Delhi District Court
Cc No.6628/10 Sandeep Gupta vs . Jagat Pal Singh Page No. 1 Of Pages 19 on 23 March, 2013
CC No.6628/10 SANDEEP GUPTA Vs. JAGAT PAL SINGH page no. 1 of Pages 19
IN THE COURT OF SH. GAJENDER SINGH NAGAR
METROPOLITAN MAGISTRATE, KKD, EAST, NEW DELHI
Complaint No. 6628/10
Unique ID No. 02402R0302112009
PS. Preet Vihar
Sh. Sandeep Gupta,
S/o Sh. C.R. Gupta,
R/o D349, Laxmi Nagar
Delhi ......... Complainant.
Versus
Sh. Jagat Pal Singh,
S/o Sh. Mawasi Ram,
R/o 244/1A, Gali No.3, Third Floor,
Mandawli, School Block, Delhi ......... Accused.
COMPLAINT U/s 138 OF THE NEGOTIABLE INSTRUMENTS ACT
Offence complained of : U/s 138 N.I. Act
Date of commission of offence : 21.09.2009
Plea of Accused : Not guilty
Complaint filed on : 12.10.2009
Final Arguments heard & Concluded on : 08.03.2013
Date of decision of the case : 23.03.2013
Final order : Conviction
CC No.6628/10 SANDEEP GUPTA Vs. JAGAT PAL SINGH page no. 2 of Pages 19
BRIEF FACTS AND REASONS FOR DECISION OF THE CASE
1. By way of the present judgment, this court shall decide the complaint case U/s 138 Negotiable Instrument Act 1881 (as amended up to date) filed by the complainant Sh. Sandeep Gupta, against the accused Jagat Pal Singh.
2. The facts in brief necessary for the disposal of the present case are that, complainant is / was running a proprietorship firm under the name and style M/s Swastik Timber Store and deals in business of all kinds of shuttering material on hire basis and the accused is/was also running a proprietorship firm under the name and style M/s Jai Durga Aluminum and used to deal with the complainant. During the business transaction in the month of February 2006, two agreements were executed between the accused and the complainant towards supply of the shuttering material on hire basis as per which the accused had taken the following supplies from the complainant:
S.No. Bill No. Dated Amount
1. 291 01.09.2006 42,320/
2. 279 01.10.2006 68,530/
3. 209 15.02.2008 38,576/
4. 379 16.08.2008 81,596/
5. 380 16.08.2008 56,298/
Total 2,87,320/
Hence, the accused was liable to pay Rs.2,87,320/ to the CC No.6628/10 SANDEEP GUPTA Vs. JAGAT PAL SINGH page no. 3 of Pages 19 complainant against the hire charges of shuttering material, beside it, balance shuttering material amounting about Rs. 2,94,315/ are also lying in the possession of the accused, hence there was total debit balance of Rs.5,81,615/ against the accused towards the complainant. To discharge the part liability towards the complainant the accused had issued following cheques bearing no. 669858 dated 01.07.2009 of Rs.20,000/, cheque bearing no. 816620 dated 15.07.2009 of Rs.1,65,000/ and cheque bearing no. 816656 dated 05.08.2009 of Rs. 1,20,000/ all cheques were drawn on Indian Overseas Bank, Preet Vihar branch, Delhi to the complainant but on presentation the cheque of Rs.20,000/ was duly encashed, however, cheques bearing no. 816620 and bearing no. 816656 were returned back dishonored with the remark "INSUFFICIENT FUND" vide dishonour memos dated 08.08.2009 & 17.08.2009 respectively. Thereafter a legal notice was sent to the accused on 05.09.2009 by way of regd AD and UPC. It is further alleged that despite service of legal notice accused has not paid any thing to the complainant till the filling of the case.
