Delhi District Court
M/S Jyoty Raw Phoole Co.Op Society vs . Jaydeep Singh on 28 August, 2023
IN THE COURT OF SH. SNEHIL SHARMA, METROPOLITAN
MAGISTRATE, NI ACT DIGITAL COURT, NORTH EAST DISTRICT,
KARKARDOMA COURT, DELHI.
JUDGMENT
M/S JYOTY RAW PHOOLE CO.OP SOCIETY VS. JAYDEEP SINGH CC NO: 109/2021 P. S. Gokal Puri U/s 138 NI Act a CNR No. of the case : DLNE020008072021 b Cheque number and dated : 417770 dt. 20.12.2020 c Date of institution of the case : 08.03.2021 d Name of the complainant : M/s the Jyoti Raw Phoole Cooperative TC Society through AR Sh. Vinod Chaudhary Office at: F/144, Gali no.2, Ganga Vihar, Delhi-94 e Name of the accused and his : Sh. Jaydeep Singh s/o Sh. Chandu lal parentage R/o H. No.RZ-701, Raj Nagar, part-1, Palam Colony, Delhi-45 f Offence complained of : 138 NI Act g Plea of accused : Not guilty h Orders reserved on : 09.08.2023 i Final order : Accused Jaydeep Singh is convicted for the offences punishable under sections 138 NI Act.
j Date of judgment : 28.08.2023
1. Vide this judgment the present complaint case for an offence punishable U/S.138 of the Negotiable Instruments Act, 1881 (hereinafter "the NI Act") is being decided.
2. It is case of the complainant that complainant is a registered society by the Govt. Of Delhi under the Registration of Society Act 1972 (as amended) and having CC No. 109/21 Jyoti Raw Phoole Co-Op vs Jaydeep Singh Page 1 of 12 Digitally signed by SNEHIL SNEHIL SHARMA SHARMA Date:
2023.08.28 16:37:13 +0530 its office at F/144, gali no.2, Ganga Vihar, Delhi -110094 and engaged in the business of thrift, credit and extending loan to its registered members. The present complaint is being filed by Sh. Vinod Chaudhary on behalf of the complainant who is AR and authorised by complainant company. The accused is a registered member of the complainant company and the accused took a loan of Rs.2,00,000/- on 22.08.2018 against personal account/membership no. 002003 and repayment of monthly installments as well as interest. After taking the loan amount, the accused has been a defaulter in paying the requird payable outstanding monthly installments dues. After repeated demand of the complainant, ultimately the accused came in the office of the complainant and issued a cheque bearing no. 417770 dated 24.12.2020 of Rs.2,39,060/- drawn on THE JANTA CO-OPERATIVE BANK LTD. Branch RZ 12/2, Puran Nagar, Palam Colony, New Delhi-77 to the complainant complainant towards payment of the outstanding payable dues against the accused.
3. On the assurance of the accused, the abovesaid cheque was presented for encashment with the complainant's banker i.e State Bank of India, Gokal Puri but the said cheque was dishonoured and returned unpaid with remarks "Funds Insufficient"
vide return memo dated 24.12.2020.
4. The complainant society had sent a legal notice dated 12.01.2021 to the accused regarding the dishonour of the aforesaid cheque through speed post & registered post but the accused failed to make the payment of the cheque amount despite service of notice and therefore, the present complaint is filed by the complainant against the accused for the offence under Section 138 of the NI Act.
5. On being satisfied of the prima facie ingredients of Section 138 of the NI Act, cognizance was taken and summons were directed to be issued against the accused vide order dated 08.03.2021. Matter was settled before the mediation centre dt. 30.03.2022 but the same was not complied by the accused.
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6. Accordingly, on 08.07.2022 notice under Section 251 Cr.PC r/w Section 263(g) Cr.P.C was framed and served upon the accused to which he pleaded not guilty and claimed trial. While putting forth his plea of defence, accused admitted his signatures upon the cheque in question and denied other particulars i.e. name, amount and date having been filled by him. He had admitted that he had taken the loan from complainant society of Rs. 2 lacs in the year 2019. However, he did not recollect exactly if he had repaid Rs.8,000/- to the complainant society after settlement. He had given the cheque in question alongwith 2-3 cheques for security purpose at the time of taking loan. The complainant society had misused his security cheque. He did not owe the liability of cheque amount to the complainant. The statement of accused was recorded under section 294 Cr.P.C qua the admitted facts.
7. In Complainant's evidence, the complainant/AR (CW-1) tendered his evidence affidavit in post summoning evidence (as the solitary witness) and relied upon the following documents:
i) Ex. CW1/A :Evidence of complainant by
way of affidavit.
ii) Ex. CW1/1 & CW1/2 : Copy of authority letter and
resolution
ii) Ex. CW1/3 : Original Cheque bearing no.
