Delhi District Court
Kotak Mahindra Prime Ltd vs Kamlesh Kumar on 26 August, 2011
IN THE COURT OF SH. NAVJEET BUDHIRAJA, METROPOLITAN
MAGISTRATE, SPECIAL COURT - 06, DWARKA COURTS, NEW DELHI.
KOTAK MAHINDRA PRIME LTD.
VS
KAMLESH KUMAR
P.S.: CANNAUGHT PLACE
U/S: 138 NEGOTIABLE INSTRUMENTS ACT
1.Serial No./CC No. of the : 25603/1 case
2. Name of the complainant : Kotak Mahindra Prime Ltd.
17th Floor, Ambadeep, 14, Kasturba Gandhi Marg, New Delhi - 110 001
3. Date of institution : 25.01.2010
4. Name of the accused, his : Kamlesh Kumar parentage and residence J 558C23, Gali No. 8A, Baljeet Nagar, New Om Medical Store, New Delhi Also at Kamlesh Kumar, Kamlesh Store, R 2532, Road No. 21A, Prem Nagar Road, Baljeet Nagar, New Delhi - 110 008
5. Date when judgment was : 05.07.2011 reserved
6. Date when judgment was : 26.08.2011 pronounced
7. Offence complained of and : Section 138 Negotiable Instruments Act proved
8. Plea of accused : Pleaded not guilty and claimed trial CC No. 25603/1 1 of 20
9. Final Judgment : Accused found guilty of offence under Section 138 Negotiable Instrument Act and convicted for the same.
: J U D G M E N T : 1 Vide this judgment, I shall decide the present complaint filed by the complainant Kotak Mahindra Prime Ltd. under Section 138 of Negotiable Instruments Act (hereinafter referred to as "NI Act") against the accused Kamlesh Kumar. 2 Factual matrix of the present case is that the complainant is a company duly incorporated in the Companies Act, 1956 having its office in New Delhi and is engaged in the business of financing, leasing and granting of loans. It is averred that complainant has granted loan to the accused vide loan agreement number 157584 dt.14.09.2009 and accused towards the part payment of the aforesaid loan had issued a cheque bearing number 68969 dt. 14.12.2009 in a sum of Rs.8,446/ which when presented for encashment returned unpaid vide returning memo dt. 17.12.2009 with the reason "Insufficient Funds". Thereafter, complainant through its counsel sent a notice in writing to the accused through Registered AD on 21.12.2009 demanding the payment of the said cheque within 15 days of the receipt of the notice. It is further averred that accused failed to make the payment thereby committing offence under Section 138 NI Act for the prosecution of which the present complaint has been filed. 3 After taking cognizance of the offence summons were issued to the accused post which accused entered appearance and was admitted to bail on 18.05.2010.
CC No. 25603/1 2 of 20 Thereafter, notice under Section 251 Cr.P.C encompassing all the accusations against the accused was served upon the accused to which he pleaded not guilty and claimed trial.
4 In complainant's evidence, complainant got examined the authorized representative of the complainant as CW1 [AR for the complainant], who tendered his evidence by way of affidavit which is Ex.CW1/B. Other documents relied upon by the AR for the complainant are copy of the board resolution dt. 20.11.2007 which is Ex.CW1/1, cheque Ex.CW1/2, memo dt. 17.09.2009 which is Ex.CW1/3, legal notice which is Ex.CW1/4, postal receipts Ex.CW1/5 and Ex.CW1/6.
