Delhi District Court
Fun N Foods Private Limited vs Manoj Kumar on 22 March, 2024
IN THE COURT OF MS. KAVITA BIST: MM (N.I.ACT) DIGITAL
COURT / EAST DISTRICT, KKD COURTS: NEW DELHI
FUN N FOODS PRIVATE LIMITED Vs. MANOJ KUMAR
CC NI ACT 484/2021
u/s 138 Negotiable Instruments Act, 1881
1. CIS number : 484/2021
2. Name of the Complainant : Fun N Foods Private Limited
through its AR Sh. Rajesh Kumar
Choudhary
S/o Sh. Ajeet Kumar Choudhary
Office at: S557, Hira Complex,
Third Floor, School Block,
Shakarpur, New Delhi110092
3. Name of the accused, : Manoj Kumar
parentage & residential address S/o Sh. Dayachand Vaid
R/o A96/201, Shauryapuram,
Lal Kuwan Ghaziabad, U.P
4. Offence complained of or : u/s 138 Negotiable Instruments
proved Act, 1881
5. Plea of the accused : Pleaded not guilty and claimed
trial.
6. Final Judgement / order : Convicted
7. Date of Judgement / order : 22.03.2024
Date of Institution : 24.02.2021
Date of Reserving Judgement / Order : 23.02.2024
Date of Pronouncement of Judgement / Order : 22.03.2024
Digitally
signed by
KAVITA
KAVITA BIST
BIST Date:
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JUDGEMENT
1.) By way of the present Judgement, this court shall dispose off the present complaint filed by FUN N FOODS PRIVATE LIMITED through its AR Sh. Rajesh Kumar Choudhary (herein after referred to as 'Complainant') against Manoj Kumar (herein after referred to as 'accused') u/s 138 Negotiable Instruments Act, 1881 r/w section 142 Negotiable Instruments Act, 1881 (herein after referred to as "N.I. Act" in short).
Factual Matrix
2.) The brief facts as alleged by the complainant in the complaint are that the complainant company is a non banking finance company duly incorporated under the provisions of the Companies Act, 1956 and the accused in April 2018 had contacted the complainant company and showed his interest for availing the loan facility from the complainant company and after being satisfied and agreeing to the terms and conditions of loan agreement had availed a loan of Rs. 11,80,000/ by signing and executing loan agreement bearing no. 124219, dated 25.04.2018 and accused was under obligation to pay the said loan in 241 monthly EMI, however, accused failed to adhere the terms and conditions of said agreement and had defaulted in paying EMIs, upon which the complainant had issued a loan recall notice dated 19.11.2020 and recalled the entire loan amount with representation charges, compensation charges etc and in discharge of his legally enforceable liability, accused had issued a cheque bearing no. 884709 (herein after referred to as 'cheque in question') dated 11.12.2020, amounting to Rs. 17,36,107/ drawn on Punjab National Bank, Ghaziabad, Digitally U.P. KAVITA signed by KAVITA BIST Date:
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When the Complainant presented the said cheque, (herein after referred to as 'cheque in question') through his banker HDFC Bank, Mayur Vihar Phase II, Delhi, the same was returned unpaid by the banker of the accused vide returning memo dated 14.12.2020 with the remarks "Funds Insufficient".
The Complainant thereafter issued a legal demand notice on 01.01.2021 through Counsel calling upon the accused to pay the said cheque amount within a period of 15 days from receipt thereof. The said notice was duly served upon the accused and the accused failed to pay the aforesaid cheque amount within the statutory period.
Hence, the present complaint u/s 138 N.I.Act was filed on 24.02.2021 by the complainant, praying for the accused to be summoned, tried and punished for commission of the offence u/s 138 N.I.Act. The complainant has averred that the present complaint is within the period of limitation and falls within the territorial limit of this Court's jurisdiction; thus, being tenable at law.
Proceedings before the Court
3.) Presummoning evidence of the complainant: To prove primafacie case, the complainant led presummoning evidence by way of affidavit, exhibit CW1/A, however, as the court was working digitally at that time so the tendering was dispensed with.
4.) Documentary Evidence of the complainant: To prove his primafacie case, the complainant has relied upon the following documents:
a). Board Resolution dated 29.01.2021 in favour of AR Sh. Rajesh Kumar Digitally Choudhary exhibited as Ex. CW1/1. KAVITA signed by KAVITA BIST Date:
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b) Copy of loan agreement dated 25.04.2018 exhibited as Ex CW1/2 (OSR).
c) Statement of loan account of the accused maintained in the books of account of complainant company dated 02.02.2021 exhibited as Ex.
CW1/3.
d) Loan recall notice dated 19.11.2020 exhibited as Ex. CW1/4 (colly.) e.) Original cheque bearing no. 884709 dated 11.12.2020 exhibited as Ex.CW1/5.
f.) Original returning memo dated 14.12.2020 exhibited as Ex. CW1/6.
g.) Bank account statement of complainant from the period of 11.12.2020 to 14.12.2020 (showing dishonouring of the cheque) exhibited as Ex. CW1/7.
h.) Legal demand notice dated 01.01.2021 exhibited as Ex. CW1/8.
i.) Postal receipts exhibited as Ex. CW1/9A and Ex. CW1/9B.
j.) Tracking report for the legal demand notice exhibited as Ex. CW1/10.
k.) Certificate u/s 65B of Indian Evidence Act exhibited as Ex. CW1/11.
l.) Bank account statement of complainant from the period of 04.05.2018 to 25.06.2018 exhibited as Ex. CW1/12 (colly)
5.) After pursuing the complaint and hearing the argument of the Complainant on the point of summoning of the accused, primafacie it appeared that the offence u/s 138 N.I.Act has been committed. Hence, cognizance of the offence u/s 138 N.I.Act was taken on 20.03.2021.
