IN THE COURT OF Ms. T. PRIYADARSHINI, MM-01 (NEGOTIABLE INSTRUMENTS ACT) WEST DISTRICT, TIS HAZARI COURTS, DELHI Agarwalla Timbers Private Limited Through its Directors Shri Bhim Sain Goel 73/7, Swarn Park, Main Rohtak Road Nangloi New Delhi 110041 Complainant vs. M/s [ENTITY] Through its Authorised Signatory Shri Kuljeet Singh Dharapur Road Urmar - Tanda District Hoshiarpur (Punjab) Accused Complainant [CASE NUMBER] Date of institution : 30.04.2012 Offence alleged : Under [SECTION] [ACT] Plea of the accused : Not pleaded guilty Final order : 24.09.2018 Date of Decision : Conviction [CASE NUMBER] page no.1/13 JUDGMENT
1. The instant complaint is in respect of an offence punishable under [SECTION] of the [ACT] (hereinafter "the [ACT]"). Brief facts alleged by the complainant is set out below:
a) The complainant purchased timber from the complainant company vide invoice no. VI/86 dated 26.10.2010 for Rs. 3,39,181 and invoice no. VI/119 dated 11.02.2011 for Rs. 4,00,235 on a maximum 15 days' credit. It was further agreed that on failure to pay the bill amount within said 15 days, an interest of 24% per annum was chargeable on the bill amount with effect from the date of the invoice.
b) In discharge of the above liability, the accused kept on paying in parts on account and the complainant maintained open mutual current account and as per the account maintained by the complainant company, as on 11.03.2012, a sum of Rs. 4,75,698 as principal amount and Rs. 1,04,061 as interest was due from the accused.
c) The accused in discharge of his debt and liability issued and delivered two crossed cheques drawn on State Bank of Patiala bearing numbers 000174 dated 11.11.2011 and 000173 dated 14.11.2011 for Rs. 1,00,000 each (hereinafter "the impugned cheques")
d) The impugned cheques were returned as unpaid / dishonoured for the reason "EXCEEDS ARRANGEMENT" vide cheque return memos dated 17.02.2012.
e) Within the limitation period, the complainant sent legal demand notice dated 12.03.2012 through his counsel and called upon the accused to make the payment of the amount of the impugned cheques within 15 days of receipt of legal notice. The accused failed to make the payment amount involved despite service of notice and therefore, according to the complainant, the accused is liable for the offence under [SECTION] of the [ACT]. Hence, the present complaint is filed.
2. At the stage of pre-summoning, the AR of the complainant company examined himself as CW1 by way of affidavit Ex. CW1/A and relied on the following documents which have been duly exhibited:
a) Extract of the board resolution authorising AR of the complainant company Mark C1;
b) Original impugned cheques Ex. CW1/2 and CW1/2A c) Return memos dated 17.02.2012 Ex. CW1/3 and CW1/3A; d) Legal demand notice dated 12.03.2012 Ex. CW1/4; and e) Original postal receipts, AD cards Ex. CW1/4A and CW1/4B.
3. On finding a prima facie case, the accused was summoned. Thereafter, notice of accusation under [SECTION] of [ACT] (hereinafter the Code) was served upon the accused on 20.08.2015. The accused plead not guily and claimed trial. It is pertinent to note that the notice under [SECTION] was framed by Learned Magistrate, Dasuya, District Hoshiarpur. Subsequently, in view of the amendments to the [ACT], the matter was transferred to this court for trial.
4. The matter was listed for DE. On 04.03.2017, the Learned counsel for the accused submitted that he did not want to lead defence evidence and his statement to that effect was recorded by Learned Predecessor Judge. Subsequently, on 04.05.2017, the Learned Predecessor Judge noted that an application under [SECTION] [ACT] which was filed on behalf of the accused was not decided and therefore, listed the matter for arguments on the said application. This application was dismissed on 03.02.2018 vide detailed order on the ground that the application does not substantiate the defence of the accused. Moreover, it was observed that the application was neither pressed by the accused nor he argued orally his defence and therefore, the application was dismissed.
