Delhi District Court
Kamal Lal vs . Neelam on 26 April, 2023
DLST020016702020
IN THE COURT OF MS. AAYUSHI SAXENA
METROPOLITAN MAGISTRATE (SOUTH) 01,
N.I. ACT, SAKET COURTS : NEW DELHI
CC NO.2425/2020
KAMAL LAL VS. NEELAM
1. Complaint Case number : CC No. 2425/2020
2 Name of the complainant : Kamal Lal,
S/o Late Sh. Chittar Ram,
R/o B426, Tigri Colony,
New Delhi110062.
3. Name and address of the : Neelam,
accused D/o Late Sh. Rajender Kumar,
R/o House No. B771, Tigri
Colony, New Delhi110062.
4. Offence complained of or : Under Section 138 read with
proved Section 142 of the Negotiable
Instruments Act, 1881.
5. Plea of the accused : Pleaded not guilty and
claimed trial.
6. Final Order : Conviction
7. Date of Institution : 17.01.2020
CC No. 2425/2020
Kamal Lal Vs. Neelam Page No. 1 of 18
8. Date of Reserving the : 11.04.2023
Judgment
9. Date of pronouncement : 26.04.2023
of judgment
JUDGMENT
1. The instant complaint is in respect of an offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter "the NI Act").
2. The instant complaint has been instituted by Mr. Kamal Lal, who is complainant in the present case.
3. Succinctly, the chain of facts leading to filing of the present complaint, as has been averred in the present complaint, are as follows:
3.1 Complainant and accused are well acquainted to each other since a long time and the Accused is the daughter of cousin sister of the complainant. The accused and her mother approached the complainant for taking a friendly loan of Rs.7,00,000/ on the pretext that the accused wanted to purchase some property. Keeping in mind the urgency showed by the accused and her mother, the complainant approached his brotherinlaw Hari Shankar to arrange the said amount. The complainant gave CC No. 2425/2020 Kamal Lal Vs. Neelam Page No. 2 of 18 Rs.7,00,000/ to the accused, for a period of one year, in two instalments; first of Rs.2,00,000/ was given in cash on 10.07.2018 and the second installment of Rs.5,00,000/ was also given in cash on 16.07.2018, after withdrawing from the account of Hari Shankar. In the first week of August, 2019, the complainant approached the accused and asked for refund of loan amount, but the accused requested some more time and pursuant thereto, the accused issued cheque bearing no.000009 dated 19.11.2019 for Rs.7,00,000/ drawn on Bank of India, Deoli Khanpur Branch, New Delhi (hereinafter, the said cheque will be referred to as 'cheque in question').
The complainant presented the said cheque for encashment with his banker i.e. Punjab National Bank, Khanpur Branch, New Delhi, however, the said cheque was returned unpaid with remarks "funds insufficient" vide return memo dated 22.11.2019. Thereafter, the complainant got issued legal demand notice dated 17.12.2019 but despite receiving intimation of abovesaid notice, the accused failed and refused to pay the cheque amount to the complainant within the prescribed period of 15 days. Hence, the present complaint has been filed by the complainant against the accused.
4. Pursuant to filing of the said complaint, the complainant, filed his presummoning evidence by way CC No. 2425/2020 Kamal Lal Vs. Neelam Page No. 3 of 18 Affidavit, Ex.CW1/F and has relied upon documents Ex.CW1/A to Ex.CW1/E.
5. Ld. Predecessor of this Court took cognizance of the offence under Section 138 NI Act vide order dated 20.01.2020 and ordered for issuance of summons for attendance of the accused.
6. The accused entered appearance on 16.10.2021 and she was admitted to bail on 25.03.2022.
7. On 25.03.2022, notice under Section 251 Code of Criminal Procedure, 1973 (hereinafter referred to as 'Cr.P.C.') was given to the accused and she was asked whether she pleaded guilty or claimed trial. In reply to this, she pleaded not guilty and claimed trial. In her defence, she stated that her mother had taken an interest free loan of Rs.4,50,000/ from the complainant in the year 2016 and at the time, the complainant took 5 blank signed security cheques from her mother. Accused also stated that in the year 2018, when the complainant approached her mother for repayment of said loan, she told the complainant she is in the process of selling her land in Tigri and if she was unable to pay the said loan amount, then the same could be recovered from selling her land. Accused further stated that they had sold their land to some third person and got the sale consideration amount. After that, Rs.5,00,000/ was given in cash to CC No. 2425/2020 Kamal Lal Vs. Neelam Page No. 4 of 18 Kamal and Giriraj in presence of her maternal aunts namely Maya Devi and Vidya, Vijay Kumar (paternal uncle) and Vijay (maternal cousin). Accused also stated that no receipt of the said payment was taken by them from the complainant and when they asked the complainant to return the cheques, he told them that he was unable to find them and would return the same as and when they were found. Accused further stated that after some time, they again asked the complainant to return the cheques and documents but the complainant told them that he had torn the same. The accused also admitted her signatures on the cheque. 7.1 Since the statement of defence of accused revealed a specific defence, hence, she was allowed to cross examine the complainant witness in accordance with Section 145(2) of NI Act. 7.2 Given the nature of the allegations, this Court had directed that the case shall be tried as a Summons case under Chapter XX of Cr.P.C. 7.3 Admissiondenial of documents was conducted u/s 294 Cr.P.C. Witnesses mentioned at Serial No.2 and 3 of the list of witnesses filed by the complainant, were dropped.
