Delhi District Court
Gagan Kakkar vs . Akshun Sudan Cc No.25188/2018 Page No. ... on 23 August, 2019
IN THE COURT OF MR. MRIDUL GUPTA, METROPOLITAN MAGISTRATE,
SOUTH-WEST, DWARKA, DELHI
In Re:
CNR No. DLSW02- 026210-2018
CC No. 25188/2018
Gagan Kakkar,
S/o Sh. Gurmeet Singh,
R/o 4B, G- Block, Prem Nagar,
Paprawat Road, Near Rao Maan Singh School,
Najafgarh, New Delhi - 110043.
............Complainant
Versus
Akshun Sudan,
S/o Sh. Parveen Sudan
R/o Plot No.152, Khasra No.589,
Phase-II, Gali No.13, Sangam Vihar,
Najafgarh, New Delhi - 110043.
.............Accused
(1) Offence complained of or
proved : 138 N.I. Act
(2) Plea of accused : Pleaded not guilty
(3) Date of institution of case : 02.07.2018
(4) Date of conclusion of arguments: 08.08.2019
(5) Date of Final Order : 23.08.2019
(6) Final Order : Convicted
Gagan Kakkar Vs. Akshun Sudan CC No.25188/2018 Page no. 1 of 13
JUDGMENT
1. Vide this judgment I shall dispose of the complaint filed by the complainant under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the 'Act ').
2. Brief facts relevant for the decision of the case are as under:-
The complainant alleges that he had friendly relations with accused since last seven to eight years. It is alleged that in January 2018, accused approached complainant for temporary financial assistance of Rs. 2 lacs. Thus, the complainant advanced the said amount in cash to accused on 11.01.2018 as a friendly loan. Accused promised to repay the same within three to four months on demand. To discharge his aforesaid liability, accused issued one cheque of Rs. 2,00,000/- i.e. cheque in question bearing no.103044 dated 05.04.2018 drawn on Union Bank of India, Najafgarh Branch, New Delhi to complainant in satisfaction of loan, with an assurance of its encashment. After due date of cheque in question, the complainant presented the cheque in his account maintained at Punjab National Bank, Najafgarh, Delhi, which was returned with the remarks "Funds Insufficient" vide bank return memo dated 16.05.2018. Thereafter, complainant served a legal notice dated 06.06.2018 upon the accused through his counsel demanding the said amount. Despite service of aforesaid notice, neither any reply was sent nor the money was repaid by the accused. Thereafter, complainant has filed the present complaint case with the submission that accused be summoned, tried and punished according to law.
3. In his pre-summoning evidence, complainant examined himself as CW-1 on affidavit Ex. CW-1/X. He reiterated the contents of complaint and placed on record his bank statement as Ex.CW1/1 (colly.), original cheque of Rs. 2,00,000/- i.e. cheque in question bearing no.103044 dated 05.04.2018 drawn on Union Bank of India, Najafgarh, Delhi as Ex. CW-1/2, cheque returning memo dated 16.05.2018 as Ex. CW-1/3, legal demand notice dated 06.06.2018 as Ex.CW-1/4 Gagan Kakkar Vs. Akshun Sudan CC No.25188/2018 Page no. 2 of 13 (colly.), receipts of speed post as Ex. CW-1/5, delivery print out of whatsapp as Ex.CW1/6 and tracking reports as Ex. CW-1/7.
4. Upon appreciation of pre-summoning evidence, accused was summoned for an offence punishable under Section 138 of the Act and notice under Section 251 Cr.P.C. for this offence was framed upon accused on 15.02.2019 to which he pleaded not guilty and claimed trial. He admitted his signature on the cheque in question, however, denied filling in the contents of the same. He admitted that he had availed loan of Rs.2,00,000/- from complainant on 11.01.2018. He stated that complainant started asking for repayment of loan, 3 - 4 months after it was given. He gave cheque in question as blank signed cheque alongwith another such cheque when the complainant asked for repayment. He had repaid about Rs.1,20,000/- to complainant. He denied receipt of legal demand notice. He stated that complainant had misused the cheque in question.
