Delhi District Court
Simarjeet Kaur vs Rajesh Kumar Chauhan on 3 February, 2025
IN THE COURT OF MS. NEHA GARG:
JMFC-02: EAST DISTRICT: KARKARDOOMA COURTS: DELHI
CIS No. 1776/2020
Simarjeet Kaur
vs.
Rajesh Kumar Chauhan
1. Name of the Complainant : Simarjeet Kaur,
S/o Sadar Darshan Singh,
R/o C-12/711, Gali No. 03,
Near Krishna Mandir, Ganesh
Nagar, Shakarpur, Delhi-
110092
2. Name of the accused and : Rajesh Kumar Chauhan,
parentage S/o Sh. Ramesh Chand,
R/o C/12/712, First Floor,
Street No. 03, Ganesh Nagar-
II, Delhi-110092
3. Offence Complained of : U/S. 138 of the Negotiable
Instruments Act, 1881.
4. Plea of accused : Pleaded not guilty
5. Date of institution of the case : 17.08.2020
6. Final order : CONVICTION
7. Date of Final Order : 03.02.2025
Ct Case No. 1776/2020 Simarjeet Kaur vs. Rajesh Kumar Chauhan Page 1 of 12
JUDGMENT
1. By way of the present Judgment, this Court shall dispose of the present complaint filed by Simarjeet Kaur (hereinafter referred to as 'complainant') against Rajesh Kumar Chauhan (hereinafter referred to as 'accused') u/S. 138 r/w S. 142 of the Negotiable Instruments Act, 1881 (hereinafter referred to as 'NI Act') for dishonour of cheques bearing no. 000066, 000068 and 000069 dated 24.02.2020, 23.02.2020 and 22.02.2020 respectively, each amounting to Rs. 2,00,000/- drawn on UCO Bank, Priyadarshini Vihar, Laxmi Nagar, Delhi (hereinafter referred to as 'the cheques in question').
BRIEF FACTUAL MATRIX OF THE PRESENT CASE:-
2. The case of the complainant is that the accused presented himself as owner of a boutique and cosmetic shop as well as an employee of Samsung company and he approached the complainant for a loan of Rs. 10,00,000/-. It is submitted that the complainant has advanced the aforesaid sum to the accused only on the execution of loan agreement dated 31.05.2018, wherein the accused has undertaken to return the said loan amount of Rs. 10,00,000/- along with interest of Rs. 7,01,000/- in installments of Rs.2,100/- per day within stipulated period of 810 days from 21.06.2018 to 07.09.2020. It is submitted that at the time of execution of the above-mentioned loan agreement, the accused had issued 09 security cheques bearing numbers 000062 to 000070 all drawn on UCO Bank, Laxmi Nagar, Delhi, to the complainant with the assurance that said cheques shall be encashed at the time of their presentation.
3. It is further submitted that since the accused had paid the loan amount to the complainant continuously till 30.11.2018, the complainant returned 02 cheques Ct Case No. 1776/2020 Simarjeet Kaur vs. Rajesh Kumar Chauhan Page 2 of 12 bearing no. 000062 and 000070 to the accused. It is the case of the complainant that accused suddenly stopped to pay the installments of Rs. 2100/- each w.e.f. 01.12.2018 and thereafter the complainant deposited the cheques in question bearing no. 000066, 000068 and 000069 amounting to Rs. 2,00,000/- each with her banker i.e. HDFC Bank, Vikas Marg, Delhi but the said cheques got dishonored with the remarks 'Funds Insufficient' vide bank return memos all dated 25.02.2020. It is submitted that thereafter, the complainant sent a legal notice dated 05.03.2020 u/S. 138 of the NI Act through Speed Post at the address of the accused but even after the expiry of 15 days stipulated period, the accused did not make the payment, hence, the present case has been filed by the complainant.
PROCEEDINGS BEFORE THE COURT:-
4. The cognizance of the complainant was taken and accused was summoned vide order dated 22.10.2020. Notice u/S. 251 Cr.P.C was served upon the accused on 21.05.2022 to which accused pleaded not guilty and claimed trial. Thereafter, the case was fixed for complainant evidence.
5. Thereafter, complainant witness was examined, cross-examined and discharged and thereafter, complainant evidence was closed on 27.04.2024 and statement of accused u/S. 313 of Cr.P.C was recorded on 29.07.2024. It is pertinent mention here that the application under Section 143(A) of the NI Act was moved on behalf of the complainant praying for grant of interim compensation and the same was allowed by the Court vide order dated 07.08.2024 directing the accused to pay 20% of the cheque amount i.e., an amount of Rs. 1,20,000/- to the complainant within 60 days from the date of passing of such order but the accused has failed to Ct Case No. 1776/2020 Simarjeet Kaur vs. Rajesh Kumar Chauhan Page 3 of 12 do the same and did not comply with the order dated 07.08.2024 till date.
