Delhi District Court
Ashok Kumar Jain vs . Rakesh Kumar Jain on 15 February, 2013
Ashok Kumar Jain Vs. Rakesh Kumar Jain
IN THE COURT OF MS. DEEPIKA SINGH, METROPOLITIAN
MAGISTRATE-01, NI ACT, NORTH, DELHI
CC No. 2009/11
Sh. Ashok Kumar Jain
S/o Sh. Babu Lal Jain
R/o 368, Chitla Gate, Chawri Bazar,
Delhi-110006
....................Complainant
vs.
Sh. Rakesh Kumar Jain
S/o Sh. Jyanti Prasad Jain
R/o 368, Chitla Gate, Chawri Bazar,
Delhi-110006.
............................Accused
The offence complained of or proved : u/s 138 NI Act
The plea of the accused persons : not guilty
Final order : Convicted
Date of institution of complaint : 27.08.2002
Date on which reserved for judgment : 09.01.2013
Date of pronouncement of judgment : 15.02.2013
CC No.2009/11 Page 1 of 30
Ashok Kumar Jain Vs. Rakesh Kumar Jain
JUDGMENT:
1. Vide this judgment this court shall dispose of the present complaint u/s 138 Negotiable Instruments Act 1881 filed by the complainant against the accused.
2. Brief facts stated in the complaint are that the complainant had given a friendly loan of Rs. 2,50,000/- to the accused on 10.09.2001 and in lieu thereof the accused has executed a receipt in his own hand, the said receipt is ExCW1/1, and acknowledged the liability of the said loan by re-paying / issuing the two cheques; i.e. cheque bearing no. 793076 dated 10.10.2001 for Rs. 60,000/- and cheque bearing no. 793077 dated 10.11.2001 for Rs. 60,000/- with the assurance that the cheques would encashed on presentation on due dates. The said cheques are ExCW1/2 & ExCW1/3. It is further stated that few days prior to 10.10.2001, the accused approached the complainant and requested him not to present these cheques in his bank as he had not sufficient amount in his bank. Again on 10.10.2001, accused again approached and requested the complainant not to present the said cheques for encashment and also revalidated all the four cheques thereby deleting and changing the new dates on the cheuqes for representation i.e. 30.03.2002, 30.04.2002 respectively. But the accused did not make the payment to complainant CC No.2009/11 Page 2 of 30 Ashok Kumar Jain Vs. Rakesh Kumar Jain even after persistent requests and demands. However, the accused requested to the complainant to present two cheques of Rs.60,000/- each on or before 20.07.2002 and assured that the cheques will be honoured by the bank. On the assurance of the accused, the complainant presented the two cheques i.e. cheques bearing no. 793076 and 793077 dated 30.03.2002 and 30.04.2002 both for Rs.60,000/- each, both drawn on Dena Bank, Chawri Bazar, Delhi, for encashment on 22.07.2002 with its banker Oriental Bank of Commerce, Chawri Bazar, Delhi, but the complainant received back the said cheques un-paid as dishonored vide returning memo dated 23.07.2002 with remarks "Funds Insufficient". The cheque returning memo is ExCW1/4 & ExCW1/5. Thereafter the complainant approached the accused and requested him to make the payment but all in vain. Thereafter, the complainant sent a legal notice dated 29.07.2002 through his counsel through registered AD and the said notice was duly served upon the accused on 03.08.2002, which was duly replied by accused on 13.08.2002. The legal notice is ExCW1/6 and postal receipt is ExCW1/7. On failure of the accused to make the payment within the stipulated period, the present complaint was filed.
3. After hearing the arguments on summoning, sufficient grounds were CC No.2009/11 Page 3 of 30 Ashok Kumar Jain Vs. Rakesh Kumar Jain made out against the accused u/s 138 NI Act and process was issued against him. On his appearance, the accused was admitted to bail on 27.05.2003.
4. Notice U/s 251 Cr.P.C was served upon the accused on dt.18.05.2004 to which the accused pleaded not guilty and claimed the trial.
5. Complainant examined himself in his evidence and he adopted his pre summoning affidavit as the post summoning affidavit, which is ExCW1/A where he reiterated the same facts.