5. The accused moved an application to cross-examine the complainant. Complainant as CW-1 was duly cross examined by the accused. No other witness was produced by the complainant and he closed his evidence by giving a separate statement to this effect. Thereafter, statement of accused under Section 313 Cr.P.C. was recorded in which all the incriminating evidence were put to him to which accused stated that he had taken an amount of Rs. 2,00,000/- from the complainant in January 2018 . However, the amount was not given as a loan. He stated that the complainant gave him the amount for purpose of investment in LED TVs in Gurgaon. He denied filling in the particulars in the cheque in question. However, admitted his signatures on the cheque in question. He denied receipt of the legal notice, however stated that he received the legal notice by whatsapp i.e Ex. CW-1/6. He stated that he had given cheque in question as blank signed security cheque to complainant when complainant paid him Rs. 2,00,000/-. He had repaid about Rs. 1,20,000/- to complainant in cash. However, he did not have any receipt of any payment made to complainant. He also stated that a written agreement was also executed between them when the complainant invested Rs. 2,00,000/- with him. The agreement was in possession of Gagan Kakkar Vs. Akshun Sudan CC No.25188/2018 Page no. 3 of 13 complainant. He stated that the complainant had misused the cheque in question. Accused preferred not to lead any defence evidence.
6. Thereafter, matter was listed for final arguments. It was argued by the Ld. counsel for the complainant that this is a fit case for conviction of the accused as all the essential ingredients of Section 138 of the Act read with Section 139 of the Act have been fulfilled and that the same has been aptly demonstrated by the complainant before the court. It was argued that accused admitted his signatures on the cheque in his plea of defence recorded at the time of framing of notice under Section 251 Cr.P.C as well as in his statement U/s 313 Cr.P.C. He argued that accused never gave reply to the legal demand notice. He also argued that as per version of accused, he had taken the amount of Rs. 2,00,000/- from complainant and repaid Rs. 1,20,000/- to complainant. However, accused could not produce any receipt of any repayment allegedly made to complainant to show any such transaction or repayment of loan. He also argued that accused did not lead any evidence as to alleged investment and business transactions between the parties. It was argued that accused failed to raise the probable defence to disprove the case of complainant and to rebut the presumption under Section 139 NI Act. Therefore, accused be convicted for the offence under Section 138 of the Act.
7. Per contra, on behalf of accused, it was argued that he never took any loan from the complainant. He reiterated the submissions made by him in his plea of defence at the time of framing of notice under Section 251 Cr.P.C and in his statement under Section 313 Cr.P.C. that the amount of Rs. 2,00,000/- was not given as loan by complainant. Rather the same was for purpose of investment in business of LED TVs and cheque in question was given as blank signed security cheque at the same time. He maintained that he had repaid Rs. 1,20,000/- to the complainant and the cheque in question was misused by the complainant. It was argued that complainant failed to disclose sufficient sources of funds to advance present loan. It was argued that there was no written agreement of the loan and no witnesses to the loan which cast doubt on any such friendly loan transaction.
Gagan Kakkar Vs. Akshun Sudan CC No.25188/2018 Page no. 4 of 13 He argued that evidence of complainant suffered from material lapses and was not sufficient to establish the case against accused. He submitted that complainant has failed to prove his case beyond reasonable doubt and accused is entitled to be acquitted of offence u/s 138 of the Act.
8. I have perused the entire record as well as evidence led by the complainant as well as by the accused.
9. Before appreciating the facts of the case in detail for the purpose of decision, let relevant position of law be discussed first:-
For the offence under Section 138 of the Act to be made out against the accused, the complainant must prove the following points, that:-
1. the accused issued a cheque on account maintained by him with a bank.
2. the said cheque had been issued in discharge, in whole or in part, of any legal debt or other liability.
3. the said cheque has been presented to the bank within a period of three months from the date of cheque or within the period of its validity.
4. the aforesaid cheque, when presented for encashment, was returned unpaid/dishonoured.
5. the payee of the cheque issued a legal notice of demand to the drawer within 30 days from the receipt of information by him from the bank regarding the return of the cheque.
6. the drawer of the cheque failed to make the payment within 15 days of the receipt of aforesaid legal notice of demand.
10. The Act raises two presumptions in favour of the holder of the cheque i.e. Complainant in the present case; firstly, in regard to the passing of consideration as contained in Section 118 (a) and secondly, a presumption that the holder of cheque receiving the same of the nature referred to in Section 139 discharged in whole or in part any debt or other liability.
Section 118 of the N.I Act provides :
"Presumptions as to negotiable instruments: Until the contrary is proved, Gagan Kakkar Vs. Akshun Sudan CC No.25188/2018 Page no. 5 of 13 the following presumptions shall be made: (a) of consideration - that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred was accepted, indorsed, negotiated or transferred for consideration;"
Section 139 of the N.I Act further provides as follows:
"Presumption in favour of holder - it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability".