8. Thereafter, complainant examined himself as CW1. He was cross examined and discharged on 09.11.2022. Complainant also examined one witness namely Hari Shankar as CW2, who was examined in CC No. 2425/2020 Kamal Lal Vs. Neelam Page No. 5 of 18 chief, cross examined and discharged on 24.12.2022. On that very date, CE stood closed on submissions of the complainant.
9. After closure of complainant's evidence on 24.12.2022, statement of the accused under Section 313 Cr.P.C. read with Section 281 Cr.P.C. was recorded on 07.01.2023, whereby circumstances appearing against her in evidence were put to her. While denying the incriminating evidence put to her, she reiterated her defence u/s 251 Cr.P.C
10. Pursuant thereto case was fixed for DE. Accused examined herself in her defence as DW1. DW1 was cross examined and discharged on 04.02.2023. Accused also examined other witnesses in her defence namely, Smt. Vimla as DW2, Vijay Kumar as DW3, Ms. Vidhya Devi as DW4 and Sh. Vijay Kumar as DW5, who were also examined, cross examined and discharged. In view of submissions of accused , DE stood closed vide order dated 04.02.2023. Thereafter matter was fixed for final arguments.
11. Final arguments were advanced on behalf of both the parties.
12. I have heard arguments on behalf of both the parties and have gone through the record carefully.
CC No. 2425/2020 Kamal Lal Vs. Neelam Page No. 6 of 1813. Before delving into the facts of the present case, it would be apposite to discuss the legal framework regarding the offence under Section 138 of NI Act. The ingredients which are to be satisfied for making out a case under Section 138 NI Act, are being reproduced hereunder:
13.1 First Ingredient: The cheque was drawn by a person on an account maintained by him/her for payment of money and the same is presented for payment within a period of 3 months from the date on which it is drawn or within the period of its validity;
13.2 Second Ingredient: The cheque was drawn by the drawer for discharge of any legally enforceable debt or other liability;
13.3 Third Ingredient: The cheque was returned unpaid by the bank due to either insufficiency of funds in the account to honour the cheque or that it exceeds the amount arranged to be paid from that account on an agreement made with that bank; 13.4 Fourth Ingredient: A demand of the said amount has been made by the payee or holder in due course of the cheque by a notice in writing given to the drawer within thirty days of the receipt of information of the dishonour of cheque from the bank;
13.5 Fifth Ingredient: The drawer fails to make CC No. 2425/2020 Kamal Lal Vs. Neelam Page No. 7 of 18 payment of the said amount of money within fifteen days from the date of receipt of notice.
14. Notably, the first, third, fourth and fifth ingredient have been duly proved without there being any real controversy regarding the same:
(a) The complainant has proved the original cheque, Ex.CW1/A, which the accused has not disputed as the same has admittedly been drawn from her account. It is not disputed that the cheque in question was presented within its validity period.
(b) The cheque in question was returned unpaid vide return memo Ex.CW1/B due to the reason "Funds Insufficient".
(c) The complainant has proved on record legal notice, speed post receipt and tracking report, which are Ex.CW1/C, Ex.CW1/D and Ex.CW1/E respectively.
Now, it is the defence of accused that she did not receive the legal demand notice. Pertinently, the accused has admitted that the address mentioned on the legal demand notice is her correct address. Once, it is not disputed and proved on record that the legal demand notice was sent to her correct address, then her defence that, she did not receive any legal demand notice is no defense in the eyes of law in view of the landmark judgment passed by Hon'ble Supreme Court of India in matter of "C. C. Alavi Haji Vs. Palapetty CC No. 2425/2020 Kamal Lal Vs. Neelam Page No. 8 of 18 Mohd. & Anr." reported in (2007) 6 Supreme Court Cases 555. In the said judgment, Hon'ble Supreme Court of India has held that : "Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of complaint Under Section 138 of the Act, make the payment of the cheque amount and submit to the court that he had made the payment within 15 days of the receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complainant is liable to be rejected. A person who does not pay within 15 days of receipt of summons from the court along with the copy of complaint Under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required Under Section 138, by ignoring statutory presumption to the contrary Under Section 27 of G. C. Act and 114 of the Evidence Act."
