Delhi District Court
Rajesh Garg.. vs . Suresh Kumar on 16 March, 2022
IN THE COURT OF MS DIVYA ARORA, MM (NI ACT)-01,
SOUTH-WEST DISTRICT: NEW DELHI
CC No.4994134-16
Under Section 138 of N.I. Act
In the matter of:
RAJESH GARG
S/o Shri Ishwar Singh
R/o 45, Cottage Enclave,
A-4, Paschim Vihar
New Delhi - 11 0063. ... Complainant
Versus
SURESH KUMAR
s/o Shri Ram Dass
R/o A-6/8 P & T Colony
Janakpuri,
New Delhi - 110 058. ... Accused
Date of Institution : 31.08.2015
Date of Judgment : 16.03.2022
JUDGMENT
1. Briefly, the case of the prosecution is that the accused had friendly relations with the complainant and accused approached the complainant for some financial help of Rs.2 lacs for his urgent need for two months. It is further alleged that keeping in view the friendly relationship RAJESH GARG..VS. SURESH KUMAR CC NO.4994134-16 Page no.1 of 13 and assurance of the accused, the complainant disbursed a friendly loan of Rs.2 lacs to the accused on 04.05.2015. After receiving of the loan amount of Rs.2 lacs, accused executed a promissory note alongwith a post date Cheque bearing no.041564 dated 10.07.2015 for a sum of Rs.2.00 lacs drawn on Corporation Bank, Janakpuri Branch, New Delhi with the assurance that the said Cheque will be honoured on its presentation. However, on its presentation, the same got dishonoured vide return memo dated 16.07.2015 with the remarks ''FUNDS INSUFFICIENT''. Upon this, the complainant sent a legal demand notice to the accused dated 27.07.2015 and on failure of accused to pay the cheque amount within the mandatory period of 15 days, the complainant has moved this court with a complaint under section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred as "NI Act"). Original Promissory Note is Ex.CW1/A, Original Cheque is Ex.CW1/B, Return Memo is Ex.CW1/C, Copy of Legal notice is Ex.CW1/D, Receipt of Postal Department is Ex.CW1/E, Proof of Delivery is Ex.CW1/F.
2. On finding of prima facie case against the accused, summons were issued and the accused appeared before this court on 10.12.2015.
3. The notice under section 251 of the Code of Criminal Procedure ("Cr.P.C.") was framed against the accused vide order dated 25.07.2016 to which he pleaded not guilty. The accused deposed that,''I had taken a loan of Rs.50,000/- from the complainant and I had given total 12 Cheques to the complainant, out of which 10 cheques were duly filled by me i.e. name, date and the amount were filed in those cheques by me. Rest of the two cheques RAJESH GARG..VS. SURESH KUMAR CC NO.4994134-16 Page no.2 of 13 were given in a blank signed form. The cheque in question bears my signature and I did not receive any legal notice. I do not owe any liability towards the amount mentioned in the cheque in question. Other 3-4 persons have also taken loan from the complainant and the complainant has also foisted false cases against those persons also''.
4. The complainant adopted his pre-summoning evidence tendered by way of affidavit( CW1/1) as his post-summoning evidence.
5. After framing of notice, complainant examined himself as CW1 and he was cross examined by counsel for accused. Thereafter, the complainant evidence was closed and the matter was listed for statement of accused under Section 313 CrPC.
6. Statement of accused was recorded under Section 313 CrPC read with Section 281 Cr.P.C. on 08.01.2020 wherein all the incriminating circumstances appearing in evidence against the accused was put to him to which he stated that, ''I had demanded a sum of Rs.50,000/- from the complainant on 04.05.2019. The complianant advanced a sum of Rs.50,000/-to me as security for the same. I had issued 10 cheques for amount of Rs.6715/- each and two blank signed security cheques. The complainant also obtained my signatures on blank documents. It is correct that the signatures at point A1 are mine. However, the details of the promissory note were not filled in when I signed the same. I had issued the cheque in question to the complainant in blank signed condition as security.
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I want to lead defence evidence. I have repaid all but three installments each amounting to Rs.6715/- to the complainant for the loan of Rs.50,000/- availed by me. I owe no further liability to the complainant.
7. Accused in his defence, examined himself as DW1. Despite giving of ample opportunities accused failed to bring DW2 on record and thereby opportunity to lead further DE was closed vide Order dated 04.03.2022.
8. Thereafter, the Ld. Counsel for accused had moved an application u/s 311 CrPC and same was dismissed vide order dated 15.03.22. After hearing submissions of both the parties, matter was reserved for judgement.
