Delhi District Court
Mahesh Singh vs . Anshul Cc No.24610/18 Page No. 1 Of 13 on 26 April, 2019
IN THE COURT OF MR. MRIDUL GUPTA, METROPOLITAN MAGISTRATE,
SOUTH-WEST, DWARKA, DELHI
In Re:
CNR No. DLSW02-025228-2018
CC No. 24610/2018
Mahesh Singh
S/o Sh. Ram Sawroop Singh
R/o H No. P-55 Chanakya Place,
Part-II, Uttam Nagar
New Delhi - 110059.
............Complainant
Versus
Anshul
S/o Sh. Ram Dass
R/o P-49, Chanakya Place,
Part-II, Uttam Nagar
New Delhi - 110059.
.............Accused
(1) Offence complained of or
proved : 138 N.I. Act
(2) Plea of accused : Pleaded not guilty
(3) Date of institution of case : 25.06.2018
(4) Date of conclusion of arguments: 11.04.2019
(5) Date of Final Order : 26.04.2019
(6) Final Order : Convicted
Mahesh Singh Vs. Anshul CC No.24610/18 Page no. 1 of 13
JUDGMENT
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 ').
2. Brief facts relevant for the decision of the case are as under:-
The complainant alleges that he and the accused have friendly relations since last twenty years. In May 2016, accused approached the complainant for friendly loan of Rs. 2,00,000/- with promise to return the same within two years. Thus, the amount was advanced in cash to accused by complainant. It is alleged that in last week of May 2018, the complainant asked for repayment of the loan from accused and towards discharge of his liability, accused gave one cheque of Rs. 2,00,000/- i.e. cheque in question bearing no. 091060 dated 25.05.2018 drawn on Allahabad Bank Janak Puri, New Delhi. Thus, the complainant presented the cheque in his account maintained at State Bank of India, Janak Puri, Delhi, which was returned with the remarks "funds insufficient" vide bank return memo dated 29.05.2018. Thereafter, complainant served a legal notice dated 05.06.2018 upon the accused through his counsel demanding the said amount. Despite service of aforesaid notice, neither any reply was sent nor the money was repaid by the accused. Thereafter, complainant has filed the present complaint case with the submission that accused be summoned, tried and punished according to law.
3. In his pre-summoning evidence, complainant examined himself on affidavit Ex. CW-1/1. He reiterated the contents of complaint and placed on record, original cheque of Rs. 2,00,000/- i.e. cheque in question bearing no. 091060 dated 25.05.2018 drawn on Allahabad Bank Janak Puri, New Delhi as Ex. CW-1/A, cheque returning memos dated 29.05.2018 as Ex. CW-1/, legal demand notice dated 05.06.2018 as Ex. CW-1/C, receipt of speed post as Ex. CW-1/D, tracking report as Ex. CW-1/E. Mahesh Singh Vs. Anshul CC No.24610/18 Page no. 2 of 13
4. Upon appreciation of pre-summoning evidence, accused was summoned for an offence punishable under Section 138 of the Act and notice under Section 251 Cr.P.C. for this offence was framed upon accused on 30.11.2018 to which he pleaded not guilty and claimed trial. He admitted his signatures on the chaque in question, however, stated that the remaining details in the same has not been filled by him. He denied taking any loan from complainant. He stated that the complainant had to arrang for purchase of a shop from One Krishan to accused. He gave the cheque in question as blank signed security cheque to complainant for the same. The deal could not be arranged and complainant did not return the cheque and misused the same. He denied receipt of legal demand notice.
5. The accused moved an application to cross-examine the complainant. Complainant as CW-1 was duly cross examined by the accused. No other witness was produced by the complainant and he closed his evidence by giving a separate statement to this effect. Thereafter, statement of accused under Section 313 Cr.P.C. was recorded in which all the incriminating evidence were put to him to which accused reiterated the stand taken by him in answer to notice u/s 251 Cr.P.C. Accused further stated that he did not want to lead any defence evidence.
