IN THE COURT OF SH. [ENTITY]: METROPOLITAN MEGISTRATE (NI ACT)-1, CENTRAL: ROOM NO.-42, TIS HAZARI COURT COMPLEX, DELHI [CASE NUMBER] Saurav Gupta Vs [ENTITY] 28.03.2011 JUDGMENT u/[SECTION] [ACT] Complainant's case: The complainant is running a business of hosiery and having business relations with accused. In the month of January & February 2009, the goods were delivered and received by accused were worth of Rs.4,03,254/- against bill No.011, 015 & 19 and issued three cheques of Rs.149,554/-, Rs.138,245/- & Rs.1,15,455/- bearing No.231305, 231506 & 959511; dated 24.03.2009, 25.02.2009 & 26.03.2009, both drawn on ING Vysya Bank Ltd. The copies of bills are Ex. CW1/1 to Ex. CW1/3 respectively. The cheque of Rs.1,49,554/- bearing No.231505 dated 24.03.2009 was got dishonoured on presentation on account of "insufficient funds" and returned vide memo dated 25.03.2009. The said cheque is Ex. CW1/4, the pay in slip is Ex. CW1/4A and memo is Ex. CW1/5. The second cheque was also got dishonoured on the same ground and returned vide memo dated 26.03.2009. The second cheque dated 26.03.2009 is Ex. CW1/6, the pay in slip is also Ex. CW1/6A and memo dated 26.03.2009 is Ex. CW1/7. The bank Statement is Ex. CW1/8 (colly.). Thereafter, the complainant sent a legal demand notice demanding Rs.4,03,254/- dated 20.04.2009 is Ex. CW1/9, postal receipt No.6104 & 6105 dated 21.04.2009 for registered AD post is Ex. CW1/10 (colly.), courier dated 21.04.2009 is Ex. CW1/11 (colly.) & UPC dated 22.04.2009 is Ex. CW1/12. Despite the legal demand notice, accused had failed to make the payment of Rs.4,03,254/0. Hence the present complaint. Accused stand: 2. Accusation was explained over to accused, plea and examination of accused was recorded. From the statement of the accused, it appears that she do not know the complainant. Cheque Ex. CW1/6 is drawn on her bank account and bear her signatures, however, other columns were not filled in by the accused. Accused has never handed over the cheque to the complainant. Accused has never received any legal demand notice from the complainant. Addresses appearing on the legal notice Ex. CW1/9, Ex. CW1/10 & Ex. CW1/12 were not of the accused. Even summons was served upon the accused in the court of Sh. [ENTITY], Ld. MM, KKD, Delhi. Accused do not know anything about the bank statement Ex. CW1/A. Cheque returning memo is not disputed. [ENTITY] is admitted. Bills Ex. CW1/1 to Ex. CW1/3 are not of the accused. Saurav Gupta VS [ENTITY] [CASE NUMBER] 1 2.1 Accused has further contended that she was falsely implicated in the present complaint case as she did not know the complainant and there was no question of issuing the cheques in question regarding the payment of goods received as alleged by the complainant in his affidavit. Discussion on Legal provisions: 3.1 [SECTION] of [ACT] reads as under: "118. Presumptions as to negotiable instruments.- Until the contrary is proved, the following presumptions shall be made: (a) of consideration: that every negotiable instrument was made or drawn for consideration, and that every such instrument when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration;" Presumptions are: i. Cheque was drawn for consideration; ii. Cheque was transferred for consideration; iii. Cheque was accepted for consideration. 3.2. [SECTION] of [ACT] reads as under: "[SECTION]. Presumption in favour of holder.- 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] for the discharge, in whole or in part, of any debt, or other liability." Presumptions are: i. Holder of the cheque has lawfully received the cheque, meaning thereby that the holder was in lawful possession of the cheque; ii. The cheque was given in discharge of any debt or liability; iii. Legally enforceable debt or liability was in existence at the time of issuance of the cheque; Saurav Gupta VS [ENTITY] [CASE NUMBER] 2 (contrary view has been overruled by the three judges bench of Hon'ble Supreme Court in [PRECEDENT] decided on 07.05.2010 with the observation: "14. In light of these extracts, we are in agreement with the respondent-claimant that the presumption mandated by [SECTION] of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in [PRECEDENT] (supra) may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein.") iv. The cheque was of the nature as described in [SECTION]; v. The cheque was drawn by the person who was maintaining the account pertaining to the cheque; vi. Amount of money mentioned in the cheque was intended to be given; 3.3. [SECTION] of [ACT] reads as under: "[SECTION]. Bank's slip prima facie evidence of certain facts.