1 IN THE COURT OF SHRI [ENTITY], MM(NI ACT)-08 DWARKA COURTS:NEW DELHI CC NO:3214/12 Unique Case ID No: R0544932009 Smt. [ENTITY], W/o Sh. [ENTITY], R/o Flat No. 133, DIN Apartment, Plot No.7, Sector-4, Dwarka, New Delhi Complainant Versus Sh. [ENTITY] S/o Late Sh. [ENTITY], R/o H.No. 721/17, Mohalla Mahajan Parav, Approach Road, Rohtak, Haryana also at M/s Om Jewellers 177-A, K P Block Market, Pitampura, New Delhi-34 Accused 1. Name of the complainant : Smt. [ENTITY] 2. Name of the accused : Sh. [ENTITY] 3. Offence Complained of or proved : Under [SECTION] of [ACT] 4. Plea of the Accused : Pleaded not guilty 5. Date of filing : 09.07.2009 6. Date of Institution : : 10.07.2009 7. Date of reserving judgment/order : 02.12.2013 8. Final Order/Judgment : Convicted 9. Date of pronouncement : 20.12.2013 CC NO:3214/13 Smt. [ENTITY] vs [ENTITY] 2 JUDGMENT
BRIEF FACTS AND REASONS FOR THE DECISION OF THE CASE:-
1. Vide this judgment, I shall dispose of the present complaint u/[SECTION] of the [ACT] (in short, [ACT]) filed by the complainant against the accused.
2. The case of the complainant is that complainant started a business with accused [ENTITY] and one Sh. [ENTITY] in the name and style of Dhanlaxmi Trading Company (hereinafter referred to as the Firm) and executed a partnership deed on 30.08.2007. As per clause 13 of the partnership deed accused gave a verbal one month notice to its partners on 09.07.2008 seeking to retire from the Firm. On 22.08.2008 accounts were settled between the complainant and the above two partners and an agreement was executed in this regard. As per the agreement both the accused and Sh. [ENTITY] would pay a total amount of Rs. 5 lacs to the complainant on equally sharing basis i.e 2,50,000/- lacs each. In discharge of his debts/liability towards the complainant, accused issued a cheque bearing no. 796951 dated 10.02.2009 in the sum of Rs. One lac drawn on Syndicate Bank, Rohtak in favour of the complainant. According to the complainant, the aforesaid cheque when presented for realisation, was received back dishonoured vide bank return memo dated 31.03.2009 (received by the complainant on 30.04.2009) with the remarks "Insufficient Funds". Consequentially, a legal notice dated 27.05.2009 was served by the complainant through his Counsel upon the accused vide Regd. post and U.P.C dated 28.05.2009 calling upon the accused to make the payment towards the cheque amount in question within 15 days of receipt of notice. According to the complainant, the said notice was duly served upon the accused but no payment against the above dishonoured cheque has been made by the accused within the requisite period. Hence the present complaint.
CC NO:3214/13 Smt. [ENTITY] vs [ENTITY]
3. The cognizance of offence under [SECTION] of the [ACT] was taken by the Ld. Predecessor Court and accused was summoned vide order dated 10.07.2009, upon which the accused appeared in Court and was admitted to bail. Thereafter, separate notice u/[SECTION] [ACT] explaining accusations against the accused u/[SECTION] of the [ACT] was framed on 14.08.2012 to which he did not plead guilty and claimed trial. An application filed by the accused u/[SECTION] [ACT] seeking cross examination of the complainant was allowed and accordingly complainant was cross examined. Vide separate statement of Ld. Counsel for complainant, CE stands closed on 29.04.2013. Statement of accused u/[SECTION] [ACT] was recorded on 09.05.2013.
An application filed on behalf of the accused u/[SECTION] [ACT] seeking his examination as DW was allowed and the accused deposed as DW1. Vide separate statement of Ld. Counsel for accused, DE was closed on 02.07.2013.
4. Documents relied upon by the complainant are as follows:-(i) Ex. CW-1/A :
Agreement regarding settlement of accounts; (ii) Ex. CW1/B1: Original Cheque no. 796951 dated 10.02.2009 for a sum of Rs. One lac drawn on Syndicate Bank, Rohtak: (iii) Ex. CW-1/B2: Original Cheque return memo dated 31.03.2009; (iv) Ex. CW-1/D Copy of Legal Notice dated 27.05.2009
(iv) Ex. CW-1/E to Ex. CW-1/E-4: Registered A.D and UPC Receipts (v) Ex.
CW1/F: Signed Registered A. D Card received back by the complainant(vi) Ex. CW1/H: Envelope containing the legal notice received back by the complainant unserved and (vii) Ex. CW1/DA Partnership Deed.
5. It is well settled position that to constitute an offence under [SECTION] [ACT], the following ingredients are required to be fulfilled,- (i) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account; (ii) The cheque should have been issued for the discharge, in whole or in part, of any debt or other liability; (iii) that cheque has been presented to the bank within a period CC NO:3214/13 Smt. [ENTITY] vs [ENTITY] of six months from the date on which it is drawn or within the period of its validity whichever is earlier; (iv) 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; (v) 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; (vi) 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.
6. Being cumulative, it is only when all the aforementioned ingredients are satisfied that the person who had drawn the cheque can be deemed to have committed an offence under [SECTION] of the Act.
7. I have gone though the record and also heard both the parties. During his examination u/[SECTION] [ACT], the accused admitted receipt of legal notice by [ENTITY], daughter of his elder brother, on his behalf. Accordingly, the only question which arises for consideration of this Court is as to whether a legally recoverbale debt was in existence in favour of the complainant and agaisnt the accused on the date of the cheque in question. The same may now be considered.
