Delhi District Court
Madras High Court. The Relevant Portion ... vs . on 16 July, 2012
IN THE COURT OF SH. BABRU BHAN, METROPOLITAN MAGISTRATE,
(SPL. NI COURT )14 DWARKA COURT, NEW DELHI
The Madhav CoOperative Urban Thrift & Credit Society Ltd.
Vs.
Lalita Sharma
C.C. No. 621/12/07
P.S.: Binda Pur U/s 138 N.I. Act
JUDGEMENT
a) Date of commission of offence: 20.11.2007
b) Name of Complainant The Madhav CoOperative Urban Thrift
& Credit Society Ltd. through Authorized
Representative Sh. Satish Kumar Garg
c) Name of the accused and Address: Lalita Sharma, W/OSh. Bal Kishan
Sharma, R/OG1/9, Uttam Nagar, New
Delhi110059
d) Offence complained of: U/s 138 N.I. Act
e) Plea of accused: Pleaded not guilty
f) Final order: Acquitted
g) Date of order: 16.07.2012
h) Date of institution of case: 30.11.2007
i) Date of decision of case: 16.07.2012
CC No. 621/12/07
The Madhav CoOperative Urban Thrift & Credit Society Ltd. vs. Lalita Sharma 1 of 29 Brief facts and reasons for decision of the case:
1. By way of the present judgment I shall decide the complaint case u/s 138 Negotiable Instrument Act 1881 (as amended upto date) filed by the complainant, The Madhav CoOperative Urban Thrift & Credit Society Ltd. through its Authorized Representative Sh. Satish Kumar Garg against the accused Smt. Lalita Sharma w/o Sh.
Bal Kishan Sharma.
2. The factual matrix of the case is that on the request of the accused the complainant has granted a loan of Rs. 100000/ to the accused on 16.05.2005 vide loan account no. 3181. Accused in discharge of her liability arising out of this loan, issued a cheque bearing numbers 835057 dt. 13.09.2007 amounting of Rs. 82000/ drawn on Canara Bank, New Delhi110059 in favour of the complainant. However, on presentation of the same for encashment, the cheque was dishonoured vide cheque returning memo dated 15.09.2007 with the remarks "Funds Insufficient". The complainant has thereafter given a legal notice of demand dated 06.10.2007 to the accused which was sent by speed post thereby calling upon the accused to make the payment of cheque amount. It is further averred that the accused failed to make the CC No. 621/12/07 The Madhav CoOperative Urban Thrift & Credit Society Ltd. vs. Lalita Sharma 2 of 29 payment in response to the legal notice of demand. Resultantly, the complainant has filed the instant complaint for prosecution of the accused u/s 138 N.I. Act.
3. After the complaint was filed, the Authorized Representative of the complainant led the presummoning evidence by way of an affidavit and after hearing the counsel of the complainant and considering the entire material and documents on record, summons were issued against the accused vide order dated 30.11.2007 for offence u/s 138 N.I. Act 1881. On appearance of accused a separate notice u/s 251 Cr.P.C. dated 08.08.2011 was served upon the accused to which he pleaded not guilty and specified her defence that the cheque in question was given blank signed for the purpose of security.
Complainant Evidence:
4. In complainant evidence, the complainant got examined only one witness CW1, Sh. Satish Kumar Garg, Authorized Representative of the complainant Bank. The Evidence of CW1, Mr. Satish Kumar Garg, was filed in post summoning CC No. 621/12/07 The Madhav CoOperative Urban Thrift & Credit Society Ltd. vs. Lalita Sharma 3 of 29 evidence by way of affidavit Ex. CW1/1. The other documents relied upon by the complainant are:
i)Copy of power of attorney, Ex. CW1/X
ii)The original cheque, Ex. CW1/A
iii)The original cheque returning memo, Ex. CW1/B
iv)Legal notice of demand, Ex. CW1/C.
v) The postal receipts are Ex. CW1/D and E
vi)The Complaint is Ex. CW1/F.
