Delhi District Court
Rajiv Sharma vs Lokesh Sharma on 11 January, 2023
IN THE COURT OF SH. SANJAY SHARMA-II : ADDL. SESSIONS JUDGE-03,
(CENTRAL): TIS HAZARI COURTS, DELHI
Criminal Appeal No. 10/2023
CNR No.: DLCT01-000339-2023
Rajiv Sharma
S/o Sh. B.K. Sharma
R/o 1706, 3rd Floor, Sohan Ganj
Subzi Mandi, Delhi-110007
..... Appellant
VERSUS
Lokesh Sharma
S/o Sh. Yog Raj Sharma
R/o 6/46, W.E.A. Karol Bagh,
New Delhi-110005
..... Respondent
Date of Institution : 09.01.2023
Date of Arguments : 09.01.2023
Date of Judgment : 11.01.2023
JUDGMENT
1. The criminal appeal under Section 374 of 'The Code of Criminal Procedure, 1973' (In short 'Cr.P.C.') is directed against judgment dated 30.09.2022 and order on sentence dated 08.12.2022 in CC No. 533044/2016 (Old CC No. 03/2015) titled as 'Sh. Lokesh Sharma vs. Sh. Rajiv Sharma' under Section 138 of 'The Negotiable Instruments Act, 1881' (In short 'NI Act') whereby Ld. MM (NI Act-04), Central District, Tis Hazari Courts, Delhi (In short 'the trial Court') convicted the appellant for committing offence under Section 138 NI Act and sentenced him to simple imprisonment for six months and fine of Rs. 8,00,000/-, which will be paid to the respondent as 'compensation', and in the event of default, he is further sentenced to simple imprisonment for a period of three months. The trial Court also directed that fine amount will be recoverable irrespective of default sentence of simple imprisonment.
Crl. Appeal No. 10/2023 Rajiv Sharma vs. Lokesh Sharma Page No. 1/23BRIEF FACTS:
2. On 14.10.2013, the respondent (Hereinafter 'the complainant') instituted a complaint under Section 138 NI Act on averments that the appellant is close relative of the complainant.
The appellant demanded a 'friendly' loan in the sum of Rs. 5,00,000/- from the complainant. The complainant advanced the said loan during January and March, 2012 which was returnable by July, 2013. In discharge of his liability, the appellant issued a Cheque No. 962790 dated 25.07.2013 in the sum of Rs. 5,00,000/- drawn on 'ICICI Bank Ltd., B-2/16, Kheman House, Ashok Vihar-II, Delhi-110052' (In short 'the said cheque') in favour of the complainant. On presentation, the appellant's banker returned the said cheque unpaid with remark 'FUNDS INSUFFICIENT' vide memo dated 03.08.2013. The complainant sent a demand notice dated 29.08.2013 to the appellant through registered post. The appellant failed to make payment of cheque amount within statutory period despite receipt of demand notice. Hence, the complainant filed the complaint under Section 138 NI Act.
SUMMONING ORDER:
3. The trial Court, vide order dated 02.01.2015, summoned the appellant for offence under Section 138 NI Act.
NOTICE OF ACCUSATIONS UNDER SECTION 251 CR.P.C.:
4. On 27.05.2016, the trial Court explained particulars of the offence to the appellant, as required under Section 251 Cr.P.C., to which he responded, as under:
"Q. Do you plead guilty or claim trial? A. I plead not guilty and claim trial.Crl. Appeal No. 10/2023 Rajiv Sharma vs. Lokesh Sharma Page No. 2/23
Q. Did you issue the cheque in question? A. I have issued the cheque in question to complainant. I have filled the amount on the cheque and have duly signed the cheque. I have not filled the name of complainant and date on the cheque. Q. Did you receive the legal demand notice? A. I have received the legal demand notice. Q. What is the plea of defence?
A. Complainant is my cousin brother. I have taken a loan of Rs. 2,50,000/- from the complainant. I have not taken a loan of Rs. 5,00,000/- from the complainant. I have paid interest on sum of Rs. 2,50,000/-. Cheque in question was given as a security. I have no liability in terms of present cheque. I am still paying for loan of Rs. 2,50,000/-."
