Delhi District Court
Santosh vs Usha Devi @ Usha Mann And Ors on 9 September, 2024
IN THE COURT OF Ms. NEHA GUPTA SINGH
CHIEF JUDICIAL MAGISTRATE
NORTH, ROHINI COURTS : DELHI
Ms. Santosh
D/o Chanderbhan
R/o 1291, Jatav Gali
Village Alipur, Delhi ... COMPLAINANT
Versus
1. Usha Devi
W/o Sunil Sharma
2. Sunil Kumar
S/o not known
R/o 115/894, Glass Market,
Near Chappar Wale ki Dukan,
Alipur, Delhi ... ACCUSED
Case Number : 4023/18
Date of Institution : 4.09.2018
Offence Complained Of : U/s 138 NI Act
Plea of the Accused : Not Guilty
Arguments Heard On :
Final Order : Acquitted for offense
u/s 138 NI Act
Date of Judgment. : 09.09.2024
JUDGMENT
1. Factual matrix as brought about from the complaint is that both the accused persons are well known to complainant for many years. accused persons approached the complainant for friendly loan of Rs. 90,000 as accused CC No. 4023/2018 Santosh Vs. Usha Devi @ Usha Mann & Anr. 1 of 13 were going through financial crisis in first week of December 2017 and assured to repay the loan within 6 months.
2. Accused in discharge of legal liability issued cheque bearing no. 000055 dated 5.06.2018 for sum of Rs. 90,000 drawn on HDFC Bank Ltd, Narela Branch. (Ex.CW1/1).
3. The aforestated cheque was presented by the complainant for encashment to his bank ie. Corporation Bank, Nehru Enclave Branch,.The cheque was returned back dishonored vide return memo dated 20.07.2018. with reason "funds insufficient"(Ex.CW1/2). Complainant thereafter gave legal demand notice to the accused on 14.08.2018 (Ex.CW1/3) calling upon him to make payment within 15 days from notice. The said notice was sent by the Speed Post. Despite the service the accused did not make the payment within stipulated period, hence present complaint was filed under section 138 of Negotiable Instruments Act,1881 (The Act).
4. Complaint was perused and cognizance of the offence was taken by the Ld. Predecessor. Complainant tendered pre summoning evidence by way of affidavit ExCW1/A and relied on documents Ex.CW1/1 to Ex.CW1/5. Accused Usha was summoned as she was signatory to cheque. Accused Sunil was not summoned.
5. Accused was admitted on bail and notice under section 251 Cr.Pc was framed against the accused to which she pleaded not guilty and claim trial. Defence as disclosed by the notice to accused is that complainant was running a CC No. 4023/2018 Santosh Vs. Usha Devi @ Usha Mann & Anr. 2 of 13 committee and accused was part of same. Cheque was given in blank duly signed as security. Cheque was not returned after completion of committee and was misused by the complainant.
6. Accused made an application under section 145(2). Application was allowed and accused was given opportunity to cross examine the complainant.
7. Complainant adopted his pre summoning evidence. She conceded in cross examination that she knew accused for last 10 years. She is working on contract basis in MCD office and running a beauty parlour. Accused approached her in January 2018 for friendly loan and same was given in December 2017 in cash. She had deposited gold jewellery with Muthoot finance to take loan in December 2017 for Rs. 90,000. She is not Income Tax payee. No loan receipt was given.
8. Complainant evidence was closed and the accused was examined under section 313 read with section 281 Cr.Pc. All the incriminating evidence were put to her in vernacular and accused stated that she has not taken loan from complainant, cheque was issued as security for committee. she did not receive legal demand notice, however she was residing at the address before 2018. Accused examined herself as DW 1.
9. She deposed that complainant was running a monthly committee. She and her husband was member of the committee. Complainant has misused the cheque in question.
CC No. 4023/2018 Santosh Vs. Usha Devi @ Usha Mann & Anr. 3 of 13
10.DW 2 Sunil Kumar stated that complainant was running a monthly committee. He and accused were member of the committee. Complainant has misused the cheque in question.
