Delhi District Court
Hon'Ble Supreme Court In M.M.T.C Ltd. & ... vs . Medchl on 29 January, 2011
IN THE COURT OF MS. NITI PHUTELA
METROPOLITAN MAGISTRATE, DWARKA COURTS, NEW DELHI
BARCLAYS BANK V. SANJAY KUMAR BHUTANI
CC NO. : 18826/09
P.S. : H. Nizamuddin
U/s : 138 Negotiable Instruments Act
J U D G M E N T
(Under Section 255 CrPC) 1 Date of the commission of offence : 20/05/09 approx.
2 Name & address of the : Barclays Bank through A.R.
Complainant Sh. Ankush Gupta
Eros Corporate Tower
Nehru Place, Delhi 19
3 Name of the accused
and address : SANJAY KUMAR BHUTANI
S/o Sh. Man Singh Bhutani
R/o B22, Doctor Gidwani Rd.
Adarsh Nagar, Delhi 110033
4 Offence complained of : u/s 138 Negotiable Instruments Act
5 Plea of accused : Pleaded not guilty
6 Final order : Convicted
7 Date of such order : 29/01/11
Date of Institution of case : 10/06/2009
Date of decision of the case : 29/01/2011
Case No. : 18826/09 Page No. 1 of 17
BRIEF FACTS AND REASONS FOR DECISION OF THE CASE
1. Vide present judgment I shall decide the complaint case U/s 138 Negotiable Instrument Act 1881 (as amended upto date) filed by the complainant Barclays Bank, through Authorised representative Sh. Ankush Gupta against the accused Sanjay Kumar s/o Sh. Man Singh Bhutani.
2. The brief sketch of the case in hand is that the accused approached the complainant bank for availing a loan. The case portrayed by the complainant is that the accused in discharge of his liability had issued a cheque bearing number 750577 drawn on ABN Amro Bank N.V. Hansalaya, Barakhamba Road, New Delhi dated 04/04/09 amounting to Rs. 47,202 in favour of the complainant. However, on presentation of the same the cheque got dishonoured for the reasons "Funds Insufficient". The complainant thereafter sent a legal notice of demand to the accused which was sent by speed post, calling him to make the payment within 15 days of the receipt of the notice failing which an offence punishable U/s 138 Negotiable Instruments Act is deemed to have been committed. As a result of which the complainant has filed the instant complaint for prosecution of Case No. : 18826/09 Page No. 2 of 17 the accused U/s 138 Negotiable Instrument Act.
3. After the complaint was filed, the Authorized Representative (AR) of the complainant led his presummoning evidence by way of an affidavit and thereafter hearing the counsel for the complainant and considering the entire material and documents on record, summons were issued against the accused vide order dated 02/07/09 for the offence U/s 138 Negotiable Instrument Act 1881. On appearance of the accused a separate notice U/s 251 Cr.P.C. dated 05/05/10 was given to the accused to which he pleaded not guilty and claimed trial. Complainant Evidence
4. On 02/06/10 Sh. Ankush Gupta, AR of the complainant got himself examined as CW1 and reiterated the contents of the complaint on oath before this court and filed an affidavit in evidence which is Ex. CW 1/1. He got exhibited copy of POA Ex. CW1/A in his favour, original cheque Ex. CW1/B bearing number 750577 drawn on ABN Amro Bank N.V., New Delhi dated 04/04/09 amounting to Rs. 47,202 in favour of the complainant, cheque returning memo Ex. CW1/C dated Case No. : 18826/09 Page No. 3 of 17 11/04/09, legal notice of demand Ex. CW1/D dated 29/04/09, speed post receipt Ex. CW1/E dated 01/05/09. He was crossexamined by Sh. K.N. Popli, Counsel for the accused. In his cross the A.R. he admitted that he was authorised by Sh. Ramanathan Gopalkrishnan, Manager (Operations) who was posted in Mumbai to represent the complainant in the present case. It was also admitted by the A.R. that Sh. Ramanathan Gopalkrishanan was authorised to appoint attorneys on behalf of the complainant. It was further stated by the A.R. that he had not brought the original POA but he can bring the same. He even admitted that his signature does not appear for "acceptance" of the POA i.e. Ex. CW1/A. It was stated by the witness that though he had not brought the loan agreement executed between the parties but he can file the same on record. On the same day vide separate statement of the A.R. of the complainant C.E. was closed. Matter was fixed for statement of accused U/s 313 CrPC.
