Delhi District Court
Satin Credit Care vs . Lal Chand Verma Cc. No. 613/12 on 8 October, 2013
Satin Credit Care vs. Lal Chand Verma CC. No. 613/12
IN THE COURT OF MS. SWATI KATIYAR, METROPOLITAN
MAGISTRATE-05 (NI ACT), DWARKA COURTS, DELHI
CC No. 613/12
ID No. 02405R0047722012
Satin Credit Care Network Ltd.
Having its registered office at
306, Lusa Tower,
Azadpur Commercial Complex
Delhi-110033
Through its Authorized Representative
Sh. Shyam Sunder, Officer (Legal).
...........Complainant
Vs.
Mr. Lal Chand Verma
S/o Sh. Vijay Kumar Verma,
458B/1C Ward No. 3,
Mehrauli, Delhi-110030
ALSO AT
Mr. Lal Chand Verma
c/o M/s. Sonu Ladies Suits
513-A/5, Readymade Market,
Mehrauli, Delhi-110030.
..................Accused
Date of Institution : 20.03.2012
Offence Complained of : u/s 138 Negotiable Instruments Act, 1881
Plea of Accused : Not Guilty
Date of Reserving order : 25.09.2013
Date of Decision : 08.10.2013
Decision : Acquitted
JUDGMENT
1. Complainant, a non-banking financial institution registered with Reserve Bank of India has filed the present complaint through its Authorized Representative Sh. Shyam Sunder alleging that accused had approached the complainant Page 1 of 16 Satin Credit Care vs. Lal Chand Verma CC. No. 613/12 and availed a personal loan under Personal Loan agreement bearing no. I-4426 dated 29.12.2008 for a sum of Rs. 50,000/-.
2. Complainant states that the repayment schedule under the agreement was on the basis of daily installments of Rs. 170/- for 360 days. Complainant states that after making initial payment towards the daily installments, accused started violating the terms and conditions of the said agreement and stopped making the payments, in contravention to the terms and conditions of the above agreement.
3. Complainant further states that accused avoided clearance of legally recoverable dues despite repeated reminders and requests of the complainant. It is stated that while scrutinizing the account details, it was seen that a sum of Rs. 73,255/- was outstanding against the accused. Accordingly, a notice dated 22.07.2011 was issued against the accused for payment of the outstanding amount.
4. It is further stated that after receiving the aforesaid notice, accused approached the complainant and settled the matter for a sum of Rs. 73,255/- and accordingly issued a cheque bearing no. 055999 dated 04.02.3012 drawn on Punjab National Bank, Sarvodaya Enclave, New Delhi-110017 for a sum of Rs. 73,255/- (hereinafter referred to as "cheque in question") in favour of the complainant towards discharge of legally recoverable debt. It is stated that the accused had always assured the complainant that the cheque in question Page 2 of 16 Satin Credit Care vs. Lal Chand Verma CC. No. 613/12 would be honored on presentation.
5. Complainant submits that when the cheque was presented for clearance, the same was returned unpaid vide cheque return memo dated 06.02.2012 due to the reasons "Funds Insufficient". It is stated that a legal notice dated 14.02.2012 was also sent on 15.02.2012 and 16.02.2012 to the accused but despite the service of the notice, accused has failed to make the payment of the outstanding amount.
6. Complainant states that conduct of the accused indicates his fraudulent intention to cheat the complainant and to cause wrongful loss to the complainant. Feeling aggrieved from the conduct of the accused, complainant has filed the present complaint praying that accused be summoned, tried and punished in accordance with Section 138 of Negotiable Instruments Act.
7. Pre-summoning evidence was led by the complainant on 20.03.2012. Prima facie case was made out against the accused and accused was summoned vide order of the same date.
8. Accused entered appearance on 08.08.2012 and efforts were made for settlement of the dispute through mediation. However, no settlement could be reached at and hence, trial was proceeded further. Notice was framed upon the accused on 05.02.2013 to which the accused pleaded not guilty and Page 3 of 16 Satin Credit Care vs. Lal Chand Verma CC. No. 613/12 claimed trial.