5. However, int he interest of fair trial, this court exercised its powers under [SECTION] and recorded Statement of Accused under [SECTION] read with [SECTION] of the Code on 30.05.2018. In his statement, the accused stated that he did not want to answer the questions of this court as there was no evidence against him on record. He also stated that he did not wish to lead DE and therefore, matter was listed for final arguments. Arguments were made by the Learned Counsels for both the parties. The matter was then reserved for judgment. The submissions, both written as well as oral, made on behalf of both the parties and the judgments relied on by both the parties have been considered and the record of the case has been thoroughly perused.
6. In order to ascertain whether the accused has committed the offence under [SECTION] of the [ACT], it is deemed fit to examine separately as to whether all the indispensable ingredients constituting the offence have been proved by the complainant. The offence under [SECTION] of the [ACT] has the following ingredients:-
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;
b) The cheque should have been issued for the discharge, in whole or in part, of any valid and enforceable debt or other liability;
c) That cheque must have been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier;
d) That cheque must be 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;
e) The payee or the holder in due course of the cheque must have made 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; and
f) The drawer of such cheque has failed 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.
7. Being cumulative, it goes without saying that it is only when all the aforementioned ingredients are satisfied that the accused can be deemed to have committed an offence under [SECTION] of the Act. Now, I will proceed to examine whether the above said ingredients have been proved in the present case of now.
Whether the notice framed under [SECTION] of the Code is defective and hence, trial vitiated?
8. The main defence of the accused is that the notice framed against the accused on 20.08.2015 is defective and hence, the trial is vitiated against the accused. Learned counsel for accused stated that the substance of accusation was not laid down in the notice. It is further stated that it was not explained to the accused that demand notice was sent to him by the complainant and the offence under [SECTION] of the [ACT] was made out against him as he did not make payment within 15 days of receipt of notice. The accused has relied on [PRECEDENT] wherein the Hon'ble High Court of Kerala in the context of an offence under [ACT] opined that:
"Though formal framing of charge is dispensed with, the section enjoins that the accused should be appraised of the substance of the accusation ad it should be made clear for what he is being tried. The intimation to the accused of the particulars of the offence takes the place of a formal charge. If, therefore, it is not explained to the accused what the offence is, but he is only told what the allegations in the complaint are, the procedure would be bad. Further though the particulars of the offence stated, need not be recorded, the proceedings of the Magistrate must indicate that the explanation was actually made. It is also necessary that in explaining the offence to the accused the Magistrate should state the necessary ingredients of the offence as otherwise the plea of guilty by the accused might mean nothing more than an admission of an act which constitutes but a part of the offence punishable in law."
9. The Learned counsel for accused has also relied on [PRECEDENT] wherein the Hon'ble High Court of Orissa has held that the provisions of [SECTION] and [SECTION] of the Code are salutary and mandatory. In view of the mandatory character of the provisions, the particulars of the offence have to be stated to the accused and the record must show that were those particulars of the offence and the answers to the questions given by the accused. The High Court went on to hold that faulurs to mention the particulars has vitiated the trial.
10. The Learned counsel for accused has also placed reliance on [PRECEDENT] wherein the Hon'ble Patna High Court held that merely recording in the ordersheet that the substance of accusation has been explained, cannot be regarded as proper and necessary compliance of the provisions of [SECTION] of the Code is mandatory.
11. Per contra, the Learned counsel for complainant has stated that rebuttal of the complainant is not particularly related to the [ACT] as case laws referred by the accused are not relevant. It is also submitted that no prejudice is caused to the accused as the particulars of the offence have been duly explained and the proceedings have not been vitiated. The Learned counsel for complainant in response has also stated that [SECTION] of the Code does not lay down any specific format in which notice has to be framed and has submitted that it is not necessary that the notice has to be in a particular language.