5 In cross examination, AR for the complainant stated that that loan was sanctioned for Rs.88,152/ which was to be repaid in 36 EMI's of Rs.4,223/ each and accused has made payment of 7 EMI's till date. It is further stated that payment of EMI was to be made by way of cheque as well as ECS. AR denied the suggestion that the payment of EMI was to be made only by way of ECS. AR further stated that he cannot say how many cheques were taken from the accused at the time of disbursement of the loan. AR further stated that bank has taken 8 EMI's post dated cheques duly filled up from the accused at the time of disbursement of the loan and out of the 8 post dated cheques, 4 post dated cheques were of Rs.4,223/ each and rest of the cheques were amount of Rs.8,446/ each. AR admitted that EMI of Rs.4,223/ was payable on monthly basis but denied the suggestion that above stated 8 cheques were given in blank prior to signing of loan agreement as security. AR further stated that accused has given the CC No. 25603/1 3 of 20 cheque in question duly filled up dt. 14.12.2010 for an amount of Rs.8,446/ at the time of disbursement of the loan. Thereafter, AR filed the statement of the accused for the period of October, 2007 to March, 2009 which is Ex.CW1/8. AR further stated that EMI was due on 1st of every month. AR further denied the suggestion that legal notice Ex.CW1/4 was never served upon the accused. The delivery report of the legal notice is Ex.CW1/9 and Ex.CW1/10. Lastly, AR for the complainant denied the suggestion that complainant has filed a false case against the accused by using the security cheque given by the accused prior to the signing of the loan agreement. Complainant's evidence stood closed vide order dt. 27.10.2010.
6 Complainant's evidence was followed by statement of the accused under Section 313 Cr.P.C read with 281 Cr.P.C wherein accused admitted to have availed the loan of Rs.88,152/ from the complainant bank vide loan account number 157584. Accused also admitted that the cheque in question bore his signature but stated that the body of the cheque was not filled by him. Accused denied to have receive any legal notice but stated that the address mentioned in the legal notice is correct and he is residing at the given address. Accused further stated that the cheque in question was issued as security at the time of availing the loan. Lastly, he stated that he wanted to lead defence evidence.
7 In defence evidence, accused got examined himself as DW1 wherein he stated that he has taken loan from the complainant bank which was topup for Rs.88,152/ payable in 36 installments of Rs.4,223/ each through ECS mode. He further stated that he had given 8 to 10 blank cheques to the complainant before the signing of CC No. 25603/1 4 of 20 the agreement for security purpose. He further stated that he had not received the legal demand notice from the complainant and he came to know about the pendency of the present complaint after receiving the summons from this court. Lastly, he has stated that complainant has filed the false complaint against him and he had no legal liability against the cheque in question because the EMI was payable through ECS mode every month. In cross examination, accused admitted his signatures on the cheque Ex.CW1/2 and also admitted that personal loan cum guarantee agreement dated 14.09.2007 bears his signature at 4 places and is in respect of the loan amount of Rs. 88,152/. He further admitted that the first address mentioned in the legal notice is his correct address and he has been residing at the same address for the last 25 years. He further admitted that till date he had paid only 7 installments to the complainant bank. On being asked whether there is any clause in the loan agreement wherein it has been mentioned that you are liable to pay EMI's only through ECS and not by way cheque he stated that he was told that the loan was to be repaid through ECS mode and not through cheques. He further stated that he cannot say as to whether the two cheques bearing number 68972 and 68964 which was for a sum of Rs. 4,223/ were cleared from his account towards the loan account in question.
8 Accused also got examined DW2 Sh. Anil Dhiman, Dealing Assistant, Speed Post Centre, New Delhi who got exibited the letter dated 01.04.2011 through by Speed Post Centre, New Delhi as Ex.DW2/A and photocopy of the delivery slips duly signed by the Superintendent, Speed Post Centre, New Delhi as Ex.DW2/D. It was further stated that as per the document EX.DW2/D the speed post letter bearing number CC No. 25603/1 5 of 20 ED854231874IN and ED854231865 is being received by one Manisha on 24th December, 2009. Opportunity was given to the complainant to cross examine the witness DW2, but complainant chose not to cross examine him and the matter got fixed for final arguments. 9 Learned counsels for complainant and accused addressed their respective final arguments at length. Before appreciating the evidences and arguments of both the parties, it would be appropriate to advert to the relevant provisions of N.I Act.