During the cross examination, he deposed that he and accused are residing side by side on the first floor of the same house for the last about 15-17 years. They had cordial relations prior to the transaction in question dt.10.09.2001. After the accused borrowed money and he asked to pay back, their relations soared. On 25.03.2001, accused borrowed a sum of Rs.1,50,000/- from him for 6 - 7 months. Prior to these transactions, he did not borrow any money from him. Loan dt. 25.03.2001 was advanced at the interest rate of 3% per month. Loan dt. 10.09.2001 of Rs.2,50,000/- was advanced at the interest rate of 2% per month for 5-6 months. The loan amount in both the cases was advanced in cash. He and CC No.2009/11 Page 4 of 30 Ashok Kumar Jain Vs. Rakesh Kumar Jain accused needed money i.e. business or personal. He cannot say if the accused needed money for business purpose. It is wrong to suggest that on earlier occasion also, accused had been taking short term loan from him for business purpose being first neighbour and friend. It is wrong to suggest that he had told the accused that he should not reflect the loan amount paid by him in his accounts and that he wanted him to return the loan amount in cash. It is correct that he has not shown the loan amount in his accounts. The loan transaction for Rs.1,50,000/- was entered into in writing.
At this stage, witness is confronted with the document ExCW1/D1 (OSR) and asked whether it was the same written document and he has replied in affirmative. It is correct that accused gave three cheques towards security of repayment of loan as indicated in ExCW1/D1. It is correct that accused was to repay the amount of Rs.1,50,000/- by 30.09.2001. It is correct that accused paid regular interest till the month of September 2001. On 10.09.2001, he advanced him second loan amount of Rs.2,50,000/-. Thereafter, he failed to pay regular interest towards the loan of Rs.1,50,000/-.
It is correct that the transaction dt.10.09.2001 for Rs.2,50,000/- was also entered into writing and he obtained four post dated cheques towards security for CC No.2009/11 Page 5 of 30 Ashok Kumar Jain Vs. Rakesh Kumar Jain repayment of loan amount. It is also correct that accused acknowledged the loan dt. 10.09.2001 in writing which is already ExCW1/1. He cannot say if the accused retained the carbon copy of this document.
At this stage, witness is confronted with document ExCW1/D2 and asked whether it is the same carbon copy and the witness has replied in negative. He submits that some forgery has been committed in the carbon copy. It is correct that ExCW1/1 mentions all the four post dated cheques which were obtained from the accused towards the security for repayment of loan amount. It is wrong to suggest that no interest was agreed to be paid for the loan of Rs.2,50,000/- only because it is not mentioned in the ExCW1/1. Voluntarily stated on account of his earlier dealing for the interest @ 3% per month with respect to the loan of Rs. 1,50,000/-, accused request to give some concession and accordingly, he agreed to accept the interest @ 2% per month for the loan of Rs.2,50,000/-.
Interest @ Rs.4500/- per month was to be paid @ 3% per month towards the loan of Rs.1.5 Lacs. He is an income tax payee. He is 12 th passed. He does not understand English. He filed his return through his C.A. It is correct that loan amount was not reflected in his income tax returns. He does not know if tax is to be deducted at source in case any transaction exceeds Rs.20,000/- in a given CC No.2009/11 Page 6 of 30 Ashok Kumar Jain Vs. Rakesh Kumar Jain financial year. He does not have any money lending licence. It is correct that other than the accused he has advanced loans to other people also. It is correct that he does not show in his income tax return those transactions with other people also. It is correct that he filed cases u/s 138 NI Act against the borrowers who could not repay the amount and it is also correct that some of these cases were compounded in the court. Name of one such person is Mahender Pal Arora with whom he compounded his complaint u/s 138 NI Act for a sum of Rs.2,20,000/-. The cheque amount in this case was Rs.1,50,000/-. It is correct that sum of Rs.1,50,000/- was advanced to Mahender Pal Arora in cash. It is also correct that against same Mahender Pal Arora has filed a Civil Suit for recovery because he had given him loan of Rs.12 Lacs which he could not repay in time. It is also correct that for this amount of Rs.12 lacs, he had taken post dated cheques from Mahender Pal Arora as security for repayment of loan amount. Voluntarily stated that another case u/s 138 NI Act has been filed for a sum of Rs.30,000/- but his wife is the complainant and he is the parokar in the said case in the court of Sh. Balwant Rai Bansal, Ld. M. M., Delhi, entitled Lata Jain vs Subhash Chand.
