Delhi District Court
Pavitra Devi vs Rekha Devi on 20 July, 2018
IN THE COURT OF SHRI PUNEET NAGPAL, MM (NI ACT)-01,
SOUTH-WEST DISTRICT: NEW DELHI
New CC No. 6961/14
Unique case ID No. 4996343/16
Under Section 138 of N.I. Act
In the matter of:
PAVITRA DEVI
w/o Shri Mukesh Kumar
r/o House no.A-289 E,
Madhu Vihar, Dwarka,
New Delhi - 110 059.
... Complainant
Versus
REKHA DEVI
w/o Shri Arun Kumar
M.S.R. Tyres,
Khasra No.595, Seed Farm Road,
Pulia Ke Pass, Alipur,
Delhi - 110 036.
Also at:-
C/o Shri Pritam Singh
s/o Late Shri Dharamvir Man,
Near Chandan Market,
Behind Rahul Computers House,
Main Narela Road, Alipur,
New Delhi - 110036.
... Accused
Date of Institution : 23.07.2012
Date on which judgment was reserved : 08.06.2018
Date of Judgment : 20.07.2018
JUDGMENT
1. Shorn off unnecessary details, the case of the New CC No. 6961/14 Unique case ID No. 4996343/16 PAVITRA DEVI VS REKHA DEVI complainant as narrated in the complaint is that the accused is a cousin sister-in-law of the complainant and was having good family relations with her. It is the case of the complainant that the accused alongwith her husband namely Arun Kumar (accused in CC no.6885/14) approached the complainant in the month of August 2011 and requested the complainant for a friendly loan of Rs.9 lacs for a period of six months to expand their business which was being run by the accused under the name and style of M/s MSR Tyres. Keeping in view the good friendly relations, the complainant agreed to advance the loan as was requested by the accused and her husband. The said loan of Rs.9 lacs was advanced to the accused and her husband in three-four installments on the assurance that the same shall be repaid by the accused and her husband within a period of six months. It has been averred by the complainant that in the month of February 2012, the complainant approached the accused and her husband and demanded repayment of the loan amount. However, the accused and her husband showed their inability to repay the said loan as they were facing some financial difficulties and requested the complainant for some more time to repay the loan amount. Again in the month of March 2012, when the complainant approached the accused and her husband for repayment of loan amount, the accused and her husband again requested for some time till April 2012. Finally, in the month of April 2012, the accused issued two cheques bearing no.131643 dated 02.05.2012 for Rs.2 lacs and cheque bearing no.131644 dated 16.05.2012 for Rs.3 lacs both drawn on Oriental Bank of Commerce, Kirti Nagar, New Delhi (hereinafter called the cheques in question). At the same New CC No. 6961/14 Unique case ID No. 4996343/16 PAVITRA DEVI VS REKHA DEVI time, the husband of the accused also issued cheques bearing no.353045 dated 30.04.2012 for Rs.2.5 lacs and cheque bearing no.353046 dated 15.05.2012 for Rs.1.5 lacs both drawn on State Bank of India, Ghonda, Delhi -110 053 to discharge their joint liability towards the complainant for repayment of the loan amount and requested the complainant to present the cheques in question for encashment after 15.05.2012. The complainant presented the cheques in question for encashment on 17.05.2012 which to the despair of the complainant, got dishonoured on presentation with the remarks ''Funds Insufficient'' vide cheque return memo dated 18.05.2012 (Ex.CW1/3 and Ex.CW1/4). Thereafter, the complainant immediately contacted the accused and her husband but, the accused refused to make the payment. This constrained the complainant to send a legal notice dated 11.06.2012 to the accused, which was duly replied by the accused wherein the accused flatly refused to make repayment of the cheque amount and this led to the filing of the present case.
2 Cognizance of the offence under Section 138 NI Act was taken against the accused and summons were issued. The accused entered appearance. Notice under Section 251 CrPC was framed against the accused to which she pleaded not guilty. In her plea of defence, recorded on 05.07.2013, accused denied the factum of issuance of cheques in question to the complainant and that of taking of any loan. It was the defence of the accused that one Shri Ram Avtar, who was working for the accused and was looking after and managing the transport business of the accused had stolen the cheques in question in the year 2011, New CC No. 6961/14 Unique case ID No. 4996343/16 PAVITRA DEVI VS REKHA DEVI prior to his leaving the job of the accused as his relations with the accused were not cordial at the relevant time. It was further submitted by the accused that the said Ram Avtar is the real brother of the complainant and therefore, the complainant had misused the cheques in question. The accused also submitted that she had replied to the legal notice sent by the complainant on 29.06.2012.
