Delhi District Court
Sh. Nihal Chand Aggarwal vs M/S Ram Rich Pal Prem Chand & Ors. on 26 February, 2013
Sh. Nihal Chand Aggarwal vs M/s Ram Rich Pal Prem Chand & Ors.
IN THE COURT OF MS. DEEPIKA SINGH, METROPOLITIAN
MAGISTRATE-01, NORTH, DELHI
CC No. 1837/10
Sh. Nihal Chand Aggarwal
S/o Sh. Ram Gopal Aggarwal,
R/o 11, Sri Nagar Colony,
Delhi-1100052
....................Complainant
vs.
1. M/s Ram Rich Pal Prem Chand
555, Lahori Gate,
Delhi - 110006.
2. Sh. Prem Chand Goyal
S/o Sh. Ram Rich Pal,
Partner of M/s Ram Rich Pal Prem Chand,
555, Lahori Gate,
Delhi- 110006
............................Accused
The offence complained of or proved : u/s 138 NI Act
The plea of the accused persons : not guilty
Final order : Convicted
Date of institution of complaint : 13.01.2011
Date on which reserved for judgment : 11.02.2013
CC No. 1837/10 Page 1 of 18
Sh. Nihal Chand Aggarwal vs M/s Ram Rich Pal Prem Chand & Ors.
Date of pronouncement of judgment : 26.02.2013
JUDGMENT:
1. Vide this judgment this court shall dispose of the present complaint u/s 138 Negotiable Instruments Act 1881 filed by the complainant against the accused.
2. Brief facts stated in the complaint are that there were good friendly relations between the complainant and the accused Mr. Prem Chand Goyal since last so many years. In the month of January 2009, the accused Mr. Prem Chand Goyal met with some financial crises due to the recession in the market and approached the complainant requesting him to advance a friendly loan of Rs.2,00,000/- for a period of one year and also assured that he will pay an interest on the said amount @ 12% per annum. The complainant advanced a sum of Rs.2,00,000/- in cash to the accused Mr. Prem Chand Goyal in January, 2009. At time of borrowing the said loan, the accused Mr. Prem Chand Goyal had promised to return the same after one year with interest. On the persisting demands and requests of the complainant, the accused Mr. Prem Chand Goyal issued a cheque bearing no.781292 dt.20.11.2010 for a sum of Rs.2,00,000/- drawn on Central Bank of India, Naya Bazar, Delhi-06, in favour of the complainant. The said cheque is ExCW1/A. The accused Mr. Prem CC No. 1837/10 Page 2 of 18 Sh. Nihal Chand Aggarwal vs M/s Ram Rich Pal Prem Chand & Ors. Chand Goyal also promised to pay the upto date interest @ 12% per annum on the said amount after the encashment of the said cheque. The complainant presented the said cheque for encashment through his banker i.e. State Bank of India, Sri Nagar Branch, Delhi after its due date but the said cheque was returned by the banker of the accused with the remarks "funds insufficient" vide return memo dt. 25.11.2010. The said return memo is ExCW1/B. The complainant demanded the said cheque amount in cash along with interest but the accused flatly refused to pay the same. Thereafter, the complainant sent a legal notice dt.03.12.2010 through his counsel vide Regd. A. D. Post and UPC. The said legal demand notice is ExCW1/C and postal receipts are ExCW1/D to ExCW1/H. On failure of the accused to make the payment within the stipulated period, the present complaint was filed.
3. After hearing the arguments on summoning, sufficient grounds were made out against the accused u/s 138 NI Act and process was issued against him. On his appearance, the accused was admitted to bail on 04.01.2012.
4. Notice U/s 251 Cr.P.C was served upon the accused on dt.04.01.2012 to which the accused pleaded not guilty and claimed the trial. CC No. 1837/10 Page 3 of 18
Sh. Nihal Chand Aggarwal vs M/s Ram Rich Pal Prem Chand & Ors.
5. Complainant examined himself in his evidence and he adopted his pre summoning affidavit as the post summoning affidavit, which is ExCW1/1 where he reiterated the same facts.
