Delhi District Court
Madhu Gupta vs Satyam Finlease Pvt. Ltd on 6 January, 2016
IN THE COURT OF Ms. REKHA RANI
DISTRICT & SESSIONS JUDGE (WEST) : DELHI
Criminal Appeal No. 99/2015
Unique ID No. 02401R0592642015
Criminal Appeal No. 100/2015
Unique ID No. 02401R0592652015
Criminal Appeal No. 101/2015
Unique ID No. 02401R0592682015
AND
Criminal Appeal No. 102/2015
Unique ID No. 02401R0592712015
Madhu Gupta
W/o Sh. Ramesh Kumar Gupta
R/o B150, Naraina Vihar,
New Delhi110028. . . . . Appellant
versus
Satyam Finlease Pvt. Ltd.
Through its Director
Mr. Sunil Batra
107A, Shivlok House1,
Karampura Commercial Complex,
New Delhi110015. . . . . Respondent
Date of institution : 12.11.2014
Judgment Reserved on : 02.01.2016
Date of pronouncement : 06.01.2016
Crl. App. No.99/15 , 100/15, 101/15 & 102/15 Madhu Gupta vs. Satyam Finlease Pvt. Ltd.
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JUDGMENT
1. Vide this common judgment, I shall dispose off aforesaid four appeals instituted on 12.11.2014 by the appellant/ convict Madhu Gupta whereby the appellant has assailed the impugned judgment dated 25.09.2014 and impugned order on sentence dated 13.10.2014 passed by Sh. Gaurav Gupta, Ld. MM01 (N.I. Act), SouthWest, Dwarka Courts, Delhi in four Complaint Cases bearing CC No.4736/14, 4737/14, 4739/14 & 4738/14 respectively under Section 138 of the Negotiable Instruments Act (in short 'N.I. Act').
2. For the sake of convenience, the particulars of each case are drawn in tabular form which are as under : Appeal Complaint No. Cheque Imprison Compensa Loan amount No. number, ment tion awarded allegedly date & taken by amount husband of the appellant CA CC4736/14 No.786885 SI for Six Rs.10,20,000/ Rs. 10 Lacs 99/15 (Old dt. 22.04.13 months (ID SI for Six No.448/13) for Rs.10 months) Lacs CA CC4737/14 No.786884 SI for Six Rs.10,20,000/ Rs. 10 Lacs 100/15 (Old dt. 26.04.13 months (ID SI for Six No.476/13) for Rs.10 months) Lacs CA CC4739/14 No.786883 SI for Six Rs. 5,10,000/ Rs. 5 Lacs 101/15 (Old dt. 15.04.13 months (ID SI for Six No.419/13) for Rs.5 months) Lacs CA CC4738/14 No.786882 SI for Six Rs. 5,10,000/ Rs.5 Lacs 102/15 (Old dt. 04.04.13 months (ID SI for Six No.374/13) for Rs.5 months) Lacs Crl. App. No.99/15 , 100/15, 101/15 & 102/15 Madhu Gupta vs. Satyam Finlease Pvt. Ltd.
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3. The appellant assailed the impugned judgment and order on sentence interalia pleading : • that Ld. Trial Court failed to appreciate that the presumption under section 118(a) and under section 139 of N.I. Act are rebuttable and the appellant had duly rebutted the presumption during trial;
• that Ld. Trial Court failed to appreciate the evidence of DW1 i.e. the appellant herself;
• that Ld. Trial Court failed to appreciate that the complainant failed to prove that there existed legally recoverable debt or liability of the appellant;
• that Ld. Trial Court failed to appreciate that no case is made out u/s 138 of N.I. Act as the cheque in question was admittedly given as security to the complainant and the same was misused by the complainant;
• that Ld. Trial Court failed to appreciate that as appellant stood guarantor, she is not liable to pay any amount to the complainant as she had never received any amount from the complainant;
• that Ld. Trial Court failed to appreciate that the complainant cannot recover the loan amount by filing separate cases against both the principal borrower and the guarantor;
4. Notices of the appeals were issued to the complainant who has put in appearance and contested the instant appeals.
Crl. App. No.99/15 , 100/15, 101/15 & 102/15 Madhu Gupta vs. Satyam Finlease Pvt. Ltd.
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5. TCR of aforesaid four Complaint Cases were requisitioned which have been received and perused. I have heard Ld. counsel for the parties and have carefully perused the entire record.
6. The case of the complainant culminating in filing the aforesaid Complaint Cases, in nutshell, is that husband of the appellant had availed the loan as indicated above from the complainant and the appellant stood guarantor to secure repayment of the said loan and in order to discharge her liability, she issued aforesaid post dated cheques all drawn on State Bank of Bikaner & Jaipur in favour of the complainant. It is further submitted that on presentation, the said cheques were returned with the remarks 'Funds Insufficient' and thereafter, legal notice was served upon the appellant and on failure of the appellant to make the payment against the cheques in question within fifteen days of service of the legal notice, the aforesaid complaints under Section 138 of the Act were filed.
