Delhi District Court
) Whether The Cheque Was Drawn For ... vs . on 10 September, 2012
-:1:-
IN THE COURT OF SHRI AJAY SINGH SHEKHAWAT : MM
(SPECIAL COURT - 04) : DWARKA COURTS : NEW DELHI.
Case No. : 7354/09
Date of Institution of Present Case. : 20.03.09
M/s D.K. Associates
having its office: 38, Devli Road
Khanpur Extension near Punjab
National Bank, New Delhi-110062
... Complainant.
Vs.
Gyan Chand
S/o Sh Phool Singh ...... Accused.
R/o E-II/103/104, Madangir
New Delhi -110062.
Offence Complained Of. : U/s 138 Negotiable Instrument
Act, 1881.
Plea of the Accused. : Not Guilty.
Arguments Heard On. : 22.08.2012
Final Order. : Acquitted U/s 138 of Negotiable
Instrument Act, 1881.
Date of Judgment. : 10.09.2012
- :: JUDGMENT :: -
1.Vide this judgment, I shall dispose off the present complaint filed by the complainant u/s 138 Negotiable Instrument Act, 1881 (hereinafter referred to as the "NI Act"). At the outset, it would be apposite to refer to the aforesaid provision. The same is reproduced as below: -
CC no. 7354/09 D. K. Associates Vs. Chanderwati & others -:2:- "138. Dishonour of cheque for insufficiency, etc., of funds in the account. - Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that 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 that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for (a term which may be extended to two years), or with fine which may extend to twice the amount of the cheque, or with fine which may extend to twice the amount of the cheque, or with both: -
Provided that nothing contained in this section shall apply unless: -
(a) the cheque has 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;
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, (within thirty days) of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque within fifteen days of the receipt of the said notice.
Explanation. - For the purposes of this section, "debt or CC no. 7354/09 D. K. Associates Vs. Chanderwati & others -:3:- other liability" means a legally enforceable debt or other liability."
2. Brief facts as averred in the present complaint are that the complainant is a registered firm under the Partnership Act and is engaged in the business of providing loan, financial assistance, leasing and hire purchases etc. The case of the complainant is that the accused approached the complainant and requested to take a loan and complainant gave him the loan and accused executed some documents. The complainant has further averred that in discharge of his liability, accused No. 2 on behalf of accused No. 1 issued cheque bearing no. 802970 dated 14.01.2009 amounting to Rs. 1, 03, 600/- drawn on Central Bank of India, Branch Panchsheel Park, New Delhi which, on presentation, got dishonoured due to the reason "Funds insufficient". The complainant thereafter issued a legal demand notice but despite service of the same, the accused neither replied to the notice nor paid the cheque amount in question. Hence, the complainant has filed the present complaint to prosecute the accused u/s 138 NI Act.
3 Upon service of summons, the both the accused persons put their appearance and were admitted to bail on 1.10.2011. Notice was framed only against the accused no. 2 Gyan Chand on 31.10.2011 to which he pleaded not guilty and claimed trial. The allegations in the complaint against the accused no. 1 - Chandrawati were withdrawn by the CC no. 7354/09 D. K. Associates Vs. Chanderwati & others -:4:- complainant vide separate statement of AR of the complainant dated 31.10.2011.