9. On an application filed under Section 145 (2) Negotiable Instruments Act, which was allowed vide order dated 26.02.2013, accused was granted permission to cross- examine the complainant.
10. In post summoning complainant's evidence, AR of the complainant examined himself as CW1 and adopted his affidavit Ex. CW1/1 tendered at the stage of pre-summoning evidence and relied upon the documents Ex. CW1/A to Ex. CW1/L (colly.). Ex. CW1/A and Ex. CW1/C are the board resolutions, Ex. CW1/B and Ex. CW1/D are the copies of power of attorney, Ex. CW1/E (colly.) is the copy of certificate of incorporation, Ex. CW1/F is the copy of certificate of registration, Ex. CW1/G is the copy of loan agreement, Ex. CW1/H (colly.) is the copy of outstanding notice alongwith copy of postal receipts, Ex. CW1/I is the copy of statement of account, Ex. CW1/J is the original cheque in question, Ex. CW1/K is the return memo, Ex. CW1/L (colly.) is the legal demand notice alongwith postal and courier receipt and returned AD cards. CW1 was cross-examined at length by Ld. Counsel for accused.
11. Statement of accused under Section 313 Cr.P.C was recorded on 29.05.2013.
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12. In Defence evidence, accused examined himself on Oath under Section 315 Cr.P.C as DW1 and Sh. Deepak Joshi and Sh. Radhey as DW2 and DW3 respectively.
13. In his evidence DW1 deposed that he had taken a loan of Rs. 50,000/- from the complainant and the installment for repayment of the loan was fixed as Rs. 170 x 360 days. DW1 deposed that at the time of taking loan, complainant took one blank security cheque duly signed by him without filling the contents of the same. DW1 states that one Bhushan Tyagi, field boy of the complainant used to collect the daily installment amounting Rs. 170/- each from him and Bhushan Tyagi used to note the payment of installment in his diary. DW1 deposed that as and when they demanded the receipt for payment made by him, Bhushan Tyagi said that the amount will be deposited in his account as before as he had taken loan from the same company so many times earlier and had faith in the company and hence he did not press for receipt of the payment made by him qua the installment.
14. DW1 deposed that earlier when he made final payment of the loan amount, complainant issued him NOC which is already Ex. CW1/X1 along with the cheque taken by them as security which is already Ex. CW1/X2. DW1 deposed that the cheque Ex. CW1/X2 bears his signatures and he had made entire payment of installment to Mr. Bhushan Tyagi. DW1 deposed that after sometime Bhushan Tyagi was met with an accident and he stopped coming in the market for about 1 ½ Page 5 of 16 Satin Credit Care vs. Lal Chand Verma CC. No. 613/12 years. DW1 deposed that he made so many calls to Bhushan Tyagi to issue NOC in his favour against the aforesaid loan but he always said that NOC shall be issued to him after some time and he should have no fear of that. DW1 further deposed that after accident, Bhushan Tyagi came once in the market and DW1 demanded NOC from him but he told that he will bring it in near future and he should have no worry about that.
15. DW1 deposed that the cheque in question Ex. CW1/J was taken by the complainant from him at the time of raising the loan as security. DW1 admitted his signatures on the cheque but stated that the columns of the cheques are not filled by him and no notice has ever been served upon him regarding the bouncing of the cheque in question. DW1 deposed that he had not received the legal notice Ex. CW1/L and the AD cards Ex. CW1/L (colly.) do not bear his signatures. DW1 deposed that the complainant got signed from him on blank forms which were not filled in his presence and he has no knowledge of the contents of the same and the columns were filled by the complainant on their own. DW1 deposed that he is not liable to pay the amount demanded by the complainant in the alleged notice or in the present complaint and that the case of the complainant is wrong and liable to be dismissed.
