Delhi District Court
Hari Shamsher Kaushik vs Divesh Gupta & Ors. on 24 October, 2011
IN THE COURT OF SH. DHEERAJ MITTAL: M.M-02 (N.I.ACT): SOUTH-
EAST DISTRICT, SAKET COURTS COMPLEX: NEW DELHI
Hari Shamsher Kaushik vs Divesh Gupta & Ors.
CC No.2853/1/2009
U/s 138 Negotiable Instruments Act, 1881
1. Serial Number of the case : 2853/1/2009
2. Name of the complainant : Hari Shamsher Kaushik
S/o late Sardar Singh Kaushik
R/o H.No.57, Bhagwan Nagar,
New Delhi-110 014
3. Name of the accused : 1.Divesh Gupta
parentage & residential R/o 1-5/45, Sector 16,
address Rohini, New Delhi-110 085
2.Dhanu Gupta
W/o Sh.Divesh Gupta
office at Shop No.3,C-II/35,
Sector-3, Rohini
New Delhi-110 085
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 order : Accused No.1 namely Divesh Gupta
is convicted
Accused No.2 namely Dhanu Gupta
is acquitted.
7. Date of order : 24.10.2011
Date of Institution : 13.04.2009
Date of Reserving Order: 10.10.2011
Date of Pronouncement of Order: 24.10.2011
Hari Shamsher Kaushik vs Divesh Gupta & Ors. Page 1 of 14
JUDGMENT
Brief facts of the case and reasons for decision of the case: -
1. This is a complaint filed u/s 138 read with Section 142 of the Negotiable Instruments Act 1881 (hereinafter referred to as N.I. Act).
2 The facts of the case as per the complainant are:
That the accused persons have taken a friendly loan of Rs. 3,00,000/- from the complainant and in the partial discharge of their legally enforceable debt and liability they issued a cheque bearing No.007552 dated 22.08.2008 for Rs.2,00,000/- drawn on ICICI Bank Ltd., New Delhi (i.e. cheque in question), but when the complainant presented the cheque for encashment in the bank, the same was returned unpaid with remarks "Funds Insufficient" vide returning memo dated 10.02.2009. Thereafter, complainant issued a legal notice dated 26.02.2009 to both the accused and demanded money but when the accused persons did not pay the cheque amount the complainant filed the present complaint case.
3. After being satisfied that prima facie case against both the accused u/s Section 138 N.I.Act is made out, cognizance was taken and both the accused were summoned for the offence u/s 138 N.I.Act vide summoning order dated 16.04.2009.
4. After the appearance of the accused persons, notice u/s 251 Cr.P.C was framed against the accused No.1 namely Divesh Gupta on 30.11.2009 and against the accused No.2 namely Dhanu Gupta on 19.08.2011 to which they pleaded not guilty and claimed trial. It is to clarify here that inadvertently notice Hari Shamsher Kaushik vs Divesh Gupta & Ors. Page 2 of 14 u/s 251 Cr.P.C. was not framed against the accused No.2 by my Ld. Predecessor and when the accused moved the Sessions court challenging certain orders of this court, the sessions court ordered to make good/remove certain discrepancies which were left during the trial vide its order dated 12.07.2011 passed in Crl.Revision No.101/2011.
5. In post notice evidence, the complainant examined himself as CW-1 by adopting the affidavit dated 16.04.2009 (Ex.C-1), which he tendered during pre summoning evidence and deposed on the same lines as in the complaint and exhibited the relevant documents as under:-
(i) Cheque bearing No.007552 dated 22.08.2008 amounting Rs.2,00,000/- (Rupees Two Lacs only) drawn on ICICI Bank, New Delhi as Ex.CW1/A.
(ii) Returning memo dated 10.02.2009 with remarks "Insufficient Funds" as Ex.CW1/B.
(iii) Legal demand notice dated 26.02.2009 as Ex.CW1/C. UPC dispatch receipt is Ex.CW1/D, Postal dispatch receipt is Ex.CW1/E and AD card is Ex.CW1/F.
6. Thereafter on 06.08.2010 statement of accused No.1 namely Divesh Gupta was recorded u/s 313 Cr.P.C. read with section 281 Cr.P.C. where all the incriminating evidence was put to him. Whereas statement of accused No.2 Dhanu Gupta was recorded u/s 313 Cr.P.C. on 19.08.2011 in pursuance of directions of the Sessions court vide its order dated 12.07.2011 passed in Crl.Revision No.101/2011.
In the statement recorded u/s 313 Cr.P.C. accused No.1 namely Divesh Gupta did not take any specific stand and simply said that the complaint is false and I am innocent. Whereas in Hari Shamsher Kaushik vs Divesh Gupta & Ors. Page 3 of 14 the statement recorded u/s 313 Cr.P.C. accused No.2 namely Dhanu Gupta said that the cheque in question do not bear her signatures and other contents of the cheque were also not filled by her and she has no knowledge about the cheque in question.
