Delhi District Court
Shriram Transport Finance Co. Ltd vs Yogindra on 5 February, 2024
IN THE COURT OF SH. SNEHIL SHARMA, METROPOLITAN
MAGISTRATE, NI ACT DIGITAL COURT, NORTH EAST
DISTRICT, KARKARDOMA COURT, DELHI
JUDGMENT
SHRIRAM TRANSPORT FINANCE Co. vs YOGENDRA CC NO: 501/2021 P. S. Bhajan Pura U/s 138 NI Act a CNR No. of the case : DLNE020029752021 b Date of institution of the case : 25.08.2021 c Cheque number and dated : 933813 dt. 12.03.2021 d Cheque amount : Rs.1,22,600/-
e Name of the complainant : Shri Ram Transport Finance Co.Ltd.
(through AR Mohit Kumar) Office at Plot no.7, Commercial Sector-5, Rajendra Nagar, Sahibabad, Ghaziabad, UP-201005 f Name of the accused and his : Yogendra s/o Chander Bhan R/o House No.I-585, parentage Mohalla Jawahar Nagar, Loni, Ghaziabad, UP g Offence complained of : 138 NI Act h Plea of accused : Not guilty i Orders reserved on : 30.01.2024 j Final order : Accused Yogendra is Acquitted for offences punishable under sections 138 NI Act.
k Date of judgment : 05.02.2024 CC NO. 501/21 SRTF vs Yogendra Page 1 of 15 Digitally signed by SNEHIL SNEHIL SHARMA SHARMA Date: 2024.02.05 17:09:59 +0530
1. Vide this judgment the present complaint case for an offence punishable U/S.138 of the Negotiable Instruments Act, 1881 (hereinafter "the NI Act") is being decided.
2. It is case of the complainant that complainant is a registered company in the name & style of "Shriram Transport Finance Company Ltd." and is engaged in the business of financing, leasing amongst other business. The accused had approached to the complainant at its branch office for financial assistance of a vehicle bearing no. DL-1M-3560 and on his request the complainant agreed for financial assistance to the accused and a loan and guarantee agreement was executed between the complainant and the accused on 27.09.2016 i.e. loan cum hypothecation agreement bearing no. YMNVR0609240002 and the complainant has given the vehicle loan of Rs. 3,00,000/- to the accused. As per loan agreement dt. 27.09.2016 the accused had agreed to repay the abovesaid loan amount to the complainant in equal monthly instalment. As per statement of loan amount of the accused, an outstanding of Rs. 8,97,486/- existed against the accused, the accused has issued a cheque bearing no.933813 dt. 12.03.2021 for Rs. 1,22,600/- drawn on Punjab National Bank, Loni, Ghaziabad, UP in favour of the complainant for discharge of his liability with assurance that the said cheque will be encashed on its presentation.
3. On the assurance of the accused, the complainant presented the abovesaid cheque for encashment with his bank i.e. Axis Bank Ltd., C- 1/12A, Yamuna Vihar, Delhi-110053 but the said cheque was dishonoured and returned unpaid with remarks "Account Blocked" vide return memo dated 08.04.2021.
CC NO. 501/21 SRTF vs Yogendra Page 2 of 15SNEHIL Digitally signed by SNEHIL SHARMA SHARMA Date: 2024.02.05 17:10:05 +0530
4. The complainant had sent a legal notice dated 05.05.2021 to the accused through his counsel regarding the dishonour of the aforesaid cheque through registered AD & speed post but the accused has neither discharged his liability nor make payment of the cheque amount and therefore, the present complaint is filed by the complainant against the accused for the offence under Section 138 of the NI Act.
5. On being satisfied of the prima facie ingredients of Section 138 of the NI Act, cognizance was taken and summons were directed to be issued against the accused vide order dated 25.08.2021.
6. Accordingly, on 04.06.2022 notice under Section 251 Cr.PC r/w Section 263(g) Cr.P.C was framed and served upon the accused to which he pleaded not guilty and claimed trial. While putting forth his plea of defence, accused admitted his signatures on the cheque in question, however denied the other particulars of the cheque being filled by him and the said cheque was given as security to the complainant. He denied having received the legal demand notice. Accused has further deposed that he had taken the vehicle loan from the complainant company for two Canter TATA separately. One for the amount of Rs. 7 lacs in the year 2015-2016 and another of Rs.2 lacs in the year 2011-2012. he had paid the installments for the said loans and he had repaid around Rs.10,78,000/- to the complainant towards both the loans. He had the statement for the same also. He sold his vehicle bearing no. DL-1GC-1250 for the amount of Rs.60,000/- and he surrendered the other vehicle bearing no. DL-1M-3560 which was sold by the complainant for the amount of Rs.2 lacs. The cheque in question had been given to the complainant as a security cheque signed in blank at the time of taking the loan.