8. [SECTION] of the [ACT] inter alia provides 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 the discharge of, whole or part of any debt or liability . The said presumptions are rebuttable in nature.
9. It has been held in M/s. Kumar Exports v. M/s. Sharma Carpets, 2009 CC NO:3214/13 Smt. [ENTITY] vs [ENTITY] A.I.R. (SC) 1518 that the accused may rebut these presumptions by leading direct evidence and in some clear and exceptional cases, from the case set out by the complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial. Further, the burden may be discharged by the accused by showing preponderance of probabilities and the onus on the accused is not as heavy as it is on the complainant to prove his case. Ld. Counsel for the accused also relied upon [PRECEDENT], [PRECEDENT], [PRECEDENT] [PRECEDENT] and [ENTITY] Vs. State of Himachal Pradesh (1973) 2 SCC 808 in support of the legal preposition that burden on the accused to disprove the above presumptions is not as heavy as it is on the Complainant to prove its case.
10.The deposition of the Complainant in a nutshell is that she started a business in commodity trading in the month of August 2007 with the accused and another partner namely [ENTITY] (hereafter referred to as the third partner) in the name of Dhanlakshami Trading Company having its office at 1167, 2nd Floor, New Market, Kucha Mahajani, Chandani Chowk, Delhi - 06 and also at 102, First Floor, Building No. 2574/6, Bedonpura, Ajmal Khan Road, Karol Bagh, New Delhi - 05 and a Partnership Deed Exh. CW1/DA was executed between herself, the accused and above said [ENTITY] on 30.08.2007. That in terms of clause 13 of the above Parnership Deed, she gave the accused and the third partner Shri [ENTITY] a verbal one month notice on 09.07.2008 seeking retirement from the Partnership Firm and the other two partners accepted the said verbal notice and did not have any objection to it. That the accounts were settled between the three partners on 22nd August, 2008 and an agreement Exh. CW1/A was executed between all the partners. That it was settled between them that the accused as well as Shri [ENTITY] would pay CC NO:3214/13 Smt. [ENTITY] vs [ENTITY] total amount of Rs. 5 Lacs to her on equal sharing basis i.e., Rs. 2,50,000/- each out of which the accused and Shri [ENTITY] together paid to the Complainant Rs. One Lac. That towards the abvoe admitted liability, the accused issued the cheque in question (Exh. CW1/B1) in the sum of Rs. One Lac. She also stated in para 7 of her Complaint as well as her affidavit of evidence Exh. CW1/1 that the Dishonour Memo dated 31.03.2009 (Exh. CW1/B2 ) was received by her on 30.04.2009.
11.The accused admitted the partnership deed Exh. CW1/DA during his examination u/[SECTION] [ACT] and also while deposing as DW1. The accused deposed as DW1 that a Partnership Deed was executed between him, the Complainant and the third partner [ENTITY] in the year 2007 for starting business of commodity trading by the name of Dhan Laxmi Trading Company. That as per the said deed the total capital of the firm was to be Rs. One lac which was to be contributed equally by all the three partners. That, thereafter, he took a shop located at Chandani Chowk on rent as office of the Firm. He further deposed that he asked for capital contribution from the other two partners repeadedly but nobody contributed anything. That therefore, he also did not contribute any capital. He further stated that as he was not able to afford the rent of the shop located at Chandni Chowk, he vacated the said shop after some time. That another shop located at Karol Bagh was also taken on rent in the name of the Firm. He further stated that the Complainant opened an account in her name with Paras Ram Trading Company and suffered losses in the said trading. He further stated that the Complainant started making threatening phone calls to him. That after the year 2008, [ENTITY], the Complainant and [ENTITY] came to the shop along with some other people, whose names he did not know, and the Complainant demanded payment from him. That the Complainant got signed blank cheques and some blank papers by threatening him. That he received a shock and also suffered CC NO:3214/13 Smt. [ENTITY] vs [ENTITY] heart attack. He also stated that he reported the matter to Pitam Pura Police Station.
12.The accused also filed a copy of a letter dated 03.03.2009 written by him to SHO, PS Pitam Pura, Delhi-88 as Ex.DW1/1 and a copy of application for opening of bank account in the name of the Firm in the Nanital Bank Ltd, Tilak Nagar Branch as Mark A. He also filed a copy of the rent agreement dated 21.08.2007 entered between the landlady namely Smt. [ENTITY] and M/s Dhanlaxmi Trading Company for taking on rent the office located at Kucha Mahajan, Chandni Chowk, Delhi for the firm as [ENTITY]
13.It emerges from the above testimonies that other than the Partnership Deed Exh. CW1/DA, which is an admitted document, the agreement Exh. CW1/A is the most crucial document having a bearing on the liability of the accused towards the Complainant on the date of the cheque in question. The said document may now be examined. It bears the date of execution as 22.08.2008. It also bears the attestation of the Notary Public on the same date. The agreeemnt mentions the accused and Shri [ENTITY] collectively as the first party and the Complainant as the second party. It goes on to record that a Partnership Deed was executed between the parties on 30.08.2007 to carry on the business of Commodities in the name of M/s Dhanlaxmi Trading Company running its business from Chandani Chowk and Karol Bagh addresses already mentioned in para 10 above. It then records the deisre of the Complaiant to retire from the business and also that the same was accepted by the accused and [ENTITY]. After referring to Clause 13 of the Partnership Deed (Exh. CW1/DA) it mentions one month's verbal notice given by the Complainant on 09.07.2008. It then records settlement of accounts in para 3 as per which the First Party would pay total amount of Rs. Five lacs to the Second Party out of which Rs. One lac has been paid to the Second Pary by the first party and the remaining Rs. Four lacs would be paid by the First Party to the Second Party. It CC NO:3214/13 Smt. [ENTITY] vs [ENTITY] then records that the accused would pay Rs. Two Lacs through two cheques No. 796951 (same as the cheque in question Exh. CW1/B1) and 796953 drawn on Syndicate Bank, Rohtak. It is pertinent to note that the above cheque number as well as the name of the above bank have been filled in long hand and the insertion is attested by the accused by signing in the left margin nearby and by the Complainant in the right hand margin nearby. It is also recorded in para 4 that the above amount was towards initial amount invested by the second party and profit earned up to date of retirement from the business. The agreement is signed by the accused, the Complainant and the third partner [ENTITY] and is also witnessed by one [ENTITY] and [ENTITY]. In the far end, it bears the seal and the signature of the Notary Public.
