Satin Credit Care vs. [ENTITY] CC. No. 1257/12 IN THE COURT OF MS. [ENTITY], METROPOLITAN MAGISTRATE-05 (NI ACT), DWARKA COURTS, DELHI CC No. 1257/12 ID No. 02405R0265332011 Satin Credit Care Network Ltd. Having its registered office at 306, Lusa Tower, Azadpur Commercial Complex Delhi-110033 Through its Authorized Representative Sh. [ENTITY], Officer (Legal). [ENTITY] Vs. Sh. [ENTITY] s/o Sh. [ENTITY] M/S Gopal Sweet Corner & Restaurant 25-B, Zamrudpur G. K. Part-1, New Delhi-48. Accused Date of Institution : 14.09.2011 Offence Complained of : u/[SECTION] [ACT] Plea of Accused : Not Guilty Date of Reserving order : 14.05.2013 Date of Decision : 22.05.2013 Decision : Acquitted JUDGMENT
1. [ENTITY], a non-banking financial institution registered with Reserve Bank of India has filed the present complaint through its Authorized Representative Sh. [ENTITY] alleging that accused had approached the complainant and availed a personal loan under Personal Loan agreement bearing no. H-3974 dated 26.08.2008 for a sum of Rs.
Satin Credit Care vs. [ENTITY] CC. No. 1257/12 61,200/-.
2. [ENTITY] states that the repayment schedule of the agreement was on the basis of daily installments of Rs. 170/- for 360 days. [ENTITY] states that after making initial payment towards the daily installments, accused started violating the terms and conditions of the said agreement and stopped making the payments, in contravention to the terms and conditions of the above agreement.
3. [ENTITY] further states that accused avoided clearance of legally recoverable dues despite repeated reminders and requests of the complainant. It is stated that while scrutinizing the account details, it was seen that a sum of Rs. 53,493/- was outstanding against the accused. Accordingly, a notice dated 19.05.2011 was issued against the accused for payment of the outstanding amount.
4. It is further stated that after receiving the aforesaid notice, accused approached the complainant and admitted his liability for a sum of Rs. 53,493/- and accordingly issued a cheque bearing no. 147686 dated 13.07.2011 drawn on State Bank of Hyderabad, New Delhi, Kailash Colony, Branch (588), 36, Jamrudpur Complex, Kailash Colony, New Delhi-48 for a sum of Rs. 53,493/- (hereinafter referred to as "cheque in question") in favour of the complainant towards discharge of legally recoverable debt. It is stated that the accused had always assured the complainant that the cheque in question Satin Credit Care vs. [ENTITY] CC. No. 1257/12 would be honored on presentation.
5. [ENTITY] submits that when the cheque was presented for clearance, the same was returned unpaid vide cheque return memo dated 14.07.2011 due to the reasons "Funds Insufficient". It is stated that a legal notice dated 28.07.2011 was also sent on 28.07.2011 and 30.07.2011 to the accused but despite the service of the notice, accused has failed to make the payment of the outstanding amount.
6. [ENTITY] states that conduct of the accused indicates his fraudulent intention to cheat the complainant and to cause wrongful loss to the complainant. Feeling aggrieved from the conduct of the accused, complainant has filed the present complaint praying that accused be summoned, tried and punished in accordance with [SECTION] of [ACT].
7. Pre-summoning evidence was led by the complainant on 14.09.2011. Prima facie case was made out against the accused and accused was summoned vide order dated 12.10.2011.
8. Accused entered appearance on 10.09.2012 and notice was framed upon him on 24.01.2013 to which the accused pleaded not guilty and claimed trial.
9. On an application filed under [SECTION] [ACT], which was allowed vide order dated Satin Credit Care vs. [ENTITY] CC. No. 1257/12 04.02.2013, accused was granted permission to cross- examine the complainant.
10. In post summoning complainant's evidence, AR of the complainant examined himself as CW1 and adopted his affidavit Ex. CW1/1 tendered at the stage of pre-summoning evidence and relied upon the documents Ex. CW1/A to Ex. CW1/D and Mark-A to Mark-D. CW1 also relied upon the documents Ex. CW1/F and Ex. CW1/G. Ex. CW1/A is the original board resolution, Ex. CW1/B is the cheque in question, Ex. CW1/C is the cheque returning memo, Ex. CW1/D (colly.) is the legal demand notice alongwith postal and courier receipt, Ex. CW1/F (colly.) is the outstanding notice along with postal receipts and Ex. CW1/G is the statement of account. Copy of power of attorney is Mark-A (OSR), copy of certificate of incorporation is Mark-B (OSR), copy of certificate of registeration is Mark-C (OSR) and copy of personal loan agreement is Mark-D.
