Delhi District Court
Him. In The Case Reported As Rangappa vs . Sri Mohan 2010(5) Scale 340, It Has Been on 30 September, 2013
IN THE COURT OF SH. SHARAD GUPTA METROPOLITAN MAGISTRATE;
DWARKA COURTS : NEW DELHI
IN RE:
CC No..... 1863/03/12
U/s...... 138 NI Act
P.S. Bindapur
Smt. Anuradha Sisodia
W/o Late Pankaj Sisodia
R/o TA47, Upper Ground floor,
OM Vihar, Uttam Nagar,
New Delhi 110059.
...................Complainant
Versus
Sh. Ankit Gupta
R/o D16, Khanpur Extn.,
Devli Road, Khanpur
New Delhi110062.
..........................Accused
Date of decision : 30.09.2013
Date of which order reserved:28.09.2013
Final order : Convicted
JUDGEMENT :
1. The complainant herein has come before this court on the succinct allegation that the accused was known to her family and had friendly relations with her family. That the accused had approached her for a friendly loan of Rs. One lacs for six months. That the complainant gave the loan of Rs. One lacs to the accused which was to be paid back in six month. That in order to discharge his liability, accused issued cheque bearing No. 742029 dated 18.12.2011 for sum of Rs. One lacs drawn upon Canara Bank, Kalkaji Branch, New Delhi in order to discharge his legal liability / debt taken by him from the complainant. That the said cheque when presented by the complainant for encashment, was returned unpaid with the remarks "Insufficient funds" vide return memo dated 24.12.2011. That legal notice dated 2.01.2012 was sent to the accused through registered post A.D but the accused failed to make payment of the amount of the dishonoured cheque to the complainant despite the legal notice. Hence, the present complaint has been filed.
2. After supply of documents to the accused, notice of accusation U/s 251 CrPC was served upon the accused vide order dated 02.11.2012 to which the accused pleaded not guilty and claimed trial. The accused in reply to notice U/s 251 Crpc submitted the cheque in question bore his signatures and was issued by him. That the cheuqe in question was issued as a security cheque. That he had made some payment to the complainant in cash and only Rs 25,000/ remained unpaid. That despite making of payment by him, the cheque in question was misused.
3. No application u/s 145(2) NI Act was moved by the accused and accordingly the accused was examined under section 281/313 CrPC and the matter was posted for DE. Accused examined one Sachin Upadhayay as DW 1 and thereafter DE was closed. DW 1 Sachin Upadhyaya has deposed that the accused Ankit had friendly relations with one Aman and had taken a loan of Rs. 1 lacs from Aman and had given a cheque of Rs one lacs signed by him for the same without filling in the payee's name. That the accused made various payments of Rs 10,000/ and 5000/ to the said Aman on six occasions. That later on DW 1 came to know that the accused had made payment to the said Aman on eight occasions and the said Aman used to reside in Duggal Colony in Khanpur. In his cross examination, DW 1 stated that he did not have any knowledge of the facts of the case. It was put to the witness that he was deposing falsely to save the accused.
