Delhi District Court
It Has Been Held In M/S Kumar Exports vs . M/S Sharma Carpets, 2009 on 9 July, 2020
IN THE COURT OF MS. TARUNPREET KAUR, MM-03 (NI ACT)
SOUTH -WEST DISTRICT: NEW DELHI
C.C No. 25753-2016
CNR No. DLSW020274632018
Under Section 138 of Negotiable Instruments Act, 1881
In the matter of :-
Abhishek Katyal
S/o Sh. Gulshan Katyal
R/o B-241, Mohan Garden Extension,
Uttam Nagar, New Delhi-110059.
.
......Complainant
versus
Vijay Kumar Sharma,
S/o Late Sh. Des Raj Sharma,
R/o B-109, Upper Ground Floor,
Rama Park, Uttam Nagar,
New Delhi-110059. .......Accused
Offence complained of / proved : Under Section 138
Negotiable Instruments Act,
1881.
Plea of the accused : Pleaded not guilty
Date of Institution : 07.06.2014
Final Order / Judgment : Acquitted
Date of pronouncement : 09.07.2020
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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 the complainant is a builder and in August 2012, the accused and the complainant entered into a collaboration agreement for construction of the house of the accused. As per the terms of the aforementioned agreement, the complainant was to construct four floors and he was to get the ownership of the first floor along with a sum of Rs.14,00,000/-. However, the accused paid only an amount of Rs. 9,00,000/- to the complainant in instalments and he assured the complainant that the payment of the remaining amount of Rs. 5,00,000/- would be made in due course.
Further, in January, 2014 the accused requested the complainant for a sum of Rs. 3,00,000/- stating his dire need for the said amount, and he assured the complainant that he would make payment of the previous balance amount of Rs. 5,00,000/- and the loan amount of Rs. 3,00,000/- after selling his floor. The complainant, accordingly, transferred an amount of Rs. 3,00,000/- in the account of the accused on 22.01.2014 through RTGS. On being approached by the complainant for payment of the entire outstanding amount, the accused gave a cheque bearing no. 220266 dated 16.04.2014 for a sum of Rs. 3 lakhs drawn on UCO Bank, Om Vihar Branch, Uttam Nagar, New Delhi issued in favour of the complainant in order to discharge his liability.
2 of 17 When the complainant presented the aforesaid cheque for encashment, it was dishonoured vide return memo dated 30.04.2014 for reasons 'Funds Insufficient'. The complainant allegedly then served legal notice dated 01.05.2014 on the accused demanding the cheque amount. Inspite of service of said notice, the accused failed to make the payment of cheque amount and hence, the present complaint was filed against him under section 138 Negotiable Instrument Act, 1881.
2. In the pre-summoning evidence, evidence by way of affidavit Ex.CW1/A was filed on behalf of the complainant. The complainant reiterated all the averments made in his complaint and in support of the allegations made in his complaint, he relied upon the following documents:
(i) Cheque bearing no. 220266 dated 16.04.2014 for a sum of Rs. 3 lakhs drawn on UCO Bank, Om Vihar Branch, Uttam Nagar, New Delhi in favour of the complainant (Ex.CW1/1).
(ii) Cheque return memo dated 30.04.2014 issued by Syndicate Bank, Mohan Garden, New Delhi reflecting that the aforesaid cheque was dishonoured for the reason 'Funds Insufficient' (Ex.CW1/2).
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(iii) Legal Notice dated 01.05.2014 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.CW1/3).
(iv) Postal and courier receipts reflecting the fact that the aforesaid legal notice was dispatched to the accused on 01.05.2014 (Ex.CW1/4 & Ex.CW1/5).
(v) The collaboration agreement dated 30.06.2012 (Ex.CW1/X).
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 accused. The accused appeared before the court and was admitted to bail.
