Delhi District Court
Cc No. 4934/2020 Sagar Kukreja vs . Sanjay Kumar Page No.1/17 on 18 January, 2022
IN THE COURT OF MS. SONIKA, M.M. 05, N.I. ACT, SOUTH
DISTRICT,SAKET, NEW DELHI
C.C. No. 4934/2020
PS : Saket
Sagar Kukreja
S/o Sh. Ishwar Kukreja ,
R/o K-19C, Saket, New Delhi.
Also at
D-5, 3rd Floor, Hauz Khas, Delhi-16
Also at
N-16 A, Saket, Delhi-17
...Complainant
Versus
Sanjay Kumar
S/o Late Sh. Shyam Babu
R/o 10/1, Dakshinpuri, New Delhi.
...Accused
Date of Institution : 29.09.2020
Digitally
SON signed by
SONIKA
Date:
Offence complained of
Date of final arguments
:
:
138 NI Act
07.01.2022
IKA 2022.01.18
13:55:03
+05'30'
Date of decision
Plea of guilt
:
:
18.01.2022
Not guilty.
Decision : Convicted
BRIEF FACTS AND REASONS FOR DECISION OF THE CASE
1. Vide this judgment, this Court shall dispose off the present complaint case instituted by the Complainant invoking the provisions of Section 138 of the Negotiable Instruments Act, 1881(as in after referred to as NI Act).
CC No. 4934/2020 Sagar Kukreja Vs. Sanjay Kumar Page no.1/17
2. The facts giving rise to the instant complaint case, as per the complainant, may be enumerated as hereafter: In the second week of January 2020, the accused had approached the complainant for financial help of Rs.9,00,000/- and assured to repay the same within 15 days. The complainant has handed over an amount of Rs.8,90,000/- in cash to the accused and has stated the accused to collect the remaining amount of Rs.10,000/- on next day. However, the accused did not come on next day to collect the remaining amount. As the loan amount was not repaid in 15 days, the complainant contacted the accused telephonically in the first week of February, 2020. However, the accused has sought one month time to repay the same. Thereafter, in the first week of March, 2020, in discharge of his liability, the accused handed over three post dated cheques bearing no. 166246, 166247 and 166248 for an amount of Rs.3,00,000/-, Rs.3,00,000/- and Rs.2,90,000/- dated 08.03.2020, 12.03.2020 and 17.03.2020 respectively, all drawn on Axis Bank Ltd., Pushp Vihar Branch, New Delhi-62 (hereinafter referred to cheques in question) in favour of the complainant. However, upon presentation the same were dishonoured due to reason 'drawer's signature differ' (cheques bearing no. 166246, 166247) and 'account blocked' (cheque bearing no. 166248) vide bank return memos dated 13.03.2020 (cheques bearing no. 166246, 166247) and 18.03.2020(cheque bearing no. 166248). Thereafter, on assurance the cheques in question were presented again on 02.05.2020, however, the same were dishonored vide bank returning memos dated 05.05.2020 with remarks "drawer's signature differ". Thereafter, the complainant has sent three separate legal demand notices dated 02.06.2020 to the accused. Despite which the accused failed to repay the amount. Thus, the Complainant was constrained to institute the present complaint case.
3. The Complainant tendered his pre-summoning evidence by way of affidavit which was exhibited as Ex.CW1/Y; and relied upon documents:
Cheques in question as Ex.CW1/A, Ex.CW-1/B and Ex.CW-1/C, Bank Returning Memo dated 13.03.2020 as Ex.CW1/D and Ex,CW-1/E, Bank returning memo dated 18.03.2020 as Ex.CW-1/F, bank returning memos dated SONIKA Digitally signed by SONIKA Date: 2022.01.18 13:55:35 +05'30' CC No. 4934/2020 Sagar Kukreja Vs. Sanjay Kumar Page no.2/17 05.05.2020 Ex.CW-1/G to Ex.CW-1/I, Legal demand notices dated 02.06.2020 as Ex.CW1/J to Ex.CW-1/L, Courier Receipts as Ex.CW1/M to Ex.CW-1/O, and Internet generated tracking report as Ex.CW-1/P to Ex.CW-
1/R and affidavit under Section 65-B Evidence Act as Ex.CW-1/S and the compliant as Ex.CW1/X.