APPLICATION UNDER SECTION 145 (2) NI ACT:
5. The appellant sought permission to cross-
examine the complainant on the grounds, as under:
(a) The appellant had no business relation with the complainant and the said cheque was misused by the complainant to extort illegal amount from him;
(b) The cheque amount is not due against the appellant;
(c) The complainant filled the amount and date and misused the said cheque;
(d) The said cheque was not issued for the discharge of legally enforceable debt; and
(e) Existence of legally recoverable debt cannot be presumed under Section 139 NI Act.
COMPLAINANT'S EVIDENCE:
6. The complainant (CW-1) filed examination-in-
chief vide affidavit Ex.CW1/A. He relied on the said cheque Ex.CW1/1, cheque returning memo Ex.CW1/2, demand notice Ex.CW1/3, postal receipts Ex.CW1/4 and Ex.CW1/5 and acknowledgement card Ex.CW1/6.
Crl. Appeal No. 10/2023 Rajiv Sharma vs. Lokesh Sharma Page No. 3/23CROSS-EXAMINATION OF THE COMPLAINANT:
7. The cross-examination of the complainant is verbatim reproduced, as under:
"The accused Rajiv Sharma owes me Rs. 5 lakhs. I gave the accused Rs. 5 lakhs in cash in the year 2012. The accused gave me a cheque for the sum of Rs. 5 lakhs and in the said cheque the amount was filled by the accused but the name of the complainant was not mentioned and the accused directed the complainant to fill his name and date in the requisite column when he send the cheque to his bank for clearance in July 2013. (Vol. the cheque was undated). I gave this amount of Rs. 5 lakhs to the accused as a friendly loan for a period of one year. I gave this amount of Rs. 5 lakhs to the accused without interest. The amount of the Rs. 5 lakhs was arranged by me from my business, however, I have no documentary proof to show that I have withdrawn Rs. 5 lakhs from my business. I am income tax assesse. I had given this Rs. 5 lakhs to the accused in the first quarter of year 2012. I do not remember whether this amount of Rs. 5 lakhs did show in my ITR for the assessing year 2011-12.
It is correct to suggest that the cheque was issued by the accused was a security cheque. It is wrong to suggest that it was a blank cheque. It is wrong to suggest that the said amount Rs. 5 lakhs paid by the accused. It is wrong to suggest that I am deposing falsely."
EXAMINATION UNDER SECTION 313 CR.P.C.:
8. Incriminating circumstances appearing in evidence were explained to the appellant to which he responded, as under:
"Q. 1 It has come in evidence against you that you had demanded a sum of Rs. 5,00,000/- from the complainant as friendly loan from the complainant during January and March, 2012 which was returnable by July 2013. What do you have to say? A. I had not taken any loan from the complainant. There was a business transaction between me and the complainant and the complainant had given Rs. 5 Lakhs to me for that particular business transaction.Crl. Appeal No. 10/2023 Rajiv Sharma vs. Lokesh Sharma Page No. 4/23
Q. 2 It has come in evidence against you that issued cheque No. 962790 dt. 25.07.2013 for a sum of Rs. 5,00,000/- (Ex.CW1/1) drawn on ICICI Bank Ltd., Ashok Vihar-II, Delhi in name of Lokesh Sharma. What do you have to say?
A. I had issued the cheque in question as security against the business transaction. Q. 3 It has come in evidence against you that cheque was returned dishonoured vide returned memo Ex.CW1/2 dt. 03.08.2013 with remarks 'funds insufficient'. What do you have to say? A. I had already made part payment to the complainant but the complainant presented the cheque before the bank without giving any intimation to me. I had asked the complainant to return the cheque to me. However, he did not return the cheque to me and misused the cheque in question. Q. 4 It has come in evidence against you that legal demand notice dated 29.08.2013 was sent on your address 1706, 3rd Floor, Sohan Ganj, Subzi Mandi, Delhi-110007 (Ex.CW1/3). What do you have to say? A. I did not receive the legal demand notice. I came to know about the dishonour of the cheque in question when I received summons from the court. Q. 5 It has come in evidence against you that same was sent through Regd. A.D. as well as speed post postal receipt Ex.CW1/4, Ex.CW1/5 and Ex.CW1/6. What do you have to say?
A. I did not receive any notice.
Q. 6 Do you want say anything else.
A. I had business transaction with the complainant. The cheque in question was issued as security cheque for the said purpose. I had made part payment to the complainant. Thereafter, the complainant asked me to issue two cheques for the remaining payment and assured me that he will return the cheques in question to me. But the complainant did not return the cheque in question to me despite my repeated requests. Q. 7 Do you want to lead defence evidence. A. Yes.."
