Delhi District Court
Jitender Kumar Paliwal vs Reeturaj @ Neeraj on 25 July, 2024
IN THE COURT OF Ms. HIMANSHI TYAGI JMFC (NI ACT) DIGITAL COURT-1,
NORTH, ROHINI COURTS, NEW DELHI
JITENDER KUMAR PALIWAL S/o
LATE Sh. DALCHAND PALIWAL
Add:- B-1/409, SECTOR-17, ROHINI
DELHI-110089
................Complainant
Vs.
REETU RAJ @ NEERAJ S/o Sh. PREM NARAYAN
Add:- B-1/349, 2nd FLOOR, SECTOR-17,
ROHINI, DELHI-110089.
.......................Accused
JUDGMENT
CNR No. DLNT020087522022 CC NI ACT 1380/2022 Date of Insititution 12.05.2022 Offence alleged Under Section 138 NI Act Plea of the accused Not pleaded guilty Final Order Convict Date of Decision 25.07.2024 CC NI:- 1380/2022 Digitally signed 1 of 13 by HIMANSHI HIMANSHI TYAGI TYAGI Date: 2024.07.25 15:35:49 +0530
(1.) Vide this judgment I shall dispose of the complaint filed by the complainant under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the 'Act') against accused Reeturaj @ Neeraj.
(2.) Brief facts relevant for the decision of the case are as under:
The complainant has stated that the accused and the complainant were well known to each other and had friendly relations. Due to such relations, on 05.10.2019, the accused had borrowed a friendly loan for a sum of Rs. 3,50,000/- in cash for urgent need from the complainant for the period of eleven months and on 06.10.2019 the accused exe- cuted a promissory note and receipt in favour of the complainant regarding this loan. It is stated further that after the elapse of the eleven months period the accused did not re- pay the above said loan and the interest despite several oral requests by the complainant so the complainant served a legal demand dated 10.03.2022 for Rs. 3,50,000/- along- with agreed interest 18 % p.a. to the accused . It is further stated that after receiving the above said notice, on 21.03.2022, the accused has issued a cheque bearing no. 319256 dated 21.03.2022 for Rs 5,07,500/- drawn on Canara Bank Sector-16, Rohini Delhi, to the complainant. It is alleged that on 21.03.2022 the complainant presented the above mentioned cheque for encashment to his ICICI Bank, Sector-11, Rohini Delhi 110085, but the same was returned unpaid on 22.03.2022 from with remark "Funds Insufficient". The complainant sent a statutory legal notice dated 26.03.2022 to the accused but de- spite receipt of said legal notice the accused neither repaid the aforementioned cheque amount nor gave any reply of said legal notice. Hence the complainant filed the present compliant with the prayer that accused be summoned, tried and punished according to law.
(3.) Upon appreciation of presummoning evidence, accused was summoned by the Ld Predecessor vide order dated 31.08.2022 for an offence punishable under Section 138 of Digitally signed CC NI:- 06/2021 HIMANSHI by HIMANSHI TYAGI TYAGI Date: 2024.07.25 15:35:54 +0530 the Act. Thereafter, on the 20.07.2023, notice under Section 251 Cr.P.C. for the offence u/s 138 Negotiable Instrument Act was served upon him by the Ld Predecessor to which he pleaded not guilty and claimed trial. Further, he admitted his signatures on the cheque as well as the receipt of legal notice. He also stated that he he had borrowed only a sum of Rs 03 lacs @ 4% interest from the complainant and he has already repaid around Rs 5-5.5 lakh. Thereafter, the accused was permitted to cross examine the complainant and the matter was listed for evidence.
(4.) The complainant led evidence by examining himself as CW-1, wherein he adopted his pre-summoning evidence. In order to prove his case, the complainant had relied upon the original Cheque Ex.CW1/1, return memo Ex.CW1/2, Legal demand dated 26.03.2022 notice Ex.CW1/3 and receipt of speed post Ex CW1/4, tracking report Ex CW1/5, reply to legal notice Ex CW1/6, promissory note Ex CW1/7, Legal demand no- tice dated 10.03.2022 Ex.CW1/8, receipt of speed post Ex CW1/9 and tracking report Ex CW1/10. The complainant was then cross examined by the Ld. Counsel for accused. CE was closed vide order dated 20.11.2023 by the Ld Predecessor of the court.
