Delhi District Court
Complainant vs . on 26 June, 2015
IN THE COURT OF MS. SWATI KATIYAR, METROPOLITAN
MAGISTRATE05 (E), KKD COURTS, DELHI
CC No. 3140/09
ID No. 02405R017536/09
Sh. Saudagarmal Gupta
S/o Sh. Shyam Dass
R/o 9/3643, Dharampura
Gandhi Nagar, Delhi - 110 031.
...........Complainant
Vs.
Sh. Vipul Jain
S/o Sh. Suresh Chand Jain
R/o 6/325, Geeta Colony
Delhi - 110 031. ..................Accused
Date of Institution : 10.06.2009
Offence Complained of : u/s 138 Negotiable Instruments Act, 1881
Plea of Accused : Not Guilty
Date of Reserving order : 04.06.2015
Date of Decision : 26.06.2015
Decision : Acquitted
J U D G M E N T
1. The present complaint has been filed by the complainant alleging that his son namely Rajesh Gupta was unemployed and was searching for a job. It is alleged that son of complainant came in the contact of the accused and came to know that accused is working as CC No. 3140/09 page 1 of 19 a contractor in Airtel. It is stated that on the proposal of accused, complainant's son started his work with the accused in the year 2006 and since then the relations between the son of the complainant and the accused are friendly and they both started visiting each other's house as well. It is stated that the accused also developed relations with the complainant as the accused paid regard to him since the beginning.
2. It is alleged that the complainant sold his house and was having the money in his hand and a number of time whenever the accused suffered with any need of money, he used to take friendly loan from the complainant against the post dated cheque and always returned the same within the time, so the complainant had trust upon the accused and whenever the accused demanded money, the complainant paid the same.
3. It is further stated that in the month of June 2008, accused asked for a friendly loan of Rs. 25,00,000/ for an urgent piece of work. It is stated that complainant arranged a sum of Rs. 17,50,000/ with difficulty and the same was given to accused as a friendly loan. It is stated that the accused issued post dated cheque for the month of January 2009 with the assurance for encashment of the said cheque on its presentation. It is further alleged that the said amount was arranged by the complainant from different persons on CC No. 3140/09 page 2 of 19 the assurance of the accused for encashment of the cheque on its presentation because the complainant used to trust upon the accused.
4. It is further stated that the persons who gave the loan to the complainant compelled him to return their loans, so the complainant approached the accused to return the loan but accused showed inability and assured to pay the loan in the month of March October 2009 and told that due to some defect payment has been stopped in the account of the work and the cheque may be encashed in the month of March, 2009. It is stated that the accused issued another post dated cheque bearing No. 450143 dated 16.04.2009 in place of the earlier cheque which was returned back to the accused.
5. It is stated that the creditors of complainant did not care for his words and being compelled he had to sell his house bearing No. 103, Gali No.4, Chandu Park, Delhi - 110 051 and from the sale proceeds the loan amount was repaid on the assurance that the cheque dated 16.04.2009 shall be encashed on its presentation. Complainant states that the cheque in question was presented for encashment on 16.04.2009 but the same was returned back with the remarks "Funds Insufficient" vide memo dated 23.04.2009.
6. It is further alleged that the complainant approached the accused again, but the accused did not pay any heed. Complainant CC No. 3140/09 page 3 of 19 alleges that on 28.04.2009, when he compelled the accused to repay the loan amount, then accused flatly refused to pay the loan to the complainant and to discharge the liability against the cheque in question.
7. Complainant further submits that he approached the accused number of times but neither the accused discharged the liability nor gave any satisfactory reply. It is stated that on 28.04.2009, complainant again approached the accused and asked to discharge the liability of the said cheque but accused failed to do so.
8. Complainant states that he got issued one legal notice dated 28.04.2009 to the accused through AD/UPC through his Advocate Sh. R.S. Goswami , however, despite being served, accused has failed to reply or comply with the same.
9. Feeling aggrieved from the conduct of the accused, complainant has filed the present complaint praying that accused be summoned, tried and punished in accordance with Section 138 of Negotiable Instruments Act.
