Delhi District Court
Cc No. 52348/2016 Amit Gadhia vs . Vareshwar Kumar Mehta on 27 February, 2023
CC No. 52348/2016 Amit Gadhia Vs. Vareshwar Kumar Mehta
IN THE COURT OF MS POOJA YADAV,
METROPOLITAN MAGISTRATE (NI ACT),
KARKARDOOMA COURTS, DELHI
Amit Gadhia Vs. Vareshwar Kumar Mehta
CC NO. 52348/2016
PS: Preet Vihar
CNR No. DLET020040792015
Sh. Amit Gadhia
S/o Sh. Nand Lal Gadhia
R/o H.No. 13, Gujrat Vihar
Delhi110092. ...............Complainant
Vs
Sh. Vareshwar Kumar Mehta
S/o Sh. Vijay Mehta,
R/o E16, Preet Vihar
Delhi110 092. ....................Accused
Complaint Case No. : 52348/2016 (Old CC No.638/2015)
Date of Institution : 16.09.2015
Offence alleged : Section 138 Negotiable Instruments
Act,1881
Plea of the Accused : Pleaded not guilty
Final Order : Convicted
Date of reservation : 25.01.2023
Date of Decision : 27.02.2023
Argued by:
Ld. Counsel for Complainant: Sh. S.S.Gulati
Ld. Counsel for Accused: Sh. Dinesh Yadav
Digitally
signed by
Page no. 1 of 48 POOJA
POOJA
YADAV
YADAV Date:
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JUDGEMENT
1. The Complainant has filed the present Complaint against the Accused under section 138 Negotiable Instruments Act, 1881.
FACTUAL MATRIX
2. The brief facts as alleged by Sh. Amit Gadhia (hereinafter referred to as 'the Complainant') is that he and Shri Vareshwar Kumar Mehta (hereinafter referred to as 'the Accused') had good friendly as well as business relations. It is further averred that the Accused is running the business of call centre in the name and style of M/S Overlegen Services Pvt. Ltd. at 350 Patparganj Industrial Area, Delhi 110 092.
2.1 That it has been further averred that the Accused approached the Complainant in the month of December 2014 and proposed the Complainant to make an investment in the business of the Accused for four months which would fetch the Complainant an assured return of Rs.5,00,000/ besides the investment amount of Rs.35,00,000/ within stipulated period. On the assurance given by the Accused, the Complainant advanced the amount of Rs. 35,00,000/ to the Accused in the following way:
(a) Rs.10,00,000/ vide cheque bearing no. 829331 dated 31.12.2014;
(b) Rs.5,00,000/ vide cheque bearing no.
829332 dated 09.01.2015;
Digitally
signed by
POOJA
Page no. 2 of 48 POOJA YADAV
YADAV Date:
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(c) Rs.5,00,000/ vide cheque bearing no.
829333 dated 31.12.2014 and;
(all cheques drawn on Axis Bank, Swasthya Vihar Branch, Delhi110 092)
(d) Rs.15,00,000/ by way of cash.
2.2. It is further averred that the Accused undertook to return the abovesaid investment amount of Rs.35,00,000/ along with the assured return of Rs.5,00,000/ on or before 01.05.2015. It is further averred that the Accused also executed an agreement dated 19.01.2015 to that effect with the Complainant.
2.3 That it is further averred that in discharge of the abovesaid legal liability, the Accused issued six postdated cheques, out of which one bearing no. 442769 dated 16.07.2015 for an amount of Rs. 5,00,000/ drawn on Axis Bank, Swasthya Vihar Branch, Delhi110 092 i.e., the cheque in question, in favour of the Complainant with the assurance that the said cheque would be honoured on its presentation for encashment.
2.4 That, however, when the Complainant presented the said cheque through his banker in Axis Bank, Swasthya Vihar Branch, Delhi110 092, for encashment on the instructions of the Accused, the same was returned with remarks 'funds insufficient' along with the returning memo dated 16.07.2015.
Digitally
signed by
POOJA
POOJA YADAV
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2.5 That the Complainant immediately contacted the Accused
and informed him about the dishonouring of the cheque in question however, the Accused totally refused to return the cheque amount to the Complainant.
2.6 That, thereafter, the Complainant through his Ld. Counsel sent a legal demand notice dated 11.08.2015 through speed post receipt no. ED639885732IN dated 14.08.2015 to the Accused which got served upon the Accused but the Accused neither replied to the same nor made payment within 15 days.
2.7 Hence, the present Complaint u/s 138 Negotiable Instrument Act 1881 (for short "the NI Act") was filed on 16.09.2015 by the Complainant, praying for the Accused to be summoned, tried and punished for commission of the offence u/s 138 of the Negotiable Instruments Act, 1881. The Complainant has further averred that the matter falls within the territorial jurisdiction of this Court; thus, being tenable at law.
PROCEEDINGS BEFORE THE COURT PRESUMMONING EVIDENCE:
3. That in order to prove a primafacie case, the Complainant led presummoning evidence by way of affidavit i.e., Ex.
CW1/1 on 03.11.2015 wherein the Complainant affirmed Digitally Page no. 4 of 48 signed by POOJA POOJA YADAV YADAV Date:
2023.02.27 19:47:15 +0530 CC No. 52348/2016 Amit Gadhia Vs. Vareshwar Kumar Mehta the facts stated in the present Complaint and relied upon the following documents:
a. Ex. CW 1/A1: The agreement dated 19.01.2015. b. Ex.CW1/A:Original Cheque in question dt. 16.07.2015.
c. Ex. CW 1/B : Original return memo dated 16.07.2015.
d. Ex. CW 1/C: Legal Notice dt. 11.08.2015. e. Ex. CW 1/D: Postal receipt dt. 14.08.2015 f. Ex. CW1/E: Speed Post Tracking Internet Report.
COGNIZANCE & SUMMONING OF THE ACCUSED:
4. That, after considering the Presummoning evidence led by the Complainant and the submissions made by him, the Ld. Predecessor took cognizance and issued summons to the Accused vide order dated 03.11.2015.
4.1 That, thereafter, the Accused entered his first appearance on 02.11.2016 and was admitted to bail on furnishing of bail bonds and a surety bond in the sum of Rs. 50,000/.
NOTICE U/S 251 CR.P.C:
5. That on 02.11.2016, Notice u/s 251 of the Code of Criminal Procedure, 1973 (for short 'Cr.P.C.') containing the substance of accusation, for the offence under Section 138 of the Act was served upon the Accused to which he Digitally Page no. 5 of 48 signed by POOJA POOJA YADAV YADAV Date:
2023.02.27 19:47:23 +0530 CC No. 52348/2016 Amit Gadhia Vs. Vareshwar Kumar Mehta pleaded not guilty and claimed trial. The plea of defence of the Accused is reproduced hereinunder for reference:
Plea of Defence of the Accused:
1. It is correct that cheques in question bear my signature, name of my bank and my account number. I have filled the entire contents of cheque in question except the date on the same.
