IN THE COURT OF MS. SWATI KATIYAR, METROPOLITAN MAGISTRATE05 (EAST), KARKARDOOMA COURTS, DELHI CC No. 98/15 Sh. [ENTITY] S/o Shri Girja Shankar Mishra, R/o House No. 56, Gali no. 9, Shashi Garden, Patparganj, Delhi110091 Complainant Versus Sh. [ENTITY] S/o. Sh. Harchand Lal, R/o. Quarter no. 53, Type II, Delhi Jal Board Quarters, Model Town, Delhi - 110009 Accused Date of Institution : 29.10.2004 Offence Complained of : u/[SECTION] [ACT] Plea of Accused : Not Guilty Date of Reserving order : 19.10.2015 Date of Decision : 21.11.2015 Decision : Acquitted J U D G M E N T
1. The present complaint was filed by the complainant against accused alleging that complainant and accused known to each [CASE NUMBER] page 1 of 14 other since long and had good terms. Complainant alleged that accused approached him in the first week of January, 2003 seeking loan of Rs. One lac. It is stated that complainant gave a friendly loan of Rs. 96,000/ to the accused for one year i.e. till December, 2003. It is alleged that complainant contacted the accused in the first week of January, 2004 and demanded the said amount of Rs. 96,000/ but accused showed his inability to pay the loan amount and demanded a further sum of Rs. 1,00,000/ as loan as he was in great need of money. It is alleged that complainant gave another loan of Rs. 86,500/ to the accused for a period of six months i.e. till June 2004. It is alleged that in the first week of June, 2004, complainant contacted the accused and asked for the return of both the loans.
2. It is submitted that accused issued two cheques dated 26.08.2004 in the sum of Rs. 96,000/ and Rs. 86,500/ i.e. cheque bearing no. 330544 and 330542 drawn on Indian Bank, Karol Bagh, New Delhi. It is submitted that the said cheques were presented for encashment on 26.08.2004 but the utter shock and surprise of complainant, the said cheques were returned unpaid on 28.08.2004 due to funds insufficient.
3. It is stated that accused was informed about the dishonour [CASE NUMBER] page 2 of 14 and he was asked to pay the cheque amount, but accused refused. It is alleged that a legal notice dated 25.09.2004 was served upon the accused but to no avail. Rather, accused had issued a false reply dated 28.09.2004 levelling false allegations.
4. Thus feeling aggrieved from the conduct of the accused , complainant has filed the present complaint praying that accused be summoned, tried and punished in accordance with [SECTION] of [ACT].
5. Presummoning evidence was filed by the complainant by way of affidavit on 17.11.2004. Prima facie case was made out against accused and he was accordingly summoned vide order of the same date.
6. Accused entered appearance on 04.04.2005 and notice was served upon him on 06.09.2005 to which the accused pleaded not guilty and claimed trial.
7. In post summoning complainant's evidence, Sh. [ENTITY] from Indian Bank, Mayur Vihar, Phase I was examined as CW1. CW1 brought on record statement of account no. 481669507 in the name of complainant w.e.f 01.04.2004 to 01.10.2004 i.e. Ex. CW1/1. He proved the cheque return entry dated 28.08.2004 qua cheque [CASE NUMBER] page 3 of 14 bearing no. 330544 of Rs. 96,000/. He deposed that account number of complainant has been changed on 09.03.2006 due to Core Banking Solutions.
8. Complainant examined himself as CW2 and led his evidence by way of fresh affidavit Ex. CW2/X. CW1 also relied upon the documents exhibited at the stage of presummoning evidence as Ex. CW1/1 to Ex. CW1/9. Ex. CW1/1 is the cheque in question, Ex. CW1/2 is the deposit slip and Ex. CW1/3 is the return memo, Ex. CW1/4 is the legal notice, Ex. CW1/5 is the postal receipt, Ex. CW1/6 is the UPC receipt, Ex. CW1/7 and Ex. CW1/8 are the returned AD cards, Ex. CW1/9 is the reply of accused. CW1 was crossexamined at length by Ld. counsel for accused.
9. Statement of accused under [SECTION] [ACT] was recorded on 31.03.2012.
10. In Defence evidence, accused examined Sh. [ENTITY], Deputy Branch Manager, ICICI Bank, Preet Vihar, Delhi as DW1 who brought on record statement of account of complainant i.e. Ex. DW1/A. Accused also examined Sh. [ENTITY], Chief Manager, Punjab and Sind Bank as DW2 who brought on record statement of account of M/s. Neeraj Enterprises i.e. Ex. DW1/2.
[CASE NUMBER] page 4 of 14 Accused examined himself as DW2 (wrongly numbered instead of DW3) and one [ENTITY] as DW3 (wrongly numbered instead of DW4).
