Delhi District Court
Also At: 303-306 vs The State (Govt. Of Nct Of Delhi) on 28 April, 2022
IN THE COURT OF SH. SANJAY SHARMA-II : ADDL. SESSIONS JUDGE-03,
(CENTRAL): TIS HAZARI COURTS, DELHI
Criminal Appeal No. 138/2021
CNR No.: DLCT01-017501-2021
Yogesh Sharma
Prop.: M/s. Naitik Card & Paper
C-15, opposite Shah Namkeen,
near Govind Pura, Chander Nagar,
Delhi-110051
Also at: 303-306, Ground Floor,
Kucha Meer Ashique, Laxmi Market,
Delhi-110006
..... Appellant
VERSUS
1. The State (Govt. of NCT of Delhi)
2. Sh. Nem Chand Jain (since deceased), through his legal
representatives:
(a) Mrs. Shiromani Jain ..... Wife
(b) Mr. Vineet Kumar Jain ..... Son
(c) Mr. Amit Kumar Jain ..... Son
(d) Ms. Preeti Jain ..... Daughter
All Residents of: 97-B, East Moti Bagh,
Sarai Rohilla, Delhi-110007
M/s. Mukesh Paper & Stationery Mart
944, Chhota Chhipiwara, Chawri Bazar,
Delhi-110006
..... Respondents
Date of Institution : 16.12.2021
Date of Arguments : 10.03.2022
Date of Judgment : 28.04.2022
JUDGMENT
Crl. Appeal No. 138/2021 Yogesh Sharma vs. State & Anr. Page No. 1/26
1. The criminal appeal under Section 374 of 'The Code of Criminal Procedure, 1973' (Hereinafter referred to as 'Cr.P.C.') is directed against judgment dated 03.03.2020 and order on sentence dated 25.03.2021 in CC No. 11664/2017 titled as 'Nem Chand Jain vs. Yogesh Sharma' under Section 138 of 'The Negotiable Instruments Act, 1881' (In short 'NI Act') whereby Ld. MM-05 (NI Act), Central District, Tis Hazari Courts, Delhi (In short 'the trial Court') convicted the appellant for offence under Section 138 NI Act and sentenced him to simple imprisonment for one month and fine of Rs. 2,65,667/-, which will be paid to the respondent No. 2 as 'compensation', and otherwise, the appellant is directed to further undergo simple imprisonment for a period of one month.
BRIEF FACTS:
2. Originally, Mr. Nem Chand Jain (Hereinafter referred to as 'the complainant') instituted a complaint case under Section 138 NI Act, through his son and attorney, namely, Mr. Vineet Kumar Jain, on averments that the complainant was proprietor of 'M/s. Mukesh Paper & Stationery Mart'. The complainant supplied papers to the appellant worth Rs.
1,98,629/-, vide Bill No. 104 dated 17.03.2016 for Rs. 1,10,744/- and Bill No. 152 dated 11.04.2017 for Rs. 87,885/-. In discharge of his liability, the appellant issued Cheque No. 000037 dated 05.06.2017 in the sum of Rs. 1,98,629/- drawn on 'Bank of Baroda, Shakarpur, Delhi-110092' (In short 'the said cheque') in favour of the complainant.
Crl. Appeal No. 138/2021 Yogesh Sharma vs. State & Anr. Page No. 2/263. The complainant presented the said cheque for encashment to his banker, namely, 'Oriental Bank of Commerce, Chawri Bazar, Delhi-110006'. However, the complainant's banker returned the said cheque unpaid with remark 'PAYMENT STOPPED BY DRAWER' vide memo dated 28.07.2017. The complainant sent demand notice dated 05.08.2017 to the appellant vide speed post. The appellant failed to make payment of the cheque amount within statutory period despite receipt of demand notice. The complainant filed the complaint case under Section 138 NI Act. SUMMONING ORDER:
4. The trial Court, vide order dated 08.09.2017, summoned the appellant for offence under Section 138 NI Act.
SUBSTITUTION OF LEGAL REPRESENTATIVES OF THE COMPLAINANT:
5. The complainant expired on 06.06.2018. The trial Court, vide order dated 02.11.2018, on the application of his legal representatives, substituted them, in his place. NOTICE OF ACCUSATIONS UNDER SECTION 251 CR.P.C.:
6. On 02.11.2018, the trial Court explained substance of accusations to the appellant, as required under Section 251 Cr.P.C., to which he responded as under:
"Q. Do you have any defence to make, if yes, what is your plea of defence?
