Delhi District Court
:: vs :: on 29 October, 2021
IN THE COURT OF MR. SAHIL KHURMI,
METROPOLITAN MAGISTRATE (N.I. ACT)- 02,
PATIALA HOUSE COURTS: NEW DELHI
DLND020040572019
Case No: 2535/2019
Tara Chand
S/o Late Sh. Kishan Lal,
R/o House No. 849, Gali No. 1,
Near Dayal Market, Alipur,
Delhi-110036
...... Complainant
::Versus::
1) Pardeep Kumar and Ors
S/o Shri Mann Singh
R/o House No. 595, Gautm Gali
Malka Ganj, Delhi-110007
Also At:
Shri Pardeep Kumar
DTP Operator Government of India Press
Ring Road, Mayapuri, New Delhi-110064
2) Smt. Geeta Rani
W/o Sh. Pardeeep Kumar
S/o Shri Maan Singh
R/o House No. 595, Gautam Gali
Malka Ganj, Delhi-110007 .......Accused
CC No: 2535/2019 1 of 16
Offence Complained of: 138 NI Act
Plea of the Accused: Not Guilty
Arguments Heard On: 28.10.2021
Decision: CONVICTION
Date of Judgment: 29.10.2021
JUDGMENT
1. Vide this judgment, I shall decide the present matter, CC No. 2535/2019, filed by complainant Tara Chand, against the dishonour of cheque bearing no. 876107 for a sum of Rs. 5,00,000/- drawn on Punjab National Bank, Subzi Mandi, Delhi (henceforth, the cheque in question).
2. Shorn to unnecessary details, the brief facts of the case put forth by the complainant are that the complainant and accused persons (husband and wife) know each other from 20 years and accused persons requested the complainant for a friendly loan of Rs. 5,00,000/-. The same was given to the accused.
3. The complainant further stated that in order to discharge his liability the accused had given a cheque bearing no. 876107 for a sum of Rs. 5,00,000/- signed by both the accused, drawn on their joint account, which was dishonored with the reason "insufficient funds".
4. Legal demand notice dated 07.01.2019 was sent to the accused which was received by him on 08.01.2019. The accused failed to repay the amount within 15 days. Hence the present complaint.
CC No: 2535/2019 2 of 16
5. The complainant examined himself as CW-1 in pre- summoning evidence, and relied upon his evidence by way of affidavit along with the following documents: -
S.No. Documents relied upon Exhibited as:
1. Orignal Cheque no. 876107 Ex. CW-1/1 for a sum of Rs. 5,00,000/-
2. Cheque return memo dated Ex. CW-1/2 10.12.2018
3. Legal demand notice dated Ex. CW-1/3 07.01.2019
4. Original Postal receipts Ex. CW-1/4 to Ex. CW-1/6
5. Tracking report Ex. CW-1/7 to Ex. CW-1/9
6. On appearance of accused, notice of accusation u/s 251 Cr.PC was served upon the accused on 06.08.2019, to which the accused pleaded not guilty and submitted that the complainant had given him a sum of Rs. 1 lac which he had to return with interest, the cheque bears his signature but the details have not been filled by him and the cheque in question is stolen.
7. Application u/s 145 (2) NI Act was moved on behalf of the accused, which was allowed on 23.11.2019. Thereafter, the complainant was examined and duly cross-examined on 30.01.2020. Thereafter, CE stood closed.
8. Statement of accused u/s 313 Cr.PC was recorded on 15.02.2020. Thereafter, matter was fixed for DE.
9. Application u/s 315 Cr.PC was moved by the accused persons, which was allowed by the court and DW-1, DW-2, DW-3 and DW-4 were examined and cross examined and discharged on 09.10.2021. Thereafter, the matter was fixed for final arguments.
CC No: 2535/2019 3 of 16 Final arguments were heard on 28.10.2021.
10. I have heard the counsels for both parties at length, considered the evidence led by them carefully and have perused the court records thoroughly.
11. To establish the offence under Section 138 of the NI Act against the accused, the complainant must prove the following: -
i. the accused issued a cheque on account maintained by him with a bank.
ii. the said cheque has been issued in discharge, in whole or in part, of any legal debt or other liability.
iii. the said cheque has been presented to the bank within a period of three months from the date of cheque or within the period of its validity.
iv. the aforesaid cheque, when presented for encashment, was returned unpaid/dishonored.
v. the payee of the cheque issued a legal notice of demand to the drawer within 30 days from the receipt of information by him from the bank regarding the return of the cheque.
vi. the drawer of the cheque failed to make the payment within 15 days of the receipt of aforesaid legal notice of demand.
