Delhi District Court
Axis Bank Ltd vs Yogendra Kumar on 3 May, 2023
1
IN THE COURT OF DR. SATINDER KUMAR GAUTAM
PRESIDING OFFICER SPECIAL COURT(NI ACT) SOUT WEST,
DWARKA
CC NO. 27288/18
CNR No. DLSW02029701/18
AXIS BANK LTD VS YOGENDRA KUMAR
P.S NAJAFGARH
s.no
1 Name and address of the Axis Bank Ltd. Branch office at Axis
complainant Bank Limited, Retail Lending
-Collection & FCG Axis House,
Jaypee green Wish Tower, 114,
Tower-02 2nd floor, Sector 128, Noida
Expressway, Noida, UP-201301
(Through its authorized
representative sh. Vikas Kumar)
2 Name and address of accused Sh. Yogendra Kumar 114/35-A,
Brahmsthan Path, Sekhpura, Patna,
Bihar-800014.
Sarfa Bhawan, Govind Mitra Road,
Below Canara Bank, Patna , Bihar
800004.
3 Offence complained of u/s 138 of NI Act
4 Plea of accused Pleaded not guilty.
5 Date of institution 03.08.2018
6 Final Order Acquitted
7 Date of such order 03.05.2023
CC NO. 27288/18 Axis Bank Ltd Vs. Yogendra kumar 1 /34
2
JUDGMENT
INTRODUCTION
1. This judgment would dispose of complaint case bearing CC No. 27288/2018 title as Axis Bank Ltd. Vs Sh. Yogendra Kumar u/s 138 of Negotiable Instrument Act,1881.
Factual Matrix of the case
2. The facts as alleged by complainant are that the accused had taken home loan from the complainant bank under account no. PHR036101882108 and accused in order to discharge his liability, issued a cheque bearing no. 377734, 377735 and 377736 dated 27.5.2018, 28.5.2018 and 19.5.2018 for sum of Rs.2,39,762/- each respectively in favour of the complainant which on presentation, returned back unpaid with remarks "Funds Insufficient"
vide cheque returning memo dated 01.06.2018. Thus, the complainant sent a legal demand notice dated 18.6.2018 but despite service of the legal notice, the accused failed to repay the payment of cheque in question within 15 days nor file any reply. Hence, the present case.
Pre-summoning evidence.
3. Pre-summoning evidence lead by complainant whereas CW-1 Vikas Kumar/ complainant tendered his evidence by way of affidavit Ex.CW1/1 CC NO. 27288/18 Axis Bank Ltd Vs. Yogendra kumar 2 /34 3 along with documents Special power of attorney Ex. CW1/1, Original cheque Ex.CW1/2, original cheque returning memo Ex.CW1/3, copy of legal notice Ex. CW1/4, original Postal receipts Ex. CW1/5 alongwith Internet tracking report as Mark A and Mark B. Thereafter, Pre- summoning evidence was closed.
Cognizance taken
4. Considering Pre-summoning evidence of complainant and documents relied on by the complainant, by taking cognizance, the concerned court vide order dated 3.08.2018 accused was summoned for facing trial u/s 138 cr.p.c.
FRAMING OF NOTICE.
On 04.2.2020, accused appeared with counsel, notice u/s 251 cr.p.c was framed to which he pleaded not guilty and claimed trial. The defence taken by accused in notice u/s 251 cr.p.c as stated is as under:
"....I have never taken any loan from the complainant. I did not have any transaction with the complainant I had entered into an agreement with the builder "Saha Infratech" and the cheques in question was given to the representative of the builder. I donot know whether the complainant was also involved in the transation with the builder. The cheuqes in question bear my signatures and no other particulars have been filled by me. I do not accept my liability to pay CC NO. 27288/18 Axis Bank Ltd Vs. Yogendra kumar 3 /34 4 the cheque amount." Further he stated that he did not receive legal notice though, address mention on notice is correct.
5. In statement of accused u/s 294 cr.p.c the accused vide dt.
3.12.2021 has admitted genuiness and correctness of cheques Ex. CW1/2 , Ex. CW1/2-A & EX CW1/ 2-B and cheuqes returning memos Ex. CW1/3 and postal reciepts Ex. CW1/5. Thereafter, application u/s 145 (2) NI Act was filed by accused which was allowed and matter was listed for cross examination of complainant. Vide order dated 4.02.2020.
COMPLAINANT EVIDENCE
6. On 1.10.2021 complainant /AR Sh. Vikas Kumar step into witness box as CW1 and adopted his pre summoning evidence in his examination in chief. He was cross examined at length by the ld. Counsel of the accused.
