Delhi District Court
Ram Kumar Chauhan vs M/S Shriram Transport Finance Co.Ltd on 29 January, 2025
CNR No. DLNE01-002305-2024
Ram Kumar Chauhan Vs. M/s Shriram Transport Finance Co. Ltd.
Crl. Appl. No. 134/2024, CC No. 457/2021, PS Bhajanpura
DLNE010023052024
IN THE COURT OF SH. PULASTYA PRAMACHALA
ADDITIONAL SESSIONS JUDGE-03,
NORTH-EAST DISTRICT
KARKARDOOMA COURTS: DELHI
Criminal Appeal No. : 134/2024
Under Section : 415 BNSS
Police Station : Bhajanpura
CC No. : 457/2021
CNR No. : DLNE01-002305-2024
In the matter of: -
Ram Kumar Chauhan
S/o. Sh. Pratap Singh,
R/o. H.No. 250-C, Sector-2, E-Kamana Vishali,
I.E. Sahibabad, Ghaziabad, U.P.
...Appellant
VERSUS
M/s. Shriram Transport Finance Co. Ltd.
Plot No.7, Commercial, Sector-5,
Rajnagar, Sahibabad, Ghaziabad, U.P.-201005.
...Respondent
Date of Institution : 09.08.2024
Date of reserving Judgment : 24.01.2025
Date of pronouncement : 29.01.2025
Decision : Appeal is allowed.
JUDGMENT
1. This is an appeal preferred against the judgment of conviction
dated 01.06.2024 and order on sentence dated 11.07.2024, as
Digitally signed
by PULASTYA
PULASTYA PRAMACHALA (Pulastya Pramachala)
PRAMACHALA Date: 2025.01.29
Page 1 of 22 ASJ-03, North-East District,
11:53:22 +0530 Karkardooma Courts, Delhi
CNR No. DLNE01-002305-2024
Ram Kumar Chauhan Vs. M/s Shriram Transport Finance Co. Ltd.
Crl. Appl. No. 134/2024, CC No. 457/2021, PS Bhajanpura
passed by JMFC/NI Act/Digital Court, North-East, Karkardooma
Court, Delhi, in a complaint case titled as Shriram Transport
Finance Co. Ltd. v. Ram Kumar Chouhan, bearing CC No.
457/2021, under Section 138 read with Section 142 of Negotiable
Instruments Act, 1881 (hereinafter referred to as the Act). Vide
impugned judgment dated 01.06.2024, trial court convicted
appellant herein for offence under Section 138 of the Act. Vide
impugned order on sentence dated 11.07.2024, trial court
sentenced convict (appellant herein) with simple imprisonment
for six months and convict was to pay fine equivalent to
Rs.3,00,000, including the interest, legal fee and remaining
amount. Fine amount of Rs.3,00,000/- was directed to be paid by
convict/appellant herein as compensation to the complainant
(respondent herein) u/s. 357(1)(a) Cr.P.C. within 45 days from
11.07.2024. In case of default of payment of said fine, convict
was sentenced to serve simple imprisonment for 1 month. Trial
court also directed that the fine amount was to be recoverable as
per provision of Section 421 Cr.P.C.
BRIEF FACTS OF THE CASE
2. Briefly stated, the relevant facts giving rise to this appeal are that
complainant company was a registered company in the name &
style of “M/s. Shriram Transport Finance Company Ltd.”, having
its registered office at 3rd Floor, Mookambika Complex No.4,
Lady Desika Road, Mylapore, Chennai-600004. This company
was dealing with the business of finance of cars, commercial
vehicles and construction equipment etc. apart from other
business. This company had one branch office situated at Plot
(Pulastya Pramachala)
Page 2 of 22 ASJ-03, North-East District,
Karkardooma Courts, Delhi
CNR No. DLNE01-002305-2024
Ram Kumar Chauhan Vs. M/s Shriram Transport Finance Co. Ltd.
Crl. Appl. No. 134/2024, CC No. 457/2021, PS Bhajanpura
No.7, Commercial Sector-5, Rajindra Nagar, Sahibabad, Uttar
Pradesh-201005, which is engaged in the business of financing,
leasing, amongst other businesses.
3. Sh. Amit Kumar was appointed as authorised representative to
file, institute, sign, verify and pursue the complaint for and on
behalf of the complainant company. Later on, Sh. Tushar
Chandra Mishra was substituted as new AR for
complainant/respondent company herein.
4. Mr. Amit Kumar had filed a complaint dated 29.04.2021, for
offence punishable under Section 138 read with Section 142 of
the Act on behalf of respondent/complainant company, against
accused Ram Kumar Chauhan (appellant herein). This complaint
was filed for dishonour of a cheque bearing no. 897633, dated
09.02.2021, in the sum of Rs.2,75,000/-, drawn on Punjab
National Bank, Vaishali, Ghaziabad, U.P. As per allegations,
appellant herein had approached complainant company with
request and made a representation for financing vehicle loan.
