Delhi District Court
Rampal vs Samdar Singh on 16 August, 2024
IN THE COURT OF MS. DEEPIKA THAKRAN
JUDICIAL MAGISTRATE FIRST CLASS, DWARKA
COURTS, NEW DELHI
Criminal Complaint No.: 36653/19
Rampal ......... Complainant
Versus
Samdar ........... Accused
1. Name & address of the : Rampal
complainant S/o Late Sh. Balbir Singh
Choudhary
R/o: H. No. 239, Vill.
Ghumanhera, Najafgarh,
New Delhi.
2. Name & address of the : Samdar Singh
accused S/o Sh. Pal Singh,
R/o: Vill. Nangaliya, Tehsil
Khetri, Dist. Jhunjhunun,
Rajasthan-301019.
3. Offence complained of : U/S 138, The
Negotiable Instruments
Act,1881.
4. Date of Institution of case: 01.10.2019
5. Plea of accused : Pleaded not guilty.
6. Final order : Convicted.
7. Date of decision of the case : 16.08.2024.
CC NI Act 36653/19 Rampal Vs. Samdar Singh 1/15
JUDGMENT
1. Vide this judgment, I shall dispose of the aforementioned complaint case as filed by the complainant, Rampal (hereinafter referred to as the complainant) against accused, Samdar Singh (hereinafter referred to as the accused). The present complaint has been filed against the accused u/s 138 of Negotiable Instrument Act, 1881 (hereinafter referred to as the NI Act).
2. The brief facts as alleged by the complainant in the complaint are that the accused approached the complainant in the month of June, 2018 for a financial help of Rs.12,50,000/- and had assured to return the same within a period of one year i.e. by on or before May-July, 2019, the complainant on account of friendly relation handed over Rs.12,50,000/- in cash to the accused in first week of June, 2018 but even after lapse of stipulated period the accused did not return the loan amount but issued two cheques i.e. cheque No. 179617 for Rs.11 lakhs and cheque No. 179619 for Rs.1,50,000/- both drawn on PNB, Prahari, Bharatpur, Rajasthan in discharge of the aforementioned loan and assured that the cheques would be encashed on its presentation to the banker of the complainant. The complainant ultimately deposited the cheque bearing No. 179617 dated 20.05.2019 for Rs.11 lakhs on 13.08.2019 with his banker Allahabad Bank, Ghuman Hera, New Delhi but to his utter shock it got dishonoured with remarks 'Instrument outdated/stale'. The dishonoured cheque was handed over to the complainant on 18.08.2019 by his CC NI Act 36653/19 Rampal Vs. Samdar Singh 2/15 banker. Then again the complainant had further deposited another cheque bearing No. 179619 dated 27.07.2019 for Rs.1,50,000/- issued by the accused against part liability which again got dishonoured with remarks 'Drawer's signature illegible', which was returned vide return memo to the complainant on 03.08.2019. Thereafter, the complainant had served a legal notice dated 26.08.2019 upon the accused by way of a registered post vide Receipt No. RD858527455 and ED 393848404IN both dated 02.09.2019 however despite service of notice the accused has failed to make the payment within the statutory period, on this cause of action the instant complaint for offence punishable u/s 138 of N.I. Act has been filed which falls within the jurisdiction of this court.
3. In order to prove his case, complainant in the pre-
summoning evidence, examined himself as CW1 by way of affidavit Ex. CW-1/X and relied upon following documents which are as follows:-
1) Returning memo dated 20.08.2019 Ex. CW-1/A
2) Returning memo dated 01.08.2019 Ex. CW-1/B
3) Original cheque No. 179619 Ex. CW-1/C
4) Original cheque No. 179617 Ex. CW-1/D
5) Legal notice, postal receipt and Internet generated tracking report Ex. CW-1/E (colly)
4. Upon appreciation of pre-summoning evidence and upon finding prima facie case against the accused, the accused was summoned for an offence punishable under section CC NI Act 36653/19 Rampal Vs. Samdar Singh 3/15 138 NI Act. Thereafter, notice u/s 251 Cr.P.C. was framed against the accused on 29.04.2024 to which he pleaded not guilty and claimed trial. At the time of notice the accused has stated that he has not taken any loan from the complainant, he has not received any legal notice but the address mentioned in the legal notice is correct. In defence he stated that the complainant was getting him a mining lease and for the same purpose the cheques in question were issued as security cheques. He has deposited money in the account of complainant's family members on his instructions and has also deposited cash in the account of the complainant, of which he has deposit slip. He has paid some amount in front of two persons to the complainant. Accused has averred that complainant has misused his cheques and he is not liable for any payment.
