Delhi District Court
Sh. Joginder Pal vs The State on 9 October, 2015
IN THE COURT OF SH AJAY GUPTA: ADDITIONAL SESSION
JUDGE4 (SHAHDARA), KARKARDOOMA COURTS , DELHI
Cr. Appeal No. : 13/15
UID NO : 02404R0153812015
In the matter of
Sh. Joginder Pal
S/o Late Sh. Khajan Singh,
R/o, H.No. 245, Gali No. 19,
Village Saboli, Delhi110093. . . . . . Appellant
versus
1. The State
Govt of NCT of Delhi
2. Shri Dalip Singh
s/o Late Sh. Phool Singh
R/o 218, Gali No. 21,
Village Saboli, Delhi110093 . . . . . Respondents
Final arguments heard :26.09.2015 Date of order :09.10.2015 Decision :Dismissed J U D G M E N T
1. The present appeal has been filed against the judgment Joginder Pal vs State Crl. Appeal No. 13/15 1/22 dated 10.03.2015 passed by Ld. MM, Shahdara, Delhi, in a complaint case bearing CC No. 206/08, titled as Sh. Dalip Singh v. Sh. Joginder Pal u/s 138 NI Act, whereby the appellant has been convicted u/s 138 Negotiable Instrument Act (hereinafter to be referred as NI Act) and order on sentence dated 08.04.2015 whereby appellant has been sentenced to undergo three months simple imprisonment and has also been directed to pay a compensation of Rs. 3,00,000/ to respondent no. 2 and in default of payment of compensation the appellant has been ordered to undergo one month simple imprisonment.
2. The brief facts of present case are that the respondent no. 2/complainant filed a complaint u/s 138 of N.I. Act against the appellant/accused(hereinafter both parties have been referred as per their nomenclature in the complaint) that complainant and the accused were having friendly relation and in the month of December 2007 the complainant gave a friendly loan of Rs. 2,70,000/ to the accused for a period of six months as accused was to repay his car loan. In the month of April 2008, the accused, to pay back the loan amount, issued post dated cheque bearing no. 143866 Joginder Pal vs State Crl. Appeal No. 13/15 2/22 dated 12.05.2008 amounting to Rs. 2,70,000/, drawn on ICICI Bank, Preet Vihar, Delhi. Complainant presented the said cheque with his banker i.e. Syndicate Bank, Nand Nagri, Depot Delhi, for encashment but the cheque got dishonoured for insufficient funds.
3. The complainant requested the accused for making the payment but accused did not pay the cheque amount and misbehaved and maltreated the complainant and flatly refused to pay the cheque amount, thus, complainant got issued a legal notice dt. 24.10.2008 to the accused for demanding the aforesaid amount through registered AD and U.P.C post but the accused neither replied the notice nor made the payment till the date of filing of the complaint. Thus, complainant filed the aforesaid complaint against the accused u/s 138 of N.I Act 1881.
4. On 11.12.2009, a notice u/s 251 Cr.P.C for commission of the offence u/s 138 N. I. Act was issued to accused to which he pleaded not guilty and claimed trial.
5. In support of his case, complainant examined himself as CW1. After completion of complainant's evidence the statement of accused was recorded under section 313 Joginder Pal vs State Crl. Appeal No. 13/15 3/22 Cr.P.C. wherein accused denied that he had taken the said loan from the complainant. Accused also denied the service of legal notice. Accused did not lead any evidence in his defence.
6. On completion of the trial ld. trial court convicted the accused and awarded the aforementioned sentence.
7. Now the present appeal has been filed by the appellant mainly of the following grounds:
(a) that ld. trial court failed to consider that no dates or events in regard to granting of loan was mentioned by the complainant. Complainant has failed to prove that he had friendly relation with the accused.
(b) That ld. trial court failed to consider that allegedly complainant gave loan to the accused to repay his car loan, however, accused never took any loan and no car loan was pending. Accused never purchased any car/scooter or bike and did not have any driving license.
(c) that ld. trial court failed to consider that the notice u/s 138 of N.I Act was not served as it was sent at incomplete and wrong address.
(d) That Ld. trial court failed to consider that accused had issued a blank cheque to the complainant as security in January 2007 against the amount of Rs. 10000/ for the membership in Lok Kalayan Samiti run by the complainant. Accused did not take loan of Rs. 270000/.