In the present case the complainant has discharged his initial burden and has successfully established the basic ingredients of offence under section 138 of the NI Act against the accused.
12. The accused admitted his signatures on the cheque in question at every stage; from notice under section 251 Cr.P.C. to his statement under section 313 Cr.P.C. Thus, presumption under section 118(a) and under section 139 of NI Act arises against the accused. Unless the contrary is proved, it shall be presumed that the cheque in question was drawn for a consideration and that the complainant received the cheques in question in discharge of a CC No: 2535/2019 4 of 16 debt/ liability from the accused. In order to rebut the presumptions, the burden of proof shifts to the accused to prove on a preponderance of probabilities that there was no liability for the amount of cheque in question.
(Reliance placed on Triyambak S. Hegde vs Sripad decided by 3 judge bench of Hon'ble SC on 23.09.2021 and Basalingappa vs Mudibasappa (2019) 5 SCC 418)
13. Therefore, in the present matter, the onus of proof is now upon the accused to raise a probable defence and to rebut the presumption of the existence of a legally recoverable debt arisen in favour of the complainant. Now let us examine the defenses raised by both the accused and evaluate the same.
14. The accused persons have taken six defences namely: First, no legal demand notice was received by him. Second, the contents of cheque in question were not filled by accused persons. Third, that complainant is a professional money lender and doesn't possess valid license. Fourthly, that complainant has not shown his financial capacity and source of funds to give loan. Fifthly, the loan amount is not shown in ITR by complainant. Sixthly, there is no legally enforceable debt towards complainant as the cheque is stolen and misused by the complainant.
Now, I shall be discussing all the defences one by one.
Non-Receipt of legal demand notice:
15. The accused persons denied receiving the legal demand notice regarding the cheque in question in notice framed u/s 251 CrPC. However, in his cross examination accused Pradeep Kumar admitted that he received legal demand notice and his advocate had CC No: 2535/2019 5 of 16 given reply of the same. Thus, accused has not brought coherent set of facts before the court, making his version doubtful. Moreover, it is observed that the accused persons appeared before the court after the summons were issued on the same address as mentioned on the legal demand notice and the accused persons have filled the same address as their residential address in the bail-bonds furnished by them during the course of trial also.
16. Therefore, it emerges that the legal demand notice being properly addressed and posted by the complainant, as proved by the postal receipts, the same is presumed to have been delivered under section 114 of the Indian Evidence Act, 1872 and the accused has failed to rebut the said presumption. Moreover, it was held by the Hon'ble Supreme Court in the decision cited as C.C. Alavi Haji vs Palapetty Muhammed & Anr. (2007) 6 SCC 555 that 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 General Clauses Act and Section 114 of the Evidence Act. Thus, the plea of the accused that the legal demand notice was never received is not tenable and accordingly, rejected.
Contents/Particulars of cheque not filled by accused:
17. It is contended by the accused persons that the particulars on the cheque in question were not filled by them. It is a settled law that filling of particulars of cheque by any person other than the drawer does not invalidate the cheque and shall still attract the presumption under Section 139 of the NI Act. The same was held by the Hon'ble Supreme Court of India in the decision cited as Bir Singh vs Mukesh Kumar (2019) 4 SCC 197.
CC No: 2535/2019 6 of 16 The apex court observed as follows:
"37. A meaningful reading of the provisions of the Negotiable Instruments Act including in particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. 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. If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted.
