Delhi District Court
Sunil Kumar ...Complainant vs . on 4 April, 2009
IN THE COURT OF SH. DIG VINAY SINGH, ADDITIONAL CHIEF METROPOLITAN
MAGISTRATE03 (IPR), ROHINI, DELHI
In re:
SUNIL KUMAR ...COMPLAINANT
VS.
MUKESH KUMAR ...ACCUSED
CC NO.155/1/2008
U/s.138 N.I. ACT
P.S. ADARSH NAGAR
DATE OF RESERVATION OF JUDGMENT: 30.3.2009
DATE OF PRONOUNCEMENT OF JUDGMENT: 04.4.2009
JUDGEMENT
(a) The serial no. of the case : R0032612008.
(b) The date of commission of offence : 10.12.2008
(c) The name of complainant : SUNIL KUMAR S/O. SH. BALJEET SINGH
(d) The name, parentage, residence of accused : MUKESH KUMAR S/O. SH. BRIJ BHAN
SINGH R/O. H.NO.365, VILLAGEKHERA
KALAN, DELHI.
(e) The offence complained of/ proved : U/s.138 N.I. ACT.
(f) The plea of accused : pleaded not guilty
(g) The final order : CONVICTED.
(h) The date of such order : 04.4.2009.
(i) Brief statement of the reasons for the decision :
1. Brief facts are: that complainant Sunil Kumar filed this complaint u/s.138 N.I. Act, alleging therein, that the accused Mukesh Kumar was on friendly relations with him and the accused obtained a sum of Rs.44,000/, as friendly loan, from the complainant in August, 2008. Amount was taken for a period of three months. The accused issued JUDGMENT/SUNIL VS. MUKESH/CC NO.155/1/08/U.S.138N.I.ACT/CONVITED/04.04.2009/Page 1 of 18 a cheque no.479731 dated 04.11.2008 for Rs.44,000/(hereinafter referred to as 'the cheque) drawn on Post Office Savings Bank, GPO, Delhi110006, from his Account No.1161781. The said cheque was dishonoured due to 'insufficient funds'. The complainant issued legal notice to the accused demanding the cheque amount within stipulated period. The notice was returned with the remarks that "despite repeated attempts, nothing could be found". When the accused failed to make payment of the cheque amount as required within prescribed period, the complaint was filed within limitation and the accused was summoned u/s.138 N.I. Act.
2. On 16.1.2009, a notice u/s.251 Cr.P.C. for the offence u/s.138 N.I. Act was framed against the accused to which accused claimed trial. In reply to notice for offence u/s.138 N.I. Act framed in this Court on 16.1.2009, the accused replied that although he took a loan of Rs.44,000/ from the complainant but it was taken in the year 2005 and not in August 2008, as claimed by the complainant. Accused admitted that he issued the cheque in question in favour of the complainant, but he stated that the said cheque was undated at that time. Accused claimed that he repaid the loan amount with interest and penalty in 2006, when he paid Rs.60,000/ in cash to the complainant, but the complainant did not return the cheque claiming that cheque has been destroyed. The accused admitted that the entire body of the cheque except the date is in his own handwriting. The accused took up a defence that he did not receive the legal notice dated 19.11.2008 claiming the cheque amount from the complainant. However, the accused admitted that he is residing at the same address where the notice demanding cheque amount through Registered AD Post was dispatched by the complainant.
3. In support of its case, complainant examined himself as PW1 and thereafter the statement of accused was recorded. The accused examined himself as DW1 and he examined one more defence witness namely Ravinder Kumar as DW2.
