Delhi District Court
Chengalvaraya Naidu V. Jagannath & Ors. ... vs Reena 172 (2010) on 21 January, 2014
IN THE COURT OF SH. APOORV SARVARIA, CIVIL JUDGEI, NEW
DELHI DISTRICT, NEW DELHI
C.C. No: 407/11
Unique Case ID No.02403R0099182011
Dayawati Besoya
W/o. Sh. Raghubar Dayal Besoya
R/o. H. No. 21, Garhi, East of Kailash,
New Delhi110065.
.....Complainant
Versus
Shyam Pal
S/o. Late Sh. Badley Singh
R/o. H. No. 113, Garhi, East of Kailash,
New Delhi110065.
.....Accused
COMPLAINT UNDER SECTION 138 OF THE
NEGOTIABLE INSTRUMENTS ACT, 1881
Date of Institution: 09.07.2009
Date of Reserving Order: 06.11.2013
Date of Judgment: 21.01.2014
JUDGMENT
Brief facts
1. The brief facts of the present complaint filed U/s. 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as "NI Act") are that the complainant Smt Dayawati Besoya is a family friend of accused being resident of same locality. It is stated that on 31.07.2008, the accused Sh. Shyam Pal came to the residence of the complainant and demanded a friendly loan of Rs. 5 lacs in good faith for his personal need and promised to return the same on 03.12.2008 for which the complainant had orally told him that she had already CC No. 407/11 Dayawati Besoya v. Shyam Pal Page 1 of 8 given a loan of Rs. 5 lacs to the accused on 01.05.2008 and she has no sufficient funds but the accused requested again and again. Considering the old relations, complainant agreed to give further loan of Rs. 5 lacs to accused and on 31.07.2008, complainant paid accused Rs. 5 lacs by raising money from her husband and sons to help the accused.
2. It is further stated that for repaying the loan, the accused issued cheque bearing no. 913340 dated 03.12.2008 for Rs. 5 lacs drawn on State Bank of Bikaner and Jaipur, Amar Colony, New Delhi. The complainant presented the said cheque but the same was returned unpaid with remarks "funds insufficient" as per the return memo dated 30.04.2009. Thereafter, the complainant issued legal notice dated 27.05.2009 through registered AD and UPC. It is stated that despite service of the legal notice accused did not make the payment of the cheque amount within the prescribed period. Therefore, it is stated that the accused is liable for the commission of the offence U/s. 138 of the NI Act.
Proceedings Before Court
3. The present complaint was received by way of assignment on 11.07.2009 Summons were issued against the accused. The accused entered appearance and took bail and notice of accusation was framed against the accused on 10.09.2010 to which accused pleaded not guilty and claimed trial.
4. In support of her case, the complainant produced CW1 Sh. Raghubar Dayal Besoya who tendered his evidence by way of affidavit Ex.CW1/A and relied on documents Ex.CW1/1 to Ex.CW1/8. Thereafter, CW1 was crossexamined after which the complainant closed her evidence.
5. During examination conducted U/s. 313 Cr.P.C, the accused stated that he never took loan of Rs. 5 lacs from the complainant. He stated that he had approached the husband of complainant Sh. R D Besoya to arrange a loan of Rs. 1 crore CC No. 407/11 Dayawati Besoya v. Shyam Pal Page 2 of 8 and for that he offered 12% commission for himself and for that commission, accused issued three cheques two of Rs. 5 lacs each and the third cheque of Rs. 2 lacs. He further stated that the complainant misused the three cheques. The cheque of Rs. 2 lacs was deposited in the bank account of Ms. Meenakshi Besoya, daughter of complainant. The loan of Rs. 1 crore was never got arranged. He further stated that he received the legal notice dated 27.05.2009 Ex.CW1/4.
6. In support of his defence, the accused produced DW1 Sh. H C Kohli from State Bank of Bikaner and Jaipur, Amar Colony, New Delhi who was examined and discharged. The accused also produced DW2 Sh. Subhash Chander from the OBC Bank, East of Kailash Branch, Sant Nagar, New Delhi who produced the statement of accounts Ex.DW2/A. Accused also produced DW3 Ms. Meenakshi Besoya who was examined and discharged. Therefore, the defence evidence was closed.
Arguments of Advocates
7. Sh. P C Sharma, Ld. Advocate for complainant submitted that presumption U/s. 139 of NI Act is running against the accused and the accused has not rebutted the said presumption. He further relied on the decision in A D Circle Pvt. Ltd. v. Shri Shankar 48 (1992) DLT 5 and Gautam Nimani v. S N Surekha 2003(2) JCC (NI) 177. On the other hand, Sh. Jayant Sood, Ld. Advocate for accused stated that accused has rebutted the presumption by leading evidence in support of his defence. He further submitted that the loan transaction is not proved by the complainant. In support of his submission, he relied upon S S Chouhan v. State 2012 (3) AD (Delhi) 545, M/s. Pawan Enterprises v. Satish H. Verma 2003 CRJ. L.J. 2146, Bombay High Court, Kishna Janardhan Bhat v. Dattatraya G. Hegde (2008) SCC 54, S P CC No. 407/11 Dayawati Besoya v. Shyam Pal Page 3 of 8 Chengalvaraya Naidu v. Jagannath & Ors. (1994) 1 SCC 1, M.S. Narayana Menon @ Mani v. State of kerala & Anr. (2006) 6 SCC 39 and Vipul Kumar Gupta v. Vipin Gupta 2012 VIII AD (Delhi) 218.
8. This court has heard Ld. Advocates for the complainant as well as accused and perused the record.
Findings
9. The signatures on the cheque and issuance of the cheque no. 913340 dated 03.12.2008 for Rs. 5 lacs drawn on State Bank of Bikaner and Jaipur, Amar Colony, New Delh Ex.CW1/2 are admitted and, therefore, the execution of the cheque is not disputed. Hence, presumption U/s.139 of the NI Act is raised.