Digitally signed by KAVITA BIST KAVITA Date:
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6.) Framing of notice and plea of defence: Notice u/s 251 Cr.P.C was framed against the accused on 17.08.2021 to which he pleaded not guilty and claimed trial. The plea of defence of the accused was recorded where he admitted his signature on the cheque in question, however, he has stated that he has not filled the body of cheque in question and also stated that he had received the legal demand notice issued by the complainant and duly replied the same. It was further stated by the accused that he had given the cheque in question to one builder namely Anil Jain of Shauryapuram STPL as he had to get loan from bank for purchasing a property from Shauryapuram and thereafter, he got a loan of Rs. 23 lakh from Canara Bank and he had also stated that he does not know the complainant and also not aware as to how the cheque in question came into the possession of the complainant and he has denied the liability towards the cheque in question.
7.) Evidence of the complainant: After the framing of notice, application u/s 145(2) N.I. Act was allowed orally by the Ld. Predecessor and hence, the case was tried as a summons case and accused was granted permission to cross examine the complainant. Thereafter, the complainant was examined as CW1, adopting the presummoning evidence as post summoning evidence and was cross examined and discharged. No other witnesses were examined by the complainant. Thereafter, complainant evidence was closed, and the matter was put up for statement of accused u/s 313 r/w Section 281 Cr.P.C.
8.) Statement of the accused: Statement of the accused was recorded u/s 313 r/w sections 281 Cr.P.C on 05.02.2022, wherein all the incriminating Digitally signed by KAVITA KAVITA BIST Date: BIST 2024.03.22 15:33:27 +0530 CC NI ACT 484/2021 FUN N FOODS PRIVATE LIMITED Vs. MANOJ KUMAR Page No. 5/31 circumstances appearing in evidence against the accused were put to him to which, he again reiterated that he had given the cheque in question to Shauryapuram as he was in need of home loan and Shauryapuram got sanctioned a loan of Rs. 23 lakh from Canara Bank for him and the same was transferred in the bank account of builder and thereafter, he got the possession of home and he has been paying the monthly installments regularly to Canara Bank since last three years and he has further stated that he does not know the complainant and also unaware as to how the cheque in question came into the posession of the complainant and denied the liability towards the complainant. The accused also stated that he wants to lead defence evidence and the present case is a false and fabricated case.
9.) Defence evidence: The accused entered the witness box as DW1. Thereafter, a separate statement of the accused closing defence evidence was recorded and defence evidence was closed and then the matter was fixed for final arguments.
10.) Final Arguments: Final arguments were advanced by both sides. I have heard the submission of Ld. Counsel for the complainant as well as the accused. I have also perused the record.
11.) Before deciding the present complaint case u/s 138 of N.I Act, 1881, the following legal requirements must be satisfied from the averments in the complaint as well as the evidence of complainant.
a.) That a person has drawn a cheque, on an account maintained by him with the banker for payment of any amount of money in other person from out of that account for the discharge, in whole or in part, of any legally Digitally enforceable debt or other liability; signed by KAVITA KAVITA BIST BIST Date:
2024.03.22 15:33:32 +0530 CC NI ACT 484/2021 FUN N FOODS PRIVATE LIMITED Vs. MANOJ KUMAR Page No. 6/31 b.) That the cheque has been presented to the bank with in a period of three months from the date on which it is drawn or within the period of its validity, whichever is earlier;
c.) That the cheque has been returned by the drawee bank unpaid, for the reason that the amount of money standing to be credit of that account is insufficient to honor the cheque or that it exceeds the amount arranged to be paid from that account by agreement made with that bank;
d.) That the payee or holder in due course has made a demand for payment of the said amount of money by giving the notice in writing to the drawer of the cheque within 30 days of receipt of information from the bank regarding the return of the cheque as unpaid;
e.) That the drawer of the cheque fails to make the payment of the said amount of money to the payee or holder in due course within 15 days of the receipt of the said notice;
The aforesaid legal requirements are cumulative in nature, i.e only when all of the aforementioned ingredients are duly proved is the drawer of the cheque deemed to have committed an offence u/s 138 of N.I Act. The provision of section 138 N.I is buttressed by section 139 and section 118(a) of the N.I. Act. Section 139 of the Act provides that the court shall presume, that the holder of a cheque received the cheque for the discharge, wholly or in part of any debt or other liability. Section 118(a) of the Act provides interalia 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, Digitally signed by KAVITA KAVITA BIST BIST Date:
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12.) It is a well settled principle of criminal jurisprudence that a criminal trial proceeds on the presumption of innocent of the accused i.e an accused is presumed to be innocenct unless proved guilty. Thus, normally the initial burden to prove is on the complainant/prosecution to prove the guilt of the accused. Also, the standard of prove is beyond reasonable doubt. However, in offences u/s 138 of the N.I Act, there is a reverse onus clause contained in section 118(a) and section 139 of the N.I Act. The presumption u/s 139 and section 118(a) of the N.I Act mandate the court to draw them, when a given set of facts are shown to exist. The same is evident by the peremptory language "Shall presume" used. However, the said presumptions are rebuttable in nature, i.e it is open for the defence to disprove the same by establishing facts to the contrary.
