Delhi District Court
(K) K.N. Beena vs . Muniyappa on 22 June, 2012
IN THE COURT OF SHRI ARUN KUMAR, METROPOLITAN
MAGISTRATE:DWARKA COURTS:NEW DELHI
CC NO: 60/11
Unique Case ID No: RO585592010
M/s GE Capital Services India
AIFCS Building, 1, Rafi Marg
New Delhi-110001 ..............Complainant
Versus
Ajayveer Solanki
WZ-17, Asalarpur
Janak Puri, Delhi-110058 ................Accused
Date of filing : 23.08.2010
Date of Institution : 28.08.2010
Offence Complained of or proved : Under section 138 of
Negotiable Instruments Act,
1881
Plea of the accused : Pleaded not guilty
Date of reserving judgment/order : 31.05.2012
Final Order/Judgment : Acquitted
Date of pronouncement : 22.06.2012
JUDGMENT:
BRIEF FACTS AND REASONS FOR THE DECISION OF THE CASE:-
1. Vide this judgment, I shall dispose of the present complaint u/s 138 of the Negotiable Instruments Act filed by M/s GE Capital Services India (Erstwhile GE Capital TFS Ltd.) against the accused.
GE Capital Services India v. Ajayveer Solanki CC No. 60/11 Judgment dated 22.06.2012 Page 1 of 29
2. The case of the complainant as per the complaint is that the complainant is a non-banking finance company duly incorporated under the Companies Act, and is engaged in the business of financing commercial vehicles, construction equipments and machinary etc. and the accused had availed the loan facility from M/s GE Capital TFS Ltd. vide loan account no. TNGURSCEZ00319152 however consequent upon the merger of the aforesaid company with the complainant company all rights, properties liabilities and duties of M/s GE Capital TFS Ltd. Including the contractual liabilities of the accused have vested in the complainant company. It is further the case of the complainant that towards towards part discharge of his contractual liability/debt arising out of aforesaid loan agreement the accused issued cheques bearing nos. 131442, 131443 and 131444 dt. 15.01.2010, 15.02.2010 and 15.03.2010 respectively for a sum of Rs. 59,525/- each drawn on Standard Chartered Bank, B-1/517, Janakpuri, New Delhi-110058 which on presentation by the complainant were returned unpaid by the banker of the accused with remarks 'Account Closed' vide return memos dated 19.06.2010 which were received by the complainant on 21.06.2010. Thereafter, the complainant had sent a legal notice dated 30.06.2010 GE Capital Services India v. Ajayveer Solanki CC No. 60/11 Judgment dated 22.06.2012 Page 2 of 29 demanding the payment of cheques amount in question within fifteen days of receipt of the notice on 08.07.2010 and since despite service of the legal notice on 09.07.2010 the accused had failed to make the payment , the complaint was filed by the complainant under Section 138 of Negotiable Instruments Act through Shri Atul Bansal, Authorized Representative of the complainant.
3. The accused was summoned vide order dated 28.10.2010, whereupon the accused entered his appearance on 30.11.2010 through his counsel. Thereafter, separate notice u/s 138 of the NI Act was issued to the accused on 03.06.2011 in terms of provisions of Section 251 of the Cr.P.C., to which he did not plead guilty and claimed trial. The accused moved an application u/s 145(2) of the NI Act seeking permission to cross examine the complainant's witness which was allowed vide order dated 03.06.2011. Thereafter, AR of the complainant was cross examined by ld. Counsel for the accused on 01.12.2011 and on a separate statement of AR of the complainant CE was closed on the same day. Complainant has relied upon the following documents in its evidence.
EX.CW1/1: Copy of power of attorney dated 24.12.2009 in favour of the AR GE Capital Services India v. Ajayveer Solanki CC No. 60/11 Judgment dated 22.06.2012 Page 3 of 29 of the complainant.
EX. CW1/2: Copy of incorporation certificate of the complainant company EX. CW1/3 (Colly): Original cheques bearing nos. 131442, 131443 and 131444 dt. 15.01.2010, 15.02.2010 and 15.03.2010 respectively for a sum of Rs. 59,525/- each drawn on Standard Chartered Bank, B-1/517, Janakpuri, New Delhi-110058 in favour of the M/s GE Capital TFS Ltd. EX.CW1/4 (Colly): Dishonour memos dated 19.06.2010 in respect of aforesaid cheques.
