Delhi District Court
Jugesh Sehgal vs . Shamsher Singh Gogi, (2009) 14 Scc 683: on 23 December, 2019
IN THE COURT OF MS. AKRITI MAHENDRU, MM04 (NI ACT)
CENTRAL DISTRICT, TIS HAZARI COURTS, DELHI
CC No. : 522782/16
U/s : 138 NI Act
JUDGMENT
a The Sl. No. of the case : 522782/16
b The date of Institution of the case : 27.05.2002
c The name of complainant : M/s. Shree Kaushalya
Industries, through its
Partner Sh. Vijay Kumar
Gupta, 96/72, Village
Holambi Kalan, Delhi.
d The name of accused : Surinder Kumar Jain
Prop. M/s. Paper &
Board Rolls Converter,
Laxmi Nagar, Delhi.
e The offence complained of : 138 NI Act
f The plea of accused : Pleaded Not Guilty
g The final order : Convicted
h The date of judgment : 23.12.2019
JUDGMENT
1. Vide this judgment and final order, this Court shall dispose of the present complaint case instituted by the Complainant invoking the provisions of Section 138 of the Negotiable Instruments Act, 1881 (as amended to-date).
2. Whereas speaking succinctly, the gravamen of the Complainant is that the Accused, since previously known to the Complainant, had C.C. No. 522782/16 Page 1 of 17 approached him with a request for availing a business loan to get his overdraft facilities increased, in the tune of Rs.9,50,000/- (rupees nine lacs fifty thousand only) in the first week of October 2001. Allegedly, the Complainant disbursed the loan amount on 18.10.2001 by way of cheque bearing No.287844 drawn as "self" on an account maintained with Canara Bank, Kamla Nagar branch, Delhi-7, which was encashed on the same day itself and the amount was debited from his account and like amount was credited in the account of the accused by way of cash. On the same date, the Accused had allegedly issued post-dated cheques, now forming a subject matter of the present complaint case, to wit - cheques bearing no.260217 and 776904 drawn on Canara Bank, Kamla nagar branch, Delhi in the tune of Rs.11,00,000/- (rupees eleven lacs only) and Rs.1,50,000/- (rupees one lac fifty thousand only) respectively, both dated 20.04.2002, though issued on two different occassions (hereinafter referred to as "the impugned cheques" as much for the sake of brevity as to obviate prolixity). Reportedly, upon expiry of period agreed for repayment, the Complainant deposited the impugned cheque with Canara Bank, Kamla nagar branch, Delhi for encashment which were returned dishonored owing to the reason "Exceeds Arrangement" vide even dated cheque return memo dated 22.04.2002. Thereafter, the statutory demand notice dated 30.04.2002 issued to the Accused at the behest of the Complainant fell on deaf ears inasmuch as evoked neither reply nor compliance, the Complainant was thereby, constrained to institute the present complaint case.
3. The Complainant tendered his pre summoning evidence by way of affidavit (Ex.CW1/A); and relied upon documents, to wit - Copy of Form-A issued by Registrar of Firms-(Ex.CW1/A), Copy of Form-B C.C. No. 522782/16 Page 2 of 17 issued by Registrar of Firms-(Ex.CW1/B) ,Statement of Bank Account of the Complainant for the month of October 2001 (Ex.CW1/C), Statement of Bank Account of the Accused for the month of October 2001 (Ex.CW1/D),Cheque bearing No. 260217 along with Bank Returning Memo and intimation slip [Ex.CW1/E(colly)],Cheque bearing No. 776904 along with Bank Returning Memo and intimation slip [Ex.CW1/F(colly)],Legal Demand Notice (Ex.CW1/G), Postal/Delivery Receipt (Ex.CW1/H, Ex.CW1/I, Ex.CW1/J & Ex.CW1/K) & Returned envelope of legal demand notice- (Ex.CW1/L). Thereupon, the Accused was summoned vide order dated
27.O5.2002.
4. Upon appearance, notice under Section 251 of the Code of Criminal Procedure, 1973 was framed against the Accused during the course of proceeding dated 29.08.2005 to which the Accused, inter alia, pleaded not guilty on the ground that the impugned cheques were never issued to the Complainant and the same were given to another party.
5. Thereafter, vide order dated 31.01.2008 the matter was fixed for leading evidence on behalf of the Complainant and accused was granted the opportunity to cross examine the complainant and his witnesses.
