Delhi District Court
Complainant vs . on 23 January, 2020
IN THE COURT OF MS. TISTA SHAH
METROPOLITAN MAGISTRATE(CENTRAL) NI ACT, CENTRAL DISTT.
THC, DELHI.
CC No. 2774/17
Mr. Chandeshwar Pandit
S/o Sh. Butani Pandit,
R/o Gali No. 4/13, Sangam Vihar,
Wazirabad, Delhi-110084.
...... Complainant
Vs.
Mr. Amod Kumar Srivastava
S/o Sh. Kapil Dev Prashad Sinha
R/o 296, Pushpanjali Apartment,
Guru Ram Dass Nagar,
Sanjay Park, Laxmi Nagar, Delhi-110092.
...... Accused
Date of Institution : 21.02.2017
Offence complained of : S.138 N.I. Act
Date of Decision : 23.01.2020
Decision : Convicted
COMPLAINT UNDER SECTION 138 NEGOTIABLE INSTRUMENTS ACT,
1881.
JUDGMENT
1) The present complaint has been filed by the complainant against the accused under section 138 Negotiable Instruments Act, 1881.
2) The brief facts as alleged by the complainant in the complaint are that, the accused showed a need of Rs. 2,00,000/- for a period of six months for expansion of his business before the complainant and the CC No. 2774/17 Chandeshwar Pandit v. Amod Kumar Srivastava Page No. 1 of 14 complainant being in a fiduciary relationship with the accused gave Rs. 2,00,000/- in cash to the accused. The accused issued three post dated cheques in favour of the complainant in discharge of his liability. The accused had issued three cheques bearing no. 244760 dated 20.01.2017 for a sum of Rs. 50,000/-, cheque bearing no. 244761 dated 20.01.2017 for a sum of Rs. 1,00,000/- and cheque bearing no. 244762 dated 20.01.2017 for a sum of Rs. 50,000/- all drawn on Punjab National Bank with the assurance that the same will be honoured upon its presentation.
3) When the complainant presented the said cheques in the bank, they were returned unpaid by the banker of the complainant vide returning memo dated 25.01.2017 with the remarks "funds insufficient".
4) The complainant thereafter issued a legal demand notice on 03.02.2017 through counsel calling upon the accused to pay the said cheque amount within a period of 15 days from the date of receipt of the notice. The said notice was duly served upon the accused and the accused failed to pay the aforesaid dishonoured cheque amount. Hence, the present complaint u/s 138 Negotiable Instrument Act 1881 (hereinafter the NI Act) was filed on 21.02.2017.
5) In order to prove his case, the complainant had examined himself as CW-1 by way of affidavit CW-1/1 and relied upon the following documents:
(a) Original cheque in question bearing no. 244760 dated 20.01.2017 for Rs. 50,000/- Ex CW1/A.
(b) Original cheque in question bearing no. 244761 dated 20.01.2017 for Rs. 1,00,000/- Ex CW1/B. CC No. 2774/17 Chandeshwar Pandit v. Amod Kumar Srivastava Page No. 2 of 14
(c) Original cheque in question bearing no. 244762 dated 20.01.2017 for Rs. 50,000/- Ex CW1/C.
(d) Original cheques return memos dated 25.01.2017 Ex. CW-1/D to Ex. CW1/F.
(e) Legal notice dated 03.02.2017 Ex. CW-1/G.
(f) Speed post receipt dated 03.02.2017 Ex. CW1/H.
(g) Track report of the postal receipt Ex. CW1/I.
(h) Cheques deposit receipts Ex. CW1/J (colly).
6) On finding of a prima-facie case against the accused, the accused was summoned on 06.03.2017 where the accused appeared before the court on 28.07.2017.
7) Thereafter, notice u/s 251 Cr.P.C. was framed against the accused on 15.01.2018 to which he pleaded not guilty and claimed trial. The plea of defence of the accused was recorded where the accused had stated that " I had issued the cheques in question. The cheques bear my signatures. The amount and the name have been filled by me, however, I have not filled the date in the cheques in question. The complainant used to supply some material to me. I had issued the cheques in question as security cheques against eh same in the year 2011-2012. The complainant assured me that he will destroy the cheques in question as and when I make the payment to him. I kept on making the payment in cash to the complainant. Every time, the complainant would assure that he had destroyed for cheque for the said payment. I believed the assertion of the complainant. However in 2017, I received a legal demand notice from the complainant. That is when I came to know that the complainant has misused the cheques in question".
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8) After the framing of notice the complainant examined himself as CW-1 and was cross examined and discharged. No other witnesses were examined by the complainant. Thereafter, complainant evidence was closed and the matter was listed for statement of the accused u/s 313 Cr.P.C.
