Delhi District Court
Geeta Sharma vs . R. K. G. Services on 10 May, 2018
IN THE COURT OF SHRI ARUN KUMAR GARG, METROPOLITAN MAGISTRATE(NI Act)-03 (SOUTH):SAKET COURTS:NEW DELHI CC NO: 475420/16 Geeta Sharma D/o Sh. Trilok Chand Sharma R/o F-226, Village Lado Sarai, New Delhi - 110030 .........Complainant Through his attorney Love Kumar Sharma S/o Sh. Trilok Chand Sharma R/o F-226, Village Lado Sarai, New Delhi - 110030 Versus 1.R. K. G. Services Through its Directors Sh.Raman Kumar Grover, 107, Ground Floor, World Trade Centre, Barakhamba Lane, Babar Lane, Connaught Place, New Delhi - 110001 2. Raman Kumar Grover Director, M/s RGK Services, 4, Munirka Marg, Near Vasant Continental, Vasant Vihar, New Delhi Also at: Raman Kumar Grover, Flat No.193, GH-1, Geeta Sharma Vs. R. K. G. Services Judgment dated 10.05.2018 Comp. Case No.475420/16 Page 1 of 22 Milap Apartments, Near White House, Paschim Vihar, Sunder Vihar, New Delhi .......Accused Offence Complained of or proved : Under section 138 of Negotiable Instruments Act, 1881 Plea of the Accused : Pleaded not guilty Date of filing : 04.09.2010 Date of Institution : 07.09.2010 Date of reserving judgment/order : 02.05.2018 Final Order/Judgment : Convicted Date of pronouncement : 10.05.2018 JUDGMENT:
BRIEF FACTS AND REASONS FOR THE DECISION OF THE CASE:-
1. By this Judgment, I will dispose of the present complaint under Section 138 of the Negotiable Instruments Act, 1881 filed by the complainant through her attorney Sh.Love Kumar against accused on account of dishonour of cheques bearing number 531806 dated 23.05.2010 for a sum of Rs. 5,40,000/- drawn on ING Vysya Bank Ltd. Connaught Place Branch, New Delhi, in favour of complainant (hereinafter referred to as the cheque in question).
2. Brief case of the complainant as per complaint is that in the month of October 2009, accused lured the complainant to invest for Geeta Sharma Vs. R. K. G. Services Judgment dated 10.05.2018 Comp. Case No.475420/16 Page 2 of 22 trading in MCX Exchange, whereupon the complainant had invested a sum of Rs.5,40,000/- with the accused persons. Being in urgent need of money, complainant demanded the money back from the accused alongwith interest and considering the urgency, accused issued cheque in question in favour of complainant for a sum of Rs.5,40,000/- which on presentation was returned unpaid with remarks "Funds Insufficient" vide return memo dated 28.06.2010 and since, the accused have failed to make the payment of cheque amount to the complainant despite service of legal notice of demand dated 22.07.2010, according to complainant, they have committed the offence under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881.
3. Upon receipt of the complaint, cognizance of the offence was taken and the accused were summoned. Accused no.1 was served by way of affixation whereas accused no.2 was produced from JC on issuance of production warrants in his name as he was in custody in another case pertaining to FIR No.68/10, PS- Barahkhambha Road. He was admitted to bail vide order dated 11.08.2016 and thereafter, a separate notice explaining accusations Geeta Sharma Vs. R. K. G. Services Judgment dated 10.05.2018 Comp. Case No.475420/16 Page 3 of 22 to the accused under Section 138 of the Negotiable Instruments Act, 1881 was served upon him in terms of Section 251 Cr.PC on 05.09.2016. Accused did not plead guilty and claimed trial. Simultaneously the defence disclosed by the accused was recorded by the court, wherein, the accused had denied that the complainant had invested any amount with the accused. He expressed his ignorance about the fact as to how the cheque in question had come in possession of the complainant. He denied the receipt of legal notice and also the issuance of cheque in question in favour of complainant. Accused was thereafter allowed to cross examine the attorney of complainant in terms of Section 145(2) of NI Act vide order dated 05.09.2016. Attorney of Complainant has thereafter examined himself as CW-1 and adopted his pre- summoning evidence by way of affidavit Ex. CW-1/1 alongwith following documents:
Ex. CW-1/A : SPA Dated 23.08.2010 executed by complainant in favour of CW-1.