APPELLANT'S EVIDENCE:
9. The appellant did not lead defence evidence despite availing as many as 15 opportunities since 13.04.2017 to 31.03.2022.
Crl. Appeal No. 10/2023 Rajiv Sharma vs. Lokesh Sharma Page No. 5/23IMPUGNED JUDGMENT:
10. The trial Court, vide impugned judgment, convicted the appellant for offence under Section 138 NI Act on the grounds, as under:
(a) Presumption under Section 139 NI Act that the said cheque was issued by the appellant for the discharge of a legally enforceable debt was drawn;
(b) The said cheque matured for presentation on 25.07.2013; and
(c) The appellant failed to rebut presumption that the said cheque was issued for the discharge of a legally enforceable debt or liability.
CRIMINAL APPEAL:
11. Feeling aggrieved and dissatisfied with the impugned judgment and order on sentence, the appellant preferred the criminal appeal on the grounds, as under:
(a) The trial Court did not appreciate that the complainant did not prove complete chain of evidence and there was reasonable doubt that the appellant committed the offence;
(b) There are material inconsistencies in the evidence of the complainant;
(c) The complainant failed to prove that the said cheque was issued for the discharge of a legally existing liability in the sum of Rs. 5,00,000/-;
(d) The complainant failed to prove the mode of transfer of the said amount to the appellant;
(e) The complainant did not file Income Tax Return of the relevant period in order to show the source of withdrawal of the said amount of Rs. 5,00,000/- and particulars of debtors;
(f) In the demand notice, the complainant has not stated the nature of liability in discharge of which the said cheque was issued;
(g) The complainant misused the said cheque to extort higher amount than the actual amount due to him;Crl. Appeal No. 10/2023 Rajiv Sharma vs. Lokesh Sharma Page No. 6/23
(h) The trial Court did not consider statement of the complainant, in his cross-examination, that the cheque was 'undated' and payee column was 'blank' which show that the appellant had not given any instruction to the complainant to deposit the said cheque;
(i) The complainant did not produce any acknowledgement or receipt pertaining to the said amount of Rs. 5,00,000/-;
(j) The demand notice does not state the mode of arrangement and transfer of Rs. 5,00,000/-;
(k) The trial Court did not consider that actual amount due to the complainant was Rs. 2,50,000/-
whereas the complaint was filed for an amount of Rs. 5,00,000/-;
(l) The onus of proof was wrongly shifted to the appellant against law;
(m) The trial Court drawn wrong inference and misinterpreted evidence of the complainant;
(n) The trial Court passed the impugned order on assumption, presumption and imagination;
(o) The complainant failed to prove guilt of the appellant;
(p) The trial Court passed the impugned judgment on conjectures and surmises;
(q) The trial Court did not consider that the view favourable to the appellant should have been taken; and
(r) The impugned judgment of conviction and order on sentence caused miscarriage of justice.
APPEARANCE:
12. I have heard arguments of Mr. Jujhar Singh, Advocate for the appellant and examined trial Court record.
CONTENTIONS OF LD. COUNSEL FOR THE APPELLANT:
13. Ld. Counsel for the appellant contended that the trial Court did not explain the nature of liability in particulars of offence, as required under Section 251 Cr.P.C. and thereby, the appellant suffered material prejudice in defending the case.Crl. Appeal No. 10/2023 Rajiv Sharma vs. Lokesh Sharma Page No. 7/23
14. Ld. Counsel for the appellant contended that the actual claim of the complainant is Rs. 2,50,000/- whereas the complainant filed the case for entire amount of Rs. 5,00,000/-
and he had already received part payment. He contended that the complainant has not led any evidence to show the source of amount of Rs. 5,00,000/-. He contended that the complainant has not led any evidence to show the mode of transfer of the said amount to the appellant. He contended that the complainant has not filed any Income Tax Return of the relevant period to prove availability of the said amount of Rs. 5,00,000/-. He contended that the complainant admitted that the appellant had issued a blank signed cheque as a 'security'. He contended that the complainant presented the said cheque for payment without instruction of the appellant. He contended that there are material discrepancies and inconsistencies in the evidence of the complainant. He contended that the demand notice Ex.CW1/3 does not state the nature of liability in respect of which the said cheque was issued. He contended that there is no acknowledgement or receipt pertaining to advancement of loan of Rs. 5,00,000/-. He contended that the complainant misused the said blank signed cheque to extort higher amount from the appellant. He contended that the trial Court passed the impugned order on assumption, presumption, conjectures and surmises. He contended that the complainant failed to prove existence of any legally recoverable debt against the appellant. He contended that the complainant failed to prove that the said cheque was issued for the discharge of any legally enforceable debt. He contended that the impugned judgment and order on sentence deserve to be set-aside.
