Delhi District Court
In Re: Manisha Chandel vs . Monika Bhola on 6 July, 2023
IN THE COURT OF SH. SHASHANK NANDAN BHATT,
MM, NI ACT-06, SOUTH WEST, DWARKA, DELHI
IN RE: MANISHA CHANDEL VS. MONIKA BHOLA
CC No. 12702/20
CNR No. DLSW02-018410-2020
Manisha Chandel
W/o Sh. Ramesh Chandel
R/o 271, Kangra Niketan,
New Delhi-110018 ........Complainant
Versus
Monika Bhola
W/o Sh. Puneet Bhola
R/o KG-III/103, Vikas Puri,
New Delhi-110018 .........Accused
DATE OF INSTITUTION : 04.07.2014
OFFENCE COMPLAINED OF : U/s 138 N I
Act
DATE OF JUDGMENT : 06.07.2023
DECISION : Acquitted.
JUDGMENT
1) The instant matter has originated out of a complaint under section 200 CrPC read with Section 138 Negotiable Instruments Act (hereinafter referred to as the 'N I Act'), filed by the complainant against the accused alleging that cheque dated 28.03.2014, amounting to Rs. 25,000/- bearing no. 828233 (Andhra Bank), issued by the accused in favour of the complainant, in discharge of a legal debt or other liability, has been dishonoured and the accused has not paid the said amount even after receiving the prescribed legal demand notice.
Brief Facts of the case
MANISHA CHANDEL VS. MONIKA BHOLA Page 1 of 30
CC No. 12702/20 Judgment
2) In brief, the case of the complainant is that the complainant used to deposit money in the form of committee (Chit Fund) for more than 9-10 years with one Smt. Usha. The accused - Monika Bhola, who was a partner of the said Smt. Usha, informed the complainant that she is starting her separate committee/ chit fund business and induced the complainant to join the same stating that she will give more profits as compared to Smt. Usha. Thereafter, the complainant started depositing money with accused- Monika Bhola, in the form of committee (chit fund). Subsequently, the accused - Monika Bhola, also allured the complainant to invest her money with her husband - Puneet Bhola by stating that Puneet Bhola would pay an yearly interest of 30% on the invested amount, by re-investing the money in in gold and property.
3) The complainant has further averred that she subsequently came to know that both the accused and her husband had cheated and siphoned crores of money from several innocent people in the past. Thereafter, when the complainant approached the accused for returning her money along with 30% interest, the accused threatened the complainant with dire consequences of killing her and involving her in false criminal cases. Left with no other option, the complainant along with other members of the committee, lodged a complaint dated 21.03.2014 before Economic Offences Wing, Delhi, and with PS Vikaspuri, but both the accused and her husband requested the complainant to not take any legal action. In order to discharge her liability, the accused issued the cheque in question (the details of which are mentioned hereinabove in paragraph no. 1 of the judgment), with an assurance that the same shall be encashed upon presentation as per the promissory note and receipt dated 28.03.2014. Thereupon, the complainant presented the cheque in MANISHA CHANDEL VS. MONIKA BHOLA Page 2 of 30 CC No. 12702/20 Judgment question for encashment in her bank, but the same got dishonored with the reason 'Funds Insufficient' vide return memorandum dated 01.05.2014. Thereafter, the complainant served a legal notice dated 13.05.2014 upon the accused, via speed post. Even after service of the legal demand notice and the expiry of the prescribed period, the accused failed to make payments, after which, the present complaint was instituted by the complainant.
4) Initially, the present complaint was filed against accused Monika Bhola (accused no. 1) and her husband Puneet Bhola. Upon institution of the present complaint, summons were issued qua accused - Monika Bhola and vide order dated 24.11.2014, the proceedings against the proposed accused - Puneet Bhola were dropped by the Ld. Predecessor Judge. Upon the appearance of the accused- Monika Bhola, notice u/s 251 Cr.PC was framed against her vide order dated 24.11.2014 to which she pleaded not guilty and claimed trial. In the defence recorded u/s 251 Cr.P.C., the accused admitted her signatures over the cheque in question and stated that the other particulars over the cheque in question were filled by the complainant. She further stated that the cheque in question was given by her to the complainant before 2012 as there was some amount due towards the complainant which has already been repaid by her. She further stated that she had asked the complainant to return her cheque but the complainant did not do so. She also stated that she did not receive the legal demand notice. Thereafter the matter was listed for CE.
5) In support of her case, the complainant - Manisha Chandel has examined himself as CW-1 and relied on the following documents:
i) Promissory note dated 28.03.2014 as Ex.CW- 1/1;
ii)Cheque in question as Ex.CW1/2;MANISHA CHANDEL VS. MONIKA BHOLA Page 3 of 30
CC No. 12702/20 Judgment
iii)Complaint in question as Ex.CW1/3;
iv) Return memorandum as Ex.CW1/4;
v) Legal demand notice dated 13.05.2014 as Ex. CW1/5;
v) Postal receipt and the AD Card as Ex.CW1/6 to Ex.CW1/8;
vi) Personal diary pages of complainant as Ex.CW1/DY and Ex.CW1/DX.
6) During her examination in chief, the complainant reiterated the contents of her complaint. She was duly cross examined by the Ld. Counsel for the accused and during her cross examination dated 22.02.2016, she stated that she knows the accused for the past 9-10 years and came in contact with her through one Mrs. Usha. She does not remember the exact date when she started investing in the committee with the accused and prior to the present dispute, she had no dispute with the accused. The amount of Rs. 25 lakhs, pertains to the amount payable by the accused qua several committees. She further stated that the accused handed over a promissory note dated 28.03.2014, to her and agreed to pay Rs. 25 lakhs to her. The witness further stated that on 21.03.2014, when she along with other people made complaint in PS Vikaspuri, the accused requested her to not pursue the complaint and assured that she will pay the pending amount to her, after which she came to her house with the promissory note and the cheque. The exact amount payable was not mentioned on the police complaint as the accounts were not settled at that time. She had several meetings with the accused between 21.03.2014 and 28.03.2014, after which, the accounts were settled.