4. Notice under Section 251 Cr.PC was framed against the accused to which he did not plead guilty and claimed trial. The accused stated that he is a patient of schizophrenia and that the complainant, taking an advantage of his ailing condition, got the cheque issued although he does not owe any liability towards the complainant. The accused admitted his signature on the cheque in question, however, he stated that the 4 of 17 particulars in the same were not filled in by him. He further stated that he had received the legal notice and that he had replied to the same.
5. Thereafter, on prayer made under Section 145(2), Negotiable Instruments Act on behalf of the accused, the permission was granted to the accused for recalling and cross examination of complainant witnesses. Accordingly, the complainant was cross examined.
6. The complainant got himself examined as CW1 in pre as well as post summoning evidence. He was duly cross examined by the Ld. counsel for the accused and he brought on record the collaboration agreement dated 30.06.2012 (Ex.CW1/X). Thereafter, the complainant did not lead further evidence and accordingly, the CE was closed.
7. The accused was then examined in accordance with provisions of Section 313 Cr.PC wherein he reiterated the stand taken by him in the notice framed under section 251 Cr.PC. He stated that he is a patient of schizophrenia and that he had to make a payment of balance amount of Rs. 2,00,000/- to the complainant. He further 5 of 17 stated that he intended to pay Rs. 2,00,000/- only to the complainant and for this purpose he had given a cheque to the complainant, and he had not filled in the amount in the said cheque. He further stated that the cheque in question does bear his signature, however, he does not know as to how the complainant came to have the possession of his cheque for Rs. 3,00,000/-, i.e. the cheque in question. He further stated that the cheque in question has been misused by the complainant and that the same got dishonoured as he does not owe any liability towards the complainant. He further stated that the complainant has filed a false case against him. He further stated that he had received the legal notice and that he had also replied to the same.
8. The accused opted to lead defence evidence wherein, he got himself examined and cross examined as DW1. Thereafter, he examined his wife as DW2, who brought on record certain documents in order to substantiate the defence in the present matter. DW2 furnished the acknowledgment receipt (Ex.DW2/P2), Bank statement of UCO Bank (Ex.DW2/P4), Medical reports of the accused (Ex.DW2/P5, DW2/P6, DW2/P7, DW2/P8), Bank statement of Syndicate Bank and UCO Bank (Ex.DW2/P9 & DW2/P10 respectively).
No further evidence was led on behalf of the defence and accordingly, DE was closed.
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9. Final arguments were heard. 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 further argued that the accused admitted the receipt of Rs. 3,00,000/- through RTGS. He further argued that no complaint was ever made by the accused regarding the alleged breach of collaboration agreement or the misuse of cheque in question. He further argued that the accused is himself operating his bank account till date. He further argued that no document has been produced by the accused showing that his mental condition was not sound during the relevant time. He further argued that the cheque return memo clearly shows that the cheque in question was dishonoured for reasons 'Funds Insufficient' and not for 'Payment stopped'. He further argued as to why the accused did not give an instruction to his bank to stop payment of the cheque in question. He further argued that the complainant was not supposed to make any payment to the accused.
10. On the other hand, arguments in writing were filed on behalf of the accused wherein, the Ld. counsel for the accused argued that the complainant has failed to establish guilt of the accused beyond reasonable doubt and accordingly, the accused be acquitted. He further argued that the collaboration agreement has not been disputed by the accused. He further argued that the complainant has not been clear as to what 7 of 17 amount the accused owes him. He further argued that the complainant admitted in his cross examination the receipt of payments made by the accused. He further argued that the complainant admitted his signature at point 'D', 'E' & 'X' of Ex. CW1/DX. He further argued that even if any liability is to be assumed on part of the accused, the same could not be exceeding Rs. 2.5 lakhs, which is less than the amount of the cheque in question. He further argued that the complainant admitted in his cross examination that Mr. Rupesh Kumar is his partner. He further argued that there was a penalty clause in the collaboration agreement as per which the complainant was to pay penalty for handing over unfurnished floor, and the complainant admitted in his cross examination dated 27.03.2017 that the floors were handed over to the accused in unfurnished condition.
