Delhi District Court
In Sasseriyil Joseph vs Devassia, 2001 Crl Lj 24, Observed That on 28 March, 2011
1/14 C C No. 1908/10
IN THE COURT OF MS. CHARU GUPTA, MM (NI ACT)01
SOUTHEAST DISTT. SAKET COURTS, NEW DELHI
Sh D D Sharma,
S/o Sh G L Sharma,
R/o C29, Freedom Fighter Colony,
Neb Sarai, New Delhi. . . ........ Complainant
Vs
Man Singh,
S/o Sh Fateh Singh,
R/o H No. 88, Plot No.4,
Sector 7, Harsukh Group Housing Society,
Dwarka, New Delhi . . .......... Accused
C C No. : 1908/10
OFFENCE COMPLAINED OF : U/s 138 Negotiable Instruments
Act
PLEA OF ACCUSED : Not Guilty.
DATE OF INSTITUTION : 07.02.2007
DATE OF RESERVING ORDER : 08.03.2011
FINAL ORDER : Acquitted
DATE OF ORDER : 28.03.2011
Judgment
Brief reasons for judgment :
Brief facts of the case
1.The present is a complaint under section 138 of Negotiable 2/14 C C No. 1908/10 Instrument Act (hereinafter referred to as "the Act") filed by the complainant on the averments that the accused approached the complainant for advancing a friendly loan of Rs. 5,00,000/ in May 2002. It is averred that the accused assured to return the said loan of Rs. 5,00,000/ to the complainant within 2 to 3 years. It is also averred that on the assurance of the accused, the complainant advanced a sum of Rs. 5,00,000/ to the accused in month of May 2002. It is averred that in discharge of partial legal liability, the accused issued a cheque bearing no. 617176 dated 24.11.2006 for a sum of Rs. 2,00,000/ drawn on HDFC Bank, Safdarjung Enclave, New Delhi and assured the complainant to pay the remaining amount of Rs. 3,00,000/ very soon. It is averred that the cheque on presentation by the complainant to its banker was returned unpaid with remarks " Account Closed" vide cheque return memo dated 08.12.2006. It is further averred that the complainant sent a legal demand notice to the accused dated 22.12.2006 through registered AD/UPC. The accused despite the service of the legal demand notice, failed to pay the cheque amount. It is averred that the complaint has been filed within limitation.
Proceedings before the court
2. The accused was summoned vide order dated 20.02.2007 for the offence under Section 138 of the Act. Thereafter ,the accused 3/14 C C No. 1908/10 appeared before the court and was admitted to bail. Vide order dated 12.06.2008, notice under Section 251 Cr.P.C. for the offence under Section 138 of the Act was served upon the accused to which the accused pleaded not guilty and claimed trial and the matter was fixed for complainant evidence.
3. The complainant in support of his case led his evidence by way of affidavit is Ex. CW1/1 reiterating the averments made in the complaint. Cheque is Ex. CW1/A, cheque return memo is Ex CW1/B. Legal Notice is Ex. CW1/C. AD Card is Ex. CW1/D. UPC is Ex. CW1/E.
4. After complainant evidence was led, statement of accused was recorded under Section 313 Cr.P.C., wherein all the incriminating material existing on record including exhibited documents were put to the accused to which the stand of the accused was of general denial. He admitted that he had issued the cheque in question but stated that the same had been issued as security. He stated that the complainant used to raise committee. He also stated that in such committee raised by the complainant of Rs. 2,00,000/ of about 20 members for a term of 20 months, the accused was to contribute Rs. 10,000/ each month. The accused stated that he had paid his share for 17 months but due to some reason he defaulted in payment of last twothree installments. The accused alleged that the complainant did 4/14 C C No. 1908/10 not pay him the committee amount which was decided amongst them neither did the complainant return the security cheque to him. He further stated that he had opened a salary account as he was a Government Servant but due to the reason that his salary was not credited in his account, his account was closed by the bank and not by him. The denied having received any legal notice from the complainant. The accused denied owing any legal debt or liability towards the complainant. The accused pleaded that he had been wrongly implicated in the case.