Ex.CW-1/B : Original cheque in question.
Ex.CW-1/C: Original Cheque return memo dated 28.06.2010. Ex.CW-1/D : Legal Notice dated 22.07.2010 Ex. CW-1/E Colly: Postal receipts regarding dispatch of legal Geeta Sharma Vs. R. K. G. Services Judgment dated 10.05.2018 Comp. Case No.475420/16 Page 4 of 22 notice.
Ex.CW-1/F: UPC receipt regarding dispatch of legal notice. Ex.P-1: Present Complaint u/s 138 of NI Act.
4. CW-1 was duly cross-examined by Counsel for accused and thereafter on a separate statement of AR of complainant, CE was closed vide order dated 23.01.2017. Statement of both the accused under Section 313 Cr.P.C. was thereafter recorded on 22.01.2018, putting entire incriminating evidence against them and the accused have substantially reiterated the defence taken by them during their plea u/s 251 Cr.P.C. Since the accused had chosen to lead evidence in their defence, matter was adjourned for DE. However, accused have failed to lead any DE despite repeated opportunities and hence, vide order dated 26.03.2018, opportunity of accused to lead DE was closed and matter was adjourned for final arguments.
Final arguments on behalf of the parties were thereafter heard on 02.05.2018. Besides, written arguments were also filed on behalf of the accused.
5. It is submitted by counsel for complainant that the complainant has been able to prove all the ingredients of offence under Section 138 Geeta Sharma Vs. R. K. G. Services Judgment dated 10.05.2018 Comp. Case No.475420/16 Page 5 of 22 of the NI Act against the accused beyond reasonable doubts by way of uncontroverted testimony of CW-1 by way of Ex.CW-1/1 which is duly corroborated by documentary evidence in the form of Ex. CW-1/A to Ex. CW-1/F. He submits that nothing substantial could come in favour of accused during cross-examination of CW- 1 and accused has failed to probablize his defence even on the touchstone of preponderence of probabilites. He submits that the accused has failed to prove his defence that cheque in question was stolen in as much as accused has not lodged any complaint against the complainant with the police or the court. Even the second defence taken by accused regarding non-deposition of amount by the complainant with the accused according to him is not proved by the accused in as much as accused has failed to lead any evidence in support of his aforesaid plea despite repeated opportunities. Even otherwise, according to him, the said defence is highly improbable in as much as accused have failed to explain as to why the cheque in question was issued by him in favour of complainant if no investment had been made by the complainant with the accused. He further submits that during cross examination Geeta Sharma Vs. R. K. G. Services Judgment dated 10.05.2018 Comp. Case No.475420/16 Page 6 of 22 of CW-1 it has not been disputed by the accused that the legal notice of demand was sent by the complainant to the correct address of the accused and hence, there is presumption regarding service of legal notice of demand upon the accused in terms of Section 27 of General Clauses Act. He further submits that since the accused has failed to respond to the legal notice of demand, all the averments made by the complainant in his legal notice should be deemed to have been admitted by the accused. He has thus prayed for conviction of the accused u/s 138 of NI Act.