EVIDENCE
4. To support its case, the complainant company examined CW1 Mr. Dheeraj Kumar, AR of the Complainant company.
5. On 14.12.2011, CW1 tendered his evidence by way of affidavit and reiterated the contents of the complaint and relied upon the documents Ex.CW1/A to Ex.CW1/J. During the cross-examination CW1 stated that accused Gyan Chand is not a guarantor in the loan. He had given the cheque. He also stated that they had not filed the case against the accused Gyan Chand as a guarantor of the loan. However, the witness CW -1 was confronted with the para 2 of the complaint Ex. CW1/1 where in it was stated by the complainant that accused No. 2 Gyan Chand was the guarantor of accused No. 1 Chanderwati. He further stated that complainant is a partnership firm and is not registered with RBI or any other Government body for granting loan to the customers. He further admits that neither in the complaint nor in the affidavit it was mentioned that how much loan amount has been disbursed to the accused as loan. He further stated that loan was granted to Chanderwati and there was no guarantor in the loan. He also stated that he do not know whether any permission has been taken from RBI or any other Government Institution CC no. 7354/09 D. K. Associates Vs. Chanderwati & others -:5:- for charging interest at the rate of 24%. He further stated that complaint and affidavit does not mention as to how much amount has been paid towards the loan. He again stated that accused/Gyan Chand is guarantor for the loan taken by Chanderwati. He had further deposed that accused Gyan Chand had issued the present cheque to repay the outstanding liability towards his mother Chanderwati in the present case. Interestingly, CW 1 had admitted the suggestion that Gyan Chand had no liability in the present case. He declined the suggestion that cheque in question was issued towards security for the loan of Sh. Phool Singh, father of accused Gyan Chand. He deposed that loan document was executed on 11.08.2005. He further stated that the loan was repayable through cash and cash was collected from the house of Chanderwati and printed receipts were issued for cash collected. He had stated that he had not filed any document to show that Chanderwati was liable to pay Rs. 1, 36,000/- on the relevant date mentioned on the cheque. He declined the suggestion that address mentioned in the legal demand notice is incorrect. He admitted the suggestion that no written notice was sent to Chanderwati regarding the outstanding liability. 6 CW Dheeraj Kumar was further cross-examined by ld Counsel for accused on 24.12.2011. He stated that statement of account was prepared on 15.12.2011. He was confronted with the statement of account from 1.07.2009 till 30.11.2011. He admitted that the statement of account CC no. 7354/09 D. K. Associates Vs. Chanderwati & others -:6:- does not show the entry with respect to the present cheque in question. He further stated that an entry was made with respect to the payment towards present loan in the ledger. He voluntarily stated that the ledger had been lost. He further stated that he does not know anything about the statement of account.
7 Complainant Evidence was thereafter closed on 24.12.2011. 8 In order to explain the incriminating circumstances as appeared in the complainant evidence, the statement of the accused person Gyan Chand was recorded under Section 313 of Cr. P.C. on 19.01.2012 wherein he stated that he had not taken any loan from the complainant, however, his mother had taken loan from D. K. Associates. He admits his signatures on the cheque in question, however the cheque was given at the time of sanctioning of loan of his mother as a security. It was further stated that he did not receive the legal demand notice. The present loan in question was taken by his mother and same was repaid to the complainant with interest and after the regular payment of this loan in question, a new second loan was granted by the complainant to his father Sh. Phool Singh. He further stated that complainant never issued any true receipt for payment and he always made the entry in his register to satisfy him and his family members regarding payment and on their request the complainant generally sometimes issued Kachi receipts on a plain paper. He further stated that after complete payment they had gone CC no. 7354/09 D. K. Associates Vs. Chanderwati & others -:7:- to the office of complainant where the complainant asked for kachi receipts and they handed over kachi receipts to them and the complainant destroyed kachi receipts also after completion of the payment of this loan in question and told us that there is no dues against his mother Chanderwati. At the time of sanctioning of loan in question the complainant had taken 12 blank signed cheques from him as security.
9. Thereafter, the matter was adjourned for Defence Evidence
10. To support its case, the defence examined two witnesses in Defence Evidence namely DW1 Mrs. Chanderwati, DW2 - Gian Chand (Accused himself)
11. During examination in chief, DW1 Mrs. Chanderwati stated that she had applied for a loan of Rs.50,000/-, however, the complainant has granted Rs. 45,000. She further stated that at the time of sanctioning of loan, 12 cheques were issued as security by his son Gyan Chand. She further deposed that complainant had never issued any pakki receipt to her and he always maintained record of payment in his register. She further deposed that when only three installments of this loan were due, her husband has applied for a new loan and he was granted new loan of Rs. 45,000/-. It was further stated by DW 1 that after taking new loan in CC no. 7354/09 D. K. Associates Vs. Chanderwati & others -:8:- the name of her husband, she started to pay Rs. 10,000/- for both the loans. The remaining three installments of the present loan were also paid by her. She further stated that she had paid the whole loan amount with interest to the complainant. During cross-examination she stated that she had put their thumb impression on the respective loan documents and that signatures were not of her. She declined the suggestion that she had borrowed a sum of Rs. 80,000/- from the complainant instead of Rs. 50,000/-. She further declined the suggestion that the EMI was in the sum of Rs. 3822/-. She stated that EMI was of Rs. 5000/-. She further stated that installment was given back to the complainant known with the name of D. K and that cheque was given by his son accused No. 2 Gyan Chand to the DK. She also stated that she did not receive any legal demand notice Ex. CW1/H.