11. Statement of accused under [SECTION] [ACT] was recorded on 03.04.2013.
12. In Defence evidence, accused examined himself on Oath under [SECTION] [ACT] as DW1. In his examination, DW1 deposed that he took a loan of Rs. 50,000/- from the complainant and during the execution of the loan, he handed over a blank signed cheque and he was also made to sign on certain blank papers. DW1 deposed that the complainant also Satin Credit Care vs. [ENTITY] CC. No. 1257/12 got signed on one letter bearing the name of Satin Credit. DW1 deposed that the cheque in question was issued to the complainant as security cheque and he had paid approximately Rs. 39,000/- to the complainant and he had receipts qua the same which are Ex. DW1/1 (colly.). DW1 deposed that he had never received any notice from the complainant nor had visited the office of the complainant for any settlement nor have issued the cheque in question on 13.07.2011 towards any settlement. DW1 further deposed that the officials of the complainant have stopped visiting him for receiving the payment of installments about 6 years back. DW1 deposed that he only received summons of the Court but he has not received any intimation from the complainant for making any payment. DW1 further deposed that a false complaint has been filed against him and he does not owe any liability towards the complainant.
13. Final arguments were advanced at length by Sh. A. K. Pandey, Ld. Counsel for complainant and Sh. [ENTITY], Ld. Counsel for accused from DLSA. Written submissions were also filed by Ld. Counsel for accused.
14. I have considered the submissions and perused the record carefully.
15. [SECTION], [ACT] has been enacted to lend credibility to the financial transactions. The main ingredients of the offence under [SECTION] Negotiable Satin Credit Care vs. [ENTITY] CC. No. 1257/12 Instruments Act are:
(I) Drawing up of a cheque by the accused towards payment of an amount of money for the discharge in whole or in part of any debt or any other liability (II) Return of the cheque by the bank as unpaid either because of the amount of money standing to the credit of that 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 that bank.
(III)The drawer of the cheque fails to make the payment of the said amount of money within 15 days of the receipt of notice under [SECTION].
16. Apart from this, [SECTION] [ACT] lays down a presumption in favour of the holder of cheque in following terms, "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".
17. Thus, in cheque dishonor cases, what the courts have to consider is whether the ingredients of the offence enumerated in [SECTION] of the Act have been met and if so, whether the accused was able to rebut the statutory presumption contemplated by [SECTION] of the Act.
18. In the present case, the facts admitted between the parties are that accused had taken a loan from the complainant and that the cheque in question bears the signature of the accused. The facts in dispute are the loan amount, service of Satin Credit Care vs. [ENTITY] CC. No. 1257/12 outstanding notice Ex. CW1/F upon the accused and accused approaching the complainant for issuing the cheque in question, liability of the accused to the tune of Rs. 53,493/- on the date of issuance of cheque in question and issuance of cheque in question towards discharge of liability. The facts in dispute stated above are dealt with as under:-
(i) Accused has disputed the amount of loan given by the complainant to him. As per complaint, the loan amount was Rs. 61,200/-. However, as per accused, the loan amount was Rs. 50,000/-. CW1 in his cross-examination recorded on 27.02.2013 has admitted that the loan amount sanctioned to the accused was Rs. 50,000/-, however, CW1 has explained that the amount of Rs. 61,200/- includes interest payable by the accused on the principal amount and thus, the loan amount payable comes to Rs. 61,200/-. Copy of loan agreement Mark-
D placed on record by the complainant also states the loan amount to be Rs. 50,000/- payable with interest @ 22.71% p.a. Thus, it can be concluded that the loan amount sanctioned to the accused was Rs. 50,000/- but the total amount repayable after including the interest was Rs. 61,200/-.