6. On the other hand, it is submitted by counsel for accused that the complainant has failed to prove his case by leading any cogent evidence and in fact the presumption, if any, arising in favour of complainant in terms of Section 118 and 139 of NI Act has been successfully rebutted by the accused by way of cross examination of CW-1. He submits that the complainant has failed to prove the alleged investment of Rs.5,40,000/- by her with the accused. He submits that the complainant has failed to produce any receipt regarding deposition of a sum of Rs.5,40,000/- by her with the accused. According to him, the complainant has also failed to Geeta Sharma Vs. R. K. G. Services Judgment dated 10.05.2018 Comp. Case No.475420/16 Page 7 of 22 prove as to how the cheque in question had come in possession of the complainant in as much as, as on the date of alleged issuance of cheque in question by the accused, he was absconding in FIR No.68/10 dated 01.05.2010 and his office at World Trade Centre had been sealed by the EOW whereas the possession of his residence of Vasant Vihar had been taken by his landlord. It is further submitted by him that the complainant has failed to prove the service of legal notice of demand upon the accused in view of the defence of the accused that during the relevant period his office was sealed by EOW and his residence of Vasant Vihar was in possession of his landlord whereas his residence of Paschim Vihar was locked. It is further submitted by him that the complainant has failed to examine any independent witness to prove the allegations levelled by him against the accused in his complaint and in fact, even the newspaper through which the complainant had allegedly been lured by the accused has not been produced by the complainant. It is further submitted by counsel for accused that since the complainant has not reflected the alleged invested amount in her ITR, the amount if any invested by the complainant Geeta Sharma Vs. R. K. G. Services Judgment dated 10.05.2018 Comp. Case No.475420/16 Page 8 of 22 with the accused was unaccounted money and no complaint u/s 138 of NI Act is maintainable against the accused on account of dishonour of cheque allegedly issued in discharge of liability to repay such unaccounted money. He has thus prayed for acquittal of both the accused under Section 138 of the Negotiable Instruments Act. In support of his submissions, counsel for accused has relied upon the following judgments:
(i) Krishna Janardhan Bhat v. Dattatraya G. Hegde, (2008) 4 SCC 54
(ii) Sanjay Mishra Vs. Kanishka Kapoor @ NIKKI and Anr. 2009 (4) Mh.L.J. 155
(iii) S. K. Jain Vs. Vijay Kalra 2014 (2) Criminal Court Cases 370 (Delhi)
(iv) John K. Abraham Vs. Simon C. Abraham & Anr. 2014 (1) Criminal Court Cases 058 (SC)
(v) K. Prakashan Vs. P. K. Surendran 2007 Law Suit (SC) 1109
(vi) C. Antony Vs. K. G. Raghvan Nair 2002 Law Suit (SC) 1054
(vii) Kulvinder Singh Vs. Kafeel Ahmed 2013 Law Suit (Del) 2488
(viii) Pawan Singhal Vs. Gauri Shankar Deora and Another 2012 Law Suit (Del) 4729
(ix) Veena Rani Chabra Vs. Manju Rohida Criminal MC NO.933/2005 decided by Hon'ble Delhi High Court on 16.09.2008
7. I have heard the submissions made on behalf of the parties and have also perused the record. Before appreciation of evidence led on behalf of the parties, at the very outset, I would like to narrate the legal principles, relevant for adjudication of complaint under Geeta Sharma Vs. R. K. G. Services Judgment dated 10.05.2018 Comp. Case No.475420/16 Page 9 of 22 Section 138 of NI Act, laid down in several judgments of Hon'ble Supreme Court of India and of various High Court including our own High Court. In my considered opinion, it is now well settled that in case the accused admits or the complainant is able to prove his signatures on the cheque in question, there arises a presumption in terms of Sections 118(a) and 139 of the NI Act to the effect that the same was issued by him for valid consideration and in discharge of legally enforceable debt or liability towards the complainant. Though a Division Bench of Hon'ble Supreme Court of India in Krishna Janardhan Bhat v. Dattatraya G. Hegde, (2008) 4 SCC 54 has observed that the presumption under Section
139 of the NI Act does not go to the extent of presuming the existence of a legally recoverable debt, however in a later judgment titled as Rangappa v. Sri Mohan, (2010) 11 SCC 441 a larger Bench of Hon'ble Supreme Court has expressed its disagreement with the aforesaid view holding that there is also an initial presumption regarding the existence of legally recoverable liability under Section 139 of the NI Act. Further, it has been held that the presumptions under Sections 118(a) and 139 of the NI Act Geeta Sharma Vs. R. K. G. Services Judgment dated 10.05.2018 Comp. Case No.475420/16 Page 10 of 22 are rebuttable in nature and for rebuttal of the same accused need not even step into the witness box as the accused can rebut the same by placing reliance on the material brought on record by the complainant. It is also well settled legal position that the presumptions can be rebutted even by raising presumptions of fact and law on the basis of material available on record. The aforesaid propositions of law have been laid down by Hon'ble Supreme Court in M/s Bharat Barrel & Drum Mfg. Co. v. Amin Chand Pyarelal (1999) 3 SCC 35, Krishna Janardhan Bhat's case (Supra) and Rangappa v. Sri Mohan's case (Supra). It is further well settled in the aforesaid judgments that the standard required from the accused to prove his defence is preponderance of probabilities and accused need not prove his defence beyond reasonable doubts.