EVIDENCE OF THE COMPLAINANT
3. In Post Summoning Evidence, the complainant chose to examine herself as complainant's witness and testified as CW1 and adopted her Pre-Summoning Evidence tendered by way of affidavit. The accused had filed application under Section 145(2) NI Act and the accused was allowed to cross examine the complainant. However, nothing substantial could be elicited from the cross examination of the complainant which could support the defence of the accused or create doubts on the credibility of the witness. In his cross examination, the complainant admitted that she is an income tax payee but she has not disclosed the loan in question advanced to the accused and her husband in her ITR's of the relevant years. She testified that she was earning sum of Rs.15-20,000/- per month from stitching business which was being run by her under the name and style of M/s Krishna Silai Center. The said witness also testified that the amount which was advanced to the accused and her husband was in cash and the said cash was kept by her at her residence as the same was received by her from her brother in law Birender. It was testified by the accused that she had earlier advanced loan of New CC No. 6961/14 Unique case ID No. 4996343/16 PAVITRA DEVI VS REKHA DEVI Rs.7 lacs to the said Birender by way of bank transfer and her brother-in-law, Birender had refunded the said loan of Rs.7 lacs in cash and this cash amount was used to give friendly loan to the accused and her husband. The witness also admitted that no documentation was done at the time of advancement of the loan and no security was taken by the complainant from the accused at the time of advancement of loan. However, in the same breath, the complainant explained that the reason for not executing any documents in respect of the loan transaction was that the relations between the parties were good and they were also relatives. The said witness also testified that the cheques in question were duly filled up at the time of handing over of the same to the complainant and the cheques in question were handed over to her on 24.04.2012 on the occasion of the marriage of her nephew, where the accused was also present. The witness testified that she was not aware as to whether her brother namely Ram Avtar was working at the showroom of the accused or that he was having monetary transaction with the accused. The complainant had categorically deposed that the husband of the accused had informed her that they require loan as they wanted to extend their stock as they have become big dealers of MRF Tyres.
4. To corroborate and fortify her testimony, the complainant also chose to examine one Mr. Vishal Singh, Assistant Manager from South Indian Bank, Sector 10, Dwarka, New Delhi where the complainant was maintaining her account and had deposited the cheques in question for encashment. The said witness (CW2) brought on record statement of account New CC No. 6961/14 Unique case ID No. 4996343/16 PAVITRA DEVI VS REKHA DEVI bearing number 039805300001283 for the period 01.01.2011 to 30.06.2012 along with certificate under 2A of Bankers' Book Evidence Act. The same is exhibited as Ex.CW2/A (colly).
DEFENCE OF THE ACCUSED 5 The version of facts as discernible from the plea of defence recorded at the stage of framing of notice under Section 251 CrPC, from cross-examination of complainant CW1, from statement of accused recorded under Section 313 CrPC and from the testimony of the accused DW1 are that the accused has denied the factum of taking of any loan from the complainant. The version of the accused is that the cheques in question are stolen cheques and they same were stolen by one Shri Ram Avtar, brother of the complainant and the same have been misused by the complainant.
6. The accused in her testimony as DW1, has deposed that she used to give complete cheque book after signing the same to the said Ram Avtar as he used to fill diesel and petrol in the vehicles after filling the amount in the already signed cheques. It was further deposed by the accused that the cheques in question are of year 2007 and the other cheques belonging to the same series were already encashed till the end of year 2008 and that she got knowledge regarding the misuse of cheques in question after she received the legal demand notice sent by the complainant. To corroborate her testimony, the accused has filed a copy of bank pass book of the account on which the cheques in question have been drawn. The same is New CC No. 6961/14 Unique case ID No. 4996343/16 PAVITRA DEVI VS REKHA DEVI exhibited as Ex.DW1/1. The accused has also filed one Special Power of Attorney dated 26.03.2009 in favour of Ram Avar (Mark DW1) and some documents (copy of bills Ex.DW1/5 and Ex.DW1/6) to prove her assertion that the said Ram Avtar was working for her and was authorized and used to deal on behalf of the accused. In her cross-examination, the accused testified that she was the proprietor of M/s MSR Tyres. However, she was not having knowledge regarding the rules / criteria laid down by MRF Tyres, to get an exclusive agency of MRF Tyres. The accused was confronted with the income tax returns filed on behalf of MSR Tyres for the year 2010-11 and year 2011-12 and was questioned as to whether, in the said ITR, loans have been shown. Contrary to the record, the accused testified that MSR Tyres has not shown any loans in the year ITRs as she was not aware regarding any loan. The accused also admitted that there is no document on record to show that she used to pay salary to the said Ram Avatar who was allegedly employed by her. The accused also admitted that she had not lodged any complaint against the said Ram Avtar for theft of cheques in question with police or with any other authority till date. The accused denied that she had ever issued the cheques in question to the complainant for discharging her legal liability to repay the loan to the complainant.
