Delhi District Court
Sanit Sadh vs Sunil Kumar Sharma on 8 November, 2023
IN THE COURT OF MS. KAVITA BIST: MM (N.I.ACT) DIGITAL
COURT / EAST DISTRICT, KKD COURTS: NEW DELHI
Sanit Sadh Vs. Sunil Kumar Sharma
CC No. 217/2021
u/s 138 Negotiable Instruments Act, 1881
1. CIS number : 217/2021
2. Name of the Complainant : Sanit Sadh
S/o Sh. S.B. Sadh
R/o 11/153, Second Floor, Lane
No. 7, West Azad Nagar, Delhi
110031
3. Name of the accused, : (i.)Sunil Kumar Sharma
parentage & residential address S/o Sh. Khan Chand Sharma,
ii.) Smt. Mithlesh Sharma
W/o Sunil Kumar Sharma
Both resides at: 11/153, First
Floor, Lane No. 7, West Azad
Nagar, Delhi110031
4. Offence complained of or : u/s 138 Negotiable Instruments
proved Act, 1881
5. Plea of the accused : Pleaded not guilty and claimed
trial.
6. Final Judgement / order : Convicted
7. Date of Judgement / order : 08.11.2023
Date of Institution : 28.01.2021
Date of Reserving Judgement / Order : 21.10.2023
Date of Pronouncement of Judgement / Order : 08.11.2023
CC No. 217/2021 Sanit Sadh Vs. Sunil Kumar Sharma Page No. 1/24
JUDGEMENT
1.) By way of the present Judgement, this court shall dispose off the present complaint filed by Sanit Sadh (herein after referred to as 'Complainant') against Sunil Kumar Sharma and Mithlesh Sharma (herein after referred to as 'accused persons') u/s 138 Negotiable Instruments Act, 1881 r/w section 142 Negotiable Instruments Act, 1881 (herein after referred to as "N.I. Act" in short).
Factual Matrix
2.) The brief facts as alleged by the Complainant in the complaint are that the accused persons are husband and wife and are known to the complainant as the complainant and the accused persons are residing at the same building and they had developed cordial relations with each other and in the last week of March 2019, the accused persons approached the complainant and requested for financial assistance for a sum of Rs. 3 lakh for a period of 11 months. Both the accused persons agreed to pay interest at 2% per month on the abovesaid loan and the complainant had advanced the friendly loan of Rs. 3 lakh on interest of 2 % per month for a period of 11 month on 01.04.2019 to the accused persons and accused persons had also handed over two promissory notes to the complainant and one promissory note handed over to the complainant was executed by the accused no. 1 Sunil Kumar Sharma for a sum of Rs. 150,000/ and other pro note was executed by accused no. 2 Mithlesh Sharma for a sum of Rs. 150,000/ in favour of the complainant. On 02.03.2020 i.e after the expiry of 11 month as agreed upon the accused no. 1 handed over a cheque bearing number 276960 dated 04.03.2020 amounting to Rs. 150,000/ drawn on Oriental Bank of Commerce, Rajgarh Colony, Delhi110031.
CC No. 217/2021 Sanit Sadh Vs. Sunil Kumar Sharma Page No. 2/24However, the same got dishonored upon presentation and thereafter, on 04.11.2020 accused no. 1 again handed over a cheque bearing no. 276963, dated 04.11.2020, amounting to Rs. 150,000/, drawn on Oriental Bank of Commerce, Rajgarh Colony, Delhi110031 and accused no. 2 handed over a cheque bearing no. 363629, dated 04.11.2020, amounting to Rs. 150,000/, drawn on Oriental Bank of Commerce, Rajgarh Colony, Delhi110031 in discharge of their enforceable liability against the complainant.
When the Complainant presented the said cheques, (herein after referred to as 'cheques in question') through his banker SBI, Gandhi Nagar, Delhi branch, the same were returned unpaid by the banker of the accused persons vide returning memos both dated 05.11.2020 with the remarks "Funds Insufficient".
The Complainant thereafter issued a legal demand notice on 04.12.2020 through Counsel calling upon the accused persons to pay the said cheques amount within a period of 15 days from receipt thereof. The said notice was duly served upon the accused persons and the accused persons failed to pay the aforesaid cheques amount within the statutory period.
