Delhi District Court
Manish Arora vs . Satish Madaan on 19 August, 2017
CA No.57/17
Manish Arora Vs. Satish Madaan
IN THE COURT OF VIKAS DHULL, SPL. JUDGE,
(PC ACT), CBI 03, DWARKA COURTS, NEW
DELHI
CA No. 57/17
ID No. 138/17
CNR No. DLSW010030842017
In the matter of :
Manish Arora
C10, 2nd Floor, Milap Nagar
Uttam Nagar
New Delhi110059.
... Appellant
Versus
Satish Madaan
R/o DG3/76, Vikaspuri
New Delhi110018.
... Respondent
Date of institution of revision petition : 27.03.2017
Date on which revision petition treated
as an appeal : 10.08.2017
Date on which judgment reserved : 10.08.2017
Date on which judgment pronounced : 19.08.2017
1/24
CA No.57/17
Manish Arora Vs. Satish Madaan
JUDGMENT
1. Vide the present appeal, the appellant has challenged the judgment dated 17.02.2017 of the ld.trial court (hereinafter referred to as the impugned judgment) vide which ld.trial court convicted the appellant for the offence under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the NI Act) and sentence order dated 02.03.2017 of the ld.trial court (hereinafter referred to as the impugned sentence order) vide which appellant was sentenced to pay compensation amounting to Rs.4,20,000/ to the respondent and in default of payment of compensation amount, appellant shall be liable to undergo simple imprisonment for a period of six months.
2. The brief facts which are relevant for deciding 2/24 CA No.57/17 Manish Arora Vs. Satish Madaan the present appeal are that respondent/ complainant had filed a complaint under Section 138 of the NI Act against the appellant alleging therein that appellant was having friendly relations with the respondent/complainant and in the month of January, 2010, appellant had made a request for friendly loan of Rs.2,10,000/ for a period of six months and having regard to the friendly relations, said loan was advanced by respondent to the appellant.
3. It was alleged that thereafter, appellant had issued a cheque of Rs.2,10,000/in the month of July, 2010 which on representation was returned unpaid with the remarks "payment stopped by the drawer". Thereafter, a legal notice was issued to the appellant demanding payment of cheque amount but despite receipt of the same, appellant did not make any payment. Accordingly, a 3/24 CA No.57/17 Manish Arora Vs. Satish Madaan complaint under Section 138 of the NI Act was filed before the ld.trial court.
4. Appellant was summoned and thereafter, notice under Section 251 Cr.P.C. was framed against appellant to which appellant pleaded not guilty and claimed trial.
5. At trial, respondent/complainant had examined himself as CW1 and appellant had examined himself as DW1 in his defence.
6. No other witness was examined by either of the parties.
7. The ld.trial court after hearing arguments and after perusing the evidence which had come on record, had held, vide the impugned judgment, appellant guilty for the offence under section 138 of the NI Act and had sentenced the appellant vide the impugned sentence order.
4/24 CA No.57/17Manish Arora Vs. Satish Madaan
8. Aggrieved by the impugned judgment and impugned sentence order, appellant has preferred the present appeal.
9. Notice of the appeal was issued to the respondent. On being served, respondent chose not to file any reply.
10. I have heard Sh.Rajinder Singh Bhalla, Ld.counsel for the appellant and Sh.Deepak Kohli , Ld.counsel for the respondent. I have also summoned the trial court record and have carefully perused the same.
11. It was contended by the ld.counsel for appellant that in the present case, ld.trial court had ignored the evidence of independent nature which would have established the innocence of the appellant.
12. It was submitted that in the present case, 5/24 CA No.57/17 Manish Arora Vs. Satish Madaan cheque was dishonoured in the year 2010 and the ld.trial court ignored the fact that "stop payment"
instructions were given way back in the year 2007 by appellant to his banker as two persons by the names of Naresh Chopra and Honey Kapoor, to whom the cheque in question alongwith one blank signed cheque was given, had misused the same.
13. It was further submitted that even the ld.trial court did not consider the police complaint dated 09.01.2008 with respect to two blank signed cheques having been misused by Naresh Chopra and Honey Kapoor.
14. It was further submitted that ld.trial court also ignored the fact that appellant was not personally known to the respondent/complainant. Therefore, there was no question of respondent/complainant advancing loan of Rs.2,10,000/ to the appellant.