Considering the request of appellant herein, complainant bank
had sanctioned and disbursed the amount financed in terms of the
agreement/contract no. MAYUVO502280003. In order to
discharge his liability, appellant had issued above-mentioned
cheque in favour of complainant company. At that time, appellant
had assured that cheque in question would be honored on its
presentation to the banker of complainant company.
5. In terms of the accused commitment, above-mentioned cheque
was presented on 03.03.2021, for its encashment with the banker
(Pulastya Pramachala)
Page 3 of 22 ASJ-03, North-East District,
Karkardooma Courts, Delhi
CNR No. DLNE01-002305-2024
Ram Kumar Chauhan Vs. M/s Shriram Transport Finance Co. Ltd.
Crl. Appl. No. 134/2024, CC No. 457/2021, PS Bhajanpura
i.e. Axis Bank Ltd., Branch Yamuna Vihar, Delhi-110053. But the
said cheque was dishonoured and same was returned back with
remarks “Account Closed”, vide return memo dated 03.03.2021.
Thereafter, complainant company approached appellant through
legal notice dated 19.03.2021, which was sent by way of Speed
Post/Registered Post on 23.03.2021. Appellant was requested to
remit the cheque amount within 15 days from the date of receipt
of the legal demand notice. But even after expiry of 15 days,
appellant failed to repay the cheque amount to the complainant
company. Therefore, this complaint was filed by the complainant
company against appellant herein.
6. Ld. MM/NI Act/Digital Court, North-East, Karkardooma Court,
Delhi, took cognizance of offence under Section 138 of the Act
and summoned appellant as accused vide order dated 03.09.2021.
On 28.03.2022, notice under Section 251 Cr.P.C. read with
Section 263(g) Cr.P.C. was framed and served upon appellant
herein, to which he pleaded not guilty and claimed trial.
Appellant admitted his signature on the cheque in question. He
had admitted his address to be correct and having received the
legal demand notice. Appellant further took plea that in the year
2014, he had got financed two vehicles from complainant
company. One was car make Tata Indigo financed with loan
amount of Rs.1,55,000/- and other was car make Innova financed
with loan amount of Rs.2,75,000/-. He had already repaid the
loan amount of car TATA Indigo and he had also repaid the
amount of Rs.2,20,000/- approximately for the loan of car make
(Pulastya Pramachala)
Page 4 of 22 ASJ-03, North-East District,
Karkardooma Courts, Delhi
CNR No. DLNE01-002305-2024
Ram Kumar Chauhan Vs. M/s Shriram Transport Finance Co. Ltd.
Crl. Appl. No. 134/2024, CC No. 457/2021, PS Bhajanpura
Innova. According to him only Rs. 55,000/- was left to be paid
for the loan of Innova car. He had given six security cheques
signed in blank to complainant company at the time of availing
loan and the cheque in question is one of them. Appellant further
took plea that he did not owe the liability of cheque amount
towards the complainant.
7. In complainant’s evidence, Sh. Tushar Chandra Mishra, AR of
the complainant company had examined himself as CW1 on
17.10.2023. CW-1 had tendered his affidavit in post summoning
evidence and relied upon the documents, which are: – (i)
Ex.CW1/A-evidence of complainant by way of affidavit; (ii)
Ex.CW1/1-copy of Special Power of Attorney; (iii) Ex.CW1/2-
cheque in question; (iv) Ex.CW1/3-cheque returning memo; (v)
Ex.CW1/4-Legal Demand Notice; (vi) Ex.CW1/5-Postal receipt;
(vii) Ex.CW1/6-Tracking report and (viii) Ex.CW1/7-Statement
of loan account. CW1 was not cross-examined on behalf of the
appellant. Thereafter, CE was closed.
8. Statement of appellant was recorded under Section 313 Cr.P.C.
Appellant admitted taking loan from the complainant. He denied
having issued cheque in question in discharge of his legal
liability. He also denied having received legal notice. He
admitted his signature on the cheque, but denied having filled
other details in it. Accused had opted to lead defence evidence.
9. Appellant examined himself as DW1. DW1/appellant deposed
that in the 2015 he had borrowed loan of Rs.2,75,000/- from the
complainant company. DW1 further deposed that he had already
(Pulastya Pramachala)
Page 5 of 22 ASJ-03, North-East District,
Karkardooma Courts, Delhi
CNR No. DLNE01-002305-2024
Ram Kumar Chauhan Vs. M/s Shriram Transport Finance Co. Ltd.
Crl. Appl. No. 134/2024, CC No. 457/2021, PS Bhajanpura
returned about Rs.2,20,000/- to the complainant company.
Insurance of his vehicle was done by the complainant company.