EX.CW1/5: Copy of Legal demand notice dated 30.06.2010. EX.CW1/6: Postal receipts dated 08.07.2010 regarding dispatch of legal notice.
Ex. CW 1/7: Complaint u/s 138 of NI Act.
4. Accused was examined under Section 313 Cr.P.C on 09.12.2011 and the matter was fixed for defence evidence. Accused has examined himself as DW1 after moving an application u/s 315 of Cr.P.C. After the accused was duly cross examined by ld. Counsel for the complainant, on a separate statement of accused DE was closed vide order dated 02.03.2012 and the matter was fixed for final arguments.
5. Final arguments in the case were heard on 02.04.2012, 28.04.2012, 09.05.2012 and 31.05.2012 respectively. Besides, written submissions have been filed by both the parties.
GE Capital Services India v. Ajayveer Solanki CC No. 60/11 Judgment dated 22.06.2012 Page 4 of 29
6. It is submitted by ld counsel for complainant that the accused has admitted his signatures on the cheques in question and therefore, in view of provisions of section 118(a) and 139 of the NI Act, there arises a presumption in favour of the complainant that the cheques were issued by the accused in discharge of his liability towards the complainant. According to him the complainant has not even denied the execution of collateral agreement bearing no.TNGURSCEZ00319152. It is further submitted by him that the accused has failed to rebut any of the aforesaid presumption even by preponderance of probabilities and since despite the service of legal notice the accused has failed to make the payment towards cheques amount in question, he is liable to be convicted u/s 138 of NI Act. According to him, only defence sought to be raised by the accused that the liability of the accused had ceased immediately on repossession of the vehicle by the complainant, is not sustainable in view of the fact that as per the terms and conditions of the agreement the complainant was entitled to recover the overdue installments from the accused even after the repossession of the vehicle. It is further submitted by him that even the stand taken by the accused that legal notice was never served upon him due to the incorrect GE Capital Services India v. Ajayveer Solanki CC No. 60/11 Judgment dated 22.06.2012 Page 5 of 29 address mentioned in the same is liable to be dismissed in view of the fact that legal notice was sent to the accused on the address furnished by him to the complainant at the time of the execution of loan agreement and moreover the accused has appeared in the court in response to process of this court directed to the same address. Besides, it is further submitted by him that the accused has further failed to lead any evidence in support of his submissions that resale value of the vehicle as on the date of repossession was Rs.15 lacs approximately and the Xerox copy of insurance cover note purportedly issued by Bajaj Alliance Motor Insurance Co. has no evidentiary value. Ld. Counsel for the complainant has relied upon the following judgments in support of aforesaid submissions.
(a) Ravi Gupta v. R.C.Tiwari, II(2008) DLT (Crl.) 279
(b) M.M.T.C. Ltd. And Anr. v. MEDCHL Chemicals and Pharma (P) Ltd. & Anr. (2002) 1 SCC 234
(c) Punjab National Bank v. Khazan Singh & Ors. AIR 2004 P&H 282
(d) M/s Shankar Finance & Investments v. State of Andhra Pradesh & Ors. 2008(10)SCALE 654
(e) Prakash Jwellers v. A.K.Jwellers 99(2002) DLT 244 (DB)
(f) Mojj Engineering Systems Ltd. & Ors. v. A.B.Sugars Ltd. 154(2008)DLT579
(g) Standard Chartered Bank v. Ravi Bhandari 98(2002) DLT 289
(h) C.C.Alavi Haji v. Palapetty Muhammad & Anr. (2007)6SCC 555 (I) Magnum Aviation (Pvt.) Ltd. v. State & Ors. 2010 VII AD (Delhi) 705
(j) Canara Bank, New Delhi v. M/s sanjeev Enterprises & Ors. AIR 1988 GE Capital Services India v. Ajayveer Solanki CC No. 60/11 Judgment dated 22.06.2012 Page 6 of 29 Delhi 372
(k) K.N. Beena vs. Muniyappa
(l) Union of India vs. Naresh Kumar & Ors. AIR 1997 SC 3
(m) Grafitek International v. K.K.Kaura & Ors. 1996 (2002) DLT 385 In view of the above submissions, it was prayed by ld. Counsel for complainant that since the complainant has proved all the ingredients of offence u/s 138 of the NI Act, the accused be convicted for the said offence and may be punished accordingly.