4. Upon appreciation of pre-summoning evidence, accused was summoned for an offence punishable under Section 138 of NI Act and notice under Section 251, Code of Criminal Procedure, 1973 (herein after referred to as Cr.P.C.) was served upon accused on 09.11.2020 to which he pleaded not guilty and claimed trial. The accused took the defence that he did not take any loan from the complainant. He further stated that he had issued three cheques to the complainant as security for business transaction i.e. for purchasing medicines from the complainant.
5. Thereafter, the application of the accused under Section 145 (2) of NI Act was allowed vide order dated 21.01.2021 and the accused was granted the opportunity to cross examine the Complainant as well as his witnesses, if any.
6. On 12.02.2021, the statement of the accused under Section 294 Cr.PC was recorded wherein he has admitted his signatures on the cheques in question as well as the bank returning memos. However, he has denied the receipt of legal demand notice.
7. The Complainant examined two witnesses i.e. himself as CW-1 and official from DTDC as CW-2. In the post summoning evidence, the complainant (CW1) has adopted his pre- summoning evidence. He was cross examined at length by the Ld. Counsel for accused. During his cross- examination, the ITRs of the complainant pertaining to the Assessment year 2018-19 to 2020-21 were exhibited as Ex.CW-1/D1 to Ex.CW-1/D3 respectively. During the chief examination of CW-2, the certificate with respect to booking of the consignment was exhibited as Ex.CW-2/A and the authority letter in favour of CW2 was exhibited as Ex.CW-2/B (OSR). CE was closed SONIKA vide order dated 01.04.2021. Digitally signed by SONIKA Date: 2022.01.18 13:55:53 +05'30' CC No. 4934/2020 Sagar Kukreja Vs. Sanjay Kumar Page no.3/17
8. Accused was, thereafter, examined U/s 281 r/w Sec 313 Cr.P.C. on 08.09.2021, wherein entire incriminating evidence was put to him. At this stage, the accused took the defence that he had never approached the complainant for any kind of financial help and he had talked to the complainant in the month of November, 2019 for the first time. He stated that the cheques in question were handed over to the complainant in respect of Pharmaceuticals as the complainant is dealing with the same. He further stated that at the time of handing over the cheques to the complainant, he had specifically told the complainant, since the account was opened a long back, he did not remember the exact signature, thus, there can be minor differentiation in the signatures. He stated that the cheques were handed over for security purpose only. He further denied receiving any legal demand notice. He further stated that he was not having any kind of friendly relation with the complainant, even the residence of complainant was not known to him. Since, the accused chose to lead evidence in his defence, matter was adjourned for DE.
9. Accused examined himself as DW-1 as well as two other witnesses as DW-2 (tenant of the accused) and DW-3(official from IT department) and all were duly cross examined by the Ld. Counsel for Complainant. During the cross-examination of DW-1, he was confronted with the supporting affidavits filed by the accused with the reply to application under section 143A and with the application under section 145(2), which were exhibited as Ex.DW-1/A and Ex. DW-1/B. DW-2 has filed three agreements which were exhibited as Ex.DW-2/1 (OSR) to Ex.DW-2/3 (OSR). During the chief examination of DW-3, the authority letter of DW-3 was exhibited as Ex.DW-3/1 and ITR of the complainant for assessment years 2018-19 to 2020-21 were Ex.DW-3/2 to Ex.DW-3/4 respectively. DE was closed on 04.12.2021 and the matter was fixed for final arguments.
10. I have considered the rival submissions of the parties and perused the entire evidence led by the parties and the material available on record.