4. Thereafer, DE was closed by the accused and an application for recalling the complainant for her cross examination was moved by the accused. The application was allowed and the complainant was cross examined at length by the ld counsel for the accused. The complainant stated that the accused was the friend of her son Aman. That the accused had taken Rs. 50,000/ cash and Rs. 50,000/ by way of cheque from her in June 2011. that again in January 2012, the accused had taken Rs 50,000/ from her stating that the amount was required for medical expenses of his father. That the accused had issued her two cheques, one for Rs. One lacs and the other for Rs. 50,000/. that the cheque for Rs. 50,000/ was misplaced by her and hence she did not file any complaint qua the said cheque nor she mentioned the said fact in her complaint. That the accused had taken the second amount of Rs. 50,000/ after bouncing of the cheque in the present case. The bald assertion of the accused that the cheque in question was issued as a security cheque to my mind is not sufficient to establish the defence of the accused. The accused was still required to show from the material on record that the cheque in question was given by him at the time of execution of loan documents as has been alleged by him. It, however, appears that in the present case nothing has been brought on record by the accused to show when the cheque book containing the cheque in question was issued to him or at what point of time the preceding and succeeding cheques to the cheque in question from the same cheque book were utilized. There is nothing on record to even show how many of the cheques of the said series had been infact been utilized by the complainant or on what dates. The unused cheque book if any has not been produced by the accused in court and furthermore, the counter foil of the cheque book has also not been produced by the accused to substantiate his claim that the cheque in question was issued at time of availing of loan by him. It has been observed that the cheque book of the accused including the counterfoils of the used cheques were the best possible evidence to show the point of time and the purpose for which the cheque in question had been utilized by the accused. The cheque book containing the counterfoils would also have been best corroborative evidence to show that the cheques coming after the cheque in question in the said cheque book had been utilized by the accused prior to the date of dishonour of the cheque in question and as such no inference can be drawn from the material on record that the cheque in question was in fact issued at the time of inception of the loan and not at later date on which it is alleged to have been issued. To my mind, the bald assertion of the accused that the cheque in question was issued as a security cheque does not ipso facto warrant the conclusion that the cheque in question might have been issued to the complainant at the time of the inception of the loan and not thereafter.
5. Thereafter matter was fixed for final arguments as accused had already been examined u/s 281/313 CRPC and had already led and closed his defence evidence. Matter was posted for final arguments accordingly.
6. However, final arguments were not addressed by either party despite giving of two opportunities. It is therefore proposed to dispose off the matter on the basis of the material on record.
7. Before proceeding any further it would be germane to refer to the propositions of law on the point. The Negotiable Instruments Act, 1881 raises two presumptions; According to Section 118 (a) it shall be presumed that every negotiable instrument was made or drawn for consideration. By virtue of this clause, the Court is obliged to presume that the instrument was made for consideration or until the contrary is proved. According to Section 139 of NI Act "it shall be presumed, unless the contrary is proved that the holder of a cheque received the cheque for discharge in whole or in part, of any debt or other liability." Under Section 139 NI Act there is a legal presumption that the cheque was issued for discharging an antecedent liability and that presumption can be rebutted only by the person who draw the cheque. Presumptions, both under Sections 118(a) and 139 of the Act, are rebuttable in nature. The burden is squarely upon the accused to rebut the presumptions and discharge the onus placed upon him to show that the cheque was not against any liability. It is a settled law that for this purpose, the accused is not required to enter the witness box in order to discharge the burden of proof that the law places upon him. In the case reported as Rangappa Vs. Sri Mohan 2010(5) SCALE 340, it has been held by a Three Judge Bench of the Apex Court that consideration attached to a cheque is a matter of presumption and the complainant is not required to prove it beyond reasonable doubt. The question that naturally arises is as to what is the standard of proof that the law requires and which the accused is expected to discharge in order to rebut the presumptions. In criminal matters, the standard of proof upon the prosecution is proof beyond reasonable doubt. However, the accused in order to rebut the presumption(s) against him is not required to conclusively establish his case. The burden of proof on accused in rebutting the presumption(s) is not as high as that of the prosecution. Reference in this regard can be made to the judgment reported as Hiten P. Dalal vs. Bratindranath Banerjee 2001 CriLJ 4647. It is also a settled principle that where the accused has discharged the initial burden of rebutting the presumptions; the burden of proof shifts to the complainant and whether or not the accused has discharged the onus of proof placed upon him would depend entirely on the facts and circumstances of the case. In this regard the judgment of the Apex Court in M. S. Narayana MenonVs. State of Kerala AIR 2006 SC3366 can be fruitfully referred to.