DW1 further testified that in the year 2017, insurance of his
vehicle was not done by the insurance company on the ground of
default of two EMIs. His vehicle met with an accident in the year
December 2017 and his vehicle was badly damaged in that
accident. DW1 further deposed that he did not receive any notice
from the complainant company. DW1 further deposed that in the
year 2018, complainant company had demanded Rs. 2-2.5 lacs
from him. But appellant was ready to pay Rs.1 lac to the
complainant company, for which complainant company did not
agree. In the year 2020, one official came to the appellant from
the complainant company and demanded Rs.4 lacs, but appellant
again told him that he was ready to pay Rs.1 lac only. Appellant
had given six blank signed cheques to the complainant company
as security at the time of taking loan, out of which present cheque
was misused by the complainant company.
10. DW1 was cross examined on behalf of the complainant company.
During his cross-examination, DW1 deposed that he had taken
Innova vehicle on loan from the complainant company for 48
installments of Rs. 9396/- each. He was aware that penalty would
be imposed in case of default of installment. Insurance of his
vehicle was done by complainant company twice. He admitted
that Insurance amount of his vehicle was Rs.16,295/- in 2015 and
Rs.14,005/- in year 2016. Installments of the insurance premium
were paid by the appellant. He had paid Rs. 2,20,000/- including
(Pulastya Pramachala)
Page 6 of 22 ASJ-03, North-East District,
Karkardooma Courts, Delhi
CNR No. DLNE01-002305-2024
Ram Kumar Chauhan Vs. M/s Shriram Transport Finance Co. Ltd.
Crl. Appl. No. 134/2024, CC No. 457/2021, PS Bhajanpura
insurance premium installments. Appellant further deposed that
cheque in question bore his signature, but amount in the same
was not filled by him. He admitted his address mentioned in legal
notice to be correct. As per calculation total amount of EMIs was
Rs.4,41,612/- to be paid till 2019. DW1 denied all the
suggestions put to him during his cross examination. Thereafter,
DE was closed.
GROUNDS
11. Being aggrieved of the impugned judgment of conviction and
order on sentence, appellant preferred this appeal. However,
appellant himself did not appear before this court, hence, trial
court was directed to take coercive steps to procure his
attendance. On the other hand, ld. counsel for appellant sought
his discharge on the grounds that appellant was not making any
contact with him. In these circumstances, Sh. Praveen Yadav was
appointed as ld. Amicus Curiae to present the case on behalf of
appellant in this appeal. The appeal was filed on the following
grounds: –
A. That trial court passed the impugned judgment and order, in
routine and mechanical manner without going into the merits and
facts of the case.
B. That trial court did not appreciate that appellant herein had taken
present loan from complainant/respondent company herein, in
the year 2015 for the sum of Rs.2,75,000/-. That out of loan
amount of Rs.2,75,000/-, appellant had paid Rs.2,20,000/-
through ECS on time to time. That respondent company wrongly(Pulastya Pramachala)
Page 7 of 22 ASJ-03, North-East District,
Karkardooma Courts, Delhi
CNR No. DLNE01-002305-2024
Ram Kumar Chauhan Vs. M/s Shriram Transport Finance Co. Ltd.
Crl. Appl. No. 134/2024, CC No. 457/2021, PS Bhajanpuraclaimed that appellant had issued the cheque in question to repay
the alleged loan amount.
C. That trial court did not appreciate the fact that respondent
company nowhere mentioned in the complaint that how much
amount was due against the appellant on the date of presentation
of cheque.
D. That trial court did not appreciate the fact that no ledger account
was produced on behalf of the respondent company, to prove the
legal dues, if any, at the time of presentation of the cheque in
question.
E. That trial court did not consider the fact that appellant was not
served with the notice and same was returned with report that no
such person. That statutory requirement of service notice not
fulfilled on behalf of respondent company.
ARGUMENTS
12. Sh. Praveen Yadav, ld. Amicus Curiae for convict/appellant
herein argued on the lines of grounds taken in the appeal. Ld.
Amicus Curiae had submitted certain guidelines and orders
issued by RBI, to submit that interest could not be charged over
interest, be it penal interest.
13. Sh. Tushar Chandra Mishra, AR for the complainant/respondent
company herein, could not furnish any material to justify
imposition of interest over interest in the form of penal interest.
He also could not offer any other submission on the point as
raised by this court i.e. to explain the statement of account and
the logic behind variance in the debit amount as shown in the
(Pulastya Pramachala)
Page 8 of 22 ASJ-03, North-East District,
Karkardooma Courts, Delhi
CNR No. DLNE01-002305-2024
Ram Kumar Chauhan Vs. M/s Shriram Transport Finance Co. Ltd.
Crl. Appl. No. 134/2024, CC No. 457/2021, PS Bhajanpura
statement of loan account of the appellant. Such variance in the
debit amount did not appear to be well explained either in
complaint or in affidavit or even in the legal notice as sent by the
respondent/complainant company.
