Delhi District Court
Lakhan Singh vs Pawan Kumar Gupta on 29 August, 2022
IN THE COURT OF MS. MEDHA ARYA
MM -07 SOUTH-WEST: DWARKA COURTS: NEW DELHI
CNR No.DLSW02-009373-2020
Ct. Case No.7269/2020
PS: Vikaspuri
U/s.138 N.I. Act.
LAKHAN SINGH VS PAWAN KUMAR GUPTA
Date of Institution of case: 13.01.2015
Date of which Judgment reserved: 23.08.2022
Date on which judgment pronounced: 29.08.2022
JUDGMENT
1) Unique ID no. of the case : DLSW02-009373-2020
2) Name of complainant : Sh. Lakhan Singh S/o Late Sh. Kalu Singh R/o B-59, Vikas Nagar Hastsal Village, New-Delhi-59.
3) Name and address of accused : Pawan Kumar Gupta
S/o Late Sh. Arjun Dass Gupta
R/o A-2/24, 1st Floor,
Safdarjung Enclave, New Delhi-29
Digitally signed
by MEDHA
MEDHA ARYA
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4) Offence complained of : Section 138 N.I. Act
5) Plea of accused : Accused pleaded not guilty and
claimed trial
6) Final Order : Acquitted for the offence punishable
U/s.138 N.I. Act
7) Date of order : 29.08.2022
BRIEF REASONS FOR DECISION
" Well-timed silence hath more eloquence than speech."
Martin Farquhar Tupper The complainant put forth a version that he advanced a cash loan of Rs. 25 lacs to the accused, without any documentation or witnesses, and when asked how he could manage it-he relied on studied obfuscation. He stated that not only he cannot specify what income he had around the time he advanced the subject loan to the accused, but also that he cannot even give a vague approximation thereof. Given that the accused could point out an obvious cleavage in the version of the complainant, he is hereby acquitted of the offence alleged against him.
Digitally signedby MEDHA
MEDHA ARYA Date: ARYA 2022.08.30 18:04:36 +0530 Pg. 2 of 19 C.C. No.7269/2020
1. To help the accused cope with financial issues in his business, the complainant advanced him a friendly loan of Rs. 25 lacs, in January 2013, for a period of six months. In discharge of his liability towards the repayment of this amount, the 'cheque in question', that is, the cheque bearing number 566752 dated 25.07.2013 drawn on ICICI Bank Ltd, Karol Bagh, New-Delhi Branch amounting to Rs.25,00,000/- was issued by the accused in favour of the complainant. The said cheque in question, when presented for encashment by the complainant, was returned dishonoured with remarks 'Account Closed' vide return memo dated 30.07.2013 . Statutory legal demand notice dated 14.08.2013 was duly served upon the accused by the complainant, seeking the payment of the amount of the cheque in question. The same also went unheeded to, and the complainant was constrained to move this Court, by way of the above-captioned complaint, seeking the prosecution and conviction of the accused for the offence punishable under Section 138 N.I. Act with respect to the cheque in question.
2. The filing of the complaint was the commencement point of the chequered history of its trial. The complainant was examined u/s.200 CrPC after a preliminary scrutiny of the complaint. At this stage, the complainant tendered his evidence affidavit Ex.CW1/1. The contents of the same are not being reproduced herein in the interest of brevity, the same being a reiteration of contents of the complaint. The complainant also placed reliance on the following documents:
Digitally signed by MEDHA ARYA MEDHA Date:
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(i) Ex.CW1/A being the cheque in question,
(ii) Ex.CW1/B being the cheque return memo,
(iii) Ex.CW1/C being the legal demand notice dated 14.08.2013,
(vi) Ex.CW1/D being the speed post receipt,
(vii) Ex.CW1/E being the registered/ AD receipt,
(viii) Ex.CW1/F being the internet generated tracking report,
(ix) Ex.CW1/G being the A/D Card.
