Delhi District Court
M/S Lyca Finance Ltd. vs Ritesh on 24 January, 2013
IN THE COURT OF SHRI ABHILASH MALHOTRA:METROPOLITAN
MAGISTRATE-06:DWARKA COURTS:NEW DELHI
CC. No. 341/12
Unique Case ID No. : 02405R0741322009
M/s Lyca Finance Ltd.,
Reg. Office :3-E/15,
Jhandewalan Extension, Delhi.
Through is Authorized Representative
Manager Hire Purchase
Sh. Ajay Bhardwaj,
S/o Sh. V.R. Bhardwaj,
R/o J-50, 2nd Floor,
West Patel Nagar, New Delhi.
......... Complainant
VERSUS
Sh. Ritesh,
S/o Sh. Mahavir,
R/o C-198, Budh Nagar,
Inderpuri, New Delhi -12.
....... Accused
Offence complained of or proved : Under Section 138 of
Negotiable Instruments Act, 1881.
Plea of the Accused : Pleaded not guilty
Date of filing : 27.04.2009
Date of Institution : 05.05.2009
Date of reserving judgment/order : 22.01.2013
Final order/Judgment : Accused is acquitted
Date of pronouncement of judgment : 24.01.2013
M/s Lyca Finance Ltd. Vs Ritesh
CC. No. 341/12
Judgment dated 24.01.2013 Page No. 1/10
BRIEF FACTS AND REASONS FOR THE DECISION OF THE CASE:-
1. The present complaint is filed U/s 138 of Negotiable Instruments Act, 1881. Complaint is filed by the complainant through Authorised Representative Sh. Ajay Bhardwaj, Manager of complainant company who has been authorised vide board resolution dated 01.08.2007. It is stated in the complaint that the accused has approached the complainant for purchasing motor cycle bearing number DL 6S V 7982 on Loan cum Hypothecation basis. After considering the proposal of accused, complainant entered into a agreement on 16.03.2005 with the accused. As per the agreement, accused was liable to pay Rs. 57,000/- in 30 installments. The first installment was to be paid on 15.04.2005.
2. Accused failed to adhere the financial discipline. Thereafter, complainant approached the accused for clearing the outstanding amount. On persuasion of the complainant, the accused issued cheque bearing no. 045159 dated 17.02.09 for Rs. 30,650/- drawn on Indian Overseas Bank, Naraina, New Delhi as payment towards existing part liability. The said cheque was dishonored due to reasons 'Funds Insufficient' vide bank memo dated 19.02.2009. Thereafter, complainant issued legal notice dated 13.03.2009. Despite receipt of legal notice accused failed to make payment of cheque amount and the present complaint has been filed.
3. Accused was summoned by order dated 05.05.2009 passed by my Ld. Predecessor. Thereafter, on 26.04.12 notice U/s 251 Cr.PC. was framed and accusation U/s 138 Negotiable Instruments Act, 1881 were explained to the accused. Accused pleaded not guilty and claimed trial. On 28.05.2012 application U/s 145(2) NI Act was allowed and the court directed that the case be further tried as summons trial. In order to discharge his onus the complainant has examined CW1 Sh. Ajay Bhardwaj. He has relied upon documents Ex. CW1/A to Ex. CW1/I. Complaint has also examined M/s Lyca Finance Ltd. Vs Ritesh CC. No. 341/12 Judgment dated 24.01.2013 Page No. 2/10 CW2 Sh. Vachaspati Joshi, Asst. manager from IDBI Bank, Karol Bagh branch, New Delhi. He has brought on record documents Ex. CW2/1 and Ex. CW2/2. The statement of accused U/s 313 Cr.PC. was recorded on 18.10.2012. Accused has brought himself into witness box as DW1. No other witness has been examined by accused in his defence.
