Delhi District Court
Deutsche Bank Ag vs . Abhishek Chuhan on 25 February, 2012
1
IN THE COURT OF SHRI KISHOR KUMAR, METROPOLITAN
MAGISTRATE, DWARKA COURTS, NEW DELHI
In Re: C.C No. 287/11
U/s 138/142 Negotiable Instrument Act.
1. C.C No. : 287/11
2. Date of Institution : 04.03.2011
3. Name of the complainant : Deutsche Bank AG,
Nicholas Pramal Towers
Peninsular Corporate
Plaza, Ganpatrao Kadam
Marg,LowerParelMumbai,
Branch Office: 28 ECE
House, K.G Marg,
Connaught Place, New
Delhi.
4. Name of the accused
his parentage and residence: Abhishek Chuhan, Ba143
B , First Floor, Janak Puri,
New Delhi.
CC No. 287/11
Deutsche Bank AG Vs. Abhishek Chuhan
2
5. Date when judgement : Not reserved.
was reserved
6. Date when Judgment : 25.02.2012
was pronounced
7. Offence Complained of : U/s 138 N.I.Act.
8. Plea of accused : He pleaded not guilty
& claimed trial.
9. Final Judgment : Convicted.
JUDGEMENT
1. It is alleged by the complainant that accused in discharge of his liability towards the complainant bank had issued three cheques which on their presentation with the banker of the accused stood dishonored for the reasons "Payment stopped by the drawer". Hence the present complaint U/s 138 read with section 141 and 142 of the Negotiable Instrument Act (herein after be referred to as Act).
CC No. 287/11 Deutsche Bank AG Vs. Abhishek Chuhan 3
2. Briefly stated, the complainant is a banking company registered under the Federal Republic of Germany, working in India by the permission of Reserve Bank of India. Sh.Praveen Dutt Sharma is an authorized representative of the complainant company vide power of attorney dated 13.8.10. It is further alleged by the complainant company that accused had approached it for availing loan facility. On the request of the accused, a loan facility of Rs.7,50,000/ vide personal loan account number 200004378330019 was sanctioned and loan disbursed on 19.3.08. The accused in partial discharged of his liability, issued three cheques bearing NO.748692, 748693, 748696 , all dated 5.1.11, each amounting to Rs.18,640/, all drawn on ICICI Bank Ltd. 54, B block Community Center, Janak Puri. New Delhi. All these three cheques on their presentation were dishonored for the reasons "payment stopped by drawer" vide cheque return memo dated 6.1.111. Thereafter, the complainant company issued legal demand notice dated 17.1.11, sent on 22.1.11 by speed post demanding the amount of the dishonored cheques. The accused however, failed to make the payment of the dishonored cheques. CC No. 287/11 Deutsche Bank AG Vs. Abhishek Chuhan 4 Resultantly, the present complaint.
3. Finding prima facie case against the accused for the offence punishable u/s 138 of NI Act on the basis of the evidence , the documents and other material on record, the accused was summoned. He appeared in execution of bailable warrants.
4. The complainant company has proved on record the power of attorney in favour of Sh. Praveen Dutt Sharma as Ex.CW1/A, three dishonored cheques as Ex.CW1/B, CW1/B1 and CW1/B2. The cheque return memos are Ex.CW1/C,CW1/C1 and Ex.CW1/C2. The legal demand notice dated 17.1.11 is Ex.CW1/D. The postal receipt is Ex.CW1/E, the internet generated speed net movement is Ex.CW1/E1. The AR for the complainant tendered his evidence by way of affidavit Ex.CW1/1 bearing his signatures at Point A and B. The complaint is also marked as Ex.CW1/F bearing signatures of AR for the complainant at point A. CC No. 287/11 Deutsche Bank AG Vs. Abhishek Chuhan 5
5. Since the accused chosen to contest the present case , notice u/s 251 Cr.P.C was framed against the accused for the offence punishable u/s 138 of the Act wherein the accused averred that the cheques in question were issued as security at the time of sanctioning of loan. Further averring that he did not receive any legal notice dated 17.1.11.
6. Accused's application u/s 145 (2) of the N I Act was allowed and accused was afforded an opportunity to cross examine CW1 AR for the complainant. Ld. counsel for the accused subjected CW1 to cross examination. CW1 denied of not sending legal demand notice dated 17.1.11 Ex.CW1/D on 22.1.11. Ld. Counsel for the accused through the cross examination of CW1 wanted to prove that on 22.1.11, instead of legal demand notice Ex.CW1/D, the settlement letter was sent to the accused, however, the AR for the complainant did not go with Ld. counsel for the accused. Rest of the cross examination of CW1 is general on the aspect that cheques in question were given as security.