14.Now I advert to the testimony of the accused /DW1, which is full of contradictions. During his examination in chief, as noted in para 11 above, he stated that none of the partners contributed any capital towards the business of the Partnership Firm. He admitted his signatures on the second page of agreement Exh. CW1/A. However, he stated that he had a doubt whether his signature also appeared on the first page of the said document. It is pertinent to note that the accused did not bring any positive evidence in the nature of a handwriting expert to prove that the signature appearing on the first page of the above agreement were not his. The same leads to a strong inference that the accused sought to raise doubt regarding his signatures on the first page of the said document only to escape his liability towards the Complainant.
15.The accused also stated during cross examination that he reported the matter to the Police five-six months after the above agreement/cheque in question was got signed from him by force. He also stated that he did not make a call at 100 number. It is contrary to ordinary human behaviour that even when a man is forced by anti-social elements to sign blank cheques and blank papers and receives threats to his life, he does not care to file any police complaint CC NO:3214/13 Smt. [ENTITY] vs [ENTITY] immeditaly or at the first available opportunity. It is also contrary to human behaviour that such a person would not even make a telephone call to the Police. The allegation by the accused of Complainant obtaining his signatures on blank papers (meaning the agreement Exh. CW1/A) by use of force also stands belied by the fact that the cheque numbers and the name of the Bank are inserted in Para 3 of the said agreement in long hand and the insertion has been attested by the accused himself by putting his signature in the left hand margin nearby and also by the Complainant by putting her signature in the right hand margin nearby. Now, if the signatures of the accused were obtained on blank papers, as alleged by him, his signatures ought to have appeared only at the bottom on each page beacuse in that case the Complainant would not have known that an attestation of the above insertion would also be required in the above margin , in the middle of the page.
16.It may also be noted that the agreement Exh. CW1/A is attested by the Notary Public. In the face of the said attestation, it does not lie in the mouth of the accused to allege use of force. Rather, the said attestation also raises a strong inference that the agreement Exh. CW1/A was signed by all the parties with their free will and consent, after fully understanding the contents of the said agreement. It was for the accused to prove use of force by the Complainat/ absecne of his free consent and one such means was by calling the Notary Public concerned as a witness. However, the accused did not make any effort in the said direction.
17.Even the Police Complaint Exh. DW1/A which was admittedly filed 6-7 months after the execution of the agreement Exh. CW1/A, goes contrary to the version of events put forward by the accused. It records that sometime back, they three people took a shop at Chandani Chowk on rent in partnership on equal sharing basis but suffered heavy losses, which was also to be shared equally. It then alleges that [ENTITY] (husband of the complainant) says that CC NO:3214/13 Smt. [ENTITY] vs [ENTITY] he has nothing to do with the loss and demands return of the entire money which he invested in the business. Now, this is a document filed by and relied upon by the accused hiself. First and foremost, how could the firm suffer losses if no capital at all was invested by any of the partners? Further, in the Police Complaint itself it is admitted in clear terms that [ENTITY], i.e, husband of the Complainant, had invested money in the business started by "we three people", i.e., the Complainant, the accused and [ENTITY]. This admission alone is sufficient to demolish the defence of the accused that the Complainant never invested any capital in the Firm.
18.The accused was also confronted by Ld. Counsel for the Complainant with the statement in the above Police Complainant that "sometimes before we three people took a shop at Chandani Chowk on rent and opened the partnership on the condition that the profit/losses would be shared fully. After sometime, due to heavy losses on the shop we stopped the business with consent and started calculating the loss" [English translation by the Court]. The accused stated that the heavy losses referred to in the above Police Complaint related to expenditure on purchase of AC, mats, chairs, inverters, mobile phones and many other things due to which they suffered losses. He further stated that these articles were at that time kept at Chandani Chowk shop and were later shifted to Karol Bagh shop. Now, even when taken at face value, these statements establish two things, (i) that capital was collectively invsted in the business of the firm at least to the extent of purchase of the above furniture and other articles, which is contrary to the stand taken by the accused that no partner invested any capital at all; (ii) that the above said articles, purchsed with collective capital, were used at both the Chandani Chowk and Karol Bagh shops, meaning thereby that the above said shops were meant for the business of the firm namely Dhan Lakshmi Trading Company for transacting business on its behalf. Now weighing the above statements on the scale of logic, it is CC NO:3214/13 Smt. [ENTITY] vs [ENTITY] incredulous that after entering into a Partnership Deed and after setting the business well by purchasing the furniture/other articles and taking the above shops on rent, no business at all was transacted for more than a year. It is unheard of that when partners of a firm sit down to calculate losses of the firm, they do so inrespect not of the trading losses but in respect of furniture and fixtures! The above statments only show that the above defences were taken by the accused only as an after thought, to escape the criminal liability.