7. The accused also chose to examine one Shri Ajay Kumar Singh, Accountant in V. Khattar & Company. The said witness (DW2), brought on record two balance sheets alongwith trading, profit and loss accounts for year ending 31.03.2011 and 31.03.2012. The same are exhibited as Ex.DW2/A (colly).
New CC No. 6961/14 Unique case ID No. 4996343/16PAVITRA DEVI VS REKHA DEVI
8. The factual position being thus, now let us quickly run through the legal benchmark which is to be satisfied in order to constitute an offence u/s 138 NI Act-:
(i) that the person must have drawn a cheque on an account maintained by him in a bank for payment of certain amount of money to another person from out of that account.
(ii) that a cheque should have been issued for discharge, in whole or in part, or any debt or other liability.
(iii) that the cheque has been presented to the bank within a period of six months from the date on which it was drawn or within the period of its validity whichever is earlier.
(iv) that cheque is returned by the bank unpaid 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) that the payee or the holder in due course of the cheque makes a demand for the payment of said amount of money by giving a notice in writing, to the drawer of the cheque, within 30 days of the receipt of the information by him from the bank regarding the return of the cheque as unpaid.
(vi) the drawer of the said 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.
9. Being cumulative, it goes without saying that it is only when, all the aforementioned ingredients are satisfied, that a person who had drawn the cheque can be deemed to have committed an offence under Section 138 of the NI Act.
New CC No. 6961/14 Unique case ID No. 4996343/16PAVITRA DEVI VS REKHA DEVI 10 On analysis of the facts and the legal position stated above, the court finds the parties to be at variance on one primary issue i.e. whether the cheques in question were issued by the accused in discharge of legally enforceable liability to repay the loan amount of Rs.9 lacs which was advanced by the complainant to the accused and her husband.
11. File perused and submissions heard. Let us determine, whether the accused has succeeded in establishing the defence taken by her in respect of cheques in question. The service of legal notice has been admitted and therefore, let us turn into the core issue as to whether the cheques in question were issued to discharge any legal liability.
EXISTENCE OF LEGALLY ENFORCEABLE DEBT OR LIABILITY.
12. Let us briefly recapitulate that the accused has admitted that the cheque in question bears her signature and is drawn on a bank account maintained in her name. However, it is the case of the accused that the cheques in question were stolen by one Shri Ram Avtar and has been misused by the complainant in connivance with the said Ram Avtar.
13. Ld. Counsel for the complainant has implored the court that facts have been established by the complainant, which necessitate the invocation of presumption of the cheques having been issued for good consideration under section 139 read with Section 118 (a) of N.I. Act, 1881.
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14. On the other hand, Ld. Counsel for the accused has argued that the accused has not admitted that the cheques in question were issued to the complainant by the accused and therefore, it is for the complainant to prove beyond reasonable doubt as to how the cheques in question reached into the hands of the complainant. At the same time, it has been argued on behalf of the accused that the cheques in question are stolen cheques and therefore, no occasion arises for invoking presumption under section 139 read with Section 118 (a) of NI Act.
15. In my opinion, a factual basis is established, to invoke the presumption of cheque having been issued in discharge of a legally sustainable liability and drawn for a good consideration by virtue of Section 118(a) read with Section 139 of NI Act as the accused has failed to bring even an iota of evidence to prove her assertion that the cheques in question were stolen by Ram Avtar. At the same time, admittedly, the accused has not lodged any report with any authority till date against the said Ram Avatar for theft / misuse of cheques in question. Nothing rankles more in the human heart than a brooding sense of injustice and therefore, the conduct of the accused in remaining indolent and not filing any complaint against Ram Avtar reeks of culpability.
