Delhi District Court
Ramesh Singh vs . Ram Gopal Gupta on 22 September, 2014
Ramesh Singh Vs. Ram Gopal Gupta
CA NO: 48/13
IN THE COURT OF VIKAS DHULL, ADDITIONAL SESSIONS
JUDGE-01, DWARKA COURTS, NEW DELHI.
CA NO: 48/2013
Ramesh Singh
S/o Sh.Parsuram Singh
R/o Plot No.19, H.No.B-46
Singh General Store
Vikas Vihar, Vikas Nagar
Uttam Nagar
New Delhi-110059. ... Appellant
Versus
Ram Gopal Gupta
S/o Sh.Darbari Lal Gupta
R/o B-27, Vikas Vihar
Vikas Nagar, Uttam Nagar
New Delhi-110059. ... Respondent
Date of institution of appeal : 27.04.2013
Date on which judgment reserved : 08.09.2014
Date on which judgment pronounced : 22.09.2014
JUDGMENT
1. Vide the present appeal, appellant has challenged the judgment dated 28.03.2013 (hereinafter referred to as impugned judgment) of the Ld.trial court vide which he was convicted for the offence u/s 138 of the Negotiable Instruments CA NO: 48/13 1/16 Ramesh Singh Vs. Ram Gopal Gupta CA NO: 48/13 Act, 1881 (hereinafter referred to as NI Act) and the sentence order dated 06.04.2013 (hereinafter referred to as impugned sentence order) vide which appellant was sentenced to simple imprisonment for 6 months alongwith fine of Rs.4,00,000/- i.e.cheques amount which shall be payable to complainant as compensation within a month and in default of payment of fine, convict shall further undergo simple imprisonment for six months. Further, it is ordered that compensation amount if not paid in time, shall be recovered as fine as per provision of Section 421 Cr.P.C.
2. The brief facts which are relevant for deciding the present appeal are that in the month of March, 2009, the complainant/respondent had sold out his plot situated at Vikas Vihar, Vikas Nagar, New Delhi and the appellant, who had knowledge about the said deal approached the respondent/complainant for advance of Rs. 4,00,000/- from him which he was given by complainant. That in October, 2010, the appellant issued four cheques bearing no. 147657 dated 12.10.2010, 147658 dated 15.10.2010, 147659 dated 12.10.2010 and 147660 dated 15.10.2010 for sum of Rs. 1,00,000/- each drawn upon Bank of Baroda in discharge of his liability. That on 18.10.2010, the complainant after taking permission of the accused, presented all the said cheques for encashment but the said cheques were returned unpaid with CA NO: 48/13 2/16 Ramesh Singh Vs. Ram Gopal Gupta CA NO: 48/13 remarks "Funds Insufficient" vide return memo dated 19.10.2010. Despite issuance of legal demand notice dated 25.10.2010 to accused, the accused failed to make payment of the said amount. Hence, complaint was filed and appellant was summoned for the offence U/s 138 NI Act.
3. The defence of the appellant was that he had only taken loan of Rs.40,000/- from the respondent/complainant and against the said loan, cheques in question were issued as security. It was further the defence of appellant that he had repaid the amount of Rs.40,000/- but the cheques were not returned by the respondent/complainant and the same were later on misused by filling up the amount of Rs.4,00,000/-.
4. The ld.trial court after perusing the evidence led on record came to the conclusion that appellant had issued the cheques in discharge of his liability with regard to loan amount and did not believe the defence of appellant and accordingly held him guilty for the offence u/s 138 of the NI Act vide impugned judgment and sentenced him vide impugned sentence order. Hence, the present appeal.
5. Notice of the appeal was issued to respondent. Respondent chose not to file any reply.
CA NO: 48/13 3/16Ramesh Singh Vs. Ram Gopal Gupta CA NO: 48/13
6. I have heard counsel for appellant and counsel for respondent. I have also summoned the trial court record and have carefully perused the same.