10. Presummoning evidence was led by the complainant on CC No. 3140/09 page 4 of 19 27.06.2009. Prima facie case was made out against the accused and accused was summoned vide order of the same date.
11. Accused entered appearance on 27.07.2009 and notice was framed upon him on 10.09.2009 to which the accused pleaded not guilty and claimed trial.
12. In post summoning complainant's evidence, complainant examined himself as CW1 and adopted his affidavit Ex. P1 tendered at the stage of presummoning evidence. CW1 also relied upon the documents Ex. CW1/A to Ex. CW1/F. Ex. CW1/A is the cheque in question, Ex. CW1/B is the return memo, Ex. CW1/C is the legal notice, Ex. CW1/D is the postal receipt, Ex. CW1/E is the UPC receipt and Ex. CW1/F is the returned envelope.
13. During crossexamination by Ld. Counsel for accused, CW1 deposed that he knew the accused since the year 2006. He deposed that his son was educated upto 10th or 11th standard and was not in permanent employment. CW1 was not able to depose as to since when his son knew the accused or came in contact with accused. CW1 deposed that he does not have any documentary proof to show that his son was working with accused or that accused was CC No. 3140/09 page 5 of 19 contractor in Airtel. He deposed that he does not know the address of accused and could not remember the address on which legal notice was sent. He deposed that his monthly income was Rs. 5000/ to Rs. 6000/ per month from his shop in the year 2006 and there was no other source of income. He deposed that his son had no income and his son used to earn little money from the work he used to do. He deposed that he does not know monthly income of his son as he never gave any money to complainant. He deposed that he had never visited house of accused. Complainant stated that he had sold his house bearing no. 9/3643, Dharampura to one local shopkeeper for Rs. 37 lacs about four to five years back. He deposed that after selling his house, he was residing at house no. 103, gali no.4, Chandu Park, which was also later on sold. He deposed that he had received the entire amount of Rs. 37 lac in cash and teh same was kept in his house at Chandu Park. He deposed that he had never filed any Income Tax Return . Complainant further deposed that accused had taken money from him on six or seven occasions but he used to return the same. Complainant deposed that accused had taken Rs. 10,000/, Rs. 15,000/ and Rs. 20,000/ from him on different occasions but he could not remember the date, time and year when he had given the same to accused. Complainant further deposed that there was no written documentary proof of the aforesaid transactions.
CC No. 3140/09 page 6 of 19 He deposed that he had not taken any security cheque qua the aforesaid transactions and that accused had given cheque only for present transaction. Complainant admitted that accused had not given him any other cheque except the cheque in question. He denied the suggestion that he had not sold any house to give money to the accused and thus, he does not know the name of purchaser or the date of sale.
14. Complainant further deposed that he had not maintained any record regarding giving or taking of cheque and after selling of his house, he had kept entire money at his home. He deposed that he kept entire money for about two years at his home but the same is not reflected in his income tax return. He deposed that accused never gave him any post dated cheque for the month of January, 2009 in respect of present transaction. He deposed that there was no written agreement in respect of Rs. 17,50,000/ paid to the accused by him and that he does not remember the exact date, however, the amount was paid to the accused in the second month of year 2008. CW1 further deposed that he was not visiting the house of accused. CW1 admitted that he had not given Rs. 17,50,000/ to the accused by taking loan from different persons. The witness was confronted with his affidavit Ex. P1 at paragraph 3 from point A to A1 where it was CC No. 3140/09 page 7 of 19 written that complainant had arranged money from different persons on assurance of accused. CW1 further deposed that he had changed his address, however, he denied that the address was changed in order to avoid his liability towards different creditors. He deposed that he had never went to the office of accused in the month of March, 2009 and he does not know if he had given notice to accused with respect to cheque bearing no. 450243. He