Delhi District Court
Gee Aar Chit Pvt. Ltd. vs Vijay Kumar on 20 April, 2013
: 1 :
IN THE COURT OF MS. MANU VEDWAN, LD. METROPOLITAN
MAGISTRATE : SPECIAL COURT - 20 (NI ACT) : DWARKA : DELHI
GEE AAR CHIT PVT. LTD. VS VIJAY KUMAR
Complaint Case No. : 2169/12/04
P.S. : Timar Pur
U/s. : 138 N.I.Act
J U D G M E N T
1. Name of the complainant : Gee Aar Chit (P) Ltd Through one of its Director Sh. Gauri Shankar Gupta S/o Late Sh. Manohar Lal Gupta, having its registered office at 110/6, Banarsi Dass Estate, Timarpur, Delhi 110007
2. Name of the accused and address : Vijay Kumar Bansal S/o. Sh. Fateh Chand Bansal, R/o. BM98, Shalimar Bagh (West), Delhi
3. Offence complained of : U/s.138 N.I.Act
4. Plea of accused : Pleaded not guilty
5. Final Order : Convicted
6. Date of Reserving the : 08.4.2013 : 2 : Judgment
7. Date of Order : 20.04.2013 Date of Institution of case : 23.3.2004 Date of Decision of the case : 20.04.2013 BRIEF SKETCH OF THE CASE
1. Vide this judgment, I shall dispose of the complaint u/s.138 read with Section 142 of the Negotiable Instruments Act, 1881 against the accused.
2. The case of the complainant as per the complaint is that the complainant is a Private Limited Company being registered under the Companies Act, 1956 has been doing the business of Chit Fund at the above noted address under the Rules and Regulations of Madras Chit Fund Act applicable to Delhi. It is submitted that in continuation of its Chit Fund business the complainant company has started a Chit Series bearing no.GR60 consisting of twenty five members in the month of July, 1999 which ended in the month of June 2001. The total value of the aforesaid Chit Series was Rs.One Lac having maximum monthly installment of Rs. Four Thousand. It is also submitted that the accused had joined the aforesaid chit group in respect of two chits against Token nos. 22 and 23. Chit against token no.22 was prized in favour of the accused as he : 3 : gave the highest bid in an auction held on 5th November 2000. The prized amount of Rs. Eighty Six Thousand thus paid to the accused, by the way of the cheque bearing no.315923 dtd. 2.12.2000 drawn on Tamil Nadu Merchantile Bank Ltd., and same was duly encashed. Further, in another auction held on 3rd December 2000, the accused was declared successful bidder against token no.23 being the highest bidder. Thus, prized amount of Rs.Eighty Eight Thousand was paid to the accused, vide cheque no.315925 dtd. 26.12.2000 drawn on Tamil Nad Merchantile Bank Ltd and same was also duly encashed by the accused. Thereafter, accused on 26.12.2000 signed and executed various documents such as voucher, receipt, acknowledgment receipt, demand pronote and receipt and agreement in respect of Token no.22 and 23 in Chit Series no.GR60.
3. It is further submitted by the complainant in the complaint that accused after the encashment of these cheques into his account did not make the payment towards arrears and previous chit installments and also stopped making the payment of future installments. On 21.6.2002 a sum of Rs.3500/ was paid by the accused towards arrears of chit installments. Thereafter, a legal notice was got served upon the accused by the complainant company but, even after the receipt of the said legal notice accused failed to make any payment. After repeated requests : 4 : and demands by the complainant accused issued a cheque bearing no.021872 dtd. 05.1.2004, drawn on State Bank of Indore, Chandni Chowk, Delhi - 6 for Rs.1,32,572 with the assurance that the same would be duly honoured on presentation. Though, same was returned back dishonoured with the remarks "Insufficient Funds" on 06.1.2004. Thereupon the complainant sent a legal notice dated 04.2.2004 to the accused through registered AD Post and same has been duly served. Accused has failed to clear the outstanding or to pay the total amount of the aforementioned cheque issued by him.
