Delhi District Court
Anil Agarwal vs Chanchal Bhalla (Since Deceased) on 14 October, 2022
IN THE COURT OF SH. SANJAY SHARMA-II : ADDL. SESSIONS JUDGE-03,
(CENTRAL): TIS HAZARI COURTS, DELHI
Criminal Revision No. 486/2022
CNR No.: DLCT01-012833-2022
Anil Agarwal
S/o Late M.R. Agarwal
R/o S-206, Panchsheel Park
New Delhi-110017
..... Petitioner
VERSUS
Chanchal Bhalla (since deceased)
Through her legal heirs:
1. Sanjiv Bhalla
S/o Sh. K.K. Bhalla
R/o B-2/15, Model Town-1
Delhi-110009
2. Smt. Sanjana Bajaj
W/o Sh. Rakesh Bajaj
R/o BP-52, Shalimar Bagh
Delhi-110088
Also at: 102-2226, West 12th Avenue
Vancouver, V6k2nf, Canada
Through her SPA: Mr. Sanjiv Bhalla
..... Respondents
Date of Institution : 09.09.2022
Date of Arguments : 13.10.2022
Date of Judgment : 14.10.2022
JUDGMENT
Crl. Revision No. 486/2022 Anil Agarwal vs. Chanchal Bhalla Page 1 of 13
1. The criminal revision petition under Section 397 of 'The Code of Criminal Procedure, 1973' (Hereinafter referred to as 'Cr.P.C.') is directed against summoning order dated 17.09.2019 in complaint case under Section 138 of 'The Negotiable Instruments Act, 1881' (In short 'NI Act') vide CC No. 9622/2019 titled as 'Smt. Chanchal Bhalla (now deceased), through her legal heirs, vs. Anil Agarwal' whereby Ld. MM (NI Act)-03, Central, Tis Hazari Courts, Delhi (In short 'the trial Court') taken cognizance of offence under Section 138 NI Act and summoned the petitioner.
BRIEF FACTS:
2. The case of the respondents is that on 01.07.2011, Smt. Chanchal Bhalla advanced a loan of Rs.
15,00,000/- on interest @ 12% per annum to Sh. Rajender Agarwal, vide Cheque No. 608797 drawn on 'Oriental Bank of Commerce, Kirori Mal College, Delhi-110007. Sh. Rajender Agarwal also executed a promissory note dated 01.07.2011 in favour of Smt. Chanchal Bhalla in this regard. Sh. Rajender Agarwal expired on 02.09.2016. The petitioner, real brother of Sh. Rajender Agarwal, had undertaken to repay the said loan amount and enclosed a cheque in the sum of Rs. 15,00,000/-, vide undertaking dated 27.11.2016. Smt. Chanchal Bhalla expired on 21.04.2018 leaving Sh. Sanjiv Bhalla, Sh. Kewal Krishan Bhalla and Smt. Sanjana Bajaj. Sh. Sanjiv Bhalla is son of Smt. Chanchal Bhalla. Smt. Sanjana Bajaj is her daughter and Sh. Kewal Krishan Bhalla is her husband.
Crl. Revision No. 486/2022 Anil Agarwal vs. Chanchal Bhalla Page 2 of 133. Thereafter, the petitioner issued Cheque No. 000367 dated 04.07.2019 for Rs. 15,00,000/- drawn on 'RBL Bank, Hauz Khas, New Delhi-110016' (In short 'the said cheque') in favour of Smt. Chanchal Bhalla towards repayment of the said loan amount. On presentation, the banker of the petitioner returned the said cheque unpaid with remark 'FUNDS INSUFFICIENT' vide memo dated 11.07.2019. Thereafter, legal heirs of Smt. Chanchal Bhalla (In short 'the complainants') sent demand notice dated 31.07.2019 to the petitioner vide speed post. The petitioner failed to make payment of the cheque amount within stipulated period. The complainants instituted complaint under Section 138 NI Act. SUMMONING ORDER:
4. Vide impugned order, the trial Court summoned the petitioner, as under:
"Pre-summoning of complainant's evidence recorded. Documents exhibited. Arguments heard on the summoning aspect.
