Delhi District Court
:: vs . :: on 27 March, 2018
IN THE COURT OF SHRI SUMEET ANAND
METROPOLITAN MAGISTRATE (N.I. ACT)
PATIALA HOUSE COURTS : NEW DELHI
M/s Win-Medicare Pvt. Ltd.
1400, Modi Tower,
98, Nehru Place,
New Delhi - 110019 .............. Complainant
:: Vs. ::
Pranav Trehun (Proprietor)
M/s Fair Care
WZ 219-C, Madipur,
Punjabi Bagh,
New Delhi - 110063 ...................Accused
Old Case Number. : 3118/1
New Case Number. : 27148/16
Date of Institution of Case. : 16.02.2009
Offence Complained Of. : 138 NI Act
Plea of the Accused. : Not guilty
Arguments Heard On. : 24.03.2018
Final Order. : Acquitted
Date of Judgment. : 27.03.2018
CC No.27148/2016 Page 1 of 27
:: JUDGMENT :: -
1. This judgment shall decide and dispose off Criminal Complaint Case No.27148/16 (Old CC No.3118/1); titled as Win Medicare vs. Pranav Trehun; instituted under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter NI Act) for the dishonor of one cheque for a sum of Rs.8,33,533/- (Rupees Eight Lakh Thirty Three Thousand Five Hundred Thirty Three Only).
2. Complainant is a pharmaceutical company, engaged inter alia in the business of marketing, selling and distribution of cosmetics and personal care goods. This case on behalf of the complainant has been instituted and prosecuted by one Rajiv Behl on the strength of Power of Attorney dated 23.08.2003 (EX CW 1/1)
3. Accused Pranav Trehun is the sole proprietor of M/s Fair Care.
During trial, the accused was permanently exempted by the order of court and he was represented by his father Kapil Kumar Trehun on the strength of Power of Attorney dated 14.09.2011.
4. It is undisputed that the parties were in business relations and CC No.27148/2016 Page 2 of 27 the accused was appointed distributor of the complainant. The letter dated 23.07.2008 appointing M/s Fair Care, of which accused is the proprietor, as an authorized distributor for North Delhi along with Distributor's Evaluation Form dated 14.07.2008 submitted for being appointed as the distributor for the complainant is on record. Both these documents are admitted documents.
5. It is the case of the complainant that during the course of business it supplied cosmetic and personal care goods to the accused for sale & distribution, in pursuance of which it raised invoice No.I-1118-0220 dated 31.08.2008 for a sum of Rs.8,33,533/- upon the accused. (Invoice is EX CW 1/5)
6. It is alleged that towards the payment of outstanding dues of Rs.8,33,533/-, the accused issued the cheque in question (EX CW 1/6) to the complainant, which upon its presentation was dishonored and returned unpaid with the remarks "payment stopped by the drawer" vide returning memo dated 12.12.2018 (EX CW 1/8)
7. As the payment of the dishonored cheque was not forthcoming, the complainant set the legal course in motion and issued statutory legal demand notice dated 29.12.2008 CC No.27148/2016 Page 3 of 27 (EX CW 1/9) to the accused, calling upon him to make the payment of the dishonored cheque within 15 days of receipt of the notice.
8. It is categorically stated by the complainant in Para 8 of his complaint that the accused replied to the statutory legal demand notice. However, it is pertinent to highlight that the complainant did not place the said reply notice, sent by the accused, on record along with his complaint.
9. It is the grievance of the complainant that despite compliance of all statutory requirements, the accused has failed to make the payment of the dishonored cheque in question. Hence, this complaint.
10. The Authorized Representative of the complainant Rajiv Behl (hereinafter AR) led evidence by way of affidavit. Based on his evidence affidavit, cognizance of offence under Section 138 NI Act was taken and pre-summoning evidence was led and the accused was summoned. In the post-summoning evidence, no additional affidavit of AR of the complainant was filed and based on his evidence affidavit already on record, he was cross-examined by the counsel for accused.
11. In addition, two more witnesses, both bank witnesses namely CC No.27148/2016 Page 4 of 27 Shiv Saraswat (banker of complainant) and Vimlesh Kushwaha (banker of accused) were also examined as CW-2 and CW3, respectively, by the complainant in support of his case.
