Delhi District Court
Cc No. 12045/18 Abul Faiz Azm vs Saleem Ahmad Khan Page No. 1/16 on 25 March, 2023
IN THE COURT OF ANKIT MITTAL,
METROPOLITAN MAGISTRATE - 04, N. I. ACT,
SOUTHEAST DISTRICT, SAKET DISTRICT COURTS, DELHI.
JUDGMENT
Abul Faiz Azm S/o Late Sh. Abul Khair, R/o 274B, 3rd Floor, Murtaza Apartment, Jamia Nagar, Okhla, New Delhi110025 ..............Complainant Versus Mr. Saleem Ahmad Khan S/o Mr. Naim Ahmed Khan R/o D12, Sector9, Jasola Vihar, New Delhi110025.
..................Accused PS - Jamia Nagar Under Section 138 of N. I. Act, 1881 CNR No. DLSE020407702018
a) Sl. No. of the case : CT No. 12045/2018
b) Date of filing of complaint : 03.12.2018
c) Name of the complainant : Abul Faiz Azm S/o Late Sh. Abul Khair, R/o 274B, 3rd Floor, Murtaza Apartment, Jamia Nagar, Okhla, New Delhi110025
d) Name of the accused person(s) : Mr. Saleem Ahmad Khan S/o Mr. Naim Ahmed Khan R/o D12, Sector9, Jasola Vihar, New Delhi110025.
CC No. 12045/18 Abul Faiz Azm Vs Saleem Ahmad Khan Page No. 1/16 e) Offence complained of : Under Section 138 of N. I. Act, 1881 f) Plea of accused : Pleaded not guilty g) Final order : Convicted. h) Date of such order : 25.03.2023 BRIEF STATEMENT OF THE REASONS FOR DECISION :
1. Vide this judgment, this Court shall dispose off complaint for offence punishable under Section 138 of The Negotiable Instruments Act, 1881 filed by the complainant Abu Faiz Azm. In gist, it is alleged in complaint that accused has approached the complainant and explained him an investment scheme in a property bearing No.293, measuring 135 sq. yds. area approx situated at Main Bazar, Okhla, Jamia Nagar, New Delhi110025 and further lured him of good remuneration if he invests in the abovesaid property. It is further alleged in the complaint that complainant had invested Rs.10,00,000/ in the abovesaid property and an agreement dated 03.09.2016 was executed between the parties mentioning that complainant had invested Rs.10,00,000/ to the accused through cheque No.675585 and 675586 for a sum of Rs.5,00,000/ each both drawn on Indian Bank, Jamia Milia Islamia Branch, Jamia Nagar, New Delhi110025 for a period of nine months from the date of agreement, though in the agreement, it has been written as cash but later on the said amount was paid through cheques. Further, as per the agreement, accused has agreed to return the abovementioned amount of Rs.10 lacs with proportionate profit within nine months from the date of agreement which is Ex.CW1/A1 (colly). Then, after expiry of nine months, complainant asked for return of amount as per the agreement but CC No. 12045/18 Abul Faiz Azm Vs Saleem Ahmad Khan Page No. 2/16 accused started to avoid him on one pretext or the other and eventually, accused issued a cheque in question bearing no. 243900 dated 03.10.2018 for a sum of Rs.10,00,000/ drawn on Axis Bank Ltd., Jasola (DL), New Delhi110025 in favour of the complaint with the assurance that the cheque would be encashed on its presentation. Original cheque is Ex.CW1/B. When complainant presented the above mentioned cheque with his bank, the same got dishonoured vide return memo dated 06.10.2018 with remarks "Funds Insufficient" which is Ex.CW1/C. Thereafter, complainant contacted the accused through phone call to which accused assured complainant to present the abovesaid cheque on 30.10.2018 by that time accused will arrange the sufficient funds in his account to honour the abovesaid cheque. Thereafter, complainant again presented the cheque with his bank but the same got again dishonoured vide return memo dated 02.11.2018 with the remarks "Funds Insufficient". Return memo is Ex.CW1/D. It is further averred in the complaint that on dishonor of cheque, the complainant sent a legal notice dated 06.11.2018 is Ex.CW1/E sent through Speed post with a demand to pay the cheque in question amount within stipulated time. Postal receipt is Ex.CW1/F and tracking report is Ex.CW1/G. Certificate under Section 65B of Indian Evidence Act which is Ex.CW1/H. It is further averred in the complaint that despite service of notice accused, accused has not paid the due amount within statutory period of legal demand notice, hence, this complaint was filed and same is Ex.CW1/I. APPEARANCE OF ACCUSED & NOTICE
2. Presummoning evidence was led by the complainant side and after hearing complainant side, accused was summoned for offence punishable under Section 138 of CC No. 12045/18 Abul Faiz Azm Vs Saleem Ahmad Khan Page No. 3/16 The Negotiable Instruments Act, 1881. After appearance of accused, it was ensured that copy of complaint has been supplied to him. Notice was framed against the accused for offence punishable under Section 138 of The Negotiable Instruments Act, 1881 on 16.07.2019 in which accused pleaded not guilty and claimed trial.
