Delhi District Court
Om Prakash Lohia vs . Jai Shankar on 14 January, 2020
IN THE COURT OF MS. APOORVA RANA
METROPOLITAN MAGISTRATE (SOUTH) 01,
N.I. ACT, SAKET COURTS : NEW DELHI
CC No. 799/2016 & CIS No. 471311/2016
Om Prakash Lohia Vs. Jai Shankar
1. Complaint Case number : CC No. 799/2016
& CIS No. 471311/2016
2 Name of the complainant : Om Prakash Lohia,
S/o Late Sh. Bholu Ram,
R/o House No.50, Ghoda
Mohalla, Village Aya Nagar,
New Delhi110047.
3. Name and address of the : Jai Shankar,
accused S/o Sh. Bhola Nath,
R/o F259 D, BlockF, Phase
VI, Aya Nagar Extension,
New Delhi110047.
4. Offence complained of or : Under Section 138 of the
proved Negotiable Instruments Act,
1881.
5. Plea of the accused : Pleaded not guilty and claimed
trail.
6. Final Order : Conviction
CC No. 799/2016 & CIS No. 471311/2016
Om Prakash Lohia Vs. Jai Shankar
Page 1 to 22
7. Date of Institution : 29.03.2016
8. Date of Reserving the : 16.12.2019
Judgment
9. Date of pronouncement : 14.01.2020
Judgment:
1. The facts giving rise to the present complaint are that in the month of 12.01.2015, the complainant advanced a friendly loan of Rs.3,00,000/ to the accused on the assurance that the same would be returned within a year. An agreement of loan of the same date was also entered into between the complainant and the accused and the accused had also issued a receipt of Rs.3 lacs of the same date in favour of the complainant. The accused had handed over the cheque in question as security towards the same. It is further case of the complainant that the accused assured the complainant to return the said money, however, despite repeated requests when the amount was not returned, the accused in discharge of his legal liability asked the complainant to present the cheque bearing number 520956 for an amount of CC No. 799/2016 & CIS No. 471311/2016 Om Prakash Lohia Vs. Jai Shankar Page 2 to 22 Rs.3,00,000/ dated 01.02.2016, drawn on bank account maintained with Indian Bank, Paharganj, New Delhi110055 (hereinafter referred to as the 'cheque in question') in favour of the complainant for encashment. That cheque in question was returned unpaid upon presentation on account of "drawer signature incomplete" vide return memo dated 02.02.2016. The accused refused to pay the cheque amount despite the fact of dishonor of cheque having been brought to the notice of the accused by the complainant. Further, legal demand notice dated 15.02.2016 was duly sent by complainant to the accused in this regard, but to no avail. The complainant has stated that accused failed to pay the cheque amount within the statutory period. Hence, the present complaint under Section 138 of Negotiable Instruments Act, 1881 (hereinafter referred to as 'NI Act').
2. Upon service of summons, accused entered an appearance in the present matter for the first time on 08.07.2016 and was admitted to bail. Notice under Section 251 Cr.P.C. was served upon accused on 26.08.2016, to which the accused pleaded not guilty and claimed trial. In her statement of defence, accused stated that the cheque in CC No. 799/2016 & CIS No. 471311/2016 Om Prakash Lohia Vs. Jai Shankar Page 3 to 22 question was given as security and the accused had not signed the same and the amount and date were also not filled up by him. Thereafter, accused was allowed to crossexamine the complainant under section 145 (2) NI Act. After cross examination of the complainant, matter was fixed for recording statement of the accused under Section 313 Cr.P.C. In the said statement recorded on 16.05.2018, the accused while reiterating the defence taken at the time of framing of notice stated that the cheque in question bore his signatures and other details were also in his handwriting, however, he stated that he was only liable to pay Rs.1.50 lacs approximately to the complainant. Matter was thereafter fixed for defence evidence. Defence evidence was closed on 11.09.2019 and the matter was fixed for final arguments.