7. In the present case, appellant has challenged the impugned judgment and impugned sentence order on the ground that from the cross examination of respondent/complainant, a doubt has been created regarding the availability of amount of Rs.4 lacs with respondent/complainant. Therefore, cheques in question were without any consideration and respondent/complainant had failed to prove that he had the amount of Rs.4 lacs in his possession to be advanced to the appellant. It was further submitted that in his cross examination, respondent/complainant had admitted that despite non-return of alleged Rs.4 lacs in question, second loan of Rs.2,40,000/- was given to appellant which was not repaid by him. Therefore, it was not believable from a perspective of a reasonable and a prudent man that a person will give second loan to a borrower when first loan is in default and not repaid by the borrower. It was also submitted that even the respondent/complainant had not disclosed in his complaint or evidence about the giving of second loan of Rs.2,40,000/- to appellant which further shows that respondent/complainant had not come to the court with clean hands. It was also submitted that alleged giving of loan by respondent/complainant in cash to appellant is in violation of CA NO: 48/13 4/16 Ramesh Singh Vs. Ram Gopal Gupta CA NO: 48/13 Section 269 SS of Income Tax Act, 1961 which prohibits giving of more than Rs.20,000/- in cash. Therefore, it also creates a doubt regarding advancement of Rs.4 lacs in cash to appellant. Lastly, it was submitted that appellant by cross examination of respondent/complainant had rebutted the presumption on preponderance of probabilities that cheques were without any consideration and burden shifted upon respondent/complainant to prove beyond reasonable doubt that cheques in question were issued for consideration. However, respondent/complainant did not prove that cheques of Rs.4 lacs were issued by appellant for consideration. Accordingly, it was prayed that impugned judgment and impugned sentence order be set aside. In support of his contention, he has relied upon the following judgments:-- (1) Krishna Janardhan Bhat Vs. Dattatraya, AIR 2008 SC 1325, (2) Sneh Jain Vs. Vijay Kalra, 208 (2014) DLT 503; (3) Satish Kumar Vs. State NCT of Delhi, 204(2013) DLT 289.
8. On the other hand, counsel for respondent/complainant submitted that ld.trial court had given a reasoned judgment convicting the appellant and all the grounds raised by the appellant in the appeal have been dealt with by the ld.trial court and there is no ground made to interfere in the impugned judgment. Accordingly, a prayer has been made to dismiss the appeal.
CA NO: 48/13 5/16Ramesh Singh Vs. Ram Gopal Gupta CA NO: 48/13
9. I have considered the rival submissions of respective counsels and have carefully perused the trial court record and evidence led by respective parties.
10.Before dealing with the points raised by appellant in the appeal, it is relevant here to discuss the law of presumption with regard to offence u/s 138 of the NI Act.
11.In the matter of Satish Kumar Vs. State NCT of Delhi and anr., 204(2013) DLT 289 relied upon by the appellant, the law of presumption with regard to offence u/s 138 of the NI Act has been held in paras 7 and 8 as under:--
"7. It is a settled legal position that under the scheme of Negotiable Instruments Act, a statutory presumption has been created in favour of the holder of the negotiable instrument in due course. Section 139 stipulates that the Court shall presume liability of the drawer of the cheque for the amount for which the cheque is drawn and Section 118 envisages that unless the contrary is proved, it shall be presumed that the negotiable instrument including a cheque has been drawn fro consideration.