12. Upon being permitted by the Court to examine himself as a defence witness U/s 315 Cr. PC, accused Gyan Chand in capacity of defence witness stated that his mother Chanderwati had taken a loan of Rs. 45,000/- and he had given 12 cheques as security to the complainant. He further deposed that the monthly installments were being repaid by his mother and no receipt were issued to her with respect to the same. He further stated that his mother used to pay the monthly installments of this loan in the office of complainant and she paid the CC no. 7354/09 D. K. Associates Vs. Chanderwati & others -:9:- entire loan amount to the complainant. He stated that the second loan was availed by his father which had also been paid to the complainant. He further stated that cheque in question Ex. CW1/F is one of the 12 security cheques which were given by him to the complainant at the time of sanctioning of loan. During cross-examination, DW2 - Gyan Chand (Accused himself), he stated that his father had taken a loan 8 -9 years back however, the same was for Rs.50,000/- out of which Rs 45000/- was disbursed to him. He further stated that complainant was not used to issue any receipt of the repaid amount, however, after 3-4 installments and on being insisted, the complainant issued a 2-3 kachi receipt. He further stated that he could not produce the 2-3 kachi receipt which was issued by the complainant as same were destroyed by the complainant when the second loan was availed. It was further stated by DW 2 that the address mentioned in the legal demand notice is correct but denied received the same. He also denied the suggestion that EMI for the loan was Rs. 3822/- instead of Rs. 5000/-. He further stated that repayment of the said loan was to be paid through cash as agreed between the parties. He further submitted that he does not remember whether legal notice Ex. CW1/H was received by him or not.
13. Thereafter, the Defence Evidence was closed on 04.04.2012 and the matter was fixed for final arguments.
CC no. 7354/09 D. K. Associates Vs. Chanderwati & others -:10:-
14. Final arguments were heard on behalf of both the parties and concluded on 22.08.2012.
ARGUMENTS 15 During final arguments, Ld. Counsel for Complainant company submitted that all the acts forming the ingredients of Section 138 of the Negotiable Instruments Act have been successfully established and proved beyond reasonable doubt. Ld. Counsel for complainant has further argued that accused Gyan Chand had issued the cheque in question in discharge of legal liability owed to the complainant. It has been further contended by ld Counsel for complainant that on presentation of the said cheque in question, it was dishonored on the grounds that funds were insufficient in the account of accused Gyan Chand. Ld Counsel for complainant has further argued that despite the due service of legal demand notice dated 06/02/2009 by registered post/AD addressed to accused Gyan Chand, he failed to make the payment within the prescribed period. 16 On the other hand, Ld. Counsel for the accused has argued that accused owed no legal liability towards the complainant and the loan was advanced to the mother of accused and not to the accused. He has further submitted that cheque in question was given to the complainant as CC no. 7354/09 D. K. Associates Vs. Chanderwati & others -:11:- a security cheque for the purpose of securing the repayment of the loan advanced to the mother of Gyan Chand. He has further contended that in his cross-examination AR of the complainant has admitted that accused Gyan Chand was not the guarantor in the alleged loan transaction. Ld defence Counsel has further argued that the complainant firm was not registered under Punjab Registration of Money Lenders Act, 1959 and as a result the present prosecution of the accused by the complainant is barred under the provisions of law. It has been further contended by the ld. defence Counsel that the legal demand notice Ex. CW1/H was not duly served upon the accused as the address mentioned in the legal demand notice was incomplete/incorrect. Concluding his submission, ld defence Counsel has stated that no offence U/s 138 of Negotiable Instrument Act was made out against accused Gyan Chand.
17. I have carefully heard the arguments advanced from both the sides and meticulously perused the complete case record. From the evidence adduced on behalf of the complainant and defence and upon hearing the arguments advanced, the following points arise for my determination: -
1) Whether the cheque was drawn for discharge, in whole or in part, of any legally enforceable debt or other liability?
CC no. 7354/09 D. K. Associates Vs. Chanderwati & others -:12:-
2) Whether statutory notice u/s 138 NI Act in writing was given to the drawer of the cheques making a demand for the payment of amount mentioned in the cheque within 30 days of the receipt of information by payee/holder in due course from the bank regarding the return of the cheque as unpaid?
