Delhi District Court
The Federal Bank Ltd vs . on 5 February, 2015
1
IN THE COURT OF SH. BABRU BHAN, METROPOLITAN MAGISTRATE,
(SPL. NI COURT )04 DWARKA COURT, NEW DELHI
The Federal Bank Ltd.
Vs.
M/s Golden Power Products and Ors.
C.C. No.3460/14 U/s 138 N.I. Act
JUDGMENT
a) Date of commission of 18.10.2004
offence:
b) Name of Complainant The Federal Bank Ltd. through its
authorized representative Sh. Joseph
Paul.
c) Name of the accused and (1) M/s Golden Power Products and
Address: Ors., 404, Skipper Corner, 88, Nehru
Place, New Delhi110019.
(2) Vipin Parwanda, S/o Sh. Ram
Avtar, R/o 139, PocketA8, Kalkaji
Extn., New Delhi.
(3) Avinash Lal (proceedings
quashed)
d) Offence complained of: U/s 138 N.I. Act
e) Plea of accused: Pleaded not guilty
f) Final order: Convicted
g) Date of order: 05.02.2015
h) Date of institution of case: 18.10.2004
i) Date of decision of case: 05.02.2015
C.C. No.3460/14; The Federal Bank Ltd. Vs. M/s Golden Power Products and Ors. Page 1 of 12 2 Brief facts and reasons for decision of the case:
1. The complainant is a Scheduled bank. Accused no.1 is a Pvt. Ltd.
Company and accused no.2 and 3 are its directors. It is alleged in the complaint that accused no.2 and 3 have issued the cheques in question and they are directly involved in the transaction connected with issuance of impugned cheques.
2. One M/s Venus Events Management approached the complainant bank for discounting of some cheques on 06.05.2004 & 08.05.2004. The cheques in question bearing no. '732569' dated 01.05.2004 for Rs.4.90 lacs, '732570' dated 01.05.2004 for Rs.4.95 lacs & '732571' dated 08.05.2004 for Rs.5.00 lacs each drawn on UCO Bank, Village Ogli (Kala Amb), Dist. Sirmour, Himachal Pradesh (Ex.CW1/2, Ex.CW1/5 & Ex.CW1/8) were allegedly issued by accused no.1 company in favour of Venus Events Management. Cheques bear the signatures of accused no.2, i.e., authorized signatory. The cheques were discounted by the complainant bank and the amount of Rs. 14.85 lacs was disbursed in favour of Venus Events Management. After the discounting, the complainant bank stepped into the shoes of the beneficiary. C.C. No.3460/14; The Federal Bank Ltd. Vs. M/s Golden Power Products and Ors. Page 2 of 12 3
3. The cheques were deposited by the complainant bank for encashment but it was returned unpaid on 03.08.2004 for the reasons 'insufficient funds' (Memo Ex.CW1/4, Ex.CW1/6 and Ex.CW1/10). The complainant received the intimation regarding the same on 11.08.2004, Thereafter, the complainant demanded the cheque amount via legal notices each dated 09.09.2004 (Ex.CW1/11, Ex.CW1/12 & Ex.CW1/13). The legal demand notices were dispatched via registered post and courier. (Courier receipts and postal receipts are Ex.CW1/14 to Ex.CW1/28). Despite service, the payment was not made good within the statutory period. Hence, this complaint.
4. On receipt of complainant, the accused persons were summoned to face the trial. I may note that the proceedings against accused no.3 were quashed by Hon'ble High Court of Delhi vide order dated 12.07.2006.
5. During the complainant's evidence, Sh. Joseph Paul, Manager Administration was examined as CW1, sole witness for the complainant. C.C. No.3460/14; The Federal Bank Ltd. Vs. M/s Golden Power Products and Ors. Page 3 of 12 4 He filed his evidence by way of an affidavit Ex.CW1/A. The power of attorney is Ex.CW1/B. In the course of cross examination, the CW1 has also filed the request for discounting made by Venus Events Management to the complainant bank (Ex.CW1/DA) and the account opening form of Deepak Kumar Jha (Ex.CW1/DB).
