Delhi District Court
Jugal Kishore vs Satish Kumar Jain Cc No. 4385/17 Page No. ... on 7 March, 2020
IN THE COURT OF MR. MRIDUL GUPTA, METROPOLITAN MAGISTRATE,
SOUTH-WEST, DWARKA, DELHI
In Re:
CNR No. DLSW02-006167-2017
CC No. 4385/2017
Jugal Kishore
S/o Late Sh. Puran Chand,
R/o E-571, Gali no.79,
Mahavir Enclave, Part-2,
New Delhi
............Complainant
Versus
Satish Kumar Jain
R/o RZF-549, Gali no.42,
Sadh Nagar-II, Palam
New Delhi
.............Accused
(1) Offence complained of or
proved : 138 N.I. Act
(2) Plea of accused : Pleaded not guilty
(3) Date of institution of case : 17.03.2017
(4) Date of conclusion of arguments: 19.02.2020
(5) Date of Final Order : 07.03.2020
(6) Final Order : Convicted
Jugal Kishore vs Satish Kumar Jain CC No. 4385/17 Page no. 1 of 11
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 alleges that he and the accused are well known to each other since last many years and accused is doing business of transport. It is alleged that the complainant advanced friendly loan of an amount of Rs. 1,50,000/- to the accused and accused promised to repay the same in September 2016. It is alleged that the accused in discharge of his loan liability gave two cheques of Rs. 1,00,000/- and Rs.50,000/-, i.e. cheques in question bearing nos. 712377 and 712378 dated 22.10.2016 and 28.10.2016 respectively, both drawn on Corporation Bank, Palam Branch, Delhi to complainant towards repayment of loan, with an assurance of their encashment. The complainant presented the cheques in his account maintained at Allahabad Bank, Bindapur Branch, Delhi, which were returned with the remarks "Funds Insufficient" vide bank return memos dated 19.01.2017. Thereafter, complainant served a legal notice dated 15.02.2017 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 his pre-summoning evidence, complainant examined himself on affidavit Ex. CW-1/A. He reiterated the contents of complaint and placed on record, original cheques of Rs.1,00,000/- and Rs.50,000/- i.e. cheques in question bearing no. 712377 and 712378 dated 22.10.2016 and 28.10.2016 respectively drawn on Corporation Bank, Palam Branch, Delhi as Ex. CW-1/1 and Ex.CW-1/2 respectively, cheque returning memos dated 19.01.2017 as Ex. CW-1/3 and Ex.CW-1/4 respectively, legal demand notice dated 15.02.2017 as Ex. CW-1/5, Jugal Kishore vs Satish Kumar Jain CC No. 4385/17 Page no. 2 of 11 receipts of speed post and registered post as Ex. CW-1/6 (colly) and returned envelopes as Ex.CW-1/7 (colly).
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 05.09.2017 to which he pleaded not guilty and claimed trial. He admitted his signatures on the cheques in question, however denied filling in any of the remaining details. He stated that he had handed over the cheques to Sh. Vinod Tiwari, who was a person known to him. However, he did not know his address. He had taken loan of Rs.1,00,000/- from Vinod Tiwari and handed over the cheques in question to him as security. He did not know as to how the cheques came in the hands of present complainant. He did not know the complainant and had never met him. He denied receipt of legal notice.
5. The accused moved an oral prayer to cross-examine the complainant witnesses which was allowed vide order dated 01.11.2017. However, thereafter despite grant of several opportunities to cross examine the complainant, accused failed to avail the same and vide order dated 08.02.2019, right of accused to cross examine the complainant was closed vide court order. Vide separate statement of complainant, complainant's evidence was closed.
6. Thereafter, accused moved an application u/s.311 CrPC for recalling the complainant for cross examination. Vide order dated 06.03.2019, the application was allowed subject to cost and accused was granted one single opportunity to cross examine the complainant on the next date of hearing. However, accused did not appear on the next date of hearing i.e. 09.04.2019 and thereafter, on the next date i.e. 04.06.2019 as well, accused expressed his inability to cross examine the complainant as his counsel was not available and also stated that he could not pay the costs. Thus, vide order dated 04.06.2019, the right of accused to cross examine the complainant u/s.311 CrPC was also closed.
