Delhi District Court
Amit Kumar Yadav vs Shanti Swaroop Arora on 30 March, 2022
IN THE COURT OF MR. RAHUL VERMA
METROPOLITAN MAGISTRATE - 07, SOUTH EAST DISTRICT,
SAKET COURTS, NEW DELHI
Amit Kumar Yadav
S/o Shri Dal Chand Yadav
R/o WZ-206A, Madipur, New Delhi-63 ... Complainant
Vs.
Shanti Swaroop Arora
Flat No.130, SFS Flats,
Punjabi Bagh Apartments
Madipur, New Delhi-63 .... Accused
Complaint Case number : 6324/2017
Date of Institution of Complaint : 31.05.2017
Offence Complained of : Section 138 N.I. Act
Plea of Accused : Not Guilty
Date on which reserved for judgment : 23.03.2022
Final order : Conviction
Date of Decision : 30.03.2022
JUDGMENT
1. Vide this judgment, this court shall dispose of the present complaint filed by Amit Kumar Yadav [hereinafter referred to as 'Complainant'] against Shanti Swaroop Arora [hereinafter referred to as 'Accused'] under Section 138 of Negotiable Instruments Act, 1881 for dishonour of cheques bearing number 137779 dt. 01.04.2017, 137782 dt. 05.04.2017 & 146758 dt. 10.04.2017, all drawn on Syndicate Bank.
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2. Briefly stated, it is the case of the complainant that the accused borrowed a sum of Rs.1,00,000/ from the complainant on 07.03.2015 and thereafter another Rs.1,00,000/ on 14.05.2015 as friendly loan. That the accused again approached the complainant for a friendly loan of Rs.3,00,000/ for making payment to his supplier company and on the assurance given by the accused for repayment of loan amounts, the complainant advanced further loan of Rs.3,00,000/ to accused on 09.06.2015 as friendly loan. That in March 2016, the accused handed over to the complainant two post dated cheques for Rs.1,00,000/ each bearing cheque numbers 137779 dated 01.04.2017 and 137782 dated 05.04.2017, both drawn on Syndicate Bank, West Punjabi Bagh, Central Market, New Delhi26. That in discharge of his liability for the repayment of loan of Rs.3,00,000/ in August 2016, the accused handed over a post dated cheque bearing no.146758 dated 10.04.2017 drawn on Syndicate Bank, West Punjabi Bagh, Central Market, New Delhi. That when the complainant presented the above three cheques with his banker ie., Syndicate Bank, West Punjabi Bagh, Central Market, New Delhi, the said cheques were dishonoured and returned to the complainant vide two return memos dated 07.04.2017 & 11.04.2017 with remarks "FUNDS INSUFFICIENT." Thereafter, the complainant sent a legal notice of demand dated 02.05.2017 to the accused through his counsel by speed post and demanded the payment of the dishonoured cheques within 15 days from the receipt of the notice. The accused failed to comply with the requirements of said notice within the stipulated period. Thereafter, the complainant filed the present complaint praying that the accused be summoned, tried and punished for committing offence under Section 138 of the Negotiable Instrument Act, 1881.
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3. At the stage of presummoning evidence, the complainant examined himself as CW1 and led his evidence by way of affidavit Ex.CW1/A. He relied upon the following documents : S. No. Documents Exhibit number given 1 Cheque bearing no.13779 dated Ex.CW1/1 01.04.2017 for a sum of Rs.1,00,000/.
2 Cheque bearing no.137782 dated Ex. CW1/2 05.04.2017 for a sum of Rs.1,00,000/.
3 Cheque bearing no. 146758 dated Ex. CW1/3 10.04.2017 for a sum of Rs.3,00,000/ 4 Cheque (bearing no. 13779) return Ex.CW1/4 memo dated 07.04.2017 5 Cheque (bearing no. 137782) return Ex. CW1/5 memo dated 07.04.2017 6 Cheque (bearing no. 146758) return Ex. CW1/6 memo dated 11.04.2017 7 Legal notice dated 02.05.2017 sent to Ex. CW1/7 the accused.