12. In relation to the argument of the accused that no evidence has been placed on record by the complainant in support of his case, learned counsel for complainant submitted that the statement to close defence evidence on behalf of the accused was deliberate and conscious. It is further averred that the accused did not press his application under [SECTION] of the [ACT] and as no defence was disclosed, the application was dismissed for non-prosecution as well as on merits. The complainant has relied on [PRECEDENT] (decided on 12.01.2015) wherein the Hon'ble High Court of Delhi has held that there is no scope of doubt that after serving notice in terms of [SECTION] of the Code upon an accused, the Magistrate shall fix the case for defence evidence, unless an application is made by an accused under [SECTION] of the [ACT] for recalling a witness for cross-examination. Therefore, there is no duty on the complainant to lead post-summoning evidence.
13. Now I proceed to examine this issue raised by the accused. The main contention of the accused is that the notice framed under [SECTION] of the Code is defective and hence, the trial is vitiated. The main question for determination is whether any prejudice has been caused to the accused due to the alleged defects in the notice. The Hon'ble Apex Court in [PRECEDENT] has held that any omission or even the illegality in the procedure which does not affect the core of the case is not a ground for ordering a de novo trial.
14. While recording his statement under [SECTION] read with [SECTION] of the Code the accused has chosen to remain silent by stating that there is no evidence against him. Now the accused in his final arguments has stated that no evidence has been led in the post summoning stage and no case has been made out against the accused. At this stage, it is pertinent to note that the Hon'ble High Court of Delhi in [PRECEDENT] has held that:
"An argument is raised that the accused, under [SECTION] of [ACT], has a right of silence in a criminal trial and therefore he cannot be forced to disclose his defence. This argument is misconceived in view of [SECTION] of [ACT]. Since an offence under [SECTION] of [ACT] is technical in nature and defence which an accused can take are inbuilt, like the cheque was given without consideration, the accused was not Director at that time, accused was a sleeping partner or a sleeping Director, cheque was given as a security etc. etc., the onus of proving these defences is on the accused alone, in view of [SECTION] of [ACT]. Since the mandate of Legislature is trial of such cases in a summary manner, the evidence already given by the complainant by way of affidavit is sufficient proof of the offence and this evidence is not required to be given again in terms of [SECTION] of [ACT] and has to be read during the trial. The witnesses i.e. the complainant or other witnesses can be recalled only when accused makes an application and this application must disclose the reason why accused wants to recall the witnesses and on what point witness is to be cross examined. One must not forget that the offence under [SECTION] of [ACT] is not of the kind of offence as in [ACT] where the State prosecutes a person for offence against the society. The offence under [SECTION] of [ACT] is an offence in the personal nature of the complainant and it is an offence made under [ACT] so that the trust in commercial transactions is not destroyed because of the dishonour of cheques."
15. It is meritorious to look into [SECTION] of the Code which clearly states that no error in stating either the offence of the particulars required to be stated in the charge, and no omission to the state the offence or those particulars shall be regarded at any stage of the case as material, unless the accused was in fact misled by such error or omission and it has occasioned a failure of justice. The purpose of stating the substance of the accusation under [SECTION] of the Code is similar to framing of charge in warrant triable and session triable cases where the accused is informed of the offence alleged against him. Therefore, the import of [SECTION] ought to be applicable where claims of defective notice under [SECTION] is alleged. In relation to the term "failure of justice", the Hon'ble Apex Court has observed in [PRECEDENT] that:
"23. We often hear about 'failure of justice' and quite often the submission in a criminal court is accentuated with the said expression. Perhaps it is too pliable or facile an expression which could be fitted in any situation of a case. The expression 'failure of justice' would appear, sometimes, as an etymological chameleon (the simile is borrowed from Lord [ENTITY] in [PRECEDENT]. The criminal court, particularly the superior court should make a close examination to ascertain whether there was really a failure of justice or whether it is only a camouflage."