16. DW2 Sh. Deepak Joshi deposed that earlier he was doing cloth business which was closed about 2 years back and that he also took a loan of Rs. 30,000/- from the complainant Page 6 of 16 Satin Credit Care vs. Lal Chand Verma CC. No. 613/12 company about 3 years back. DW2 deposed that his shop was at Readymade market, Mehrauli and the mode of repayment of loan was daily installments. DW2 deposed that at the time of granting of loan, the complainant has got signed some blank documents bearing his signatures only. DW2 deposed that the complainant also took a blank cheque duly signed by him as security of the loan amount. DW2 deposed that he has repaid all the loan amount to the complainant. DW2 deposed that one Bhushan Tyagi, collection agent of the complainant used to come to his shop to collect the daily installment, however, no receipt had been issued by the said Bhushan Tyagi. DW2 deposed that he only used to note the amount of installment in his diary which he always kept with him.
17. DW2 deposed that after repaying the loan amount, he demanded the cheque under security as well as NOC from the said Bhushan Tyagi. DW1 deposed that he made complaint to Bhushan Tyagi that complainant had served a notice to him demanding the amount but he replied that DW2 should not care for the notice and that he will provide him NOC along with his security cheque from the complainant. DW2 further deposed that after a day or so, Bhushan Tyagi met with an accident and did not come in the market for collection for about 1½ years. DW2 states that after that he again demanded the NOC as well as his security cheques from Bhushan Tyagi but he assured him to provide the same after some day but he had not turned up till date.
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18. DW2 deposed that accused has also taken loan from the complainant and made full payment against the loan raised by him but no receipt as well as security cheque and NOC had been issued in favour of the accused. DW2 further deposed that Bhushan Tyagi used to collect daily installment from the accused in his presence. DW2 stated that his shop and shop of the accused are adjacent to each other. DW2 further deposed that accused also issued a blank cheque duly signed by him to the complainant as security cheque and also signed some papers with blank columns at the time of giving loan in his presence.
19. DW3 Sh. Radhey deposed that he is running a tailor shop under name and style of Radhey Tailor at 391, Ward no. 4, Readymade market, Mehrauli and the shop of the accused is situated about 20 shops prior to his shop. DW3 deposed that he took three loans from the complainant in the year 2005, 2006 and 2007 for an amount of Rs. 20,000/-, Rs. 50,000/- and Rs.50,000/- respectively and at the time of grant of loan, complainant also took signatures over a file containing documents with blank columns of his as well as his wife. DW3 deposed that he do not know the contents of the said documents and when he asked about the contents of the same, they said that he should not worry for the same and the loan will be given to him by the complainant and also took blank cheque duly signed by him without filling the columns of the same as security cheque in respect of each loan.
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20. DW3 deposed that he repaid all the loan amount to the complainant and the mode of repayment of loan was weekly. DW3 deposed that one employee of complainant namely Bhushan Tyagi used to collect the installment from him. DW3 deposed that when he paid all the installments against the aforesaid loan taken in the year 2006, a security cheque Ex. DW3/A mentioning the loan account number at point A on the back side of the cheque was handed over to him and also issued NOC Ex. DW3/B in his favour. DW3 deposed that the security cheque against the loan amounting Rs. 50,000/- along with NOC has not been given to him by the complainant which he has repaid to the complainant in installments because Bhushan Tyagi promised him to provide his cheque in security as well as NOC. DW3 further deposed that after that Bhushan Tyagi did not turn up. DW3 deposed that Bhushan Tyagi also said that he is share holder in the complainant and will return the aforesaid cheque and NOC to him very soon.
21. DW3 deposed that accused also took loan from the complainant and made full payment against the loan raised by him but no receipt as well as security cheque and NOC had been issued in favour of the accused. DW3 deposed that Bhushan Tyagi used to collect daily installment from the accused in his presence. DW3 further deposed that accused also issued a blank cheque duly signed by him to the complainant as security cheque and also got signed some papers with blank columns from the accused at the time of Page 9 of 16 Satin Credit Care vs. Lal Chand Verma CC. No. 613/12 giving loan in his presence as Bhushan Tyagi was known very well to the shopkeepers of the market and used to collect the installment from all the shopkeepers who took loan from the complainant and all the shopkeepers had blind faith upon him so did not press him to issue receipt against the payment of installments from time to time. DWs were duly cross-examined by Ld. counsel for complainant.
22. Final arguments were advanced at length by Sh.
Bhaskar Pandey, Ld. Counsel for complainant. Accused however, failed to advance arguments despite grant of sufficient opportunity.