(5.) Statement of the accused was recorded u/s 313 Cr.P.C. r/w Section 281 Cr.P.C on 16.03.2024 wherein all the incriminating circumstances appearing in evi- dence against the accused were put to him. The accused chose to lead evidence in his de- fence, and the matter was fixed for defence evidence. However, the accused thereafter chose to not lead DE and the matter was fixed for final arguments.
(6.) During arguments, it was further averred by the Ld. Counsel for the complainant that accused has failed to raise any probable defence in order to disprove the case of the complainant and has failed to rebut the presumption u/s 139 r/w section 118(a) of the Digitally signed by HIMANSHI HIMANSHI TYAGI TYAGI Date:
2024.07.25 CC NI:- 06/2021 15:35:59 +0530 Act, therefore accused is liable to be convicted u/s 138 of the Negotiable Instruments Act.
(7.) Per contra, Ld. Counsel for the accused reiterated the version of the accused given in reply to the legal notice of demand. He further argued that since the cheque in ques- tion was a security cheque for the loan, there is no legally recoverable debt. He also ar- gued that the accused only took the loan of Rs 35,000/- which he had already repaid and the complainant has wrongfully used the security cheque and has forged the promissory note. He submitted that complainant has failed to prove his case beyond reasonable doubt and accused is liable to be acquitted u/s 138 of Negotiable Instruments Act.
(8.) I have perused the entire record as well as the evidence led by the complainant as well as the accused. Before finding the conviction of the accused u/s 138 of the Nego- tiable Instruments Act, it has to be established by the complainant cumulatively that :
(i) the cheque in question was issued by the accused in favour of the complainant in dis- charge of legally enforceable liability;
(ii) presentation of the cheque to the bank within three months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(iii) a demand being made in writing by the payee or holder in due course by the is-
suance of a notice in writing to the drawer of the cheque within thirty days of the receipt of information from the bank of the return of the cheques; and
(iv) the failure of the drawer to make payment of the amount of money to the payee or the holder in due course within fifteen days of the receipt of the notice.
(9.) The accused has admitted his signatures upon the cheques in question in the notice served upon him under Section 251 CrPC. The accused has also admitted the receipt of the legal demand notice to which he even filed a reply Ex CW1/6. Moreover, the com-
Digitally signed by HIMANSHICC NI:- 06/2021 HIMANSHI TYAGI
TYAGI Date:
2024.07.25
15:36:04 +0530
plainant has duly placed on record the original Cheque Ex.CW1/1, return memo Ex.CW1/2, Legal demand notice dated 10.03.2022 Ex.CW1/8, receipt of speed post Ex CW1/9 and tracking report Ex CW1/10. Therefore, the presentation of cheques in ques- tion bearing the signatures of accused, their dishonorment and service of legal demand notice is not under question. Once these facts are established, a presumption of the cheques having been issued in discharge of a legally sustainable liability and drawn for good consideration arises by virtue of Section 118 (a) and Section 139 of the NI Act. Once Section 139 of NI Act comes into picture, the Court presumes that the cheque was issued in discharge, in whole or in part, of any debt or liability. Therefore, at this stage, with the help of the presumption under Section 139 of the Act, the case of the com- plainant stands proved.
(10.) The effect of the presumption has been explained in a catena of judgments, in- cluding the judgments of the Hon'ble Supreme Court in, Hiten P. Dalal v. Bratindranath Banerjee (2001) 6 SCC 16, Rangappa vs. Sri Mohan (2010) 11 SCC 441 and further in the case of Rohitbhai Jivanlal Patel v. State of Gujarat & anr (Crl. Appeal No. 508/19 dated 15.03.2019). It has been held time and again that the said presumption is a rebut- table one and its only effect is to shift the initial burden of proof on the accused. When the presumption is raised in favor of the complainant, the burden shifts upon the accused to disprove the case of the complainant by rebutting the presumption raised in favour of the complainant. It is well settled that in order to rebut the presumption and shift back the burden of proof on the complainant, the accused is only required to raise a probable defence and he cannot be expected to discharge an unduly high standard of proof. There- fore, the standard of proof for rebutting the presumption under Section 139 NI Act is "preponderance of probabilities."
