Delhi District Court
Vinod Sharma vs . Vipul Sharma Cc No. 5454/11 1 Of 17 on 22 September, 2014
IN THE COURT OF BHARAT CHUGH,
METROPOLITAN MAGISTRATE (NI ACT)-1, CENTRAL:
ROOM NO.275, TIS HAZARI COURT COMPLEX, DELHI
Vinod Sharma CC No. 5454/11
VERSUS
Vipul Sharma
22.09.2014
JUDGMENT
(Brief Reasons for Decision as required u/s 264 of the Cr.P.C)
1. Bereft of unnecessary details, the case of the complainant is that he is the proprietor of M/s Laxmi Builders and had friendly relations with the accused for the last many years. The complainant claims that the accused had obtained friendly/business loans from the complainant during the period of December 2007 to June, 2008, for the purpose of revival of his sagging business fortunes and the complainant in good faith extended the said loan. The complainant submits that in part discharge of his liability towards the said loan, the accused issued cheque bearing No. 282008 dated 20.03.2009 for Rs. 5,35,000/- (Rupees Five lac thirty five thousand only) to the complainant, which on presentation got dishonored on account of 'insufficient funds'. When the legal demand notice sent by him to the accused remained unheeded, the accused was constrained to file the present complaint.
2. The accused in his defence, has claimed that he does not have any liability towards the present complainant, and does not even know him. As regards the cheque, he does not dispute his signatures on the same, however he claims to have given the said cheque to one Mr.Uday Kumar Sethi, AGM, Vijaya Bank in blank signed form. As regards the service of legal notice, the accused denies having received the legal notice, although he admitted his Vinod Sharma Vs. Vipul Sharma CC No. 5454/11 1 of 17 address appearing on the legal notice as correct.
This, in sum and substance, is the factual exposé.
3. The factual position being thus, Now let us quickly recapitulate the legal sine qua non, which is to be satisfied in order to constitute an offence under S. 138 N.I. Act :-
(i) 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 30 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;
(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.
Being cumulative, it goes without saying that it is only when all the aforementioned ingredients are satisfied that the person who had drawn the cheque can be deemed to have committed an offence under Section 138 of the Act.
The legal standard being thus. Let us apply it onto the cauldron of facts, and try and see what emerges.
Vinod Sharma Vs. Vipul Sharma CC No. 5454/11 2 of 17
4. Let us first examine the clichéd defence of non service of legal notice. The accused while denying the service of legal notice, notably has not denied his address as appearing on the legal demand notice and postal articles. The address on the legal notice once having been admitted by the accused to be his correct address and the legal notice having been dispatched by Registered Post on that very address, it gives rise to a presumption of due service and it was incumbent on the accused to lead evidence to prove that the same was not actually served on him. This is clear from a combined reading of Section 27 of the General Clauses Act and Section 114 of the Indian Evidence Act. The accused in order to rebut the presumption could have led evidence of the postal authorities or by proving that at the relevant time he was not available at the said address. Not even an iota of evidence has been brought on record to displace the presumption of due service. It is notable that the address furnished by the accused on his bail bonds, in this case as late as 2010, is exactly the address on which the legal demand notice was dispatched. In these circumstances the legal notice can be presumed to be have been delivered to him and the defence of non receipt of legal notice doesn't cut much ice.
In any event, in view of the authoritative pronouncement of the Hon'ble Supreme Court in C.C. Alavi Haji v. PalapettyMuhammed and Another (2007) 6 SCC 555, the rigor of the requirement of service of legal notice has been reduced to an almost vanishing point in cheque bounce jurisprudence. The Hon'ble Supreme Court while distilling the true intent behind the requirement of service of legal demand notice as a precursor to launching of prosecution, has categorically held that the service of summons of the court is opportunity enough for the accused to pay the cheque amount and evade prosecution. Any accused who fails to pay the amount within 15 days of the service of summons, clearly cannot shield himself behind the technical defence of non service. The relevant extract from the decision is quoted verbatim as follows :-
Vinod Sharma Vs. Vipul Sharma CC No. 5454/11 3 of 17 "17. 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 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."