11. In order 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.
(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.
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(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 six 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.
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12. Section 142, Negotiable Instruments Act further requires that the complaint under Section 138 must be made in writing by payee or holder in due course of 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. The accused nowhere disputed his signature on the cheque in question and his defence has been that he had not filled in particulars in the same. At this stage, Section 20 of the Negotiable Instruments Act, 1881 becomes relevant which states that-
Where one person signs and delivers to another a paper stamped in accordance with the law relating to negotiable instruments then in force in India, and either wholly blank or having written thereon an incomplete negotiable instrument, he thereby gives prima facie authority to the holder thereof to make or complete, as the case may be, upon it a negotiable instrument, for any amount specified therein and not exceeding the amount covered by the stamp. The person so signing shall be liable upon such instrument, in the capacity in which he signed the same, to any holder in due course for such amount; provided that no person other than a holder in due course shall recover from the person delivering the instrument anything in excess of the amount intended by him to be paid thereunder.
Accordingly, if the signature on the cheque have been admitted, it is immaterial as to who filled in the other particulars. The cheque which has been signed 10 of 17 by the account holder but remaining particulars of which are filled in by some other person is a valid cheque.
It is further not in dispute that the said cheque was returned unpaid for the reason "Funds Insufficient"; that the cheque was presented within the period of its 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, the receipt of legal notice was accepted by the accused and he failed to make the payment of the cheque-amount within 15 days of the said receipt.
Accordingly, ingredients (i), (iii), (iv), (v) and (vi) of the offence under section 138, Negotiable Instruments Act are well established and are not in dispute.
14. The accused has averred that he does not owe liability for the cheque amount towards the complainant as he had not taken the alleged loan of Rs. 3,00,000/- from him. Since the accused has admitted that the cheque in question bears his signature, provisions of Section 118 read with Section 139 of the Negotiable Instruments Act become relevant at this point, which raise a presumption that the negotiable instrument was drawn for a consideration and that payee or holder in due 11 of 17 course of cheque received the said cheque for discharge, in whole or in part, of any debt or other liability.
15. This, however, 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 would get discharged on the basis of preponderance of probabilities. The rebuttal does not have to be conclusively established, rather such evidence in support of the defence needs to be adduced before the court that the court either believes the defence to exist or considers its existence to be reasonably probable.
It has been held in M/S Kumar Exports Vs. M/S Sharma Carpets, 2009 A.I.R. (SC) 1518 that the accused may rebut these presumptions by leading direct evidence and in some clear and exceptional cases, from the case set out by the complainant, that is, from the averments made in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial. Further, the burden may be discharged by the accused by showing preponderance of probabilities and the onus on the accused is not as heavy as it is on the complainant to prove his case.
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16. The accused has taken the defence that he had not taken the alleged loan from the complainant, and that he does not owe the complainant the amount as alleged in the present complaint. His further defence has been that the cheque in question has been misused by the complainant and that the complainant himself filled in the particulars in the cheque in question.
The burden to prove these averments and to rebut the presumption raised against the accused under the relevant provisions of the Negotiable Instruments Act is upon the accused, and as discussed above, he is not even required to step into the witness box himself and the same could be done if the accused is successful in showing that the case of the complainant does not stand on its own legs or if he is able to bring forth the infirmities or contradictions in the version as stated by the complainant and thereby create a fairly plausible hypothesis.
16.1. In order to rebut the presumption the accused cross examined the complainant. A bare perusal of the averments made in the complaint and the cross examination of the complainant reveals that the complainant has not been clear at any point as to what total amount the accused owed him, and on top of that, he ended up making several contradictory statements regarding the same. 13 of 17 16.2. As per the case stated in the complaint, the accused was to make payment of Rs. 14,00,000/- in accordance with the terms of the collaboration agreement (Ex.CW1/X) and to make repayment of the alleged loan amount of Rs. 3,00,000/-. It has further been stated in the complaint that, out of the collaboration agreement amount of Rs. 14,00,000/- the complainant received an amount of Rs. 9,00,000/- from the accused. This implies that the accused was to make payment of the balance collaboration agreement amount of Rs. 5,00,000/- and the repayment of the alleged loan amount of Rs. 3,00,000/-.
