Delhi District Court
Rajesh vs . Kartik Behera Cc No. 12941//17 Page No. ... on 1 May, 2019
IN THE COURT OF MR. MRIDUL GUPTA, METROPOLITAN MAGISTRATE,
SOUTH-WEST, DWARKA, DELHI
In Re:
CNR No. DLSW 02-017657-2017
CC No. 12941/17
Rajesh
S/o Sh. Rajbir
R/o Chudana Pana, Near Animal Hospital,
Jharoda, New Delhi-110072.
............Complainant
Versus
Kartik Behera
R/o Staff Camp, (Barrage)
CRPF Camp, North Area, (Uttar Chhetra)
Head Office, (Mukhalaya)
(Near N.S. Hospital),
R.K. Puram, New Delhi
.............Accused
(1) Offence complained of or
proved : 138 N.I. Act
(2) Plea of accused : Pleaded not guilty
(3) Date of institution of case : 04.07.2017
(4) Date of conclusion of arguments: 16.03.2019
(5) Date of Final Order : 01.05.2019
(6) Final Order : Convicted
Rajesh Vs. Kartik Behera CC No. 12941//17 Page no. 1 of 12
JUDGMENT
1. Vide this judgment I shall dispose of the complaint filed by the complainant under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the 'Act ').
2. Brief facts relevant for the decision of the case are as under:-
The complainant alleges that he developed friendly relation with accused in 2013 when the latter was posted in CRPF camp, Jharoda Kalan, Delhi. It is alleged that in February 2015, accused borrowed sum of Rs. 6 lacs as friendly loan from complainant. Upon asking for repayment, the accused in discharge of his loan liability gave one cheque of Rs. 6,00,000/- i.e. cheque in question bearing no. 563214 dated 16.05.2017 drawn on State Bank of India, CRPF Campus, Jharoda Kalan, Delhi to complainant towards repayment of loan, with an assurance of its encashment. After due date of cheque in question, the complainant presented the cheque in his account maintained at Punjab Nation Bank, Jharoda Kalan, Delhi, which was returned with the remarks "Exceeds Arrangement" vide bank return memo dated 23.05.2017. Thereafter, complainant served a legal notice dated 05.06.2017 upon the accused through his counsel demanding the said amount. The accused sent reply dated 23.06.2017 to said legal notice, whereby he denied taking loan of Rs. 6 lacs from complainant and stated that he had taken only a loan of Rs. 40,000/- from complainant and had given a blank security cheque to complainant. The loan had been repaid in full and the security cheque was misused by the complainant. Thereafter, complainant has filed the present complaint case with the submission that accused be summoned, tried and punished according to law.
3. In his pre-summoning evidence, complainant examined himself on affidavit Ex. CW-1/1. He reiterated the contents of complaint and placed on record, original cheque of Rs. 6,00,000/- i.e. cheque in question bearing no. 563214 dated 16.05.2017 drawn on State Bank of India, CRPF Campus, Jharoda Kalan, Delhi as Ex. CW-1/A, cheque returning memo dated 23.05.2017 as Ex. CW-1/B, legal Rajesh Vs. Kartik Behera CC No. 12941//17 Page no. 2 of 12 demand notice dated 05.06.2017 as Ex. CW-1/C, Postal receipts as Ex. CW-1/D and Ex. CW-1/E, tracking reports as Ex. CW-1/F, returned envelop as Ex. CW-1/G and reply to legal notice as Ex. CW-1/H.
4. Upon appreciation of pre-summoning evidence, accused was summoned for an offence punishable under Section 138 of the Act and notice under Section 251 Cr.P.C. for this offence was framed upon accused on 12.02.2018 to which he pleaded not guilty and claimed trial. He admitted his signature on the cheque in question, however denied filling in any of the remaining details. He stated that he did not even know the complainant and denied taking any loan from complainant. He stated that he had taken loan of Rs. 40,000/- from one Raju in January 2013 and given the cheque in question as blank signed security cheque to him. He had repaid the loan to Raju one year later. However, the cheque was not returned to him and same has been misused by complainant. He admitted the receipt of legal notice and also sending reply to the same.
5. The accused moved an application to cross-examine the complainant. Complainant as CW-1 was duly cross examined by the accused. No other witness was produced by the complainant and he closed his evidence by giving a separate statement to this effect. Thereafter, statement of accused under Section 313 Cr.P.C. was recorded in which all the incriminating evidence were put to him to which accused reiterated the stand taken by him in answer to notice U/s 251 Cr.P.C.
