Delhi District Court
Cc No.: 516586/16 1/13 M/S Rmk vs . M/S Card on 16 February, 2022
IN THE COURT OF MS. ARUSHI PARWAL, METROPOLITAN
MAGISTRATE (NI ACT)02, CENTRAL DISTRICT, TIS HAZARI COURTS,
DELHI
CNR No. : DLCT020001882009
CC No. : 516586/2016
U/s: 138 N. I. Act
P.S: Darya Ganj
M/s Rashtriya Mahila Kosh v. M/s Community Action for Rural
Development
JUDGMENT
1. Sl. No. of the case : 516586/16
2. Date of institution of the case : 25.08.2009
3. Name of complainant : M/s Rashtriya Mahila Kosh
(through Authorized Representative)
Presently at - 4th Floor, Dr. Durgabai
Deshmukh Samaj Kalyan Bhawan,
B12, Qutab Institutional Area, New
Delhi - 110016.
4. Name of accused and address : (1) M/s Community Action for Rural
Development
At - Pulivalam, Pudukkottai District,
Tamil Nadu - 622507.
(2) Mrs. S. R. Jaya
W/o Sh. P. Vedachalam
R/o - H. No. 105, Maraimalal Nagar,
Pudukottai3, Rajgopala Puram,
Tamil Nadu - 622003.
Digitally signed
ARUSHI by ARUSHI
PARWAL
PARWAL Date: 2022.02.16
16:10:54 +05'30'
CC No.: 516586/16 1/13 M/s RMK vs. M/s CARD
(3) Mrs. S. Chandra
W/o Sh. P. Subramanian
R/o - Samathuvapuram, Pulivalam
(PO) Pudukottai, Tamil Nadu.
Also at - H. No. 5/25, Mettupatti
Hiraniyamangalam Post Kulithalai
Taluk, Karur District, Tamil Nadu -
639107.
5. Offence complained of : 138 N. I. Act
6. Plea of accused : Accused pleaded not guilty
7. Final order : Acquitted
8. Date of pronouncement : 16.02.2022
BRIEF REASONS FOR DECISION OF THE CASE
Factual Background of the case:
1. Briefly stated facts of this case as per complaint are that complainant is an autonomous body working under the Ministry of Women and Child Development which provides the loan facilities to the NGOs etc. The present complaint has been filed through the representative (Deputy Director) of the complainant, authorized vide office order dated 26.11.2007. The complaint has been signed, verified and instituted on behalf of the Deputy Director of the complainant. It is further stated that Accused no.1 is a society registered under the Society Registration Act and a NonGovernmental Organization (NGO), having its registered office at the address given above. Accused no.2 is the Programme Director and Accused no.3 is the treasurer of the Accused no.1 and had dealt with the complainant. Accused no.2 and 3 had executed several ARUSHI Digitally signed by ARUSHI PARWA PARWAL Date:
L 2022.02.16
16:11:16 +05'30'
CC No.: 516586/16 2/13 M/s RMK vs. M/s CARD
documents on behalf of the Accused no.1 at the time of sanction of loan and interalia, were incharge of carrying out the day to day functions and activities of Accused no.1 at the relevant time. It is further stated that the complainant had sanctioned an amount of Rs.45,00,000/ (Rupees Fortyfive Lakhs only) to Accused no.1 on 01.03.2008 out of which Rs.22,50,000/ (Rupees Twentytwo Lakhs Fifty Thousand only) was disbursed on 24.04.2008 vide loan A/c No.1740. Necessary documents in respect of the loan transaction were prepared and executed on behalf of the Accused no.1 and an AgreementcumGuarantee Deed was executed by the Accused no.2 and the Accused no.3 stood as guarantor, inter alia, of the loan amount.
