Delhi District Court
Vikas Verma vs Rukum Upadhyay @Seema on 13 December, 2021
IN THE COURT OF SHRI ARUN KUMAR GARG, CHIEF
METROPOLITAN MAGISTRATE(NE):KARKARDOOMA
COURTS: DELHI
Ct. Case No: 1136/2018
CNR No.: DLNE02-002421-2018
Vikas Verma
S/o. Sh. Rajender Verma
R/o. 94/6, Gulab Vatika
Loni Road, Distt. Ghaziabad .....Complainant
Versus
Rukum Upadhyay @Seema
W/o Sh. Rakesh Upadhyay
R/o. Plot No. 58, 1st floor, Rear Side
Khasra No. 464, Village Mandawali
Fazal Pur, Vijay Block, Laxmi Nagar
Near Natthu Sweets, Illaqa Shahdara
New Delhi-110092 .....Accused
Offence Complained of or proved : Under section 138 of
Negotiable Instruments
Act, 1881
Plea of the Accused : Pleaded not guilty
Date of filing : 18.07.2018
Date of Institution : 20.07.2018
Date of reserving judgment/order : 04.12.2021
Final Order/Judgment : Acquitted
Date of pronouncement : 13.12.2021
JUDGMENT:
BRIEF FACTS AND REASONS FOR THE DECISION OF THE CASE:-
1. Vide this judgment, I shall dispose of the present complaint u/s 138 Vikas Verma v. Rukum Upadhyay@Seema Judgment dated 13.12.2021 Comp. Case No. 1136/2018 Page 1 of 22 of the Negotiable Instruments Act, 1881(hereinafter referred to as the NI Act) filed by the complainant against the accused Rukum Upadhyay @Seema.
2. The present complaint has been filed by complainant against accused Rukum Upadhyay @Seema on account of dishonour of three cheques bearing no. 350247 dated 04.04.2018, 350246 dated 04.04.2018 and 350279 dated 07.03.2018 for a sum of Rs. 1,00,000/-, Rs. 1,00,000/-
and Rs. 3,00,000/- respectively drawn on Yes Bank, Ground floor, Shanker Tress 1936, Ward No. 2, Fountain Chowk, Chandni Chowk, Delhi-110006 in favour of the complainant allegedly in discharge of her liability towards the complainant against a friendly loan of Rs. 5,00,000/- availed by the accused from the complainant on 08.06.2017 for her financial need/expansion of business.
3. It is the case of complainant that the accused having good friendly relations with the complainant, as both of them were working in the same area i.e. Kinari Bazar, Chandni Chowk, on 08.06.2017, had approached the complainant for a friendly loan of Rs. 5,00,000/- for her financial need/expansion of her business and the complainant had granted a friendly loan of Rs. 5,00,000/- to the accused in cash. Thereafter, in order to repay the said loan, the accused handed over three cheques in question to the complainant with the assurance that the same shall be honored on their respective dates of presentation, The aforesaid cheques, according to the complainant, on presentation by him at his bank PNB, Johripur, Shiv Vihar branch were dishonored vide return memos dated 24.05.2018, 18.05.2018 and 16.05.2018 respectively and since the accused had failed Vikas Verma v. Rukum Upadhyay@Seema Judgment dated 13.12.2021 Comp. Case No. 1136/2018 Page 2 of 22 to make the payment against the said cheques despite receipt of legal notice dated 08.06.2018, which was dispatched by the complainant through Regd. Ad/Speed Post at her correct addresses, she has committed the offence u/s 138 of the Negotiable Instruments Act. The complainant has thus filed the present complainant seeking prosecution of the accused for the offence u/s. 138 of the NI Act.
4. On receipt of the complaint, cognizance of offence under Section 138 of the Negotiable Instruments Act, 1881 was taken and accused was summoned vide order dated 20.07.2018. The accused appeared on 01.08.2019 and was admitted to bail. Separate notice u/s 251 Cr. P.C., explaining accusations against the accused u/s 138 of the NI Act, was subsequently served upon the accused and plea of the accused was recorded on 11.10.2019. The accused did not plead guilty and claimed trial.
