[PRECEDENT] DLSE020064332015 Presented on : 24-09-2015 Registered on : 28-09-2015 Decided on : 20.12.2019 IN THE COURT OF Metropolitan Magistrate AT ,SOUTH EAST (Presided Over by Sh. [ENTITY]) [CASE NUMBER] [ENTITY] S/o Sh. [ENTITY], R/o Plot No.11, Gali No.2, J-2-B, Gupta Colony, Ratiya Marg, Sangam Vihar, New Delhi- 110080. [ENTITY] S/o Sh. [ENTITY], R/o H. No.75/2, J-2-B, Near Kali Mandir, Gupta Colony, Ratiya Marg, Sangam Vihar, New Delhi- 110080. Argued by: Sh. [ENTITY], counsel for complainant. Sh. [ENTITY], LAC for accused. JUDGMENT:
Complainant has filed the present complaint under [SECTION] of [ACT] R/w [SECTION] [PRECEDENT] [ACT] on the averments that the accused was introduced to him by a common friend in connection with some MTNL work in Sangam Vihar several years ago and since then there has been close friendly and family relation with the accused. As per the complainant, accused approached him on 01.05.2014 and requested him for friendly loan of Rs.40,000/- which was required by the accused to discharge some admitted liability in the court case otherwise the accused may loose his government job if the same is not paid on 02.05.2014. Keeping faith on the accused, complainant paid Rs.40,000/- on 02.05.2014 but in the evening of 02.05.2014 accused again came and requested to give Rs.30,000/- more on the ground that the same is to be paid on 06.05.2014 to the same person as he increased the compromised amount to Rs.70,000/- on account of litigation expenses and loss of interest, due to delay by accused. Keeping in view the urgency, complainant gave Rs.30,000/- on 06.05.2014. As per the complainant, he withdrew the amount of Rs.40,000/- and Rs.30,000/- from his bank account and the amount was given in the presence of witnesses namely [ENTITY] and Sh. [ENTITY]. As per the complainant, accused had assured to return the borrowed amount in the first week of November, 2014. However, when the complainant approached the accused for the return of loan in November, 2014 accused requested for some more time to return the same along with interest @ 1.5% per month in the month of August, 2015. When in the second week of August, 2015 complainant demanded the due amount from the accused, accused calculated the interest amount as Rs16,155/- on [PRECEDENT] the borrowed amount for 468 days and paid Rs.10,000/- in cash on 17.08.2015 along with a cheque bearing no.824698 dated 18.08.2015 of Rs.76,155/- drawn on Axis Bank Limited, Greater Kailash I Branch, Delhi (hereinafter referred as "cheque in question"). It is further the case of the complainant that when he presented the said cheque for enacashment, the same was returned unpaid due to the reason "insufficient funds" vide dishonor memo dated 19.08.2015. Thereafter, complainant sent a legal demand notice dated 25.08.2015 through his counsel which was duly served on the accused on 27.08.2015 but the legal demand notice sent to the office address of the accused returned unserved. Despite receiving the legal demand notice accused failed to make the requisite payment and hence the present complaint.
2. After taking pre-summoning evidence, accused was ordered to be summoned in this case for commission of offence under [SECTION] of [ACT], vide order dated 28.09.2015.
3. Accused appeared and was released on bail on 30.10.2019. On finding a prima facie case, notice U/[SECTION] [ACT]. was served upon the accused on 30.10.2019 to which he pleaded not guilty and opted to contest after disclosing the following defence:
"I had taken loan of Rs.20,000/- from the complainant. The said loan was already repaid to the [PRECEDENT] complainant on the date of the marriage of complainant's daughter. I had repaid Rs.25000/- to the complainant. The cheque in question was given as blank signed cheque for the purpose of security."
4. Considering the defence of the accused, opportunity was granted to the accused to cross examine the complainant. In pre-summoning evidence, complainant had tendered his affidavit of evidence Ex. CW1/1 in which he reiterated the averments of the complaint on Oath. He also proved following documents :-
Ex. CW1/A : Copy of ID proof of complainant.
