Delhi District Court
Sakuntala Choudhary vs Captain Retd Dilwar Singh Sagwan on 1 August, 2024
IN THE COURT OF SHRADDHA TRIPATHI, JUDICIAL
MAGISTRATE FIRST CLASS - 02, N.I.ACT, SOUTH DISTRICT,
SAKET COURTS, NEW DELHI
CT Cases 469005/2016
SAKUNTALA CHOUDHARY VS CAPTAIN (Retd.) DILAWAR SINGH
SANGWAN
A. CNR No. DLST02-003392-2015
B. Date of Institution 11.09.2015
D. Name of complainant Sakuntala Choudhary
W/o Lt. Sh. Rohtash
R/o 74/2, Maidan Garhi Extension
Chhattar Pur Road, New Delhi-110074
E. Name of the accused, his Captain (Retd.) Dilwar Singh Sangwan
parentage and address
S/o Lt. Sh. Dhaja Ram R/o 8111, Sector
C-8. Vasant Kunj, New Delhi-110070
F. Offence complained of Under Section 138 Negotiable
Instruments Act, 1881
G. Plea of the accused Pleaded not guilty and claimed trial
H. Judgment reserved on 10.07.2024
I. Date of judgment 01.08.2024
J. Final Order Convicted
CT Cases 469005/2016 Page No.1 of 16
SAKUNTALA CHOUDHARY VS CAPTAIN (Retd.) DILAWAR SINGH SANGWAN
Factual Background
1.These proceedings have been initiated by the complainant under section 138, Negotiable Instruments Act, 1882 (hereinafter 'NI Act'). Briefly stated, it is the case of complainant that the accused had approached her to rent her premises of property no. 74/2, Maidan Garhi Ext Chattar Pur Road, New Delhi-110074 for running a trust in the name of Dhaja Ram Charitable Trust 2022 of which the accused shall be the chairman and consequently a lease deed dated 14.02.2019 was executed between the complainant, her two sons namely Virender Singh Sejwal & Devender Singh Sejwal and the accused. It is the case of the complainant that in lieu of the lease deed rent for the month of November, 2014; increased rent upto 16th month; electricity bill upto 31.12.2014 and interest for one month to the tune of Rs. 4,00,000/- was outstanding against the accused. To discharge this liability, the accused issued a cheque of the following description which got dishonoured vide return memo dated 11.07.2015.
Cheque Cheque amount and date Reason for dishonour
Number
801245 5,12,000/- dated Payment stopped by drawer
10.07.2015
2. Upon receiving the knowledge of dishonour of the above cheques, the complainant served a legal demand notice dated 25.07.2015 upon the accused requiring him to make the necessary payment. However, upon the failure of the accused to pay the cheque amount within 15 days, the present proceedings under section 138 NI Act were initiated by the complainant against the accused.
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3. To fortify her case, the complainant tendered her evidence by way of affidavit which is Ex CW 1/1 and relied upon the following documentary evidences:
Sr. No Document Exhibit Number
1. Lease Deed dated 14.02.2009 CW1/A (OSR)
2. Cheque bearing no. 801245 Ex CW1/B
dated 10.07.2015
3. Return memo dated 11.07.2015 Ex CW1/C
4. Copy of legal notice dated Ex CW1/D
25.07.2015
5. Postal Receipt Ex CW1/E
6. Regd AD card Ex CW1/F
7. Possession Letter dated Ex CW/X1
30.12.2014
8. Statutory Notice of Termination Ex CW1/X2
of Lease Deed dated 1.12.2014
Case Proceedings
4. Upon the appearance of accused, notice of accusation under section 251 of the Code of Criminal Procedure, 1973 (hereinafter 'CrPC') was framed on 06.02.2017 and substance of allegations against the accused was accordingly explained to him to which the accused pleaded not guilty and claimed trial. The same was duly recorded alongwith his plea of defence.
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5. Thereafter, upon permitting the accused to cross-examine CW1 under section 145 (2), NI Act, and CW-1 was cross-examined and CE was closed on 01.04.2022.
