Delhi District Court
Ms. Usha Rani Verma vs Sh. Deepak Verma on 16 October, 2019
IN THE COURT OF SH. AJAY GUPTA, ADDL.SESSIONS
JUDGE02 (EAST), KARKARDOOMA COURTS, DELHI
Criminal Appeal No.129/19
In the matter of:
Ms. Usha Rani Verma
D/o Sh. Nanak Chand Verma,
R/o X7502/Gali No.5,
Raghubar Pura No.2,
Gandhi Nagar, Delhi110031
....Appellant
versus
Sh. Deepak Verma
S/o Sh. Viren Chand Verma
R/o 2889, Gali No.4, Raghubar Pura
Gandhi Nagar, Delhi110031
....Respondent
Date of institution 09.08.2019
Arguments heard 23.09.2019
Date of order 16.10.2019
JUDGMENT
1. The present appeal has been filed against the judgment dated 08.07.2019 and order on sentence dated 19.07.2019 passed by Ld. MM (East), Karkardooma Courts, Delhi, in complaint case bearing CC No.60526/16 titled as Sh. Deepak Verma vs Smt. Usha Rani filed u/s 138 of Negotiable Instruments Act (hereinafter referred as NI Act). Vide the aforesaid judgment Ld. MM has convicted the Cr. Appl No.129/19 Usha Rani Verma vs Deepak Verma 1 of 26 appellant u/s 138 NI Act and vide order dt 19.07.2019, the appellant has been sentenced to Simple Imprisonment for four months and to pay fine of Rs.3,20,000/out of which Rs.3,10,000/ is payable to complainant as compensation and remaining Rs.10,000/ is to be deposited with State and in case of default of payment of fine, the convict/appellant is to further undergo simple imprisonment for one month.
2. The brief facts of present case are that the respondent/complainant filed a complaint u/s 138 of N.I. Act against the appellant/accused (hereinafter both the parties have been referred as per their nomenclature in the complaint) on the basis of the following allegations:
(a) That the accused is relative of complainant and they were on visiting terms with each other. On 22.08.2016, accused requested the complainant for arranging loan of Rs.2.5 lacs as she was facing financial crisis at that time and was in dire need of money.
(b) That the complainant gave friendly loan of Rs.2.5 lacs to the accused which was to be returned on or before 10.10.2016. In discharge of her aforesaid liability, the accused issued a cheque of Rs.2.5 lacs, bearing cheque no.000264 dated 12.10.2016, drawn on Bank of India, Gandhi Nagar, Branch, X918, Chand Mohalla, Delhi.
Cr. Appl No.129/19 Usha Rani Verma vs Deepak Verma 2 of 26
(c) That the complainant presented the said cheque with his banker i.e. State Bank of Bikaner & Jaipur, Krishna Nagar Delhi110051, for encashment but same was dishonoured with the remarks "funds insufficient" vide returning memo dated 18.10.2016. After dishonour of cheque, the complainant contacted the accused and told her about dishonour of cheque and demanded the said amount in cash but accused did not give any satisfactory answer.
(d) That the complainant sent a legal demand notice dated 09.11.2016 to the accused, however, accused did not make payment of the cheque amount and sent a false and baseless reply to the legal notice dated 24.11.2016. Thus, it was prayed that accused may be summoned and punished u/s 138 of NI Act.
3. On 07.07.2017, notice u/s 251 Cr.P.C for commission of the offence u/s 138 N. I. Act was served upon the accused to which she pleaded not guilty and replied as under: "Q. Do you understand this notice?
Ans. Yes.
Q Did you issue the said cheque to the complainant?
A. Yes. I issued the cheque to the complainant.
Q. Did you receive the legal notice?
A. Yes. I received the legal notice from the complainant.
Q. Do you plead guilty or have any defence to be made?
A. No. I do not plead guilty and claim trial. Complainant
had assured me that he shall arrange house loan for me, for which I had given the cheque in question to him as security. Complainant did not arrange the loan and misused the cheque in question.
Cr. Appl No.129/19 Usha Rani Verma vs Deepak Verma 3 of 26 Admission/denial of documents u/s 294 Cr.P.C.
Q. Did the cheque in question bear your signature? A. Yes. The cheque bears my signature and pertains to my account. The amount in words and figures on the cheque were filled by my daughter. The other particulars on the cheque are not in my handwriting."