6. Thereafter, matter was listed for final arguments. It was argued by the Ld. counsel for the complainant that this is a fit case for conviction of the accused as all the essential ingredients of Section 138 of the Act read with Section 139 of the Act have been fulfilled and that the same has been aptly demonstrated by the complainant before the court. It was argued that accused admitted his signatures on the cheque in answer to notice u/s 251 Cr.P.C and in his statement u/s 313 Cr.P.C. He argued that accused never gave reply to the legal demand notice. He also argued that, accused did not produce any evidence in support of his version. It is also argued that neither was Kishan examined as witness by accused, nor did accused produced any agreement or deed rearding alleged purchase of shop from said Kishan. It is argued that accused did not lodge any legal proceedings against complainant for alleged misused of cheque in question. It was argued that accused failed to raise the probable defence to disprove the case of Mahesh Singh Vs. Anshul CC No.24610/18 Page no. 3 of 13 complainant and to rebut the presumption under Section 139 NI Act. Therefore, accused be convicted for the offence under Section 138 of the Act.
7. Per contra, on behalf of accused, the submissions made by accused in his plea of defence at the time of framing of notice under Section 251 Cr.P.C and in his statement under Section 313 Cr.P.C were reiterated. Accused maintained that cheque in question was given as security for the proposed transaction of purchase of shop from one Kishan. The deal could not fructify and the complainant misused the cheque in question. He argued that no exact date of loan was revealed in the complaint and there was no written document of alleged loan. He argued that complainant failed to disclose sufficient sources to advance the loan. He also argued that the complainant did not disclose the loan in his ITR. He argued that evidence of complainant suffered from material lapses and was not sufficient to establish the case against accused. He submitted that complainant has failed to prove his case beyond reasonable doubt and accused is entitled to be acquitted of offence u/s 138 of the Act.
8. I have perused the entire record as well as evidence led by the complainant as well as by the accused.
9. Before appreciating the facts of the case in detail for the purpose of decision, let relevant position of law be discussed first:-
For the offence under Section 138 of the Act to be made out against the accused, the complainant must prove the following points, that:-
1. the accused issued a cheque on account maintained by him with a bank.
2. the said cheque had been issued in discharge, in whole or in part, of any legal debt or other liability.
3. the said cheque has been presented to the bank within a period of three months from the date of cheque or within the period of its validity.
4. the aforesaid cheque, when presented for encashment, was returned unpaid/dishonoured.
5. the payee of the cheque issued a legal notice of demand to the drawer Mahesh Singh Vs. Anshul CC No.24610/18 Page no. 4 of 13 within 30 days from the receipt of information by him from the bank regarding the return of the cheque.
6. the drawer of the cheque failed to make the payment within 15 days of the receipt of aforesaid legal notice of demand.
10. The Act raises two presumptions in favour of the holder of the cheque i.e. Complainant in the present case; firstly, in regard to the passing of consideration as contained in Section 118 (a) and secondly, a presumption that the holder of cheque receiving the same of the nature referred to in Section 139 discharged in whole or in part any debt or other liability.
Section 118 of the N.I Act provides :
"Presumptions as to negotiable instruments: Until the contrary is proved, the following presumptions shall be made: (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".
11. For the offence under Section 138 of the Act, the presumptions under Sections 118(a) and 139 have to be compulsory raised as soon as execution of cheque by accused is admitted or proved by the complainant and thereafter burden is shifted to accused to prove otherwise. These presumptions shall be rebutted 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 etc. A presumption is not in itself evidence but only makes a prima facie case for a party for whose benefit it exists. Presumptions both under Sections 118 and 139 are rebuttable in nature. Same was held by the Hon'ble Supreme Court of India in Hiten P. Dalal v. Bratindranath Banerjee [(2001) 6 SCC 16].
Mahesh Singh Vs. Anshul CC No.24610/18 Page no. 5 of 13
12. In the present case, accused has admitted his signatures on the cheque in question in answer to notice u/s 251 Cr.P.C and in his statement u/s 313 Cr.P.C. Reference can be made to Judgment of Apex Court in Rangappa v. Mohan, AIR 2010 SC 1898,that, "Once the cheque relates to the account of the accused and he accepts and admits the signatures on the said cheque, then initial presumption as contemplated under Section 139 of the Negotiable Instruments Act has to be raised by the Court in favour of the complainant."
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 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."