4. Present complaint has been filed by the complainant against the accused through its authorised attorney. The complaint was filed within limitation on 20.3.2004 pursuant to which summons and thereafter warrants were issued against the accused, consequent thereupon the accused entered appearance and was admitted to bail. Notice u/s.251 CrPC was framed against the accused to which the accused pleaded not guilty and claimed trial. Thereafter, the matter was listed for evidence. AR of the complainant has been examined as CW1. CW1 deposes in his examinationinchief same facts as are submitted in the complaint and has relied upon following documents : Board of Resolution is Ex.CW1/A, copy of Certificate of Incorporation is Ex.CW1/B, Memorandum of Association is : 5 : Ex.CW1/C, chit agreement is Ex.CW1/D, voucher is Ex.CW1/E, Receipt is Ex.CW1/F, Acknowledgment receipt is Ex.CW1/G, Promissory note is Ex.CW1/H, agreement in respect of token no.22 and 23 is Ex.CW1/I, Legal notice is Ex.CW1/J, postal receipt and UPC slip are Ex.CW1/K and Ex.CW1/L respectively, statement of account is Ex.CW1/M, cheque in original is Ex.CW1/N, cheque returning memo is Ex.CW1/O, Legal notice and courier slips are Ex.CW1/P to Ex.CW1/S. Right of crossexamination of CW1 was earlier closed. Later on, CW1 was cross examined in accordance with the orders of Ld. Appellate Court dated 20.12.2012 CW1 in his cross examination admitted the fact that concerned chits were auctioned within a gap of one month and there separate agreements got executed with respect to them. CW1 denied the suggestion put to him that agreements entered for aforementioned chits were forged and fabricated. CW1 also denied to the suggestion that cheques having serial no.021861 to 021880 were handed over by the cousin of complainant to complainant by playing fraud upon accused.
5. Statement of accused u/s.313 CrPC recorded in which accused denied of owing any arrears towards the complainant at the time of signing the documents viz. (voucher, receipt, acknowledgment receipt, demand pronote and agreement) and : 6 : also submitted that in June2002 an amount of Rs.1,24,020/ was not due towards him. Accused in his statement u/s.313 CrPC also denied of issuing cheque Ex.CW1/N to clear his liabilities towards the complainant and submitted that the cheque Ex.CW1/N was given by him to his cousin Sh. Kirorimal Bansal on Kirorimal Bansal's persuasion that same was needed by him for some transaction. Though, later on same was handed over by Sh. Kirorimal Bansal to the complainant by playing fraud upon the accused. Accused in his statement admitted of receiving legal notice Ex.CW1/P sent by the complainant.
6. DW1 in his examination in chief deposed that he had taken two chits from the complainant of the amount of Rs.1,00,000/ each, bid amount for chit no.60/22 is of Rs.86,000/ while the bid amount for chit no.60/23 is of Rs.88,000/. DW1 further deposed that he had in his examination in chief paid nineteen installments to the complainant in respect of the abovementioned chits. DW1 also deposed that even after receiving cheques from the complainant after successful bidding, he paid due installments in January, thereafter in March and April and later on, he paid other installments by way of cash to the complainant without any receipt in good faith. DW1 in his examinationinchief deposed that cheque which is Ex.CW1/N was taken from him by playing fraud, by the complainant in connivance of one of his cousin but he didnot : 7 : file any complaint in respect of that fraud. DW1 was crossexamined by counsel for the complainant. DW1 in his cross examination admitted signing of documents which are Ex.CW1/D, CW1/F, CW1/G, CW1/H, CW1/I and Ex.CW1/E. DW1 in his cross examination submitted that he received cheques of successful bidding from complainant after paying nineteen installments.
7. Before adverting to the facts of case in hand it would be pertinent to reproduce the relevant provisions of Section 138, 139 and Section 118(a) of Negotiable Instruments Act at the very outset, which reads as follows : Section 138 of Negotiable Instruments Act reads as follows:
138. Dishonour of cheque for insufficiency, etc., of funds in the account - Where any cheque drawn by a person on an account maintained by him with a 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, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to : 8 : 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 provisions of this Act, be punished with imprisonment for [a term which may be extended to two years], or with fine which may extend to twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall apply unless
(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(b) 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
(c) the drawer of such cheque fails to : 9 : make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
Explanation - For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability.] Section 139 of Negotiable Instruments Act reads as follows:
Presumption in favour of holder - It shall be presumed, unless the contrary is proved, that6 the holder of a cheque received the cheque of the nature referred to in section 138 for discharge, in whole or in part, of any debt or other liability.