Thereafter, the case was listed for defence evidence. Further, considering the previous conduct of the accused, the opportunity of the accused to lead defence evidence was closed by the Court vide order dated 23.10.2024 and the matter was fixed for final arguments.
6. Thereafter, final arguments were heard on behalf of both the parties. I have heard counsels for both parties at length, considered the evidence led by them carefully and have perused the Court record thoroughly including the various citations filed by Ld. Counsel for the accused in support of his arguments.
LAW UNDER CONSIDERATION:-
7. Before adverting to the facts of the present case, it would be apposite to discuss the legal standards required to be met by both sides. In order to establish the offence under Section 138 of the NI Act, the prosecution must fulfill all the essential ingredients of the offence, as highlighted below:
1 st Ingredient: The cheque was drawn by a person on an account maintained by him/her for payment of money and the same is presented for payment within a period of 3 months from the date on which it is drawn or within the period of its validity;
2 nd Ingredient: The cheque was drawn by the drawer for discharge of any legally enforceable debt or other liability;
3 rd Ingredient: The cheque was returned unpaid by the bank due to either insufficiency of funds in the account to honour the cheque or that it exceeds the amount arranged to be paid from that account on an agreement made with that bank;
4 th Ingredient: A demand of the said amount has been made Ct Case No. 1776/2020 Simarjeet Kaur vs. Rajesh Kumar Chauhan Page 4 of 12 by the payee or holder in due course of the cheque by a notice in writing given to the drawer within thirty days of the receipt of information of the dishonour of cheque from the bank;
5 th Ingredient: The drawer fails to make payment of the said amount of money within fifteen days from the date of receipt of notice.
8. Once the ingredients mentioned in the foregoing paragraph are established by the complainant, then as soon as the execution of impugned cheque is admitted by the accused, a factual base is established to invoke the presumption of cheque having been issued in discharge, in whole or in part, of any debt or other liability by virtue of Section 118(a) read with Section 139 of NI Act. This is a reverse onus clause, which means that unless the contrary is proved, it shall be presumed that the impugned cheque was drawn by the accused for a consideration and that the complainant had received it in discharge of a debt/ liability from the accused. In the case titled as Bir Singh vs. Mukesh Kumar, (2019) 4 SCC 197, it was held by Hon'ble Supreme Court of India that once the accused has admitted the signature on the cheque in question, then the court is bound to raise presumption under Section 139 of the NI Act.
9. It has been held by Hon'ble Supreme Court of India in the judgment titled Rangappa vs. Sri Mohan, (2010) 11 SCC 441 that a reverse onus clause usually imposes an evidentiary burden and not a persuasive burden and when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of "preponderance of probabilities". Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. It was further held Ct Case No. 1776/2020 Simarjeet Kaur vs. Rajesh Kumar Chauhan Page 5 of 12 that 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.
ARGUMENTS ADVANCED BY THE COUNSELS:-
10. Ld. Counsel for the complainant has submitted that the accused should be convicted of offence u/S. 138 of the NI Act because the complainant has proved the original cheques, which the accused has not disputed as being drawn on his account. He has further submitted that the cheques in question were returned unpaid vide cheque returning memos which are on record. The same is also not disputed by accused. He has further submitted that the legal demand notice was issued on the address of the accused and the service of the same has ben proved by the postal receipt and the tracking report. He has further submitted that the fact that the payment was not made within 15 days of the receipt of the legal notice is also not disputed.
11. Per contra, Ld. Counsel for the accused has submitted that the cheques in question were only given as security cheques to the complainant and that the accused has no liability towards the complainant for the amount of the cheques in question on the date of their presentation.
REASONS FOR DECISION:-
12. Before examining the defence of accused, it is pertinent to note that the complainant has discharged her initial burden by relying upon her Evidence Affidavit Ex.CW1/G, original three Cheques all Ex.CW1/B, Bank Return Memos all Ex.CW1/C, Legal Demand Notice Ex. CW1/D, Postal Receipt Ex. CW1/E, Ct Case No. 1776/2020 Simarjeet Kaur vs. Rajesh Kumar Chauhan Page 6 of 12 Tracking Report Ex. PW1/F in order to prove essential ingredients of Section 138 NI Act. Furthermore, the accused has admitted his signatures on the cheques in question in his statement u/s 313 of Cr.P.C recorded in the Court on 29.07.2024. Accordingly, this Court raises presumption under Section 118(a) and 139 of the NI Act that the cheques in question were issued by the accused to the complainant in discharge of legally enforceable debt or liability. In order to rebut the presumptions, the burden of proof shifts to the accused to prove on a preponderance of probabilities that there was no liability for the amount of the cheques in question. Therefore, in the present matter, the onus of proof is now upon the accused to raise a probable defence and to rebut the presumption of the existence of a legally recoverable debt arisen in favour of the complainant.