CC No. 287/11 Deutsche Bank AG Vs. Abhishek Chuhan 6
7. Consequent to closing of complainant evidence, statement of accused u/s 313 Cr.P.C was recorded. In this piece of proceedings u/s 313 Cr.P.C, the accused stated that he had taken loan of Rs.7,50,000/ and issued 14 blank cheques as security on 14.3.08. The accused again denied of receipt of any notice from the complainant, instead, it is submitted by the accused that he received a letter of settlement on 25.1.11. Accused wished to lead defence evidence. In defence he has examined himself as his own witness u/s 315 Cr.P.C.
8. In examinationinchief, the accused as DW1 deposed on oath that on 17.1.11, he received offer of settlement letter from the complainant bank. The letter of settlement has been brought on record by the accused as mark D1 and its envelop as mark D2.
9. The accused has been cross examined by Ld.counsel for the complainant. In whole set of cross examination, the accused remained stuck to his defence that he had received mark D1 contained in mark D2 from the office of counsel for the CC No. 287/11 Deutsche Bank AG Vs. Abhishek Chuhan 7 complainant. He further deposed on the same lines that he issued the cheques in question as security cheque though admitting the fact that he had taken loan from the complainant bank. The accused has further admitted in his cross examination as DW1 under section 315 Cr.P.C on oath that his address mentioned on memo of parties, legal demand notice Ex.CW1/D is the same . Ld.counsel for the complainant during cross examination of DW1 has brought on record the loan agreement between the parties as Ex. DX1 to which the accused deposed of signing in blank condition.
10. I have heard Ld.counsel for the complainant, Ld.counsel for the accused and have carefully gone through the record.
11. It is argued by Ld.counsel for the complainant that accused with a view to avoid his liability/debt towards the complainant bank has gone to the extent of even forging the document in the shape of mark D1. The accused had given the cheques in question in discharge of his debt/liability and the said fact is CC No. 287/11 Deutsche Bank AG Vs. Abhishek Chuhan 8 reaffirmed from Ex.DX1, last page wherein cheque details from cheque No.74869 to 74878700 is mentioned along with the fact "Please do not hand over blank cheques" and "I have read and agreed to the above terms and conditions. I also confirm that I have not signed a blank cheque." It is further argued by Ld. counsel for the complainant that accused had very much received the legal notice Ex.CW1/D as the accused is residing at the same address mentioned in the complaint as well as in the notice Ex.CW1/D. In view of the evidence, documents and other material available on record, according to Ld. counsel for the complainant, the offence u/s 138 of NI Act stands proved against the accused. It is argued by Ld. counsel for the complainant that admittedly the accused had taken loan of Rs.7,50,000/. The accused had paid only 15 installments (Each installment amounting to Rs.18,640/). Therefore, the accused had paid only Rs.2,79,600/. As on the date of legal demand notice Ex.CW1/D dated 17.1.11, an outstanding amount of Rs.7,57,895/ was staggering, then how come the complainant bank would have sent the alleged offer for settlement mark D1 for a mere sum of Rs. CC No. 287/11 Deutsche Bank AG Vs. Abhishek Chuhan 9 55,920/. It is further argued by Ld.counsel for the complainant that even a budding lawyer would not use the term "Security cheques" in the legal demand notice or offer for settlement for that matter as mentioned in mark D1. In nutshell, it is vociferously argued by Ld. counsel for the complainant that accused has forged mark D1 as also forged the signatures of complainant counsel Ms. Worthing Kasar. In this regard, Ld. Counsel for the complainant Ms. Worthing Kasar had given her separate statement at Bar that accused has forged Ex.D1. Conviction of the accused, appropriate compensation u/s 357 Cr.P.C, is at last argued by Ld.counsel for the complainant. Ld. Counsel for the complainant has relied upon 1999 (2002) DLT 244 (DB), 172 (2010) DLT 561 (2007) 6 Supreme court cases 555, 2010 VII AD (Delhi) 705,154 (2008) DLT 579, IV (1993) CCR 433 (SC) and (2001)3 SCC 726.