8. Having dwelt upon the law as regards presumptions and the burden of proof in matters arising under Section 138 Negotiable Instruments Act, 1881, I shall now deal with the merits of the present case. The case of the complainant is that cheque in question Ex. CW1/A for a sum of Rs. one lacs was issued by the accused towards discharge of his legal liability in respect of loan taken by him. The accused has taken two contradictory defences. The first defence disclosed in the reply to notice of accusation is that the accused had taken the loan from the complainant whereas the contradictory stand of the accused as disclosed in the statement of DW 1 is that the accused had taken the loan from the son of the complainant. The contention of the accused is that he had made payment of the part of the loan amount. As per the reply to the notice of accusation, an amount of Rs 25,000/ remained unpaid whereas DW 1 has not been to say the exact amount repaid and exact amount outstanding. The contention of the accused is also that the cheque in question was issued as a security cheque.
9. At the out set it has been observed that the accused has taken contradictory stands in reply to the notice of accusation and in his defence evidence. In the reply to the notice of accusation, the accused had stated that he had taken a loan from the complainant whereas as per the testimony of DW 1 Sachin, the accused had taken loan from the son of the complainant. It appears that both the defences of the accused are irreconcilable and contradictory. It has been observed that in case the accused had taken the loan from the son of the complainant, the said fact was within his knowledge even on the date notice of accusation was served on the accused and there was nothing stopping him from bringing the said fact on record at the earliest stage. The accused however, unequivocally stated that he had taken a loan from the complainant. The accused thus did not bring the said fact on record at the earliest point of time and rather a completely different stand was taken by the accused during course of his evidence, which adversely affects teh veracity of the version of the accused. The defence of the accused thus does not appear to be probable or believable and even a cloud of doubt has been cast on the veracity of testimony of DW 1 Sachin.
10. Furthermore, the argument of the accused even if taken at its face value is that accused had made payment of part of the loan amount. Thus, the accused ha himself admitted the fact of taking of loan by him. However, no receipt to witness the payment has been produced on record by the accused to show that the amount was infact paid by him as alleged. Furthermore, DW1 Sachin has not been able to tell even the dates on which the alleged payments had been made by the accused to the complainant. There is no specific particular of time, place, date, month or year in the entire testimony of DW 1 to point out the times or the place when and where the accused had made repayment of the loan amount. Furthermore, if the testimony of DW 1 Sachin is taken at its face value, the accused was aware that his one cheque for Rs. One lacs was with the complainant despite the accused having made the majority of payments to the complainant. It stands to reason that a reasonably prudent man similarly situated would atleast have sought some receipt or execution of something in black and white in token of having made the payment, especially in the circumstance when a cheque which could be misutilized was still in possession of the opposite party. However, no receipt has been produced by the accused in token of having made repayment of the part amount even when he was aware that his cheque had not been returned by the complainant. For one thing the absence of any proof witnessing the repayment of the part amount is fatal to the defence of the accused and furthermore, the conduct of the accused at the time of repayment of the said amount in not taking a receipt also makes his conduct and by necessary implication his entire story unbelievable when viewed from the view point of a reasonably prudent man similarly situated.
11. The defence of the accused is also that the cheque in question was issued as a security cheque. However, other than the bald assertion of the accused that the cheque in question was issued as a security cheque there is nothing on record to show that the cheque in question was infact issued as a security cheque. The bald assertion of the accused that the cheque in question was issued as a security cheque to my mind is not sufficient to establish the defence of the accused. The accused was still required to show from the material on record that the cheque in question was given by him at the time of availing of loan as has been alleged by him. It, however, appears that in the present case nothing has been brought on record by the accused to show when the cheque book containing the cheque in question was issued to him or at what point of time the preceding and succeeding cheques to the cheque in question from the same cheque book were utilized. There is nothing on record to even show how many of the cheques of the said series had been infact been utilized by the complainant or on what dates. The unused cheque book if any has not been produced by the accused in court and furthermore, the counter foil of the cheque book has also not been produced by the accused to substantiate his claim that the cheque in question was issued at time of availing of loan by him. It has been observed that the cheque book of the accused including the counterfoils of the used cheques was the best possible evidence to show the point of time and the purpose for which the cheque in question had been utilized by the accused. The cheque book containing the counterfoils would also have been best corroborative evidence to show that the cheques coming after the cheque in question in the said cheque book had been utilized by the accused prior to the date of dishonour of the cheque in question and as such no inference can be drawn from the material on record that the cheque in question was in fact issued at the time of inception of the loan and not at later date on which it is alleged to have been issued. To my mind, the bald assertion of the accused that the cheque in question was issued as a security cheque does not ipso facto warrant the conclusion that the cheque in question might have been issued to the complainant at the time of the inception of the loan and not thereafter.
