Delhi District Court
Sanjeev Anand vs . Bhupender Kumar Cc No. 13660/17 Page ... on 11 January, 2019
IN THE COURT OF MR. MRIDUL GUPTA, METROPOLITAN MAGISTRATE,
SOUTH-WEST, DWARKA, DELHI
In Re:
CNR No. DLSW02-018780-2017
CC No. 13660/17
Sanjeev Anand
S/o Late Sh. R.K.Anand
R/o 206-A, Roshan Garden,
Najafgarh, Delhi
............Complainant
Versus
Bhupender Kumar
S/o Sh. Prem Singh,
R/o WZ-1192, Ground Floor,
Nangal Rai, New Delhi
.............Accused
(1) Offence complained of or
proved : 138 N.I. Act
(2) Plea of accused : Pleaded not guilty
(3) Date of institution of case : 13.07.2017
(4) Date of conclusion of arguments: 04.12.2018
(5) Date of Final Order : 11.01.2019
(6) Final Order : Convicted
Sanjeev Anand Vs. Bhupender Kumar CC No. 13660/17 Page no. 1 of 12
JUDGMENT
1. Vide this judgment I shall dispose of the complaint filed by the complainant under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the 'Act ').
2. Brief facts relevant for the decision of the case are as under:-
The complainant alleges that he and the accused are well known to each other being employee in the same company named "EQUENT" as Cab Drivers. It is alleged that considering the friendly relationship with the accused, the complainant advanced friendly loan of an amount of Rs. 5,00,000/- to the accused in April, 2016. The accused in discharge of his loan liability gave one cheque of Rs. 3,00,000/- i.e. cheque in question bearing no. 084140 dated 18.04.2017 drawn on ICICI Bank, Janakpuri, Delhi to complainant towards part repayment of loan, with an assurance of its encashment. After due date of cheque in question, the complainant presented the cheque in his account maintained at Union Bank of India, Najafgarh, Delhi, which was returned with the remarks "Funds Insufficient"
vide bank return memo dated 02.05.2017 and 11.05.2017. Thereafter, complainant served a legal notice dated 05.06.2017 upon the accused through his counsel demanding the said amount. Despite service of aforesaid notice, neither any reply was sent nor the money was repaid by the accused. Thereafter, complainant has filed the present complaint case with the submission that accused be summoned, tried and punished according to law.
3. In his pre-summoning evidence, complainant examined himself on affidavit Ex. CW-1/A. He reiterated the contents of complaint and placed on record, original cheque of Rs. 3,00,000/- i.e. cheque in question bearing no. 084140 dated 18.04.2017 drawn on ICICI Bank, Janakpuri, Delhi as Ex. CW-1/1, cheque returning memos dated 02.05.2017 and 11.05.2017 as Ex. CW-1/2 and Ex.CW1/3, legal demand notice dated 05.06.2017 as Ex. CW-1/4, receipts of speed post as Ex. CW-1/5 and tracking reports as Mark-A. Sanjeev Anand Vs. Bhupender Kumar CC No. 13660/17 Page no. 2 of 12
4. Upon appreciation of pre-summoning evidence, accused was summoned for an offence punishable under Section 138 of the Act and notice under Section 251 Cr.P.C. for this offence was framed upon accused on 06.04.2018 to which he pleaded not guilty and claimed trial. He admitted his signature on the cheque in question, however denied filling in any of the remaining details. He stated that he had taken only loan of Rs.3,00,000/- from the complainant in September -October, 2016. He further stated that he repaid the loan in nine EMI's of Rs.30,000/- each and now only an amount of Rs.30,000/- alongwith interest of Rs. 5000/- remains pending towards complainant. He denied receipt of legal notice.
5. The accused moved an application to cross-examine the complainant. Complainant as CW-1 was duly cross examined by the accused. No other witness was produced by the complainant and he closed his evidence by giving a separate statement to this effect. Thereafter, statement of accused under Section 313 Cr.P.C. was recorded in which all the incriminating evidence were put to him to which accused reiterated the stand taken by him in answer to notice U/s 251 Cr.P.C. He stated that he had taken the loan of Rs.3,00,000/- from the complainant in three installments of Rs.1,00,000/- each in April, June and November, 2016. He had given the cheque in question as blank signed security cheque at the time of taking the installment in November, 2016.