7. During cross examination, CW1 Sh. Vikas Kumar, AR of the complainant stated that the loan was not granted in his presence and there is a tripartite loan agreement between the complainant, builder and accused. It is denied that the loan agreement was quadripartite and not tripartite agreement. However, on seeing loan agrement Ex CW1/DX-1, CW1 stated that the agreement was as per record in which it was mentioned as quadrapartite agreement. Further, CW1 stated that this loan is a part of loan process and he is not aware as to whether accused had e-mailed for payment be stopped. On being shown the record of email, CW1 stated that he does not have any knowledge of the same. Further he stated that sanctioning of loan CC NO. 27288/18 Axis Bank Ltd Vs. Yogendra kumar 4 /34 5 is other department and disbursement of loan is another department. No loan agreement was filed on record as the case is based on bouncing of cheques and same has been filed on record. CW1 has no knowledge as to whether what security was taken at the time of sanctioning the loan as this matter is in domain of loan sanctioning department. On being shown Ex. CW1/DX-1 ( loan agreement) in which the accused was requiried to furnish 24 PDCs in advance, witness stated that it is a matter of record. CW1 further replied to the question : "Is it true that the cheque in question are the same security PDCs blank signed cheques which the accused had furnished?" the cheque in question are the liability cheques of the accused. Further, he testified that the cheques were received when same had bounced from the legal department. The loan amount was 76 lacs which was to be repaid from 2018 to 2026 through EMIS and no loan account statement is filed on record as it was not required. On being shown loan account statement marked as CW1/DX-3, CW1 stated that the arrears of the cheque are not mentionedin the account statement of the customer rather the cheques get bounced in the SLFIT account of the bank. Further , CW1 stated that it is as per record the cheques in question are in relation to the loan agreement. It is denied that there is no mention in the statement of account of the customer of the arrear of the cheque in question or that the accused had repaid the loan amount as per the terms till 10.7.2020. Further testified that after recall notice it is the liability of the customer to p ay the full and final loan amount and in this case, the same was issued before bouncing of cheque but did not remember the exact date. Further testified that he has not filed loan recall notice (LRN) on record. It is deposed by CW1 that the cheques in question in the present CC NO. 27288/18 Axis Bank Ltd Vs. Yogendra kumar 5 /34 6 case were filed against the home loan liability of the accused. Further , CW1 testified that as per loan account statement filed by the accused, the loan amount has been repaid as per record. CW1 Sh.Vikas Kumar denied that the accused is not having any liability towards the complainant as no record of loan transaction filed or that complainant misused the security cheques of the accused therefore, no loan recall notice filed on record or that accused has no liability towards the cheques in question as the accused has already made the payment regarding the cheques in question. Further, CW1 testified that it is matter of record and can be verified from loan account statement filed by accused whether accused made payments till 9.1.2020 and stopped making payment thereafter. Thereafter, complainant evidence was closed and matter was listed for statement of accused...
STATEMENT OF ACCUSED AND DEFENCE EVIDENCE.
8. On 03.12.2021, statement u/s 313 cr.p.c of the accused was recorded wherein he stated that he had never issued any cheque to the complainant bank and that he had never been in contact with the bank. He admitted that he had received the legal notice. In reply to question no. 4, accused stated as under;
" he has never met any person from the complainant bank. The complainant has done a fraud. He met one Naveen chaudhary, who might have been the broker of the builder to whom he had given cheques and he got signed from him on some agreement. Thereafter, he got a message one day from Axis Bank that loan has been disbursed. He could not understand CC NO. 27288/18 Axis Bank Ltd Vs. Yogendra kumar 6 /34 7 as he had not taken any loan from the complainant bank. He called the complainant bank and asked them to stop the loan. Thereafter, the bank asked him to send a mail for the same which he did after reaching his office. He was not aware how the loan got disbursed by the complainant. After informing, the complainant broker started approching him. Accused has not signed the loan application form which he got through DRT. Then he went to the bank and they informed him that they had already deposited the cheques. Thereafter, he went to the broker who tried to convince him to make the loan installments as he would get the loan repaid himself. Thereafter, he paid some installments and he kept informing the bank to recover the loan from the builder. Thereafter, the bank started taking payments from the builder. Further, he stated that when the building stopped making the payment, the complainant misused his cheques. He is not liable to pay the cheque amount as the complanant misused his cheque and opted to lead defence evidence."
9. Accused examined himself on 8.3.2022 and 31.5.2022 as DW1 and in addition to defence taken in notice u/s 251 cr.p.c and statement u/s 313 cr.p.c , accused tendered his evidence by way of affidavit as ExDW1/1 alongwith some documents e-mail sent to Axix bank and proved the same as Ex. DW1/2, copy of cancellatiion of booking of allotment vide Ex. DW1/3, account statement as ex. DW1/4 and copy of loan account statement Ex.DW1/5. Further, it was testified that he had signed quadrapartite agreement just to avoid Naveen chaudhary for allotment in which complainant and builder were parties and he himself never given any loan application in the bank and no official from bank came to him.
CC NO. 27288/18 Axis Bank Ltd Vs. Yogendra kumar 7 /34 8 Further in addition, he stated that he inquired from the bank, he get to know that the amount was disbursed in his name but was given to the builder. He sent e-mailed to the bank that don't handover demand draft to the builder but bank informed him that the same has already been taken by the builder. He told the bank how can they disburse such a huge amount of loan without any loan application from his side, then some agents of bank communicated to him and tried to persuade him stated that the builder is a good person. Thereafter he insisted to the builder that he should repay the loan. T and complainant bank are inconnivance. Thereafter, Yogesh Sharma and Rakesh Gupta from the complainant bank assured him that the loan amont will be returned by the builder. They also told that for some time 16 EMI amount kept on deducting from his account towards repayment of loan . Then, he wrote a mail to bank and builder to tell them to cancel the loan as he is not liable to pay the loan amount. Further, stated that he stopped depositing money in Axis bank so that no EMI could be deducted and after that, builder paid the loan amount for one year and thereafter stopped to pay then, complainant misued his cheques.
10. During cross examination, accused stated that loan agreement page no. 2 to 11 CW1/DX-1 does not bear his signature except on page no. 14 at point A and on page no.21 at point B and from page no. 22 to
39. He also denied undertaking-cum-indemnity bond from page no. 44 to 47 do not bear his signature. Further in reply to a question ( Did you have ever filed any complaint against the complainant bank as you have stated CC NO. 27288/18 Axis Bank Ltd Vs. Yogendra kumar 8 /34 9 that the bank have forged your documents? ) DW1 stated that he had tried and gone to P S in Noida ( UP) and then some person from the bank approached him and told that they will close the loan. DW1 admitted that he has not filed any written complaint for forgery of his documents in PS. He also stated that it is correct that EMIS have been paid from his account towards the loan account for which cheques in question has been filed. Further, he denied that as EMI paid from his account as he had knowledge of this loan and he had knowledge of his liability. The EMIs was auto deducted from his account. Later on, when he informed the bank, they assured him to close his loan account after sometime but till then EMIs were deducted. Dw1 admitted that the quadripartite agreement that he had signed, had the complainant bank as one of the party and stated that it is a separate agreement from Ex. CW1/DX-1. He denied that he had signed the disbursal letter alongwith the agreement. He had informed the bank on next day when he got message of disbursal. Thereafter, defence evidence was closed.