Section 138 of N.I Act reads as under
Section 138 of NI Act reads as under: S. 138 Dishonour of cheque for insufficiency, etc. of funds in the account
- where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement make with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may extend to twice the amount of the cheque or with both.
Provided that nothing contained in this section shall apply unless
(a) The cheque has been presented to the bank within a period of six months from the bank within a period of six months from the date on which it was drawn or within the period of its validity, whichever is earlier.
(b) The payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque, within 15 days of the receipt of the said notice.
CC No. 25603/1 6 of 20 Explanation - For the purposes of this section, "debt or other liability"
means a legally enforceable debt or other liability.
10 Section 138 of the NI Act has three ingredients, viz., (i) that there is a legally enforeceable debt; (ii) that the cheque was drawn from the account of bank for discharge in whole or in part of any debt or other liability which pre supposes a legally enforeceable debt; and (iii) that the cheque so issued had been returned due to insufficiency of funds. The proviso appended to the said section provides for compliance of legal requirements before a compliant petition can be acted upon by a court of law. 11 I would now embark upon the evidences adduced and the arguments advanced by both the parties.
Ld. Counsel of complainant has relied upon followed judgments : ➢ Constellation Enterprises Pvt Ltd & Anr. Vs. P.E.C. Limited, DCLR 2006 (1) Delhi 747 ➢ Smt. Kamlesh Saini Vs. The State & Anr., DCLR 2006 (1) Delhi 753 ➢ Martui Udyog Ltd. VS. Narender & Ors, (1999) Supreme Court Cases 113 ➢ K.N.Beena Vs. Muniyappan & Anr (2001), 8 Supreme Court Cases 458 ➢ K. Bhaskaran Vs. Sankaran Vaidhyan Balan, Supreme Court of India, Criminal Appeal No. 1015 of 1999.
Ld. Counsel of accused has relied upon followed judgments : ➢ Fragrant Leasing & Finance Company Ltd. & Anr. Vs. Jagdish Katuriya & Anr., 2007 Crl. L. J.3880.
➢ Santokh Singh Vs. State of Punjab, 2003, Crl. L. J.2925.
CC No. 25603/1 7 of 20 12 First limb of argument advanced by learned counsel for the accused is that
the cheque in question is a blank signed cheque given by the accused at the time of disbursement of the loan for security purpose and the particulars of the cheque were not filled by him and the complainant by filling the particulars of the cheque has committed material alteration under section 87 of the NI Act. To fortify his submissions, Counsel for the accused has relied upon Judgment of Allahabad High Court in Fragrant Leasing and Finance company and another v. Jagdish Katuriya and another 2007 Cri. L.J. 3880. To controvert the aforesaid argument, learned counsel for the complainant has contended that cheque was duly filled up post dated cheque issued by the accused towards the partial discharge of his liability.
13 With regard to this argument, I would like to refer to Section 20 of N.I Act which contains provision regarding "inchoate instrument".
20. Inchoate stamped instruments - Where one person signs and delivers to another a paper stamped in accordance with the law relating to negotiable instruments then in force in [India], and either wholly blank of having written thereon an incomplete negotiable instrument, he thereby gives prima facie authority to the holder thereof to make or complete, as the case may be, upon it a negotiable instrument, for any amount specified therein and not exceeding the amount covered by the stamp. The person so signing shall be liable upon such instrument, in the capacity in which he signed the same, to any holder in due course for such amount; provide that no person other than a holder in due course shall recover from the person delivering the instrument anything in excess of the amount intended by him to be paid thereunder.
