Delhi District Court
Mamta Khanna ........Complainant vs . on 11 October, 2019
IN THE COURT OF MS AMARDEEP KAUR: MM-03 (NI ACT):
PHC: NEW DELHI
Judgment
In the matter of: - CC No.: 52321-16
Mamta Khanna ........Complainant
W/O Shri Amit Khanna
R/o K-13A, 3rd Floor, Khirki Extension,
Malviya Nagar, New Delhi-110017.
Vs.
Vaibhav Bhargava ..........Accused
S/o Shri. Raju Bhargava
At Shop No. 94, Modern Chemist,
Sarojini Nagar Market, New Delhi
Date of Institution of Complaint 02.04.2013
Offence Complained of u/s 138 N.I. Act
Plea of Accused Not Guilty
Date of Final Arguments Heard 27.09.2019
Decision Conviction
Date of Decision 11.10.2019
BRIEF REASONS FOR THE DECISION OF THE CASE:
1.Brief facts of the case as alleged by the complainant are that she and the accused were known to each other. In the month of June 2012, the accused approached the complainant seeking financial assistance of Rs.4,50,000/- lacs and promised to return the same within six months time. The complainant at request of the accused handed him over the said amount in cash. On demand, in December 2012, the accused in discharge of his legal liability issued three cheques bearing no. 196289 dated 12.12.2012 for Rs. 1,50,000/- drawn on ICICI Bank, cheque bearing no. 196290 dated 12.12.2012 for Rs. 2,00,000/- drawn on ICICI Bank and cheque no. 131320 dated 12.12.2012 for Rs. 1,00,000/- drawn on HDFC Bank for CC No. 52321-16 Smt. Mamta Khanna v. Vaibhav Bhargava Page of 13 of 16 repayment. However, the said cheques were returned dishonored upon presentation for reason "insufficient funds" and "payment stopped by drawer". Despite service of the legal demand notice, the accused did not repay the amount due within 15 days of the stipulated period. Therefore, the present complaint under Section 138 of the Negotiable Instruments Act,1881 (hereinafter called "the act")
2. The complainant filed his pre-summoning evidence as Ex CW1/1 and relied upon the following documents:
a. Cheque bearing no. 196290, 196289 & 131320 Ex.CW1/A (colly) b. Three cheque Dishonor Memos all dated 01.02.2013 Ex.CW1/B (colly) c. Legal demand notice dated 01.03.2013 Ex.CW1/C d. Postal receipts & Tracking Report Ex.CW1/D (colly)
3. After perusal of material on record, prima facie case was made out and cognizance was taken vide order dated 24.05.2013. Accused appeared on bailable warrants and secured bail. Notice u/s 251 Cr. PC was served upon him to which he pleaded not guilty and claimed trial. In his plea of defence, the accused submitted that he does not know the complainant and the impugned cheques were stolen and a complaint in this regard was made by him to his banker. After his application under section 145(2) NI Act was allowed, the accused duly cross-examined the complainant and thereafter CE was closed on 01.04.2016.
4. Thereafter, all incriminating evidence was put to the accused and his statement under Section 281 read with Section 313 was recorded wherein the accused again denied the claim of the complainant. He submitted that the complainant has filed this false complaint by misusing the impugned cheques after procuring them from her husband Amit Khanna. He also submitted that he CC No. 52321-16 Smt. Mamta Khanna v. Vaibhav Bhargava Page no. 16 of 16 had never received any legal notice and that the complainant has filed forged courier receipts.