Crl. Appeal No. 10/2023 Rajiv Sharma vs. Lokesh Sharma Page No. 8/23STATUTORY PROVISION:
15. Section 138 NI Act is as under:
"138. Dishonour of cheque for insufficiency, etc., of funds in the account. - 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 [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: Provided that nothing contained in this section shall apply unless -
(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(b) the payee or the holder in due course of the cheque, as the case may be, 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 thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
Explanation.- For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability."
Crl. Appeal No. 10/2023 Rajiv Sharma vs. Lokesh Sharma Page No. 9/2316. In Gimpex Private Limited vs. Manoj Goel, 2021 SCC OnLine SC 925, Hon'ble Supreme Court of India delineated ingredients of offence under Section 138 NI Act, as under:
"25. The ingredients of the offence under Section 138 are:
(i) The drawing of a cheque by person on an account maintained by him with the banker for the payment of any amount of money to another from that account;
(ii) The cheque being drawn for the discharge in whole or in part of any debt or other liability;
(iii) Presentation of the cheque to the bank;
(iv) The return of the cheque by the drawee bank as unpaid either because 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;
(v) A notice by the payee or the holder in due course making a demand for the payment of the amount to the drawer of the cheque within 30 days of the receipt of information from the bank in regard to the return of the cheque; and
(vi) The drawer of the cheque failing to make payment of the amount of money to the payee or the holder in due course within 15 days of the receipt of the notice."
POINTS FOR CONSIDERATION:
(a) Whether the appellant had drawn the said cheque on an account maintained by him with a banker?
17. The appellant, in response to particulars of the offence explained to him under Section 251 Cr.P.C., admitted that he had drawn the said cheque in favour of the complainant, as under:
"Q. Did you issue the cheque in question? A. I have issued the cheque in question to complainant. I have filled the amount on the cheque and have duly signed the cheque. I have not filled the name of complainant and date on the cheque."Crl. Appeal No. 10/2023 Rajiv Sharma vs. Lokesh Sharma Page No. 10/23
18. The appellant, in his examination under Section 313 Cr.P.C., admitted that he had issued the said cheque Ex.CW1/1 in favour of the complainant, as under:
"Q. 2 It has come in evidence against you that issued cheque No. 962790 dt. 25.07.2013 for a sum of Rs. 5,00,000/- (Ex.CW1/1) drawn on ICICI Bank Ltd., Ashok Vihar-II, Delhi in name of Lokesh Sharma. What do you have to say?
A. I had issued the cheque in question as security against the business transaction."
19. The appellant did not challenge the evidence of the complainant on the aspect of issuance of the said cheque in favour of the complainant. Moreover, the appellant made a suggestion that he had issued the said cheque to the complainant as a 'security', as under:
"The accused Rajiv Sharma owes me Rs. 5 lakhs. I gave the accused Rs. 5 lakhs in cash in the year 2012. The accused gave me a cheque for the sum of Rs. 5 lakhs and in the said cheque the amount was filled by the accused but the name of the complainant was not mentioned and the accused directed the complainant to fill his name and date in the requisite column when he send the cheque to his bank for clearance in July 2013. (Vol. the cheque was undated).
* * * It is correct to suggest that the cheque was issued by the accused was a security cheque. It is wrong to suggest that it was a blank cheque."
20. Therefore, there is sufficient evidence on record that the appellant had drawn the said cheque in favour of the complainant on an account maintained by him with a banker.
(b) Whether the said cheque was returned unpaid with remark 'Funds Insufficient' vide memo dated 03.08.2013?
21. The complainant proved bank memo Ex.CW1/2 pertaining to dishonour of the said cheque by the appellant's banker on the ground of 'Funds Insufficient'.