16. It is an established proposition of law that once the cheque relates to the account of the accused and he accepts and admits the signatures on the said cheque, then initial presumption as contemplated under 139 NI Act has to be raised New CC No. 6961/14 Unique case ID No. 4996343/16 PAVITRA DEVI VS REKHA DEVI in favour of the complainant. It is a mandatory presumption though the accused is entitled to rebut the said presumption. In a catena of judgments, it has been laid down by the Hon'ble Apex court that such presumption in favour of the complainant cannot be rebutted by a mere plausible explanation but more than a plausible explanation by way of rebuttal evidence.
17. In my opinion, the accused has not succeeded in rebutting the presumption of legal liability or even probablizing her defence. The defence of the accused is that she has not issued the cheques in question to the complainant but, the same were handed over in blank signed condition to one Ram Avtar I.e the brother of the complainant in the year 2007 and which were later taken by him without the permission of the accused and were subsequently misused by the complainant.
18. The accused has brought on record her savings bank account statement Ex.DW1/1 to prove her assertion that the cheques in question were handed over to one Shri Ram Avtar in the year 2007. Ld. Counsel for the accused has drawn my attention to Ex.DW1/1 and has argued that a bare perusal of the passbook of the accused clearly shows that the cheques immediately preceding and succeeding the cheques in question have been encashed in year 2007-2008. It has been argued that the last cheque of the series bearing no.131650 was encashed way back in the month of September 2007 and the other cheques of the same series to which the cheques in question belong, have been encashed in the year 2007-2008 itself. It has been argued on behalf of the accused that the presumption that the accused New CC No. 6961/14 Unique case ID No. 4996343/16 PAVITRA DEVI VS REKHA DEVI may have earmarked and set a part the cheques in question in 2007, pre-empting that he could use the same in year 2011-12 and take the present defence would amount to stretching the imagination too much. It has been argued on behalf of the accused that the accused cannot be credited with such supernatural premonitory powers and thus, the ordinary presumption which can be raised is that the cheques in question would have been issued, even if not perfectly serialwise, but broadly in chronological order. Therefore, it has been vociferously argued that this probablizes the defence of the accused to a great extent that the cheques in question relate to year 2007 and that in the normal course of human conduct, the cheques could not have been issued to the complainant by the accused in the year 2012 as has been alleged by the complainant. At the same time, reliance has been placed by the accused, on the Judgment titled as 'K. Parakashan versus P. K.Surenderan', Cr.Appeal no.1410/2007 passed by Hon'ble Apex Court to argue that such kinds of cheque are not genuine.
19. To appreciate the argument advanced on behalf of the accused, it is pertinent to mention that the defence of the accused which was disclosed by her during her testimony as DW1 is that the complainant had handed over a complete cheque book after signing the same to the said Ram Avtar as he used to fill diesel / petrol in the vehicles by filling in the cheques. However, perusal of the record shows that the defence which was disclosed by the accused, in her testimony as DW1, is in variance with the defence disclosed by her at the stage of framing of notice under section 251 CrPC and during her statement under section 313 New CC No. 6961/14 Unique case ID No. 4996343/16 PAVITRA DEVI VS REKHA DEVI CrPC. At the stage of recording of plea of defence under section 251 CrPC, the defence of the accused was that the cheques in question were issued to Ram Avtar for meeting emergent requirements of funds as the said Ram Avtar was looking after the affairs of the business of the accused. Contrary to her plea of defence, the accused at the stage of her examination under section 313 CrPC stated that the said Ram Avtar used to work for her husband and her husband used to make payment of diesel / petrol bills through his credit card and for making payment in respect of the credit card bills, blank signed cheques (which includes the cheques in question) used to be kept in the possession of Ram Avatar. Thus, it is apparent that the accused has, at different stages of trial, took different stands and there are material contradictions in the version of events as has been proffered on behalf of the accused.
20. The suspicion regarding the falsity of the defence taken by the accused, gets more murkier as a bare perusal of Ex.DW1/1 belies the claim of the accused that the series of cheques (including the cheques in question), were handed over to Ram Avtar for making payment for credit card bills or for using the same for filling diesel / petrol in the vehicles. It is apparent from bare reading of the entries of the passbook Ex.DW1/1, that the other cheques of the series were not used for making payments as has been alleged by the accused.