11. Having heard the contention of learned counsel's and pursued the material on record as well as judgemnt as cited. Ld. Counsel for parties also filed written submissions.
CONTENTIONS OF COMPLAINANT
12. Ld. Counsel for complainant argued that the accused had availed Home Loan from the complainant bank vide Loan Agreement and other relevant documents. This fact has been corroborated by accused himself when he CC NO. 27288/18 Axis Bank Ltd Vs. Yogendra kumar 9 /34 10 admitted in his cross-examination by stating that " he had signed quadripartite agreement wherein complainant bank was the party." However, ld. Counsel for accused did not put any suggestion to the CW1 towards the veracity of the loan agreement and hence , the veracity of the loan agreement remained unchallenged. The accused himself stated in his application u/s145 (2) of NI Act that on 27.7.2016 executed agreement for allotment of a residential flat with M/S SAHA Infrateh Pvt. Ltd. (confirming party/Lessee) and cheques in question alongwith certain other undated cheques were issued by the accused in accordance with arrangements made for loan against mortgage made between the parties in terms of the quardripartite Agreement dated 27.7.2016, entered into by the accused ( borrower), M/S Saha Infractech Pvt.Ltd ( builder) , M/S Logix City Developers Pvt. Ltdf.(The lessee) and M/S Axis Bank Ltd. ( the lender)
13. It is further contended by ld counsel for the complainant that loan amount of Rs.76,38,205/- was disbursed to the accused and this fact is corroborated with the letter of accused dated 31.5.2017, requesting for cancellation of the booking of the allotted unit, sent to the Director of Saha Infractech Pvt. Ltd, himself stated that " loan of INR 76,38.205.00/- has been obtained from Axis Bank Noida RAC. Thus, the complainant has proved that the loan was disbursed to the accused. The loan amount was to be repaid in 18 years through EMIS. This fact has also been proved by the deposition of accused as DW1 where he stated that " for some time, 16 EMIS amount kept on deducting from his account towards repayment of loan. Then he wrote a mail to bank and builder to tell them to cancel the CC NO. 27288/18 Axis Bank Ltd Vs. Yogendra kumar 10 /34 11 loan as he was not able to pay the loan amount." Not only this, the accused in his cross examination again admitted that, the EMIs have been paid from his account towards the loan account for which cheques in question has been filed.
14. Further submitted that accused did not initiate any loan process with complainant bank and his signatures has been forged and complainant bank played a fraud with him. Despite aware about the alleged fraud played by complainant bank, the accused did not made any complaint or taken any legal step against the complainant which is an admitted fact as per deposition made by accused in his cross exaination stating that " it is correct that no written complaint was filed for forgery of his documents in the police station". The accused also did not dispute about the correctness and genuineness of cheques returning memos in his statement u/s 294 cr.p.c and postal receipts forming part of Ex. CW1/5.
15. Further, the accused admitted his signatures on the cheques in question at the time of framing of notice u/s 251 cr.p.c. The service of legal notice is also admitted by the accused in his statement u/s 313 cr.p.c though, he denied the same in notice u/s 251 cr.p.c despite that no reply to the notice was sent to the complainant nor the accused availed any legal remedy to rebut the same. Ld. Counsel for complainant also contended that the accused has failed to rebut the presumption u/s 141 of N I Act and relied on judgment in P Rasiya Vs. Abxul Nazer and Anr of Supreme court in Crl. Appeal no. 1233-1235 of 2022 ( arising out of SLP (crl) Nos 7430- 7430-7432/2022 where in it has been held:
CC NO. 27288/18 Axis Bank Ltd Vs. Yogendra kumar 11 /34 12 "....in the complaint, the complainant has not specifically stated the nature of transactions and the source of fund. However, the High Court has failed to note the presumption under Section 139 of the N.I Act. As per Section 139 of the N. I Act, it shall be presumed, unless the contrary is prove, that the holder of a cheque received the cheque of the nature referred to in Section 138 for discharge, in whole or in part, of any debt or other liability. Therefore, once the initial burden is discharged by the complainant that the cheque was issued by the accused and the signature and the issuance of the cheque is not disputed by the accused, in that case, the onus will shift upon the accused to prove the contrary that cheque was not for any debt or other liability. The presumption under Sectiion 139 of the NI Act is a statutory presumption and thereafter, once it is presumed that the cheque is issued in whole or in part of any debt or other liability which is in favour of the complainant/ holder of the cheque, in that case, it is for the accused to prove the contrary."
CONTENTION ON BEHALF OF ACCUSED.