11. For the offence under Section 138 of the Act, the presumptions under Sections 118(a) and 139 have to be compulsory raised as soon as execution of cheque by accused is admitted or proved by the complainant and thereafter burden is shifted to accused to prove otherwise. These presumptions shall be rebutted only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability etc. A presumption is not in itself evidence but only makes a prima facie case for a party for whose benefit it exists. Presumptions both under Sections 118 and 139 are rebuttable in nature. Same was held by the Hon'ble Supreme Court of India in Hiten P. Dalal v. Bratindranath Banerjee [(2001) 6 SCC 16].
12. In the present case, accused has admitted his signatures on the cheque in question in the notice U/s 251 Cr.P.C. He did not deny his signature on the cheque either in cross-examination of complainant, or his statement U/s 313 Cr.P.C and also in defence evidence. Reference can be made to Judgment of Apex Court in Rangappa v. Mohan, AIR 2010 SC 1898,that, "Once the cheque relates to the account of the accused and he accepts and admits the signatures on the said cheque, then initial presumption as contemplated under Section 139 of the Negotiable Instruments Act has to be raised by the Court in favour of the complainant."
Also in the case of K. Bhaskaran Vs. Sankaran Vaidhyan Balan 1999 (4) RCR (Criminal) 309, it has been held by the Hon'ble Supreme Court as under:
"As the signature in the cheque is admitted to be that of the accused, the presumption envisaged in Section 118 of the Act can legally be Gagan Kakkar Vs. Akshun Sudan CC No.25188/2018 Page no. 6 of 13 inferred that the cheque was made or drawn for consideration on the date which the cheque bears. Section 139 of the Act enjoins on the court to presume that the holder of the cheque received it for the discharge of any debt or liability."
It has been held in M/s. Kumar Exports v. M/s. Sharma Carpets, [2009 A.I.R. (SC) 1518] that the accused may rebut these presumptions by leading direct evidence and in some and exceptional cases, from the case set out by the complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial. Further, the burden may be discharged by the accused by showing preponderance of probabilities and the onus on the accused is not as heavy as it is on the complainant to prove his case. In light of aforestated legal position, let us carry out a scrutiny of the evidence led at the trial.
13. In the present case, the complainant by way of an affidavit led his own evidence testifying that cheque was issued to him after he had advanced loan of Rs. 2,00,000/- to the accused. The cheque in question, dishonour memo of the cheque and legal demand notice were exhibited on record.
14 The accused did not lead any defence evidence. However, the principle defence taken by the accused as brought out from his statement U/s 313 Cr.P.C is that though he had taken an amount of Rs. 2,00,000/- from complainant in January 2018, the same was not a loan. Rather, it was given for purpose of investment in LED TVs in Gurgaon. He further stated that he gave the cheque in question as blank signed security cheque to complainant at time of the investment. A written agreement was also executed between them regarding the investment which was in possession of complainant. He had repaid about Rs. 1,20,000/- to complainant in cash. He stated that the cheque in question had been misused by complainant.
15. However, perusal of evidence shows that said version of accused is not supported by any material on record. The accused did not produce any record or Gagan Kakkar Vs. Akshun Sudan CC No.25188/2018 Page no. 7 of 13 document to show any such transaction regarding an investment with the complainant. Though in his statement under Section 313 Cr. P.C he stated that the written agreement was in possession of complainant. However, no question or suggestion was put to complainant in his cross-examination regarding existence of any such investment transaction of Rs. 2,00,000/- for LED TVs or any written agreement for the same. Furthermore, even in answer to notice under Section 251 Cr. P.C, accused did not mention about any investment transaction. Rather, he stated that he had availed the loan of Rs. 2,00,000/- from complainant and repaid about Rs. 1,20,000/- to him. Thus, the version of accused regarding an investment transaction between the parties and cheque being given for said purpose is totally unsubstantiated by any material on record and not credible.
16. Regarding the version of accused that he had repaid Rs. 1,20,000/- to complainant in cash, the same is also not substantiated by any evidence. The accused did not produce any receipt or acknowledgment to show that he had repaid the said amount to complainant and the same remains a bald averment. It is also pertinent to note that the cheque in question has been dishonored vide cheque returning memo dated 16.05.2018 for reason "Funds Insufficient" (Ex. CW-1/3) and not for any other reason. There is no explanation or evidence as to why, if the cheque was not returned after repayment of substantial amount to complainant, stop payment instructions were not issued by accused to bank. It is also not the case of accused that he gave any written notice to complainant for return of his cheque. The accused also did not place on record any material to show that he had filed any complaint against the complainant for wrongful retention or misuse of his cheque. Thus this version of accused regarding repayment of amount to complainant and misuse of cheque is also not credible.
