Delhi District Court
Manoj Jain vs Naresh Chand Jain (Deceased) on 20 July, 2011
IN THE COURT OF MS. MADHU JAIN, ADDITIONAL SESSIONS
JUDGE01, NORTH, DELHI.
Crl. Appeal No.: 19/2011
CC No. : 504/2010
U/s: 138 N.I. Act
Concerned/Successor Court:
Sh. Sandeep Gupta, MM, Delhi.
Case ID No. 02401R0172562011
IN THE MATTER OF :
Manoj Jain
S/o Sh. Krishan Dass Jain
R/o 4293, Arya Pura
Roshan Ara Road
Subzi Mandi, Delhi110007
........ Appellant
Versus
Naresh Chand Jain (Deceased)
(Through his LRS).
1) Ms. Mona Jain
D/o Late Sh. Naresh Chand Jain
R/o C150, Surya Nagar, Ghazibabd, U.P.
2) Smt. Neeru Jain
W/o Sh. Rajiv Jain
R/o A669, Sector19, Noida, U.P.
3) Mrs. Sundari Jain
Crl. Appeal No.: 19/2011 1/11
W/o Late Sh. Naresh Chand Jain
R/o House No. 4596/2B,
11, Daryaganj, Delhi
.........Respondents
ORDER
1. Present appeal has been filed by the appellant against the judgment dated 16.3.2011 and order on sentence dated 21.3.2011 passed by Ld. MM in CC No. 504/2010 whereby Ld. MM convicted the appellant/accused for offence U/s 138 N.I. Act and sentenced him to undergo Simple Imprisonment for 9 months and to pay compensation of Rs. 11,00,000/ to the complainant, in default SI for two months for the offence U/s 138 N.I. Act
2. In brief facts giving rise to the present appeal are that the complainant (since expired) had filed a complaint U/s 138 N.I. Act against the appellant in the trial court on the ground that appellant/accused being the close family friend of the complainant had been approaching the complainant for friendly loan in order to meet his financial needs and complainant had granted friendly loans to the appellant/accused as per his requests and over a passage of time, sum of Rs. 14 Lacs became due upon the appellant. As per the complainant, in the month of November 2003, appellant/accused issued a cheque amounting to Rs. 10 Lacs towards partial discharge of his liability which was dishonoured on its presentation. Thereafter complainant sent a legal notice dated 3.1.2004 to the appellant/accused also sent his reply. On the failure of Crl. Appeal No.: 19/2011 2/11 appellant/accused to make payment within the stipulated period, complainant filed the complaint U/s 138 N.I. Act against the appellant/accused in the trial court.
3. After hearing the arguments on summoning, appellant/accused was summoned by the trial court and notice U/s 251 Cr.P.C. was framed upon the accused/appellant to which he pleaded not guilty and claimed trial. After the completion of complainant's evidence, statement of appellant/accused U/s 313 Cr.P.C. was recorded wherein he denied having received any loan from the complainant and stated that he handed over the cheque in question as blank signed cheque to his brother in law in consideration of financing of some electrical appliance. Thereafter sufficient opportunities were given to the accused to lead his defence evidence but he failed to lead any defence evidence and finally his defence evidence was closed. After hearing the final arguments of both the parties, Ld. MM convicted the appellant U/s 138 N.I. Act and sentenced him to undergo Simple Imprisonment for 9 months and to pay compensation of Rs. 11,00,000/ to the complainant, in default SI for two months for the offence U/s 138 N.I. Act. It is against these orders dated 16.3.2011 and 21.3.2011 that the present appeal has been filed by the appellant.
4. After the filing of appeal, notice was issued to the respondents and trial court record was also summoned.
5. Despite giving various opportunities neither the appellant nor Crl. Appeal No.: 19/2011 3/11 the counsel for appellant argued their case and in such circumstances arguments were heard from counsel for respondents. Appellant filed his written arguments which has been perused.
6. Section 138 of Negotiable Instruments Act reads as under:
Section 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 any amount of money to another persons from out of that account for the discharge, in whole or in part, of any debt or other liability is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranges to be paid from that account by an agreement made with that bank, such persons shall be deemed to have committed an offence and shall, without prejudice to any other provision 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" .
Provided that nothing contained in this section shall apply unless:
(a) the 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;
(b) the payee or the holder in due course of the cheque, as the case may be, make a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque (within thirty days) of the receipt of information by him from the bank regarding the return of the cheque as Crl. Appeal No.: 19/2011 4/11 unpaid ; and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within 15 days of the receipt of said notice.