8. In view of the aforesaid legal principles culled out from the authoritative pronouncements of Hon'ble Supreme Court, in my considered opinion, reliance by Ld. Counsel for the accused on the observations of Hon'ble Supreme Court in Krishna Janardan's case (Supra) that the presumption under Section 139 of NI Act Geeta Sharma Vs. R. K. G. Services Judgment dated 10.05.2018 Comp. Case No.475420/16 Page 11 of 22 does not go to the extent of presuming the existence of legally enforceable debt is highly misplaced in as much as the aforesaid legal position sought to be laid down in the aforesaid judgment was specifically overruled by a larger bench of Hon'ble Supreme Court in Rangappa's case (supra). Similarly, the observations made by Hon'ble Bombay High Court in Sanjay Mishra Vs. Kanishka Kapoor (Supra) are based on the law laid down by Hon'ble Supreme Court in Krishna Janardhan Bhat's case (Supra) which has been specifically overruled by Hon'ble Supreme Court in a subsequent decision in Rangappa's case (Supra) and hence the same is of no assistance to counsel for accused. In none of the remaining judgments relied upon by Ld. Counsel for the accused any principle contrary to the legal principles reproduced hereinabove has been laid down by Hon'ble Superior Courts and each of the cases has been decided by Hon'ble Superior Courts by applying the very same principles to the peculiar facts and circumstances of each case and facts of none of the cases are identical to the facts of present case though incidentally one or two facts in each of the cases can be similar to the present case. It is Geeta Sharma Vs. R. K. G. Services Judgment dated 10.05.2018 Comp. Case No.475420/16 Page 12 of 22 well settled legal position that law of precedent needs to be applied with care and circumspection in criminal cases in as much as facts of no two cases can be identical and the difference in even one fact can change the decision of the court. Thus, though there cannot be any dispute about the propositions of law laid down in the judgments relied upon by Ld. Counsel for the accused except to the extent clarifications have already been given in the opening part of this para, however, decision of each case has been rendered on the basis of peculiar fact situation before the concerned Courts none of which is identical to the fact situation before this court and hence the court shall proceed to decide the present case in the light of legal principles laid down by Hon'ble Superior Courts in the aforesaid cases uninfluenced by the final decision in said cases.
9. Now let us examine the facts of case in hand in the light of aforesaid legal principles. The complainant has categorically alleged in her complaint as well as evidence by way of affidavit of CW-1 that a sum of Rs. 5,40,000/- was invested by her on the basis of representation of complainant and when she demanded the amount back from the complainant being in need of money the Geeta Sharma Vs. R. K. G. Services Judgment dated 10.05.2018 Comp. Case No.475420/16 Page 13 of 22 cheque in question was issued by accused in favour of complainant which on presentation was dishonoured on account of insufficiency of funds in the bank account of accused and since the accused have failed to make the payment of cheque amount to the complainant despite service of legal notice of demand, they have committed the offence under Section 138 read with Section 141 of NI Act.
10.Accused no.2 appeared in response to summons and took a plea that he does not know how cheque in question came in possession of the complainant as he never issued the same in favour of complainant. He stated that he could not tell whether the cheque bears his signatures or not. He denied the receipt of legal notice of demand on the ground that during the relevant period he was absconding from his residence. A similar stand was taken by him during his examination under Section 313 Cr.P.C., however not only no evidence was led by him to prove the said plea taken by him but he has failed to probablize the said defence even by way of cross-examination of complainant's witness.
11.It is significant to note that CW-1 was duly cross examined by counsel for accused and the suggestions given by counsel for Geeta Sharma Vs. R. K. G. Services Judgment dated 10.05.2018 Comp. Case No.475420/16 Page 14 of 22 accused to CW-1 during his cross examination to the effect that the cheque in question had been taken by the complainant for the office of accused company after registration of FIR No.68/10 at PS-Barahkhambha Road and that the complainant had not deposited any amount with the accused and hence, accused was not liable to pay the cheque amount to the complainant were categorically denied by CW-1. Accused has failed to adduce any evidence to prove the stand taken by him by way of aforesaid suggestions.