6. Accused preferred to lead evidence in his defence and had examined himself as DW-1. The witness was cross-examined by counsel for complainant. The accused did not examine any other witness and vide his statement, defence evidence was closed.
7. Thereafter, matter was listed for final arguments. It was argued by the Ld. counsel for the complainant that this is a fit case for conviction of the accused as all the essential ingredients of Section 138 of the Act read with Section 139 of the Act have been fulfilled and that the same has been aptly demonstrated by the complainant before the court. It was argued that accused admitted his signatures on the cheque in his plea of defence recorded at the time of framing of notice Sanjeev Anand Vs. Bhupender Kumar CC No. 13660/17 Page no. 3 of 12 under Section 251 Cr.P.C as well as in his statement U/s 313 Cr.P.C. He argued that accused never gave reply to the legal demand notice. He also argued that the accused did not produce any written document or receipt regarding the alleged repayment of loan. He also argued that accused never filed a complaint against the complainant for wrongfull retention of cheque in question. It was argued that accused failed to raise the probable defence to disprove the case of complainant and to rebut the presumption under Section 139 NI Act. Therefore, accused be convicted for the offence under Section 138 of the Act.
8. Per contra, on behalf of accused, Ld. Counsel reiterated the submissions made by him in his plea of defence at the time of framing of notice under Section 251 Cr.P.C and in his statement under Section 313 Cr.P.C. that the accused had only taken loan of Rs.3,00,000/- from the complainant. He argued that he had repaid entire loan with interest save an amount of Rs. 30,000/- alongwith interest to complainant and the cheque in question was misused by the complainant. He also argued that the exact date of loan was not disclosed by the complainant. He also argued that complainant did not sufficiently disclosed the sources of funds for present loan and also did not show the amount borrowed from his brother in his ITR. He argued that the purpose of the loan was not clear and there was no written document of the loan. He argued that evidence of complainant suffered from material lapses and was not sufficient to establish the case against accused. He submitted that complainant has failed to prove his case beyond reasonable doubt and accused is entitled to be acquitted of offence u/s 138 of the Act.
9. I have perused the entire record as well as evidence led by the complainant as well as by the accused.
10. Before appreciating the facts of the case in detail for the purpose of decision, let relevant position of law be discussed first:-
For the offence under Section 138 of the Act to be made out against the accused, the complainant must prove the following points, that:-
1. the accused issued a cheque on account maintained by him with a bank.
Sanjeev Anand Vs. Bhupender Kumar CC No. 13660/17 Page no. 4 of 12
2. the said cheque had been issued in discharge, in whole or in part, of any legal debt or other liability.
3. the said cheque has been presented to the bank within a period of three months from the date of cheque or within the period of its validity.
4. the aforesaid cheque, when presented for encashment, was returned unpaid/dishonoured.
5. the payee of the cheque issued a legal notice of demand to the drawer within 30 days from the receipt of information by him from the bank regarding the return of the cheque.
6. the drawer of the cheque failed to make the payment within 15 days of the receipt of aforesaid legal notice of demand.
11. The Act raises two presumptions in favour of the holder of the cheque i.e. Complainant in the present case; firstly, in regard to the passing of consideration as contained in Section 118 (a) and secondly, a presumption that the holder of cheque receiving the same of the nature referred to in Section 139 discharged in whole or in part any debt or other liability.
Section 118 of the N.I Act provides :
"Presumptions as to negotiable instruments: Until the contrary is proved, the following presumptions shall be made: (a) of consideration - that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred was accepted, indorsed, negotiated or transferred for consideration;"
Section 139 of the N.I Act further provides as follows:
"Presumption in favour of holder - it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability".
12. For the offence under Section 138 of the Act, the presumptions under Sections 118(a) and 139 have to be compulsory raised as soon as execution of cheque by accused is admitted or proved by the complainant and thereafter burden is shifted to accused to prove otherwise. These presumptions shall be Sanjeev Anand Vs. Bhupender Kumar CC No. 13660/17 Page no. 5 of 12 rebutted only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability etc. A presumption is not in itself evidence but only makes a prima facie case for a party for whose benefit it exists. Presumptions both under Sections 118 and 139 are rebuttable in nature. Same was held by the Hon'ble Supreme Court of India in Hiten P. Dalal v. Bratindranath Banerjee [(2001) 6 SCC 16].
