Delhi District Court
Noted In State Of Madras vs . A. Vaidyanatha Iyer Air 1958 on 1 June, 2022
IN THE COURT OF SH APOORV BHARDWAJ, MM-08
(NI ACT) SOUTH WEST/DWARKA COURTS/DELHI
In case of:-
SH. SUNIL KUMAR ... Complainant
VERSUS
SH. UMESH KUMAR ... Accused
JUDGEMENT
a) Sl no. of the case : 13292/2017
b) CNR of the case : DLSW02-018260-2017
c) Date of institution 10.07.2017
d) Name, parentage and Sh Sunil Kumar
address of the S/o Sh Kartar Singh
complainant : R/o H.no 26/B, Sainik Enclave,
Part-1 Jharoda Kalan, New Delhi
e) Name, parentage and Sh Umesh Kumar
address of the accused : S/o Sh Vishnu Dutt Dwivedi R/o H. no. A-142, Sainik Enclave, Part-3 Jharoda Kalan, New Delhi
f) Offence complained of : 138 NI Act
g) Plea of the accused : Pleaded not guilty
h) Arguments heard on : 06.05.2022
i) Final order : Convicted
j) Date of Judgement : 01.06.2022 BRIEF STATEMENT OF FACTS FOR THE DECISION
1. Vide this judgement, I shall decide the present complaint filed under section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as 'NI Act') by the complainant against the accused.
Factual Matrix
2. According to the Evidence by way of Affidavit filed by the complainant, the accused had taken a friendly loan of Rs 5 lakhs from him on 10.03.2016 for a period of two months. The accused had also handed over the cheque in question of Rs 5,00,000/- dated 10.03.2017 in lieu of the abovesaid loan. Since the accused failed to repay the loan in the stipulated time the complainant presented the cheque in question in his bank twice for encashment which was dishonoured for the reason "kindly contact drawer/ drawee bank and present again" vide returning memo dated 24.05.2017 and for the reasons "funds insufficient and account inoperative" vide return memo dated 06.06.2017. Thereafter, despite issuance of legal demand notice to the accused, the accused failed to pay the cheque amount within 15 days thereof and hence the present case.
3. Upon a prima facie consideration of pre-summoning evidence, cognizance of offence under section 138 NI Act was taken and the accused was summoned. Thereafter separate notice explaining accusation against the accused was put to the accused under section 251 of The Code of Criminal Procedure, 1973 (hereinafter referred to as 'CrPC') to which he pleaded not guilty and claimed CC no. 13292/2017 Sh Sunil Kumar v Sh. Umesh Kumar 2 trial. At this stage the accused admitted his signatures on the cheque in question but stated that they were obtained coercively and that the cheque was extorted from him. He also stated that he was running a committee alongwith the complainant and that he owes no liability towards him. He also denied having received the legal demand notice. Thereafter, an oral application under section 145(2) NI Act on his behalf was allowed and he was granted an opportunity to cross-examine the complainant.
4. The complainant examined himself as CW1 and adopted his pre-summoning evidence as his post summoning evidence and relied on her evidence by way of affidavit Ex CW1/1 and 9 documents i.e. Ex. CW1/A (cheques), Ex. CW1/B and Ex CW1/C (returning memos dated 24.05.2017 and 06.06.2017), Ex. CW1/D and Ex CW1/G (legal notice dated 09.06.2017 and 12.06.2017), Ex CW1/E (colly) and Ex CW1/H (Colly) (postal receipts), Ex CW1/F and Ex CW1/I (tracking report). Further he was cross-examined. Thereafter, an application under section 311 CrPC to place on record additional documents on behalf of the complainant was allowed and he further relied on five more documents i.e Ex CW1/J and Ex CW1/K (ITRs for AY 2016-17 and 2017-18), Ex CW1/L (khatoni for year 2015-16), Ex CW1/M (Khasra Girdawari for the year 2017-18) and Ex CW1/O (agreement dated 10.03.2017 executed between the complainant and the accused) in his post-summoning evidence. Further, he was cross-examined.