5. In his defence, the accused examined only himself as witness (DW1), after his application under section 315 CrPC was allowed. In his examination he submitted that he does not know the complainant and had never had any transaction with her. It is only after his appearance in the court that he has realized that she is the wife of one Sh. Amit Khanna whom he had known earlier and had met only a few times. Further he reiterated his earlier submissions that he had lost his signed cheques, and upon realization he instantly issued Stop Payment instructions regarding these cheques including the cheque no. 131320 to his banker as established by the form Ex DW1/A. Further he submitted that the complainant has misused the cheques by procuring them illegally through her husband Sh. Amit Khanna. During the cross examination, accused was confronted with a settlement agreement Ex DW1/CA upon which he admitted his signatures at point A & B. The accused however voluntarily submitted that the complainant and her husband pressurized him to enter into the said settlement agreement. No other witnesses were sought to be examined by accused and therefore DE was closed vide order dated 13.09.2019.
6. Thereafter, final arguments were advanced on behalf of both parties. Ld. Counsel for accused argued before this court that the accused has successfully rebutted the presumption against him under Section 139 NI act and it is clear from the evidence on record that the complainant had never known the accused and she simply procured his lost cheques through her husband and filed a false claim. He further argued that the complainant had failed to satisfactorily explain her source of funds to the extent of the alleged loan. Further even though the CC No. 52321-16 Smt. Mamta Khanna v. Vaibhav Bhargava Page of 13 of 16 complainant herself admits in her examination as CW1 that she knew the accused through her husband Amit Khanna, she intentionally did not examine him in support of his complaint. While pointing out several lacunae in the case of the complainant, ld. counsel has argued that it is highly unlikely that a person would issue three separate cheques of the same date towards common liability as alleged in the present case and this itself shows that the claim of the complainant is spurious. Further it is pointed by ld. counsel that the complainant has intentionally deposed wrong facts in her evidence of way of affidavit. She has wrongly mentioned in her affidavit Ex CW1/A and complaint that she shared friendly relations with the accused for a substantial time. Also she has wrongly mentioned that all impugned cheques were returned dishonored for the reason "Insufficient funds" whereas only two of the impugned cheques were dishonored for Insufficient funds and the third one was for "Payment Stopped by Drawer". Ld. counsel also submitted a written synopsis of his submissions.
7. Per Contra, Ld. Counsel for complainant has argued that the defence as averred by the accused is a complete sham. He argued that the accused being on friendly terms with the complainant induced her to extend the loan and issued the impugned cheques for its repayment. However to escape his liability he is now presenting a false defence that his cheques were lost and were misused by the complainant. Further, it is advanced by ld counsel that the accused entered into a settlement agreement dated 29.04.2019 with the complainant qua the impugned transaction and issued cheque bearing number 782553 dated 06.05.2019 drawn on Yes Bank for Rs 3,25,000/- as part payment of the total settlement amount of Rs. 5,50,000/-. However, the said cheque was also returned unpaid on successive presentation. He therefore argues that firstly, if the accused had no liability towards the complainant at all, why would he enter CC No. 52321-16 Smt. Mamta Khanna v. Vaibhav Bhargava Page no. 16 of 16 into any settlement agreement and again get his cheque dishonored. Secondly, if the accused was pressurized by the complainant and her husband to enter into such agreement, why did he never initiate any legal action against them. Therefore it is argued by ld counsel for the complainant that the accused is intentionally avoiding making payment for his due liability by presenting before this court, a false and concocted defence, devoid of any merit.
8. I have considered the rival submissions and perused the record
9. Now, for an offence under Section 138 NI Act, it is essential that the cheque must have been issued in discharge of legal debt or liability by accused on an account maintained by him with a bank and on presentation of such cheque for encashment within its period of validity, the cheque must have been returned unpaid. The payee of the cheque must have issued legal notice of demand within 30 days from the receipt of the information by him from the bank regarding such dishonor and where the drawer of the cheque fails to make the payment within 15 days of the receipt of the aforesaid legal demand notice, cause of action under Section 138 NI Act arises.