12. Per contra , it is argued by Ld. counsel for the accused that the complainant has not been able to prove its case against the accused. No legal demand notice as mandated u/s 138 (b) of the CC No. 287/11 Deutsche Bank AG Vs. Abhishek Chuhan 10 Act was ever served upon the accused. Therefore, the ingredients of section 138 of NI Act not having been fulfilled, accused has not committed any offence. It was only the letter of settlement Ex.D1 which was received by the accused. The cheques in question were given as security and at that point of time, there was no liability upon the accused towards the complainant bank. Ld. counsel for the accused has relied upon M.D. Thomas vs. P.S. Jaleel and Anr. arising out of SLP (Crl.) NO.7828/2007, Rama Krishna Urban Cooperative Credit Society Ltd. vs. Sh. Rajendra Bhagchand Warma Criminal application No.898/2009 before the High Court of Judicature Bombay Bench at Ouranga Bad, 2007 (3) Krl.L.J 122 Vishnu Dass Vs. Mr.Vijaya Mahantesh, (2007) 146 PLR 47 Exports India and Anr. Vs State and another, 1999 (1) CTC 6, Kamala S Vs. Vidhyadharan , Appeal (Crl.) No.233/07, Ms. Narayana Menon @ Mani Vs. State of Kerala and another appeal (Crl.) 1012/99. Apart from oral arguments Ld.counsel for the accused has also filed written arguments which are also part of the record and I too have gone CC No. 287/11 Deutsche Bank AG Vs. Abhishek Chuhan 11 through the same. It is further argued by Ld. Counsel for the accused that since the cheques were given as security in blank though signed in 2008, the complaint filed in 2011, is not maintainable in view of Section 138 (a) of the Act. Dismissal of the complaint, and acquittal of the accused is prayed for by Ld. Counsel for the accused.
13. During the proceedings of the present case Ld.counsel for the complainant had moved an application u/s 340 Cr.P.C for punishing the accused for the offence u/s 193 r.w. Section 465 IPC, submitting that during the course of evidence on 19.11.11, the accused on solemn affirmation deposed that he had received a letter dated 17.1.11 from the complainant. The said letter dated 17.1.11 along with envelop was marked as D1 and D2. The said letter dated 17.1.11 had the subject " offer for settlement" on the letter head of the office of counsel for the complainant and signed by Ms. Worthing Kasar, advocate by taking the base of the notice dated 17.1.11 u/s 138 NI Act issued to him. It has been further submitted by the complainant that the said letter was never issued CC No. 287/11 Deutsche Bank AG Vs. Abhishek Chuhan 12 to the accused and from the Bare perusal of aforesaid letter it is apparent that it has been fabricated by the accused by forging the signatures of Ms. Worthing Kasar, counsel for the complainant. The accused who was legally bound by an oath and by an express provision of law to state the truth, has given false evidence by prima facie manufacturing and fabricating the said letter dated 17.1.11 mark D1. The accused has intentionally given false evidence and submitted a forged and fabricated document knowing it to be the same.
14. Accused has filed reply to the application u/s 340 Cr.P.C denying the allegations of the complainant submitting that he had received only the offer letter for settlement received on 25.1.11 vide speed post bearing No.SPED189892026IN. The application u/s 340 Cr.P.C is not maintainable, deserves to be dismissed.
15. Complainant has also filed rejoinder to the reply of the accused to the application u/s 340 Cr.P.C reaffirming and reiterating the stand taken in the application u/s 340 Cr.P.C CC No. 287/11 Deutsche Bank AG Vs. Abhishek Chuhan 13 praying for allowing of the same.
16. Arguments on application u/s 340 Cr.P.C have also been addressed and heard. Vide the present judgment, this application shall also be decided.
17. Main plank of argument of Ld.counsel for the accused is that accused did not receive any legal notice and whatever,accused received, it was only offer letter of settlement dated 17.01.11 mark D1, received, contained in envelop mark D2. This stand of accused has been very vehemently opposed by Ld. counsel for the complaint on the ground that they (complainant counsel) never issued mark D1, the same has been forged and fabricated by the accused to avoid his liability towards the complainant.
18. Admittedly, the accused took loan of Rs.7,50,000/ from the complainant bank disbursed in March, 2008 . The loan was to be repaid in 60 monthly installment of Rs.18,640/ per month. Complainant has filed on record the statement of account CC No. 287/11 Deutsche Bank AG Vs. Abhishek Chuhan 14 pertaining to the accused. The statement of account has not been controverted by the accused. According to the statement of account, the accused had till January, 2011 paid only 15 EMIs of Rs.18,640/, which comes to Rs.279600/ Even if one goes by simple calculation, the liability of the accused as in the month of January, 2011, come to around Rs.470400/ (without any interest). Even, if for the sake of arguments, it is presumed that letter of settlement was issued, it cannot be merely for total sum of Rs. 55000/, whereas, the total liability is around Rs.470400/ and more. Surprisingly, the accused neither in notice u/s 251 Cr.P.C nor in his application u/s 145(2) of the Act, whispered of having received the letter of settlement mark D1. This defence has suddenly come up to see the light of the day only at the time of cross examination of CW1.