admitted that he had never instructed his counsel to give notice to accused in respect of cheque no. 450243 and he could not remember if he had filed complaint in respect of cheque no. 450243 or whether his affidavit was in respect of cheque no. 450143. The court observed during crossexamination that cheque in question was 450243. Complainant explained that he does not know the cheque number since the same was written in English. He deposed that his daughterinlaw was working in LIC and collecting the premium of policies on commission basis. He deposed that in the year 2008, his son and daughter inlaw were staying with him. He was not able to state if his daughterinlaw used to collect the premium of policies from accused . He deposed that accused had given him duly filled cheque. He denied the suggestion that his daughter in law had filled the present cheque in question or that the accused had given him a blank but signed cheque. He was not able to state whether the accused had to pay premium of Rs. 3859/ to his CC No. 3140/09 page 8 of 19 daughter in law Lata Gupta. He denied the suggestion that the cheque was given to Lata Gupta for payment of premium or that the cheque was given to him by Lata Gupta which was blank. He denied the suggestion he had got cheque filled by his daughter in law Lata Gupta and misused it in this case. He deposed that he could not identify the handwriting of his daughter in law. He denied the suggestion that there is no financial liability of accused towards him or that no legal notice has been sent or received by the accused or that he had misused the cheque in question. He denied the suggestion that he was deposing falsely. No further evidence was led by complainant.
15. Statement of accused under Section 313 Cr.P.C was recorded on 11.12.2012 wherein he denied the case of complainant and pleaded innocence. He stated that he had given the cheque to son of the complainant for LIC premium and that he did not know the complainant at the time of issuance of cheque but he came to know him later on. He explained that he had no financial liability towards the complainant and that he did not know as to how the complainant came in possession of the cheque in question. He expressed willingness to lead evidence in defence.
16. In defence evidence, accused has examined three CC No. 3140/09 page 9 of 19 witnesses. DW1 is Sh. Vijay Narain who deposed that he knows the accused for last 78 years and he also knows son of complainant i.e. Rajesh Gupta, who is his friend. He deposed that accused had taken LIC policy from the wife of Rajesh Gupta and accused used to pay monthly premium of LIC policy to Smt. Lata Gupta by way of blank signed cheques. He deposed that Lata Gupta used to issue receipt for premium by keeping in envelop to accused and he came to know that father of Rajesh Gupta had filed a case against accused. During crossexamination by Ld. Counsel for complainant, DW1 deposed that he was a commission agent, but he could not tell the code number of LIC agent in respect of Lata Gupta He deposed that he could not remember the time when agency was given to Lata Gupta by LIC and he does not know if she is agent of any other company. He was not able to tell if Lata Gupta is the agent of General Insurance Company. He denied the suggestion that Lata Gupta was not the agent of LIC. He produced one envelop Ex. DW1/DA bearing the stamp of Lata Gupta as LIC agent and name of accused to show that Lata Gupta was agent of LIC. He stated that the envelop was lying in his office. He admitted that Lata Gupta did not stamp over the envelop and did not write the name of accused. He admitted that he had never dealt with Lata Gupta and that he could not tell the detail of policy, which the accused obtained through Lata Gupta. He also could not tell the CC No. 3140/09 page 10 of 19 code or place from where accused obtained LIC. He stated that accused used to visit his office and thus he came in possession of envelop Ex. DW1/DA. He was not able to tell if accused had prepared Ex. DW1/DA himself. He denied the suggestion that Ex. DW1/DA was not lying in his office and that same was given to him by the accused. He admitted that he was having good relation with the accused and that he had been called by the accused to depose in Court. He stated that he was not aware if there was any transaction of money between accused and Rajesh Gupta and that he knew that Lata Gupta was wife of Rajesh Gupta and he had seen her in his house.