12. It can now be considered if the non mentioning of the subsequent loan of Rs 50,000/ in the present complaint is fatal to the version of the complainant. It appears that for one thing, the said loan pertained to another independent transaction and did not pertain to the present case. The complainant in her cross examination has stated that the accused had taken Rs. 50,000/ cash and Rs. 50,000/ by way of cheque from her in June 2011 and that again in January 2012, the accused had taken Rs 50,000/ from her stating that the amount was required for medical expenses of his father. Thus both the loan transactions were different and independent transactions and the non mentioning of the advancing of the subsequent loan by the complainant to the accused to my mind does not affect the veracity of the version of the complainant.
13. It has been urged on behalf of the accused that the complainant had got the cheque filled in from another person and he had only signed on the cheque. It has been urged that the said filling of the cheque by another person by the complainant amounts to material alteration in the cheque. In this context it would be fruitful here to refer to section 20 NI Act which talks of "inchoate stamped instruments" and states that if a person signs and delivers a paper stamped in accordance with the law and "either wholly blank or have written thereon an incomplete negotiable instrument" such person thereby gives prima facie authority to the holder thereof "to make or complete as the case may be upon it, a negotiable instrument for any amount specified therein and not exceeding the amount covered by the stamp." Similarly section 125 NI Act permits the holder of an uncrossed cheque to cross it and that would not render the cheque invalid for the purposes of presentation for payment. These provisions indicate that under the scheme of the NI Act an incomplete cheque which is subsequently filled up as to the name, date and amount is not rendered void only because it was so done after the cheque was signed and delivered to the holder in due course. Before proceeding any further it would be relevant to refer to the settled proposition of law on the point. The position in law has been explained in the judgment of the Division Bench of the Kerala High Court in Lillykutty v. Lawrance 2003 (2) DCR 610 in the following words:
"In the instant case, signature is admitted. According to the drawer of the cheque, amount and the name has been written not by the drawer but by somebody else or by the payee and tried to get it encashed. We are of the view, by putting the amount and the name there is no material alteration on the cheque under Section 87 of the Negotiable Instruments Act. In fact there is no alteration but only adding the amount and the date. There is no rule in banking business that payee's name as well as the amount should be written by drawer himself. In the instant case Bank has never found that the cheque was tampered with or forged or there is material alteration or that the handwriting by which the payee's name and the amount was written was differed. The Bank was willing to honour the cheques if sufficient funds were there in the account of the drawer even if the payee's name and the amount was written by somebody else other than the holder of the account or the drawer of the cheque. The mere fact that the payee's name and the amount shown are not in the handwriting of the drawer does not invalidate the cheque. No law provides in the case of cheques the entire body has to be written by the drawer only. What is material is the signature of the drawer and not the body of the instrument. Therefore when the drawer has issued the cheque whether the entire body was written by the drawer written beyond the instructions of the drawer, whether the amount is due or not, those and such matters are defenses which drawer has to raise and prove it. Therefore the mere fact that the payee's name and the amount shown in the cheque are in different handwriting is not a reason for not honouring the cheque by the Bank. Banks would normally see whether the instrument is that of the drawer and the cheque has been signed by the drawer himself. The burden is therefore entirely on the drawer of the cheque to establish that the date, amount and the payee's name are written by somebody else without the knowledge and consent of the drawer. In the instant case, the drawer of the cheque has not discharged and burden. Apart from the interested testimony of the drawer, no independent evidence was adduced to discharge the burden.