Crl. Appeal No. 10/2023 Rajiv Sharma vs. Lokesh Sharma Page No. 11/2322. Section 146 NI Act provides that production of bank's memo is a prima facie evidence of the fact that the said cheque was dishonoured, as under:
"146. Bank's slip prima facie evidence of certain facts.-The Court shall, in respect of every proceeding under this Chapter, on production of bank's slip or memo having thereon the official mark denoting that the cheque has been dishonoured, presume the fact of dishonour of such cheque, unless and until such fact is disproved."
23. The appellant has not led any evidence to prove the contrary.
24. The appellant, in his examination under Section 313 Cr.P.C., admitted dishonour of the said cheque by his banker vide bank memo Ex.CW1/2, as under:
"Q. 3 It has come in evidence against you that cheque was returned dishonoured vide returned memo Ex.CW1/2 dt. 03.08.2013 with remarks 'funds insufficient'. What do you have to say? A. I had already made part payment to the complainant but the complainant presented the cheque before the bank without giving any intimation to me. I had asked the complainant to return the cheque to me. However, he did not return the cheque to me and misused the cheque in question."
25. Therefore, it is established that the appellant's banker returned the said cheque unpaid for the reason 'Funds Insufficient' vide bank memo Ex.CW1/2.
(c) Whether the complainant sent demand notice to the appellant within statutory period of 30 days from the date of receipt of information pertaining to dishonour of the said cheque?
26. The appellant's banker returned the said cheque unpaid for the reason 'Funds Insufficient' on 31.07.2013. The complainant received the bank memo Ex.CW1/2 from his banker on 03.08.2013.
Crl. Appeal No. 10/2023 Rajiv Sharma vs. Lokesh Sharma Page No. 12/2327. The complainant sent demand notice Ex.CW1/3 to the appellant on 29.08.2013 vide postal receipts Ex.CW1/4 and Ex.CW1/5 respectively.
28. As per acknowledgement card Ex.CW1/6, the appellant was served with demand notice. The appellant admitted receipt of demand notice, in his plea of defence under Section 251 Cr.P.C., as under:
"Q. Did you receive the legal demand notice? A. I have received the legal demand notice."
29. Therefore, the appellant was served with demand notice within statutory period of 30 days from the date of receipt of information pertaining to dishonour of the said cheque.
(d) Whether presumptions under Section 118 and 139 NI Act were rightly drawn against the appellant?
30. As already noted above, the appellant had drawn the said cheque on an account maintained by him with a banker in favour of the complainant and the said cheque was presented for encashment within period of its validity and it was returned unpaid with the reason 'Funds Insufficient' and the complainant sent demand notice to the appellant within stipulated period and the appellant was served with the demand notice.
31. Once the signature of the appellant on the said cheque is established, 'reverse onus' clauses under Section 118 and 139 NI Act become operative.
32. In Kalamani Tex and Another vs. P. Balasubramanian, (2021) 5 SCC 283, Hon'ble Supreme Court of India held, as under:
"13.....The statute mandates that once the signature(s) of an accused on the cheque / negotiable instrument are established, then these "reverse onus" clauses become operative. In such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him....."Crl. Appeal No. 10/2023 Rajiv Sharma vs. Lokesh Sharma Page No. 13/23
(e) What is the effect of presumption under Section 139 NI Act?
33. Ld. Counsel for the appellant contended that presumption under Section 139 NI Act does not extend to presumption of existence of any legally recoverable debt or liability.
34. The presumption under Section 139 NI Act includes presumption of existence of a legally enforceable debt or liability.
35. In Rangappa vs. Sri Mohan, (2010) 11 SCC 441, Hon'ble Supreme Court of India held, as under:
"26. In light of these extracts, we are in agreement with the respondent claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat may not be correct....."
(f) What is the mode of rebuttal of statutory presumption under 139 NI Act?
36. To rebut statutory presumption under Section 139 NI Act, the appellant can lead direct evidence or rely upon evidence adduced by the complainant to show that consideration or debt did not exist or non-existence of consideration or debt is probable. The appellant must raise a 'probable defence' and the standard of proof is 'preponderance of probabilities'.
37. In Kumar Exports vs. Sharma Carpets, (2009) 2 SCC 513, Hon'ble Supreme Court of India held, as under:
"20. The accused in a trial under Section 138 of the Act has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case the non-existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed.Crl. Appeal No. 10/2023 Rajiv Sharma vs. Lokesh Sharma Page No. 14/23
To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. 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 disprove the non-existence of 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 bare denial of the passing of the 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, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non- existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist....."