4. Arguments have been heard from both sides.
JUDGMENT/SUNIL VS. MUKESH/CC NO.155/1/08/U.S.138N.I.ACT/CONVITED/04.04.2009/Page 2 of 18
5. Complainant as PW1 by way of affidavit reaffirmed his testimony stating that the accused took a friendly loan of Rs.44,000/ in August, 2008, against which the cheque in question Ex. CW1/1 was issued by the accused towards repayment of loan. But when the cheque was presented for encashment, it was dishonoured due to 'insufficient funds' vide cheque returning memo dated 04.11.2008, by the bankers of accused, which is Ex. CW1/2 and it was forwarded to the complainant by his bankers vide debit advise dated 07.11.2008 Ex. CW1/3. Within prescribed period of limitation, notice dated 19.11.2008 Ex. CW1/4 through Registered AD Post and UPC Ex. CW1/5 and Ex. CW1/6, was dispatched to the accused in which the cheque amount was demanded from the accused. The complainant deposed that in connivance with postal officials, the accused manipulated a wrong endorsement on the Registered Envelope, in which it is written that "despite repeated visits, nothing could be learnt/found". The complainant claimed that although the accused is available at the same address, but the registered envelope containing notice was received back with the report as above. The envelope was proved as Ex. CW1/7. Complainant claimed that accused failed to make payment of cheque amount within prescribed period, therefore, the present complaint was filed.
6. During cross examination of PW1, the accused suggested the complainant that he is into money lending business which suggestion was denied by the complainant and the complainant also denied the suggestion that the accused ever mortgaged the title deeds of his house in Jahangir Puri with the complainant. The accused also suggested the complainant that the loan in question was extended in the year 2005 and not in August 2008, but the suggestion was denied by the complainant. The complainant also denied the suggestion that in the year 2006, the accused sold his property and at that time, the accused paid Rs.60,000/ , as repayment of loan including interest and penalty, to the complainant or that the complainant returned the title deeds of property of accused. Accused suggested in the cross examination that JUDGMENT/SUNIL VS. MUKESH/CC NO.155/1/08/U.S.138N.I.ACT/CONVITED/04.04.2009/Page 3 of 18 at the said time of payment of Rs.60,000/, one Pandit Ji and one Lala Property dealer were present. Complainant also denied a suggestion that when the accused demanded the cheque back from the complainant, the complainant told the accused that the cheque has been misplaced. This suggestion of the accused regarding misplacement of cheque is contrary to his own stand taken in reply to the notice framed in Court in which he had stated that when the cheque was demanded back, the cheque was claimed to be destroyed and not misplaced. The accused also put a suggestion to the complainant that the amount of Rs.44,000/ was given on an interest rate of 3.5% per month, whereas in reply to the notice, it was stated that interest was 3%. Complainant however admitted in the cross examination that when the cheque was handed over, it was without date. The accused also suggested the complainant that the complainant in connivance with the postal authorities got prepared a false report on the envelope containing notice. This suggestion was denied by the complainant. However, the said suggestion by the accused is useless for the reason that, in the present case, the defence of the accused is not that he was deprived of the opportunity to make payment within stipulated period of 15 days from date of receipt of notice, because of the alleged manipulation in report, but the defence of the accused is that he had no legally enforceable liability as on the date when the cheque was presented as he had already repaid the loan amount. It is not a case where the accused is admitting his liability on the date of service of notice, but his stand is that he had no enforceable liability even on the date when the cheque was presented.
7. Besides a bare suggestion to the complainant that the complainant is engaged in money lending business without license, the accused could not prove anything on record to suggest that the present complaint was barred. Single instance of extending loan, even though it is on interest, would not make it a case that under the money lending Act, recovery is barred or that, therefore, the cheque cannot be claimed to be in discharge of legally enforceable liability.
JUDGMENT/SUNIL VS. MUKESH/CC NO.155/1/08/U.S.138N.I.ACT/CONVITED/04.04.2009/Page 4 of 18
8. When the evidence of the prosecution was put to the accused in his examination u/s.313 r/w. 281 of Cr.P.C., the accused once again claimed that although the cheque in question was issued by him and it is filled up by him in his own handwriting, except the date. Accused also claimed that the loan was taken by him in 2005 which was repaid in 2006. The accused also claimed that he did not receive notice and accused also claimed that when the cheque was demanded back from the complainant, the complainant told him that the cheque has been misplaced.