During the cross examination he deposed that he is a retired person from Delhi Vidyut Board. His retirement age was 60 years. He has two sons namely Mr. Sanjay and Rajiv and two daughters. It is correct that his son Mr. Rajiv Aggarwal is the proprietor of M/s Mahaan Traders who deals in the business of rice. Voluntarily stated that he also deals in tea. He does not know if his son the owner of M/s Mahaan Traders has obtained any sales tax license or not. His son Rajiv is living with him. He does not know if his son Rajiv, owner of M/s Mahaan Trader has maintained the books of account. He too does not prepare the books of account (his individual). He was in Delhi in the year 2009, in January. It is wrong to suggest that he was not in Delhi in January, 2009. He did not withdraw money from any bank, which he lent to the accused. The amount of Rs. 2,00,000/- was arranged from his household savings as well as from savings of his wife. He does not know whether he mentioned the aforesaid saving record in his complaint or affidavit. It is wrong to suggest that he had not given Rs. 2,00,000/- to Mr. Prem Chand. It is also wrong to suggest that because of not giving the said money to Mr. Prem Chand, he CC No. 1837/10 Page 4 of 18 Sh. Nihal Chand Aggarwal vs M/s Ram Rich Pal Prem Chand & Ors. had not mentioned the same fact in his complaint or affidavit. He does not know about the exact date when he had lent the money to Mr. Prem Chand in January, 2009. It is wrong to suggest that he had not mentioned the date because he had not given any money to Mr. Prem Chand. It is correct that before giving the sum of Rs. 2,00,000/-, he did not take any permission from any legal authority. Voluntarily stated that he had very good relation with Mr. Prem Chand for more than 40 years. Prior to this he has never lent any money to Mr. Prem Chand as he did not ask for. He does not know the purpose for which the accused borrowed money but he personally requested him to give him a loan of Rs. 2,00,000/- as he was suffering from financial crisis. It is wrong to suggest that Mr. Prem Chand had asked him the loan in personal capacity because Mr. Prem Chand is a partner. He does not know whether accused is a partner in any firm or not but he is running the firm by the name M/s Ram Rich Pal Prem Chand. He does not know the father name of Mr. Prem Chand. It is wrong to suggest that he does not know the father name of Mr. Prem Chand. At this stage, Ld. Counsel for the accused shows the complaint copy to the witness wherein the father name of the accused has been mentioned as Sh. Ram Rich Pal and the same is encircled and underlined. It is wrong to suggest that he is aware about the status of the accused in his firm. At this stage witness is CC No. 1837/10 Page 5 of 18 Sh. Nihal Chand Aggarwal vs M/s Ram Rich Pal Prem Chand & Ors. confronted with the cheque Ex. CW1/A to which the witness has replied that he does not remember whether the cheque was issued by the accused in the capacity of a partner in his firm.
He does not have any money lending license. Voluntarily stated that money lending is not his business. He has not lent any money to anyone except Mr. Prem Chand. It is correct that he received the reply from the accused against the legal notice dt. 03.12.2010. He does not know whether he has mentioned the fact of receiving of reply the legal demand notice in his complaint or affidavit. He further does not remember whether he denied any receiving of reply in his complaint or affidavit. At this stage, Ld. Counsel for the accused has produced the complete set of reply dt. 15.12.2010 to the legal notice which is Ex. CW1/DX1. The postal receipt is Ex.CW1/DX2. The UPC slip is Ex.CW1/DX3 and Ex.CW1/DX4 and the AD card is Ex.CW1/DX5.
It is wrong to suggest that the cheque in question had never been issued to him by the accused in the year 2010. It is wrong to suggest that the cheque in question had been received by him in lieu of his son Rajiv in the year 2006. It is wrong to suggest that the cheque in question was issued in the year 2006. At this stage, the complainant has been confronted with the counter foil of the cheque in CC No. 1837/10 Page 6 of 18 Sh. Nihal Chand Aggarwal vs M/s Ram Rich Pal Prem Chand & Ors. question issued by the Central Bank of India, Naya Bazaar, Delhi. In this counter foil at point AA the detail of cheque in question has been mentioned which is Ex. CW1/DX6. It is correct that he has relied upon the Ex. CW1/A which is original cheque in question. It is correct that ink with which signatures have been put on cheque in question is different with the ink with which the rest of contents have been filled. It is correct that handwriting with which the name of the payee on the cheque in question has been written and the handwriting in which amount in words is written. It is correct to suggest that ink with which the date on cheque in question is written is different with which amount in words and figures is written. It is wrong to suggest that the cheque in question was given by the accused to his son Mr. Rajiv. It is wrong to suggest that the cheque in question was given as blank signed cheque to his son Mr. Rajiv by the accused for the purpose of some business dealing.
