IN THE COURT OF [ENTITY] METROPOLITAN MAGISTRATE (SOUTH) , N I ACT03, SAKET COURTS : NEW DELHI CC NO: 16868/2018 [ENTITY] son of Late Mr.[ENTITY] r/o H.No.A125, 2nd Floor, Paryavaran Complex, IGNO Road, New Delhi. Complainant Versus [ENTITY] son of Late [ENTITY], r/o Flat NO.36, Godawari Apartments, Alaknanda, New Delhi. Accused Offence Complained of or proved : under [SECTION] of [ACT] Plea of the Accused : Pleaded not guilty Date of filing : 20.11.2018 Date of Institution : 24.11.2018 Date of reserving judgment/order : 16.10.2019 Final Order/Judgment : Convicted Date of pronouncement : 21.10.2019 [PRECEDENT] [ENTITY] v. [ENTITY] Page 1 to 16 Judgment: 1.
Briefly stated, case of the complainant is that the accused approached the complainant for a friendly loan of Rs.3 lakhs in the month August 2013 for his company namely M/s Sachdeva Group of Finance and thereafter demanded further sum of Rs.1 lakh in July 2016. That the complainant handed over a sum of Rs.3 lakhs on 26.08.2013 and Rs.1 lakhs on 31.07.2016 by way of cheque respectively. That the accused assured and promised the complainant that he will pay the interest for the aforesaid loan and he also paid interest to the complainant in lieu of the aforesaid loan. That the accused after some time, stopped making the installment of interest and thereafter, promised the complainant that he will discharge his whole liability upto October 2018. That in view of his aforesaid liability, accused had issued two cheques in which one cheque bearing number 000006 dated 22.10.2018 for a sum of Rs.3 lakhs and 002658 dated 22.10.2018 for a sum of Rs.1 lakh drawn on HDFC Bank, Alaknanda, New Delhi (hereinafter referred to as the 'cheques in question') in favour of the complainant. That thereafter, the complainant presented the said cheques for [ENTITY] v. [ENTITY] Page 2 to 16 encashment and the same was returned unpaid upon presentation on account of "drawers signature differs" and "payment stopped by drawer" vide return memos dated 23.10.2018. That a legal notice dated 30.10.2018 was duly sent by the complainant to the accused in this regard, but to no avail. That the accused failed to pay the cheque amount within the prescribed period. Hence, the present complaint under [SECTION] of [ACT] (hereinafter referred to as '[ACT]').
2. Upon service of summons, accused entered an appearance on 21.02.2019 and was admitted to bail on 21.02.2019. Notice under [SECTION] [ACT] was served upon the accused on 21.02.2019 to which he pleaded not guilty and claimed trial. In his statement of defence, accused stated that in August 2017, there was an income tax raid at his office and residence and several documents were seized by the Income Tax Authority and during that raid, the cheques in question were also misplaced. The accused further deposed that he had filed the police complaint regarding the misplacement of cheques in question.
[ENTITY] v. [ENTITY] Page 3 to 16
3. The accused was thereafter allowed to cross examine the complainant under [SECTION] [ACT]. After closing of the complainant evidence, matter was fixed for recording statement of the accused under [SECTION] [ACT]. In the said statement recorded on 30.07.2019, accused stated that he had received a sum of Rs.4 lakhs from the complainant. He further stated that on 30.08.2017, his office and house was raided by Income Tax Authorities and whatever the documents which were lying at the aforesaid place were seized by the Income Tax Authorities. Thereafter, he got to know that some of the cheques including the cheques in question have got misplaced and for the same he had lodged a police report. Accused further deposed that he has never issued the cheques in question to the complainant.
4. Matter was thereafter fixed for defence evidence. Defence evidence was closed on 27.08.2019 and the matter was fixed for final arguments.
Evidence:
5. In order to support his case, complainant examined himself as CW1 and tendered his affidavit Ex.CW1/G into evidence [ENTITY] v. [ENTITY] Page 4 to 16 wherein averments made in the complaint were reiterated. He also relied upon various documents such as Ex.CW1/A & Ex.CW1/B which are cheques in question, Ex.CW1/C & Ex.CW1/D which are return memos, Ex.CW1/E which is the legal notice, Ex.CW1/F which is postal receipt. Thereafter, complainant evidence was closed.