5. Thereafter, on oral submissions of the accused, she was allowed to cross-examine the complainant in terms of Section 145(2) of the NI Act vide order dated 11.10.2019. CW1 i.e. the complainant was thereafter duly cross examined by Ld. Counsel for accused on 22.02.2021. It is pertinent to note here that in view of the judgment of Hon'ble Delhi High Court in Rajesh Aggarwal v. State, it is not necessary to examine the complainant's witnesses afresh after summoning of the accused, if their affidavits are already on record, though the Court shall recall them for cross examination on an application in this regard, if any, moved by the accused. Thus, the pre-summoning evidence by way of affidavit of the complainant could be read against the accused and there was no need for Vikas Verma v. Rukum Upadhyay@Seema Judgment dated 13.12.2021 Comp. Case No. 1136/2018 Page 3 of 22 examination of CW-1 afresh. The aforesaid affidavit, filed by CW-1 at pre-summoning stage, is Ex. CW-1/A, in which the CW-1 has relied upon the following documents:
Ex.CW1/1: Original cheque bearing no. 350279 dated 07.03.2018 for a sum of Rs. 3,00,000/- drawn on the bank account of M/s Shree Shyamji Trading with Yes Bank, Fountain Chowk, Chandni Chowk, Delhi-110006 in favour of the complainant.
Ex.CW1/2: Original cheque bearing no. 350246 dated 04.04.2018 for a sum of Rs. 1,00,000/- drawn on the bank account of M/s Shree Shyamji Trading with Yes Bank, Fountain Chowk, Chandni Chowk, Delhi-110006 in favour of the complainant.
Ex.CW1/3: Original cheque bearing no. 350247 dated 04.04.2018 for a sum of Rs. 1,00,000/- drawn on the bank account of M/s Shree Shyamji Trading with Yes Bank, Fountain Chowk, Chandni Chowk, Delhi-110006 in favour of the complainant.
Ex.CW1/4 to Ex. CW-1/6: Original Cheque return memos dated 24.05.2018, 18.05.2018 and 16.05.2018 respectively in respect of cheques Ex. CW-1/1 to Ex. CW-1/3.
Ex.CW1/7: Office copy of Legal notice dated 08.06.2018. Ex.CW1/8 & 9: Original postal receipts regarding dispatch of legal notice vide speed post/Regd. AD.
Ex. CW-1/10: Internet generated track report of legal notice through Regd. AD.
6. After cross examination of CW-1, on the submissions of complainant, CE was closed vide order dated 22.02.2021 and matter was fixed for recording of statement of accused u/s 313 Cr. P.C. Thereafter, accused was examined under Section 313 read with Section 281 Cr. P. C. Vikas Verma v. Rukum Upadhyay@Seema Judgment dated 13.12.2021 Comp. Case No. 1136/2018 Page 4 of 22 on 03.03.2021, wherein though the accused has admitted her friendly relations with the complainant, however, had denied having made any request for friendly loan to the complainant and also having availed any loan of Rs. 5,00,000/- from him. The accused denied her liability towards the complainant and also the receipt of legal notice on the ground that she had not been residing at the address mentioned in the notice at the given time. She had taken a plea that complainant and accused were partners in the business along with two other partners namely Amit and Vimal and the complainant used to manage the financial affairs of the firm. According to her, the cheques in question were not issued by the accused in favour of complainant, rather the cheques were the same cheques which she kept after signing the same in the drawer of her shop for payment to some party in Surat. Accused chose to lead evidence in her defence and as such the matter was fixed for DE.
7. Accused has examined Sh. Prateek Sharma S/o Sh. Sanjay Sharma as DW-1 i.e. the sole witness in her defence, who has deposed that the accused was a tenant in his shop no. 2015 (new no. 2039), Kinari Bazar and was running a business therein in partnership with the complainant, one Amit Verma and Vimal, however, around December 2017 a quarrel had taken place between the complainant and accused regarding theft of some cheques of accused by the complainant, whereafter, the accused had vacated the said shop towards the end of December, 2017. He further deposed that he had seen the accused handing over blank signed cheques to the complainant on a number of occasions for payment to parties of Surat. DW-1 was duly cross-examined by Ld. Counsel for complainant Vikas Verma v. Rukum Upadhyay@Seema Judgment dated 13.12.2021 Comp. Case No. 1136/2018 Page 5 of 22 and was discharged. No other witness has been examined by the accused in her defence and at her request, DE was closed vide order dated 23.03.2021. Final arguments were thereafter heard on behalf of both the parties on 27.10.2021 and 04.12.2021.
