Delhi District Court
Pooja Finlease Ltd vs Rajnish Karki on 10 January, 2024
IN THE COURT OF MS. DIVYA SINGH
METROPOLITAN MAGISTRATE, DWARKA COURTS, NEW DELHI
Criminal Complaint No.:43280/2019
Pooja Finlease Ltd ......... Complainant
Versus
Rajnish Karki ......... Accused
1. Name & address of the complainant: Pooja Finlease Ltd.
Office at KLJ
Complex-1
Plot no.70, B-39 Shivaji
Marg,
(opposite Moti Nagar
Police Station)
Najafgarh Road,
New Delhi-15
(AR Brajesh Pandey)
2. Name & address of the accused : Rajnish Karki
s/o Sh. J.S. Karki r/o H.
No.L-1/13, Hauz Khas
Enclave, New Delhi-110016
Smt. Manish Rajnish Karki,
w/o Mr. Rajesh Karki, r/o H.
No.L-1/13, Hauz Khas
Enclave, New Delhi-110016
3. Offence complained of : U/S 138, The
Negotiable Instruments
Act,1881.
4. Date of Institution of case : 02.12.2019
5. Plea of accused : Pleaded not guilty.
6. Final order : Convicted
7. Date of decision of the case : 10.01.2024
CC No. 43280/2019 Pooja Finlease Ltd. Vs. Rajnish Karki 1/26
JUDGMENT
1. Vide this judgment, I shall dispose of the aforementioned complaint case as filed by the complainant, Pooja Finlease Ltd. . (hereinafter referred to as the complainant) against accused, Rajnish Karki (hereinafter referred to as the accused). The present complaint has been filed against the accused u/s 138 of Negotiable Instrument Act, 1881 (hereinafter referred to as the NI Act).
2. The brief facts as alleged by the complainant company in the complaint are that complainant is a company incorporated under Companies Act, 1956 and is a Non Banking Finance Company "NBFC" engaged in the business of lending money to borrowers via, car loans, scooter loan, personal loan etc. It is further submitted in the complaint that November 2018 accused approached the complainant for a house loan and further loans at various point of time and on the assurance of the accused the cheque bearing no. 052834 dated 28.09.2019 for a sum of Rs. 3,53,42,000/- drawn on A/2A, Ground Floor, Green Park, New Delhi to discharge his liability towards the loan which included interest, overdue charges and bounce charges etc.
3. When the complainant presented the cheque in question to his banker ICICI Bank, the same was returned unpaid by the banker of the complainant vide cheque returning memo dated 02.10.2019 with the remarks "funds insufficient".
4. Thereafter, complainant served a Legal Demand Notice dated 02.11.2019 upon the accused through speed post asking accused to repay the loan CC No. 43280/2019 Pooja Finlease Ltd. Vs. Rajnish Karki 2/26 amount within 15 days from the receipt of the notice. Thereafter, the complainant filed the present complaint case with the submission that accused person be summoned, tried and punished according to law.
5. In order to prove his case, complainant in the pre-summoning evidence, examined himself as CW1 by way of affidavit Ex. CW1/1 and relied upon following documents which are as follows:
a) Authorisation letter is Ex. CW1/A(OSR)
b) The complaint is Ex. CW1/B
c) Copy of request letter is Ex. CW1/C(OSR)
d) Photocopy of drawdown receipt is Ex. CW1/D(OSR)
e) Photocopy of loan sanction letter is Ex. CW1/E(OSR)
f) Photocopy of loan agreement is Ex. CW1/F(OSR)
g) Photocopy of NOC letter is Ex. CW1/G(OSR)
h) Photocopy of agreement to deposit title deed is Ex. CW1/H(OSR)
i) Photocopy of sworn affidavit is Ex. CW1/I(OSR)
j) Photocopy of promissory note is Ex. CW1/J(colly)(OSR) (colly)
k) Photocopy of addendum loan agreement is Ex. CW1/K(OSR)
l) Photocopy of ledger statement of accused is Ex. CW1/L(OSR)
m) Certificate u/s 65B IEA is Ex. CW1/M
n) Cheque in question is Ex.CW1/N
o) Cheque returning Memo is Ex.CW1/O
p) Copy of legal demand notice Ex. CW1/P
q) Speed Post receipt is Ex.CW1/Q(colly)
r) Photocopy of tracking report is Ex.CW1/R(colly)
s) Certificate u/s 65B Indian evidence Act is 1/S
t) Reply of Legal demand notice is Ex. CW1/T
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5. Upon appreciation of pre-summoning evidence and upon finding prima facie case against the accused, the accused was summoned for an offence punishable under section 138 NI Act. Thereafter Notice u/s 251 Cr.PC was framed against the accused on 29.04.2022 to which he pleaded not guilty and claimed trial.
