Delhi District Court
Moongipa Capital Finance Ltd. vs . Vishal Sharma Cc No. 4994211/16 Page ... on 21 August, 2018
IN THE COURT OF MR. MRIDUL GUPTA, METROPOLITAN MAGISTRATE,
SOUTH-WEST, DWARKA, DELHI
In Re:
CNR No. DLSW02-009185-2016
CC No. 4994211/16
Moongipa Capital Finance Ltd.
Regd. Office at 18/14,
W.E.A. Pusa Lane, Karol Bagh,
New Delhi - 110005
Through its Manager/Authorised Representative
Sh. Vimal Kumar Mehta ............Complainant
Versus
Vishal Sharma
S/o Sh. K.N. Sharma
R/o H No. 295, SFS,
Ashok Vihar, Phase - IV
New Delhi-52. .............Accused
(1) Offence complained of or
proved : 138 N.I. Act
(2) Plea of accused : Pleaded not guilty
(3) Date of institution of case : 30.04.2016
(4) Date of conclusion of arguments: 28.07.2018
(5) Date of Final Order : 21.08.2018
(6) Final Order : Convicted
Moongipa Capital Finance Ltd. Vs. Vishal Sharma CC No. 4994211/16 Page no. 1 of 12
JUDGMENT
1. Vide this judgment I shall dispose of the complaint filed by the complainant under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the 'Act ').
2. Brief facts relevant for the decision of the case are as under:-
The complainant company alleges that it is an NBFC registered with RBI as such, engaged in business of finance and loans. It is alleged that the accused Vishal Sharma stood as guarantor of one Mr. Bharat Bhushan Thakur for loan of Rs. 1,50,000/- taken by the latter from complainant company as per loan agreement dated 12.03.2015. The loan was to be repaid in 18 EMIs of Rs. 13,100/- each. However as on 03.03.2016, the borrower Mr. Bharat Bhushan Thakur, was in debt of a sum of Rs. 1,94,184.81 towards the complainant company and had failed to pay the outstanding liability. Thus accused as guarantor for the said loan was also sent final demand notice dated 03.03.2016 for payment of outstanding dues. Thereafter in discharge of his liability as guarantor for the loan, accused issued one cheque of Rs. 1,87,000/- i.e. cheque in question bearing no. 459620 dated 14.03.2016 drawn on ICICI Bank, Karol Bagh, Delhi to complainant in satisfaction of loan, with an assurance of its encashment. The complainant presented the cheque in his account maintained at Jammu and Kashmir Bank, Sector 7, Dwarka, Delhi, which was returned with the remarks "Not Sufficient" vide bank return memo dated 17.03.2016. Thereafter, complainant served a legal notice dated 18.03.2016 upon the accused through his counsel demanding the said amount. Despite service of aforesaid notice, neither any reply was sent nor the money was repaid by the accused. Thereafter, complainant has filed the present complaint case with the submission that accused be summoned, tried and punished according to law.
3. In its pre-summoning evidence, Sh. Vimal Kumar Mehta, Manager and AR of complainant company examined himself on affidavit Ex. CW-1/A. He reiterated the contents of complaint and placed on record, copy of complainant company's Moongipa Capital Finance Ltd. Vs. Vishal Sharma CC No. 4994211/16 Page no. 2 of 12 Memorandum and Articles of Association and registration certificate with ROC as Ex. CW-1/1, certificate of registration as NBFC with RBI as Ex. CW-1/2 (OSR), board resolution and SPA in favor of AR of complainant as Ex. CW-1/3 and Ex. CW-1/4, loan agreement dated 12.03.2015 as Ex. CW-1/5 (OSR), loan recall cum final demand notice as Ex. CW-1/6, speed post receipt and tracking report as Ex. CW-1/6A (colly.), statement of account of borrower of loan as Ex. CW-1/7 and Ex. CW-1/7A, certificate u/s 65B of Indian Evidence Act, as Ex CW-1/8, cheque of Rs. 1,87,000/- i.e. cheque in question bearing no. 459620 dated 14.03.2016 drawn on ICICI Bank, Karol Bagh as Ex. CW-1/9, cheque returning memo dated 17.03.2016 as Ex. CW-1/10, legal demand notice dated 18.03.2016 as Ex. CW- 1/11, receipts of speed post and courier as Ex. CW-1/12 and Ex. CW-1/13 and tracking report as Mark-A.