8 Postal receipt Ex. CW1/8 9 Courier receipt Ex. CW1/910 Original Acknowledgement card Ex CW1/10 11 Speed post tracking report. Ex.CW1/11 12 Courier tracking report Ex. CW1/12
4. Upon service of summons, the accused entered appearance and notice under Section 251 Cr.P.C. was served upon him on 06.04.2018 to which the accused pleaded not guilty and claimed trial. Thereafter, his plea of defence was recorded wherein he admitted that the cheques bearing no.13779, 137782 and CC No. 6324/17 Amit Kumar Yadav v. Shanti Swaroop Arora Page no. 3 of 15 146758 were issued by him, but the same were issued to the father of the complainant as security cheques and not to the complainant, and that these cheques were misused by the complainant who then filed false case against him.
5. In complainant's evidence, the complainant adopted his presummoning evidence as his postsummoning evidence and relied upon the affidavit Ex.CW1/A alongwith the documents tendered with it being Ex. CW 1/1 to Ex. CW 1/12. Thereafter, upon application of the accused under section 145(2) of NI Act, the accused was allowed to crossexamine the complainant. The complainant was duly cross examined and thereafter, complainant evidence was closed and Statement of the accused under Section 313 Cr.P.C was recorded wherein all the incriminating evidence was put to the accused to which he replied:
"I have issued the cheques in question bearing no.137779, 137782 and 146758 but at the time of issuance of cheque to the father of the complainant Sh. Dal Chand, these cheques are given by me on account of security as I have taken Rs.2,40,000/ from him as a friendly loan. Thereafter, I made the payment for a sum of Rs.1,50,000/ and Rs.50,000/ dated 17.02.2016 and 29.02.2016 through cheques drawn on Syndicate Bank to clear my balance loan amount. Due to shortage of fund, I was unable to pay Rs.40,000/ to the father of the complainant. These cheques are in the possession of Sh. Dal Chand, father of the complainant. He also told me that these cheques were lost from his possession in the house and further ask me to stop payment the above said cheques as the complainant and his father stay in the same house. The complainant misused the lost cheques from his father's possession and filed a false case against me. I had received the legal notice dated 02.05.2017. The complainant misused the cheque given to his father and he misused the cheque from his father's possession and filed false case against me. That I can prove the transaction between me and his father CC No. 6324/17 Amit Kumar Yadav v. Shanti Swaroop Arora Page no. 4 of 15 Sh. Dal Chand as and when required by the Court. I have to pay Rs.40,000/ to Sh. Dal Chand, father of the complainant and nothing is payable to the complainant."
6. Thereafter, the accused opted to lead evidence in his defence and examined himself as DW1 and deposed that he had issued the cheques in question bearing no.137779, 137782 and 146758 to the father of the complainant Sh. Dal Chand on account of security as he had taken Rs.2,40,000/ from him as a friendly loan sometime in 2015. Thereafter, he made the payment within 0304 months for a sum of Rs.1,50,000/ and Rs.50,000/ dated 17.02.2016 and 29.02.2016 through cheques drawn on Syndicate Bank to clear his balance loan amount. He further deposed that due to shortage of fund, he was unable to pay Rs.40,000/ to the father of the complainant. He further deposed that these cheques were in the possession of Sh. Dal Chand, father of the complainant, and that he also told him that these cheques were lost from his possession in the house and he further asked him to stop payment of the above said cheques as the complainant and his father stay in the same house. He further deposed that the complainant misused the lost cheques from his father's possession and filed a false case against him. He admitted having received the legal notice dated 02.05.2017. He further deposed that he had to pay Rs.40,000/ to Sh. Dal Chand, father of the complainant and nothing was payable to the complainant. He relied upon Ex.DW1/A, copy of bank statement of complainant's father Mr. Dal Chand Ex.DW1/1, police complaint Ex.DW1/2 (colly), copy of postal receipt Ex.DW1/3. In his cross examination, DW1 deposed that the money as reflected in Ex. DW1/X2 may have come to his account as account no. 90112010170143 is in his name. Following documents were put to him in cross examination:
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(a) Ex. DW1/X1 and DW1/X2 (copy of cheque no.902323 and copy of account statement bearing no.90112010058602 of the complainant)
(b) Ex. DW1/X3 (cheque dt. 21.06.2016 issued by father of the complainant to the accused)
7. Accused further examined DW2 Anil Kumar Garg, Senior manager, Syndicate Bank, Punjabi Bagh, Delhi - 26, who proved statement of account bearing no. 90112010048368 in the name of Dal Chand Yadav and Veena Devi w.e.f. 01.08.2015 till 31.08.2016 Ex.DW2/1.