5. In his cross examination CW1 deposed that there was a oral settlement between the accused and the complaint society on 12.09.07. CW 1 stated that he did not know that how many installments are paid by the accused till the cheque date. CW 1 further stated that he did not know that how much amount was paid by the accused till the date of the cheque. CW1 stated that he did not know that whether accused had already CC No. 621/12/07 The Madhav CoOperative Urban Thrift & Credit Society Ltd. vs. Lalita Sharma
4 of 29 paid 16 installments till 12.09.2007. He denied the suggestion that after the oral settlement the accused had paid her dues in cash. CW1 further denied the suggestion that complainant had promised to return the cheque in question to the accused after receiving the payment. CW 1 accepted that society maintains the record of every borrower and has also maintained the record of the accused. CW 1 denied the suggestion that the cheque in question was given blank signed for the purpose Statement of accused:
6. After the Complainant evidence was closed the accused was examined u/s 313 read with Section 281 Cr.P.C on 08.02.2012, in which all the incriminating evidence against the accused were put to her. During recording of her statement she admitted her signature on the impugned cheque but denied her liability to the tune of cheque amount. She also explained that she already had made the payment to the complainant and only one or two installments were outstanding. In her statement, accused expressed her willingness to lead the defence evidence, accordingly matter was listed for defence evidence.
CC No. 621/12/07 The Madhav CoOperative Urban Thrift & Credit Society Ltd. vs. Lalita Sharma 5 of 29 Defence Evidence:
7. In defence evidence, accused examined herself as DW1 and stated that she had availed a loan facility from the complaint but the actual amount disbursed to her was Rs. 85000/ . DW1 stated that she had given blank signed cheque at the time of signing of the loan agreement. DW1 further stated that after the blank signed cheque was received from me the complainant had issued the cheque of Rs. 85000/ in her favour. DW1 stated that the loan amount was to be repaid by her in installment of 3500/ each. DW 1 stated that she was not aware about the exact no. of installments.
DW1 deposed that she had paid 1617 installments to the complainant through her nephew. During her cross examination she denied the suggestion that the loan in sum of Rs. 100000/ was disbursed to her. DW1 admitted that sum of Rs. 85900/ was paid to her by way of cheque. She denied the suggestion that any receipt was issued to her. DW1 further deneid the suggestion that the cheque in question was given completely filled. DW1 admitted that the first address mentioned on the legal demand notice as her first address. DW1 volunteered that she had already sold out the said house. DW1 also admitted 2nd address on the legal demand notice as her correct address but she again volunteered that she has sold out this house also. CC No. 621/12/07 The Madhav CoOperative Urban Thrift & Credit Society Ltd. vs. Lalita Sharma 6 of 29
8. Thereafter, Parmod Sharma, was examined as DW2 and he stated that there was some loan transaction between the accused and the complainant in 2005 and as part of that loan transaction accused had issued a blank security cheque in the favour of the complainant. DW2 further stated that he used to go to the office of the complainant society for the payment of the installments on the behalf of the accused. DW2 further stated that he along with Mr. Sanjay Thakur paid 1617 installments in sum of 3500/ each to the complainant society. DW 2 volunteered that no receipt was issued for the said payment by the complainant. During his cross examination DW2 stated that he do not know the office of the complainant society but he again volunteered that he can visit there physically. DW2 stated that although he did not remember the exact loan but it was somewhere between 50000/ to 80000/. DW 2 further stated that the impugned cheque was handed over to somebody not known to him, but he volunteered that the same was handed over in his presence.
Arguments:
9. Thereafter, Ld. Counsels for the complainant and accused addressed their respective final arguments at length. Before appreciating the evidences and arguments CC No. 621/12/07 The Madhav CoOperative Urban Thrift & Credit Society Ltd. vs. Lalita Sharma 7 of 29 of both the parties, it would be appropriate to advert to the relevant provisions of N.I. Act.