A. The cheque in question was provided to present AR / LR Sh. Vineet Kumar Jain for goods supplied as a security. I kept on making payment of goods supplied and paid Rs. 80,000/- to present LR.Crl. Appeal No. 138/2021 Yogesh Sharma vs. State & Anr. Page No. 3/26
Thereafter, due to demonetization, I could not make remaining payment and further there were some defective goods which I asked the present LR to receive back. He assured me not to worry but now the cheque has been misused in this matter."
THE COMPLAINANT'S EVIDENCE:
7. Mr. Vineet Kumar Jain (CW-1) testified on strength of affidavit Ex.CW1/A. He relied on Special Power of Attorney (SPA) dated 31.08.2017 Ex.CW1/1, copy of bills Ex.CW1/1A (colly.), statement of account Ex.CW1/2 (not available on the file of trial Court), cheque Ex.CW1/3, bank memo dated 28.07.2017 Ex.CW1/4, demand notice dated 05.08.2017 Ex.CW1/5, postal receipts Ex.CW1/6 (colly.) and original returned envelopes Ex.CW1/7 to Ex.CW1/10. In cross-
examination, he produced Income Tax Return (ITR) for assessment year 2015-16 Ex.CW1/D1 and assessment year 2016-17 Ex.CW1/D2.
EXAMINATION UNDER SECTION 313 CR.P.C.:
8. Incriminating circumstances appearing in the evidence were explained to the appellant, as required under Section 313 Cr.P.C., to which he replied as under:
"Q 1. It is in evidence against you that you issued one cheque bearing No. 000037 (Ex.CW1/3) dated 05/06/2017 in sum of Rs. 1,98,629/- in favour of the complainant with the assurance that the same shall be honoured upon presentation. However, the same was dishonoured vide returning memo dated 28/07/2017 (Ex.CW1/4) for the reason "payment stopped by drawer". What do you have to say? Ans. Yes. It is correct being a matter of record.Crl. Appeal No. 138/2021 Yogesh Sharma vs. State & Anr. Page No. 4/26
Q2. It is in evidence against you that despite service of the legal demand notice U/S 138 of the N.I. Act (Ex.CW1/5) dated 05/08/2017 (corresponding postal and courier receipts which is Ex.CW1/6), you failed to make the payment. What do you have to say? Ans. I have not received legal notice from the complainant. However, I left the address as mentioned in legal demand notice as I was tenant there.
Q3. It is in evidence against you that complainant supplied goods / papers to you against bills totalling to Rs. 1,98,629/- were raised against you. That in consideration of the same you issued the cheque in question which got dishonoured. What do you have to say?
Ans. It is false. The complainant had asked by the cheque in question as security for supply of paper. I had only bought paper from the complainant once for an amount of nearly Rs. 60 thousand to Rs. 70 thousand. I had paid to the entire amount in cash.
Q4. Do you accept the bills Ex.CW1/1A as correct? Ans. No. Q5. Do you know the complainant?
Ans. I know the complainant as we worked in the same market.
Q6. Do you have any outstanding liability towards the complainant?
Ans. No. Q7. Do you have anything else to say?
Ans. No. Q8. Do you want to lead defence evidence? Ans. Yes.