Statement of accused U/s 313 CrPC
5. Complainant evidence was followed by the statement of accused u/s 313 Cr.P.C. in which all the incriminating evidence along with exhibited documents were put to the accused Sanjay Case No. : 18826/09 Page No. 4 of 17 Kumar Bhutani in which he admitted that the loan was granted to him and he had issued the cheque in question as security cheque along with six other cheques and on all the cheques it was written by him " not to exceed Rs. 1,38,300/". He stated that he had not received any legal demand notice. He further admitted that till that date he had not made any payment towards the dishonoured cheques because as per him there was no liability against him to make such payment. He further denied that there is no liability of the cheque in question against him.
Defence Evidence
6. Thereafter, the case was listed for defence evidence on 03/07/10. An application U/s 315 CrPC was moved on behalf of the accused to get himself examined and the same was allowed. After that accused absented himself and bailable warrants were issued against him. Thereafter the warrants were cancelled against him and the accused submitted that he does not want to lead any defence evidence and the defence evidence was closed on the statement of the accused. The case was listed for final arguments.
Case No. : 18826/09 Page No. 5 of 17 Arguments
7. Final arguments were addressed by both the parties on 20/12/10. I have heard Ld. counsels and perused the entire record of the case file and the evidence on record. In order to bring home the conviction of the accused, the complainant has to show not only unbroken chain of events leading to commission of actual offence on record but also the ingredients of the offence complained of.
8. Before proceeding further let us go through the relevant provisions of law. The main ingredient of Section 138 of the Negotiable Instruments Act are as follows:
(a) The accused issued a cheque on an account maintained by him with a bank.
(b) The said cheque has been issued in discharge of any legal debt or other liability.
(c) The cheque has been presented to the bank within the period of six months from the date of the cheque or within the period of its validity.
(d) When the aforesaid cheque was presented for encashment, the same was returned unpaid/dishonoured.
(e) The Payee of the cheque issued a legal notice of demand within 30 days from the receipt of information by him from the Bank regarding the Case No. : 18826/09 Page No. 6 of 17 return of the cheque
(f) The Drawer of the cheque failed to make the payment within 15 days of the receipt of the aforesaid legal notice of demand.
If the aforesaid ingredients are satisfied then the drawer of the cheque shall be deemed to have committed an offence punishable u/s 138 Negotiable Instruments Act. Appreciation of Facts, Evidence and Arguments
9. First limb of arguments advanced by the Ld. Counsel for the accused is that the A.R. in the present case was not duly authorised by the complainant and the power of attorney issued in his favour is also not properly executed. It was further argued that no Board Resolution has been filed by the complainant to show the authority of the person who had further authorised the A.R. to represent the complainant in the present case. The complainant has relied on the judgment of Hon'ble Supreme Court in M.M.T.C Ltd. & Anr. vs. Medchl Chemicals & Pharma Pvt. Ltd. & Anr. AIR 2002 Supreme Court 182 and also on Associated Cement Company Ltd. v. Keshavanand AIR 1998 Supreme Court 596 in which Hon'ble Case No. : 18826/09 Page No. 7 of 17 Supreme Court in Para No. 12 had referred that :
"In the case of Associated Cement Co. Ltd. v. Keshvanand reported in (1998) 1 SCC 687, it has been held by this Court that the complainant has to be a corporeal person who is capable of making a physical appearance in the court. It has been held that if a complaint is made in the name of a incorporeal person (like a company or corporation) it is necessary that a natural person represents such juristic person in the court. It is held that the court looks upon the natural person to be the complainant for all practical purposes. It is held that when the complainant is a body corporate it is the de jure complainant, and it must necessarily associate a human being as de facto complaint to represent the former in court proceedings. It has further been held that no Magistrate shall insist that the particular person, whose statement was taken on oath at the first instance, alone can continue to represent the company till the end of the proceedings. It has been held that there may be occasions when different persons can represent the company. It has been held that it is open to the de jure complainant company to seek permission of the court for sending any other person to represent the company in the court. Thus, even presuming, that initially there was no authority, still the Company can, at any stage, rectify that defect. At a subsequent stage the Company can send a person who is competent to represent the company. The complaints could thus not have been quashed on this ground".