2. I know the Complainant as the Complainant is a private financier and I have worked with the Complainant earlier. I had handed over 9 cheques to the Complainant out of which one cheque was self cheque which was fully filled, two blank signed cheques and the remaining 6 cheques were filled except the date thereon. I handed over the said cheques to the Complainant for a transaction of Rs. 35,00,000/ whereby he was to invest Rs. 35,00,000/ with me and I was to return Rs. 40,00,000/ to the Complainant. However, no investment was made by the Complainant with me.
The account of cheque in question was opened exclusively for the said Page no. 6 of 48 Digitally signed by POOJA POOJA YADAV YADAV Date:
2023.02.27 19:47:31 +0530 CC No. 52348/2016 Amit Gadhia Vs. Vareshwar Kumar Mehta transaction only. The Complainant deposited Rs. 10,00,000/ in my account and thereafter, he withdrew an amount of Rs. 12,00,000/ from my account through aforesaid self cheque. Thereafter, the Complainant deposited Rs. 5,00,000/ in my bank and withdrew the same from my bank through one of my said two blank signed cheques. Again the Complainant deposited Rs. 5,00,000/ in my bank account and withdraw the same through my second blank signed cheque.
Thereafter, the Complainant demanded a promissory note as well as a signed contract for completion of the transaction and on saying of the Complainant I signed on the promissory note. However, later the Complainant started demanding money from me stating that I had taken money from him but since I had not taken any money from him, I cancelled the transaction. Thereafter, the Complainant misused the cheque in question by filing the present complaint case.
POOJA
Page no. 7 of 48 YADAV
Digitally signed by
POOJA YADAV
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3. I received legal demand notice issued by the Complainant but I did not reply to the same.
EVIDENCE OF THE COMPLAINANT:
6. That after the Notice u/s251 Cr.P.C containing the substance of accusation was served upon the Accused on 02.11.2016; on the same day, the Ld. Counsel for Accused moved an application u/s145(2) NI Act for recalling the Complainant for crossexamination and in view of the defence taken by the Accused and for the reasons stated in the application, the application was allowed only with respect to crossexamination of the Complainant. The matter was then fixed for CE along with other three connected matters on 16.01.2017.
6.1 That afterwards, the Complainant was examined as CW1 on 16.01.2017, who adopted the presummoning evidence as postsummoning evidence as it is and relied upon all previously exhibited documents and was partly cross examined. Further crossexamination got deferred for want of ITRs of the Complainant. The Complainant i.e., CW1 was then recalled on 29.08.2018 for further cross examination. Crossexamination of the Complainant was concluded on 29.08.2018 and the Complainant was then discharged on same day. No other witnesses were examined by the Complainant.
Digitally Page no. 8 of 48 signed by POOJA POOJA YADAV YADAV Date:
2023.02.27 19:47:46 +0530 CC No. 52348/2016 Amit Gadhia Vs. Vareshwar Kumar Mehta 6.2 That thereafter, evidence of the Complainant was closed on 29.08.2018. That being the case, the matter was then listed for statement of the Accused u/s 313 Cr.P.C read with Section 281 Cr.P.C on 29.11.2018.
STATEMENT OF THE ACCUSED:
7. That in order to give an opportunity to the Accused to personally explain all the incriminating circumstances appearing in evidence against him, statement of the Accused under Section 313 Cr.P.C read with Section 281 Cr.P.C was recorded without oath on 29.11.2018 wherein all the incriminating circumstances appearing in evidence against the Accused were put to him. The Accused denied all the allegations against him and stated as under:
1. The cheque in question bears my signature. Nine signed cheques were handed over to the Complainant out of which three cheques were bearing self and rest six cheques were blank signed cheques. The Complainant had misused three self cheques and had withdrawn the money from my account which was deposited by him in my account. I have Digitally signed by POOJA Page no. 9 of 48 POOJA YADAV YADAV Date:
2023.02.27 19:47:52 +0530 CC No. 52348/2016 Amit Gadhia Vs. Vareshwar Kumar Mehta not received a single penny from the Complainant.
2. There was no debt or liability existing against me as Complainant has never given money to me. I and Complainant had entered to an agreement dated 19.01.2015 and the Complainant had promised to pay Rs. 35.0 Lakhs to me against my said cheques. The Complainant had transferred approximately Rs. 20.00 Lakhs in my bank account. I did not repaid the aforesaid money of Rs. 20. Lakhs to the Complainant.
3. I do not remember whether I received legal demand notice issued by the Complainant or not.
4. Yes, I want to lead evidence in my defence.
7.1 Thereafter, the matter was listed for DE on 15.02.2019.
DEFENCE EVIDENCE:
8. That DW2, Sh. Priyank Kumar, Assistant Manager, Axis Bank, Preet Vihar, Delhi, summoned defence witness Page no. 10 of 48 Digitally signed by POOJA POOJA YADAV YADAV Date:
2023.02.27 19:48:03 +0530 CC No. 52348/2016 Amit Gadhia Vs. Vareshwar Kumar Mehta was examined, crossexamined and discharged on 22.08.2019. The said witness brought three cheques bearing no. 442762 dt. 09.01.2015, 442761 dt. 31.12.2014 and 442763 dt. 15.01.2015, which were Exhibited as Ex. DW2/1 (Colly). Original documents, Ex.DW2/1 are placed in the judicial file of CC No. 45107/2016. Also, he had brought a copy of account opening form of the Accused with KYC and account opening cheque which were identified as Mark DA (running into 9 pages) and laced on record.
8.1 That on the same day, the Ld. Counsel for Accused had moved an application for sending the cheques bearing no. 442763 dated 15.01.2015, 442762 dt. 09.01.2015 and 442761 dt. 31.12.2014 to FSL.
8.2 That vide order dated 24.09.2019, the said application of the Accused was dismissed for the reasons stated in the order dated 24.09.2019.
8.3 Thereafter, the matter was listed for DE on 30.09.2019 and for the reasons stated in the order dt. 30.09.2019, the right of the Accused to lead DE was closed and the matter was then listed for final arguments.
8.4 The said order was then challenged by the Accused before the Ld. ASJ, KKD, East, Delhi by way of revision petition, however, the same was dismissed by the Ld. ASJ, KKD, East, Delhi vide order dt.07.12.2019.
Page no. 11 of 48 Digitally
signed by
POOJA
POOJA YADAV
YADAV Date:
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8.5 Thereafter, the said order dt.07.12.2019 of the LD. ASJ,
KKD, East, Delhi was challenged alongwith the order dt. 30.09.2019 of the Ld. Predecessor before the Hon'ble Delhi High Court vide Crl.M.C. 678/2020. Vide order dated 11.02.2020, one single opportunity was granted to the Accused to lead defence evidence subject to cost of Rs. 5000/ payable to the Respondent/ Complainant.
8.6 That thereafter, the Accused moved an application u/s 315 Cr.P.C to examine himself as the defence witness, which was allowed. Accused was then examined as DW 1 on 05.03.2020, crossexamined and discharged on 05.03.2020.