Hence, the present complaint u/s 138 N.I.Act was filed on 28.01.2021 by the complainant, praying for the accused persons to be summoned, tried and punished for commission of the offence u/s 138 N.I.Act. The complainant has averred that the present complaint is within the period of limitation and fall within the territorial limits of this Court's jurisdiction; thus, being tenable at law.
Proceedings before the Court
3.) Presummoning evidence of the complainant: To prove primafacie case, the complainant led presummoning evidence by way of affidavit, exhibit CC No. 217/2021 Sanit Sadh Vs. Sunil Kumar Sharma Page No. 3/24 CW1, however, as the court was working digitally at that time so the tendering was dispensed with.
4.) Documentary Evidence of the complainant: To prove his primafacie case, the complainant has relied upon the following documents:
a.) Promissory notes executed by accused no. 1 and 2 in favour of the complainant exhibited as CW1/1(OSR) (colly). b.) Original returning memo of cheque bearing no. 276960 exhibited as CW1/2.
c.) Original cheques bearing number 363629 and 276963 exhibited as Ex.CW1/3 (colly).
d.) Original returning memos dated 05.11.2020 exhibited as Ex. CW1/4 (colly).
e.) Legal demand notice exhibited as Ex. CW1/5 (colly).
f.) Returned envelop exhibited as Ex. CW1/6. g) Tracking report exhibited as Ex. CW 1/7. h.) Certificate u/s 65B of Indian Evidence Act exhibited as Ex. CW1/8. 5.) After pursuing the complaint and hearing the argument of the
Complainant on the point of summoning of the accused, primafacie it appeared that the offence u/s 138 N.I.Act has been committed. Hence, cognizance of the offence u/s 138 N.I.Act was taken on 09.02.2021.
6.) Framing of notice and plea of defence: Notice u/s 251 Cr.P.C was framed against the accused no. 1 on 22.01.2022 and accused no. 2 on 08.12.2021 to which they pleaded not guilty and claimed trial. The plea of defence of the accused persons were recorded where they admitted their signature on the cheques in question, however, they had stated that they had not filled the body of the cheques in question. Accused no. 1 stated that he had given the cheque in question to his neighbour namely Ms. Sheela Sadh, from CC No. 217/2021 Sanit Sadh Vs. Sunil Kumar Sharma Page No. 4/24 whom he had taken a loan of Rs. 1 lakh in the year 2018 and he had repaid the same with interest to her in the year 2020 and he does not have any liability towards the complainant and he also stated that he does not know as to how his cheque got in possession of the complainant and accused no. 2 had also stated on same line that she had given the cheque in question to her neighbour namely Ms. Sheela Sadh, from whom she had taken a loan of Rs. 1 lakh in the year 2018 and she had repaid the same with interest to her in the year 2019, however, some interest amount was remained to be returned to her and she further stated that she doest not have any liability towards the complainant and she is unaware that how the cheque got in the possession of the complainant and accused persons had also stated that they did not receive any legal demand notice issued by the complainant.
7.) Evidence of the complainant: After the framing of notice, application u/s 145(2) N.I. Act was allowed orally by the Ld. Predecessor and hence, the case was tried as a summons case and accused persons were granted permission to cross examine the complainant. Thereafter, the complainant was examined as CW1, adopting the presummoning evidence as postsummoning evidence and was cross examined and discharged. No other witnesses were examined by the complainant. Thereafter, complainant evidence was closed, and the matter was put up for statement of accused persons u/s 313 Cr.P.C r/w Section 281 Cr.P.C.
