IN THE COURT OF SH. RAKESH KUMAR SINGH: METROPOLITAN MEGISTRATE (NI ACT)-1, CENTRAL: ROOM NO.-42, TIS HAZARI COURT COMPLEX, DELHI [ENTITY] Vs. [ENTITY] [CASE NUMBER] 28.07.2012 Judgment u/[SECTION] [ACT] Both the sides have been heard. Accused has made a claim that he was running a Partnership business with Ms. [ENTITY] from her premises and blank signed cheques were available therein were stolen by [ENTITY] & [ENTITY] and the same have been misused by the complainant for filing complaint U/[SECTION] [ACT]. We have to see whether accused has been successful in establishing this fact by preponderance of probabilities or not. The story goes like this. Being on friendly terms, [ENTITY] claimed to have advanced a loan of Rs.1,25,000/- to the accused and in purported discharge of the said loan liability, the accused issued a cheque of Rs.1,25,000/- dated 01.07.2002. [ENTITY] filed one complaint against the accused i.e. [CASE NUMBER]. Ms. [ENTITY], i.e. the wife of [ENTITY] also advanced a loan of Rs.1,25,000/- to the accused and received three cheques from the accused of Rs.1,25,000/- dated 01.07.2005, Rs.12,000/- dated 29.07.2005 and Rs.7,000/- dated 25.07.2005 respectively in discharge of loan amount and interest. She filed another complaint through [ENTITY] against the accused i.e. [CASE NUMBER]. It would be hard to believe that in the year 2005 loan was advanced to such person who has not even repaid the earlier loan against which a case was pending since the year 2003. It appears that the first loan was given by [ENTITY] somewhere in the year 2002 and the case was filed in the year 2003. And second loan was given by Ms. [ENTITY], i.e. the wife of [ENTITY] somewhere in the year 2005. How could have she advanced the loan to such person who had defrauded her husband is a serious question. It is not as if first transaction was not in the knowledge of Ms. [ENTITY]. After all she was introduced to the accused by the [ENTITY], i.e. her husband and she was earlier running a Partnership business with the accused. And quite interestingly relation between the Ms. [ENTITY], [ENTITY] and the accused was not cordial as even the Partnership business was closed in the year 2000 and legal notices were exchanged between the parties of the said partnership business in the year 2000. It seems to be not probable that despite such factum i.e. the disputed business relation of the year 2000, two loans were advanced to the accused in the year 2002 & 2005 respectively by the husband and wife and the said second loan was advanced when first litigation was already pending. It is well settled law that the accused to prove his innocence is not required to establish the factum beyond all reasonable doubts. He can always prove his innocence by the preponderance of probabilities. Mandatory presumptions of law do not relieve the prosecution from establishing the foundational facts. It is a cardinal principle of criminal jurisprudence that the Prosecution (Complainant) has to stand on its own leg. The burden is so heavy that no blemishes in the story of the [ENTITY] Vs. [ENTITY] [CASE NUMBER] 1 accused can give a right to the complainant to claim that his version should be preferred, whereas the burden on the accused is slightly light as he has to discharge the burden by preponderance of probabilities. The accused can always rely upon the material and circumstances brought on record by the complainant. If the material and circumstances available on record in its entirety suggest the existence of any circumstance which is contrary to the stand of the Prosecution (Complainant), the prosecution has to fail and the accused has to be given benefit of doubt. It is further well settled law that even if two view are possible, the court should adopt the view which does not interfere in the life and liberty of any person. (See a constitution bench judgment of Hon'ble Supreme Court in Sharad Birdhi Chand Sarda vs State Of Maharashtra 1984 AIR [SECTION]22). The complainant has not come with the clean hand in the court. Pertinently both the complaint has been prosecuted by [ENTITY] and [ENTITY] never done anything as a complainant. Even [ENTITY] examined himself as a witness in [CASE NUMBER] i.e the complaint filed by [ENTITY]. If we see his testimony something is very glaring. In his affidavit, [ENTITY] as SPA has claimed that loan was taken by the accused and three cheques were issued to discharge the liability and interest. However, in his cross examination he had admitted that he was not present at the time of giving of the said loan to the accused. It is this point which is going to show that [ENTITY] being SPA cannot depose about the loan transaction. Clearly, he was not having any personal knowledge about the said loan transaction. No doubt, attorney holder of any person can be a witness but it is well settled that he cannot depose about such factum which is not in his personal knowledge (see [PRECEDENT]). In his affidavit, the [ENTITY] i.e SPA has claimed that to discharge the liability the accused had issued three cheques. There is nothing in his affidavit to suggest that the cheques were given at different times and not in one go. However, in the cross examination, he has stated that the cheque of Rs.1,25,000/- was given by the accused to his wife in the evening on the same day. It is clear that the same day means the day when the loan was allegdly so advanced as in the earlier paragraph of the same cross examination, he had