2. It is further stated that loan amount of Rs.22,50,000/, along with interest, was repayable by the Accused no.1 on the stipulated dates, failing which the entire loan became repayable in a lump sum. Thereafter, the complainant received a postdated cheque bearing No.234070 dated 06.05.2009 for Rs.4,09,776/ (Rupees Four Lacs Nine Thousand Seven Hundred Seventy Six only) of Indian Overseas Bank, Pudukkottai Branch (Code072) Tamil Nadu in favour of the complainant, purportedly towards the partial payment by the Accused no.1 of the total outstanding. It is further stated that the said cheque was deposited by the complainant with its banker, State Bank of India, Asaf Ali Road, New Delhi for its clearance. The complainant received intimation regarding dishonour of aforementioned cheque vide bank memo on 08.07.2009, for reason of insufficiency of funds. Thereafter, a notice of demand dated 18.07.2009 was issued by the complainant, through counsel, to all the accused persons by Regd. A/D post and UPC, calling upon the accused persons to clear the said cheque amount within the statutory period of 15 days from the date of receipt of the legal notice. Despite service/deemed service of the same, the accused failed to make payment of the said cheque amount or any part thereof within the statutory period of 15 days, or even otherwise, to date. Accused no.2 Mrs. S. R. Jaya, Programme Director of Accused no.1 and Accused no.3 Mrs. S. K. Chandra, Treasurer of Accused no.1 are jointly and Digitally signed ARUSHI by ARUSHI PARWAL PARWAL Date: 2022.02.16 16:11:35 +05'30' CC No.: 516586/16 3/13 M/s RMK vs. M/s CARD severally liable, as both Accused No. 2 and 3 have signed and issued postdated cheque of Rs.4,09,776/. Hence, both Accused no.2 and 3 are liable for offence under Section 138 r/w Section 141 of NI Act. Hence, the present complaint was filed under Section 138 of Negotiable Instruments Act, 1881 (NI Act).
Proceedings before Court
3. At the outset, it is trite to mention that the present complaint case is connected with another complaint case (in respect of another loan transaction) between the same parties. On the basis of presummoning evidence, accused persons were summoned for the offence under Section 138 of NI Act vide summoning order dated 16.01.2013. The accused persons put in their appearance, through counsel, on 01.05.2013. Thereafter notice under Section 251 Cr.P.C. was framed upon the accused persons by Ld. Predecessor of the undersigned, to which the accused persons pleaded not guilty and claimed trial. In her plea of defence, as AR of accused no.1 and as accused no.2, accused no.2 stated that she had already paid the amount of cheque in question to the complainant within 15 days of the receipt of demand notice and no other dues, of any kind, were pending towards the complainant. In her plea of defence, accused no.3 stated that she had already paid the amount of cheque in question to the complainant within 15 days of the receipt of demand notice and no other dues, of any kind, were pending towards the complainant.
4. In support of his case, the substituted authorized representative (AR) of the complainant examined himself as CW1 and filed his affidavit at the post summoning stage, wherein he has primarily reiterated contents of the complaint. He has relied upon the documents i.e. Office Order in favour of Deputy Director who had filed the present complaint (Ex.CW1/A1), copy of resolution/ authorization in favour of substituted AR (Office Order) dated 18.03.2014 (Ex.CW1/A2), original cheque bearing no.234070 dated 06.05.2009 (Ex.CW1/B), cheque returning memo dated Digitally signed ARUSHI by ARUSHI PARWAL PARWAL Date: 2022.02.16 16:11:52 +05'30' CC No.: 516586/16 4/13 M/s RMK vs. M/s CARD 08.07.2009 (Ex.CW1/C), copy of legal demand notice dated 18.07.2009 (Ex.CW1/D), Regd. AD and UPC slips (Ex.CW1/D1, Ex.CW1/D2, Ex.CW1/E and Ex.CW1/F) and the complaint (Ex.CW1/G).
The AR of the complainant was duly crossexamined on behalf of the accused persons. During cross examination, he stated that that complainant had demanded cheque amount of Rs.4,09,776/. He admitted that some payment had been received from the accused persons and that the said fact was not mentioned in the complaint. He admitted that Ex.CW1/X dated 01.08.2009 had been issued by the complainant organization, whereby the complainant admitted receipt of payment of Rs.4,10,000/ on 28.07.2009 from the accused persons. He further admitted that the said letter/receipt (Ex.CW1/X) did not mention any other amount due except for sums of Rs.3,65,979/ and Rs.44,021/. He stated that the amount received from the accused persons (i.e. Rs.4,10,000/) was credited to another account no.1214. He admitted that there was no agreement to the effect as to in which account of accused of Rs.4,09,776/ was to be adjusted. He denied that the complainant organization had filed a false and frivolous case to harass the accused persons despite no amount being due in account no.1740.
Thereafter, CE was closed on 29.10.2018.