"8. Although the Court is under an obligation to raise the presumption contemplated under Section 118, 138 and 139 in every case, where the factual basis for raising the presumption has been established by the complainant, the accused is required to raise a probable defence or rebut such a presumption by leading evidence or bringing such facts on record in the cross examination of the complainant that could make the latter's case improbable. For doing so, it is not CA NO: 48/13 6/16 Ramesh Singh Vs. Ram Gopal Gupta CA NO: 48/13 necessary for the accused to disprove the existence of consideration by way of direct evidence. The standard of proof has been held to be preponderance of probabilities and the inference of preponderance of probabilities can be drawn not only from the materials that have been placed on record, but also by reference to the circumstances upon which the accused relies. ( Ref.1 (1999) BC 558 (SC)=II (1999) CLT 67 (SC)=II (1999) SLT 372=AIR 1999 SC 1008 entitled Bharat Barrel and Drum Manufacturing Company V. Amin Chand Payrelal). If the accused is proved to have discharged the initial onus of proof placed on him by showing that the existence of consideration was improbable or doubtful or illegal, then the onus will shift back to the complainant who will then be under an obligation to prove it as matter of fact and failure to do so will dis-entitle him to any relief on the basis of the negotiable instrument."
12.Now, let us see whether in the present case, appellant was able to discharge the initial onus of proof placed upon him by showing that existence of consideration was improbable or doubtful. In case, appellant is able to show the same, then onus would have again shifted upon respondent/complainant to prove that the cheques in question were issued for consideration.
13.The case of the respondent/complainant is that in the month of March, 2009, respondent/complainant had sold his one plot, of which appellant had the knowledge and after sometime appellant approached the respondent/complainant for loan of Rs.4 lacs for his family and business needs for three months. In the light of relations between respondent/complainant and CA NO: 48/13 7/16 Ramesh Singh Vs. Ram Gopal Gupta CA NO: 48/13 appellant, respondent/complainant had given Rs.4 lacs to appellant. However, after expiry of three months, amount was not returned and appellant kept on seeking time for almost 18 months to repay the amount and finally in the month of October, 2010, appellant had issued four cheques of Rs.1 lac each to clear the aforementioned loan amount.
14.The defence of appellant right from the stage of giving reply to legal notice was that he had only taken Rs.40,000/- as loan from the respondent/complainant which he had repaid and cheques given as security at the time of taking loan were misused by respondent/complainant.
15.In the cross examination of respondent/complainant as CW1, appellant was able to obtain admission from the respondent/complainant that after the alleged loan of Rs.4 lacs, second loan of Rs.2,40,000/- was also given to appellant. The documents produced by appellant Ex.CW1/DA and Ex.CW1/DB with regard to aforementioned loan of Rs.2,40,000/- were also admitted by respondent/complainant.
16.The respondent/complainant could not remember the date of advancement of loan of Rs.2,40,000/- and deposed that date is mentioned in the loan documents Ex.CW1/DA and Ex.CW1/DB. As per loan documents, date of advancement of loan of Rs.
CA NO: 48/13 8/16Ramesh Singh Vs. Ram Gopal Gupta CA NO: 48/13 1,20,000/- each is 26.07.2010 and 18.08.2010 and both documents reflect that installments were being paid by appellant till September, 2010.
17.The respondent/complainant denied that he had not disclosed about the first loan of Rs.2,40,000/- in his complaint. However, on perusal of entire complaint and evidence by way of affidavit of CW1, there is no averment by respondent/complainant regarding giving of loan of Rs.2,40,000/- to appellant despite the fact that first loan was allegedly not returned by appellant. This non-disclosure of loan amount of Rs.2,40,000/- did create a doubt in the respondent/complainant's case and the onus shifted upon respondent/complainant to prove beyond reasonable doubt that loan of Rs.4 lacs was indeed given to the appellant for his family and business needs.
18.Secondly, it has come in the cross examination of CW1 that he was having a mobile shop and, therefore, was a man of modest means and it is not believable that he was having Rs.4 lacs in cash at his house for giving the same to appellant for his business and family needs. It has also come in the evidence of CW1 that cheques in question were given to him in the month of October, 2010. The alleged loan of Rs.4 lacs in question was given to CW1 in cash in the month of March, 2009. No document like promissory note, receipt or cheques were taken CA NO: 48/13 9/16 Ramesh Singh Vs. Ram Gopal Gupta CA NO: 48/13 by CW1 in the month of March, 2009 from the appellant. It is not believable that CW1 will not insist for execution of documents or take some security at the time of advancement of loan of Rs.4 lacs and created a doubt regarding existence of consideration.
