IN THE COURT OF SH. RAKESH KUMAR SINGH: METROPOLITAN MEGISTRATE (NI ACT)-1, CENTRAL: ROOM NO.-356, TIS HAZARI COURT COMPLEX, DELHI [PRECEDENT] [PRECEDENT] JUDGMENT u/[SECTION] [ACT]. (Brief Statement of Reasons for finding as required U/[SECTION] [ACT]) Accused examined himself as a defence witness in some matters and chose not to lead any defence in other matters whereas the complainant has filed six complaints against the accused on the basis of 40 dishonoured cheques received as installment payments in respect of two loans granted to the accused for Rs.3,50,000/- each. The 14 cheques (of Rs.13,222/-each) form part of [CASE NUMBER] whereas rest of the 26 cheques (of Rs.12,250/- each) form part of other four matters i.e. [CASE NUMBER]. And the claim of the complainant is that the said 14 cheques are out of the total 36 cheques of loan amount of Rs.3,50,000/- given in the year 1999 and the said 26 cheques are out of the total 48 cheques of loan amount of Rs. 3,50,000/- given in the year 1997. Complainant has also claimed to have advanced a third loan of Rs.2,50,000/- to the accused in the year 1997. However, the said loan is not the subject matter of the present cases. Accused in his examination in chief has accepted taking of three loans from the complainant, however, has claimed that he had already repaid the loan amount to the [ENTITY] (see examination in chief of accused recorded in [CASE NUMBER]). I do not see any reason to observe that his statement should be accepted in one case in respect of the loan and should not be accepted in other case in respect of the same loan. Even otherwise taking of loan and issuance of cheques are not in dispute as appearing from the statement of accused recorded U/[SECTION] [ACT] in all the cases. So far as the dishonour of cheques is concerned, accused has tried to contend that photocopy of cheque returning memo has been filed by the complainant. However, same is not the case. In [CASE NUMBER], original cheque returning memo is available which is in respect of cheques Series No. 345344 to 345356 and 345358 to 345366 and 345370. These cheques are filed in [CASE NUMBER], [PRECEDENT] [PRECEDENT]. The original dishonour memo is showing payment stopped by the drawer. Since only one original memo was there, it was obvious that it could have been filed only in one case. The original memo is available in [CASE NUMBER] and photocopies thereof are available in other two cases. Quite interestingly even the copy of dishonour memo has been accepted to be correct by the accused in his own cross-examination recorded in [CASE NUMBER]. It is not open for the accused to contend anything about dishonour of the cheques except that he was having sufficient funds and stop payment was made by him for any other sufficient reason. Accused failed to establish any such thing. The ingredient of dishonour of cheque has to be accepted as established. So far as other three cases are concerned, they are having original cheque returning memos. Accused failed to controvert dishonour of cheques and, therefore, the same is accepted also for other three cases i.e. [CASE NUMBER]. So far as the service of notice is concerned, accused has taken inconsistent stand. In [CASE NUMBER], the accused in his examination U/[SECTION] [ACT] has stated to have received legal demand notice whereas in [CASE NUMBER], he has not said anything about this in his statement U/[SECTION] [ACT] and in [CASE NUMBER], he has qualified the receiving of legal demand notice by saying that there was certain infirmity. However, accused subsequently in the same case in the same statement U/[SECTION] [ACT] stated that he has not received any legal demand notice. There is no reason to believe that accused had not received any legal demand notice. Sufficient materials are available on record to hold that legal notice should be deemed to have been delivered in view of three judges bench decision of the Hon'ble Supreme Court in [PRECEDENT]. The next contention that AR of the complainant is not authorized to file the present complaints is neither here nor there. Extract of Board Resolution of the complainant company is available on record whereby [ENTITY] has been authorize to represent the company in court and sign and file and give evidence, engage lawyer and to do all needful activity on behalf of complainant company in relation any suit, complaint, legal proceedings against Mr. [ENTITY], Proprietor of [PRECEDENT] Medilab Systems. There is nothing for the accused in this contention. The entire emphasis of ld. counsel for the accused has been on the issue that accused has paid Rs.5 lacs to the complainant on the direction of Hon'ble High Court of Delhi and that Rs.2 lacs has also been deposited with the District Court where civil suit is pending and, therefore, [PRECEDENT] [PRECEDENT] 2 complainant cannot ask for the amount of the cheques in two different forums. I have considered this contention also what the ld. counsel for the accused has missed is that all such payments claimed by the accused were made/deposited much later than the raising of demand by legal demand notice required U/[SECTION] [ACT]. Such payments cannot bypass a prosecution a prosecution U/[SECTION] [ACT] which stood concluded on failure of accused to pay the demanded amount of dishonoured cheques within 15 days of the service of legal demand notice. In the present case, pertinently such incident took place in the year 2001 and it is not the case of the accused that the payments on the direction of Hon'ble High Court of Delhi or the Ld. Additional District Judge were made within the stipulated period of 15 days. In view of judgment of Hon'ble Supreme Court of India in [PRECEDENT], the contention of ld. counsel for the accused is rejected. Rather such circumstances fortify the view that accused was liable for payment to the complainant. Interestingly, ld. counsel for the accused has also relied upon a payment of Rs.1 lac made by the accused to the complainant in the year 2004 in other complaints pending in the court of Metropolitan Magistrate. This, however, will not help the accused in any manner as the said case was disposed of by the then Ld. MM on 24.08.2004 upon compromise being entered between the parties. On the other hand, it would show the conduct of the accused that he