(e) That Ld. trial court failed to consider that complainant was doing money lending business in Saboli village in the name of Lok Kalayan Samiti and one another Samiti.
Joginder Pal vs State Crl. Appeal No. 13/15 4/22
(f) That ld. trial court failed to consider that the transactions was invalid and illegal as admittedly complainant did not mention this transaction in his ITR return. No case u/s 138 N.I Act is made out in case of illegal and invalid transactions.
(g) That ld. trial court failed to consider that as per income tax Act no cash loan worth Rs. 270000/ can be given without a receipt or document. An illegal transaction can not be enforced by law.
8. I have heard the submissions of Ld. counsel for the appellant/ accused and also Ld. counsel for the respondent no. 2/ complainant and gone through the record of the case.
9. It is held by Hon'ble Supreme Court in the case of 2000(2) SCC 745 titled as M/s Kusum Ignots & Alloys Ltd. Vs M/s Pennar Peterson Securities Ltd that to constitute an offence u/s 138 of Negotiable Instruments Act following requirements are to fulfilled:
(i) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account for the discharge of any debt or other liability;
(ii)that cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier;
(iii)that cheque is returned by the bank unpaid, either because of the amount of Joginder Pal vs State Crl. Appeal No. 13/15 5/22 money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank;
(iv)the payee or the holder in due course of the cheque 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 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice.
10.Now, let us see, if the aforesaid requirements have been fulfilled in the present case. Complainant claimed that he and accused were friends. The accused has disputed this fact and stated that he did not have any friendship with the complainant and he is one of the members of the society which was run by the complainant and he had issued the cheque in question (blank cheque) as a security against the membership amount of Rs. 10000/. The issue whether the accused had issued a cheque towards security (as contended by the accused) or repayment of the loan (as contended by the complainant) will be discussed in the later part of the order, however, it is clear from the contention of the accused that complainant and accused Joginder Pal vs State Crl. Appeal No. 13/15 6/22 were knowing each other very well.
11. It is undisputed that the cheque in question (ExCW1/1) was drawn and issued by the accused. It is further clear from the cheque returning memo (ExCW1/A) dated 10.10.2008 that the cheque in question was presented for encashment and it was dishonoured on account of funds insufficient in the bank account of the accused. It is further clear from the cheque returning memo that within 15 days of the return of the cheque a legal notice dt.24.10.2008 (ExCW1/3) was issued and dispatched on 24.10.2013 by the counsel of the complainant to the accused by Registered A/D & U.P.C (ExCW1/4 & EX CW 1/5).
12. The accused has disputed the service of the legal notice. The accused has contended that he was not served with the legal notice as the notice was sent at the wrong address and with incomplete address. The accused has apparently taken a false plea in regard to the service of legal notice. The legal notice was sent at Gali No. 18, Village Saboli, Near Kalawati Modern Public school, Delhi 110093 but accused has claimed that he is not residing at this address and he is residing at H. No. 245, Gali No.19, Joginder Pal vs State Crl. Appeal No. 13/15 7/22 Village Saboli, Nand Nagri, Delhi93. It is clear from the trial court record that in the memo of the parties complainant has mentioned the same very address of the accused upon which the legal notice was issued and it is further clear that the summons of the complaint were served upon the accused at this very address and accused had himself acknowledged the summons. It is further clear from the record that after putting appearance and joining the proceedings, accused furnished the bail bond wherein he again mentioned the same address. It is further clear from the trial court record that once accused had defaulted his appearance and NBW were issued against him at the same address and NBWs were received back unexecuted with the report that the accused was not available as he had gone out of station due to bereavement in his relation. It is clear from the report of NBWs that accused was very well residing at the address of legal notice, however, he was not found available as he was out of station. It is further clear from the trial court record that accused had moved an application u/s 140 of N.I Act seeking opportunity to cross examine the complainant and this Joginder Pal vs State Crl. Appeal No. 13/15 8/22 application was duly supported with the affidavit of accused. The accused had again mentioned the same very address in his affidavit. It is also clear that accused did not take the defence of non service of legal notice in his application. All these facts clearly shows that accused has taken a false plea of non service of legal notice on account of incomplete and incorrect address, though, accused was very well residing at the given address. It is also clear that initially the accused had himself mentioned the same address on record, however, later on accused took this defence of wrong and incomplete address which is clearly a false defence and an after thought. Thus, it is clear from these discussions that legal notice was sent at the correct address and therefore, in view of the provisions of section 27 of General Clauses Act the legal notice is presumed to be served on the accused. Since the legal notice was sent at the correct address, the onus was on the accused to rebut that the legal notice was not served upon him, however, accused did not lead any evidence to rebut the same. Thus, in view of law laid down by Hon'ble Supreme Court in the case of C.C. Alavi Hazi vs. Joginder Pal vs State Crl. Appeal No. 13/15 9/22 Palapetti Muhammed and Anr 2007 (6) SCC 555 the legal notice is presumed to be served upon the accused.