14 In "Ravi Chopra v. State and another" 2008 (102) DRJ 147, it was held by Hon'ble Justice Murlidhar, that even if the body of the cheque is filled in different ink by CC No. 25603/1 8 of 20 some person other than the accused, still the instrument will be valid. Following paragraphs are worth mentioning: "18. Section 20 NI Act talks of "inchoate stamped instruments" and states that if a person signs and delivers a paper stamped in accordance with the law and "either wholly blank or have written thereon an incomplete negotiable instrument" such person thereby gives prima facie authority to the holder thereof "to make or complete as the case may be upon it, a negotiable instrument for any amount specified therein and not exceeding the amount covered by the stamp." Section 49 permits the holder of a negotiable instrument endorsed in blank to fill up the said instrument "by writing upon the endorsement, a direction to pay any other person as endorsee and to complete the endorsement into a blank cheque, it makes it clear that by doing that the holder does not thereby incurred the responsibility of an endorser." Likewise Section 86 states that where the holder acquiesces in a qualified acceptance, or one limited to part of the sum mentioned in the bill, or which substitutes a different place or time for payment, or which, where the drawees are not partners, is not signed by all the drawees, all previous parties whose consent has not been obtained to such acceptance would stand discharged as against the holder and those claiming under him, unless on notice given by the holder they assent to such acceptance. Section 125 NI Act permits the holder of an uncrossed cheque to cross it and that would not render the cheque invalid for the purposes of presentation for payment. These provisions indicate that under the scheme of the NI Act an incomplete cheque which is subsequently filled up as to the name, date and amount is not rendered void only because it was so done after the cheque was signed and delivered to the holder in due course."
"19. The above provisions have to be read together with Section 118 NI Act which sets out various presumptions as to negotiable instruments. The presumption is of consideration, as to date, as to time of acceptance, as to transfer, as to endorsement, as to stamp. The only exception to this is provided in proviso to Section 118 which reads as under:
Provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him."
"20. A collective reading of the above provisions shows that even CC No. 25603/1 9 of 20 under the scheme of the NI 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 at a subsequent point in time and presented for payment by the drawee. There is no provision in the NI Act which either defines the difference in the handwriting or the ink pertaining to the material particulars filled up in comparison with the signature thereon as constituting a 'material alteration' for the purposes of Section 87 NI 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 NI Act." 15 Also in a recent Judgment in "D. Atchyutha Reddy v. State of A.P"
through Public Prosecutor 2010(2) RCR 880(A.P) it was held that cheque could be filled up by anybody if it is signed by the account holder of the cheque. It was further held that body of the cheque need not necessarily be written by the accused and it can be in the handwriting of anybody else or typed on a machine, so long as the accused does not dispute the genuineness of the signature on the cheque.
16 Regarding the issue of security cheque, I would like to refer to the following judgment. In Moideen v. Johny 2007(1) Civil Court Cases 220 (Kerala) , it has been held by Kerala High Court in Paragraph 6 that: "...........Even if a blank cheque is issued as security, the person in possession of the blank cheque can enter the amount of the liability and present it to the bank. When a blank cheque is issued by one to another, it gives an authority on the person to whom it is issued, to fill up at the appropriate stage with the necessary entries regarding the liability and to present it to the bank."