Section 118 of Negotiable Instruments Act reads as follows:
Presumption 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 : 10 : instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;
8. Regarding the scope of presumptions u/s.118(a) and u/s.139 of the NI Act, there is no doubt about the settled legal position that once the signatures on the cheque are admitted by the drawer of the cheque, there arises a presumption in favour of the payee/holder in due course in terms of Section 139 and 118(a) of Negotiable Instruments Act that the cheque has been issued for consideration and in discharge of legally enforceable debt or liability. It is also well settled that (a) the presumption does not go to the extent of presuming the existence of debt and (b) the aforesaid presumption is rebuttable in nature (see Krishna Janardhan Bhatt vs. Pattatraya G.Hegde (SC)2008(1) RCR Criminal 695. Further, it is also well settled that for the rebuttal of the presumptions it is not necessary that the accused must step into the witness box but the presumptions can be rebutted either by cross examination of complainant's witness (see M.S.Narayana Manon vs. State of Kerala & Another AIR 2006 SC 3366 and Krishna Jnardhan Bhat vs. Dattatraya Hegde SC 2008(1) RCR Criminal 695 or even by raising presumptions of fact or law from the material available on : 11 : record (see Kundan Lal Kala Ram vs. Custodian Evacuee Property, reported as AIR 1961 SC 1316). In Mallavarapu Kasivisweswara Rao Vs. Thadikonda Ramulu Firm and Others AIR 2008 SC 2898 it was held as under:
"12. Under Section 118 (a) of the Negotiable Instruments Act, the court is obliged to presume, until the contrary is proved, that the promissory note was made for consideration. It is also a settled position that the initial burden in the regard lies on the defendant to prove the nonexistence of consideration by bringing on record such facts and circumstances which would lead the Court to believe the nonexistence of the consideration either by direct evidence or by preponderance of probabilities showing that the existence of consideration was improbable, doubtful or illegal. ... ... ... The bare denial of the passing of the consideration apparently does not appear to be any defence. Something which is probable has to be brought on record for getting the benefit of shifting the onus of proving to the plaintiff. To disprove the : 12 : presumption, defendant has to bring on record such facts and circumstances upon consideration of which the court may either believe that the consideration did not exist or its nonexistence was so probable that a prudent man would, under the circumstances of the case, shall act upon the plea that it did not exist. ... ... ..."
9. Standard of proof of rebuttal of presumptions by any person accused of an offence under Section 138 of the Negotiable Instruments Act is preponderance of probabilities and It is not at all necessary for the accused to prove his defence beyond reasonable doubts. Though, bare denial or bald suggestions given by the accused would not be sufficient to rebut the aforesaid presumption (see Hiten P. Dalal vs. Bratindranath Banerjee AIR 2010 SC 1898). Thus, whether the presumption has or has not been rebutted depends on the facts of each case to be analyzed in the light of aforesaid legal principles.
10. Question which is to determined here is whether the accused handed over the cheque in question to the complainant in discharge of any legal debt or liability. At the time of oral arguments, ld. counsel for the complainant contended that : 13 : complainant is the duly incorporated company doing the business of chits. Present accused availed the facilities of chits as per rules framed thereunder, and when he was in arrears he issued the cheque to the complainant which is Ex.CW1/N and executed various documents including distinct agreements with respect to chits. Counsel for the accused contended and questioned at the time of final arguments the existence of two agreements for one transaction which counsel for complainant explained that as there were two transactions involved of two different amounts so the existence of two agreements cannot be questioned. Further, counsel for the accused also contended that accused was not in arrears to the complainant and the cheque in question was given by the accused to one of his relative who by playing fraud upon the accused handed over the same to the complainant which is strongly opposed by the counsel for the complainant on the ground that there was no such transaction and had there been such a transaction, the person involved i.e. the person to whom the accused handed over the cheque as named by the accused as Sh. Kirorimal Bansal should be called for proving this transaction or otherwise accused would have reported the matter to police by lodging formal complaint.
