[ENTITY] vs. [ENTITY] CC[CASE NUMBER] IN THE COURT OF MS. [ENTITY], METROPOLITAN MAGISTRATE-05 (NI ACT), DWARKA COURTS, DELHI CC No. 3291/12 (Old CC No. 1080/1/11) ID No. 02405R0333312011 Sh. [ENTITY] s/o Shri Dr. K. K. Singh, R/o House no. 3518, Sector-23, Huda Gurgaon, Haryana-120017. Complainant Versus 1. Sh. [ENTITY] Proprietor of BGM Interior and Furnishers, No. 8, Janta Market, Munirka, New Delhi-110067. 2. Smt. [ENTITY], W/o Sh. [ENTITY], (summoning declined vide order dated 02.12.2011) both r/o RZ-D-2/68, Gali no. 3, Mahavir Enclave, New Delhi-46. Accused persons Date of Institution : 02.12.2011 Offence Complained of : u/[SECTION] [ACT] Plea of Accused : Not Guilty Date of Reserving order : 12.07.2013 Date of Decision : 24.07.2013 Decision : Convicted JUDGMENT
1. The present complaint was filed by the complainant against accused no. 1 Sh. [ENTITY] and accused no. 2 Smt. [ENTITY] alleging that complainant and accused persons were known to each other since long and had good visiting terms. Complainant alleged that accused persons called him to their residence and requested for a loan [ENTITY] vs. [ENTITY] CC[CASE NUMBER] on 05.02.2011. It is stated that the complainant considered the request of accused persons favorably and granted a loan of Rs. 3,75,000/- on 15.02.2011 at their aforesaid residence.
2. It is submitted that accused no. 1 with consent of accused no. 2 issued five post-dated cheques i.e. bearing no. 914212 dated 12.04.2011 for Rs. 2 lac, bearing no. 914214 dated 15.04.2011 for Rs. 12,000/-, bearing no. 914217 dated 15.05.2011 for Rs. 1 lac, bearing no. 914219 dated 15.04.2011 for Rs. 60,000/- (hereinafter referred to as cheques in question) and cheque bearing no. 914221 dated 12.04.2011 for Rs. 3,000/- all drawn on Oriental Bank of Commerce towards discharge of their liability. It is stated that out of the aforesaid cheques, one cheque for Rs. 3000/- has been duly encashed but rest of the cheques were returned unpaid with the remarks, funds insufficient vide return memo dated 03.10.2011.
3. It is stated that accused persons were informed regarding dishonor of aforesaid four cheques and they were requested to make the payment of dishonored cheques but the accused persons failed to pay any heed to the request of the complainant. It is submitted that the accused persons had issued the above noted cheques mischievously and malafidely with the ulterior motive to not repay the cheque amount to the complainant since accused no. 1 was not having sufficient funds in his account.
[ENTITY] vs. [ENTITY] CC[CASE NUMBER]
4. It is stated that a legal notice dated 24.10.2011 was also given to the accused persons but they failed to comply or reply to the same. Complainant states that the accused persons started threatening him with dire consequences and under compelling circumstances, complainant lodged a complaint with PS Village Palam, New Delhi on the basis of which FIR No. 301/11 under [SECTION] [ACT] was registered against the accused persons.
5. Thus feeling aggrieved from the conduct of the accused persons, complainant has filed the present complaint praying that accused persons be summoned, tried and punished in accordance with [SECTION] of [ACT].
6. Pre-summoning evidence was led by the complainant on 02.12.2011. Prima facie case was made out against only accused no. 1 and accused no. 1 was summoned vide order of the same date.
7. Accused no. 1 entered appearance on 11.04.2012 through counsel and notice was framed upon the accused no. 1 on 06.07.2012 to which the accused no. 1 pleaded not guilty and claimed trial.
8. On an application filed under [SECTION] [ACT], which was allowed vide order dated 06.07.2012, accused was granted permission to cross- examine the complainant.