4. In support of his case, complainant examined himself as sole witness (CW1) and he brought on record the following documents:
a) Original cheque no.000264 Ex.CW1/1.
b) Cheque returning memo Ex.CW1/2.
c) Legal demand notice Ex.CW1/3.
d) Postal receipt Ex.CW1/4.
e) Reply of legal demand notice Ex.CW1/5.
5. After completion of complainant's evidence, the statement of accused was recorded under section 313 Cr.P.C wherein all incriminating evidence was put to her. The relevant portions of statement u/s 313 Cr.P.C. read as under: Q. It is in evidence against you that the complainant had advanced you friendly loan in sum of Rs.2,50,000/. In order to repay the loan amount you had issued cheque bearing No.000264 dated 12.02.2016, drawn on Bank of India, in favour of the complainant. The cheque is already Ex.CW1/1. What do you have to say?
A. I had not taken any loan from the complainant. I had not issued the cheque to the complainant for repayment of alleged loan I had asked for loan of Rs.2,50,000/ from the complainant. He had told me that he will get arranged the loan amount. The complainant had taken four cheques from me including the cheque in question.
Q. It is in evidence against you that the cheque Ex.CW1/1 bears your signature and pertains to your account. What do you have to say?
Cr. Appl No.129/19 Usha Rani Verma vs Deepak Verma 4 of 26
A. Cheque bears my signature and pertains to my
account. My daughter had filled up the particulars of the cheque with my consent and had given the same to the complainant. Q. It is also in evidence against you that the complainant had sent a legal demand notice dated 09.11.2016 Ex.CW1/3 advising you to pay the cheque amount within 15 days from the date of receipt of the notice. You had sent reply to the notice. Your reply is Ex.CW1/5. What do you have to say?
A. This is correct. Reply Ex.CW1/5 had been sent by my Advocate.
Q. Do you want to say anything else?
A. I had given the cheque to the complainant for arranging
loan. The complainant neither arranged the loan nor returned my cheque. When I demanded my cheque, he fought with me. He has misused my cheque
6. In the application u/s 145(2) of NI Act, accused has taken following defence: Para no.2 "The applicant/accused is under no legal liability/debt in whatsoever manner towards the complainant nor towards the demand of any type of interest.
Paran no.5 The accused was in need of money and in the month of May 2016, she met with father of the complainant and complainant assured the accused for arranging the loan from Nationalized Bank for which the complainant demanded blank cheques and due to the need of money and being the cousin brother, the accused gave signed but blank cheques to the complainant's father namely Viren Chand Verma but the complainant never arranged any loan from the Nationalized Bank to the accused rather he misused the said cheques.
Para no.6 The complainant misused the cheque in question i.e. security purpose blank cheque after filling of the particulars of the cheque in his own handwriting or by any other person's handwriting best known by him.
Cr. Appl No.129/19 Usha Rani Verma vs Deepak Verma 5 of 26
7. In reply to legal demand notice, the accused has taken following defence: "At the very outset before giving parawise reply, we are to state that your flient has apprised you of the wrong & false facts and concealed very vital facts, resulting yourself to wrongly conclude firstly that our client has taken any friendly loan from your client ever secondly that our client owe a figure of Rs.2,50,000/ towards your client as falsely depicted in your notice and thirdly that our client was neither willing to buy a house nor has she bought any house so there arose no reason for requesting for friendly loan lastly that our client never handed over the said cheques to your client against any friendly loan as falsely allegedly by you in the notice on your client's instructions but the same were issued by our client to your client for arranging a personal loan from a nationalized bank which your client being a cousin brother undertook to arrange.
* * *
3. That the contents of para 3 of your notice is wrong, false and thus categorically denied. It is denied that there arose any reason to give any assurance to your client by your client as no amount was ever borrowed by our client from your client. Actually your client has misused the 4 cheques given by our client to be given for bank loan out of which our client signed only 2 cheques as your client told our client that 2 signed cheques were to be given for specimen signatures and 2 cheques were given blank without signatures. Out of 2 signed cheque one to be given as security in case of default in payment on loan and one will go for loan file charges payment. The 2 unsigned cheques will be kept on record of bank for disbursing the loan in the particular account in which the loan amount has to be disbursed.
4. That the contents of para 4 are wrong, false and categorically denied. It is denied that our client had given any assurance to Cr. Appl No.129/19 Usha Rani Verma vs Deepak Verma 6 of 26 present the cheques in her account for clearing as there was no legally recoverable debt towards your client. The return memo will itself have the instructions of Funds Insufficient as the cheque no.000264 was never issued by our client to you against any legal liability. As the cheque was not to be presented as it was beyond imagination of our client that your client being a cousin would cheat upon our client. Due to this fact our client's banker has no option but to return the same with specific instructions."
