Delhi District Court
2. Before Proceeding Further, It Would ... vs . S. on 18 February, 2011
IN THE COURT OF SH. RAKESH KUMAR SINGH:
METROPOLITAN MEGISTRATE (NI ACT)-1, CENTRAL:
ROOM NO.-42, TIS HAZARI COURT COMPLEX, DELHI
18.02.2011
JUDGMENT
a. Serial No. of the case
1427/10
b. Date of the commission of the offence
24.3.2007
c. Name of the complainant
Firoz Khan
d. Name of accused person and his parentage and residence
Mohammad Tayyab, S/o Mohammad Tahair R/o 4853 Pathak Namak, Hauz Qazi, Delhi.
e. Offence complained of or proved
Dishonor of cheque for insufficient funds.
f. Plea of the accused and his examination (if any)
Not guilty. No legal demand notice. Actual amount was paid in cash. Cheque misused. No liability.
g. Final Order
Held not guilty. Acquitted.
h. Date of such order
18.02.2011
i. Brief reasons:
The complaint case at all relevant point of time being tried as summons trial, deserves a judgment to be pronounced under Section-355 Cr.PC.
2. Before proceeding further, it would be appropriate to quote the Hon'ble Supreme Court in Rangappa vs. S. Mohan 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 138 of the Act have been met and if so, whether the accused was able to rebut the statutory presumption contemplated by Section 139 of the Act."1
Complainant's case:
3. The accused have taken a friendly loan of Rs. 1,10,000/- from the complainant in the first week of August, 2006 as required by the accused for his business and to discharge of his liability he issued the cheque beari9ng No. 332936 dated 10.11.2006 for a sum of Rs. 1,10,000/- drawn on Punjab & Sind Bank, Chawri Bazar Delhi in favour of the complainant. The aforesaid cheque was returned unpaid by the banker of the accused cheque returning memo dated 24.03.2007 with the remark "Funds Insufficient". Thereafter the complainant issued the notice dated 1.4.2007 through Regd. A. D. as well as UPC to the accused thereby called upon him to pay the amount of above said dishonoured cheque within the period 15 days from the receipt of this notice. The notice has been duly served upon the accused but the accused neither complied with the notice nor sent any reply. Thereafter complainant filed the present complaint case.
Accused's stand:
4. The accused had not made any transaction in lacs of rupees to the complainant in the said matter and his bank account may kindly be perused in this regard in Punjab & Sind Bank branch, Chawri Bazar, Delhi. The cheque issued by the accused were always of amount of Rs.10,000/- and not in lacs & the cheque were issued against a chit fund and the said cheques were duly passed/encashed by the bank of the accused vide cheque no. 332921 dated 15.4.2005 of Rs.
10,000/-, cheque no. 332922 dt. 16.5.2005 of Rs. 10,000/- cheque no. 332923 dt. 14.6.2005 of Rs. 10,000/- , cheque no. 332931 dt. 16.9.2005 of Rs. 10,000/- and the bounced cheque no. 332936 of Rs. 10,000/- real date is 10.1.2006.
5. The accused has examined two witnesses in his defense. One is the accused himself and the second is cashier from the Punjab & Sind Bank.
Discussion on Legal provisions:
6. It is well settled that there are certain mandatory presumptions of law under the Negotiable Instruments Act. Such presumptions may be summarized in the following manner:
6.1 Section-118 of Negotiable Instruments Act reads as under:
"118. Presumptions as to negotiable instruments.- Until the contrary is proved, the following presumptions shall be made:
(a) of consideration: that every negotiable instrument was made or drawn for consideration, and that every such instrument when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration;"
Presumptions are:
i. Cheque was drawn for consideration;
ii. Cheque was transferred for consideration;
iii. Cheque was accepted for consideration.
2
6.2. Section-139 of Negotiable Instruments Act reads as under:
"139. Presumption in favour of holder.- It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt, or other liability."
Presumptions are:
i. Holder of the cheque has lawfully received the cheque, meaning thereby that the holder was in lawful possession of the cheque;
ii. The cheque was given in discharge of any debt or liability;
iii. Legally enforceable debt or liability was in existence at the time of issuance of the cheque; (contrary view has been overruled by the three judges bench of Hon'ble Supreme Court in Rangappa vs S. Mohan decided on 07.05.2010).
iv. The cheque was of the nature as described in section-138;
v. The cheque was drawn by the person who was maintaining the account pertaining
to the cheque;
vi. Amount of money mentioned in the cheque was intended to be given;
6.3. Section-146 of Negotiable Instruments Act reads as under:
"146. Bank's slip prima facie evidence of certain facts.-
The court shall, in respect of every proceeding under this Chapter, on production of bank's slip or memo having thereon the official mark denoting that the cheque has been dishonoured, presume the fact of dishonour of such cheque, unless and until such fact is disproved."
Presumptions are:
i. The cheque has been dishonoured;
ii. The cheque has been so dishonoured for the reason mentioned in the memo.
7. In the present case, dishonour stands proved by virtue of Section-146 NI Act. Accused has not controverted the position that he was having insufficient funds in his account. Factum of receiving of legal demand notice has already been accepted by the accused.
Discussion on factual position:
8. In his examination under section 313 Cr. P. C, accused has taken a defence that the cheque was only for a sum of Rs.10,000/- and the amount in words written on the cheque was not in his handwriting and that the date was also fabricated.