8. Thereafter defence evidence was closed vide order dated 03.12.2021 and the matter proceeded to the stage of final arguments.
9. Both the parties advanced final arguments. Ld. counsel for the complainant argued that the complainant has proved his case beyond reasonable doubt and the defendant failed to lead any probable defence and failed to rebut the presumption under Section 139 and Section 118 of NI Act. He accordingly argued that the accused may be convicted for offence under Section 138 NI Act.
10. Per contra, Ld. counsel for the accused has argued that the complainant has failed to prove that he has given any loan to the accused. He further argued that the particulars on the cheques in question were not filled by the accused.
Further, that the accused is stranger to the complainant and he never issued any cheque to the complainant and has no liability towards him. Accordingly, it is argued that the accused may be acquitted.
11. I have heard Ld. Counsels for the complainant and the accused and perused the case file.
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12. Before proceeding to the merits of the case, it is necessary to examine the law governing offence under Section 138 NI Act. Section 138 of the NI Act is read 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 provision of this Act, be punished with imprisonment for a term which may extend 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.
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13. Bare reading of the Section 138 of NI Act shows that in order to establish an offence under Section 138 of the Negotiable Instruments Act, the following ingredients are to be established by the complainant:
i. Cheque must have been drawn by the accused on an account maintained by him with a banker.
ii. Cheque must have been drawn for payment of any amount of money to another person for discharge, in whole or in part, of any debt or other liability.
iii. Said cheque is returned unpaid by bank for the reason that either 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. iv. The cheque must have 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.
v. The payee or holder in due course makes a demand for payment by giving notice in writing to the drawer of the cheque within 30 days of receipt of information by him from the bank regarding the return of cheque as unpaid.
vi. Drawer of the cheque fails to make the payment of the said amount to the payee or holder in due course of cheque within 15 days of said notice.
14. Here, it is also pertinent to refer to Section 118 (a) and Section 139 of the NI Act. Section 139 of the NI Act provides that unless the contrary is proved, the holder of a cheque shall be presumed to have received the cheque in discharge of any debt or other liability. Further, Section 118 (a) of the NI Act provides that unless the contrary is proved, a drawn up negotiable instrument, if accepted, has to be presumed to be for consideration. Therefore, these two provisions raises rebuttable presumption that the cheque was issued in discharge of a liability and was drawn for consideration.
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15. It was held by hon'ble Apex Court in Hiten P. Dalai v. Bratindra Nath Bannerjee, (2001) 6 SCC 16, that it is obligatory on the part of the court to raise presumption under sections 118 and 139 of NI Act in every case where factual basis for raising of the presumption has been established. In Rangappa v. Sri Mohan, (2010) 11 SCC 441, hon'ble Apex Court held that where the fact of signature on the cheque is acknowledged, a presumption has to be raised that the cheque pertained to a legally enforceable debt or liability, however, this presumption is of a rebuttal nature and the onus is then on the accused to raise a probable defence.
16. It is clear from the aforesaid proposition of law that once the accused has admitted the issuance of cheque which bears his signature, there is presumption that there exists a legally enforceable debt or liability under Section 139 of the NI Act. However, such a presumption is rebuttable in nature and the accused may lead evidence to rebut such presumption. It was held by the Hon'ble Supreme Court in Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513 that:
"20...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 nonexistence 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 CC No. 6324/17 Amit Kumar Yadav v. Shanti Swaroop Arora Page no. 9 of 15 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 nonexistence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on to the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arising under Sections 118 and 139 of the Act."
