Delhi District Court
Cc No. 2145/12 M/S Prestige Finvest Pvt ... vs Smt. Rahisha on 29 November, 2014
1
IN THE COURT OF SHRI JAGMOHAN SINGH,
MM(NI ACT)-03 DWARKA COURTS:NEW DELHI
CC NO: 2145/12
Unique Case ID No: 02405R0670162007
M/s Prestige Finvest Pvt Ltd
Regd. Office at WZ-49F, 1st Floor, Tyagi Market,
Budella, Vikaspuri, New Delhi-110018
[Through its AR] ...............Complainant
Versus
Smt. Rahisha
W/o Sh. Usman
R/o B-245, Gali No.2, Pappu Colony,
Ghaziabad, U.P. .....................Accused
1. Name of the complainant : M/s Prestige Finvest Pvt Ltd
2. Name of the accused : Smt. Rahisha
3. Offence Complained of or proved : Under section 138 of Negotiable
Instruments Act, 1881
4. Plea of the Accused : Pleaded not guilty
5. Date of filing : 20.11.2007
6. Date of Institution : : 23.11.2007
7. Date of reserving judgment/order : 22.11.2014
8. Final Order/Judgment : Aquitted
9. Date of pronouncement : 29.11.2014
JUDGMENT
BRIEF FACTS AND REASONS FOR THE DECISION OF THE CASE:-
1. Vide this judgment, I shall dispose of the present complaint u/s 138 of the Negotiable Instruments Act, 1881 (in short, NI Act) filed by the complainant against the accused.
CC NO. 2145/12 M/s Prestige Finvest Pvt Ltd vs Smt. Rahisha 2
2. The case of the complainant is that the complainant is a Private Limited Company, registered under the Companies Act, 1956. The accused jointly with her husband Usman Chaudhary borrowed personal loan in the sum of Rs. 2,00,000/- from the complainant on 18.07.2005 for a period of four years on interest @ 18 % per annum which was repayable in 16 quarterly installments of Rs. 21,500/- each beginning from 18.10.2005. In discharge of her liability in respect of the said loan, accused issued a cheque bearing no. 712750 dated 18.09.2007 for Rs. 2,11,966/- drawn on Corporation Bank, Dilshed Garden Branch, New Delhi in favour of the complainant. According to the complainant, the aforesaid cheque when presented for realisation, was received back dishonoured vide bank return memo dated 07.10.2007 with the remarks "Insufficient Funds". Consequentially, a legal notice dated 15.10.2007 was served by the complainant through its counsel upon the accused vide Regd. AD and UPC dated 17.10.2007 calling upon the accused to make the payment towards cheque amount in question within 15 days of receipt of notice. According to the complainant, despite the said notice, no payment against the above dishonoured cheque has been made by the accused within the requisite period. Hence the present complaint.
3. The cognizance of offence under Section 138 of the Negotiable Instruments Act, 1881 was taken by the Ld Predecessor Court and accused was summoned vide order dated 23.11.2007. The accused appeared in Court and was admitted to bail. Thereafter, separate notice u/s 251 Cr.P.C. explaining accusations against the accused u/s 138 of the NI Act was framed on 21.09.2013, to which he did not plead guilty and claimed trial. An application u/s 145(2) of the NI Act moved on behalf of the accused seeking to cross examine the complainant's witness was allowed and AR of the complainant was cross examined. Upon statement of Ld. Counsel for the complainant, CE was closed on 07.12.2013. Statement of accused u/s 313 Cr.P.C. was recorded on CC NO. 2145/12 M/s Prestige Finvest Pvt Ltd vs Smt. Rahisha 3 04.01.2014. Accused examined herself as DW1 and also led evidence through DWs Usman Chaudhary and Israr Ahmad. Upon statement of the accused, DE was closed on 01.11.2014.
4. Documents relied upon by the complainant are as follows:-(i)Ex. CW1/1:
Extracts of the Minutes of the meeting of Board of Directors of the Complainant Company dated 20.10.2007 appointing Sh. Rakesh Kumar Shrivastava as its AR; (ii) Ex. CW1/2: Copy of certificate of incorporation of the complainant company; (iii) Ex. CW1/3 (colly): Copy of Loan-cum- Guarantee Agreement dated 18.07.2005 along with Receipt and Demand Promissory Note; (iv) Ex. CW1/4 : Original Cheque bearing no. 712750 dated 18.09.2007 for a sum of Rs. 2,11,966/- drawn on Corporation Bank, Dilshed Garden Branch, New Delhi; (v) Ex. CW1/5 and Ex. CW1/6: Original Cheque Return Memos dated 07.10.2007 and 08.10.2007; (vi) Ex. CW1/7: Copy of Legal Notice dated 15.10.2007; (vii) Ex.CW-1/8 and Ex.CW1/9: Postal Receipts; and (viii) Ex. CW1/10: Statement of account of the accused.
