Bharat Bhushan vs State & Anr.
2011 Latest Caselaw 4055 Del

*        IN THE HIGH COURT OF DELHI AT NEW DELHI

+                       Crl Rev. P.No.126/2011

     %                  Judgment reserved on :28th July, 2011
                        Judgment delivered on:23rd August, 2011


         BHARAT BHUSHAN                            ..... Petitioner

                             Through: Mr.Arun Mahajan and
                             Mr. Rajesh Arora, Advs.
                        versus

         STATE & ANR.                         ..... Respondents

                             Through: Mr. Sushil Kaushik          for
                             Mr.Satish Aggarwala, Adv.


CORAM:
HON'BLE MR. JUSTICE SURESH KAIT

     1. Whether the Reporters of local papers may be allowed
        to see the judgment?                           Yes
     2. To be referred to Reporter or not?              Yes
     3. Whether the judgment should be reported
        in the Digest?                                  Yes

SURESH KAIT, J.

1. By the instant petition, the petitioner has prayed to set

aside the judgment dated 22.11.2004 and order on sentence

dated 24.11.2004, whereby, the petitioner was sentenced to

undergo SI for one year and fine of ì 5,000/-.

2. He has further challenged the order dated 02.02.2011

passed by the learned Addl. Sessions Judge, South East,

Saket Courts, New Delhi, whereby, the substantive sentence

of one year awarded by the ld. trial court was done away

with. However, the fine was enhanced to ì 16,40,000/-.

3. The case of the respondent No.2./complainant in brief

was that he was in need of a loan of ì 30 lacs and as such he

came into contact with the petitioner who assured him of

loan. After discussion, the petitioner told the respondent

No.2 that Manager of Vaish Cooperative Bank, Darya Ganj

Branch had agreed to advance a loan of ì 30 lacs.

4. The respondent No.2 signed various documents in

respect of grant of loan of ì 30 lacs, trusting the petitioner.

5. It was also the case of the respondent No. 2 that he

paid in cash a sum of ì 8.21.600/- to the petitioner on his

representation that this amount was to be deposited in the

bank as margin money and also towards other related

expenses. The petitioner told the respondent No. 2 that he

had deposit the aforesaid amount with the bank. In this

respect he showed a receipt to the respondent but did not

handed over the same to him.

6. When the respondent No. 2 enquired about the loan, he

was told by the petitioner that proposal was at the final

stage. Ultimately, when the petitioner failed to get the loan

sanctioned, the respondent demanded the aforesaid amount

of ì 8,21,600/-. To discharge that liability, the petitioner was

alleged to have issued cheque in the sum of ì 8,21,600/-

bearing No.989849 dated 19.10.2001 drawn on State Bank

of Bikaner and Jaipur, Janakpuri, New Delhi.

7. Further, the case of the respondent No.2 was that on

presentation for encashment the aforesaid cheque issued by

the petitioner the same was received back dishonoured with

the remarks "Insufficient Funds". Whereupon, legal notice

dated 10/12.11.2001 was sent to the petitioner by registered

post dated 12.11.2001 and through certificate of posting

dated 13.11.2001, but the petitioner failed to make the

payment. Thereafter, the respondent No. 2 filed the

complaint against the petitioner.

8. Vide order dated 02.01.2002 the petitioner was

ordered to be summoned for an offence under Section 138 of

the Negotiable Instruments Act, because prima facie case

had been made out against the petitioner and notice for the

aforesaid offence was served upon the petitioner on

26.11.2002. Since the petitioner pleaded not guilty and

claimed trial, respondent No.2 examined himself as CW1.

9. The petitioner, when examined under Section 281 of

Cr.P.C., denied to have issued cheque in question in favour

of the complainant. The case of the petitioner was that the

respondent No.2 was to supply him cloths which were never

supplied and he had been falsely implicated. However, the

petitioner opted not to lead any evidence in defence.

10. It is pertinent to mention here that when the case was

pending for final arguments, the petitioner came forward

with an application under Section 315 of Cr.P.C. Ultimately,

he examined himself as his own witness as DW1 while

tendering into evidence his affidavit Ex.CX.

11. Ld. counsel for the respondent No.2 while arguing

before the trial court has referred to the statement of

respondent No.2 and other documents available on record

and argued that the case of the respondent No.2 stood duly

established against the petitioner.

12. On the other hand, ld. counsel for the petitioner has

referred to the material available on record and argued that

the petitioner issued the cheque in question only towards

security for the goods which were to be supplied by the

respondent No.2 to the petitioner but since the respondent

No.2 never supplied those goods, the petitioner had no

liability to discharge and as such the complaint was liable to

be dismissed.