38. If a signed blank cheque is voluntarily presented 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." (emphasis supplied)
18. It is apposite to mention the decision of Ravi Chopra vs State & Anr. (2008) 102 DRJ 147 wherein it has been held by Hon'ble Delhi High court that:
"18. Section 20 NI Act talks of "inchoate stamped instruments" and states that if a person signs and delivers a paper stamped in accordance with the law and "either wholly blank or have written thereon an incomplete negotiable instrument" such person 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." Section 49 permits the holder of a negotiable instrument endorsed in blank to fill up the said instrument "by writing upon the endorsement, a direction to pay any other person as endorsee and to complete the endorsement into a blank cheque, CC No: 2535/2019 7 of 16 it makes it clear that by doing that the holder does not thereby incurred the responsibility of an endorser." Likewise Section 86 states that where the holder acquiesces in a qualified acceptance, or one limited to part of the sum mentioned in the bill, or which substitutes a different place or time for payment, or which, where the drawees are not partners, is not signed by all the drawees, all previous parties whose consent has not been obtained to such acceptance would stand discharged as against the holder and those claiming under him, unless on notice given by the holder they assent to such acceptance. Section 125 NI Act permits the holder of an uncrossed cheque to cross it and that would not render the cheque invalid for the purposes of presentation for payment. These provisions indicate that under the scheme of the NI Act an incomplete cheque which is subsequently filled up as to the name, date and amount is not rendered void only because it was so done after the cheque was signed and delivered to the holder in due course.
20. A collective reading of the above provisions shows that even under the scheme of the NI Act it is possible for the drawer of a cheque to give a blank cheque signed by him to the payee and consent either impliedly or expressly to the said cheque being filled up at a subsequent point in time and presented for payment by the drawee." (emphasis supplied)
19. Therefore, in consonance with the holding of the Hon'ble Supreme Court and High Court of Delhi, in the considered opinion of this Court merely because the other details of the cheque in question were filled in by the complainant, the accused cannot take the defence that there was no liability that had accrued on part of the accused towards the complainant. Thus, the signatures of the accused on the cheques in question being admitted, the plea that the particulars of cheque were not filled by the accused is not CC No: 2535/2019 8 of 16 defensible.
Defence that complainant is a money lender:
20. In the cross examination of the complainant, a suggestion is given to the complainant that he is a professional money lender, which is denied by the complainant. It is the case of accused the complainant is a professional money lender who gives loan on in- terest and he doesn't possess any valid license for the same.
21. With respect to this defence, the accused has failed to prove by any means that the complainant is a "moneylender" as defined under Section 2(9) of Punjab Registration of Money Lender's Act (PRMLA). This defence of accused is untenable, as it is not the case of accused that the loan in question was given on interest.
22. Further, the accused has brought two defence witnesses to prove that the complainant is a professional money lender. DW-3 had deposed that she took a loan of Rs 70,000/- from complainant and she further deposed that it is the business of complainant to give loan on interest. DW-4 who is brother of DW-3 deposed that her sister DW-3 had taken loan of Rs 70,000 from the complainant. Thus, we can see that the accused has tried to prove that the com- plainant is a professional money lender.
23. Now, regarding the testimony of DW-3 and DW-4, it is seen that no proof has been furnished by them regarding the factum of taking loan and repayment of loan from the complaint. The same is not supported by any oral or documentary evidence. Thus, it is not worthy of credence.
24. The contention that the debt claimed by the complainant is not enforceable by virtue of the provisions of the Punjab Registra-
CC No: 2535/2019 9 of 16 tion of Money Lenders Act, 1938, is unmerited. The term 'Money- lender' is defined under Section 2(9) of the said Act as under :-
"2. Definitions -- In this Act, unless there is anything repugnant in the subject or context-- (9) "Money-lender" means a person, or a firm carrying on the business of advancing loans as defined in this Act, and shall include the legal representatives and the successors-in-interest whether by inheritance, assignment or other-
wise, of such person or firm; provided that nothing in this definition shall apply to.
(a) a person who is the legal representative or is by inheritance the successor-in-interest of the estate of a deceased money-lender together with all his rights and liabilities; provided that such person only--
(i) winds up the estate of such money-lender;
(ii) realises outstanding loans;
(iii) does not renew any existing loan, nor ad- vance any fresh loan;
(b) a bona fide assignment by a money-lender of a single loan to anyone other than the wife or husband of such assignor, as the case may be, or any person, who is descended from a common grandfather of the assignor."
25. In the present case, there is no material to conclude that the complainant was carrying on the business of advancing loans. Merely because the complainant had lent money to two-three per- sons, did not lead to the inference that the complainant had been carrying out the activity of money lending as a business. Moreover, it is not the case of accused persons that the loan in question was given on interest.
26. As mentioned above, the accused has failed to prove by any means that the complainant is a "moneylender" as defined under CC No: 2535/2019 10 of 16 Section 2(9) of PRMLA. Thus, this defence of accused is without merits, and accordingly rejected.
