Delhi District Court
Sandeep Sharma vs Kamla Sharma on 17 December, 2018
1
IN THE COURT OF MS. SNIGDHA SARVARIA : MM : NI ACT-03
(CENTRAL) : TIS HAZARI COURTS : DELHI.
CC No.509245/16
DATE OF INSTITUTION : 02.06.2016
DATE RESERVED FOR JUDGMENT: 11.12.2018
DATE OF JUDGMENT : 17.12.2018
IN THE MATTER OF:
Sh. Sandeep Sharma
S/o Lae Sh. Prem Nath Sharma
R/o H. No. IV/2320,
Gali no.5 Goverdhan Bihari Colony,
Shahdara, Delhi. ........Complainant
VERSUS
Mrs. Kamla Sharma,
W/o Late Sh. Prem Nath Sharma
R/o H. No. 803,
Ranjit Vihar, Part II,
Sector no. 23,
Dwarka, Delhi. ..........Accused
JUDGMENT :
a) Srl. No. of the case & Date of institution : 30813 & 29.04.2016
b) Date of commission of offence : on the 15th day of service
of legal demand notice
c) Name of the complainant :Sandeep Sharma
d) Name of the accused : Kamla Sharma
e) Nature of offence complained of : S. 138 NI Act
f) Plea of the accused person :Accused pleaded not
guilty
h) Final Order : Acquittal
i) Date of order : 17.12.2018
CC No. 509245/2016
Sandeep Sharma vs Kamla Sharma
2
COMPLAINT UNDER SECTION 138 OF
THE NEGOTIABLE INSTRUMENTS ACT,
1881
BRIEF STATEMENT OF REASONS FOR DECISION OF THE CASE:
JUDGMENT:
Brief facts
1. The brief facts of the present complaint filed U/s. 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as "NI Act") are that the accused is step mother of the complainant and she earlier filed a civil suit no. CS.75/2001 which was for recovery of possession and damages and the court presided over by Ld. ADJ, Sh. I.C. Tiwari, THC, Delhi decreed the said suit and the complainant was directed to hand over vacant possession of one room, one kitchen, one covered varandah and laterin and bath situated in property no. 8770-71, Shidpura, Karol Bagh, New Delhi-05 and assessed the damages/mesne profits at Rs.2000/- per month from 2001 till the delivery of possession of the said portion vie the said judgment and decree. The complainant and accused reconciled their differences and arrived at mutual amicable settlement which was reduced into writing vide settlement deed dated 06.05.2014 duly signed by the complainant and the accused and same was also notorised. Vide clause no.2 of the said deed the complainant/second party had agreed to hand over complete possession of the said portion to the accused/first party and he did so on or before 10.05.2014 and honestly complied with the terms of settlement. As per clauses 5 of the said settlement the complainant was not to object in the reconstruction of the said property and the reconstruction shall CC No. 509245/2016 Sandeep Sharma vs Kamla Sharma 3 disentitle the complainant from all the benefits given to him under the said settlement deed. It was also agreed that the accused shall pay Rs.1 crore to the complainant within a period of two years from the date of settlement deed executed by both the parties as per clause 4. At the time of taking over possession of one room set as mentioned herein above out of Rs.1 crore accused has paid Rs.5,00,000/- vide cheque no. 260664 dated 14.05.14 drawn on SBI, East Park road, Delhi and Rs.2,60,000/- was paid by the accused to the complainant in cash on 14.07.2015 against the dishonored cheque no.260665 drawn on SBI, Karol Bagh, New Delhi-05 and also paid Rs.2,40,000/- vide cheque no.260689 dated 08.06.2015 drawn on SBI, East Park road, Delhi against dishonored cheque of Rs.2,50,000/-. In terms of the settlement deed the accused sold two shops in the said property against registered sale deeds dated 16.02.15 and 09.7.15 and delilberately did not sell the third shop for the reasons best known to the accused but adversely effecting the right of the complainant to receive balance amount of Rs.90,00,000/-. The accused had also issued a cheque no. 260666 dated 06.05.16 drawn on SBI, East Park road, Delhi as post dated cheque and assured that same was towards discharge of her liability of Rs.90,00,000/- and would be honoured by her banker. Before presenting the said cheque the complainant had reminded the accused through legal demand notice dated 09.01.2016 and 29.04.2016 that cheque of Rs.90,00,000/- must be honoured on presentation. The complainant presented the said cheque with his banker but same was returned dishonoured with the remarks 'funds insufficient' vide return memo dated 10.05.16. Consequently, complainant got issued legal demand notice dated 11.05.16 upon the accused calling upon her to pay entire amount of Rs.90,00,000/- within 15 days of service of legal demand notice but instead accused gave a false reply dated 17.05.16 through CC No. 509245/2016 Sandeep Sharma vs Kamla Sharma 4 her counsel. The accused has not made any payment. Therefore the accused has committed an offence, which is an offence under the provision of Section 138 of NI Act.