She further stated that she had three committees of Rs. 2.5 lakhs each, with the complainant, as per which, she had to pay monthly installments of Rs. 12,500/- for 20 months.
7) In her cross examination dated 25.07.2016, Manisha Chandel/CW-1, stated that she does not remember the exact date when the first MANISHA CHANDEL VS. MONIKA BHOLA Page 4 of 30 CC No. 12702/20 Judgment committee was started, but it was approximately 8-9 years ago. The last committee of Rs. 3 lakhs started from September 2012 and ended in November 2013 . The witness added that the amount of Rs. 25 lakhs, is inclusive of the said committees. She does not remember the exact amount she had to take from the accused in June 2011 but the same is mentioned in her personal diary, which can be produced by her. She further stated that she has no written proof to show that Usha had a partnership with the accused and voluntarily added that initially, the accused was making payments of the committee timely and there was no question of seeking any proof from either Usha or accused. She denied the suggestion that she had falsely stated that accused induced her to invest in her committees in her affidavit. She further denied the suggestion that she had falsely stated that the accused informed that she will pay 30% interest to her on the amount and the said assurances were given to her somewhere in the year 2010-11. She admitted the suggestion that when she demanded the amount invested in the committee along with 30% profits, the accused threatened of consequences. She denied the suggestion that the cheque in question and the promissory note were not handed over to her, by the accused after police complaint dated 21.03.2014 and the same were lying with her since the year 2012. The acknowledgment of legal demand notice (Ex.CW1/7) served upon the accused was received by her counsel. She denied the suggestion that the legal demand notice was never served upon the accused.
8) In her cross examination dated 19.09.2016, the witness Manisha Chandel/CW-1, produced pages of her personal diary (Ex.CW1/DX, OSR) and (Ex.CW1/DY) and stated that she may have started maintaining the said diary somewhere around 2007. She stated that the said diary is a personal diary and no specific dates have been mentioned. She has not made any cutting (overwriting) in the entry MANISHA CHANDEL VS. MONIKA BHOLA Page 5 of 30 CC No. 12702/20 Judgment of 30.01.2007 and it was her habit to draw something on the pages. Upon being asked to clarify the entries of the diary, she stated that she had three committees of Rs. 8000/- and three committees of Rs. 12,500/- with the accused and she had made payments to the accused from July to February 2013. She further stated that in the page (Ex.CW1/DY) the name of accused- Monika is not written at the top, rather it is written at the end. She further denied the suggestions that she had made any alterations and additions in the entries mentioned on the diaries. Upon being asked about her source of income regarding payment of Rs. 84,575/-, in the month of October 2012, she stated that her father and mother in law used to receive pension and they used to give the said amount to her for raising the committee. She stated that her cousin K L Sharma also used to give amount for the committee. She further stated that the source of income qua two committee of Rs. 4 lakhs and one committee of Rs. 3 lakhs is the amount received from her husband, mother in law and father.
9) The witness Manisha Chandel/CW-1, further stated that her husband's monthly income is approximately Rs. 1 lakh and she has no other source of income other than her husband's income. She cannot tell whether her husband files ITR. She further stated that she lives in rented premises and her monthly family expenditure is Rs. 70,000/- to Rs. 80,000/- per month, including the installments of the committee. She further stated that she had three more committees of Rs. 2.5 lakhs each and two more committees of Rs. 1 lakh each, and one more committee of Rs. 50,000/-. She further stated that the meaning of the sentence at point A7 to A7 (on page 3 of Ex.CW1/DX) is that the accused shall be paying her a total of Rs. 3 lakhs, the break up of which was three installments of Rs. 2.5 lakhs, two installments of Rs. 1 lakh and one installment of Rs. 50,000/-, MANISHA CHANDEL VS. MONIKA BHOLA Page 6 of 30 CC No. 12702/20 Judgment along with 2.5% interest per month, after the committee of Rs. 4 lakhs, gets over. She further stated that the accused has not paid the said sum of Rs. 10 lakhs to her. She denied the suggestion that she has forged and fabricated the entries of her personal diary and that she had no sufficient sources of income. She further denied the suggestion that she is deliberately not producing her mother in law and father before the court.
10) Thereafter the matter was listed for recoding of statements u/s 313 of Cr.PC. In her statements recorded u/s 313 Cr.PC, the accused stated that she had given the blank cheque in question to the complainant for processing fee for bank loan in December 2012 as she was not aware about the exact fee. She stated that the present complaint is false and fabricated and she did not receive any legal demand notice. Thereafter, the matter was listed for defence evidence.
11) The accused chose to lead defence evidence and produced five witnesses in support of her case. DW-1/Dharamvir (Ahlmad, Tis Hazari Courts), produced the record of CC No. 9611/16 titled as Harvinder Kaur Vs. Monika Bhola, (which was exhibited as DW1/A colly). DW-2/Rajeev Kumar (PRI(P), Nangloi Post Office) stated that he could not produce the summoned record as the same has been weeded out. DW-3/ HC Sidhant Pal produced the PCR record dated 13.03.2014, including the call book (Ex.DW3/A , colly). In his cross examination the said witness admitted that certificate u/s 65-B of the Indian Evidence Act has not been annexed with the said record and denied the suggestion the said document Ex.DW3/A is fabricated.