(ii)(a) As per the complainant the cheque in question was issued by the accused towards outstanding dues pursuant to receipt of outstanding notice Ex. CW1/F. Accused on the other hand states that the cheque in question was issued as security cheque at the time of grant of loan in blank and that he had never received outstanding notice Ex. CW1/F. Perusal of Satin Credit Care vs. [ENTITY] CC. No. 1257/12 the record shows that complainant has placed on record notice Ex. CW1/F with postal receipts to show service of notice upon the accused. Though service of notice can be presumed upon the accused under [SECTION] of [ACT] but it cannot be presumed that pursuant to receipt of notice accused approached the complainant and issued the cheque in its favour. Accused had been vehemently alleging that he had never visited the office of the complainant. Under such circumstances, the burden was upon the complainant to establish that the cheque was issued by the accused as alleged by it. However, the complainant has not brought on record any document such as Visitors Entry Register or any other document to show that accused actually approached it and issued the cheque in question on 13.07.2011. Moreover, even CW1 has not been able to categorically establish that cheque in question was issued by accused. CW1 in his cross- examination states, "I cannot admit or deny the suggestion that the contents of the cheque have not been filled by the accused ". Thus, in absence of evidence, it cannot be said that accused had issued the cheque in question to the complainant on 13.07.2011 as alleged.
(ii)(b) To the above observation, Ld. Counsel for complainant has argued that even if it is presumed that the cheque in question was given in blank by the accused at the time of grant of loan, still the complainant has authority to fill an inchoate instrument and present the same for encashment. No doubt an inchoate instrument can be filled in by the Satin Credit Care vs. [ENTITY] CC. No. 1257/12 complainant and presented for encashment but the same has to be with the consent, express or implied of the drawer. [ENTITY] is not at liberty to fill in any whimsical figure in the cheque and present it for encashment. The amount must be actually due upon the accused and accused must have agreed upon the same as due.
(ii)(c) Now, so far as the consent of the accused is concerned, there is no evidence whatsoever on record that accused had consented expressly or impliedly for filling up of the cheque and its presentation for encashment. Even otherwise as per CW1, accused has repaid a sum of Rs. 39,250/- out of a loan of Rs. 61,200/- and only a sum of Rs. 21,950/- was outstanding against the accused. Thus, it is hard to believe that accused would consent to pay a further sum of Rs. 53,493/- to the complainant towards outstanding amount and that too after lapse of more than 1.5 years after the foreclosure of loan.
(iii) So far as the liability of Rs. 53,493/- is concerned, complainant has placed on record statement of account Ex. CW1/G to establish liability of accused for Rs. 53,493/-. However, the statement is computer generated and has not been certified in accordance with [SECTION] of [ACT] and thus, not admissible. Even otherwise the main body of the statement shows only an outstanding amount of Rs. 21,950/- and thus, it fails to prove liability of accused to the tune of Rs. 53,493/- on the date of issuance of cheque in question. Thus, Satin Credit Care vs. [ENTITY] CC. No. 1257/12 neither from the complainant's evidence nor from the deposition of the accused, a liability of Rs. 53,493/- is made out against the accused as on 13.07.2011.
(iv) The last fact in dispute is issuance of cheque in question towards discharge of liability. Accused vehemently urges that he had issued the cheque in question as a security cheque at the time of grant of loan. Now, as per complainant, accused has made last payment till 09.01.2010 but the outstanding notice was given to him on 19.05.2011. No explanation has been furnished by the complainant as to why the notice was not issued earlier by it immediately after the defaults made by the accused as per clause 10(a) of the loan agreement. It is inexplicable as to why the complainant waited for about 1.5 years to issue notice against the accused lest the same was to enhance the penalty amount and extort an exorbitant sum from the accused. [ENTITY] states that regular reminders were given to the accused. However, there is no proof of reminders on record till 19.05.2011. The mode through which reminders were given or the collection agent who was giving the reminders have not been stated by the complainant and thus the version of the complainant qua the repeated reminders given to the accused is dubitable.
19. Thus, from the entire evidence on record, complainant has failed to establish that the cheque in question was issued by the accused towards discharge of liability. Accused on the other hand has proved that the cheque in question was given Satin Credit Care vs. [ENTITY] CC. No. 1257/12 as a security cheque to the complainant and it is a settled law that a security cheque does not attract the penal provisions of [SECTION] of [ACT] (vide [PRECEDENT]; [PRECEDENT] decided by Hon'ble High Court of Delhi on 01.03.2011) and thus, it cannot be said that the offence under [SECTION] [ACT] has been made out against the accused.
20. Once the complainant has failed to establish basic ingredients of [SECTION] [ACT], it would be a futile exercise to meander into other ingredients of the offence. Accordingly, it is held that the offence under [SECTION] [ACT] is not made out against the accused. Accused stands acquitted of the offence under [SECTION] [ACT]. File be consigned to Record Room.
Announced in Open Court 22.05.2013 ([ENTITY]) METROPOLITAN MAGISTRATE-05 NEGOTIABLE INSTRUMENTS ACT DWARKA COURTS, NEW DELHI 22.05.2013