13.It is also clear from the record that accused did not pay the cheque amount neither within 15 days of the service of the legal notice nor thereafter. Thus, it is clear from the record that all necessary requirements to constitute the offence u/s 138 N.I. Act, have been fulfilled and now only element which is left to be seen is whether the accused had issued the cheque in question to the complainant towards repayment of loan amount. Before making any discussion on this point the legal position in regard to the presumption of section 139 & 118 (a) of N.I Act is required to be noted.
14. The claim based under the provisions of negotiable instruments act are exception to the general rule of law that burden of proof lies on the prosecution. There are two specific provisions in negotiable instruments acts i.e. section 118 (a) and 139 which contemplates that a presumption is attached in regard to each and every negotiable instrument that the same was drawn and issued against due discharge of the liability and thus, whenever any claim is made on the basis of a negotiable instrument, Joginder Pal vs State Crl. Appeal No. 13/15 10/22 the presumption has to be drawn in favour of the holder of the cheque (drawee) and the law has put the burden to rebut the presumption on the accused that the cheque was not issued by him against discharge of a debt or a liability. In case, the accused is not able to rebut the presumption and fails to prove his defence, the presumption become absolute and accused has to be assumed guilty of the offence. The relevant provisions of section 118 (a) and section 139 reads as under: Sec. 118 Presumptions to negotiable instruments.-Until the contrary is proved, the following presumption shall be made:-(a) of consideration- that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated, or transferred for consideration.
Sec. 139. Punishment in favour of holder: It shall be presumed, unless the contrary is provided, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.
15. It has been held by Hon'ble Supreme Court in the case reported as 2001 (6) SCC 16 titled as Hiten P. Dalal v. Bratindranath Banerjee that the presumption mentioned in section 139 of N.I. Act is a presumption of law and not presumption of fact and thus, this presumption has to be Joginder Pal vs State Crl. Appeal No. 13/15 11/22 drawn in favour of the drawee and burden to rebut the presumption with the probable defence is on the accused. The relevant para of the aforesaid case law reads as under:-
21. In other words, provided the facts required to form the basis of a presumption of law exist, no discretion is left with the Court but to draw the statutory conclusion, but this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary. 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" [Section 3 :
Evidence Act]. Therefore, the rebuttal does not have to be conclusively established but such evidence must be adduced before the Court in support of the defence that the Court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of reasonability being that of the 'prudent man'
16. It has been held by Hon'ble Supreme Court in the case of reported as 2010 (11) SCC 441 titled as Rangappa v. Mohan that presumption of section 139 of N.I. Act also includes the existence of legal enforceable debt. The relevant para of the said judgment reads as under:
14.In light of these extracts, we are in agreement with the Joginder Pal vs State Crl. Appeal No. 13/15 12/22 respondent- claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability.
17. In Bharat Barrel v. Drum Manufacturing AIR 1999 SC 1008, Hon'ble Supreme Court held that the accused has to rebut the presumption and mere denial of passing of consideration is no defence.
18.Thus, in view of the law laid down by Hon'ble Supreme Court in the aforesaid cases, the presumption as contemplated under section 139 N.I. Act has to be drawn in favour of the drawee that the cheque in question was issued in discharge of legally enforceable liability. Thus, in the present case also complainant was not required to prove the loan transaction and initially the claim of the complainant was to be assumed to be correct by drawing the presumption of section 139 of N.I. Act and burden to rebut the presumption with his probable defence was on the accused.
19.The accused was required to establish on record with his evidence the following defences taken by him:
(a) that the complainant was doing money lending business through his two societies i.e. Samaj Joginder Pal vs State Crl. Appeal No. 13/15 13/22 Kalayan Samiti and Lok Kalayan Samiti.
