Delhi District Court
Bijender Singh vs Lovelish Khanna Page No. 1/18 on 20 March, 2018
IN THE COURT OF SH. BHUPINDER SINGH,
ACMM (NORTH) : ROHINI DISTRICT COURTS : DELHI
BIJENDER SINGH
versus
LOVELISH KHANNA
CC No.: 7468/2016
u/s 138 N I Act
1. Name of the complainant : Sh. Bijender Singh
s/o Sh. Dharam Pal Singh
r/o 134, 1st floor,
Hakikat Nagar, Delhi-09.
2. Name of the accused and : Sh. Lovelish Khanna
address s/o Sh. Pavinder Khanna
r/o 244, 2nd floor, gali no.9,
Hakikat Nagar, Delhi-09.
3. Offence complained of : u/s 138 Negotiable
Instruments Act
4. Plea of accused : Pleaded not guilty.
5. Final order : Convicted
6. Date of such order : 20.03.2018
Date of Institution of case : 28.09.2015
Date of decision of the case : 20.03.2018
J U D G M E N T :-
BRIEF FACTS AND REASONS FOR DECISION OF THE CASE Bijender Singh vs Lovelish Khanna page no. 1/18
1. By way of the present Judgment, I shall decide the complaint case u/s 138 Negotiable Instruments Act, 1881 (hereinafter referred to as N I Act) (as amended upto date) filed by the complainant Bijender Singh against accused Lovelish Khanna.
2. The facts in brief necessary for the disposal of the present case are that the parties are personally known to each other and the accused citing urgent urgency of funds in the first week of February 2015 requested the complainant to advance the accused a friendly loan of Rs.6.00 lacs for a period of 2-3 months and promised to repay the same. It is stated that the loan of Rs.6.00 lacs was advanced to the accused in cash but the same was not repaid within three months as promised. It is stated that accused showed his financial constraints for repayment of the amount and on several requests by the complainant, issued three cheques bearing nos. 000096 dt. 27.08.2015, 000097 dt. 04.09.2015 and 000095 dt. 03.09.2015 for Rs.2.00 lacs each, all drawn on Kotak Mahindra Bank, Ambadeep, KG Marg Branch in favour of the complainant towards the outstanding amount. However, on presentation, the said cheques got dishonoured with the remarks 'funds insufficient'. The present complaint has been filed qua cheque no. 000096 only which got dishonoured vide cheque returning memo dt. 29.08.2015. The complainant then issued the legal Bijender Singh vs Lovelish Khanna page no. 2/18 demand notice dt. 03.09.2015 thereby calling upon the accused to pay the amount to the complainant within 15 days of the receipt of the said notice, however, despite that the accused failed to pay the cheque amount, hence the present complaint has been filed.
3. After the complaint was filed, the complainant led pre-summoning evidence by way of affidavit and the summons were issued to the accused vide order dated 28.09.2015 for the offence u/s 138 NI Act by Ld. Predecessor of this court. On appearance of the accused, a separate notice u/s 251 Cr.P.C. dated 17.03.2016 was framed against the accused to which he pleaded not guilty and claimed trial.
4. In order to prove the case, the complainant Bijender Singh got himself examined as CW-1. The complainant CW-1 reiterated the contents of complaint on oath before the court. He got exhibited the original cheque issued by the accused in favour of the complainant firm as Ex. CW-1/1, the cheque returning memo dated 29.08.2015 as Ex. CW-1/2, the legal notice of demand dt. 03.09.2015 as Ex. CW-1/3, which was sent through speed post receipt Ex. CW-1/4 and proof of delivery Ex. CW-1/5. The complainant CW-1 was cross- examined by Ld. counsel for the accused. Thereafter, the complainant's evidence was closed at request.
Bijender Singh vs Lovelish Khanna page no. 3/18
5. The statement of accused was recorded u/s 313 Cr.P.C. in which the incriminating evidence alongwith exhibited documents were put to the accused Lovelish Khanna, wherein he stated that he took friendly loan of Rs.1.50 lacs in the first week of February 2015 from the complainant and the loan was repaid in 2-3 months with interest @ 3% per month. He stated that he never took the loan of Rs.6.00 lacs as alleged. He stated that the cheque in question was given by him to the complainant as a security at the time of taking over the said loan and he had only signed the cheque in question and remaining particulars were not filled at that time. He stated that the cheque Ex. CW-1/1 was dishonoured with the remarks 'funds insufficient' but he did not receive any legal notice. However, he admitted that it bears his correct address. The accused opted to lead DE. He examined two DWs including himself.
