Delhi District Court
Sanjay Kr. Parcha vs . Sri Ram Page 1 Of 12 on 14 July, 2022
IN THE COURT OF SHRI ARIDAMAN SINGH CHEEMA: MM (NI ACT) DIGITAL COURT-06: SOUTH DISTRICT: SAKET COURTS: NEW DELHI CC No.2421/2021 Under Section 138 of Negotiable Instruments Act,1881 In the matter of: Sanjay Kumar Parcha, ... Complainant S/o Sh. Rohtash Kumar Parcha, R/o 136, Block-G, Dakshinpuri, Khanpur Fruit Market, New Delhi-110062. Versus Sri Ram, ... Accused S/o Sh. Mahadev, R/o B-II/132, Madangir, New Delhi-110062. Date of Institution : 28-06-2021 Date on which judgment was reserved : 30-06-2022 Date of Judgment : 14-07-2022 CC No.2421/2021 Sanjay Kr. Parcha Vs. Sri Ram Page 1 of 12 ARIDAMAN Digitally signed by ARIDAMAN SINGH SINGH CHEEMA Date: 2022.07.14 CHEEMA 16:03:27 +05'30' JUDGMENT
1. The present case has been filed by complainant under Section 138 of Negotiable Instruments Act, 1881 (hereinafter referred to as NI Act).
2. The present complaint alleges, inter alia, that complainant had given in cash a friendly loan of Rs.3,00,000/- to the accused on 12-12-2019. That accused issued cheque (Ex.CW-1/1) bearing No.26550, dated 13-01- 2021 for a sum of Rs.3,00,000/- drawn on State Bank of India, Branch Ambedkar Nagar, New Delhi-110062 in favour of complainant. That the cheque was returned on 06-04-2021 for the reason "payment stopped by drawer" vide memo (Ex.CW-1/2) dated 06-04-2021. That complainant issued legal notice to the accused dated 04-05-2021 (Ex.CW-1/3). Postal receipt is Ex.CW-1/4 along with tracking report (Ex.CW-1/5).
3. On the accused entering appearance, Notice u/s 251 of Code of Criminal Procedure (hereinafter referred to as Cr.PC) was framed against the accused to which he pleaded not guilty and claimed trial. In his defence, accused stated that he had given the cheque in question as security cheque as complainant runs Committee and he was one of the members of the Committee. That accused asked the complainant to return the cheque after completion of Committee but complainant stated that the cheque is misplaced somewhere in house and assured the accused to return the cheque as soon as he gets the same. That the cheque is misused by the complainant and that accused has no legal liability towards the complainant. On admission/denial of documents u/s 294 Cr.PC, accused has admitted cheque from his account along with his signatures. The return memo is also admitted which is Ex.CW-1/2. The accused has denied receiving any legal demand notice.
4. The complainant chose to examine himself as complainant witness. On his cross-examination, he stated that he knows the accused since 15-20 CC No.2421/2021 Sanjay Kr. Parcha Vs. Sri Ram Page 2 of 12 ARIDAMAN Digitally signed by ARIDAMAN SINGH SINGH CHEEMA Date: 2022.07.14 CHEEMA 16:03:43 +05'30' years and he does not know the exact address of accused. That he did not issue receipt for the loan given to the accused and that at the time of giving loan, only he, accused and wife of accused were present. That earlier also he used to make transactions with the accused. That he also helped the people renting the room and properties as agent on commission basis. CW-1 in his cross-examination has said that he does not know that whether the loan amount has been shown in his ITR or not. CW-1 has denied the that he was running any committee. On showing the legal demand notice to the accused, it was admitted by the accused that the cheque number shown in legal demand notice and the cheque number mentioned on the cheque does not match. That he does not run committee.
5. The entire evidence was put to the accused in his statement recorded u/s 313 Cr.PC wherein he deposed that he had not taken any loan from the complainant and that the cheque in question was security cheque for the Committee run by the complainant. That he did not receive any legal notice.
6. The accused chose to examine himself as DW-1 and stated that he is staying at the address B-II/124, Madangir, Ambedkar Nagar, Pushpa Bhawan, New Delhi-110062 since 1999. That he was part of the committee run by complainant and that the cheque in question was given to complainant as security purpose for the Committee when it came to an end. That he asked the complainant to return the cheque in question but complainant replied that the cheque was misplaced and he will return the same as early as possible. That complainant had misused the said cheque. On his cross-examination, DW-1 has stated that the committee started on 10-09-2018 consisting of 16 members, the name of whom he does not know. He further stated that the complainant used to run Committee from his home only. He further stated on his cross-
CC No.2421/2021 Sanjay Kr. Parcha Vs. Sri Ram Page 3 of 12 ARIDAMAN Digitally signed by
ARIDAMAN SINGH
SINGH CHEEMA
Date: 2022.07.14
CHEEMA 16:03:54 +05'30'
examination that there was a bidding in the committee and the highest bidder gets the committee. No receipts were issued in the lieu of the amount invested in the committee. When accused came to know about the misuse of the cheque in question, he filed complaint Ex.DW-1/1 against the complainant. On further cross-examination, it has been admitted by DW-1 that the complaint was filed after receiving of court notice and the relevant para is marked from point X to X1. That complainant has also filed a case u/s 138 NI Act against witness DW-2 Anil Kumar which is pending. The suggestions put to DW-1 were denied.