Evidence
3. In order to support his case, complainant stepped into the witness box as CW1 and tendered his affidavit Ex.CW1/A into evidence, wherein, averments made in the complaint were reiterated. He also relied upon various documents such as Ex.CW1/1 which is copy of agreement dated 12.01.2015, Ex.CW1/2 which is copy of receipt dated CC No. 799/2016 & CIS No. 471311/2016 Om Prakash Lohia Vs. Jai Shankar Page 4 to 22 12.01.2015, Ex.CW1/3 which is cheque in question, Ex.CW1/4 which is cheque return memo, Ex.CW1/5 which is legal notice dated 15.02.2016, Ex.CW1/6 (colly) which are postal receipts, Ex.CW1/7 which is tracking report, Ex.CW1/8 which is returned envelope and Ex.CW1/9 which is reply dated 04.03.2016. Complainant examined three more witnesses namely Naveen Lohia as CW2, Shushil as CW3 and Shyambir as CW4 in support of his case.
4. Accused, on the other hand, did not any lead any evidence despite grant of several opportunities for the same.
Arguments
5. Ld. counsel for the complainant has argued that all the requirements of Section 138 NI Act have been met with in the present case, and hence, the accused be convicted. On the other hand, it has been argued on behalf of the accused that the complainant has not been able to prove his case beyond reasonable doubt and that no loan was taken by the accused from the complainant. I have heard the ld. counsels for the parties and have perused the record carefully.
CC No. 799/2016 & CIS No. 471311/2016 Om Prakash Lohia Vs. Jai Shankar Page 5 to 22 Points for determination and reasons for decision
6. For an offence under Section 138 of NI Act to be made out against the accused, the complainant must prove the following points:
(i) The accused issued a cheque on account maintained by him with a bank.
(ii) The said cheque has been issued in discharge, in whole or in part, of any legal debt or other liability.
(iii) The said cheque has been presented to the bank within a period of 3 months from the date of cheque or within the period of its validity.
(iv) The aforesaid cheque, when presented for encashment, was returned unpaid/dishonored.
(v) The payee of the cheque issued a legal notice of demand to the drawer within 30 days from the receipt of information by him from the bank regarding the return of cheque.
(vi) The drawer of the cheque failed to make the payment within 15 days from the receipt of above mentioned legal notice of demand.
7. Thus, on the basis of the evidence adduced, the points CC No. 799/2016 & CIS No. 471311/2016 Om Prakash Lohia Vs. Jai Shankar Page 6 to 22 that warrant determination are as follows:
Whether the accused issued the cheque in question to the complainant for discharge, in whole or in part, of any debt or other liability?
8. It is a well settled principle of criminal jurisprudence that a criminal trial proceeds on the presumption of innocence of the accused i.e. an accused is presumed to be innocent unless proven guilty. Thus, normally the initial burden to prove is on the complainant/prosecution to prove the guilt of the accused. Also, the standard of proof required is that of "beyond reasonable doubt". However, in offences under Section 138 NI Act, there is reverse onus clause contained in Sections 118 and 139 of the Act. Thus, the primary burden of proof in order to prove the issuance of the cheque lies upon the complainant, and the same has to be proved beyond reasonable doubt, unless the accused admits the same.
Further, the explanation to Section 138 of the Negotiable Instruments Act, 1881 states that for the purpose of this Section, "debt or other liability" means a legally enforceable debt or other liability.
CC No. 799/2016 & CIS No. 471311/2016 Om Prakash Lohia Vs. Jai Shankar Page 7 to 22 However, once the issuance of cheque is established, either by admission or by positive evidence, the presumption under Section 139 of the Negotiable Instruments Act, 1881 arises. Section 139 of the Negotiable Instruments Act, 1881 states 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. Therefore, here the onus shifts upon the accused to prove the nonexistence of debt or other liability. Section 139 of the Negotiable Instruments Act, 1881 uses the word "shall presume", and the meaning of the word "shall presume" in Section 4 of the Evidence Act, shows that the presumption under Section 139 is rebuttable.