CC No. 25603/1 10 of 20 17 In the judgment relied upon by the counsel for the complainant i.e,
Constellation Enterprises (Supra) it has been held in para 14 of the judgment that "even if a post dated cheque in given as security and the payment is not made as promised then the said post dated cheques itself becomes payable because that is the agreement and understanding between the parties, otherwise the security would have no meaning." 18 From the aforesaid, it is amply clear that to fasten criminal liability upon the accused under Section 138 of the Act it is not necessary that body of the cheque must be filled by the accused. What is important is the signature on the cheque which in the present complaint is admitted by the accused in his statement under Section 313 Cr.P.C and also in his cross examination. Also from the aforesaid discussed case laws, it is clear that when a person hands over a blank cheque even for security purpose, it must be assumed that such person gives implied authority to the person that the cheque is given to fill up the relevant details. Although, complainant has denied in its cross examination that cheque in question was issued blank still even if it is assumed that the accused had given blank cheque to the complainant still in such a case a deemed authority is given to fill the details of the cheque. As regards the judgment cited by counsel for the accused in Fragrant Leasing (Supra), I hold that in the said judgment Hon'ble Justice gave the finding of material alteration in the cheques under Section 87 of NI Act as there was cutting on the dates on the cheques which is not so in the present complaint, therefore, the said judgment is not applicable to the facts of the present complaint. Hence, this argument of the learned counsel for the accused is without any force. 19 Another argument raised by counsel for the accused is that Loan was supposed to be repaid through ECS (Electronic Clearing System) and therefore cheque in CC No. 25603/1 11 of 20 question could not have been issued to pay the installment towards loan amount. It is further argued by learned counsel for the accused that monthly installment of the accused was Rs 4,223/ and therefore cheque could not have been issued for a sum of Rs 8,446/ .In support of his contention, he has drawn the attention of the court to the cross examination of CW1 wherein he has admitted that EMI of Rs 4,223/ was payable on monthly basis. In retort, learned counsel for the complainant argues that it is nowhere mentioned in the loan agreement that loan was to be repaid through ECS only and that accused has not placed on record any document showing that he had paid his monthly installments through ECS. To substantiate his argument, he has invited the attention of the court to the cross examination of CW 1 wherein it has been stated by the witness that accused could pay his monthly installments by way of cheque or ECS. Learned counsel for the complainant has further drawn the attention of this court to the statement of account of the accused Ex CW1/8 and stated that statement clearly shows that two cheques bearing no. 68972 and 68964 amounting to Rs 4,223/ each were cleared from the account of the accused.
20 I find force in the argument of learned counsel for the complainant as accused has failed to prove that ECS was the only mode of payment of installments towards the Loan amount. Merely deposing that payment had been made through ECS only would not advance the cause of the accused. In the cross examination of the accused, he was asked whether there was any clause in the loan agreement which mandated that installments have to be paid through ECS only and not through cheque to which he replied that he was told at the time of handing over of the cheques that loan was to be repaid through ECS mode. Accused also feigned ignorance when he was asked in CC No. 25603/1 12 of 20 his cross examination that two cheques bearing no 68972 and 68964 were cleared from his account towards the loan but the statement of account Ex.CW1/8 clearly shows that the aforesaid two cheques were cleared in favour of the complainant bank. Regarding the contention of learned counsel for the accused that since, EMI was payable on monthly basis therefore accused could not have issued the cheque of Rs 8,446/ for two monthly installments, I hold that there is no bar in issuing the cheque of two monthly installments collectively. CW1 has categorically stated that out of the 8 post dated cheques taken, 4 cheques were of the amount Rs 4,223/ and rest of the 4 cheques were of the amount Rs. 8,446. In view of the aforesaid discussion, it cannot be said that ECS was the only mode of repayment of the loan and cheque in question could not have been issued by the accused towards the loan.
21 Another limb of argument advanced by learned counsel for the accused is that legal demand notice as envisaged by proviso to Section 138 of the Act has not been received by the accused which is sine qua non for prosecution of the complaint under S.138 of the Act. Learned counsel for the accused has invited the attention of this court to the testimony of DW2 from speed post centre who produced document Ex.DW2/B which shows that the speed post letter bearing no. ED854231874IN and ED854231865IN i.e Ex.CW1/5 and Ex CW1/6 has been received by one Manisha.
22 In retort, learned counsel for complainant has averred that statutory notice dated 21.12.2009 was issued at the correct address of the accused by speed post and notice is deemed to be served by virtue of presumption under section 27 of General CC No. 25603/1 13 of 20 Clauses Act.
23 It is no longer res integra that service of legal demand notice calling upon the accused to make the payment in 15 days is indispensable for prosecution under Section 138 of the Act. Before giving my finding on the aforesaid issue, a reference to S.27 of the General Clauses Act will be useful. The section reads as under:
"S.27 Meaning of service by post Where any Central Act or Regulation made after the commencement of this Act authorizes or requires any document to be served by post, whether the expression "serve" or either of the expressions "give" or "send" or any other expression is used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing, pre paying and posting by registered post, a letter containing the document, and unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post."