3. Accused stated in his defence recorded in his notice framed u/s 251 Cr.P.C that the cheque in question is in my handwriting except the date and the present cheque in question was given as security. Further, he along with the complainant had invested in a flat, in which his share was Rs.18 Lakh and the complainant share was Rs.10 Lakh. He proposed to the complainant to buy his share of property, however, the complainant instead used the present security cheque to receive his share which was Rs.10 Lakh. The flat is in his name and he is in possession of the said flat. He has already paid the complainant an amount of Rs.2 Lakh in the year 2017. The exact date he can tell from his records. He had received the legal demand notice.
Thereafter, matter was fixed for complainant's evidence and accused side was granted opportunity to crossexamine the complainant's evidence. COMPLAINANT'S EVIDENCE
4. During the trial, complainant has led the oral and documentary evidence against the accused to prove his case beyond reasonable doubt. The following evidence are as under:
Oral Evidence CW1 Mr. Abul Faiz Azm Documentary Evidence Ex. CW1/A The copy of agreement dated 03.09.2018. 1 (OSR) Ex. CW1/B Cheque bearing No. 243900 dated 03.10.2018 for a sum of Rs.10 CC No. 12045/18 Abul Faiz Azm Vs Saleem Ahmad Khan Page No. 4/16 Lakh, drawn on Axis Bank, Jasola, New Delhi.
Ex. CW1/C Return memo dated 05.10.2018.
Ex. CW1/D Return memo dated 01.11.2018.
Ex.CW1/E Legal demand notice dated 06.11.2018.
Ex. CW1/F Original Postal receipt dated 06.11.2018
Ex. CW1/G Tracking report
Ex.CW1/H Certificate under Section 65B.
Ex.CW1/I Complaint.
Ex.CW1/A Evidence by way of affidavit of CW1
Complainant stepped in witness box as CW1 adopted his affidavit of pre summoning as his evidence reiterating almost all facts of complaint, stating all exhibits available on record.
5. Complainant evidence was closed vide order dated 05.08.2022 and thereafter, matter was fixed for recording statement of accused. STATEMENT OF ACCUSED
6. The statement of accused was recorded under Section 313 of The Code of Criminal Procedure, 1973 read with Section 281 of The Code of Criminal Procedure, 1973 on 23.09.2022. Incriminating evidence was put to him. Accused denied all the allegations. In recording of statement of accused, accused opted to lead defence evidence.
Defence of Accused.
Oral Evidence
DW1 Mr. Saleem Ahmed Khan
DW2 Mr. Mohd. Iqram
7. Thereafter, defence evidence was closed vide order dated 15.03.2023. CC No. 12045/18 Abul Faiz Azm Vs Saleem Ahmad Khan Page No. 5/16
8. Final arguments from both sides were heard at length. Case file perused. INGREDIENTS OF OFFENCE AND DISCUSSION
9. Before dwelling into the facts of the present case, it would be apposite to discuss the legal standards required to be met by both sides. In order to establish the offence under Section 138 of NI Act, the prosecution must fulfill all the essential ingredients of the offence. Perusal of the bare provision reveals the following necessary ingredients of the offence: First Ingredient: The cheque was drawn by a person on an account maintained by him for payment of money and the same is presented for payment within a period of 3 months from the date on which it is drawn or within the period of its validity; Second Ingredient: The cheque was drawn by the drawer for discharge of any legally enforceable debt or other liability;
Third Ingredient: The cheque was returned unpaid by the bank due to either insufficiency of funds in the account to honour the cheque or that it exceeds the amount arranged to be paid from that account on an agreement made with that bank; Fourth Ingredient: A demand of the said amount has been made by the payee or holder in due course of the cheque by a notice in writing given to the drawer within thirty days of the receipt of information of the dishonour of cheque from the bank; Fifth Ingredient: The drawer fails to make payment of the said amount of money within fifteen days from the date of receipt of notice.
