Delhi District Court
The Accused Is Facing Trial For ... vs Indian Renewable Energy on 23 August, 2018
IN THE COURT OF METROPOLITAN MAGISTRATE,
KARKARDOOMA COURTS, DELHI.
Presided by: Sh. Sujit Saurabh
CC No. 60101/16
PS: Shakarpur
Sh. Sachin Dutt Sharma
S/o Sh. Ravi Dutt Sharma,
R/O R-111C, Laxmi Nagar
Delhi-1100912
.........Complainant
VERSUS
Raj Kumar
S/o Late Sh. Babu Ram,
R/o H. N. C-10866, First Floor, Manak Bhawan,
Near Prem Dhaba, East Park Road, Manak Pura,
Karol Bagh, Delhi- 110005
..........Accused
Complaint under section 138 of the Negotiable
Instruments Act
Offence complained of : U/s 138 NI Act
Date of commission of offence : On expiration of 15
days from the date of
service of statutory
notice (sent on
14.10.2016)
Plea of Accused : Not guilty
Date of decision of the case : 23.08.2018
Final Order : Conviction
Sachin Dutta Sharma v Raj Kumar CC No. 60101/2016
JUDGMENT
STATEMENT OF FACTS AND REASONS FOR DECISION
1. The accused is facing trial for commission of offence punishable u/s 138 of The Negotiable Instrument Act, 1881 (in short, "NI Act").
2. Brief Facts:
As per complaint, the complainant advanced a friendly loan of Rs. 500,000 (Five Hundred Thousand only) in cash to the accused in the month of August 2016. The accused assured the complainant to repay the loan amount in the month of September 2016. The accused issued a Cheque bearing No.039450, dated 25.09.2016, drawn on central Bank of India, Chunamandi, Paharganj, Delhi, in sum of Rs.500,000, in favour of the complainant towards the loan amount. The accused also gave an acknowledgement under his signature to the complainant in the presence of an eye witness Ms. Taruna Bansal wherein he assured to repay the loan amount on 25.09.2016 vide Cheque No.039450. On 26.09.2016, the complainant presented the aforesaid Cheque to his banker Oriental Bank of Commerce, Branch Laxmi Nagar, Delhi for encashment. However, the same was returned unpaid with remark "funds insufficient", vide Cheque return memo dated 28.09.2016. The complainant informed the accused about the dishonor of the Cheque and asked him to repay the loan amount but the accused refused to pay. The complainant sent a legal demand notice dated 12.10.2016 to the accused advising him to pay the amount of the Cheque within 15 days of the receipt of the notice. The accused sent false reply of the legal notice through his Counsel and did not pay the Cheque amount even after expiry of statutory period of 15 days from the date of service of notice. Since accused did not make payment to discharge his liability, the Sachin Dutta Sharma v Raj Kumar CC No. 60101/2016 complainant filed the instant complaint.
3. Vide order dated 17.11.2016, cognizance of the offence u/s 138 NI of Act was taken by Ld. Predecessor court and the accused was summoned.
4. Vide order dated 06.02.2017, notice u/s 251 of Criminal Procedure code, 1973 (in short, "Cr.P.C") was served upon accused. The accused did not plead guilty and claimed trial. The accused disclosed his defence. He was given an opportunity to cross examine the complainant witnesses and matter was listed for Complainant's Evidence (in short, C.E).
5. The complainant examined two witnesses in his favour. He himself appeared in witness box as CW1 and called Ms. Taruna Bansal in witness box as CW2.
To substantiate his case, the complainant adduced his evidence by way of affidavit Ex. CW1/A. The complainant reiterated the facts mentioned in the complaint. He relied upon the following documents in support of his averments;
i) Original Cheque bearing no. 039450 Ex. CW1/1,
ii) Original Cheque return memo Ex. CW1/2,
iii) Legal demand notice dated 12.10.2016 Ex. CW1/3,
iv) Original postal receipt Ex. CW1/4,
v) Speed post tracking report Ex. CW1/5,
vi) Acknowledgement receipt of loan amount Ex. CW1/6,
vii) Income Tax Return (ITR) for assessment year 2017-18, 2016-17 and 2015- 16 Ex. CW1/7, Ex. CW1/7A and Ex. CW1/7B respectively and
viii) Reply to legal demand notice dated 28.10.206 Ex. CW1/8.
CW2 Ms. Taruna Bansal also led her evidence by way of affidavit Ex. CW2/A. CW-1 was cross examined on behalf of accused. However, accused Sachin Dutta Sharma v Raj Kumar CC No. 60101/2016 failed to cross examine CW2. Vide order dated 20.12.2017, right to cross examine CW2 was closed for reason recorded in the order. Vide same order, CE was closed and matter was listed for examination of accused u/s 313 of Cr. PC.