8. On completion of the trial, Ld. Trial Court convicted the accused thereby holding that accused failed to raise probable defence and rebut the presumption u/s 139 of NI Act.
9. Now the present appeal has been filed by the appellant/accused mainly on the following grounds:
a) That the Ld. Trial Court has not considered that the appellant has mentioned in her application u/s 145(2) NI Act that she has no liability towards respondent and cheque was issued as a security for arranging housing loan and respondent has misused the said cheque and the particulars of the cheque except signature are not in the handwriting of appellant.
b) That the Ld. Trial Court failed to consider that the appellant was not served with the legal demand notice.
c) That the Ld. Trial Court failed to consider the crossexamination of complainant conducted on behalf of the appellant.
d) That the Ld. Trial Court failed to consider the statement of appellant u/s 313 Cr.P.C wherein, she denied all the false and Cr. Appl No.129/19 Usha Rani Verma vs Deepak Verma 7 of 26 frivolous contents of the case of respondent and stated that cheque was issued as security to the father of the respondent for arranging housing loan, who gave this cheque to the respondent.
e) That the Ld. Trial Court failed to consider that if it was a friendly loan then as to why no agreement was executed. It is also stated that Ld. Trial Court failed to consider that the respondent has misused the security cheque.
f) That the Ld. Trial Court failed to consider the fact that an FIR bearing no.519/2016 PS Gandhi Nagar was got registered by the appellant against the respondent when appellant had asked the father of the respondent to return the cheque. Thus, it is prayed that impugned judgment and order on sentence may be set aside and accused may be acquitted.
10.I have heard the submissions of Ld. counsel for the appellant/ accused and also Ld. Counsel for the respondent/complainant. I have also gone through the record. Ld Counsel for appellant/accused submitted that the respondent/complainant has failed to prove his case. Ld. Counsel for appellant submitted that the respondent has not filed ITR return to show that he was having sufficient income and capable of granting loan. It is submitted that the complainant has not placed on record any document to show that he was having financial capacity to grant the said loan. Ld. counsel further submitted that the version of complainant is doubtful as there are contradictions in his first crossexamination and second Cr. Appl No.129/19 Usha Rani Verma vs Deepak Verma 8 of 26 cross regarding his income. Ld. Counsel further stated that the complainant stated that during crossexamination that he arranged money from brother and father but he has not examined them as witnesses. In support of contentions, Ld. Counsel for appellant/accused relied upon case laws reported as CRL. L.P. 358/2012 Ashok Baugh vs Kamal Baugh & Anr. And CRL. REV.P.500/2014 Sajidur Rehman vs Rajiv Kashyap & Anr.
11.In rebuttal, Ld. Counsel for respondent/complainant submitted that there is no contradiction in the testimony of complainant as pointed out by Ld. Counsel for appellant/accused. Ld. Counsel for respondent submitted that in initial crossexamination, the respondent/complainant has stated that his monthly income was Rs.15,000/ to Rs.17,000/ pm while in his subsequent cross examination, he has stated his monthly savings were between Rs.8000/ to Rs.10,000/ pm.
12.It is held by Hon'ble Supreme Court in the case of 2000 (2) SCC 745 titled as M/s Kusum Ingots & Alloys Ltd. Vs M/s Pennar Peterson Securities Ltd that to constitute an offence u/s 138 of Negotiable Instruments Act the following requirements are to fulfilled:
a) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account for the discharge of any debt or other liability;
Cr. Appl No.129/19 Usha Rani Verma vs Deepak Verma 9 of 26
b) that cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier;
c) that cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank;
d) the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;
e) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice.
13.In view of the law laid down by the Hon'ble Supreme Court in the aforesaid case, it is to be seen, if the aforesaid requirements have been fulfilled in the present case. The complainant has claimed that he had advanced friendly loan of Rs.2.5 lacs to accused and in discharge of liability, accused had issued the subject cheque while the accused has disputed the claim of the complainant and has taken a defence that the subject cheque was given by her to the complainant as security for a loan which was to be arranged by the complainant from a Nationalized Bank. This defence of the accused is discussed in the later part of this order, however, it is undisputed that the complainant had presented the cheque for encashment and it got dishonoured vide return memo Ex.CW1/2 due to insufficient funds in the bank account of the accused.