ANALYSIS OF ARGUMENTS, LAW AND FACTS
14. Ld. Amicus Curiae took stand that there was no existing
liability/debt in the sum of Rs.2.75 lacs against the appellant as
on the date of the cheque i.e. 09.02.2021, which could be legally
recoverable. He submitted that the statement of account proved
on the record as Ex.CW-1/7, was a fallacious statement, which
did not reflect the correct situation of existing liability of the
appellant. He submitted that complainant did not place copy of
loan agreement on the record at all, in order to show the amount
of loan, amount of EMI fixed and the rate of penalty interest. He
submitted that a greater part of liability shown against the
appellant is in the form of penalty interest. But complainant did
not show as to on what basis and on what rate such penalty
interest was imposed upon the appellant. On such grounds, he
submitted that appellant is entitled for acquittal in this case.
15. Thus, the limited issue involved in this appeal, revolves around
existing legally recoverable debt against the appellant on the date
of cheque in question. In order to look into this issue, I would
first refer to the relevant observations made by the Magistrate in
the impugned judgment, which are as follows: –
“25. Perusal of the record shows that the case is a classic
example of the admitted one where during the notice framing
accused has admitted that cheque in question bears his signature
and address on legal demand notice is of his and but denied the
(Pulastya Pramachala)
Page 9 of 22 ASJ-03, North-East District,
Karkardooma Courts, Delhi
CNR No. DLNE01-002305-2024
Ram Kumar Chauhan Vs. M/s Shriram Transport Finance Co. Ltd.
Crl. Appl. No. 134/2024, CC No. 457/2021, PS Bhajanpuralegal liability against the complainant. Document exhibit CW1/7
is also going against the accused. The abovesaid document
shows that the said loan was taken by the accused and accused
has not cleared the loan account and cheque amount is less than
outstanding balance as shown on 04.02.2021 and 20.03.2021 i.e.
date near the cheque in question.
26. It is also found that accused himself as DW1 admitted
that he has defaulted the EMIs and complainant had not done his
insurance on the ground of default EMI. Therefore, this also
corroborates with case of the complainant that the accused had
failed to pay the loan. As the accused himself has stated that he
had taken vehicle loan for 48 installments of Rs.9396/- each but
he did not inform that how many installments were paid and
what was the last installment paid by him. Accused himself has
admitted that as per calculation total amount to be paid till 2019
was Rs. 4,41,612/-. Therefore, the accused could not depose the
reason that why he was compelling and was adamant on
depositing Rs.1 lac only towards the complainant and how he
reached to the conclusion that only Rs. 55,000/- was pending.
27. Perusal of record shows that there are contradictions
also in the defence of the accused as while framing of notice he
deposed that he has repaid Rs. 2,20,000/- and only Rs. 55,000/-
is left and while in statement of accused no such statement was
made and while as defence witness he deposed that he has paid
around 2,20,000/- and till 2018, complainant has demanded Rs.
2-2.5lacs from him. Same is corroborated with the account
statement Ex. CW1/7 where more than Rs. 3.5 lacs were pending
against the accused to be paid till 2018. ……..”
16. The above-mentioned observations made by the trial court shows
that the trial court proceeded on the basis that accused/appellant
herein did not prove the repayment of loan as per plea taken by
him during the trial. However, it appears that the trial court did
not look into the statement of account i.e. Ex. CW-1/7 properly,
because even this statement shows the date and amount of
(Pulastya Pramachala)
Page 10 of 22 ASJ-03, North-East District,
Karkardooma Courts, Delhi
CNR No. DLNE01-002305-2024
Ram Kumar Chauhan Vs. M/s Shriram Transport Finance Co. Ltd.
Crl. Appl. No. 134/2024, CC No. 457/2021, PS Bhajanpura
payments received by complainant from the appellant, against the
loan taken in question. Therefore, at least the amounts already
mentioned in this statement, which was filed on behalf of
complainant itself, did not require to be proved by the appellant.
17. Moreover, ld. Magistrate presumed correctness of this statement
of account and thus, presumed existence of liability against the
appellant towards cheque in question. The impugned judgment
refers to only one argument of the defence to the effect that
appellant was falsely implicated in this case. It might be possible
that a pin pointed argument in respect of correctness of afore-said
statement of account, was not made before trial court. However,
that did not absolve the trial court from its duty to look into all
the materials placed on the record minutely, in order to ensure
that cheque amount appeared to be against an existing liability
against the accused. It is well settled legal principle that the
statutory presumptions under Section 118 and 139 of the Act, can
be rebutted even on the basis of materials placed by the
complainant and the surrounding circumstances.
18. Supreme Court in the case of Kumar Exports v. Sharma Carpets,
(2009) 2 Supreme Court Cases 513, explained the legal
principles related to burden cast upon both the parties in the
following manner: –
“18. Applying the definition of the word ‘proved’ in Section 3 of
the Evidence Act to the provisions of Sections 118 and 139 of the
Act, it becomes evident that in a trial under Section 138 of the Act
a presumption will have to be made that every negotiable
instruments was made or drawn for consideration and that it was
executed for discharge of debt or liability once the execution of(Pulastya Pramachala)
Page 11 of 22 ASJ-03, North-East District,
Karkardooma Courts, Delhi
CNR No. DLNE01-002305-2024
Ram Kumar Chauhan Vs. M/s Shriram Transport Finance Co. Ltd.