6. DW-1, father of the accused deposed that he and his son had borrowed Rs.1.50 lacs in cash from the complainant in February 2015 which has been repaid to the complainant. He deposed that he borrowed the same to help his sister and that he is working as Chief Finance Officer in Prosper Housing Finance Ltd, Paschim Vihar. He was cross-examined by Ld. Counsel for the complainant.
7. DW-2 is accused himself, who deposed that he had Bijender Singh vs Lovelish Khanna page no. 4/18 taken some of Rs.1.50 lacs from the complainant by way of cash which was advanced to him in three installments of Rs.50,000/- each and he issued three signed blank cheques to the complainant as security. He deposed that the said amount has been paid from the account of his father and proved the copy of the passbook of his father as Ex. DW- 2/A. He deposed that he asked the complainant for return of the cheque but he was assured that the same has been destroyed. He was cross-examined by Ld. Counsel for the complainant. Thereafter the case was listed for final arguments.
8. I have heard Ld. Counsel for both the parties and also perused the record of the case file. In order to bring home the conviction of the accused, the complainant has to show not only unbroken chain of events leading to commission of actual offence on record but also the ingredients of the offence complained of.
9. Before proceeding further, let us go through the relevant provisions of law. The main ingredient of Section 138 of N I Act are as follows:-
(a) The accused issued a cheque on an account
maintained by him with a bank.
(b) The cheque has been presented to the bank within the
period of six months from the date of the cheque or within Bijender Singh vs Lovelish Khanna page no. 5/18 the period of its validity.
(c) When the aforesaid cheque was presented for encashment, the same was returned unpaid/dishonored.
(d) The payee of the cheque issued a legal notice of demand within 30 days from the receipt of information by him from the bank regarding the return of the cheque.
(e) The said cheque has been issued in discharge of any legal debt or other liability.
(f) The Drawer of the cheque failed to make the payment within 15 days of the receipt of the aforesaid legal notice demand.
If the aforesaid ingredients are satisfied then the drawer of the cheque shall be deemed to have committed an offence punishable u/s 138 N I Act.
10. Now, let us deal with the each ingredient of the Section 138 of N I Act to see whether the case against the accused has been proved or not.
WHETHER THE CHEQUE WAS ISSUED OR NOT
11. The accused has himself admitted to have signed the cheque in question during his statement u/s 313 Cr.P.C and also during his defence evidence, however, he stated that he had only Bijender Singh vs Lovelish Khanna page no. 6/18 signed the cheque and had not filled in other particulars.
12. In 'Jaipal Singh Rana vs Swaraj Pal, 149 (2008) DLT 682', Hon'ble Delhi High Court relied upon the judgment of 'Lillykutty vs Lawrence, 2003 I BC 130' and observed that there is no rule of banking business that the name of the payee and the amount on the negotiable instrument should be written by the drawer himself. It was further observed that no law provided that in case of cheques the entire body has to be written by the drawer only and by putting the amount and the name thereupon, there is no material alteration on the cheque u/s 87 of NI Act.
Therefore, as per evidence on record, it stands proved that the cheque in question was issued by the accused.
WHETHER THE CHEQUE WAS PRESENTED WITHIN THE PERIOD OF ITS VALIDITY
13. Perusal of the record reveals that the cheque in question Ex. CW-1/1 bears the date 27.08.2015 and the said cheque got dishonored vide cheque returning memo dated 29.08.2015 Ex. CW-1/2 for the reasons 'funds insufficient'. The cheque returning memo is not disputed by the accused and it clearly shows that the cheque in question was presented within the period of its validity i.e. within six months from the date of issuance of the cheque. Bijender Singh vs Lovelish Khanna page no. 7/18 DISHONOUR OF THE CHEQUE IN QUESTION
14. In this case, the complainant has exhibited the cheque returning memo Ex. CW-1/2 vide which the cheque in question got dishonored. The cheque returning memo has not been challenged by the accused and the accused has also not disputed the dishonour of the impugned cheque due to reasons "funds insufficient" during his statement u/s 313 Cr.P.C or during the cross-examination of CW-1. Therefore, it stands proved that the cheque in question got dishonored vide cheque returning memo Ex. CW-1/2.
