Delhi District Court
Raghunandan Gupta vs Darshan Kaur on 13 December, 2023
Raghunandan Gupta v. Darshan Kaur
CC No.1398/2018
IN THE COURT OF SH NISHAT BANGARH: MM, NI ACT-02, SOUTH-EAST
DISTRICT, SAKET COURTS COMPLEX: NEW DELHI
Raghunandan Gupta v. Darshan Kaur
CC No.1398/2018
U/s 138 Negotiable Instruments Act, 1881
1. CIS number : DLSE020037182018
2. Name of the Complainant : Sh. Raghunandan Gupta
3. Name of the Accused, : Smt. Darshan Kaur, W/o Sh. Singara
parentage & residential Singh, R/o TA-81/5 Tughlaqabad Extn.
address New Delhi-110019.
Sh. Preetpal Singh, S/o Sh. Singara Singh,
R/o TA-81/5 Tughlaqabad Extn. New
Delhi-110019.
4. Offence complained of or : U/s 138 of Negotiable Instruments Act,
proved 1881
5. Plea of the Accused : Pleaded not guilty and claimed trial
6. Final Judgment/order : CONVICTION
7. Date of judgment/order : 13.12.2023
JUDGMENT
1. The Complainant has filed the present complaint under Section 138 of Negotiable Instruments Act, 1881 ("NI Act") against the accused on the averments that accused no.1 and proposed accused no.2 approached the complainant for a loan of Rs.6,00,000/- in the month of July, 2016 for a period of six months as an interest Page No. 1 of 14 Raghunandan Gupta v. Darshan Kaur CC No.1398/2018 free friendly loan and complainant arranged an amount of Rs.6,00,000/- and handed over to the accused persons as a friendly loan.
2. As per the complainant, the accused in discharge of his part of liability, issued a cheque bearing No. 321447, dated 08.12.2017, drawn on the Bank of India, C.R. Park Branch, New Delhi-110019 for an amount of Rs. 4,00,000/- in favour of the complainant ("Cheque in question")
3. Upon presentment, the cheques in question were returned unpaid on the ground of funds insufficient vide return memos dated 12.12.2017.
4. The Complainant sent the legal demand notice dated 03.01.2018 through speed post at address of the Accused. Hence, despite the knowledge of the legal demand notice, the accused failed to make the payment within the stipulated period and the Complainant filed the present complaint.
5. After taking pre-summoning evidence, Accused no.1 was ordered to be summoned in this case for commission of offence under Section 138 of NI Act vide order dated 01.08.2018.
6. Accused appeared and was released on bail on 21.12.2018. On finding a prima facie case, notice U/s 251 of the Criminal Procedure Code, 1973 ("CrPC") was served upon the Accused on 20.12.2019 to which he pleaded not guilty and opted to contest after disclosing the following defence:
"I gave the cheque to Raghunandan Gupta. I took loan of Rs.4,00,000/- from the complainant Raghunandan Gupta on interest @ 4% per month. I had paid monthly installments of Rs.20,000/- to the complainant for a period of 3 - 3-1/2 years approximately. I gave blank signed cheque to the complainant after taking the loan. Son of Raghunandan threatens me. I had told the complainant not to present the cheque but he presented the same."Page No. 2 of 14
Raghunandan Gupta v. Darshan Kaur CC No.1398/2018
7. Vide order dated 05.05.2022 opportunity was granted to the Accused to cross examine the Complainant. The Complainant/CW1 adopted his pre-summoning evidence affidavit, Ex. CW1/1 and also proved following documents:
Ex. CW1/A: Original Cheque bearing No. 012313,
dated 16.11.2017, amounting to Rs.
4,00,000/-.
Ex.CW1/B: Original Cheque bearing No. 321447,
dated 08.12.2017, amounting to Rs.
4,00,000/-.
Ex. CW1/C: Original return memos dated 12.12.2017.
Ex. CW1/D: Copy of legal demand notice dated
04.01.2018.
Ex. CW1/E: Original postal receipts in respect of legal
demand notice.
Ex. Internet generated tracking report in
CW1/F(Colly): respect of legal demand notice.
8. Complainant Evidence was closed by way of separate statement of complainant on 19.01.2023.
9. Thereafter, Accused was examined under Section 313 of Cr.P.C on 19.01.2023 for explaining the circumstances appearing against him in the Complainant's evidence. He denied the Complainant's case and pleaded false implication in the present case and opted to lead evidence in his defence.
10.As part of defence evidence, the accused did not examine any witness and DE was closed by the vide statement of Ld. LAC for the Accused on 24.07.2023.