12. After the complainants evidence, the statement of accused under Section 313 Cr.P.C. was recorded, wherein all incriminating facts led against him in evidence were put to him and he was given an opportunity to give his explanation. Subsequently, defence evidence was led. Father of the accused, who is also the Power of Attorney holder of accused, namely Kapil Kumar Trehun entered the witness-box as a defence witness and was examined-in-chief and cross- examined by the counsel for complainant.
13. This court has perused the entire record and has carefully appreciated the evidence led by the parties and has also taken into consideration the judgments filed by the parties in support of their respective case.
14. In the case at hand, the reason for the dishonor of cheque is "payment stopped by drawer", and not for "insufficiency of funds"; or "exceeding arrangements". It is well settled proposition of law that even in cases of dishonor of cheque for the reason "payment stopped by drawer", Section 138 NI Act CC No.27148/2016 Page 5 of 27 is attracted and presumption of law in favor of the complainant by virtue of Section 139 NI Act stands raised, however it may be rebutted by the accused during the trial. Reliance is placed upon judgment of Hon'bel Apex Court titled as M/s Modi Cements Ltd vs Shri Kuchil Kumar Nandi (1998) 3 SCC
249.
15. On the aspect of dishonor of cheque for the reason "payment stopped by the drawer", the Hon'ble High Court of Delhi in the judgment of Icon Buildcon Pvt. Ltd. vs. Aggarwal Developers Pvt. Ltd. CRL.LP. Nos. 257-262 of 2013, decided on 23.04.2014 held;
"16. In terms of the law explained in the above decision, it is clear that even in a case of dishonour of cheque on account of stop payment instructions, the presumption under Section 139 of NI Act is attracted. However, it is rebuttable. The drawer of the cheque can seek to rebut the presumptions by showing on a preponderance of probabilities i.e., that the stop payment instructions issued were bona fide."
16. Furthermore, on the aspect of dishonor of cheque on the account of payment stopped by the drawer, the Hon'ble Apex Court in the judgment of Laxmi Dyechem vs. State of Gujarat (2012) 13 SCC 375; in a concurring judgment delivered by HMJ Gyan Sudha Mishra J. held, CC No.27148/2016 Page 6 of 27 "7. As already noted, the Legislature intends to punish only those who are well aware that they have no amount in the bank and yet issue a cheque in discharge of debt or liability which amounts to cheating and not to punish those who bona fide issues the cheque and in return gets cheated giving rise to disputes emerging from breach of agreement and hence contractual violation. To illustrate this, there may be a situation where the cheque is issued in favour of a supplier who delivers the goods which is found defective by the consignee before the cheque is encashed or a post-dated cheque towards full and final payment to a builder after which the apartment owner might notice breach of agreement for several reasons. It is not uncommon that in that event the payment might be stopped bona fide by the drawer of the cheque which becomes the contentious issue relating to breach of contract and hence the question whether that would constitute an offence under the NI Act. There may be yet another example where a cheque is issued in favour of a hospital which undertakes to treat the patient by operating the patient or any other method of treatment and the doctor fails to turn up and operate and in the process the patient expires even before the treatment is administered. Thereafter, if the payment is stopped by the drawer of the cheque, the obvious question would arise as to whether that would amount to an offence under Section 138 of the NI Act by stopping the payment ignoring Section 139 which makes it mandatory by incorporating that the offence under Section 138 of the NI Act is rebuttable. Similarly, there may be innumerable situations where the drawer of the cheque for bonafide reasons might issue instruction of 'stop payment' to the bank in spite of sufficiency of funds in his account.