4. Upon appreciation of pre-summoning evidence, accused was summoned for an offence punishable under Section 138 of the Act and notice under Section 251 Cr.P.C. for this offence was framed upon accused on 19.09.2015 to which he pleaded not guilty and claimed trial. He admitted his signature on the cheque in question but stated that the contents were not filled in by him. He admitted that he stood as guarantor for loan of Rs. 1,50,000/- taken by one Sh. Bharat Bhushan Thakur and that he signed the loan agreement dated 12.03.2015. He admitted receipt of legal notice.
5. The accused moved an application to cross-examine the AR of complainant. AR of the complainant as CW-1 was duly cross examined by the accused. No other witness was produced by the complainant company and he closed its evidence by giving a separate statement to this effect. Thereafter, statement of accused under Section 313 Cr.P.C. was recorded in which all the incriminating evidence were put to him to which accused stated that he had not issued the cheque in discharge of loan liability. He stated that the cheque is signed by him, however all the remaining details in the cheque have not been filled by him. He stated that he had given two blank signed cheques and some blank signed papers to Sh. Bharat Bhushan Thakur for friendly loan taken from Moongipa Capital Finance Ltd. Vs. Vishal Sharma CC No. 4994211/16 Page no. 3 of 12 him in February, 2015. He stated that one of the said cheques has been misused by Sh. Bharat Bhushan Thakur and handed over to the complainant without his consent. He denied receipt of the loan recall notice. He denied receipt of the legal notice, however admitted the address mentioned in it to be his correct residential address.
6. Accused preferred to lead evidence in his defence. However, despite grant of several opportunities by court, accused did not take steps for calling any defence witness and vide order of this court, the defence evidence was closed.
7. Thereafter, matter was listed for final arguments. It was argued by the AR of the complainant that this is a fit case for conviction of the accused as all the essential ingredients of Section 138 of the Act read with Section 139 of the Act have been fulfilled and that the same has been aptly demonstrated by the complainant before the court. It was argued that accused admitted his signatures on the cheque in his plea of defence recorded at the time of framing of notice under Section 251 Cr.P.C as well as in his statement U/s 313 Cr.P.C. It was argued that accused failed to raise the probable defence to disprove the case of complainant and to rebut the presumption under Section 139 NI Act. Therefore, accused be convicted for the offence under Section 138 of the Act.
8. Per contra, on behalf of accused, the submissions made by him in his plea of defence at the time of framing of notice under Section 251 Cr.P.C and in his statement under Section 313 Cr.P.C. were reiterated. He argued that evidence of complainant suffered from material lapses and was not sufficient to establish the case against accused. He submitted that complainant has failed to prove its case beyond reasonable doubt and accused is entitled to be acquitted of offence u/s 138 of the Act.
9. I have perused the entire record as well as evidence led by the complainant as well as by the accused.
Moongipa Capital Finance Ltd. Vs. Vishal Sharma CC No. 4994211/16 Page no. 4 of 12
10. Before appreciating the facts of the case in detail for the purpose of decision, let relevant position of law be discussed first:-
For the offence under Section 138 of the Act to be made out against the accused, the complainant must prove the following points, that:-
1. the accused issued a cheque on account maintained by him with a bank.
2. the said cheque had been issued in discharge, in whole or in part, of any legal debt or other liability.
3. the said cheque has been presented to the bank within a period of three months from the date of cheque or within the period of its validity.
4. the aforesaid cheque, when presented for encashment, was returned unpaid/dishonoured.
5. the payee of the cheque issued a legal notice of demand to the drawer within 30 days from the receipt of information by him from the bank regarding the return of the cheque.
6. the drawer of the cheque failed to make the payment within 15 days of the receipt of aforesaid legal notice of demand.
11. The Act raises two presumptions in favour of the holder of the cheque i.e. Complainant in the present case; firstly, in regard to the passing of consideration as contained in Section 118 (a) and secondly, a presumption that the holder of cheque receiving the same of the nature referred to in Section 139 discharged in whole or in part any debt or other liability.
Section 118 of the N.I Act provides :
"Presumptions as to negotiable instruments: Until the contrary is proved, the following presumptions shall be made: (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;"
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".