6. Accused preferred to lead evidence in his defence and had examined himself as DW-1 and one Sh. Shashi Bhusan Pingua as DW-2. Both the witnesses were cross-examined by counsel for complainant. The accused did not examine any other witness and vide his statement, defence evidence was closed.
7. Thereafter, matter was listed for final arguments. It was argued by the Ld. counsel for the complainant that this is a fit case for conviction of the accused as all the essential ingredients of Section 138 of the Act read with Section 139 of the Rajesh Vs. Kartik Behera CC No. 12941//17 Page no. 3 of 12 Act have been fulfilled and that the same has been aptly demonstrated by the complainant before the court. It was argued that accused admitted his signatures on the cheque in his plea of defence recorded at the time of framing of notice under Section 251 Cr.P.C as well as in his statement U/s 313 Cr.P.C. He argued that in the reply to legal demand notice, accused admitted to taking of loan of Rs. 40,000/- from complainant and giving the cheque in question to complainant as security cheque. However, in the present proceedings, in answer to notice u/s 251 Cr.P.C and during trial, accused took a different version stating that he had taken the loan from one Raju and also given the cheque to said Raju. It was thus argued that the accused had taken different and inconsistent lines of the defence. It was argued that accused failed to raise the probable defence to disprove the case of complainant and to rebut the presumption under Section 139 NI Act. Therefore, accused be convicted for the offence under Section 138 of the Act.
8. Per contra, on behalf of accused, Ld. Counsel reiterated the submissions made by accused in his plea of defence at the time of framing of notice under Section 251 Cr.P.C and in his statement under Section 313 Cr.P.C. He also argued that complainant did not sufficiently disclose the sources of funds for present loan and also did not show the present loan in his ITR. He argued that there was no written document of the loan. He argued that evidence of complainant suffered from material lapses and was not sufficient to establish the case against accused. He submitted that complainant has failed to prove his case beyond reasonable doubt and accused is entitled to be acquitted of offence u/s 138 of the Act. He relied upon Sanjay Mishra v. Kanishka Kapoor, Crmnl Appln. No. 4694/2008, DoD 24.02.2009 (Bombay High Court), K.Subramani Vs. K.Damodara Naidu, 2015 (1) DCR 5, Rangappa v. Mohan, AIR 2010 SC 1898.
9. I have perused the entire record as well as evidence led by the complainant as well as by the accused.
10. Before appreciating the facts of the case in detail for the purpose of decision, let relevant position of law be discussed first:-
Rajesh Vs. Kartik Behera CC No. 12941//17 Page no. 4 of 12 For the offence under Section 138 of the Act to be made out against the accused, the complainant must prove the following points, that:-
1. the accused issued a cheque on account maintained by him with a bank.
2. the said cheque had been issued in discharge, in whole or in part, of any legal debt or other liability.
3. the said cheque has been presented to the bank within a period of three months from the date of cheque or within the period of its validity.
4. the aforesaid cheque, when presented for encashment, was returned unpaid/dishonoured.
5. the payee of the cheque issued a legal notice of demand to the drawer within 30 days from the receipt of information by him from the bank regarding the return of the cheque.
6. the drawer of the cheque failed to make the payment within 15 days of the receipt of aforesaid legal notice of demand.
11. The Act raises two presumptions in favour of the holder of the cheque i.e. Complainant in the present case; firstly, in regard to the passing of consideration as contained in Section 118 (a) and secondly, a presumption that the holder of cheque receiving the same of the nature referred to in Section 139 discharged in whole or in part any debt or other liability.
Section 118 of the N.I Act provides :
"Presumptions as to negotiable instruments: Until the contrary is proved, the following presumptions shall be made: (a) of consideration - that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred was accepted, indorsed, negotiated or transferred for consideration;"
Section 139 of the N.I Act further provides as follows:
"Presumption in favour of holder - it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability".
Rajesh Vs. Kartik Behera CC No. 12941//17 Page no. 5 of 12
12. For the offence under Section 138 of the Act, the presumptions under Sections 118(a) and 139 have to be compulsory raised as soon as execution of cheque by accused is admitted or proved by the complainant and thereafter burden is shifted to accused to prove otherwise. These presumptions shall be rebutted only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability etc. A presumption is not in itself evidence but only makes a prima facie case for a party for whose benefit it exists. Presumptions both under Sections 118 and 139 are rebuttable in nature. Same was held by the Hon'ble Supreme Court of India in Hiten P. Dalal v. Bratindranath Banerjee [(2001) 6 SCC 16].