16. Per contra, ld. Counsel for accused submitted that complainant case is with regard to bouncing of cheques and did not disclosed by the complainant bank for which purpose accused had issued the cheque. It is further contended that the complainant did not disclose anywhere whether CC NO. 27288/18 Axis Bank Ltd Vs. Yogendra kumar 12 /34 13 amount of cheques was for the EMIs cheques, or the Arrears cheques of loan amount or for the full and final loan amount as no calculation has been furnished by the complainant. The complainant bank had disbursed the loan amount /DD in favour of the builder nor in the account of the accused. It is further contended that the complainant bank also filed a case in the DRT for the recovery of the loan from the accused as well as here too. The accused time and again stated in notice u/s 251 cr.p.c and his statement on oath u/s 313 cr.p.c that he had not taken any loan from the complainant bank and entered into agreement with the builder "Saha Infratech" and cheques in question were given to the representative of the builder of Saha Infratech. However, accused do not know whether the complainant was also involved in the transaction with the builder. The accused admitted his signature on the cheques in question and stated that no other particulars have been filed by him. AR of the complainant as CW1 did not corroborate the case of the complainant as he has stated that " Loan was not granted in his presence. " The present loan was tripartite loan Agreeent between the complainant , builder and accused". CW1 denied that agrrement was quadpartite but later on when he was confronted with loan EX CW1/DX-1 which was Quardpartite Agreement CW1 stated that the agreement is as per record. Thus, it is clear from the deposition of CW1 that complainant witness is not competent witness and not reliable witness as he does not have the knowledge of the present case. Not only this, CW1 during his cross examination stated that he does not aware about the mails sent by accused with regard to disbursement of loan vide Ex. CW1/DX2 . Even CW1 on one hand, stated that loan was not granted in his presence on the other hand, he stated that CC NO. 27288/18 Axis Bank Ltd Vs. Yogendra kumar 13 /34 14 tripartite loan agreement was signed lateron , on being shown loan agreement which was a quadpartite agreement. When the loan agreement was not filed by the complainant on judicial file than how it is matter of record and it was accused who filed the loan agreement to confront the CW1. CW1 stated in his cross examination that "he has no knowledge as to whether what security was taken at the time of sanctioning the loan. On the other hand, he replied to the question that the cheques were issued as liability and he received the cheques when the cheques had bounced from the legal department. When CW1 does not know what security was taken from the accused at the time of taking loan, how he can say that the cheques were issued towards security or liability when the same were not issued in his presence. Neither any loan account statement was filed by the complainant nor statement of arrear of amont pending is filed. Even after seeing the loan statement, CW1 stated that arrears of the cheques are not mentioned in the account statement Ex. CW1/DX3 filed by the accused rather the cheques get bounce in the SLFIT account of the bank and it is matter of record whether the cheques in question are in relation to the loan agreement. Ld. Counsel for accused contended that CW1 in order to conceal the received payment from accused, the complainant intentionally did not file statement of loan account. It is further contended that as per deposition of CW1 who stated during his cross examination that the loan amount was approximately Rs.76 lakh and the loan was tobe given in 18 years through EMI starting from 2018 to 2036. But the complainant bank had started receiving payment from June 2016 as per account statement Mark CW1/DX-3. CW1 has stated that after the loan recall notice, it is the liability of the customer to pay full and final loan CC NO. 27288/18 Axis Bank Ltd Vs. Yogendra kumar 14 /34 15 amount . All the three cheques in question are of Rs. 2,39,762/- each ( Rs. 2,39,762 X 3= 7,19,286 ) and when CW1 was asked why loan recall notice was not placed on the judicial record. He replied that it is not required. It is further stated that CW1 was asked a question " What is the liability of the accused regarding the three cheques in question and how have you calculated it ? In reply , CW1 stated that the cheques in question have been filed as per liability of the accused which was there at the time of filing of the cheques. The complainant could not prove the outstanding liability of the accused nor brought on record whether the cheques were towards default of EMIS or for arrears. Statement of account filed by accused clearly show about receiving of payment and accused was never declared NPA till filing of the cheque bouncing case and the complainant bank was receiving payment after the filing of the present case. The accused relied on documents filed during his examination such as receiving of cheques by Mr. Naveen Chaudhary mark DEW1/1, Email sent to Axis bank Ex DW1/2 dated 27.5.2016 and 28.5.2016 for not releasing the DD to Saha Infra Tech Pvt.Ltd. Without his instruction, copy of notice for cancellation of booking of allotment Ex. DW1/3 to Saha Infratech Pvt. Ltd. dated 31.5.2017 and 26.4.2018, copy of letter sent to the bank about the cancellation of the booking from the Saha Infratech Pvt.Ltd. Dated 14.6.2017 and thereafter, the accused received the payment from the builder for non-cancelling the booking of the flat and promise to pay some amount as well as EMI to the complainant bank so, accused also relied on statement of account with regard to payment received from builder by the complanant bank as Ex. DW1/4. The Ex. DW1/4 clearly reflecting that the accused had received payment from the builder on CC NO. 27288/18 Axis Bank Ltd Vs. Yogendra kumar 15 /34 16 4.2.2017 through NEFT of Rs.1,56,790/- and Rs.78,395/- on 8.3.2017. As the builder assured that he will make further payment directly to the bank. In order to show good intention about the loan, accused has filed loan account statement mark as CW1/DX-3 and EX Dw1/5. The accused denied his signature on Ex CW1/DX-1 and stated that the same were forged.