5. The accused moved an application under section 315 Cr.P.C. and examined himself as a defence witness wherein he denied having taken any loan from the complainant. After the defence evidence was closed, final arguments of both the parties were heard.
6. I have heard the Ld. counsel for the complainant and the accused and perused the record carefully. Ld. counsel for the complainant has argued that the accused had taken a loan of Rs. 5,00,000/ in May 2002 from the complainant on the pretext of purchasing a flat and assured to repay the same within onetwo years. It was further argued that the accused in discharge of his partial liability issued a cheque on 06.12.2006 in the sum of Rs. 2,00,000/ to the complainant. It is argued that the same cheque was dishonoured and a legal notice was sent to the accused within time at the correct 5/14 C C No. 1908/10 address of the accused. It is further argued that the cheque was not issued as a security cheque and even if his plea of misusing of cheque is to be believed, the fact that the accused has not even filed any criminal complaint against the complainant proves that he is concocting story to avoid his liability. It is further argued that the accused has not examined any member of the committee in his defence which goes to show that no such committee was ever raised. The counsel for the accused has argued that the legal notice was never served upon the accused and thus the statutory requirement of section 138 Negotiable Instruments Act has not been complied with. It is further argued that the cheque was given as security and the same has been misused by the complainant. It is also argued that even if it is assumed that the cheque was given against a loan advanced to the accused, the issuance of cheque is much after expiry of limitation period and therefore the claim of the complainant is against a time barred debt which does not fall within the purview of section 138 of the Act. It is further argued by the counsel for the accused that the complainant was not even in a financial condition to advance such a huge sum of Rs. 5,00,000/ which goes to show that the story of the complainant is concocted. It is further argued by the counsel for the accused that the complainant has not examined the persons from whom he has stated to have arranged the said loan of 6/14 C C No. 1908/10 Rs. 5,00,000/. It is further argued that the complainant has failed to produce any record or receipt depicting the advancing of huge sum of Rs. 5,00,000/. It is argued that the complainant remembers no date other than the date written on the cheque.
Appreciation of evidence
7. To prove the allegation and make out an offence u/s 138 Negotiable Instrument Act, the complainant has to prove following ingredients:
(I) There is legally enforceable liability / debt.
(II) The drawer of the cheques issued the cheques to satisfy part or whole of the debt or other liability.
(III) The cheques so issued has been returned due to insufficiency of funds.
(IV) Payment no made by the accused despite service of the legal demand notice.
8. Before further adverting to the facts of the case, it is convenient for the sake of clarity to reproduce section 118 (a) and 139 of the Negotiable Instrument Act, Section 118 (a) read as:
"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."
and section 139 reads as under:
7/14 C C No. 1908/10
"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."
9. As per section 118 (a) of the Act, there is presumption in favour of complainant that the instrument i.e. cheque in dispute is issued for a consideration and further under section 139 of the Act it shall be presumed, unless the contrary is proved, the holder of the cheque received the cheque for discharge, in whole or in part, or any debt or other liability.
10. By virtue of section 139 of the Act, the court has to presume that the cheque had been issued for a debt or liability. The presumption so raised by the court is rebuttable where the burden of proving that the cheque had not been issued for legal debt or liability is upon the accused. To rebut this presumption, the complainant was cross examined wherein it was put to the complainant as to the month and the year in which the accused issued the impugned cheque. The complainant in his cross examination stated that the cheque was issued by the accused in the month of August 2006, however, he did not remember the exact date of issuance of cheque. In the averments contained in para 1 to 3 of his complaint and his affidavit, the complainant has stated that he had advanced a friendly loan of Rs. 5,00,000/ to the accused in May 2002. It has been clearly 8/14 C C No. 1908/10 averred in para 3 of the complaint that in discharge of partial legal liability, the accused had issued the impugned cheque on 24.11.2006. During his cross examination, the complainant stated that the cheque in question was written ( filled up) by the accused in his presence. From the conjoint reading of the complaint and the cross examination of the complainant, it is amply clear that the cheque was issued on 24.11.2006 against the alleged loan advance to the accused in May 2002. In other words, the cheque was issued after about four and a half years after the advancement of loan i.e. clearly beyond the limitation period prescribed for recovery debt. As such, the cheque was not issued against a "legally recoverable debt" as enunciated in section 138 Negotiable Instruments Act read with explanation to it.
