[PRECEDENT] [ENTITY] Vs [ENTITY] IN THE COURT OF [ENTITY] METROPOLITAN MAGISTRATE DISTRICT-NORTH, TIS HAZARI COURTS, DELHI NEELAM SHARMA Date of institution of case : 29.08.2007 VS Date of decision of case : 09.11.2011 SAVITRI DEVI Unique ID No.02401R0831832007 CC.No.510/A/2010 P.S.- Subzi Mandi U/[SECTION] Negotiable Instrument Act JUDGMENT
1. Date of the commission of offence : 19.08.2007 2. Name & address of the complainant : Smt.[ENTITY] W/o Sh. [ENTITY] R/o:-8/77, First Floor, Geeta Colony ,Delhi-110031 3. Name & address of the accused : Smt. [ENTITY] W/o Sh. [ENTITY] R/o H.No.5541, Old Seelampur, Main Road, Delhi-110031 4. Offence complained of : Under [SECTION] of [ACT] 5. Plea of accused & examination if an : Pleaded not guilty. Examination u/[SECTION] [ACT] Defence evidence was led. 6. Final order : Convicted 7. Date of such order : 09.11.2011 [PRECEDENT] [ENTITY] Vs [ENTITY] BRIEF FACTS AND REASONS FOR DECISION OF THE CASE
1. By way of the present judgment, this court shall decide the complaint case under [SECTION] [ACT] (as amended upto date) filed by the complainant Smt. [ENTITY] against the accused Smt. [ENTITY] W/o Sh. [ENTITY].
2. Brief facts necessary for the disposal of the present case as per the allegations in the complaint, are as follows :-
The complainant was having friendly term with the accused. In the month of July 2006, the accused approached the complainant for a friendly loan of Rs 2 lacs on interest. Keeping in view the friendly relationship, the complainant advanced the loan of Rs 2 lacs to the accused on interest @ 18% per annum. The accused in discharge of her loan liability issued two post dated cheques bearing no.554684 dated 05.03.2007 and 554685 dated 05.04.07, each for sum of Rs 1 lac drawn on Oriental Bank of Commerce, Main Road, Gandhi Nagar, Delhi-110031. The complainant presented the cheque for encashment to her banker.
However, on presentation, the cheques were dishonoured vide cheque returning memo dated 14.07.2007 with remarks " PAYMENT STOPPED BY [PRECEDENT] [ENTITY] Vs [ENTITY] DRAWER" . The complainant issued a legal notice of demand dated 01.08.2007 to the accused through her lawyer which was sent by Registered post & UPC on 01.08.2007 thereby calling upon the accused to make the payment of the cheques amount. The same was duly served upon to the accused and inspite of receipt of the said notice, accused failed to make the payment of the aforesaid dishonored cheques.
As a result of which the complainant filed the instant complaint for prosecution of the accused u/[SECTION] of the [ACT].
3. After considering the entire material and documents on record, summons were issued by my Ld. Predecessor court against the accused vide order dated 29.08.2007 for the offence under [SECTION] of the [ACT]. On appearance of the accused, a separate notice under [SECTION] of the [ACT] dated 03.06.2008 was served upon the accused to which accused pleaded not guilty and claimed trial. An application u/[SECTION] [ACT] filed on behalf of accused seeking permission to cross examine the complainant was allowed on 31.01.2011 and the accused was permitted to cross examine the complainant to the extent of defence so disclosed.
[PRECEDENT] [ENTITY] Vs [ENTITY]
4. In order to prove the case, Smt [ENTITY], complainant got herself examined as PW1 by tendering her affidavit EX.CW-1/A and relied upon the documents i.e two original cheques, two cheque returning memos, legal notice of demand dated 01.08.2007, postal receipt, UPC and Acknowledgment Card which were exhibited as CW-1/1 to CW-1/8 respectively. Smt.[ENTITY], complainant was cross examined by learned counsel for the accused. Thereafter, the complainant evidence was closed.
5. After that the statement of accused was recorded under [SECTION] of the [ACT] in which all the incriminating evidence alongwith exhibited documents were put to the accused Smt. [ENTITY]. The accused admitted that the cheques in question Ex.CW1/1 and EX.CW-1/2 bear her incomplete signatures which were kept at her house partly signed and were blank. Accused further stated that the cheques have been signed as " [ENTITY]" but she used to sign the cheques as " [ENTITY]" . Accused stated that the cheques were stolen regarding which she had already made a complaint to the police and also got the payment stopped. The legal notice was replied by the accused vide reply EX.PW-1/D3. Accused further stated that she had some differences with the complainant who wants to extort money from her by filing [PRECEDENT] [ENTITY] Vs [ENTITY] present false complaint. Accused stated that the complainant never had such source of income to give her a loan of Rs 2 lacs and she never had any need to take a loan of Rs 2 lacs.