6. On 21.02.2018, accused was examined u/s 313 of Cr. PC.
The accused stated that he had taken loan of Rs 350,000 from the complainant and had given cheque Ex. CW1/1 to the complainant as security cheque. He admitted his signature on acknowledgement receipt Ex. CW1/6. He also admitted receipt of legal demand notice Ex. CW1/4 The accused expressed his willingness to lead defence evidence (in short, DE). Accordingly, matter was listed for DE.
7. On 01.05.2018 an application u/s 311 of Cr.P.C was moved on behalf of accused for recalling CW2 Ms. Taruna Bansal. The application was dismissed for reasoned order of even date.
The accused did not examine any defence witness. Vide order dated 28.07.2018, DE was closed as per statement of accused and matter was listed for final arguments.
8. I heard arguments on behalf of both the parties.
To prove his case, Ld. Counsel for complainant emphasized that the Cheque in question had been issued by the accused in discharge of his legal liability and all the ingredients of offence u/s 138 of NI Act are full filled in the instant case. Ld. Counsel further emphasized that the accused failed to rebut the statutory presumption in favour of the complainant.
On the other hand, Ld. Defence counsel led emphasis on the following facts:
a) The accused had given the Cheque as security Cheque for securing loan from the complainant and the loan was repaid by the accused. The Sachin Dutta Sharma v Raj Kumar CC No. 60101/2016 complainant misused the security Cheque.
b) The ITR Ex. CW1/7, Ex. CW1/7A and Ex. CW1/7B are not admissible in evidence as same are not supported by certificate u/s 65 B of Indian Evidence Act, 1972.
9. Since accused is facing trial for commission of offence punishable u/s 138 of NI Act, it is necessary to discuss the essential ingredients of the offence.
To attract offence u/s 138 NI Act,, following requirements must be fulfilled:-
(i) that Cheque is presented to the bank within the period of six months or its validity, whichever is earlier;
(ii) the payee or the holder in due course of the Cheque 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 30 days of the receipt of information by him from the bank regarding the return of the Cheque as unpaid;
(iii) the drawer of such Cheque fails to make payment of the said amount of money to the payee or the holder in due course of the Cheque within 15 days of the receipt of the said notice.
10. Accused has admitted signature on the Cheque in question. Factum of dishonor of the Cheque is not in dispute. It is also not in dispute that the Cheque was not presented within statutory period. Dispatch of legal notice within statutory time limit is also not in dispute. Institution of the complaint within limitation is also not in dispute. Receipt of legal notice is also not in disputes.
Thus, the basic question for determination is:
Whether the accused had issued the Cheque in discharge of debt or legal liability?
11. To answer the above question, it is necessary to analyse materials on Sachin Dutta Sharma v Raj Kumar CC No. 60101/2016 record.
In notice u/s 251 of Cr. PC, the accused stated that he had issued the Cheque to the complainant as security Cheque against loan of Rs 350,000 and he had already returned Rs. 300,000 to the complainant and Rs 50,000 was due to the complainant. He further stated that the cheque was under his signature and all the details of cheque were under his hand writing.
During cross-examination of complainant CW-1, suggestion was made on behalf of accused that the brother of accused Sh. Pradeep Kumar had taken loan of Rs. 3,25,000 from the complainant and accused had stood surety for the loan amount.
In his reply to legal demand notice Ex. CW1/8, the accused has stated that he had never borrowed any money from the complainant at any point of time. Loan of Rs. 3,20,000 had been borrowed by Sh. Pradeep Kumar and the accused had stood surety for him. The loan amount had already been returned by Sh. Pradeep Kumar. He had issued the cheque as security for loan of Rs. 3,20,000 availed by Sh. Pradeep Kumar In his statement u/s 313 of Cr. PC, the accused stated that he had made payment of Rs. 2,50,00 to the complainant.
12. Section 118 of the NI Act inter alia provides that it shall be presumed, until the contrary is proved, that every negotiable instrument was made or drawn for consideration.
Section 139 of the NI Act stipulates that unless the contrary is proved, it shall be presumed, that the holder of the Cheque received the Cheque, for the discharge of, whole or part of any debt or liability. However, the said presumptions are rebuttable in nature.
In Rangappa V. Sri Mohan, (2010) 11 SCC 441, a three judge bench of Apex Court observed that, Section 139 of the NI Act is stated to be an example of a reverse onus clause which is in tune with the legislative intent of improving Sachin Dutta Sharma v Raj Kumar CC No. 60101/2016 the credibility of negotiable instruments.' The Hon'ble Supreme Court further observed that the offence under Section 138 of the NI Act is at best a regulatory offence and largely falls in the arena of a civil wrong and therefore the test of proportionality ought to guide the interpretation of the reverse onus clause. An accused may not be expected to discharge an unduly high standard of proof. A reverse onus clause requires the accused to raise a probable defence or creating doubt about the existence of a legally enforceable debt or liability for thwarting the prosecution. The standard of proof for doing so would necessarily be on the basis of "preponderance of probabilities" and not "beyond shadow of any doubt".