CC NO. 501/21 SRTF vs Yogendra Page 3 of 15 Digitally signed bySNEHIL SNEHIL SHARMA SHARMA Date: 2024.02.05 17:10:10 +0530
7. In Complainant's evidence, the complainant (CW-1) tendered his evidence affidavit in post summoning evidence and relied upon the following documents:
i) Ex. CW1/A :Evidence of complainant by
way of affidavit.
ii) Ex. CW1/1 : Special power of attorney
with authorisation letter
iii) Ex. CW1/2 : Loan statement
iv) Ex. CW1/3 : Cheque & Returning memo
dt.08.04.2021
(admitted in statement U/s. 294 Cr.P.C.)
v) Ex. CW1/4 : Legal demand notice dt.
05.05.2021
(admitted in statement U/s. 294 Cr.P.C.)
vi) Ex. CW1/5 : Postal receipt
8. CW1/AR of complainant was cross examined on behalf of the accused. During cross examination, CW1 has deposed that he had not placed on record any loan agreement as per which accused had taken the loan. Their company had given vehicle loan to the accused. He does not remember the vehicle number. Para no.3 of the complaint is shown to CW1 where it is mentioned that the loan had been given to the accused for vehicle bearing no. DL-1M-3560 and asked whether he has filed any document regarding the vehicle loan for the said vehicle to which CW1 has deposed that they had not placed any document regarding the vehicle loan for the vehicle bearing no. DL-1M-3560. A specific question was put to CW1 whether he had filed any account statement regarding vehicle loan for vehicle bearing no. DL-1M3560 for which CW1 had replied in negative. He does not remember whether they had recovery of the vehicle CC NO. 501/21 SRTF vs Yogendra Page 4 of 15 Digitally signed by SNEHIL SNEHIL SHARMA SHARMA Date: 2024.02.05 17:10:27 +0530 or not. However, he can tell the same by checking his record. Copy of statement of account Ex. CW1/2 is shown to the witness and asked as to when the vehicle bearing no.DL-1M3560 has been recovery from the accused to which witness has stated that it is not so mentioned in Ex. CW1/2. CW1 admitted that he had not placed on record any document regarding the alleged loan for vehicle no. DL-1M-3560. He had admitted that their company has also given insurance policy. Their company had done the insurance for the vehicle bearing no. DL-1M-3560. He does not remember about the value of vehicle on insurance and amount and duration of the said policy. He had denied all the suggestions put to him during cross examination.
9. The accused was then examined under Section 313 Cr.P.C., 1973 wherein all the incriminating evidence were put to the accused and accused has stated that he had taken the vehicle loan of Rs.7,00,000/- from the complainant. He has further deposed that he had given four blank and signed cheques to the complainant and they had themselves filled the cheques without any information to him. He has admitted that cheque bears his signature but other details are not filled by him. He had denied re ceiving legal notice. He has further stated that they had a taken a loan of Rs. 7 lacs for 36 months and has repaid around 21 EMIs of Rs. 22,000/-. He had returned them the vehicle and requested them to close the loan as the value of vehicle was more than the amount remained. Complainant has sold the vehicle in Rs. 2.25 lacs. The value of the vehicle was Rs. 9.5 lacs in the insurance. Complainant has misused his cheques. Accused has opted to lead defence evidence but no defence evidence was led. Accordingly, DE was closed and matter is listed for final argments.
CC NO. 501/21 SRTF vs Yogendra Page 5 of 15 Digitally signedSNEHIL by SNEHIL SHARMA SHARMA Date: 2024.02.05 17:10:32 +0530
10. It has been argued by Ld. Counsel for the complainant that case of the complainant is proved and cheque is also in the favour of the complainant, therefore, accused must be convicted and amount should be recovered. On the other hand, Ld. Counsel for accused has argued that accused has been falsely implicated in this case and that complainant has not been able to prove its case beyond reasonable doubt against the accused.
11. I have heard ld counsel for the complainant and Ld. Defence counsel for accused & considered the respective arguments as well as gone through case file very carefully.