Furthermore, the standard of proof required to rebut the presumption under Section 139 is that of "preponderance of probabilities". Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or other liability, the onus shifts back to the complainant to prove by way of evidence, beyond reasonable doubt, that the cheque in question was issued by the accused in discharge, whole or in part, of any debt or other liability, and now the presumptions under Section 118
(a) and Section 139 will not come to the rescue of the CC No. 799/2016 & CIS No. 471311/2016 Om Prakash Lohia Vs. Jai Shankar Page 8 to 22 complainant. [Bharat Barrel & Drum Manufacture Co. Vs. Amin Chand Pyarelal (1999) 3 SCC 3S and M.S. Narayan Menon Vs. State of Kerala (2006) 6 SCC 39 relied upon].
Mode of Proof: The accused may adduce direct evidence to prove that the note in question was not supported by consideration, and that there was no debt or liability to be discharged by him. However, the Court need not insist in every case that the accused should prove the nonexistence of the consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that a bare denial of passing of consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable, has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances (including presumption under Section 114 Evidence Act), upon the consideration of which, the Court may either believe that the consideration and debt did not exist, or their nonexistence was so probable that a prudent man would, under circumstances of the case, act upon the plea that they did not exist. [Kishan Rao Vs. Shankaguda, CC No. 799/2016 & CIS No. 471311/2016 Om Prakash Lohia Vs. Jai Shankar Page 9 to 22 2018 (8) SCC 165, Mosaraf Hossain Khan Vs. Bhageeratha Engg. Ltd. & Ors (2006) 3 SCC 658, Goa Plast (P) Ltd. Vs. Chico Ursula D Souza (2004) 2 SCC 235, Monaben Ketanbhai Shah Vs. State of Gujarat (2004) 7 SCC 15, Prem Chand Vijay Kumar Vs. Yashpal Singh (2005) 4 SCC 417, DCM Financial Services Vs. J N Sareen (AIR 2008 SC 2255), K. Bhaskaran Vs. Shankaran Vaidhyan Balan (1999) 7 SCC 510 relied upon].
9. Averting to the facts of the present case, the accused has stated in his substance of accusation u/s 251 Cr.P.C. that the cheque in question had been given as security and neither had he signed the cheque in question, nor were the amount and date on the same filled up by him. However, in his statement of defence u/s 313 Cr.P.C., he states that he had taken a loan of only Rs. 30,000/ from the complainant around 2 years back at an interest of 5% p.a., in respect of which he had repaid the interest in cash around 11.5 years back to the complainant, but the principal amount was still outstanding. He also states that he was a member of a committee run by the complainant and is still liable to pay 8 installments of Rs. 7,000/ in furtherance of the same. However, this defence of the accused does not inspire CC No. 799/2016 & CIS No. 471311/2016 Om Prakash Lohia Vs. Jai Shankar Page 10 to 22 confidence because of the following reasons:
(a). The accused has not produced any documentary proof showing that the complainant had granted him a loan to the tune of Rs. 30,000/ only and neither has he produced on record the terms on which the said loan of Rs. 30,000/ was allegedly advanced by the complainant. Moreover, in his statement u/s 313 Cr.P.C, the accused while admitting the execution of loan document Ex CW1/1 and the corresponding receipt Ex. CW1/2 has stated that the amount of Rs. 3,00,000/ was mentioned in the said documents upon inclusion of the amount towards penalty of the committee.
