Delhi District Court
Learning Quest Pvt. Ltd vs . M/S. Tera Construction Pvt. Ltd 2007 ... on 5 November, 2011
IN THE COURT OF MS. SUSHEEL BALA DAGAR,
METROPOLITAN MAGISTRATE, DWARKA COURTS, DELHI
Unique Identification No. RO528542009
CC No. :11768/09
PS :Connaught Place
U/s 138 N I Act
Axis Bank Ltd. (Formerly known as UTI Bank Ltd.)
at Trishul, 3rd Floor,
Law Garden , Ellisbridge,
Ahmedabad-3800009
Also At:-
Having its branch office at:
4/6B, Asaf Ali Road, New Delhi ........... Complainant
Versus
Ravinder Kumar Jain
R/o- 9/1954, Gali No.-2, Kailash Nagar
Near Gandhi Nagar, New Delhi- 110 031
Also At:-
Official Address:
Proprietor - Rajnish Paper Products
9/1877, Gali No. -2, Kailash Nagar
New Delhi - 110 031 .........Accused
Date of Institution : 5th May, 2009
Plea of accused : Pleaded not guilty
Date on which judgment was reserved : 27th September, 2011
Final Order : Convicted
Date of decision : 5th November, 2011
JUDGMENT:
1. The complainant version is that the accused was provided loan CC No. :11768/09 Axis Bank v. Ravinder Kr Jain 1/13 facility by the complainant vide Personal Loan Agreement no. 245010601300387 for a sum of Rs. 6,40,000/. The said loan was payable in equal monthly installments. The accused had issued 2 Post Dated cheques bearing no. 877615 & 877616, dt. 20.09.2008 & 20.10.2008 drawn on Central Bank of India, Delhi in favour of complainant for an amount of Rs. 20,029/ each towards discharge of legally enforceable debt and/or liability arising out of the above mentioned loan agreement. The said cheques were returned unpaid with the remarks "funds insufficient"
vide return memo dt. 10.02.2009. The complainant issued a legal demand notice dt. 12.03.2009 to the accused and the same was duly served upon the accused. Accused did not pay the cheque amount within statutory period, hence, complainant has filed this case.
2. The complainant led pre summoning evidence by way of affidavit and summons were issued against the accused vide order dt. 07.07.2009 for the offence under Section 138 Negotiable Instrument Act, 1881(hereinafter known as the 'Act'). On appearance of the accused notice under Section 251 Cr.P.C. dt. 15.04.2010 was served upon the accused for committing offence under Section 138 of the Act to which he pleaded not guilty and claimed trial.
CC No. :11768/09 Axis Bank v. Ravinder Kr Jain 2/13
3. In order to prove its case the authorized representative of the complainant got himself examined as CW1 and reiterated the contents of the complaint on oath before the Court and filed an affidavit in evidence which is Ex. CW1/14. He exhibited certificate of incorporation as Exhibit CW 1/1, Power of Attorney in his favour whereby he was authorized to file the complaint and depose in Court as Exhibit CW1/2, Cheques in question as Exhibit CW1/3 & CW1/4, Cheque returning memo as Exhibit CW1/5 & CW1/6, Legal notice of demand as Ex. CW1/7 and Postal Receipt of U. P. C and A. D. Card as Exhibits CW1/8 to CW1/12 (colly).
4. The statement of accused was recorded under Section 313 Cr.P.C in which all the incriminating evidence was put to the accused, Ravinder Kumar Jain. In reply to the said incriminating evidence the accused submitted that the cheques in question were given blank signed to the complainant for security purpose before the disbursement of loan. These cheques were presented in the bank without his consent or knowledge. He had not received any legal notice. He had no legal liability against the cheques in question as these were security cheques. The complainant had misused the above said cheques to extort money.
CC No. :11768/09 Axis Bank v. Ravinder Kr Jain 3/13
5. In his defence, the accused has examined himself as DW1 and reiterated his statement u/s 313 CrPC on oath. He admitted to have taken a loan from the complainant but the amount disbursed to him was not the total loan amount sanctioned. He had applied for a loan of Rs. 6,40,000/ but disbursed an amount of Rs. 2,13,000/only by way of cheque. Other two cheques for an amount of Rs, 1,44,700 and Rs. 2,77,900/ were given to ICICI Bank and not to him. He was told that the cheques in question were for verification of account and for verification of the address. The cheques were given blank signed in Hindi as the accused does not know how to write in English. He did not fill the details on the cheques in question and he was not informed before presenting the same. No telephonic intimation neither any written information was given. No loan recall notice was ever given to him. The bank officials have settled the loan with him and informed that the security cheques shall be returned to him. He does not have any liability as on date to the complainant. Defence evidence was closed and the matter was listed for final arguments.