13. The respondent No. 2 filed complaint on the basis of

which the alleged cheque No.989849 dated 19.10.2001 for

ì 8,21,600/- was issued by the petitioner. While appearing in

court as CW1, he has proved cheque Ex.C1, and after

deposing about the circumstances which led to its issuance

by the petitioner in his favour. He has stated in his

statement that he wanted loan for MRI machine, advertised

for the same and the petitioner contacted him and assured

to arrange for loan from Vaish Co-operative Bank. He further

deposited that the petitioner asked him to become member

of said bank but for that he was required to pay some

amount so that loan could be sanctioned. Since he was in

need of ì 30,00,000/- for the machine and the petitioner told

him that he would have to pay 5% margin money to get this

much amount of loan. Further, according to the respondent

No. 2 he paid ì 8,21,600/- to the petitioner towards margin

money. He had explained that initially the margin money

was to be extent of 5% but ultimately petitioner went on

increasing the same. The petitioner had told the respondent

No. 2 that insurance premium was also to be paid.

14. The respondent No. 2 further deposed that he had

been asking the petitioner about sanctioning of the loan.

The petitioner always gave an assurance that the same was

in process. Ultimately, the petitioner told him that he could

not get the loan from the aforesaid Vaish Co-operative Bank

and rather he would get the loan sanctioned from Delhi Co-

operative Bank. He further deposed to have approach Delhi

Co-operative Bank, as per membership given by the accused

but the same was found to be false. Thereafter, he asked

the petitioner either to get the loan sanctioned or to return

the money which he has obtained from him. According to

the respondent No. 2, the petitioner then gave him cheque

Ex. C1.

15. There is nothing in cross-examination of the

respondent No. 2 to disbelieve this version narrated by him.

It is true that the respondent No. 2 did not obtain any receipt

from the accused while paying him ì 8,21,600/- towards

margin money to get loan sanctioned from the bank, the

same did not adversely affect the case of the respondent

No.2 particularly when accused had not disputed his

signature on cheque Ex. C1.

16. During cross-examination under Section 281 of Cr.P.C.,

the petitioner came forward with the plea that the cheque

was not issued by him in favour of the respondent No. 2. At

the same time, he pleaded that respondent No. 2 was to

supply him clothes which were never supplied and that he

had been falsely implicated. Thereafter, the petitioner

stepped into witness box as DW1 and tendered into evidence

his affidavit Ex. DX.

17. As has been observed by the ld. Trial Judge on perusal

of para No.2 of the affidavit Ex.DX would reveal that the

petitioner in the third line of that paragraph denied to have

issued that cheque Ex. C1 to re-pay any debt amount, but in

the fourth line of that paragraph he admitted to have given

that cheque to the respondent No. 2, further pleading that it

was given by him without any amount and by way of

security.

18. The Trial Judge has recorded from this deposition in

that paragraph, it can safely be said that petitioner has come

forward with inconsistent and self-contradictory pleas.

Version of petitioner appears to be that the cheque was

blank at the time it was given to the complainant. However,

in his cross-examination as DW1 the accused admitted to

have given cheque Ex. C1 to the complainant towards

security. However, the petitioner has not led any cogent and

convincing evidence that the cheque Ex. C1 is in his

handwriting. He could get the contents of cheque

scientifically examined from any expert but he did not take

any step in that direction, for the reasons best known to him.

The petitioner has admitted in his cross-examination that the

cheque bears his signatures. Presumption of consideration

is attached to the cheque.

19. The petitioner had come forward with the plea that that

cheque was given to the respondent No. 2 towards security.

He is alleged to have placed orders with the complainant for

supply of clothes. However the petitioner had not placed on

record any document to show that any such order was

placed by him with the respondent No. 2.

20. In his cross-examination he deposed that first order

placed by him with the respondent No. 1 was of ì

50,000/60,000/-. However, for want to any documentary

evidence in this respect. It cannot be said that petitioner

had placed any such order with the respondent No. 2.

21. It is also not the case of the petitioner that any point of

time he issued any notice to the respondent No. 2 asking

him not to present the cheque or to bankers for stoppage of

payment, on account of non-supply of goods/clothes to him

by the complainant. Consequently, it cannot be said that

cheque Ex.C1 was given by him to the complainant by way

of security.

22. The respondent No. 2 had proved on record cheque

return memo‟s Ex.C2 and Ex.C3 which would reveal that

cheque Ex.C1 presented for encashment was received back

as dishonoured with reason "insufficient funds". Legal notice

Ex. C-4 had been issued had been duly proved on record.