6. Opportunity for leading the defence evidence was given to accused. The accused got herself examined under [SECTION] [ACT] upon the application filed u/[SECTION] [ACT] being allowed by this court on 08.04.2011. The accused tendered affidavit in evidence exhibited as EX.DW-1/A and relied upon the documents exhibited as EX.DW-1/1 and EX.PW-1/D3. In her cross examination, the accused admitted that cheques pertain to her bank account and denied her signatures by saying that these are not her full signature as she writes " [ENTITY]" instead of " [ENTITY]" . Accused deposed that the three cheques were prepared by her towards the tuition fee of her children. As she did not find the cheques inspite of her search, she deposited the tuition fee in cash. Accused again stated that she had never issued cheques towards the tuition of her children. Accused stated that she made a complaint to the police regarding the theft of cheques and the police did not make any inquiry on her complaint. Accused deposed that reply of legal notice EX.CW-1/5 was also given by her. Accused further admitted that she did not go to Gandhi Nagar Police Station after the receipt of the notice issued by the complainant or even [PRECEDENT] [ENTITY] Vs [ENTITY] after sending of her reply EX.PW-1/D3. Accused denied to have taken any loan of Rs 2 lacs from complainant or issued the cheques in question in consideration and discharge of this loan liability. Accused denied to have knowledge of the financial status of complainant. Accused admitted that she instructed her banker to stop the payment on the advice of her friends and that funds were not sufficient in her bank account to clear the amount of both cheques. After that defence evidence was closed on statement of Ld. Counsel for accused. Thereafter, the case was fixed for final arguments.
7. The court heard the arguments advanced by the learned counsels and perused the entire record of the case file as well as evidence on record.
8. Before proceeding further, it would be appropriate to quote the Hon'ble Supreme Court in [PRECEDENT] arising out of [CASE NUMBER] decided on 07.05.2010.
" Ordinarily in cheque bouncing 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."
[PRECEDENT] [ENTITY] Vs [ENTITY]
9. In order to bring home the conviction of the accused, the complainant has to prove the ingredients of the offence complained of. The main ingredient of [SECTION] of the [ACT] are as follows:
(a) The accused issued cheque on an account maintained by him with a bank.
(b) The said cheque has been issued in discharge of any legal debt or other liability.
(c) The cheque has been presented to the bank within the period of six months from the date of the cheque or within the period of its validity.
(d) When the aforesaid cheques were presented for encashment, the same were returned unpaid/dishonoured.
(e) The payee of the cheque issued a legal notice of demand within 30 days from the receipt of information by him from the bank regarding the return of the cheque.
(f) The drawer of the cheque failed to make the payment within 15 days of the receipt of the aforesaid legal notice of demand.
[PRECEDENT] [ENTITY] Vs [ENTITY] If the aforesaid ingredients are satisfied then the drawer of the cheque shall be deemed to have committed an offence punishable u/[SECTION] of the [ACT].
10. The court will now deal with the each ingredient of the [SECTION] of the [ACT] to see whether the case against the accused has been proved or not.
A) Limitation Aspect:- The cheques EX.CW-1/1 and EX.CW-1/2 dated 05.03.2007 and 05.04.2007 respectively were presented and returned unpaid due to " Payment Stopped by Drawer" on 14.07.2007 implying that cheque was presented within six months of date of issuance mentioned on cheque. Legal notice EX.CW-1/5 dated 01.08.2007 was dispatched on 01.08.2007 which is well within 30 days of date of return of cheque. Complaint was filed on 23.08.2007 which is within one month of 19.08.2007, the date of arising of cause of action. So, the complaint is well within limitation and the same is not disputed by accused.
B) Dishonor Aspect:- Dishonour of cheque for reason " Payment Stopped" is deemed to be proved by virtue of presumption u/[SECTION] [ACT] as the accused did not challenge the cheque returning memos Ex.CW-1/3 and EX.CW-1/4 by even putting a suggestion to this effect to the complainant.
[PRECEDENT] [ENTITY] Vs [ENTITY] C) Issuance of Cheque Aspect:- The fact that cheques pertain to an account maintained by the accused with her banker is not disputed by the accused. Complainant deposed in para 3 of her affidavit EX.CW-1/3 that the accused issued two cheques CW-1/1 and CW-1/2 towards discharge of loan liability of Rupees Two lacs. This part of deposition has not been challenged by the accused during the cross examination as even a suggestion to negate the same was not given on behalf of the accused. It is the admitted case that the two cheques EX.CW-1/1 and CW-1/2 pertain to the bank account of the accused. It implies that the accused admitted the aforesaid para 3 of the affidavit and thus by omitting to rebut the same subscribed to the factum of issuance of the cheques as deposed by the complainant.