9. In his evidence, accused Mukesh Kumar as DW1 again reaffirmed these facts claiming that he did not take loan in August, 2008, but the loan was taken in the year 2005 on interest amount @ 3.5% and that he came in contact with complainant through one Raju @ Kishan Lal. At the time when he took loan, he gave his property documents and the cheque in question, to the complainant, as security and, even the complainant puts his locks on one of the room of the property. In April 2006, he sold his property and at that time paid Rs.60,000/ to the complainant which included interest and other charges agreed between the accused and the complainant. Accused claimed that he made the payment to the complainant in the presence of a property dealer namely Ravinder Kumar @ Lala, one Pandit Ji, whose name is not disclosed and one Sh. Akhtar. Again on page3 of the cross examination of the accused, he stated that when he returned the loan amount in April, 2006, besides Mr. Akhtar & Lala Ram, two more persons were present, but they were accompanying the complainant and the accused did not know their names. In the next reply, name of Pandit Ji was not mentioned. He deposed that when he paid the amount of Rs.60,000/, property documents were returned to him but the cheque was not returned by the complainant stating that it is misplaced and he would return the cheque. Thereafter, on many occasions, he asked from the complainant to return of cheque, but the complainant did not return. In the cross examination, the accused admitted that there is no documentary proof with him to show that any loan was taken JUDGMENT/SUNIL VS. MUKESH/CC NO.155/1/08/U.S.138N.I.ACT/CONVITED/04.04.2009/Page 5 of 18 in the month of May, 2005. He also admitted during cross examination, that he cannot tell the date in April, 2006, when the loan amount was repaid, but he took the loan in May, 2005, it was for a period of 1½ to 2 years. He admitted that he has no documentary proof to show that he had paid Rs.60,000/ to the complainant and also that none of those persons who were present at the time of alleged repayment of loan signed any of the documents, nor he remembered the date when he demanded the cheque back from the complainant. He admitted that he did not give any written notice to the complainant demanding the cheque back from the complainant. He also admitted that he never informed his bankers about misplacement of the cheque in question nor he stopped the payment of the cheque by his bankers nor any report lodged with the police regarding misplacement of the cheque. During cross examination he once again admitted that he is residing at the same address mentioned on the registered envelope containing legal notice sent by the complainant to the accused.
10. The second witness examined by the accused in his defence is Mr. Ravinder Kumar @ Lala as DW2, who in his evidence deposed that in April, 2006, the accused sold his property to Mr. Akhtar and that, in his presence, the accused paid Rs.60,000/ to the complainant when the complainant returned the property documents to the accused and told him that the cheque was misplaced and it shall be returned as soon as it is found. He also deposed in his examination in chief that the complainant opened lock of the room which was put by the complainant. During cross examination, DW2 admitted that the loan transaction between the complainant and accused did not take place in his presence and whatever he deposed in para no.4 of the affidavit was hearsay only. In cross examination, this witness also stated that he does not remember the date in April, 2006 when allegedly loan amount was repaid to the complainant and what is interesting is that this witness claims that on that day when the loan was repaid, besides himself, the accused and the complainant only one JUDGMENT/SUNIL VS. MUKESH/CC NO.155/1/08/U.S.138N.I.ACT/CONVITED/04.04.2009/Page 6 of 18 Pandit Ji was present and no one else was present. Now, this deposition is against the stand of accused that one Mr. Akhtar was also present at that time and two persons from the side of complainant were also present. Not only this, this part of the testimony of this witness damages the defence of the accused since the accused claims that this amount of Rs.60,000/ was paid by accused to the complainant from the sale amount of his property. Allegedly the property was sold to one Mr. Akhtar, but as per testimony of DW2, even Mr. Akhtar was not present at that time. If Mr. Akhtar was not present at that time, then no sale of property took place on that day and no transaction of money took place. Even otherwise, the accused could have lend credence to his defence by either proving the sale of property documents pertaining to April, 2006 or by examining Mr. Akhtar, but neither the sale documents were proved nor Mr. Akhtar was examined. Rather DW2 says that Mr. Akhtar was not even present. Even the Pandit Ji, who was allegedly present at the time of repayment of loan was not examined by the accused in his favour. DW2 specifically claimed that this amount of Rs.60,000/ was received by the accused from the sale consideration of the property and then it was given to the complainant but it is anybody's guess as to when the alleged purchaser of the property Mr. Akhtar was not even present there, who paid this amount to the accused, so that it can change hands from accused to the complainant. In cross examination, DW2 also stated that rather in his presence even the property documents were not returned and the complainant asked the accused to collect the property documents from his office. The witness was specifically questioned that in his examination in chief he has deposed that property documents were returned in his presence, whereas in the cross examination he changed his stand and, as to which of the two statement was correct. The witness reaffirmed that property documents were not returned in his presence. However, the witness admitted that regarding payment of Rs.60,000/ no receipt or documentary proof was executed. This witness also stated that in his presence, no document of sale of JUDGMENT/SUNIL VS. MUKESH/CC NO.155/1/08/U.S.138N.I.ACT/CONVITED/04.04.2009/Page 7 of 18 property was also executed nor he signed any such documents.
