Delhi District Court
In Re: Paramjeet vs . Rajesh Phalswal on 18 April, 2023
IN THE COURT OF SH. SHASHANK NANDAN BHATT,
MM, NI ACT-06, SOUTH WEST, DWARKA, DELHI
IN RE: PARAMJEET VS. RAJESH PHALSWAL
CC No. 24517/2017
CNR No. DLSW02-034256-2017
Paramjeet
S/o Sh. Rampal Joon
R/o 16, Maksudabad Colony,
Najafgarh, New Delhi-110043 ........Complainant
Versus
Rajesh Phalswal @ Raju
S/o Sh. Om Prakash Phalaswal
R/o 7/9, Glat No. 3, First Floor, Amar Apartment,
Kishangarh,
Near Gaushala,
Vasant Kunj,
New Delhi-110070 .........Accused
DATE OF INSTITUTION : 01.12.2017
OFFENCE COMPLAINED OF : U/s 138 N I
Act
DATE OF JUDGMENT : 18.04.2023
DECISION : Convicted
JUDGMENT
1. The instant matter has originated out of a complaint under section 200 CrPC read with Section 138 Negotiable Instruments Act (hereinafter referred to as the 'N I Act'), filed by the complainant against the accused alleging that cheques bearing no. 750123, 750124 and 750125, all dated 07.10.2017, all drawn on Axis Bank Ltd., amounting to Rs. 9,00,000/-, Rs. 9,00,000/- and Rs. 9,00,000/- (Total Rs. Twenty Seven Lakhs only/-), issued by the accused in favour of the complainant, in discharge of a legal debt or other liability, has been dishonoured and the accused has not paid the said amount even after receiving the prescribed legal demand notice. By virtue of this judgment, the present complaint is being disposed of.
Brief Facts of the case
PARAMJEET VS. RAJESH PHALSWAL Page 1 of 20
CC No. 24517/2017 Judgment
2. The case of the complainant, in brief, is that he shared friendly relations with the accused and in March 2013, the accused approached him for a financial help of Rs. 27 lakhs. Considering the friendly relations that the complainant shared with the accused, he advanced a sum of Rs. 27 lakhs to the accused, under an assurance that the said sum shall be returned by the accused to him, within a period of 3 / 4 years. The complainant gave Rs. 7 lakhs and Rs. 20 lakhs, in cash, to the accused on 07.03.2013 and 08.04.2013, respectively. In lieu of his liability, the accused handed over three post dates cheques (the details of which are mentioned in paragraph no. 1 of the judgment), to the complainant. The complainant presented the said cheques for encashment in his bank, but the same got dishonored with the reason funds insufficient / drawer's signatures differ, vide return memorandums dated 10.10.2017, 31.10.2017 & 31.10.2017, respectively. The complainant immediately notified the accused regarding the bouncing of the said cheques but, the accused refused to repay the loan amount. The complainant sent three separate legal notices, each dated 03.11.2017, via speed post to the accused, asking him to make the payment. Despite delivery of the said legal notices, the accused failed to make the payment even after expiry of the prescribed period. Being aggrieved with the above facts and circumstances, the present complaint was instituted by the complainant.
3. Pursuant to the institution of the present complaint, summons were issued qua the accused. Upon the appearance of the accused, notice u/s 251 Cr.PC was framed against the accused vide order dated 21.02.2018, to which the accused pleaded not guilty and claimed trial. In the defence recorded u/s 251 Cr.P.C. on the same date, the accused stated that he shared friendly relations with the complainant and worked with him in property dealing business. He further stated that he had never taken any loan from the complainant. He further added that some of his signed cheques and blank signed cheques PARAMJEET VS. RAJESH PHALSWAL Page 2 of 20 CC No. 24517/2017 Judgment were misplaced from his office and complainant might have taken the said cheques. He had also issued stop payment instructions to his bank. The cheques in question are the same misplaced cheques. He also stated that he has filled the amount in numerics and words on the cheque, but the name of the payee and the date are not in his handwriting. He used to keep the said cheques for making payment for purchasing property. He also stated that he has not received any legal demand notice pertaining to the present case and that the complainant has misused the cheques in question.
