Delhi District Court
Smt. Ishnaz Sarna vs Classic Vigyapan Pvt. Ltd & on 6 February, 2012
IN THE COURT OF SH. SANJAY JINDAL JSCCcumASCJ (NW) : DISTRICT COURTS : ROHINI : DELHI Unique ID No. : CC No. 1043/09/02 Smt. Ishnaz Sarna Versus Classic Vigyapan Pvt. Ltd & Ors JUDGMENT
a) Name of the complainant : Smt. Ishnaz Sarna
W/o Lt. Col. Pushpender
Singh Sarna R/o :A1/258
Janakpuri, New Delhi
(Through : her attorney
Major TS Chhatwal(Rtd.)
R/o A1/258, Janakpuri,
New Delhi)
b) Name & Address of accused : (1) Classic Vigyapan Pvt.
Ltd., B61, SectorII,
NOIDA201 301 (Through
its Managing Director)
(2) Classic Publication
(Through its Managing
Director)
53C, PocketD, Mayur
Vihar, PhaseIII, Delhi.
(3) Sh. Tejvir Singh Bhatti
R/o:53C,PocketD, Mayur
Vihar, PhaseIII, Delhi.
CC No. 1043/09 Ishnaz Sarna Vs. Classic Vigyapan Etc. 1/14
(4) Shri Inder Malhotra,
A7/15, Rail Vihar, Indra
Puram, Ghaziabad, UP.
c) Offence complained of or proved : 138 NI Act.
d) Plea of the accused : Pleaded not guilty
e) Date of institution of the case : 07.05.2002
f) Date of reserving of Judgment : 06.02.2012
g) Final Judgment : Acquitted
h) Date of such Judgment : 06.02.2012
BRIEF REASONS FOR THE DECISION OF THE CASE :
1 This is a case/complaint U/s 138 of the Negotiable
Instruments Act which was assigned to this Court by Hon'ble High Court vide Order No. 145192/F.3(4)/MM dated 02.01.2009. 2 The brief facts as per the case of the complainant are that the complainant is the owner of the property i.e., Flat No. 53C Pocket D, Mayur Vihar PhaseIII, Delhi. The complainant is locally residing on the given address but since husband of the complainant is living at official accommodation in Rajasthan, the complainant is unable to look after the said property and authorised her father Sh. T.S. Chatwal to look after the same. Further it is stated that the said property was given on licence basis to accused no.1 i.e., Classic Vigyapan Pvt. Ltd. CC No. 1043/09 Ishnaz Sarna Vs. Classic Vigyapan Etc. 2/14 through its partners namely Tejvir Singh Bhati and Inder Malhotra i.e., the accused No.3 & 4 respectively on 12.08.1999. The said agreement was extended up to July 2000 and again up to 11.06.2001. 3 Vide agreementcumundertaking dated 08.02.2000 which was duly signed by accused no.3 & 4 on behalf of accused no.1, the accused persons agreed to vacate the premises latest by 31.03.2002. A cheque No. 011733 dated 02.02.2002 drawn on the account of Accused No.2 i.e., Classic Publication for a sum of Rs. 92,380/ was handed over to the AR of the complainant. It is clarified that accused no.2 is proprietorship concern of accused no. 3.
4 It is further alleged that the said cheque when presented before the bank was dishonoured due to insufficient funds. Legal notice dated 18.04.2002 was served on the accused persons but to no use. Hence this complaint.
5 Vide order dated 09.06.2003, the accused persons were summoned. Notice for the commission of offence U/s 138 Negotiable Instruments Act was served upon them on 24.09.2007 to which they pleaded not guilty and claimed trial.