"
APPELLANT'S EVIDENCE:
9. In defence evidence, the appellant did not examine any witness, vide statement dated 14.11.2019.Crl. Appeal No. 138/2021 Yogesh Sharma vs. State & Anr. Page No. 5/26
ANALYSIS OF IMPUGNED JUDGMENT:
10. The trial Court, vide impugned judgment, convicted the appellant for offence under Section 138 NI Act on the grounds, as under:
(a) The appellant admitted that the said cheque was drawn on an account maintained by him and therefore, presumption under Section 118 (a) and 139 NI Act that the said cheque was issued in discharge of a legally enforceable liability must be drawn;
(b) The appellant did not state, in his examination under Section 313 Cr.P.C., that the goods were defective or he had requested the complainant to receive back the goods;
(c) The appellant has not placed any receipt regarding payment of any amount, in cash or otherwise;
(d) Contention that the said cheque was issued as a security cheque is not a valid defence in the absence of any evidence that liability to pay the cheque amount did not crystallize on the date of presentation of the said cheque;
(e) The appellant failed to raise probable defence to rebut presumption of existence of a legally enforceable liability; and
(f) Non-attestation of Special Power of Attorney (SPA) by witnesses is not fatal.
GROUNDS OF APPEAL:
11. Feeling aggrieved and dissatisfied with the impugned judgment, the appellant preferred the appeal on the grounds, as under:
(a) The trial Court did not appreciate that the complainant misused a security cheque;
(b) The trial Court did not appreciate that the said cheque was not issued in discharge of any legally enforceable debt or liability;
(c) The trial Court disbelieved testimony of the appellant without assigning any reason;Crl. Appeal No. 138/2021 Yogesh Sharma vs. State & Anr. Page No. 6/26
(d) The trial Court did not consider that 'the name of payee' and 'date' were not written on the said cheque when the appellant handed it over to the complainant and as such, it is not a negotiable instrument as defined under Section 5 and 6 NI Act;
(e) The trial Court believed bald statement of the complainant in absence of any corroborating evidence;
(f) The trial Court wrongly concluded that demand notice was served upon the appellant;
(g) The trial Court did not consider that the appellant had already paid an amount of Rs. 80,000/- to Mr. Vineet Kumar Jain, AR for the complainant and due to demonetization, the appellant could not make payment of balance amount prior to issuance of notice and therefore, there was no cause of action;
(h) The appellant rebutted presumption under Section 139 NI Act by deposing correct facts that insertion of payee's name and date was dependent on condition of procurement of supply orders and not otherwise;
(i) the trial Court did not appreciate that the defence of the appellant that the said cheque was issued subject to condition of procurement of supply was stronger than the complainant's case that the appellant issued the said cheque for alleged bills of Rs. 1,98,629/-; and
(j) The trial Court did not appreciate that there was no liability against the appellant on the date of presentation of the said cheque as the appellant had already made payment of Rs. 80,000/- to Mr. Vineet Kumar Jain.
APPEARANCE:
12. I have heard arguments of Mr. Avneesh Mishra, Advocate for the appellant and Mr. Himanshu Verma, Advocate for the complainant and examined trial Court record.Crl. Appeal No. 138/2021 Yogesh Sharma vs. State & Anr. Page No. 7/26
CONTENTIONS OF LD. COUNSEL FOR THE APPELLANT:
13. Ld. Counsel for the appellant contended that the complainant misused a security cheque issued by the appellant for supply of goods. He contended that the complainant has not proved bills Ex.CW1/1A (colly.). He contended that the complainant neither produced original bills nor bills Ex.CW1/1A (colly.) bear signature of the appellant. He contended that the complainant has not produced statement of account. He contended that the appellant had issued a blank cheque and such cheque without 'name of payee' and 'date' is not a cheque under Section 5 and 6 NI Act. He contended that besides a general statement of CW-1 Vineet Kumar Jain, there is no corroborating evidence. He contended that the appellant had already paid an amount of Rs. 80,000/- to Mr. Vineet Kumar Jain and due to demonetization, the appellant could not make payment of balance amount. He contended that the appellant was not served with demand notice and therefore, there was no cause of action against him. He contended that the appellant rebutted presumption under Section 139 NI Act as filling of particulars of 'payee' and 'date' were dependent upon procurement of supply. He contended that there was no liability against the appellant. He contended that defence of the appellant was more probable than the case of the complainant.
He contended that the trial Court did not appreciate facts, evidence and law in proper perspective. He contended that the impugned judgment and sentence deserve to be set-aside.