19.The accused also stated during his cross examination that the Karol Bagh shop was in the collective custody of the Complainant, her husband [ENTITY] and [ENTITY]. He further stated that the above peole used to sit at the karol Bagh ship and used to wait for the commodity trading business to come. These statements again depict the true state of affairs to the extent the the above said shop was used by the partners of the Firm for conducting the business of the Firm.
20. The accused further stated that he used to conduct some business in the name of Dhan Lakshmi Trading Company from the Chandani Chok shop sometime after the Complainant retired from the business and [ENTITY] continued to be a partner after retirement of the Complainant. Now, this statement is clear acknowledgment of two facts by the accused (i) that the above shop at Chandani Chowk was also meant for the Firm; and (ii) that the Complainant was a Partner in the said firm and also retired from it.
21.At this stage, the accused again made many self contradictory statments as "Dhan Lakshmi Trading Company was closed long time back. Again said I do not know if [ENTITY] is still running Dhan Lakshmi trading Company. [ENTITY] never retired from Dhan Lakshmi Trading Company. Dhan Kakshmi Trading Company never transacted any business. Dhan Lakshmi Trading Company did not even transact a business of worth one rupee." When contrasted with the deposition of the accused noted in the preceding two paras, CC NO:3214/13 Smt. [ENTITY] vs [ENTITY] it clearly emerges that the above statments are just another example of self contradictory and untenable defences taken by the accused, which can not be relied upon.
22.The testimony of the accused further loses credence when the rent agreement Mark B, filed by the accused himself, is closely examined. It bears the date of execution as 21.08.2007 and is also attested by a Notary Public on the same date. It mentions the landlady Smt. [ENTITY] as first party and M/s Dhanlaxmi Trading Company, through its Partners namely the Complainant, the accused and [ENTITY] collectively as the second party and records the agreement of the landlady to let out the office located at Chandani Chowk on hire of Rs. 12,000/- per month. The accused stated during his cross examination that he vacated the Chandani Chowk shop after around one year from the date of the rent agreement. Now, it would have been impossible for the accused or the Firm to bear the above rent of Rs. 12,000/- per month without any partner contributing any capital at all.
23.It is also pertinent to note that the cheque in question was returned dishonoured with the remarks 'Funds Insufficient'. The accused stated during his cross examination that he did not remember whether he had stopped the payment of the cheque in question. Now, it is very difficult to understand that if the cheque in question was obtained from the accused by force, then what prevented him from stopping the payment of the said cheque?
24.During his examination in chief as DW1, the accused stated that "another shop located at Karol Bagh was also taken on rent in the name of the firm" but took a U-turn duirng his cross examintation and stated that he did not take any other shop on rent on behalf of Dhan Lakshmi Trading Company. When Ld. Counsel for the Complainant confronted him with the above statement, he stated that "the said shop at Karol Bagh was not taken on rent for Dhan lakshmi Trading company. Again said - I thought the Ld. Counsel was asking CC NO:3214/13 Smt. [ENTITY] vs [ENTITY] whether I took any other shop at Chandani Chowk on rent for Dhan Lakhsmi Trading Company ". However, very interestingly, the accused stated later during his cross examination that "The Karol Bagh shop was take on rent in the name of Dhan Lakshmi Trading Company as no other suitable name came to the mind". These twists and turns taken by the accused during his depostion further reduce his credibility. It rather firmly establishes the fact, by his own deposition, that the above said shop at Karol Bagh was taken on rent for transacting business in the name of the Firm i.e., Dhan Lakshmi Trading Company.
25.Further, as noted above, the accused stated during his chief examination that the Complainant suffered losses on account of trading in Parasram Trading Company. Now, how did the accused come to know about alleged losses suffered by the Complainant on account of her trading in the Parasram Trading Company? It raises a stong inference that the said account was operated by the accused and also that the said account was just a device to trade in the shares on the understanding that the profits/losses arsing out of the said trading would belong not to the Complainat but to the Firm.
26.Now I shall advert to the testimony of the Complainant and the argumens advanced by Ld. Counsl for the accused. Ld. Counsel drew the attention of the Court to Clause 4 of the Partnership Deed Exh. CW1/DA as per which the partners were free to carry on any business with mutual consent and also to the statement made by the Complainant during her cross examination that she did not do a single transaction from the current account opened in the name of the Firm at the Nainital Bank Ltd, Tilak Nagar Branch and did not deposit even a single rupee in the said account. Ld. Counsel further cited admission by the Complainant that she had a trading account in the name of Paras Ram Trading Company and also received Rs. One Lac from the said company through cheque in the year 2008. On the basis of the above statements, Ld. Counslel CC NO:3214/13 Smt. [ENTITY] vs [ENTITY] for the accused argued that the Complainant did the business of shares independently through Parasram Trading Company and suffered losses on account of the said trading. Ld. Counsel, while citing clause 4 of the Partnership Deed Exh. CW1/DA, sought to argue that for the losses suffered by the Complainant in her individual capacity, the other two partners could not be held accountable. Ld. Counsel for the accused also pointed out the admission by the Complainant during her corss examination that she had not filed any proof regarding investment of Rs. Five Lacs in Dhanlaxmi Trading Company. Ld. Counsel argued on the strength of the above admission that as the investment in the Firm by the Complainant itself was not proved, there was no question of the other partners including the accused being liable to pay any sum to the Complainant.