5. Therefore the legal notice hurdle having been overcome. Let us turn to the issue that goes to the heart of the matter i.e whether the cheque in question can be said to have been issued in discharge of a legal liability and to the complainant?
As we've seen above - the accused has admitted having drawn the cheque on a bank account maintained in his name/proprietorship firm. Now once these foundational facts are admitted. By virtue of Section 118(a) & (g) and Section 139 of the NI Act - a presumption of the cheque having been issued in discharge of a legally sustainable liability and drawn for good consideration arises, alongwith a presumption that the holder of the instrument is a holder in due course.
Section 118 of the N.I Act provides :-
"Presumptions as to negotiable instruments:
Until the contrary is proved, the following presumptions shall be made:
Vinod Sharma Vs. Vipul Sharma CC No. 5454/11 4 of 17
(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;"
(g) that the holder is a holder in due course - that the holder of a negotiable instrument is a holder in due course.
Section 139 of the N.I Act further provides as follows:
"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"
Hence it is clear that, as per the scheme of the N.I Act, on proof of foundational facts - a presumption arises as to the cheque having been issued in discharge of a legal liability and for good consideration towards the holder thereof. The burden of proof lies upon the accused to rebut the said presumption. This clearly is an instance of the principle of 'reverse onus' in action, where it is incumbent on the accused to lead what can be called 'negative evidence'. Evidence of a character not to prove a fact affirmatively, but to lead evidence to show non existence of liability. Keeping in view, that this is a departure from the cardinal rule of 'presumption of innocence' in favour of the accused, and also keeping in mind that negative evidence is not easy to be led by it's very nature. It is now fairly settled that the accused can displace this presumption on a scale of preponderance of probabilities and the lack of consideration or a legally enforceable debt need not be proved to the hilt or beyond all reasonable doubts. The accused also ought to bear the burden of proving that the holder of the cheque was not entitled to the same and is not a holder in due course. The accused can either prove that the liability did not exist or make the non existence of liability so probable that a reasonable person ought under the circumstances of the case - act on the Vinod Sharma Vs. Vipul Sharma CC No. 5454/11 5 of 17 supposition that it does not exist. Simply put, the accused has to make out a fairly plausible hypothesis. This the accused can do either by leading own evidence in his defence or punching holes within the case of the complainant in the testing ordeal of cross examination. If the accused succeeds in making the lack of consideration fairly plausible, it falls on the complainant to prove the existence of consideration, which if not proved sufficiently - shall lead to an acquittal.
In my opinion in the present case the accused has not succeeded in rebutting the presumption of liability even on a scale of preponderance of probability. It is well settled now, that the defence of the accused has to be a plausible defence and not a mere bald assertion. A plausible defence is one that inspires confidence and appeals to the judicial mind. The clichéd defence of 'cheque being given in blank' cannot be accepted at the mere ipse dixit of the accused, lest the law relating to Section 138 N.I Act and its object be rendered sterile. The presumption as seen above, ought to be rebutted either by discrediting the complainant's case during cross examination or by leading own evidence. In this case the complainant was never cross examined, hence the case in its broad particulars has remained unrebutted and unchallenged.
Be that as it may, the accused could have still led his own evidence to rebut the presumption of consideration. However he has failed to do so. The mainstay of the defence of the accused, as can be culled out from his plea of defence recorded on 15.03.2013, is that he has claimed that the cheque in question was given signed in blank to one Mr.Uday Kumar Sethi, AGM, Vijaya Bank. He has also claimed that he does not know the complainant Vinod Sharma and has never taken any loan from him.