Source of funds of complainant:
27. The accused has put questions to complainant in his cross ex- amination regarding the source of funds of giving the loan in ques- tion. It is the defence of accused that the complainant has failed to show the source of funds of the alleged sum of money given to the accused.
28. The accused has relied on the judgment of Hon'ble Supreme Court in Basilingappa vs. Mudibasappa (2019) 5 SCC 418, wherein it was held that once the financial capacity of the com- plainant is questioned, it is incumbent on the complainant to have explained his financial capacity. Per contra, Ld. counsel for com- plainant submitted that the complaint has sufficiently proved the source of his funds and his financial capacity. Perusal of the cross examination of complainant shows that the complainant has submit- ted that to give a loan of Rs 5 lacs to accused persons, he has taken Rs 2.5 Lacs from the brother-in-law of one of his colleagues, Ma- hesh Kasana and the remaining Rs 2.5 lacs was arranged by him- self. During final arguments, Ld. counsel for accused submitted that neither the complainant had disclosed the amount of Rs 2.5 lacs ar- ranged by himself nor he has brought the brother-in-law of his col- league Mahesh Kasana in witness box to testify the same fact. It is apposite to mention that the complainant in his cross examination stated that he is retired as a teacher in Delhi Cantonment Board and his last drawn salary was Rs. 97,000/- per month. Thus, Rs 2.5 lacs is not that a huge amount which would be difficult to arrange for a retired person drawing a salary of nearly one lakh. Merely because the complainant didn't bring the above said person as a witness, CC No: 2535/2019 11 of 16 would not be fatal to the case of complainant and overthrow his case, keeping in mind the fact that Rs 2.5 lac was not that a huge amount which could not be procured by a retired teacher in Delhi Cant. Board drawing last salary of nearly one lakh. Thus, in the considered opinion of this court, the complainant has been able to show the source of sum of money that has been given to the ac- cused by the complainant. Thus, this defence of accused fails.
Loan amount not shown in ITR
29. It is the next defence of accused persons that the loan amount of present cheque in question is not shown in ITR. It is submitted by Ld. counsel for accused that the complainant admitted in his cross-examination that he had not shown the loan of Rs 5 lacs in his ITR.
30. It is apposite to mention the judgement of Hon'ble Hight Court of Delhi in Guddo Devi vs Bhupender Kumar (CR- L.REV.P. 1246/2019 decided on 11.02.2020) in which it was held that:
The contention that the debt owed by the peti- tioner was rendered unenforceable by virtue of the provisions of the Income Tax Act, 1961 is also unmerited.
Section 269SS of the Income Tax Act, 1961 prohibits making of any payment in cash above a sum of ₹20,000/-. Thus, any person violating the same would attract imposition of penalties under the said Act. However, the same does not render the said debt un-enforce- able or precludes the lender from recovering the same.
31. It is the defence of the accused that the complainant has not filed his ITR and that the alleged loan given to the accused was un- accounted money and that there is no legally recoverable debt.
CC No: 2535/2019 12 of 16
32. In order to deal with this defence, reliance is placed upon Rohitbhai Jeewanlal Patel vs State of Gujrat 2019 SCC Online SC 389 vide which Hon'ble Supreme Court has clearly upheld that the transactions in question in a case u/s 138 NI Act, if not reflected in the accounts and income-tax returns, it would at best hold the as- sesse or lender liable for action under the Income tax laws, how- ever, if the lent amount can be proved otherwise, the existence of a legally enforceable debt cannot be denied. In a technical offence like the present one, filing of ITR is not the only way of proving the loan advanced by the complainant. However, non-filing of the same may lead to adverse inference being drawn on part of the com- plainant but this adverse inference cannot in itself interfere with the legally rebuttable presumption which has arisen in favour of the complainant. The fact that the ITR of the complainant does not re- flect the loan amount of Rs. 5 lacs do not per se disprove the factum of loan. Thus, this defence of accused fails.
Defence of no legally enforceable liability of the accused persons :
33. It is the consistent defence of the accused persons throughout the trial that although the signatures of both the accused persons are there on the cheque but the same is not issued by them to the com- plainant. It is the case of the accused persons that the cheque in question was stolen and the same has been misused by the com- plainant. It is contended by them that the cheque book was kept un- der the bed of accused persons, in which few cheques were kept blank signed by both the accused persons.