6. I have heard Sh. Deepak Gupta, Ld. Counsel for the accused and Sh. Rishikesh Kumar, Ld. Counsel for the complainant. Counsel for the CC No. :11768/09 Axis Bank v. Ravinder Kr Jain 4/13 complainant has relied on the judgment of Shiva Kumar v. Natarajan 2009 (2) DCR 262 SC to argue that the accused has already made a statement to settle the dispute and later on denied to make the payments. This clearly shows that he has accepted his liability. Counsel for the accused has relied on the judgments M. M. T. C. Ltd. v. Mrs. Sampooranam 2007 (1) DCR 525 and argued that there is no written agreement between the parties, no loan recall notice is placed on record, the AR of the complainant is not authorized to initiate criminal proceedings as no date of execution of Power of Attorney is mentioned. Moreover, it is argued that the power of attorney is not notarised. Further, it is argued that legal demand notice was not sent within the period of 30 days. So there is no proper delivery of the legal demand notice. It is argued payment was made by way of ECS and not made by way of cheque. These are the security cheques which have been misused by the complainant and accused has no liability to pay the same.
7. The main ingredient of Section 138 of the Act are as follows: i. The accused issued cheque on an account maintained by him with a bank.
ii. The said cheque has been issued in discharge of any legal debt or CC No. :11768/09 Axis Bank v. Ravinder Kr Jain 5/13 other liability. As per the explanation given in Section 138 of the Act, debt or other liability means a legally enforceable debt or other liability.
iii. 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.
iv. When the aforesaid cheque was presented for encashment, the same was returned unpaid / dishonored.
v. 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 return of the cheque.
vi. 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 of the Act. Keeping in mind the above stated ingredients, appreciation of evidence and material on record is required.
8. It is admitted case of both the parties that cheques in question were signed by the accused. It is further admitted case that accused had entered CC No. :11768/09 Axis Bank v. Ravinder Kr Jain 6/13 into an agreement for grant of loan with the complainant. Thus, the initial onus for raising presumption under Section 139 of the Act is discharged by the complainant. Now it was for the accused to rebut the presumption under Section 139 of the Act by leading direct evidence or by showing preponderance of probabilities in his favour.
9. Accused has stated that he did not receive any legal notice Ex. CW1/7 from the complainant. It is argued on behalf of the accused that signatures on the AD Card Ex. CW1/11 and Ex. CW1/12 is not that of the accused. Accused has not produced any proof or evidence to show that the signatures on Ex. CW1/11 and Ex. CW1/12 are not his. Further , the signatures are on Ex. CW1/11 and Ex. CW1/12 are found similar to the signatures on the bail bond and the notice u/s 251 CrPC as well as his signatures at the time of statement u/s 313 CrPC and at the time of defence evidence.
10. Moreover, accused did not examine the postal authorities to show that he did not receive the legal demand notice. Accused has also not raised any issue with regard to address on which legal notice Ex. CW1/7 was sent. Accused has also raised an issue pertaining to the fact that legal notice dt. 10.02.2009 sent through U. P. C. and registered post CC No. :11768/09 Axis Bank v. Ravinder Kr Jain 7/13 was not sent to him within the statutory period of 30 days. Perusal of the return memo Ex. CW1/5 clearly shows the date as 10.02.2009. The day on which the information of dishonour is received from the bank has to be excluded for the purpose of computation of the period of 30 days. Thus, the legal notice sent on 12.03.2009 is well within the statutory period of 30 days. Hence, this argument of the accused is not tenable. DW1 has confirmed the address mentioned on Ex. CW1/7 to be his correct address.
11. In the background of above mentioned discussion there is presumption in favour of complainant and against the accused to the effect that legal notice was sent to the accused and received by him within the statutory period. Even if the accused pleads that no notice was served on him then according to CC Alavi Haji v. Palapetty Muhammed 2007 Cri.LJ 3214 it has been held that :
"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 U/s. 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 and, therefore, the complaint is liable to be rejected".
12. Another offshoot of the probable defence of the accused is that CC No. :11768/09 Axis Bank v. Ravinder Kr Jain 8/13 cheques were security purpose. Accused has reiterated the same in his statement u/s 313 CrPC . CW1 has denied in his cross examination that it was a security cheque. Thus, the situation is evenly poised. In order to believe any one version, I have to see the totality of facts and circumstances of this case as neither party has given any evidence in support of their version except asserting themselves.