[ENTITY] vs. [ENTITY] CC[CASE NUMBER]
9. In post summoning complainant's evidence, complainant has entered into the witness box as CW1 and adopted his affidavit tendered at the stage of pre-summoning evidence Ex. CW1/A. CW1 also relied upon the documents exhibited at the stage of pre-summoning evidence as Ex. CW1/1 to Ex. CW1/12. Ex. CW1/1 to Ex. CW1/4 are the cheques in question, Ex. CW1/5 to Ex. CW1/8 are the return memos, Ex. CW1/9 is the legal notice, Ex. CW1/10 is the postal receipt, copy of complaint lodged by the complainant is Ex. CW1/11, copy of FIR is Ex. CW1/12. CW1 was cross-examined at length by Ld. counsel for accused.
10. Statement of accused under [SECTION] [ACT] was recorded on 17.01.2013.
11. In Defence evidence, accused examined himself as DW1, his son Sh. [ENTITY] as DW2, one Sh. [ENTITY] as DW3 and handwriting expert Sh. [ENTITY] as DW4.
12. In his deposition, DW1 stated that he has a shop in Munirka and complainant visited his shop for purchasing furniture in the year 2010-11 and had purchased furniture on 2-3 occasions. DW1 stated that he had also worked at the house of the complainant and at that time, he was facing financial difficulty and somebody told him that complainant also lends loans on interest. DW1 accordingly requested the complainant for Rs. 2 lac and complainant told him that he would get the amount arranged from one [ENTITY].
[ENTITY] vs. [ENTITY] CC[CASE NUMBER] DW1 deposed that complainant gave him a sum of Rs. 2 lac and told him that the amount has been arranged from [ENTITY].
13. DW1 further deposed that complainant had taken one cheque of Rs. 2 lac from him in the year 2011 and thereafter had taken 3 cheques towards interest @ 6 % p.a. i.e. Rs. 12,000/-. It is submitted that the cheques were given as blank signed cheques and that accused had only written the amount in the cheques and rest of the contents have been filled by the complainant. DW1 further stated that he had made a payment of Rs. 12,000/- to the complainant and one cheque of Rs. 12,000/- was returned to him by the complainant. It is further submitted that thereafter, accused paid Rs. 12,000/- four to five times to the complainant but the complainant did not return any other cheque to him. DW1 states that he was assured by the complainant that the cheques would be returned sooner or later but the same were never returned to him. It was further stated that thereafter, about 2-3 months later, accused took another loan of Rs. 1 lac from the complainant and after a gap of 7-8 days, another amount of Rs. 50,000/- was taken from the complainant.
14. Accused further stated that the first loan of Rs. 2 lac was repaid to the complainant in installments of Rs. 50,000/- and the interest of the loan of Rs. 1 lac and Rs. 50,000/- has been repaid to the complainant. It is stated that the amount of Rs. 1.5 lac has not been returned to the complainant since the [ENTITY] vs. [ENTITY] CC[CASE NUMBER] cheques were not returned to the accused by the complainant. Accused stated that he demanded the return of cheques from the complainant but the complainant threatened him and on one occasion, complainant along with his wife and 3-4 musclemen came to his shop and threatened with dire consequences. It is stated that complainant also extended threats to the accused through police officials of PS Vasant Vihar and that he had been tortured a lot by the complainant since he was made to sit for 2-3 hours at Police station on several occasions. Accused deposed that he has not received any legal notice from the complainant and that the cheques in question have been manipulated by the complainant. DW1 denied any liability towards the complainant as alleged.
15. DW2 i.e. son of the accused stated in his deposition that he was assisting his father in the running of their shop and that he was aware about the present case. DW2 stated that his father had taken Rs. 2 lac from one [ENTITY] and the same was repayable in installments @ 6 % interest i.e. Rs. 12,000/- per month was taken as interest for 4-5 months. DW2 deposed that the payment of Rs. 12,000/- was being given by 15th of each month and principal amount was paid in installment of Rs. 50,000/- on 30.04.2011, 30.05.2011, 30.06.2011 and so on. DW2 stated that his father told Mr. [ENTITY] that he would make the payment as and when he arranges some sum. DW2 deposed that he knew [ENTITY] since he was residing in their locality and [ENTITY] vs. [ENTITY] CC[CASE NUMBER] that the loan was taken by his father on 15.02.2011. DW2 deposed that the loan was arranged through the complainant who is known to his father and that his father had given 6 cheques to the complainant out of which only one cheque has been returned.