13. During cross examination of complainant CW1, the accused placed on record Ex. CW1/D1 (colly). Ex. CW1/D1 is receipt of payment of Rs.2,50,000. Suggestion was made to the witness that receipt Ex. CW/D1 was given to the accused when the accused made payment of Rs. 2,50,000 to his employee Ms. Gupta. The witness rejected the suggestion. The witness rejected the suggestion that Ms. Gupta was his employee.
The accused could have examined alleged Ms. Gupta to prove Ex. CW1/D1. Mere vague suggestion is not sufficient to discharge the liability of the accused.
14. So far as admissibility of ITR Ex. CW1/7, Ex. CW1/7A and Ex. CW1/7B is concerned, it is true that the complainant has not placed on record the requisite certificate u/s 65 B of Indian Evidence Act. However, much reliance cannot be placed on the ITR. The object of proving the ITR was to ascertain the financial capacity of the complainant to advance the loan amount.
The Documents Ex. CW1/7, Ex. CW1/7A and Ex. CW1/7B include the balance sheets for the relevant period. The balance sheets are not computer output within the meaning of section 65 B of Indian evidence Act and hence are Sachin Dutta Sharma v Raj Kumar CC No. 60101/2016 admissible documents.
The genuineness of balance sheets has not been disputed by the accused. The accused could have examined the officials of Income Tax Department to verify the correctness of the balance sheets. However, the accused failed to do so. Reflection of the loan amount in Income tax return is not necessary to prove the case of the complainant.
In Sheela Sharma v. Mahender Pal, 2016 (3) JCC (NI) 148, Hon'ble High Court of Delhi has observed:
"The mere advancement of the loan in cash, may entail consequences for the party acting in breach of Section 269 SS of the Income Tax Act. That is not the concern of this Court. Whether, or not, the appellant reflected the availability of the said amount in her income-tax returns, is also not a matter of concern for this Court. That would again be an aspect to be considered by the income tax authorities. The advancement of loan, in cash, to the tune of Rs.10 Lakhs is not prohibited in law. The transaction of advancement of loan of Rs.10 Lakhs, in cash, is not illegal. Such a I transaction is enforceable by law."
15. In Sampelly Satyanarayana Rao Versus Indian Renewable Energy Development Agency Limited (decided on19 September, 2016), Hon'ble Supreme Court discussed the issue of security cheque. The question for consideration was whether the dishonour of a postdated cheque given for repayment of loan installment which is also described as security in the loan agreement is covered by Section 138 of the Negotiable Instruments Act, 1881. It was held that dishonour of cheque being for discharge of existing liability is covered by Section 138 of the Act.
In Suresh Chandra Goyal vs Amit Singhal (date of decision 14.05.2015 ), Hon'ble High Court of Delhi observed:
Sachin Dutta Sharma v Raj Kumar CC No. 60101/2016 "59. Thus, when one party gives a security to the other, implicit in the said transaction is the understanding that in case of failure of the principal obligation, the security may be enforced.
61. Thus, in my view, it makes no difference whether, or not, there is an express understanding between the parties that the security may be enforced in the event of failure of the debtor to pay the debt or discharge other liability on the due date. Even if there is no such express agreement, the mere fact that the debtor has given a security in the form of a postdated cheque or a current cheque with the agreement that it is a security for fulfillment of an obligation to be discharged on a future date itself, is sufficient to read into the arrangement, an agreement that in case of failure of the debtor to make payment on the due date, the security cheque may be presented for payment, i.e. for recovery of the due debt. If that were not so, there would be no purpose of obtaining a security cheque from the debtor. A security cheque is issued by the debtor so that the same may be presented for payment. Otherwise, it would not be a security cheque"
15. On the basis of above discussed facts and law it is evident that the accused has failed to rebut the statutory presumptions in favour of the complainant. Accordingly, accused namely Raj Kumar is convicted for offence punishable u/s 138 of NI Act.
Copy of the judgment be given to the convict free of cost.Digitally signed by SUJIT
SUJIT SAURABH
SAURABH Date:
2018.08.23
Announced in the open court 15:53:03 +0530
today i.e. 23.08.2018 (SUJIT SAURABH)
MM(Municipal), East
KKD Courts, Delhi
Sachin Dutta Sharma v Raj Kumar CC No. 60101/2016 Sachin Dutta Sharma v Raj Kumar CC No. 60101/2016