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7. The statement of accused under Section 313 Cr.P.C. was recorded in which all the incriminating evidence were put to him to which accused reiterated the stand taken by him in answer to notice U/s 251 Cr.P.C. He stated that he had repaid Rs.74,000/- to Sh. Vinod Tiwari in cash. He did not have any receipt regarding the repayment made to Sh. Vinod Tiwari. There was no written agreement of loan between him and Sh. Vinod Tiwari. He had also given a blank signed paper to Sh. Vinod Tiwari. Complainant had misused the cheque in question.
8. Accused preferred to lead evidence in his defence and had examined himself as DW-1. The witness was cross-examined by counsel for complainant. Accused also arrayed one Sanjay Sharma and one Heeranand as defence witnesses in the list of witnesses. However, accused did not take any steps for production of these witnesses before the court despite repeated opportunities for the same. Thus, vide order dated 01.11.2019, the defence evidence was closed vide court order. Thereafter, accused moved application u/s.311 CrPC for summoning the witness Heeranand as defence witness. However, considering the conduct of accused and on merits, the application was dismissed vide detailed order dated 30.01.2020.
9. Thereafter, matter was listed for final arguments. It was argued by the Ld. counsel for 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. He argued that accused never gave reply to the legal demand notice. He also argued that the accused did not produce any record regarding the alleged loan taken from Vinod Tiwari and its repayment. He also argued that accused never filed a complaint against the complainant for misuse of cheques in question. It was argued that accused failed to raise the probable defence to disprove the case of complainant Jugal Kishore vs Satish Kumar Jain CC No. 4385/17 Page no. 4 of 11 and to rebut the presumption under Section 139 NI Act. Therefore, accused be convicted for the offence under Section 138 of the Act.
10. Per contra, ld. Counsel for accused stated that he did not want to lead any final arguments in the matter. It was noted that on the last date of hearing also, same ld. Counsel for accused appeared and one last and final opportunity was granted for final arguments to the accused. Thus, in view of submissions made, arguments on behalf of accused were treated as NIL vide order of even date i.e. 19.02.2020.
11. I have perused the entire record as well as evidence led by the complainant as well as by the accused.
12. 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.
13. 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 Jugal Kishore vs Satish Kumar Jain CC No. 4385/17 Page no. 5 of 11 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".
14. 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].
15. In the present case, accused has admitted his signatures on the cheque in question, in the notice U/s 251 Cr.P.C. He did not deny his signature on the cheque in 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 Jugal Kishore vs Satish Kumar Jain CC No. 4385/17 Page no. 6 of 11 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 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.
16. In the present case, the complainant by way of an affidavit led his own evidence testifying that cheques were issued to him in discharge of liability, after he had advanced loan of Rs. 1,50,000/- to the accused. The cheques in question, dishonour memo of the cheques and legal demand notice were exhibited on record.
17. The principle defence taken by the accused as brought out from his statement U/s 313 Cr.P.C and his examination in chief as DW-1, is that he did not know the complainant and had no transactions with him. He had given the cheques in question to one Vinod Tiwari as blank signed security cheques for the loan of Rs.1,00,000/- taken from Vinod Tiwari. He had also given a blank signed paper to Vinod Tiwari. He had repaid Rs.74,000/- to Vinod Tiwari in cash. He did not know how complainant got into possession of his cheques. He denied any liability towards complainant.
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18. However, perusal of evidence shows that said version of accused is not substantiated by any evidence. In his testimony, accused i.e. DW-1 himself stated that he did not have any receipt regarding the repayment made to Vinod Tiwari in cash. Accused also did not produce any agreement or document regarding the alleged loan taken from Vinod Tiwari to show the existence of any such loan or it's connection with the cheque in question. The accused did not examine Vinod Tiwari or any other person in this regard. He also admitted in his cross examination that he had not filed any police complaint till date against complainant or Vinod Tiwari for misuse of his cheques.
19. It is also pertinent to note that the cheques in question have been dishonored vide cheque returning memos dated 19.01.2017 for reason "Funds Insufficient" (Ex. CW-1/3 and Ex.CW-1/4) and not for any other reason. There is no explanation or evidence as to why, if the cheques were not returned to accused even after repayment of substantial amount of loan to Vinod Tiwari, stop payment instructions were not issued by accused to bank. It is also not the case of accused that he gave any written notice to said Vinod Tiwari demanding the return of his cheques. In light of the above, the version of accused regarding issuance of cheques to Vinod Tiwari for loan taken from him which were misused by complainant, is not credible.