11. I have heard Ld. Counsel for the parties and have perused the case file carefully and meticulously.
Submissions of the Complainant and Accused Page No. 3 of 14 Raghunandan Gupta v. Darshan Kaur CC No.1398/2018
12. The Ld. Counsel for the Complainant has submitted that all ingredients of Section 138 NI Act are fulfilled in the present case and hence, the presumption under Section 139 NI Act arises in the favour of the Complainant, which has not been successfully rebutted by the Accused.
13. Per contra, Ld. Counsel for the Accused has submitted that the Accused deserves to be acquitted as the Cheque in question was not given in lieu of repayment of any loan. It was given as a security cheque in relation to a committee/chit fund, which accused used to run and the complainant was the participant. Hence, there is no liability of accused towards the complainant and as per the Ld. Counsel for the Accused, the Accused has rebutted the presumption by way of preponderance of probabilities.
Legal Framework Ingredients of Section 138 NI Act:
14.The Hon'ble Supreme Court of India in Kusum Ingots & Alloys Ltd and Ors v. K Pennar Peterson Securities Ltd and Ors., (2000) 2 SCC 745 ("Kusum Ingots Case"), has clearly stipulated that "the ingredients which are to be satisfied for making out a case under the provision are:
(i) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account for the discharge of any debt or other liability;
(ii) that cheque has been presented to the bank within a period of six months 1 from the date on which it is drawn or within the period of its validity whichever is earlier;
(iii) that cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the account is insufficient to honour the cheque or that it 1 Reduced to three months vide RBI circular dated 4.11.2011.Page No. 4 of 14
Raghunandan Gupta v. Darshan Kaur CC No.1398/2018 exceeds the amount arranged to be paid from that account by an agreement made with the bank;
(iv) 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 152 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(v) 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;
If the aforementioned ingredients are satisfied then the person who has drawn the cheque shall be deemed to have committed an offence."
15.Therefore, if the aforesaid ingredients are made out, the Accused is deemed to have committed an offence under Section 138 NI Act.
Presumption under Section 139 NI Act/Section 118 NI Act:
16.Section 139 NI Act states that:
"Presumption in favour of holder: It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability"
17.Section 139 NI Act is a type of reverse onus clause, which stipulates a presumption in the favour of the Complainant as to fact of a cheque being received in discharge of a legal debt or liability.
18.Further, Section 118(a) of the NI Act, states as follows:
2 The same is now enhanced to 30 days.Page No. 5 of 14
Raghunandan Gupta v. Darshan Kaur CC No.1398/2018 "Presumptions 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 instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;"
19.The Hon'ble Supreme Court of India has in a number of judgments dealt with the combined effect of the presumptions raised under Section 139 and Section 118(a) NI Act.
20.The following proposition can be summarized on a perusal of the judgments of the Hon'ble Supreme Court of India in Sunil Todi & Ors v. State of Gujarat, LL 2021 SC 706, Kalamani Tex v. P. Balasubramanian, 2021 SCC OnLine SC 75; APS Forex Services Pvt. Ltd. v. Shakti International Fashion Linkers and Ors., AIR 2020 SC 945; Rohitbhai Jivanlal Patel v. State of Gujarat and Ors., AIR 2019 SC 1876; Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513 ("Kumar Exports Case"); K.N. Beena v. Muniyappan and Anr., (2001) 8 SCC 458; and Dhanvantrai Balwantrai Desai v. State of Maharashtra, 1964 Cri. LJ 437:
(i) Once the execution of cheque is admitted; Section 139 of the NI Act mandates a presumption that the cheque was for the discharge of legally enforceable debt or liability;
(ii) The presumption under Section 139 is a rebuttable presumption and the onus is on the Accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities;
(iii) Something which is probable has to be brought on record by the Accused Page No. 6 of 14 Raghunandan Gupta v. Darshan Kaur CC No.1398/2018 for getting the burden of proof shifted to the Complainant. To disprove the presumptions, the Accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non-existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist;
(iv) The words "unless the contrary is proved" which occur in Section 139, make it clear that the presumption has to be rebutted by 'proof' and not by a bare explanation which is merely plausible. A fact is said to be proved when its existence is directly established or when upon the material before it the Court finds its existence to be so probable that a reasonable man would act on the supposition that it exists. Unless, therefore, the explanation is supported by proof, the presumption created by Section 139 NI Act cannot be said to be rebutted;
(v) To rebut the presumption, it is open for the Accused to rely on evidence led by him or Accused can also rely on the materials submitted by the Complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely;
(vi) That it is not necessary for the Accused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden.