34. It is apposite to mention that the accused persons had stated in their cross examination that neither they had informed their bank nor made any police complaint qua same. In the considered opinion CC No: 2535/2019 13 of 16 of this court, a reasonably prudent person whose cheque book is stolen with signed cheques kept in it, would inform the bank and also make a police complaint about it. No such steps have been taken by the accused persons in the present case. Thus, this defence of the accused is unworthy of credence and accordingly, rejected.
35.. Regarding the defence that there is no legally enforceable debt, accused no. 1 Pardeep Kumar stated in his cross-examination that the complainant had given him loan of Rs 3 lacs out of which he had returned Rs 2 Lacs. However, in notice framed u/s 251 CrPC and statement u/s 313 CrPC, he stated that he had taken loan of Rs 1 lac from the complainant. Moreover, accused no. 2 Geeta Rani stated in her notice framed u/s 251 CrPC that she he had taken loan of Rs 1 lac from the complainant. But in her cross examination she stated she had not taken any loan from the complainant. Thus, it is crystal clear that the both the accused persons have not brought co- herent set of facts before the court, making their version doubtful and not worthy of credence.
36. Moreover, the accused has not furnished any proof in order to justify his defence. It has also been held in V.S. Yadav Vs Reena 2010 SCC Online Del 3294 that mere suggestions on behalf of the accused do not prove any fact and the accused will have to indepen- dently prove the facts alleged in his suggestions. Therefore, this de- fence raised by the accused does not hold water.
37. It is contended by the accused that the cheque in question was given for security purpose only and not for any legally enforceable debt. However, it is apposite to mention that the same has not been proved by the accused during the trial. It is a well- settled law that mere suggestion of a fact does not amount to proof of the same. The accused has not produced any evidence, CC No: 2535/2019 14 of 16 documentary or oral, which would lend credibility to this fact. It is apposite to refer to the decision of the Hon'ble High Court of Delhi cited as Sanjay Arora v. Monika Singh; 2017 SCC Online Del 8897 wherein it was held in paragraph 24 of the said decision that "Mere admission of the complainant that he was earning only Rs. 12,000 per month from small business or his failure to file income tax returns, or his omission to produce the bank passbook or to examine Chhotu as a witness in corroboration, are inconsequential. In order to rebut the statutory presumption, it was the burden of the respondent to prove the facts she had pleaded in answer to the notice under Section 251 Cr.P.C. No material in support of such plea having come on record, the statutory presumption under Section 139 Negotiable Instruments Act in the case at hand has not been rebutted."
38. It is already established above that the accused has failed to prove the defence taken by him that the cheque in question was issued as security and not for legally enforceable debt. Consequently, it is held that the reasons cited by the accused to contest the existence of loan/ liability involving non-disclosure of loan in complainant's ITR, no written agreement/promissory note of loan in question, non-examination of any witness to loan transaction, are all inconsequential and do not come to the rescue of the accused in light of the mandatory presumptions.
39. On a consideration of the totality of factors pleaded by the accused persons in defence, it becomes clear that the accused persons has merely paid lip service to their defence and did not led CC No: 2535/2019 15 of 16 any cogent evidence to establish it or draw any circumstance against the case of the Complainant which probabilizes their defence. Mere bald denial of the absence of consideration or pleading that the cheques in question were issued as security would not operate to absolve the Accused persons of their liability.
45. Therefore, in light of the above reasoning, it is the considered opinion of this court that the accused persons have miserably failed to rebut the presumption u/s 118 and 139 of NI Act which has arisen in favour of the complainant and has failed to show that their defence is probable. Therefore, Accused Pradeep Kumar and Geeta Rani are convicted for commission of offence punishable under Section 138 of the Negotiable Instrument Act, 1881.
Let the convicts be heard on the quantum of sentence on 09.11.2021 at 2:30 pm. Announced in open court on 29.10.2021 (Sahil Khurmi) Metropolitan Magistrate (NI Act)-02 PHC/ND/29.10.2021 Note: This judgment contains 16 pages and each page has been signed by me.
(Sahil Khurmi)
Metropolitan Magistrate (NI Act)-02
PHC/ND/29.10.2021
CC No: 2535/2019 16 of 16