13. In the present case, accused has admitted his signatures on the cheque in question, in the notice U/s 251 Cr.P.C. He did not deny his signature on the cheque either in cross-examination of complainant, or his statement U/s 313 Cr.P.C and also in defence evidence. Reference can be made to Judgment of Apex Court in Rangappa v. Mohan, AIR 2010 SC 1898,that, "Once the cheque relates to the account of the accused and he accepts and admits the signatures on the said cheque, then initial presumption as contemplated under Section 139 of the Negotiable Instruments Act has to be raised by the Court in favour of the complainant."
Also in the case of K. Bhaskaran Vs. Sankaran Vaidhyan Balan 1999 (4) RCR (Criminal) 309, it has been held by the Hon'ble Supreme Court as under:
"As the signature in the cheque is admitted to be that of the accused, the presumption envisaged in Section 118 of the Act can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears. Section 139 of the Act enjoins on the court to presume that the holder of the cheque received it for the discharge of any debt or liability."
It has been held in M/s. Kumar Exports v. M/s. Sharma Carpets, [2009 A.I.R. (SC) 1518] that the accused may rebut these presumptions by leading direct evidence and in some and exceptional cases, from the case set out by the complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial.
Rajesh Vs. Kartik Behera CC No. 12941//17 Page no. 6 of 12 Further, the burden may be discharged by the accused by showing preponderance of probabilities and the onus on the accused is not as heavy as it is on the complainant to prove his case. In light of aforestated legal position, let us carry out a scrutiny of the evidence led at the trial.
14. The principle defence taken by the accused in answer to notice under Section 251 Cr.P.C, statement U/s 313 Cr.P.C and his examination in chief as DW-1, is that he did not know the complainant and had not taken any loan from him. Rather he had taken loan of Rs. 40,000/- from one Raju in January 2013 and given the cheque in question as blank signed security cheque to him. He had repaid the loan to Raju one year later. However, the cheque was not returned to him and same has been misused by complainant in connivance with Raju.
15. However, initially, in the reply (Ex. CW-1/H) sent by accused to legal notice under the Act, he put forth a totally different version of defence, which can be summed up as follows. He admitted taking friendly loan from complainant in the amount of Rs. 40,000/- only, in November 2013, for a period of six months. Here, accused alleged that he had issued a blank cheque in favor of addressee no. 2 i.e. the complainant, as a security cheque. Accused also averred that he had repaid principal amount of Rs. 40,000/- alongwith interest to complainant, in the next six months. But he was late by one week time in making payment of last two installments and complainant started demanding exorbitant amount of Rs. 10,000/- against the late payment. On demand of the return of blank security cheque, complainant threatened the accused of misuse of the cheque. The accused ignored the security cheque on mutual trust. But complainant retained the cheque under nefarious design and misused the same in present case.
16. Perusal of the reply to legal notice reveals that a contradictory and inconsistent line of defence has been taken, from the one taken at trial. The accused, i.e. DW-1, also admitted during his cross-examination that he did not mention anything about the loan taken from Raju and cheque in question being given to him in the reply Ex. CW-1/H. However accused did not offer any Rajesh Vs. Kartik Behera CC No. 12941//17 Page no. 7 of 12 explanation as to the same. Prima facie, accused has not explained on what basis he denied acquaintance with complainant during trial, when, in the reply he had already admitted to taking loan of Rs. 40,000/- from him and issuance of cheque in question to him. Even otherwise, the version of accused regarding loan from one Raju and issuance of cheque to him, remains a mere ipse dixit of the accused i.e. DW-1 and his friend DW-2. Accused did not produce any material evidence, to show the actual existence of any such loan transaction with Raju. Thus the defence taken by accused during trial is not tenable and clearly appears to be an afterthought in an attempt to improve upon his case.