8. What is wished to be emphasized is that matters arising out of 'stop payment' instruction to the bank although would constitute an offence under Section 138 of the NI Act since this is no longer res- integra, CC No.27148/2016 Page 7 of 27 the same is an offence subject to the provision of Section 139 of the Act and hence, where the accused fails to discharge his burden of rebuttal by proving that the cheque could be held to be a cheque only for discharge of a lawful debt, the offence would be made out. Therefore, the cases arising out of stop payment situation where the drawer of cheques has sufficient funds in his account and yet stops payment for bona fide reasons, the same cannot be put on par with other variety of cases where the cheque has bounced on account of insufficiency of funds or where it exceeds the amount arranged to be paid from that account, since Section 138 cannot be applied in isolation ignoring Section 139 which envisages a right of rebuttal before an offence could be made out under Section 138 of the Act as the Legislature already incorporates the expression "unless the contrary is proved" which means that the presumption of law shall stand and unless it is rebutted or disproved, the holder of a cheque shall be presumed to have received the cheque of the nature referred to in Section 138 of the NI Act, for the discharge of a debt or other liability. Hence, unless the contrary is proved, the presumption shall be made that the holder of a negotiable instrument is holder in due course."
17. Hence, based on the above-referred judgments, it can be inferred that in cases where the cheque is returned unpaid for the reasons "payment stopped by the drawer", the accused in order to establish his innocence and to rebut the mandatory presumption of law raised against him by virtue of Section 139 NI Act has to show on the threshold of pre-ponderance of probability that, i) there were sufficient funds in his account to clear the amount of the cheque at the time of their CC No.27148/2016 Page 8 of 27 presentation and; ii) that the stop-payment instruction had been issued for a valid and bonafide cause including that there was no existing debt or liability at the time of presentation of the cheque for encashment.
18. In order to establish his innocence and to rebut the mandatory presumption of law raised in favor of the complainant and against him by virtue of Section 139 NI Act, the accused has conducted detailed cross-examination of AR of the complainant i.e. CW-1 and has also led evidence in support of his defence. Now the issue to be determined is whether at the relevant point of time, when stop-payment instructions qua the dishonored cheque were issued, was there sufficient balance in the account of the accused to honor the cheque; and whether the stop-payment instructions were given by the accused to its banker qua the cheque in question owing to a valid/bona fide reason.
19. For the determination of the above highlighted issue that whether there was sufficient liquidity/balance in the account of the accused to honor the cheque at the time when stop- payment instruction was given, the testimony of CW-3 Vimelsh Kushwaha, Assistant Manager, Central Bank of India, Madipur CC No.27148/2016 Page 9 of 27 Branch, Delhi i.e. the banker of the accused; but summoned by the complainant is highly relevant.
20. CW-3 during his evidence placed on record, a statement of account pertaining to account No.3023889900 in the name of Fair Care, the proprietorship concern, of which accused Pranav Trehun is the sole proprietor; it is exhibited as EX CW 3/A (colly) (running into 04 pages). CW-3 was cross-examined by father of the accused, who is also the Power of Attorney Holder of the accused representing him during the trial. In his cross-examination, CW-3 categorically stated that, "XXXX At the date of dishonor of the cheque in question for the reason "payment stopped", as per the statement of account, there was an amount of Rs.20,06,266.85/- in the account of the accused. It is correct that if the stop-payment instructions would not have been made, then the cheque would have been honored. It is correct to suggest that the cheques have been presented twice and on both the occasions the cheques have been dishonored. As per the statement of accused, the cheques were presented for the first time on 04.11.2008. It is correct that as per the statement of account, filed by me today, cheque No.102008 and 102011 have not been presented in the bank. A cheque even after being dishonored can be presented any number of times during the period of its validity, which is three months from the date on which it is drawn. As per the statement of account filed by me today, the date i.e. 04.11.2008 when the first time the dishonored cheque in question were presented, at that time CC No.27148/2016 Page 10 of 27 the balance available in the account of the accused was Rs.15,82,273.36/-. At that time the accused was enjoying an over-draft facility of Rs.16,726.64/- and a debit balance in the account of the accused at that time was Rs.69,726.64/-. Hence, Rs.16,52,000/- minus Rs.16,726.64/- shows the liquidity balance of the accued at the time when cheques were first presented i.e. Rs.15,82,273,36/-.
21. It deserves due emphasis that CW-3 is a witness summoned by the complainant and he has established beyond doubt that at the relevant time when the dishonored cheque was presented and returned unpaid owing to reason "payment stopped by drawer", there was sufficient liquidity/balance in the account of accused to honor the cheque and but for the instructions of stop-payment the cheque upon its presentation would have been duly honored.