Moongipa Capital Finance Ltd. Vs. Vishal Sharma CC No. 4994211/16 Page no. 5 of 12
12. For the offence under Section 138 of the Act, the presumptions under Sections 118(a) and 139 have to be compulsory raised as soon as execution of cheque by accused is admitted or proved by the complainant and thereafter burden is shifted to accused to prove otherwise. These presumptions shall be rebutted only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability etc. A presumption is not in itself evidence but only makes a prima facie case for a party for whose benefit it exists. Presumptions both under Sections 118 and 139 are rebuttable in nature. Same was held by the Hon'ble Supreme Court of India in Hiten P. Dalal v. Bratindranath Banerjee [(2001) 6 SCC 16].
13. In the present case, accused has admitted his signatures on the cheque in question as well as filling in all the details except the name of the payee, in the notice U/s 251 Cr.P.C. He did not deny his signature on the cheque either in cross-examination of complainant, or his statement U/s 313 Cr.P.C and also in defence evidence. Reference can be made to Judgment of Apex Court in Rangappa v. Mohan, AIR 2010 SC 1898,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 Section 139 of the Negotiable Instruments Act has to be raised by the Court in favour of the complainant."
Also in the case of K. Bhaskaran Vs. Sankaran Vaidhyan Balan 1999 (4) RCR (Criminal) 309, it has been held by the Hon'ble Supreme Court as under:
"As the signature in the cheque is admitted to be that of the accused, the presumption envisaged in Section 118 of the Act can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears. Section 139 of the Act enjoins on the court to presume that the holder of the cheque received it for the discharge of any debt or liability."
It has been held in M/s. Kumar Exports v. M/s. Sharma Carpets, [2009 A.I.R. (SC) 1518] that the accused may rebut these presumptions by leading direct evidence and in some and exceptional cases, from the case set out by the Moongipa Capital Finance Ltd. Vs. Vishal Sharma CC No. 4994211/16 Page no. 6 of 12 complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial. Further, the burden may be discharged by the accused by showing preponderance of probabilities and the onus on the accused is not as heavy as it is on the complainant to prove his case. In light of aforestated legal position, let us carry out a scrutiny of the evidence led at the trial.
14. The complainant company by way of an affidavit led its own evidence testifying that cheque was issued to it by the accused as guarantor of the loan taken by Sh. Bharat Bhushan Thakur, in discharge of loan liability. The relevant documents from Ex. CW-1/1 to Ex. CW-1/13 and Mark-A, as detailed hereinabove were placed on record. The account statements of the borrower were Ex. CW-1/7 and Ex. CW-1/7A, showing computation of outstanding dues of Rs. 1,94,184/-, as against the loan, and the loan recall notice Ex. CW-1/6, regarding the same was sent to the borrower as well as the guarantor i.e. the accused.
15. It is admitted that loan of Rs. 1,50,000/- was disbursed to Sh. Bharat Bhushan Thakur. In reply to notice under section 251 Cr.P.C. it was admitted that accused signed on the loan agreement dated 12.03.2015 as the guarantor of the borrower for the loan in question, though later on accused stated that his signatures had been obtained on some blank documents. It is also admitted by the accused that the cheque in question was signed by him, however the particulars of the same are not filled by him. It is also proved that the cheque in question was presented within six months of date of issuance. It is further proved that on presentation the cheque in question, it returned dishonored vide return memo for the reasons "Not Sufficient". In reply to notice under section 251 Cr.P.C., it was admitted by the accused that he received the legal demand notice Ex. CW1/11 and that he also replied to the same verbally upon visiting office of complainant, though later on accused denied the same. Further, the authority of the AR was not disputed by the accused.
16. In the present case, firstly it is necessary to examine the defence taken by Moongipa Capital Finance Ltd. Vs. Vishal Sharma CC No. 4994211/16 Page no. 7 of 12 the accused at different stages of trial. At the stage of answer to notice u/s 251 Cr.P.C, accused admitted the case as aforesaid. The cross-examination of AR of complainant was also conducted on these lines whereby suggestions that cheque in question was given as blank signed security cheque by accused at time of signing the loan agreement as guarantor were denied by AR of complainant.
17. However in the application under section 145(2) of the Act, the accused took a different stand and averred that he had never been to office of complainant and actually he had taken a friendly loan of Rs. 15,000/- from Sh. Bharat Bhushan Thakur in February, 2015 for which he gave blank signed cheques including cheque in question and blank signed documents to said Bharat Bhushan Thakur. Accused averred that he had repaid the loan amount of Rs. 15,000/- in April 2015, however the cheques were not returned to him as they were stated to be misplaced. He stated that one of the said cheques and the blank signed documents have been misused by complainant in connivance with Sh. Bharat Bhushan Thakur. In his statement under section 313 Cr.PC, the accused adopted the same defence substantially.