11.DW 3 Snr. Manager Union Bank of India proved, statement of account of accused from 1.06.2018 to 30.07.2018 Ex.DW3/1.
12.Final arguments were advanced by the counsel for the parties.
13.It was argued for the complainant that both the accused persons are well known to complainant for many years. accused persons approached the complainant for friendly loan of Rs. 90,000 as accused were going through financial crisis in first week of December 2017 and assured to repay the loan within 6 months.
14.Accused in discharge of legal liability issued cheque bearing no. 000055 dated 5.06.2018 for sum of Rs. 90,000 drawn on HDFC Bank Ltd, Narela Branch. (Ex.CW1/1).
15.The afore stated cheque was presented by the complainant for encashment to his bank ie. Corporation Bank, Nehru Enclave Branch,.The cheque was returned back dishonored vide return memo dated 20.07.2018. with reason "funds insufficient" (Ex.CW1/2). Complainant thereafter gave legal demand notice to the accused on 14.08.2018 (Ex.CW1/3) calling upon him to make payment within 15 days from notice. The said notice was sent by the Speed Post. Despite the service the accused did CC No. 4023/2018 Santosh Vs. Usha Devi @ Usha Mann & Anr. 4 of 13 not make the payment within stipulated period. There is presumption in favor of the complainant under section 139 NI Act as signatures on cheque are admitted by the accused. Accused dis not give any stop payment instructions to bank.
16.Per contra, it is argued by the counsel for the accused that Accused has not taken any loan. Complainant has failed to prove the transaction and capacity to pay. Further accused was having sufficient balance in her other account and there was no need to seek loan for sum of Rs. 90000. There is no date of transaction and there is no mention of same in book of accounts.
17.I have heard the complainant and accused and have perused the record. Both the parties did not wish to file written arguments.
18.Before coming to the appreciation of the evidence and legal position, it is pertinent to mention that the trial though summary was conducted like summons trial and evidence was recorded in full with examination and cross examination of the witnesses and not in a summary manner by the predecessor court. In light of the judgment of Hon'ble Supreme Court in Mehsana Nagrik Sahkari Bank Ltd. Vs. Shreeji Cab Co.& Ors. 2014 CriLJ 1953, this court is inclined to rely on the evidence recorded by the predecessor court.
19.At the outset, it is wise to discuss the legal principles involved in present matter at hand. Present complaint is CC No. 4023/2018 Santosh Vs. Usha Devi @ Usha Mann & Anr. 5 of 13 filed u/s 138 of the Act. The object of the legislation is to encourage the culture of use of cheques and enhance the credibility of the instrument.
20.The legal regime pertaining to the offence under section 138 of the act has numerous components inter alia,
a) Cheque was drawn by a person on an account maintained by him
b) It was drawn for the discharge, in whole or in part, of any debt or other liability
c) Cheque was presented to the bank within a period of six month from the date it was drawn or within the period of its validity.
d) Cheque was returned by the bank unpaid due to insufficient funds or that it exceeds the amount arranged to be paid.
e) Payee or holder in due course make demand of payment of the said amount of money by giving a notice, in writing within 30 days of receipt of information by him from the bank regarding the return of cheque as unpaid.
f) The drawer of the cheque fails to make payment of the said amount of money within 15 days of the receipt of the said notice
g) Complaint was filed in writing within one month of the date on which cause of action arised
21.Statutory and legal presumptions in favor of payee/ complainant as laid down by the Act and precedents can be summarized as follows.
a) Presumption as to liability: it shall be presumed unless contrary is proved that the holder of cheque CC No. 4023/2018 Santosh Vs. Usha Devi @ Usha Mann & Anr. 6 of 13 received the same in discharge of any debt or liability (sec 139 and 118(a))
b) Presumption of dishonor: court shall presume dishonor of cheque on production of bank's slip or memo having official mark denoting that cheque has been dishonored unless such fact is disproved.(sec
146)
c) Service of legal demand notice: notice sent at correct address by making complete payments of postal expenses in advance deem to be served and drawer has to show during trial after leading evidence that same was not served .(see C.C. Alavi Haji v. Palapetty Muhammed 2007 Crl.l.J 3214).