19. Admittedly, the legal notice Ex.CW1/D as also the mark D1, has been delivered contained in envelop mark D2. The speed post ED No.189892026IN is same for both the documents i.e Ex.CW1/D and mark D1. Ld. Counsel for the complainant Ms. CC No. 287/11 Deutsche Bank AG Vs. Abhishek Chuhan 15 Worthing Kasar has stated at Bar vide her statement dated 23.02.2012 that Ex. D1 has not been issued by her office under her signatures. The accused has fabricated Ex. D1. The contents of Ex. D1 have also been denied by Ld. Counsel for the complainant.
20. The case was put for clarifications on 23.02.2012. Ld. Counsel for the complainant Ms. Worthing Kasar had given her statement at Bar that Ex. D1 has not been issued by her office under her signatures. The accused has fabricated the same. Contents of Ex. D1 have also been denied by Ld. Counsel for the complainant.
21. The accused has not controverted or denied his signatures on the loan agreement. The loan agreement in this case has been proved as Ex. DX1. It is also not the case of the accused that he had been made to sign on the loan agreement under duress or coercion or under pressure. The contention of the accused that he gave the present cheque as security is belied in the light of the last page of Ex. DX1 where it is very clearly written that "please do not hand over blank cheques". Below this line details of the CC No. 287/11 Deutsche Bank AG Vs. Abhishek Chuhan 16 cheque given by the accused is mentioned. These are seven cheques bearing no. 748692 to 78700. Just below this tabulation the following line is written "I have read and agreed to the terms and conditions. I also confirm that I have not singed blank document".
22. Our own Hon'ble High Court of Delhi in 2010 VII AD (Delhi) 705 had held "the only issue which this petition raises is whether the cheques issued at the time of signing the contract, as a condition of contract, can be said to be against a liability or they are the cheques issued for no liability. The liability as per dictionary meaning is the state of being liable i.e., for which one is responsible or liable or has obligated. Liability of legal debt which two different terms. Legal debt is one which recoverable on time. A debt is liability owning from one person to another person, however a liability may be incurred without a debt being in existence. It is not necessary that while incurring debt should already be there. A liability can be incurred without debt being there. A cheque can be issued against liability also. This liability CC No. 287/11 Deutsche Bank AG Vs. Abhishek Chuhan 17 may be in respect of contract which is entered into by the person.
23. In the present case as per Ex. DX1 which is contract having entered between the accused and the complainant bank, in pursuant therewhich the accused had given the present cheques in question in favour of the complainant bank. As per the ratio of the above case of Hon'ble High Court of Delhi it stands established on record that accused had issued the cheques Ex. CW1/B, Ex. CW1/B1 and Ex. CW1/B2 in discharge his debt/liability towards the complainant bank.
24. The Hon'ble High Court of Delhi in 154 (2008) DLT 579 Mojj Engineering System Ltd & Ors. Vs. A V Sugars Ltd. had held that "the tendering of the cheque was a condition precedent for execution of the contract even according to the petitioner themselves, this cheque constituted part of promise by the petitioner to the complainant". The complainant was entitled to encash the cheque in case complainant failed to receive the goods and equipment envisaged and otherwise. Looking to these facts, CC No. 287/11 Deutsche Bank AG Vs. Abhishek Chuhan 18 it is clear that when the cheque made out and handed over to the complainant it was admittedly against a valid consideration. Whatever may have been the status of the cheque thereafter is for the petitioner to prove in their defence.
25. Here in the present case except the bald denial of the accused stating that he had given cheques in question as security in favour of the complainant bank, nothing else has been brought and proved on record by the accused.
26. Ld. Counsel for the accused had contended that if we go by case of complainant itself that the cheque in question were given to the complainant bank in 2008 and this case having being preferred by complainant bank in the year 2011 i.e almost more than three years, the cheques having being presented on 06.01.2011, therefore in view of proviso (a) to section 138 of the Negotiable Instrument Act complaint is not maintainable as the cheques have been presented beyond period of six months from the date it were drawn.
CC No. 287/11 Deutsche Bank AG Vs. Abhishek Chuhan 19
27. For the shake of reference section 138 of Negotiable Instrument is reproduced here under :
138. Dishonour of cheque for insufficiency etc. of funds in the account "Where any cheque drawn by a person on an account maintained by him with a banker for payment of 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 many standing to the credit of that account is insufficient to dishonour 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 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 may extend to twice the amount of the cheque or with both".