In the case of Hiten P. Dayal Vs. Bratindranath Bannerjee (2001) 6 SCC 16, the Hon'ble Supreme Court had occasion to examine the confines of the presumptions u/s 139 of the Act wherein, it held as follows:
"because both section 138 and 139 require that the court "shall presume" the liability of the drawer of the cheques for the amounts for which the cheques are drawn, as noted in State of Madras Vs. A. Vaidyanatha Iyer AIR 1958 SC 61, it is obligatory on the court to raise this presumption in every case where the factual basis for the raising of the presumption had been established. It introduces an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to Digitally signed by KAVITA BIST KAVITA Date:
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the accused. The obligation on the prosecution may be discharged with the help of presumptions of law or facts unless the accused adduces the evidence showing the reasonable possibility of the non existence of the presumed fact. Therefore, the rebuttal does not have to be conclusive establish but such evidence must be adduced before the court in support of the defence that court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of reasonability being that of 'prudent man'"
13.) It is a settled proposition of law that the standard of proof which is required from the accused to rebut the statutory presumption u/s 118(a) r/w section 139 of the N.I Act is preponderance of probabilities. The accused is not required to prove his case beyond reasonable doubt. This onus on the accused can be discharged from the materials available on record and from the circumstantial evidences. At this point, the Hon'ble Supreme Court in M.S Narayan Menon Vs. State of Kerala (2006) 6 SCC 39 has interalia held the following:
"The standard of proof evidently is preponderance of probabilities. Inference of preponderance of probabilities can be drawn not only from materials on record but also by reference to the circumstances upon which he relies."
14.) It is not always mandatory for the accused to examine its own witness in order to rebut the said statutory presumption. At this point, reliance may be placed on the decision of the Hon'ble Supreme Court in the case of Digitally signed by KAVITA KAVITA BIST BIST Date:
2024.03.22 15:33:48 +0530 CC NI ACT 484/2021 FUN N FOODS PRIVATE LIMITED Vs. MANOJ KUMAR Page No. 9/31 Krishna Janardhan Bhat Vs. Dattatraya G. Hegde AIR 2008 SC 1325, wherein the Hon'ble Court has categorically held the following:
"Accused for discharging the burden of proof placed upon him under a statute need not examine himself. He may discharge his burden on the basis of the materials already brought on record. As accused has a constitutional right to remain silent. Standard of proof on the part of an accused and that of the prosecution in a criminal case is different."
15.) With regard to the factors taken into account for rebutting the presumption u/s 139 r/w Section 118(a) of the Act, the Judgment of Hon'ble Delhi High Court in V.S Yadav Vs. Reena, 172 (2010) DLT 561, assumes importance, wherein, it was held that:
"Mere pleading not guilty and stating that the cheques were issued as security, would not amount to rebutting the presumption raised u/s 139 of N.I Act. The accused, by cogent evidence, has to prove the circumstance under which cheques were issued."
16.) Now, I shall proceed with the legal ingredients one by one and give my finding on whether the evidence on record satisfies the legal ingredients in question or not: a.) "That a person has drawn a cheque, on an account maintained by him with the banker for payment of any amount of money in other person from out of that account for the discharge, in whole or in part, of any legally enforceable debt or other liability." Digitally signed by KAVITA KAVITA BIST BIST Date:
2024.03.22 15:33:53 +0530 CC NI ACT 484/2021 FUN N FOODS PRIVATE LIMITED Vs. MANOJ KUMAR Page No. 10/31 16.1) This condition pertains to the issuance of the cheque itself. It is pertinent to note that the accused in his notice of accusation as well as in his statement recorded u/s 313 r/w section 281 of Cr.P.C admitted his signature on the cheque in question. Further, the cheque has been drawn on the account of accused. This leads to drawing of an inference u/s 139 r/w section 118 of the Act, that the cheque was issued in discharge of a legally recoverable debt or other liability.
16.2) The presumption, having been raised against the accused, it falls upon him to rebut it. The accused has taken a defence that the cheque in question was given to one builder Anil Jain, Shauryapuram STPL as he was in need of home loan and a loan of Rs. 23 lakh was sanctioned from Canara Bank, by Shauryapuram and after that he got the possession of home and he has been paying the monthly installments from last 3 years to Canara Bank and he further stated that he does not know the complainant and he is not aware as to how the cheque in question came into the possession of the complainant. It was also stated by the accused that he had received the legal demand notice issued by the complainant. The accused had cross examined CW1 in his defence.
16.3) The standard of proof for rebuttal is on preponderance of probabilities. As held by the Hon'ble Supreme Court in decision as K.N Beena Vs. Muniyappan and Anr. (2001) 8 SCC 458, in order to rebut the presumption, mere denial by the accused will not suffice. The accused must prove by leading cogent evidence that there was no debt or liability.
16.4) Major defence led by the Ld. Counsel for accused is that the cheque in question was given to one builder Anil Jain, Shauryapuram STPL by the Digitally signed by KAVITA BIST KAVITA Date:
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accused, as he was in need of home loan and a loan of Rs. 23 lakh was sanctioned from Canara Bank, by Shauryapuram and after that accused got the possession of home and accused has been paying the monthly installments from last 3 years to Canara Bank and It is further stated by the Ld. Counsel for the accused that the accused does not know the complainant and accused is not aware as to how the cheque in question came into the possession of the complainant. It was also stated by the Ld. Counsel for the accused that the accused had received the legal demand notice issued by the complainant. In the present case, the onus to prove that accused has not issued the cheque in question for any legal liability in favour of the complainant primarily lied on the accused. Section 103 of Indian Evidence Act, 1872, enunciates that the person who asserts a fact must prove the same unless the law otherwise provides Now, I shall deal with all the defences separately:
The body of cheque in question is not filled by the accused.