22.Now, I shall discuss components of offence in light of facts and circumstances of present case
23.Issuance of cheque Accused has admitted the signatures on cheque in question, however has stated that same was given in blank as security.
Section 20 NI Act talks about such instruments. As per this provision, if a person gives duly signed but blank or partly written cheque then he deem to have given implied authority to the holder to fill up the particulars in it and complete it and thus make him liable for the payment mentioned in it.
Further, it is argued by accused that cheque was given as security. Reliance in such case be placed on ICD vs. Beena Shabir and Anrs. 2002(6) SCC 426 wherein the Hon'ble Supreme Court has held that the security cheques CC No. 4023/2018 Santosh Vs. Usha Devi @ Usha Mann & Anr. 7 of 13 also would fall within the purview of the Section 138 of the NI Act and a person could not escape his liability.
24.Cheque was present to bank for payment and it was returned back unpaid.
The afore stated cheque was presented by the complainant for encashment to his bank ie. Corporation Bank, Nehru Enclave Branch,.The cheque was returned back dishonored vide return memo dated 20.07.2018. with reason "funds insufficient"(Ex.CW1/2).
25.Legal demand notice within 30 days of return of cheque and no payment by drawer within 15 days of receipt.
In present case legal demand notice Ex. CW1/3 was sent on 14.08.2018 by Speed Post and registered AD to the accused. Receipt of legal demand notice is denied by the accused . However, she has admitted on record that address on the legal demand notice is correct. Placing reliance on C.C Alavi Haji (supra) and section 27 General clauses Act, read with section 114 Evidence Act , when the notice is sent by registered post by correctly addressing the drawer of the cheque, the mandatory requirement of issue of notice in terms of Clause (b) of proviso to Section 138 of the Act stands complied with. It is then for the payee to rebut the presumption about the service of notice and show that he had no knowledge that the notice was brought to his address or that the address mentioned on the cover was incorrect or that the letter was never tendered or that the report of the postman was incorrect. In present case CC No. 4023/2018 Santosh Vs. Usha Devi @ Usha Mann & Anr. 8 of 13 accused has not brought any cogent evidence to show that notice was not delivered to him, moreover he has admitted the address on notice to be correct. No payment is made after receipt of notice or after summons. In such circumstances facts stands proved against the accused.
26.Legally enforceable debt or liability It is a well settled position of law that when a negotiable instrument is drawn, two statutory presumptions arise in favor of the complaint, one under Section 139 NI Act and another under Section 118(a) of the NI Act. Further, the court will presume a negotiable instrument for consideration unless and until after considering the matter before it, it either believes that the consideration does not exist or consider the non-existence of the consideration so probable that a prudent man ought under the circumstances of the particular case to act upon the supposition that the consideration does not exist. For rebutting such presumption, what is needed is to raise a probable defense. Reliance is placed on M.S. Narayana Menon v. State of Kerala, (2006) 6 SCC 39.
27.In Kumar Exports Vs. Sharma Carpets, (2009) 2 SCC 513, wherein the Apex Court examined as to when complainant discharges the burden to prove that instrument was executed and when the burden shall be shifted as follows.
"18. Applying the definition of the word "proved" in Section 3 of the Evidence Act to the provisions of Sections 118 and 139 of the Act, it becomes evident that in a trial CC No. 4023/2018 Santosh Vs. Usha Devi @ Usha Mann & Anr. 9 of 13 under Section 138 of the Act a presumption will have to be made that every negotiable instrument was made or drawn for consideration and that it was executed for discharge of debt or liability once the execution of negotiable instrument is either proved or admitted.
As soon as the complainant discharges the burden to prove that the instrument, say a note, was executed by the accused, the rules of presumptions under Sections 118 and 139 of the Act help him shift the burden on the accused. The presumptions will live, exist and survive and shall end 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. A presumption is not in itself evidence, but only makes a prima facie case for a party for whose benefit it exists.