8. On the basis of rival contentions of the parties the following questions arise for determination by this Court-
(a) Whether the accused is entitled to be acquitted for want of service of mandatory legal notice under Section 138(b) of Negotiable Instruments Act, 1881?
(b) Whether the present complaint is not maintainable in view of the fact that the same has not been filed against the drawer of the cheques in question?
(c) Whether the cheques in question were issued by the accused in favour of complainant in discharge of her legally enforceable liability towards the complainant?
I shall deal with both the aforesaid questions one by one in the following paragraphs.
(a) Whether the accused is entitled to be acquitted for want of proof of service of mandatory legal notice under Section 138(b) of Negotiable Instruments Act, 1881?
9. It is contended by Ld. Counsel for complainant that the complainant has tendered the office copy of legal notice Ex. CW-1/7 along with postal receipts Ex. CW-1/8 & Ex. CW-1/9 and Internet generated delivery report Ex. CW-1/10 in his evidence by way of affidavit which proves that the legal notice was sent by the counsel for complainant to accused at her correct address and was duly served at the Vikas Verma v. Rukum Upadhyay@Seema Judgment dated 13.12.2021 Comp. Case No. 1136/2018 Page 6 of 22 address of firm of the accused. Thus, according to him, there arises a presumption in favour of complainant in terms of section 27 of General Clauses Act read with Section 114(e) of Indian Evidence Act regarding service of legal notice upon the accused and since the accused has failed to make the payment of the cheques' amount in question to the complainant within 15 days from the date of service of copy of complaint and notice along with summons of the case, she can't be permitted to take the plea regarding non-service of legal notice upon the accused in her defence. In support of his aforesaid submission, Ld. Counsel for complainant has relied upon the judgment dated 24.04.2015 of Hon'ble Madras High Court in Crl. Rev. Case No. 733/2010 titled as M/s Jayalakshmi Textiles & Anr. v. S.K.kolandasamy.
10. On the other hand, it has been submitted by counsel for accused that complainant has failed to examine any witness from the post office to prove the documents Ex. CW-1/7 to Ex. CW-1/10 and hence in the wake of denial of accused regarding receipt of notice by her, the complainant has failed to discharge his onus to prove the service of mandatory legal notice upon the accused in terms of section 138(b) of NI Act. He further submits that filing of the complaint by the complainant by mentioning an address different from the one mentioned in the legal notice indicates that the notice was not sent by the complainant to the accused deliberately at her correct address. So far as the second address i.e. the address of shop of the accused, mentioned in the legal notice is concerned, according to Ld. Counsel for the complainant, accused has proved through DW-1 that the said address had already been left by the Vikas Verma v. Rukum Upadhyay@Seema Judgment dated 13.12.2021 Comp. Case No. 1136/2018 Page 7 of 22 accused towards the end of December, 2017 i.e. prior to dispatch of the alleged legal notice by the complainant. Thus, according to him, accused is entitled to be acquitted on this ground alone.
11. I have heard the submissions made on behalf of the parties and have also perused the record. A bare perusal of the record shows that complainant in his evidence by way of affidavit has not only tendered the office copy of legal notice Ex. CW-1/7 but has also tendered the Original postal receipts Ex. CW-1/8 and Ex. CW-1/9. Genuineness of none of the said documents was disputed by the accused during cross-examination of the complainant. So far the Internet generated delivery report Ex. CW- 1/10 is concerned, the same was not accompanied by any certificate u/s 65-B of the Evidence Act.