(b) That the accused had become member of the society namely Lok Kalayan Samiti and had taken Rs. 10000/ from the complainant and while taking the said amount the accused had issued a blank signed cheque to the complainant as security
20.Firstly, the accused was required to establish that complainant was doing the money lending business through his aforesaid two societies, however, the accused did not lead any evidence to establish his aforesaid claim. Accused has not examined any witness and also did not bring any document on record to prove that the complainant is the proprietor /sole authority of the said two societies. Even if it is assumed that some of the passbook of the said societies were filled up by the complainant would not ipso facto establish that the complainant is a money lender and the said societies are his proprietorship concerns.
21.The accused has claimed that he had taken a sum of Rs. 10,000/ from the complainant in January 2007 and while taking that amount he had handed over a blank cheque as Joginder Pal vs State Crl. Appeal No. 13/15 14/22 a security to the complainant, however, accused has not brought on record any document to show that he had only taken a loan of Rs. 10000/ from the complainant.
22.The accused has denied the service of the legal notice. However, in view of the discussion held above, the service of the legal notice stands proved. It is also clear from the record that the accused has taken a false plea in regard to correctness of his address and regarding the service of the legal notice. It is also clear that the plea of non service of legal notice taken by the accused is an after thought.
23. It is clear from the legal notice that complainant claimed in the legal notice that accused had taken a friendly loan of Rs.2,70,000/ from him and accused had issued the cheque in question in discharge of his aforesaid liability which got dishonoured. Thus it is clear that after the service of legal notice the accused must have come to know that the complainant would use the cheque in the legal proceedings to demand the said amount. However, accused kept mum and did not take any action whatsoever against the complainant for his allegedly misusing the cheque and making a false claim. If the cheque was issued Joginder Pal vs State Crl. Appeal No. 13/15 15/22 without consideration and complainant had issued a false notice, the accused must have taken appropriate action against complainant for his alleged misdeed but he kept silent. In the case reported as 2014(8) AD(Delhi) 26 and titled as 'Santosh Mittal Vs. Sudha Dayal, the Hon'ble High Court has held that the adverse inference to be drawn against the accused where accused has failed to controvert the allegation by sending a reply to the legal notice. The relevant para of the said case reads as under: '21. Admittedly, no reply to the legal notice was sent by her thereby rebutting the allegations made by the complainant. As far back in the year 1980, in Kaluram v. Sita Ram, 1980 RCR Note 44, it was held by this Court that when serious allegations are made in a notice and defendant failed to send any reply, then the allegations are deemed to have been admitted. Even in Rangappa (supra) relied upon by the learned counsel for the appellant it was observed that failure on the part of the accused to reply to the statutory notice under section 138 of the Act lead to inference that there was merit in complainant's version.'
24. It has been held by Hon'ble Delhi High Court in the case reported as 172 (2010) DLT 561 V.S. Yadav Vs. Reena that it is for the accused to rebut the presumption of section 139 of N.I. Act and also that under what circumstances he had issued the cheque to the Joginder Pal vs State Crl. Appeal No. 13/15 16/22 complainant as issuing a cheque is a serious business. It is also held that if the cheque was not issued in discharge of the debt then accused is supposed to take appropriate action seeking return of his cheque. In case the accused fails to establish the reason of issuance of cheque and also why he did not seek return of the cheque then it is to be assumed that he failed to rebut the presumption. The relevant portion of the para no.7 of the said case reads as under: 'In order to rebut the presumption under Section 139 of N.I. Act, the accused, by cogent evidence, has to prove the circumstance under which cheques were issued. It was for the accused to prove if no loan was taken why he did not write a letter to the complainant for return of the cheque.
Unless the accused had proved that he acted like a normal businessman/prudent person entering into a contract he could not have rebutted the presumption u/s 139 N.I. Act. If no loan was given, but cheques were retained, he immediately would have protested and asked the cheques to be returned and if still cheques were not returned, he would have served a notice as complainant. Nothing was proved in this case.
25. In the present case, the accused did not take any action seeking return of his cheque. The accused also did not reply to the legal notice. If the complainant would have Joginder Pal vs State Crl. Appeal No. 13/15 17/22 raised a false claim, the accused would have rebutted the same by sending a reply. In view of the aforesaid discussions it is held that accused has failed to prove his defence. Consequently, the presumption of section 139 of N.I. Act remained unrebutted and accordingly it is to be presumed that accused had issued the cheque in question towards the repayment of the loan amount.