6. On 24.08.2022, the Statement of Accused was recorded as per the terms of Sec 313 CrPC r/w Sec 281 CrPC explaining the incriminating substances, that appear in evidence against him. The accused explained that he had asked the bank to stop payment as his trust did not have sufficient funds. He further admitted that there was a legal liability towards the complainant due to which he issued the cheque in question. Post the recording of statement of accused, matter was fixed for leading Defence Evidence. The accused moved an application under section 315 CrPC to examine himself as defence witness alongwith his list of witnesses which was allowed on 17.10.2022 however since the accused failed to lead Defence Evidence despite multiple opportunities his right to lead Defence Evidence was closed vide order dated 10.01.2023. Thereafter the accused moved an application under section 311 CrPC seeking an opportunity to cross-examine the complainant as well as lead defence evidence which was partly allowed to the extent of leading defence evidence vide order dated 08.05.2023. Yet the accused failed to lead defence evidence and again his right was closed vide order dated 22.03.2024. Thereafter, matter was fixed for final arguments. It is pertinent to note that during trial, the accused was given multiple opportunities to avail services of a legal aid counsel, however he denied the same and insisted that he shall represent his case in person.
Submissions on behalf of Complainant
7. Ld counsel for the complainant submitted that a lease deed dated 14.02.2009 was executed between the complainant and the accused in respect of CT Cases 469005/2016 Page No.4 of 16 SAKUNTALA CHOUDHARY VS CAPTAIN (Retd.) DILAWAR SINGH SANGWAN the property in question and to discharge the liability qua this tenanted property the cheque in question was issued by the accused.
8. The cheque in question was given by the accused to repay the amount of Rs. 5,12,000/- to the complainant.
9. Ld. Counsel further submitted that the accused has admitted the fact of liability in his notice framing under section 251 CrPC as well as at the time of recording of statement under section 313 CrPC. He further submitted that the accused has not lead any defence evidence in the matter and consequentially he has failed to discharge the onus of proof upon him.
10. It has also been submitted by Ld counsel that in lieu of the presumptions of Sec 139, NI Act in favour of the complainant and the fact that the same remain unrebutted, all the ingredients under section 138 NI Act have been duly met and the liability of the accused has been established and thus he be convicted of the offence.
Submissions on behalf of Accused
11. The accused submitted that the cheque in question was given by him to the complainant. However, the same was given on trust that one Lavanya Ayurvedic Pvt Ltd, to whom he had sub let the property in question and whose responsibility it was to discharge the liability towards the complainant shall pay the accused which in turn shall be diverted to the complainant through the cheque in question.
12. He has further submitted that the cheque in question was presented by the complainant without his consent and before Lavanya Ayurvedic Pvt Ltd made the due payment to the accused.
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13. The accused has submitted that it was essentially the responsibility of Lavanya Ayurvedic Pvt Ltd and not the accused and the complainant has cleverly filed this case against him.
14. It has also been submitted by the accused that the complainant has cleverly concealed the actual figures due against rent, bills etc and that she has joined hands with officials of Lavanya Ayurvedic Pvt Ltd and filed this case against him. He has also contended that in reality the complainant has already received the entire amount due from Lavanya Ayurvdeic Trust Pvt Ltd, ye she has filed this false case against him.
15. The accused also submitted that the cheque in question was given out of fear and pressure induced by the sons of complainant.
16. The accused submitted that he has successfully rebutted the presumption under section 139 NI Act to the extent of preponderance of probabilities and thus the accused be acquitted.
Analysis and findings
17. Learned counsels of both the parties have been heard at length and documents on record have been perused. Sec 138, NI Act was introduced with the objective of inculcating faith in the efficacy of banking operations and giving credibility to negotiable instruments in business transactions. The provision intends to discourage people from not honouring their commitments by way of payment through cheques. To attract liability under section 138, NI Act, the following ingredients are required to be fulfilled:
CT Cases 469005/2016 Page No.6 of 16SAKUNTALA CHOUDHARY VS CAPTAIN (Retd.) DILAWAR SINGH SANGWAN First Ingredient: The cheque was drawn by a person on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account and the same be presented to the bank within a period of three months from the date on which it is drawn or within the period of its validity whichever is earlier;
Second Ingredient: The cheque was drawn by the drawer for discharge, in whole or in part, of any legally enforceable debt or other liability;
Third Ingredient: The cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank.
Fourth Ingredient: A demand of the said amount has been made by the payee or the holder in due course of the cheque 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 dishonour of cheque.
Fifth Ingredient: 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.
18. The fulfilment of first, third, fourth and fifth ingredient is not disputed. The cheque dated 10.07.2015 was presented for honour within the stipulated time and the same was returned as dishonoured vide return memo dated 11.07.2015 for reasons "Payment stopped by drawer". The said reason for dishonour is duly covered under section 138 NI Act. Upon receipt of the same, the complainant served a legal demand notice dated 25.07.2015 within 30 days and upon the failure of the accused to make good the payment within 15 days, CT Cases 469005/2016 Page No.7 of 16 SAKUNTALA CHOUDHARY VS CAPTAIN (Retd.) DILAWAR SINGH SANGWAN the complainant instituted the present proceedings within the stipulated time. Thus, the fact of fulfilment of first, third, fourth and fifth ingredient is decided in favour of the complainant and against the accused.