The accused in his notice of accusation as well as in his statement recorded u/s 313 r/w section 281 Cr.P.C has stated that he has not filled the body of cheque in question, hence, there is a material alteration in the cheque in question. So far as the defence of issuance of blank signed cheque is concerned, the same is untenable, considering the case of "Bir Singh Vs. Mukesh Kumar, 2019 (4) SCC 197 wherein the Hon'ble Supreme Court" observed and held:
"A meaningful reading of the provision of the Negotiable Instruments Act including, in particular, section 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes Digitally signed by KAVITA CC NI ACT 484/2021 KAVITA FUN N FOODS PRIVATE LIMITED Vs. MANOJ KUMAR BIST Page No. 12/31 BIST Date:
2024.03.22 15:34:05 +0530 it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. It is cheque is otherwise valid, the penal provisions of section 138 would be attracted. If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence."
It is also pertinent to refer Oriental Bank of Commerce Vs. Prabodh Kumar Tewari Crl. A.No. 1260/2022, wherein the Hon'ble Supreme Court held:
"For such a determination, the fact that the details of the cheque have been filled up not by the drawer, but by some other person would be immaterial. The presumption which arises of the signing of the cheque can not be rebutted merely by the report of a handwriting expert. Even if the details in the cheque have not been filled by drawer but by another person, this is not relevant to the defence whether cheque was issued towards payment of a debt or in discharge of a liability."
Digitally signed by KAVITA KAVITA BIST BIST Date:
2024.03.22 15:34:11 +0530 CC NI ACT 484/2021 FUN N FOODS PRIVATE LIMITED Vs. MANOJ KUMAR Page No. 13/31 In this context, it is necessary to take note of the judgment of Hon'ble Delhi High Court in Ravi Chopra Vs. State and Anr. (2008) 102 DRJ 147, wherein the Hon'ble Court held:
" A collective reading of the abovesaid provision shows that even under the scheme of the N.I. Act it is possible for the drawer of a cheque to give a blank cheque signed by him to the payee and consent either impliedly or expressly to the said cheque being filled up as a subsequent point in time and presented for payment by the drawee. There is no provision in the N.I. Act which either defines the difference in hand writing or the ink pertaining to the material particulars filled up in comparison with the signatures thereon as constituting a 'material alteration' for the purposes of section 87 N.I. Act. What however, is essential is that the cheque must have been signed by the drawer. If the signature is altered or does not tally with the normal signature of the maker, that would be a material alteration. Therefore, as long as the cheque has been signed by the drawer, the fact that the ink in which the name and figures are written or the date is filled up is different from the ink of the signature is not a material alteration for the purposes of section 87 N.I. Act."
Therefore, the plea that the details of the cheque in question were not filled by the accused is untenable in light of the above mentioned judgments.
Cheque in question was given to builder The main defence which was taken by the accused that he was in need of home loan and he had purchased a flat from one builder Anil Jain of Digitally signed by KAVITA BIST CC NI ACT 484/2021 KAVITA FUN N FOODS PRIVATE LIMITED Vs. MANOJ KUMAR Date: Page No. 14/31 BIST 2024.03.22 15:34:17 +0530 Shauryapuram STPL and the cheque in question was given to him for home loan and a home loan of Rs. 23 lakh was duly sanctioned from Canara Bank by Shauryapuram STPL.
In this regard it is important to draw attention on the cross examination of accused, wherein he had admitted that he had purchased a flat from Shauryapuram and the total sale consideration of the said flat was Rs. 32,30,000/. He has also admitted that a home loan of Rs. 23 lakh was taken from the Canara Bank for the said flat and there was a short fall of around Rs. 10 lakh for purchase of said flat despite taking loan from the Canara Bank, and he has further stated that short fall amount of Rs. 10 lakh was paid by him, however, he had failed to divulge any details as to how much contribution he had made regarding that short fall.
It is also pertinent to mention here that the accused had failed to examine the builder i.e Anil Jain to substantiate his claim that the cheque in question was given to him and he has also failed to examine any other witness who can depose in his favour regarding the handing over of cheque in question to Anil Jail. Further, as noted by the Hon'ble Supreme Court of India in M/s Kumar Exports Case Vs. M/s Sharma Carpets Crl. A.No. 2045/2008, the circumstantial evidence has to be seen from the point of reasonable/prudent man. Hence, when the cheque in question was given to builder namely Anil Jain; why did the accused did not take any legal action against the complainant and Anil Jain for misuse of cheque in question even after receiving legal demand notice and did not even bother to reply the same.
Digitally signed by KAVITA KAVITA BIST BIST Date:
2024.03.22 15:34:22 +0530 CC NI ACT 484/2021 FUN N FOODS PRIVATE LIMITED Vs. MANOJ KUMAR Page No. 15/31 After considering the abovesaid findings, the court is of considered view that accused has failed to prove that the cheque in question was given to builder and the defence of accused is a bare averment, unsubstantiated by any cogent evidence.
No relation with the complainant The accused in his notice of accusation has stated that he does not know the complainant and he is not aware as to how the cheque in question has came into the posession of the complainant.
In this regard, it is important to draw attention on the loan agreement Ex. CW1/2 executed between the complainant and accused filed by the complainant in the present case, wherein it is evident that a loan of Rs. 11,80,000/ was taken by the accused from the complainant company on 25.04.2018. The said loan agreement bears the signature of accused and the same is not disputed by the accused, however, Ld. Counsel for the accused has taken a plea that the complainant company has misused the home loan application made by the accused at the time of applying home loan. He has further stated that the builder namely Anil Jain had taken the signature of accused on many blank documents and the loan agreement is one of that document and the loan agreement was made afterwards. Ld. Counsel for the accused has also pointed out that as per the loan agreement filed by the complainant, the loan was regarding some property and he has also pointed out the para 6 of recall notice Ex. CW1/4 issued by the complainant company, wherein the complainant company has mentioned that in the event of failure to make the payment of loan amount by the accused within 15 days of receipt of notice, the complainant company shall take suitable Digitally signed by KAVITA KAVITA BIST BIST Date:
2024.03.22 CC NI ACT 484/2021 FUN N FOODS PRIVATE LIMITED Vs. MANOJ KUMAR Page No. 16/31 15:34:28 +0530 recourse as per the agreement including, but not limited to, repossession and sale of the aforesaid flat and initiating legal proceedings including the arbitration. Ld. counsel for the accused has also pointed out that special power of attorney which is a part of Ex. CW1/2 is regarding sale of property and the same is not properly executed and he has also pointed out on the affidavitcumundertaking that is also a part of Ex. CW1/2, wherein the accused has agreed that the loan shall be secured by a first charge and mortgage of the property described in the schedule and he has further pointed out on the tripartite agreement which is also a part of Ex. CW1/2, however, the same is blank and bearing the signature of accused only.