10. Admittedly, the said cheques Ex. CW1/A (colly) were drawn upon the account of the accused. The same were presented to the bank within its validity period and were returned dishonored as established vide return memo Ex.CW1/B(colly). Legal demand notice Ex.CW1/C demanding the cheque amount was dispatched within statutory period as established by postal receipts Ex.CW1/D(Colly). Therefore, essentials of Section 138 NI Act stand prima facie satisfied and a presumption under Section 139 read with Section 118 of NI Act arises in favor of complainant, for the accused to rebut either by discrediting the veracity of material relied upon by the complainant or by leading positive CC No. 52321-16 Smt. Mamta Khanna v. Vaibhav Bhargava Page of 13 of 16 evidence to probablise his defence on the touchstone of preponderance of probabilities as provided by a three Judge bench of the Honorable Supreme Court in Rangappa Vs Sri Mohan (2010) 11 SCC 441
11. I shall now discuss each of the defences put forth by the accused in light of the evidence on record.
12. Non- Receipt of Legal Demand Notice Received
a) The complainant has placed on record the legal demand notice dated 01.03.2013 (Ex CW1/C) addressed to the accused at "Shop no. 94, Modern Chemist, Sarojini Nagar, New Delhi" along with postal and courier receipts (Ex CW1/D(colly)). However, the accused in his statement under section 281 read with section 313 CrPC and again in his deposition as DW1 has submitted that he never received any legal notice from the complainant. It is submitted by the accused in his evidence as DW1 that the address upon which the complainant has sent the legal notice belongs to his father and he has not visited the said address in years. He further submitted that his family had severed ties with him way back in the year 2009 and where the complainant claims to be a close friend of the accused she can be expected to be aware of such fact and therefore it can be presumed that the complainant intentionally sent the legal demand notice to the wrong address and the accused never received it.
b) Now perusal of file shows that the address on which the legal notice is sent is the same as furnished by the accused in his own bail bonds furnished by him on 04.02.2014 and also on the vakalatnama in CC No. 52321-16 Smt. Mamta Khanna v. Vaibhav Bhargava Page no. 16 of 16 favor of his counsel furnished on the same date. Further summons and bailable warrants from this court were duly served to the accused on the same address upon which he made appearance. In light of such contradictions, it cannot be said that the address so mentioned on the legal demand notice was not that of the accused. Therefore, by virtue of Section 27 of General Clauses Act read with section 114 of Indian evidence act, delivery of the legal demand notice (Ex.CW1/C) can be safely presumed.
c) Further, we may also place reliance on the dicta as laid by Supreme court in C.C Alavi Haji Vs Palapetty Muhammed & Anr (2007) 6 SCC 555, wherein three judge bench of the apex court has categorically stated that non-receipt of legal demand notice cannot be the only defence. If at all the accused did not receive the legal notice he can make the payment so due within 15 days of receipt of summons from court along with copy of the complaint. A person who does not pay even after the receipt of court summons cannot contend that there was no proper service of notice as required under Section 138 NI Act, by ignoring the statutory presumption under Section 27 of General Clauses Act.
13. Non-existence of legal Liability
a) It is the narrative of the accused that the impugned cheques were lost by him and he filed a compliant in this regard to his bank. He has placed on record a document dated 07.12.12 (Ex DW1/A) whereby the accused has given Stop Payment Instruction to his banker HDFC Bank regarding cheque serial number 131317 to 131340. It is alleged by the accused that the complainant somehow procured these cheques, filled them in her favor without any authority or permission and misused it by CC No. 52321-16 Smt. Mamta Khanna v. Vaibhav Bhargava Page of 13 of 16 presentation. Now, examination of the evidence on record reveals that apart from bare averments, the accused has furnished absolutely no details in his application under section 145(2) NI act, in his statement of defence under section 251 CrPC, in his statement recorded under section 313 CrPC read with section 281(1) CrPC or even in his deposition on oath as DW1 as to how and when the accused lost the impugned cheques and when exactly did he realize that his cheques have gone missing. Also no mention has been made if the entire cheque book was lost or was it only some loose cheques since the impugned cheques belong to two separate banks altogether. Even if his averments are presumed to be true, no reasoning has been offered as to why the accused had kept signed blank cheques with him for it is not common for individuals to do so. In absence of such details therefore, the averments of the accused seem highly unconvincing.
