[CASE NUMBER] IN THE COURT OF Ms. NEHA GUPTA SINGH METROPOLITAN MAGISTRATE 03 (N.I. ACT) CENTRAL, TISHAZARI COURTS : DELHI Sh. [ENTITY] S/o Sh. Ram Gopal R/o 451, Gali no. 17 B, B Block, Main Market, Sant Nagar, Burari, Delhi- 110084 COMPLAINANT Versus Smt. [ENTITY] W/o Sh. Pratap Singh R/o 451, Gali no. 17 B, B Block, Main Market, Sant Nagar, Burari, Delhi- 110084 ACCUSED Case Number. : 522/13 Date of Institution. : 20.08.2011 Offence Complained Of. : U/[SECTION] [ACT] Plea of the Accused. : Not Guilty Arguments Heard On. : 26.05.2016 Page 1 of 10 [CASE NUMBER] Final Order. : Accused is convicted of offence under [SECTION] [ACT]. Date of Judgment : 06.06.2016 JUDGMENT
1. The factual backdrop leading to filing of present complaint is that accused had friendly relations with the complainant and she approached the complainant in the month of September 2009 to grant her a friendly loan of Rs. 75000 for period of few months. Complainant advanced the loan. Accused did not pay the loan amount within stipulated period. Accused in discharge of legal liability issued cheque bearing no. 013481 dated 17.01.2011 for sum of Rs 75000 drawn on Kangra Co operative Bank Ltd., Sant Nagar, Burari.
2. The aforestated cheque was presented by the complainant for encashment to his bank ie. Canara Bank, Sant Nagar, Burari. The cheque was returned back dishonored vide return memo dated 09.06.2011 with reason "funds insufficient". Complainant thereafter gave legal demand notice to the accused on 6.07.2011 calling upon her to make payment within 15 days from notice. The said notice was sent by the Registered AD. Despite the service the accused did not make the payment within stipulated period, hence present complaint was filed under [SECTION] of [ACT]).
3. Complaint was perused and cognizance of the offence was taken by the Ld. Predecessor. Complainant tendered pre summoning evidence by way of affidavit Ex.CW1/A and relied on
a) original cheque bearing number 013481 Ex.CW1/1
b) bank return memo for cheque no. 013481 dated 9.06.2011
c) legal demand notice dated 06.07.2011 Ex.CW1/3
d) AD receipt dated 06.07.2011 Ex. CW1/4A
e) AD Card EX. CW1/4.
4. Accused was admitted on bail and notice under [SECTION] [ACT] was framed against the accused on 18.11.2013. To which she pleaded not guilty and claim trial. Defence as disclosed by the notice to accused is that cheque in question was issued by the accused as blank signed cheque to the complainant as security. She do not remember whether she has received legal demand notice. She had taken loan of Rs. 10000 from the complainant, which she has repaid and at the time of taking loan she had given two blank signed cheques to the complainant. The cheque in question is one of the said cheques.
5. Accused made an application under [SECTION]. Application was allowed and accused was given opportunity to cross examine the complainant. Accused did not cross examine the complainant despite six adjournments and opportunities. Her right to cross examine the complainant was closed on 27.05.2015.
6. Complainant evidence was closed and the accused was examined under [SECTION] [ACT]. All the incriminating evidence were put to her in vernacular and accused stated that cheque in question was issued by the accused as blank signed cheque to the complainant as security. She has not received legal demand notice, however address on the notice is hers. She had taken loan of Rs. 10000 from the complainant in year 2009, which she has repaid in 2010 in installments. Complainant is her tenant and she has no liability towards him.
7. No defense evidence was led by the accused and matter wasfixed for final arguments.
8. Final arguments were advanced by the counsel for the parties. It was argued for the complainant that that accused had friendly relations with the complainant and she approached the complainant in the month of September 2009 to grant him a friendly loan of Rs. 75000 for period of few months. Accused did not pay the loan amount within stipulated period. Accused in discharge of legal liability issued cheque bearing no. 013481 dated 17.01.2011 for sum of Rs 75000 drawn on Kangra Co operative Bank Ltd., Sant Nagar, Burari.
9. The aforestated cheque was presented by the complainant for encashment to his bank ie. Canara Bank, Sant Nagar, Burari. The cheque was returned back dishonored vide return memo dated 09.06.2011 with reason "funds insufficient". Complainant thereafter gave legal demand notice to the accused on 6.07.2011 calling upon her to make payment within 15 days from notice. The said notice was sent by the Registered AD. Despite the service the accused did not make the payment within stipulated period.
10. Per contra it is argued by the counsel for the accused that there was no need to take loan from the complainant. Blank cheque was given as security for loan of Rs. 10000 which is repaid. Legal demand notice was never served on the accused. complainant has not given any specific date of loan neither any friendly relation is shown between the parties.
11. I have heard the complainant and accused and have perused the record. Both the parties did not wish to file written arguments.
12. 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.
13. 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.
g) Complaint was filed in writing within one month of the date on which cause of action arised.
14. 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])
15. Now I shall discuss components of offence in light of facts and circumstances of present case
16.Issuance of cheque
17. Admittedly cheque in question was issued by the accused after duly signing the same to the complainant. It is the stand of the accused that cheque was given in blank and was a security for loan of Rs. 10000. In this regard [SECTION] [ACT] is very clear that if a person gives duly signed but blank or partly written cheque then he deem to have given implied authority to the holder to fill up the particulars in it and complete it and thus make him liable for the payment mentioned in it. As for security cheque it was held in ICD vs. Beena Shabir and Anrs. 2002(6) SCC 426 by Hon'ble Supreme Court that the security cheques also would fall within the purview of the [SECTION] of the [ACT] and a person could not escape his liability.
18.Cheque was present to bank for payment and it was returned back unpaid.
The aforestated cheque was presented by the complainant for encashment to his bank ie. Canara Bank, Sant Nagar, Burari. The cheque was returned back dishonored vide return memo dated 09.06.2011 with reason "funds insufficient".
19.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. CW1/3 was sent on 6.7.2011 by registered AD to the accused. Registered AD card Ex.CW1/4 was returned back received. Receipt of legal demand notice is denied by the accused. However, she 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 her, moreover she 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.
20.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 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].
21. In the present case, no defense evidence is led by the accused.
She has stated that she took loan of Rs. 10000 only. However no evidence is brought on record to prove this fact. Accused has failed to rebut the presumption raised in favor of the complainant.
22. Accordingly, in light of above discussion accused is found guilty of the offence. Accused [ENTITY] is convicted for offence under [SECTION] [ACT].
Announced in the open court on 06.06.2016 [ENTITY] [ACT] Certified that this judgment contains 10 pages and each page bears my signature.
[ENTITY] [ACT]