9) Statement of the accused was recorded u/s 313 Cr.P.C. r/w Section 281 Cr.P.C on 04.10.2019 wherein all the incriminating circumstances appearing in evidence against the accused were put to him to which the accused stated that "I had issued the cheques in question to eh complainant. The details mentioned on the cheques in question except the date mentioned there, have been filled by me. The signatures on the cheque in question are mine. I came to know about the dishonour when I received the legal demand notice from the complainant. I received the legal demand notice from the complainant. About 08-10 years back, I had business dealings with the complainant where the complainant used to supply me with spare motor parts. He used to ask me for my duly filled up (Except the date) and signed cheques and as and when I used to make the payment to him, I used to till him to destroy my cheque that had been given for the particular transaction. After about 08-10 years back, I had stopped dealing with the complainant. I do not owe any liability to the complainant. The cheques in question were given around 08-10 years back and I came to know about the dishonour of the cheques when I received the legal demand notice from the complainant. I had also replied the legal notice to the complainant".
10) Thereafter, the matter was listed for defence evidence. However, the accused had stated that he did not wish to lead any defence evidence. Therefore, vide order dated 07.12.2019, defence evidence CC No. 2774/17 Chandeshwar Pandit v. Amod Kumar Srivastava Page No. 4 of 14 was closed and the matter was listed for final arguments.
11) Ld. Counsel for the accused has relied upon the following judgments :
(a) Kulvider Singh v. Kafeel Ahmed Criminal L.P. No. 478/2011.
(b) Devender Kumar v. Khem Chand Crl. Rev. P. 679/2012.
(c) Ashok Baugh v. Kamal Baugh & Anr.Crl. L.P. 358/2012.
(d) Sunil Kumar v. Ram Dass 2014 (8) LRC 417 (P& H).
(e) Krishna Janardhan Bhat v. Dattatraya G. Hegde Criminal Appeal No. 518/2006.
(f) G. Pankajakshi Amma and Ors. v. mathai Mathew Civl Appeal Nos. 4101-4102 of 1998.
12) The submissions made by the Ld. Counsel for the complainant and the accused have been heard and the record of the case has been thoroughly perused.
13) Before proceeding to the merits of the case, it is important to lay down the basic provision of law with respect to section 138 of the NI Act which is as follows:
Section 138 of Negotiable Instruments Act, 1881 makes dishonour of cheques an offence. It provides that "where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that 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 that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for CC No. 2774/17 Chandeshwar Pandit v. Amod Kumar Srivastava Page No. 5 of 14 a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both".
14) In order to ascertain whether the accused has committed an offence u/s 138 NI Act, the following ingredients constituting the offence have to be proved:
(a) The drawer of the cheque should have issued the cheque for the discharge, in whole or in part of a legally enforceable debt or other liability.
(b) The cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of that 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 that bank.
(c) The drawer of such cheque fails to make the payment of the said amount of money within fifteen days of the receipt of the notice from the payee or the holder in due course demanding the payment of the said amount of money.
It is only when all the above mentioned ingredients are satisfied that the person who has drawn the cheque can be said to have committed an offence u/s 138 NI Act.
15) Coming to the first ingredient of the offence, which is that the drawer of the cheque should have issued the cheque for the discharge, in whole or in part of a legally enforceable debt or other liability, it is stated by the complainant that the complainant had, in June 2016, extended a friendly loan of Rs. 2,00,000/- to the accused after request by the accused for extending the same for expansion of his business purpose. The accused had issued three post dated cheques to the complainant for the discharge of his legally recoverable CC No. 2774/17 Chandeshwar Pandit v. Amod Kumar Srivastava Page No. 6 of 14 liability.
16) The accused has in his plea of defence under Section 251 Cr.P.C. and in his statement under Section 313 Cr.P.C. admitted his signatures and the factum of the issuance of the cheque in question in favour of the complainant.
17) It is important to reproduce Sec.118(a) and Sec.139 of N.I. Act here.
18) Section 118(a) of the Act provides that until the contrary is proved, it shall be presumed that "that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration."
19) Further, Section 139 of the Act lays down that "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."
20) In the case of K.N. Beena Vs. Muniyappan AIR 2001 SC 2000, it was established as follows " In complaint u/s 138 the court has to presume that the cheque had been issued for a debt or liability. This presumption is rebuttable, however, the burden of proving that the cheque has not been issued for the discharge of debt or liability lies on the accused".