14. It would also be fruitful here to advert to the pronouncement of our own Hon'ble High Court in Ravi Chopra vs State And Anr. decided on 13 March, 2008. in the said pronouncement, the scope inter alia of section 20 NI Act was discussed. The relevant portion of the pronouncement reads as under:
3."The counsel for the petitioner contended that a cheque which is signed but left blank at the time of such signing, will be materially altered if it is subsequently filled up without the consent of the drawer, which according to him is what has happened in the present case. Such cheque would be void in terms of Section 87 of the NI Act and therefore cannot be presented for payment or honoured even if it is. Section 87 NI Act reads as under:
Section 87 Effect of material alteration Any material alteration of a negotiable instrument renders the same void as against anyone who is a party thereto at the time of making such alteration and does not consent thereto, unless it was made in order to carry out the common intention of the original parties; Alteration by indorsee.And any such alteration, if made by an indorsee, discharges his indorser from all liability to him in respect of the consideration thereof. The provisions of this section are subject to those of Sections 20, 49, 86 and 125.
17. While it is correct that in terms of the above provision, any material alteration to a cheque without the consent of the drawer unless it is made to carry out the common intention of the original parties thereto renders the cheque void, the expression "material alteration" has not been defined. Significantly, Section 87 has been made subject to Sections 20, 49, 86 and 125 NI Act. These provisions help us to understand what are not considered 'material alterations' for the purpose of Section 87.
18. Section 20 NI Act talks of "inchoate stamped instruments" and states that if a person signs and delivers a paper stamped in accordance with the law and "either wholly blank or have written thereon an incomplete negotiable instrument" such person thereby gives prima facie authority to the holder thereof "to make or complete as the case may be upon it, a negotiable instrument for any amount specified therein and not exceeding the amount covered by the stamp." Section 49 permits the holder of a negotiable instrument endorsed in blank to fill up the said instrument "by writing upon the endorsement, a direction to pay any other person as endorsee and to complete the endorsement into a blank cheque, it makes it clear that by doing that the holder does not thereby incurred the responsibility of an endorser." Likewise Section 86 states that where the holder acquiesces in a qualified acceptance, or one limited to part of the sum mentioned in the bill, or which substitutes a different place or time for payment, or which, where the drawees are not partners, is not signed by all the drawees, all previous parties whose consent has not been obtained to such acceptance would stand discharged as against the holder and those claiming under him, unless on notice given by the holder they assent to such acceptance. Section 125 NI Act permits the holder of an uncrossed cheque to cross it and that would not render the cheque invalid for the purposes of presentation for payment. These provisions indicate that under the scheme of the NI Act an incomplete cheque which is subsequently filled up as to the name, date and amount is not rendered void only because it was so done after the cheque was signed and delivered to the holder in due course.
19. The above provisions have to be read together with Section 118 NI Act which sets out various presumptions as to negotiable instruments. The presumption is of consideration, as to date, as to time of acceptance, as to transfer, as to endorsement, as to stamp. The only exception to this is provided in proviso to Section 118 which reads as under:
Provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him.
20. A collective reading of the above provisions shows that even under the scheme of the NI Act it is possible for the drawer of a cheque to give a blank cheque signed by him to the payee and consent either impliedly or expressly to the said cheque being filled up at a subsequent point in time and presented for payment by the drawee. There is no provision in the NI Act which either defines the difference in the handwriting or the ink pertaining to the material particulars filled up in comparison with the signature thereon as constituting a 'material alteration' for the purposes of Section 87 NI Act. What however is essential is that the cheque must have been signed by the drawer. If the signature is altered or does not tally with the normal signature of the maker, that would be a material alteration. Therefore as long as the cheque has been signed by the drawer, the fact that the ink in which the name and figures are written or the date is filled up is different from the ink of the signature is not a material alteration for the purposes of Section 87 NI Act."
15. It thus appears that the ratio of Ravi Chopra is fully applicable to the facts of the case. To reiterate, the cheque in question was not dishonoured on ground of any material alteration and the accused has admitted his signatures on the said cheque. It thus appears that in view of section 20 and 125 of the NI Act, merely because the name of the payee amount and the date and the crossing of the cheque were done subsequently does not amount to a material alteration and does not render the cheque void. The burden was therefore entirely on the drawer of the cheque, i.e, the accused, to establish that the date, amount and the payee's name are written by somebody else without the knowledge and consent of the drawer. In the instant case, the accused has not discharged said burden. Apart from the interested testimony of the drawer, no independent evidence was adduced to discharge the burden and as already observed the defence of the accused does not appear to be plausible.