21. Contrary to the version of the accused, perusal of Ex.DW1/1 shows that majority of the cheques (cheques bearing no.131626, 131627, 131628, 131629, 131630, 131631, New CC No. 6961/14 Unique case ID No. 4996343/16 PAVITRA DEVI VS REKHA DEVI 131632, 131633, 131634, 131635, 131636, 131637 and 131638) were used for making payment of a fixed sum of Rs.26,671/- each to City Bank. At the same time, cheque bearing no.131641 i.e. the cheque immediately preceding the cheques in question was encashed in the month of July 2007 in favour of one Poonam. Contrary to the submission of Ld. Counsel for the accused, perusal of Ex.DW1/1 shows that the cheques of the series to which the cheques in question belong have not been encashed in seratum. Cheque bearing number 131650, which was the last cheque of the series, got encashed in September 2007 as against the cheque bearing no.131642 which was encashed in the month of December 2007. At the same time, cheques bearing no.131634, 131635, 13636, 131637, 131642 and 131648 have got encashed after the encashment of the last cheque of the series.
22. At the same time, what shatters the believability quotient of the defence of the accused is that there is no need / requirement of issuing blank signed cheques to any person to make payment in respect of the credit card bills as the bills which are issued to the holder of the credit card are usually for an ascertained sum and in case, the holder of credit card wishes to make payment, he / she would usually issue a cheque for such ascertained amount as the knowledge of such amount would be exclusively with such person only. Therefore, the conduct of the accused in issuing blank signed cheques for making payments for credit card bills, is highly un-natural and improbable and is opposite to the conduct of a reasonable man.
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23. Reliance by the accused on 'K. Parakashan versus P. K.Surenderan', is misplaced, in so far as the factual matrix in the said case was totally different. In that case, apart from the fact that the cheques in question belonged to a series which was got encashed much prior to the alleged date of handing over of the cheque, there were numerous other deficiencies in the case of the complainant, which led to the acquittal of the accused. Hence, meaningful (and not pedantically) reading of the case relied upon by the accused, is totally distinguishable from the present case. It needs to be outlined that no precedent either statute or a Euclid's theorem. Every case is to be read Secumdum subjectum materiam i.e. in the specific light of its own facts and circumstances and after carefully discerning its ratio. It is well settled that judicial precedent cannot be followed as a statute and has to be applied with reference to the facts of the case involved in it. What is of essence in a decision is its ratio and not every observations found therein, nor what logically follows from the observations made in it. It is to be remembered that a decision is only an authority for what it actually decides. Any phrase of sentence used in the judgment cannot be cherry - picked and used mechanically, totally shorn out of its context.
24. At the stage of final arguments, Ld. Counsel for the accused has argued that as per the version of events, deposed by the complainant herself, the entire loan amount was advanced in cash and keeping in view the fact that the complainant was earning a modest sum of Rs.20,000/- per month, serious doubts arise on the financial credibility / competency of the complainant New CC No. 6961/14 Unique case ID No. 4996343/16 PAVITRA DEVI VS REKHA DEVI to advance such an humongous amount of Rs.5 lacs. The arguments advanced by ld. Counsel for the accused is not supported by the record as the complainant has categorically testified that she had received cash of Rs.7 lacs from his brother- in-law to whom she had advanced loan of Rs.7 lacs in the month of July 2011. At the same time, the complainant has through CW2 brought on record her bank statements to prove the fact of advancement of loan of Rs.7 lacs to her brother-in-law Birender. Perusal of Ex.CW2/A (colly) clearly shows that sum of Rs.7 lacs was transferred to one Birender Kumar vide cheque no.560267 and 560268. Therefore, the assertion of the complainant that she was having sum of Rs.7 lacs in cash, with her, deserves acceptance.
25. Ld. Counsel for the accused has argued that complainant has admitted in her cross examination that the alleged loan was given in cash and the same has not been disclosed by her in her income tax returns, and therefore, the same cannot be termed as legally enforceable debt in view of the bar of section 269 S.S. of the Income Tax Act, 1961.