8.) Statement of the accused: Statement of the accused persons were recorded u/s 313 Cr.P.C r/w Sections 281 Cr.P.C on 19.09.2023, wherein all the incriminating circumstances appearing in evidence against the accused persons were put to them to which, accused no. 1 has stated that he did not have any transaction with the complainant, however, his wife i.e accused no. 2 had taken a loan amounting to Rs. 1 lakh in cash on interest in the year 20162017 from CC No. 217/2021 Sanit Sadh Vs. Sunil Kumar Sharma Page No. 5/24 one lady namely Ms. Sheela Sadh i.e the relative of the complainant and the cheques in question were given to Ms. Sheela Sadh for the security of the abovesaid loan and he further stated that he had returned the loan of Rs. 1 lakh along with interest in cash to Ms. Sheela Sadh and again reiterated that he does not have any liability towards the complainant and accused no. 2 has stated almost in same line that she did not have any transaction with the complainant and she had taken a loan of Rs. 1 lakh in cash on 10% interest in the year 2016 2017 from one lady namely Ms. Sheela Sadh i.e the relative of the complainant and afterwards the cheques in question were given to her for the security of the loan and aftersome time the pro notes Ex. CW1/1(colly) were signed by her and her husband for the security of the abovesaid loan and she had further stated that she had returned the loan along with interest in cash to the Ms. Sheela Sadh and she does not have any liability towards the complainant and they again reiterated they did not receive any legal demand notice. The accused persons also stated that they want to lead defence evidence and the present case is a false and fabricated case.
9.) Defence evidence: The accused no. 2 entered the witness box as DW1, however, accused no. 1 did not examine himself. Thereafter, a separate statement of the accused no. 2 closing defence evidence was recorded and defence evidence was closed and then the matter was fixed for final arguments.
10.) Final Arguments: Final arguments were advanced by both sides. I have heard the submission of Ld. Counsel for the complainant as well as the accused. I have also perused the record.
CC No. 217/2021 Sanit Sadh Vs. Sunil Kumar Sharma Page No. 6/2411.) Before deciding the present complaint case u/s 138 of N.I Act, 1881, the following legal requirements must be satisfied from the averments in the complaint as well as the evidence of complainant.
a.) That a person has drawn a cheque, on an account maintained by him with the banker for payment of any amount of money in other person from out of that account for the discharge, in whole or in part, of any legally enforceable debt or other liability;
b.) That the cheque has been presented to the bank with in a period of three months from the date on which it is drawn or within the period of its validity, whichever is earlier;
c.) That the cheque has been returned by the drawee bank unpaid, for the reason that the amount of money standing to be credit of that account is insufficient to honor the cheque or that it exceeds the amount arranged to be paid from that account by agreement made with that bank;
d.) That the payee or holder in due course has made a demand for payment of the said amount of money by giving the notice in writing to the drawer of the cheque within 30 days of receipt of information from the bank regarding the return of the cheque as unpaid;
e.) That the drawer of the cheque fails to make the payment of the said amount of money to the payee or holder in due course within 15 days of the receipt of the said notice;
The aforesaid legal requirements are cumulative in nature, i.e only when all of the aforementioned ingredients are duly proved is the drawer of the cheque deemed to have committed an offence u/s 138 of N.I Act.
CC No. 217/2021 Sanit Sadh Vs. Sunil Kumar Sharma Page No. 7/24The provision of section 138 N.I is buttressed by section 139 and section 118(a) of the N.I. Act. Section 139 of the Act provides that the court shall presume, that the holder of a cheque received the cheque for the discharge, wholly or in part of any debt or other liability. Section 118(a) of the Act provides interalia that the court shall presume, until the contrary is proved, that every Negotiable Instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration.
12.) It is a well settled principle of criminal jurisprudence that a criminal trial proceeds on the presumption of innocence of the accused i.e an accused is presumed to be innocence unless proved guilty. Thus, normally the initial burden to prove is on the complainant/prosecution to prove the guilt of the accused. Also, the standard of prove is beyond reasonable doubt. However, in offences u/s 138 of the N.I Act, there is a reverse onus clause contained in section 118(a) and section 139 of the N.I Act. The presumption u/s 139 and section 118(a) of the N.I Act mandate the court to draw them, when a given set of facts are shown to exist. The same is evident by the peremptory language "Shall presume" used. However, the said presumptions are rebuttable in nature, i.e it is open for the defence to disprove the same by establishing facts to the contrary.