was availing the loan from complainant company and the cheques were being dishonoured. More interestingly in [CASE NUMBER], a common statement dated 24.09.2003 of the accused is available whereby accused had stated before the Ld. ASJ that all the six complaints and other disputes and liabilities were settled between the parties and he had undertaken to produce written out of court settlement. If accused was not liable, there was no occasion for the accused to give such statement. Even further in the same [CASE NUMBER] on 05.09.2011, accused stated that he did not wish to lead defence evidence and was willing to pay the cheques amount of the said case. Even in the written arguments dated 19.10.2012, the ld. counsel for the accused has raised only one point that accused has been harassed by the complainant as he has already received the payment. And for this, ld. counsel has relied upon his written arguments filed before the Ld. ADJ trying a civil suit. It appears that ld. counsel through his written arguments in the said civil suit has raised several points most of which were familiar with the civil procedure and probably might be [PRECEDENT] with requirement of the civil case pending between the parties. Apart from this, he had also raised a contention that all the things were done by the defendant therein under undue pressure. The ld. counsel for the accused in the present complaint cases has prayed that the enclosures of his written arguments be also read in the present cases. He has filed written arguments of the civil suit and details of cheques as enclosure. As such I have gone through the same. In the present cases, accused has failed to establish any undue pressure on him to function in the manner as he did. There is nothing to suggest that any action was taken by the accused in respect of such undue pressure or misuse of cheques by the complainant. A bare explanation of the accused cannot be accepted without any supporting proof. In [PRECEDENT], Hon'ble High Court of Delhi has observed that:- "Mere pleading not guilty and stating that the cheques were issued as security, would not give amount to rebutting the presumption raised under [SECTION] of [ACT]."
"If no loan was given, but cheques were retained, he immediately would have protested and asked the cheques to be returned and if still cheques were not returned, he would have served a notice as complainant. Nothing was proved in this case."
In the above backdrop the sole defence of the accused raised in the present complaint cases has to be considered. Accused has claimed that he had already repaid the loan amount to the [ENTITY] who was a Director of the complainant company and is now deceased.
It appears that it is only a clever thinking of the accused without any supporting foundation. The said [ENTITY] has already expired and cannot appear in the court to controvert the claim of the accused. It appears that keeping such situation in mind, the accused has made such claim. Otherwise no receipt of repayment has been filed by the accused. How can we believe the accused on this score more so in the light of above discussion on the subsequent payments made by the accused in civil suit or upon the direction of the Hon'ble High Court of Delhi.
Hon'ble High Court of Delhi in [PRECEDENT] decided on 27.01.2011 has observed that:
[PRECEDENT] [PRECEDENT] " The plea taken by the accused that the loan was paid in cash without obtaining receipt was rightly disbelieved by the trial court and the trial court convicted the petitioners "
In the light of the above discussion, it has to be held that accused has failed to establish the repayment of the loan taken by him.
It is pertinent to note that complainant to prove the liability is not required to bring several documents. [SECTION] [ACT] does include the presumption of law regarding existence of liability itself. Overruling the earlier view, a larger bench of Hon'ble Supreme Court of India in [PRECEDENT] has held as under:
"In light of these extracts, we are in agreement with the respondent-claimant that the presumption mandated by [SECTION] of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in [ENTITY] (supra) may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein."
One last contention of ld. counsel for the accused is remaining and the same is based upon a premise that complainant was doing a money lending business without having any licence and, therefore, it cannot maintain the present complaint. I consider that in the factual position of the cases in which accused has accepted taking of loan, issuance of cheques and has raised an unsupported claim of repayment of loan, the accused cannot bypass a criminal prosecution by taking help of the concept of money lending law. Hon'ble High Court of Delhi in [PRECEDENT] decided on 09.02.2009 has held that:
"21. The next argument addressed by the petitioner that the respondent was debarred from recovering the loan amount being not a registered money lender does not lie in the mouth of the petitioner for two reasons: The petitioner took the loan from the respondent voluntarily and even executed an agreement in this regard whereby he agreed to repay the same after ninety days with interest. At the same time he also issued the cheque in question for the repayment of the loan but became dishonest when the cheque was presented for encashment. The 2nd reason to reject the argument of the petitioner is that the proceedings under [SECTION] of [ACT] are not recovery proceeding but are proceedings to punish a person who after issuing a cheque fails to honour the same and also commits a [PRECEDENT] [PRECEDENT] 5 default in paying the said amount on receipt of the notice. The judgment relied upon by the petitioner delivered by Andhra Pradesh High Court is not binding on this Court for the reasons stated above."
In view of the discussion above, it is held that accused has failed to rebut the presumptions of law and has failed to controvert the claim of the complainant and as such the accused has made himself liable for conviction for offence U/[SECTION] [ACT]. The accused [ENTITY], Proprietor of [PRECEDENT] Medilab Systems is convicted as such.
A copy of this order be placed on the official website of the District Court.
([ENTITY]) MM([ACT])-01, Central [PRECEDENT] [PRECEDENT]