4. In support of his case, the complainant -Paramjeet has examined himself as CW-1 and presented the following documents:-
(i) The original cheques as Ex.CW-1/A Colly;
(ii) The bank statement of the complainant as Ex.CW-1/B colly;
(iii) The original return memorandums as Ex.CW1/C to Ex.CW1/E;
(iv) Legal demand notice as Ex.CW1/F;
(v) Postal receipt as Ex.CW1/G colly;
(vi) Tracking Report along with certificate u/s 65-B of Indian
Evidence Act as Ex.CW1/H(colly).
5. During his examination in chief, complainant - Paramjeet (CW-1) has reiterated the contents of his complaint. He was duly cross examined by the Ld. Counsel for the accused and in his cross examination dated 21.12.2018, he stated that he has studied till XII standard and does construction business since 2013. He stated that he knows the accused since 1999 as the accused studied with his brother in Vasant Kunj. The witness further added that he does not remember the date on which the accused approached him for loan, but he approached him 2-3 days, prior to advacement of the loan. He also added that he had granted some small loans to the accused(Rs. 1 lakh to Rs. 1.5 lakhs), previously as well, which had been returned by the accused.
6. The witness Paramjeet (CW-1) further stated that the loan in question, amounting to Rs. 27 lakhs, was granted by him to the accused in March- April 2013. The said amount was advanced by PARAMJEET VS. RAJESH PHALSWAL Page 3 of 20 CC No. 24517/2017 Judgment him partly by withdrawing from his bank and partly from his savings kept at home. No written document was executed between him and the accused qua the loan transaction. He withdrew Rs. 7 lakhs from his bank account on 07.03.2013 and Rs. 17 lakhs on 08.04.2013. He does not remember whether he advanced any loan to Baljeet in March 2013 but after being confronted with his bank statement (Ex.CW1/B), he admitted that he had transferred a sum of Rs. 7.5 lakhs to Baljeet on 08.03.2013. He further clarified that the said payment was made to Baljeet, upon the request of his brother, who had to make payment to some other person through Baljeet, but, he does not remember the name of the said person. He denied the suggestion that he had purchased some property from Baljeet, for which he had paid him an amount of Rs. 7.5 lakhs and further withdrawn the amount (7 lakhs and 17 lakhs) from his bank account, as reflected in his account statement, for payment of earnest money/ consideration.
7. The witness Paramjeet (CW-1) also stated that the alleged loan was given by him to the accused for a period of 3 to 4 years. He has been filing ITR since the year 2016 but has not shown the loan granted by him to the accused, in his ITR. The cheques in question were given by the accused to him in his house in the year 2013, after filling the same, except the date and the name of the payee. After taking loan from him, the accused had taken a further loan of Rs. 16 lakhs from his brother in law - Sandeep Singh Chahar, in May 2013 and the accused gave him two cheques, in lieu of the same. In the case pertaining to the said cheques, in Bahadurgarh courts, he is the SPA Holder, as his brother in law is in Merchant Navy. He admitted that he had received the sum of Rs. 24 lakhs, through cheque, on 04.03.2013, as he had sold a plot. He also stated that he has not advanced loan to anyone except the accused, in the year 2013. He further stated that he transferred Rs. 4 lakhs to Sukhdev, a property dealer, on 03.04.2013 and Rs. 5 lakhs to his wife - Smriti, via cheque, as shown in his account statement (Ex.CW1/B).
PARAMJEET VS. RAJESH PHALSWAL Page 4 of 20CC No. 24517/2017 Judgment
8. The witness-Paramjeet (CW-1) further admitted that most of the transactions shown in his statement/ passbook, are through cheques. He denied the suggestion that the cheques in question (750124 & 750125) were fraudulently signed by him (not the accused) and that is why they were dishonored with the reason 'drawer's signatures differ'. He denied the suggestion that he worked with the accused as a property dealer and he has misused the lost cheques of the accused. He denied the suggestion that the accused has lodged complaint qua the lost cheques (Ex.CW1/A) and he had accompanied the accused, at the time of filing of the said complaint, along with his brother in law- Kapil. He also denied the suggestion that he and Kapil accompanied the accused when he visited the police station for obtaining the DD Number qua the complaint pertaining to lost cheques and when the same could not be traced, he started misusing the cheques of the accused. He denied the suggestion that he did not execute any written document or file any ITR with respect to the loan as his entire case is false. He denied the suggestion that the cash withdrawals, shown in his bank account statement have no relation with the accused.