7. On appreciation of presummoning evidence recorded under Section 200 CrPC, the appellant was summoned and she was served with notice under Section 251 Cr.P.C. on 25.07.2013 in all the aforesaid complaint cases to which she pleaded not guilty and claimed trial.
8. In her defence, the appellant has stated that the cheques were given in blank to the complainant bearing her signatures on the Crl. App. No.99/15 , 100/15, 101/15 & 102/15 Madhu Gupta vs. Satyam Finlease Pvt. Ltd.
Page4of11 assurance that the same would be returned on repayment of loan taken by her husband. In her statement recorded u/s 313 Cr.P.C., the appellant has also stated that the cheques in question were blank signed security cheques which have been misused by the complainant.
9. Perusal of trial court record shows that the appellant issued the aforesaid cheques as she herself admitted her signatures on the same. Initial presumption under Sections 118 and 139 of N.I. Act can, therefore, be drawn while placing reliance on the judgment of the Hon'ble Apex Court in Rangappa vs. Mohan AIR 2010 SC 1989 which is to the effect that : "Once the cheque relates to the account of the accused and he accepts and admits the signatures on the said cheque, then initial presumption as contemplated under Section 139 of the Negotiable Instruments Act has to be raised by the Court in favour of the respondent."
10. Further, promissory note was executed by her and her husband in favour of the complainant. The promissory notes in all the cases are identical except the amount. One of the promissory note is reproduced as under : "On Demand I/ We Ramesh Kumar Gupta S/o Late Sh. Kashmiri Lal and Madhu Agarwal W/o Late Ramesh Kumar Gupta jointly and severally promise to pay M/s. Satyam Finlease Pvt. Ltd. 107A, Shivlok HouseI, Karampura Commercial Complex, New Crl. App. No.99/15 , 100/15, 101/15 & 102/15 Madhu Gupta vs. Satyam Finlease Pvt. Ltd.
Page5of11 Delhi110015 or order the sum of Rs.10,00,000/ (Rs. Ten Lacs only) for value received in cash with interest thereon at the rate of 1.5 per cent per month from this date until the date of payment in full with monthly rests. (Ref: CC NO.4736/14)
11. It was submitted on behalf of the appellant that guarantor is not liable to be prosecuted u/s 138 of the Act for standing surety for repayment of loan along with the principal borrower. Only the principal borrower is liable u/s 138 of the Act and the complainant can sue the guarantor for recovery of the loan in civil action.
12. Since, the appellant has admitted that the cheques in question were duly signed by her, her defence that she incurred no liability towards the complainant as she stood only a guarantor to the loan taken by her husband, is of no avail in view of law laid down in ICDS Ltd. vs. Beena Shabeer (2002) 6 SCC 426, where the facts were that the appellant therein had advanced some money to the respondents and had obtained a promissory note. It was stipulated that the respondents should pay interest every month. At the same time, the appellant creditor took a blank signed cheque from the respondents with an understanding that the complainant could fill the other columns in the cheque and present it if the respondents committed default in payment of interest. On dishonour of the cheque, a complaint was filed. The accused moved the High Court for quashing. The High Court relying upon its earlier decision in the case of Sreenivasan vs. State of Kerala 1999 (3) KLT 849 wherein it Crl. App. No.99/15 , 100/15, 101/15 & 102/15 Madhu Gupta vs. Satyam Finlease Pvt. Ltd.
Page6of11 was held that when a cheque was issued as a security, no complaint will be maintainable under section 138 of the Act, quashed the proceedings before the Magistrate. Allowing the appeal, the Hon'ble Apex Court held that : "the relevant words in Section 138 of the Negotiable Instruments Act, namely "any cheque" and "other liability" make it absolutely clear that a cheque may be issued on account of any liability and, therefore, even if the liability was as a guarantor, nonetheless a prosecution under section 138 of the Negotiable Instruments Act would be maintainable."
13. In the case of Industrial Investment Bank Of India Ltd. vs. Biswanath Jhunjhunwala 2009 (3) Bankers' Journal 1 after considering several decisions of the Courts as well as commentaries by Pollock & Mulla on the Indian Contract, Chitty on Contracts and the Halsbury's Law of England, the Hon'ble Supreme Court held that "the liability of the guarantor and principal debtor are coextensive and not alternative."
14. Appellant has also taken an objection that complainant could not have advanced loan of more than Rs.20,000/in cash in violation of Section 269 SSS of the Income Tax Act and that the alleged loan of Rs.40 Lacs was not shown in the balance sheet or incometax return of the complainant.
Crl. App. No.99/15 , 100/15, 101/15 & 102/15 Madhu Gupta vs. Satyam Finlease Pvt. Ltd.