In the case of Hiten P. Dayal Vs. Bratindranath Bannerjee (2001) 6 SCC 16, the Hon'ble Supreme Court had occasion to examine the confines of the presumptions u/s 139 of the Act wherein, it held as follows:
"because both section 138 and 139 require that the court "shall presume" the liability of the drawer of the cheques for the CC No. 217/2021 Sanit Sadh Vs. Sunil Kumar Sharma Page No. 8/24 amounts for which the cheques are drawn, as noted in State of Madras Vs. A. Vaidyanatha Iyer AIR 1958 SC 61, it is obligatory on the court to raise this presumption in every case where the factual basis for the raising of the presumption had been established. It introduces an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the accused. The obligation on the prosecution may be discharged with the help of presumptions of law or facts unless the accused adduces the evidence showing the reasonable possibility of the non existence of the presumed fact. Therefore, the rebuttal does not have to be conclusive establish but such evidence must be adduced before the court in support of the defence that court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of reasonability being that of 'prudent man'"
13.) It is a settled proposition of law that the standard of proof which is required from the accused to rebut the statutory presumption u/s 118(a) r/w section 139 of the N.I Act is preponderance of probabilities. The accused is not required to prove his case beyond reasonable doubt. This onus on the accused can be discharged from the materials available on record and from the circumstantial evidences. At this point, the Hon'ble Supreme Court in M.S Narayan Menon Vs. State of Kerala (2006) 6 SCC 39 has interalia held the following:
"The standard of proof evidently is preponderance of probabilities. Inference of preponderance of probabilities can be CC No. 217/2021 Sanit Sadh Vs. Sunil Kumar Sharma Page No. 9/24 drawn not only from materials on record but also by reference to the circumstances upon which he relies."
14.) It is not always mandatory for the accused to examine its own witness in order to rebut the said statutory presumption. At this point, reliance may be placed on the decision of the Hon'ble Supreme Court in the case of Krishna Janardhan Bhat Vs. Dattatraya G. Hegde AIR 2008 SC 1325, wherein the Hon'ble Court has categorically held the following:
"Accused for discharging the burden of proof placed upon him under a statute need not examine himself. He may discharge his burden on the basis of the materials already brought on record. As accused has a constitutional right to remain silent. Standard of proof on the part of an accused and that of the prosecution in a criminal case is different."
15.) With regard to the factors taken into account for rebutting the presumption u/s 139 r/w Section 118(a) of the Act, the Judgment of Hon'ble Delhi High Court in V.S Yadav Vs. Reena, 172 (2010) DLT 561, assumes importance, wherein, it was held that:
"Mere pleading not guilty and stating that the cheques were issued as security, would not amount to rebutting the presumption raised u/s 139 of N.I Act. The accused, by cogent evidence, has to prove the circumstance under which cheques were issued."CC No. 217/2021 Sanit Sadh Vs. Sunil Kumar Sharma Page No. 10/24
16.) Now, I shall proceed with the legal ingredients one by one and give my finding on whether the evidence on record satisfies the legal ingredients in question or not: a.) "That a person has drawn a cheque, on an account maintained by him with the banker for payment of any amount of money in other person from out of that account for the discharge, in whole or in part, of any legally enforceable debt or other liability."
16.1) This condition pertains to the issuance of the cheque itself. It is pertinent to note that the accused persons in their notice of accusation u/s 251 Cr.P.C have admitted their signatures on the cheques in question. Subsequently, in their statement u/s 313 r/w Section 281 of Cr.P.C admitted their signatures on the cheques in question. Further, the cheques have been drawn on the account of accused persons. This leads to drawing of an inference u/s 139 r/w section 118 of the Act, that the cheques were issued in discharge of a legally recoverable debt or other liability.
16.2) The presumption, having been raised against the accused persons, it falls upon them to rebut it. The accused persons have taken a defence that they did not have any transaction with the complainant and the loan was taken from one lady namely Ms. Sheela Sadh i.e the relative of the complainant and the said loan had been returned to her along with interest so, they do not have any liability towards the complainant. The accused persons have cross examined CW1 and have also led evidence of DW1 in their defence.
16.3) The standard of proof for rebuttal is on preponderance of probabilities. As held by the Hon'ble Supreme Court in decision as K.N Beena Vs. Muniyappan and Anr. (2001) 8 SCC 458, in order to rebut the presumption, CC No. 217/2021 Sanit Sadh Vs. Sunil Kumar Sharma Page No. 11/24 mere denial by the accused will not suffice. The accused must prove by leading cogent evidence that there was no debt or liability.
16.4) Major defence led by the Ld. Counsel for accused is that the cheques in question were given to some other person namely Ms. Sheela Sadh i.e the relative of the complainant and they had already paid the loan amount to her along with interest. In the present case, the onus to prove that accused persons have not issued the cheques in question in favour of the complainant primarily lied on the accused persons. Section 103 of Indian Evidence Act, 1872, enunciates that the person who assurts a fact must prove the same unless the law otherwise provides.