Crl. Appeal No. 138/2021 Yogesh Sharma vs. State & Anr. Page No. 8/26CONTENTIONS OF LD. COUNSEL FOR THE COMPLAINANT:
14. Ld. Counsel for the complainant contended that the trial Court thoroughly examined evidence and delivered a reasoned judgment. He contended that the appellant failed to raise any probable defence to displace statutory presumption under Section 139 NI Act. He contended that there is no manifest error of law or procedure or perversity in the impugned judgment.
SCOPE OF JURISDICTION OF FIRST APPELLATE COURT:
15. The jurisdiction of the appellate court is co-
extensive with that of the trial court. The powers of the appellate court under Section 386 CrPC are the same as that of the trial court. In an appeal from a conviction, it is for the appellate court to be satisfied affirmatively that prosecution case is substantially established and record its own findings to confirm conviction.
16. In Rajan vs. State of M.P., (1999) 6 SCC 29, Hon'ble Supreme Court of India held as under:
"3.....It cannot be forgotten that the appellate court's jurisdiction is co-extensive with that of the trial court in the matter of assessment, appraisal and appreciation of the evidence and also to determine the disputed issues....."
17. In Narender Bhat vs. State of Karnataka, (2009) 17 SCC 785, Hon'ble Apex Court held as under:
"3. This Court has in a series of judgments held that a court exercising appellate power must not only consider questions of law but also questions of fact and in doing so it must subject the evidence to a critical scrutiny....."Crl. Appeal No. 138/2021 Yogesh Sharma vs. State & Anr. Page No. 9/26
STATUTORY PROVISION:
18. Section 138 NI Act is as 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 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."Crl. Appeal No. 138/2021 Yogesh Sharma vs. State & Anr. Page No. 10/26
19. It is manifest that to constitute an offence under Section 138 of the Act, the following ingredients are required to be fulfilled:
(i) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account;
(ii) the cheque should have been issued for the discharge, in whole or in part, of any debt or other liability;
(iii) that cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier;
(iv) that cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank;
(v) the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 30 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;
(vi) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice.
Being cumulative, it is only when all the aforementioned ingredients are satisfied that the person who had drawn the cheque can be deemed to have committed an offence under Section 138 of the Act."
Crl. Appeal No. 138/2021 Yogesh Sharma vs. State & Anr. Page No. 11/26POINTS FOR CONSIDERATION:
(a) Whether statutory presumption under Section 118 (a) and Section 139 NI Act that the said cheque was drawn for consideration and the complainant received the said cheque in discharge of any debt or other liability can be raised?
20. The appellant admitted that he had issued the said cheque in favour of the complainant. The said cheque was drawn on 'Bank of Baroda, Shakarpur, Delhi-110092'. In reply to substance of accusations under Section 251 Cr.P.C., the appellant stated that he provided the said cheque to CW-1 Vineet Kumar Jain for goods supplied as a 'security'. In cross- examination of CW-1 Vineet Kumar Jain, he did not dispute that he had drawn the said cheque in favour of the complainant on an account maintained by him with a banker. The said cheque was returned unpaid by the banker of the complainant with remark 'PAYMENT STOPPED BY DRAWER' vide memo dated 28.07.2017. The appellant, in examination under Section 313 Cr.P.C., admitted that he had issued the said cheque in favour of the complainant and it was dishonoured on presentation for the reason 'PAYMENT STOPPED BY DRAWER' vide memo dated 28.07.2017 Ex.CW1/4.
21. In Hiten P. Dalal vs. Bratindranath Banerjee, (2001) 6 SCC 16, Hon'ble Apex Court held as under:
"22.....it is obligatory on the court to raise this presumption in every case where the factual basis for the raising of the presumption had been established.
"It introduces an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the accused."Crl. Appeal No. 138/2021 Yogesh Sharma vs. State & Anr. Page No. 12/26
Such a presumption is a presumption of law, as distinguished from a presumption of fact which describes provisions by which the court "may presume" a certain state of affairs....."