12.There cannot be any dispute about the proposition of law laid down in the judgments relied upon by counsel for accused that in a criminal case u/s 138 of NI Act, it is not incumbent upon the accused to lead direct evidence in support of his defence and the presumption arising in favour of complainant in terms of Section 118 and 139 of NI Act can be rebutted by the accused even by way of cross examination of complainant's witness, however, whether or not the accused has been able to rebut the said presumption by way of cross examination of complainant's witness is a question of act which needs to be decided on the basis of facts and Geeta Sharma Vs. R. K. G. Services Judgment dated 10.05.2018 Comp. Case No.475420/16 Page 15 of 22 circumstasnces of each particular case. In view of the authoritative pronouncement of Hon'ble Delhi High Court in V. S. Yadav Vs. Reena (2010) 172 DLT 561, it is equally well settled that the suggestions given by accused and the statement given by him during examination u/s 313 Cr.P.C., cannot take the place of evidence of the accused.
13.In my considered opinion, during cross examination of CW-1, his testimony has largely remained uncontroverted. The observations made by Hon'ble Superior Courts in the judgments relied upon by counsel for accused regarding the non-disclosure of source of funds available with the complainant and non-disclosure of the loan transaction in the income tax returns and giving loan of huge amount in cash in violation of provisions of Section 269 SS of Income Tax Act being relevant factors in favour of the accused in a complaint u/s 138 of NI Act are not of any assistance to the accused in as much as in all the aforesaid cases, the accused had sought to elicit the aforesaid information from the complainant during his cross examination and the same was deliberately withheld by the complainant for which an adverse inference had Geeta Sharma Vs. R. K. G. Services Judgment dated 10.05.2018 Comp. Case No.475420/16 Page 16 of 22 been raised by the superior courts against the complainant, however, in the case in hand, no questions had been put by counsel for accused to CW-1 during his cross examination as to the source of funds of the complainant for investment with the accused and it was CW-1 who himself has volunteered that the requisit fund was arranged by him from his family whereafter no further question about the source of funds of family members of the complainant was put to the witness. It is significant to note that in a complaint case u/s 138 of NI Act in the wake of presumptions arising in favour of complainant u/s 118 and 139 of NI Act, it is not incumbent upon the complainant to disclose the source of funds in his complaint, however, if the complainant is confronted with the question about his financial capacity to advance loan/invest amount with the accused, complainant is required to truthfully answer the said questions and in case he or she fails to disclose the source of funds to the satisfaction of the court upon inquiry, presumption regarding existence of liability arising in favour of complainant can be said to have been rebutted on account of non- disclosure of source of funds coupled with the other material Geeta Sharma Vs. R. K. G. Services Judgment dated 10.05.2018 Comp. Case No.475420/16 Page 17 of 22 brought on record by the accused either by way of direct evidence or by way of cross examination of complainant corroborating the stand taken by the accused. However, in the case in hand, there had been no inquiry by counsel for accused from CW-1 about the source of funds of the complainant to make the investment with the accused and it was CW-1 who himself had disclosed the source after which no further question was asked from him regarding the financial capacity of the complainant or his family members to make investment with the accused.
14.The judgments relied upon by counsel for accused in support of his contention that any amount exceeding Rs.20,000/- could not have been advanced by the complainant to the accused in cash as the same would be in violation of provisions of Section 269 SS Of IT Act, in my considered opinion, are also not of any assistance to him in as much as Section 269 SS of IT Act provides penalty for the receiver of the loan exceeding Rs.20,000/- in cash and in the case in hand, complainant had not granted any loan to the accused but had made the investment with the accused on his representation. Thus, the provisions of Section 269 SS of IT Act Geeta Sharma Vs. R. K. G. Services Judgment dated 10.05.2018 Comp. Case No.475420/16 Page 18 of 22 are not attracted to the present case.