3. After the complaint was filed, the complainant led the pre summoning evidence by way of an affidavit and after hearing the counsel for the complainant and considering the entire material and documents on record, summons were issued against the accused vide order dated 13.10.2009 for the offence U/s 138 Negotiable Instrument Act 1881. On appearance of the accused a CC No.6628/10 SANDEEP GUPTA Vs. JAGAT PAL SINGH page no. 4 of Pages 19 separate notice U/s 251 Cr.P.C. Dated 16.10.2010 was framed upon the accused to which he pleaded not guilty and claimed trial.
4. In order to prove the case, the complainant examined himself as CW1 and reiterated the contents of the complaint on oath before this court and filed an affidavit in evidence. He also exhibited Memorandum of Undertaking & Understanding as Ex. CW1/1 & Ex. CW1/2, bill no. 291 as Ex. CW1/3, bill no. 279 as Ex. CW1/4, bill no. 209 as Ex. CW1/5, bill No. 379 as Ex. CW1/6, bill no. 380 as Ex. CW1/7, original cheque bearing No. 816620 as Ex. CW1/8, bearing no. 816656 as Ex. CW1/9, the cheque returning memos are Ex. CW1/10 & Ex. CW1/11, the legal notice of demand dated 05.09.2009 is exhibited as Ex. CW1/12, The original receipts of registered post are Ex. CW1/13, Ex. CW1/14, Ex. CW1/15, Ex. CW1/16 & U.P.C. as Ex. CW1/17, Returned AD are Ex. CW1/18, Ex. CW1/19, Ex. CW1/20 & Ex. CW1/21. During cross examination of CW1 he has also collectively exhibited 10 bills regarding old transactions between complainant and the accused as Ex. CW1/22 (collectively for 10 bills). Thereafter, the complainant evidence was closed at request.
5. After that on 20.12.2012 the statement of accused was recorded U/s 313 Cr.P.C in which all the incriminating evidence along with exhibited documents were put to the accused. In his CC No.6628/10 SANDEEP GUPTA Vs. JAGAT PAL SINGH page no. 5 of Pages 19 statement accused stated that the cheque of Rs.20,000/ was towards payment which was duly encashed, however the other two cheques were given as PDC as security as he used to take material on hire basis from the complainant. He also denied his liability towards cheques in question. He also denied service of legal notice. No defence evidence led by him and the matter was fixed for final arguments.
6. I have heard Ld. counsels and perused the entire record of the case file and the evidence on record. Both the counsel have referred to a number of cases, I have discussed them at the relevant place.
7. 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.
(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 CC No.6628/10 SANDEEP GUPTA Vs. JAGAT PAL SINGH page no. 6 of Pages 19 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.
8. Now let us deal with the each ingredient of the section 138 of Negotiable Instruments Act to see whether the case against the accused has been proved or not.
WHETHER THE CHEQUES WERE ISSUED OR NOT:
9. CW1 has stated in his examine in chief that cheques in question were issued by the accused. In his statement under section 313 Cr.P.C, it was accepted by the accused that the cheques in question bears his signature, however it is submitted by him that the same were issued as PDC as security. Whether the cheques were issued as security or not is to be decided under the next head. At this moment it is admitted that both the cheques were issued by the accused to the complainant, however, during his examination U/s 294 Cr. PC it was submitted by the accused that except signatures no other particulars were filled up by him in the cheques in question. The legal position in respect to the blank signed cheques is as under:
10. In Jaipal Singh Rana Vs. Swaraj Pal 149 (2008) DLT 682 it was held by Delhi High Court that "by putting the amount and CC No.6628/10 SANDEEP GUPTA Vs. JAGAT PAL SINGH page no. 7 of Pages 19 the name of payee there is no material alteration on the cheque U/s 87 of the Negotiable Instruments Act. In fact there is no alteration but only adding the amount and the date.
11. It was further observed in the aforesaid judgment that there is no rule of banking business that the name of the payee as well as the amount should be written by the drawer himself. No law provides that in case of cheques the entire body has to be written by the drawer only. "
12. In Ravi Chopra v. State & another (2008 (2) LRC 118 del) it was held by the Hon'ble high court that "it is possible for drawer of a cheque to give a blank cheque signed by him to the payee and consent either implidely or expressly to the said cheque being filed by the payee at a subsequent point of time".