12. A perusal of the legal notice as well as the postal receipts shows that the legal notice was sent by the complainant on 08.06.2018 to the accused at two addresses i.e. i) F-89/403, Old Plot No. F-89, 3 rd floor, Laxmi Nagar, Near Heera Sweets, New Delhi and ii) Shree Shyam ji Trading, Shop No. 2015, Kinari Bazar, Chandni Chowk, Delhi-110006. So far as the first of the aforesaid addresses is concerned, the accused during her plea u/s 251 Cr.P.C. has categorically stated that she had not been residing at the aforesaid address. No doubt, the accused has failed to step into the witness box to depose on these lines, however, it is significant to note that in the complaint dated 16.07.2018 filed on 18.07.2018 i.e. within a period of almost 40 days from the date of dispatch of alleged legal notice, complainant has mentioned another address of the accused i.e. the address different than the one mentioned in Vikas Verma v. Rukum Upadhyay@Seema Judgment dated 13.12.2021 Comp. Case No. 1136/2018 Page 8 of 22 the legal notice Ex. CW-1/7, which indicates that the complainant was aware of correct address of the accused even at the time of sending the legal notice and has failed to send the legal notice to the correct address of accused for reasons best known to him.
13. So far as the second address of shop of the accused is concerned, it is significant to note that although DW-1 i.e. the sole witness examined by the accused in his defence has admitted that the accused was running her business at the aforesaid shop no. 2015, however, he has further deposed that at the end of December 2017, the accused had vacated the aforesaid shop. The said testimony of DW-1 has remained uncontroverted during his cross-examination by the complainant, meaning thereby, that the complainant has failed to prove that even the second address of the accused to which the legal notice was allegedly dispatched by him on 08.06.2018 was the correct address of the accused.
14. In the absence of proof by the complainant that either of the addresses of the accused as mentioned by the complainant in the legal notice was her correct address, there is no presumption arising in favour of complainant regarding service of legal notice upon the accused either in terms of Section 27 of the General Clauses Act, 1897 or in terms of Section 114 of the Evidence Act, 1872. Admittedly, the complainant has failed to prove the service of notice upon the accused independent of the aforesaid presumptions. It has already been observed herein above that the Internet generated track report in respect of notice dispatched at the address of alleged shop of the accused is not accompanied by any certificate u/s 65-B of the Evidence Act. Even otherwise, there is nothing Vikas Verma v. Rukum Upadhyay@Seema Judgment dated 13.12.2021 Comp. Case No. 1136/2018 Page 9 of 22 in the said report to indicate that the notice was served upon the addressee in as much as the said report shows delivery of notice at Delhi GPO.
15. As has already been noted herein above, Ld. Counsel for complainant has relied upon the judgment dated 24.04.2015 of Hon'ble Madras High Court in Crl. Rev. Case No. 733/2010 titled as M/s Jayalakshmi Textiles & Anr. v. S.K.kolandasamy to contend that since the accused has failed to make the payment of cheques in question within 15 days from the date of service of summons along with copy of complaint and notice, the defence of non-service of legal notice is not available to her in view of the following observations made by Hon'ble Supreme Court in CC Alavi Haji V. Palapatty Muhammed & Another (2007)6 SCC 555:
"A person who does not pay within 15 days on receipt of the summons from the Court alongwith the copy of complaint u/s 138 of the NI Act cannot obviously contend that he was not properly served with the notice as required u/s 138 of the NI Act, by ignoring statutory presumption to the contrary u/s 27 of General Clauses Act and Section 114 of the Evidence Act" (Emphasis mine)."
16. It is significant to note in this regard that the facts of aforesaid case before Hon'ble High Court of Madras were altogether different from the facts of the present case, in as much as, in the case before Hon'ble Madras High Court, Hon'ble Madras High Court has come to a categorical finding that the notice in the said case was sent to the company address to which the accused was a partner and the said address Vikas Verma v. Rukum Upadhyay@Seema Judgment dated 13.12.2021 Comp. Case No. 1136/2018 Page 10 of 22 was correct. It was under the aforesaid circumstances that Hon'ble Madras High Court had come to a finding that plea of accused regarding non- service of legal notice was not available to him in the said case. However, in the case in hand, the accused has been able to prove through the material brought on record by the complainant himself and through the un-controverted testimony of DW-1 that none of the addresses to which the legal notice was allegedly sent by the complainant was her correct address.