18. However the accused did not, either through cross-examination of complainant or defence evidence, place any support to either of his versions. The decision of Hon'ble High Court of Delhi in V.S.Yadav vs Reena, Crml. Appeal No. 1136/2010, date of decision 21.09.2010, can be referred to here, wherein it was held:
"It must be borne in mind that the statement of accused under Section 281 Cr. P.C. or under Section 313 Cr. P.C. is not the evidence of the accused and it cannot be read as part of evidence. The accused has an option to examine himself as a witness. Where the accused does not examine himself as a witness, his statement under Section 281 Cr. P.C. or 313 Cr. P.C. cannot be read as evidence of the accused and it has to be looked into only as an explanation of the incriminating circumstance and not as evidence. There is no presumption of law that explanation given by the accused was truthful. In the present case, the accused in his statement stated that he had given cheques as security. If the accused wanted to prove this, he was supposed to appear in the witness box and testify and get himself subjected to cross examination. His explanation that he had the cheques as security Moongipa Capital Finance Ltd. Vs. Vishal Sharma CC No. 4994211/16 Page no. 8 of 12 for taking loan from the complainant but no loan was given should not have been considered by the Trial Court as his evidence and this was liable to be rejected since the accused did not appear in the witness box to dispel the presumption that the cheques were issued as security. Mere suggestion to the witness that cheques were issued as security or mere explanation given in the statement of accused under Section 281 Cr. P.C., that the cheques were issued as security, does not amount to proof."
19. A simple bald averment of misuse of cheque by complainant in the application under section 145(2) of the Act and in statement under section 313 Cr.P.C., in absence of any material to substantiate the same, is not sufficient to dislodge the statutory presumptions. Moreover, if cheque was given as blank signed security cheque in lieu of loan take by accused from Sh. Bharat Bhushan Thakur and was not returned upon repayment of loan, there is no explanation or evidence as to any stop payment instructions of the cheque, issued by accused to his bank. The cheque in question has been dishonored for reason 'Not Suffucient'(Ex. CW-1/10) and not for any other reason. Moreover if the cheque was misused by complainant in connivance with Sh. Bharat Bhushan Thakur, there is no explanation or evidence as to any complaint or case filed by accused either against the complainant or said Bharat Bhushan Thakur for misuse of cheque. Hence the plea of blank cheque being given which was misused is not credible.
20. As far as the other line of defence i.e. the cheque was given as blank signed security cheque by accused at time of signing the loan agreement as guarantor. Firstly, even if it is considered that the accused gave a blank signed cheque to the complainant, once accused has admitted his signatures on the cheque he cannot escape his liability on the ground that the particulars have not been filled in by him. It has been clearly laid down in Section 20 of Negotiable Instruments Act 1881, that where one person signs and delivers to another a Negotiable Instrument either wholly blank or having written thereon an incomplete negotiable instrument, he thereby gives, "prima facie authority to the holder thereof to make or complete, as the case maybe, upon it a negotiable instrument".
Moongipa Capital Finance Ltd. Vs. Vishal Sharma CC No. 4994211/16 Page no. 9 of 12 Same was also endorsed in case of Moideen v. Johny 2006 (2) DCR 421. In the case of Satish Jayantilal Shah v. Pankaj Mashruwala and Anr. 1996 Cri. L. J. 3099, it has been held that:
"no law provides that in case of any negotiable instruments entire body has to be written by maker or drawer only."
Thus, the accused can not dispute the contents of the cheque in question.
21. The AR of complainant in his cross-examination admitted that no compromise/agreement could materialize with the borrower Sh. Bharat Bhushan Thakur and that no legal proceedings were initiated against him for non-payment of loan. At this stage, it is relevant to have a glance at some of the provisions of Indian Contract Act, 1872. Section 128 of the Contract Act provides that liability of the surety is co-extensive that of the principal debtor, unless it is otherwise provide by the contract. Further, section 137 of the Contract Act provides that mere forbearance of the part of creditor to sue the principal debtor or to enforce any other remedy against him does not discharge the surety. Moreover the terms of the loan agreement dt. 12.03.2015, Ex. CW-1/5 (OSR) also state in clause 15 that in event of non-payment of dues by borrower, the same shall be payable by the guarantor. Thus the accused cannot escape his liability on the ground that the amount due under the loan could not be recovered from the principal borrower. The account statement of the borrower Ex. CW-1/7 and Ex. CW-1/7A, showing the pending dues of Rs. 1,94,184/- against the loan, which amount was also specified in loan recall notice sent to accused, was denied as incorrect by the accused in statement under section 313 Cr.P.C. However neither was the borrower Bharat Bhushan Thakur examined as witness nor was any other evidence adduced by accused to dispute or discredit the contents of the same.