- The court shall, in respect of every proceeding under this Chapter, on production of bank's slip or memo having thereon the official mark denoting that the cheque has been dishonoured, presume the fact of dishonour of such cheque, unless and until such fact is disproved." Presumptions are: i. The cheque has been dishonoured; ii. The cheque has been so dishonoured for the reason mentioned in the memo. 3.4. [SECTION], [ACT] reads as under: "27. Meaning of service by post - Saurav Gupta VS [ENTITY] [CASE NUMBER] 3 Where any (Central Act) or Regulation made after the commencement of this Act authorizes of requires any document to be served by post, where the expression "serve" or either of the expressions "give" or "send" or any other expression in used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing pre-paying and posting by registered post, a letter containing the document, and unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post." Presumptions are: i. Letter has been served upon the accused; ii. The same is served within the normal reasonable time; iii. The content of the letter was within the knowledge of the accused. (see a three judges bench decision of Hon'ble Supreme Court if India in [PRECEDENT]). 4. I am satisfied that defence taken by the accused as to non receipt of legal demand notice can not succeed. Legal notice was sent by the complainant at two addresses of the accused. a) Netaji Marg, MCD Primary School, Gali No.-1, Near Bus Stand, Karawal Nagar, Delhi-92 b) K-3, Kanahiya Nagar, Johripur, Delhi-92. Contention of the accused is that the first address is not her and the actual second address is: "K-3, Gali No.-1, Kanhaiya Vihar, Johripur, Delhi-94". She further raised a claim that even summons was served upon her in some other Court. Interestingly, accused has only disputed the correctness of the addresses but has not brought on record anything establishing such disputes (the only place where she mentioned her address is in her bail bond that too without any supporting documents). We have to see whether her stand is justified or not. A returned summons(at second address) issued for 24.03.2010 is on record. The same is showing the report: Saurav Gupta VS [ENTITY] [CASE NUMBER] 4 " mauke per ek vyakti maujud mile tatha summon padh kar jubani keha ki [ENTITY] " A returned postal envelope (in respect of summons sent at the second address) is also on record. The same is showing a report: "I.D." (It means Intimation Delivered). A returned summons(at first and second address) issued for 05.07.2010 is on record. The same is showing the report: For first address: " logo ne bataya ki [ENTITY] Plastic Firm yaha band kar kafi samay pehle ja chuke hain " For second address (report dated 11.06.2010): " toh mahila ne summon ko dekh kar va padh kar ghar me chali gayi va bahar na aayi. Baad thodi der ke ek bujurg mahila ghar se bahar aayi. Bujurg mahila ne apna naam smt. [ENTITY] va khud ko Mrs. [ENTITY] ki saas bataya va jubani bayan kiya ki meri bahu ghar par nahi hai. Veh bahar gayi hai. Veh wapas kab aayegi kuch nishchit nahi hai " For second address (report dated 02.07.2010): " Bujurg mahila ne apna naam smt. [ENTITY] va khud ko Mrs. [ENTITY] ki saas bataya. Baad mahila ne jubani bayan kiya ki meri bahu Delhi se bahar gayi hai. Uske wapas aane ka koi nishchit nahi hai " In view of these reports, I am unable to agree with the ld. Counsel for the accused that address appearing on the legal notice is of the accused. There is sufficient material on the record to draw the presumption under [SECTION] [ACT] and the same has to go in the favour of the complainant. In this respect it will be apt to quote Hon'ble Supreme Court in [PRECEDENT]: "17. It is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of [ACT], 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] 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 within 15 days of receipt of the summons from the Court along with the copy of the complaint under [SECTION] of the Act, cannot obviously contend that Saurav Gupta VS [ENTITY] [CASE NUMBER] 5 there was no proper service of notice as required under [SECTION], by ignoring statutory presumption to the contrary under [SECTION] of the [ACT] and [SECTION] of the [ACT]. In our view, any other interpretation of the proviso would defeat the very object of the legislation. As observed in [ENTITY] case (supra), if the giving of notice in the context of Clause (b) of the proviso was the same as the receipt of notice a trickster cheque drawer would get the premium to avoid receiving the notice by adopting different strategies and escape from legal consequences of [SECTION] of the Act." 5. Now the question remains to be answered is whether accused has successfully rebutted the mandatory presumptions of law in respect of consideration and existence of liability arising in favour of the complainant under [SECTION] & [SECTION] [ACT] (as discussed in Para-3 above)? 