17. It is also pertinent to note that accused did not lead any defence evidence in support of his averments. The decision of Hon'ble High Court of Delhi in V.S.Yadav vs Reena, Crml. Appeal No. 1136/2010, date of decision 21.09.2010, can also be referred to here, wherein it was held:
"It must be borne in mind that the statement of accused under Section Gagan Kakkar Vs. Akshun Sudan CC No.25188/2018 Page no. 8 of 13 281 Cr. P.C. or under Section 313 Cr. P.C. is not the evidence of the accused and it cannot be read as part of evidence. The accused has an option to examine himself as a witness. Where the accused does not examine himself as a witness, his statement under Section 281 Cr. P.C. or 313 Cr. P.C. cannot be read as evidence of the accused and it has to be looked into only as an explanation of the incriminating circumstance and not as evidence. There is no presumption of law that explanation given by the accused was truthful. In the present case, the accused in his statement stated that he had given cheques as security. If the accused wanted to prove this, he was supposed to appear in the witness box and testify and get himself subjected to cross examination. His explanation that he had the cheques as security for taking loan from the complainant but no loan was given should not have been considered by the Trial Court as his evidence and this was liable to be rejected since the accused did not appear in the witness box to dispel the presumption that the cheques were issued as security. Mere suggestion to the witness that cheques were issued as security or mere explanation given in the statement of accused under Section 281 Cr. P.C., that the cheques were issued as security, does not amount to proof."
The law laid down in above judgment is squarely applicable in present case. In present case also, the accused has not led any evidence in support of his version. A simple bald averment of security cheque being given for purpose of investment, in statement under section 313 Cr.P.C., in absence of any material to substantiate the same, either through cross-examination of complainant or defence evidence, is not sufficient to dislodge the statutory presumptions.
18. Regarding the averment that cheque was given as blank signed cheque which was misused by complainant even after repayment of substantial amount the same is also not a credible defence. Even if for the sake of argument, it is considered that the accused gave a blank signed cheque to the complainant, once accused has admitted his signatures on the cheque he cannot escape his liability on the ground that the particulars have not been filled in by him, or that signatures on cheque and the contents are filled in different writings and inks. When such a cheque containing blanks is signed and handed over, it means that the person signing it has given implied authority to the holder of the cheque, to fill up the blank which he has left. It has been clearly laid down in Section 20 of Gagan Kakkar Vs. Akshun Sudan CC No.25188/2018 Page no. 9 of 13 Negotiable Instruments Act 1881, that where one person signs and delivers to another a Negotiable Instrument either wholly blank or having written thereon an incomplete negotiable instrument, he thereby gives, "prima facie authority to the holder thereof to make or complete, as the case maybe, upon it a negotiable instrument". In the case of Satish Jayantilal Shah v. Pankaj Mashruwala and Anr. 1996 Cri. L. J. 3099, it has been held that:
"no law provides that in case of any negotiable instruments entire body has to be written by maker or drawer only."
In the case of Moideen v. Johny 2006 (2) DCR 421, it has been held that when a blank cheque is issued, the drawer gives an authority to the person to whom it is issued, to fill it up at the appropriate stage with necessary entries and to present it to the bank. Thus, the accused can not dispute the contents of the cheque in question.
19. Ld. Counsel for accused also argued that complainant did not have the requisite sources to advance loan to accused. He also argued that there was no written agreement of the alleged loan and no witnesses to the alleged loan. He argued that same casts doubt on case of complainant regarding any such friendly loan.
20. However, these arguments of Ld. Counsel for accused are also devoid of any merit, as perusal of the evidence shows that accused has not denied acquaintance with the complainant and has also admitted that he had financial transactions with the complainant. Accused admitted that he took Rs. 2,00,000/- from complainant in January 2018 though for purpose of investment. Also, to substantiate his sources of funds, complainant placed on record his bank statement Ex. CW-1/1 showing withdrawal of Rs. 1,20,000/- from his bank account on 08.01.2018. The same was not disputed by accused either in cross- examination of complainant or otherwise throughout trial. Thus, the complainant disclosed sufficient sources to advance the loan. Furthermore, since accused had already admitted taking Rs. 2,00,000/- from complainant, the absence of any Gagan Kakkar Vs. Akshun Sudan CC No.25188/2018 Page no. 10 of 13 written agreement or witness to the transaction does not derive significance.
