IN THE COURT OF DR. [ENTITY]: ASJ/SPECIAL JUDGE (CBI) (SOUTH): DISTRICT COURTS, SAKET NEW DELHI Criminal Appeal Number: 01/2016 (8055/16) In the matter of: [ENTITY], S/o late R.C. Gupta, R/o G-II/83/19, Sangam Vihar, New Delhi-110062. Appellant versus [ENTITY], S/o Shyam Lal Gupta, R/o H. No.333, Gali No.6, H-Block, Sangam Vihar, New Delhi. Respondent Date of institution of Appeal : 28.12.2015 Date of conclusion of arguments : 08.06.2017 Date of judgment : 09.06.2017 For Appellant : Mr. [ENTITY], Advocate. For Respondent : Mr. [ENTITY], Advocate. JUDGMENT
1. This appeal under [SECTION] of the [ACT] preferred by appellant [ENTITY] (hereinafter referred to as 'the accused') against respondent [ENTITY] (hereinafter referred to as 'the complainant'), is directed against judgment dated 26.11.2015 and order on sentence dated 28.11.2015, passed by the court of Metropolitan Magistrate-1, ([ACT]) South District, Saket Courts, New Delhi, whereby, in a [CASE NUMBER] entitled [ENTITY] v. [ENTITY], the Learned Metropolitan Magistrate convicted the accused for having committed an offence under [SECTION] of the [ACT] (hereinafter referred to as 'the [ACT]') and passed sentence on him to undergo simple imprisonment for the period of 45 days and to pay compensation of the amount of Rs. 3,75,000/- within a period of one month, in default of payment of compensation, to further undergo simple imprisonment for the period of one month.
2. The circumstances giving rise to the application are that on 17.07.2013, the complainant made a complaint under [SECTION] of the [ACT] against the accused [ENTITY] with the view to take cognizance of the offence and to summon, try and punish him for having committed the said offence. In the said complaint, the complainant, inter alia, stated that he had advanced a friendly loan of Rs. 3,50,000/- to the accused; that when the complainant contacted the accused for repayment of loan amount, the accused acknowledged the loan amount and asked for some more time for repayment of the loan amount; that for repayment of the aforesaid amount, the accused had issued two post dated cheques no. 121879 for a sum of Rs. 1,50,000/- and 121880 for a sum of Rs. 2,00,000/- both dated 11.05.2013 and drawn on Axis Bank, Saket, New Delhi in favour of the complainant; that when the aforesaid cheques were presented for encashment by the complainant through his bankers, Oriental Bank of Commerce, Tughlakabad Industrial Area, New Delhi, the same were dishonoured as per the return memos dated 28.05.2013 with remarks "FUNDS INSUFFICIENT"; that complainant was intimated by his banker on 30.05.2013; that the complainant issued a legal notice dated 03.06.2013 through his counsel by registered AD, Speed Post and Courier and the same were duly served upon the accused as per the report obtained from the postal department and courier agency through internet; that the accused failed to make the payment of dishonoured cheques within stipulated period of 15 days and has also failed to given any reply to the legal notice; that the complainant filed the complaint under [SECTION] of the [ACT] before Learned Magistrate with the following prayer:-
PRAYER In view of the above said, it is, therefore, most respectfully prayed that this Hon'ble Court may graciously be pleased to:
a) Summon, prosecute and punish the accused in accordance with law as provided by [SECTION] of [ACT].
b) Pass any other or further order (s) which this Hon'ble Court deem fit and proper under the facts and circumstances of the complaint in favour of complainant and against the accused person.
3. The learned Magistrate on 02.12.2013, after considering the statements on oath of the complainant, was of the opinion that the material on record was sufficient for proceedings, issued process for the attendance of the accused person.
4. Pursuant to the process, the accused appeared in the court. The particulars of the offence were stated to the accused and he was asked whether he pleaded guilty or has any defence to make. The accused did not plead guilty and stated as follows:-
"The complainant is my relative and I have delivered the cheques to the complainant towards the purchase of plot for which I stood as a guarantor. The cheques have been misused and presented".
