Delhi District CourtMoti Kumari vs Mukesh Gupta 1 on 30 June, 2017IN THE COURT OF MS. AMRITA TONK,
           METROPOLITAN MAGISTRATE (NI ACT)-1, CENTRAL:
           ROOM NO.337, TIS HAZARI COURT COMPLEX, DELHI

Moti Kumar through LR Sh. Satish Kumar


VERSUS


Mukesh Gupta
                                     JUDGMENTPart A - The lis at a glance
A. Serial No. of the Case:                   516001/16

B. Date of Institution:                      28.04.2012

C. Name of the Complainant:                  Moti Kumari, W/o Sh. Rup Narain,
                                             R/o H.No. 3435, Gali Bajrang Bali,
                                             Chawri Bazar, Delhi-110006.Through the LR Sh. Satish Kumar.D. Name of Accused:                          Mukesh Gupta, S/o Sh. Madan Lal.
                                             M/s LKG Metal Store, 3435, Gali
                                             Bajrang Bali, Chawri Bazar, Delhi-
                                             110006.

E.   Offence complained of:                  Dishonor of cheque - culpableu/s
                                             138of the Negotiable Instruments
                                             Act.

F.   Plea of the accused :                   Pleaded not guilty.

G. Final Order:                              Convicted.

H. Judgment reserved on:                     28.06.2017

I.   Judgment pronounced on:                 30.06.2017Moti Kumari VERSUS Mukesh Gupta                                                   1CC No. 516001/16Part B - A brief statement of reasons for the decision(As mandatedu/s 355(i)of the Code of Criminal Procedure, 1973.)1. This judgment shall decide upon the complaint filed by Moti Kumari, (hereinafter
   referred to as the 'Complainant') through her SPA holder Sh. Satish Kumar underSection 138, Negotiable Instruments Act, (hereinafter referred to as the 'theNI
   Act') against Mukesh Gupta (hereinafter referred to as the 'Accused').2. The case of the Complainant, in brief, is that the Accused had taken a loan of the
   amount of Rs. 1,50,000/- from the Complainant in September 2011. In discharge
   of his liability, the Accused issued cheque bearing number 490597 dated
   24.03.2012 for the amount of Rs. 50,000/- and cheque bearing number 33224
   dated 26.03.2012 for the amount of Rs. 1,00,000/- both drawn on Union Bank of
   India, Yusuf Sarai Branch, Delhi (hereinafter referred to as the 'cheques in
   question') in favor of the Complainant. The Complainant presented the said
   cheques in his bank but the cheques in question were dishonoured with the
   remarks "funds insufficient" vide separate bank returning memo dated
   27.03.2012. Thereafter the Complainant sent a legal demand notice dated
   02.04.2012 to the Accused, but Accused failed to make the payment of
   dishonoured cheque within the statutory period of fifteen days. Hence, the
   Complainant filed the present complaint.3. In his pre-summoning evidence, the Attorney of the complainant has tendered his
   evidence by way of affidavit Ex. CW1/B. He reiterated the contents of complaint
   and placed on record the original SPA as Ex. CW1/A, original cheque bearing
   number 490597 dated 24.03.2012 for the amount of Rs. 50,000/- drawn on Union
   Bank of India, Yusuf Sarai, New Delhi as Ex. CW1/1, original cheque bearing
   number 332224 dated 26.03.2012 for the amount of Rs. 1,00,000/- Union Bank of
   India, Yusuf Sarai, New Delhi as Ex. CW1/2, cheque returning memo datedMoti Kumari VERSUS Mukesh Gupta                                                         2CC No. 516001/1627.03.2012 as Ex.CW1/3 and Ex. CW1/3A, legal demand notice dated 02.04.2012
   as Ex. CW1/4, postal receipt as Ex. CW1/5 and AD card as Ex. CW1/6.4. Accused was summoned by the Court for the offence punishableu/s 138of
   Negotiable Instrument Act. Notice of accusationu/s 251Cr.P.C. was served upon
   the Accused to which she pleaded not guilty and claimed trial.5. Thereafter, the Accused filed the applicationu/s 145(2)NI Act, which was
   allowed and CW1 was cross-examined and discharged. The Attorney of the
   Complainant submitted that he did not wish to lead further evidence, and thus CE
   was closed.6. All the incriminating circumstances appearing in evidence against the Accused
   was put to him and his statement was recorded in terms of Sec 313Cr.P.C. The
   Accused denied taking the loan from the Complainant and stated that he had
   issued the cheques in question to the Complainant in the year 2005 with regard to
   an ongoing deal of the shop which was under the tenancy of the Accused and his
   wife. He admitted his signatures on the cheques in question and also admitted
   filling in the amount in the cheques. He denied filling in the remaining particulars.
   He denied receipt of the legal demand notice, however, he admitted that the
   address appearing on the same is correct.7. Thereafter, the Accused moved the applicationu/s 315Cr.P.C. and the same was
   allowed. Pursuant to the same, the Accused stepped in the witness box as DW2.
   The Assitant Manager from Union Bank of India, Yusuf Sarai Branch was