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15. The appellant having admittedly signed the cheques in question cannot be allowed to wriggle out of the liability created thereunder by raising frivolous plea that the same were given in blank signed security cheques. The onus that the same were not given in discharge of legally enforceable debt or liability has not been dislodged by the appellant. Merely, questioning the complainant's financial capacity or his not filing income tax returns does not help the appellant to evade her liability and the fact that the cheques were given blank also does not absolve the appellant from the liability created therein. There is no plausible explanation as to how and who had forced the appellant to sign the blank cheques. The contention of the appellant that the complainant's failure to file any income tax returns or balance sheet reflecting the advancement of the loan in question to the appellant is fatal flaw in the complainant's case can be discarded by placing reliance on the Judgment in the case of Krishna P. Murajkar Vs. Joe Ferrao 2013 ACD 942 Bombay, which is to the effect: "Any default in paying tax is a matter between the defaulter and revenue authorities and it is not a ground in law to deny avenues open to the complainant for recovering the loan amount".
16. Appellant and her husband - Ramesh Gupta, appellant in connected appeals also submitted that their staying behind the bars will not help the complainant in recovery of loan amount. They also submitted that they may be given time to sell his property bearing Crl. App. No.99/15 , 100/15, 101/15 & 102/15 Madhu Gupta vs. Satyam Finlease Pvt. Ltd.
Page8of11 No.B150, Naraina Vihar, Delhi, market value whereof is worth crores of rupees, to liquidate loan amount which submission was vehemently repelled by the complainant by saying that appellants are making false promises now in the Court in appeal for the first time only to procrastinate proceedings. It was submitted that if appellants had any serious intention of paying back the loan, they would have made efforts at least after passing of impugned judgment. It was also submitted that loan was advanced in the year 2011 and till date, appellants have not bothered to pay back a penny.
17. Appellants also submitted that they have two grown up daughters and one son and therefore, their conviction will cast a social stigma on them and the same would not be conducive to their reputation and their daughters will face difficulty in their marriage. They further submitted that no purpose will be served if they are sent to jail and the complainant should be concerned with repayment of the debt which they will not be able to pay while in jail. They further submitted that they own an immovable property worth crores of rupees which they are willing to sell to pay off the debt of the complainant for which they seek six months time which proposal is vehemently turned down by the complainant submitting that the appellants are only trying to gain time without having any intention to pay as they have made no efforts to pay back the loan since the passing of the judgment by Ld. Trial Court on 25.09.2014.
Crl. App. No.99/15 , 100/15, 101/15 & 102/15 Madhu Gupta vs. Satyam Finlease Pvt. Ltd.
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18. Hon'ble Apex Court in case of M/s Laxmi Dyechem v. State of Gujraj & Ors., Criminal Appeal Nos. 18701909 of 2012, decided on 27.11.2012 qua Section 138 of NI Act observed that " ... the object underlying the provision contained in the said Chapter was aimed at securing faith in the efficacy of banking operations and giving credibility to negotiable instruments in business and day to day transactions by making dishonour of such instruments an offence ...".
The Hon'ble Apex Court in case titled State of Tamil Nadu v. M.K. Kandaswami, (1975) 4 SCC observed that "while interpreting a penal provision u/s 138 of NI Act, endevour should be made to preserve the workability and efficacy of the statute rather than an interpretation that would render the law otiose or sterile."
19. Keeping in view the said aim of the Act, the fact that defence put forth by the appellant lacks credibility, I endorse the conviction recorded by the Ld. Trial Court rejecting the story of the appellant of misuse of blank signed cheques in question by the complainant. The complainant has discharged burden of proof in respect of necessary ingredients on the basis of which presumption arise under Section 118 and 139 of the Act to the effect that the cheques in question had been issued for consideration and for discharge of debt or other liability owed by the appellant being guarantor in favour of the holder / payee. The defence taken by the appellant does not inspire confidence.
Crl. App. No.99/15 , 100/15, 101/15 & 102/15 Madhu Gupta vs. Satyam Finlease Pvt. Ltd.
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20. In view of the foregoing reasons, all the aforesaid appeals are dismissed. The impugned conviction and order on sentence are, therefore, upheld.
21. Appellant/ accused be taken into custody and sent to jail to serve the sentence imposed by Ld. Trial Court vide impugned order on sentence dated 13.10.2014 in all the Complaint Cases. Copy of this judgment be placed in all the appeal files.
A copy of this judgment be supplied to the appellant/ convict. TCRs be sent back forthwith along with copy of the judgment. Appeal files be consigned to Record Room.
Announced in Open Court ( Rekha Rani )
today this the 6th day of District & Sessions Judge / (West)
January, 2015 Tis Hazari Courts, Delhi
Crl. App. No.99/15 , 100/15, 101/15 & 102/15 Madhu Gupta vs. Satyam Finlease Pvt. Ltd.
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