IN THE COURT OF MS. AMRITA TONK, METROPOLITAN MAGISTRATE (NI ACT)-1, CENTRAL: ROOM NO.337, TIS HAZARI COURT COMPLEX, DELHI [ENTITY] VERSUS [ENTITY] JUDGMENT
Part A - The lis at a glance A. Serial No. of the Case: 535236/16 B. Date of Institution: 16.05.2007 C. Name of the Complainant: [ENTITY], S/o Late Sh. [ENTITY], R/o WZ-276/17, Ground Floor, Inder Puri, Delhi-110012.
D. Name of Accused: [ENTITY], S/o Sh.
[ENTITY], R/o EA-1/1, First Floor, Inderpuri, Delhi-110012.
Also at WZ-71B, Naraina, New Delhi-110028 E. Offence complained of: Dishonor of cheque - culpable u/[SECTION] of the [ACT].
F. Plea of the accused : Pleaded not guilty. G. Final Order: Convicted H. Judgment reserved on: 07.03.2017 I. Judgment pronounced on: 24.03.2017
Part B - A brief statement of reasons for the decision (As mandated u/[SECTION] of the [ACT].) [ENTITY] VERSUS [ENTITY]
1. This judgment shall decide upon the complaint filed by Sh. [ENTITY] (hereinafter referred to as the 'Complainant') under [SECTION], [ACT], (hereinafter referred to as the 'the [ACT]') against Sh. [ENTITY] (hereinafter referred to as the 'Accused').
2. The case of the Complainant, in brief, is that the Accused, who is a relative of the Complainant and is engaged in the business of property dealing had lured the Complainant and procured his hard earned money and after persuasion had agreed to repay the same to the Complainant. The Accused in discharge of his legal liability issued cheque bearing number 991161 dated 06.11.2006 for an amount of Rs. 1,90,000/-drawn State Bank of India, Naraina, New Delhi (hereinafter referred to as the 'cheques in question') in favor of the Complainant. The Complainant presented the said cheques in his bank but the cheques in question was dishonoured with the remarks "funds insufficient" vide bank returning memo dated 08.11.2006 and 22.02.2007. Thereafter, the Complainant sent a legal demand notice dated 21.03.2007 to the Accused, but Accused failed to make the payment of dishonoured cheque within the statutory period of fifteen days. Hence, the Complainant filed the present complaint.
3. In his pre-summoning evidence, the complainant has tendered his affidavit Ex. CW-1 in lieu of examination in chief corroborating the averments in his complaint. He reiterated the contents of complaint and placed on record original cheque bearing number 991161 dated 06.11.2006 for an amount of Rs. 1,90,000/-, drawn on State Bank of India, Naraina, New Delhi as Ex.CW-1/A, cheque returning memos dated 22.02.2007 and 08.11.2006 as Ex.CW1/B ([ENTITY]), legal demand notice dated 21.03.2007 as Ex. CW1/C, postal receipt and courier reciept as Ex.CW1/D ([ENTITY]) and reply to the legal demand notice as Ex. CW1/E. [ENTITY] VERSUS [ENTITY]
4. Accused was summoned by Sh. [ENTITY], the then Ld. MM for the offence punishable u/[SECTION] of [ACT] and the notice u/[SECTION] [ACT] was served upon the Accused to which he pleaded not guilty and claimed trial.
5. An opportunity was granted to the Accused to file the application u/[SECTION] [ACT]. However, the Accused failed to file the application. A perusal of the record reflects that the Accused had moved an application on 28.04.2011 bearing the heading 'application on behalf of the Accused for permission to cross examine the Complainant', however from the contents of the said application it is evident that by way of the application, the Accused had sought direction to the Complainant to produce documents and supply copy to the Accused. The said application was dismissed by the then Ld. MM on the same date. Thereafter, the matter was listed for defence evidence. The Accused had raised objections as regards the dismissal of the application dated 28.04.2011 and the then LD. MM, Sh. [ENTITY] had dealt with the contentions of the Ld. Counsel for the Accused in a detailed order and had held that since no application u/[SECTION] had been filed by the Accused after framing of notice, the matter could not have been listed for cross examination of the Complainant.