7. Accused chose to examine Sh. Anil Kumar as DW-2. DW-2 has stated that he was a member of the Committee which was started on 10-09- 2018 and duration of the same was 16 months and it came to an end in December, 2020. That he had also given blank signed cheque as security to the complainant for the said committee which was also misused by the complainant. That complainant has also filed a case against him u/s 138 NI Act .
8. At the stage of final arguments, it has been vociferously argued by the counsel for the complainant that the presumption under section 118 read with Section 139 of the NI Act, arises in favour of the complainant and the accused has failed to rebut the said presumption. Counsel for complainant further argued that accused was unable to name the 16 members in the committee and there was a vague submission about where the committee was being run. He further argued that the complaint which is Ex.DW-1/1 was filed after the receiving of the court notice as mentioned in relevant para which is marked from point X to X1. He stated that DW-2 is the interested witness as the complaint has also been filed against him.
9. Counsel for accused while advancing his final arguments has stated that in para 1 of complaint no date has been mentioned that when accused CC No.2421/2021 Sanjay Kr. Parcha Vs. Sri Ram Page 4 of 12 Digitally signed by ARIDAMAN ARIDAMAN SINGH CHEEMA SINGH CHEEMA Date: 2022.07.14 16:04:06 +05'30' approached the complaint for the loan as averred by the complainant. He further stated that all the amount was paid in cash. He relied upon the cross- examination of CW-1 where it has been put to the CW-1 that the cheque number mentioned in the complaint as well as legal notice is 26550 dated 13- 01-2021 for the sum of amount of Rs.3,00,000/- drawn on State Bank of India, Branch Ambedkar Nagar, New Delhi-110062,does not match. He further argued that as mentioned in paras 5 & 6 in the complaint, the previous return memo and legal notice are not placed on record. He further argued that as mentioned in para 7, the payment of the cheque was stopped because the committed had ended. Counsel for accused has further argued that the address of the accused is B-II/124, Madangir, Ambedkar Nagar, Pushpa Bhawan, New Delhi- 110062 and as per Ex.CW-1/3, Ex.CW-1/4 and Ex.CW-1/5, the address mentioned of the accused is B II/132, Madangir, New Delhi-110062. The address of the accused is wrongly mentioned and on perusing the case file it has been observed as per Ex.CW-1/5 that the "item returned No such person in the address". It is further signifies that the conditions mentioned u/s 138 of NI Act are not fulfilled. Counsel for accused has relied upon the judgment of R.L. Varma & Sons (HUF) Vs. P.C. Sharma Crl. Rev. P. 438/2017 the Hon'ble High Court of Delhi :-
"34. Since the pre-condition of filing a complaint under section 138 of the Negotiable Instruments Act of sending a statutory notice has not been satisifed in the present case, no cause of action arose in favour of the complainant to file the subject complaint. Since no cause of action arose, the petitioner could not have instituted the complaint nor could the trial court as well as the appellate court by the impugned order have convicted the petitioner."CC No.2421/2021 Sanjay Kr. Parcha Vs. Sri Ram Page 5 of 12
ARIDAMAN Digitally signed by
ARIDAMAN SINGH
SINGH CHEEMA
Date: 2022.07.14
CHEEMA 16:04:17 +05'30'
Counsel for accused further argued that accused has not shown the loan amount in his ITR and he has relied upon the judgment of Ashok Baugh Vs. Kamal Baugh Crl. L.P. 358/2012 Hon'ble High Court of Delhi :-
"15. The appellate court, on the contrary, took note of the fact that the petitioner had not obtained any receipt at the time of advancin the loan; had not shown the said amount in his income tax returns; had failed to produce any books of account or any proof to demonstrate his paying capacity; non- rebuttal by the petitioner of the fact of the Respondent/accused having advanced loan to the petitioner/complainant and his wife and which loan was shown in the ITR of the Respondent; failure of the petitioner to explain Ex.DW3/1, the information given by the Respondent to his bank about the loss of his blank signed cheques which included the cheque in question; such information having been provided to the bank on 29.05.1998 i.e. prior to the date of the cheque as well as the date of the legal notice, and so on and so forth."