17. DW2 is Sh. Chander Prakash Sharma, Assistant Administrative Officer, LIC of India, who brought summoned record i.e. Proposal Form No. 300 in the name of accused, which was exhibited as Ex. DW2/A. He also brought on record Ex. DW2/B i.e. Form No. 3260, which is to be submitted by proposer, Ex. DW2/C i.e. Form No. 3251 containing confidential record alongwith copy driving licence Mark D1, Ex. DW2/D i.e. Medical examination form of accused and Ex. DW2/E i.e. Police bond alongwith statement of account of policy. He deposed that all documents were attested by Sh. B.K.Kashyap, the manager EDMS. DW2 identified his signatures in the Court. Nothing material was culled out during cross CC No. 3140/09 page 11 of 19 examination of DW2 by Ld. Counsel for complainant, however, on a later date, one Ms. S. Balameenakshi, Administrative Officer, LIC appeared on behalf of DW2 and stated that as per record there was no written complaint in their records against agent Lata Gupta by policy holder namely Vipul Jain.
18. DW3 is Mukesh Kumar, clerk in IDBI Bank, Delhi who brought summoned record i.e. Attested copy of cheque bearing no. 450238 dated 25.09.2007 in the sum of Rs. 3859/ drawn on their bank by accused and encashed in account of LIC of India i.e. Ex. DW3/A. During crossexamination by Ld. Counsel for complainant, he admitted that cheque Ex. DW3/A was issued by cheque holder in name of LIC of India which was encashed in account of LIC. Witness was shown cheque Ex. CW1/A and he admitted that cheque Ex.DW3/A was issued by cheque holder in the name of LIC of India which was encashed in the account of LIC. He was shown cheque Ex. CW1/A and he admitted that cheque Ex. CW1/A and Ex. DW3/A were of the same series and issued by cheque holder i.e. accused. He admitted that cheque Ex. DW3/A was not filled up in his presence and that he does not know the handwriting of accused. He also could not state whether Ex. CW1/A had been filled by accused or not. He admitted that he is not handwriting expert. He denied the suggestion CC No. 3140/09 page 12 of 19 that he was telling lie in regard of handwriting at the instance of accused. No further evidence was led by accused.
19. Final arguments were advanced at length by Sh. R.S. Goswami, Ld. Counsel for complainant and Sh. C.S.S. Tomar, Ld. Counsel for accused.
20. I have considered the submissions and perused the record carefully.
21. Section 138, Negotiable Instruments Act has been enacted to lend credibility to the financial transactions. The main ingredients of the offence under Section 138 Negotiable Instruments Act are:
(I) Drawing up of a cheque by the accused towards payment of an amount of money for the discharge in whole or in part of any debt or any other liability (II) Return of the cheque by the bank as unpaid, (III) The drawer of the cheque fails to make the payment of the said amount of money within 15 days of the receipt of notice under proviso (b) to Section 138.
22. Apart from this, Section 139 Negotiable Instruments Act CC No. 3140/09 page 13 of 19 lays down a presumption in favour of the holder of cheque in following terms, "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".
23. Thus, in cheque dishonor cases, what the courts have to consider is whether the ingredients of the offence enumerated in Section 138 of the Act have been met and if so, whether the accused was able to rebut the statutory presumption contemplated by Section 139 of the Act. It is also a settled law that accused has to raise only a probable defence to rebut the presumptions in favour of the complainant.
24. Having said so, we shall now advert to the first ingredient of Section 138 Negotiable Instruments Act viz. the cheque was issued by accused towards discharge of any debt or liability. The case of the complainant is that the cheque in question was issued by the accused towards discharge of friendly loan taken by him. Accused on the other hand has specifically denied having taken any loan from the complainant.
CC No. 3140/09 page 14 of 19
25. Now, complainant has not placed on record any document whatsoever to show that he had advanced loan of Rs. 17.5 lacs to the accused. Complainant in his examination had deposed that the loan amount was arranged from a number of creditors, however, in his crossexamination, complainant has categorically admitted that the said amount was not arranged by taking loan from different persons. Further, as per complainant, he had paid off his creditors by selling his property, however, none of the sale documents have been placed on record to fortify submissions of complainant. Complainant has not even examined any of his alleged creditors to prove that he had arranged loan from them for giving the alleged sum to accused. Complainant has also categorically deposed that he does not pay income tax return, thus, there is not even an ITR on record reflecting the alleged loan. Thus, apart from the selfserving statement of complainant, there is neither any documentary nor any oral evidence on record to prove that a loan of Rs. 17.5 lacs was advanced to accused by complainant.