5. In his cross-examination, CW-1 deposed that he has CC no. 13292/2017 Sh Sunil Kumar v Sh. Umesh Kumar 3 agricultural and rental income and that he earns approximately Rs 40,000/- to Rs 50,000/- per month. He further stated that out of this amount, his rental income is to the tune of Rs 28,000/-. He further stated that he had arranged the funds from his own and his wife's savings. He further stated that he had advanced the loan to the accused in cash at his residence. Upon being confronted with para-4 of his affidavit Ex. CW1/1 he stated that the year mentioned in the said para is incorrect and the loan was advanced on 10.03.2017 and not on 10.03.2016. He denied the suggestion that he used to run a committee with the accused or that he had extorted the cheque in question from him. He stated that as per his knowledge the monthly income of the accused was Rs 20,000/- per month. He denied various other suggestions given by Ld. Counsel for the accused.
6. In the statement of the accused under section 313 CrPC, he reiterated the defence disclosed at the stage of framing of notice under section 251 CrPC. Accused opted to lead DE and moved an application under section 315 CrPC which was allowed.
7. As defence witness DW-1, the accused deposed that he used to run a committee in which the complainant used to be a member. The complainant had stopped participating in the committee and his account was settled in December 2016. Thereafter, under the influence of other committee members the complainant started demanding more money and harassing him. Due to this harassment he got seriously ill and was admitted to a hospital and discharged on 17.03.2017. On this date, the complainant along CC no. 13292/2017 Sh Sunil Kumar v Sh. Umesh Kumar 4 with 4-5 other persons arrived at his house and coerced him to sign two blank cheques and some printed and blank papers. His wife had even made a call to PCR on the said date and later on he had also filed a police complaint with SHO PS Baba Haridas Nagar dated 29.03.2017 (Mark D-1). In his cross-examination he stated that he has known the complainant for the last 8 to 10 years. He further stated that the cheque was taken forcefully from him on 17.03.2017. He also stated that he cannot show any document pertaining to committee work since the complainant had forcefully taken the committee register from his residence on 28.03.2017. He denied the suggestion that he filed the complaint Mark-D1 only to create a false narrative after issuing the cheque in order to evade his legal liability. He also stated that he has not filed any case against the persons mentioned in his complaint Mark D-1 since the committee work is an illegal work. He denied various suggestions given by Ld. Counsel for the complainant.
8. As DW-2, Smt. Poonam Dwivedi, wife of the accused stated that the complainant was a member of a committee with my husband and that her husband never took any loan from him. She further stated that on 16.03.2017 one Mr. Lamba and one Mr Yograj had come to her house seeking whereabouts of her husband, however, her husband was admitted in a hospital on that day. Thereafter, on 17.03.2017 the complainant along with 4-5 other persons had arrived at her house and pressurized her husband to sign various documents including some cheques. She had then called the police and PCR van had arrived at her house. In her cross-examination she denied the suggestion that she is CC no. 13292/2017 Sh Sunil Kumar v Sh. Umesh Kumar 5 deposing falsely only to protect her husband. She further denied the suggestion that the cheque in question was issued by her husband to the complainant on 10.03.2017. She voluntarily submitted that her husband was not in Delhi on 10.03.2017 as he had gone to his native village. She denied various suggestions given by Ld Counsel for the complainant. Thereafter, DE was closed and final arguments were heard.
9. During the course of final arguments, Ld counsel for the complainant submitted that the complainant has duly proved her case by placing on record the entire documentary evidence along with his ITR and documents showing ownership of agricultural land. He submitted that the complainant has proved his financial capacity in his testimony and by showing his ITR for the relevant years. He also submitted that the accused has admitted his signatures on the cheque in question and has also admitted that the address mentioned on the legal notice is his correct address and thus, presumption arises in favour of the complainant and against the accused. He relied on the following judgements ● Naresh Chand Tyagi v Devender Kumar Tyagi 2022 SCC OnLine Del 526 ● Bir Singh v Mukesh Kumar (2019) 4 SCC 197 ● Ragini Gupta v Piyush Dutt Sharma 2019 SCC OnLine MP 4372 ● Lekhraj Sharma v Yashpal Gupta 2015 SCC OnLine Del 10074 He prayed that the accused be convicted.