22. The accused has also admitted in the notice U/s 251 Cr.P.C that legal demand notice under section 138 of the Act was received by him and he verbally replied the same when he visited office of complainant. In his statement U/s 313 Cr.P.C also accused admitted that the address mentioned in the legal notice is his Moongipa Capital Finance Ltd. Vs. Vishal Sharma CC No. 4994211/16 Page no. 10 of 12 correct residential address. It is also worth noting that the address of the accused as mentioned in legal demand notice is the same address as that in notice under section 251 Cr.P.C., and statement of accused under section 313 Cr.P.C, and his bail bonds i.e. H No. 295, SFS, Ashok Vihar, Phase - IV, New Delhi-52. Moreover the accused has not brought on record any evidence to show that he was not residing at above address at time of legal notice. The above shows that legal notice was sent at correct address of accused. Moreover the loan recall notice Ex. CW-1/6 stating outstanding dues of Rs. 1,94,184/- as against the loan, was also sent on the same address. Once the notices are proved to be sent by post to correct address of accused then the presumption u/s 27 of General Clauses Act, 1897 arises and it shall be presumed unless proved contrary, that the notices sent to address of accused were delivered to him. In M/s Darbar Exports and Ors. Vs. Bank of India, 2003 (2) SCC (NI) 132 (Delhi), the court held that a presumption of service of notice is to be drawn where the notice is sent through registered post as well as UPC on correct address. In the light of the same the legal notice is deemed to have been served upon the accused. The accused has failed to adduce any evidence to rebut the presumption of due service. As such, the legal notice stood served upon the accused but no payment was made despite the service nor any reply sent to the same. In Rangappa v. Mohan (supra), the Apex Court held:
"Furthermore, the very fact that the accused had failed to reply to the statutory notice under Section 138 of the Act leads to the inference that there was merit in the complainant's version."
The decisions in Santosh Mittal v. Sudha Dayal, 2014 (8) AD (Delhi) 268, and G.L. Sharma v. Hemant Kishor 2015 (2) AD (Delhi) 340, are also to the same effect.
23. Moreover as per the dicta of Apex Court in C.C. Alavi Haji vs Palapetty Muhammed & Anr, 2007 Cr. L.J. 3214, If the accused did not receive the legal notice, he could have made payment of the cheque amount within 15 days of receipt of summons from this court and could have prayed for rejection of the complaint, but this course of action has not been adopted by accused. Hence the Moongipa Capital Finance Ltd. Vs. Vishal Sharma CC No. 4994211/16 Page no. 11 of 12 defence of non-service of legal notice is without substance.
24. In view of the above, this court is of the considered opinion that the accused took varying stands of defence at different stages of trial, however could not raise a probable defence. The accused was not able to contest the existence of a legally enforceable debt or liability. The complaint disclosed the existence of a legally enforceable debt or liability vide the cheque in question, retun memo, legal notice and other documents brought on record. However, accused failed to rebut the presumption in favour of complainant either on the basis of other material available on record or by adducing any defence evidence. There is sufficient material on record to conclude that complainant has successfully proved his case beyond reasonable doubt.
25. Accordingly, the accused is convicted for the offence under Section 138 of Negotiable Instruments Act, 1881.
26. Let the convict be heard on quantum of sentence.
27. Copy of Judgment be supplied to the convict free of cost.
Digitally signed by MRIDUL MRIDUL GUPTA
GUPTA Date: 2018.08.21
15:37:32 +0530
ANNOUNCED IN THE OPEN COURT (MRIDUL GUPTA)
TODAY i.e. 21stAugust 2018 METROPOLITAN MAGISTRATE
DWARKA DISTRICT COURTS/ DELHI
Moongipa Capital Finance Ltd. Vs. Vishal Sharma CC No. 4994211/16 Page no. 12 of 12