b) This court is also perplexed as to why the accused issued "Stop Payment Instruction" to his banker only regarding one of the impugned cheques i.e. regarding cheque bearing number 131320, if all of them were allegedly lost. Even in the Stop Instruction Form Ex DW1/A no details have been furnished as to how and when the cheques were lost. Now, the said Stop Payment instruction as laid in Ex DW1/A, is not in regards to just one cheque but for an entire cheque range i.e. cheque bearing number 131317 to 131340 drawn on HDFC Bank. The accused has not offered any explanation or even a hypothesis to elucidate that if the accused had indeed lost multiple cheques at the same point in time and in similar circumstances, how did only one of those reach the present complainant and was misused. Also how did cheques beyond the ones that CC No. 52321-16 Smt. Mamta Khanna v. Vaibhav Bhargava Page no. 16 of 16 are reported to be lost, reached the complainant for misuse. It is also strange as to why the accused not register any complaint or NCR with the police to safeguard his interest against any probable misuse. In such circumstances, the version of the accused does not inspire much confidence, for it would be really convenient for a drawer to give away a cheque against due liability and then turn around and casually file a complaint of it being lost with his banker or the police to prepare a self- serving defence ahead of any prosecution upon dishonor of cheque.
c) Now in his plea of defence to the notice under section 251 CrPC the accused has submitted that he had lost the cheuqes, however in his statement under section 281(1) read with section 313 CrPC recorded on 20.04.2018 he has taken an inconsistent plea and submitted that Amit Khanna, the husband of complainant somehow lay hands on his blank signed cheques and misused them through his wife, the present complainant. In his evidence as DW1 as well, the accused has submitted that the complainant has misused his cheques by procuring them illegally through her husband. He has also made a similar suggestion to the complainant in her cross examination. Further in his deposition as DW1, the accused has submitted that he had known Amit Khanna earlier, however, he never had any friendship with him. Now where the accused has alleged, at the most a formal acquaintance, with the husband of the complainant, no explanation has been offered by him as to how the said Amit Khanna procured his lost cheques om the first place. It is not the case that the two used to work together, or that the two were close friends who used to meet regularly etc., and therefore he had access and opportunity to steal his cheques from his possession nor has he averred CC No. 52321-16 Smt. Mamta Khanna v. Vaibhav Bhargava Page of 13 of 16 that the said Amit Khanna, extorted or coerced him to forcefully hand over the impugned cheques to him. Therefore, in such circumstances, it is highly unlikely to believe that some cheques were lost by the accused and somehow miraculously they landed up with his acquaintance Sh. Amit Khanna who allegedly connived with his wife to file the present false complaint.
d) Again even if the submissions of the accused are assumed to be true that his lost cheques were misused, this court is finding it difficult to understand that while the present accused is vehemently contesting the present complainant since 2013 when he first made appearance, why he never initiated any civil or criminal action against the complainant or her husband till date regarding the alleged misappropriation of the impugned cheques like any other prudent person. The conduct of the accused therefore does not resonate with what can be expected of a reasonable man who can be expected to take a rather precautionary approach on his cheques being misplaced and can be expected to use every legal remedy to defend his lawful rights. Therefore, the version as enumerated by the accused does not seem plausible and thus it cannot be said that the accused has probablized his defence.
e) Ld. counsel for complainant has contended that the since the accused is aware that he is guilty of an offence under section 138 NI act and is therefore liable for punishment extending to two years of imprisonment in addition to fine, the accused to escape his punitive liability entered into a settlement agreement with the complainant during the pendency of the present complainant. On the other hand, Ld counsel CC No. 52321-16 Smt. Mamta Khanna v. Vaibhav Bhargava Page no. 16 of 16 for accused has submitted that the accused was pressurized by the complainant and her husband to enter into such agreement. Now even if the accused voluntarily entered into some settlement with the complainant qua the present complainant, the same cannot be relied upon for ascertaining the guilt of the accused or to draw any adverse inference against him since that would defeat the very purpose of Alternate Dispute Resolution mechanism and would discourage litigants from resolving their conflicts amicably. They would always be apprehensive that such settlement would be prejudicial to their rights when the case is proceeded on merits. Therefore, the submission of ld. counsel for complainant is rejected.