5. Thereafter, the learned Magistrate, proceeded to hear the prosecution and took evidence in support of the prosecution. The complainant examined himself as CW1. After the witness for prosecution has been examined, for the purpose of enabling the accused personally to explain all the circumstances appearing in evidence against him, the court examined the accused and his statement under [SECTION] [ACT] was recorded. The accused opted to lead defence evidence but he did not produce any defence evidence.
6. Upon taking of evidence, the Learned Magistrate found the accused guilty, convicted the accused of the offence under [SECTION] of the [ACT] and passed on sentence on the accused. While convicting the accused, the learned Magistrate in judgment dated 26.11.2015, inter alia, observed as follows:-
"It has been argued by ld. Counsel for the accused that the cheques in question were only signed by the accused and the other details on the same were not filled by the accused in his own handwriting. I do not find much merit in this argument. It was held by the Hon'ble High Court of Delhi in case of [PRECEDENT] decided on 26.05.2011) that "there is no law that a person drawing the cheque has to necessarily fill it up in his own handwriting. Once a blank cheque is signed and handed over, it means that a person signing it has given implied authority to the holder of the cheque to fill up the blank which he has left. A person issuing a blank cheque is supposed to understand the consequences of doing so. He cannot escape his liability only on the ground that blank cheque had been issue by him". In the case in hand, it has been admitted by the accused, both in his statement under [SECTION] [ACT] as well as [SECTION] [ACT], that the cheques in question were handed over by him to the complainant. It is not the case of the accused that his signatures on the cheques in question are forged and fabricated. Thus, once the accused has admitted his signatures on the cheques in question, the fact that other details on the said cheques are not in his own handwriting becomes immaterial and not of much consequence.
It has further been argued by ld. Counsel for the accused that there is no averment in the entire complaint as well as the evidence on record led on behalf of the complainant that any loan amount whatsoever was ever advanced by the complainant to the accused. However, the said argument is devoid of any merit as it has been very categorically mentioned in para 2 of the complaint as well as para 2 of affidavit Ex. CW1/1 that a friendly loan of Rs. 3,50,000/- was advanced by the complainant to the accused.
Ld. counsel for the accused has argued that no date has been mentioned as to when the loan amount was actually given by the complainant to the accused. In my opinion, non mentioning of the date of disbursal of the loan is not fatal to the case of the complainant. It is a well settled principle of law that once the accused has admitted to issuing the cheque, presumptions under [SECTION] read with [SECTION] of [ACT] qua the Negotiable Instrument being drawn for consideration and the holder of the cheque receiving the same with regard to debt or other liability arise in favour of the complainant. It was held by the Hon'ble High Court of Delhi in the case of [PRECEDENT] (decided on 30.06.2015) that "it is settled law that the burden to rebut the presumption under [SECTION] [ACT] is on the accused. The burden on the accused to rebut the presumption is only to the extent of preponderance of probabilities, whereas the complainant has to prove its case beyond reasonable doubts. It has also repeatedly been observed that the accused can rely on the evidence brought on record by the complainant to rebut the presumption, and it is not necessary that he has to lead separate/direct evidence". In the present case, the accused has miserably failed to discharge the said burden. Apart from bare statement of the accused as recorded under [SECTION] [ACT] and [SECTION] [ACT] that the cheques in question were issued regarding purchase of some property, thee is not even an iota of evidence on record to prove the same. Not even the details of the said property were specified by the accused in his statements as mentioned above. Thus, averment of the accused that the cheques in question were issued regarding sale of some property and not in discharge of legal liability cannot be taken at his mere ipsi dixit. It has been held in a catena of cases that the presumptions arising under [SECTION] [ACT] and [SECTION] [ACT] can be rebutted by the accused either by way of leading his own evidence or by punching holes in the story of the complainant. In the case in hand, the accused has failed to lead any evidence in his favour in order to rebut the said presumptions. Also, he had failed to cast a shadow of doubt on the story of the complainant during cross examination of the complainant as CW-1. The complainant has stuck to his guns during his cross examination conducted on behalf of the accused.
