Delhi District Court
State Bank Of India vs . Lalita Budhiraja on 3 February, 2011
IN THE COURT OF MS. NITI PHUTELA
METROPOLITAN MAGISTRATE, DWARKA COURTS, NEW DELHI
STATE BANK OF INDIA VS. LALITA BUDHIRAJA
CC NO. : 18552/09
P.S. : Paschim Vihar
U/s : 138 Negotiable Instruments Act
J U D G M E N T
1 Date of the commission of offence : 11/05/09 approx.
2 Name & address of the : State Bank of India through A.R.
Complainant Ms. Manisha Rani
State Bank of India
Rohtak road Indl. Complex
DSIDC, New Delhi
3 Name of the accused
and address : Smt. Lalita Budhiraja,
W/o Sh. Shashi Bhushan
Budhiraja
R/o B14, First Floor,
DLF PhaseI, Gurgaon
Haryana
4 Offence complained of : u/s 138 Negotiable Instruments Act
5 Plea of accused : Pleaded not guilty
6 Final order : Convicted
7 Date of such order : 03/02/2011
Case No. : 18552/09 Page No. 1 of 16
Date of Institution of case : 02/06/2009
Date of decision of the case : 03/02/2011
BRIEF FACTS AND REASONS FOR DECISION OF THE CASE
1. Vide present judgment I shall decide the complaint case U/s 138 Negotiable Instrument Act 1881 (as amended upto date) filed by the complainant State Bank of India, State Bank of India, Rohtak Road Indl. Complex, DSIDC, New Delhi through its Branch Manager and Principal Officer Sh. Ajay Aggarwal, who has further authorised Ms. Manisha Rani Deputy Manager of the complainant to appear and depose on behalf of the complainant against the accused Lalita Budhiraja w/o Sh. Shashi Bhushan Budhiraja.
2. The brief sketch of the case in hand is that the accused was running a partnership firm consisting of Smt. Pushpa Gupta and the accused herself in the name of M/S La Moda Exports. The said partnership firm is carrying out the business of Trading, Manufacturing and exporting fabric, accessories etc. The accused along with her partner Smt. Pushpa Gupta approached the complainant bank for availing the financial assistance in the form of loan. The case portrayed by the Case No. : 18552/09 Page No. 2 of 16 complainant is that the financial assistance in the form of FBWCCC was granted to the accused and after the execution of various loan documents, the loan to the extent of rupees fifty eight lakhs was granted. At the time of loan Smt. Pushpa Gupta, Partner of the accused also created equitable mortgage of the property bearing No. 2115, Shakti Nagar, Delhi. It is further stated by the complainant that the accused of the accused was irregular and accused in discharge of her partial liability had issued a cheque bearing number 006650 drawn on Bank of India, Nehru Place, New Delhi, amounting to Rs. 2,00,000/ in favour of the complainant with an assurance that the same will be encashed. However, on presentation of the same the said cheque got dishonoured vide cheque returning memos, dated 04/04/09 for the reasons "Funds Insufficient". The complainant thereafter sent a legal notice of demand dated 17/04/09 as Ex. CW1/5 to the accused which was sent by speed post receipt dated 20/04/09 Ex. CW1/6, calling him to make the payment within 15 days of the receipt of the notice failing which an offence punishable U/s 138 Negotiable Instruments Act is deemed to have been committed. As a result of which the complainant has filed the instant complaint for Case No. : 18552/09 Page No. 3 of 16 prosecution of the accused U/s 138 Negotiable Instrument Act.
3. After the complaint was filed, the Authorized Representative (AR) of the complainant led her presummoning evidence by way of an affidavit and thereafter hearing the counsel for the complainant and considering the entire material and documents on record, summons were issued against the accused vide order dated 10/06/09 for the offence U/s 138 Negotiable Instrument Act 1881. On appearance of the accused a separate notice U/s 251 Cr.P.C. dated 10/07/09 was given to the accused to which she pleaded not guilty and claimed trial. Complainant Evidence
4. On 15/10/09, Ms. Manisha Rani, AR of the complainant got herself examined as CW1 and reiterated the contents of the complaint on oath before this court and filed an affidavit in evidence which is Ex. CW 1/8. She got exhibited the original cheque before the court as Ex. CW1/2 and the cheque returning memo dated 04/04/09 as Ex. CW1/4, the legal notice of demand dated 17/04/09 as Ex. CW1/5, receipt of speed post Ex. CW1/6 dated 20/04/09 and A.D. card is Ex. Case No. : 18552/09 Page No. 4 of 16 CW1/7 vide which the aforesaid notice was sent. Complainant has also filed letter Ex. CW1/3 written by the accused to the complainant. She was crossexamined and it was admitted by the witness that in the opening line of the letter i.e. Ex. CW1/3 it is mentioned that the cheque in question was issued for regularization of the account and not as part payment of the loan. She further admitted that in Para 12 of her affidavit it is mentioned that the cheque in question was issued for the part payment of the outstanding loan. However, she said that there were oral instructions from the accused that the cheque is towards the part payment. She stated that the complainant bank has not received any letter on 30/03/09 i.e. the date of issuance of cheque however, she admitted that the letter was dated 31/03/09. On 04/11/09 further crossexamination of CW1 conducted. Vide separate statement of the A.R., CE was closed on the same day and the matter was fixed for statement of accused.