22. In Rangappa vs. Sri Mohan, (2010) 11 SCC 441, Hon'ble Apex Court considered the contention that presumption mandated by Section 139 NI Act does not include existence of a legally enforceable debt or liability, as under:
"26. In light of these extracts, we are in agreement with the respondent claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat may not be correct....."
23. As the appellant admitted that he issued the said cheque in favour of the complainant and the said cheque bears his signature, statutory presumption under Section 118 (a) and 139 NI Act must be drawn against the appellant that he had drawn the said cheque in favour of the complainant for consideration and in discharge of an existing legally enforceable debt or liability.
(b) What is the effect of statutory presumption under Section 118 (a) and 139 NI Act?
24. Once "reverse onus" clauses become operative, obligation to discharge presumption is shifted upon the appellant. The appellant is required to raise a probable defence and standard of proof is 'preponderance of probability'. He can lead direct evidence or rely upon evidence adduced by the complainant to show that consideration or debt did not exist or non-existence of consideration or debt is probable.
Crl. Appeal No. 138/2021 Yogesh Sharma vs. State & Anr. Page No. 13/2625. In Rangappa vs. Sri Mohan (supra), Hon'ble Supreme Court of India held as under:
"27. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the defendant-accused cannot be expected to discharge an unduly high standard or proof."
26. In Kalamani Tex and Another vs. P. Balasubramanian, (2021) 5 SCC 283, Hon'ble Supreme Court of India held as under:
"13.....The statute mandates that once the signature(s) of an accused on the cheque / negotiable instrument are established, then these "reverse onus"
clauses become operative. In such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him....."
(c) What is the mode of rebuttal of statutory presumption under Section 118 (a) and 139 NI Act?
27. In Rangappa vs. Sri Mohan (supra), Hon'ble Supreme Court of India held that the appellant can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the appellant may not need to adduce evidence.
Crl. Appeal No. 138/2021 Yogesh Sharma vs. State & Anr. Page No. 14/2628. In Kishan Rao vs. Shankargouda, (2018) 8 SCC 165, Hon'ble Supreme Court of India held that the accused may lead evidence to dislodge the presumption, but mere denial of existence of debt is not sufficient, as under:
"20. This Court held that the accused may adduce evidence to rebut the presumption, but mere denial regarding existence of debt shall not serve any purpose.
29. In Kumar Exports vs. Sharma Carpets, (2009) 2 SCC 513, Hon'ble Supreme Court of India held as under:
"20. The accused in a trial under Section 138 of the Act has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case the non- existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not insist in every case that the accused should disprove the non-existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non-existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist....."Crl. Appeal No. 138/2021 Yogesh Sharma vs. State & Anr. Page No. 15/26
(d) Whether the appellant is able to raise a probable defence?
30. The first and foremost contention of Ld. Counsel for the appellant is that the said cheque was issued as a 'security' for supply of goods.
31. In Sripati Singh vs. The State of Jharkhand & Anr., 2021 SCC OnLine SC 1002, Hon'ble Supreme Court of India held as under:
"16. A cheque issued as security pursuant to a financial transaction cannot be considered as a worthless piece of paper under every circumstance. 'Security' in its true sense is the state of being safe and the security given for a loan is something given as a pledge of payment. It is given, deposited or pledged to make certain the fulfilment of an obligation to which the parties to the transaction are bound. If in a transaction, a loan is advanced and the borrower agrees to repay the amount in a specified timeframe and issues a cheque as security to secure such repayment; if the loan amount is not repaid in any other form before the due date or if there is no other understanding or agreement between the parties to defer the payment of amount, the cheque which is issued as security would mature for presentation and the drawee of the cheque would be entitled to present the same. On such presentation, if the same is dishonoured, the consequences contemplated under Section 138 and the other provisions of N.I. Act would flow."