3) Whether the drawer failed to make such payment withing 15 days of the receipt of the aforesaid notice?
4) Whether non-registration of the complainant under the Punjab Registration of Money lenders Act, 1959 would bar the present complaint.
STATEMENT OF REASONS FOR THE DECISION Whether non-registration of the complainant under the Punjab Registration of Money lenders Act, 1959 would bar the present complaint.
18 Ld Counsel for accused challenged this assertion by stating that a loan advanced by a money lender who is carrying on the business of money lending without a licence is not a 'debt or other liability', and provisions of Section 138 NI Act would not apply to such a transaction. Counsel for accused has placed reliance on J Daniel Vs. State of Kerala & ors, 2006(1) Civil Court Cases 530(Kerela) wherein it has been held that a dishonored cheque which was issued for an unlawful consideration CC no. 7354/09 D. K. Associates Vs. Chanderwati & others -:13:- would not invoke the penal provisions of Section 138 NI Act. Explanation to Section 138 NI Act is pellucid in as much as 'debt or other liability' means a legally enforceable debt/liability. If any agreement is opposed to law or forbidden by law, it is not enforceable. If money is lent by a person without having the authority/licence to do so, then it would be an unlawful agreement and consequently there would be no legally enforceable debt or liability.
19 It would be apt to refer to provisions of the Punjab Registration of Money Lender's Act, 1938. Section 3 of the Act, bars suits for recovery of a loan by a money lender not holding a valid licence. The point for consideration now is whether such a money lender, who does not have a valid money lending licence, can successfully prosecute a person under provisions of the NI Act.
20 A bare perusal of the explanation to Section 138 of NI Act would make it crystal clear that "debt or other liability" for the purposes of Section 138 means only a " Legally enforceable debt or liability" when recovery of same has been barred by another law. I am fortified in my view by a decision of the Hon'ble Mumbai High Court in Anil Vs. Purshottam, 2011(1) DCR 214 wherein the Hon'ble Court was seized of a similar matter. It was held as under:-
CC no. 7354/09 D. K. Associates Vs. Chanderwati & others -:14:- "9..... In other words, carrying on money lending business without licence debars a person from doing money Lending business and recovering the amount through Court. As per explanation to Section 138 of the Negotiable Instrument Act "debt or other liability" means a legally enforceable debt or other liability. So, a loan advanced by a money lender who is doing business of money lending without licence is not a debt or liability and provision of Section 138 of the Act will not apply to such transaction."
21 In the light of the foregoing discussion and findings, it can be safely concluded that even if the loan was advanced by the complainant to the accused being a money lender, non possession of a valid money lending licence would dis entitle the complainant to institute proceedings against the accused U/s 138 of NI Act for the recovery of such unlawful consideration. Thus, the complainant had no locus standi to institute the present complaint.
22 However, to further discuss the contentions raised on behalf of both the sides, it would be apposite to state that there are two presumptions of law as mandated by the Negotiable Instruments Act. According to Section 118 (a) it shall be presumed that every negotiable instrument was made or drawn for consideration. By virtue of this clause, CC no. 7354/09 D. K. Associates Vs. Chanderwati & others -:15:- the Court is obliged to presume that the promissory note was made for consideration or until the contrary is proved. In Mallavarapu Kasivisweswara Rao Vs. Thadikonda Ramulu Firm and Others AIR 2008 SC 2898 it was held as under: -
"12. Under Section 118 (a) of the Negotiable Instruments Act, the court is obliged to presume, until the contrary is proved, that the promissory note was made for consideration. It is also a settled position that the initial burden in this regard lies on the defendant to prove the non-existence of consideration by bringing on record such facts and circumstances which would lead the Court to believe the non-existence of the consideration either by direct evidence or by preponderance of probabilities showing that the existence of consideration was improbable, doubtful or illegal. In this connection, reference may be made to a decision of this Court in the case of Bharat Barrel & Drum Manufacturing Company v. Amin Chand Payrelal [supra]. In paragraph 12 of the said decision, this Court observed as under: Upon consideration of various judgments as noted hereinabove, the position of law which emerges is that once execution of the promissory note is admitted, the presumption under Section 118(a) would arise that it is supported by a consideration. Such a presumption is rebuttable. The defendant can prove the non-existence of a consideration by raising a probable defence. If the defendant is proved to have discharged the initial onus CC no. 7354/09 D. K. Associates Vs. Chanderwati & others -:16:- of proof showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the plaintiff who will be obliged to prove it as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument. The burden upon the defendant of proving the non-existence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies. In such an event, the plaintiff is entitled under law to rely upon all the evidence led in the case including that of the plaintiff as well. In case, where the defendant fails to discharge the initial onus of proof by showing the non- existence of the consideration, the plaintiff would invariably be held entitled to the benefit of presumption arising under Section 118(a) in his favour. ... ... ... The bare denial of the passing of the consideration apparently does not appear to be any defence. Something which is probable has to be brought on record for getting the benefit of shifting the onus of proving to the plaintiff. To disprove the presumption, defendant has to bring on record such facts and circumstances upon consideration of which the court may either believe that the consideration did not exist or its non-existence was so probable that a prudent man would, under the circumstances of the case, shall act upon the plea that it did not exist... ... ..."