6. Thereafter, the application u/s 145(2) NI Act was orally moved by the counsel for accused and the same was allowed on 01.08.2022. Thereafter, complainant was cross examined by counsel for accused on 30.09.2022 and 07.01.2023. No other witnesses were examined by the complainant. Thereafter the complainant evidence was closed on 07.01.2023 and matter was listed for statement of accused u/s 313 Cr.PC.
7. Statement of accused was recorded u/s 313 Cr.PC on 20.02.2023, wherein all the incriminating circumstances which were against the accused were put to him to which accused stated that he owed no liability towards the complainant. Accused stated that he had submitted the cheque in question on 05.01.2019 for the purpose of KYC with a loan application of Rs. 35,00,000/- and the said transaction was aborted and the cheque in question with other documents were left in possession of the complainant. Accused admitted receiving of legal demand notice and signing of cheques. Accused denied filling of particulars.
8. Thereafter, matter was listed for Defence Evidence. In DE, accused examined himself as DW1. Thereafter DE was closed on 29.04.2023 and matter was fixed for final arguments.
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9. Final arguments were heard at length from both the parties, the evidence led by the parties carefully considered and record thoroughly perused.
10.Before proceedings to the merits of the case, it is important to lay down the basic provision of Section 138 of NI Act,1881. In order to ascertain whether accused has committed offence u/s 138 NI Act the following ingredients have to be proved which are as follows:
A person must have drawn a cheque on an account maintained by him in a bank for payment of a certain sum of money to another person from out of that account for the discharge of any legally enforceable debt or liability;
cheque has been presented to the bank within a period of three months from the date on which it is drawn or within the period of its validity whichever is earlier;
That cheque has been 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;
The payee or the holder in due course of the cheque has made a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 30 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and 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.
11. It becomes imperative to mention that Section 139 of NI Act provides a statutory presumption in favour of the drawee that the cheque was issued to him in discharge of a debt or other liability of a legally enforceable nature. Also, the said provision must be read along with Section 118 of NI Act which states that every negotiable instrument is presumed to have been drawn and accepted for consideration. That said, what follows is that trial CC No. 43280/2019 Pooja Finlease Ltd. Vs. Rajnish Karki 5/26 under section 138 NI Act is structured on the premise of the reverse onus of proof theory since the offence is a document based technical one. The journey of evidence begins not from the home of the prosecution story but from the point of the defence. The presumptions carved out in favour of the complainant are those of law and not those of facts.
12. In this regard, reliance can be placed on K. N. Beena v.Muniyappan (AIR 2001 SC 2895), it was observed as follows: -
"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 vs. Bratindranath Banerjee reported in (2001) 6 SCC 16 has also taken an identical view."
The Hon'ble Supreme Court, in the case of Hiten P. Dalal vs. Bratindranath Banerjee (AIR 2001 SC 3897), observed as follows:
"Because both Sections 138 and 139 require that the Court "shall presume" the liability of the drawer of the cheques for the amounts for which the cheques are drawn, as noted in State of Madras vs. A. Vaidyanatha Iyer, (AIR 1958 SC 61), it is obligatory on the Court to raise this presumption in every case where the factual basis for the raising of the presumption had been established. It introduces an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the accused (ibid)."
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 NI Act can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque CC No. 43280/2019 Pooja Finlease Ltd. Vs. Rajnish Karki 6/26 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."
13. Further, it is a settled position that when an accused has to rebut the presumption under Section 139 NI Act, the standard of proof for doing so is that of "preponderance of probabilities".
As held in Rangappa vs. Srimohan [(2010) 11 SCC 441], the Hon'ble Supreme Court has observed:
"Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of preponderance of probabilities. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own."
14. Thus, as laid down in catena of decisions it is an established law that onus lies upon the accused to rebut the presumption and to establish that cheque in question was not given in respect of any debt or liability, with the standard of proof being preponderance of probability. Therefore, it becomes critical to examine whether the explanation of the accused coupled with the evidence on record is sufficient to dislodge the presumption envisaged by Section 118 & 139 of NI Act.