12. The essential ingredients in order to attract Sec. 138 of NI Act, 1881 are as following:
i) The cheque for an amount is issued by the drawer to the payee/complainant on a bank account being maintained by him.
ii) The said cheque is issued for the discharge, in whole or in part of any debt or liability.
iii) The cheque is returned by the bank unpaid on account of insufficient amount to honour the cheque or it exceeds the amount arranged to be paid from that account by an agreement made with the bank.
iv) The cheque is presented within 3 months from the date on which it is drawn or within the period of its validity.
v) within 30 days a legal demand notice is issued by the payee or the holder in due course to the drawer of the cheque on receipt of information by him from the bank regarding the dishonour of the cheque.CC NO. 501/21 SRTF vs Yogendra Page 6 of 15 Digitally signed by
SNEHIL SNEHIL SHARMA SHARMA Date: 2024.02.05 17:10:39 +0530
vi) The drawer of the said cheque fails to make payment of the said amount of the money as demanded in the legal demand notice to the payee or the holder in due course within 15 days of the reciept of said notice.
vii) The debt or other liability against which the cheque was issued is legally enforceable.
13. Before discussing the facts, undersigned deems it necessary to discuss certain legal propositions i.e. it is settled proposition of criminal law that prosecution is supposed to prove its case on judicial file beyond reasonable doubt by leading reliable, cogent and convincing evidence. Further, it is a settled proposition of criminal law that in order to prove its case on judicial file, prosecution is supposed to stand on its own legs and it cannot derive any benefit whatsoever from the weaknesses, if any, in the defence of the accused. Further, it is a settled proposition of criminal law that burden of proof of the version of the prosecution in a criminal trial throughout the case is on the prosecution and it never shifts to the accused. Also it is a settled proposition of criminal law that the accused is entitled to the benefit of every reasonable doubt in the prosecution story and such doubt entitles the accused to acquittal.
14. In this case, accused has admitted the fact of dishonour of the cheque in question, hence, essential ingredients (iii) and (iv) stand proved by the complainant. Accused has further admitted the fact of receiving the legal demand notice sent to him by complainant during his statement recorded under section 294 Cr.P.C. However, denied the same in legal notice as well as in statement of accused. As the accused has appeared before the court and matter came in his knowledge and documents were CC NO. 501/21 SRTF vs Yogendra Page 7 of 15 Digitally signed SNEHIL by SNEHIL SHARMA SHARMA Date: 2024.02.05 17:10:45 +0530 supplied to him after summoning, still accused chose not to reply back the legal notice or to pay the due amount. So it can be rightly said that he has knowledge of the facts stated in the legal notice. Hence, essential ingredients (v) and (vi) also stand proved.
15. In the landmark decision of Hon'ble Supreme Court of India in matter of "C. C. Alavi Haji Vs. Palapetty Mohd. & Anr." reported in (2007) 6 Supreme Court Cases 555 held that as under:-
"Any drawer who claims that he did not received the notice sent by post, can, within 15 days of receipt of summons from the court in respect of complaint Under Section 138 of the Act, make the payment of the cheque amount and submit to the court that he had made the payment within 15 days of the receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complainant is liable to be rejected. A person who does not pay within 15 days of receipt of summons from the court along-with the copy of complaint Under Section 138 of the Act, can not 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 G. C. Act and 114 of the Evidence Act."
16. Now coming to the remaining core ingredients (ii) and (vii) of Section 138 of NI Act as discussed above and the real issue of controversy herein i.e. whether the cheque in question was issued in discharge of any debt or liability, whole or in part and whether the same is a legally enforceable debt.
17. In this case, the statutory presumptions under section 118(a) and 139 would be raised in favour of the complainant. Since, the accused has CC NO. 501/21 SRTF vs Yogendra Page 8 of 15 Digitally signed by SNEHIL SNEHIL SHARMA SHARMA Date: 2024.02.05 17:10:50 +0530 admitted the execution of impugned cheque and signatures on cheque in question, the aforementioned statutory presumptions would be raised in favour of the complainant regarding the fact that the impugned cheques have been drawn for consideration and issued by the accused in discharge of legally enforceable debt.