417770 dated 20.12.2020 of Rs. 2,39,060/-(two lacs thirty nine thousand sixty) issued by accused in favour of complainant drawn on Janta Cooperative Bank Ltd. ( fact of drawing the cheque is admitted by accused at the time of framing notice as well as his statement recorded Under Section 294 Cr.P.C)
iii) Ex. CW-1/4 : Cheque returning memo (admitted by accused U/s.
294 Cr.P.C.
iv) Ex. CW-1/5 : Legal demand notice dt.
12.01.2021 sent by Complainant to accused (Admitted by accused at the time of framing notice as well as his statement recorded Under Section 294 Cr.P.C).
v) Ex. CW1/6 (colly) : Copy of regd. Post and
speed post receipts
vi) Ex. CW1/7 : Tracking Report
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Digitally signed
by SNEHIL
SNEHIL SHARMA
SHARMA Date:
2023.08.28
16:37:27 +0530
vii) Ex. CW1/8 to to CW1/11 : Loan application bond
and voucher.
(admitted by the accused
U/s. 294 Cr.P.C.)
CW1 was not cross examined on behalf of the accused despite opportunity given.
8. The accused was then examined under Section 313 Cr.PC, 1973 wherein all the incriminating evidence were put to the accused and he admit the loan amount and giving of the cheque to the complainant but at the time of loan. Accused opted to lead defence evidence. However, no defence witness is produced before the court. Accordingly, matter was listed for final arguments.
9. It has been argued by Ld. Counsel for the complainant that case of the complainant is proved and cheque is also in the favour of the complainant, therefore, accused must be convicted and amount should be recovered. On the other hand, Ld. Counsel for accused has argued that accused has been falsely implicated in this case and that complainant has not been able to prove its case beyond reasonable doubt against the accused.
10. I have heard ld counsel for the complainant and Ld. Defence counsel for accused & considered the respective arguments as well as gone through case file very carefully.
11. The essential ingredients in order to attract Sec. 138 of NI Act, 1881 are as following:
i) The cheque for an amount is issued by the drawer to the payee/complainant on a bank account being maintained by him.
ii) The said cheque is issued for the discharge, in whole or in part of any debt or liability.CC No. 109/21 Jyoti Raw Phoole Co-Op vs Jaydeep Singh Page 4 of 12 Digitally signed
SNEHIL by SNEHIL SHARMA SHARMA Date: 2023.08.28 16:37:33 +0530
iii) The cheque is returned by the bank unpaid on account of insufficient amount to honour the cheque or it exceeds the amount arranged to be paid from that account by an agreement made with the bank.
iv) The cheque is presented within 3 months from the date on which it is drawn or within the period of its validity.
v) within 30 days a legal demand notice is issued by the payee or the holder in due course to the drawer of the cheque on receipt of information by him from the bank regarding the dishonour of the cheque.
vi) The drawer of the said cheque fails to make payment of the said amount of the money as demanded in the legal demand notice to the payee or the holder in due course within 15 days of the reciept of said notice.
vii) The debt or other liability against which the cheque was issued is legally enforceable.
12. Now, coming to the facts of the present complaint case keeping in view the essential ingredients of section 138 of NI Act. In this case, it is not disputed and duly admitted by the accused that the cheque in question bears his signatures, however he denies the other particulars fulfilled by him but admits that the same was given to the complainant as a security cheque in lieu of the debt taken by him. Therefore, it can be said that the cheque was drawn by him in favour of the complainant. Therefore, the essential ingredient (i) as discussed in the preceding paragraph stands fulfilled. Accused has further admitted the fact of dishonour of the cheque in question, hence, another essential ingredients
(iii) and (iv) also stand proved by the complainant. Accused has further admitted the fact of receiving the legal demand notice sent to him by complainant during his statement recorded under section 294 Cr.P.C. and CC No. 109/21 Jyoti Raw Phoole Co-Op vs Jaydeep Singh Page 5 of 12 Digitally signed SNEHIL by SNEHIL SHARMA SHARMA Date: 2023.08.28 16:37:38 +0530 admitted the same in notice framed and statement recorded U/s. 313 Cr.P.C. However, as the accused has appeared before the court and matter came in his knowledge and documents were supplied to him after summoning, still accused chose not to reply back the legal notice or to pay the due amount. Moreover, the address mentioned at legal notice is same as mentioned by the accused in his bail bond. Postal receipts also show that legal demand notice were served at the given address. So it can be rightly said that he has received the legal notice. Hence, essential ingredients (v) and (vi) also stand proved.