15. Being cumulative, it goes without saying that it is only when all the aforementioned ingredients are satisfied that the person who had drawn the cheque can be deemed to have committed an offence u/s 138 NI Act. This criminal liability can be attached by proving each of the elements of the section under which liability is sought to be enforced. I shall now go on to CC No. 43280/2019 Pooja Finlease Ltd. Vs. Rajnish Karki 7/26 appreciate the evidence, documentary or oral, in the light of how compellingly it satisfies each of such ingredient, if it all.
Appreciation of Evidence and finding:
16. Presentation of the cheque in question for encashment and dishonourment of the cheque for the reason "funds insufficient" is not in dispute, as it is a matter of record proved by return memo dated 05.10.2019 Ex. CW1/O. Therefore, it is a matter of record that cheque in question dated 28.09.2019 Ex. CW1/N was presented within its validity period and dishonoured by the bank of accused.
Further, the signatures on the cheques in question have not been denied accordingly, this court raises presumption under section 118(a) r/w section 139 of NI Act that the cheque in question were issued by the accused to the complainant in discharge of legally enforceable debt or liability and it is now on the accused to raise a probable defence and to prove his case on the basis of preponderance of probabilities.
In this regard the following judgments can be relied upon:
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 NI 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."
CC No. 43280/2019 Pooja Finlease Ltd. Vs. Rajnish Karki 8/26
17. Also, In the case of M/S Kalamani Tex vs P. Balasubramanian Criminal Appeal No. 123 of 2021, the Hon'ble Supreme Court has held:
The Statute mandates that once the signature(s) of an accused on the cheque/negotiable instrument are established, then the 'reverse onus' clause become operative.
Let us examine the potency of the defences taken by the accused one at a time.
18. The first defence taken by the accused is that the cheque in question was given in a blank, signed manner on 05.01.2019 as security for the purpose of KYC along with the application for loan of Rs. 30 lakhs and not for discharging any legally enforceable debt or liability.
19. At the time of framing of notice u/s 251 Cr.PC the accused submitted that cheque in question was given by him in blank signed manner when the Complainant asked for the same for filling their forms for the purpose of KYC. Further, accused in his statement under section 313 Crpc and in his examination in chief as DW1 on 29.04.2023 he has stated that he had submitted the check in question 05.01.2019 for the purpose of security and for the purpose of KYC along with application for loan of rupees 35 lakhs.
20. On this point, it is profitable to mention the judgment of Sampelly Satyanarayana Rao v. Indian Renewable Energy Development Agency Ltd., (2016) 10 SCC 458, Sripati Singh vs. State of Jharkhand & Anr., 2021 SCC OnLine SC 1002 and Sunil Todi vs. State of Gujarat & Anr., 2021 SCC OnLine SC 1174, wherein it has been held that merely because CC No. 43280/2019 Pooja Finlease Ltd. Vs. Rajnish Karki 9/26 a cheque has been issued for only security purpose will not absolve the accused from the liability u/s. 138 NI Act. It has been further held that a cheque issued as security pursuant to a financial transaction cannot be considered as a worthless piece of paper under every circumstance. It has been held by the Honorable Court that the accused would very much be liable u/ s. 138 NI Act for issuance of a security cheque also, if on the date of the presentation of such cheque there has not been a prior discharge of debt, or if the cheque has not been given towards advance payment, the goods in respect of which have not been received by the other party, or if other than this there has been change in circumstances which precludes the complainant from depositing the cheque with the bank.
21. Also, the Hon'ble Delhi High Court in the case of Suresh Chand Goyal vs Amit Singhal Crl. LP 706/2014, held that:
"The contention that the cheque was issued only as security is preposterous. The cheque whether issued for payment of debt or as security makes no distinction in law. The cheque is a negotiable instrument, it may be that sometimes the cheque is issued with a request on the part of the drawer to defer the presentation of the cheque for some time to enable the drawer to make payment by cash and take back the cheque or allow time to arrange funds for encashment of cheque. When the amount is not paid as per oral understanding the payee is well justified to present the cheque for encashment. The cheque even if it is issued as a security for payment, it is negotiable instrument and encash able security at the hands of payee. Therefore, merely because the drawer contends that it is issued as security is not a ground to exonerate the penal liability under Sec.138 of the NI Act".