Crl. Appl. No. 134/2024, CC No. 457/2021, PS Bhajanpuranegotiable instrument is either proved or admitted. As soon as the
complainant discharges the burden to prove that the instrument,
say a note, was executed by the accused, the rules of presumptions
under Sections 118 and 139 of the Act help him shift the burden on
the accused. The presumptions will live, exist and survive and
shall end only when the contrary is proved by the accused, that is,
the cheque was not issued for consideration and in discharge of
any debt or liability. A presumption is not in itself evidence, but
only makes a prima facie case for a party for whose benefit it
exists.
19. The use of the phrase “until the contrary is proved” in Section
118 of the Act and use of the words “unless the contrary is proved”
in Section 139 of the Act read with definitions of “may presume”
and ‘shall presume’ as given in Section 4 of the Evidence Act,
makes it at once clear that presumptions to be raised under both
the provisions are rebuttable. When a presumption is rebuttable, it
only points out that the party on whom lies the duty of going
forward with evidence, on the fact presumed and when that party
has produced evidence fairly and reasonably tending to show that
the real fact is not as presumed, the purpose of the presumption is
over.
20. The accused in a trial under Section 138 of the Act has two
options. He can either show that consideration and debt did not
exist or that under the particular circumstances of the case the non-
existence of consideration and debt is so probable that a prudent
man ought to suppose that no consideration and debt existed. To
rebut the statutory presumptions an accused is not expected to
prove his defence beyond reasonable doubt as is expected of the
complainant in a criminal trial. The accused may adduce direct
evidence to prove that the note in question was not supported by
consideration and that there was no debt or liability to be
discharged by him. However, the court need not insist in every
case that the accused should disprove the nonexistence of
consideration and debt by leading direct evidence because the
existence of negative evidence is neither possible nor
contemplated. At the same time, it is clear that bare denial of the
passing of the consideration and existence of debt, apparently(Pulastya Pramachala)
Page 12 of 22 ASJ-03, North-East District,
Karkardooma Courts, Delhi
CNR No. DLNE01-002305-2024
Ram Kumar Chauhan Vs. M/s Shriram Transport Finance Co. Ltd.
Crl. Appl. No. 134/2024, CC No. 457/2021, PS Bhajanpurawould not serve the purpose of the accused. Something which is
probable has to be brought on record for getting the burden of
proof shifted to the complainant. To disprove the presumptions,
the accused should bring on record such facts and circumstances,
upon consideration of which, the court may either believe that the
consideration and debt did not exist or their non-existence was so
probable that a prudent man would under the circumstances of the
case, act upon the plea that they did not exist. Apart from adducing
direct evidence to prove that the note in question was not
supported by consideration or that he had not incurred any debt or
liability, the accused may also rely upon circumstantial evidence
and if the circumstances so relied upon are compelling, the burden
may likewise shift again on to the complainant. The accused may
also rely upon presumptions of fact, for instance, those mentioned
in Section 114 of the Evidence Act to rebut the presumptions
arising under Sections 118 and 139 of the Act.”
19. In the case of Kumar Exports (supra), Supreme Court observed
that on the parameters of preponderance of probability, the
defence should be established and mere bare denial is not
sufficient. This position was reiterated by High Court of Delhi in
the case of Jai Prakash Singh v. Rashmi Aggarwal,
Crl.R.P.749/2010 decided on 11.07.2013. In this case, High Court
of Delhi observed that: –
“The accused cannot succeed in rebutting the statutory
presumptions as envisaged under Section 118 r/w Section 139 of
Negotiable Instruments Act by mere denials or by raising a weak
defence or even by raising a strong defence, but not proving the
same through any reliable or cogent evidence.”
20. Delhi High Court also dealt with the concept of the cheques
being given allegedly as security and the liability arising under
Section 138 NI Act, in the case of Suresh Chandra Goyal v. Amit
Singhal, Crl. L.P. 706/2014 decided on 14.05.2015. The court
(Pulastya Pramachala)
Page 13 of 22 ASJ-03, North-East District,
Karkardooma Courts, Delhi
CNR No. DLNE01-002305-2024
Ram Kumar Chauhan Vs. M/s Shriram Transport Finance Co. Ltd.
Crl. Appl. No. 134/2024, CC No. 457/2021, PS Bhajanpura
made following observations: –
“There is no magic in the word “security cheque”, such that, the
moment the accused claims that the dishonoured cheque (in
respect whereof a complaint under Section 138 of the Act is
preferred) was given as a “security cheque”, the Magistrate would
acquit the accused. The expression “security cheque” is not a
statutorily defined expression in the NI Act. The NI Act does not
per se carve out an exception in respect of a ‘security cheque’ to
say that a complaint in respect of such a cheque would not be
maintainable. There can be mirade situations in which the cheque
issued by the accused may be called as security cheque, or may
have been issued by way of a security, i.e. to provide an assurance
or comfort to the drawee, that in case of failure of the primary
consideration on the due date, or on the happening (or not
happening) of a contingency, the security may be enforced. While
in some situations, the dishonor of such a cheque may attract the
penal provisions contained in Section 138 of the Act, in others it
may not.”