Counsel for accused further argued that the police complaint was also filed regarding the misuse of the cheque.
On his rebuttal, counsel for complainant has relied upon the judgment of Naresh Chand Tyagi Vs. Devender Kumar Tyagi Crl. M.C.3367/2021 of Hon'ble High Court of Delhi :-
"7. Hence, the concerned trial court must look into this aspect and in my opinion the mentioning of wrong number of the cheque in the complaint would not make any difference as there are documents placed by respondent on record which gives the correct position CC No.2421/2021 Sanjay Kr. Parcha Vs. Sri Ram Page 6 of 12 ARIDAMAN Digitally signed by ARIDAMAN SINGH SINGH CHEEMA Date: 2022.07.14 CHEEMA 16:04:30 +05'30' and has to be taken as a typographical/inadvertent mistake."
10. File perused and arguments heard. After going through the record and hearing submissions advanced on behalf of the parties, there are three issues :-
1) that the legal demand notice was sent to the accused or not?
2) That the wrong mentioning of cheque numbers in the legal demand notice and the complaint can have any adverse effect on the complaint? and
3) that the non-mentioning of loan transaction in the ITR can have any affect on the complaint?
11. At this stage it would be relevant to refer to Judgment of Hon'ble Apex Court rendered in, 'Basalingappa v. Mudidasappa', AIR 2019, SC 1983, wherein the principles in relation to the presumption raised under section 118
(a) read with Section 139 were summarised as under :
"23. We having noticed the ratio laid down by this Court in above cases on Sections 118(a) and 139, we now summarise the principles enumerated by this Court in following manner:-
i)Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.
ii) The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.CC No.2421/2021 Sanjay Kr. Parcha Vs. Sri Ram Page 7 of 12
ARIDAMAN Digitally signed by
ARIDAMAN SINGH
SINGH CHEEMA
Date: 2022.07.14
CHEEMA 16:04:43 +05'30'
Iii) To rebut the presumption, it is open for the accused to rely on evidence led by him or accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.
iv) That it is not necessary for the accused to come in the witness box in support of his defence, Section 118(a) & 139 imposed an evidentiary burden and not a burden.
v) It is not necessary for the accused to come in the witness box to support his defence.
24. Applying the preposition of law as noted above, in facts of the present case, it is clear that signature on cheque having been admitted, a presumption shall be raised under Section 139 that cheque was issued in discharge of debt or liability."
12. Law regarding the ingredients of the offence punishable Section 138 NI Act is well settled. It was held by the Hon'ble Apex Court in the case of 'K. Bhaskaran v. Sankaran Bala' [1999 (7)SCC 510], that ''Offence under section 138 of the NI Act, can be completed only with the concatenation of a number of facts namely,
i) drawing of the cheque;
ii) presentation of the cheque to the bank;
iii) returning the cheque unpaid by the drawee bank;
iv) giving notice in writing to the drawer of the cheque demanding payment of the cheque amount;
v) failure of the drawer to make payment within 15 days of the receipt of the notice''.
CC No.2421/2021 Sanjay Kr. Parcha Vs. Sri Ram Page 8 of 12 ARIDAMAN Digitally signed by
ARIDAMAN SINGH
SINGH CHEEMA
Date: 2022.07.14
CHEEMA 16:04:55 +05'30'
13. It was further held in the above mentioned case that:-
''As the signature in the cheque is admitted to be that of the accused, the presumption envisaged in Section 118 of the Act, can be legally be inferred that the cheque was made or drawn for consideration, on the date which the cheque bears. Section 139 of the Act enjoins the court to presume that the holder of the cheque received it for discharge of any debt or liability. The burden was on the accused to rebut the aforesaid presumption''.
14. It is not in dispute that the accused issued cheque cheque (Ex.CW-1/1) bearing No.265501, dated 13-01-2021 for amount of Rs.3,00,000/- drawn on State Bank of India, Ambedkar Nagar, Sector-III, Madangir, New Delhi-110062 in favour of the complainnt. That on 06-04-2021, the said cheque returned unpaid on presentation for the reason "Payment stopped by drawer" vide memo (Ex.CW-1/2) dated 06-04-2021. That complainant sent legal demand notice dated 04-05-2021 (Ex.CW-1/3) to the accused and per Ex.CW-1/5, it has not been delivered to which the accused has replied in the notice that he never received the legal demand notice. The receipt of legal notice which is Ex.CW-1/4 and the tracking report Ex.CW-1/5 are attached along with the complaint. That after sending legal demand notice, no payment was made within 15 days, hence this complaint.