On this ground it is argued by Ld. Counsel for the accused that the present judgment relates to the case where Case No. : 18826/09 Page No. 8 of 17 accused has gone to the Hon'ble High Court for quashing of the complaint against him on the ground that the person representing the company was not duly authorised but in the present case in hand which is at very advanced stage, the defect had still not been cured by filing any Board resolution or Minutes of the Meeting to show the authority of the person representing the company. On the other hand the said argument of the Counsel for the accused had been controverted by the counsel for the complainant on the ground that A.R. has already been substituted in the present case and Sh. Vaibhav Dubey was appointed as A.R. in the present case. It is argued by the counsel for the complainant that as per Section 85 Indian Evidence Act there is presumption of law as to the power of attorney. For reference Section 85 is reproduced as follows :
"Section 85 Presumption as to Powers of attorney - The Court shall presume that every document purporting to be a powerofattorney, and to have been executed before, and authenticated by, a Notary Public, or any Court, Judge, Magistrate, ((Indian) Consul or ViceConsul, or representative of the Central Government) was so executed and authenticated".
In view of the above judgment of the Hon'ble Supreme Court and also the presumption Under Section 85 Indian Evidence Act that the power of attorney was duly executed this Case No. : 18826/09 Page No. 9 of 17 court is of the considered view that A.R. was duly authorised to depose on behalf of the complainant. The argument that of the Ld. Counsel for the accused that no board resolution or minutes of the meeting by which the A.R. was authorised to represent the complainant bank is filed does not in any way rebut the presumption against the accused U/s 139 N.I. Act. Therefore, this argument of the Ld. Counsel for the accused does not hold any strength.
10. Second limb of arguments advanced by Ld. Counsel for the accused is that the accused for signing and filling in the amount and date is in blue colour and the ink used for filling up the name of the payee is in black. This fact is though admitted by the A.R. of the complainant in his crossexamination but it was argued by the Ld. Counsel for the complainant in his argument as per Section 20 of N.I. Act the cheque is an inchoate instrument and there is no requirement of the stamping in the cheque like promissory notes. This argument of the Ld. Counsel for the complainant holds force and the argument by the Ld. Counsel for the accused is not acceptable. This can be clarified by referring to the judgment of Hon'ble Delhi High Court in case titled as Ravi Chopra v. State & Anr. 2008 (102) DRJ 147 Para No 18 - 20 are as follows :
"18. Section 20 NI Act talks of "inchoate stamped Case No. : 18826/09 Page No. 10 of 17 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.
19. The above provisions have to be read together with Section 118 NI Act which sets out various presumptions as to negotiable instruments. The presumption is of consideration, as to date, as to time of acceptance, as to transfer, as to endorsement, as to stamp. The only Case No. : 18826/09 Page No. 11 of 17 exception to this is provided in proviso to Section 118 ............"
"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 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."
11. From the aforesaid, it is amply clear that to fasten the liability upon the accused U/s 138 of the N.I. Act. it is not necessary that body of the cheque must be filled by the accused only. What is important if the signatures on the cheque which in the present complaint case are admitted by the accused hence this argument of Ld. Counsel for the accused that cheque is filled in different ink holds no force.
