IN THE COURT OF SH [ENTITY] ADDITIONAL SESSIONS JUDGE04 & SPECIAL JUDGE SOUTH EAST SAKET COURTS: NEW DELHI M. No. 01 of 2014 ID No. 02406R0160342014 alongwith (CA No. 16/2013) ID No.02406R0132122013 [ENTITY] S/o. Sh. S J S Deol R/o D68, Top Floor, Paryavaran Complex, New Delhi110030 Petitioner Versus Sh. [ENTITY] S/o Sh. Satish Dutta R/o 759B/761, Flat No. 8, Ward No. 6, Mehrauli, New Delhi Respondent Instituted on : 04.06.2014 Argued on : 01.07.2015 Decided on : 27.07.2015 JUDGMENT
1 The appellant had earlier filed an appeal (being [CASE NUMBER]) by virtue of provisions of proviso appended to [SECTION] of [ACT] which was introduced in the books of statute w.e.f. 31.12.2009 entitling the victim in a criminal case to prefer an appeal against the order/judgment of acquittal of the respondent/accused for the offence under [SECTION] of [ACT], passed by Court.
2 The appellant feeling aggrieved from the judgment dated 9.4.2013 passed by the Court of Sh. [ENTITY], Ld. MM ( N I Act02) South District, Saket Courts, New Delhi, in [CASE NUMBER] in case titled "[ENTITY] v. [ENTITY]" had preferred the present appeal before the Court of Sessions. 3 The aforesaid appeal was disposed off as compromised by Ld. Predecessor of this court on 1/3/2014 with liberty to revive the case in case of default by the respondent in honouring his undertaking and compromise arrived between the parties before Ld. Predecessor at the appellate stage. 4 Since the said compromise had not been honoured by the respondent, the appellant therefore had moved an application for the revival of the appeal in terms of the liberty granted in favour of the appellant vide order dated 01.03.2014, notice of the application was issued to the respondent; who had appeared and had given his no objection to the revival of appeal and hence appeal was revived vide order dated 21.03.2015 and respondent had also contested the appeal on merits. 5 As per the case of the appellant, in the month of August, 1999, he had advanced a loan of Rs.1.5 lac to the respondent alongwith interest @ 2% per month for a period of 3 years (36 months) commencing from 15.7.2009 till 14.7.2014 and loan agreement dated 28.8.2009 was also executed between the parties in this regard.
6 Thereafter, in the month of August 2009, respondent had again approached the appellant for another additional loan of Rs. 3 lacs and against the said demand, appellant was stated to have advanced further loan of Rs. 2 lacs to the respondent which was to be repaid by him by October, 2010. 7 It had also been stated that in discharge of his aforesaid liability, the respondent had issued three cheques, one bearing No. 575347 dt. 27.09.2010 for Rs.1,50,000/ drawn on Punjab National Bank, and two cheques bearing nos. 102851 and 102852 both date 29.10.2010 for Rs. 1,00,000/ each, drawn on State Bank of India.
8 As per the appellant's case, all the aforesaid three cheques upon their presentation were dishonoured for the reasons "funds insufficient" vide memo dated 24.12.2010. Thereafter, legal demand notice dated 11.1.2011 was sent to the respondent through registered post and UPC which was also duly served upon him and despite service of the said notice, the respondent had neither bothered to make the payment within the stipulated period of time nor he had ever replied to the same, hence, [CASE NUMBER] was filed against the respondent for an offence under [SECTION] of [ACT].
9 After being satisfied from the presummoning evidence available on record as adduced by the appellant herein, the respondent was summoned by the Ld. Trial Court to face trial for an offence under [SECTION] of [ACT]. 10 The respondent herein had also duly appeared before the Ld. Trial Court to face trial and notice of acquisition under [SECTION] [ACT] was served upon him on 3.1.2012, in reply to which he had categorically stated that he had received a sum of Rs. 2 lacs from the complainant/appellant herein, against which he had also made certain payments and cheques in question were stated to be not issued in discharge of any legally enforceable dues or liability. Rather the respondent/accused was told by the appellant/complainant that his cheque for Rs. 1.5 lac had got misplaced and in order to show his bonafide, he had further issued two cheques of Rs. 1Lac each to the appellant. He had also stated that he was ready to make the payment of said amount due towards him but the complainant had misplaced the said cheques.