7. On the other hand, it is submitted by ld. Counsel for accused that the complainant has failed to prove any of the ingredients of section 138 of the NI Act in as much as the complainant has not led any evidence to show that the cheques were issued by the accused in favour of the complainant in discharge of any legally enforceable debt or liability despite the fact that the accused has successfully rebutted the presumptions u/s 118(a) and u/s 139 of the NI Act by bringing on record the admission by the complainant that the vehicle had already been repossessed by the complainant prior to presentation of cheques in question and the cheques were given by the accused to the complainant as blank signed cheques at the time of execution of loan agreement. It is further submitted by him that the complainant has GE Capital Services India v. Ajayveer Solanki CC No. 60/11 Judgment dated 22.06.2012 Page 7 of 29 further failed to prove service of legal notice upon the accused in as much as the address mentioned in the aforesaid legal notice does not exist in Delhi. It is further submitted by him that the present complaint is even otherwise not maintainable in view of the fact that the complainant has failed to place on record any document to show that the complainant company was licensed to grant loan to the general public and Mr. Atul Bansal is the duly Authorized Representative of the company to prosecute the present complaint. It is further submitted by him that the execution of power of attorney in favour of alleged AR of the complainant has not been properly proved by the complainant and moreover the presumption u/s 85 of Indian Evidence Act is not available to the complainant as the power of attorney has not been executed before the notary public. Thus, according to him, in the absence of proof of any board resolution in favour of the alleged executant of the power of attorney, Mr. Atul Bansal cannot be said to be authorized representative of the complainant even if the execution of the same by Mr. Nishant Singh is admitted. Ld. Counsel for the accused has relied upon the following judgments in support of aforesaid submissions made by him.
(a) Thakurlal v. Ramadhar (1996 ALJ 480) GE Capital Services India v. Ajayveer Solanki CC No. 60/11 Judgment dated 22.06.2012 Page 8 of 29
(b) M/s Shakti Finance Ltd. v. K.Selvaraj {2011 ACD 707 (MAD)}.
(c) EPC Industries Ltd. v. State of Maharashtra & Ors {2009 (2) DCR 36}.
(d) M/s Balaji Agencies P. Ltd., Goa V. M/s Samudra Ropes P. Ltd. Goa & Ors {2011 ACD 359 (BOM)}.
(e) Chicho Ursula D'Souza v. Goa Plast Pvt. Ltd. (2009 (1) DCR 690 Bombay High Court).
(f) Roy Joseph Creado & Ors Vs. S.K. Tamisuddin & Ors {2011 ACD 1350 (BOM)}.
(g) VPK Urban Cooperative Credit society Ltd. v. Shaikh Rucnoddin Mohammed & Anr {2011 ACD 53 (Bom)}.
(h) Smt. Nanda Vs. Nandkishore (2010 (1) DCR 618)
(i) Ramkrishna Urban Cooperative Credit Society Ltd. v. Rajendra Bhagchand Warma
(j) Bashir Ahmad MIR Vs. Abdul Ahad Ganai {2009(2) DCR 692}.
(k) Amzad Pasha Vs. H.N. Lakshmana {2011 ACD 365 (Kant)}.
(l) Ranada Dutta Vs. The State of West Bengal & Anrs. {2011 (1) DCR 495}.
(m) Kanhaiya Lal & Anr Vs. State of UP & Anr. {2010 (2) DCR 184 Allahabad High Court}.
(n) Mahindra Hire Purchase (Regd) (M/s) Vs. Biru Ram and Anr {2011 ACD 583 (P&H)}.
(o) B. Indramma Vs. Ishwar {2010 (2) DCR 285 - Karnataka High Court}.
(p) Sudha Beevi Vs. State of Kerala & Anr {2004 CRI. L.C. 3418 (Kerala High Court)}.
(q) N. Rajangan Vs. Centurion Bank Ltd. {2011 [1] JCC [NI] 26 (Madras High Court)}.
(r) Pine Product Industries Vs. R.P. Gupta & Sons 2007 (1) LRC 129 (Del).
(s) Veena Rani Chhabra Vs. Manju Rohida {2009 DCR 302 (Delhi High Court)}.