This is borne out of his plea of defence. However, while deposing as DW2 - the accused has made a fatal admission, by stating:-
Vinod Sharma Vs. Vipul Sharma CC No. 5454/11 6 of 17 "I do not have any business transaction or personal relation with Vinod Sharma. In fact Vinod Sharma, had stood guarantor for the loan against purchase of my vehicle and the same loan was returned to the Vijaya Bank, Delhi Cantt.
...
...
I do not know any Vinod Sharma Personally."
It is manifest that by accepting that the complainant had stood guarantor for a loan taken by him and at the same time denying any relations with him, the accused has blown hot and cold under the same breathe and has thus lost all credibility. Now it does not stand to reason as to why the complainant shall stand as his guarantor for something as onerous as a loan, until and unless they were on good terms. It is clear that the accused and the complainant were on good terms and have dealt with each other in the past. Furthermore the accused has remained mute as to why the cheque was given to Mr.Uday Kumar Sethi. When he has taken the defence that the complainant is not the holder of the cheque in due course, he ought to have established as to who actually was. He has led no evidence on the point as to why the cheque came to be given to Mr.Uday Kumar Sethi. He has conspicuously remained silent on that point. The accused ought to have examined the said Mr.Uday Kumar Sethi as a witness to prove the same, which has not been done.
There was clearly something more than meets the eye in the case. Even after a threadbare examination of the file, it remained hazy as to why and to whom the cheque came to be given. Since the accused had taken contradictory stands as regards his relations with the complainant and the complainant had not been cross examined in the case, there was a dearth of material particulars relating to the case. Furthermore the evidence led in defence by the accused was quite scanty, hence the court at the time of final Vinod Sharma Vs. Vipul Sharma CC No. 5454/11 7 of 17 arguments deemed fit to further probe into the matter in order to unearth the real genesis of the case. And the mystery unraveled, when at the stage of final arguments, Learned Counsel for the complainant drew the court's attention to the fact that the complainant had filed a summary civil suit for recovery, on the basis of another cheque given by the accused and the same had been decreed in his favour by the Ld.ADJ. Certified copy of the judgment of Sh. Bhupesh Kumar, ADJ-06, West District, Delhi in Suit No. 162/09 titled (MVD Infotech Pvt. Ltd. Through its director Vinod Sharma v. Vipul Sharma)[MVD Infotech is the company of the present complainant] as well as the leave to defend application filed by the accused in that case has been placed on record. This being a certified copy of judicial record, carries the presumption of correctness and therefore can be read in evidence at any stage. Needless to state that the same has not been disputed by the accused even after specific opportunity in that regard. The affidavit filed by the present accused in that case in support of his leave to defend is now marked 'Ex.CX2'. The contents of the same make for an interesting read. In his affidavit, in stark contradiction to his stand in the present case, the accused has admitted knowing the complainant since the last two, two and a half years. This leave to defend application it is pertinent to note was filed in 2009. Some of the excerpts, which expose the falsity of the plea of the accused deserve to be quoted verbatim :-
"1... The true facts are that I knew Vinod Sharma since the last two and a half years through Mr.Jagdish, who was working as a clerk in Vijaya Bank, Gopi Nath Bazar, Delhi Cant, Delhi and as I and Vinod Sharma were having bank accounts in the same branch. There was no other dealing or concern or connection or relation between me and Mr.Vinod Sharma. I never had any business dealings with the plaintiff company and I was not even aware of the name of the plaintiff company. I was sanctioned an OD limit in account No. 600606011000011 in the name of and style of M/s Jeewan Fashion which is my Vinod Sharma Vs. Vipul Sharma CC No. 5454/11 8 of 17 proprietorship concern, by Vijaya Bank, Delhi Cantt. Branch. Since the OD Limit has crossed the sanctioned limit, Mr.Udai Kuma, AGM had called me and requested me to deposit atleast Rs.20,00,000/- so as to save the account from getting converted to NPA (Non performing Account). I say that in view of the global recission in the market and more particularly the export market was also running severe financial crunch and not in a position to deposit the said amount which fact was also known to Mr.Udai Kumar. That Mr.Udai Kumar to save himself asked me that he would arrange money from any source and influence for me as otherwise it would have a detrimental bearing on his employment with Vijaya Bank and that he would suffer irreparable loss and injury and as such managed the deposit from Mr.Vinod Sharma in my account and took three cheques of the same amount from me on the assurance that the same will not be presented till there was sufficient amount in my account. The cheques were not given by me to Mr.Vinod Sharma but the same were given to Mr.Udai Kumar AGM....."