Cr. Appl No.129/19 Usha Rani Verma vs Deepak Verma 10 of 26
14.At the time of framing of notice u/s 251 Cr.P.C as well as in her statement u/s 313 Cr.P.C, accused has admitted the receipt of legal notice Ex.CW1/3. Thus, the factum of service of legal notice stood established. It is further clear from the record that accused did not pay the cheque amount neither within 15 days of the service of the legal notice nor thereafter. Thus, it is clear from the record that all necessary requirements to constitute the offence u/s 138 N.I. Act, have been fulfilled except that whether on the date of presentation of cheque by the complainant, the cheque was against due debt or was without consideration as claimed by the accused. This point will be discussed in the later part of the order and before making further discussions on the factual aspects of the case, it is deemed necessary to firstly discuss the relevant provisions of N.I Act and the legal position which is required to be taken into consideration for appropriate disposal of the complaint U/s 138 of N.I Act.
15.The claim based under the provisions of Negotiable Instruments Act is an exception to the general rule of law that burden of proof lies on the prosecution. There are two specific provisions in negotiable instruments acts i.e. section 118 (a) and 139 of NI Act which contemplates that a presumption is attached in regard to each and every negotiable instrument that the same was drawn and issued against due discharge of the liability and thus, whenever any claim is made on the basis of a negotiable instrument, the presumption has to be drawn in favour of the holder of the cheque (drawee) and the Cr. Appl No.129/19 Usha Rani Verma vs Deepak Verma 11 of 26 law has put the burden to rebut the presumption on the accused that the cheque was not issued by him against discharge of a debt or a liability. In case, the accused is not able to rebut the presumption and fails to prove his defence, the presumption becomes absolute and it has to be assumed that the cheque was issued by the accused in discharge of debt or liability and consequently, accused has to be assumed guilty of the offence. The relevant provisions of section 118 (a) and section 139 of NI Act reads as under: Sec 118 Presumptions to negotiable instruments.Until the contrary is proved, the following presumption 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, endorsed, negotiated or transferred, was accepted, endorsed, negotiated, or transferred for consideration.
139. Punishment in favour of holder: It shall be presumed, unless the contrary is provided, 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.
16.It has been held by Hon'ble Supreme Court in the case reported as 2001 (6) SCC 16 titled as Hiten P. Dalal v. Bratindranath Banerjee that the presumption mentioned in the section 139 of NI Act, is a presumption of law and not the presumption of fact and thus, this presumption has to be drawn in favour of the drawee and burden to rebut the presumption with the probable defence is on the Cr. Appl No.129/19 Usha Rani Verma vs Deepak Verma 12 of 26 accused. The relevant para of the aforesaid case law reads as under:
21. In other words, provided the facts required to form the basis of a presumption of law exist, no discretion is left with the Court but to draw the statutory conclusion, but this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary. A fact is said to be proved when, "after considering the matters before it, the Court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists"
[Section 3 : Evidence Act]. Therefore, the rebuttal does not have to be conclusively established but such evidence must be adduced before the Court in support of the defence that the Court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of reasonability being that of the 'prudent man.
17.It has been held by the Hon'ble Supreme Court in the case of reported as 2010 (11) SCC 441 titled as Rangappa v. Mohan that presumption of section 139 of N.I. Act also includes the existence of legal enforceable debt. The relevant para of the said judgment reads as under:
14. In light of these extracts, we are in agreement with the respondent claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability.
18.In Bharat Barrel v. Drum Manufacturing AIR 1999 SC 1008, the Hon'ble Supreme Court held that the accused has to rebut the Cr. Appl No.129/19 Usha Rani Verma vs Deepak Verma 13 of 26 presumption and mere denial of passing of consideration is no defence.
19.Thus, in view of the law laid down by the Hon'ble Supreme Court in the aforesaid cases, the presumption as contemplated under section 139 N.I. Act has to be drawn in favour of the drawee that the cheque in question was issued in discharge of legally enforceable liability. Thus, in the present case also complainant was not required to prove that the subject cheque was issued by the accused towards repayment of loan amount and initially, the claim of the complainant was to be assumed to be correct by drawing the presumption of section 139 of N.I. Act and burden to rebut the presumption with her probable defence was on the accused.