16. DW3 in his testimony deposed that he knows the accused since he has been his neighbour for past 20 years or so. DW3 stated that in the year 2011, complainant had visited the shop of the accused for buying furniture and that the accused was under some financial constraints due to which he asked for loan of Rs. 2 lac from the complainant. DW3 deposed that complainant got the loan arranged from Sh. [ENTITY] and that the loan amount was repayable with interest @ 6 % p.a. DW3 stated that accused was regularly making the payment of the interest i.e. Rs. 12,000/- by 15th of each month to the complainant. DW3 stated that accused has also paid principal amount in installments of Rs. 50,000/- by 30th of each month for four months. DW3 deposed that accused has paid interest amount in his presence several times.
17. DW4, handwriting expert, deposed that in the present case, he has examined two disputed signatures Marked as D1 and D2 (appearing on loan agreement and receipt) and compared the same with the complainant's admitted signature marked as A1 to A4 (appearing on various documents on court record). As per DW4, after careful examination of both the sets [ENTITY] vs. [ENTITY] CC[CASE NUMBER] of admitted and disputed signatures, he was of the definite opinion that the disputed signatures have been written by the writer of the admitted signatures marked as A1 to A4. DW4 also physically examined the ink of figure Rs. 60,000/- of cheque Ex. CW1/3 and he observed that the distribution of ink is irregular manner in digit '6' which indicate that it has been written by two different writing instruments/ pen. The detailed report of DW4 was tendered as Ex. DW4/1 which bears his signature at point A on each page along with his stamp.
18. Final arguments were advanced at length by Sh.
[ENTITY], Sh. [ENTITY], Sh. [ENTITY] and Sh. [ENTITY], Ld. Counsels for complainant and Sh. [ENTITY], Sh. [ENTITY] and Sh. [ENTITY], Ld. counsels for accused.
19. I have considered the submissions as advanced and perused the record carefully.
20. [SECTION], [ACT] has been enacted to lend credibility to the financial transactions. The main ingredients of the offence under [SECTION] [ACT] are:
(i) Drawing up of a cheque by the accused towards payment of an amount of money for the discharge in whole or in part of any debt or any other liability;
(ii) Return of the cheque by the bank as unpaid either because of the amount of money standing to the credit of that account is [ENTITY] vs. [ENTITY] CC[CASE NUMBER] insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank;
(iii) The drawer of the cheque fails to make the payment of the said amount of money within 15 days of the receipt of notice under [SECTION].
21. Apart from this, [SECTION] [ACT] lays down a presumption in favour of the holder of cheque in following terms, "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".
22. Thus, in cheque dishonor cases, what the courts have to consider is whether the ingredients of the offence enumerated in [SECTION] of the Act have been established and if so, whether the accused was able to rebut the statutory presumption contemplated by [SECTION] of the Act.
23. In the present case, complainant has alleged that he was having friendly relations with the accused and due to such good terms, accused had requested the complainant for a loan on 05.02.2011 and accordingly, complainant had granted a loan of Rs. 3,75,000/- to the accused on 15.02.2011.
24. Now, so far as the aspect of loan is concerned, accused had admitted that he had requested the complainant for loan [ENTITY] vs. [ENTITY] CC[CASE NUMBER] and complainant had granted the same to him.
Accused in his examination categorically states, " I was facing financial difficulty and somebody told me that complainant also lends loans on interest. I accordingly requested the complainant for Rs. 2 lac. Complainant told me that he would get the amount arranged from one [ENTITY]. Complainant gave me a sum of Rs. 2 lac Thereafter, after about 2-3 months, I took another loan of Rs. 1 lac from the complainant and after a gap of 7-8 days, another amount of Rs. 50,000/- was taken from the complainant ".
Thus, accused has clearly admitted that he had availed loan from the complainant several times. Now, Ld. Counsels for accused have argued that the loan in question was arranged from one Sh. [ENTITY] and a loan agreement in this regard was also executed on 15.02.2011 with Sh. [ENTITY] and thus, complainant is not entitled to recover the loan amount. So far as this argument is concerned, a perusal of the record shows that though accused has placed on record a copy of loan agreement dated 15.02.2011 but the same has neither been tendered in evidence nor has the complainant been confronted with the same. Since the document has not been brought forth in evidence by the accused, therefore, the same cannot be relied upon for deciding the present case.