13. In the present case, accused has admitted his signatures on the cheque in question, in the notice U/s 251 Cr.P.C. He did not deny his signature on the cheque either in cross-examination of complainant, or his statement U/s 313 Cr.P.C and also in defence evidence. Reference can be made to Judgment of Apex Court in Rangappa v. Mohan, AIR 2010 SC 1898,that, "Once the cheque relates to the account of the accused and he accepts and admits the signatures on the said cheque, then initial presumption as contemplated under Section 139 of the Negotiable Instruments Act has to be raised by the Court in favour of the complainant."
Also in the case of K. Bhaskaran Vs. Sankaran Vaidhyan Balan 1999 (4) RCR (Criminal) 309, it has been held by the Hon'ble Supreme Court as under:
"As the signature in the cheque is admitted to be that of the accused, the presumption envisaged in Section 118 of the Act can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears. Section 139 of the Act enjoins on the court to presume that the holder of the cheque received it for the discharge of any debt or liability."
It has been held in M/s. Kumar Exports v. M/s. Sharma Carpets, [2009 A.I.R. (SC) 1518] that the accused may rebut these presumptions by leading direct evidence and in some and exceptional cases, from the case set out by the complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial. Further, the burden may be discharged by the accused by showing preponderance of probabilities and the onus on the accused is not as heavy as it is on the complainant to prove his case. In light of aforestated legal position, let us carry out a scrutiny of the evidence led at the trial.
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14. In the present case, the complainant by way of an affidavit led his own evidence testifying that cheque was issued to him in part discharge of liability, after he had advanced loan of Rs. 5,00,000/- to the accused. The cheque in question, dishonour memo of the cheque and legal demand notice were exhibited on record.
15. The principle defence taken by the accused as brought out from his statement U/s 313 Cr.P.C and his examination in chief as DW-1, is that he had taken a loan of only Rs. 3,00,000/- from complainant and that he had repaid Rs. 2,70,000/- to complainant in nine EMI's of Rs.30,000/- each. It is also his defence that he paid monthly interest of Rs.5000/- for six months to the complainant. It is also his defence that cheque in question was given as a blank signed cheque for security purpose at time of taking loan in November, 2016 from complainant and same has been misused by complainant.
16. However, perusal of evidence shows that said version of accused is not supported by any material on record. The accused in his cross examination as DW-1 admitted that he did not have any written receipt or document regarding payment of EMI's of Rs.30,000/- each and monthly interest of Rs.5000/- to the complainant. Further, even though it is stated that he returned the money to the complainant in cash out of sale proceeds of his shop, he did not produce any material or document to show sale of any such shop. The cheque in question has been dishonored twice vide cheque returning memo dated 02.05.2017 and 11.05.2017 for reason "Funds Insufficient" (Ex. CW-1/2 and Ex.CW-1/3) and not for any other reason. There is no explanation or evidence as to why, if the cheque was not returned after repayment of substantial amount of loan, stop payment instructions were not issued by accused to bank. The accused also admitted in his cross examination that he had not filed any complaint against the complainant for wrongful retention or misuse of his cheques. In light of the above, the version of accused that he had taken a loan of Rs. 3,00,000/- only from complainant which has been repaid, is not credible, as the same is not supported by any evidence on Sanjeev Anand Vs. Bhupender Kumar CC No. 13660/17 Page no. 7 of 12 record.