20.The accused has neither denied the issuance of cheque in question nor receipt of legal notice. The sole defence of the accused is that the subject cheque is the cheque which was given to the complainant towards security for a loan which was to be arranged by the complainant for the accused and same has been misused by the complainant. The accused was required to establish on record the aforesaid defence taken by her. However, after considering the record and the evidence, it is clear that the defence of the accused is apparently not trustworthy for the following various reasons:
(a) The complainant had examined himself as CW1 and reiterated all the allegations in his affidavit Ex.CW1/A that he had given Rs.2.5 lacs in cash to the accused with an understanding that the loan Cr. Appl No.129/19 Usha Rani Verma vs Deepak Verma 14 of 26 amount would be returned by the accused on or before 10.10.2016.
CW1 also stated that in discharge of liability, accused had issued the subject cheque Ex.CW1/1 but on its presentation, the same was dishonoured due to insufficient fund and despite service of legal notice Ex.PW1/3, accused failed to pay the cheque amount. Accused denied the allegations and took defence that she had not taken any loan and had requested the complainant for arranging a housing loan from a Nationalized Bank which complainant failed to arrange and he has misused the security cheque. This defence of the accused does not inspire any confidence for several reasons. As per accused, she had requested the complainant for arranging a housing loan for her from a Nationalized Bank. The accused has simply taken the said defence, however, she has not mentioned any particulars regarding the amount of loan which was to be taken by her from the bank and also the particulars of property for which loan was required as prior to taking a housing loan, the property must have been finalized by the accused. Thus, neither the amount which was to be borrowed from the bank nor particulars of the property against which the loan was required, was specified. Further, it is also not specified by the accused as to why she had requested the complainant to arrange a housing loan for her as it is not the case of the accused that the complainant was in any manner, associated with a Nationalized Bank. It is also not the case of the accused that the complainant was working as a financial agent. Thus, nothing has come on record to show that the complainant was in a better Cr. Appl No.129/19 Usha Rani Verma vs Deepak Verma 15 of 26 position to arrange a loan for the accused from a Nationalized Bank. Accused has also not mentioned any special reason asking the complainant to arrange the loan. In case, the complainant was not having any such specification, the accused could have herself approached the bank concerned for obtaining the loan. Therefore, the reason for approaching the complainant for arranging the loan from a Nationalized Bank remained unexplained by accused.
(b) As per accused, she had requested the complainant for arranging housing loan, however, it is not explained by the accused as to why the subject cheque was given by her to the complainant when the loan was to be taken from a Nationalized Bank. Furthermore, it cannot be assumed that the accused would hand over any cheque to the complainant towards security against a loan which was to be arranged from a Nationalized Bank as security, if any, was to be furnished to the Bank and not to the complainant. Thus, it is beyond comprehension that complainant would seek a security from the accused for the loan which was to be provided by a Nationalized Bank directly to the accused.
(c) As per accused, she had handed over the subject cheque to the complainant towards security for a loan, however, accused has not provided any details as to on which date she had requested the complainant for arranging the loan and on which date she had given the subject cheque to the complainant. The accused has not specified any particulars whatsoever regarding the date of handing Cr. Appl No.129/19 Usha Rani Verma vs Deepak Verma 16 of 26 over the subject cheque. The accused has also not specified as to when she had requested for loan and when she realized that the complainant could not arrange the loan for her. These details are very relevant to assess the veracity of the claim of the accused in this regard. In case, the accused would have given the subject cheque to the complainant towards security for a loan and the complainant would have failed in arranging the same, the accused would have immediately sought return of the subject cheque as according to her, same was meant for security for a loan which was to be arranged by the complainant and after complainant failed to arrange the loan, said cheque was lying with him without any purpose or consideration. However, it is clear from the record that accused has not brought on record any particulars as to when she sought return of the said cheque from the complainant.