CC No. 287/11 Deutsche Bank AG Vs. Abhishek Chuhan 20
28. A cheque u/s 6 of the Act means a bill of exchange which is drawn on a banker and is not expressed to be payable otherwise than on demand. Thus a bill of exchange acquires the status of a cheque when it is payable on demand. For example, a 'post dated cheque' when it is drawn is only bill of exchange and is not payable till the date which is specified on it. The Hon'ble Supreme Court in Anil Kumar Sawhney Vs. Gulshan Rai IV (1993) CCR 433 (SC) =(1993) 4 SCC 424, while deciding the question of the date from which the period of six months contemplated under Section 138 (a) of the act is to be reckoned in case of a post dated cheque, held as follows: An offence to be made out under the substantive provisions of Section 138 of the Act, it is mandatory that cheque is 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. It is the cheque drawn which has to be presented to the bank within the period specified therein. When a post dated cheque is written or drawn it is only bill of exchange and as such the provisions of Section 138 CC No. 287/11 Deutsche Bank AG Vs. Abhishek Chuhan 21
(a) are not applicable to the said instrument. The post dated cheque becomes a cheque under the Act on the date which is written on the said cheque and the six moths period has to be reckoned for the purpose of Section 138 (a) from the said date. One of the main ingredients of the offence under Section 138 of the Act is, return of the cheque by the bank unpaid. Till the time the cheque is returned by the bank unpaid. Till the time the cheque is returned by the bank unpaid,no offence under Section 138 is made out. A post dated cheque cannot be presented before the bank ans as such the question of its return would not arise. It is only when the post dated cheque becomes a 'cheque', with effect from the date shown on the face of the said cheque, the provisions of Section 138 come into play. The net result is that a post dated cheque remains a bill of exchange till the date written on it. With effect from the date shown on the face of the said cheque it becomes a 'cheque' under the Act and the provisions of Section 138 (a) would squarely be attracted. In the present case of the post date cheques were drawn in March, 1990 but they became 'cheques' in the year 1991 on the dates shown therein. The period CC No. 287/11 Deutsche Bank AG Vs. Abhishek Chuhan 22 of six months, therefore, has to be reckoned from the dates mentioned on the face of the cheques."
29. In N. Sivalingam V. A.V. Chandraiyar, (1996) 86 Comp.
Cas. 167, it was held that a post dated cheque is deemed to be drawn on the date it bears and the six months period for the purpose of Section 138 is to be reckoned from that date.
30. Similarly, in Salar Solvent Extractions Ltd. V. South India Viscose Ltd. (1994) 3 Crimes 295 (Mad), it has been held that only the dates which the cheques bear are relevant dates and on those dates they would assume the character of cheque. On a parity of reasoning, in the case at hand, the instrument in question became a cheque only on the date written thereon, i.e.28.01.2008, and the period of six months mentioned in Section 138 has to be reckoned from that date. In that view of the matter, the impugned complaint is within time. Even otherwise, prima facie, it was the petitioners who had handed over the undated cheque for a certain amount to the respondent in terms of a contract between the CC No. 287/11 Deutsche Bank AG Vs. Abhishek Chuhan 23 parties. Same an undated cheque cannot be encashed, it can only mean that the petitioners had authorized the complainant to enter an appropriate date onit. In Young V.Grote, (1827) 4 Bing.253, it was held that when a blank cheque is signed and handed over, it means the person signing it has given an implied authority to any subsequent holder to fill it up.
31. Similarly, in Scholfield Vs. Lord Londesborough , (18951899) All ER Rep 282, it was held that whoever signs a cheque or accepts a bill in blank, and then puts it into circulation, must necessarily intend that either the person to whom he gives it, or some future holder, shall fill up the blank which he has left. This common law doctrine was also affirmed by Justice Macnaghten in Griffiths Vs. Dalton, (1940) 2 KB 264, where it was held that the drawer of an undated cheque gives a prima facie authority to fill in the date. This aspect has also been incorporated in Section 20 of the Negotiable Instrument Act, which deals with Inchoate Stamped Instruments.
CC No. 287/11 Deutsche Bank AG Vs. Abhishek Chuhan 24
32. The Supreme Court in T. Nagappa Vs. Y. R. Murlidhar, IV (2008) SLT 694 = II (2008) CCR 398 (SC) = III (2008) DLT (Crl.) 19 (SC) = (2008) 5 SCC 633, while discussing the scope of Section 20 held that by reason of this provision, a right has been created in the holder of the cheque. Prima facie, the holder thereof is authorized to complete the incomplete negotiable instrument.
33. The Supreme Court in 2001 (3) SCC 726 Ashok Yeshwant Badave Vs. Surendra Madhav Rao Nighojakar and Another had held that for prosecuting a person for an offence under Section 138 of the Negotiable Instrument Act it is inevitable that the cheque is presented to the banker within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier. When a post dated cheque is written or drawn, it is only a bill of exchange and so long the same remains a bill of exchange, the provisions of Section 138 are not applicable to the said instrument. The post dated cheque becomes a cheque within the meaning of Section 138 of the Act on the date which is drawn thereon and the 6 months period has to be CC No. 287/11 Deutsche Bank AG Vs. Abhishek Chuhan 25 reckoned for the purposes of proviso (a) to Section 138 of the Act from the said date.