13. Similarly it was held by the Kerala High Court in lillykutty v. lawrence (2004 (1) JCC (NI) 14), that there is no rule in banking business that payee's name and the amount should be written by drawer himself. Further the burden is on the accused to establish that the date, amount and payee's name are written by somebody else without the knowledge and consent of the drawer. Further in Vijender Singh V. Eicher Motors Ltd. & Anr decided on 05.05.2011 it was held by High Court of Delhi that a person issuing a blank cheque is supposed to understand the consequences of doing so. He can not escape his liability only on the ground that blank cheques had been issued.
14. From the above stated cases it is clear that in a case where CC No.6628/10 SANDEEP GUPTA Vs. JAGAT PAL SINGH page no. 8 of Pages 19 cheque is handed over without filling the name of the payee or other particulars, it is upon accused to prove by positive evidence that he/she did not give implied or express consent to the complainant to fill in the name of the payee and the other particulars. However in the present case no such cogent evidence have been adduced by the accused.
15. In view of the aforesaid discussion and the evidence on record it stands proved that the cheques in question were issued by the accused.
WHETHER THE CHEQUES IN QUESTION HAVE BEEN ISSUED IN DISCHARGE OF ANY LEGAL DEBT OR OTHER LIABILITY:
16. It is submitted by the CW1 that to discharge the part liability towards him the accused had issued the cheques in question bearing no.816620 dated 15.07.2009 of Rs.1,65,000/ and cheque bearing no.816656 dated 05.08.2009 of Rs. 1,20,000/ both the cheques were drawn on Indian Overseas Bank, Preet Vihar branch, Delhi for the repayment of the loan.
17. At this stage let us go through the relevant provisions of law. There is a presumption in favour of the complainant u/s 118 (a) Negotiable Instruments Act that until the contrary is proved, it will be presumed that every negotiable instrument was drawn for consideration and every such instrument when it has been accepted, endorsed, negotiated or transferred was accepted, endorsed, negotiated or transferred for consideration.
18. Further Section 139 of the Negotiable Instruments Act, CC No.6628/10 SANDEEP GUPTA Vs. JAGAT PAL SINGH page no. 9 of Pages 19 1881 provides that it shall be presumed until the contrary is proved that the holder of the cheque received the cheque of the nature referred in the Section 138 for the discharge in whole or in part of his debt or liability.
19. Now it will have to be examined whether the accused has rebutted the presumption as contemplated by Section 118 (b) and Section 139 of Negotiable Instruments Act.
20. It has been observed by the Hon'ble High Court of Delhi in V.S. Yadav Vs. Reena 172(2010) DLT 561 that the offence u/s 138 NI Act is a technical offence and the complainant is only supposed to prove that the cheques issued by the respondent were dishonored, his statement that cheques were issued against liability or debt is sufficient proof of the debt or liability and the onus shifts to the respondent / accused to show the circumstances under which the cheques came to be issued and this could be proved by the respondent only by way of evidence and not by leading no evidence. It was further observed that in order to rebut the presumption u/s 139 of the NI Act, the accused, by cogent evidence, has to prove the circumstance under which the cheques were issued. It was for the accused to prove if no loan was taken why he did not write a letter to the complainant for return of the cheques. Unless the accused had proved that he acted like a normal businessman / prudent person entering into a contract he could not have rebutted the presumption u/s 139 NI Act. If no loan was given but cheques CC No.6628/10 SANDEEP GUPTA Vs. JAGAT PAL SINGH page no. 10 of Pages 19 were retained he immediately would have protested and asked the cheques to be return and still cheques were not returned he would have served a notice as complainant.
21. Similarly in the present case it was for the accused to prove why he did not write a letter to the complainant for return of the cheques in question. Unless the accused had proved that he acted like a normal businessman / prudent person entering into a transaction he could not have rebutted the presumption u/s 139 NI Act. It was for the accused to have protested and asked the complainant to return the cheques and if still cheques were not returned he would have served a notice as complainant.