17. Regarding the averment that cheque was given as blank signed cheque which was misused by complainant after repayment of loan, the same is also not a credible defence. Even if for the sake of argument, it is considered that the accused gave a blank signed cheque to the complainant, once accused has admitted his signatures on the cheque he cannot escape his liability on the ground that the particulars have not been filled in by him, or that signatures on cheque and the contents are filled in different writings and inks. When such a cheque containing blanks is signed and handed over, it means that the person signing it has given implied authority to the holder of the cheque, to fill up the blank which he has left. It has been clearly laid down in Section 20 of Negotiable Instruments Act 1881, that where one person signs and delivers to another a Negotiable Instrument either wholly blank or having written thereon an incomplete negotiable instrument, he thereby gives, "prima facie authority to the holder thereof to make or complete, as the case maybe, upon it a negotiable instrument". In the case of Satish Jayantilal Shah v. Pankaj Mashruwala and Anr. 1996 Cri. L. J. 3099, it has been held that:
"no law provides that in case of any negotiable instruments entire body has to be written by maker or drawer only."
In the case of Moideen v. Johny 2006 (2) DCR 421, it has been held that when a blank cheque is issued, the drawer gives an authority to the person to whom it is issued, to fill it up at the appropriate stage with necessary entries and to present it to the bank. Thus, the accused can not dispute the contents of the cheque in question.
18. Ld. Counsel for accused also argued that no written document of the loan was executed and the exact date of advancing loan was not mentioned in the complaint or evidence affidavit. It was argued that same casts doubt on case of complainant. It was also argued that complainant did not have the requisite sources to advance loan to accused. Reliance has been placed on cross-
Sanjeev Anand Vs. Bhupender Kumar CC No. 13660/17 Page no. 8 of 12 examination of complainant to argue that though complainant stated that the present loan was advanced from the funds of Rs.3,00,000/- taken from his brother, however, the loan taken from the brother was not shown in his ITR. Ld. Counsel for accused argued that same casts doubt on capacity of complainant to advance loan.
19. However, these arguments of Ld. Counsel for accused are also devoid of any merit, as perusal of the evidence shows that accused has not denied financial transactions with complainant and also admitted the factum of taking loan from the complainant, though it is averred that accused took only loan of Rs.3,00,000/- in installments, and not Rs.5,00,000/- from the complainant. This also shows that the accused has clearly admitted the financial capacity of complainant to advance loan to him.
Reliance in this regard can also be placed on decision of Hon'ble High Court of Delhi, in Sanjay Arora V. Monika Singh, Crl. Appeal No. 98/2017, dated 31.05.2017, wherein it was observed:
"Mere admission of the complainant that he was earning only Rs. 12,000 per month from small business or his failure to file income tax returns, or his omission to produce the bank passbook or to examine Chhotu as a witness in corroboration, are inconsequential. In order to rebut the statutory presumption, it was the burden of the respondent to prove the facts she had pleaded in answer to the notice under Section 251 Cr.P.C. No material in support of such plea having come on record, the statutory presumption under Section 139 Negotiable Instruments Act in the case at hand has not been rebutted."
In the present case also the defence taken by the accused is that he had repaid the loan taken from the complainant. However he has failed to produce any material in support of his plea of defence.
20. Regarding averment of Ld. Counsel for accused that though complainant stated in his cross examination that he had taken Rs.3,00,000/- from his brother as sources of present loan, however, he did not show the amount taken from his brother in ITR. This argument of Ld. Counsel for accused is also devoid of any merit as though the amount taken from his brother is not shown in ITR of Sanjeev Anand Vs. Bhupender Kumar CC No. 13660/17 Page no. 9 of 12 complainant, it is trite law that the provisions of Section 269SS of Income Tax Act, 1961, prohibit taking or accepting loan over amount of Rs. 20,000/- in cash and do not make the amount of loan given in cash, unrecoverable in proceedings under Section 138 of the Act. Reliance in this regard can be placed upon the decision of Hon'ble High Court of Delhi in Lekh Raj Sharma v. Yashpal Sharma, (Crl.L.P. 567/2014),D.O.D. 30.06.2015, wherein it was observed:
".......21. The finding that, as the amount of loan disbursed to the respondent was not shown in the balance sheet and income tax return, the appellant could not be said to have proved its case beyond reasonable doubt, is also erroneous.In this regard, reference may be placed on the decisions of the Bombay High Court in:
........
ii) Mr. Krishna P. Morajkar vs. Mr. Joe Ferrao, 2013 CRIJ (NOC) 572 Bombay (Decided on 19.07.2013), wherein the Court observed:
"The underlined observations do not disclose as to where can one find a prohibition on recovering amounts not disclosed in income tax returns. 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 scheme 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 the Income Tax Act. Infraction of provisions of Income Tax Act would be a matter between the revenue and the defaulter and advantage thereof cannot be taken by the borrower. In my humble view, to say that an amount not disclosed in the income tax returns becomes irrecoverable would itself defeat the provisions of Section 138 of the Negotiable Instruments Act."