23. I have considered the submissions as advanced and perused the record carefully.
24. Section 138, Negotiable Instruments Act has been enacted to lend credibility to the financial transactions. The main ingredients of the offence under Section 138 Negotiable Instruments Act are:
(I) Drawing up of a cheque by the accused towards payment of an amount of money for the discharge in whole or in part of any debt or any other liability (II) Return of the cheque by the bank as unpaid. (III)The drawer of the cheque fails to make the payment of the said amount of money within 15 days of the receipt of notice under proviso (b) to Section 138.
25. Apart from this, Section 139 Negotiable Instruments Act lays down a presumption in favour of the holder of cheque in Page 10 of 16 Satin Credit Care vs. Lal Chand Verma CC. No. 613/12 following terms, "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".
26. Thus, in cheque dishonor 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.
27. In the present case, the facts admitted between the parties are that accused had taken a loan from the complainant and that the cheque in question bears the signature of the accused. The defence raised by the accused to counter the case of the complainant is that he had issued the cheque in question as blank security cheque at the time of grant of loan. As per accused, he had taken another loan prior to the loan in question from the complainant and had given a similar blank signed security cheque to the complainant which was returned alongwith NOC on completion of loan amount. The said NOC and security cheque has been brought on record as Ex. CW1/X1 and Ex. CW1/X2 respectively. Accused had also examined DW3 who had similarly availed a loan from the complainant and had issued security cheque Ex. DW3/A which was returned alongwith NOC to him after repayment of his loan amount.
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28. Now, so far as NOC Ex. CW1/X1 is concerned, AR of the complainant admits in his cross-examination that the same has been issued by the complainant. With respect to Ex. CW1/X2, CW1 states in his cross-examination, " ....I cannot admit or deny that cheque Ex. CW1/X2 was retained by the complainant as security cheque and returned alongwith NOC Ex. CW1/X1...... It is correct that stamp of complainant on cheque Ex. CW1/X2 and Ex. CW1/J is same.....". Thus, there is no categorical denial qua the cheque Ex. CW1/X2 by CW1 rather, he admits that stamp of complainant on cheque Ex. CW1/X2 and cheque in question i.e. Ex. CW1/J is same. Such deposition of AR of the complainant strengthens the defence of the accused that complainant does take blank security cheques from applicants at the time of grant of loan which is returned once the loan is completed.
29. While cross-examination of DW1, Ld. Counsel for accused has feebly suggested that accused had stamped Ex. CW1/X2 with the stamp of complainant after stealing the same from the complainant company. This averment has been raised for the first time by the complainant during cross-examination of accused but without any evidence on record to fortify the same. In any case, cheque Ex. CW1/X2 bears number of loan agreement on its backside which is same as that mentioned on NOC and if we peruse cheques Ex. CW1/J and Ex. DW3/A, it can be seen that these cheques also bear number of loan agreement on their back side as Ex. CW1/X2. Such state of Page 12 of 16 Satin Credit Care vs. Lal Chand Verma CC. No. 613/12 affairs only raises the inference that blank signed cheque Ex. CW1/X2 was indeed returned alongwith NOC Ex. CW1/X1.
30. Now so far as Ex. DW3/A is concerned, complainant has chosen not to rebut the same. There is no cross-examination of DW3 on the aspect that he had also taken loan from the complainant and his security cheque Ex. DW3/A was returned to him alongwith NOC Ex. DW3/B on repayment of loan amount. Thus, when the complainant is not disputing the testimony of DW3 with respect to Ex. DW3/A, the same can be taken to be admitted by the complainant (vide 28 (1985) DLT
360).
31. Hence, from the evidence brought on record by the accused, a probable defence has been raised by him about the cheque in question being a security cheque. Now, it was for the complainant to establish that the cheque in question was issued towards discharge of liability by the accused pursuant to settlement arrived at between them.