CC no. 13292/2017 Sh Sunil Kumar v Sh. Umesh Kumar 6
10. Per contra, ld. counsel for the accused submitted that the complainant had failed to prove his financial capacity to advance such a huge loan. He also submitted that as per the testimony of the complainant, the accused was earning only Rs 20,000/- per month. He submitted that no prudent person can advance a loan of Rs 5,00,000/- for a period of two months to someone who has no capacity to repay such a loan. He also submitted that the stand of the accused has been consistent throughout the trial. He also submitted that the ITRs filed by the complainant have not been signed by any authorised CA and thus cannot be read into evidence. He further submitted that Ex CW1/O is not a registered document and hence, it cannot be read into evidence. He relied on the following judgements ● K Subramani v K Damodar (2015) 1 SCC (CRL) 576 ● M S Narayana Menon v State of Kerala 2006 SCC OnLine SC 660 ● Veerayya v G K Madivalar 2011 SCC OnLine Kar 4220 ● Kiran B H v Mirium Joyse Singh decided by Ld ACMM, Bengaluru City on 31.08.2021 in CC No. 3972/2018 He prayed that the accused be acquitted.
Legal Position:-
11. Before proceeding further to reflect upon the defence and evaluation of evidence, the foremost check point is whether the facts averred by the complainant fulfil the basic statutory requirement for constituting an offence under section 138 NI Act. To establish the offence under Section 138 of the NI Act against CC no. 13292/2017 Sh Sunil Kumar v Sh. Umesh Kumar 7 the accused, the complainant must prove the following:-
(i) The accused must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account;
(ii)The cheque should have been issued for the discharge, in whole or in part, of any debt or other liability;
(iii) That 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;
(iv) That cheque is 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;
(v) The payee or the holder in due course of the cheque makes 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;
(vi) 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.
Being cumulative 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 under section 138 NI Act.
12. It is apt to discuss that a negotiable instrument including a cheque carries following presumptions in terms of Section 118 (a) and Section 139 of the NI Act.
Section 118 of the NI Act provides :
"Presumptions as to negotiable instruments: Until the contrary is proved, the following presumptions shall be made:
CC no. 13292/2017 Sh Sunil Kumar v Sh. Umesh Kumar 8
(a) of consideration that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred was accepted, indorsed, negotiated or transferred for consideration;"
Section 139 of the N.I Act further provides as follows:
"Presumption in favour of holder it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability"
Thus, the combined effect of Section 118(a) and Section 139 of NI Act raises a presumption in favour of the holder of the cheque that he has received the same for discharge, in whole or in part of any debt or other liability.
13. For appreciating the legal position, reliance is placed on the judgement of the Hon'ble Supreme Court in the case of Hiten P. Dalal v. Bratindranath Banerjee (2001) 6 SCC 16 wherein it was held that:
"22. 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). Such a presumption is a presumption of law, as distinguished from a presumption of fact which describes provisions by which the court "may presume" a certain state of affairs. Presumptions are rules of evidence and do not conflict with the presumption of innocence, because by the latter all that is meant is that the prosecution is obliged to prove the case against the accused beyond reasonable doubt. The obligation on the prosecution may be discharged with the help of CC no. 13292/2017 Sh Sunil Kumar v Sh. Umesh Kumar 9 presumptions of law or fact unless the accused adduces evidence showing the reasonable possibility of the non existence of the presumed fact."
Similar view has been taken by the Hon'ble Supreme Court in the case titled as K.N. Beena vs. Munyappan and Ors. AIR 2001 SC 289.
14. Further, recently the Hon'ble Supreme Court in the case titled as Basalingappa v Mudibasappa, (2019) 5 SCC 418 summarised the principles related to sections 118(a) and 139 in the following manner "25.1. Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability. 25.2. The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities. 25.3. To rebut the presumption, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.
25.4. That it is not necessary for the accused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden. 25.5. It is not necessary for the accused to come in the witness box to support his defence."
From the ratio decidendi laid down in the aforesaid judgements, it is clear that for the offence under Section 138 of the Act, the CC no. 13292/2017 Sh Sunil Kumar v Sh. Umesh Kumar 10 presumptions under Section 118(a) and Section 139 of NI Act have to be compulsorily raised as soon as execution of cheque by the accused is admitted or proved by the complainant and thereafter, burden is shifted to the accused to prove otherwise.