27.I have carefully considred the above sumbissions of the Ld. Counsel. It is also pertinent to note the statement of the Complainant during her cross examination that the trading account in her name in Paras Ram Trading Company was opened for the purpose of trading on behalf of Dhan Lakshmi Trading Company. She also stated that she had given a blank cheque after filling the amount of Rs. Five Lacs to the accused on his advise that same should be invested in the name of Dhanlaxmi Trading. She also stated that the other two partners used to maintain the acount of Dhanlaxmi Trading and used to tell her from time to time that the said Firm was making profits and the same were being re-invested.
28.The above arguments of Ld. Counsel for the accused are not tenable in the face of finding given by me above, on the basis of the testimony of the accused himself, that the account opened in the name of the Complainant with the Parasram Trading Compay was just a device to trade in the shares on the understanding that the profits/losses arsing out of the said trading would belong not to the Complainat but to the Firm and also that the above account CC NO:3214/13 Smt. [ENTITY] vs [ENTITY] was managed not by the Complainant, but by the accused on behalf of the firm.
29.In my considered opinion, so long as the business of commodity trading was transacted with the help of the above Rs. Five Lacs, the said investment was in confirmity with the Partnership Deed Ex.CW1/DA as the said Deed only mentioned the business of the firm as Commodity Business and nowhere put the restriction that the said business was to be transacted through the account opened in the name of the said Firm only. Thus, the above investment of Rs. Five lacs by the Complainant would also be counted as an investment in and towards the business of the firm.
30.Ld. Counsef for the accused also laid emphais on Arbitration Clause in para 15 of the Partnership Deed Exh. CW1/DA to argue that the partners were under an obligation to refer all the disputes to the Arbitrator and the present complaint, which was lodged without first exhausting the remdey of arbitraion, was not maintainable. This arugument lacks force on the face of it for the reason that a criminal complaint u/[SECTION] [ACT] can be lodged by any payee or holder in due course if the preconditions set out in that Section are satisfied. Secondly, the nature of proceedings under the said Section is criminal in nature while arbitration is civil remedy and both of them operate independently of each other. Thus, invoking of arbitration clause by the payee/holder in due course, where it existed, is not a pre-condition for lodging a complaint u/[SECTION] [ACT].
31.From the above discussion, I am of the considered opinion that the accused has failed to raise any probable defence or to show, even by preponderance of probabilities, that the complainant used force upon him while obtaining the cheque in question. He has also failed to rebut presumptions arising in favour of the complainant u/[SECTION] and [SECTION] [ACT] either with the aid of his own testimony or by assailing the evidence of the complainant or through her cross examination.
CC NO:3214/13 Smt. [ENTITY] vs [ENTITY]
32.Ld. Counsel for the accused also took this defence that the cheque Exh. CW1/B1 was only signed by the accused blank and the remaining particulars had not been filled by him. In view of the same, Ld. Counsel argued that offence u/[SECTION] [ACT] was not made out against the accused. This argument may now be examined.
33.Section 20 [ACT] provides for "inchoate stamped instruments" and states that if a person signs and delivers a paper stamped in accordance with the law and "either wholly blank or have written thereon an incomplete negotiable instrument" such person thereby gives prima facie authority to the holder thereof "to make or complete as the case may be upon it, a negotiable instrument for any amount specified therein and not exceeding the amount covered by the stamp."
34.The position in law has been explained in the judgment of the Division Bench of the Kerala High Court in [PRECEDENT] in the following words:
"In the instant case, signature is admitted. According to the drawer of the cheque, amount and the name has been written not by the drawer but by somebody else or by the payee and tried to get it encashed. We are of the view, by putting the amount and the name there is no material alteration on the cheque under [SECTION] of the [ACT]. In fact there is no alteration but only adding the amount and the date. There is no rule in banking business that payee's name as well as the amount should be written by drawer himself. "
35.The above judgment was quoted with agreement by the Hon'ble Delhi High Court in [PRECEDENT] and it was held that if the signatures on the cheque are admitted by the accused, it matters little if the name of the payee, date and amount are filled up at a subsequent point in time. In view of the judgments discussed above, the present contention of the CC NO:3214/13 Smt. [ENTITY] vs [ENTITY] Ld. Defence Counsel also has no force in the eyes of law.
36.Now authorities relied upon by Ld. Counsel for the accused along with arguments made on the point of law be cosidered. While relying upon [ENTITY] (supra), Ld. Counsel also argued that even before the presumption u/[SECTION] and [SECTION] [ACT] arise in favour of the Complainat, ingredients of [SECTION] [ACT], inluding the existence of legally recoverable debt in her favour is to be proved by the Complainant. Taking the said argument forward, Ld. Counsel stated that for the said presumption to arise in favour of the Complainant, she was bound to prove the agreement Exh. CW1/A. Ld. Counsel also argued that mere admission by the accused of his signatures on the said agreement does not amount to proof of contents of the said agreement and that the Complainant herself was bound to prove the said document independent of the above admission of signatures by the accused. Ld. Counsel also relied upon [PRECEDENT] and [PRECEDENT] on this point.
37.Ld. Defence Counsel also relied upon [PRECEDENT] to argue that consent by a party to exhibit a document does not amount to an admission of its contents. Ld. Counsel further argued that a party has a right by cross examination to show that the document is not genuine.