17. Under the aforesaid circumstances, there is no question of any presumption of service of legal notice upon the accused either in terms of Section 27 of the General Clauses Act, 1897 or under Section 114 of the Evidence Act in favour of complainant. With utmost respect to Hon'ble Supreme Court as well as to Hon'ble madras High Court, in my humble opinion, in the absence of proof of the fact that the notice was dispatched by the complainant to the correct address of the accused, which was a necessary pre-condition for raising of aforesaid presumptions, the complainant can't be permitted to derive any benefit of the observations made by Hon'ble Supreme Court in CC Alavi Haji V. Palapatty Muhammed & Another that a person who does not pay within 15 days on receipt of the summons from the Court alongwith the copy of complaint u/s 138 of the NI Act cannot obviously contend that he was not properly served with the notice as required u/s 138 of the NI Act, because the said observations pre-supposes that the complainant has proved the facts required for raising the presumptions under u/s 27 of General Clauses Act and Section 114 of the Evidence Act, which is Vikas Verma v. Rukum Upadhyay@Seema Judgment dated 13.12.2021 Comp. Case No. 1136/2018 Page 11 of 22 apparent from the portion of the observations emphasized by this court herein above.
18. While taking the aforesaid view, I draw support from the judgment of Hon'ble Delhi High Court in HDFC Bank Ltd. v. Amit Kumar Singh (2009)160 DLT 478 wherein, after referring to the judgment of Hon'ble Supreme Court in CC Alavi Haji's case supra, it was held by Hon'ble Delhi High Court that there was no error in the order of dismissal of the complaint u/s 138 of the NI Act by the Magistrate for want of proof of service of legal notice or in the alternative of the affidavit of the AR of complainant that he had visited the address mentioned in the legal notice and found the accused residing thereupon before dispatch of the legal notice.
19. Thus, the First question is answered in the affirmative.
(b) Whether the present complaint is not maintainable in view of the fact that the same has not been filed against the drawer of the cheques in question?
20. It is next contended by Ld. Counsel for accused that both the cheques in question had been drawn on the bank account of M/s Shree Shyamji Trading, however, the complainant has failed to implead M/s Shree Shyamji Trading as an accused in the present case and hence the present complaint against the accused is not maintainable.
21. On the other hand, it is submitted by Ld. Counsel for the complainant that M/s Shree Shyamji Trading is a proprietorship firm of the accused, who has admitted her signatures on the cheques in question. He further submits that the provisions of Section 141 NI Act are not applicable to a Vikas Verma v. Rukum Upadhyay@Seema Judgment dated 13.12.2021 Comp. Case No. 1136/2018 Page 12 of 22 proprietorship firm and since the proprietorship firm is not a separate legal entity distinct from its sole proprietor, the complaint against the sole proprietor even without impleading the proprietorship firm is maintainable. In support of his aforesaid submissions, Ld. Counsel for complainant has relied upon the judgments of Hon'ble Allahabad High Court in Manoj Singh v. State of U.P. and Anr. decided on 03.05.2019 and in Dhirendra Singh v. State of U.P. and Anr. decided on 13.10.2020.
22. I have heard the submissions made on behalf of both the parties and have carefully perused the material available on record, in the light of judgments relied upon by Ld. Counsel for accused. Although, in view of the judgments relied upon by Ld. Counsel for accused, there can be no manner of doubt that the provisions of Section 141 Cr.P.C. are not applicable in case the cheque in question is drawn on the bank account of a proprietorship firm and hence, it is not mandatory to implead the proprietorship firm as an accused before seeking prosecution of the proprietor for the offence u/s 138 of the NI Act, however, in my considered opinion, the judgments relied upon by the accused are distinguishable on facts and hence, the reliance by the complainant on the said judgments to contend that the present complaint against the accused is maintainable in the present form is highly misplaced.
23. It is significant to note in this regard that in both the judgments relied upon by Ld. Counsel for complainant, Hon'ble Allahabad High Court has categorically observed that there was no defect in the complaint lodged against the accused in the said cases, in their capacity as the sole proprietors of their respective firms, meaning thereby that the Vikas Verma v. Rukum Upadhyay@Seema Judgment dated 13.12.2021 Comp. Case No. 1136/2018 Page 13 of 22 accused in the said cases were impleaded in the capacity of they being the sole proprietors of their respective firms.