Upon consideration of the pre-summoning evidence, scrutiny of documents, and after hearing the complainant on the point of summoning, the accused was summoned to face the trial. However, the summoning order was set aside by the Ld. Revision Court, vide order dated 16.01.2017, on the ground that the Court did not consider the point of the complaint being barred by limitation.
In pursuance of the above-cited order of the Ld. Revisionist Court, this Court considered the application of the complainant under Section 142(b) NI Act, and vide order dated 18.10.2018, the complaint was dismissed. This order, in turn, was set aside by the Ld. Revisionist Court, vide order dated 29.05.2019, and the delay in filing the complaint was condoned, and the accused was directed to enter appearance before this Court. Digitally signed by MEDHA MEDHA ARYA ARYA Date:
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3. When the accused entered appearance, he was admitted to bail, and a formal notice under Section 251 CrPC was served upon him, vide which notice the substance of the allegations against him was explained to the accused. The accused pleaded not guilty to the offence alleged against him. When given the opportunity to substantiate his plea of defence, the accused admitted his signatures on the cheque in question, but stated that he had given the same to one Tyagi ji, from whom he had borrowed a loan, as a security cheque, in blank signed condition. He denied having any loan transaction with the complainant, and pleaded ignorance on how the cheque in question came in possession of the complainant. He denied the receipt of the statutory legal demand notice as well.
4. Thereafter, vide order dated 01.06.2022, the oral application of the accused u/s.145(2) N.I. Act was allowed, and the accused was given the permission to cross-examine the complainant's witnesses. The hearing in the case then progressed to the stage of C.E.
5. At the stage of C.E., the complainant examined himself as CW1. At this stage, the complainant adopted his pre-summoning evidence as post-summoning evidence. The complainant also placed reliance on the documents already exhibited as Digitally signed by MEDHA ARYA MEDHA Date:
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Ex.CW1/A to Ex.CW1/G. He was cross examined by the accused at length, and discharged.
6. No other witnesses were examined by the complainant, and CE was closed consequent to his statement to this effect, as per order dated 08.06.2022.
7. Thereafter, the accused was examined under Section 313 CrPC. All the incriminating evidence against him was put to the accused, and the accused was given the opportunity to offer an explanation qua the same. At this stage, the accused submitted that he never had any loan transaction with the accused, and stated that he had given the cheque in question, in blank signed condition, to one Subhash Tyagi and Om Prakash Tyagi, in a separate transaction. He submitted that he does not know how the same came in possession of the complainant. He further stated that he does not remember if he received the legal notice, but stated that the address mentioned on the same is correct. When queried specifically, he opted to lead DE in the affirmative.
8. Thereafter, the hearing in the case progressed to the stage of D.E. At the stage of DE, the accused only examined himself as DW1, after his application under Section 315 CrPC was allowed. As DW1, the accused deposed that he does not even know the complainant, and avouched that no friendly loan transaction had taken place Digitally signed by MEDHA ARYA MEDHA Date:
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between him and the complainant. He deposed that he had given the cheque in question to one Subash Tyagi, from whom he had borrowed Rs.10 lakhs, in blank signed condition, as a security cheque, and the said cheque has been misused by the complainant. He deposed that he has repaid the loan of Rs.10 lakhs to Subhash Tyagi and Om Prakash Tyagi, in a settlement arrived by him with them in a separate complaint under section 138 NI Act, the certified copy of which is Ex. DW 1/1.
In his cross-examination, he admitted his signatures on the cheque in question. He also admitted that he was not a party to the complaint Ex. DW 1/1, and further accepted the suggestion that his son was the accused in the said complaint. However, he volunteered that on behalf of his son, he had settled the dispute in the said complaint. He accepted that the legal notice Ex. CW1/C bears his correct address. He also accepted as correct the suggestion that Rameshwari Devi, wife of late Shri Subhash Tyagi, has also filed a complaint against his son under section 138 NI Act. After being cross examined thus, DW1 was discharged as a witness .