Although, the said special power of attorney and affidavitcumundertaking is regarding some property, however, as per the schedule D of the loan agreement the nature of loan is clearly mentioned as "personal" and the tripartite agreement is blank and bearing the signature of accused only and no details of any kind is filled therein and CW1 has also stated that in his testimony that word "N.A." was written with pencil on top of that document and the same was not the part of loan agreement and can not be relied as such. It is also pertinent to mention here that as per the affidavit cumundertaking the accused has agreed that loan shall be secured by a first charge and mortgage of the property described in the schedule, however, no details of property has been described in any schedule including the schedule of the said loan agreement. CW1 has also stated during his testimony that formats of different loans are same.
On the bare perusal of the loan agreement Ex. CW1/2, it is evident that the said loan agreement is related to some property, however, as per schedule D of loan agreement the nature of loan is clearly mentioned as "personal".
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Even if we consider SPA, affidavit cum undertaking and tripartite agreement, the same also talks about some property, however, no details of property are mentioned therein. Moreover, the AR of the complainant company has deposed that the tripartite agreement was not the part of loan agreement. Ld. Counsel for the accused has stated that the accused had signed various blank document provided by builder. In this regard, this court is of view that firstly it is highly unreasonable that the prudent man specifically when he is a Government employee would sign on a blank document and secondly, except the tripartite agreement all document are duly filled and the name of the complainant company is specifically mentioned therein. Moreover, the alleged loan has been duly disbursed by the complainant company to accused which shall be dealt in details later on. In that case, the accused can not evade the liability by merely taking a defence that the nature of loan is ambigous just because the said loan agreement is related to some property when no details of property is mentioned therein.
Even if we consider that the complainant company has misused the blank signed document of accused given to Shauryapuram STPL, then why no reply of recall notice was ever sent by the accused to the complainant company. The accused has never filed any complaint against the complainant company and builder for misuse of the blank signed documents which seems unreasonable from the sight of a prudent man.
After considering the abovesaid findings, the court is of considered view that the alleged loan was personal in nature as per the schedule D of loan agreement and merely because an affidavitcumundertaking was executed by the accused in favour of complainant company securing the said loan by Digitally signed by KAVITA BIST CC NI ACT 484/2021 KAVITA FUN N FOODS PRIVATE LIMITED Vs. MANOJ KUMAR Date: Page No. 18/31 BIST 2024.03.22 15:34:41 +0530 mortgage of the property described in the schedule does not change the nature of alleged loan specifically when no details of property is mentioned in any schedule.
As such, considering the loan agreement Ex. CW1/2 filed by the complainant company and also considering that the signature on the said agreement is not disputed by the accused; failure to reply of recall notice and failure to file any complaint against the complainant company and the builder even after receiving the legal demand notice; the defence taken by the accused that the accused does not know the complainant and loan agreement was made afterwards and the same was made by misusing the home loan application made by the accused to the builder is of no force.
Non disbursement of loan The accused has stated during his testimony that he had not taken even a single penny from the complainant company and the Ld. Counsel for the accused has also taken a plea that no mode of disbursement of loan is mentioned either in complaint or in evidence affidavit of the complainant company and the same is admitted by the CW1 i.e AR of the complainant, however, he has stated that a copy of internal ledger has been filed by the complainant company which shows the disbursement of loan to the accused.
In this regard, it is important to draw attention firstly on Ex. CW1/3 i.e the computer generate copy of ledger account maintained by the complainant company against the accused which cleary shows the disbursement of alleged loan to the accused on three different dates and the same is supported by certificate u/s 65B of Indian Evidence Act Ex. CW1/11, Digitally signed by KAVITA KAVITA BIST Date:
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secondly, on the bank account statement of complainant Ex. CW1/12 filed by complainant, wherein on 26.04.2018 an amount of Rs. 2,50,000/ was transferred to one person namely Nisha Kushwaha and further on 27.04.2018 an amount of Rs. 2,50,000/ was transferred to one person namely Navin Bharti and further on 04.05.2018 an amount of Rs.
2,90,000/ was again transferred to one person namely Navin Bharti and further on 25.06.2018 an amount of Rs. 3,90,000/ was transferred into the bank account of accused.
As far as disbursement of loan to third persons namely Nisha Kushwaha and Navin Bharti is concerned, the Ld. Counsel for the accused has contented that the complainant company had not specified that the said loan was disburse to those persons upon instruction of the accused and he has also contented that no document has been filed by the complainant which shows that any instruction was given by the accused to the complainant to disbursed the amount to Nisha Kushwaha or Navin Bharti. In this regard, Ld. Counsel for the complainant has rightly pointed at Article no. 2.5 of the loan agreement Ex. CW1/2, wherein it is mentioned clearly that the company may disburse the loan directly to the builder or to the developer or to the society or to the vendor or in favour of any third party or person as may be directed by the borrower in the forms specified by the company or to the borrower himself at the sole discretionary of the company.