Proceedings Before Court
2. In the present complaint summons were issued against the accused. The accused entered appearance and Notice of accusation was framed against the accused on 20.01.2017 to which accused pleaded not guilty and claimed trial. In the defence recorded on same date the accused stated that the cheque in question bears her signatures and details on the cheque were filled by the complainant and not by her. She admitted receiving of legal demand notice. She stated that the complainant is her son and there was a civil case regarding certain property between the complainant and herself which was decided in favour of the accused. She stated that when she requested the complainant to vacate the property then the complainant asked the accused to issue cheque in his favour and that is why she had issued the cheque in question. She stated that she had handed over a blank cheque to the complainant and no particulars were filled by her. She stated that she has no liability towards the complainant and she had paid Rs.10,00,000/- as well as by way of cheques to the complainant.
3. In support of his case the complainant examined himself as CW-1 and proved his affidavit in evidence as Ex.CW1/A, Ex.CW1/X1 (Ex.CW1/1 and Mark-A) i.e. settlement deed dated 06.05.2014, sale deeds dated 16.02.2015 as Ex.CW1/2 and sale deed dated 09.07.2015 as Ex.CW1/3, legal demand notice dated 09.01.2016 as Ex.CW1/4, postal receipts Ex.CW1/5 and Ex.CW1/6, second notice dated 29.04.2016 as Ex.CW1/7 and postal receipts as Ex.CW1/8 and Ex.CW1/9, cheque bearing no.260666 dated CC No. 509245/2016 Sandeep Sharma vs Kamla Sharma 5 06.05.2016 for Rs.90,00,000/- drawn on SBI, East Park road, Delhi as Ex.CW1/10, cheque return memo dated 10.05.2016 as Ex.CW1/11, legal notice dated 11.05.2016 as Ex.CW1/12 and postal receipts as Ex.CW1/13 and Ex.CW1/14, reply dated 17.05.2016 of legal demand notice as Ex.CW1/15. Complainant was also cross-examined at length. The complainant closed his complainant evidence on 21.08.2018.
4. Statement of accused u/s 313 Cr.P.C. was recorded on 27.10.2018 and 11.12.2018 wherein she has stated that the settlement deed Ex.CW1/X1 was executed by her under pressure by the complainant and other members of the family. She had no liability to pay to the complainant on 06.05.2014. She was not liable to pay any amount to the complainant for recovery of possession of the portion in possession of the complainant as same was already ordered to be vacated. She admitted issuing the cheque Ex.CW1/10 and signing it but stated that it was an undated cheque which was not liable to be presented by the complainant. She admitted receiving legal demand notice and that she had replied the same vide Ex.CW1/15. She stated that she has no liability to pay Rs.1 crore to the complainant and that the complainant has violated the terms of settlement deed by making complaints through his acquaintances regarding construction in the property of the accused. She stated that the cheque was not to be presented until sale of three shops. She has denied the case of the complainant.
5. The accused did not lead any evidence in his defence and the accused closed defence evidence on 04.12.2018.
6. I have heard counsel for the parties, perused the record and have gone through the relevant provisions of the law.
CC No. 509245/2016Sandeep Sharma vs Kamla Sharma 6 Findings
7. The following are the components of the offence punishable under Section 138 of Negotiable Instrument Act:-
(1) drawing of the cheque by a person on an account maintained by him with a banker, for payment to another person from out of that account for discharge in whole/part any debt or liability, (2) presentation of the cheque by the payee or the holder in due course to the bank, (3) returning the cheque unpaid by the drawee bank for want of sufficient funds to the credit of the drawer or any arrangement with the banker to pay the sum covered by the cheque, (4) giving notice in writing to the drawer of the cheque within 15 days of the receipt of information by the payee from the bank regarding the return of the cheque as unpaid demanding payment of the cheque amount, (5) failure of the drawer to make payment to the payee or the holder in due course of the cheque, of the amount covered by the cheque within 15 days of the receipt of the notice.