15.In my considered opinion, non-disclosure of an investment in the ITR per se cannot lead the court to a finding that the amount invested by the complainant with the accused was unaccounted money in as much as no such suggestion had been given by the accused to CW-1 during his cross examination. No doubt, non- disclosure of a transaction involving investment/loan of a huge amount in the ITR is one of the factors in favour of the accused which coupled with the other factors can lead the court to come to a conclusion that the presumption regarding existence of liability arising in favour of complainant stands rebutted in a particular case. However, in my considered opinion, the aforesaid factor by itself is not sufficient to rebut the presumption arising in favour of complainant in terms of Section 139 of NI Act.
16.Accused has failed to specifically deny his signatures on the cheque in question and though, he has tried to take a stand that the remaining particulars in the cheque are not in his handwriting, however, he has failed to probablize the aforesaid plea/defence on record particularly in view of the fact that all the particulars in the Geeta Sharma Vs. R. K. G. Services Judgment dated 10.05.2018 Comp. Case No.475420/16 Page 19 of 22 cheque in question on a bare perusal appears to be in the same ink and the handwriting. Besides, it is highly improbable that the accused would not have lodged any complaint against the complainant, if the cheque in question would have been taken by the complainant from his office without his consent and knowledge and the same would not have been issued by the accused in favour of complainant. The accused has failed to probablize the aforesaid defence even on the touchstone of preponderence of probabilities and hence a presumption u/s 118 and 139 of NI Act arises in favour of complainant which, as has already been observed hereinabove, accused have failed to rebut even by preponderence of probabilities.
17.Though the accused has denied the receipt of legal notice of demand by taking a plea that he had been absconding from his residence, however, he has failed to lead any evidence in support of his aforesaid plea. It is not even the case of the accused that the notice Ex.CW-1/C was not sent to his correct address and his only plea is that one of the addresses of the accused to which the notice was sent was sealed whereas the possession of another address was Geeta Sharma Vs. R. K. G. Services Judgment dated 10.05.2018 Comp. Case No.475420/16 Page 20 of 22 taken by the landlord and he was absconding from the third address. Under the aforesaid circumstances, in my considered opinion, there arises a presumption in terms of Section 27 of General Clauses Act in favour of complainant regarding service of legal notice of demand upon the accused and since the accused has failed to reply to the aforesaid legal notice of demand, an adverse inference needs to be raised against the accused regarding admission by him of all the averments made by the complainant in the aforesaid legal notice.
18.Merely because the complainant did not remember the name of the newspaper in which he had seen the advertisement of the accused before making the investment and he did not remember whether any receipt was issued by the accused in favour of complainant, in my considered opinion, is not sufficient to rebut the presumption arising in favour of complainant regarding existence of legally enforceable debt and issuance of cheque by the accused in discharge of aforesaid liability in terms of Section 139 of NI Act particularly when the accused has pleaded total ignorance about the fact as to how the cheque in question had come in possession Geeta Sharma Vs. R. K. G. Services Judgment dated 10.05.2018 Comp. Case No.475420/16 Page 21 of 22 of the complainant and he did not take any action against the complainant for taking the cheque from his office without his consent and knowledge and misusing the same.
19.In view of the aforesaid discussions, in my considered opinion, complainant has been able to prove all the ingredients of the offence u/s 138 of NI Act against the accused and accused have failed to rebut the presumptions arising in favour of the complainant u/s 118 and 139 of NI Act and 27 of General Clauses Act. Accused are thus, convicted for the offence under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881(as amended upto date).
20.Ordered accordingly.
21.Accused no.2 has already furnished PB and SB in sum of Rs.20,000/- each in terms of provisions of Section 437-A of Cr.P.C. and the same have been accepted and shall remain in force for a period of six months from today.
Announced in the Open Court on this 10th day of May, 2018. This Judgment consists of 22 signed pages.
Copy of the judgment be given to the convict free of cost.
(ARUN KUMAR GARG) Metropolitan Magistrate-03 (NI Act) (South) Saket Courts, New Delhi/10.05.2018 Geeta Sharma Vs. R. K. G. Services Judgment dated 10.05.2018 Comp. Case No.475420/16 Page 22 of 22