Now, I shall deal with all the defences separately.
Cheques in question were not given to the complainant.
The accused persons have stated in their notice of accusation as well as in their statement recorded u/s 313 r/w 281 Cr.P.C that cheques in question were not given to the complainant and they were given to some other person namely Ms. Sheela Sadh as the loan was taken from her. To prove their defence, the accused persons have failed to examine Ms. Sheela Sadh from whom they had alleged to taken loan. No evidence has been led by the accused persons to prove that the cheques in question were given to Ms. Sheela Sadh. Further, as noted by the Hon'ble Supreme Court of India in M/s Kumar Exports Case Vs. M/s Sharma Carpets Crl. A.No. 2045/2008, the circumstantial evidence has to be seen from the point of reasonable/prudent man. Hence, when the payment was already paid; why did the accused persons did not take any legal action against the complainant for misuse of cheques even after receiving legal demand notice and did not even bother to reply the same . However, the CC No. 217/2021 Sanit Sadh Vs. Sunil Kumar Sharma Page No. 12/24 accused persons in their notice of accusation as well as in their statement recorded u/s 313 r/w 281 of Cr.P.C have stated that they did not receive any legal demand notice but they have not disputed the address mentioned in the legal demand notice and the address mentioned on the bail bonds furnished by the accused persons is the same address which is mentioned in the legal demand notice.
The Hon'ble Delhi High Court in V.S Yadav Vs. Reena (supra), noted that " in order to rebut the presumption of u/s 139 of N.I. Act, the accused, by cogent evidence, has to prove the circumstance under which cheques were issued. It was for the accused to prove if no loan was taken why he did not write a letter to the complainant for return of the cheque. Unless the accused had proved that he acted like a normal business man/prudent person entering into a contract he could not have rebutted the presumption u/s 139 of N.I Act. If no loan was given but cheques were retained, he immediately would have protested and asked the cheques to be returned and if still cheques were not returned, he would have served a notice as complainant. Nothing was prove in this case"
It is also important to mention here that two promissory notes in relation to the loan of Rs. 3 lakh executed by the accused persons are also placed on record by the complainant which are also executed in favour of complainant by accused persons and the same are duly admitted by the accused persons.
In view of above, the contention of the accused persons that the cheques were given to some other person i.e Ms. Sheela Sadh in absence of any evidence regarding the same; execution of pronotes by accused persons; absence of CC No. 217/2021 Sanit Sadh Vs. Sunil Kumar Sharma Page No. 13/24 legal action/communication for misuse of cheques; the defence of the accused persons is only by way of mere bare denial and does not inspire confidence from the standpoint of a reasonable/prudent man.
The body of cheques in question are not filled by the accused persons The accused persons in their notice of accusation have also stated that they have not filled the body of cheques in question. So far as the defence of issuance of blank signed cheque is concerned, the same is untenable, considering the case of "Bir Singh Vs. Mukesh Kumar, 2019 (4) SCC 197 wherein the Hon'ble Supreme Court" observed and held:
"A meaningful reading of the provision of the Negotiable Instruments Act including, in particular, section 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in dishcarge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. It is cheque is otherwise valid, the penal provisions of section 138 would be attracted. If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence."CC No. 217/2021 Sanit Sadh Vs. Sunil Kumar Sharma Page No. 14/24
It is also pertinent to refer Oriental Bank of Commerce Vs. Prabodh Kumar Tewari Crl. A.No. 1260/2022, wherein the Hon'ble Supreme Court held:
"For such a determination, the fact that the details of the cheque have been filled up not by the drawer, but by some other person would be immaterial. The presumption which arises of the signing of the cheque can not be rebutted merely by the report of a handwriting expert. Even if the details in the cheque have not been filled by drawer but by another person, this is not relevant to the defence whether cheque was issued towards payment of a debt or in discharge of a liability."
Therefore, the plea that the details of the cheques in question were not filled by the accused persons is untenable in light of the above mentioned judgments.
The cheques in question were given as security cheques for the payment of the loan.