6. Accused, on the other hand examined herself as DW1 and tendered his evidence.
DW1 deposed that in 2013, the complainant had given an amount of Rs.3 lakhs and Rs.1 lakh which he had already repaid to the complainant. DW1 further deposed that cheques in question were not signed by him and he did not know who has signed the same. DW1 further deposed that on 30.08.2017, Income Tax raid was conducted at his office and residence and all his documents, laptop, jewellary cash etc. and other material lying at his office have taken away by Income Tax official. DW1 again examined himself on allowing of the application under [SECTION] [ACT] wherein he deposed that he has lodged an online complaint on 22.09.2017 in respect to the misplaced cheque book and [ENTITY] v. [ENTITY] Page 5 to 16 other documents bearing Ex DW1/A. The law applicable:
7. I have heard the submissions made on behalf of the parties and have also perused the record. Before appreciation of evidence led on behalf of the parties, at the very outset, I would like to narrate the legal principles, relevant for adjudication of complaint under [SECTION] of [ACT].
Hon'ble Supreme Court of India in [PRECEDENT] page 422 held as follows:
(i) Once the execution of cheque is admitted [SECTION] of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.
(ii) The presumption under [SECTION] is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption [ENTITY] v. [ENTITY] Page 6 to 16 is that of preponderance of probabilities.
(iii) To rebut the presumption, it is open for the accused to rely on evidence led by him or accused can also rely on the materials submitted by the complainant in order to raise a probable defence. 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 they rely.
(iv) That it is not necessary for the accused to come in the witness box in support of his defence, [SECTION] imposed an evidentiary burden and not a persuasive burden.
The Hon'ble Delhi High Court has held in [PRECEDENT] on 1 August 2013 (DHC) that if the accused rebuts the presumption raised under [SECTION] and [SECTION] of [ACT] by adducing probable defence, then the leverage of presumption in the favour of the complainant vanishes and then the complainant has to prove the case on the touchstone of beyond the reasonable doubt like a regular [ENTITY] v. [ENTITY] Page 7 to 16 criminal trial.
Hon'ble Supreme Court of India in [PRECEDENT] at page 565 held that : " A person who does not pay within 15 days of receipt of the summons from the court along with the copy of the complaint under [SECTION] of the Act, cannot obviously contend that there was no proper service of notice as required under [SECTION], by ignoring statutory presumption to the contrary under [SECTION] of the [ACT] and [SECTION] of the [ACT] ".
Arguments and appreciation of evidence:
8. Counsel for the complainant has argued that all the requirements of [SECTION] [ACT] have been met with in the present case and hence, the accused be convicted.
Counsel for the accused has, on the other hand, argued that the cheque in question was not issued in discharge of legal liability and the same has been misused by the complainant and hence, the present case deserves to be dismissed. The [ENTITY] v. [ENTITY] Page 8 to 16 following points of determination are to be decided in the present case:
1. Whether the complainant is successful in raising the presumptions under [SECTION] read with [SECTION] of [ACT]?
2. If yes, whether the accused have been successful in raising a probable defence?
POINT OF DETERMINATION NO.1
9. The cheques in question bearing Ex.CW1/A and Ex.CW1/B are admitted by the accused to be his cheques but it has been stated by the accused that the afore said cheques have not been signed by him. During the framing of notice under [SECTION] [ACT], the accused has stated that the cheques in question were misplaced during the income tax raid. The accused deposed as a defense witness(DW1) and reiterated that during the raid of income tax on 30.08.2017, his laptop, documents etc were taken by the Income Tax Department and his cheque book has been misplaced since then. For the [ENTITY] v. [ENTITY] Page 9 to 16 misplaced cheques, DW1 also brought on record an online complaint regarding the lost cheque dated 22.09.2017 bearing Ex.DW1/A wherein inter alia it has been stated that he has misplaced some cheque leafs issued by HDFC bank which were handed over to his employees in different offices and the same have been misplaced. It is worthwhile to mention here that there is no whisper of any misplacement of the cheque due to the Income Tax raid on 30.08.2017 in Ex.DW1/A whatsoever. In addition to this, the accused in his cross examination dated 06.08.2019 has stated that:
"In year 2013 I took the money of Rs.4 lakhs from the complainant through cheque. It is correct that the said money has been encashed in my account. When I took the aforesaid amount form complainant, I issued two blank signed cheques to the complainant. These two blank cheques were signed by me when they were given to the complainant. (Vol. Those two cheques are not the cheques in question)".
10.Thus, clearly an inference can be drawn from the aforesaid inconsistent statements of the accused that the defense raised [ENTITY] v. [ENTITY] Page 10 to 16 by the accused is frivolous. The burden is on the accused to prove that it was not him who has signed the cheques in question and the bare oral denial will not serve any purpose.
11.Counsel for the accused has strongly relied on the judgment of Hon'ble Kerala High Court in [PRECEDENT] wherein he has adverted the attention of this court to the para 21 of the said judgment which is extracted below:
"Learned Magistrate rightly held that "execution" is different from "issuance" of cheque. "Issue" means, to "give something to somebody". Issuance of cheque does not mean drawing of cheque. I fully agree with the learned Magistrate that issuance and execution are different acts. Proof of issuance or giving of cheque by accused to complainant alone will not suffice to constitute offence under [SECTION] of the Act. Learned counsel for appellant was not able to satisfy this court that impugned order or findings therein suffer from any perversity, illegality, error or infirmity which calls or interference. In the above circumstances, I do not find any ground to admit this [ENTITY] v. [ENTITY] Page 11 to 16 appeal".