21) In view of the above stated provision, the admission of accused of his signatures, the factum of issuance of the cheques to the CC No. 2774/17 Chandeshwar Pandit v. Amod Kumar Srivastava Page No. 7 of 14 complainant and in view of the fact that the cheques in question have been drawn from the account of the accused, a statutory presumption is raised in favour of the complainant that the cheques in question were issued for the discharge of a legally recoverable debt or liability.
22) It was now for the accused to rebut the statutory presumption raised in favour of the complainant as per the doctrine of the reverse onus of proof that now shifts on to the accused.
23) The primary defence taken by the accused is that he had issued the cheques as security cheques to the complainant in the year 2011- 2012 in regard to supply of some material by the complainant to him. It is also stated that the complainant had assured to him that he would destroy the cheques as and when the accused would make the payment to him and every time the accused paid the complainant in cash, the complainant would give the assurance regarding destroyal of the cheques. It is stated that except for the date mentioned on the cheques in question, all the remaining details mentioned therein have been filled by him.
24) The accused has stated the above defence in his statement u/s 251 Cr.P.C. Further on the accused has in his statement u/s 313 Cr.P.C reiterated the same defence and has also stated that he had business dealings with the complainant about 08-10 years back, where spare motor parts were purchased.
25) At the outset it is pertinent to mention that the accused has not furnished any evidence at all in support of his stand. He has neither examined himself nor has he examined any other witness in order to substantiate his defence.
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26) The accused has stated that the cheques in question were given in the year 2011-2012 as security cheques. It is stated that the complainant used to supply him the material of spare motor parts and ask him for cheques and as and when payment was made to him, the complainant used to state that he had destroyed the cheques for the said payment.
27) No evidence whatsoever has been filed on behalf of the accused to show that the cheques in question were given not for the discharge of any loan but as part of the business dealings with the complainant and at the time of supply of the material by the complainant. As far as the said oral averment of the accused is concerned, it seems absurd and irrational that after every payment for the material so purchased by the complainant, the accused would have entirely left it upon the complainant to destroy the duly filled up cheque given by the accused to the complainant. Moreover, if the version of the accused is relied upon, the cheque was given without any date being mentioned on the same. It cannot be expected out of any reasonably sane person, that he would give his signed filled up cheques to another person without any receiving of the same and even after payment, merely rely upon the assurance of the person to whom the cheques were given that they would be destroyed. More particularly, when the cheques are undated, such a casual approach cannot be expected out of any reasonably sane person. Besides the accused has only stated to know the complainant on account of the business transaction and no personal relationship as such between him and the complainant has been stated to have existed by the accused. Ld. Counsel for the accused has stated that the cheques in question were given in the year 2011- 2012, however, the same is a mere averment and no proof with CC No. 2774/17 Chandeshwar Pandit v. Amod Kumar Srivastava Page No. 9 of 14 respect to the same has been furnished on behalf of the accused. Thus, the version of the accused appears to be improbable and therefore cannot be relied upon.
28) It has been stated by the Ld. Counsel for accused that the complainant has in his cross-examination as CW-1 admitted to the supply of spare parts to the accused and payment of the same by way of cash. Thus, it is stated that since the said factum of existence of business transaction has been admitted, the complainant has in his cross-examination supported the averment of the accused.
29) Merely because, it has been admitted by the complainant/CW-1 in his cross-examination that he used to supply the spare parts to the accused and accused used to pay him in cash, does not lead to the conclusion that the cheques in question were given by the accused as part of the business transactions. The same only goes on the existence of relationship between the complainant and the accused. The complainant has also stated in his cross-examination that "it is wrong to suggest that I have obtained any document/cheque as security from the accused prior to supply of goods". Thus, the complainant has certainly not admitted giving of the cheques by the accused against the supply of goods and therefore, the argument of the Ld. Counsel for the accused in this regard is devoid of any merits.
30) Ld. Counsel for the accused has also stated that the complainant has stated in his cross-examination that he does not remember the date on which the alleged loan was given, which shows that no such loan was extended as alleged.
31) Although, it has been stated by the complainant/CW-1 in his CC No. 2774/17 Chandeshwar Pandit v. Amod Kumar Srivastava Page No. 10 of 14 cross-examination that he does not remember the date of the loan, yet this court is of the opinion that merely because the complainant does not remember the date on which the loan was given, does not mean that no loan was extended by him. It is also to be seen that it has very much been stated by the complainant in his cross-examination that he had given loan to the accused in June, 2016. Further, the cross- examination of the complainant had taken place on 07.09.2019 and owing to factors such as loss of memory due to passage of time, it is quite probable that the witness may not recollect the exact date on which the loan was given.