9. No other witnesses were examined by the accused, and DE was closed upon his statement on 23.08.2022.
10. Final arguments were heard on behalf of the parties. In order to buttress his arguments, the accused also relied upon the following judgments- Digitally signed by MEDHA ARYA MEDHA Date:
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(i) Rangappa vs Sri Mohan AIR 2010 SC 1898
(ii) Tedhi Singh vs Narayan Das and Anr. 2022 LiveLaw (SC) 275
(iii) ANSS Rajashekhar vs. Augustus Jeba Ananth 2019 [3] JCC 1732
(iv) Basalingappa vs. Mudibasappa 2019 VI AD (SC) 634
(v) K. Subramani vs. K. Damodara Naidu IX (2014) SLT 449
(vi) M.S. Narayana Menon alias Mani vs. State of Kerala and Anr AIR 2006 SC 3366
(vii)Ramdas vs. Krishnanand 2014(4)Civil Court Cases 232 (SC)
(viii) Leena Kataria Vs. State and Anr. 2020 II AD (Delhi) 259
(ix) Sanjay Verma vs. Gopi Halwai 2019 (2) LRC 202 (Del) Record perused. Considered.
11. It would be apposite at this stage to briefly the discuss law applicable to the offence of dishonour of cheques. The legal position that emerges, from a reading of S.138 N.I. Act, is that before a finding of conviction for the offence punishable under Section 138 N.I. Act can be returned against the accused, it has to be established, cumulatively-
(i) that the cheque in question was issued by the accused in favour of the complainant for the discharge of a legally enforceable liability.
(ii) presentation of the cheque to the bank within three months from the date on which it is drawn or within the period of its validity, whichever is earlier;
Digitally
signed by
MEDHA MEDHA ARYA
Date:
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(iii) a demand being made in writing by the payee or holder in due course by the issuance of a notice in writing to the drawer of the cheque within thirty days of the receipt of information from the bank of the return of the cheque; and
(iv) the failure of the drawer to make payment of the amount of money to the payee or the holder in due course within fifteen days of the receipt of the notice.
This court shall now examine if the four ingredients as described in the foregoing paragraph have been satisfied in this case.
12. That the cheque in question Ex.CW1/A has been drawn on the account of the accused, and was presented for encashment by the complainant within the statutory period has not been disputed by the accused. Accordingly, condition no.(ii) above stands satisfied.
13. Qua the requirement of service of statutory demand notice, it is seen from the record that the accused denied the receipt of legal demand notice, when a formal notice u/s.251 CrPC was served upon him. He failed to depose to this effect, however, while deposing as DW1, that the offence alleged against him remained inchoate on account of non-service of legal notice. Further, he never denied the correctness of the address on which the legal notice was sent during the pendency of Digitally signed by MEDHA MEDHA ARYA Date:
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trial. The requirement of Section 138 N.I. Act is that the complainant should send a legal notice to the accused, and not that the same must be received by the latter. The complainant did his best by sending the legal notice at the correct legal address of the accused, to which effect deposed as CW1. In view of the same, presumption under Section 114 of the Indian Evidence Act, 1872 and Section 27 of the General Clauses Act,1897, can be raised against the accused, to the effect that the legal notice was duly served upon him. No evidence has been brought on record by the accused to rebut such presumption.
Further, even if it is believed that legal notice was not received by the accused, it is apparent from the record that even after the receipt of summons, the accused had sufficient opportunity to pay the amount of cheque in question to the complainant, but didn't. The requirement of service of legal notice has been thus substantially complied with. Here, this Court seeks guidance from the law laid down by the Hon'ble Supreme Court of India in C.C. Alavi Haji v. Palapetty Muhammed, (2007) 6 SCC 555.
Accordingly, conditions no.(iii) and (iv) above also stand satisfied, as it is a matter of record that the accused had due notice of pendency of the present com- plaint, despite which he failed to make the payment of cheque in question to the com -
plainant. Digitally
signed by
MEDHA
MEDHA ARYA
ARYA Date:
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14. The formalistic hurdles out of the way, it now remains to be examined if the cheque in question was issued by the accused in favour of the complainant in discharge of a legally enforceable liability.
