Delhi District Court
Suresh Chand Sharma vs Ashok Kumar Sharma on 30 October, 2012
IN THE COURT OF SH. M. P. SINGH: MM08/NE:DELHI Suresh Chand Sharma Versus Ashok Kumar Sharma Complaint No. 68/06/12 Section 138, N. I. Act, 1881 PS New Usmnapur U ID No. 02402R0078382006 JUDGMENT
Serial No. of the case '68/06/12 Date of commission of offence '01.02.2006 Date of institution of the case '10.02.2006 Name of the complainant Sh. Suresh Chand Sharma s/o Sh. Vasudev Sharma
Name of accused, parentage and Sh. Ashok Kumar Sharma s/o Sh. Blawant Rai r/o
address 130, Bharat Nagar, Delhi.
Also at - 2nd Floor, Sector 3/34, Gali No. 2, Old
Mahavir Nagar, Delhi.
Also at - Adbilling Department, 5th Floor, K. G.
Marg, 1820, Hindustan Times Building, Cannaught
Place, New Delhi01
Offence complained of or proved Sections 138, Negotiable Instruments Act, 1881
Plea of the accused Pleaded not guilty
Final order Convicted
Date of Judgment '30.10.2012
1. Facts as disclosed in the complaint are as follows: Complainant and the accused were on friendly terms with each other. In January, 2005 the accused approached him for financial assistance to tide over some financial difficulties and to pay off small amounts of loan which he had taken from others. Keeping in view the friendly Suresh Chand Sharma Versus Ashok Kumar Sharma Page 1 of 11 relations, the complainant advanced him a loan of Rs. 5,50,000/. At the time of taking the loan, the accused issued a cheque bearing no. 068080 dt. 11.10.2005 drawn on Citibank of an equivalent amount in order to secure the loan. The accused had also assured the complainant that he would dispose off his house in Bharat Nagar and then repay the loan. The accused further assured the complainant that in case the latter was ready to purchase his house, then he could sell it off to him at the market value after adjusting the loan amount. To this end, the accused gave photocopies of property papers of his house. He executed a promissory notecumreceipt of the loan amount along with other documents. He also swore an affidavit to this effect, in the form of an undertaking. The loan was not returned. Complainant presented the cheque. It was not honoured. The bank return memo dt. 23.12.2005 disclosed that the reason for dishonour was 'account closed/transferred TOT'. Complainant issued a statutory legal notice dt. 12.01.2006 calling upon the accused to make the payment of the cheque amount within 15 days. Legal notice failed to elicit any response from the accused. Thus, the instant complaint.
2. Accused's plea to the notice for the offence under section 138 NI Act, 1881 was that of not guilty. Complainant got examined two witnesses. He examined himself as CW1. One Ashok Kumar Jain, Assistant Manager, Central Bank of India, Parliament Street, Delhi (complainant's banker) was examined as CW2. He deposed that "account closed" was the reason for dishonour of the cheque. He exhibited on record the Outward Clearing Return Register as Ex. CW2/A. In his statement under section 313 CrPC, accused claimed innocence by taking the plea that the cheque in question had been misplaced and that he had no liability towards the complainant. He also took the stand that the signature at the cutting of word 'self' at the top of the cheque Suresh Chand Sharma Versus Ashok Kumar Sharma Page 2 of 11 was not his. In his statement under section 313 CrPC, this is what he, inter alia, stated, "I had not taken any cash loan from the complainant. The cheque in question Ex. CW1/1 was misplaced. The cheque had been issued by me and issued in favour of self. The signature on the cheque in question where there is a cutting at self are not mine." In defence evidence, accused (DW1) appeared as his sole witness.
3. I have heard the arguments and perused the records.
4. The Act raises two presumptions; firstly, in regard to the passing of consideration as contained in section 118 (a) therein and, secondly, a presumption that the holder of cheque receiving the same of the nature referred to in Section 138 discharged in whole or in part any debt or other liability. Presumptions, both under Sections 118
(a) and 139 of the Act, are rebuttable in nature. The burden is squarely upon the accused to rebut the presumptions and discharge the onus placed upon him to show that the cheque was not against any liability. The standard of proof upon the accused in order to rebut this presumption against him is - mere preponderance of probability. It is also a settled principle that where accused has discharged initial burden of rebutting the presumptions by preponderance of probabilities; burden of proof then shifts to the complainant. Whether or not the accused has discharged the onus of proof placed upon him would depend entirely on the given facts and circumstances.