38.Ld. Defence Counsel, while relying upon [PRECEDENT] contended that presumption u/[SECTION] shall be drawn in favour of the Complainant only if is established by evidence and other material on record that she was the "holder" of the cheque issued by the accused and that in absence of such evidence or other material, the Complainant could not be relieved of the burden of proving the ingredients of the offence u/[SECTION] [ACT]. Ld. Counsel also relied upon [PRECEDENT] to contend that the rebuttable CC NO:3214/13 Smt. [ENTITY] vs [ENTITY] presumption u/[SECTION] [ACT] operates only in favour of a payee or holder in due course but not in favour of a person who without consideration became the holder of the cheque.
39.Ld. Counsel also relied upon [PRECEDENT] to argue that the presumption u/[SECTION] extends ony to the issuance of cheque towards discharge of a legally enforceable debt of liability and it has to be raised only after the Complainant establishes that such debt or liability in fact existed as on the date of the cheque in question and that the cheque was given to her by the accused. On the strength of the above authority, Ld. Defence Counsel argued that the Complainant in the present case was bound to show what business was run by the partners of the Firm in question to prove the existence of liability in her fovour.
40.On the basis of [PRECEDENT], Ld. Defence Counsel contended that a Court shall draw presumption u/[SECTION] [ACT] only if all the requirements for drawing the said presumption are established by the Holder of the cheque, which requirements are that (i) the person in whose favour the presumption is drawn is the holder of the cheque; (ii) the cheque is of the nature stated in [SECTION] [ACT]; and (iii) that such cheque is received by the holder. Deriving strength from the same authority , Ld. Counsel also contended that the expression "received" used in [SECTION] [ACT] could not be equated with the expression "issued" meaning executed.
41.While relying upon [PRECEDENT]. Defence Counsel contended that the accused could prove non- existence of consideration for which the cheques were issued and if the accused discharges the initial onus of proof by showing that esixtence of consideration is improbable or doubtful or illegal, the onus of proof would shift to the Complainant.
CC NO:3214/13 Smt. [ENTITY] vs [ENTITY]
42.With the aid of [ENTITY] Vs. Sri Eshwar 2009 (4) [CASE NUMBER] Ld. Defence Counsel also sought to contend that in order to raise presumption u/[SECTION] [ACT], the Complainant has to establish the fact that it was she who received from the acused the cheque in question. Ld. Counsel further argued that when the very factum of delivery of the cheque in question by the accused to the Complainant was seriously disputed, the said presumption would not arise.
43.Ld. Defence Counsel while relying upon [PRECEDENT] [PRECEDENT] also contended that execultion of a document means something more than mere signing and that the doucment must be stated or read out to the executant and only thereafter the executant enters into an obligation under the said document. Ld. Counsel also relied upon [PRECEDENT] to contend that where the issue before the Court was as to whether the contents of a doucment are correct, it was not enough to prove the signature of the person who signed the said doucment. It could be proved only by calling the person who could depose as to the correctness of the contents of the document and who had a personal knowledge of the contents of the doucment. Ld. Defence Counsel thus argued that it was for the Complainant to prove the agreement Exh. CW1/A by examining the two witnesses named in the said agreement. Ld. Counsel, while relying upon [PRECEDENT] also argued on the same line that when the execution of a doucment is denied, the party seeking to prove that document must not only prove that the alleged executant has signed that document, but he must also prove that the executant had signed the same with the knowledge of its contents.
44.Ld. Counsel for the Complainant made forceful submissions in rubuttal of the above submissions on law point advanced by the Ld. Counsel for the accused CC NO:3214/13 Smt. [ENTITY] vs [ENTITY] and also replied upon the following authorities in support of the same,- (i) [PRECEDENT]; (ii) [PRECEDENT]; (iii) [PRECEDENT];
(iv) [PRECEDENT]; (v) [PRECEDENT]; (vi) [PRECEDENT];
(vii) [PRECEDENT]; (viii) [PRECEDENT]; (ix) [PRECEDENT]; and (x) [ENTITY] Vs. Sri Mohan (2010) 11 SCC 441.
45.The above authorities may now be discussed. The arguements advanced by Ld. Counsel for the accused on the basis of the authorities relied upon by him fall into the following two borad heads, (i) That there was no presumption of existence of legally enforceable debt or liability in favour of the Complainant u/[SECTION] [ACT] and it was for the Complainant to prove the same as a matter of fact; (ii) That the said burden to prove the debt by the Complainant did not get discharged merely by admission of signatures by the accused on the agreement Exh. CW1/A and it was for the Complainant to prove that agreement by calling the witnesses to the same.
46.The first argument concerns the scope of presumption u/[SECTION] [ACT] and the manner in which it can be raised. It would be useful to refer to some decisions of the Hon'ble Supreme Court on the above legal issue. In [PRECEDENT], it was held ([ENTITY], J. at Paras. 22-23) as follows:
"22. Because both [SECTION] and [SECTION] require that the Court `shall presume' the liability of the drawer of the cheques for the amounts for which the cheques are drawn, it is obligatory on the Court to raise this presumption in every case where the factual basis for the raising of the presumption has been established. It introduces an exception to the general CC NO:3214/13 Smt. [ENTITY] vs [ENTITY] rule as to the burden of proof in criminal cases and shifts the onus on to the accused ( ). Such a presumption is a presumption of law, as distinguished from a presumption of fact which describes provisions by which the court may presume a certain state of affairs. Presumptions are rules of evidence and do not conflict with the presumption of innocence, because by the latter all that is meant is that the prosecution is obliged to prove the case against the accused beyond reasonable doubt. The obligation on the prosecution may be discharged with the help of presumptions of law or fact unless the accused adduces evidence showing the reasonable probability of the non- existence of the presumed fact.