26. Apart from these, there are other discrepancies in the case of complainant as well. For instance, in his examination, complainant had deposed that the loan was advanced to accused in the month of June, 2008. However, during crossexamination, CW1 CC No. 3140/09 page 15 of 19 had deposed that the loan was advanced to accused in the second month of year 2008 i.e. in the month of February, 2008. Furthermore, complainant had stated in his examination, that accused had taken loan from him on earlier occasion as well and a post dated cheque was always given by accused qua the said loans. However, during crossexamination, complainant has contradicted his own version and stated that accused had not given any cheque to him prior to the issuance of cheque in question. Further, with respect to transaction in question, complainant stated in his affidavit that accused had given a post dated cheque to him to be encashed in the month of January, 2009, however, the said cheque was returned to accused and in lieu of same, present cheque was issued. Now, during crossexamination, complainant had again contradicted himself by deposing that accused had not given him any postdated cheque for the month of January, 2009 with respect to present transaction.
27. In addition thereto, complainant has also not able to prove satisfactorily that accused had issued the cheque in question to him. Complainant in his examination has repeatedly stated that he had approached the accused for demanding the loan amount but he was rebuffed on each occasion by the accused and upon much persistence, ultimately the cheque in question was issued by CC No. 3140/09 page 16 of 19 accused. However, during crossexamination, complainant has repeatedly admitted that he had never visited the house of accused nor could he remember the address of accused. Thus, if the complainant had never visited the house of accused, it is inexplicable as to how accused gave the cheque in question to him and complainant acquired possession of the same. Complainant has not bothered to explain this aspect and his deposition with respect to issuance of cheque by accused is vague throughout the record.
28. Accused on the other hand has explained that cheque in question was given by him to the daughterinlaw of complainant Smt. Lata Gupta who was a LIC agent towards his LIC premium. To prove his version, accused has examined DW 2 who has brought on record document Ex. DW/A which clearly shows that daughterinlaw of complainant was working as LIC agent and accused was her client. Complainant has also admitted in his crossexamination that his daughterinlaw was working as an LIC agent. Thus, accused has raised a probable defence in his favour and has rebutted presumptions in favour of complainant. Complainant on the other hand has failed to establish the basic ingredient of offence punishable under section 138 Negotiable Instruments Act. His version is full of glaring contradictions and inconsistencies and cannot be relied upon.
CC No. 3140/09 page 17 of 19 In Rangappa v. Sri Mohan, (2010) 11 SCC 441 , Hon'ble Supreme Court has observed that, "However, there can be no doubt that there is an initial presumption which favours the complainant. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transaction. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused/ defendant cannot be expected to discharge an unduly high standard or proof. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a presuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof of 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 such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/ her own."
29. Thus in the present case as well, accused has raised a probable defence which has been established on preponderance of probabilities on the basis of the evidence brought forth by the complainant himself. The complainant on the other hand has failed to CC No. 3140/09 page 18 of 19 prove beyond reasonable doubt that the accused had taken loan from him and issued the cheque in question towards discharge of liability.
30. In view of the entire observations and discussion made above, it is held that the presumption under Section 139 of Negotiable Instruments Act has been rebutted by the accused and the complainant has failed to establish that the cheque in question was issued by the accused towards discharge of any debt or liability. When the core ingredient of Section 138 Negotiable Instrument Act has not been made out then it would be futile exercise to analyze other ingredients of Section 138 of the Act. Accordingly, it is held that the offence under Section 138 Negotiable Instruments Act, 1881 is not made out against the accused. The complaint stands dismissed and accused stands acquitted. File be consigned to Record Room. Announced in Open Court on 26.06.15 (Swati Katiyar) Metropolitan Magistrate05 Karkardooma, East District, Delhi.
CC No. 3140/09 page 19 of 19