(g) Whether the appellant raised a probable defence to rebut statutory presumptions under Section 118 and 139 NI Act?
38. As regards contention that the trial Court did not explain the nature of liability in particulars of the offence under Section 251 Cr.P.C., it can be stated that Section 251 Cr.P.C. does not prescribe any particular form of notice. It merely provides that the Magistrate must state particulars of the offence of which the appellant is accused of. It also provides that it is not necessary to frame a formal charge.
39. In Nitin Gupta vs. Aakash Metal Industrial, 2019 SCC OnLine Del 10870, Hon'ble High Court of Delhi held, as under:
"12. In terms of Section 143 NI Act, subject to the proviso, as per normal rule, the proceedings under Section 138 of Negotiable Instrument Act are summary in nature.Crl. Appeal No. 10/2023 Rajiv Sharma vs. Lokesh Sharma Page No. 15/23
On appearance of the accused, the Magistrate is required to explain the substance of accusation to the accused and ask him whether he would plead guilty or has any defence to make, however, in terms of the mandate of the Section, it would not be necessary to frame a formal notice."
40. The appellant did not raise any contention before the trial Court that the trial Court did not state the substance of the accusation to him. The appellant received the copy of the complaint alongwith documents. The appellant filed an application under Section 145 (2) NI Act. The appellant received copy of affidavit of the complainant filed in examination-in- chief. The appellant cross-examined the complainant. The appellant did question the complainant on the nature of loan advanced to him. The appellant, in his examination under Section 313 Cr.P.C., denied that he had taken any loan from the complainant. The appellant had requisite notice of the nature of loan advanced by the complainant. The appellant did not raise this contention before the trial Court at any stage. The appellant did not raise this contention before the trial Court at the time of final arguments. The only argument raised is that the trial Court did not explain nature of loan advanced by the complainant to the appellant. This Court does not find any merit in his contention.
41. Moreover, the appellant has failed to show that there was any failure of justice on account of non-explanation of nature of loan advanced by the complainant.
42. In this regards, it will be relevant to reproduce relevant para of the judgment in Nitin Gupta (supra), as under:
"14. Looking at the issue from another angle as to whether any failure of justice has occurred on account of non framing of formal Notice under Section 251 CrPC by the trial court on 20.12.2016.Crl. Appeal No. 10/2023 Rajiv Sharma vs. Lokesh Sharma Page No. 16/23
In this regard, it is profitable to refer to Section 464 CrPC which provides that "no finding, sentence or order by a Court of competent jurisdiction shall be deemed invalid merely on the ground that no charge was framed or on the ground of any error, omission or irregularity in the charges, unless, in the opinion of the Court of appeal, confirmation or revision, a failure of justice has been occasioned thereby."
43. As regards contention that the actual claim of the complainant is Rs. 2,50,000/- as he has already received a part payment and the complainant has filed the case for entire amount of Rs. 5,00,000/-, it can be stated that the defence of the appellant is inconsistent, vacillating and contradictory. The case of the appellant, in response to substance of accusation explained to him under Section 251 Cr.P.C., was that the complainant is his cousin brother and he had taken a loan of Rs. 2,50,000/- from him. He denied that he had taken a loan of Rs. 5,00,000/- from the complainant. He stated that he paid interest on amount of Rs. 2,50,000/- and he was still paying interest on loan of Rs. 2,50,000/-. In his application under Section 145 (2) NI Act, the appellant denied that he had any business relation with the complainant. However, in cross-examination of the complainant, the appellant did not confront his case to him, as pleaded in response to substance of accusation explained to him under Section 251 Cr.P.C. and he made a suggestion that entire amount of Rs. 5,00,000/- was paid by him. In his examination under Section 313 Cr.P.C., the appellant denied that he had taken any loan from the complainant. He stated that there was a business transaction between him and the complainant and the complainant had given him Rs. 5,00,000/- for that particular business transaction and he made part payment to the complainant.
Crl. Appeal No. 10/2023 Rajiv Sharma vs. Lokesh Sharma Page No. 17/2344. To reiterate, initially, the appellant pleaded that he had taken a loan of Rs. 2,50,000/- from the complainant and he paid interest on the said amount and he denied that he had taken any loan of Rs. 5,00,000/- from the complainant. He also denied any business relation with the complainant. Subsequently, he came out with a case that he made payment of Rs. 5,00,000/- to the complainant. Finally, he stated that he had not taken any loan from the complainant and he had a business transaction with the complainant and the complainant had given Rs. 5,00,000/- to him for that particular business transaction and he made part payment to the complainant.