25. Further, even if it is believed that loan amount was arranged from Sh. [ENTITY], still the entitlement of complainant cannot be denied in as much as accused has categorically admitted that he had approached and requested [ENTITY] vs. [ENTITY] CC[CASE NUMBER] the complainant for loan, that the complainant had given him the loan amount and that he was making payment directly to the complainant.
26. DW3 has also categorically stated in his examination, "The accused was under some financial constraints due to which he asked for loan of Rs. 2 lac from the complainant. Complainant got the loan arranged from Sh. [ENTITY] accused was regularly making the payment of the interest i.e. Rs. 12,000/- by 15th of each month to the complainant ".
Thus, Sh. [ENTITY] cannot be said to have any material role in the present transaction in question and entitlement of the complainant to claim the loan amount cannot be denied.
27. Ld. Counsels for accused have further challenged the case of the complainant by submitting that there were no friendly relations between the parties and thus, it has been wrongly alleged that the loan in question was a friendly loan, rather it was a business loan granted on interest @ 6%. Now, first of all, once the accused admits unequivocally that he had taken loan from the complainant, it hardly matters that the loan was friendly or not. Secondly, complainant in his cross- examination has correctly stated the address of the accused and the name of his son as [ENTITY], who appeared as DW2 before this Court. Accused has also admitted that he had visiting terms with the complainant. From the deposition of the witnesses on record, friendly relations between the parties can be clearly inferred.
[ENTITY] vs. [ENTITY] CC[CASE NUMBER]
28. Moving further, the fact that accused has not repaid the entire loan amount and thus, has subsisting liability towards the complainant is also established from his deposition.
DW1 in his deposition states, " The first loan of Rs. 2 lac was repaid to the complainant in installments of Rs. 50,000/- and the interest of the loan of Rs. 1 lac and Rs. 50,000/- has been repaid to the complainant. The amount of Rs. 1.5 lac has not been returned to the complainant since the cheques were not returned to me by the complainant ".
Thus, admittedly, a sum of Rs. 1.5 lac is still outstanding towards the complainant by the accused and so far as sum of Rs. 2 lac is concerned, apart from oral testimony, accused has not placed on record any documentary evidence to show that the sum of Rs. 2 lac has been returned to the complainant. Complainant has not admitted any payment of Rs. 2 lac made by the accused and Ld. Counsel for accused has also failed to examine complainant on this aspect. Thus, in absence of any cogent evidence on record, it is hard to believe that accused has repaid the amount of Rs. 2 lac to the complainant. Hence, the subsisting liability of the accused towards the complainant as on the date of issuance of the cheques and their presentation stands established on record.
29. Coming to the cheques in question, accused again admits that he had issued the same in favour of the complainant.
DW1 in his examination states, " Complainant had taken one cheque of Rs. 2 lac from me in the year 2011 and thereafter had taken 3 cheques towards interest @ 6% p.a. i.e. Rs. 12,000/-. The cheques were given as blank signed [ENTITY] vs. [ENTITY] CC[CASE NUMBER] cheques. I had only written the amount in the cheques and rest of the contents have been filled by the complainant ".
Thus, the fact that the cheques were given by the accused to the complainant is admitted, the fact that accused had written amount on the cheques is admitted and the fact that the cheques in question were signed by the accused is also admitted. Now, Ld. Counsels for accused have argued that the cheques in question were security cheques and since the loan amount had been repaid, therefore, the same were without consideration. However, from the deposition of the accused as quoted above, it can be clearly made out that the cheques in question were not security cheques but were issued towards discharge of liability. Further, as already observed, accused has failed to prove the payment made to the complainant as alleged and thus, it cannot be said that the cheques in question were without any consideration.
30. Accordingly, in view of the decision of Hon'ble High Court of Delhi in [PRECEDENT] and [PRECEDENT], it can be safely held that cheques were issued by the accused towards discharge of his liability with implied consent to the complainant for completing the instrument and presenting the same for encashment.