15. Analyzing the first issue, it can be seen from the cross-examination of CW-1 that he was not sure of the address of the accused. Accused at every stage of the trial has denied the receiving of legal demand notice and the same can be seen from the collective reading of Ex.CW-1/3, Ex.CW-1/4 and Ex.CW-1/5. The legal demand notice which has been sent by the complainant has been returned with remarks "item returned CC No.2421/2021 Sanjay Kr. Parcha Vs. Sri Ram Page 9 of 12 ARIDAMAN Digitally signed by ARIDAMAN SINGH SINGH CHEEMA Date: 2022.07.14 CHEEMA 16:05:09 +05'30' No such person in the address". Accused has further stated that he has been resident of the address B-II/124, Madangir, Ambedkar Nagar, Pushpa Bhawan, New Delhi-110062 since 1999. No question has been put to the accused in his cross-examination disputing his residence as mentioned by him in his statement. It is pertinent to mention here that in the Judgment of Hon'ble Supreme Court in C.C. Alavi Haji vs Palapetty Muhadmmed and Ors. (2007) 6 SCC 555 :-
"15. Insofar as the question of disclosure of necessary particulars with regard to the issue of notice in terms of proviso (b) of Section 138 of the Act, in order to enable the Court to draw presumption or inference either under Section 27 of the G.C. Act or Section 114 of the Evidence Act, is concerned, there is no material difference between the two provisions. 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 then for the drawer to rebut the presumption about the service of notice and show that he had no knowledge that the notice was brought to his address or that the address mentioned on the cover was incorrect or that the letter was never tendered or that the report of the postman was incorrect. In our opinion, this interpretation of the provision would effectuate the object and purpose for which proviso to Section 138 was enacted, namely, to avoid unneccessary hardship to an honest drawer of a cheque and to provide him an opportunity to make amends."
It is also pertinent to mention here that the judgment of R.L. Varma & Sons (HUF) Vs. P.C. Sharma Crl. Rev. P. 438/2017 the Hon'ble High CC No.2421/2021 Sanjay Kr. Parcha Vs. Sri Ram Page 10 of 12 ARIDAMAN Digitally signed by ARIDAMAN SINGH SINGH CHEEMA Date: 2022.07.14 CHEEMA 16:05:31 +05'30' Court of Delhi :-
"34. Since the pre-condition of filing a complaint under section 138 of the Negotiable Instruments Act of sending a statutory notice has not been satisifed in the present case, no cause of action arose in favour of the complainant to file the subject complaint. Since no cause of action arose, the petitioner could not have instituted the complaint nor could the trial court as well as the appellate court by the impugned order have convicted the petitioner."
16. On analyzing the complaint, evidence and the documents placed on record, it has nowhere being disputed by the complainant about the address of the accused. There are only suggestions on behalf of the complainant that the legal demand notice was served and the same were denied by the accused.
Conclusion
17. Section 138 of NI Act mandates the issuance of statutory notice as a pre- condition to filing of a complaint. The cause of action to file a complaint under Section 138 of the NI Act arises only on issuance and service of statutory notice and failure of the accused to comply with the statutory notice. In the absence of service of statutory notice the cause of action would not accrue.
18. As a pre-condition, issuance of statutory notice u/s 138 of NIAct has not been satisfied in the present case, no cause of action arose in the favour of the complainant to file the present case. The complainant has failed to fulfil the conditions mentioned u/s 138 of NI Act, which are the foundation of an offence u/s 138 N.I Act. As the conditions under sec 138 NI act are not fulfilled, there is no need to delve into the other issues. Resultantly, the accused Sri Ram stands CC No.2421/2021 Sanjay Kr. Parcha Vs. Sri Ram Page 11 of 12 ARIDAMAN Digitally signed by ARIDAMAN SINGH SINGH CHEEMA Date: 2022.07.14 CHEEMA 16:05:46 +05'30' acquitted of the offence under Section 138 of NI Act.
19. Copy of digitally signed Judgment be supplied to the accused, free of cost and a copy of the same be placed on the case file.
Digitally signed byDecided on 14-07-2022 ARIDAMAN ARIDAMAN SINGH CHEEMA Announced in open court. SINGH CHEEMA Date: 2022.07.14 16:06:01 +05'30' (Aridaman Singh Cheema) MM(NI Act)Digital Court-06 (South) Saket/New Delhi This judgment contains 12 pages and all pages bears my digital signatures.
Digitally signed by ARIDAMAN ARIDAMAN SINGH CHEEMA
SINGH CHEEMA Date: 2022.07.14 16:06:18
+05'30'
(Aridaman Singh Cheema)
MM(NI Act)Digital Court-06 (South)
Saket/New Delhi/14-07-2022
CC No.2421/2021
Sanjay Kr. Parcha Vs. Sri Ram Page 12 of 12