It was further held that: "There is no magic in the word "security cheque", such that, the moment the accused claims that the dishonoured cheque (in respect whereof a complaint under Section 138 of the Act is preferred) was given as a "security cheque", the Magistrate would acquit the accused. The expression "security cheque" is not a statutorily defined expression in the NI Act. The NI CC No. 43280/2019 Pooja Finlease Ltd. Vs. Rajnish Karki 10/26 Act does not per se carve out an exception in respect of a 'security cheque' to say that a complaint in respect of such a cheque would not be maintainable. There can be mirade situations in which the cheque issued by the accused may be called as security cheque, or may have been issued by way of a security, i.e. to provide an assurance or comfort to the drawee, that in case of failure of the primary consideration on the due date, or on the happening (or not happening) of a contingency, the security may be enforced. While in some situations, the dishonor of such a cheque may attract the penal provisions contained in Section 138 of the Act, in others it may not.
22. Therefore, the defence of the accused that cheque in question was issued as security cheque and not for liability has no force, even if the cheque in question was given for the purpose of KYC.
23. Also, the accused has not brought forth not even an iota of evidence to substantiate the version of giving the impugned cheque. In the absence of any reliable evidence, this defence version is established to be unsubstantiated and is thus, unbelievable. Further, no evidence has been led by the accused to in order to prove that the cheque in question was given for some different transaction and not for discharging of liability. The accused was also confronted with Exhibit CW1/T (reply to legal notice) during his cross examination as DW/1 on 29.04.2023 by the ld. Counsel for the complainant wherein he submitted that the fact that he was not clear with the terms of the loan and that he had submitted his blank signed cheque with the complainant on 05.01.2019 was not mentioned in his reply dated 19.11.2019 Exhibit CW1/T. He further submitted that he was aware of the fact that taking of the cheque from the perspective borrowers of loan is not the standard practise of KYC. Therefore, in view of the above discussion this defence of the accused holds no merit.
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24. Counsel for accused further submits that it is well settled principle, that for attracting provision u/s 138 NI Act, the cheque must have been issued for discharge of whole or part of any debt or other liability. During the final arguments, counsel for the accused submitted that the cheque in question was given as a part of KYC for an altogether different inchoate transaction of January 2019 and that it was not issued for discharge of whole or part of any debt or other liability.
25. It is pertinent to note that Section 139 of NI Act provide a statutory presumption that the cheque was handed over in respect of debt or other liability. Also, the said provision must be read along with Section 118 of NI Act which states that every negotiable instrument Act is presumed to have been drawn and accepted for consideration.
26. In case of K. N. Beena v. Muniyappan (AIR 2001 SC 2895), it was observedasfollows:-
27. "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.
28. The Hon'ble Supreme Court, in the case of Hiten P. Dalal vs. Bratindranath Banerjee (AIR 2001 SC 3897), observed as follows:
"Because both Sections 138 and 139 require that the Court "shall presume" the liability of the drawer of the cheques for the amounts for which the cheques are drawn, as noted in State of Madras vs. A. Vaidyanatha Iyer, (AIR 1958 SC 61), it is obligatory on the Court to raise CC No. 43280/2019 Pooja Finlease Ltd. Vs. Rajnish Karki 12/26 this presumption in every case where the factual basis for the raising of the presumption had been established. It introduces an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the accused (ibid)."
29. 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 asunder:
"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."
30. Thus, as laid down in catena of decisions it is an established law that onus lies upon the accused to rebut the presumption and to establish that cheque in question was not given in respect of any debt or liability, with the standard of proof being preponderance of probability. Therefore, it becomes critical to examine whether the explanation of the accused coupled with the evidence on record is sufficient to dislodge the presumption envisaged by Section 118 & 139 of NI Act.
31. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist, or their non- existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist.
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32. It will be utter disregard to the established principles of evidence, if the court accepts this evidence of the accused devoid of any documentary evidence to concrete the proof. The story of accused, in the absence of any credible evidence, cannot be taken as gospel truth.
33. For the sake of arguments, if one were to believe that cheque in question was in fact, given for security purpose and for the purpose of KYC for some other transaction, then also accused has failed to prove that it was infact given for some other transaction to the complainant on 05.01.2019.