Defence of Accused: Non-existence of a legally recoverable debt
19. What remains for judicial scrutiny before this court is whether there existed a legally recoverable debt. The accused contests the case on the second ingredient.
20. The sole defence of the accused is pertaining to the existence of a legally enforceable debt. It is pertinent to note that once signatures on the cheque are admitted by the accused, presumptions under Sec 118 and Sec 139 NI Act take the forefront. The presumption under Sec 118 and Sec 139 NI Act relate to the fact that the cheque in question was issued in lieu of consideration and for a legally recoverable debt/liability. The stipulated provisions incorporate the word 'shall', thereby making the presumption a mandatory presumption. However, loading the provision with the phrase "unless the contrary is proved"
clarifies that albeit the presumption is a mandatory presumption, it is rebuttable and the onus to rebut the presumption lies upon the accused.
21. Regarding the strength and nature of presumption raised under section 139 NI Act, it is worthwhile to peruse the ruling of the Hon'ble Apex Court in Rangappa vs Sri Mohan (2011 (1) SCC (CRI) 184) wherein it ruled, "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 CT Cases 469005/2016 Page No.8 of 16 SAKUNTALA CHOUDHARY VS CAPTAIN (Retd.) DILAWAR SINGH SANGWAN 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 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 in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own."
22. Thus, it is a settled legal position that in order to rebut the statutory presumption under section 118 and section 139 NI Act, the accused ought to take the responsibility on his shoulders and clear himself of the cloud of legal liability cast upon him by the complainant to the extent of preponderance of probabilities. The accused can choose to do so either by cross-examining the CT Cases 469005/2016 Page No.9 of 16 SAKUNTALA CHOUDHARY VS CAPTAIN (Retd.) DILAWAR SINGH SANGWAN complainant and complainant witnesses or by leading his defence evidence or both. The instant case is one where the accused has adopted both the avenues to establish his innocence. While the accused availed his right to cross-examine the complainant, his right to lead defence evidence was closed twice as he had failed to do so despite being given multiple effective opportunities.
23. The premise of the present case is a lease deed dated 14.02.2009 executed between the accused and the complainant & complainant's two sons. It is the case of complainant that the accused being the chairman of trust namely DHAJA RAM CHARITABLE TRUST had issued the cheque in question to pay the outstanding rent of the property so leased out. At the stage of framing of notice the accused stated in his plea of defence that on 06.02.2017, he had created a sub-lease in favour of one Lavanya Ayurvedic Pvt Ltd, thereby creating a sub-tenancy in favour of the latter and it was this sub-tenant whose dues were to the tune of Rs. 12,42,733/-. It is the case of the accused that after deliberations with the sub-tenant, the accused issued the cheque in question in favour of the complainant who was the original lessor upon a condition that the same shall be presented only after the accused confirms that the cheque be presented for encashment and he has received payment from the sub-tenant. However, to his utter disappointment the complainant presented it before his trust could arrange sufficient funds. Upon the point of legally enforceable liability which is essentially the moot point of this case, the accused has further stated in his plea of defence, "However, the Trust has all intention to pay this amount once we receive the due amount from Lavanya Ayurvedic". What comes across is that not only the issuance of cheque has been admitted by the accused but also his liability towards the complainant albeit indirectly.
24. During the cross-examination of complainant, the accused quizzed her upon the fact of acceptance of rent directly from the sub-tenant. At the CT Cases 469005/2016 Page No.10 of 16 SAKUNTALA CHOUDHARY VS CAPTAIN (Retd.) DILAWAR SINGH SANGWAN outset, it is worthwhile to note that from a bare perusal of cross-examination of complainant the accused tried to establish his innocence by passing the baton of responsibilities of dues into the hands of sub-tenant that too upon the consensus of complainant. I consider it appropriate to deal with this issue in a while. Prior to this attention must be brought to statement of accused under section 313 CrPC, the accused admitted that he had directed the bank to stop payment justifying his conduct with an explanation that the complainant presented it for encashment before the trust could arrange sufficient funds. Upon being questioned on the aspect of any legal liability of the accused due towards the complainant, he stated:
"I admit that there was legal liability towards the complainant due to which the trust issued the cheque in question towards the complainant. I was the chairman of the trust."