12) DW-4/Monika Bhola, in her examination in chief stated that she met the complainant at the house of one Veena and they both are members of a kitty party. They became friends and started sharing family relations with each other. The complainant offered her to start MANISHA CHANDEL VS. MONIKA BHOLA Page 7 of 30 CC No. 12702/20 Judgment a boutique as she knew tailoring and they started a boutique at her residence in October 2012. The husband of the complainant was working in a cloth company and he used to give material for the boutique. In December 2012, the complainant suggested her to procure a loan as she owned a residential home for investing the said amount in the boutique. The complainant got some blank papers and a blank cheque signed from her for paying the processing fees for procuring the loan. When the loan could not be sanctioned, the complainant again took the signatures of the accused on some blank papers and two cheques under the pretext of applying for loan, however, no loan was sanctioned for six months. Thereafter, the complainant again took two cheques amounting to Rs. 49000/- and Rs. 15000/- from her for the purpose of bribing the bank employees for sanctioning the loan.
13) The witness/ accused - Monia Bhola /DW-4 further stated that after 3-4 months, she enquired from the complainant about the loan and the complainant introduced her to one Harvinder Kaur. Both of them suggested her to secure a loan on jewellery, after which Harvinder Kaur introduced her to her nephew Sukhvinder Singh and they both also took the signatures of the accused on some blank papers and two blank cheques. In August 2013, Harvinder Kaur and the complainant accompanied her to HDB Financial Bank and got a jewellery loan of Rs. 30,000/- sanctioned. After this, she enquired from the complainant about her previous papers and requested her to return the same. During that period, she came to know that some of her property papers were stolen as she had shown them for sanctioning loan and she registered a complaint in PS Vikaspuri regarding the theft of her property papers in November 2013. After that she got depressed due to the behavior of complainant and Harvinder Kaur. She informed the same to her father in law and MANISHA CHANDEL VS. MONIKA BHOLA Page 8 of 30 CC No. 12702/20 Judgment when her father in law contacted the complainant and Harvinder Kaur, they both returned two cheques and two blank signed papers to her father in law, however the complainant still did not return one of her cheques.
14) The accused- Monika Bhola/ DW-4 further added that the complainant had informed her father in law that one of the cheques which was still in her possession, had been presented by her in the bank and she shall return the same when she receives it back from the bank. The complainant also assured her father in law that she shall be returning two more cheques but she never complied with her assurances. Thereafter, the complainant misused the cheque in question to institute the present case. In March 2014, she came with some other people and started quarreling with her and they stated that if the complainant will not pay the money, then they will file cases against her. After this, she made a phone call to the PCR and both parties went to the police station, who told the parties to solve the matter themselves. She made several requests to Harvinder Kaur and complainant for returning her cheques, but they failed to return it. The complainant and her friends filed some cases against her u/s 138 of the N I Act to get her property. She further produced documents- Ex.DW1/1 to Ex.DW1/15 and Mark A to I, in support of her defence.
15) The witness Monika Bhola/ DW-4 was duly cross examined by the Ld. counsel for the complainant and in her cross examination dated 26.11.2018, she stated that she runs a business of boutique, which she started six months ago. She knows the complainant as she met her at one Veena's residence in the year 2011-12. She initially admitted that complainant has never done any business of running a boutique but later volunteered to state that the complainant started the business of boutique with her in the year 2012. She also admitted MANISHA CHANDEL VS. MONIKA BHOLA Page 9 of 30 CC No. 12702/20 Judgment that prior to 2012, she has never carried on the business of boutique with the complainant. She denied the suggestion that in the year 2012, she carried on the business of chit funds/ committees. She stated that she does not file ITR. She further admitted that several cases have been filed against her by various persons u/s 138 of the N I Act. She admitted that one Ajay had filed a case against her, which has been settled by her and other complaints are pending against her.
16) In her cross examination dated 16.01.2020, Monika Bhola/ DW-1, stated that she started the business of boutique, for the second time in January/ February 2018 under the name and style of 'Jhanvi Boutique'. She did not get any certificate or license from MCD or Delhi shops and Establishments, for opening the same and the boutique was closed in October / November 2018. In 2012, she had started a boutique, with the complainant, by the name of "Monika Boutique", at her residence, which was closed after 3-4 months, of its opening as complainant failed to get the promised loan for running the boutique. She went to several banks with the complainant for obtaining loan and gave documents (cheques , blank signed papers, copy of I cards and photos) to her for the said purpose. In September / October 2013, she came to know that the loan promised by the complainant could not be sanctioned and she asked for return of her cheques. She did not file any complaint, sue or sent any notice to the complainant for return of the cheques. The complainant had returned two cheques and two promissory notes to her father in law and told that one cheque was missing. She did not make any complaint to any authority qua the alleged bribery demanded by the complainant, to be given to the bank officials (as stated in her examination in chief). She has no documents to show that she had applied for loan from banks, however, she has placed a bank slip issued by HDB Bank (Ex.DW1/11), which she received MANISHA CHANDEL VS. MONIKA BHOLA Page 10 of 30 CC No. 12702/20 Judgment when she approached the said bank for loan. She admitted that the said receipt does not mention that the said loan was granted against jewellery.
17) Furthermore, Monika Bhola/ DW-4, denied the suggestion that the complainant never promised to avail any loan for her. She stated that she visited HDB Bank with Harvinder and the complainant, many times. She also stated that she does not have any sanction letter of loan, issued by HDB Bank. The witness stated that she knows Mrs. Usha but denied the suggestion that she did chit fund/ committee business, with her. She denied the suggestion that she induced the complainant to join the chit funds run by her and to invest money with her husband, who would reinvest her money in gold and property and pay her good returns (30% returns). She admitted the suggestion that other persons including Surender Kaur, Deepak, Naresh Vats and Kaptan Bhardwaj had also filed cases against her. She also admitted the suggestion that on 21.03.2014, a complaint (Ex.DW1/X-1) was lodged against her by the complainant along with other persons for cheating in PS Vikaspuri. She denied the suggestion that pursuant to the complaint, she requested the complainant and other persons to not pursue the complaint under the assurance that she will repay the pending amount and issued the cheque in question. She stated that the promissory note (Ex.CW1/1) bears her signatures at point X but denied the suggestion that the said document has been filled by her. She stated that she has not filed any complaint before any competent authority qua misuse of her cheque and promissory note. She also stated that she did not receive any legal demand notice from the complainant.
