IN THE COURT OF METROPOLITAN MAGISTRATE, KARKARDOOMA COURTS, DELHI. Presided by: Sh. [ENTITY] [CASE NUMBER] PS: Shakarpur Shri [ENTITY] S/o Late [ENTITY] R/o A-46/1, Gali No.1, North Vinod Nagar, Delhi-110092 Complainant VERSUS Shri [ENTITY] S/o Shri [ENTITY] R/o H.N. 73/A, Rajendra Nagar Industrial Area, Village/Town: Lajpat Nagar, P.S. Sahibabad, Ghaziabad(UP)-201005. Accused Complaint under [SECTION] of the [ACT] Offence complained of : U/[SECTION] [ACT] Date of commission of offence : On expiration of 15 days from the date of service of statutory notice (sent on 20.01.2017) Plea of Accused : Not guilty Date of decision of the case : 12.12.2019 Final Order : Conviction [CASE NUMBER] [ENTITY] v [ENTITY] 1 JUDGMENT
STATEMENT OF FACTS AND REASONS FOR DECISION
1. The accused is facing trial for commission of offence punishable u/[SECTION] of The [ACT] (in short, [ACT]).
2. Facts in brief:
As per complaint, the complainant and the accused were working in MTNL, Laxmi Nagar Branch, Delhi-110092. They were in friendly relation. In first week of July 2016, the accused approached the complainant for friendly loan of Rs. 50,000/- (Rupees Fifty Thousand only). Accordingly, the complainant paid Rs.50,000/- in cash to the accused on 06.07.2016. The accused issued a postdated cheque bearing No.908206 dated 02.01.2017, in sum of Rs. 50,000/- (Rupees Fifty Thousand only), drawn on Karnataka Bank Ltd. Laxmi Nagar Branch, Delhi-110092 (subject matter cheque) and promised to the complaint to pay monthly interest @ 3%. He further assured the complainant to return the loan amount by 30.09.2016. He issued acknowledgement in his own hand writing on photocopy of his PAN Card No. ACIPH9327D. He also handed over to the complainant self-attested copy of his Voter ID Card No. FVX5820683. The accused neither paid interest nor returned the principal loan amount to the complainant. On 02.01.2017, the complainant presented the aforesaid cheque for collection in his bank i.e. Bank of India, Vikas Marg Branch, A-45/46, Laxmi Nagar Shakarpur Chowk, Delhi-110092.
The cheque was dishonored and returned unpaid to the complainant with endorsement "Funds Insufficient" vide cheque return memo dated 04.01.2017. After receiving the cheque return memo, the complainant sent [CASE NUMBER] [ENTITY] v [ENTITY] 2 legal demand notice dated 20.01.2017 to the accused by registered post advising him to pay the amount of the cheque within 15 days of the receipt of the notice. The registered post was returned to the complainant with remark "Addressee not found in spite of repeated visits" and hence the summon was deemed served. The accused did not pay the cheque amount even after expiry of statutory period of 15 days from the date of service of notice. Since accused did not make payment to discharge his liability, the complainant filed the instant complaint.
3. Vide order dated 23.02.2017, cognizance of the offence u/[SECTION] [ACT] was taken by Ld. Predecessor court and the accused was summoned.
The accused put up his appearance before the court on 25.04.2017. At joint request of the parties, the matter was referred for mediation. However, the matter could not be settled in mediation.
4. Vide order dated 16.08.2017, Notice u/[SECTION] of [ACT] (in short, "[ACT]") was served upon accused. The accused did not plead guilty and claimed trial.
An application u/[SECTION] [ACT] was moved on behalf of accused seeking permission to cross-examine the complainant witnesses. Vide order dated 16.04.2018, the application was allowed and the matter was listed for complainant's evidence (in short "C.E.").
5. The only witness examined on behalf of the complainant was complainant himself.
To substantiate his case, the complainant adduced his evidence by way of affidavit Ex. CW1/1. The complainant was examined as CW-1. The [CASE NUMBER] [ENTITY] v [ENTITY] 3 complainant reiterated the facts mentioned in the complaint. He relied upon the following documents in support of his averments:
a. Copy of his Passbook bearing A/c No.605310100003010 Ex. CW1/A, b. Copy of his voter ID Card bearing No. DL/04/039/000480 Ex. CW1/B, c. Original cheque No.908206 dated 02.01.2017, Ex. CW1/C, d. Receipt of acknowledgement of loan by the accused Ex. CW1/D, e. Self-attested copy of voter identity card of the accused Ex. CW1/E, f. Cheque return memo dated 04.01.2017 Ex. CW 1/F, g. Legal demand notice dated 20.01.2017, Ex. CW 1/G, h. Postal receipt Ex. CW1 /H and i. Returned registered post envelope addressed to the accused Ex. CW1/I. The witness was cross-examined on behalf of accused. Vide order dated 28.9.2018, CE was closed and matter was listed for examination of accused u/[SECTION] of [ACT].
