Delhi District Court
Complainant vs Premanand Singh (P.N. Singh) on 30 July, 2018
IN THE COURT OF MS. UPASANA SATIJA, MM03 (NI ACT)
SOUTHWEST DISTRICT: NEW DELHI
C.C. No.50041262016
CNR No.DLSW020114312016
Under Section 138 of Negotiable Instruments Act, 1881
In the matter of :
Deen Dayal Singh
S/o Sh Kailash Nath Singh,
R/o 253, Manocha Vihar, CGHS Ltd.
Plot No. 10B, Sector 9, Dwarka,
New Delhi.
.......Complainant
Versus
Premanand Singh (P.N. Singh)
S/o Shri Ram Sagar Singh,
R/o House No. 248,
Village Amberhai, Sector 19,
Dwarka, New Delhi.
.......Accused
Offence complained of / proved : Under Section 138
Negotiable Instruments Act,
1881.
Plea of the accused : Pleaded not guilty
Date of Institution : 15.09.2016
Final Order / Judgment : Convicted
Date of pronouncement : 30.07.2018
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J U D G M E N T:
1.The present complaint has been filed under Section 138 of the Negotiable Instruments Act, 1881. The facts in brief as averred in the complaint are that in first week of August, 2015 the accused approached the complainant for a friendly loan of Rs. 2,50,000/ and consequently the complainant advanced the said amount to the accused in cash which the accused promised to return within two weeks. Since it was a friendly loan, no receipt was executed. At the time of taking the loan, the accsued issued a post dated cheque bearing no. 744533 dated 24.08.2015 for sum of Rs.2,50,000/ drawn on ICICI Bank, Dwarka, New Delhi. Upon request of the accused that he was not having sufficient funds, the complainant did not present the said cheque and it became outdated. Thereafter, upon repeated requests of the complainant, accused finally issued two cheques bearing no. 045472 dated 03.06.2016 and 045482 dated 26.05.2016 for sum of Rs.1,00,000/ and Rs.1,50,000/ respectively both drawn on Allahabad Bank, Dwarka, New Delhi. However, upon presentation, the aforesaid cheques got dishonoured vide separate return memos both dated 21.07.2015 with reason and remarks 'Funds Insufficient'. The complainant allegedly then issued legal notice to the accused on 09.08.2016 demanding the payment of cheque amount and in spite of service of said notice, the accused failed to make the payment of cheque amount and hence, committed an offence under Section 138, Negotiable Instruments Act.
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2. The complainant filed his evidence by way of an affidavit and placed on record the following documents:
(i) Cheque bearing no. 744533 dated 24.08.2015 for sum of Rs.2,50,000/ drawn on ICICI Bank, Dwarka, New Delhi. (Ex.CW1/1).
(ii) Cheques bearing no. 045472 dated 03.06.2016 and 045482 dated 26.05.2016 for sum of Rs.1,00,000/ and Rs.1,50,000/ respectively both drawn on Allahabad Bank, Dwarka, New Delhi. (Ex.CW1/2 and Ex.CW1/3 respectively).
(iii) Cheque return memos dated 21.07.2016 issued by ICICI Bank reflecting that the aforesaid cheques were dishonoured for the reason "Fund Insufficient" (Ex.CW1/4 and Ex.CW1/5).
(iv) Legal Notice dated 05.08.2016 addressed to the accused on behalf of the complainant demanding the payment of cheque amount within fifteen days from the receipt of said notice (Ex.CW1/6).
(v) Postal receipt reflecting the fact that the aforesaid legal notice was dispatched to the accused on 09.08.2016 (Ex.CW1/7).
(vi) Internet Generated Postal Track Report reflecting that the letter dispatched vide postal receipt (Ex.CW1/7) was delivered on 11.08.2016 (CW1/8).
3. Upon consideration of the complaint and documents annexed therewith and upon examination of the complainant, the cognizance of offence under Section 138 Negotiable Instruments Act, 1881 was taken and process was issued against the 3 of 13 accused. Accused appeared before this court and was admitted to bail. Thereafter, the matter was referred to Mediation Centre however, since the parties failed to arrive at any settlement, the matter proceeded further on merits.
4. Notice under Section 251 Cr.P.C. was framed against the accused to which, he pleaded not guilty and claimed trial. The accused admitted having issued the cheques in question in favour of the complainant but stated that he had given the said cheques as security for some work to be done by the complainant which work was not done and the complainant also did not return the cheques in question. He denied the receipt of demand notice dated 21.09.2015.