11. Ld. counsel for the accused argued that the admission by the complainant that when he received the cheque it was without date, and the evidence of DW1 & DW2 proves that the loan was repaid and, therefore, there was no legally enforceable liability. He also argued that accused did not receive notice, therefore, he cannot be held guilty.
12. Section 139 of Negotiable Instruments Act provides that, unless contrary is proved, a presumption shall arise that the holder of a cheque received the cheque of the nature referred to in section 138 of NI Act for the discharge of debt or other liability. Thus, there is a legal presumption u/s 139 that the cheque was issued by the accused for discharging a liability and this presumption is to be rebutted by the accused only. The presumption can be rebutted by the accused by adducing evidence only. Burden was on the accused to rebut this presumption.
13. Section 118 of NI Act further provides that, unless contrary is proved, it shall be presumed that the cheque was made or drawn for consideration. U/s 118 NI Act, there is a legal presumption regarding consideration, the date when the cheque was drawn and also the time of acceptance.
14. In the present case, besides bare allegations by the accused, that he repaid the loan amount in the year 2006, no positive evidence is adduced by the accused. It is admitted by the accused in his cross examination that he has no documentary proof to show that he repaid a loan amount to the complainant in the year 2006 The accused also did not prove anything on record to show that he took the loan from the complainant in the year 2005 and not in August, 2008 as deposed by the complainant. Not only this, had the accused repaid the loan amount and, when the complainant failed to return the cheque in question which was allegedly given by the accused as security, the accused would have informed his bankers. This was least accepted from the accused. The accused himself claimed that when he demanded the cheque in question back from the complainant, the complainant claimed that the cheque was JUDGMENT/SUNIL VS. MUKESH/CC NO.155/1/08/U.S.138N.I.ACT/CONVITED/04.04.2009/Page 8 of 18 destroyed/misplaced. This fact gave sufficient reason to the accused to have informed his bankers that the cheque in question has been lost and, that in case the bankers of the accused receives the cheque for encashment, it should not be encashed. But no such communication was given to the bankers. It would not be out of place to mention that the cheque in question was dishounred due to insufficient of funds and not due to stop payment or any other reason. In absence of such a communication to the bankers, the version of the complainant gains credence and the defence taken up by the accused appears to be palpably false. Had the accused repaid the loan amount, he would have immediately demanded the cheque back, and in case, complainant failed to return it, he would have stopped the payment. This was not done. Not only this, the accused has no receipt or any other document to prove that the amount was repaid. Even the accused did not give any notice to the complainant in writing that the cheque should be returned after the payment is made. The deposition of the accused that he paid the loan amount, when his property was sold in presence of few witnesses also is highly doubtful for the reasons already discussed above and more particularly when Mr. Akhtar, who allegedly paid the cash amount to the accused, which the accused claims to have further paid the complainant, has not been examined. Rather DW2 who is the witness of accused himself stated that Mr. Akhtar was not even present there. Said Pandit Ji in whose presence, the amount was paid has not been examined by the accused, even though burden was on the accused.