According to Section 139 of NI Act "it shall be presumed, unless the CC no. 7354/09 D. K. Associates Vs. Chanderwati & others -:17:- contrary is proved that the holder of a cheque received the cheque for discharge in whole or in part, of any debt or other liability." Under Section 139 NI Act there is a legal presumption that the cheque was issued for discharging an antecedent liability and that presumption can be rebutted only by the person who draw the cheque. This presumption can be rebutted by the accused by adducing evidence. So the burden of proof is on the accused. In the present case, the accused has merely stated u/s 313 CrPC that the accused issued the cheque as blank without filing in any amount as a security for repayment of loan taken from the complainant. In Hiten P. Dalal Vs. Bratindranath Banerjee AIR 2010 SC 1898 it was held as under: -
"The words 'unless the contrary is proved' which occur in this provision (Section 139) make it clear that the presumption has to be rebutted by 'proof' and not by a bare explanation which is merely plausible. A fact is said to be proved when its existence is directly established or when upon the material before it the Court finds its existence to be so probable that a reasonable man would act on the supposition that it exists. Unless, therefore, the explanation is supported by proof, the presumption created by the provision cannot be said to be rebutted... ... ..."
23 From the legal position as stated above, the complainant in this case CC no. 7354/09 D. K. Associates Vs. Chanderwati & others -:18:- has sought the aid of the presumptions provided in Section 139 r/w 118(a) of the Negotiable Instruments Act, 1881 to establish the guilt of accused U/s 138 of the said Act.
24 To rebut these presumptions of law ld defence Counsel has contended that there was no legal liability against accused Gyan Chand towards the complainant. He has relied upon the cross-examination of the AR of the complainant to fortify his contention wherein the AR has admitted that the accused Gyan Chand was not the guarantor of the loan transaction. The relevant extract is reproduced hereunder.
"................It is correct that accused Gyan Chand is not the guarantor in the loan. ...................It is wrong to suggest that we had filed the case against accused Gyan Chand as guarantor of the loan. We had not filed the case against accused Gyan Chand as guarantor of the loan.............There was no guarantor in the loan...............It is correct that Gyan Chand had no liability in the present case............."
25 It is well settled legal position that in order to rebut the presumptions U/s 139 r/w Section 118(a) of the Negotiable Instruments Act, 1881, the standard of proof which is to be adopted is preponderance of probabilities. In the present case, AR for the complainant himself has stated that accused was not the guarantor to the loan transaction. The complainant has not produced any documentary evidence wherein the CC no. 7354/09 D. K. Associates Vs. Chanderwati & others -:19:- legal liability to repay the said amount to the complainant can be established against the accused Gyan Chand. Moreover, the loan agreement also reflects only the signatures of borrower Chanderwati who is the mother of accused Gyan Chand. No where in the documents produced by the complainant the status of accused Gyan Chand is reflected as a Guarantor.
26 The complainant has further contended that in spite of giving of statutory notice u/s 138 NI Act, the accused failed to pay the amount of cheque in question. The accused, on the other hand, has vehemently denied the receipt of any legal notice. In his statement u/s 313 CrPC he has reiterated that he has never received the mandatory legal demand notice as stipulated by Section 138 NI Act.