11 Thereafter, the complainant had again examined himself in the post notice evidence and was crossexamined by the respondent at length and thereafter CE was closed and accused was examined under [SECTION] [ACT] in which he had admitted that he had taken a loan of Rs. 1.5 lac from the complainant through agreement Ex. CW1/A. He had also admitted further issuance of two cheques of Rs. 1 lac each but had stated that the aforesaid amount of Rs. 2 lacs covered his earlier loan of Rs. 1.5 lac and remaining Rs. 50,000/ was given by him to the appellant for the purpose of making investment with some online company running its business in the name of " Invest Guru". Dishonourment of cheques was cited as a matter of record. Receipt of legal notice was clearly admitted by him and lastly he had stated that he had never received loan of Rs. 3 lacs from the complainant and in case if he was a defaulter, then, there was no question for the appellant to have advanced him more loan without any further documentation. 12 After hearing Ld. Counsels for the parties as well as appreciating the evidence adduced on record, Ld. MM was pleased to acquit the respondent vide his judgment dated 9.4.2014, which has been challenged by the appellant by way of present appeal.
13 It shall be worth while to reproduce certain extracts from the impugned judgment on the basis of which Ld. MM had arrived at the conclusion related to innocence of the accused which ultimately resulted into his acquittal. The said paras are reproduced herein below : "8. Accused admitted the loan Rs. 1,50,000/ and the execution of agreement Ex.CW1/A. It is defence plea that no additional loan was ever sought by or advanced to the accused. He stated that he had issued cheque Ex. CW1/D as a security against the said loan of Rs.1,50,000/. However, complainant later told him that the cheque Ex.CW1/D was lost and requested for issuance of fresh security. Then accused issued two cheques of Rs. 1,00,000/ each as a security which have been misused by the complainant. Moreover the loan amount of Rs.1,50,000/ was not due and outstanding when the cheques were presented for payment.
It is pertinent that the accused has raised a consistent defence and no discrepancy crept up in his stand at any stage.
9. At the outset, I would like to draw attention to the fact that the complaint is conspicuously vague and devoid of details. The amount actually advanced as additional loan has not been mentioned in the complaint. The date (when) and place (where) the loan was advanced is conspicuously missing. Complaint does not speak as to the rate of interest or when the cheques were issued by the accused. Why are these details missing ? It remained unexplained throughout. It is a vital circumstance which weights against the accused.
10. It is a complainant's case that initially he gave Rs.1,50,000/ on interest to the accused against which a written agreement Ex.CW1/A was executed. However, the accused defaulted in payment of the interest on the said loan amount. Despite this,the complainant allegedly paid him additional loan of Rs2,00,000/ The advancement of additional loan under the circumstances appears dubious on two accounts:
(1) The default in payment of interest can be attributed to two reasons. Either the accused was financially incapable to even pay the interest or he had malafide intention to dupe the complainant. In these circumstances, no ordinary prudent man would have advanced additional loan to the accused.
(2) Secondly, even if such loan is advanced, an ordinary prudent man would have taken abundant precautions to safeguard his investment.
It is pertinent that the loan was not advanced gratuitously. The loan transaction is purely a commercial transaction entered into by complainant with the sole objective of earning interest. When the first loan was advanced, the entire transaction was documented and the terms and conditions like interest, duration etc were elaborately set out in agreement Ex. CW1/A. Having suffered injury (non-payment of interest), it is expected that now he would have exercised greater care and caution.
However record reveals that no such safeguards were taken by the complainant. Rather this time the complainant was very casual as is evident from the following circumstances:
a. The alleged transaction of additional loan is oral and, unlike earlier transaction, no agreement was executed.
b. The alleged payment was made in cash but incredibly no receipt was obtained. c. No witness was present when the alleged additional loan was advanced. d. Even no security was obtained from the accused to ensure the repayment. e. Lastly, even the cheques were not given contemporaneously by the accused.
The insouciant conduct of the complainant in advancing additional loan is not only questionable but also dehors that of an ordinary prudent man. Why did he act in such a rash and thoughtless manner ? It was obligatory for the complainant to come up with a cogent explanation. Unfortunately no satisfactory answer or explanation forthcame. In these circumstance, an irresistible conclusion can be drawn that no additional loan was advanced by the complainant to the accused.