5. Offence under S. 138 N.I. Act is deemed to have been committed when 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 honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank. To launch prosecution under the said section, the following requirements are to be fulfilled:- (i) that 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; (ii) the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 30 days of the CC NO. 2145/12 M/s Prestige Finvest Pvt Ltd vs Smt. Rahisha 4 receipt of information by him from the bank regarding the return of the cheque as unpaid; (iii) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice.
Being cumulative, it is only when all the ingredients and aforementioned requirements are satisfied that the person who had drawn the cheque can be deemed to have committed an offence under Section 138 of the Act.
6. Section 118 of the NI Act inter alia provides that it shall be presumed, until the contrary is proved, that every negotiable instrument was made or drawn for consideration. Section 139 of the NI Act stipulates that unless the contrary is proved, it shall be presumed, that the holder of the cheque received the cheque, for the discharge of, whole or part of any debt or liability. The said presumptions are rebuttable in nature.
7. It has been held in M/s. Kumar Exports v. M/s. Sharma Carpets, 2009 A.I.R. (SC) 1518 that the accused may rebut these presumptions by leading direct evidence and in some clear and exceptional cases, from the case set out by the complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial. Further, the burden may be discharged by the accused by showing preponderance of probabilities and the onus on the accused is not as heavy as it is on the complainant to prove his case.
8. I have heard both the Ld counsels and also gone through the record carefully. Ld counsel for the complainant also relied upon following authorities in support of his arguments; (i) M/s The Jammu & Kashmir Bank vs. Abhishek Mittal 2012 (1) DCR 189 [Delhi High Court]; (ii) Hiten P. Dalal vs. Bratindranath Banerjee, AIR 2001 SC 3897; (iii) C.C. Alavi Haji vs. Palapetty Muhammed & Anr. 2007 [2] JCC [NI] 225 [Supreme Court]; (iv) K. Bhaskaran vs. Sankaran Vaidhyan Balan 1999 CRI. L.J. 4606 CC NO. 2145/12 M/s Prestige Finvest Pvt Ltd vs Smt. Rahisha 5 [Supreme Court] and; (v) Rangappa vs Mohan 2010 [3] JCC 254 [NI] [Supreme Court].
9. Ld counsel for the accused also relied upon following authorities in support of his arguments; (i) M/s Battery Pace vs P.K. Singh & Anr. 2013 (1) DCR 373 [Allahabad High Court]; (ii) M/s Sekhon & Sekhon Finance vs Rani 2013 (3) DCR 120 [Punjab & Haryana High Court]; (iii) Gulam Mujtaba Khan @ Gulam Mustafa Khan vs State of Bihar 2011 (1) DCR 398 [Patna High Court]; (iv) C. Santhi vs Mary Sherly & Anr. 2012 (1) Civ.C.R. 152 (Ker.) [Kerala High Court]; (v) Deepshika Kumari vs. Leela Infrastructure & Mining Pvt Ltd. 2013 (1) ADR 38; (vi) M/s Sree Gokulam Chit & Finance Company vs Gurudas 2011 (1) DCR 645 [Kerala High Court]; (vii) Aswin Papers vs B. G. Kalathil 2013 (2) DCR 427 [Kerala High Court] and; (viii) Crompton Greaves Ltd vs Shri Kantibhai & Anr. 2011 (2) DCR 323 [Bmbay High Court].
10.As per Schedule-II forming part of the Loan-cum-Guarantee Agreement, Ex.CW1/3, the present loan of Rs. Two Lacs was payable with interest in 16 quarterly installments of Rs. 21,500/- each beginning from 18.10.2005 and ending on 18.07.2009. The above schedule also records serial number of cheques issued b the accused against each installment. The Statement of Account(SoA) Ex.CW1/10 is not complete as it does not record transactions relating to the present loan from the very beginning. It starts from 18.04.2006 with opening balance as Rs. 1,85,425/- and records receipt of Rs. 21,783/- by cheque no. 723606 on 24.07.2006 and further cash receipt of Rs. 21,500/- on 08.11.2006 towards installment no. 5. Therefore it records dishnonour of cheque no. 71248, for Rs. 21,500/-, meant for installment no. 6 on 18.01.2007, dishonour of cheque no. 712749 meant for installment no.7 on 18.04.2007, dishonour of cheque no. 518132 meant for installment no.8 on 18.07.2007 and then records dishonour of the cheque in question for Rs. 2,11,966/- on CC NO. 2145/12 M/s Prestige Finvest Pvt Ltd vs Smt. Rahisha 6 23.09.2007. It is pertinent to note that on the date of the present cheque, the amount outstanding against the accused stood exactly equal to the amount of the present cheque. I have noted the contents of the above statement of account (SoA) in some deatil as they are relevant to the facts in issue, as would be clear from the following discussion.