15. The claim of accused that he obtained loan in 2005 and not in August 2008, could have been substantiated by him by proving one more fact. That is, he could have proved that the cheque book from which the cheque in question was issued was issued by the bankers of accused in 2005 and that certain cheque from the same booklet of cheque were encashed during 2005. This fact would have lend some credence to his claim since, had the accused proved that any cheque bearing number, after the number of the cheque in question, was encashed by the bankers any time in JUDGMENT/SUNIL VS. MUKESH/CC NO.155/1/08/U.S.138N.I.ACT/CONVITED/04.04.2009/Page 9 of 18 2005 or prior to August 2008, it would have created doubt on the version of complainant. But the accused did not lead any such evidence although the burden was on him. Therefore, it is established beyond doubt in the present case that the cheque in question was issued by the accused in discharge of his legally enforceable liability which got dishounred due to insufficient funds.
16. So far as second contention taken by the accused that notice was not served upon him is concerned, In the case of K. Bhaskaran Vs. Sankaran Vaidya Balan & Another (1999) 7 Supreme Court Cases page 510, it was held by the Hon'ble Supreme Court as follows :
"17. The more important point to be decided in this case is whether the cause of action has arisen at all as the notice sent by the complainant to the accused was returned as "unclaimed." The conditions pertaining to the notice to be given to the drawer, have been formulated and incorporated in Clauses (b) and (c) of the proviso to Section 138(1) of the Act. The said clauses are extracted below :
"(b) The payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque within fifteen days of the receipt of the said notice."
"18. On the part of the payee he has to make a demand by "giving a notice" in writing. If that was the only requirement to complete the offence on the failure of the drawer to pay the cheque amount within 15 days from the date of such "giving", the travails of the prosecution would have been very much lessened. But the legislature says that failure on the part of the drawer to pay the amount should be within 15 days "of the JUDGMENT/SUNIL VS. MUKESH/CC NO.155/1/08/U.S.138N.I.ACT/CONVITED/04.04.2009/Page 10 of 18 receipt" of the said notice. It is, therefore, clear that "giving notice" in the context is not the same as receipt of notice. Giving is a process of which receipt is the accomplishment. It is for the payee to perform the former process by sending the notice to the drawer in the correct address."
"19. In Black's Law Dictionary, "giving of notice" is distinguished from "receiving of the notice." (vide page 621) "A person notifies or gives notice to another by taking such steps as may be reasonably required to inform the other in the ordinary course, whether or not such other actually comes to know of it." A person "receives" a notice when it is duly delivered to him or at the place of his business." "20. If a strict interpretation is given that the drawer should have actually received the notice for the period of 15 days to start running no matter that the payee sent the notice in the correct address, a trickster cheque drawer would get the premium to avoid receiving the notice by different strategies and he could escape from the legal consequences of Section 138 of the Act. It must be borne in mind that Court should not adopt an interpretation which helps a dishonest evader and clips an honest payee as that would defeat the very legislative measure."
"21. In Maxwell's "Interpretation of Statutes," the learned author has emphasized that "provisions relating to giving of notice often receive liberal interpretation." (vide page 99 of the 12th Edn.). The context envisaged in Section 138 of the Act invites a liberal interpretation for the person who has the statutory obligation to give notice because he is presumed to be the loser in the transaction and it is for his interest the very provision is made by the legislature. The words in Clause (b) of the proviso to Section 138 of the Act show that payee has the statutory obligation to "make a demand" by giving notice. The thrust in the clause is on the need to "make a demand". It is only JUDGMENT/SUNIL VS. MUKESH/CC NO.155/1/08/U.S.138N.I.ACT/CONVITED/04.04.2009/Page 11 of 18 the mode for making such demand which the legislature has prescribed. A payee can send the notice for doing his part for giving the notice. Once it is despatched his part is over and the next depends on what the sendee does."