Section 138 NI Act reads as under:
138 dishonour of cheque for insufficiency, etc., of funds in account.where any cheque drawn by a person on account maintained by him with a bank or payment of any amount another person from out of that account of money for discharge, in whole and in part, of any debt or other liability, is returned by them unpaid, either because of the amount of money standing to the credit of that 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 that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment CC No. 621/12/07 The Madhav CoOperative Urban Thrift & Credit Society Ltd. vs. Lalita Sharma
8 of 29 for (a terms which extend to twice the amount of the cheque, or with both Provided that nothing contained in this Section shall apply unless
vii)the cheque has been presented to the bank within a period of six months form the date on which it is drawn or within the period of its validity whenever is earlier.
viii)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 thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid, and
ix)the drawer of such cheque fails to make the payment of the said amount of money to the payee or as the case CC No. 621/12/07 The Madhav CoOperative Urban Thrift & Credit Society Ltd. vs. Lalita Sharma 9 of 29 may be, to the holder in due course of the cheque fifteen days of the receipt of the said notice.
x)ExplanationFor the purpose of this section, "debt or other liability means of legally enforceable debt or other liability.
10. Now, I would appreciate the evidence and arguments adduced and addressed by both the parties.
11. It is averred by the ld. Counsel for the complainant that accused had availed a loan facility and in discharge of the said loan, accused handed over the impugned cheque which bounced on presentation due to insufficient funds. Subsequently accused failed to make the payment within statutory period despite service of legal demand notice, hence committed the offence u/s 138 of N.I. Act. On the other hand it is contended by the learned counsel for the accused that although the accused had availed the loan facility from CC No. 621/12/07 The Madhav CoOperative Urban Thrift & Credit Society Ltd. vs. Lalita Sharma 10 of 29 complainant but the cheque in question was given blank signed for the purpose of security at the time of loan agreement and said cheque was subsequently filled up and misused by the complainant. Ld counsel for the accused argued that no loan document and the statement of account has been filed by the complainant to show the outstanding liability of the accused on the date of the cheque whereas it is admitted by the CW1 that society maintains the record of every borrower and record of the accused was also maintained. It is further contended that the outstanding liability of the accused was not to the tune of cheque amount on date of issuance of cheque in question. It is further contended that accused had already repaid the considerable amount of loan to the complainant.
12. I have perused the evidence on record and considered the submissions of both the Ld. Counsels. The complainant witness has stated in his affidavit that the accused had availed the loan facility in the sum of Rs. 100000/ from the complainant vide loan account No. 3181. This fact is not entirely disputed by the accused but she stated in her examination in chief that the actual amount CC No. 621/12/07 The Madhav CoOperative Urban Thrift & Credit Society Ltd. vs. Lalita Sharma 11 of 29 disbursed to her was 85000/ on 16.05.2005. Furthermore, she stated that she is not liable to pay the amount of the cheque and infact the cheque in question was issued blank as security at the time of loan agreement. Whereas the complainant has stated in affidavit that the cheque in question was issued in discharge of liability arising out of the loan agreement. It is stated by the complainant witness in his affidavit that accused was irregular in payment of her loan installment and had settled her loan account upto 12.09.2007 and in pursuance to the said settlement the cheque in question was issued.
13. One of the main ingredient of the offence under section 138 N.I. Act is existence of legally enforceable debt or liability. It is expressly clear from the bare reading of section 138 N.I. Act that to attract the criminal liability under this section, existence of legally enforceable debt or liability is condition precedent.
14. At this stage, it is necessary to refer to the provisions of section 118 and section 139 of N.I. Act. Under section 118, unless the contrary is proved , it is to CC No. 621/12/07 The Madhav CoOperative Urban Thrift & Credit Society Ltd. vs. Lalita Sharma 12 of 29 be presumed that the Negotiable Instrument had been made or drawn in discharge of legal debt or liability. Under Section 139 the court has to presume, unless the contrary was proved, that the holder of the cheque received the cheque for discharge, in whole or in part of debt or liability. Thus, in complaints under section 138 the court has to presume that the cheque had been issued for a debt or liability. This presumption is rebutable.
