Delhi District Court
Additional Sessions Judge/Special ... vs Joginder Singh on 6 February, 2013
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IN THE COURT OF SH RAJESH KUMAR SINGH
ADDITIONAL SESSIONS JUDGE/SPECIAL JUDGE NDPS (NORTH)
DELHI
CA NO. 84/12
M/s. Mahavira Narrow Fab. Pvt. Ltd.
Having its registered office at
Flat No. C92, Bathla Cooperative
Group Housing Society Ltd.
Plot no. 43, I.P. Extension, Area,
Patpar Ganj, New Delhi110092
Through its Director
Sh. Vijay Kumar Jain.
2. Vijay Kumar Jain
S/o Late Sh Gian Chand Jain
Director of M/s. Mahavira Narrow Fab. Pvt. Ltd.
Having its registered office at
Flat No. C92, Bathla Cooperative
Group Housing Society Ltd.
Plot no. 43, I.P. Extension, Area,
Patpar Ganj, New Delhi110092
Both Having their Administrative office & Works,
E52, South Side of G.T.Road,
Industrial area, Ghaziabad, U.P
........APPELLANTS
Versus
Joginder Singh
S/o Sh. Gurbachan Singh
Proprietor of M/s. Mohan Thread House,
5668, Gandhi Market,
Sadar Bazar, Delhi110006. .......RESPONDENT
C.A. No. 84/12 Page 1 of 15 pages
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DATE OF INSTITUTION: 05.12.2012
JUDGMENT RESERVED ON: 02.02.2013
DATE OF JUDGMENT: 06.02.2013
JUDGMENT
1. The present appeal is directed against the Judgment dated 05.11.2012 and Order on sentence dated 06.11.2012 passed by the court of Ld MMIII/N/THC in CC no. 261/1. The appellant no. 1 is a private limited company and appellant no. 2 is its Director. The appellants have been convicted U/s 138 NI Act. They have been directed to pay compensation of Rs. 18 Lacs to the respondent (complainant). The appellant no. 2 has also been sentenced to SI for One year.
2. The case has been filed on the basis of cheque dated 15.03.2010 for a sum of Rs. 12,00,000/ (Twelve Lacs only) drawn on Union Bank of India. The cheque is Ex.CW1/1. The case of the complainant/respondent was that the appellant no. 1 through the appellant no. 2 took loan amounting to Rs. 12 Lacs from him on different occasions and executed promissory notes and receipts. The cheque in question was issued by the appellants towards discharge of their liability. On presentation the cheque was dishonoured. The return memo is Ex.CW1/2 wherein it is mentioned that the cheque was returned unpaid as the account had been blocked. The complainant/respondent sent the legal notice dated 13.04.2010 which is Ex.CW1/4. The notice was sent on the addresses of the appellants through UPC and through RC. The original receipts of RC are Ex.CW1/4 to Ex.CW1/7. The original receipts of UPC are Ex.CW1/8 C.A. No. 84/12 Page 2 of 15 pages 3 (colly). The UPC were not received back. The RCs were returned unserved. The envelopes are Ex.CW1/9 to 1/12. Ex.CW1/11 was sent to the appellant no. 2 on his Rohtak Road address and the same has been returned with the report of refusal. Since the appellants did not pay the cheque amount within the statutory period, the complaint was filed. On 31.10.2012 the Ld Trial Court observed that formal notice u/s 251 Cr.P.C had not been framed. With the consent of the ld counsel for appellant/accused, the notice was framed. No request was made by the appellant/accused for recall of any witnesses in view of framing of the notice on 31.10.2012. On the same day, final arguments were heard. It was stated by the appellant no. 2 that he had not issued the cheque towards discharge of any legal liability. He further stated that three signed cheques had been misplaced and they some how reached the complainant who subsequently misused them.