6. In order to bring home the offence complained of against the Accused, the Complainant examined two (02) witnesses, namely himself qua CW1 and Sh. Ved Prakash qua CW2. The Complainant (CW1) adopted his pre-summoning evidence and was cross-examined pointedly by Ld. Counsel for the Accused. The sum and substance discernible from the testimony of CW1 may be delineated as hereafter C.C. No. 522782/16 Page 3 of 17
- During his cross examination, CW1, deposed that he had advanced a loan amount in the tune of Rs.9,50,000/-(rupees nine lacs fifty thousand only) to the Accused who had undertaken to pay him Rs.3,00,000/- in excess of the aforesaid loan amount, and had issued the impugned cheques in his favor on 20.10.2001. CW1 admitted being acquainted with one Sh.Mahender Kumar Mittal however, denied having any business dealings with him but pleaded ignorance as to the existence of any business relations between the Accused on one hand and the said Sh. Mahender Kumar Mittal on the other. CW1 denied the suggestion, that the impugned cheques were issued blank signed by the Accused to the aforesaid Sh.Mahender Kumar Mittal as security during the course of business dealings with him and the same have been misused by CW1in the instant CC.
7. CW2, on the other hand, is an official witness from Canara Bank, Kamla Nagar Branch, Delhi summoned by the Complainant to prove the Statement of Account of the Complainant (Ex.CW2/B) as well as the Accused (Ex.CW2/C) along with an attested copy of cheque bearing No.287844 dated 18.10.2001 for an amount of Rs.9,50,000/-(rupees nine lacs fifty thousand only) drawn on Canara Bank (Ex.CW2/A). CW2 denied having any personal knowledge about the instant complaint case being a formal witness.
8. Thereafter, the Accused was examined in the exercise of power under Section 313 of the Code of Criminal Procedure, 1973 on 11.11.2016 wherein, he reiterated the plea taken by him while framing of notice under Section 251 of the Code of Criminal Procedure, 1973 inasmuch as averred that he had not availed any business loan from the Complainant and had issued the impugned cheques to Mittal of Rama C.C. No. 522782/16 Page 4 of 17 Trading Company, situated in Chawri Bazar with whom he had business relations. While admitting his signatures on the impugned cheque the Accused denied having filled up the other particulars. He pleaded ignorance as to the fact of dishonor of the impugned cheque and denied having received the legal demand notice. With respect to his statement of account (Ex.CW1/4) he admitted that all entries except the entry mentioned at point "A" are correct and denied having any knowledge about the statement of account of the complainant (Ex.CW1/3). He alleged misuse of the impugned cheques inasmuch as they were issued to Rama Trading Company for the purpose of a business transaction.
9. In this backdrop, the Accused chose to lead Defence Evidence and adduced himself as the lone defence witness. He got himself examined qua DW1 and tendered his evidence by way of Affidavit dated 29.05.2019 (Ex.DW1/A). Though, to all intents and purposes, DW1 in his Affidavit under Section 315 of the Code of Criminal Procedure, 1973 has reiterated the version rendered by him when examined by this Court in the exercise of power under Section 313 of the Code of Criminal Procedure, 1973 nevertheless, aspects of his testimony as may be peculiar to Section 315 of the Code of Criminal Procedure, 1973 may be encapsulated as hereafter: DW1 has unequivocally deposed that the impugned cheques were handed over by him in blank, albeit in signed condition to one Rama Trading Company in pursuance of a business transaction as opposed to being issued to the Complainant in discharge of any liability vis-à-vis him. He alleged misuse of the impugned cheques by the complainant inasmuch as he denied having ever approached the Complainant for C.C. No. 522782/16 Page 5 of 17 availing any loan for getting his overdraft facilities increased and denied receipt of the said amount from the Complainant in pursuance of the same.
10. Whereas, the summation of his cross-examination may be encapsulated as: DW1 admitted his signatures on the impugned cheques but denied having filled the other particulars thereof, he denied having any prior acquaintance with the AR of the complainant, leave alone was engaged in business with the Complainant firm. Oddly DW1 deposed that he did not know whether the Complainant had given him Rs.9,50,000/- (rupees nine lacs fifty thousand only) and if the said amount was credited in his account on. 18.10.2001. He refuted the suggestion that he had issued the impugned cheques in favor of the Complainant in discharge of the aforesaid liability and even failed to remember whether he had received the legal demand notice dated 30.04.2002 or not despite admitting that the address mentioned in the demand notice is correct. He admitted that he has not placed on record any document to show business dealings with either Rama Trading Company or with Mr. Mittal in pursuance of which the impugned cheques were purportedly issued. He furthermore conceded that he has not filed any police complaint against the Complainant for misuse of the impugned cheques and expressed his inability to produce the Statement of his bank Account pertaining to the year 2001-2002 as the same is old. He acknowledged having entered into a compromise with the Complainant but claimed that the same was involuntary as he was defrauded by the Complainant.