17. Ld. Counsel for accused further submitted that present case is based on three cheques and burden to prove the outstanding liability was on the complainant but the complainant bank has not able to prove how the accused owe the liability of the cheques in question. When CW1 was asked about the knowledge of present case, he said " I am aware" but on very next question, he said loan was not given in his presence and he is not able to tell the type of agreement executed between the parties. It is the accused who had filed Loan Agreement, Loan Account statement, Loan recall notice and calculation regarding the arrears to show how the accused was liable to pay though, all the said documents should be filed by the complainant but the same were filed by accused to prove his innocence and good intention. It is further contended that if Loan recall notice is issued to the customer, the customer has to pay full and final payment but the said notice was not filed on record it means no such notice was sent to the accused by the complainant with some ulterior motive. The complainant filed the cheques in question of amount of Rs.2,39,762/- each which is neither against full and finall payment nor the said amount against EMIS. Even otherwise, the complainant has not filed calculation nor mentioned the same at anywhere. The complainant opted not to file the CC NO. 27288/18 Axis Bank Ltd Vs. Yogendra kumar 16 /34 17 said documents show that without adjusting paid amount and without calculating balance amount, the complainant has filed the present complaint only to extort more money. Thus, the accused has completely rebutted the presumption u/s 118 and 139 NI Act and relied on judgment Kumar Exports Vs.Sharma Carpets (2009) 2 SCC 513 wherein while discussing the contents of Section 118(a) r/w 139 of the Act , the Hon'bleCourt has held interalia the following:
"14.Section 139 of the Act provides that is 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"
"15. Applying the definition of the word" proved" in section 3 of the Evidence Act to the provisions of sections 118 and 139 of the Act, it becomes evidence that in a trial under section 138 of the Act a presumption will have to be made that every negotiable instrument was made or drawn for consideration." and that it was executed for discharge of debt or liability once the execution of negotiable instrument is either proved or admitted. As soon as the complainant discharges the burden to prove that the instrument, say a note, was executed by the accused, the rules of presumptions under sectioin 118 and 139 of the Act help him shift the burden on the accused. The presumption will live, exist and survive and shall end only when the contrary is proved by CC NO. 27288/18 Axis Bank Ltd Vs. Yogendra kumar 17 /34 18 the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability.A presumption is not in itself evidence, but only makes a prima facie case for a party for whose benefit it exists."
18. Ld. Counsel for accused also relied on reportable judgment Dashrathbhai Trikambhai Patel Vs. Hitesh Mahendrabhai Patel & Anr Crl.Appeal 1497 of 2022 on the point that the complainant has filed the present case without making endorsement of payment made by the accused. So far as demand notice is concerned, the complainant demanded only total amount of three bounced cheques in question without clarifying the liability enforceable on the accused for paying cheques amount at the time of filing of the present case and relied the above said judgment wherein it was held as follows;
" Section 56 stipulates that if there is an endorsement on a negotiable instrument that a part of the sum mentioned in the cheque has been paid, then the instrument may be negotiated for the balance. Section 56 reads as follows:
"56. Indorsement for part of sum due.- No writing on a negotiable instrument is valid for the purpose of negotiation if such writing purports to transfer only a part of the amount appearing to be due on the instrument; but where such amount has been partly paid a note to that effect may be indorsed on the instrument, which may then be negotiated for the balance."
CC NO. 27288/18 Axis Bank Ltd Vs. Yogendra kumar 18 /34 19
27. Section 15 defines the phrase 'indorsement' as follows:
"15. Indorsement.- When a maker or holder of a negotiable instrument signs the same, otherwise than as such maker, for the purpose of negotiation, on the back or face thereof or on a slip of paper annexed thereto, or so signs for the same purpose a stamped paper intended to be completed as a negotiable instrument, he is said to indorse the same, and is called the "indorse".
It is further draw the attention of para 30 of the said judgment which is as follows :
" When a part or whole of the sum represented on the cheque is paid by the drawer of the cheque, it must be endorsed on the cheque as prescribed in Section 56 of the Act. The cheque endorsed with the payment made may be used to negotiate the balance, if any. If the cheque that is endorsed is dishonoured when it is sought to be encashed upon maturity, then the offence under Section 138 will stand attracted"
19. It is further contended that in the present case, complainant did not issue the loan demand notice but issued only cheques amount demand notice without clarification how, they calculated the same. As per statement of CW1, stated that no loan demand notice was sent. Apart from this, there is nowhere mention by the complainant that at the time of presenting the cheques, whether the accused was having any liability. The complainant has also not followed provision of section 56 read with Section 15 of the Act as per which an endorsement may be made by recording the part-payment of the debt in the cheque or in a note appended to the cheque without which, offence u/s 138 NI Act does not attracted and prayed CC NO. 27288/18 Axis Bank Ltd Vs. Yogendra kumar 19 /34 20 that, the accused may be acquitted as he has proved its case beyond all resonable doubt.
20. Having considered the rival submissions, material on record and perused the judgment relied upon.
LEGAL DISCUSSION
21. To bring home a liability under section 138 of NI Act, 1881, following elements must spring out from the averments in the complaint and the evidence adduced by the complainant, viz.
1. A person must have drawn a cheque on an account maintained by him in a bank for payment of a certain sum of money to another person from out of that account for the discharge of any legally enforceable debt or liability;
2. The cheque has been presented to the bank within a period of three months from the date mentioned on the cheque or within the period of its validity, whichever is earlier;
3. The cheque is returned by the bank unpaid either because the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank;
4. The payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing to the drawer of the cheque within 40 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;
5. The drawer of such cheque fails to make the payment to the payee or the holder in due course of the cheque within 15 days of the receipt of the notice.
CC NO. 27288/18 Axis Bank Ltd Vs. Yogendra kumar 20 /34 21 Lone Advanced 22 . The accused has taken plea that he has not approched the complainant bank for taking home lone. His defence has also been corroborated by CW1 in his cross examination when he stated that " loan was not given to the accused in his presence." The plea of defence of accused is that the alleged loan amount was not disbursed in his account however, the loan was disbursed vide DD in the account of builder. M/S Saha Infratech pvt. Ltd. to whom he had given the alleged cheques through his official namely Naveen for booking of the allotted unit and not to the complainant. This plea has also been corroborated by the accused with letter dated 31.5.2017 sent to the Director of Saha Infratech Pvt. Ltd. asking refund of his payment and the loan amount of Rs.7638205.00/- to the complainant bank and it proves that the loan amount was disbursed in favour of the builder Saha Infratech Ltd. and he had to pay the loan amount. Accused has also rebutted his defence with letter issued by him on4.6.2017 to Branch Manager of complainant bank wherein he has also mentined that the said loan amount was credited to Saha Infratech Pvt. Ltd. against the alleged loan accouont no. PHR036101882. It has also been informed in the said letter that booking of said flat has been cancelled and required to recover the loan amount from the builder and not from the accused alongwith copy of cancellation request letter. Accused has also filed statement of account of his account wherein he had received back payment from the builder on 4.2.2017 of Rs.1,56,790/- and Rs.78395/- on 8.3.17 by way of bank transfer. Not only this, the accused has also filed CC NO. 27288/18 Axis Bank Ltd Vs. Yogendra kumar 21 /34 22 statement of account of complainant bank showing payment made till 9.1.2020 even after the date of bouncing of cheques in question. It is made clear that the accused was kept on making payment even after bouncing of cheques. The stand of accused also proved as taken in statementu/s 313 cr.p.c and notice u/s 251 cr.p.c that he paid some installments and kept informing the bank to recover the loan from the builder. The Complainant has also not made party in the present case as borrower /co borrower of the loan amount. The complainant has also did not bring any oral or documentary cogent evidence on record to rebut the documents filed by the accused in its defence .