7. Insertion of sections 138 to 142 in the Act is an apt illustration of balanced and pragmatic approach adopted by the legislature for the economic development of the country. Under the provisions contained in the new chapter XVII of the Act, coming into effect from 1 April 1989 , if a person issues a cheque in payment of any debt or liability and it is dishonoured for lack of funds or if it exceeds the arrangement with the bank, he or she will be deemed to have committed an offence and will be punished with imprisonment for a term which may extend to one year, or with fine may go up to twice the amount of the cheque, or both. The salient features may be summed up as follows:
(a) The cheque in question should have been issued in discharge of whole or part of a debt or liability. As such, a cheque given as a gift will be outside the framework of this chapter.
(b) The cheque in question should be presented within six months or its specific validity period, whichever is earlier.
(c) The payee or holder should give notice demanding payment within 15 days of this receiving information of dishonour, which should be for no other reason than for insufficiency of funds.Crl. Appeal No.: 19/2011 5/11
d) Drawer can make payment within 15 days of receipt of the notice and only if he fails to do so, he is liable to be prosecuted.
(e) Complaint can be made only by the Payee or the holder in due course within one month of the arising of the cause of action.
8. Under section 139 of the Act, a presumption is drawn against the drawer and in favour of the holder that, unless the contrary is proved, the holder of a a cheque received the cheque for the discharge , in whole or in part, of any debt or other liability. It will also not be open to a drawer to put a defence in a prosecution for an offence under section 138 that the drawer had no reason to believe when he issued the cheque that the cheque may be dishonoured on presentment due to insufficiency of funds (section 140).
9. The presumption as envisaged under section 139 is a statutory and mandatory presumption and not the discretionary presumption. It is an established position of law that under the scheme of Negotiable Instruments Act, especially under scheme of sections 118 and 139, the statutory presumption is created in favour of the complainant and the court has to presume and proceed on the basis of this presumption unless it is dislodged by the accused on the strength of leading cogent and convincing evidence in support of his claim.
10. Appellant in his written arguments has taken the plea that the cheque was not handed over to Naresh Chand Jain. He has further taken the plea that the daughter of Naresh Chand Jain (who expired during the Crl. Appeal No.: 19/2011 6/11 proceedings) has admitted that her father had no other source of income except for the service and she had not seen any documents which shows that her father had a sum of Rs. 14 Lacs and even the retirement benefits cannot be so much that Sh. Naresh Chand Jain gave to the appellant a sum of Rs. 14 Lacs. There was no legally recoverable debt from the appellant.
11. On the other Ld. Counsel for the respondents argued that onus was on the appellant to discharge the presumption that the cheque was not given for the purpose of legally recoverable debt which he has failed to discharge and this appeal is liable to be dismissed.
12. Perusal of the record shows that in the appeal as well as in his written arguments much stress has been laid by the appellant regarding the fact that Late Naresh Chand Jain was a service man and his daughter has admitted that he had no other source of income and she had not seen any documents which shows that her father had a sum of Rs. 14 Lacs and how in 2003 a sum of Rs. 14 lacs can be given in cash as nobody will keep the cash of Rs. 14 lacs in the house and even if on retirement Naresh Chand Jain got retirement benefits of Rs. 15/16 lacs, it is unbelievable that he would give to the appellant a sum of Rs. 14 lacs. Ld. Counsel for respondent argued that there is no presumption in law that a service man cannot have a sum of Rs. 14 lacs with him. He argued that every person has his own financial conditions and if father of the respondent despite being a service man gave a sum of Rs. 14 lacs in cash to the appellant, then no presumption under the law can be raised that he being a service Crl. Appeal No.: 19/2011 7/11 man could not have so much money. The submissions of Ld. Counsel for the respondent bears force. There is no such presumption under law that a service class people cannot give a loan of Rs. 14/15 lacs to any person, even if he had no other source of income. Every person has his own family background and financial conditions or the nature to save and merely because the father of respondent who was initially the complainant in the present case was a service man is no ground to raise a presumption that he could not give sum of Rs. 14 lacs to the appellant. Moreover all these pleas which have been raised by the appellant in the appellate court had also been raised by the appellant in the trial court and trial court has duly dealt with the same.
13. Perusal of the trial court record shows that complainant Naresh Chand Jain expired in the year 2009 and his LR Ms. Mona Jain was substituted. Appellant himself is taking contradictory stands in the trial court. First appellant had given the suggestion that he himself gave the cheque but later on a suggestion had been given by the appellant that cheques were given to the husband of Mona Jain by Sh. Ashok Jain.