24. On the other hand, there is no whisper either in the cause title or in the body of the present complaint regarding the accused Rukum Upadhyay having been impleaded in the capacity of she being the sole proprietor of M/s Shree Shyamji Trading. In fact, there is no whisper in the entire complaint that the cheques in question were drawn on the bank account of the proprietorship concern of accused Rukum Upadhyay or that the accused is the sole proprietor of the said firm. Even on a perusal of the cheques in question, it is not apparent that the cheques in question were signed by the accused in the capacity of her being the proprietor of M/s Shree Shyamji Trading. Rather, a bare perusal of the cheques would show that the cheques have been signed by the accused as the authorized signatory of M/s Shree Shyamji Trading.
25. Thus, even if it is assumed for the sake of arguments that M/s Shree Shyamji Trading is a proprietorship concern, in the absence of any averment in the complaint or even during evidence that the accused is the sole proprietor of the said firm, the present complaint against the accused merely being the signatory, shall not be maintainable in view of the law laid down in the judgments relied upon by Ld. Counsel for the complainant that Section 141 NI Act does not apply to cheques drawn on the bank account of a proprietorship concern.
26. In the peculiar facts and circumstances of the present case, in view of the plea taken by the accused that she was carrying on the business in partnership with the complainant and two others, it was all the more Vikas Verma v. Rukum Upadhyay@Seema Judgment dated 13.12.2021 Comp. Case No. 1136/2018 Page 14 of 22 incumbent upon the complainant to prove that M/s Shree Shyamji Trading was the sole proprietorship concern of the accused. It is submitted by Ld. Counsel for complainant that the accused has failed to prove her aforesaid plea that she was running the business in partnership with the complainant and two others and hence, she can't be permitted to take the plea that she is not the proprietor of the said firm at this stage.
27. I don't find any force in the aforesaid submission made on behalf of the complainant in view of the settled legal position that in a criminal complaint, the case of complainant must stand on it's on legs and the complainant can't be permitted to take benefit of the deficiencies, if any, in the case of accused. It has already been observed hereinabove that the complainant has neither pleaded nor proved that M/s Shree Shyamji Trading was a proprietorship firm and accused was the sole proprietor thereof and the aforesaid facts can't be presumed merely because the accused has failed to prove to the contrary by leading any cogent evidence.
28. In view of the aforesaid discussion, in my considered opinion, the present complaint against the accused is not maintainable in the present form and the second question is also answered in the affirmative.
(c) Whether the cheques in question were issued by the accused in favour of complainant in discharge of his legally enforceable liability towards the complainant?
29. Before adverting to the facts of the case in hand, it would be pertinent to reproduce the relevant provisions of Section 138, 139 and Vikas Verma v. Rukum Upadhyay@Seema Judgment dated 13.12.2021 Comp. Case No. 1136/2018 Page 15 of 22 Section 118(a) and (b) of the Negotiable Instruments Act at the very outset, which read as follows:-
"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 person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have 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, 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 thirty days of the receipt of information by him from the bank regarding the return of the cheque as 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 fifteen days of the receipt of the said notice.
Explanation :- For the purposes of this section, `debt or other Vikas Verma v. Rukum Upadhyay@Seema Judgment dated 13.12.2021 Comp. Case No. 1136/2018 Page 16 of 22 liability' means a legally enforceable debt or other liability."
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.