3. The complainant had filed his affidavit as CW1. On 09.02.2011 the application of the appellants/accused u/s 145 (2) Cr.P.C was allowed and permission was granted to cross examine the complainant/CW1. On the request of the appellants/accused, DW1 SI Brijesh Kumar Sharma was examined from PS Loni, Gaziabad. In his statement, the documents Ex.DW1/A and Ex.DW1/B were exhibited. Statement of the accused/appellant was recorded u/s 313 Cr.P.C on 11.07.2012. After recording of the statement u/s 313 Cr.P.C, the appellants did not examine any other witness in defence. It has been noticed that the notice u/s 251 Cr.P.C was framed against the appellant no. 2 only and the statement u/s 313 Cr.P.C has also been recorded qua him only.
C.A. No. 84/12 Page 3 of 15 pages 4 However this point has not been raised by the appellant probably because no prejudice has been caused to the appellant no. 1 company. Ex.DW1/B is an intimation dated 07.02.2010 addressed to the S.O. PS Loni, Gaziabad regarding loss of some important papers and three signed cheques bearing no. 006332, 059545 and 059550. DW1 produced the daily diary register for 07.02.2010 as Ex.DW1/A and deposed that there was no mention in the daily diary regarding receipt of Ex.DW1/B. He also stated that he could not say whether the initials of the recipient on Ex.DW1/B tallied with the signature of any officer who has made entries in Ex.DW1/A. Regarding the seal of the PS on Ex.DW1/B, he stated that the seal appeared to be similar to the one used by the PS.
4. Ld counsel for the appellant has argued that the cross examination of CW1/complainant creates serious doubt regarding his claim that the cheque in question had been issued by the accused/appellant in discharge of a legally enforceable debt and therefore the appellants should have been acquitted by the Ld Trial Court. Ld counsel has drawn my attention to the cross examination of CW1 where he admits that the date and amount in the cheque were filled by him. The respondent did not produce the alleged receipts and promissory notes. From the statement of the complainant/CW1 the alleged debt was also barred by limitation. It is also argued that the notices u/s 138 NI Act were not served upon the appellant and on this ground also they should have been acquitted. In support of his arguments ld counsel for the appellant has relied upon the following judgments:
i) IV (2010) SLT 56 C.A. No. 84/12 Page 4 of 15 pages 5
ii) 2012 III AD (Delhi) 545
iii) 2007 (4) RCR Crl. 588 (SC)
iv) 2009 (1) RCR Crl. 333
v) 2009 (5) RCR Crl. 186
5. Ld counsel for the respondent submits that the appellant no. 2 admits his signature on the cheque. In the cross examination of the complainant/CW1 suggestion was given that the complainant mentioned the date and amount on the cheque in presence of the accused. By giving this suggestion the accused admits that the complainant was authorized to fill the cheque which was already signed by him. The Ld Trial Court has considered the aspect of limitation regarding the debt and the Ld counsel for the appellant had abruptly closed the cross examination of the complainant during the trial without asking him to produce the promissory note. DW1 has produced the daily diary register and the complaint Ex.DW1/B is not found mentioned in the register. It shows that the appellant fabricated the complaint in order to save himself from the prosecution. The appellant has not disclosed the reason why he would keep signed blank cheques when he himself had to sign them. The appellant did not reply to the notice u/s 138 NI Act and adverse presumption is to be drawn against him u/s 114 of Indian Evidence Act. According to ld counsel for the respondent the ld Trial Court rightly convicted the appellant. In support of his arguments, ld counsel for the respondent has relied upon following Judgments:
i) 2001 (4) RCR Crl.
ii) 2002 (2) RCR Crl.
C.A. No. 84/12 Page 5 of 15 pages
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Iii) 2008 (2) RCR Crl.
iv) 2008 (3) RCR Crl
v) AIR 2008 (NOC) 1008 (MAD)
6. Firstly I shall consider the arguments regarding the notice u/s 138 NI Act. Ld counsel for the respondent submitted that there is presumption of service which was not rebutted by the appellant and the Ld Counsel for the appellant argued that it was the duty of the respondent to prove the service. The law relating to this issue has been explained by a three Judges bench of the Hon'ble Supreme Court of India in the matter of C.C. Alavi Haji Vs. Palapetty Muhammed and Anr. AIR 2007 SC (Supp) 1705. Referring to the earlier judgments in the matter of Jagdish Singh Vs. Natthu Singh AIR 1992 SC 1604 , State of M.P. Vs. Heera Lal and Anr. (1996) 7 SCC 523 and V. Rajan Kumari Vs. P. Subbrama Naidu and Anr. (2004) 8 SCC 774 Hon'ble Supreme Court observed that when a notice is sent by registered post and is returned with a postal endorsement "refused" or "not available in the house" or "house locked" or "shop closed" or "addressee not in station", due service has to be presumed. It was further held that the complainant is not required to make specific averment in the complaint that the accused intentionally avoided the service and it is the duty of the drawer to rebut the presumption about the service of the notice and show that he had no knowledge that the notice was brought to his address or that the address mentioned in the cover was incorrect or that the letter was never tendered or that the report of the postman was incorrect.