A contention advanced by the defence which deserved scrutiny is that the cheques in question were given as a security cheque afterwards the advancement of loan to Ms. Sheela Sadh. Even if it is assumed that the cheques in question were issued as security of loan to Ms. Sheela Sadh, by this fact alone, the presumption u/s 139 N.I Act can not be disloged. The law is settled on the point of security or advance cheque. The Hon'ble High Court of Delhi in the case of Suresh Chandra Goel Vs. Amit Singhal (2015) SCC Online DEL 6459 has observed that:
"Section 138 of N.I Act does not distinquished between a cheque issued by the debtor in discharge of his existing debt or other CC No. 217/2021 Sanit Sadh Vs. Sunil Kumar Sharma Page No. 15/24 liability, or a cheque issued as a security cheque on the premise that on the due future date the debt which shall have crystallized by then, shall be paid. So long as there is a debt existing, in respect whereof the cheque in question is issued, in my view, the same would attract section 138 of N.I Act in case of its dishonor."
Therefore, the defence of the cheques being a security cheques does not by itself rebut the presumption.
Maintainability of present complaint case.
Another such plea taken by the defence is that the present complaint is not maintainable as two different cheques were issued by the accused persons and is based on different cause of action. It is important to draw attention on the cross examination of CW1 as far as advancement of loan to accused person is concerned, the complainant in his cross examination has clearly stated that the loan amount to the accused person was given on 01.04.2019 and both the accused persons had come to him to obtain the loan amount together and requested for a friendly loan of Rs. 3 lakh and on their request the complainant had given Rs. 1.5 lakh to each of the accused. As far as this plea is concerned, it is important to draw attention on section 223 Cr.P.C which states what persons may be charged jointly and as per section 223 Cr.P.C persons accused of the same offence committed in the course of same transaction can be charged joinlty.
It is important to draw attention on the judgment of R. Ramachandran Vs. Yerram Sesha Reddy and Anr. 1997 (1) ALD Cri 169 wherein the Hon'ble High Court of Andhra Pradesh has held:
CC No. 217/2021 Sanit Sadh Vs. Sunil Kumar Sharma Page No. 16/24"It is true that section 223 Cr.P.C refers to joinder of charges as such and framing of charges is done only in respect of warrant cases. In a summons case there is no charge as such. The offence under the Act is triable as a summons case. Even if it be true that in a summons case there is no formal charge, the accusation made against the accused up to be intimated to him during his examination u/s 251 Cr.P.C. Such examination takes place of formal charge and it is well settled that the principles of section 218 and 223 Cr.P.C apply not only to warrant cases but also to the summons cases. Therefore, even if the offence u/s 138 of the Act is triable as summons case the principle remains the same."
Now, in the present case the accused persons approached the complainant for a loan of Rs. 3 lakh and the same was given to them by the complainant and accused no. 1 and 2 had issued the cheques for their part liability. As the loan was given to both the accused on same day and also they had approached jointly to the complainant for the loan of Rs. 3 lakh and the cheques in question were given by them on the same day i.e 04.11.2020, so it can be said that the same offence was committed in the course of same transaction by the accused persons and they can be tried jointly as per section 223 Cr.P.C. It is also important to mention that the plea of maintainability has been raised for the first time by the accused persons at the time of final arguments only. In view of the abovesaid facts and judgment the plea taken by the defence is of no force.
Loan amount given to the accused person not shown in ITR.
The complainant in his crossexamination has admitted that he has not shown the loan amount of Rs. 3 lakh given to the accused persons in his ITR. It is CC No. 217/2021 Sanit Sadh Vs. Sunil Kumar Sharma Page No. 17/24 important to draw attention on the judgment of Krishna P. Mojakar Vs. Joe Ferrao and Anr. Crl A.No. 6/2012, wherein the Hon'ble High Court Bombay observed has dealt with the issue of recoverability of loan involving unaccounted transaction:
"with utmost humility, I have to state that I have not come across any provision of Income Tax Act, which makes an amount not shown in the income tax returns unrecoverable. The entire schemes of the Income Tax Act is for ensuring that all amounts are accounted for. If some amounts are not accounted for, the person would be visited with the penalty or at times even prosecution under the Income Tax Act, but it does not mean that the borrower can refuse to pay the amount which he has borrowed simply, because there is some infraction of the provisions of Income Tax Act. Infraction of the provisions of the Income Tax Act would be a matter between the revenue and the defaulter and advantage thereof can not be taken by the borrower. In my humble view, to say that the amount not disclosed in the Income Tax Return becomes irrecoverable would itself defeat the provisions of section 138 N.I. Act."