8.7 That thereafter, the Accused moved an application seeking permission to examine the Hotel Clerk at JP Resort, Kanhatal, Nainital, UK, however, the same was dismissed by the Ld. Predecessor vide order dated 12.03.2021 for the reasons stated therein and the matter was then listed for final arguments. Thereafter, the Ld. Counsel for Accused had moved two applications, one, for summoning proposed witness, Ms. Neha Garg and another for taking on record the documents of booking and photographs showing the presence of the Accused at Kanhatal, Uttarakhand, which were allowed and the said witness was examined on oath as Court witness and was crossexamined by Digitally Page no. 12 of 48 signed by POOJA POOJA YADAV YADAV Date:
2023.02.27 19:48:18 +0530 CC No. 52348/2016 Amit Gadhia Vs. Vareshwar Kumar Mehta the Ld. Counsel for Complainant after seeking permission of the Ld. Predecessor on 28.06.2022.
8.8 The matter was then fixed for final arguments.
FINAL ARGUMENTS:
9. That oral submissions were advanced by the Ld. Counsels for the respective parties. Written submissions were also filed on behalf of the respective parties and are on record.
9.1 That the Ld. Counsel for Complainant would contend that the Complainant had invested an amount of Rs.
35,00,000/ in the business of the Accused on the assurance of return of Rs.5,00,000/ besides the invested amount. An agreement dated 19.01.2015 was also duly executed between the parties to that effect whereby the money was advanced by the Complainant and the Accused had issued the cheque in question alongwith other cheques as mentioned in the agreement. The Complainant presented the cheque in question for encashment which got dishonoured on 16.07.2015. Subsequent to that, legal demand notice was sent to the Accused, however, the Accused did not pay the money, hence, the Complainant was constrained to file the present complaint case. It is further contended that the Accused has admitted his signature on the cheque in question. Further, it is submitted that the Accused has admitted receiving the legal demand notice in his plea of defence while serving of Page no. 13 of 48 Digitally signed by POOJA POOJA YADAV YADAV Date:
2023.02.27 19:48:25 +0530 CC No. 52348/2016 Amit Gadhia Vs. Vareshwar Kumar Mehta notice of accusation u/s251 Cr.P.C on 02.11.2016. However, while recording of statement u/s313 Cr.P.C r/w sec281 Cr.P.C, the Accused stated that he does not remember whether he received the legal demand notice or not. Moreso, it was argued that since no suggestion ever came forth from the Accused disputing the receipt of the legal demand notice meaning thereby that the service of the same upon the Accused shall be deemed to be admitted. Further, the Ld. Counsel for the Complainant has relied upon the testimony of the bank witness who was examined as DW2 on 22.08.2019. It is further submitted by the Ld. Counsel for Complainant that the Accused has misled the Court about the journey of the Accused from Delhi to Kanhatal (Uttarakhand) on 03.01.2015. It is further submitted that the cheque bearing no. 442761 dated 31.12.2014 does not reflect the time as 12:00 pm as alleged by the Accused, time at which it was allegedly presented however, it simply reflects the amount of Rs.12,00,000/. It was further submitted that the cheque in question issued by the Accused to the Complainant is in discharge of his legal liability and admitted debt since the Accused has admitted having entered into the agreement dt. 19.01.2015. Lastly, it was submitted on behalf of the Complainant that a Civil Suit for recovery under Order XXXVII of Civil Procedure Code 1908 against the Accused was filed by the Complainant vide CS No. 330/18, which Page no. 14 of 48 Digitally signed by POOJA POOJA Date:
YADAV YADAV 2023.02.27 19:48:33 +0530 CC No. 52348/2016 Amit Gadhia Vs. Vareshwar Kumar Mehta has been decreed in the favour of the Complainant.
9.2 Per contra, the Ld. Counsel for the Accused has submitted that the Complainant had shown his willingness to invest a sum of Rs.35,00,000/ in the business of the Accused for an assured return of Rs.5,00,000/ over and above the sum invested. That as per the understanding between the parties, the Complainant was to receive the amount of Rs.35,00,000/ from some third person and induced the Accused to open an account for receiving the same which would subsequently be withdrawn by the Complainant and shall be given to the Accused in cash. Accordingly, the Accused at the instance of the Complainant opened the Bank account bearing no. 914010036443315 with Axis Bank, Swasthya Vihar, New Delhi in December, 2014. That during the period from 29.10.2014 till 15.01.2015, the Complainant himself made a deposit of Rs.2 lakh, 10 lakh, 5 lakh and 5 lakh in the above said newly opened account.
The said amount of Rs. 2 lakh was deposited by the Complainant himself in cash, which is the minimum balance requirement for opening an account. The Complainant assured the Accused that he shall be giving the amount of Rs.35,00,000/ to the Accused in one go after withdrawing the same from the above said newly opened account, in cash. In order to withdraw the money, the Complainant took three cheques from the Accused. One selfcheque bearing no. 442761 in the sum of Page no. 15 of 48 Digitally signed by POOJA POOJA YADAV YADAV Date:
2023.02.27 19:48:45 +0530 CC No. 52348/2016 Amit Gadhia Vs. Vareshwar Kumar Mehta Rs.12,00,000/. Two more undated cheques bearing no. 442762 and 442763 in the sum of Rs. 5,00,000/ each. The Ld.Counsel for the Accused has emphasized on the alleged fact that Accused had issued only one selfcheque i.e., cheque bearing no. 442761 which was undated and the rest two cheques were undated signed cheques whereby the Accused had only filled the amount in words and figures. The Complainant had himself subsequently written 'Self' and put dates on the cheques bearing no. 442762 and 442763. All these three cheques bearing no. 442761, 442762 and 442763 were encashed by the Complainant himself on 02.01.2015, 09.01.2015 and 15.01.2015 respectively. At the time of encashing the abovesaid cheques, the Complainant himself had made an endorsement "withdrawal for property proceeds" and "received". The handwriting in which "withdrawal for property proceeds" and "received" were written resembles to the handwriting in which "self" were written on cheques bearing no. 442762 and 442763 meaning thereby that albeit the cheques were issued by the Accused but were filled and encashed by the Complainant himself. Similarly, the denomination of currency received mentioned in the handwriting of the person who received the same resembles to that of Complainant who had filled the cheques as mentioned above. After, withdrawing the above said amount of Rs.22,00,000/ from the newly opened bank account of Page no. 16 of 48 POOJA YADAV Digitally signed by POOJA YADAV Date: 2023.02.27 19:48:55 +0530 CC No. 52348/2016 Amit Gadhia Vs. Vareshwar Kumar Mehta the Accused, the Complainant did not give even a single penny to the Accused as assured rather requested the Accused to issue six more cheques as security to make certain the repayment of the amount of Rs.35,00,000/ which was to be invested by the Complainant and the assured return of Rs.5,00,000/ . Accordingly, the Accused issued six postdated cheques to the Complainant, however, no amount ever was invested by the Complainant in the business of the Accused as assured in lieu of the cheques taken by the Complainant. Therefore, the Accused has no legally enforceable debt or liability against the Complainant and hence, the Cheque in question was not issued in discharge of any legally enforceable debt or liability as alleged by the Complainant. It is further contended that although the bank witness deposed that the amount qua cheques bearing no. 442761, 442762 and 442763 were withdrawn by the Accused himself, however, the day on which the amount of Rs.12,00,000/ was withdrawn vide cheque bearing no. 442761 i.e., on 02.01.2015, the Accused was not present in Delhi and had gone to Kanhatal, Uttarakhand along with his wife, sisterinlaw and brother inlaw. The sisterinlaw of the Accused was examined as a Court witness by the Ld. Predecessor of this Court who had deposed to that effect and had produced photographs which were clicked at 6:11 pm on 02.01.2015 wherein Accused is present. As per the deposition made by the Court witness, Page no. 17 of 48 Digitally signed by POOJA POOJA YADAV YADAV Date:
2023.02.27 19:49:03 +0530 CC No. 52348/2016 Amit Gadhia Vs. Vareshwar Kumar Mehta the Accused was in Kanhatal at 6.11 pm and as per google map, it takes at least 7 hours 30 minutes to reach there from Delhi meaning thereby that the cheque bearing no. 442761 could not have been presented for encashment at 12:00 pm on 02.01.2015 by the Accused as reflected from the stamp of the Bank on the said cheque. The device from which the photographs were taken has not been disputed by the Complainant and hence, the deposition of the Court witness is proved beyond reasonable doubt. It is further contended that Complainant has filed an agreement which shows that the cheques issued by the Accused were undated meaning thereby that the version of the Accused pertaining to undated cheques has been proved. That the Accused had sought the CCTV footage from the Axis Bank for the time period when the cheques bearing no. 442761, 442762 and 442763 were encashed, however, unfortunately, the same could not be furnished by the Bank witness, being old footages and having been deleted from the system, otherwise, the same would have proved the defence of the Accused. At last, it is submitted that the Complainant has filed an agreement which shows that Accused had given six undated cheques, however, the Complainant has not filed any complaint qua the sixth cheque and no whisper about the same has been made by the Complainant which cast a doubt on the version of the Complainant. In view of the above, the Accused has Page no. 18 of 48 Digitally signed by POOJA POOJA YADAV YADAV Date:
2023.02.27 19:49:11 +0530 CC No. 52348/2016 Amit Gadhia Vs. Vareshwar Kumar Mehta successfully shifted the onus upon the Complainant by raising a probable defence.
9.3 I have heard the submissions of the Ld. Counsels for the Complainant as well as the Accused at length.
9.4 I have also perused the written submissions filed by the respective Ld. Counsels and have gone through the entire record minutely.
LEGAL POSITION:
10. Before proceeding to the merits of the case, it is imperative to lay down the provisions of law with respect to Sce138 NI Act and Sce139 NI Act, which are set out herein below for convenience:
Section 138. Dishonour of cheque for insufficiency, etc., of funds in the account. Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of 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, such person shall be deemed to have committed an offence and shall, without prejudice to Page no. 19 of 48 Digitally signed by POOJA POOJA YADAV YADAV Date:
2023.02.27 19:49:19 +0530 CC No. 52348/2016 Amit Gadhia Vs. Vareshwar Kumar Mehta any other provisions of this Act, be punished with imprisonment for [a term which may be extended to two years], or with fine which may extend to twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall apply unless
(a) the cheque has been presented to the bank within a period of three months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, [within thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
Explanation - For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability.
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POOJA YADAV
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Section 139. 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.
10.1 In order to constitute an offence u/s. 138 of the Negotiable Instruments Act, 1881, the following legal requirements must be satisfied from the averments in the Complaint as well as the evidence of the Complainant1:
(a) a person must have drawn a cheque, on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account for the discharge, in whole or in part, of any legally enforceable debt or other liability;
(b) that the cheque has been presented to the bank within a period of three months from the date on which it is drawn or within the period of its validity, whichever is earlier;
1 *Kusum Ingots & Alloys Ltd. Vs. Pennar Peterson Securities Ltd. AIR 2000 SC 954, Delivered by Honorable Division Bench of Justice K.T.Thomas & Justice D.P.Mohapatra, Supreme Court of India on 30032011.*modified in consonance with the amendments brought subsequent to the judgement dated 23.02.2000 in the NI Act.
Digitally
signed by
POOJA
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(c) that the cheque has been returned by the drawee bank unpaid, either for the reason that 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;
(d) that the payee or the holder in due course of the cheque has made a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 30 days of the receipt of information from the bank regarding the return of the cheque as unpaid;
(e) that the drawer of such cheque fails to make the payment of the said amount of money to the payee or holder in due course within 15 days of receipt of the said notice.
10.2 That the legal requirements mentioned hereinabove are cumulative in nature, i.e. only upon fulfilment of all the aforementioned ingredients, the drawer of the cheque is deemed to have committed an offence under s. 138 of the Negotiable Instruments Act.
10.3 The provision of Sec.138 is further supported by Sec.139 and Sec.118 of the Act. Sec. 139 of the Act provides presumption in favour of the Complainant and mandates that the court shall presume, that the holder of a cheque Page no. 22 of 48 Digitally signed by POOJA POOJA YADAV YADAV Date:
2023.02.27 19:49:46 +0530 CC No. 52348/2016 Amit Gadhia Vs. Vareshwar Kumar Mehta received the cheque of the nature referred to in Sec.138 for the discharge, wholly or in part of any debt or other liability. Sec.118 of the Act provides presumptions as to negotiable instruments; that the court shall presume, until the contrary is proved, 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.
10.4 In the case of Hiten P. Dalal v. Bratindranath Banerjee2, the Hon'ble Supreme Court had examined the confines of the presumption u/s 139 of the Act, wherein it held as follows:
"22. Because both Sections 138 and 139 (..) "introduce an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the Accused." (Ibid. at p. 65, para
14.) (...) The obligation on the prosecution may be discharged with the help of presumptions of law or fact unless the Accused adduces evidence showing the reasonable possibility of the non existence of the presumed fact. Therefore, the rebuttal does not have to be conclusively established but such evidence must 2 (2001) 6 SCC 16 Digitally signed by POOJA POOJA YADAV YADAV Date:
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be adduced before the court in support of the defence that the court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of reasonability being that of the "prudent man".
(...) in the case of a mandatory presumption, the burden resting on the Accused person in such a case would not be as light as it is where a presumption is raised under Section 114 of the Evidence Act and cannot be held to be discharged merely by reason of the fact that the explanation offered by the Accused is reasonable and probable. It must further be shown that the explanation is a true one. ........ Unless, therefore, the explanation is supported by proof, the presumption created by the provision cannot be said to be rebutted".
(emphasis supplied).
10.5 Also, in the case of Rangappa v. Sri Mohan3, it was held that:
"(..)we are in agreement with the respondent claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. (..) Digitally signed by POOJA 3 (2010) 11 SCC 441 POOJA YADAV YADAV Date:
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28. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an Accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of "preponderance of probabilities". (...) As clarified in the citations, the Accused can rely on the materials submitted by the Complainant in order to raise such a defence and it is conceivable that in some cases the Accused may not need to adduce evidence of his/her own(...)"