34. In the present case, the onus to prove that the accused has not issued the cheque in question for discharge of any debt or liability in favour of the complainant, primarily lied on the accused. Section 103 of the Indian Evidence Act, 1872 enunciates that the person who asserts a fact must prove the same unless the law otherwise provides. An adverse inference can safely be drawn against the accused who has failed to adduce any credible evidence to show he indeed did everything within his power and control, as a prudent person would do to ensure that cheque tendered by him was not misused.
35. Another line of defence that the accused has taken is that he is not liable to pay the amount mentioned on the cheque in question as the amount on the cheque is greater than the debt due as on the date of the cheque in question.
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36. The Counsel for the accused during the final arguments has argued that the only amount that has been disbursed from the complainant is Rs. 2,85,07,500/- and that interest can only be calculated on that amount. He further submits that an amount of Rupees 3.15 crores was never received by the accused.
37. The counsel for the accused also argued that as per the Ledger statement Exhibit CW 1 / L, the cheque amount is greater than the debt. He further submitted that the cheque amount is premised on faulty and inflated principal amount of Rupees 3.15 crores and that both the principal amount of Rs 3.15 crores and interest component of Rs 38,42,000 (@36%p.a.) have been wrongly quantified and that a sum of IN 2,80,55,000 was disbursed pursuant to the Loan Agreement dated 05.03.2019 and a sum of IN 4,52,500 was disbursed pursuant to the Addendum Loan Agreement dated 06.03.2019 and that the total disbursal amount is thus INR 2,85,07,500 (Rupees Two Crores Eighty-Five Lakhs Seven Thousand Five Hundred).
38. In this regard, Counsel for the complainant during his cross examination as CW1 dated 07.01.2023 has submitted that the exact figure is not mentioned in Exhibit CW 1/L as the same is Sub ledger that mentions the amount sanctioned and amount disbursed, and he had also tendered Loan account statement exhibit CW1/D1 which mentions the figure of Rs. 3,53,77,173/- as the figure, which was settled between the parties, and accused had issued the cheque in question for the payment of settled amount and the same includes interest imposed as well as the interest accrued upon the amount pending against the accused. Ld. Counsel for the accused also argues that the ledger statement CW1/D1 is inadmissible in evidence as it was tendered without a supporting certificate under CC No. 43280/2019 Pooja Finlease Ltd. Vs. Rajnish Karki 15/26 Section 65-B of the Evidence Act and has relied upon the Samsung India Electronics Private Limited vs. MGR Enterprises and others 2019.262 DLT. Counsel for the complainant had submitted that Exhibit CW 1/L is Sub ledger that mentions the amount sanctioned and amount disbursed. Even otherwise, the accused throughout the trial has not challenged the authenticity or genuineness of the Exhibit CW 1/L as tendered by the complainant and as per the complainant's version, exhibit CW 1 / L i.e. the sub Ledger shows the amount wherein the liability of the accused is showcased without interest on any penal charges. This version of the complainant has not been rebutted by the accused.
39. It is pertinent to mention here that accused in the present matter has admitted his signatures on the loan agreement Ex.CW-1/F OSR (colly), Promissory note Ex.CW-1/J and addendum loan agreement Ex.CW-1/K, in his cross examination dated 29.04.2023 by the ld. counsel for the complainant and also in his statement recorded under section 313 CRPC.
The relevant portion of cross examination of DW1 is as follows:
"At this stage, the witness is shown the copy of the request for loan dated 08.02.2019 Ex.CW-1/C, draw down request dated 02.03.2019 Ex.CW-1/D, loan sanction letter dated 05.03.2019 Ex.CW-1/E, loan agreement dated 05.03.2019 Ex.CW-1/F, Promissory note Ex.CW-1/J, addendum loan agreement Ex.CW-1/K, agreement related to deposit of title deeds Ex.CW-1/H, affidavit Ex.CW-1/I, copy of letter for issuance of NOC Ex.CW-1/G. The witness submits that all the above- said documents bears his signature."
40. Furthermore, the loan repayment schedule and the terms and conditions pertaining to loan as mentioned in the loan agreement Ex.CW-1/F OSR (colly), mentions about the imposition of penalty and delay charges in the CC No. 43280/2019 Pooja Finlease Ltd. Vs. Rajnish Karki 16/26 event of default of payment of EMIs. Therefore, when the loan agreement is already admitted by the accused there is implied admission to the terms and conditions governing the repayment of pending amount. Therefore, the calculation employed by the complainant to impute the liability upon the accused to the tune of amount mentioned upon the cheque in question is based upon the terms of the loan agreement already admitted by the accused.