"27. Meaning of service by post. -
Where any Central Act or Regulation made after the commencement of this Act authorizes or requires any document to be served by post, whether the expression serve or either of the expressions give or send or any other expression is used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing, pre- paying and posting by registered post, a letter containing the document, and, unless the contrary is proved, to have been effected CC no. 7354/09 D. K. Associates Vs. Chanderwati & others -:20:- at the time at which the letter would be delivered in the ordinary course of post."
27 The complainant has placed reliance on legal notice dated 06/02/2009 which is Ex. CW1/ D, postal receipt Ex.CW1/E and UPC Ex. CW1/F. Thus the complainant contended that a presumption of service of notice ought to be drawn.
28 The accused, on the other hand, has vehemently denied the receipt of any legal notice all throughout the trial. In his examination in chief, cross-examination and in his statement U/s 313 Cr. PC he has reiterated that he has never received the mandatory legal demand notice as stipulated under Section 138 of NI Act. Reliance can be placed on V. Raja Kumari Vs. Subbarama Naidu (2004) 8 SCC 774 wherein it was laid down that:-
No doubt Section 138 of the Act does not require that the notice should be given only by 'post'. Nonetheless the principle incorporated in Section 27 (quoted above) can profitably by imported in a case where the sender has dispatched the notice by post with the correct address written on it. Then it can be deemed to have been served on the sender unless he proves that it was not really served and that he was not responsible for CC no. 7354/09 D. K. Associates Vs. Chanderwati & others -:21:- such non service."
29 The notice was sent through UPC as well wherein the addresses of the accused was given as R/o E-II/103, Madangir New Delhi -110062. 30 It has been vehmently contended on behalf of accused that upon careful perusal of the defence evidence, it is clearly established that accused Gyan Chand has not received the legal demand notice. In support of this contention, ld defence Counsel has further argued that address mentioned in the legal notice was only E-II/103, Madangir New Delhi
-110062 which is not the correct and complete address of accused Gyan Chand. Ld defence Counsel further contended that the correct address of accused is E-II 103/104 Madangir, New Delhi. During defence evidence, it has come on record that accused Gyan Chand and her mother use to live separately but in adjacent houses. The house number of Gyan Chand is 104 and house of Chanderwati is 103. The legal demand notice dated 06/02/2009 Ex. CW1/D was addressed to only house No 103 and not the house No. 104 which is the residence of accused Gyan Chand. During all the stages of trial including statment of accused and defence evidence, accused Gyan chand has stated his address to be E-II 103/104 Madangir, New Delhi. In fact it was similarly stated in the bail bonds furnished by the accused.
CC no. 7354/09 D. K. Associates Vs. Chanderwati & others -:22:- 31 Since there is a clear cut contrast in the address of the accused as mentioned in the legal demand notice Ex. CW1/D and as given in the bail bonds furnished by him, a presumption cannot be drawn that the accused received the legal demand notice as the notice was sent on an incorrect/incomplete address. This conclusion is further fortified by the fact that the address given while framing of notice U/s 251 Cr. PC as well as during recording of statement of accused and defence evidence of DW2 accused Gyan Chand was E-II 103-104, Madangir, Delhi whereas the address mentioned on the legal notice dated 06/02/2009 was R/o E- II/103, Madangir New Delhi -110062.
32 In this regard, reliance can also be placed on Anil Raj Vs. Integrated Finance Ltd II(2006) CCR31. Para 12 and para 17 are relevant are reproduced as hereunder:-
"12. But then, another question may arise before the Court. What must be the nature of proof required for the above two facts? It is needless to say that the standard of proof required is not as great as that is to be insisted from the prosecution. It is not beyond reasonable doubt. It is only proof on the scale of preponderance of probabilities and possibilities. This is because burden of CC no. 7354/09 D. K. Associates Vs. Chanderwati & others -:23:- proof of the above said two fact is on the accused/sendee. Thus, ultimately if the Court finds on the scale of preponderance of probabilities and possibilities that notice was not actually served on the sendee and that he was not responsible for such non-service, notice cannot be deemed served on the accused.
17. The courts must therefore be cautious while dealing with such situations.
While safe guarding the interest of a
complainant from a tricky accused who
purposely evades notice, in my view, Supreme Court has adequately protected an innocent accused also, from a dishonest complainant. That is why the Supreme Court said in Raja Kumari's case that a notice " can be deemed to have been served on the sendee, unless he proves that it was not really served and that he was not responsible for such non-service."