18) DW-5/Balraj Bhola stated that the accused is his daughter in law and he came to know in November 2013 that the accused had been embroiled in a dispute with her friends (Manisha Chandel, Harvinder MANISHA CHANDEL VS. MONIKA BHOLA Page 11 of 30 CC No. 12702/20 Judgment Kaur, Surender Kaur, Deepak Bhardwaj and Naveen Vats). The said persons had taken some signed documents and cheques from the accused on the false pretext of availing loan from the bank. Thereafter, the accused suffered depression and he contacted all the aforesaid persons to return the cheques. After his repeated requests, the complainant returned two blank signed cheques and two blank signed promissory notes to him, in December 2013. One blank signed cheque and one blank signed pronote was stated by the complainant to be in the possession of one Ripu Daman and she assured that the said would be returned after she took it back from the said Ripu Daman. One property document had also gone misplaced which was later admitted by Harvinder Kaur to be in her possession. All these persons filed a false case against the accused. On 13.03.2014, the complainant along with other persons threatened the accused regarding which, the accused filed a complaint on 21.03.2014. Thereafter, the present case was instituted by the complainant against accused.
19) The witness DW-5/ Balraj Bhola was duly cross examined by the Ld. counsel for the complainant and in his cross examination he stated that he met the complainant for the first time in November 2013 and her daughter in law/ accused was not running the committee/ chit fund business. The accused had apprised her in November 2013 that she and the complainant wanted to open a boutique in partnership. The accused resided separately from him since the year 2004. He never saw the boutique and had only heard about the same. He never went with either the accused or the complainant to the bank, for availing the loan. Accused had herself told her in November 2013 that Manisha Chandel, Harvinder Kaur and Surender Kaur had promised her to avail loan from the bank, but the said promise was not made in his presence. He never made any MANISHA CHANDEL VS. MONIKA BHOLA Page 12 of 30 CC No. 12702/20 Judgment written request to any of the abovementioned persons for returning of the cheques or documents. He denied the suggestion that he did not meet the accused from November 2013 to March 2014. He cannot tell if the complainant knows anyone named Ripu Daman however, she made him talk to Ripu Daman. The witness remained firm to his version in all other aspects, throughout his cross examination and denied the suggestion that he was deposing falsely in order to save the accused, who is her daughter in law.
20) Thereafter, the matter was listed for final arguments. During the course of final arguments, it was argued by the Ld. Counsel for the complainant that the accused induced the complainant to deposit some money in chit funds/ committee run by her and to invest some money with her husband who would then invest the same in gold and property, under the pretext of procuring lucrative returns for her. Subsequently, the complainant came to know that the accused along with her husband was defrauding several other investors and thereafter she lodged a complaint before the EOW Cell and PS Vikaspuri. Thereafter, the accused requested the complainant and other investors to not pursue the complaint and executed a promissory note and the cheque in question in discharge of her liability. The accused has admitted her signatures on the cheque in question and the promissory note and the mandatory presumptions u/s 118(a)/139 N I Act are attracted. The investments made by the complainant have been duly proved by the virtue of the contents of the personal diaries (Ex.CW1/DX and Ex.CW1/DY OSR). He has further argued that the accused has raised a false and frivolous defence regarding the cheque in question being handed over in order to procure loan and the same has not been duly proved by her. It has thus been prayed that the accused be convicted in the present case.
MANISHA CHANDEL VS. MONIKA BHOLA Page 13 of 30CC No. 12702/20 Judgment
21) Per contra, the counsel for the accused has stated that a false and frivolous case has been filed by the complainant against the accused on false grounds. He has submitted that the complainant forged the entries in the Acknowledgment Due card (Ex.CW1/7), in order to file the present complaint, which is clearly established from the information received by the postal department (Ex.DW1/1 to Ex.DW1/8). Since the legal demand notice was never delivered upon the accused, the present complaint is time barred. He has further argued that the cause of the action of the complainant is based on chit fund/ committee which is not legal in the eye of law. He has also drawn the attention of the court to the fact that the complainant has not specified the exact amount that was allegedly due from the accused and her husband - Puneet Bhola and consequently, there is absolutely no explanation as to how the alleged liability added up to Rs. 25 lakhs. It has thus been prayed that the accused be acquitted in the present case.
Findings of the Court-
22) Before delving into the facts of the case, it is apposite to bear in mind the law with respect to section 138, Negotiable Instrument Act. In order to prove his case under section 138 N I Act, the complainant must prove the following facts-
i) The accused issued a cheque on a bank account maintained by him
ii) The said cheque must have been issued, wholly or partly, in discharge of a 'legal debt or other liability'
iii) The said cheque was presented before the bank within 3 months from the date of issuance and was dishonoured
iv) The payee issued a legal demand notice, within 30 days of receipt of information of dishonour of the cheque MANISHA CHANDEL VS. MONIKA BHOLA Page 14 of 30 CC No. 12702/20 Judgment
v) The drawer failed to make payment within 15 days of receipt of the said legal demand notice
23) Further, the NI Act raises two important legal presumptions in favour of the holder of the cheque as soon as the execution of cheque is proved. As per Section 118(a), NI Act, it shall be presumed that every negotiable instrument was 'made, accepted, transferred, negotiated or endorsed for consideration, unless the contrary is proved'. Furthermore, as per section 139, NI Act, it shall be presumed that 'the holder of cheque, received the cheque for the discharge, in whole or in part, of any debt or other liability, unless the contrary is proved.'