It is nowhere mentioned in that article that the said instruction should be in writing by the borrower. Ld. Counsel for the complainant has relied upon bank account statement of accused DW1/2 to substantiate the claim of the complainant company that the part loan amount was disbursed to Nisha Kushwaha and Navin Bharti on the instruction of accused. In Ex. DW1/2 at Digitally signed by KAVITA BIST CC NI ACT 484/2021 KAVITA FUN N FOODS PRIVATE LIMITED Vs. MANOJ KUMAR Date: Page No. 20/31 BIST 2024.03.22 15:34:53 +0530 point A an amount of Rs. 2,50,000/ was transferred by Nisha Kushwaha into the bank account of accused and accused had further transferred that amount to Shauryapuram STPL i.e the builder from whom flat was purchased by the accused and the same is admitted by the accused in his testimony, wherein he has admitted that he had made a payment of Rs. 2,50,000/ on 26.04.2018 out of the payment received on 26.04.2018 from Nisha Kushwaha. It is also interesting to note here that during his testimony the accused has stated that he does not know Nisha Kushwaha, however, at the later stage of his testimony he himself has admitted that he had received an amount of Rs. 2,50,000/ from Nisha Kushwaha and the same was transferred to Shauryapuram STPL in lieu of the flat purchased by him. As far as this part loan of Rs. 2,50,000/ is concerned, the same was transferred by the complainant company to Nisha Kushwaha on 26.04.2018 and the same amount was transferred by Nisha Kushwaha to accused on that day and further the same amount was transferred by the accused to the Shauryapuram STPL on that day only. This line of transaction corroborates the plea taken by the complainant company that the part loan amount was disbursed to third party on the instruction of accused. The same pattern has been followed as far as the payment of Rs. 2,50,000/ and Rs. 2,90,000/ to Navin Bharti at point B and C of Ex. DW1/2 is concerned and the accused has also admitted during his testimony that Navin Bharti is one of his friend.
It is also important to take note of the fact that an amount of Rs. 3,90,000/ was also transferred into the bank account of accused by the complainant company and the same is duly reflected in the bank account statement of the accused Ex. DW1/2 at point D, and the accused has also admitted Digitally signed by KAVITA KAVITA BIST CC NI ACT 484/2021 BIST FUN N FOODS PRIVATE LIMITED Vs. MANOJ KUMAR Date:
Page No. 21/312024.03.22 15:34:59 +0530 during his testimony that an amount of Rs. 3,90,000/ was received from complainant company by him, however, he has stated that he got a call from Shauryapuram STPL by one of his employee named Pranjal Pundir who has informed him that an amount of Rs. 3,90,000/ had been transferred into his bank account by Shauryapuram STPL out of mistake and the same is required to be refunded back to Shauryapuram STPL and after that he had transferred an amount of Rs. 3,93,400/ by way of cheque to Shauryapuram STPL after adjusting amount of Rs. 3,400/ which was maintainance due in respect of his flat and he further admitted that an amount of Rs. 3,93,400/ was paid to Shauryapuram STPL towards the sale consideration of flat purchased by him, however, he changed his statement afterwards and stated that the same was in respect of refund amount. It seems quite interesting that the amount transferred by the complainant company was credited into the bank account of the accused by mistake of Shauryapuram STPL and even if we assume that amount was transferred mistakenly by the complainant company then it seems further interesting that the amount was refunded back not to the complainant company but to the Shauryapuram STPL i.e builder and it is also pertinent to mention here that the accused has admitted in his testimony that the abovesaid amount received from Nisha Kushwaha, Navin Bharti and Fun N Food Private Limited is Rs. 11,80,000/ i.e the amount mentioned in the loan agreement Ex. CW1/2 and it is also important to take note of the fact that the accused has himself admitted that the total sale consideration of the flat was Rs. 32,30,000/ and only a loan of Rs. 23 lakh was sanctioned from Canara Bank and there was a short fall of amount of Rs. 10 lakh, however, the Digitally signed by KAVITA KAVITA BIST BIST Date:
2024.03.22 15:35:04 +0530 CC NI ACT 484/2021 FUN N FOODS PRIVATE LIMITED Vs. MANOJ KUMAR Page No. 22/31 accused has stated that the same was paid by him, but no proof of that payment has been furnished by the accused.
The accused has stated that he has not taken any loan from the complainant company, but it is important to refer the bank account statement of accused Ex. DW1/2 filed by the accused, wherein on 27.08.2018 an amount of Rs. 14,750/ i.e EMI of the alleged loan was paid by the accused to complainant company and again on 25.10.2019, an amount of Rs. 14,750/ was paid by the accused to complainant company, however, the accused in his testimony has stated that he can not recall whether he had made any EMI payment of Rs. 14,750/ on 31.07.2018 and 25.07.2019 to the complainant company. The accused has failed to justify as to when no loan was taken by the accused from the complainant company as alleged by him, then why he had paid two EMIs to the complainant company.
In view of the abovesaid findings, this court is of considered view that the defence taken by the accused that no loan was ever disbursed to him is highly whimsical, uncorroborated by any evidence.
Lack of capacity of AR One of the plea taken by the Ld. Counsel for the accused which deserves close scrutiny is that the AR of the complainant is not aware about the alleged transaction and is not fit to depose before this court in the present matter. In this regard, it is important to draw attention on the judgment of AC Narayanan Vs. State of Maharasthra and Anr. AIR 2014 SUPREME COURT 630, wherein the Hon'ble Supreme Court has observed as follows: Digitally signed by KAVITA KAVITA BIST BIST Date:
2024.03.22 15:35:09 +0530 CC NI ACT 484/2021 FUN N FOODS PRIVATE LIMITED Vs. MANOJ KUMAR Page No. 23/31 "26) While holding that there is no serious conflict between the decisions in MMTC (supra) and Janki Vashdeo Bhojwani (supra), we clarify the position and answer the questions in the following manner:
(i) Filing of complaint petition under Section 138 of N.I Act through power of attorney is perfectly legal and competent.