6. The Accused thereafter lead DE and examined himself as DW2. He deposed that he had issued the cheque in question as bayana for transaction of sale/purchase of property between the wife of the Complainant and one [ENTITY], who was the purchaser of the property. He stated that he was a broker in the transaction and the total sale consideration was Rs. 24,00,000/- out of which the total earnest money was Rs. 2,40,000/-. He deposed that he had issued a cheque of Rs. 50,000/- and for the remaining amount he had issued the cheque in question. He deposed that the transaction was complete and the sale deed was also duly registered and an amount of Rs. 23,50,000/- was paid in cash to the Complainant. DW2 has relied upon the photocopy of the sale deed as Mark DW2/A and the copy of the bayana [ENTITY] VERSUS [ENTITY] receipt Mark DW2/B. He also relied upon his passbook Ex. DW2/1 to establish the factum of having issued the cheque of Rs. 50,000/- to the Complainant. Thereafter, DW2 was cross-examined by Ld. Counsel for the Complainant. The Accused at the stage of DE moved an application u/[SECTION] [ACT] on 20.01.2014 and the same was dismissed by the Ld. Predecessor since the matter was at the stage of defence evidence and the Accused had already been examined in part. The Ld. Predecessor also observed that considerable delay had been caused in the matter as repeated opportunities had been taken by the Accused to conclude defence evidence. The Accused was however gratned an opportunity to lead further DE and had been directed to take steps for summoning of the witnesses. The witness from the Sub registrar's office was summoned, however, the Accused failed ot appear in Court and thus the witness was discharged unexamined. In the interest of justice, the Accused was granted opportunity to lead further DE but he failed to take steps for leading further DE despite being given several effective opportunities and imposition of cost and thereafter, DE was closed.
7. In his statement recorded u/[SECTION] [ACT], the Accused denied his liability towards the Complainant. He admitted his signatures on the cheque as well as filling in the particulars in the same. He stated that he had issued the cheque in question as token money. He also admitted receipt of the legal notice. He stated that he had purchased a property from the wife of the Complainant and had entered into an agreement to sell. A bayana receipt was executed and the same was signed by the wife of the complainant and witnesses [ENTITY] and [ENTITY]. He further stated that the cheque in queston had been issued at the time of execution of the bayana receipt along with another cheque of Rs. 50,000/-. The Accused stated that he had further sold the property to [ENTITY] and made a profit of Rs. 2,00,000/- and had thereafter, paid an amount of Rs. 24,00,000/- to the Complainant. At this stage it is pertinent to mention that the evidence in the present matter has not been recorded in a summary manner, but it has been [ENTITY] VERSUS [ENTITY] recorded in full with examination and cross-examination of the witnesses. In light of the judgment of Hon'ble Supreme Court in [PRECEDENT], this Court is inclined to rely on the evidence, which has been recorded by the learned Predecessor.
8. Final arguments were addressed by the respective Counsels of both the parties. Ld. Counsel for the Complainant submitted that the Accused has admitted issuance of the cheque in question to the Complainant and has failed to bring on record any evidence to prove his plea of defence. Ld. Counsel for the Complainant has submitted that the Accused has failed to rebut the presumptions arisen in favor of the Complainant. On the other hand, Ld. Counsel for the Accused has argued that the cheque in question had been issued towards token money and that the Accused did not have any liability towards the Complainant. He has submitted that out of the total sale consideration an amount of Rs. 50,000/- was paid by way of cheque as is reflected in Ex. DW2/1 and the remaining amount of Rs. 23,50,000/- was paid in cash to the Complainant.
9. I have heard the submissions and have carefully perused the record. For properly appreciating the facts of the case and submissions of both the parties, a reference is necessary to the relevant statutory provisions. The following are the essential ingredients for constituting the offence under [SECTION] [ACT]:
Person must have drawn a cheque on an account maintained by him in a bank for payment of certain amount of money to another person from out of that account;
The cheque should have been issued for discharge, in whole or in part, of any debt or other liability;
That cheque has been presented to the bank within a period of six months from the date of which it is drawn or within the period of its validity whichever is earlier;
[ENTITY] VERSUS [ENTITY] 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; 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 30 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;
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.
It is only when all of the above-mentioned ingredients are satisfied that the person who had drawn the cheque can be convicted for having committed an offence under [SECTION] of the [ACT].
10. The Act raises two presumptions in favour of the holder of the cheque i.e. the Complainant in the present case; firstly, in regard to the passing of consideration as contained in [SECTION] and, secondly, a presumption that the holder of cheque received the cheque of the nature referred to in [SECTION], for discharge in whole or in part, of any debt or other liability. For the offence under [SECTION] of the Act, the presumptions under [SECTION] and [SECTION] have to be compulsory raised as soon as execution of cheque by accused is admitted or proved by the complainant and thereafter burden is shifted to accused to prove otherwise. These presumptions shall end only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability etc. A presumption is not in itself evidence but only makes a prima facie case for a party for whose benefit it exists. The presumptions under [ENTITY] VERSUS [ENTITY] section 118 and 138 are rebuttable in nature as held [PRECEDENT].
[SECTION] and [SECTION] of the Act read as under:
[SECTION]. Presumption as to Negotiable Instruments: - Until the contrary is proved, the following presumptions shall be made:-
(a) of consideration- that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transfered, was accepted, indorsed, negotiated or transferred for consideration;
[SECTION]. Presumption in favour of holder:- It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in [SECTION], for the discharge in whole or in part, of any debt or other liability.