6/24 CA No.57/17Manish Arora Vs. Satish Madaan
15. It was further submitted that respondent/ complainant did not know any of the family members of the appellant. Therefore, probability of respondent/complainant advancing loan of Rs.2,10,000/ without interest is quite remote.
16. It was further submitted that respondent/ complainant himself was a person of meager means. Therefore, it is highly unbelievable that he would have advanced Rs.2,10,000/ to the appellant without even knowing the appellant.
17. It was further submitted that there was no inconsistency in the defence of appellant.
18. It was further submitted that since in the present case, it has come on record that respondent/complainant had given the amount of Rs.2,10,000/ in cash, therefore, it was in violation of Section 269SS of the Income Tax Act and respondent/complainant was liable for penalty 7/24 CA No.57/17 Manish Arora Vs. Satish Madaan under Section 271D of the Income Tax Act.
19. It was further submitted that since consideration of the agreement was a cash loan, therefore, it is not a valid contract as per Section 10 of the Indian Contract Act, 1872.
20. It was further submitted that as per Section 68 of the Indian Stamp Act, 1899, it is illegal to issue a post dated cheque. Accordingly, it was prayed that since impugned judgment has been passed in contravention of the Income Tax Act, Indian Stamp Act and Negotiable Instruments Act, therefore, same is liable to be set aside and appellant be acquitted.
21. On the other hand, ld.counsel for respondent/ complainant had submitted that impugned judgment of the ld.trial court calls for no interference, as in the present case, defence of appellant had been different at different stages of 8/24 CA No.57/17 Manish Arora Vs. Satish Madaan trial which makes his defence unreliable and untrustworthy.
22. It was submitted that appellant did not produce any banker in his defence to prove that he had issued "stop payment instructions" with regard to cheque in question way back in December, 2007. Therefore, since there was no evidence on record, the question of ld.trial court ignoring the same, does not arise.
23. It was further submitted that police complaint dated 09.01.2008 Mark X1 was duly considered by the ld.trial court and in para 14 of the impugned judgment, said police complaint has been dealt with and said complaint was found to be not made in respect of the cheque in question.
24. It was submitted that respondent/ complainant had deposed in his evidence that he became friendly with appellant as he used to got 9/24 CA No.57/17 Manish Arora Vs. Satish Madaan electrical works done from the appellant as appellant was having a shop of electrical repair appliances in the area of Vikaspuri.
25. It was further submitted that said fact was not disputed by appellant and even in the evidence as DW1, appellant had affirmed on oath that he was having a shop of electrical appliances in Vikaspuri. Therefore, the evidence of respondent/ complainant regarding his knowing the appellant due to doing electrical job at the shop of respondent/complainant stands corroborated by the evidence of appellant himself. Therefore, there was no question of respondent/complainant not knowing the appellant and the submission made by appellant in this regard is required to be rejected.
26. It was further submitted that in the present case, neither Naresh Chopra nor Honey Kapoor 10/24 CA No.57/17 Manish Arora Vs. Satish Madaan have been examined by appellant in his defence to show on the preponderance of probabilities that cheque in question was given to Naresh Chopra as security against loan taken from him.
27. Even the complaint made by appellant to the police Mark X1 only mentions about one cheque and not two cheques as is the defence of appellant in this case. Therefore, evidence, which had come on record do not in any way established, on preponderance of probabilities, that cheque in question was not given to respondent/complainant but was given to Naresh Chopra.
28. It was further submitted that there is an admission made by appellant that cheque in question bears his signatures but there is no evidence led on record to show that other details in the cheque are not in his handwriting.
29. It was submitted that just because 11/24 CA No.57/17 Manish Arora Vs. Satish Madaan respondent/complainant had given the loan in cash, will not make the liability to be legally unenforceable. It was submitted that by giving loan in cash, in violation of the Income Tax Act, the contract does not become illegal as per Section 10 of the Indian Contract Act, 1872. Accordingly, a prayer was made to dismiss the appeal.
30. I have considered the rival submissions and have carefully perused the trial court record.
31. The first contention of the appellant that there is no inconsistency in the defence of appellant deserves to be rejected.
32. In the present case, prior to filing of complaint, defence which was disclosed by appellant by way of reply dated 26.07.2010 Mark X2, to the legal notice issued by respondent/ complainant, was that cheque in question is part of the cheques which were fraudulently obtained by 12/24 CA No.57/17 Manish Arora Vs. Satish Madaan Naresh Chopra and Honey Kapoor for which police complaint was given at police station on 07.01.2008.