His wife is a housewife. It is correct that the documents with respect to loan of Rs.30,000/- advanced by his wife were drafted by him. It is wrong to CC No.2009/11 Page 7 of 30 Ashok Kumar Jain Vs. Rakesh Kumar Jain suggest that he had entered into proxy transaction on behalf of his wife. In fact the sum of Rs.30,000/- belonged to him. It is correct that whatever loan amounts as mentioned above he has advanced to different were not withdrawn by him from bank and the same were kept in his house. It is correct that he has not mentioned either of the above mentioned transactions in his income tax returns. It is also correct that he has not shown in his income tax returns any income from interest. He know Om Prakash Jain since the time accused was convicted on his complaint u/s 138 NI Act. Accused was sent to judicial custody in this matter and he advanced loan of Rs.2,50,000/- to him three months prior to the time when accused was sent to JC. It is correct that dates of four post dated cheques against the transactions of Rs.2.5 lacs are 10.10.2001, 10.11.2001, 08.12.2001 and 10.01.2002 for Rs.60,000/-, Rs.65,000/-, Rs.60,000/- and Rs.65,000/- respectively. All are consecutive in number. It is wrong to suggest that accused repaid a sum of Rs.1,50,000/- in cash to him with respect to transaction of Rs.1,50,000/- and he demanded three post dated cheques all dated 30.09.01 of Rs.50,000/- each back from him. It is further wrong to suggest that he did not give back the cheques and told the accused that he would return all the seven cheques later when he would repay the loan of Rs.2.5 lacs also because the cheques were misplaced by him. It is wrong to suggest that the accused CC No.2009/11 Page 8 of 30 Ashok Kumar Jain Vs. Rakesh Kumar Jain believed him and did not press further for return of cheques, being a friend and neighbour.
It is correct that he did not present any of the three cheques dt.30.09.01 to his banker after the accused failed to repay the loan amount of Rs.1.5 lacs in cash. It is correct that he did not issue any legal notice of demand to the accused on or after 30.09.01 and he kept the cheques with him. He demanded the payment from the accused several times on and after the due dates and he assured him payment. It is correct that their relations worsened after 30.09.01. Voluntarily stated that because the accused did not make the payments.
He know the cheque become invalid after six month from the date mentioned on the cheque. It is correct that he has neither mentioned about the interest @ 2% per month in his notice dated 1.08.02 and or 20.12.02 not claimed accused interest there on qua second loan of Rs.2.5 Lacs. It is correct that he has not mentioned in either of the notice dated 1.08.02 and/or 20.12.02 with regard to revalidation dates of four cheques qua second loan of Rs.2.5 lacs. It is correct that affidavit of evidence ExCW1/A was drafted by his counsel at his instructions and he had signed the same at point A and B after reading and understanding the same. All the seven cheques (3 cheques of first loan and 4 cheques of second loan) were CC No.2009/11 Page 9 of 30 Ashok Kumar Jain Vs. Rakesh Kumar Jain revalidated after the accused came out from jail in case of Om Prakash Jain. Voluntarily stated that it may be possible the three cheques of first loan were revalidate on some date and four cheques of second loan on some other date. All the seven cheques were revalidated by the accused before the expiry of six months from the respective original dates of the respective cheques. All the seven cheques revalidated by the accused out of his sweet will and not under his pressure. All the seven cheques revalidated out of the main gate of residence of the accused. He does not remember whether the revalidation work were done by standing or by sitting. Three cheques of first loan were revalidated in one sitting, and four cheques of second loan were revalidated in another one sitting. He does not remember exactly as to when those cheques were revalidated, however, they were validated in the period. He does not exactly remember as to whether those cheques which were issued in the first sitting of loan were revalidated on the first occasion or the second sets of cheques were revalidated earlier but one thing which is very clear that cheques were revalidated before the expiry of their limitations. It is incorrect to suggest that the all the seven cheques in question were revalidated by himself after the expiry of its validity. It is incorrect to suggest that his complaint is based on false facts and he is deposing falsely. It is incorrect to suggest that he has already CC No.2009/11 Page 10 of 30 Ashok Kumar Jain Vs. Rakesh Kumar Jain received the payment of all the seven respective cheques on their original due dates but he did not return the cheques to the accused on the pretext of misplacing and not traceable at that moment. It is incorrect to suggest that second loan given by him were for short period regarding which the post dated cheques in question were given as security. Voluntarily stated that however, loan were given for short period of 2-3 months. It is incorrect to suggest that he has lend second loan of Rs.2.5 lacs on 10.09.01 on the assurance of the accused that he will repay the first loan of Rs.1.5 lacs on the due dates.