13. Now coming to the last and the remaining core ingredients (ii) and (vii) of Section 138 of NI Act as discussed above and the real issue of controversy herein i.e. whether the cheque in question was issued in discharge of any debt or liability, whole or in part and whether the same is a legally enforceable debt.
14. In the present case, it is submitted by the accused as argument that the cheque was given for security purpose to the complainant and not in lieu of the loan amount. As the accused has admitted the taking of loan, it is also on record that even after filing a case the accused has not repaid the total amount to the complainant and choose to contest the case. During the case while framing the notice or in mediation also he has failed to inform the ultimate date of the payment and also failed to uphold the sanctity of the mediation agreement dated 30.03.2022. Therefore, the purpose of security cheque is not discharged by the accused. It is hard to believe that the accused has not sent any message to the complainant to return the cheque after clearing the dues, no NOC is filed by the accused during the trial. Even no date is provided by the accused of the said return of the loan amount.
15. With respect to the point of blank cheque raised by the accused, it is pertinent to mention that Section 20 of the NI Act talks about inchoate CC No. 109/21 Jyoti Raw Phoole Co-Op vs Jaydeep Singh Page 6 of 12 Digitally signed by SNEHIL SNEHIL SHARMA SHARMA Date:
2023.08.28 16:37:43 +0530 instruments. As per this provision if a person gives a duly signed cheque which is either blank or partly filled then he is deemed to have given implied authority to the holder to fill up the particular in it and complete the cheque, thus making the draw liable for the payment mentioned in it. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provision of section 138 would be attracted. At this stage, reference may be sought from the decision of Hon'ble Supreme Court in the case of Bir Singh vs. Mukesh Kumar (2019) 4 SCC 197 wherein the Apex Court while upholding the validity of blank signed cheque in a proceeding u/s 138 of the Act has interalia held the following:
"If a signed blank cheque is voluntarily presented to a payee,towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence."
16. It is a settled of the proposition of law that a cheque issued a security, pursuit of financial transaction, cannot be considered as a worthless piece of paper. It is given to ensure the fulfilment of an obligation undertaken. If a cheque issued to secure repayment of a loan advanced and if the loan is not repaid on or before the due date, the drawee would be entitled to get the cheque for payment, and if such a cheque is disordered, the consequences contemplated under section 138 NI act would follow. Reliance is placed upon Sripati Singh v. State of Jharkhand,2021 SCCOnline1002. Further as to the plea of cheque being a security cheque, it was held in ICDS v. Beena Shabir & Anr. (2002)6 CC No. 109/21 Jyoti Raw Phoole Co-Op vs Jaydeep Singh Page 7 of 12 Digitally signed SNEHIL by SNEHIL SHARMA SHARMA Date: 2023.08.28 16:37:50 +0530 SCC 426, that security cheques would also fall within the purview of section 138 NI Act and a person cannot escape is liability unless he proves that the debt or liability for which cheque was issued as security is satisfied otherwise.
17. In this case, the statutory presumptions under section 118(a) and 139 would be raised in favour of the complainant. Since, the accused has admitted the execution of impugned cheques and signatures on cheque in question, the aforementioned statutory presumptions would be raised in favour of the complainant regarding the fact that the impugned cheques have been drawn for consideration and issued by the accused in discharge of legally enforceable debt.
18. It has been held by a three-judge bench of the Hon'ble Apex Court in the case of Rangappa vs. Sri Mohan (2010) 11 SCC 441 that the presumption contemplated under Section 139 of NI Act includes the presumption of existence of a legally enforceable debt. Once the presumption is raised, it is for the accused to rebut the same by establishing a probable defence. The principles pertaining to the presumptions and the onus of proof were recently summarized by the Hon'ble Apex Court in Basalingappa vs. Mudibasappa (2019) 5 SCC 418 as under:
"25. We having noticed the ratio laid down by this Court in the above cases on Section 118(a) and 139, we now summarize the principles enumerated by this Court in the following manner:
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 probable defence. The standard CC No. 109/21 Jyoti Raw Phoole Co-Op vs Jaydeep Singh Page 8 of 12 Digitally signed SNEHIL by SNEHIL SHARMA SHARMA Date: 2023.08.28 16:37:55 +0530 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.
25.5. It is not necessary for the accused to come in the witness box to support his defence."
It is explicit in the NI Act that the said presumption shall remain until contrary is proved.
19. Moreover, neither the accused has cross examined the complainant nor has brought any defence witness despite giving the opportunity to rebut the said presumption. It implies that the accused has no defence to make and is satisfied with the examination in chief of the complainant. For the averment of the accused that he has returned the said loan, no document or bank statement etc. is confronted or brought on record. As such it can be said that the complainant has discharged his burden against the accused.