11. As regards the purpose of issuance of the present cheque, there is a serious contradiction between the averments in the affidavit of evidence of the AR which is Mark A and the statement made by the AR during his cross examination. In para 5 of the above affidavit, it was stated that the matter was settled on 18.09.2007 and the accused issued the present cheque Ex.CW1/4 amounting to Rs. 2,11,966/- towards full and final settlement of the aforesaid loan liability. Thus, as per the above affidavit the entire loan stood settled for Rs. 2,11,966/- on 18.09.2007 and on the same date the accused issued the present cheque. However, AR/CW1 stated during his cross examination on 16.11.2007 that the cheque in question was given towards payment of installments. AR further stated that 16 such cheques were obtained from the accused at the time of execution of the loan agreement and the same were given by the accused duly filled in. The above contradiction goes to the root of the matter and makes the case of the complainant highly doubtful. Because, if the above statement made by the AR during his cross examination is to be believed, it negates the existence of any settlement and also negates the averment in the affidavit that the present cheque was given towards such settlement. It is also pertinent to note that in the entire cross examination, AR did not reiterate the stand of the complainant even once that any settlement had taken place with the accused or that the present cheque was given towards such settlement.
12.There is another grave infirmity in the version put forth by the AR which gravely dents the case of the complainant. As noted earlier, AR stated that 16 CC NO. 2145/12 M/s Prestige Finvest Pvt Ltd vs Smt. Rahisha 7 cheques were obtained from the accused for the purpose of installments and that the same were duly filled in. As also noted above, serial nubmer of the said cheques is mentioned in Schedule-II forming part of Loan-cum-Gurantee Agreement Ex.CW1/3 with amount of Rs. 21,500/- each. One such cheque is cheque bearing no. 712746 shown against installment no.4. However, as per Statement of Account (SoA) Ex.CW1/10, as against the said installment no.4, a cheque bearing no. 723606 was presented for Rs. 21,783/- on 24.07.2006. This entry clarly proves existence of other cheques also in the custody of the complainant.
13.It is also pertinent to note the suggestion put to AR/CW1 during his cross examination that accused issued cheques bearing numbers 712743 to 712750 and 518132 to 518140 towards payments of installment but that the same were blank signed and that one such cheque was unileteraly filled by the complainant in the present complaint. The above sugesstion was of course denied by CW1/AR. However, as noted earlier, Schedule-II forming part of the present loan agreement records cheques beaing numbers 712743 to 712749 and 518133 to 518140. The present cheque is of the same series which were handed over to the complainant at the time of preparation of the above schedule II. This circumstance further corborates the defence of the accused that he issued the present cheque not towards any settlement as alleged by the complainant but as blank signed at the time of execution of the present loan agreement.
14.It is also pertinent to note that the cheque in question Ex.CW1/4 is exactly of the same amount of Rs. 2,11,966/- which was outstanding against the accused on the date of the said cheque. Any settlement involves negotiations and a spirit of give and take. It is highly unbelievable that the accused issued the cheque for the same amount as demanded by the complainant on its mere asking.
CC NO. 2145/12 M/s Prestige Finvest Pvt Ltd vs Smt. Rahisha 8
15.It is also pertinent to note that the extent of liability of the accused was seriously disputed by the accused from very beginning. At the time of framing of notice u/s 251 Cr.PC against the accused, she stated that her husband (DW2 Usman Chaudhary) obtained loan of Rs. Two Lacs from the complainant in the year 2005. She further stated that one Sh. Subash Jain, agent of the complainant had come to the office of her husband and offerered loan to enhance business of her husband. She further stated that thereafter her husband Usman Chaudhary developed good relations with the complainant. The accused also stated that there was a plot at Pratap Vihar, Ghaziabad owned by the complainant and the complainant requested her husband to get the boundary wall constructed as her husband was a building material supplier. She further stated that her husband spent around Rs. One Lac for construction of the said boundary wall and thereafter also helped in selling the above plot. She further stated that Subhash Jain also promised her husband to pay a commission of Rs. One Lac from the complainant as commission for sale of the above plot. She further stated that, however, Subhash Jain did not pay either the boundary wall charges or the above commission and therefore differences arose between the complainant and her husband and she also stopped making further payment of the loan in question. The accused reiterated the same stand while deposing as DW1. Her husband/DW2 Usman Chaudhary, DW3 Ibrar Ahmad and DW4 Sohrab also deposed on the same lines. The complainant, however, denied having any relations with the above Subash Jain and accused also failed to prove any association of said Subhash Jain with the complainant. However, CW1/AR admitted during his cross examination that a plot located at Pratap Vihar, Ghaziabad was purchased by the complainant company by auction from Ghaziabad Development Authority around 10 years back. AR also denied that Usman Chaudhary got constructed the boundary wall on the said plot on the asking of the complainant company. He admitted that CC NO. 2145/12 M/s Prestige Finvest Pvt Ltd vs Smt. Rahisha 9 the complainant company sold the above plot but denied that commission @ 2 % of the sale amount of Rs. Fifty Four Lacs was payable to husband of the accused. It is also on record that Subhash Jain and Rajesh Jain stood as guarantors on behalf of the accused in the loan in question. It also came on record that the above Subhash Jain has since died.