Whether presumption under section 118 (a) and 139 NI Act can be drawn against the accused
15. Evaluating the facts of the present case in the light of the above provision this court deems it fit to first consider as to whether the complainant has prima facie proved the issuance of cheque by the accused towards the legal liability in favour of the complainant from the account maintained by him, so as to constitute an offence under section 138 NI Act. To carve out a prima facie case the complainant has filed on record original cheque as Ex. CW1/A. The said cheques were presented to the bank twice within a period of three months from the date on which it was drawn and were returned dishonoured on both the occasions for the reason "kindly contact drawer/ drawee bank and present again" vide returning memo dated 24.05.2017 (Ex. CW1/B) and for the reason "funds insufficient and account inoperative" vide return memo dated 06.06.2017 (Ex. CW1/C). The complainant then sent a legal notice dated 09.06.2017 (Ex. CW1/D) and a corrigendum to this legal notice on 12.06.2017 (Ex. CW1/G) both within the period of statutory requirement of 30 days from the date of receipt of information of dishonour. The original postal receipt of the legal demand notice has also been filed as Ex. CW1/E (Colly) and Ex. CW1/H (Colly). Despite this the accused failed to make payment of the cheque amount.
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16. In the present case, the accused has admitted that the cheque in question bears his signatures. The accused has also not disputed the genuineness of the postal receipt or the return memo although he denied having received the legal demand notice. However, perusal of record shows that the address of the accused mentioned on the legal notice, memo of parties, complaint made to SHO PS Baba Haridas Nagar by accused and the address furnished at the time of framing of notice is the same. Therefore, since the legal demand notice was properly addressed and posted, it is presumed to have been delivered under section 114 Indian Evidence Act, 1872 (hereinafter, "Evidence Act"). Moreover, in light of the decision of the Hon'ble Supreme Court of India in C C Alavi Haji v Palapetty Muhammad (2007) 6 SCC 555, the accused not having paid the amount of cheque in question within 15 days of service of summons to him, cannot be allowed to take such a plea.
17. The above facts suffice in raising the presumption under section 118(a) & 139 NI Act in favour of the complainant. In Rangappa v Sri Mohan 2010 V AD (SC), Hon'ble Supreme Court held that section 139 raises a presumption of existence of legally enforceable debt or liability and not simple existence of debt or liability. This presumption is a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of legally enforceable debt or liability can be contested.
18. When the presumption is raised in favour of the complainant, the burden is shifted on the accused to disprove the case of the CC no. 13292/2017 Sh Sunil Kumar v Sh. Umesh Kumar 12 complainant by rebutting the presumption raised in favour of the complainant. Being the rule of reverse onus, it is the duty of the accused to prove that he does not owe any liability towards the complainant. The accused can displace this presumption on the scale of preponderance of probabilities and lack of consideration or a legally enforceable debt need not be proved beyond a reasonable doubt as is the general rule in criminal cases. The accused has to make out a fairly plausible defence which is acceptable to the court. This the accused can do either by leading his own evidence or by raising doubt /demolishing the material or evidence brought on record by the complainant. With this in mind, this court now proceeds to discuss the defence of the accused.
Defence of the accused:-
19. The defence taken by the accused as disclosed by him at the stage of framing of notice under section 251 CrPC, the lines on which cross examination was conducted, his statement recorded under section 313 CrPC and arguments advanced on his behalf is that the accused never took any loan from the complainant, that his cheques were forcefully taken by the complainant, the complainant did not have any financial capacity to advance the loan and that he was running a committee business of which the complainant was a member.
20. Complainant has stated in his cross-examination that his monthly earning was to the tune of Rs 40-50,000/- per month. He has also clearly indicated the sources of his income as agricultural CC no. 13292/2017 Sh Sunil Kumar v Sh. Umesh Kumar 13 income and rental income. It is quite believable that a person who is earning around Rs 40-50,000/- per month could advance a sum of Rs 5,00,000/- to a friend at a time of need. Therefore, simply a bald suggestion that he did not have the financial capacity to advance the loan in question is not sufficient to rebut the presumption. Even then, the complainant has placed on record his ITR for the AY 2016-17 and AY 2017-18 showing that his gross total income was a little over Rs 4 lakh. He has also placed on record documents pertaining to agricultural property in the name of his father. He has also stated that he arranged the funds pooling his own and his wife's funds. Therefore, there is no reasonable ground to doubt that the complainant lacked the financial capacity to advance the loan in question. Reliance can be placed on Lekhraj Sharma (Supra) in which it has been held that only because loan has not been shown in the ITR is not a sufficient circumstance to rebut the presumption against the accused.
Whether no loan was advanced to the accused and whether the complainant was a member of a committee being run by the accused.