8. As regards the defence raised by the accused thats he did not fill the details in the cheque himself and had handed over blank signed cheque to the complainant, at this juncture it would be worthwhile to discuss the provisions under S. 20 and S. 118 of the Negotiable Instruments Act, which is as under:
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 or having written thereon an incomplete negotiable instrument, he thereby gives prima facie authority to the holder thereof to make or complete, as then case may be, upon it a negotiable instrument, 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, provided 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 CC No. 509245/2016 Sandeep Sharma vs Kamla Sharma 7 thereunder.
118. Presumptions as to negotiable instruments of consideration Until the contrary is proved, the following presumptions shall be made:
(a) of considerationthat every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;
(b) as to date that every negotiable instrument bearing a date was made or drawn on such date;
(c) as to time of acceptance that every accepted bill of exchange was accepted within a reasonable time after its date its date and before its maturity;
(d) as to time of transfer. that every transfer of a negotiable instrument was made before its maturity;
(e) as to order of endorsements that the endorsements appearing upon a negotiable instrument were made in the order in which they appear thereon;
(f) as to stampsthat a lost promissory note, bill of exchange or cheque was duly stamped;
(g) that holder is a holder in due course that the holder of a negotiable instrument is a holder in due course; provided that, where the instrument has been contained from its lawful owner, or form any person in lawful custody 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.
9. Further, in Mojj Engineering Systems Limited & Ors. Vs. A.B. Sugars Ltd.; 154 (2008) Delhi Law Times 579, the Hon'ble Delhi High Court had observed as under :-
7. Even otherwise, prima facie, it was the petitioners who had handed over the undated cheque for a certain amount to the respondent in terms of a contract between the parties. Since an undated cheque cannot be encashed, it can only mean that the petitioners had authorized the complainant to enter an appropriate date on it. In Young Vs. Grote (1827) 4 Bing. 253 it was held that when a blank cheque is signed and handed over, it means the person signing it has given an implied authority to any subsequent holder to fill it up. Similarly, in Scholfield Vs. Lord Londesborough (18951899) All ER Rep 282 it was held that whoever signs a cheque or accepts a bill in blank, and then puts it into circulation, must necessarily intend that either the person to whom he gives it, or some future holder, shall fill up the blank which he has left. This common law doctrine was also affirmed by Justice Macnaghten in Griffiths Vs. Dalton [1940] 2 KB 264 where it was held that the drawer of an undated cheque gives a prima facie authority to fill in the date. This aspect has also been incorporated in Section 20 of the Negotiable Instruments Act, which deals with Inchoate Stamped Instruments. The Supreme Court in T.Nagappa Vs. Y.R.Murlidhar, (2008) 5 SCC 633 while discussing the scope of Section 20 held that by reason of this provision, a right has been created in the holder of the cheque. Prima facie, the holder CC No. 509245/2016 Sandeep Sharma vs Kamla Sharma 8 thereof is authorized to complete the incomplete negotiable instrument. In that view of the matter, all further issues that may be raised by the petitioners regarding the nature and scope of the authority of the respondent to put any particular date on the cheque in question, are all matters for trial.
8. It is not as if the cheque came to be issued without any consideration whatsoever in the first place or that there was such a glaring defect in the complaint that the decision of the Trial Court to issue summons has ex facie resulted in miscarriage of justice or an abuse of the process of Court, and therefore interference under Section 482 Cr.P.C. to quash the proceedings is warranted in the interest of justice. The question whether the consideration for which the cheque was issued was ultimately satisfied or whether the cheque was wrongly sought to be encashed, are all issues that must also be decided at the trial. The Supreme Court in the case of M.M.T.C. Ltd. and Another Vs. MEDCHL Chemicals and Pharma (P) Ltd. and Another,(2002) 1 SCC 234 held as follows:
"13.....the wellsettled law that the power of quashing criminal proceedings should be exercised very stringently and with circumspection. It is settled law that at this stage the Court is not justified in embarking upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the complaint. The inherent powers do not confer an arbitrary jurisdiction on the court to act according to its whim or caprice. At this stage the Court could not have gone into merits and/or come to a conclusion that there was no existing debt or liability."