38.1. Complainant is primarily relying upon the mandatory presumptions of law. He has not led any other evidence or filed any other documents in support of his claim. No doubt, the mandatory presumptions of law may arise in favour of the complainant as discussed above. However, the inference of presumptions are left to the discretion of the Court. In this respect Hon'ble Supreme Court in Hiten P. Dalal v. Bratindranath Banerjee, (2001) 6 SCC 16 has observed that:
"23. In other words, provided the facts required to form the basis of a presumption of law exists, the discretion is left with the Court to draw the statutory conclusion, but this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary. A fact is said to be proved when, after considering the matters before it, the Court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists. Therefore, the rebuttal does not have to be conclusively established but such evidence must be adduced before the Court in support of the defence that the Court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of reasonability being that of the prudent man."
8.2. Accused has tried to rebut the mandatory presumptions in respect of the consideration, liability and the existence of the liability.
8.3. Complainant was cross examined. Complainant stated that at the time of giving the loan his mother was also present. He further stated that no written agreement was entered at the time of extending the loan. Complainant has further stated that the cheque was duly filled in at the time of handing over. Accused in his affidavit admitted the issuance of cheque for Rs.10,000/- and taken a defence that figure "1" on the cheque was inserted by the complainant to make the amount as Rs.1,10,000/- and thereafter amount in words are written. He has also placed his account statement from Punjab & Sindh Bank to support his claim that he has never made any transaction in lacs of rupees and always issued cheque in thousands only.
8.4. Ex. DW2/A is statement of account of accused wherein debit by way of cheques are mentioned. Several cheques debited are Rs.10,000/-. Though some of the cheques are for rupees more than Rs.10,000/- like Rs.15,000/-, Rs.20,000/- etc and some of the cheques are for Rs.2,000/-, Rs.4,000/- etc. This document has not been controverted by the complainant.
8.5. Accused was cross examined by the complainant. In the cross examination a suggestion was made to the accused that the cheques No.332921, 332922, 332923 & 332931 (all for Rs. 10,000/-) were in the name of the complainant. This suggestion itself shows the probability that normal transactions between the complainant and accused was in or around Rs. 10,000/-.
8.6. In the circumstances, I am of the opinion that stand of the accused in respect of the position that he has never indulged in a transaction in lacs of rupees can not simply be brushed aside.
49. Complainant has relied upon a judgment of Delhi High Court in Ravi Chopra Vs State 2008 (2) CCC Delhi 341 to contend that once signature is admitted, it would become the liability of the accused to establish the contrary if he want to prove any alteration in the cheques. Complainant further relied upon a judgment of Kerala High Court in Lilly Kutty Vs Lawrence 2003 (2) DCR 610 to contend that by putting the amount and name on the cheque there cannot be any material alteration under section 87 NI Act.
9.1. No doubt that the cited judgments say that putting the amount and name on the cheque cannot be treated as material alteration under section 87 NI Act. However, the judgments cited by the complainant are distinguishable on the facts of the present case. What the accused is alleging is not that amount was put on the cheque, but a figure '1' was inserted before the figure '10,000/-'. Such insertion, in my considered view can be treated as material alteration. In normal practice, figures in amount are written as 10,000/- & 1,00,000/-. In the instant cheque, figure is mentioned as 110,000/-. (We may probably believe that the person who wrote the figure on the cheque was apparently aware of this practice). If figure '110,000/-' was to be written, it ought to have been (not definitely but probably as per the standard of a reasonable man) like '1,10,000/-'. The same is not the case here.
9.2. This discussion may create a reasonable doubt in respect of the amount mentioned in figure. Probability of material alteration cannot be ruled out in the facts and circumstances appearing in the present case. It will not be out of place to mention that once the case falls under the ambit of material alteration, section 18 NI Act (by virtue of which amount stated in words is directed to be treated as amount undertaken) cannot help.
9.3. Complainant further contended that the bank has not raised any objection in respect of tempering, forgery or material alteration in the cheques and, therefore, the same should not be relied upon by this court.
9.4. This contention of the complainant has no bearing on the case in hand. The cheque was dishonoured for insufficient fund. There was no occasion for the bank to minutely examine the aspect of forgery or alteration. Even this case is not in respect of forgery or cheating.
9.5. Complainant has further contended that no independent evidence was adduced by the accused to discharge the burden of proving his defence.
9.6. This can also not be accepted. A three Judges bench of Hon'ble Supreme Court in Rangappa Vs. S. Mohan decided on 07.05.2010 has held that:
"However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused/defendant cannot be expected to discharge an unduly high standard or proof. In the absence of compelling justifications, reverse 5 onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of 'preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own."
10. In the light of the above discussion, I am of the opinion that accused has created a reasonable doubt in respect of material alteration and the existence of liability. The complainant has not tried to establish the factum of loan by any other means despite the fact that his mother was also present when the loan amount was given to the complainant (as per his own statement in cross examination) and has chosen to rely only upon the mandatory presumptions of law. The prosecution has to fail.
11. I accordingly return a finding of not guilty against the accused person.
12. Accused is hereby acquitted from the charges in the present complaint case.
13. A copy of this order be placed on the official website of the District Court.
(Rakesh Kumar Singh) MM(NI Act)-01, Central/18.02.2011 6