8. In view of the aforesaid submissions made on behalf of both the parties the points which arise for determination by this court are as follows:
a) Whether the cheques in question were issued by the accused for GE Capital Services India v. Ajayveer Solanki CC No. 60/11 Judgment dated 22.06.2012 Page 9 of 29 consideration and in discharge of any legally enforceable debt or liability towards the complainant so as to attract the provisions of Section 138 of the Negotiable Instruments Act?
b) Whether the present complaint is not maintainable as not filed by duly authorized representative of the complainant company?
c) Whether the present complaint is non-maintainable for want of proof of service of mandatory legal notice?
I have considered the rival submissions made on behalf of both the parties and have also perused the record in the light of principles of law laid down in various judgments relied upon by both the parties in support of their respective submissions and now I shall deal with the aforesaid points one by one.
a) Whether the cheques in question were issued by the accused for consideration and in discharge of any legally enforceable debt or liability towards the complainant so as to attract the provisions of Section 138 of the Negotiable Instruments Act?
9. Before adverting to the facts of the case in hand, it would be pertinent to reproduce the relevant provisions of Section 138, 139 and Section 118(a) GE Capital Services India v. Ajayveer Solanki CC No. 60/11 Judgment dated 22.06.2012 Page 10 of 29 and (b) of the Negotiable Instruments Act at the very outset, which reads as follows:-
"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 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 other liability' means a legally enforceable debt or other liability." GE Capital Services India v. Ajayveer Solanki CC No. 60/11 Judgment dated 22.06.2012 Page 11 of 29
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.
118. Presumption 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, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;
(b) as to date-that every negotiable instrument bearing a date was made or drawn on such date;"
10. Issue regarding the scope of presumptions u/s 118(a) and u/s 139 of the NI Act has come up for consideration before the Hon'ble Supreme Court in a number of cases. There is no doubt about the settled legal position that once the signatures on the cheque are admitted by the drawer of the cheque, there arises a presumption in favour of the payee/holder in due course in terms of Section 139 and 118 (a) of the Negotiable Instruments Act that the cheque has been issued for consideration and in discharge of a legally enforceable debt or liability. It is also well settled that a) the presumption does not go to the extent of presuming the existence of debt and b) the GE Capital Services India v. Ajayveer Solanki CC No. 60/11 Judgment dated 22.06.2012 Page 12 of 29 aforesaid presumption is rebuttable in nature.(See Krishna Janardhan Bhat v. Dattatraya G. Hegde, (SC)2008(1)R.C.R.(Criminal) 695). Further it is also well settled that for the rebuttal of the presumptions it is not necessary that the accused must step into the witness box but the presumptions can be rebutted either by cross examination of the complainant's witnesses (See M.S. Narayana Manon V. State of Kerala & Another AIR 2006 SC 3366 and Krishna Janardhan Bhat v. Dattatraya G. Hegde, (SC) 2008(1)R.C.R. (Criminal) 695) or even by raising presumptions of fact or law from the material available on record (See Kundan Lal Rala Ram V. Custodian Evaccue Property, reported as AIR 1961 SC 1316). Moreover, standard of proof for rebuttal of presumptions by any person accused of an offence under Section 138 of the Negotiable Instruments Act is preponderance of probabilities and accused is not liable to prove his defence beyond reasonable doubts. On the other hand, bare denial or bald suggestions give by the accused would not be sufficient to rebut the aforesaid presumptions. Thus, whether the presumption has or has not been rebutted depends upon the facts of each case to be analyzed in the light of aforesaid legal principles. The judgments relied upon by both the parties also do not lay down anything GE Capital Services India v. Ajayveer Solanki CC No. 60/11 Judgment dated 22.06.2012 Page 13 of 29 contrary to the aforesaid propositions of law.