SERVICE OF LEGAL NOTICE OF DEMAND UPON THE ACCUSED
15. In the instant case, the complainant has stated on oath that the legal notice of demand dt. 29.08.2015 Ex. CW-1/3 was sent to the accused. However, no cross-examination of CW-1/ complainant was done on this aspect. The accused has denied the receipt of the legal notice during his statement u/s 313 CrPC but the accused stated that the legal notice bears his correct address.
16. It is pertinent to mention herein that the complainant has categorically stated in his evidence by way of affidavit that the legal notice of demand dt. 29.08.2015 Ex. CW-1/3 was sent to the accused vide speed post receipt Ex. CW-1/4 and proof of delivery Bijender Singh vs Lovelish Khanna page no. 8/18 Ex. CW-1/5. During the cross-examination of the complainant the aforesaid fact was not challenged or disputed by Ld. Counsel for the accused. The legal notice was sent to the accused at his address i.e. 244, Hakikat Nagar, gali no.9, 2nd floor, Delhi vide speed post receipt Ex. CW-1/4 and the accused admitted during his statement u/s 313 CrPC that he was residing at the aforesaid address on the date mentioned over legal notice. In 'M/s Ajit Seeds Ltd. vs. K. Gopala Krishnaiah, Crl Appeal no. 1523/2014 decided on 16.07.2014' by Hon'ble Supreme Court, it was observed that "It is thus clear that Sec. 114 of Indian Evidence Act enables the court to presume that in the common course of natural events, the communication would have been delivered at the address of the addressee. Sec. 27 of General Clauses Act gives rise to presumption that service of notice has been effected when it is sent to the correct address by registered post."
17. The complainant is required to send the legal notice at the correct address of the accused and the complainant herein has complied with the said obligation on his part. The envelope was received back with the report of 'refusal' and as such the same can be presumed within the knowledge of the accused. Therefore, the legal notice dt. 29.08.2015 is deemed to have been served upon the accused.
Bijender Singh vs Lovelish Khanna page no. 9/18 WHETHER THE CHEQUE IN QUESTION HAS BEEN ISSUED IN DISCHARGE OF ANY LEGAL DEBT OR OTHER LIABILITY
18. It has been argued by Ld. Counsel for the accused that the cheque in question has not been given in discharge of any existing legal debt or liability and the loan amount of Rs.1.50 lacs taken by the accused has already been repaid qua which the cheque in question was given as security. She has emphasized upon the statement of account of father of the accused Ex. DW-2/A. It is further argued that the total amount of Rs.6.00 lacs (Rs.4.00 lacs in other two connected cases) is a substantial amount keeping in view the annual income of Rs.15.00 lacs as has been deposed by the complainant in his cross-examination. It is argued that in such circumstances when the complainant is an income tax assessee the amount of loan should have been shown in his ITR but the complainant has himself has admitted that the said amount has actually not been shown. Ld. Counsel for the accused has relied upon the following judgments :-
(i) Bijender Sharma vs Anil Sabharwal, Crl. R.P.388/17, DOD 14.09.2017.
(ii) Vijay vs Laxman & Anr, Crl. A. No. 261 2013, DOD 07.02.2013.
(iii) Anil Aggarwal vs State & Ors., 2015 IX AD (Delhi) 377.
(iv) Vipul Kumar Gupta vs Vipin Gupta, Crl L.P. 461/11, DOD Bijender Singh vs Lovelish Khanna page no. 10/18 24.08.2012.
(v) Devender Kumar vs Khem Chand, Crl. R. P. 679/12, DOD 06.10.2015.