12. Third limb of argument advanced by the accused in his Case No. : 18826/09 Page No. 12 of 17 arguments and also in his statement of accused U/s 313 CrPC is that legal demand notice as envisaged by Proviso to Section 138 of the Act has not received by the accused which is a sine qua non for prosecution of the complaint U/s 138 of the Act. This argument for the Ld. Counsel for the accused does not hold force because as per the provisions of Section 27 of the General Clauses Act that if a letter which is properly addressed is sent by post they shall be deemed presumption that the letter would have been delivered in the ordinary course. For reference Section 27 of the General Clauses Act is reproduced as follows :
"Section 27 - Meaning of Service by post : Where any Central Act or Regulation made after the commencement of this Act authorises or requires any document to be served by post, whether the expression "serve" or either of the expressions "give" or "send" or any other expression is used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing, prepay and posting by registered post, a letter containing the document and unless the contrary is proved, to have been affected at the time at which the letter would be delivered in the ordinary course of post"
The Supreme Court in K. Bhaskaran Vs. Sankaran Vaidhyan Balan" AIR 1999 Supreme Court 3762 wherein it has been held as under :
(24) No doubt Section 138 of the Act does not require that Case No. : 18826/09 Page No. 13 of 17 the notice should be given only by "post". Nonetheless the principle incorporated in Section 27 (qouted above) can profitably be imported in a case where the sender has dispatched the notice by post with the correct address written on it. Then it can be deemed to have been served on the sendee unless he proved that it was not really served and that he was not responsible for such non service. Any other interpretation can lead to a very tenuous position as the drawer of the cheque who is liable to pay the amount would resort to the strategy of subterfuge by successfully avoiding the notice"
13. Therefore, it is quite clear from Section 27 of General Clauses Act and catena of judgments that deemed service of notice is presumed in the above facts of the case therefore the contention of Ld. Counsel for the accused that notice was not served falls face down.
14. Final limb of arguments advanced by Ld. Counsel for the accused is that no loan agreement or statement of account has been filed by the complainant to show the liability of the accused to the tune of cheque in question. This fact is admitted by the A.R. of the complainant in his crossexamination that though he had not filed any document to show the liability of the accused he can file the same. It is pertinent to mention here that in view of the answer of the witness to the question of Case No. : 18826/09 Page No. 14 of 17 accused in relation to any document there was an opportunity to the accused to either defer the crossexamination on the point that further cross will be conducted only if the above said document are filed by the complainant or he could have cross examined and would have applied to the court for calling the above said documents. But neither of the modes were adopted by the accused to rebut the presumption U/s 139 N.I. Act. to show that there was no legally enforceable liability against the accused. Therefore, merely by giving hollow arguments the presumption in favour of the complainant does not stands rebutted.
15. It was further argued by the counsel for the accused that it was admitted by the A.R. for the complainant that mode of repayment of the loan was through ECS and whenever the mode is through ECS no cheques are issued for the payment of EMI's, therefore the present cheque is not issued against any liability and is a security cheque. The above said arguments of Ld. Counsel for the accused though appears to be valid but again the same is not of any help to the accused because this in no way disprove the fact that the cheque in question was not issued for the payment of a installment amount. Even though Case No. : 18826/09 Page No. 15 of 17 the mode of the repayment was through ECS but nowhere the stand has been taken by the accused that he never paid the installments through cheque. The general analogy which is inferred from the statement of the A.R. cannot be applied in particular to the present case. Hence, the accused had failed to rebut the presumption that the cheque in question i.e. Ex. CW1/B was not issued for the payment of the loan amount and the same is not legally enforceable.
Decision and reasoning
16. In view of the above discussion it is evident that the basic ingredients of the offence U/s 138 Negotiable Instruments Act have been made out and accused has failed to rebut the presumption U/s 118 & 139 of the Negotiable Instruments Act. Thus the complainant is able to establish that the accused issued cheque Ex. CW1/B in discharge of the abovesaid liability and on presentation of the cheques the same got dishonoured with remarks 'funds insufficient" and thereupon legal demand notice was sent to the accused calling upon him to make the payment of the cheque in question which was deemed to be served on the accused. Case No. : 18826/09 Page No. 16 of 17 But the accused failed to make any payment towards the cheque in question or to reply to the legal demand notice.
17. Therefore, offence U/s 138 Negotiable Instruments Act stands proved against the accused. The accused therefore stands convicted for the above said offence.
Let the convict be heard on the point of sentence. Copy of the judgment be given to the convict free of cost.
Announced in the open court
today i.e. 29/01/11 (NITI PHUTELA)
MM: DWARKA
Case No. : 18826/09 Page No. 17 of 17