25. By this stage the accused has words simpliciter admitted his liability towards the complainant.
26. Considering it appropriate the court shall now advert to the cross- examination of complainant. Analysis of the same shall be worthwhile after noting the settled legal position that the accused can choose to discharge the burden of existence of a legally enforceable liability by cross-examination of complainant as well as by leading his defence evidence. This is a case where the accused was able to cross-examine the complainant but failed to lead defence evidence despite being given sufficient opportunities finally meeting the fate of closure of his right. All that remains for scrutiny is whether the accused has successfully established his innocence by cross-examining the complainant. In my opinion, the same is answered in the negative. As already noted, it is evident that the accused has grilled the complainant upon the point that the entire CT Cases 469005/2016 Page No.11 of 16 SAKUNTALA CHOUDHARY VS CAPTAIN (Retd.) DILAWAR SINGH SANGWAN liability which the complainant alleges to be due against the accused was in reality due against the sub-tenant. While advancing final arguments, the accused contended that the dues which the complainant claims to be entitled to and were required to be repaid by way of the cheque in question were in effect liabilities of the sub-tenant and the complainant has acted hand in glove with the sub- tenant and initiated criminal proceedings which are being adjudicated herein. The complainant has denied this version of the accused's story in her cross- examination. She has categorically stated that the rent was payable to her as per the agreement at the instance of the accused only. However, only when the accused defaulted in the payment of rent and asked the sub-tenant to pay the rent, she accepted it from the sub-tenant directly. At this stage, the complainant substantiated her case by producing possession letter Ex CW1/X1 (colly) and statutory notice of termination of lease deed Ex CW1/X2 (colly) both issued by the accused. In Ex CW1/X1, the accused himself mentions that the Trust namely Dhaja Ram Charitable Trust of which he is the Chairman has handed over vacant possession of the tenant premises to the complainant. Next, perusal of Ex CW1/X2 dated 1.12.2014 reflects that it is the accused who stated that the Trust of which he is the Chairman shall give vacant possession to the complainant on or before 31.12.2014. In this letter, the accused of his own volition gave an undertaking to clear all his dues towards the complainant before 31.12.2014. The court considers it appropriate to refer to the exact para of Ex CW1/X2 which reads, "We undertake to clear all your outstanding dues of rent, electricity charges etc. Including Rs. 4,00,000/- (Rupees four lacs only) borrowed from you along with 3 months arrears of interest amounting to Rs 4,36,000/- before the last dated i.e. 31.12.2014."
27. In none of these documents executed at the relevant time has the accused mentioned to the complainant that any liability that remains towards CT Cases 469005/2016 Page No.12 of 16 SAKUNTALA CHOUDHARY VS CAPTAIN (Retd.) DILAWAR SINGH SANGWAN her shall be claimed by her from the sub-tenant. Rather the accused has himself given an undertaking to clear 'his dues'. No justifiable ground has been carved out by the accused as to why he accepted his dues in the notice and undertook to pay the liabilities which the complainant is claiming in the present case. The accused has attempted to pivot the case establishing the liability towards the complainant upon the sub-tenant. However, twice he has admitted his liability during the trial proceedings. The evidences brought before this court at the stage of complainant evidence are in coherence with the fact of existence of liability of the accused as mentioned hereinabove. Further, no cogent evidence has been lead by the accused to shift the due liabilities away from him. The accused confronted the complainant with documents Mark A (colly) and Mark X-1 to prove that the complainant is claiming rent more than is actually due, however these are mere notes and Mark X-1 are handwritten notes and alone cannot substantiate the claim of the accused. They ought to be corroborated by some other evidences to prove the contention of the accused. Moreover Mark X-1 being a photocopy is secondary evidence and cannot be read for any purpose whatsoever. Thus, the presumption of section 118 as well as section 139 NI Act continues to stand by the complainant.