11. Final arguments were advanced with equal vehemence on behalf of either party hereto. While it was contended on behalf of the C.C. No. 522782/16 Page 6 of 17 Complainant that the Accused has failed to displace the statutory presumptions envisaged under Section 118 read with Section 139 of the Negotiable Instruments Act, 1881 (as amended to-date) and therefore, liable to be convicted for the commission of offence under Section 138 of the Negotiable Instruments Act, 1881 (as amended to- date); the Accused, per contra, argued that the foregoing statutory presumptions have been cogently rebutted inasmuch as the Complainant has himself failed to establish the existence of any legally enforceable debt thereby, failed to satisfy the most essential requirements to constitute commission of an offence under section 138 of the Negotiable Instruments Act,1881.
12. In the backdrop of the foregoing factual score, this Court shall now proceed to examine the position of law governing the facts peculiar to the instant CC.
13. Law is rather trite on the subject that following ingredients must be satisfied in order to bring home the guilt of a person accused for the commission of an offence punishable under Section 138 of the Negotiable Instruments Act, 1881. This position of law has been observed by the Hon'ble Supreme Court of India in the matter of Jugesh Sehgal Vs. Shamsher Singh Gogi, (2009) 14 SCC 683:
"9. It is manifest that to constitute an offence under Section 138 of the Act, the following ingredients are required to be fulfilled:
(i) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account
(ii) The cheque should have been issued for the discharge, in whole or in part, of any debt or other liability;
(iii) that cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier;C.C. No. 522782/16 Page 7 of 17
(iv) that cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the 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 the bank;
(v) the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(vi) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice"
The abovementioned proposition of law was reiterated by the Hon'ble Supreme Court in the matter of Aparna A. Shah v M/s Sheth Developers P. Ltd & Anr. (2013)8 SCC 71
14. Admittedly, apart from disputing the liability, the Accused has objected to the very issuance of the impugned cheques in favor of the Complainant, no other ingredient enumerated hereto fore has been contested by the Accused during the course of the trial of the instant CC. Legally speaking, and taking into account the statutory presumptions leaning in favor of the Complainant and against the Accused, the onus is on the latter to rebut them, not to mention discharge the burden of proving that he is not indebted to the former in the tune of the amount entailed in the impugned cheque, or even that the impugned cheque was not issued for the purpose alleged by the Complainant in its complaint.
15. At this stage, it is deemed germane to reproduce the statutory presumptions applicable to the facts entailed in the instant CC, namely
- those envisaged under Section 20, 118 & 139 (Section 20) Inchoate stamped instruments: Where one person signs and delivers to another a paper stamped in accordance with the law relating to C.C. No. 522782/16 Page 8 of 17 negotiable instruments then in force in (India), and either wholly blank or having written thereon an incomplete negotiable instrument, he thereby gives prima facie authority to the holder thereof to make or complete, as the case may be, upon it a negotiable instrument, for any amount specified therein and not exceeding the amount covered by the stamp. The person so signing shall be liable upon such instrument, in the capacity in which he signed the same, to any holder in due course for such amount; provided that no person other than a holder in due course shall recover from the person delivering the instrument anything in excess of the amount intended by him to be paid thereunder.
(Section 118) Presumptions as to negotiable instruments:--- Until the contrary is provided, the following presumptions shall be made:-
(a) of consideration - that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration.
(b) as to date - that every negotiable instrument bearing a date was made or drawn on such date;
(c) as to time of acceptance - that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity;
(d) as to time of transfer - that every transfer of a negotiable instrument was made before its maturity.
(e) as to order of indorsements - that the indorsements appearing upon a negotiable instrument were made in the order in which they appear thereon;
(f) as to stamps - that a lost promissory note, bill of exchange or cheque was duly stamped;
(g) that holder is a holder in due course - that the holder of a C.C. No. 522782/16 Page 9 of 17 negotiable instrument is a holder in due course;
Provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him.