(emphasis supplied) 10.6 Elaborating further on this point, the Apex Court in Basalingappa v. Mudibasappa4 summarised the law. The following was laid down in para 25: (SCC p. 433434) "25. We have noticed the ratio laid down by this Court in the above cases on sections 118(a) and 139, we now summarise the principles enumerated by this Court in following manner:
25.1. Once the execution of cheque is admitted section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.
4 (2019) 5 SCC 418; Delivered by Honorable Division Bench of Justice Ashok Bhushan & Justice K.M.Joseph, Supreme Court of India on 0904 2019.
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2023.02.27 19:50:15 +0530 CC No. 52348/2016 Amit Gadhia Vs. Vareshwar Kumar Mehta 25.2 The presumption under section 139 is a rebuttable presumption and the onus is on the Accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities. 25.3 To rebut the presumption, it is open for the Accused to rely on evidence led by him or the Accused can also rely on the materials submitted by the Complainant in order to raise a probable defence.
Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.
25.4 That it is not necessary for the Accused to come in the witness box in support of his defence, section 139 imposed an evidentiary burden and not a persuasive burden.
25.5 It is not necessary for the Accused to come in the witness box to support his defence. 10.7 With regard to the factors taken into account for rebutting the presumption u/s 139 read with s.118 of the Act, the judgement of Hon'ble Delhi High Court in V.S. Yadav v. Reena5 assumes importance, wherein it was held that:
"Mere pleading not guilty and stating that the cheques were issued as security, would not amount 5 CRL. A. No. 1136 Of 2010 Digitally signed by POOJA Page no. 26 of 48 POOJA YADAV YADAV Date:
2023.02.27 19:51:39 +0530 CC No. 52348/2016 Amit Gadhia Vs. Vareshwar Kumar Mehta to rebutting the presumption raised under Section 139 of N.I. Act. (...) The Accused, by cogent evidence, has to prove the circumstance under which cheques were issued".
(emphasis supplied) 10.8 What emerges from the abovesaid discussion is that the offence u/s 138 of the Negotiable Instruments Act operates on reverse onus of proof theory; once a given set of facts are shown to exist, the presumptions u/s 139 and Sec.118 of the Act mandate the court to draw them. The same is evident by the language used, i.e., "Shall Presume". However, the said presumptions are in the nature of rebuttable presumptions, i.e. it is open for the defence to shift the onus on the Complainant by raising a probable/ plausible defence.
APPRECIATION OF EVIDENCE AND FINDINGS:
11. Now, I shall proceed to deal with the legal ingredients one by one and give my finding on whether the evidence both oral as well as documentary on record satisfy the legal ingredients in question or not.
(a)First Ingredient: 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 Digitally signed by POOJA Page no. 27 of 48 POOJA YADAV YADAV Date:
2023.02.27 19:51:48 +0530 CC No. 52348/2016 Amit Gadhia Vs. Vareshwar Kumar Mehta account for the discharge, in whole or in part, of any legally enforceable debt or other liability;
11.1 This ingredient pertains to the issuance of the cheque itself. At the outset, the alleged liability of the Accused stems from the issuance of the cheque in question, allegedly given by the Accused pursuant to the agreement, Ex CW1/A1, dated 19.01.2015, executed between the parties. It is pertinent to note that the Accused, in his notice of accusation u/s251 Cr.P.C has admitted his signature on the cheque in question. Further, it was admitted that the cheque has been drawn on the account of the Accused. The Accused admitted filling the entire contents on the cheque in question except the date thereon.
The defence taken by the Accused is that the he knows the Complainant as the Complainant is a private financier and has worked with the Complainant earlier. He had handed over 9 cheques to the Complainant out of which one cheque was self cheque which was fully filled, two blank signed cheques and the remaining six cheques were filled except the date thereon. He had handed over the said cheques to the Complainant for a transaction of Rs. 35,00,000/ whereby the Complainant was to invest Rs. 35,00,000/ with the Accused and he was to return Rs. 40,00,000/ to the Complainant. However, no investment was ever made by the Complainant with him. The account on which the cheque in question was drawn was opened exclusively for Page no. 28 of 48 Digitally signed by POOJA POOJA YADAV YADAV Date:
2023.02.27 19:51:55 +0530 CC No. 52348/2016 Amit Gadhia Vs. Vareshwar Kumar Mehta the said transaction only. The Complainant deposited Rs. 10,00,000/ in the account of the Accused and thereafter, he withdrew an amount of Rs. 12,00,000/ from the said account of the Accused through aforesaid self cheque. Thereafter, the Complainant deposited Rs. 5,00,000/ in the bank account of the Accused and withdrew the same from the bank of the Accused through one of the abovesaid two blank signed cheques. Again, the Complainant deposited Rs. 5,00,000/ in the bank account of the Accused and withdrew the same through the second blank signed cheque. Thereafter, the Complainant demanded a promissory note as well as a signed contract for completion of the transaction and on saying of the Complainant, the Accused signed the promissory note. However, later the Complainant started demanding money from the Accused stating that he had taken money from the Complainant but since the Accused had not taken any money from the Complainant, he cancelled the transaction. Thereafter, the Complainant misused the cheque in question by filing the present complaint case. Be that as it may, the Accused has admitted the issuance of cheque which bears his signature.
11.2 In the case of Kumar Exports Vs. Sharma Carpets6, it was held:
"When a presumption is rebuttable, it only points out that the party on whom lies the duty 6 2009 (2) SCC 513 Digitally Page no. 29 of 48 signed by POOJA POOJA YADAV YADAV Date:
2023.02.27 19:52:06 +0530 CC No. 52348/2016 Amit Gadhia Vs. Vareshwar Kumar Mehta of going forward with evidence, on the fact presumed and when that party has produced evidence fairly and reasonably tending to show that the real fact is not as presumed, the purpose of the presumption is over.
The Accused in a trial under Section 138 of the Act has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case the nonexistence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. (...) To disprove the presumptions, the Accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their nonexistence was so probable that a prudent man would 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 circumstantial evidence and if Page no. 30 of 48 Digitally signed by POOJA POOJA YADAV YADAV Date:
2023.02.27 19:52:13 +0530 CC No. 52348/2016 Amit Gadhia Vs. Vareshwar Kumar Mehta the circumstances so relied upon are compelling, the burden may likewise shift again on to 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 arising under Sections 118 and 139 of the Act . The Accused has also an option to prove the non existence of consideration and debt or liability either by letting in evidence or in some clear and exceptional cases, from the case set out by the Complainant, that is, the averments in the Complaint, the case set out in the statutory notice and evidence adduced by the Complainant during the trial. Once such rebuttal evidence is adduced and accepted by the court, having regard to all the circumstances of the case and the preponderance of probabilities, the evidential burden shifts back to the Complainant and, thereafter, the presumptions under Sections 118 and 139 of the Act will not again come to the Complainant's rescue."