The Court further held that:
"17. There is therefore no requirement that the complainant must specifically allege in the complaint that there was a subsisting liability. The burden of proving that there was no existing debt or liability was on the respondents. This they have to discharge in the trial. At this stage, merely on the basis of averments in the petitions filed by them the High Court could not have concluded that there was no existing debt or liability."
10. From the aforesaid discussion, it is manifest that by reason of the provision under S. 20 NI Act, a right has been created in the holder of the cheque. Prima facie, the holder thereof is authorized to complete the incomplete negotiable instrument. Mere averment to the effect that the accused/drawer of the cheque did not fill in the details on the cheque except for signing on the cheque is not sufficient. Thus, merely that allegation of issuance of incomplete negotiable instrument does not create absolute defence in favour of the accused unless corroborative evidence exists to show that by threat or fraud, a cheque was taken. There is no law that a person drawing the cheque has to necessarily fill it up in his own handwriting. Respondent has not denied his signatures on the CC No. 509245/2016 Sandeep Sharma vs Kamla Sharma 9 cheques. Once he has admitted his signatures on the cheques he cannot escape his liability on the ground that the same has not been filled in by him. When a blank cheque is signed and handed over, it means that the person signing it has given implied authority to the holder of the cheque, to fill up the blank which he has left. A person issuing a blank cheque is supposed to understand the consequences of doing so. He cannot escape his liability only on the ground that blank cheque had been issued by him. Thus, this defence is of no assistance to the accused. (See also:Jaspal Singh vs State decided on 16.11.2016 by Hon'ble High Court of Delhi in Crl. Rev P. 160/2016; Lillykutty vs Lawrence - 2003 (2) DCR 610 (Ker) (DB) & Ravi Chopra vs State and Anr. - 2008n (2) JCC (NI) 169)
11. At the time of framing of notice on 20.01.2017 and statement under S. 313 CrPC recorded on 27.10.2018 the accused admitted the issuance of the cheques in question and also receiving of legal demand notice issued by the complainant. Since issuance of cheque in question by the accused is not disputed, hence, presumption U/s.139 of the NI Act is raised.
12. In Rangappa v. Sri Mohan AIR 2010 SC 1898 it was observed by the Hon'ble Supreme Court as under :
"14. In light of these extracts, we are in agreement with the respondentclaimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat (supra) may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a 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. However, there can be no doubt that there is an initial presumption which favours the complainant. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the CC No. 509245/2016 Sandeep Sharma vs Kamla Sharma 10 rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused/defendant cannot be expected to discharge an unduly high standard or proof. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of 'preponderance of probabilities'. 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. As clarified in the citations, the accused can rely on the materials submitted by the complainant and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own. " (emphasis added)
13. In view of the decision in Rangappa laid down by the Supreme Court, the presumption raised under Section 139 of the NI Act is of legally enforceable debt or liability and it is for the accused persons to raise a probable defence to rebut the presumption.
14. Section 139 NI Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the NI Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 Act is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 Act can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong those impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the defendant accused cannot be expected to discharge an unduly high CC No. 509245/2016 Sandeep Sharma vs Kamla Sharma 11 standard of proof.
15. The reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139 NI Act, 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. 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.
16. As discussed herein above, under S. 139 NI Act strong rebuttable presumptions in favour of the complainant arise but same can be rebutted by the accused by way of credible defence.
17. The defence raised by the accused is that the settlement deed Ex.CW1/X1 was executed by her under pressure by the complainant and other members of the family. She had no liability to pay to the complainant on 06.05.2014. She was not liable to pay any amount to the complainant for recovery of possession of the portion in possession of the complainant as same was already ordered to be vacated. She admitted issuing the cheque Ex.CW1/10 and signing it but stated that it was an undated cheque which was not liable to be presented by the complainant. She admitted receiving legal demand notice and that she had replied the same vide Ex.CW1/15. She stated that she has no liability to pay Rs.1 crore to the complainant and that the complainant has violated the terms of settlement deed by making complaints through his acquaintances regarding construction in CC No. 509245/2016 Sandeep Sharma vs Kamla Sharma 12 the property of the accused. She stated that the cheque was not to be presented until sale of three shops. She has denied the case of the complainant.