5. At the very outset, Ld. Defence counsel contended that the instant complaint case was not maintainable. He contended that an action under section 138 NI Act does not lie where the reason for a cheuqe's dishonour was 'account closed'. In this regard, he forcefully relied upon a judgment of the Apex Court reported as Jugesh Sehgal vs. Shamsher Singh Gogi [2009] ACR 710. I have gone through the judgment of Suresh Chand Sharma Versus Ashok Kumar Sharma Page 3 of 11 Jugesh Sehgal (supra) relied upon by Ld. Defence counsel. A careful of perusal of the judgment would reveal that the Apex Court has not at all said that an action under section 138 NI Act would not lie where a cheque is dishonoured on account of account being closed. The judgment of Jugesh Sehgal (supra) was on an altogether different footing. Facts before the Apex Court were as follows - The cheque issued by accused/appellant Jugesh Sehgal was from an account, not maintained by him, but by one Shilpa Chaudhary. In other words, he had issued the cheque of a third person, namely Shilpa Chaudhary. The cheuqe was returned dishonoured owing to account being closed. Jugesh Sehgal was sought to be prosecuted for an offence under section 138 NI Act. The Apex Court held that the complaint under section 138 NI Act was not maintainable against Jugesh Sehgal as the cheque had not been drawn by him on an account maintained by him. The observations of the Apex Court at para 11 are as follows: "11. In the case before us, it is clear from the facts, briefly noted above, and in para 3 of the complaint as extracted, that on receipt of the return memo from the bank, the complainant is stated to have realized that the dishonoured cheque was issued from an account which was not maintained by accused no. 1 - the appellant herein, but by one Shilpa Chaudhary. As a matter of fact and perhaps having gained the said knowledge, on 20th January, 2001, the complainant filed an FIR against all the accused for the offences under sections 420, 467, 468, 471, 406 of the Indian Penal Code (IPC). Thus, there is hardly any dispute that the cheque, subject matter of the complaint under section 138 of the Act, had not been drawn by the appellant on an account maintained by him in the Indian Bank, Sonepat branch. That being so, there is little doubt that the very first ingredient of section 138 of the Act, enumerated above, is not satisfied and consequently the case against the appellant Suresh Chand Sharma Versus Ashok Kumar Sharma Page 4 of 11 for having committed an offence under section 138 of the Act cannot be proved."
6. At para 17 of the aforesaid judgment, the Apex Court further observed, "As per the complainant's own pleadings, the bank account from where the cheque had been issued, was not held in the name of the appellant and, therefore one of requisite ingredients of section 138 of the Act was not satisfied." Thus, it is crystal clear beyond any shadow of doubt that in Jugesh Sehgal (supra), what the Apex Court merely states is that - a person cannot be prosecuted for an offence under section 138 NI Act, if he issues a cheque from an account, not maintained by him, but maintained by some other person. The aforesaid judgment of Apex Court does not at all state that a person cannot be prosecuted for an under section 138 NI Act if he issues his own cheque and the same is dishonoured owing to account being closed. Therefore, what is clear is that the reliance placed upon by Ld. defence counsel upon the judgment of Jugesh Sehgal (supra) is completely misplaced.
7. More than a decade ago, the Apex Court in the case of NEPC Micon Limited and Others vs. Magma Leasing Limited, AIR 1999 SC 1952 had settled the law that a complaint under section 138 NI Act against an accused would be maintainable if a cheque drawn by him is dishonoured, due to closure of account. It was held by the Apex Court towards the end of the judgment, "Hence, when the cheque is returned by a bank with an endorsement account closed, it would amount to returning the cheque unpaid because the amount of money standing to the credit of that account is insufficient to honour the cheque as envisaged in Section 138 of the Act. In the result, the appeal is dismissed. However, there shall be no order as to costs." Therefore, in view of law laid down in NEPC Micon case (supra) the present case is Suresh Chand Sharma Versus Ashok Kumar Sharma Page 5 of 11 very well maintainable, and the accused's contention that he cannot be prosecuted for an offence under section 138 NI Act as the cheque was dishonoured due to account being closed has to be rejected outrightly.