11. Issuance of the Cheque in question - The Accused has admitted his signa- tures on the cheque as well as filling in the particulars in the same. He has also ad- mitted that the cheque in question was issued to the Complainant.
12. Presentation of the Cheque for payment and the same being returned un- paid- The cheque in question had been presented for payment by the Complainant twice and the same was returned back unpaid for the reason "funds insufficent" on both the occasions. The Complainant has placed on record the return memos Ex. CW1/B ([ENTITY]). The dishonor memos have not been disputed by the Accused.
[ENTITY] VERSUS [ENTITY]
13. Legal demand notice to be sent within 30 days of return of cheque and failure on the part of the Accused to make the payment within fifteen days of receipt of legal demand notice - As per the evidence on record, the communica- tion of dishonor of the cheque in question was given to the Accused by the Com- plainant vide legal demand notice dated 21.03.2007. The notice has been given within the stipulated period and the Accused has admitted receipt of the same as well as sending a reply to the legal notice.
14. Legally enforceable debt or liability- The Complainant has deposed that he had been lured by the Accused to invest his hard earned money and had cheated him and thereafter, after much persuasion by the Complainant, the Accused had issued the cheque in question to him towards repayment of the amount. The Hon'ble Supreme Court in [PRECEDENT] observed:
"Once the cheque relates to the account of the accused and he accepts and admits the signatures on the said cheque, then initial presumption as contemplated under [SECTION] of the [ACT] has to be raised by the Court in favour of the complainant."
In the case of [PRECEDENT] the Hon'ble Supreme Court has observed as follows -
"Therefore, if the accused is able to establish a probable defence which creates doubt about the existence of a legally enforceable debt or liability, the prosecution can fail. The accused can rely on the materials submitted by the complainant in order to raise such a defence and it is inconceivable that in some cases the accused may not need to adduce the evidence of his/her own. If however, the accused/drawer of a cheque [ENTITY] VERSUS [ENTITY] in question neither raises a probable defence nor able to contest existence of a legally enforceable debt or liability, obviously statutory presumption under [SECTION] of the [ACT] regarding commission of the offence comes into play if the same is not rebutted with regard to the materials submitted by the complainant".
In the present case, since the issuance of the cheque and the signatures on the same have been admitted by the Accused, the presumption under [SECTION] [ACT] comes into picture. Thus, the burden was upon the Accused to disprove the existence of legal liability. The Accused has taken a plea that the cheque in question had been issued towards token amount at the time of execution of the bayana receipt between him and the wife of the Complainant in the presence of the Complainant and [ENTITY]. In support of his plea, the Accused has relied upon photocopy of the bayana receipt Mark DW2/B. DW2 during his deposition has stated that the original bayana receipt was destroyed by wife of the complainant at the time of the registration of the sale deed. Assuming the same to be true, the Accused could have proved the same by examining [ENTITY], the alleged purchaser of the property. However, the Accused despite being given several effective opportunities had failed to file the fresh address of the witness [ENTITY]. In the absence of [ENTITY], the Accused had the option examine [ENTITY], who as stated by the Accused in his statement u/[SECTION] [ACT] was a witness to the execution of the bayana receipt. However, the Accused chose not to examine him as a defence witness. Further, the photocopy of the sale deed Mark DW2/A has also not been proved by the Accused. A perusal of the reply to the legal demand notice reflects that the name of [ENTITY], the alleged purchaser of the property has not been mentioned by the Accused anywhere in the reply. It is also important to note that the Accused during his cross examination had admitted that prior to issuance of the cheque in question, he was liable to pay an amount of Rs. 1,90,000/- to the Complainant. The Accused has also admitted that he had not filed any police complaint regarding misuse of the cheque in question by the Complainant.
[ENTITY] VERSUS [ENTITY] Although, he stated that he had issued 'stop payment' instructions to his bank, however, nothing has been brought on record to substantiate the same. Any prudent person faced with a similar situation would have taken some steps for recovery of the cheque either by reporting the same to the police, or by approaching a court of law or would have informed his bank regarding the same.
15. In the present case, the presumption of legal liability under [SECTION] and [SECTION] of the [ACT] has remained un-rebutted as the Accused has failed to put up a plausible defence. The Complainant has fulfilled the basic ingredients of [SECTION] of the Act and therefore, the Accused stands convicted for the offence under [SECTION] of [ACT].
16. Let the accused be heard on point of sentence. Copy of this judgment be given to the convict free of cost.
* Announced in the open court.
([ENTITY]) MM -([ACT])-Central-01/THC/Delhi 24.03.2017 [ENTITY] VERSUS [ENTITY]