It has been held in M/s. Kumar Exports v. M/s. Sharma Carpets, [2009 A.I.R. (SC) 1518] that the accused may rebut these presumptions by leading direct evidence and in some and exceptional cases, from the case set out by the complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial. Further, the burden may be discharged by the accused by showing preponderance of probabilities and the onus on the accused is not as heavy as it is on the complainant to prove his case. In light of aforestated legal position, let us carry out a scrutiny of the evidence led at the trial.
13. In the present case, the complainant by way of an affidavit led his own evidence testifying that cheque was issued to him after he had advanced loan of Rs. 2,00,000/- to the accused. The cheque in question, dishonour memo of the cheque and legal demand notice were exhibited on record.
14. The accused did not lead any defence evidence. However, the principle defence taken by the accused as brought out from the cross examination of Mahesh Singh Vs. Anshul CC No.24610/18 Page no. 6 of 13 complainant, statement of accused u/s 313 Cr.P.C and in answer to notice u/s 251 Cr.P.C is that he used to make matthies at a bakery owned by one Kishan. It is his defence that he wanted to purchase a shop from said Kishan. The complainant confidentially told the acused that the bakery shop of Kishan is for sale for Rs. 8 lacs. The accused told the complainant to pay the bayana for the shop while he arranged the remaining amount. Complainant took the cheque in question as blank signed security cheque from accused towards payment of said bayana amount. Thereafter complainant told the accused that the shop is now being sold for Rs. 15 lacs instead of Rs. 8 lacs. Upon being so told, accused stated that he did not want to purchase the shop and asked for return of his security cheque. However, complainant did not return the same and misused the cheque in present case.
15. However, the above defence version does not bring out a credible defence. Though accused has put forth version regarding cheque being given for purchase of bakery shop of Kishan, he has not produced any document to show existence of any such proposed transaction for purchase of the shop. Accused has not even disclosed as what was the amount of the bayana for purchase of shop and as to why he gave blank signed security cheque to complainant without filling in the amount of the bayana. Furthermore, even as per own version of accused as brought out in cross-examination of complainant, the accused used to make matthies in a bakery of Kishan. Thus accused was known to Kishan directly. No reasonable explanation has been furnished by the accused as to why he entered into the transaction for purchase of shop with complainant and give security cheque for bayana to complainant, and not transact with Kishan directly. Moreover the accused has not examined Kishan as a witness is support of his version.
16. Furthermore, the cheque in question has been dishonored thrice with the remarks " funds insufficient" vide bank return memo dated 29.05.2018 ( Ex. CW- 1/B) and not for any other reason. If as per version of accused, the security cheque was not returned by complainant, even after the deal of purchase of shop could not be arranged, there is no explanation by accused as to why stop Mahesh Singh Vs. Anshul CC No.24610/18 Page no. 7 of 13 payment instructions were not issued. Furthermore, it is also not the case of the accused that he gave any written notice to complainant for return of the cheque or filed any complaint against complainant for the wrongful retention and presentation of cheque in bank successively. In light of above, this court is of the view that simple averment of misuse of blank signed cheque is not a credible defence.
17. Regarding averment of Ld. Counsel for accused that complainant admitted in his cross examination that he did not disclose the present loan in his ITR. It was argued that same castes doubt on case of complainant. This argument of Ld. Counsel for accused is also devoid of any merit as though the loan has not been shown in ITR of complainant, it is trite law that the provisions of Section 269SS of Income Tax Act, 1961, prohibit taking or accepting loan over amount of Rs. 20,000/- in cash and do not make the amount of loan given in cash, unrecoverable in proceedings under Section 138 of the Act. Reliance in this regard can be placed upon the decision of Hon'ble High Court of Delhi in Lekh Raj Sharma v. Yashpal Sharma, (Crl.L.P. 567/2014),D.O.D. 30.06.2015, wherein it was observed:
".......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.In this regard, reference may be placed on the decisions of the Bombay High Court in:
........