Now this confession from the horse's mouth itself clinches the issue to my understanding. The accused in his plea in defence recorded on 15.03.2013, claimed complete ignorance and said point blank that he did not know the complainant. While deposing as DW2, he conceded that the complainant had stood as guarantor for a vehicle loan that he had procured. In his affidavit as above, the accused has frankly conceded that complainant had actually helped him financially, to prevent his account from becoming an NPA (Non-Performing Asset) through Mr.Udai Kumar.Hence a legal liability subsisted on that day on the accused towards the present complainant. The only defence that remains, hence, is that the cheques were given to Mr.Udai Kumar and not to the present complainant. This contention, I am afraid must also fail, as the same is outrightly negated by the circumstances. A Bare perusal of the cheque Ex. CW1/1 reveals that the the entire cheque (including the signatures, name of the payee and amount in Vinod Sharma Vs. Vipul Sharma CC No. 5454/11 9 of 17 words and figures) appears to have been filled in the same hand and pen. The accused in his plea recorded on 15.03.2013, admitted having signed on the cutting [sic - recte - correction] on the cheque to be his. This correction has clearly been carried out subsequent to the filling in of the rest of the cheque and when the accused has admitted having signed the same - it in any event acts as ratification and affirmation as to the contents on the rest of the cheque. Therefore, it does not stand to reason, as to when the cheques had been duly filled in - in favour of the complainant, why the same would be given to Mr.Udai Kumar and not to the complainant to whom they were meant, especially when liability towards him has been accepted as above.
Furthermore, as we have already seen, the defence of accused as to having no previous relations with the complainant is false and unbelievable. Hence there is no doubt that the cheque in question was given to the complainant, who held the same as a holder in due course having got them in part discharge of debt.
Learned Counsel for the Accused, while faced with this, has tried arguing that the record of another case cannot be read in this case at this stage. In my opinion, this argument is misconceived. It is true that previous affidavit of the accused being discussed was filed in another case and is external in that sense, however the same is clearly not extraneous. The same can be construed as an admission and is provable by a certified copy. In any event Ld.Counsel for the accused has not disputed the affidavit of the accused, but has argued that the same has to be eschewed from consideration on the grounds of rules of procedure. In my opinion there is no impediment in reading the same once a certified copy has been filed. It goes without saying that a trial is a voyage of discovery, with truth being the ultimate quest. Whatever aids a more comprehensive and informed decision of the case, deserves to be looked into.
Vinod Sharma Vs. Vipul Sharma CC No. 5454/11 10 of 17 It is pertinent to note that this was exactly the reasoning, by which the Ld.ADJ dismissed the leave to defend application filed by the accused and went on to decree the suit. The relevant observations as can be culled out from the judgment (Ex. CX1) are :-
" 8. Heard. Material Perused. It has not been denied by the defendant that the cheque in question.......was issued by the defendant and the same bears the signatures of the defendant [the present accused]. The name of the party in whose favour the cheque was issued is in handwriting of the defendant has also not been denied.