9. In his statements recorded u/s 313 Cr.PC, the accused stated that he never issued cheques in favor of the complainant. He had kept some(10-12) blank signed cheques, in his car, which got lost. He had also lodged a complaint regarding the loss of said cheques at PS Mehrauli and can produce the same, as and when required. He further stated that complainant is his friend and earlier, they both used to take some amount (Rs. 1 to 2 lakhs), from each other, and used to return the same, but he never took such a huge amount (Rs. 27 lakhs) from the complainant. He added that he owes no liability to the complainant and the complainant has misused the cheques in question. He further admitted that he had received the legal demand notice and signed the cheques in question. He also stated that the PARAMJEET VS. RAJESH PHALSWAL Page 5 of 20 CC No. 24517/2017 Judgment particulars over the cheques in question, including the name and date of payee, were not filled by him.
10. The accused chose to lead defence evidence in the present matter and produced himself as a witness. In his examination in chief, accused Rajesh Phaswal (DW-1) stated that he runs a pharmacy store and in order to earn some extra money, he, his brother in law and the complainant, dealt in sale / purchase of second hand cars. He used to keep some blank cheques in his office in order to give the same as a security, to the persons selling their cars. He usually used to keep his identity card, cheque book and other documents, in a bag which got misplaced, somewhere in the year 2014 and he also lodged an FIR in this regard. A copy of the said FIR got misplaced from his house. He further stated that after some time, his relations with the complainant turned sour and finally in the year 2019, he got to know that the complainant had instituted a case against him. He added that he does not owe any liability to the complainant. He also placed reliance on the testimony of the complainant in cases bearing CC No. 326/18, 27/18, in the court of Ld. Judicial Magistrate, Bahadurgarh, District Jhajjar (Ex.DW1/A, Ex.DW1/B) and the copy of NCR dated 18.10.2014 (Mark A).
11. The witness was duly cross examined by the Ld. counsel for the complainant and in his cross examination, he stated that he knows the complainant since a long time. He denied the suggestion that he had previously taken a loan from the complainant and upon being confronted by his statements recorded u/s 313 of Cr.PC, he clarified that he and the complainant used to take money from each other, time and again. He admitted that the transactions used to take place in cash. He denied the suggestion that he approached the complainant for a loan of Rs. 27 lakhs, in March 2013 and further denied taking Rs. 7 lakhs from him on 07.03.2013 and Rs. 20 lakhs from him on 08.03.2013(08.04.2013, as per the complaint). Upon being confronted by his statement u/s 313 Cr.PC regarding his PARAMJEET VS. RAJESH PHALSWAL Page 6 of 20 CC No. 24517/2017 Judgment signatures on the cheque in question, the witness stated that his statement recorded u/s 313 of Cr.PC is incorrect and he did not sign the cheques in question. He further clarified that he used to keep the cheques in question in his car as well as the office and he does not know the exact place from where the cheques were stolen. He also stated that many of his cheques were stolen, some of which were signed and some were unsigned, but, he does not remember the series of the said cheques. He denied the suggestion that he has not lodged any FIR, against the complainant.
12. In his cross examination dated 11.07.2022, the witness (DW-1)/ Rajesh Phalswal, admitted that on 21.08.2021, he had visited the office of the complainant. But, denied the suggestion that he had promised the complainant that he will repay Rs. 31.5 lakhs to the complainant. The cross examination of the witness was deferred for production of his bank account statement. On 28.11.2022, the witness produced statement of his bank account bearing no. 910010039792160 from 01.01.2011 to 31.12.2011 (Ex.DW1/C). the witness denied the suggestion that he did not lose any cheques and the same have been duly reflected in Ex.DW1/C.
13. Kapil Shokeen/ DW-2 deposed that he knows the complainant- Paramjeet who is the friend of his brother in law- Rajesh Phalswal. They both had various transactions pertaining to business of sale/purchase of car. In 2014, the accused lost one of his bags, which contained his signed cheque books etc and in this regard, he also lodged an FIR. The witness further stated that he recently came to know that the complainant has instituted a case against him. In the year 2016, the accused told him and the complainant that he could not trace the copy of the FIR which he had lodged. The witness further stated that in his opinion, complainant- Paramjeet has misused the cheques in question after coming to know of the said fact.