ii) Mr. Krishna P. Morajkar vs. Mr. Joe Ferrao, 2013 CRIJ (NOC) 572 Bombay (Decided on 19.07.2013), wherein the Court observed:
"The underlined observations do not disclose as to where can one find a prohibition on recovering amounts not disclosed in income tax returns. With utmost humility, I have to state that I have not come across any provision of Income Tax Act, which makes an amount not shown in the income tax returns unrecoverable. The entire scheme of the Income Tax Act is for ensuring that all amounts are accounted for. If some amounts are not accounted for, the person would be visited with the penalty or at times even prosecution under the Income Tax Act, but it does not mean that the borrower can refuse to pay the amount which he has borrowed simply, because there is some infraction of the Mahesh Singh Vs. Anshul CC No.24610/18 Page no. 8 of 13 provisions of the Income Tax Act. Infraction of provisions of Income Tax Act would be a matter between the revenue and the defaulter and advantage thereof cannot be taken by the borrower. In my humble view, to say that an amount not disclosed in the income tax returns becomes irrecoverable would itself defeat the provisions of Section 138 of the Negotiable Instruments Act."
Therefore, though non-compliance of provisions of Section 269SS of Income Tax Act,1961, may invite penal action under the said Act, however the same cannot operate to undue advantage on borrower who can refuse to pay the loan amount taken by him on this ground.
18. Ld. Counsel for accused also argued that though complainant stated in his cross examination that the sources of funds for present loan were arranged out of crop sold in the village, savings lying at home and by taking an amount of Rs. 45,000/- from his wife. He argued that the wife of complainant was never examined as witness by the complainant. It was argued that the same casts suspicion on case of complainant. However, these arguments of Ld. Counsel are also bereft of any merit as the accused has taken a specific defence, however, failed to prove the same. Reliance in this regard can also be placed on decision of Hon'ble High Court of Delhi, in Sanjay Arora V. Monika Singh, Crl. Appeal No. 98/2017, dated 31.05.2017, wherein it was observed:
"Mere admission of the complainant that he was earning only Rs. 12,000 per month from small business or his failure to file income tax returns, or his omission to produce the bank passbook or to examine Chhotu as a witness in corroboration, are inconsequential. In order to rebut the statutory presumption, it was the burden of the respondent to prove the facts he had pleaded in answer to the notice under Section 251 Cr.P.C. No material in support of such plea having come on record, the statutory presumption under Section 139 Negotiable Instruments Act in the case at hand has not been rebutted."
As discussed above, though the accused has taken the defence that he gave the cheque in question as security cheque for bayana amount, for purchase of a shop, however, he has failed to establish his defence version by producing any cogent material on record.
Mahesh Singh Vs. Anshul CC No.24610/18 Page no. 9 of 13
19. It is also pertinent to note that the accused did not lead any evidence in defence. The decision of Hon'ble High Court of Delhi in V.S.Yadav vs Reena, Crml. Appeal No. 1136/2010, date of decision 21.09.2010, can be referred to here, wherein it was held:
"It must be borne in mind that the statement of accused under Section 281 Cr. P.C. or under Section 313 Cr. P.C. is not the evidence of the accused and it cannot be read as part of evidence. The accused has an option to examine himself as a witness. Where the accused does not examine himself as a witness, his statement under Section 281 Cr. P.C. or 313 Cr. P.C. cannot be read as evidence of the accused and it has to be looked into only as an explanation of the incriminating circumstance and not as evidence. There is no presumption of law that explanation given by the accused was truthful. In the present case, the accused in his statement stated that he had given cheques as security. If the accused wanted to prove this, he was supposed to appear in the witness box and testify and get himself subjected to cross examination. His explanation that he had the cheques as security for taking loan from the complainant but no loan was given should not have been considered by the Trial Court as his evidence and this was liable to be rejected since the accused did not appear in the witness box to dispel the presumption that the cheques were issued as security. Mere suggestion to the witness that cheques were issued as security or mere explanation given in the statement of accused under Section 281 Cr. P.C., that the cheques were issued as security, does not amount to proof."
The law laid down in above judgment is squarely applicable in present case. In present case also, the accused has not led any evidence in support of his version of security cheque. A simple bald averment of misuse of security cheque in notice under section 251 Cr.P.C and statement under section 313 Cr.P.C., in absence of any material to substantiate the same, either through cross-examination of complainant or defence evidence, is not sufficient to dislodge the statutory presumptions.