45. Precisely stating, the appellant failed to putforth any defence, much less than probable defence, to rebut statutory presumption of existence of a legally enforceable debt.
46. As regards contention that the complainant has not led any evidence regarding source of fund, Income Tax Return or mode of transfer of amount of Rs. 5,00,000/- to the appellant, it can be stated that the appellant has admitted, in his examination under Section 313 Cr.P.C., that the complainant had given Rs. 5,00,000/- to him for a business transaction, as under:
"Q. 1 It has come in evidence against you that you had demanded a sum of Rs. 5,00,000/- from the complainant as friendly loan from the complainant during January and March, 2012 which was returnable by July 2013. What do you have to say? A. I had not taken any loan from the complainant. There was a business transaction between me and the complainant and the complainant had given Rs. 5 Lakhs to me for that particular business transaction."
47. Absence of nature of loan in demand notice Ex.CW1/3 is neither material nor significant. The appellant had requisite knowledge of the nature of loan advanced to him.
Crl. Appeal No. 10/2023 Rajiv Sharma vs. Lokesh Sharma Page No. 18/2348. As regards contention that he had issued a signed cheque with column of the 'payee' and the amount in 'words' and 'figure' blank, it can be stated that the defence of the appellant on this aspect is inconsistent.
49. The appellant, in response to substance of accusation explained to him under Section 251 Cr.P.C., admitted that he had issued a signed cheque after filling 'amount' therein, as under:
"Q. Did you issue the cheque in question? A. I have issued the cheque in question to complainant. I have filled the amount on the cheque and have duly signed the cheque. I have not filled the name of complainant and date on the cheque."
50. On the contrary, the appellant, in his application under Section 145 (2) NI Act, stated that he had issued a blank cheque and the complainant filled 'amount' and 'date' therein. The complainant, in his cross-examination, stated that the appellant had given him a cheque for Rs. 5,00,000/- and the cheque amount was filled by the appellant. He stated that his name was not mentioned and the appellant instructed him to fill his name and date in requisite columns when he would present the cheque for clearance in July, 2013. He stated that the cheque was undated. Therefore, it is proved that the appellant had filled amount in 'words' and 'figure' in the said cheque and signed it and handed it over to the complainant with the instruction to fill the name of 'payee' and 'date' in the month of July, 2013 for presentation to his banker for encashment.
51. A complaint under Section 138 NI Act is maintainable for dishonour of a 'security' cheque. The said cheque matured for presentation on 25.07.2013.
Crl. Appeal No. 10/2023 Rajiv Sharma vs. Lokesh Sharma Page No. 19/2352. Therefore, there was a crystallized debt on the date of presentation of the said cheque for encashment to the banker of the appellant.
53. In Sripati Singh vs. The State of Jharkhand & Anr., Crl. Appeal Nos. 1269-1270 of 2021 decided on 28.10.2021, Hon'ble Supreme Court of India held, as under:
"16. A cheque issued as security pursuant to a financial transaction cannot be considered as a worthless piece of paper under every circumstance. 'Security' in its true sense is the state of being safe and the security given for a loan is something given as a pledge of payment. It is given, deposited or pledged to make certain the fulfilment of an obligation to which the parties to the transaction are bound. If in a transaction, a loan is advanced and the borrower agrees to repay the amount in a specified timeframe and issues a cheque as security to secure such repayment; if the loan amount is not repaid in any other form before the due date or if there is no other understanding or agreement between the parties to defer the payment of amount, the cheque which is issued as security would mature for presentation and the drawee of the cheque would be entitled to present the same. On such presentation, if the same is dishonoured, the consequences contemplated under Section 138 and the other provisions of N.I. Act would flow.