(d) In case, there would have been any substance in her defence then accused would have taken the same defence throughout the proceedings of the entire case. However, it is clear from the perusal of the record that the accused has been quite inconsistent with her defence and time and again, she had changed her defence at every stage of the case. The complainant has brought on record the reply to the legal notice sent on behalf of accused as Ex.CW1/5 and in the said reply, the accused has taken a defence that in the month of March 2016, she needed a sum of Rs.1 lac and the said cheque was handed over by the accused to the complainant for arranging Cr. Appl No.129/19 Usha Rani Verma vs Deepak Verma 17 of 26 the said personal loan while at the time of giving reply to the questions put by Ld. Trial Court while framing of notice, accused stated that the subject cheque was given for security for arranging housing loan. During crossexamination of complainant, it was claimed that the subject cheque was given by the accused to the father of the complainant, who gave the subject cheque to the complainant. Further at the time of statement u/s 313 Cr.P.C, accused again changed her defence and stated that she had sought loan of Rs.2.5 lacs from the complainant, however, complainant told her that he will get the loan amount arranged. She also stated that the complainant had taken four cheques from her including subject cheque. Thus, it is clear from her reply given u/s 313 Cr.P.C. that here she claimed that she had sought a loan of Rs.2.5 lacs from complainant. Thus, the accused has taken a contradictory stand regarding the purpose of loan as well as amount of loan for which she made a request to the complainant. Further, during cross examination of complainant, accused claimed that the subject cheque was given to the father of complainant while in her reply u/s 313 Cr.P.C., she has stated that the subject cheque was given to the complainant alongwith other three cheques.
(e) At the time of notice u/s 251 Cr.P.C., accused admitted that the amount in figure and words in the subject cheque has been filled in by her daughter, however, other particulars on the cheque are not in her handwriting. While at the time of her statement u/s 313 Cr.P.C., Cr. Appl No.129/19 Usha Rani Verma vs Deepak Verma 18 of 26 she stated that her daughter had filled up the particulars of the cheque with her consent and she had given the subject cheque to the complainant. Here, the accused did not state that only the amount on the cheque has been filled up by her daughter and rest of the particulars were not filled up by her. Further, it remained unexplained as to why the amount was filled in the subject cheque when the loan was proposed to be taken and loan was neither sanctioned nor granted by the bank. Furthermore, even if it is assumed that the cheque was meant towards security for a loan yet it cannot be assumed that the bank would seek the security cheque of the same amount for which the loan has been sought.
(f) In the crossexamination of complainant as well as in the grounds of appeal, it has been contended by the accused that the legal notice has not been served upon the accused. There is no merit in this ground raised by the accused as it is clear that at the time of framing of notice u/s 251 Cr.P.C as well as u/s 313 Cr.P.C., the accused has categorically admitted the service of legal notice and also that she had sent a reply Ex.CW1/5 to the legal notice. Furthermore, it is well settled law that the complaint cannot be rejected for nonservice of statutory notice and in case he has not received the notice and has received the notice of complaint with summons, he can make the payment of the cheque amount. Thus, in view of the settled law even if the service of legal notice has not been proved, the service of notice of complaint also amounts to sufficient compliance of Cr. Appl No.129/19 Usha Rani Verma vs Deepak Verma 19 of 26 notice u/s 138 NI Act and in case the accused failed to pay the cheque amount despite service of notice of complaint, he is guilty of offence u/s 138 NI Act. In this regard, this court is supported by the recent judgment of Hon'ble Delhi High Court reported as Balam Ram vs Ashok Kumar Nagar, CRL. A. 897/2017. Relevant para of the judgment reads as under: "5. Further, as held by the Supreme Court in the decision reported as (2007) 6 SCC 555 C.C. Alavi Haji vs. Palapetty Muhammed & Anr. the Supreme Court reverting to Provisos (b) & (c) to Section 138 NI Act held that the course open to the drawer where he claims that he has not received the notice sent by post but received copy of the complaint with the summons is that he can within 15 days of the receipt of summons make payment of the cheque amount and on that basis submit to the Court that the complaint be rejected. On service of summons in the complaint he cannot contend that there was no proper service of notice."
(g) According to the accused, the complainant has misused the subject cheque and she is not liable to pay the amount claimed by the complainant. The complainant had issued a legal notice to the accused and it is admitted position of fact that the legal notice was duly served upon the accused. As per accused, complainant had raised a false claim in his legal notice and has misused the security cheque and the same was without consideration yet the accused did not take any action for the alleged misdeed committed by the complainant till date. It has been held by Hon'ble Delhi High Court in the case reported as 172 (2010) DLT 561 V.S. Yadav Vs. Reena that it is for the accused to rebut the presumption of section 139 of N.I. Act and also that under what circumstances he had issued the Cr. Appl No.129/19 Usha Rani Verma vs Deepak Verma 20 of 26 cheque to the complainant as issuing a cheque is a serious business. It is also held that if the cheque was not issued in discharge of the debt then accused is supposed to take appropriate action seeking return of his cheque. In case, the accused failed to establish the reason for issuance of cheque and also why he did not seek return of the cheque then it is to be assumed that he failed to rebut the presumption. The relevant portion of the para no.7 of the said case reads as under: 'In order to rebut the presumption under Section 139 of N.I. Act, the accused, by cogent evidence, has to prove the circumstance under which cheques were issued. It was for the accused to prove if no loan was taken why he did not write a letter to the complainant for return of the cheque. Unless the accused had proved that he acted like a normal businessman/prudent person entering into a contract he could not have rebutted the presumption u/s 139 N.I. Act. If no loan was given, but cheques were retained, he immediately would have protested and asked the cheques to be returned and if still cheques were not returned, he would have served a notice as complainant. Nothing was proved in this case.