15. At this stage, regard has to be given to Section 139 N.I. Act, which provides that if the maker of the cheque admits his signatures on the same, a presumption shall arise that the cheque in question has been received by the holder in discharge of any debt or liability. Section 118 of the same enactment is also to be referred here, which provides for a presumption that every negotiable instrument, in the hand of a holder in due course, has been made for consideration. In the case at hand, the accused has admitted his signatures on the cheque in question. Therefore, a presumption u/s.139/118 N.I. Act can be raised against the accused.
This is so, even though the accused has taken the defence that he had not filled the details on the cheque in question. Section 20 of the Negotiable Instrument Act assumes relevance here, which provides that prima-facie, a holder of an inchoate negotiable instrument has the authority to complete the document. That is to say, a person issuing a cheque is presumed to authorise a holder to fill up the blank spaces and cannot escape his liability on this ground alone. Reliance at this juncture can be also placed upon the law laid down by Hon'ble High Court of Delhi in Jaspal Singh Vs. State (Govt. of NCT. Of Delhi) 2016 SCC OnLine Del 6007.
Digitally
signed by
MEDHA
MEDHA ARYA
ARYA Date:
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16. It is trite that the presumption that has been raised against the accused is rebuttable in nature. The effect of the presumption is that the journey of the trial in this case, after a presumption is raised against the accused, shall begin from the vantage point of the accused who is required to prove that the cheque in question was not issued by him in favour of the complainant towards the discharge of any legally enforceable liability. Reliance at this juncture can be placed on the judgment titled Hiten P. Dalal Vs. Bratindranath Banerjee (2001) 6 SCC 16 . To achieve this purpose, the accused can either take the witness stand and prove his defence in the affirmative, on a scale of preponderance of probabilities, or he can show sufficient gaps in the case of the complainant, so as to create a reasonable doubt in the mind of the court regarding the version of the complainant. If he is able to do so, the onus then shifts to the complainant, who is required to prove his case beyond all reasonable doubt. The factual position at hand shall be examined through the prism of the legal position enunciated above.
17. Against the case of the complainant that he had advanced of friendly loan of Rs.25 lakhs to the accused, who was suffering from financial distress qua his business, the competing version set up by the accused is that he had neither obtained any loan from the complainant, nor issued the cheque in question in his favour. It is the Digitally signed by MEDHA MEDHA ARYA Date:
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case of the accused that he had issued the cheque in question, in blank signed condition, along with one other cheque, in favour of one Balram Tyagi and Om Prakash Tyagi, from whom he had obtained a loan of Rs 10 lacs. It is his case that he and the complainant have never had any friendly relations, and that there was no occasion for friendly relations between them.
18. In establishing the lack of any financial transaction between the parties, and the lack of any friendly relations, in the considered opinion of this court, the accused miserably failed. It is his case that the cheque in question was issued by him in favour of Balram Tyagi and Om Prakash Tyagi, with whom he had later settled his disputes. In order to substantiate this defence, the accused relied upon the fact that the cheque in question pertains to the same time as the subject cheque forming part of the complaint Ex DW1/1. Record also reveals that the legal notice forming part of the said complaint Ex DW1/1 uses identical language as the legal notice Ex CW1/C. Reliance on these facts merely, however, appears to be only lip service on the part of the accused to prove his defence. If the accused wanted to prove his defence with any sincerity, he could have summoned the said Balram Tyagi and Om Prakash Tyagi as witnesses, to prove that he had issued the cheque in question in their favour in the year 2013, and to bring on record the true and complete picture of how the cheque in question came in possession of the complainant. Given the defence of the accused that he had given the cheque in question along with one other cheque amounting to Rs.10 Digitally signed by MEDHA MEDHA ARYA Pg. 13 of 19 C.C. No.7269/2020 ARYA Date:
2022.08.30 18:06:34 +0530 lakhs which, when presented for encashment by the said Om Prakash Tyagi, was dishonoured and led to the filing of the complaint Ex. DW1/1, and the parties had later amicably settled their dispute pertaining to the said complaint, presumably the witnesses would have easily deposed in his favour. The failure of the accused to summon the said Om Prakash Tyagi as a witness casts a serious cloud of doubt over his version. The suggestion of the complainant to the accused, while the latter was deposing as DW1, that another case was filed against his son by the wife of Subhash Tyagi is indicative of the fact that the complainant deposed falsely to the effect that he does not even know Subhash Tyagi, but still does not establish the version of the accused, even on a scale of balance of probabilities.