7. In the present case the registered covers have been received back C.A. No. 84/12 Page 6 of 15 pages 7 unserved. The RCs addressed to the appellant no. 1 have been returned with the report that the company was closed and that it was not working from the given address. The RC addressed to appellant no. 2 was returned with the report of refusal. There is presumption of service against the appellant in view of the law laid down by the Hon'ble Supreme Court and it was the duty of the appellant to rebut this presumption. The appellants did not rebut the presumption of service and therefore adverse presumption can be drawn u/s 114 NI Act against them for not replying to the notice. However this presumption has to be considered alongwith the finding on the existence of legally enforceable debt which is most important in a case u/s 138 NI Act.
8. The law relating to section 139 NI Act provides that it shall be presumed unless 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. Similar presumption is provided u/s 118 (a) NI Act. Section 118 (a) NI Act reads as : "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; ".
9. The law relating to the presumption u/s 139 NI Act has been explained by the Hon'ble Supreme Court in the matter of Krishna Janardhan Bhat Vs. Dattatraya G. Hegde 2008 AIR (SC) 1325, 2008 (2) SCC (Cri) 166. It has been held by the Hon'ble Supreme Court that section 139 NI Act merely raises presumption in favour of holder of C.A. No. 84/12 Page 7 of 15 pages 8 cheque that same has been issued for discharge of any debt or other liability. Existence of legally recoverable debt is not a matter of presumption u/s 139. The accused is not required to step into witness box. He may discharge his burden on the basis of materials already brought on record.
10. In the same Judgment Hon'ble Supreme Court referred to its judgment in Bharat Barrel & Drum Manufacturing Company Vs. Amim Chand Payrelal [(1999) 3 SCC 35] and quoted part of the judgment in paragraph 24 which reads as "Upon consideration of various judgments as noted herein above, the position of law which emerges is that once execution of the promissory note is admitted, the presumption u/s 118 (a) would arise that it is supported by a consideration. Such presumption is rebuttable. The defendant can prove nonexistence of consideration by raising a probable defence. If the defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the plaintiff who will be obliged to prove it as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the Negotiable Instrument. The burden upon the defendant of proving the nonexistence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies. In such an event, the plaintiff is entitled under law to rely upon all the evidence led in the case including that of the plaintiff as well. In case, where the defendant fails to discharge the initial onus of proof by showing the C.A. No. 84/12 Page 8 of 15 pages 9 nonexistence of the consideration, the plaintiff would invariably be held entitled to the benefit of presumption arising under section 118
(a) in his favour. The court may not insist upon the defendant to disprove the existence of consideration by leading direct evidence as the existence of negative evidence is neither possible nor contemplated and even if led, is to be seen with a doubt".
11. In 2008 (3) RCR (Crl.) 205 which is relied upon by the respondent also it has been held by the Hon'ble Supreme Court that the accused can rebut the initial presumption either by direct evidence or by preponderance of probabilities showing that the existence of consideration was improbable, doubtful or illegal.
12. The judgments by the Hon'ble Supreme Court of India referred above lay down the law that under section 139 NI Act there is only presumption of consideration and there is no presumption of existence of legally enforceable debt. The presumption of consideration under section 118 (a) NI Act arises if the execution of the cheque is admitted, the presumption under section 118 (a) and section 139 NI Act can be rebutted by the accused by raising a probable defence, the standard of proof for the rebuttal evidence by the drawer/accused would be preponderance of probabilities and the drawer/accused can rely upon the evidence of the complainant to discharge the initial onus. Once the initial burden is discharged, it is the duty of the holder of the cheque/complainant to prove that the cheque had been issued in discharge of a legally enforceable debt.