13. It is the defence of the accused that he no liability towards the complainant for the amount of the cheques in question on the date of their presentation and that the cheques in question were only given as security cheques to the complainant which have now been misused by the complainant.
14. Ld. Counsel for the accused has argued that the complainant has admitted in her cross-examination that there are only 162 days between 16.09.2019 and 25.02.2020 and the amount due from the accused for the said period of 162 days was only Rs. 3,40,200/-. To further buttress his aforesaid argument, Ld. Counsel for the accused has brought to the attention of the Court, the statement made by the complainant in her cross-examination to the effect that 'it is correct that the accused did not have the liability of Rs.6 lac when the complaint case CC No.1776/2020 was filed'. Ld. Counsel for accused has further argued that the Ct Case No. 1776/2020 Simarjeet Kaur vs. Rajesh Kumar Chauhan Page 7 of 12 agreement between the parties was to terminate on 07.09.2020 and the cheques were only given as security cheques and the same have been presented by the complainant before the date of last payment i.e., on 07.09.2020. Ld. Counsel for accused has submitted that the complainant could have not presented the cheques in question before the date of the last payment and accordingly, the accused has no liability towards the complainant for the amount of the cheques in question. Ld. Counsel for accused has relied on judgments in 'Sampelly Satyanarayan Rao vs. India Renewable Energy Development' AIR 2016 SC 4363 , 'Dashrathbhai Trikambhai Patel vs. Hitesh Mahendrabhai Patel & Anr', Crl. Appeal 1497 of 2022 and 'Supply House vs. Ullas', 2006 (3) KLT 921 in support of his submissions that for an offence under Section 138 of the NI Act to arise, the cheque should represent a legally enforceable debt on the date of maturity or encashment.
15. Having given my thoughtful consideration to the submissions made by Ld. Counsel for accused, I am afraid to state that the same does not find merit with me. Admittedly, the accused had borrowed a sum of Rs. 10,00,000/- from the complainant out of which, he is stated to have repaid a sum of Rs. 3,50,000/-. In his statement recorded under Section 313 of Cr.P.C, accused has admitted the execution of agreement dated 31.05.2018 (Ex. CW1/A) executed between the parties. A bare perusal of the aforementioned agreement reveals that the complainant had advanced a sum of Rs. 10,00,000/- to the accused along with interest of Rs. 7,01,000/- which was to be repaid in installments of Rs.2,100/- per day within stipulated period of 810 days from 21.06.2018 to 07.09.2020. It is further stated in the aforesaid agreement that in discharge of his aforesaid liability, the accused had handed over the cheques in question to the complainant.
Ct Case No. 1776/2020 Simarjeet Kaur vs. Rajesh Kumar Chauhan Page 8 of 1216. The complainant has deposed that the accused has repaid a sum of Rs. 3,42,300/- for 163 days and that the last payment was made on 30.11.2018. The aforesaid fact has not been disputed by the accused at any stage. Therefore, it is clear that the accused defaulted in making payments w.e.f. 01.12.2018. Complainant has deposed in her cross-examination that she had presented the cheques in question on 25.02.2020. Thus, it is to be seen that the period from 01.12.2018 i.e., the date of default till 25.02.2020 i.e., the date of the presentation of cheques in question is 452 days and the liability of the accused for the said number of days in terms of loan agreement executed between the parties comes out to be Rs. 9,49,200/-.
17. The arguments of Ld. Counsel for accused that the amount the amount due from the accused for the period of 162 days between 16.09.2019 and 25.02.2020 was only Rs. 3,40,200 and accordingly, the accused is not liable for the amount of the cheques in question on the date of their presentation on 25.02.2020, cannot be accepted. Apparently, the aforesaid argument of Ld. Counsel for accused is premised on the fact that the complainant has filed a connected complaint bearing CT No. 4656/2019 under Section 138 of the NI Act for dishonor of three other cheques for sum of Rs. 2,00,000/- each issued to her by the accused which were all dishonored on 17.09.2019. It is not the case of the accused that he had made payment of the amount of the cheques which are the subject matter of CT No. 4656/2019 before the presentation of the cheques in question on 25.02.2020. Therefore, it is to be seen that as on 25.02.2020, the accused was liable to pay the complainant a sum of Rs. 2100/- each day for the period 01.12.2018 till 25.02.2020 which amount comes out to be Rs. 9,49,200/-.