(Section 139) Presumption in favour of holder - It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.
Applying the foregoing legal exposition to the facts of the instant case, this Court shall now proceed to examine the competing pleas raised by the parties hereto.
16. The first and foremost plea raised by the Accused in his defense is that the impugned cheque stood invalidated and rendered unenforceable in law by dint of the assertion that the particulars thereof, such as the name of the payee, amount (in words and figures) etc. have not been filled either by him or in his hand; and the fact that he doesn't dispute his signature doesn't compensate for the aforesaid deficiencies amounting to misuse. This Court is, however, of the considered opinion that the plea of the Accused alleging misuse of the impugned cheques and consequent invalidation, or relegated to being non est in law, does not hold water as much by virtue of the provisions of Section 20 of the Negotiable Instruments Act, 1881 as in C.C. No. 522782/16 Page 10 of 17 consonance with the ratio of the judgment rendered by the Hon'ble Apex court in the case titled as 'Bir Singh v. Mukesh Kumar', reported as (2019) 4 SCC 197. The apposite excerpt is reproduced hereafter and reads as under -
"If a signed blank cheque is voluntarily handed over 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 be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence. 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". The plea is accordingly rejected.
17. The second plea raised by the Accused is regarding the non- receipt of the legal demand notice on the strength of which the Ld. Counsel of the Accused has argued that the complaint deserves to be dismissed. Perusal of the record reveals that the delivery report of the legal Demand notice shows that the same has been returned unclaimed, however, it is nobody's case that the Accused tendered the amounts entailed in the impugned cheque upon entering appearance before this Court in response to summons issued in the instant CC. At this stage, the observations passed by the Hon'ble Supreme Court of India in the celebrated case titled as 'C.C Alavi Haji v. Palalpetty Muhammed & Anr.', reported as (2007) 6 SCC 555 spring to mind which reads as under:
"It is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of Criminal Law, where there is no stipulation of giving of a notice before filing a complaint. 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 C.C. No. 522782/16 Page 11 of 17 the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the Court along with the copy of the 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 the G.C. Act and Section 114 of the Evidence Act. In our view, any other interpretation of the proviso would defeat the very object of the legislation."
In light of the abovementioned circumstances coupled with the fact that the address on which the legal demand notice was sent is admittedly the correct address of the accused, the plea with respect to the non-receipt of the legal demand notice is also rejected as being frivolous and legally inconsequential.
18. The third plea of the Accused is that he is not indebted to the Complainant in the tune of the amount entailed in the impugned cheques inasmuch as they were not issued for discharge of any legally enforceable debt/liability incurred vis-à-vis the Complainant and since, the Accused is not even acquainted with the Complainant, not to mention had no business dealings with him in the past, the question of availing loan alleged by the Complainant for increase in overdraft facility, neither appeals logic nor has been proved on record, Per contra, the Complainant has placed reliance upon the statement of its bank account as well as that of the bank account of the Accused (Ex.CW1/4) pertaining to the relevant period and invited the attention of this Court to the corresponding entries dated 18.10.2001 in order to C.C. No. 522782/16 Page 12 of 17 establish that while a sum of Rs.9,50,000/-/-(rupees nine lacs fifty thousand only) had been withdrawn from its bank account, a commensurate amount is also shown to have been deposited vide entry at point "A" in the account of the Accused, which a fact beyond reasonable doubt, brings home that the aforesaid amount changed hands in accordance with the transaction as alleged by the Complainant in its Complaint.
19. Perusal of the record also manifests that the Accused has contested aforesaid entries mentioned at point 'A' in spite of admitting his statement of bank account (Ex.CW1/4) though, no explanation whatsoever, not even namesake has been furnished by him to disprove e the said entries notwithstanding ample opportunities being available to cross examine CW2 on the said aspect. Having said that the burden of disproving the entries at point 'A' (supra) was upon the Accused ; failure to displace the aforesaid presumption only goes to prove that ipse dixit claim of the Accused regarding the entry being incorrect is as much disingenuous and flimsy as an afterthought to deny the obvious. The plea is accordingly rejected.
20. In this context, it is deemed pertinent to recount the provisions of Sections 102, 103 and 114 of the Indian Evidence Act, 1872 which reads as infra:
"102. On whom burden of proof lies The burden of proof in a suit or proceeding lies on that person who would fail if no evidence at all were given on either side.