18. It has been held by a three-judge bench of the Hon'ble Apex Court in the case of Rangappa vs. Sri Mohan (2010) 11 SCC 441 that the presumption contemplated under Section 139 of NI Act includes the presumption of existence of a legally enforceable debt. Once the presumption is raised, it is for the accused to rebut the same by establishing a probable defence. The principles pertaining to the presumptions and the onus of proof were recently summarized by the Hon'ble Apex Court in Basalingappa vs. Mudibasappa (2019) 5 SCC 418 as under:
"25. We having noticed the ratio laid down by this Court in the above cases on Section 118(a) and 139, we now summarize the principles enumerated by this Court in the following manner:
25.1. Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability. 25.2. The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
25.3. To rebut the presumption, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to CC NO. 501/21 SRTF vs Yogendra Page 9 of 15 Digitally signed by SNEHIL SNEHIL SHARMA SHARMA Date: 2024.02.05 17:10:56 +0530 raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely. 25.4. That it is not necessary for the accused to come in the witness box in support of his defence. Section 139 imposed an evidentiary burden and not a persuasive burden. 25.5. It is not necessary for the accused to come in the witness box to support his defence."
It is explicit in the NI Act that the said presumption shall remain until contrary is proved.
19. With respect to ingredients (i), in this case, it is not disputed and duly admitted by the accused that the cheque in question bears his signatures, however he denies other particulars written by him and also disputes that the same was not given to the complainant later on and he does not owe liability towards the complainant. Here, the accused has challenged the first ingredient that cheque was never given to the complainant on the date deposed by the complainant and was never intended to be used by the complainant as it is used in this case. Therefore, implied authority to holder fill up the particular is challenged.
20. It is argued by ld counsel for the accused that the complainant has not provided/arranged this much loan to him and that is why no cheque is issued to him. Perusal of record shows that complainant has not provided the loan agreement between the complainant and the accused and in absence of loan agreement it is impossible to ascertain that whether the liability as mentioned by the complainant is correct. As the loan agreement is not filed by the complainant despite having been original with him, the terms and conditions of the loan cannot read and decided. In the absence of loan agreement undersigned cannot reach to the conclusion that what was CC NO. 501/21 SRTF vs Yogendra Page 10 of 15 Digitally signed by SNEHIL SNEHIL SHARMA SHARMA Date: 2024.02.05 17:11:06 +0530 the vehicle and Model, what was loan amount given to the accused, what was the time period, what was the EMI, what was the penality, what was the interest etc.
21. Moreover, it is found from evidence affidavit of the complanant that complainant himself has mentioned that on 27.09.2016, accused approached the complainant for the loan and complainant agreed to sanction the same and executed an agreement and disbursed Rs. 3 lacs into the account of the accused, however loan statement Ex. CW1/2 does not show any Rs.3 lacs transferred on 27.09.2016 to the accused. Moreover, the accused has not admitted receiving Rs. 3 lacs but admits that two other loans were issued by the complainant. Therefore, the fact regarding transfer of the money is not proved by the complainant.
22. Furthermore, it is found that complainant deposed that total outstanding of the accused Rs. 8,97,486/- but did not depose that how much installment were paid by the accused and in absence of the agreement between them, how the abovesaid amount is made by the complainant cannot be checked. It is also deposed by CW1 that accused had issued a cheque for Rs. 1,22,600/- in discharge of his liability, however complainant has not deposed that whether the cheque was issued as part liability or in discharge of complete liability or as a settlement amount etc. Even complainant has failed to depose that on which date this cheque was issued by the accused to the complainant. In addition to this, complainant deposed that after dishonor of the cheque he approached the accused, however the date of approaching the accused is not deposed by the complainant.
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23. If we believe at the version of the complainant then also it is not explained by the complainant that for which loan out of two, accused has given this cheque and when. It is also not explained whether the cheque in question was given on 12.03.2021 or it was a post-dated cheque. Moreover, it is strange that the liability of Rs. 8,97,486/- is shown on 09.05.2021 and cheque was given on 12.03.2021 and returned on 08.04.2021.
24. Subsequently, it is also found from the version of the accused that the vehicle were surrendered by him to the complainant and complainant has sold the same for more than Rs. 2Lacs but during the cross examination CW1 deposed that he does not remember whether they had recovered the vehicle and he correctly admitted that no document is placed for recovery of the vehicle and also regarding the alleged loan for the vehicle. Even the complainant has not mentioned anything about the acquiring and selling of the vehicle. It is also found from the version of the accused that the value of the vehicle in the insurance was more than Rs. 9.5 lacs but complainant sold the same deliberately in Rs.2 lacs. Same fact was also not challenged and rebutted by the complainant as CW1 deposed in cross examination that he does not remember the value of vehicle in insurance. As the accused has submitted that he has taken two loans from the complainant, it was complainant to show that for which vehicle he has filed this case but CW1 deposed that he does not remember the vehicle number. Even the make of vehicle is also not deposed by CW1. If the vehicle was hypothecated in the name of complainant then complainant should have placed ownership documents atleast.