This Court has perused the record of the case file. The accused has issued a cheque in favour of the complainant towards discharge of his liability which was returned unpaid as dishonored vide cheque return memo. Thereafter, the legal notice of demand was issued by the complainant. However, the accused has failed to pay the cheque amount within 15 days of the receipt of the aforesaid legal notice. Hence, the present complaint has been filed. There is sufficient material available on record to summon the accused. Therefore, a prima facie case punishable u/s 138 Negotiable Instruments Act, 1881 is made out against the accused. This Court, therefore, takes cognizance of offence u/s 138 Negotiable Instruments Act, 1881."Crl. Revision No. 486/2022 Anil Agarwal vs. Chanchal Bhalla Page 3 of 13
5. Sh. Kewal Krishan Bhalla, husband of Smt. Chanchal Bhalla expired on 17.11.2020.
CRIMINAL REVISION PETITION:
6. Feeling aggrieved and dissatisfied with the impugned order, the petitioner preferred the criminal revision petition.
APPEARANCE:
7. I have heard Ms. Priyadarshini Upadhyay, Advocate for the petitioner and Mr. Narender Chhabra, Advocate for the complainants and examined trial Court record. CONTENTIONS OF LD. COUNSEL FOR THE PETITIONER:
8. Ld. Counsel for the petitioner contended that the trial Court committed manifest error of law in taking cognizance and summoning the petitioner. She contended that the debt is barred by time. She contended that loan was advanced on 01.07.2011 to Sh. Rajender Agarwal, brother of the petitioner and the complainants received the said cheque on 04.07.2019 which is beyond prescribed limitation of three years for recovery of a debt. She contended that the said debt was 'not a legally enforceable debt' on the date of presentation of the said cheque. She contended that a complaint under Section 138 NI Act cannot be filed in respect of a cheque issued in respect of a time barred debt. She contended that the said cheque was issued in the name of a dead person. She contended that Smt. Chanchal Bhalla was not alive on the date of issuance of the said cheque.
Crl. Revision No. 486/2022 Anil Agarwal vs. Chanchal Bhalla Page 4 of 139. Ld. Counsel for the petitioner contended that the complainants are neither 'payee' nor 'holder in due course', under Section 9 NI Act, and they cannot maintain complaint under Section 138 NI Act. She contended that the petitioner had not voluntarily taken over liability of his deceased brother. She contended that the complainants have not returned the cheque issued by the deceased brother of the petitioner, in terms of undertaking dated 27.11.2016. She contended that the complainants have not filed any Special Power of Attorney or authorization pertaining to Smt. Sanjana Bajaj authorizing Sh. Sanjiv Bhalla to file the complaint. She contended that the complainants never made any demand for return of the loan amount. She contended that Mr. Rajender Agarwal repaid substantial part of the loan amount. She contended that the petitioner paid an amount of Rs. 1,82,500/- after demise of Mr. Rajender Agarwal. She contended that there is no legally enforceable debt and the complaint was barred by time and there was no authorization executed by Smt. Sanjana Bajaj and as such, the complaint under Section 138 NI Act is not maintainable.
CONTENTIONS OF LD. COUNSEL FOR THE COMPLAINANTS:
10. Ld. Counsel for the complainants contended that the issue whether the debt was barred by time or not is a question of fact and it cannot be decided without trial. He relied on judgment in Smt. Tarun Samdarshi vs. State (NCT of Delhi) & Anr., (2019) SCC OnLine Del 6711.
Crl. Revision No. 486/2022 Anil Agarwal vs. Chanchal Bhalla Page 5 of 1311. Ld. Counsel for the complainants contended that legal heirs of deceased payee of a cheque are entitled to maintain a case under Section 138 NI Act. He relied on judgment of Hon'ble Supreme Court of India in Shankar Lal vs. Sanyogita Devi (dead), through LRs, Crl. Appeal No. 485 of 2002 decided on 28.10.2009 and Bhagava vs. Sri Kadasiddeshwara Trading Co., ILR 2004 KAR 367. He contended that disputed question of fact cannot be gone into at initial stage of the case. In that regard, he relied on judgment in Rathish Babu Unnikrishnan vs. State (Govt. of NCT of Delhi) and Another, 2022 SCC OnLine SC 513. He contended that there is no infirmity in the cognizance and summoning order. He prayed for dismissal of the revision petition. POINTS FOR CONSIDERATION:
(a) Whether the complaint under Section 138 NI Act was instituted in respect of a cheque issued for payment a time barred cheque?
12. The case of the complainants is that Smt. Chanchal Bhalla, their predecessor in interest, had advanced a loan of Rs. 15,00,000/- to Mr. Rajender Agarwal, vide cheque and promissory note, on 01.07.2011, and after death of Mr. Rajender Agarwal on 02.09.2016, the petitioner had undertaken liability to pay the said loan amount and in that regard, he had issued the said cheque in the name of Smt. Chanchal Bhalla on 04.07.2019 which was dishonoured on presentation with remark 'Funds Insufficient' on 11.07.2019.
Crl. Revision No. 486/2022 Anil Agarwal vs. Chanchal Bhalla Page 6 of 1313. The case of the petitioner is that the said cheque was issued on 04.07.2019 in respect of a debt advanced on 01.07.2011 and as such, the said debt had become barred by time and the complaint under Section 138 NI Act is not maintainable on account of dishonour of the said cheque.