But, not only has the accused failed to produce on record any document showing his membership in the committee allegedly run by the complainant, he has also not questioned the wrong mentioning of amount owed by the accused in the above mentioned exhibited documents. The accused has, in fact, never really denied his legal liability towards the complainant, but had only challenged the quantum of the same owed by him, without bring on record any document supporting his averments. Though, the accused states in his statement u/s 313 Cr.P.C that he is only liable to pay an amount of Rs. 1,50,000/ to the complainant, he fails to explain as to how he owes only that amount and no more. CC No. 799/2016 & CIS No. 471311/2016 Om Prakash Lohia Vs. Jai Shankar Page 11 to 22
(b). The defence of the accused is further marred by his own inconsistent statements. On one hand, in his substance of accusation u/s 251 Cr.P.C., he states that he did not sign the cheque in question and the date and amount were also not filled up by him, while on the other hand, in his statement of defnce u/s 313 of Cr.P.C., not only does he admit his signatures on the same, rather, he also admits that the other details on the cheque in question are also in his handwriting. Moreover, even if it was to be considered that the cheque in question does not bear the signatures of the accused, even so, he failed to examine any handwriting expert to prove that he had not signed the same. Thus, amidst the prevailing inconsistencies in this version of the accused, there is no hitch in presuming that the cheque in question bears the signatures of the accused.
10. In addition to the above, the accused has taken the defence that the cheque in question was issued as security. However, in the backdrop of the signatures of the accused on the cheque being deemed to have been admitted and assuming that the same were given in a blank signed manner by him, the mere fact that the accused gave blank cheques to the complainant signifies that he gave the authority to the CC No. 799/2016 & CIS No. 471311/2016 Om Prakash Lohia Vs. Jai Shankar Page 12 to 22 complainant to fill the amount therein as well. Also, it is well settled that a person who hands over a negotiable instrument to another after signing the same, is presumed to know the consequences of the same. (Jammu & Kashmir Bank v. Abhishek Mittal, (Delhi High Court Crl. Appeal No.294/2011). This intent of the Negotiable Instruments Act, 1881 gains strength from Section 20 of the Act, which states that "where one person signs and delivers to another a paper stamped in accordance with the law relating to negotiable instruments then in force in India, and either wholly blank or having written thereon an incomplete negotiable instrument, he thereby gives prima facie a negotiable instrument, for any amount specified therein and not exceeding the amount covered by the stamp. The person so signing shall be liable upon such instrument, in the capacity in which he signed the same, to any holder in due course for such amount". Thus, mere averment of the accused that the cheque in question was misused by the complainant holds no ground in absence of any substantial evidence regarding the same.
From the above discussion, there appears to be no hitch in concluding that the cheque in question was issued by the accused in discharge of a his legal liability.
CC No. 799/2016 & CIS No. 471311/2016 Om Prakash Lohia Vs. Jai Shankar Page 13 to 22
11. Last but not the least, the accused even failed to bring to light any discordance in the version of the complainant as to the grant of the said loan to him. The testimony of the complainant and other witnesses i.e., CW2, CW3 and CW4, who appeared in support of the complainant went unimpeached. In fact, the accused even admitted the execution of Ex CW1/1, i.e., the loan agreement and the corresponding receipt Ex. CW1/2, in his statement u/s 313 of Cr.P.C. Even the typographical error in the receipt, Ex. CW1/2 has been brought to light and explained by the complainant in his evidence and the same was never challenged by the accused. The other witnesses, namely, CW2 and CW3, being witnesses to document Ex. CW1/1, have also deposed in favour of the complainant and have corroborated the version of the complainant as to the grant of the loan by the complainant to the accused. More so, no question was put to the complainant during his cross examination even to challenge his source of funds/ raise doubts regarding his financial capacity and not even a single suggestion came from the accused in that regard during the cross examination. Even the friendly relationship of the complainant with the accused has not been questioned. To make matters even worse, no question regarding the CC No. 799/2016 & CIS No. 471311/2016 Om Prakash Lohia Vs. Jai Shankar Page 14 to 22 reflection of the said loan by the complainant in his ITR was put to him to challenge his source of funds.