(h) In the instant case also the accused has failed to take any action seeking return of the cheque neither prior to service of legal notice nor after service. She has not taken any action against the complainant till date. Thus, the plea taken by the accused that the subject cheque is without consideration is not reliable.
(i) In the present case also, the accused did not take any action seeking return of his cheque. In view of the aforesaid discussions, it is held that the accused has failed to establish his defence. Consequently, the presumption of section 139 of N.I. Act remained Cr. Appl No.129/19 Usha Rani Verma vs Deepak Verma 21 of 26 unrebutted and accordingly, it is to be presumed that accused had issued the cheque qua repayment of the loan.
(j) In view of these discussions, it is held that the defence raised by the accused is not trustworthy as firstly, it is bereft of the necessary particulars and secondly, the accused has taken different defence on different stages. The defence is not reliable as the accused did not conduct herself as any other person would conduct himself under those circumstances.
21.In the grounds of appeal, the appellant has endeavoured to contend that during crossexamination, several questions were put to the complainant regarding his solvency and financial capability for granting the loan of Rs.2.5 lacs, however, same has not been considered by the Ld. Trial Court. As per accused, the complainant is not an income tax assessee, thus, by raising this plea, it has been contended that the complainant has not established on record that he was financially capable of granting such a loan. Mere nonfiling of or return or not being an income tax assessee, is not sufficient to assess the financial capability of a person. It has been held by the Hon'ble Supreme Court in case titled as Basalingapa vs Mudi Basapa SLP (Cri) 8441 2018 decided on 09.04.2019 that the complainant cannot be burdened with proof of his financial capability.
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22.Furthermore, it is well settled law that the presumption u/s 139 NI Act cannot be rebutted by simply making statement and accused has to bring on record the evidence to prove the defence taken by him. In this regard, this court is supported with the case law reported as "Hiten P. Dalal v. Bratindranath Banerjee, (SC) : 2001(5) BCR 820". The relevant para of the judgment reads as under:
21. In other words, provided the facts required to form the basis of a presumption of law exist, no discretion is left with the Court but to draw the statutory conclusion, but this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary. A fact is said to be proved when, "after considering the matters before it, the Court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists" [Section 3 : Evidence Act]. Therefore, the rebuttal does not have to be conclusively established but such evidence must be adduced before the Court in support of the defence that the Court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of reasonability being that of the 'prudent man'.
22. Judicial statements have differed as to the quantum of rebutting evidence required. In Kundan Lal Rallaram v. Custodian, Evacuee Property, Bombay, AIR 1961 Supreme Court 1316, this Court held that the presumption of law under Section 118 of Negotiable Instruments Act could be rebutted, in certain circumstances, by a presumption of fact raised under Section 114 of the Evidence Act. The decision must be limited to the facts of that case. The more authoritative view has been laid down in the subsequent decision of the Constitution Bench in Dhanvantrai Balwantrai Desai v. State of Maharashtra, AIR 1964 Supreme Court 575, where this Court reiterated the principle enunciated in State of Madras v. Vaidyanath Iyer (supra) and clarified that the distinction between the two kinds of presumption lay not only in the mandate to the Court, but also in the nature of the evidence required to rebut the two. In the case of a discretionary presumption the presumption if drawn may be rebutted by an explanation which Cr. Appl No.129/19 Usha Rani Verma vs Deepak Verma 23 of 26 "might reasonably be true and which is consistent with the innocence" of the accused. On the other hand in the case of a mandatory presumption "the burden resting on the accused person in such a case would not be as light as it is where a presumption is raised under Section 114 of the Evidence Act and cannot be held to be discharged merely by reason of the fact that the explanation offered by the accused is reasonable and probable. It must further be shown that the explanation is a true one. The words 'unless the contrary is proved' which occur in this provision make it clear that the presumption has to be rebutted by 'proof' and not by a bare explanation which is merely plausible. A fact is said to be proved when its existence is directly established or when upon the material before if the Court finds its existence to be so probable that a reasonable man would act on the supposition that it exists. Unless, therefore, the explanation is supported by proof, the presumption created by the provision cannot be said to be rebutted........." [See also V.D. Jhingan v. State of Uttar Pradesh, AIR 1966 Supreme Court 1762; Sailendranath Bose v. The State of Bihar, AIR 1968 Supreme Court 1292 and Ram Krishna Bedu Rane v. State of Maharashtra, 1973(1) SCC 366.]