8. Next, it was contended by accused that there was a material alteration in the cheque.
He submitted that the signature on top of the cheque at the place where there was a cutting of word "self" in the payee column was not his. Accused, however, does not dispute that the bottom of the cheque, at the place meant for the drawer's signature, bore his signature. In terms of section 87 of NI Act a material alteration in a negotiable instrument without the consent of the drawer, unless it is made to carry out the common intention of the original parties thereto, renders it void. However, it is the accused, who has to prove by positive evidence that signature in question was not his, and as such the instrument was void. To put it in other words, the burden is entirely on the drawer of the cheque to prove that the signature thereon was not his. A mere self serving ipse dixit in this regard on the part of accused would not suffice. The proof in this regard has to be in consonance with the definition of "proved" as outlined in section 3 of Evidence Act. Section 3 of Evidence Act defines "proved" as follows "A fact is said to be proved when, after considering the matters before it, the court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists." During trial, accused Ashok in his examinationinchief deposed, "The cheque in question does not bear my signature after the cutting of word self." However, it is difficult to digest this assertion of the accused by oral testimony. In the case at hand, there is no report of any handwriting expert to state that the questioned signature was not that of the accused. In fact, during the course of Suresh Chand Sharma Versus Ashok Kumar Sharma Page 6 of 11 trial, Ld. defence counsel had filed an application under section 73 of Evidence Act seeking directions that the document be sent for verification/matching of signatures of the accused as appearing on the face of the cheque from the CFSL or any other competent laboratory and/or handwriting expert. This application was disallowed by my Ld. Predecessor vide order dated 27.08.2011, which order withstood its challenge right up till the Hon'ble High Court. Further, in the instant case, the bank did not find the cheque to be tampered with or containing any material alteration. The bank was willing to honour the cheque if the account was not closed and there was sufficient balance therein. Apart from the drawer's own deposition, there is no independent evidence adduced to discharge this burden. On a comparison of the signatures, I find that the questioned signature does not materially differ from the admitted signature so as to arouse any suspicion. To put it in other words, on a comparison, I find that there is nothing in the questioned signature to give scope for arousal of any suspicion. In my view, the accused has failed to prove that the signature on top of the cheque at the place where there was a cutting of word "self" in the payee column was not his.
9. Having dwelt on the aspect of maintainability of the instant complaint and the allegations of material alteration in the cheque, I shall now dwell on other aspects of the case before us. The complainant alleges that the accused had taken a friendly loan of Rs. 5,50,000/ and to discharge this liability, he issued the cheque in question. The presumptions as envisaged under the provisions of NI Act as regards passing of consideration works in favour of the complainant and against the accused. It is for the accused to rebut the presumption and to show the reasonable possibility of non existence of presumed facts. The accused attempted to rebut the presumption by Suresh Chand Sharma Versus Ashok Kumar Sharma Page 7 of 11 raising various contentions, which shall be dealt with hereinafter one by one. Here, it would not be out of place to mention that insofar as the issuance of the statutory legal notice and the receipt thereof by the accused is concerned, there is absolutely no dispute. Accused Ashok admits, in his statement under section 313 CrPC and in his crossexamination, that he had received the legal notice. The legal notice is in order and within time.
10. In his endeavour to displace the presumption, the very first contention raised by the accused was that he had misplaced the cheque. He reported about this misplacement to PS Connaught Place on 07.08.2005 vide DD No. 19, dt. 07.08.2005. The same is Ex. DW1/1. Accused Ashok stated in this DD entry that he had misplaced 15 cheques (cheque no 068071 to 068085) along with two stamp papers on 06.08.2005 near Madras Hotel, Delhi. Why is that the accused would roam about with blank signed cheque; and that too not with one cheque but numerous cheques? The explanation offered by the accused in his crossexamination was that he had kept blank signed cheque to apply with the bank. However, in the same breath he also stated that he never applied with any bank for any loan. It is difficult to digest that one would roam about freely with blank signed cheques in possession, knowing fully well the worth of such instruments. When a blank signed cheque is misplaced, what is ordinarily done is that the bank is intimated forthwith with the request to stop the payment. However, in the case at hand, the accused did not feel the urgency to ask his banker to stop the payment. Still more, how was it that the misplaced cheque along with the two stamp papers landed in the hands of only and only the complainant (who was a friend, acquaintance and colleague of accused) and no other person person in the madding crowd of Connaught Place? If the cheque was lost in Suresh Chand Sharma Versus Ashok Kumar Sharma Page 8 of 11 Connaught Place, then there was a very high probability that the same would have found the hands of some unknown person. But this was not to be. How is it possible that the cheque, after its loss in the busy area, landed in the hands of someone who admittedly was in possession of copies of property papers of accused? This stand of the accused does not inspire confidence.