He is an income tax assesee but he does not file the return. He has not filed the detail of his bank account on record. He has also not filed the detail of bank account of his wife on record. He has not filed the detail bank account of his son Mr. Rajiv. It is wrong to suggest that he has not lent any money to the accused, therefore, he has not filed the detail of bank account of aforesaid persons. He is not filing any income tax return since the year 2003 as his income is not taxable. It is CC No. 1837/10 Page 7 of 18 Sh. Nihal Chand Aggarwal vs M/s Ram Rich Pal Prem Chand & Ors. wrong to suggest that he is not filing the income tax return because he is not lent any money to the accused. It is wrong to suggest that he is deposing falsely.
6. All the incriminating evidence had been put to the accused to which he replied that he has not given the cheque in question to complainant at all rather it had been given to his son in the year 2006 towards the payment of certain goods. Later on he forgot to take back the cheque in question. He stated that he does not want to lead any defence evidence.
7. I have gone through the evidence and heard the final arguments advanced by both the parties at length.
8. The case laws material for the present facts and circumstances are discussed below.
In case entitled as "Rangappa vs Sri Mohan" [(2010), 11, Supreme Court Cases 441] where the Hon'ble Supreme Court of India, held that the bare denial of the passing of the consideration apparently does not appear to be any defence. To disprove the presumptions, the defendant has to bring on record such CC No. 1837/10 Page 8 of 18 Sh. Nihal Chand Aggarwal vs M/s Ram Rich Pal Prem Chand & Ors. facts and circumstances, upon consideration on which the Court may either believe that the consideration does not exist or its non-existence was so probable that a prudent man would, under the circumstances of the case, shall act upon the plea that it does not exist and it was held that there is an initial presumption, which favours the complainant in the sense that the presumption mandated by Sec. 139 of NI Act does indeed include the existence of a legally enforceable debt or liability. Since the accused did admit that the signatures on the cheques was his, the statutory presumption comes into play and same has not been rebutted even with regard to the material submitted by the complainant.
9. In the judgment "Hiten P. Dalal vs. Bratindra Nath Banerjee" AIR 2001 (SC) 3897 it was held that presumption under NI Act is a presumption of law as distinguished from a presumption under a fact which describes provisions by which the Court "may presume" a certain state of affairs. Presumptions are rules of evidence and do not conflict with presumptions of innocence because by the later all that is meant is that the prosecution is obliged to prove the case against the accused beyond reasonable doubt. Obligation on the prosecution may be discharged with the help of presumption of law or fact unless the accused adduces evidence showing the CC No. 1837/10 Page 9 of 18 Sh. Nihal Chand Aggarwal vs M/s Ram Rich Pal Prem Chand & Ors. reasonable possibility of non-existence of a presumed fact.
10. In the judgment entitled "Pradeep Aggarwal & Ors vs Y. K. Goel", Cr. M. C. 66/2009 (Hon'ble High Court of Delhi), where it was held that complaints u/s 138 NI Act is a summary trial and accused should first disclose his defence and merely saying "He is innocent" or "He plead not guilty" will not be sufficient and onus is on the accused to show that no offence could have been deemed to be committed by him for some specific reasons and defences.
It was further held that u/s 138 NI Act, there is no presumption that even if an accused fails to bring out his defence, he is still to be considered innocent.
11. In the judgment "Mosaraf Hossain Khan vs Bhagheeraha Engg. Ltd." AIR 2006 S. C. 128(2006), it was held that the object of the provision of section 138 NI Act is that for proper and smooth functioning of business transaction in particular, use of cheques as negotiable instruments would primarily depend upon the integrity and honesty of the parties. It was noticed that cheques used to be issued as a device inter alia for defrauding the creditors and stalling the payments. Dishonour of a cheque by the bank causes incalculable loss, injury and inconvenience to the payee and the entire credibility of the business transactions CC No. 1837/10 Page 10 of 18 Sh. Nihal Chand Aggarwal vs M/s Ram Rich Pal Prem Chand & Ors. within and outside the country suffers a serious setback.