It is also important to mention here that nothing fruitful has come in the cross examination of complainant which can challenge/doubt the financial capacity of the complainant as far as the loan is concerned. So the financial capacity of complainant remains unchallenged. In view of the abovesaid judgment the plea taken by the accused persons that the loan amount was not mentioned in the ITR of the complainant becomes untenable.
CC No. 217/2021 Sanit Sadh Vs. Sunil Kumar Sharma Page No. 18/24It is also important to draw attention on some of the contradiction by the accused persons. In notice of accusation accused no. 1 has stated that he had taken a loan of Rs. 1 lakh from Ms. Sheela Sadh, however, at the time of recording of statement u/s 313 r/w 281 Cr.P.C, accused no. 1 has stated that his wife has taken a loan of Rs. 1 lakh from Ms. Sheela Sadh and in notice of accusation u/s 251 Cr.P.C accused persons have stated that they had taken the loan in the year 2018, however, at the time of recording of statement u/s 313 Cr.P.C, they have stated that the loan was taken in 20162017.
The upshot of the above discussion is that the said ingredient remains fulfilled in favour of the complainant. Hence, considering the materials available on record, I am of the considered view that the accused has failed to rebut the presumption of legally enforceable debt or liability in favour of the complainant.
b.) "That the cheques have been presented to the bank with in a period of three months from the date on which it is drawn or within the period of its validity, whichever is earlier;"
16.5) This requirement is satisfied on a perusal of the cheques in question Ex. CW1/3 (colly) both dated 04.11.2020 and the returning memos Ex. CW1/4 (colly) which bears the date of 05.11.2020 respectively i.e within a period of three months from the date of issuance of cheques in question. The defence has led no evidence to controvert the same and hence, the ingredient stands fulfilled as against the accused person.
c.) "That the cheque have been returned by the drawee bank unpaid, for the reason that the amount of money standing to be credit of that account is CC No. 217/2021 Sanit Sadh Vs. Sunil Kumar Sharma Page No. 19/24 insufficient to honor the cheques or that it exceeds the amount arranged to be paid from that account by agreement made with that bank."
16.6) Section 146 of N.I Act, 1881 provides that the court shall, on production of bank's slip or memo having therein the official mark denoting that the cheque has been dishonored, presumed the fact of dishonor of such cheque, unless and until such fact is disproved. The bank returning memos Ex. CW1/4 (colly) are on record states that the cheques in question have been returned dishonored for the reason "Funds Insufficient." The defence has led no evidence to controvert the same and the accused person have also admitted the returning memo in their notice of accusation u/s 251 Cr.P.C and hence, this ingredient is also fulfilled as against the accused.
d.) "That the payee or holder in due course has made a demand for payment of the said amount of money by giving the notice in writing to the drawer of the cheque within 30 days of receipt of information from the bank regarding the return of the cheque as unpaid"
16.7) As regard the service of legal demand notice, the complainant has sent the same, Ex. CW1/5 (colly) to the accused persons. The tracking report Ex. CW1/7 is also on record and the same is showing "Item delivery confirmed".
However, the accused persons have denied receiving any legal demand notice in their notice of accusation as well as their statement u/s 313 Cr.P.C r/w 281 Cr.P.C., however, the accused persons have not disputed the address mentioned in the legal demand notice and the same address has been mentioned in the bail bonds furnished by them in the present case.
16.8) Before examining the issue in hand, it would be prudent to run through the legal position on the due service of notice sent by post. Presumption CC No. 217/2021 Sanit Sadh Vs. Sunil Kumar Sharma Page No. 20/24 regarding successful delivery of documents sent by post can be raised by the court as per provision enshrined in section 27 of Genral Clauses Act r/w Section 114 of Indian Evidence Act 1872. In terms of section 27 of General Clauses Act , notice must be deemed to have been served in the ordinary course subject to the fulfillment of the conditions laid down therein. Section 27 reads as under;
"Where any [Central Act] or Regulation made after the commencement of this Act authorises or required any document to be served by post, whether the expression "serve" or either of the expressions "give" or "sent" or any other expression is used, then, unless a different intention appears, the service shall be deemed to the effected by properly addressing, prepaying and posting by registered post, a letter containing the document, and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post."