11. In cross-examination, CW 1 came up with a novel story that the cheques is question were issued for repayment of two loans of Rs.1,50,000/- and Rs.2,00,000/-. Pertinently, this story does not find any mention in the complaint or affidavit of CW 1. Moreover, there is no corroborating circumstance which supports this new story. In these circumstances, doubts are raised as to the genuineness of CW 1's story.
Further, it has come twice in the testimony of CW 1 that the loan of Rs.1,50,000/- was payable on 28.08.2012. Ex.CW1/A also corroborates that the loan was repayable in the year 2012. The present complaint has been filed in the year 2011. In other words, the debt was not due and outstanding when the complaint was filed. It is pertinent that CW 1 deposed in cross examination that he presented the cheques because the accused defaulted in payment of interest. There is nothing on record to suggest that the default entitled the complainant to recover the entire loan amount at once. In these circumstances, it stands established that the loan amount of Rs.1,50,000/- was not due and recoverable when the cheques were presented for payment. Accordingly, the offence under [SECTION] is not made out.
12. In the legal notice also, the amount demanded is Rs.3,50,000/- which included the loan amount of Rs.1,50,000/-. As noted above, the loan amount of Rs. 1,50,000/- was not due at that time. Accordingly, the legal notice is itself defective and invalid.
13. Apart from being incredible, the complainant's case is full of contradictions and inconsistencies.
i. In the complaint and affidavit of CW 1, it is stated that the accused approached the complainant for a loan of Rs.3,00,000/- and issued cheuqes in question. Per contra CW 1 in cross examination deposed that he had advanced only Rs.2,00,000/- to the accused and the cheques were issued to repay the two loans of Rs.1,50,000/- and Rs.2,00,000/-. This contradiction hits at the foundation of the complainant's case and badly damages it. ii. In the complaint and affidavit of CW 1, it is stated that the accused approached the complainant for a loan of Rs.3,00,000/- in August, 2009. There is no mention of any payment in December, 2009. Per contra CW 1 in cross examination deposed that he had advanced only Rs.2,00,000/- to the accused and that too in December, 2009. iii. At one point, CW 1 deposed that all the three cheques were issued in August, 2010. Later, he testified that only two cheques were issued in the year 2010. iv. It is pertinent that as per complaint, the additional loan was repayable in October, 2010. However, CW 1 deposed that he was demanding repayment of the loan amount in January, 2010 i.e. only after one month of advancement. Why? Once again no answer or explanation.
v. The rate of interest at which the additional loan was advanced has not been specified. It is crucial because the loan was advanced by the complainant with the sole purpose of gaining interest.
14. It is trite now that the accused may rebut the presumptions from the circumstances of the case and need not lead positive evidence for rebuttal. In [PRECEDENT] discussing at length the question of the rebuttal of the presumption, it was observed:
" 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] of the [ACT] to rebut the presumptions arising under [SECTION] and [SECTION] of the Act. The accused has also an option to prove the non-existence of consideration and debt or liability either by letting in evidence or in some clear and exceptional cases, from the case set out by the complainant, that is , the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial "
In [PRECEDENT] and [PRECEDENT], it was held :
"5. There is no doubt that the burden rests on the accused to rebut the presumption as raised under [SECTION] and [SECTION] of the [ACT]. However, this presumption can be rebutted by the accused not merely by examining his own witnesses but even by cross examination of the complainant and his witnesses and bringing out on record, through cross examination, that the complainant was altar and there was no privity of contract between the complainant and the accused and cheques were misused."
Going a step further, Hon'ble Supreme Court in [PRECEDENT] has observed :
"31. The courts below, as noticed herein before, proceeded on the basis that [SECTION] raises a presumption in regard to existence of a debt also. The courts below, in our opinion, committed a serious error in proceedings on the basis that for proving the defence the accused is required to step into the witness box and unless he does so he would not be discharging his burden. Such an approach on the party of the courts, we feel, is not correct."
As quoted above, the standard of proof so as to prove a defence on the part of an accused is 'preponderance of probabilities'. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which he relies.