CC No. 1043/09 Ishnaz Sarna Vs. Classic Vigyapan Etc. 3/14 6 In support of her case, the complainant examined her attorney Sh. T.S. Chatwal as CW1. He led evidence on affidavit testifying the averments of the complaint and proved the agreement dated 12.08.1999 as Ex.CW1/A, letter dated 10.07.2000 Ex.CW1/B, undertaking dated 08.02.2002 as Ex.CW1/C, cheque No. 011733 Ex.CW1/D, return memo Ex.CW1/E, legal notice dated 18.04.2002 Ex.CW1/F, different postal documents Ex.CW1/G to H4, SPA Ex.CW1/J and complaint Ex.CW1/K. 7 Statements of the accused No. 3 & 4 under Section 313 CrPC were recorded on 10.03.2011 and 02.02.2011 respectively wherein all the incriminating evidence and documents on record were put to them. Though the accused persons admitted some of the facts but denied their liability towards the complainant. 9 Accused Tejvir Singh Bhati and one Sh. SP Yadav have been examined in defence as DW1 and DW2 respectively.
10 I have heard the counsel for parties and perused the record. CC No. 1043/09 Ishnaz Sarna Vs. Classic Vigyapan Etc. 4/14 11 It is argued on behalf of the complainant that a case for the offence punishable U/s 138 NI Act has been duly proved on record against the accused persons. It is submitted that the complainant has successfully discharged the initial onus lying on the complainant and the accused persons have failed to rebut the presumptions which are available to the complainant against them as per provisions of NI Act. 12 It is argued on behalf of the accused persons jointly that no case under Section 138 NI Act is made out against them. It is specifically argued that the present case has been filed by father of the complainant in capacity of her special power of attorney holder which was not in existence at the time of issuance of statutory notice. It is alleged that there was no authority available to the father of the complainant for issuance of the statutory notice on the date when the same was issued. It is further argued that the cheque has been admittedly issued from the account of Classic Publication but no notice has been served upon the said Classic Publication. It is further argued that there are several other discrepancies in the case of the complainant and the accused persons are liable to be acquitted. CC No. 1043/09 Ishnaz Sarna Vs. Classic Vigyapan Etc. 5/14 Besides above, separate contentions are also made on behalf of the accused no.3 and 4 to the effect that they are not liable to pay any dues to the complainant and it cannot be said that the cheque was issued for discharge of liability. In support of their contentions, the ld. Counsel for the accused persons have relied upon the judgment of the Hon'ble Bombay High Court in 2006 Cr.L.J 214 and Judgment of Hon'ble Supreme Court in AIR 2005 SC 48.
13 To rebut the arguments advanced on behalf of the accused persons, it is submitted on behalf of the complainant that the father of the complainant who is the SPA holder was dealing with the accused persons since the very inception of the transactions and the accused persons were voluntarily dealing with him. It is further submitted that admittedly no written authority was there in favour of the father of the complainant on the date of issuance of notice but the acts done by him have been duly ratified through SPA dated 07.05.2000 by his daughter as he was acting in the capacity of an agent on behalf of his daughter i.e., the complainant. The other contentions are also controverted.
CC No. 1043/09 Ishnaz Sarna Vs. Classic Vigyapan Etc. 6/14 14 For the purpose of proving a case U/s 138 NI Act, the complainant has to establish following ingredients :
Firstly, that the accused persons issued the cheque in discharge of their legally enforceable liability, Secondly, that the cheque was dishonoured on presentation, Thirdly, that statutory notice was issued ; and Fourthly, that the accused persons failed to make payment despite service of the statutory notice.
15 As far as the first ingredient is concerned, it has been duly proved on record by the evidence led by the complainant that the cheque in question was issued to the complainant by accused no.3 Tejvir Singh Bhati in discharge of liability qua accused no.1 i.e., Classic Vigyapan from the account of his proprietorship concern namely Classic Publication i.e., accused No.2. The facts proved by complainant in this regard are sufficient to discharge the initial onus lying upon the complainant to prove her case qua liability of the accused. Simple denial by accused no.3 is not sufficient to discharge the shifted onus lying upon him. However, as far as accused No.4 Inder Malhotra is concerned, the material available on record is not CC No. 1043/09 Ishnaz Sarna Vs. Classic Vigyapan Etc. 7/14 sufficient to connect him with the offence U/s 138 NI Act. Neither it is established that the cheque issued by him nor that the cheque was handed over to the complainant by him. He has neither signed the cheque nor he is managing partner of the accused No.1. As discussed above, the cheque in question was issued by accused No.3 from the account of accused no.2 which is the sole proprietorship concern of accused no.3.