The petitioner has admitted in his cross-examination to have

sent reply to the notice received from the respondent No. 2.

Reply to the legal notice is Ex.C7 dated 27.11.2001. The

evidence on record showed that the petitioner did not make

any payment to discharge liability to the cheque whereby

the respondent No. 2 had to knock at the door of the court

by filing the complaint on 02.01.2002.

23. The ld. trial judge, keeping in view the aforesaid

evidence, was of the view that the cheque Ex.C1 was issued

in favour of the respondent No. 2 to discharge liability of

ì 8,21,600/-, therefore, the trial judge held that the

allegations in the complaint stands fully established against

the petitioner. Therefore, the petitioner was held guilty by

the trial judge.

24. The petitioner, being aggrieved by the aforesaid

judgment of the trial judge had assailed and filed appeal in

the Court of Addl. Sessions.

25. The ld. counsel for the petitioner argued that before

the ld. ASJ in appeal that the respondent No. 2 had come

forward with a false and concocted story regarding the

issuance of cheque by the petitioner in discharge of any

legally recoverable liability. He submitted that as per the

version of respondent No.2, payments of money were made

to the petitioner outside the car parking of Maurya Hotel and

that too without taking any receipts of acknowledgements

from the petitioner. He submitted that neither 5% of ì 30

lacs nor 20% of ì 30 lacs was paid and the amount given was

ì 8,21,600/-. Further, the ld. counsel for the petitioner

submitted that respondent No.2 was not very sure about the

purpose for which he required the loan amount. In cross-

examination, respondent No.2 stated that he took loan as he

wanted to pledge the machines and later on stated that the

loan amount was required for maintenance of MRI machine.

26. Ld. ASJ that the money which respondent No.2 had paid

to the petitioner was stated to be withdrawn from his

personal account but in cross-examination he stated that the

amount paid to the petitioner consisted of amount paid by

Doctor V.K. Jaiswal. He argued that the cheque in question

was issued by the appellant by way of security during the

business dealings as the respondent was to supply clothes to

the appellant and respondent failed to prove his version.

26. On the other hand, ld. counsel for the respondent No. 2

submitted that the money was taken out of his personal

bank account and thereafter, it was explained in the cross-

examination that it included the amount paid by Dr. Jaiswal.

He had submitted that it was not the stand of respondent

No.2 that ì 8,21,600/- was paid to the appellant as 5% or

20% margin of the loan amount of ì 30 lacs. Initially, the

margin demanded was 5% which was later increased to

20%. It was evident from affidavit of the respondent No.2.

and his cross-examination that ì 8,21,600/- was demanded

by the petitioner and was paid to him on account of 20% of

the loan amount apart from insurance and other related

expenses. Respondent No.2 deposed that he took some

amount in cash from Dr. Jaiswal and deposited in his own

account from which it was later withdrawn and cash was

given to the petitioner. Dr. Jaiswal and the respondent no. 2

are stated to be business associates. It was the admitted

case of the petitioner that he had issued the cheque to

respondent No.2.

27. Ld. A.S.J. had gone in the depth of the case and

discussed the relevant law as laid down in the case of Hiten

P. Dalal vs. Bratindranath Banerjee, 2001 (2) JCC (SC)

51, as under:-

"The nature of the presumption under Section 138 is subject to the three conditions specified relating to presentation, giving of the notice and the non payment after receipt of notice by the drawer of the cheque. All three

conditions have not been denied in this case.

The appellant's submission that the cheques were not drawn for the 'discharge in whole or in part of any debt or other liability' is answered by the third presumption available to the Bank under Section 139 of the Negotiable Instruments Act. This section provides that "it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability". The effect of these presumptions is to place the evidential burden on the appellant of proving that the cheque was not received by the Bank towards the discharge of any liability. The effect of these presumptions is to place the evidential burden on the appellant of proving that the cheque was not received by the Bank towards the discharge of any liability.

It is well settled that presumptions are rules of evidence and do not conflict with the presumption of innocence, because by the latter all that is meant is that the prosecution is obliged to prove the case against the accused beyond reasonable doubt. The obligation on the complainant may be discharged with the help of presumptions of law or fact unless the accused adduces evidence showing the reasonable possibility of the non-existence of the presumed fact. In the case of a discretionary presumption the presumption if drawn may be rebutted by an explanation which "might reasonably be true and which is consistent with the innocence" of the accused. On the other hand in the case of a mandatory presumption "the burden resting on the accused person in such a case would not be as light as it is where a presumption is raised under S. 114 of the Evidence Act and cannot 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. The words 'unless the contrary is proved' which occur in this provision make it clear that the presumption has to be rebutted by 'proof' and not by a bare explanation which is merely plausible."