Therefore, though non-compliance of provisions of Section 269SS of Income Tax Act,1961, may invite penal action under the said Act, however the same cannot operate to undue advantage on borrower who can refuse to pay the loan amount taken by him on this ground.
21. The accused has also denied receipt of legal demand notice under section 138 of the Act. However, it is worth noting that the address of the accused as Sanjeev Anand Vs. Bhupender Kumar CC No. 13660/17 Page no. 10 of 12 mentioned in legal demand notice is WZ-1192, Ground Floor, Nangal Rai, Delhi- 46, whereas his address in notice under section 251 Cr.P.C., statement of accused under section 313 Cr.P.C, testimony as DW-1 and his bail bonds is WZ- 1192A, Third Floor, Mohan Nagar, Pankha Road, Nangal Rai, Delhi. The same does not point that any substantial difference in the addresses in the legal demant notice and the ones furnished by accused in trial. Furthermore, tracking report of speed post of legal demand notice (Mark-A) shows delivery at Nangal Rai S.O. Moreover the accused has not brought on record any evidence to show that he was not residing at above address at time of legal notice. The above shows that legal notice was sent at correct address of accused. Once the legal notice is proved to be sent by post to correct address of accused then the presumption u/s 27 of General Clauses Act, 1897 arises and it shall be presumed unless proved contrary, that legal notice sent to address of accused was delivered to him. In M/s Darbar Exports and Ors. Vs. Bank of India, 2003 (2) SCC (NI) 132 (Delhi), the court held that a presumption of service of notice is to be drawn where the notice is sent through registered post as well as UPC on correct address. In the light of the same the legal notice is deemed to have been served upon the accused. The accused has failed to adduce any evidence to rebut the presumption of due service. As such, the legal notice stood served upon the accused but no payment was made despite the service nor any reply sent to the same. In Rangappa v. Mohan (supra), the Apex Court held:
"Furthermore, the very fact that the accused had failed to reply to the statutory notice under Section 138 of the Act leads to the inference that there was merit in the complainant's version."
The decisions in Santosh Mittal v. Sudha Dayal, 2014 (8) AD (Delhi) 268, and G.L. Sharma v. Hemant Kishor 2015 (2) AD (Delhi) 340, are also to the same effect.
22. Moreover as per the dicta of Apex Court in C.C. Alavi Haji vs Palapetty Muhammed & Anr, 2007 Cr. L.J. 3214, If the accused did not receive the legal notice, he could have made payment of the cheque amount within 15 days of Sanjeev Anand Vs. Bhupender Kumar CC No. 13660/17 Page no. 11 of 12 receipt of summons from this court and could have prayed for rejection of the complaint, but this course of action has not been adopted by accused. Hence the defence of non-service of legal notice is without substance.
23. In view of the above, this court is of the considered opinion that apart from not raising a probable defence, the accused was not able to contest the existence of a legally enforceable debt or liability. The complaint disclosed the existence of a legally enforceable debt or liability vide the cheque in question, return memo and the legal notice brought on record. However, accused failed to rebut the presumption in favour of complainant either on the basis of other material available on record or by adducing any cogent defence evidence. There is sufficient material on record to conclude that complainant has successfully proved his case beyond reasonable doubt.
24. Accordingly, the accused is convicted for the offence under Section 138 of Negotiable Instruments Act, 1881.
25. Let the convict be heard on quantum of sentence.
26. Copy of Judgment be supplied to the convict free of cost.
Digitally signed MRIDUL by MRIDUL
GUPTA
GUPTA Date: 2019.01.11
15:13:13 +0530
ANNOUNCED IN THE OPEN COURT (MRIDUL GUPTA)
TODAY i.e. 11th JANUARY 2019 METROPOLITAN MAGISTRATE
DWARKA DISTRICT COURTS/ DELHI
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