15. Undoubtedly, there is a presumption that whenever a negotiable instrument is drawn or made unless the contrary is proved it have to be presumed that same was drawn for the consideration. But important thing is that whether production of a cheque by the holder and admission of the signature on the same by the drawer is sufficient to held the holder criminally liable for the dishonour of the same . Merely stating in the complainant and the affidavit that cheque in question was given for the repayment of the loan will not advance the cause of the complainant. It is pertinent to mention here that complainant witness has deposed in his cross examination that the there was a oral settlement between the accused and the complainant and in pursuance to CC No. 621/12/07 The Madhav CoOperative Urban Thrift & Credit Society Ltd. vs. Lalita Sharma 13 of 29 the said settlement the impugned cheque was issued by the accused. On the other hand the said settlement has been denied by the accused. No date of the said settlement has been mentioned nor it has been mentioned that with whom the said settlement was arrived at, furthermore the same was not reduced in witting. These facts raise a strong doubt on the complainant's claim and support the claim of the accused that no such settlement was arrived at. In his cross examination CW 1 has stated that he did not remember that how many installments were paid by the accused. He also stated that he did not know that what amount was paid by the accused till the date of the cheque. CW1 also deposed and expressed his unawareness about the payment of 16 installments by the accused to the complainant. So, from cross examination of the CW1, it is apparently clear that complainant witness is not clear and aware about that what was the outstanding liability of the accused, when the cheque in question was issued and how much amount she had already paid before the cheque in question was allegedly issued.
CC No. 621/12/07 The Madhav CoOperative Urban Thrift & Credit Society Ltd. vs. Lalita Sharma 14 of 29
16. In her testimony accused has stated that she was disbursed a loan amount of Rs. 85000/ only and she had already paid 1718 installments of 3500/ each to the complainant.
17. From the testimony of the DW1 it is clear that the stand of the accused is that although she had availed the loan facility from the complainant but she had already paid the considerable amount to them. Further, she stated that her liability was not to the tune of the cheque amount on the date of cheque. When the accused has taken the stand that she was actually disbursed the loan amount of Rs. 85000/ and she has already paid 1718 installments of Rs 3500/ each and moreover the complainant witness has stated in his cross examination that he is not aware about the exact outstanding against the accused and the number of installments already paid by the her till the date of cheque. In such circumstances, burden shifted upon the complainant to prove the liability of the accused on the date of the cheque and also to prove the factum of alleged settlement which has been denied by the accused . In such scenario it was duty of the complainant to prove the outstanding liability of the accused by placing CC No. 621/12/07 The Madhav CoOperative Urban Thrift & Credit Society Ltd. vs. Lalita Sharma 15 of 29 on record the statement of account and other books of record which are maintained by the complaint society as admitted by CW1 in his cross examination. Although it is true that for prosecution under section 138 of N.I. Act, complainant is not obliged to prove the original transaction or the original consideration as it is expected in a suit for recovery of money but when execution the cheque and debt or liability is disputed by the accused then it becomes the duty of the complainant to prove the liability of the accused by placing on record the relevant documents i.e. Statement of account or other record books. Even if we assume that since it is not a civil suit therefore there is no need to file any loan documents in view of the presumption under section 139 of N.I. Act still complainant could have filed statement of account of the accused which could evince as to what was the amount of installment, how many installments have been paid by the accused and how much amount is outstanding against her. Since complainant is a cooperative society and admittedly maintaining its books of account therefore it was incumbent upon it to have filed its books of account in support of its claim. To further bolster my observation, I would like to refer to a judgment in Murugan Financiers V. P. CC No. 621/12/07 The Madhav CoOperative Urban Thrift & Credit Society Ltd. vs. Lalita Sharma 16 of 29 V, Perumal, 2006 Cr LJ 269(Mad) wherein the order acquitting the accused was upheld on the finding that since the complainant being a finance company has not produced books of account in support of claim, complaint has not proved debt or legally enforceable liability satisfactorily. In the present case also complainant has failed to bring any document on record to prove the outstanding liability of the accused and the testimony of the CW 1 was also very vague and ambiguous about the outstanding liability of the accused on the date of cheque. CW1 failed to answer any question about the outstanding liability and installment paid by accused till date of cheque, in such circumstances it was indispensable to file the books of account to prove the liability of accused.