11. During the course of final arguments, Ld. Counsel for complainant argued that there exists legally enforceable liability in favour of the SONIKA Digitally signed by SONIKA Date: 2022.01.18 13:56:15 +05'30' CC No. 4934/2020 Sagar Kukreja Vs. Sanjay Kumar Page no.4/17 complainant on behalf of the accused. He further argued that the cheques in question (Ex.CW1/A, Ex.CW-1/B and Ex.CW-1/C) were issued to the complainant and the signatures has already been admitted by the accused. He further argued that upon presentation the cheques have been dishounred twice and the same has been proved by Ex.CW1/D to Ex.CW-1/I. However, the present complaint is filed on the basis of return memo dated 05.05.2020 Ex.CW-1/G to Ex.CW-1/I. Further, he argued that the demand notices Ex.CW1/J to Ex.CW-1/L were duly served upon the accused. He further argued that the complainant did not receive any payment after service of legal notice. Ld. Counsel for complainant submitted that all the ingredients of Section 138 NI Act are fulfilled and the accused should be convicted. Ld. Counsel for complainant has relied upon the following judgments:
(a) C.C.Alavi Haji vs. Palapetty Muhammed, 2007 (6) SCC 555
(b) Lekh Raj Sharma v. Yash Pal Gupta (CRL.L.P 567/2014) decided on 30.06.2015
(c) Deelip Apte vs. Nilesh P. Salgaonkar & Anr., 2006 (6) BomCR 653
(d) Mr. Krishna P. Morajkar vs. Mr. Joe Ferrao, 2013 CRIJ (NOC) 572 Bombay (Decided on 19.07.2013)
(e) Rohitbhai J Patel v. State of Gujarat Crl. Appeal 508/2019
(f) D.K. Chandel vs. M/S Wockhardt Ltd. Crl. Appeal No. 132/2020 decided on 20.01.2020
12. Per contra, ld. Counsel for accused argued that the version of the complainant regarding the advancement of friendly loan of Rs.8,90,000/- in cash is not supported by any document. He further argued that the complainant has not given any specific time and date of advancement of loan. He further argued that the alleged loan has not been shown by the complainant in the ITR, thus, it is an unaccounted transaction and the same cannot be relied upon. He further argued that the financial capacity of the complainant is also disputed.
SONIKA Digitally signed by SONIKA Date: 2022.01.18 13:56:32 +05'30' CC No. 4934/2020 Sagar Kukreja Vs. Sanjay Kumar Page no.5/17 He stated that the accused had handed over the cheques in question to the complainant for security purpose for the purchase of medicines. He further argued that the legal demand notice was never received by the accused. He prayed that the accused be acquitted of the offence. Ld. Counsel for accused has relied upon the following judgments:
(a) Kulvinder Singh vs. Kafeel Ahmad 2014 (2) JCC (NI) 100
(b) Rangappa vs. Sri Mohan (2010) 11 SCC 441
(c) Basalingappa vs. Mudibasappa (2019) 5 SCC 418
(d) K.S. Ranganatha Vs. Vittal Shetty, Crl.A. No. 1860 of 2011
(e) Sumeti Vij vs. M/S Paramount Tech Fab Industries Crl.A. No. 292 of 2021
13. In the backdrop of the foregoing factual score, this Court shall now proceed to examine the position of law governing the facts peculiar to the present case.
14. The following ingredients must be satisfied in order to bring home the guilt of a person accused for the commission of an offence punishable under Section 138 of NI Act, which has also been observed by the Hon'ble Supreme Court of India in the matter of Jugesh Sehgal Vs. Shamsher Singh Gogi, (2009) 14 SCC 683:
"9. It is manifest that to constitute an offence under Section 138 of the Act, the following ingredients are required to be fulfilled:
(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;
(ii) the cheque should have been issued for the discharge, in whole or in part, of any debt or other liability;Digitally signed by
SONIKA SONIKA
Date: 2022.01.18
13:56:51 +05'30'
CC No. 4934/2020 Sagar Kukreja Vs. Sanjay Kumar Page no.6/17
(iii) 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;
(iv) 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 exceeds the amount arranged to be paid from that account by an agreement made with the bank;
(v) 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, Digitally signed SONIKA by SONIKA within 15 days of the receipt of information by him from Date: 2022.01.18 the bank regarding the return of the cheque as unpaid; and 13:57:14 +05'30'
(vi) 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"
The abovementioned proposition of law was reiterated by the Hon'ble Supreme Court in the matter of Aparna A. Shah v M/s Sheth Developers P. Ltd & Anr. (2013)8 SCC 71.
15. It is a well settled principle of criminal jurisprudence that a criminal trial precedes on the presumption of innocence of the accused i.e. an accused is presumed to be innocent unless proved guilty. Thus, normally the initial burden is on the complainant/ prosecution to prove the guilt of the accused and the standard of proof for the same is beyond reasonable doubt. However, in offences under Section 138 NI Act, there is a reverse onus clause, which is contained in Sections 118 and 139 of the Act.