118. Presumption as to negotiable instruments- Until 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 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;"
30. Issue regarding the scope of presumptions u/s 118(a) and u/s 139 of the NI Act has come up for consideration before the Hon'ble Supreme Court in a number of cases. There is no doubt about the settled legal position that once the signatures on the cheque are admitted by the drawer of the cheque, there arises a presumption in favour of the payee/holder in due course in terms of Section 139 and 118 (a) of the Negotiable Instruments Act that the cheque has been issued for consideration and in discharge of a legally enforceable debt or liability. Although in Krishna Janardhan Bhat v. Dattatraya G. Hegde, (SC)2008(1)R.C.R.(Criminal) 695, Hon'ble Supreme Court has held that
a) the presumption does not go to the extent of presuming the existence of debt and b) the aforesaid presumption is rebuttable in nature, however, a three judge bench of Hon'ble Supreme Court in Rangappa v. Sri Mohan (2010) 11 SCC 441, has overruled the first of the aforesaid Vikas Verma v. Rukum Upadhyay@Seema Judgment dated 13.12.2021 Comp. Case No. 1136/2018 Page 17 of 22 proposition while holding that the presumption u/s 139 of the NI Act, though rebuttable, goes to the extent of even presuming the existence of a legally enforceable debt.
31. In M.S. Narayana Manon V. State of Kerala & Another AIR 2006 SC 3366, it has been held that for rebuttal of the presumptions it is not necessary that the accused must step into the witness box but the presumptions can be rebutted either by cross examination of the complainant's witnesses or even by raising presumptions of fact or law from the material available on record as held in Kundan Lal Rala Ram V. Custodian Evaccue Property, reported as AIR 1961 SC 1316).
Moreover, standard of proof for rebuttal of presumptions by any person accused of an offence under Section 138 of the Negotiable Instruments Act is preponderance of probabilities and accused is not liable to prove his defence beyond reasonable doubts. On the other hand, bare denial or bald suggestions give by the accused would not be sufficient to rebut the aforesaid presumptions. Thus, whether the presumption has or has not been rebutted depends upon the facts of each case to be analyzed in the light of aforesaid legal principles.
32. It has been contended by the Ld counsel for the complainant that since the accused has admitted her signatures on the cheques Ex. CW-1/1 to Ex. CW-1/3, there are sufficient grounds to raise presumptions under Section 118(a) and 139 of the NI Act in favour of the complainant that the cheques in question were issued by her in discharge of her legally enforceable liability towards the complainant. It is further submitted by him that the accused has failed to rebut the aforesaid presumptions, in as Vikas Verma v. Rukum Upadhyay@Seema Judgment dated 13.12.2021 Comp. Case No. 1136/2018 Page 18 of 22 much as, she has taken contradictory pleas in her defence at different stages of the trial and has also failed to prove either of the aforesaid pleas. He submits that the accused has failed to prove her defence that she was running the business in partnership with the complainant and two others, in as much as, she has neither stepped into the witness box, nor has produced any partnership deed or any other document in support of her aforesaid plea. He submits that the accused has examined the son of her landlord as the sole witness in her defence, who was an interested witness being the surety of the accused. He further submits that the accused has failed to examine any of her alleged partners or for that matter the alleged businessmen from the Surat for whom she had allegedly signed the cheques in question.
33. Besides, according to him, even independent of the aforesaid presumptions, the complainant has proved all the ingredients of offence u/s 138 of the NI Act beyond reasonable doubts through his uncontroverted testimony, which is duly corroborated by the documentary evidence in the form of documents Ex. CW-1/1 to Ex. CW- 1/10. He has thus prayed for conviction of accused for the offence under Section 138 of the NI Act.
34. On the other hand, it is submitted by counsel for the accused that the complainant has failed to prove his case against the accused beyond reasonable doubts. He submits that the complainant has failed to prove the grant of alleged loan of Rs. 5,00,000/- to the accused either by production of any loan agreement or even his books of accounts. He further submits that the complainant has also failed to prove his financial Vikas Verma v. Rukum Upadhyay@Seema Judgment dated 13.12.2021 Comp. Case No. 1136/2018 Page 19 of 22 capacity to grant such a huge amount of loan in cash, more so, in view of the recent demonetization which had taken place in November 2016. He submits that admittedly the complainant had not been filing any income tax return during the relevant period, which indicates that his income was not sufficient to grant such a huge amount of Rs. 5,00,000/- as loan. He has thus prayed for acquittal of the accused of the charge u/s 138 of the NI Act.
35. I have given a thoughtful consideration to the submissions made on behalf of both the parties and to the entire material available on record in the light of legal principles quoted in para 30 and 31 of this judgment.