14. This Court does not find any merit in contention of Ld. Counsel for the petitioner. The trial Court had taken cognizance and summoned the petitioner on 17.09.2019. The petitioner has entered appearance through counsel. However, he has never appeared physically before the trial Court. The case is at the stage of explanation of substance of accusations under Section 251 Cr.P.C. Such disputed questions of fact as to whether the said cheque was issued in respect of a debt barred by time or not cannot be navigated at initial stage of the case.
15. In Smt. Tarun Samdarshi vs. State (NCT of Delhi) (supra), Hon'ble High Court of Delhi held, as under:
"2. Having heard the learned counsel for the petitioner, this court is of the view that the petition at best raises questions of fact which cannot be answered or addressed effectively without a proper inquiry or trial and, therefore, cannot be permitted to be raised in the jurisdiction under Section 482 Cr.P.C. [see Rajiv Thapar and Ors. Vs. Madan Lal Kapoor, (2013) 3 SCC 330]. The counsel for the petitioner, however, persisted that this Court renders a decision on the above mentioned contentions.
3. This court is of the view that filing of the petition itself is an abuse of the process of law. The issuance of cheque gives rise to a presumption of the amount being due and consequently an acknowledgement rendering the plea of debt being time barred inconsequential.Crl. Revision No. 486/2022 Anil Agarwal vs. Chanchal Bhalla Page 7 of 13
It will be for the petitioner to show at the trial that the amount was not due or that the cheque had not been issued to the complainant. The reliance placed on Exports India and Anr. Vs. State and Anr., 2006 SCC OnLine Del 1155, a decision rendered by a learned single judge of this Court, is misplaced as the facts are wholly distinguishable.
4. The petition and the application filed therewith are dismissed with costs of Rs. 25,000/-."
(b) Whether legal heirs of the deceased, namely, Smt. Chanchal Bhalla can institute the complaint under Section 138 NI Act?
16. Ld. Counsel for the petitioner contended that the said cheque was issued in favour of Smt. Chanchal Bhalla on 04.07.2019 whereas she expired on 21.04.2018. She contended that the said cheque was not drawn in favour of a living person. She contended that a complaint case on the basis of a cheque drawn in favour of a dead person cannot be maintained. She contended that the complainants are neither 'payee' nor 'holder in due course' and they cannot file the complaint under Section 138 NI Act.
17. Ld. Counsel for the complainants contended that the petitioner had deliberately issued the said cheque in the name of Smt. Chanchal Bhalla. He contended that the complainants being legal heirs of Smt. Chanchal Bhalla are entitled to present the said cheque for encashment and institute complaint under Section 138 NI Act on account of dishonour of the said cheque. He contended that the petitioner did not reply the demand notice.
Crl. Revision No. 486/2022 Anil Agarwal vs. Chanchal Bhalla Page 8 of 1318. In Shankar Lal vs. Sanyogita Devi (dead), through LRs (supra), Hon'ble Supreme Court of India held, as under:
".....There is no provision under the Act which precludes the legal heir of the holder in due course of the cheque to file complaint under Section 138 of the Act. In our opinion that a heir of the deceased holder in due course of the cheque can bring action on the basis of the cheque to recover the amount due thereon to the deceased holder by reason of the fact that he succeeds to the estate of the deceased holder by inheritance i.e.; operational of law and if that be so there is no reason as to why the legal heirs cannot file complaint under Section 138 of the Act. There is, therefore, no reason on principle to hold that a complaint filed by a legal heir of the original holder in due course of the cheque cannot be taken cognizance by the court. In our considered view, neither the cause of action nor the right conferred upon the holder in due course of the cheque to proceed and file complaint under Section 142 of the Act or the offence under Section 138 of the said Act comes to an end after the death of the holder in due course of the cheque. The cause of action certainly survives as the legal heirs step into the shoes of the holder of the cheque in due course by operation of law and are entitled to prosecute and initiate the proceedings under Section 142 of the Act."
19. In Bhagava vs. Sri Kadasiddeshwara Trading Co. (supra), Hon'ble High Court of Karnataka held, as under:
"12. Having regard to the factual aspects and the settled principles of law in this regard, in the opinion of this Court, on the death of the payee, his legal heirs steps into the shoes of the payee for all practical purposes and such a person can also file and prosecute the complaint after completing the legal formalities. It is also necessary to mention that it would be incumbent upon the Complainant to prove that the Complainant is the legal representative of the deceased payee, in the event of accused disputing the same.Crl. Revision No. 486/2022 Anil Agarwal vs. Chanchal Bhalla Page 9 of 13
In the case on hand, the payee had died and the wife of the payee, as the legal heir, had presented the cheque in question and on the cheque being dishonoured, legal notice had also been issued and thereafter, the proceedings had been initiated under Section 138 of the NI Act."