6. On 17.05.2019, the accused was examined u/[SECTION]/[SECTION] of [ACT]. The accused stated that he had taken loan of Rs.50,000/-(Fifty thousand only) from the complainant in the month of July, 2016 and had returned the complete loan amount to the complainant in installments by 30.09.2016. He denied receipt of legal demand notice.
The accused expressed his willingness to lead defence evidence. Hence the matter was listed for Defence Evidence (in short 'DE').
[CASE NUMBER] [ENTITY] v [ENTITY] 4
7. The accused examined himself as defence witness u/[SECTION] of [ACT] He was examined as DW1.
Vide order dated 03.12.2019, DE was closed and matter was listed for final arguments.
8. I heard arguments on behalf of both the parties.
To prove his case, Ld. Counsel for complainant emphasized that the cheque in question had been issued by the accused in discharge of his legal liability and all the ingredients of offence u/[SECTION] of [ACT] are full filled in the instant case. Ld. Counsel further emphasized that the accused failed to rebut the statutory presumption in favour of the complainant.
On the other hand, Ld. Defence counsel led emphasis on the following facts to seek acquittal of accused:
a. The accused had not issued the cheque for discharge of any liability. He had given blank signed cheque to the complainant as security cheque.
b. Particulars of the cheque except signature are not in the handwriting of the accused.
c. The accused had not received the legal demand notice.
9. Since accused is facing trial for commission of offence punishable u/[SECTION] of [ACT], it is necessary to discuss the essential ingredients of the offence.
In [PRECEDENT], Hon'ble Supreme Court has noted:
"9. It is manifest that to constitute an offence under [SECTION] of the Act, the following ingredients are required to be [CASE NUMBER] [ENTITY] v [ENTITY] 5 fulfilled:
(i) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account;
(ii) The cheque should have been issued for the discharge, in whole or in part, of any debt or other liability;
(iii) that cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier;
(iv) that cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the 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 the bank;
(v) the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;
(vi) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice;
10. Being cumulative, it is only when all the aforementioned ingredients are satisfied that the person who had drawn the cheque can be deemed to have committed an offence under [SECTION] of the Act."
The above proposition was reiterated by Hon'ble Supreme Court in [CASE NUMBER] [ENTITY] v [ENTITY] 6 Aparna A. Shah v M/S Sheth Developers P. Ltd. & Anr, Crl. Appeal No. 813 of 2013.
10. Adverting to the facts of the case, in notice u/[SECTION] [ACT] the accused admitted his signature on the cheque in question. He also admitted that the cheque pertained to his account. However, he denied that the details of the cheque were in his hand writing. Factum of dishonor of the cheque is not in dispute. It is also not in dispute that the cheque was presented within statutory period. Dispatch of legal notice within statutory time limit is also not in dispute. Institution of the complaint within limitation is also not in dispute. However, the accused has denied receipt of legal notice.
Thus, the basic questions for determination are:
a) Whether the accused had received the legal notice?
b) Whether the accused had issued the cheque in discharge of debt or legal liability?
11. So far as receipt of legal notice by the accused is concerned, statutory presumptions lie in favour of the complainant. In [PRECEDENT], Hon'ble Supreme Court held:
"[SECTION] gives rise to a presumption that service of notice has been effected when it is sent to the correct address by registered post."
xxx xxx xxx "In our opinion, therefore, when the notice is sent by registered post by correctly addressing the drawer of the [CASE NUMBER] [ENTITY] v [ENTITY] 7 cheque, the mandatory requirement of issue of notice in terms of [SECTION] of the Act stands complied with."
xxx xxx xxx "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 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 the instant case, the legal notice had been sent by registered post vide postal receipt Ex.CW1/H at address of the accused.
It is not the defence of the accused that he was never residing on the address mentioned in the legal notice Ex. CW1/G or the address mentioned in the legal notice is incorrect address. In fact, the accused has admitted the correctness of his address. During cross-examination as defence witness, the accused has stated that: "The copy of Voter ID card Ex. CW1/E is copy of my Voter ID card. The address mentioned in Ex. CW1/E is my address. The address mentioned in legal notice Ex. CW1/G is my address. I had [CASE NUMBER] [ENTITY] v [ENTITY] 8 received summon of the court on the same address mentioned in legal notice Ex. CW1/G".
In view of statutory presumption u/[SECTION] of the [ACT] and [SECTION] of the [ACT], the requirement of service of notice u/[SECTION] of [ACT] stands complied.
12. The plea of accused that particulars of the cheque in question had not been filled up by him is not of much help in view of admitted signature of the accused on the cheque in question. A person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability.
In [PRECEDENT], Hon'ble Supreme Court has observed:
"37. A meaningful reading of the provisions of the [ACT] including, in particular, [SECTION], [SECTION] and [SECTION], makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of [SECTION] would be attracted.
38. If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not [CASE NUMBER] [ENTITY] v [ENTITY] 9 invalidate the cheque. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence."