5. Statement of accused persons, under section 313 Cr.P.C. r/w section 281 Cr.P.C., was recorded. Accused no.2 (on behalf of accused no.1 and herself) stated that she was innocent. The complainant had filed false case against them and there was nothing due. Moreover, as per the policy guidelines of the complainant, they could not have taken advance cheque/security cheque for a loan upto Rs.2 crores. However, the complainant had taken 19 undated blank signed cheques from them at the time of the housing loan agreement in April, 2008 and misused the same after their expiry. She further stated that they made the impugned cheque payment within 15 days of the legal notice and as per law, the case could not be filed as nothing remained due as per the Digitally signed ARUSHI by ARUSHI PARWAL PARWAL Date: 2022.02.16 16:12:13 +05'30' CC No.: 516586/16 5/13 M/s RMK vs. M/s CARD demand notice. There was nothing due in the present case as they had made all the payments through demand drafts. She further stated that the previous and present office bearers/Secretary/Executive Director/General Manager of complainant organization knew all the true facts regarding the present case and had given assurances to them that the present case will be withdrawn as the same had been filed mistakenly and as per the policy of the complainant organization. Accused no.3 stated the same in her statement.
6. Accused persons did not lead any defence evidence. Afterwards, final arguments were heard on behalf of both the parties and after hearing the arguments, trial was concluded. I have heard the counsels for both the parties, perused the record and have gone through relevant provisions of the law and the judgements relied upon.
Points for determination 7.1. Whether the complainant has been able to establish ingredients of offence punishable under Section 138 of The Negotiable Instruments Act, 1881 beyond shadow of reasonable doubt against the accused or not?
7.2. Final order.
Findings
8. Before appreciating the facts of the case in detail for the purpose of decision, relevant position of law is discussed. It is settled position of law that to constitute an offence under S.138 N.I. Act, the following ingredients are required to be fulfilled:
1) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account for the discharge of any debt or other liability;
2) that cheque has been presented to the bank within a period of three months from the date on which it is drawn or within the period of its validity, whichever is earlier;Digitally signed
ARUSHI by ARUSHI PARWAL PARWAL Date: 2022.02.16 16:12:38 +05'30' CC No.: 516586/16 6/13 M/s RMK vs. M/s CARD
3) that 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 30 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 payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice.
It is only when all the aforementioned ingredients are satisfied that the person who had drawn the cheque can be deemed to have committed an offence under Section 138 of the NI Act.
9. In the present case, accused no.2 and accused no.3 have admitted that the cheque in question (Ex.CW1/B) is the cheque of accused no.1 and bears their signatures. The stand of the accused persons is that the cheque in question was taken by the complainant as a blank signed security cheque at the time of sanction of loan. Even if the cheque was taken as a security cheque, however, if there was a legally enforceable debt in existence on the date of presentment, offence under Section 138 of NI Act can still be attracted. The cheque in question was dishonoured for reason "Funds Insufficient" vide cheque returning memo (Ex.CW1/C). As per the UPC slips and AD cards filed, the legal demand notice (Ex.CW1/D) had been sent to the accused persons within 30 days from receipt of intimation of dishonor of the cheque in question and the same was received by/on behalf of the accused persons. The real controversy in the present matter is with respect to payment of amount of cheque in question within 15 days of receipt of legal demand notice. The complainant's version is that the accused persons failed to make payment of the cheque amount within ARUSHI Digitally by ARUSHI signed PARWA PARWAL Date: 2022.02.16 L 16:12:55 +05'30' CC No.: 516586/16 7/13 M/s RMK vs. M/s CARD the stipulated period and hence, the present complaint has been filed. On the other hand, the consistent stand of the accused persons is that they had made the payment of the amount of cheque in question within 15 days of receipt of legal demand notice and hence, the present complaint is not maintainable.
10. During final arguments, it has been argued on behalf of the complainant that the legally enforceable debt in favour of the complainant has not been disputed and the accused persons have accepted their liability. Despite service of legal demand notice, the accused persons did not make payment of the cheque amount. With respect to the acknowledgment of receipt of Rs.4,10,000/ from the accused persons (Ex.CW1/X), issued by the complainant, Ld. Counsel for the complainant has argued that the said amount was adjusted in another account of the accused persons, i.e. A/c No.1214. It has been further argued that vide legal demand notice dated 18.07.2009, a specific demand for A/c No.1740 was raised, however, the accused persons did not specify the account number in which the money (i.e. Rs.4,10,000/) paid by them was to be adjusted. Hence, the same was adjusted in A/c No.1214, which also had outstanding dues.
