1 IN THE COURT OF MS. [ENTITY], MM, (NI ACT)2, PATIALA HOUSE COURT, NEW DELHI Case ID No. : R1003062007 CC No. : 798/11 Date of Institution of the Complaint : 06.01.2003 Name, parentage and address of Complainant : [ENTITY] S/o Shri [ENTITY] R/o F258, Dakshin Puri Dr. Ambedkar Nagar New Delhi. Name, parentage and address of the accused : [ENTITY] S/o Sh. [ENTITY] C/o Shop No. 3839, 4160 Indira Virat Market, Near Virat Cinema New Delhi Also at: G285, Dakshin Puri, New Delhi. Offence Complained of : U/[SECTION] of [ACT] (hereinafter [ACT]) Offence Proved : No Plea of the Accused in his examination. : As amount paid through another cheque. Date of reservation of order : 18.02.2012 Final Order : Acquitted Date of Order : 05.03.2012 Police Station : Dr. Ambedkar Nagar 2 JUDGMENT
1. The present complaint was filed by Mr. [ENTITY] but as he expired in the middle of the court proceedings, the same was continued by his son Mr. [ENTITY] after notice was given to the accused under [SECTION] [ACT] The complainant hereunder shall mean Mr. [ENTITY] in the pre notice stage and Mr. [ENTITY] in the post notice stage.
2. It is the case of the complainant that the accused approached him on 4.6.2002 and requested him for a friendly loan of Rs. 1,00,000/ as he was in dire need of money and assured him that he would make the payment for the loan amount within one month. That the complainant gave the accused a friendly loan of Rs. 1,00,000/ on 5.6.2002 in cash in the presence of one Mr. [ENTITY] and at that time the accused issued a post dated cheque bearing no. 831570 dated 17.7.2002 drawn on State Bank of India, Ambedkar Nagar, Sector 5, New Delhi for a sum of Rs. 1,00,000/ in favor of the complainant as repayment for the same with the assurance that the same would be enchased on presentation or in lieu thereof, cash will be paid to the complainant. That the complainant requested several times after 17.7.2002 to the accused to give him cash but the accused only delayed the matter. That on 20.11.2002, the accused refused to pay the friendly loan and asked the complainant to present the cheque on the assurance that he would arrange the finances within a day. That the complainant presented the cheque for encashment on 21.11.2002 but the same was returned unpaid for the reason 'insufficient funds'. That the complainant got issued legal notice dated 7.12.2002 through his counsel by way of Regd. AD/UPC/Courier which was duly served on the accused but the accused failed to make payment within stipulated time. That the accused committed an offence punishable under [SECTION] of [ACT].
3. The complainant filed his affidavit dt. 6.1.2003 in presummoning evidence. List of witnesses and list of documents was also filed.
Bail bond and Notice
4. The court took cognizance of the offence U/[SECTION] of [ACT] on 6.1.2003 and issued process to the accused. The accused put in appearance on 18.12.2003 and was admitted to bail in the sum of Rs. 25,000/ alongwith one surety of like amount. Notice u/[SECTION] [ACT] was given to the accused on 19.2.2004 alleging that the impugned cheque was dishonored for the reason "Insufficient funds", to which the accused pleaded not guilty and claimed trial. Substance of complainant's evidence and cross examination
5. The complainant was substituted on 6.5.2006 by his Legal Representative, Mr. [ENTITY] (as the complainant had expired) in view of the judgment of [PRECEDENT] , and Mr. [ENTITY] filed his affidavit dt. 13.3.2007 in post notice evidence which is Ex. PW1/F and copy of the same was supplied to the accused.
6. The complainant relied on documents filed alongwith affidavit in presummoning evidence which were Ex. CW1/A to CW1/E, the details of which are as follows:
(a) Ex. CW1/A is the cheque bearing no. 831570 dt. 17.07.2002 for a 1 Air 1998 SC 596; 1998 Cr.L.J 856 sum of Rs. 1,00,000/ drawn on State Bank of India, Ambedkar Nagar, Sector V, New Delhi.
(b) Ex. CW1/B is the dishonor memo dt. 22.11.2002 showing the reason for dishonor as "Insufficient funds".
(c) Ex. CW1/C is the legal notice dt. 7.12.2002
(d) Ex. CW1/D are the receipts of redg. AD/ UPC and Courier.
(d) Ex. CW1/E is the acknowledgment card.