5. Thereafter, request was made for cross-examination of the complainant witnesses under Section 145(2) NI Act verbally by the counsel for accused which was allowed on 29.04.2022. Thereafter, complainant was cross-examined by counsel for accused. Complainant has examined three other witnesses in complainant evidence and has dropped one witness. Thereafter, the complainant evidence was closed on 21.09.2023 and matter was listed for statement of accused u/s 313 Cr.PC.
6. Statement of accused was recorded u/s 313 Cr.PC on 06.10.2023, wherein all the incriminating circumstances which were against the accused were put to him to which CC NI Act 36653/19 Rampal Vs. Samdar Singh 4/15 accused stated that he has not taken any loan from the complainant. He had issued two cheques to the complainant as security for a mining transaction. He had filled the cheque No. 179617 but had not filled the particulars of the cheque No. 179619. He had done lease agreement for mining with the complainant and issued the cheques as security. He had signed both the cheques.
7. In DE he has examined himself as DW-1 as well as one more witness i.e. Sh. Har Narayan as DW-2 and DE was closed after dropping one witness Sh. Inderjeet on 04.12.2023.
8. Final arguments were heard at length from both the parties, the evidence led by the parties has been carefully considered and record thoroughly perused.
9. Before proceeding to the merits of the case, it is important to lay down the basic provision of Section 138 of NI Act,1881. In order to ascertain whether accused has committed offence u/s 138 NI Act the following ingredients have to be proved which are as follows:
a) person must have drawn a cheque on an account maintained by him in a bank for payment of a certain sum of money to another person from out of that account for the discharge of any legally enforceable debt or liability;
b) cheque has been presented to the bank within a period of three months from the date on which it is drawn or within the period of its validity whichever is earlier;
CC NI Act 36653/19 Rampal Vs. Samdar Singh 5/15
c) That cheque has been 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;
d) The payee or the holder in due course of the cheque has made 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; and
e) 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.
10. It becomes imperative to mention that Section 139 of NI Act provides a statutory presumption in favour of the payee that the cheque was issued to him in discharge of a debt or other liability of a legally enforceable nature. Also, the said provision must be read along with Section 118 of NI Act which states that every negotiable instrument is presumed to have been drawn and accepted for consideration. That said, what follows is that trial under section 138 NI Act is structured on the premise of the reverse onus of proof theory since the offence is a document based technical one. The journey of evidence begins not from the home of the prosecution story but from the point of the defence. The presumption carved out is presumption in law and not CC NI Act 36653/19 Rampal Vs. Samdar Singh 6/15 presumption of fact.
11. In this regard, reliance can be placed on K. N. Beena v.
Muniyappan (AIR 2001 SC 2895), it was observed as follows: -
"Thus, in complaints under Section 138, the Court has to presume that the cheque had been issued for a debt or liability. This presumption is rebuttable. However, the burden of proving that a cheque had not been issued for a debt or liability is on the accused. This Court in the case of Hiten P. Dalal vs. Bratindranath Banerjee reported in (2001) 6 SCC 16 has also taken an identical view."
The Hon'ble Supreme Court, in the case of Hiten P. Dalal vs. Bratindranath Banerjee (AIR 2001 SC 3897), observed as follows:
"Because both Sections 138 and 139 require that the Court "shall presume" the liability of the drawer of the cheques for the amounts for which the cheques are drawn, as noted in State of Madras vs. A. Vaidyanatha Iyer, (AIR 1958 SC 61), it is obligatory on the Court to raise this presumption in every case where the factual basis for the raising of the presumption had been established. It introduces an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the accused (ibid)."
12. Further, it is a settled position that when an accused has to rebut the presumption under Section 139 NI Act, the standard of proof for doing so is that of "preponderance of probabilities".
As held in Rangappa vs. Srimohan [(2010) 11 SCC 441], the Hon'ble Supreme Court has observed:
"Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of preponderance of probabilities. Therefore, if CC NI Act 36653/19 Rampal Vs. Samdar Singh 7/15 the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own."
13. Thus, as laid down in catena of decisions it is an established law that onus lies upon the accused to rebut the presumption and to establish that cheque in question was not given in respect of any debt or liability, with the standard of proof being preponderance of probability. Therefore, it becomes critical to examine whether the explanation of the accused coupled with the evidence on record is sufficient to dislodge the presumption envisaged by Section 118 & 139 of NI Act.
14. 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 u/s 138 NI Act. This criminal liability can be attached by proving each of the elements of the section under which liability is sought to be enforced. I shall now go on to appreciate the evidence, documentary or oral, in the light of how compellingly it satisfies each of such ingredient, if it all.