15. There is no documentary or independent ocular evidence to established complainant's case of additional loan. So the entire complainant's case is dependent upon the testimony of complainant(CW 1). As such, testimony of CW 1 must be unambiguous, cogent and credible for establishing the complainant's case.
16. The credibility of a witness is judged from the inherent probabilities of truthfulness of his testimony and him withstanding the test of cross examination. Cross-examination is the touchstone of the truthfulness and veracity of the statements made in the examination- in-chief. Being the solitary prosecution witness, complainant's cross-examination acquires significance and requires greater scrutiny.
Complainant (CW1) was grilled at length by the counsel for the accused. His testimony was found to be full of inconsistencies and contradictions on material aspects. He made inconsistent statements regarding the amount of loan advanced. It shook the very foundation of the complainant's case and prove fatal to it. To add to it, he is silent on several relevant facts and testimony is found to be vague and bereft of details. His conduct in advancing alleged additional loan is dubious and dehors that of an ordinary prudent man. As such, his version of advancement of additional loan has been found to be incredible and unacceptable. In a nutshell, complainant's testimony is not convincing at all and it shall be unsafe to base conviction on such uncorroborated evidence.
Further it has been established that the liability against which the cheques have been allegedly issued was not due and recoverable at the relevant time. At the same time, even the demand notice Ex.CW 1/F is found to be defective and invalid." 14 The aforesaid judgment of acquittal has been challenged by the appellant on the following amongst other grounds:
(a) The Ld. MM had committed an error in law as well as on facts in this case and had passed the impugned judgment in a hasty manner which had resulted into grave miscarriage of justice to the appellant. It has been further stated that receipt of legal notice by the respondent was not denied and he had also never bothered to reply the same, hence, his silence amounted to an admission of contents of the said notice and anything contrary to the same was required to be proved by the respondent and not by the appellant.
(b) Ld. MM had also ignored the provisions of [SECTION] of the [ACT] raising presumptions in favour of the holder in due course that cheques were issued in the discharge of legal liability or debt, either in part or whole and onus to rebut the same was upon the respondent which he had failed to discharge.
(c) The Ld. MM had further fallen in error in acquitting the accused who had not even rebutted any of the presumptions raised against him by adducing cogent evidence on record to set up his probable defence.
(d) Further, in his entire crossexamination conducted on behalf of the respondent, he had never questioned the factum of his cheques lying in the hands of the appellant which also proved the loan transaction otherwise there was no occasion for the appellant to have acquired cheques of the respondent.
(e) Ld. MM had also been stated to have ignored the fact that since cheques in question were issued by the respondent in partial discharge of his legal liability or debut, therefore, question related to variation of quantum of loan amount as emerged during cross examination of appellant, had not made any much difference towards liability of the respondent.
(f) Ld. MM had further fallen in grave error in arriving at the conclusion, in the absence of any cogent evidence appearing on record, adduced on the part of the respondent, that respondent had defaulted any payment of interest on the said loan amount and hence, there was no occasion for the appellant to have advanced him a further additional loan of Rs. 3 lacs.
(g) Ld. MM was stated to have further fallen in error in totally relying upon the statement of the respondent recorded under [SECTION] [ACT] in which he had merely denied his liability in respect of the cheques and had not adduced any evidence to corroborate his words.
(h) Ld. MM had further fallen in error by making certain extra judicial observations which had no legal sanctity behind the same and even the judgments relied upon by the Ld. MM were not at all applicable in the present case and the inference drawn by the Ld. MM through the said judgments also had no legal force behind them because once the respondent had failed to discharge his onus in the instant case, then, there was no justification in the impugned judgment of acquittal passed by the Ld. MM.
[ENTITY] v. [ENTITY] M No. 1 of 2014 10/16 15 I have heard Sh. [ENTITY] and Sh. [ENTITY], Ld. Counsels
appearing for the appellant as well as the respondent appearing in person and have perused the material available on record.