6. Without any doubt, in a criminal case, the prosecution has to stand on its own lags. No blemishes in the story of the accused will give a right to the complainant to claim that he has establish his case. Even accused is not required to step into the witness box to rebut the case of the complainant. Accused can always rely upon the material and circumstances brought on record by the complainant. However, there must be something more than a bare denial. 6.1. In the present case, unfortunately, accused has failed to lead any defence evidence despited opportunity and has only denied the liability. 6.2. It is a settled law that a mere denial of passing off consideration is not sufficient. In [PRECEDENT] it has been held that: "Upon consideration of various judgments as noted hereinabove, the position of law which emerges is that once execution of the promissory note is admitted, the presumption under [SECTION] would arise that it is supported by a consideration. Such a presumption is rebuttable. The defendant can prove the non-existence of a consideration by raising a probable defence. If the defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbably or doubtful or the same was illegal, the onus would shift to the plaintiff who will be obliged to prove it as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument. The burden upon the defendant of proving the non-existence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies. In such an event, the plaintiff is entitled under law to rely upon all the evidence led in the case including that of the plaintiff as well. In case, where the defendant fails to discharge the initial onus of proof by showing the non-existence of the consideration, the plaintiff would invariably be held entitled to the benefit of presumption arising under [SECTION] in his favour. The court may not insist upon the defendant to disprove the existence of consideration by leading Saurav Gupta VS [ENTITY] [CASE NUMBER] 6 direct evidence as the existence of negative evidence is neither possible nor contemplated and even if led, is to be seen with a doubt. The bare denial of the passing of the consideration apparently does not appear to be any defence. Something which is probable has to be brought on record for getting the benefit of shifting the onus of proving to the plaintiff. To disprove the presumption, the defendant has to bring on record such facts and circumstances upon consideration of which the court may either believe that the consideration did not exist or its non-existence was so probable that a prudent man would, under the circumstances of the case, act upon the plea that it did not exist." 6.3. In the present case, no such circumstances have been brought on record which suggest the inference that consideration did not exist or its non-existence was so probable that a prudent man would, under the circumstances of the case, act upon the plea that it did not exist. 6.4. Further, a mere explanation given by the accused is also not sufficient. In case titled [PRECEDENT] decided on 21.09.2010, Hon'ble High Court of Delhi has observed that: "3. The appellant had taken a stand that no reply to the notice of legal demand was sent by the respondent, instead, envelopes with blank sheets in it were sent by the respondent. In her examination under [SECTION] [ACT] she did not deny issuance of cheques, but, took a defence that cheque were issued as security for seeking loan but no loan was advanced and the cheques were therefore without consideration. The learned MM observed that conviction under [SECTION] of [ACT] cannot be made acting on evidence of complainant and considering the presumption under [SECTION] of [ACT]. The complainant has to prove beyond reasonable doubt the debt or liability of the accused. Learned MM observed that complainant had not specified the date of giving loan and a reasonable man would remember the date of giving substantial sum of money as loan to other and this blissful forgetness of the date by the complainant raised doubt about the liability of the accused, more so, in view of the stand taken by the accused that the cheques were issued as security and the same were never returned.