PARAMJEET VS. RAJESH PHALSWAL Page 7 of 20CC No. 24517/2017 Judgment
14. During his cross examination, the witness - Kapil/ DW-2 stated that he used to run a business of sale/ purchase of car since the year 2007-2008 and knows the complainant since the year 2004. He denied the suggestion that accused never worked with the complainant and stated that their office was situated opposite to Mehrauli Gaushala. He added that he does not have any documentary evidence to show that the complainant was running the said business with the accused. He denied the suggestion that no such office ever existed and therefore, he is unable to produce any documentary evidence in this regard. He further stated that he came to know about the loss of the bag containing the cheque book on the same day when the bag was lost at Mehrauli Market. At that time, he and the complainant were accompanying the accused and thereafter, a complaint was made at a cyber cafe. He further stated that he is not aware of the number of cheques which the said bag contained. He came to know of the present case in the year 2017-18. He denied the suggestion that he is deposing falsely and that he has no personal knowledge of the present case.
15. Thereafter, the matter was listed for final arguments. During the course of arguments, it was argued by the Ld. Counsel for the complainant that the accused has failed to rebut his signatures on the cheque in question and the presumptions under 118(a)/139 N I Act are attracted. He further stated that in view of several judgments, it is now a settled position that even if the signatures are not admitted by the accused, presumptions u/s 118(a) and 139 of the N I Act, have to be raised by the court. He also argued that the accused has raised a false defence regarding the cheques in question being lost and subsequently, being misused by the complainant as he has not led any credible evidence to this effect. It has thus been prayed that the accused be convicted.
16. Per contra, Ld. counsel for the accused has argued that cheques in question were lost from the possession of the accused and have PARAMJEET VS. RAJESH PHALSWAL Page 8 of 20 CC No. 24517/2017 Judgment deliberately been misused by the complainant, once he came to know that the accused has no proofs regarding the fact that the said cheques have been lost. He further argued that the cheques in question do not bear the signatures of the accused and have been manipulated by the complainant. He further submitted that the entries mentioned in the bank account statement of the complainant pertaining to payments regarding properties that were sold by the complainant to one Baljeet. He also argued that the complainant did not file the ITRs at the time of advancement of the alleged loan and his entire case is false and fabricated. It has thus been prayed that the accused be acquitted in the instant case.
Findings of the Court-
17. Before delving into the facts of the case, it is apposite to bear in mind the law with respect to section 138, Negotiable Instrument Act. In order to prove his case under section 138 N I Act, the complainant must prove the following facts-
i) The accused issued a cheque on a bank account maintained by him;
ii) The said cheque must have been issued, wholly or partly, in discharge of a 'legal debt or other liability' ;
iii) The said cheque was presented before the bank within 3 months from the date of issuance and was dishonoured;
iv) The payee issued a legal demand notice, within 30 days of receipt of information of dishonour of the cheque;
v) The drawer failed to make payment within 15 days of receipt of the said legal demand notice.
18. Further, the NI Act raises two important legal presumptions in favour of the holder of the cheque as soon as the execution of cheque is proved. As per Section 118(a), NI Act, it shall be presumed that PARAMJEET VS. RAJESH PHALSWAL Page 9 of 20 CC No. 24517/2017 Judgment every negotiable instrument was 'made, accepted, transferred, negotiated or endorsed for consideration, unless the contrary is proved'. Furthermore, as per section 139, NI Act, it shall be presumed that 'the holder of cheque, received the cheque for the discharge, in whole or in part, of any debt or other liability, unless the contrary is proved.'
19. The principles with respect to above mentioned presumptions, have been succinctly laid down in Para 25 of the judgment by Hon'ble apex court in Basalingappa v. Mudibasappa (2019) 5 SCC 418, which lays down as under-
" 25.1. 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.
25.2. 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.
25.3. To rebut the presumption, it is open for the accused to rely on evidence led by him or the 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.
25.4. That it is not necessary for the accused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden."
20. In the present matter, the case of the complainant is that he advanced a friendly loan of Rs. 27 lakhs to the accused and the cheques in question were given by the accused to the complainant in order to repay the said loan. On the other hand, the defence taken by the accused is mainly four fold- 1) The cheques in question were not PARAMJEET VS. RAJESH PHALSWAL Page 10 of 20 CC No. 24517/2017 Judgment signed by the accused and the complainant has fabricated them. , 2) The legal demand notices pertaining to the cheques in question, were never received by him and no cause of action can be said to have arisen. 3) The complainant has failed to explain his financial capacity and the sources of his funds and 4) the cheques in question were stolen/ lost from the possession of the accused and the complainant has misused the same.