33. However, after filing of complaint and at the stage of framing of notice, appellant admitted of having issued cheque but stated that he had issued the cheque to Naresh Chopra as security against loan of Rs.10,000/ taken from him which stands repaid to Naresh Chopra. Therefore, at the stage of framing of notice, appellant had taken a contradictory defence to what was taken in his reply dated 26.07.2010 Mark X2.
34. Further, during the cross examination of respondent/CW1, a new defence was taken up by appellant by suggesting to respondent/CW1 that cheque in question was in fact issued to Honey Kapoor for the purpose of securing loan for the appellant and it was Honey Kapoor, who misused 13/24 CA No.57/17 Manish Arora Vs. Satish Madaan the cheque in question by handing over the same to Naresh Chopra.
35. In the entire crossexamination of respondent/CW1, not a single suggestion was given by appellant regarding giving of cheque as security with regard to loan of Rs.10,000/ taken from Naresh Chopra, which was the defence taken up by the appellant, at the stage of framing of notice under Section 251 Cr.P.C.
36. Thereafter, at the stage of examination of appellant under Section 313 Cr.P.C., appellant again had changed his defence and had stated that he had issued the cheque to Naresh Chopra against loan of Rs.10,000/.
37. Yet another change was made by appellant in his defence when appellant was examined as a defence evidence as DW1 wherein it was deposed by appellant that he had met Naresh Chopra 14/24 CA No.57/17 Manish Arora Vs. Satish Madaan through Honey Kapoor and he had taken loan of Rs.40,000/ from Naresh Chopra and as security of the same, he had issued two cheques which includes cheques in question and he had only returned the part payment of Rs.20,000/ to Naresh Chopra. Therefore, above discussion shows that defence of appellant is highly inconsistent and has changed at every stage of trial. This inconsistency of defence of appellant goes to show that defence of appellant is not worthy of trust and the defence of appellant do not in any way rebut the presumption under Section 139 of the NI Act.
38. The other contention of appellant that he had given a police complaint on 07.01.2008 Mark X1 with respect to two blank signed cheques against Naresh Chopra and Honey Kapoor also do not create any doubt in the case of respondent/ complainant.
15/24 CA No.57/17Manish Arora Vs. Satish Madaan
39. I have carefully perused the complaint dated 07.01.2008 Mark X1 and in the said complaint, it is mentioned in para 4 that appellant had handed over one blank signed cheque and one blank signed stamp paper to Naresh Chopra but no loan was provided either by Naresh Chopra or by Honey Kapoor and his cheque was misused by filling up the amount of Rs.6 lacs. In the entire complaint Mark X1, number of the blank signed cheque allegedly given to Naresh Chopra, was never mentioned and even otherwise, as per the case of appellant, only blank cheque allegedly given to Naresh Chopra was filled up with the amount of Rs.6 lacs.
40. The cheque in question is of Rs.2,10,000/. Therefore, complaint Mark X1 was also with regard to cheque in question, is not acceptable. The complaint Mark X1 only talks about misusing 16/24 CA No.57/17 Manish Arora Vs. Satish Madaan of one blank signed cheque by mentioning the amount of Rs.6 lacs. Therefore, complaint Mark X1 also did not establish that the cheque in question was given to Naresh Chopra for the purpose of security for arranging a loan of Rs.40,000/.
41. Even otherwise, it is not believable that any reasonable person will give two blank signed cheques for the purpose of taking one loan. Even one cheque would have sufficed, if appellant intended to give cheque as security. Therefore, the defence of appellant that he had given two cheques to Naresh Chopra which were later on misused by handing over to respondent/complainant is required to be rejected.
42. The other contention of appellant that he was not known to respondent/complainant also deserves to be rejected as respondent/complainant 17/24 CA No.57/17 Manish Arora Vs. Satish Madaan has deposed on oath regarding as to how he was friendly with appellant. It was deposed on oath by respondent/complainant that respondent/ complainant became friendly with appellant as appellant was having a shop of repair work of electrical appliances in his neighbourhood and appellant used to come to the shop of respondent/complainant to do electrical repair job.
43. The fact that appellant was having a shop of repair of electrical appliances in the area of Vikaspuri where respondent/complainant was also having a shop, has been admitted by appellant while being examined as DW1.
44. No witness was examined by appellant in his defence to disprove the fact that appellant was known to the respondent/complainant despite having shops in the same locality i.e. Vikaspuri. Therefore, appellant had failed to bring on record 18/24 CA No.57/17 Manish Arora Vs. Satish Madaan any material to show that he was not known to respondent/complainant and, therefore, could not have availed loan of Rs.2,10,000/ from respondent/complainant.