20. No doubt is raised upon the financial capacity of the complainant and also on the story deposed by the complainant or amount taken by the accused himself. Mostly all the facts are admitted by the accused during the notice and in his statement recorded U/s. 313 Cr.P.C. It cannot be a ground that cheque was given as security cheque and he has made part payment and did not pay even after receiving the legal demand notice, once the cheque is drawn in favour of the complainant. It was the duty of the accused to keep money in his CC No. 109/21 Jyoti Raw Phoole Co-Op vs Jaydeep Singh Page 9 of 12 Digitally signed SNEHIL by SNEHIL SHARMA SHARMA Date: 2023.08.28 16:38:01 +0530 bank account to discharge his legal liability against the complainant. Bonafide conduct of the accused can be said if accused would have paid the said due amount after receiving the legal notice, even after issuing summons or even during the trial but no such circumstances existed. If the accused had already repaid the amount, he should certainly reply the legal demand notice and he should also brought in DE that for which loan or for what purpose he had returned the amount to the complainant and when. However, as the accused has admitted himself that he has already repaid Rs.8,000/- is also sufficient to prove that cheque was issued in lieu of legal and enforceable debt. Denial of the liability of cheque amount by the accused during framing of notice is not a ground of acquittal without any evidence/witness/record etc. Here, the accused could not prove that he did not owe the liability towards the complainant. Non production of any repayment document by the accused is also suggesting adverse inference against him.
21. On the aspects of preponderance of probabilities, the accused has to bring on record such facts and such circumstances which may lead the court to conclude either that the consideration did not exist or that its nonexistence was so probable that a prudent man would, under the circumstances of the case, act upon the plea that the consideration did not exist. As per the facts and circumstances of this case accused has not led any cogent and believable evidence to support his defence. Ex. CW1/11 is also going against the accused which he himself has admitted U/s. 294 Cr.P.C. and not disputed at any stage.
22. The Hon'ble Supreme Court in Rohitbhai Jivanlal Patel vs State of Gujarat and Another 2019) 18 SCC 106 and in various other rulings have time and again, emphasized that though there may not be sufficient negative evidence which could be brought on record by the accused to discharge his burden, yet mere denial would not fulfil the requirements of rebuttal as CC No. 109/21 Jyoti Raw Phoole Co-Op vs Jaydeep Singh Page 10 of 12 Digitally signed by SNEHIL SNEHIL SHARMA SHARMA Date: 2023.08.28 16:38:06 +0530 envisaged under section 118 and 139 of the NI Act. Further, it has been held in Rajesh Agarwal v. State, 2010 SCC online Del 2501 that:-
"9. .....There is no presumption that even if an accused fails to bring out his defence, he is still to be considered innocent. If an accused has a defence against dishonour of the cheque in question, it is he alone who knows the defence and responsibility of spelling out this defence to the court and then proving this defences is on the accused....."
23. Moreover, it is also not the case of the accused that complainant is not having the financial capacity or the money was never advanced to the accused or the complainant has misused the cheque or his cheque has been misplaced/lost or his cheque has been stolen, for which a complaint has been filed or liability amount is wrongly mentioned on the cheque or the accused has not drawn the cheque in favour of the complainant or cheque was issued for some other arrangement etc. No ommision or contradiction is brought on record by the accused. No circumstances are shown which can attract benefit of doubt in favour of the accused as he could not raise cloud over the facts of the complainant.
24. Keeping in view the facts and circumstances of the present case and the settled position of law in this regard, the presumption of law as per section 118(a) and section 139 of NI Act clearly come in picture for the favour of complainant and his burden of proving the fact of issuance of cheque in question in discharge of legally enforceable debt stands discharged and the accused has miserably failed to discharge his reverse onus. Accordingly, the ingredients mentioned at (ii) & (vii) of Para No. 12 of this judgment are also fulfilled. No circumstances are shown which can attract benefit of doubt in favour of the accused.
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25. In my view, the complainant has proved that the accused had issued the cheque in question in his favour for discharge of the legally enforceable liability and has proved his case against the accused for the offence under Sec. 138 Negotiable Instruments Act. Resultantly, the accused Jaydeep Singh is, thus, held guilty and stands convicted for the said offence.
Digitally signed SNEHIL by SNEHIL SHARMA SHARMA Date: 2023.08.28 16:38:19 +0530 Announced in Open Court (SNEHIL SHARMA) today on 28.08.2023 MM (NI Act) Digital Court, NORTH EAST,KARKARDOOMA,DELHI Copy of judgment be given free of cost. CC No. 109/21 Jyoti Raw Phoole Co-Op vs Jaydeep Singh Page 12 of 12