21. To prove that he was running a committee business and the complainant was a member of it, the complainant has relied on his own and his wife's testimony. He has also placed on record a police complaint dated 29.03.2017 to SHO PS Baba Haridas Nagar i.e. Mark D-1. I have perused the alleged police complaint. The crux of the complaint is that certain members of a committee being run by the accused had defrauded other members and ran away with the committee money and the members who had been CC no. 13292/2017 Sh Sunil Kumar v Sh. Umesh Kumar 14 so defrauded were harassing the accused to make good the loss. The accused has named several persons who were harassing him but throughout the complaint he has not mentioned the name of the complainant even once (either as a member of the committee or the ones who had harassed him). Moreover, DW-2 has categorically asserted in her cross-examination that the accused was not in Delhi on 10.03.2017 and that he had gone to his native village. However, in the complaint Mark D-1 the complainant has alleged that on 10.03.2017 he was threatened by the committee members and was forced to sign cheques and blank papers and hand them over to them. Therefore, the testimony of DW-2 appears to be untrustworthy. Accused has failed to bring any document pertaining to the membership of the complainant on record. As per his own version, the complainant had himself taken away the register pertaining to the committee. However, considering that nothing of this sort has been mentioned even in his own complaint Mark D-1, the version doesn't seem to be plausible enough. Moreover, the police complaint filed by the accused (Mark D-1) shows that the accused was in dire need of funds at the relevant time since there were many people who were harassing him for payment of committee dues. Hence, it only further corroborates the version of the complainant.
22. Lastly, the accused has denied having taken any loan whatsoever from the complainant. Nothing has been brought on record to substantiate this version apart from bald averments. Ld Counsel for the accused has submitted that the agreement between the complainant and the accused Ex. CW1/O is not a registered document and hence it cannot be read into evidence.
CC no. 13292/2017 Sh Sunil Kumar v Sh. Umesh Kumar 15 He also submits that there is an overwriting in the number of months on Ex. CW1/O. Firstly, the agreement Ex. CW1/O is more in the nature of a receipt /acknowledgment of the amount of Rs 5,00,000/- and is not compulsorily registrable as per the provisions of the Registration Act, 1908. Moreover, the signature on the document has already been admitted by the accused. As far as overwriting is concerned on Ex. CW1/O, the number of months has been written as '02' and overwriting is discernible in only the numeral '2'. Ld. Counsel for complainant has submitted that since the particular line on which the number of months has been mentioned falls on the fold of the document therefore, overwriting has been done only to make the numeral more prominent. Prima facie, over writing does not seem to be substantial or even relevant. Even otherwise, there is sufficient material on record to raise presumption against the accused in absence of Ex CW1/O also. Therefore, merely raising technical doubts regarding the admissibility of Ex CW1/O is of no avail to the accused.
23. I have also perused the cases cited at bar and found that none of them apply to the facts of the present case or help the cause of the accused ● In K Subramani (supra) and In Kiran B H (supra) the complainant had failed to prove his source of funds which is in stark contrast to the case in hand. In the present case, the complainant has explained his source of funds during cross-examination.
CC no. 13292/2017 Sh Sunil Kumar v Sh. Umesh Kumar 16 ● In MS Narayana Menon (supra) there were discrepancies in the books of accounts maintained by the complainant. This is not the fact scenario in the present case. ● In Veerayya (supra) the complainant could not prove his financial capacity nor could he place on record any receipt/acknowledgement on record. Therefore, these facts are quite different from the ones at hand.
Therefore, the accused has set up wholly untenable, contradictory and unreliable defences throughout the trial and has miserably failed at rebutting the presumption.
24. In view of the evidence adduced, documents put forth and arguments advanced by the parties and further in view of the above discussion, the court is of the considered view that the accused Umesh Kumar is guilty of offence under Section 138 of Negotiable Instruments Act, 1881 and accordingly, he is hereby convicted under Section 138 of Negotiable Instruments Act, 1881.
25. Let a copy of this judgement be provided to the convict free of cost.
Announced in open court on 01.06.2022 Judgement consists of 17 pages.
Digitally signed byAPOORV APOORV BHARDWAJ BHARDWAJ Date: 2022.06.01 16:51:05 +05'30' APOORV BHARDWAJ MM-08 (NI Act) SOUTH WEST:DWARKA COURTS.
N.D/01.06.2022 CC no. 13292/2017 Sh Sunil Kumar v Sh. Umesh Kumar 17