11. Now coming to the facts of the case in hand, there is no dispute between the parties about the loan transaction in question. So far as the issue regarding execution of loan agreement is concerned, though the case of the accused is that certain blank performas of the loan documents were signed by him but as per the case of the complainant the accused has duly executed the loan agreement in question. So far as the issuance of cheques in question is concerned, the accused has not disputed his signatures on the same but submits that the cheques in question were handed over by him to the complainant along with some other cheques as blank signed cheques prior to disbursal of the loan amount in question towards monthly installments. On the other hand CW-1 has failed to depose about the exact time and the circumstances under which the cheques in question had come in the possession of the complainant. Under the circumstances it can safely be presumed that the cheques in question are out of the aforesaid cheques allegedly handed over by the accused to the complainant at the time of availing the loan in question. Moreover, there is no dispute between the parties about the fact that the vehicle was repossessed by the complainant GE Capital Services India v. Ajayveer Solanki CC No. 60/11 Judgment dated 22.06.2012 Page 14 of 29 from the accused in the month of March 2009 i.e. much prior to presentation of cheques in question. It is further not in dispute that the vehicle has since been resold by the complainant during the pendency of the present complaint, although there is dispute about the actual resale value and the exact value on the date of repossession of the vehicle. However in view of peculiar facts and circumstances of the case I need not decide the controversy about the exact re-sale price of the vehicle in question. In view of the aforesaid admitted facts, it was contended by Ld. Counsel for the accused that Section 138 of the NI Act is not attracted to dishonour of the cheques in question which were issued by the accused as blank signed security cheques prior to disbursal of the loan amount in question. Even otherwise, he submits, once the vehicle which formed the consideration, if any, for issuance of post dated cheques/blank signed cheques was repossessed by the complainant during the month of March 2009, the consideration had subsequently failed at the time of presentation of the said cheques in the month of June 2010 and hence in terms of Section 43 of the Negotiable Instruments Act, the dishonour of cheques in question does not give rise to any obligation on the part of accused. Ld. Counsel for the GE Capital Services India v. Ajayveer Solanki CC No. 60/11 Judgment dated 22.06.2012 Page 15 of 29 accused has relied upon the Judgment of Hon'ble Kerala High Court in Sudha Beevi's (Supra) case in support of aforesaid submissions made by him. On the other hand, it was contended by Ld. Counsel for the complainant that the aforesaid judgment is not applicable on the facts and circumstances of the present case in as much as in the case before the Hon'ble High Court the issue arose while dealing with hire purchase agreement forming the subject matter of those proceedings, while in the present case we are concerned with the interpretation of loan cum hypothecation agreement. I do not agree with the aforesaid contention of Ld. Counsel for the complainant in as much as the principles on which the case of complainant was dismissed by Hon'ble High Court are equally applicable to the present case so long as the cheques in question were issued by the accused as blank signed cheques/post dated cheques at the time of execution of agreement irrespective of the fact whether the agreement is one by way of hire purchase or loan cum hypothecation agreement. The same view has been adopted by Hon'ble Madras High Court in N. Rajangan v. Centurian Bank Ltd., 2011 [I] JCC (NI) 26 (Madras HC) wherein under the identical facts the Hon'ble Madras High Court while dealing with the similar contention regarding GE Capital Services India v. Ajayveer Solanki CC No. 60/11 Judgment dated 22.06.2012 Page 16 of 29 applicability of ratio of judgment in Sudha Beevi's case observed as follows:
13.Considering the facts and circumstances of the case, this court is of the view that where it is a hire purchase agreement or purchase on the basis of hypothecation, the same is laid down by the Kerala High Court based on the following principles:
(i) The post dated cheques issued by the hirer were supported by consideration at the time when they were issued, they had ceased to be so when the vehicle was repossessed. The consideration has failed subsequently.
(ii) The post dated cheques in the hands of the owner had become instruments for which consideration had failed.
(iii) As per Section 138 of Negotiable Instruments Act, in order to attract the penal provision, the "debt or other liability" must be "legally enforceable debt or liability". If the negotiable instrument is not supported by consideration, there is no question of the provisions of Section 138 of the Act being attracted.
14. In view of the same, this court is also of the view that once the financier had exercised the option of seizure of the vehicle, the post-dated cheques obtained from the purchaser cannot be presented for encashment after the seizure. The owner has to take recourse to other legal remedies for recovery of the balance amount. If and when the vehicle is sold subsequently, the owner can recover the balance amount for adjusting the sale proceeds of the vehicle. Of course, in the post seizure scenario, it may be open to the parties to agree upon a new schedule of payment or restructuring of the agreement concerned. So, the present case filed on the basis of the post-dated cheques issued by the petitioner is not attracted the offence under section 138 GE Capital Services India v. Ajayveer Solanki CC No. 60/11 Judgment dated 22.06.2012 Page 17 of 29 of the Negotiable Instruments Act, and hence the same is liable to be quashed."
12. Thus the present case is squarely covered by the judgment of Hon'ble Madras High Court and hence in view of provisions of Section 43 of the NI Act as well as in the light of aforesaid observations made by Hon'ble Madras High Court, in my considered opinion the cheques in question had already ceased to be the instruments issued for valid consideration as on the date of presentation and hence the dishonour of the aforesaid cheques does not entail prosecution under Section 138 of the NI Act.