In [PRECEDENT], Hon'ble High Court of Delhi held:
"[SECTION] [ACT] talks of "inchoate stamped instruments"
and states that if a person signs and delivers a paper stamped in accordance with the law and "either wholly blank or have written thereon an incomplete negotiable instrument" such person thereby gives prima facie authority to the holder thereof "to make or complete as the case may be upon it, a negotiable instrument for any amount specified therein and not exceeding the amount covered by the stamp."
xxx xxx xxx "A collective reading of the above provisions shows that even under the scheme of the [ACT] it is possible for the drawer of a cheque to give a blank cheque signed by him to the payee and consent either impliedly or expressly to the said cheque being filled up at a subsequent point in time and presented for payment by the drawee. There is no provision in the [ACT] which either defines the difference in the handwriting or the ink pertaining to the material particulars filled up in comparison with the signature thereon as constituting a 'material alteration' for the purposes of [SECTION] [ACT]. What however is essential is that the cheque must have been signed by the drawer."
13. In [PRECEDENT] (decided on 19 September, 2016), Hon'ble [CASE NUMBER] [ENTITY] v [ENTITY] 10 Supreme Court discussed the issue of security cheque. It was held that dishonour of cheque being for discharge of existing liability is covered by [SECTION] of the Act.
In [PRECEDENT] (date of decision 14.05.2015), Hon'ble High Court of Delhi observed:
"59. Thus, when one party gives a security to the other, implicit in the said transaction is the understanding that in case of failure of the principal obligation, the security may be enforced.
61. Thus, in my view, it makes no difference whether, or not, there is an express understanding between the parties that the security may be enforced in the event of failure of the debtor to pay the debt or discharge other liability on the due date. Even if there is no such express agreement, the mere fact that the debtor has given a security in the form of a postdated cheque or a current cheque with the agreement that it is a security for fulfillment of an obligation to be discharged on a future date itself, is sufficient to read into the arrangement, an agreement that in case of failure of the debtor to make payment on the due date, the security cheque may be presented for payment, i.e. for recovery of the due debt. If that were not so, there would be no purpose of obtaining a security cheque from the debtor. A security cheque is issued by the debtor so that the same may be presented for payment. Otherwise, it would not be a security cheque".
14. [SECTION] of the [ACT] inter alia provides that it shall be [CASE NUMBER] [ENTITY] v [ENTITY] 11 presumed, until the contrary is proved, that every negotiable instrument was made or drawn for consideration.
[SECTION] of the [ACT] stipulates that unless the contrary is proved, it shall be presumed, that the holder of the cheque received the cheque, for the discharge of, whole or part of any debt or liability. However, the said presumptions are rebuttable in nature.
In [PRECEDENT], a three-judge bench of Apex Court observed that, [SECTION] of the [ACT] is stated to be an example of a reverse onus clause which is in tune with the legislative intent of improving the credibility of negotiable instruments.' The Hon'ble Supreme Court further observed that the offence under [SECTION] of the [ACT] is at best a regulatory offence and largely falls in the arena of a civil wrong and therefore the test of proportionality ought to guide the interpretation of the reverse onus clause. An accused may not be expected to discharge an unduly high standard of proof. A reverse onus clause requires the accused to raise a probable defence or creating doubt about the existence of a legally enforceable debt or liability for thwarting the prosecution. The standard of proof for doing so would necessarily be on the basis of "preponderance of probabilities" and not "beyond shadow of any doubt".
15. In the instant case, loan is admitted. However, the accused has taken the defence that he has already returned the loan amount. During examination as defence witness, the accused has stated that: "I had taken Rs.50,000/- (Fifty thousand only) from the complainant on interest @ 3% per month. I had given in writing to the complainant that I will return him the entire amount within three months. I returned the entire amount of [CASE NUMBER] [ENTITY] v [ENTITY] 12 Rs.50,000/- with interest to the complainant. I did not obtain any receiving of repayment from the complainant. At the time of taking money from the complainant, I had given him a security cheque as demanded by him. The cheque in question is the same cheque".
16. Reverse onus clauses impose an evidentiary burden and not a persuasive burden. In [PRECEDENT] (Supra), it was observed that: "In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden."
In the instant case, the accused has failed to bring on record any evidence in support of his defence. By mere denial, the accused can not discharge his liability.
17. On the basis of above discussed facts and law, it is held that the accused has failed to rebut the statutory presumptions in favour of the complainant. He has failed to raise a probable defence or to create doubt about the existence of a legally enforceable debt or liability. Accordingly, accused namely Shri [ENTITY] is convicted for offence punishable u/[SECTION] of [ACT].
Copy of the judgment be given to the convict free of cost.
[ENTITY] SAURABH Date: 2019.12.12 14:46:22 +0530 Announced in the open court today i.e. 12.12.2019 ([ENTITY]) Municipal Magistrate (East) Karkardooma Court, Delhi 12.12.2019 [CASE NUMBER] [ENTITY] v [ENTITY] 13