11. Explicating the meaning of "legally recoverable debt" the Apex Court in Sasseriyil Joseph Vs Devassia, 2001 Crl LJ 24, observed that the cheques issued on a time barred date would not fall within the definition of "legally enforceable debt" which is essential requirement for a complaint under section 138 of Negotiable Instruments Act. It was further observed that extended meaning of debt or liability has been explained in the explanation to the section which means a legally enforceable debt or liability. Referring to a decision of the Andhra Pradesh High Court reported in Girdhari Lal Rathi Vs T T V Ramanujachari, 1997 (2) Crimes 658 held that where a is issued for 9/14 C C No. 1908/10 a time barred debt and it is dishonoured, the accused can not be convicted under section 138 of Negotiable Instruments Act simply on the ground that the debt was not legally recoverable. A similar view has been adopted by the Delhi High Court in Prajan Kumar Jain vs Ravi Malhotra, I(2010) BC8(decided on 26.10.2009) observing that cheques issued in lieu of a time barred debt does not come within definition of " legally enforceable debt" .
12. During the cross examination of the complainant, it has further come on record that the complainant had advanced Rs. 5,00,000/ to the accused in presence of Mr Vijay Sharma and Rakesh Tokas, however, the complainant failed to examine either of them to prove his case. In this regard, failure to examine Mr Vijay Sharma and Rakesh Tokas is detrimental to the case of complainant in light of Supreme Court Ruling in C Antony Vs K G Raghavan Nair, ( Crl Appeal No. 1748 of 1996) wherein the court observed that nonexamination of Advocate Sh Vijay Kumar was fatal to the case of the complainant because it is the case of the complainant that he came to know the appellant / accused through said Sh Vijay Kumar and the amount in question was paid in the office of said Sh Vijay Kumar. Drawing an analogy from the aforesaid case, it is important for the complainant to examine a person whom he claims to be acquainted with the facts of the case and bases his claim on a transaction of which that person 10/14 C C No. 1908/10 was a party.
13.It has further come on record during the cross examination of complainant that out of the total loan amount of Rs. 5,00,000/, the complainant had arranged for Rs. 2,50,000/ from his elder brother in May 2002, Rs. 1,00,000/ from Rakesh and Rs. 1,50,000/ from Vijay Sharma in May 2002. The fact that the entire loan amount to be advanced to the accused was arranged by the complainant from other persons goes on to show that the complainant was not in a sound financial position to advance such a huge amount of Rs. 5,00,000/ himself. In K Prakashan Vs P K Surenderan, ( Crl Appeal No. 1410 of 2007), the Supreme Court has held that the complainant himself who had no sufficient funds and use to borrow the same from his brothers, father and other s failed to show that he had any financial capacity to advance such a huge amount.