31. Ld. Counsels for accused have also argued that one of the cheques Ex. CW1/3 is forged cheque since there is a manipulation in the amount in figures on the cheque. Perusal [ENTITY] vs. [ENTITY] CC[CASE NUMBER] of the said cheque shows that it mentions a sum of sixty thousand rupees in words as well as figures. Accused has examined DW4 to prove that the figure "60,000" has been forged. However, once the amount in words written on the cheque is not disputed, certain alleged discrepancy in figure would not be of any aid to the accused since [SECTION] of [ACT] clearly states that if the amount is stated differently in figure and in words, the amount stated in words shall be the amount undertaken or ordered to be paid.
32. Further, if the complainant had actually misused the cheques of the accused, it is inexplicable as to why accused has failed to take any action against the complainant. While the complainant had got lodged an FIR against the accused i.e. Ex. CW1/12 which accused admits in his statement under [SECTION] [ACT], accused has not taken any such steps against the complainant for reasons best known to him.
Hon'ble Delhi High Court in [PRECEDENT], has held that " it was for the accused to prove if no loan was taken , why he did not write letter to complainant for return of cheque, unless accused had proved that he acted like normal businessman/prudent person entering into contract he could not have rebutted the presumption u/[SECTION] [ACT]. If no loan was given but cheques were retained, he immediately would have protested and asked cheques to be returned and if still cheques were not returned, he would have served notice upon the complainant.".
In the present case as well, accused has failed to taken any legal action against the complainant and thus, it cannot be inferred that the cheques were misused by the complainant as [ENTITY] vs. [ENTITY] CC[CASE NUMBER] alleged.
33. Ld. Counsels for accused also argue that since the complainant has failed to mention the exact date of loan, tenure of the loan and other such details, therefore, the loan transaction cannot be taken to be established on record. However, again once accused has admitted the loan transaction in question, complainant would not be required to prove each and every details of the same. In the case of [PRECEDENT], it was held that for establishing requirements in [SECTION], there is no burden on the part of the complainant to prove before the Court the entire details of the transaction resulting in issuance of cheque.
34. Ld. Counsels for accused have also pleaded bar of conduct rules and [ACT] provisions against the complainant in granting the loan in question. However, the said bars are subject matter of separate proceedings to be initiated by concerned departments and would have no bearing on decision of the present case.
35. Thus, in view of the entire observations made above, complainant has been able to establish that the cheques in question were issued by the accused towards discharge of his liability. Accused on the other hand has failed to rebut the presumptions contained in favour of the complainant under [SECTION] and [SECTION] of [ACT].
[ENTITY] vs. [ENTITY] CC[CASE NUMBER]
36. The second ingredient of the offence i.e. return of cheques as unpaid due to funds insufficient has not been disputed by the accused. Hence, from the cheque return memos, Ex. CW1/5 to Ex. CW1/8 placed on record by the complainant, the second ingredient is also held to be established.
37. Now, so far as the last ingredient is concerned, accused states that he has not been served with the legal notice. However, perusal of the bail bond furnished by the accused on 06.07.2012 shows that it states the same address as mentioned on the legal notice. The postal receipts placed on record by the complainant as Ex. CW1/10 are sufficient proof of sending the notice to the accused. It is a settled proposition of law that a notice properly addressed, prepaid and posted by registered post shall be deemed to be served upon the respondent unless the contrary is proved.
38. Furthermore, it is not in dispute that the accused has been served through process of the Court and once it is so, the decision of Hon'ble Supreme Court in [PRECEDENT] would also be applicable wherein Hon'ble Apex Court has held that even if the accused didn't receive the legal demand notice he can pay the cheque amount within 15 days of service of summons from the court but if he fails, he can't contend that he has not received the legal demand notice.
[ENTITY] vs. [ENTITY] CC[CASE NUMBER]
39. In view of the observations made above, it is held that the ingredients of offence under [SECTION] [ACT] have been proved against the accused and the accused has failed to rebut the presumption contained in [SECTION] of the Act. Accused is convicted accordingly of the offence punishable under [SECTION] [ACT].
Announced in Open Court 24.07.2013 ([ENTITY]) METROPOLITAN MAGISTRATE-05 NEGOTIABLE INSTRUMENTS ACT DWARKA COURTS, NEW DELHI 24.07.2013