20. Regarding the averment that cheques were given as blank signed cheques which were misused by complainant, the same is also not a credible defence. Even if for the sake of argument, it is considered that the accused gave a blank signed cheques, once accused has admitted his signatures on the cheques he cannot escape his liability on the ground that the particulars have not been filled in by him, or that signatures on cheques and the contents are filled in different writings and inks. When such a cheque containing blanks is signed and handed over, it means that the person signing it has given implied authority to the holder of the cheque, to fill up the blank which he has left. It has been clearly laid down in Section 20 of Negotiable Instruments Act 1881, that where one person signs Jugal Kishore vs Satish Kumar Jain CC No. 4385/17 Page no. 8 of 11 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". 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."
In the case of Moideen v. Johny 2006 (2) DCR 421, it has been held that when a blank cheque is issued, the drawer gives an authority to the person to whom it is issued, to fill it up at the appropriate stage with necessary entries and to present it to the bank. Thus, the accused can not dispute the contents of the cheques in question.
21. It is also pertinent to note that the testimony of complainant i.e. CW-1 regarding the loan transaction and issuance of cheques in question by the accused towards discharge of loan liability, has gone unrebutted at trial as no cross examination of the complainant was conducted. Reliance in this regard can also be placed on decision of Hon'ble High Court of Delhi, in Sanjay Arora V. Monika Singh, Crl. Appeal No. 98/2017, dated 31.05.2017, wherein it was observed:
"Mere admission of the complainant that he was earning only Rs. 12,000 per month from small business or his failure to file income tax returns, or his omission to produce the bank passbook or to examine Chhotu as a witness in corroboration, are inconsequential. In order to rebut the statutory presumption, it was the burden of the respondent to prove the facts she had pleaded in answer to the notice under Section 251 Cr.P.C. No material in support of such plea having come on record, the statutory presumption under Section 139 Negotiable Instruments Act in the case at hand has not been rebutted."
In the present case also the defence taken by the accused is that he had given the cheque in question to Vinod Tiwari as security for loan taken from him. However he has failed to produce any material in support of his plea of defence.
22. The accused has also denied receipt of legal demand notice under section Jugal Kishore vs Satish Kumar Jain CC No. 4385/17 Page no. 9 of 11 138 of the Act, in answer to notice u/s.251 CrPC and in his statement u/s.313 CrPC. Furthermore, it is worth noting that the address of the accused as mentioned in legal demand notice is RZF-549, Gali no.42, Sadh Nagar-II, Palam, Delhi, whereas the address mentioned in notice under section 251 Cr.P.C., statement of accused under section 313 Cr.P.C, testimony as DW-1 and his bail bonds is RZF-536, Gali no.42, Sadh Nagar-II, Palam, Delhi. The same does not point to any substantial difference in the address. 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. It is also pertinent to note that the accused did not take any such defence of non service of legal notice, during his testimony as DW-1 and complainant i.e. CW-1 was also not cross examined on this aspect.
23. The above shows that legal notice was sent at correct address of accused. Once the legal notice is 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 legal notice sent to address of accused was 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."
24. 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 Jugal Kishore vs Satish Kumar Jain CC No. 4385/17 Page no. 10 of 11 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 defence of non-service of legal notice is without substance.
25. In view of the above, this court is of the considered opinion that apart from not raising 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, return memo and the legal notice 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 cogent defence evidence. There is sufficient material on record to conclude that complainant has successfully proved his case beyond reasonable doubt.
26. Accordingly, the accused is convicted for the offence under Section 138 of Negotiable Instruments Act, 1881.
27. Let the convict be heard on quantum of sentence.
28. Copy of Judgment be supplied to the convict free of cost.
Digitally signed MRIDUL by MRIDUL
GUPTA
GUPTA Date: 2020.03.07
13:25:48 +0530
ANNOUNCED IN THE OPEN COURT (MRIDUL GUPTA)
TODAY i.e. 07th MARCH, 2020 METROPOLITAN MAGISTRATE
DWARKA DISTRICT COURTS/ DELHI
Jugal Kishore vs Satish Kumar Jain CC No. 4385/17 Page no. 11 of 11