22. Therefore after the establishment of the fact that the cheques were issued by the accused and specific statement of the complainant as stated above regarding liability of the accused the burden to rebut the presumption shifted to the accused. It is established principle of law that presumption of law as raised Under sections 138 & 118 of the N.I. Act can be rebutted only by cogent evidence and not by mere plea taken in the statement of the accused recorded under section 313 r.w section 281 of Cr.P.C. Further such cogent evidence can be the cross examination of the complainant or his witnesses (as held in Birender Singh V. state (NCT of Delhi) 2008(1)JCC (NI) 15).
23. In a similar case, Jose Vs. P.C. Joy 2008 (4) RCR (Crl) 251( Kerala HC), it was submitted by the accused that the cheque in question was given by the accused to the complainant CC No.6628/10 SANDEEP GUPTA Vs. JAGAT PAL SINGH page no. 11 of Pages 19 as a security. Though the liability was settled as evidenced by Ex. D1 & Ex. D1(a) the cheque was not returned, inspite of requests. Therefore a stop memo was issued to the bank by the accused. He also gave a criminal complaint against the complainant which was taken on file as C.M.P 281/01 ( Ex. D2).
24. On these cogent evidences and the fact of issuing stop memo to the bank and filling a criminal complaint against the complainant the presumption under NI Act stood rebutted. However in the present case there is no cogent evidence whatsoever has been adduced by the accused to support his plea that the cheques in question were given to the complainant as security. No stop memo has been issued by him to his bank. He has not taken any other legal remedy against complainant. Thus this bald plea of the accused having not been substantiated by any cogent, convincing and clear evidence would not be sufficient to rebut the presumption of law.
25. On the other hand complainant have exhibited two memorandum of undertaking and understanding executed between the parties as Ex. CW1/1 & Ex. CW1/2. The execution of which has not been denied by the accused rather Ld. Counsel for the accused has also relied on these documents during his arguments and accused had accepted the execution of the same in his statement U/s 313 Cr. PC. These documents are the inception point of the transaction between the parties but these documents does not contain any stipulation that any cheques CC No.6628/10 SANDEEP GUPTA Vs. JAGAT PAL SINGH page no. 12 of Pages 19 have to be given by the accused to the complainant as security or if any cheques have been given by the accused to the complainant as security. Further the complainant had submitted in his examination in Chief by way of affidavit that the accused was liable to make payment in respect of bill no. 291, 279,209,379 & 380 totaling to Rs.2,87,320/ and he was also liable to pay a sum of Rs.2,94,315/ in respect of shuttering materials lying with the accused. During his cross examination it was submitted by the complainant that these five bills which were exhibited as Ex. CW1/3 to Ex. CW1/7 are carbon copies which bears signature of the accused at point 'A' on all the documents. This fact has not been denied on behalf of the accused. On the other hand Ld. Defence Counsel himself suggested to the complainant that "Question: I put it to you that you got the signature of the accused on the carbon copy not at the time of making of the bill but at a subsequent occasion?", from this suggestion it is very much clear that signatures on bills exhibited as Ex. CW1/3 to Ex. CW1/7 were accepted to be of the accused. Thus it is proved that accused had acknowledge the receipts of bills exhibited from Ex. CW1/3 to Ex. CW1/7. These bills are in total amounting to Rs.2,87,320/ thus it appears that accused was liable to pay atleast this much amount to the complainant and the cheques in question are totaling to Rs. 2,85,000/ which is part of that liability. Further the defence of the accused that he had made a number of payments to the complainant has not been proved by him as he did not appear in CC No.6628/10 SANDEEP GUPTA Vs. JAGAT PAL SINGH page no. 13 of Pages 19 defence evidence and no such receipt has been shown by him to the complainant at the time of his examination.