16.Due to failure of the accused to show any association between the said Subhash Jain and the complainant, her claim in respect of charges for construction of boundary wall and/or commission promised to her husband on the sale amount of the above plot can not succeed. However, from the collective reading of the testimonies of DWs including the accused, it emerges clearly that the accused firmly believed that her husband was entitiled to the above construction charges and commission. In these circumstances, it is all the more unbelievable that accused issued the present cheque towards the entire outstanding amount without seeking adjustment towards the above charges/commission.
17.In these circumstances, I hold that accused has been able to rebut presumptions u/s 118 and 139 NI Act on arising in favour of the complainant. The onus thus shifted to the complainant to prove that the accused issued the present cheque towards payment of the outstanding dues and on the date of the said cheque as alleged. However, the complainant failed to discharge the said onus.
18.The accused is entitled to acquittal on this ground alone. However, for the sake of record, I may also deal with the another defence taken by the accused that he did not receive the legal demand notice a copy of which is already Ex.1/7.
19.Section-27 of the General Clauses Act raises a presumption in favour of the sender of service by post of a letter, served by post provided the same is properly addressed. It reads as under:
"Meaning of service by post - Where any (Central Act) or Regulation made after the commencement of this Act authorizes or requires any document to be CC NO. 2145/12 M/s Prestige Finvest Pvt Ltd vs Smt. Rahisha 10 served by post, where the expression "serve" or either of the expressions "give"
or "send" or any other expression in used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing pre- paying 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."
20.In C.C. Alavi Haji v. Palapetty Muhammed and Anr. (2007) 6 SCC 555 also it has been held by the Hon'ble Supreme Court that S. 27 gives rise to a presumption that service of notice has been effected when it is sent to the correct address by registered post.
21.The legal notice dated 15.10.2007 (Ex.CW1/7) was sent to the accused through Regd. Post and UPC receipts dated 17.10.2007 (Ex.CW1/8 and Ex.CW1/9). In these circumstances, presumption u/s 27 General Clauses Act arose in favour of the complainant. Accused did not lead any evidence to rebut the above presumption. Accordingly, legal notice Ex.CW1/7 is deemed to have been served upon the accused.
22.Now coming to the authorities relied upon by the complainant. In Jammu & Kashmir Bank (supra) also it was observed by the Hon'ble Delhi High Court that presumption u/s 118 & 139 were rebuttable in nature. However, in the facts of the said case, the defence of the accused of cheque being issued for the purpose of security was held not sufficient to rebut the above presumption. In the present case, however the above presumptions stood rebutted as the accsued was able to negate the case of the complainant that the present cheque was given towards any settlement. In case titled Hiten P Dalal (supra) also, it was observed by the Hon'ble Supreme Court that presumption u/s 139 NI Act was rebuttable. However, the defence of the accused that he had issued security cheques to the complainant for intended transaction in securities, which never took place, was held not to be reliable. As facts of the above two cases were CC NO. 2145/12 M/s Prestige Finvest Pvt Ltd vs Smt. Rahisha 11 different, their ratio does not apply to the present case. The remaining authorities cited by the complainant were relied upon on the issue of service of notice, which issue already stands decided against the accused. Hence, there is no need to discuss them separately.
Order
23.In view of the above discussion I hold that complainant has failed to prove its case against the accused beyond resonable doubt. Accordingly, accused Rahisha is acquitted of the offence 138 NI Act.
Announced in open Court on (JAGMOHAN SINGH) 26th November, 2014 (11 pages) M.M.(NI Act)-03/Dwarka, 26.11.2014/Delhi CC NO. 2145/12 M/s Prestige Finvest Pvt Ltd vs Smt. Rahisha