11. A perusal of the aforesaid testimony would show that the accused has admitted chit transaction with the complainant.
: 14 : Accused has also not disputed his signatures on the cheque in question. Though, he had disputed the way the concerned cheque was handed over to complainant. As per version of the accused, cheque which is Ex.CW1/N was handed by him to his cousin Sh. Kirorimal Bansal who was known to both accused and complainant. It was this, cousin who had misused the cheque Ex.CW1/N and handed over the same to the complainant and thus played fraud upon the accused. But, in view of the provisions of Section 118(a) and Section 139 of the NI Act, in my considered opinion once the accused has admitted the jural relationship compiled with the nondisputing of signatures on the cheque in question, there are sufficient grounds to revise the presumptions in favour of the complainant that the cheque was issued by accused in favour of the complainant for consideration and in discharge of his legally enforceable debt or liability towards the complainant. No doubt, the aforesaid presumption is rebuttable in nature, but in my considered opinion, accused here has miserably failed to rebut the same even by preponderance of probabilities for the reasons to follow. Accused has stated in his statement u/s.313 CrPC and further in his cross examination that the cheque Ex.CW1/N was given by him to Sh. Kirorimal Bansal for his personal use who by playing fraud upon the accused handed over the same to the complainant, suggestion of this fact when put to complainant in his cross examination has been denied by him.
: 15 : Accused has miserably failed to lead any evidence to establish this fact in his defence evidence also even after having ample effective opportunities for the same. Thus, in the absence of any reliable evidence to the contrary, a presumption arises in favour of the complainant in terms of provisions of Section 118(b) of NI Act that cheque was Ex. CW1/N was drawn by the accused on the date mentioned in the aforesaid cheque in favour of the complainant.
12. The complainant has further contended that in spite of giving of statutory notice u/s.138 NI Act, the accused failed to pay the amount of cheques in question. In his statement u/s.313 CrPC and further in his cross examination accused admitted that he received the legal demand notice which is Ex.CW1/P as stipulated by Section 138 NI Act from the complainant.
13. At this juncture, it would also be pertinent to refer to Section 27 of the General Clauses Act which is extracted as below: "27. Meaning of service by post Where any Central Act or Regulation made after the commencement of this Act authorises or requires any document to be served by post, whether the expression serve or either of the expressions give or send or any other expression is used, then, : 16 : unless a different intention appears, the service shall be deemed to be effected by properly addressing, prepaying and posting by registered post, a letter containing the document, and, unless, the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post."
14. Also a reference to the following paragraphs of judgment given by the Hon'ble Supreme Court in CC Alavi Haji vs Palapetty Muhammed & Another, Appeal (Crl.) 767 of 2007 would be relevant at this juncture: "14. Section 27 gives rise to a presumption that service of notice has been effected when it is sent to the correct address by registered post. In view of the said presumption, when stating that a notice has been sent by registered post to the address of the drawer, it is unnecessary to further aver in the complaint that in spite of the return of the notice unserved, it is deemed to have been served or that the addressee is deemed to have knowledge of the notice. Unless and until the contrary is proved by : 17 : the addressee, service of notice is deemed to have been effected at the time at which the letter would have been delivered in the ordinary course of business. ... ... ...
15. Insofar as the question of disclosure of necessary particulars with regard to the issue of notice in terms of proviso (b) of Section 138 of the Act, in order to enable the Court to draw presumption or inference either under Section 27 of the G.C.Act or Section 114 of the Evidence Act, is concerned, there is no material difference between the two provisions. In our opinion, therefore, when the notice is sent by registered post by correctly addressing the drawer of the cheque, the mandatory requirement of issue of notice in terms of Clause (b) of proviso to Section 138 of the Act stands complied with. ... ... ... It is then for the drawer to rebut the presumption about the service of notice and show that he had no knowledge that the notice and show that he had no knowledge that the notice was brought to his address or that the address mentioned on the cover was : 18 : incorrect or that the letter was never tendered or that the report of the postman was incorrect. ... ... ...
15. It is evident that the drawer has failed to make the payment of the cheque amounts in question within 15 days of the receipt of the aforesaid notice, thus, the present complaint u/s.138 NI Act has been initiated against the accused. Decision and Reasoning
16. Thus, in the view of the abovementioned discussion, it is evident that the basic ingredients of Section 138 NI Act have been made out and the accused has failed to make any payments towards the cheque in question. Therefore, the offence u/s.138 NI Act stands proved against the accused. The accused, therefore, stands convicted for the abovesaid offence.
17. Let the accused be heard on the point of sentence on 03.5.2013 at 2.00 pm. Copy of the judgment be given to the accused free of cost.
ANNOUNCED IN OPEN COURT (MANU VEDWAN) ON 20 April, 2013 th METROPOLITAN MAGISTRATE SPECIAL COURT NO.09, NI ACT DWARKA, DELHI