26. The Ld. Defence counsel had argued that bills of the complainant are not genuine as bill no. 279 is dated 01.10.2006 while bill no. 291 is dated 01.09.2006 thus there is clear manipulation in the bills. This discrepancies has been explained by the complainant as in their business transactions some times they lift a bill blank and subsequently fill up the same. In any case the signature of the accused are not disputed on these bills and it has not been explained as to what was the occasion for the accused to acknowledge these bills by putting his signatures on them without actually receiving goods. Thus the contentions of Ld. Defence Counsel are not significant enough to rebut the statutory presumption arisen in favor of the complainant. The presumption U/s 118 & 139 of NI Act are mandatory presumptions in favor of the complainant and the same can not be held to be discharged merely by reason of the fact that the explanation offered by the accused is reasonable and probable. It must further be shown that the explanation is a true one. A fact is said to be proved when its existence is directly established or when upon the material before it Court finds its existence to be so probable that a reasonable man would act on the supposition that it exists.
27. The counsel for the accused cited the decision of the Supreme court in his favour titled as Krishna Janardhan Bhat v. CC No.6628/10 SANDEEP GUPTA Vs. JAGAT PAL SINGH page no. 14 of Pages 19 Dattataraya G. Hegde (2008) 4 SCC 54, however the ratio of this case that existence of legally recoverable debt is not a matter of presumption under section 139 of the NI Act, has been overruled by the Hon'ble Supreme Court itself in Rangappa Vs Mohan 2010TLPRE0300 (A Three Judges Bench Judgement) where in it was held:
We are in agreement with the respondent claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat (supra) may not be correct.
28. Thus from the above stated discussion it is clear that the accused has failed to rebut the presumptions U/s 118 (b) and 139 of Negotiable Instruments Act.
29. Considering the entire evidence on record, it stands duly proved that the cheques in question which are CW1/8 & Ex. CW1/9 were issued and drawn in discharge of legal liability of the accused and for consideration.
WHETHER THE CHEQUES WERE PRESENTED WITHIN THE PERIOD OF VALIDITY AND DISHONOR OF THE SAME DUE TO PAYMENT STOPPED:
30. Perusal of the record reveals that the cheques in question which are Ex. CW1/8 & Ex. CW1/9 are dated 15.07.2009 & CC No.6628/10 SANDEEP GUPTA Vs. JAGAT PAL SINGH page no. 15 of Pages 19 05.08.2009, were got dishonoured due to the reason Insufficient Funds vide cheque returning memos which are Ex. CW1/10 & Ex. CW1/11 dated 08.08.2009 & 17.08.2009 (Exhibited Under Section 146 NI Act.) respectively which clearly shows that the cheques have been presented and dishonored due to insufficiency of funds within period of their validity i.e. within six months from the date of the cheques. The accused has not objected to or denied these facts.
SERVICE OF LEGAL NOTICE OF DEMAND UPON THE ACCUSED:
31. CW1 has specifically stated in his examination in chief that the complainant got issued the legal notice of demand dated 05.09.2009 which is Ex. CW1/12 and it was sent to the accused on the same day (within 30 days of knowledge of dishonour of cheque) vide Registered Post and UPC which are Ex. CW1/13 to Ex. CW1/16 & Ex. CW1/17. The legal notice was sent to the accused at his address i.e. A111, Joshi Colony, Mandawli, Delhi110092 and also to 244/1, Gali No.3, third Floor, Mandawli Fazalpur, School Block, Near Talab Chowk, Delhi92.
