IN THE COURT OF Ms. [ENTITY] METROPOLITAN MAGISTRATE 02 (NORTH) ROHINI COURTS : DELHI [ENTITY] S/o Sh. Jagpal Singh R/o E-216, III Floor, DDA Flat, Astha Kunj, Sector-18, Rohini Delhi-89. COMPLAINANT Versus [ENTITY] S/o Sh. R.L. Aggarwal R/o Flat No. 242, Block-E, Pocket-3, Paradise Apartment, Sector-18, Rohini, Delhi. ACCUSED New Case Number. : 2644-16 [CASE NUMBER] Date of Institution. : 19.01.2015 Offence Complained Of. : U/[SECTION] [ACT] Plea of the Accused. : Not Guilty Arguments Heard On. : 10.04.2019 Final Order. : Acquitted for offence under [SECTION] [ACT] Page1of 8 Date of Judgment. : 02.05.2019 JUDGMENT
1. Factual matrix as brought about from the complaint is that [ENTITY] gave Rs. 10,00,000 to the accused in cash for franchisee of [ENTITY]. Accused in discharge of legal liability issued cheque bearing no172615 ( EX. CW1/A) dated 20.11.2014 for sum of Rs 5,00,000 and drawn on Punjab National bank, Rohini sector 18, Delhi.
2. The aforestated cheque was presented by the complainant for encashment to his bank ie. HDFC Bank. The cheque was returned back dishonored vide return memo dated 21.11.2014 (Ex. CW1/B) with reason "Funds Insufficient". Complainant thereafter gave legal demand notice to the accused on 9.12.2014 (Ex. Cw1/C) calling upon him to make payment within 15 days from notice. The said notice was sent by the Speed Post (Ex.CW1/D) Despite the service the accused did not make the payment within stipulated period, hence present complaint was filed under [SECTION] of [ACT]The Act).
3. Complaint was perused and cognizance of the offence was taken by and Complainant tendered pre summoning evidence by way of affidavit Ex.CW1/1 and relied on documents EX.CW1/A to Ex.CW1/D.
4. Accused was admitted on bail and notice under [SECTION] [ACT] was framed against the accused on 23.02.2016 to which he pleaded not guilty and claim trial. He stated that he did not issue the cheque to complainant. Cheque was given to [ENTITY] and [ENTITY] as Page2of 8 security. He has not taken loan from complainant. He has not received the legal demand notice.
5. Accused move an application under [SECTION] and matter was fixed for the complainant evidence. Complainant was cross examined by the accused. Thereafter, complainant evidence was closed.
6. Accused was examined under [SECTION] [ACT], all the incriminating evidence were put to him in vernacular and accused pleaded innocence. Accused lead Defence Evidence. He examined himself and [ENTITY] as witness. Defence Evidence was closed.
7. Final arguments were advanced by the counsel for the parties. It was argued for the complainant that [ENTITY] gave Rs. 10,00,000 to the accused in cash for franchisee of [ENTITY]. Accused in discharge of legal liability issued cheque bearing no172615 ( EX. CW1/A) dated 20.11.2014 for sum of Rs 5,00,000 and drawn on Punjab National bank, Rohini sector 18, Delhi.
8. The aforestated cheque was presented by the complainant for encashment to his bank ie. HDFC Bank. The cheque was returned back dishonored vide return memo dated 21.11.2014 (Ex. CW1/B) with reason "Funds Insufficient". Complainant thereafter gave legal demand notice to the accused on 9.12.2014 (Ex. Cw1/C) calling upon him to make payment within 15 days from notice. The said notice was sent by the Speed Post (Ex.CW1/D) Despite the service the accused did not make the payment within stipulated period.
9. Per contra it is argued by the counsel for the accused that accused is falsely implicated and complainant has misused the cheque of the Page3of 8 accused. No loan was taken by the accused. There is no proof on record as to advancement of loan. Complainant has not shown any agreement, receipt for loan. Loan is not reflected in ITR. Complainant had no capacity to advance the loan.
10. I have heard the complainant and accused and have perused the record. Both the parties did not wish to file written arguments.
11. At the outset it is wise to discuss the legal principles involved in present matter at hand. Present complaint is filed u/[SECTION] of the Act. The object of the legislation is to encourage the culture of use of cheques and enhance the credibility of the instrument.