5. Application under Section 145(2), Negotiable Instruments Act was filed by the accused seeking permission for recalling and cross examination of complainant witnesses. The said application was allowed and the complainant was cross examined.
6. During his crossexamination, complainant stated that he and accused are good friends and he knows the accused since 34 years and that he met the accused through common friend whose name he did not remember. He further stated to be doing business of exportimport of natural granite as well as scraps to Malaysia and West Africa. He further stated that there was no business deal between him and accused but they used to meet often. He further stated that normally he earns Rs.5 4 of 13 6,00,000/ annually. He denied remembering as to how much income tax he pays but stated that he has paid Rs.1.10 lacs as income tax in that year. He further stated that he advanced loan amount of Rs.2,50,000/ in cash to the accused in August, 2015. He denied that he promised to the accused to send him abroad. He stated that at the time of advancement of loan, the accused issued cheque drawn on ICICI Bank towards repayment of loan and after 20 days, accused requested him not to present this cheque as he was not maintaining sufficient balance in his account and during this period, three months passed and cheque became outdated. He denied making any police complaint to get the loan amount back. He stated that after approximately six months from issuance of the first cheque of Rs.2,50,000/ accused offered him two cheques for amount of Rs.1,00,000/ and Rs.1,50,000/. He denied remembering as to when the cheques were presented to the bank for encashment. He stated that when both cheques got dishonoured for the reason insufficient funds then he again demanded back his money from the accused but the accused did not pay the same.
7. The complainant did not lead any further evidence.
8. The accused was examined in accordance with provisions of Section 313 Cr.P.C. wherein he denied taking loan from the complainant and stated to have issued cheque Ex.CW1/1 as guarantee. He further stated that he did not request the complainant not to present the cheque Ex.CW1/1 rather the complainant did not 5 of 13 complete the work for which said cheque was given within the period of its validity and upon the request of the complainant; he issued cheques Ex.CW1/2 & Ex.CW1/3. He further stated that he issued the said cheques and also gave certain other documents to the complainant as the complainant assured him that he will arrange the necessary documents and will facilitate his going to Canada for business of catering. He further stated that the said work was not done by the complainant and the complainant did not return his cheques as well as other documents despite his demanding back the same. He admitted the receipt of legal demand notice dated 05.08.2016.
9. No evidence was led by the accused in his defence.
10. Final Arguments were heard. During the final arguments, it was submitted by Ld. Counsel for the Complainant that all the ingredients of the offence under Section 138 Negotiable Instruments Act are made out and accordingly the accused be convicted. He pointed towards the fact that although receipt of demand notice was denied by the accused at the stage of framing of notice but he admitted having received the same during his examination under Section 313 Cr.P.C. He argued that the defence taken by the accused is vague and no evidence was led by the accused to prove the same and accordingly, the presumption in favour of the complainant stands unrebutted. He further argued that complainant had been 6 of 13 consistent in his testimony and even no suggestions were given to challenge the testimony of the complainant. Ld. Counsel for the complainant also relied on certain judgments in support of his arguments.
11. On the other hand, Ld. Counsel for accused argued that the complainant failed to establish the guilt of the accused beyond reasonable doubts and accordingly, accused be acquitted. He pointed towards the fact that the complainant admitted that he met the accused through common friend and accordingly as such there was no friendly relation between them and hence advancement of friendly loan is highly improbable. He further pointed towards the fact that as admitted by the complainant there was not even any business relation between the parties and accordingly, why would complainant advance loan to the accused. He further submitted that cheque was given to send the accused abroad by providing visa as the complainant was doing business of sending people abroad.
Applicable Law and its application to present facts
12. To establish an offence under Section 138 of the Negotiable Instruments Act, the following ingredients are to be established by the complainant:
(i) Cheque must have been drawn by the accused on an account maintained by him with a banker.
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(ii) Cheque must have been drawn for payment of any amount of money to another person for discharge, in whole or in part, of any debt or other liability.
(iii) Said cheque is returned unpaid by bank for the reason that either 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.
(iv) The cheque must have been presented to the bank within a period of 6 months from the date on which it is drawn or within the period of its validity, whichever is earlier.
(v) The payee or holder in due course makes a demand for payment by giving notice in writing to the drawer of the cheque within 30 days of receipt of information by him from the bank regarding the return of cheque as unpaid.