32. In V.S. Yadav vs. Reena, 2010 (172) DLT 561, Hon'ble High Court of Delhi held as under:
"Mere pleading not guilty and stating that the cheques were issued as security, would not give amount to rebutting the presumption raised U/s 139 NI Act. If mere statement U/s 313 Cr.P.C. or U/s 281 Cr.P.C. of accused of pleading not guilty was sufficient to rebut the entire evidence produced by the complainant / prosecution, then every accused has to be acquitted.Crl. Appeal No. 138/2021 Yogesh Sharma vs. State & Anr. Page No. 16/26
But, it is not the law. In order to rebut the presumption U/s 139 NI Act, the accused, by cogent evidence has to prove the circumstance under which cheques were issued. It was for the accused to prove if no loan was taken why he did not write a letter to complainant for return of the cheque. Unless the accused had proved that he acted like a normal businessman / prudent person entering into a contract, he could not have rebutted the presumption U/s 138 NI Act. If no loan was given, but cheques 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. Nothing was proved in this case."
33. Therefore, prosecution under Section 138 NI Act is maintainable on dishonour of a cheque issued as a 'security'. The issue before the Court is whether there was a crystallized liability in favour of the complainant and against the appellant on the date of presentation of the said cheque.
34. In the present case, the said cheque was not issued as a 'security' for supply of goods. In fact, the said cheque was issued after the goods were supplied to the appellant. The appellant, in reply to substance of accusations explained under Section 251 Cr.P.C., stated that the cheque in question was provided to Mr. Vineet Kumar Jain for 'goods supplied' as a 'security'. It is the case of the appellant that he paid an amount of Rs. 80,000/- to Mr. Vineet Kumar Jain and he could not make payment of balance amount due to demonetization and further, Mr. Vineet Kumar Jain did not receive back defective goods despite assurance. Therefore, there was a crystallized liability on the date of presentation of the said cheque.
Crl. Appeal No. 138/2021 Yogesh Sharma vs. State & Anr. Page No. 17/2635. Ld. Counsel for the appellant contended that the complainant misused the said cheque. This Court does not find any merit in his contention. This is the precise defence of the appellant, in response to substance of accusations under Section 251 Cr.P.C., that the cheque in question was provided to CW-1 Vineet Kumar Jain for 'goods supplied' as a 'security'. He did not state that he had not received goods or the said cheque was issued for supply of goods. He did not dispute the amount of goods supplied. His defence was that he made payment of 'goods supplied' and paid Rs. 80,000/- to CW-1 Vineet Kumar Jain. He stated that he could not make payment of balance amount due to demonetization. He stated that there were some defective goods and he had asked CW-1 Vineet Kumar Jain to receive the said goods back and he assured him in that regard. The appellant did not state the quantum of defective goods. He did not state value of defective goods. He never asked the complainant to return the said cheque. In cross-examination of CW-1 Vineet Kumar Jain, the appellant did not confront him with his case pleaded in response to substance of accusations under Section 251 Cr.P.C. He cross- examined CW-1 Vineet Kumar Jain on his association with his father in his business. He cross-examined CW-1 Vineet Kumar Jain on issue of acknowledgement on bills Ex.CW1/1A (colly.). He cross-examined CW-1 Vineet Kumar Jain on reflection of transaction in ITRs for assessment year 2015-16 and 2016-17 Ex.CW1/D1 and Ex.CW1/D2 respectively.
Crl. Appeal No. 138/2021 Yogesh Sharma vs. State & Anr. Page No. 18/2636. The appellant, in examination under Section 313 Cr.P.C., changed his stand and stated that he had issued the said cheque as 'security' for supply of papers and that he had purchased the papers from the complainant once for an amount of Rs. 60,000/- to 70,000/- which he paid by way of cash. The defence of the appellant is inconsistent, general and without material particulars.
37. As discussed above, there is sufficient material that the complainant had supplied goods to the appellant worth Rs. 1,98,629/- vide bills Ex.CW1/1A (colly.) and he had issued the said cheque towards repayment of the said amount. The complainant has not misused the said cheque.
38. Ld. Counsel for the appellant contended that the trial Court did not consider evidence of the appellant. It is pertinent to note that the appellant has not led any evidence. The appellant, vide statement dated 14.11.2019, stated before the trial Court that he did not wish to lead defence evidence. Therefore, there was no occasion for the trial Court to consider evidence of the appellant.