17. Now, coming to the merits of the present case, it is the case of the complainant that he advanced friendly loan of Rs. Rs.5,00,000/ to the accused, and in discharge of this liability the accused issued three cheques dt. 01.04.2017, 05.04.2017 and 10.04.2017 which got dishonoured. Perusal of record shows that the signature on the said cheques are admitted by the accused. Further, it is clear from the three return memos Ex.CW1/4, Ex.CW1/5 and Ex.CW1/6 dated 07.04.2017, 07.04.2017 and 11.04.2017 respectively, that the said cheques were returned unpaid due to insufficiency of funds. It is also clear from the legal notice dated 02.05.2017 and postal receipt that legal demand notice was also served upon the accused within 30 days from the receipt of information from the bank regarding dishonour of cheques. Further, it is not disputed that the accused failed to make the requisite payment within 15 days of receipt of aforesaid notice. Clearly, all the basic ingredients of Section 138 are made out and hence, CC No. 6324/17 Amit Kumar Yadav v. Shanti Swaroop Arora Page no. 10 of 15 the mandatory presumption is raised that cheques in question were issued in discharge of legally enforceable debt or liability.
18. The onus now shifts on the accused to establish a probable defence and rebut presumption raised under Section 118 and Section 139 of NI Act. The accused has taken the defence that he had never issued the cheques in question to the complaint, rather these cheques were issued to father of the complainant Sh. Dal Chand as security cheques. Further, that father of the complainant had told the accused that these cheques were lost from his possession in the house and thereafter he had asked the accused to stop payment of these cheques as the complainant and his father stay in the same house. Further, that the complainant misused the lost cheques from his father's possession and filed a false case against him.
19. Perusal of record shows that no evidence has been led by the accused to substantiate his claim that the said cheques were issued to one Sh. Dal Chand. It has also not been explained that when the accused was informed that the cheques in question were lost by the father of the complainant, why he did not send instructions to the bank to stop payment. Perusal of the three return memos Ex.CW1/4, Ex.CW1/5 and Ex.CW1/6 shows that the said cheques were returned unpaid due to insufficiency of funds and not due to instructions of 'stop payment' by the accused. Upon being informed that his blank signed cheques were lost, the accused could have also immediately lodged a complaint to this effect in police station or the court. However, he did none of these things. Accused could have also examined Sh. Dal chand to prove that the cheques in question were in fact lost from his possession. However, Sh. Dal chand has not CC No. 6324/17 Amit Kumar Yadav v. Shanti Swaroop Arora Page no. 11 of 15 been examined by the accused. Though, the accused claims to have filed a complaint dated 22.05.2018 Ex. DW1/2 to the police, that too by courier, he admitted in his crossexamination that no FIR was lodged upon the said complaint and that he did not file any case in court in pursuance of the same. It shows that the accused himself was not serious about such complaint and he never pursued same. In any case, not much reliance can be placed on the complaint Ex. DW1/2 as the same was filed after the institution of present case. Clearly, nothing has been brought on record to show that the cheques in question were not issued to the complainant or that these were lost or misused by the complainant.
20. The accused has further raised the defence that the complainant has not examined any witness or placed on record any documentary evidence or receipt to prove that the aforesaid loan of Rs. 5,00,000/ was advanced to the accused. However, mere absence of witness or documentary record cannot lead to conclusion that such loan transaction did not occur. There is already a presumption in favour of existence of a legal recoverable debt or liability, and thus initial burden is not on the complainant to prove the fact that the loan was advanced to the accused. Once presumption is raised under Section 139 of NI Act, it is for the accused to 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 nonexistence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist. Reliance is placed on the judgment of Hon'ble Supreme Court in case of Rohitbhai Jivanlal Patel v. State of Gujarat, (2019) 18 SCC 106, wherein it was CC No. 6324/17 Amit Kumar Yadav v. Shanti Swaroop Arora Page no. 12 of 15 held that:
"The observations of the trial court that there was no documentary evidence to show the source of funds with the respondent to advance the loan, or that the respondent did not record the transaction in the form of receipt of even kachcha notes, or that there were inconsistencies in the statement of the complainant and his witness, or that the witness of the complaint was more in the know of facts, etc. would have been relevant if the matter was to be examined with reference to the onus on the complaint to prove his case beyond reasonable doubt. These considerations and observations do not stand in conformity with the presumption existing in favour of the complainant by virtue of Sections 118 and 139 of the NI Act. Needless to reiterate that the result of such presumption is that existence of a legally enforceable debt is to be presumed in favour of the complainant. When such a presumption is drawn, the factors relating to the want of documentary evidence in the form of receipts or accounts or want of evidence as regards source of funds were not of relevant consideration while examining if the accused has been able to rebut the presumption or not."