Ex. CW1/B : Copy of ID prove of accused. Ex. CW1/C : Copy of statement of account of complainant. Ex. CW1/D : Cheque bearing no.824698 dated 18.08.2015 of Rs.76,155/-. Ex. CW1/E : Bank returning memo dated 19.08.2015. Ex. CW1/F : Legal demand notice dated 25.08.2015. Ex. CW1/G to I : Postal receipts and tracking report. Ex. CW1/J : Returned envelope. Ex. CW1/K : Complaint.
Complainant Evidence was closed vide separate statement of complainant on 20.11.2019.
[PRECEDENT]
5. Thereafter, accused was examined under [SECTION] [ACT] for explaining the circumstances appearing against him in complainant's evidence. He has denied the complainant's case and pleaded false implication and opted to lead evidence in his defence. However, no evidence was led by the accused and defence evidence was closed by the accused vide separate statement dated 30.11.2019.
6. I have heard ld. Counsel for the parties and have perused the case file carefully and meticulously.
7. Initiating the arguments, learned counsel for the complainant argued that, in discharge of the liability, accused issued the cheque in question (Ex. CW1/D) in favour of the complainant which got dishonoured due to the reason "Funds Insufficient". After getting the information regarding the dishonour of cheque, vide cheque returning memo Ex.CW1/E, complainant served a legal demand notice Ex.CW1/F to the accused. However, even after having the knowledge of dishonour of cheque, the accused did not make the payment. Further, it was argued that no evidence is being led by the accused to rebut the presumption U/[SECTION] [ACT]. With these submissions, it was prayed that the accused be convicted for the offence committed U/[SECTION] [ACT].
8. On the other hand, learned LAC for the accused [PRECEDENT] argued that to rebut the statutory presumption U/[SECTION] of the [ACT] an accused is not expected to prove his defence beyond reasonable doubt as is expected in a criminal trial and the said presumption can be rebutted by the accused either by adducing direct evidence to prove the non existence of any debt or liability or by indirectly pointing out fallacies in the prosecution version. It was contended that the complainant has failed to tell the date when he extended the financial assistance to the accused. It was also argued that the complainant has not examined any witness who were allegedly present at the time of giving of loan. With these submissions acquittal of the accused and dismissal of the complaint was prayed.
9. After hearing Ld. Counsel for the parties and having perused the case file carefully and meticulously this court is of the opinion that in order to bring home the guilt against the accused, complainant is duty bound to prove the following ingredients:-
a) Drawing of cheque by a person on any account maintained by him with a banker for payment to another person out of that account.
b) The cheque has been issued for the discharge, in whole or in part, of any legal and enforceable debt or other liability.
c) Presentation of the cheque by the payee or the holder in due course to the bank within a period of three months from the date on which it is drawn or within the period of its validity, whichever is earlier.
d) Returning the cheque unpaid by the drawer bank for want of sufficient funds to the credit of the drawer or any [PRECEDENT] arrangement with the banker to pay the sum covered by the cheque.
e) Giving notice within 30 days of receipt of the information by the payee from the bank regarding the return of the cheque as unpaid, demanding payment of the cheque amount.
f) Failure of the drawer to make payment to the payee or the holder in due course of the amount covered by the cheque within 15 days of the receipt of notice.