26. This argument advanced by Ld. Counsel for the accused is devoid off merits as it is a settled law that even if, the loan amount has not been disclosed by any person in his / her income tax returns, the same would be inconsequential. It is now fairly settled that the mandate of section 269 S.S. of the Income Tax Act extends only to the taker or receiver of the loan and not the giver. A bare perusal of section 269 S.S. of the Income Tax Act, 1961 shows that no person can accept any loan or deposit of New CC No. 6961/14 Unique case ID No. 4996343/16 PAVITRA DEVI VS REKHA DEVI Rs.20,000/- or more otherwise then, by way of an account payee cheque or an account payee draft.
27. Consequences of contravention of section 269 S.S. of the Income Tax Act have been provided in section 271 D of Income Tax Act, 1961, which provides, that if, a loan or deposit is accepted in contravention of provisions of section 269 S.S. of the Income Tax Act, then a penalty equivalent to the amount of such loan, or deposit may be levied by the Joint Commissioner. Hence, even on a bare reading of these provisions, it is manifest that the bar relates to the receiving or taking of loan and not giving the same.
28. This aspect is very succinctly highlighted by Hon'ble High court of Bombay in the decision tilted as 'Krishna P. Morajkar vs. Joe Ferroa' decided on 19.07.2013, 2013 SCC online Bombay 862, which reads as follows:
''18. The Ld. Counsel for the respondent submitted that the observations of the Supreme Court in para 14 of the Judgment in Rangappa (supra) shows that the Supreme Court had not in any way casts any doubt on the correctness of the decision in Krishna Janardhan Bhat (supra), as it was based on specific facts and circumstances therein. Therefore, he submitted that observations in Krishna Janardhan Bhat (supra), about non-compliance of provisions of section 269 S.S. of the Income Tax Act and implications of section 271 D of Income Tax Act would still stand as good law. The Ld. Counsel for the appellant submitted New CC No. 6961/14 Unique case ID No. 4996343/16 PAVITRA DEVI VS REKHA DEVI that even these observations would stand impliedly over ruled. He pointed out that what was held in Krishna Janardhan Bhat (supra), was that advance taken by way of loan of more than Rs.20,000/- was only to be made by way of an account payee cheque. He submitted that in Rangappa (supra), the Supreme Court was specifically considering the case of an advance of Rs.45,000/- made in cash and yet the Supreme court had upheld the conviction recorded. Thus, even those observations based on the provisions of section 269 S.S. and section 271 D of the Income Tax Act made in Krishna Janardhan Bhat (supra), would stand impliedly overruled. I am entirely in agreement with Ld. Counsel for the appellant because the Supreme court in Rangappa (supra) had specially noted the judgment in Krishna Janardhan Bhat (supra), that advance of more than Rs.20,000/-
was to be made only by way of an account payee cheque, and yet the Supreme Court accepted the case of the complainant who claimed to have made an advance of Rs.45,000/- in cash and proceeded to uphold the conviction, even though the case rested on the fact that the cash advance of sum more than Rs.20,000/- was made. Thus, on this aspect, also, Krishna Janardhan Bhat (supra), stood impliedly overrule by Rangappa (supra), and the Judgment is to be held rendered on the facts of that case, not laying down the law. Therefore, judgments, which follow Krishna Janardhan Bhat New CC No. 6961/14 Unique case ID No. 4996343/16 PAVITRA DEVI VS REKHA DEVI (supra), can be safely ignored.
19. There is another aspect of the matter. The Ld. Counsel for the respondent pointed out that in Krishna Janardhan Bhat (supra), attention of the Supreme Court was possibly not drawn to the actual wording of section 269 S.S. of the Income Tax Act. He submitted that section 269 S.S. of the Income Tax Act, in fact, does not cast any burden upon a person making advance in cash to record it in his returns and does not prevent any such cash advanced from being made. ........................''.
A plain reading of section 269 S.S. shows that no person can accept any loan or deposit of a sum of Rs.20,000/- or more otherwise then by way of an account payee cheque or account payee draft. It does not say that a person cannot advance more than Rs.20,000/- in cash to other person. It is clear that the restriction on cash advances was infact on the taker and not the person who makes the advance. The penalty for taking such advance or deposit in contravention of provisions of section 269 S.S. was to be suffered by the one who takes the advance. Therefore, it is obviously impermissible to invoke these provisions for preventing a person from recovering the advance which he has made..............''.
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29. It is clear from the above that non disclosure of an advance would not make the same non recoverable as it is incumbent on the person taking the advance to disclose the loan and not the person giving the same.