19. Now, it is the case of the accused that the complainant never had any friendly relations with him, and therefore, the question of a loan transaction to the tune of Rs.25 lakhs between the parties did not arise. In order to establish this testimony, the accused subjected the complainant to a long line of questioning. In his cross- examination, CW1 deposed that he knows the accused since the year 2009, although he does not know how the acquaintance commenced. He further testified that he knows that the accused resides in Safdarjung enclave, and is engaged in the business of kitchen-ware equipments. He further deposed that although he is unable to specify the exact residential address of the accused, he had once visited the house of the accused, and on the said occasion came to know that the brother of the accused Prem Digitally signed by MEDHA MEDHA ARYA Pg. 14 of 19 C.C. No.7269/2020 ARYA Date:
2022.08.30 18:06:39 +0530 Sagar resides in the ground floor of the building where the accused decides.This portion of the testimony of CW1 reveals he was atleast somewhat acquainted with the accused, and any conclusion otherwise cannot be drawn merely because he was unable to specify the exact address of the accused. Cumulatively considered, these facts show the existence of some acquaintance between the parties, and are enough to negative the contention of the accused that he was completely unacquainted with the complainant prior to the filing of the instant complaint.
20. Where the complainant's case was decisively perforated was on the point of his financial capacity. Now, reference to the law laid down by the Hon'ble Apex Court in Rohitbhai Jivanlal Patel vs State of Gujrat 2019 Online SCC 389, makes it clear that generally, the financial capacity of the complainant becomes relevant only after the accused has discharged the initial burden of proof placed against him. However, in the facts of that case, the complainant had placed on record a promissory note in support of his version that he had advanced a friendly loan of Rs 22.50 lacs to the accused, besides another witness to falsify the claim of the accused that he had transacted with a third party.
In the case at hand, however, the complainant's case lacks any such foundation. When he was quizzed qua his financial capacity, CW1 deposed that he advanced a loan out of his savings, and that his source of income comprised of the Digitally signed by MEDHA MEDHA ARYA Date:
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earning he made by working as a property dealer. When asked what was his approximate monthly income in the year 2013, at the time when the alleged subject loan transaction had taken place, the complainant deposed that he cannot so specify his income. In fact, he deposed that he cannot even specify if used to earn Rs.10,000/-, Rs.15,000/-, or Rs.20,000/- a month at the relevant time. The fact that the complainant has asserted on the one hand that he had advanced a loan of Rs. 25 lakhs to the accused, and at the same time refused to give even a vague approximation of the source from which he could advance the loan amount seriously dents his version. The studied vagueness in his testimony brings to the fore the falsity of his claim. The complainant claims to have advanced a humungous loan of Rs 25 lacs to the accused, and the fact that despite being a property dealer, he chose to not even vaguely specify his income is indicative of the fact that he did not have the financial wherewithal to advance such a huge sum of money to the accused as a loan. Guidance at this juncture is sought by this Court from the law laid down by the Hon'ble Supreme Court of India in K Subramani vs K Damodara Naidu IX (2014) SLT 449, wherein the accused was acquitted, after taking note of the fact that the complainant failed to establish his financial capacity to advance a loan to the accused. Reliance can also be placed on the judgment titled Tedhi Singh vs Narayan Dass Mahant 2022 LiveLaw (SC) 275 , wherein it has been held that to displace the burden of proof stacked against him, the accused has the right to demonstrate that the complainant did not have the financial capacity to advance the subject loan. By eliciting the testimony from the complainant to the effect that he was unaware of his own monthly income, both at the time when Digitally signed by MEDHA MEDHA ARYA Date:
Pg. 16 of 19 C.C. No.7269/2020 ARYA 2022.08.30 18:06:47 +0530 the testimony was recorded and at the time when the alleged loan transaction took place, the accused successfully put under clout the financial capacity of the complainant.