16. In my opinion, neither any prejudice nor any illegality far less a failure of justice has established by the accused. Throughout the proceedings, he has been duly represented by a counsel. Therefore, it is obvious that the accused has understood the nature of the instant case. Further, in the notice, the accused was clearly asked whether he understood the nature and contents of the notice to which [CASE NUMBER] page no.10/13 he has replied in the affirmative. He has filed an application under [SECTION] of the [ACT] subsequent to framing of notice under [SECTION] of the Code. Most importantly, the statement of accused under [SECTION] read with [SECTION] of the Code was recorded by this court and the accused was given an opportunity to explain the incriminating circumstances set out by the complainant in this case. Despite grant of multiple opportunities, the accused has brazenly adopted an approach to not lead any evidence on his behalf and therefore, cannot now cry foul that the notice was not properly framed.
Whether an offence under [SECTION] [ACT] is made out against the accused?
17. The accused has not disputed that the signature on the impugned cheques belong to him and the cheques have been drawn on an account maintained by him. Presentation of the impugned cheques for encashment by the complainant and return of the cheques unpaid by the bank for the reason "exceeds arrangement"
have been proved on record vide cheque return memos dated 17.02.2012 which is CW1/3 and CW1/3A. Therefore, it is a matter of record and has been proved that the impugned cheques were signed by the accused, presented within its validity period and dishonoured by the banker of the accused within the prescribed period. The accused has not denied receipt of demand notice as well.
18. At this juncture, it is imperative to understand the law relating to [SECTION] of [ACT]. [SECTION] provides a statutory presumption that the cheque was handed over in respect of a 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:
[CASE NUMBER] page no.11/13 "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 [PRECEDENT] has also taken an identical view."
19. In the case of [PRECEDENT], it was observed as follows:
"Because both [SECTION] and [SECTION] require that the Court "shall presume" the liability of the drawer of the cheque for the amounts for which the cheque 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).
20. Thus it is an established law that onus lies upon the accused to rebut the presumption and to establish that the impugned cheque was not given in respect of any debt or liability. 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" as laid down by the Hon'ble Apex Court in [PRECEDENT]. The accused has not led any evidence / defence to rebut the presumptions. Therefore, the privilege of presumptions will definitely go to the accused.
[CASE NUMBER] page no.12/13
21. This court is of the opinion that the accused has not set up any defence which is consistent with his innocence of the accused. It is the burden of the accused to bring positive evidence, in the wake of denying the liability by bringing evidence showing that accused has no liability towards complainant in the present complaint. It was the sole burden and duty of the accused to prove no liability by raising a probable defence. The accused has miserably failed to discharge his onus as he has not lead any evidence whatsoever. He has attempted to take shield of technicality and has not lead any evidence with respect to the merits.
22. For rebutting the presumptions under the 'Act', a just need is to raise a probable defence. However, in the present case accused has not only failed to show a preponderance of probabilities in his favour but also has failed in discharging his initial burden for rebutting the presumption under the [ACT] by not leading any cogent evidence in his support. Thus, this court unhesitatingly holds that the accused has not been able to rebut the presumptions under [SECTION] and [SECTION] [ACT] standing in favour of complainant.
23. Having considered the entire evidence, this court is of the opinion that the complainant has successfully proved all the essential ingredients of [SECTION] of the [ACT]. Accordingly, accused is held guilty for committing the offence punishable under [SECTION] of the [ACT]. He is hereby, convicted for the offence under [SECTION] of the Act. Let he be heard on the point of sentence separately.
A copy of the order be sent to District Courts website.
PRIYADARSHINI THYAGARAJAN THYAGARAJAN Date: 2018.09.24 16:29:41 +0530 ANNOUNCED IN OPEN COURTON T. PRIYADARSHINI 24.09.2018 MM-01 ([ACT] page no.13/13 DELHI [CASE NUMBER] page no.14/13