9. Now the question arises whether the plea of defendant that cheques were used by the defendant and were handed over to Sh. Vinod Sharma [sic] [recte Mr,Udai Kumar]can be accepted. On this score it is found that at the threshold the plea of the defendant in this regard apparently seems to be bald and sham and not tenable as the fact that the cheque was filed and signed by the defendant not denied. Morever if we take the case form another angle that the plaintiff has discharged the liability of defendant by making the payment of the excess OD limit enjoyed by the defendant, even then it makes the defendant liable to make the payment of the said amount. Under these circumstances, in case the defendant is granted leave to defend whether conditional or unconditional it would defeat the purpose of Section 37 Cr.P.C [sic] [recte Order 37 CPC]. In these circumstances it is found that the defendant has failed to raise any triable issues in his favour and the present application seeking leave to defend stands dismissed. Accordingly, the suit of the plaintiff which is otherwise, within the period of limitation stands decreed for a sum of Rs.
15,00,000/-..."
I am in complete agreement with these observations. It is clear that as per accused's own admission in Ex. CX2, it is manifest that to save his account from being turned into a NPA (non-performing asset) he was in urgent need of a sum of Rs.20,00,000/-, which the complainant seems to have advanced. The civil suit for recovery, as aforesaid, was qua a cheque given to the complainant by the accused for a sum of Rs. 15,00,000/- and the Vinod Sharma Vs. Vipul Sharma CC No. 5454/11 11 of 17 present cheque is for a sum of Rs. 5,35,000/-. Hence it is clear that the accused, in all probability, gave these two cheques in order to discharge his liability for the financial help extended by the complainant to continue to enjoy the OD limit as taken by him from the bank, and for that end the complainant had extended financial help.
To counter this, Learned Counsel for the Accused has relied on copy of a statement given by the present complainant as prosecution witness in a CBI case against the present accused.
As a brief backgrounder, in this case the accused and three others (including one bank official) have been convicted for offences u/ss 420 r/w 120-B IPC& also provisions under the Prevention of Corruption Act, for having cheated Vijaya Bank, Delhi Cantt. Branch to the tune of Rs.263.67 lacs by fraudulently availing undeserved financial assistance from the bank in active conspiracy with the bank officials.
Learned Counsel for the accused has contended that the present complainant appearing as PW9 in that case had admitted not knowing the accused. He has relied upon a copy of his deposition, which has not been disputed by the complainant and is therefore now marked as 'CX3' for the purposes of reference. The relevant extracts relied upon by the Ld.Counsel for the accused are as follows :-
"I have seen the document letter of guarantee dated 10.12.07 given to Vijaya Bank in favour of M/S Jeevan Fashions [Accused's firm] standing guarantee for a sum of Rs. 5,90,000/- and say that it bears my signatures on all pages.......Accused Vipul had taken a car loan and I stood guarantor for the accused Vipul on asking of Mr.Jagdish Prasad...."
I fail to understand as to how this advances the case of the accused since it probablises that since the complainant and the accused has had relations earlier, Vinod Sharma Vs. Vipul Sharma CC No. 5454/11 12 of 17 the present financial help was quite possible between the two, for which the accused has to answer his liability.
The other excerpts from his testimony that must be referred to, and which reflect the real relation between the complainant and the accused are :-
"-6-. During the days of closing in December, 2009, the branch head of Vijaya Bank, Delhi Cantt. Barnch namely Mr.Udai Kumar Shetty called me and asked me that the account of accused Vipul Sharma going to become NPA i.e Non Performing Asset. Mr.Shetty even told accused Vipul Sharma to take money from me and get it transferred in the account of Vipul Sharma. .....
I took two cheques from accused Vipul Sharma, of his concern. One said cheque was of Rs. 15 lacs and other cheque was of Rs. 5 lacs and both these cheques were in favour of MVD Infotech Pvt. Ltd.. On presentation both these aforesaid cheques of Rs. 15 lacs and 5 lacs respectively were dishonored due to insufficiency of funds. I filed the court cases for said cheques against the accused Vipul Sharma. Till date I have not received that money".