However, accused deposed that three cheques including the two in question were stolen from her house by the complainant and thus denied to have issued the cheques to the complainant. Now it is to seen whether the accused proved her defence version of the theft of the cheques. The version of theft of the cheques was never put specifically to the complainant during her cross examination. However, the accused proved that reply EX.PW-1/D3 to the legal notice EX.CW-1/5 was duly served upon the complainant by getting this fact admitted by the complainant in her cross examination. In the said reply, the accused mentioned that her three cheques [PRECEDENT] [ENTITY] Vs [ENTITY] were stolen by the complainant and after discovering the loss of the cheqeus, the accused lodged complaint at PS Gandhi Nagar on 10.07.2007. However, in the reply EX.PW-1/D3, the accused neither mentioned that the said complaint has been enclosed with the reply nor put a specific question to the complainant that the said complaint was enclosed with the reply sent by her. It shows that the complaint as alleged by the accused to have been lodged at the PS Gandhi Nagar, Delhi is a false and fabricated document prepared after receiving the legal notice of the complainant to substantiate the false defence of the accused and the same was never lodged with the police.
The complaint so lodged was brought by the accused for the first time in defence evidence but the date and factum of lodging of complaint was not proved as per law by summoning the concerned police officials for the reason best known to the accused. Complainant suggested to the accused in her cross examination that the said complaint is forged and fabricated one still the accused preferred not to discharge the burden of proving the said complaint as per law. This is a grave and intentional omission on the part of the accused, which indicates that the version of theft and lodging of complaint is a false and concocted story which would have been disclosed if the police officials were summoned.
[PRECEDENT] [ENTITY] Vs [ENTITY] Moreover, the admission of the accused that she did not approach the police after coming to know through the complainant's notice that cheuqes are in the possession of the complainant or even after sending reply to the complainant's notice falsifies the version of theft of cheques and lodging of complaint regarding the same as a prudent person would not behave in such unreasonable manner. An ordinary victim of theft would have definitely taken active steps for the prosecution of the culprit instead of sitting mum for so many years and facing a false criminal case instituted by the culprit. It again establishes that the defence version of the theft is false and the complaint EX. DW-1/1 is also a forged and fabricated document meant to create false evidence in favour of the accused. It shows that the accused prepared this false complaint upon receiving of the legal notice to evade her liability towards the two cheques which were issued by her to the complainant.
Accused took the stand that the cheques are bearing her incomplete signatures. In the complaint EX.DW-1/1 the accused mentioned that three cheques bearing her signatures have been lost which indicates that the cheques were duly signed by the accused. In the said complaint accused did not mention that the cheques were bearing her incomplete signatures nor the same is mentioned in the reply to the legal notice. Though, the complaint EX.DW-1/1 has not been proved as per law but as the accused is relying upon the same, its [PRECEDENT] [ENTITY] Vs [ENTITY] contents can be considered for showing the malafides of the accused. The version of incomplete signatures was not even put to the complainant during cross examination and was taken for the first time during Statement of accused and defence evidence implying that the same is not only an afterthought but is also not supported by the accused's own documents i.e complaint EX.DW-1/1 and reply to legal notice.
Accused did not lead any other evidence like summoning her account opening form along with specimen signature card to establish that she used to sign as " [ENTITY]" and not as " [ENTITY]" as written on the cheques. So the accused failed to prove that the signatures on the cheques are her incomplete signatures. It is not the case of the accused that the complainant had forged her signature and filled the amount accordingly. So,it was for the accused to disclose as to why she put the incomplete signatures on the cheques. It means that the accused intentionally put the incomplete signatures on the cheques to defraud the complainant or that the signatures on the cheques are complete signatures and the incomplete signatures stance has been taken just to create false defence. So, it stands proved that the cheques were bearing the signatures of the accused.
The accused took another defence that the cheques were blank bearing her incomplete signatures. In the cross examination, accused admitted that the [PRECEDENT] [ENTITY] Vs [ENTITY] cheques were prepared by her towards tuition fees of her children and simultaneously contradicted her statement by stating the she never deposited the tuition fees of her children's by cheques. When fees was never deposited through cheques what prompted the accused to prepare the cheques for payment of tuition fees has not been explained by the accused. It implies that cheques were actually prepared for the complainant. Further,if the cheques were prepared for the tuition fees , it can not be believed that the cheques were blank. The accused did not even put any suggestion to the complainant that the cheques were blank and the same is neither mentioned in the police complaint EX.DW-1/1 or reply to the legal notice. It means that the defence of the cheques being blank is an afterthought which proves that completely filled in cheques were issued by the accused to the complainant.