13. The finding on first point for determination renders the discussion on remaining two points rather academic but still I consider it appropriate to briefly deal with the remaining two issues in the following paras.
b) Whether the present complaint is not maintainable as not filed by duly authorized representative of the complainant company?
14. It has been contended by Ld. Counsel for the accused that the complainant has utterly failed to prove that the present complaint has been filed by the complainant through duly authorized representative, in as much GE Capital Services India v. Ajayveer Solanki CC No. 60/11 Judgment dated 22.06.2012 Page 18 of 29 as, according to him, no board resolution or for that matter any other document authorizing the alleged executant of the power of attorney Ex. CW-1/A has been placed on record by the complainant despite categorical suggestion in this regard by Ld. Counsel for the accused to CW-1 that the board resolution has not been placed on record deliberately as Mr. Nishant Singh was not duly authorized by the complainant to execute the power of attorney in favour of Mr. Atul Bansal and as a necessary corollary the power of attorney executed by Mr. Nishant Singh cannot authorize Mr. Atul Bansal to file the present complaint or to depose on behalf of the complainant and hence, according to him, the present complaint is liable to be dismissed solely on this ground. It is further contended by him that even the presumption regarding competency of executant of power of attorney to execute the same on behalf of the complainant company in terms of section 85 of the Evidence Act is not available to the complainant in as much as admittedly the alleged executant has not executed the power of attorney before the notary public.
15. On the other hand, it is submitted by Ld. Counsel for the complainant that merely because the board resolution in favour of the executant of power GE Capital Services India v. Ajayveer Solanki CC No. 60/11 Judgment dated 22.06.2012 Page 19 of 29 of attorney is not properly proved by the complainant, the court cannot non- suit the complainant merely on this ground since the acts of an attorney can be ratified by the principal at any stage. Ld. Counsel for the complainant has relied upon the judgment of Hon'ble Supreme Court in MMTC Ltd.'s case (supra) and in Union Bank of India v. Naresh Kumar (Supra) in support of her aforesaid submission. Even otherwise, it is submitted by her, that the court should not entertain the aforesaid hyper-technical objection of the accused as the authority of Mr. Atul Bansal to file the present complaint on behalf of the complainant can be inferred from the material available on record in as much as the AR has filed the present complaint alongwith original documents which could not have come into possession of Mr. Atul Bansal without authority of the complainant. Ld. Counsel for the complainant has relied upon the Judgment of Hon'ble Supreme Court in Union Bank of India v. Naresh Kumar (Supra) in support of her aforesaid submission.
16. I have heard the rival submissions made on behalf of both the parties and have perused the material available on record and have also gone through the various judgments relied upon by both the parties in support of GE Capital Services India v. Ajayveer Solanki CC No. 60/11 Judgment dated 22.06.2012 Page 20 of 29 their respective submissions. There is no dispute about the proposition of law that merely because the power of attorney is not duly notarized does not mean that the concerned person was not authorized to institute a suit/complaint as has been laid down by Hon'ble Delhi High Court in Grafitech International v. K.K.Kaura and Ors. 1996 (2002)DLT 385. Due notarization of the power of attorney merely gives rise to the two fold presumption under Section 85 of the Evidence Act i.e. a) The power of attorney is duly executed by the executant and b) that the executant was competent to execute the power of attorney. Thus the only effect of not getting the power of attorney duly notarized is that the benefit of aforesaid presumptions arising under Section 85 of the Evidence Act regarding due execution and competency of the executant of power of attorney cannot be given to the attorney holder and the aforesaid facts i.e. due execution as well as competency of the executant are required to be proved as any other fact as per the provisions of Evidence Act. In the case in hand, as a matter of fact the power of attorney has not been duly notarized as admittedly the same has not been executed by Mr. Nishant Singh before the notary public on the date of notarization and as such presumptions under Section 85 of the Evidence GE Capital Services India v. Ajayveer Solanki CC No. 60/11 Judgment dated 22.06.2012 Page 21 of 29 Act are not available to the complainant.