6. Complainant examined another witness CW2 Sh. C. S. Khanna in his defence, he deposed that he has brought the summoned record of cheque bearing no. 793076 and 793077 for Rs.60,000/- each already ExCW1/2 & ExCW1/3, presented and returned on the same day on 23.07.2002 vide memos already ExCW1/4 & ExCW1/5 with the reason insufficient funds. The cheques were dishonored and returned the same on 23.07.02. He has brought the original outwards cheque return register and statement of account bearing the aforesaid cheques number having details from 01.02.02 to 12.01.05. Photocopy of outward cheque entries regarding the disputed cheques is placed on record which is ExCW2/A. Relevant entries are CC No.2009/11 Page 11 of 30 Ashok Kumar Jain Vs. Rakesh Kumar Jain encircled with red pencil.
During his cross examination he deposed that register pertains to ExCW2/A and is maintained by the clerk. This exhibit is not maintained by him by hand. In this register they show the debit charges for cheque return from the concerned account of their customer. It is correct that there is no mention of debit charges regarding cheques ExCW1/2 & 3 against the said entry of ExCW2/A. It is correct that in other cheques of other customers, there is relevant entry of debit amount of cheque return in the said register pertaining to ExCW2/A. It is also correct that no debit amount of cheque return charges is shown to the three cheques of Rs.50,000/- each regarding other complaint no.470/1 and two cheques of Rs. 65,000/- each of other complaint no.533/1. In this register, there is no mention of the date regarding presentment of the cheque for encashment. It is correct that there are three stages of cheque for encashment i.e. date of presentment for encashment, date of honour / dishonour and date of return. It is correct that this register shows only date of return. He has joined this branch w.e.f. January 2004. Prior to this, he was in Service Branch at Connaught Place, New Delhi. He know full working of this branch regarding encashment dishonoring of the cheque as he is deputed as clerk in this branch.
CC No.2009/11 Page 12 of 30
Ashok Kumar Jain Vs. Rakesh Kumar Jain On being asked that what procedure he adopt in this branch regarding written information regarding stop payment of a particular cheque, replied that first they receive the complaint and give acknowledgment on its duplicate copy. Then they command the computer regarding the stop payment of said particular cheque then and there. Voluntarily stated he was instructed by his Officer that he has to depose only regarding the records only. If anything else is asked for then, it may be replied by him.
He does not know who were the officers in the bank in 2001, 2002 and 2003. He does not know the name of clerk who recorded the entry ExCW2/A. He has been instructed by the branch manager Mr. Tondon to give the aforesaid statement which he has volunteered.
He does not know who are the officers in the present branch since 23.07.2002. It is incorrect to suggest that he is deposing falsely. It is incorrect to suggest that he is suppressing true facts at the instance of Mr. Tondon.
7. All the incriminating evidence had been put to the accused to which he stated that he has already made the payment of all the cheques in question and the cheques in question were given by him duly filled up just to secure the payment and CC No.2009/11 Page 13 of 30 Ashok Kumar Jain Vs. Rakesh Kumar Jain the cheques in question were never returned by the complainant on one pretext or the other. He accepted having received the legal demand notice of which he had sent the reply also. He accepted having taken loan from the complainant regarding which whole of the payment has already been made in cash to the complainant. He has also stated that he wants to lead defence evidence.
8. Accused examined himself in his defence evidence and deposed that Ashok Kumar Jain, complainant is his neighbour of first floor. He took friendly loan of from Ashok Jain on 25.03.2001 a sum of Rs.1,50,000/- @ 3% per month interest. He has given three cheques dt.30.09.01 of Rs.50,000/- each in security. He has paid interest of Rs.4500/- per month upto 30.09.01. Rs.1,50,000/- was also returned on 30.09.01. Complainant did not return the said cheque on the pretext that those are not traceable at present. He will return as soon as they will be traced out.
On 10.09.01, he took another loan from complainant of Rs.2.5 Lacs for a short period of four months. Interest was not settled. Again said, it was without interest. Against this loan, he has issued four cheques, out of two of Rs.60,000/- each and remaining two of Rs.65,000/- each as a security. Said four cheques of dt. CC No.2009/11 Page 14 of 30
Ashok Kumar Jain Vs. Rakesh Kumar Jain 10.10.01, 10.11.01, 08.12.01 & 10.01.02. He has paid all the four cheques amount on their due dates. Each time complainant repeated same excuse that all the cheques are not traced out as soon as they will find he will return. He believe in good faith being neighbour. Last payment of Rs.65,000/- was made on 10.01.02.