21. Reliance in this regard can also be placed on decision of Hon'ble High Court of Delhi, in Sanjay Arora V. Monika Singh, Crl. Appeal No. 98/2017, dated 31.05.2017, wherein it was observed:
"Mere admission of the complainant that he was earning only Rs. 12,000 per month from small business or his failure to file income tax returns, or his omission to produce the bank passbook or to examine Chhotu as a witness in corroboration, are inconsequential. In order to rebut the statutory presumption, it was the burden of the respondent to prove the facts she had pleaded in answer to the notice under Section 251 Cr.P.C. No material in support of such plea having come on record, the statutory presumption under Section 139 Negotiable Instruments Act in the case at hand has not been rebutted."
In the present case also the defence taken by the accused is that he had taken the amount from complainant and repaid Rs. 1,20,000/- to him and cheque in question was misused by complainant. However he has failed to produce any material in support of his plea of defence.
22. The accused has also not denied receipt of legal demand notice under section 138 of the Act, stating that the same was received by him through Whatsapp i.e Ex. CW-1/6. Also it is worth noting that the address of the accused as mentioned in legal demand notice is plot no. 152, Khasra No. 589, Ph- II, Gali no. 13, Sangam Vihar, Najafgarh, Delhi, which is the same as his address in notice under section 251 Cr.P.C and his bail bonds. Moreover the accused has not brought on record any evidence to show that he was not residing at above address at time of legal notice. The above shows that legal notice was sent at correct address of accused. Once the legal notice is proved to be sent by post to correct address of accused then the presumption u/s 27 of General Clauses Act, 1897 arises and it shall be presumed unless proved contrary, that legal notice sent to address of accused was delivered to him. In M/s Darbar Exports and Ors. Vs. Bank of India, 2003 (2) SCC (NI) 132 (Delhi), the court held that a presumption of service of notice is to be drawn where the notice is sent through registered post as well as UPC on correct address. In the light of the same the Gagan Kakkar Vs. Akshun Sudan CC No.25188/2018 Page no. 11 of 13 legal notice is deemed to have been served upon the accused. The accused has failed to adduce any evidence to rebut the presumption of due service. As such, the legal notice stood served upon the accused but no payment was made despite the service nor any reply sent to the same. In Rangappa v. Mohan (supra), the Apex Court held:
"Furthermore, the very fact that the accused had failed to reply to the statutory notice under Section 138 of the Act leads to the inference that there was merit in the complainant's version."
The decisions in Santosh Mittal v. Sudha Dayal, 2014 (8) AD (Delhi) 268, and G.L. Sharma v. Hemant Kishor 2015 (2) AD (Delhi) 340, are also to the same effect.
23. Moreover as per the dicta of Apex Court in C.C. Alavi Haji vs Palapetty Muhammed & Anr, 2007 Cr. L.J. 3214, If the accused did not receive the legal notice, he could have made payment of the cheque amount within 15 days of receipt of summons from this court and could have prayed for rejection of the complaint, but this course of action has not been adopted by accused. Hence the defence of non-service of legal notice is without substance.
24. In view of the above, this court is of the considered opinion that apart from not raising a probable defence, the accused was not able to contest the existence of a legally enforceable debt or liability. The complaint disclosed the existence of a legally enforceable debt or liability vide the cheque in question, return memo and the legal notice brought on record. However, accused failed to rebut the presumption in favour of complainant either on the basis of other material available on record or by adducing any cogent defence evidence. There is sufficient material on record to conclude that complainant has successfully proved his case beyond reasonable doubt.
25. Accordingly, the accused is convicted for the offence under Section 138 of Negotiable Instruments Act, 1881.
Gagan Kakkar Vs. Akshun Sudan CC No.25188/2018 Page no. 12 of 13
26. Let the convict be heard on quantum of sentence.
27. Copy of Judgment be supplied to the convict free of cost.
Digitally signed by MRIDUL MRIDUL GUPTA
GUPTA Date: 2019.08.23
15:03:01 +0530
ANNOUNCED IN THE OPEN COURT (MRIDUL GUPTA)
TODAY i.e. 23rd August 2019 METROPOLITAN MAGISTRATE
DWARKA DISTRICT COURTS/ DELHI
Gagan Kakkar Vs. Akshun Sudan CC No.25188/2018 Page no. 13 of 13