Learned Counsel for the accused has relied on the following from his cross examination :-
" I have no relations like family or friendly relations with accused Vipul Sharma and Ms.Rajini Sharma. It is correct to suggest that whatever cheques I had issued in favour of concerns Jeevan Fashions and RS Enterprises. I had so issued only on the asking of the Branch Head of Vijay Bank, Delhi. Vol. Whenever the cheques were so given as aforesaid, it was in the knowledge of accused Vipul Sharma and on these occasions bank officials initially asked the accused Vipul Sharma to correct their accounts within their limits and when they were not having money then all this modus operandi was adopted and these accused used to issue their cheques, as foresaid and even sometimes accused got transferred money directly from their accounts to our accounts.
Vinod Sharma Vs. Vipul Sharma CC No. 5454/11 13 of 17 I am not engaged in money lending business. I had no interest in giving money to the accused persons but I had so given money by cheques in their favour only on the asking and assurance of the branch head of the bank.
I again fail to understand how this advances the case of the accused. The complainant has withstood the test of cross examination even in that case and it is clear that the accused has been the beneficiary of financial help extended by the complainant, in discharge of which he had issued the cheques in question. Learned Counsel for the accused has selectively relied on statements made by the witness, shorn out of context to the effect that there were no personal relations with the accused. This to my understanding is not the correct way of looking at it, the complainant has adequately proved extending the financial help at the instance of the bank official. He may have made the statement relating to not knowing accused personally, in light of the fact that the accused was facing a serious criminal charge in that case and he may have wanted not to be embroiled in that case with the accused and made that statement. It is trite law that a deposition has to be read in totality. Even if this, particular part of his testimony is, for an instant, assumed to be false, then also it fails to detract from the overall effect of his testimony. It is trite law that the principle of false in one, false in everything 'falsus in uno, falsus in omnibus' does not apply in India. His deposition, holistically read, it is clear that he has remained steadfast on having given financial help to the accused, which in any case has not been denied by the accused, as can be culled out from his admissions made in CX/2, albeit at the behest of the bank officials.
Learned Counsel for the accused as a last ditch effort, has tried to argue that the complainant ought to have proved his financial prowess in advancing such an amount to the accused at the relevant time. I am afraid this contention also must fail. The case of the complainant has gone unrebutted as the complainant has not been cross examined at all in this case. Armed with the presumption of consideration in his favour, the complainant was under no positive obligation to prove affirmatively his financial capacity. The accused ought to have either cross examined the Vinod Sharma Vs. Vipul Sharma CC No. 5454/11 14 of 17 complainant on this aspect or led evidence in his defence to disprove his financial prowess, which he has failed to do. The accused had infact called the bank witness DW1 to summon account statements of the complainant, marked DW1/1, a bare perusal of which shows that the complainant's firm during the period of 31.12.2006 to 30.06.2008 had more than sufficient funds in his account to advance the loan in question. Learned Counsel for the accused has tried to argue that the specific transaction to the accused has not been reflected in the bank transactions of the complainant firm. This to my mind is contention thoroughly flawed in light of the frank admission of the accused in CX-2 to the effect :-
"...That Mr.Udai Kumar to save himself asked me that he would arrange money from any source and influence for me as otherwise it would have a detrimental bearing on his employement with Vijaya Bank and that he would suffer irreparable loss and injury and as such managed the deposit from Mr.Vinod Sharma in my account and took three cheques of the same amount from me on the assurance that the same will not be presented till there was sufficient amount in my account. The cheques were not given by me to Mr.Vinod Sharma but the same were given to Mr.Udai Kumar AGM....."