The payment of all the seven cheques with admitted interest was paid to complainant on due dates in his house after taking money from his wife Sunita Jain. No amount is due to the said seven cheque.
In their paper business there is usual practice if money is received by cheque that will be paid by cheque and if received by cash that will be paid by cash.
He received a notice dt.29.07.02 from the complainant (ExCW1/6 in complaint no.2009/11) which was duly replied by him through his counsel vide reply dt.23.08.02 which is ExCW1/7 in complaint on 2009/11 interalia demanded back four cheques qua loan of Rs.2.5 Lacs.
Another notice was received in October 2002, which is ExCW1/7 in complaint no.2037/11 which was duly replied through his counsel vide reply dt. 22.10.02 which is ExCW1/D1 in complaint no.2037/11 interalia all the seven cheques demanded back qua both the loan of Rs.1.5 Lacs and Rs.2.5 Lacs. When complainant did not return all the seven cheques then in the month of November CC No.2009/11 Page 15 of 30 Ashok Kumar Jain Vs. Rakesh Kumar Jain 2002. He instructed his bank for stop payment of the remaining two cheques. The carbon copy of the application along with bank receiving endorsement at point A is ExDW1/A, where upon his signatures at point B. In December 2002, he received third notice of the complaint regarding two cheques of Rs.65,000/- each qua loan of Rs.2.5 lacs which is ExCW1/6 in complaint no.2023/11, which was duly replied through his counsel which is ExCW1/D5 in complaint no.2037/11. While taking loan, a writing of understanding was also executed by him at the instance of complainant. Carbon copies are ExDW1/B and ExDW1/C respectively.
When he received first notice, all the seven cheques have already become time barred. Complainant committed upon him cheating.
During his cross examination he deposed that they are neighbours on the same floor but living in the separate portion of the same house. He has taken a loan of Rs.1.5 lacs from the complainant on 25.03.2001 regarding present complaint. He has paid the said loan to Ashok Kumar Jain. He has paid the said of loan Rs.1.5 lacs on 30.09.01 in front of his wife Smt. Sumita Jain after taken from her. It is wrong to suggest that he has not paid even in a single paisa towards principal amount of Rs.1.5 lacs qua this loan.
CC No.2009/11 Page 16 of 30
Ashok Kumar Jain Vs. Rakesh Kumar Jain He had not withdrawn any amount from the bank to repay to the complainant Ashok Jain. He had taken another loan of Rs.2.5 lacs on 10.09.01 from the complainant for other purpose. He did not take any receipt from the complainant regarding the payment of Rs.1.5 lacs. Voluntarily stated he had not to take receipt but to take back the cheques but he did not return as a time of payment of each cheque on the pretext that the three cheques have been misplaced somewhere as soon as he will find them he will return. The subsequent loan of Rs. 2.5 lacs was paid on the following dates 10.10.01, 10.11.01, 08.12.01 and 10.01.02. No receipt was taken by him from the complainant, he asked him for the cheques time to time. Voluntarily stated each time he reiterated that cheques are place somewhere as soon as he will find them those will be returned. It is wrong to suggest that he has not repaid the said loan of Rs.2.5 lacs to the complainant. There was no quarrel which was reported to PS Jama Maszid by the complainant. Again there was no quarrel which was also reported at PS Pahargamj before the executive magistrate u/s 107/151 Cr.P.C. Again said yes there was a quarrel. He does not remember who other persons involved in that quarrel. He does not remember when he instructed his bank for stop payment vide ExDW1/A there was sufficient amount in the bank or not for honouring the cheques.
CC No.2009/11 Page 17 of 30
Ashok Kumar Jain Vs. Rakesh Kumar Jain There was no other third person except his wife, complainant Ashok and himself at the time of repayment of loan amount.
On being asked that after a quarrel with complainant which was reported to police by the complainant whether he has given any notice to the complainant regarding cheques, replied that he did not send any notice to the complainant asking him to return the cheques.
It is wrong to suggest that he has not repaid any amount to the complainant. It is wrong to suggest that he is deposing falsely.
9. Accused examined DW 2 Sukant Jain and he deposed that complainant is his neighbour, at Chitla Gate. Complainant never talked to him regarding the loan transaction between him and his father and neither any demand was made from him. Even at the time when his father was in jail, no demand was made from the complainant.