21. Clearly, in the case at hand, mere absence of witnesses or documents showing loan transaction cannot probablise nonexistence of such loan and cannot rebut the presumption in favour of existence of such liability.
22. Next, it is contended on behalf of the accused that it is improbable that without repayment of previous two loans of Rs. 1,00,000/ each, the complainant would advance further loan of Rs. 3,00,000/. Accordingly, it is argued that no such loan was ever advanced to the accused by the complainant. Though, the accused has contended that he never had any relations with the complainant and that there never was any transaction between him and the CC No. 6324/17 Amit Kumar Yadav v. Shanti Swaroop Arora Page no. 13 of 15 complainant, when the copy of cheque no. 902323 Ex. DW1/X1 and the statement of account of the complainant Ex. DW1/X2 (showing payment of Rs. 1,00,000/ by the complainant to the accused) was put to him in cross examination, he admitted the receipt of said Rs. 1,00,000/ from the complainant through the said cheque stating that the money as reflected in statement of account Ex. DW1/X2 may have come to his account as the account number 90112010058602 was in his name. It is the case of the complainant that out of Rs. 3,00,000/ advanced to the accused on 09.06.2015, amount of Rs. 1,00,000/ was advanced by way of the aforesaid cheque. Thus, the aforesaid cheque Ex. DW1/X1 and statement of account Ex. DW1/X2 clearly show the receipt of Rs. 1,00,000/ on 09.06.2015 by the accused from the complainant, which goes contrary to the defence taken by the accused that he had never borrowed any loan from the complainant.
23. It is further the contention of the Ld. Counsel for the accused that no loan as alleged by the complainant has been mentioned in his ITR for the relevant period which shows that no such loan was advanced to the accused. However, it is difficult to agree with this contention of the accused as every person who gives friendly loans may not in all cases show such loans in their income tax returns. Further, mere fact that advance of loan is not disclosed in the ITR, it cannot lead to conclusion that no such loan was advanced or that it is not a legally recoverable debt. Even if the loan amount was not mentioned in the ITR by the complainant, it would still not be sufficient to throw out the case of the complainant. It was held in case of Krishna P. Morajkar v. Joe Ferrao, (2013) 5 AIR Bom R 294 that "Infraction of provisions of Income Tax Act would be a CC No. 6324/17 Amit Kumar Yadav v. Shanti Swaroop Arora Page no. 14 of 15 matter between the revenue and the defaulter and advantage thereof cannot be taken by the borrower. In my humble view, to say that an amount not disclosed in the income tax returns becomes irrecoverable would itself defeat the provisions of Section 138 of the Negotiable Instruments Act." Reliance is also placed on the judgment of Lekh Raj Sharma v. Yash Pal Gupta, (2015) 221 DLT 585 wherein it was held that a complaint under Section 138 NI Act is maintainable even when the transaction is not shown in ITR. Clearly, mere non disclosure of advance of loan in the ITR does not rebut the presumption raised under Section 139 NI Act.
24. In view of the above discussion, it is clear that the accused has failed to rebut the presumptions raised against him. There was nothing that came out in the entire evidence on record which would probabalise the defence raised by the accused or falsify the case of the complainant.
25. Upon consideration of the facts of the case and evidence adduced, this court is of the considered view that the complainant has been able to establish the guilt of the accused beyond reasonable doubt. Accordingly, the accused hereby stands convicted for offence punishable under Section 138 of the Negotiable Instruments Act, 1881.
Digitally signed
Announced in open
RAHUL by RAHUL
VERMA
court on 30.03.2022
VERMA Date: 2022.03.30
13:09:51 +0530
(RAHUL VERMA)
MM07/ SOUTHEAST DISTRICT /
SAKET COURT / NEW DELHI
30.03.2022
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