"22. It is settled that a notice refused to be accepted by the addressee can be presumed to have been served on him, (vide Harcharan Singh v. Smt. Shivrani, (1981) 2 SCC 535 : (AIR 1981 SC 1284), and Jagdish Singh v. Natthu Singh, (1992) 1 SCC 647 : (1992 AIR SCW 1747 : AIR 1992 SC 1604)."
"23. Here the notice is returned as unclaimed and not as refused. Will there be any significant difference between the two so far as the presumption of service is concerned ? In this connection a reference to Section 27 of the General Clauses Act will be useful. The section reads thus :
"27. Meaning of service by post. Where any Central Act or Regulation made after the commencement of this Act authorizes or requires any document to be served by post, whether the expression "serve" or either of the expressions "give" or "send" or any other expression is used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing, prepaying and posting by registered post, a letter containing the document, and unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post."
"24. No doubt Section 138 of the Act does not require that the notice should be given only by "post". Nonetheless the principle incorporated in Section 27 (quoted above) can profitably be imported in a case where the sender has despatched the notice by post with the correct address written on it. Then it JUDGMENT/SUNIL VS. MUKESH/CC NO.155/1/08/U.S.138N.I.ACT/CONVITED/04.04.2009/Page 12 of 18 can be deemed to have been served on the sendee unless he proves that it was not really served and that he was not responsible for such nonservice. Any other interpretation can lead to a very tenuous position as the drawer of the cheque who is liable to pay the amount would resort to the strategy of subterfuge by successfully avoiding the notice."
"25. Thus when a notice is returned by the sendee as unclaimed such date would be the commencing date in reckoning the period of 15 days contemplated in Clause (d) to the proviso of Section 138 of the Act. Of course such reckoning would be without prejudice to the right of the drawer of the cheque to show that he had no knowledge that the notice was brought to his address. In the present case the accused did not even attempt to discharge the burden to rebut the aforesaid presumption."
17. In the present case also, it is admitted by the accused that he is residing at the same address which is mentioned on the Registered Envelope Ex. CW1/7 containing legal notice. It is not the case of accused that the address mentioned on Ex. CW1/7 containing legal notice demanding cheque amount, is in any manner incomplete or incorrect. Besides the name of the accused, even his father's name is clearly mentioned on Ex. CW1/7 and, therefore, there is no reason as to why this letter was not served on the accused. The report of postal authority that despite repeated attempt nothing could be learnt/found about the address of the accused appears to be a manipulated report. It may be mentioned here that it is not the case of the accused that in ordinary course also, there is any problem being faced by the accused in receipt of letters at his address. Summons in this case were issued to the accused on this address which got served at the very first instance, personally on the accused. Even the courier through which summons were sent to the accused were served upon him without any problem. The stand taken by the accused that the complainant JUDGMENT/SUNIL VS. MUKESH/CC NO.155/1/08/U.S.138N.I.ACT/CONVITED/04.04.2009/Page 13 of 18 manipulated this report is without any force. It is anybody's guess as to why the complainant would do so. A complainant in a Negotiable Instruments Act case is interested in his payment and it was in the interest of complainant that payment is made by the accused on receipt of notice. Thereby the complainant was to gain, by not coming to the court and paying fees of a lawyer. Accordingly, u/s 27 of General Clauses Act, 1897, there is a presumption that the notice was served on the accused. The accused failed to rebut the presumption and he failed to make payment of the cheque amount to the complainant, within the stipulated period and the complaint is preferred within the stipulated period.
18. It is lastly argued that what was handed over to the accused was not a cheque as it was without a date and therefore the complaint is not maintainable.