18. The complainant and the accused have admitted judgment and decree dated 14.07.2003 in civil suit no. 75/2001 in case titled Kamla Sharma vs Sandeep Sharma Ex D1. The accused has admitted signing of the settlement deed 06.05.2014 Ex CW1/X1 but has stated that same was signed under force and undue influence. But considering thatlike any ordinary prudent man the accused has not even made a police complaint with respect to forceful execution of Ex CW1/X1 thus the submission of the accused that she had signed Ex CW1/X1 under force and undue influence is not believable. Thus, clearly execution of Ex CW1/X1 is also admitted. The other contention of the accused is that the cheque was not be presented before selling of the three shops in the property bearing no. 8770-71, Shidipura, New Delhi-110005. It is relevant to reproduce clause 4 of said settlement deed 06.05.2014 Ex CW1/X1, which is as under:
'4. In consideration of the above, the first party has agreed to pay a sum of Rs. One crore only to the second party. This amount shall be payable to the second party within two years from the date of handing over possession of his portion by the second party to the first party or by the time sale of at least three shops in the newly built up proposed structure takes place, whichever is later.'
19. Admittedly, as per the own case of the complainant the accused had sold of two shops vide registered sale deeds dated 16.02.2015 and 09.07.2015. From clause 4 of settlement deed 06.05.2014 Ex CW1/X1 the amount of Rs. 1 Crore was to be paid to the complainant within 2 years of handing over of the possession of the portion in possession of the complainant in the said property bearing no. 8770-71, Shidipura, New Delhi-110005 or sale of atleast 3 shops in the newly built up property bearing CC No. 509245/2016 Sandeep Sharma vs Kamla Sharma 13 no. 8770-71, Shidipura, New Delhi-110005, whichever was later.
Admittedly third shop was not sold of by the accused till presentment of cheque in question and filing of the present complaint. Thus, clearly, the contingency on which the payment of Rs. 1 Crore was dependant had not taken place at the time of presentment of the cheque in question sis not take place so clearly, the amount mentioned in the cheque in question of Rs. 90 Lakh is not a legally recoverable debt. ( S. 31 of the Indian Contract Act). Thus, the debt in question is not a legally recoverable debt or liability owed by the accused to the complainant. (See also: M/s. Collage Culture & Ors. Vs Apparel Export Promotion Council & Anr. - 2007 (4) JCC NI 388)
20. The contention of the complainant that the accused deliberately did not sell the third shop till presentment of the cheque in question has not been proved by the complainant by leading cogent evidence i.e. evidence of prospective buyers whom the accused refused to sell the third shop etc. thus, the version of the complainant in this regard is not believable.
21. The decision in T.P. Murugan vs Bojan decided on 31.07.2018 by Hon'ble Apex Court; K.N. been avs Muniappan decided on 18.10.2001 by the Hon'ble Supreme Court of India;K Bhaskaran vs. Sankaran Vaidhyan Balan & Anr. Decided by Hon'ble Supreme Court of India on 29.09.1999 & Goa Plast (P) Ltd vs Chico Ursula D'souza decided by Hon'ble Apex Court on 20.11.2003 relied upon by the complainant are not applicable in the facts of the present case as are decided on different fact situation and cannot be applied like a Euclid's Theorem in the facts of the present case.
22. In view of the aforesaid reasons, the court finds that the accused CC No. 509245/2016 Sandeep Sharma vs Kamla Sharma 14 has been able to prove probable defence and the complainant has failed to rebut the defence of the accused.
23. In view of the foregoing discussion, the accused Kamla Sharma is acquitted of offences punishable under S. 138 NI Act.
Digitally signed by SNIGDHA SNIGDHA SARVARIA
SARVARIA Date:
(Announced in open 2018.12.17
Court on 17.12.2018 ) 16:35:55 +0530
(Snigdha Sarvaria)
MM/NI Act-03/Central.
17.12.2018
Judge Code: 0530
CC No. 509245/2016
Sandeep Sharma vs Kamla Sharma