34. It is very vociferously argued by Ld. Counsel for the accused that accused had not been served with any legal notice in terms of Section 138 of the NI Act. Hence, the present complaint is not maintainable. However, I do not feel convinced by arguments of Ld. Counsel for the accused.
35. The Hon'ble Supreme in (2007) VI SCC 55 had held that in our opinion therefore, when the notice is sent by registered post by correctly addressing the drawer of the cheque, the mandatory requirement of issue of notice in terms of Clause (b) of proviso to Section 138 of the Act stands complied with. It is needless to emphasise that the complaint must contain basic facts regarding the mode and manner of the issuance of notice to the drawer of the chque. It is well settled that at the time of taking cognizance of the complaint under section 138 of the Act, the court is required to be prima facie satisfied that a case under the said section is made out CC No. 287/11 Deutsche Bank AG Vs. Abhishek Chuhan 26 and the afore noted mandatory statutory procedural requirement have been complied with".
36. Hon'ble Supreme Court in this judgment (2007) VI SCC 55 had gone to the extent of holding that "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 the complaint under section 138 of the Act, make payment of the cheque amount and submit to the court that he had made 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 CC No. 287/11 Deutsche Bank AG Vs. Abhishek Chuhan 27 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 GC 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. As observed in Bhaskaran case if the "giving of notice" in the context of Clause (b) of the proviso was the same as the "receipt of notice" a trickster cheque drawer would get the premium to avoid receiving the notice by adopting different strategies and escape from legal consequences of Section 138 of the Act.
37. The accused in this case had appeared only in execution of BWs. In view of the above referred judgment of Hon'ble Supreme Court, the accused never showed willingness to make the payment of cheque in question, irrespective of receipt of legal demand notice Ex. CW1/D. The accused has filed on record mark D1 submitting that he did not receive any legal demand notice. CC No. 287/11 Deutsche Bank AG Vs. Abhishek Chuhan 28
38. Ld. Counsel for the accused has further taken defence that cheques in question were given by the accused as security in blank but signed by the accused. To deal with the submission of Ld. Counsel for the accused, reference has to be made to section 139 of NI Act which is reproduced as under:
139. Presumption in favour of holderIt 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".
39. A bare perusal of the above provision u/s 139 of NI Act lays down that it is the accused who has to rebut the presumption that he had not issued the cheque in question in discharge of any debt/liability. CC No. 287/11 Deutsche Bank AG Vs. Abhishek Chuhan 29
40. The Negotiable Instrument Act 1881 was passed with a view to streamline the banking business through negotiable instruments. Sometime it is seen that certain miscreants to cheat or deceit, issue instruments to gain and to cause losses to the genuine person and thus dishonor of cheque made an offence. At the same time, the legislature made the offence compoundable. The N.I Act being a special statute, the offence primarily based on documents, where the defaulting party would like to avoid his liability towards the bank/complainant, hence, the legislature in its wisdom had incorporated certain presumptions in favour of holder in due course of the cheque. The relevant provisions are section 118 (a) and 139 of the Act which reads as under:
118. Presumptions as to negotiable instrumentsUntil the contrary is proved, the following presumptions shall be made:
(a) of consideration ; that every negotiable instrument was made or drawn for consideration, and that every CC No. 287/11 Deutsche Bank AG Vs. Abhishek Chuhan 30 such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration."
41. Presumptions both under Sections 118(a) and 139 of the Act are rebuttable in nature.
What would be the effect of the expressions "May Presume", 'Shall Presume" and 'Conclusive Proof has been considered by this Court in Union of India (UOI) v. Pramod Gupta (D) by L.Rs and Ors., (2005) 12 SCC in the following terms:
"It is true that the legislature used two different phraseologies "shall be presumed" and "may be presumed" in Section 42 of the Punjab Land Revenue Act and furthermore although provided for the mode and manner of rebuttal of such presumption as regards the right to mines and minerals said to be vested in the Government visvis the absence thereof in relation to the lands presumed CC No. 287/11 Deutsche Bank AG Vs. Abhishek Chuhan 31 to be retained by the landowners but the same would not mean that the words "shall presume" would be conclusive. The meaning of the expressions "may presume" and "shall presume" have been explained in Section 4 of the Evidence Act,1872, from a perusal whereof it would be evident that whenever it is directed that the court shall presume a fact it shall regard such fact as proved unless disproved. In terms of the said provision, thus, the expression "shall presume"
cannot be held to be synonymous with "conclusive proof".