During his cross examination he deposed that he shifted from Chitla Gate Prashant Viha 3 to 4 years back. He had the knowledge that his father had taken some loan from the complainant. He does not remember whether there was a quarrel between his father and the complainant in the year 2002 and police also CC No.2009/11 Page 18 of 30 Ashok Kumar Jain Vs. Rakesh Kumar Jain come and the matter was reported. He is working separately since the year 2005. He has no knowledge of other transactions of his father. It is wrong to suggest that he is deposing falsely.
10. Accused examined another witness DW3 Smt. Sunita Jain in his defence and she deposed that the incident pertains to the year 2001. At that time, she was residing with her husband Rakesh Kumar Jain at 368, 1st floor, Chitla Gate, Chawri Bazar, Delhi-06. She knows the complainant Sh. Ashok kumar Jain present in the court who is their neighbour. Her husband borrowed a sum of Rs.1.5 lacs from Ashok Kumar Jain for business purpose with interest @ 3%. Again in the month of September 2001 again took a loan of Rs.2.5 lacs from the complainant for business purpose without interest. Her husband had given cheques in security against these loans. Three cheques of Rs.50,000/- each for first loan and four cheques out of them two of Rs.60,000/- each and two cheques of Rs.65,000/- each were given in security. Rs.1.5 lacs was borrowed on interest @ 3% per annum. Her husband paid interest for every months up to six months @ Rs.4,500/- per month after taken from her which was preserved with her in her almirah for this purpose. Her husband also paid all the cheques amount of Rs.1.5 lacs and sixty-sixty thousand and sixty five- CC No.2009/11 Page 19 of 30
Ashok Kumar Jain Vs. Rakesh Kumar Jain sixty five thousand on their due dates. This amount was also paid to complainant Ashok Kumar after taking from her which was put in her almirah for the for the purpose of repayment of the cheque amount. On asking to return the respective cheques at the time of repayment, complainant Ashok Jain each time replied one excuse he has forgotten those cheqeues after placing somewhere, as soon as he will find those cheques he will return. Ashok Jain did not return those cheques. She has no other option but to believe in good faith being neighbour. There is no dues remain left qua the seven cheques pertains to these three complaints. All the three complaints are false.
During her cross examination, she deposed that she is graduate. She knows the complainant Ashok Kumar Jain for the last 20 years as he is her neighbour. The meaning of security cheque means is to present the cheque in bank. She used to give tuitions. She does not know whether her husband lodge any report or serve legal notice to the complainant when the complainant did not return the cheques. It is correct that she along with her husband did not take any receipt from the complainant. She does not remember when her husband instructed the bank regarding the stop payment of the cheques. It is wrong to suggest that she has not paid even a single paise to the complainant towards the principle amount Rs. CC No.2009/11 Page 20 of 30
Ashok Kumar Jain Vs. Rakesh Kumar Jain 4,00,000/-. It is further wrong to suggest that she was not present at the time of making the payment.
11. I have gone through the evidence, written submissions and heard the final arguments advanced by both the parties at length.
12. The case laws material for the present facts and circumstances are discussed below.
In case entitled as "Rangappa vs Sri Mohan" [(2010), 11, Supreme Court Cases 441] where the Hon'ble Supreme Court of India, held that the bare denial of the passing of the consideration apparently does not appear to be any defence. To disprove the presumptions, the defendant has to bring on record such facts and circumstances, upon consideration on which the Court may either believe that the consideration does not exist or its non-existence was so probable that a prudent man would, under the circumstances of the case, shall act upon the plea that it does not exist and it was held that there is an initial presumption, which favours the complainant in the sense that the presumption mandated by Sec. 139 of NI Act does indeed include the existence of a legally enforceable debt or liability. Since the CC No.2009/11 Page 21 of 30 Ashok Kumar Jain Vs. Rakesh Kumar Jain accused did admit that the signatures on the cheques was his, the statutory presumption comes into play and same has not been rebutted even with regard to the material submitted by the complainant.
13. In the judgment "Hiten P. Dalal vs. Bratindra Nath Banerjee" AIR 2001 (SC) 3897 it was held that presumption under NI Act is a presumption of law as distinguished from a presumption under a fact which describes provisions by which the Court "may presume" a certain state of affairs. Presumptions are rules of evidence and do not conflict with presumptions of innocence because by the later all that is meant is that the prosecution is obliged to prove the case against the accused beyond reasonable doubt. Obligation on the prosecution may be discharged with the help of presumption of law or fact unless the accused adduces evidence showing the reasonable possibility of non-existence of a presumed fact.