   examined as DW1. DW1 filed on record the statement of account of the Accused
   for the period 01.01.2007 to 25.05.2015 as Ex. DW1/1(Colly) and the print out of
   the cheque book maintenance record as Ex. DW1/2. DW1 and DW2 were
   examined in chief, cross-examined and discharged. Thereafter, the AccusedMoti Kumari VERSUS Mukesh Gupta                                                            3CC No. 516001/16submitted that he did not wish to lead further evidence and thus DE was closed
   and the matter was listed for final arguments. At this stage it is pertinent to
   mention that the evidence in the present matter has not been recorded in a
   summary manner, but it has been recorded in full with examination and cross-
   examination of the witnesses.In light of the judgment of Hon'ble Supreme Court
   inMehsana Nagrik Sahkari Bank Ltd. vs. Shreeji Cab Co.& Ors.[2014 CriLJ
   1953], this Court is inclined to rely on the evidence, which has been recorded by
   the learned Transferor Court.8. Final arguments were addressed on parties. Ld. Counsel for the Complainant
   submitted that the Accused has admitted his signatures on the cheque in question
   as well as filling in the amount in the cheques. He has argued that the issuance of
   the cheques is also not disputed and thus the presumptionsu/s 118and139NI Act
   have arisen in favor of the Complainant. Ld. Counsel for the Complainant has
   argued that the Accused has failed to rebut the presumptions arisen in favor of the
   Complainant as the Accused has failed to bring on record any substantial evidence
   to prove his defence. It is also argued that the Accused has admitted the address on
   the legal demand notice to be correct and thus the notice is deemed to have been
   served to the Accused as per the presumption under theGeneral Clauses Act.It is
   also argued that the record produced by DW1 is not accompanied by certificate u/s
   Sec 65B Evidence Act and hence cannot be read in evidence. On the other hand,
   Ld. Counsel has argued that the Complainant has not been able to prove that the
   cheque in question was issued against debt/liability since the Complainant failed
   to show the amount in her income tax returns. It has been argued that the cheques
   in question are part of the cheque book which was issued in 2003-04 and were
   handed over to the Complainant in the year 2005 with respect to a property deal
   which did not materialize. Ld. Counsel hasplaced reliance uponthe statement of
   account and the cheque book maintenance record Ex. DW1/1 and Ex. DW1/2. Ld.
   Counsel has submitted that CW1 has conceded in his cross examination that heMoti Kumari VERSUS Mukesh Gupta                                                           4CC No. 516001/16was aware that the Accused was residing at Green Park. It is argued that the legal
   demand notice was intentionally not sent at that address in order to ensure that the
   Accused did not receive the legal notice. Ld. Counsel has concluded his
   submissions stating that the Accused has successfully rebutted the statutory
   presumptions.9. I have heard the submissions and have carefully perused the record. For properly
   appreciating the facts of the case and submissions of both the parties, a reference
   is necessary to the relevant statutory provisions. The following are the essential
   ingredients for constituting the offence underSection 138NI Act:   Person must have drawn a cheque on an account maintained by him in
               a bank for payment of certain amount of money to another person from
               out of that account;   The cheque should have been issued for discharge, in whole or in part,
               of any debt or other liability;   That cheque has been presented to the bank within a period of six
               months from the date of which it is drawn or within the period of its
               validity whichever is earlier;   That cheque is returned by the bank unpaid, either because of the
               amount of money standing to the credit of the account is insufficient to
               honour the cheque or that it exceeds the amount arranged to be paid
               from that account by an agreement made with the bank;
              The payee or the holder in due course of the cheque makes a demand
               for the payment of the said amount of money by giving a notice in
               writing, to the drawer of the cheque, within 30 days of the receipt of
               information by him from the bank regarding the return of the cheque as
               unpaid;   The drawer of such cheque fails to make payment of the said amountMoti Kumari VERSUS Mukesh Gupta                                                           5CC No. 516001/16of money to the payee or the holder in due course of the cheque within
              15 days of the receipt of the said notice.It is only when all of the above-mentioned ingredients are satisfied that the person
   who had drawn the cheque can be deemed to have committed an offence underSection 138of the Act.10.    Issuance of the Cheque in question - In the present case, the Accused has