17. Thus the next point which arise for determination is whether independent of the aforesaid presumptions the complainant has been able to prove the due execution of power of attorney and the competency of the alleged executant. So far as the issue regarding due execution of the power of attorney by Mr. Nishant Singh is concerned, in my considered opinion, the same has been duly proved by the uncontroverted testimony of CW-1 as he has deposed to the effect that the power of attorney has been executed by Mr. Nishant Singh in his presence at the registered office of the complainant company.
18. Now the next point to be determined is whether said Mr. Nishant Singh was competent to execute the power of attorney on behalf of the complainant. Admittedly the board resolution or any other document authorizing Mr. Nishant Singh to execute the Power of Attorney on behalf the complainant company has not been proved by the complainant on record. This is despite the categorical suggestion to CW-1 by Ld. Counsel for the accused that said Mr. Nishant Singh was not competent to execute the power of attorney Ex. CW-1/A on behalf of the complainant. I have already GE Capital Services India v. Ajayveer Solanki CC No. 60/11 Judgment dated 22.06.2012 Page 22 of 29 observed that in the absence of any presumption under Section 85 of the Evidence Act, competency of the executant of power of attorney needs to be proved as any other fact as per the provisions of Evidence Act keeping in mind the nature of proceedings i.e. civil or criminal. Although in both the proceedings the onus to prove the competency is on the party who asserts the same but the standard of proof of the aforesaid fact differs in case of civil and criminal proceedings. While in the former proceedings the fact can be proved on the basis of preponderance of probabilities but in criminal proceedings such a fact need to be proved beyond reasonable doubts. In view of the aforesaid discussions, in my considered opinion, the reliance placed by Ld. Counsel for the complainant on the judgment in Union Bank of India v. Naresh Kumar is highly misplaced as the Hon'ble Apex Court was dealing with the issue regarding authority of the attorney holder in the context of a civil suit while this court is dealing with a criminal complaint under Section 138 of the NI Act. Moreover the issue regarding inferring the authority of the attorney holder does not arise in the peculiar facts of the case wherein the complainant has failed to prove any board resolution authorizing the alleged executant of power of attorney despite the fact that a specific GE Capital Services India v. Ajayveer Solanki CC No. 60/11 Judgment dated 22.06.2012 Page 23 of 29 dispute has been raised by Ld. Counsel for the accused during cross examination of CW-1 about the competency of the alleged executant of power of attorney Ex. CW-1/A. This is despite the fact that the act of the attorney holder could have been ratified by the complainant at any stage of the proceedings as has been held by Hon'ble Delhi High Court in MMTC's case and Hon'ble Apex Court in Union Bank of India's case. Moreover the observations of Hon'ble Punjab and Haryana High Court in Punjab National Bank v. Khazan Singh AIR 2004 P &H 282 to the effect that -absence of proof of resolution authorizing the director to execute the power of attorney will not make any difference- are not applicable in the facts and circumstances of the present case in as much as in the case before Hon'ble High Court the provisions of section 85 of the Evidence Act were held to be applicable but in the case in hand, as has already been observed, the presumption under section 85 of the Evidence Act is not available to the complainant. I am unable to comprehend as to why the complainant has been shying away from producing the valid board resolution in favour of the alleged executant of power of attorney despite the fact that even during final arguments on the very first day, Ld. Counsel for the accused has forcefully GE Capital Services India v. Ajayveer Solanki CC No. 60/11 Judgment dated 22.06.2012 Page 24 of 29 argued about the non-maintainability of the present complaint on account of non-production and proof of any such board resolution and despite the fact that Ld. Counsel for the complainant was fully aware of the legal position that such a board resolution or resolution ratifying all acts done by alleged AR of the complainant on behalf of the complainant can be produced by the later at any stage. Thus the entire conduct of the complainant in prosecution of the present complaint further raises serious doubts about the competency of the power of attorney holder to file the present complaint on behalf of the complainant. In view of the aforesaid facts and in view of the fact that the complainant has failed to prove that the cheque in question was issued by the accused in discharge of any legally enforceable debt or liability and for consideration, even I do not consider it a fit case to call for such a resolution at this stage.
19. It is next sought to be contended by Ld. Counsel for the complainant that Mr. Atul Bansal being the Assistant manager-collections of the complainant company as stated in the power of attorney Ex. CW-1/A, which is duly proved by him, was authorized in his capacity as such manager to sign the present complaint on behalf of the complainant in view of Section GE Capital Services India v. Ajayveer Solanki CC No. 60/11 Judgment dated 22.06.2012 Page 25 of 29 54 of the Companies Act which reads as follows:
"A document or proceeding requiring authentication by a company may be signed by a director, the manager, the secretary or other authorized officer of the company."