Statement of accused U/s 313 CrPC
5. Complainant evidence was followed by the statement of accused u/s 313 Cr.P.C. in which all the incriminating evidence along with exhibited documents were put to the accused Lalita Case No. : 18552/09 Page No. 5 of 16 Budhiraja in which she admitted that the cheque in question i.e. Ex. CW1/2 was issued in favour of the complainant by her. However, it was stated by her that the cheque was handed over to the bank officials with an understanding that the same would be presented only after her consent. But the said cheque was presented without any prior intimation to her. She even admitted that there were no sufficient funds in her account when the said was presented. Though she showed her ignorance about the legal notice but she admitted the signatures of her motherinlaw Smt. Pushpa Budhiraja on the AD card i.e. Ex. CW1/7 vide which the legal demand notice was sent to her address. She admitted that the said cheque in question were issued for regularization of her account and for which she had written letter to the complainant which is Ex. CW1/3. She further stated that she had deposited Rs. 2,50,000/ with the complainant after filing of the present case. Defence Evidence
6. Thereafter, the case was listed for defence evidence for 03/04/10. In her defence evidence accused got examined her husband Sh. Shashi Budhiraja as DW1. In his evidence the witness stated that the cheque in question was issued only for Case No. : 18552/09 Page No. 6 of 16 the regularization of the accused and not as repayment of the loan. He also reiterated that accused has already deposited Rs. 2,50,000/ with the complainant bank. Cash receipt of Rs. 1,00,000/ is Ex. DW1/1 and two cash receipts in the amount of Rs. 25,000/ are Ex. DW1/3 and DW1/4. Photocopy of demand draft was exhibited as Ex. DW1/2. In his cross the husband of the accused admitted that his wife had issued the cheque in the sum of Rs. 2,00,00/ in favour of the complainant though he stated that it was issued as it was the end of the financial year and the account of his wife was not regularized. He also admitted the signatures on the cheque Ex. CW1/2 as to be of the accused. He further admitted that there is an outstanding in the account of M/s La Moda Exports in which his wife is the partner to the extent of more than rs. 60,00,000/. He further stated that the letter Ex. CW1/3 was in his handwriting though it was signed by his wife i.e. the accused in the present case. He even admitted the receipt of the legal demand notice i.e. Ex. CW1/5 by the accused and the A.D. card vide which the said legal demand notice was served which is Ex. CW1/7 bears the signatures of Smt. Pushpa Budhiraja who resides with them only. Thereafter the D.E. was closed at statement of Smt. Lalita Budhiraja dated 21/08/10 Case No. : 18552/09 Page No. 7 of 16 and the case was listed for final arguments. Arguments
7. Final arguments were addressed on behalf of the accused on 06/01/11. Many opportunities were given to the counsel for the complainant but no arguments were addressed on behalf of the complainant. I have heard Ld. Counsel for the accused and perused the entire record of the case file and the evidence on record. In order to bring home the conviction of the accused, the complainant has to show not only unbroken chain of events leading to commission of actual offence on record but also the ingredients of the offence complained of.
8. Before proceeding further let us go through the relevant provisions of law. The main ingredient of Section 138 of the Negotiable Instruments Act are as follows:
(a) The accused issued a cheque on an account maintained by him with a bank.
(b) The said cheque has been issued in discharge of any legal debt or other liability.
(c) The cheque has been presented to the bank within the period of six months from the date of the cheque or within the period of its validity.
Case No. : 18552/09 Page No. 8 of 16
(d) When the aforesaid cheque was presented for encashment, the same was returned unpaid/dishonoured.
(e) The Payee of the cheque issued a legal notice of demand within 30 days from the receipt of information by him from the Bank regarding the return of the cheque
(f) The Drawer of the cheque failed to make the payment within 15 days of the receipt of the aforesaid legal notice of demand.
If the aforesaid ingredients are satisfied then the drawer of the cheque shall be deemed to have committed an offence punishable u/s 138 Negotiable Instruments Act. Appreciation of Facts, Evidence and Arguments
9. First limb of arguments advanced by the Ld. Counsel for the accused is that the cheque in question was not issued for repayment of the loan amount but only for regularization of the account of the accused. As per his argument the cheque was not issued not against any liability and the offence U/s 138 N.I. Act is not made out. At this juncture, it would be appropriate to refer to the provisions in Section 118(a) of N.I. Act which says :
Case No. : 18552/09 Page No. 9 of 16
"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"
Section 139 of N.I. Act says that :
"it shall be presumed unless the contrary is proved 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."