19.The use of the phrase "until the contrary is proved" in Section 118 of the Act and use of the words "unless the contrary is proved" in Section 139 of the Act read with definitions of "may presume" and "shall presume" as given in Section 4 of the Evidence Act, makes it at once clear that presumptions to be raised under both the provisions are rebuttable. When a presumption is rebuttable, it only points out that the party on whom lies the duty of going forward with evidence, on the fact presumed and when that party has produced evidence fairly and reasonably tending to show that the real fact is not as presumed, the purpose of the presumption is over.
20. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not insist in every case that the accused should disprove the non-existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At CC No. 4023/2018 Santosh Vs. Usha Devi @ Usha Mann & Anr. 10 of 13 the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant."
28.In Bharat Barrel & Drum Manufacturing Company Vs. Amin Chand Pyarelal, (1999) 3 SCC 35 wherein the Court dealt with the presumption of S 118 of the Negotiable Instruments Act and held thus:
"Though the evidential burden is initially placed on the defendant by virtue of S.118 it can be rebutted by the defendant by showing a preponderance of probabilities that such consideration as stated in the pronote, or in the suit notice or in the plaint does not exist and once the presumption is so rebutted, the said presumption 'disappears'. For the purpose of rebutting the initial evidential burden, the defendant can rely on direct evidence or circumstantial evidence or on presumptions of law or fact. Once such convincing rebuttal evidence is adduced and accepted by the Court, having regard to all the circumstances of the case and the preponderance of probabilities, the evidential burden shifts back to the plaintiff who has also the legal burden. Thereafter, the presumption under S.118 does not again come to the plaintiff's rescue. Once both parties have adduced evidence, the Court has to consider the same and the burden of proof loses all its importance."
29. It was held in Krishna Janardhan Bhat vs Dattatraya G. Hegde (2008) 4 SCC 54 that whereas prosecution must prove the guilt of an accused beyond all reasonable doubt, the standard of proof so as to prove a defence on the part CC No. 4023/2018 Santosh Vs. Usha Devi @ Usha Mann & Anr. 11 of 13 of an accused is preponderance of probabilities. Inference of preponderance of probabilities can be drawn not only from the materials brought on records by the parties but also by reference to the circumstances upon which he relies.
30.In the present case, liability is disputed by the accused. She has alleged that loan was not taken as alleged by the complainant. Complainant has failed to show any document to prove that she advanced loan to the accused. There is no witness to the transaction. Nothing is brought on record by complainant, despite the fact that loan transaction is disputed by accused. Loan was not shown in ITR, nor any receipt is taken from accused. Complainant has said that she took gold loan to give amount to accused. It is not explained as to why she will keep her jewellery on mortgage to arrange loan for accused. Complainant has failed to prove the capacity to pay. Further Ex. DW3/1 is proved to show that accused had no financial crisis as alleged to take loan.
31.It is argued for the complainant that accused did not give any missing complaint or stop payment instructions to bank. Here it is pertinent that it is the cardinal principle of Criminal Justice delivery system that the complainant has to prove the guilt of accused beyond reasonable doubts. No matter how weak the defence of accused is but, the golden rule of the Criminal Jurisprudence is that the case of the complainant has to stand on its own leg. When, accused has raised the doubt in transaction, then CC No. 4023/2018 Santosh Vs. Usha Devi @ Usha Mann & Anr. 12 of 13 complainant was duty bound to prove the transaction. Accused has rebutted the presumption raised under section 139 NI Act. Reliance can be placed on Rajaram S/O Sriramulu Naidu vs Maruthachalam 2023 LiveLaw (SC) 46.
32.Accordingly, in light of above discussion accused Usha Devi @ Usha Mann is acquitted for offense u/s 138 NI Act.
Announced in the open court.
On 9th September.2024 Neha Gupta Singh CJM North Rohini Court/New Delhi Certified that this judgment contains 13 pages and each page bears my signature.
Neha Gupta Singh CJM North Rohini Court/New Delhi CC No. 4023/2018 Santosh Vs. Usha Devi @ Usha Mann & Anr. 13 of 13