14. In the judgment entitled "Pradeep Aggarwal & Ors vs Y. K. Goel", Cr. M. C. 66/2009 (Hon'ble High Court of Delhi), where it was held that complaints u/s 138 NI Act is a summary trial and accused should first disclose his defence and merely saying "He is innocent" or "He plead not guilty" will not be sufficient and CC No.2009/11 Page 22 of 30 Ashok Kumar Jain Vs. Rakesh Kumar Jain onus is on the accused to show that no offence could have been deemed to be committed by him for some specific reasons and defences.
It was further held that u/s 138 NI Act, there is no presumption that even if an accused fails to bring out his defence, he is still to be considered innocent.
15. In the judgment "Mosaraf Hossain Khan vs Bhagheeraha Engg. Ltd." AIR 2006 S. C. 128(2006), it was held that the object of the provision of section 138 NI Act is that for proper and smooth functioning of business transaction in particular, use of cheques as negotiable instruments would primarily depend upon the integrity and honesty of the parties. It was noticed that cheques used to be issued as a device inter alia for defrauding the creditors and stalling the payments. Dishonour of a cheque by the bank causes incalculable loss, injury and inconvenience to the payee and the entire credibility of the business transactions within and outside the country suffers a serious setback.
16. In the judgment "K.N. Beena Vs. Muniyappan, AIR 2001 SC 2895, where it was held that mere denial / averments in reply by the accused are not sufficient to shift the burden of proof onto the complainant. Accused has to prove in CC No.2009/11 Page 23 of 30 Ashok Kumar Jain Vs. Rakesh Kumar Jain trial by leading cogent evidence that there was no debt or liability, which in the present case accused has not done.
17. From the material on record and as per the admission of the parties, it is well established that both the complainant and accused know each other for last 20 years being neighbours residing on the same floor. The accused has admitted issuing the cheques in question to the complainant. He has also admitted having received the legal demand notice from the complainant to which he replied also. The accused has taken the defence that he had given the cheques in question as security towards the loan taken by him. He duly paid the loan amount and complainant has misused the cheques. Whenever he asked the complainant to return the cheques, complainant replied that the same are misplaced and he will return as soon as he finds them. Accused further took the defence that he out of good faith believed the complainant being his neighbour. Accused also stated that he did not take any receipt from the complainant regarding the payment of the loan amount. Assuming for a moment the version of the accused is correct, then what prevented him to take recourse to any legal remedy regarding the alleged misuse of the cheques by the complainant. The assertion of the accused that each time he repaid CC No.2009/11 Page 24 of 30 Ashok Kumar Jain Vs. Rakesh Kumar Jain the loan amount he did not take any receipt from the complainant does not inspire any confidence to this court. Accused in his cross examination deposed that he had not withdrawn any amount from the bank to repay the loan amount to the complainant. DW3 Ms. Sunita Jain deposed in her examination in chief that the repayment of the loan amount was made after taking from her which were put in her almirah for the purpose of the repayment of the cheque amount. In her cross examination, she has also deposed that she does not know whether her husband lodged any report or served any legal notice to the complainant, when the complainant did not return the cheques. Accused has examined himself and two more witnesses in his defence. The defence witnesses examined by him are his son and wife only who have every reason to depose in his favour. Hence their testimony is not of any help to the accused. The accused has failed to create any reasonable probable defence to rebut the presumption in favour of the complainant.
18. Ld. Counsel for the accused has relied upon the case laws entitled, "Krishna Janardhan Bhat vs Dattatraya G. Hedge" 2008 Crl. L. J. 1172, "Sanjay Mishra vs Ms Kanishka Kapoor alias Nikki and Anr." 2009 Crl. L. J. 3777 (Bombay High Court), "Sri Murugan Financiers vs P. V. Perumal" 2005 Crl. L. J. 269(Madras CC No.2009/11 Page 25 of 30 Ashok Kumar Jain Vs. Rakesh Kumar Jain High Court), "C. Antony vs K. G. Raghavan Nair" (2003) 1 SCC, "Narinder Kumar vs Harnam Singh" 2000 Crl. L. J. 257 (Himachal Pradesh High Court), "M/s. Collage Culture and Ors vs Apparel Export Promotion Council & Anr." 2007 (4) JCC (NI) 388 (High Court of Delhi), "Lalan Prasad vs State of Jharkhand & Ors." 2004 Crl. L. J. 3622, "M. S. Narayana Menon alias Mani vs State of Kerala & Anr." AIR 2006 SC 3366. I have highest regard for the case laws cited on behalf of the accused. But the same have been pronounced in different context and is of no help to the accused.