7. The complainant, Mr. [ENTITY], tendered his post notice evidence by way of affidavit on 16.11.2009 and was partly cross examined. However, he was cross examined at length on 4.3.2011. He stated that he was doing the business of transport in the year 2002 and the business was in the name of his wife. He further stated that he had known the accused since the year 1992 and he was at home alongwith one Mr. [ENTITY] and his mother, when the transaction took place between his father and the accused. He stated that the accused had come to take loan on 4.6.2002 for Rs. 1,00,000/ but he was given the payment on 5.6.2002 and he had issued the cheque on 5.6.2002. He stated that in August, 2002, he had wanted to purchase a Swaraj Mazda Bus but since he was not filing ITR he asked the accused to purchase the same in his name while the complainant paid the installments and therefore loan was taken in the name of the accused. He further stated that the accused used to take small amounts of loan from him or his father, but he used to mostly return the same and no formal agreements were entered into between the parties. On questioning, he said that he had not given any loan amount to the accused against cheque bearing no. 831573. He further stated that he did not know how his father arranged the amount of Rs. 1,00,000/ which was given to the accused. He denied the suggestion that the impugned cheque was misplaced by his father and in lieu thereof, cheque no. 831573 was given. He denied the suggestion that the impugned cheque was misused as the payment against the impugned cheque was already made by encashing cheque no. 831573.
Substance of statement of accused recorded U/[SECTION] [ACT]
8. Statement of the accused U/[SECTION] [ACT] was recorded on 5.7.2011 in which he admitted that he had taken sum of Rs. 1,00,000/ from Mr. [ENTITY] for helping in purchase of one vehicle from Inderson Motors for which down payment of Rs. 1,00,000/ had to be made. He further stated that it was agreed between the parties that in case the vehicle could not be purchased, he would return the sum of Rs. 1,00,000/ to Mr. [ENTITY] and for the same reason he had given impugned cheque of Rs. 1,00,000/ as security which was to be returned to him after purchase of the vehicle. He stated that he did not know any [ENTITY] and that he had issued cheque in the name of the complainant as Mr. [ENTITY] had told him that he did not have any account in his name. He further stated that when he had asked Mr. [ENTITY] to return the cheque, he stated that the same was with his wife who had gone to Mumbai. He also stated that no vehicle was purchased from Inderson Motors and Rs. 1,00,000/ was returned by him to [ENTITY] by way of another cheque and that he had no liability towards the complainant. Defence pleaded by the accused
9. From the cross examination of the complainant and the statement of the accused recorded U/[SECTION] [ACT], it appears that the accused in his defence pleaded that the impugned cheque was given by way of security to the complainant and the accused had made payment of Rs. 1,00,000/ to Mr. [ENTITY] by way of another cheque.
Substance of Defence Evidence
10. On 25.8.2011, witness from SBI, Ambedkar Nagar Branch was examined and cross examined. He stated that he had brought copy of cheque bearing no. 831573 dt. 20.7.2002 which was Ex. DW1/B and also the statement of account pertaining to accused bearing no. 01190016299 for the period 31.3.2002 to 12.8.2005 which was Ex. DW1/C. He further stated that the cheque bearing no. 831573 issued in favor of Mr. [ENTITY] was duly encashed on 20.7.2002. No further witness or document was brought in defence evidence. Judgment and Reasons
11. Final arguments of both the parties were heard at length on 18.2.2012.
12. It has been observed by the Hon'ble Supreme Court in [PRECEDENT], that ordinarily in cheque bouncing cases, what the courts have to consider is whether the ingredients of the offence enumerated in [SECTION] of the Act have been met and if so, whether the accused was able to rebut the statutory presumption contemplated by [SECTION] of the 2 [ACT].
It was further observed that the test to be applied in cases U/[SECTION] [ACT] was one of preponderance of probabilities, which has been held in various other case law as well. In [PRECEDENT] (supra) it has been observed as follows: We are an agreement with the respondent claimant that the presumption mandated by [SECTION] of the Act does indeed include the existence of the legally enforceable debt or liability this is of course, in the nature of a rebuttable presumption and it is open to accused to raise a defence where in the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favors the complainant it is a settled position that when and accused has to rebut the presumption U/[SECTION], the standard of proof for doing so is that of 'preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubt about the existence of a legally enforceable debt or liability, the prosecution can failed. The accused can rely on 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.
Further in [PRECEDENT] it has been observed as follows: 3 [PRECEDENT] The accused in a trial U/[SECTION] [ACT] has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case the non existence of consideration or debt is so probable that a prudent man ought to suppose that no consideration or debt existed. To rebut the statutory presumption the accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. It has further been observed by the Hon'ble Punjab & Haryana High Court in the judgment of [PRECEDENT], that it is not required that the accused must lead positive evidence to rebut presumption and presumption can be rebutted from circumstances on record and hence, not bringing on record any defence evidence by the accused does not cause prejudice to the accused.