24 The Supreme Court in "K. Bhaskaran Vs. Sankarn Vaidhyan Balan"
(supra), wherein it has been held as under:
"(24) No. doubt Section 138 of the Act does not require that the notice should be given only by "post". Nonetheless the principle incorporated in Section 27 (quoted above) can profitably be imported in a case where the sender has despatched the notice by post with the correct address written on it. Then it can be deemed to have been served on the sendee unless he proves that it was not really served and that he was not responsible for such nonservice. Any other interpretation can lead to a very tenuous position as the drawer of the cheque who is liable to pay the amount would resort to the strategy of subterfuge by successfully avoiding the notice."
CC No. 25603/1 14 of 20
25 In "V. Raja Kumari vs P. Subbarama Naidu & Anr" 2004 (8) SCC 774 , it
was held:
In "Madhu v. Omega Pipes Ltd." [1994 (1) ALT (Crl.) 603 (Kerala)] the scope and ambit of Section 138 clauses (b) and (c) of the Act were noted by the Kerala High Court and Justice K.T. Thomas (as His Lordship was then) observed as follows:
"In Clause (c) of the proviso the drawer of the cheque is given fifteen days from the date 'of receipt of said notice' for making payment. This affords clear indication that 'giving notice' in the context is not the same as receipt of notice. Giving is the process of which receipt is the accomplishment. The payee has to perform the former process by sending the notice to the drawer in his correct address, if receipt or even tender of notice is indispensable for giving the notice in the context envisaged in Clause (b) an evader would successfully keep the postal article at bay at least till the period of fifteen days expires. Law shall not help the wrong doer to take advantage of his tactics. Hence the realistic interpretation for the expression 'giving notice' in the present context is that, if the payee has dispatched notice in the correct address of drawer reasonably ahead of the expiry of fifteen days, it can be regarded that he made the demand by giving notice within the statutory period. Any other interpretation is likely to frustrate the purpose for providing such a notice."
26 In "M/s Indo Automobiles v. M/s Jai Durga Enterprises and others"
2008 (4) RCR (Civil) it was held that once the notice demanding payment has been sent by registered post with acknowledgment due to a correct address, it must be presumed that the service has been made effective.
27 In M/s Prakash Jewellers v. M/s A .K Jewellers 2002 (2) JCC 1171, division bench of the Delhi High Court has specifically opined that the notice under section 138 of NI Act can be served either through registered post or UPC. It is also held that if notice is even dispatched by UPC with correct address of the drawer written on it, presumption of the service of the said notice arises. Relevant discussion is contained in CC No. 25603/1 15 of 20 para 10 of the judgment which is reproduced below:
10 "As it is section 138 does not prescribe any mode for giving of demand notice by the payee or holder of the cheque.But where such notice is served by post through registered post or postal certificate etc. with the correct address of the drawer written on it , it would raise a presumption of service unless the drawer proves that it was not received by him in fact and that he was not responsible for such nonservice. This is in tune with the principle embodied in section 27 of the General Clauses Act or even Rule 19 A of Order
11.Section 27 of General Clauses Act deals with the presumption of service of notice sent by post and provides that service of such notice shall be deemed to have been affected unless the contrary is proved. This principle is equally applicable to the service of notice for purpose of section 138 of the Negotiable Instruments Act also......."
28 So it is quite clear from S.27 of General Clauses Act and catena of Judgments that when a letter is properly addressed, prepaid and posted by registered post, service shall be deemed to be effected at the time at which the letter would be delivered in the ordinary course of post.