already stated that cheque of Rs.1,25,000/- was given by the accused on the same day when he took the loan. It is clearly going against the version of the complainant. In the cross examination conducted in the case of [ENTITY], the witness [ENTITY] has stated that the cheque of Rs.12,000/- was given by the accused to his wife when the cheque of Rs.1,25,000/- was dishonoured. This is a clear fallacious and wrong statement. All the three cheques in the said case were only presented on one occasion and the returning memos are dated 09.08.2005. On the back of all the three cheques only one stamp is there which is showing one time presentation. Even in the affidavit [ENTITY] has not claimed to have presented any of the cheques for more than one time. Therefore, this claim of [ENTITY] in the cross examination is also wrong. Clearly, the complainant has not come to the court with clean hands. Further, in the cross examination [ENTITY] accepted that one [ENTITY] was his driver and that the said [ENTITY] has also filed a complaint under [SECTION] [ACT] against the present accused. Whereas in the cross examination conducted in [CASE NUMBER] filed by [ENTITY] in his personal capacity), this [ENTITY] has declined to have any knowledge about the filing of complaint by [ENTITY]. But the accused then asked him about his statement given in the case filed by [ENTITY] and then he accepted the correctness about the statement given in the said case regarding filing of case by the said [ENTITY]. (Here it may be clarified that the case of [ENTITY] was earlier in some other court where it was instituted as [CASE NUMBER] and, therefore, the said CC number is appeared to have been referred in the cross examination conducted in [CASE NUMBER]). Clearly, [ENTITY] is at fault in respect of the statement regarding filing of complaint by [ENTITY] Vs. [ENTITY] [CASE NUMBER] 2 [ENTITY] under [SECTION] [ACT] against the present accused. Be that as it may. It is highly improbable that the accused was taking loan from the persons who are associated to each other i.e [ENTITY], his wife [ENTITY] & his driver [ENTITY]. This circumstance that driver of the complainant had also filed a complaint against the present against accused under [SECTION] [ACT] and the inconsistence stand of the complainant thereto is raising a serious doubt and is making the story of the accused more probable. A further wrong statement of [ENTITY] is also appearing in the cross-examination conducted in [ENTITY]'s Case. He has claimed that cheque of Rs.12,000/- was given when the cheque of Rs.1,25,000/- was dishonored. Sans above discussion, this cheque of Rs.12,000/- could not have been issued prior to 01.07.2005 i.e. the date of the cheque of Rs. 1,25,000/- as it is the own claim of [ENTITY] that cheque of Rs.12,000/- was given when the cheque of Rs.1,25,000/- was dishonored. This cheque of Rs.12,000/- i.e. Ex.CW1/B is having some writing on its back. It may be noted that the complainant has heavily relied upon this writing. [ENTITY] in the same cross-examination claimed that this cheque Ex.CW1/B was given only after making the endorsement on its back and that too in his presence. Firstly, he has not disclosed any such factum in his complainant or affidavit and secondly, his claim appears to be wrong. How? A bare look on the same goes to clarify the situation and to show that this writing goes against the complainant. The writing purports to be the confirmation of payment of Rs.12,000/- and signed by the accused. What is glaring is that the signature shows itself as dated 29/10/2001. Now if this cheque was given somewhere after 01.07.2005, the signature on its back could not have been made on 29.10.2001 i.e. almost four years back. This situation is clearly falsifying the stand of the complainant. And the same is also making something more clear and brings out the relevance of cutting on the date in the cheques. In all these three cheques, in the date which has been cut down, last digit of the year appears to be manipulated several times and only thereafter is showing "6" i.e. making the same as the year "2006". Then other dates are written in all the three cheques making the same of the year "2005". Reason will be hard to found why somebody written a particular date on the cheque and by changing the last digit with emphasis (digit "6" has been made very dark) did make the same for the year "2006" and then again crossed the date and inserted a new date that too of the year "2005". In normal course, a person in flow of writing can of course write 2006 and then change it to 2005 if require in the circumstances. But the circumstances are not normal. The earlier written year "2006" is not written in normal form and circumstance, it has been made out from some other digit with consciousness. And then inserting a date of prior year may be casting a serious doubt, more so when the same pattern has been applied for three cheques. Such mistake can not be believed to happen several times. The situation is also giving an answer to the signature of accused on the back of other cheques. On the third cheque of Rs. 7,000/-, signature of accused appears on the back. Why this signature was done has not been spelled out by any party. But answer may be sought in other way. Signature on the back of the cheque makes the same an endorsement in blank by virtue of [SECTION] & [SECTION] [ACT] and further the cheque becomes bearer by virtue of [SECTION] & [SECTION] [ACT]. As such it