24) The principles with respect to above mentioned presumptions, have been succinctly laid down in Para 25 of the judgment by Hon'ble apex court in Basalingappa v. Mudibasappa (2019) 5 SCC 418, which lays down as under-
" 25.1. Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.
25.2. The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
25.3. To rebut the presumption, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the MANISHA CHANDEL VS. MONIKA BHOLA Page 15 of 30 CC No. 12702/20 Judgment circumstances upon which they rely.
25.4. That it is not necessary for the accused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden."
25) In the present matter, the cheque in question (Ex.CW1/2) was issued on 28.03.2014. The cheque was presented before the bank within 3 months and was dishonored vide return memo dated 01.05.2014 (Ex.CW1/3) with the reason 'Funds Insufficient'. Thereafter, legal notice (Ex.CW1/4) dated 13.05.2014 was sent to the accused within 30 days of the receipt of the information of dishonor, which as per the version of the complainant was delivered upon the accused on 21.05.2014, as is reflected in the Registered AD Card (Ex.CW1/8). Thereafter, the accused failed to make the payment of the cheque amount within 15 days, after which the cause of action arose and the matter was instituted on 04.07.2014.
26) In the present matter, the case of the complainant is that the accused- Monika Bhola issued the cheque in question in discharge of the legally enforceable liability, which she and her husband owed to the complainant and the said cheque got dishonored upon presentation, giving rise to the present complaint. During the course of the trial, the accused has admitted her signatures on the cheque in question and as laid down by the Hon'ble Apex Court in Basalingappa (Supra), the burden to raise a probable defence lies upon the accused. In his defence, the Ld. counsel for the accused claimed that the alleged amount claimed by the complainant is not a legally enforceable liability. It was further argued by the Ld. counsel for the accused that the complainant fabricated the Registered AD card (Ex.CW1/7) and the present complaint is time barred.
MANISHA CHANDEL VS. MONIKA BHOLA Page 16 of 30CC No. 12702/20 Judgment
27) In view of the above material on record, in order to effectively decide the present dispute, the following points of determination have to be adjudicated:
(i) Whether the legal demand notice was received by the accused? If not, whether the cause of action can be said to have arisen, in the present case, by virtue of non receipt of the legal demand notice?
(ii) Whether the present complaint has been filed within the prescribed period of limitation?
(iii) Whether the complainant lacked the financial capacity to invest / deposit the alleged amount (Rs. 25 lakhs, inclusive of the returns/ profits)?
(iv) Whether the amount mentioned on the cheque in question is a legally recoverable debt, due from the accused to the complainant?
(v) Whether the cheque in question was issued by the accused to the complainant in order to procure a loan from the bank and the same has been misused by the complainant?POINT OF DETERMINATION NO. 1
28) During the course of final arguments, one of the primary defences that has been taken by the accused is that the complainant forged signatures of the recipient on the Registered AD Card (Ex.CW1/7) and thus, no cause of action can be said to have arisen in the instant case. The Ld. counsel for the accused has drawn the attention of this court to the documents produced by the accused in her defence (Ex.DW1/1 to Ex.DW1/8) which suggest that communications were made by the accused with the concerned officials of the postal department, regarding the status of the postal receipts (Ex.CW1/5 / Ex.CW1/6 and two other receipts) and as per the communication received from the senior superintendent of post offices (Ex.DW1/8) , MANISHA CHANDEL VS. MONIKA BHOLA Page 17 of 30 CC No. 12702/20 Judgment as per which, the said articles were returned by the area postman with the remarks that "addressee out of station for unknown period"
and the articles were returned to the sender. In view of the said documents, the Ld. counsel for the accused has argued that it is evident that the accused never received the legal demand notices and consequently, no cause of action can be said to have arisen in the present matter.
29) Upon considering the abovestated arguments of the Ld. counsel for the accused, this court made queries with the Ld. counsel for the complainant, who, instead of giving any specific reply on the facts of the said aspect, relied on the judgment of the Hon'ble Apex Court in C C Alavi Haji v. Palapetty Muhammed (2007) 6 SCC 555. The question of the defence of non receipt of the legal demand notice, has been elaborately dealt by the Hon'ble Apex Court in the said judgment and it has been held that an accused who has not received the legal demand notice cannot claim the benefit of the defence of non receipt of the same as once summons are served upon him, it is the duty of such an accused to make the payment of the cheque in question within 15 days of receiving summons from the court. Once this option is not availed by him, the benefit of defence of non service of notice cannot be given to the accused.
30) In view of the above factual matrix and legal position, keeping in mind the reply of the senior superintendent of post offices (Ex.DW1/8), wherein it has categorically been mentioned that the articles/ Registered letters were not delivered upon the addressee and were returned to the sender, there is enough material on record to suggest that the Registered AD Card (Ex.CW1/7) is not genuine and was not delivered upon the accused, yet, keeping in mind the law laid down by the Hon'ble Apex court in CC Alavi Haji (Supra) , it is sufficiently clear that non receipt of the legal demand notice, is not a MANISHA CHANDEL VS. MONIKA BHOLA Page 18 of 30 CC No. 12702/20 Judgment valid defence in a case instituted u/s 138 of the N I Act as the said judgment casts a duty upon the drawer of a cheque to repay the amount mentioned on the cheuqe, after receiving the summons of the case instituted against him. In the present matter, as stipulated in the law laid down by the Hon'ble Apex Court in CC Alavi Haji (Supra), the accused did not exercise the option of repaying the cheque amount after receiving the summons of the present case and consequently, the accused cannot be given any benefit of the defence of non receipt of the legal demand notice.POINT OF DETERMINATION NO. 2
31) During the course of final arguments, the Ld. counsel for the accused has vehemently argued that since the Registered AD Card (Ex.CW1/7) is not genuine, the limitation of period of one month, as laid down by Section 142 of the Negotiable Instruments Act, cannot be computed from 21.05.2014, rather it should be computed from 17.05.2014 i.e. the date on which the legal demand notice was received back by the complainant. Upon a careful scrutiny of all the documents that have been presented by the accused, it emerges that the legal demand notice that had been sent by the complainant to the accused was returned to the sender on 16.05.2014 (as is reflected from a perusal of Ex.DW1/6 and Mark H), however, there is absolutely nothing on record as to when the legal demand notice was received by the complainant, when the same was sent back to him.