Per contra, it has been argued on behalf of the accused that the accused persons duly made the payment of demanded amount of Rs.4,09,776/ by way of two demand drafts of Rs.3,10,000/ and Rs.1,00,000/ within 15 days from the date of legal demand notice. Since the demand in A/c No.1214 was not raised during that period, there was no need for the accused persons to specify as to in which account the same is being paid. It was understood that the same had to be adjusted in A/c No.1740, however, the complainant malafidely adjusted the same in the other account of the accused. It has been further argued that even the fact of receipt of payment of Rs.4,10,000/ from the accused persons within 15 days of legal demand notice dated 18.07.2009 have not been mentioned in the complaint, which shows that the complainant has not approached this court with clean hands. It has been further argued that the acknowledgment Ex.CW1/X Digitally signed ARUSHI by ARUSHI PARWAL PARWAL Date: 2022.02.16 16:13:44 +05'30' CC No.: 516586/16 8/13 M/s RMK vs. M/s CARD clearly mentions the receipt of total amount of Rs.4,10,000/, which amount had been credited into the Housing Loan account of the accused on 31.07.2019. Since the Housing Loan account is the account bearing number 1740, the complainant has later presented false facts that the said amount was credited/adjusted in A/c No.1214, which account is the Main Loan Scheme Account.
11. The Negotiable Instruments Act raises two presumptions in favour of the holder of the cheque i.e. complainant in the present case; firstly, with regard to passing of consideration as contained in Section 118 (a) and, secondly, a presumption under Section 139, that the holder of cheque receiving the same of the nature referred to in Section 138 for discharge, in whole or in part, of any debt or other liability. These presumptions under Sections 118(a) and 139 have to be compulsorily raised as soon as execution of cheque by accused is admitted or proved by the complainant and thereafter burden is shifted upon the accused to prove otherwise. The onus to prove the issuance of the cheque lies upon the complainant, and the same has to be proved beyond reasonable doubt, unless the accused admits the same. Once the issuance of cheque is established, either by admission or by positive evidence, the presumption under Section 139 of the Negotiable Instruments Act, 1881 arises.
In the present case, the accused persons have neither disputed the factum of legally enforceable debt not their signatures on the cheque in question. Hence, the presumptions under Sections 118(a) and 139 of NI Act have been raised in favour of the complainant. The onus then shifted upon the accused to rebut the said presumption. The standard of proof to be discharged by the accused is 'preponderance of probabilities'.
12. It has been held by Hon'ble High Court of Delhi in 'Satish Sharma v.
State NCT of Delhi & Anr. [(2013) 204 DLT 289]'
ARUSHI Digitally signed
by ARUSHI
PARWA PARWAL
Date:
L 2022.02.16
16:14:03 +05'30'
CC No.: 516586/16 9/13 M/s RMK vs. M/s CARD
"8. Although the Court is under an obligation to raise the presumption contemplated under Sections 118, 138 and 139 in every case, where the factual basis for raising the presumption has been established by the complainant, the accused is required to raise a probable defence or rebut such a presumption by leading evidence or bringing such facts on record in the crossexamination of the complainant that could make the latter's case improbable. For doing so, it is not necessary for the accused to disprove the existence of consideration by way of direct evidence. The standard of proof has been held to be preponderance of probabilities and the inference of preponderance of probabilities can be drawn not only from the materials that have been placed on record, but also by reference to the circumstances upon which the accused relies. (Ref: AIR 1999 SC 1008 entitled Bharat Barrel and Drum Manufacturing Company vs. Amin Chand Payrelal). If the accused is proved to have discharged the initial onus of proof placed on him by showing that the existence of consideration was improbable or doubtful or illegal, then the onus will shift back to the complainant who will then be under an obligation to prove it as matter of fact and failure to do so will disentitle him to any relief on the basis of the negotiable instrument."
13. As regards the repayment of cheque amount in the present case (i.e. Rs.4,09,776/), it has been established during the course of trial that payment of Rs.4,10,000/, by way of two demand drafts of Rs.3,10,000/ and Rs.1,00,000/, had been made by the accused persons within fifteen days from the date of legal demand notice. Receipt dated 01.08.2009 (Ex.CW1/X) acknowledging the said payment, issued to the accused persons by the complainant, has been categorically admitted by the AR of the complainant in his crossexamination. The stand of the complainant thereafter is that the said payment was adjusted into another account of the accused persons, bearing A/c No.1214, as dues were outstanding in that account too. Firstly, the money received Digitally signed ARUSHI by ARUSHI PARWAL PARWAL Date: 2022.02.16 16:14:30 +05'30' CC No.: 516586/16 10/13 M/s RMK vs. M/s CARD by the complainant within fifteen days of a demand raised by them by way of legal notice under Section 138 of NI Act, should have been adjusted in the same account for which it was raised since the amount received was also the round figure amount of money demanded by the complainant. This should have been so done even in absence of instructions from the accused as the circumstances, amount and time of payment of Rs.4,10,000/ clearly indicated as to for which account and for which demand, the money was intended to be paid. Further, no other demand in any other account of the accused was raised by the complainant at the same time. Therefore, why the said payment was adjusted in any other account of the accused, than the account for which it was raised, is beyond reason and general principles of contractual law (ref. Section 60 of Indian Contract Act, 1872).