may be concluded that accused was making some signed cheque available for business and for immediate urgent situation he was making some cheque available in the bearer form so that business could run smoothly. There may be some other explanation for the same such as by making some noting about limit of amount for which cheque can be presented, the drawer may make his signature on the back. Or there may be some other explanation. But however, there is no necessity to think about several explanations as none has been furnished by the parties and the same will be only academic. In the circumstances when [ENTITY] Vs. [ENTITY] [CASE NUMBER] 3 the veracity of complainant testimony is in doubt, it appears that some signed and bearer form cheques were somehow lost by the accused and later on misused for filing complaints. Whether cheques were stolen by the [ENTITY] or [ENTITY] is not an issue to be answered in the present proceeding. Suffice would it be to say that circumstances of doubtful testimony of the complainant and factum of filing criminal complaint by one driver of the complainant go to show that signed cheques and bearer form cheques of the accused have been somehow misused. This also answer the fact that in [CASE NUMBER], the cheque is having some endorsement on its back. Once endorsement on the back of Cheque Ex.CW1/B appears to be false and manipulated, it would be hard to accept that endorsement on the back of cheque in [CASE NUMBER] is genuine. In the cross examination in [CASE NUMBER], [ENTITY] has admitted that he does not remember from where he get the amount of Rs.1,25,000/- for advancing the same to the accused as loan. Even in the other case where he was cross- examined as SPA of complainant, he admitted that he does not know from where his wife got the Rs.1,25,000/- for advancing the same as a loan to the accused. Pertinently, in the both the cases alleged loan amount was the same i.e. Rs.1,25,000/-. Admittedly, no document has been executed about the loan and no receipt has been issued in respect of the loan transaction in both the cases. It is highly unnatural that a wife of a defrauded person (here wife is [ENTITY] and defrauded person is [ENTITY]) had advanced another loan to the same accused who had defrauded her husband and that too without any security or without execution of any loan document. [ENTITY] has given confusing statement regarding time of advancement of loan. In the complaint and affidavit, firstly he did not mention anything about the time when the loan was so advanced. However, in the cross-examination when questioned he was required to reveal the time. Interestingly, he taken inconsistence stand. In cross-examination dated 13.05.2011 in [CASE NUMBER], he claimed to have advanced the loan in the month of May/June 2002. But again in the further cross-examination on 19.10.2011 in the same case, he claimed to have advanced the loan in the month of April-May 2002. Inconsistencies about timing of loan do not rest here. In the case filed by him as SPA of complainant, this [ENTITY] is also cross-examined. In the said case ([CASE NUMBER] or say 1078/10 old), he claimed to have advanced the loan in the month of July 2002. Pertinently, on all the occasions, he was talking about the same loan advanced by him to the accused. How can he be believed? Even he gone one step further in strengthening his inconsistencies and his confusing state of mind by deposing firstly that he had advanced the loan in first instance, then changing the same by saying that his wife had advanced the loan in the first instance and by again saying that he did not know when his wife advanced the loan to the accused. So far as the relationship is concerned, I am of the view that the relationship was not cordial. Accused and [ENTITY] had started a partnership business in the year 2000 and as per the complainant in the cross-examination it did not last for more than some months. Record further shows that legal notices were exchanged between the parties. Complainant has tried to establish that once again bank account of the said partnership was activated in the year 2002 on the joint request of the accused and [ENTITY]. But there is no proof that the said partnership actually could run again or not. Receipt of Rs.1 lac Ex.CW1/L is not having any date and therefore it can not help the complainant in saying that the said amount of the receipt was provided for business in the year 2002. It may be of the time when partnership business was firstly undertaken. On the other hand complainant has admitted that the said partnership is not in existence. Even further as stated by the complainant, his wife [ENTITY] is running her proprietary-ship firm in the name of M/s JDM Boutique which does not have any relation [ENTITY] Vs. [ENTITY] [CASE NUMBER] 4 with the accused. Having heard both the Ld. counsels and having gone through the entire record, I am of the opinion that the complainant can not succeed. Nature and extent of rebuttal: 2. A three judges bench of Hon'ble Supreme Court while dealing with [ACT] has observed in re- spect of presumptions of law in [PRECEDENT] as under: "The presumption however, is not absolute. It is rebuttable. The accused can prove the contrary. The quantum and the nature of proof required to displace this presumption may vary according to the circumstances of each case. Such proof may partake the shape of defence evidence led by the accused, or it may consist of circumstances appearing