(ii) The Power of Attorney holder can depose and verify on oath before the Court in order to prove the contents of the complaint.
However, the power of attorney holder must have witnessed the transaction as an agent of the payee/holder in due course or possess due knowledge regarding the said transactions.
(iii) It is required by the complainant to make specific assertion as to the knowledge of the power of attorney holder in the said transaction explicitly in the complaint and the power of attorney holder who has no knowledge regarding the transactions cannot be examined as a witness in the case.
(iv) In the light of section 145 of N.I Act, it is open to the Magistrate to rely upon the verification in the form of affidavit filed by the complainant in support of the complaint under Section 138 of the N.I Act and the Magistrate is neither mandatorily obliged to call upon the complainant to remain present before the Court, nor to examine the complainant of his witness upon oath for taking the decision whether or not to issue process on the complaint under Section 138 of the N.I. Act.
Digitally
signed by
KAVITA
KAVITA BIST
BIST Date:
2024.03.22
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(v) The functions under the general power of attorney cannot be delegated to another person without specific clause permitting the same in the power of attorney. Nevertheless, the general power of attorney itself can be cancelled and be given to another person."
CW1 i.e the AR of the complainant has stated in his testimony that he is fully aware of the facts of the present case and he has also stated that his knowledge is not based on his personal information, however, the same is based on the records of the complainant company as well as on what has been told to him by officials of the complainant company and he has also stated in his evidence affidavit that he is fully conversant with facts of the present complaint. After perusing the whole testimony of the complainant, the court is of view that the AR of the complainant has sufficient knowledge regarding the present case except some minor things which does not go into the root of the present case and as such the defence taken by the Ld. Counsel for the accused is not maintainable.
The upshot of the above discussion is that the said ingredient remains fulfilled in favour of the complainant. Hence, considering the materials available on record, I am of the considered view that the accused has failed to rebut the presumption of legally enforceable debt or liability in favour of the complainant.
b.) "That the cheque has been presented to the bank with in a period of three months from the date on which it is drawn or within the period of its validity, whichever is earlier;"
Digitally signed by KAVITA KAVITA BIST BIST Date:
2024.03.22 15:35:21 +0530 CC NI ACT 484/2021 FUN N FOODS PRIVATE LIMITED Vs. MANOJ KUMAR Page No. 25/31 16.5) This requirement is satisfied on a perusal of the cheque in question Ex. CW1/5 dated 11.12.2020 and the returning memo Ex. CW1/6 which bears the date of 14.12.2020 respectively i.e within a period of three months from the date of issuance of cheque in question. The defence has led no evidence to controvert the same and hence, the ingredient stands fulfilled as against the accused person.
c.) "That the cheque has been returned by the drawee bank unpaid, for the reason that the amount of money standing to be credit of that account is insufficient to honor the cheque or that it exceeds the amount arranged to be paid from that account by agreement made with that bank."
16.6) Section 146 of N.I Act, 1881 provides that the court shall, on production of bank's slip or memo having therein the official mark denoting that the cheque has been dishonored, presumed the fact of dishonor of such cheque, unless and until such fact is disproved. The bank returning memo Ex. CW1/6 is on record states that the cheque in question has been returned dishonored for the reason "Funds Insufficient." The defence has led no evidence to controvert the same and the accused has also admitted the returning memo in his notice of accusation u/s 251 Cr.P.C and hence, this ingredient is also fulfilled as against the accused.
d.) "That the payee or holder in due course has made a demand for payment of the said amount of money by giving the notice in writing to the drawer of the cheque within 30 days of receipt of information from the bank regarding the return of the cheque as unpaid"
16.7) As regard the service of legal demand notice Ex. CW1/8, the complainant has sent the same to the accused. The original postal receipts Digitally signed by KAVITA BIST KAVITA Date:
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Ex. CW1/9A and Ex. CW1/9B in respect of the same is already on record and the tracking report Ex. CW1/10 which shows the reason "Item delivery confirmed". Moreover, in the notice of accusation u/s 251 Cr.P.C the accused has admitted that he had received the legal demand notice and he had duly replied to the same, however, no reply has been filed by the accused in the present case. Considering the admission on the part of accused, I am of the considered view that the legal demand notice was duly received by the accused. So this ingredient is fulfilled as against the accused.
e.) That the drawer of the cheque fails to make the payment of the said amount of money to the payee or holder in due course within 15 days of the receipt of the said notice;
16.8) In the instant case, the accused has admitted that he has received the legal demand notice issued by the complainant. Hence, considering that the legal demand notice was duly received by the accused. It was open to the accused person to make the payment due under the cheque in question within 15 days. However, the accused has admittedly failed to do so, on the ground that he does not owe any liability towards the complainant, a defence which he has been able to prove at the trial. Hence, this ingredient stands fulfilled as against the accused.
17.) Before parting with the judgment, it is necessary to dispose of the application dated 31.10.2022 moved on behalf of the accused under section 340 Cr.P.C.