23. We will therefore have to consider whether in the case before us, the appellant had supported his defence by any proof sufficient to rebut the presumption drawn against him.
23.Furthermore, it is well settled law that simple denial of liability cannot be termed to be a valid defence of the accused. In "K.N. Beena v. Maniyappan (SC), Criminal Appeal No. 1066 of 2001", it has also been held by the Hon'ble Supreme Court that the burden is on accused to prove his defence by way of cogent defence evidence and if he fails to prove that the cheque was not issued against debt or liability then presumption u/s 139 NI Act would remain unrebutted. Relevant paras reads as under:
6. In our view the impugned Judgment cannot be sustained at all. The Judgment erroneously proceeds on the basis that the burden Cr. Appl No.129/19 Usha Rani Verma vs Deepak Verma 24 of 26 of proving consideration for a dishonoured cheque is on the complainant. It appears that the learned Judge had lost sight of Sections 118 and 139 of the Negotiable Instruments Act. Under Section 118, unless the contrary was proved, it is to be presumed that the Negotiable Instrument (including a cheque) had been made or drawn for consideration. Under Section 139 the Court has to presume, unless the contrary was proved, that the holder of the cheque received the cheque for discharge, in whole or in part, of a debt or liability. Thus in complaints under Section 138, the Court has to presume that the cheque had been issued for a debt or liability. This presumption is rebuttable. However the burden of proving that a cheque had not been issued for a debt or liability is on the accused. This Court in the case of Hiten P. Dalal v. Bratindranath Banerjee, 2001 (3) RCR (Crl.) 460 SC : 2001(6) SCC 16 has also taken an identical view.
7. In this case admittedly the 1st Respondent has led no evidence except some formal evidence. The High Court appears to have proceeded on the basis that the denials/averments in his reply dated 21st May, 1993 were sufficient to shift the burden of proof onto the Appellant/Complainant to prove that the cheque was issued for a debt or liability. This is an entirely erroneous approach. The 1st Respondent had to prove in the trial, by leading cogent evidence, that there was no debt or liability. The 1st Respondent not having led any evidence could not be said to have discharged the burden cast on him. The 1st Respondent not having discharged the burden of proving that the cheque was not issued for a debt or liability, the convection as awarded by the Magistrate was correct. The High Court erroneously set aside that conviction.
24.It has been held by the Hon'ble Delhi High Court in the case reported as "Sanjay Arora vs. Monika Singh (Cri. Appeal no.98/2017)" that the onus is on the accused to rebut the presumption either by direct evidence or by bringing on record the required material, however, the simple denial of liability is not sufficient to rebut the presumption. Further, it is clear from the evidence of CW1 that he categorically deposed that his monthly Cr. Appl No.129/19 Usha Rani Verma vs Deepak Verma 25 of 26 saving was Rs.8000/ to Rs.10,000/. Thus, it is also clear from the evidence led by complainant that he was financially capable of advancing such a loan amount. It is respectfully observed that the case laws cited relied upon by the appellant/accused are not applicable to the peculiar facts and circumstances of the present case.
25.Thus, it is held that the accused has failed to rebut the presumption and complainant by way of his evidence has established that he had advance friendly loan of Rs.2.5 lacs and accused had issued the subject cheque towards repayment of the said amount.
26.Since, the appellant/accused has failed to repay the cheque amount despite service of legal notice, thus, she is guilty of commission offence u/s 138 N.I Act. In view the aforesaid discussions, this court does not find any infirmity in the order passed by Ld. MM. and holds that the appellant/accused has been rightly convicted u/s 138 N.I Act. Hence, the present appeal is liable to be dismissed and accordingly, same is dismissed.
Digitally signed by AJAY GUPTA AJAY Location: Delhi
Date:
GUPTA 2019.10.16
16:51:48
+0530
(Ajay Gupta)
Addl. Sessions Judge02(East)
KKD Courts, Delhi
Announced in open
court on 16.10.2019
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