19.Thirdly, it was the defence of appellant that no plot was sold by respondent/complainant and that is why date of sale was not given by the respondent/complainant and, therefore, he was not having any money to advance loan of Rs.4 lacs to appellant. Although respondent/complainant had denied the said suggestion but no documentary evidence was led on record by respondent/complainant to prove that he had in fact sold the plot in March, 2009 for Rs.12 lacs and out of sale proceeds, he had given Rs.4 lacs in cash to appellant.
20.Lastly, it was brought in the evidence of CW1 i.e. respondent/complainant and cross examination of appellant that there was contradiction in the case of respondent/complainant with regard to purpose for which alleged loan of Rs.4 lacs was given. In the complaint as well as in the examination in chief, it was deposed to by respondent/complainant CW1 that loan of Rs.4 lacs was given to appellant for his business and family needs but in the cross examination of DW1, respondent/complainant had suggested to CA NO: 48/13 10/16 Ramesh Singh Vs. Ram Gopal Gupta CA NO: 48/13 appellant that he had taken loan of Rs.4 lacs for going abroad between the period from 2009 to 2010. Appellant had denied the said suggestion and even volunteered to produce his VISA to show that he had never gone abroad in 2009 or 2010.
However, no such record was summoned by the respondent/complainant in support of his suggestion that loan was taken by appellant for going abroad. Since documents of travel were not sought to be produced by respondent/complainant on record despite willingness of appellant to produce the same, makes this court raise an adverse inference against respondent/complainant that in case travel documents of appellant were summoned, it would not have supported his case that loan of Rs.4 lacs was taken for the purpose of going abroad by appellant. This contradiction in the purpose for which loan was taken by appellant also creates a doubt regarding consideration of cheques and, therefore, onus was upon the respondent/complainant to prove beyond reasonable doubt that for what purpose, the loan of Rs.4 lacs was taken by appellant.
21.It was also brought out in the cross examination of respondent/complainant that he was an income tax assessee and despite that he did not show either the alleged loan of Rs.4 lacs in his income tax return or sale proceeds of plot in income tax return.
CA NO: 48/13 11/16Ramesh Singh Vs. Ram Gopal Gupta CA NO: 48/13
22.From the aforementioned evidence which has come on record in the deposition of respondent/complainant and appellant, appellant was able to rebut the presumption based upon preponderance of probabilities and he had created a doubt regarding consideration amount in the light of fact that there was a contradiction in the evidence of respondent/complainant regarding the purpose for which loan was given, non-production of sale documents to show that loan amount was given to appellant out of sale proceeds, concealment of second loan by respondent/complainant in his complaint and in his examination in chief and non-disclosure of loan amount and sale proceeds in the income tax return. Therefore, onus had shifted upon respondent/complainant to have proved beyond reasonable doubt that he had the capacity to advance loan of Rs.4 lacs to appellant out of sale proceeds received from sale of plot. However, respondent/complainant did not discharge the onus put upon him as no documentary evidence was filed on record with regard to sale of plot by him for Rs.12 lacs. Hence, respondent/complainant failed to prove that cheques in question were issued for consideration against loan amount of Rs.4 lacs.
23.It has also come on record in the evidence of respondent/complainant that he was frequently advancing loan CA NO: 48/13 12/16 Ramesh Singh Vs. Ram Gopal Gupta CA NO: 48/13 of Rs.10,000 to Rs.50,000/- to appellant. Apart from that, it has also come on record that appellant used to advance loan to one Mr.Raman Kumar. Therefore, aforesaid evidence discloses that respondent/complainant was in the business of money lending. As per The Punjab Registration of Money-Lender's Act, 1938 which is applicable to Delhi, respondent/complainant was required to have a licence to do money lending business. Further, as per Section 3 of The Punjab Registration of Money- Lender's Act, 1938, if any person advances loan without having requisite licence then he cannot recover the amount by filing a suit in the court meaning thereby that debt is not legally enforceable.
