Delhi District Court
Smt. Preeti Pahwa vs . Sh. Sanjay Singhal on 5 July, 2018
IN THE COURT OF Ms. TANYA BAMNIYAL: MM (N.I.ACT): SOUTH-
EAST DISTRICT, SAKET COURTS COMPLEX: NEW DELHI
Smt. Preeti Pahwa Vs. Sh. Sanjay Singhal
CC No.622690 of 2016
U/s 138 Negotiable Instruments Act, 1881
1. CIS no. : 622690/2016
2. Name of the complainant : Smt. Preeti Pahwa
F-119, Rajouri Garden,
New Delhi-110027
3. Name of the accused , : Sh. Sanjay Singhal
parentage & residential Proprietor
address M/s Sunny Trading Company
208, Tilak Bazaar, Khari
Baoli, Delhi-110006
4. Offence complained of or : U/s 138 of Negotiable
proved Instruments Act, 1881
5. Plea of the accused : Pleaded not guilty and
claimed trial
6. Final Judgment/order : Convicted
7. Date of judgment/order : 05.07.2018
Date of Institution : 17.10.2015
Date of Reserving Judgment/Order : 25.05.2018
Date of Pronouncement of Judgment/Order : 05.07.2018
JUDGMENT
1. By way of the present Judgment, I shall dispose off the present complaint filed by Smt. Preeti Pahwa (hereinafter referred to as 'complainant') against Sh. Sanjay Singhal (hereinafter referred to as 'accused') u/s 138 of Negotiable Instruments Act, 1881 r/w Section 142 Negotiable Instruments Smt. Preeti Pahwa Vs. Sh. Sanjay Singhal page 1 of 11 Act, 1881 (hereinafter referred to as 'N.I. Act' in short).
2. Accused has furnished bail bond u/s 437A Cr.P.C.
Brief facts of the case:
3. The case of the complainant, as narrated in the complaint is that the complainant is a homemaker who has filed the present complaint in her personal capacity. Further, the complainant is the wife of late Sh. Varinder Pahwa who passed away in September, 2014. The accused approached the complainant's husband in the month of April, 2014 for the purpose of giving a friendly loan to him as the accused was in need of money and Sh. Pahwa so as to help him in his time of need agreed to grant him the said loan. Accordingly, Sh. Varinder Pahwa transferred an amount of Rs.4,00,000/- in the account of the accused on 03.04.2014. After the death of Sh. Pahwa, the complainant and her daughter approached the accused to make the said payment as they were in need of financial support and in view of the fact that the accused was supposed to repay the said amount as the same was taken by the accused a long time back. Thereafter on complainant's insistence, the accused agreed to make the payment and issued a cheque bearing no.204703 drawn on Union Bank of India, Khari Baoli from its account for the entire sum of Rs.4,00,000/-.
4. When the complainant presented the cheque in question the same was returned unpaid by the banker of the complainant namely Allahabad Bank, Jasola Branch, New Delhi-25 with the remarks "Account Closed". Thereafter, the complainant sent the legal demand notice through her counsel dated Smt. Preeti Pahwa Vs. Sh. Sanjay Singhal page 2 of 11 24.09.2015. But, the accused failed to make the payment against the dishonoured cheque within 15 days of the date of service of the legal demand notice. Hence, the present complaint was filed.
Proceedings before court:
5. Notice u/s 251 Cr.P.C. was framed against the accused on 24.09.2016 to which he pleaded not guilty and claimed trial.
6. To prove her case, complainant filed her evidence by way of affidavit Ex. CW1/A and relied upon the following documents :-
(a) The original cheque in question bearing no.204703 Ex. CW1/1.
(b) Original returning memo dated 05.09.2015 Ex. CW1/2.
(c) Copy of legal demand notice dated 24.09.2015 Ex. CW1/3.
(d) Postal receipt of speed post Ex. CW1/4.
(e) Original envelopes returning the legal notice Ex.CW1/5.
(f) Copy of the bank statement of the complainant Mark A.
7. The accused admitted his signature and issuance of the cheque in question. The accused stated in his plea of defence u/s 251 Cr.PC as under:
"I used to take money from the husband of the complainant through bank entries and issued cheque to the husband of the complainant. Husband of the complainant returned all the cheques against the payment received from Smt. Preeti Pahwa Vs. Sh. Sanjay Singhal page 3 of 11 him against the bank entries. I issued the cheque in question in blank to the husband of the complainant but he did not return the said cheque despite receiving back the payment of Rs.4,00,000/-."