22. Furthermore, the complainant has not cross-examined CW-3, as such his testimony with respect to sufficient balance in the account of accused to honor the cheque has gone unrebutted and uncontroverted. Moreover, the certificate under Section 65-B filed by CW-3 and his authorization to appear and depose in the court has also gone unrebutted and uncontroverted. Accordingly, based on unimpeachable testimony of CW-1, it is established beyond doubt that the dishonored cheque would CC No.27148/2016 Page 11 of 27 have been duly honored, but for stop-payment instructions given by the accused, as it that time there was more balance amount in account of the accused than the amount of cheque.
23. Now, for determination of the issue, whether the stop- payment instruction was given by the accused for any valid/bona fide cause, it shall be relevant to appreciate the plea of defence raised by the accused first. It is as follows:
"I had intimated the complainant regarding stoppage of payment against the cheque in question in advance. The cheque was a post-dated blank cheque issued in advance in good faith for supply of goods. However, the goods, which were supplied were not ordered by us. They were sub- standard, outdated and expired goods having reduced shelf-life and not marketable goods. Promises were made to make up the deficiencies but the complainant did not do so. I have no legal liability to pay the cheque amount."
24. In addition to his plea of defence, the defence of the accused can also be appreciated from the contents/averments made by the accused in his application moved under Section 145(2) NI Act and also from answers given by the accused to the questions put while recording of his statement under Section 313 Cr.P.C. It can also be appreciated from the examination- in-chief of DW-1. Considering the same, it is manifest that the accused has maintained a consistent defence throughout the CC No.27148/2016 Page 12 of 27 trial. At every stage of trial, the accused has laid down the foundation of his defence on the supply of wrong, sub- standard goods, etc. by the complainant. In furtherance of his defence raised and for its proof, the accused during the trial has placed on record volumes of emails and letters exhibited as EX CW 1/D-3 to EX CW 1/D-53 written by him to the complainant regarding the dispute pertaining to supply of goods, etc.
25. Furthermore, DW-1 in his examination-in-chief has minutely detailed every aspect of dispute between the parties. He has cited various emails and letters in his examination-in-chief through which he called upon the complainant to address the dispute being repeatedly agitated by the accused. The copies/print-outs of the emails and letters purportedly written by the accused to the complainant have been placed on record. With respect to the emails allegedly written by the accused to the complainant, he has also filed a Certificate under Section 65-B. The same is also on record.
26. Herein it is expedient to determine, whether the emails and the letters purportedly written by the accused to the complainant stand proved during the trial, or not? This court CC No.27148/2016 Page 13 of 27 has carefully appreciated this aspect and is of the considered opinion that the emails and the letters written by the accused to the complainant stand duly proved. The reasons for holding that the emails and letters written by accused to the complainant stand proved are as follows ; viz. 26.1 The cross-examination of DW-1 is a detailed one. However, there is not even a single question put to DW-1 challenging the veracity of averments and factual claims made by him in his examination-in-chief. To prove the factum of issuance of emails written by accused to the complainant highlighting the dispute, which are electronic records, DW-1 has placed on record Certificate under Section 65-B of the Indian Evidence Act. It is pertinent to note that the complainant while conducting cross-examination of DW-1, has neither put any question direct or implied, nor given any suggestion direct or indirect challenging the veracity of the emails and letters purportedly sent by the accused to complainant. There is also no challenge in any form to the Certificate under Section 65-B filed by DW-1 in proof of the emails sent.
The testimony of DW-1 and various crucial claims made by CC No.27148/2016 Page 14 of 27 DW-1 in his examination-in-chief have gone unrebutted and uncontroverted. There is not even a suggestion by the complainant of falsehood of the claims made by DW-1 in his testimony. Accordingly, in the absence of any opposition, or challenge to the testimony of DW-1, the same stands duly proved. It is held by Hon'ble Apex Court in the judgment of Laxmibai (Dead) THR L.Rs and & Anr. Vs. Bhagwanthuba (Dead) THR L.Rs and & Ors. AIR 2013 SC 1204; that, "there can not be any dispute with respect to settled legal propositions that if a party wishes to raise any doubt as regards correctness of the statement of a witness; the said witness must be given an opportunity to explain his statement by drawing his attention to that part of it, which has been objected to by the other party as being untrue".