18. Also in case of M. Vairavan v. T.M Selvaraj Crl A No. 352 of 2009, Madras High Court. The relevant portion of the judgment is reproduced here as under :
"in the instant case, the appellant/complainant is only an individual, therefore, it cannot be said that nonproduction of his account books would affect CC No. 621/12/07 The Madhav CoOperative Urban Thrift & Credit Society Ltd. vs. Lalita Sharma 17 of 29 the case under section 138 of N.I. Act, though the same is relevant in a case relating to financial companies and other institutions having books of account. The decision of this court in Murugan Financiers Vs, P.V. Perumal reported in 2005 Crl L.J. 269 ended in acquittal on account of the non production of books of accounts, sought for by the accused therein has no relevancy in this case."
19. So, it is clear from the above judgment that the complainant being the cooperative society maintaining the record of every borrower and frequently enter into such loan transactions ought to have produced the accounts books and the statement of account of the accused in order to prove her outstanding liability. When the complainant witness was asked about the installments paid by the accused and her outstanding liability on the date of the issuance of cheque, he failed to give any satisfactory answer. During his cross examination When CW1 deposed that he was not aware about the number of installments CC No. 621/12/07 The Madhav CoOperative Urban Thrift & Credit Society Ltd. vs. Lalita Sharma 18 of 29 paid by the accused and her outstanding liability, as the specific question was asked about installments and the liability was disputed then the complainant was suppose to prove these fact by placing on record the relevant documents, hence in such circumstances the production of the accounts book and statement of account became indispensable and necessary. As the same was not produced, I am inclined to arrive at a finding that complainant has not establish the outstanding liability of the accused to the tune of cheque amount on the relevant date.
20. In M.S. Narayana Menon Vs. State of Kerla and Others 2006 SCC 39, it has been held by Apex Court that : ".................If the defence is accepted as probable the cheque therefore cannot be held to have been issued in discharge of the debt as for example, if a cheque is issued for security or for any other CC No. 621/12/07 The Madhav CoOperative Urban Thrift & Credit Society Ltd. vs. Lalita Sharma 19 of 29 purpose the same would not come within the purview of section 138 of N.I. Act. "
21. In support of my view, I would further refer to the judgment of the Bombay High Court in Rama Krishnan Urban Cooperative Society Ltd. Vs. Sh. Rajender Bhagchand Warma, Criminal application no. 898/2009. The pertinent question which was discussed in this case was when a blank cheque is given as security, whether the provisions of 138 will be applicable or not. The court considered the entire issue and held as under : " It is argued that the cheque drawn must be for the discharge, in whole or in part, of any debt or other liability. So the debt or other liability must be in existence when the cheque, whether blank or post dated was issued. In this case the accused respondent issued the cheque in question as security for loan before loan amount was CC No. 621/12/07 The Madhav CoOperative Urban Thrift & Credit Society Ltd. vs. Lalita Sharma
20 of 29 disbursed. So, cheque was not towards any existing debt or liability. In case of loan transaction, borrower is in need of money and therefore he borrows loan amount from some one with understanding that the loan amount would be repaid in lump sum on a future date or in installments from particular future date onwards periodically, with or without interest. It is not transaction of loan, if the amount is to be repaid the moment it is paid to borrower. So, provisions of Section 138 of the Negotiable Instrument Act are not attracted. "
We may consider object and purpose for introducing amendment to the Negotiable Instrument Act, 1981 by Amendment Act, 1988 as stated in the Amendment Act and various authorities to facilitate correct interpretation of the provisions. The object and reasons clause of the bill which introduced the CC No. 621/12/07 The Madhav CoOperative Urban Thrift & Credit Society Ltd. vs. Lalita Sharma
21 of 29 Amending Act of 1988 would show that the new Chapter XVII was incorporated specifically to " enhance the acceptability of cheques in settlement of liabilities by making the drawer liable for penalties in case of bouncing of cheques due to insufficiency of funds in the accounts or for the reason that it exceeds the arrangements made by the drawer, with adequate safeguards to prevent harassment of honest drawers.