6. Thereafter, the accused was confronted with the entire incriminating evidence under the mandate of section 313 CrPC. During the statement, accused admitted his signatures on the impugned cheques but explained that employee of his company in collusion with the complainant bank had misused these cheques. He has also denied any liability of the accused company towards the complainant or anyone. The receipt of legal demand notice was also denied.
7. During the defence evidence, Sh. Deepak Jha, Director of M/s Venus Events Management was examined as DW1. Sh. Veer San, Director of M/s Falcon Books Pvt. Ltd. was examined as DW2 and accused no.2 Sh. Vipin Kumar Parwanda was examined as DW3.
C.C. No.3460/14; The Federal Bank Ltd. Vs. M/s Golden Power Products and Ors. Page 4 of 12 5
8. I have heard the arguments and carefully perused the records. Now, I proceed to consider that whether the accused no.1 and 2 are liable for the offence u/s.138 N.I. Act or not.
9. Section 118 & 139 of N.I. Act inter alia provides that until the contrary is proved, it shall be presumed that every negotiable instrument was made or drawn for consideration and that the holder of a cheque received the cheque for the discharge, in whole or in part or any other debt or liability. The burden to rebut these presumptions lies upon the accused.
10. Accused no.2 when deposed as DW3 u/s.315 CrPC, he admitted that he was director of accused no.1 company. He also admitted his signatures on the cheques in question Ex.CW1/2, Ex.CW1/5 & Ex.CW1/8.
11. During the statement u/s.313 CrPC, accused explained that though the impugned cheques bear his signatures but same was never issued in discharge of liability towards the complainant or anyone. He stated that C.C. No.3460/14; The Federal Bank Ltd. Vs. M/s Golden Power Products and Ors. Page 5 of 12 6 the same were misused by employee of his company in collusion with the complainant bank. Similar version was reiterated by him during his statement as DW3 wherein he deposed that the cheques were never issued to M/s Venus Events Management or anyone else. It was stated to be misused by some of his employee in collusion with some staff of M/s Venus Events Management.
12. There are three complaints against M/s Golden Power Products pending in this court wherein various cheques issued by the accused no.2 on behalf of the accused no.1 are used in the similar manner. The accused no.2 has admitted during his cross examination that he has not lodged any police complaint regarding the manipulation and misuse of his cheques.
13. Despite the litigation, which the accused no. 2 claimed to have been ensued by misusing the impugned cheques, the accused no.2 has admittedly not lodged any police complaint regarding the fraud and misuse of his cheques. Accused no.2 is a director of a Pvt. Ltd. Company and he is M.B.A. by qualification. He can be expected to be well aware of C.C. No.3460/14; The Federal Bank Ltd. Vs. M/s Golden Power Products and Ors. Page 6 of 12 7 his legal rights, but surprising enough, he is silently facing this litigation alongwith other cases since 2004. It is very unusual that despite his cheques were misused by some of his employee in connivance with some employee of the complainant bank or of Venus Events Management, he faced this exhausting litigation and he did not cared to lodge any police complaint against anyone.
14. This unusual conduct of the accused in not lodging any complainant to police or any other authority raise a doubt on his contention that his cheques were misused by his employee in connivance of the officials of the complainant bank.
15. Moreover, one cheque can be misused, it is possible. But there are three complainants against the accused where his cheques are discounted by the complainant bank at behest of three different firms/companies. How these three firms got the cheques of the accused company, same is not explained by the accused.
C.C. No.3460/14; The Federal Bank Ltd. Vs. M/s Golden Power Products and Ors. Page 7 of 12 8
16. It is apparent that complainant bank has been cheated by the accused company in connivance with other associate firms.
17. Next contention raised by the accused is that he had no association or business dealings with M/s Venus Events Management and the impugned cheques were never issued in favour of the M/s Venus Events Management Pvt. Ltd.