(emphasis supplied) Digitally signed by POOJA POOJA YADAV YADAV Date:
2023.02.27 Page no. 31 of 48 19:52:21 +0530 CC No. 52348/2016 Amit Gadhia Vs. Vareshwar Kumar Mehta 11.3 In view of the proposition of law as discussed above, when applied to the facts of the present case, the signature having been admitted on the cheque in question raises the presumption u/s139 read with Sec118 of the Act that the cheque was issued in discharge of a legally recoverable debt or other liability in favour of the Complainant. The presumption having been raised against the Accused; it is for the Accused to rebut the same by raising a probable defence. A mere denial by the Accused of existence of any legally enforceable debt or liability would not suffice. 7 For doing so, the Accused had chosen to crossexamine the Complainant, CW1 and by leading Defence evidence whereby he himself also appeared as a witness in his defence as DW1.
11.4 The primary question to be looked into is as to whether the Accused has successfully raised any probable defence.
11.5 That the Complainant has been examined as CW1 on 16.01.2017 and 29.08.2018. A bare perusal of the testimony of the Complainant reveals that he has remained consistent throughout his deposition and his oral testimony is corroborated by the documentary evidence on record i.e., agreement of loan dt.
7 K.N. Beena vs Muniyappan And Another;(2001) 8 SCC 458 Digitally
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19.01.2015, Ex.CW1/A1 whereby the loan was
advanced by the Complainant and not even an iota of dispute has been raised by the Accused qua the execution of the same, only a suggestion has been given by the Ld.Counsel for Accused; that too pertains to the cheque in question being handed over as undated cheques.8 11.6 To depose in support of the complaint, what is required is that CW - 1 be able to depose consistently in respect of the material aspects of the transaction with the Accused. It is to be kept in mind that the testimony of CW - 1 qua the transaction is not mere ipse dixit but corroborated by the documentary evidence on record, i.e., agreement of loan, Ex.CW1/A 1 of which the defence has not raised even an iota of objection. When viewed this way as indicated herein above, the testimony of CW - 1 inspires the confidence of the court on material aspects of the Complaint.
11.7 The relevant excerpts of the Loan agreement dt.19.01.2015, EX.CW1/A1 read as under:
"(....) 1.That the second party has invested Rs. 35,00,000/ (Rs.THIRTY FIVE LAC ONLY) to the 8 Cross examination of CW1 dated 29.08.2018 (....) It is wrong to suggest that I have not mentioned the date of Cheques in agreement Ex.CW1/A1 as same were undated cheques given by the Accused to me.
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first party on 19.01.2015, which has been already received by the first party from the second party through (1) vide cheque bearing no. 829331 dt. 31.12.2014 for Rs. 10,00,000/ (Rs. TEN LAC ONLY) (2) vide cheque bearing no. 829332 dt. 09.01.2015 for Rs. 5,00,000/ (Rs.FIVE LAC ONLY) (3) vide cheque bearing no. 829333 for Rs. 5,00,000/(Rs.FIVE LAC ONLY), all drawn on AXIS Bank, Swasthya Vihar Branch Delhi110051 and Rs. 15 Lakh by way of cash. 2. That the first party undertakes to return the said amount of RS.35,00,000/ (Rs. THIRTY FIVE LAC ONLY) and return on investment of Rs.5,00,000/ on or before 01.05.2015.
3......
4. That the first party also signed a promissory notes which is duly filled and signed by the first party before the Marginal Witnesses in support of this agreement and also the first party issued six cheques of Rs. 35,00,000/ ( Rs.THIRTY FIVE LAC ONLY) i.e. vide (1) cheque bearing no. 442766 for Rs. 10,00,000/ (Ten Lac Only) (2) cheque bearing no. 442767 for Rs. 5,00,000/ (Five Lac Only) (3) cheque no. 442768 for Rs.
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5,00,000/(Five Lac Only) (4) Cheque no. 442769 for Rs. 5,00,000/(Five Lac Only), (5) cheque no. 442770 for Rs. 5,00,000/,(Five Lac Only) all drawn on AXIS BANK, SWASTHYA VIHAR BRANCH DELHI110092, duly signed by the first party in the name of second party, vide saving bank account no. 61059743580 which is in the name of VARESHWAR MEHTA (i.e. First Party) and also assures that the return on investment i.e. Rs. 5,00,000/ and Rs.Balance amount of Rs. 5,00,000/ shall be paid to the second party by the first party after the encashment of above said given five cheques."
11.8 In view of Sec91 of the Indian Evidence Act, any oral evidence in contrary to the agreement would not be admissible. However, the Accused has claimed that a fraud was committed by the Complainant upon him. To prove the same, the only alternative narrative which is attempted to be established by the Accused is that the Complainant had shown his willingness to invest a sum of Rs.35,00,000/ in the business of the Accused for an assured return of Rs.5,00,000/ over and above the sum invested. That as per the understanding between the parties, the Complainant was to receive Page no. 35 of 48 Digitally signed by POOJA POOJA Date:
YADAV YADAV 2023.02.27 19:53:33 +0530 CC No. 52348/2016 Amit Gadhia Vs. Vareshwar Kumar Mehta the amount of Rs.35,00,000/ from some third person and induced the Accused to open an account for receiving the same which would subsequently be withdrawn by the Complainant and shall be given to Accused in cash. Accordingly, the Accused at the instance of the Complainant opened the Bank account bearing no. 914010036443315 with Axis Bank, Swasthya Vihar, New Delhi in December, 2014. That during the period from 29.10.2014 till 15.01.2015, the Complainant himself made a deposit of Rs.2 lakh, 10 lakh, 5 lakh and 5 lakh in the above said newly opened account. The said amount of Rs. 2 lakh was deposited by the Complainant himself in cash, which is the minimum balance requirement for opening an account. The Complainant assured the Accused that he shall be giving the amount of Rs.35,00,000/ to the Accused in one go after withdrawing the same from the above said newly opened account, in cash. In order to withdraw the money, the Complainant took three cheques from the Accused. One selfcheque bearing no. 442761 in the sum of Rs.12,00,000/. Two more undated cheques bearing no. 442762 and 442763 in the sum of Rs. 5,00,000/ each. The cheques bearing no. 442761, 442762 and 442763 dated 31.12.2014, 09.01.2015 and 15.01.2015 respectively were encashed by the Complainant himself, only one cheque bearing Page no. 36 of 48 Digitally signed by POOJA POOJA YADAV YADAV Date:
2023.02.27 19:53:40 +0530 CC No. 52348/2016 Amit Gadhia Vs. Vareshwar Kumar Mehta no.442761 dated 31.12.2014 was issued as a self cheque and the remaining two were given as blank signed undated cheques. However, all three cheques were encashed by the Complainant himself after filling the particulars on the cheques and made endorsement of receiving, on the back side of the cheques. Handwriting in which the particulars were filled and endorsements were made are of a single person, i.e., the Complainant as he withdrew the same. To prove the same, the Accused had examined his bank witness as DW2 on 22.08.2019 who had brought with him the said three cheques, exhibited as Ex.DW2/1 (Colly) and account opening form of the Accused, identified as Mark A. 11.9 The said bank witness of the defence has not supported the version of the defence. The relevant excerpt may be reproduced herein below for reference;
"the signature of the Accused on the back side of the cheques has been put by the Accused at point A was put before the bank Official concerned. The phrase "withdrawal for property proceeds", general this kind of phrase at the back side of the cheque used to be written by the person who comes to collect the cash. It is clarified here that this kind of phrase can only be written by the persons who owns Page no. 37 of 48 Digitally signed by POOJA POOJA YADAV YADAV Date:
2023.02.27 19:53:47 +0530 CC No. 52348/2016 Amit Gadhia Vs. Vareshwar Kumar Mehta the bank account. If any other person comes to collect the cash , he will bring along his ID and if the amount is big, he will bring the authority letter from the person concerned who owns the bank account.