In view of the above discussion, I am of the considered opinion that the complainant has established his case beyond reasonable doubt by proving all the ingredients under [SECTION] [ACT] by leading cogent evidence. The accused [ENTITY] is hereby convicted for offence punishable under [SECTION] [ACT].
7. Feeling aggrieved of the impugned judgment and order, the appellant has preferred the present appeal with the following prayer: -
(a) Call for the trial court record and set aside the judgment dated 26.11.2015 and order on the point of sentence dated 28.11.2015 passed by Ms. [ENTITY], MM, Saket Courts, New Delhi, and allow the appeal and pass an order for acquittal of appellant.
(b) Any other/further orders to which the appellant is entitled to in the fact and circumstances of the case, in the interest of justice.
8. I have heard counsel for the parties and have gone through the record of the [CASE NUMBER] entitled [ENTITY] v. [ENTITY], decided by the learned Magistrate.
9. Having drawn my attention on the contents of the application, the impugned judgment dated 26.11.2015 and impugned order on sentence dated 28.11.2015 and the record of [CASE NUMBER], decided by the learned Metropolitan Magistrate, it is submitted by counsel for the appellant that the impugned judgment suffers from illegality and has been passed without application of mind, therefore, the same be reversed. It is further submitted that learned trial court failed to appreciate the fact that the complainant has miserably failed to disclose the date of providing alleged loan to the appellant/accused. It is further submitted that the cheques in question were issued regarding the sale of some property and not in discharge of legal liability cannot be taken at his mere ipsi dixit.
10. Per contra, the learned counsel for the respondent submitted that the appellant has not been able to prove any of his defence on record before learned Trial court.
11. I have given my thoughtful consideration to the submissions made on behalf of the parties.
12. As mentioned above, the appellant has been convicted for having committed an offence under [SECTION] of the [ACT]. It is well settled that a complaint under [SECTION] of the [ACT] must contain the following ingredients, viz., (i) that there is a legally enforceable debt; (ii) that the cheque was given from the account of bank for discharge in whole or in part of any debt or other liability which pre-supposes a legally enforceable debt; (iii) cheque so issued had been returned due to insufficiency of funds.
13. Admittedly, the accused had issued the two cheques in question to the complainant. Admittedly, these cheques were signed by the accused.
14. Under [SECTION] of the [ACT] there is a presumption that cheques were issued by the drawer in discharge of any debt or liability owned by him to its holder. Once the cheques are issued by the drawer a presumption under [SECTION] [ACT] must follow. This presumption is a rebuttable presumption since, the accused issuing the cheque is at liberty to prove to the contrary.
15. The complainant had presented these two cheques for encashment. However, these cheques were returned dishonoured with the remarks of "FUNDS INSUFFICIENT". The complainant has produced and proved the original cheques (Ex. PW1/1), Cheque Return Memos (Ex. PW1/B), legal notice (Ex. PW1/C) and postal receipts (Ex. PW1/D, Ex. PW1/E and Ex. PW1/F).
16. Once a cheque is dishonoured and returned by the bank unsatisfied, the next mandatory step required for successful prosecution offence under [SECTION] of the [ACT], if the aggrieved is interested, is to issue notice of demand under [SECTION] of the [ACT]. If the drawer pays the amount of cheque within stipulated period after receipt of notice, then no offence shall be made out. Failure to pay the cheque amount despite service of notice invites the risk of prosecution and to initiate the criminal proceedings.
17. It is the case of the complainant that he had served a legal notice through his counsel on 03.06.2013 through registered post, speed post and courier service which were duly received by the accused. The complainant had also produced and proved copy of legal notice (Ex. PW1/C), registered AD, speed post and courier receipt (Ex. PW1/D, Ex. PW1/E and Ex. PW1/F).