16 As per the appellant's own case, which is also reflected from the document Ex. CW1/A placed and proved on record, i.e. agreement dated 28.8.2009 executed between the parties, the aforesaid loan of Rs. 1.5 lac was advanced by him to the respondent on 15.07.2009, was to be repaid by the latter only after a period of 36 months, i.e. the amount could have become due for being repaid only after 15.7.2012. Hence, I find myself in agreement with the observations made by the Ld. MM and also reproduced herein above, that there was no legally enforcible debt or liability existed on the part of the respondent in favour of the appellant on or before 24.12.2010 when the aforesaid cheque of Rs. 1.5 lac in question got dishonoured as liability in respect of the said loan could have arisen only after expiry of period of 36 months, i.e. 15.7.2012. Therefore, findings and observations of the Ld. MM as appearing in the impugned judgment in respect of the said cheque of Rs.1.5 lac did not call for any interference of this court in the exercise of its appellate powers and jurisdiction. Hence acquittal of Respondent in respect of said cheque is hereby reaffirmed and upheld.
17 Now, coming to the aspect of the remaining two cheques of Rs. 1 lac each, I have no hesitation in holding that so far as those two cheques were concerned, the Ld. MM appears to have got carried away by his own personal assumptions, presumptions, surmises, conjectures and fancies and had started presuming such incidental facts which were not actually in existence in the given [ENTITY] v. [ENTITY] M No. 1 of 2014 11/16 facts and circumstances of this case.
18 Ld. MM seems to have further ignored the version of the respondent as contained in his reply to the notice of acquisition wherein he had categorically admitted to have borrowed an amount of Rs. 2 lacs from the appellant and had also stated that he had also made certain payments against said loan to the appellant, however, onus to prove those part payments was heavily upon the respondent which he had miserably failed to discharge in this case.
19 It shall also be worth mentioning here that the appellant who had been examinedinchief by the Ld. MM, was also crossexamined on behalf of the respondent before the Ld. Trial Court and perusal of the same reveals that respondent had given certain suggestions to the appellant during his cross examination which were also admitted by the appellant, such as, factum of execution of agreement Ex.CW1/A carrying a stipulation regarding payment of interest @ Rs. 3000/ per month by the respondent to him as interest at the said loan. The appellant had further denied the suggestion put to him that respondent had paid him an interest @ Rs. 3000/ per month for a continuous period of 2 years.
20 Once, the respondent himself had given this suggestion to the appellant that he was continuously paying interest on the aforesaid loan amount to the appellant for a period of 2 years, then, I have no hesitation in holding that Ld. MM had categorically fallen in error when he had observed that once the respondent was a defaulter in making payment of interest, then by no stretch of imagination, it could be presumed that an ordinary prudent man including the [ENTITY] v. [ENTITY] M No. 1 of 2014 12/16 appellant would have advanced him a further loan of Rs. 2 lacs. 21 Ld. MM had further fallen in error by not noticing the fact that as per appellant's case, first installment of loan was paid by him to the respondent in July 2009, and a subsequent request for additional loan was made by the respondent in August, 2009 itself, i.e. within a period of 1 month which was also stated to have been advanced to him by the appellant by December, 2009, as deposed by him during his crossexamination. Therefore, by any stretch of imagination, it could not be held that appellant had all the reasons to believe that the respondent was a chronical defaulter in payment of interest within such a short span of 34 months. The Ld. MM had also fallen in error in observing that the appellant initially had not disclosed as to when he had actually advanced said loan of Rs.2 lacs to the respondent. It is the cardinal principal of law that only facts are required to be pleaded in the complaint and not the evidence. It was clearly mentioned in para3 of the complaint that respondent had further asked for a loan of Rs.3 Lakhs from the appellant but appellant had not stated that he had advanced the whole amount of Rs.3 Lakh to the respondent. He had only mentioned about receiving of three cheques from the respondent total amounting to Rs.3.5 Lakhs. When asked further, he had clarified it during his cross examination that he had advanced only Rs.2 Lakhs against demand of Rs.3 Lakhs.