Appreciation of Evidence and finding:
15. As per the averments made in the complaint the accused is stated to have issued two cheques i.e. cheque No. 179617 CC NI Act 36653/19 Rampal Vs. Samdar Singh 8/15 dated 20.05.2019 of Rs.11 lakhs and cheque No. 179619 dated 27.07.2019 for Rs.1.5 lakh towards his legal liability i.e. repayment of the loan given by the complainant to the accused as financial aid. The complainant has contended that of the two cheques in question, cheque number 179617 (Ex. CW1/D), dated 20.05.2019, drawn on Punjab National Bank, Prahari, Bharatpur, Rajasthan, was presented on 13.08.2019 to his bank, Allahabad Bank (which merged into Indian Bank effective from 1st April 2020), Ghuman Hera, Chhawla, New Delhi. This cheque, issued by the accused in partial discharge of his liability, was dishonored by the accused's bank with the remark "Instrument Outdated/Stale" (Ex. CW-1/B).
16. The complainant called CW-3, Sudhesh Pal, Senior Manager of the Clearing House Branch at Punjab National Bank, to testify. In his testimony, CW-3 stated that the processing date on the return memo (Ex. CW-1/A) was 19.08.2019, indicating that the cheque was scanned by the complainant's bank on that date. According to RBI Guidelines, the cheque would be posted in the drawer's bank branch on the next working day. In this case, the cheque was processed on 19.08.2019 and posted for payment on 20.08.2019. However, by 20.08.2019, the cheque had become stale, as the three-month validity period had expired.
17. The complainant also examined CW-4, Akshay Sharma, Assistant Manager at Indian Bank, Ghumanhera Branch, CC NI Act 36653/19 Rampal Vs. Samdar Singh 9/15 New Delhi. CW-4 stated that he was not employed at the bank at the time the cheque was deposited and, therefore, could not explain why the cheque was processed on 19.08.2019, despite the deposit slip indicating that it was deposited on 13.08.2019. The Ld. Counsel for the complainant has argued that the complainant has submitted the cheque within the statutory period as is indicated by the deposit slip. However, when CW-4 was cross-examined he stated that the bank do not put date on the stamp on deposit slip, only the named stamp is put on the deposit slips. Therefore, it cannot be said with certainity that the cheque Ex. CW-1/D has been presented on that very day i.e. 13.08.2019 or not. CW-4 was unable to clarify why the cheque was processed belatedly by the complainant's bank. Though, as stated by CW-4, the timing of presentation of the cheque is in dispute and as stated by the witness, the delay may be due to the fault of complainant's bank. This dispute is not the subject matter of this trial as the object of the current trial is only limited to the extent of determining the culpability of the accused for the offence punishable under section 138 NI Act.
18. The return memo in question was further explained through a written explanation (Ex. CW 3/1) by Manojit Das, Chief Manager of the Centralized Draft Payment Centre at Punjab National Bank. The explanation confirmed that the cheque was returned unpaid on 20.08.2019 with the reason code "31," meaning "Instrument Outdated/Stale." Since the cheque was stale, the system automatically returned the CC NI Act 36653/19 Rampal Vs. Samdar Singh 10/15 instrument without considering other details.
19. With regard to cheque number 179617 dated 20.05.2019, the complainant's argument is that the cheque was presented on 13.08.2019, well within the statutory three- month period, at the complainant's bank (the collecting bank). However, the return memo dated 20.08.2019 indicated that the instrument was outdated/stale when it reached the accused's bank (the paying bank). The key question that arises is: for a valid criminal action under Section 138 of the Negotiable Instruments Act, 1881, to which bank--the paying or the collecting bank--must the cheque be presented within its three-month validity period?
20. In Shri Ishar Alloy Steels Ltd. v. Jayaswals Neco Limited (2001) 3 SCC 609, a three-judge bench of the Hon'ble Supreme Court addressed the issue of where a cheque must be presented to invoke criminal liability under Section 138 of the Negotiable Instruments Act, 1881--whether at the collecting bank or the paying bank. The Court held that the term "bank" referred to in clause (a) of the proviso to Section 138 refers specifically to the drawee bank on which the cheque is drawn, not to all banks where the cheque might be presented for collection, including the bank of the payee, in whose favor the cheque is issued.
21. The judgment clarified that while the payee has the option to present the cheque at any bank, including the collecting bank where the payee holds an account, to trigger the CC NI Act 36653/19 Rampal Vs. Samdar Singh 11/15 drawer's criminal liability, the collecting bank is required to present the cheque to the drawee bank on which the cheque is drawn.
