was not by way of an account payee cheque, the body of the cheque was written with different ink and the cheque was signed with different ink, the complainant's averment that the friendly loan was given after selling their property and from their savings fails to inspire confidence and the impugned cheque was issued by way of security.
40. Thus in the present case, the accused has been able to rebut the presumptions as laid U/s 118 and 139 of NI Act and the onus has shifted upon the complainant to prove the guilt of the accused CC No. 375/01/2011 Sheela Sharma Vs Mahender Pal Page 18of19 beyond the shadow of all reasonable doubts. However, in the present case the complainant after the onus has shifted upon her has failed to prove the guilt of the accused beyond the shadow of all reasonable doubts.
41. In view of the above said discussions and findings the accused is acquitted for the offence U/s 138 NI Act.
42. For the purpose of section 437 A Cr.P.C, personal bond/surety bond stand accepted for a period of next six months. Original RC retained. Robkar be issued.
43. Let file be consigned to record room after due compliance.
Announced in the open Ccourt
today i.e. 18.5.2015 (NEHA PALIWAL)
MM03(E):KKD:DELHI:
It is certified that the judgment contains 19 pages and all pages bear my signatures.
(NEHA PALIWAL) MM03 (E):KKD:DELHI:18.5.2015 CC No. 375/01/2011 Sheela Sharma Vs Mahender Pal Page 19of19