(....) XXX by the Sh.S.S.Gulati, ld.Counsel for the Complainant.
It is correct that the bank account opening form bears the signature of Vareshwar Mehta. It is correct that as per the cheques in question Vareshwar Mehta had encashed these cheques. It is correct that Complainant Amit Gadhia is not mentioned in Ex.DW2/1 and Mark DA."
11.10 The bank witness has clearly stated in his testimony that the cheques were encashed by the Accused and not the Complainant as alleged by the Accused. This negates the defence taken by the Accused. Moreover, the Accused himself has admitted in his statement u/s313 Cr.P.C read with Sec281 Cr.P.C that out of nine cheques, which were given to the Complainant, three cheques were bearing self and rest six cheques were blank signed cheques.9 9 Refer to Statement of Accused u/s313 Cr.P.Cread with Sec281 Cr.P.C dated 29.11.2018.
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11.11 That the Accused had then filed an application to
send these three cheques to FSL which was dismissed by the Ld. Predecessor of the Court vide order dated 24.09.2019, the said order was never challenged by the Accused.
11.12 Thereafter, the Accused himself entered the witness box to explain his defence as DW1 on 05.03.2020. In his examinationinchief, the Accused has deposed that the Complainant withdrew amount from his account by using selfcheques10, which is in contradiction to what has been otherwise alleged by the Accused that only one selfcheque was given. Further, the Accused himself admitted the execution of the said agreement, Ex.CW1/A1, the principal document which supports the case of the Complainant and fastens liability upon him. It was further stated by the Accused in his cross examination that " it is correct that the agreement Ex.CW1/A1 was signed with my free will and the cheque in question were also handed over by me to the Complainant with my consent ( Vol. the cheques and the agreement were signed by me because of trust that was built on prior transactions between me and the Complainant).11 This clearly reflects the admission by the Accused himself of the documentary evidence i.e., loan 10 Refer to Crossexamination of the Accused, DW1 dated 05.03.2020. 11 Ibid.
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agreement, Ex.CW1/A1, out of which the liability has arisen in the present matter. The narrative attempted to be established by the Accused suffers from inconsistencies.
11.13 Thereafter, one more witness, Ms. Neha Garg was examined as Court witness on 28.06.2022. She produced the photographs of the family wherein Accused was also present, clicked at Kanhatal at 6.11 pm. She deposed that the Accused was in Kanhatal with his wife, brother inlaw, the Court witness and their son from 02.01.2015 to 04.01.2015 and the booking on the Club Mahindra App was done with booking no.1749795 (HU2). Certificate of 65B, Indian Evidence Act was also filed alongwith the same. The said photographs were identified as Ex.Z. 11.14 In her crossexamination by the Ld.Counsel for Complainant, the witness had stated that the said photographs were taken at the time when they had reached Kanhatal and she does not remember as to when they had departed for the said trip as long time had elapsed by then.
11.15 The argument taken by the Accused in this regard is that the cheque bearing no. 442761 dt. 31.12.2014 could not have been encashed by the Accused at 12:00 pm as he was in Kanhatal that day by 6.11 pm and the journey takes at least 7 hours 30 minutes from Delhi to Kanhatal. It is pertinent to note that the Accused has relied upon Digitally Page no. 40 of 48 signed by POOJA POOJA YADAV YADAV Date:
2023.02.27 19:54:10 +0530 CC No. 52348/2016 Amit Gadhia Vs. Vareshwar Kumar Mehta the stamp affixed by the bank official to contend that the cheque was presented for encashment at 12:00 pm. However, minute perusal of the cheque along with the other two cheques reveal that, it is not the time that has been mentioned but the amount of the cheque for which the same has been presented.
11.16 For the sake of argument only without prejudicing the merits of the case, even if the version of the Accused is believed to be true, it does not stand to reason as to why the Accused entered into the loan agreement, ExCW1/A 1 which was executed on 19.01.2015, days after the cheques bearing no. 442761, 442762 and 442763 were allegedly withdrawn by the Complainant. No plausible explanation has come forth as to why the Accused signed the agreement without having received even a single penny from the Complainant, rather the Accused in his deposition dated 05.03.2020 has admitted that the signatures were put on the agreement, Ex.CW1/A1 with free will. The document out of which the liability has arisen has never been disputed by the Accused. 11.17 That while recording of statement of the Accused u/s 313 Cr.P.C read with Sec281 Cr.PC on 29.11.2018, the Accused has admitted that the Complainant transferred approximately 20 lakhs in his account and the same has not been repaid by the Accused to the Complainant.
Digitally signed by POOJA POOJA YADAV Page no. 41 of 48 YADAV Date:
2023.02.27 19:54:17 +0530 CC No. 52348/2016 Amit Gadhia Vs. Vareshwar Kumar Mehta 11.18 One more line of argument has been taken by the Accused that the cheque in question was given to the Complainant as undated cheques and the same is corroborated by the agreement, Ex.CW1/A1. It is a trite law that once the signature on the cheque has been admitted or remains undisputed, the presumptions raised in the favour of the Complainant remain in force until rebutted.12 Also, the law is well established that mere filling of the particulars on the cheque by some other person would not invalidate the same if the cheque is duly signed by the drawer.13 11.19 In view of the above, the Accused has failed to prove his defence by his oral testimony or even otherwise. The Accused has not produced any document to show cancellation of transaction as alleged by him in his plea of defence taken u/s251 Cr.P.C. It is relevant to note here that the Accused did not even instruct his Bank to stop the payment in order to cancel the transaction as alleged as the reason for dishonour of cheque is "Funds Insufficient" and not "payment stopped by drawer" .
Moreover, nothing has come forth to prove the fraud allegedly committed upon him by the Complainant. The version attempted to be established by the Accused suffers from inconsistencies and contradictions as discussed above. In such circumstances, where the loan 12 Triyambak S Hegde v. Sripad, 2021 SCC OnLine SC 788 13 Bir Singh v. Mukesh Kumar (2019) 4 SCC 197 Digitally signed by Page no. 42 of 48 POOJA POOJA YADAV YADAV Date:
2023.02.27 19:54:25 +0530 CC No. 52348/2016 Amit Gadhia Vs. Vareshwar Kumar Mehta agreement, Ex.CW1/A1 remains undisputed and having been signed by the Accused with his free will, the loan agreement, Ex.CW1/A1 shall prevail over oral testimony of the Accused.