Signature on Loan Agreement
23. So far as loan agreement signed by accused is concerned, the defence of accused is that he did not sign the same and same is forged. Even the deposition of CW1 Vikas Kumar is not reliable on this point as he stated that the present loan was a tripartite loan agreement between complainant, builder and accused. It is denied that it was quadrapartite agreement. Immediately on the next question when he was shown agreement Ex. CW1/DX-1 for confrontation, CW1 stated that "the agreement is as per record". CW1 is also not aware about the email sent by the accused to the complainant bank. CW1 is not a trustworthy witness as he has given contradictory statement. Once he denied that he is not having knowledge of loan transaction and case is filed only on the bouncing of PDCs. Immediately he stated that "sanctioning of loan is other department and disbursement of loan is another department" It clearly shows he is not CC NO. 27288/18 Axis Bank Ltd Vs. Yogendra kumar 22 /34 23 aware of the facts of the case and deposed only as AR of the complainant witness without knowledge of complete facts. He even did not mention anywhere in his evidence by way of affidavait as to how the accused was liable to pay the cheques amount whether it is towards EMI or balance amount or loan alleged amount. Contrary, the accused has proved the defence by way of documentary evidence produced in his defence during cross examination of CW1. CW1 also admitted that he has not filed any loan recall notice on record.
LEGAL NOTICE
24. As per deposition of CW1, loan demand notice was sent before the bouncing of cheque and he has not filed same in the court file as it is not required in cheque bouncing case" When, the alleged loan demand notice is not filed on record, then how Ex. CW1/4 legal demand notice came on record though, he himself exhibited the same in his evidence by way of affidavit. It also shows that CW1 signed the affidavit of evidence without go through the same and without his proper knowledge of the present case. Thus, the accused has also rebutted the same that the present case was filed only on the bounced PDCs and not against the loan.
LIABILITY OF ENFORCEABLE DEBT RECOVERED
25. The complainant has also failed to prove that how the accused was liable to pay the cheque amounts. The complainant has no where made any clarification/ calculation for what purpose, the accused had issued the said CC NO. 27288/18 Axis Bank Ltd Vs. Yogendra kumar 23 /34 24 cheques. The complainant has also not mentioned the amount of EMIs of the loan amount recoverable from the accused nor it is mentioned that the cheques were towards balance amount of loan amount or arrears of EMIs due towards the accused. It clearly reflects that the complainant used PDCs cheque only to recover the money. In statement of accused stated that he had got the loan application form which he got through DRT seems to be correct.
26. In this regard, reliance can also be placed on judgment Dashratbhal Trikambhal Patel Vs. Hitesh Mahendrabhai Patel and others. Crl. A. No. 1497/2022 dated 11.10.2022, 2022 Live Law (SC) 830 wherein it is held in para 29 that:
" Under Sectiion 56 read with Section 15 of the Act, an endorsement may be made by recording the part-payment of the debt in the cheque or in a note appended to the cheque. When such an endorsement is made, the instrument could still be used to negotiate the balance amount. If the endorsed cheque when presented for encashment of the balance amount is dishonoured, then the drawee can take recourse to the provisions of Section
138. Thus, when a part- payment of the debt is made after the cheque was drawn but before the cheque is encashed, such payment must be endorsed on the cheque under Section 56 of the Act. The cheque cannot be presented for encashment without recording the part payment. If the unendorsed cheque is dishonoured on presentation, the offence under Section 138 CC NO. 27288/18 Axis Bank Ltd Vs. Yogendra kumar 24 /34 25 would not be attracted since the cheque does not represent a legally enforceable debt at the time of encashment."
27. The said view is endorsed by the Hon'ble Apex court in a plethora of decisions, one being, Kali Ram v. State of Himachal Pradesh 91973) 2 SCC 808 wherein it been held that:
" ... The onus even in such cases upon the accused is nto as heavy as is normally upon the prosecution to prove the guilt of the accused. If some material is brought on the record consistent with the innocence of the accused which may reasonably be true, even though it is not positively proved to be true, the accused would be entitled to acquittal"
28. Reliance can also be placed on the judgment delivered by Hon'ble High Court of Karnataka, Bengaluru in Writ Petition No. 17696/2021 (GM-RS) wherein para no.4 at page no.65 (c), it was held that :
"A conjoint reading of various clauses in the Tripartite Agreement makes it very clear that even when the booking/allotment is cancelled and as a on sequence thereof, borrowers' obligation to serve the debt evaporates into thin air, the interest of lending agency is protected, provided that the sanctioned housing loan was released to the Developer only after ascertaining stagewar construction of the apartments, in terms of extant RBI Guidelines and Circulars issued by National Housing Bank. One such National Housing Bank Circular dated 18.11.2013 (at paragraphs 2 & 3) reads as under:
CC NO. 27288/18 Axis Bank Ltd Vs. Yogendra kumar 25 /34 26 "2. These housing loan products are likely to expose the HFCs as well as their home loan borrowers to additional risks, e.g. in case of disputes between individual borrowers and developers/builders, default/ delayed payment of interest/EMI by the developer/builder during the agreed period on behalf of the borrower, non completion of the project on time, etc. Further it was held that ..... "providing guidelines to the housing financing institutions to ensure their growth on sound lines."