So far as issuance of blank cheques is concerned in the case titled as [PRECEDENT], Hon'ble Delhi High Court held that " by putting the amount and the name there is no material alteration on the cheque u/[SECTION] of [ACT]. In fact there is no alteration by only adding the amount, name and the date. As [SECTION] of the [ACT] gives authority to holder of instrument to make or complete any instrument as the case may be, the person [PRECEDENT] [ENTITY] Vs [ENTITY] so signing shall be liable upon such instrument, in the capacity in which he signed the same to any holder in due course for such amount."
Hence, once the signatures on the cheques are admitted, holder or payee as the case may be will have a prima facie authority to complete the cheque. So, the issuance of blank signed cheque can not come to the rescue of accused.
In view of the aforesaid discussion, evidence on record ,considering that the cheques bear the signatures of accused and that the accused failed to prove that the complainant is not the payee as the accused's version of theft of cheques and lodging of complaint has been falsified, it stands proved that the accused issued the cheques in question to the complainant. D) Legal Notice Aspect:- Complainant deposed by way of para 6 of affidavit EX.CW-1/A that legal notice was duly dispatched to the accused through his counsel on 01.08.2007 by registered AD,UPC and Courier. Accused admitted to have received the legal notice and same was duly replied by the accused also.So, it stands proved that legal notice was duly served upon the accused . E) Legal Liability Aspect:- Complainant deposed by way of para 2 and 3 of her affidavit that in the month of July 2006, the complainant advanced a sum of Rs 2 lacs to the accused on interest @ 18% per annum as both were having friendly terms. In the cross examination, complainant affirmed her version by [PRECEDENT] [ENTITY] Vs [ENTITY] deposing that payment of the loan amount of Rs 2 lacs was made in cash to the accused in installments. It was again affirmed by the complainant that aforesaid loan amount of Rs 2 lacs was paid in 5/6 installments. Both these admissions were not rebutted by the accused by giving any specific suggestion to negate the same.
It is settled law that facts which remain unrebutted are deemed to be admitted by the party who failed to rebut. So, accused admitted the aforesaid version of the complainant by omitting to rebut the same.
Further, the complainant established her paying capacity by filing her bank account statements and documents pertaining to anganwadi which established her source of income. It is contended on behalf of accused that the complainant admitted to have withdrawn the said loan amount from her four bank accounts and that payment of loan was made in 5 or 6 installments to the accused from July to September 2006 but the bank accounts furnished by the complainant show that total amount withdrawn throughout the year 2006 is less than Rs. 2 lakhs which established that complainant was not having financial capacity to advance a loan of Rs. Two lakhs as alleged by the complainant. Ld. Counsel for the complainant argued that as the accused failed to disprove the issuance of cheque even after leading cogent evidence which turned out to be false and fabricated evidence, presumption under [SECTION] [ACT] cannot be said to [PRECEDENT] [ENTITY] Vs [ENTITY] have been rebutted by minor inconsistencies as aforesaid in the version of the complainant.
It is worth mentioning the Judgment titled as [PRECEDENT] arising out of [CASE NUMBER] passed by Hon'ble Delhi High Court on 21.09.2010, wherein Hon'ble Delhi High Court observed in para 4 and 5 that it is sufficient for the complainant to prove the existence of debt and liability by making a statement that the cheques were issued by the respondent for payment of debt and the presumption under [SECTION] [ACT] is not rebutted by mere inconsistencies in the version of the complainant regarding the manner of advancement of loan as offence u/[SECTION] [ACT] is a technical offence. If the complainant has made the unequivocal statement that the cheque was issued by accused for payment of loan or debt then it is for the accused to rebut the presumption by leading cogent evidence showing the existence of circumstances in which the cheque came into the hands of complainant or was issued.
In the present case ,the complainant unequivocally deposed that the cheques were issued to her by the accused in discharge of loan liability for a sum of rupees two lacs which even remained unrebutted. The accused led defence evidence but failed to prove her defence version that cheques were stolen and misused by the complainant as already discussed in point (C) on [PRECEDENT] [ENTITY] Vs [ENTITY] issuance of cheque aspect and thus could not explain as to how the cheques came into the possession of complainant .