36. As has already been observed herein above, in the case in hand, the cheques in question have been drawn on the bank account of M/s Shree Shyamji Trading and the same are admittedly bearing the signatures of the accused as authorized signatory of the said firm. There is not even an iota of evidence led on behalf of the complainant that the said firm is the proprietorship firm and that the accused is the sole proprietor thereof. Under the aforesaid circumstances, the presumption, if any, arising in terms of Section 118 and 139 of the NI Act, shall be to the effect that the cheques were issued by M/s Shree Shyam ji Trading in favour of complainant in discharge of its legally enforceable liability towards the complainant, whereas, the allegations in the complaint as well as evidence by way of affidavit of the complainant are against the accused Rukum Upadhyay. Thus, on the basis of aforesaid facts and circumstances, at the best it can be presumed that the cheques in question were issued by M/s Shree Shyamji Trading in favour of complainant in Vikas Verma v. Rukum Upadhyay@Seema Judgment dated 13.12.2021 Comp. Case No. 1136/2018 Page 20 of 22 discharge of legally enforceable liability of the accused Rukum Upadhyaya and hence in terms of provisions of Section 138 of the NI Act, it is the firm which shall be liable for prosecution under Section 138 of the NI Act and not the accused except in case she can be held to be vicariously liable in terms of Section 141 of the NI Act.
37. The vicarious liability of the accused in terms of Section 141 NI Act is possible only in case M/s Shree Shyamji Trading is either a company, a partnership firm or an association of persons and there were not only allegations but also the proof available on record that the accused was the person in-charge and responsible for day to day affairs of the said company/firm/AOP, however, even in such a case, she could not have been convicted for want of impleadment of M/s Shree Shyamji Trading as an accused.
38. On the other hand, if it is assumed for the sake of arguments that M/s Shree Shyamji Trading is a proprietorship firm and hence, the provisions of Section 141 NI Act are not applicable to the facts of present case, the present complaint against the accused is not maintainable for want of allegations/proof that the accused is the sole proprietor of the said firm.
39. Moreover, the complainant has failed to prove not only his financial capacity but also the availability of Rs. 5,00,000/- in cash with him at the time of grant of alleged loan by him to the accused particularly in view of the fact that he had not been filing his ITRs during the relevant period which indicates that his income was falling below the minimum required for filing of the ITRs. Besides, issuance of two cheques of Rs.
Vikas Verma v. Rukum Upadhyay@Seema Judgment dated 13.12.2021 Comp. Case No. 1136/2018 Page 21 of 22 1,00,000/- each by the accused in favour of complainant bearing the same date casts serious doubt about the veracity of case sought to be setup by the complainant that the duly filled up post dated cheques were handed over by the accused to the complainant on the same day, in as much as, it does not stand to the reason that a person will issue two cheques of Rs. 1,00,000/- each drawn on the same bank account and bearing the same date instead of issuing one cheque of Rs. 2,00,000/-. It would have been a different issue if the accused would have drawn the said cheques on different dates or on different bank accounts.
40. In view of the aforesaid discussion, the third question is answered in negative.
41. In view of the aforesaid discussion and answers to the three questions hereinabove, in my considered opinion, the complainant has failed to prove all the facts, required to secure conviction of the accused for the offence u/s 138 of the NI Act, beyond reasonable doubts. The accused is thus entitled to be acquitted and is hereby acquitted of the charge u/s 138 of the Negotiable Instruments Act, 1881.
42. Ordered accordingly.
43. Accused has already furnished PB and SB in sum of Rs. 20,000/- each in terms of provisions of Section 437-A of Cr.P.C. on 03.03.2021 and the same shall remain in force for a period of six months from today.
Announced in the Open Court on this 13th day of December, 2021. ARUN Digitally signed by
ARUN KUMAR
This Judgment consists of 22 signed pages. KUMAR GARG
Date: 2021.12.13
GARG 18:10:20 +0530
(ARUN KUMAR GARG)
Chief Metropolitan Magistrate(North East)
Karkardooma Courts, Delhi/13.12.2021
Vikas Verma v. Rukum Upadhyay@Seema
Judgment dated 13.12.2021
Comp. Case No. 1136/2018 Page 22 of 22