17. When a cheque is issued and is treated as 'security' towards repayment of an amount with a time period being stipulated for repayment, all that it ensures is that such cheque which is issued as 'security' cannot be presented prior to the loan or the instalment maturing for repayment towards which such cheque is issued as security. Further, the borrower would have the option of repaying the loan amount or such financial liability in any other form and in that manner if the amount of loan due and payable has been discharged within the agreed period, the cheque issued as security cannot thereafter be presented. Therefore, the prior discharge of the loan or there being an altered situation due to which there would be understanding between the parties is a sine qua non to not present the cheque which was issued as security.Crl. Appeal No. 10/2023 Rajiv Sharma vs. Lokesh Sharma Page No. 20/23
These are only the defences that would be available to the drawer of the cheque in a proceeding initiated under Section 138 of the N.I. Act. Therefore, there cannot be a hard and fast rule that a cheque which is issued as security can never be presented by the drawee of the cheque. If such is the understanding a cheque would also be reduced to an 'on demand promissory note' and in all circumstances, it would only be a civil litigation to recover the amount, which is not the intention of the statute. When a cheque is issued even though as 'security' the consequence flowing therefrom is also known to the drawer of the cheque and in the circumstance stated above if the cheque is presented and dishonoured, the holder of the cheque/drawee would have the option of initiating the civil proceedings for recovery or the criminal proceedings for punishment in the fact situation, but in any event, it is not for the drawer of the cheque to dictate terms with regard to the nature of litigation."
54. In V.S. Yadav vs. Reena, 2010 (172) DLT 561, Hon'ble High Court of Delhi held, as under:
"Mere pleading not guilty and stating that the cheques were issued as security, would not give amount to rebutting the presumption raised U/s 139 NI Act. If mere statement U/s 313 Cr.P.C. or U/s 281 Cr.P.C. of accused of pleading not guilty was sufficient to rebut the entire evidence produced by the complainant / prosecution, then every accused has to be acquitted. But, it is not the law. In order to rebut the presumption U/s 139 NI Act, the accused, by cogent evidence has to prove the circumstance under which cheques were issued. It was for the accused to prove if no loan was taken why he did not write a letter to complainant for return of the cheque. Unless the accused had proved that he acted like a normal businessman / prudent person entering into a contract, he could not have rebutted the presumption U/s 138 NI Act. If no loan was given, but cheques were retained, he immediately would have protested and asked the cheques to be returned and if still cheques were not returned, he would have served a notice as complainant. Nothing was proved in this case."Crl. Appeal No. 10/2023 Rajiv Sharma vs. Lokesh Sharma Page No. 21/23
55. As regards contention that the complainant presented the said cheque after filling name of the 'payee' and 'date' therein without intimation or instruction of the appellant, it can be stated that the loan advanced by the complainant was repayable in the month of July, 2013 and therefore, the complainant rightly presented the said cheque for encashment to the appellant's banker after filling date as '25.07.2013' and his 'name'.
56. In Bir Singh vs. Mukesh Kumar, (2019) 4 SCC 197, Hon'ble Supreme Court of India held, as under:
"34. If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This is itself would not invalidate the cheque. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence.
* * *
36. Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt."
57. The appellant has failed to raise any probable defence to rebut presumption of existence of legally recoverable liability.
58. The trial Court has not committed any manifest error of law or procedure and rightly convicted the appellant for committing offence under Section 138 NI Act. CONCLUSION:
59. Accordingly, the appeal filed by the appellant challenging conviction under Section 138 NI Act is dismissed.
Digitally signed by SANJAY SANJAY SHARMA Announced in the open Court SHARMA Date: 2023.01.11 17:03:11 +0530 SANJAY SHARMA-II on this 11th January, 2023 Addl. Sessions Judge-03 (Central) Tis Hazari Courts, Delhi Crl. Appeal No. 10/2023 Rajiv Sharma vs. Lokesh Sharma Page No. 22/23 Rajiv Sharma vs. Lokesh Sharma CNR No.: DLCT01-000339-2023 Crl. Appeal No. 10/2023 11.01.2023 Present : Mr. Jujhar Singh, Advocate with the appellant.
Vide separate judgment, the appeal filed by the appellant challenging conviction under Section 138 NI Act is dismissed. At this stage, the appellant filed an affidavit stating that he is ready to make payment of compensation amount, as directed by this Court, in the form of four instalments of Rs. 2,00,000/- each w.e.f. 05.04.2023. Accordingly, notice of the appeal on quantum of compensation and sentence be issued to the respondent for 06.03.2023.
Digitally signed by SANJAY SANJAY SHARMA
SHARMA Date:
2023.01.11
17:03:24 +0530
Sanjay Sharma-II
ASJ-03, Central District
Tis Hazari Courts, Delhi
11.01.2023
Crl. Appeal No. 10/2023 Rajiv Sharma vs. Lokesh Sharma Page No. 23/23