Section 118 of the N.I Act provides:
"Presumptions as to negotiable instruments: Until the contrary is CC No. 4934/2020 Sagar Kukreja Vs. Sanjay Kumar Page no.7/17 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;"
Section 139 of the N.I Act further provides as follows:
"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".
16. Once the foundational facts that the cheque in question bears the signatures of the accused and the same has been drawn on account maintained by him are established, a factual base is established to invoke the presumption of cheque having being issued in discharge of a legally recoverable debt and drawn for good consideration by virtue of Section 118(a) r/w Section 139 of NI Act. It is a mandatory presumption, though the accused is entitled to rebut the said presumption.
17. In case of Kumar Exports vs. Sharma Carpets,(2009) 2 SCC 513, the Hon'ble Supreme Court had held:-
"The accused under Section 138 NI Act has two options. He can either show that the consideration and debt did not exist or that under the particular circumstances of the case, the non existence of Digitally signed consideration and debt is so probable that a prudent man ought to SONIKA by SONIKA Date: 2022.01.18 suppose that no consideration and debt existed. To rebut the 13:57:38 +05'30' statutory presumption, an accused is not expected to prove his defence beyond reasonable doubt as it is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be CC No. 4934/2020 Sagar Kukreja Vs. Sanjay Kumar Page no.8/17 discharged by him. However, the court need not insist in every case that the accused should disprove the non existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which his probable has to be brought on record 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 there non existence was so probably that a prudent man under the circumstances of the case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the note in question, was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon the circumstantial evidence and if the circumstances so relied upon are so compelling, the burden may likewise shift again on the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arises under Section 118 and 139 of NI Act".
18. In the present case, the accused has admitted that the cheque in question bear his signatures, thus, it raises a mandatory presumption in favour of the complainant. Reference can be made to Judgment of Apex Court in Rangappa v. Mohan, AIR 2010 SC 1898, wherein it was held:
"Once the cheque relates to the account of the accused and he accepts and admits the signatures on the said cheque, then initial presumption as contemplated under Section 139 of the Negotiable Instruments Act has to be raised by the Court in favour of the SONIKA Digitally signed by SONIKA complainant." Date: 2022.01.18 13:58:01 +05'30' CC No. 4934/2020 Sagar Kukreja Vs. Sanjay Kumar Page no.9/17
19. It means that in the present case the onus is upon the accused to rebut the presumption raised under Sections 118(a) and 139 of the said Act and merely saying that the cheque in question was not given in discharge of any liability is not sufficient to rebut the presumption of law.
20. The accused has taken the defence that he has never received the legal demand notice. The accused has examined DW-2 namely Sh. Vishal Soni, his tenant to prove that the address on which the demand notice was sent was in possession of his tenant. DW2 has also produced two rent agreements i.e. Ex. DW-2/1 and DW-2/2 and a lease agreement dated 02.09.2021, Ex. DW-2/3. However, perusal of Ex. DW2/1 and Ex. DW2/2 shows that the same had been entered into with respect to the first floor of the building only and not for the entire building and the Ex. DW2/3 is dated 02.09.2021 i.e. after the date of the demand notices Ex.CW1/J to Ex.CW-1/L. Thus, no material evidence comes to the rescue of the accused from the deposition of said witness.
21. It is admitted fact that the address on which the demand notice was sent belongs to the accused. In fact, in the vakalatnama filed on behalf of the accused as well as in the supporting affidavits filed by the accused alongwith the reply of application under section 143A NI Act and with the application under section 145(2) NI Act i.e. Ex. DW1/A and Ex. DW1/B respectively, the address of the accused is same on which the demand notice is alleged to be served. It is pertinent to note that it is not the case of the accused that the legal demand notice was sent on an incorrect address, rather, the accused stated that such legal demand notice was never received by them. However, perusal of the tracking reports Ex.CW-1/P to Ex.CW-1/R shows that the demand notice was duly delivered. The complainant has examined the official from DTDC as CW2 who has also deposed on the same lines.