10. It goes without saying that 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 U/[SECTION] of [ACT].
11. In the case in hand, it is not in dispute that the cheque in question is drawn by the accused from his bank account. Further, it is also not in dispute that the accused is the signatory of the cheque in question as, in the defence disclosed by the accused in the notice U/[SECTION] [ACT] accused has duly submitted that he gave the impugned cheque as security. Presentation of the cheque in question by the complainant is also not in dispute. Returning memo dated 19.08.2015 (Ex. CW1/E) is also undisputed i.e., the cheque in question was returned unpaid for the reason "Funds Insufficient". Complainant sent the legal demand notice, dated 25.08.2015 (Ex.CW1/F) to the accused. Although, at the time of admission / denial of documents, as per [SECTION] [ACT], accused has not admitted the receipt of the legal demand notice but at the same time duly admitted that the legal demand notice were sent at his correct address. Further, the address mentioned in the legal demand notice is the same as [PRECEDENT] mentioned in the copy of Adhar Card (Ex. CW1/B) of the accused. Hence, it is clear that the legal demand notice was duly sent at the correct address of the accused. As the legal demand notice, Ex. CW1/F, was sent on the correct address of the accused, therefore, a presumption of due service is drawn U/[SECTION] of [ACT] which provides that where the notice is sent to the correct address, the same shall be presumed to have been duly served. In [PRECEDENT], the Hon'ble High Court of Delhi held that a presumption of service of notice is to be drawn where the notice is sent through registered post as well as UPC on correct address. Further, the Hon'ble Supreme Court in [PRECEDENT] has held that"Any drawer who claims that he did not receive the notice by post, can, within 15 days of receipt of summons from the court in respect of the complaint U/[SECTION] of the Act, make payment of the cheque amount and submit to the court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the court along with the copy of complaint U/[SECTION] of the Act, cannot obviously contend that there was no proper service of notice as required U/[SECTION], by ignoring statutory presumption to the contrary U/[SECTION] of the [ACT] and [SECTION] of the Evidence [PRECEDENT] Act.". Thus, the legal demand notice Ex. CW1/F is held to have been duly served upon the accused. Finally, the complaint has been filed within the limitation period. Therefore, essential ingredients mentioned from (a) to (f) [except point b] in para no.9 above have been duly satisfied.
12. The only question remaining for determination is whether legally valid and enforceable debt existed qua the complainant and the cheque in question was issued in discharge of said liability / debt. It is pertinent to note that [SECTION] of [ACT] provides a statutory presumption that the cheque was handed over in respect of the debt or other liability. Under [SECTION] of the [ACT] every negotiable instrument is presumed to have been drawn and accepted for consideration. In the case of [PRECEDENT], it was observed as follows:
"Thus in complaints under [SECTION], the Court has to presume that the cheque had been issued for a debt or liability. This presumption is rebuttable. However, the burden of proving that a cheque had not been issued for a debt or liability is on the accused. This Court in the case of [ENTITY]. [PRECEDENT] has also taken an identical view."
13. The Hon'ble Supreme Court, in the case of [ENTITY]. P. Dalal vs Bratindranath Banarjee (2001) 6 SCC 16, observed as follows:
[PRECEDENT] "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, as noted in [PRECEDENT], it is obligatory on the Court to raise this presumption in every case where the factual basis for the raising of the presumption had been established. It introduced an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the accused" (ibid).
14. Also, in the case of [PRECEDENT], it has been held by the Hon'ble Supreme Court as under:
"As the signature in the cheque is admitted to be that of the accused, the presumption envisaged in [SECTION] of the Act can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears. [SECTION] of the Act enjoins on the court to presume that the holder of the cheque received it for the discharge of any debt or liability."
15. Now, in the case in hand, so far as the question of existence of basic ingredients for drawing of presumption U/[SECTION] and [SECTION] of [ACT] is concerned, from the aforesaid discussion, it is apparent that the accused has not denied his signatures on the cheque in question that has been drawn in favour of the complainant on a bank account maintained by the accused for sum of Rs.76,155/-. The said cheque was presented to the bank concerned within the period of [PRECEDENT] its validity and was returned unpaid for the reason mentioned in the bank returning memo. Hence, all the basic ingredients of [SECTION] as also of [SECTION] and [SECTION] are apparent on the face of record. Therefore, it is required to be presumed that the cheque in question was drawn for consideration and the holder of the cheque i.e., the complainant received the same in discharge of an existing debt. The onus, therefore, shifts on the accused to establish a probable defence so as to rebut such a presumption.
16. It is a settled position that when an accused has to rebut the presumption under [SECTION], the standard of proof for doing so is that of "preponderance of probabilities". In [PRECEDENT], the Hon'ble Supreme Court has observed:
"[SECTION] of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While [SECTION] the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under [SECTION] is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by [SECTION] can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused/defendant cannot be expected to discharge an unduly high standard or proof. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive [PRECEDENT] burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under [SECTION], the standard of proof for doing so is that of 'preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own."