11. In his deposition, accused stated that he met with complainant on 19.08.2003 when complainant used to do the work of money lending under the name and style of Neeraj Enterprises. He deposed that at that time, he was in need of Rs. 50,000/ which he asked from the complainant and complainant gave it to him by way of cheque bearing no. 330541 dated 19.08.2003 with service charges @ 10%. he deposed that on 22.08.2003, his cheque was encashed and on 27.08.2003, complainant had given him a cheque of Rs. 35,000/drawn on Punjab and Sind Bank, Chandni Chowk, Delhi from the account of Neeraj Enterprises. He deposed that on the same day, complainant called him on the phone and demanded return of cheque. He deposed that he returned the cheque to complainant on the same day. He further deposed that in the first week of September, 2003, complainant gave him a sum of Rs. 15,000/ in cash saying that there is no arrangement of rest amount. Accused deposed that he requested for arranging a loan of Rs. 20,000/. He further deposed that complainant took three blank signed cheques from the accused. He deposed that thereafter in [CASE NUMBER] page 5 of 14 the month of October, 2003 and November, 2003, he had given a sum of Rs. 12,000/ to the complainant but complainant had not issued any receipt. He deposed that he personally deposited a sum of Rs. 17,000/ in the account of complainant in the month of December, 2003 to March, 2004 vide deposit receipt Mark B. He deposed that in the year 2004, complainant misused the aforesaid blank signed cheques. He deposed that he had received legal notice which was replied by him and that he had no liability towards the complainant.
12. DW [ENTITY] deposed that he had also taken a loan of Rs. 50,000/ from the complainant and he had repaid the same but complainant had not issued any receipt qua the same. He deposed that complainant used to take blank signed cheques at the time of giving loan which complainant had misused.
13. Final arguments were advanced at length by Sh. [ENTITY], Ld. Counsel for complainant and Sh. [ENTITY], Ld. counsel for accused.
14. Ld. Counsel for complainant has prayed for conviction of the accused on the ground that loan transaction of Rs. 96,000/, issuance of cheque, dishonour of cheque and service of legal notice is admitted by the accused and thus, relying upon the presumptions in [CASE NUMBER] page 6 of 14 favour of the complainant, accused is liable to be convicted.
15. Ld. Counsel for the accused on the other hand has argued that accused had taken only a loan of Rs. 15,000/ from the complainant and that he had already repaid the loan amount to complainant. It is argued that a sum of Rs. 5,000/ was received by complainant by way of a cheque and a sum of Rs. 12,000/ and Rs. 17,000/ was paid in cash to the accused prior to the deposit of cheque. It is further argued that complainant had taken three blank signed cheques as security from the accused as a condition for granting the loan amount. It is argued that the accused was not liable to pay the cheque amount on the date of presentation of cheque. It is argued that necessary ingredients of offence punishable under [SECTION] [ACT] are not made out in this case as complainant is a money lender by profession and the loan cannot be said to be legally enforceable. Thus, it is prayed that accused be acquitted of the charges.
16. I have considered the submissions as advanced and perused the record carefully.
17. [SECTION], [ACT] has been enacted to lend credibility to the financial transactions. The main [CASE NUMBER] page 7 of 14 ingredients of the offence under [SECTION] [ACT] are:
(i) Drawing up of a cheque by the accused towards payment of an amount of money for the discharge in whole or in part of any debt or any other liability;
(ii) Return of the cheque by the bank as unpaid;
(iii) The drawer of the cheque fails to make the payment of the said amount of money within 15 days of the receipt of notice under [SECTION].
18. Apart from this, [SECTION] [ACT] lays down a presumption in favour of the holder of cheque in following terms, "It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in [SECTION], for the discharge, in whole or in part, of any debt or other liability".
19. Thus, in cheque dishonor 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 Act. It is also to be kept in mind that while the complainant has to prove its case beyond reasonable doubt, accused is required to [CASE NUMBER] page 8 of 14 establish his defence only on preponderance of probabilities.
20. It is also a settled law that mere production of cheque is not sufficient, complainant is required to prove its due execution as well (vide C. Santhi v. Mary Sherley, 2011 (4) RCR Civil 269 (Kerala . It is further to be proved by the complainant that the cheque amount was actually due on the date of issuance of cheque (vide [PRECEDENT]).
21. Thus, coming to the first ingredient i.e. issuance of the cheque in question towards discharge of liability, it is seen that the loan transaction between the parties is admitted, but the loan amount is in dispute. It is also disputed as to whether the cheque in question was issued towards discharge of liability or as a security cheque.
22. In the present case, the complainant has alleged that he had granted a loan of Rs. 96,000/ and Rs. 86,500/ to the accused in the month of January, 2003 and January, 2004. However, complainant has not brought forth any evidence documentary or oral with respect to the grant of loan apart from his self serving statement. Complainant has admitted in his crossexamination recorded on 23.03.2010 and 21.12.2010 at various places that no document or agreement or book of account was prepared or executed nor the loan was granted in [CASE NUMBER] page 9 of 14 presence of any witness. Thus, there is no evidence led by the complainant with respect to the grant of loan in question. On the other hand, accused has strongly contended that he had approached the complainant only for a loan of Rs. 50,000/ and a sum of Rs. 15,000/ was given to him by the complainant on 19.08.2003. He had further deposed that he had paid a sum of Rs. 5,000/ by way of cheque, a sum of Rs. 6,000/ each in cash in the month of October, 2003 and November, 2003 and a total sum of Rs. 17,000/ in cash to the complainant in between the month of December, 2003 to March, 2004. The payment of Rs. 5000/ by way of cheque and Rs. 17,000/ in cash is also admitted by the complainant in his crossexamination.