(vi) Drawer of the cheque fails to make the payment of the said amount to the payee or holder in due course of cheque within 15 days of said notice.
Section 142, Negotiable Instruments Act further requires the complaint under Section 138 must be made in writing by payee or holder in due course of 8 of 13 cheque and such complaint must be made within one month from the date on which the cause of action arises i.e. within one month from the expiry of fifteen days time within which the accused is required to make the payment of cheque amount upon receipt of demand notice.
13. Now coming to the facts of the present case, it is not in dispute that the accused issued the cheques in question, that the cheques in question were returned unpaid for the reason "Funds Insufficient"; that the cheques were presented within the period of their validity; that upon information of dishonour of cheque, the complainant made a demand in writing for payment of cheque amount within a period of thirty days from the receipt of information of dishonour.
Accordingly, ingredients (i), (iii), (iv), and (v) of the offence under section 138 are well established and not in dispute.
14. However, the accused has averred that he did not owe any liability towards the complainant and that he did not receive the demand notice.
15. At this point, provisions of Section 118 read with Section 139 of the Negotiable Instruments Act become relevant which raises a presumption that the negotiable instrument was drawn for a consideration and that payee or holder in due 9 of 13 course of cheque received that the said cheque for discharge, in whole or in part, of any debt or other liability However, this is a rebuttable presumption. The burden of rebuttal lies on the accused. The standard of proof required is not as strict as is required to establish a criminal liability, and will be discharged on the basis of preponderance of probabilities.
16. Coming to the present case, averments have been made by the accused that he did not take any loan from the complainant and the cheques in question were issued as guarantee towards work to be done by the complainant, which work was never done and accordingly, accused owes no liability towards the complainant. During his examination in accordance with provisions of Section 313 Cr.P.C., accused stated that he issued the cheques in question and also gave certain other documents to the complainant as the complainant assured him that he will arrange the necessary documents and will facilitate his going to Canada for business of catering but the said work was not done by the complainant and the complainant did not return his cheques as well as other documents despite his demanding back the same. The burden of proving the said averments is on the accused however, no evidence was led by the accused to substantiate his averments. The accused never deposed before the court on oath nor even any suggestion was made during the crossexamination of the complainant that he is into business of arranging documents to send people abroad. 10 of 13 Further, the fact that cheques in question were issued against prior cheque Ex.CW1/1 cannot be overlooked. No explanation is furnished as to why impugned cheques were issued even after the complainant allegedly failed to complete the work as required by him to be done. Further, no steps were taken to stop the misuse of the cheques in question even after the complainant did not return them upon the accused's demand. Any prudent person is expected to at least request the bank to stop the payment of cheque in such circumstances.
In view of the above, the presumption raised by virtue of Section118 read with Section 139, Negotiable Instruments Act remains unrebutted.
17. Accordingly, ingredient (ii) of offence under Section 138, Negotiable Instruments Act is also established.
18. As regards the fact of receipt of legal notice, Section 27 of General Clauses Act, 1897 provides that Where any Central Act or Regulation made after the commencement of this Act authorizes or requires any document to be served by post, whether the expression "serve" or either of the expressions "give" or "send" or any other expression is used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing, prepaying and posting by registered post, a letter containing the document, and, unless the contrary is proved, 11 of 13 to have been effected at the time at which the letter would be delivered in the ordinary course of post.
Therefore, where the payee sends the demand notice by registered post with correct address of the drawer written on it, it would raise a presumption of service unless the drawer proves that it was not received by him in fact and that he was not responsible for such nonservice.
Burden of rebuttal again lies on the accused. The accused denied the receipt of legal demand notice at the stage of notice framing but admitted the receipt of same during his examination under Section 313 Cr.P.C. Further, he did not dispute the correctness of the address mentioned on the notice or postal receipt, rather the accused appeared before this court on being served at the same address.
In view of the above discussion, ingredient (v) of offence under Section 138 is also established.
19. Upon consideration of the facts of the case and evidence adduced, I am of the view that complainant has been able to establish the guilt of the accused beyond 12 of 13 reasonable doubts.
20. Accordingly, the accused is hereby convicted of offence under Section 138 of the Negotiable Instruments Act, 1881.
Digitally signedby UPASANA SATIJA
UPASANA Date:
SATIJA 2018.07.30
15:59:19
+0530
Announced in the open Court
on 30th day of July, 2018 (UPASANA SATIJA)
MM03 (NI Act)/SouthWest
Dwarka/ New Delhi
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