   admitted his signatures on the cheques in question. He has also admitted filling in
   the amount in the cheques as well as the issuance of the cheques. He has denied
   filling in the payee name and date in the cheques in question. It is no longer res
   integra, that no law requires that whole body of the cheque should be filled by the
   drawer himself. If the signatures on the cheque are admitted, the same is sufficient
   in terms of the judgment passed by the Hon'ble High Court of Delhi in the case ofRavi Chopra vs. State And Anr.[(2008) (2) LRC 118] In the present case, the
   Accused has admitted having drawn the cheques on a bank account maintained in
   his name & having signed the same. Thus, the presumption underSection 118andsection 139are raised.The Hon'ble Supreme Court inRangappa vs. Sri Mohan,
   [AIR 2010 SC 1898] observed:"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 underSection 139of the Negotiable Instruments
                    Act has to be raised by the Court in
                    favour of the complainant."11.    Presentation of the Cheque for payment and the same being returned un-
   paid- The cheques in question had been presented for payment by the Com-
   plainant and the same was returned back unpaid. The same has not been denied byMoti Kumari VERSUS Mukesh Gupta                                                           6CC No. 516001/16the Accused. Ex. CW1/1 and Ex. CW1/2 were returned unpaid with the remarks
   "funds insufficient" vide bank returning memo Ex. CW1/3 and Ex. CW1/3A.12.    Legal demand notice to be sent within 30 days of return of cheque and
   failure on the part of the Accused to make the payment within fifteen days of
   receipt of legal demand notice - As per the evidence on record, the communica-
   tion of dishonor of the cheque in question was given to the Accused by the Com-
   plainant vide legal demand notice dated 02.04.2012. The notice has been given
   within the stipulated period. The Accused in his statement recordedu/s 313Cr.P.C. has denied receipt of the legal notice. However, he had admitted that the
   address appearing on the legal demand notice is correct. To substantiate the fac-
   tum of service of the legal demand notice, the Complainant has also filed the
   postal receipt and signed AD card. It is also to be noted that the summons had
   been served upon the Accused at the same address. Thus, the presumption of ser-
   vice, under the statute, would arise as the notice has been sent by registered post
   in terms ofSection 27General Clauses Act. Even otherwise, it is pertinent to pe-
   ruse the judgment passed by the Hon'ble Supreme Court inC.C. Alvi Haji V.
   Palapetty Muhammed & Anr.[2007 STPL(DC) 952 SC] wherein the Hon'ble
   Court held that even if the accused didn't receive the legal demand notice he can
   pay the cheque amount within 15 days of service of summons from the court but if
   he fails, he can't contend that he has not received the legal demand notice.13.    Legally enforceable debt or liability- It is the case of the complainant that
   the Accused had taken an amount of Rs. 1,50,000/- as friendly loan from the Com-
   plainant (since deceased). The primary defence of the Accused is that the cheques
   in question had been issued by him for the purpose of a deal with respect to pur-
   chase of the premises owned by the Complainant in which the Accused was a ten-
   ant. It has been deposed by the Accused that the deal had not materialized.InRangappa vs. Sri Mohan[supra], the Hon'ble Supreme Court held that ordinarilyMoti Kumari VERSUS Mukesh Gupta                                                          7CC No. 516001/16in cheque dishonour cases, what the courts have to consider is whether the ingre-
   dients of the offence enumerated inSection 138of the Act have been met and if
   so, whether the accused was able to rebut the statutory presumption contemplated
   bySection 139of the Act. In the absence of compelling justifications, reverse
   onus clauses usually impose an evidentiary burden and not a persuasive burden.
   Thus it is the settled position that when an accused has to rebut the presumption
   underSection 139, the standard of proof for doing so is that of 'preponderance of
   probabilities'. Therefore, if the accused is able to raise a probable defence which
   creates doubts about the existence of a legally enforceable debt or liability, the
   prosecution can fail. The accused can rely on the materials submitted by the com-
   plainant in order to raise such a defence and it is conceivable that in some cases
   the accused may not need to adduce evidence of his/her own. The Hon'ble
   Supreme Court categorically observed that the presumption mandated bySection
   139of the Act does indeed include the existence of a legally enforceable debt or
   liability and to that extent, the impugned observations in Krishna Janadhan Bhat's
   case may not be correct. In view of rebuttable presumption, it is open to the ac-
   cused to raise a defence wherein the existence of a legally enforceable debt or lia-