32) Furthermore, upon specific questions being put to the Ld. counsel for the accused at the stage of final arguments as well, the said counsel could not satisfy the court as to which document specifically mentioned that the legal demand notice was received back by the complainant on 17.05.2014 (as was stated by him in his final arguments). In such a situation, except the oral contentions of the MANISHA CHANDEL VS. MONIKA BHOLA Page 19 of 30 CC No. 12702/20 Judgment accused, there is absolutely nothing on record that goes on to prove that the legal demand notice was received back by the complainant on 17.05.2014. Consequently, the contention of the Ld. counsel for the accused that the period of limitation, as per the mandate of Section 142 of the N I Act should be computed from 17.05.2014 i.e. the date when the complainant allegedly received back the legal demand notice, cannot be accepted. Moreover, a perusal of the entire record clearly suggests that the accused took the defence that the present complaint was filed after the period of limitation, only at the stage of final arguments. Prior to final arguments, the accused faced the entire trial without exercising the option of challenging the summoning order and without asking even a single question to this effect (the complaint being filed after prescribed period of limitation), from the complainant, during her cross examination. In view of the above, this court is inclined to conclude that the present case was filed within the prescribed period of limitation.POINT OF DETERMINATION NO. 3
33) In the instant matter, during the course of cross examination of the complainant, the Ld. counsel for the complainant thoroughly cross examined the complainant on the aspect of her financial capacity. Lo and behold, at the stage of final arguments, the defence of financial incapacity of the complainant was not taken by the accused, however, since the question was raised at the stage of cross examination of the complainant, this court deems it appropriate to give a finding on the question whether the complainant was financialy capable to invest/ deposit amount of Rs. 25 lakhs(inclusive of the returns/ profits), with the complainant and her husband.MANISHA CHANDEL VS. MONIKA BHOLA Page 20 of 30
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34) The law with respect to the question of financial incapacity/ non explanation of sources of funds, in cases pertaining to section 138 of the N I Act, has been succinctly dealt by the Hon'ble Apex Court in a catena of decisions. The Hon'ble Apex court in Basalingappa(Supra), has held that - it is not imperative for the accused to step into the witness box to prove his defence regarding financial incapacity of the complainant and it is the duty of the complainant to prove his financial capacity, once the accused challenges the same. Furthermore, the Hon'ble Apex Court has recently held in P Rasiya v. Abdul Nazir 2022 SCC OnLine SC 1131 that the complainant is not bound to specifically state nature of transaction and sources of funds in his complaint. A conjoint reading of the above judgments, makes it amply clear that in cases pertaining to section 138 of the N I Act, initially, the complainant is not expected to specify his sources of funds, in the complaint. However, when the financial capacity or the sources of funds are challenged by the accused, during the course of trial, the complainant is under an obligation to explain his financial capacity and the sources of his funds.
35) In the present case, the complainant categorically stated in her cross examination that the source of the funds for investments in the committee was the money received from her father- Mahender Pal Singh, mother in law- Sarla Devi, cousin- K L Sharma and her husband. The complainant further stated that she had no sources of income apart from the salary of her husband which was approximately Rs. 1 lakh. The Ld. counsel for the accused put specific suggestions to the complainant (during her cross examination) regarding the fact that she did not produce her mother in law and father in court as she was deposing falsely, which were denied by the complainant. However, to the utter surprise of this MANISHA CHANDEL VS. MONIKA BHOLA Page 21 of 30 CC No. 12702/20 Judgment court, the complainant still did not produce either of the abovementioned persons, who had allegedly lent her money, to make the investments, in the witness box, to prove her version. In such a situation, by taking resort to the illustration (g) appended to section 114 of the Indian Evidence Act, it can very well be presumed that had the said persons, appeared in the witness box, their testimony would have been unfavourable to the version of the complainant.
36) In the instant matter, the amount in question i.e. Rs. 25 lakhs (inclusive of profits) is not a small amount by any stretch of imagination and once the sources of funds of the complainant, were challenged by the accused, this court expected the complainant to provide cogent and unimpeachable evidence in order to explain the sources of her funds. As discussed hereinabove, the complainant has failed miserably in her duty to provide a clear picture of the sources of her funds and consequently, in the considered opinion of this court, the complainant was financially incapable to invest a sum of Rs. 25 lakhs (inclusive of the amount of return/ profits), with the accused.POINT OF DETERMINATION NO. 4
37) During the course of final arguments, the Ld. counsel for the accused also took a defence that the claim of the complainant, being based upon the money deposited in committees/ chit funds, is in itself illegal in the eyes of law and the same cannot be regarded as a legally enforceable liability. In the instant matter, the case of the complainant is that the accused made her invest money in the committee / chit funds run by her and with her husband, under the assurances of providing lucrative interests / returns. The present complaint is silent regarding the fact whether the alleged committees, run by the accused were legally registered under the MANISHA CHANDEL VS. MONIKA BHOLA Page 22 of 30 CC No. 12702/20 Judgment relevant laws, or not. Upon court query, at the stage of final arguments, the Ld. counsel for the complainant stated that he is unaware whether the said committee was registered under the prescribed legal framework, or not.