In terms of Section 4 of the Evidence Act whenever it is provided by the Act that the Court shall presume a fact, it shall regard such fact as proved unless and until it is disproved. The words 'proved' and 'disproved' have been defined in Section 3 of the Evidence Act (the interpretation clause) to mean: Proved A fact is said to be proved when , after considering the matters before it, the Court either believes it to CC No. 287/11 Deutsche Bank AG Vs. Abhishek Chuhan 32 exist, or considers its existence so probable that a prudent man ought , under the circumstances of the particular case, to act upon the supposition that it does not exist."
42. Applying the said definitions of 'proved' or 'disproved' to principle behind Section 118(a) of the Act, the Court shall presume a negotiable instrument to be for consideration unless and until after considering the matter before it, it either believes that the consideration does not exist or considers the nonexistence of the consideration so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that the consideration does not exist . For rebutting such presumption, what is needed is to raise a probable defence. Even for the said purpose, the evidence adduced on behalf of the complainant could be relied upon.
43. In the present case, from the perusal of the deposition of DW1 (accused) on oath, his examination u/s 313 Cr.P.C, his defence disclosed to the notice u/s 251 Cr.P.C, the accused has not CC No. 287/11 Deutsche Bank AG Vs. Abhishek Chuhan 33 been able to put a probable defence. In other words the accused has not been able to rebut the presumption as raised against him u/s 118 (a) and 139 of the Act. The defence of the accused is not consistent and probable.
44. A cursor look of the above provision mandates that under section 139 of N.I Act a presumption is drawn against the drawer and in favour of the holder that unless the contrary is proved that the holder of a cheque received the cheque for the discharge, in whole, or in part , of any debt or any other liability.
Here, I, refer to the decision of the Hon'ble Apex Court in K.Bhaskaran V. Sankaran Vaidhyan Balan and Ors. AIR 1999, Supreme Court, 3762 where almost a similar observation was held that the complainant has discharged his initial burden the onus shifted on the accused to produce rebuttal evidence against the presumption laid down in favour of the complainant.
45. Here the accused has not produced any evidence to discard the testimony of CW1. Therefore, the presumption is to be drawn CC No. 287/11 Deutsche Bank AG Vs. Abhishek Chuhan 34 in favour of holder of the cheque who has received it for discharge of liability. Again in view of the decision of the Supreme Court in case of Adalat Prasad Vs. Roop Lal Jindal and Ors., once the cheque has been issued and the same has been presented and upon its dishonor , the procedure prescribed for issuance of the notice had been followed, the presumption u/s 139 NI Act arises immediately.
46. In AIR 2001 Supreme Court 2895 K.N Beena Vs. Muniyappan and another, the Hon'ble Supreme Court had held Sections 138, 139, 118cheque dishonor complaintburden of proving that cheque had not been issued for any debt or liability is on the accused. Denial/averments in reply by accused are not sufficient to shift burden of proof on to the complainant. The accused has to prove in trial by leading cogent evidence that there was no debt or liability.
47. Further the Hon'ble Supreme Court in Criminal appeal No.1020/2010 Rangappa Vs. Shri Mohan, the then Hon'ble Chief CC No. 287/11 Deutsche Bank AG Vs. Abhishek Chuhan 35 Justice of India had held that " the bare denial of the passing of the consideration apparently does not appear to be any defence. Something which is probable has to be brought on record for getting the benefit of shifting the onus of proving to the plaintiff /complainant. To disprove the presumption, the defendant has to bring on record such facts and circumstances upon consideration of which the court may either believe that the consideration did not exist or its non existence was so probable that a prudent man would , unless the circumstances of the case, act upon the plea that it did not exists".
48. In support of the above contention of the accused of giving of blank security the cheque about three years ago at the time of disbursement of the loan, the accused has not brought on record any statement of account proving that the same series of cheques (that of the cheque in question) have been honored/issued in the year 2008. However, I am not convinced of the plea/defence taken by the accused in view of section 20 of N.I Act which empowers the holder to fill in the cheque on subsequent date on the CC No. 287/11 Deutsche Bank AG Vs. Abhishek Chuhan 36 accrual of the liability/debt against the payee. For the sake of convenience section 20 of the N.I Act is reproduced hereunder: Section 20. Inchoate stamped instrumentswhere one person signs and delivers to another a paper stamped in accordance with the law relating to negotiable instruments then in force in India, and either wholly blank of 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".
49. A bare perusal of section 20 of the N.I Act explicits that where a simple signature on blank stamp paper is delivered by the signer in order that it may be converted into a bill, it operates as a prima facie authority to fill it up as a complete bill for any amount CC No. 287/11 Deutsche Bank AG Vs. Abhishek Chuhan 37 the stamp will cover, using the signature for that of the drawer or the acceptor or an endorser, and in like manner, when a bill is wanting in any material particular, the person in possession of it has a prima facie authority to fill up the omission in any way he thinks fit. So even if the cheque in question was given by the accused to the complainant company in blank but signed, the accused had given prima facie authority to the complainant company to fill the cheque in any way he thinks fit.