20. Even if it is considered that accused gave cheque in question as blank signed security cheque to complainant , he cannot escape his liability on the Mahesh Singh Vs. Anshul CC No.24610/18 Page no. 10 of 13 ground that all or some of the particulars have not been filled in by him, or that signatures on cheque and the contents are filled in different writings and inks. When such a cheque containing blanks is signed and handed over, it means that the person signing it has given implied 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 Instruments Act 1881, that where one person signs and delivers to another a Negotiable Instrument either wholly blank or having written thereon an incomplete negotiable instrument, he thereby gives, "prima facie authority to the holder thereof to make or complete, as the case maybe, upon it a negotiable instrument". In the case of Satish Jayantilal Shah v. Pankaj Mashruwala and 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 written by maker or drawer only."
In the case of Moideen v. Johny 2006 (2) DCR 421, it has been held that when a blank cheque is issued, the drawer gives an authority to the person to whom it is issued, to fill it up at the appropriate stage with necessary entries and to present it to the bank. Thus, the accused can not dispute the contents of the cheque in question.
21. It is also the averment of the accused that he did not receive the legal demand notice. However, it is worth noting that the address of the accused as mentioned in legal demand notice is the same address as that in his statement u/s 313 Cr.P.C and his bail bonds i.e. P-49, Chankya Place Part-II, Uttam Nagar, New Delhi. Moreover the accused has not brought on record any evidence to show that he was not residing at above address at time of legal notice. The above shows that legal notice was sent at correct address of accused. Once the legal notice is proved to be sent by post to correct address of accused then the presumption u/s 27 of General Clauses Act, 1897 arises and it shall be presumed unless proved contrary, that legal notice sent to address of accused was delivered to him. In M/s Darbar Exports and Ors. Vs. Bank of India, 2003 (2) SCC (NI) Mahesh Singh Vs. Anshul CC No.24610/18 Page no. 11 of 13 132 (Delhi), the court held that a presumption of service of notice is to be drawn where the notice is sent through registered post as well as UPC on correct address. In the light of the same the legal notice is deemed to have been served upon the accused. The accused has failed to adduce any evidence to rebut the presumption of due service. As such, the legal notice stood served upon the accused but no payment was made despite the service nor any reply sent to the same. In Rangappa v. Mohan (supra), the Apex Court held:
"Furthermore, the very fact that the accused had failed to reply to the statutory notice under Section 138 of the Act leads to the inference that there was merit in the complainant's version."
The decisions in Santosh Mittal v. Sudha Dayal, 2014 (8) AD (Delhi) 268, and G.L. Sharma v. Hemant Kishor 2015 (2) AD (Delhi) 340, are also to the same effect.
22. Moreover as per the dicta of Apex Court in C.C. Alavi Haji vs Palapetty Muhammed & Anr, 2007 Cr. L.J. 3214, If the accused did not receive the legal notice, he could have made payment of the cheque amount within 15 days of receipt of summons from this court and could have prayed for rejection of the complaint, but this course of action has not been adopted by accused. Hence the defence of non-service of legal notice is without substance.
23. In view of the above, this court is of the considered opinion that apart from not raising a probable defence, the accused was not able to contest the existence of a legally enforceable debt or liability. The complaint disclosed the existence of a legally enforceable debt or liability vide the cheque in question, return memo and the legal notice brought on record. However, accused failed to rebut the presumption in favour of complainant either on the basis of other material available on record or by adducing any defence evidence. There is sufficient material on record to conclude that complainant has successfully proved her case beyond reasonable doubt.
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24. Accordingly, the accused is convicted for the offence under Section 138 of Negotiable Instruments Act, 1881.
25. Let the convict be heard on quantum of sentence.
26. Copy of Judgment be supplied to the convict free of cost.
Digitally signed MRIDUL by MRIDUL
GUPTA
GUPTA Date: 2019.04.26
15:19:15 +0530
ANNOUNCED IN THE OPEN COURT (MRIDUL GUPTA)
TODAY i.e. 26th April, 2019 METROPOLITAN MAGISTRATE
DWARKA DISTRICT COURTS/ DELHI
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