8. Thereafter the complainant was cross examined and discharged on 30.01.2018. On 23.03.2018. Statement of the accused u/s 313 Cr.PC and the entire incriminating evidence was put to the accused u/s 313 Cr.PC. The accused stated that the accused does not know the complainant. He only knew the husband of the complainant. The accused admitted that there used to be frequent transactions between him and the husband of the complainant, whenever the need arose and the cheque in question might have come in the possession of the husband of the complainant. The accused further also disputed the liability in tune with the cheque amount and the receiving of the legal demand notice from the complainant. The accused further stated that the cheque in question is misused by the complainant against the accused.
9. The accused chose not to lead any evidence in his defence and closed his defence evidence vide separate statement on 23.03.2018.
Arguments on behalf of both the Parties:
10.The Ld. counsel for the complainant argued that on the same lines as mentioned in the complaint. It was further argued that the accused admitted his signature and issuance of cheque to the husband of the complainant. He further argued that accused failed to raise the probable defence to disprove the case of complainant and to rebut the Smt. Preeti Pahwa Vs. Sh. Sanjay Singhal page 4 of 11 presumption U/s 139 NI Act. Therefore, accused be convicted for the offence U/s 138 NI Act.
11.Per contra, Ld. counsel for the accused argued that there used to be frequent transactions between the accused and the husband of the complainant, but the complainant has filed the case in her individual capacity and not aware about any transaction between the accused and the husband of the complainant and the same is also admitted by her during the trial. Moreover the cheque in question was never given by the accused to the complainant. Hence the complainant is not the payee of the cheque in question. Therefore, the complainant could not have filed the complaint in respect of the cheque in question. Further, the cheque in question was issued by the accused to the husband of the complainant as a security cheque which has been misused by the complainant.
Hence, the present complaint should be dismissed. Reasons for Decision:
12.I have heard the arguments on behalf of the complainant and the accused and also considered the evidence on record.
13. As far as the contention of the Ld. Counsel for accused that the complaint is not maintainable in respect of the cheque in question is concerned, Section 142 of the Negotiable Instruments Act states that the complaint can be filed either by the payee or holder in due course of the cheque.
In Chander Babu Vs. Ramani II (2004) BC 152 (DB), the Kerala High Court has after drawing reference to Sections 7,9,53,75,78 and other case laws on the entitlement of a Smt. Preeti Pahwa Vs. Sh. Sanjay Singhal page 5 of 11 legal representative to initiate legal action against the drawer held that the legal representative of the payee can file a complaint under Section 138 NI Act and observed:
" Apart from the above, in this case, complainant holds the cheque after the death of the payee as a legal heir and she is entitled to possess the same in her own name and in view of Section 53, being a legal heir, she is a holder in due course and he can get a full discharge. The party was CC No.16/11 free to pay the amount to her and to get back the cheque. In view of Section 53 of the Act, legal heir of the payee or holder in due course can maintain a complaint under section 138 of the Act".
(emphasis added) In Smt. Bhagava Vs. Shri Kadaisiddeshwara Trading ILR 2004, KAR 367, it was observed that :
" Having regard to the factual aspects and the settled principles of law in this regard, in the opinion of this Court, on the death of the payee, his legal heirs steps into the shoes of the payee for all practical purposes and such a person can also file and prosecute the complaint after completing the legal formalities. It is also necessary to mention that it would be incumbent upon the Complainant to prove that the Complainant is the legal representative of the deceased payee, in the event of accused disputing the same. In the case on hand, the payee had died and the wife of the payee, as the legal heir, had presented the cheque in question and on the cheque being dishonored, legal notice had also been issued and thereafter, the proceedings had been initiated under Section 138 of the NI Act" (emphasis added).
14. In view of the case law cited above, the court finds that the contention of the accused that the complaint in respect of the cheque in question is not maintainable as the complainant is not the payee cannot be sustained. The legal heir of the payee and in the present case, the wife of the payee of the cheque in question has stepped into the shoes Smt. Preeti Pahwa Vs. Sh. Sanjay Singhal page 6 of 11 of her husband and view of the Section 53 of the N.I. Act, the complainant Ms. Preeti Pahwa, being the holder of the cheque has derived the title and the right of holder in due course and was competent to file a criminal complaint u/s 145(2) of N.I. Act.
15.Further the accused in his plea of defence u/s 251 Cr.PC admitted his signature on the cheque in question and also admitted the issuance of the cheque in question to the husband of the complainant. Now once these foundational facts are admitted and a factual basis is established, by virtue of Section 118(a) and Section 139 of the NI Act a presumption of the cheque having been issued in discharge of a legally sustainable liability and drawn for good consideration, arises.