4. The documents Ex. CW1/A is Board Resolution dated 01.08.2007, Ex. CW1/B is Vehicle Loan cum Hypothecation Agreement dated 16.02.2005, Ex. CW1/C is cheque in question bearing no. 045159 dated 17.02.09 for Rs. 30,650/- drawn on Indian Overseas Bank, Naraina, New Delhi, Ex. CW1/D is Cheque Return Memo dated 19.02.2009, Ex. CW1/E is legal notice dated 13.03.2009, Ex. CW1/F is postal receipt and Ex. CW1/G is UPC and Ex. CW1/H is Complaint and Ex. CW1/I is statement of account.
5. I have heard the parties and perused the records. Accused has admitted that he has taken a loan from the complainant. It is the case of the accused that he has not received any legal notice and has paid almost the entire loan amount and not liable to pay the cheque amount in question. In its statement U/s 313 Cr.PC. accused has stated that the cheque in question given was a security cheque at the time of availing the finance facility. Accused has also argued that cheque bears his signature only and the other particulars are not filled by him. Accused has disputed the bank memo Ex CW1/D being unsigned. It is also argued that complainant is not licensed for doing finance business.
6. Accused in his statement U/s 313 Cr.PC. has stated that the cheque in question was a security cheque. He has reiterated this defense in his examination in chief recorded on 08.11.12. However in his cross examination he has admitted that he has not issued any security cheque to the complainant. The statement of accused M/s Lyca Finance Ltd. Vs Ritesh CC. No. 341/12 Judgment dated 24.01.2013 Page No. 3/10 regarding number of cheques issued to complainant is also consistent. In cross examination of CW1 it was suggested that accused issued 32 cheque, but later in examination chief DW1/accused stated that he has issued 30 cheques. Further in cross examination DW1 stated that he has issued 25 cheques. Apart from the contradiction in the testimony of the accused he has also failed to lead any positive evidence to show that the cheque in question was a security cheque. In this regard reference can be made to the judgment passed by Hon'ble High Court of Delhi in the case of V.S.Yadav vs Reena, Crl. A. NO.1136 of 2010 wherein it was held that:
"7. The respondent has placed reliance on Krishna Janardhan Bhat v. Dattatraya G. Hegde, 2008 Crl. L.J. 1172, which is also the case relied upon by the Trial Court. In this judgment itself Hon'ble Supreme Court has specifically observed that Court should not be blind to the ground realities and the rebuttal of presumption under Section 139 of N.I. Act would largely depend upon the factual matrix of each case. The Trial Court in this case Crl. A. No. 1136 of 2010 Page 5 of 7 turned a blind eye to the fact that every accused facing trial, whether under Section 138 of N.I. Act or under any penal law, when charged with the offence, pleads not guilty and takes a stand that he has not committed the offence. Even in the cases where loan is taken from a bank and the cheques issued to the bank stand dishonoured, the stand taken is same. Mere pleading not guilty and stating that the cheques were issued as security, would not give amount to rebutting the presumption raised under Section 139 of N.I. Act. If mere statement under Section 313 Cr. P.C. or under Section 281 Cr. P.C. of accused of pleading not guilty was sufficient to rebut the entire evidence produced by the complainant/ prosecution, then every accused has to be acquitted. But, it is not the law. In order to rebut the presumption under Section 139 of N.I. Act, the accused, by cogent evidence, has to prove the circumstance under which cheques were issued. It was for the accused to prove if no loan was taken why he did not write a letter to the complainant for return of the cheque. Unless the accused had proved that he acted like a normal businessman/prudent person entering into a contract he could not have rebutted the presumption u/s 139 N.I. Act. If no loan was given, but cheques were retained, he immediately would have protested and asked the cheques to be returned and if still cheques were not returned, he would have served a notice as complainant. Nothing was proved in this case.
7. Accused has also contended that complainant has failed to prove that it has licence of dealing in finance business. I am afraid the said contention of the accused is M/s Lyca Finance Ltd. Vs Ritesh CC. No. 341/12 Judgment dated 24.01.2013 Page No. 4/10 without any force because the complainant has filed on record copy of NBFC certificate issued by Reserve Bank of India which shows that complainant is duly authorized to carry on NBFC business as per the license.