17. Even considering the defence taken by accused in reply to legal demand notice, he averred repayment of loan of Rs. 40,000/- to complainant and misuse of security cheque. However, accused did not lead any evidence in form of any receipt or other document to show repayment of loan to complainant. The reply to legal notice also reveals that as per accused he repaid the loan within six months of November 2013, i.e by May-June 2014. But, complainant did not return his cheque and threatened him of misuse of the same. However, the cheque in question has been dishonored vide cheque returning memo dated 23.05.2017 for reason "Exceeds Arrangement" (Ex. CW-1/B) and not for any other reason. There is no explanation or evidence as to why, if complainant issued specific threats of misuse of the cheque, stop payment instructions were not issued by accused to bank, for a period of almost three years. The accused has also not averred or placed on record any evidence to show that he gave any written notice to complainant or filed any complaint against the complainant for wrongful retention or misuse of his cheque. It is implausible that a reasonably prudent person, who has been issued threat of misuse of the cheque, would turn a blind eye to the same for almost three years. Thus, even the defence taken by accused in reply to legal demand notice under the Act, is not tenable.
18. Regarding the averment that cheque was given as blank signed cheque which was misused by complainant after repayment of loan, the same is also not a credible defence. Even if for the sake of argument, it is considered that the Rajesh Vs. Kartik Behera CC No. 12941//17 Page no. 8 of 12 accused gave a blank signed cheque to the complainant, once accused has admitted his signatures on the cheque he cannot escape his liability on the ground that the particulars have not been filled in by him, or that signatures on cheque and the contents are filled in different writings and inks. When such a cheque containing blanks is signed and handed over, it means that the person signing it has given implied authority to the holder of the cheque, to fill up the blank which he has left. It has been clearly laid down in Section 20 of Negotiable Instruments Act 1881, that where one person signs and delivers to another a Negotiable Instrument either wholly blank or having written thereon an incomplete negotiable instrument, he thereby gives, "prima facie authority to the holder thereof to make or complete, as the case maybe, upon it a negotiable instrument". In the case of Satish Jayantilal Shah v. Pankaj Mashruwala and Anr. 1996 Cri. L. J. 3099, it has been held that:
"no law provides that in case of any negotiable instruments entire body has to be written by maker or drawer only."
In the case of Moideen v. Johny 2006 (2) DCR 421, it has been held that when a blank cheque is issued, the drawer gives an authority to the person to whom it is issued, to fill it up at the appropriate stage with necessary entries and to present it to the bank. Thus, the accused can not dispute the contents of the cheque in question.
19. Ld. Counsel for accused also argued that that complainant did not sufficiently disclose the sources of funds for present loan. It was argued that complainant admitted in cross-examination that he had not placed on record any document to show that he had funds to give the loan. He argued that there was no written document of the loan. It was argued that same casts doubt on case of complainant.
20. However, these arguments of Ld. Counsel for accused are also devoid of any merit. Perusal of the evidence shows that as early as in reply to legal notice, accused has not denied financial transaction with complainant and also admitted Rajesh Vs. Kartik Behera CC No. 12941//17 Page no. 9 of 12 the factum of taking loan from the complainant, though the amount of loan is stated to be Rs.40,000/- and not Rs.6,00,000/-. Thus absence of any written agreement of loan does not derive much significance. Moreover the complainant was never put any specific question in his cross-examination seeking explanation or details as to sources of funds for giving present loan, nor was the complainant put any suggestion that he did not have sufficient sources of funds to advance the loan. In light of the same, a mere vague suggestion that complainant had not placed on record any document to show that he had funds to give the loan, is not sufficient to discharge the reverse onus cast on accused to punch holes in case of complainant, more so when accused has admitted borrower-lender relationship with complainant. The decision of Hon'ble Supreme Court in K.Subramani Vs. K.Damodara Naidu, 2015 (1) DCR 5 relied upon by accused is distinguishable on this aspect as in that matter the sources of funds of complainant for granting loan, was under question, which is not so in present case. In that matter, the decision was rendered upon consideration of the different sources of funds for the loan as disclosed by complainant.
21. Reliance in this regard can also be placed on decision of Hon'ble High Court of Delhi, in Sanjay Arora V. Monika Singh, Crl. Appeal No. 98/2017, dated 31.05.2017, wherein it was observed:
"Mere admission of the complainant that he was earning only Rs. 12,000 per month from small business or his failure to file income tax returns, or his omission to produce the bank passbook or to examine Chhotu as a witness in corroboration, are inconsequential. In order to rebut the statutory presumption, it was the burden of the respondent to prove the facts she had pleaded in answer to the notice under Section 251 Cr.P.C. No material in support of such plea having come on record, the statutory presumption under Section 139 Negotiable Instruments Act in the case at hand has not been rebutted."