28. As already noted that defence of the accused is that since the sub- tenant was in occupation of the tenanted premises, dues were recoverable against him only. Albeit, the accused has not lead evidence to quash his legal liability and pin it upon the sub-tenant, yet the court considers it appropriate to refer to Sec 108 (j) of the Transfer of Property Act, 1882 (hereinafter 'TPA') which stipulates:
"(j) the lessee may transfer absolutely or by way of mortgage or sub-lease the whole or any part of his interest in the property, and any transferee of such interest or part may again transfer it. The lessee shall not, by reason CT Cases 469005/2016 Page No.13 of 16 SAKUNTALA CHOUDHARY VS CAPTAIN (Retd.) DILAWAR SINGH SANGWAN only of such transfer, cease to be subject to any of the liabilities attaching to the lease:
"nothing in this clause shall be deemed to authorise a tenant having an un-transferable right of occupancy, the farmer of an estate in respect of which default has been made in paying revenue, or the lessee of an estate under the management of a Court of Wards, to assign his interest as such tenant, farmer or lessee:"
29. Sec 108 (j) is explicitly clear upon the point that even in the instance of transfer of right by the lessee, in simpler words by creating a sub- tenancy, the lessee cannot absolve himself of the liability to the original lessor. Even for arguendo, if contention of the accused is to be considered that the complainant was aware of sub-tenancy and accepting rent from the sub-tenant and the entire liability was to be cleared firstly to the accused by the sub-tenant or that it was the sole liability of the sub-tenant the legal dictum of Sec 108 (j), TPA still lends support to the complainant. The fact of unsettled liabilities qua rent and other bills between the accused and sub-tenant are immaterial with respect to the complainant/lessor. The accused being the lessee owed a liability to pay rent as well as bills to the complainant. Sec 108 (j), TPA is clear on this point. Additionally, upon an entire perusal of the lease deed dated 14.02.2009, there is no term qua the fact that in case of sub-tenancy the lessor shall claim dues from the sub-tenant only. In the event of any term to this effect, Sec 108
(j), TPA shall remain effective and the complainant lessor is well within her right to claim her dues from the original lessee. Therefore, contention of the accused that if there is any pending liability it should be against the sub-tenant holds no ground in view of the clear mandate of Sec 108 (j), TPA. Further, the accused has not lead any evidence to shrug of the liability imposed upon him by CT Cases 469005/2016 Page No.14 of 16 SAKUNTALA CHOUDHARY VS CAPTAIN (Retd.) DILAWAR SINGH SANGWAN way of evidences on record as well as the legal presumptions in favour of the complainant.
30. It is also the defence of the accused as is revealed from the cross- examination of the complainant as well his arguments that the complainant has acted hands in glove with the sub-tenant and is wrongly claiming these dues while she has actually received all of them. He further contended that the cheque in question was issued due to pressure induced by the sons of complainant and the complainant has failed to give an exact break up of dues concealing the actual figures. Be that as it may, the responsibility to prove the same lied upon the accused and no evidences have been lead by him to prove that he has been trapped in a false case or been maliciously prosecuted against.
31. Thus, the fact of issuance of cheque as well as the legal liability has been admitted by the accused at the time of notice framing as well as the recording of statement under section 313 CrPC. In such a situation where the execution of a Negotiable Instrument has been admitted, the signature on the instrument has been admitted and eventually even the existence of legal liability has been admitted and no evidences are lead in the matter, the presumptions under section 118 and sec 139 NI Act burden the accused with their weight and it is for the accused to push them off with the force of cogent evidences. The accused has attempted to re-direct the existence of outstanding rent and other debts upon the sub-tenant which is of no consequence in the present case.
32. In the absence of such evidences, the presumptions loom in favour of the complainant. The onus to prove the circumstances that the accused did not owe a legal liability towards the complainant was upon the accused and the accused in the instant case has failed to prove the non-existence of a legally enforceable debt. Rather, the accused has accepted his legal liability. No CT Cases 469005/2016 Page No.15 of 16 SAKUNTALA CHOUDHARY VS CAPTAIN (Retd.) DILAWAR SINGH SANGWAN evidence in support of his innocence has been lead despite the fact that twice he was given an opportunity to lead evidence. Thus, the fact of existence of a legally enforceable debt stands proven. The accused has failed to rebut the presumption of law and discharge the burden of proof by raising a probable defence that the cheque in question was not issued in discharge of any legally enforceable liability. Therefore, the fulfillment of second ingredient is also decided in favour of the complainant and against the accused.
Conclusion
33. All the legal requirements constituting an offence under Section 138 NI Act are cumulative in nature. Since all the ingredients necessary to bring home the guilt of accused have been proved, accused Captain (Retd) Dilawar Singh Sagwan is hereby held 'guilty' and consequently convicted of the offence under Section 138 NI Act.
34. This judgment contains 16 pages. This judgment has been pronounced by the undersigned in the open court and each page bears the signatures of the undersigned.
35. Let a copy of the judgment be uploaded on the official website of District Courts, Saket, forthwith.
ANNOUNCED IN OPEN COURT ON 01st AUGUST, 2024 (SHRADDHA TRIPATHI) JUDICIAL MAGISTRATE FIRST CLASS-02/NI ACT(SD) SAKET/NEW DELHI/01.08.2024 CT Cases 469005/2016 Page No.16 of 16 SAKUNTALA CHOUDHARY VS CAPTAIN (Retd.) DILAWAR SINGH SANGWAN