29 As can be seen from ExCW1/4 and ExCW1/5, the statutory notice was addressed to the residence of the accused at J558C23, Gali no. 8A, Baljeet Nagar, Near Om medical store, Delhi 8. It is pertinent to note that the accused did not dispute the correctness of his residential address as furnished on the statutory notice in his statement under Section 313 Cr.P.C and admitted that he has been living at the said address. Further, the accused in his cross examination has admitted that the first address mentioned in the legal notice and the complaint is his correct address and he has been living at this address for the last 25 years. Moreover summons were issued to the accused on the address mentioned in the complaint which is same as on legal notice post CC No. 25603/1 16 of 20 which accused entered appearance. Also the Apex Court in K.Bhaskaran (supra) has held that where the sender has despatched the notice by post with the correct address written on it. Then it can be deemed to have been served on the sendee unless he proves that it was not really served and that he was not responsible for such nonservice. Although DW2 has produced the record Ex DW2/B which shows that one Manisha has received the letter having postal receipt no. ED 854231865IN i.e ExCW1/5 but then there is no rule or law which provides that letter addressed to any particular person must be received by him personally. In the absence of the person concerned, letters may be received by any one on his behalf. In the circumstances of the case and for the above reasons, I hold that statutory notice was sent to the correct address of the accused and therefore I hold that the notice is deemed to be served. The contention of learned counsel for the accused that notice was not served on the accused does not pass any muster.
30 Now comes the most important ingredient of Section 138 of N.I Act which is the issuance of the cheque for the discharge in whole or in part of a debt. At this juncture, it would be appropriate to refer to the provisions in Section 118 and 139 of N.I Act. Under Section 118, unless the contrary is proved, it is to be presumed that the Negotiable Instrument (including a cheque) had been made or drawn for consideration. Under section 139 the Court has to presume, unless the contrary was proved, that the holder of the cheque received the cheque for discharge, in whole or in part of a debt or liability. Thus, in complaints under Section 138 the court has to presume that the cheque had been issued for a debt or liability. This presumption is rebuttable. However, the burden of proving that a cheque had not been issued for a debt or liability is on the accused. The CC No. 25603/1 17 of 20 Supreme Court in "Hiten P. Dalal V. Bratindranath Banerjee", 2001 Crl. L.J 4647 while dealing with sections 138 and 139 of NI Act held that whenever a cheque was issued to the complainant for a specific amount, there is a presumption that it is towards discharge of legally enforceable debt. In the event of dispute, the burden is on the accused to prove that there is no subsisting liability as on the date of issuing of cheque and the proof must be sufficient to rebut the presumption and mere explanation is not sufficient. So, there is obligation on the part of the Court to raise the presumptions under Sections 118 and 139 of the NI Act in every case where the factual basis for raising of the presumption had been established.
31 Recently the Apex Court in Rangappa v. Mohan AIR 2010 SC 1898 has held that the presumption mandated by S.139 of the Act does indeed include the existence of legally enforceable debt or liability. This is of course in the nature of rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. 32 So it is quite clear from the above that there is an initial presumption in favour of the complainant that the cheque has been received for the discharge of debt or liability which needs to be rebutted by the accused. In the present complaint, accused has cross examined the complainant witness but nothing material could be elicited which can advance the cause of the accused. In his examination in chief and cross examination, accused has admitted availing loan of Rs 88,152/ from the complainant which was to be repaid in 36 monthly installments of Rs 4,223/ each and also admitted his signature on the cheque in question. He has also admitted that till date he has paid only 7 installments CC No. 25603/1 18 of 20 towards the repayment of his loan .Also the document Ex CW1/8 i.e the statement of account pertaining to the accused evinces that on 14.12.2009 i.e the date of the cheque in question Rs 1,02,614.46/ was outstanding against the accused. Counsel for the accused has not disputed that this much amount was not outstanding against the accused or raised any objection as to the genuiness or authenticity of the statement of account. Although accused has stated that the cheque was issued blank and not towards the discharge of any legal liability but merely deposing the same, without placing on record any material will not be sufficient to rebut the presumptions, therefore in these circumstances, I hold that accused has failed to discharge the onus that cheque in question was not issued for a debt or liability, hence the presumption that has arisen in favour of the complainant under section 139 of N.I Act stands unrebutted. 33 The complainant has proved basic facts of borrowing of loan and issuing of Ex.CW1/2 cheque by the accused. Once the basic facts stand proved by the complainant, he discharges the initial burden. Then, it is for the accused to rebut the presumptions that are drawn in favour of the complainant under Sections 118 and 139 of the N.I Act. He can make out his case from material brought on record by the complainant. Though complainant witness was cross examined by the accused, nothing material was elicited to rebut the presumptions under Sections 118 and 139 of N.I Act. It was suggested to CW1 that complainant obtained blank cheques as security for the loan availed by the accused. The said suggestion was denied by CW1.DW1 accused has admitted his signature on the cheque in question and also admitted the debt or liability towards the complainant.