32. Now, as per the complainant the cheque in question was issued by the accused towards outstanding dues pursuant to receipt of outstanding notice Ex. CW1/H. Perusal of the record shows that complainant has placed on record copy of notice Ex. CW1/H with copy of postal receipts to show service of notice upon the accused. Though service of notice can be presumed upon the accused under Section 27 of General Clauses Act but it cannot be presumed that pursuant to receipt Page 13 of 16 Satin Credit Care vs. Lal Chand Verma CC. No. 613/12 of notice accused approached the complainant and issued the cheque in its favour. Accused had been vehemently alleging that he had never visited the office of the complainant. Under such circumstances, the burden was upon the complainant to establish that the cheque was issued by the accused as alleged by it. However, the complainant has not brought on record any document such as Visitors Entry Register or any other document to show that accused actually approached it and issued the cheque in question on 04.02.2012. Moreover, even CW1 has not been able to categorically establish that cheque in question was issued by accused. CW1 in his cross- examination states, "I cannot admit or deny the suggestion that the contents of the cheque in question have been filled by some official of the complainant....". Thus, in absence of evidence, it cannot be said that accused had issued the cheque in question to the complainant on or before 04.02.2012 as alleged.
33. Now, so far as the settlement with the accused is concerned, there is no evidence whatsoever on record that accused had entered into any settlement with the complainant and issued the cheque in question for Rs. 73,255/- in favour of the complainant. Even otherwise as per CW1, accused has repaid a sum of Rs. 27,900/- out of a loan of Rs. 61,200/- and only a sum of Rs. 33,300/- was outstanding against the accused. Thus, it is hard to believe that accused would consent to pay a further sum of Rs. 73,255/- to the complainant towards Page 14 of 16 Satin Credit Care vs. Lal Chand Verma CC. No. 613/12 outstanding amount and that too after lapse of more than 1.5 years after the foreclosure of loan.
34. So far as the liability of Rs. 73,255/- is concerned, complainant has placed on record statement of account Ex. CW1/I to establish liability of accused for Rs. 73,255/-. However, the statement is computer generated and has not been certified in accordance with Section 65B of Evidence Act and thus, not admissible. Even otherwise the main body of the statement shows only an outstanding amount of Rs. 33,300/- and thus, it fails to prove liability of accused to the tune of Rs. 73,255/- on the date of issuance of cheque in question. Thus, neither from the complainant's evidence nor from the deposition of the accused, a liability of Rs. 73,255/- is made out against the accused as on 04.02.2012.
35. Further, as per complainant, accused has made last payment till 09.11.2009 but the outstanding notice was given to him on 22.07.2011. No explanation has been furnished by the complainant as to why the notice was not issued earlier by it immediately after the defaults made by the accused as per clause 10(a) of the loan agreement. It is inexplicable as to why the complainant waited for more than 1.5 years to issue notice against the accused lest the same was to enhance the penalty amount and extort an exorbitant sum from the accused. Complainant states that regular reminders were given to the accused. However, there is no proof of reminders on record till 22.07.2011. The mode through which reminders were given or Page 15 of 16 Satin Credit Care vs. Lal Chand Verma CC. No. 613/12 the collection agent who was giving the reminders have not been stated by the complainant and thus the version of the complainant qua the repeated reminders given to the accused is dubitable.
36. Thus, from the entire evidence on record, complainant has failed to establish that the cheque in question was issued by the accused towards discharge of liability. Accused on the other hand has proved that the cheque in question was given as a security cheque to the complainant and it is a settled law that a security cheque does not attract the penal provisions of Section 138 of Negotiable Instruments Act (vide M. S. Narayanan Menon v. State of Kerala and ors, 2006 SCC 39; Ravi Kumar D. v. State of Delhi decided by Hon'ble High Court of Delhi on 01.03.2011) and thus, it cannot be said that the offence under Section 138 Negotiable Instruments Act has been made out against the accused.
37. Accordingly, it is held that the offence under Section 138 Negotiable Instruments Act, 1881 is not made out against the accused. Accused stands acquitted of the offence under Section 138 Negotiable Instruments Act. File be consigned to Record Room.
Announced in Open Court 08.10.2013 (SWATI KATIYAR) METROPOLITAN MAGISTRATE-05 NEGOTIABLE INSTRUMENTS ACT DWARKA COURTS, NEW DELHI 08.10.2013 Page 16 of 16