39. Ld. Counsel for the appellant contended that the said cheque did not bear 'the name of payee' and 'date' and therefore, it was not a negotiable instrument under Section 5 and 6 NI Act. It is not the case of the appellant in response to substance of accusations under Section 251 Cr.P.C., cross- examination of CW-1 Vineet Kumar Jain or examination under Section 313 Cr.P.C. that he had issued a blank cheque.
Crl. Appeal No. 138/2021 Yogesh Sharma vs. State & Anr. Page No. 19/2640. Moreover, in Bir Singh vs. Mukesh Kumar, (2019) 4 SCC 197, as under:
"36. Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt."
41. As regards contention of the appellant that the complainant has not produced original bills, statement of account and Income Tax Return (ITR) reflecting transactions in question, it can be stated that the appellant did not dispute receipt of goods vide bills Ex.CW1/1A (colly.). His defence was that the said cheque was issued to CW-1 Vineet Kumar Jain for goods supplied as a 'security'. In cross-examination of CW-1 Vineet Kumar Jain, the appellant questioned him on acknowledgement of the said bills. He replied that when the parties used to tender cheque, they did not insist for signature of the party on the bills. There is no suggestion that the complainant did not supply goods, as mentioned in bills Ex.CW1/1A (colly.). The appellant did not challenge authenticity, credibility or accuracy of bills Ex.CW1/1A (colly.). Non-production of statement of account is not material as the appellant has not stated particulars of the payment made by him, if any, to the complainant. His stand regarding payment of bills Ex.CW1/1A (colly.) is inconsistent. Absence of transactions in ITRs is a matter between the appellant and Income Tax Department. It has no relevance to transactions in question.
Crl. Appeal No. 138/2021 Yogesh Sharma vs. State & Anr. Page No. 20/2642. Ld. Counsel for the appellant contended that the appellant was not served with the demand notice. The complainant sent demand notice dated 05.08.2017 Ex.CW1/5 to the appellant through Regd. AD posts Ex.CW1/6 (colly.). In response to substance of accusations under Section 251 Cr.P.C. explained to the appellant, he did not dispute receipt of demand notice dated 05.08.2017. In cross-examination of CW-1 Vineet Kumar Jain, the appellant did not dispute receipt of demand notice dated 05.08.2017 Ex.CW1/5. In examination under Section 313 Cr.P.C., the appellant stated that he did not receive demand notice. He stated that he left the address, as mentioned in demand notice, as he was a tenant there. Perusal of demand notice would show that the demand notice was sent to the appellant at his four addresses. The appellant did not state which of the addresses was left by him. Regd. AD post Ex.CW1/7 addressed to the appellant at 'C-15, Chander Nagar, near Govindpura, Opp. Shah Namkeen, Delhi-110051' was returned with remark 'no such person at such address'. Regd. AD post Ex.CW1/8 addressed to the appellant at 'District Dhaulpur, Mohalla Kharara, Agra, U.P.' was returned with report 'addressee not available'. Regd. AD post Ex.CW1/9 addressed to the appellant at '303-306, Ground Floor, Laxmi Market, Kucha Meer Ashique, Delhi-110006' was returned with report that 'addressee not found despite several visits' and Regd. AD post Ex.CW1/10 addressed to the appellant at 'B-17/19, Old Govindpura, Delhi-110051' was returned with report 'refused'.
Crl. Appeal No. 138/2021 Yogesh Sharma vs. State & Anr. Page No. 21/2643. It may be relevant to note that the appellant has mentioned his addresses as 'C-15, Chander Nagar, near Govindpura, Opp. Shah Namkeen, Delhi-110051' and '303-306, Ground Floor, Laxmi Market, Kucha Meer Ashique, Delhi- 110006' in the appeal and in affidavit in support of the appeal. Therefore, the appellant cannot contend that the demand notice was sent at 'incorrect addresses'.
44. Moreover, in C.C. Alavi Haji vs. Palapetty Muhammed and Another, (2007) 6 SCC 555, Hon'ble Supreme Court of India held as under:
"17. 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 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 complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the 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....."