   bility can be contested but there can be no doubt that there is an initial presump-
   tion which favours the complainant. In the present case, the Accused has merely
   stated that the cheques in question were issued for the purpose of a property deal
   in the year 2005 which did not materialise. During his testimony, the Accused has
   neither disclosed any details of the said property deal for instance the considera-
   tion, advance/earnest money, if any, or the purpose for which the cheques had al-
   legedly been issued nor has he brought on record any document to show that the
   cheques has been issued during the course of the alleged deal. No independent
   witness has been examined to prove the existence of any such deal. The burden to
   prove that the cheques had been issued for the purpose of a property deal which
   eventually did not materialise was on the Accused. Nothing has been brought on
   record to show that the Accused had ever demanded the return of the chequesMoti Kumari VERSUS Mukesh Gupta                                                           8CC No. 516001/16from the Complainant. Any prudent person faced with a similar situation would
   have taken some steps for recovery of the cheques either by reporting the same to
   the police, or informing his Bank of the same or by approaching a court of law.
   Even considering the fact that the Accused stated that he had not demanded return
   of the cheques on account of the good relations with the Complainant, it is highly
   unlikely that a prudent person who has issued cheques with the amount duly filled
   in, would not inform his bank to stop payment of the same in such a situation. No
   doubt, the accused is at liberty to set up a probable defence. However, the defence
   cannot be premised on the mere ipse dixit of the accused. There must be some
   credible material or circumstance available on record which should lead the Court
   to conclude that the defence/explanation for issuance of the dishonoured cheque is
   a probable one. The Accused stated that he had issued the cheques in the year
   2005. The Accused has relied upon the statement of account Ex. DW1/1(colly)
   which reflects the transactions carried out by the Accused. It is the prerogative of
   a drawer as to when he utilizes or issues any of his cheques. Even otherwise, the
   document Ex DW1/1(colly) is not of much help to the case of the Accused. For in-
   stance, the Accused has deposed that the cheques in question had been issued by
   him in 2005. As per the statement of account, the cheques prior and later than
   cheque number 490597 (Ex. CW1/1), more specifically cheque no. 490596 and
   490598 had been issued by the Accused in the year 2003 and 2004 i.e. before the
   time of issuance of Ex. CW1/1 as alleged by the Accused. Ex. DW1/2 (colly)
   which is a computer print out of the cheque maintenance record reflects the status
   of the cheques in question as 'unused'. The document is not relevant to the de-
   fence taken by the Accused as it is not the case of the Accused that he had not is-
   sued the cheques. Issuance of the cheques has been categorically admitted by the
   Accused in the present case.14.    It has been argued by Ld. Counsel for the Accused that CW1 in his cross ex-
   amination has admitted that the Complainant has not disclosed the loan in the in-Moti Kumari VERSUS Mukesh Gupta                                                           9CC No. 516001/16come tax returns and thus it leads to an inference that the complainant did not
   have sufficient money to advance the loan. In the humble opinion of this Court,
   this argument does not hold water in view of the judgment of the Hon'ble High
   Court Lekh Raj Sharma vs. Yashpal Sharma, (Crl.L.P. 567/2014) wherein the
   Hon'ble High Court held as under:".......21. The finding that, as the amount
                           of loan disbursed to the respondent was
                           not shown in the balance sheet and in-come tax return, the appellant could not
                           be said to have proved its case beyond
                           reasonable doubt, is also erroneous....."15.     In view of the above discussion and the facts of the present case, the presump-
   tion of legal liability underSection 118and139of the NI Act has remained unre-
   butted as the Accused has failed to put up a plausible defence and has neither
   brought on record any documentary evidence nor examined any witness to estab-
   lish his defence despite being given several effective opportunities. The Com-
   plainant has fulfilled the basic ingredients ofSection 138of the Act, the Accused
   stands convicted for the offence undersection 138of Negotiable Instrument Act,
   1881.Let the Convict be heard on point of sentence. Copy of this judgment be given to
   the convict free of cost.* Announced in the open court.(Amrita Tonk)
                                       MM -(NI Act)-Central-01/THC/Delhi
                                               30.06.2017Moti Kumari VERSUS Mukesh Gupta                                                           10CC No. 516001/16