10.In Rangappa v. Sri Mohan AIR 2010 SC 1898 it was observed by the Hon'ble Supreme Court as under :
"14. In light of these extracts, we are in agreement with the respondentclaimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat (supra) may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the CC No. 407/11 Dayawati Besoya v. Shyam Pal Page 4 of 8 offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused/defendant cannot be expected to discharge an unduly high standard or proof. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of 'preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own. " (emphasis added)
11. In view of the decision in Rangappa laid down by the Supreme Court, the presumption raised under Section 139 of the NI Act is of legally enforceable debt or liability and it is for the accused to raise a probable defence to rebut the presumption.
12.The defence of the accused is that the cheque Ex.CW1/2 is one of the three cheques issued to husband of the complainant Sh. R D Besoya as commission to him for arranging the loan of Rs. 1 crore for the accused and no loan of Rs. 5 lacs as alleged by the complainant was granted to the accused. To prove the defence, the accused has produced DW3 Ms. Meenakshi Besoya, daughter of complainant who has deposed in her examination in chief that no transaction between the accused and her had happened. She admitted that Rs.2 lacs were credited in her bank account as reflected in her passsbook Ex.DW3/1 showing the credit of Rs. 2 lacs vide cheque no.097357 on 07.11.2008. She also deposed CC No. 407/11 Dayawati Besoya v. Shyam Pal Page 5 of 8 in her examination in chief that it was an informal transaction as the accused had issued the cheque no. 097357 in her name as she and her mother (complainant) belong to one family and that cheque no. 097357 was issued to return a partial amount of loan granted to accused by the complainant.
13. The other two witnesses from bank DW1 Sh. H C Kohli from State Bank of Bikaner and Jaipur, Amar Colony and DW2 Sh. Subhash Chander from OBC Bank, East of Kailash have also been produced to show the credit entry of Rs. 2 lacs in the bank account of DW3 Ms. Meenakshi Besoya. DW2 Sh. Subhash Chander also produced statement of account Ex. DW2/A showing the said entry in the account statement of M/s. Maa Saraswati Motors. Except for the above evidence, the accused has not led any other evidence to show in what circumstances the cheque in question in the present complaint came to be issused. Merely because the accused as shown that a cheque of Rs. 2 lacs was credited in the bank account of the daughter of complainant does not go on to say anything about issuance of the cheque no. 913340 i.e. The cheque in question in the present complaint. The accused has also not put himself in the witness box or has not called any witness to depose in what circustances the cheque no. 913340 came to be issued. In In V.S. Yadav Vs. Reena 172 (2010) DLT 561, the High Court of Delhi has held that there is no presumption of law that the explanation given by the accused was truthful. It was further held therein that mere suggestion to the witness that cheques were issued as securities or mere explanation given in the statement of accused U/s 281 Cr. P.C. that the cheques were issued as security, does not amount to proof. Moreover, the offence U/s 138 of the N.I. Act is a technical offence and the Complainant is only supposed to prove that the cheques issued by the accused were dishonoured, his statement that cheques were issued against the liability or debt is sufficient proof of debt or liability and the onus shifts to accused to CC No. 407/11 Dayawati Besoya v. Shyam Pal Page 6 of 8 show the circumstances against which cheques came to be issued and this can be proved by the accused only by way of evidence and not by leading no evidence. (See para 5, DLT @ p.563).
14. The accused has indirectly tried to make out such a defence to include some how the entry of cheque no. 097357 credited in the account of complainant's daughter. However, the said entry has no bearing in respect of the cheque in question. Therefore, the accused has not been able to raise any probable defence in support of his case and has failed to rebut the presumption raised U/s. 139 of the NI Act.
15.Since the accused has failed to rebut the presumption raised U/s. 139 of the NI Act, there is no need to go into complainant's evidence for proving the complainant's case. Even otherwise, CW1 Sh. Raghubar Dayal Besoya has deposed the facts stated in the complaint. Even during his cross examination CW1 was consistent with his stand. There is nothing coming out in the cross examination of CW1 Sh. Raghubar Dayal Besoya which would probablise the defence raised by the accused or falsify the case of the complainant.
16.The arguments raised on behalf of the accused that the complainant witness was not authorised to depose is misconceived. The General Power of Attorney dated 09.07.2009 Ex.CW1/1 authorises Sh. Raghubar Dayal Besoya to act on behalf of the complainant and to lead evidence or to do any other things on behalf of the complainant. CW1 Sh. R D Besoya also had personal knowledge of the transation in question as can been seen from his deposition (See. Gautam Nimani v. S N Surekha 2003(2) JCC (NI) 177) in which it was held that an attorney is competent to make statement on behalf of the complainant because he steps into the shoes of the complainant. The decisions relied upon by Ld. Advocate for the accused turn on their own facts and are distinct from the material facts of the present complaint.
CC No. 407/11 Dayawati Besoya v. Shyam Pal Page 7 of 817. Therefore, the complainant has been able to prove that the cheque in question i.e. Cheque no. 913340 Ex.CW1/2 dated 03.12.2007 for Rs. 5 lacs was issued in discharge of legally recoverable debt owed to the complainant. The accused is convicted for the offence punishable U/s. 138 of the NI Act in respect of cheque Ex.CW1/2. The accused shall be heard on the point of sentence on 07.02.2014 at 2.00 pm. Announced in the Open Court (Apoorv Sarvaria) on 21st January, 2014 Civil JudgeI/MM, New Delhi District New Delhi CC No. 407/11 Dayawati Besoya v. Shyam Pal Page 8 of 8