29. In 67 (h) it was observed that in RAMA KISHORELAL Vs. KAMAL NARAIAN 1963 Supp 2 SCR 417, it was observed that If construction of the kind advanced on behalf of PNBHFL is accepted, the clause specifically engrafted for protecting the interest of borrowers would be rendered nugatory. The followingextract from Chitty on Contracts, General Principles,27 th Editiion, Volume -1 581-587 (1994) is also worth adverting to:
"...Every contract is to be construed with reference to its object and the whole of its terms and accordingly, the whole context must be considered in endeavoring to collect the intention of the parties, even though the immediate object of inquiry is the meaning of an isolated word or clause. It is a true rule of construction that the sense and meaning of the parties in any particular part of an instrument may be collected ex antecedentibus et consequentibus; every part of it may be brought into action in order to collect from the whole one CC NO. 27288/18 Axis Bank Ltd Vs. Yogendra kumar 26 /34 27 uniform and consistent sense, if that may be done. And so Lord Davey said in N.E RAILWAYS vs. HASTINGS, quoting Lord Watson: The deed must be read as a whole in order to ascertain the true meaning of its several clauses, and the words of each clause should be interpreted as to bring them into harmony with the other provisions of the deed if that interpretation does no violence to the meaning of which they are naturally susceptible."
Further it was held in 71 (g) This Court hastens to add that the constitutional mandate for fairness in the acts of instrumentalities of 'State' under Article 12, respondent PNBHFL answering this description, will fail, if they are not animated by the elements of justice & fairplay. What Professor Upendra Baxi writes referring to John Rawl's 'Theory of Justice' in treating the singularity of justice & fairness, is worth quoting:
"I do not, naturally mean that fairness and justice are magic wands or that conscientious justices will entertain any one single or univocal conception of it... But what I am urging is an approach under which courts will not ask: "How do we balance the need for administrative efficiency with fairness to the individuals affected?" Rather, they will ask: "Is the action fair? If it is, is it not by the same token efficient? If not, must we foster a conception of efficiency which generates incidence of unfairness?" Only when justice or fairness is seen to be an integral aspect of the value of efficiency (or vice versa) will we have a bureaucratic culture more responsive to CC NO. 27288/18 Axis Bank Ltd Vs. Yogendra kumar 27 /34 28 citizen's rights and status. Only when this happens will small man gain when the big fight forensic battles"
Further in 72 (i) it was held that the contention of PNBHFL that the case of petitioners arises under a private loan agreement andtherefore they should be relegated to ordinary civilremedy, is not tenable. Reasons are not far to seek:
Firstly, PNBHFL is not a private lending agency and it functions inter alia under the umbrella of the National Housing Bank Act, 1987 whose preamble reads as under:
"An Act to establish a bank to be shown as a National Housing Bank to operate as a principal agency to promote housing finance institution both at the local and regional levels and to provide financial and other support to such institutions and for matters connected therewith are incidental thereto".
30. Therefore, the Tripartite Agreement cannot be said to being the exclusive realm of private law of contract. The PNBHFL is an instrumentality of State in the light of R.D.SHETTY vs. INTERNATIONAL AIRPORT AUTHORITY AIR 1978 SC 1628 Added, the impugned action & in action of the PNBHFL far transcend the limits of private law by any public lawstandard. Thus, the loan transactions of the kind are animated by abundant elements of public law. The provisions of section 14 of the 1987 Act lend credence to this view, its clause (ba) being texted as under:
CC NO. 27288/18 Axis Bank Ltd Vs. Yogendra kumar 28 /34 29 "making of loans and advances for housing or residential township-cum-housing development or slum clearance projects;"
31. The version of petitioners gains support also from theobservations in GUJARAT STATE FINANCIAL CORPORATION vs. LOTUS HOTELS PVT. LTD(1983) 3 SCC 379 wherein paragraph 12 reads as under:
"Viewing the matter from a slightly different angle altogether it would appear that the appellant is acting in a very un-reasonable manner. It is not in dispute that the appellant is an instrumentality of the Government and would be other authority' under Article 12 of the Constitution. If it be so, as held by this Court in R.D. Shetty vs. The International Airports Authority of India & Ors. the rule inhibiting arbitrary action by the Government would equally apply where such corporation dealing with the public whether by way of giving jobs or entering into contracts or otherwise and it cannot act arbitrarily and its action must be in conformity with some principle which meets the test of reason and relevance."
PHOENIX ARC PRIVATE LIMITED vs. VISHWA BHARATI VIDYA MANDIR (2022) 5 SCC 345 would not come to the rescue of his clients, the observations therein being facts specific. It hardly needs to be stated that a case is an authority for a proposition that it lays down in the fact matrix of a given case and not for all that which logically follows from what has been so laid down vide QUINN vs. LEATHAM(1901)AC 495 CC NO. 27288/18 Axis Bank Ltd Vs. Yogendra kumar 29 /34 30 Even the Apex Court echoed this view in ABL INTERNATIONAL LIMITED vs. EXPORT CREDIT GUARANTEE CORPN. OF INDIA LIMITED9. The Magna Carta (1215) which is considered to be a foundational document of constitutional jurisprudence world over, at stanza 40 declares:
"Nulli vendemus, nulli negabimus, aut differenmus, rectum aut justiciam:To no one will we sell, to no one will we deny or to no one we shall delay right or justice." A stanza like this is a North Star for Courts to sail through to the destination in the vast ocean of laws.