17.1) By way of the instant application it has been averred on behalf of the accused that during the cross examination of CW1 i.e the AR of the Digitally signed by KAVITA BIST KAVITA CC NI ACT 484/2021 FUN N FOODS PRIVATE LIMITED Vs. MANOJ KUMAR Date: Page No. 27/31 BIST 2024.03.22 15:35:33 +0530 complainant dated 21.12.2021, he has stated that he is not aware whether the directors of the complainant's company and Shauryapuram STPL are same or not and he further deposed that he does not have any knowledge about Shauryapuram STPL. Ld. Counsel for the accused has stated that the main defence of the accused was always that the cheque in question was given to one Anil Jain who is the director of Shauryapuram STPL and the same has been misused by the complainant and he could not cross examine the AR of the complainant on that specific defence after deposition of AR that he does not have any knowledge about Shauryapuram STPL. The Ld. Counsel for the accused has further stated that the AR of the complainant company had been appearing as AR for Shauryapuram STPL and in that regard, Ld. Counsel for the accused has filed one uncertified copy of order of Hon'ble Allahabad High Court, Lucknow Bench, U.P dated 02.11.2021 Annexure1 and one unsigned ordersheet of Ld. M.M Aditi Rao M.M NI Act South East, Delhi Annexure2. Further, it has been prayed that an inquiry be initiated u/s 340 Cr.P.C against the complainant.
Ld. counsel for the complainant has filed a reply of the abovesaid application wherein he has stated that the question asked by the counsel for the accused during the cross examination of AR was factually incorrect as the STPL is not a company and hence, there can not be directors of the said company and he has further stated that the documents filed by the accused along with the application are bare in law as the same are after the date of crossexamination dated 21.12.2021 and he has further stated that the present application has been filed by the accused to the abuse and misuse the process of law.
Digitally signed by KAVITA KAVITA BIST BIST Date:
2024.03.22 15:35:38 +0530 CC NI ACT 484/2021 FUN N FOODS PRIVATE LIMITED Vs. MANOJ KUMAR Page No. 28/31 17.2) I have heard the arguments and also gone through the record carefully. Before delving into the merits, it would be apposite to look at various judicial pronouncements pertaining to Section 340 Cr.P.C. It was held in the case of Iqbal Singh Marwah v. Meenakshi Marwah (2005 AIR SCW 1929) that "in view of the language used in Section 340, Cr.P.C.
the Court is not bound to make a complaint regarding commission of an offence referred to in Section 195(1)(b), as the Section is conditioned by the words "Court is of opinion that it is expedient in the interest of justice". This shows that such a course will be adopted only if the interest of justice requires and not in every case. Before filing of the complaint, the Court may hold a preliminary inquiry and record a finding to the effect that it is expedient in the interests of justice that inquiry should be made into any of the offences referred to in Section 195(i)(b). This expediency will normally be judged by the Court by weighing not the magnitude of injury suffered by the person affected by such forgery or forged document, but having regard to the effect or impact, such commission of offence has upon administration of justice. It is possible that such forged document or forgery may cause a very serious or substantial injury to a person in the sense that it may deprive him of a very valuable property or status or the like, but such document may be just a piece of evidence produced or given in evidence in Court, where voluminous evidence may have been adduced and the effect of such piece of evidence on the broad concept of administration of justice may be minimal. In such circumstances, the Court may not consider it expedient in the interest of justice to make a complaint." In the case of Jagjit Kaur v. LieutenantColonel Harjeet Singh (2000 (1) JCC Delhi 28), it was held by the Hon'ble Delhi High Digitally signed by KAVITA KAVITA BIST CC NI ACT 484/2021 BIST FUN N FOODS PRIVATE LIMITED Vs. MANOJ KUMAR Date:
2024.03.22 Page No. 29/31 15:35:44 +0530 Court that the provisions of Section 340 are intended to provide safeguard against criminal prosecution on insufficient grounds filed against a party by his opponent motivated by a revengeful desire to harass the opponent. It is not the law that every false statement should attract the provisions of section 340 Cr.P.C. If the Court is to notice every falsehood that is sworn to by the parties in courts there would be very little time for courts for any serious work other than directing prosecution for perjury. The gravity of the false statement, the circumstances under which such statement is made, the object of making false statement and its tendency to impede and impair the normal flow of the course of Justice are matters for consideration.
The main defence of the accused in the present case is that the cheque in question was given to Shauryapuram STPL for the purpose of availing home loan and the cheque in question has been used by the complainant company in connivance with Shauryapuram STPL. It is pertinent to mention here that annexure1 filed by the accused along with the present application is an uncertified copy of order and can not be relied as such further annexure2 filed by the accused is again an unsigned document and can not be taken into account. The accused in the present case has failed to rebutt the presumption in favour of the complainant and the complainant has proved that the alleged loan was disbursed to the accused and accused had also paid two EMIs for the alleged loan to the complainant company and considering these facts the plea taken by the accused that the cheque in question was given to Shauryapuram STPL and no loan was ever taken by the accused from the complainant company is a bare averment, unsubstantiated by any cogent evidence.
Digitally
signed by
KAVITA
KAVITA BIST
BIST Date:
2024.03.22
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17.3) In light of the above discussion, I am of the considered opinion that there has been no attempt to subvert the administration of justice by the complainant. It is absolutely not expedient in the interest of justice to proceed further under Section 340 Cr.P.C. There is no merit in the present application. Hence, present application under Section 340 Cr.P.C. moved by the accused/applicant is hereby dismissed. Application stands disposed off accordingly.
18.) Decision:
As all the ingredients of the offences are cumulatively satisfied against the accused, the accused is hereby convicted of the offence u/s 138 of N.I. Act.
Copy of the judgment is handed over to the convict free of cost.
Digitally
Announced in the open court signed by
KAVITA
KAVITA BIST
on 22.03.2024 BIST Date:
2024.03.22
15:35:56
(Kavita Bist)
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MM (N.I. Act) Digital Court
East Karkardooma, Courts, NewDelhi
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