11. It was argued that the complainant had no source of funds to advance the loan as alleged. It is to be noted that the complainant was in service in Hindustan Times. When questioned directly on the source of funds, in his crossexamination, he did elaborate on it. He stated, "some money was withdrawn from my PF account, some from bank account, some was taken from my relatives & friends, some money was withdrawn from Hindustan Times Credit & Thrift Society." The contention that he had no source of funds has, therefore, to be turned down, especially when the complainant is armed with the presumptions under the NI Act.
12. Ld. Counsel argued that the complainant did not file any document in his support to show that he had procured money from his PF account or from Hindustan Times Credit & Thrift Society. This argument of defence has no merit. It is to be noted that there is a presumption in favour of the complainant as regards passing of consideration. The complainant has not to prove the consideration. The Court has to presume that the cheque in question had in fact been issued by the accused to discharge a legal liability. Complainant is not required to prove the original transaction in the instant case, akin to civil suits, for the reason that the onus is squarely upon the accused to rebut the presumptions. And it is for the accused to rebut and dislodge the presumptions that are attached to the cheque. In the case reported as Johnson Scaria vs. State of Kerala, II (2007) BC 450, it has been held Suresh Chand Sharma Versus Ashok Kumar Sharma Page 9 of 11 that the complainant is not obliged to prove the original transaction or the original consideration as he is expected in a civil suit for recovery. It was further observed that the significance and the efficacy of Section 138 NI Act would be lost if Courts were to insist on proof of the original transaction and the original consideration in every indictment under Section 138 NI Act. It was for the accused to have got summoned the concerned official from Hindustan Times Credit & Thrift Society or from other department with the relevant record in his endeavour to negate the complainant's stand.
13. It was also argued that the complainant has not filed his income tax return to show that he had advanced the loan. Learned defence counsel could not show any statutory provision under the Income Tax Act 1961 or any other law which stipulates that a loan transaction not recorded in the income tax return would be void. (refer to Mukesh Gupta vs. P K. Bajaj & Anr., CS (OS) 1615/2003, date of decision - 20.11.2006, Delhi High Court) In this context, it bears repetition to state here that the complainant has shown that he was a man of means to advance the loan. It has already been observed hereinabove that the accused's contention that the complainant had no source of funds was without merit. Nonmention of loan in the tax return or evidence of its payment cannot help the case of the accused while we consider such defence in the light of evidence led at the trial .
14. It was pointed out that the complainant stated in his evidence that the cheque was given to him in Oct. 2005. It was thus urged that it was not possible for the documents Ex. PW1/D1 and Ex. PW1/D2, both executed on 18.01.2005, to have made a mention of the cheque. The complainant has already stated in his evidence that the cheque was a postdated one. A postdated cheque can very well find a Suresh Chand Sharma Versus Ashok Kumar Sharma Page 10 of 11 mention in a document executed before the date mentioned on the cheque. Even otherwise, on a bare perusal of the complaint, it is clear that the cheque was given as a post dated one.
15. It may be argued that the cheque was one for security as it was given as a post dated one to secure the loan. This stand would then be contradictory to the earlier stand that the cheque was misplaced. Both the stands cannot go together. Furthermore, the cheque was given under an understanding that the same may be utilised in future, if the payment was not forthcoming. This cheque, to my mind, was issued towards discharge of a liability, in future, if the accused did not pay as promised.
16. Therefore, what we find is that the accused has miserably failed to rebut and dislodge the statutory presumptions attached to the cheque in question. In view of the fact that the presumption attached to the cheque stands not rebutted, the accused is liable to be convicted for the offence u/s 138 NI Act. Therefore, this court holds accused guilty of the offence under section 138 Negotiable Instruments Act, 1881.
ANNOUNCED IN THE OPEN COURT M. P. SINGH
ON 30 October, 2012
th
MM/KKDDELHI
Suresh Chand Sharma Versus Ashok Kumar Sharma Page 11 of 11