41. Perusal of the loan agreement Ex. CW-1/F OSR (colly) shows that terms of repayment and default are clearly mentioned on which the accused has admitted his signature.
Relevant portion of the loan agreement Ex.CW-1/F OSR (colly) is as follows:
"4. Repayment of the Loan Amount
a) The borrower shall repay loan amount on and before 90 days from the date of this loan agreement.
b) The Borrower shall be liable to pay the Default Interest at the rate of 5 % per month over and above the normal interest rate on the Loan Amount in the event the Borrower fails to make the payment provided under this Clause. The Interest and Default Interest shall be compounded every month.
5. Default
a) No prior intimation will be given to the Borrower regarding its obligation to pay total amount. It shall be entirely the Borrower's responsibility to ensure prompt and regular payment.
b) It has been agreed by and between the parties that if the Borrower is not able to repay the amount within the stipulated time continuously on or before 90 days, then the Lender shall have right to adjust the loan, interest default interest thereon out of the net sale proceeds of the said Immovable Property, on the sole discretion of the Lender.
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c) In the event of any delay or default in the payment of loan amount, the Borrower shall deliver the possession of the said property to the Lender and thereafter the Lender shall have the right to sale/rent/lease out the Said Property and recover the Loan amount and adjust the loan, interest default interest from the rental/lease payment. The Borrower shall also be liable to pay incidental charges and costs to the Lender."
42. The accused has also admitted his signatures on the Promissory note Ex.CW-1/J OSR(colly) wherein the accused promises to pay the complainant a sum of Rs. 3,10,00,000/- along with interest of 3% per month.
43. As such the accused has never challenged or raised doubt over his signature on the Promissory note Ex.CW-1/J OSR(colly) and even admitted drawing of promissory note during his statement under section 313 Cr.PC. Accused in his examination in chief as DW1 on 29.04.2023 stated that he had sent a legal notice on 17.09.2019 to the complainant which is Exhibit DW1/1, asking the complainant to provide the documents as the complainant was demanding exorbitant interest. However, to prove the repayment of loan, accused has not brought on record any documentary evidence, account statement or receipts to show the repayment of loan to the complainant. In fact, the accused has himself admitted in his examination in chief as DW1 on 29.04.2023. That. He did not return the loan amount to the complainant as the terms of the loan were neither. Defined nor clear. In the absence of any material or record to show that the amount mentioned upon the cheque in question is not due towards the accused, there is no substance in the argument of the accused that he is not liable to pay the amount mentioned upon the cheque in question.
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44. As already discussed, the factum of loan agreement dated 05.03.2019 Ex.CW-1/F, addendum loan agreement Ex.CW-1/K, agreement related to deposit of title deeds Ex.CW-1/H, affidavit Ex.CW-1/I, copy of letter for issuance of NOC Ex.CW-1/G is duly admitted and remains uncontroverted.
45. As it is a settled principle of law of evidence that the best evidence in possession of the party must always be given. So, where the transaction sought to be proved is primarily evidenced by a writing, the writing itself must be produced or accounted for. Also, it is a well-established rule of law that whenever written instruments are involved, any other evidence (e.g. oral) is excluded from being used, either as substitute for such instrument or to contradict such instruments. Also, in Judgement dated 26th October, 2021 in the matter of V. Anantha Raju vs ANR V T.M. Narasimhan & Ors. (Civil Appeal No.6469 of 2021)Hon'ble Supreme Court made the following observations, "It has been held that when parties deliberately put their agreement into writing, it is conclusively presumed, between themselves and their privies, that they intended the writing to form a full and final statement of their intentions, and one which should be placed beyond the reach of future controversy, faith and treacherous memory"
46. Therefore, upon the admission of his signature by the accused on the loan agreement and in the absence of any other evidence to controvert the existence of the same, this defence of the accused will not aid him.
47. It is a settled law that to rebut the presumption of Section 139 NI Act, accused is required to lead cogent evidence with the standard of proof for CC No. 43280/2019 Pooja Finlease Ltd. Vs. Rajnish Karki 19/26 doing being that of preponderance of probabilities. In the present case, no such evidence has been led by the accused. Mere statement to this effect, without any oral or documentary evidence, doesn't inspire the confidence of this court. An adverse inference can safely be drawn against the accused who has failed to adduce any credible evidence to show that he indeed did everything within his power and control, as a prudent person would do to ensure that cheque tendered by him was not misused. Merely stating that he owes no liability to the complainant does not help the case of the accused.