In his cross examination dated 27.03.2017, the complainant stated that he had received a sum of Rs. 9 lacs from the accused till date. However, in the cross examination of the very same date, the complainant admitted that "I had already received a sum of Rs. 12 lacs before filing of the present case against the accused." He further stated that "It is also correct that in para 2 of my affidavit Ex. CW1/A I have given a wrong figure of Rs. 9 lacs instead of Rs. 12 lacs. It is correct that I have wrongly mentioned a balance amount of Rs 5 lacs in my affidavit Ex. CW1/A." Apart from this, the complainant also admitted in the aforementioned cross examination that "on 27.04.2013 there was a balance of Rs. 2.50 lacs."
In view of the above discussion, there does not remain any doubt that the complainant has not been clear about the actual liability of the accused towards him, and also that he misrepresented and distorted the facts before the court. 14 of 17 16.3. Further, if the complainant had already received an amount of Rs.12 lacs out of the total collaboration amount of Rs. 14 lacs, then the rest of the liability of the accused comes to Rs. 2,00,000/-, while he stated in his cross examination dated 27.03.2017 that the balance amount with respect to the collaboration agreement was Rs.2.50 lacs. Here, a question arises as to which statement of the complainant is to be taken as correct? Sans reservations, this state of affairs goes on to cast strong and significant doubt upon the case tried to put forth by the complainant- that he had advanced the alleged loan of Rs.3,00,000/- to the accused and that the same has not been repaid by the accused.
16.4. Ex. D2/P2 reflects that a payment of Rs. 2,00,000/- was received from the accused by Mr. Rupesh Kumar through a cheque favouring the complainant on 16.04.2014. Mr. Rupesh Kumar is admittedly the partner of the complainant. When a question was put to the complainant regarding the same in his cross examination dated 27.03.2017, he replied that "I cannot tell as to whether my partner Rupesh Kumar had withdrawn a sum of Rs. 2 lacs on my behalf through a bearer cheque in my favour issued by the accused..." Apart from making this evasive statement the complainant did not care to furnish any explanation as to payment received from the accused vide a cheque which was issued in his favour. Also, the complainant did not mention about the said cheque (or payment) in his complaint, legal 15 of 17 notice or evidence filed by way of affidavit. Furthermore, it is also to be noted that the cheque in question is also dated 16.04.2014.
17. As discussed above, for rebuttal of presumption under Section 139 Negotiable Instruments Act, it is not essential for the accused to lead direct evidence and the same could be done on the basis of material already brought on record, i.e. through the contents of the evidence filed by way of affidavit on behalf of the complainant, the legal/demand notice and most importantly, the cross examination of the complainant.
18. Considering the material loopholes in the case of the complainant, as discussed above, this court is of the considered opinion that the accused has been able to sufficiently rebut the presumption raised in favour of the complainant under Section 118 read with Section 139 of the Negotiable Instruments Act by creating a reasonable doubt as to the case of the complainant.
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19. It has been discussed already that the standard of proof so as to establish defence on part of the accused is 'preponderance of probabilities'. A careful analysis of the evidence in the present matter and the above discussion suggest that the accused has indeed come up with a highly probable defence, and it could safely be said that there is sufficient material on record to displace the presumptions raised against him under the Act.
20. Accordingly, the accused Vijay Kumar Sharma is hereby acquitted of offence under Section 138 of the Negotiable Instruments Act, 1881. Announced through video conferencing using Cisco WebEx On 9th day of July, 2020 Digitally TARUN signed by TARUNPREET PREET KAUR Date:
KAUR 2020.07.09
16:39:00
+05'30'
(Tarunpreet Kaur)
MM-03 (NI Act)/South-West
Dwarka/ New Delhi
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