12. Now, as far as the existence of a legal debt is concerned, the same is required to be proved beyond reasonable doubt by the complainant only after the accused rebuts the presumption u/s 139 of the Negotiable Instruments Act, on a scale of preponderance of probabilities. In the present matter, no cogent evidence or glaring loophole has been provided by the accused to raise suspicion in the version of the complainant. Not only that, the defence raised by the accused has been marred by his incoherent and incompatible averments.
13. Thus, in light of the above discussion, the accused has failed to discharge the burden of rebutting the presumption that lay upon him under S.139 of the NI Act, and therefore, the issuance of cheque by the accused to the complainant as well as existence of a legally enforceable liability, stands duly established.
CC No. 799/2016 & CIS No. 471311/2016 Om Prakash Lohia Vs. Jai Shankar Page 15 to 22 Whether the cheques were, on presentation, dishonoured due to reasons specified in Section 138 of Negotiable Instruments Act, 1881 ?
14. As per Section 138 of Negotiable Instruments Act, 1881, the cheque must have been returned back as unpaid by the bank 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. But it has been held by the Hon'ble Supreme Court in various cases that "insufficiency of amount standing to credit of account/exceeds arrangement with the bank" is a genus, and dishonour for reasons such as "account closed/ blocked/ payment stopped/refer to drawer/signatures do not match/image not found" are only species of that genus. In all such cases, it shall be presumed that the amount standing to the credit of the accused's account, was insufficient to honour the cheque, as such results can possibly be brought about by the accused himself. Whether or not the dishonour was brought about by reason of insufficiency of funds is a matter of evidence, and the burden to prove that the remarks/reason CC No. 799/2016 & CIS No. 471311/2016 Om Prakash Lohia Vs. Jai Shankar Page 16 to 22 for dishonour mentioned in the return memo was not due to paucity of funds, but due to some other valid cause, including absence of any debt or other liability, is upon the accused under Section 139 of the Negotiable Instruments Act. In all such cases, the question whether or not there was a legally recoverable debt or liability for discharge whereof the cheque was issued, would be a matter that the trial Court has to examine, having regard to the evidence adduced before it, and keeping in view the statutory presumption that unless rebutted, the cheque is presumed to have been issued for a valid consideration. The offence is not made out the moment a cheque is returned back as unpaid, but after a legal notice has been issued regarding the same, and the payment has still not been made. The net effect is that all the aforesaid reasons will fall within the purview of "dishonour" within the meaning of Section 138 of Negotiable Instruments Act [Modi Cement Ltd. Vs. Kuchil Kumar Nandi (1998) 3 SCC 249, NEPC Micon Ltd. Vs. Magma Leasing Ltd. (1999) 4 SCC 253, M/s Laxmi Dyechem Industries Vs. State of Gujarat (2012) 3 SCC 375].
15. In the present case, the return memo Ex.CW1/4 is duly stamped, and therefore, a presumption of 'dishonour' in terms CC No. 799/2016 & CIS No. 471311/2016 Om Prakash Lohia Vs. Jai Shankar Page 17 to 22 of Section 138 (i.e. due to insufficiency of funds/exceeds arrangement) arises under Section 146 of Negotiable Instruments Act, 1881, which the accused has failed to rebut. The reasons for the return, as per return memo is "drawre's signature incomplete", which falls straight within the purview of Section 138 of the NI Act. Hence, it can be safely concluded that the return of the cheques as unpaid was due to reasons specified in Section 138 of the NI Act.
Whether the complainant has made a demand for payment of the amount of money in the cheques, by giving to the drawer, a notice in writing, within 30 days of the receipt of information by him, from the bank, regarding the return of the cheques as unpaid and the accused has failed to make the payment of the said amount of money to the complainant, within 15 days of the receipt of said notice?