12.Hon'ble Delhi High Court in [PRECEDENT] held that where the signature on the cheque is admitted by the accused, then it itself raised presumption under [SECTION] [ACT]. Although the signatures have not been admitted by the accused as such, clearly in view of the afore said discussion it can be inferred that the cheque in question were signed by him. Thus, this contention of the accused appears to be unfounded.
13.The legal notice bearing Ex.CW1/E was sent by the complainant through postal receipt and appears to be delivered vide tracking report bearing Ex.CW1/F.
14.Thereafter, the complaint was filed within limitation period.
Thus, presumption under [SECTION] and [SECTION] [ACT] can be raised that the cheque in question was for a legally recoverable debt and for valid consideration. Point of determination no 1 is decided in affirmative.
[ENTITY] v. [ENTITY] Page 12 to 16 POINT OF DETERMINATION No.2
15.The counsel for the accused has submitted that the loan of Rs.3 lakhs which was given by the accused in year 2013 and discharged the allegedly liability by the cheque bearing no 000006, is time barred. Strong reliance has been placed on the judgment of Hon'ble Delhi High Court Delhi in [PRECEDENT] wherein it was held that [SECTION] [ACT] is not applicable in the cases where debt is time barred.
16.The facts of this case can be clearly distinguished from the aforesaid authority. As per the complaint, the complainant advanced two loans to the accused i.e. one in August 2013 of Rs.3 lakh and Rs.1 lakh in July 2016. The aforesaid two loans are being admitted to have been received by the accused. The cheque bearing number 000006 bearing Ex.CW 1/A is dated 22.10.2018. Presumption under [SECTION] of [ACT] can be raised that the said cheque was also drawn on the same day. It is true that the period of limitation for recovering the loan was of three years but the [ENTITY] v. [ENTITY] Page 13 to 16 complainant in his complaint has stated that after the said loans were advanced by the complainant to the accused, the accused used to pay interest on the said loans. The accused has admitted the same during his crossexamination by deposing that "I was regularly paying the interest amount to the complainant".
17.This admission of paying of interest by the accused to the complainant will give fresh cause of action to the complainant every time the interest was paid by the accused to the complainant squarely within [SECTION] of The [ACT]. Although, it is also noteworthy to mention here that whole record is denuded with the mention of the last date of payment of interest. However, the burden is casted upon the accused to rebut the presumption that the last date of payment of interest was such that the loan in August 2013 was rendered as time barred. Nothing to rebut the same has come on record from the accused. Therefore, this line of submissions of the accused also does not hold any water.
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18.The counsel for the accused also submits that as the inks in each cheque in question is different, it is a material alteration of the cheque within the meaning of [SECTION] of [ACT]. In the cheques in question bearing Ex.CW1/A and Ex.CW1/B , the date and the signature are in black ink and the rest of the details are in blue ink. Alteration would be where something is substituted for something, The counsel for the accused has relied on the judgment of Hon'ble Punjab and Haryana High Court in [ENTITY] v M/s Ludhiana Beverages Pvt Ltd on this point. In [ENTITY] (supra), the Court inter alia has held that:
"In the considered view of this court, filling in the blank shall not be always required to be treated as a material alteration. The alteration in the common parlance is understood to mean, something already been written has been changed/altered subsequently. Alteration is not synonymous to the word "filling up the unfilled column or space".
19.Thus, in view of the authority on which the accused has himself placed reliance on, the arguments of the counsel for [ENTITY] v. [ENTITY] Page 15 to 16 the accused appears to be implausible.
Point of determination no.2 is decided in negative.
Conclusion
20.In view of the above discussion, I am of the considered opinion that the complainant has established his case beyond reasonable doubt by proving all the ingredients under [SECTION] [ACT] by leading cogent evidence and the accused has failed to probabilize his defence. Accused is hereby convicted for offence punishable under [SECTION] [ACT]. Let the convict be heard separately on quantum of sentence. Copy of this judgment be given free of cost to the convict.
Announced in the Open Court on this 21st October 2019.
This Judgment consists of 16 signed pages. Digitally signed [ENTITY] by [ENTITY] Date: 2019.10.21 JAIN 15:27:04 +0530 ([ENTITY])
Metropolitan Magistrate03 (South), [ACT] Saket/New Delhi/21.10.2019 [ENTITY] v. [ENTITY] Page 16 to 16