"23. In other words, provided the facts required to form the basis of a presumption of law exists, the discretion is left with the Court to draw the statutory conclusion, but this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary. A fact is said to be proved when, after considering the matters before it, the Court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists. Therefore, the rebuttal does not have to be conclusively established but such evidence must be adduced before the Court in support of the defence that the Court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of reasonability being that of the prudent man."
47.Similarly, in [PRECEDENT], Hon'ble Supreme Court observed as follows:
"Upon consideration of various judgments as noted hereinabove, the position of law which emerges is that once execution of the promissory note is admitted, the presumption under [SECTION] would arise that it is CC NO:3214/13 Smt. [ENTITY] vs [ENTITY] supported by a consideration. Such a presumption is rebuttable. The defendant can prove the non-existence of a consideration by raising a probable defence. If the defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the plaintiff who will be obliged to prove it as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument. The burden upon the defendant of proving the non-existence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies. In such an event, the plaintiff is entitled under law to rely upon all the evidence led in the case including that of the plaintiff as well. In case, where the defendant fails to discharge the initial onus of proof by showing the non-existence of the consideration, the plaintiff would invariably be held entitled to the benefit of presumption arising under [SECTION] in his favour. The court may not insist upon the defendant to disprove the existence of consideration by leading direct evidence as the existence of negative evidence is neither possible nor contemplated and even if led, is to be seen with a doubt. The bare denial of the passing of the consideration apparently does not appear to be any defence. Something which is probable has to be brought on record for getting the benefit of shifting the onus of proving to the plaintiff. To disprove the presumption, the defendant has to bring on record such facts and circumstances upon consideration of which the court may either believe that the consideration did not exist or its non-existence was so probable that a prudent man would, under the circumstances of the case, act upon the plea that it did not exist."
48.Further, in [ENTITY] Vs. Sri Mohan (2010)11 SCC 441, Hon'ble Supreme Court held that the presumption mandated by [SECTION] of the Act does CC NO:3214/13 Smt. [ENTITY] vs [ENTITY] indeed include the existence of a legally enforceable debt or liability. It was also observed that to that extent, the impugned observations in [PRECEDENT] might not be correct and were overruled.
49.Similarly, in the case of [PRECEDENT], Hon'ble Supreme Court has held that by virtue of [SECTION] of the [ACT], the Court has to draw a presumption that the holder of the cheque received the cheque for discharge of a debt or liability until the contrary is proved. In [PRECEDENT] also it has been held by the Hon'ble Supreme Court that under [SECTION] of the [ACT], the Court has to presume, in a complaint under [SECTION], that the cheque had been issued for a debt or liability.
50.After referring to both the above decisions, it was held by the Hon'ble Supreme Court in [PRECEDENT] that there was therefore no requirement that the Complainant must specifically allege in the complaint that there was a subsisting liability. The burden of proving that there was no existing debt or liability was on the accused, which he had to discharge in the trial(emphasis supplied).
51.The legal position which clearly emerges from the above decisions is that the presumption mandated by [SECTION] of the Act does indeed include the existence of a legally enforceable debt or liability and there was therefore no requirement that the Complainant must specifically allege in the complaint that there was a subsisting liability. Further, the said presumption arose in case signature on the cheqe in question was admitted by the accused, which is the position in the present case. The burden of proving that there was no existing debt or liability was on the accused, which he had to discharge in the trial. Only after the said presumption was rebutted by the accused, did the burden of CC NO:3214/13 Smt. [ENTITY] vs [ENTITY] proof shift upon the Complainant to prove the debt as a matter of fact. The accused sought to rebut the said presumption by alleging that the Complainant obtained his signatues on the agreement Exh. CW1/A and on the cheques in question by use of force. However, after consideration of the testimonies of the Complainant as well as the accused and of evidene on record, I have already held that the accused failed to show, even by preponderance of probabilities, that any force was used upon him by the Complainant. The accused also failed to rebut the presumptions arising in favour of the Complainant u/[SECTION] and [SECTION] [ACT], either through the cross examination of the Complainant or with the help of his own testimony.
52.In the light of the judgment of the Hon'ble Supreme Court in [ENTITY] (supra) the authorities of [ENTITY] Vs. State of Himachal Pradesh (1973) 2 SCC 808 (supra), [PRECEDENT] (supra) [PRECEDENT] (supra) and [PRECEDENT] (supra) relied upon by the accused are of little help to him.
53.The fact of [PRECEDENT] (supra) relied upon by the accused were different as in that case, the defence of the accused was that he had been mentally sick for the past 8 to 9 years prior to the alleged transaction. Because of the peculiarity of the disease, his mental condition was impaired. In such state of mind, he was in the habit of issuing cheques to various persons, without owing anything to them. The accused used to assume himself to be a very affluent person during such period. But people used to return such cheques understanding the peculiar and abnormal habit of the accused. Ext.P1 (the cheque in question in that case) was one of such cheques issued to complainant which was misused by the complaint to file the complaint. The accused actually did not owe any money to complainant and he did not issue any cheque for the discharge of any debt or CC NO:3214/13 Smt. [ENTITY] vs [ENTITY] other liability, as alleged. On an analysis of the evidence, particularly medical evidence adduced by accused, the Ld. Trial Court found that prosecution failed to establish that Ext.P1 cheque was issued by the accused for the discharge of a debt and hence the accused was acquitted. The facts of the present case are, however, entirely different as the accused admitted signatures on the cheques in question and also failed to prove the defence of use of force by the Complainant.