24.Therefore, in the present case, since respondent/complainant was not having requisite licence under The Punjab Registration of Money-Lender's Act, 1938 to advance loan to appellant and to other people, therefore, his debt was not legally recoverable and hence, offence u/s 138 of the NI Act was not made out as Section 138 NI Act pre-supposes that cheques should have been issued for legally enforceable debt. Therefore, on this ground also, impugned judgment is not sustainable in the eyes of law.
25.Lastly, it has come in the evidence of respondent/complainant that in the month of October, 2010, appellant had handed over CA NO: 48/13 13/16 Ramesh Singh Vs. Ram Gopal Gupta CA NO: 48/13 to him four cheques duly signed by him which were later on filled up by him in his own handwriting in the presence of appellant.
26.In the present case, there are four cheques of Rs.1 lac each dated 12.10.2010 and 15.10.2010. It is not believable that any reasonable and a prudent man, who has to return loan of Rs.4 lacs will issue four different cheques of Rs.1 lac each having a gap of only three days between them for encashment. Appellant could have very well issued one cheque with regard to alleged loan in question and there was no requirement for him to have issued four cheques of Rs.1 lac each.
27.The issuance of four different cheques of Rs.1 lac each would have been understandable in the circumstance where they were issued for paying the amount in monthly installments but where two cheques were issued for 12.10.2010 and two cheques for 15.10.2010, it is highly improbable that any reasonable and a prudent man would have done so. It would have been sufficient for the appellant to have issued one cheque of Rs. 4 lacs to repay the amount. Therefore, this fact also creates a doubt in the case of respondent/complainant that cheques were given by appellant to repay the loan amount of Rs. 4 lacs.
CA NO: 48/13 14/16Ramesh Singh Vs. Ram Gopal Gupta CA NO: 48/13
28.This court is conscious of the fact that even the defence of appellant is not consistent in the present case. The defence of the appellant at the stage of giving reply to legal notice was that he had only taken loan of Rs.40,000/- which was repaid by him and cheques were given as security for the said loan. Even the said defence was taken by appellant at the stage of framing of notice u/s 251 Cr.P.C. and also while deposing as DW1 in the present case. However, during cross examination of CW1, defence was taken up by appellant by suggesting to CW1 that cheques in question were given as security with regard to loan of Rs.2,40,000/-.
29. Notwithstanding, this inconsistency in the defence of appellant, still appellant has been able to rebut the presumption as other evidence has been brought on record by appellant which makes the case of respondent/complainant doubtful which has been discussed in aforementioned para no.22.
30.If the appellant had failed to bring on record any other material to create a doubt in the case of respondent/complainant then inconsistency in his defence would have been relevant to hold that appellant had failed to rebut the presumption and hollowness of his defence was brought out in the light of his inconsistent defence. However, since in the present case, other evidence was brought on record to create a doubt regarding the CA NO: 48/13 15/16 Ramesh Singh Vs. Ram Gopal Gupta CA NO: 48/13 case of respondent/complainant and since respondent/complainant failed to prove beyond reasonable doubt the consideration amount and had concealed the material evidence with regard to existence of second loan, therefore, respondent/complainant had failed to prove its case beyond reasonable doubt.
31.In the light of above discussion, this court is of the opinion that the impugned judgment and impugned sentence order of the ld.trial court are not sustainable in the eyes of law and are liable to be set aside as respondent/complainant has failed to prove that cheques in question were issued for consideration. Appeal is accordingly allowed. Impugned judgment and impugned sentence order are set aside. Appellant is acquitted for the offence u/s 138 of the NI Act.
32.In terms of Section 437A Cr.P.C let appellant furnish personal bond in the sum of Rs.10,000/- with one surety of the like amount with undertaking to appear before the appellate court as and when he receives notice from it.
Announced in the open court (Vikas Dhull)
Dated: 22.09.2014 ASJ-01/Dwarka
New Delhi
CA NO: 48/13 16/16