In the defence evidence, the accused No.1 examined only himself as DW-1 whereas accused No.2 namely Dhanu Gupta did not examine herself as a defence witness. Thereafter defence evidence was closed at the statements of both the accused recorded separately. It is noteworthy here that despite a number of opportunities when the accused did not lead any evidence in their defence, their defence evidence was closed by the court vide its separate order dated 19.04.2011. Aggrieved by that order when the accused challenged the same in the sessions court, the sessions court granted one opportunity to both the accused/revisionists to examine themselves as witnesses in their defence vide its order dated 12.07.2011 passed in Crl.Revision No.101/2011. In pursuance of directions of the sessions court opportunity was granted to both the accused to examine themselves as a defence witness but accused No.2 Dhanu Gupta did not choose to examine herself as a defence witness and her statement to that effect that recorded separately.
After the closing the defence evidence matter was fixed for final arguments. Final arguments were heard from both the sides and matter was fixed for the pronouncement of judgment.
7. But before deciding the present complaint case, lets consider the legal provisions. For fastening liability u/s 138 Negotiable Instruments Act following are the requirements: -
Hari Shamsher Kaushik vs Divesh Gupta & Ors. Page 4 of 14(a) Drawing of the cheque by the person on the account maintained by him.
(b) Drawer of the cheque issued the cheque to discharge in whole or in part,any legal enforceable debt or other liability.
(c) The cheque issued has been returned unpaid due to insufficiency of funds or exceeds the arranged amount.
(d) The drawer fails to make payment within stipulated time after the receipt of demand notice.
Further Section 118 Clause (a) of Negotiable Instruments Act provides for presumptions regarding the consideration for the Negotiable Instruments. It reads as under: -
"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".
Section 146 of Negotiable Instruments Act reads as under: -
"The court shall, in respect of every proceedings under this chapter on production of bank's slip or memo having thereon official mark the denoting that the cheque has dishonoured, presume the fact of dishonour of such cheque, unless and until such fact is disproved."
Section 139 of the Negotiable Instruments Act provides for presumption in favour of a holder. It reads as under: -
Hari Shamsher Kaushik vs Divesh Gupta & Ors. Page 5 of 14"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, or any debt or other liability."
The combined reading of above said sections raises a presumption in favour of the holder of the cheque that he has received the same for discharge in whole or in part of any debt or other liability. However, it is settled principle of law that the presumption available u/s 139 Negotiable Instruments Act can be rebutted by the accused by raising a probable defence but the burden of proof is on the accused.
8. I have heard both the counsels and perused the record. Counsel for the complainant argued that accused has failed to rebut the presumption u/s 139 N.I.Act hence they should be punished accordingly.
Per contra, counsel for the accused argued that accused No.1 is entitled to acquittal because he has successfully rebutted the presumption u/s 139 N.I.Act, whereas accused No.2 is not liable for the offence because cheque in question do not bear her signatures.
9. Now coming back to the facts of present case, the two accused in this case namely Divesh Gupta and Dhanu Gupta are husband and wife. It is the case of the complainant that the cheque in question was issued by the both the accused out of their joint account to discharge the liability of friendly loan which they took from the complainant. Since there are two accused namely Divesh Gupta and Dhanu Gupta in this case I will take up the case of both the accused separately.
Hari Shamsher Kaushik vs Divesh Gupta & Ors. Page 6 of 14Firstly, I shall take up the case of accused No.1 namely Divesh Gupta. At the outset, I want to highlight that accused No.1 did not deny the issuance of cheque in question and as per settled law burden comes upon him to rebut the presumption raised u/s 139 N.I.Act. The accused has to rebut the presumptions and prove that the cheque was not issued in discharge of any legal debt or liability. Now, the question arises that how or what is the standard of burden of proof on the accused for rebutting the presumption u/s 139 N.I.Act. By various judicial pronouncements of Apex court as well as of our own High Court now it has been settled that the standard of proof on the accused is mere preponderance of probabilities. To put it in simple words accused can rebut the presumptions by raising a probable defence which could create doubt about the existence of legally enforcible debt or liability against him. It is important to note here the observations made by the Supreme Court in the judgment "Rangappa vs S.Mohan AIR 2010 SC 1898" decided on 07.05.2010 wherein the Apex court has described the standard of proof on the accused to rebut the presumptions raised against him under the N.I.Act. The relevant para of the judgment is reproduced as under: -
".... it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of 'preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise Hari Shamsher Kaushik vs Divesh Gupta & Ors. Page 7 of 14 such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own."
Similar observations have been made by the Apex Court in the following judgments: -
(a) "M.S. Narayana Menon vs State of Kerala" (2006) 6 SCC 39.