54.Similarly, the reliance placed by Ld.counsel for the accused on [PRECEDENT] (supra) is, in my humble opinion, misplaced as the issue before the Hon'ble Andhra High Court with reference to [SECTION] [ACT] was whether the presumption in [SECTION] in favour of the holder of a cheque was violative of the guaranteed fundamental right of an accused person under [SECTION] of the [ACT] The Court answered the said question in the negative and held that it was incumbent on the Court, in a prosecution under [SECTION], unless the contrary is proved, to draw the inference that the cheque received by its holder was a cheque of the nature referred to under [SECTION] for the discharge, in whole or in part, of any debt or other liability. It further held that the said presumption was displaced only when the truth of the inference was disproved on other evidence.
55.It was no doubt observed by the Hon'ble Andhra High Court that the presumption incorporated in [SECTION] was not intended to cover all kinds of holders and it covered only the holder of a cheque "of the nature referred to in [SECTION]". It was further observed that only in respect of a cheque which was issued in discharge, in whole or in part, of a debt or other liability, the presumption operated in favour of the payee and as well as in favour of a holder in due course as defined in [SECTION]. The said observation, however, is also not of any help to the accued for, as already noted above from the CC NO:3214/13 Smt. [ENTITY] vs [ENTITY] decisions rendered by the Hon'ble Supreme Court that the presumption u/[SECTION] [ACT] arose in a case where the signatures on the cheque are admitted by the accused. The accused in the present case not only admitted his signatures but also admitted that the cheque in question was given to the Complainant herself. His defence of signatures being obtained by force has already been rejected by this Court. In such facts and circumstances, it was for the accused to rebut the presumption u/[SECTION] and [SECTION] [ACT] by showing, on the scale of pre- ponderance of probabilities, that the consideration of the two cheques in question was either absent or improbable or was illegal. However, the accused has utterly failed to prove any of the above grounds.
[PRECEDENT] (supra) relied upon by Ld. Counsel for the accused is also not of any help to the accused as the three requiements mentioned in the said judgment stand fulfulled. Further, the said judgment has to be read in conformity with [PRECEDENT] (supra) in which it was held by the Hon'ble Supreme Court that the presumption u/[SECTION] arose in favour of the Complainant in case the signatures on the negotiable instrument were admitted by the accused, that being squarely the case at present.
57.There can be no dispute about the legal postion laid down in [PRECEDENT] (supra) relied upon by the Ld. Defence Counsel that the accused could prove non- existence of consideration for which the cheques were issued and if the accused discharges the initial onus of proof by showing that esixtence of consideration is improbable or doubtful or illegal, the onus of proof would shift to the Complainant. However, the said decision is also of little help to the accused as he failed to rebut the presumptions u/[SECTION] and [SECTION] [ACT] in favour of the Complainant and thus failed to shift the onus of proof CC NO:3214/13 Smt. [ENTITY] vs [ENTITY] upon the Complainant.
58.The decision in [ENTITY] Vs. Sri Eshwar 2009 (4) [CASE NUMBER] (supra) relied upon by [ENTITY] for the accused was given by the Hon'ble High Court of Karnataka after relying upon the judgment of the Hon'ble Supreme Court in [PRECEDENT] (supra). However, the said legal position has been overruled by the Hon'ble Supreme Court in [ENTITY] (supra). That being so, ratio of [ENTITY] (supra) also loses legal force. Even the facts of the said case were also different as the Ld. Trial Court recorded a finding that whatever transaction took place, it took place between the husband of the complainant and the accused but not between the complainant and the accused. As the facts of the present case, which have already been noted elaborately in the preceding paras, are different, so on that ground also the ratio of [ENTITY] (supra) does not apply to the present case.
59.Now coming to the second part of the legal submissions advanced by the Ld. Defence Counsel that the burden to prove the debt by the Complainant did not get discharged merely by admission of signatures by the accused on the agreement Exh. CW1/A and it was for the Complainant to prove that agreement by calling the witnesses to the same.
60.I have already noted in the preceding paras the settled legal position that [SECTION] and [SECTION] [ACT] introduce an exception to the general rule as to the burden of proof in criminal cases and shift the onus on to the accused. If the accused is proved to have discharged the initial onus of proof showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the complainant who would be obliged to prove it as a matter of fact. However, as the accused miserably failed to rebut the said presumtions, the onus never shifted upon the Complainant in the present case to prove the debt/liability or to prove the agreement Exh. CW1/A. The CC NO:3214/13 Smt. [ENTITY] vs [ENTITY] decisions in [PRECEDENT] [PRECEDENT] (supra), [PRECEDENT] (supra) and [PRECEDENT] (supra) relied upon by the accused would have been applicable only when the onus would have shited to the Complainant. That not being the case, the ratio of the above authorities also has no application to the facts of the present case.
61.Finally, there can be no dispute about the legal postion laid down in [PRECEDENT] (supra) that consent by a party to exhibit a document does not amount to an admission of its content and a party has a right by cross examination to show that the document is not genuine. The said decision, however, does not aid the accused as he failed to assail the genuineness of the agreement Exh. CW1/A the Complainant stood her ground despite being cross examined at length on behalf of the accused.
Order
62.In view of my above findings, I hold that the complainant has been able to prove her case against the accused beyond reasonable doubt. Accordingly, accused [ENTITY] is convicted of the offence under [SECTION] of the [ACT]. Order on sentence shall be passed after hearing the convict. A copy of this judgment be given to the Convict dasti and free of cost.
Announced in open Court on ([ENTITY]) 20th December, 2013 (28 pages) [ACT], 20.12.2013/Delhi CC NO:3214/13 Smt. [ENTITY] vs [ENTITY]