Ct Case No. 1776/2020 Simarjeet Kaur vs. Rajesh Kumar Chauhan Page 9 of 1218. So far as it is the argument of Ld. Counsel for the accused that the complainant has herself admitted in her cross-examination that the accused did not have the liability of Rs.6 lac when the complaint case CC No.1776/2020 was filed, it is to be noted that in every case, there may appear inconsistencies in the deposition of a witness however, the deposition has to be taken as a whole. Minor inconsistencies, which do not affect the main substance of the case, are to be taken in correct perspective along with the other evidences, including documentary evidence which is led in the case. In the instant case, neither the execution of agreement dated 31.05.2018 (Ex. CW1/A) nor the fact that the he has failed to make payment w.e.f. 01.12.2018 is denied by the accused. Therefore, the liability of the accused is clearly discernible from the record of the case and one statement made by the complainant in her cross-examination cannot be taken out of context to arrive that the conclusion that the accused has no liability towards the complainant for the amount of the cheques in question on the date of its presentation.
19.Furthermore, the argument of Ld. Counsel for accused that the complainant could not have presented the cheques in question before 07.09.2020, is neither here nor there as there is no such bar in the loan agreement executed between the parties. No doubt, it is mentioned in the loan agreement that the cheques in question are being issued as security cheques, however the same does not dis-entitle the complainant to present the same for enforcing the amount legally recoverable by her. Qua the defence of security cheque taken by the accused, it is pertinent to note that even if the aforesaid defence of the accused is accepted, the same does not help the accused. Reliance in this regard is placed by this Court on the judgments of Hon'ble Supreme Court of India in Sampelly Satyanarayana Rao vs. Indian Renewable Energy Development Agency Ltd., (2016) 10 SCC Ct Case No. 1776/2020 Simarjeet Kaur vs. Rajesh Kumar Chauhan Page 10 of 12 458; Sripati Singh vs. State of Jharkhand & Anr., 2021 SCC OnLine SC 1002 and Sunil Todi vs. State of Gujarat & Anr., 2021 SCC OnLine SC 1174 wherein the Hon'ble Apex Court has held that merely because a cheque has been given for security purposes does not mean that there is no legally enforceable debt or liability in favour of the complainant, however, it does mean that the Court has to see whether there exists legally enforceable debt or liability as on the date mentioned on the cheque or whether a legally enforceable debt or liability has arisen at the time of presentation of the cheque.
20. It is now well settled that by virtue of presumption u/s 118 read with 139 of the NI Act, a drawer who signs a cheque and hands it over to the payee, is presumed to be liable unless the drawer adduces evidence to rebut the presumption that the cheque has been issued towards the payment of the debt or in discharge of a liability. In the instant case also, accused has admitted his signature on the cheques in question. In terms of the loan agreement executed between the parties, the accused has incurred liability of Rs. 2100/- for each day of default of payment which in the instant case comes out to be Rs. 9,49,200/- and therefore, the liability of accused to the tune of the amount of the cheques in question as on the date of their presentation is clearly established.
21. On the basis of the evidence brought on record and in the light of the foregoing discussion, the accused have miserably failed to rebut the mandatory presumptions as per law and tilt the scales in his favour even on a scale of preponderance of probabilities. Since accused has not disputed his signatures of the cheques in question, the presumption under Sections 118 and 139 of the NI Act takes effect and the complainant's case satisfies all the ingredients necessary Ct Case No. 1776/2020 Simarjeet Kaur vs. Rajesh Kumar Chauhan Page 11 of 12 for securing a conviction under Section 138 of the NI Act. The defense of the accused was that the cheques in question were not issued in discharge of a legally enforceable debt or liability. The accused having miserably failed to discharge its evidential burden, that fact will have to be taken to be proved by force of the presumption, without requiring anything more from the complainant. Accordingly, the defence of the accused is hereby rejected.
FINAL ORDER:-
22. On a consideration of the totality of factors pleaded by the accused in his defence, it becomes clear that the accused has merely paid lip service to his defence and has not led any cogent evidence to establish it or draw any circumstance against the case of the complainant which probabilizes his defence.
23. Accordingly, the accused Rajesh Kumar Chauhan S/o Ramesh Chand is convicted of the offence u/s 138 of the Negotiable Instruments Act, 1881.
24. Copy of this judgment be given to the convict free of cost, as per rules.
Announced in the open Court (NEHA GARG) on 03.02.2025 JMFC-02, East District, KKD Courts, Delhi
Note: This judgment contains 12 pages and each page has been signed by me.
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