19. Hence, the accused has miserably failed in substantiating his defence and showing that there is no liability of the accused towards the complainant. The complainant successfully proved all the essential requirements of sec 138 of the Act i.e. :
a) The cheque for an amount is issue by the accused to the complainant on a bank account maintained by him.
b) The said cheque is issued for the discharge, in whole or in part of any debt or other liability by the accused.
c) The cheque is returned by the bank unpaid on account of insufficient amount to CC No.2009/11 Page 26 of 30 Ashok Kumar Jain Vs. Rakesh Kumar Jain honour the cheque.
d) The cheque is presented to the bank within 6 months from the date on which it is drawn and is within the period of its validity.
e) Within 30 days demand notice is issued by the complainant on receipt of information by him from the bank regarding the dishonour of the cheque.
f) The drawer of the said cheque / accused fails to make the payment of the said amount of the money to the complainant within 15 days of the said notice.
g) The debt or liability against which the cheque was issued is legally enforceable.
20. In view of the aforesaid discussion, accused Sh. Rakesh Kumar Jain is held guilty for offence U/s 138 NI Act and he is accordingly convicted for the offence u/s 138 of Negotiable Instruments Act.
Announced in open court (Deepika Singh) today i.e. on 15.02.2013 MM-01 NI Act / North / Delhi CC No.2009/11 Page 27 of 30 Ashok Kumar Jain Vs. Rakesh Kumar Jain IN THE COURT OF MS. DEEPIKA SINGH, METROPOLITIAN MAGISTRATE-01, NI ACT, NORTH, DELHI CC No. 2009/11 Sh. Ashok Kumar Jain S/o Sh. Babu Lal Jain R/o 368, Chitla Gate, Chawri Bazar, Delhi-110006 ....................Complainant vs. Sh. Rakesh Kumar Jain S/o Sh. Jyanti Prasad Jain R/o 368, Chitla Gate, Chawri Bazar, Delhi-110006. ............................Convict ORDER ON SENTENCE : 28.02.2013
Present : Complainant in person along with Ld. Counsel Mr. Akash Mishra.
Convict in person alongwith Ld. Counsel Sh. D. K. Mishra. Arguments heard on sentencing.
Ld. counsel for the convict has argued that convict has a large family to support including a wife who is suffering from brain tumor and two children and he is sole bread earner of his family. He has been bonafide throughout in his conduct before the court, hence lenient view should be taken towards him.
CC No.2009/11 Page 28 of 30
Ashok Kumar Jain Vs. Rakesh Kumar Jain Since the cases of dishonoring of the cheques are on high rise in the society, therefore, court is not inclined to take lenient view and release the convict under Probation of Offenders Act as it would not be having any deterrent effect.
Almost 12 years have elapsed since the cheque was dishonored and the same has yet not been repaid to the complainant.
Keeping in view this conduct of the convict, no leniency ought to be granted to him. The object of Section 138 N.I. Act is to inculcate faith in the efficacy of banking operations and credibility in transacting business on negotiable instrument. It may also be noticed that when this offence was inserted in the statute in 1988, it provided for imprisonment upto one year which was revised to two years following the amendment to the Act in 2002, which makes it quite evident that the legislative intent to provide a strong criminal remedy in order to deter the worryingly high incidence of dishonour of cheques. In the present case, this faith has been breached and warrants imposition of imprisonment and payment of compensation.
After hearing the arguments, court is of the considered opinion that convict Sh. Rakesh Kumar Jain is sentenced to simple imprisonment for three months and he is further liable to pay a compensation of Rs. 1,60,000/-(Rs. One lac sixty thousand only) to the complainant within two months from today i.e.28.02.2013 failing which, he will be liable to further simple imprisonment of three months.
At this stage, Ld. Counsel for the convict has filed an application for suspension of sentence, so that he can file an appropriate appeal CC No.2009/11 Page 29 of 30 Ashok Kumar Jain Vs. Rakesh Kumar Jain before the appropriate court. Hence convict is admitted to bail for 30 days on furnishing bail bond in the sum of Rs.10,000/- along with one surety of like amount.
Bail bonds furnished. Accepted.
Convict is admitted to bail till the expiry of 30 days.
Come up before this court on 30.03.2013. Copy of the judgment and order on sentence is given free of cost to the convict.
Announced in open court (Deepika Singh)
today i.e. on 28.02.2013 MM NI Act / North / Delhi
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