13. The first question is whether the appellant issued the cheque. CW1 had stated in his cross examination that "it is correct that I fill the C.A. No. 84/12 Page 9 of 15 pages 10 date in the cheque in the presence of the accused" and also "it is correct that amount in the cheque was filled by me in the presence of the accused". Ld counsel for the appellant has submitted that this suggestion was given to bring out contradiction as the respondent stated in his examinationinchief and in the complaint that the appellant had issued the cheque. If these statements are read in isolation with the other statement in the cross examination, impression is created that the appellant himself handed over a signed blank cheque to the complainant with authority to fill the same. However the Court has to consider the evidence in its totality and also the averments made in the complaint. In the complaint, the respondent/complainant did not state that the accused handed over to him a blank signed cheque with instruction or authority to fill the same. In his cross examination the complainant stated that he filled the cheque on 15.03.2010. In paragraph 3 of the complaint, it is stated that the appellant no. 2 on behalf of the appellant no. 1 issued the cheque dated 15.03.2010. In paragraph 5, it is stated that "on its respective due date, the complainant presented the cheque for encashment with the bank on 05.04.2010". It is to be noted that the due date of the cheque was 15.03.2010 and not 05.04.2010. The complainant did not specifically state in paragraph 3 that the cheque was handed over to him on 15.03.2010. It is admitted by the complainant/respondent that he had filled the amount and date in the cheque. He did not disclose this fact in the complaint or in his examinationinchief.
14. The complainant/respondent had stated in the complaint that the C.A. No. 84/12 Page 10 of 15 pages 11 appellant had taken the loan on different occasions. The dates on which the loans were advanced as well as the separate amount of each loan was not disclosed. In his cross examination he stated that the loan had been given in the year 2007. Here also he did not mention any specific date. The dates were important for calculating the period of limitation. The ld Trial court held that the loan was given in 2007 and the cheque is dated 15.03.2010, therefore there was no merit in the argument regarding limitation. This finding could not have been given without specific date on which the loan was given. It is not the case of the complainant that there was a running account. The period of limitation for separate loans and for running account is to be computed differently under the Limitation Act. Further the nature of the loan and the date will affect the limitation. In absence of disclosure of the necessary facts by the complainant, the objection of the appellant regarding the debt being barred by limitation could not have been rejected. Doubt is created whether the whole or part of the alleged debt of Rs. 12 Lacs was within limitation and thus legally recoverable. The complainant has not produced any statement of account. He had stated in his complaint that the loan was given on different occasions and that the accused/appellant issued promissory notes and receipts. In cross examination he stated that the promissory note had been taken by the accused at the time of issuing the cheque. This fact was not disclosed in the complaint. In his cross examination, he stated that he was having the original copy of the promissory note. It is not probable that the promissory note will be returned without any acknowledgment and without clearance of the C.A. No. 84/12 Page 11 of 15 pages 12 debt. If the loan was given on different occasions, more than one promissory note should have been there. CW1/complainant has also stated that he had given the papers to his ld advocate but he did not know why the date, year and amount was not mentioned in the complaint. If certain material information is withheld, adverse inference as to be drawn against the party concerned. In his cross examination he stated that he advanced the loan to the accused for short term i.e six months. He has further stated that he did not remember the length of the period during which the total loan of Rs. 12 Lacs was advanced. These statements made by the complainant/CW1 in his cross examination create doubt regarding the total amount of the loan and its being legally recoverable either in whole or in part. After seeing the evidence of the complainant, it can not be said beyond reasonable doubt that the amount of Rs. 12 Lacs which is mentioned in the cheque was a legally recoverable debt. It has been seen that the accused has to create doubt and the standard for him is preponderance of probabilities. Under these facts and circumstances it is not probable that the accused/appellant handed over a signed blank cheque to the respondent in discharge of a debt of Rs. 12 Lacs.