22. At this juncture, reliance is placed upon the judgment passed by Hon'ble Supreme Court in the case of C.C.Alavi Haji vs. Palapetty Muhammed, 2007 (6) SCC 555 wherein it has been held that:
"17. It is also to be borne in mind that the requirement of giving of SONIKA Digitally signed by SONIKA Date: 2022.01.18 13:58:24 +05'30' CC No. 4934/2020 Sagar Kukreja Vs. Sanjay Kumar Page no.10/17 notice is a clear departure from the rule of Criminal Law, where there is no stipulation of giving of a notice before filing a complaint. Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the Court along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the G.C. Act and Section 114 of the Evidence Act. In our view, any other interpretation of the proviso would defeat the very object of the legislation. As observed in Bhaskarans case (supra), if the giving of notice in the context of Clause (b) of the proviso was the same as the receipt of notice a trickster cheque drawer would get the premium to avoid receiving the notice by adopting different strategies and escape from legal consequences of Section 138 of the Act."
In light of the ratio decidendi of the above stated case, even assuming for the sake of the arguments that the said legal notice was not received by the accused, same will not come to the rescue of the accused, as far as offence u/s 138 NI Act is concerned, if the other ingredients are duly proved and fulfilled.
23. Ld. Counsel for accused has also challenged the financial capacity of the complainant. Ld. Counsel for accused argued that during his cross- examination, the complainant had admitted that individually, he was not having the financial capacity to advance a sum of Rs. 8,90,000/-. However, perusal of the cross-examination of the complainant shows that with regard to the source of the money, the complainant has specifically stated that when the accused SONIKA Digitally signed by SONIKA Date: 2022.01.18 13:58:48 +05'30' CC No. 4934/2020 Sagar Kukreja Vs. Sanjay Kumar Page no.11/17 urgently needed money, he had some money while the remaining amount of Rs. 7,00,000/- was arranged from his parents Ishwar Kukreja, mother Kiran Kukreja and brother Anuj Kukreja. Thus, the complainant has successfully disclosed the source of funds. Even the non-examination of his parents is not fatal to the case of the complainant. Here, reliance is placed upon the judgment passed by Hon'ble High Court of Delhi in Sanjay Arora v. Monika Singh (2017 SCC Online Del 8897), wherein, it was held as follows:
"para 24. mere admission of the complainant that he was earning only Rs.12,000/- per month from small business or his failure to file income tax returns, or his omission to produce the bank pass book or to examine Chhotu as a witness in corroboration, are inconsequential. In order to rebut the statutory presumption, it was the burden of the respondent to prove the facts she had pleaded in answer to the notice under Section 251 Cr.P.C.".
In view of the same, the argument of the ld. Counsel for accused does not hold merits.
24. It was argued by Counsel for the accused that the alleged loan is advance in cash and the same was not mentioned in the ITR, thus, all these facts create doubt on his case. It has also been argued by Ld. counsel for the accused that the complainant has violated the provision of Section 269 SS of the IT Act of the Income Tax Act wherein no person can accept any loan or deposit Rs. 20,000/- or more other than by way of account payee cheque or draft. He further argued that the provisions of section 138 NI Act cannot be resorted to for recovery of an unaccounted transaction. In support of his contentions, Ld. Counsel for accused has relied upon the judgments passed by the Hon'ble High court of Bombay in Sanjay Mishra vs Ms.Kanishka Kapoor @ Nikki, 2009 Crl.L.J. 3777 and by the Hon'ble High court of Delhi in Leena Kataria vs State & Anr, Crl. A: 131/2018.
25. However, case of the complainant u/s 138 NI Act is not affected by a violation of the said provision and the accused cannot be acquitted on this ground. The provision of 269 SS of the IT Act states that no person can accept SONIKA Digitally signed by SONIKA Date: 2022.01.18 13:59:14 +05'30' CC No. 4934/2020 Sagar Kukreja Vs. Sanjay Kumar Page no.12/17 any loan or deposit of the nature specified in Section 269 SS of the I.T Act. It does not state that a person would be prevented from recovering the advance already made. Thus, the contention of the accused is meritless as violation of Section 269 SS of IT Act only attracts penal consequences under the Income Tax Act and not barring of the present complaint case.