18. The complainant has filed the document Ex.CW1/DB, i.e., the current account opening form of M/s Venus Events Management Pvt. Ltd. The written request of discount made by him on behalf M/s Venus Events Management Pvt. Ltd. is Ex.CW1/DA. The signatures on both these documents are admitted by DW1 Mr. Deepak Kumar Jha. He has also stated during his cross examination that account of M/s Venus Events Management Pvt. Ltd. was being operated under his sole authority.
C.C. No.3460/14; The Federal Bank Ltd. Vs. M/s Golden Power Products and Ors. Page 8 of 12 9
19. Though the DW1 has denied any business relations with the accused company but he failed to give any satisfactory explanation regarding his signatures on the letter of request for discounting given to the complainant bank. It is apparent from his testimony that he is trying to save the accused.
20. M/s Venus Events Management had requested the complainant for discounting of cheque and this fact is established by document Ex.CW1/DA. The amount was also disbursed in its favour on 08.05.2004 as proved by document Ex.CW1/30.
21. Thus, it is established that M/s Venus Events Management had approached the complainant bank for discounting of cheques in question and same was done by the complainant bank. By doing so, the complainant bank stepped into the shoes of the payee. An endorsement in this regard is also mentioned on the cheque in question as 'CP3385', 'CP3386' & 'CP3387'. It has been explained by CW1 that it was the Cheque Purchase Number and thereafter the amount was disbursed in C.C. No.3460/14; The Federal Bank Ltd. Vs. M/s Golden Power Products and Ors. Page 9 of 12 10 the account no.'4094' of M/s Venus Events Management. The disbursal has already been proved vide document Ex.CW1/30.
22. Since it has been proved that a cheque issued by the accused was discounted by the complainant bank and the amount was disbursed, therefore the complainant bank became the holder in due course. A presumption u/s.118(g) N.I. Act arose in favour of the complainant and the onus was upon the accused to rebut the same. However, the accused failed to probablise any fraud or offence through which the cheque was obtained from him. Accordingly, the presumption gone unrebutted.
23. The dishonour of cheque in question has been proved by the cheque returning memo (Memo Ex.CW1/4, Ex.CW1/6 and Ex.CW1/10).
24. The legal demand notice Ex.CW1/11, Ex.CW1/12 & Ex.CW1/13 were sent to the accused on 09.09.2004 by registered post and courier. The postal receipts are filed on record as Ex.CW1/14 to Ex.CW1/28. The correctness of address mentioned on the legal demand notice has not C.C. No.3460/14; The Federal Bank Ltd. Vs. M/s Golden Power Products and Ors. Page 10 of 12 11 been disputed. Moreover the accused has mentioned the same address in the bail bond furnished before this court. Thus, the service of legal demand notice can be safely presumed under the mandate of section 27 of the General Clauses Act.
25. The conclusion of the above discussions is that the M/s Venus Events Management had approached the complainant bank through Deepak Kumar Jha for discounting of cheque in question. Same was done by the complainant bank. The accused had a golden opportunity to explain that how the impugned cheque came into the possession of M/s Venus Events Management but he simply walked away by saying that the cheque was misused by some employee of his company in connivance either with M/s Venus Events Management or some staff of the complainant bank. His explanation is apparently not satisfactory because it is proved on record that many other cheques issued by the accused company got discounted by other firms / companies from the complainant bank in similar manner. The apparent real story is that complainant bank has been deceived by the accused company with connivance with other associate companies/firms. C.C. No.3460/14; The Federal Bank Ltd. Vs. M/s Golden Power Products and Ors. Page 11 of 12 12
26. All the ingredients of offence u/s 138 NI Act are proved beyond all reasonable doubts.
27. Accused no.1 & 2 stands convicted accordingly. Copy of judgment be supplied to the accused.
(Announced in the open court on 05.02.2015) This Judgment contains 12 pages.
and each paper is signed by me.
(BABRU BHAN) METROPOLITAN MAGISTRATE DWARKA COURTS /NEW DELHI C.C. No.3460/14; The Federal Bank Ltd. Vs. M/s Golden Power Products and Ors. Page 12 of 12