21. In order to effectively decide the present case, the following points of determination have to be considered:-
1)Whether the presumptions u/s 118(a) / 139 of the N I Act can be raised against the accused, in the present matter, in view of the fact that he has challenged the correctness of the signatures on the cheques in question?;
2) Whether the accused can be given the benefit of the defence of non receipt of the legal demand notice?;
3) Whether the complainant has failed to explain his financial capacity/ sources of his funds to advance the alleged loan of Rs. 27 lakhs?;
4) Whether the cheques in question were lost from the possession of the accused and have consequently been misused by the complainant?
POINT OF DETERMINATION NO. 1.
22. During the course of final arguments, the Ld. counsel for the accused vehemently argued that the signatures of the accused have been forged on the cheques in question and as such, the presumptions u/s 118(a) / 139 of the N I Act cannot be raised in the present matter. The Ld. counsel for the accused has drawn the attention of this court towards the fact that out of the three cheques in question, two cheques were dishonored with the reason 'Drawer's signatures Differs'. On the contrary, the Ld. counsel for the complainant has submitted that the accused has, at various stages of trial, directly and indirectly admitted his signatures on the cheques in PARAMJEET VS. RAJESH PHALSWAL Page 11 of 20 CC No. 24517/2017 Judgment question. He has further submitted that even otherwise, by placing reliance on the judgment of the Hon'ble High Court of Karnataka in Dinesh Harakchand Sankla Vs. Kurlon Limited., presumptions u/s 118(a) / 139 of the N I Act have been raised even when the cheque is dishonored with the reason of 'Drawer's Signatures Differs'.
23. Upon a careful scrutiny of the record in light of the above submissions, it emerges that out of the three cheques in question, two cheques were dishonored for the reason 'Drawers Signatures Differs'. At the stage of framing of notice, the accused stated that some of his blank signed cheques and some of his unsigned cheques were misplaced and the complainant might have taken them. At the stage of cross examination of the complainant, the Ld. counsel for the accused, did not put any suggestion to him regarding the fact that the cheques in question were not signed by the accused. Thereafter, at the stage of recording of statement of the accused u/s 313 of Cr.PC, the accused categorically admitted (in his answer to question no. 5) that the cheque(s) in question was signed by him. Contrary to the above versions, at the stage of defence evidence, upon being confronted with his statements u/s 313 of Cr.PC., the accused stated that the cheques in question were not signed by him.
24. In view of the above discussion, it is sufficiently clear that the accused has given varying versions, at various stages of trial, with respect to signing the cheques in question. As discussed hereinabove, at the stage of recording of statement u/s 313 Cr.P.C, the accused admitted that the cheque(s) in question bear his signature and at the stage of framing of notice or cross examination of the complainant, the accused did not challenge the genuineness of the signatures on the cheques in question even once. Furthermore, throughout the trial, the accused neither filed any application to get the signatures verified by an expert, nor did he summon the bank records, in order to establish that he did not affix his signatures on the cheques in question. In light of the above facts, it appears that the accused, at the stage of defence evidence, made a belated attempt to take advantage of the fact that two of the cheques in question were PARAMJEET VS. RAJESH PHALSWAL Page 12 of 20 CC No. 24517/2017 Judgment dishonored with the reason 'Drawer's Signatures Differs', in order to create a false defence in his favour.
25. At this stage, it is also pertinent to note that u/s 73 of the Indian Evidence Act, this court is vested with the powers of comparing the disputed signatures of a person with his admitted signatures, in order to ascertain the genuineness of the signatures. In the present case, the signatures of the accused on the notice framed u/s 251 of Cr.PC, in his deposition sheet and in his statements recorded u/s 313 of Cr.PC, correspond with the signatures on the cheques in question and in the considered opinion of this court, it appears that the accused has signed the cheques in question. As discussed hereinabove, the said fact is further corroborated by the fact that the accused himself admitted his signatures on the cheques in question at the stage of recording of statement u/s 313 of Cr.PC, which although, not an evidence in the strict sense, can nonetheless be used by the court in filling the gaps in evidences led by the parties. Moreover, there is nothing on record that goes on to show that the accused made any prompt complaints regarding the complainant, as and when he came to know that the complainant had played a fraud upon him. Thus, the signatures on the cheuqes in question appear to be that of the accused and the presumptions u/s 118(a) / 139 of the N I Act are attracted to the present case.