12. In the judgment "K.N. Beena Vs. Muniyappan, AIR 2001 SC 2895, where it was held that mere denial / averments in reply by the accused are not sufficient to shift the burden of proof onto the complainant. Accused has to prove in trial by leading cogent evidence that there was no debt or liability, which in the present case accused has not done.
13. Upon hearing arguments and on the perusal of material on record reveals that accused has admitted issuance of the cheque in question as blank signed cheque for security. He has also admitted having received the legal demand notice from the complainant to which he replied also. Accused has taken the defence that accused has issued the cheque in question to the son of the complainant namely, Mr. Rajeev in the course of business dealing in the year 2006 towards payment for supplying of rice. But the son of the complainant neither supplied the goods nor returned the cheque in question despite repeated requests and demands. Complainant has allegedly misused the cheque in question. Accused has further taken the defence that the cheque in question which was presented in his account had actually become inoperative since long back. But complainant in connivance CC No. 1837/10 Page 11 of 18 Sh. Nihal Chand Aggarwal vs M/s Ram Rich Pal Prem Chand & Ors. with the bank concerned obtained the memo dt. 25.11.2010 mentioning the reason for dishonour as funds insufficient. Accused has submitted that he did not ask the son of the complainant to return back the cheque because of business relations and goodwill. He has also alleged that son of the accused replied that cheque in question has been lost and any of his family member will not misuse the same. Assuming for a moment the version of the accused to be correct, what prevented him from filing any complaint before the police or any court of law regarding the alleged loss of cheque and alleged misuse by the complainant. If the cheque was allegedly issued to the son of the complainant namely, Mr. Rajeev then what prevented him to examine Mr. Rajeev in his defence or move an application for summoning of this witness before this court. Mere averments without any cogent proof cannot establish the innocence of the accused.
The defence taken by the accused that the ink with which signatures have been put in the cheque in question is different with the ink with which the rest of the contents have been filled is not convincing as the law in this regard is clear. Regarding this, I would like to emphasize the law laid down in Ravi Chopra Vs. State & Anr 2008 (102) DRJ 147 in para 20 it was observed that there is no provision in the NI Act which either defines the difference in the handwriting or the CC No. 1837/10 Page 12 of 18 Sh. Nihal Chand Aggarwal vs M/s Ram Rich Pal Prem Chand & Ors. ink pertaining to the material particulars filled in comparison with the signatures thereon as constituting a "material alteration" for the purposes of section 87 NI Act. What however essential is that the cheque must have been signed by the drawer. As long as the cheque has been signed by the drawer, the fact that ink in which name and figures are written or date filled up is different from the ink of signatures is not a material alteration for the purposes of section 87 NI Act. Hence, the defences raised by the accused in this regard is without any substance and merits. The averment of the accused that complainant in connivance with the bank got issued the cheque returning memo with wrong reason of "funds insufficient" whereas the actual reason was that the account was inoperative, is also without any merits as accused has failed to examine any bank official in his defence to substantiate his version. In the net result, the accused has failed in substantiating his reasonable, probable and convincing defence to rebut the statutory presumptions in favour of the complainant.
14. Ld. Counsel for the accused has relied upon the judgment entitled "Krishna Janardhan Bhatt vs Dattatraya G. Hedge" 1 (2008) CCR 199(SC). I have highest regard for the case laws cited on behalf of the accused, but the same has CC No. 1837/10 Page 13 of 18 Sh. Nihal Chand Aggarwal vs M/s Ram Rich Pal Prem Chand & Ors. been pronounced in different context and is of no help to the accused.