38) At the very outset, the legality of amount deposited in the committee/ chit fund has to be examined by this court, in light of the relevant legal provisions governing the same. The scheme of chit funds / committees is governed by the Chit Fund Act, 1982, r/w Delhi Chit Fund Rules, 2007, which have been enacted by the Legislature to provide a regulatory framework for the business of chit funds. A conjoint reading of Section 4 of the Chit Funds Act, 1982 r/w Chapter II of the Delhi Chit Fund Rules, 2007, reveals that any chits, commenced or conducted without obtaining the previous sanction of the State Government(as prescribed by the rules), are prohibited and not recognized under the law. Axiomatically, sans the previous sanction of the government as prescribed by the Chit Fund Act, 1982, r/w Delhi Chit Fund Rules, 2007, the chit fund cannot be regarded as a legal entity.
39) At this juncture, it is pertinent to mention that throughout the trial, the complainant has not produced any formal payment receipt or any formal documentation that she may have had with the accused regarding the alleged chit fund. Surprisingly, even at the stage of final arguments, upon specific queries made by this court, the Ld. counsel for the complainant categorically stated that he is unaware whether the accused runs any registered Chit Funds. In such a situation, there is absolutely no evidence on record that goes on to establish that the accused was allegedly running a chit fund business after obtaining the prior sanction from the Government and the complainant was a subscriber to the same. In view of the above factual and legal backdrop, if the case of the complainant is accepted MANISHA CHANDEL VS. MONIKA BHOLA Page 23 of 30 CC No. 12702/20 Judgment at its best, it emerges that her claim being based upon investments made in a chit fund, which was being run without the previous sanction of the government, as mandated by the Chit Funds Act, 1982 r/w Delhi Chit Fund Rules, 2007, cannot be stated to be a legally enforceable liability. In the considered opinion of this court, a person who knowingly or unknowingly, invests in a scheme that is unrecognized under the law, with an ulterior motive of earning exorbitant gains, is not legally entitled to recover the said amount in the event of any defaults being made by the opposite party.
Consequently, in light of the above legal position and factual matrix, the claim of the complainant, being based upon her investments made in the alleged chit fund/ committee run by the accused, without obtaining the prior sanction of the Government, as prescribed by law, can in no way be regarded as a 'legally enforceable liability'.
40) Furthermore, upon delving into the contentions of the complainant, in depth, it emerges that in her entire complaint and the examination in chief, the complainant did not specify with precision, the exact amount of money that she had invested in the committee run by the accused and the exact amount that she had invested with the husband of the accused. To the utter surprise of this court, even till the stage of final arguments, no clear cut break down of the exact money invested in committee/ chit funds and the exact amount invested with the husband of the accused, was provided by the complainant, which casts a huge dent upon her case. The complainant also failed to explain as to why and under what authority, the accused issued the cheque in question qua the alleged liability of her husband, which again casts an adverse impact upon the case of the complainant. Further, during her cross examination, the complainant relied on her personal diaries (Ex.CW1/DY and Ex.CW1/DX, OSR), in order to show her investments in the committee, allegedly run by the MANISHA CHANDEL VS. MONIKA BHOLA Page 24 of 30 CC No. 12702/20 Judgment accused. Upon a careful scrutiny of the pages of the said personal diaries of the complainant, it emerges that the entries upon the same are neither clear about the exact investments made by the complainant, nor have they been counter signed by the accused. Moreover, there are several overwriting and drawings over the pages, which clearly suggests that the same had no formal sanctity and the chances of manipulation of entries in the same cannot be ruled out.
41) Furthermore, the case of the complainant is that the amount of Rs. 25 lakhs, as mentioned in the cheque in question, was inclusive of the amount owed by the accused and her husband along with the interests. Upon a careful scrutiny of the complaint, it is clear that there is no mention of the amount / rates of returns that were to be paid qua the investments in the committee. As regards the investments made by the complainant with the husband of the accused are concerned, the complaint states that the investments the said investments were made upon the assurances of 30% interests/ profits. The rate of interest that were to be allegedly paid by the accused with respect to the investments made in the chit fund/ committee, find a mention in the personal diary of the complainant (Ex.CW1/DY), as per which an interest of 2.5% (perhaps monthly), was to be paid by the accused on the said investments. In light of the above facts, the short question that falls for consideration before this court is whether the court can enforce such exorbitant rates of interest (30% annual interest/ 2.5 % monthly interest), in claims made u/s 138 of the N I Act. In this regard, it is pertinent to note that one of the purposes behind enactment of the Negotiable Instruments Act,1881, is to develop the faith of the general public upon the cheque transactions qua legally enforceable debts. In the considered opinion of this court, even if the case of the complainant is accepted MANISHA CHANDEL VS. MONIKA BHOLA Page 25 of 30 CC No. 12702/20 Judgment at its best, the parties cannot be legally permitted to mutually determine exorbitant and absurd rates of interests and then claim the enforcement of the same, by taking resort to the provisions of the NI Act. Such an interpretation would run contrary to the basic principles of public policy and such exorbitant rates of interest (2.5% per month / 30% per annum) can in no way be regarded to form a part of a legally recoverable debt or liability.
42) In view of the above discussion, it is apposite to state that the claim of the complainant, being based upon investments made in the chit fund/ committee, cannot be stated to be legally enforceable liability. Moreover, the complainant has given no precise account of the amount invested with the accused in her chit fund and the amount invested with her husband. Further, the rates of interest claimed by the complainant are exorbitant and cannot be regarded to form a part of the legally enforceable claim of the complainant. In such a situation, the accused has succeeded in establishing that the claim of the complainant is not based on a legally enforceable liability.