23. Complainant in his crossexamination recorded on 21.12.2010 had deposed that " It is correct that I had not given loan amount to the accused except two times since January 2003 to December 2004 It is correct that a cheque of Rs. 5,000/ has been encashed in my account but it has no concerned with the present case It is correct that I have account in ICICI Bank. It is wrong to suggest that accused has deposited cash payment in my ICICI Bank since January 2003 to December 2004 At this stage, accused has produced the photocopy of payslip of ICICI Bank from 24.12.2003 to [CASE NUMBER] page 10 of 14 09.02.2004. It is wrong to suggest that accused had deposited the above said amount in my account. I used to give the cash to the accused for deposit the said cash amount in my account as I was busy in my business. I do not remember from how many years I have given the cash amount to the accused for depositing in my account ". Thereafter, in the crossexamination recorded on 22.12.2011, Complainant has admitted that, " It is correct that accused [ENTITY] has deposited approximately amount of Rs. 17,000/ in my account but that does not belong to the liability of the accused against the cheque in question. I had taken only two cheques from the accused. It is correct that a cheque for an amount of Rs. 5,000/ was also taken by me but that does not have any link with the present matter "
24. Thus, as noted above, complainant has admitted the payment of Rs. 5,000/ by way of cheque made on 19.08.2003 as well as the payment of Rs. 17,000/ in cash made between the period December 2003 to March 2004 by the accused. As the record would show, the aforesaid payments have been made prior to the date of cheque in question i.e. 26.08.2004. The complainant has explained the aforesaid payments by stating that they were made in connection with some other transaction, however, the complainant has nowhere [CASE NUMBER] page 11 of 14 disclosed what those other transactions were. Further, complainant has himself admitted that there were only two loan transaction with the accused. Thus, if there were only two loan transaction between the parties, then, it is inexplicable as to with respect to which other transaction, accused had deposited the amount in the account of complainant. This fact has also not been explained by the complainant. At one place complainant had deposed that he used to give the cash to accused for depositing in his bank account since he was busy in his business. It is to be noted that this explanation was furnished by the complainant for the first time during crossexamination recorded on 21.12.2010 and the same is not fortified by any other document on record. It is apparent that complainant is merely trying to fill the loop holes by giving lame explanation qua the payments made by the accused. It is also to be noted that initially, the complainant had denied the aforesaid payment and it was only when the complainant was confronted with the slips of ICICI Bank produced by the accused, that he accepted the aforesaid payment. The complainant has been approbating and reprobating at the same time.
25. Be that as it may, the aforesaid payments of Rs. 5,000/ and Rs. 17,000/ are admitted by the complainant and as per the [CASE NUMBER] page 12 of 14 accused the same were made towards the loan in question. Now, if the accused had already paid a sum of Rs. 22,000/ to the complainant, then, it is inexplicable as to why the accused would issue a cheque of Rs. 96,000/ on 26.08.2004. It is to be noted that accused has been taking the plea from the very beginning that the cheque in question was taken as blank signed security cheque by the complainant. The complainant on the other hand has not been able to prove the due issuance of cheque in question for the cheque amount of Rs. 96,000/ by the accused.
26. DW [ENTITY] has corroborated the version of accused with respect to issuance of blank signed cheques in favour of the complainant.
27. The presumption under [SECTION] [ACT] is rebuttable and once the accused has challenged the same by raising a probable defence, it becomes mandatory upon the complainant to prove its case beyond reasonable doubt. Since the complainant has not led any evidence to show that accused was under
a liability of Rs. 96,000/ on the date of issuance of cheque i.e. 26.08.2004 and that the cheque in question was issued by accused towards the said liability on 26.08.2004, therefore, the defence of the [CASE NUMBER] page 13 of 14 accused that the cheque in question was issued as a security cheque stands established on record on preponderance of probabilities.
28. It is a settled law that a security cheque does not attract the penal provisions of [SECTION] of [ACT] (vide [PRECEDENT]; [PRECEDENT] decided by Hon'ble High Court of Delhi on 01.03.2011) and thus, it cannot be said that the offence under [SECTION] [ACT], has been made out against the accused.
29. Once the complainant has failed to establish basic ingredients of [SECTION] [ACT], it would be a futile exercise to meander into other ingredients of the offence. Accordingly, it is held that the offence under [SECTION] [ACT] is not made out against the accused. The complaint stands dismissed and accused stands acquitted.
File be consigned to Record Room.
(Announced in open Court on 21.11.2015) ([ENTITY]) Metropolitan Magistrate Karkardooma Courts, Delhi [CASE NUMBER] page 14 of 14