15. The appellants have not been able to prove Ex.DW1/B but taking help of the evidence of the complainant, they have been able to create doubt. Once doubt is created whether the cheque has been issued and whether it was issued in discharge of legally recoverable debt, the burden is on the complainant/holder of the cheque to prove these facts beyond reasonable doubt.
C.A. No. 84/12 Page 12 of 15 pages 13
16. Discussion of the Judgments relied upon by ld counsel for the appellants is not necessary in view of the finding of this Court. However the Judgments relied upon by ld counsel for the respondent need to be discussed to see whether the finding of this court is against any of those judgments. Each case is to be decided on the basis of its own facts and the Judgments are applicable only on legal points. The first judgment relied upon by ld counsel for the respondent is the judgment by the Hon'ble Supreme Court of India in K.N.Beena Vs. Muniyappal 2001 (4) RCR (Crl.) 545. The facts of this case are different. The judgment in this case is to be read alongwith the law laid down by the Hon'ble Supreme Court in the other matters. In 2008 (3) RCR (Crl.) 205 which is relied upon by ld counsel for the respondent himself, it has been explained how the accused/drawer can rebut the initial presumption. The second judgment is by the Hon'ble Supreme Court in the matter of Y. Sreelatha @ Roja Vs. Mukanchand Bothra 2002 (2) RCR (Crl.) 254. In this judgment, ld counesl has drawn my attention to paragraph 42. It is observed by the Hon'ble Supreme Court that once the execution is not denied, it shall be presumed u/s 139 of the Negotiable Instruments Act that the cheques were issued by the accused for discharge of the liability, unless it is established through acceptable evidence by the defence to show that the cheques were misused, even though the amounts covered under the cheques were repaid. In the present case the issuance of the cheque is not admitted and it has been found that the claim of the complainant that the cheque was issued by the accused is doubtful. Therefore this judgment does not help the C.A. No. 84/12 Page 13 of 15 pages 14 respondent/complainant. The next judgment is by the Hon'ble Madras High Court in the matter of S. Gopal Vs. D. Balachandran 2008 (2) RCR (Crl.) 466. In this judgment my attention has been drawn to paragraph 9 and 10 in support of the argument that when a duly signed blank cheque is given by the drawer with authority to the payee or holder in due course to fill up the cheque, such instrument is valid in eye of law. There is no dispute on this legal principle. Section 20 of NI Act 1881 provides for this, however it is the duty of the complainant/payee to plead such facts and to prove them when the issuance is denied by the drawer. In the present case the complainant did not plead these facts. His statement in cross examination that he filled the cheque in presence of the accused and that to on the suggestion of ld counsel for the accused, is not sufficient to cover his case by section 20 NI Act. The other judgment relied upon by ld counsel for the respondent is by the Hon'ble Supreme Court in the matter of Mallavarapu Kasivisweswara Rao Vs. Thadikonda Ramulu Firm and others 2008 (3) RCR (Crl.) 205. This judgment has already been discussed and it does not help the complainant. The last judgment is AIR 2008 (NOC) 1008 (MAD). This judgment deals with presumption of service of notice. On this point adverse finding has already been given against the appellant. Therefore there is no need to consider this judgment in detail.
17. It has been held that adverse presumption may be drawn against the appellant for not replying to the legal notice u/s 138 NI Act. However this presumption would have helped the complainant/respondent if the appellant was not able to create doubt regarding existence of C.A. No. 84/12 Page 14 of 15 pages 15 legally recoverable debt in respect of the cheque in question.
18. In view of the above discussion it is held that the impugned Judgment and the consequent Order on sentence can not be sustained and are liable to be setaside. The appeal is allowed. The appellants are acquitted. The appellant no. 2 is directed to furnish a bond in the amount of Rs. 10,000/ with one surety of like amount u/s 437A Cr.P.C. The bond is furnished and same is accepted.
19. Copy of this judgment and the bond furnished by appellant no. 2 u/s 437A Cr.P.C be sent to the Ld Trial Court alongwith trial court record.
20. Appeal file be consigned to record room.
ANNOUNCED IN THE OPEN COURT ON 06.02.2013 (RAJESH KUMAR SINGH) ASJ/SPECIAL JUDGE NDPS (NORTH) DELHI C.A. No. 84/12 Page 15 of 15 pages