It is also held in the judgment of A.E.G. Carapiet vs. A.Y. Derderian AIR 1961 Cal 359 that;
"10. The law is clear on the subject. Wherever the opponent has declined to avail himself of the opportunity to put his essential and material case in cross-examination, it must follow that he believed that the testimony given could not be disputed at all. It is wrong to think that this is merely a technical rule of evidence. It is a rule of essential justice. It serves to prevent surprise at trial and miscarriage of justice, because it gives notice to the other side of the actual case that is going to be made when the turn of the party on whose behalf the cross-examination is being made comes to give and lead evidence by producing CC No.27148/2016 Page 15 of 27 witnesses. It has been stated on high authority of the House of Lords that this much a counsel is bound to do when cross-examining that he must put to each of his opponent's witnesses in turn, so much of his own case as concerns that particular witness or in which that witness had any share. If he asks no question with regard to this, then he must be taken to accept the plaintiff's account in its entirety. Such failure leads to miscarriage of justice, first by springing surprise upon the party when he has finished the evidence of his witnesses and when he has no further chance to meet the new case made which was never put and secondly, because such subsequent testimony has no chance of being tested and corroborated."
Accordingly, in view of the above-referred judgments, and in absence of any specific cross-examination of DW-1 qua the case set out by him in favor of defence, the testimony of DW-1 has to be taken to be correct and established beyond doubts. 26.2 During the cross-examination of DW-1, his attention was specifically drawn to a letter dated 18.09.2008 (Mark PQ-1), a document placed on record by the accused in which the attention of DW-1 was further specifically drawn to Clause 7, in which it was suggested that a request was made by the accused to the complainant to delay the payments of the cheques by 14 days. With this, the complainant intends to show that this request is an admission of liability by the accused, which also shows the voluntary issuance of the CC No.27148/2016 Page 16 of 27 cheques.
In the most humble opinion of this court, the complainant by referring and relying upon document Mark PQ-1 has in effect admitted the document. However, the complainant prefers only to rely on a part of the document but refuses to appreciate its remaining contents which loudly and lucidly enumerate the tale of brewing dispute between the parties. Mark PQ-1 clearly refers to previous emails and letters written by accused to the complainant highlighting various disputes, however except for a portion of the document the complainant has ignored the entire contents of document Mark PQ-1. A document has to be read and appreciated as a whole, but not in parts. When the complainant gives suggestions to DW- 1 based on document Mark PQ-1, he cannot do so without referring the other contents of the document; or without first categorically disproving the other contents not relied upon by him.
27. Accordingly, based on the above-done discussion this court is of the opinion that the accused has written various emails and letters to the complainant with respect to a dispute between the parties as mentioned in said emails and letters and all such CC No.27148/2016 Page 17 of 27 emails and letters were duly received by the complainant, as they were not even remotely challenged or questioned during the trial. Moreover, the uncontroverted and unchallenged certificate under Section 65-B with respect to the emails sent by accused to the complainant add to the reliability of the emails.
28. In a commercial transaction between the parties and in case of germination of disputes, the legitimate and the most accepted form of raising the dispute and seeking the redressal of grievances is by way of writing mails and letters. In addition to writing mails and letters, an aggrieved party may be expected to set the legal course in motion by approaching the police authorities; or the courts of law. However, approaching the police and courts of law are usually resorted as a matter of last resort and in case of dispute in a commercial transaction the emails and letters exchanged between the parties play a pivotal role in understanding the dispute between the parties.
29. Considering the volume of emails and letters written by accused to the complainant over a period of time, this court is of the considered opinion that the acts of the accused are that of a reasonable man and any person placed under the same CC No.27148/2016 Page 18 of 27 circumstances as the accused would have acted in a similar manner. Considering the disputes raised by the accused, which remain un-addressed any reasonable man placed in similar circumstances, if had issued post-dated or security cheques, would have certainly issued stop-payment instructions qua them apprehending their misuse.