103. Burden of proof as to particular fact The burden of proof as to any particular fact lies on that person who wishes the Court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person.C.C. No. 522782/16 Page 13 of 17
114. Court may presume existence of certain acts The court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business, in their relation to the facts of the particular case.
Illustrations The Court may presume--
(g) That evidence which could be and is not produced would, if produced, be unfavorable to the person withholds it."
21. The fourth and last plea raised by the Accused is that the impugned cheques were not issued by him in favour of the Complainant in discharge of any liability and the same were handed over by him to one Sh. Mahender Kumar Mittal of Rama Trading Company with whom he had business dealings, in pursuance of some business transaction. Law is rather trite on the subject that, once it is established that the cheques were drawn on the account maintained by the Accused, either in his personal capacity or in the name of the firm, and they bear his signatures, the burden is on the Accused to explain how the impugned cheques came into the possession of the Complainant. It has been asserted by the Accused that he had issued the cheques in blank signed condition to Rama Trading Company and the same have been misused by the Complainant, however, no evidence has been adduced to corroborate the said fact, no document has been placed on record by the Accused to show his dealings with the Rama Trading company and even the said Sh. Mahender Kumar Mittal was not examined as a witness despite his appearance in court on 04.01.2017. In the absence of any independent evidence to the contrary, notwithstanding the plea raised by the Accused to the effect that he did not know the Complainant, or entered into any business C.C. No. 522782/16 Page 14 of 17 transaction with him, are all deemed concocted, imaginary, and tenuous in the eyes of law, more so considering that there is nothing on record to even remotely suggest that the Accused ever demanded the return of the cheques from Sh. Mahender Kumar Mittal . Moreover, considering that the Accused neither confronted Sh.Mahender Kumar Mittal nor filed any complaint against him, hitherto only reinforces that his defence is no more than a cock and bull story, since far from being credible, and therefore, fails the inspire confidence of this court.
22. In this context, it is profitable to refer to the following reproduced excerpts entailed in the judgment rendered by the Hon'ble Supreme Court of India in the matter of 'M/s Kumar Exports vs M/s Sharma Carpets' reported as (2009) 2 SCC 513, which expounds the position of law on the subject and reads as:
"... ... ... The accused in a trial under Section 138 of the Act has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case the non-existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove 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 C.C. No. 522782/16 Page 15 of 17 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. ... ... ..."
23. All in all, the collective import of the forgoing exposition lends an irresistible inference that the entire defense of the Accused is disingenuous and feigned, not to mention incredulous. Therefore, this Court has no hesitation in holding that the Accused has miserably failed to displace the statutory presumptions envisaged in the Negotiable Instruments Act, 1881 (as amended to date) leaning in favor of the Complainant in accordance with law, that is to say, on the touchstone of preponderance of probabilities, and therefore, the Complainant is entitled to derive the benefit of the same inasmuch has proved his version in the light of the dicta rendered by the Hon'ble Supreme Court of India in the matter of 'Laxmi Dyechem v. State of Gujarat' reported as (2012) 13 SCC 375 wherein, it has been held as infra:
"... Therefore, if the accused is able to establish a probable defence which creates doubt about the existence of a legally enforceable debt or liability, the prosecution can fail. The accused can rely on the materials submitted by the complainant in order to raise such a defence and it is inconceivable that in some cases the accused may not need to adduce the evidence of his/her own. If however, the accused/drawer of a cheque in question neither raises a probable defence nor able to contest existence of a legally enforceable debt or liability, obviously statutory presumption under Section 139 of the NI Act C.C. No. 522782/16 Page 16 of 17 regarding commission of the offence comes into play if the same is not rebutted with regard to the materials submitted by the complainant...."
24. Upon due circumspection of the totality of foregoing facts and circumstances, including but not limited to scrutiny of material available on record in the adumbral of the legal position governing the field, this Court is of the considered opinion that the Accused has not been able to sufficiently rebut as much the statutory presumptions leaning against him as the version put forth by the Complainant vide his complaint. This Court hereby, convicts the Accused for the commission of offence under Section 138 of the Negotiable Instruments Act, 1881 complained of by the Complainant in the instant CC. Digitally signed by AKRITI AKRITI MAHENDRU MAHENDRU Date: 2019.12.24 17:31:25 +0530 Announced in the open (AKRITI MAHENDRU) Court on 23.12.2019 MM04 (NI Act) Central, THC, Delhi.
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