17. In another recent judgment passed in the case of [PRECEDENT], the Hon'ble Apex Court has summarized the principle enumerated on [SECTION] of the Act, which are as under:
"23. We having noticed the ratio laid down by this court in above cases on [SECTION] and [SECTION], we now summarise the principles enumerated by this court in following manner:-
(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 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 [PRECEDENT] 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.
(v) It is not necessary for the accused to come in the witness box to support his defence."
18. In [PRECEDENT]. AIR 2019 [CASE NUMBER] Hon'ble Supreme Court has held that :
"On the aspects relating to preponderance of probabilities, the accused has to bring on record such facts and such circumstances which may lead the court to conclude either that the consideration did not exist or that its non existence was so probable that the prudent man would, under the circumstances of the case, act upon the plea that the consideration did not exist. This court has, time and again, emphasized that though there may not be sufficient negative evidence which could be brought on record by the accused to discharge his burden, yet mere denial would not fulfil the requirements of rebuttal as envisaged U/[SECTION] and [SECTION] of [ACT]." (Emphasis Supplied)
19. Now, in the case in hand the basic question to be answered is whether the accused has been able to rebut the presumption raised U/[SECTION]/[SECTION] of [ACT].
[PRECEDENT]
20. In the case in hand, the primary defence of the accused is that he had taken a loan of Rs.20,000/- from the complainant and has repaid the said loan along with interest i.e. Rs.25,000/- on the date of marriage of complainant's daughter. However, not even a single suggestion was given to the complainant regarding the said defence. Further, in the cross examination, suggestion was given to the complainant that he had stolen the cheque in question from the house of the accused. The said defence is contrary to the defence taken by the accused as it is an admitted fact that the accused gave the cheque in question to the complainant himself. It is further to be noted that in the statement U/[SECTION] [ACT] accused had submitted that he took loan of Rs.10,000/- and Rs.8,000/- whereas in the defence taken at the time of framing of notice U/[SECTION] [ACT] the accused has stated that he had taken loan of Rs.20,000/-. Hence, even the accused himself is not sure as to how much amount he had taken from the complainant. There is nothing on record, except the bald defence of the accused, which can prove that he had not taken loan of Rs.70,000/- from the complainant. On the other hand, it is the case of the complainant that he gave loan of Rs.40,000/- to the accused on 02.05.2014 and Rs.30,000/- on 06.05.2014 after withdrawing the same from his bank. In order to corroborate the said fact, complainant also proved his statement of account Ex. CW1/C which establishes that the complainant withdrew Rs.40,000/- on 02.05.2014 and Rs.30,000/- on 06.05.2014. Hence, complainant has been able to prove that he gave loan of Rs.70,000/- to the accused.
[PRECEDENT]
21. One of the defence taken by the accused is that he gave blank signed cheque to the complainant for the purpose of security. In the cross examination complainant has duly admitted that the accused gave him blank signed cheque and he got it filled from some other person. However, merely filling up of the particulars by complainant or by some other person will not ipso facto absolve the accused from his liability. On this point support can be taken from case titled [PRECEDENT] wherein it was held by the Hon'ble Supreme Court that "40. Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption U/[SECTION] of the [ACT], in the absence of any cogent evidence to show that the cheque was not issued in discharge of her debt".
22. Moving ahead, it is further the defence of the accused that the cheque in question was given as a security cheque. However, no evidence is being led by the accused to prove that there was no debt existed at the time of issuance of the cheque in question.
23. In these circumstances and in view of the above detailed discussion, this court is of the considered opinion that as the accused has failed to rebut the presumption under [SECTION] of [ACT] in favour of the complainant and ingredients of [SECTION] of [ACT] are fully proved, therefore, accused is [PRECEDENT] held guilty and convicted for commission of offence punishable under [SECTION] of the [ACT]. Let he be heard on the quantum of sentence on 23.12.2019 at 12.30pm.
ORDER : CONVICTED KAMRAN by KAMRAN KHAN Date: 2019.12.21 16:30:06 +0530 Announced in Open Court ([ENTITY]) 20.12.2019 MM (NI-Act 02), South East Saket Court, New Delhi
Note: This judgment contains 16 pages and each page has been signed by me.
([ENTITY]) MM (NI-Act 02), South East Saket Court, New Delhi