32) Ld. Counsel for the accused has also stated that all the cheques in question are pertaining to the same date, which goes on to throw a doubt in the case of the complainant as to why would the accused issue three post dated cheques of the same date and not issue a single cheque for the entire amount.
33) In order to address the said argument, it is important to see the cross-examination of complainant/CW-1, where the complainant has stated in his cross-examination as CW-1 that "the accused brought the three cheques. I asked the accused the loan amount will only be tendered, if you return the entire amount in a single date". Thus, it has very well been clarified by the complainant that all the three cheques bore the same date, as the same was a precondition to the grant of loan.
Although the accused has stated that he had business dealing with the complainant and the complainant used to supply him with spare motor parts and he used to give a cheque to the complainant for the supply of material, it has not been explained by the accused as to why the accused would issue three cheques bearing the same series to the CC No. 2774/17 Chandeshwar Pandit v. Amod Kumar Srivastava Page No. 11 of 14 complainant if during the span of a year, in 2011-2012, there were multiple transactions between the parties. It is also not clear if at all the cheques were given at one time or at different times, when entering into any particular transaction. If it is the latter, then three cheques bearing the same chronological series being given at different points of time, goes on to create a doubt in the version of the accused.
34) A challenge has also been raised on the financial capacity of the complainant to extend the loan so alleged. It has been stated that the complainant did not have the sufficient finances to extend a loan of Rs. 2 lakhs to the accused.
A perusal of the cross-examination of the complainant/CW-1 shows that it has been stated by the complainant that his monthly income is Rs. 20000/- to Rs. 22000/- and that he is running a grocery shop since last 07-08 years. It is further stated by him in his cross-examination that at any time in his house, he used to keep Rs. 1,00,000/- to Rs. 2,00,000/- as he was a grocery shopkeeper. In the opinion of the court, the complainant has sufficiently explained his financial capacity to extend the loan of Rs. 2 Lakhs to the accused.
35) Considering the facts and circumstances, the accused has failed to discharge the burden of proof that was placed upon him for showing that the cheques in question were not issued for the discharge of the legally recoverable debt or liability owed to the complainant. The accused has therefore, failed to rebut the presumption taken in favour of the complainant. To the contrary, the complainant has been able to successfully prove that the cheque in question was issued by the accused for the discharge of a legally recoverable debt of Rs. 2,00,000/- that was owed by the accused to the complainant. Hence, the complainant has been able to successfully prove the first ingredient CC No. 2774/17 Chandeshwar Pandit v. Amod Kumar Srivastava Page No. 12 of 14 of the offence u/s 138 NI Act.
36) The second ingredient of the offence is that the cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of that 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 that bank.
37) The cheques in question upon presentation in the bank were all dishonoured on 25.01.2017. A perusal of Ex.CW1/D to Ex. CW1/F shows that the cheque in question, on being presented in the bank was returned dishonoured due to "funds insufficient".
38) Thus, in the opinion of the court, the second ingredient of the offence is also met in the present case.
39) As far as the third ingredient is concerned, which is that the drawer of such cheque fails to make the payment of the said amount of money within fifteen days of the receipt of the notice from the payee or the holder in due course demanding the payment of the said amount of money, the postal receipts as well as the track report of the receipt of the legal notice, which is Ex. CW1/H and Ex. CW1/I is present on record.
40) The accused has admitted to the receiving of the legal demand notice in his statement under Section 251 Cr.P.C. and 313 Cr.P.C. It has been stated by the accused in his statement under Section 313 Cr.P.C. that he had received the legal demand notice from the complainant and he had also replied to the same. However, no reply to the legal notice has been filed by the accused on record.
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41) Despite delivery of the legal notice, the accused has failed to make the payment to the complainant that he was liable to pay, within 15 days from the date of receipt of notice.
42) Hence, the third ingredient of the offence u/s 138 N. I. Act has also been proved by the complainant.
43) Having considered the entire evidence, this court is of opinion that the complainant has successfully proved all the essential ingredients of Sec.138 N.I. Act. Accordingly, the accused Amod Kumar Srivastava is held guilty for committing the offence punishable u/s 138 N.I. Act. He is hereby convicted for the offence u/s 138 N.I. Act.
Let he be heard on the point of sentence separately.
Digitally signed Announced in the open court TISTA by TISTA SHAH Date: 2020.01.23 Dated 23.01.2020 SHAH 16:37:18 +0530 (Tista Shah) MM-06/NI Act/Central District Tis Hazari Court/Delhi. CC No. 2774/17 Chandeshwar Pandit v. Amod Kumar Srivastava Page No. 14 of 14