32. The accused has submitted in his statement recorded U/s 313 Cr. PC that he did not received the legal notice. However the address mentioned on the postal receipts and legal notice is the same on which the summons returnable on 01.03.2010 were refused to be received by the accused. His refusal has been recorded by the process server. Further these are the same CC No.6628/10 SANDEEP GUPTA Vs. JAGAT PAL SINGH page no. 16 of Pages 19 addresses on which B/W returnable on 24.07.2010 were issued against the accused which could not be served as he was not at home and his wife Shashi Bala met the process server, consequent to these B/Ws the accused appeared before the Court on 24.07.2010. In his bailbond he mentioned his address as 244A/1, Gali No.3, School Block, Mandawli, Delhi. Thus it stand proved that the notices were sent at the correct address of the accused and by sending summons and B/Ws at the same address appearance of the accused was secured. However Ld. Defence Counsel has relied on a case decided by Hon'ble Karnataka High Court titled K. Narayanan Nayak v. M. Shivarama Sethi, 2009 (5) RCR (Civil) 262, on the basis of which it is submitted by him that even if notice is received by wife of the accused the same could not be contended as satisfactory service of the notice. It is further submitted by him that infact in the present case all the notices were returned back with the report "Bar Bar Jane Par Nahi Milta" or "Left" hence the notice can not be deemed to be served upon the accused. The decision of Hon'ble Karnataka High Court is not binding on this Court. It has already been observed that the addresses mentioned on the notices were correct as by sending summons and B/Ws on the very same addresses the presence of the accused was secured thus the postal reports does not inspire confidence and appeared to be procured. Further the following Apex Courts decisions have laid down the law with respect to service of notice categorically.
33. In K.Bhaskaran v. Sankaran Vaidhyan Balan AIR 1999 CC No.6628/10 SANDEEP GUPTA Vs. JAGAT PAL SINGH page no. 17 of Pages 19 SC 3762, it was held by the Apex court that:
34. "No doubt Section 138 of the Act require that the notice should be given only by "post". Nonetheless the principle incorporated in Section 27 (quoted above) can be profitably be imported in a case whee the sender has dispatched the notice by post with the correct address written on it then can be deemed to have been served on the sendee unless he proves that it was not really served and that he was not responsible for such non service. Any other interpretation can lead to a very tenuous position, as the drawer of the cheque who is liable to pay the amount would resort to the strategy of subterfuge by successfully avoiding the notice".
35. The above stated position was again reiterated by the Apex court in C.C. Alavi Haji v. Palapetty Muhammed's case where apex court further held:
36. It is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of Criminal Law, where there is no stipulation of giving of a notice before filing a complaint.
Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay CC No.6628/10 SANDEEP GUPTA Vs. JAGAT PAL SINGH page no. 18 of Pages 19 within 15 days of receipt of the summons from the Court along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the G.C. Act and Section 114 of the Evidence Act.
37. On the basis of above stated discussion and law laid down by Hon'ble Apex Court in above stated decision, it can be safely deemed that legal notice was duly served upon the accused. THE DRAWER OF THE CHEQUES HAVE FAILED TO MAKE THE PAYMENT WITHIN 15 DAYS OF THE RECEIPT OF SAID NOTICE:
38. CW1 has deposed in his examination in chief that despite service of legal notice of demand accused has failed to pay the cheques amount to the complainant. Accused has submitted in his statement under Section 313 Cr.P.C that he did not received the legal notice and there was no question of making any payment to the complainant in respect of the cheques in question as he was not legally liable to pay in respect of the same. Therefore this fact also stands proved.
39. In view of the aforesaid discussion, I am of the considered opinion that the complainant has proved his case against the accused beyond shadow of reasonable doubts. All the ingredients of Section 138 of Negotiable Instruments Act have been duly proved on record. Accordingly, accused Jagat Pal CC No.6628/10 SANDEEP GUPTA Vs. JAGAT PAL SINGH page no. 19 of Pages 19 Singh, S/o Sh. Mawasi Ram, R/o 244/1A, Gali No.3, Third Floor, Mandawli, School Block, Delhi stands Convicted of the offence U/s 138 Negotiable Instruments Act. Let the copy of this judgment be supplied to the accused free of cost. Announced in the open court today i.e. 23.03.2013 (GAJENDER SINGH NAGAR) MM:KKD:DELHI:23.03.2013 Containing 19 pages all signed by the presiding officer.
(GAJENDER SINGH NAGAR) MM:KKD:DELHI:23.03.2013