16. The Hon'ble Supreme Court of India in C.C. Alvi Haji Vs. Palapetty Mohammad (2007) 6 SCC 555, has held that when the notice is sent by registered post, by correctly addressing the drawer of the cheque, the mandatory requirement of issuance of the notice in terms of clause (b) of CC No. 799/2016 & CIS No. 471311/2016 Om Prakash Lohia Vs. Jai Shankar Page 18 to 22 proviso to Section 138 of Negotiable Instruments Act, stands complied with, as per the statutory presumptions under Section 27 of the General Clauses Act and Section 114 of the Indian Evidence Act. Any drawer who claims that he did not receive the notice sent by post, can within 15 days of the receipt of summons from the Court in respect of the complaint under Section 138 of Negotiable Instruments Act, 1881, make payment of the cheque amount, and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of the complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of summons from the Court along with copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the General Clauses Act and Section 114 of the Indian Evidence Act.
Needless to mention, the legal notice must satisfy the requirements of Section 138. The accused must be called upon, by such notice, to pay the amount which was payable under the cheque issued by it. [Central Bank of India Vs. M/s Saxons Farms (AIR 1999 SC 3607), M/s Rahul Builders Vs. CC No. 799/2016 & CIS No. 471311/2016 Om Prakash Lohia Vs. Jai Shankar Page 19 to 22 M/s Arihant Fertilisers and Chemicals & Anr. (2008) Cr.L 4520 SC relied upon].
Testimony of CW1 in this regard has also remained unrebutted. Though, a reply to the said legal notice was filed by the accused, the accused failed to support his stance taken in the reply to the legal notice by bringing on record any cogent evidence and also failed to either pay the cheque amount or show as to how he had no liability to discharge towards the complainant.
Thus, point number 3 also stands answered in the affirmative.
Whether the cheques were presented within the period of its validity or within, 3 months from the date on which they were drawn, and the complaint has been made, within a period of one month from the date when the cause of action has arisen under clause (c) of the proviso to Section 138 of Negotiable Instruments Act, 1881?
17. In the present case, both the requirements have been admittedly satisfied. The cheque bears the date 01.02.2016. Now, as per return memo Ex.CW1/4, the same was returned CC No. 799/2016 & CIS No. 471311/2016 Om Prakash Lohia Vs. Jai Shankar Page 20 to 22 on 02.02.2015, but, taking aid of S.114 of the Indian Evidence Act, 1872, it can be presumed that the same is a mere typographical error as the date is written in hand thereupon and the complainant has mentioned the date of return of memo as 02.02.2016 in his complaint as well as his affidavit of evidence. Moroever, the said fact has also not been challenged by the accused and neither any clarification has been sought by the accused qua the same from the comlpainant during his examination. In such a scenario, the accused can, thus, be said to have admitted the fact that the date of return memo was indeed 02.02.2016 and the return memo bears a typographical error in that respect. Further, legal notice Ex.CW1/5 was sent on 15.02.2016, and the complaint was filed on 29.03.2016 which is within the period of one month from the date on which cause of action arose under clause (c) of proviso to Section 138 Negotiable Instruments Act, 1881.
Conclusion
18. In view of the above discussion, I am of the considered opinion that the complainant has established his case by leading cogent evidence and accused has failed to rebut CC No. 799/2016 & CIS No. 471311/2016 Om Prakash Lohia Vs. Jai Shankar Page 21 to 22 statutory presumptions arising against him. Accused Jai Shankar, S/o Sh. Bhola Nath, is hereby convicted for the offence punishable under Section 138 NI Act. Let the convict be heard separately on quantum of sentence. Copy of this judgment be given free of cost to the convict. Digitally signed by Announced in the open Court APOORVA APOORVA RANA on 14.01.2020 RANA Date:
2020.01.24 13:22:48 +0530 (Apoorva Rana) Metropolitan Magistrate01 (South), NI Act/Saket/New Delhi/14.01.2020 CC No. 799/2016 & CIS No. 471311/2016 Om Prakash Lohia Vs. Jai Shankar Page 22 to 22