25. No explanation has been given by the complainant that if amount is transferred through bank then why bank transfer is not placed on record.
CC NO. 501/21 SRTF vs Yogendra Page 12 of 15 Digitally signed bySNEHIL SNEHIL SHARMA SHARMA Date: 2024.02.05 17:11:21 +0530 Mere verbal submission of CW1 is not enough evidence in the eyes of law without supporting documents. This makes story of complainant highly improbable. Thus, evidence of the complainant does not inspire confidence due to these severe contradictions.
26. On the aspects of preponderance of probabilities, the accused has to bring on record such facts and such circumstances which may lead the court to conclude either that the consideration did not exist or that its nonexistence was so probable that a prudent man would, under the circumstances of the case, act upon the plea that the consideration did not exist. As per the facts and circumstances of this case accused has led cogent and believable evidence to support his defence.
27. The Hon'ble Supreme Court in the case of M.S. Narayana Menon @ Mani v. State of Kerala (2006) 6 SCC 39 has observed as under, "32. A Division Bench of this Court in Bharat Barrel & Drum Manufacturing Company v. Amin Chand Payrelal [(1999) 3 SCC 35] albeit in a civil case laid down the law in the following terms:
"Upon consideration of various judgments as noted hereinabove, the position of law which emerges is that once execution of the promissory note is admitted, the presumption under Section 118(a) would arise that it is supported by a consideration. Such a presumption is rebuttable. The defendant can prove the non-existence of a consideration by raising a probable defence. If the defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the plaintiff who will be obliged to prove it as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument. The burden CC NO. 501/21 SRTF vs Yogendra Page 13 of 15 Digitally signed by SNEHIL SNEHIL SHARMA SHARMA Date: 2024.02.05 17:11:26 +0530 upon the defendant of proving the non- existence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies."
28. The primary burden upon the accused was to punch holes in the version of the complainant in order to rebut the presumptions and the standard of proof required from him was preponderance of probabilities; and the accused has been able to do the same by bringing out the inconsistencies and contradcitions in the version put forward by the complainant.
29. Hence, doubt is raised upon the story deposed by the complainant. The contradictions and omissions in the evidence of complainant could be removed by bringing witness or any audio/video recording or any documentary evidence or any chating or by showing the withdrawal from the bank or by disclosing the same in evidence etc. Non production of any money lending evidence by the complainant to accused is also suggesting adverse inference against him and giving extra leg to the defence of the accused that he has no such liability towards the complainant and complainant has misused the security cheque. As per the above discussion, it can not be said that the cheque was drawn by him in favour of the complainant. Therefore, the essential ingredient (i) as discussed in the preceding paragraph does not stand fulfilled.
30. As observed by the Supreme Court in State of Rajasthan v. Kalki (1981) 2 SCC 752) normal discrepancies in evidence are those which are due to normal errors of observation, normal errors of memory due to lapse of time, due to mental disposition such as shock and horror at the time of occurrence and those are always there however honest and CC NO. 501/21 SRTF vs Yogendra Page 14 of 15 Digitally signed by SNEHIL SNEHIL SHARMA SHARMA Date: 2024.02.05 17:11:30 +0530 truthful a witness be. Material discrepancies are those which are not normal and not expected of a normal person. Courts have to label the category to which a discrepancy may be categorized. While normal discrepancies do not corrode the credibility of a party;s case, material discrepancies do so. Here the above discussed discrepancies are material one and fatal to the case.
31. Keeping in view the facts and circumstances of the present case and the settled position of law in this regard, the ingredients mentioned at (ii) & (vii) of Para No. 12 of this judgment are not fulfilled. These circumstances attract benefit of doubt in favour of the accused.
32. In my view, the complainant has failed to prove that the accused had issued the cheque in question in his favour for discharge of the legally enforceable liability and has failed to prove his case against the accused for the offence under Sec. 138 Negotiable Instruments Act. Resultantly, the accused Yogendra is, thus, stands acquitted for the said offence.
Digitally signed by SNEHIL SNEHIL SHARMA SHARMA Date: 2024.02.05 17:11:35 +0530 Announced in Open Court (SNEHIL SHARMA) today on 05.02.2024 MM (NI Act) Digital Court, NORTH EAST,KARKARDOOMA, DELHI CC NO. 501/21 SRTF vs Yogendra Page 15 of 15