18. At the time of framing of notice under [SECTION] [ACT], the accused had not denied receiving of statutory notice. During the recording of statement under [SECTION] [ACT], the accused had not denied the receiving of legal notice. During the cross-examination of complainant also, the accused had nowhere controverted the fact of receiving statutory notice.
19. Even otherwise, the accused has not disputed that the statutory notice was not dispatched on his correct address thereon. Track report of sending of statutory notice through courier service also reveals that the shipment was delivered to the accused. Track report of sending of statutory notice through speed post also reveals that the item was delivered at the accused's address. [SECTION] of [ACT] creates statutory presumption to the effect that if the letter is properly addressed, it must be deemed to have been served. It is, therefore, presumed that the statutory notice was duly served on the accused.
20. The main ground raised on behalf of the appellant to assail the impugned judgment is that the complainant had nowhere mentioned the date on which the loan was advance to the accused. The defence set up by the accused at the time of framing of notice was that he is relative of the complainant and he had delivered the cheques to the complainant towards the purchase of plot for which he stood as a guarantor and the cheques had been misused and presented. In the cross- examination of the complainant, a question was put to him which he admitted that the accused was his brother-in-law. Where relations between the parties are such close, sometimes, the person may not remember the exact date on which the loan was advanced. The accused has not produced any evidence to prove the defence made by him at the stage of framing of notice that the cheques were given towards the purchase of plot. The accused has also failed to produce any evidence to prove that there was any transaction of purchase of plot.
21. Another contention raised on behalf of the accused is that the payee name and date in the cheque bearing no. 121879 for Rs. 2,00,000/- was not filled by the appellant, whereas in the cheque no. 121880 for Rs. 1,50,000/-, was issued as blank signed only as the name, date and amount was not filled by appellant/accused. The cheques have been misused by the complainant for his unlawful gain by filling/writing on the same. Under [SECTION] of the [ACT], there is a presumption regarding endorsement for consideration. For the offence under [SECTION] of the [ACT], the presumption under [SECTION] and [SECTION] have to be compulsorily raised as soon as execution of cheque by accused is admitted and thereafter, burden is shifted to accused to prove otherwise. These presumptions will live, exist and survive and shall end only when the contrary is proved by the accused. In the case in hand, admittedly, the accused had signed the cheque, so, the presumption regarding endorsement for consideration shall follow. The accused cannot be permitted to plead that since cheques were not filled in by him, these were not issued for consideration, unless he is able to prove otherwise. The accused has not rebutted the presumptions under law against him by leading any cogent evidence.
22. The learned trial court had also rightly held that the accused had failed to prove any defence to rebut the presumption in favour of the complainant in respect of the cheques in question. The learned trial court has also rightly held that the complainant had been able to prove all the ingredients related to offence punishable under [SECTION] [ACT] and, therefore, convicted the accused.
23. In the memorandum of appeal, the appellant has not stated any ground to challenge the order on sentence. In the course of arguments also, no arguments were advanced on behalf of the appellant to challenge the order on sentence.
24. In view of above discussion, I find no illegality and irregularity in the impugned judgment dated 26.11.2015 and impugned order dated 28.11.2015, passed by learned trial court. Said impugned judgment dated 26.11.2015 and impugned order dated 28.11.2015 passed by learned trial court are hereby upheld. The appeal is without merit and, therefore, dismissed.
25. The record of the complaint case No. 298/13 entitled [ENTITY] v. [ENTITY], called from the court of the learned Magistrate be sent back alongwith a copy of this judgment.
26. The appellant/convict be taken into custody and he be sent to jail to under appropriate warrants to serve the sentence. Needless to say that convict/appellant would be entitled to benefit of [SECTION] [ACT]
27. A copy of this judgment be given to convict free of cost.
28. File be consigned to the Record Room.
Pronounced in the open court (DR. [ENTITY]) on 9 of June, 2017 th ASJ/Special Judge (PC Act) (CBI) South District, Saket Courts, New Delhi