21. In Rangappa v. Sri Mohan, 2010 V AD (SC) 565, three judges
bench of Supreme Court held that “Keeping this in view, it is a
settled position that when an accused has to rebut the presumption
under Section 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 doubt about the existence of a
legally enforceable debt or liability the prosecution can fail. The
accused can rely on the material submitted by the complainant 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.”
22. It is matter of record that at the time of framing of notice under
Section 251 Cr.P.C., appellant admitted that cheque bore his
signature and that he had taken loan from the complainant
company in the sum of Rs.2,75,000/-. But at the same time, he
(Pulastya Pramachala)
Page 14 of 22 ASJ-03, North-East District,
Karkardooma Courts, Delhi
CNR No. DLNE01-002305-2024
Ram Kumar Chauhan Vs. M/s Shriram Transport Finance Co. Ltd.
Crl. Appl. No. 134/2024, CC No. 457/2021, PS Bhajanpura
also took plea that other particulars were not filled by him on the
cheque and that it was a blank signed cheque. Appellant admitted
his address mentioned in legal notice to be correct and about
receiving the legal demand notice.
23. In his plea of defence at the stage of notice u/s. 251 Cr.P.C.,
appellant further pleaded that he had also repaid the amount of
Rs.2,20,000/- approximately for the loan of car make Innova.
According to him only Rs. 55,000/- was left to be paid for the
loan of Innova car.
24. AR of the complainant company in his complaint and affidavit
pleaded that accused was sanctioned and disbursed the amount in
terms of agreement/contract no. MAYUVO502280003. It was
further pleaded that accused in order to discharge the debt
liability towards the complainant company, issued cheque
bearing no. 897633 dated 09.02.2021 for an amount of
Rs.2,75,000/- in favour of the complainant company, towards an
amount which was due towards the complainant company, with
the assurance that the same would be duly honoured.
25. I have referred to afore-said part of pleading from the complaint
and affidavit, because it is relevant to look into the fact that
whether the cheque in question was actually issued on
09.02.2021 by the appellant for the given sum of amount, or was
it filled in by someone else in the complainant company. I have
already referred to the legal principle dealing with the security
cheque. Ld. Magistrate also referred to the law under Section 20
of the Act, thereby giving an authority to the holder of the cheque
(Pulastya Pramachala)
Page 15 of 22 ASJ-03, North-East District,
Karkardooma Courts, Delhi
CNR No. DLNE01-002305-2024
Ram Kumar Chauhan Vs. M/s Shriram Transport Finance Co. Ltd.
Crl. Appl. No. 134/2024, CC No. 457/2021, PS Bhajanpura
to fill-up the particulars in it. There is no dispute to the legal
propositions that even a cheque given towards security can be
covered under Section 138 of the Act and that a blank signed
cheque can be validly filled-up by the holder of the cheque.
However, law does not say that the holder of the cheque can fill-
up any amount of his choice, to make the drawer of the cheque
liable for the same. The authority given by virtue of Section 20 of
the Act also, would be limited to the exiting liability against
drawer of the cheque. Even in respect of cheque given towards
security, existence of the liability in the sum of amount
mentioned over the cheque, is necessary. Therefore, the existence
of legally recoverable debt against the appellant on the date of
09.02.2021 in the sum of Rs.2.75 lacs, was the basic requirement
in the present case for the complainant, to seek criminal action
against appellant under the Act.
26. In Pine Product Industries v. M/s. R.P. Gupta & Sons, 2007 I AD
(Delhi) 433, Delhi High Court held that “presumption of liability
has been rebutted by the accused so he is liable to be acquitted, when
accused pleaded that his cheque was misused and he had no liability
to pay any amount, then keeping in view the fact that complainant had
given no details what were the liabilities of the accused, what was the
amount for which cheque was issued as a part payment, on which date
and what amount was given to the accused at what rate, what was the
extent of the goods which were adjusted against some payments.”
27. In Mr. Kishore Shankar Singapurkar v. State of Maharashtra
2004 (1) DCR 302, Bombay High Court held that “the
complainant should have narrated the entire history of the transaction
(Pulastya Pramachala)
Page 16 of 22 ASJ-03, North-East District,
Karkardooma Courts, Delhi
CNR No. DLNE01-002305-2024
Ram Kumar Chauhan Vs. M/s Shriram Transport Finance Co. Ltd.
Crl. Appl. No. 134/2024, CC No. 457/2021, PS Bhajanpura
and off shoots of the transaction resulting in the litigation between the
parties. It is the bounden duty of every complainant to narrate full
details of the transaction including the past history and the litigation
arising out of it, whenever he files a complaint in a criminal court. If
he does not do that the court is very must likely to be misled.”