Analysis
21. In the case at hand, it is not in dispute that the cheques in question Page No. 7 of 14 Raghunandan Gupta v. Darshan Kaur CC No.1398/2018 were drawn by the Accused from her bank account. Further, it is also not in dispute that the Accused is the signatory of the cheque in question as accused has herself stated in her defence u/s 251 Cr.P.C. that she gave the cheque to Raghunandan Gupta and the same was a blank signed cheque. Presentation of the cheque in question by the Complainant is also not in dispute, the dishonor of the cheques in question on grounds of funds insufficient is also not in dispute, having been admitted by the accused in statement U/s. 313 CrPC. The receipt of the legal demand notice is not admitted by the accused, however, she has admitted in her statement U/s. 313 Cr.P.C. that the address mentioned on legal demand notice is her correct address. In any event, it is seen that the address mentioned in the legal demand notice is the same address as mentioned by the accused in her bail bonds. Accordingly, a presumption of due service is drawn U/s. 27 of the General Clauses Act.
22. Thus, the legal demand notice Ex. CW1/D is held to have been duly served upon the Accused. Finally, the complaint has been filed within the limitation period. Therefore, essential ingredients (i) to (v) as stipulated by the Hon'ble SC in Kusum Ingots Case (supra), have been duly satisfied.
23. Further, as noted above, once the execution of the cheque by the Accused is proved/admitted, the presumption of the same being drawn for consideration stands attracted in terms of Section 139 NI Act. Now, in the case at hand, so far as the question of existence of basic ingredients for drawing of presumption U/s 118 (a) and 139 of the NI Act is concerned, from the aforesaid discussion, it is apparent that the Accused has not denied his signatures on the cheque in question that has been drawn in favour of the Complainant on a bank account maintained by the Accused; and hence, the said presumption can be drawn. Accordingly, it is required to be presumed Page No. 8 of 14 Raghunandan Gupta v. Darshan Kaur CC No.1398/2018 that the cheque in question was drawn for consideration and the holder of the cheque i.e., the Complainant received the same in discharge of an existing debt. The onus, therefore, shifts on the Accused to establish a probable defence so as to rebut such a presumption.
24. In the segment on legal framework, set out above, the legal proposition with respect to the burden of proof upon the Accused has already been discussed. Hence, it is now to be examined as to whether the Accused brought any material on record or pointed out glaring discrepancies in the material produced by the Complainant for dislodging the presumption which meets the standard of preponderance of probabilities.
25. The Accused in the present case, has taken the following line of defence with a view to rebut the presumption:
a) The cheque in question is a security cheque.
26. Ld. Counsel for the accused has argued that the cheque in question was not issued by accused in discharge of any liability, it was issued as a blank signed security cheque, as accused herself has stated in her defence u/s 251 Cr.P.C. that the cheque in question was a blank signed cheque after taking loan of Rs. 4 lacs at interest rate of 4% per month, further in her statement u/s 313 Cr.P.C. accused has stated that she used run a committee/chit fund, in which the complainant was a participant and the cheque in question was given as a security cheque for the said committee/chit fund. She has also stated that the complainant has threatened her with physical assault and verbal abused, in pursuant to these threats she has given the cheque in question to the complainant.
27. It is pertinent to note here that, it is established from the statement of Page No. 9 of 14 Raghunandan Gupta v. Darshan Kaur CC No.1398/2018 accused itself that the cheque in question was issued by the accused only. However, accused has not brought on record any evidence to prove that the cheque in question was a blank signed cheque and it was issued as a security. Further, no evidence is brought on record to prove that accused used to run a committee/chit fund, in which the complainant was a participant and the cheque in question was given as a security cheque for the said committee/chit fund pursuant to the threats of physical assault or verbal abuse.
28. It is a trite law that mere denial by the accused is not sufficient to prove that cheque in question was not issued for any liability, accused has to bring on record cogent evidence to rebut the presumption u/s 139 NI Act. However, in the present case, the accused has failed to bring on record any cogent evidence to prove that the cheque in question was issued as a security cheque by the accused.
29. Further, if for the sake of argument, it is to be believed that the cheque in question was issued by accused as blank signed security cheque, even then Hon'ble Supreme Court has held in Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197; that:
"It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted...
38. If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on Page No. 10 of 14 Raghunandan Gupta v. Darshan Kaur CC No.1398/2018 the Accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence...
40. Even a blank cheque leaf voluntarily signed and handed over by the Accused, which is towards some payment, would attract presumption Under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt."