45. The other contention of ld.counsel for appellant that since respondent/complainant had made payment of loan to appellant in cash, in violation of the Income Tax Act, therefore, liability had become unenforceable, is not acceptable as Section 271D of the Income Tax Act nowhere provides that in case any person contravenes Section 269SS by giving the amount in cash which is more than Rs.20,000/ then the liability will become unenforceable or the liability will no longer remain legal.
46. Section 271D of the Income Tax Act provides for penalty if there is violation of Section 269SS of the Income Tax Act.
19/24 CA No.57/17Manish Arora Vs. Satish Madaan
47. Although it is true that in the present case, respondent/complainant has violated Section 269SS of Income Tax Act by giving loan in cash but that will not make the liability unenforceable and at the most, respondent/complainant will be liable to pay penalty as per Section 271D of the Income Tax Act.
48. Further, since the advancement of loan in cash beyond specified sum of Rs.20,000/ is not unlawful consideration, therefore, the agreement is not in violation of Section 10 of the Indian Contract Act, 1872.
49. The contention of ld.counel for appellant that as per Section 68 of the Indian Stamp Act, 1899 it is illegal to issue a post dated cheque, is not acceptable as Section 68 of the Indian Stamp Act, 1899 provides for penalty for post dating bills, promissory notes and other devices just to defraud 20/24 CA No.57/17 Manish Arora Vs. Satish Madaan the Government of its revenue.
50. However, in drawing of a cheque, no duty in the form of stamp is required to be paid to the government as is in the case of bill of exchange or promissory note. Therefore, Section 68 of the Indian Stamp Act, 1899 is not applicable in the case of a cheque.
51. The other contention of ld.counsel for appellant was that in the present case, apart from signatures, other details in the cheque are not in the handwriting of appellant and this fact supports the defence of appellant that cheque was misused by Naresh Chopra by handing over the same to respondent/complainant.
52. The said contention deserves to be rejected as firstly, there is no evidence which has come on record to show that apart from signatures, other details in the cheque Ex.CW1/A are not in the 21/24 CA No.57/17 Manish Arora Vs. Satish Madaan handwriting of appellant or is in the handwriting of respondent/complainant.
53. Secondly, even assuming that details in the cheque apart from signatures have been put by respondent/complainant then also it will not make the cheque Ex.CW1/A to be an illegal instrument. I am fortified in my reasoning by the judgment delivered by the Hon'ble Delhi High Court in The Jammu and Kashmir Bank (M/s.) Vs. Abhishek Mittal, 2012(1) DCR 189 wherein it was held that 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 has been given by him. It was further held in Para 7 as follows: Para 7 "Once issuance of the cheque has been admitted or stands proved, a presumption arises in favour of the holder of the cheque that he had 22/24 CA No.57/17 Manish Arora Vs. Satish Madaan received the cheque of the nature referred to under Section 138 of the NI Act for the discharge in whole or in part of any debt or any other liability. This presumption arises in favour of the holder under Section 139 of the NI Act which envisages that it shall be presumed unless the contrary is proved that the holder of a cheque received the cheque of the nature referred to under Section 138 of the NI Act for discharge, in whole or in part of any debt or any other liability. Of course, this presumption is a rebuttable presumption and same can be rebutted only by the person who had drawn the cheque".
54. Accordingly, a presumption arises in favour of the respondent/complainant and against appellant that the cheque had been issued in discharge of any debt or other liability. It was for the appellant to rebut the presumption which he has miserably failed to do so.
23/24 CA No.57/17Manish Arora Vs. Satish Madaan
55. In the light of above discussion, appellant by leading inconsistent defence, had failed to rebut the presumption under Section 139 of the NI Act. Therefore, ld.trial court rightly held the appellant guilty under Section 138 of the NI Act for having issued cheque in discharge of legal liability. Therefore, the appeal filed by appellant is devoid of any merits. The same is accordingly dismissed.
56. A copy of judgment be sent to the ld.trial court with a direction to enforce its sentence order dated 02.03.2017.
57. TCR be sent back to the ld.trial court.
58. Appeal file be consigned to record room.
Announced in the open court (Vikas Dhull) Dated: 19.08.2017 Spl. Judge (PC Act) (CBI)03 Dwarka Courts/New Delhi 24/24