APPRECIATION OF EVIDENCE
10. The accused can only be held guilty of the offence under Section 138 NI Act CC No. 12045/18 Abul Faiz Azm Vs Saleem Ahmad Khan Page No. 6/16 if the abovementioned ingredients are proved by the complainant coextensively. Additionally, the conditions stipulated under Section 142 NI Act have to be fulfilled. Notably, there is no dispute at bar about the proof of only first, third, fourth and fifth ingredient. The complainant had proved the original cheque which vide Ex. CW1/B which the accused had not disputed as being drawn on the account of the accused. It was not disputed that the cheque in question was presented within its validity period. The cheque in question was returned unpaid with return memo dated 01.11.2018 vide Ex. CW1/D due to the reason, "Funds Insufficient".
Though, accused has admitted the service of legal demand notice to him in his notice framed u/s 251 Cr.P.C as well as in his statement recorded u/s 313 Cr.P.C. However, same was disputed in the cross examination of the complainant.
11. Per contra, Ld. Counsel for the complainant denied the contention of the accused and submitted that the service of the legal demand notice to the accused has been duly proved in the present matter.
12. Case file perused. So far as the contention qua the non service of the legal demand notice to the accused is concerned is not tenable in the present case. It is pertinent to mention here that in the entire cross examination of the complainant by the accused, the accused has not disputed the address mentioned on the legal demand notice. Also, accused has admitted the service of legal demand notice in his statement u/s 313 Cr.P.C is also relevant fact.
13. Moreover, 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: CC No. 12045/18 Abul Faiz Azm Vs Saleem Ahmad Khan Page No. 7/16 "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 alongwith 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."
14. Adverting to the facts of the present case and in the light of the aforementioned landmark judgment of Hon'ble Supreme Court of India ie. "C. C. Alavi Haji Vs. Palapetty Mohd. & Anr." (Supra), this contention of the accused is not sustainable. Hence, the first, third, fourth and fifth ingredient of the offence under section 138 of the NI Act stands proved.
15. As far as the proof of second ingredient is concerned, the complainant has to prove that the cheque in question was drawn by the drawer for discharging a legally enforceable debt. In the present case, accused has admitted his signature on the cheque in question. As per the scheme of the NI Act, once the accused admits signature on the cheque in question, certain presumptions are drawn, which result in shifting of onus. Section 118(a) of the NI Act lays down the presumption that every negotiable instrument was made or drawn for consideration. Another presumption is enumerated in Section 139 of NI Act. The provision lays down the presumption that the holder of the cheque received it for the discharge, in whole or part, of any debt or other CC No. 12045/18 Abul Faiz Azm Vs Saleem Ahmad Khan Page No. 8/16 liability.
16. The combined effect of these two provisions is a presumption that the cheque was drawn for consideration and given by the accused for the discharge of debt or other liability. Both the sections use the expression "shall", which makes it imperative for the court to raise the presumptions once the foundational facts required for the same are proved. Reliance is placed upon the judgment of the Hon'ble Supreme Court, Hiten P. Dalal vs. Bratindranath Banerjee (2001) 6 SCC 16.
17. Further, it has been held by a threejudge 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 raise a probable defence.CC No. 12045/18 Abul Faiz Azm Vs Saleem Ahmad Khan Page No. 9/16
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."
18. The presumptions raised under Section 118(b) and Section 139 NI Act are rebuttable presumptions. A reverse onus is cast on the accused, who has to establish a probable defence on the standard of preponderance of probabilities to prove that either there was no legally enforceable debt or other liability.