19. In the case of Ravi Chopra Vs. State & Another 2008 (102) DRJ 147 (Delhi High Court), the facts were that complaint u/s 138 N. I. Act was filed by the complainant on the ground that between 2000 to 2003 accused took a loan of Rs. 8 lakhs from the complainant and issued certain cheques which were dishonoured. The defence of the accused in the case was that complainant did not extend any loan but in fact the amount of Rs. 8 lakhs was invested by the complainant in real estate business by brother of accused and the cheques in question were issued by the accused on the insistence of complainant as security. The accused claimed that when he signed the cheques, they were blank i.e. without filling the name, date and crossings. The accused further claimed that he had repaid the loan amount in October 2000 but the complainant did not return the cheques stating that he would return the cheques in due course. The accused claimed that complaint was filed by the complainant after filling the name of the payee, date and crossing of the cheques. During trial accused filed an application for sending the cheques with specimen handwriting of complainant and accused to handwriting expert claiming that it would falsify the entire case of complainant. The said application was dismissed by Ld. Trial court and matter went to JUDGMENT/SUNIL VS. MUKESH/CC NO.155/1/08/U.S.138N.I.ACT/CONVITED/04.04.2009/Page 14 of 18 Hon'ble Delhi High Court. Before Hon'ble Delhi High Court, it was argued on behalf of accused that handwriting expert opinion would mainly probablise the accused's defence in the trial as expert opinion would show the date of ink to ascertain the time when signatures were appended and the material particulars were filled up subsequently. It was also argued that it would show that what was handed over by the accused to the complainant was not a cheque within the meaning of Section 138 N. I. Act. The accused also claimed that report of expert regarding difference in ink would show that there was no liability of accused when cheques were presented for encashment. Hon'ble Delhi High Court examined Section 87, 20, 49, 86 and 125 of N. I. Act and it was held as follows in paragraph no. 17, 18, 19 and 20.
"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 N. I. 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 JUDGMENT/SUNIL VS. MUKESH/CC NO.155/1/08/U.S.138N.I.ACT/CONVITED/04.04.2009/Page 15 of 18 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 N. I. 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 N. I. 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 N. I. 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 JUDGMENT/SUNIL VS. MUKESH/CC NO.155/1/08/U.S.138N.I.ACT/CONVITED/04.04.2009/Page 16 of 18 presented for payment by the drawee. There is no provision in the N. I. 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 N. I. 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 N. I. Act."
20. Hon'ble Delhi High Court came to conclusion that contention of the accused that if sig natures on the cheques are shown to be much prior to the date of filling up of the ma terial particulars on the cheque would probablise the defence of the accused cannot be accepted. It was held that it matters little if the name of the payee, date and amount are filled up at a subsequent point of time subject to proviso to Sec tion 118 N. I. Act. It was further observed by Hon'ble Delhi High Court that de termination of the time when signatures were appended cannot explain the fact that accused had discharged the entire liability when the cheques were presented for payment. It was held that this defence of the accused that liabili ty was discharged prior to presentation of cheques cannot be proved by report of handwriting expert and mere oral assertion of accused that liability was dis charged and no receipts were issued would be insufficient to rebut the pre sumption u/s 138 N. I. Act. Section 138 N. I. Act would require some other posi tive evidence to be led by the accused to show that he has repaid the amount to the complainant. It was held that merely because there is a FSL report to show that handwriting, ink and time of filling the material particulars is differ ent from that of signatures, that by difference will not go to prove that accused JUDGMENT/SUNIL VS. MUKESH/CC NO.155/1/08/U.S.138N.I.ACT/CONVITED/04.04.2009/Page 17 of 18 had discharged his liability towards the complainant before presentation of the cheques.
21. In view of above discussion, the accused is squarely guilty of dishonour of his cheque Ex. CW1/A for the reasons insufficiency of funds and by not making the payment of the cheque amount to the complainant within 15 days of receipt of notice and accord ingly, the accused is held guilty and convicted for the offence u/s 138 of Negotiable In struments Act.
ANNOUNCED IN OPEN COURT ON 04th April 2009 DIGVINAY SINGH ADDITIONAL CHIEF METROPOLITAN MAGISTRATE03 IPR, ROHINI, DELHI JUDGMENT/SUNIL VS. MUKESH/CC NO.155/1/08/U.S.138N.I.ACT/CONVITED/04.04.2009/Page 18 of 18