48. Reliance can further be placed on the judgment of V.S. Yadav v.Reena CRL. A. NO. 1136 Of 2010 wherein it was held that:
"Mere pleading not guilty and stating that the cheques were issued as security, would not give amount to rebutting the presumption raised under Section 139 of N.I. Act. If mere statement under Section 313 Cr. P.C. or under Section 281 Cr. P.C. of accused of pleading not guilty was sufficient to rebut the entire evidence produced by the complainant/ prosecution, then every accused has to be acquitted. But it is not the law. 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."
49. Further, as observed by the Hon'ble Supreme Court of India in Sumeti Vij vs Paramount Tec Feb Inustries (CRA 292/2021) LL 2021 SC 149, "The statement of the accused recorded under 313 of the code is not a substantive evidence of defence, but only an opportunity to the accused to explain the circumstance appearing in the prosecution case of the accused".
50. Further, we cannot lose sight of the fact that loan agreement between the complainant and accused remained undisuputed. Therefore, even this point of the counsel for accused loses strength as loan agreement remains undisupted as discussed in the preceding paragraphs.
CC No. 43280/2019 Pooja Finlease Ltd. Vs. Rajnish Karki 20/26
51. Furthermore, the counsel for accused has vehemently argued during the final arguments that in the evidence affidavit the deposition has been given by one Mr Santosh as the AR of the complainant, however, the witness arrayed as CW1 is Mr Brijesh Pandey, who has been cross examined as CW1 British Monday is not a competent witness and his testimony cannot be relied upon.
52. In view of the aforesaid submissions made on behalf of both the parties, the point to be determined is, whether complainant has duly cleared the objections as raised by the counsel for accused.
Ld. counsel for the accused has relied upon A.C. Narayan v State of Maharashtra and Another reported in AIR 2014 SC 630
53. For better clarity, the guiding principles as laid down by the Honble Supreme Court in A.C. Narayan v State of Maharashtra and Another reported in AIR 2014 SC 630 (supra), are as follows:
"While holding that there is no serious conflict between the decisions in MMTC (supra) and Janki Vashdeo Bhojwani (supra), we clarify the position and answer the questions in the following manner:
(i) Filing of complaint petition under Section 138 of N.I Act through power of attorney is perfectly legal and competent.
(ii) The Power of Attorney holder can depose and verify on oath before the Court in order to prove the contents of the complaint.
However, the power of attorney holder must have witnessed the transaction as an agent of the payee/holder in due course or possess due knowledge regarding the said transactions.
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(iii) It is required by the complainant to make specific assertion as to the knowledge of the power of attorney holder in the said transaction explicitly in the complaint and the power of attorney holder who has no knowledge regarding the transactions cannot be examined as a witness in the case.
(iv) In the light of Section 145 of N.I Act, it is open to the Magistrate to rely upon the verification in the form of affidavit filed by the complainant in support of the complaint under Section 138 of the N.I Act and the Magistrate is neither mandatorily obliged to call upon the complainant to remain present before the Court, nor to examine the complainant or his witness upon oath for taking the decision whether or not to issue process on the complaint under section 138 of the N.I. Act.
(v) The functions under the general power of attorney cannot be delegated to another person without specific clause permitting the same in the power of attorney. Nevertheless, the general power of attorney itself can be cancelled and be given to another person.
Also as held in M/S MMTC Ltd & Anr vs M/S Medchl Chemicals & Pharma , that it is open to the Dejure complainant to seek permission of the court for sending any other person to represent the company in the court. Thus, even presuming, that initially there was no authority, still the company can, at any stage, rectify that defect.
54. Therefore, it is clear that complainant has to be a corporeal person who is capable of making a physical appearance in the court. But, when complaint is made in the name of a incorporeal person (like a company or corporation) it is necessary that a natural person represents such a juristic person in the court. It is further settled law that the court looks upon the natural person to be the complainant for all practical purposes.