19. In this case, the arguments raised by the Ld. counsel for the accused to rebut the presumption are discussed below.
A. That the cheque in question which was issued as security cheque has been misused by the complainant
20. In the gist, the version of the complainant is that the complainant invested the sum of Rs. 10 Lakh through cheques in the property bearing no. 293, measuring 135 square yards situated at Main Bazaar, Okhla, Jamia Nagar, New Delhi of the accused in terms of agreement dated 03.09.2016 executed between the parties. It was further stated in the agreement that the accused will return the aforesaid amount with proportionate profit within nine months from the date of agreement. Further, it was stated that after expiry of nine months, since accused failed to repay the amount, he issued the cheque in question in discharge of his liability, which subsequently got bounced and present case was filed.
CC No. 12045/18 Abul Faiz Azm Vs Saleem Ahmad Khan Page No. 10/16
21. Per contra, it was argued by the accused in his defence that the cheque in question was issued as a security cheque which has been misused by the complainant. Further it was argued that the accused has already paid Rs. 2 Lakh to the complainant against the amount. Furthermore, it was argued that as per agreement dated 03.09.2015 that complainant was entitled to have his investment returned only after the sale of the property. Moreover, it was argued by the accused side that accused is willing to return the investment amount provided property in question is sold out.
22. Submissions Heard. Case File Perused.
23. Perusal of case file and evidence on record reveals that the accused has admitted the factum of his signature on the cheque in question as well as he handed over the cheque in question to the complainant. Further, he also admitted that there was a financial transaction between the parties qua the property. Furthermore, the agreement Ex. CW1/A dated 03.09.2016 is also admitted by the accused.
24. From perusal of agreement Ex. CW1/A dated 03.09.2016, it is apparent that both the parties executed the agreement wherein it was agreed by the accused that he will return the amount to complainant within 9 months from the date of agreement i.e. 03.09.2016. Pertinently, in the aforesaid agreement no other stipulations or conditions were drafted by the parties which could help the accused in escaping the liability of repayment to the complainant after the expiry of nine months. Importantly, in the cross examination of the accused he admitted that the contents of the agreement Ex CW1/A that the investment amount was to be returned after the expiry of nine months from the date of agreement and nothing was written about the fact that the return of investment is contingent upon the sale of the property. Therefore, it can be said that by virtue of agreement ExCW1/A, the liability of accused to pay the investment amount to CC No. 12045/18 Abul Faiz Azm Vs Saleem Ahmad Khan Page No. 11/16 complainant after the expiry of nine months is established.
25. It is pertinent to mention that the specific question was asked by the accused in the cross examination of complainant about the factum of payment of Rs. 2 Lakh made by the accused to which complainant replied that the same was paid on the account of investment profit which was not contradicted by the accused side in the entire cross examination of complainant either by question or suggestion nor he led any documentary evidence to that effect, hence even that objection could not be sustained.
26. Also, perusal of the testimony of DW2 Mohd. Iqram also does not inspire the confidence and trust of this Court as it appears that the testimony of DW2 is an after thought and attempt has been made to improvise the defence of the accused subsequently. It is pertinent to mention here that not even a single question or suggestion in the entire cross examination of the complainant qua the DW2 Mohd. Iqram especially in the light of his examination in chief wherein he has stated that the deal between the parties was put in his presence. Moreover, even in the examination in chief of the accused u/s 315 Cr.P.C even there also, no mention has been made qua the witness DW2, hence, his testimony can not be relied upon.
27. Moreover, the defence by the accused that cheque in question was issued as security cheque is also devoid of merit, though it is admitted by the complainant that the cheque in question was issued as security cheque in his cross examination. It is apposite here to quote here the landmark judgment of Hon'ble Supreme Court of India passed in the case titled as "Sunil Todi v/s State of Gujarat" in Criminal Appeal no. 1446/2021 where in para 22 reiterated the earlier findings qua the defence of security cheque as under:
"....17. A cheque issued as security pursuant to a financial transaction CC No. 12045/18 Abul Faiz Azm Vs Saleem Ahmad Khan Page No. 12/16 cannot be considered as a worthless piece of paper under every circumstance. 'Security' in its true sense is the state of being safe and the security given for a loan is something given as a pledge of payment. It is given, deposited or pledged to make certain the fulfilment of an obligation to which the parties to the transaction are bound. If in a transaction, a loan is advanced and the borrower agrees to repay the amount in a specified timeframe and issues a cheque as security to secure such repayment; if the loan amount is not repaid in any other form before the due date or if there is no other understanding or agreement between the parties to defer the payment of amount, the cheque which is issued as security would mature for presentation and the drawee of the cheque would be entitled to present the same.