14. Secondly, even considering that the complainant applied the payment received from the accused persons, within fifteen days of receipt of legal demand notice by the accused persons, in some other account of the accused persons as no instructions were given by them as to appropriation of amount, the receipt/acknowledgment issued by complainant to the accused persons should have categorically mentioned about the same. Perusal of the receipt Ex.CW1/X reveals that a total amount of Rs.4,10,000/, received by the complainant from the accused persons, was adjusted by the complainant towards Housing Loan. Ld. Counsel for the accused persons has argued that it was the Housing Loan account only which bears A/c No.1740 and it is the same account number that has been mentioned in legal demand notice. Hence, all payment due in the said account had already been made as per demand raised vide legal notice dated 18.07.2009 and accordingly the receipt Ex.CW1/X was issued. Thereafter, there was no cause of action for filing the present complaint. Perusal of the complaint and evidence in the connected complaint case (CC No.10721/2017) between the same parties also reveals that A/c No.1214 was the Main Loan Scheme account of the accused. The statement of accounts filed by the complainant in the connected complaint Digitally signed ARUSHI by ARUSHI PARWAL PARWAL Date: 2022.02.16 16:14:54 +05'30' CC No.: 516586/16 11/13 M/s RMK vs. M/s CARD case bear A/c No.1214 while the complaint mentions the loan as Main Loan Scheme. Hence, a receipt for payment against Housing Loan could not have been issued for A/c No.1214 as the same was account of Main Loan Scheme. Even the amount mentioned on the receipt Ex.CW1/X has not been reflected in the account statement filed by the complainant in the connected compliant case for A/c No.1214. Therefore, either the complainant did not credit and adjust the total amount of Rs.4,10,000/ received from the accused persons in A/c No.1214 and actually adjusted the same in Housing Loan account (A/c No.1740) or the complainant issued a false receipt to the accused persons. In either case, failure to make payment of cheque amount within stipulated period cannot be attributed to the accused persons. The accused persons have duly paid the amount of the cheque in question within the period stipulated under Section 138 proviso (c) of NI Act and the said payment was confirmed by the complainant by issuing receipt Ex.CW1/X. The complainant later misappropriated the amount received from accused persons and filed the present complaint, which shows negligence or mismanagement on part of the complainant.
15. Considering the above facts and circumstances in toto, this court is of the considered opinion that the cause of action for filing the present complaint has not arisen in the present case and the ingredients of offence under Section 138 of NI Act have not been made out against the accused persons.
16. In the light of above discussion, on account of lack of cause of action for filing the present complaint and the fact that the complainant has failed establish the ingredients of offence under Section 138 of NI Act against the accused persons, all accused persons are hereby acquitted for the offence under section 138 NI Act.
Previous bail bonds of accused no.2 and accused no.3 stand cancelled. Their sureties stands discharged.
Bonds under Section 437 A Cr.P.C. have been furnished on behalf of ARUSHI Digitally signed by ARUSHI PARWA PARWAL Date: 2022.02.16 L 16:15:13 +05'30' CC No.: 516586/16 12/13 M/s RMK vs. M/s CARD accused no.2 and accused no.3. The same are hereby accepted for a period of six months from today. Security document of accused no.2, furnished along with bail bond, has been retained with bonds u/s 437 A Cr.PC. Fresh security document has been furnished on behalf of accused no.3 along with bonds u/s 437 A Cr.PC. Accepted.
Digitally signed
ARUSHI by ARUSHI
Announced in open court PARWAL
PARWAL Date: 2022.02.16
on 16.02.2022 16:15:32 +05'30'
(ARUSHI PARWAL)
Metropolitan Magistrate (NI Act)02
Central, Tis Hazari Court, Delhi.
CC No.: 516586/16 13/13 M/s RMK vs. M/s CARD