(b) "M/s Kumar Exports vs M/s Sharma Carpets" AIR 2009 SC 1518.
(c) "Kamla S. vs Vidyadharan M.J. & Anr." (2007) 5 SCC 264.
(d) "K.Prakashan vs P.K. Surenderan" (2008) 1 SCC 258. Now, let us see whether the accused No.1 namely Divesh Gupta has succeeded to rebut the presumption and prove that the cheque in question was not issued in discharge of a legally enforceable debt or liability.
It is very important to note that the accused No.1 did not take any specific defence or I can say that he could not clarify what he wanted to say in his defence during the entire trial. A bare perusal of his statement recorded u/s 313 Cr.P.C. by my Ld. Predecessor on 06.08.2010 makes it clear that nowhere the accused no.1 said that he did not issue the cheque in question or did not take any friendly loan from the complainant but he simply said that the complaint is false and he is innocent. What the accused No.1 said in his statement is reproduced here for the sake of clarity which reads as "The complaint is false and I am innocent". It is settled law that statement u/s 313 Cr.P.C. is recorded to give an opportunity to the accused to personally explain about the circumstances Hari Shamsher Kaushik vs Divesh Gupta & Ors. Page 8 of 14 appearing against him in the evidence. The accused needs to or I can say that accused should avail the opportunity to explain about the circumstances appearing in evidence against him or he should tell the court that under what circumstances the cheque was issued etc. But in the present complaint case the accused No.1 did not tell anything to the court in his statement and simply said that the complaint is false and he is innocent.
As noted above, one opportunity was granted by the sessions court to the accused No.1 to examine himself as a defence witness but a careful perusal of the deposition of the accused No.1 who appeared as a DW-1 makes it clear that even in his deposition/testimony as a DW-1 the accused No.1 could not clarify what he wants to say in his defence. It is important to note here that in his cross examination the accused No.1/DW-1 specifically admitted that the cheque in question was issued by him. But the accused No.1 in his examination in chief did not tell clearly that why the cheque in question was issued. It may be further underlined that accused No.1/DW-1 said in his examination in chief that I never have any transactions with the complainant but in the next line he said that he have made payment of Rs.80,000/- by way of cheque and Rs.1,00,000/- by way of cash to the complainant in pursuance of MoU dated nil November, 2006. I fail to understand that in the one breath the accused No.1/ DW-1 is saying that he was not having no transaction with the complainant and in the next breath he made certain payments to the complainant in pursuance of a MoU. In his entire examination in chief the accused No.1/DW-1 nowhere told that what was that MoU and between whom it was executed and how the Hari Shamsher Kaushik vs Divesh Gupta & Ors. Page 9 of 14 cheque in question amounting Rs.2,00,000/- came into picture. The accused No.1/DW-1 tendered certain documents in his evidence but he failed to prove any of them. The witness specifically relied upon the MoU Mark-DW1/8 and a receipt Ex.DW1/9 but he could not prove any of these documents. The MoU Mark-DW1/8 cannot be read into evidence being photocopy of the original and receipt Ex.DW1/9 is not proved because the complainant specifically denied the execution of any such receipt and said that this receipt has been forged by the accused No.1/DW-1 at a belated stage just to put pressure upon the complainant to withdraw the present complaint case. The complainant did not admitted the execution of receipt Ex.DW1/9 because specific question was asked from the accused No.1/DW-1 in his cross examination that the receipt has been forged by him, his brother Nitin and his father-in-law. Furthermore, the witness himself admitted in his cross examination that the receipt Ex.DW1/9 was not put to the complainant during cross examination of complainant/CW-1.
In view of above said discussions, I am of considered view that burden of rebutting the presumption u/s 139 N.I.Act was on the accused No.1 namely Divesh Gupta but he has miserably failed to rebut the presumption because he could not tell clearly during the entire trial that what he wants to say in his defence.
Secondly, I shall take up the case of accused No.2 namely Dhanu Gupta who is wife of the accused no.1 namely Divesh Gupta. In notice framed against the accused No.2 u/s 251 Cr.P.C. as well as in her statement recorded u/s 313 Cr.P.C. accused No.2 specifically told that the cheque in question do not bear her signatures and other contents were also not Hari Shamsher Kaushik vs Divesh Gupta & Ors. Page 10 of 14 filled by her and she has no knowledge about the cheque in question, its dishonour and about the legal notice. Further the complainant/CW-1 specifically admitted during his cross examination conducted on 31.07.2010 that the loan transaction in question took place with the accused Divesh Gupta. The relevant line of cross examination of complainant/CW-1 is reproduced herein for the sake of clarity. The line is "the loan transaction in question took place in April/May, 2007 with accused Divesh Gupta". Thus this statement of complainant/CW-1 makes it clear that the complainant was having loan transaction only with the accused No.1 Divesh Gupta. If the complainant would have loan transactions with the accused No.2 also then he would have replied to the question as the loan transaction in question took place in April/May, 2007 with accused Divesh Gupta and Dhanu Gupta.