11.20 That although only in CC No. 47589/16, the Accused has stated in his plea of defence, that initially he did not reply to the legal demand notice sent by the Complainant but later sent a reply through his Counsel on 14.09.2015, however, the Accused chose not to bring the same on record in evidence in order to prove his narrative; the said alleged reply never saw the light of day. This too would not be out of order to say that the Accused did not even take any steps to take back his cheques from the Complainant if no amount as promised was ever received by him. He ought to have had acted reasonably to protect his interest from a creditor in possession of allegedly nine signed cheques of the Accused especially in view of the alleged fact that the Complainant has never paid even a single penny to the Accused as promised. It begs the question as to why the Accused failed to send any legal notice to the Complainant seeking his cheques back, instructing his bank to stop payment of the said cheques or to file any police complaint regarding the same well in time. No proof to this effect has been furnished by the Accused.
Merely a letter dated 18.08.2015 was written to the Page no. 43 of 48 Digitally signed by POOJA POOJA YADAV YADAV Date:
2023.02.27 19:54:32 +0530 CC No. 52348/2016 Amit Gadhia Vs. Vareshwar Kumar Mehta Bank seeking details of the transaction, by the Accused that too after filing of one of the connected cases and also has not been proved by the Accused during the Course of the trial. No connection or linkage whatsoever has been established between the documents relied upon by the defence and the documents annexed by the Complainant in support of his case. Ultimately, far from establishing his line of defence taken throughout the trial, the Accused has not even been able to shake the case of the Complainant or cast any reasonable doubt upon it. When the transaction itself is well documented and has also not been denied by the Accused, it would be quite fallacious to hold that the case of the Complainant would fall only on the ground of mere denial by the Accused of ever receiving money as per the loan agreement, Ex.CW1/A1. The defence has failed to satisfy the test of preponderance of probabilities and the presumption raised against the Accused remains unrebutted.
11.21 The upshot of the above discussion is that the Accused has not been able to rebut the presumption raised against him. Hence, the said ingredient stands fulfilled as against the Accused.
(b) Second Ingredient: that the cheque has been presented to the bank within a period of three months Page no. 44 of 48 Digitally signed by POOJA POOJA YADAV YADAV Date:
2023.02.27 19:54:38 +0530 CC No. 52348/2016 Amit Gadhia Vs. Vareshwar Kumar Mehta from the date on which it is drawn or within the period of its validity, whichever is earlier;
11.22 This ingredient stands satisfied on a bare perusal of the cheque in question Ex. CW1/A which bears date of 16.07.2015 and the return memo Ex. CW1/B which bears the date of 16.07.2015. The defence has led no evidence to controvert the same and hence, this ingredient stands fulfilled as against the Accused.
(c) Third Ingredient: that the cheque has been returned by the drawee bank unpaid, either for the reason that 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;
11.23 The bank return memo Ex. CW1/B dated 16.07.2015 on record states that the cheque in question has been returned dishonoured for the reason "Funds Insufficient". The defence has led no evidence to controvert the same and hence, this ingredient also stands satisfied as against the Accused.
(d) Fourth Ingredient: that the payee or the holder in due course of the cheque has made a demand for the payment of the said amount of money by giving a notice Digitally Page no. 45 of 48 POOJA signed by POOJA YADAV YADAV Date:
2023.02.27 19:54:45 +0530 CC No. 52348/2016 Amit Gadhia Vs. Vareshwar Kumar Mehta in writing, to the drawer of the cheque, within 30 days of the receipt of information from the bank regarding the return of the cheque as unpaid;
11.24 That it is a trite law that in order to maintain a complaint u/s138 NI Act, serving of legal demand notice to the Accused before filing the case is imperative. As regards the service of legal demand notice, the Complainant has sent the same, Ex. CW1/C to the Accused. The original postal receipts dated 14.08.2015 & tracking reports in respect of the same are already on record as Ex. CW1/D and Ex. CW1/E respectively.
11.25 That the Accused has in his notice of accusation u/s 251 Cr.P.C has admitted receiving the legal demand notice. However, while recording of the statement of Accused u/s 313 Cr.P.C read with Sec281 Cr.P.C, the Accused has stated that he does not remember whether he had received the legal demand notice or not. Further, minute perusal of the record reveals that the address mentioned on the legal demand notice is the same as furnished by the Accused while recording of his statement u/s313 Cr.P.C read with sec281Cr.P.C and also while deposing as defence witness, DW1 on 05.03.2020.
11.26 That section 27 of the General Clauses Act,1897 provides that service of any document sent by post shall Page no. 46 of 48 Digitally signed by POOJA POOJA YADAV YADAV Date:
2023.02.27 19:54:53 +0530 CC No. 52348/2016 Amit Gadhia Vs. Vareshwar Kumar Mehta be deemed to be effected by properly addressing, prepaying and posting by registered post, a letter containing the document unless the contrary is proved. A like presumption is also provided under section 114 Indian Evidence Act, 1872 which when applied to communication sent by Post, enables the court to presume that in the common course of natural events, the communication would have been delivered at the address of the addressee.
11.27 That a bare denial by the Accused in his examination under Sec313 Cr.P.C read with Sec281 Cr.P.C would not assume the character of defence evidence as held in V.S Yadav v. Reena14. Hence, the Accused has not been able to rebut the presumption of service of legal demand notice.
The said ingredient has not been disputed by the defence at any point during the trial. Resultantly, the said ingredient stands fulfilled as against the Accused.
(e) Fifth Ingredient: that the drawer of such cheque fails to make the payment of the said amount of money to the payee or holder in due course within 15 days of receipt of the said notice.
11.28 In the instant case, the Accused has admitted having received the legal notice in his notice u/s251 Cr.P.C however, he has stated in his examination under Sec313 Cr.P.C read with Sec281 Cr.P.C that he does not 14 CRL. A. No. 1136 Of 2010 Page no. 47 of 48 Digitally signed by POOJA POOJA YADAV YADAV Date:
2023.02.27 19:54:59 +0530 CC No. 52348/2016 Amit Gadhia Vs. Vareshwar Kumar Mehta remember whether he had received the legal demand notice or not. It is an admitted position that the Accused has failed to pay the amount due under the cheque in question, on the ground that he does not owe any legally enforceable debt or liability towards the Complainant. Hence, this ingredient stands fulfilled as against the Accused.
DECISION
12. In view of the abovediscussion, considering all the facts and circumstances, material/ evidence on record, as all the ingredients of the offence have been cumulatively satisfied against the Accused, the Accused, Vareshwar Mehta is hereby convicted of the offence u/s 138 of the Negotiable Instruments Act, 1881. Let the convict be heard separately on the quantum of sentence.
ORDER: CONVICTED A copy of this judgment be given free of cost to the convict.
Announced in open court in the presence of the Accused on 27.02.2023.
(This judgment contains /fortyeight signed pages) Digitally signed POOJA by POOJA YADAV YADAV 19:55:09 +0530 Date: 2023.02.27 (Pooja Yadav) MM/ NI Act(East) /KKD Courts/Delhi 27.02.2023 Page no. 48 of 48