Therefore in view of the above said provisions of law it is very much pertinent that there is presumption that the cheque in question was issued for consideration and is against legally enforceable debt and liability. In the case in hand the accused has taken the defence that the cheque in question was issued not for the part payment of the loan but for regularization of the account. As mentioned above the accused has written letter dated 31/03/09 to the complainant bank. In the said letter the accused has mentioned that she wanted to get her account regularized as there was slow down in the business and also because of her illness in last six months. The inference which can be drawn from the testimony of the witnesses and from the text of the letter is that the account of the accused was not Case No. : 18552/09 Page No. 10 of 16 regular. This even reflects that she was not regular in her payments. The liability of the accused has also been admitted by DW1 in his crossexamination. Therefore, the presumption which is against the accused does not stand rebutted because the date, amount and issuance of the cheque has already been admitted by the accused and in her statement U/s 313 CrPC and also by testimony of DW1. The same is not in dispute between the parties. Only the bone of contention is that the said cheque was not towards the part payment of the loan. Perusal of the record shows that the letter of the accused is dated 31/03/09 and the cheque is dated 30/03/09. It appears that the writing of the abovesaid letter by the accused was an afterthought. The intent and purpose of the Negotiable Instrument Act would be defeated if such defence of the accused is taken into consideration.
10. The 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 Case No. : 18552/09 Page No. 11 of 16 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 Section 118 and 139 of the Negotiable Instruments Act in every case where the factual basis for raising of the presumption had been established."
In view of the above judgment of Hon'ble Supreme Court the accused has failed to take plausible defence and had even failed to rebut the presumption that there was no outstanding liability against which the cheque has been issued. On the contrary the husband of the accused has himself admitted that still there is liability against the accused to the tune of rs. 60,00,000/. Thus the defence of the accused is not sufficient to rebut the presumption U/s 118 & 139 N.I. Act and complainant has been able to prove that the cheque in question was issued for the part payment of the loan/for discharge of liability.
The judgment of Hon'ble Delhi High Court in case titled as I.C.D.S. Ltd. vs. Beena Shabeer and Anr., MANU/SC/0669/2002 also supports the above fact :
"The language, however, has been rather specific Case No. : 18552/09 Page No. 12 of 16 as regards the intent of the legislature. The commencement of the Section stands with the words "Where any cheque" The above noted three words are of excrement significance, in particular, by reason of the user of the word "any" the first three words suggest that in fact for whatever reason if a cheque is drawn on an account maintained by him with a banker in favour of another person for the discharge of any debt or other liability, the highlighted words if read with the first three words at the commencement of Section 138, leave no manner of doubt that for whatever reason it may be, the liability under this provision cannot be avoided in the event the same stands returned by the banker unpaid. The legislature has been careful enough to record not only discharge in whole or in part of any debt but the same includes other liability as well."
Therefore, the benefit of presumptions goes in favour of the complainant which accused has failed to rebut.
11. Second limb of argument advanced by Ld. Counsel for the accused is that the accused has already made the payment of Rs. 2,50,000/ after the filing of the present case. This fact is even stated by the accused in her statement U/s 313 CrPC and also supported by documents Ex. DW1/1 to Ex. DW1/4. Considering the above fact that though the accused had made Case No. : 18552/09 Page No. 13 of 16 the above payment after the filing of the case, it is not yet clear that whether the payment is towards cheque in question or towards the part payment of loan amount. Even for the sake of arguments if it is considered that it is towards the payment of the cheque in question of Rs. 2,00,000/ yet that will not absolve the accused from the offence which has been committed as per Section 138 of the N.I. Act which is a penal provision and should be construed strictly. Hon'ble Supreme Court in case titled as Rajneesh Aggarwal v. Amit J. Bhalla, 2001 I AD(SC) 44 held that :
"so far as the criminal liability is concerned, once the offence is committed any payment made subsequent thereto will not absolve the accused of the liability of criminal offence, though in the matter of awarding of sentence it may have some effect on the court trying the offence. But no stretch of imagination a criminal proceedings could be quashed on account of deposit of money in the court or that an order of quashing of criminal proceedings which is otherwise unsustainable in law could be sustained because of deposit of money in the court."
Decision and reasoning
12. In view of the above discussion it is evident that the basic ingredients of the offence U/s 138 Negotiable Instruments Act Case No. : 18552/09 Page No. 14 of 16 have been made out and accused has failed to rebut the presumption U/s 118(a) & 139 of the Negotiable Instruments Act. Thus the complainant is able to establish that the accused borrowed sum of Rs. 58,00,000/ from the complainant and issued cheque Ex. CW1/2 in partial discharge of the abovesaid liability and on presentation of the cheques the same got dishonoured with remarks 'funds insufficient" and thereupon legal demand notice was sent to the accused calling upon her to make the payment of the cheque in question which was served on the accused through Smt. Pushpa Budhiraja (motherinlaw of the accused). But the accused failed to make any payment towards the cheque in question within the statutory period or to reply to the legal demand notice.
13. Therefore, offence U/s 138 Negotiable Instruments Act stands proved against the accused. The accused therefore stands convicted for the above said offence. Case No. : 18552/09 Page No. 15 of 16
Let the accused be heard on the point of sentence. Copy of the judgment be given to the accused free of cost.
Announced in the open court
today i.e. 03/02/11 (NITI PHUTELA)
MM: DWARKA
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