A reference has been made to the judgment dated 05.03.2011 passed by Sh. Saurabh Kulshreshtha, Ld. CCJ/ARC(East), Karkardooma in Civil Suit No. 586/07 between the same parties, copy of which is available on record wherein accused Tejvir Singh Bhati and Inder Malhotra have been held liable qua the liability which is also subject matter in this case. It has been held by the said Court that both accused No.3 & 4 were acting as partners of M/s Classic Vigyapan while dealing with the complainant herein. Although it is settled law that findings of Civil Court are binding upon criminal Court but it is also admitted fact that abovesaid judgment has not yet attained finality and appeal against the same is still pending before the competent Court. So, even if judicial notice of the said judgment is taken then it can only be said that the cheque in dispute has been CC No. 1043/09 Ishnaz Sarna Vs. Classic Vigyapan Etc. 8/14 issued on behalf of accused No.1 in discharge of legal liability but since the case in hand is a criminal case and nature of proof required in criminal cases is different from Civil cases, the cases qua accused no.3 & 4 can be considered separately and as discussed above, the first ingredient has not been proved qua accused No.4.
16 As far as second and fourth conditions are concerned, there is no dispute that cheque Ex.CW1/D has been dishonoured on presentation and payment has not been so far made by the accused persons despite service of notice. Objection regarding absence of service of notice are baseless particularly in view of the fact that the address on the postal envelope has been admitted to be correct by the accused persons. The accused persons have failed to rebut the presumptions operating against them by virtue of the provisions of the Negotiable Instruments Act. Moreover, the findings of the Civil Court in above mentioned judgment are also against the accused persons in this regard also.
17 The third and most important issue to be considered in the light of the submissions made on behalf of the parties is regarding CC No. 1043/09 Ishnaz Sarna Vs. Classic Vigyapan Etc. 9/14 validity of the statutory notice dated 18.04.2002. It is clear from the record that the alleged transactions were there in the name of complainant Ishnaz Sarna herself. The cheque Ex.CW1/D has also been issued in the name of the complainant only. The statutory notice Ex.CW1/F has been issued on 18.04.2002 to accused no.1, 3 & 4 under the instructions of Major T.S. Chhatwal (Retd.) who is father of the complainant. The documents authorising the father of the complainant in respect of the criminal proceedings U/s 138 NI Act i.e. SPA Ex.CW1/J is dated 07.05.2002. It is admitted fact that no other written authorisation was there in favour of Major T.S. Chhatwal prior to 07.05.2002. The contention of the Ld. Counsel for the complainant is that the father of the complainant had been acting as an agent of his daughter since the very inception of the transactions with the accused persons and the acts done by him prior to 07.05.2002 have been duly ratified by the complainant by way of SPA Ex.CW1/J. He has made a reference to Section 187 of the Indian Contract Act, 1872 and submitted that the acts done by the father of the complainant under her implied authority have been validly ratified by her. 18 The ld. Counsel for the complainant has put reliance on the CC No. 1043/09 Ishnaz Sarna Vs. Classic Vigyapan Etc. 10/14 principle of implied authority and ratification as provided under Indian Contract Act. It is case of the complainant that Major T.S. Chhatwal was having implied authority to act on behalf of the complainant and the acts done by him have been ratified. This theory put forward by the counsel for the complainant is found to be defective on different aspects.
Firstly, the complainant herself was the best person to prove the very fat of implied authority and ratification. CW1 who claims to be SPA of the complainant cannot be taken as competent witness to prove his own authority in absence of any document in this regard prior to 07.05.2002. CW1 is competent witness to prove the facts/ acts in his direct knowledge or done by him but he cannot prove the fact of so called implied authority and ratification. Reliance can be put on on the judment Janki Vashdeo Bhojwani vs. Industrial Bank, AIR 2005 SC 439.