Further, Hon'ble Supreme Court has held in Sripati Singh v. State of Jharkhand, 2021 SCC OnLine Sc 1002;, that:
" A cheque issued as security pursuant to a financial transaction cannot be considered as a worthless piece of paper under every circumstance. 'Security' in its true sense is the state of being safe and the security given for a loan is something given as a pledge of payment. It is given, deposited or pledged to make certain the fulfillment of an obligation to which the parties to the transaction are bound. If in a transaction, a loan is advanced and the borrower agrees to repay the amount in a specified timeframe and issues a cheque as security to secure such repayment; if the amount in a specified timeframe and issues a cheque as security to secure such repayment: if the loan amount is not repaid in any other form before the due date or if there is no other understanding or agreement between the parties to defer the payment of amount, the cheque which is issued as security would mature for presentation and the drawee of the cheque would be entitled to present the same. On such presentation, if the same is dishonored, the consequences Page No. 11 of 14 Raghunandan Gupta v. Darshan Kaur CC No.1398/2018 contemplated under Section 138 and the other provisions of N.I. Act would flow."
30. Hence, in view of such clear stipulation by the Hon'ble Supreme Court, it is immaterial that the cheque in question was given by the accused as blank signed security cheque it will still attract the liability u/s 138 N.I. Act. Hence, the defence taken by accused that the cheque in question was given as a blank signed security cheque is not sufficient to rebut the presumption u/s 139 N.I. Act.
b) There was no loan transaction between accused and the complainant.
31. Ld. Counsel for accused has argued that there was no loan transaction between the accused and the complainant. The cheque in question was issued by the accused as a blank signed cheque security cheque for the committee which accused used to run and in which, the complainant was the participant in that committee and there was no loan transaction between the accused and the complainant.
32. Accused has also stated in her statement u/s 313 CrPC, that she used to run a committee/chit fund, in which the complainant was a particpant. She gave the cheque in question as blank signed cheque as a security to the complainant for the said committee. The complainant threatened her with physical assault and verbal abuse as well and pursuant to these threats, she gave the cheque in question to the complainant. There is no liability towards the complainant. She has not taken any loan from the complainant.
33. However, accused has failed to bring on record any evidence in support of story of defence, no evidence has been furnished on record to prove that accused used to run a committee/chit fund, in which the Page No. 12 of 14 Raghunandan Gupta v. Darshan Kaur CC No.1398/2018 complainant was a participant. No evidence is furnished by accused to prove that accused was threatened by accused or of verbal abuse, pursuant to which the cheque in question is alleged to have been issued.
34. On the contrary, accused herself has stated in her defence in notice u/s 251 CrPC, that she had taken loan from the complainant of Rs. 4 lacs at interest of 4% per month and the cheque in question was given to the complainant by the accused as blank signed cheque after taking the said loan. Also, in her notice u/s 251 CrPC accused had taken a defence that she had paid installments of Rs. 20,000/- to the complainant for period of three to three and half years. Also, during cross-examination of the complainant, Ld. Counsel for the complainant has specifically asked following questions:
i) "I put to you that the loan of Rs. 4 Lakhs was given @4% monthly interest?"
ii) "I put to you that an amount of Rs. 20,000/- was paid to you monthly by the accused for 04-05 years?"
Complainant has answered both the question in negative, further no evidence at any stage of trial is brought on record by the accused to prove that the loan amount was of Rs. 4 lakhs only, given at the interest rate of 4% per month. Also, no evidence to prove the payment of installment of Rs. 20,000/- for three or five years is furnished by the accused.
35. In view of above discussion, the court is of the opinion that it is evident from the defence taken by the accused in her notice u/s 251 CrPC and the cross examination of complainant conducted by the Counsel for the Accused that there was a loan transaction between the accused and the complainant. Hence, the defence argued by the Ld. Counsel for the accused stands disproved.
Page No. 13 of 14Raghunandan Gupta v. Darshan Kaur CC No.1398/2018
36. Hence, accused has failed to rebut the presumption u/s 139 NI Act, as the defences taken by accused during the trial does not inspire the confidence of a prudent man from the stand point of preponderance of probabilities.
37. In these circumstances and in view of the above detailed discussion, this court is of the considered opinion that the Accused has failed to rebut the presumption under Section 139 of Negotiable Instruments Act, 1881 in favour of the Complainant and ingredients of Section 138 of Negotiable Instruments Act, 1881 are fully proved. Therefore, Accused is held guilty and convicted for commission of offence punishable under Section 138 of the Negotiable Instrument Act, 1881. Let he be heard on the quantum of sentence on 23.12.2023 at 12:00 noon.
Announced in Open Court.
(Nishat Bangarh) MM (NI-Act 02), South East Saket Court, New Delhi,13/12/2023 Note: This judgment contains 14 pages and each page has been signed by me.
(Nishat Bangarh) MM (NI-Act 02), South East Saket Court, New Delhi, 13/12/2023 Page No. 14 of 14