26.In view of these discussions it is held that accused has failed to establish his defence.
27.Before proceeding further it is necessary to make discussions on the grounds raised by the accused in the present appeal as well as legal issues addressed by ld. counsel for the accused during arguments.
28.It is contended that complainant did not prove the loan transaction Since, the presumption stood established in favour of the complainant, hence, under these circumstances, the complainant was not required to prove the loan transaction. Even otherwise, it is not disputed that parties were known to each other. The accused has failed to establish that in what other manner the complainant came into possession of the cheque in question, if the Joginder Pal vs State Crl. Appeal No. 13/15 18/22 same was not handed over by him to the complainant towards repayment of the loan amount. The accused has contended that complainant has not brought on record any document regarding loan transaction and also that he was capable of paying the loan amount. This court does not find merit in this plea as accused failed to prove his defence and therefore, delivery of cheque by the accused to the complainant itself proves the loan transaction.
29.The accused has contended that he is not having any car, thus, there is no question of taking car loan and borrow any amount from the complainant to repay the car loan. This court does not find any merit in this ground as in the instant case the court was only required to see whether accused had borrowed a sum of Rs. 2,70,000/ from the complainant or not and it is clear from the aforesaid discussions that accused had taken a loan of Rs. 2,70,000/ from the complainant.
30.Ld. counsel further contended that the present loan transaction is an illegal and invalid loan transaction as admittedly complainant did not mention about the loan transaction in the income tax return and the complaint for Joginder Pal vs State Crl. Appeal No. 13/15 19/22 an illegal transaction is not maintainable. It has been held by Hon'ble High Court in Crl. L.P 567/2014 titled Lekh Raj Sharma versus Yash Pal Gupta that the complaint u/s 138 of N.I Act is maintainable even where the transaction is not shown in the income tax return.
31.Ld. counsel further contended that the accused had issued a blank cheque which has been misused by the complainant thus, the present complaint is not maintainable. It has been held by Hon'ble Delhi High Court in the case of Crl. L.P 567/2014 titled as Lekh Raj Sharma versus Yash Pal Gupta that in case the accused issues a blank cheque it means that accused is authorizing the complainant to fill up the due amount in the cheque and present the same for encashment. In the present case, the accused has failed to prove his defence that he had issued blank cheque towards the security and even if it is assumed that accused issued the blank cheque to the complainant, yet, in view of the settled law, it is to be assumed that he had authorized the complainant to fill up the due amount and present the cheque for encashment.
32.Ld.counsel also contended that the present complaint is Joginder Pal vs State Crl. Appeal No. 13/15 20/22 not maintainable as the complainant is doing a money lending business without having any license. The accused has simply contended that complainant is doing money lending business in the name of two societies,however, has not led any evidence to prove the same. It is well settled law that granting loan to friends and relative can not be said to be a money lending business. Further more, the bar of the provisions of Punjab Money lenders Act is not applicable to the complaint case filed u/s 138 of N.I Act. In this regard this court is supported by the case law reported as 2013 Crl. L.J 2593 titled as Virender Singh v. Deepak Bhatia.
33.Thus, in view of these discussions it is clear that accused has failed to rebut the presumption of section 139 of N.I Act, as he miserably failed to prove his defence, consequently, the presumption u/s 139 of N.I Act becomes absolute.
34.Ld. counsel for accused has cited the case laws in support of his aforesaid submissions. It is most respectfully observed that the case laws cited by Ld. counsel for the accused are not applicable to the peculiar facts and Joginder Pal vs State Crl. Appeal No. 13/15 21/22 circumstances of the present case.
35.Keeping in view the aforesaid discussions, this court does not find any infirmity in the order passed by learned MM. and holds that the appellant has been rightly convicted u/s 138 N.I Act. Hence, the present appeal is liable to be dismissed and accordingly, the same is dismissed.
36. Put up for argument on sentence on 13.10.2015.
(Ajay Gupta) ASJ-04/Shahdara/KKD Courts/Delhi.
(Announced in Open court on 09.10.2015) Joginder Pal vs State Crl. Appeal No. 13/15 22/22