26. Before parting with this discussion, it is also pertinent to note that this court humbly bows down to the law laid down by the Hon'ble Karnataka High Court in paragraph no. 8 of the judgment of Dinesh Harakchand Sankla Vs. Kurlon Limited (which has been relied upon by the Ld. Counsel for the complainant), as per which, the presumptions u/s 139 of the N I Act can be raised even when the cheque has been dishonored with the reason 'Drawer's Signatures Differs', but the said position cannot be accepted in view of the judgment of Hon'ble Supreme Court in Basalingappa (Supra), wherein it has categorically been held that the presumptions u/s 139 PARAMJEET VS. RAJESH PHALSWAL Page 13 of 20 CC No. 24517/2017 Judgment of the N I Act can only be raised once the execution of the cheque has been admitted (or proved). The Ld. Counsel for the complainant has also relied upon the judgments of Hon'ble Supreme Court in MMTC Vs. Medchl Chemicals, Laxmi Dyechem Vs. State of Gujrat and the judgment of Hon'ble Delhi High Court in Santosh Kumar Gupta Vs. State, in support of his contention. However, a careful scrutiny of the above mentioned judgments, clearly reveal that in the said judgments, it has nowhere been specifically held that presumption u/s 139 of NI Act are attracted even in cases where the cheque is dishonoured for the reason "Drawer's Signatures Differs". Consequently, in light of the ratio laid down by the Hon'ble Apex Court in Basalingappa (Supra), the argument of the Ld. Counsel for the complainant that presumption u/s 139 of the NI Act are attracted even in cases where cheque is dishonoured for the reason 'drawers signature differs' cannot be accepted.
POINT OF DETERMINATION NO. 227. During the course of final arguments, the Ld. counsel for the accused argued vehemently on the aspect that no cause of action can be said to have arisen in the present case as the accused did not receive the legal demand notice. On the contrary, the Ld. counsel for the complainant has submitted that it is evident from the postal receipts and the tracking report (Ex.CW1/G colly and Ex.CW1/H colly) that the accused had received the legal demand notice.
28. Upon examining the record, in view of the above submissions, it emerges that as per the tracking report (Ex.CW1/H colly), the legal demand notices were duly served upon the address of the accused. The accused, either in his testimony at the stage of defence evidence, or at the stage of cross examination of the complainant, did not put forth any suggestion / evidence, in order to dispute the tracking reports (Ex.CW1/H colly) or in order to establish that the address mentioned on the legal demand notices were not his correct PARAMJEET VS. RAJESH PHALSWAL Page 14 of 20 CC No. 24517/2017 Judgment addresses. Consequently, the accused has failed to prove that he did not receive the legal demand notices.
29. At this stage, it is pertinent to mention that even for the sake of argument, if it is assumed that the accused did not receive the legal demand notice, then also the accused cannot claim any benefit of the same, in view of the judgment of Hon'ble apex court in C.C. Alavi Haji v. Palapetty Muhammed (2007) 6 SCC 555. In the said judgment, it has been held by the Hon'ble Apex Court that an accused who has not received the legal demand notice cannot claim the benefit of the defence of non receipt of the same as once summons are served upon him, it is the duty of such an accused to make the payment of the cheque in question within 15 days of receiving summons from the court. Once this option is not availed by him, the benefit of defence of non service of notice cannot be given to the accused. In light of the above legal and factual matrix, in the considered opinion of this court, the accused cannot be given any benefit of the defence of non receipt of the legal demand notice.
POINT OF DETERMINATION NO. 330. The Ld. counsel for the accused vehemently argued that the complainant did not file his ITRs and as such, did not have any financial capacity to advance the loan in question. The law with respect to the question of financial incapacity/ non explanation of sources of funds, in cases pertaining to section 138 of the N I Act, has been succinctly dealt by the Hon'ble Apex Court in a catena of decisions. The Hon'ble Apex court in Basalingappa(Supra), has held that - it is not imperative for the accused to step into the witness box to prove his defence regarding financial incapacity of the complainant and it is the duty of the complainant to prove his financial capacity, once the accused challenges the same. Furthermore, the Hon'ble Apex Court has recently held in P Rasiya v. Abdul Nazir 2022 SCC OnLine SC 2187 that the complainant is PARAMJEET VS. RAJESH PHALSWAL Page 15 of 20 CC No. 24517/2017 Judgment not bound to specifically state the nature of transaction and sources of funds in his complaint. A conjoint reading of the above judgments, makes it amply clear that in cases pertaining to section 138 of the N I Act, initially, the complainant is not expected to specify his sources of funds, in the complaint. However, when the financial capacity or the sources of funds are challenged by the accused, during the course of trial, the complainant is under an obligation to explain his financial capacity and the sources of his funds.