Digitally signed by HIMANSHI HIMANSHI TYAGI TYAGI Date: 2024.07.25 15:36:08 +0530 CC NI:- 06/2021
(11.) The accused thus, has to make out a fairly plausible defence for it to be accepted to the court. The accused can do this, either by leading direct evidence in his defence or by raising doubt on the material/evidence brought on record by the complainant. To dis- prove the presumptions, the accused should bring on record such facts and circum- stances, 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. However, at the same time, it is also to be remembered that bare denial of the existence of legally enforceable debt or other liability cannot be said to be sufficient to rebut the presump- tion and something which is probable has to be brought on record to shift the burden back to the complainant.
(12.) Keeping these basic principles in mind, this Court shall now proceed to deal with the defence of the accused and whether the accused has been able to rebut the presump- tion raised in favour of the complainant.
(13.) It is contended by the accused that the impugned cheque was given to the com- plainant as security cheque qua the loan and the same has been misused by him. To prove that the alleged security cheque was indeed misused by the complainant, the ac- cused will have to show that there was no liability qua the impugned cheque on the date of its presentment. To determine the same, it will be worthwhile to consider the law on security cheques.
(14.) It has been clearly stipulated by the Hon'ble Delhi High Court in Suresh Chandra Goyal v. Amit Singhal (Crl.L.P. 706/2014,dated 14.05.2015) that there is no magic in the word "security cheque", such that, the moment the accused claims that the dishon- oured cheque (in respect whereof, a complaint under Section 138 of the Act is preferred) CC NI:- 06/2021 Digitally signed by HIMANSHI HIMANSHI TYAGI TYAGI Date:
2024.07.25 15:36:13 +0530 was given as a "security cheque", the Magistrate would acquit the accused. It is to be noted that whenever a cheque is issued, it is presumed to be issued in discharge of liabil- ity on part of the accused, though the liability may be an existing liability or a liability which would crystallize in future. If that were not so, there would be no purpose of ob- taining a security cheque from the debtor. A security cheque is issued by the debtor so that the same may be presented for payment, as and when the apprehended liability arises. Otherwise, it would not be a security cheque. Therefore, if a cheque is issued to secure any future liability arising towards the payee of the cheque for the purpose of which the cheque was issued by the drawer, the drawer cannot raise the defence that the cheque was issued for security purposes.
(15.) The Hon'ble High Court of Delhi in Credential Leasing & Credits Ltd. Vs. Shruti Investments 223 (2015) DLT 343 has held that even a security cheque can form the ba- sis of complaint under Section 138 of the NI Act, if on the date of the deposit of the post-dated security cheque, the debt of the accused stood crystallized. The relevant ex- tract from the judgment is reproduced below:
"27. Thus, the "debt or other liabil-
ity" has to be a legally enforceable debt or other liability. Neither the main provision of Section 138, nor the explanation suggest that the debt or other liability should be in exis-
tence on the date of issuance of the cheque, i.e. on the date of its delivery to the drawee or someone on his be-
half or, on the date that the cheque Digitally signed CC NI:- 06/2021 by HIMANSHI HIMANSHI TYAGI TYAGI Date:
2024.07.25 15:36:17 +0530 bears. The only reference to time in the Section, is the point of time when the cheque is returned unpaid by the drawers bank.
28. In my view, therefore, the scope of Section 138 NI Act would cover cases where the ascertained and crys-
tallised debt or other liability exists on the date that the cheque is pre-
sented, and not only to case where the debt or other liability exists on the date on which it was delivered to the seller as a post-dated cheque, or as a current cheque with credit pe-
riod. The liability, though, should be in relation to the transaction in re-
spect whereof the cheque is given, and cannot relate to some other inde-
pendent liability. If, on the date that the cheque is presented, the ascer-
tained and crystallized debt or other liability relatable to the dishonoured cheque exists, the dishonor of the cheque would invite action under Section 138 NI Act. There could be situations where, for example, an is-
sue may be raised with regard to the CC NI:- 06/2021 Digitally signed HIMANSHI by HIMANSHI TYAGI TYAGI Date: 2024.07.25 15:36:22 +0530 quality, quantity, deficiency, specifi-
cations, etc. of the goods/services supplied, or accounting. It would have to be examined on a case to case basis, whether an ascertained or crystallized debt or other liability ex-
ists, which could be enforced by re-
sort to Section 138 NI Act, or not."