POINT OF DETERMINATION NO. 543) One of the defence taken by the accused at the stage of defence evidence and subsequently at the stage of final arguments is that the cheque in question was issued by her to the complainant in order to procure a loan from the bank, for the purpose of the boutique business which was jointly being run by the complainant and the accused and subsequently, the same was misused by the complainant. The accused produced herself (Monika Bhola /DW-4) and her father in law ( Balraj Bhola/DW-5), as witnesses, in order to prove the said defence. A perusal of the testimonies of the both the abovementioned witnesses reveals that both the witnesses have stated that the complainant, along with some other people MANISHA CHANDEL VS. MONIKA BHOLA Page 26 of 30 CC No. 12702/20 Judgment (Harvinder Kaur, Surender Kaur, Deepak Bhardwaj and Naveen Vats) had taken the cheque in question along with other signed cheques and documents from the accused under the pretext of procuring a loan for her, for the purpose of setting up the business of boutique.
44) The abovementioned version of the accused that the complainant, along with some other people, took the cheque in question (along with other signed documents), does not appear to be reliable or genuine for several reasons. At the inception of the trial i.e. at the stage of framing of notice, the accused took a completely contrary stand by stating that she had given the cheque in question to the complainant before 2012 as there was some amount due from her to the complainant, which she has already repaid. In this regard, it is pertinent to note that at the stage of framing of notice, the accused interacts with the court for the first time and the chances of manipulation and fabrication are least at this stage. The fact that the accused put forth a completely contradictory version at the stage of framing of notice, than that compared to her version at the stage of defence evidence and final arguments, makes the said version highly doubtful and unworthy of credit. Moreover, it is pertinent to note that even at the stage of cross examination of the complainant, no suggestion, whatsoever, was made to the complainant regarding the cheque in question being handed over to her by the accused, as processing fee for procuring the loan.
45) At this juncture, it is pertinent to note that the defence regarding the cheque in question being issued for the purpose of procuring a loan from the bank, was taken for the first time by the accused, at the stage of recording of statements u/s 313 of Cr.PC. Surprisingly, at the stage of defence evidence, the accused again made additions in her version and this time she stated that apart from the blank cheques MANISHA CHANDEL VS. MONIKA BHOLA Page 27 of 30 CC No. 12702/20 Judgment / documents handed over by her to the complainant for paying the processing fee, she also handed over some other blank signed cheques and other documents to the complainant for bribing the bank officials for procuring the loan. The blank cheques and promissory notes (Ex.DW1/12 to Ex.DW1/15) have also been relied upon by the accused, in order to prove her version that some of her blank signed documents were returned by the complainant to her father in law. However, as neither of the said documents have been counter signed by the complainant, they do not go on to establish any link with the complainant and in the considered opinion of this court, these documents, per se, do not go on to establish the version of the accused that the complainant had returned the same to her father in law.
46) Furthermore, the version of the accused at the stage of defence evidence that she started a boutique business with the complainant in the year 2011-2012 and closed the same after 3-4 months of its opening, as the complainant failed to procure the loan, appears to be highly improbable and an afterthought as no such suggestion was ever put to the complainant even once, at the stage of her cross examination. Moreover, the testimony of Balraj Bhola (DW-5) is entirely hearsay as he categorically stated in his cross examination that he had only heard about the boutique of the accused and had never seen it. Admittedly, the accused did not even get any certificate or license from MCD qua opening her boutique, nor did she produce any independent evidence to prove that she ran the said boutique. Moreover, upon perusal of the loan receipt of HDB Financial Services (Ex.DW1/11), it emerges that the said receipt is merely a repayment receipt of a loan and in the absence of the original loan documents alongwith other independent evidence qua the loan being procured through the complainant/ her friends, the MANISHA CHANDEL VS. MONIKA BHOLA Page 28 of 30 CC No. 12702/20 Judgment fact that the accused procured the said loan with the help of the complainant or her friends, cannot be regarded to be proved. Consequently, the accused has failed to establish that the cheque in question was handed over by her to the complainant for the purpose of procuring a loan for the boutique business, which was being run by the complainant and the accused jointly and the said cheque was subsequently misused by the complainant.
47) Before parting with the judgment, it is pertinent to note that during the course of final arguments, the Ld. counsel for the complainant has relied on the following judgments - A P S Forex Services Pvt. Ltd. Vs. Shakti Indernation Fashion, Tedhi Singh Vs. Narayan Dass Mahant and M/s Kalamani Tex. Vs. P Bala Subramanya and the Ld. counsel for the accused has relied on the following judgments- K Prakashan Vs. P K Surenderan, Suresh Vs. Narender Gautam, Anil Kumar Vs. Gurmeet Singh and Jai Singh Vs. Praveen Kumar. This court has perused all the judgments mentioned hereinabove and the same have been duly considered in appreciating the facts and evidences of the present matter.
CONCLUSION
48) Thus, on account of above appreciation of facts, evidences and materials on record, this court is of the considered opinion that the claim of the complainant is based upon a liability (illegal chit funds), which is not legally recoverable. The complainant has also failed to explain the sources of her funds and her financial capacity to invest the amount in question. The primary burden to prove her case rests upon the complainant and although the accused has failed in proving some of her defences (misuse of cheque by the complainant and the complaint being time barred), the benefit of the same cannot be given to the complainant as the case of the complainant does not MANISHA CHANDEL VS. MONIKA BHOLA Page 29 of 30 CC No. 12702/20 Judgment stand on its own footing and the same has not been proved as per the touchstone of 'beyond reasonable doubt'. Consequently, accused- Monika Bhola is acquitted under the accusation of committing the offence u/s 138 N I Act.
49) This judgment contains 30 pages. This judgment has been pronounced in the open court and each page bears the signatures of the undersigned.
50) Let a copy of the judgment be uploaded on the official website of District Courts, Dwarka forthwith. SHASHANK by SHASHANK Digitally signed NANDAN NANDAN BHATT BHATT Date: 2023.07.06 ANNOUNCED IN THE OPEN COURT 13:37:34 +0530 TODAY I.E. ON 06th July, 2023.
(Shashank Nandan Bhatt)
Metropolitan Magistrate (NI Act)-06
South- West, Dwarka
06.07.2023
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