31. In the instant case, in order to establish his financial capacity, the complainant has produced his bank account statements (Ex.CW1/B colly.), as per which, he had withdrawn a sum of Rs. 7,00,000/- on 07.03.2013 and a sum of Rs. 17,00,000/- on 08.04.2013, which adds upto a total of Rs. Rs. 24,00,000/-. During the course of final arguments, upon court query, the complainant has further stated that the remaining amount of Rs. 3,00,000/- was arranged by him from his personal savings, with the cash available at his home. In the considered opinion of this court, the bank statement of the complainant, as per which, a total amount of Rs. 24,00,000/- was withdrawn, during the alleged period in which the loan was advanced, sufficiently proves his financial capacity and the sources of his funds.
32. At this stage, the only question that remains to be answered is whether any adverse inference can be drawn against the complainant in this case on account of the fact that he did not file any ITR during the relevant period. In this regard, the attention of this court goes towards the judgments of Hon'ble Bombay High Court in Krishna P Morajkar Vs. Joe Ferrao 2013 SCC OnLine Bom 862, which has also been relied upon by the Hon'ble Delhi High Court in Barun Kumar Vs. State of NCT. Delhi 2021 SCC OnLine Del 3498, as per which it has been clearly laid down that the mere fact that the loan has not been shown in the ITR, does not in itself, make it PARAMJEET VS. RAJESH PHALSWAL Page 16 of 20 CC No. 24517/2017 Judgment unenforceable. Non mentioning of the loan amount in the ITR is a contravention of the income tax laws which may be dealt with under the provisions of the relevant statutes and the accused in cases u/s 138 of the N I Act, cannot evade his liability, merely because the loan transaction has not been shown in the ITR by the complainant. Consequently, in light of the above discussion, the accused has failed to challenge the financial capacity/ the sources of funds of the complainant.
POINT OF DETERMINATION NO. 433. During the course of the present trial, one of the primary defence that the accused has taken is that the cheques in question were lost from his possession and have consequently been misused by the complainant. The Ld. Counsel for the accused has further submitted during the course of final arguments that the bank transactions that have been relied upon by the complainant were pertaining to payment of a sale of land which the complainant had purchased from one Baljeet.
34. In order to examine the defence of the accused regarding losing the cheque book is concerned, the bank records of the accused have to be carefully examined. Upon scrutiny of the bank statements of the accused
35. As regards the defence of losing the cheque book is concerned, the bank statements of the accused from 01.01.2011 to 31.12.2011 (Ex.DW1/C), it emerges that cheques of the same series of the cheques in question (bearing numbers 750123, 750124 & 750125) i.e. 750122, 750121, 750130 to 750140, have all been encashed. The fact that the cheques belonging to the series to which the cheques in question belong, have been encashed, raises doubts upon the defence of the accused regarding his cheque book being lost. Furthermore, the attention of the court also goes towards the fact that on one hand, as per the accused, his cheques got misplaced from his office PARAMJEET VS. RAJESH PHALSWAL Page 17 of 20 CC No. 24517/2017 Judgment (as per his version at the stage of framing of notice), and on the other hand as per the version of Kapil Shokeen, DW-2, the cheques, which were kept in a bag, were lost by the accused at Mehrauli Market. The abovementioned versions of the accused and his witness, run contrary to each other and raise doubts over the genuineness of the version of the accused. As regards the copy of NCR (Mark A) dated 18.10.2014 is concerned, the same cannot be read in evidence as it is neither an original, nor has it been supported by a certificate under section 65-B of the Indian Evidence Act. Even otherwise, the contents of the said NCR, pertaining to the accused losing his cheque book, are contradicted by the fact that the cheques belonging to the same series have been encashed, as reflected in the bank account statement of the accused (Ex.DW1/C). Moreover, both the defence witnesses (DW-1 and DW-2), stated that upon losing his cheque book, the accused had also lodged an FIR in the year 2014, but the copy of the FIR has not been produced by the accused before this court, which again casts doubts over the veracity of his defence.