8. Accused has also denied receipt of legal notice. In his cross examination DW1/accused has admitted that the address written on legal notice Ex. CW1/E is his correct address and he has received summons from the court at the same address. It clear that complainant has sent legal notice Ex. CW1/E by pre paid post Ex. CW1/F and Ex. CW1/G at the correct address of the accused. Therefore the presumption under Section 27 General Clause Act, 1897 arises in favour of delivery of legal notice and the contention that the accused has not received any legal notice does not lie. The contention also does not find any force in view of judgment passed by Hon'ble Supreme Court of India in C.C. Alavi Haji vs Palapetty Muhammed & Anr, (2007) 6 SCC 555 wherein it was held that :
"17. It is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of Criminal Law, where there is no stipulation of giving of a notice before filing a complaint. Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the Court along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the G.C. Act and Section 114 of the Evidence Act. In our view, any other interpretation of the proviso would defeat the very object of the legislation. As observed in Bhaskarans case (supra), if the giving of notice in the context of Clause (b) of the proviso was the same as the receipt of notice a trickster cheque drawer would get the premium to avoid receiving the notice by adopting different strategies and escape from legal consequences of Section 138 of the Act."
M/s Lyca Finance Ltd. Vs Ritesh CC. No. 341/12 Judgment dated 24.01.2013 Page No. 5/10
9. It is argued by the accused that none of the particulars except signatures on the cheque are filled by the accused. The said arguments also do not find any force in view of judgment passed by Hon'ble High Court of Delhi in case of Ravi Chopra vs State And Anr, 2008 (102) DRJ 147. The relevant portion is reproduced below:-
"18. Section 20 NI Act talks of "inchoate stamped instruments"
and states that if a person signs and delivers a paper stamped in accordance with the law and "either wholly blank or have written thereon an incomplete negotiable instrument" such person thereby gives prima facie authority to the holder thereof "to make or complete as the case may be upon it, a negotiable instrument for any amount specified therein and not exceeding the amount covered by the stamp." Section 49 permits the holder of a negotiable instrument endorsed in blank to fill up the said instrument "by writing upon the endorsement, a direction to pay any other person as endorsee and to complete the endorsement into a blank cheque, it makes it clear that by doing that the holder does not thereby incurred the responsibility of an endorser." Likewise Section 86 states that where the holder acquiesces in a qualified acceptance, or one limited to part of the sum mentioned in the bill, or which substitutes a different place or time for payment, or which, where the drawees are not partners, is not signed by all the drawees, all previous parties whose consent has not been obtained to such acceptance would stand discharged as against the holder and those claiming under him, unless on notice given by the holder they assent to such acceptance. Section 125 NI Act permits the holder of an uncrossed cheque to cross it and that would not render the cheque invalid for the purposes of presentation for payment. These provisions indicate that under the scheme of the NI Act an incomplete cheque which is subsequently filled up as to the name, date and amount is not rendered void only because it was so done after the cheque was signed and delivered to the holder in due course.
20.A collective reading of the above provisions shows that even under the scheme of the NI Act it is possible for the drawer of a cheque to give a blank cheque signed by him to the payee and consent either impliedly or expressly to the said cheque being filled up at a subsequent point in time and presented for payment by the drawee. There is no provision in the NI Act which either defines the difference in the handwriting or the ink pertaining to the material particulars filled up in comparison with the signature thereon as constituting a 'material alteration' for the purposes of Section 87 NI Act. What however is essential is that the cheque must have been signed by the drawer. If the signature is altered or does not tally with the normal signature of the maker, that would be a material alteration. Therefore as long as the cheque has been signed by the drawer, the fact that the ink in M/s Lyca Finance Ltd. Vs Ritesh CC. No. 341/12 Judgment dated 24.01.2013 Page No. 6/10 which the name and figures are written or the date is filled up is different from the ink of the signature is not a material alteration for the purposes of Section 87 NI Act."