16. In passing reference can also be had to pronouncement of our own Hon'ble High Court in Vijender Singh v. M/s Eicher Motors Pvt. Ltd. 2012 ACD 621 to the effect that once accused had admitted his signatures on the cheque he could not deny his liability on the ground that it was a blank cheque and has not been filled in by him. It was held in Vijender Singh supra that a person handing over a blank cheque is supposed to understand the consequences of doing so. In the present case also the accused has admitted his signatures on the cheque in question. It has been observed that the issue of a cheque is a serious matter and a person issuing a blank cheque is supposed to understand the consequences of doing so and now the accused cannot escape his liability by contending that he had only issued a signed blank cheque.
17. There is yet another aspect of the present matter that is required to be dealt with and it is regarding the service of the legal notice. The accused has nowhere asserted that the legal notice was never received by him. In this context it appears that the legal notice was sent through registered post to the address of the accused at D16, Khanpur Extension, Devli Road, Khanpur, New Delhi. The postal receipt and courier receipt have been proved on record as Ex CW 1/D. It appears that the accused had mentioned the same address in his bail bond, reply to notice of accusation and statement u/s 281/313 CrPC as his residential address. In view of the same it appears that the address mentioned on the legal notice was the correct address of the accused. In this connection the judgment reported as C. C. Alavi Haji vs. Palapetty Muhammed and Another2007 (3) RCR (Criminal) 185 would be fruitful. It was observed therein:"Section 27 gives rise to a presumption that service of notice has been effected when it is sent o the correct address by registered post. In view of the said presumption, when stating that a notice has been sent by registered post to the address of the drawer, it is unnecessary to further aver in the complaint that in spite of the return of the notice unserved, it is deemed to have been served or that the addressee is deemed to have knowledge of the notice. Unless and until the contrary is proved by the addressee, service of notice is deemed to have been effected at the time at which the letter would have been delivered in the ordinary course of business. This Court has already held that when a notice is sent by registered post and is returned with a postal endorsement "refused" or "not available in the house" or "house locked" or"shop closed" or "addressee not in station" due service has to be presumed.[Vide Jagdish Singh vs. Natthu Singh, AIR 1992 SC 1604; State of MP vs. Hiralal & Ors. (1996) 7 SCC 523 and V. Raja Kumari vs. P.Subbarama Naidu & Anr., 2004 (4) RCR (Criminal) 933 :
2005 (1) Apex Criminal 58 : (2004)8 SCC 774. It is,therefore, manifest that in view of the presumption available under Section 27 of the Act, it is not necessary to aver in the complaint under Section 138 of the Act that service of notice was evaded by the accused or that the accused had a role to play in the return of the notice unserved."
18. In the peculiar circumstances of the present case, nothing has been brought on record to establish that the notice was infact not received by the accused. Therefore, in terms of section 27 General Clauses Act, there is presumption of valid service. It is for the accused to have rebutted the presumption. The accused has not made any endeavour to rebut the presumption. Int he peculiar facts of the present case, no attempt has been made by the accused to rebut the presumption of service of the legal notice as contained in section 27 of the General Clauses Act.
19. To conclude, in the case at hand, the accused has miserably failed to rebut and dislodge the statutory presumptions attached to the cheque in question. Therefore,this court holds accused guilty for the offence under Section138 Negotiable Instruments Act, 1881. Accordingly, in view of the above discussion the accused stands convicted for the offence under Section 138 Negotiable Instruments Act,1881. Accused be heard on point of sentence separately.
ANNOUNCED IN THE OPEN COURT ( SHARAD GUPTA)
ON 30th SEPTEMBER MM06/SW/DWARKA COURTS,
DELHI.