36. The Ld. counsel for the accused has also argued that the withdrawal entries reflected in the bank account statement of the complainant (Ex.CW1/B), were made for making payment to one Baljeet, from whom the complainant had purchased a property. In this regard, it is pertinent to mention that in order to prove the alleged transaction between the complainant and Baljeet, the said Baljeet should have been produced as a witness alongwith the relevant documents. During the course of the present trial, the accused neither himself produced the said Baljeet as a witness, nor did he take steps to get him summoned by this court. In such a situation, by taking resort to the illustration (g) appended to section 114 of the Indian Evidence Act, it can very well be presumed that had the said Baljeet(along with the relevant sale deed), appeared in the witness box, his testimony would have been unfavourable to the version of the accused. Consequently, the accused has failed to prove that the PARAMJEET VS. RAJESH PHALSWAL Page 18 of 20 CC No. 24517/2017 Judgment cheques in question were lost from his possession and the same have been misused by the complainant.
37. Before parting with the judgment, it is apposite to mention that in one of the cheques i.e. cheque bearing no. 750125, the amount mentioned in words (9 lakhs) differs from the amount mentioned in numerals(8 lakhs). In this regard, the provisions laid down by section 18 of the Negotiable Instruments Act is relevant which lays down that in case of any discrepancy in the amount mentioned in words and amount mentioned in figures, the amount mentioned in words shall be the amount undertaken or ordered to be paid. In view of the above legal provision the amount mentioned in cheuque bearing no. 750125 shall be read as "9 lakhs" and the accused cannot take any benefit of the fact that the amount mentioned in words differs from the amount mentioned in figures.
38. Lastly, during the course of final arguments, the Ld. Counsel for the accused has relied upon the judgments of Hon'ble Punjab and Haryana High Court in Aditiya Dhillan Vs. Shripal, Darshan Singh Vs. Jaswinder Kaur, Nanak Chand Vs. Laxman Arya, Satpal Singh Vs. Manjeet Singh and Surender Vs. State of Haryana. On the other hand, the Ld. Counsel for the complainant has relied on the Judgments of Hon'ble Supreme Court in HP Dalal Vs. B. Banerjee, K Bhaskaran Vs. S V Balan, Rohit Bhai Jeewan Lal Vs. State of Gujrat, Uttam Ram Vs. Devender Singh, PD Dike Vs. V N Parmar and Laxmi Dycham Vs. State of Gujrat. The Ld. Counsel for the complainant has also relied on the Judgments of Hon'ble Delhi High Court and Karnataka High Court in Ravi Chopra Vs. State, Vijender Singh Vs. Eicher Motors, DH Sankla Vs. Kurlon and Santosh Kumar Gupta Vs. State. This court humbly bows down to the law laid down in the above judgments. The said judgment have been duly considered by this court in appreciating the facts and evidences of the present case.
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39. In the present case, the complainant has throughout the trial, remained firm to his version that he had advanced a loan of Rs. 27 lakhs to the accused. His version is further substantiated from the fact that he has furnished bank entries which shows a withdrawal of Rs. 24 lakhs and proves his financial capacity. The defence of the accused regarding misuse of lost cheques by the complainant appears to be fabricated as cheques of the same series are shown to have been encashed as per his own bank statements. Moreover, by not producing Baljeet as a witness, the accused has failed to prove his defence that the transactions shown in the bank account of the complainant were for making payments to Baljeet by the complainant, in order to purchase a property from him. Consequently, the accused has failed to raise a probable defence and on the contrary the complainant has succeeded in proving his case.
CONCLUSION
40. Thus, on account of above appreciation of facts, evidences and materials on record, this court is of the considered opinion that the complainant has failed to prove his case on the touchstone of 'preponderance of probability'. Consequently, the accused Rajesh Phalswal is convicted under the accusation of committing the offence u/s 138 N I Act.
41. This judgment contains 20 pages. This judgment has been pronounced in open court and each page has been signed.
42. Let a copy of this judgment be given free of cost to the convict.
43. Let a copy of the judgment be uploaded on the official website of District Courts, Dwarka forthwith. Digitally signed SHASHANK by SHASHANK NANDAN NANDAN BHATT ANNOUNCED IN THE OPEN COURT BHATT Date: 2023.04.18 16:02:43 +0530 TODAY i.e. ON 18.04.2023.
(Shashank Nandan Bhatt)
Metropolitan Magistrate (NI Act)-06
South- West, Dwarka
18.04.2023
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CC No. 24517/2017 Judgment