28. The purpose of reproducing part of the relevant plea taken in the
complaint and affidavit of AR of the complainant, regarding the
manner in which the cheque in question was said to be issued,
becomes relevant and meaningful, because complainant has not
taken the plea that the cheque in question was a blank signed
cheque given by the appellant towards security against loan in
question. Complainant has also not taken the plea that it was
filled up by some official of company as per existing debt against
the appellant. However, appellant while deposing as DW1,
deposed that he had given six blank signed cheques to the
complainant as security at the time of taking loan, out of which
present cheque was misused by the complainant company. He
also deposed that cheque bore his signature, but amount was not
filled by him. Ld. counsel for the complainant company and AR
of the complainant company, though cross-examined appellant,
but they did not dispute these facts.
29. From the plea taken by complainant during cross-examination of
appellant, the facts which remained undisputed were that
appellant had to pay 48 installments of Rs.9,396/- each; that in
case of default of installment he had to pay the penalty; that
insurance of his vehicle (Innova) was done by complainant twice;
(Pulastya Pramachala)
Page 17 of 22 ASJ-03, North-East District,
Karkardooma Courts, Delhi
CNR No. DLNE01-002305-2024
Ram Kumar Chauhan Vs. M/s Shriram Transport Finance Co. Ltd.
Crl. Appl. No. 134/2024, CC No. 457/2021, PS Bhajanpura
that appellant paid insurance amount of Rs.16,295/- for afore-
said vehicle in 2015 and Rs.14,005/- in the year 2016, in the
installments; that appellant had paid Rs.2,20,000/- including
insurance premium installments. However, appellant disputed
that insurance premium was included in the loan amount. He also
disputed the total due amount as shown in the statement of
account was Rs.831730/-.
30. Thus, it is well clear to me that in the complaint and the affidavit
of AR of complainant, a wrong picture was depicted to show as if
cheque in question was given by the appellant in the sum of
Rs.2.75 lacs on 09.02.2021 for discharge of his liability towards
complainant. This was apparently a case wherein a blank signed
cheque of appellant was filled-in by the officials of complainant
company. Even in that situation, complainant is not to be ousted
from this litigation. It is to be still seen that whether amount of
Rs.2.75 lacs was legally existing as due against the appellant.
The observations made by Hon’ble Delhi High Court in the case
of M/s. Pine Product (supra) and Hon’ble Bombay High Court in
the case of Kishore Shankar (supra), leave no doubt that it was
duty of the complainant to show existence of a legally
recoverable debt in the sum of Rs.2.75 lacs as on 09.02.2021.
31. If I look into the statement of account Ex. CW-1/7, I find that it
mentions three loans, one towards vehicle and two other loans
towards insurance (as per undisputed fact about sum of insurance
taken for the years 2015 and 2016). Thus, this statement is a
composite statement for three loan accounts, which in itself is not
(Pulastya Pramachala)
Page 18 of 22 ASJ-03, North-East District,
Karkardooma Courts, Delhi
CNR No. DLNE01-002305-2024
Ram Kumar Chauhan Vs. M/s Shriram Transport Finance Co. Ltd.
Crl. Appl. No. 134/2024, CC No. 457/2021, PS Bhajanpura
a valid practice. I say so because liability existing in one loan
account cannot be suo moto transferred to another loan account
of the concerned person. This distinction is important because
aforesaid statement of account also shows imposition of delayed
payment interest as regular entry just after five (5) months of
disbursal of the loan towards the vehicle. The final break-up of
due amount as on 14.02.2021, is shown as Rs.4,76,399/- towards
due installments, Rs.300/- towards due Exp. (unexplained by AR
during appeal proceedings) and Rs.5,70,376.84 towards delayed
payment interest. An amount of Rs.2,17,270/- is mentioned to be
paid by the appellant and a balance due amount of
Rs.8,29,805.84 is shown against the appellant.
32. On minute analysis of this statement of account, I could find that
there had been jugglery in the entries so as to create arrears.
Admittedly the installment amount was Rs.9396/-, but for the
month of August, 2015, the due installment amount was shown to
be Rs.10396/- and despite payment of EMI of Rs.9396/- for this
month, an arrear in the sum of Rs.981/- was created in the
account. Similar practice was adopted for the month of
September 2015, so as to make the arrear amount at the end of
September, as Rs.1981. Then delayed payment interest (DPI) was
added in the sum of Rs.59.44 on the arrear amount of Rs.1981/-.
Thereafter, for the months of August and November, 2015 the
installment amount was shown as Rs.8396/- each. Thus, the
interesting part of it is that with additional amount of Rs.1000/-
being added in the due installment for the months of August and
(Pulastya Pramachala)
Page 19 of 22 ASJ-03, North-East District,
Karkardooma Courts, Delhi
CNR No. DLNE01-002305-2024
Ram Kumar Chauhan Vs. M/s Shriram Transport Finance Co. Ltd.