It is further contended by her that the designation of the alleged AR of complainant has not been disputed by the accused in his cross examination. In my considered opinion, the aforesaid provision does not empower any assistant manager (collection) to institute any criminal proceedings in the name of a company, unless he is specifically authorized by the complainant company in this behalf by a board resolution/power of attorney. Hence the Second issue is answered in the affirmative.
c) Whether the present complaint is non-maintainable for want of proof of service of mandatory legal notice?
20. It is submitted by Ld. Counsel for the accused in this regard that the present complaint is not maintainable against the accused since the complainant has failed to prove the service of mandatory legal notice within the meaning of proviso (b) to Section 138 of the NI Act upon the accused. According to him, not only the complainant has failed to place on record any GE Capital Services India v. Ajayveer Solanki CC No. 60/11 Judgment dated 22.06.2012 Page 26 of 29 acknowledgment card bearing the signatures of the accused but the address to which the legal notice was allegedly sent by the complainant has been proved to be wrong by the accused by production of his proof of identity such as Election ID Card and Driving License. According to him, admittedly the legal notice has been sent by the complainant to the following address viz. Ajayveer Solanki, WZ-17, Asalarpur, Janak Puri, Delhi-110058 while according to him, the correct address of the accused is Ajayveer Solanki, WZ-17, Asalatpur, Janak Puri, Delhi-110058. On the other hand, it is submitted on behalf of the complainant that the legal notice was sent by the complainant to the same address which was furnished by the accused to the complainant at the time of execution of loan agreement. Moreover, according to him, the accused has appeared before this court in response to the processes directed by this court to the same address to which the legal notice was sent by the complainant, which renders the defence sought to be raised by the accused regarding non service of the legal notice as highly improbable. Besides, according to him, since the accused has failed to make the payment of cheque amount in question within fifteen days from the date of his appearance before the court, the aforesaid defence is not available to GE Capital Services India v. Ajayveer Solanki CC No. 60/11 Judgment dated 22.06.2012 Page 27 of 29 the accused at this stage.
21. I have considered the rival submissions made on behalf of both the parties and have perused the record. On a perusal of both the addresses it is apparent that there is minor difference in both the addresses and that too in the name of village. Whereas according to the accused the name of village is Asalatpur, in the address mentioned in the legal notice the name of village has been mentioned as Asalarpur. In the light of evidence brought on record it is not possible to give a categorical finding to the effect as to which of the aforesaid two addresses is the correct address of the accused since there is no dearth of cases where wrong names/addresses have been mentioned in the voter ID cards issued by Election Commission of India. Still, in my considered opinion, even if the case of accused that correct name of village is Asalatpur instead of Asalarpur, is believed such a minor error in the spelling of name of village does not render the article non serviceable particularly when there is no error in the name of addressee and in the property number. Moreover, it is not the case of either of the parties that the notice was returned with the remarks such as 'address not found' etc. Besides, it is true that the accused has appeared in response to the processes GE Capital Services India v. Ajayveer Solanki CC No. 60/11 Judgment dated 22.06.2012 Page 28 of 29 directed to the same address as has been mentioned in the legal notice. Moreover, since the accused has failed to make the payment of cheque amount within 15 days from the date of his appearance in the court, the aforesaid defence regarding non-service of legal notice on him is not available to him at this stage in view of judgment of Hon'ble Supreme Court in C.C.Alavi Haji's case.
22. To sum up, though I find no substance in the defence sought to be raised by the accused regarding non-maintainability of the present complaint on account of alleged non service of legal notice upon the accused, but in view of my finding on the first two points for determination, the accused is hereby acquitted of charges under Section 138 of the Negotiable Instrument act, in as much as, the consideration for issuance of cheque in question had already been failed as on the date of presentation and the complaint has not been filed by the complainant through duly authorized representative.
23. Ordered Accordingly.
Pronounced in the Open Court on this 22nd day of June 2012. This Judgment consists of 29 signed pages.
(ARUN KUMAR) Metropolitan Magistrate:Dwarka Courts GE Capital Services India v. Ajayveer Solanki CC No. 60/11 Judgment dated 22.06.2012 Page 29 of 29