Section 118 of the N.I Act provides :-
"Presumptions as to negotiable instruments:
Until the contrary is proved, the following presumptions 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, indorsed, negotiated or transferred was accepted, indorsed, negotiated or transferred for consideration;"
Section 139 of the N.I Act further provides as follows:
"Presumption in favour of holder - It shall be presumed, unless the contrary is proved, that the holder of a Smt. Preeti Pahwa Vs. Sh. Sanjay Singhal page 7 of 11 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"
16. Hence it is clear that, as per the scheme of the N.I Act, on proof of foundational facts - a presumption arises as to the cheque having been issued in discharge of a legal liability, and the burden of proof lies upon the accused to rebut the said presumption.
17. In the present case the accused in his statement recorded under section 313 Cr.PC states that he did not receive the legal demand notice from the complainant. The Hon'ble Supreme Court of India in case titled as C.C. Alavi Haji v. Palapetty Muhammed(2007) CrLJ 3214 has held that :-
18. "It is, thus, trite to say that where the payee dispatches the notice by registered post with correct address of the drawer of the cheque, the principle incorporated in Section 27 of the GC Act would be attracted; the requirement of Clause (b) of proviso to Section 138 of the Act stands complied with and cause of action to file a complaint arises on the expiry of the period prescribed in Clause (c) of the said proviso for payment by the drawer of the cheque. Nevertheless, it would be without prejudice to the right of the drawer to show that the had no knowledge that the notice was brought to his address." It is further observed that "It is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of criminal law, where there is no stipulation of giving of a notice before filing a complaint. Any drawer who claims that the did not receive the notice sent by post, can, within 15 days of the receipt of summons from the court in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of the receipt of the summons from the court along with the copy of the complaint under Section 138 of the Act, cannot obviously content that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the GC Act and Section 114 of the Evidence Act."
19. In the present case,the complainant sent the Legal Demand notice Ex.CW1/3 through registered postal receipt Ex. CW1/4 Smt. Preeti Pahwa Vs. Sh. Sanjay Singhal page 8 of 11 and Ex. CW1/5 at the correct address of the accused. Accused did not lead any evidence that he was not residing at the given address. Therefore, u/s 27 General Clauses Act and in view of the observations of the Hon'ble Apex Court in the case of C.C. Alavi Haji v. Palapetty Muhammed (supra), it can be safely presumed that the legal demand notice Ex.CW1/3. was duly served upon the accused. Moreover, accused did not tender the cheque amount within 15 days after receiving the summons from this court.
20.With regard to the plea of the accused that he had taken a loan of Rs.4,00,000/- from the complainant and the cheque in question was handed over in blank to the complainant and have been misused, I may take note of the following decision:
The Delhi High Court in the Jammu and Kashmir Bank Vs. Abhishek Mittal, Crl. A. No.294/2011 (Decided on 26.05.2011) held that:
"The plea taken by the Respondent that the blank cheques had been given by him is of no consequence. Respondent has admitted his signatures on the cheques. 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 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 Smt. Preeti Pahwa Vs. Sh. Sanjay Singhal page 9 of 11 cannot escape his liability only on the ground that blank cheque had been issued by him."
(emphasis supplied).
Assuming, that the cheque had been handed over to the complainant-
in blank by the accused, the purpose was to enable the complainant to encash it, in the event that the loan was not repaid. Thus, the accused gave an implied authority to the complainant to fill up the cheque and encash it, also this defense cannot be raised in view of 20 of N.I. Act.
21. Moreover, in order to probabilities the defense of the accused except self serving evidence and suggestion made to CW1, no material are elicited in the cross examination of CW1 nor produced any material. Further, no steps have been taken by the accused to get back the cheque in question if the same remained with the husband of the complainant. Hence, the adverse inference is to be drawn against the accused.
22. In the present case in hand, the accused did not lead any evidence and pertinently did not himself appear as a witness, when it is his case that he has no liability towards the complainant. The accused shied away from facing the cross examination by the complainant- a factor which discredits his defence. Hence in light of this, it can be concluded that the accused did not bring on record any credible material, oral or documentary which should lead the court to conclude that the defence, explanation for issuance of the dishonored cheque is a probable one. On the other Smt. Preeti Pahwa Vs. Sh. Sanjay Singhal page 10 of 11 hand, the complainant while producing Ex.CW1/6 has proved that the amount of Rs.4,00,000/- was debited from the account of the complainant on 03.04.2014 to the bank account of the accused. Thus the complainant has been able to prove all the ingredients u/s 138 of the N.I. Act beyond reasonable doubt.
23. Conclusion:
In view of the aforesaid findings, this court is of the considered opinion that accused is not able to adduce a probable defence in his favour and could not successfully rebut the presumption u/s 139 of Negotiable Instruments Act. Hence, accused Sh. Sanjay Singhal is convicted for the offence u/s 138 N.I. Act.
Announced in the open court (Tanya Bamniyal) on 05.07.2018 MM(N.I. Act):SED: Saket Courts, New Delhi Smt. Preeti Pahwa Vs. Sh. Sanjay Singhal page 11 of 11