19. In the case in hand, the complainant has examined himself as CW-1 and he stated in his evidence by way of affidavit that the accused for some urgent requirement took the loan of Rs.6.00 lacs for a period of 2-3 months and promised to repay the same and that the accused in discharge of his liability issued the impugned cheque Ex. CW-1/1. Ld. Counsel for the accused has emphasized that since no loan document was executed and the said fact has not been shown in the ITR of the complainant, he has failed to discharge the onus upon him. The first contention of the accused that loan document should have been executed is misconceived as a friendly loan was advanced for which there was no purpose of executing any particular agreement. The accused himself in his evidence has stated that he was having cordial relations with the complainant. Even otherwise, there is no requirement of law that a loan can not be given otherwise i.e. without executing of any legal documents. Secondly, it is also argued that the complainant in his cross examination has admitted that he has not disclosed the loan in IT returns and thus it leads to an inference that the complainant did not have sufficient money to advance the loan and Bijender Singh vs Lovelish Khanna page no. 11/18 therefore he did not file the ITR. This argument does not raise any adverse inference against the complainant. For this, I rely upon the judgment titled "Lekh Raj Sharma v. Yashpal Sharma, (Crl.L.P. 567/2014) passed by Hon'ble High Court of Delhi" which stated as follows:
".......21. The finding that, as the amount of loan disbursed to the respondent was not shown in the balance sheet and income tax return, the appellant could not be said to have proved its case beyond reasonable doubt, is also erroneous....."
20. Thus, there is no merit in the submission of the accused that since the loan amount is not shown in the income tax returns, it stands established that the loan was not disbursed the complainant.
21. The case of the accused is that he has taken a sum of Rs.1.50 lacs only from the complainant as a loan encash for the help of her aunt who was in need of money due to death of her husband. He has deposed that he gave the cheque in question as a security to the complainant for advancement of Rs.1.50 lacs in three installments of Rs.50,000/- each which has been repaid by his father from his bank account. The bank account statement Ex. DW-2/A reflects two entries which has not been disputed by the complainant. As per the same, vide Bijender Singh vs Lovelish Khanna page no. 12/18 entry dt. 17.04.2015 an amount of Rs.1.00 lakh and vide entry dt. 22.08.2015 an amount of Rs.50,000/- have been transferred to the complainant's account. The cheque in question is dated 27.08.2015 and the amount that has been shown to have been paid to the complainant by way of aforesaid entries is prior to the date of issuance of cheque and as such the same cannot be held to be paid in discharge of legal liability/debt qua the cheque in question.
22. Both the DWs have given contradictory statements regarding the loan taken from the complainant. DW-1/father of the accused has stated that he and his son had borrowed the sum of Rs.1,50,000/- from the complainant whereas DW-2/accused has stated that he had taken such loan. By making such statements and stating that the cheque amount has already been paid, an effort is being made to create confusion regarding the loans taken and the payments made.
23. The contention of the accused that the said cheque was not filled in by him except the signatures is of no help to him. By handing over blank signed cheque to the complainant, he has given him the authority to fill in the same.
24. The law regarding the blank signed cheques is very clear.
Bijender Singh vs Lovelish Khanna page no. 13/18 Section 20 of the NI Act declares that inchoate instruments are also valid and legal enforceable. In the case of a signed blank cheque, the drawer gives authority to the drawee to fill up the agreed liability. Same was held in case of 'Madhukar V. Dessai v. Shaikh Abdul Riyaz, AIR 2007 (NOC) 1082 (Bom)' and 'A.R. Banerjee v. State & Anr. [2014 (214)DLT 325]'.
25. Section 118(b) of the Negotiable Instruments Act provides that until the contrary is proved, the following presumption shall be made.
(b) As to date - that every Negotiable Instrument bearing a date was made or drawn on such date.
26. Moreover, there is a presumption in favour of the complainant u/s 118 (a) of Negotiable Instruments Act that until the contrary is proved, it will be presumed that every negotiable instrument was drawn for consideration and every such instrument when it has been accepted, endorsed, negotiated or transferred was accepted, endorsed, negotiated or transferred for consideration.
27. Further Section 139 of the Negotiable Instruments Act, 1881 provides that it shall be presumed until the contrary is proved that the holder of the cheque received the cheque of the nature referred in the Section 138 of Negotiable Instruments Act for the Bijender Singh vs Lovelish Khanna page no. 14/18 discharged in whole or in part of his debt or liability.