In the present case, the accused has not disputed the correctness of the address at which legal demand notice was sent. So, in light of abovesaid judgment and discussions, this Court is of the opinion that defence of accused, that she had not received any legal demand notice is without any force and is hereby rejected.
(d) The fact that the payment was not made within 15 days of the receipt of the legal notice is also not disputed.
CC No. 2425/2020 Kamal Lal Vs. Neelam Page No. 9 of 1815. As far as the proof of second ingredient is concerned, the complainant has to prove that the cheque in question was drawn by the drawer for discharging a legally enforceable debt. In the present case, the issuance of the cheque in question is not denied. As per the scheme of the NI Act, once the accused admits signature on the cheque in question, certain presumptions are drawn, which result in shifting of onus. Section 118 (a) of the NI Act lays down the presumption that every negotiable instrument was made or drawn for consideration. Another presumption is enumerated in Section 139 of NI Act. The provision lays down the presumption that the holder of the cheque received it for the discharge, in whole or part, of any debt or other liability. The combined effect of these two provisions is a presumption that the cheque was drawn for consideration and given by the accused for the discharge of debt or other liability. Both the sections use the expression "shall", which makes it imperative for the court to raise the presumptions, once the foundational facts required for the same are proved. Reliance is placed upon the judgment of the Hon'ble Supreme Court, Hiten P. Dalal vs. Bratindranath Banerjee [(2001) 6 SCC 16]. Further, it has been held by a threejudge bench of the Hon'ble Apex Court in the case of Rangappa vs. Sri Mohan [(2010) 11 SCC 441] that the presumption contemplated under Section CC No. 2425/2020 Kamal Lal Vs. Neelam Page No. 10 of 18 139 of NI Act includes the presumption of existence of a legally enforceable debt. Once the presumption is raised, it is for the accused to rebut the same by establishing a probable defence. The principles pertaining to the presumptions and the onus of proof were recently summarized by the Hon'ble Apex Court in Basalingappa vs. Mudibasappa [(2019) 5 SCC 418] as under:
"25. We having noticed the ratio laid down by this Court in the above cases on Section 118 (a) and 139, we now summarise the principles enumerated by this Court in the following manner:
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.
2. The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
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 circumstances upon which they rely.CC No. 2425/2020 Kamal Lal Vs. Neelam Page No. 11 of 18
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.
5. It is not necessary for the accused to come in the witness box to support his defence."
16. Let us now see whether the accused has been able to raise a probable defence in her favour and has been able to rebut the said presumption.
17. It is the defence of the accused that she did not take any loan from the complainant but it was her mother, who had taken loan of Rs. 4,50,000/ from the complainant in the year 2016 and cheque in question was given as security to the complainant by her mother. It is also her defence that when the cheque in question was given to the complainant, she was not aware about the same.
18. Admittedly, the cheque in question bears her signature. The accused has merely stated that neither did she take any loan from the complainant nor she issued the cheque in question to him. However, she has not proved the abovementioned defense cogently. Moreover, the accused has admitted that cheque in question was given as security to the complainant.
CC No. 2425/2020 Kamal Lal Vs. Neelam Page No. 12 of 1818.1 Before proceeding further with the present case, it is trite to refer to the law laid down by Hon'ble Supreme Court of India in I.C.D.S. Ltd vs Beena Shabeer & Anr (Appeal (crl.) 797 of 2002), wherein it has been held that:
"The language, however, has been rather specific as regards the intent of the legislature. 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. This aspect of the matter has not been appreciated by the High Court, neither been dealt with or even referred to in the impugned judgment."CC No. 2425/2020 Kamal Lal Vs. Neelam Page No. 13 of 18
18.2 Coming now to the facts of the present case, the cheque in question, which is duly signed by the accused, was returned unpaid by her banker. In light of the abovementioned judgment, the liability under Section 138 NI Act cannot be avoided. It is for the accused to prove that the cheque in question was not issued towards discharge of any debt/ liability.