(16.) It is pertinent to note at the outset that perusal of the record clearly shows that the accused has admitted the fact of obtaining a loan from the complainant though he has disputed the amount of this loan. In his reply Ex CW1/6 to the legal notice, he has stated that he only obtained loan of Rs 35,000/- which he had already repaid in cash. Contrary to this, the accused stated as his defence in notice served u/s 251 CrPC that he had bor- rowed Rs 3 lakh from the complainant on 4% interest in 2018, he suffered financial losses after lockdown and that he had already repaid Rs 5-5.5 lakhs. Again, the accused changed his stand at the time of his personal examination u/s 313 CrPC where he stated that he only borrowed Rs 30,000/- from the complainant in July 2018 at 4% interest and he had repaid the same along with interest. So, it becomes clearly that the fact of exis- tence of debt is not in dispute, only its amount is disputed. Therefore, merely because the cheque was given for security purpose, this debt does not become non recoverable one, if the liability of the accused subsisted at the time of the presentation of the cheque. In this regard, the accused has claimed that he repaid the loan amount. However, this claim of the accused remained a mere statement. He brought no proof, oral or documen- tary, of the repayment. Infact, no suggestion regarding the repayment was even put to the complainant CW1 during his cross examination. The accused did not state anything about the time/year/month of the repayment of the loan or the exact amount repaid. At Digitally signed by HIMANSHI CC NI:- 06/2021 HIMANSHI TYAGI TYAGI Date:
2024.07.25 15:36:26 +0530 the stage of notice u/s 251 CrPC, he stated that he has repaid Rs 5-5.5 lakhs. At the stage of examination u/s 313 CrPC, he stated that he took loan of Rs 30,000 @ 4% interest and he repaid the same alongwith interest in cash. This court if of view that the accused only made vague oral statements about repayment and the defence of repayment of loan remained a mere oral statement. Therefore, the accused failed to prove that there was no legally recoverable debt on the date of the presentation of the cheque.
(17.) Further, as already mentioned in the preceding paragraphs, the accused kept on changing his version regarding the loan amount. He stated a different loan amount on different occasion. To illustrate again, he told the loan amount to be Rs 35,000 in his re- ply, to be Rs 3,00,000 in his defence during notice u/s 251 CrPC and Rs 30,000 at the time of examination u/s 313 CrPC. But did not bring any evidence to prove the amount of loan or to show that the complainant gave loan for a different amount than stated by him in his complaint. It is an elementary rule of law that a party litigant cannot be per- mitted to assume inconsistent positions in Court, to play fast and loose, to blow hot and cold, to approbate and reprobate, to the detriment of his opponent. Thus, accused cannot be allowed to claim that the three amount told by him were the correct loan amount of loan. He failed to even tell a specific correct amount of the loan. It is also abundantly clear from perusal of the record that no suggestion was put to dispute the loan amount to the complainant CW1 during his cross examination. No suggestion or question was put to CW1 on the aspect of repayment of loan or on the aspect of the rate or amount of in- terest.. The accused hence failed to prove his contention of loan amount being different than that stated by the complainant.