30. What further fortifies this conclusion is the decision of Hon'ble High court of Delhi in the case of Mukesh Gupta vs P. K. Bajaj, CS (OS), number 1615/2003 decided on 20.11.2006, wherein the court, in a civil suit for recovery, quite categorically held, that even assuming a non disclosure in tax returns, merely that, would not render the contract of loan void and loan irrecoverable relevant excerpts from the decision are as follows:-
''36. On issue no.02 framed vide order dated 02.02.2006, suffice would it be note as held in report published as 2002 (8) SCC 31, Nutan Kumar & Ors vs Iind Additional District Judge & Ors., unless a statute specially provides that a contract contrary to the provisions of the statute would be void, the contract would remain binding between the parties and can be enforced between the parties themselves. Consequences, if any, other in law, would follow.
''37. The Ld. Counsel for the defendant could not show any statutory provisions under the Income Tax Act, 1961, or any other law which stipulates that a loan transaction not recorded in the Income Tax Returns, or a loan transaction which is in violation of section 69A, 69B or section 269 S.S. of the Income Tax Act, would be void.New CC No. 6961/14 Unique case ID No. 4996343/16
PAVITRA DEVI VS REKHA DEVI
38. I accordingly hold that the suit is not barred under section 69A, 69B or section 269 S.S of the Income Tax Act.....''.
31. It is, therefore, clear that the claim does not become irrecoverable on account of alleged violation of section 269 S. S. of the Income Tax Act. Infact, the complainant has brought on record his bank account statement through CW2 to show his financial capacity and therefore, she has been able to demonstrate that she was financially competent to advance loan amount to the accused. On the other hand, it was for the accused to justify as to whether he had disclosed the same to the income tax department or not.
32. As a last ditch effort, it has been argued on behalf of the accused that the version of the facts as have been proferred by the accused, has believability quotient as the accused had promptly replied to the legal notice of the complainant and has led his reply. It has been argued on behalf of the accused that it has to be noted that the accused, at this very first opportunity, took the defence which has been taken during the trial. At the same time, it has been argued that there is consistency in the defence of the accused, cutting across various stages, right from his first letter i.e. the reply to the legal demand notice sent by the complainant, her plea of defence recorded at the stage of Section 251 CrPC and during her cross-examination as DW4. It has been argued on behalf of the accused that the accused has remained steadfast to her defence and has not wavered, which leads credence to her testimony. She has stuck New CC No. 6961/14 Unique case ID No. 4996343/16 PAVITRA DEVI VS REKHA DEVI to her hypothesis, even in the testing water of the cross- examination and nothing could be elicited from her, inspite of prolonged cross-examination that would render her defence unworthy of belief.
33. In my opinion, the aforesaid submissions of Ld. Counsel for the accused is fallacious as the accused has miserably failed to bring on record even an iota of evidence, much less cogent, to support and prove her interested ocular testimony. It is trite that a lie repeated often will not and cannot become truth.
34. Thus, the sheer lack of even an iota of material on record, to support the defence of the accused, leads to the irresistible conclusion of the defence of the accused being sham and nothing but a cock and bull story.
35. Therefore, all factors, cumulatively seen, go on to show that the accused has miserably failed to probablize the defence set up by her with respect to the cheques in question amounting to Rs.5 lacs (Ex.CW1/1 and Ex.CW1/2). The presumption of legal liability under Section 118 (a) read with Section 139 of the NI Act has gone unrebutted. The complainant has successfully proved the basic ingredients of the offence under Section 138 of the NI Act.
36. Resultantly, the accused Rekha Devi stands convicted for the offence under Section 138 of the NI Act.
New CC No. 6961/14 Unique case ID No. 4996343/16PAVITRA DEVI VS REKHA DEVI
37. Let the convict be heard on quantum of sentence.
38. Let a digitally signed copy of the Judgment be supplied to the accused, free of cost and copy of the same be placed on record. Digitally signed by PUNEET NAGPAL PUNEET Date:
NAGPAL 2018.07.20
Decided on 20.07.2018 15:54:42
+0530
Announced in open court.
(PUNEET NAGPAL)
MM (NI Act)-01/SW/DWK
New Delhi
New CC No. 6961/14
Unique case ID No. 4996343/16
PAVITRA DEVI VS REKHA DEVI