50. The case law relied upon by Ld. Counsel for the accused is not applicable to the facts and circumstances of the present case.
51. In view of the above discussion and the law laid down by various Hon'ble High Courts as well as Hon'ble Supreme Court, the complainant bank i.e M/s Deutsche Bank AG has successfully proved its case beyond any reasonable doubts that the accused in discharge of his debt or liability had issued the cheques Ex. CW1/B, CW1/B1 and Ex. CW1/B2. All these three cheques on their presentation to the banker of the accused were dishonored for CC No. 287/11 Deutsche Bank AG Vs. Abhishek Chuhan 38 the reason "payment stopped by drawer" vide cheque returned memo Ex. CW1/ C, Ex. CW1/C1 and Ex. CW1/C2. The accused further failed to make the payment of the cheques in question within 15 days of receipt of legal demand notice Ex. CW1/D. Accordingly, the accused is hereby held guilty for the offence punishable u/s 138 r/w section 141 and 142 of the Negotiable Instrument Act and is convicted.
ORDER ON APPLICATION U/s 340 Cr.P.C.
52. In this case the complainant bank has also filed an application u/s 340 Cr. P.C against the accused on the plea that during the course of evidence on 19.11.2011, accused on solemn affirmation deposed that he had received a letter dated 17.01.2011 from the complainant. The said letter dated 17.01.2011 along with envelope was marked as D1 and D2. The said letter dated 17.01.2011 had the subject "offer for settlement" on the letter head of the office of the counsel for the complainant and signed by Ms. Worthing Kasar, Advocate by taking the base of notice dated CC No. 287/11 Deutsche Bank AG Vs. Abhishek Chuhan 39 17.01.2011 u/s 138 Negotiable Instrument Act issued to him. It is further averred that the complainant never issued the said offer of settlement to the accused and from the bare perusal of the said letter it is apparent that the said letter has been fabricated by the accused by forging the signatures of Ms. Worthing Kasar counsel for the complainant. In the application it is further stated by the counsel for the complainant that the fabrication of Ex. D1 is deliberate and intention forgery committed by the accused to cause wrongful loss to the complainant to avoid punishment u/s 138 of the Negotiable Instrument Act.
53. Accused filed reply to the said application u/s 340 Cr. P. C. of the complainant wherein again the accused replied that he received an offer letter for settlement dated 17.01.2011 from the complainant's Advocate. The said offer letter for settlement was received on 25.01.2011 vide Speed Post bearing no. SP ED 189892026IN.
54. In view of the foregoing discussion in the judgment, a lot CC No. 287/11 Deutsche Bank AG Vs. Abhishek Chuhan 40 has been discussed on Ex. D1 and this court is also of the opinion that Ex. D1 has been prima facie forged by the accused. I am satisfied that Ex. D1 filed by the accused in this court during the proceedings is prima facie a false, forged and fabricated document at the end of the accused and this court is there to ensure that the free flow of unsoiled stream of justice is not obstructed. Of late litigants have tended to utter falsehood with impunity as on several occasion they have managed to get away with such false statements owing to the unnecessary indulgence and generosity. False averments on oath not only vitiate the probity of judicial proceedings but considerable time is spent and expenses incurred for truth to be unravelled. Contumacious falsehoods by unscrupulous litigants have been eating into the vital of our judicial system and ought to be put down firmly. The accused Abhishek Chauhan prima facie appears to have committed offence narrated in Clause (b) (1) of section 195 Cr. P.C. and prima facie offences under Section 196,199,463,471IPC and other related sections have been committed by him by filing the said document i.e. mark D1 on the court record and tendered in evidence. CC No. 287/11 Deutsche Bank AG Vs. Abhishek Chuhan 41
55. Considering all the facts and circumstances discussed herein above, I am of the view that in the present case it will be appropriate and the ends of justice will be met in the expedient interest of justice that an enquiry should be made into the said offences (section 340 Cr. P. C) and the criminal prosecution should proceed in accordance with law. For this purpose a separate complaint u/s 195 Cr. P.C. for the aforesaid offence i.e. 196,199,463,471IPC and other related sections be sent to the Chief Metropolitan Magistrate, Tis Hazari Courts, Delhi against the accused.
56. With these observations, the application of the complainant u/s 340 Cr. P.C. stands disposed off.
Announced in the open court on 25th February,2012 (Kishor Kumar) Metropolitan Magistrate02 (Municipal) Dwarka Court, Dwarka, New Delhi.
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