16.9) Reference can be taken from the decision of Hon'ble Supreme Court in the case of Subodh S. Salaskar Vs. Jay Prakash M. Shah and Anr. (2008) 13 SCC 689 wherein the Hon'ble Court has categorically held that service of notice which is sought to be effected by speed post/registered post shall be deemed to have been served in the ordinary course within few days. Such persumption of delivery of notice can also be raised u/s 114 of Evidence Act.
16.10) After examining the legal position with respect to the service of any notice by way of registered post, it would be prudent to examine the instant case in realm of the above discuss legal position. In the present case, as CC No. 217/2021 Sanit Sadh Vs. Sunil Kumar Sharma Page No. 21/24 discussed above the legal demand notice was sent on the address of the accused which got delivered with postal remarks "Item delivery confirmed". At this point, it is pertinent to know that the accused persons in their defence plea or statement recorded u/s 313 Cr.P.C have not disputed the address on which the legal demand notice was sent. They simply took the plea that they did not receive any legal demand notice.
16.11) Therefore, in the light of the above mentioned judgments of the Hon'ble Supreme Court, I am of the considered view that a presumption regarding delivery of service of legal notice can be raised if the notice is sent through post on correct address of the accused and if it has been returned with remarks "Item delivery confirmed". Hence, in the present case, since, the address of the accused persons on which legal demand notice was sent, is not disputed by the accused persons, the said address seems to be correct. Legal demand notice in the present case was sent on the correct address of the accused persons through speed post, and, therefore, a presumption can be raised about its successful delivery and as accused persons have not lead any evidence regarding the non delivery of legal demand notice, hence, the accused persons have not been able to rebut the presumption of service of legal demand notice. Resultantly, the benefit of the presumption accrues in the favour of the complainant. A bare denial by the accused persons in their notice of accusation and in their statement u/s 313 r/w section 281 Cr.P.C would not assume the character of defence evidence. So this ingredient is fulfilled as against the accused persons.
e.) That the drawer of the cheque fails to make the payment of the said amount of money to the payee or holder in due course within 15 days of the receipt of the said notice;
CC No. 217/2021 Sanit Sadh Vs. Sunil Kumar Sharma Page No. 22/2416.12) In the instance case, the accused persons have denied receiving legal demand notice, both in the notice of accusation u/s 251 Cr.P.C and the statement of the accused u/s 313 r/w section 281 Cr.P.C. However, the accused persons have failed to adduce any evidence in their favour to rebut the presumption of service.
16.13) In C.C Alava Haji Vs. Palapetty Muhd. and Anr. (2007) 6 SCC 555, it was held by the Hon'ble Supreme Court "any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in resepct of the complaint u/s 138 of the N.I. Act, make payment of the cheque amount and submit to the court that he had made payment within 15 days of receipt of summons and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of summons from the court along with the copy of the complaint u/s 138 of the N.I.Act, can not obviously content that there was no proper service of notice as required u/s 138, by ignoring statutory presumption to the contrary u/s 27 of G.C Act and section 114 of the Evidence Act.
"
16.14) Hence, regardless of the said averments in respect of non receipt of legal notice, it was open to the accused persons to make the payment due under the cheques in question within 15 days of service of summons of the instant case. However, the accused persons have admittedly failed to do so, on the ground that they do not owe any liability towards the complainant, a defence CC No. 217/2021 Sanit Sadh Vs. Sunil Kumar Sharma Page No. 23/24 which they have been able to prove at the trial. Hence, this ingredient stands fulfilled as against the accused.
17.) Decision:
As all the ingredients of the offences are cumulatively satisfied against the accused persons, the accused persons Sunil Kumar Sharma and Smt. Mithlesh Sharma are hereby convicted of the offence u/s 138 of N.I. Act.
Copy of the judgment is handed over to the convicts free of cost.
Announced in the open court on 08.11.2023.
(Kavita Bist) MM (N.I. Act) Digital Court East Karkardooma, Courts, NewDelhi CC No. 217/2021 Sanit Sadh Vs. Sunil Kumar Sharma Page No. 24/24