The above gains support from the recent decision of the Apex Court in RADHA KRISHNA INDUSTRIES vs. STATE OF HIMACHAL PRADESH. 2021 SCC On Line SC 334 A view to the contra would defeat the broad conferment of writ remedies constitutionally internalized freeing the system from the traditional shackles of English Law, as is evident from the Constituent Assembly Debates Constituent Assembly Debates, Volume VII, 9th December 1948. Otherwise, our Constitution would be only a 'Continental jargon'. What ustice Oliver Wendell Holmes observed in DAVIS vs. MILLS 194 US 451 (1904) is apt:
"Constitutions are intended to preserve practical and substantial rights, not to maintain theories ..."
In M/S NITESH RESIDENCY HOTELSPVT.LTD vs. UNION OF INDIA W.P.No.2004/2022 disposed off on 8.8.2022 in support of his contention that where disputed facts are involved in a case of banking transaction, resort to writ remedy is misconceived. That was a case involving a private bank whose CC NO. 27288/18 Axis Bank Ltd Vs. Yogendra kumar 30 /34 31 impugned action did not have any public law indicia and that the matter was perfectly in the realm of loan contract that did not have any statutory flavour unlike the case of petitioners herein. This court made it one of the grounds to deny relief to the litigant therein. However, the facts of this case are miles away from it, as already discussed above. Therefore, much milk cannot be derived from the said decision. Added, much of the so called 'disputed questions of facts' has withered away because of orders of the RERA though PNBHFL was not a party eo nomine thereto. The operative portion of one such order is worth reproducing:
"(b) The Developer is hereby directed to return the own contribution amount...to the complainant within 30 days from today. If not it will carry interest @10.25% from 31st day. (d) The Developer is hereby directed to discharge the loan raised in the name of the complainant with all its EMI and interest, if any. (f) The complainant is hereby directed to execute the cancellation deed in favour of the Developer after the entire amount has been realized..."
32. In view of the discussion above, I summarise my findings below:
1) The complainant could not rebut the defence of accused and accused defence remained unrebutted. The complainant also suppressed the true fact by receiving part payment of outstanding amount against the accused which creats dent in the prosecuting and benefit of doubt also goes in favour of the accused.
CC NO. 27288/18 Axis Bank Ltd Vs. Yogendra kumar 31 /34 32
2) For the commission of an offence u/s 138, the cheque that is dishonoured must represent a legally enforeceable debt on the date of maturity would not be the sum represented on the cheque;
3) When a part or whole of the sum represented on the cheque is paid by the drawer of the cheque , it must be endorsed on the cheque as prescribed in Section 56 of the Act. The cheque endorsed with the payment made may be used to negotiate the balance, if any, if the cheque that is endorsed is dishonourd when it is sought to be encashed upon maturity, then the offence under Section 138 will stand attracted. But in the present case nothing such happend.
33. In the present case, the accused made part payment and complainant who did not mention about part payment made by the accused by complying the provision u/s 56 of the NI Act. Even otherwise, as per judgment relied on by the ld. Counsel for accused titled as Dashratbhal Trikambhal Patel Vs. Hitesh Mahendrabhai Patel and others. Crl. A. No. 1497/2022 dated 11.10.2022, 2022 Live Law (SC) 830 support the contention for the accused. Thus, the complainant has not been able to prove that the cheque in question was issued by the accused for discharge of legally enforceable liability/ debt as on the date of the cheque and hence the foremost ingredients of offence punishable u/s 138 of NI Act is not established.
34. In the above caption judgment (supra), it has also been stated that in para 16 that:
CC NO. 27288/18 Axis Bank Ltd Vs. Yogendra kumar 32 /34 33 "The judgments of this court on post-dated cheques when read with the purpose of Section 138 indicate that an offence under the provision arises if the cheque represents a legally enforceable debt on the date of maturity. The offence under Section 138 is tipped by the dishonour of the cheque when it is sought to be encashed. Though a post-dated cheque might be drawn to represent a legally enforceable debt at the time of its drawing, for the offence to be attracted, the cheque must represent a legally enforceable debt the time of encashment. If there has been a material change in the circumstance such that the sum in the cheques does not represent a legally enforceable debt at the time of maturity or encashment then the offence under Section 138 is not made out".
35. The onus thus shifts on the complainant and the rebuttable presumption of law under section 139 NI Act thus vanishes. The complainant has now to prove that he had advanced loan to the accused and the cheque in question was issued by the accused in discharge of legally enforceable debt.
36. Keeping in view the aforesaid discussion and judgment cited, the complainant failed to prove its case against the accused beyond reasonable doubt as the ingredient of 138 NI Act could not be corroborated with the material placed on record by the complainant in absence of proving the same with cogent evidence. Thus, as there is no incriminating evidence brought on record by the complainant against the accused, the influence of pre-ponderance of probability could not be drawn in favour of the CC NO. 27288/18 Axis Bank Ltd Vs. Yogendra kumar 33 /34 34 complainant. As such the Court has come to the conclusion that the complainant has failed to prove its case against the accused beyond any shadow of doubt. Accordingly, accused Sh. Yogendra Kumar s/o Late Sh. Bindeshwari Singh is acquitted for offence puishable u/s 138 NI Act qua the cheques in question.
37. This judgment contains 34 pages in number and every page of this judgment is signed by me with dated.
Announced in the open Court on 3rd day of May, 2023.
(DR. SATINDER KUMAR GAUTAM) SPECIAL COURT (NI ACT) SOUTH-WEST, DWARKA 03.05.2023 CC NO. 27288/18 Axis Bank Ltd Vs. Yogendra kumar 34 /34