10. In M/S The Jammu & Kashmir Bank vs Abhishek Mittal, Crl. A. No. 294/2011, Hon'ble High Court of Delhi held that:
"6. In this case, issuance of cheque, its presentation and dishonorment are not in dispute, inasmuch as, the same has been duly proved on the basis of cogent evidence. In his statement under Section 313 Cr.P.C., respondent has admitted having handed over the cheques to Shri Jitender Sharma with whom he has alleged that he was having friendly relations. It may be noted here that Shri Jitender Sharma was Branch Manager of the appellant. The plea taken by the respondent that the blank cheques had been given by him is of no consequence. Respondent has admitted his signatures on the cheques. There is no law that a person drawing the cheque has to necessarily fill it up in his own handwriting. Respondent has not denied his signatures on the cheques. Once he has admitted his signatures on the cheques he cannot escape his liability on the ground that the same has not been filled in by him. When a blank cheque is signed and handed over, it means that the person signing it has given implied authority to the holder of the cheque, to fill up the blank which he has left. A person issuing a blank cheque is supposed to understand the consequences of doing so. He cannot escape his liability only on the ground that blank cheque had been issued by him. As regards handing over of the cheques to the appellant is concerned, same is not in dispute since respondent has admitted that he had handed over the cheques to Shri Jitender Sharma, who happens to be Branch Manager of the appellant at the relevant time. Cheques had been drawn in favour of "J & K Bank Ltd. A/c Akansha Machine Tools". This shows that cheques had been issued to discharge liability of the said firm."
In present case, signature on cheque are not disputed by the accused, therefore, the controversy as to filing other particulars of cheque do not lie. Moreover, accused has failed to lead any evidence to show that there is any kind of material alteration in the cheque.
11. Accused has also controverted the Bank Memo Ex CW 1/D on the ground that it is unsigned. This objection do not lie in view of Section 146 of NI Act, 1881. Moreover M/s Lyca Finance Ltd. Vs Ritesh CC. No. 341/12 Judgment dated 24.01.2013 Page No. 7/10 CW 2 in his testimony has clearly stated that cheque Ex Cw 1/C was dishonored due to insufficient funds and bank memo Ex CW 1/D is issued by their bank. CW 2 has also filed documents Ex CW2/1 and Ex CW 2/2 in support thereof. Accused has also contended that as per CW 1 the cheque was presented in their collecting bank i.e. 'United Western Bank' but the memo CW 1/D is issued by IDBI bank. However CW2 has clarified that 'United Western Bank' was acquired by IDBI bank and accordingly the bank memo is issued by IDBI bank.
12. Counsel for the accused has vehemently argued that accused is not liable to pay amount of cheque in question and has already paid substantial sum of payment. It is well settled principle that for attracting provision U/s 138 NI Act the cheque must have been issued for discharge of whole or part of any debt or other liability. In other words there has to be legally enforceable liability equivalent to the cheque amount or more than that on the relevant date. Complainant has filed on record loan agreement Ex. CW1/B which shows that the loan amount financed to the accused was Rs. 42,600/-. The interest amount agreed was Rs. 14,400/- and the total aggregate amount payable was Rs. 57,000/-. CW1 in his cross examination has admitted that the accused has already paid a sum of Rs. 40,000/- approx to the complainant. Complainant has filed on record statement of account Ex. CW1/I to prove liability of accused on the relevant date of cheque i.e. 17.02.2009. Perusal of said statement shows that on 16.02.2009 the outstanding balance was Rs. 17,100/- and the outstanding overdue charges were Rs. 12,451.48/-. The aggregate of both of these figures comes to Rs. 29,551.48/- which is less than the cheque amount. In Angu Parameswari Textiles (P) Ltd vs Sri Rajam & Co, 2001 (105) Comp Cases 105 Hon'ble High Court of Madras held that:
"4. Section 138 of the Negotiable Instruments Act reads that where any cheque was drawn for payment of any amount of money for the discharge in whole or any part of any debt or other liability and the same is dishonoured by the Bank, the person who drew the cheque shall be punishable. Therefore, the cheque drawn should be towards M/s Lyca Finance Ltd. Vs Ritesh CC. No. 341/12 Judgment dated 24.01.2013 Page No. 8/10 the discharge of either the whole debt or part of the debt. If the cheque is more than the amount of the debt due, I am afraid, Section 138 cannot be attracted. This is a case where the cheque amount was more than the amount due on the date when the cheque was presented. The presentation of the cheque and subsequent dishonour alone raises a cause of action. When the cheque cannot be said to be drawn towards the discharge of either the whole or part of any debt or liability, Section 138 is not attracted. On this sole ground, the complaint is liable to be quashed and is accordingly quashed."