45. As noted above, the complainant sent demand notices to four addresses of the appellant. Demand notice addressed to the appellant at '303-306, Ground Floor, Laxmi Market, Kucha Meer Ashique, Delhi-110006' was returned with Crl. Appeal No. 138/2021 Yogesh Sharma vs. State & Anr. Page No. 22/26 report 'addressee not found despite several visits' and demand notice addressed to the appellant at 'B-17/19, Old Govindpura, Delhi-110051' was returned with report 'refused'. The appellant was served with the summons and a copy of the complaint at 'C-15, Chander Nagar, near Govindpura, Opp. Shah Namkeen, Delhi-110051' on 20.03.2018. There is sufficient material that the complainant sent demand notices to the appellant at his correct addresses. The appellant avoided the said demand notices. He did not make payment of the cheque amount within 15 days from the date of service of summons and a copy of the complaint on 20.03.2018. Therefore, the complainant had complied with requirements of Section 138 NI Act.
46. The appellant failed to raise any probable defence to rebut presumption of existence of a legally enforceable debt or liability.
47. The complainant presented the said cheque for encashment within its period of validity. The said cheque was returned unpaid by the banker of the appellant with remark 'PAYMENT STOPPED BY DRAWER' vide memo dated 28.07.2017 Ex.CW1/4. The complainant sent demand notice Ex.CW1/5 within prescribed period. The appellant avoided demand notice vide Regd. envelope Ex.CW1/9 and refused to demand notice on 08.08.2017 vide Ex.CW1/10. The appellant failed to make payment of the cheque amount within prescribed period from the date of deemed service of demand notice upon him on 08.08.2017. The complaint was within limitation.
Crl. Appeal No. 138/2021 Yogesh Sharma vs. State & Anr. Page No. 23/2648. The complaint established all pre-requisites as required under Section 138 NI Act.
49. The appellant was rightly convicted for committing offence under Section 138 NI Act.
50. There is no manifest error of law or procedure or perversity in the impugned judgment.
51. In Kalamani Tex & Anr. vs. P. Balasubramanian (supra), Hon'ble Supreme Court of India held as under:
"19.....It is also well settled that there needs to be a consistent approach towards awarding compensation and unless there exist special circumstances, the courts should uniformly levy fine up to twice the cheque amount along with simple interest @ 9% p.a."
52. The trial Court has already taken lenient view and imposed one month simple imprisonment and awarded compensation in the sum of Rs. 2,65,667/- in view of the aforesaid judgment of Hon'ble Supreme Court of India. Therefore, order on sentence does not require any interference.
53. Accordingly, the appeal filed by the appellant challenging conviction under Section 138 NI Act as well as order on sentence is dismissed. The appellant is directed to surrender before the trial Court. If he does not surrender, the trial Court is directed to take steps for enforcement of order on sentence. A copy of judgment alongwith trial Court record be sent to trial Court.
Crl. Appeal No. 138/2021 Yogesh Sharma vs. State & Anr. Page No. 24/2654. Appeal file be consigned to record room.
Digitally signedSANJAY by SANJAY SHARMA SHARMA Date: 2022.04.29 11:33:49 +0530 Announced in the open Court SANJAY SHARMA-II on this 28th April, 2022 Addl. Sessions Judge-03 (Central) Tis Hazari Courts, Delhi Crl. Appeal No. 138/2021 Yogesh Sharma vs. State & Anr. Page No. 25/26 Yogesh Sharma vs. State & Anr. CNR No.: DLCT010175012021 Crl. Appeal No. 138/2021 28.04.2022 Present : Mr. Avneesh Mishra, Advocate for the appellant (through Video Conferencing).
Mr. Himanshu Verma, Advocate for LRs of the deceased respondent No. 2 / the complainant.
Vide separate judgment, the appeal filed by the appellant challenging conviction under Section 138 NI Act as well as order on sentence is dismissed. Appeal file be consigned to record room. Digitally signed SANJAY by SANJAY SHARMA SHARMA Date: 2022.04.29 11:34:07 +0530 Sanjay SharmaII ASJ03, Central District, Tis Hazari Courts, Delhi 28.04.2022 Crl. Appeal No. 138/2021 Yogesh Sharma vs. State & Anr. Page No. 26/26