21. The doubt is compounded by the fact that the complainant put forth a bald averment to the effect that he had advanced a loan of Rs 25 lacs to the accused, without specifying if it were extended by him in one go, or in tranches. The manner, and the dates on which the loan was extended was not elaborated . At this juncture, this Court seeks guidance from the law laid down by the Hon'ble High Court of Delhi in Sanjay Verma vs Gopal Halwai 2019 (2) LRC 202 (Del), wherein the Court considered the facts such as the failure of the complainant to mention the exact date of advancing the loan, non-execution of a loan document, and the doubt created on the financial capacity of the complainant to come to the conclusion that the subject cheque was not issued for repayment of any loan. In the case at hand, the lapses in the testimony of complainant, when considered alongwith the fact that the cheque in question was not filled by the accused, as is evident from a simple examination thereof under Section 73 Indian Evidence Act, 1872, creates a doubt in the mind of this Court that the cheque in question was not issued by the accused in favour of the complainant towards repayment of a friendly loan of Rs 25 lacs. The fact that CW1 deposed in his cross examination that he is not sure how he became acquainted with the accused is also pertinent, in as much as it establishes that while he was not completely Digitally signed by MEDHA MEDHA ARYA Date:
Pg. 17 of 19 C.C. No.7269/2020 ARYA 2022.08.30 18:06:52 +0530 unacquainted with the accused, the acquaintance was not a strong one, and makes the grant of a huge loan seem even more unjustifiable. CW1 did not even bring on record any fact to show that he had a previous loan transaction with the accused, which loan was duly repaid by him, and because of which he trusted the latter with the subject loan amount. Complainant himself suggested to the accused that other complaints under Section 138 NI Act have been filed against him. Yet, he did not bring on record any fact that to show he had ascertained the financial capacity of the accused to repay the loan amount, before advancing the alleged loan to the accused.
22. On a scale of balance of probabilities, by pointing out these crevices in the case of the complainant, the accused could demonstrate that no such loan was extended to him by the complainant. With this, the burden of proof shifted to the complainant, who was then required to prove his case beyond reasonable doubt. In this endeavour, the complainant miserably failed. Besides deposing himself that he does not even know the approximate monthly income that he had at the relevant time when he had extended the subject loan to the accused, the complainant also conceded that he was not assessed to income tax, and had therefore not disclosed the transaction to the relevant authorities. He himself testified that no loan documentation, encapsulating the transaction, had taken place. No independent witness to the loan transaction was summoned by him on the record. No bank account statement to prove his solvency, Digitally signed by MEDHA MEDHA ARYA Date:
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and capacity to advance the loan was also brought on record by him. All in all, the complainant failed to cover the gaps in his case.
23. Accordingly, the accused Pawan Kumar Gupta S/o Late Sh. Arjun Dass Gupta is acquitted for the offence punishable under section 138 NI Act.
File be consigned to record room after compliance with section 437A CrPC. Digitally signed by MEDHA MEDHA ARYA ARYA Date:
2022.08.30 18:07:03 +0530 Announced in open Court on (MEDHA ARYA) 29th Day of August, 2022 M.M.-07, South-West, (19 pages) Dwarka Courts, New Delhi Pg. 19 of 19 C.C. No.7269/2020