IN THE COURT OF SHRI GAURAV GUPTA, MM1 (NI ACT) SOUTHWEST DISTRICT: NEW DELHI C.C No. 3715/13 Unique case ID No. 02405R0059362013 under [SECTION] of [ACT] In the matter of : M/s. [ENTITY], Through Mr. Shyamsunder Chandhok, (A.R of complainant bank) rd 7/56, 3 Floor, Desh Bandhu Gupta Road, Karol Bagh, New Delhi110005 Complainant Versus [ENTITY] Flat No414, Veer Apartment, Sector13, Rohini, Delhi110085 Accused Date of Institution : 05.03.2013 Date on which judgment was reserved : 09.04.2014 Date of judgment : 25.04.2014 M/s. [ENTITY] vs. [ENTITY] C.C No. 3715/13 Page 1 of 10 J U D G E M E N T
1. Vide this judgment I shall dispose of a complaint filed by the complainant against the accused under [SECTION] of the [ACT], (hereinafter referred to as the "[ACT]") for dishonour of a cheque issued by the accused for Rs. 44,040/ (Rupees Forty Four Thousand Forty Only).
2. The brief facts of the case as averred by the complainant in its complaint are that the complainant is engaged in the business of banking and upon the request of the accused, the complainant had sanctioned and disbursed a finance facility of Rs. 4,00,000/ on 31.05.2007 to one Mr. [ENTITY] (borrower) and the accused [ENTITY] (coborrower) vide loan agreement bearing no. 04653400005487.
3. It has further been averred that in order to discharge his liability the accused issued the cheque in question in favour of the complainant bearing number 656126 for a sum of Rs. 44,040/, dated 27.12.2012, drawn M/s. [ENTITY] vs. [ENTITY] on Union Bank of India, Azadpur, Delhi. It has further been averred that when the said cheque was presented by the complainant for clearance, the same was returned unpaid by the accused's banker vide return memo dated 29.12.2012 with the remarks "Account is inoperative/Dormant". Thereafter, a legal notice dated 23.01.2013 was sent to the accused through speed post. However, despite service, the accused failed to make payment against the cheque within the stipulated period. Therefore, the complainant was constrained to file the present complaint.
4. In order to prove its case, the complainant examined Sh. [ENTITY], who is the authorized representative of the complainant as CW1 who tendered his affidavit Ex.CW1/1 in evidence. The complainant placed reliance on the following documents:
i. Copy of power of attorney as Ex CW1/A; ii. Copy of loan agreement as Mark A; iii. Original cheque as Ex. CW1/B;
iv. Return memo as Ex. CW1/C;
v. Copy of legal notice as Ex. CW1/D; vi. Postal receipt as Ex. CW1/E;
vii.[ENTITY] generated tracking report as Ex. CW1/E1;
M/s. [ENTITY] vs. [ENTITY] viii.Complaint as Ex. CW1/F; and ix. Copy of account statement as Ex. CW1/G.
5. The accused denied the allegations against him when all the incriminating circumstances were put to him while recording his statement u/[SECTION] [ACT] The accused denied the issuance of the cheque. The accused took a defence that he never borrowed any loan from the complainant nor was he a coborrower to the loan in question. The case of the accused is that the cheque was not signed by him and that the same does not pertain to his bank account. The accused stated that he has been falsely implicated in this case. The accused placed reliance upon [PRECEDENT] and [PRECEDENT] dated 11.07.2001 of the Hon'ble Supreme Court of India. However, the accused did not lead any evidence in his defence.
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6. In support of his case, Ld. Counsel for the complainant placed reliance upon [PRECEDENT], [PRECEDENT] and [PRECEDENT].
7. In order to establish its case, the complainant was required to demonstrate that all the essential ingredients of [SECTION] [ACT] have been fulfilled. The same are mentioned hereinbelow :
"i) a person must have drawn a cheque on an account maintained by him in the bank for payment of a certain amount of money to another person from out of that account for the discharge of any debt or other liability;
ii) that cheque has been presented to the bank within a period of six months from the date on which it is drawn or within a period of its validity whichever is earlier;
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iii) 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;
iv) 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 unpaid;
v) 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. M/s. [ENTITY] vs. [ENTITY]
8. If the aforementioned ingredients are satisfied then the person who has drawn the cheque shall be deemed to have committed an offence.
9. It is also apropos to discuss the presumptions under [SECTION] and [SECTION], [ACT]. The above provisions lay down special rule of evidence applicable to the Negotiable Instruments. [SECTION] and [SECTION], [ACT] require the court to raise a presumption of law, as distinguished from a presumption of fact by which the court "may presume" a certain state of affairs. In other words, it is obligatory on the court to raise these presumptions in every case where the factual basis for the raising of the presumptions has been established.
10. Hence, provided the facts required to form the basis of presumption of law exists, no discretion is left with the court but to draw the statutory conclusion. The effect of these presumptions is to place the evidential burden on the accused of proving that the cheque was not received by the complainant towards discharge of any liability and that the same was not drawn for consideration.
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11. However, as discussed above, the presumptions under [SECTION] and [SECTION], [ACT] are raised only when factual basis for their raising has been established. The initial burden lies on the complainant to prove the execution of the cheque and when this burden is discharged then the court shall be obliged to raise the presumptions under [SECTION] and [SECTION], [ACT].
12. Reference may be had to [PRECEDENT] wherein the Hon'ble Supreme Court while examining the scope and ambit of presumptions to be raised as envisaged by the provisions of [SECTION] and [SECTION], [ACT] had opined and held as under :
" 10. [SECTION] of the Act inter alia directs that it shall be 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 discharge of, whole or part of any debt or liability. Applying the definition of the word "proved"
in [SECTION] of the [ACT] to the provisions of [SECTION] and [SECTION] of the Act, it becomes evident that in a trial u/[SECTION] of the Act, a presumption will M/s. [ENTITY] vs. [ENTITY] have to be made that every negotiable instrument was made or drawn for consideration and that it was executed for discharge of debt or liability once the execution of negotiable instruments is either proved or admitted. As soon as the complainant discharges the burden to prove that the instrument, say a note, was executed by the accused, the rules of presumption u/[SECTION] & [SECTION] of the Act help him shift the burden on the accused." (emphasis is mine).
13. Coming to the facts of the case in hand, the accused throughout denied his signature on the cheque. The accused even denied that the cheque was drawn from an account maintained by him. The complainant was required to discharge the initial burden to prove the execution of the cheque. However, the complainant failed to adduce any evidence for the same. The complainant could have called the banker of the accused to show that the cheque pertains to the bank account of the accused. In the absence of any testimony; oral or documentary, regarding execution of the impugned cheque, it cannot be presumed that the cheque was issued by the accused from an account maintained by him.
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14. From the above discussion and findings, it is clear that the complainant has failed to discharge the initial burden to establish the factual basis for raising of presumption and hence, the presumptions under [SECTION] and [SECTION], [ACT] cannot be raised against the accused in his case.
15. As the ingredients of the [SECTION] [ACT] are not fulfilled, the offence under [SECTION] [ACT] is not made out against the accused. Accordingly, the accused is acquitted.
Announced in the open Court on 25th Day of April, 2014 ([ENTITY]) MM01 ([ACT] New Delhi M/s. [ENTITY] vs. [ENTITY]