Reliance can be placed on the judgment of the Hon'ble High Court of Delhi in the case titled as Dilip Chawla v. Ravinder Kumar and Ors., 2017(3) DCR 358 wherein it has been held as follows:
"23. The advancement of loan in cash may entail negative consequences for a party especially an Income Tax assessee as his having acted in breach of Section 269SS of Income Tax Act, 1961. Chapter XXB provides for the requirement as to the mode of acceptance, payment or repayment in certain cases to counteract evasion of tax. Section 269SS mandates that no person, after the cut off date shall take or accept from any other person any loan or deposit otherwise than by an account payee cheque or an account payee bank draft if the amount is more than Rs.10,000/. Breach of Section 269SS of the Income Tax Act provides penalty to Digitally signed SONIKA by SONIKA Date: 2022.01.18 which a person would be subjected to under Section 271D. 13:59:42 +05'30'
24. However, Section 271D does not provide that such transaction would be null and void. The payer of money in cash, in violation of Section 269SS of the Income Tax Act can always have the money recovered."
Thus, advancement of loan of Rs. 20,000/- or more in cash may give rise to consequences under Income Tax Act, 1961; but does not make the transaction illegal/void.
26. Moreover, failure to disclose the loan transaction in ITR is not fatal to the case of the complainant. For this, reliance is placed on the judgment of the Hon'ble High Court of Delhi in the case of Lekh Raj Sharma v. Yash Pal Gupta (CRL.L.P 567/2014) decided on 30.06.2015, wherein it was held:
CC No. 4934/2020 Sagar Kukreja Vs. Sanjay Kumar Page no.13/17 "21. The finding that, as the amount of loan disbursed to the respondent was not shown in the balance sheet and ITR, the appellant could not be said to have proved its case beyond reasonable doubt, is also erroneous. In this regard, reference may be placed on the decisions of the Bombay High Court in:
i) Deelip Apte vs. Nilesh P. Salgaonkar & Anr., 2006 (6) BomCR 653, wherein the Court observed:
"The learned J.M.F.C. has also held against the complainant the fact that the complainant had not shown the amount advanced by him in his income tax returns. I do not think that every person who gives friendly loans does in all cases show such loans in their income tax returns more so if they are payable on demand after short time. The learned acquitting J.M.F.C. entirely lost sight of the several presumptions which the law has enacted in favour of the complainant."(Emphasis Supplied)
ii) Mr. Krishna P. Morajkar vs. Mr. Joe Ferrao, 2013 CRIJ (NOC) 572 Bombay (Decided on 19.07.2013), wherein the Court observed:
"The underlined observations do not disclose as to where can one find a prohibition on recovering amounts not disclosed in income tax returns. With utmost humility, I have to state that I have not come across any provision of Income Tax Act, which makes an amount not shown in the income tax returns unrecoverable. The entire scheme of the Income Tax Act is for ensuring that all amounts are accounted for. If some amounts are not accounted for, the person would be visited with the penalty or at times even prosecution under the Income Tax Act, but it does not mean that the borrower can refuse to pay the amount which he has borrowed simply, because there is some infraction of the provisions of the Digitally signed Income Tax Act. Infraction of provisions of Income Tax Act would SONIKA by SONIKA Date: 2022.01.18 14:00:05 +05'30' CC No. 4934/2020 Sagar Kukreja Vs. Sanjay Kumar Page no.14/17 be a matter between the revenue and the defaulter and advantage thereof cannot be taken by the borrower. In my humble view, to say that an amount not disclosed in the income tax returns becomes irrecoverable would itself defeat the provisions of Section 138 of the Negotiable Instruments Act. Apart from the purpose of this Act, which has been outlined by the learned Single Judge in Shri Deelip Apte (supra) as well as in Sanjay Mishra (supra), it ought to be seen that the moment a person seeks to recover through a cheque an amount advanced in cash it gets amounted for in the system and the revenue authorities can keep a track of that and if necessary tax the person. To brand an amount which is not shown in Income Tax Act as unaccounted money would be too farfetched and, therefore, I am in respectful disagreement with the observations in Sanjay Mishra (supra), which in fact amounts to reading an additional requirement in Section 138 of the Negotiable Instruments Act, and legislating that such amounts becomes irrecoverable. At the cost of repetition, for saying that an amount not disclosed in income tax returns cannot be legally recoverable liability, some provisions of law to that effect would have to be shown. Such provision was not noticed by me and even the learned Counsel for the respondent could not show any such provision to me."(Emphasis Supplied)
22. Similarly, in the present case, the loan given by the petitioner was a friendly loan for the business of the accused-respondent, in the background that they had known each other for about 40 years. It was payable in a short period of time. Thus, I do not find any merit in the submission of the respondent that since the name of the accused-respondent has not been shown in the balance sheet, or the amount had not been disclosed in the ITR, it stands established that the loan was not disbursed by the appellant."