55. Once the objection or challenge are raised against the existence of the company or its processes, it was incumbent upon the AR prosecuting the case of the complainant company to clear those objections. Complainant CC No. 43280/2019 Pooja Finlease Ltd. Vs. Rajnish Karki 22/26 in the present case, had filed an application seeking substitution of AR alongwith copy of board resolution which was allowed vide order dated 23.03.2021. Therefore, complainant has cleared any objection or dispute with regard to authority of the present AR to prosecute the present case. Accused has failed to bring out any infirmity in the said documents.
56. In the present case, accused has not been able to rebut the presumptions raised against him. Accused is not required to bring on record evidence in the affirmative, and he can rely on the evidence brought on record by the complainant, to either prove his case on the affirmative or perforate the case of the complainant, to display to the court that the same does not pass the scrutiny of viability. Accused has to only create a reasonable doubt in the mind of the court and does not have to prove his defence beyond reasonable doubt.
57. Additionally, the accused has averred that he has only signed the impugned cheque and not filled the particulars. The fact that accused gave a blank signed cheque to the complainant and the particulars were not filled by him does not dilute the liability of the accused as the legal position on inchoate instruments is well settled.
58. Section 20 of the NI Act provides that if a person signs and delivers a paper stamped in accordance with the loan and either wholly blank or have written thereon an incomplete negotiable instrument, such person thereby gives prima facie authority to the holder thereof to make or complete, as the case may be, a negotiable instrument for any amount specified therein and not exceeding the amount covered by the stamp.
CC No. 43280/2019 Pooja Finlease Ltd. Vs. Rajnish Karki 23/26 In Ravi Chopra v. State and others [2008 (102) DRJ 147], the Hon'ble High Court of Delhi has held that if a blank signed cheque is given then it is possible that the drawer has consented impliedly or expressly to filling up of the cheque by the payee on a later date.
At this stage, reliance can also be placed on the judgment of Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197.
"If a signed blank cheque is voluntarily handed over to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer,"
59. Hence, in view of such clear stipulation by the Hon'ble Supreme Court and Hon'ble Delhi High Court, it is immaterial whether or not particulars on the cheque have been filled by the accused or not, extent the accused has admitted to have appended his signatures cheque in question. Accordingly, the applicability of the presumption under Section 139 NI Act is not dependent upon the accused filling on the particulars on the cheque. Accordingly, it is required to be presumed that the cheque in question was drawn for consideration and the holder of the cheque i.e., the complainant received the same in discharge of an existing debt. The onus, therefore, shifts on the accused to establish a probable defence so as to rebut such a presumption. Without placing on record any evidence to disprove that cheque was not issued in discharge of liability, the accused was failed to rebut the presumption.
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60. The judgments relied on by the accused have been read carefully by this Court and it emerges that point of law/fact which has been laid down/discussed by the Hon'ble Courts has already been discussed above in detail and to that extent, they have considered and applied. This Court does not wish to multiply authorities by discussing each of them individually.
61. Therefore, considering the weight of attending circumstances viz, the consistency in the prosecution story, the failure of the accused to put forth any reasonable and believable defence, admission of the accused that the signature on the cheque in question belongs to him a n d compelling documentary evidence placed on record, the first ingredients of Section 139 NI Act stands assembled.
62. The accused did not bring any evidence, material or document to impeach the credibility of the above said documents. In fact, the accused admitted his signature on the impugned cheque voluntarily. The burden lied heavily on the accused to have probablized the factum of non- receiving the loan amount from complainant. It is not the case of the accused that the complainant obtained his signatures on the cheque under duress or by exerting any pressure or undue influence.
63. Ratio: Finally, having considered the totality of the facts and the circumstances of the case, the accused has failed to rebut the presumption in favour of the complainant as spelled under Section 139 NI Act. The law as laid down under Section 138 NI Act, 1881 is made out against the accused. The weight of the evidence adduced by CC No. 43280/2019 Pooja Finlease Ltd. Vs. Rajnish Karki 25/26 the complainant to prove his case against the accused is sufficient enough to impute criminality on the accused. The complainant has discharged his burden to prove his case against the accused under Section 138 NI Act. Therefore, the accused is held guilty and convicted for commission of offence punishable under Section 138 of the Negotiable Instrument Act, 1881.
64. Let the convict be heard on the quantum of sentence separately.
65. Let the copy of this judgment be given to the convict free of cost.
Announced in the open court on Divya Singh
10.01.2024 MM-NI Act-02,
South West District
Dwarka Courts, Delhi
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