in the prosecution evidence itself, as a result of cross- examination or otherwise. But the degree and the character of the burden of proof which [SECTION] casts on an accused person to rebut the presumption raised thereunder, cannot be equated with the degree and character of proof which under [SECTION], [ACT] rests on the prosecution. While the mere plausibility of an explanation given by the accused in his examination under [SECTION], [ACT] may not be enough, the burden on him to negate the presumption may stand discharged, if the effect of the material brought on the record, in its totality, renders the existence of the fact presumed, improbable. In other words, the accused may rebut the presumption by showing a mere preponderance of probability in his favour; it is not necessary for him lo establish his case beyond a reasonable doubt-see [PRECEDENT]. Another aspect of the matter which has to be borne in mind is that the sole purpose of the presumption under [SECTION] is to relieve the prosecution of the burden of proving a fact which is an essential ingredient of the offences under [SECTION] of the [ACT] and [SECTION], [ACT]. The presumption therefore can be used in furtherance of the prosecution case and not in derogation of it. If the story set up by the prosecution inherently militates against or is inconsistent with the fact presumed, the presumption will be rendered sterile from its very inception, if out of judicial courtesy it cannot be rejected out of hand as still born." 2.1. Hon'ble Supreme Court in [PRECEDENT], decided on 20.02.2007 [ENTITY] Vs. [ENTITY] [CASE NUMBER] 5 has observed as under: "15. The Act contains provisions raising presumption as regards the negotiable instruments under [SECTION] of the Act as also under [SECTION] thereof. The said presumptions are rebuttable ones. Whether presumption stood rebutted or not would depend upon the facts and circumstances of each case. [SECTION]. The nature and extent of such presumption came up for consideration before this Court in [PRECEDENT] wherein it was held : "30. Applying the said definitions of "proved" or "disproved" to the principle behind [SECTION] of the Act, the court shall presume a negotiable instrument to be for consideration unless and until after considering the matter before it, it either believes that the consideration does not exist or considers 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 dos not exist. For rebutting such presumption, what is needed is to raise a probable defence. Even for the said purpose, the evidence adduced on behalf of the complainant could be relied upon." 17. This Court clearly laid down the law that standard of proof in discharge of the burden in terms of [SECTION] of the Act being of preponderance of a probability, the inference therefor can be drawn not only from the materials brought on record but also from the reference to the circumstances upon which the accused relies upon. Categorically stating that the burden of proof on accused is not as high as that of the prosecution, it was held; "33. Presumption drawn under a statute has only an evidentiary value. Presumptions are raised in terms of the [ACT]. Presumption drawn in respect of one fact may be an evidence even for the purpose of drawing presumption under another." It was further observed that ; " 38. If for the purpose of a civil litigation, the defendant may not adduce any evidence to discharge the initial burden placed on him, a "fortiori" even an accused need not enter into the witness box and examine other witnesses in support of his defence. He, it will bear repetition to state, need not disprove the prosecution case in its entirety as has been held by the High Court. [ENTITY] Vs. [ENTITY] [CASE NUMBER] 6 39. A presumption is a legal or factual assumption drawn from the existence of certain facts." 2.2. Hon'ble Supreme Court in [PRECEDENT] has observed that: "30. The proviso appended to the said section provides for compliance with legal requirements before a complaint petition can be acted upon by a court of law. [SECTION] of the Act merely raises a presumption in regard to the second aspect of the matter. Existence of legally recoverable debt is not a matter of presumption under [SECTION] of the Act. It merely raises a presumption in favour of a holder of the cheque that the same has been issued for discharge of any debt or other liability. 31.The courts below, as noticed herein before, proceeded on the basis that [SECTION] raises a presumption in regard to existence of a debt also. The courts below, in our opinion, committed a serious error in proceeding on the basis that for proving the defence the accused is required to step into the witness box and unless he does so he would not be discharging his burden. Such an approach on the part of the courts, we feel, is not correct. 32. An accused for discharging the burden of proof placed upon him under a statute need not examine himself. He may discharge his burden on the basis of the materials already brought on record. An accused has a constitutional right to maintain silence. Standard of proof on the part of the accused and that of the prosecution in a criminal case is different. 34. Furthermore, whereas prosecution must prove the guilt of an accused beyond all reasonable doubt, the standard of proof so as to prove a defence on the part of the accused is 'preponderance of probabilities'. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which he relies.