28. The ld. ASJ noted that record showed that the petitioner

had been taking shifting stands. In the statement of the

petitioner under Section 313 of Cr.P.C., he stated that "he

never issued the cheque in favour of the complainant."

Later on, he submitted that he did issue the cheque but it

was given as security to the respondent No.2 for payment

that was to be made by the petitioner to the respondent

No.2 for supplying clothes to the petitioner and thus it was

not against a legally enforceable debt as the respondent

No.2 failed to supply the clothes.

29. The ld. A.S.J. further found merits in the submissions of

ld. counsel for the respondent that minor discrepancies are

natural due to time gap between the date of incident and

date of evidence and also due to human fallibility.

30. The ld. A.S.J. further discussed the case law as held in

the case of Inder Singh & Anr. Vs. State (Delhi

Administration) - AIR 1978 SC 1091, which is as under:-

"An unmerited acquittal does no good to the society. Court should not lean in favour of acquittal by giving weight to irrelevant or insignificant circumstances or by resorting to technicalities or by assuming doubts and giving benefits thereof where none reasonably exists. A doubt has to be a reasonable doubt and not an excuse for a finding in favour of acquittal. The courts should display a greater sense of responsibility and have to be more sensitive.."

31. The ld. trial judge has noted the contention of the

petitioner that the cheque issued by him was not in

discharge of a legally enforceable debt as payment was

made by the respondent No.2 outside Maurya Hotel, has no

merit. Only because, the venue at which the cash exchange

hands was at a public place like outside the Maurya Hotel,

would not imply that the cheque was not given in discharge

of a legally enforceable debt.

32. The ld. trial judge found no merit in the contention that

the cheque issued by him was not in discharge of a legally

recoverable debt as no receipts were taken by the

respondent when he made payment to the petitioner. The

ld. A.S.J. was of the opinion that there was no requirement of

law that a receipt has to be taken whenever cash exchanges

hands. However, it appears from the testimony of the

respondent No. 2 that it is evident that after two days of

receiving payment, petitioner showed a receipt to the

respondent No. 2 which purportedly was receipt of the

payment to the bank by the petitioner. However, the

petitioner refused to give the receipt to the respondent No.2.

Respondent No.2 insisted that he wanted payment in cash

from the petitioner.

33. The trial judge has also dealt with the other

contentions urged by the ld. counsel for the petitioner that

the cheque issued by him was not in discharge of a legally

enforceable debt as cheque was issued by the petitioner as

security against the respondent supplying clothes to the

petitioner and not against a legally enforceable debt. The ld.

trial judge was of the view that in this respect, petitioner has

failed to produce any evidence to show that he had issued

the cheque as a „security‟ to the respondent No.2 for

payment that was to be made by the petitioner to the

respondent No.2 for supplying clothes to the appellant.

Appellant appeared in the witness box to support his case as

DW1. In cross-examination, he deposed that turn over was

about 10-12 lacs. He further stated that the respondent did

not tell the name of his company and was accompanied by

Doctor Jaiswal. He did not get this fact verified whether the

respondent was actually dealing with clothes. He did not

place any written order but only placed verbal orders. He

further deposed that the first order which petitioner placed

was ì 50,000/- to ì 60,000/- and gave the cheque Ex.C1 as

„security‟.

34. The ld. ASJ in appeal has observed that the burden was

on the petitioner to disprove the presumptions under

Sections 138 and 139, which he failed to discharge at all.

The petitioner did not produce any order or agreement that

allegedly took place between the two. The ld. A.S.J. was of

the view that it does not appeal to common sense and is not

convincing at all on the face of it, that one would give a

blank cheque as security for making payment for clothes

worth ì 50,000/- to ì 60,000/- to someone with whom up to

that time there was not even a single agreement or dealing.

35. The ld. A.S.J. in appeal has also dealt with the

contention of the petitioner that the cheque was not filled

by him but by someone else. Even otherwise, in view of

Section 20 „when a cheque is given in blank, person

regarding the cheque given prima facie, authority to the

holder thereof to make or complete, as negotiable

instrument‟.

36. Thus, in view of the ld. A.S.J., the petitioner had taken

shifting stands. In his statement u/s 313 of Cr.P.C.,

petitioner submitted that he never issued the cheque in

favour of the respondent No.2. Secondly, it was submitted

that he did issue the cheque, but it was given as „security‟ to

the respondent No.2 for payment, that was to be made by

the petitioner to the respondent No.2 for supplying clothes to

him and that it was not against a legally enforceable debt as

the respondent No. 2 failed to supply the clothes.