(18.) Coming on to the next defence of the accused that the promissory note was forged by the complainant. The perusal of the records shows that accused did not lead any defence evidence, despite opportunity, to show that the promissory note brought on Digitally signed CC NI:- 06/2021 by HIMANSHI HIMANSHI TYAGI TYAGI Date:
2024.07.25 15:36:31 +0530 record by the complainant is a forged document. Moreover, the statement of the com- plainant as CW1 clearly shows that no suggestion or question was put to the com- plainant during his cross examination qua the forgery or the illegality of the promissory note. As rightly pointed out by the Ld counsel for the complainant, the accused never approached or filed any compliant before any authority regarding the alleged forged promissory note. It is not the case where the accused learnt about the existence of such promissory note only at the stage of trial. The accused had filed the reply to the legal no- tice wherein he stated that the promissory note is a forged document but still took no ac- tion against the complainant. Though the fact of non filing of such complaint does not disprove the defence of the accused, however the lack of such complaint surely calls for a higher and careful scrutiny of the defence of the accused. It was open to the accused to prove the allegations of the forgery and non-genuineness of promissory note by way of independent evidence. The accused however failed to successfully challenge the gen- uineness of the promissory note as he neither brought any oral evidence nor any docu- mentary evidence to prove the alleged forgery. Despite opportunity, the accused did not put any suggestion about the alleged forgery to CW1 during his cross examination. Thus, this court if of view that the accused merely made vague oral statements about forgery of the promissory note and his this defence also fails.
(19.) Further, the accused took the defence that he had issued only a blank signed secu- rity cheque and did not fill its particulars. In this regard, it is quite settled principle of law that once accused had admitted his signatures on the cheque, he cannot escape his li- ability on the ground that particular have not been filled by him, or the signature on the cheque and the contents are filled in different writing and ink. When such a cheque con- taining blank is signed and handed over, it means that person signing it, has given im- plied authority to the holder of the cheque, to fill up the blank which he has left. It has been clearly laid down in section 20 of Negotiable Instrument Act, 1881 that where one Digitally signed CC NI:- 06/2021 HIMANSHI by HIMANSHI TYAGI TYAGI Date:
2024.07.25 15:36:35 +0530 person signs and delivers to another a Negotiable Instrument either wholly blank or hav- ing written thereon incomplete Negotiable Instrument, he thereby gives, "prima facie au- thority to the holder thereof to make or complete, as the case may be, upon it a Nego- tiable Instrument". In the case of Satish Jayantilal Shah Vs. Pankaj Mashruwala & anr., 1996 Cri.L.J.3099, it has been held that :
"No law provides that in case of any Negotiable Instruments, entire body has to be writ- ten by maker or drawer only."
(20.) Similarly, in the case of Moideen vs Johny, 2006 (2) DCR 421, it has been held that when a blank cheque is issued, the drawer gives an authority to a person to whom it is issued, to fill it at appropriate stage with necessary entries and to present it to the bank. In instant case, the complainant stated in his cross examination that the particulars on the cheque were filled by his son on his behalf. Moroever, since the accused has ad - mitted his signature in answer to notice u/s 251 Cr.P.C as well as his statement u/s 313 Cr.P.C, the accused cannot now dispute the contents of the cheque in question.
(21.) In view of the aforementioned reasons and observations, this Court is of the con- sidered opinion that the accused could not rebut the presumption raised in favour of the complainant. It can thus, be reasonably concluded that accused has failed to prove that no legally recoverable debt existed. On the other hand, the complainant has disclosed the existence of a legally enforceable debt or liability vide the cheque in question, return memos, legal notices and other documents brought on record. There is sufficient mate- rial on record to conclude that complainant has successfully proved his case beyond rea- sonable doubt.
(22.) Accordingly, accused Sh. Reetu Raj @ Neeraj is hereby convicted of the offence punishable under Section 138 of the Act.
Digitally signed by HIMANSHICC NI:- 06/2021 HIMANSHI TYAGI
TYAGI Date:
2024.07.25
15:36:39 +0530
(23.) Let the convict be heard on quantum of sentence.
(24.) Copy of Judgment be supplied to the convict free of cost.
(25.) Ordered accordingly.
Announced in open court on 25.07.2024.
This judgment contains 13 pages and each page has digitally signed by the undersigned. Digitally signed HIMANSHI by HIMANSHI TYAGI TYAGI Date: 2024.07.25 15:36:47 +0530 (HIMANSHI TYAGI) JMFC/NI ACT/DIGITAL COURT-01 NORTH DISTRICT, ROHINI COURTS 25.07.2024 CC NI:- 06/2021