Crl. Appl. No. 134/2024, CC No. 457/2021, PS Bhajanpura
September, 2015, arrear was created in the account so as to levy
delayed penalty interest and thereafter, those additional amounts
were adjusted by reducing the installment amount for the months
of October and November, 2015. Thus, one silent virus of arrear
was introduced into the account, which kept on increasing with
addition of DPI every month. Further delayed payment interest
were being calculated on afore-said created arrears and so on. It
was classic example to create an entry of due amount in the
accounts which gradually kept increasing, thereby adding to the
arrears against the appellant. Needless to say, that this was
altogether a frivolous practice on the part of the complainant
company.
33. Further part of this statement shows addition of due amount
against other two loan accounts. Arrears were thus, being
aggressively increased with addition of delayed payment interest
(DPI) on the cumulative due amount. Furthermore, this DPI was
also being calculated on previous arrears of DPI. Ld. Amicus
Curiae furnished the circulars and rules framed by RBI in respect
of fair lending practice. In those guidelines and rules, RBI came
up with specific prohibition against imposition of any additional
component to the rate of interest and against capitalization of
penal charges. Even otherwise, it is beyond legality to impose
penal interest over interest in cumulative manner. The statement
of account herein shows that how imposition of cumulative
interest over penalty charges/interest was used to make a parallel
due amount in the form of arrears against the appellant. The loan
(Pulastya Pramachala)
Page 20 of 22 ASJ-03, North-East District,
Karkardooma Courts, Delhi
CNR No. DLNE01-002305-2024
Ram Kumar Chauhan Vs. M/s Shriram Transport Finance Co. Ltd.
Crl. Appl. No. 134/2024, CC No. 457/2021, PS Bhajanpura
account against vehicle was to be matured on 05.02.2019.
Appellant admittedly paid Rs.2,17,270/- and the last payment is
shown to be received on 06.04.2017. By that time already arrears
in the sum of Rs.63982/- were shown in the accounts, with
addition of liability towards payments of insurance premiums
and DPIs. In absence of relevant agreement on the record, one
cannot be sure about terms and condition of repayment of
insurance premiums. It is worth to remind here that complaint
mentioned only about loan for vehicle rather than three loans as
mentioned in the statement of account. Since the whole process
of calculation of these arrears, was illegal and fallacious,
therefore, this statement of account cannot be accepted as
evidence of existing legally due amount against the appellant on
09.02.2021 and arrears shown in Ex.CW1/7 cannot be accepted
as mentioning correct figure of legally due recoverable amount
from the appellant towards loan taken for vehicle. Since it was
duty of the complainant to prove quantum of existing legally
recoverable debt against appellant as on 09.02.2021, the
complainant company cannot take advantage of its omission and
take recourse to statutory presumptions against the appellant. In
my opinion, the cumulative effect of false pleading in the
complaint and affidavit, and illegally prepared statement of
account, is sufficient to rebut the statutory presumptions of
existence of legally recoverable debt against the appellant.
CONCLUSION & FINDINGS
34. In view of my foregoing observations, discussions and findings, I
find that the trial court could not appreciate the evidence on the
(Pulastya Pramachala)
Page 21 of 22 ASJ-03, North-East District,
Karkardooma Courts, Delhi
CNR No. DLNE01-002305-2024
Ram Kumar Chauhan Vs. M/s Shriram Transport Finance Co. Ltd.
Crl. Appl. No. 134/2024, CC No. 457/2021, PS Bhajanpura
record in right perspective to realise that complainant had failed
to present a case of legally recoverable debt against appellant on
the date of 09.02.2021 for the sum of cheque amount. It is not the
law that existence of any sum of amount as due against appellant,
could justify presentation of cheque in the sum of Rs.2.75 lacs.
Hence, the impugned judgment of conviction dated 01.06.2024
and order on sentence dated 11.07.2024 are set aside. Appeal is
allowed and appellant is acquitted of the charges levelled against
him in this case.
35. I must acknowledge the important role played by Sh. Praveen
Yadav, ld. Amicus Curiae, in the decision of this appeal. Ld.
Amicus Curiae made in depth research into RBI guidelines and
minutely anaysed the statement of account, to point out the
illegalities committed by complainant company in imposition of
penalty interest. I express gratitude for the assistance rendered by
Sh. Praveen Yadav, in this appeal.
36. Copy of this judgment be sent to trial court and trial court is
directed to stop the coercive proceedings against the appellant
and also to send information of decision taken in this appeal to
the appellant.
File of appeal be consigned to record room, as per rules.
Digitally signed
by PULASTYA
PULASTYA PRAMACHALA
PRAMACHALA Date: 2025.01.29
11:53:33 +0530
Announced in the open court (PULASTYA PRAMACHALA)
today on 29.01.2025 ASJ-03 (North- East)
(Judgment contains 22 pages) Karkardooma Courts/Delhi
(Pulastya Pramachala)
Page 22 of 22 ASJ-03, North-East District,
Karkardooma Courts, Delhi
[ad_1]
Source link