30. In the opinion of this court, the accused has raised the dispute through his emails and letters with the complainant at the highest level. Accordingly, this court is of the considered opinion that there existing a valid bona-fide dispute between the parties arising out of business transaction and as the same despite being agitated to the highest level with the complainant remained unredressed, there was a valid necessity for the accused to issue stop-payment instructions to its banker.
31. Furthermore, a bare perusal of the dishonored cheque in question without any doubt suggests that it has been filled up with two different inks. The signatures on the dishonored cheque are admitted to be of the accused. However, filling-up of the body of the cheque is disputed. This court is aware of Section 20 of the N.I. Act where if an inchoate instrument CC No.27148/2016 Page 19 of 27 signed by the drawer is issued to a person, then the payee/holder in due course is well within his rights to fill-up the blank portions in the cheque and make it negotiable. However, in the opinion of this court, where the payee, or a holder in due course makes an inchoate instrument negotiable by himself filling-up the blanks in the cheque then it is incumbent upon him to aver this fact in his complaint.
32. As it is apparent that the dishonored cheque in question has been filled-up with two different inks, therefore it was the onus of the complainant to aver and prove during the trial that under what circumstances the dishonored cheque was filled with two different inks. However, the entire complaint of the complainant is shorn off any averments with respect to the circumstances under which the cheque was filled-up and was made negotiable.
33. From the document Mark PQ-1 filed by the accused and also relied upon by the complainant, it can be inferred that the accused never disputed having issue cheques to the complainant. Moreover, he also, at the first instance did not call for return of his cheques, but he requested the complainant to delay the presentation of the cheques by some CC No.27148/2016 Page 20 of 27 time owing to the commercial dispute between the parties and unless it is resolved. However, it is only when the dispute remain unsettled, the accused issued stop-payment instructions qua the cheque in question and thereafter also intimated the complainant about having issued stop-payment instructions. In the opinion of this court, the conduct of the accused in requesting to delay the payment for the cheques before issuing stop-payment instructions till the dispute is resolved, is a bona-fide conduct reflected by the accused.
34. In the testimony of CW-2 and CW-3, it has come on record that the dishonored cheque in question was presented twice and on both the occasions it was dishonored for the reason, payment stopped by the drawer. This court is aware of the fact that during the period of validity of a cheque it may be presented as many times as the complainant wishes, however, in case where the cheque is presented more than once, particularly when it has been previously dishonored for the same reason i.e. payment stopped by the drawer, the complainant is expected to aver this fact in his complaint. However, in the case at hand, the complainant preferred not to state this fact in his complaint.
CC No.27148/2016 Page 21 of 27
35. Furthermore, the complainant in Para 8 of his complaint has admitted having received the reply to his statutory legal demand notice from the accused. However, for true and correct reasons known to the complainant, he has preferred not to place the reply notice on record. In the opinion of this court, it was incumbent upon the complainant to place such reply legal notice on record. It is worth highlighting that even the accused has not placed the reply legal notice on record during the trial. However, this court is of the opinion that non- filing of the reply notice by the accused does not call for any adverse inference against him. However, this cannot be the case with respect to the complainant for not filing the reply notice.
36. In a case under Section 138 NI Act, the accused upon his first appearance is enjoined to disclose his defence and for cross- examining the witness of the complainant to move application under Section 145(2) NI Act. Apart from this, accused enjoys right to silence as guaranteed to him by the Constitution of India. Therefore, if the accused has not filed reply legal notice, no adverse inference can be raised against him, but in the opinion of this court failure of complainant to place the reply CC No.27148/2016 Page 22 of 27 legal notice on record brings his complaint under the domain of suppressio veri.
37. Before parting, it is expedient to deal with the competence and authority of AR of the complainant Rajiv Behl in terms of judgment of Hon'ble Apex Court delivered in the case of A.C. Narayanan vs. State of Maharashtra (Hon'ble Supreme Court of India) decided on 13.12.2013 in Criminal Appear No.73 of 2007. The AR of the complainant has instituted and prosecuted this case on behalf of the complainant on the strength of a Power of Attorney. With respect to prosecution of cases by a representative of the complainant on the strength of Power of Attorney, the Hon'ble Apex Court in the above-referred judgment categorically held, that "26) While holding that there is no serious conflict between the decisions in MMTC (supra) and Janki Vashdeo Bhojwani (supra), we clarify the position and answer the questions in the following manner:
(i) Filing of complaint petition under Section 138 of N.I Act through power of attorney is perfectly legal and competent.