SONIKA Digitally signed by SONIKA Date: 2022.01.18 14:00:30 +05'30' CC No. 4934/2020 Sagar Kukreja Vs. Sanjay Kumar Page no.15/17
27. In support of his contentions, Ld. Counsel for accused has placed reliance upon two aforementioned judgments. However, the judgment passed by the Hon'ble High court of Bombay in Sanjay Mishra (Supra) is not applicable to the facts of the present case, as in that case, the complainant had himself admitted that the said amount was an unaccounted amount; but, the same is not the situation of the present case where the complainant has successfully disclosed the source of funds. Further, the judgment passed by the Hon'ble High court of Delhi in Leena Kataria (Supra) does not pertain to the question of unaccounted amount.
In view of totality of the facts and circumstances of the present case and in view of the judgements of the Hon'ble Court of Delhi in the above stated case, the court does not find merit in the said submission of Ld. Counsel for the accused.
28. The accused has taken the defence that the cheques in question were handed over to the complainant as security for business transaction i.e. for purchase of medicines from the complainant. In his deposition, the accused stated that the orders for which the purported transaction was entered into with the complainant were cancelled and the complainant was duly informed about the same. However, in support of the same, the accused has not placed on record any document nor he has examined any other witness. During his cross- examination, the accused stated that the invoices were generated in a Samsung tab, which was given by the complainant and the same could not be produced as the same was returned to the complainant. In the absence of cogent evidence, the bare statement of the accused that the cheques in question were given as security for purchase of medicines cannot be accepted as gospel truth. It is further noteworthy that the cheques in question were presented twice for encashment and the reason for dishonour of cheques is 'Drawer Signature differs' and the accused has not even bothered to give instructions to his bank to stop payment qua the cheques in question and no explanation has been given by him for the same, despite the alleged misuse of the cheques in question. Any reasonable person would rush to give instructions of stop payment as soon as SONIKA Digitally signed by SONIKA Date: 2022.01.18 14:01:01 +05'30' CC No. 4934/2020 Sagar Kukreja Vs. Sanjay Kumar Page no.16/17 they discover that the cheque he has issued might be misused and not doing so raises a suspicion over the case of the accused. Moreover, no police complaint was lodged by the accused against the complainant regarding misuse of the cheque in question. It is noteworthy that the accused has never demanded back the cheques from the complainant. This again raises a suspicion over the claim of the accused that the cheques in question were misused; as any prudent person would immediately atleast give a notice in writing to a person who has been withholding something as valuable as blank signed cheques. In the totality of facts and circumstances of the present case, non-issuance of stop payment instruction to the bank, non-demand of cheque or non-filing of a complaint regarding misuse of the cheques in question raises a serious doubt about the veracity of defence taken by the accused.
29. In considered opinion of the court, the present complaint has disclosed the existence of a legally enforceable debt or liability. Moreover, the complainant has successfully proved all the necessary ingredients of Section 138 of NI Act. On the other hand, the accused has failed to rebut the presumption in favour of complainant either on the basis of the material available on record or by adducing any cogent defence evidence except bare averments, which were not at all substantiated by any material on record.
30. In view of the evidence adduced, documents put forth and arguments advanced by the parties and further in view of the above discussion, the court is of the considered opinion that the accused Sanjay Kumar is guilty of offence under Section 138 of Negotiable Instruments Act, 1881 and accordingly, he is hereby convicted under Section 138 of Negotiable Instruments Act, 1881.
31. Let the convict be heard on quantum of sentence.
32. Copy of this order be given dasti to the convict free of cost as per rules.
Digitally signed by
ANNOUNCED IN THE OPEN
COURT ON 18.01.2022
SONIKA SONIKA
(SONIKA)
Date: 2022.01.18
MM-05/NI ACT/SOUTH/SAKET
14:01:29 +05'30'
NEW DELHI
CC No. 4934/2020 Sagar Kukreja Vs. Sanjay Kumar Page no.17/17