13. For the purpose of reaching a decision in the present matter, it is thus important to first decide whether the complainant has been able to fulfill the ingredients as enumerated under [SECTION] [ACT] and if yes, then decide if the accused has been able to rebut the statutory presumption contemplated by [SECTION] of [ACT].
14. The essential ingredients which need be proved for constituting the offence under [SECTION] [ACT] were discussed in the case [PRECEDENT]. In view of the judgment and also the provisions U/[SECTION] [ACT], an offence U/[SECTION] [ACT] is committed when a person draws a 4 2009 (1) DCR 308 5 2009 (9) SCALE 455 cheque on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, and that cheque is returned by the bank unpaid due to "insufficient funds" or "exceeds arrangements" or any other such reasons. Further, as per proviso to [SECTION] [ACT], the drawer shall be liable only if;
A) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of validity, whichever is earlier;
B) the holder of the cheque makes a demand for the payment of the cheque amount by giving a legal notice to the drawer within 30 days of receipt of information by him from the bank regarding dishonor; C) the drawer of the cheque fails to make the payment to the drawee within 15 days from receipt of legal notice.
15. On perusal of the file it is seen that the cheque was issued on 17.07.2002 and dishonored on 22.11.2002 i.e presented within the period of validity; legal notice dt. 07.12.2002 sent on 07.12.2002, i.e., within 30 days of receipt of return memo; and complaint filed on 06.01.2003, i.e., within 30 days of sending of legal notice and 15 days of nonreceipt of payment thereafter. Thus the complainant has filed sufficient evidence to raise the presumption u/[SECTION] [ACT].
16. The issue is whether the accused has been able to rebut the presumption U/[SECTION] [ACT]. In order to answer this question, it is important to see the cross examination of the complainant, defence of the accused and arguments of the parties.
17. In the affidavit filed by the AR of the complainant Mr. [ENTITY], in post summoning, he has stated that accused had approached his father on 4.6.2002 for a friendly loan of Rs. 1,00,000/ and his father had given the loan on 5.6.2002 in the presence of one Sh. [ENTITY] and at that time the accused had issued the impugned cheque as postdated cheque in favor of his father for returning the loan amount within a period of one month. He further stated that the complainant requested the accused several times after 17.7.2002 to return the amount in cash but the accused kept on requesting for time and finally cheque was presented on 20.11.2002. In his cross examination, Mr. [ENTITY] on being questioned admitted that in the month of August, 2002 he had wanted to purchase a Swaraj Mazda Bus which he asked the accused to purchase in his name while he paid the installments. He further stated that his father used to stay at home after retirement from RML Hospital and used to frequently give loans to the accused and had given loan of Rs. 1,00,000/ to the accused many times without any formal agreements. He admitted that for cheque bearing no. 831573 he had not given any loan to the accused nor had he taken any amount as repayment. He denied the suggestion that the cheque Ex. CW1/A was given to his father by the accused which was misplaced and another cheque bearing no. 831573 was handed over in its place which was encashed. The complainant in his affidavit has failed to mention cheque bearing no. 831573 and the reason for which the same was given by the accused to Mr. [ENTITY]. The complainant has further failed to examine Mr. [ENTITY] in support of his claim, while Mr. [ENTITY] seems to be a pertinent witness.
18. Counsel for the complainant stated that there is a clear cut liability and there is no doubt that the accused had issued cheque in favor of the complainant. The accused has not denied the issuance of the cheque, however, he has denied the liability. Counsel for the accused stated that when the accused was told that the impugned cheque dt. 17.7.2002 was stated to be misplaced, another cheque dt. 20.7.2002 was issued by the accused which was encashed. It is further argued that the AR has failed to establish the reason for which the cheque dt. 20.7.2002 was issued. It is further argued that cheque dt. 20.7.2002 was deposited on the same date while the cheque dt. 17.7.2002 was deposited in November, 2002. The same raises doubt regarding intention of the complainant/ AR as the cheque dt. 20.7.2002 was deposited before cheque dt. 17.7.2002. Also the AR has not been able to show the reason for which the cheque dt. 20.7.2002 was issued by the accused. The test for determining the liability is of preponderance of probabilities and the same lies in favor of the accused.
19. In the considered opinion of the Court, in view of the legal provisions and case law discussed, the accused is held not guilty for the offence u/[SECTION] [ACT] and is accordingly, acquitted.
Announced in open Court Place: New Delhi Date: 05.03.2012 ([ENTITY]) MM ([ACT] New Delhi