Thus the object of the amendment and introduction of Chapter XVII in the Negotiable Instrument Act by Act of 1988 was mainly to encourage all major transactions including commercial or business transactions through cheques and to enforce credibility and acceptability of cheques in settlement of liability in general. Encouragement of payment by cheques/credit cards/debit cards rather than by cash is necessary for healthy economy. That also brings in transparency in transactions and discourages creation of black or unaccounted money through evasion of taxes or other malpractices. So, provisions like Section 138 of N.I. Act are salutary to give reliability, credibility and acceptability of negotiable instruments like cheques in daily life. However, the object was not to provide effective and speedy remedy for recovery of loans. CC No. 621/12/07 The Madhav CoOperative Urban Thrift & Credit Society Ltd. vs. Lalita Sharma 22 of 29 Law makers must not have intended or imagined that money lenders or banks would obtain blank or post dated cheques while sanctioning/disbursing loans as securities and would use them to make debtors/borrowers to repay loan under threat of prosecution and punishment under section 138 of the N.I. Act. So, it is doubtful if provisions of Section 138 of the N.I. Act would be attracted to a case in which a blank or post dated cheque is obtained by a bank or money lender before or while sanctioning or disbursing loan amount as security for the loan. There was no supporting evidence from the side of the complainant as to whether the accounts had been verified. No accounts had been produced by the appellant to prove that liability was subsisting. Only when it is proved that a liability was existing, an offence under Sec. 138 will arise.
22. I would like to refer one more judgment by Hon'ble Delhi Court. In Pine Products Industries V, M/s R.P. Gupta and Sons, 2007 (2) C.C. Cases H.C. 166, it was held that when accused pleaded that his cheque was misused and he is not liable to pay the amount covered in the cheque then keeping in view the fact that complainant had not given any details what were the liabilities of the CC No. 621/12/07 The Madhav CoOperative Urban Thrift & Credit Society Ltd. vs. Lalita Sharma 23 of 29 accused, what was the amount for which cheque was issued as a part payment, on which date and what amount was give to the accused at what rate, therefore, presumption of liability has been rebutted by the accused so he is liable to be acquitted.
23. In the same manner, in the present case the accused has pleaded the misuse of cheque which was given blank signed for the security purpose and has disputed the liability to the tune of 82000/ on the date of cheque. Accused has also stated that she had paid 1718 installments. As the accused is devoid of any details of the loan disbursed to her, installments paid by her, outstanding liability on the date of the cheque, statement of account showing her liability to the tune of 82000/. Moreover CW1 also failed to answer question during his cross examination, therefore in my opinion the defence of the accused seems to be probable.
CC No. 621/12/07 The Madhav CoOperative Urban Thrift & Credit Society Ltd. vs. Lalita Sharma 24 of 29
24. Accused has stated during her examination and also at the time of service of notice under section 251 Cr.P.C. that the cheque was issued blank i.e. it bears his signature only and body of the cheque has not been filled by her. It is true that when the cheque in question contained the signature of the account holder, it is for the accused to explain the same, but merely because cheque contained the signature of the account holder or the accused it can not be said that the same was executed by him. In the present case, it is relevant to note that the case advanced by the accused is that the cheque in question was entrusted with the complainant and the cheque contained nothing more than her signature. Going by Section 138 of the N.I. Act, it can be seen that a drawing of cheque by a person on an account maintained by him with the banker for payment of any amount of money to another person from out of that account 'for the discharge', in whole or in part, of any debt or other liability are two important ingredients, especially in the background of this case. In the decision reported in Ch. Birbal Singh Vs. Harphool Khan (AIR 1976 Allahabad 23), it was held that execution of documents consists of signing of the document written out, read over and understood and does not consist of merely signing of a blank paper. In another CC No. 621/12/07 The Madhav CoOperative Urban Thrift & Credit Society Ltd. vs. Lalita Sharma 25 of 29 decision reported in Thakurlal Vs. Ramadhar (1986 ALJ 480), it had been held that mere admission of putting of signature and thumb mark on a blank sheet of paper is not admission of execution of the document. In the present case, accused did not dispute the signature on cheques, but her specific case is that she had entrusted with the complainant a blank cheque which contained her signature. Considering the aforesaid facts, I opine that there are suspicious circumstances surrounding the transaction and the stand of the accused that cheques were given blank seems to be believable.