Furthermore, a bare look on the cheque in question reveals that the cheque in question was signed only by the accused No. 1 namely Divesh Gupta. Although the cheque in question has been issued from the joint account of Divesh Gupta and Dhanu Gupta but as noted above the cheque bears signatures of only accused No.1 namely Divesh Gupta. It is settled law that the offence u/s 138 N.I.Act is made out against that person who is the drawer of the cheque. In the present case the drawer of the cheque is only accused No.1 namely Divesh Gupta and not the accused No.2 namely Dhanu Gupta. The mere fact that the cheque in question was issued from the joint account of accused No.1 & 2 does not make the accused No.2 liable for the offence u/s 138 N.I.Act unless and until the cheque bears the signatures of the accused No.2. Furthermore, the complainant has nowhere pressed or alleged specifically that the accused Hari Shamsher Kaushik vs Divesh Gupta & Ors. Page 11 of 14 No.2 is also the signatory of cheque and she should be punished accordingly. In my considered view, when the cheque in question do not bears the signatures of the accused No.2, she cannot be held liable for the offence u/s 138 N.I.Act merely because the cheque was issued by his husband/accused No.1 from the joint account of the both. In a very important judgment the Punjab & Haryana High Court dealt with the almost similar facts as facts of the present case and held that non signatory of the cheque cannot be held liable for offence u/s 138 N.I.Act merely because the cheque was issued from the joint account by the other person bearing the signatures of only that person. The High Court made these observations in the case titled as "Bandeep Kaur vs S.Avneet Singh" III (2008) BC 523, the relevant paragraph of the judgment is reproduced here "..... though, the cheque was drawn to a joint bank account, which is to be operated by anyone i.e., the petitioner or by her husband, but the controversial document is the cheque, the liability regarding dishonouring of which can be fastened on the drawer of it. In other words, it could well be explained that the cheque was issued by Pawandeep Singh, non-petitioner in discharge of his liability and not by the petitioner. The petitioner neither had any dealings with the complainant, nor she is the drawer. Mere fact that the petitioner happens to be the spouse of the first accused, is hardly sufficient to condemn her as the co-accused with him. On the perusal of the penal provisions as contained under the Act, it transpires that there is no such provision regarding taking cognizance against a person other than the "drawer" of the cheque, subject to the conditions, as mentioned in the proviso to Section 138 of the Act and the other provisions Hari Shamsher Kaushik vs Divesh Gupta & Ors. Page 12 of 14 mentioned in Chapter XVII of the Act....."
In view of above said discussions, I am of the considered view that no offence is made out against the accused No.2 namely Dhanu Gupta, hence, she is acquitted of the offence u/s 138 N.I.Act.
10. Now let see whether the complainant has proved his case against accused No.1 or not. By his affidavit Ex.C-1 complainant has proved all the exhibited documents. By virtue of the Section 146 N.I.Act, dishonour of the cheque stand proved. By virtue of mandatory presumptions of law arising u/s 118 & 139 N.I.Act, existence of legal liability can be treated as proved. It would not be out of place to mention here the latest judgment of Hon'ble Supreme Court in the case of Rangappa vs S.Mohan AIR 2010 SC 1898 decided on 07.05.2010 wherein the court overruled the judgment titled as Krishna Janardan Bhatt vs D.G. Hegde AIR 2008 SC 1325 and held that "The presumption raised by Section 138 of the Act does indeed included the existence of a legal enforceable debt or liability. To the extent, the impugned observation in Krishan Janardan Bhatt (Supra) cannot be correct....." The above said observations of the Hon'ble Apex Court makes it clear that there is a presumption in favour of the holder of the cheque that he has received the same for discharge in whole or in part of any legally enforceable debt or liability.
11. In view of above said discussions, I am satisfied that the burden of rebutting the presumption was on the accused No.1 namely Divesh Gupta and in this case accused No.1 has miserably failed to rebut the presumptions. On the other hand, Hari Shamsher Kaushik vs Divesh Gupta & Ors. Page 13 of 14 complainant had proved his case against the accused No.1 beyond reasonable doubts. Therefore, it is proved that accused No.1 has committed offence u/s 138 Negotiable Instruments Act, hence he is convicted for the same. But as noted above, no case is made out against the accused No.2 namely Dhanu Gupta, hence, she is acquitted of the offence u/s 138 N.I.Act.
The copy of the judgment be given free of cost to the convict. Let the convict be heard on the point of sentence.
Pronounced in the open court (Dheeraj Mittal) on 24.10.2011 M.M.(N.I. Act)-02:SED: Saket Courts: New Delhi Hari Shamsher Kaushik vs Divesh Gupta & Ors. Page 14 of 14