According to me, there is a note of caution in that judgment in favour of the accused also. If the accused proves that there was no service of notice and that he was not responsible for non-service, then notice cannot be deemed served. In the above circumstances, I hold that Courts cannot without, application of mind, mechanically infer in every case wherein there is evidence for dispatch of CC no. 7354/09 D. K. Associates Vs. Chanderwati & others -:24:- notice, that notice is served. Such automatic inference, without understanding the real import of the legal position will result in serious miscarriage of justice."
33 The foregoing judgment drives home the point that Courts necessarily need not drawn a presumption as to service of notice in each and every case.
34. In Pirthi & Ors. Vs Daya Kishan & Anr. (2007)4PLR393 it has been categorically stated that:
"However, presumptions both under Section 27 of the General Clauses Act as well as under
Section 114 of the Evidence Act are rebuttable. It is also well settled that said presumption stands rebutted by the statement on oath by the addressee that no such notice was ever tendered to him by the Postman and he did not refuse to accept any notice from the Postman. In Puran Chand v. Smt. Lajya Watti (1972) 74 P.L.R. 930 (P & H) and Jagat Ram Khullar and Anr. v. Bam Mal MANU/DE/0210/1975 :
AIR1976Delhi111 , it has been held that mere statement on oath by the addressee denying the tender and refusal to accept the delivery of the letter is sufficient to rebut the presumption raised CC no. 7354/09 D. K. Associates Vs. Chanderwati & others -:25:- under Section 27 of the General Clauses Act as well as under Section 114 of the Evidence Act. In the instant case, the presumption arising in favour of the plaintiffs stands rebutted by the unshattered testimony of defendant No. 1, while appearing as DW. 1. In that situation, to prove the said notice of demand, the plaintiffs were required to examine the Postman, which they did not."
35. In Meghji Kanji Patel vs Kundanman Chamanlal Mehtani AIR 1968 Bom 387 the following was the observation:
"I am afraid, the learned Judge has lost sight of the fact that sending of a letter by registered post merely raises a rebuttable presumption that the letter was delivered to the addressee. In a case where the addressee makes a statement on oath that such a letter was not tendered to him, the presumption stands rebutted"
36 The aforesaid judgments go on to show that if the accused states on oath that he did not receive the notice, then the presumption as to service of notice stands rebutted.
37. Moreover, in M/s Jai Durga Enterprises vs State of U.P & Anr. CC no. 7354/09 D. K. Associates Vs. Chanderwati & others -:26:- 2006 CriLJ 3312 it was held that :
"It shall not be presumed that there is sufficient service regarding notice sent by U.P.C'. and it cannot be taken into account under Section 27 of the Act that there was sufficient service upon the accused/applicants. Although, it has been denied by the applicant that no any notice was received by them in the affidavit and same has not been controverted by filing counter affidavit. Therefore, it is liable to be deemed that there was no sufficient service of legal notice upon the applicants/accused"
38 In the present case, the accused has testified on oath the factum of non-receipt of the notice but the same has not been controverted by the complainant by filing a counter affidavit or otherwise.