14. Further, the fact that in his cross examination, the complainant has stated that the loan amount has not been shown in his income tax return nor any documentation of advancing Rs. 5,00,000/ has been done anywhere else raises doubts as to the veracity in complainant's version. It is pertinent here to note that the legal notice placed on record in para no.1 reads ".......... in discharge of your partial liability of friendly loan of Rs. 5 Lacs taken by you ......", the numeral "5" has been written subsequent to the typing of the legal notice and by 11/14 C C No. 1908/10 correcting the previously written figure by white fluid. This raises serious doubts as to the genuineness of claim of the complainant. Further, the complainant contradicted himself in so far as whereas in the complaint he has not revealed the source from which he arranged the loan amount of Rs. 5,00,000/ which he for the first time stated in his cross examination. The accused in his statement under section 313 Cr P.C. stated that he does not owe any legal debt or liability towards the complainant and the cheque was given by him to the complainant as a security against the committee raised by the complainant. In the light of above discussions and established principle of criminal law that the complaint has to stand on its own legs and can not draw benefit from the weakness of the defence. The complainant at the outset has failed to establish the very first ingredient of legally enforceable debt or that the cheque was issued by the accused in his favour to satisfy wholly or in part, such debt or liability.
15.As regards, the return of cheque returned unpaid for reasons account closed is well established from the cheque return memo placed on record Ex CW1/B. Section 146 of the Negotiable Instrument Act, reads as under:
" the court shall, in respect of every proceeding under this chapter, on production bank's slip or memo having thereon the official mark denoting that the cheque has 12/14 C C No. 1908/10 been dishonored, presumed fact of dishonored of such cheque, unless and until such fact is disproved."
In view of the above, dishonour of cheque stands proved.
16.As regards, the requirement of service of legal notice upon the accused under section 138 of Negotiable Instrument Act, the accused has denied having received any legal notice from the complainant. On perusal of the record, the address on which the legal notice has been sent is the same as mentioned by the accused on his bail bond i.e. on the address H No. 88, Plot No. 4, Sector 7, Harsukh Group Housing Society, Dwarka, N Delhi. In the present case, the legal notice was sent through registered AD as well as UPC. A presumption of due service is drawn under section 27 of General Clauses Act which provides that where notice is sent to the correct address, the same shall be presumed to have been duly served. In M/s Darbar Exports & Others 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, 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 13/14 C C No. 1908/10 no payment was made despite the service.
17. It is the basic principle of Criminal Law that in order to hold the accused guilty for an offence, all the ingredients of that offence should be established against him beyond reasonable doubt. A burden is therefore cast upon the prosecution / complainant to establish his case beyond reasonable doubt and the prosecution / complainant can not rest his case upon the weaknesses or infirmities in the defence version. The Hon'ble Supreme Court in the case of Krishna Janardhan Bhatt Vs. Datatraya G. Hegde(2008(2)CC Cases(SC)1) held that:
" standard of proof for accused is "preponderance of probabilities"standard of proof on the part of an accused and that of the prosecution in a criminal case is different whereas prosecution must prove the guilt of an accused beyond all reasonable doubt, the standard of proof so as to prove a defence on the part of an accused is "preponderance of probabilities"inference of preponderance of probabilities can be drawn not only from materials brought on records by the parties but also the reference to circumstances upon which he files"
It is also observed by Hon'ble Supreme Court in case " Krishna Janardhan Bhatt Vs. Datatraya G. Hegde" (Supra): "Presumption of innocence is a human right.
Everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law. However, presumption of innocence as human rights 14/14 C C No. 1908/10 and the doctrine of reverse burden introduced by section 139 should be delicately balanced. Such balancing acts, depend upon factual matrix of each case, the materials brought on record and having regard to legal principles governing the same."
18.From perusal of evidence adduced on record and in view of the judgment of Hon'ble Supreme Court, this court has come to the conclusion that the complainant has failed to prove his case beyond reasonable doubt. The accused has raised reasonable doubts and has been able to rebut the presumptions under section 118 (a) of the Negotiable Instrument Act. It stands proved by preponderance of probabilities that the cheque in question was not issued towards any legally recoverable liability or debt. Accused is acquitted. Bail bond is cancelled. Surety stands discharged. File be consigned to Record Room.
Announced in the open court (CHARU GUPTA) 28.03.2011. MM1(N I Act):SE Distt: 28.03.2011