22. Moreover, the Hon'ble Supreme Court emphasized that if the cheque is not presented to the drawee bank within the time frame stipulated under Section 138, the drawer cannot be held criminally liable. The relevant portion of the judgment states:
".....The non presentation of the cheque to the drawee-bank within the period specified in the Section would absolve the person issuing the cheque of his criminal liability under Section 138 of the Act, who shall otherwise may be liable to pay the cheque amount to the payee in a civil action initiated under the law. A combined reading of Section 2, 72and 138 of the Act would leave no doubt in our mind that the law mandates the cheque to be presented at the bank on which it is drawn if the drawer is to be held criminally liable."
23. This judgment clearly establishes that to hold the drawer criminally liable under Section 138, the cheque must be presented at the drawee bank within the prescribed time limit.
24. The complainant's reliance on the deposit slip as evidence of compliance with Section 138 is noted. However, even assuming the genuineness of the deposit slip and that it shows the cheque was deposited within the stipulated CC NI Act 36653/19 Rampal Vs. Samdar Singh 12/15 three-month period at the complainant's bank, a crucial question remains: whether such deposit constitutes 'presentation' as contemplated by Section 138.
25. This court must carefully consider the legislative intent and jurisprudential interpretation of 'presentation' in the context of negotiable instruments. As discussed later in this judgment, a thorough examination of the issue reveals that mere deposit of the cheque, as evidenced by the deposit slip, does not fulfill the requirement of 'presentation' under Section 138. This conclusion puts to rest the debate surrounding the deposit slip's relevance in this regard.
26. In the factual matrix of the present case, cheque bearing number 179617 (Ex. CW1/D) was not presented before drawer/paying bank within the statutory period of three months thereby no cause of action arose in favour of the complainant against the accused. Accordingly, accused stands absolved of criminal liability with respect to cheque number 179617.
27. Now coming to cheque bearing number 179619 dated 27.07.2019 (Ex. CW1/C), the complainant contends that upon presentation the same was dishonoured by the accused's banker with remark "Drawers signature illegible". The accused has admitted the issuance of said cheque, his signatures and also his address mentioned in the legal demand notice dated 26.08.2019. This cheque was presented within the statutory period therefore, all the CC NI Act 36653/19 Rampal Vs. Samdar Singh 13/15 ingredients envisaged under section 138 of NI Act stand fulfilled and presumption under section 139 r/w section 118 NI Act is raised against the accused. Now the burden to rebut this presumption on the standard of preponderance of probability is on the accused.
28. Accused in his defence attempted to evade his liability by claiming the cheque was merely a security cheque issued at the time of entering into a partnership agreement with the complainant. That the partnership between the accused and the complainant could not materialise and he asked the complainant to return the cheques but he refused to do so. However, the Accused in his cross examination, could not satisfactorily explain as to why he did not initiate any legal action against the complaint when he did not return the cheques. Accused in his defence has examined DW-2 also who in cross testified that he does not have any knowledge about the issuance of the cheque in question.
29. It is also pertinent to note that the complaint and the accused entered into partnership vide an exhaustive partnership deed, there was no mention of security cheque in the said deed which makes the defence of the accused improbable as law itself provides that no oral evidence can be given to additional detail in exhaustively drafted written agreement1.
30. Moreover, in terms of 'security cheque', it is a settled law as per the Hon'ble Apex Court in Sripati Singh vs. State of 1 See Section 92 of Indian Evidence Act, 1872 CC NI Act 36653/19 Rampal Vs. Samdar Singh 14/15 Jharkhand & Anr, 2021 SCC OnLine SC 1002 that unless there is an agreement to the contrary, security cheque would mature on presentation and if dishonoured would attract the consequence of section 138 NI Act.
31. Consequently, the accused has failed to rebut the presumption under Section 139 read with Section 118 of the Negotiable Instruments Act, therefore, this court finds the accused guilty of dishonour of cheque bearing number 179619 (Ex. CW-1/C) as the accused's defence lacks merit and the prosecution/complainant has successfully established the offence. Therefore, in view of above discussion, accused is convicted for commission of offence punishable u/s 138 N.I. Act with regard to cheque No. 179619 (Ex. CW-1/C).
Let the accused be heard on the point of sentence separately.
32. Let copy of this judgment be given to convict free of cost.
Digitally
signed by
DEEPIKA
DEEPIKA THAKRAN
THAKRAN Date:
2024.08.16
16:11:09
+0300
Announced in the open court on Deepika Thakran
16.08.2024 JMFC(NI ACT)-04, SW/Dwarka
New Delhi
CC NI Act 36653/19 Rampal Vs. Samdar Singh 15/15