f) It is pointed by ld. counsel for accused that though the complainant in her complaint and legal demand notice has submitted that parties were in friendly relations for a substantial period of time and used to visit each other's house, in her cross examination she has taken a contradictory plea that she has never visited the house of the accused and as such it is in correct to state that the accused and the complainant had friendly relation for substantial period of time and having visiting terms to the house of each other. Ld. counsel for accused therefore submitted that the complainant by making such inconsistent submissions, has herself demolished her case and instead proved his assertions that the accused had never known the complainant.
g) Now, firstly the question to be determined in the present complaint is not as to what was the relationship or the proximity of such relationship between the parties, but to determine whether the impugned cheques were issued against CC No. 52321-16 Smt. Mamta Khanna v. Vaibhav Bhargava Page of 13 of 16 a legally recoverable liability or not. There is no presumption or rule of law that a person cannot issue a cheque to a stranger and therefore if the accused contends that he had no transaction whatso ever with the complainant, it is for him to explain as to how did the impugned cheques move out of his possession and reach the present complainant. Secondly, as per the deposition of accused himself, he had known the husband of the complainant Sh. Amit Khanna and has met him a couple of times. Therefore, it will not be outrageous to presume that the complainant had also met the accused through her husband which she has also submitted in her deposition as CW1.
h) Further, it is a common understanding that in the Indian cultural setup, the term "friends" is used very liberally. Even when people have met only once or twice, they refer to each other as 'friends' rather than calling themselves 'acquaintances'. So while the complainant did not know the accused personally but through her husband and it is submitted that the accused used to visit her house two three times in a month, it is not difficult to imagine that due to the closeness of the accused with her husband, even the complainant started knowing the accused well. Therefore, where the accused has submitted that the complainant illegally procured the impugned cheques from her husband, and no explanation has been offered by the accused as to how the cheques came into his possession in the first place, this court finds it difficult to deny the complainant her rightful claim only because she failed to produce any photograph of the accused attending her marriage or other family function or because she could not depose as to the make and color of car driven by him or because she did not know the names or contact numbers of his family members. In such circumstances, it is also not relevant that there was no written document CC No. 52321-16 Smt. Mamta Khanna v. Vaibhav Bhargava Page no. 16 of 16 executed at the time of extending such loan since it is not unusual for friends and acquaintances to extend friendly loan upon oral understanding.
i) Ld. counsel for accused has also questioned the financial capability of the complainant to extend the alleged loan amount and has submitted that the complainant has failed to justify the source of the funds. Further, it is submitted that it is highly unlikely that a person would pay huge amount of Rs. 4.5 lacs in cash without any receipt or any documentation. Now, the complainant in her deposition as CW1 has submitted that she is working as an area business manager with Hindustan Unilever Limited and she arranged for the said loan partly from her personal savings and through amount received from her Kitty. Now, it is not the case of the accused that the complainant was not working at all and was simply a housewife or that the salary drawn by her was not consummate to the amount so extended. The accused therefore, simply by alleging that it is highly unlikely that a person would have Rs 4,50,000/ cash readily available at home to extend a friendly loan, cannot exalt himself of his liability to establish a probable defence. As to the absence of any written receiptcumtransaction, there is no requirement of law that every loan has to be accompanied with documentation. Indian Contract law allows for oral contracts as well and the same are are equally valid as any other written contract. Therefore contention of learned counsel for accused in this regard is not tenable.