9. Before proceeding to the merits of the case, it is important to lay down the basic provision of law with respect to Section 138 NI Act which is as follows:- Section 138 of Negotiable Instruments Act, 1881 makes dishonour of cheques an offence. It provides that ''where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have RAJESH GARG..VS. SURESH KUMAR CC NO.4994134-16 Page no.4 of 13 committed an offence and shall without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which extend to twice the amount of the cheque, or with both''.
10. In order to ascertain whether the accused has committed on offence u/s 138 NI Act, the following ingredients constituting the offence have to be proved:-
(a) The drawer of the cheque should have issued the cheque for the discharge, in whole or in part of a legally enforceable debt or other liability.
(b) The cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank.
(c) The drawer of such cheque fails to make the payment of the said amount of money within fifteen days of the receipt of the notice from the payee or the holder in due course demanding the payment of the said amount of money.
It is only when all the above mentioned ingredients are satisfied that the person who has drawn the cheque can be set to have committed an offence u/s 138 NI Act.
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11. It is important to recall Section 118 of the Indian Evidence Act 1872 and Section 139 of the N.I Act here. Section 118 (a) of the Act provides that until the contrary is proved, it shall be presumed that ''that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration''. Further, Section 139 of the Act lays down that ''it shall be presumed, unless the contrary is provided, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.
12. In the case of Hiten P. Dayal Vs Bratindranath Bannerjee (2001) G SCC 16, the Hon'ble Supreme Court of India had observed that ''Because both sections 138 and 139 CrPC required that the court shall presume the liability of the drawer of the cheque for the amount for which the cheques are drawn as noted in State of Madras Vs A. Vaidhyanatha Iyer AIR 1958 SC 61, it is obligatory on the court that raise this presumption in every case where the factual basis for raising of the presumption has been established. It introduces an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the accused''.
13. Further, in the case of K. N. Beena Vs Muniyappan AIR 2001 SC 2000, it was established as follows ''In complaint under Section 138 the court has to presume that the cheque had been issued for a debt or liability, RAJESH GARG..VS. SURESH KUMAR CC NO.4994134-16 Page no.6 of 13 this presumption is rebuttal, however, the burden of proving that the cheque has not been issued for the discharge of debt or liability lies on the accused''.
14. Let us begin by examining the first issue i.e. service of legal notice. Accused in his notice framed u/s 251 CrPC has denied to the receiving of legal notice and at the stage of 313 statement has admitted to the receiving of same. This court is of the view that the address on the legal notice once having been shown to be the correct address of accused and legal notice having been dispatched by registered AD, a presumption of due service arises in view of Section 27 of General Clause Act & Section 114 of Indian Evidence Act and now it is upon accused to prove that notice was not served upon him. Not even an iota of evidence has been brought on record by the accused to displace the presumption of due service. To the contrary, perusal of record shows that complainant has issued a legal demand notice to the accused and same was dispatched by way of speed post. Thus, a mere denial of the service of legal notice would not ipso fact rebut the presumption of due service.
15. In view of law laid down by Hon'ble Supreme Court in 'C.C. Alavi Haji vs Palapetty Muhadmmed and Ors. (2007) 6 SCC 555, wherein it was held that rigour of requirement of service of legal notice has been reduced to an almost vanishing point in Section 138 N.I. Act jurisprudence. The Hon'ble Supreme Court while discussing the true intent behind the service of legal notice as a precursor to the launch of prosecution has quite categorically held that the service of summons of the court is opportunity enough for the RAJESH GARG..VS. SURESH KUMAR CC NO.4994134-16 Page no.7 of 13 accused to pay the cheque amount and evade prosecution, any accused who fails to pay the amount within 15 days of the service of summons, clearly cannot shield himself behind the technical demand of non service of legal notice.
16. The core issue that arises for consideration whether the cheque in question was issued by the accused in discharge of his liability.
17. The accused has admitted his signatures on the cheque in question at every stage; from notice u/s 251, Cr.P.C. to his examination u/s 313, Cr.P.C. and finally in his evidence, giving rise to the presumption in favour of the holder of the cheque under S. 139 of NI Act. Thus, unless the contrary is proved, it shall be presumed that the complainant received the cheque in discharge of the debt/ liability from the accused. The standard of proof for rebuttal is on preponderance of probabilities. As held by the Hon'ble Supreme Court in decision cited as K.N. Beena vs Muniyappan And Another; (2001) 8 SCC 458, in order to rebut the presumption, mere denial by the accused will not suffice. The accused must prove by leading cogent evidence that there was no debt/ liability.
18. Major defence led by accused's counsel is that loan of Rs 50000 was availed and 12 cheques were given to accused. He further argued that out of the said cheques, 10 were duly filled by him and remaining two including cheque in question were given in a blank signed form as security cheques.