28. Further, the Hon'ble High court of Delhi in Constellation Enterprises Pvt. Ltd. & Anr. Vs. PEC Limited 2006 AD (Delhi) 582(2006), held as under:-
"Even if a post dated cheque is given as security and the payment is not made as promised, then the said post dated cheque itself becomes payable because that is the agreement and understanding between the parties otherwise the security would have no meaning."
29. In the case in hand, the accused has admittedly issued the impugned cheque in favour of the complainant, though he is stated to have made the payment against the same. However, the payment as made vide bank statement Ex. DW-2/A has not been proved to be made against the legal liability/debt qua the cheque in question.
30. The judgments relied upon by Ld. Counsel for accused are distinguishable on facts.
In 'Bijender Sharma vs Anil Sabharwal, 245 (2017) DLT 204', it has been held that "25. True it is that in all cases where the loan transaction is not referred to or reflectd in the income tax returns, one cannot jump to a conclusion that the presumption u/s 139 of NI Act stands rebutted. In cases where the amount is small, the same principle may not apply. However, a huge amount of Rs.50 lacs has to be Bijender Singh vs Lovelish Khanna page no. 15/18 explained or else even when such transaction is in the realm of suspicion an imprimatur of the code would be given if such transaction is accepted as a valid transaction ......".
31. In the very paragraph, it has been observed by the Hon'ble Delhi High Court that in that case, seen alongwith the other facts, this lapse on the part of the petitioner assumes 'significance'. It is not that failure of it will result in demolishing the case of the complainant. Thus, just because ITR has not been filed, the case of the complainant cannot be thrown away but it has to be seen coupled with other facts and circumstances of each case. Even otherwise, the quantum of loan in the present case is only Rs.6.00 lacs (cumulative in three connected cases) as against Rs.50.00 lacs that was under
consideration before the Hon'ble High Court in the aforesaid case.
32. Further, absence of any documentary evidence of the loan has only been observed to be a 'significant circumstance' by Hon'ble Supreme Court in case titled 'Vijay vs. Laxman and Anr, (2013) 3 SCC 86'. As a matter of fact, no document has been shown by the accused that was entered into for the admitted loan of Rs.1.50 lacs as well, taken by him from the complainant.
33. Since, security cheques were taken against the advancement of loan, the relationship between the parties cannot be Bijender Singh vs Lovelish Khanna page no. 16/18 said to be of a higher standard of mutual trust and confidence. In such circumstances, it is unbelievable that the accused would not have insisted for return of the cheque in question and had relied upon the contention of the complainant that he had destroyed the cheque. If the complainant had refused to return the cheque, the accused should have given notice to the complainant for return of the same or atleast intimate his banker about the same and the payment should have been got stopped. Nevertheless, the cheque in question has been dishonored for 'insufficient funds' and not for the reasons 'payment stopped'.
34. Thus, the accused has miserably failed to prove that he repaid the entire loan amount to the complainant. Therefore, the presumption u/s 139 of NI Act lies in favour of the complainant and the complainant has successfully proved that the impugned cheque was issued by the accused in his favour towards discharge of his legal liability.
THE DRAWER OF CHEQUE HAS FAILED TO MAKE THE PAYMENT WITHIN 15 DAYS OF THE RECEIPT OF LEGAL NOTICE OF DEMAND.
35. In the instant case, CW-1 complainant Bijender Singh has stated in his evidence that despite service of legal notice of Bijender Singh vs Lovelish Khanna page no. 17/18 demand, the accused has failed to pay the cheque amount. The accused has not alleged to have paid the cheque amount and he simply denied his liability to pay the same stating that the amount of Rs.1.50 lacs which was taken from the complainant, has already been paid through bank account of his father.
36. Therefore, it stands proved that accused did not make the payment of cheque in question after receipt of legal notice of demand.
37. In view of the findings of this court, the complainant has successfully proved all the ingredients of offence punishable u/s 138 NI Act and the accused is liable to be convicted for the offence u/s 138 NI Act. Accordingly, accused Lovelish Khanna stands convicted for the offence u/s 138 N I Act.
Digitally signedby BHUPINDER
BHUPINDER SINGH
Announced in the open court SINGH Date:
2018.03.21
16:30:27 +0530
today i.e. on 20.03.2018
(BHUPINDER SINGH)
ACMM (North): Rohini
Bijender Singh vs Lovelish Khanna page no. 18/18