CC No. 25603/1 19 of 20 34 Thus the complainant is able to establish that the accused borrowed loan
of Rs 88,152/ and issued Ex PW1/2 cheque amounting to Rs.8,446/ dated 14/12/2009. On presentation of the cheque, it came to be dishonoured with the remarks "Insufficient funds" vide return memo Ex.PW1/3 and thereupon the complainant issued Ex.PW1/4 notice calling upon him to make good the amount covered under the cheque in question. The accused received the notice but failed to give any reply. The complainant presented the complaint. All the essential ingredients of Section 138 N.I Act have been made out by the complainant. Therefore, the accused stands convicted for the offence under Section 138 of N.I Act.
ANNOUNCED IN THE OPEN (NAVJEET BUDHIRAJA)
COURT ON 26.08.2011 METROPOLITAN MAGISTRATE
SPECIAL COURT 06,
DWARKA COURTS, DELHI.
CC No. 25603/1 20 of 20
IN THE COURT OF SH.NAVJEET BUDHIRAJA,
METROPOLITAN
MAGISTRATE, SPECIAL COURT06, DWARKA COURTS, NEW DELHI. In the matter :
KOTAK MAHINDRA PRIME LTD.
.........................Complainant
VERSUS
KAMLESH KUMAR
................................ Accused
CC No : 25603/1
PS : Cannaught Place
Under Section : 138 Negotiable Instruments Act
Present : None for the complainant.
Convict in person with his counsel.
O R D E R O N S E N T E N C E
1 Despite repeated calls none appeared on behalf of the complainant.
Arguments on the point of sentence heard today on behalf of the convict.
2 Counsel for the convict submits that convict is 51 years old and the sole bread owner of the family having one son of 21 years of age who is studying and 1 daughter of marriageable age, therefore, lenient view may be taken against the convict.
3 Keeping in mind the fact that the apex court has time and again reiterated that while imposing sentence for offence under Section 138 of NI Act, the stress should be on the pecuniary aspect rather than the punitive aspect and also the recent judgment of the apex court in the case of "Kaushilya Devi Massand Vs. Roop Kishore" 2011 (2) RCR Civil where in it was held that offence under Section 138 of NI Act is almost in the nature of civil wrong which has been given criminal overtones and court can impose fine payable as compensation to the complainant without awarding Jail sentence.
CC No. 25603/1 21 of 20 4 Therefore, in view of the aforesaid facts and circumstances of the case and
keeping in mind the object of the legislation, convict is sentenced to pay compensation of Rs.12,000/ to the complainant and in default of payment of compensation to be sentenced to simple imprisonment for 1 month.
5 Convict is granted time of 30 days to pay the compensation amount of Rs.12,000/ to the complainant.
6 Copy of the order be given free of cost to the convict.
ANNOUNCED IN THE OPEN (NAVJEET BUDHIRAJA)
COURT ON 02.11.2011. METROPOLITAN MAGISTRATE
SPECIAL COURT 06,
DWARKA COURTS, DELHI.
CC No. 25603/1 22 of 20