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19. In the case of I.C.D.S. Ltd. v. Beena Shabbir & Anr. reported in AIR 2002 SC 3014, the Supreme Court has observed as follows. ".....The commencement of the Section stands with the words "where any cheque". The above noted three words are of extreme significance, in particular, by reason of the user of the word "any" the first three words suggest that in fact for whatever reason if a cheque is drawn on an account maintained by him with a banker in favour of another person for the discharge of any debt or other liability, the highlighted words if read with the first three words at the commencement of Section 138, leave no manner of doubt that for whatever reason it may be, the liability under this provision cannot be avoided in the event the same stands returned by the banker unpaid. The legislature has been careful enough to record not only discharge in whole or in part of any debt but the same includes other liability as well...."
20. Thus, even if the dishonoured cheque in question was issued as a security cheque, it will still come under the ambit of Section 138 of the Act. The only condition is that the cheque must be backed by some form of legally enforceable debt or liability towards the holder.
21. The issue of blank signed cheque has been given the status of law by the Supreme Court of India in the case of Bir Singh vs. Mukesh Kumar (Criminal Appeal No. 230-231 of 2019). The Supreme Court has held as follows. "If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still RAJESH GARG..VS. SURESH KUMAR CC NO.4994134-16 Page no.9 of 13 be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence. A meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted."
22. Perusal of notice framed u/s 251 CrPC and evidence of accused reveals that accused had stated contradictory statements at various stages of trial. At the stage of notice framing, accused had stated that he had handed over two cheques in blank signed form at the time of loan advancement. However, later in his evidence accused had stated that he had handed over one cheque which is cheque in question in blank signed form. Therefore the said defence of accused that cheque in question was given as security cheque in blank signed condition does not stand strong.
23. Another defence led by accused is that he had already repaid the loan amount and the complainant had instituted a false case against him. He further argued that Ex.CW1/A was blank at the time of signing.
24. In case of Kumar Exports V. Sharma Carpets, it has been held by hon'ble SC that: " The accused may adduce direct evidence to prove RAJESH GARG..VS. SURESH KUMAR CC NO.4994134-16 Page no.10 of 13 that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not insist in every case that the accused should disprove the non-existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non-existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist."
25. Perusal of evidence on record reveals that accused had not brought any document on record showing that the loan amount has already been repaid. If the story of accused is believed that he had already loan amount then why was no complaint or legal notice ever sent to complainant for return of cheques. The said defence of accused appears to be a sham defence as accused had failed to displace the burden of proof resting upon him. Merely stating that the document Ex.CW1/A was blank at the time of signing does not seem to be a plausible defence.
26. Another defence raised by accused is that the said loan was taken RAJESH GARG..VS. SURESH KUMAR CC NO.4994134-16 Page no.11 of 13 in the presence of Dilip Kumar i.e. DW2- brother in law of accused. Despite ample opportunities been provided accused failed to examine DW2 in his defence.
27. It has been held in Hiten P Dayal v. Bratindranath Banerjee reported in (2001) 6 SCC 16 that a mere plausible defence given by accused is not enough to rebut the presumption and the accused has to necessarily disprove the prosecution case by leading cogent evidence that he had no debt or liability to issue the said cheque.
I want to add here that the accused is not expected to rebut the presumption beyond all reasonable doubt. The standard of disproof is only on the level of preponderance of probabilities. The nature of burden has been succinctly laid down by Supreme Court in Ms Naryan Menon v. State of Kerala & Another reported in AIR 2006 SC 3366, wherein the Supreme Court held that the initial burden is upon the accused to rebut the presumption under Section 139 of the Act. Only in the event of discharging the said initial burden, the onus shifts to the complainant.
28. The accused in the present case has failed to lead any cogent evidence at all to aid him in the discharge of his onus. He has not been able to rebut the presumption that is raised in favour of the complainant with respect to the existence of legally recoverable debt or liability. Accused in the present case has failed to prove that loan amount has already been repaid and there is no existing liability.
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29. In view of the forgoing discussion, the accused has miserably failed in probabilising his defence, even on the scale of preponderance of probabilities.
30. The complainant has, with the aid of presumption of legal liability under Section 118 read with Section 139 of N. I. Act, successfully proved the basis ingredients of offence under section 138 N. I Act.
31. Resultantly, the accused Suresh Kumar stands convicted for the offence under Section 138 NI Act. Let the convict be heard separately on the quantum of sentence.
32. Let a signed copy of the Judgment be supplied to the accused, free of cost, and a copy of the same be placed on record.
Decided on 16.03.2022
Announced in open court. (DIVYA ARORA)
MM (NI Act)-01/SW/DWK
New Delhi
RAJESH GARG..VS. SURESH KUMAR
CC NO.4994134-16 Page no.13 of 13