In the present case also different lines of defence have been taken by the accused as discussed above. However he has failed to produce any material in support of either of his plea of defence.
22. Ld. Counsel for accused also argued that complainant admitted in his Rajesh Vs. Kartik Behera CC No. 12941//17 Page no. 10 of 12 cross-examination that his annual income was Rs. 8 lacs to Rs. 10 lacs, however he did not file ITR and deposited only Rs. 20,000/- to Rs. 40,000/- in bank account. It was argued that same makes the amount of loan given as unaccounted money and not recoverable in proceedings under Section 138 of the Act. However, this argument of Ld. Counsel for accused is also bereft of any merit, as even if it is considered that complainant did not show the present loan in his ITR, such mere non-disclosure does not defeat his claim. It is trite law that the provisions of Section 269SS of Income Tax Act, 1961, prohibit taking or accepting loan over amount of Rs. 20,000/- in cash and do not make the amount of loan given in cash, unrecoverable in proceedings under Section 138 of the Act. Reliance in this regard can also be placed upon the decision of Hon'ble High Court of Delhi in Lekh Raj Sharma v. Yashpal Sharma, (Crl.L.P. 567/2014),D.O.D. 30.06.2015, wherein it was observed:
".......21. The finding that, as the amount of loan disbursed to the respondent was not shown in the balance sheet and income tax return, the appellant could not be said to have proved its case beyond reasonable doubt, is also erroneous. In this regard, reference may be placed on the decisions of the Bombay High Court in:
........
ii) Mr. Krishna P. Morajkar vs. Mr. Joe Ferrao, 2013 CRIJ (NOC) 572 Bombay (Decided on 19.07.2013), wherein the Court observed:
"The underlined observations do not disclose as to where can one find a prohibition on recovering amounts not disclosed in income tax returns. With utmost humility, I have to state that I have not come across any provision of Income Tax Act, which makes an amount not shown in the income tax returns unrecoverable. The entire scheme of the Income Tax Act is for ensuring that all amounts are accounted for. If some amounts are not accounted for, the person would be visited with the penalty or at times even prosecution under the Income Tax Act, but it does not mean that the borrower can refuse to pay the amount which he has borrowed simply, because there is some infraction of the provisions of the Income Tax Act. Infraction of provisions of Income Tax Act would be a matter between the revenue and the defaulter and advantage thereof cannot be taken by the borrower. In my humble view, to say that an amount not disclosed in the income tax returns becomes irrecoverable would itself defeat the provisions of Section 138 of the Negotiable Instruments Act."
Rajesh Vs. Kartik Behera CC No. 12941//17 Page no. 11 of 12 Therefore, though non-compliance of provisions of Section 269SS of Income Tax Act,1961, may invite penal action under the said Act, however the same cannot operate to undue advantage on borrower who can refuse to pay the loan amount taken by him on this ground.
23. The judgments relied upon by the parties, but not discussed hereinabove reiterate the established principles of law already discussed or are distinguishable on facts and proposition of law laid down therein and hence, are not applicable to the case at hand. In view of the above, this court is of the considered opinion that apart from not raising a probable defence, the accused was not able to contest the existence of a legally enforceable debt or liability. The complaint disclosed the existence of a legally enforceable debt or liability vide the cheque in question, return memo and the legal notice brought on record. However, accused failed to rebut the presumption in favour of complainant either on the basis of other material available on record or by adducing any cogent defence evidence. There is sufficient material on record to conclude that complainant has successfully proved his case beyond reasonable doubt.
24. Accordingly, the accused is convicted for the offence under Section 138 of Negotiable Instruments Act, 1881.
25. Let the convict be heard on quantum of sentence.
26. Copy of Judgment be supplied to the convict free of cost.
Digitally signed by MRIDUL MRIDUL GUPTA
Date:
GUPTA 2019.05.01
16:00:08
+0530
ANNOUNCED IN THE OPEN COURT (MRIDUL GUPTA)
TODAY i.e. 01st MAY 2019 METROPOLITAN MAGISTRATE
DWARKA DISTRICT COURTS/ DELHI
Rajesh Vs. Kartik Behera CC No. 12941//17 Page no. 12 of 12