39 In Jagat Ram Khullar Vs Battu Mal 12(1976)DLT127, it was thus laid:
"12. It would thus appear that ordinarily a statement of the addressee on oath that the postal cover, said to have been refused by him, was never tendered to him would be sufficient to dislodge the presumption and shift thatthe onus on the other side to establish by evidence that the service had been duly effected. It is, CC no. 7354/09 D. K. Associates Vs. Chanderwati & others -:27:- therefore, not possible to accept the contention that the bare statement on oath the addressee in such a case would not, as a matter of law, be sufficient to dislodge the presumption that may be raised either under Section 114 of the Evidence Actor under section 27 of the General Clauses Act. A statement on oath of a party to the proceedings is a piece of oral evidence like statement of any other witness and there is no rule of law that such a statement should not be accepted merely because it is made by a person who is interested in the proceeding nor is there any requirement of law that the statement on oath of a party to the proceeding must always be corroborated by any independent evidence before it could be accepted by a Court of law. It is not possible to lay down any hard and fast rule of law with regard to sufficiency of evidence. If a statement of a party on oath inspires confidence, the Court is entitled to accept it and base its conclusion on it. Learned counsel for the landlord has not been able to point out any discrepancy in the statement or any other feature of it which may justify its rejection. It is also not possible, to accept the conclusion of the Rent Control Tribunal that the tenant should have given better evidence such as the existence of an extraordinary situation in CC no. 7354/09 D. K. Associates Vs. Chanderwati & others -:28:- which the tender could not have been made. Such an evidence is visualised by the counter illustration referred to above but that is a circumstance which a Court is entitled to consider before raising a presumption. Once the presumption is raised, the manner of rebuttal need not be limited to the instance given in the counter illustration. The only possible evidence that could have been given by the tenant in such a case would be to deny the tender on oath and that is exactly what the tenant has done in the present case. This evidence could not be rejected out of hand merely because it was made by a party to the proceedings or because any better negative evidence could have been given by the tenant"
40 Also a reference to the following paragraphs of judgment given by the Hon'ble Supreme Court in CC Alavi Haji Vs. Palapetty Muhammed & Another, Appeal (Crl.) 767 of 2007 would be relevant at this juncture: -
"14. Section 27 gives rise to a presumption that service of notice has been effected when it is sent to the correct address by registered post. In view of the said presumption, when stating that a notice has been sent by registered post to the address of the drawer, it is unnecessary to further aver in the complaint that in spite CC no. 7354/09 D. K. Associates Vs. Chanderwati & others -:29:- of the return of the notice unserved, it is deemed to have been served or that the addressee is deemed to have knowledge of the notice. Unless and until the contrary is proved by the addressee, service of notice is deemed to have been effected at the time at which the letter would have been delivered in the ordinary course of business. ... ... ...
15. Insofar as the question of disclosure of necessary particulars with regard to the issue of notice in terms of proviso (b) of Section 138 of the Act, in order to enable the Court to draw presumption or inference either under Section 27 of the G.C. Act or Section 114 of the Evidence Act, is concerned, there is no material difference between the two provisions. In our opinion, therefore, when the notice is sent by registered post by correctly addressing the drawer of the cheque, the mandatory requirement of issue of notice in terms of Clause (b) of proviso to Section 138 of the Act stands complied with. ... ... ... It is then for the drawer to rebut the presumption about the service of notice and show that he had no knowledge that the notice was brought to his address or that the address mentioned on the cover was incorrect or that the letter was never tendered or that the report of the postman was incorrect. ... ... ..."
41 Thus, as there has been no rebuttal of this presumption by the accused, it is deemed that the legal demand notice was duly served upon CC no. 7354/09 D. K. Associates Vs. Chanderwati & others -:30:- him.
42 In the light of the legal position as discussed above and after applying to the facts in the present case, in the opinion of this Court, the accused Gyan Chand has successfully rebutted the presumptions of law raised under Section 139 r/w Section 118(1) of the Negotiable Instrument Act, 1881. The complainant has failed to establish the facts constituting the guilt of the accused Gyan Chand beyond reasonable doubt. 43 In view of the ration decidendi in the judgment passed by the Hon'ble Supreme Court in case titled as Krishna Janardhan Bhat Vs. Dattatraya G Hedge, (2008) 4 SCC 54, the prosecution must prove the guilt of an accused beyond reasonable doubt whereas the standard of proof on the part of accused is "preponederance of probabilities". It is apparent that accused has furnished cogent reasons which resulted in shifting the burden of proof on the complainant, which the latter failed to discharge.
44 The burden was on the accused to disprove the presumption U/s 139 NI Act, a burden which he has successfully discharged. Thus the complainant has not been able to prove that the cheque was issued for discharge of legal debt or other liability.
CC no. 7354/09 D. K. Associates Vs. Chanderwati & others -:31:- 45 FINAL ORDER:-
In view of the foregoing observations and in view of the evidence adduced, documents put forthwith and arguments advanced on behalf of both the parties, the accused Gyan Chand is hereby acquitted of the allegations U/s 138 of the Negotiable Instrument Act, 1881. Bail bond and surety bond stands cancelled. Surety discharged. Let the bonds be called from accused U/s 437A Cr.PC. File be consigned to record room.
ANNOUNCED IN THE OPEN COURT ON THIS 10TH DAY OF SEPTEMBER, 2012 (AJAY SINGH SHEKHAWAT) MM(SPL COURT)-04, DWARKA COURTS NEW DELHI CC no. 7354/09 D. K. Associates Vs. Chanderwati & others