25. Also, in the case of "Gopal Vs. Tonney Varghese" 2008 (1) Civil Courts Cases. 642 (Kerla) it has been held that mere proof of signature on cheque is not proof of its execution. In the absence, of any positive evidence regarding the execution of the cheque by the accused, it is to be held that the accused had issued only blank cheque and the same was not executed by him. Simply because the cheque contained the signature of the accused, it cannot be said that the cheque was drawn by the accused as contemplated by Section 138 N.I. Act. CC No. 621/12/07 The Madhav CoOperative Urban Thrift & Credit Society Ltd. vs. Lalita Sharma 26 of 29
25. From the statutory language used in section 138 N.I. Act, the intention of the legislature can be inferred. The every word has been used with a specific meaning and intention. While interpreting the language of the statute the court is suppose to give effect to the intention of the legislature. In any way , it cannot be said that putting signature on the blank cheque is equivalent to the word 'drawn' used in section 138 of the NI Act. Therefore, the word 'drawn' used in Section 138 has to be understood as 'execution of cheque'. A person is said to have "drawn" a cheque, if he has made, prepared or created a cheque. A Cheque is an instrument which is created in conformity with the requirement of section 6 read with section 5 of the N.I. Act. A reading of Section 5 and 6 shows that a cheque consists of mainly, two parts. One is, an unconditional order in witting directing the banker to pay a certain sum of money only, or to the order of a certain person or to the bearer of the cheque. The second part is the signature of the drawer.
26. When the execution of the cheque is denied by the accused, it is for the complainant to establish the same. In the absence of any positive evidence CC No. 621/12/07 The Madhav CoOperative Urban Thrift & Credit Society Ltd. vs. Lalita Sharma 27 of 29 regarding the execution of the cheque by the accused, it is to be held that the accused had issued only blank cheque and the same was not executed by him. Simply because the cheque contained the signature of the accused, it cannot be said that the cheque was drawn by the accused as contemplated by Section 138 of the NI Act.
27. In view of the above discussion , I hold that the complaint has not come to the court with the clean hands. The complaint failed to prove the existence of the alleged settlement in pursuance of which the cheque in question was issued. The complaint also failed to prove the outstanding liability of the accused on the date of cheque whereas same has been disputed by the accused. Complaint witness failed to tell and establish the actual liability of the accused, moreover same was not proved by placing on record accounts book despite such records are admittedly maintained by the complainant. Accused has proved non existence of consideration by raising probable defence. She has discharged initial onus by proving that existence of liability as improbable, doubtful and illegal thereby shifting the onus to complainant. She has brought on record CC No. 621/12/07 The Madhav CoOperative Urban Thrift & Credit Society Ltd. vs. Lalita Sharma 28 of 29 some material evincing that cheque in question might have issued as blank signed for security purpose and not towards the discharge of any debt or liability in the manner as has been alleged by the complainant and therefore, it will not fall within the province of section 138 NI Act.
28. In view of the above discussion, It is held that complaint has failed to establish that cheque in question was drawn by the accused towards discharge of any legal liability . No material is placed on on record which could prove that accused was liable to pay the cheque amount on the date of its issuance. Therefore, accused Lalita Sharma stands acquitted from the offence under section 138 N.I. Act. Bail bonds stands discharged. (Announced in the open court on 16.07.2012) This Judgment contains 29 pages and each paper is signed by me.
(BABRU BHAN) METROPOLITAN MAGISTRATE DWARKA COURTS /NEW DELHI CC No. 621/12/07 The Madhav CoOperative Urban Thrift & Credit Society Ltd. vs. Lalita Sharma 29 of 29 CC No. 621/12/07 The Madhav CoOperative Urban Thrift & Credit Society Ltd. vs. Lalita Sharma 30 of 29