On such presentation, if the same is dishonoured, the consequences contemplated under Section 138 and the other provisions of N.I. Act would flow."
28. Hence, in the light of above discussion and authority cited, it is evident that the defence of security cheque raised by the accused is frivolous and devoid of merit, as it is admitted case of accused that he had to pay the invested amount after expiry of nine months from the date of agreement Ex CW1/A executed between the parties. Therefore, the contention of accused that he willing to repay the investment amount provided the property in question is sold is also of insignificance and will not efface out the liability of accused u/s 138 NI Act.
29. Further, I have gone through the cross examination and I do not find any CC No. 12045/18 Abul Faiz Azm Vs Saleem Ahmad Khan Page No. 13/16 material reason to disbelieve the testimony of complainant. Minor discrepancies, even if in existence, can never be given much importance so as to throw out the entire version of a witness. Nothing came out in the crossexamination to disprove the case of the complainant. Thus, it is held that there is nothing in the crossexamination of the complainant which can impeach his credit or tend to show that accused has rebutted the presumption of law available in favour of complainant.
Accordingly, the aforesaid contention that the cheque in question which was issued as security cheque has been misused by the complainant is hereby dismissed.
30. 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 Pyarelal [(1999) 3 SCC 35] albeit in a civil case laid down the law in the following terms:
"Upon consideration of various judgments as noted herein above, 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 nonexistence 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 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 CC No. 12045/18 Abul Faiz Azm Vs Saleem Ahmad Khan Page No. 14/16 which he relies. In such an event, the plaintiff is entitled under law to rely upon all the evidence led in the case including that of the plaintiff as well. In case, where the defendant fails to discharge the initial onus of proof by showing the nonexistence of the consideration, the plaintiff would invariably be held entitled to the benefit of presumption arising under Section 118(a) in his favour. The court may not insist upon the defendant to disprove the existence of consideration by leading direct evidence as the existence of negative evidence is neither possible nor contemplated and even if led, is to be seen with a doubt"
31. In the present case, the accused has failed to adduce sufficient evidence to rebut the presumption laid down under section 139 of the NI Act. The accused has failed to prove that he has discharged the legal liability which is due towards the complainant. A statutory presumption has an evidentiary value. The question as whether the presumption stood rebutted or not, must, therefore, determined keeping in view the other evidence on record. In the present case, the accused has miserably failed to rebut the presumption raised under section 139 of the NI Act.
32. Consequently, it can be said that legal liability exists in favour of the complainant, thus, the second ingredient to the offence under section 138 of NI Act stands proved.
CONCLUSION
33. To recapitulate the above discussion, the complainant has been successful in establishing his case beyond reasonable doubt that the accused had issued the cheque in question in discharge of its legally enforceable liability. The presumptions under section 118 and section 139 of the NI Act were drawn against the accused. The accused has miserably failed to rebut the said presumption by raising a probable CC No. 12045/18 Abul Faiz Azm Vs Saleem Ahmad Khan Page No. 15/16 defence. The defence of the accused that there was no legal liability is not proved, even on the standard of preponderance of probabilities. Moreover, the Hon'ble Supreme Court in the case of Lakshmi Dyechem v. State of Gujarat (2012) 13 SCC 375, has held as under, "Therefore, if the accused is able to establish a probable defence which creates doubt about the existence of a legally enforceable debt or liability, the prosecution can fail. The accused can rely on the materials submitted by the complainant in order to raise such a defence and it is inconceivable that in some cases the accused may not need to adduce the evidence of his/her own. If, however, the accused/drawer of a cheque in question neither raises a probable defence nor able to contest existence of a legally enforceable debt or liability, obviously statutory presumption under Section 139 of the NI Act regarding commission of the offence comes into play if the same is not rebutted with regard to the materials submitted by the complainant."
34. In light of the aforementioned discussion, the complainant has successfully proved all the essential ingredients of section 138 of the NI Act. Accordingly, Saleem Ahmad Khan is held guilty for committing the offence under section 138 of the NI Act and is hereby convicted.
Let the copy of the judgment be given dasti to convict free of cost.
Announced in the open Court (ANKIT MITTAL)
on 25.03.2023 M.M.04/N.I.Act/SouthEast,Saket/Delhi
25.03.2023.
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