13. In the case in hand, the signature on the cheques in question is that of the accused is not disputed. The accused has stated that the said cheques were issued by him in favour of the complainant. Even if we believe that the cheques in question were given blank signed by the accused, then it is not going to help the cause of accused. Even though not mentioned by the parties, the Court has relied on the case laws of MOJJ Engineering Systems Ltd. v. A. B. Sugars Ltd. 154 (2008) DLT 579, T. Nagappa v. Y.R. Murlidhar, AIR 2008 SC 2010 and Ravi Chopra v. State [Delhi] Crl. M. C. 5291 of 2006 & Crl. M. A.No. 8961 of 2006, to come to the conclusion that filling up of the blank cheque by the payee is different from committing a material alteration. Prima facie when a person hands over an undated cheque for a certain amount to the opposite party, then he gives authority to the opposite party to complete CC No. :11768/09 Axis Bank v. Ravinder Kr Jain 9/13 the necessary details in the said cheque. Since an undated cheque cannot be encashed, it can only mean that the accused in this case, had authorized the complainant to enter an appropriate date on it. Keeping in mind the observations of the higher Courts in the case laws mentioned above, it matters little if the name of the payee, date and amount are filled up at a subsequent point in time.
14. DW1 during crossexamination was confronted with the photocopies of the demand draft mark A, by way of which loan amount was disbursed to him. DW1 has admitted that 3 demand drafts bearing no. 112065, 112066 and 112067 were sent to him by the UTI Bank which are placed as mark A on record. He stated that the 2 DDs bearing no 112065 and 112066 were given by the complainant to ICICI Bank directly and not to him. Later on he admitted that he was having a loan with ICICI Bank which was repaid by way of the two demand drafts in favour of the ICICI Bank by the complainant. Thus, the accused has admitted his loan liability. Further, he admitted that the EMI of the loan is Rs. 22,029/ and he is liable to make the payments of the dishonoured cheques. It is clear that it were the EMI cheque and not the security cheques.
15. Even though not relied by the parties, in the case of First CC No. :11768/09 Axis Bank v. Ravinder Kr Jain 10/13 Learning Quest Pvt. Ltd Vs. M/s. Tera Construction Pvt. Ltd 2007 (4) CC Cases (HC) 310, it is held that where issue of cheque is not denied by the accused, then onus is on him to prove as to how and why the cheque in question was issued. It is argued on behalf of the accused that no loan recall notice was ever served upon the accused. Counsel for the complainant has argued that the loan was not recalled in this case. It is the EMI amount for which the cheques in question were given. Accused has argued that the mode of payment was by way of ECS. CW1 during cross examination has stated that no specific mode on payment is specified and the customer can make payment through any mode like cheque, cash, ECS, DD etc. Thus, the defence of the accused is not tenable in the absence of any documentary evidence to substantiate his version.
16. It is neither suggested nor raised as a defence that cheque in question were not given by accused against any consideration. In these circumstances, presumption under Section 118 (a) and Section 139 of the Act is raised in favor of the complainant and is not rebutted by the accused in this case. Hence, cheques in question were given against the legal enforceable liability.
CC No. :11768/09 Axis Bank v. Ravinder Kr Jain 11/13
17. It is pertinent to mention that the Ld. Counsel for the accused has raised an objection that CW1 is not duly authorized to file this complaint as his power of the attorney does not bear the date of execution. In my view the said objection is without merit. In this regard I rely upon the following cases where it is held in United Bank Of India v. Naresh Kumar, AIR 1997 SC 3.
"...where the Courts came to a conclusion that money had been taken by certain parties from bank and certain persons had stood as guarantors and that the claim of the bank was justified it will be a travesty of justice if the bank is to be non suited for a technical reason...
...In cases where suits are instituted or defended on behalf of a public corporation like bank, public interest should not be permitted to be defeated on a mere technicality. Procedural defects which do not go to the root of the matter should not be permitted to defeat a just cause... ...Procedure, to ensure that injustice is not done to any party who has a just case. As far as possible a substantive right should not be allowed to be defeated on account of a procedural irregularity which is curable..."
18. This Court is of the view that procedural law is a hand maid of justice and not the head mistress. Technical defects in filing the complaint do not defeat the substantive rights of the complainant. As in case of M/s. M. M. T. C. Ltd. v. M/s Medchal Chemicals & Pharma P. Ltd. CC No. :11768/09 Axis Bank v. Ravinder Kr Jain 12/13 2002 (1) JCC 15, Hon'ble Supreme Court held that :
"...the only criteria under Section 142 is that the complaint must be filed by the payee or the holder in due course and this criteria is satisfied if the complaint is filed in the name and on behalf of the company..."
Thus, in the given factual matrix, only one view is possible and which is that the accused has not paid the cheques in question, due against him. Keeping in view the discussion above made, the complainant is able to prove the ingredients of section 138 of the Act beyond reasonable doubt. Accused is not able to make out a probable defence in his favour. The accused stands convicted under Section 138 of the Act.
19. List for hearing the convict on the quantum of sentence on 16th November, 2011.
Announced in the open Court Susheel Bala Dagar
on this 5th day of November, 2011 Metropolitan Magistrate
Dwarka Courts, Delhi.
All pages signed.
CC No. :11768/09 Axis Bank v. Ravinder Kr Jain 13/13