15.. The accused has miserably failed in substantiating his defence and showing that there is no liability of the accused towards the complainant. The complainant successfully proved all the essential requirements of sec 138 of the Act i.e. :
a) The cheque for an amount is issue by the accused to the complainant on a bank account maintained by him.
b) The said cheque is issued for the discharge, in whole or in part of any debt or other liability by the accused.
c) The cheque is returned by the bank unpaid on account of insufficient amount to honour the cheque.
d) The cheque is presented to the bank within 6 months from the date on which it is drawn and is within the period of its validity.
e) Within 30 days demand notice is issued by the complainant on receipt of information by him from the bank regarding the dishonour of the cheque.
f) The drawer of the said cheque / accused fails to make the payment of the said amount of the money to the complainant within 15 days of the said notice. CC No. 1837/10 Page 14 of 18
Sh. Nihal Chand Aggarwal vs M/s Ram Rich Pal Prem Chand & Ors.
g) The debt or liability against which the cheque was issued is legally enforceable.
16. Under the aforesaid discussion, accused Mr. Prem Chand Goyal is held guilty for offence U/s 138 NI Act and he is consequently convicted for the offence u/s 138 of Negotiable Instruments Act.
Announced in open court (Deepika Singh)
today i.e. on 26.02.2013 MM-01 NI Act /North / Delhi
CC No. 1837/10 Page 15 of 18
Sh. Nihal Chand Aggarwal vs M/s Ram Rich Pal Prem Chand & Ors. IN THE COURT OF MS. DEEPIKA SINGH, METROPOLITIAN MAGISTRATE-03, CENTRAL, DELHI CC No. 1837/10 Sh. Nihal Chand Aggarwal S/o Sh. Ram Gopal Aggarwal, R/o 11, Sri Nagar Colony, Delhi-1100052 ....................Complainant vs.
1. M/s Ram Rich Pal Prem Chand 555, Lahori Gate, Delhi - 110006.
2. Sh. Prem Chand Goyal S/o Sh. Ram Rich Pal, Partner of M/s Ram Rich Pal Prem Chand, 555, Lahori Gate, Delhi- 110006 ............................Convict ORDER ON SENTENCE :
04.03.2013 Present : Complainant in person along with Ld. Counsel Mr. Prakash Arya.
Convict in person along with Ld. Counsel Sh. M. P. Mittal. Arguments heard on sentencing.
Ld. counsel for the convict has argued that convict has a large family to support including five children. He is 70 years old and is suffering CC No. 1837/10 Page 16 of 18 Sh. Nihal Chand Aggarwal vs M/s Ram Rich Pal Prem Chand & Ors. from old age diseases. He has been bonafide throughout in his conduct before the court, hence lenient view should be taken towards him.
Since the cases of dishonoring of the cheques are on high rise in the society, therefore, court is not inclined to take lenient view and release the convict under Probation of Offenders Act as it would not be having any deterrent effect.
Almost 2 years have elapsed since the cheque was dishonored and the same has yet not been repaid to the complainant.
Keeping in view this conduct of the convict, no leniency ought to be granted to him. The object of Section 138 N.I. Act is to inculcate faith in the efficacy of banking operations and credibility in transacting business on negotiable instrument. It may also be noticed that when this offence was inserted in the statute in 1988, it provided for imprisonment upto one year which was revised to two years following the amendment to the Act in 2002, which makes it quite evident that the legislative intent to provide a strong criminal remedy in order to deter the worryingly high incidence of dishonour of cheques. In the present case, this faith has been breached and warrants imposition of imprisonment and payment of compensation.
After hearing the arguments, court is of the considered opinion that convict Sh. Prem Chand Goyal is sentenced to simple imprisonment for three months and he is further liable to pay a compensation of Rs. 2,50,000/-(Rs. Two lac fifty thousand only) to the complainant within two months from today i.e. 04.03.2013 failing which, he will be liable to further simple imprisonment of three months.
CC No. 1837/10 Page 17 of 18
Sh. Nihal Chand Aggarwal vs M/s Ram Rich Pal Prem Chand & Ors. At this stage, Ld. Counsel for the convict has filed an application for suspension of sentence, so that he can file an appropriate appeal before the appropriate court. Hence convict is admitted to bail for 30 days on furnishing bail bond in the sum of Rs.20,000/- along with one surety of like amount.
Bail bonds furnished. Accepted.
Convict is admitted to bail till the expiry of 30 days.
Come up before this court on 04.04.2013. Copy of the judgment and order on sentence is given free of cost to the convict.
Announced in open court (Deepika Singh)
today i.e. on 04.03.2013 MM-03 NI Act / Central / Delhi
CC No. 1837/10 Page 18 of 18