22 I also fail to understand the observations made by the Ld. MM in para 13(i) of the impugned judgment because though there might be a demand of Rs. 3 lacs from the side of the respondent as loan, but there was no impediment or barrier in advancing him loan of Rs. 2 lacs by the appellant against his aforesaid [ENTITY] v. [ENTITY] M No. 1 of 2014 13/16 demand. Hence, it could not have been said that appellant by advancing a loan of Rs. 2 lacs to the respondent had committed any error or any illegality. 23 It has also been admitted as correct by the appellant that accused/respondent had issued 2 cheques of Rs. 1 lac each to him in the year 2010 and had categorically denied the suggestion that appellant alongwith his father had told the respondent that since cheques issued towards interest had been misplaced, hence, he should issue the aforesaid 2 cheques in lieu of them. 24 Ld. MM had also failed to take note of this part of testimony of the appellant because here the respondent had given a suggestion which was entirely contradictory to his own previous stand itself. The accused in his statement before the court recorded under [SECTION] [ACT], had categorically and emphatically stated that cheques were issued by him on the pretext of misplacement of earlier cheques issued by him for the loan amount. However, a suggestion has been given related to misplacement of cheques (multiple) issued by him towards interest. 25 Once, the appellant had categorically denied this suggestion, then, onus had shifted upon the respondent to have proved the time and place as to when and where he was told about misplacement of the aforesaid cheques by the appellant. However, he had failed to discharge the aforesaid onus. Though Ld. MM in the impugned judgment had mentioned about contradictory stands taken by the appellant during the trial, but reality is viceversa and it was the respondent who had taken contradictory stands regarding the payment of interest as on the one hand he had claimed to have paid interest through cheques and immediately thereafter, he had given a suggestion to the appellant about payment of interest in [ENTITY] v. [ENTITY] M No. 1 of 2014 14/16 cash.
26 Further, it was admitted by the appellant that respondent had not paid him any interest till December, 2009 on the initial loan amount of Rs.1.5 lac. This suggestion on the part of respondent itself was contradictory and self destructive of his previous stand where he had claimed to have regularly paid the interest to the appellant to a period of two years either by cheque or in cash. 27 Interestingly, again, a suggestion has been put to the appellant on behalf of the respondent which was also admitted by him to be correct that "appellant had advanced further sum of Rs. 2 lacs to the respondent till December, 2009". By putting this suggestion himself to the appellant, the respondent herein had categorically admitted the subsequent loan in affirmative. Hence, observations made by Ld. MM in the impugned judgment whereby he had totally disbelieved the appellant related to the transaction of subsequent advancement of loan were not only erroneous but also contradictory to the judicial record and appeared to have been made by the Ld. MM on the basis of his personal whims, fancies, surmises and conjectures. Hence, the same are liable to be set aside.
28 So far as the legal notice issued on behalf of the appellant in respect of dishonoured cheques is concerned, a perusal of the judicial record reveals that Ld. MM vide his impugned order was pleased to observe that since the demand in respect of the cheque of Rs. 1.5 lacs was also raised in the said notice which was not found payable and due on the date of presentation of the cheque hence the notice itself was defective and invalid. However, I do not find myself in agreement with the said observations of the Ld. MM in view of the settled legal proposition [ENTITY] v. [ENTITY] M No. 1 of 2014 15/16 that if the amounts are categorically mentioned under separate heads, then the legal notice shall not loose its legal scantily merely because it also finds mention of the amount which was otherwise not recoverable. It can be an amount claimed either towards legal fee of the counsel or towards interest of the dishonoured cheque or under any other head. Furthermore, it is also an admitted fact on record that the said legal notice went unreplied on the part of the respondent. Therefore, an adverse inference was liable to be drawn against the respondent and not against the appellant as had been done in the present case by the Ld. MM and the respondent must have been presumed to have conceded in favour of correctness of the contents of the notice.
29 As a result of my aforesaid discussion, the appeal is partly allowed. So far as acquittal of respondent with respect to cheque of Rs. 1.5 lac is concerned, the impugned judgment is upheld.
30 So far as the remaining cheques of Rs. 2 lacs ( Rs. 1 lac each) are concerned, the appeal is allowed and the impugned judgment is set aside and respondent is hereby held guilty and convicted for the offence under [SECTION] [ACT].
31 Let the respondent/accused as well as the appellant be now heard on quantum of sentence on 30/7/2015.
Announced in the open court on ([ENTITY]) 27th July, 2015 Additional Sessions Judge04 & Spl. Judge (NDPS) South East, New Delhi [ENTITY] v. [ENTITY] M No. 1 of 2014 16/16