Secondly, the contents of the SPA dated 07.05.2000 i.e., Ex. CW1/J make it clear that it talks about ratification of future acts and not about the past acts done by the SPA holder. The relevant portion of Ex.CW1/J reads as under :
".........I undertake to ratify and confirm all and whatsoever that my said attorney shall lawfully do or cause to be done for CC No. 1043/09 Ishnaz Sarna Vs. Classic Vigyapan Etc. 11/14 me by virtue of power hereby given."
The above words make it clear that there was an undertaking for ratification of the acts to be done by SPA by virtue of SPA and there was no ratification or declaration of ratification qua past acts done before 07.05.2002. The above words are to be considered in the light of complete contents of the SPA and not on the basis of hypothesis/ assumption/ presumption etc. Further, the provisions of the Indian Contract Act itself make it clear that ratification of the acts of agent cannot injure third person. Section 200 of the Indian Contract Act reads as under :
"Section 200. Ratification of unauthorized act cannot injure third person. An act done by one person on behalf of another, without such other person's authority, which, if done with authority would have the effect of subjecting a third person to damages, or of terminating any right or interest of a third person, cannot, by ratification, be made to have such effect."
So, the contention that by virtue of socalled ratification of the acts of SPA holder including issuance of statutory notice Ex.CW1/F, the validity of the notice has been established, holds no water. The complainant cannot bind the accused persons by ratification of the CC No. 1043/09 Ishnaz Sarna Vs. Classic Vigyapan Etc. 12/14 notice issued by her father. Ratification has to be interpreted against the principal and not in his/her favour. The theory of ratification is there in the Contract Act for the benefit of the agent or the third parties but not for the benefit of the principal as argued before me.
Similarly, Section 230 of the Indian Contract Act provides that an agent cannot personally enforce the contracts on behalf of the principal. Section 230 of the Indian Contract Act reads as under :
"230. Agent cannot personally enforce, nor be bound by, contracts on behalf of principal. In the absence of any contract to that effect an agent cannot personally enforce contracts entered into by him on behalf of his principal, nor is he personally bound by them.
Presumption of contract to contrary Such a contract shall be presumed to exit in the following cases : (1) Where the contract is made by an agent for the sale or purchase of goods for a merchant resident abroad;
(2) Where agent does not disclose the name of his principal;
(3) Where the principal, though disclosed, cannot be sued."
So, it is clear that neither Major Chhatwal was authorised to issue statutory notice Ex.CW1/F nor his act of issuance of said notice could validly be ratified against the accused persons. Hence, the notice Ex.CW1/F is bad in law.
19 In view of above discussions, it has become clear that one of CC No. 1043/09 Ishnaz Sarna Vs. Classic Vigyapan Etc. 13/14 the basic ingredients has not been established on record for making the accused persons liable U/s 138 NI Act. It has been proved that the cheque in question was issued by accused no.2 in discharge of legal liability and that the cheque was dishonoured on presentation. It is also established that the payment has not been made by the accused persons despite service of notice but the validity of the notice Ex.CW1/F has not been established and as per above discussions the same is bad in law.
20 Hence, in absence of proof of all the necessary ingredients, it cannot be said that case U/s 138 NI Act has been proved against the accused persons. Accordingly, all the accused persons are acquitted. All the accused persons are on bail. Their bonds stand cancelled. Sureties stand discharged. Original documents, if any be returned to the rightful owner against proper receipt and cancellation of endorsement thereon, if any. The file be consigned to the Record Room.
Announced in the open Court Today on this 6th Day of Februar, 2012.
(SANJAY JINDAL) JSCC/ASCJ (NW): ROHINI :DELHI CC No. 1043/09 Ishnaz Sarna Vs. Classic Vigyapan Etc. 14/14 CC No. 1043/09 Ishnaz Sarna Vs. Classic Vigyapan Etc. 15/14 CC No. 1043/09 Ishnaz Sarna Vs. Classic Vigyapan Etc. 16/14