It is trite law that an admission acts as waiver of proof. It is clear that the accused has not disputed having enjoyed the financial help from the complainant via Mr.Udai Kumar, AGM. Hence the contention as to lack of financial means, is completely devoid of merit. The complainant furthermore in his deposition as PW9 in the CBI case, now marked CX-3, has explained in sufficient details the mode and manner of extension of financial help. This also meets the contention of the accused that since the mode, manner of extension of loan has not been specified in the complaint, the case deserves to be dismissed. The reliance on the decision of the Hon'ble High Court of Delhi in Vipul Kumar Gupta v. Vipin Gupta (Crl. L.P. No. 481/2011) is misplaced as the present case is distinguishable on facts. In the said case the Hon'ble High Court took non mentioning of the loan in Income Tax Returns, books of account etc to be fatal to the case of the complainant. Notably in Vinod Sharma Vs. Vipul Sharma CC No. 5454/11 15 of 17 that case the loan transaction was disputed, hence the onus was shifted onto the complainant to prove the same. In the present case the financial help as we have seen has not been disputed at all.
Learned Counsel for the Accused has also relied upon Section 269 SS of the Income Tax Act -to argue that as per the said provision, any person advancing a loan of more than Rs. 20,000/- by way of cash is required to disclose it in his income tax returns.
In my view this contention too shall fail for three reasons :-
Firstly, the complainant has in his deposition already spelt out the mode and manner of extension of financial help at the instance of the Mr.Udai Kumar;
Secondly - the accused ought to have cross examined the complainant on this count, or in any case ought to have brought his income tax returns on record, in his defence evidence, to prove that the same was not actually disclosed in income tax returns. The non disclosure in income tax returns has not been confronted to the complainant or proved in any other manner.
Thirdly : In any event if it is assumed for the sake of argument that the same was not disclosed, it is, at best, a violation of a taxing statute, which is a revenue matter between the state and the complainant, for which the necessary consequences shall follow. It is no longer res integra, that contravention of Section 269 SS of the Income Tax Act shall not by itself, make the loan irrecoverable or illegal.
Reliance on K.Janardan Bhat v. Dattatraya G. Hegde - 2008 (1) LRC 123 (SC) in this regard is misplaced since the decision was given on completely different facts. This decision and other decisions in the same vein, wherein the issue of Section 269 SS of the Income Tax has come up, have all been cases where the very factum of loan/liability has been disputed and a reasonable doubt raised as to the possibility of a loan having been Vinod Sharma Vs. Vipul Sharma CC No. 5454/11 16 of 17 advanced. Once that is done, needless to state, the onus shifts onto the complainant to prove the loan affirmatively. In stark distinction to this, in the present case the accused, as we have seen above, has not disputed his liability and admitted the issuance of cheques. Hence the question of probablising the factum of loan by filing IT returns on record, does not arise. The non disclosure of a cash loan in IT returns, in some of these decisions, has been taken as a factor that raises an inference of loan having not been advanced at all. This reasoning is not applicable in the present case in view of admission of financial help and the financial prowess of the complainant is also more than sufficiently established.
The other two cases i.e M.S. Narayana Menon @ Mani vs State Of Kerala & Anr 2006 (6) SCC 39 & John K.John v. Tom Varghese (2007) 12 SCC 714, are also distinguishable on a meaningful reading and for the above reasons. It becomes important to underscore the unfortunate tendency of placing reliance on a large number of precedents, without bothering to discern the ratio that a decision lays down. A decision is to be read secundum subjectam materiam i.e in the specific light of its own facts and not as an Euclid's theorem or a statute.
Coming back to the present case, To sum up the cogitation above, the issuance of cheque in discharge of a liability has been clearly established. The accused Vipul Sharma has failed to rebut the mandatory presumptions of consideration and liability and is therefore, convicted of offence u/s 138 of the N.I.Act.
Let the Convict be heard on the question of quantum of sentence.
A copy of this judgment be placed on the official website of the District Courts.
Judgment contains 17 signed pages.
(Bharat Chugh) MM (NI Act)-01, Central District, THC, Delhi 22.09.2014 Vinod Sharma Vs. Vipul Sharma CC No. 5454/11 17 of 17