5. It must be borne in mind that the statement of accused under [SECTION] [ACT] or under [SECTION] [ACT] is not the evidence of the accused and it cannot be read as part of evidence. The accused has an option to examine himself as a witness. Where the accused does not examine himself as a witness, his statement under [SECTION] [ACT] or 313 [ACT] cannot be read as evidence of the accused and it has to be looked into only as an explanation of the incriminating circumstance and not as evidence. There is no presumption of law that explanation given by the accused was truthful. In the present case, the accused in his statement stated that he had given cheques as security. If the accused wanted to prove this, he was supposed to appear in the witness box and testify and get himself subjected to cross examination. His explanation that he had the cheques as security for taking loan from the complainant but no loan was given should not have been considered by the Trial Court as his evidence and this was liable to be rejected since the accused did not appear in the witness box to dispel the presumption that the cheques were issued as security. Mere suggestion to the witness that cheques were issued as security or mere explanation given in the statement of accused under [SECTION] [ACT], that the cheques were issued as security, does not amount to proof. Moreover, the Trial Court seemed to be obsessed with idea of proof beyond reasonable doubt forgetting that offence under [SECTION] of [ACT] was a technical offence and the complainant is only supposed to prove that the cheques issued by the respondent were dishonoured, 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.
7 The Trial Court in this case turned a blind eye to the fact that every accused facing trial, whether under [SECTION] of [ACT] or under any penal law, when charged with the offence, pleads not guilty and takes a stand that he has not committed the offence. Even in the cases where loan is taken from a bank and the cheques issued to the bank stand dishonoured, the stand taken is same. Mere pleading not guilty and stating that the cheques were issued as security, would not give amount to rebutting the presumption raised under [SECTION] of [ACT]. If mere statement under [SECTION] [ACT] or under [SECTION] [ACT] of accused of pleading not guilty was sufficient to rebut the entire evidence produced by the complainant/ prosecution, then every accused has to be acquitted. But, it is not the law. In order to rebut the presumption under [SECTION] of [ACT], the accused, by cogent evidence, has to prove the circumstance under which 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 cheque. 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/[SECTION] [ACT]. If no loan was given, but cheques were retained, he immediately would have protested and asked the cheques to be returned and if still cheques were not returned, he would have served a notice as complainant. Nothing was proved in this case."
7. Once signature on cheque is admitted, it becomes immaterial whether other things in the cheque were filled in by the drawer or someone else. (see [SECTION] [ACT].)
8. In the written arguments, accused has claimed that cheques were misplaced from the possession of the accused and a report was made to the police.
There is nothing on record to support the above stand of the accused.
8.1. Next contention raised in the final arguments is that complainant has not produced any evidence to prove the receiving of the cheque.
I am of the considered view that this can also not help the accused. In the light of mandatory presumptions of law arising in favour of the complainant under [SECTION] [ACT] (as discussed in Para-3 above), it was for the accused to rebut the presumption and not for the complainant to prove the same.
Finding:
9. Complainant has established his case by way of affidavit supported by documentary proof as exhibited and discussed in Para-1 above. The mandatory presumptions of law arising under [SECTION], [SECTION], [SECTION] [ACT] and [SECTION] [ACT] are in favour of the complainant.
10. From the above discussion, I am of the considered opinion that accused has failed to rebut any of the mandatory presumptions of law arising in favour of the complainant.
11. I accordingly return a finding of guilt against the accused.
12. The accused [ENTITY] is hereby convicted for the offence as punishable under [SECTION] [ACT].
13. Let the convict be heard on the point of sentence.
14. A copy of this order be placed on the official website of the District Court.
([ENTITY]) MM ([ACT])-01, Central District, Delhi 28.03.2011 IN THE COURT OF SH. [ENTITY]:
METROPOLITAN MEGISTRATE (NI ACT)-1, CENTRAL:
ROOM NO.-42, TIS HAZARI COURT COMPLEX, DELHI Saruva Gupta VS [ENTITY] 28.03.2011 Present: Both the parties.
Vide separate order, accused [ENTITY] has been convicted for the offence punishable under [SECTION] [ACT].
Let parties be heard on the point of sentence.
At request of the parties, let the matter be listed for 13.04.2011.
([ENTITY]) MM ([ACT])-01, Central District, Delhi 28.03.2011