19. The accused has taken the defence that her mother had taken an amount of Rs. 4,50,000/ from the complainant. Thereafter, the matter was settled for an amount of Rs. 5,00,000/ and amount of Rs.5,00,000/ was repaid to the complaint by accused and her mother, after receiving sale consideration from sale of their land in Tigri, in her presence and also in presence of some other witnesses namely Vijay Kumar (her chacha), Vijay Kumar (her brother), her mother, Maya Devi and Vidhya Devi (her masis) , Geeta, Ashok etc. 19.1 During crossexamination of DW1, she stated that she was not aware of any bayana receipt regarding the said property.
19.2 Now, when the mother of the accused entered the witness box as DW2, during her cross examination she stated that "I have all the documents with respect to the property that was sold by me. I can produce the documents, if asked for."
CC No. 2425/2020 Kamal Lal Vs. Neelam Page No. 14 of 18It is noteworthy that the said documents were never produced by DW2.
19.3 Pertinently, no document was filed by the accused in order to show that, on receipt of sale consideration amount, the loan amount was repaid to the complainant. If the accused wanted to prove her defence, then it was incumbent on her to prove the source from which the amount was repaid. She could have filed the agreement to sell or any receipt to show the sale of the property. For reasons best known to her, she failed to prove her defence by any documentary proof.
19.4 Admittedly, there is no document to show repayment of the loan amount to the complainant. So, this also creates a doubt on the defence of the accused.
20. Now, when DW1 was cross examined by Ld. Counsel for the complainant, she stated that "It is correct that I had not lodged any police complaint when the complainant did not return my cheques (vol. the complainant had told me that he had destroyed the cheque and hence, she did not lodge any police complaint)" .
It is not that the accused is an uneducated or an illiterate person but in fact she is admittedly is a CC No. 2425/2020 Kamal Lal Vs. Neelam Page No. 15 of 18 Chartered Accountant by profession. Therefore, a reasonable person of such a qualification is presumed to be aware of the consequences of leaving a valuable security like blank signed cheque with some other person and particularly when, as per her own admission, she did not owe anything to the complainant. It is important to note that in her volunteered statement she stated that the complainant had told her that he had destroyed the cheque and hence she did not lodge any police complaint. Now, if the complainant had told her that he had destroyed her cheque, then she should have taken it in writing from the complainant. She failed to do so and remained silent. So, this makes her defence even more unreliable.
21. The accused examined Sh. Vijay Kumar in her defence as DW5. During his crossexamination, he stated that "It is correct, I have come to depose at the instance of Bua Vimla. I am not aware whether complainant gave any money to the accused." So, this testimony of the witness also falsifies the case of the accused.
22. If the accused did not owe anything to the complainant, then it was incumbent on her to prove that by some cogent documentary evidence. The accused has not placed on record any documentary proof to show that the amount was repaid to the complainant. She has only examined her relatives in her defence.
CC No. 2425/2020 Kamal Lal Vs. Neelam Page No. 16 of 1822.1 In this regard, it is pertinent to refer to the judgment of Hon'ble Delhi High Court in Badri Dass Jain vs A.G.F.R. & S. Consumers (28 (1985) DLT 149) wherein it has been interalia held that "It is well known that when there is choice only between the two oral statements the party upon whom the onus lay must fail."
22.2 As already mentioned above, in order to rebut the presumptions u/s 118 NI Act and 139 NI Act, the accused has to raise a probable defence by adducing cogent evidence.
22.3 In the instant case, admittedly, there is no documentary proof regarding the present transaction. Both the sides have examined their witnesses and adduced oral evidence. As has been stated above, the onus was on the accused to rebut the presumptions u/s 118 NI Act and 139 NI Act by leading cogent evidence. However, the accused has merely led oral evidence but has failed to evidence her defence by any documentary proof. In view thereof, the defence of the accused has to be rejected.
Conclusion
25. From the above discussion, I am of the considered opinion that all the ingredients of offence CC No. 2425/2020 Kamal Lal Vs. Neelam Page No. 17 of 18 punishable u/s 138 NI Act have been fulfilled with respect to accused and she has been unable to rebut statutory presumptions arising against her. Accused Neelam is hereby convicted for offence punishable under Section 138 NI Act. Let the convict be heard separately on quantum of sentence. Copy of this judgment be given free of cost to the convict.
Announced in the open Court on 26.04.2023. Digitally signed by AAYUSHI AAYUSHI SAXENA SAXENA Date:
2023.04.27 16:33:49 +0530 (Aayushi Saxena) Metropolitan Magistrate01 (South), NI Act/Saket/New Delhi/26.04.2023 CC No. 2425/2020 Kamal Lal Vs. Neelam Page No. 18 of 18