14. Perusal of trial court record shows that despite giving various opportunities finally cross examination could not be completed by the appellant and his right to cross examination was closed by the trial court. Hon'ble High Court granted the opportunity to cross examination subject to payment of Rs. 20,000/ but the appellant also failed to make full payment of the cost imposed upon him and again after giving various Crl. Appeal No.: 19/2011 8/11 opportunities for payment of cost, his right to further cross examine the opposite party was closed. Even he took various dates in the trial court for leading defence evidence but failed to lead any defence evidence.
15. So far as the plea regarding the advancing of cash of more than Rs. 20, 000/ being barred under the provisions of Income Tax Act or the respondents without a license cannot lend such a big amount of money is concerned, then both these pleas have been rightly dealt by the trial court. Moreover it seems that whenever the question of returning money arises, then an accused under section 138 of N.I. Act takes every type of plea and cites each and every law which he forgets at the time of taking money.
16. Moreover though the appellant is admitting the reply to the legal notice, but at the same time, in his statement U/s 313 Cr.P.C. before the Ld. Trial court he has stated that he does not know the contents of the same.
17. Counsel for the appellant has placed reliance upon 2010 (4) CC Cases (H.C.) 319 and on 2001 (2) JCC (SC) 51.
18. So far as the authoritative pronouncement 2010 (4) CC Cases (H.C.) 319 is concerned, it has been held by the Hon'ble High Court of Delhi that :
" Negotiable Instruments Act, 1881, Sec. 138, 139 r/w Criminal Procedure Code, 1973, sec. 251, 281, 313 - Non rebutance of presumption - To rebut the presumption U/s 139 of N.I. Act, the accused has to prove the circumstance under which cheques were issued - if no Crl. Appeal No.: 19/2011 9/11 loan was given, but cheque were retained, he immediately would have protested and asked the cheques to be returned and if still cheques were not returned, he would have served a notice as complainant - Where the accused does not examine himself as a witness, his statement under section 281 Cr.P.C. or 313 Cr.P.C. cannot be read as evidence of the accused and it has to be looked into only as an explanation of the incriminating circumstances not as evidence accused was supposed to appear in the witness box and testify and get himself subjected to cross examination - No evidence, whatsoever, was produced by the accused and the trial court traveled extra steps, not permitted by law, to presume that the presumption has stood rebutted" .
19. In 2001 (2) JCC (SC) 51, also the Hon'ble Supreme Court held that " the accused failed to disprove the presumption that cheque was not issued in discharge of a legally recoverable debt" .
20. Reliance is also placed upon 2011 (1) CC cases (HC) 62.
21. In view of these authoritative pronouncements and after seeing the evidence of both the parties on record, it is clear that appellant has failed to discharge the burden. Appellant himself has admitted the issuance of cheque. Though he has taken contradictory stands regarding the same, but the fact remains that why he kept silent when the complainant filed the complaint or misused the cheques. There is no infirmity or illegality in the order of conviction dated 16.3.2011 passed by Ld. MM. Same is, therefore upheld.
22. In Pankajbhai Nagjobhai Patel Vs. State AIR 2001 (SC) 567, it has been held by Hon'ble Apex Court that :
" In view of the limit of fine as prescribed in section 29 (2) of Crl. Appeal No.: 19/2011 10/11 Cr.P.C. the Magistrate who thinks it fit that the complainant must be compensated with loss he can resort to section 357 (3) of the code and can award compensation to the complainant for which no limit is prescribed in section 357 (3) of the Code".
23. The Supreme Court in this case retained the sentence of imprisonment for six months, the fine portion was deleted from the sentence and the accused was directed to pay compensation of Rs. 83,000/ to the complainant.
24. In the present case also the order of sentence dated 21.3.2011 passed by the Ld. MM wherein he directed the appellant to undergo SI for 9 months and to pay a compensation of Rs. 11 lacs to the complainant is also not an exorbitant amount or on higher side. Same is therefore upheld.
25. In view of the abovesaid discussion, there is no infirmity or illegality in the orders dated 16.3.2011 and 21.3.2011. Same are therefore upheld and present appeal filed by the appellant is dismissed. Appellant be taken into custody. Trial Court Record alongwith Copy of this order be sent back. Copy of this order be given to the appellant free of cost. Appeal file be consigned to Record Room.
(MADHU JAIN) Additional Sessions Judge01 (North) Tis Hazari Courts, Delhi.
Announced in the open court today i.e. on 20.7.2011. Crl. Appeal No.: 19/2011 11/11