Accused further deposed that the financial capacity of the complainant was not so well as to advance loan of Rs 2 lacs whereas in her cross examination the accused admitted that she is not aware of the financial status of the complainant. The accused admitted by volunteering that during the year 2007, the complainant was not having any financial status. However, the accused did not utter even a single word regarding the financial status of the complainant during the year 2006, when the alleged loan was advanced to the accused by the complainant. The above stated contradictions and omissions in the version of the accused show that the accused is making false statements regarding the financial status of the complainant which substantiate that complainant was financially sound and advanced a loan of Rs Two lacs in the year 2006 . So, considering the aforesaid discussion and following the aforestated observations of Delhi high court, this court is of the view the contradictions in complainant's version regarding manner of advancement of loan are minor inconsistencies which cannot rebut the presumption u/[SECTION] [ACT].
So, the complaint discloses the prima facie existence of legally enforceable debt or liability as the complainant has maintained throughout the [PRECEDENT] [ENTITY] Vs [ENTITY] case that she advanced a sum of Rs Two lacs to the accused in lieu of which the cheques in question was issued to him which the accused failed to rebut.
Thus, it stands proved that cheque in question was issued and drawn by the accused in favour of complainant towards discharge of existing liability for repayment of sum of Rs Two lacs.
11. It is admitted by the accused that she issued instructions to her banker to clear the amount of both the cheques. It is further admitted by the accused in her cross examination that funds were not sufficient in her account at the time of presentation of the cheques in question. Regarding the issuance of instructions for stopping the payment, Hon'ble Supreme Court held in case titled as [PRECEDENT], that:
" 18. Just such a contention has been negatived by this Court has, in the case of [PRECEDENT]. It has been held that even though the cheque is dishonored by reason of 'stop payment' instruction an offence under [SECTION] could still be made out. It is held that presumption under [SECTION] is attracted in such a case also. The authority shows that even when the cheque is dishonored by reason of stop payment [PRECEDENT] [ENTITY] Vs [ENTITY] instructions by virtue of [SECTION] the Court has to presume that the cheque was received by the holder for the discharge, in whole or in part, of any debt or liability. Of course this is a rebuttable presumption. The accused can thus show that the "stop payment"
instructions were not issued because of insufficiency or paucity of funds. If the accused shown that in his account there was sufficient funds to clear the amount of the cheque at the time of presentation of the cheque for encashment at the drawer bank and that the stop payment notice had been issued because of other valid causes including that there was no existing debt or liability at the time of presentation of cheque for encashment, then offence under [SECTION] would not be made out. The important thing is that the burden of so proving would be on the accused. Thus a Court cannot quash a complaint on this ground."
From the mandate given in MMTC (Supra), it is clear that even in case of stop payment the court has to presume that the cheque was received by the holder for the discharge of liability. The accused may rebut this presumption and show that "stop payment" instructions were not issued because of insufficiency or paucity of funds but because of other valid causes.
In present case, the accused did not summon her banker or place any document on record to show that stop payment instructions were issued to the [PRECEDENT] [ENTITY] Vs [ENTITY] banker for any reason other than insufficiency of funds, rather the accused admitted that funds were also insufficient in her account to clear amount of both the cheques. It shows that the omission to bring any evidence as stated above on record to establish the reasons for issuance of stop payment instructions is deliberate omission and the stop payment instructions were issued just to avoid the payment as the accused was aware that funds were not sufficient in her account. The afore stated conclusion is further substantiated from the fact that the accused failed to prove the non-issuance of cheques to complainant as the inconsistent defences taken by the accused i.e. theft of the cheques by the complainant, lodging of complaint to that effect in concerned police station, issuance of blank cheques bearing incomplete signatures and that the cheques were lying prepared for payment of tuition fees, have already been proved to be false, fabricated and concocted as discussed in point (C) on issuance of cheque aspect.
Thus, it stands proved that payment was stopped not because of theft of the cheques or for any other valid reason but to avoid the friendly loan liability of Rupees two lacs in discharge of which two cheques were issued by the accused to the complainant.
[PRECEDENT] [ENTITY] Vs [ENTITY]
12. In view of the aforesaid discussion as accused has failed to rebut the mandatory presumption of law arising in favour of complainant, this court is of the considered opinion that the complainant has proved her case against the accused beyond shadow of reasonable doubts. All the ingredients of [SECTION] of [ACT] have been duly proved on record. Accordingly accused Smt.[ENTITY], W/o Sh.[ENTITY] stands convicted of the offence u/[SECTION] [ACT].
13. Let the convict be heard on the point of sentence.
Announced in the open court [ENTITY] today i.e. 9.11.2011 Metropolitan Magistrate North/Delhi 9.11.2011