20. In M/s. Sri Sai Mourya Estates & Projects Pvt. Ltd. & Others vs. The State of A.P., rep., by its Public Prosecutor, High Court of A.P., Hyderabad & Another, 2018 SCC OnLine Hyd 43, Hon'ble High Court of Andhra Pradesh held, as under:
"31. From the above provision, it is clear that the 2 nd respondent holds the cheque after the death of his father being the payee and as a legal heir he is entitled to possess the same in his own name and in view of Section 53 he is the holder in due course and can get a full discharge. Thus, under Section 53 of the Act, a legal representative / heir of the payee or holder in due course can maintain a complaint under Section 138 of the Act."
21. Therefore, the complaint filed by the complainants being legal heirs of Smt. Chanchal Bhalla in respect of the cheque issued in her name is maintainable.
(c) Whether the complaint under Section 138 NI Act is not maintainable in absence of Succession Certificate and Special Power of Attorney executed by Smt. Sanjana Bajaj in favour of Sh. Sanjiv Bhalla?
22. Ld. Counsel for the petitioner contended that the complainants have not filed any Succession Certificate in order to show that they are legal heirs of Smt. Chanchal Bhalla and Sh. Sanjiv Bhalla has not filed any Special Power of Attorney or e-mail executed / sent by Smt. Sanjana Bajaj in his favour to authorize him to file the complaint.
Crl. Revision No. 486/2022 Anil Agarwal vs. Chanchal Bhalla Page 10 of 1323. A complaint under Section 138 NI Act cannot be dismissed on account of any defect in authority of the person instituting the complaint. Sh. Sanjiv Bhalla filed the complaint under Section 138 NI Act stating therein that he is authorized by Smt. Sanjana Bajaj. In that regard, he filed an 'Authorization Letter' executed by Smt. Sanjana Bajaj in his favour. Moreover, such defect can be rectified during trial of the case.
24. In Bhagava vs. Sri Kadasiddeshwara Trading Co. (supra), Hon'ble High Court of Karnataka held, as under:
"32. The other contention raised by the counsel for the petitioners that there may be other legal representatives and therefore the complaint filed by one legal heir i.e. the 2 nd respondent is not maintainable. However, that is a matter of evidence and the same can be cured. Apart from that it is not a matter to be considered for quashing the complaint at the initial stage."
(d) Whether the petitioner had issued the said cheque voluntarily to discharge a legally enforceable debt or other liability?
25. As regards contention that Mr. Rajender Agarwal had paid substantial amount to Smt. Chanchal Bhalla and the petitioner had paid an amount of Rs. 1,82,500/- towards repayment of the loan amount after demise of Mr. Rajender Agarwal and the petitioner had not undertaken the said liability voluntarily and further that Smt. Chanchal Bhalla did not return the cheque already issued by Mr. Rajender Agarwal, in terms of undertaking dated 27.11.2016, it can be stated that these are factual defences and they cannot be considered, at this stage.
Crl. Revision No. 486/2022 Anil Agarwal vs. Chanchal Bhalla Page 11 of 1326. The petitioner has admitted issuance of the said cheque in favour of Smt. Chanchal Bhalla towards discharge of debt availed by Mr. Rajender Agarwal. There are statutory presumptions under Section 118 (a) and 139 NI Act that the said cheque was drawn for consideration for discharge of an existing legally enforceable debt or other liability. The petitioner can rebut the said statutory presumptions during the trial of the case.
CONCLUSION:
27. This Court does not find any legal infirmity or material illegality or jurisdictional error in the impugned order which would occasion injustice, if it is not set-aside. Accordingly, the criminal revision petition filed by the petitioner is dismissed. Trial Court record alongwith a copy of judgment be sent to trial Court. The criminal revision file be consigned to record room.
Digitally signed by SANJAY SANJAY SHARMA
SHARMA Date:
2022.10.14
17:29:00 +0530
Announced in the open Court SANJAY SHARMA-II
on this 14th October, 2022 Addl. Sessions Judge-03 (Central)
Tis Hazari Courts, Delhi
Crl. Revision No. 486/2022 Anil Agarwal vs. Chanchal Bhalla Page 12 of 13
Anil Agarwal vs. Smt. Chanchal Bhalla (since deceased), through her legal heirs CNR No.: DLCT010128332022 Crl. Revision No. 486/2022 14.10.2022 Proceedings convened through Video Conferencing. Present : Ms. Priyadarshini Upadhyay, Advocate for the petitioner.
Mr. Narender Chhabra, Advocate for the respondents.
Vide separate judgment, the criminal revision petition filed by the petitioner is dismissed. The criminal revision file be consigned to record room.
Digitally signed by SANJAY SANJAY SHARMA
SHARMA Date:
2022.10.14
17:29:19 +0530
Sanjay SharmaII
ASJ03, Central District,
Tis Hazari Courts, Delhi
NK 14.10.2022
Crl. Revision No. 486/2022 Anil Agarwal vs. Chanchal Bhalla Page 13 of 13