12. The legal regime pertaining to the offence under [SECTION] of the act has numerous components inter alia,
a) Cheque was drawn by a person on an account maintained by him
b) It was drawn for the discharge, in whole or in part, of any debt or other liability
c) Cheque was presented to the bank within a period of six month from the date it was drawn or within the period of its validity.
d) Cheque was returned by the bank unpaid due to insufficient funds or that it exceeds the amount arranged to be paid.
e) Payee or holder in due course make demand of payment of the said amount of money by giving a notice, in writing within 30 days of receipt of information by him from the bank regarding the return of cheque as unpaid.
f) The drawer of the cheque fails to make payment of the said amount of money within 15 days of the receipt of the said notice Page4of 8
g) Complaint was filed in writing within one month of the date on which cause of action arised.
13. Statutory and legal presumptions in favor of payee/ complainant as laid down by the Act and precedents can be summarized as follows.
a) Presumption as to liability: it shall be presumed unless contrary is proved that the holder of cheque received the same in discharge of any debt or liability ([SECTION] and 118(a
b) Presumption of dishonor: court shall presume dishonor of cheque on production of bank's slip or memo having official mark denoting that cheque has been dishonored unless such fact is disproved. (sec 146)
c) Service of legal demand notice: notice sent at correct address by making complete payments of postal expenses in advance deem to be served and drawer has to show during trial after leading evidence that same was not served .(see [PRECEDENT])
14. Now I shall discuss components of offence in light of facts and circumstances of present case
15. Issuance of cheque Issuance of cheque is disputed by the accused he has stated that although cheque bears his signature. It was never issued to Complainant.
16. Cheque was present to bank for payment and it was returned back unpaid.
Page5of 8 The aforestated cheque was presented by the complainant for encashment to his Bank. The cheque was returned back dishonored vide return memo dated 21.11.2014 (Ex. CW1/B) with reason "Funds Insufficient".
17. Legal demand notice within 30 days of return of cheque and no payment by drawer within 15 days of receipt. In present case legal demand notice Ex. CW1/C was sent on 9.12.2014 by Speed Post to the accused. Reciept of legal demand notice is disputed by the accused However, he has admitted on record that address on the legal demand notice is correct. Placing reliance on [PRECEDENT] (supra) and [SECTION] [ACT], read with [SECTION] [ACT] , when the notice is sent by registered post by correctly addressing the drawer of the cheque, the mandatory requirement of issue of notice in terms of [SECTION] of the Act stands complied with. It is then for the payee to rebut the presumption about the service of notice and show that he had no knowledge that the notice was brought to his address or that the address mentioned on the cover was incorrect or that the letter was never tendered or that the report of the postman was incorrect. In present case accused has not brought any cogent evidence to show that notice was not delivered to him, moreover he has admitted the address on notice to be correct. No payment is made after receipt of notice or after summons. In such circumstances facts stands proved against the accused.
18. Legally enforceable debt or liability It is a well settled position of law that when a negotiable instrument is drawn, two statutory presumptions arise in favor of the complaint, one Page6of 8 under [SECTION] [ACT] and another under [SECTION] of the [ACT]. Further, the court will presume a negotiable instrument for consideration unless and until after considering the matter before it, it either believes that the consideration does not exist or consider the non-existence of the consideration so probable that a prudent man ought under the circumstances of the particular case to act upon the supposition that the consideration does not exist. For rebutting such presumption, what is needed is to raise a probable defense. Reliance is placed on [PRECEDENT].
19. In the present case, liability is disputed by the accused. He has alleged that complainant did not had the capacity to give loan and loan was never advanced. Complainant has stated that he has rental income of Rs. 60000 from different properties. However, loan was given in cash and it is admitted fact that complainant do not file ITR and there is no written agreement for same. Complainant has not proved that loan was advanced by him. Moreover, it is the stand of the accused that cheque was given to [ENTITY] and [ENTITY] as security. Moreover, Considerable amount of loan is advanced by the complainant without any receipt. Complainant is not aware about the procedure nor seen any documents for franchisee of AMUL. It is not explained by the complainant as to how and when and by which agreement he went in business for AMUL Franchisee with accused. Complainant did not acted in reasonable and believable manner while giving Rs. 10 lac to the accused.
20. In present case accused has rebutted the presumptions raised in favor of complainant and complainant cannot take the stand that Page7of 8 defence is not cogently proved when he has not proved the liability beyond reasonable doubt.
21. Accordingly, in light of above discussion accused is acquitted for offence under [SECTION] [ACT].
[ENTITY] signed Announced in the open court GUPTA by [ENTITY] Date: 2019.05.02 on 2.05.2019 SINGH 16:27:26 +0530 ([ENTITY]) Metropolitan Magistrate-02(North) Rohini Courts/02.05.2019 Page8of 8