13. The Hon'ble High Court of Delhi in M/S Alliance Infrastructure Project Pvt. Ltd. vs Vinay Mittal, Crl.M.C. No.2224/2009 held that:
"8. The question which comes up for consideration is as to what the expression "amount of money" means in a case where the admitted liability of the drawer of the cheque gets reduced, on account of part payment made by him, after issuing but before presentation of cheque in question. No doubt, the expression "amount of money".
would mean the amount of the cheque alone in case the amount payable by the drawer, on the date of presentation of the cheque, is more than the amount of the cheque. But, can it be said the expression "amount of money". would always mean the amount of the cheque, even if the actual liability of the drawer of the cheque has got reduced on account of some payment made by him towards discharge of the debt or liability in consideration of which cheque in question was issued. If it is held that the expression "amount of money" would necessarily mean the amount of cheque in every case, the drawer of the cheque would be required to make arrangement for more than the admitted amount payable by him to the payee of the cheque. In case he is not able to make arrangement for the whole of the amount of the cheque, he would be guilty of the offence punishable under Section 138 of Negotiable Instruments Act. Obviously this could not have been the intention of the legislature to make a person liable to punishment even if he has made arrangements necessary for payment of the amount which is actually payable by him. If the drawer of the cheque is made to pay more than the amount actually payable by him, the inevitable result would be that he will have to chase the payee of the cheque to recover the excess amount paid by him. Therefore, I find it difficult to take the view that even if the admitted liability of the drawer of the cheque has got reduced, on account of certain payments made after issue of cheque, the payee would nevertheless be entitled to present the cheque for the whole of the amount, to the banker of the drawer, for encashment and in case such a cheque is dishonoured for wants of funds, he will be guilty of offence punishable under Section 138 of Negotiable Instrument Act."
M/s Lyca Finance Ltd. Vs Ritesh CC. No. 341/12 Judgment dated 24.01.2013 Page No. 9/10
14. Though accused has failed to prove his case on contentions like security cheque, non- Receipt of legal Notice, disputed particulars on cheque, faulty Bank Memo etc. But the fact that liability of accused (if any) on the relevant date was less than the cheque amount goes to the root of matter. From the documents filed by the complainant on record, it is clear that the liability (if any) of accused on the date of cheque was less than Rs. 30,650/- i.e. the cheque amount. This fact also gets fortified by the admission of CW1 that accused has already paid a sum of around Rs 40,000/- to the complainant. Therefore in view of decision in the case of Angu Parameswari (supra) and M/S Alliance Infrastructure Project Pvt. Ltd. (supra) the offense U/s !38 Negotiable Instruments Act, 1881 is not made out in present case. Accused is acquitted and set at liberty.
Announced in the open (ABHILASH MALHOTRA)
court on 24.01.2013 MM-06/Dwarka Courts,
New Delhi/24.01.2013
M/s Lyca Finance Ltd. Vs Ritesh
CC. No. 341/12
Judgment dated 24.01.2013 Page No. 10/10