37. Respondent No.2 has categorical deposed that he

withdrew cash from his personal account so as to pay to the

petitioner and stated that he could prove this by producing

his Income Tax Return and bank statement. The petitioner

did not ask for and called him to produce the Income Tax

Return and bank statement to disprove the same. He could

have asked the court to direct respondent No.2 to produce

the same.

38. Keeping in view the aforesaid discussion in view, the

learned A.S.J. found no infirmity or illegality in the impugned

order passed by the learned MM. Therefore, conviction of

the petitioner for the offence punishable under Section 138

of the Negotiable Instruments Act was upheld.

39. While dealing with sentence the ld. appellate court has

held that the objectives of the provisions of Section 138 of

the Negotiable Instruments Act are to enhance the

acceptability of cheques in settlement of liabilities by making

the drawer liable for penalties in face of bouncing of cheques

due to insufficiency of funds in the accounts or for the

reason that it exceeds the arrangements made by the

drawer, with adequate safeguards to prevent harassment of

honest drawers. It was intended to prove a speedy remedy

to avoid injury or inconvenience to the payee or endorsee in

view of the fact that due to the latter‟s unexpected

disappointment he will have to lick the dust while meeting

his own future commitments made to others.

40. The ld. counsel for the respondent No. 2 submitted that

since the respondent No. 2 had prosecuted the appellant

under the Negotiable Instruments Act, he had not filed any

suit for the recovery of the amount covered by the cheque

and because of that the respondent has suffered a huge

financial loss. According to the learned counsel, the

respondent No. 2 has not filed any suit for the recovery of

money as he was hopefully expecting that the courts below

would have convicted the appellant. There is need for

making liberal use of provisions contained in Section 357(3)

of Cr.P.C. while dealing with the case arising under the

Negotiable Instruments Act, the trial court has to consider as

to what would be the reasonable amount of compensation

payable to the respondent No.2.

41. The learned appellate court was of the opinion that

while imposing sentence under the provisions of the

Negotiable Instruments Act, the court has to take into

consideration all aspects of the case including the financial

loss caused to the payee or holder in due course of the

cheque, the quantum of the amount involved in the cheque,

status of the appellant as well as of the respondent, time

and costs consumed in the litigation, etc.

42. In this case, the Ld. Appellate Court has noted that the

trial court has not assigned any reasons whatsoever for not

awarding the compensation to the respondent No.2. The

learned trial court ought to have awarded adequate

compensation to alleviate the distress of the respondent.

43. In the present case, it is to be noted that the cheque

was issued in the year 2001. Almost 10 years have elapsed.

The respondent No.2 must have suffered financially due to

the non-availability of the amount due to the conduct of the

petitioner in issuing cheques dishonoured.

44. The appellate court was of the view that the court

below has erred in imposing a meagre fine of ì 5,000/- and

payment of compensation of ì 5,000/- for the loss suffered by

the respondent No.2. Accordingly, the substantive sentence

of one year awarded by the ld. trial court was done away

with. However, fine was enhanced to ì 16,40,000/-. It was

further directed that the entire fine proceeds were directed

to be given to the respondent No.2 as compensation.

45. I find no discrepancy or illegality in the judgment dated

28.02.2011 passed by the learned appellate court. The

learned counsel for the petitioner could not point out any

illegality or infirmity in the order assed by the two courts

below. I concur the same.

46. I note, vide order dated 23.03.2011, this Court had

stayed the operation of the impugned order subject to the

condition that the petitioner shall deposit ì 10 lacs with the

Registrar General of this Court within four weeks from that

date.

47. Vide order dated 02.06.2011, this Court has observed

that neither the amount has been deposited within four

weeks nor the interim order has been continued after

19.05.2011.

48. Furthermore, vide order dated 05.07.2011, Crl. M.B.

No.509/2011 was dismissed and the stay of the impugned

order was vacated.

49. The conduct of the petitioner is not appreciated,

therefore, while dismissing the petition, I impose a cost of

ì 50,000/- on the petitioner which shall be paid to the

respondent No.2.

50. I further direct that if the petitioner does not pay the

entire fine amount to the respondent No.2 within four weeks,

then he shall pay 9% interest on the entire amount till the

realization of the same.

51. Accordingly, the Crl Rev. P.No.126/2011 is dismissed

with costs of `50,000/- as mentioned above.

SURESH KAIT, J

August 23, 2011 RS