(ii) The Power of Attorney holder can depose and verify on oath before the Court in order to prove the contents of the complaint. However, the power of attorney holder must have witnessed the transaction as an agent of the payee/holder in due CC No.27148/2016 Page 23 of 27 course or possess due knowledge regarding the said transactions.
(iii) It is required by the complainant to make specific assertion as to the knowledge of the power of attorney holder in the said transaction explicitly in the complaint and the power of attorney holder who has no knowledge regarding the transactions cannot be examined as a witness in the case.
(iv) In the light of section 145 of N.I Act, it is open to the Magistrate to rely upon the verification in the form of affidavit filed by the complainant in support of the complaint under Section 138 of the N.I Act and the Magistrate is neither mandatorily obliged to call upon the complainant to remain present before the Court, nor to examine the complainant of his witness upon oath for taking the decision whether or not to issue process on the complaint under Section 138 of the N.I. Act.
(v) The functions under the general power of attorney cannot be delegated to another person without specific clause permitting the same in the power of attorney. Nevertheless, the general power of attorney itself can be cancelled and be given to another person.
38. Accordingly, the authorized representative of the complainant instituting and prosecuting the case on behalf of the complainant on the strength of a Power of Attorney must have witnessed the transaction as an agent of the payee/ holder in due course or possess due knowledge regarding the said transaction and a Power of Attorney holder for the complainant, who has no knowledge regarding the transaction CC No.27148/2016 Page 24 of 27 cannot be examined as a witness in the case.
39. The AR of the complainant in his cross-examination as CW-1 in the first question itself in his examination recorded on 08.01.2013 categorically stated that, "XXXX I had never had any personal or official dealings with the accused (Vol. It is the sales department that dealt with the accused). Based on this express statement of AR of the complainant, it is manifest that he has not witnessed the transaction between the parties as an agent of the payee/ holder in due course.
40. The AR of the complainant has been cross-examined in detail on several dates and with respect to basic, significant and crucial questions, the witness has neither admitted nor denied the facts suggested. He has, to various questions, simply pleaded his ignorance stating that he is unaware. The AR of the complainant, in his cross-examination, has categorically stated that the accused was appointed Distributor for whole of Delhi, however the distributor appointment letter, an admitted document of the parties clearly show that the accused was appointed as a distributor only for North Delhi.
41. The judgment above-referred requires the Power of Attorney holder to have personally witnessed the transaction between CC No.27148/2016 Page 25 of 27 the parties, or to have due knowledge regarding the transaction. In the most humble opinion of this court, the prefix "due" before the word knowledge is of great significance. Due knowledge means absolute knowledge, capability to bring forth true, correct and complete facts before the court; without which appointment of an authorized representative would only for mere appearance sake.
42. As the AR of the complainant has failed to give answers to basic, significant and crucial questions and merely pleaded his ignorance of being unaware, this court is of the considered opinion that AR of the complainant does not possess due knowledge of the transaction.
43. On the basis of above-done discussion, for the Power of Attorney holder of the complainant lacking knowledge of the transaction as necessitated in the above-referred judgment, his testimony is of no benefit to the complainant.
44. On the basis of above-done discussion, this court safely comes to conclusion that the accused had issued stop-payment instructions qua the dishonored cheque in question owing to valid reasons for having a bona-fide dispute with the complainant and at the relevant time there was sufficient CC No.27148/2016 Page 26 of 27 balance in the account of the accused to honor the cheque; also considering the non-filing of reply legal demand notice by the complainant and bringing his case under the domain of suppressio veri and also considering the fact that AR of the complainant is not competent to depose before the court and no reliance can be placed on his testimony, the accused Pranav Trehun is hereby acquitted for offence under Section 138 NI Act for the dishonor of one cheque i.e. EX CW 1/6.
Announced in the Open (SUMEET ANAND)
Court on 27th March, 2018 MM(N.I Act)/PHC/ND
CC No.27148/2016 Page 27 of 27