45. We are not oblivious of the fact that the said provision has been inserted to regulate the growing business, trade, commerce and industrial activities of the country and the strict liability to promote greater vigilance in financial matters and to safeguard the faith of the creditor in the drawer of the cheque which is essential to the economic life of a developing country like India. This however, shall not mean that the courts shall put a blind eye to the ground realities. Statute mandates raising of presumption but it stops at that. It does not say how presumption drawn [ENTITY] Vs. [ENTITY] [CASE NUMBER] 7 should be held to have been rebutted. Other important principles of legal jurisprudence, namely, presumption of innocence as a human right and the doctrine of reverse burden introduced by [SECTION] should be delicately balanced. Such balancing acts, indisputably would largely depend upon the factual matrix of each case, the materials brought on record and having regard to legal principles governing the same."
It may be pertinent to mention here that a three judges bench of the Hon'ble Supreme Court in [PRECEDENT] decided on 07.05.2010 has considered the dictum of [PRECEDENT] (supra) and overruled the view so far as existence of liability is concerned, however, has not dissented with other parameters observed and laid down in the said case. It has been observed therein that:
"14. In light of these extracts, we are in agreement with the respondent-claimant that the presumption mandated by [SECTION] of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in [PRECEDENT] (supra) may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. "
2.3 In the facts and circumstances of the present case, if we make a fine balance between the two propositions i.e. reverse onus and presumption of innocence, it can be safely held that accused has successfully probabilised his defence by showing that the non-existence of debt or liability and consideration is probable or its non existence is so probable that a prudent man would under the circumstances act upon the supposition that it did not exist.
2.4. I am of the opinion that an accused has a right to rebut the presumption by placing reliance upon the circumstances brought and material placed by the complainant. Hon'ble Supreme Court in [PRECEDENT] decided on 07.05.2010 has further held that:
"However, it must be remembered that the offence made punishable by [SECTION] can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused/defendant cannot be expected to discharge an unduly high standard or proof. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under [SECTION], the standard of proof for doing so is that of 'preponderance of probabilities'. Therefore, if the accused is able to raise a probable [ENTITY] Vs. [ENTITY] [CASE NUMBER] 8 defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own."
Conclusion:
3. I am of the opinion that the above attending circumstances are sufficient to displace the burden of proof which is somewhat lighter on accused. The law regarding the degree of proof required from the accused to prove his defence is well settled. The accused is required only to prove by preponderance of probabilities that the defence bears ring of truth. The accused is not required to prove his defence beyond reasonable realm of doubt as is required to be done by the prosecution. Accused has created a reasonable doubt in respect of existence of liability and consideration. Complainant failed to discharge the sifted burden. In such circumstances, prosecution has to fail.
4. I accordingly return a finding of not guilty against the accused.
5. Accused [ENTITY] is hereby acquitted from the charges in the present complaint case.
6. A copy of this order be placed on the official website of the District Court.
([ENTITY]) MM ([ACT])-01, Central District, Delhi 28.07.2012 [ENTITY] Vs. [ENTITY] [CASE NUMBER] 9