j) It is the contention of the accused that the complainant did not examine her husband Amit Khanna through whom she alleges to know the accused to support her case and the same is a serious lacuna in her complaint. Now, this court is not to adjudicate upon the relationship between the parties or CC No. 52321-16 Smt. Mamta Khanna v. Vaibhav Bhargava Page of 13 of 16 how is it that the two came to know each other. Rather, the entire focus of this complaint is to determine if the impugned cheque was issued towards a legal liability or not. Therefore, when the accused despite having sufficient opportunity did not summon Sh. Amit Khanna to prove his defence that the complainant illegally procured his lost cheques from him, he cannot be exalted of his liability to establish his probable defence by placing reverse onus on the complainant to prove her assertions that though she knew the accused through her husband the impugned cheques were issued to her by the accused to repay the loan of Rs 4,50,000/- since the the presumption under section 139 NI Act read with section 118 NI Act operates in favor of the complainant.
k) Further with respect to the argument that the complainant has not shown the alleged loan in her ITR statements, this court is of the opinion that such act of the complainant might invite liability under provisions of Income Tax Act, but her claim under the present complaint under Section 138 NI Act cannot be held to be void for such non-compliance.
l) Lastly, ld counsel for accused has submitted that the complainant has wrongly submitted in her complaint that the impugned cheques were presented with her Banker i.e. ICICI Bank Limited, Jhandewalan Extension, New Delhi, However as per her statement 20.08.2015, it was submitted by the accused that she maintains her account at ICICI Bank, Vasant Vihar, New Delhi. Again, though in her complaint and legal demand notice, all impugned cheques were all returned dishonoured on account of "Insufficient funds", as per the cheque dishonour memos placed on record by the complainant herself, though cheques bearing number 196290 & 196289 drawn on ICICI bank were returned dishonoured for "funds insufficient", cheque bearing number 131320 drawn on CC No. 52321-16 Smt. Mamta Khanna v. Vaibhav Bhargava Page no. 16 of 16 HDFC Bank was returned dishonoured on account of "payment stopped by drawer". Therefore, it is contended that the complainant intentionally deposed wrong facts on affidavit before this court.
m) Now where contradictions have been pointed in the testimony of a witness, it is for the court to see whether they are material enough to obliterate his entire case or not. In the case in hand, the cheque return memos Ex CW1/B(Colly) clearly establishes the reason of dishonor of the impugned cheques. Now only because the complainant wrongfully mentioned in her complainant an incorrect reason of dishonor the same cannot be held to have any bearing upon the fate of the present complaint, since it is not the reason of dishonor that matters but the fact that the cheque got dishonored that does. Reliance is placed on the dicta as laid by the Honorable Supreme Court in Laxmi Dyechem v. State of Gujarat, (2012) 13 SCC 375, wherein the apex court has categorically established that the reason for dishonor is immaterial.
n) Again, where the accused earlier deposed that she maintains her account at ICICI Bank Jandewalan, New Delhi and later submitted that her account is located at ICICI bank, Vasant Kunj, New Delhi, the same has limited bearing only to the extent of determination of the jurisdiction of the present complainant and has no significant bearing on the liability of the accused. Even Otherwise, a person cannot be made liable for drafting errors inadvertently committed by her advocate. Therefore, the contradictions as pointed by ld counsel for accused in the testimony of the complainant does not seem of much avail to vindicate the guilt of the accused.
14. In view of the above discussion, therefore, the accused has failed to CC No. 52321-16 Smt. Mamta Khanna v. Vaibhav Bhargava Page of 13 of 16 establish any probable defence and rebut the presumption under Section 139 read with Section 118 of Negotiable Instrument Act. Accordingly, accused Vaibhav Bhargava, S/o Sh. Raju Bhargava, is convicted of the offence punishable under section 138 Negotiable Instruments Act.
15. Copy of the judgment be given free of cost to the accused.
Announced in Open Court
on 11th of October, 2019 (AMARDEEP KAUR)
MM-03/NDD/PHC
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